EASTCLIFF FUNDS INC, 497, 1996-07-12

EASTCLIFF FUNDS INC
497, 1996-07-12

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PRELIMINARY PROSPECTUS
DATED JULY 12, 1996

PROSPECTUS

EASTCLIFF FUNDS

Eastcliff Growth Fund

Eastcliff Total Return Fund

Eastcliff Regional Small
Capitalization Value Fund

NO-LOAD MUTUAL FUNDS

Information contained herein is subject to completion or amendment.A
Registration Statement relating to these securities has been filed with
the Securities and Exchange Commission. These securities may not be
sold nor may offers to buy be accepted prior to the time the
Registration Statement becomes effective. This Prospectus shall not
constitute an offer to sell or the solicitation of an offer buy nor
shall there be any sale of these securities in any State in which such
offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such State.

SUBJECT TO COMPLETION, DATED JULY 12, 1996

P R O S P E C T U S September --, 1996
EASTCLIFF FUNDS
900 SECOND AVENUE SOUTH
SUITE 300
MINNEAPOLIS, MINNESOTA 55402
(612) 336-1444

Eastcliff Funds, Inc. (the "Corporation") is an open-end, diversified management
investment company consisting of three separate portfolios, the Eastcliff Growth
Fund (the "Growth Fund"), the Eastcliff Total Return Fund (the "Total Return
Fund") and the Eastcliff Regional Small Capitalization Value Fund (the "Value
Fund") (collectively, the "Eastcliff Funds" or "Funds"), offering distinct
investment choices.

EASTCLIFF GROWTH FUND

The investment objective of the Growth Fund is to produce long-term growth of
capital. The Growth Fund seeks to achieve its objective by investing
principally in equity securities.

EASTCLIFF TOTAL RETURN FUND

EASTCLIFF REGIONAL SMALL CAPITALIZATION VALUE FUND

The investment objective of the Value Fund is to produce capital appreciation.
The Value Fund seeks to achieve its objective by investing principally in equity
securities of small capitalization companies headquartered in Minnesota, North
and South Dakota, Montana, Wisconsin, Michigan, Iowa, Nebraska, Colorado,
Illinois, Indiana and Ohio.

SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, INCLUDING RESOURCE TRUST COMPANY AND ANY OF ITS
AFFILIATES, NOR ARE THEY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. AN INVESTMENT IN THE FUNDS
INVOLVES INVESTMENT RISK, INCLUDING POSSIBLE LOSS OF PRINCIPAL, DUE TO
FLUCTUATIONS IN EACH FUND'S NET ASSET VALUE.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

This Prospectus sets forth concisely the information about the Funds that
prospective investors should know before investing. Investors are advised to
read this Prospectus and retain it for future reference. This Prospectus does
not set forth all of the information included in the Registration Statement and
Exhibits thereto which the Fund has filed with the Securities and Exchange
Commission. A Statement of Additional Information, dated September , 1996,
which is a part of such Registration Statement, is incorporated by reference in
this Prospectus. Copies of the Statement of Additional Information will be
provided without charge to each person to whom a Prospectus is delivered upon
written or oral request made by writing to the address or calling the telephone
number, stated above. All such requests should be directed to the attention of
the Corporation's Vice President.

EASTCLIFF FUNDS
TABLE OF CONTENTS

PAGE
----

Expense Information 1
Financial Highlights 2
Introduction 3
Investment Objectives and Policies 4
Investment Practices and Risks 6
Management of the Funds 9
Distribution Plan 12
Determination of Net Asset Value 13
Purchase of Shares 13
Redemption of Shares 14
Exchange Privilege 16
Dividend Reinvestment 16
Automatic Investment Plan 17
Systematic Withdrawal Plan 17
Individual Retirement Account and
Simplified Employee Pension Plan 18
Retirement Plan 18
Dividends, Distributions and Taxes 19
Brokerage Transactions 19
Capital Structure 19
Shareholder Reports 20
Performance Information 20
Share Purchase Application 21

EXPENSE INFORMATION

EASTCLIFF EASTCLIFF EASTCLIFF
SHAREHOLDER TRANSACTION EXPENSES GROWTH FUND TOTAL RETURN FUND VALUE FUND
----------- ------------------ ----------
Maximum Sales Load Imposed on
Purchases or Reinvested Dividends NONE NONE NONE
Deferred Sales Load NONE NONE NONE
Redemption Fee NONE*<F1> NONE*<F1> NONE*<F1>
Exchange Fee NONE NONE NONE

ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fees 1.00% 1.00% 1.00%
12b-1 Fees 0**<F2> 0**<F2> 0**<F2>
Other Expenses (after reimbursement) 0.30%***<F3> 0.30%***<F3> 0.30%***<F3>
------- ------- ------

TOTAL FUND OPERATING EXPENSES
(AFTER REIMBURSEMENT) 1.30%***<F3> 1.30%***<F3> 1.30%***<F3>
------ ------ ------
------ ------ ------

*<F1>A fee of $10.00 is charged for each wire redemption.
**<F2>Although each of the Funds has adopted a 12b-1 Plan, they have
determined not to pay any 12b-1 Fees during the fiscal year ending
June 30, 1997.
***<F3>Other Expenses and Total Fund Operating Expenses have been restated to
reflect the fact that the Adviser has voluntarily agreed to waive its advisory
fee and/or reimburse other operating expenses to the extent necessary to
ensure that Total Fund Operating Expenses do not exceed 1.30% of the average
daily net assets of each of the Growth Fund, the Total Return Fund and the
Value Fund. Total Fund Operating Expenses and Other Expenses for the Growth
Fund and the Total Return Fund for the fiscal year ended June 30, 1996 would
have been ---% and ---%, respectively, for the Growth Fund and ---% and ---%,
respectively, for the Total Return Fund, without the expense reimbursement.
Absent fee waivers and/or reimbursements, Total Fund Operating Expenses and
Other Expenses for the Value Fund for the fiscal year ending June 30, 1997
are estimated to be ---% and ---%, respectively.

EXAMPLE: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
An investor would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and (2) redemption at the end of each time period:

Eastcliff Growth Fund $13 $41 $71 $157
Eastcliff Total Return Fund $13 $41 $71 $157
Eastcliff Regional Small
Capitalization Value Fund $13 $41 N/A N/A

The purpose of the preceding table is to assist investors in understanding
the various costs that an investor in a particular Fund will bear, directly or
indirectly. They should not be considered to be a representation of past or
future expenses. Actual expenses may be greater or lesser than those shown. The
Annual Fund Operating Expenses for the Growth Fund and the Total Return Fund are
based on the actual expenses for the year ended June 30, 1996. The Annual Fund
Operating Expenses for the Value Fund are based on the estimated amounts set
forth above. The example assumes a 5% annual rate of return pursuant to
requirements of the Securities and Exchange Commission. This hypothetical rate
of return is not intended to be representative of past or future performance of
either of the Funds.

FINANCIAL HIGHLIGHTS
(Selected Data for each share of a Fund outstanding throughout each period)

The Financial Highlights for the Growth Fund and Total Return Fund should be
read in conjunction with the financial statements and notes thereto included in
the Funds' Annual Report to Shareholders. Further information about the
performance of the Growth Fund and the Total Return Fund is also contained in
the Funds' Annual Report to Shareholders, copies of which may be obtained
without charge upon request. Prior to December 17, 1987, the investment adviser
to the Total Return Fund was Resource Capital Advisers, Inc. and from December
17, 1987 until December 31, 1994 the investment adviser to the Total Return Fund
was Fiduciary Management, Inc. The Value Fund commenced operations on September
--, 1996.

FOR THE
EASTCLIFF GROWTH FUND YEAR FROM
JULY 1, 1995*<F4> THROUGH
JUNE 30, 1996
---------------------

PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning of period $10.00
Income from investment operations:
Net investment loss ---
Net realized and unrealized gains on investments ---
------
Total from investment operations ---
Less distributions:
Dividend from net investment income --
Distribution from net realized gains --
------
Total from distributions --
------
Net asset value, end of period $------
-------
-------
TOTAL INVESTMENT RETURN ---%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's $) ---
Ratio of expenses (after reimbursement)
to average net assets (a)<F5> 1.3%
Ratio of net investment loss to average net assets (b)<F6> (0.5%)
Portfolio turnover rate 8.9%

* <F4>Commencement of operations.
(a)<F5>Computed after giving effect to Adviser's expense limitation
undertaking. If the Growth Fund had paid all of its expenses, the ratio would
have been ----% for the year ended June 30, 1996.
(b)<F6>If the Growth Fund had paid all of its expenses, the ratio would have
been ---% for the year ended June 30, 1996.

FOR THE
EASTCLIFF TOTAL PERIOD FROM YEARS ENDED SEPTEMBER 30,*<F7>
RETURN FUND YEAR ENDED OCTOBER 1, 1994 --------------------------------------------------
JUNE 30, 1996 TO JUNE 30, 1995 1994 1993 1992 1991 1990 1989 1988 1987+<F8>
------------- ---------------- ----- ----- ----- ----- ------ ----- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value,
beginning of period $11.96 $11.92 $12.38 $11.96 $11.56 $9.47 $11.40 $9.88 $13.94 $10.00
Income from
investment operations:
Net investment income --- 0.14 0.15 0.19 0.13 0.28 0.33 0.24 0.06 --
Net realized and
unrealized gains (losses)
on investments (b)<F10> --- 0.71 0.12 1.28 1.27 2.30 (1.82) 1.40 (1.17) 3.94
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total from investment
operations --- 0.85 0.27 1.47 1.40 2.58 (1.49) 1.64 (1.11) 3.94
Less distributions:
Dividends from
net investment income (---) (0.14) (0.18) (0.15) (0.23) (0.36) (0.26) (0.11) -- --
Distributions from
net realized gains (---) (0.67) (0.55) (0.90) (0.77) (0.13) (0.18) (0.01) (2.95) --
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total from distributions (---) (0.81) (0.73) (1.05) (1.00) (0.49) (0.44) (0.12) (2.95) --
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value,
end of period $ $11.96 $11.92 $12.38 $11.96 $11.56 $9.47 $11.40 $9.88 $13.94
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
TOTAL INVESTMENT
RETURN ---% 10.4%(a)<F9>2.2% 13.4% 13.2% 28.7%(13.5%) 16.8% (3.0%) 55.7%(a)<F9>
RATIOS/SUPPLEMENTAL
DATA:
Net assets,
end of period (in 000's $) --- 15,806 2,478 2,683 2,631 2,225 2,055 2,728 1,041 220
Ratio of expenses
(after reimbursement)
to average net assets (c)<F11> ---% 1.5%(a)<F9>2.0% 2.0% 2.7% 2.0% 2.4% 3.0% 2.8% 3.0%(a)<F9>
Ratio of net investment income
(loss) to average net assets (d)<F12>---% 2.5%(a)<F9>1.3% 1.5% 1.2% 2.4% 2.8% 2.8% 1.7% (0.1%)(a)<F9>
Portfolio turnover rate ---% 89.4% 13.2% 28.0% 34.9% 38.0% 62.7% 27.2% 51.9% 169.7%

*<F7>The Total Return Fund changed its fiscal year end to June 30 effective June
30, 1995.
+<F8>For the period from December 23, 1986 (commencement of operations) to
September 30, 1987.
(a)<F9>Annualized.
(b)<F10>On a per share basis this amount may not agree with the net realized and
unrealized gains (losses) experienced on the portfolio securities for the
period because of the timing of sales and repurchases of the Total Return
Fund's shares in relation to fluctuating market values of the portfolio.
(c)<F11>Computed after giving effect to Adviser's expense limitation
undertaking. If the Total Return Fund had paid all of its expenses, the ratios
would have been, for the year ended June 30, 1996, for the period from
October 1, 1994 to June 30, 1995 and for the years ending September 30, 1994,
1993, 1992, 1991, 1990, 1989 and 1988 and for the period ending September 30,
1987, as follows: ---%, 2.6%(a), 3.0%, 2.8%, 3.3%, 3.2%, 3.1%, 4.4%, 11.8% and
12.1% (a), respectively.
(d)<F12>If the Total Return Fund had paid all of its expenses, the ratios would
have been, for the year ended June 30, 1996, for the period from October 1,
1994 to June 30, 1995 and for the years ending September 30, 1994, 1993, 1992,
1991, 1990, 1989 and 1988 and for the period ending September 30, 1987, as
follows: ---%, 1.4%(a), 0.2%, 0.8%, 0.6%, 1.3%, 2.1%, 1.4%, (7.4%) and (9.8%)
(a), respectively.

