STANDISH AYER & WOOD INVESTMENT TRUST, 485APOS, 1996-01-29

STANDISH AYER & WOOD INVESTMENT TRUST
485APOS, 1996-01-29

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As File with the Securities and Exchange Commission on January 29, 1996
Registration Nos. 33-8214

811-4813

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
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REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
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Pre-Effective Amendment No. / /
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Post-Effective Amendment No. 70 /X/
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REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/
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Amendment No. 73 /X/
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(Check appropriate box or boxes.)
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Standish, Ayer & Wood Investment Trust
(Exact Name of Registrant as Specified in Charter)

One Financial Center, Boston, Massachusetts 02111
(Address of Principal Executive Offices)

Registrant's Telephone Number, including Area Code: (617) 375-1760

ERNEST V. KLEIN, Esq.
Hale and Dorr
60 State Street
Boston, Massachusetts 02109
(Name and Address of Agent for Service)

It is proposed that this filing will become effective:
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/ / Immediately upon filing pursuant to Rule 485(b)

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/ / On (date) pursuant to Rule 485(b)
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/ / 60 days after filing pursuant to Rule 485(a)(1)
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/X/ On March 29, 1996 pursuant to Rule 485(a)(1)

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/ / 75 days after filing pursuant to Rule 485(a)(2)
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/ / On (date) pursuant to Rule 485(a)(2)

The Registrant has registered an indefinite number of shares under
the Securities Act of 1933, as amended, pursuant to Rule 24f-2 under the
Investment Company Act of 1940, as amended. The Rule 24f-2 Notice for the fiscal
year ended December 31, 1995 will be filed on or about February 29, 1996.

<PAGE>

SAW0010A

STANDISH, AYER & WOOD INVESTMENT TRUST*

Standish Equity Fund

Standish Fixed Income Fund
Standish Global Fixed Income Fund

Standish
Small Capitalization Equity Fund

Cross-Reference Sheet Pursuant to Rule 495(a)

Part A Prospectus
Form Item Cross-Reference

Item 1. Cover Page Cover Page

Item 2. Synopsis "Expense Information"

Item 3. Condensed Financial "Financial Highlights"
Information

Item 4. General Description Cover Page, "The Fund
of Registrant and Its Shares" and "Investment
Objective and Policies"

Item 5. Management of the Fund "Management" and "Custodian,
Transfer Agent and Dividend
Disbursing Agent"

Item 6. Capital Stock and "The Fund and Its Shares,"
Other Securities "Purchase of Shares," "Redemption
of Shares," "Dividends and
Distributions" and "Federal Income
Taxes"

Item 7. Purchase of Securities Cover Page and "Purchase of
Being Offered Shares"

Item 8. Redemption or "Redemption of Shares"
Repurchase

Item 9. Pending Legal Not Applicable
Proceedings
- -------------

* This Post-Effective Amendment to the Registrant's Registration Statement is
being filed with respect to the series of the Registrant set forth above. The
Prospectuses and Statements of Additional Information for Standish Controlled
Maturity Fund, Consolidated Standish Short-Term Asset Reserve Fund, Standish
Intermediate Tax Exempt Bond Fund, Standish International Fixed Income Fund,
Standish Massachusetts Intermediate Tax Exempt Bond Fund, Standish Securitized
Fund and Standish Fixed Income Fund II, additional series of the Registrant, are
not affected hereby and, therefore, are not included herewith.

<PAGE>

Statement of Additional
Part B Information Cross-
Form Item Reference

Item 10. Cover Page Cover Page

Item 11. Table of Contents "Contents"

Item 12. General Information
and History Not Applicable

Item 13. Investment Objectives "Investment Objective
and Policies and Policies" and "Investment
Restrictions"

Item 14. Management of the Fund "Management"

Item 15. Control Persons and "Management"
Principal Holders
of Securities

Item 16. Investment Advisory and "Management"
Other Services

Item 17. Brokerage Allocation "Portfolio Transactions"

Item 18. Capital Stock and "The Fund and Its Shares"
Other Securities

Item 19. Purchase, Redemption "Redemption of Shares" and
and Pricing of "Determination of Net Asset
Securities Being Value"
Offered

Item 20. Tax Status "Taxation"

Item 21. Underwriters Not Applicable

Item 22. Calculation of "Calculation of Performance
Performance Data Data"

Item 23. Financial Statements "Experts and Financial Statements"

<PAGE>

Prospectus dated March 29, 1996

PROSPECTUS
STANDISH EQUITY FUND

One Financial Center
Boston, Massachusetts 02111
(800) 221-4795

Standish Equity Fund (the "Fund") is one fund in the Standish, Ayer &
Wood family of funds. The Fund is organized as a separate diversified investment
series of Standish, Ayer & Wood Investment Trust (the "Trust"), an open-end
management investment company.

The Fund's investment objective is to achieve long-term growth of
capital through investment primarily in equity securities of companies which
appear to be undervalued. Under normal circumstances, at least 80% of the Fund's
assets will be invested in such securities. The Fund seeks to achieve its
investment objective by investing all its investable assets (the "Investable
Assets") in the Standish Equity Portfolio (the "Portfolio") which has the same
investment objective as the Fund. The Portfolio is a series of Standish, Ayer &
Wood Master Portfolio (the "Portfolio Trust"), which is also an open-end
management investment company. The Portfolio invests primarily in publicly
traded equity securities of United States companies and, to a lesser extent, of
foreign issuers. The Portfolio normally does not invest in securities which are
restricted as to disposition by federal securities laws or are otherwise
illiquid but may do so to a limited extent under certain circumstances. See
"Investment Policies." Standish, Ayer & Wood, Inc. ("Standish"), Boston,
Massachusetts, is the Portfolio's investment adviser (the "Adviser").

UNLIKE OTHER MUTUAL FUNDS WHICH DIRECTLY ACQUIRE AND MANAGE THEIR OWN
PORTFOLIOS OF SECURITIES, THE FUND SEEKS TO ACHIEVE ITS INVESTMENT OBJECTIVE BY
INVESTING ALL OF ITS INVESTABLE ASSETS IN THE PORTFOLIO WHICH IS A SEPARATE FUND
WITH AN IDENTICAL INVESTMENT OBJECTIVE. SEE "SPECIAL INFORMATION CONCERNING THE
HUB AND SPOKE MASTER-FEEDER FUND STRUCTURE" ON PAGE .

Investors may purchase shares of the Fund from the Trust's principal
underwriter, Standish Fund Distributors, L.P. (the "Principal Underwriter"), at
the address and phone number set forth above without a sales commission or other
transaction charges. Unless waived by the Fund, the minimum initial investment
is $100,000. Additional investments may be made in amounts of at least $10,000.

This Prospectus is intended to set forth concisely the information
about the Fund and the Trust that a prospective investor should know before
investing. Investors are encouraged to read this Prospectus and retain it for
future reference. Additional information about the Fund and the Trust is
contained in a Statement of Additional Information which has been filed with the
Securities and Exchange Commission (the "SEC") and is available upon request and
without charge by calling or writing the Principal Underwriter at the telephone
number or address set forth above. The

<PAGE>

Statement of Additional Information bears the same date as this Prospectus and
is incorporated by reference into this Prospectus.

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.

<PAGE>

CONTENTS

Expense Information
Financial Highlights
Investment Objective and Policies
Risk Factors and Suitability
Special Information Concerning the Hub and Spoke Master-Feeder Fund
Structure
Calculation of Performance Data
Dividends and Distributions
Purchase of Shares
Exchange of Shares
Redemption of Shares
Management
Federal Income Taxes
The Fund and The Portfolio
Principal Underwriter
Custodian, Transfer Agent and Dividend Disbursing Agent
Independent Accountants
Legal Counsel
Tax Certification Instructions

<PAGE>

EXPENSE INFORMATION

Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fees None
Exchange Fee None

Annual Operating Expenses

Management Fees1 0.50 %
12b-1 Fees None
Other Expenses (After Expense Limitation) 0.21%*
Total Operating Expenses (After Expense Limitation) 0.71%*

<TABLE>
<CAPTION>
Example 1 yr. 3 yrs. 5 yrs. 10 yrs.
- ------- ----- ------ ------ -------

<S> <C> <C> <C> <C>
You 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: $8 $25 $44 $98

You would pay the following
expenses on the same investment,

assuming no redemption: $8 $25 $44 $98
</TABLE>

The purpose of the above table is to assist the investor in
understanding the various costs and expenses of the Fund and the Portfolio that
an investor in the Fund will bear directly or indirectly. The figure shown in th
caption "Other Expenses," which includes, among other things, custodian and
transfer agent fees, registration costs and payments for insurance and audit and
legal services, is estimated upon expenses for the Fund's fiscal year ended
December 31, 1995. The Trustees of the Trust believe that over time the
aggregate per share expenses of the Fund and the Portfolio will not be more than
the expenses which the Fund would incur if it were to retain the services of an
investment adviser and the Investable Assets of the Fund were invested directly
in the types of securities being held by the Portfolio.

1 As of the close of business on March 29, 1996, the Fund transferred its
Investable Assets to the Portfolio in exchange for an interest in the Portfolio.
Prior to such date, the Trust, on behalf of the Fund, retained Standish as its
investment adviser.

* Standish has voluntarily agreed to limit the master-feeder aggregate annual
operating expenses (excluding brokerage commissions, taxes and extraordinary
expenses) of the Fund and the Portfolio to the Fund's ratio of expenses to

<PAGE>

average net assets in effect immediately prior to the Fund's conversion to the
Hub and Spoke master-feeder fund structure. Standish may discontinue or modify
such limitation in the future at its discretion, although it has no current
intention to do so. In the absence of such agreement, Other Expenses and Total
Operating Expenses of the Fund and the Portfolio are estimated to be 0.29% and
0.79%, respectively, of average daily net assets.

For more information with respect to the expenses of the Fund and the
Portfolio see "Management-Investment Adviser" and "Management-Expenses" herein.

THE INFORMATION IN THE TABLE AND HYPOTHETICAL EXAMPLE ABOVE SHOULD NOT
BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES
MAY BE GREATER OR LESS THAN THOSE SHOWN. MOREOVER, WHILE THE EXAMPLE ASSUMES A
5% ANNUAL RETURN, THE FUND'S ACTUAL PERFORMANCE WILL VARY AND MAY RESULT IN AN
ACTUAL RETURN GREATER OR LESS THAN 5%.

FINANCIAL HIGHLIGHTS

The financial highlights for the years ended December 31, 1993 , 1994,
and 1995 have been audited by Coopers & Lybrand L.L.P., independent accountants,
whose report, together with the financial statements of the Fund, is
incorporated into the Statement of Additional Information.

Per share data (for a share outstanding throughout each period):

Year Ended December 31,
1995 1994 1993 1992* 1991*,+
<S> <C> <C> <C> <C> <C>

Net asset value - beginning of period $30.89 $26.28 $25.66 $20.00
------ ------- ------ ------
Income from investment operations:
Net investment income** $0.45 $0.50 $0.56 $0.46
Net realized and unrealized
gain (loss) on investments (1.62) 5.57 1.81 6.17
------ ---- ----- ----

Total from investment operations ($1.17) $6.07 $2.37 $6.63
------- ----- ------ -----

Less distributions declared to shareholders:
From net investment income ($0.44) ($.47) ($ .54) ($0.35)
From realized gain ($0.62) ($.99) ($1.19) ($0.62)
From paid-in capital -- -- (0.02) --
------------------- -----------------

Total distributions declared
to shareholders ($1.06) ($1.46) ($1.75) ($0.97)
------- -------- ------- -------

Net asset value - end of period $28.66 $30.89 $26.28 $25.66
====== ======= ====== ======

Total return (3.78)% 20.79% 9.52% 33.45% t

</TABLE>

<PAGE>

Ratios (to average net assets)/
Supplemental Data:
Expenses** 0.70% 0.80% 0.000% 1.00% t
Net investment income** 1.55% 1.29% 2.52% 1.92% t
Portfolio turnover 182% 192% 92% 86%
Net assets at end of period
(000 omitted) $86,591 $72,916 $14,680 $7,498
</TABLE>

** The Adviser did not impose a portion of its advisory fee. If this voluntary
reduction had not been undertaken, the net investment income per share and the
ratios would have been:
<TABLE>
<CAPTION>

<S> <C> <C> <C> <C> <C>
Net investment income per share $0.47 $0.34 $0.23 #
Ratios (to average net assets):
Expenses 0.97% 1.00% $1.99% #
Net investment income 1.12% 1.52% 0.93% #t
</TABLE>

Computed on an annualized basis.
*Audited by other auditors.
+For the period from January 2, 1991 (start of business) to December 31, 1991.
#Unaudited

Further information about the performance of the Fund is contained in
the Fund's Annual Report, which may be obtained from the Principal Underwriter
without charge.

INVESTMENT OBJECTIVE AND POLICIES

The Fund seeks to achieve its investment objective by investing all its
Investable Assets in the Portfolio which has the same investment objective as
the Fund. There can be no assurance that the investment objective of either the
Fund or the Portfolio will be achieved.

Since the investment characteristics of the Fund will correspond
directly to those of the Portfolio, the following is a discussion of the various
investments and investment policies of the Portfolio.

The Portfolio's investment objective is to achieve long-term growth of
capital through investment primarily in equity and equity-related securities of
companies which appear to be undervalued. Under normal circumstances, at least
80% of the Portfolio's total assets will be invested in such securities. (Equity
and equity-related securities include common stocks, preferred stocks,
securities convertible into common stocks and options, futures and other
strategic transactions based on common stocks.) The Portfolio may invest in
equity securities of foreign issuers that are listed on a United States
securities exchange or traded in the U.S. over-the-counter market, and may
invest up to 10% of its assets in such securities which are not so listed or
traded.

<PAGE>

The Portfolio may also invest in debt securities and preferred stocks
which are convertible into, or exchangeable for, common stocks. Such securities
will be rated Aaa, Aa or A by Moody's Investors Service, Inc. ("Moody's"), or
AAA, AA or A by Standard & Poor's Ratings Group ("Standard & Poor's") or if not
rated, are determined to be of comparable credit quality by the Adviser. Up to
5% of the Portfolio's total assets invested in convertible debt securities and
preferred stocks may be rated Baa by Moody's or BBB by Standard & Poor's or, if
not rated, determined to be of comparable credit quality by the Adviser. In the
case of a security that is rated differently by the two rating services, the
higher rating is used in connection with the foregoing policy. In the event the
rating on a security held by the Portfolio is downgraded by a rating service,
such action will be considered by the Adviser in its evaluation of the overall
investment merits of that security, but will not necessarily result in the sale
of the security. Securities rated Baa by Moody's or BBB by Standard & Poor's and
unrated securities of equivalent credit quality are considered medium grade
obligations with speculative characteristics. Adverse changes in economic
conditions or other circumstances are more likely to weaken the issuer's
capacity to pay interest and repay principal on these securities than is the
case for issuers of higher rated securities.

The Portfolio may write call options on its portfolio securities and
purchase put options on its portfolio securities and invest in financial futures
contracts on U.S. equity indices and options on such futures contracts. Although
the Portfolio does not normally invest in equity securities which are restricted
as to disposition by federal securities laws or are otherwise illiquid, the
Portfolio may do so to a limited extent under certain circumstances. Because of
the uncertainty inherent in all investments, no assurance can be given that
either the Fund or the Portfolio will achieve its investment objective.

The investment objective of the Fund is a fundamental policy which may
not be changed without a vote of the Fund's shareholders. The investment
objective of the Portfolio is not a fundamental policy and may be changed upon
notice to, but without the approval of, the Portfolio's investors. Investment
policies which are not fundamental policies may be changed by the Trustees of
the Trust and the Trustees of the Portfolio Trust, without the approval of the
Fund's shareholders or the Portfolio's investors. The Fund's and the Portfolio's
investment policies are described further in the Statement of Additional
Information.

Investment Policies

The Portfolio will follow a disciplined investment strategy,
emphasizing stocks which the Adviser believes to offer above average potential
for capital growth. Although the precise application of the discipline will vary
according to market conditions, the Adviser intends to use statistical modeling
techniques that utilize stock specific factors, such as current price earnings
ratios, stability of earnings growth, forecasted changes in earnings growth,
trends in consensus analysts' estimates, and measures of earnings results
relative to expectations, to identify equity securities that are attractive as
purchase candidates. Once identified, these securities will

<PAGE>

be subject to further fundamental analysis by the Adviser's professional staff
before they are included in the Portfolio's holdings. Securities selected for
inclusion in the Portfolio's holdings will represent various industries and
sectors.

