EASTCLIFF FUNDS INC, 485BPOS, 1996-09-13

EASTCLIFF FUNDS INC
485BPOS, 1996-09-13

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Registration No. 33-6836

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]

Pre-Effective Amendment No. __ [_]

Post-Effective Amendment No. 14 [X]
and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]

Amendment No. 16 [X]
(Check appropriate box or boxes.)

EASTCLIFF FUNDS, INC.
(Exact name of Registrant as Specified On Charter)

900 Second Avenue South
Suite 300
Minneapolis, Minnesota 55402
(Address of Principal Executive Offices) (Zip Code)

(612) 336-1444
(Registrant's Telephone Number, Including Area Code)

Copy to:
E. Thomas Welch Richard L. Teigen
900 Second Avenue South Foley & Lardner
Suite 300 777 East Wisconsin Avenue
Minneapolis, Minnesota 55402 Milwaukee, Wisconsin 53202
(Name and Address of Agent for Service)
__________________________

Registrant has registered an indefinite number or amount of securities
under the Securities Act of 1933 pursuant to Rule 24f-2 of the
Investment Company Act of 1940, and filed its required Rule 24f-2
Notice for the Registrant's fiscal year ended June 30, 1996 on August
27, 1996.

Approximate Date of Proposed Public Offering: As soon as practicable
after the Registration Statement becomes effective.

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

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

[X] on September 16, 1996 pursuant to paragraph (b)

[_] 60 days after filing pursuant to paragraph (a)(1)

[_] on (date) pursuant to paragraph (a)(1)

[_] 75 days after filing pursuant to paragraph (a)(2)

[_] on (date) pursuant to paragraph (a)(2) of Rule 485
__________________________________________________________________________

The Exhibit Index is located at page __ of the sequential numbering
system.

<PAGE>

EASTCLIFF FUNDS, INC.
CROSS REFERENCE SHEET

(Pursuant to Rule 481 showing the location in the Prospectus and
the Statement of Additional Information of the responses to the items of
Parts A and B of Form N-1A.)

Caption or Subheading in Prospectus
Item No. on Form N-1A or Statement of Additional Information

Part A - INFORMATION REQUIRED IN PROSPECTUS

1. Cover Page Cover Page

2. Synopsis Expense Information

3. Condensed Financial Financial Highlights; Performance
Information Information

4. General Description of Introduction; Investment Objectives
Registrant and Policies; Investment Practices
and Risks

5. Management of the Management of the Funds
Fund

5A. Management's Discussion Included in Annual Report to
of Fund Performance Shareholders

6. Capital Stock and Dividend Reinvestment; Dividends,
Other Securities Distributions and Taxes; Capital
Structure; Shareholder Reports

7. Purchase of Securities Distribution Plan; Determination of
Being Offered Net Asset Value; Purchase of
Shares; Exchange Privilege;
Dividend Reinvestment; Automatic
Investment Plan; Individual
Retirement Account and Simplified
Employee Pension Plan; Retirement
Plan

8. Redemption or Repurchase Redemption of Shares; Systematic
Withdrawal Plan

9. Legal Proceedings *

Part B - INFORMATION REQUIRED IN STATEMENT OF ADDITIONAL INFORMATION

10. Cover Page Cover Page

11. Table of Contents Table of Contents

12. General Information and
History *

13. Investment Objectives Investment Restrictions
and Policies

14. Management of the Directors and Officers of the
Registrant Corporation

15. Control Persons and Directors and Officers of the
Principal Holders Corporation; Ownership of Management
of Securities and Principal Shareholders

16. Investment Advisory Investment Adviser, Portfolio
and Other Services Managers and Administrator;
Distribution of Shares; Custodian;
Independent Accountants

17. Brokerage Allocation and Allocation of Portfolio Brokerage
Other Practices

18. Capital Stock and Included in Prospectus under "Capital
Other Securities Structure" and Shareholder Meetings

19. Purchase, Redemption Included in Prospectus under
and Pricing of Secu- "Determination of Net Asset Value";
rities Being Offered "Dividend Reinvestment"; Automatic
Investment Plan"; "Systematic
Withdrawal Plan"; "Exchange
Privilege"; "Individual Retirement
Account and Simplified Employee
Pension Plan"; and "Retirement Plan";
Determination of Net Asset Value and
Performance; Information Incorporated
by Reference

20. Tax Status Taxes

21. Underwriters *

22. Calculations of Determination of Net Asset Value and
Performance Data Performance

23. Financial Statements Financial Statements
_______________
* Answer negative or inapplicable

P R O S P E C T U S

EASTCLIFF FUNDS

EASTCLIFF GROWTH FUND
EASTCLIFF TOTAL RETURN FUND
EASTCLIFF REGIONAL SMALL
CAPITALIZATION VALUE FUND

NO-LOAD MUTUAL FUNDS

P R O S P E C T U S SEPTEMBER 16, 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 16, 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 i
Financial Highlights 1
Introduction 2
Investment Objectives and Policies 3
Investment Practices and Risks 5
Management of the Funds 8
Distribution Plan 12
Determination of Net Asset Value 12
Purchase of Shares 12
Redemption of Shares 13
Exchange Privilege 15
Dividend Reinvestment 16
Automatic Investment Plan 16
Systematic Withdrawal Plan 16
Individual Retirement Account and
Simplified Employee Pension Plan 17
Retirement Plan 18
Dividends, Distributions and Taxes 18
Brokerage Transactions 18
Capital Structure 19
Shareholder Reports 19
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 1.38% and 0.38%, respectively, for the Growth Fund and
1.58% and 0.58%, 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 2.0% and 1.0%, 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 16, 1996.

FOR THE
EASTCLIFF GROWTH FUND PERIOD FROM
JULY 1, 1995+<F4> TO
JUNE 30, 1996
----------------
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning of period $10.00
Income from investment operations:
Net investment loss (0.08)
Net realized and unrealized gains on investments 2.64
-------
Total from investment operations 2.56
Less distributions:
Dividend from net investment income --
Distribution from net realized gains --
-------
Total from distributions --
-------
Net asset value, end of period $12.56
-------
-------
TOTAL INVESTMENT RETURN 25.6%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's $) 46,193
Ratio of expenses (after reimbursement)
to average net assets (a)<F5> 1.3%
Ratio of net investment loss to average net assets (b)<F6> (0.8%)
Portfolio turnover rate 40.3%

+<F4>Commencement of operations.
(a)<F5>Computed after giving effect to adviser's expense limitation undertaking.
If the Fund had paid all of its expenses, the ratio would have been 1.4%.
(b)<F6>If the Fund had paid all of its expenses, the ratio would have
been (0.9%).

FOR THE
EASTCLIFF TOTAL FOR THE PERIOD FROM YEARS ENDED SEPTEMBER 30,
RETURN FUND YEAR ENDED OCTOBER 1, 1994 ------------------------------------------------------------------
JUNE 30, 1996 TO JUNE 30, 1995 1994 1993 1992 1991 1990 1989 1988 1987+<F7>
------------- ----------------- ----- ------ ------ ------- ----- ------ ------ ------
<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 0.09 0.14 0.15 0.19 0.13 0.28 0.33 0.24 0.06 --

Net realized and
unrealized gains (losses)
on investments 2.90 0.71 0.12 1.28 1.27 2.30 (1.82) 1.40 (1.17) 3.94
------ ------ ------ ------ ------ ------ ------ ------ ------- -------
Total from investment
operations 2.99 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 (0.17) (0.14) (0.18) (0.15) (0.23) (0.36) (0.26) (0.11) -- --
Distributions from
net realized gains (0.16) (0.67) (0.55) (0.90) (0.77) (0.13) (0.18) (0.01) (2.95) --
------ ------ ------ ------ ------ ------ ------ ------ ------- -------
Total from distributions (0.33) (0.81) (0.73) (1.05) (1.00) (0.49) (0.44) (0.12) (2.95) --
------ ------ ------ ------ ------ ------ ------ ------ ------- -------
Net asset value,
end of period $14.62 $11.96 $11.92 $12.38 $11.96 $11.56 $9.47 $11.40 $9.88 $13.94
------ ------ ------ ------ ------ ------ ------ ------ ------- -------
------ ------ ------ ------ ------ ------ ------ ------ ------- -------

TOTAL INVESTMENT
RETURN (d)<F11> 25.4% 10.4%(a)<F8> 2.2% 13.4% 13.2% 28.7% (13.5%) 16.8% (3.0%) 55.7%(a)
<F8>
RATIOS/SUPPLEMENTAL
DATA:
Net assets,
end of period (in 000's $) 17,799 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 (b)<F9> 1.3% 1.5%(a)<F8> 2.0% 2.0% 2.7% 2.0% 2.4% 3.0% 2.8% 3.0%(a)
<F8>

Ratio of net investment income
(loss) to average net assets (c)<F10> 0.7% 2.5%(a)<F8> 1.3% 1.5% 1.2% 2.4% 2.8% 2.8% 1.7% (0.1%)(a)
<F8>
Portfolio turnover rate 95.1% 89.4% 13.2% 28.0% 34.9% 38.0% 62.7% 27.2% 51.9% 169.7%

+<F7>For the period from December 23, 1986 (commencement of operations) to
September 30, 1987.
(a)<F8>Annualized.
(b)<F9>Computed after giving effect to adviser's expense limitation undertaking.
If the 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: 1.6%, 2.6%(a),
3.0%, 2.8%, 3.3%, 3.2%, 3.1%, 4.4%, 11.8% and 12.1%(a), respectively.

(c)<F10>If the 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:
0.4%, 1.4%(a), 0.2%, 0.8%, 0.6%, 1.3%, 2.1%, 1.4%, (7.4%) and (9.8%)(a),
respectively.

(d)<F11>Effective December 31, 1994, the Fund changed investment advisers from
Fiduciary Management, Inc. to Resource Capital Advisers, Inc.

</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 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.

EQUITY SECURITIES GENERALLY. Market prices of equity securities generally, and
of particular companies' equity securities, are frequently subject to
significant volatility. Investors should be aware 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's 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.<R/>

FOREIGN SECURITIES. The Total Return Fund may invest up to 25% and the Growth
Fund up to 20% of their respective 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 that 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 managers 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 respective 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 expects 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 (after waivers)
paid by the Growth Fund and the Total Return Fund in the fiscal year ended
June 30, 1996 were equal to 0.96% and 0.77%, 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 and have been so since July 1, 1995. Mr. Winslow has
served as President, Chief Executive Officer, director and portfolio manager of
WCM since 1992. Prior to such time, he was senior vice president and portfolio
manager at Alliance Capital Management from 1987 to 1992 and portfolio manager
at John W. Bristol & Co. from 1980 to 1987. Mr. Pyle has served as Executive
Vice President, Chief Financial Officer, Treasurer, director and portfolio
manager of WCM since 1992. Prior to that time, he was a portfolio manager at
Norwest Capital Advisers from March 1992 to May 1992 and a Research Analyst at
Piper Jaffray Inc. from 1982 to 1992. Mr. Knappenberger has been Executive Vice
President, Secretary, director and portfolio manager of WCM since 1993. Prior to
joining WCM, he was President, Treasurer and a director of Jundt Associates,
Inc. from 1989 to 1993, portfolio manager of such firm from 1984 to 1989, and
senior vice president and senior portfolio manager at Investors Diversified
Services from 1977 to 1984. 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, Senior Vice President and Portfolio Manager of PBIA,
are primarily responsible for the day-to-day management of the Total Return
Fund's portfolio and have been so since July 1, 1995. Mr. Keresey and Ms.
Neverett have been employed by PBIA in various capacities since PBIA was founded
in August 1990. 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 in equal parts 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. 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.

Prior to founding WP on June 1, 1996, Mr. Jensen, Ms. Lilly and Mr. Rinkoff
were employed at First Asset Management, a division of First Bank National
Association - Mr. Jensen since 1967, Ms. Lilly since 1992 and Mr. Rinkoff since
1977. While at First Asset Management, Ms. Lilly and Mr. Rinkoff served as
portfolio managers for the Regional Equity Fund, a series of First American
Investment Funds, Inc., and for various other similarly managed private accounts
(collectively, the "Regional Small Cap Value Accounts"), all of which were
managed using substantially similar, though not in all cases identical,
investment objectives, strategies and techniques as those contemplated for use
by the Value Fund. See "Investment Objectives and Policies." Mr. Rinkoff alone
managed the Regional Small Cap Value Accounts from 1981 to April 1994 and, with
Ms. Lilly, co-managed such Accounts from April 1994 through their departure from
First Asset Management on May 31, 1996. In addition, Mr. Jensen, Ms. Lilly and
Mr. Rinkoff served, with certain of their colleagues, as members of a committee
managing other accounts with investment objectives and strategies significantly
different from those employed by the Regional Small Cap Value Accounts or to be
employed by the Value Fund.

Set forth below is composite historical performance data relating to the
Regional Small Cap Value Accounts, measured against relevant broad-based market
indices. The Regional Small Cap Value Accounts include all portfolios managed by
Ms. Lilly and Mr. Rinkoff with objectives, strategies and techniques
substantially similar to those to be employed by the Value Fund. 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 estimated annual operating expenses for the Value Fund of 1.3% of
average assets, which expenses were higher than those actually incurred by the
composite. The Regional Small Cap Value Accounts (other than the Regional Equity
Fund series of First American Investment Funds, Inc.) were not subject to
certain investment limitations, diversification requirements and other
restrictions imposed by the Act and the Internal Revenue Code, which, if
applicable, may have adversely affected the performance results of the
composite.

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)<F12>
(For the Period Ended December 31, 1995)

15 Years 10 Years 5 Years 3 Years 1Year
-------- -------- ------- ------- -----

Regional Small Cap
Value Accounts Composite(2)<F13> 15.4 16.0 27.0 22.3 49.1

S&P 500 Index(3)<F14> 14.8 14.9 16.6 15.3 37.6

Russell 2000 Index(4)<F15> 12.5 11.3 21.0 14.4 28.4

(1)<F12>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)<F13>As indicated above, Mr. Rinkoff alone managed the Regional Small Cap
Value Accounts from 1981 to April 1994 and, with Ms. Lilly, co-managed such
Accounts from April 1994 through May 31, 1996.