</TABLE>

INTRODUCTION

The Corporation is an open-end, diversified management investment company,
better known as a mutual fund, registered under the Investment Company Act of
1940 (the "Act"). It was incorporated under the laws of Wisconsin on May 23,
1986. The Corporation consists of three funds: Eastcliff Growth Fund, Eastcliff
Total Return Fund and Eastcliff Regional Small Capitalization Value Fund. Each
of the Funds obtains its assets by continuously selling its shares to the
public. Proceeds from such sales are invested by the particular Fund in
securities of other issuers. In this manner, each Fund: combines the resources
of many investors, with each individual investor having an interest in every one
of the securities owned by such Fund; provides each individual investor with
diversification by investing in the securities of many different issuers; and
furnishes experienced management to select and watch over its investments. As an
open-end investment company, the Corporation will redeem any of its outstanding
shares on demand of the owner at their next determined net asset value.
Registration of the Corporation under the Act does not involve supervision of
the Corporation's management or policies by the Securities and Exchange
Commission.

INVESTMENT OBJECTIVES AND POLICIES

EASTCLIFF GROWTH FUND

The investment objective of the Growth Fund is to produce long-term growth of
capital. The Growth Fund will seek to meet its objective by investing
principally in equity securities. The Growth Fund generally will invest in
domestic equity securities that are listed on a securities exchange or traded in
the over-the-counter market. Under normal market conditions, the Growth Fund
will invest at least 65% of its total assets in equity securities, which may
include common stocks, preferred stocks, convertible securities, and warrants.
In addition, at least 80% of the Growth Fund's total assets will be invested in
domestic securities and no more than 20% of the Growth Fund's total assets may
be invested in foreign securities. The Growth Fund may also invest in corporate
bonds, debentures and notes, debt securities issued or guaranteed by the United
States government and its agencies or instrumentalities, and short-term money
market instruments, such as U.S. Treasury Bills, bank certificates of deposit,
commercial paper, commercial paper master notes and repurchase agreements. There
can be no assurance that the Growth Fund will achieve its investment objective.
See "Investment Practices and Risks."

Investments may be made in well-known established companies, as well as in
newer and relatively unseasoned companies. Potential investments for the Growth
Fund are evaluated using fundamental analysis including criteria such as:
earnings outlook, cash flow, asset values, sustainability of product cycles,
expansion opportunities, management capabilities, industry outlook, competitive
position, and current price relative to long-term value of the company.
Investments generally will not be made on the basis of market timing techniques;
rather, it is anticipated that the Growth Fund will be relatively fully
invested at most times.

At times the Growth Fund's investment adviser or portfolio manager may invest
in put or call options, futures contracts and options on futures contracts to
hedge the Growth Fund's position in an individual security, provided that not
more than 5% of the Growth Fund's net assets will be invested in put or call
options and options on futures contracts and not more than 5% of its net assets
will be invested in futures contracts. Such investments will be effected as a
defensive measure during periods of anticipated market weakness and will not
result in leveraging the Growth Fund. A description of the foregoing securities
and the risks associated therewith is included in the Statement of Additional
Information.

EASTCLIFF TOTAL RETURN FUND

The investment objective of the Total Return Fund is to realize a combination
of capital appreciation and income which will result in the highest total
return, while assuming reasonable risks. The term "reasonable risks" refers to
the judgment of the Total Return Fund's investment adviser or portfolio manager
that investment in certain securities would not present an excessive risk of
loss in light of current and anticipated future general market and economic
conditions, trends in yields and interest rates, and fiscal and monetary
policies. Because the Total Return Fund's objective is to realize the highest
total return, the percentage of such Fund's portfolio invested to produce
capital appreciation may at any time be greater or lesser than the percentage of
such Fund's portfolio invested to produce current income. In seeking to attain
the Total Return Fund's objective, such Fund intends to invest in common stocks,
both growth and income-oriented, preferred stocks, securities convertible into
common stocks, warrants, corporate bonds, debentures and notes, debt securities
issued or guaranteed by the United States government and its agencies or
instrumentalities, short-term money market instruments, such as U.S. Treasury
Bills, bank certificates of deposit, commercial paper, commercial paper master
notes and repurchase agreements and securities of foreign issuers. There can be
no assurance that the Total Return Fund will achieve its investment objective.
See "Investment Practices and Risks."

No minimum or maximum percentage of the Total Return Fund's assets is
required to be invested in common stocks or any other type of security. At times
the Total Return Fund may be 100% invested in common stocks and other types of
equity securities. On the other hand when the Total Return Fund's investment
adviser or portfolio manager believes that in the light of current economic and
market conditions such Fund's investment objective may be more readily
attainable in debt securities, up to 100% of the Total Return Fund's assets may
be invested in such securities. Among the economic and market conditions
considered by the Total Return Fund's investment adviser are historic dividend
yields as compared to current dividend yields, historic price-earnings ratios as
compared to current price-earnings ratios, interest rate movements and inflation
measures. If, based on its evaluation, it determines that prices of common stock
will generally rise, it will cause the Total Return Fund to invest principally
in common stocks or other equity securities. If, based on its evaluation, it
determines that prices of common stocks will generally decline or remain stable,
it will cause such Fund to invest principally in debt securities.

The Total Return Fund's investment adviser and portfolio manager will
consider various financial characteristics, including earnings growth, book
value, net current asset value per share, replacement cost and dividends, and
will study the financial statements of the issuing corporation and other
companies in the same industry, market trends and economic conditions in
general. No formula is used in such analysis. Common stocks will generally be
purchased for long-term capital appreciation. However in appropriate situations
purchases may be made with the expectation of price appreciation over a
relatively short period of time. The Total Return Fund's investments in commons
stocks and other equity-type investments, such as preferred stocks, securities
convertible into common stocks and warrants, may be made without regard to any
objective criteria such as size, exchange listing or seasoning. The Total Return
Fund may invest in both exchange-listed and over-the-counter securities, in
small or large companies, and in well-established or unseasoned companies.

EASTCLIFF REGIONAL SMALL CAPITALIZATION VALUE FUND

The investment objective of the Value Fund is to produce capital
appreciation. The Value Fund seeks to achieve its objective by investing, in
normal market conditions, at least 65% of its total assets in equity securities
of small capitalization companies headquartered in Minnesota, North and South
Dakota, Montana, Wisconsin, Michigan, Iowa, Nebraska, Colorado, Illinois,
Indiana and Ohio.

The Value Fund's investment adviser and portfolio manager anticipate
investing primarily in the securities of rapidly growing small capitalization
companies which generally have the following characteristics in their opinion:
(i) company-specific fundamentals that grow shareholder value, (ii) experienced,
shareholder-oriented management, and (iii) undervaluation by the market. For
these purposes, small capitalization companies are deemed those with market
capitalizations of less than $1 billion.

In addition to the risks associated with investing in small capitalization
companies, the Value Fund's policy of concentrating its equity investments in a
geographic region means that it will be subject to adverse economic, political
or other developments in that region. Although the region in which the Value
Fund principally invests has a diverse industrial base (including, but not
limited to, agriculture, mining, retail, transportation, utilities, heavy and
light manufacturing, financial services, insurance, computer technology and
medical technology), this industrial base is not as diverse as that of the
country as a whole. The Value Fund may be less diversified by industry and
company than other funds with a similar investment objective and no geographic
limitation.

The Value Fund may also invest up to 35% in equity securities without regard
to the location of the issuer's headquarters or the issuer's market
capitalization, corporate bonds, debentures and notes, debt securities issued or
guaranteed by the United States government and its agencies or
instrumentalities, short-term money market instruments, such as U.S. Treasury
Bills, bank certificates of deposit, commercial paper, commercial paper master
notes and repurchase agreements. There can be no assurance that the Value Fund
will achieve its investment objective. See "Investment Practices and Risks".

At times the Value Fund's investment adviser or portfolio manager may
purchase put and call options on equity securities and on stock indices and
write covered call options on equity securities owned by the Value Fund in an
effort to reduce risk. Not more than 5% of the Value Fund's net assets will be
invested in put and call options and the premium received by the Value Fund with
respect to unexpired call options written by the Value Fund will not exceed 5%
of the Value Fund's net assets. Such investments will be effected during periods
of anticipated market weakness and will not result in leveraging the Value Fund.
A description of the foregoing securities and the risks associated therewith is
included in the Statement of Additional Information.

INVESTMENT PRACTICES AND RISKS

In addition to the investment policies described above (and subject to
certain restrictions described below) each of the Funds may invest in the
following securities and may employ some or all of the following investment
techniques, some of which may present special risks as described below. A more
complete discussion of certain of these securities and investment techniques and
the associated risks is contained in the Statement of Additional Information.

EQUITIES SECURITIES GENERALLY. Market prices of equity securities generally, and
of particular companies' equity securities, are frequently subject to
significant volatility. Investors should be aware, however, that since the major
portion of each Fund's portfolio will normally be invested in common stocks,
such Fund's net asset value may be subject to greater fluctuation than a
portfolio containing a substantial amount of fixed income securities. Each Fund
is intended for investors who can accept the risks involved in investments in
equity and equity-related securities. An investment in shares of any of the
Funds does not constitute a complete investment program. Investors may wish to
complement an investment in the Funds with other types of investments.