Short-Term Debt Securities

The Portfolio may establish and maintain cash balances for temporary
purposes in order to maintain liquidity to meet shareholder redemptions. The
Portfolio may also establish and maintain cash balances for temporary defensive
purposes without limitation to hedge against potential stock market declines.
The Portfolio's cash balances, including uncommitted cash balances, may be
invested in investment grade money market instruments and short-term
interest-bearing securities. The securities consist of U.S. Government
obligations and obligations issued or guaranteed by any U.S. Government agencies
or instrumentalities, instruments of U.S. and foreign banks (including
negotiable certificates of deposit, non-negotiable fixed time deposits and
bankers' acceptances), repurchase agreements, prime commercial paper of U.S. and
foreign companies, debt securities that make periodic interest payments at
variable or floating rates and other money market securities and investments.

The Portfolio's investments in money market securities (i.e.,
securities with maturities of less than one year) will be rated, at the time of
investment P-1, by Moody's or A-1 by Standard & Poor's. At least 95% of the
Portfolio's assets invested in short-term interest-bearing securities (i.e.,
securities with maturities of one to three years) will be rated, at the time of
investment, Aaa, Aa, or A by Moody's or AAA, AA, or A by Standard & Poor's or,
if not rated, determined to be of comparable credit quality by the Adviser. Up
to 5% of assets invested in such short-term securities may be invested in
securities which are rated Baa by Moody's or BBB by Standard & Poor's or, if not
rated, determined to be of comparable credit quality by the Adviser. Yields on
debt securities depend on a variety of factors, such as general conditions in
the money and bond markets, and the size, maturity and rating of a particular
issue. Debt securities with longer maturities tend to produce higher yields and
are generally subject to greater potential capital appreciation and
depreciation. The market prices of debt securities usually vary depending upon
available yields, rising when interest rates decline and declining when interest
rates rise.

<PAGE>

Foreign Securities

Although the Portfolio intends to invest primarily in equity securities
of U.S. issuers, the Portfolio may invest (without limitation) in equity
securities of foreign issuers that are listed on a United States exchange or
traded in the U.S. over-the-counter market, and may invest up to 10% of its
assets in foreign equity securities which are not so listed or traded. Foreign
securities will be selected for investment by the Portfolio if the Adviser
believes these securities will offer above average capital growth potential.
Investing in securities of foreign companies and securities denominated in
foreign currencies or utilizing foreign currency transactions involve certain
risks. See "Risk Factors and Suitability."

Strategic Transactions

The Portfolio may, but is not required to, utilize various other
investment strategies as described below to hedge various market risks (such as
interest rates, currency exchange rates, and broad or specific equity market
movements), or to enhance potential gain. Such strategies are generally accepted
as part of modern portfolio management and are regularly utilized by many mutual
funds and other institutional investors. Techniques and instruments used by the
Portfolio may change over time as new instruments and strategies are developed
or regulatory changes occur.

<PAGE>

the Portfolio's net assets at any one time and, to the extent necessary, the
Portfolio will close out transactions in order to comply with this limitation.
(Transactions such as writing covered call options are considered to involve
hedging for the purposes of this limitation.) In calculating the Portfolio's net
loss exposure from such Strategic Transactions, an unrealized gain from a
particular Strategic Transaction position would be netted against an unrealized
loss from a related Strategic Transaction position. For example, if the Adviser
believes that the Portfolio is underweighted in cyclical stocks and overweighted
in consumer stocks, the Portfolio may buy a cyclical index call option and sell
a cyclical index put option and sell a consumer index call option and buy a
consumer index put option. Under such circumstances, any unrealized loss in the
cyclical position would be netted against any unrealized gain in the consumer
position (and vice versa) for purposes of calculating the Portfolio's net loss
exposure. The ability of the Portfolio to utilize these Strategic Transactions
successfully will depend on the Adviser's ability to predict pertinent market
movements, which cannot be assured. The Portfolio will comply with applicable
regulatory requirements when implementing these strategies, techniques and
instruments. The Portfolio's activities involving Strategic Transactions may be
limited to enable the Fund to comply with the requirements of Subchapter M of
the Internal Revenue Code of 1986, as amended (the "Code"), for qualification as
a regulated investment company.

Strategic Transactions have risks associated with them including
possible default by the other party to the transaction, illiquidity and, to the
extent the Adviser's view as to certain market movements is incorrect, the risk
that the use of such Strategic Transactions could result in losses greater than
if they had not been used. The writing of put and call options may result in
losses to the Portfolio, force the purchase or sale, respectively of portfolio
securities at inopportune times or for prices higher than (in the case of
purchases due to the exercise of put options) or lower than (in the case of
sales due to the exercise of call options) current market values, limit the
amount of appreciation the Portfolio can realize on its investments or cause the
Portfolio to hold a security it might otherwise sell. The use of currency
transactions can result in the Portfolio incurring losses as a result of a
number of factors including the imposition of exchange controls, suspension of
settlements, or the inability to deliver or receive a specified currency. The
use of options and futures transactions entails certain other risks. In
particular, the variable degree of correlation between price movements of
futures contracts and price movements in the related portfolio position of the
Portfolio creates the possibility that losses on the hedging instrument may be
greater than gains in the value of the Portfolio's position. The writing of
options could significantly increase the Portfolio's portfolio turnover rate
and, therefore, associated brokerage commissions or spreads. In addition,
futures and options markets may not be liquid in all circumstances and

<PAGE>

certain over-the-counter options may have no markets. As a result, in certain
markets, the Portfolio might not be able to close out a transaction without
incurring substantial losses, if at all. Although the use of futures and options
transactions for hedging should tend to minimize the risk of loss due to a
decline in the value of the hedged position, at the same time, in certain
circumstances, these transactions tend to limit any potential gain which might
result from an increase in value of such position. The loss incurred by the
Portfolio in writing options on futures and entering into futures transactions
is potentially unlimited; however, as described above, the Portfolio will limit
its net loss exposure resulting from Strategic Transactions entered into for
non-hedging purposes to 3% of its net assets at any one time. Futures markets
are highly volatile and the use of futures may increase the volatility of the
Portfolio's net asset value. Finally, entering into futures contracts would
create a greater ongoing potential financial risk than would purchases of
options where the exposure is limited to the cost of the initial premium. Losses
resulting from the use of Strategic Transactions would reduce net asset value
and the net result may be less favorable than if the Strategic Transactions had
not been utilized. Further information concerning the Portfolio's Strategic
Transactions is set forth in the Statement of Additional Information.

Short-Selling

The Portfolio may make short sales, which are transactions in which the
Portfolio sells a security it does not own in anticipation of a decline in the
market value of that security. To complete such a transaction, the Portfolio
must borrow the security to make delivery to the buyer. The Portfolio then is
obligated to replace the security borrowed by purchasing it at the market price
at the time of replacement. The price at such time may be more or less than the
price at which the security was sold by the Portfolio. Until the security is
replaced, the Portfolio is required to pay to the lender amounts equal to any
dividends or interest which accrue during the period of the loan. To borrow the
security, the Portfolio also may be required to pay a premium, which would
increase the cost of the security sold. The proceeds of the short sale will be
retained by the broker, to the extent necessary to meet margin requirements,
until the short position is closed out.

Until the Portfolio replaces a borrowed security in connection with a
short sale, the Portfolio will: (a) maintain daily a segregated account not with
the broker, containing cash or U.S. Government securities, at such a level that
the amount deposited in the account plus the amount deposited with the broker as
collateral will equal the current value of the security sold short ; or (b)
otherwise cover its short position.

<PAGE>

The Portfolio will incur a loss as a result of the short sale if the
price of the security increases between the date of the short sale and the date
on which the Portfolio replaces the borrowed security. The Portfolio will
realize a gain if the security declines in price between those dates by an
amount greater than the premium and transaction costs. This result is the
opposite of what one would expect from a cash purchase of a long position in a
security. The amount of any gain will be decreased, and the amount of any loss
increased, by the amount of any premium or amounts in lieu of dividends or
interest the Portfolio may be required to pay in connection with a short sale.

The Portfolio's loss on a short sale as a result of an increase in the
price of a security sold short is potentially unlimited. The Portfolio may
purchase call options to provide a hedge against an increase in the price of a
security sold short by the Portfolio. When the Portfolio purchases a call option
it must pay a premium to the person writing the option and a commission to the
broker selling the option. If the option is exercised by the Portfolio, the
premium and the commission paid may be more than the amount of the brokerage
commission charged if the security were to be purchased directly. See "Strategic
Transactions" above.

The Portfolio anticipates that the frequency of short sales will vary
substantially in different periods, and it does not intend that any specified
portion of its assets, as a matter of practice, will be in short sales. However,
no securities will be sold short if, after giving effect to any such short sale,
the total market value of all securities sold short would exceed 5% of the value
of the Portfolio's net assets.

In addition to the short sales discussed above, the Portfolio may make
short sales "against the box," a transaction in which the Portfolio enters into
a short sale of a security which the Portfolio owns. The proceeds of the short
sale are held by a broker until the settlement date at which time the Portfolio
delivers the security to close the short position. The Portfolio receives the
net proceeds from the short sale.

Repurchase Agreements

<PAGE>

securities and other collateral held by the Portfolio in connection with the
related repurchase agreement are less than the repurchase price. In addition, in
the event of bankruptcy of the seller or failure of the seller to repurchase the
securities as agreed, the Portfolio could suffer losses, including loss of
interest on or principal of the security and costs associated with delay and
enforcement of the repurchase agreement.

Portfolio Turnover

It is not the policy of the Portfolio to purchase or sell securities
for trading purposes. However, the Portfolio places no restrictions on portfolio
turnover and it may sell any portfolio security without regard to the period of
time it has been held. The Portfolio may therefore generally change its
portfolio investments at any time in accordance with the Adviser's appraisal of
factors affecting any particular issuer or market, or the economy in general. A
rate of turnover of 100% would occur, for example, if the value of the lesser of
purchases and sales of portfolio securities for a particular year equaled the
average monthly value of portfolio securities owned during the year (excluding
securities with a maturity date of one year or less at the date of acquisition).
A high rate of portfolio turnover involves a correspondingly greater amount of
transaction costs which must be borne directly by the Portfolio and thus
indirectly by the Fund and its shareholders. It may also result

<PAGE>

in the realization of larger amounts of net short-term capital gains, the Fund's
distributions from which are taxable to Fund shareholders as ordinary income and
may, under certain circumstances, make it more difficult for the Fund to qualify
as a regulated investment company under the Code. The portfolio turnover rates
are listed in the section captioned "Financial Highlights."

Investment Restrictions

Each of the Fund and the Portfolio have adopted certain fundamental
policies which may not be changed without the approval of the Fund's
shareholders or the Portfolio's investors, as the case may be.

The Fund has the same investment restrictions as the Portfolio, except
that the Fund may invest substantially all of its Investable Assets in an
open-end management investment company with substantially the same investment
objective as the Fund. References below to the Portfolio's investment
restrictions also include the Fund's investment restrictions. These policies
provide, among other things, that the Portfolio may not: (i) with respect to at
least 75% of its total assets, invest more than 5% in the securities of any one
issuer (other than the U.S. Government, its agencies or instrumentalities) or
acquire more than 10% of the outstanding voting securities of any issuer; (ii)
issue senior securities, borrow money, enter into reverse repurchase agreements
or pledge or mortgage its assets, except that the Portfolio may borrow from
banks in an amount up to 15% of the current value of its total assets as a
temporary measure for extraordinary or emergency purposes (but not investment
purposes), and pledge its assets to an extent not greater than 15% of the
current value of its total assets to secure such borrowings; however, the
Portfolio may not make any additional investments while its outstanding
borrowings exceed 5% of the current value of its total assets; (iii) make loans
of portfolio securities, except that the Portfolio may enter into repurchase
agreements with respect to 10% of the value of its net assets; or (iv) invest
more than 25% of its total assets in a single industry except that this
restriction shall not apply to U.S. Government securities .

If any percentage restriction described above is adhered to at the time
of investment, a subsequent increase or decrease in the percentage resulting
from a change in the value of the Portfolio's assets will not constitute a
violation of the restriction. Additional fundamental policies adopted by the
Fund and the Portfolio are described in the Statement of Additional Information.

<PAGE>

RISK FACTORS AND SUITABILITY

The Fund is not intended to provide an investment program meeting all
of the requirements of an investor. The Portfolio will not emphasize current
income unless this income will have a favorable influence on the market value of
a portfolio security. Additionally, notwithstanding the Portfolio's ability to
spread risk by holding securities of a number of portfolio companies,
shareholders of the Fund should be able and prepared to bear the risk of
investment losses which may accompany the investments contemplated by the
Portfolio.

Foreign Securities

Investing in securities of foreign companies and securities denominated
in foreign currencies or utilizing foreign currency transactions involve certain
risks of political, economic and legal conditions and developments not typically
associated with investing in securities of U.S. companies. Such conditions or
developments might include unfavorable changes in currency exchange rates,
exchange control regulations (including currency blockage), expropriation of
assets of companies in which the Portfolio invests, nationalization of such
companies, imposition of withholding taxes on dividend or interest payments, and
possible difficulty in obtaining and enforcing judgments against a foreign
issuer. Also, foreign securities may not be as liquid and may be more volatile
than comparable domestic securities. Furthermore, issuers of foreign securities
are subject to different, often less comprehensive, accounting, reporting and
disclosure requirements than domestic issuers. The Portfolio , in connection
with its purchases and sales of foreign securities, other than securities
denominated in United States dollars, will incur transaction costs in converting
currencies. Brokerage commissions in foreign countries are generally fixed, and
other transaction costs related to securities exchanges are generally higher
than in the United States. Most foreign securities of the Portfolio are held by
foreign subcustodians that satisfy certain eligibility requirements. However,
foreign subcustodian arrangements are significantly more expensive than domestic
custody. In addition, foreign settlement of securities transactions is subject
to local law and custom that is not, generally, as well established or as
reliable as U.S. regulation and custom applicable to settlements of securities
transactions and, accordingly, there is generally perceived to be a greater risk
of loss in connection with securities transactions in many foreign countries.
The Portfolio's policy of investing no more than 10% of its total assets in
foreign securities that are not listed on a U.S. stock exchange or traded in the
U.S. over-the-counter market is intended to limit the Portfolio's exposure to
the risks associated with investments in foreign securities.

<PAGE>

Special Information Concerning the Hub and Spoke(R) Master-Feeder Fund
Structure1

Unlike other mutual funds which directly acquire and manage their own
portfolio securities, the Fund seeks to achieve its investment objective by
investing all of its Investable Assets in the Portfolio which has the same
investment objective as the Fund. The Portfolio in turn invests primarily in
securities consistent with that objective. Therefore, an investor's interest in
the Portfolio's securities is indirect, like investments in other investment
companies and pooled investment vehicles only more so. In addition to selling a
beneficial interest to the Fund, the Portfolio may sell beneficial interests to
other mutual funds or institutional investors. Such investors will invest in the
Portfolio on the same terms and conditions and will pay a proportionate share of
the Portfolio's expenses. However, the other investors investing in the
Portfolio are not required to sell their shares at the same public offering
price as the Fund due to the imposition of sales commissions and variations in
other operating expenses. Therefore, investors in the Fund should be aware that
these differences may result in differences in returns experienced by investors
in the different funds that invest in the Portfolio. Such differences in returns
are also present in other mutual fund structures. Information concerning other
holders of interests in the Portfolio is available from the Adviser [( ) -
].

The Hub and Spoke master-feeder fund structure has been developed
relatively recently, so shareholders should carefully consider this investment
approach.

Smaller funds investing in the Portfolio may be materially affected by
the actions of larger funds investing in the Portfolio. For example, if a large
fund withdraws from the Portfolio, the remaining funds may experience higher pro
rata operating expenses, thereby producing lower returns (however, this
possibility exists as well for traditionally structured funds that have large
institutional investors). Additionally, because the Portfolio would have fewer
assets in such a case, it may become less diversified, resulting in increased
portfolio risk. Also, funds with a greater pro rata ownership in the Portfolio
could have effective voting control of the operations of the Portfolio. Except
as permitted by the SEC, whenever the Trust is requested to vote on matters
pertaining to the Portfolio (other than a vote by the Fund to continue the
operations of the Portfolio upon the withdrawal of another investor in the
Portfolio), the Trust will hold a meeting of shareholders of the Fund and will
cast all of its votes in the same proportion as the votes of the Fund's
shareholders. The percentage of the Trust's votes representing Fund shareholders
not voting will be voted by the Trustees or officers of the Trust in the same
proportion as the Fund shareholders who do, in fact, vote. Fund shareholders who
do not vote will not affect the Trust's votes at the Portfolio meeting.

