<PAGE>
[Front cover page]
Galaxy Money Market Funds
The Galaxy Fund
Prospectus
February 29, 2000
Galaxy Money Market Fund
Galaxy Government Fund
Galaxy U.S. Treasury Fund
Galaxy Tax-Exempt Fund
Galaxy Connecticut Municipal Money Market Fund
Galaxy Massachusetts Municipal Money Market Fund
Galaxy New York Municipal Money Market Fund
Retail A Shares and Retail B Shares
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved any shares of these Funds or determined if this
prospectus is accurate or complete. Anyone who tells you otherwise is committing
a crime.
<PAGE>
<TABLE>
<CAPTION>
Contents
<S> <C>
1 Risk/return summary
1 Introduction
3 Galaxy Money Market Fund
7 Galaxy Government Fund
10 Galaxy U.S. Treasury Fund
13 Galaxy Tax-Exempt Fund
17 Galaxy Connecticut Municipal Money Market Fund
20 Galaxy Massachusetts Municipal Money Market Fund
24 Galaxy New York Municipal Money Market Fund
27 Additional information about risk
28 Investor guidelines
29 Fund management
30 How to invest in the Funds
30 About sales charges
31 Buying, selling and exchanging shares
32 How to buy shares
34 How to sell shares
35 How to exchange shares
36 Other transaction policies
37 Dividends, distributions and taxes
39 Galaxy investor programs
39 Retirement plans
39 Other programs
41 How to reach Galaxy
42 Financial highlights
</TABLE>
<PAGE>
RISK/RETURN SUMMARY
INTRODUCTION
This prospectus describes the Galaxy Money Market Funds. 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
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.
On the following pages, you'll find important information about each Galaxy
Money Market 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 Fund's past performance measured on both a year-by-year and long-term
basis
- - the fees and expenses that you will pay as an investor in the Fund.
[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 28,
you'll find a table which sets forth general guidelines to help you decide which
of the Galaxy Money Market 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. The Adviser,
an indirect wholly-owned subsidiary of FleetBoston Financial Corporation, was
established in 1984 and has its main office at 75 State Street, Boston,
Massachusetts 02109. The
-1-
<PAGE>
Adviser also provides investment management and advisory services to
individual and institutional clients and manages the other Galaxy investment
portfolios. As of December 31, 1999, the Adviser managed over $68 billion in
assets.
AN INVESTMENT IN THE FUNDS ISN'T A FLEET BANK DEPOSIT AND IT ISN'T INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY. ALTHOUGH THE 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.
-2-
<PAGE>
Galaxy Money Market Fund
THE FUND'S INVESTMENT OBJECTIVE
The Fund seeks as high a level of current income as is consistent with liquidity
and stability of principal.
THE FUND'S MAIN INVESTMENT STRATEGIES
The Fund invests in a diversified portfolio of money market instruments,
including commercial paper, notes and bonds issued by U.S. corporations,
obligations issued by the U.S. Government and its agencies and
instrumentalities, and obligations issued by U.S. and foreign banks, such as
certificates of deposit. The Fund also invests in repurchase agreements backed
by U.S. Government obligations.
The Fund will only buy a security if it has the highest short-term rating from
at least two nationally recognized statistical rating organizations, or one such
rating if only one organization has rated the security. If the security is not
rated, it must be determined by the Adviser to be of comparable credit quality.
[Sidenote:]
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.
- - 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.
- - 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.
-3-
<PAGE>
- - SHARE PRICE - There's no guarantee the Fund will be able to preserve the
value of your investment at $1.00 per share.
- - SELECTION OF INVESTMENTS - The Adviser evaluates the risks and rewards
presented by all securities purchased by the Fund and how they advance the
Fund's investment objective. It's possible, however, that these evaluations
will prove to be inaccurate.
HOW THE FUND HAS PERFORMED
The bar chart and table below show how the Fund has performed in the past and
give some indication of the risk of investing in the Fund. Both assume that
all dividends and distributions are reinvested in the Fund. How the Fund has
performed in the past doesn't necessarily show how it will perform in the
future.
YEAR-BY-YEAR TOTAL RETURNS - CALENDAR YEARS
The bar chart shows how the performance of Retail A Shares of the Fund has
varied from year to year. The returns for Retail B Shares of the Fund were
different than the figures shown because each class of shares has different
expenses.
[Sidenote:]
BEST QUARTER: 1.96% for the quarter ending June 30, 1990
WORST QUARTER: 0.65% for the quarter ending September 30, 1993
[bar chart goes here]
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
8.01% 6.13% 3.54% 2.73% 3.68% 5.29% 4.73% 4.99% 4.96% 4.63%
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS
The table shows the Fund's average annual total returns for the periods ended
December 31, 1999, after taking into account any sales charges.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
1 Year 5 Years 10 Years Since Inception
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Retail A Shares 4.63% 4.92% 4.86% 5.50% (11/17/86)
- -------------------------------------------------------------------------------------------------------------------------------
Retail B Shares -1.08% -- -- 3.11% (3/6/97)
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
To obtain the Fund's current 7-day yield, please call 1-877-BUY-GALAXY
(1-877-289-4252).
-4-
<PAGE>
FEES AND EXPENSES OF THE FUND
The Fund offers both Retail A Shares and Retail B Shares. There are no sales
charges (sometimes called front-end loads) when you buy Retail A Shares or
Retail B Shares of the Fund. However, if you buy Retail B Shares of the Fund,
you may have to pay a contingent deferred sales charge (sometimes called a
back-end load or CDSC) when you sell your shares.
The following table shows the fees and expenses you may pay when you buy and
hold shares of the Fund.
Shareholder fees (fees paid directly from your investment)
<TABLE>
<CAPTION>
Maximum sales charge (load) on Maximum deferred sales charge (load)
purchases shown as a % of the shown as a % of the offering price
offering price or sale price, whichever is less
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Retail A Shares None None
- ----------------------------------------------------------------------------------------------------------------------
Retail B Shares None 5.00%(1)
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
Annual Fund operating expenses (expenses deducted from the Fund's assets)
<TABLE>
<CAPTION>
Distribution and Total Fund
Management fees service (12b-1) fees Other expenses operating expenses
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Retail A Shares 0.40%(2) None 0.28% 0.68%(2)
- ----------------------------------------------------------------------------------------------------------------------
Retail B Shares 0.40%(2) 0.75%(2) 0.26% 1.41%(2)
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) This amount applies if you sell your shares in the first year after
purchase and gradually declines to 1% in the sixth year after purchase.
After six years, your Retail B Shares will automatically convert to Retail
A Shares. See "How to invest in the Funds - About sales charges."
(2) The Adviser is waiving a portion of the Management fees so that such fees
are expected to be 0.36%. Affiliates of the Adviser are waiving a portion
of the Distribution and Service (12b-1) fees for Retail B Shares so that
such fees are expected to be 0.73%. Total Fund operating expenses after
these waivers are expected to be 0.64% for Retail A Shares and 1.35% for
Retail B Shares. These fee waivers may be revised or discontinued at any
time.
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
-5-
<PAGE>
- - you sell all your shares at the end of the periods shown
- - your investment has a 5% return each year
- - your Retail B Shares convert to Retail A Shares after six years
- - 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>
Retail A Shares $69 $218 $379 $847
- ----------------------- --------------------- -------------------- --------------------- --------------------
Retail B Shares $644 $746 $971 $1,309
- -------------------------------------------------------------------------------------------------------------
If you hold Retail B Shares, you would pay the following expenses if you didn't
sell your shares:
- ----------------------- --------------------- -------------------- --------------------- --------------------
Retail B Shares $144 $446 $771 $1,309
- ----------------------- --------------------- -------------------- --------------------- --------------------
</TABLE>
-6-
<PAGE>
Galaxy Government Fund
THE FUND'S INVESTMENT OBJECTIVE
The Fund seeks as high a level of current income as is consistent with liquidity
and stability of principal.
THE FUND'S MAIN INVESTMENT STRATEGIES
The Fund invests 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.
- - 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.
-7-
<PAGE>
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 how the performance of Retail A Shares of the Fund has
varied from year to year.
[Sidenote:]
Best quarter: 1.96% for the quarter ending June 30, 1990
Worst quarter: 0.68% for the quarter ending June 30, 1993
[bar chart goes here]
<TABLE>
<CAPTION>
- ------------- ----------- ---------- ----------- ----------- ----------- ---------- ----------- ----------- ----------
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
- ------------- ----------- ---------- ----------- ----------- ----------- ---------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7.96% 6.23% 3.45% 2.88% 3.73% 5.25% 4.67% 4.89% 4.85% 4.49%
- ------------- ----------- ---------- ----------- ----------- ----------- ---------- ----------- ----------- ----------
</TABLE>
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 5 years 10 years Since inception
- ----------------------- ---------------------- ----------------------- --------------------- -------------------------
<S> <C> <C> <C> <C>
Retail A Shares 4.49% 4.83% 4.83% 5.45% (11/17/86)
- ----------------------- ---------------------- ----------------------- --------------------- -------------------------
</TABLE>
To obtain the Fund's current 7-day yield, please call 1-877-BUY-GALAXY
(1-877-289-4252).
FEES AND EXPENSES OF THE FUND
There are no sales charges when you buy or sell Retail A Shares of the Fund. The
following table shows the fees and expenses you may pay when you buy and hold
shares of the Fund.
