GALAXY FUND /DE/, 485BPOS, 2000-11-30

GALAXY FUND /DE/
485BPOS, 2000-11-30

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<PAGE>

As filed with the Securities and Exchange Commission on November 30, 2000
Securities Act File No. 33-4806
Investment Company Act File No. 811-4636
================================================================================

SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

PRE-EFFECTIVE AMENDMENT NO. /X/

POST-EFFECTIVE AMENDMENT NO. 51 /X/
--

and

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/

Amendment No. 52 /X/
--

The Galaxy Fund
(Exact Name of Registrant as Specified in Charter)
4400 Computer Drive
Westborough, Massachusetts 01581-5108
(Address of Principal Executive Offices)
Registrant's Telephone Number:
(877) 289-4252

W. Bruce McConnel, III
DRINKER BIDDLE & REATH LLP
One Logan Square
18th and Cherry Streets
Philadelphia, Pennsylvania 19103
(Name and Address of Agent for Service)

Copy to:
William Greilich, Vice President
PFPC Inc.
4400 Computer Drive
Westborough, Massachusetts 01581-5108

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

[X] immediately upon filing pursuant to paragraph (b)

[ ] on [date] pursuant to paragraph (b)

[ ] 60 days after filing pursuant to paragraph (a)(i)
[ ] on [date] pursuant to paragraph (a)(i)
[ ] 75 days after filing pursuant to paragraph (a)(ii)
[ ] on [date] pursuant to paragraph (a)(ii) of Rule 485.

If appropriate, check the following box:

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

Title of Securities Being Registered: Shares of Beneficial Interest.

<PAGE>

[Front cover page]

Prospectus
November 30, 2000

The Galaxy Fund
Galaxy Money Market Portfolios

Galaxy Prime Reserves
Galaxy Tax-Exempt Reserves
Galaxy Government Reserves

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.

QUICK & REILLY
Member New York Stock Exchange

<PAGE>

CONTENTS

<TABLE>
<S> <C>
1 RISK/RETURN SUMMARY
1 Introduction
2 Galaxy Prime Reserves
5 Galaxy Tax-Exempt Reserves
9 Galaxy Government Reserves
12 Additional information about risk
13 Investor guidelines

14 FUND MANAGEMENT

15 HOW TO INVEST IN THE FUNDS
15 Buying and selling shares
15 HOW TO BUY SHARES
16 HOW TO SELL SHARES
16 OTHER TRANSACTION POLICIES

17 Distribution and shareholder service fees

18 DIVIDENDS, DISTRIBUTIONS AND TAXES

19 FINANCIAL HIGHLIGHTS
</TABLE>

<PAGE>

RISK/RETURN SUMMARY

INTRODUCTION

This prospectus describes the Galaxy Prime Reserves, Galaxy Tax-Exempt
Reserves and Galaxy Government Reserves (the "Funds"), three money market
portfolios offered by The Galaxy Fund. The Funds invest primarily in
short-term debt obligations, commonly known as money market instruments, that
are determined by the Funds' investment adviser to carry very little risk.
Money market instruments purchased by the Funds must meet strict requirements
as to investment quality, maturity and diversification. The Funds generally
don't 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 Fund must be 90 days or less. Each Fund tries to
maintain its share price at $1.00 to protect your investment from loss.

Shares of the Funds are offered to customers of Quick & Reilly, Inc. ("Quick and
Reilly"), an affiliate of the Funds' investment adviser, who maintain a Quick
Asset-Registered Trademark- account with Quick & Reilly.

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

[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.

WHICH FUND IS RIGHT FOR YOU?

Not all mutual funds are right for all investors. Your investment goals and
tolerance for risk will determine which Fund is right for you. On page 13,
you'll find a table which sets forth general guidelines to help you decide which
of the Funds is best suited to you.

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.

-------------------------------------------------------------------------------
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 FUNDS SEEK TO PRESERVE THE VALUE OF YOUR INVESTMENT AT
$1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUNDS.

1
<PAGE>

GALAXY PRIME RESERVES

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 issued
by financial institutions such as banks and broker-dealers.

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:]
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.

2
<PAGE>

GALAXY PRIME RESERVES

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.

YEAR-BY-YEAR TOTAL RETURNS - CALENDAR YEARS

The bar chart shows the Fund's performance during the last calendar year.

[Sidenote:]
BEST QUARTER 1.18% for the quarter ending December 31, 1999
WORST QUARTER 1.00% for the quarter ending June 30, 1999

[CHART]

--------------------
1999
--------------------
4.33%
--------------------

The Fund's total return for the nine months ended September 30, 2000 was 4.11%.

AVERAGE ANNUAL TOTAL RETURNS

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

<TABLE>
<CAPTION>
-------------------------------------------------------
1 YEAR SINCE INCEPTION
-------------------------------------------------------
<S> <C> <C>
Galaxy Prime
Reserves 4.33% 4.34% (9/22/98)
-------------------------------------------------------
</TABLE>

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

3
<PAGE>

GALAXY PRIME RESERVES

FEES AND EXPENSES OF THE FUND

There are no sales charges when you buy or sell shares of the Fund. The
following table shows the fees and expenses you may pay when you buy and hold
shares of the Fund. Fees charged by Quick & Reilly for services related to an
investment in the Fund are in addition to and are not reflected in the fees
and expenses in the following table. These fees will be deducted each month
from your Fund account and will reduce your yield.

<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES (EXPENSES DEDUCTED FROM THE FUND'S ASSETS)
--------------------------------------------------------------------------------
DISTRIBUTION AND TOTAL FUND
MANAGEMENT SERVICE (12b-1) OTHER OPERATING
FEES FEES EXPENSES EXPENSES
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Galaxy Prime
Reserves 0.36% 0.56%(1) 0.11% 1.03%
--------------------------------------------------------------------------------
</TABLE>

(1) The Fund may pay Distribution and service (12b-1) fees up to a maximum of
1.00% of the Fund's average daily net assets but will limit such fees to no
more than 0.56% of average daily net assets during the current fiscal year.

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
- 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>
Galaxy Prime
Reserves $105 $328 $569 $1,259
-------------------------------------------------------------------
</TABLE>

4
<PAGE>

GALAXY TAX-EXEMPT RESERVES

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 net 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 net 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.

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.

5
<PAGE>

GALAXY TAX-EXEMPT RESERVES

[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.

- 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.

6
<PAGE>

GALAXY TAX-EXEMPT RESERVES

HOW THE FUND HAS PERFORMED

YEAR-BY-YEAR TOTAL RETURNS - CALENDAR YEARS

The bar chart shows the Fund's performance during the last calendar year.

[Sidenote:]
BEST QUARTER 0.64% for the quarter ending December 31, 1999
WORST QUARTER 0.47% for the quarter ending March 31, 1999

[CHART]

-------------------
1999
-------------------
2.23%
-------------------

The Fund's total return for the nine months ended September 30, 2000 was 2.27%.

AVERAGE ANNUAL TOTAL RETURNS

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

<TABLE>
<CAPTION>
-----------------------------------------------------
1 YEAR SINCE INCEPTION
-----------------------------------------------------
<S> <C> <C>
Galaxy Tax-
Exempt Reserves 2.23% 2.25% (9/22/98)
-----------------------------------------------------
</TABLE>

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

7
<PAGE>

GALAXY TAX-EXEMPT RESERVES

[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% 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.

FEES AND EXPENSES OF THE FUND

<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES (EXPENSES DEDUCTED FROM THE FUND'S ASSETS)
--------------------------------------------------------------------------------
DISTRIBUTION AND TOTAL FUND
MANAGEMENT SERVICE (12b-1) OTHER OPERATING
FEES FEES EXPENSES EXPENSES
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Galaxy Tax-
Exempt
Reserves 0.40% 0.51%(1) 0.16% 1.07%
--------------------------------------------------------------------------------
</TABLE>

(1) The Fund may pay Distribution and service (12b-1) fees up to a maximum of
1.00% of the Fund's average daily net assets but will limit such fees to no
more than 0.51% of average daily net assets during the current fiscal year.

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:

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>
Galaxy Tax-
Exempt Reserves $109 $340 $590 $1,306
--------------------------------------------------------------------
</TABLE>

8
<PAGE>

GALAXY GOVERNMENT RESERVES

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 primarily in U.S. Government obligations, including U.S.
Treasury obligations and obligations of U.S. Government agencies and
instrumentalities. The Fund also invests in repurchase agreements backed by
these obligations.

[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 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 have historically
involved little credit risk, if an issuer fails to pay interest or repay
principal, the value of your investment could decline.

- 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.

9
<PAGE>

GALAXY GOVERNMENT RESERVES

HOW THE FUND HAS PERFORMED

YEAR-BY-YEAR TOTAL RETURNS - CALENDAR YEARS

The bar chart shows the Fund's performance during the last calendar year.

[Sidenote:]
BEST QUARTER 1.14% for the quarter ending December 31, 1999
WORST QUARTER 0.96% for the quarter ending June 30, 1999

[CHART]

--------------------
1999
--------------------
4.19%
--------------------

The Fund's total return for the nine months ended September 30, 2000 was 4.01%.

AVERAGE ANNUAL TOTAL RETURNS

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

<TABLE>
<CAPTION>
--------------------------------------------------
1 YEAR SINCE INCEPTION
--------------------------------------------------
<S> <C> <C>
Galaxy
Government
Reserves 4.19% 4.22% (9/22/98)
--------------------------------------------------
</TABLE>

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

10
<PAGE>

GALAXY GOVERNMENT RESERVES

FEES AND EXPENSES OF THE FUND

ANNUAL FUND OPERATING EXPENSES (EXPENSES DEDUCTED FROM THE FUND'S ASSETS)

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------
DISTRIBUTION AND TOTAL FUND
MANAGEMENT SERVICE (12b-1) OTHER OPERATING
FEES FEES EXPENSES EXPENSES
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Galaxy
Government
Reserves 0.40% 0.51%(1) 0.15% 1.06%
---------------------------------------------------------------------------------
</TABLE>

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:

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>
Galaxy
Government
Reserves $108 $337 $585 $1,294
--------------------------------------------------------------------
</TABLE>

11
<PAGE>

ADDITIONAL INFORMATION ABOUT RISK

The main risks associated with an investment in each of the 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 aren't part of its main investment strategy during unfavorable market
conditions. These investments may include cash (which will not earn any income)
and, in the case of the Galaxy Tax-Exempt Reserves, short-term 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 the
Fund's net assets. This strategy could prevent a Fund from achieving its
investment objective.

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.

12
<PAGE>

INVESTOR GUIDELINES

The table below provides information as to which type of investor might want to
invest in each of the Funds. It's meant as a general guide only. TAX-EXEMPT
FUNDS ARE GENERALLY NOT APPROPRIATE INVESTMENTS FOR TAX-DEFERRED RETIREMENT
ACCOUNTS, SUCH AS IRAS, BECAUSE THEIR RETURNS BEFORE TAXES ARE GENERALLY LOWER
THAN THOSE OF TAXABLE FUNDS. Consult your Quick & Reilly Personal Broker for
help in deciding which Fund is right for you.

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
GALAXY FUND FOR INVESTORS WHO WANT...
--------------------------------------------------------------------------------
<S> <C>
Galaxy Prime Reserves - a flexible and convenient way to manage cash
while earning money market returns
--------------------------------------------------------------------------------
Galaxy Tax-Exempt Reserves - a way to earn money market returns that are
free from federal income tax
--------------------------------------------------------------------------------
Galaxy Government Reserves - a way to earn money market returns with the
extra margin of safety associated with U.S.
Government obligations
--------------------------------------------------------------------------------
</TABLE>

13
<PAGE>

FUND MANAGEMENT

ADVISER

The Adviser, an indirect wholly-owned subsidiary of FleetBoston Financial
Corporation, was established in 1984 and has its main office at 100 Federal
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 September 30, 2000, the
Adviser managed over $102 billion in assets.

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 portfolio securities, and maintains related records.

ALLOCATION OF ORDERS FOR PORTFOLIO SECURITIES

The Adviser may allocate orders for the purchase and sale of portfolio
securities to certain financial institutions, including those that are
affiliated with the 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 will allocate orders to such institutions only if it believes that the
quality of the transaction and the commission are comparable to what they would
be with other qualified brokerage firms.

MANAGEMENT FEES

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>
Galaxy Prime Reserves 0.36%
--------------------------------------------------------------------------------
Galaxy Tax-Exempt Reserves 0.40%
--------------------------------------------------------------------------------
Galaxy Government Reserves 0.40%
--------------------------------------------------------------------------------
</TABLE>

14
<PAGE>

HOW TO INVEST IN THE FUNDS

BUYING AND SELLING SHARES

You can buy and sell shares of the Funds on any business day. A business day is
any day that Galaxy's distributor, Galaxy's custodian and Quick & Reilly are
open for business.

If your order to buy shares is received and accepted by Galaxy's distributor
before 4:00 p.m. (Eastern time) on a business day, the price you pay will be the
NAV next determined (and you'll begin receiving dividends on the day of
purchase) if Galaxy's custodian receives the purchase price in immediately
available funds by 4:00 p.m. (Eastern time) on the day of your order. The price
at which you sell shares is the NAV next determined after receipt of your order
in proper form as described below. Shares do not earn dividends on the day a
redemption order is effected.

NAV is determined on each day the New York Stock Exchange is open for trading as
of the close of regular trading that day (usually 4:00 p.m. Eastern time). The
New York Stock Exchange is generally open for trading every Monday through
Friday, except for national holidays.

The Funds' assets are valued at amortized cost, which is approximately equal to
market value.

[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, minus the value of the Fund's
liabilities, divided by the number of shares of the Fund held by investors.

[Sidenote:]
MINIMUM INVESTMENT AMOUNTS
The minimum initial investment to open a Fund account is $500. There are no
minimum investment requirements for additional investments.

HOW TO BUY SHARES

Shares of the Funds are offered to customers of Quick & Reilly who maintain a
Quick Asset-Registered Trademark- account with Quick & Reilly.

OPENING A FUND ACCOUNT
Contact your Quick & Reilly Personal Broker to open a Fund account. Account
balances will appear on your Quick & Reilly monthly statement.

ADDITIONAL INVESTMENTS
You can make additional investments to an existing Fund account using either of
the methods described below:

BY CHECK THROUGH QUICK & REILLY
Mail or deliver your check payable to U.S. Clearing, a division of Fleet
Securities, Inc., to your Quick & Reilly Personal Broker who will deposit it
into the Fund(s). Please identify the appropriate Fund(s) and indicate your
brokerage account number on your check or draft.

BY SWEEP
Quick & Reilly has available an automatic "sweep" for customers in the Funds. If
you request the sweep arrangement, all cash balances are moved into one of the
Funds on a daily basis by Quick & Reilly on your behalf. Sales proceeds in total
from trades will be swept into the designated Fund on settlement date.

15
<PAGE>

U.S. Clearing is responsible for sending your order to Galaxy's distributor and
for wiring payment to Galaxy's custodian. U.S. Clearing will usually hold your
shares of record in its name and receive all confirmations of purchases and
sales. Your ownership of the shares will be recorded by U.S. Clearing and
reflected in the account statements provided to you by Quick & Reilly.

HOW TO SELL SHARES

You can sell your Fund shares by using any of the methods described below:

BY CONTACTING YOUR QUICK & REILLY PERSONAL BROKER
Instruct your Quick & Reilly Personal Broker to order a withdrawal from your
Fund and issue a check payable to you.

BY SWEEP
Quick & Reilly's automatic "sweep" moves money automatically from your Fund for
use by your Quick & Reilly brokerage account to cover security purchases or
other charges to your account.

BY CHECKWRITING
This service enables you to write checks made payable to anyone. Checks
cannot be written for more than the principal balance (not including any
accrued dividends) in your Fund. To initiate this service, you must fill out
a signature card which can be obtained from your Quick & Reilly Personal
Broker. There is no separate charge for the checkwriting service and your
checks are provided free of charge. You will continue to receive the daily
dividends declared on Fund shares to be sold until the day that the check is
presented for payment.

U.S. Clearing 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 U.S. Clearing, but U.S. Clearing may charge your account
for services in connection with the sale of Fund shares. Contact your Quick &
Reilly Personal Broker for more information.

OTHER TRANSACTION POLICIES

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.

Payment for shares of a Fund in the amount of $1,000,000 or more may be made, at
the discretion of the Fund, in the form of securities that are permissible
investments for the Fund. See the SAI or contact your Quick & Reilly Personal
Broker for more information.

16
<PAGE>

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 your Quick & Reilly Personal Broker within
three business days but Galaxy reserves the right to send sales proceeds within
seven business days if sending proceeds earlier could adversely affect a Fund.

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

DISTRIBUTION AND SHAREHOLDER SERVICE FEES

Galaxy has adopted a plan under Rule 12b-1 that allows each Fund to pay fees for
selling and distributing shares and for services provided to shareholders. Each
Fund can pay distribution and shareholder service (12b-1) fees at an annual rate
of up to 1.00% of each Fund's average daily net assets. The Galaxy Prime
Reserves does not intend to pay more than 0.56%, and the Galaxy Tax-Exempt
Reserves and Galaxy Government Reserves do not intend to pay more than 0.51%, of
average daily net assets in distribution and shareholder service (12b-1) fees
during the current fiscal year. Because 12b-1 fees are paid on an ongoing basis,
over time they increase the cost of your investment and may cost more than
paying other sales charges.

17
<PAGE>

DIVIDENDS, DISTRIBUTIONS AND TAXES

Each Fund declares and pays dividends from net investment income daily. Although
the Funds do not expect to realize net long-term capital gains, any capital
gains realized will be distributed no less frequently than annually. Dividends
and distributions will be reinvested in additional shares of a Fund. The
crediting and payment of dividends to your account will be in accordance with
the procedures governing your account at Quick & Reilly.

GALAXY PRIME RESERVES AND GALAXY GOVERNMENT RESERVES

Distributions by these Funds will generally be taxable to shareholders. Each of
these Funds expects that all, or substantially all, of its distributions will
consist of ordinary income. You will be subject to income tax on these
distributions. The one major exception to these tax principles is that
distributions on shares held by an IRA (or other tax-qualified plan) will not be
currently taxable.

GALAXY TAX-EXEMPT RESERVES

Distributions by this Fund 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 the Fund's investments, that a portion of the Fund's
distributions could be taxable to shareholders as ordinary income or capital
gains, but the Fund does not expect that this will be the case.

Interest on indebtedness incurred by a shareholder to purchase or carry shares
of this Fund generally will not be deductible for federal income tax purposes.

You should note that a portion of the exempt-interest dividends paid by the Fund
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.

ALL FUNDS

Taxable dividends paid in January may be taxable as if they had been paid the
previous December. Each year you'll receive in the mail federal tax information
on distributions paid by the Funds.

OTHER STATE AND LOCAL TAX MATTERS

Generally, shareholders may also be subject to state and local taxes on
distributions and redemptions. State income taxes may not apply however to the
portions of each Fund's distributions, if any, that are attributable to interest
on U.S. Government securities or on securities of a particular state, or
localities within a state.

18
<PAGE>

FINANCIAL HIGHLIGHTS

The financial highlights tables shown below will help you understand the
financial performance for the Funds for the fiscal year ended July 31, 2000 and
the period from September 22, 1998 (when each Fund began operations) through
July 31, 1999. Certain information reflects the financial performance of a
single share of each Fund. The total returns in the tables represent the rate
that an investor would have earned on an investment in each Fund, assuming all
dividends and distributions were reinvested. This information has been audited
by Ernst & Young LLP, independent auditors, whose report, along with the Funds'
financial statements, are included in the Funds' Annual Report and are
incorporated by reference into the SAI. The Annual Report and SAI are available
free of charge upon request.

GALAXY PRIME RESERVES
(For a share outstanding throughout each period)

<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
JULY 31, 2000 JULY 31, 1999(1)
------------- ----------------
<S> <C> <C>
Net asset value, beginning of period ......................... $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .................................... 0.05 0.04
-------------------------------------------------------------- --------- ---------
LESS DIVIDENDS:
Dividends from net investment income ..................... (0.05) (0.04)
-------------------------------------------------------------- --------- ---------
Net increase (decrease) in net asset value ................... -- --
Net asset value, end of period ............................... $1.00 $1.00
============================================================== ========= =========
Total return ................................................. 5.09% 3.59%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........................ $4,330,068 $4,250,399
RATIOS TO AVERAGE NET ASSETS:
Net investment income .................................... 4.98% 4.10%(3)
Operating expenses ....................................... 0.92% 0.96%(3)
</TABLE>

(1) The Fund commenced operations on September 22, 1998.
(2) Not annualized.
(3) Annualized.

19
<PAGE>

GALAXY TAX-EXEMPT RESERVES
(For a share outstanding throughout each period)

<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
JULY 31, 2000 JULY 31, 1999(1)
------------- ----------------
<S> <C> <C>
Net asset value, beginning of period ........................... $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ...................................... 0.03 0.02
---------------------------------------------------------------- --------- ---------
LESS DIVIDENDS:
Dividends from net investment income ....................... (0.03) (0.02)
---------------------------------------------------------------- --------- ---------
Net increase (decrease) in net asset value ..................... -- --
Net asset value, end of period ................................. $1.00 $1.00
================================================================ ========= =========
Total return ................................................... 2.77% 1.82%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) .......................... $169,133 $177,840
RATIOS TO AVERAGE NET ASSETS:
Net investment income ...................................... 2.72% 2.09%(3)
Operating expenses ......................................... 0.96% 0.99%(3)
</TABLE>

(1) The Fund commenced operations on September 22, 1998.
(2) Not annualized.
(3) Annualized.

20
<PAGE>

GALAXY GOVERNMENT RESERVES
(For a share outstanding throughout each period)

<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
JULY 31, 2000 JULY 31, 1999(1)
------------- ----------------
<S> <C> <C>
Net asset value, beginning of period ........................... $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ...................................... 0.05 0.03
---------------------------------------------------------------- --------- ---------
LESS DIVIDENDS:
Dividends from net investment income ....................... (0.05) (0.03)
---------------------------------------------------------------- --------- ---------
Net increase (decrease) in net asset value ..................... -- --
Net asset value, end of period ................................. $1.00 $1.00
================================================================ ========= =========
Total return ................................................... 4.94% 3.49%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ......................... $165,278 $156,853
RATIOS TO AVERAGE NET ASSETS:
Net investment income ..................................... 4.84% 4.00%(3)
Operating expenses ........................................ 0.95% 0.99%(3)
</TABLE>

(1) The Fund commenced operations on September 22, 1998.
(2) Not annualized.
(3) Annualized.

21
<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.

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 contacting your Quick & Reilly Personal
Broker or by writing to:

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

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 20549-6009
1-800-SEC-0330.

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
the SEC's e-mail address at [email protected].

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

[Fleet assigned code]

<PAGE>

[Front cover page]

Prospectus
November 30, 2000

The Galaxy Fund
Galaxy Money Market Portfolios

Galaxy Prime Reserves
Galaxy Tax-Exempt Reserves
Galaxy Government Reserves

U.S. Clearing,
a division of Fleet Securities, Inc.
Member New York Stock Exchange
Member SIPC

<PAGE>

CONTENTS

<TABLE>
<S> <C>
1 RISK/RETURN SUMMARY
1 Introduction
2 Galaxy Prime Reserves
5 Galaxy Tax-Exempt Reserves
8 Galaxy Government Reserves
12 Additional information about risk
13 Investor guidelines

14 FUND MANAGEMENT

15 HOW TO INVEST IN THE FUNDS
15 Buying and selling shares
15 HOW TO BUY SHARES
15 HOW TO SELL SHARES
16 OTHER TRANSACTION POLICIES

17 DISTRIBUTION AND SHAREHOLDER SERVICE FEES

18 DIVIDENDS, DISTRIBUTIONS AND TAXES

19 FINANCIAL HIGHLIGHTS
</TABLE>

<PAGE>

RISK/RETURN SUMMARY

INTRODUCTION

Shares of the Funds are offered to customers who maintain qualified accounts
with brokerage firms that are clients of U.S. Clearing, a division of Fleet
Securities, Inc. ("U.S. Clearing").

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

[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.

WHICH FUND IS RIGHT FOR YOU?

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.

1
<PAGE>

GALAXY PRIME RESERVES

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 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.

2
<PAGE>

GALAXY PRIME RESERVES

HOW THE FUND HAS PERFORMED

YEAR-BY-YEAR TOTAL RETURNS - CALENDAR YEARS

The bar chart shows the Fund's performance during the last calendar year.

[Sidenote:]
BEST QUARTER: 1.18% for the quarter ending December 31, 1999
WORST QUARTER: 1.00% for the quarter ending June 30, 1999

[CHART]
---------------------
1999
---------------------
4.33%
---------------------

The Fund's total return for the nine months ended September 30, 2000 was 4.11%.

AVERAGE ANNUAL TOTAL RETURNS

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

<TABLE>
<CAPTION>
---------------------------------------------------------------------------
SINCE
1 YEAR INCEPTION
---------------------------------------------------------------------------
<S> <C> <C>
Galaxy Prime
Reserves 4.33% 4.34% (9/22/98)
---------------------------------------------------------------------------
</TABLE>

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

3
<PAGE>

GALAXY PRIME RESERVES

FEES AND EXPENSES OF THE FUND

There are no sales charges when you buy or sell shares of the Fund. The
following table shows the fees and expenses you may pay when you buy and hold
shares of the Fund. Fees charged by U.S. Clearing for services related to an
investment in the Fund are in addition to and are not reflected in the fees
and expenses in the following table. These fees will be deducted each month
from your Fund account and will reduce your yield.

ANNUAL FUND OPERATING EXPENSES (EXPENSES DEDUCTED FROM THE FUND'S ASSETS)

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
DISTRIBUTION AND TOTAL FUND
MANAGEMENT SERVICE (12b-1) OTHER OPERATING
FEES FEES EXPENSES EXPENSES
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Galaxy Prime
Reserves 0.36% 0.56%(1) 0.11% 1.03%
-------------------------------------------------------------------------------
</TABLE>

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:

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>
Galaxy Prime
Reserves $105 $328 $569 $1,259
-------------------------------------------------------------------------------
</TABLE>

4
<PAGE>

GALAXY TAX-EXEMPT RESERVES

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 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.