Certain changes in the Portfolio's investment objectives,

- --------
1 Hub and Spoke(R) is a registered service mark of Signature Financial
Group, Inc.

<PAGE>

policies or restrictions may require the Fund to withdraw its interest in the
Portfolio. Any such withdrawal could result in a distribution "in kind" of
portfolio securities (as opposed to a cash distribution from the Portfolio) to
the extent permitted by the Investment Company Act of 1940, as amended (the
"1940 Act"), or rules adopted thereunder. If securities are distributed, the
Fund could incur brokerage, tax or other charges in converting the securities to
cash. In addition, the distribution in kind may result in a less diversified
portfolio of investments or adversely affect the liquidity of the Fund.
Notwithstanding the above, there are other means for meeting redemption
requests, such as borrowing.

The Fund may withdraw its investment from the Portfolio at any time, if
the Board of Trustees of the Trust determines that it is in the best interests
of the shareholders of the Fund to do so. Upon any such withdrawal, the Board of
Trustees of the Trust would consider what action might be taken, including
investing all the Investable Assets of the Fund in another pooled investment
entity having the same investment objectives as the Fund or retaining an
investment adviser to manage the Fund's assets in accordance with the investment
policies described above with respect to the Portfolio.

The Fund's investment objective is a fundamental policy and may not be
changed without the approval of the Fund's shareholders. The investment
objective of the Portfolio is not a fundamental policy and may be changed
without the approval of the investors in the Portfolio. Shareholders of the Fund
will receive 30 days prior written notice with respect to any change in the
investment objective of the Portfolio. See "Investment Objective and Policies"
for a description of the fundamental policies of the Portfolio that cannot be
changed without approval by the "vote of a majority of the outstanding voting
securities" (as defined in the 1940 Act) of the Portfolio.

For descriptions of the investment objective, policies and restrictions
of the Portfolio, see "Investment Objective and Policies." For descriptions of
the management of the Portfolio, see "Management" herein and in the Statement of
Additional Information. For descriptions of the expenses of the Portfolio, see
"Management" herein.

CALCULATION OF PERFORMANCE DATA

From time to time the Fund may advertise its total return. Total return
figures are based on historical earnings and are not intended to indicate future
performance. The "total return" of the Fund refers to the average annual
compounded rates of return over 1, 5 and 10 year periods that would equate an
initial amount invested at the beginning of a stated period to the ending
redeemable value of the investment. The calculation assumes the reinvestment of
all dividends and distributions, includes all recurring fees that are charged to
all shareholder accounts and

<PAGE>

deducts all nonrecurring charges at the end of each period. If the Fund has been
operating less than 1, 5 or 10 years, the time period during which the Fund has
been operating is substituted.

From time to time, the Fund may compare its performance with that of
other mutual funds with similar investment objectives, to stock and other
relevant indices, and to performance rankings prepared by recognized mutual fund
statistical services. In addition, the Fund's performance may be compared to
alternative investment or savings vehicles and/or to indexes or indicators of
economic activity.

DIVIDENDS AND DISTRIBUTIONS

The Fund's dividends from short-term and long-term capital gains, if
any, after reduction by capital losses, will be declared and distributed at
least annually, as will any dividends from net investment income. In determining
the amounts of its dividends, the Fund will take into account its share of the
income, gains or losses, expenses, and any other tax items of the Portfolio.
Dividends from net investment income and from short-term and long-term capital
gains, if any, are automatically reinvested in additional shares of the Fund
unless the shareholder elects to receive them in cash. Please see the Fund's
account application or call the Principal Underwriter for instructions on how to
make payment of shares to the Fund's custodian.

PURCHASE OF SHARES

Shares of the Fund may be purchased from the Principal Underwriter,
which offers Fund shares to the public on a continuous basis. Shares are sold at
the net asset value per share next computed after the purchase order is received
in good order by the Principal Underwriter and payment for the shares is
received by the Fund's custodian. Unless waived by the Fund, the minimum initial
investment is $100,000. Additional investments may be made in amounts of at
least $10,000.

Shares of the Fund may also be purchased through securities dealers.
Orders for the purchase of Fund shares received by dealers by the close of
regular trading on the New York Stock Exchange on any business day and
transmitted to the Principal Underwriter by the close of its business day
(normally 4:00 p.m., New York City time) will be effected as of the close of
regular trading on the New York Stock Exchange on that day, provided that
payment for the shares is also received by the Fund's custodian on that day.
Otherwise, orders will be effected at the net asset value per share determined
on the next business day. It is the responsibility of dealers to transmit orders
so that they will be received by the Principal Underwriter before the close of
its business day. Shares of the Fund purchased through dealers may be subject to
transaction fees, no part of which will be received by the Fund, the Principal
Underwriter or the Adviser.

<PAGE>

The Fund's net asset value per share is computed on each day on which
the New York Stock Exchange is open as of the close of regular trading
(currently 4:00 p.m. New York City time). The net asset value per share is
calculated by determining the value of all the Fund's assets (i.e., the value of
its investment in the Portfolio and other assets), subtracting all liabilities
and dividing the result by the total number of shares outstanding. The
Portfolio's portfolio securities are valued at the last sales prices, on the
valuation date, on the exchange or national securities market on which they are
primarily traded. Securities not listed on an exchange or national securities
market, or securities for which there are no reported transactions, are valued
at the last quoted bid prices. Securities for which quotations are not readily
available and all other assets will be valued at fair value as determined in
good faith by the Adviser in accordance with procedures approved by the Trustees
of the Portfolio Trust. Additional information concerning the Portfolio's
valuation policies is contained in the Statement of Additional Information.

In the sole discretion of the Trust, the Fund may accept securities
instead of cash for the purchase of shares of the Fund. The Trust will ask the
Adviser to determine that any securities acquired by the Fund in this manner are
consistent with the investment objective, policies and restrictions of the
Portfolio. The securities will be valued in the manner stated above. The
purchase of shares of the Fund for securities instead of cash may cause an
investor who contributed them to realize a taxable gain or loss with respect to
the securities transferred to the Fund.

The Trust reserves the right in its sole discretion (i) to suspend the
offering of the Fund's shares, (ii) to reject purchase orders when in the best
interest of the Fund and (iii) to modify or eliminate the minimum initial
investment in Fund shares. The Fund's minimums for investing do not apply to
accounts for which the Adviser or any of its affiliates serves as investment
adviser or to employees of the Adviser or any of its affiliates or to members of
such persons' immediate families. The Fund's minimums for investing apply to
omnibus accounts rather than to the underlying participants in the omnibus
accounts.

EXCHANGE OF SHARES

<PAGE>

take up to three business days), your money will not be invested. To obtain a
current prospectus for any of the other funds in the Standish, Ayer & Wood
family of funds, please call the Principal Underwriter at (800) 221-4795. Please
consider the differences in investment objectives and expenses of a fund as
described in its prospectus before making an exchange.

Written Exchanges

Shares of the Fund may be exchanged by written order to the Principal
Underwriter, One Financial Center, Boston, Massachusetts 02111. A written
exchange request must (a) state the name of the current Fund, (b) state the name
of the fund into which the current Fund shares will be exchanged, (c) state the
number of shares or the dollar amount to be exchanged, (d) identify the
shareholder's account numbers in both funds and (e) be signed by each registered
owner exactly as the shares are registered. Signature(s) must be guaranteed as
listed under "Written Redemption" below.

Telephonic Exchanges

Shareholders who complete the telephonic privileges portion of the
Fund's account application may exchange shares by calling the Principal
Underwriter at (800) 221-4795. Telephonic privileges are not available to
shareholders automatically; they must first elect the privileges. Proper
identification will be required for each telephonic exchange. Please see
"Telephone Transactions" below for more information regarding telephonic
transactions.

General Exchange Information

All exchanges are subject to the following exchange restrictions: (i)
the fund into which shares are being exchanged must be registered for sale in
your state; (ii) exchanges may be made only between funds that are registered in
the same name, address and, if applicable, taxpayer identification number; and
(iii) unless waived by the Trust, the amount to be exchanged must satisfy the
minimum account size of the fund to be exchanged into.
Exchange requests will not be processed until payment for the shares of the
current Fund have been received by the Principal Underwriter. The exchange
privilege may be changed or discontinued and may be subject to additional
limitations upon sixty (60) days' notice to shareholders, including certain
restrictions on purchases by market-timer accounts.

REDEMPTION OF SHARES

Shares of the Fund may be redeemed by any of the methods described
below at the net asset value per share next determined after receipt of a
redemption request in proper form. Redemptions will not be processed until a
completed Share Purchase Application and payment for the shares to be redeemed
have been received.

<PAGE>

Written Redemption

Shares of the Fund may be redeemed by written order to the Principal
Underwriter, One Financial Center, 26th Floor, Boston, MA 02111. A written
redemption request must (a) state the name of the Fund and the number of shares
or the dollar amount to be redeemed, (b) identify the shareholder's account
number and (c) be signed by each registered owner exactly as the shares are
registered. Signatures must be guaranteed by a member of either the Securities
Transfer Association's STAMP program or the New York Stock Exchange's Medallion
Signature Program or by any one of the following institutions, provided that
such institution meets credit standards established by Investors Bank & Trust
Company, the Fund's transfer agent: (i) a bank; (ii) a securities broker or
dealer, including a government or municipal securities broker or dealer, that is
a member of a clearing corporation or has net capital of at least $100,000;
(iii) a credit union having authority to issue signature guarantees; (iv) a
savings and loan association, a building and loan association, a cooperative
bank, or a federal savings bank or association; or (v) a national securities
exchange, a registered securities exchange or a clearing agency. Additional
supporting documents may be required in the case of estates, trusts,
corporations, partnerships and other shareholders that are not individuals.
Redemption proceeds will normally be paid by check mailed within three business
days of receipt by the Principal Underwriter of a written redemption request in
proper form. If shares to be redeemed were recently purchased by check, the Fund
may delay transmittal of redemption proceeds until such time as it has assured
itself that good funds have been collected for the purchase of such shares. This
may take up to fifteen (15) days in the case of payments made by check.

Telephonic Redemption

<PAGE>

will be sent only by check payable to the shareholder of record at the address
of record, unless the shareholder has indicated, in the initial application for
the purchase of shares or subsequently in writing, a commercial bank to which
redemption proceeds may be sent by wire. These instructions may be changed
subsequently only in writing, accompanied by a signature guarantee, and
additional documentation in the case of shares held by a corporation or other
entity or by a fiduciary such as a trustee or executor. Proper identification
will be required for each telephonic redemption.

Repurchase Order

In addition to written redemption of Fund shares, the Principal
Underwriter may accept telephone orders from brokers or dealers for the
repurchase of Fund shares or from the Adviser with respect to accounts over
which it has investment discretion. The repurchase price is the net asset value
per share next determined after receipt of the repurchase order by the Principal
Underwriter and payment for the shares by the Fund's custodian Brokers and
dealers are obligated to transmit repurchase orders to the Principal Underwriter
prior to the close of the Principal Underwriter's business day (normally 4:00
p.m.). Brokers or dealers may charge for their services in connection with a
repurchase of Fund shares, but neither the Trust nor the Principal Underwriter
imposes a charge for share repurchases.

Telephone Transactions

By maintaining an account that is eligible for telephonic exchange and
redemption privileges, the shareholder authorizes the Adviser, the Principal
Underwriter, the Trust and the Fund's custodian to act upon instructions of any
person to redeem and/or exchange shares from the shareholder's account. Further,
the

<PAGE>

shareholder acknowledges that, as long as the Fund employs reasonable procedures
to confirm that telephonic instructions are genuine, and follows telephonic
instructions that it reasonably believes to be genuine, neither the Adviser, nor
the Principal Underwriter, nor the Trust, nor the Fund, nor the Fund's
custodian, nor their respective officers or employees, will be liable for any
loss, expense or cost arising out of any request for a telephonic redemption or
exchange, even if such transaction results from any fraudulent or unauthorized
instructions. Depending upon the circumstances, the Fund intends to employ
personal identification or written confirmation of transactions procedures, and
if it does not, the Fund may be liable for any losses due to unauthorized or
fraudulent instructions. All telephone transaction requests will be recorded.
Shareholders may experience delays in exercising telephone transaction
privileges during periods of abnormal market activity. Accordingly, during
periods of volatile economic and market conditions, shareholders may wish to
consider transmitting redemption and exchange requests in writing.

* * * *

The proceeds paid upon redemption or repurchase may be more or less
than the cost of the shares, depending upon the market value of the Portfolio's
portfolio investments at the time of redemption or repurchase. The Fund intends
to pay cash for all shares redeemed, but under certain conditions, the Fund may
make payments wholly or partially in securities withdrawn from the Portfolio for
this purpose. Please see the Statement of Additional Information for further
information regarding the Fund's ability to satisfy redemption requests in-kind.

Because of the cost of maintaining shareholder accounts, the Fund may
redeem, at net asset value, the shares in any account if the value of such
shares has decreased to less than $25,000 as a result of redemptions or
transfers. Before doing so, the Fund will notify the shareholder that the value
of the shares in the account is less than the specified minimum and will allow
the shareholder 30 days to make an additional investment in an amount which will
increase the value of the account to at least $25,000. The Fund may eliminate
duplicate mailings of Fund materials to shareholders that have the same address
of record.

MANAGEMENT

Trustees

The Fund is a separate investment series of Standish, Ayer & Wood
Investment Trust, a Massachusetts business trust. Under the terms of the
Agreement and Declaration of Trust establishing the Trust, which is governed by
the laws of The Commonwealth of Massachusetts, the Trustees of the Trust are
ultimately responsible for the management of its business and affairs.

<PAGE>

The Portfolio is a separate investment series of Standish, Ayer & Wood
Master Portfolio, a master trust fund organized under the laws of the State of
New York. Under the terms of the Declaration of Trust, the affairs of the
Portfolio are managed under the supervision of the Trustees of the Portfolio
Trust.

A majority of the Trustees who are not "interested persons" (as defined
in the 1940 Act) of the Trust or the Portfolio Trust, as the case may be, have
adopted written procedures reasonably appropriate to deal with potential
conflicts of interest arising from the fact that the same individuals are
trustees of the Trust and of the Portfolio Trust, up to and including creating
separate boards of trustees. See "Management" in the Statement of Additional
Information for more information about the Trustees and officers of the Trust
and the Portfolio Trust.

Investment Adviser

Standish, One Financial Center, Boston, Massachusetts 02111, serves as
investment adviser to the Portfolio pursuant to an investment advisory agreement
with the Portfolio Trust and manages the Portfolio's investments and affairs
subject to the supervision of the Trustees of the Portfolio Trust.

The Adviser is a Massachusetts corporation incorporated in 1933 and is a
registered investment adviser under the Investment Advisers Act of 1940.

The Adviser provides fully discretionary management services and
counseling and advisory services to a broad range of clients throughout the
United States. The Adviser also provides investment advisory services to certain
other funds within the Standish, Ayer & Wood family of funds, acting as
investment adviser to Standish Controlled Maturity Fund, Standish Small
Capitalization Equity Portfolio, Standish Fixed Income Portfolio, Standish Fixed
Income Fund II, Standish Short-Term Asset Reserve Fund, Standish Intermediate
Tax Exempt Bond Fund, Standish Massachusetts Intermediate Tax Exempt Bond Fund
and Standish Securitized Fund, which had net assets of $8 million, $180 million,
$2.3 billion, $8 million, $243 million , $33 million, $33 million and $55
million, respectively, at December 31, 1995. The Adviser also serves as the
investment adviser to Standish Tax-Sensitive Equity Fund and Standish Small Cap
Tax-Sensitive Equity Fund, which commenced operations on January 2, 1996. The
Adviser is the managing general partner of Standish International Management
Company, L.P. ("SIMCO"), which is the investment adviser to Standish
International Equity Fund, Standish International Fixed Income Fund and Standish
Global Fixed Income Portfolio which had net assets of $59 million, $804 million
and $138 million, respectively, at December 31, 1995.