-8-
<PAGE>
Annual Fund operating expenses (expenses deducted from the Fund's assets)
<TABLE>
<CAPTION>
- ------------------------- ---------------------- ---------------------- ----------------------- ----------------------
Distribution Total Fund operating
Management fees (12b-1) fees Other expenses expenses
- ------------------------- ---------------------- ---------------------- ----------------------- ----------------------
<S> <C> <C> <C> <C>
Retail A Shares 0.40%(1) None 0.28% 0.68%(1)
- ------------------------- ---------------------- ---------------------- ----------------------- ----------------------
</TABLE>
(1) The Adviser is waiving a portion of the Management fees so that such fees
are expected to be 0.39%. Total Fund operating expenses after this waiver
are expected to be 0.67%. This fee waiver may be revised or discontinued at
any time.
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>
Retail A Shares $69 $218 $379 $847
- ----------------------- --------------------- -------------------- --------------------- --------------------
</TABLE>
-9-
<PAGE>
Galaxy U.S. Treasury Fund
THE FUND'S INVESTMENT OBJECTIVE
The Fund seeks current income with liquidity and stability of principal.
THE FUND'S MAIN INVESTMENT STRATEGIES
The Fund invests primarily in securities issued or guaranteed by the U.S.
Treasury and certain U.S. Government agencies and instrumentalities that provide
income that is generally not subject to state income tax. Under normal
circumstances, the Fund invests at least 65% of its total assets in money
market instruments issued by the U.S. Treasury, including bills, notes and
bonds.
[Sidenote:]
U.S. TREASURY OBLIGATIONS
U.S. Treasury obligations are among the safest of all investments because they
are backed by the "full faith and credit" of the U.S. Government.
THE MAIN RISKS OF INVESTING IN THE FUND
While money market funds are considered to be among the safest of all
investments, they are not risk free. Here are the main risks associated with an
investment in the Fund:
- - INTEREST RATE RISK - The yield paid by the Fund will vary with changes in
short-term interest rates.
- - CREDIT RISK - Although U.S. Government securities, particularly U.S.
Treasury securities, have historically involved little credit risk, if an
issuer fails to pay interest or repay principal, the value of your
investment could decline.
- - SHARE PRICE - There's no guarantee the Fund will be able to preserve the
value of your investment at $1.00 per share.
- - 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.
-10-
<PAGE>
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 how the performance of Retail A Shares of the Fund has
varied from year to year.
[Sidenote:]
Best quarter: 1.28% for the quarter ending June 30, 1995
Worst quarter: 0.65% for the quarter ending June 30, 1993
[bar chart goes here]
<TABLE>
<CAPTION>
- ---------------- -------------- ------------- -------------- ------------- -------------- -------------- -------------
1992 1993 1994 1995 1996 1997 1998 1999
- ---------------- -------------- ------------- -------------- ------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
3.39% 2.74% 3.58% 5.05% 4.59% 4.70% 4.63% 4.20%
- ---------------- -------------- ------------- -------------- ------------- -------------- -------------- -------------
</TABLE>
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 5 years Since inception
- --------------------------- ------------------------ ------------------------ ------------------------
<S> <C> <C> <C>
Retail A Shares 4.20% 4.63% 4.27% (1/22/91)
- --------------------------- ------------------------ ------------------------ ------------------------
</TABLE>
To obtain the Fund's current 7-day yield, please call 1-877-BUY-GALAXY
(1-877-289-4252).
FEES AND EXPENSES OF THE FUND
There are no sales charges when you buy or sell Retail A Shares of the Fund. The
following table shows the fees and expenses you may pay when you buy and hold
shares of the Fund.
-11-
<PAGE>
Annual Fund operating expenses (expenses deducted from the Fund's assets)
<TABLE>
<CAPTION>
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
Distribution Total Fund operating
Management fees (12b-1) fees Other expenses expenses
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
<S> <C> <C> <C> <C>
Retail A Shares 0.39% None 0.26% 0.65%
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
</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:
- - 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>
Retail A Shares $66 $208 $362 $810
- ----------------------- --------------------- -------------------- --------------------- --------------------
</TABLE>
-12-
<PAGE>
Galaxy Tax-Exempt Fund
THE FUND'S INVESTMENT OBJECTIVE
The Fund seeks as high a level of current interest income exempt from federal
income tax as is consistent with stability of principal.
THE FUND'S MAIN INVESTMENT STRATEGIES
The Fund normally invests at least 80% of its total assets in municipal
securities, which are securities issued by state and local governments and other
political or public bodies or agencies and that pay interest which is exempt
from regular federal income tax. Under normal conditions, the Fund will invest
no more than 20% of its total assets in taxable obligations, such as U.S.
Government obligations, money market instruments and repurchase agreements.
Municipal securities purchased by the Fund may include general obligation
securities, revenue securities and private activity bonds. The interest on
private activity bonds may be subject to the federal alternative minimum tax.
Investments in private activity bonds will not be treated as investments in
municipal securities for purposes of the 80% requirement stated above.
The Fund will only buy a security if it has one of the two highest short-term
ratings from at least two nationally recognized statistical rating
organizations, or one such rating if only one organization has rated the
security. If the security is not rated, it must be determined by the Adviser to
be of comparable credit quality.
[Sidenote:]
MUNICIPAL SECURITIES
State and local governments issue municipal securities to raise money to finance
public works, to repay outstanding obligations, to raise funds for general
operating expenses and to make loans to other public institutions. Some
municipal securities, known as private activity bonds, are issued to finance
projects for private companies. Municipal securities, which can be issued as
bonds, notes or commercial paper, usually have fixed interest rates, although
some have interest rates that change from time to time.
-13-
<PAGE>
[Sidenote:]
TYPES OF MUNICIPAL SECURITIES
GENERAL OBLIGATION securities are secured by the issuer's full faith, credit and
taxing power. REVENUE OBLIGATION securities are usually payable only from
revenues derived from specific facilities or revenue sources. PRIVATE ACTIVITY
BONDS are usually revenue obligations since they are typically payable by the
private user of the facilities financed by the bonds.
THE MAIN RISKS OF INVESTING IN THE FUND
While money market funds are considered to be among the safest of all
investments, they are not risk free. Here are the main risks associated with an
investment in the Fund:
- - INTEREST RATE RISK - The yield paid by the Fund will vary with changes in
short-term interest rates.
- - CREDIT RISK - Although credit risk is very low because the Fund only
invests in high quality obligations, if an issuer fails to pay interest
or repay principal, the value of your investment could decline.
The ability of a state or local government issuer to make payments can be
affected by many factors, including economic conditions, the flow of tax
revenues and changes in the level of federal, state or local aid.
- - SHARE PRICE - There's no guarantee the Fund will be able to preserve the
value of your investment at $1.00 per share.
- - SELECTION OF INVESTMENTS - The Adviser evaluates the risks and rewards
presented by all securities purchased by the Fund and how they advance the
Fund's investment objective. It's possible, however, that these evaluations
will prove to be inaccurate.
HOW THE FUND HAS PERFORMED
The bar chart and table below show how the Fund has performed in the past and
give some indication of the risk of investing in the Fund. Both assume that
all dividends and distributions are reinvested in the Fund. How the Fund has
performed in the past doesn't necessarily show how it will perform in the
future.
YEAR-BY-YEAR TOTAL RETURNS - CALENDAR YEARS
The bar chart shows how the performance of Retail A Shares of the Fund has
varied from year to year.
[Sidenote:]
Best quarter: 1.41% for the quarter ending December 31, 1990
Worst quarter: 0.45% for the quarter ending September 30, 1993
-14-
<PAGE>
[bar chart goes here]
<TABLE>
<CAPTION>
- ------------- ----------- ---------- ----------- ----------- ----------- ---------- ----------- ----------- ----------
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
- ------------- ----------- ---------- ----------- ----------- ----------- ---------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
5.52% 4.18% 2.46% 2.01% 2.27% 3.19% 2.78% 2.99% 2.81% 2.59%
- ------------- ----------- ---------- ----------- ----------- ----------- ---------- ----------- ----------- ----------
</TABLE>
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 5 years 10 years Since inception
- --------------------------- ------------------ ------------------ -------------------- -----------------------------
<S> <C> <C> <C> <C>
Retail A Shares 2.59% 2.87% 3.07% 3.43% (6/23/88)
- --------------------------- ------------------ ------------------ -------------------- -----------------------------
</TABLE>
To obtain the Fund's current 7-day yield, please call 1-877-BUY-GALAXY
(1-877-289-4252).
FEES AND EXPENSES OF THE FUND
There are no sales charges when you buy or sell Retail A Shares of the Fund. The
following table shows the fees and expenses you may pay when you buy and hold
shares of the Fund.
Annual Fund operating expenses (expenses deducted from the Fund's assets)
<TABLE>
<CAPTION>
- ----------------------- ----------------------- ----------------------- ---------------------- -----------------------
Distribution Total Fund operating
Management fees (12b-1) fees Other expenses expenses
- ----------------------- ----------------------- ----------------------- ---------------------- -----------------------
<S> <C> <C> <C> <C>
Retail A Shares 0.40% None 0.24% 0.64%
- ----------------------- ----------------------- ----------------------- ---------------------- -----------------------
</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:
- - 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:
-15-
<PAGE>
<TABLE>
<CAPTION>
- ----------------------- --------------------- -------------------- --------------------- --------------------
1 year 3 years 5 years 10 years
- ----------------------- --------------------- -------------------- --------------------- --------------------
<S> <C> <C> <C> <C>
Retail A Shares $65 $205 $357 $798
- ----------------------- --------------------- -------------------- --------------------- --------------------
</TABLE>
-16-
<PAGE>
Galaxy Connecticut Municipal Money Market Fund
THE FUND'S INVESTMENT OBJECTIVE
The Fund seeks to provide current income exempt from federal regular income tax
and the Connecticut state income tax on individuals, trusts and estates,
consistent with relative stability of principal and liquidity.