5
<PAGE>

GALAXY TAX-EXEMPT RESERVES

- 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.

6
<PAGE>

GALAXY TAX-EXEMPT RESERVES

HOW THE FUND HAS PERFORMED

YEAR-BY-YEAR TOTAL RETURNS - CALENDAR YEARS

The bar chart shows the Fund's performance during the last calendar year.

[Sidenote:]
BEST QUARTER: 0.64% for the quarter ending December 31, 1999
WORST QUARTER: 0.47% for the quarter ending March 31, 1999

[CHART]

---------------------
1999
---------------------
2.23%
---------------------

The Fund's total return for the nine months ended September 30, 2000 was 2.27%.

AVERAGE ANNUAL TOTAL RETURNS

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

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
1 YEAR SINCE INCEPTION
-------------------------------------------------------------------------------
<S> <C> <C>
Galaxy Tax-Exempt
Reserves 2.23% 2.25% (9/22/98)
-------------------------------------------------------------------------------
</TABLE>

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

7
<PAGE>

GALAXY TAX-EXEMPT RESERVES

FEES AND EXPENSES OF THE FUND

ANNUAL FUND OPERATING EXPENSES (EXPENSES DEDUCTED FROM THE FUND'S ASSETS)

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
DISTRIBUTION AND TOTAL FUND
MANAGEMENT SERVICE (12b-1) OTHER OPERATING
FEES FEES EXPENSES EXPENSES
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Galaxy
Tax-Exempt
Reserves 0.40% 0.51%(1) 0.16% 1.07%
-------------------------------------------------------------------------------
</TABLE>

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:

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>
Galaxy Tax-Exempt
Reserves $109 $340 $590 $1,306
-------------------------------------------------------------------------------
</TABLE>

8
<PAGE>

GALAXY GOVERNMENT RESERVES

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

[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 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 have historically involved
little credit risk, if an issuer fails to pay interest or repay principal,
the value of your investment could decline.

- 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.

9
<PAGE>

GALAXY GOVERNMENT RESERVES

HOW THE FUND HAS PERFORMED

YEAR-BY-YEAR TOTAL RETURNS - CALENDAR YEARS

The bar chart shows the Fund's performance during the last calendar year.

[Sidenote:]
BEST QUARTER: 1.14% for the quarter ending December 31, 1999
WORST QUARTER: 0.96% for the quarter ending June 30, 1999

[CHART]

---------------------
1999
---------------------
4.19%
---------------------

The Fund's total return for the nine months ended September 30, 2000 was 4.01%.

AVERAGE ANNUAL TOTAL RETURNS

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

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
1 YEAR SINCE INCEPTION
-------------------------------------------------------------------------------
<S> <C> <C>
Galaxy Government
Reserves 4.19% 4.22% (9/22/98)
-------------------------------------------------------------------------------
</TABLE>

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

10
<PAGE>

GALAXY GOVERNMENT RESERVES

FEES AND EXPENSES OF THE FUND

ANNUAL FUND OPERATING EXPENSES (EXPENSES DEDUCTED FROM THE FUND'S ASSETS)

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
DISTRIBUTION AND TOTAL FUND
MANAGEMENT SERVICE (12b-1) OTHER OPERATING
FEES FEES EXPENSES EXPENSES
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Galaxy
Government
Reserves 0.40% 0.51%(1) 0.15% 1.06%
-------------------------------------------------------------------------------
</TABLE>

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:

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>
Galaxy
Government
Reserves $108 $337 $585 $1,294
-------------------------------------------------------------------------------
</TABLE>

11
<PAGE>

ADDITIONAL INFORMATION ABOUT RISK

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

TEMPORARY DEFENSIVE POSITIONS

OTHER TYPES OF INVESTMENTS

12
<PAGE>

INVESTOR GUIDELINES

The table below provides information as to which type of investor might want to
invest in each of the Funds. It's meant as a general guide only. TAX-EXEMPT
FUNDS ARE GENERALLY NOT APPROPRIATE INVESTMENTS FOR TAX-DEFERRED RETIREMENT
ACCOUNTS, SUCH AS IRAS, BECAUSE THEIR RETURNS BEFORE TAXES ARE GENERALLY LOWER
THAN THOSE OF TAXABLE FUNDS. Consult your Account Executive for help in deciding
which Fund is right for you.

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
GALAXY FUND FOR INVESTORS WHO WANT...
-------------------------------------------------------------------------------
<S> <C>
Galaxy Prime Reserves a flexible and convenient way to manage cash while
earning money market returns
-------------------------------------------------------------------------------
Galaxy Tax-Exempt Reserves a way to earn money market returns that are free
from federal income tax
-------------------------------------------------------------------------------
Galaxy Government Reserves a way to earn money market returns with the extra
margin of safety associated with U.S. Government
obligations
-------------------------------------------------------------------------------
</TABLE>

<PAGE>

FUND MANAGEMENT

ADVISER

ALLOCATION OF ORDERS FOR PORTFOLIO SECURITIES

MANAGEMENT FEES

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>
Galaxy Prime Reserves 0.36%
-------------------------------------------------------------------------------
Galaxy Tax-Exempt Reserves 0.40%
-------------------------------------------------------------------------------
Galaxy Government Reserves 0.40%
-------------------------------------------------------------------------------
</TABLE>

14
<PAGE>

HOW TO INVEST IN THE FUNDS

BUYING AND SELLING SHARES

You can buy and sell shares of the Funds on any business day. A business day is
any day that Galaxy's distributor, Galaxy's custodian and U.S. Clearing are open
for business.

The Funds' assets are valued at amortized cost, which is approximately equal to
market value.

[Sidenote:]
MINIMUM INVESTMENT AMOUNTS
There is no minimum initial investment to open a Fund account. The minimum for
additional investments in an existing Fund account is $100.

HOW TO BUY SHARES
Shares of the Funds are offered to customers who maintain qualified accounts
with brokerage firms that are clients of U.S. Clearing.

OPENING A FUND ACCOUNT
Contact your Account Executive to open a Fund account. Account balances will
appear on your monthly statement.

ADDITIONAL INVESTMENTS
You can make additional investments to an existing Fund account using either of
the methods described below:

BY CHECK
Mail or deliver your check payable to U.S. Clearing to your Account Executive
who will deposit it into the Fund(s). Please identify the appropriate Fund(s)
and indicate your brokerage account number on your check or draft.

BY SWEEP
U.S. Clearing has available an automatic "sweep" for customers in the Funds. If
you request the sweep arrangement, all cash balances are moved into one of the
Funds on a daily basis by U.S. Clearing on your behalf. Sales proceeds in total
from trades will be swept into the designated Fund on settlement date.

15
<PAGE>

HOW TO SELL SHARES
You can sell your Fund shares by using any of the methods described below:

BY CONTACTING YOUR ACCOUNT EXECUTIVE
Instruct your Account Executive to order a withdrawal from your Fund and issue a
check payable to you.

BY SWEEP
U.S. Clearing's automatic "sweep" moves money automatically from your Fund for
use by your brokerage account to cover security purchases or other charges to
your account.

BY CHECKWRITING
This service enables you to write checks made payable to anyone. Checks cannot
be written for more than the principal balance (not including any accrued
dividends) in your Fund. To initiate this service, you must fill out a signature
card which can be obtained from your Account Executive. There is no separate
charge for the checkwriting service and your checks are provided free of charge.
You will continue to receive the daily dividends declared on Fund shares to be
sold until the day that the check is presented for payment.

OTHER TRANSACTION POLICIES

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 normally pays you cash when you sell your shares, but it has the right to
deliver securities owned by a Fund instead of cash.

16
<PAGE>

When you sell these securities, you'll pay brokerage charges.

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

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

DISTRIBUTION AND SHAREHOLDER SERVICE FEES

Galaxy has adopted a plan under Rule 12b-1 that allows each Fund to pay fees
for selling and distributing shares and for services provided to
shareholders. Each Fund can pay distribution and shareholder service (12b-1)
fees at an annual rate of up to 1.00% of each Fund's average daily net
assets. The Galaxy Prime Reserves does not intend to pay more than 0.56%, and
the Galaxy Tax-Exempt Reserves and Galaxy Government Reserves do not intend
to pay more than 0.51%, of average daily net assets in distribution and
shareholder service (12b-1) fees during the current fiscal year. Because
12b-1 fees are paid on an ongoing basis, over time they increase the cost of
your investment and may cost more than paying other sales charges.

17
<PAGE>

DIVIDENDS, DISTRIBUTIONS AND TAXES

GALAXY PRIME RESERVES AND GALAXY GOVERNMENT RESERVES

GALAXY TAX-EXEMPT RESERVES

Interest on indebtedness incurred by a shareholder to purchase or carry shares
of this Fund generally will not be deductible for federal income tax purposes.

ALL FUNDS

Taxable dividends paid in January may be taxable as if they had been paid the
previous December. Each year you'll receive in the mail federal tax information
on distributions paid by the Funds.

OTHER STATE AND LOCAL TAX MATTERS

18
<PAGE>

FINANCIAL HIGHLIGHTS

GALAXY PRIME RESERVES
(For a share outstanding throughout each period)

<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
JULY 31, 2000 JULY 31, 1999(1)
----------------- ----------------
<S> <C> <C>
Net asset value, beginning of period.......................... $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income.................................... 0.05 0.04
-------------------------------------------------------------- ----------------- ----------------
LESS DIVIDENDS:
Dividends from net investment income..................... (0.05) (0.04)
-------------------------------------------------------------- ----------------- ----------------
Net increase (decrease) in net asset value.................... -- --
Net asset value, end of period................................ $1.00 $1.00
============================================================== ================= ================
Total return.................................................. 5.09% 3.59%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's)........................ $4,330,068 $4,250,399
RATIOS TO AVERAGE NET ASSETS:
Net investment income.................................... 4.98% 4.10%(3)
Operating expenses....................................... 0.92% 0.96%(3)
</TABLE>

(1) The Fund commenced operations on September 22, 1998.
(2) Not annualized.
(3) Annualized.

19
<PAGE>

GALAXY TAX-EXEMPT RESERVES
(For a share outstanding throughout each period)

<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
JULY 31, 2000 JULY 31, 1999(1)
----------------- ----------------
<S> <C> <C>
Net asset value, beginning of period.......................... $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income.................................... 0.03 0.02
-------------------------------------------------------------- ----------------- ----------------
LESS DIVIDENDS:
Dividends from net investment income..................... (0.03) (0.02)
-------------------------------------------------------------- ----------------- ----------------
Net increase (decrease) in net asset value.................... -- --
Net asset value, end of period................................ $1.00 $1.00
============================================================== ================= ================
Total return.................................................. 2.77% 1.82%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's)........................ $169,133 $177,840
RATIOS TO AVERAGE NET ASSETS:
Net investment income.................................... 2.72% 2.09%(3)
Operating expenses....................................... 0.96% 0.99%(3)
</TABLE>

(1) The Fund commenced operations on September 22, 1998.
(2) Not annualized.
(3) Annualized.

20
<PAGE>

GALAXY GOVERNMENT RESERVES
(For a share outstanding throughout each period)

<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
JULY 31, 2000 JULY 31, 1999(1)
----------------- ----------------
<S> <C> <C>
Net asset value, beginning of period.......................... $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income.................................... 0.05 0.03
-------------------------------------------------------------- ----------------- ----------------
LESS DIVIDENDS:
Dividends from net investment income..................... (0.05) (0.03)
-------------------------------------------------------------- ----------------- ----------------
Net increase (decrease) in net asset value.................... -- --
Net asset value, end of period................................ $1.00 $1.00
============================================================== ================= ================
Total return.................................................. 4.94% 3.49%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's)........................ $165,278 $156,853
RATIOS TO AVERAGE NET ASSETS:
Net investment income.................................... 4.84% 4.00%(3)
Operating expenses....................................... 0.95% 0.99%(3)
</TABLE>

(1) The Fund commenced operations on September 22, 1998.
(2) Not annualized.
(3) Annualized.

<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.

You can get a free copy of these documents, request other information about the
Funds and make shareholder inquiries by contacting your Account Executive or by
writing to:

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

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

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

[Fleet Assigned Code]

<PAGE>

THE GALAXY FUND
STATEMENT OF ADDITIONAL INFORMATION

NOVEMBER 30, 2000

GALAXY PRIME RESERVES
GALAXY TAX-EXEMPT RESERVES
GALAXY GOVERNMENT RESERVES

This Statement of Additional Information is not a prospectus. The
prospectuses for the Funds dated November 30, 2000, as they may be supplemented
or revised from time to time (the "Prospectuses"), as well as the Funds' Annual
Report to Shareholders dated July 31, 2000 (the "Annual Report"), may be
obtained, without charge, by writing:

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

or by calling 1-877-BUY-GALAXY (1-877-289-4252)

The financial statements included in the Annual Report and the report
thereon of Ernst & Young LLP, The Galaxy Fund's independent auditors, are
incorporated by reference into this Statement of Additional Information.

<PAGE>

TABLE OF CONTENTS

<TABLE>
Page
<S> <C>
GENERAL INFORMATION..............................................................1
DESCRIPTION OF GALAXY AND ITS SHARES.............................................1
INVESTMENT STRATEGIES, POLICIES AND RISKS........................................3
Prime Reserves..........................................................3
Tax-Exempt Reserves.....................................................4
Government Reserves.....................................................4
Other Investment Policies and Risk Considerations.......................4
Quality Requirements....................................................4
U.S. Government Obligations.............................................5
Money Market Instruments................................................6
Municipal Securities....................................................7
Stand-By Commitments....................................................9
Tender Option Bonds....................................................10
Variable and Floating Rate Instruments.................................10
Repurchase and Reverse Repurchase Agreements...........................11
When-Issued and Delayed Settlement Transactions........................12
Securities Lending - Prime Reserves and Government Reserves............13
Guaranteed Investment Contracts - Prime Reserves.......................13
Asset-Backed Securities - Prime Reserves...............................14
Investment Company Securities..........................................15
Portfolio Securities Generally.........................................15
INVESTMENT LIMITATIONS..........................................................15
NET ASSET VALUE.................................................................18
DIVIDENDS.......................................................................19
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION..................................20
Special Procedures for In-Kind Payments................................20
TAXES ..........................................................................21
In General.............................................................21
Tax-Exempt Reserves....................................................21
State and Local........................................................22
Miscellaneous..........................................................23
TRUSTEES AND OFFICERS...........................................................23
Shareholder and Trustee Liability......................................27
INVESTMENT ADVISER..............................................................28
ADMINISTRATOR...................................................................29
CUSTODIAN AND TRANSFER AGENT....................................................31
EXPENSES .......................................................................31
PORTFOLIO TRANSACTIONS..........................................................32
DISTRIBUTION AND SERVICES PLAN..................................................33

-i-
<PAGE>

TABLE OF CONTENTS
(CONTINUED)

DISTRIBUTOR.....................................................................35
AUDITORS .......................................................................35
COUNSEL ........................................................................36
CODES OF ETHICS ................................................................36
PERFORMANCE AND YIELD INFORMATION...............................................36
Performance Reporting..................................................37
MISCELLANEOUS...................................................................38
FINANCIAL STATEMENTS............................................................39
APPENDIX A.....................................................................A-1
</TABLE>

-ii-
<PAGE>

GENERAL INFORMATION

This Statement of Additional Information should be read in conjunction with
a current Prospectus. This Statement of Additional Information relates to the
Prospectuses for the Prime Reserves, Tax-Exempt Reserves and Government Reserves
(the "Funds"), three money market portfolios offered by The Galaxy Fund. No
investment in the Funds should be made without reading a Prospectus.

SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, FLEETBOSTON FINANCIAL CORPORATION OR ANY OF ITS AFFILIATES, FLEET
INVESTMENT ADVISORS INC., OR ANY FLEET BANK. SHARES OF THE FUNDS ARE NOT
FEDERALLY INSURED BY, GUARANTEED BY, OBLIGATIONS OF OR OTHERWISE SUPPORTED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER GOVERNMENTAL AGENCY. ALTHOUGH THE FUNDS SEEK TO
PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE
MONEY BY INVESTING IN THE FUNDS.

DESCRIPTION OF GALAXY AND ITS SHARES

The Galaxy Fund ("Galaxy") is an open-end management investment company
currently offering shares of beneficial interest in thirty seven investment
portfolios: Money Market Fund, Government Fund, U.S. Treasury Fund, Tax-Exempt
Fund, Connecticut Municipal Money Market Fund, Massachusetts Municipal Money
Market Fund, Institutional Money Market Fund, Institutional Government Money
Market Fund, Institutional Treasury Money Market Fund, Prime Reserves,
Government Reserves, Tax-Exempt Reserves, Equity Value Fund, Equity Growth Fund,
Growth Fund II, Equity Income Fund, International Equity Fund, Pan Asia Fund,
Small Company Equity Fund, Asset Allocation Fund, Small Cap Value Fund, Growth
and Income Fund, Strategic Equity Fund, Short-Term Bond Fund, Intermediate
Government Income Fund, High Quality Bond Fund, Corporate Bond Fund, Tax-Exempt
Bond Fund, Intermediate Tax-Exempt Bond Fund, New Jersey Municipal Bond Fund,
New York Municipal Bond Fund, Connecticut Municipal Bond Fund, Connecticut
Intermediate Municipal Bond Fund, Massachusetts Municipal Bond Fund,
Massachusetts Intermediate Municipal Bond Fund, Rhode Island Municipal Bond Fund
and Florida Municipal Bond Fund. Galaxy is also authorized to issue shares of
beneficial interest in two additional investment portfolios, the MidCap Equity
Fund and the New York Municipal Money Market Fund. As of the date of this
Statement of Additional Information, however, the MidCap Equity Fund and the New
York Municipal Money Market Fund had not commenced investment operations.

Galaxy was organized as a Massachusetts business trust on March 31,
1986. Galaxy's Declaration of Trust authorizes the Board of Trustees to classify
or reclassify any unissued shares into one or more classes or series of shares
by setting or changing in any one or more respects their respective preferences,
conversion or other rights, voting powers, restrictions, limitations as to
dividends, qualifications, and terms and conditions of redemption. Pursuant to
such authority, the Board of Trustees has authorized the issuance of an
unlimited number of shares in the Funds as follows: Class BB shares representing
interests in the Prime Reserves;

<PAGE>

Class CC shares representing interests in the Government Reserves; and Class DD
shares representing interests in the Tax-Exempt Reserves. Each Fund is
classified as a diversified company under the Investment Company Act of 1940, as
amended (the "1940 Act").

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

Shares have no preemptive rights and only such conversion or exchange
rights as the Board of Trustees may grant in its discretion. When issued for
payment as described in the Prospectuses, shares will be fully paid and
non-assessable.

Holders of all outstanding shares of a particular Fund will vote together
in the aggregate on all matters. Further, shareholders of all of the Funds, as
well as those of any other investment portfolio now or hereafter offered by
Galaxy, will vote together in the aggregate and not separately on a Fund-by-Fund
basis, except as otherwise required by law or when permitted by the Board of
Trustees. Rule 18f-2 under the 1940 Act provides that any matter required to be
submitted to the holders of the outstanding voting securities of an investment
company such as Galaxy shall not be deemed to have been effectively acted upon
unless approved by the holders of a majority of the outstanding shares of each
portfolio affected by the matter. A particular portfolio is deemed to be
affected by a matter unless it is clear that the interests of each portfolio in
the matter are substantially identical or that the matter does not affect any
interest of the portfolio. Under the Rule, the approval of an investment
advisory agreement or any change in a fundamental investment objective or a
fundamental investment policy would be effectively acted upon with respect to a
portfolio only if approved by a majority of the outstanding shares of such
portfolio. However, the Rule also provides that the ratification of the
appointment of independent public accountants, the approval of principal
underwriting contracts, and the election of trustees may be effectively acted
upon by shareholders of Galaxy voting without regard to class or series.

Shareholders are entitled to one vote for each full share held, and a
proportionate fractional vote for each fractional share held, and will vote in
the aggregate and not by class or series, except as otherwise expressly required
by law or when the Board of Trustees determines that the matter to be voted on
affects only the interests of shareholders of a particular class or series.
Voting rights are not cumulative and, accordingly, the holders of more than 50%
in the aggregate of Galaxy's outstanding shares may elect all of the trustees,
irrespective of the votes of other shareholders.

Galaxy is not required under Massachusetts law to hold annual shareholder
meetings and intends to do so only if required by the 1940 Act. Shareholders
have the right to remove Trustees. Galaxy's Declaration of Trust provides that a
meeting of shareholders shall be called by the Board of Trustees upon a written
request of shareholders owning at least 10% of the outstanding shares of Galaxy
entitled to vote.

-2-
<PAGE>

Galaxy's Declaration of Trust authorizes the Board of Trustees, without
shareholder approval (unless otherwise required by applicable law), to (a) sell
and convey the assets of a portfolio to another management investment company
for consideration which may include securities issued by the purchaser and, in
connection therewith, to cause all outstanding shares of the portfolio involved
to be redeemed at a price which is equal to their net asset value and which may
be paid in cash or by distribution of the securities or other consideration
received from the sale and conveyance; (b) sell and convert a portfolio's assets
into money and, in connection therewith, to cause all outstanding shares of the
portfolio involved to be redeemed at their net asset value; or (c) combine the
assets belonging to a portfolio with the assets belonging to another portfolio
of Galaxy and, in connection therewith, to cause all outstanding shares of any
portfolio to be redeemed at their net asset value or converted into shares of
another class of Galaxy's shares at the net asset value. In the event that
shares are redeemed in cash at their net asset value, a shareholder may receive
in payment for such shares, due to changes in the market prices of the
portfolio's investment securities, an amount that is more or less than the
original investment. The exercise of such authority by the Board of Trustees
will be subject to the provisions of the 1940 Act, and the Board of Trustees
will not take any action described in this paragraph unless the proposed action
has been disclosed in writing to the portfolio's shareholders at least 30 days
prior thereto.

INVESTMENT STRATEGIES, POLICIES AND RISKS

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

PRIME RESERVES

Instruments in which the Prime Reserves invests have remaining maturities
of 397 days or less (except for certain variable and floating rate notes and
securities underlying certain repurchase agreements). For more information,
including applicable quality requirements, see "Other Investment Policies and
Risk Considerations" below.

-3-
<PAGE>

TAX-EXEMPT RESERVES

Instruments in which the Tax-Exempt Reserves invests have remaining
maturities of 397 days or less (except for certain variable and floating rate
notes and securities underlying certain repurchase agreements). For more
information, including applicable quality requirements, see "Other Investment
Policies and Risk Considerations" below.

Municipal securities, as that term is used in this Statement of Additional
Information, are debt obligations issued by or on behalf of states, territories
and possessions of the United States, the District of Columbia, and their
authorities, agencies, instrumentalities and political subdivisions, the
interest on which, in the opinion of bond counsel or counsel to the issuer, is
exempt from federal income tax. As a matter of fundamental policy that cannot be
changed without the requisite consent of the Fund's shareholders, the Fund will
invest, except during temporary defensive periods, at least 80% of its net
assets in municipal securities. The Fund's investments in private activity bonds
will not be treated as investments in municipal securities for purposes of the
80% requirement mentioned above and, under normal market conditions, will not
exceed 20% of the Fund's net assets when added together with any taxable
investments held by the Fund.

Although the Fund does not presently intend to do so on a regular basis, it
may invest more than 25% of its total assets in municipal securities the
interest on which is paid solely from revenues of similar projects. To the
extent that the Fund's assets are concentrated in municipal securities payable
from revenues on similar projects, the Fund will be subject to the peculiar
risks presented by such projects to a greater extent than it would be if its
assets were not so invested.

GOVERNMENT RESERVES

Instruments in which the Government Reserves invests have remaining
maturities of 397 days or less (except for certain variable and floating rate
notes and securities underlying certain repurchase agreements). See "Other
Investment Policies and Risk Considerations" below.

OTHER INVESTMENT POLICIES AND RISK CONSIDERATIONS

Investment methods described in the Prospectuses and this Statement of
Additional Information are among those which one or more of the Funds have the
power to utilize. Some may be employed on a regular basis; others may not be
used at all. Accordingly, reference to any particular method or technique
carries no implication that it will be utilized or, if it is, that it will be
successful.

QUALITY REQUIREMENTS

Each Fund will purchase only those instruments which meet the applicable
quality requirements described below. The Prime Reserves will not purchase a
security (other than a U.S. Government security) unless the security or the
issuer with respect to comparable securities

-4-
<PAGE>

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

Determinations of comparable quality will be made in accordance with
procedures established by the Board of Trustees. Generally, if a security has
not been rated by a Rating Agency, Fleet will acquire the security if it
determines that the security is of comparable quality to securities that have
received the requisite ratings. Fleet considers an issuer's long-term bond
ratings and other relevant information in its evaluation of unrated short-term
securities.

U.S. GOVERNMENT OBLIGATIONS

Examples of the types of obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities (hereinafter, "U.S. Government
obligations") that may be held by the Funds include, without limitation, direct
obligations of the U.S. Treasury, and securities issued or guaranteed by the
Federal Home Loan Banks, Federal Farm Credit Banks, Federal Land Banks, Federal
Housing Administration, Farmers Home Administration, Export-Import Bank of the
United States, Small Business Administration, Government National Mortgage
Association, Federal National Mortgage Association, General Services
Administration, Central Bank for Cooperatives, Federal Home Loan Mortgage
Corporation, Federal Intermediate Credit Banks, Resolution Trust Corporation and
Maritime Administration.

U.S. Treasury securities differ only in their interest rates, maturities
and time of issuance: Treasury Bills have initial maturities of one year or
less; Treasury Notes have initial maturities of one to ten years; and Treasury
Bonds generally have initial maturities of more than 10 years. Obligations of
certain agencies and instrumentalities of the U.S. Government, such as the
Government National Mortgage Association, are supported by the full faith and
credit of the U.S. Treasury; others, such as those of the Federal Home Loan
Banks, are supported by the right of the issuer to borrow from the Treasury;
others, such as those of the Federal National Mortgage Association, are
supported by the discretionary authority of the U.S. Government to purchase the
agency's obligations; still others, such as those of the Federal Home Loan
Mortgage Corporation, are supported only by the credit of the instrumentality.
No assurance can be given that the U.S. Government would provide financial
support to U.S. Government-sponsored instrumentalities if

-5-
<PAGE>

it is not obligated to do so by law. Some U.S. Government obligations may be
issued as variable or floating rate instruments.