<PAGE>

Corporate pension funds are the largest asset under active management by the
Adviser. The Adviser's clients also include charitable and educational endowment
funds, financial institutions, trusts and individual investors. As of December
31, 1995, the Adviser managed approximately $29 billion of assets.

The Portfolio's portfolio managers are Ralph S. Tate and David C.
Cameron. Mr. Tate and Mr. Cameron have been primarily responsible for the
day-to-day management of the Fund's portfolio since its inception in January,
1991 and of the Portfolio's portfolio since the Fund's conversion to the Hub and
Spoke master-feeder fund structure on March 29, 1996. Mr. Tate has served as a
Director and Vice President of the Adviser since April, 1990 and prior thereto
was a Vice President of Aetna Life and Casualty, Hartford, Connecticut. During
the past five years, Mr. Cameron has served as a Director (1990) and Vice
President of the Adviser.

Subject to the supervision and direction of the Trustees of the
Portfolio Trust, the Adviser manages the Portfolio in accordance with its stated
investment objective and policies, recommends investment decisions for the
Portfolio, places orders to purchase and sell securities on behalf of the
Portfolio, and permits the Portfolio to use the name "Standish." For its
services to the Portfolio, the Adviser receives a monthly fee equal on an annual
basis to 0.50% of the Portfolio's average daily net assets. For the Fund's
fiscal year ended December 31, 1995, advisory fees amounted to $557,342, which
represented 0.50% of the Fund's average net assets.

Administrator of the Fund

Standish also serves as administrator to the Fund (the "Administrator")
pursuant to an administration agreement. As Administrator, Standish manages the
affairs of the Fund, provides all necessary office space and services of
executive personnel for administering the affairs of the Fund, and allows the
Fund to use the name "Standish." For these services, Standish currently does not
receive any additional compensation. The Trustees of either the Trust may,
however, determine in the future to compensate Standish for its administrative
services.

<PAGE>

Expenses

The Portfolio and the Fund, as the case may be, will each be
responsible for all of its respective costs and expenses not expressly stated to
be payable by Standish under the investment advisory agreement with the
Portfolio or the administration agreement with the Fund. Among other expenses,
the Portfolio will pay investment advisory fees; bookkeeping, share pricing and
custodian fees and expenses; expenses of investor reports; and expenses of the
Portfolio's administrator. The Fund will pay shareholder servicing fees and
expenses; expenses of prospectuses, statements of additional information and
shareholder reports which are furnished to existing shareholders. Each of the
Fund and the Portfolio will pay legal and auditing fees; registration and
reporting fees and expenses; and Trustees' fees and expenses. The Trust's
principal Underwriter, Standish Fund Distributors, L.P., bears without
subsequent reimbursement the distribution expenses attributable to the offering
and sale of Fund shares. Expenses of the Trust or the Portfolio Trust which
relate to more than one of their respective series are allocated among such
series by the Adviser and SIMCO in an equitable manner, primarily on the basis
of relative net asset values. For the fiscal year ended December 31, 1995,
expenses borne by the Fund amounted to $745,243 which represented 0.67% of the
Fund's average daily net assets.

Standish has voluntarily agreed to limit the master-feeder aggregate
annual operating expenses (excluding brokerage commissions, taxes and
extraordinary expenses) of the Fund and the Portfolio to the Fund's ratio of
expenses to average net assets in effect immediately prior to the Fund's
conversion to the Hub and Spoke master-feeder fund structure. Standish may
discontinue or modify such limitation in the future at its discretion, although
it has no current intention to do so. In addition, Standish has agreed in the
administration agreement to limit the Fund's aggregate annual operating expenses
(excluding brokerage commissions, taxes and extraordinary expenses) to the
permissible limit applicable in any state in which shares of the Fund are then
qualified for sale. Standish has also agreed to limit the Portfolio's total
annual operating expenses (excluding brokerage commissions, taxes and
extraordinary expenses) to 0.80% of the Portfolio's average daily net assets. If
the expense limit is exceeded, the compensation due Standish for such fiscal
year shall be proportionately reduced by the amount of such excess by a
reduction or refund thereof at the time such compensation is payable after the
end of each calendar month, subject to readjustment during such fiscal year.

Portfolio Transactions

Subject to the supervision of the Trustees of the Portfolio

<PAGE>

Trust, the Adviser selects the brokers and dealers that execute orders to
purchase and sell portfolio securities for the Portfolio. The Adviser will
generally seek to obtain the best available price and most favorable execution
with respect to all transactions for the Portfolio.

Subject to the consideration of best price and execution and to
applicable regulations, the receipt of research and sales of Fund shares may
also be considered factors in the selection of brokers and dealers that execute
orders to purchase and sell portfolio securities for the Portfolio.

FEDERAL INCOME TAXES

The Fund presently qualifies and intends to continue to qualify for
taxation as a "regulated investment company" under the Internal Revenue Code of
1986, as amended (the "Code"). If it qualifies for treatment as a regulated
investment company, the Fund will not be subject to federal income tax on income
(including capital gains) distributed to shareholders in the form of dividends
or capital gain distributions in accordance with certain timing requirements of
the Code.

The Fund will be subject to nondeductible 4% excise tax under the Code
to the extent that it fails to meet certain distribution requirements with
respect to each calendar year. Certain distributions made in order to satisfy
the Code's distribution requirements may be declared by the Fund during October,
November or December of the year but paid during the following January. Such
distributions will be taxable to taxable shareholders as if received on December
31 of the year the distributions are declared, rather than the year in which the
distributions are received.

Shareholders which are taxable entities or persons will be subject to
federal income tax on dividends and capital gain distributions made by the Fund.
These dividends and distributions will be attributable to the Fund's allocable
share of the net income and net long-term and short-term capital gains of the
Portfolio and will also take into account any expenses incurred or income earned
directly by the Fund. Dividends paid by the Fund from net investment income,
certain net foreign currency gains, and any excess of net short-term capital
gain over net long-term capital loss will be taxable to shareholders as ordinary
income, whether received in cash or Fund shares. The portion of such dividends
attributable to the Fund's allocable share of qualifying dividends the Portfolio
receives, if any, may qualify for the 70% corporate dividends received
deduction, subject to certain holding period requirements and debt financing
limitations under the Code. Dividends paid by the Fund from net capital gain
(the excess of net long-term capital gain over net short-term capital loss),
called "capital gain distributions," will be taxable to shareholders as
long-term capital gains, whether received in cash or Fund shares and without
regard to how long the shareholder has

<PAGE>

held shares of the Fund. Capital gain distributions do not qualify for the
corporate dividends received deduction. Dividends and capital gain distributions
may also be subject to state and local or foreign taxes.

The Portfolio anticipates that it may be subject to foreign withholding
taxes or other foreign taxes on income (possibly including capital gains) on
certain foreign investments (if any), which will reduce the yield or return on
those investments. Such taxes may be reduced or eliminated pursuant to an income
tax treaty in some cases. The Fund anticipates that it generally will not
qualify to pass its allocable share of such foreign taxes and any associated tax
deductions or credits through to its shareholders.

Redemptions and repurchases of shares are taxable events on which a
shareholder may recognize a gain or loss. Special rules recharacterize as
long-term any losses on the sale or exchange of Fund shares with a tax holding
period of six months or less, to the extent the shareholder received a capital
gain distribution with respect to such shares.

Individuals and certain other classes of shareholders may be subject to
31% backup withholding of federal income tax on dividends, capital gain
distributions, and the proceeds of redemptions or repurchases of shares, if they
fail to furnish the Fund with their correct taxpayer identification number and
certain certifications or if they are otherwise subject to backup withholding.
Individuals, corporations and other shareholders that are not U.S. persons under
the Code are subject to different tax rules and may be subject to nonresident
alien withholding tax at the rate of 30% (or a lower rate provided by an
applicable tax treaty) on amounts treated as ordinary dividends from the Fund
and, unless a current IRS Form W-8 or an acceptable substitute is furnished to
the Fund, to backup withholding on certain payments from the Fund.

A state income (and possibly local income and/or intangible property)
tax exemption is generally available to the extent, if any, the Fund's
distributions are derived from interest on (or, in the case of intangibles
taxes, the value of its assets is attributable to) investments in certain U.S.
Government obligations, provided in some states that certain thresholds for
holdings of such obligations and/or reporting requirements are satisfied.
Shareholders should consult their tax advisers regarding the applicable
requirements in their particular states, including the effect, if any, of the
Fund's indirect ownership (through the Portfolio) of any such obligations.

After the close of each calendar year, the Fund will send a notice to
shareholders that provides information about the federal tax status of
distributions to shareholders for such calendar year.

<PAGE>

THE FUND AND THE PORTFOLIO

The Fund is a separate investment series of Standish, Ayer & Wood
Investment Trust, an unincorporated business trust organized under the laws of
The Commonwealth of Massachusetts pursuant to an Agreement and Declaration of
Trust dated August 13, 1986. Under the Agreement and Declaration of Trust, the
Trustees have authority to issue an unlimited number of shares of beneficial
interest, par value $.01 per share, of the Fund. Each share of the Fund is
entitled to one vote. All Fund shares have equal rights with regard to voting,
redemption, dividends, distributions and liquidation, and shareholders of the
Fund have the right to vote as a separate class with respect to certain matters
under the 1940 Act and the Agreement and Declaration of Trust. Shares of the
Fund do not have cumulative voting rights. Fractional shares have proportional
voting rights and participate in any distributions and dividends. When issued,
each Fund share will be fully paid and nonassessable. Shareholders of the Fund
do not have preemptive or conversion rights.

Certificates representing shares of the Fund will not be issued.

The Trust has established fourteen series that currently offer their
shares to the public and may establish additional series at any time. Each
series is a separate taxpayer, eligible to qualify as separate regulated
investment company for federal income tax purposes. The calculation of the net
asset value of a series and the determination of the tax consequences of
investing in a series will be determined separately for each series.

The Trust is not required to hold annual meetings of shareholders.
Special meetings of shareholders may be called from time to time for purposes
such as electing or removing Trustees, changing a fundamental policy, or
approving an investment advisory agreement.

<PAGE>

they wish to communicate with other shareholders with a view to obtaining
signatures to request a meeting, and such application is accompanied by a form
of communication and request which they wish to transmit, the Trustees shall
within five (5) business days after receipt of 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 Trust; 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 or form of
request.

The Portfolio, in which all the Investable Assets of the Fund are
invested, is a series of Standish, Ayer & Wood Master Portfolio, an open-end
management investment company. The Portfolio Trust's Declaration of Trust
provides that the Portfolio Trust may establish and designate separate series of
the Portfolio Trust. The Portfolio Trust has established four series and may
establish additional series at any time. The Portfolio Trust's Declaration of
Trust also provides that the Fund and other entities investing in the Portfolio
(e.g., other investment companies, insurance company separate accounts and
common and commingled trust funds) will each be liable for all obligations of
the Portfolio. However, the risk of the Fund incurring financial loss on account
of such liability is limited to circumstances in which both inadequate insurance
existed and the Portfolio itself was unable to meet its obligations.
Accordingly, the Trustees of the Trust believe that neither the Fund nor its
shareholders will be adversely affected by reason of the Fund's investing in the
Portfolio. The interests in the Portfolio Trust are divided into separate
series, such as the Portfolio. No series of the Portfolio Trust has any
preference over any other series.

Investors in other series of the Portfolio Trust will not be involved
in any vote involving only the Portfolio. Investors of all of the series of the
Portfolio Trust will, however, vote together to elect Trustees of the Portfolio
Trust and for certain other matters affecting the Portfolio Trust. As provided
by the 1940 Act, under certain circumstances, the shareholders of one or more
series could control the outcome of these votes.

Inquiries concerning the Fund should be made by contacting the Fund or
the Principal Underwriter at the address and telephone number listed on the
cover of this Prospectus.

PRINCIPAL UNDERWRITER

Standish Fund Distributors, L.P., One Financial Center, 26th
Floor, Boston, Massachusetts 02111, serves as the Trust's
principal underwriter.

CUSTODIAN, TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

Investors Bank & Trust Company, 24 Federal Street, Boston,

<PAGE>

Massachusetts 02110, serves as the Fund's transfer and dividend disbursing agent
and as custodian of all cash and securities of the Portfolio.

INDEPENDENT ACCOUNTANTS

Coopers & Lybrand L.L.P., One Post Office Square, Boston, Massachusetts
02109 and Coopers & Lybrand, P.O. Box 219, Grand Cayman, Cayman Islands, BWI,
serve as independent accountants for the Trust and the Portfolio Trust,
respectively, and will audit the Fund's and the Portfolio's respective financial
statements annually.

LEGAL COUNSEL

Hale and Dorr, 60 State Street, Boston, Massachusetts 02109, is legal
counsel to the Trust, the Portfolio Trust and to the Adviser.

No dealer, salesman or other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus or in the Statement of Additional Information, and, if given or made,
such other information or representations must not be relied upon as having been
authorized by the Trust. This Prospectus does not constitute an offering in any
jurisdiction in which such offering may not be lawfully made.

TAX CERTIFICATION INSTRUCTIONS

Federal law requires that taxable distributions and proceeds of
redemptions and exchanges be reported to the IRS and that 31% be withheld if you
fail to provide your correct Taxpayer Identification Number (TIN) and the
certifications contained in the Account Purchase Application (Application) or
you are otherwise subject to backup withholding. Amounts withheld and forwarded
to the IRS can be credited as a payment of tax when completing your Federal
income tax return.

For most individual taxpayers, the TIN is the social security number.
Special rules apply for certain accounts. For example, for an account
established under the Uniform Gift to Minors Act, the TIN of the minor should be
furnished. If you do not have a TIN, you may apply for one using forms available
at local offices of the Social Security Administration or the IRS, and you
should write "Applied For" in the space for a TIN on the Application.

<PAGE>

30% on certain distributions received from the Fund and must provide certain
certifications on IRS Form W-8 to avoid backup withholding with respect to other
payments. For further information, see IRC Sections 1441, 1442 and 3406 and/or
consult your tax adviser.

<PAGE>

STANDISH EQUITY FUND

Investment Adviser

Standish, Ayer & Wood, Inc.
One Financial Center
Boston, Massachusetts 02111

Custodian

Investors Bank & Trust Company
24 Federal Street
Boston, Massachusetts 02110

Principal Underwriter

Standish Fund Distributors, L.P.
One Financial Center
Boston, Massachusetts 02111

Independent Accountants

Coopers & Lybrand L.L.P.
One Post Office Square
Boston, Massachusetts 02109

Legal Counsel

Hale and Dorr
60 State Street
Boston, Massachusetts 02109

SAW0003F

33
<PAGE>

Prospectus dated March 29, 1996

PROSPECTUS
STANDISH FIXED INCOME FUND

One Financial Center
Boston, Massachusetts 02111
(800) 221-4795

Standish Fixed Income Fund (the "Fund") is one fund in the Standish,
Ayer & Wood family of funds. The Fund is organized as a separate diversified
investment series of Standish, Ayer & Wood Investment Trust (the "Trust"), an
open-end management investment company.

The Fund is designed primarily, but not exclusively, for tax-exempt
institutional investors, such as pension and profit-sharing plans, foundations
and endowments. The Fund's investment objective is primarily to achieve a high
level of current income, consistent with preserving principal and liquidity, and
secondarily to seek capital appreciation when market factors such as declining
interest rates indicate that capital appreciation may be available without
significant risk to principal. The Fund seeks to achieve its investment
objective by investing all its investable assets (the "Investable Assets") in
the Standish Fixed Income Portfolio (the "Portfolio") which has the same
investment objective as the Fund. The Portfolio is a series of Standish, Ayer &
Wood Master Portfolio (the "Portfolio Trust"), which is also an open-end
management investment company. The Portfolio will seek to achieve its investment
objective primarily through investing in a diversified portfolio of
investment-grade fixed-income securities with an average dollar-weighted
maturity of five to thirteen years. However, the Portfolio may invest up to 15%
of its net assets in securities which are classified by the rating agencies in
the highest category of non-investment grade securities, carry a high degree of
risk and are considered speculative by the rating agencies. See "Investment
Policies." Standish, Ayer & Wood, Inc. ("Standish"), Boston, Massachusetts, is
the Portfolio's investment adviser (the "Adviser").

<PAGE>

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.