THE FUND'S MAIN INVESTMENT STRATEGIES
The Fund normally invests at least 80% of its total assets in municipal
securities that pay interest which is exempt from federal regular income tax,
and at least 65% of its total assets in Connecticut municipal securities, which
are securities issued by or on behalf of the State of Connecticut and other
government issuers and that pay interest which is exempt from both federal
regular income tax and the Connecticut state income tax on individuals, trusts
and estates. Under normal conditions, the Fund will invest no more than 20% of
its total assets in taxable obligations, such as U.S. Government obligations,
money market instruments and repurchase agreements.
Municipal securities purchased by the Fund may include general obligation
securities, revenue securities and private activity bonds. The interest on
private activity bonds may be subject to the federal alternative minimum tax.
Investments in private activity bonds will not be treated as investments in
municipal securities for purposes of the 80% requirement stated above.
The Fund will only buy a security if it has one of the two highest short-term
ratings from at least two nationally recognized statistical rating
organizations, or one such rating if only one organization has rated the
security. If the security is not rated, it must be determined by the Adviser to
be of comparable credit quality.
THE MAIN RISKS OF INVESTING IN THE FUND
While money market funds are considered to be among the safest of all
investments, they are not risk free. Here are the main risks associated with an
investment in the Fund:
- - INTEREST RATE RISK - The yield paid by the Fund will vary with changes in
short-term interest rates.
- - CREDIT RISK - Although credit risk is very low because the Fund only
invests in high quality obligations, if an issuer fails to pay interest or
repay principal, the value of your investment could decline. The ability
of a state or local government issuer to make payments can be
-17-
<PAGE>
affected by many factors, including economic conditions, the flow of tax
revenues and changes in the level of federal, state or local aid.
- - LACK OF DIVERSIFICATION - The Fund is not diversified, which means that it
can invest a large percentage of its assets in a small number of issuers.
As a result, a change in the value of any one investment held by the Fund
may affect the overall value of the Fund more than it would affect a
diversified fund which holds more investments.
- - SINGLE STATE RISK - Since the Fund invests primarily in Connecticut
municipal securities, it is likely to be especially susceptible to
economic, political and regulatory events that affect Connecticut. Other
considerations affecting the Fund's investments in Connecticut municipal
securities are summarized in the Statement of Additional Information.
- - SHARE PRICE - There's no guarantee the Fund will be able to preserve the
value of your investment at $1.00 per share.
- - SELECTION OF INVESTMENTS - The Adviser evaluates the risks and rewards
presented by all securities purchased by the Fund and how they advance the
Fund's investment objective. It's possible, however, that these evaluations
will prove to be inaccurate.
HOW THE FUND HAS PERFORMED
The bar chart and table below show how the Fund has performed in the past and
give some indication of the risk of investing in the Fund. Both assume that
all dividends and distributions are reinvested in the Fund. How the Fund has
performed in the past doesn't necessarily show how it will perform in the
future.
The Fund began operations on October 4, 1993 as a separate portfolio (the
Predecessor Fund) of The Shawmut Funds. On December 4, 1995, the Predecessor
Fund was reorganized as a new portfolio of Galaxy. Prior to the reorganization,
the Predecessor Fund offered and sold two classes of shares, Investment Shares
and Trust Shares. In connection with the reorganization, shareholders of the
Predecessor Fund exchanged their Investment Shares and Trust Shares for Retail A
Shares of the Fund. The return for periods prior to December 4, 1995 are for
Investment Shares of the Predecessor Fund.
YEAR-BY-YEAR TOTAL RETURNS - CALENDAR YEARS
The bar chart shows how the performance of the Fund has varied from year to
year.
[Sidenote:]
Best quarter: 0.78% for the quarter ending June 30, 1995
Worst quarter: 0.36% for the quarter ending March 31, 1994
-18-
<PAGE>
[bar chart goes here]
<TABLE>
<CAPTION>
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
1994 1995 1996 1997 1998 1999
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
<S> <C> <C> <C> <C> <C>
1.99% 2.97% 2.78% 2.98% 2.77% 2.53%
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS
The table shows the Fund's average annual total returns for the periods ended
December 31, 1999, after taking into account any sales charges on Investment
Shares of the Predecessor Fund.
<TABLE>
<CAPTION>
- --------------------------- ------------------------ ------------------------ ------------------------
1 year 5 years Since inception
- --------------------------- ------------------------ ------------------------ ------------------------
<S> <C> <C> <C>
Retail A Shares 2.53% 2.81% 2.64% (10/4/93)
- --------------------------- ------------------------ ------------------------ ------------------------
</TABLE>
To obtain the Fund's current 7-day yield, please call 1-877-BUY-GALAXY
(1-877-289-4252).
FEES AND EXPENSES OF THE FUND
There are no sales charges when you buy or sell Retail A Shares of the Fund. The
following table shows the fees and expenses you pay when you buy and hold shares
of the Fund.
Annual Fund operating expenses (expenses deducted from the Fund's assets)
<TABLE>
<CAPTION>
- ----------------------- ----------------------- ----------------------- ---------------------- -----------------------
Distribution Total Fund operating
Management fees (12b-1) fees Other expenses expenses
- ----------------------- ----------------------- ----------------------- ---------------------- -----------------------
<S> <C> <C> <C> <C>
Retail A Shares 0.40% None 0.25% 0.65%
- ----------------------- ----------------------- ----------------------- ---------------------- -----------------------
</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:
- - 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.
-19-
<PAGE>
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>
Retail A Shares $66 $208 $362 $810
- ----------------------- --------------------- -------------------- --------------------- --------------------
</TABLE>
-20-
<PAGE>
Galaxy Massachusetts Municipal Money Market Fund
THE FUND'S INVESTMENT OBJECTIVE
The Fund seeks to provide current income exempt from federal regular income tax
and the income taxes imposed by the Commonwealth of Massachusetts, consistent
with relative stability of principal and liquidity.
THE FUND'S MAIN INVESTMENT STRATEGIES
The Fund normally invests at least 80% of its total assets in municipal
securities that pay interest which is exempt from federal regular income tax,
and at least 65% of its total assets in Massachusetts municipal securities,
which are securities issued by or on behalf of the Commonwealth of Massachusetts
and other government issuers and that pay interest which is exempt from both
federal regular income tax and Massachusetts personal income tax. Under normal
conditions, the Fund will invest no more than 20% of its total assets in taxable
obligations, such as U.S. Government obligations, money market instruments and
commercial paper.
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.
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:
-21-
<PAGE>
- - INTEREST RATE RISK - The yield paid by the Fund will vary with changes in
short-term interest rates.
- - CREDIT RISK - Although credit risk is very low because the Fund only
invests in high quality obligations, if an issuer fails to pay interest or
repay principal, the value of your investment could decline. The ability of
a state or local government issuer to make payments can be affected by
many factors, including economic conditions, the flow of tax revenues and
changes in the level of federal, state or local aid.
- - LACK OF DIVERSIFICATION - The Fund is not diversified, which means that it
can invest a large percentage of its assets in a small number of issuers.
As a result, a change in the value of any one investment held by the Fund
may affect the overall value of the Fund more than it would affect a
diversified fund which holds more investments.
- - SINGLE STATE RISK - Since the Fund invests primarily in Massachusetts
municipal securities, it is likely to be especially susceptible to
economic, political and regulatory events that affect Massachusetts.
- - SHARE PRICE - There's no guarantee the Fund will be able to preserve the
value of your investment at $1.00 per share.
- - SELECTION OF INVESTMENTS - The Adviser evaluates the risks and rewards
presented by all securities purchased by the Fund and how they advance the
Fund's investment objective. It's possible, however, that these evaluations
will prove to be inaccurate.
HOW THE FUND HAS PERFORMED
The bar chart and table below show how the Fund has performed in the past and
give some indication of the risk of investing in the Fund. Both assume that
all dividends and distributions are reinvested in the Fund. How the Fund has
performed in the past doesn't necessarily show how it will perform in the
future.
The Fund began operations on October 5, 1993 as a separate portfolio (the
Predecessor Fund) of The Shawmut Funds. On December 4, 1995, the Predecessor
Fund was reorganized as a new portfolio of Galaxy. Prior to the reorganization,
the Predecessor Fund offered and sold a single class of shares. In connection
with the reorganization, shareholders of the Predecessor Fund exchanged their
shares for Retail A Shares of the Fund. The returns for periods prior to
December 4, 1995 are for shares of the Predecessor Fund.
YEAR-BY-YEAR TOTAL RETURNS - CALENDAR YEARS
The bar chart shows how the performance of the Fund has varied from year to
year.