SMALL CAPITALIZATION COMPANIES. Each Fund may invest a substantial portion of
its assets in small capitalization companies. While small capitalization
companies can provide greater growth potential than larger, more mature
companies, investing in the securities of such companies also involves greater
risk, potential price volatility and cost. These companies often involve higher
risks because they lack the management experience, financial resources, product
diversification, markets, distribution channels and competitive strengths of
larger companies. In addition, in many instances, the frequency and volume of
their trading is substantially less than is typical of larger companies.
Therefore, the securities of smaller companies as well as start-up companies may
be subject to wider price fluctuations. The spreads between the bid and asked
prices of the securities of these companies in the U.S. over-the-counter market
typically are larger than the spreads for more actively traded securities. As a
result, a Fund could incur a loss if it determined to sell such a security
shortly after its acquisition. When making large sales, a Fund may have to sell
portfolio holdings at discounts from quoted prices or may have to make a series
of small sales over an extended period of time due to the trading volume of
smaller company securities. Small capitalization companies tend to have less
potential for current dividend income than investments in larger, more mature
companies. Not more than 5% of the Total Return Fund's assets and 10% of each of
the Growth Fund and Value Fund's assets may be invested in unseasoned companies
defined as companies which have a record of less than three years of continuous
operation, including the operation of a predecessor business of a company which
came into existence as a result of a merger, consolidation, reorganization or
purchase of substantially all of the assets of such predecessor business.

FOREIGN SECURITIES. The Total Return Fund may invest up to 25% and the Growth
Fund up to 20% of its assets in foreign securities. Such investments may involve
risks which are in addition to the usual risks inherent in domestic investments.
The value of a Fund's foreign investments may be significantly affected by
changes in currency exchange rates, and a Fund may incur costs in converting
securities denominated in foreign currencies to U.S. dollars. In many countries,
there is less publicly available information about issuers than is available in
the reports and ratings published about companies in the United States.
Additionally, foreign companies may not be subject to uniform accounting,
auditing and financial reporting standards. Dividends and interest on foreign
securities may be subject to foreign withholding taxes, which would reduce a
Fund's income without providing a tax credit for a Fund's shareholders. Each
Fund will limit such investments to securities of foreign issuers domiciled in
Australia and the non-communist nations of Western Europe, North America and
Eastern Asia. There is the possibility of expropriation, confiscatory taxation,
currency blockage or political or social instability which could affect
investments in those nations. Foreign securities include sponsored and
unsponsored American Depository Receipts ("ADRs"). ADRs typically are issued by
a U.S. bank or trust company and evidence ownership of underlying securities
issued by a foreign corporation. Unsponsored ADRs differ from sponsored ADRs in
that the establishment of unsponsored ADRs are not approved by the issuer of the
underlying securities. As a result, available information concerning the issuer
may not be as current or reliable as the information for sponsored ADRs, and the
price of unsponsored ADRs may be more volatile.

WARRANTS AND RIGHTS. Each Fund may invest up to 5% of its net assets in warrants
or rights, valued at the lower of cost or market, which entitle the holder to
buy securities during a specific period of time. A Fund will make such
investments only if the underlying securities are deemed appropriate by the
Fund's investment adviser or portfolio manager for inclusion in a Fund's
portfolio. Additionally the Total Return Fund will purchase warrants or rights
only if they are sold as a unit with another equity or debt security. Included
in the 5% amount, but not to exceed 2% of net assets, are warrants and rights
whose underlying securities are not traded on principal domestic or foreign
exchanges. Warrants and rights acquired by a Fund in units or attached to
securities are not subject to these restrictions.

CONVERTIBLE SECURITIES. Each of the Funds will limit its investments in
convertible securities to those for which such Fund's investment adviser or
portfolio manager believes (a) the underlying common stock is a suitable
investment for the Fund using the criteria described above and (b) a greater
potential for total return exists by purchasing the convertible security because
of its higher yield. None of the Funds will invest more than 5% of its net
assets at the time of investment in convertible securities rated less than
investment grade. Securities rated BBB by Standard & Poor's Corporation
("Standard & Poor's") or Baa by Moody's Investors Service, Inc. ("Moody's"),
although investment grade, do exhibit speculative characteristics and are more
sensitive than higher rated securities to changes in economic conditions.
Investments in less than investment grade securities entail relatively greater
risk of loss of income or principal than investments in investment grade
securities.

DEBT SECURITIES. Each of the Funds may invest in interest-bearing debt
securities. In particular to achieve its investment objective the Total Return
Fund may at times emphasize the generation of interest income by investing in
interest-bearing debt securities both short and intermediate to long-term.
Investment in intermediate to long-term debt securities may also be made with a
view to realizing capital appreciation when a Fund's investment adviser or
portfolio manager believes that interest rates on such investments may decline,
thereby increasing their market value. Debt securities having maturities of from
three to ten years are considered to be intermediate-term and debt securities
having maturities in excess of ten years are considered to be long-term. Each of
the Funds may also purchase "deep discount bonds," i.e. bonds which are selling
at a substantial discount from their face amount, with a view to realizing
capital appreciation. The Funds will invest only in those publicly distributed
nonconvertible debt securities which have been assigned one of the highest three
ratings of either Standard & Poor's or Moody's. The values of the interest-
bearing debt securities held by a Fund are subject to price fluctuations
resulting from various factors, including rising or declining interest rates
("market risks") and the ability of the issuers of such investments to make
scheduled interest and principal payments ("financial risks"). For example,
interest-bearing securities typically experience appreciation when interest
rates decline and depreciation when interest rates rise. The investment adviser
and portfolio manager for the Funds attempt to minimize these risks when
selecting investments by taking into account interest rates, terms and
marketability of obligations, as well as the capitalization, earnings, liquidity
and other indicators of the issuer's financial condition. The Funds' investment
in securities of, or guaranteed by, the United States government, its agencies
or instrumentalities may be supported by the full faith and credit of the United
States, supported by the right of the agency to borrow from the U.S. Treasury or
supported only by the credit of the agency or instrumentality. Agencies or
instrumentalities whose securities are supported by the full faith and credit of
the United States include, but are not limited to, the Federal Housing
Administration, Farmers Home Administration, Export-Import Bank of the United
States, Small Business Administration and Government National Mortgage
Association. Examples of agencies or instrumentalities whose securities are
supported by the right of the agency to borrow from the U.S. Treasury include,
but are not limited to, the Federal Home Loan Bank, Federal Intermediate Credit
Banks and Tennessee Valley Authority. There is no assurance that these
commitments will be undertaken in full. No assurances can be given that the U.S.
Government will provide financial support to obligations issued or guaranteed by
agencies or instrumentalities that are not backed by the full faith and credit
of the United States since it is not obligated to do so by law.

PREFERRED STOCKS. Each of the Funds may invest in preferred stocks. Preferred
stocks have a preference over common stocks in liquidation (and generally
dividends as well) but are subordinated to the liabilities of the issuer in all
respects. As a general rule, the market value of preferred stocks with a fixed
dividend rate and no conversion element varies inversely with interest rates and
perceived credit risks while the market price of convertible preferred stock
generally also reflects some element of conversion value. Because preferred
stock is junior to debt securities and other obligations of the issuer,
deterioration in the credit quality of the issuer will cause greater changes in
the value of a preferred stock than in a more senior debt security with
similarly stated yield characteristics. Unlike interest payments on debt
securities, preferred stock dividends are payable only if declared by the
issuer's board of directors. Preferred stock also may be subject to optional or
mandatory redemption provisions.

MONEY MARKET INSTRUMENTS. Each of the Funds has reserved the freedom to invest
any portion of its assets for temporary defensive purposes in conservative
fixed-income securities such as United States Treasury Bills, certificates of
deposit of U.S. banks, provided that the bank has capital, surplus and undivided
profits (as of the date of its most recently published annual financial
statements) with a value in excess of $100,000,000 at the date of investment,
commercial paper and commercial paper master notes (which are demand instruments
without a fixed maturity bearing interest at rates which are fixed to known
lending rates and automatically adjusted when such lending rates change) rated
A-1 by Standard & Poor's, money market mutual funds and repurchase agreements.
Repurchase agreements are agreements under which the seller of a security agrees
at the time of sale to repurchase the security at an agreed time and price. The
Funds will not enter into repurchase agreements with entities other than banks
or invest over 5% of their net assets in repurchase agreements.

PORTFOLIO TURNOVER. Each of the Funds typically will purchase common stocks for
long-term capital appreciation, but may on occasion place emphasis on short-term
trading profits. As a consequence, each of the Funds expect usually to have an
annual portfolio turnover rate ranging from 30% to 80%. The annual portfolio
turnover rate indicates changes in a Fund's portfolio and is calculated by
dividing the lesser of purchases or sales of portfolio securities (excluding
securities having maturities at acquisition of one year or less) for the fiscal
year by the monthly average of the value of the portfolio securities (excluding
securities having maturities at acquisition of one year or less) owned by such
Fund during the fiscal year. The annual portfolio turnover rate may vary widely
from year to year depending upon market conditions and prospects. High turnover
in any year will result in the payment by a Fund from capital of above-average
amounts of brokerage commissions and could result in the payment by shareholders
of above-average amounts of taxes on realized investment gains. Distributions to
shareholders of such investment gains, to the extent they consist of net short-
term capital gains, will be considered ordinary income for federal income tax
purposes.

WHEN-ISSUED AND DELAYED-DELIVERY TRANSACTIONS. Each of the Funds may purchase
securities on a when-issued or delay-delivery basis. When such a transaction is
negotiated, the purchase price is fixed at the time the purchase commitment is
made, but delivery of and payment for the securities take place at a later date.
A Fund will not accrue income with respect to securities purchased on a when-
issued or delayed-delivery basis prior to their stated delivery date. Pending
delivery of the securities, each Fund will maintain in a segregated account cash
or liquid high-grade securities in an amount sufficient to meet its purchase
commitments. The purpose and effect of such segregation is to prevent the Fund
from gaining investment leverage from such transactions. The purchase of
securities on a when-issued or delayed-delivery basis exposes a Fund to risk
because the securities may decrease in value prior to delivery. The Funds will
engage in when-issued and delayed-delivery transactions only for the purpose of
acquiring portfolio securities consistent with their investment objectives and
not for the purpose of investment leverage. A seller's failure to deliver
securities to a Fund could prevent the Fund from realizing a price or yield
considered to be advantageous.

GENERAL CONSIDERATIONS. Under certain circumstances each of the Funds may (a)
temporarily borrow money from banks for emergency or extraordinary purposes,
provided that such borrowings not exceed 5% of the value of such Fund's net
assets, (b) pledge up to 10% of its net assets to secure borrowings and (c)
purchase securities of other investment companies. None of the Funds may invest
more than 10% of its net assets in illiquid securities, including repurchase
agreements maturing in more than seven days. The Funds' Statement of Additional
Information includes a more complete discussion of the circumstances in which
each of the Funds may engage in these activities, as well as certain other
investment restrictions applicable to the Funds. Except for the foregoing
investment restrictions and the Funds' policies with respect to investments in
warrants, repurchase agreements and securities of unseasoned companies, the
investment objective and other policies of each Fund described under "Investment
Objectives and Policies" are not fundamental policies and may be changed without
shareholder approval. A change in a particular Fund's investment objective may
result in such Fund having an investment objective different from the objective
which the shareholder considered appropriate at the time of investment in such
Fund. At least 30 days' prior to any change by a Fund in its investment
objective, such Fund will provide written notice to all of its shareholders
regarding such proposed change.