<PAGE>

CONTENTS

Expense Information
Financial Highlights
Investment Objective and Policies
Risk Factors and Suitability
Special Information Concerning the Hub and Spoke Master-Feeder
Fund Structure
Calculation of Performance Data
Dividends and Distributions
Purchase of Shares
Exchange of Shares
Redemption of Shares
Management
Federal Income Taxes
The Fund and the Portfolio
Principal Underwriter
Custodian, Transfer Agent and Dividend-Disbursing Agent
Independent Accountants
Legal Counsel
Appendix A
Tax Certification Instructions

<PAGE>

EXPENSE INFORMATION

Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fees None

Annual Operating Expenses
Management Fees1 0.32%
12b-1 Fees None
Other Expenses (After Expense Limitation) 0.05%*
Total Operating Expenses * (After Expense Limitation) 0.37%*

Example 1 yr. 3 yrs. 5 yrs. 10 yrs.
- ------- ----- ------ ------ -------
<S> <C> <C> <C> <C>
You 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: $4 $12 $21 $47

You would pay the following
expenses on the same investment,

assuming no redemption: $4 $12 $21 $47

</TABLE>

The purpose of the above table is to assist the investor in

<PAGE>

understanding the various costs and expenses of the Fund and the Portfolio that
an investor in the Fund will bear directly or indirectly. The figure shown in
the caption "Other Expenses," which includes, among other things, custodian and
transfer agent fees, registration costs and payments for insurance and audit and
legal services, is based on the Fund's expenses for the fiscal year ended
December 31, 1995. The Trustees of the Trust believe that over time the
aggregate per share expenses of the Fund and the Portfolio will not be more than
the expenses which the Fund would incur if it were to retain the services of an
investment adviser and the Investable Assets of the Fund were invested directly
in the types of securities being held by the Portfolio.

* Standish has voluntarily agreed to limit the master-feeder aggregate annual
operating expenses of the Fund and the Portfolio (excluding brokerage
commissions, taxes and extraordinary expenses) to the Fund's ratio of expenses
to average net assets in effect immediately prior to the Fund's conversion to
the Hub and Spoke master-feeder fund structure. Standish may discontinue or
modify such limitation in the future at its discretion, although it has no
current intention to do so. In the absence of such agreement, Other Expenses,
the Total Operating Expenses of the Fund and the Portfolio are estimated to be
0.06% and 0.37%, respectively, of average daily net assets.

For more information with respect to the expenses of the Fund and the
Portfolio see "Management -- Investment Adviser" and "Management -- Expenses"
herein.

FINANCIAL HIGHLIGHTS

The financial highlights for the years ended December 31, 1993 , 1994
and 1995 have been audited by Coopers & Lybrand L.L.P., independent accountants,
whose report, together with the financial statements of the Fund, is
incorporated into the Statement of Additional Information.

Year Ended December 31,
-----------------------

1995 1994 1993 1992* 1991* 1990* 1989* 1988 1987*+
---- ---- ---- ----- ----- ----- ----- ---- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>

Net asset value - beginning of period $21.25 $20.55 $20.96 $19.56 $19.54 $18.84 $18.99 $20.00

Income from investment operations:
Net investment income $1.25 $1.50 $1.59 $1.68 $1.76 $1.81 $1.72 $1.17
Net realized and unrealized gain
(loss) on investments (2.29) 1.45 (0.18) 1.66 (0.05) 0.69 (0.13) 1.07
------ ---- ------ ---- ------ ---- ------ ----

Total from investment operations ($1.04) $2.95 $1.41 $3.34 $1.71 $2.50 $1.59 $0.10

Less distributions declared to shareholders:
From net investment income ($1.10) ($1.51) ($1.52) ($1.49) ($1.69) ($1.80) ($1.74) ($1.11)
In excess of net investment income -- (0.04) -- -- -- -- -- --
From realized gain (0.04) (0.70) (0.30) (0.45) -- -- -- --
Tax return of capital (0.16) -- -- -- -- -- -- --
---- ---- ---- ---- ---- ---- ---- ----

Total distributions declared
to shareholders ($1.30) ($2.25) ($1.82) ($1.94) ($1.69) ($1.80) ($1.74) ($1.11)
------- ------- ------- ------- ------- ------ ------ ------

Net asset value - end of period $18.91 $21.25 $20.55 $20.96 $19.56 $19.54 $18.84 $18.99
====== ====== ======= ===== ====== ====== ====== ======

Total return (4.86)% 14.64% 6.88% 17.65%9.23% 13.75% 8.53% 0.83% t

Ratios (to average net assets)
/Supplemental Data:
Expenses 0.38% 0.40% 0.41% 0.46% 0.49% 0.53% 0.54% 0.59% t

Net investment income 7.25% 7.07% 7.61% 8.28% 9.07% 9.26% 8.94% 8.16% t

Portfolio turnover 122% 150% 217% 176% 107% 106% 119% 73%

Net assets at end of period
(000 omitted) $1,642,933 $1,307,099 $919,909 $631,457 $397,267 $264,874 $198,836 $156,834

</TABLE>

t Computed on an annualized basis.
* Audited by other auditors.
+ For the period from March 27, 1987 (start of business) to December 31,
1987.

Further information about the performance of the Fund is contained in
the Fund's Annual Report, which may be obtained from

<PAGE>

the Principal Underwriter without charge.

INVESTMENT OBJECTIVE AND POLICIES

Investment Objective

Since the investment characteristics of the Fund will correspond
directly to those of the Portfolio, the following is a discussion of the various
investments and investment policies of the Portfolio.

The Portfolio's investment objective is primarily to achieve a high
level of current income, consistent with conserving principal and liquidity, and
secondarily to seek capital appreciation when changes in interest rates or other
economic conditions indicate that capital appreciation may be available without
significant risk to principal. Such capital appreciation may result from an
improvement in the credit standing of an issuer whose securities are held by the
Portfolio or from a decline in interest rates or from a combination of both
factors. The Portfolio will seek to achieve its investment objective primarily
through investing in a diversified portfolio of fixed-income securities,
generally of investment grade, with an average dollar-weighted maturity of five
to thirteen years. Because of the uncertainty inherent in all investments, no
assurance can be given that either the Fund or the Portfolio will achieve its
investment objective.

The investment objective of the Fund is a fundamental policy which may
not be changed without a vote of the Fund's shareholders. The investment
objective of the Portfolio is not a fundamental policy and may be changed upon
notice to but without the approval of the Portfolio's investors. Investment
policies which are not fundamental policies may be changed by the Trustees of
the Trust and the Trustees of the Portfolio Trust without the approval of the
Fund's shareholders or the Portfolio's investors. The Fund's and the Portfolio's
investment policies are described further in the Statement of Additional
Information.

Investment Policies

The Portfolio may invest in a broad range of fixed-income securities,
including bonds, notes, mortgage-backed and asset-backed securities, preferred
stock and convertible debt securities. The Portfolio may purchase securities
that pay interest on a fixed, variable, floating (including inverse floating),
contingent, in-kind or deferred basis. Under normal market conditions, at least
65% of the Portfolio's total assets will be invested in such securities. Because
the

<PAGE>

Portfolio is seeking a high level of current income, the possibility that it
will exercise the conversion options of any high yield convertible debt
securities it acquires is remote. Investors should be aware that investing in
mortgage-backed securities involves risks of fluctuation in yields and market
prices and of early prepayments on the underlying mortgages.

The Portfolio will normally invest in U.S. dollar denominated
securities, but may invest up to 20% of its total assets in securities
denominated in foreign currencies; provided, however, that at any particular
time, no more than 10% of the Portfolio's total assets will be invested in
foreign securities which are not subject to currency hedging transactions back
into U.S. dollars. See "Risk Factors and Suitability" for a description of the
risks associated with investments in foreign securities.

Although the Fund is intended primarily for tax-exempt institutional
investors and will be managed without regard to potential tax considerations,
the Portfolio may invest up to 10% of its total assets in tax-exempt securities,
such as state and municipal bonds, if the Adviser believes they will provide
competitive returns. The Fund's distributions of its allocable portion of the
interest the Portfolio earns from such securities will not be tax-exempt. The
Portfolio may adopt a temporary defensive position during adverse market
conditions by investing without limit in high quality money market instruments,
including short-term U.S. Government securities, negotiable certificates of
deposit, non-negotiable fixed time deposits, bankers' acceptances, floating-rate
notes and repurchase agreements.

The Portfolio will not have more than 25% of the current value of its
total assets invested in any single industry, provided that this restriction
shall not apply to U.S. Government securities, including mortgage pass-through
securities (GNMAs). Rather, the Portfolio will invest in a broad range of bond
market sectors, especially those deemed by the Adviser to be undervalued and
consequently underpriced and offering higher yields relative to the market as a
whole. Such sectors include mortgage pass-throughs, electric, telephone and gas
utilities, industrials, bank holding companies, Eurodollar bonds and original
issue discount bonds (i.e., bonds which are offered by an issuer at a discount
from their stated par value and which, because of uncertainty about their
quality, are potentially more volatile). In order to achieve its investment
objective, the Portfolio will seek to add value by selecting undervalued
investments, thus taking advantage of lower prices and higher yields, rather
than by varying the maturities of its portfolio investments to reflect interest
rate forecasts. Investments in bonds with maturities of five to fifteen years
will be emphasized, and it is expected that the average dollar-weighted maturity
of the Portfolio's portfolio will vary from five to thirteen years.

<PAGE>

Ratings

The Portfolio will generally invest in investment grade fixed-income
securities, i.e., securities which, at the date of investment, are rated within
the four highest grades as determined by Moody's Investors Service, Inc.
("Moody's") (Aaa, Aa, A or Baa) or by Standard & Poor's Ratings Group ("Standard
& Poor's") (AAA, AA, A or BBB) or their respective equivalent ratings or, if not
rated, judged by the Adviser to be of equivalent credit quality to securities so
rated. Securities rated Baa by Moody's or BBB by Standard & Poor's and unrated
securities of equivalent credit quality are considered medium grade obligations
with speculative characteristics. Adverse changes in economic conditions or
other circumstances are more likely to weaken the issuer's capacity to pay
interest and repay principal on these securities than is the case for issuers of
higher rated securities.

The Portfolio may invest up to 15% of its net assets in securities
rated either Ba by Moody's or BB by Standard & Poor's or, if not rated, are
judged by the Adviser to be of equivalent credit quality to securities so rated
("BB Rated Securities"). Securities rated Ba by Moody's or BB by Standard &
Poor's, are classified in the highest category of non-investment grade
securities. Such securities may be considered to be high-yield securities ("junk
bonds"), carry a high degree of risk and are considered speculative by the major
credit rating agencies. The Portfolio intends to avoid what it perceives to be
the most speculative areas of the BB Rated Securities universe. See "Risk
Factors and Suitability" for a description of the risks associated with
investments in BB Rated Securities.

It is anticipated that the average dollar-weighted rated credit quality
of the securities in the Portfolio's portfolio will be Aa or AA according to
Moody's and Standard & Poor's ratings, respectively, or of comparable credit
quality as determined by the Adviser. In the case of a security that is rated
differently by the two rating services, the higher rating is used in computing
the Portfolio's average dollar-weighted credit quality and in connection with
the Portfolio's policy regarding BB Rated Securities. In the event that the
rating on a security held in the Portfolio's portfolio is downgraded by a rating
service, such action will be considered by the Adviser in its evaluation of the
overall investment merits of that security, but will not necessarily result in
the sale of the security. In determining whether securities are of equivalent
credit quality, the Adviser may take into account, but will not rely entirely
on, ratings assigned by foreign rating agencies. In the case of unrated
sovereign, subnational and sovereign related debt of foreign countries, the
Adviser may take into account, but will not rely entirely on, the ratings
assigned to the issuers of such securities. Appendix A sets forth excerpts from
the descriptions of ratings of corporate debt securities and sovereign,
subnational and sovereign related debt of foreign countries.

<PAGE>

Mortgage-Backed Pass-Through Securities

Mortgage-backed "pass-through securities" are subject to regular
payments of principal and early prepayments of principal, which will affect the
Fund's current and total returns. While it is not possible to predict accurately
the life of a particular issue of mortgage-backed "pass-through securities" held
by the Portfolio, the actual life of any security is likely to be substantially
less than the original average maturity of the mortgage pool underlying the
security because unscheduled early prepayments of principal on the security
owned by the Portfolio will result from the prepayment, refinancing or
foreclosure of the underlying mortgage loans in the mortgage pool.
For example, mortgagors may speed up the rate at which they prepay their
mortgages while interest rates decline sufficiently to encourage refinancing.
The Portfolio, when the monthly payments (which may include unscheduled
prepayments) on a security are passed-through to it, may be able to reinvest
them only at a lower rate of interest. Because of the regular scheduled payments
of principal and the early unscheduled prepayments of principal, the
mortgage-backed "pass-through security" is less effective than other types of
obligations as a means of locking in attractive long-term interest rates. As a
result, this type of security may have less potential for capital appreciation
during periods of declining interest rates than other U.S. Government securities
of comparable maturities, although many issues of mortgage-backed "pass-through
securities" may have a comparable risk of decline in market value during periods
of rising interest rates. Although a security purchased at a premium above its
par value may carry a higher stated rate of return, both a scheduled payment of
principal, which will be made at par, and an unscheduled prepayment of principal
generally will decrease current and total returns and will accelerate the
recognition of income which, when distributed to Fund shareholders, will be
taxable as ordinary income.

Collateralized Mortgage Obligations (CMOs)

The issuer of a CMO effectively transforms a mortgage pool into
obligations comprised of several different maturities, thus creating mortgage
securities that appeal to short and intermediate term investors as well as the
more traditional long-term mortgage investor. CMOs are debt securities issued by
Federal Home Loan Mortgage Corporation, Federal National Mortgage Corporation
and by non-governmental financial institutions and other mortgage lenders and
are generally fully collateralized by a pool of mortgages held under an
indenture. CMOs are issued in a number of classes or series which have different
maturities and are generally retired in sequence. CMOs are designed to be
retired as the underlying mortgage loans in the mortgage pool are repaid. In the
event of sufficient early prepayments on such mortgages, the class or series of
CMO first to mature generally will be retired prior to its maturity. Thus the
early retirement of a particular class or series of a CMO held by the Portfolio
would affect the Fund's current and total returns in the manner indicated above.

<PAGE>

In making investments in CMOs, the Adviser will take into account the
following considerations: the total return on CMOs will vary with interest
rates, which cannot be predicted; the maturity of the CMOs is variable and is
not known at the time of purchase; prepayments on the CMOs will depend upon
prevailing interest rates and the CMOs may have a shorter life than expected;
and, because CMOs are relatively new securities and have not been in existence
through all market cycles, the risks of investing in CMOs are not fully known.

Strategic Transactions

The Portfolio may, but is not required to, utilize various other
investment strategies as described below to hedge various market risks (such as
interest rates, currency exchange rates, and broad or specific equity or
fixed-income market movements), to manage the effective maturity or duration of
fixed-income securities, or to enhance potential gain. Such strategies are
generally accepted as part of modern portfolio management and are regularly
utilized by many mutual funds and other institutional investors. Techniques and
instruments used by the Portfolio may change over time as new instruments and
strategies are developed or regulatory changes occur.

<PAGE>

calculating the Portfolio's net loss exposure from such Strategic Transactions,
an unrealized gain from a particular Strategic Transaction position would be
netted against an unrealized loss from a related Strategic Transaction position.
For example, if the Adviser anticipates that the Belgian franc will appreciate
relative to the French franc, the Portfolio may take a long forward currency
position in the Belgian franc and a short foreign currency position in the
French franc. Under such circumstances, any unrealized loss in the Belgian franc
position would be netted against any unrealized gain in the French franc
position (and vice versa) for purposes of calculating the Portfolio's net loss
exposure. The ability of the Portfolio to utilize these Strategic Transactions
successfully will depend on the Adviser's ability to predict pertinent market
movements, which cannot be assured. The Portfolio will comply with applicable
regulatory requirements when implementing these strategies, techniques and
instruments. The Portfolio's activities involving Strategic Transactions may be
limited to enable the Fund to comply with the requirements of Subchapter M of
the Internal Revenue Code of 1986, as amended (the "Code"), for qualification as
a regulated investment company.