(3)<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.

(4)<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 0.18% and 0.20%, 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 ANY 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 trustdocument 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 (1-800-595-5519), 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) 595-5519 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 59-1/2, and must begin by
April 1 following the calendar year end in which a person reaches age 70-1/2.
Excess contributions, certain distributions prior to age 59-11/42 and failure to
begin distributions after age 70-1/2 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 1-800-595-5519 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 Growth 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 12
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 1-800-595-5519 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 1-800-595-
5519 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 $20 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) 595-5519 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.

- ------------------------------------------------------------------------------
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
1-800-595-5519
or
414-765-4124

INDEPENDENT ACCOUNTANTS
PRICE WATERHOUSE LLP
3100 Multifoods Tower
33 South Sixth Street
Minneapolis, Minnesota 55402

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

<PAGE>

STATEMENT OF ADDITIONAL INFORMATION September 16, 1996

EASTCLIFF FUNDS, INC.
900 Second Avenue South
Suite 300
Minneapolis, Minnesota 55402

This Statement of Additional Information is not a prospectus and
should be read in conjunction with the prospectus of Eastcliff Funds, Inc.
dated September 16, 1996. Requests for copies of the prospectus should be
made in writing to Eastcliff Funds, Inc., 900 Second Avenue South, Suite
300, Minneapolis, Minnesota 55402, Attention: Corporate Secretary, or by
calling (612) 336-1444.

EASTCLIFF FUNDS, INC.

Table of Contents

Page No.

General Information and History . . . . . . . . . . . . . . . . . . . . 1

Investment Restrictions . . . . . . . . . . . . . . . . . . . . . . . . 1

Investment Considerations . . . . . . . . . . . . . . . . . . . . . . . 3

Directors and Officers of the Corporation . . . . . . . . . . . . . . . 12

Ownership of Management and Principal Shareholders . . . . . . . . . . 15

Investment Adviser, Portfolio Managers and Administrator . . . . . . . 16

Determination of Net Asset Value and Performance . . . . . . . . . . . 20

Distribution of Shares . . . . . . . . . . . . . . . . . . . . . . . . 23

Allocation of Portfolio Brokerage . . . . . . . . . . . . . . . . . . . 23

Custodian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Shareholder Meetings . . . . . . . . . . . . . . . . . . . . . . . . . 26

Independent Accountants . . . . . . . . . . . . . . . . . . . . . . . . 28

Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . 28

Description of Securities Ratings . . . . . . . . . . . . . . . . . . . 28

No person has been authorized to give any information or to make
any representations other than those contained in this Statement of
Additional Information and the Prospectus dated September 16, 1996 and, if
given or made, such information or representations may not be relied upon
as having been authorized by Eastcliff Funds, Inc.

The Statement of Additional Information does not constitute an
offer to sell securities.

GENERAL INFORMATION AND HISTORY

Eastcliff Funds, Inc., a Wisconsin corporation organized on May
23, 1986 (the "Corporation"), is an open-end, diversified management
investment company consisting of three portfolios, Eastcliff Growth Fund
(the "Growth Fund"), Eastcliff Total Return Fund (the "Total Return Fund")
and Eastcliff Regional Small Capitalization Value Fund (the "Value Fund")
(collectively, the "Eastcliff Funds" or the "Funds"). The Corporation was
called "Fiduciary Total Return Fund, Inc." prior to December 23, 1994.

INVESTMENT RESTRICTIONS

As set forth in the prospectus dated September 16, 1996 of the
Corporation under the caption "Investment Objectives and Policies", the
investment objective of the Growth Fund is to produce long-term growth of
capital by investing principally in equity securities. 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. The investment objective of the Value Fund
is to produce capital appreciation. Consistent with these investment
objectives, each of the Funds has adopted the following investment
restrictions which are matters of fundamental policy. Each Fund's
fundamental investment policies cannot be changed without approval of the
holders of the lesser of: (i) 67% of that Fund's shares present or
represented at a shareholders' meeting at which the holders of more than
50% of such shares are present or represented; or (ii) more than 50% of
the outstanding shares of that Fund.

1. None of the Funds will purchase securities on margin,
participate in a joint-trading account, sell securities short, or write or
invest in put or call options, except that (a) the Growth Fund may invest
for hedging purposes up to 5% of its net assets in put or call options and
options on futures contracts and up to 5% of its net assets in futures
contracts, and (b) the Value Fund may write or invest in put and call
options to the extent permitted by the Investment Company Act of 1940. No
Fund's investments in warrants, valued at the lower of cost or market,
will exceed 5% of the value of such Fund's net assets.

2. None of the Funds will borrow money or issue senior
securities, except for temporary bank borrowings (not in excess of 5% of
the value of its net assets) or for emergency or extraordinary purposes,
and none of the Funds will pledge any of its assets, except to secure
borrowings and only to an extent not greater than 10% of the value of such
Fund's net assets.

3. None of the Funds will lend money (except by purchasing
publicly distributed debt securities or entering into repurchase
agreements provided that repurchase agreements maturing in more than seven
days plus all other illiquid securities will not exceed 10% of such Fund's
net assets) or will lend its portfolio securities. A repurchase agreement
involves a sale of securities to a Fund with the concurrent agreement of
the seller to repurchase the securities at the same price plus an amount
equal to an agreed upon interest rate, within a specified time. In the
event of a bankruptcy or other default of a seller of a repurchase
agreement, such Fund could experience both delays in liquidating the
underlying securities and losses, including: (a) possible decline in
value of the collateral during the period while such Fund seeks to enforce
its rights thereto; (b) possible decreased levels of income during this
period; and (c) expenses of enforcing its rights.

4. None of the Funds will make investments for the purpose of
exercising control or management of any company.

5. None of the Funds will purchase securities of any issuer
(other than the United States or an agency or instrumentality of the
United States) if, as a result of such purchase, such Fund would hold more
than 10% of any class of securities, including voting securities, of such
issuer or more than 5% of such Fund's assets, taken at current value,
would be invested in securities of such issuer, except that up to 25% of
the Value Fund's assets may be invested without regard to these
limitations.

6. None of the Funds will concentrate more than 25% of the
value of its net assets, determined at the time an investment is made,
exclusive of government securities, in securities issued by companies
primarily engaged in the same industry.

7. None of the Funds will acquire or retain any security
issued by a company, an officer or director of which is an officer or
director of the Corporation or an officer, director or other affiliated
person of any Fund's investment adviser.

8. None of the Funds will acquire or retain any security
issued by a company if any of the directors or officers of the
Corporation, or directors, officers or other affiliated persons of any
Fund's investment adviser, beneficially own more than 1/2% of such
company's securities and all of the above persons owning more than 1/2%
own together more than 5% of its securities.

9. None of the Funds will act as an underwriter or distributor
of securities other than shares of the Corporation or will purchase any
securities which are restricted from sale to the public without
registration under the Securities Act of 1933, as amended.

10. None of the Funds will purchase oil, gas or other mineral
leases or any interest in any oil, gas or any other mineral exploration or
development program.

11. None of the Funds will purchase or sell real estate, real
estate mortgage loans or real estate limited partnerships.

12. None of the Funds will purchase or sell commodities or
commodities contracts, except that the Growth Fund may invest in futures
contracts and options on future contracts to the extent set forth in
Investment Restriction No. 1 above.

13. The Total Return Fund will not invest more than 5% of its
total assets, and each of the Growth Fund and the Value Fund will not
invest more than 10% of its total assets, in securities of issuers which
have a record of less than three years of continuous operation, including
the operation of any 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.

The following investment limitation is not fundamental, and may
be changed without shareholder approval.

1. None of the Funds will purchase securities of other
investment companies except (a) as part of a plan of merger, consolidation
or reorganization approved by the shareholders of such Fund; (b)
securities of money market mutual funds; or (c) securities of registered
closed-end investment companies on the open market where no commission or
profit results, other than the usual and customary broker's commission.
No purchases described in (b) and (c) will be made if as a result of such
purchase such Fund would hold more than 3% of any class of securities,
including voting securities, of any registered investment company or more
than 5% of such Fund's assets, taken at current value, would be invested
in the securities of any registered investment company or in securities of
registered closed-end investment companies.

INVESTMENT CONSIDERATIONS

Low-Rated Securities

As set forth in the Funds' prospectus dated September 16, 1996
under the caption "Investment Practices and Risks", each of the Funds will
limit its investments in convertible securities to those for which such
Fund's investment adviser believes (a) the underlying common stock is a
suitable investment for that Fund and (b) a greater potential for total
return exists by purchasing the convertible security because of its higher
yield. Moreover, 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.

Corporate obligations rated less than investment grade
(hereinafter referred to as "low-rated securities") are commonly referred
to as "junk bonds", and while generally offering higher yields than
investment grade securities with similar maturities, involve greater
risks, including the possibility of default or bankruptcy. They are
regarded as predominantly speculative with respect to the issuer's
capacity to pay interest and repay principal. The special risk
considerations in connection with investments in low-rated securities are
discussed below.

Effect of Interest Rates and Economic Changes. Even though the exposure
of each of the Funds to the low-rated security market is limited to a
maximum of 5% of its net assets, the Funds are required to provide the
following discussion of such market.

The low-rated security market is relatively new and its growth
paralleled a long economic expansion. As a result, it is not clear how
this market may withstand a prolonged recession or economic downturn.
Such a prolonged economic downturn could severely disrupt the market for
and adversely affect the value of high-yield securities.

Interest-bearing securities typically experience appreciation
when interest rates decline and depreciation when interest rates rise.
The market values of low-rated securities tend to reflect individual
corporate developments to a greater extent than do higher rated
securities, which react primarily to fluctuations in the general level of
interest rates. Low-rated securities also tend to be more sensitive to
economic conditions than are higher-rated securities. As a result, they
generally involve more credit risks than securities in the higher-rated
categories. During an economic downturn or a sustained period of rising
interest rates, highly leveraged issuers of low-rated securities may
experience financial stress and may not have sufficient revenues to meet
their payment obligations. The issuer's ability to service its debt
obligations may also be adversely affected by specific corporate
developments, or the issuer's inability to meet specific projected
business forecasts or the unavailability of additional financing. The
risk of loss due to default by an issuer of low-rated securities is
significantly greater than issuers of higher-rated securities because such
securities are generally unsecured and are often subordinated to other
creditors. Further, if the issuer of a low-rated security defaulted, the
applicable Fund might incur additional expenses in seeking recovery.
Periods of economic uncertainty and changes would also generally result in
increased volatility in the market prices of low-rated securities and thus
in the applicable Fund's net asset value.

As previously stated, the value of a low-rated security
generally will decrease in a rising interest rate market, and accordingly,
so normally will the applicable Fund's net asset value. If such Fund
experiences unexpected net redemptions in such a market, it may be forced
to liquidate a portion of its portfolio securities without regard to their
investment merits. Due to the limited liquidity of low-rated securities
(discussed below), the Fund may be forced to liquidate these securities at
a substantial discount. Any such liquidation would reduce the Fund's
asset base over which expenses could be allocated and could result in a
reduced rate of return for the Fund.

Payment Expectations. Low-rated securities typically contain redemption,
call or prepayment provisions which permit the issuer of such securities
containing such provisions to, at their discretion, redeem the securities.
During periods of falling interest rates, issuers of low-rated securities
are likely to redeem or prepay the securities and refinance them with debt
securities with a lower interest rate. To the extent an issuer is able to
refinance the securities or otherwise redeem them, the applicable Fund may
have to replace the securities with a lower yielding security which would
result in lower returns for the Fund.

Credit Ratings. Credit ratings issued by credit rating agencies evaluate
the safety of principal and interest payments of rated securities. They
do not, however, evaluate the market value risk of low-rated securities
and therefore may not fully reflect the true risks of an investment. In
addition, credit rating agencies may or may not make timely changes in a
rating to reflect changes in the economy or in the condition of the issuer
that affect the market value of the security. Consequently, credit
ratings are used only as a preliminary indicator of investment quality.

Liquidity and Valuation. A Fund may have difficulty disposing of certain
low-rated securities because there may be a thin trading market for such
securities. Because not all dealers maintain markets in all low-rated
securities there is no established retail secondary market for many of
these securities. The Funds anticipate that such securities could be sold
only to a limited number of dealers or institutional investors. To the
extent a secondary trading market does exist, it is generally not as
liquid as the secondary market for higher rated securities. The lack of a
liquid secondary market may have an adverse impact on the market price of
the security, and accordingly, the net asset value of a particular Fund
and its ability to dispose of particular securities when necessary to meet
its liquidity needs, or in response to a specific economic event, or an
event such as a deterioration in the creditworthiness of the issuer. The
lack of a liquid secondary market for certain securities may also make it
more difficult for a Fund to obtain accurate market quotations for
purposes of valuing their respective portfolios. Market quotations are
generally available on many low-rated issues only from a limited number of
dealers and may not necessarily represent firm bids of such dealers or
prices for actual sales. During periods of thin trading, the spread
between bid and asked prices is likely to increase significantly. In
addition, adverse publicity and investor perceptions, whether or not based
on fundamental analysis, may decrease the values and liquidity of
high-yield securities, especially in a thinly-traded market.

Hedging Instruments

As set forth above under the caption "Investment Restrictions",
the Growth Fund may invest up to 5% of its net assets in put or call
options and options on futures contracts and up to 5% of its net assets in
futures contracts. Similarly, as set forth in the Prospectus under the
caption "Investment Objectives and Policies -- Eastcliff Regional Small
Capitalization Value Fund", the Value Fund 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, provided not more
than 5% of the Value Fund's net assets will be invested in put and call
options and the premiums 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. The foregoing investments will be effected
during periods of anticipated market weakness and will not result in
leveraging of the applicable Fund's portfolio.