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

MONEY MARKET INSTRUMENTS

Money market instruments include, but are not limited to, bank obligations
and corporate obligations, including commercial paper and corporate bonds with
remaining maturities of 397 days or less.

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

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

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

-6-
<PAGE>

Commercial paper may include securities issued by corporations without
registration under the Securities Act of 1933, as amended (the "1933 Act"), in
reliance on the so-called "private placement" exemption in Section 4(2)
("Section 4(2) Paper"). Section 4(2) Paper is restricted as to disposition under
the federal securities laws in that any resale must similarly be made in an
exempt transaction. Section 4(2) Paper is normally resold to other institutional
investors through or with the assistance of investment dealers who make a market
in Section 4(2) Paper, thus providing liquidity. For purposes of each Fund's 10%
limitation on purchases of illiquid instruments described below, Section 4(2)
Paper will not be considered illiquid if Fleet has determined, in accordance
with guidelines approved by the Board of Trustees, that an adequate trading
market exists for such securities. The Prime Reserves and Tax-Exempt Reserves
may also purchase Rule 144A securities. See "Investment Limitations" below.

MUNICIPAL SECURITIES

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

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

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

Municipal securities may include variable rate demand notes, which are
long-term municipal securities that have variable or floating interest rates and
provide a Fund with the right to tender the security for repurchase at its
stated principal amount plus accrued interest. Such securities typically bear
interest at a rate that is intended to cause the securities to trade at par.

-7-
<PAGE>

The interest rate may float or be adjusted at regular intervals (ranging from
daily to annually), and is normally based on an applicable interest index or
another published interest rate or interest rate index. Most variable rate
demand notes allow a Fund to demand the repurchase of the security on not more
than seven days prior notice. Other notes only permit a Fund to tender the
security at the time of each interest rate adjustment or at other fixed
intervals. The Tax-Exempt Reserves treats variable rate demand notes as maturing
on the later of the date of the next interest rate adjustment or the date on
which the Fund may next tender the security for repurchase. Variable interest
rates generally reduce changes in the market value of municipal securities from
their original purchase prices. Accordingly, as interest rates decrease or
increase, the potential for capital appreciation or depreciation is less for
variable rate municipal securities than for fixed income obligations. The terms
of these variable rate demand instruments require payment of principal and
accrued interest from the issuer of the municipal securities, the issuer of the
participation interest or a guarantor of either issuer.

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

There are, of course, variations in the quality of municipal securities,
both within a particular category and between categories, and the yields on
municipal securities depend upon a variety of factors, including general market
conditions, the financial condition of the issuer, general conditions of the
municipal bond market, the size of a particular offering, the maturity of the
obligation, and the rating of the issue. The ratings of a Rating Agency, such as
Moody's, S&P and Fitch IBCA described in Appendix A hereto, represent such
Rating Agency's opinion as to the quality of the municipal securities. It should
be emphasized that these ratings are general and are not absolute standards of
quality. Municipal securities with the same maturity, interest rate and rating
may have different yields. Municipal securities of the same maturity and
interest rate with different ratings may have the same yield.

The payment of principal and interest on most securities purchased by the
Tax-Exempt Reserves will depend upon the ability of the issuers to meet their
obligations. Each state, the District of Columbia, each of their political
subdivisions, agencies, instrumentalities and authorities and each multistate
agency of which a state is a member is a separate "issuer" as that term is used
in this Statement of Additional Information and the Fund's Prospectuses. The
non-governmental user of facilities financed by private activity bonds is also
considered to be an "issuer." An issuer's obligations under its municipal
securities are subject to the provisions of

-8-
<PAGE>

bankruptcy, insolvency and other laws affecting the rights and remedies of
creditors, such as the federal Bankruptcy Code and laws, if any, which may be
enacted by federal or state legislatures extending the time for payment of
principal or interest, or both, or imposing other constraints upon enforcement
of such obligations or upon the ability of municipalities to levy taxes. The
power or ability of an issuer to meet its obligations for the payment of
interest on and principal of its municipal securities may be materially
adversely affected by litigation or other conditions.

Among other instruments, the Tax-Exempt Reserves may purchase short-term
general obligation notes, tax anticipation notes, bond anticipation notes,
revenue anticipation notes, tax-exempt commercial paper, construction loan notes
and other forms of short-term loans. Such instruments are issued with a
short-term maturity in anticipation of the receipt of tax funds, the proceeds of
bond placements or other revenues. In addition, the Tax-Exempt Reserves may
invest in long-term tax-exempt instruments, such as municipal bonds and private
activity bonds to the extent consistent with the limitations set forth in the
Prospectuses for the Fund including applicable maturity restrictions.

Private activity bonds are or have been issued to obtain funds to provide,
among other things, privately operated housing facilities, pollution control
facilities, convention or trade show facilities, mass transit, airport, port or
parking facilities and certain local facilities for water supply, gas,
electricity or sewage or solid waste disposal. Private activity bonds are also
issued to privately held or publicly owned corporations in the financing of
commercial or industrial facilities. The principal and interest on these
obligations may be payable from the general revenues of the users of such
facilities.

From time to time, proposals have been introduced before Congress for the
purpose of restricting or eliminating the federal income tax exemption for
interest on municipal securities. For example, under the Tax Reform Act of 1986,
interest on certain private activity bonds must be included in an investor's
federal alternative minimum taxable income, and corporate investors must include
all tax-exempt interest in their federal alternative minimum taxable income.
Galaxy cannot, of course, predict what legislation may be proposed in the future
regarding the income tax status of interest on municipal securities, or which
proposals, if any, might be enacted. Such proposals, while pending or if
enacted, might materially and adversely affect the availability of municipal
securities for investment by the Tax-Exempt Reserves and the liquidity and value
of its portfolio. In such an event, the Fund would re-evaluate its investment
objective and policies and consider possible changes in its structure or
possible dissolution.

Opinions relating to the validity of municipal securities and to the
exemption of interest thereon from federal income tax are rendered by bond
counsel to the respective issuers at the time of issuance. Neither the
Tax-Exempt Reserves nor Fleet will review the proceedings relating to the
issuance of municipal securities or the bases for such opinions.

STAND-BY COMMITMENTS

The Tax-Exempt Reserves may acquire "stand-by commitments" with respect to
municipal securities held by it. Under a stand-by commitment, a dealer agrees to
purchase from

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<PAGE>

the Fund, at the Fund's option, specified municipal securities at a specified
price. The Fund will acquire stand-by commitments solely to facilitate portfolio
liquidity and does not intend to exercise its rights thereunder for trading
purposes. Stand-by commitments acquired by the Fund would be valued at zero in
determining the Fund's net asset value. The default or bankruptcy of a
securities dealer giving such a commitment would not affect the quality of the
municipal securities purchased by the Fund. However, without a stand-by
commitment, these securities could be more difficult to sell. The Fund will
enter into stand-by commitments only with those dealers whose credit Fleet
believes to be of high quality.

Stand-by commitments are exercisable by the Fund at any time before the
maturity of the underlying municipal security, and may be sold, transferred or
assigned by the Fund only with respect to the underlying instruments. Although
stand-by commitments are often available without the payment of any direct or
indirect consideration, if necessary or advisable, the Fund may pay for a
stand-by commitment either separately in cash or by paying a higher price for
securities acquired subject to the commitment. Where the Fund pays any
consideration directly or indirectly for a stand-by commitment, its cost will be
reflected as unrealized depreciation for the period during which the commitment
is held by the Fund.

The Fund will enter into stand-by commitments only with banks and
broker/dealers that present minimal credit risks. In evaluating the
creditworthiness of the issuer of a stand-by commitment, Fleet will review
periodically the issuer's assets, liabilities, contingent claims and other
relevant financial information.

TENDER OPTION BONDS

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

VARIABLE AND FLOATING RATE INSTRUMENTS

Securities purchased by the Funds may include variable and floating rate
instruments. Variable rate instruments provide for periodic adjustments in the
interest rate. Floating rate instruments provide for automatic adjustment of the
interest rate whenever some other specified interest rate changes. Some variable
and floating rate obligations are direct lending

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<PAGE>

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

If a variable or floating rate instrument is not rated, Fleet must
determine that such instrument is comparable to rated instruments eligible for
purchase by the Funds and will consider the earning power, cash flows and other
liquidity ratios of the issuers and guarantors of such notes and will
continuously monitor their financial status in order to meet payment on demand.
In determining average weighted portfolio maturity of each of these Funds, a
variable or floating rate instrument issued or guaranteed by the U.S. Government
or an agency or instrumentality thereof will be deemed to have a maturity equal
to the period remaining until the obligation's next interest rate adjustment.

Long-term variable and floating rate obligations held by the Funds may have
maturities of more than 397 days, provided the Funds are entitled to payment of
principal upon not more than 30 days' notice or at specified intervals not
exceeding one year (upon not more than 30 days' notice).

Variable and floating rate obligations with a demand feature held by the
Funds will be deemed to have a maturity equal to the longer of the period
remaining to the next interest rate adjustment or the demand notice period.

REPURCHASE AND REVERSE REPURCHASE AGREEMENTS

Each Fund may purchase portfolio securities subject to the seller's
agreement to repurchase them at a mutually specified date and price ("repurchase
agreements"). Repurchase agreements will only be entered into with financial
institutions such as banks and broker/dealers that are deemed to be creditworthy
by Fleet. No Fund will enter into repurchase agreements with Fleet or any of its
affiliates. Unless a repurchase agreement has a remaining maturity of seven days
or less or may be terminated on demand upon notice of seven days or less, the
repurchase agreement will be considered an illiquid security and will be subject
to the Funds' 10% limit described in Investment Limitations No. 9 under
"Investment Limitations" below.

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

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<PAGE>

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

The repurchase price under a repurchase agreement generally equals the
price paid by a Fund plus interest negotiated on the basis of current short-term
rates (which may be more or less than the rate on the securities underlying the
repurchase agreements). Securities subject to repurchase agreements will be held
by a Fund's custodian or sub-custodian in a segregated account or in the Federal
Reserve/Treasury book-entry system. Repurchase agreements are considered to be
loans by a Fund under the 1940 Act.

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

Whenever a Fund enters into a reverse repurchase agreement, the Fund will
place in a segregated custodial account liquid assets such as cash or liquid
securities equal to the repurchase price (including accrued interest). The Fund
will monitor the account to ensure such equivalent values are maintained.
Reverse repurchase agreements are considered to be borrowings by a Fund under
the 1940 Act.

WHEN-ISSUED AND DELAYED SETTLEMENT TRANSACTIONS

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

When a Fund agrees to purchase securities on a "when-issued" or "delayed
settlement" basis, the Fund's custodian will set aside cash or liquid portfolio
securities equal to the amount of the commitment in a separate account. In the
event of a decline in the value of the securities that the custodian has set
aside, the Fund may be required to place additional assets in the separate

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<PAGE>

account in order to ensure that the value of the account remains equal to the
amount of the Fund's commitment. A Fund's net assets may fluctuate to a greater
degree if it sets aside portfolio securities to cover such purchase commitments
than if it sets aside cash. Because the Fund sets aside liquid assets to satisfy
its purchase commitments in the manner described, its liquidity and ability to
manage its portfolio might be affected in the event its commitments to purchase
securities on a when-issued or delayed settlement basis exceeded 25% of the
value of its total assets.

When a Fund engages in when-issued or delayed settlement transactions, it
relies on the seller to consummate the trade. Failure of the seller to do so may
result in the Fund's incurring a loss or missing an opportunity to obtain a
price considered to be advantageous for a security. For purposes of determining
the average weighted maturity of a Fund's portfolio, the maturity of securities
purchased on a when-issued or delayed settlement basis is calculated from the
date of settlement of the purchase to the maturity date.

SECURITIES LENDING - PRIME RESERVES AND GOVERNMENT RESERVES

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

A Fund that loans portfolio securities would continue to accrue interest on
the securities loaned and would also earn income on the loans. Any cash
collateral received by the Government Reserves in connection with such loans
would be invested in short-term obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities; cash collateral received by the
Prime Reserves would be invested in high quality, short-term "money market"
instruments.

GUARANTEED INVESTMENT CONTRACTS - PRIME RESERVES

The Prime Reserves may invest in guaranteed investment contracts ("GICs")
issued by United States insurance companies. Pursuant to such contracts, the
Fund makes cash contributions to a deposit fund of the insurance company's
general account. The insurance company then credits to the Fund payments at
negotiated, floating or fixed interest rates. A GIC is a general obligation of
the issuing insurance company and not a separate account. The purchase price
paid for a GIC becomes part of the general assets of the insurance company, and
the contract is paid from the company's general assets. The Fund will only
purchase GICs that are issued or guaranteed by insurance companies that at the
time of purchase are rated in

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<PAGE>

accordance with the applicable quality requirements described above under
"Quality Requirements." GICs are considered illiquid securities and will be
subject to the Fund's 10% limitation on illiquid investments, unless there is an
active and substantial secondary market for the particular instrument and market
quotations are readily available.

ASSET-BACKED SECURITIES - PRIME RESERVES

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

Asset-backed securities are generally issued as pass-through certificates,
which represent undivided fractional ownership interests in an underlying pool
of assets, or as debt instruments, which are also known as collateralized
obligations, and are generally issued as the debt of a special purpose entity
organized solely for the purpose of owning such assets and issuing such debt.
Asset-backed securities are often backed by a pool of assets representing the
obligations of a number of different parties.

The yield characteristics of asset-backed securities differ from
traditional debt securities. A major difference is that the principal amount of
the obligations may be prepaid at any time because the underlying assets (i.e.,
loans) generally may be prepaid at any time. As a result, if an asset-backed
security is purchased at a premium, a prepayment rate that is faster than
expected will reduce yield to maturity, while a prepayment rate that is slower
than expected will have the opposite effect of increasing yield to maturity.
Conversely, if an asset-backed security is purchased at a discount, faster than
expected prepayments will increase, while slower than expected prepayments will
decrease, yield to maturity.

Prepayments on asset-backed securities generally increase with falling
interest rates and decrease with rising interest rates; furthermore, prepayment
rates are influenced by a variety of economic and social factors. In general,
the collateral supporting non-mortgage asset-backed securities is of shorter
maturity than mortgage loans and is less likely to experience substantial
prepayments. Like other fixed income securities, when interest rates rise, the
value of an asset-backed security generally will decline; however, when interest
rates decline, the value of an asset-backed security with prepayment features
may not increase as much as that of other fixed income securities.

Asset-backed securities are subject to greater risk of default during
periods of economic downturn. Also, the secondary market for certain
asset-backed securities may not be as liquid as the market for other types of
securities, which could result in the Fund's experiencing difficulty in valuing
or liquidating such securities. For these reasons, under certain circumstances,
asset-backed securities may be considered illiquid securities.

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<PAGE>

INVESTMENT COMPANY SECURITIES

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

PORTFOLIO SECURITIES GENERALLY

Subsequent to its purchase by a Fund, an issue of securities may cease to
be rated or its rating may be reduced below the minimum rating required for
purchase by the Fund. The Board of Trustees or Fleet, pursuant to guidelines
established by the Board, will promptly consider such an event in determining
whether the Fund involved should continue to hold the obligation. The Board of
Trustees or Fleet may determine that it is appropriate for the Fund to continue
to hold the obligation if retention is in accordance with the interests of the
Fund and applicable regulations of the Securities and Exchange Commission
("SEC").

INVESTMENT LIMITATIONS

In addition to each Fund's investment objective as stated in its
Prospectuses, the following investment limitations are matters of fundamental
policy and may not be changed with respect to a Fund without the affirmative
vote of the holders of a majority of its outstanding shares (as defined under
"Miscellaneous").

No Fund may:

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

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<PAGE>

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

2. Purchase securities of any one issuer if immediately after such
purchase more than 5% of the value of its total assets would be
invested in the securities of such issuer (the "5% limitation"),
except that up to 25% of the value of its total assets may be invested
without regard to the 5% limitation; notwithstanding the foregoing
restriction, each Fund may invest without regard to the 5% limitation
in U.S. Government obligations and as otherwise permitted in
accordance with Rule 2a-7 under the 1940 Act or any successor rule.

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

4. Knowingly invest more than 10% of the value of its net assets in
illiquid securities, including repurchase agreements with remaining
maturities in excess of seven days, time deposits with maturities in
excess of seven days, restricted securities, non-negotiable time
deposits and other securities which are not readily marketable.

5. Purchase securities on margin (except such short-term credits as may
be necessary for the clearance of purchases), make short sales of
securities, or maintain a short position.

6. Act as an underwriter within the meaning of the Securities Act of
1933, as amended; except insofar as a Fund might be deemed to be an
underwriter upon disposition of restricted portfolio securities; and
except to the extent that the purchase of securities directly from the
issuer thereof in accordance with the Fund's investment objective,
policies and limitations may be deemed to be underwriting.

7. Purchase or sell real estate; except that each taxable Fund may
purchase securities that are secured by real estate, and the Prime
Reserves may purchase securities of issuers which deal in real estate
or interests therein; and except that the Tax-Exempt Reserves may
invest in municipal securities secured by real estate or

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<PAGE>

interests therein; however, the Funds will not purchase or sell
interests in real estate limited partnerships.

8. Purchase or sell commodities or commodity contracts or invest in oil,
gas or other mineral exploration or development programs or mineral
leases.

9. Invest in or sell put options, call options, straddles, spreads, or
any combination thereof.

10. Invest in companies for the purpose of exercising management or
control.

In addition, the Prime Reserves and Government Reserves may not:

11. Purchase securities that would cause 25% or more of the value of a
Fund's total assets at the time of purchase to be invested in the
securities of one or more issuers conducting their principal business
activities in the same industry; provided, however, that (a) there is
no limitation with respect to obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities, or, with respect
to the Prime Reserves, by domestic banks or U.S. branches of foreign
banks that are subject to the same regulation as domestic banks; (b)
with respect to the Prime Reserves, wholly-owned finance companies
will be considered to be in the industries of their parents if their
activities are primarily related to financing the activities of the
parents; and (c) with respect to the Prime Reserves, utilities will be
classified according to their services (for example, gas, gas
transmission, electric and gas, electric and telephone each will be
considered a separate industry).

In addition, the Tax-Exempt Reserves may not:

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

With respect to Investment Limitation No. 2 above, (a) a security is
considered to be issued by the governmental entity or entities whose assets and
revenues back the security or, with respect to a private activity bond that is
backed only by the assets and revenues of a non-governmental user, such
non-governmental user; (b) in certain circumstances, the guarantor of a
guaranteed security may also be considered to be an issuer in connection with
such guarantee; and (c) securities issued or guaranteed by the U.S. Government,
its agencies or instrumentalities (including securities backed by the full faith
and credit of the United States) are deemed to be U.S. Government obligations.

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<PAGE>

With respect to Investment Limitation No. 3 above, each of the Prime
Reserves and Government Reserves intends to limit any borrowings, including
reverse repurchase agreements, to not more than 10% of the value of its total
assets at the time of such borrowing.

If a percentage limitation is satisfied at the time of investment, a later
increase in such percentage resulting from a change in the value of a Fund's
portfolio securities generally will not constitute a violation of the
limitation. With respect to Investment Limitation No. 4 above, the Board of
Trustees of Galaxy will determine whether a later increase in the percentage
limitation with respect to illiquid securities adversely affects the level of
liquidity being maintained by a Fund and will consider whether the Fund should
reduce its holdings of illiquid securities in order to maintain adequate
liquidity.

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

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

NET ASSET VALUE

Galaxy uses the amortized cost method of valuation to value shares of the
Funds. In order to use the amortized cost method, the Funds comply with the
various quality and maturity

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<PAGE>

restrictions specified in Rule 2a-7 promulgated under the 1940 Act. Pursuant to
this method, a security is valued at its initial acquisition cost, as adjusted
for amortization of premium or accretion of discount, regardless of the impact
of fluctuating interest rates on the market value of the security. Where it is
not appropriate to value a security by the amortized cost method, the security
will be valued either by market quotations or by fair value as determined by or
under the direction of Galaxy's Board of Trustees. This method may result in
periods during which value, as determined by amortized cost, is higher or lower
than the price a Fund would receive if it sold the security. The value of
securities in each of these Funds can be expected to vary inversely with changes
in prevailing interest rates. Thus, if interest rates have increased from the
time a security was purchased, such security, if sold, might be sold at a price
less than its cost. Similarly, if interest rates have declined from the time a
security was purchased, such security, if sold, might be sold at a price greater
than its purchase cost. In either instance, if the security is held to maturity,
no gain or loss will be realized.

The Funds invest only in instruments that meet the applicable quality
requirements of Rule 2a-7 and maintain a dollar-weighted average portfolio
maturity appropriate to their objective of maintaining a stable net asset value
per share, provided that none of the Funds will purchase any security deemed to
have a remaining maturity (as defined in the 1940 Act) of more than 397 days nor
maintain a dollar-weighted average portfolio maturity which exceeds 90 days.
Galaxy's Board of Trustees has established procedures reasonably designed,
taking into account current market conditions and each Fund's investment
objective, to stabilize the net asset value per share of each Fund for purposes
of sales and redemptions at $1.00. These procedures include review by the Board
of Trustees, at such intervals as it deems appropriate, to determine the extent,
if any, to which the net asset value per share of each Fund, calculated by using
available market quotations, deviates from $1.00 per share. In the event such
deviation exceeds one-half of one percent, the Board of Trustees will promptly
consider what action, if any, should be initiated. If the Board of Trustees
believes that the extent of any deviation from a Fund's $1.00 amortized cost
price per share may result in material dilution or other unfair results to new
or existing investors, it has agreed to take such steps as it considers
appropriate to eliminate or reduce, to the extent reasonably practicable, any
such dilution or unfair results. These steps may include selling portfolio
instruments prior to maturity; shortening the average portfolio maturity;
withholding or reducing dividends; redeeming shares in kind; reducing the number
of a Fund's outstanding shares without monetary consideration; or utilizing a
net asset value per share determined by using available market quotations.

DIVIDENDS

As stated, Galaxy uses its best efforts to maintain the net asset value per
share of each Fund at $1.00. As a result of a significant expense or realized or
unrealized loss incurred by any of the Funds, it is possible that a Fund's net
asset value per share may fall below $1.00. Should Galaxy incur or anticipate
any unusual or unexpected significant expense or loss which would affect
disproportionately the income of a Fund for a particular period, the Board of
Trustees would at that time consider whether to adhere to the present dividend
policy with respect to the Funds or to revise it in order to ameliorate to the
extent possible the disproportionate effect of

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<PAGE>

such expense or loss on the income of the Fund experiencing such effect. Such
expense or loss may result in a shareholder's receiving no dividends for the
period in which he or she holds shares of a Fund and in its receiving upon
redemption a price per share lower than that which he or she paid.

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION

Shares in each Fund are sold on a continuous basis by Galaxy's distributor,
Provident Distributors, Inc. ("PDI"). PDI is a registered broker/dealer with its
principal offices located at 3200 Horizon Drive, King of Prussia, Pennsylvania
19406.

On a Business Day when the New York Stock Exchange (the "Exchange") closes
early due to a partial holiday or otherwise, Galaxy will advance the time at
which purchase and redemption orders must be received in order to be processed
on that Business Day.

Galaxy may suspend the right of redemption or postpone the date of payment
for shares for more than seven days during any period when (a) trading in the
markets the Funds normally utilize is restricted, or an emergency, as defined by
the rules and regulations of the SEC, exists making disposal of a Fund's
investments or determination of its net asset value not reasonably practicable;
(b) the Exchange is closed (other than customary weekend and holiday closings);
or (c) the SEC by order has permitted such suspension.

If the Board of Trustees determines that conditions exist which make
payment of redemption proceeds wholly in cash unwise or undesirable, Galaxy may
make payment wholly or partly in securities or other property. Such redemptions
will only be made in "readily marketable" securities. In such an event, a
shareholder would incur transaction costs in selling the securities or other
property. However, Galaxy has filed an election with the SEC to pay in cash all
redemptions requested by a shareholder of record limited in amount during any
90-day period to the lesser of $250,000 or 1% of the net assets of a Fund at the
beginning of such period. Such commitment cannot be revoked without the prior
approval of the SEC.

SPECIAL PROCEDURES FOR IN-KIND PAYMENTS

Payments for shares of a Fund may, in the discretion of the respective
Fund, be made in the form of securities that are permissible investments for the
Fund as described in the Prospectuses. For further information about this form
of payment, contact your broker-dealer representative. In connection with an
in-kind securities payment, a Fund will require, among other things, that the
securities be valued on the day of purchase in accordance with the pricing
procedures used by the Fund; that the Fund receive satisfactory assurances that
it will have good and marketable title to the securities received by it; that
the securities be in proper form for transfer to the Fund; that adequate
information be provided to the Fund concerning the basis and other tax matters
relating to the securities; and that the amount of the purchase be at least
$1,000,000.

-20-
<PAGE>

TAXES
IN GENERAL

Each Fund qualified during its last taxable year and intends to continue to
qualify as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"), and to distribute out its income
to shareholders each year, so that each Fund itself generally will be relieved
of federal income and excise taxes. If a Fund were to fail to so qualify: (1)
the Fund would be taxed at regular corporate rates without any deduction for
distributions to shareholders; and (2) shareholders would be taxed as if they
received ordinary dividends, although corporate shareholders could be eligible
for the dividends received deduction.

A 4% non-deductible excise tax is imposed on regulated investment companies
that fail to distribute with respect to each calendar year at least 98% of their
ordinary taxable income and capital gain net income (excess of capital gains
over capital losses) for the one year period ending October 31 of such calendar
year and 100% of any such amounts that were not distributed in the prior year.
Each Fund intends to make sufficient distributions or deemed distributions of
its ordinary taxable income and any capital gain net income prior to the end of
each calendar year to avoid liability for this excise tax.

The Funds will be required in certain cases to withhold and remit to the
United States Treasury 31% of taxable dividends or gross sale proceeds paid to
any shareholder who (i) has failed to provide a correct tax identification
number, (ii) is subject to withholding by the Internal Revenue Service for
failure to properly include on his or her return payments of taxable interest or
dividends, or (iii) has failed to certify to the Funds that he or she is not
subject to back up withholding when required to do so or that he or she is an
"exempt recipient."