Strategic Transactions have risks associated with them including
possible default by the other party to the transaction, illiquidity and, to the
extent the Adviser's view as to certain market movements is incorrect, the risk
that the use of such Strategic Transactions could result in losses greater than
if they had not been used. The writing of put and call options may result in
losses to the Portfolio, force the purchase or sale, respectively, of portfolio
securities at inopportune times or for prices higher than (in the case of
purchases due to the exercise of put options) or lower than (in the case of
sales due to the exercise of call options) current market values, limit the
amount of appreciation the Portfolio can realize on its investments or cause the
Portfolio to hold a security it might otherwise sell. The use of currency
transactions can result in the Portfolio incurring losses as a result of a
number of factors including the imposition of exchange controls, suspension of
settlements, or the inability to deliver or receive a specified currency. The
use of options and futures transactions entails certain other risks. In
particular, the variable degree of correlation between price movements of
futures contracts and price movements in the related portfolio position of the
Portfolio creates the possibility that losses on the hedging instrument may be
greater than gains in the value of the Portfolio's position. The writing of
options could significantly increase the Portfolio's portfolio turnover rate
and, therefore, associated brokerage commissions or spreads. In addition,
futures and options markets may not be liquid in all circumstances and certain
over-the-counter options may have no markets. As a result, in certain markets,
the Portfolio might not be able to close out a transaction without incurring
substantial losses, if at all. Although the use of futures and options
transactions for hedging should tend to minimize the risk of loss due to a

<PAGE>

decline in the value of the hedged position, at the same time, in certain
circumstances, these transactions tend to limit any potential gain which might
result from an increase in value of such position. The loss incurred by the
Portfolio in writing options on futures and entering into futures transactions
is potentially unlimited; however, as described above, the Portfolio will limit
its net loss exposure resulting from Strategic Transactions entered into for
non-hedging purposes to 3% of its net assets at any one time. Futures markets
are highly volatile and the use of futures may increase the volatility of the
Portfolio's net asset value. Finally, entering into futures contracts would
create a greater ongoing potential financial risk than would purchases of
options where the exposure is limited to the cost of the initial premium. Losses
resulting from the use of Strategic Transactions would reduce net asset value
and the net result may be less favorable than if the Strategic Transactions had
not been utilized. Further information concerning the Portfolio's Strategic
Transactions is set forth in the Statement of Additional Information.

When-Issued Securities and "Delayed Delivery" Securities
The Portfolio may commit up to 15% of its net assets to
purchase securities on a "when-issued" or "delayed delivery" basis. Although the
Portfolio would generally purchase securities on a when-issued or delayed
delivery basis with the intention of actually acquiring the securities, the
Portfolio may dispose of a when-issued or delayed delivery security prior to
settlement if the Adviser deems it appropriate to do so. The payment obligation
and the interest rate on these securities will be fixed at the time the
Portfolio enters into the commitment, but no income will accrue to the Portfolio
until they are delivered and paid for. Unless the Portfolio has entered into an
offsetting agreement to sell the securities, cash or liquid, high grade debt
securities equal to the amount of the Portfolio's commitment will be segregated
and maintained with the custodian for the Portfolio to secure the Portfolio's
obligation and to ensure that it is not leveraged. The market value of the
securities when they are delivered may be less than the amount paid by the
Portfolio.

Repurchase Agreements

The Portfolio may invest up to 5% of its net assets in repurchase
agreements under normal circumstances. Repurchase agreements acquired by the
Portfolio will always be fully collateralized as to principal and interest by
money market instruments and will be entered into only with commercial banks,
brokers and dealers considered creditworthy by the Adviser. If the other party
or "seller" of a repurchase agreement defaults, the Portfolio might suffer a
loss to the extent that the proceeds from the sale of the underlying securities
and other collateral held by the Portfolio in connection with the related
repurchase agreement are less than the repurchase price. In addition, in the
event of bankruptcy of the

<PAGE>

seller or failure of the seller to repurchase the securities as agreed, the
Portfolio could suffer losses, including loss of interest on or principal of the
security and costs associated with delay and enforcement of the repurchase
agreement.

Short-Selling

The Portfolio will incur a loss as a result of the short sale if the
price of the security increases between the date of the short sale and the date
on which the Portfolio replaces the borrowed security. The Portfolio will
realize a gain if the security declines in price between those dates by an
amount greater than premium and transaction costs. This result is the opposite
of what one would expect from a cash purchase of a long position in a security.
The amount of any gain will be decreased, and the amount of any loss increased,
by the amount of any premium or amounts in lieu of dividends or interest the
Portfolio may be required to pay in connection with a short sale.

<PAGE>

option. If the option is exercised by the Portfolio, the
premium and the commission paid may be more than the amount of the
brokerage commission charged if the security were to be purchased
directly. See "Strategic Transactions" above.

The Portfolio anticipates that the frequency of short sales will vary
substantially in different periods, and it does not intend that any specified
portion of its assets, as a matter of practice, will be in short sales. However,
no securities will be sold short if, after effect is given to any such short
sale, the total market value of all securities sold short would exceed 5% of the
value of the Portfolio's net assets.

Forward Roll Transactions

In order to enhance current income, the Portfolio may enter into
forward roll transactions with respect to mortgage-backed securities to the
extent of 10% of its net assets.
In a forward roll transaction, the Portfolio sells a mortgage-backed security
to a financial institution, such as a bank or broker-dealer, and simultaneously
agrees to repurchase a similar security from the institution at a later date at
an agreed-upon price. The mortgage-backed securities that are repurchased will
bear the same interest rate as those sold, but generally will be collateralized
by different pools of mortgages with different prepayment histories than those
sold. During the period between the sale and repurchase, the Portfolio will not
be entitled to receive interest and principal payments on the securities sold.
Proceeds of the sale will be invested in short-term instruments, such as
repurchase agreements or other short-term securities, and the income from these
investments, together with any additional fee income received on the sale and
the amount gained by repurchasing the securities in the future at a lower
purchase price, will generate income and gain for the Portfolio which is
intended to exceed the yield on the securities sold. Forward roll transactions
involve the risk that the market value of the securities sold by the Portfolio
may decline below the repurchase price of those securities. At the time the
Portfolio enters into a forward roll transaction, it will place in a segregated
custodial account cash or liquid, high quality debt obligations having a value
equal to the repurchase price (including accrued interest) and will subsequently
monitor the account to insure that the equivalent value is maintained.

Illiquid and Restricted Securities

The Portfolio may not invest more than 15% of its net assets in
illiquid investments and securities that are subject to

<PAGE>

restrictions on resale (i.e., private placements) under the Securities Act of
1933 (the "1993 Act"), including securities eligible for resale in reliance on
Rule 144A under the 1933 Act ("restricted securities"). Illiquid investments
include securities that are not readily marketable, repurchase agreements
maturing in more than seven days, time deposits with a notice or demand period
of more than seven days, certain over-the-counter options, and restricted
securities, unless it is determined, based upon continuing review of the trading
markets for the specific restricted security, that such restricted security is
eligible for resale under Rule 144A and is liquid. The Board of Trustees of the
Portfolio Trust has adopted guidelines and delegated to the Adviser the daily
function of determining and monitoring the liquidity of restricted securities.
The Board of Trustees, however, retains oversight focusing on factors such as
valuation, liquidity and availability of information and is ultimately
responsible for such determinations. Investing in restricted securities eligible
for resale pursuant to Rule 144A could have the effect of increasing the level
of illiquidity in the Portfolio to the extent that qualified institutional
buyers become for a time uninterested in purchasing these restricted securities.

The purchase price and subsequent valuation of restricted and illiquid
securities normally reflect a discount, which may be significant, from the
market price of comparable securities for which a liquid market exists.

Portfolio Turnover

Portfolio turnover is not expected to exceed 200% on an annual basis. A
rate of turnover of 100% would occur if the value of the lesser of purchases and
sales of portfolio securities for a particular year equaled the average monthly
value of portfolio securities owned during the year (excluding short-term
securities). A high rate of portfolio turnover (100% or more) involves a
correspondingly greater amount of brokerage commissions and other costs which
must be borne directly by the Portfolio and thus indirectly by the Fund and its
shareholders. It may also result in the realization of larger amounts of net
short-term capital gains, distributions from which are taxable to Fund
shareholders as ordinary income and may, under certain circumstances, make it
more difficult for the Fund to qualify as a regulated investment company under
the Code. The portfolio turnover rates are listed in the section captioned
"Financial Highlights."

Investment Restrictions

Each of the Fund and the Portfolio have adopted certain fundamental
policies which may not be changed without the approval of the Fund's
shareholders or the Portfolio's investors, as the case may be.

<PAGE>

References below to the Portfolio's investment restrictions also include the
Fund's investment restrictions. These policies provide, among other things, that
the Portfolio may not: (i) invest, with respect to at least 75% of its total
assets, more than 5% in the securities of any one issuer (other than the U.S.
Government, its agencies or instrumentalities) or acquire more than 10% of the
outstanding voting securities of any issuer; (ii) issue senior securities,
borrow money or securities or pledge or mortgage its assets, except that the
Portfolio may (a) borrow money from banks as a temporary measure for
extraordinary or emergency purposes (but not for investment purposes) in an
amount up to 15% of the current value of its total assets, (b) enter into
forward roll transactions, and (c) pledge its assets to an extent not greater
than 15% of the current value of its total assets to secure such borrowings;
however, the Portfolio may not make any additional investments while its
outstanding bank borrowings exceed 5% of the current value of its total assets;
or (iii) lend portfolio securities .

RISK FACTORS AND SUITABILITY

The Fund is designed primarily for tax-exempt institutional investors
such as pension or profit-sharing plans, foundations and endowments which seek
to maximize total return and whose beneficiaries are in a position to benefit
from the tax-deferred reinvestment of the quarterly income dividends and any
capital gains distributions paid by the Fund. The Fund may also be suitable for
other investors, depending upon their investment goals and financial and tax
positions. Although the price of the Fund's shares may fluctuate more than
short-term money market instruments, the Fund will seek to keep such volatility
below that of longer-term debt securities by limiting the average term of
securities in its portfolio. The Fund is not intended to provide an investment
program meeting all the requirements of an investor.
Additionally, notwithstanding the Portfolio's ability to diversify and spread
risk by holding securities of a number of portfolio companies, investors should
invest in the Fund only if they are able and prepared to bear the risk of
investment losses which may accompany the investments contemplated by the
Portfolio.

<PAGE>

generally subject to greater potential capital appreciation and depreciation.
The market prices of debt securities usually vary depending upon available
yields, rising when interest rates decline and declining when interest rates
rise.

Foreign Securities

Investing in securities of foreign issuers and securities denominated
in foreign currencies or utilizing foreign currency transactions involves
certain risks of political, economic and legal conditions and developments not
typically associated with investing in United States companies. Such conditions
or developments might include unfavorable changes in currency exchange rates,
exchange control regulations (including currency blockage), expropriation of
assets of companies in which the Portfolio invests, nationalization of such
companies, imposition of withholding taxes on dividend or interest payments, and
possible difficulty in obtaining and enforcing judgments against a foreign
issuer. Also, foreign securities may not be as liquid and may be more volatile
than comparable domestic securities. Furthermore, issuers of foreign securities
are subject to different, often less comprehensive, accounting, reporting and
disclosure requirements than domestic issuers. The Portfolio , in connection
with its purchases and sales of foreign securities, other than those denominated
in U.S. dollars, will incur transaction costs in converting currencies. Also,
brokerage costs in purchasing and selling corporate securities in foreign
securities markets are sometimes higher than such costs in comparable
transactions in domestic securities markets, and foreign custodial costs
relating to the Portfolio's portfolio securities are higher than domestic
custodial costs.

BB Rated Securities

Investing in BB Rated Securities involves a higher degree of credit
risk (the risk that the issuer will not make interest or principal payments when
due) than investing in higher rated securities. In the event of an unanticipated
default, the Portfolio will experience a reduction in its income, and could
expect a decline in the market value of the securities so affected. More careful
analysis of the financial condition of each issuer of BB Rated Securities is
therefore necessary. During an economic downturn or substantial period of rising
interest rates, highly leveraged issuers may experience financial stress which
would adversely affect their ability to service their principal and interest
payment obligations, to meet projected business goals and to obtain additional
financing. Periods of economic or political uncertainty and change can be
expected to result in volatility in prices of these securities.

BB Rated Securities generally offer a higher yield, but may be subject
to a higher risk of default in interest or principal payments than higher rated
securities. The market prices of BB Rated Securities are generally less
sensitive to interest rate changes than higher rated securities, but are
generally more sensitive to adverse economic or political changes or, in the
case

<PAGE>

of corporate issuers, to individual company developments. BB Rated Securities
also may have less liquid markets than higher rated securities, and their
liquidity, as well as their value, may be more severely affected by adverse
economic conditions. Adverse publicity and investor perceptions of the market,
as well as newly enacted or proposed legislation, may also have a negative
impact on the market for BB Rated Securities.

For the fiscal year ended December 31, 1995, the Fund's investments, on
a dollar weighted basis, calculated at the end of each month, had the following
credit quality characteristics:

Investments Percentage

U.S. Government Securities %
U.S. Government Agency Securities %

Bonds:

Aaa or AAA %
Aa or AA %
A or A %
Baa or BBB %
Ba or BB %
------

100%

Special Information Concerning the Hub and Spoke(R) Master-Feeder
Fund Structure1

Unlike other mutual funds which directly acquire and manage their own
portfolio securities, the Fund seeks to achieve its investment objective by
investing all of its Investable Assets in the Portfolio, which has the same
investment objective and restrictions as the Fund. The Portfolio in turn invests
primarily in securities consistent with that objective. Therefore, an investor's
interest in the Portfolio's securities is indirect, like investments in other
investment companies and pooled investment vehicles only more so. In addition to
selling a beneficial interest to the Fund, the Portfolio may sell beneficial
interests to other mutual funds or institutional investors. Such investors will
invest in the Portfolio on the same terms and conditions and will pay a
proportionate share of the Portfolio's expenses. However, the other investors
investing in the Portfolio are not required to sell their shares at the same
public offering price as the Fund due to the imposition of sales commissions and
variations in other operating expenses. Therefore, investors in the Fund should
be aware that these differences may result in differences in returns experienced
by investors in the different funds that invest in the Portfolio. Such
differences in returns are also present in other mutual fund structures.
Information concerning other holders of interests in the Portfolio is available
from the Adviser [( ) - ].

The Hub and Spoke master-feeder fund structure has been developed
relatively recently, so shareholders should carefully

- --------
1 Hub and Spoke(R) is a registered service mark of Signature Financial
Group, Inc.

<PAGE>

consider this investment approach.

Certain changes in the Portfolio's investment objectives, policies or
restrictions may require the Fund to withdraw its interest in the Portfolio. Any
such withdrawal could result in a distribution "in kind" of portfolio securities
(as opposed to a cash distribution from the Portfolio) to the extent permitted
by the Investment Company Act of 1940, as amended (the "1940 Act"), and the
rules thereunder. If securities are distributed, the Fund could incur brokerage,
tax or other charges in converting the securities to cash. In addition, the
distribution in kind may result in a less diversified portfolio of investments
or adversely affect the liquidity of the Fund. Notwithstanding the above, there
are other means for meeting redemption requests, such as borrowing.

<PAGE>

investors in the Portfolio. Shareholders of the Fund will receive 30 days prior
written notice with respect to any change in the investment objective of the
Portfolio. See "Investment Objective and Policies" for a description of the
fundamental policies of the Portfolio that cannot be changed without approval by
the "vote of a majority of the outstanding voting securities" (as defined in the
1940 Act) of the Portfolio.

CALCULATION OF PERFORMANCE DATA

From time to time the Fund may advertise its yield and total return.
Both yield and total return figures are based on historical earnings and are not
intended to indicate future performance. The "total return" of the Fund refers
to the average annual compounded rates of return over 1, 5 and 10 year periods
that would equate an initial amount invested at the beginning of a stated period
to the ending redeemable value of the investment. The calculation assumes the
reinvestment of all dividends and distributions, includes all recurring fees
that are charged to all shareholder accounts and deducts all nonrecurring
charges at the end of each period. If the Fund has been operating less than 1, 5
or 10 years, the time period during which the Fund has been operating is
substituted. The "yield" of the Fund is computed by dividing the net investment
income per share earned during the period stated in the advertisement by the
maximum offering price per share on the last day of the period (using the
average number of shares entitled to receive dividends). For the purpose of
determining net investment income, the calculation includes among expenses of
the Fund all recurring fees that are charged to all shareholder accounts and any
nonrecurring charges for the period stated. From time to time, the Fund may
compare its performance with that of other mutual funds with similar investment
objectives, to stock, bond and other relevant indices, and to performance
rankings prepared by recognized mutual fund statistical services. In addition,
the Fund's performance may be compared to alternative investment or savings
vehicles and/or to indexes or indicators of economic activity.