Futures Contracts. When the Growth Fund purchases a futures contract, it
agrees to purchase a specified underlying instrument at a specified future
date. When the Growth Fund sells a futures contract, it agrees to sell
the underlying instrument at a specified future date. The price at which
the purchase and sale will take place is fixed when the Growth Fund enters
into the contract. Futures can be held until their delivery dates, or can
be closed out before then if a liquid secondary market is available.

The value of a futures contract tends to increase and decrease
in tandem with the value of its underlying instrument. Therefore,
purchasing futures contracts will tend to increase the Growth Fund's
exposure to positive and negative price fluctuations in the underlying
instrument, much as if the Growth Fund had purchased the underlying
instrument directly. When the Growth Fund sells a futures contract, by
contrast, the value of its future position will tend to move in a
direction contrary to the market. Selling futures contracts, therefore,
will tend to offset both positive and negative market price changes, much
as if the underlying instrument had been sold.

Futures Margin Payments. The purchaser or seller of a futures contract is
not required to deliver or pay for the underlying instrument unless the
contract is held until the delivery date. However, both the purchaser and
seller are required to deposit "initial margin" with a futures broker,
known as a Futures Commission Merchant ("FCM"), when the contract is
entered into. Initial margin deposits are equal to a percentage of the
contract's value. If the value of either party's position declines, that
party will be required to make additional "variation margin" payments to
settle the change in value on a daily basis. The party that has a gain
may be entitled to receive all or a portion of this amount. Initial and
variation margin payments do not constitute purchasing securities on
margin for purposes of the Growth Fund's investment limitations. In the
event of the bankruptcy of an FCM that holds margin on behalf of the
Growth Fund, such Fund may be entitled to return of margin owed to it only
in proportion to the amount received by the FCM's other customers,
potentially resulting in losses to the Fund.

Purchasing Put and Call Options. By purchasing a put option, the Growth
Fund or the Value Fund, as the case may be, obtains the right (but not the
obligation) to sell the option's underlying instrument at a fixed strike
price. In return for this right, the Fund pays the current market price
for the option (known as the option premium). The Growth Fund may
purchase options on futures contracts, as well as options on equity
securities and stock indices. The Value Fund may purchase options on
equity securities and on stock indices. The Growth Fund or the Value
Fund, as the case may be, may terminate its position in a put option it
has purchased by allowing it to expire or by exercising the option. If
the option is allowed to expire, the Fund will lose the entire premium it
paid. If a Fund exercises the option, it completes the sale of the
underlying instrument at the strike price. Such Fund may also terminate a
put option position by closing it out in the secondary market at its
current price, if a liquid secondary market exists. The buyer of a put
option can expect to realize a gain if security prices fall substantially.
However, if the underlying instrument's price does not fall enough to
offset the cost of purchasing the option, a put buyer can expect to suffer
a loss (limited to the amount of the premium paid, plus related
transaction costs).

The features of call options are essentially the same as those
of put options, except that the purchaser of a call option obtains the
right to purchase, rather than sell, the underlying instrument at the
option's strike price. A call buyer attempts to participate in potential
price increases of the underlying instrument with risk limited to the cost
of the option if security prices fall. At the same time, the buyer can
expect to suffer a loss if security prices do not rise sufficiently to
offset the cost of the option. Only exchange listed options will be
acquired.

Stock Index Options. Stock index options are put options and call options
on various stock indexes. In most respects, they are identical to listed
options on common stocks. The primary difference between stock options
and index options occurs when index options are exercised. In the case of
stock options, the underlying security, common stock, is delivered.
However, upon the exercise of an index option, settlement does not occur
by delivery of the securities comprising the index. The option holder who
exercises the index option receives an amount of cash if the closing level
of the stock index upon which the option is based is greater than, in the
case of a call, or less than, in the case of a put, the exercise price of
the option. This amount of cash is equal to the difference between the
closing price of the stock index and the exercise price of the option
expressed in dollars times a specified multiple. A stock index fluctuates
with changes in the market value of the stocks included in the index. For
example, some stock index options are based on a broad market index, such
as the Standard & Poor's 500 or the Value Line Composite Index, or a
narrower market index, such as the Standard & Poor's 100. Indexes also
may be based on an industry or market segment, such as the AMEX Oil and
Gas Index or the Computer and Business Equipment Index. Options on stock
indexes are currently traded on the following exchanges: the Chicago
Board Options Exchange, the New York Stock Exchange, the American Stock
Exchange, the Pacific Stock Exchange, and the Philadelphia Stock Exchange.

Writing Call and Put Options. When the Growth Fund or the Value Fund, as
the case may be, writes a call option, it receives a premium and agrees to
sell the related investments to a purchaser of the call during the call
period (usually not more than nine months) at a fixed exercise price
(which may differ from the market price of the related investments)
regardless of market price changes during the call period. If the call is
exercised, the Fund forgoes any gain from an increase in the market price
over the exercise price. When writing an option on a futures contract the
Growth Fund will be required to make margin payments to an FCM as
described above for futures contracts.

To terminate its obligations on a call which it has written,
the Growth Fund or the Value Fund, as the case may be, may purchase a call
in a "closing purchase transaction." (As discussed above, such Funds may
also purchase calls other than as part of such closing transactions.) A
profit or loss will be realized depending on the amount of option
transaction costs and whether the premium previously received is more or
less than the price of the call purchased. A profit may also be realized
if the call lapses unexercised, because the Fund retains the premium
received. Any such profits are considered short-term gains for federal
income tax purposes and, when distributed, are taxable as ordinary income.

Writing calls generally is a profitable strategy if prices
remain the same or fall. Through receipt of the option premium, a call
writer mitigates the effects of a price decline. At the same time,
because a call writer must be prepared to deliver the underlying
instrument in return for the strike price, even if its current value is
greater, a call writer gives up some ability to participate in security
price increases.

When a Fund writes a put option, it takes the opposite side of
the transaction from the option's purchaser. In return for receipt of a
premium, the Fund assumes the obligation to pay the strike price for the
option's underlying instrument if the other party to the option chooses to
exercise it. The Growth Fund may only write covered puts and the Value
Fund currently will not write put options. For a put to be covered, the
Growth Fund must maintain in a segregated account cash or high-quality,
short-term readily marketable obligations equal to the option price. A
profit or loss will be realized depending on the amount of option
transaction costs and whether the premium previously received is more or
less than the put purchased in a closing purchase transaction. A profit
may also be realized if the put lapses unexercised because the Fund
retains the premium received. Any such profits are considered short-term
gains for federal income tax purposes and, when distributed, are taxable
as ordinary income.

Combined Option Positions. The Growth Fund or the Value Fund may purchase
and write options (subject to the limitations discussed above) in
combination with each other to adjust the risk and return characteristics
of the overall position. For example, either Fund may purchase a put
option and write a call option on the same underlying instrument, in order
to construct a combined position whose risk and return characteristics are
similar to selling a futures contract. Another possible combined position
would involve writing a call option at one strike price and buying a call
option at a lower price, in order to reduce the risk of the written call
option in the event of a substantial price increase. Because combined
options involve multiple trades, they result in higher transaction costs
and may be more difficult to open and close out.

Correlation of Price Changes. Because there a limited number of types of
exchange-traded options and futures contracts, it is likely that the
standardized contracts available will not match the applicable Fund's
current or anticipated investments. The Growth Fund or the Value Fund may
invest in options and (with respect to the Growth Fund only) futures
contracts based on securities which differ from the securities in which it
typically invests. This involves a risk that the options or futures
position will not track the performance of the Fund's investments.

Options and futures prices can also diverge from the prices of
their underlying instruments, even if the underlying instrument match the
applicable Fund's investments well. Options and future prices are
affected by such factors as current and anticipated short-term interest
rates, changes in volatility of the underlying instrument, and the time
remaining until expiration of the contract, which may not affect security
prices the same way. Imperfect correlation may also result from differing
levels of demand in the options and futures markets and the securities
markets, from structural differences in how options and futures and
securities are traded, or from imposition of daily price fluctuation
limits or trading halts. The Growth Fund and the Value Fund may purchase
or sell options and (with respect to the Growth Fund only) futures
contracts with a greater or less value than the securities it wishes to
hedge or intends to purchase in order to attempt to compensate for
differences in historical volatility between the contract and the
securities, although this may not be successful in all cases. If price
changes in the applicable Fund's options or futures positions are poorly
correlated with its other investments, the positions may fail to produce
anticipated gains or result in losses that are not offset by gains in
other investments. Successful use of these techniques requires skills
different from those needed to select portfolio securities.

Liquidity of Options and Futures Contracts. There is no assurance a
liquid secondary market will exist for any particular options or futures
contract at any particular time. Options may have relatively low trading
volume and liquidity if their strike prices are not close to the
underlying instruments' current price. In addition, exchanges may
establish daily price fluctuation limits for options and futures
contracts, and may halt trading if a contract's price moves upward or
downward more than the limit in a given day. On volatile trading days
when the price fluctuation limit is reached or a trading halt is imposed,
it may be impossible for the Growth Fund or the Value Fund, as the case
may be, to enter into new positions or close out existing positions. If
the secondary market for a contract is not liquid because of price
fluctuation limits or otherwise, it could prevent prompt liquidation of
unfavorable positions, and potentially could require the applicable Fund
to continue to hold a position until delivery or expiration regardless of
changes in its value. As a result, such Fund's access to other assets
held to cover its options or futures positions could also be impaired.

Asset Coverage for Futures and Option Positions. The Growth Fund and the
Value Fund will comply with guidelines established by the Securities and
Exchange Commission with respect to coverage of options and futures
strategies by mutual funds, and if the guidelines so require will set
aside U.S. Government securities, cash or liquid high grade debt
securities in a segregated custodial account in the amount prescribed.
Securities held in a segregated account cannot be sold while the futures
or option strategy is outstanding, unless they are replaced with other
suitable assets. As a result, there is a possibility that segregation of
a portion of the applicable Fund's assets could impede portfolio
management or such Fund's ability to meet redemption requests or other
current obligations.

Possible Tax Limitations on Portfolio and Hedging Strategies. The
Corporation intends that each of the Growth Fund and the Value Fund
qualify as a regulated investment company under Subchapter M of the
Internal Revenue Code for each taxable year. In order to so qualify, each
of such Funds must, among other things, derive less than 30% of its gross
income from the sale or other disposition of stock or securities (or
options thereon) held less than three months. Due to this limitation,
each of such Funds will limit the extent to which it engages in the
following activities, but will not be precluded from them: (i) selling
investments, including futures, held for less than three months, whether
or not they were purchased on the exercise of a call; (ii) the writing of
calls on investments held less than three months; (iii) the writing or
purchasing of calls or the purchasing of puts which expire in less than
three months; (iv) effecting closing transactions with respect to calls
written or purchased or puts purchased less than three months previously;
and (v) exercising certain puts or calls held for less than three months.

Special Risks of Hedging and Income Enhancement Strategies. Participation
in the options or futures markets involves investment risks and
transactions costs to which the Growth Fund or the Value Fund, as
applicable, would not be subject absent the use of these strategies. If
the applicable Fund's portfolio manager(s)' prediction of movements in the
direction of the securities and interest rate markets are inaccurate, the
adverse consequences to such Fund may leave such Fund in a worse position
than if such strategies were not used. Risks inherent in the use of
futures contracts and options on futures contracts include: (1)
dependence on the portfolio manager(s)' ability to predict correctly
movements in the direction of interest rates, securities prices and
currency markets; (2) imperfect correlation between the price of options
and futures contracts and options thereon and movements in the prices of
the securities being hedged; (3) the fact that skills needed to use these
strategies are different from those needed to select portfolio securities;
(4) the possible absence of a liquid secondary market for any particular
instrument at any time; and (5) the possible need to defer closing out
certain hedged positions to avoid adverse tax consequences.

DIRECTORS AND OFFICERS OF THE CORPORATION

The name, age, address, principal occupation(s) during the past
five years and other information with respect to each of the directors and
officers of the Corporation are as follows:

CONLEY BROOKS, JR.*

900 Second Avenue South
Suite 300
Minneapolis, Minnesota 55402
(PRESIDENT AND A DIRECTOR OF THE CORPORATION)

Mr. Brooks, age 51, has been President of Brooks Associates,
Inc., an asset and investment management firm, since 1982 and Chairman of
the Board of Resource Companies, Inc. since 1992. Resource Companies,
Inc. is a bank holding company which owns Resource Trust Company, the
corporate parent of Resource Capital Advisers, Inc. Mr. Brooks has been
President and a director of the Corporation since December, 1994.

JOHN J. FAUTH

3100 Metropolitan Centre
333 South Seventh Street
Minneapolis, Minnesota 55402
(A DIRECTOR OF THE CORPORATION)

Mr. Fauth, age 51, has been Chairman and Chief Executive
Officer of The Churchill Companies, a private investment company, since
April, 1982. He has been a director of the Corporation since December,
1994.

A. SKIDMORE THORPE

4900 IDS Center
80 South Eighth Street
Minneapolis, Minnesota 55402
(A DIRECTOR OF THE CORPORATION)

Mr. Thorpe, age 67, is a private investor; he has been Chairman
of Andrus California Timberland Partnerships, a private investment firm,
since 1988. Mr. Thorpe has been a director of the Corporation since
December, 1994.

E. THOMAS WELCH*

900 Second Avenue South
Suite 300
Minneapolis, Minnesota 55402
(VICE PRESIDENT AND A DIRECTOR OF THE CORPORATION)

Mr. Welch, age 57, has been President and Managing Director of
Resource Trust Company since 1984, President of Resource Companies, Inc.
since January, 1990 and Chief Operating Officer of Resource Capital
Advisers, Inc. since February, 1992. He has served as Vice President and
a director of the Corporation since December, 1994.