MANAGEMENT OF THE FUNDS

As a Wisconsin corporation, the business and affairs of the Funds are managed
by its Board of Directors. The investment activities of the Funds are managed
through a multi-manager structure. Each of the Funds has entered into an
investment advisory agreement (the "Management Agreements") with Resource
Capital Advisers, Inc. (the "Adviser"), 900 Second Avenue South, Suite 300,
Minneapolis, Minnesota 55402, pursuant to which the Adviser will provide
consulting, investment and administrative services to the Funds. The specific
security investments for each Fund will be made by one or more portfolio
managers (sub-advisers) selected for the Funds by the Adviser.

The Management Agreements provide that the Adviser, subject to the management
and direction of the Corporation's Board of Directors and officers, will
evaluate, select and monitor the various portfolio managers for each Fund. The
Adviser and the Funds will enter into separate subadvisory contracts with the
portfolio managers (each, a "Sub-Advisory Agreement").

The Adviser is the investment adviser to individuals and institutional
clients (including investment companies). The Adviser was organized in 1984 and
is a wholly-owned subsidiary of Resource Trust Company, a Minnesota state bank.
Resource Trust Company is a wholly-owned subsidiary of Resource Companies, Inc.

The Adviser was also the investment adviser to the Total Return Fund prior to
December 17, 1987. On such date the investment advisory agreement with the
Adviser was terminated and the Total Return Fund entered into a substantially
identical investment advisory agreement with Fiduciary Management, Inc. On
December 31, 1994 the investment advisory agreement with Fiduciary Management,
Inc. was terminated and the Total Return Fund entered into a substantially
identical investment advisory agreement with the Adviser. On June 30, 1995, the
investment advisory agreement with the Adviser was terminated and replaced with
the current Management Agreement.

THE ADVISER

The Adviser (i) provides or oversees the provision of all general management
and administration, investment advisory and portfolio management, and general
services for the Funds; (ii) provides the Funds with office space, equipment and
personnel necessary to operate and administer the Funds' business, and to
supervise the provision of services by third parties such as the money managers
and custodian; (iii) develops the investment programs, selects money managers,
allocates assets among money managers and monitors the money managers'
investment programs and results; and (iv) is authorized to select, or hire money
managers to select, individual portfolio securities held by the Funds. The
Adviser bears the expenses it incurs in providing these services as well as the
costs of preparing and distributing explanatory materials concerning the Funds.

The Adviser also provides asset management consulting services -- including
objective-setting and asset-allocation input, and money manager research and
evaluation assistance.

For the foregoing, the Adviser receives from the Total Return Fund a monthly
fee of 1/12 of 1% (1% per annum) on the first $30,000,000 of the daily net
assets of such Fund and 1/12 of .75% (.75% per annum) on the daily net assets of
such Fund over $30,000,000; and from each of the Growth Fund and Value Fund a
monthly fee of 1/12 of 1% (1% per annum) of the daily net assets of such Fund.
The Adviser is responsible for the payment of all fees to the portfolio
managers. The rate of the annual advisory fees payable by each of the Funds is
higher than that paid by most mutual funds. The advisory fees paid by the Growth
Fund and the Total Return Fund in the fiscal year ended June 30, 1996 were equal
to ---% and ---%, respectively, of such Funds average net assets.

THE PORTFOLIO MANAGERS

The assets of each Fund are allocated currently among the portfolio managers
listed below. The allocation of a Fund's assets among portfolio managers may be
changed at any time by the Adviser. Portfolio managers may be employed or their
services may be terminated at any time by the Adviser, subject to approval by
the Corporation's Board of Directors. The employment of a new portfolio manager
for a Fund currently requires the prior approval of the shareholders of that
Fund. The Corporation, however, may request an order of the Securities and
Exchange Commission exempting the Funds from the requirement for shareholder
approval of new portfolio managers. If an order is granted, the Corporation will
notify shareholders of the Fund concerned promptly when a new portfolio manager
begins providing services. There can be no assurance, however, that the
Corporation may request such an order or that such an order will be granted with
respect to the Funds.

The Adviser pays the fees of each portfolio manager. Each portfolio manager
is paid an annual fee expressed as a percentage of Fund assets under
management; there are no performance or incentive fees. Some portfolio managers
may execute portfolio transactions for the Funds through broker-dealer
affiliates and receive brokerage commissions for doing so.

Portfolio managers are selected for the Funds based primarily upon the
research and recommendations of the Adviser, which evaluates quantitatively and
qualitatively the manager's skills and results in managing assets for specific
asset classes, investment styles and strategies. The Adviser evaluates the risks
and returns of the portfolio managers' investment style over an entire market
cycle. Short-term investment performance, by itself, is not a controlling factor
in selecting or terminating a portfolio manager.

Each portfolio manager has complete discretion to purchase and sell portfolio
securities for its segment of a Fund within such Fund's investment objectives,
restrictions and policies, and the more specific strategies developed by the
Adviser. Although the portfolio managers' activities are subject to general
oversight by the Board of Directors and officers of the Corporation, none of the
Board, the officers or the Adviser evaluate the investment merits of the
portfolio manager's individual securities selections.

As of the date of this Prospectus, the portfolio manager of the Growth Fund
is Winslow Capital Management, Inc. ("WCM"), 4720 IDS Tower, 80 South Eighth
Street, Minneapolis, Minnesota 55402. WCM was organized as a Minnesota
Corporation in 1992 and is a registered investment adviser controlled by Clark
J. Winslow, Richard E. Pyle and Gail M. Knappenberger. Messrs. Winslow, Pyle and
Knappenberger are primarily responsible for the day-to-day management of the
Growth Fund's portfolio. WCM serves as sub-adviser to another mutual fund,
MIMLIC Capital Appreciation Fund (since October, 1992.) WCM also manages equity
portfolios for large pension and profit-sharing plans, foundations, endowments
and other private accounts. As of June 30, 1996, WCM managed approximately $970
million in assets. For its services to the Growth Fund, WCM receives from the
Adviser (not the Growth Fund) a monthly fee of 1/12 of 0.60% (0.60% per annum)
of the daily net assets of such Fund.

As of the date of this Prospectus, the portfolio manager of the Total Return
Fund is Palm Beach Investment Advisers, Inc. ("PBIA"), 249 Royal Palm Way, Suite
400, Palm Beach, Florida 33480. PBIA was incorporated as a Florida corporation
in 1990 and is a registered investment adviser. PBIA is controlled by the
Adviser. Thomas M. Keresey, the Chairman and Chief Investment Officer of PBIA,
and Patrice J. Neverett, Vice President and Portfolio Manager of PBIA, are
primarily responsible for the day-to-day management of the Total Return Fund's
portfolio. PBIA manages equity and fixed income portfolios for individual and
institutional clients, including pension and profit-sharing plans, foundations
and endowments. As of June 30, 1996, PBIA managed approximately $190 million in
assets. For its services to the Total Return Fund, PBIA receives from the
Adviser (not the Total Return Fund) a monthly fee of 1/12 of 0.40% (0.40% per
annum) on the first $30,000,000 of such Fund's daily net assets and 1/12 of
0.30% (0.30% per annum) on the daily net assets of such Fund in excess of
$30,000,000.

As of the date of this Prospectus, the portfolio manager of the Value Fund is
Woodland Partners LLC ("WP"), 60 South Sixth Street, Suite 3750, Minneapolis,
Minnesota 55402. WP was organized as a Minnesota limited liability company in
1996 and is a registered investment adviser owned by Richard W. Jensen,
Elizabeth M. Lilly and Richard J. Rinkoff. Ms. Lilly and Mr. Rinkoff
are responsible for the day-to-day management of the Value Fund's portfolio.
Ms. Lilly and Mr. Rinkoff were previously employed at First Asset
Management, First Bank NA, Mr. Jensen since 1967, Ms. Lilly since 1992 and Mr.
Rinkoff since 1977. While employed by First Asset Management, Ms. Lilly and Mr.
Rinkoff were the portfolio managers for the Regional Equity Fund, a series of
First American Investment Funds, Inc. For its services to the Value Fund, WP
receives from the Adviser (not the Value Fund) a monthly fee of 1/12 of 0.60%
(0.60% per annum) of the daily net assets of such Fund.

Set forth below is historical performance data relating to portfolios managed
by Mr. Rinkoff and Ms. Lilly while employed by First Asset Management. The data
is provided to illustrate past performance in managing similar portfolios as
measured against specified market indices. Composite figures reflect the
performance of all active accounts invested in the regional small capitalization
value style of Mr. Rinkoff and Ms. Lilly. The composite does not reflect any
large capitalization accounts managed by Mr. Jensen, Ms. Lilly and Mr. Rinkoff.
The accounts included in the composite had the same investment objective as the
Value Fund and were managed using substantially similar, though not in all
cases, identical, investment strategies and techniques as those contemplated for
use by the Value Fund. See "Investment Objective and Policies." All performance
data presented is historical and investors should not consider this performance
data as an indication of the future performance of the Value Fund or the results
an individual investor might achieve by investing in the Value Fund. Investors
should not rely on the historical performance when making an investment
decision. All returns quoted are time-weighted total rates of return and include
the reinvestment of dividends and interest. Performance figures reflect
the assessment of presumed annual operating expenses of 1.3% of average
assets, which expenses were higher than those actually incurred by the
composite. Investors should
be aware that because the Value Fund will elect to qualify as a regulated
investment company under the Internal Revenue Code, the Value Fund will not be
subject to taxes on its investment income and capital gains. See "Dividends,
Distributions and Taxes."

All information presented is based on data supplied by WP or from statistical
services, reports or other sources believed by WP to be reliable. However, such
information has not been verified by any third party and is unaudited.

COMPOUNDED ANNUAL RATES OF RETURN(1)<F13>
(For the Period Ended December 31, 1995)

15 Years 10 Years 5 Years 3 Years 1Year
-------- -------- ------- ------ -----
Regional Small Capitalization
Value Composite 15.4 16.0 27.0 22.3 49.1
S&P 500 Index(2)<F14> 14.8 14.9 16.6 15.3 37.6
Russell 2000 Index(3)<F15> 12.5 11.3 21.0 14.4 28.4

(1)<F13>The calculation of the rates of return was performed in accordance with
the Performance Presentation Standards endorsed by the Association for
Investment Management and Research ("AIMR"). Other performance calculation
methods may produce different results. The AIMR performance presentation
criteria require the presentation of at least a ten-year
performance record or performance for the period since inception,
if shorter. Total annual rate of return is the change in
redemption value of units purchased with an initial $1,000 investment,
assuming the reinvestment of dividends. Compounded annual rate of return
represents the level annual rate which, if earned for each year in a multiple
year period, would produce the cumulative rate of return over that period.

(2)<F14>The Standard & Poor's 500 Index consists of 500 selected common
stocks, most of which are listed on the New York Stock Exchange. The
Standard & Poor's Ratings Group designates the stocks to be included in
the Index on a statistical basis. A particular stock's weighting in the
Index is based on its relative total market value (i.e., its market
price per share times the number of shares outstanding). Stocks may be
added or deleted from the Index from time to time.
(3)<F15>The Russell 2000 Index is an index comprised of 2000 publicly
traded small capitalization common stocks that are ranked in terms of
capitalization below the large and mid-range capitalization sectors of
the United States equity market. The Russell 2000 Index is a
trademark/service mark of the Frank Russell Company.