[Sidenote:]
Best quarter: 0.86% for the quarter ending June 30, 1995
Worst quarter: 0.39% for the quarter ending March 31, 1994
-22-
<PAGE>
[bar chart goes here]
<TABLE>
<CAPTION>
- ------------------ ------------------ --------------------- --------------------- ---------------------- ----------------------
1994 1995 1996 1997 1998 1999
- ------------------ ------------------ --------------------- --------------------- ---------------------- ----------------------
<S> <C> <C> <C> <C> <C>
2.15% 3.23% 2.78% 2.96% 2.79% 2.56%
- ------------------ ------------------ --------------------- --------------------- ---------------------- ----------------------
</TABLE>
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 5 years Since inception
- --------------------------- ------------------------ ------------------------ ------------------------
<S> <C> <C> <C>
Retail A Shares 2.56% 2.86% 2.71% (10/05/93)
- --------------------------- ------------------------ ------------------------ ------------------------
</TABLE>
To obtain the Fund's current 7-day yield, please call 1-877-BUY-GALAXY
(1-877-289-4252).
FEES AND EXPENSES OF THE FUND
There are no sales charges when you buy or sell Retail A Shares of the Fund. The
following table shows the fees and expenses you pay when you buy and hold shares
of the Fund.
Annual Fund operating expenses (expenses deducted from the Fund's assets)
<TABLE>
<CAPTION>
- ----------------------- ----------------------- ----------------------- ---------------------- -----------------------
Distribution (12b-1) Total Fund operating
Management fees fees Other expenses expenses
- ----------------------- ----------------------- ----------------------- ---------------------- -----------------------
<S> <C> <C> <C> <C>
Retail A Shares 0.40% None 0.25% 0.65%
- ----------------------- ----------------------- ----------------------- ---------------------- -----------------------
</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:
- - 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
-23-
<PAGE>
- - 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>
Retail A Shares $66 $208 $362 $810
- ----------------------- --------------------- -------------------- --------------------- --------------------
</TABLE>
-24-
<PAGE>
Galaxy New York Municipal Money Market Fund
THE FUND'S INVESTMENT OBJECTIVE
The Fund seeks to provide current income exempt from federal regular income tax
and New York State and New York City personal income tax, consistent with
relative stability of principal and liquidity.
THE FUND'S MAIN INVESTMENT STRATEGIES
The Fund normally invests at least 80% of its total assets in municipal
securities that pay interest which is exempt from federal regular income tax,
and at least 65% of its total assets in New York municipal securities, which are
securities issued by or on behalf of the State of New York and other government
issuers and that pay interest which is exempt from federal regular income tax
and New York State and New York City personal income tax. Under normal
conditions, the Fund will invest no more than 20% of its total assets in taxable
obligations, such as U.S. Government obligations, money market instruments and
repurchase agreements.
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.
THE MAIN RISKS OF INVESTING IN THE FUND
While money market funds are considered to be among the safest of all
investments, they are not risk free. Here are the main risks associated with an
investment in the Fund:
- - INTEREST RATE RISK - The yield paid by the Fund will vary with changes in
short-term interest rates.
- - CREDIT RISK - Although credit risk is very low because the Fund only invests
in high quality obligations, if an issuer fails to pay interest or repay
principal, the value of your investment could decline. The ability of a
state or local government issuer to make payments can be affected by many
factors, including economic conditions, the flow of tax revenues and changes
in the level of federal, state or local aid.
-25-
<PAGE>
- - LACK OF DIVERSIFICATION - The Fund is not diversified, which means that it
can invest a large percentage of its assets in a small number of issuers.
As a result, a change in the value of any one investment held by the Fund
may affect the overall value of the Fund more than it would affect a
diversified fund which holds more investments.
- - SINGLE STATE RISK - Because the Fund invests primarily in New York
municipal securities, the Fund's ability to achieve its investment
objective is dependent upon the ability of the issuers of New York
municipal securities to meet their continuing obligations for the payment
of principal and interest. New York State and New York City face long-term
economic problems that could seriously affect their ability and that of
other issuers of New York municipal securities to meet their financial
obligations. Other considerations affecting the Fund's investments in New
York municipal securities are summarized in the Statement of Additional
Information.
- - SHARE PRICE - There's no guarantee the Fund will be able to preserve the
value of your investment at $1.00 per share.
- - SELECTION OF INVESTMENTS - The Adviser evaluates the risks and rewards
presented by all securities purchased by the Fund and how they advance the
Fund's investment objective. It's possible, however, that these evaluations
will prove to be inaccurate.
HOW THE FUND HAS PERFORMED
The Fund had not commenced operations prior to the date of this prospectus. No
performance information is presented because the Fund has less than one full
calendar year of performance history.
FEES AND EXPENSES OF THE FUND
There are no sales charges when you buy or sell Retail A Shares of the Fund. The
following table shows the fees and expenses you may pay when you buy and hold
shares of the Fund.
Annual Fund operating expenses (expenses deducted from the Fund's assets)
<TABLE>
<CAPTION>
- ----------------------- ----------------- ------------------- ------------- --------------
Total Fund
Distribution Other operating
Management fees (12b-1) fees expenses expenses
- ----------------------- ----------------- ------------------- ------------- --------------
<S> <C> <C> <C> <C>
Retail A Shares 0.40% None 0.25%(1) 0.65%
- ----------------------- ----------------- ------------------- ------------- --------------
</TABLE>
(1) Other expenses are based on estimated amounts for the current fiscal
year.
-26-
<PAGE>
EXAMPLE
This example helps you compare the cost of investing in the Fund with the cost
of investing in other mutual funds. The example assumes:
- - you invest $10,000 for the periods shown
- - you reinvest all dividends and distributions in the Fund
- - you sell all your shares at the end of the periods shown
- - your investment has a 5% return each year
- - 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
- ----------------------- --------------------- --------------------
<S> <C> <C>
Retail A Shares $73 $227
- ----------------------- --------------------- --------------------
</TABLE>
-27-
<PAGE>
ADDITIONAL INFORMATION ABOUT RISK
The main risks associated with an investment in each of the Galaxy Money Market
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 Tax-Exempt Fund, Connecticut Municipal Money
Market Fund, Massachusetts Municipal Money Market Fund, and New York
Municipal Money Market Fund, 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 each Fund's total 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 goals. These
supplemental investment strategies, which are not considered to be main
investment strategies of the Fund - 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.
YEAR 2000 RISKS
Over the past several years, the Adviser and the Funds' other major service
providers expended considerable time and money in addressing the computer and
technology problems associated with the transition to the Year 2000. As a
result of those efforts, the Funds did not experience any material disruptions
in their operations as a result of the transition to the 21st century. The
Adviser and the Funds' other major service providers are continuing to
monitor the Year 2000 or Y2K problems, however, and there can be no assurances
that there will be no adverse impact to the Funds as a result of future
computer-related Y2K difficulties.
-28-
<PAGE>
INVESTOR GUIDELINES
The table below provides information as to which type of investor might want to
invest in each of the Galaxy Money Market 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 investment
professional for help in deciding which Fund is right for you.
<TABLE>
<CAPTION>
- ------------------------------------------------------- -----------------------------------------------------
Galaxy Fund May be best suited for...
- ------------------------------------------------------- -----------------------------------------------------
<S> <C>
Galaxy Money Market Fund investors who want a flexible and convenient way to
manage cash while earning money market returns
- ------------------------------------------------------- -----------------------------------------------------
Galaxy Government Fund investors who want a way to earn money market
returns with the extra margin of safety associated
with U.S. Government obligations
- ------------------------------------------------------- -----------------------------------------------------
Galaxy U.S. Treasury Fund investors who want a way to earn money market
returns from U.S. Treasury obligations that are
generally free from state and local taxes
- ------------------------------------------------------- -----------------------------------------------------
Galaxy Tax-Exempt Fund investors who want a way to earn money market
returns that are free from federal income tax
- ------------------------------------------------------- -----------------------------------------------------
Galaxy Connecticut Municipal Money Market Fund investors who want a way to earn money market
returns that are free from both regular federal
income tax and the Connecticut state income tax on
individuals, trusts and estates
- ------------------------------------------------------- -----------------------------------------------------
Galaxy Massachusetts Municipal Money Market Fund investors who want a way to earn money market returns
that are free from both regular federal income tax
and Massachusetts personal income tax
- ------------------------------------------------------- -----------------------------------------------------
Galaxy New York Municipal Money Market Fund investors who want a way to earn money market
returns that are free from both regular federal
income tax and New York State and New York City
personal income tax
- ------------------------------------------------------- -----------------------------------------------------
</TABLE>
[Sidenote:]
TAX-EQUIVALENT YIELD
One way to understand the tax advantages of a tax-exempt fund is to compare its
after-tax return to that of a taxable investment. For example, suppose a taxable
fund pays a return of 10%. If you're in the 36% federal income tax bracket, the
fund's return after taxes is 6.4%. When a tax-exempt fund pays a return of 10%,
you don't pay tax. So if you're in the 36% tax bracket that's the equivalent of
earning about 15.6% on a taxable fund. If you're in a low tax bracket, however,
it may not be helpful to invest in a tax-exempt fund if you can achieve a higher
after-tax return from a taxable investment.
-29-
<PAGE>
FUND MANAGEMENT
ADVISER
The Adviser, subject to the general supervision of Galaxy's Board of Trustees,
manages each Fund in accordance with its investment objective and policies,
makes decisions with respect to and places orders for, all purchases and sales
of 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. The New York Municipal Money Market Fund had not
commenced operations prior to the date of this prospectus. The Adviser is
entitled to receive advisory fees with respect to the New York Municipal
Money Market Fund at the annual rate of 0.40% of the first $750,000,000 of
the Fund's average daily net asset plus 0.35% of average daily net assets in
excess of $750,000,000. The fee shown below with respect to the New York
Municipal Money Market Fund is that which is currently in effect.