DIVIDENDS AND DISTRIBUTIONS

The Fund's dividends from net investment income will be declared and
distributed quarterly. The Fund's dividends from short-term and long-term
capital gains, if any, after reduction by capital losses, will be declared and
distributed at least annually. In determining the amounts of its dividends, the
Fund will take into account its

<PAGE>

share of the income, gains or losses, expenses, and any other tax items of the
Portfolio. Dividends from net investment income and capital gains distributions,
if any, are automatically reinvested in additional shares of the Fund unless the
shareholder elects to receive them in cash.

PURCHASE OF SHARES

Shares of the Fund may be purchased from the Principal Underwriter,
which offers Fund shares to the public on a continuous basis. Shares are sold at
the net asset value per share next computed after the purchase order is received
in good order by the Principal Underwriter and payment for the shares is
received by the Fund's custodian. Please see the Fund's account application or
call the Principal Underwriter for instructions on how to make payment of shares
to the Fund's custodian. Unless waived by the Fund, the minimum initial
investment is $100,000. Additional investments may be made in amounts of at
least $5,000.

Shares of the Fund may also be purchased through securities dealers.
Orders for the purchase of Fund shares received by dealers by the close of
regular trading on the New York Stock Exchange on any business day and
transmitted to the Principal Underwriter by the close of its business day
(normally 4:00 p.m., New York City time) will be effected as of the close of
regular trading on the New York Stock Exchange on that day, provided that
payment for the shares is also received by the Fund's custodian on that day.
Otherwise, orders will be effected at the net asset value per share determined
on the next business day. It is the responsibility of dealers to transmit orders
so they will be received by the Principal Underwriter before the close of its
business day. Shares of the Fund purchased through dealers may be subject to
transaction fees, no part of which will be received by the Fund, the Principal
Underwriter or the Adviser.

The Fund's net asset value per share is computed each day on which the
New York Stock Exchange is open as of the close of regular trading on the
exchange (currently 4:00 p.m., New York City time). The net asset value per
share is calculated by determining the value of all the Fund's assets (i.e., the
value of its investment in the Portfolio and other assets), subtracting all
liabilities and dividing the result by the total number of shares outstanding.
The Portfolio's portfolio securities are valued at the last sale prices, on the
valuation day, on the exchange or national securities market on which they are
primarily traded. Securities not listed on an exchange or national securities
market, or securities for which there were no reported transactions, are valued
at the last quoted bid prices. Securities for which quotations are not readily
available and all other assets are valued at fair value as determined in good
faith by the Adviser in accordance with procedures approved by the Trustees of
the Portfolio Trust. Money market instruments with less than sixty days
remaining to maturity when acquired by the

<PAGE>

Portfolio are valued on an amortized cost basis unless the Portfolio Trust's
Board of Trustees determines that amortized cost does not represent fair value.
If the Portfolio acquires a money market instrument with more than sixty days
remaining to its maturity, it is valued at current market value until the
sixtieth day prior to maturity and will then be valued at amortized cost based
upon the value on such date unless the Trustees of the Portfolio Trust determine
during such sixty-day period that amortized cost does not represent fair value.
Additional information concerning the Portfolio's valuation policies is
contained in the statement of Additional Information.

EXCHANGE OF SHARES

Shares of the Fund may be exchanged for shares of one or more other
funds in the Standish, Ayer & Wood family of funds. Shares of the Fund redeemed
in an exchange transaction are valued at their net asset value next determined
after the exchange request is received by the Trust. Shares of a fund purchased
in an exchange transaction are sold at their net asset value next determined
after the exchange request is received by the Trust and payment for the shares
is received by the fund into which your shares are to be exchanged. Until
receipt of the purchase price by the fund into which your shares are to be
exchanged (which may take up to three business days), your money will not be
invested. To obtain a current prospectus for any of the other funds in the
Standish, Ayer & Wood family of funds, please call the Principal Underwriter at
(800) 221-4795. Please consider the differences in investment objectives and
expenses of a fund as described in its prospectus before making an exchange.

<PAGE>

Written Exchanges

Telephonic Exchanges

General Exchange Information

All exchanges are subject to the following exchange restrictions: (i) the
fund into which shares are being exchanged must be registered for sale in your
state; (ii) exchanges may be made only between funds that are registered in the
same name, address and, if applicable, taxpayer identification number; and (iii)
unless waived by the Trust, the amount to be exchanged must satisfy the minimum
account size of the fund to be exchanged into. Exchange requests will not be
processed until payment for the shares of the current Fund have been received by
the Principal Underwriter. The exchange privilege may be changed or discontinued
and may be subject to additional limitations upon sixty (60) days' notice to
shareholders, including certain restrictions on purchases by market-timer
accounts.

REDEMPTION OF SHARES

Written Redemption

Shares of the Fund may be redeemed by written order to the Principal
Underwriter, One Financial Center, 26th Floor, Boston, Massachusetts 02111. A
written redemption request must (a) state the name of the Fund and the number of
shares or the dollar amount to be redeemed, (b)

<PAGE>

identify the shareholder's account number and (c) be signed by each registered
owner exactly as the shares are registered. Signature (s) must be guaranteed by
a member of either the Securities Transfer Association's STAMP program or the
New York Stock Exchange's Medallion Signature Program or by any one of the
following institutions, provided that such institution meets credit standards
established by Investors Bank & Trust Company, the Fund's transfer agent: (i) a
bank; (ii) a securities broker or dealer, including a government or municipal
securities broker or dealer, that is a member of a clearing corporation or has
net capital of at least $100,000; (iii) a credit union having authority to issue
signature guarantees; (iv) a savings and loan association, a building and loan
association, a cooperative bank, or a federal savings bank or association; or
(v) a national securities exchange, a registered securities exchange or a
clearing agency. Additional supporting documents may be required in the case of
estates, trusts, corporations, partnerships and other shareholders that are not
individuals. Redemption proceeds will normally be paid by check mailed within
three business days of receipt by the Principal Underwriter of a written
redemption request in proper form. If shares to be redeemed were recently
purchased by check, the Fund may delay transmittal of redemption proceeds until
such time as it has assured itself that good funds have been collected for the
purchase of such shares. This may take up to fifteen (15) days in the case of
payments made by check.

Telephonic Redemption

Shareholders who complete the telephonic privileges portion of the
Fund's account application may redeem shares by calling the Principal
Underwriter at (800) 221-4795. The telephonic redemption privilege is not
available to shareholders automatically; they must first elect the privilege.
Redemption proceeds will be mailed or wired in accordance with the shareholder's
instruction on the account application to a pre-designated account. Redemption
proceeds will normally be paid promptly after receipt of telephonic
instructions, but no later than three business days thereafter, except as
described above for shares purchased by check. Wire charges, if any, will be
deducted from redemption proceeds. Redemption proceeds will be sent only by
check payable to the shareholder of record at the address of record, unless the
shareholder has indicated, in the initial application for the purchase of shares
or subsequently in writing, a commercial bank to which redemption proceeds may
be sent by wire. These instructions may be changed subsequently only in writing,
accompanied by a signature guarantee, and additional documentation in the case
of shares held by a corporation or other entity or by a fiduciary such as a
trustee or executor.

<PAGE>

Proper identification will be required for each telephonic redemption.

Repurchase Order

In addition to written redemption of Fund shares, the Principal
Underwriter may accept telephone orders from brokers or dealers for the
repurchase of Fund shares or from the Adviser with respect to accounts over
which it has investment discretion. The repurchase price is the net asset value
per share next determined after receipt of the repurchase order by the Principal
Underwriter and payment of the shares by the Fund's custodian. Brokers and
dealers are obligated to transmit repurchase orders to the Principal Underwriter
promptly prior to the close of the Principal Underwriter's business day
(normally 4:00 p.m.). Brokers or dealers may charge for their services in
connection with a repurchase of Fund shares, but neither the Trust nor the
Principal Underwriter imposes a charge for share repurchases.

Telephone Transactions
By maintaining an account that is eligible for telephonic exchange and
redemption privileges, the shareholder authorizes the Adviser, the Principal
Underwriter, the Trust and the Fund's custodian to act upon instructions of any
person to redeem and/or exchange shares from the shareholder's account. Further,
the shareholder acknowledges that, as long as the Fund employs reasonable
procedures to confirm that telephonic instructions are genuine, and follows
telephonic instructions that it reasonably believes to be genuine, neither the
Adviser, nor the Principal Underwriter, nor the Trust, nor the Fund, nor the
Fund's custodian, nor their respective officers or employees, will be liable for
any loss, expense or cost arising out of any request for a telephonic redemption
or exchange, even if such transaction results from any fraudulent or
unauthorized instructions.

<PAGE>

Depending upon the circumstances, the Fund intends to employ personal
identification or written confirmation of transactions procedures, and if it
does not, the Fund may be liable for any losses due to unauthorized or
fraudulent instructions. All telephone transaction requests will be recorded.
Shareholders may experience delays in exercising telephone transaction
privileges during periods of abnormal market activity. Accordingly, during
periods of volatile economic and market conditions, shareholders may wish to
consider transmitting redemption and exchange requests in writing.

* * * *

Because of the cost of maintaining shareholder accounts, the Fund may
redeem, at net asset value, the shares in any account which has a value of less
than $50,000 as a result of redemptions or transfers. Before doing so, the Fund
will notify the shareholder that the value of the shares in the account is less
than the specified minimum and will allow the shareholder 30 days to make an
additional investment in an amount which will increase the value of the account
to at least $50,000. The Fund may eliminate duplicate mailings of Fund materials
to shareholders that have the same address of record.

MANAGEMENT

Trustees
The Fund is a separate investment series of Standish, Ayer & Wood
Investment Trust, a Massachusetts business trust. Under the terms of the
Agreement and Declaration of Trust establishing the Trust, which is governed by
the laws of The Commonwealth of Massachusetts, the Trustees of the Trust are
ultimately responsible for the management of its business and affairs.

A majority of the Trustees who are not "interested persons" (as defined
in the 1940 Act) of the Trust or the Portfolio Trust, as the case may be, have
adopted written procedures reasonably

<PAGE>

appropriate to deal with potential conflicts of interest arising from the fact
that the same individuals are trustees of the Trust and of the Portfolio Trust,
up to and including creating separate boards of trustees. See "Management" in
the Statement of Additional Information for more information about the Trustees
and officers of the Trust and the Portfolio Trust.

Investment Adviser

Standish, One Financial Center, Boston, Massachusetts 02111, serves as
investment adviser to the Portfolio pursuant to an investment advisory agreement
and manages the Portfolio's investments and affairs subject to the supervision
of the Trustees of the Portfolio Trust. The Adviser is a Massachusetts
corporation incorporated in 1933 and is a registered investment adviser under
the Investment Advisers Act of 1940.

The Adviser provides fully discretionary management services and
counseling and advisory services to a broad range of clients throughout the
United States. The Adviser also provides investment advisory services to certain
other funds within the Standish, Ayer & Wood family of funds, acting as
investment adviser to Standish Controlled Maturity Fund, Standish Small
Capitalization Equity Portfolio, Standish Equity Portfolio, Standish Fixed
Income Fund II, Standish Short-Term Asset Reserve Fund, Standish Intermediate
Tax Exempt Bond Fund, Standish Massachusetts Intermediate Tax Exempt Bond Fund
and Standish Securitized Fund, which had net assets of $8 million, $180 million,
$89 million, $8 million, $243 million, $33 million, $33 million and $55 million,
respectively, at December 31, 1995. The Adviser also serves as the investment
adviser to Standish Tax-Sensitive Equity Fund and Standish Small Cap
Tax-Sensitive Equity Fund, which commenced operations on January 2, 1996. The
Adviser is the managing general partner of Standish International Management
Company, L.P. ("SIMCO"), which is the investment adviser to Standish
International Equity Fund, Standish International Fixed Income Fund and Standish
Global Fixed Income Portfolio, which had net assets of $59 million, $804 million
and $138 million, respectively, at December 31, 1995. Corporate pension funds
are the largest asset under active management by the Adviser. The Adviser's
clients also include charitable and educational endowment funds, financial
institutions, trusts and individual investors. As of December 31, 1995, the
Adviser managed approximately $29 billion of assets.

The Portfolio's portfolio manager is Caleb F. Aldrich . Mr. Aldrich has
been primarily responsible for the day-to-day management of the Fund's portfolio
since January 1, 1993 and of the Portfolio's portfolio since the Fund's
conversion to the Hub and Spoke master-feeder fund structure on March 29, 1996.
During the past five years, Mr. Aldrich has served as a Director (1992) and Vice
President of the Adviser.

<PAGE>

Subject to the supervision and direction of the Trustees of the
Portfolio Trust, the Adviser manages the Portfolio in accordance with its stated
investment objective and policies, recommends investment decisions for the
Portfolio, places orders to purchase and sell securities on behalf of the
Portfolio and permits the Portfolio to use the name "Standish." For its services
to the Portfolio, the Adviser receives a monthly fee equal on an annual basis to
0.40% of the first $250 million of average daily net assets, 0.35% of the next
$250 million of average daily net assets and 0.30% of average daily net assets
in excess of $250 million. For the Fund's fiscal year ended December 31, 1995,
advisory fees amounted to 6,360,151, which represented 0.32% of the Fund's
average daily net assets.

Administrator of the Fund
Standish also serves as administrator to the Fund (the "Administrator")
pursuant to an administration agreement. As administrator, Standish manages the
affairs of the Fund, provides all necessary office space and services of
executive personnel for administering the affairs of the Fund, and allows the
Fund to use the name "Standish." For these services, Standish currently does not
receive any additional compensation. The Trustees of the Trust may, however,
determine in the future to compensate Standish for its administrative services.

Expenses

<PAGE>

underwriter, Standish Fund Distributors, L.P., bears without subsequent
reimbursement the distribution expenses attributable to the offering and sale of
Fund shares. Expenses of the Trust or the Portfolio Trust which relate to more
than one of their respective series are allocated among such series by the
Adviser and SIMCO in an equitable manner, primarily on the basis of relative net
asset values. For the fiscal year ended December 31, 1995, expenses borne by the
Fund amounted to $7,455,661, which represented 0.37% of the Fund's average daily
net assets.

Portfolio Transactions

Subject to the supervision of the Trustees of the Portfolio Trust, the
Adviser selects the brokers and dealers that execute orders to purchase and sell
portfolio securities for the Portfolio. The Adviser will generally seek to
obtain the best available price and most favorable execution with respect to all
transactions for the Portfolio.

FEDERAL INCOME TAXES

The Fund presently qualifies and intends to continue to qualify for
taxation as a "regulated investment company" under the Code. If it qualifies for
treatment as a regulated investment company, the Fund will not be subject to
federal income tax on income (including capital gains) distributed to
shareholders in the form of dividends or capital gain distributions in
accordance with certain timing requirements of the Code.

<PAGE>

October, November or December of the year but paid during the following January.
Such distributions will be taxable to taxable shareholders as if received on
December 31 of the year the distributions are declared, rather than the year in
which the distributions are received.

Shareholders which are taxable entities or persons will be subject to
federal income tax on dividends and capital gain distributions made by the Fund.
These dividends and distributions will be attributable to the Fund's allocable
share of the net income and net long-term and short-term capital gains of the
Portfolio and will also take into account any expenses incurred or income earned
directly by the Fund. Dividends paid by the Fund from net investment income,
certain net foreign currency gains, and any excess of net short-term capital
gain over net long-term capital loss will be taxable to shareholders as ordinary
income, whether received in cash or Fund shares. Only a small portion, if any,
of such dividends may qualify for the 70% corporate dividends received deduction
under the Code. Dividends paid by the Fund from net capital gain (the excess of
net long-term capital gain over net short-term capital loss), called "capital
gain distributions," will be taxable to shareholders as long-term capital gains,
whether received in cash or Fund shares and without regard to how long the
shareholder has held shares of the Fund. Capital gain distributions do not
qualify for the corporate dividends received deduction. Dividends and capital
gain distributions may also be subject to state and local or foreign taxes.

The Portfolio anticipates that it may be subject to foreign withholding
taxes or other foreign taxes on income (possibly including capital gains) on
certain foreign investments (if any), which will reduce the yield on those
investments. Such taxes may be reduced or eliminated pursuant to an income tax
treaty in some cases. The Fund does not expect to qualify to pass its allocable
share of such foreign taxes and any associated tax deductions or credits through
to its shareholders.