JOHN A. CLYMER

900 Second Avenue South
Suite 300
Minneapolis, Minnesota 55402
(VICE PRESIDENT OF THE CORPORATION)

Mr. Clymer, age 48, has been a Managing Director of Resource
Trust Company and President of Resource Capital Advisers, Inc. since 1994.
Prior to joining the Resource companies, he was president of Minnesota
Mutual Life Insurance Company, and had held various positions within
Minnesota Mutual Life Insurance Company since 1972.

DONALD S. WILSON*

225 East Mason Street
Milwaukee, Wisconsin 53202
(SECRETARY, TREASURER AND A DIRECTOR OF THE CORPORATION)

Mr. Wilson, age 53, co-founded Fiduciary Management, Inc., a
Milwaukee, Wisconsin, investment advisory firm, in 1980 and has served as
a director and in various executive capacities since that time, including
as President and Treasurer since 1987. Mr. Wilson has served in various
capacities with the Corporation since its inception in 1986. He has been
a director of the Corporation since 1987. From 1986 through December,
1994, Mr. Wilson served as Vice President and Assistant Secretary. He has
been Secretary and Treasurer of the Corporation since December, 1994.

A. RODNEY BOREN

900 Second Avenue South
Suite 300
Minneapolis, Minnesota 55402
(INVESTMENT OFFICER OF THE CORPORATION)

Mr. Boren, age 50, has been a Managing Director of Resource
Trust Company since January, 1996. Prior to joining Resource Trust
Company, he was with Norwest Bank since 1974, most recently serving as
Executive Vice President, Norwest Institutional Trust Services, from 1990
to 1995. Mr. Boren has been an Investment Officer of the Corporation
since February, 1996.

THOMAS M. KERESEY

249 Royal Palm Way
Suite 400
Palm Beach, Florida 33480
(INVESTMENT OFFICER OF THE CORPORATION)

Mr. Keresey, age 65, has been a Chairman and Chief Investment
Officer of Palm Beach Investment Advisers, Inc. ("PBIA") since February,
1990. Prior to founding PBIA, he was Chairman of Palm Beach Capital
Management, an independent counseling firm advising the ABT family of
mutual funds, as well as private and institutional accounts. Previously,
he served as Chairman and Director of the First National Bank in Palm
Beach for ten years, Executive Vice President and Director of Kidder
Peabody Company in New York, and Executive Vice President and Director of
Clark, Dodge and Company. Mr. Keresey has been an Investment Officer of
the Corporation since February, 1996.

SARAH A. HILLESHEIM

900 Second Avenue South
Suite 300
Minneapolis, Minnesota 55402
(VICE PRESIDENT AND ASSISTANT SECRETARY OF THE CORPORATION)

Ms. Hillesheim, age 35, has been employed at Resource Capital
Advisers, Inc. since 1994 and has served as a Compliance Specialist since
August, 1996. From November 1992 until June 1994, she was employed at the
Center for Diagnostic Imaging; prior to that time, she was employed at
Piper Jaffray Companies from 1985 to 1992. Ms. Hillesheim has been a Vice
President and Assistant Secretary of the Corporation since November, 1995.

_______________
* Messrs. Brooks, Welch and Wilson are directors who are "interested
persons" of the Fund as that term is defined in the Investment Company Act
of 1940.

The Corporation's standard method of compensating directors
is to pay each director who is not an officer of the Corporation a fee of
$150 for each meeting of the Board of Directors attended. During the
fiscal year ended June 30, 1996 the Corporation paid $300 in directors'
fees to the Corporation's directors who are not officers of the
Corporation. The table below sets forth the compensation paid by the
Corporation to each of the current directors of the Corporation during the
fiscal year ended June 30, 1996:

COMPENSATION TABLE
Total
Pension or Compensation
Retirement Estimated from
Aggregate Benefits Annual Corporation
Compensation Accrued As Benefits and Fund
Name of from Part of Fund Upon Complex Paid
Person Corporation Expenses Retirement to Directors

Conley Brooks, Jr. $0 $0 $0 $0

John J. Fauth $0 $0 $0 $0

A. Skidmore Thorpe $300 $0 $0 $300

E. Thomas Welch $0 $0 $0 $0

Donald S. Wilson $0 $0 $0 $0

OWNERSHIP OF MANAGEMENT AND PRINCIPAL SHAREHOLDERS

As of August 31, 1996, the Value Fund did not have any
outstanding voting securities. As of the same date, all officers and
directors of the Corporation as a group (9 persons) beneficially owned
26,513 shares of the Growth Fund (which constituted 0.71% of its then
outstanding shares) and 9,268 shares of the Total Return Fund (which
constituted 0.72% of its then outstanding shares). As of such date, the
sole beneficial holders of more than 5% of the Growth Fund's then
outstanding shares were Resource Trust Company, Suite 300, 900 Second
Avenue South, Minneapolis, Minnesota 55402, which owned 3,449,404 shares
of such Fund (constituting 92.38% of its then outstanding shares), and
Hollybrook & Company, an affiliate of Conley Brooks, Jr., which owned
210,004 shares of the Growth Fund (constituting 5.62% of its then
outstanding shares). As of same date, the sole beneficial holder of more
than 5% of the Total Return Fund's then outstanding shares was Resource
Trust Company, Suite 300, 900 Second Avenue South, Minneapolis, Minnesota
55402, which owned 1,211,480 shares, or 94.56% of the total shares of such
Fund then outstanding. Resource Trust Company, a Minnesota corporation,
is the parent company of Resource Capital Advisers, Inc., the investment
adviser to each of the Funds.

The Growth Fund, the Total Return Fund and the Corporation are
controlled by Resource Trust Company. Resource Trust Company owns
sufficient shares of the Growth Fund and the Total Return Fund to approve
or disapprove all matters brought before shareholders of such Funds,
including the election of directors of the Corporation and the approval of
auditors. The Corporation does not control any person.

INVESTMENT ADVISER, PORTFOLIO MANAGERS AND ADMINISTRATOR

As set forth in the Prospectus under the caption "Management of
the Funds" the investment adviser to each of the Funds is Resource Capital
Advisers, Inc. (the "Adviser"), the portfolio manager to the Growth Fund
is Winslow Capital Management, Inc. ("WCM"), the portfolio manager to the
Total Return Fund is Palm Beach Investment Advisers, Inc. ("PBIA") and the
portfolio manager to the Value Fund is Woodland Partners LLC ("WP"). The
Adviser 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., a Minnesota corporation. The Adviser's
executive officers include E. Thomas Welch, Chief Operating Officer, John
A. Clymer, President, Compliance Officer and Chief Investment Officer, and
Dan W. Melcher, Chief Financial Officer. The directors of the Adviser are
E. Thomas Welch, Conley Brooks, Jr. and Lyman E. Wakefield, Jr. WCM is
controlled by Clark J. Winslow, its President, Chief Executive Officer,
and principal shareholder.

Prior to December 31, 1994, the Total Return Fund's investment
adviser was Fiduciary Management, Inc. (the "Administrator"). On such
date the investment advisory agreement with the Administrator was
terminated and the Total Return Fund entered into a substantially
identical investment advisory agreement with the Adviser. Effective July
1, 1995, this investment advisory agreement was terminated and replaced
with a new investment advisory agreement described below.

Pursuant to separate investment advisory agreements entered into
between the Funds and the Adviser effective July 1, 1995 with respect to
the Growth Fund and the Total Return Fund and September 16, 1996 with
respect to the Value Fund (the "Management Agreements"), the Adviser
provides consulting, investment and administrative services to each of the
Funds. The specific investments for each Fund will be made by one or more
portfolio managers selected for such Fund by the Adviser. The Adviser has
overall responsibility for assets under management, provides overall
investment strategies and programs for the Funds, selects portfolio
managers, allocates assets among the portfolio managers and monitors and
evaluates the portfolio managers' performance. The Adviser and each of
the Funds enter into separate sub-advisory agreements with such Fund's
portfolio managers. The Adviser also provides each of the Funds with
office space, equipment and personnel necessary to operate and administer
such Fund's business and to supervise the provision of services by third
parties such as the transfer agent and the custodian. During the period
from October 1, 1994 to December 31, 1994 and the fiscal years ended
September 30, 1994 and September 30, 1993, the Total Return Fund paid the
Administrator advisory fees of $5,379, $26,332 and $27,179, respectively,
pursuant to an investment advisory agreement with compensation provisions
identical to the subsequent investment advisory agreements with the
Adviser, including the new Management Agreement described above. During
the fiscal year ended June 30, 1996 and the period from January 1, 1995
through June 30, 1995, the Total Return Fund paid the Adviser advisory
fees of $129,207 and $17,976, respectively, and the Adviser waived $38,729
and $33,908, respectively, in additional advisory fees. The Growth Fund
did not begin operations until June 30, 1995. During the fiscal year
ended June 30, 1996, the Growth Fund paid the Adviser advisory fees of
$372,152 and the Advisor waived $15,451 in additional advisory fees. The
Value Fund did not begin operations until September 16, 1996 and, thus,
such Fund had not paid the Adviser any fees as of that date.

The Adviser has undertaken to reimburse each Fund to the extent
that the aggregate annual operating expenses exceed that percentage of the
daily net assets of such Fund for such year, as determined by valuations
made as of the close of each business day of the year, which is the most
restrictive percentage provided by the state laws of the various states in
which the shares of such Fund are qualified for sale or, if the states in
which the shares of such Fund are qualified for sale impose no such
restrictions, 2%. As of the date of this Statement of Additional
Information the percentage applicable to each of the Funds is 2-1/2% on
the first $30,000,000 of its daily net assets, 2% on the next $70,000,000
of its daily net assets and 1-1/2% on daily net assets in excess of
$100,000,000. For such purposes, aggregate annual operating expenses
include investment advisory fees and administration fees but exclude
interest, taxes, brokerage commissions, fees paid pursuant to the Fund's
Distribution Plan and extraordinary items. Each Fund monitors its expense
ratio on a monthly basis. If the accrued amount of the expenses of a Fund
exceeds the expense limitation, such Fund creates an account receivable
from the Adviser for the amount of such excess. In such a situation the
monthly payment of the Adviser's fee will be reduced by the amount of such
excess, subject to adjustment month by month during the balance of such
Fund's fiscal year if accrued expenses thereafter fall below this limit.
During the period from October 1, 1994 to December 31, 1994 and the fiscal
years ended September 30, 1994 and September 30, 1993, the Administrator
reimbursed the Total Return Fund $6,505, $19,352 and $20,853,
respectively, for excess expenses pursuant to an investment advisory
agreement with an expense limitation identical to that contained in the
Management Agreement. During the fiscal year ended June 30, 1996 and the
period from January 1, 1995 to June 30, 1995, the Adviser reimbursed the
Total Return Fund $9,060 and $17,811, respectively (in addition to the
waiver of advisory fees described above), for excess expenses pursuant to
an investment advisory agreement also containing an identical expense
limitation. The Growth Fund did not begin operations until June 30, 1995.
During the fiscal year ended June 30, 1996, the Adviser reimbursed the
Growth Fund $17,342 (in addition to the waiver of advisory fees described
above) for excess expenses pursuant to its Management Agreement. The
Value Fund did not begin operations until September 16, 1996 and, thus, no
expense reimbursement was required as of that date for such Fund.
Notwithstanding the most restrictive applicable expense limitation of
state securities commissions set forth above or the terms of the
Management Agreements, the Adviser has voluntarily agreed to reimburse
each of the Funds for expenses in excess of 1.3% of such Fund's average
daily net assets during the fiscal year ending June 30, 1997.

As of the date hereof, WCM is the sole portfolio manager of the
Growth Fund, PBIA is the sole portfolio manager of the Total Return Fund,
and WP is the sole portfolio manager of the Value Fund. Each of WCM, PBIA
and WP has entered into a separate sub-advisory contract with the
applicable Fund and the Adviser (the Sub-Advisory Agreements"). Pursuant
to their respective Sub-Advisory Agreements, WCM makes specific portfolio
investments for that segment of the assets of the Growth Fund under its
management in accordance with such Fund's investment objective and WCM's
investment approach and strategies, PBIA makes specific portfolio
investments for that segment of the assets of the Total Return Fund under
its management in accordance with such Fund's investment objective and
PBIA's investment approach and strategies, and WP makes specific portfolio
investments for that segment of the assets of the Value Fund under its
management in accordance with such Fund's investment objectives and WP's
investment approach and strategies.

Portfolio managers of the Funds, including WCM, PBIA and WP, are
employed and may be terminated by the Adviser subject to prior approval by
the Board of Directors of the Corporation. The employment of a new
portfolio manager currently requires the prior approval of the
shareholders of the applicable Fund. The Corporation, however, may
request an order of the Securities and Exchange Commission exempting the
Funds from the requirements under the Investment Company Act of 1940
relating to shareholder approval of new portfolio managers. There can be
no assurance that the Corporation will request such an order, or, if
requested, that such an order will be granted with respect to the Funds.
Selection and retention criteria for portfolio managers include: (i)
their historical performance records; (ii) consistent performance in the
context of the markets and preservation of capital in declining markets;
(iii) organizational stability and reputation; (iv) the quality and depth
of investment personnel; and (v) the ability of the portfolio manager to
apply its approach consistently. Each portfolio manager will not
necessarily exhibit all of the criteria to the same degree. Portfolio
managers are paid by the Adviser (not the Funds).

The portfolio managers' activities are subject to general
supervision by the Adviser and the Board of Directors of the Corporation.
Although the Adviser and the Board do not evaluate the investment merits
of the portfolio managers' specific securities selections, they do review
the performance of each portfolio manager relative to the selection
criteria.