<TABLE>
<CAPTION>
- --------------------------------------------------------- ----------------------------------
Management fee as a
Fund % of average net assets
- --------------------------------------------------------- ----------------------------------
<S> <C>
Money Market 0.36%
- --------------------------------------------------------- ----------------------------------
Government 0.39%
- --------------------------------------------------------- ----------------------------------
U.S. Treasury 0.39%
- --------------------------------------------------------- ----------------------------------
Tax-Exempt 0.40%
- --------------------------------------------------------- ----------------------------------
Connecticut Municipal Money Market 0.36%
- --------------------------------------------------------- ----------------------------------
Massachusetts Municipal Money Market 0.37%
- --------------------------------------------------------- ----------------------------------
New York Municipal Money Market 0.40%
- --------------------------------------------------------- ----------------------------------
</TABLE>
-30-
<PAGE>
HOW TO INVEST IN THE FUNDS
All of the Funds offer Retail A Shares. The Money Market Fund also offers
Retail B Shares.
ABOUT SALES CHARGES
There are no sales charges (sometimes called front-end loads) when you buy
either Retail A Shares or Retail B Shares of a Fund. If you buy Retail B Shares
of the Money Market Fund, you may have to pay a contingent deferred sales charge
(sometimes called a back-end load or CDSC) if you sell your shares within six
years of buying them. The following table shows the schedule of CDSC charges:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------ -------------------
You'll pay a
If you sell your shares CDSC of
- ------------------------------------------------------------------------------------------------ -------------------
<S> <C>
during the first year 5.00%
- ------------------------------------------------------------------------------------------------ -------------------
during the second year 4.00%
- ------------------------------------------------------------------------------------------------ -------------------
during the third year 3.00%
- ------------------------------------------------------------------------------------------------ -------------------
during the fourth year 3.00%
- ------------------------------------------------------------------------------------------------ -------------------
during the fifth year 2.00%
- ------------------------------------------------------------------------------------------------ -------------------
during the sixth year 1.00%
- ------------------------------------------------------------------------------------------------ -------------------
after the sixth year None
- ------------------------------------------------------------------------------------------------ -------------------
</TABLE>
For purposes of calculating the CDSC, all purchases made during a calendar month
are considered to be made on the first day of that month. The CDSC is based on
the value of the Retail B Shares on the date that they are sold or the original
cost of the shares, whichever is lower. To keep your CDSC as low as possible
each time you sell shares, Galaxy will first sell any shares in your account
that are not subject to a CDSC. If there are not enough of these, Galaxy will
sell those shares that have the lowest CDSC. There is no CDSC on Retail B Shares
that you acquire by reinvesting your dividends and distributions.
There's no CDSC when Retail B Shares of the Money Market Fund are sold because
of the death or disability of a shareholder and in certain other circumstances
such as exchanges. Ask your investment professional or Galaxy's distributor, or
consult the SAI, for other instances in which the CDSC is waived. To contact
Galaxy's distributor, call 1-877-BUY-GALAXY (1-877-289-4252).
-31-
<PAGE>
DISTRIBUTION AND SHAREHOLDER SERVICE FEES
Retail A Shares of the Funds can pay shareholder service fees at an annual rate
of up to 0.50% of each Fund's Retail A Share assets. The Funds do not intend to
pay more than 0.10% in shareholder service fees with respect to Retail A Shares
during the current fiscal year.
Retail B Shares of the Money Market Fund can pay distribution and shareholder
service (12b-1) fees at an annual rate of up to 1.15% of the Fund's Retail B
Share assets. The Fund does not intend to pay more than 0.75% in distribution
and shareholder service (12b-1) fees during the current fiscal year. Galaxy has
adopted a plan under Rule 12b-1 that allows the Money Market Fund to pay fees
from its Retail B Share assets for selling and distributing Retail B Shares and
for providing services to shareholders. 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.
CONVERTING RETAIL B SHARES TO RETAIL A SHARES
Six years after you buy Retail B Shares of the Money Market Fund, they will
automatically convert to Retail A Shares of the Fund. This allows you to benefit
from the lower annual expenses of Retail A Shares.
[Sidenote:]
Retail B Shares of the Money Market Fund have higher operating expenses than
Retail A Shares of the Fund and may not be appropriate for investors who do not
plan to exchange their Retail B Shares for Retail B Shares of another Galaxy
Fund.
[Sidenote:]
NET ASSET VALUE
The price you pay for your shares is based on the net asset value per share
(NAV). It's the value of a Fund's assets attributable to Retail A Shares or
Retail B Shares, minus the value of the Fund's liabilities attributable to
Retail A Shares or Retail B Shares, divided by the number of Retail A Shares or
Retail B Shares held by investors.
BUYING, SELLING AND EXCHANGING SHARES
You can buy and sell Retail A Shares and Retail B Shares of the Funds on any
day that the Funds are open for business, which is any day the New York Stock
Exchange is open. The New York Stock Exchange is generally open for trading
every Monday through Friday, except for national holidays.
If your order to buy shares is received and accepted by Galaxy's distributor by
11:00 a.m. (Eastern time) on a business day, the price you pay will be the net
asset value (NAV) per share next determined (and you'll receive that day's
dividend) if Galaxy's custodian receives the purchase price in immediately
available funds by 11:00 a.m. that day. If your order to purchase shares is
received and accepted by Galaxy's distributor after 11:00 a.m. (Eastern time)
but before
-32-
<PAGE>
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 the next day) if
Galaxy's custodian receives the purchase price in immediately available funds
by 4:00 p.m. 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, less any applicable CDSC in the case of Retail B Shares of
the Money Market Fund. NAV is determined on each day the New York Stock
Exchange is open for trading as of 11:00 a.m. (Eastern time) and at the close
of regular trading (usually 4:00 p.m. Eastern time).
The Funds' assets are valued at amortized cost, which is approximately equal to
market value.
HOW TO BUY SHARES
You can buy shares through your financial institution or directly from Galaxy's
distributor by calling 1-877-BUY-GALAXY (1-877-289-4252). A broker or agent who
places orders on your behalf may charge you a separate fee for their services.
BUYING BY MAIL
Complete an account application and mail it, together with a check payable to
each Fund in which you want to invest, to:
The Galaxy Fund
P.O. Box 6520
Providence, RI 02940-6520
To make additional investments, send your check to the address above along with
one of the following:
- - The detachable slip that's included with your Galaxy statement or your
confirmation of a prior transaction
- - A letter stating the amount of your investment, the name of the Fund you
want to invest in, and your account number
If your check is returned because of insufficient funds, we'll cancel your
order.
[Sidenote:]
MINIMUM INVESTMENT AMOUNTS
The minimum initial investment to open a Fund account is:
- - $2,500 for regular accounts
- - $500 for retirement plan accounts such as IRA, SEP and Keogh Plan accounts
- - $100 for college savings accounts, including Education IRA accounts
-33-
<PAGE>
There is generally no minimum initial investment if you participate in the
Automatic Investment Program or in a salary reduction retirement plan such as a
SIMPLE IRA or 401(k). You generally can make additional investments for as
little as $100. See GALAXY INVESTOR PROGRAMS below for information on other
minimums for initial and additional investments.
Usually, you must keep at least $250 in your account other than retirement plan
accounts. If your account falls below $250 because you sell or exchange shares,
Galaxy may redeem your shares and close your account. Galaxy will give you 60
days' notice in writing before closing your account.
BUYING BY WIRE
To make an initial or additional investment by wire, send U.S. funds through the
Federal Reserve System to Fleet National Bank as agent for Galaxy's distributor.
You should wire money and registration instructions to:
Fleet National Bank
75 State Street
Boston, MA 02109
ABA #0110-0013-8
DDA #79673-5702
Ref: The Galaxy Fund
(Account number)
(Account registration)
Before making an initial investment by wire, you must complete an account
application and send it to The Galaxy Fund, P.O. Box 6520, Providence, RI
02940-6520. Your order will not be effected until the completed account
application is received by Galaxy. Call Galaxy's distributor at 1-877-BUY-GALAXY
(1-877-289-4252) for an account application.
Your financial institution may charge you a fee for sending funds by wire.
CUSTOMERS OF FINANCIAL INSTITUTIONS
If you are a customer of a financial institution such as a bank, savings and
loan association or broker-dealer, including a financial institution affiliated
with the Adviser, you should place your order through your financial
institution. Your financial institution is responsible for sending your order to
Galaxy's distributor and wiring the money to Galaxy's custodian. For details,
please contact your financial institution.
-34-
<PAGE>
HOW TO SELL SHARES
You can sell your shares in several ways: by mail, by telephone, by wire, or
through your financial institution.
SELLING BY MAIL
Send your request in writing to:
The Galaxy Fund
P.O. Box 6520
Providence, RI 02940-6520
You must include the following:
- - The name of the Fund
- - The number of shares or the dollar amount you want to sell
- - Your account number
- - Your Social Security number or tax identification number
- - The signatures of each registered owner of the account (the signatures must
match the names on the account registration).
Additional documents may be required for certain types of shareholders, such as
corporations, partnerships, executors, trustees, administrators or guardians.
[Sidenote:]
SIGNATURE GUARANTEES
When selling your shares by mail or by phone, you must have your signature
guaranteed if:
- - you're selling shares worth more than $50,000,
- - you want Galaxy to send your money to an address other than the address on
your account, unless your money is transferred to a successor custodian,
- - you want Galaxy to send your money to the address on your account that's
changed within the last 30 days, or
- - you want Galaxy to make the check payable to someone else.