A taxable gain or loss may be realized by a shareholder upon redemption,
transfer or exchange of shares of a Fund depending upon the tax basis of such
shares and their price at the time of redemption, transfer or exchange.

TAX-EXEMPT RESERVES

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

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

-21-
<PAGE>

An investment in the Tax-Exempt Reserves is not intended to constitute a
balanced investment program. Shares of the Fund would not be suitable for
tax-exempt institutions and may not be suitable for retirement plans qualified
under Section 401 of the Code, H.R. 10 plans and individual retirement accounts
because such plans and accounts are generally tax-exempt and, therefore, not
only would the shareholder not gain any additional benefit from the Fund's
dividends being tax-exempt, but such dividends would be ultimately taxable to
the beneficiaries when distributed. In addition, the Fund may not be an
appropriate investment for entities which are "substantial users" of facilities
financed by "private activity bonds" or "related persons" thereof. "Substantial
user" is defined under U.S. Treasury Regulations to include a non-exempt person
who (i) regularly uses a part of such facilities in his or her trade or business
and whose gross revenues derived with respect to the facilities financed by the
issuance of bonds are more than 5% of the total revenues derived by all users of
such facilities, (ii) occupies more than 5% of the usable area of such
facilities or (iii) are persons for whom such facilities or a part thereof were
specifically constructed, reconstructed or acquired. "Related persons" include
certain related natural persons, affiliated corporations, a partnership and its
partners and an S corporation and its shareholders.

In order for the Tax-Exempt Reserves to pay exempt-interest dividends for
any taxable year, at the close of each taxable quarter, at least 50% of the
aggregate value of the Fund's portfolio must consist of exempt-interest
obligations. Within 60 days after the close of its taxable year, the Fund will
notify its shareholders of the portion of the dividends paid by the Fund which
constitutes exempt-interest dividends with respect to such taxable year.
However, the aggregate amount of dividends so designated by the Fund cannot
exceed the excess of the amount of interest exempt from tax under Section 103 of
the Code received by the Fund over any amounts disallowed as deductions under
Sections 265 and 171(a)(2) of the Code. The percentage of total dividends paid
by the Fund with respect to any taxable year that qualifies as federal
exempt-interest dividends will be the same for all shareholders receiving
dividends from the Fund for such year.

Shareholders should note that, upon the sale or exchange of shares of the
Tax-Exempt Reserves, if the shareholder has not held such shares for more than
six months, any loss on the sale or exchange of those shares will be disallowed
to the extent of the exempt-interest dividends received with respect to the
shares.

STATE AND LOCAL

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

Depending upon the extent of Galaxy's activities in states and localities
in which its offices are maintained, in which its agents or independent
contractors are located, or in which it is otherwise deemed to be conducting
business, each Fund may be subject to the tax laws of such

-22-
<PAGE>

states or localities. In addition, in those states and localities that have
income tax laws, the treatment of a Fund and its shareholders under such laws
may differ from their treatment under federal income tax laws. Under state or
local law, distributions of net investment income may be taxable to shareholders
as dividend income even though a substantial portion of such distributions may
be derived from interest on U.S. Government obligations which, if realized
directly, would be exempt from such income taxes. Shareholders are advised to
consult their tax advisers concerning the application of state and local taxes.

MISCELLANEOUS

Shareholders will be advised at least annually as to the federal income tax
consequences of distributions made each year.

TRUSTEES AND OFFICERS

The business and affairs of the Funds are managed under the direction of
Galaxy's Board of Trustees in accordance with the laws of the Commonwealth of
Massachusetts and the Trust's Declaration of Trust. The trustees and executive
officers of Galaxy, their addresses, principal occupations during the past five
years, and other affiliations are as follows:

<TABLE>
<CAPTION>
Positions Principal Occupation
with The During Past 5 Years
Name and Address Galaxy Fund and Other Affiliations
---------------- ----------- ----------------------
<S> <C> <C>
Dwight E. Vicks, Jr. Chairman & Trustee President & Director, Vicks Lithograph
Vicks Lithograph & & Printing Corporation (book
Printing Corporation manufacturing and commercial printing);
Commercial Drive Director, Utica First Insurance
P.O. Box 270 Company; Trustee, Savings Bank of
Yorkville, NY 13495 Utica; Director, Monitor Life Insurance
Age 67 Company; Director, Commercial
Travelers Mutual Insurance Company; Trustee,
The Galaxy VIP Fund; Trustee, Galaxy Fund II.

John T. O'Neill President, Treasurer Private Investor; Executive Vice
28 Narragansett Bay Avenue & Trustee President and CFO, Hasbro, Inc. (toy
Warwick, RI 02889 and game manufacturer) until December
Age 56 1999; Trustee, The Galaxy VIP Fund;
Trustee, Galaxy Fund II.

-23-
<PAGE>

<CAPTION>
Positions Principal Occupation
with The During Past 5 Years
Name and Address Galaxy Fund and Other Affiliations
---------------- ----------- ----------------------
<S> <C> <C>
Louis DeThomasis Trustee President, Saint Mary's College of
Saint Mary's College Minnesota; Director, Bright Day Travel,
of Minnesota Inc.; Trustee, Religious Communities
Winona, MN 55987 Trust; Trustee, The Galaxy VIP Fund;
Age 60 Trustee, Galaxy Fund II.

Donald B. Miller Trustee Chairman, Horizon Media, Inc.
10725 Quail Covey Road (broadcast services); Director/Trustee,
Boynton Beach, FL 33436 Lexington Funds; Chairman, Executive
Age 74 Committee, Compton International, Inc.
(advertising agency); Trustee, Keuka
College; Trustee, The Galaxy VIP Fund;
Trustee, Galaxy Fund II.

James M. Seed Trustee Chairman and President, The Astra
The Astra Ventures, Inc. Projects, Incorporated (land
One Citizens Plaza development); President, The Astra
Providence, RI 02903 Ventures, Incorporated (previously,
Age 59 Buffinton Box Company - manufacturer
of cardboard boxes); Commissioner,
Rhode Island Investment Commission;
Trustee, The Galaxy VIP Fund; Trustee,
Galaxy Fund II.

Bradford S. Wellman(1) Trustee Private Investor; Vice President and
2468 Ohio Street Director, Acadia Management Company
Bangor, ME 04401 (investment services); Director, Essex
Age 69 County Gas Company, until January
1994; Director, Maine Mutual Fire Insurance
Co.; Member, Maine Finance Authority;
Trustee, The Galaxy VIP Fund; Trustee,
Galaxy Fund II.

-24-
<PAGE>

<CAPTION>
Positions Principal Occupation
with The During Past 5 Years
Name and Address Galaxy Fund and Other Affiliations
---------------- ----------- ----------------------
<S> <C> <C>
W. Bruce McConnel, III Secretary Partner of the law firm Drinker Biddle &
One Logan Square Reath LLP, Philadelphia, Pennsylvania.
18th and Cherry Streets
Philadelphia, PA 19103-6996
Age 57

William Greilich Vice President Vice President, PFPC Inc., 1991-96;
PFPC Inc. Vice President and Division Manager,
4400 Computer Drive PFPC Inc., 1996 to present.
Westboro, MA 01581-5108
Age 46
</TABLE>

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

1. May be deemed to be an "interested person" within the definition set forth
in Section 2(a)(19) of the 1940 Act.

Effective September 8, 2000, each trustee receives an annual aggregate fee
of $54,000 for his services as a trustee of Galaxy, The Galaxy VIP Fund ("Galaxy
VIP") and Galaxy Fund II ("Galaxy II") (collectively, the "Trusts"), plus an
additional $4,000 for each in-person Galaxy Board meeting attended and $1,500
for each in-person Galaxy VIP or Galaxy II Board meeting attended not held
concurrently with an in-person Galaxy meeting, and is reimbursed for expenses
incurred in attending all meetings. Each trustee also receives $750 for each
telephone Board meeting in which the trustee participates, $1,000 for each
in-person Board committee meeting attended and $500 for each telephone Board
committee meeting in which the trustee participates. The Chairman of the Boards
of the Trusts is entitled to an additional annual aggregate fee in the amount of
$4,000, and the President and Treasurer of the Trusts is entitled to an
additional annual aggregate fee of $2,500 for their services in these respective
capacities. The foregoing trustees' and officers' fees are allocated among the
portfolios of the Trusts based on their relative net assets. For the period May
28, 1999 until September 7, 2000, each trustee was entitled to receive an annual
aggregate fee of $45,000 for his services as a trustee of the Trusts, plus an
additional $3,500 for each in-person Galaxy Board meeting attended, with all
other fees being those currently in effect. Prior to May 28, 1999, each trustee
was entitled to receive an annual aggregate fee of $40,000 for his services as a
trustee of the Trusts, plus an additional $2,500 for each in-person Galaxy Board
meeting attended, with all other fees being those currently in effect.

Effective March 1, 1996, each trustee became entitled to participate in
The Galaxy Fund, The Galaxy VIP Fund and Galaxy Fund II Deferred Compensation
Plans (the "Original Plans").

-25-
<PAGE>

Effective January 1, 1997, the Original Plans were merged into The Galaxy
Fund/The Galaxy VIP Fund/Galaxy Fund II Deferred Compensation Plan (together
with the Original Plans, the "Plan"). Under the Plan, a trustee may elect to
have his deferred fees treated as if they had been invested by the Trusts in the
shares of one or more portfolios in the Trusts, or other types of investment
options, and the amount paid to the trustees under the Plan will be determined
based upon the performance of such investments. Deferral of trustees' fees will
have no effect on a portfolio's assets, liabilities, and net income per share,
and will not obligate the Trusts to retain the services of any trustee or
obligate a portfolio to any level of compensation to the trustee. The Trusts may
invest in underlying securities without shareholder approval.

No employee of Fleet or PFPC Inc. ("PFPC"), Galaxy's administrator,
receives any compensation from Galaxy for acting as an officer. The trustees and
officers of Galaxy own less than 1% of its outstanding shares.

-26-
<PAGE>

The following chart provides certain information about the fees received by
Galaxy's trustees during the Funds' fiscal year ended July 31, 2000.

<TABLE>
<CAPTION>
Pension or
Retirement
Benefits Total Compensation
Accrued as Part from Galaxy and Fund
Aggregate Compensation of Fund Complex* Paid to
Name of Person/Position from Galaxy Expenses Trustees
----------------------- ----------- -------- --------
<S> <C> <C> <C>
Bradford S. Wellman $55,760 None $59,750
Trustee
Dwight E. Vicks, Jr.
Chairman and Trustee $60,427 None $64,750
Donald B. Miller**
Trustee $56,694 None $60,750
Rev. Louis DeThomasis
Trustee $55,760 None $59,750
John T. O'Neill
President, Treasurer $58,094 None $62,250
and Trustee
James M. Seed**
Trustee $56,694 None $60,750
</TABLE>

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

* The "Fund Complex" consists of Galaxy, The Galaxy VIP Fund and Galaxy
Fund II, which comprise a total of 49 separate portfolios as of
July 31, 2000.

** Deferred compensation (including interest) in the amounts of $100,680
and $111,017 accrued during the Funds' fiscal year ended July 31, 2000
for Messrs. Miller and Seed, respectively.

SHAREHOLDER AND TRUSTEE LIABILITY

Under Massachusetts law, shareholders of a business trust may, under
certain circumstances, be held personally liable as partners for the obligations
of the trust. However, Galaxy's Declaration of Trust provides that shareholders
shall not be subject to any personal liability for the acts or obligations of
Galaxy, and that every note, bond, contract, order or other undertaking made by
Galaxy shall contain a provision to the effect that the shareholders are not
personally liable thereunder. The Declaration of Trust provides for
indemnification out of the trust property of any shareholder held personally
liable solely by reason of his or her being or having been a shareholder and not
because of his or her acts or omissions outside such capacity or some other
reason. The Declaration of Trust also provides that Galaxy shall, upon request,

-27-
<PAGE>

assume the defense of any claim made against any shareholder for any act or
obligation of Galaxy, and shall satisfy any judgment thereon. Thus, the risk
of shareholder liability is limited to circumstances in which Galaxy itself
would be unable to meet its obligations.

The Declaration of Trust states further that no trustee, officer or
agent of Galaxy shall be personally liable for or on account of any contract,
debt, claim, damage, judgment or decree arising out of or connected with the
administration or preservation of the trust estate or the conduct of any
business of Galaxy; nor shall any trustee be personally liable to any person
for any action or failure to act except by reason of his own bad faith,
willful misfeasance, gross negligence or reckless disregard of his duties as
trustee. The Declaration of Trust also provides that all persons having any
claim against the trustees or Galaxy shall look solely to the trust property
for payment.

With the exceptions stated, the Declaration of Trust provides that a
trustee is entitled to be indemnified against all liabilities and expenses
reasonably incurred by him in connection with the defense or disposition of
any proceeding in which he may be involved or with which he may be threatened
by reason of his being or having been a trustee, and that the Board of
Trustees shall indemnify representatives and employees of Galaxy to the same
extent to which they themselves are entitled to indemnification.

INVESTMENT ADVISER

Fleet serves as investment adviser to the Funds. In its advisory
agreement, Fleet has agreed to provide investment advisory services to the
Funds as described in the Prospectuses. Fleet has also agreed to pay all
expenses incurred by it in connection with its activities under the advisory
agreement other than the cost of securities (including brokerage commissions)
purchased for the Funds. See "Expenses" below.

For the services provided and expenses assumed, Fleet is entitled to
receive advisory fees, computed daily and paid monthly, at the annual rate of
0.40% of the first $750,000,000 of each Fund's average daily net assets, plus
0.35% of each Fund's average daily net assets in excess of $750,000,000.
Fleet may from time to time, in its discretion, allocate a portion of its
advisory fees to Fleet Bank or other subsidiaries of FleetBoston Financial
Corporation in consideration of their efforts in the sale of shares of the
Funds.

For the fiscal year ended July 31, 2000 and the period from September
22, 1998 (commencement of operations) to July 31, 1999, Galaxy paid advisory
fees to Fleet as set forth below:

FOR THE FISCAL YEAR OR PERIOD ENDED JULY 31,
--------------------------------------------
FUND 2000 1999(1)
---- ---- -------
<S> <C> <C>
Prime Reserves $15,722,584 $11,806,913
Tax-Exempt Reserves $ 726,319 $ 546,391
Government Reserves $ 699,562 $ 503,030
</TABLE>

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

(1) For the period from September 28, 1998 (commencement of operations) to
July 31, 1999.

-28-

<PAGE>

The advisory agreement provides that Fleet shall not be liable for any
error of judgment or mistake of law or for any loss suffered by the Funds in
connection with the performance of its duties under the advisory agreement,
except a loss resulting from a breach of fiduciary duty with respect to the
receipt of compensation for services or a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of Fleet in the
performance of its duties or from reckless disregard by it of its duties and
obligations thereunder. Unless sooner terminated, the advisory agreement will
continue in effect with respect to a particular Fund from year to year as
long as such continuance is approved at least annually (i) by the vote of a
majority of trustees who are not parties to such advisory agreement or
interested persons (as defined in the 1940 Act) of any such party, cast in
person at a meeting called for the purpose of voting on such approval; and
(ii) by Galaxy's Board of Trustees, or by a vote of a majority of the
outstanding shares of such Fund. The term "majority of the outstanding shares
of such Fund" means, with respect to approval of an advisory agreement, the
vote of the lesser of (i) 67% or more of the shares of the Fund present at a
meeting, if the holders of more than 50% of the outstanding shares of the
Fund are present or represented by proxy, or (ii) more than 50% of the
outstanding shares of the Fund. The advisory agreement may be terminated by
Galaxy or by Fleet on sixty days' written notice, and will terminate
immediately in the event of its assignment.

ADMINISTRATOR

PFPC (formerly known as First Data Investor Services Group, Inc.),
located at 4400 Computer Drive, Westboro, Massachusetts 01581-5108, serves as
the Funds' administrator. PFPC is a majority-owned subsidiary of PNC
Financial Services Group.

PFPC generally assists the Funds in their administration and
operation. PFPC also serves as administrator to the other portfolios of
Galaxy. For the services provided to the Funds, PFPC is entitled to receive
administration fees based on the combined average daily net assets of the
Funds and the other portfolios offered by Galaxy, computed daily and paid
monthly, at the following annual rates, effective June 26, 2000:

<TABLE>
<CAPTION>
COMBINED AVERAGE DAILY NET ASSETS ANNUAL RATE
--------------------------------- -----------
<S> <C>
Up to $2.5 billion.......................... 0.090%
From $2.5 to $5 billion..................... 0.085%
From $5 to $12 billion...................... 0.075%
From $12 to $15 billion..................... 0.065%
From $15 to $18 billion..................... 0.060%
From $18 to $21 billion..................... 0.0575%
Over $21 billion............................ 0.0525%
</TABLE>

-29-

<PAGE>

For the period from September 10, 1998 through June 25, 2000, Galaxy
paid PFPC administration fees based on the combined average daily net assets
of the Funds and all other portfolios offered by Galaxy at the following
annual rates:

<TABLE>
<CAPTION>
COMBINED AVERAGE DAILY NET ASSETS ANNUAL RATE
--------------------------------- -----------
<S> <C>
Up to $2.5 billion.......................... 0.090%
From $2.5 to $5 billion..................... 0.085%
From $5 to $12 billion...................... 0.075%
From $12 to $15 billion..................... 0.065%
From $15 to $18 billion..................... 0.060%
Over $18 billion............................ 0.0575%
</TABLE>

In addition, PFPC also receives a separate annual fee from each Galaxy
portfolio for certain fund accounting services. From time to time, PFPC may
waive voluntarily all or a portion of the administration fee payable to it by
the Funds.

For the fiscal year ended July 31, 2000, the Prime Reserves, Tax-Exempt
Reserves and Government Reserves paid PFPC administration fees at the
effective annual rate of 0.073% of each Fund's average daily net assets.

For the fiscal year ended July 31, 2000 and the period September 22, 1998
(commencement of operations) through July 31, 1999, PFPC received
administration fees as set forth below:

<TABLE>
<CAPTION>
For the Fiscal Year or Period Ended July 31,
--------------------------------------------
Fund 2000 1999(1)
---- ---- -------
<S> <C> <C>
Prime Reserves $3,201,005 $2,485,044
Tax-Exempt Reserves $ 132,655 $ 103,321
Government Reserves $ 127,688 $ 95,182
</TABLE>

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

(1) For the period from September 28, 1998 (commencement of operations) to
July 31, 1999.

Under the administration agreement between Galaxy and PFPC (the
"Administration Agreement"), PFPC has agreed to maintain office facilities for
Galaxy, furnish Galaxy with statistical and research data, clerical, accounting,
and bookkeeping services, certain other services such as internal auditing
services required by Galaxy, and to compute the net asset value and net income
of the Funds. PFPC prepares the Funds' annual and semi-annual reports to the
SEC, federal and state tax returns, and filings with state securities
commissions, arranges for and bears the cost of processing share purchase and
redemption orders, maintains the Funds' financial accounts and records, and
generally assists in all aspects of Galaxy's operations. Unless otherwise
terminated, the Administration Agreement will remain in effect until May 31,
2001 and thereafter will continue from year to year upon annual approval of
Galaxy's Board of Trustees.

-30-

<PAGE>

CUSTODIAN AND TRANSFER AGENT

The Chase Manhattan Bank ("Chase Manhattan"), located at One Chase
Manhattan Plaza, New York, New York 10081, a wholly-owned subsidiary of The
Chase Manhattan Corporation, serves as the custodian of the Funds' assets
pursuant to a Global Custody Agreement.

Under the Global Custody Agreement, Chase Manhattan has agreed to: (i)
maintain a separate account or accounts in the name of each Fund; (ii) hold
and disburse portfolio securities on account of each Fund; (iii) collect and
make disbursements of money on behalf of each Fund; (iv) collect and receive
all income and other payments and distributions on account of each Fund's
portfolio securities; (v) respond to correspondence from security brokers and
others relating to its duties; and (vi) make periodic reports to the Board of
Trustees concerning the Funds' operations. Chase Manhattan is authorized to
select one or more banks or trust companies to serve as sub-custodian for the
Funds, provided that Chase Manhattan shall remain responsible for the
performance of all of its duties under the custodian agreement and shall be
liable to the Funds for any loss which shall occur as a result of the failure
of a sub-custodian to exercise reasonable care with respect to the
safekeeping of the Funds' assets. The assets of the Funds are held under bank
custodianship in compliance with the 1940 Act.

PFPC also serves as the Funds' transfer and dividend disbursing agent,
pursuant to a Transfer Agency and Services Agreement (the "Transfer Agency
Agreement"). Communications to PFPC should be directed to PFPC at P.O. Box
5108, 4400 Computer Drive, Westboro, Massachusetts 01581. Under the Transfer
Agency Agreement, PFPC has agreed to: (i) issue and redeem shares of each
Fund; (ii) transmit all communications by each Fund to its shareholders of
record, including reports to shareholders, dividend and distribution notices
and proxy materials for meetings of shareholders; (iii) respond to
correspondence by security brokers and others relating to its duties; (iv)
maintain shareholder accounts; and (v) make periodic reports to the Board of
Trustees concerning Galaxy's operations.

EXPENSES

Fleet and PFPC bear all expenses in connection with the performance of
their services for the Funds, except that Galaxy bears the expenses incurred
in the Funds' operations including: taxes; interest; fees (including fees
paid to its trustees and officers who are not affiliated with Fleet or PFPC);
SEC fees; state securities fees; costs of preparing and printing prospectuses
for regulatory purposes and for distribution to existing shareholders;
advisory, administration, shareholder servicing, Rule 12b-1 distribution,
fund accounting and custody fees; charges of the transfer agent and dividend
disbursing agent; certain insurance premiums; outside auditing and legal
expenses; costs of independent pricing services; costs of shareholder reports
and meetings; and any extraordinary expenses. The Funds also pay for
brokerage fees and commissions in connection with the purchase of portfolio
securities.

-31-

<PAGE>

PORTFOLIO TRANSACTIONS

Debt securities purchased or sold by the Funds are generally traded in
the over-the-counter market on a net basis (i.e., without commission) through
dealers, or otherwise involve transactions directly with the issuer of an
instrument. The cost of securities purchased from underwriters includes an
underwriting commission or concession, and the prices at which securities are
purchased from and sold to dealers include a dealer's mark-up or mark-down.

Transactions in the over-the-counter market are generally principal
transactions with dealers and the costs of such transactions involve dealer
spreads rather than brokerage commissions. With respect to over-the-counter
transactions, Fleet will normally deal directly with the dealers who make a
market in the securities involved except in those circumstances where better
prices and execution are available elsewhere or as described below.

The Funds do not intend to seek profits from short-term trading. Their
annual portfolio turnover will be relatively high, but since brokerage
commissions are normally not paid on money market instruments, it should not
have a material effect on the net income of any of these Funds.

In purchasing or selling securities for the Funds, Fleet will seek to
obtain the best net price and the most favorable execution of orders. To the
extent that the execution and price offered by more than one broker/dealer
are comparable, Fleet may effect transactions in portfolio securities with
broker/dealers who provide research, advice or other services such as market
investment literature.

Except as permitted by the SEC or applicable law, the Funds will not
acquire portfolio securities from, make savings deposits in, enter into
repurchase or reverse repurchase agreements with, or sell securities to,
Fleet, PFPC, or their affiliates, and will not give preference to affiliates
and correspondent banks of Fleet with respect to such transactions.

Galaxy is required to identify any securities of its "regular brokers or
dealers" that the Funds have acquired during Galaxy's most recent fiscal
year. At July 31, 2000: (1) the Prime Reserves was a party to a repurchase
agreement with Goldman, Sachs & Co. with a value of $58,716,000, held
commercial paper of Associates Corp. of North America with an aggregate value
of $139,827,200, and held commercial paper of Ford Motor Credit Corp. with an
aggregate value of $149,203,903; and (2) the Government Reserves was a party
to a repurchase agreement with Lehman Brothers with a value of $27,033,000.
Goldman, Sachs & Co., Associates Corp. of North America, Ford Motor Credit
Corp. and Lehman Brothers (or their affiliates) are considered "regular
brokers or dealers" of Galaxy. At July 31, 2000 the Tax-Exempt Reserves did
not hold securities of any of Galaxy's "regular brokers or dealers."

Investment decisions for each Fund are made independently from those for
the other Funds and portfolios of Galaxy and for any other investment
companies and accounts advised or managed by Fleet. When a purchase or sale
of the same security is made at substantially the same time on behalf of a
Fund, another portfolio of Galaxy, and/or another investment company

-32-

<PAGE>

or account, the transaction will be averaged as to price, and available
investments allocated as to amount, in a manner which Fleet believes to be
equitable to the Fund and such other portfolio, investment company or
account. In some instances, this investment procedure may adversely affect
the price paid or received by a Fund or the size of the position obtained or
sold by such Fund. To the extent permitted by law, Fleet may aggregate the
securities to be sold or purchased for a Fund with those to be sold or
purchased for Galaxy's other Funds and portfolios, or other investment
companies or accounts in order to obtain best execution.

DISTRIBUTION AND SERVICES PLAN

Galaxy has adopted a Distribution and Services Plan pursuant to Rule
12b-1 (the "Rule") under the 1940 Act with respect to the Funds. Under the
Distribution and Services Plan, Galaxy may pay (i) PDI or another person for
distribution services provided and expenses assumed and (ii) broker-dealers
or other financial institutions ("Service Organizations") for shareholder
administrative support services provided to shareholders of the Funds.

Payments to PDI are to compensate it for distribution assistance and
expenses assumed and activities primarily intended to result in the sale of
shares, including compensating dealers and other sales personnel (which may
include Quick & Reilly and other affiliates of Fleet), direct advertising and
marketing expenses and expenses incurred in connection with preparing,
mailing and distributing or publishing advertisements and sales literature,
for printing and mailing Prospectuses and Statements of Additional
Information (except those used for regulatory purposes or for distribution to
existing shareholders), and costs associated with implementing and operating
the Distribution and Services Plan.