As set forth in the Prospectus under the caption "Management of
the Funds" the Administrator is the administrator to each of the Funds.
The Administrator is controlled by Mr. Wilson and Ted D. Kellner.
Pursuant to separate administration agreements entered into between each
of the Funds and the Administrator (the "Administration Agreements"), the
Administrator supervises all aspects of the Funds' operations except those
performed by the Adviser or the portfolio managers. In connection with
such supervision the Administrator prepares and maintains the books,
accounts and other documents required by the Investment Company Act of
1940 (the "Act"), determines the Fund's net asset value, responds to
shareholder inquiries, prepares the Fund's financial statements and excise
tax returns, prepares 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 the Fund's financial
accounts and records and generally assists in all aspects of the Fund's
operations. During the fiscal year ended June 30, 1996, the period from
October 1, 1994 to June 30, 1995 and the fiscal years ended September 30,
1994 and September 30, 1993, the Total Return Fund paid the Administrator
$33,575, $11,452, $5,267 and $5,436, respectively, pursuant to such Fund's
Administration Agreement. The Growth Fund did not commence operations
until June 30, 1995. During the fiscal year ended June 30, 1996, the
Growth Fund paid the Administrator $68,201 pursuant to such Fund's
Administration Agreement. The Value Fund did not commence operations
until September 16, 1996 and, thus, such Fund had not paid the
Administrator any fees as of that date.

Each of the Management Agreements and the Administration
Agreement relating to the Growth Fund will remain in effect for an initial
term until June 30, 1997 and thereafter as long as its continuance is
specifically approved at least annually (i) by the Board of the
Corporation or by the vote of a majority (as defined in the Act) of the
outstanding shares of the Growth Fund, and (ii) by the vote of a majority
of the directors of the Corporation who are not parties to the Management
Agreements or Administration Agreement relating to the Growth Fund or
interested persons of the Adviser or Administrator, as the case may be,
cast in person at a meeting called for the purpose of voting on such
approval. The Total Return Fund's Administration Agreement will remain in
effect as long as its continuance is specifically approved at least
annually (i) by the Board of Directors of the Corporation, or by the vote
of a majority (as defined in the Act) of the outstanding shares of the
Total Return Fund, and (ii) by the vote of a majority of the directors of
the Corporation who are not parties to the Administration Agreement
relating to the Total Return Fund or interested persons of the
Administrator, cast in person at a meeting called for the purpose of
voting on such approval. Each of the Management Agreements or
Administration Agreement relating to the Value Fund will remain in effect
for an initial term until September 16, 1998 and thereafter as long as its
continuance is specifically approved at least annually (i) by the Board of
the Corporation or by the vote of a majority (as defined in the Act) of
the outstanding shares of the Value Fund, and (ii) by the vote of a
majority of the directors of the Corporation who are not parties to the
Management Agreements or Administration Agreement relating to the Growth
Fund or interested persons of the Adviser or Administrator, as the case
may be, cast in person at a meeting called for the purpose of voting on
such approval. Each of the Management Agreements and the Administration
Agreements provides that it may be terminated at any time without the
payment of any penalty, by the Board of Directors of the Corporation or by
vote of a majority of the applicable Fund's shareholders, on sixty days'
written notice to the Adviser or the Administrator, as the case may be,
and by the Adviser or the Administrator, as the case may be, on the same
notice to the applicable Fund, and that it shall be automatically
terminated if it is assigned.

The Management Agreements, the Sub-Advisory Agreements and the
Administration Agreements provide that the Adviser, WCM, PBIA, WP and the
Administrator, as the case may be, shall not be liable to either of the
Funds or their shareholders for anything other than willful misfeasance,
bad faith, gross negligence or reckless disregard of its obligations or
duties. The Management Agreements, the Sub-Advisory Agreements and the
Administration Agreements also provide that the Adviser, WCM, PBIA, WP and
the Administrator, and their respective officers, directors and employees,
may engage in other businesses, devote time and attention to any other
business whether of a similar or dissimilar nature, and render services to
others.

DETERMINATION OF NET ASSET VALUE AND PERFORMANCE

As set forth in the Prospectus under the caption "Determination
of Net Asset Value", the net asset value of each Fund will be determined
as of the close of regular trading (currently 4:00 P.M. Eastern Time) on
each day the New York Stock Exchange is open for trading. The New York
Stock Exchange is open for trading Monday through Friday except New Year's
Day, Washington's Birthday, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day. Additionally, if any of
the aforementioned holidays falls on a Saturday, the New York Stock
Exchange will not be open for trading on the preceding Friday and when any
such holiday falls on a Sunday, the New York Stock Exchange will not be
open for trading on the succeeding Monday, unless unusual business
conditions exist, such as the ending of a monthly or the yearly accounting
period. The New York Stock Exchange may also be closed on national days
of mourning.

Any total rate of return quotation for a particular Fund will be
for a period of three or more months and will assume the reinvestment of
all dividends and capital gains distributions which were made by such Fund
during that period. Any period total rate of return quotation of a Fund
will be calculated by dividing the net change in value of a hypothetical
shareholder account established by an initial payment of $1,000 at the
beginning of the period by 1,000. The net change in the value of a
shareholder account is determined by subtracting $1,000 from the product
obtained by multiplying the net asset value per share at the end of the
period by the sum obtained by adding (A) the number of shares purchased at
the beginning of the period plus (B) the number of shares purchased during
the period with reinvested dividends and distributions. Any average
annual compounded total rate of return quotation of a Fund will be
calculated by dividing the redeemable value at the end of the period
(i.e., the product referred to in the preceding sentence) by $1,000. A
root equal to the period, measured in years, in question is then
determined and 1 is subtracted from such root to determine the average
annual compounded total rate of return.

The foregoing computation may also be expressed by the following
formula:

n
P(1+T) = ERV

P = a hypothetical initial payment of $1,000

T = average annual total return

n = number of years

ERV = ending redeemable value of a hypothetical $1,000 payment
made at the beginning of the stated periods at the end
of the stated periods.

Total return is the cumulative rate of investment growth which
assumes that income dividends and capital gains are reinvested. It is
determined by assuming a hypothetical investment at the net asset value at
the beginning of the period, adding in the reinvestment of all income
dividends and capital gains, calculating the ending value of the
investment at the net asset value as of the end of the specified time
period, subtracting the amount of the original investment, and dividing
this amount by the amount of the original investment. This calculated
amount is then expressed as a percentage by multiplying by 100.

The Growth Fund's average annual compounded return for the one-
year ended June 30, 1996 was 25.60%. The Total Return Fund's average
annual compounded returns for the one-year and five-year periods ended
June 30, 1996 and for the period from the Fund's commencement of
operations (December 30, 1986) through June 30, 1996 were 25.45%, 12.78%
and 12.71%, respectively. The Value Fund did not commence operations
until September 16, 1996.

The results below show the value of an assumed initial
investment in the Growth Fund of $10,000 made on June 30, 1995 through
June 30, 1996, assuming reinvestment of all dividends and distributions.

Value of
$10,000 Cumulative
Investment % Change

December 31, 1995 $ 10,860 + 8.6%
June 30, 1996 12,560 +25.6%

The results below show the value of an assumed initial investment
in the Total Return Fund of $10,000 made on December 30, 1986 through June
30, 1996, assuming reinvestment of all dividends and distributions.

Value of
$10,000 Cumulative
December 31, Investment % Change

1986 $10,000 ---
1987 11,225 + 12.2%
1988 13,554 + 35.5
1989 15,341 + 53.4
1990 14,663 + 46.6
1991 19,070 + 90.7
1992 21,052 +110.5
1993 23,381 +133.8
1994 22,909 +129.1
1995 28,221 +182.2
June 30, 1996 31,162 +211.6

The foregoing performance results are based on historical earnings
and should not be considered as representative of the performance of the
Growth Fund or the Total Return Fund in the future. Such performance
results also reflect reimbursements made by the Adviser to keep total fund
operating expenses at or below 1.3% of average daily net assets. An
investment in the Growth Fund or the Total Return Fund will fluctuate in
value and at redemption its value may be more or less than the initial
investment.

DISTRIBUTION OF SHARES

Each of the Funds has adopted a Distribution Plan (the "Plan") in
anticipation that such Fund will benefit from the Plan through increased
sales of shares, thereby reducing such Fund's expense ratio and providing
an asset size that allows the Adviser greater flexibility in management.
However, each of the Funds has determined not to utilize the Plan or pay
any 12b-1 fees during the fiscal year ending June 30, 1997. The Plan may
be terminated by any Fund at any time by a vote of the directors of the
Corporation who are not interested persons of the Corporation and who have
no direct or indirect financial interest in the Plan or any agreement
related thereto (the "Rule 12b-1 Directors") or by a vote of a majority of
the outstanding shares of such Fund. Messrs. Fauth and Thorpe are
currently the Rule 12b-1 Directors. Any change in the Plan that would
materially increase the distribution expenses of a particular Fund
provided for in the Plan requires approval of the shareholders of such
Fund and the Board of Directors, including the Rule 12b-1 Directors.

While the Plan is in effect, the selection and nomination of
directors who are not interested persons of the Corporation will be
committed to the discretion of the directors of the Corporation who are
not interested persons of the Corporation. The Board of Directors of the
Corporation must review the amount and purposes of expenditures pursuant
to the Plan quarterly as reported to it by a Distributor, if any, or
officers of the Corporation. The Plan will continue in effect for as long
as its continuance is specifically approved at least annually by the Board
of Directors, including the Rule 12b-1 Directors. During the fiscal year
ended September 30, 1994 the Total Return Fund incurred $8,006 of
distribution costs pursuant to the Plan, of which $7,050 related to costs
incurred with respect to various forms of advertising and sales literature
and $956 related to the cost of printing reports and prospectuses
distributed to persons other than existing shareholders of the Total
Return Fund. All of such distribution costs were reimbursed by the
Administrator. The Growth Fund did not begin operations until June 30,
1995, and such Fund has not incurred any distribution costs to date. The
Value Fund did not begin operations until September 16, 1996 and, thus,
such Fund had not incurred any distribution costs as of that date.

ALLOCATION OF PORTFOLIO BROKERAGE

Decisions to buy and sell securities for the Growth Fund are made
by the Adviser and WCM, for the Total Return Fund are made by the Adviser
and PBIA and for the Value Fund are made by the Adviser and WP, in each
case subject to review by the Corporation's Board of Directors. In
placing purchase and sale orders for portfolio securities for the Funds,
it is the policy of the Adviser, WCM, PBIA and WP to seek the best
execution of orders at the most favorable price in light of the overall
quality of brokerage and research services provided, as described in this
and the following paragraph. In selecting brokers to effect portfolio
transactions, the determination of what is expected to result in best
execution at the most favorable price involves a number of largely
judgmental considerations. Among these are the evaluation by the Adviser,
WCM, PBIA and/or WP of the broker's efficiency in executing and clearing
transactions, block trading capability (including the broker's willingness
to position securities) and the broker's financial strength and stability.
The most favorable price to a Fund means the best net price without regard
to the mix between purchase or sale price and commission, if any. Over-
the-counter securities are generally purchased and sold directly with
principal market makers who retain the difference in their cost in the
security and its selling price. In some instances, the Adviser, WCM, PBIA
or WP may feel that better prices are available from non-principal market
makers who are paid commissions directly. Although none of the Funds
intends to market its shares through intermediary broker-dealers, a Fund
may place portfolio orders with broker-dealers who recommend the purchase
of such Fund's shares to clients if the Adviser, WCM, PBIA or WP, as the
case may be, believes the commissions and transaction quality are
comparable to that available from other brokers and may allocate portfolio
brokerage on that basis.

In allocating brokerage business for the Funds, the Adviser, WCM,
PBIA and WP also take into consideration the research, analytical,
statistical and other information and services provided by the broker,
such as general economic reports and information, reports or analyses of
particular companies or industry groups, market timing and technical
information, and the availability of the brokerage firm's analysts for
consultation. While each of the Adviser, WCM, PBIA and WP believes these
services have substantial value, they are considered supplemental to the
efforts of the Adviser, WCM, PBIA or WP in the performance of its duties
under the applicable Management Agreement or Sub-Advisory Agreement.
Other clients of the Adviser, WCM, PBIA or WP may indirectly benefit from
the availability of these services to the Adviser, WCM, PBIA or WP, and
the Funds may indirectly benefit from services available to the Adviser,
WCM, PBIA or WP as a result of transactions for other clients. Each of
the Management Agreements and Sub-Advisory Agreements provides that the
Adviser, WCM, PBIA or WP, as the case may be, may 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 a securities
transaction in excess of the amount another broker would have charged for
effecting the transaction, if the Adviser, WCM, PBIA or WP determines in
good faith that such amount of commission is reasonable in relation to the
value of brokerage and research services provided by the executing broker
viewed in terms of either the particular transaction or the overall
responsibilities of the Adviser, WCM, PBIA or WP with respect to the
applicable Fund and the other accounts as to which it exercises investment
discretion. The Growth Fund did not begin operations until June 30, 1995.
During the fiscal year ended June 30, 1996, the Growth Fund paid brokerage
commissions of $70,820 on transactions having a total market value of
$67,831,156. Brokerage commissions paid by the Total Return Fund totaled
$2,455 on transactions having a total market value of $1,185,835, $1,814
on transactions having a total market value of $911,515, $25,313 on
transactions having a total market value of $37,754,478 and $28,705 on
transactions having a total market value of $32,270,945 during the fiscal
years ended September 30, 1993 and September 30, 1994, the period from
October 1, 1994 to June 30, 1995, and the fiscal year ended June 30, 1996,
respectively. (The investment advisory agreement between the Total Return
Fund and the Administrator contained a provision similar to that of the
Total Return Fund's Management Agreement and Sub-Advisory Agreement
described above regarding allocation of portfolio brokerage.) All of the
brokers to whom commissions were paid by the Growth Fund and the Total
Return Fund provided research services to the Administrator and/or the
Adviser. The Value Fund did not commence operations until September 16,
1996 and, thus, such Fund had not paid any brokerage commissions as of
that date.