Your signature must be guaranteed by a bank that's a member of the FDIC, a trust
company, a member firm of a national securities exchange or any other eligible
institution. A notarized signature is not sufficient.
SELLING BY PHONE
You can sell shares by calling Galaxy's distributor at 1-877-BUY-GALAXY
(1-877-289-4252) unless you tell Galaxy on the account application or in writing
that you don't want this privilege.
-35-
<PAGE>
If you have difficulty getting through to Galaxy because of unusual market
conditions, consider selling your shares by mail or wire.
SELLING BY WIRE
Notify Galaxy's distributor by phone or wire that you wish to sell shares and
have the sale proceeds wired to your account at any financial institution in the
U.S. To be eligible to use this privilege, you must complete the appropriate
section on the account application or notify Galaxy in writing (with a signature
guarantee). Your sale proceeds must be more than $1,000.
The sale proceeds must be paid to the same bank and account you named on your
application or in your written instructions.
CUSTOMERS OF FINANCIAL INSTITUTIONS
Please contact your financial institution for information on how to sell your
shares. The financial institution is responsible for sending your order to
Galaxy's distributor and for crediting your account with the proceeds. Galaxy
doesn't charge a fee for wiring sale proceeds to your financial institution, but
your financial institution may charge you a fee.
HOW TO EXCHANGE SHARES
You may exchange Retail A Shares of a Fund having a value of at least $100 for
Retail A Shares of any other Galaxy Fund or for shares of any other Fund that's
managed by the Adviser or any of its affiliates in which you have an existing
account. Unless you qualify for a waiver, you'll have to pay a sales charge when
you exchange Retail A Shares of a Fund for Retail A Shares of another Galaxy
Fund that imposes a sales charge on purchases.
You may exchange Retail B Shares of the Money Market Fund for Retail B Shares of
any other Galaxy Fund. You won't pay a contingent deferred sales charge when you
exchange your Retail B Shares. However, when you sell the Retail B Shares you
acquired in the exchange, you'll pay a contingent deferred sales charge based on
the date you bought the Retail B Shares which you exchanged.
TO EXCHANGE SHARES:
- - call Galaxy's distributor or use the InvestConnect voice response line at
1-877-BUY-GALAXY (1-877-289-4252)
-36-
<PAGE>
- - send your request in writing to:
The Galaxy Fund
P.O. Box 6520
Providence, RI 02940-6520
- - ask your financial institution.
Galaxy doesn't charge any fee for making exchanges but your financial
institution might do so. You are generally limited to three exchanges per year.
Galaxy may change or cancel the exchange privilege by giving 60 days' advance
written notice to shareholders.
OTHER TRANSACTION POLICIES
If Galaxy doesn't receive full payment for your order to buy shares within three
business days of the order date, Galaxy won't accept your order. Galaxy will
advise you if this happens and return any payment it may eventually receive. You
can only invest in shares of the Funds that are legally available in your state.
Galaxy may refuse any order to buy shares. Galaxy doesn't issue a certificate
when you buy shares but it does keep a record of shares issued to investors.
Galaxy may refuse your order to sell or exchange shares by wire or telephone if
it believes it is advisable to do so. Galaxy or its distributor may change or
cancel the procedures for selling or exchanging shares by wire or telephone at
any time without notice.
If you sell or exchange shares by telephone, you may be responsible for any
fraudulent telephone orders as long as Galaxy has taken reasonable precautions
to verify your identity, such as requesting information about the way in which
your account is registered or about recent transactions in your account.
Galaxy normally pays you cash when you sell your shares, but it has the right to
deliver securities owned by a Fund instead of cash. When you sell these
securities, you'll pay brokerage charges.
Sales proceeds are normally sent to you within three business days but Galaxy
reserves the right to send sales proceeds within seven days if sending proceeds
earlier could adversely affect a Fund.
If any shares that you're selling are part of an investment you've paid for with
a personal check, Galaxy will delay sending your sales proceeds until the check
clears, which can take up to 15 days from the purchase date.
Galaxy reserves the right to vary or waive any minimum investment requirement.
-37-
<PAGE>
DIVIDENDS, DISTRIBUTIONS AND TAXES
Each Fund declares dividends from net investment income daily and pays them
within five business days after the end of each month. Although the Funds do not
expect to realize net long-term capital gains, any capital gains realized will
be distributed at least annually. Dividends and distributions are paid in cash
unless you indicate on the account application or in a letter to Galaxy that you
want to have dividends and distributions reinvested in additional shares.
MONEY MARKET, GOVERNMENT AND U.S. TREASURY FUNDS
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 federal income tax on
these distributions regardless of whether they are paid in cash or reinvested
in additional shares. The one major exception to these tax principles is that
distributions on shares held in an IRA (or other tax-qualified plan) will not
be currently taxable.
TAX-EXEMPT, CONNECTICUT MUNICIPAL MONEY MARKET, MASSACHUSETTS MUNICIPAL MONEY
MARKET AND NEW YORK MUNICIPAL MONEY MARKET FUNDS
Distributions by these Funds will generally consist of dividends derived from
interest earned on exempt securities, and these "exempt-interest dividends" will
be exempt income for shareholders for federal income tax purposes. It is
possible, depending upon a Fund's investments, that a portion of the Fund's
distributions could be taxable to shareholders as ordinary income or capital
gains, but none of these Funds expects that this will be the case.
Interest on indebtedness incurred by a shareholder to purchase or carry shares
of these Funds generally will not be deductible for federal income tax purposes.
You should note that a portion of the exempt-interest dividends paid by one or
more of these Funds may constitute an item of tax preference for purposes of
determining federal alternative minimum tax liability. Exempt-interest dividends
will also be considered along with other adjusted gross income in determining
whether any Social Security or railroad retirement payments received by you are
subject to federal income taxes.
CONNECTICUT MUNICIPAL MONEY MARKET FUND
This Fund intends to comply with certain state tax requirements so that its
dividends will generally be exempt from the Connecticut state income tax on
individuals, trusts and estates ("CSIT"). However, dividends, if any, derived
from interest or long-term capital gains on securities other than Connecticut
municipal securities, or from any short-term capital gains, will be subject
to the CSIT.
-38-
<PAGE>
MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
This Fund intends to comply with certain state tax requirements so that its
dividends will generally be exempt from Massachusetts personal income tax.
However, dividends, if any, derived from interest on securities other than
Massachusetts municipal securities, or from any capital gains, will be subject
to Massachusetts personal income tax.
NEW YORK MUNICIPAL MONEY MARKET FUND
This Fund intends to comply with certain state tax requirements so that its
dividends will be generally exempt from New York State and New York City
personal income tax. However, dividends, if any, derived from interest on
securities other than New York municipal securities, or from any capital
gains, will be subject to New York State and New York City personal income
tax.
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 the state.
MISCELLANEOUS
The foregoing is only a summary of certain tax considerations under current law,
which may be subject to change in the future. You should consult your tax
adviser for further information regarding federal, state, local and/or foreign
tax consequences relevant to your specific situation.
-39-
<PAGE>
GALAXY INVESTOR PROGRAMS
RETIREMENT PLANS
Retail A Shares and Retail B Shares of the Funds are available for purchase in
connection with any of the following retirement plans:
- - Individual Retirement Arrangements (IRAs), including Traditional, Roth,
Rollover and Education IRAs
- - Simplified Employee Pension Plans (SEPs)
- - Keogh money purchase and profit sharing plans
- - Salary reduction retirement plans set up by employers for their employees,
which are qualified under Sections 401(k) and 403(b) of the Internal
Revenue Code
- - SIMPLE IRA plans which are qualified under Section 408(p) of the Internal
Revenue Code
For information about eligibility requirements and other matters concerning
these plans and to obtain an application, call Galaxy's distributor at
1-877-BUY-GALAXY (1-877-289-4252).
OTHER PROGRAMS
It's also easy to buy or sell shares of the Funds by using one of the programs
described below. Just tell Galaxy the amount and how frequently you want to buy
or sell shares and Galaxy does the rest. For further information on any of these
programs, call Galaxy's distributor at 1-877-BUY-GALAXY (1-877-289-4252) or your
financial institution.
AUTOMATIC INVESTMENT PROGRAM
You can make automatic investments from your bank account every month or every
quarter. You can choose to make your investment on any day of the month or
quarter. The minimum investment is $50 a month or $150 a quarter except for
Education IRAs, in which case the minimum investment is $40 a month or $125 a
quarter.
PAYROLL DEDUCTION PROGRAM
You can make regular investments from your paycheck. The minimum investment is
$25 per pay period. Send a completed Galaxy Payroll Deduction Application to
your employer's payroll department. They'll arrange to have your investment
deducted from your paycheck.
COLLEGE INVESTMENT PROGRAM
The minimum for initial and additional investments through the College
Investment Program is $100 unless you participate in the Automatic Investment
Program, in which case the minimum for initial and additional investments is
$50. You can also save for college by opening an Education IRA account. The
minimum for initial and additional investments in an Education
-40-
<PAGE>
IRA is $100 unless you participate in the Automatic Investment Program, in which
case the minimum for initial and additional investments is $40.
CHECKWRITING
You can sign up for Galaxy's checkwriting privilege by completing the signature
card that accompanies the account application or by writing or calling Galaxy's
distributor at 1-877-BUY-GALAXY (1-877-289-4252) to obtain a signature card.