The servicing agreements adopted under the Distribution and Services
Plan require the Service Organizations receiving such compensation (which may
include Quick & Reilly and other affiliates of Fleet) to perform certain
services, including providing administrative services with respect to the
beneficial owners of shares of the Funds, such as establishing and
maintaining accounts and records for their customers who invest in such
shares, assisting customers in processing purchase, exchange and redemption
requests and/or in changing dividend options and account descriptions,
developing, maintaining and supporting systems necessary to support cash
management services, such as sweep arrangements, and responding to customer
inquiries concerning their investments.

Under the Distribution and Services Plan, payments by Galaxy for
distribution expenses may not exceed 0.75% (annualized) of the average daily
net assets of a Fund and payments for shareholder administrative support
services may not exceed 0.25% (annualized) of the average daily net asset
value of a Fund's outstanding shares which are owned of record or
beneficially by a Service Organization's customers for whom the Service
Organization is the owner of record or shareholder of record or with whom it
has a servicing relationship. As of the date of this Statement of Additional
Information, Galaxy intends to limit payments under the Distribution and
Services Plan to an aggregate fee of not more than 0.56% (on an annualized
basis) of the

-33-

<PAGE>

average daily net assets of the Prime Reserves and not more than 0.51% (on an
annualized basis) of the average daily net assets of the Tax-Exempt Reserves
and Government Reserves.

Payments for distribution expenses under the Distribution and Services
Plan are subject to the Rule. The Rule defines distribution expenses to
include the cost of "any activity which is primarily intended to result in
the sale of shares issued by" Galaxy. The Rule provides, among other things,
that an investment company may bear such expenses only pursuant to a plan
adopted in accordance with the Rule. In accordance with the Rule, the
Distribution and Services Plan provides that a report of the amounts expended
under the Distribution and Services Plan, and the purposes for which such
expenditures were incurred, will be made to the Board of Trustees for its
review at least quarterly. The Distribution and Services Plan provides that
it may not be amended to increase materially the costs which the Funds may
bear for distribution pursuant to the Distribution and Services Plan without
shareholder approval, and that any other type of material amendment must be
approved by a majority of the Board of Trustees, and by a majority of the
trustees who are neither "interested persons" (as defined in the 1940 Act) of
Galaxy nor have any direct or indirect financial interest in the operation of
the Distribution and Services Plan or in any related agreements (the "12b-1
Trustees"), by vote cast in person at a meeting called for the purpose of
considering such amendments.

During the fiscal year ended July 31, 2000, the Prime Reserves,
Tax-Exempt Reserves and Government Reserves bore distribution fees and
shareholder servicing fees under the Distribution and Services Plan as set
forth in the table below:

<TABLE>
<CAPTION>
SHAREHOLDER
FUND DISTRIBUTION FEES SERVICES FEES
---- ----------------- -------------
<S> <C> <C>
Prime Reserves........................ $10,962,253 $8,769,803
Tax-Exempt Reserves................... $ 453,949 $ 272,370
Government Reserves................... $ 437,226 $ 262,336
</TABLE>

During this period, all amounts paid under the Distribution and Services Plan
were attributable to payments to broker-dealers.

Galaxy's Board of Trustees has concluded that there is a reasonable
likelihood that the Distribution and Services Plan will benefit each of the
Funds and their respective shareholders. The Distribution and Services Plan
is subject to annual reapproval by a majority of the 12b-1 Trustees and is
terminable at any time with respect to a Fund by a vote of a majority of the
12b-1 Trustees or by vote of the holders of a majority of the outstanding
shares of the Fund. Any agreement entered into pursuant to the Distribution
and Services Plan with a Service Organization is terminable with respect to a
Fund without penalty, at any time, by vote of a majority of the 12b-1
Trustees, by vote of the holders of a majority of the outstanding shares of
the Fund, or by the Service Organization. An agreement will also terminate
automatically in the event of its assignment.

-34-

<PAGE>

As long as the Distribution and Services Plan is in effect, the
nomination of the trustees who are not interested persons of Galaxy (as
defined in the 1940 Act) must be committed to the discretion of the 12b-1
Trustees.

DISTRIBUTOR

PDI serves as Galaxy's distributor. PDI is a registered broker/dealer
with principal offices located at 3200 Horizon Drive, King of Prussia,
Pennsylvania 19406. Jane Haegele is the sole shareholder of PDI.

Unless otherwise terminated, the Distribution Agreement between Galaxy
and PDI remains in effect until November 30, 2001, and thereafter will
continue from year to year upon annual approval by Galaxy's Board of
Trustees, or by the vote of a majority of the outstanding shares of Galaxy
and by the vote of a majority of the Board of Trustees of Galaxy who are not
parties to the Agreement or interested persons of any such party, cast in
person at a meeting called for the purpose of voting on such approval. The
Agreement will terminate in the event of its assignment, as defined in the
1940 Act.

The following table shows all sales charges, commissions and other
compensation received by PDI directly or indirectly from the Funds during the
fiscal year ended July 31, 2000:

AUDITORS

Ernst & Young LLP, independent auditors, with offices at 200 Clarendon
Street, Hancock Tower, Boston, Massachusetts 02116-5072, serves as auditors
for Galaxy. The financial highlights for the respective Funds included in
their Prospectuses and the financial statements for the Funds contained in
the Funds' Annual Report to Shareholders and incorporated by reference into
this Statement of Additional Information for the fiscal year ended July 31,
2000 have been audited by Ernst & Young LLP.

-35-

<PAGE>

COUNSEL

Drinker Biddle & Reath LLP (of which W. Bruce McConnel, III, Secretary
of Galaxy, is a partner), One Logan Square, 18th & Cherry Streets,
Philadelphia, Pennsylvania 19103, are counsel to Galaxy and will pass upon
certain legal matters on its behalf.

CODES OF ETHICS

Galaxy and Fleet have adopted codes of ethics pursuant to Rule 17j-1
under the 1940 Act that permit investment personnel subject to their
particular codes of ethics to invest in securities, including securities that
may be purchased or held by the Funds, for their own accounts. The codes of
ethics are on public file with, and are available from, the Securities and
Exchange Commission's Public Reference Room in Washington, D.C.

PERFORMANCE AND YIELD INFORMATION

The standardized annualized seven-day yields for the Funds are computed
by: (1) determining the net change, exclusive of capital changes and income
other than investment income, in the value of a hypothetical pre-existing
account in a Fund having a balance of one share at the beginning of a
seven-day period, for which the yield is to be quoted, (2) dividing the net
change in account value by the value of the account at the beginning of the
base period to obtain the base period return, and (3) annualizing the results
(I.E., multiplying the base period return by (365/7)). The net change in the
value of the account in each Fund includes the value of additional shares
purchased with dividends from the original share and dividends declared on
both the original share and any such additional shares, and all fees that are
charged by a Fund to all shareholder accounts in proportion to the length of
the base period, other than non-recurring account and sales charges. For any
account fees that vary with the size of the account, the amount of fees
charged is computed with respect to the Fund's mean (or median) account size.
The capital changes to be excluded from the calculation of the net change in
account value are realized gains and losses from the sale of securities and
unrealized appreciation and depreciation. The effective compound yield
quotation for each Fund is computed by adding 1 to the unannualized base
period return (calculated as described above), raising the sum to a power
equal to 365 divided by 7, and subtracting 1 from the result.

In addition, the Tax-Exempt Reserves may calculate a "tax equivalent
yield." The tax equivalent yield is computed by dividing that portion of a
Fund's yield which is tax-exempt by one minus a stated income tax rate and
adding the product to that portion, if any, of the Fund's computed yield that
is not tax-exempt. Tax equivalent yields assume the payment of federal income
taxes at a rate of 31%.

The current yields for the Funds may be obtained by calling
1-877-BUY-GALAXY (1-877-289-4252).

-36-

<PAGE>

For the seven-day period ended July 31, 2000, the annualized yields and
effective yields for the Prime Reserves, Government Reserves and Tax-Exempt
Reserves were as set forth below:

<TABLE>
<CAPTION>
TAX-
ANNUALIZED EFFECTIVE EQUIVALENT
FUND YIELD YIELD YIELD
---- ---------- --------- ----------
<S> <C> <C> <C>
Prime Reserves.............. 5.74% 5.90% *
Tax-Exempt Reserves......... 3.24% 3.29% 4.70%
Government Reserves......... 5.60% 5.76% *
</TABLE>

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

* Not applicable.

PERFORMANCE REPORTING

From time to time, in advertisements or in reports to shareholders, the
yields of the Funds, as a measure of their performance, may be quoted and
compared to those of other mutual funds with similar investment objectives
and to other relevant indexes or to rankings prepared by independent services
or other financial or industry publications that monitor the performance of
mutual funds. For example, such data is reported in national financial
publications such as DONOGHUE'S MONEY FUND REPORT-REGISTERED TRADEMARK-, a
widely recognized independent publication that monitors the performance of
mutual funds. Also, the Funds' yield data may be reported in national
financial publications including, but not limited to, MONEY MAGAZINE, FORBES,
BARRON'S, THE WALL STREET JOURNAL, and THE NEW YORK TIMES, or in publications
of a local or regional nature. The performance of the Prime Reserves and
Government Reserves may also be compared to the average yields reported by
the BANK RATE MONITOR for money market deposit accounts offered by the 50
leading banks and thrift institutions in the top five standard metropolitan
statistical areas.

The yield of a Fund refers to the income generated over a seven-day
period identified in the advertisement and is calculated as described above.
Each Fund may also advertise its "effective yield" which is calculated as
described above. The "effective yield" will be slightly higher because of the
compounding effect of the assumed reinvestment. Also, the Tax-Exempt Reserves
may from time to time advertise a "tax-equivalent yield" to demonstrate the
level of taxable yield necessary to produce an after-tax yield equivalent to
that achieved by the Fund. The "tax-equivalent yield" is computed as
described above.

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

-37-

<PAGE>

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

MISCELLANEOUS

As used in this Statement of Additional Information, "assets belonging
to" a particular Fund means the consideration received by Galaxy upon the
issuance of shares in that particular Fund, together with all income,
earnings, profits, and proceeds derived from the investment thereof,
including any proceeds from the sale of such investments, any funds or
payments derived from any reinvestment of such proceeds and a portion of any
general assets of Galaxy not belonging to a particular Fund. In determining
the net asset value of a particular Fund, assets belonging to the particular
Fund are charged with the direct liabilities in respect of that Fund and with
a share of the general liabilities of Galaxy, which are allocated in
proportion to the relative asset values of the respective Funds at the time
of allocation. Subject to the provisions of Galaxy's Declaration of Trust,
determinations by the Board of Trustees as to the direct and allocable
liabilities, and the allocable portion of any general assets with respect to
a particular Fund, are conclusive.

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

A "vote of the holders of a majority of the outstanding shares" of a
particular Fund means, with respect to the approval of a investment advisory
agreement, a Rule 12b-1 distribution plan or a change in a fundamental
investment objective or fundamental investment policy, the affirmative vote
of the holders of the lesser of (a) more than 50% of the outstanding shares
of such Fund, or (b) 67% or more of the shares of such Fund present at a
meeting if more than 50% of the outstanding shares of such Fund are
represented at the meeting in person or by proxy.

As of November 14, 2000, the name, address and percentage ownership of
the entities or persons who held of record or benefically more than 5% of the
outstanding shares of each class of Galaxy's investment portfolios were as
follows:

-38-

<PAGE>

<TABLE>
<CAPTION>
REGISTRATION NAME PERCENT OWNERSHIP
------------------------------------------- ------------------------------
<S> <C>
MONEY MARKET FUND

TRUST SHARES
Fleet National Bank 99.67%
P.O. Box 92800
Rochester, NY 14692-8900

RETAIL B SHARES
Wylie O'Brian 5.04%
70 Jaffarian Road
Haverhill, MA 01832-2909

BKB SHARES
James H. Furneaux & 6.11%
Carol S. Furneaux
JTTEN
810 Concord Road
Carlisle, MA 01741-1523

Mellon Bank (DE) NA 5.09%
Enhanced Cash Fund
Wilshire Enhanced Index
Trust
135 Santilli Hwy.
Everett, MA 02149-1906

TAX-EXEMPT FUND

TRUST SHARES
Fleet National Bank 100.00%
P.O. Box 92800
Rochester, NY 14692-8900

RETAIL A SHARES
Brenda May Earl 5.11%
279 Central Park West
PH-19A
New York, NY 10024-3080

Joseph Dimenna 9.64%
1049 Fifth Ave. Apt. P3
New York, NY 10028-0115

-39-
<PAGE>

<CAPTION>
REGISTRATION NAME PERCENT OWNERSHIP
------------------------------------------- ------------------------------
<S> <C>
Thomas E. Dambra 11.28%
Constance M. Dambra
370 Riverview Road
Rexford, NY 12148-1428

BKB SHARES
Bob & Co. 6.62%
Treasury
Attn: A. J. Ferullo
100 Federal Street
#01-12-02
Boston, MA 02110-1802

Robert J. Grantham & 6.53%
Hannelore Grantham
JTTEN
71 Mount Vernon Street
Boston, MA 02108-1330

Gilbert L. Wade 5.19%
143 Avenue B Apartment 6A
New York, NY 10009-5026

GOVERNMENT FUND

TRUST SHARES
Fleet National Bank 98.40%
P.O. Box 92800
Rochester, NY 14692-8900

U.S. TREASURY FUND

TRUST SHARES
Fleet National Bank 94.50%
P.O. Box 92800
Rochester, NY 14692-8900

RETAIL A SHARES
US Clearing A Division of Fleet Securities Inc. 11.32%
26 Broadway
New York, NY 10004-1703

-40-
<PAGE>

<CAPTION>
REGISTRATION NAME PERCENT OWNERSHIP
------------------------------------------- ------------------------------
<S> <C>
BKB SHARES
Allan J. Oconner 6.07%
P. O. Box 5071
Incline Village, NV 89450-5071

INSTITUTIONAL TREASURY MONEY MARKET FUND

TRUST SHARES
Fleet National Bank 17.43%
P.O. Box 92800
Rochester, NY 14692-8900

Bob & Co. 6.77%
Treasury
Attn: A. J. Ferullo
100 Federal Street
#01-13-07
Boston, MA 02110-1802

Fleet Bank Omnibus 61.32%
Steven P. Suchecki
20 Church Street
Hartford, CT 06103

INSTITUTIONAL GOVERNMENT MONEY MARKET FUND

TRUST SHARES
Fleet National Bank 98.97%
P.O. Box 92800
Rochester, NY 14692-8900

INSTITUTIONAL MONEY MARKET FUND

TRUST SHARES
Fleet National Bank 31.22%
P.O. Box 92800
Rochester, NY 14692-8900

US Clearing A Division of Fleet Securities Inc. 5.60%
26 Broadway
New York, NY 10004-1703

-41-
<PAGE>

<CAPTION>
REGISTRATION NAME PERCENT OWNERSHIP
------------------------------------------- ------------------------------
<S> <C>
Bob & Co. 19.31%
Treasury
Attn: A.J. Ferullo
100 Federal Street
#01-13-07
Boston, MA 02110-1802

Kern Oil Inc. 7.15%
Attn: Virginia Frazier
7724 E. Panama Ln.
Bakersfield, CA 93307-9210

MASSACHUSETTS MUNICIPAL MONEY MARKET FUND

RETAIL A SHARES
Fleet National Bank 42.78%
P.O. Box 92800
Rochester, NY 14692-8900

U.S. Clearing A Division of Fleet 20.43%
Securities, Inc.
26 Broadway
New York, NY 10004-1703

CONNECTICUT MUNICIPAL MONEY MARKET FUND

RETAIL A SHARES
Fleet National Bank 47.60%
P.O. Box 92800
Rochester, NY 14692-8900

William L. Bucknall 5.42%
Norma Lee Bucknall
5 Oak Ridge Dr.
Bethany, CT 06524-3117

-42-
<PAGE>

<CAPTION>
REGISTRATION NAME PERCENT OWNERSHIP
------------------------------------------- ------------------------------
<S> <C>
EQUITY VALUE FUND
TRUST SHARES
Gales & Co. 66.24%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

Gales & Co. 21.78%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

Gales & Co. 9.84%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

EQUITY GROWTH FUND
TRUST SHARES
Gales & Co. 66.92%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

Gales & Co. 18.47%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

Gales & Co. 14.36%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

-43-
<PAGE>

<CAPTION>
REGISTRATION NAME PERCENT OWNERSHIP
------------------------------------------- ------------------------------
<S> <C>
PRIME A SHARES
US Clearing A Division of Fleet Securities Inc. 44.83%
FBO# 104-32732-16
Hilda Brandt
Roland Park Place
830 W. 40th Street, Apt. 359
Baltimore, MD 21211-2176

US Clearing A Division of Fleet Securities Inc. 23.40%
FBO# 114-97238-17
Sara Mallow
6415 NW 24th Street
Boca Raton, FL 33434-4320

US Clearing A Division of Fleet Securities Inc. 7.79%
FBO# 120-97689-18
Yook Y Doo
46-34 Robinson St.
Flushing, NY 11355-3445

US Clearing A Division of Fleet Securities Inc. 6.16%
FBO# 021-90471-15
Mabel L Bowman
35634 Meyers Ct.
Fremont, CA 94536-2540

US Clearing A Division of Fleet Securities Inc. 6.64%
FBO# 237-97013-17
Yale Hirshberg
48 Laurelwood Drive
Webster, MA 01570-3441

PRIME B SHARES
US Clearing A Division of Fleet Securities Inc. 18.98%
FBO# 111-98315-17
Thomas J Bernfeld
185 West End Avenue, Apt. 21D
New York, NY 10023-5548

-44-
<PAGE>

<CAPTION>
REGISTRATION NAME PERCENT OWNERSHIP
------------------------------------------- ------------------------------
<S> <C>
US Clearing A Division of Fleet Securities Inc. 12.27%
FBO# 166-31108-13
Frank Catanho, Trustee of the Frank Catanho
1996 Trust dated 10/22/96
24297 Mission Blvd.
Hayward, CA 94544-1020

US Clearing A Division of Fleet Securities Inc. 11.91%
FBO# 024-90318-16
Lynn C. Sherrie
P.O. Box 316
Wilson, NY 14172-0316

US Clearing A Division of Fleet Securities Inc. 10.27%
FBO# 221-00085-18
Walter M. Swiecicki &
Cathleen Swiecicki JT WROS
119 Old Beekman Road
Monmouth Junction, NJ 08852-3114

US Clearing A Division of Fleet Securities Inc. 5.64%
FBO# 244-90004-19
W P Fleming
66500 E 253rd
Grove, OK 74344-6163

US Clearing Corp. 6.33%
FBO 131-98122-18
Elaine B. Odessa
9 Newman Road
Pawtucket, RI 02860-6183

GROWTH FUND II

TRUST SHARES
Gales & Co. 21.88%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

-45-
<PAGE>

<CAPTION>
REGISTRATION NAME PERCENT OWNERSHIP
------------------------------------------- ------------------------------
<S> <C>
Gales & Co. 7.98%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

Gales & Co. 69.72%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

RETAIL B SHARES
US Clearing A Division of Fleet Securities Inc. 9.11%
FBO 979-00486-16
Joseph Papai Jr.
918 Lee Avenue
North Brunswick, NJ 08902-2351

Fleet Bank NA 6.86%
Cust of the Rollover IRA
FBO Juan Rosai
25 Crestview Dr.
North Haven, CT 06473

John S. Bunton 5.19%
780 Mountain Road
Maplewood Village
Parsonfield, ME 04047

EQUITY INCOME FUND

TRUST SHARES
Gales & Co. 51.76%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

-46-
<PAGE>

<CAPTION>
REGISTRATION NAME PERCENT OWNERSHIP
------------------------------------------- ------------------------------
<S> <C>
Gales & Co. 35.50%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

Gales & Co. 12.43%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

INTERNATIONAL EQUITY FUND

TRUST SHARES
Gales & Co. 29.33%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

Gales & Co. 28.07%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

Gales & Co. 39.60%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

RETAIL A SHARES
Charles Schwab & Co. Inc. 10.12%
Special Custody Acct. for Exclusive of Customers
Attn: Mutual Funds
101 Montgomery St.
San Francisco, CA 94104-4122

-47-
<PAGE>

<CAPTION>
REGISTRATION NAME PERCENT OWNERSHIP
------------------------------------------- ------------------------------
<S> <C>
Mellon Bank, NA 7.96%
ACF SMM Trust 1999-J
A/C #SMME1000002
135 Santilli Hwy
Room 026 0320
Everett, MA 02149-1950

PRIME A SHARES
US Clearing A Division of Fleet Securities Inc. 80.62%
FBO 125-98055-11 Albert F Twanmo 6508 81st St.
Cabin John, MD 20818-1203

US Clearing A Division of Fleet Securities Inc. 14.83%
FBO 136-99157-13
Jon-Paul Dadaian
178 Clarken Drive
West Orange, NJ 07052-3441

PRIME B SHARES
US Clearing A Division of Fleet Securities Inc. 72.65%
FBO# 102-59241-17
Church & Friary of St. Francis of Assisi
c/o Fr. Ronald P Stark OFM
135 West 31st St.
New York, NY 10001-3405

US Clearing A Division of Fleet Securities Inc. 5.25%
FBO# 195-90025-18
Guido Guinasso
418 College Avenue
San Francisco, CA 94112-1114

BKB SHARES
Trust Company of America 25.16%
FB TCA
P.O. Box 6503
Englewood, CO 80155-6675

-48-
<PAGE>

<CAPTION>
REGISTRATION NAME PERCENT OWNERSHIP
------------------------------------------- ------------------------------
<S> <C>

GROWTH AND INCOME FUND

TRUST SHARES
Gales & Co. 54.90%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

Gales & Co. 40.20%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

PRIME A SHARES
US Clearing A Division of Fleet Securities Inc. 36.51%
FBO# 160-27022-17
Linda Shaw, Trustee for the Linda J Shaw Trust
920 Meadows Road
Geneva, IL 60134-3052

US Clearing A Division of Fleet Securities Inc. 29.52%
FBO# 113-27816-16
Pamela M Fein
68 Oak Ridge Drive
Bethany, CT 06524-3118

US Clearing A Division of Fleet Securities Inc. 24.69%
FBO# 175-97327-10
Margaret Ann Gillenwater
2525 E Prince Road #23
Tucson, AZ 85716-1146

US Clearing A Division of Fleet Securities Inc. 6.42%
FBO#103-80060-19
Saint Clare School Endowment Fund
Attn: Fr, O'Shea/Andrew J Houvouras
&/or Bruce Blatman
821 Prosperity Farms Road
No Palm Beach, Fl 33408-4299

-49-
<PAGE>

<CAPTION>
REGISTRATION NAME PERCENT OWNERSHIP
------------------------------------------- ------------------------------
<S> <C>
PRIME B SHARES

US Clearing A Division of Fleet Securities Inc. 29.49%
FBO# 147-97497-13
Martin Allen Sante
8858 Moanalua Way
Diamondhead, MS 39525

US Clearing A Division of Fleet Securities Inc. 19.45%
FBO# 103-31744-16
Irwin Luftig & Elaine Luftig
6119 Bear Creek Ct
Lake Worth, FL 33467-6812

US Clearing A Division of Fleet Securities Inc. 16.54%
FBO# 148-28677-18
Linda M. Berke & Michael E. Berke JT TEN
30941 Westwood Road
Farmington Hills, MI 48331-1466

US Clearing A Division of Fleet Securities Inc. 16.14%
FBO# 147-29019-15
Walter W Quan
2617 Skyline Drive
Lorain, OH 44053-2243

US Clearing A Division of Fleet Securities Inc. 6.18%
FBO# 013-90166-12
Florence G. St. Onge
34 Cedar Lane
Warren, RI 02885-2236

US Clearing A Division of Fleet Securities Inc. 5.94%
FBO# 108-00116-10
Michael Kennedy & Carleen Kennedy JT WROS
12 Walton Avenue
Locust Valley, NY 11560-1227

-50-
<PAGE>

<CAPTION>
REGISTRATION NAME PERCENT OWNERSHIP
------------------------------------------- ------------------------------
<S> <C>

ASSET ALLOCATION FUND

TRUST SHARES
Gales & Co. 91.77%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

Gales & Co. 6.79%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

PRIME A SHARES
US Clearing A Division of Fleet Securities Inc. 33.07%
FBO# 114-97238-17
Sara Mallow
6415 NW 24th Street
Boca Raton, FL 33434-4320

US Clearing A Division of Fleet Securities Inc. 21.13%
FBO# 175-97327-10
Margaret Ann Gillenwater
2525 E Prince Road #23
Tucson, AZ 85716-1146

US Clearing A Division of Fleet Securities Inc. 10.79%
FBO 170-29789-15
Nicholas G. Roselli & Nicholas A. Roselli JT WROS
315 Southampton Road
Westfield, MA 01085-1360

US Clearing A Division of Fleet Securities Inc. 14.41%
FBO 194-97099-17
James Kenneth Winter
2523 Greenridge Dr.
Belden, MS 08826-9530

-51-
<PAGE>

<CAPTION>
REGISTRATION NAME PERCENT OWNERSHIP
------------------------------------------- ------------------------------
<S> <C>
US Clearing Corp 5.01%
FBO# 155-98529-16
Frederick B Galt
144 Jay Street
Albany, NY 12210-1806

PRIME B SHARES
US Clearing A Division of Fleet Securities Inc. 10.87%
FBO# 138-97818-14
Carol Y Foster
524 Marie Avenue
Blountstown, FL 32424-1218

US Clearing A Division of Fleet Securities Inc. 10.37%
FBO# 102-92974-11
Ann E Herzog
74 Tacoma Street
Staten Island, NY 10304-4222

US Clearing A Division of Fleet Securities Inc. 6.91%
FBO# 166-98559-16
Ann P Sargent
422 Los Encinos Avenue
San Jose, CA 95134-1336

US Clearing A Division of Fleet Securities Inc. 6.71%
FBO# 166-97970-19
Alicia E Schober
10139 Ridgeway Drive
Cupertino, CA 95014-2658

US Clearing A Division of Fleet Securities Inc. 6.16%
FBO# 194-14889-16
Paul R Thornton & Karin Z Thornton JT TEN
1207 Oak Glen Lane
Sugar Land, TX 77479-6175