CUSTODIAN

Firstar Trust Company, 615 East Michigan Street, Milwaukee,
Wisconsin 53202, acts as custodian for the Funds. As such, Firstar Trust
Company holds all securities and cash of the Funds, delivers and receives
payment for securities sold, receives and pays for securities purchased,
collects income from investments and performs other duties, all as
directed by officers of the Corporation. Firstar Trust Company does not
exercise any supervisory function over the management of the Funds, the
purchase and sale of securities or the payment of distributions to
shareholders. Firstar Trust Company also acts as the Funds' transfer
agent and dividend disbursing agent.

TAXES

As set forth in the Prospectus under the caption "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 Internal Revenue Code of 1986, as
amended.

Dividends from each Fund's net investment income and distributions
from each Fund's net realized capital gains are taxable to shareholders as
ordinary income, whether received in cash or additional shares of such
Fund. The 70% dividends-received deduction for corporations will apply to
such dividends and distributions, subject to proportionate reductions if
the aggregate dividends received by a Fund from domestic corporations in
any year are less than 100% of such Fund's gross income.

Any dividend or capital gains distribution paid shortly after a
purchase of shares will have the effect of reducing the per share net
asset value of such shares by the amount of the dividend or distribution.
Furthermore, if the net asset value of the shares immediately after a
dividend or distribution is less than the cost of such shares to the
shareholder, the dividend or distribution will be taxable to the
shareholder even though it results in a return of capital to him.

Each Fund may be required to withhold Federal income tax at a rate
of 31% ("backup withholding") from dividend payments and redemption
proceeds if a shareholder fails to furnish such Fund with his social
security number or other tax identification number and certify under
penalty of perjury that such number is correct and that he is not subject
to backup withholding due to the under reporting of income. The
certification form is included as part of the share purchase application
and should be completed when the account is opened.

SHAREHOLDER MEETINGS

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, at its discretion, may not hold
an annual meeting in any year in which none of the following matters is
required to be acted upon by the shareholders under the Act: (i) election
of directors; (ii) approval of an investment advisory agreement; (iii)
ratification of the selection of auditors; and (iv) approval of a
distribution agreement.

The Corporation's bylaws also contain procedures for the removal of
directors by its shareholders. At any meeting of shareholders, duly
called and at which a quorum is present, the shareholders may, by the
affirmative vote of the holders of a majority of the votes entitled to be
cast thereon, remove any director or directors from office and may elect a
successor or successors to fill any resulting vacancies for the unexpired
terms of removed directors.

Upon the written request of the holders of shares entitled to not
less than ten percent (10%) of all the votes entitled to be cast at such
meeting, the Secretary of the Corporation shall promptly call a special
meeting of shareholders for the purpose of voting upon the question of
removal of any director. Whenever ten or more shareholders of record who
have been such for at least six months preceding the date of application,
and who hold in the aggregate either shares having a net asset value of at
least $25,000 or at least one percent (1%) of the total outstanding
shares, whichever is less, shall apply to the Corporation's Secretary in
writing, stating that they wish to communicate with other shareholders
with a view to obtaining signatures to a request for a meeting as
described above and accompanied by a form of communication and request
which they wish to transmit, the Secretary shall within five business days
after such application either: (1) afford to such applicants access to a
list of the names and addresses of all shareholders as recorded on the
books of the Corporation; or (2) inform such applicants as to the
approximate number of shareholders of record and the approximate cost of
mailing to them the proposed communication and form of request.

If the Secretary elects to follow the course specified in clause
(2) of the last sentence of the preceding paragraph, the Secretary, upon
the written request of such applicants, accompanied by a tender of the
material to be mailed and of the reasonable expenses of mailing, shall,
with reasonable promptness, mail such material to all shareholders of
record at their addresses as recorded on the books unless within five
business days after such tender the Secretary shall mail to such
applicants and file with the Securities and Exchange Commission, together
with a copy of the material to be mailed, a written statement signed by at
least a majority of the Board of Directors to the effect that in their
opinion either such material contains untrue statements of fact or omits
to state facts necessary to make the statements contained therein not
misleading, or would be in violation of applicable law, and specifying the
basis of such opinion.

After opportunity for hearing upon the objections specified in the
written statement so filed, the Securities and Exchange Commission may,
and if demanded by the Board of Directors or by such applicants shall,
enter an order either sustaining one or more of such objections or
refusing to sustain any of them. If the Securities and Exchange
Commission shall enter an order refusing to sustain any of such
objections, or if, after the entry of an order sustaining one or more of
such objections, the Securities and Exchange Commission shall find, after
notice and opportunity for hearing, that all objections so sustained have
been met, and shall enter an order so declaring, the Secretary shall mail
copies of such material to all shareholders with reasonable promptness
after the entry of such order and the renewal of such tender.

INDEPENDENT ACCOUNTANTS

Price Waterhouse LLP, 3100 Multifoods Tower, 33 South 6th Street,
Minneapolis, Minnesota 55402 currently serves as the independent
accountants for the Corporation and has so served since the fiscal year
ended September 30, 1989. The Corporation changed its fiscal year end to
June 30 effective as of June 30, 1995.

FINANCIAL STATEMENTS

The following audited financial statements are incorporated by
reference to the Annual Report, dated June 30, 1996, of Eastcliff Funds,
Inc. (File No. 811-4722), as filed with the Securities and Exchange
Commission on August 12, 1996:

- Statements of Net Assets

- Statements of Operations

- Statements of Changes in Net Assets

- Financial Highlights

- Notes to the Financial Statements

- Report of Independent Accountants

DESCRIPTION OF SECURITIES RATINGS

As set forth in the Prospectus under the caption "Investment
Objectives and Policies", each of the Funds may invest in various
securities assigned ratings of either Standard & Poor's Corporation or
Moody's Investors Service, Inc. A brief description of the ratings
symbols and their meanings follows.

Standard & Poor's Corporation Bond Ratings. A Standard & Poor's
corporate debt rating is a current assessment of the creditworthiness of
an obligor with respect to a specific obligation. This assessment may
take into consideration obligors such as guarantors, insurers of lessees.

The debt rating is not a recommendation to purchase, sell or hold a
security, inasmuch as it does not comment as to market price or
suitability for a particular investor.

The ratings are based on current information furnished by the
issuer or obtained by Standard & Poor's from other sources it considers
reliable. Standard & Poor's does not perform any audit in connection with
any rating and may, on occasion, rely on unaudited financial information.
The ratings may be changed, suspended or withdrawn as a result of changes
in, or unavailability of, such information, or for other circumstances.

The ratings are based, in varying degrees, on the following
considerations:

I. Likelihood of default - capacity and willingness of the obligor
as to the timely payment of interest and repayment of principal in
accordance with the terms of the obligation;

II. Nature of and provisions of the obligation;

III. Protection afforded by, and relative position of the
obligation in the event of bankruptcy, reorganization or other arrangement
under the laws of bankruptcy and other laws affecting creditors' rights;

AAA - Debt rated AAA has the highest rating assigned by Standard &
Poor's. Capacity to pay interest and repay principal is extremely strong.

AA - Debt rated AA has a very strong capacity to pay interest and
repay principal and differs from the higher rated issues only in small
degree.

A - Debt rated A has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse effects
of changes in circumstances and economic conditions than debt in the
higher rated categories.

BBB - Debt rated BBB is regarded as having an adequate capacity to
pay interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher
rated categories.

BB, B, CCC, CC Bonds are regarded, on balance, as predominately
speculative with respect to capacity to pay interest and repay principal
in accordance with the terms of the obligation. BB indicates the lowest
degree of speculation and CC the highest degree of speculation. While
such debt will likely have some quality and protective characteristics,
they are outweighed by large uncertainties or major risk exposures to
adverse conditions.

Moody's Investors Service, Inc Bond Ratings.

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

Aa - Bonds which are Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high-grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude, or there
may be other elements present which make the long-term risks appear
somewhat larger than in Aaa securities.

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

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

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

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

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

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

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

Moody's applies numerical modifiers 1, 2 and 3 in each of the
foregoing generic rating classifications. The modifier 1 indicates that
the company ranks in the higher end of its generic rating category; the
modifier 2 indicates a mid-range ranking; and the modifier 3 indicates
that the company ranks in the lower end of its generic rating category.

Standard & Poor's Commercial Paper Ratings. A Standard & Poor's
commercial paper rating is a current assessment of the likelihood of
timely payment of debt considered short-term in the relevant market.
Ratings are graded into several categories, ranging from A-1 for the
highest quality obligations to D for the lowest. The three highest
categories are as follows:

A-1. This highest category indicates that the degree of safety
regarding timely payment is strong. Those issuers determined to possess
extremely strong safety characteristics are denoted with a plus sign (+)
designation.

A-2. Capacity for timely payment on issues with this designation is
satisfactory. However the relative degree of safety is not as high as for
issuers designated "A-1".

A-3. Issues carrying this designation have adequate capacity for
timely payment. They are, however, more vulnerable to the adverse effects
of changes in circumstances than obligations carrying a higher
designation.

Standard & Poor's Preferred Stock Ratings. A Standard & Poor's
preferred stock rating is an assessment of the capacity and willingness of
an issuer to pay preferred stock dividends and any applicable sinking fund
obligations. A preferred stock rating differs from a bond rating inasmuch
as it is assigned to an equity issue, which issue is intrinsically
different from, and subordinated to, a debt issue. Therefore, to reflect
this difference, the preferred stock rating symbol will normally not be
higher than the bond rating symbol assigned to, or that would be assigned
to, the senior debt of the same issuer.

The preferred stock ratings are based on the following
considerations:

I. Likelihood of payment -- capacity and willingness of the issuer
to meet the timely payment of preferred stock dividends and any applicable
sinking fund requirements in accordance with the terms of the obligation.

II. Nature of, and provisions of, the issue.

III. Relative position of the issue in the event of bankruptcy,
reorganization, or other arrangements affecting creditors' rights.

"AAA" This is the highest rating that may be assigned by Standard
& Poor's to a preferred stock issue and indicates an extremely strong
capacity to pay the preferred stock obligations.

"AA" A preferred stock issue rated "AA" also qualifies as a high-
quality fixed income security. The capacity to pay preferred stock
obligations is very strong, although not as overwhelming as for issues
rated "AAA."

"A" An issued rated "A" is backed by a sound capacity to pay the
preferred stock obligations, although it is somewhat more susceptible to
the adverse effects of changes in circumstances and economic conditions.

"BBB" An issue rated "BBB" is regarded as backed by an adequate
capacity to pay the preferred stock obligations. Whereas it normally
exhibits adequate protection parameters, adverse economic conditions or
changing circumstances are more likely to lead to a weakened capacity to
make payments for a preferred stock in this category than for issues in
the "A" category.

"BB," "B," "CCC" Preferred stock rated "BB," "B," and "CCC" are
regarded, on balance, as predominately speculative with respect to the
issuer's capacity to pay preferred stock obligations. "BB" indicates the
lowest degree of speculation and "CCC" the highest degree of speculation.
While such issues will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions.

OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a.) Financial Statements (Financial Highlights included in Part A
and all incorporated by reference to the Annual Report, dated June 30,
1996 (File No. 811-4722) of Eastcliff Funds, Inc. (as filed with the
Securities and Exchange Commission on August 12, 1996)).

Eastcliff Funds, Inc.

Statements of Net Assets

Statements of Operations

Statements of Changes in Net Assets

Financial Highlights

Notes to Financial Statements

Report of Independent Accountants

(b.) Exhibits

(1.1) Registrant's Restated Articles of Incorporation;
Exhibit 1 to Amendment No. 11 to Registrant's
Registration Statement on Form N-1A is incorporated by
reference to Rule 411 under the Securities Act of
1933.

(1.2) Articles of Amendment to Registrant's Restated
Articles of Incorporation; Exhibit 1.2 to Amendment
No. 13 to Registrant's Registration Statement on Form
N-1A is incorporated by reference to Rule 411 under
the Securities Act of 1933.

(1.3) Articles of Amendment to Registrant's Restated
Articles of Incorporation; Exhibit 1.3 to Amendment
No. 15 to Registrant's Registration Statement on Form
N-1A is incorporated by reference to Rule 411 under
the Securities Act of 1933.

(2) Registrant's By-Laws, as amended; Exhibit 2 to
Amendment No. 11 to Registrant's Registration
Statement on Form N-1A is incorporated by reference to
Rule 411 under the Securities Act of 1933.

(3) None

(4) Specimen Stock Certificate; Exhibit 4 to Amendment No.
4 to Registrant's Registration Statement on Form N-1A
is incorporated by reference pursuant to Rule 411
under the Securities Act of 1933.

(5.1) Investment Advisory Agreement between Eastcliff Total
Return Fund (formerly Fiduciary Total Return Fund) and
Resource Capital Advisers, Inc.; Exhibit 5.1 to
Amendment No. 13 to Registrant's Registration
Statement on Form N-1A is incorporated by reference to
Rule 411 under the Securities Act of 1933.

(5.2) Investment Advisory Agreement between Eastcliff Growth
Fund and Resource Capital Advisers, Inc.; Exhibit 5.2
to Amendment No. 13 to Registrant's Registration
Statement on Form N-1A is incorporated by reference to
Rule 411 under the Securities Act of 1933.

(5.3) Sub-Advisory Agreement among Eastcliff Growth Fund,
Resource Capital Advisers, Inc. and Winslow Capital
Management, Inc.; Exhibit 5.3 to Amendment No. 13 to
Registrant's Registration Statement on Form N-1A is
incorporated by reference to Rule 411 under the
Securities Act of 1933.

(5.4) Sub-Advisory Agreement among Eastcliff Total Return
Fund, Resource Capital Advisers, Inc. and Palm Beach
Investment Advisers, Inc.; Exhibit 5.4 to Amendment
No. 13 to Registrant's Registration Statement on Form
N-1A is incorporated by reference to Rule 411 under
the Securities Act of 1933.