Past performance may not be indicative of future rates of return. Investors
should also be aware that other performance calculation methods may produce
different results, and that comparisons of investment results should consider
qualitative circumstances and should be made only for portfolios with generally
similar investment objectives.

THE ADMINISTRATOR

Each of the Funds also has entered into an administration agreement
(collectively, the "Administration Agreements") with Fiduciary Management, Inc.
(the "Administrator"), 225 East Mason Street, Milwaukee, Wisconsin 53202. Under
the Administration Agreements the Administrator prepares and maintains the
books, accounts and other documents required by the Act, determines each Fund's
net asset value, responds to shareholder inquiries, prepares each Fund's
financial statements and excise tax returns, prepares certain reports and
filings with the Securities and Exchange Commission and with state Blue Sky
authorities, furnishes statistical and research data, clerical, accounting and
bookkeeping services and stationery and office supplies, keeps and maintains
each Fund's financial and accounting records and generally assists in all
aspects of the Funds' operations. The Administrator at its own expense and
without reimbursement from any of the Funds, furnishes office space and all
necessary office facilities, equipment and executive personnel for performing
the services required to be performed by it under the Administration Agreements.
For the foregoing, the Administrator receives from each of the Fund's a monthly
fee of 1/12 of .2% (.2% per annum) on the first $30,000,000 of the daily net
assets of such Fund and 1/12 of .1% (.1% per annum) on the daily net assets of
such Fund over $30,000,000. The administration fee paid by the Growth Fund and
the Total Return Fund in the fiscal year ended June 30, 1996 to the
Administrator were equal to ---% and ---%, respective, of such Fund's average
net assets.

The Funds pay all of their own expenses not assumed by the Adviser or the
Administrator, including, without limitation, the cost of preparing and printing
their registration statements required under the Securities Act of 1933 and the
Act and any amendments thereto, the expense of registering their shares with the
Securities and Exchange Commission and in the various states, the printing and
distribution costs of prospectuses mailed to existing investors, reports to
investors, reports to government authorities and proxy statements, fees paid to
directors who are not interested persons of the Adviser, interest charges,
taxes, legal expenses, association membership dues, auditing services, insurance
premiums, brokerage commissions and expenses in connection with portfolio
transactions, fees and expenses of the custodian of the Funds' assets, printing
and mailing expenses and charges and expenses of dividend disbursing agents,
accounting services agents, registrars and stock transfer agents.

DISTRIBUTION PLAN

Each of the Funds has adopted a Distribution Plan (the "Plan") pursuant to
Rule 12b-1 under the Investment Company Act of 1940. The Plan provides that each
Fund may incur certain costs which may not exceed a maximum amount equal to 1/12
of 1% (1% per annum) of such Fund's average daily net assets. However, each of
the Funds has determined not to pay any 12b-1 fees during the fiscal year ending
June 30, 1997. Payments made pursuant to the Plan may only be used to pay
distribution expenses incurred in the current year. Amounts paid under the Plan
by either Fund may be spent by such Fund on any activities or expenses primarily
intended to result in the sale of shares of such Fund, including but not limited
to, advertising, compensation of underwriters, dealers and sales personnel, the
printing and mailing of prospectuses to other than current shareholders, and the
printing and mailing of sales literature. The Plan permits each Fund to employ a
distributor of its shares, in which event payments under the Plan will be made
to such distributor and may be spent by such distributor on any activities or
expenses primarily intended to result in the sale of shares of such Fund
including but not limited to, compensation to, and expenses (including overhead
and telephone expenses) of, employees of the distributor who engage in or
support distribution of such Fund's shares, printing of prospectuses and reports
for other than existing shareholders, advertising and preparation and
distribution of sales literature. Allocation of overhead (rent, utilities, etc.)
and salaries will be based on the percentage of utilization in, and time devoted
to, distribution activities. If a distributor is employed by a Fund, the
distributor will directly bear all sales and promotional expenses of such Fund,
other than expenses incurred in complying with laws regulating the issue or sale
of securities. (In such event, the applicable Fund will indirectly bear sales
and promotional expenses to the extent it makes payments under the Plan.) None
of the Funds has any present plan to employ a distributor. Pending the
employment of a distributor by any of the Funds, distribution expenses will be
authorized by the officers of the Corporation. Payments pursuant to the Plan
will be made only to those persons who are legally entitled to receive them.

DETERMINATION OF NET ASSET VALUE

The per share net asset value of each Fund is determined by dividing the
total value of such Fund's net assets (meaning its assets less its liabilities
excluding capital and surplus) by the total number of its shares outstanding at
that time. Each Fund's net asset value is determined as of the close of regular
trading (currently 4:00 p.m. Eastern time) on the New York Stock Exchange on
each day the New York Stock Exchange is open for trading. This determination is
applicable to all transactions in shares of such Fund prior to that time and
after the previous time as of which net asset value was determined. Accordingly,
purchase orders accepted or shares tendered for redemption prior to the close of
regular trading on a day the New York Stock Exchange is open for trading will be
valued as of the close of trading, and purchase orders accepted or shares
tendered for redemption after that time will be valued as of the close of the
next trading day.

Securities traded on any national stock exchange or quoted on the Nasdaq
National Market System will be valued on the basis of the last sale price on the
date of valuation or, in the absence of any sales on that date, the most recent
bid price. Other securities will be valued by an independent pricing service at
the most recent bid price, if market quotations are readily available. Any
securities for which there are no readily available market quotations and other
assets will be valued at their fair value as determined in good faith by the
Corporation's Board of Directors. Odd lot differentials and brokerage
commissions will be excluded in calculating values.

PURCHASE OF SHARES

Shares of the Funds may be purchased directly from the Corporation. A share
purchase application form is included at the back of this Prospectus. The price
per share of each Fund is the next determined per share net asset value after
receipt of an application. Additional purchase applications may be obtained from
the Corporation. Purchase applications should be mailed directly to: Eastcliff
Funds, c/o Firstar Trust Company, P.O. Box 701, Milwaukee, Wisconsin 53201-0701.
The Funds do not consider the U.S. Postal Service or other independent delivery
services to be its agents. Therefore, deposit in the mail or with such services,
or receipt at Firstar Trust Company's Post Office Box of purchase applications
does not constitute receipt by Firstar Trust Company or the Fund. Do not mail
letters by overnight courier to the Post Office Box address. To purchase shares
by overnight or express mail, please use the following street address: Eastcliff
Funds, c/o Firstar Trust Company, Third Floor, 615 East Michigan Street,
Milwaukee, Wisconsin 53202. All applications must be accompanied by payment in
the form of a check made payable to the full name of the Fund whose shares are
being purchased, or by direct wire transfer as described below. All purchases
must be made in U.S. dollars and checks must be drawn on U.S. banks. No cash
will be accepted. Firstar Trust Company will charge a $20 fee against a
shareholder's account for any payment check returned to the custodian. THE
SHAREHOLDER WILL ALSO BE RESPONSIBLE FOR ANY LOSSES SUFFERED BY EITHER FUND AS A
RESULT. When a purchase is made by check (other than a cashiers or certified
check), the Corporation may delay the mailing of a redemption check until it is
satisfied that the check has cleared. (It will normally take up to 3 days to
clear local personal or corporate checks and up to 7 days to clear other
personal and corporate checks.) To avoid redemption delays, purchases may be
made by cashiers or certified check or by direct wire transfers. Funds should be
wired to: Firstar Bank Milwaukee, NA, 777 East Wisconsin Avenue, Milwaukee,
Wisconsin, ABA #075000022, Firstar Trust Company, Account #112952137, for
further credit to: "full name of appropriate Fund," "name of shareholder and
existing account number" if any. The establishment of a new account by wire
transfer should be preceded by a phone call to the Corporation's office, (612)
336-1444, to provide information for the setting up of the account. A follow up
application should be sent for all new accounts opened by wire transfer.
Securities dealers and financial institutions who notify a Fund prior to the
close of any business day that they intend to wire federal funds to purchase
shares of such Fund prior to 10:00 a.m. (Central Time) on the next business day
will be deemed to have purchased shares at the time of notification. When a
purchase of shares of a Fund is made by direct wire transfer by investors other
than securities dealers and financial institutions, the purchase will become
effective upon receipt by Firstar Bank of Milwaukee, N.A. Wire transmissions may
be subject to delays of several hours, in which event the effectiveness of the
purchase will be delayed. Shares cannot be purchased by direct wire transfer on
Columbus Day, Veteran's Day or Martin Luther King Day. Applications are subject
to acceptance by the Corporation, and are not binding until so accepted. The
Corporation does not accept telephone orders for purchase of shares and reserves
the right to reject applications in whole or in part. The Board of Directors of
the Corporation has established $1,000 as the minimum initial purchase for each
Fund and $100 as the minimum for any subsequent purchase (except through
dividend reinvestment), which minimum amounts are subject to change at any time.
Shareholders of the Funds will be advised at least thirty days in advance of any
increases in such minimum amounts. Stock certificates for shares so purchased
are not issued unless requested in writing. There are no sales loads on
purchases of shares of the Funds nor redemption charges on redemptions of such
shares. Purchase payments are fully invested at net asset value, of the
applicable Fund.

REDEMPTION OF SHARES

A shareholder may require the Corporation to redeem his shares of any Fund in
whole or part at any time during normal business hours. Unless the telephone
redemption privilege is requested as described below, redemption requests must
be made in writing and directed to: Eastcliff Funds, c/o Firstar Trust Company,
P.O. Box 701, Milwaukee, Wisconsin 53201-0701. The Funds do not consider the
U.S. Postal Service or other independent delivery services to be its agents.
Therefore, deposit in the mail or with such services, or receipt at Firstar
Trust Company's Post Office Box of redemption requests does not constitute
receipt by Firstar Trust Company or the Fund. Do not mail letters by overnight
courier to the Post Office Box address. Correspondence mailed by overnight
courier should be sent to Firstar Trust Company, Third Floor, 615 East Michigan
Street, Milwaukee, Wisconsin 53202. If a written redemption request is
inadvertently sent to the Corporation, it will be forwarded to Firstar Trust
Company, but the effective date of redemption will be delayed until the request
is received by Firstar Trust Company. Requests for redemption by telegram and
requests which are subject to any special conditions or which specify an
effective date other than as provided herein cannot be honored.

Redemption requests should specify the name of the appropriate Fund, the
number of shares or dollar amount to be redeemed, shareholder's name, account
number, and the additional requirements listed below that apply to the
particular account.

TYPE OF REGISTRATION REQUIREMENTS
-------------------- ------------
Individual, Joint Tenants Redemption request signed by all person(s)
Sole Proprietor, Custodial required to sign for the account, exactly as
(Uniform Gift to Minors Act), it is registered.
General Partners

Corporations, Associations Redemption request and a corporate
resolution, signed by person(s) required
to sign for the account, accompanied by
signature guarantee(s).