There is no limit on the number of checks you can write each month, although
each check must be in an amount of at least $250. Galaxy may impose a fee for
use of the checkwriting privilege. Please note that you can't write a check to
close your account.
DIRECT DEPOSIT PROGRAM
This program lets you deposit your Social Security payments in your Fund account
automatically. There's no minimum deposit. You can cancel the program by
notifying the Social Security Administration in writing.
SYSTEMATIC WITHDRAWAL PLAN
You can make regular withdrawals from your Fund account every month, every
quarter, every six months or once a year. You need a minimum account balance
of $10,000 to participate in the plan. No CDSC will be charged on withdrawals
of Retail B Shares of the Money Market Fund made through the plan that don't
annually exceed 12% of your account's value.
You may cancel your participation in any of these programs, other than the
Direct Deposit Program, by writing to Galaxy at:
The Galaxy Fund
P.O. Box 6520
Providence, RI 02940-6520
Please allow at least five days for the cancellation to be processed.
-41-
<PAGE>
HOW TO REACH GALAXY
THROUGH YOUR FINANCIAL INSTITUTION
Your financial institution can help you buy, sell or exchange shares and can
answer questions about your account.
GALAXY SHAREHOLDER SERVICES
Call Galaxy's distributor at 1-877-BUY-GALAXY (1-877-289-4252), Monday through
Friday, 8 a.m. to 6 p.m. (Eastern time), for help from a Galaxy representative.
INVESTCONNECT
InvestConnect is Galaxy's Shareholder Voice Response System. Call
1-877-BUY-GALAXY (1-877-289-4252) from any touch-tone phone for automated access
to account information and current Fund prices and performance, or to place
orders to sell or exchange shares. It's available 24 hours a day, seven days a
week.
If you live outside the United States, you can contact Galaxy by calling
1-508-871-4121.
THE INTERNET
Please visit Galaxy's Web site at:
www.galaxyfunds.com
[Sidenote:]
HEARING IMPAIRED
Galaxy also offers a TDD service for the hearing impaired. Just call
1-800-696-6515, 24 hours a day, seven days a week.
-42-
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights tables on the following pages will help you
understand the financial performance for the Funds' Retail A Shares and/or
Retail B Shares for the past five years (or the period since a particular
Fund began operations or a particular class of shares was first offered).
Certain information reflects the financial performance of a single Retail A
Share or Retail B Share. The total returns in the tables represent the rate
that an investor would have earned (or lost) on an investment in Retail A
Shares and/or Retail B Shares of each Fund, assuming all dividends and
distributions were reinvested. The information for the fiscal year ended
October 31, 1999 has been audited by Ernst & Young LLP, independent auditors,
whose report, along with the Funds' financial statements, are included in the
Funds' Annual Report and are incorporated by reference into the SAI. The
Annual Report and SAI are available free of charge upon request. The
information for the fiscal years ended October 31, 1998, 1997, 1996 and 1995
was audited by Galaxy's former auditors, PricewaterhouseCoopers LLP. No
financial highlights are presented for the New York Municipal Money Market
Fund because the Fund had not commenced operations prior to the date of this
prospectus.
As discussed above in "Risk/return summary - Connecticut Municipal Money Market
Fund," prior to December 4, 1995, the predecessor to the Connecticut Municipal
Money Market Fund (Predecessor Fund) offered and sold two classes of shares,
Investment Shares and Trust Shares. Investment Shares of the Predecessor Fund
were similar to the Retail A Shares which the Connecticut Municipal Money Market
Fund currently offers. Accordingly, Trust Shares of the Predecessor Fund have
not been included in the financial highlights table for the Connecticut
Municipal Money Market Fund set forth below.
-43-
<PAGE>
Galaxy Money Market Fund
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
For the Year Ending October 31,
--------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
Retail A Retail B Retail A Retail B Retail A Retail B Retail A Retail A
Shares Shares Shares Shares Shares Shares(2) Shares Shares(1)
------ ------ ------ ------ ------ --------- ------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period......................... $ 1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $ 1.00
-------- ----- ----- ----- ----- ----- ----- --------
Income from investment operations:
Net investment income(3)......... 0.04 0.04 0.05 0.04 0.05 0.03 0.05 0.05
Net realized and unrealized gain
(loss) on investments....... -- -- -- -- -- -- -- --
Total from investment
operations................ 0.04 0.04 0.05 0.04 0.05 0.03 0.05 0.05
Less dividends:
Dividends from net investment
income...................... (0.04) (0.04) (0.05) (0.04) (0.05) (0.03) (0.05) (0.05)
Dividends from net realized
capital gains............. -- -- -- -- -- -- -- --
Total dividends............. (0.04) (0.04) (0.05) (0.04) (0.05) (0.03) (0.05) (0.05)
Net increase (decrease) in net
asset value.................... -- -- -- -- -- -- -- --
Net asset value, end of period... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $1.00 $ 1.00 $ 1.00
------- ------- --------- ------- ---------- ---- ---------- --------
Total return(4)............... 4.54% 3.85% 5.04% 4.33% 4.93% 2.66%(5) 4.78% 5.23%
Ratios/supplemental data:
Net assets, end of
period (000's) $2,434,662 $ 2,485 $2,139,213 $l,607 $1,877,889 $ 749 $1,159,312 $580,762
Ratios to average net assets:
Net investment income including
reimbursement/waiver 4.45% 3.81% 4.94% 4.26% 4.85% 4.27%(6) 4.67% 5.12%
Operating expenses including
reimbursement/waiver........ 0.65% 1.29% 0.67% 1.35% 0.69% 1.38% 0.77% 0.74%
Operating expenses excluding
reimbursement/waiver........ 0.69% 1.41% 0.71% 1.39% 0.73% 1.42%(6) 0.80% 0.76%
--------------------
</TABLE>
(1) Prior to November 1, 1994, the Fund offered a single series of shares. As
of such date, the existing series of shares was designated as Retail Shares
(now designated Retail A shares) and the Fund began issuing a second series
of shares designated as Trust Shares.
(2) The Fund began offering Retail B Shares on March 6, 1997.
(3) Net investment income per share for Retail A Shares before
reimbursement/waiver of fees by the Adviser and/or the Fund's administrator
for the years ended October 31, 1999, 1998, 1997, 1996 and 1995 was $0.04,
$0.05, $0.05, $0.05 and $0.05, respectively. Net investment income per
share for Retail B Shares before reimbursement/waiver of fees by the
Adviser and/or the Fund's administrator for the years ended October 31,
1999 and 1998 and the period ended October 31, 1997 was $0.04, $0.04 and
$0.03, respectively.
(4) Calculation does not include the effect of any sales charge for Retail B
Shares.
(5) Not annualized.
(6) Annualized.
-44-
<PAGE>
Galaxy Government Fund
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
For the Year Ending October 31,
---------------------------------------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
Retail A Retail A Retail A Retail A Retail A
Shares Shares Shares Shares Shares(1)
------ ------ ------ ------ ---------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------ ------ ------ ------
Income from investment operations:
Net investment income(2)....... 0.04 0.05 0.05 0.05 0.05
Net realized and unrealized
gain (loss) on investments.. -- -- -- -- --
Total from investment
operations................. 0.04 0.05 0.05 0.05 0.05
Less dividends:
Dividends from net investment
income...................... (0.04) (0.05) (0.05) (0.05) (0.05)
Dividends from net realized
capital gains............... -- -- -- -- --
Total dividends............ (0.04) (0.05) (0.05) (0.05) (0.05)
Net increase (decrease) in net
asset value................. -- -- -- -- --
Net asset value, end of
period...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- --------- ---------
Total return................... 4.39% 4.94% 4.85% 4.72% 5.20%
Ratios/supplemental data:
Net assets, end of period (000's) $348,758 $352,799 $350,513 $326,411 $320,795
Ratios to average net assets:
Net investment income including
reimbursement/waiver........ 4.32% 4.84% 4.74% 4.62% 5.11%
Operating expenses including
reimbursement/waiver........ 0.69% 0.70% 0.71% 0.75% 0.73%
Operating expenses excluding
reimbursement/waiver........ 0.71% 0.71% 0.72% 0.76% 0.74%
--------------------
</TABLE>
(1) Prior to November 1, 1994, the Fund offered a single series of shares. As
of such date, the existing series of shares was designated as Retail Shares
(now designated Retail A Shares) and the Fund began issuing a second series
of shares designated as Trust Shares.
(2) Net investment income per share for Retail A Shares before
reimbursement/waiver of fees by the Adviser and/or the Fund's administrator
for the years ended October 31, 1999, 1998, 1997, 1996 and 1995 was $0.04,
$0.05, $0.05, $0.05 and $0.05, respectively.