(5.5) Investment Advisory Agreement between Eastcliff
Regional Small Capitalization Value Fund and Resource
Capital Advisers, Inc.; Exhibit 5.5 to Amendment No.
15 to Registrant's Registration Statement on Form N-1A
is incorporated by reference to Rule 411 under the
Securities Act of 1933.

(5.6) Sub-Advisory Agreement among Eastcliff Regional Small
Capitalization Value Fund, Resource Capital Advisers,
Inc. and Woodland Partners LLC; Exhibit 5.6 to
Amendment No. 15 to Registrant's Registration
Statement on Form N-1A is incorporated by reference to
Rule 411 under the Securities Act of 1933.

(6) None

(7) None

(8) Custodian Agreement with Firstar Trust Company;
Exhibit 8 to Registrant's Registration Statement on
Form N-1A is incorporated by reference pursuant to
Rule 411 under the Securities Act of 1933.

(9.1) Administrative Agreement between Eastcliff Total
Return Fund (formerly Fiduciary Total Return Fund) and
Fiduciary Management, Inc.; Exhibit 9 to Registrant's
Registration Statement on Form N-1A is incorporated by
reference pursuant to Rule 411 under the Securities
Act of 1933.

(9.2) Administrative Agreement, including addendum, between
Eastcliff Growth Fund and Fiduciary Management, Inc.;
Exhibit 9.2 to Amendment No. 12 to Registrant's
Registration Statement on Form N-1A is incorporated by
reference pursuant to Rule 411 under the Securities
Act of 1933.

(9.3) Addendum to Administrative Agreement between Eastcliff
Total Return Fund and Fiduciary Management, Inc.; Exhibit
9.3 to Amendment No. 15 to Registrant's Registration
Statement on Form N-1A is incorporated by reference to
Rule 411 under the Securities Act of 1933.

(9.4) Administrative Agreement, including addendum, between
Eastcliff Regional Small Capitalization Value Fund and
Fiduciary Management, Inc.; Exhibit 9.4 to Amendment
No. 15 to Registrant's Registration Statement on Form
N-1A is incorporated by reference to Rule 411 under
the Securities Act of 1933.

(10) Opinion of Foley & Lardner, counsel for Registrant;
Exhibit 10 to Amendment No. 8 to Registrant's
Registration Statement on Form N-1A is incorporated by
reference pursuant to Rule 411 under the Securities
Act of 1933.

(11) Consent of Price Waterhouse LLP.

(12) None

(13) Subscription Agreement; Exhibit 13 to Amendment No. 2
to Registrant's Registration Statement on Form N-1A is
incorporated by reference pursuant to Rule 411 under
the Securities Act of 1933.

(14.1) Eastcliff Funds (formerly Fiduciary Funds) Individual
Retirement Account; Exhibit 14.1 to Amendment No. 6 to
Registrant's Registration Statement on Form N-1A is
incorporated by reference pursuant to Rule 411 under
the Securities Act of 1933.

(14.2) Eastcliff Funds (formerly Fiduciary Funds)
Self-Employed Defined Contribution Retirement Plan;
Exhibit 14.2 to Amendment No. 7 to Registrant's
Registration Statement on Form N-1A is incorporated by
reference pursuant to Rule 411 under the Securities
Act of 1933.

(14.3) Eastcliff Funds (formerly Fiduciary Funds) Simplified
Employee Pension Individual Retirement Account;
Exhibit 14.3 to Amendment No. 9 to Registrant's
Registration Statement on Form N-1A is incorporated by
reference pursuant to Rule 411 under the Securities
Act of 1933.

(15.1) Distribution Plan; Exhibit 15.1 to Amendment No. 1 to
Registrant's Registration Statement on Form N-1A is
incorporated by reference pursuant to Rule 411 under
the Securities Act of 1933.

(15.2) Form of Distribution Agreement; Exhibit 15.2 to
Registrant's Registration Statement on Form N-1A is
incorporated by reference pursuant to Rule 411 under
the Securities Act of 1933.

(16) Schedule for Computation of Performance Quotations.

(17) Financial Data Schedule.

(18) None.

Item 25. Persons Controlled by or under Common Control with Registrant

The Registrant, the Eastcliff Total Return Fund and the
Eastcliff Growth Fund are controlled by Resource Trust Company, which
owned 94.56% and 92.38% of the Total Return Fund's and the Growth Fund's
outstanding shares, respectively, as of August 31, 1996. Registrant does
not control any person.

Item 26. Number of Holders of Securities

Number of Record Holders
Title of Class as of August 31, 1996

Common Stock (Series A) 48
Common Stock (Series B) 44
Common Stock (Series C) 0

Item 27. Indemnification

Pursuant to the authority of the Wisconsin Business Corporation
Law, Registrant's Board of Directors has adopted the following By-Law
which is in full force and effect and has not been modified or cancelled:

Article VII

INDEMNIFICATION

7.01 Provision of Indemnification. The corporation shall
indemnify all of its corporate representatives against expenses,
including attorney's fees, judgments, fines and amounts paid in
settlement actually and reasonably incurred by them in
connection with the defense of any action, suit or proceeding,
or threat or claim of such action, suit or proceeding, whether
civil, criminal, administrative, or legislative, no matter by
whom brought, or in any appeal in which they or any of them are
made parties or a party by reason of being or having been a
corporate representative, if the corporate representative acted
in good faith and in a manner reasonably believed to be in or
not opposed to the best interests of the corporation and with
respect to any criminal proceeding, he had no reasonable cause
to believe his conduct was unlawful provided that the
corporation shall not indemnify corporate representatives in
relation to matters as to which any such corporate
representative shall be adjudged in such action, suit or
proceeding to be liable for gross negligence, willful
misfeasance, bad faith, reckless disregard of the duties and
obligations involved in the conduct of his office, or when
indemnification is otherwise not permitted by the Wisconsin
Business Corporation Law.

7.02 Determination of Right to Indemnification. In the
absence of an adjudication which expressly absolves the
corporate representative, or in the event of a settlement, each
corporate representative shall be indemnified hereunder only if
a determination that indemnification of the corporate
representative is proper because he has met the applicable
standard of conduct set forth in Section 7.01. Such
determination shall be made: (i) by the board of directors, by
a majority vote of a quorum which consists of directors who were
not parties to the action, suit or proceeding nor interested
persons of the corporation as defined in Section 2(a)(19) of the
Investment Company Act of 1940; (ii) if the required quorum is
not obtainable or if a quorum of disinterested directors so
direct, by independent legal counsel in a written opinion; or
(iii) by the shareholders. The termination of any action, suit
or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person was guilty of
willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties and obligations involved in the conduct
of his or her office, and, with respect to any criminal action
or proceeding, had reasonable cause to believe that his or her
conduct was unlawful.

7.03 Allowance of Expenses. Expenses, including
attorneys' fees, incurred in the preparation of and/or
presentation of the defense of a civil or criminal action, suit
or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding as
authorized in the manner provided in Sections 180.0853 or
180.0856 of the Wisconsin Business Corporation Law and in
accordance with the requirements of the Securities and Exchange
Commission upon receipt of an undertaking by or on behalf of the
corporate representative to repay such amount unless it shall
ultimately be determined that he or she is entitled to be
indemnified by the corporation as authorized in this by-law.

7.04 Additional Rights to Indemnification. The
indemnification provided by this by-law shall not be deemed
exclusive of any other rights to which those indemnified may be
entitled under these by-laws, any agreement, vote of
shareholders or disinterested directors or otherwise, both as to
action in his or her official capacity and as to action in
another capacity while holding such office, and shall continue
as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person subject to the
limitations imposed from time to time by the Investment Company
Act of 1940, as amended.

7.05 Insurance. This corporation shall have power to
purchase and maintain insurance on behalf of any corporate
representative against any liability asserted against him or her
and incurred by him or her in such capacity or arising out of
his or her status as such, whether or not the corporation would
have the power to indemnify him or her against such liability
under this by-law, provided that no insurance may be purchased
or maintained to protect any corporate representative against
liability for gross negligence, willful malfeasance, bad faith,
or reckless disregard of the duties and obligations involved in
the conduct of his or her office.

7.06 Definitions. "Corporate Representative" means an
individual who is or was a director, officer, agent or employee
of the corporation or who serves or served another corporation,
partnership, joint venture, trust or other enterprise in one of
these capacities at the request of the corporation and who, by
reason of his or her position, is, was or is threatened to be
made a party to a proceeding described herein.

In reference to Article VII, Section 7.01 of the By-laws,
Section 180.0851 of the Wisconsin Business Corporation Law provides for
mandatory indemnification (a) if a corporate representative was successful
on the merits or otherwise in the defense of a proceeding, and (b) if the
corporate representative was not successful on the merits or otherwise but
the liability incurred was not the result of a breach or failure to
perform a duty which constituted any of the following: (1) a willful
failure to deal fairly with the corporation or its shareholders in
connection with a matter in which the corporate representative has a
material conflict of interest; (2) a violation of criminal law, unless the
corporate representative had reasonable cause to believe his or her
conduct was lawful or no reasonable cause to believe his or her conduct
was unlawful; (3) a transaction from which the corporate representative
derived an improper personal profit; or (4) willful misconduct.

Insofar as indemnification for and with respect to liabilities
arising under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of Registrant pursuant to the foregoing
provisions or otherwise, Registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by Registrant of expenses incurred or paid by a
director, officer or controlling person or Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such indemnification is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.

Item 28. Business and Other Connections of Investment Adviser

Information with respect to Messrs. Wilson, Brooks, Welch, Fauth
and Thorpe is incorporated by reference to pages 12 and 13 of the
Statement of Additional Information pursuant to Rule 411 under the
Securities Act of 1933.

Item 29. Principal Underwriters

Registrant has no principal underwriters.

Item 30. Location of Accounts and Records

All accounts, books, or other documents required to be
maintained by Section 31(a) of the Investment Company Act of 1940 and the
rules promulgated thereunder are in the physical possession of
Registrant's Administrator, Fiduciary Management, Inc., at its corporate
offices, 225 East Mason Street, Milwaukee, Wisconsin 53202, Registrant's
investment adviser, Resource Capital Advisers, Inc., at its corporate
offices, Suite 300, 900 Second Avenue South, Minneapolis, Minnesota 55402,
the Eastcliff Growth Fund's portfolio manager, Winslow Capital Management,
Inc., at its corporate offices, 4720 IDS Tower, 80 South Eighth Street,
Minneapolis, Minnesota 55402, the Eastcliff Regional Small Capitalization
Value Fund's portfolio manager, Woodland Partners LLC, at its corporate
offices, 60 South Sixth Street, Suite 3750, Minneapolis, Minnesota 55402,
or Firstar Trust Company, 615 East Michigan Street, Milwaukee, Wisconsin
53202.

Item 31. Management Services

All management-related service contracts entered into by
Registrant are discussed in Parts A and B of this Registration Statement.

Item 32. Undertakings

Registrant undertakes to provide its Annual Report to
Shareholders upon request without charge to any recipient of a Prospectus.

With respect to shareholder meetings, Registrant undertakes to
call shareholder meetings in accordance with the provisions of Article II
of its Bylaws, which are discussed in Parts A and B of this Registration
Statement.

Registrant undertakes to file a further post-effective
amendment, using financial statements which need not be certified, within
four to six months from the effective date of Post-Effective Amendment No.
14 to Registrant's Registration Statement on Form N-1A.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and
the Investment Company Act of 1940, the Registrant certifies that it meets
all of the requirements for effectiveness of this Amended Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has
duly caused this Amended Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Minneapolis
and State of Minnesota on the 13th day of September, 1996.

EASTCLIFF FUNDS, INC.
(Registrant)

By: /s/ Conley Brooks, Jr.
Conley Brooks, Jr., President

Pursuant to the requirements of the Securities Act of 1933, this
Amended Registration Statement has been signed below by the following
persons in the capacities and on the date indicated.

Name Title Date

/s/ Conley Brooks, Jr. Principal Executive, September 13, 1996
Conley Brooks, Jr. Financial and
Accounting Officer
and Director
/s/ E. Thomas Welch Vice President and September 13, 1996
E. Thomas Welch Director

/s/ John J. Fauth Director September 13, 1996
John J. Fauth

/s/ A. Skidmore Thorpe Director September 13, 1996
A. Skidmore Thorpe

/s/ Donald S. Wilson Director September 13, 1996
Donald S. Wilson

<PAGE>

EXHIBIT INDEX

Exhibit No. Exhibit Page No.