Trusts Redemption request signed by the trustee(s)
with a signature guarantee. (If the trustee's
name is not registered on the account, a copy
of the trust document certified within the
last 60 days is also required.)

Redemption requests from shareholders in an Individual Retirement Account
must include instructions regarding federal income tax withholding. Unless
otherwise indicated, these redemptions, as well as redemptions of other
retirement plans not involving a direct rollover to an eligible plan, will be
subject to federal income tax withholding. If a shareholder is not included in
any of the above registration categories (e.g., executors, administrators,
conservators or guardians), the shareholder should call the transfer agent,
Firstar Trust Company (1-800-338-1579), for further instructions.

Signatures need not be guaranteed unless the proceeds of redemption are
requested to be sent by wire transfer, to a person other than the registered
holder or holders of the shares to be redeemed, or to be mailed to other than
the address of record, in which cases each signature on the redemption request
must be guaranteed by a commercial bank or trust company in the United States, a
member firm of the New York Stock Exchange or other eligible guarantor
institution. If certificates have been issued for any of the shares to be
redeemed, the certificates, properly endorsed or accompanied by a properly
executed stock power, must accompany the request for redemption. Redemptions
will not be effective or complete until all of the foregoing conditions,
including receipt of all required documentation by Firstar Trust Company in its
capacity as transfer agent, have been satisfied.

The redemption price for each Fund is the net asset value for such Fund next
determined after receipt by Firstar Trust Company in its capacity as transfer
agent of the request in proper form with all required documentation. The amount
received will depend on the market value of the investments in the appropriate
Fund's portfolio at the time of determination of net asset value, and may be
more or less than the cost of the shares redeemed. A check in payment for shares
redeemed will be mailed to the holder no later than the seventh day after
receipt of the redemption request in proper form and all required documentation
except as indicated in "Purchase of Shares" for certain redemptions of shares
purchased by check.

If a shareholder instructs Firstar Trust Company in writing, redemption
requests may be made by telephone by calling only Firstar Trust Company, not the
Corporation, the Adviser or any portfolio manager, at (800) 338-1579 or (414)
765-4124, provided the redemption proceeds are to be mailed or wired to the
shareholder's address or bank of record as shown on the records of the transfer
agent. Proceeds redeemed by telephone will be mailed or wired to an address or
account other than that shown on the records of the transfer agent only if such
has been prearranged by a written request sent via mail or facsimile copy to
Firstar Trust Company. Such a request must be signed by the shareholder with
signatures guaranteed as described above. Additional documentation may be
requested from those who hold shares in a fiduciary or representative capacity
or who are not natural persons. The Funds reserve the right to refuse a
telephone redemption request if it is believed advisable to do so. Redemption by
telephone is not available for IRA accounts or if share certificates have been
issued for the account. Procedures for telephone redemptions may be modified or
terminated at any time by the Corporation or Firstar Trust Company. Neither the
Corporation, the Funds nor Firstar Trust Company will be liable for following
instructions for telephone redemption transactions that they reasonably believe
to be genuine, provided reasonable procedures are used to confirm the
genuineness of the telephone instructions, but may be liable for unauthorized
transactions if they fail to follow such procedures. These procedures include
requiring some form of personal identification prior to acting upon the
telephone instructions and recording all telephone calls. During periods of
substantial economic or market change, telephone redemptions may be difficult to
implement. In the event a shareholder cannot contact Firstar Trust Company by
telephone, he or she should make a redemption request in writing in the manner
set forth above.

The right to redeem shares of any Fund will be suspended for any period
during which the New York Stock Exchange is closed because of financial
conditions or any other extraordinary reason and may be suspended for any period
during which (a) trading on the New York Stock Exchange is restricted pursuant
to rules and regulations of the Securities and Exchange Commission, (b) the
Securities and Exchange Commission has by order permitted such suspension or (c)
an emergency, as defined by rules and regulations of the Securities and Exchange
Commission, exists as a result of which it is not reasonably practicable for the
Corporation to dispose of such Fund's securities or fairly to determine the
value of its net assets.

The Corporation reserves the right to redeem the shares held in any account:
(i) in connection with the termination of a particular Fund; (ii) if the value
of the shares in an account falls below $500 or such other amount as the Board
of Directors may establish, provided the Corporation gives the shareholder 60
days' prior written notice; (iii) to reimburse the appropriate Fund for any loss
it has sustained by failure of the shareholder to make full payment for his
shares; (iv) to collect any charge relating to a transaction effected for the
benefit of a shareholder; or (v) if it would otherwise be appropriate to carry
out the Corporation's responsibilities under the Investment Company Act of 1940.
The involuntary redemption procedures are designed to facilitate reimbursement
of the Funds for any losses they sustain as a result of any failures by
shareholders to pay for their shares or required fees in connection with
transactions involving their shares and to relieve the Funds of the cost of
maintaining uneconomical accounts. Involuntary redemptions of small accounts,
however, would not be made because the value of shares in an account falls below
the minimum amount solely because of a decline in a particular Fund's net asset
value. Any involuntary redemptions would be made at net asset value.

EXCHANGE PRIVILEGE

The Corporation generally permits shareholders to exchange shares of one of
the Eastcliff Funds for shares of another Eastcliff Fund. A written request to
exchange shares of one Eastcliff Fund for shares of another may be made at no
cost to the shareholder. The shareholder must give the account name, account
number and the amount or number of shares of a particular Fund to be exchanged.
The registration of the account from which the exchange is being made and the
account to which the exchange is being made must be identical. Signatures
required are the same as explained under "Redemption of Shares."

There is currently no limitation on the number of exchanges a shareholder may
make. However, shares subject to an exchange must have a current value of at
lease $1,000. Furthermore in establishing a new account in another Eastcliff
Fund through this privilege, the exchanged shares must have a value at least
equal to the minimum investment required by the Fund into which the exchange is
being made. A completed purchase application also must be sent to Eastcliff
Funds, c/o Firstar Trust Company, P.O. Box 701, Milwaukee, Wisconsin 53201-0701,
immediately after establishing a new account through this privilege.

The exchange privilege is available only in states where the exchange may be
legally made. Exchange requests may be subject to other limitations, including
those relating to frequency, that may be established from time to time to ensure
that the exchanges do not disadvantage a particular Fund or its shareholders.
Shareholders will be notified at least 60 days in advance of any changes in such
limitations and may obtain the terms of any such limitation by writing to
Eastcliff Funds, c/o Firstar Trust Company, P.O. Box 701, Milwaukee, Wisconsin
53201-0701. No exchange fee is currently imposed by the Corporation on
exchanges; however, the Corporation reserves the right to impose an
administrative fee in the future.

An exchange involves a redemption of all or a portion of the shares in one
Fund and the investment of the redemption proceeds in shares of the other Fund
and is subject to any applicable adjustments in connection with such redemption
and investment. The redemption will be made at the per share net asset value of
the shares to be redeemed next determined after the exchange request is received
as described above. The shares of the Fund to be acquired will be purchased
(subject to any applicable adjustment) at the per share net asset value of those
shares next determined coincident with the time of redemption. Both the
redemption and the investment of the redemption proceeds will take place as of
the close of regular trading (currently 4:00 p.m. Eastern time) on the New York
Stock Exchange on each day the New York Stock Exchange is open for trading.

Investors may find the exchange privilege useful if their investment
objectives should change after they invest in the Eastcliff Funds. For federal
income tax purposes, an exchange of shares is a taxable event and, accordingly,
a capital gain or loss may be realized by an investor. Before making an exchange
request, an investor should consult a tax or other financial adviser to
determine the tax consequences of a particular exchange.

DIVIDEND REINVESTMENT

Shareholders of any Fund may elect to have all income dividends and capital
gains distributions reinvested in such Fund or paid in cash, or elect to have
income dividends reinvested in such Fund and capital gains distributions paid in
cash or capital gains distributions reinvested in such Fund and income dividends
paid in cash. See the share purchase application form included at the back of
this Prospectus for further information. If the shareholder does not specify an
election, all income dividends and capital gains distributions automatically
will be reinvested in full and fractional shares of the appropriate Fund
calculated to the nearest 1,000th of a share. Shares of a particular Fund are
purchased at the net asset value of such Fund in effect on the business day
after the dividend record date and are credited to the shareholder's account on
the dividend payment date. As in the case of normal purchases, stock
certificates are not issued unless requested. Shareholders will be advised of
the number of shares purchased and the price following each reinvestment. An
election to reinvest or receive dividends and distributions in cash will apply
to all shares of a Fund registered in the same name, including those previously
purchased.

A shareholder may change an election at any time by notifying the appropriate
Fund in writing. If such a notice is received between a dividend declaration
date and payment date, it will become effective on the day following the payment
date. The Corporation may modify or terminate its dividend reinvestment program
at any time on thirty days' notice to participants.

AUTOMATIC INVESTMENT PLAN

Shareholders wishing to invest fixed dollar amounts in a particular Fund
monthly or quarterly can make automatic purchases in amounts of $50 or more on
any day they choose by using the Corporation's Automatic Investment Plan. If
such day is a weekend or holiday, such purchase shall be made on the next
business day. There is no service fee for participating in this Plan. To use
this service, the shareholder must authorize the transfer of funds from his
checking or NOW account by completing the Automatic Investment Plan application
included as part of the share purchase application located in the back of this
Prospectus. Additional application forms may be obtained by calling the
Corporation's office at (612) 336-1444. The Corporation reserves the right to
suspend, modify or terminate the Automatic Investment Plan without notice.

The Automatic Investment Plan is designed to be a method to implement dollar
cost averaging. Dollar cost averaging is an investment approach providing for
the investment of a specific dollar amount on a regular basis thereby precluding
emotions dictating investment decisions. Dollar cost averaging does not insure a
profit nor protect against a loss.

SYSTEMATIC WITHDRAWAL PLAN

The Corporation has available to shareholders a Systematic Withdrawal Plan,
pursuant to which a shareholder who owns shares of any Fund worth at least
$10,000 at current net asset value may provide that a fixed sum will be
distributed to him at regular intervals. To participate in the Systematic
Withdrawal Plan, a shareholder deposits his shares of a particular Fund with the
Corporation and appoints it as his agent to effect redemptions of shares of such
Fund held in his account for the purpose of making monthly or quarterly
withdrawal payments of a fixed amount to him out of his account. To utilize the
Systematic Withdrawal Plan, the shares cannot be held in certificate form. The
Systematic Withdrawal Plan does not apply to shares of either Fund held in
Individual Retirement Accounts or defined contribution retirement plans. An
application for participation in the Systematic Withdrawal Plan is included as
part of the share purchase application located in the back of this Prospectus.
Additional application forms may be obtained by calling the Corporation's office
at (612) 336-1444.

The minimum amount of a withdrawal payment is $100. These payments will be
made from the proceeds of periodic redemption of shares of a particular Fund in
the account at net asset value. Redemptions will be made on such day (no more
than monthly) as a shareholder chooses or, if that day is a weekend or holiday,
on the next business day. See the share purchase application located in the back
of this Prospectus for further information. Participation in the Systematic
Withdrawal Plan constitutes an election by the shareholder to reinvest in
additional shares of such Fund, at net asset value, all income dividends and
capital gains distributions payable by the Corporation on shares held in such
account, and shares so acquired will be added to such account. The shareholder
may deposit additional shares of such Fund in his account at any time.