-52-
<PAGE>

<CAPTION>
REGISTRATION NAME PERCENT OWNERSHIP
------------------------------------------- ------------------------------
<S> <C>
US Clearing Corp 5.11%
FBO# 013-00189-14
David Paquin & Susan Paquin
Attn: Paul D Nunes VP
JT TEN
100 Westminister St.,
RI/MO/F02G
Providence, RI 02903-2318

SMALL COMPANY EQUITY FUND

TRUST SHARES
Gales & Co. 61.39%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638

Gales & Co. 28.39%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638

Gales & Co. 9.14%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638

SMALL CAP VALUE FUND

TRUST SHARES
Gales & Co. 44.63%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

-53-
<PAGE>

<CAPTION>
REGISTRATION NAME PERCENT OWNERSHIP
------------------------------------------- ------------------------------
<S> <C>
Gales & Co. 36.65%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

Gales & Co. 18.54%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

PRIME A SHARES
US Clearing A Division of Fleet Securities Inc. 30.37%
FBO# 104-32732-16
Hilda Brandt
Roland Park Place
830 W. 40th, Apt. 359
Baltimore, MD 21211-2176

US Clearing A Division of Fleet Securities Inc. 19.14%
FBO# 150-98301-11
N Clifford Nelson Jr
58 Middlebury Road
Orchard Park, NY 14127-3581

US Clearing A Division of Fleet Securities Inc. 19.00%
FBO# 102-60254-19
Frederick W Geissinger
601 NW 2nd Street
Evansville, IN 47708-1013

US Clearing A Division of Fleet Securities Inc. 12.75%
FBO# 103-97564-14
Thomas X McKenna
170 Turtle Creek Drive
Tequesta, FL 33469-1547

-54-
<PAGE>

<CAPTION>
REGISTRATION NAME PERCENT OWNERSHIP
------------------------------------------- ------------------------------
<S> <C>
US Clearing A Division of Fleet Securities Inc. 9.35%
FBO# 103-31296-18
Edward U Roddy III
109 Angler Avenue
Palm Beach, FL 33480-3101

PRIME B SHARES
US Clearing A Division of Fleet Securities Inc. 13.72%
FBO# 111-98315-17
Thomas J Bernfeld
185 West End Avenue, Apt. 21D
New York, NY 10023-5548

US Clearing A Division of Fleet Securities Inc. 12.03%
FBO# 162-27769-10
Gilbert Shue & Eva Shue Trustees
Shue Family Trust - DTD
11/8/84
10119 Riverside Dr.
Ontario, CA 91761-7814

US Clearing A Division of Fleet Securities Inc. 9.29%
FBO# 107-30623-15
Andrejs Zvejnieks
2337 Christopher Walk
Atlanta, GA 30327-1110

US Clearing A Division of Fleet Securities Inc. 7.23%
FBO# 108-98472-11
Rufus O. Eddins, Jr.
360 Dominion Circle
Knoxville, TN 37922-2750

US Clearing A Division of Fleet Securities Inc. 6.94%
FBO# 221-97250-13
Micheal A Veschi
106 Exmoor Court
Leesburg, VA 20176-2049

-55-
<PAGE>

<CAPTION>
REGISTRATION NAME PERCENT OWNERSHIP
------------------------------------------- ------------------------------
<S> <C>
STRATEGIC EQUITY FUND

TRUST SHARES
Gales & Co. 94.24%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

Gales & Co. 5.20%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4
159 East Main Street
Rochester, NY 14638-0001

RETAIL B SHARES
Violet K. Saidnehr 5.92%
260 Middle Neck Road
Great Neck, NY 11021-1175

PAN-ASIA FUND

TRUST SHARES
FIM Funding, Inc. 100.00%
Attn: Richard Joseph
75 State Street
5th Floor
Mailstop: MA DE 10404G
Boston, MA 02109

RETAIL A SHARES
Mark Maskowitz 45.80%
P.O. Box 576
Wainscott, NY 11975-0576

Fleet Bank, NA 21.26%
Cust for the IRA Plan FBO
Mark Maskowitz
P.O. Box 576
Wainscott, NY 11975-0576

-56-
<PAGE>

<CAPTION>
REGISTRATION NAME PERCENT OWNERSHIP
------------------------------------------- ------------------------------
<S> <C>
Anthony P Vericco 5.40%
& Antonia Vericco JT WROS
32 Susan Drive
Saugus, MA 01906

John J Mancini 11.30%
Anthony Mancini JT TEN
114 Alpine Road
Portland, ME 04103-2804

RETAIL B SHARES
Andrew Montzolis 7.27%
40 Fox Run Road
Waterbury, CT 06708-2137

Fleet Bank, NA 68.01%
Cust of the Rollover IRA
FBO Ben V. Phan
120 Stoughton Street
Dorchester, MA 02125-1900

FIM Funding, Inc. 12.03%
Attn: Richard Joseph
75 State Street, 5th Floor
Mailstop: MA DE 10404G
Boston, MA 02109

US Clearing Corp 12.64%
FBO# 245-01434-13
Anthony M. Savoy
103 Oak Street
Indian Orchard, MA 01151-1538

PRIME A SHARES
FIM Funding, Inc. 99.61%
Attn: Richard Joseph
75 State Street
5th Floor
Mailstop: MA DE 10404G
Boston, MA 02109

-57-
<PAGE>

<CAPTION>
REGISTRATION NAME PERCENT OWNERSHIP
------------------------------------------- ------------------------------
<S> <C>
PRIME B SHARES
FIM Funding, Inc. 99.61%
Attn: Richard Joseph
75 State Street
5th Floor
Mailstop: MA DE 10404G
Boston, MA 02109

INTERMEDIATE GOVERNMENT INCOME FUND

TRUST SHARES
Gales & Co. 64.39%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

Gales & Co. 21.17%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

Gales & Co. 14.19%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 1648-0001

RETAIL B SHARES
Adriana Vita 5.37%
345 Park Ave.
New York, NY 10154

Fleet Bank, NA 9.24%
Cust of the Rollover IRA
FBO Joel J Corriveau, Sr.
28 Louise Ave.
Methuen, MA 01844

-58-
<PAGE>

<CAPTION>
REGISTRATION NAME PERCENT OWNERSHIP
------------------------------------------- ------------------------------
<S> <C>
BKB SHARES
Boott Mills 8.00%
C/o Richard D Leggat
25th Floor
150 Federal Street
Boston, MA 02110-1745

Pipe Fitters Local 537 8.47%
Health & Welfare Fund
35 Travis Street #1
Allston, MA 02134-1251

HIGH QUALITY BOND FUND

TRUST SHARES
Gales & Co. 32.76%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

Gales & Co. 16.78%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

Gales & Co. 50.04%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

-59-
<PAGE>

<CAPTION>
REGISTRATION NAME PERCENT OWNERSHIP
------------------------------------------- ------------------------------
<S> <C>
PRIME A SHARES
US Clearing A Division of Fleet Securities Inc. 19.66%
FBO# 103-30971-12
Doris G Schack
FBO - Doris G Schack
Living Trust
9161 East Evans
Scottsdale, AZ 85260-7575

US Clearing A Division of Fleet Securities Inc. 54.35%
FBO# 132-90090-11
Virginia Holmes
303 Bella Vista Drive
Ithaca, NY 14850-5774

US Clearing A Division of Fleet Securities Inc. 8.96%
FBO# 013-02964-11
Jane L Grayhurst
770 Boylston St., Apt 10G
Boston, MA 02199-7709

US Clearing A Division of Fleet Securities Inc. 16.88%
FBO# 132-47141-10
Virginia A Holmes
303 Bella Vista Drive
Ithaca, NY 14850-5774

PRIME B SHARES
US Clearing A Division of Fleet Securities Inc. 32.60%
FBO# 200-70099-19
Neil C Feldman
41 Windham Way
Englishtown, NJ 07726-8216

US Clearing A Division of 13.15%
Fleet Securities Inc.
FBO# 119-97697-10
Ira Zornberg
4219 Nautilus Avenue
Brooklyn, NY 11224-1019

-60-
<PAGE>

<CAPTION>
REGISTRATION NAME PERCENT OWNERSHIP
------------------------------------------- ------------------------------
<S> <C>
US Clearing A Division of Fleet Securities Inc. 12.63%
FBO# 147-24459-13
Jay Robert Klein
26800 Amhearst Circle
#209
Cleveland, OH 44122-7572

US Clearing A Division of Fleet Securities Inc. 12.54%
FBO# 230-02116-18
Marjorie Dion
301 Raimond Street
Yaphank, NY 11980-9725

US Clearing A Division of Fleet Securities Inc. 8.39%
FBO# 157-98031-13
Patricia Fusco
112 E. Chapel Avenue
Cherry Hill, NJ 08034-1204

US Clearing A Division of Fleet Securities Inc. 6.21%
FBO# 238-97175-19
Marie Gottfried
10208 Andover Coach
Circle H-2
Lake Worth, FL 33467-8158

SHORT-TERM BOND FUND

TRUST SHARES
Gales & Co. 31.45%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

Gales & Co. 56.13%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

-61-
<PAGE>

<CAPTION>
REGISTRATION NAME PERCENT OWNERSHIP
------------------------------------------- ------------------------------
<S> <C>
Gales & Co. 11.84%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

RETAIL B SHARES
Chelsea Police Relief Assoc. 16.91%
John R. Phillips Treas.
&Michael McCona Clerk
180 Crescent Avenue
Chelsea, MA 02150-3017

Josue Colon Cust 9.42%
Hazel Colon UGMA CT
400 Lasalle St.
New Britan, CT 06051-1315

Elizabeth Mugar 8.70%
10 Chestnut St.
Apt. 1808
Springfield, MA 01103-1709

TAX-EXEMPT BOND FUND

TRUST SHARES
Gales & Co. 38.90%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

Gales & Co. 24.46%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

-62-
<PAGE>

<CAPTION>
REGISTRATION NAME PERCENT OWNERSHIP
------------------------------------------- ------------------------------
<S> <C>
Gales & Co. 36.33%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

RETAIL A SHARES
Charles Dagraca & Barbara 8.23%
Dagraca
JT WROS
20 William Penn Rd.
Warren, NJ 07059

RETAIL B SHARES
Sylvia Fendler 11.58%
72 Brinkerhoff Ave.
Stamford, CT 06905

Frances E Stady 5.97%
P.O. Box 433
3176 Main St.
Yorkshire, NY 14173-0433

US Clearing A Division of 5.16%
Fleet Securities Inc.
FBO# 978-02869-11
Carol Guy & Ali E Guy
14 Thomas St.
Scarsdale, NY 10583-1031

INTERMEDIATE TAX-EXEMPT BOND FUND

TRUST SHARES
Gales & Co. 5.80%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638

-63-
<PAGE>

<CAPTION>
REGISTRATION NAME PERCENT OWNERSHIP
------------------------------------------- ------------------------------
<S> <C>
Gales & Co. 92.01%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638

RETAIL A SHARES
Lynne P Eldridge Rev. Living Trust 99.26%
Lynne P Eldridge Trustee
U/T/A Dated 2/24/00
12 Tides End Lane
PO Box 576
East Orleans, MA 02643-0576

BKB SHARES
Charles Schwab & Co. 36.59%
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122

Richard F Messing 5.14%
3310 South Ocean Blvd.
Apt. 532
Highland Beach, FL 33487

CONNECTICUT MUNICIPAL BOND FUND

TRUST SHARES
Gales & Co. 71.33%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638

Gales & Co. 28.46%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638

-64-
<PAGE>

<CAPTION>
REGISTRATION NAME PERCENT OWNERSHIP
------------------------------------------- ------------------------------
<S> <C>
RETAIL A SHARES
Theodore Konstantino 11.38%
Jean N. Konstantino JT Wros
49 Shore Rd.
Clinton, CT 06413-2363

CONNECTICUT INTERMEDIATE MUNICIPAL BOND FUND

TRUST SHARES
Gales & Co. 93.05%
Fleet Investment Services
Mutual Funds Unit -
NY/RO/TO4A
159 East Main Street
Rochester, NY 14638

RETAIL A SHARES
Maria Guarna & Nazzareno 31.56%
Guarna JT Wros
147 Woodbury Ave.
Stamford, CT 06907

Catherine J. Fellows 11.40%
7 Pent Road
Bloomfield, CT 06002-1518

McGrath Family Living Trust 56.98%
George McGrath Trustee
35 Ridgewood Road
Meriden, CT 06450-4459

BKB SHARES
Charles Schwab & Co. 25.20%
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122

-65-
<PAGE>

<CAPTION>
REGISTRATION NAME PERCENT OWNERSHIP
------------------------------------------- ------------------------------
<S> <C>
FLORIDA MUNICIPAL BOND FUND

TRUST SHARES
Gales & Co. 89.42%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

Gales & Co. 9.54%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

MASSACHUSETTS MUNICIPAL BOND FUND

TRUST SHARES
Gales & Co. 42.94%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

Gales & Co. 54.88%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

MASSACHUSETTS INTERMEDIATE MUNICIPAL BOND FUND

TRUST SHARES
Gales & Co. 84.50%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

-66-
<PAGE>

<CAPTION>
REGISTRATION NAME PERCENT OWNERSHIP
------------------------------------------- ------------------------------
<S> <C>
Gales & Co. 14.97%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

RETAIL A SHARES
Edward S. Kondi & 22.38%
Wenja S. Kondi JT Wros
501 Lexington St.
Unit 1
Waltham, MA 02462

William J. Tedoldi & Betsy M. Tedoldi JT Wros 44.57%
68 High St.
Needham, MA 02492

US Clearing A Division of Fleet Securities Inc. 21.84%
FBO# 245-00100-00
Marc P. Hayes & Helen Hayes JTTEN
52 Phillip Farm Rd.
Marshfield, MA 02050

CORPORATE BOND FUND

TRUST SHARES
Gales & Co. 37.64%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

Gales & Co. 34.42%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

-67-
<PAGE>

<CAPTION>
REGISTRATION NAME PERCENT OWNERSHIP
------------------------------------------- ------------------------------
<S> <C>
Gales & Co. 21.52%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

RHODE ISLAND MUNICIPAL BOND FUND

TRUST SHARES
Gales & Co. 90.44%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

Gales & Co. 9.21%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

Retail A Shares
Gales & Co. 33.93%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

Gales & Co. 24.64%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

James R McCulloch 7.29%
c/o Microfibre
P.O. Box 1208
Pawtucket, RI 02862-1208

-68-
<PAGE>

<CAPTION>
REGISTRATION NAME PERCENT OWNERSHIP
------------------------------------------- ------------------------------
<S> <C>
BKB SHARES
US Clearing A Division of Fleet Securities Inc. 9.18%
FBO# 245-26616-10
Penn & Curren Materials
75 Pennsylvania Avenue
Warwick, RI 02888-3028

Charles Schwab & Co. 8.13%
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122

John J Almedia TR 5.23%
John J Almedia Revocable Trust
U/A Dated May 15, 1997
517 Pleasant Street
Pawtucket, RI 02860-5725

NEW YORK MUNICIPAL BOND FUND

TRUST SHARES
Gales & Co. 63.16%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

Gales & Co. 31.08%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

Gales & Co. 5.70%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

-69-
<PAGE>

<CAPTION>
REGISTRATION NAME PERCENT OWNERSHIP
------------------------------------------- ------------------------------
<S> <C>
RETAIL A SHARES
Marilyn J Brantley 13.59%
5954 Van Allen Road
Belfast, NY 14711-8750

NEW JERSEY MUNICIPAL BOND FUND

TRUST SHARES
Gales & Co. 52.59%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

Gales & Co. 46.85%
Fleet Investment Services
Mutual Funds Unit - NY/RO/TO4A
159 East Main Street
Rochester, NY 14638-0001

RETAIL A SHARES
John W Maki & Kimberly McGrath Maki 8.96%
JT WROS
1 Connet Lane
Mendham, NJ 07945-2938

US Clearing A Division of Fleet Securities Inc. 26.75%
FBO 979-08676-19George L. Gutierrez &
Nereida Gutierrez
8 Old Farm Road
Saddle River, NJ 07458-3106

US Clearing A Division of Fleet Securities Inc. 59.11%
FBO 979-10688-11
John J. Delucca
314 Ardmore Road
Ho Ho Kus, NJ 07423-1110

PRIME RESERVES
U.S. Clearing 100.00%
26 Broadway
New York, NY 10004-1703

-70-
<PAGE>

<CAPTION>
REGISTRATION NAME PERCENT OWNERSHIP
------------------------------------------- ------------------------------
<S> <C>
GOVERNMENT RESERVES
U.S. Clearing 100.00%
26 Broadway
New York, NY 10004-1703

TAX-EXEMPT RESERVES
U.S. Clearing 100.00%
26 Broadway
New York, NY 10004-1703

-71-
<PAGE>

As of November 14, 2000, the name, address and percentage ownership of the
entities or persons that held beneficially more than 5% of the outstanding Trust
Shares of each of Galaxy's investment portfolios were as follows:

MONEY MARKET FUND

Stable Asset Fund 13.04%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638

GOVERNMENT FUND

Murphy John Davis TRUA 6.89%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638

U.S. TREASURY FUND

Loring Walcott Client Sweep Acct. 28.08%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638

-72-
<PAGE>

<CAPTION>
REGISTRATION NAME PERCENT OWNERSHIP
------------------------------------------- ------------------------------
<S> <C>
EQUITY VALUE FUND

Leviton MFG Co Ret Sav Plan 6.34%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638

EQUITY GROWTH FUND

Fleet Savings Plus-Equity Growth 23.44%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638

Nusco Retiree Health VEBA Trust 6.59%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638

INTERNATIONAL EQUITY FUND

Fleet Savings Plus-Intl Equity 8.78%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638

FFG International Equity Fund 7.18%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638

STRATEGIC EQUITY FUND

FFG Retirement & Pension VDG 90.51%
C/O Fleet Financial Group
159 East Main
Rochester, NY 14638

-73-
<PAGE>

<CAPTION>
REGISTRATION NAME PERCENT OWNERSHIP
------------------------------------------- ------------------------------
<S> <C>
HIGH QUALITY BOND FUND

Fleet Savings Plus Plan-HQ Bond 12.42%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638

Short Term Bond Fund 8.84%
Brown Shoe Co.
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638

ASSET ALLOCATION FUND

Fleet Savings Plus-Asset Allocation 31.72%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638

SMALL COMPANY EQUITY FUND

Fleet Savings Plus-Small Company 37.23%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638

TAX EXEMPT BOND FUND

Nusco Retiree Health VEBA Trust 37.77%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638

-74-
<PAGE>

<CAPTION>
REGISTRATION NAME PERCENT OWNERSHIP
------------------------------------------- ------------------------------
<S> <C>
CONNECTICUT MUNICIPAL BOND FUND

Winnifred M Purdy 7.83%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638

John H. Dverden IMA 6.88%
C/O Norstar Trust Co.
Gales & Co
159 East Main
Rochester, NY 14638

CORPORATE BOND FUND

Cole Hersee Pension Plan 7.36%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638

GROWTH AND INCOME FUND

Fleet Savings Plus-Grth Income 38.31%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638

SMALL CAP VALUE FUND

FFG Emp Ret Misc Assets SNC 23.39%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638

-75-
<PAGE>

<CAPTION>
REGISTRATION NAME PERCENT OWNERSHIP
------------------------------------------- ------------------------------
<S> <C>
CVS Inc 401K P/S Pln 3 12.51%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638

INSTITUTIONAL GOVERNMENT MONEY MARKET FUND

INS Corp. of New York 6.05%
Liab. Match Port
C/O Norstar Trust Co.
Gales & Co.
159 East Main
Rochester, NY 14638

NEW JERSEY MUNICIPAL BOND FUND

Perillo Tours 19.40%
C/O Norstar Trust Co/Gales & Co
159 East Main
Rochester, NY 14638

Royal Chambord IMA 9.70%
C/O Norstar Trust Co/Gales & Co
159 East Main
Rochester, NY 14638

McKee Wendell A. Marital Trust 9.63%
C/O Norstar Trust Co/Gales & Co
159 East Main
Rochester, NY 14638

Dorothy L. Nelson 6.49%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638

Robert Lawrence Jr. 5.49%
C/O Norstar Trust Co
Gales & Co
159 East Main
Rochester, NY 14638

-76-
<PAGE>

<CAPTION>
REGISTRATION NAME PERCENT OWNERSHIP
------------------------------------------- ------------------------------
<S> <C>
RHODE ISLAND MUNICIPAL BOND FUND

CP Pritchard TR GST Non-Exempt 13.33%
C/O Norstar Trust Co.
Gales & Co.
159 East Main
Rochester, NY 14638

INSTITUTIONAL TREASURY MONEY MARKET FUND

Transwitch Cap Focus Accr B 9.07%
C/O Norstar Trust Co.
Gales & Co.
159 East Main
Rochester, NY 14638

CONNECTICUT INTERMEDIATE MUNICIPAL BOND FUND

T.P. Parkas Temp 10.51%
C/O Norstar Trust Co.
Gales & Co.
159 East Main
Rochester, NY 14638

M.G./Michael Sendzimir 5.34%
C/O Norstar Trust Co.
Gales & Co.
159 East Main
Rochester, NY 14638

FLORIDA MUNICIPAL BOND FUND

C. Pritchard TR B SH LP Hess 6.53%
C/O Norstar Trust Co.
Gales & Co.
159 East Main
Rochester, NY 14638

-77-
<PAGE>

<CAPTION>
REGISTRATION NAME PERCENT OWNERSHIP
------------------------------------------- ------------------------------
<S> <C>
William M. Wood Trust 6.23%
C/O Norstar Trust Co.
Gales & Co.
159 East Main
Rochester, NY 14638

Charles G. Bancroft TR U/Will 5.74%
C/O Norstar Trust Co.
Gales & Co.
159 East Main
Rochester, NY 14638
</TABLE>

-78-
<PAGE>

FINANCIAL STATEMENTS

Galaxy's Annual Report to Shareholders with respect to the Funds for the
fiscal year ended July 31, 2000 has been filed with the SEC. The financial
statements in such Annual Report are incorporated by reference into this
Statement of Additional Information. The financial statements and financial
highlights included in the Annual Report for the Funds for the fiscal year
ended July 31, 2000 have been audited by Ernst & Young LLP, whose report
thereon also appears in such Annual Report and is incorporated herein by
reference. No other parts of the Annual Report are incorporated herein by
reference. The financial statements in such Annual Report have been
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.

-79-

<PAGE>

APPENDIX A

COMMERCIAL PAPER RATINGS

A Standard & Poor's commercial paper rating is a current opinion of the
creditworthiness of an obligor with respect to financial obligations having
an original maturity of no more than 365 days. The following summarizes the
rating categories used by Standard and Poor's for commercial paper:

"A-1" - Obligations are rated in the highest category indicating that
the obligor's capacity to meet its financial commitment on the obligation is
strong. Within this category, certain obligations are designated with a plus
sign (+). This indicates that the obligor's capacity to meet its financial
commitment on these obligations is extremely strong.

"A-2" - Obligations are somewhat more susceptible to the adverse effects
of changes in circumstances and economic conditions than obligations in
higher rating categories. However, the obligor's capacity to meet its
financial commitment on the obligation is satisfactory.

"A-3" - Obligations exhibit adequate protection parameters. However,
adverse economic conditions or changing circumstances are more likely to lead
to a weakened capacity of the obligor to meet its financial commitment on the
obligation.

"B" - Obligations are regarded as having significant speculative
characteristics. The obligor currently has the capacity to meet its financial
commitment on the obligation; however, it faces major ongoing uncertainties
which could lead to the obligor's inadequate capacity to meet its financial
commitment on the obligation.

"C" - Obligations are currently vulnerable to nonpayment and are
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation.

"D" - Obligations are in payment default. The "D" rating category is
used when payments on an obligation are not made on the date due even if the
applicable grace period has not expired, unless Standard & Poor's believes
that such payments will be made during such grace period. The "D" rating will
be used upon the filing of a bankruptcy petition or the taking of a similar
action if payments on an obligation are jeopardized.

Moody's commercial paper ratings are opinions of the ability of issuers
to repay punctually senior debt obligations not having an original maturity
in excess of one year, unless explicitly noted. The following summarizes the
rating categories used by Moody's for commercial paper:

"Prime-1" - Issuers (or supporting institutions) have a superior ability
for repayment of senior short-term debt obligations. Prime-1 repayment
ability will often be

A-1

<PAGE>

evidenced by many of the following characteristics: leading market positions
in well-established industries; high rates of return on funds employed;
conservative capitalization structure with moderate reliance on debt and
ample asset protection; broad margins in earnings coverage of fixed financial
charges and high internal cash generation; and well-established access to a
range of financial markets and assured sources of alternate liquidity.

"Prime-2" - Issuers (or supporting institutions) have a strong ability
for repayment of senior short-term debt obligations. This will normally be
evidenced by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, may be more subject to
variation. Capitalization characteristics, while still appropriate, may be
more affected by external conditions. Ample alternate liquidity is maintained.

"Prime-3" - Issuers (or supporting institutions) have an acceptable
ability for repayment of senior short-term debt obligations. The effect of
industry characteristics and market compositions may be more pronounced.
Variability in earnings and profitability may result in changes in the level
of debt protection measurements and may require relatively high financial
leverage. Adequate alternate liquidity is maintained.

"Not Prime" - Issuers do not fall within any of the Prime rating
categories.

A-2

<PAGE>

Fitch short-term ratings apply to debt obligations that have time
horizons of less than 12 months for most obligations, or up to three years
for U.S. public finance securities. The following summarizes the rating
categories used by Fitch for short-term obligations:

"F1" - Securities possess the highest credit quality. This designation
indicates the best capacity for timely payment of financial commitments and
may have an added "+" to denote any exceptionally strong credit feature.

"F2" - Securities possess good credit quality. This designation
indicates a satisfactory capacity for timely payment of financial
commitments, but the margin of safety is not as great as in the case of the
higher ratings.

"F3" - Securities possess fair credit quality. This designation
indicates that the capacity for timely payment of financial commitments is
adequate; however, near-term adverse changes could result in a reduction to
non-investment grade.

"B" - Securities possess speculative credit quality. This designation
indicates minimal capacity for timely payment of financial commitments, plus
vulnerability to near-term adverse changes in financial and economic
conditions.