-45-
<PAGE>
Galaxy U.S. Treasury Fund
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
For the Year Ending October 31,
---------------------------------------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
Retail A Retail A Retail A Retail A Retail A
Shares Shares Shares Shares Shares(1)
------ ------ ------ ------ ---------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ ------
Income from investment
operations:
Net investment income(2)....... 0.04 0.05 0.05 0.05 0.05
Net realized and unrealized
gain (loss) on investments.. -- -- -- -- --
Total from investment
operations................ 0.04 0.05 0.05 0.05 0.05
Less dividends:
Dividends from net investment
income...................... (0.04) (0.05) (0.05) (0.05) (0.05)
Dividends from net realized
capital gains............... -- -- -- -- --
Total dividends............ (0.04) (0.05) (0.05) (0.05) (0.05)
Net increase (decrease) in net
asset value.................... -- -- -- -- --
Net asset value, end of
period......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Total return................... 4.14% 4.73% 4.67% 4.63% 4.99%
Ratios/supplemental data:
Net assets, end of
period (000's) $584,364 $559,053 $585,969 $443,230 $318,621
Ratios to average net assets:
Net investment income including
reimbursement/waiver....... 4.06% 4.63% 4.58% 4.53% 4.90%
Operating expenses including
reimbursement/waiver....... 0.67% 0.68% 0.69% 0.69% 0.73%
Operating expenses excluding
reimbursement/waiver....... 0.67% 0.68% 0.70% 0.69% 0.73%
--------------------
</TABLE>
(1) Prior to November 1, 1994, the Fund offered a single series of shares. As
of such date, the existing series of shares was designated as Retail Shares
(now designated Retail A Shares) and the Fund began issuing a second series
of shares designated as Trust Shares.
(2) Net investment income per share for Retail A Shares before
reimbursement/waiver of fees by the Adviser and/or the Fund's administrator
for the years ended October 31, 1999, 1998, 1997, 1996 and 1995 was $0.04,
$0.05, $0.05, $0.05 and $0.05, respectively.
-46-
<PAGE>
Galaxy Tax-Exempt Fund
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
For the Year Ending October 31,
-------------------------------------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
Retail A Retail A Retail A Retail A Retail A
Shares Shares Shares Shares Shares(1)
------ ------ ------ ------ --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ ------
Income from investment
operations:
Net investment income(2)....... 0.02 0.03 0.03 0.03 0.03
Net realized and unrealized
gain (loss) on investments.. -- -- -- -- --
Total from investment
operations................ 0.02 0.03 0.03 0.03 0.03
Less dividends:
Dividends from net investment
income...................... (0.02) (0.03) (0.03) (0.03) (0.03)
Dividends from net realized
capital gains............... -- -- -- -- --
Total dividends............ (0.02) (0.03) (0.03) (0.03) (0.03)
Net increase (decrease) in net
asset value.................... -- -- -- -- --
Net asset value, end of
period......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Total return................... 2.53% 2.89% 2.95% 2.82% 3.16%
Ratios/supplemental data:
Net assets, end of
period (000's) $160,057 $164,340 $151,907 $117,548 $127,056
Ratios to average net assets:
Net investment income including
reimbursement/waiver........ 2.51% 2.85% 2.92% 2.78% 3.12%
Operating expenses including
reimbursement/waiver........ 0.66% 0.67% 0.68% 0.68% 0.68%
Operating expenses excluding
reimbursement/waiver........ 0.66% 0.67% 0.69% 0.69% 0.71%
--------------------
</TABLE>
(1) Prior to November 1, 1994, the Fund offered a single series of shares. As
of such date, the existing series of shares was designated as Retail Shares
(now designated Retail A Shares) and the Fund began issuing a second series
of shares designated as Trust Shares.
(2) Net investment income per share for Retail A Shares before
reimbursement/waiver of fees by the Adviser and/or the Fund's administrator
for the years ended October 31, 1999, 1998, 1997, 1996 and 1995 was $0.02,
$0.03, $0.03, $0.03 and $0.03, respectively.
-47-
<PAGE>
Galaxy Connecticut Municipal Money Market Fund
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
For the Year Ending October 31,
--------------------------------------------------------------------
1999 1998 1997 1996(1) 1995
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ ------
Income from investment
operations:
Net investment income(2)....... 0.02 0.03 0.03 0.03 0.03
Net realized and unrealized
gain (loss) on investments.. -- -- -- -- --
Total from investment
operations................ 0.02 0.03 0.03 0.03 0.03
Less dividends:
Dividends from net investment
income...................... (0.02) (0.03) (0.03) (0.03) (0.03)
Dividends from net realized
capital gains............... -- -- -- -- --
Total dividends............ (0.02) (0.03) (0.03) (0.03) (0.03)
Net increase (decrease) in net
asset value.................... -- -- -- -- --
Net asset value, end of
period......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- --------
Total return(3)................ 2.47% 2.87% 2.94% 2.83% 2.94%
Ratios/supplemental data:
Net assets, end of
period (000's) $243,051 $165,186 $137,095 $110,544 $71,472
Ratios to average net assets:
Net investment income including
reimbursement/waiver........ 2.44% 2.83% 2.91% 2.79% 2.88%
Operating expenses including
reimbursement/waiver........ 0.62% 0.62% 0.60% 0.64% 0.82%
Operating expenses excluding
reimbursement/waiver........ 0.65% 0.65% 0.65% 0.73% 1.29%
- ----------------------------
</TABLE>
(1) The Fund commenced operations on October 4, 1993 as a separate investment
portfolio (the "Predecessor Fund") of The Shawmut Funds. On December 4,
1995, the Predecessor Fund was reorganized as a new portfolio of Galaxy
with a single series of shares. Prior to the reorganization, the
Predecessor Fund offered and sold two series of shares, Investment Shares
and Trust Shares. In connection with the reorganization, the shareholders
of the Predecessor Fund exchanged shares of each series for shares in the
Galaxy Connecticut Municipal Money Market Fund.
(2) Net investment income per share before reimbursement/waiver of fees by the
Adviser and/or the Fund's administrator for the fiscal years ended
October 31, 1999, 1998, 1997 and 1996 were $0.02, $0.03, $0.03 and $0.03,
respectively. Net investment income per share before reimbursement/waiver
of fees by the Adviser and/or other parties for the fiscal year ended
October 31, 1995 was $0.03 (unaudited).
(3) Calculation does not include the effect of any sales charge for Investment
Shares of the Predecessor Fund.
-48-
<PAGE>
Galaxy Massachusetts Municipal Money Market Fund
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
For the Year Ending October 31,
------------------------------------------------------------------
1999 1998 1997 1996(1) 1995
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- ------- ------- -------
Income from investment
operations:
Net investment income(2)....... 0.02 0.03 0.03 0.03 0.03
Net realized and unrealized
gain (loss) on investments.. -- -- -- -- --
Total from investment
operations................ 0.02 0.03 0.03 0.03 0.03
Less dividends:
Dividends from net investment
income...................... (0.02) (0.03) (0.03) (0.03) (0.03)
Dividends from net realized
capital gains............... -- -- -- -- --
Total dividends............. (0.02) (0.03) (0.03) (0.03) (0.03)
Net increase (decrease) in net
asset value.................... -- -- -- -- --
Net asset value, end of
period......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- ------- ------- -------
Total return................... 2.50% 2.86% 2.92% 2.83% 3.21%
Ratios/supplemental data:
Net assets, end of
period (000's) $241,611 $127,922 $80,966 $47,066 $40,326
Ratios to average net assets:
Net investment income including
reimbursement/waiver........ 2.48% 2.81% 2.90% 2.78% 3.16%
Operating expenses including
reimbursement/waiver........ 0.62% 0.62% 0.61% 0.62% 0.57%
Operating expenses excluding
reimbursement/waiver........ 0.65% 0.68% 0.69% 0.83% 1.06%
- -----------------------------
</TABLE>
(1) The Fund commenced operations on October 5, 1993 as a separate investment
portfolio (the "Predecessor Fund") of The Shawmut Funds. On December 4,
1995, the Predecessor Fund was reorganized as a new portfolio of Galaxy.
Prior to the reorganization, the Predecessor Fund offered and sold one
series of shares. In connection with the reorganization, the shareholders
of the Predecessor Fund exchanged such shares for shares in the Galaxy
Massachusetts Municipal Money Market Fund.
(2) Net investment income per share before reimbursement/waiver of fees by the
Adviser and/or other parties for the years ended October 31, 1999, 1998,
1997, 1996 and 1995 was $0.02, $0.03, $0.03, and $0.03 (unaudited),
respectively.
-49-
<PAGE>
[Back Cover Page]
Where to find more information
You'll find more information about the Funds in the following documents:
ANNUAL AND SEMI-ANNUAL REPORTS
Galaxy's annual and semi-annual reports contain more information about each Fund
and a discussion about the market conditions and investment strategies that had
a significant effect on each Fund's performance during the last fiscal year.
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI contains detailed information about the Funds and their policies. By
law, it's incorporated by reference into (considered to be part of) this
prospectus.
You can get a free copy of these documents, request other information about the
Funds and make shareholder inquiries by calling Galaxy at 1-877-BUY-GALAXY
(1-877-289-4252) or by writing to:
The Galaxy Fund
P.O. Box 6520
Providence, RI 02940-6520
If you buy your shares through a financial institution, you may contact your
institution for more information.
You can write to the Securities and Exchange Commission (SEC) Public Reference
Section and ask them to mail you information about the Funds, including the SAI.
They'll charge you a fee for this service. You can also visit the SEC Public
Reference Room and copy the documents while you're there. For information about
the operation of the Public Reference Room, call the SEC.
Public Reference Section of the SEC
Washington, DC 20549- 0102
1-202-942-8090
Reports and other information about the Funds are also available on the EDGAR
Database on the SEC's Web site at http://www.sec.gov. Copies of this information
may also be obtained, after paying a duplicating fee, by electronic request, to
the SEC's e-mail address at [email protected].
Galaxy's Investment Company Act File No. is 811-4636.
PROGALTR MM 3/1/00