Withdrawal payments cannot be considered as yield or income on the
shareholder's investment, since portions of each payment will normally consist
of a return of capital. Depending on the size or the frequency of the
disbursements requested, and the fluctuation in the value of the applicable
Fund's portfolio, redemptions for the purpose of making such disbursements may
reduce or even exhaust the shareholder's account.

The shareholder may vary the amount or frequency of withdrawal payments,
temporarily discontinue them, or change the designated payee or payee's address,
by notifying Firstar Trust Company.

INDIVIDUAL RETIREMENT ACCOUNT AND SIMPLIFIED EMPLOYEE PENSION PLAN

Individual shareholders may establish their own tax-sheltered Individual
Retirement Account ("IRA"). Each of the Funds offers a prototype IRA plan using
IRS Form 5305-A. An individual may contribute to the IRA an annual amount equal
to the lesser of 100% of annual earned income or $2,000 ($2,250 maximum in the
case of a married couple where one spouse is not working and certain other
conditions are met).

Earnings on amounts held under the IRA accumulate free of federal income
taxes. Distributions from the IRA may begin at age 59-11/42, and must begin by
April 1 following the calendar year end in which a person reaches age 70-11/42.
Excess contributions, certain distributions prior to age 59-11/42 and failure to
begin distributions after age 70-11/42 may result in adverse tax consequences.

Under current IRS regulations, an IRA applicant must be furnished a
disclosure statement containing information specified by the IRS. The applicant
has the right to revoke his account within seven days after receiving the
disclosure statement in accordance with IRS regulations and obtain a full refund
of his contribution should he so elect. The custodian may, in its discretion,
hold the initial contribution uninvested until the expiration of the seven-day
revocation period. It anticipates that it will not so exercise its discretion
but reserves the right to do so.

Firstar Trust Company, Milwaukee, Wisconsin, serves as custodian and
furnishes the services provided for in the IRA plan as required by the Employee
Retirement Income Security Act of 1974 ("ERISA"). The custodian invests all cash
contributions, dividends and capital gains distributions in shares of the
appropriate Fund. For such services, the following fees are charged against the
accounts of the participants: $12.50 annual maintenance fee per participant
account; $15 for transferring to a successor trustee; $15 for distribution(s) to
a participant; and $15 for refunding any contribution in excess of the
deductible limit.

Each Fund's prototype IRA plan may also be used to establish a Simplified
Employee Pension Plan ("SEP/IRA"). The SEP/IRA is available to employers and
employees, including self-employed individuals, who wish to purchase shares with
tax deductible contributions not exceeding annually for any one participant the
lesser of $30,000 or 15% of earned income; provided that no more than $9,500
annually (as adjusted for cost-of-living increases) may be contributed through
elective deferrals.

Requests for information and forms concerning the IRA and SEP/IRA should be
directed to the Corporation. Included with the forms is a disclosure statement
which the IRS requires to be furnished to individuals who are considering an IRA
or SEP/IRA. Consultation with a competent financial and tax adviser regarding
the IRA and SEP/IRA is recommended.

RETIREMENT PLAN

A prototype defined contribution retirement plan is available for employers
who wish to purchase shares of either Fund with tax-deductible contributions not
exceeding annually the lesser of $30,000 or 25% of earned income. This plan
includes a cash or deferred 401(k) arrangement for employers who wish to allow
employees to elect to reduce their compensation and have such amounts
contributed to the plan, not to exceed $9,500 annually (as adjusted for cost-of-
living increases). The Corporation has received an opinion letter from the
Internal Revenue Service that the prototype defined contribution retirement plan
is acceptable for use under Section 401 of the Internal Revenue Code, as
amended, (the "Code").

Firstar Trust Company, Milwaukee, Wisconsin, serves as custodian and
furnishes the services provided for in the retirement plan. The custodian
invests all cash contributions, dividends and capital gains distributions in
shares of the appropriate Fund. For such services, the following fees will be
charged against the accounts of the participants: $12.50 annual maintenance fee
per participant account; $15 for transferring to a successor trustee; $15 for
distribution(s) to a participant; and $15 for refunding any excess contribution.

Requests for information and forms concerning the retirement plan should be
directed to the Corporation. Consultation with a competent financial and tax
adviser regarding the retirement plan is recommended.

DIVIDENDS, DISTRIBUTIONS AND TAXES

Each of the Funds will endeavor to qualify annually for and elect tax
treatment applicable to a regulated investment company under Subchapter M of the
Code. Pursuant to the requirements of the Code, each of the Funds intends
normally to distribute substantially all of its net investment income and net
realized capital gains, if any, less any available capital loss carryover, to
its shareholders annually so as to avoid paying income tax on its net investment
income and net realized capital gains or being subject to a federal excise tax
on undistributed net investment income and net realized capital gains. For
federal income tax purposes, distributions by the Funds, whether invested in
additional shares of the Funds or received in cash, will be taxable to the
Funds' shareholders, except those shareholders that are not subject to tax on
their income.

Shareholders will be notified annually as to the federal tax status of
dividends and distributions. For federal income tax purposes, a shareholder's
cost for his shares is his basis and on redemption his gain or loss is the
difference between such basis and the redemption price. Distributions and
redemptions may also be taxed under state and local tax laws which may differ
from the Code.

BROKERAGE TRANSACTIONS

The Management Agreements and Sub-Advisory Agreements authorize the Adviser,
WCM (with respect to the Growth Fund only), PBIA (with respect to the Total
Return Fund only) and WP (with respect to the Value Fund only) to select the
brokers or dealers that will execute the purchases and sales of the Funds'
portfolio securities. In placing purchase and sale orders for the Funds, it is
the policy of the Adviser and the portfolio managers to seek the best execution
of orders at the most favorable price in light of the overall quality of
brokerage and research services provided.

The Management Agreements and Sub-Advisory Agreements permit the Adviser, WCM
(with respect to the Growth Fund only), PBIA (with respect to the Total Return
Fund only) and WP (with respect to the Value Fund only) to cause the applicable
Fund to pay a broker which provides brokerage and research services to the
Adviser, WCM, PBIA or WP a commission for effecting securities transactions in
excess of the amount another broker would have charged for executing the
transaction, provided the Adviser, WCM, PBIA or WP as the case may be, believes
this to be in the best interests of such Fund. Although the Funds do not intend
to market their shares through intermediary broker-dealers, the Funds may place
portfolio orders with broker-dealers who recommend the purchase of their shares
to clients if the Adviser, WCM, PBIA or WP believes the commissions and
transaction quality are comparable to that available from other brokers and
allocate portfolio brokerage on that basis.

CAPITAL STRUCTURE

The Corporation's authorized capital consists of 10,000,000,000 shares of
Common Stock, of which 300,000,000 are allocated to the Growth Fund, 300,000,000
are allocated to the Total Return Fund and 300,000,000 are allocated to the
Value Fund. Each share outstanding entitles the holder to one vote. Generally
shares are voted in the aggregate and not by each Fund, except where class
voting by each Fund is required by Wisconsin law or the Act (e.g., a change in
investment policy or approval of an investment advisory agreement).

The shares of each Fund have the same preferences, limitations and rights,
except that all consideration received from the sale of shares of each Fund,
together with all income, earnings, profits and proceeds thereof, belong to that
Fund and are charged with the liabilities in respect of that Fund and of that
Fund's share of the general liabilities of the Corporation in the proportion
that the total net assets of the Fund bears to the total net assets of all of
the Funds. However the Board of Directors of the Corporation may, in their
discretion direct that any one or more general liabilities of the Corporation be
allocated among the Funds on a different basis. The net asset value per share
of eachFund is based on the assets belonging to that Fund less the liabilities
charged to that Fund, and dividends are paid on shares of each Fund only out of
lawfully available assets belonging to that Fund. In the event of liquidation
or dissolution of the Corporation, the shareholders of each Fund will be
entitled, out of the assets of the Corporation available for distribution, to
the assets belonging to such Fund.

There are no conversion or sinking fund provisions applicable to the shares
of any Fund, and the holders have no preemptive rights and may not cumulate
their votes in the election of directors. Consequently the holders of more than
50% of the Corporation's shares voting for the election of directors can elect
the entire Board of Directors, and in such event, the holders of the remaining
shares voting for the election of directors will not be able to elect any person
or persons to the Board of Directors. The Wisconsin Business Corporation Law
permits registered investment companies, such as the Corporation, to operate
without an annual meeting of shareholders under specified circumstances if an
annual meeting is not required by the Act. The Corporation has adopted the
appropriate provisions in its Bylaws and does not anticipate holding an annual
meeting of shareholders to elect directors unless otherwise required by the Act.
The Corporation has also adopted provisions in its Bylaws for the removal of
directors by its shareholders.

The shares of each Fund are redeemable and are freely transferable. All
shares issued and sold by the Corporation will be fully paid and nonassessable,
except as provided in Section 180.0622(2)(b) of the Wisconsin Business
Corporation Law. Fractional shares of each Fund entitle the holder to the same
rights as whole shares of such Fund. Firstar Trust Company, 615 East Michigan
Street, Milwaukee, Wisconsin 53202, acts as the Corporation's transfer agent and
dividend disbursing agent.

The Corporation will not issue certificates evidencing shares purchased
unless so requested in writing. Where certificates are not issued, the
shareholder's account will be credited with the number of shares purchased,
relieving shareholders of responsibility for safekeeping of certificates and the
need to deliver them upon redemption. Written confirmations are issued for all
purchases of shares of each Fund. Any shareholder may deliver certificates to
Firstar Trust Company and direct that his account be credited with the shares. A
shareholder may direct Firstar Trust Company at any time to issue a certificate
for his shares without charge.

SHAREHOLDER REPORTS

Shareholders of each Fund will be provided at least semi-annually with a
report showing such Fund's portfolio and other information and annually after
the close of the Corporation's fiscal year, which currently ends June 30, with
an annual report containing audited financial statements. Shareholders who have
questions about the Funds should call Firstar Trust Company at 1-800-338-1579 or
(414) 765-4124 or write to: Eastcliff Funds, 900 Second Avenue South, 300
International Centre, Minneapolis, Minnesota 55402, Attention: Corporate Vice
President.
PERFORMANCE INFORMATION

Each of the Funds may provide from time to time, in advertisements, reports
to shareholders and other communications with shareholders, its average annual
compounded rate of return. A Fund's average annual compounded rate of return
refers to the rate of return which, if applied to an initial investment in such
Fund at the beginning of a stated period and compounded over the period, would
result in the redeemable value of the investment in such Fund at the end of the
stated period. The calculation assumes reinvestment of all dividends and
distributions and reflects the effect of all recurring fees. Each Fund may also
provide "aggregate" total return information for various periods, representing
the cumulative change in value of an investment in a Fund for a specific period
(again reflecting changes in share price and assuming reinvestment of dividends
and distributions).