"C" - Securities possess high default risk. This designation indicates
that default is a real possibility and that the capacity for meeting
financial commitments is solely reliant upon a sustained, favorable business
and economic environment.

"D" - Securities are in actual or imminent payment default.

Thomson Financial BankWatch short-term ratings assess the likelihood of
an untimely payment of principal and interest of debt instruments with
original maturities of one year or less. The following summarizes the ratings
used by Thomson Financial BankWatch:

"TBW-1" - This designation represents Thomson Financial BankWatch's
highest category and indicates a very high likelihood that principal and
interest will be paid on a timely basis.

"TBW-2" - This designation represents Thomson Financial BankWatch's
second-highest category and indicates that while the degree of safety
regarding timely repayment of

A-3

<PAGE>

principal and interest is strong, the relative degree of safety is not as
high as for issues rated "TBW-1."

"TBW-3" - This designation represents Thomson Financial BankWatch's
lowest investment-grade category and indicates that while the obligation is
more susceptible to adverse developments (both internal and external) than
those with higher ratings, the capacity to service principal and interest in
a timely fashion is considered adequate.

"TBW-4" - This designation represents Thomson Financial BankWatch's
lowest rating category and indicates that the obligation is regarded as
non-investment grade and therefore speculative.

CORPORATE AND MUNICIPAL LONG-TERM DEBT RATINGS

The following summarizes the ratings used by Standard & Poor's for
corporate and municipal debt:

"AAA" - An obligation rated "AAA" has the highest rating assigned by
Standard & Poor's. The obligor's capacity to meet its financial commitment on
the obligation is extremely strong.

"AA" - An obligation rated "AA" differs from the highest rated
obligations only in small degree. The obligor's capacity to meet its
financial commitment on the obligation is very strong.

"A" - An obligation rated "A" is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than
obligations in higher-rated categories. However, the obligor's capacity to
meet its financial commitment on the obligation is still strong.

"BBB" - An obligation rated "BBB" exhibits adequate protection
parameters. However, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity of the obligor to meet its
financial commitment on the obligation.

Obligations rated "BB," "B," "CCC," "CC" and "C" are regarded as having
significant speculative characteristics. "BB" indicates the least degree of
speculation and "C" the highest. While such obligations will likely have some
quality and protective characteristics, these may be outweighed by large
uncertainties or major exposures to adverse conditions.

"BB" - An obligation rated "BB" is less vulnerable to nonpayment than
other speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial or economic conditions which could
lead to the obligor's inadequate capacity to meet its financial commitment on
the obligation.

A-4

<PAGE>

"B" - An obligation rated "B" is more vulnerable to nonpayment than
obligations rated "BB", but the obligor currently has the capacity to meet
its financial commitment on the obligation. Adverse business, financial or
economic conditions will likely impair the obligor's capacity or willingness
to meet its financial commitment on the obligation.

"CCC" - An obligation rated "CCC" is currently vulnerable to nonpayment,
and is dependent upon favorable business, financial and economic conditions
for the obligor to meet its financial commitment on the obligation. In the
event of adverse business, financial, or economic conditions, the obligor is
not likely to have the capacity to meet its financial commitment on the
obligation.

"CC" - An obligation rated "CC" is currently highly vulnerable to
nonpayment.

"C" - The "C" rating may be used to cover a situation where a bankruptcy
petition has been filed or similar action taken, but payments on this
obligation are being continued.

"D" - An obligation rated "D" is in payment default. The "D" rating
category is used when payments on an obligation are not made on the date due
even if the applicable grace period has not expired, unless Standard & Poor's
believes that such payments will be made during such grace period. The "D"
rating also will be used upon the filing of a bankruptcy petition or the
taking of a similar action if payments on an obligation are jeopardized.

PLUS (+) OR MINUS (-) - The ratings from "AA" through "CCC" may be
modified by the addition of a plus or minus sign to show relative standing
within the major rating categories.

"r" - The "r" highlights obligations that Standard & Poor's believes
have significant noncredit risks. Examples of such obligations are
securities with principal or interest return indexed to equities, commodities,
or currencies; certain swaps and options; and interest-only and principal-only
mortgage securities. The absence of an "r" symbol should not be taken as an
indication that an obligation will exhibit no volatility or variability in
total return.

N.R. - Indicates that no rating has been requested, that there is
insufficient information on which to base a rating, or that Standard & Poor's
does not rate a particular obligation as a matter of policy.

The following summarizes the ratings used by Moody's for corporate and
municipal long-term debt:

"Aaa" - Bonds are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt
edged." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.

"Aa" - Bonds are judged to be of high quality by all standards. Together
with the "Aaa" group they comprise what are generally known as high-grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in "Aaa" securities or

A-5

<PAGE>

fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risk appear somewhat
larger than the "Aaa" securities.

"A" - Bonds possess many favorable investment attributes and are to be
considered as upper-medium-grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.

"Baa"- Bonds are considered as medium-grade obligations, (i.e., they are
neither highly protected nor poorly secured). Interest payments and principal
security appear adequate for the present but certain protective elements may
be characteristically unreliable over any great length of time. Such bonds
lack outstanding investment characteristics and in fact have speculative
characteristicts as well.

"Ba" - Bonds are judged to have speculative elements; their future cannot
be considered as well-assured. Often the protection of interest and principal
payments may be moderate, and thereby not well safeguarded during both good
and bad times over the future. Uncertainty of position characterizes bonds in
this class.

"B" - Bonds generally lack characteristics of the desirable investment.
Assurance of interest and principal payments or of maintenance of other terms
of the contract over any long period of time may be small.

"Caa" - Bonds are of poor standing. Such issues may be in default or
there may be present elements of danger with respect to principal or interest.

"Ca" - Bonds represent obligations which are speculative in a high
degree. Such issues are often in default or have other marked shortcomings.

"C" - Bonds are the lowest rated class of bonds, and issues so rated can
be regarded as having extremely poor prospects of ever attaining any real
investment standing.

Con. (---) - Bonds for which the security depends upon the completion of
some act or the fulfillment of some condition are rated conditionally. These
are bonds secured by (a) earnings of projects under construction, (b)
earnings of projects unseasoned in operating experience, (c) rentals which
begin when facilities are completed, or (d) payments to which some other
limiting condition attaches. Parenthetical rating denotes probable credit
stature upon completion of construction or elimination of basis of condition.

Note: Moody's applies numerical modifiers 1, 2, and 3 in each generic
rating classification from "Aa" through "Caa." The modifier 1 indicates that
the obligation ranks in the higher end of its generic rating category; the
modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a
ranking in the lower end of its generic rating category.

A-6

<PAGE>

The following summarizes the ratings used by Fitch for corporate
and municipal bonds:

"AAA" - Bonds considered to be investment grade and of the highest
credit quality. These ratings denote the lowest expectation of credit risk
and are assigned only in case of exceptionally strong capacity for timely
payment of financial commitments. This capacity is highly unlikely to be
adversely affected by foreseeable events.

"AA" - Bonds considered to be investment grade and of very high credit
quality. These ratings denote a very low expectation of credit risk and
indicate very strong capacity for timely payment of financial commitments.
This capacity is not significantly vulnerable to foreseeable events.

"A" - Bonds considered to be investment grade and of high credit
quality. These ratings denote a low expectation of credit risk and indicate
strong capacity for timely payment of financial commitments. This capacity
may, nevertheless, be more vulnerable to changes in circumstances or in
economic conditions than is the case for higher ratings.

"BBB" - Bonds considered to be investment grade and of good credit
quality. These ratings denote that there is currently a low expectation of
credit risk. The capacity for timely payment of financial commitments is
considered adequate, but adverse changes in circumstances and in economic
conditions are more likely to impair this capacity. This is the lowest
investment grade category.

"BB" - Bonds considered to be speculative. These ratings indicate that
there is a possibility of credit risk developing, particularly as the result
of adverse economic change over time; however, business or financial
alternatives may be available to allow financial commitments to be met.
Securities rated in this category are not investment grade.

A-7

<PAGE>

"B" - Bonds are considered highly speculative. These ratings indicate
that significant credit risk is present, but a limited margin of safety
remains. Financial commitments are currently being met; however, capacity for
continued payment is contingent upon a sustained, favorable business and
economic environment.

"CCC", "CC" and "C" - Bonds have high default risk. Default is a real
possibility, and capacity for meeting financial commitments is solely reliant
upon sustained, favorable business or economic developments. "CC" ratings
indicate that default of some kind appears probable, and "C" ratings signal
imminent default.

"DDD," "DD" and "D" - Bonds are in default. The ratings of obligations
in this category are based on their prospects for achieving partial or full
recovery in a reorganization or liquidation of the obligor. While expected
recovery values are highly speculative and cannot be estimated with any
precision, the following serve as general guidelines. "DDD" obligations have
the highest potential for recovery, around 90%-100% of outstanding amounts
and accrued interest. "DD" indicates potential recoveries in the range of
50%-90%, and "D" the lowest recovery potential, i.e., below 50%.

Entities rated in this category have defaulted on some or all of their
obligations. Entities rated "DDD" have the highest prospect for resumption of
performance or continued operation with or without a formal reorganization
process. Entities rated "DD" and "D" are generally undergoing a formal
reorganization or liquidation process; those rated "DD" are likely to satisfy
a higher portion of their outstanding obligations, while entities rated "D"
have a poor prospect for repaying all obligations.

To provide more detailed indications of credit quality, the Fitch
ratings from and including "AA" to "CCC" may be modified by the addition of a
plus (+) or minus (-) sign to denote relative standing within these major
rating categories.

"NR" indicates the Fitch does not rate the issuer or issue in question.

"Withdrawn": A rating is withdrawn when Fitch deems the ammount of
information available to be inadequate for rating purposes, or when an
obligation matures, is called, or refinanced.

RatingWatch: Ratings are placed on RatingWatch to notify investors
that there is reasonable probability of a rating change and the likely
direction of such change. These are designated as "Positive," indicating a
potential upgrade, "Negative," for a potential downgrade, or "Evolving," if
ratings may be raised, lowered or maintained. RatingWatch is typically
resolved over a relatively short period.

Thomson Financial BankWatch assesses the likelihood of an untimely
repayment of principal or interest over the term to maturity of long term
debt and preferred stock which are issued by United States commercial banks,
thrifts and non-bank banks; non-United States banks; and broker-dealers. The
following summarizes the rating categories used by Thomson BankWatch for
long-term debt ratings:

"AAA" - This designation indicates that the ability to repay principal
and interest on a timely basis is extremely high.

"AA" - This designation indicates a very strong ability to repay
principal and interest on a timely basis, with limited incremental risk
compared to issues rated in the highest category.

"A" - This designation indicates that the ability to repay principal and
interest is strong. Issues rated "A" could be more vulnerable to adverse
developments (both internal and external) than obligations with higher
ratings.

A-8

<PAGE>

"BBB" - This designation represents the lowest investment-grade category
and indicates an acceptable capacity to repay principal and interest. Issues
rated "BBB" are more vulnerable to adverse developments (both internal and
external) than obligations with higher ratings.

"BB"- A rating of BB suggests that the likelihood of default is
considerably less than for lower-rated issues, although there are significant
uncertainties that could affect the ability to adequately service debt
obligations.

"B" - Issues rated B show a higher degree of uncertainty and therefore
greater likelihood of default than higher-rated issues. Adverse developments
could negatively affect the payment of interest and principal on a timely
basis.

"CCC" - Issues rated CCC clearly have a high likelihood of default, with
little capacity to address further adverse changes in financial
circumstances.

"CC" - This rating is applied to issues that are subordinate to other
obligations rated CCC and are afforded less protection in the event of
bankruptcy or reorganization.

"D" - This designation indicates that the long-term debt is in default.

PLUS (+) OR MINUS (-) - The ratings from "AAA" through "CC" may include
a plus or minus sign designation which indicates where within the respective
category the issue is placed.

MUNICIPAL NOTE RATINGS

A Standard and Poor's note rating reflects the liquidity factors and
market access risks unique to notes due in three years or less. The following
summarizes the ratings used by Standard & Poor's for municipal notes:

"SP-1" - The issuers of these municipal notes exhibit a strong capacity
to pay principal and interest. Those issues determined to possess a very
strong capacity to pay debt service are given a plus (+) designation.

"SP-2" - The issuers of these municipal notes exhibit satisfactory
capacity to pay principal and interest, with some vulnerability to adverse
financial and economic changes over the term of the notes.

"SP-3" - The issuers of these municipal notes exhibit speculative
capacity to pay principal and interest.

Moody's ratings for state and municipal notes and other short-term loans
are designated Moody's Investment Grade ("MIG") and variable rate demand
obligations are designated Variable Moody's Investment Grade ("VMIG"). Such
ratings recognize the differences between short-term credit risk and
long-term risk. The following summarizes the ratings by Moody's Investors
Service, Inc. for short-term notes:

A-9

<PAGE>

"MIG-1"/"VMIG-1" - This designation denotes superior credit quality.
Excellent protection afforded by established cash flows, highly reliable
liquidity support or demonstrated broad-based access to the market for
refinancing.

"MIG-2"/"VMIG-2" - This designation denotes strong credit quality.
Margins of protection are ample although not so large as in the preceding
group.

"MIG-3"/"VMIG-3" - This designation denotes acceptable credit quality.
Liquidity and cash flow protection may be narrow and market access for
refinancing is likely to be less well established.

"SG" - This designation denotes speculative quality. Debt instruments in
this category lack sufficient margins of protection.

Fitch uses the short-term ratings described under
Commercial Paper Ratings for municipal notes.

A-10

<PAGE>

THE GALAXY FUND

FORM N-1A

PART C. OTHER INFORMATION

Item 23. Exhibits

(a) (1) Declaration of Trust dated March 31, 1986.(4)

(2) Amendment No. 1 to the Declaration of Trust dated as of
April 26, 1988.(4)

(3) Certificate pertaining to Classification of Shares
pertaining to Class A and Class B shares.(4)

(4) Certificate of Classification of Shares pertaining to Class
C, Class D and Class E shares.(4)

(5) Certificate of Classification of Shares pertaining to Class
C - Special Series 1 and Class D - Special Series 1
shares.(4)

(6) Certificate of Classification of Shares pertaining to Class
F shares; Class G - Series 1 shares; Class G - Series 2
shares; Class H - Series 1 shares; Class H - Series 2
shares; Class I - Series 1 shares; Class I - Series 2
shares; Class J - Series 1 shares; and Class J - Series 2
shares.(4)

(7) Certificate of Classification of Shares pertaining to Class
K - Series 1 shares; Class K - Series 2 shares; Class L -
Series 1 shares; Class L - Series 2 shares; Class M Series 1
shares; Class M - Series 2 shares; Class N - Series 1
shares; Class N Series 2 shares; Class O - Series 1 shares;
and Class O - Series 2 shares.(4)

(8) Certificate of Classification of Shares pertaining to Class
P - Series 1 shares; Class P - Series 2 shares; Class Q -
Series 1 shares; Class Q - Series 2 shares; Class R Series 1
shares; Class R - Series 2 shares; and Class S shares.(4)

(9) Certificate of Classification of Shares pertaining to Class
T - Series 1 shares and Class T - Series 2 shares.(4)

(10) Certificate of Classification of Shares pertaining to Class
U - Series 1 shares and Class U - Series 2 shares; Class V
shares; Class

<PAGE>

W shares; and Class X - Series 1 shares and Class X - Series
2 shares.(8)

(11) Certificate of Classification of Shares pertaining to Class
C - Special Series 2 shares; Class H - Series 3 shares;
Class J - Series 3 shares; Class K - Series 3 shares; Class
L - Series 3 shares; Class M - Series 3 shares; Class N -
Series 3 shares; and Class U - Series 3 shares.(8)

(l2) Certificate of Classification of Shares pertaining to Class
A - Special Series 2 shares.(8)

(13) Certificate of Classification of Shares pertaining to Class
Y - Series 1 shares and Class Y - Series 2 shares; Class Z -
Series 1 shares, Class Z - Series 2 shares and Class Z -
Series 3 shares; and Class AA - Series 1 shares, Class AA -
Series 2 shares and Class AA - Series 3 shares.(8)

(14) Certificate of Classification of Shares pertaining to Class
BB, Class CC and Class DD shares.(8)

(15) Certificate of Classification of Shares pertaining to Class
D - Special Series 2 shares; Class G - Series 3 shares;
Class I - Series 3 shares; and Class X - Series 3 shares.(8)

(16) Certificate of Classification of Shares pertaining to Class
C - Special Series 3 shares; Class C - Special Series 4
shares; Class D - Special Series 3 shares; Class D - Special
Series 4 shares; Class G - Series 4 shares; Class G Series 5
shares; Class H - Series 4 shares; Class H - Series 5
shares; Class I - Series 4 shares; Class I - Series 5
shares; Class J - Series 4 shares; Class J - Series 5
shares; Class K - Series 4 shares; Class K - Series 5
shares; Class L - Series 4 shares; Class L - Series 5
shares; Class M - Series 4 shares; Class M - Series 5
shares; Class N - Series 4 shares; Class N - Series 5
shares; Class U - Series 4 shares; Class U - Series 5
shares; Class X - Series 4 shares; Class X - Series 5
shares; Class AA - Series 4 shares; and Class AA - Series 5
shares.(8)

(17) Certificate of Classification of Shares pertaining to Class
EE - Series shares and Class EE - Series 2 shares; Class V -
Special Series 1 shares; and Class W - Special Series 1
shares.(11)

(18) Certificate of Classification of Shares pertaining to Class
A - Special Series 3 shares; Class F - Special Series 2
shares; Class E - Special Series 2 shares; Class L - Series
6 shares; Class D - Special Series 5 shares; Class J -
Series 6 shares; Class R - Series 3 shares;

-2-
<PAGE>

Class N - Series 6 shares; Class U - Series 6 shares; Class
H Series 6 shares; and Class G - Series 6 shares.(12)

(19) Certificate of Classification of Shares pertaining to Class
FF shares; Class GG shares; Class HH - Series 1 shares and
Class HH - Series 2 shares; Class II shares; Class JJ -
Series 1 shares, Class JJ - Series 2 shares and Class JJ -
Series 3 shares; Class KK - Series 1 shares, Class KK -
Series 2 shares and Class KK - Series 3 shares; Class LL -
Series 1 shares, Class LL - Series 2 shares and Class LL -
Series 3 shares; and Class MM - Series 1 shares, Class MM -
Series 2 shares and Class MM - Series 3 shares.(14)

(20) Certificate of Classification of Shares pertaining to Class
MM - Series 4 shares.(16)

(21) Certificate of Classification of Shares pertaining to Class
NN-Series 1 shares; Class NN-Series 2 shares; and Class
NN-Series 3 shares.(16)

(22) Certificate of Classification of Shares pertaining to Class
NN-Series 4 Shares and Class NN-Series 5 shares.(17)

(23) Certificate of Classification of Shares pertaining to Class
OO - Series 1 shares, Class OO - Series 2 shares, Class OO -
Series 3 shares, Class OO - Series 4 shares and Class OO -
Series 5 shares; Class PP - Series 1 shares, Class PP -
Series 2 shares, Class PP - Series 3 shares, Class PP -
Series 4 shares and Class PP - Series 5 shares; Class QQ -
Series 1 shares, Class QQ - Series 2 shares, Class QQ -
Series 3 shares, Class QQ - Series 4 shares and Class QQ -
Series 5 shares; Class P- Series 3 shares; Class KK - Series
4 shares; Class Q - Series 3 shares; Class LL - Series 4
shares; Class O - Series 3 shares; Class R - Series 4
shares; and Class JJ - Series 4 shares.(19)

(b) Code of Regulations.(4)

(c) Article V, Section 5.1, and Article VIII, Section 8.1, of
Registrant's Declaration of Trust incorporated herein by
reference as Exhibit (a)(1), and Amendment No. 1 to
Registrant's Declaration of Trust incorporated herein by
reference as Exhibit (a)(2).

(d) (1) Advisory Agreement between the Registrant and Fleet
Investment Advisors Inc. with respect to the Money Market,
Government, U.S. Treasury, Tax-Exempt, Institutional
Government Money Market (formerly Institutional Treasury
Money Market), Short-Term Bond, Intermediate Government
Income (formerly Intermediate

-3-
<PAGE>

Bond), Corporate Bond, High Quality Bond, Tax-Exempt Bond,
New York Municipal Bond, Connecticut Municipal Bond,
Massachusetts Municipal Bond, Rhode Island Municipal Bond,
Equity Value, Equity Growth, Equity Income, International
Equity, Small Company Equity and Asset Allocation Funds
dated as of May 19, 1994.(2)

(2) Addendum No. 1 to Advisory Agreement between the Registrant
and Fleet Investment Advisors Inc. with respect to the
Connecticut Municipal Money Market, Massachusetts Municipal
Money Market, Growth and Income and Small Cap Value Funds
dated as of December 1, 1995.(1)

(3) Addendum No. 2 to Advisory Agreement between the Registrant
and Fleet Investment Advisors Inc. with respect to the New
Jersey Municipal Bond Fund, MidCap Equity Fund and Strategic
Equity Fund dated as of March 3, 1998.(5)

(4) Addendum No. 3 to Advisory Agreement between the Registrant
and Fleet Investment Advisors Inc. with respect to the Prime
Reserves, Government Reserves and Tax-Exempt Reserves dated
as of September 18, 1998.(8)

(5) Addendum No. 4 to Advisory Agreement between the Registrant
and Fleet Investment Advisors Inc. with respect to the
Institutional Money Market Fund, Institutional Treasury
Money Market Fund, Florida Municipal Bond Fund, Intermediate
Tax-Exempt Bond Fund, Connecticut Intermediate Municipal
Bond Fund, Massachusetts Intermediate Municipal Bond Fund
and Growth Fund II dated as of June 23, 2000.(19)

(6) Addendum No. 5 to Advisory Agreement between the Registrant
and Fleet Investment Advisors Inc. with respect to the Pan
Asia Fund dated as of September 5, 2000.(19)

(7) Form of Addendum No. 6 to Advisory Agreement between the
Registrant and Fleet Investment Advisors Inc. with respect
to the New York Municipal Money Market Fund .(11)

(8) Sub-Advisory Agreement between Fleet Investment Advisors
Inc. and Oechsle International Advisors, LLC with respect to
the International Equity Fund dated as of October 8,
1998.(8)

(9) Sub-Advisory Agreement between Fleet Investment Advisors
Inc. and UOB Global Capital LLC with respect to the Pan Asia
Fund dated as of September 5, 2000.(20)

-4-
<PAGE>

(e) (1) Distribution Agreement between the Registrant and
Provident Distributors, Inc. dated as of December 1,
1999.(12)

(2) Amendment No. 1 dated as of June 23, 2000 to Distribution
Agreement between the Registrant and Provident Distributors,
Inc. with respect to the Institutional Money Market Fund,
Institutional Treasury Money Market Fund, Florida Municipal
Bond Fund, Intermediate Tax-Exempt Bond Fund, Connecticut
Intermediate Municipal Bond Fund, Massachusetts Intermediate
Municipal Bond Fund and Growth Fund II.(19)

(3) Amendment No. 2 dated as of September 5, 2000 to
Distribution Agreement between the Registrant and Provident
Distributors, Inc. with respect to the Pan Asia Fund.(19)

(4) Form of Amendment No. 3 to Distribution Agreement between
the Registrant and Provident Distributors, Inc. with respect
to the New York Municipal Money Market Fund.(11)

(f) The Galaxy Fund/The Galaxy VIP Fund/Galaxy Fund II Deferred
Compensation Plan and Related Agreement effective as of
January 1, 1997.(2)

(g) (1) Global Custody Agreement between the Registrant and The
Chase Manhattan Bank dated as of November 1, 1991.(4)

(2) Amendment dated December 2, 1998 to Global Custody Agreement
between the Registrant and The Chase Manhattan Bank.(9)

(3) Form of Amendment to Global Custody Agreement between the
Registrant and The Chase Manhattan Bank with respect to the
New Jersey Municipal Bond, MidCap Equity and Strategic
Equity Funds.(3)

(4) Form of Amendment to Global Custody Agreement between the
Registrant and The Chase Manhattan Bank with respect to the
Prime Reserves, Government Reserves and Tax-Exempt
Reserves.(5)

(5) Form of Amendment to Global Custody Agreement between the
Registrant and The Chase Manhattan Bank with respect to the
New York Municipal Money Market Fund.(11)

-5-
<PAGE>

(6) Amendment dated as of June 23, 2000 to Global Custody
Agreement between the Registrant and The Chase Manhattan
Bank with respect to the Institutional Money Market Fund,
Institutional Treasury Money Market Fund, Florida Municipal
Bond Fund, Intermediate Tax-Exempt Bond Fund, Connecticut
Intermediate Municipal Bond Fund, Massachusetts Intermediate
Municipal Bond Fund and Growth Fund II.(19)

(7) Amendment dated as of September 5, 2000 to Global Custody
Agreement between the Registrant and The Chase Manhattan
Bank with respect to the Pan Asia Fund.(19)

(8) Amendment dated as of September 7, 2000 to Global Custody
Agreement between the Registrant and The Chase Manhattan
Bank.(19)

(9) Consent to Assignment of Global Custody Agreement between
the Registrant, The Chase Manhattan Bank, N.A. and 440
Financial Group of Worcester, Inc. to The Shareholder
Services Group, Inc. d/b/a 440 Financial dated March 31,
1995.(11)

(h) (1) Administration Agreement between the Registrant and PFPC
Inc. (formerly known as First Data Investor Services Group,
Inc.) dated as of June 1, 1997.(3)

(2) Amendment No. 1 dated March 3, 1998 to Administration
Agreement between the Registrant and PFPC Inc. (formerly
known as First Data Investor Services Group, Inc.) with
respect to the New Jersey Municipal Bond Fund, MidCap Equity
Fund and Strategic Equity Fund.(5)

(3) Amendment No. 2 dated as of March 5, 1998 to Administration
Agreement between the Registrant and PFPC Inc. (formerly
known as First Data Investor Services Group, Inc.).(6)