(1.1) Registrant's Restated Articles of
Incorporation*

(1.2) Articles of Amendment to Registrant's
Restated Articles of Incorporation*

(1.3) Articles of Amendment to Registrant's
Restated Articles of Incorporation*

(2) Registrant's By-Laws, as amended*

(3) None

(4) Specimen Stock Certificate*

(5.1) Investment Advisory Agreement between
Eastcliff Total Return Fund (formerly
Fiduciary Total Return Fund) and Resource
Capital Advisers, Inc.*

(5.2) Investment Advisory Agreement between
Eastcliff Growth Fund and Resource
Capital Advisers, Inc.*
(5.3) Sub-Advisory Agreement among Eastcliff
Growth Fund, Resource Capital Advisers,
Inc. and Winslow Capital Management,
Inc.*

(5.4) Sub-Advisory Agreement among Eastcliff
Total Return Fund, Resource Capital
Advisers, Inc. and Palm Beach Investment
Advisers, Inc.*

(5.5) Investment Advisory Agreement between
Eastcliff Regional Small Capitalization
Value Fund and Resource Capital Advisers,
Inc.*

(5.6) Sub-Advisory Agreement among Eastcliff
Regional Small Capitalization Value Fund,
Resource Capital Advisers, Inc. and
Woodland Partners LLC*

(6) None

(7) None

(8) Custodian Agreement with Firstar
Wisconsin Trust Company*

(9.1) Administrative Agreement between
Eastcliff Total Return Fund (formerly
Fiduciary Total Return Fund) and
Fiduciary Management, Inc.*

(9.2) Administrative Agreement, including
addendum, between Eastcliff Growth Fund
and Fiduciary Management, Inc.*

(9.3) Addendum to Administrative Agreement
between Eastcliff Total Return Fund and
Fiduciary Management, Inc.*

(9.4) Administrative Agreement, including
addendum, between Eastcliff Regional
Small Capitalization Value Fund and
Fiduciary Management, Inc.*

(10) Opinion of Foley & Lardner, Counsel for
Registrant*

(11) Consent of Price Waterhouse LLP

(12) None

(13) Subscription Agreement*

(14.1) Eastcliff Funds (formerly Fiduciary
Funds) Individual Retirement Account*

(14.2) Eastcliff Funds (formerly Fiduciary
Funds) Defined Contribution Retirement
Plan*

(14.3) Eastcliff Funds (formerly Fiduciary
Funds) Simplified Employee Pension
Individual Retirement Account*

(15.1) Distribution Plan*

(15.2) Form of Distribution Agreement*

(16) Schedule for Computation of Performance
Quotations

(17) Financial Data Schedule

(18) None

_______________________________
* Incorporated by reference.

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in the Statement of Additional Information
constituting part of this Post-Effective Amendment No. 14 to the
registration statement on Form N-1A (the "Registration Statement") of our
report dated July 26, 1996, relating to the financial statements and
financial highlights of Eastcliff Funds, Inc., which appears in such
Statement of Additional Information, and to the incorporation by reference
of our report into the prospectus which constitutes part of this
Registration Statement. We also consent to the reference to us under the
heading "Independent Accountants" in such Statement of Additional
Information.

PRICE WATERHOUSE LLP
Minneapolis, Minnesota
September 11, 1996

EXHIBIT 16

Schedule for Computation of Performance Quotation

EASTCLIFF TOTAL RETURN FUND

1. Initial (June 30, 1995) Net Asset Value = $11.96

2. Number of hypothetical shares purchased =
$1,000 divided by $11.96 = 83.612 shares

3. Amount of dividends and distributions =

07/27/95 - $ 0.10117 per share x 83.612 = $ 8.46 /$ 12.24 = 0.691 shares
07/27/95 - $ 0.06955 per share x 83.612 = $ 5.82 /$ 12.24 = 0.475 shares
12/28/95 - $ 0.065 per share x 84.778 = $ 5.51 /$ 13.19 = 0.418 shares
12/28/95 - $ 0.095 per share x 84.778 = $ 8.05 /$ 13.19 = 0.610 shares

Total = 2.194 shares

4. Fees charged to shareholder accounts = 0

5. Ending (June 30, 1996) Net Asset Value = $14.62

6. Ending Redeemable value of hypothetical investment =

83.612 + 2.194 = 85.806 x $14.62 = $1,254.48

7. Total Return = ($1254.48 - $1,000) divided by $1,000 = + 25.45%

8. Annualized Compounded Return = 25.45%
Number of years = 1

<PAGE>
Schedule for Computation of Performance Quotation

EASTCLIFF TOTAL RETURN FUND

1. Initial (June 30, 1991) Net Asset Value = $11.23

2. Number of hypothetical shares purchased =
$1,000 divided by $11.23 = 89.047 shares

3. Amount of dividends and distributions =

10/24/91 - $ 0.3681 per share x 89.047 = $ 32.78 /$ 10.66 = 3.075 shares
10/24/91 - $ 0.5836 per share x 89.047 = $ 51.97 /$ 10.66 = 4.875 shares
12/30/91 - $ 0.04 per share x 96.997 = $ 3.88 /$ 11.41 = 0.340 shares
12/30/91 - $ 0.01 per share x 96.997 = $ 0.97 /$ 11.41 = 0.085 shares
10/23/92 - $ 0.09 per share x 97.422 = $ 8.77 /$ 11.03 = 0.795 shares
10/23/92 - $ 0.84 per share x 97.422 = $ 81.83 /$ 11.03 = 7.419 shares
12/30/92 - $ 0.057 per share x 105.636 = $ 6.02 /$ 11.53 = 0.522 shares
12/30/92 - $ 0.06 per share x 105.636 = $ 6.34 /$ 11.53 = 0.550 shares
10/25/93 - $ 0.1305 per share x 106.708 = $ 13.93 /$ 11.89 = 1.172 shares
10/25/93 - $ 0.3883 per share x 106.708 = $ 41.43 /$ 11.89 = 3.484 shares
12/30/93 - $ 0.05 per share x 111.364 = $ 5.57 /$ 12.01 = 0.464 shares
12/30/93 - $ 0.16 per share x 111.364 = $ 17.82 /$ 12.01 = 1.484 shares
10/25/94 - $ 0.1033 per share x 113.312 = $ 11.71 /$ 11.16 = 1.049 shares
10/25/94 - $ 0.615 per share x 113.312 = $ 69.69 /$ 11.16 = 6.245 shares
12/29/94 - $ 0.035 per share x 120.606 = $ 4.22 /$ 11.03 = 0.383 shares
12/29/94 - $ 0.0555 per share x 120.606 = $ 6.69 /$ 11.03 = 0.607 shares
07/27/95 - $ 0.10117 per share x 121.596 = $ 12.30 /$ 12.24 = 1.005 shares
07/27/95 - $ 0.06955 per share x 121.596 = $ 8.46 /$ 12.24 = 0.691 shares
12/28/95 - $ 0.065 per share x 123.292 = $ 8.01 /$ 13.19 = 0.607 shares
12/28/95 - $ 0.095 per share x 123.292 = $ 11.71 /$ 13.19 = 0.888 shares

Total = = 35.740 shares

4. Fees charged to shareholder accounts = 0

5. Ending (June 30, 1996) Net Asset Value = $14.62

6. Ending Redeemable value of hypothetical investment =

89.047 + 35.740 = 124.787 x $14.62 = $1,824.39

7. Total Return = ($1824.39 - $1,000) divided by $1,000 = + 82.44%

8. Annualized Compounded Return = 12.78%
Number of years = 5

<PAGE>
Schedule for Computation of Performance Quotation

EASTCLIFF TOTAL RETURN FUND

1. Initial (December 30, 1986) Net Asset Value = $10.00

2. Number of hypothetical shares purchased =
$1,000 divided by $10.00 = 100 shares

3. Amount of dividends and distributions =

10/23/87 - $0 per share x 100.000 = $0.00 /$7.99 = 0.000 shares
10/23/87 - $2.9471 per share x 100.000 = $294.71 /$7.99 = 36.885 shares
10/24/88 - $0.0524 per share x 136.885 = $7.17 /$9.85 = 0.728 shares
10/24/88 - $0.0064 per share x 136.885 = $0.88 /$9.85 = 0.089 shares
12/29/88 - $0.055 per share x 137.702 = $7.57 /$9.76 = 0.776 shares
12/29/88 - $0.008 per share x 137.702 = $1.10 /$9.76 = 0.113 shares
10/24/89 - $0.18115 per share x 138.591 = $25.11 /$10.97 = 2.289 shares
10/24/89 - $0.07595 per share x 138.591 = $10.53 /$10.97 = 0.960 shares
12/28/89 - $0.075 per share x 141.840 = $10.64 /$10.58 = 1.006 shares
12/28/89 - $0.11 per share x 141.840 = $15.60 /$10.58 = 1.474 shares
10/24/90 - $0.2726 per share x 144.320 = $39.34 /$8.99 = 4.376 shares
10/24/90 - $0.1194 per share x 144.320 = $17.23 /$8.99 = 1.917 shares
12/28/90 - $0.085 per share x 150.613 = $12.80 /$9.60 = 1.333 shares
12/28/90 - $0.01 per share x 150.613 = $1.51 /$9.60 = 0.157 shares
10/24/91 - $0.3681 per share x 152.103 = $55.99 /$10.66 = 5.252 shares
10/24/91 - $0.5836 per share x 152.103 = $88.77 /$10.66 = 8.327 shares
12/30/91 - $0.04 per share x 165.682 = $6.63 /$11.41 = 0.581 shares
12/30/91 - $0.01 per share x 165.682 = $1.66 /$11.41 = 0.145 shares
10/23/92 - $0.09 per share x 166.408 = $14.98 /$11.03 = 1.358 shares
10/23/92 - $0.84 per share x 166.408 = $139.78 /$11.03 = 12.673 shares
12/30/92 - $0.057 per share x 180.439 = $10.29 /$11.53 = 0.892 shares
12/30/92 - $0.06 per share x 180.439 = $10.83 /$11.53 = 0.939 shares
10/25/93 - $0.1305 per share x 182.270 = $23.79 /$11.89 = 2.001 shares
10/25/93 - $0.3883 per share x 182.270 = $70.78 /$11.89 = 5.953 shares
12/30/93 - $0.05 per share x 190.224 = $9.51 /$12.01 = 0.792 shares
12/30/93 - $0.16 per share x 190.224 = $30.44 /$12.01 = 2.535 shares
10/25/94 - $0.1033 per share x 193.551 = $19.99 /$11.16 = 1.791 shares
10/25/94 - $0.615 per share x 193.551 = $119.03 /$11.16 = 10.666 shares
12/29/94 - $0.035 per share x 206.008 = $7.21 /$11.03 = 0.654 shares
12/29/94 - $0.0555 per share x 206.008 = $11.43 /$11.03 = 1.036 shares
07/27/95 - $0.10117 per share x 207.698 = $21.01 /$12.24 = 1.717 shares
07/27/95 - $0.06955 per share x 207.698 = $14.45 /$12.24 = 1.181 shares
12/28/95 - $0.065 per share x 210.596 = $13.69 /$13.19 = 1.038 shares
12/28/95 - $0.095 per share x 210.596 = $20.01 /$13.19 = 1.517 shares

Total =113.151 shares

4. Fees charged to shareholder accounts = 0

5. Ending (June 30, 1996) Net Asset Value = $14.62

6. Ending Redeemable value of hypothetical investment =

100.000 + 113.151 = 213.151 x $14.62 = $3,116.27

7. Total Return = ($3116.27 - $1,000) divided by $1,000 = + 211.63%

8. Annualized Compounded Return = 12.71%
Number of years = 9 and 183/365 days = 9.5000000

<PAGE>

Schedule for Computation of Performance Quotation

EASTCLIFF GROWTH FUND

1. Initial (July 1, 1995) Net Asset Value = $10.00

2. Number of hypothetical shares purchased =
$1,000 divided by $10.00 = 100 shares

3. Amount of dividends and distributions = None

Total = 0

4. Fees charged to shareholder accounts = 0

5. Ending (June 30, 1996) Net Asset Value = $12.56

6. Ending Redeemable value of hypothetical investment =

100.000 + 0.000 = 100.000 x $12.56 = $1,256.00

7. Total Return = ($1256.00 - $1,000) divided by $1,000 = + 25.60%

8. Annualized Compounded Return = 25.60%
Number of years = 1 and 0/365 days = 1.0000000

<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF EASTCLIFF TOTAL RETURN AS OF AND FOR THE YEAR ENDED JUNE 30, 1996
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 1
<NAME> EASTCLIFF TOTAL TETURN

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 14,817
<INVESTMENTS-AT-VALUE> 18,260
<RECEIVABLES> 60
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 18,320
<PAYABLE-FOR-SECURITIES> 500
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 21
<TOTAL-LIABILITIES> 521
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 13,196
<SHARES-COMMON-STOCK> 1,217
<SHARES-COMMON-PRIOR> 1,321
<ACCUMULATED-NII-CURRENT> 2,394
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1,127
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3,443
<NET-ASSETS> 17,799
<DIVIDEND-INCOME> 235
<INTEREST-INCOME> 97
<OTHER-INCOME> 0
<EXPENSES-NET> 218
<NET-INVESTMENT-INCOME> 114
<REALIZED-GAINS-CURRENT> 1,265
<APPREC-INCREASE-CURRENT> 2,394
<NET-CHANGE-FROM-OPS> 3,773
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 208
<DISTRIBUTIONS-OF-GAINS> 205
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 285
<NUMBER-OF-SHARES-REDEEMED> 406
<SHARES-REINVESTED> 17
<NET-CHANGE-IN-ASSETS> 1,994
<ACCUMULATED-NII-PRIOR> 132
<ACCUMULATED-GAINS-PRIOR> 62
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 168
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 266
<AVERAGE-NET-ASSETS> 16,794
<PER-SHARE-NAV-BEGIN> 11.96
<PER-SHARE-NII> 0.09
<PER-SHARE-GAIN-APPREC> 2.90
<PER-SHARE-DIVIDEND> 0.17
<PER-SHARE-DISTRIBUTIONS> 0.16
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.62
<EXPENSE-RATIO> 1.30
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF EASTCLIFF GROWTH FUND AS OF AND FOR THE YEAR ENDED JUNE 30, 1996
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 2
<NAME> EASTCLIFF GROWTH FUND

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-07-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 35,306
<INVESTMENTS-AT-VALUE> 45,972
<RECEIVABLES> 408
<ASSETS-OTHER> 25
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 46,405
<PAYABLE-FOR-SECURITIES> 132
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 80
<TOTAL-LIABILITIES> 212
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 37,079
<SHARES-COMMON-STOCK> 3,679
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (1,552)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 10,666
<NET-ASSETS> 46,193
<DIVIDEND-INCOME> 111
<INTEREST-INCOME> 90
<OTHER-INCOME> 0
<EXPENSES-NET> 501
<NET-INVESTMENT-INCOME> (300)
<REALIZED-GAINS-CURRENT> (1,552)
<APPREC-INCREASE-CURRENT> 10,666
<NET-CHANGE-FROM-OPS> 8,813
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4,146
<NUMBER-OF-SHARES-REDEEMED> 467
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 46,193
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 388
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 534
<AVERAGE-NET-ASSETS> 38,760
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> (0.08)
<PER-SHARE-GAIN-APPREC> 2.64
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.56
<EXPENSE-RATIO> 1.29
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>