Any performance results will be based on historical earnings and should not
be considered as representative of the performance of a Fund in the future. An
investment in a Fund will fluctuate in value and at redemption its value may be
more or less than the initial investment.

Each of the Funds may compare its performance to other mutual funds with
similar investment objectives and to the industry as a whole, as reported by
Morningstar, Inc. and Lipper Analytical Services, Inc., Money, Forbes, Business
Week and Barron's magazines, and The Wall Street Journal. (Morningstar, Inc. and
Lipper Analytical Services, Inc. are independent ranking services that rank over
1,000 mutual funds based upon total return performance.) Each of the Fund's may
also compare its performance to the Dow Jones Industrial Average, Nasdaq
Composite Index, Nasdaq Industrials Index, Value Line Composite Index, the S&P
500 Index, S&P400 Mid-Cap Growth Index, Lehman Intermediate Corporate Bond
Index, Russell 1000 Index, Russell 2000 Index and the Consumer Price Index. Such
comparisons may be made in advertisements, shareholder reports or other
communications to shareholders.

EASTCLIFF FUNDS

SHARE PURCHASE APPLICATION
Minimum Initial Investment $1,000
Minimum Subsequent Investment $100

- ----This is a follow-up application (Investment by wire transfer. See page 13
of the Prospectus.)

Mail Completed Application to: Eastcliff Funds
c/o Firstar Trust Company
Mutual Fund Services
P.O. Box 701
Milwaukee, Wisconsin 53201-0701

Overnight Express Mail to:
Eastcliff Funds
c/o Firstar Trust Company
Mutual Fund Services, 3rd Floor
615 E. Michigan Street
Milwaukee, Wisconsin 53202

Use this form for individual, custodial, trust, profit-sharing or pension plan
accounts, including self-directed IRA and 401(k) plans. Do not use this form
for Eastcliff Funds-sponsored 401(k), IRA or Defined Contribution plans (Keogh
or Corporate Profit-Sharing and Money-Purchase) which require forms available
from the Eastcliff Funds. For information please call 1-800-338-1579 or 1-414-
765-4124.

- ------------------------------------------------------------------------------
ACCOUNT REGISTRATION

Individual --- Name
----------------------------------------------------------
Self-Directed
IRA --- Social Security Number Citizen of --- U.S. --- Other
-----------------------------------------------------------

Joint Owner*<F16> --- Name
----------------------------------------------------------

Social Security Number Citizen of --- U.S. --- Other
-----------------------------------------------------------

Gift to Minor --- Custodian
-----------------------------------------------------------

Minor Minor's Birthdate
-----------------------------------------------------------

Minor's Social Security Number Citizen of --- U.S. --- Other
-------------------------------------------------------------------

Corporation, Partnership --- Name of Entity
or Other Entity ----------------------------------------------

Taxpayer Identification Number
--------------------------------------------------------
A corporate resolution form or certificate is required
for corporate accounts.
- ------------------------------------------------------------------------------

Trust, Estate or Guardianship ---
Name
- ------------------------------------------------------------------------------
*<F16>(Registration will be Joint Tenants with Rights of Survivorship (JTWROS)
unless otherwise specified)
Name of Fiduciary(s)

- ------------------------------------------------------------------------------
Taxpayer Identification Number Date of Trust

- ------------------------------------------------------------------------------
Additional documentation and certification may be requested.

- ------------------------------------------------------------------------------
MAILING ADDRESS ---- Send Duplicate Confirmations To:

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

Street, Apt. Name

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

City, State, Zip Code Street, Apt.

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

Daytime Phone Number City, State, Zip Code

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

- ------------------------------------------------------------------------------
INVESTMENT, PAYMENT FOR INITIAL PURCHASE AND DISTRIBUTIONS

The minimum initial Investment is $1,000 for shares of any of the Eastcliff
Funds. Minimum additions to any Fund are $100.

By --- check or --- wire**<F17>
payable to the following:

DISTRIBUTION OPTIONS
<TABLE>
<CAPTION>
Capital Gains Capital Gains
Capital Gains Reinvested in Cash Capital Gains
& Dividends & Dividends & Dividends & Dividends
Amount Reinvested in Cash Reinvested In Cash
<S> <C> <C> <C> <C> <C>
- -- EASTCLIFF GROWTH FUND $ --- --- --- ---
---------------------------------------------------------------------------------------------
- --- EASTCLIFF TOTAL
RETURN FUND $ --- --- --- ---
---------------------------------------------------------------------------------------------

- --- EASTCLIFF REGIONAL SMALL
CAPITALIZATION VALUE FUND $ --- --- --- ---
---------------------------------------------------------------------------------------------
</TABLE>

(If no dividend option is checked, dividends and capital gains will be
reinvested.)
- --- If you would like your cash payments automatically deposited to your
checking or savings account, please check the box at left and attach a voided
check.

**<F17>Indicate date and total amount of wire:

Date---------------------- Amount $--------------------------------

WIRING INSTRUCTIONS: The establishment of a new account by wire transfer
should be preceded by a telephone call to Firstar Trust Company at 1-800-338-
1579 or 1-414-765-4124 to provide information for the setting up of the
account. A completed share purchase application also must be sent to the
Eastcliff Funds at the above address immediately following the investment. A
purchase request for either of the Funds should be wired through the Federal
Reserve System as follows:

Firstar Bank of Milwaukee, N.A., 777 East Wisconsin Avenue, Milwaukee,
Wisconsin 53202
ABA Number 0750-00022 For further credit to: ------------------------
For credit to Firstar Trust Company (Insert full name of appropriate Fund)

Account Number 112-952-137 Shareholder name: ------------------------------
Shareholder account number (if known): ---------

- ------------------------------------------------------------------------------
EXCHANGE PRIVILEGE
If investment is by exchange, such exchange should be made from:

- --- Eastcliff Growth Fund --- Eastcliff Total Return Fund

Account# ---------- Account# ----------

--- Eastcliff Regional Small Capitalization Value Fund

Account# ------------
(I understand that exchanges between the Funds are taxable transactions.)
Amount of Exchange $ -------------- or Number of Shares

- ------------------------------------------------------------------------------
AUTOMATIC INVESTMENT PLAN
Important: Attach an unsigned, voided check (for checking accounts) or a savings
account deposit slip here, and complete this form .

I would like to establish an Automatic Investment Plan for the Eastcliff
Funds, as described in the Prospectus. Based on these instructions, Firstar
Trust Company, the Transfer Agent for the Eastcliff Funds, will automatically
transfer money directly from my checking or NOW account on the --------- day of
the month, or the first business day thereafter, to purchase shares in the
Eastcliff Funds described below. If the automatic purchase cannot be made due
to insufficient funds or stop payment, a $15 fee will be assessed.

Please start the Automatic Investment Plan on this month, day and year: -------
-------

Please debit my bank account $------------($50 minimum) on a --- monthly ---
quarterly basis, to be invested in my Eastcliff Fund account (name of Eastcliff
Fund ------------------------- and account number, if known -----------------).

I (we) authorize you via the ACH Network to honor all debit entries initiated
- --- monthly OR --- quarterly through Firstar Bank of Milwaukee, N.A. on behalf
of the Firstar Trust Company. All such debits are subject to sufficient
collected funds in my account to pay the debit when presented.

- ------------------------------------------------------------------------------
Name(s) on your Bank Account Account Number Signature of Bank Account Owner

- ------------------------------------------------------------------------------
Signature of Joint Owner (if any)

- ------------------------------------------------------------------------------
TELEPHONE REDEMPTIONS (800) 338-1579 OR (414) 765-4124

I authorize Eastcliff Funds, Inc. to act upon my telephone instructions to
redeem shares from this account:--------------------------------------
Fund Account Number
- --- By Wire. The proceeds of any redemption may be wired to your bank. A wire
fee will be charged.

- ------------------------------------------------------------------------
Name on Bank Account Account Number

- ------------------------------------------------------------------------
Bank Name and Address
Please attach a voided, unsigned check or savings deposit slip for the bank
account referenced above.

- --- By Mail. The proceeds of any redemption can be mailed only to the name and
address in which your account is registered.

- ------------------------------------------------------------------------------
SYSTEMATIC WITHDRAWALS
A balance of at least $10,000 is required for this option.

I would like to withdraw from (name of Fund or Funds) $--------- (exact dollars
per payment - $100 minimum)
(If more than one Fund is listed, please indicate the amount to be withdrawn
from each Fund)
- --- I would like to have payments made to me on or about the ---- day of each
month OR
- --- I would like to have payments made to me on or about the ----- of these
months:
- ---Jan. ---Feb. ---Mar. ---Apr. ---May ---June ---July
- ---Aug. ---Sept. ---Oct. ---Nov. ---Dec.
- --- I wouild like my payments automatically deposited to my checking or savings
account. I khave attached a voided check.

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SIGNATURES AND CERTIFICATION

Under the penalty of perjury, I certify that (1) the Social Security Number or
Taxpayer Identification Number shown on this form is my correct Taxpayer
Identification Number, and (2) I am not subject to backup withholding either
because I have not been notified by the Internal Revenue Service (IRS) that I
am subject to backup withholding as a result of a failure to report all
interest or dividends, or the IRS has notified me that I am no longer subject
to backup withholding. The IRS does not require your consent to any provision
of this document other than the certifications required to avoid backup
withholding.

- ------------------------------------------------------------------------------
Signature*<F18> Signature of Co-Owner, if any

- ------------------------------------------------------------------------------
Date
*<F18>If shares are to be registered in (1) joint names, both persons should
sign,(2) a custodian for a minor, the custodian should sign, (3) a trust, the
trustee(s) should sign, or (4) a corporation or other entity, an officer should
sign and print name and title on space provided below.

- ------------------------------------------------------------------------------
Print name and title of officer signing for a corporation or other entity.

EASTCLIFF FUNDS
900 Second Avenue South
Suite 300
Minneapolis, Minnesota 55402
612-336-1444

INVESTMENT ADVISER
RESOURCE CAPITAL ADVISERS, INC.
900 Second Avenue South
300 International Centre
Minneapolis, Minnesota 55402

PORTFOLIO MANAGERS
EASTCLIFF GROWTH FUND
WINSLOW CAPITAL MANAGEMENT, INC.
EASTCLIFF TOTAL RETURN FUND
PALM BEACH INVESTMENT ADVISERS, INC.
EASTCLIFF REGIONAL SMALL CAPITALIZATION VALUE FUND
WOODLAND PARTNERS LLC

ADMINISTRATOR
FIDUCIARY MANAGEMENT, INC.
225 East Mason Street
Milwaukee, Wisconsin 53202

CUSTODIAN, TRANSFER AGENT
AND DIVIDEND DISBURSING AGENT
FIRSTAR TRUST COMPANY
615 East Michigan Street
Milwaukee, Wisconsin 53202
1-800-338-1579
or
414-765-4124

INDEPENDENT ACCOUNTANTS
PRICE WATERHOUSE LLP
100 East Wisconsin Avenue
Suite 1500
Milwaukee, Wisconsin 53202

LEGAL COUNSEL
FOLEY & LARDNER
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202