(4) Amendment No. 3 dated as of September 18, 1998 to
Administration Agreement between the Registrant and PFPC
Inc. (formerly known as First Data Investor Services Group,
Inc.) with respect to the Prime Reserves, Government
Reserves and Tax-Exempt Reserves Fund.(8)

(5) Amendment No. 4 dated as of September 10, 1998 to
Administration Agreement between the Registrant and PFPC
Inc. (formerly known as First Data Investor Services Group,
Inc.).(9)

-6-
<PAGE>

(6) Amendment No. 5 dated as of December 1, 1999 to
Administration Agreement between Registrant and PFPC Inc.
(formerly known as First Data Investor Services Group,
Inc.).(12)

(7) Amendment No. 6 dated as of June 23, 2000 to Administration
Agreement between Registrant and PFPC Inc. (formerly known
as First Data Investor Services Group, Inc.) with respect to
the Institutional Money Market Fund, Institutional Treasury
Money Market Fund, Florida Municipal Bond Fund, Intermediate
Tax-Exempt Bond Fund, Connecticut Intermediate Municipal
Bond Fund, Massachusetts Intermediate Municipal Bond Fund
and Growth Fund II.(19)

(8) Amendment No. 7 dated as of June 26, 2000 to Administration
Agreement between Registrant and PFPC Inc. (formerly known
as First Data Investor Services Group, Inc.).(19)

(9) Amendment No. 8 dated as of September 5, 2000 to
Administration Agreement between Registrant and PFPC Inc.
(formerly known as First Data Investor Services Group, Inc.)
with respect to the Pan Asia Fund.(20)

(10) Form of Amendment No. 9 to Administration Agreement between
Registrant and PFPC Inc. (formerly known as First Data
Investor Services Group, Inc.) with respect to the New York
Municipal Money Market Fund.(11)

(11) Transfer Agency and Services Agreement between the
Registrant and PFPC Inc. (formerly known as First Data
Investor Services Group, Inc.) dated as of June 1, 1997.(3)

(12) Amendment No. 1 dated March 3, 1998 to Transfer Agency and
Services Agreement between the Registrant and PFPC Inc.
(formerly known as First Data Investor Services Group, Inc.)
with respect to the New Jersey Municipal Bond Fund, MidCap
Equity Fund and Strategic Equity Fund.(5)

(13) Amendment No. 2 dated as of March 5, 1998 to Transfer Agency
and Services Agreement between the Registrant and PFPC Inc.
(formerly known as First Data Investor Services Group,
Inc.).(6)

(14) Amendment No. 3 dated as of September 18, 1998 to Transfer
Agency and Services Agreement between the Registrant and
PFPC Inc. (formerly known as First Data Investor Services
Group, Inc.) with respect to the Prime Reserves, Government
Reserves and Tax-Exempt Reserves Fund.(8)

-7-
<PAGE>

(15) Amendment No. 4 dated as of September 10, 1998 to Transfer
Agency and Services Agreement between Registrant and PFPC
Inc. (formerly known as First Data Investor Services Group,
Inc.).(9)

(16) Amendment No. 5 dated as of September 9, 1999 to Transfer
Agency and Services Agreement between Registrant and PFPC
Inc. (formerly known as First Data Investor Services Group,
Inc.).(12)

(17) Amendment No. 6 dated as of December 2, 1999 to Transfer
Agency and Services Agreement between Registrant and PFPC
Inc. (formerly known as First Data Investor Services Group,
Inc.).(12)

(18) Amendment No. 7 dated as of June 23, 2000 to Transfer Agency
and Services Agreement between Registrant and PFPC Inc.
(formerly known as First Data Investor Services Group, Inc).
with respect to the Institutional Money Market Fund,
Institutional Treasury Money Market Fund, Florida Municipal
Bond Fund, Intermediate Tax-Exempt Bond Fund, Connecticut
Intermediate Municipal Bond Fund, Massachusetts Intermediate
Municipal Bond Fund and Growth Fund II.(19)

(19) Amendment No. 8 dated as of June 26, 2000 to Transfer Agency
and Services Agreement between Registrant and PFPC Inc.
(formerly known as First Data Investor Services Group,
Inc.).(19)

(20) Amendment No. 9 dated as of September 5, 2000 to Transfer
Agency and Services Agreement between Registrant and PFPC
Inc. (formerly known as First Data Investor Services Group,
Inc.) with respect to the Pan Asia Fund.(20)

(21) Form of Amendment No 10 to Transfer Agency and Services
Agreement between Registrant and PFPC Inc. (formerly known
as First Data Investor Services Group, Inc.) with respect to
the New York Municipal Money Market Fund.(11)

(22) Shareholder Services Plan for Trust Shares and Retail A
Shares and Related Forms of Servicing Agreements.(14)

(23) Shareholder Services Plan for BKB Shares and Related Forms
of Servicing Agreements.(14)

(24) Credit Agreement dated as of December 29, 1999 among the
Registrant, The Galaxy VIP Fund, Galaxy Fund II, Various
Banks,

-8-
<PAGE>

Deutsche Bank Securities Inc. and Deutsche Bank AG, New York
Branch.(14)

(25) Agreement and Plan of Reorganization between The Galaxy Fund
and Boston 1784 Funds.(17)

(i) (1) Opinion and consent of counsel dated September 28, 1999.(10)

(2) Opinion and consent of counsel dated December 3, 1999.(11)

(3) Opinion and consent of counsel dated February 28, 2000.(15)

(4) Opinion and consent of counsel dated May 30, 2000.(17)

(5) Opinion and consent of counsel dated May 31, 2000.(18)

(j) (1) Consent of Drinker Biddle & Reath LLP.(20)

(2) Consent of Ernst & Young LLP.(20)

(k) None.

(l) (1) Purchase Agreement between the Registrant and Shearson
Lehman Brothers Inc. dated July 24, 1986.(4)

(2) Purchase Agreement between the Registrant and Shearson
Lehman Brothers Inc. dated October 11, 1990 with respect to
the Treasury, Equity Growth, Equity Income, International
Equity and High Quality Bond Funds.(4)

(3) Purchase Agreement between the Registrant and SMA Equities,
Inc. dated December 30, 1991 with respect to the Small
Company Equity Fund, Short-Term Bond Fund, Tax-Exempt Bond
Fund, Asset Allocation Fund, and New York Municipal Bond
Fund.(4)

(4) Purchase Agreement between the Registrant and Allmerica
Investments, Inc. dated February 22, 1993 with respect to
the Connecticut Municipal Bond, Massachusetts Municipal
Bond, Rhode Island Municipal Bond and Institutional
Government Money Market (formerly Institutional Treasury
Money Market) Funds.(4)

-9-
<PAGE>

(5) Purchase Agreement between the Registrant and 440 Financial
Distributors, Inc. dated May 19, 1994 with respect to the
Corporate Bond Fund.(4)

(6) Purchase Agreement between the Registrant and First Data
Distributors, Inc. dated February 28, 1996 with respect to
the Connecticut Municipal Money Market, Massachusetts
Municipal Money Market Money, Growth and Income and Small
Cap Value Funds.(4)

(7) Purchase Agreement between the Registrant and First Data
Distributors, Inc. dated March 9, 1998 with respect to the
New Jersey Municipal Bond Fund.(5)

(8) Form of Purchase Agreement between the Registrant and First
Data Distributors, Inc. with respect to the MidCap Equity
Fund.(3)

(9) Purchase Agreement between the Registrant and First Data
Distributors, Inc. dated March 3, 1998 with respect to the
Strategic Equity Fund.(5)

(10) Purchase Agreement between the Registrant and First Data
Distributors, Inc. dated September 18, 1998 with respect to
the Prime Reserves, Government Reserves and Tax-Exempt
Reserves.(9)

(11) Form of Purchase Agreement between the Registrant and
Provident Distributors, Inc. with respect to the New York
Municipal Money Market Fund.(14)

(12) Purchase Agreement between the Registrant and Provident
Distributors, Inc. dated June 23, 2000 with respect to the
Institutional Money Market Fund, Institutional Treasury
Money Market Fund, Florida Municipal Bond Fund, Intermediate
Tax-Exempt Bond Fund, Connecticut Intermediate Municipal
Bond Fund, Massachusetts Intermediate Municipal Bond Fund
and Growth Fund II.(19)

(13) Purchase Agreement between the Registrant and Provident
Distributors, Inc. dated September 5, 2000 with respect to
the Pan Asia Fund.(19)

(m) (1) Distribution and Services Plan for Retail B Shares and
Related Form of Servicing Agreement.(16)

-10-
<PAGE>

(2) Distribution and Services Plan and Related Form of Servicing
Agreement with respect to the Prime Reserves, Government
Reserves and Tax-Exempt Reserves.(5)

(3) Distribution Plan for Prime A Shares.(6)

(4) Distribution and Services Plan for Prime B Shares and
Related Form of Servicing Agreement.(6)

(5) Distribution and Services Plan and Related Form of Servicing
Agreement with respect to Prime Shares of the New York
Municipal Money Market Fund, Connecticut Municipal Money
Market Fund and Massachusetts Municipal Money Market
Fund.(11)

(6) Distribution Plan with respect to Retail A Shares of the Pan
Asia Fund.(16)

(n) None.

(o) Amended and Restated Plan Pursuant to Rule 18f-3 for
Operation of a Multi-Class System.(19)

(p) (1) Code of Ethics - Registrant.17

(2) Code of Ethics - Fleet Investment Advisors, Inc.16

(3) Code of Ethics - Oechsle International Advisors, LLC17

(4) Code of Ethics - UOB Global Capital LLC17

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

(1) Filed electronically as an Exhibit and incorporated herein by reference to
Post-Effective Amendment No. 27 to the Registrant's Registration Statement
on Form N-1A (File Nos. 33-4806 and 811-4636) as filed with the Commission
on March 4, 1996.

(2) Filed electronically as an Exhibit and incorporated herein by reference to
Post-Effective Amendment No. 29 to the Registrant's Registration Statement
on Form N-1A as filed with the Commission on December 30, 1996.

(3) Filed electronically as an Exhibit and incorporated herein by reference to
Post-Effective Amendment No. 31 to the Registrant's Registration Statement
on Form N-1A as filed with the Commission on December 15, 1997.

-11-
<PAGE>

(4) Filed electronically as an Exhibit and incorporated herein by reference to
Post-Effective Amendment No. 32 to the Registrant's Registration Statement
on Form N-1A as filed with the Commission on February 27, 1998.

(5) Filed electronically as an Exhibit and incorporated herein by reference to
Post-Effective Amendment No. 33 to the Registrant's Registration Statement
on Form N-1A as filed with the Commission on June 30, 1998.

(6) Filed electronically as an Exhibit and incorporated herein by reference to
Post-Effective Amendment No. 34 to the Registrant's Registration Statement
on Form N-1A as filed with the Commission on September 11, 1998.

(7) Filed electronically as an Exhibit and incorporated herein by reference to
Post-Effective Amendment No. 35 to the Registrant's Registration Statement
on Form N-1A as filed with the Commission on October 6, 1998.

(8) Filed electronically as an Exhibit and incorporated herein by reference to
Post-Effective Amendment No. 36 to the Registrant's Registration Statement
on Form N-1A as filed with the Commission on December 30, 1998.

(9) Filed electronically as an Exhibit and incorporated herein by reference to
Post-Effective Amendment No. 37 to the Registrant's Registration Statement
on Form N-1A as filed with the Commission on February 26, 1999.

(10) Filed electronically as an Exhibit and incorporated herein by reference to
Post-Effective Amendment No. 38 to the Registrant's Registration Statement
on Form N-1A as filed with the Commission on September 28, 1999.

(11) Filed electronically as an Exhibit and incorporated herein by reference to
Post-Effective Amendment No. 40 to the Registrant's Registration Statement
on Form N-1A as filed with the Commission on December 3, 1999.

(12) Filed electronically as an Exhibit and incorporated herein by reference to
Post-Effective Amendment No. 41 to the Registrant's Registration Statement
on Form N-1A as filed with the Commission on December 29, 1999.

(13) Filed electronically as Appendix II to the Combined Prospectus/Proxy
Statement and incorporated herein by reference to the Registrant's
Registration Statement on Form N-14 as filed with the Commission on
February 7, 2000.

(14) Filed electronically as an Exhibit and incorporated herein by reference to
Post-Effective Amendment No. 43 to the Registrant's Registration Statement
on Form N-1A as filed with the Commission on February 23, 2000.

-12-
<PAGE>

(15) Filed electronically as an Exhibit and incorporated herein by reference to
Post-Effective Amendment No. 44 to the Registrant's Registration Statement
on Form N-1A as filed with the Commission on February 28, 2000.

(16) Filed electronically as an Exhibit and incorporated herein by reference to
Post-Effective Amendment No. 46 to the Registrant's Registration Statement
on Form N-1A as filed with the Commission on April 17, 2000.

(17) Filed electronically as an Exhibit and incorporated herein by reference to
Post-Effective Amendment No. 48 to the Registrant's Registration Statement
on Form N-1A as filed with the Commission on May 31, 2000.

(18) Filed electronically as an Exhibit and incorporated herein by reference to
Post-Effective Amendment No. 49 to the Registrant's Registration Statement
on Form N-1A as filed with the Commission on June 1, 2000.

(19) Filed electronically as an Exhibit and incorporated herein by reference to
Post-Effective Amendment No. 50 to the Registrant's Registration Statement
on Form N-1A as filed with the Commission on September 29, 2000.

(20) Filed herewith.

Item 24. Persons Controlled By or Under Common Control with
Registrant

Registrant is controlled by its Board of Trustees.

Item 25. Indemnification

Indemnification of the Registrant's principal underwriter, custodian and
transfer agent against certain losses is provided for, respectively, in Section
1.19 of the Distribution Agreement incorporated herein by reference as Exhibit
(e)(1), in Section 12 of the Global Custody Agreement incorporated herein by
reference as Exhibit (g)(1) and in Article 10 of the Transfer Agency and
Services Agreement incorporated herein by reference as Exhibit (h)(9). The
Registrant has obtained from a major insurance carrier a directors' and
officers' liability policy covering certain types of errors and omissions. In
addition, Section 9.3 of the Registrant's Declaration of Trust dated March 31,
1986, incorporated herein by reference as Exhibit (a)(1), provides as follows:

9.3 INDEMNIFICATION OF TRUSTEES, REPRESENTATIVES AND EMPLOYEES. The
Trust shall indemnify each of its Trustees against all
liabilities and expenses (including amounts paid in satisfaction
of judgments, in compromise, as fines and penalties, and as
counsel fees) reasonably incurred by him in connection with the
defense or disposition of any action, suit or other proceeding,
whether civil or criminal, in which he may be involved or with
which he may be threatened, while as a Trustee or thereafter, by
reason of his being or having been such a Trustee EXCEPT with

-13-
<PAGE>

respect to any matter as to which he shall have been adjudicated
to have acted in bad faith, willful misfeasance, gross negligence
or reckless disregard of his duties, PROVIDED that as to any
matter disposed of by a compromise payment by such person,
pursuant to a consent decree or otherwise, no indemnification
either for said payment or for any other expenses shall be
provided unless the Trust shall have received a written opinion
from independent legal counsel approved by the Trustees to the
effect that if either the matter of willful misfeasance, gross
negligence or reckless disregard of duty, or the matter of bad
faith had been adjudicated, it would in the opinion of such
counsel have been adjudicated in favor of such person. The rights
accruing to any person under these provisions shall not exclude
any other right to which he may be lawfully entitled, PROVIDED
that no person may satisfy any right of indemnity or
reimbursement hereunder except out of the property of the Trust.
The Trustees may make advance payments in connection with the
indemnification under this Section 9.3, PROVIDED that the
indemnified person shall have given a written undertaking to
reimburse the Trust in the event it is subsequently determined
that he is not entitled to such indemnification.

The Trustees shall indemnify representatives and employees of the
Trust to the same extent that Trustees are entitled to
indemnification pursuant to this Section 9.3.

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

Item 26. (a) Business and Other Connections of Investment Adviser

Fleet Investment Advisors Inc. ("Fleet") is an investment adviser
registered under the Investment Advisers Act of 1940 (the
"Advisers Act").

The list required by this Item 26 of officers and directors of
Fleet, together with information as to any business profession,
vocation or employment of a substantial nature engaged in by such
officers and directors during the past two years, is incorporated
herein by reference to Schedules A and D of Form ADV

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<PAGE>

filed by Fleet pursuant to the Advisers Act (SEC File No.
801-20312).

(b) Business and Other Connections of Sub-Adviser

Oechsle International Advisors, LLC ("Oechsle") is an investment
adviser registered under the Investment Advisers Act of 1940 (the
"Advisers Act").

The list required by this Item 26 of the officers of Oechsle,
together with information as to any business profession, vocation
or employment of a substantial nature engaged in by such officers
during the past two years, is incorporated herein by reference to
Schedules A and D of Form ADV filed by Oechsle pursuant to the
Advisers Act (SEC File No. 801-28111).

UOB Global Capital LLC ("UOB") is an investment adviser
registered under the Advisers Act.

The list required by this Item 26 of the officers of UOB,
together with information as to any business profession, vocation
or employment of a substantial nature engaged in by such officers
during the past two years, is incorporated herein by reference to
Schedules A and D of Form ADV filed by UOB pursuant to the
Advisers Act (SEC File No. 801-56090).

Item 27. Principal Underwriter

(a) In addition to The Galaxy Fund, Provident Distributors, Inc. (the
"Distributor") currently acts as distributor for The Galaxy VIP
Fund, Galaxy Fund II, International Dollar Reserve Fund I, Ltd.,
Provident Institutional Funds, Columbia Common Stock Fund, Inc.,
Columbia Growth Fund, Inc., Columbia International Stock Fund,
Inc., Columbia Special Fund, Inc., Columbia Small Cap Fund, Inc.,
Columbia Real Estate Equity Fund, Inc., Columbia Balanced Fund,
Inc., Columbia Daily Income Company, Columbia U.S. Government
Securities Fund, Inc., Columbia Fixed Income Securities Fund,
Inc., Columbia Municipal Bond Fund, Inc., Columbia High Yield
Fund, Inc., Columbia National Municipal Bond Fund, Inc., GAMNA
Series Funds, Inc., WT Investment Trust, Kalmar Pooled Investment
Trust, The RBB Fund, Inc., Robertson Stephens Investment Trust,
Harris Insight Funds Trust, Allegheny Funds, Deutsche Asset
Management VIT Funds, First Choice Funds Trust, Forward Funds,
Inc., IBJ Funds Trust, Light Index Funds, Inc., LKCM Funds,
Matthews International Funds, McM Funds, Metropolitan West Funds,
New Covenant Funds, Inc., Pictet Funds, Stratton Growth Fund,
Inc., Stratton Monthly Dividend REIT Shares, Inc., The Stratton
Funds, Inc., Trainer, Wortham First Mutual Funds, Undiscovered
Managers Funds, Wilshire Target Funds, Inc., Weiss, Peck & Greer
Funds Trust, Weiss, Peck & Greer International Fund, WPG Growth
and Income Fund, WPG Growth Fund, WPG Tudor Fund, RWB/WPG U.S.
Large Stock Fund, Tomorrow

-15-
<PAGE>

Funds Retirement Trust, The BlackRock Funds, Inc. (distributed by
BlackRock Distributors, Inc., a wholly-owned subsidiary of the
Distributor), Northern Funds Trust and Northern Institutional
Funds Trust (distributed by Northern Funds Distributors, LLC, a
wholly-owned subsidiary of the Distributor), The Offit Investment
Fund, Inc. (distributed by Offit Funds Distributor, Inc., a
wholly-owned subsidiary of the Distributor), The Offit Variable
Insurance Fund, Inc. (distributed by Offit Funds Distributor,
Inc., a wholly-owned subsidiary of the Distributor), ABN AMRO
Funds (distributed by ABN AMRO Distribution Services (USA), Inc.,
a wholly-owned subsidiary of the Distributor).

(b) The information required by this Item 27 (b) with respect to each
director, officer, or partner of the Distributor is incorporated
by reference to Schedule A of Form BD filed by the Distributor
with the Securities and Exchange Commission pursuant to the
Securities Act of 1934, as amended (File No. 8-46564).

(c) The Distributor receives no compensation from the Registrant for
distribution of its shares other than payments for distribution
assistance pursuant to Registrant's Distribution Plan for Retail
A Shares (Pan Asia Fund only), Distribution and Services Plan for
Retail B Shares, Distribution and Services Plan for the Prime
Reserves, Government Reserves and Tax-Exempt Reserves,
Distribution and Services Plan for Prime Shares (New York
Municipal Money Market, Connecticut Municipal Money Market and
Massachusetts Municipal Money Market Funds only), Distribution
Plan for Prime A Shares and Distribution and Services Plan for
Prime B Shares.

Item 28. Location of Accounts and Records

(1) Fleet Investment Advisors Inc., 100 Federal Street, Boston,
Massachusetts 02109 (records relating to its functions as
investment adviser to all of the Registrant's Funds).

(2) Oechsle International Advisors, LLC, One International
Place, Boston, Massachusetts 02210 (records relating to its
functions as sub-investment adviser to the International
Equity Fund).

(3) UOB Global Capital LLC, 592 Fifth Avenue, Suite 602, New
York, NY 10036 and UOB Plaza 2, 80 Raffles Place, #03-00,
Singapore 048624 (records relating to its functions as
sub-investment adviser to the Pan Asia Fund).

(4) Provident Distributors Inc., 3200 Horizon Drive, King of
Prussia, Pennsylvania 19406 (records relating to its
functions as distributor).

(5) PFPC Inc. (formerly known as First Data Investor Services
Group, Inc.), 53 State Street, Mail Stop BOS 425, Boston, MA
02109 (records relating to its functions as administrator).

-16-
<PAGE>

(6) PFPC Inc. (formerly known as First Data Investor Services
Group, Inc.), 4400 Computer Drive, Westborough, MA
01581-5108 (records relating to its functions as transfer
agent).

(7) Drinker Biddle & Reath LLP, One Logan Square, 18th and
Cherry Streets, Philadelphia, Pennsylvania 19103
(Registrant's Declaration of Trust, Code of Regulations and
Minute Books).

(8) The Chase Manhattan Bank, 1211 Avenue of the Americas, New
York, New York 10036 (records relating to its functions as
custodian).

Item 29. Management Services

Inapplicable.

Item 30. Undertakings

None.

-17-
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, and
the Investment Company Act of 1940, as amended, Registrant has duly caused this
Post-Effective Amendment No. 51 to its Registration Statement to be signed on
its behalf by the undersigned, thereto duly authorized, in Warwick, Rhode
Island, on the 30th day of November, 2000.

THE GALAXY FUND
Registrant

/s/ John T. O'Neill
-------------------
John T. O'Neill
President

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 51 to the Registration Statement has been signed
below by the following persons in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ John T. O'Neill Trustee, President and Treasurer November 30, 2000
-----------------------------------
John T. O'Neill

*/s/ Dwight E. Vicks, Jr. Chairman of the Board of Trustees November 30, 2000
-----------------------------------
Dwight E. Vicks, Jr.

*/s/ Donald B. Miller Trustee November 30, 2000
-----------------------------------
Donald B. Miller

*/s/ Louis DeThomasis Trustee November 30, 2000
-----------------------------------
Louis DeThomasis

*/s/ Bradford S. Wellman Trustee November 30, 2000
-----------------------------------
Bradford S. Wellman

*/s/ James M. Seed Trustee November 30, 2000
-----------------------------------
James M. Seed
</TABLE>

*By: /s/ John T. O'Neill
-------------------
John T. O'Neill
Attorney-In-Fact

-18-
<PAGE>

THE GALAXY FUND

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby appoints
John T. O'Neill and W. Bruce McConnel, III, and either of them, his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in his capacity as
trustee or officer, or both, of The Galaxy Fund (the "Trust"), to execute any
and all amendments to the Trust's Registration Statement on Form N-1A pursuant
to the Investment Company Act of 1940, as amended, and the Securities Act of
1933, as amended (the "Acts"), and all instruments necessary or incidental in
connection therewith pursuant to said Acts and any rules, regulations, or
requirements of the Securities and Exchange Commission in respect thereof, and
to file the same with the Securities and Exchange Commission, and either of said
attorneys shall have full power and authority, to do and perform in the name and
on behalf of the undersigned in any and all capacities, every act whatsoever
requisite or necessary to be done, as fully and to all intents and purposes as
he might or could do in person, hereby ratifying and confirming all that said
attorneys, or either of them, may lawfully do or cause to be done by virtue
hereof.

Dated: December 4, 1996 /s/ Dwight E. Vicks, Jr.
------------------------------------
Dwight E. Vicks, Jr.

-19-
<PAGE>

THE GALAXY FUND

POWER OF ATTORNEY

Dated: December 5, 1996 /s/ Donald B. Miller
------------------------------------
Donald B. Miller

-20-
<PAGE>

THE GALAXY FUND

POWER OF ATTORNEY

Dated: December 5, 1996 /s/ Brother Louis DeThomasis
------------------------------------
Brother Louis DeThomasis

-21-
<PAGE>

THE GALAXY FUND

POWER OF ATTORNEY

Dated: December 5, 1996 /s/ Bradford S. Wellman
------------------------------------
Bradford S. Wellman

-22-
<PAGE>

THE GALAXY FUND

POWER OF ATTORNEY

Dated: December 5, 1996 /s/ James M. Seed
------------------------------------
James M. Seed

-23-

<PAGE>

EXHIBIT INDEX

EXHIBIT NO. DESCRIPTION
----------- -----------
<S> <C>
(d)(9) Sub-Advisory Agreement between Fleet Investment Advisors
Inc. and UOB Global Capital LLC with respect to the Pan
Asia Fund dated as of September 5, 2000.(20)

(h)(9) Amendment No. 8 dated as of September 5, 2000 to
Administration Agreement between Registrant and PFPC Inc.
(formerly known as First Data Investor Services Group,
Inc.) with respect to the Pan Asia Fund.

(h)(20) Amendment No. 9 dated as of September 5, 2000 to the Transfer
Agency and Services Agreement between Registrant and PFPC
Inc. (formerly known as First Data Investor Services
Group, Inc.) with respect to the Pan Asia Fund.

(j)(1) Consent of Drinker Biddle & Reath LLP.

(j)(2) Consent of Ernst & Young LLP.
</TABLE>

-24-