<PAGE>

the rate of 30% (or a lower rate provided by an applicable tax treaty) on
amounts treated as ordinary dividends from the Fund and, unless a current IRS
Form W-8 or an acceptable substitute is furnished to the Fund, to backup
withholding on certain payments from the Fund.

A state income (and possibly local income and/or intangible property)
tax exemption is generally available to the extent the Fund's distributions are
derived from interest on (or, in the case of intangibles taxes, the value of its
assets is attributable to) investments in certain U.S. Government obligations,
provided in some states that certain thresholds for holdings of such obligations
and/or reporting requirements are satisfied. Shareholders should consult their
tax advisers regarding the applicable requirements in their particular states,
including the effect, if any, of the Fund's indirect ownership (through the
Portfolio) of any such obligations.

After the close of each calendar year, the Fund will send a notice to
shareholders that provides information about the federal tax status of
distributions to shareholders for such calendar year.

THE FUND AND THE PORTFOLIO

Certificates representing shares of the Fund will not be issued.

The Trust has established fourteen series that currently offer their
shares to the public and may establish additional series at any time. Each
series is a separate taxpayer, eligible to qualify as a separate regulated
investment company for federal income tax purposes. The calculation of the net
asset value of a series and the determination of the tax

<PAGE>

consequences of investing in a series will be determined separately for
each series.

If less than two-thirds of the Trustees holding office have been
elected by shareholders, a special meeting of shareholders of the Trust will be
called to elect Trustees. Under the Agreement and Declaration of Trust and the
1940 Act, the record holders of not less than two-thirds of the outstanding
shares of the Trust may remove a Trustee by votes cast in person or by proxy at
a meeting called for the purpose or by a written declaration filed with each of
the Trust's custodian banks. Except as described above, the Trustees will
continue to hold office and may appoint successor Trustees. Whenever ten or more
shareholders of the Trust who have been such for at least six months, and who
hold in the aggregate shares having a net asset value of at least $25,000 or at
least 1% of the outstanding shares, whichever is less, apply to the Trustees in
writing stating that they wish to communicate with other shareholders with a
view to obtaining signatures to request a meeting, and such application is
accompanied by a form of communication and request which they wish to transmit,
the Trustees shall within five (5) business days after receipt of 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 Trust; 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 or form
of request.

<PAGE>

Trust has any preference over any other series.

Inquiries concerning the Fund should be made by contacting the Fund or
the Principal Underwriter at the Fund's address and telephone number listed on
the cover of this Prospectus.

PRINCIPAL UNDERWRITER

Standish Fund Distributors, L.P., One Financial Center, 26th Floor, Boston,
Massachusetts 02111, serves as the Trust's principal underwriter.

CUSTODIAN, TRANSFER AGENT AND
DIVIDEND-DISBURSING AGENT

Investors Bank & Trust Company, 24 Federal Street, Boston,
Massachusetts 02110, serves as the Fund's transfer agent and dividend-disbursing
agent and as custodian of all cash and securities of the Portfolio.

INDEPENDENT ACCOUNTANTS

LEGAL COUNSEL

Hale and Dorr, 60 State Street, Boston, Massachusetts 02109, is legal
counsel to the Trust, the Portfolio Trust and to the Adviser.

<PAGE>

APPENDIX A

KEY TO MOODY'S CORPORATE BOND RATINGS AND FOR SOVEREIGN,
SUBNATIONAL AND
SOVEREIGN RELATED ISSUES

Aaa - Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred
to as "gilt edge." 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 rated 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.

STANDARD & POOR'S RATINGS DEFINITIONS

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.

<PAGE>

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 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 - Debt rated BB is regarded, on balance, as predominantly speculative
with respect to capacity to pay interest and repay principal in
accordance with the terms of the obligation. While such debt will
likely have some quality and protective characteristics, these are
outweighed by large uncertainties or major risk exposures to adverse
conditions.

STANDARD & POOR'S CHARACTERISTICS OF
SOVEREIGN DEBT OF FOREIGN COUNTRIES

AAA - Stable, predictable governments with demonstrated track record of
responding flexibly to changing economic and political circumstances

Key players in the global trade and financial system:

- Prosperous and resilient economies, high per capita incomes

- Low fiscal deficits and government debt, low inflation

- Low external debt

AA - Stable, predictable governments with demonstrated track
record of responding to changing economic and political
circumstances

- Tightly integrated into global trade and financial system

- Differ from AAAs only to a small degree because:

- Economies are smaller, less prosperous and generally more vulnerable
to adverse external influences (e.g., protection and terms of trade
shocks)

- More variable fiscal deficits, government debt and inflation

- Moderate to high external debt.

A - Politics evolving toward more open, predictable forms of

<PAGE>

governance in environment of rapid economic and social change

- Established trend of integration into global trade and
financial system

- Economies are smaller, less prosperous and generally more vulnerable
to adverse external influences (e.g., protection and terms of trade
shocks), but

- Usually rapid growth in output and per capita incomes

- Manageable through variable fiscal deficits, government
debt and inflation

- Usually low but variable debt.

- Integration into global trade and financial system growing
but untested

- Low to moderate income developing economies but variable
performance and quite vulnerable to adverse external
influences

- Variable to high fiscal deficits, government debt and
inflation

- Very high and variable debt, often graduates of Brady plan but track
record not well established.

BBB -- Political factors a source of significant uncertainty, either
because system is in transition or due to external threats, or both,
often in environment of rapid economic and social change - Integration
into global trade and financial system growing but untested

- Economies less prosperous and often more vulnerable to
adverse external influences

- Variable to high fiscal deficits, government debt and
inflation

- High and variable external debt.

BB -- Political factors a source of major uncertainty, either because
system is in transition or due to external threats, or both, often in
environment of rapid economic and social change

- Integration into global trade and financial system growing
but untested

- Low to moderate income developing economies, but variable
performance and quite vulnerable to adverse external influences

<PAGE>

- Variable to high fiscal deficits, government debt and inflation

- Very high and variable debt, often graduates of Brady Plan
but track record not well established

BB - Political factors a source of major uncertainty, either because
system is in transition or due to external threats, or both, often in
environment of rapid economic and social change

In the case of sovereign, subnational and sovereign related issuers,
the Portfolio uses the foreign currency or domestic (local) currency rating
depending upon how a security in the portfolio is denominated. In the case where
the Portfolio holds a security denominated in a domestic (local) currency and
one of the rating services does not provide a domestic (local) currency rating
for the issuer, the Portfolio will use the foreign currency rating for the
issuer; in the case where the Portfolio holds a security denominated in a
foreign currency and one of the rating services does not provide a foreign
currency rating for the issuer, the Portfolio will treat the security as being
unrated.

TAX CERTIFICATION INSTRUCTIONS

Recipients exempt from backup withholding, including corporations and
certain other entities, should provide their TIN and underline "exempt" in
section 2(a) of the TIN section of the Application to avoid possible erroneous
withholding. Non-resident aliens and foreign entities may be subject to
withholding of up to 30% on certain distributions received from the Fund and
must provide certain certifications on IRS Form W-8 to avoid backup withholding
with respect to other payments. For further information, see IRC Sections 1441,
1442 and 3406 and/or consult your tax adviser.

<PAGE>

STANDISH FIXED INCOME FUND

Investment Adviser

Standish, Ayer & Wood, Inc.
One Financial Center
Boston, Massachusetts 02111

Custodian

Investors Bank & Trust Company
24 Federal Street
Boston, Massachusetts 02110

Principal Underwriter

Standish Fund Distributors, L.P.
One Financial Center
Boston, Massachusetts 02111

Independent Accountants

Coopers & Lybrand L.L.P.
One Post Office Square
Boston, Massachusetts 02109

Legal Counsel

Hale and Dorr
60 State Street
Boston, Massachusetts 02109

SAW0002F

<PAGE>

[INSERT - Global fixed income prospectus]

Prospectus dated March 29, 1996

PROSPECTUS
STANDISH SMALL CAPITALIZATION EQUITY FUND

One Financial Center
Boston, Massachusetts 02111
(800) 221-4795

Standish Small Capitalization Equity Fund (the "Fund") is one fund in
the Standish, Ayer & Wood family of funds. The Fund is organized as a separate
diversified investment series of Standish, Ayer & Wood Investment Trust (the
"Trust"), an open-end management investment company.

The Fund's investment objective is to achieve long-term growth of
capital through investment primarily in equity securities of small companies
which appear to be undervalued. The Fund seeks to achieve its investment
objective by investing all its investable assets (the "Investable Assets") in
the Standish Small Capitalization Equity Portfolio (the "Portfolio") which has
the same investment objective as the Fund. The Portfolio is a series of
Standish, Ayer & Wood Master Portfolio (the "Portfolio Trust"), which is also an
open-end management investment company. The Portfolio invests primarily in
publicly traded securities, including securities being issued in initial public
offerings. The Portfolio does not normally invest in equity securities which are
restricted as to disposition by federal securities laws or are otherwise
illiquid but may do so to a limited extent under certain circumstances. See
"Investment Policies." Standish, Ayer & Wood, Inc. ("Standish"), is the Fund's
investment adviser (the "Adviser").

UNLIKE OTHER MUTUAL FUNDS WHICH DIRECTLY ACQUIRE AND MANAGE THEIR OWN
PORTFOLIOS OF SECURITIES THE FUND SEEKS TO ACHIEVE ITS INVESTMENT OBJECTIVE BY
INVESTING ALL OF ITS INVESTABLE ASSETS IN THE PORTFOLIO WHICH IS A SEPARATE FUND
WITH AN IDENTICAL INVESTMENT OBJECTIVE. SEE "SPECIAL INFORMATION CONCERNING THE
HUB AND SPOKE MASTER-FEEDER FUND STRUCTURE" ON PAGE .

This Prospectus is intended to set forth concisely the information
about the Fund and the Trust that a prospective investor should know before
investing. Investors are encouraged to read this Prospectus and retain it for
future reference. Additional information about the Fund and the Trust is
contained in a Statement of Additional Information which has been filed with the
Securities and Exchange Commission and is available upon request and without
charge by calling or writing the Principal Underwriter at the telephone number
or address set forth above. The Statement of Additional Information bears the
same date as this Prospectus and is incorporated by reference into this
Prospectus.

<PAGE>

CONTENTS

Expense Information
Financial Highlights
Investment Objective and Policies
Risk Factors and Suitability
Special Information Concerning the Hub and Spoke Master-Feeder
Fund Structure
Calculations of Performance Data
Dividends and Distributions
Purchase of Shares
Exchange of Shares
Redemption of Shares
Management
Federal Income Taxes
The Fund and The Portfolio
Principal Underwriter
Custodian, Transfer Agent and Dividend-Disbursing Agent
Independent Accountants
Legal Counsel
Tax Certification Instructions

<PAGE>

EXPENSE INFORMATION

SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fees None
Exchange Fees None

ANNUAL OPERATING EXPENSES

Management Fees1 0.60%
12b-1 Fees None
Other Expenses (After Expense Limitation) 0.15%*
Total Operating Expenses (After Expense Limitation) 0.75%*

EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------- ------ ------- ------- --------
<S> <C> <C> <C> <C>

You 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: $8 $24 $42 $93

You would pay the
following expenses on the
same investment,

assuming no redemption: $8 $24 $42 $93

</TABLE>

<PAGE>

The purpose of the above table is to assist the investor in
understanding the various costs and expenses of the Fund and the Portfolio that
an investor in the Fund will bear directly or indirectly. The figure shown in
the caption "Other Expenses," which includes, among other things, custodian and
transfer agent fees, registration costs and payments for insurance and audit and
legal services, is based upon the Fund's expenses for the fiscal year ended
December 31, 1995. THE TRUSTEES OF THE TRUST BELIEVE THAT OVER TIME THE
AGGREGATE PER SHARE EXPENSES OF THE FUND AND THE PORTFOLIO WILL NOT BE MORE THAN
THE EXPENSES WHICH THE FUND WOULD INCUR IF IT WERE TO RETAIN THE SERVICES OF AN
INVESTMENT ADVISER AND THE INVESTABLE ASSETS OF THE FUND WERE INVESTED DIRECTLY
IN THE TYPES OF SECURITIES BEING HELD BY THE PORTFOLIO.

* Standish has voluntarily agreed to limit the master-feeder aggregate annual
operating expenses of the Fund and the Portfolio (excluding brokerage
commissions, taxes and extraordinary expenses) to the Fund's ratio of expenses
to average net assets in effect immediately prior to the Fund's conversion to
the Hub and Spoke master-feeder fund structure. Standish may discontinue or
modify such limitation in the future at its discretion, although it has no
current intention to do so. In the absence of such agreement, Other Expenses and
the Total Operating Expenses of the Fund and the Portfolio are estimated to be
0.19% and 0.79%, respectively, of average daily net assets.

For more information with respect to the expenses of the Fund and the
Portfolio see "Management-Investment Adviser" and "Management-Expenses" herein.

THE INFORMATION IN THE TABLE AND HYPOTHETICAL EXAMPLE SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY
BE GREATER OR LESS THAN THOSE SHOWN. MOREOVER, WHILE THE EXAMPLE ASSUMES A 5%
ANNUAL RETURN, THE FUND'S ACTUAL PERFORMANCE WILL VARY AND MAY RESULT IN AN
ACTUAL RETURN GREATER OR LESS THAN 5%.

FINANCIAL HIGHLIGHTS

<PAGE>

PER SHARE DATA (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD):
<TABLE>
<CAPTION>

YEAR ENDED DECEMBER 31,
1995 1994 1993 1992* 1991* 1990* +
<S> <C> <C> <C> <C> <C> <C>

Net asset value - beginning of period $48.97$ 39.83 $39.99 $27.57 $26.24

INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) -- (0.07) (0.11) ($0.04) $ 0.01
Net realized and unrealized gain
(loss) on investments ( 1.84) 11.3 14.00 17.87 1.33

Total from investment operations ($1.84) $11.24 $3.89 $17.83 $ 1.34

LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income -- -- -- -- ( 0.01)
From realized gain ( 4.98) (2.10) ( 4.05) ( 5.35) --
From paid-in capital -- -- -- ( 0.06) --
Total distributions declared
to shareholders ($4.98) ($2.10) ($4.05) ($5.41) ($0.01)

Net asset value -- end of period $42.15 $48.97 $39.83 $39.99 $27.57

TOTAL RETURN ( 3.66)% 28.21% 9.74% 64.71% 15.35%t

RATIOS (TO AVERAGE NET ASSETS)/
SUPPLEMENTAL DATA
Expenses $ 0.79% 0.88% 1.04% 0.87% 1.48%t
Net investment income (loss) ( 0.27)% ( 0.18)% (0.38)% ( 0.15)% 0.17%t

PORTFOLIO TURNOVER 130% 144% 101% 96% 13%

NET ASSETS AT END OF PERIOD (000 OMITTED) $107,591 85,141 50,950 35,418 13,273

</TABLE>

t Computed on an annualized basis.
* Audited by other auditors.
+For the period from January 2, 1991 (start of business) to
December 31, 1991.
# Unaudited

<PAGE>

Further information about the performance of the Fund is contained in
the Fund's Annual Report, which may be obtained from the Principal Underwriter
without charge.

INVESTMENT OBJECTIVE AND POLICIES

INVESTMENT OBJECTIVE

Since the investment characteristics of the Fund will correspond
directly to those of the Portfolio, the following is a discussion of the various
investments and investment policies of the Portfolio.

The Portfolio's investment objective is to achieve long-term growth of
capital through investment primarily in equity and equity-related securities of
small capitalization companies. Under normal circumstances, at least 80% of the
Portfolio's assets will be invested in such securities. Equity and
equity-related securities include common stocks, preferred stocks, securities
convertible into common stocks and options, futures and other strategic
transactions based on common stocks. The Portfolio invests in publicly traded
securities, including securities issued in initial public offerings. The
Portfolio does not normally invest in equity securities which are restricted as
to disposition by federal securities laws or are otherwise illiquid but may do
so to a limited extent under certain circumstances. As a temporary matter and
for defensive purposes, the Portfolio may purchase investment grade short-term
interest-bearing securities, the amount of which will depend on market
conditions and the needs of the Portfolio. Because of the uncertainty inherent
in all investments, no assurance can be given that either the Fund or the
Portfolio will achieve its investment objective.

The investment objective of the Fund is a fundamental policy which may not
be changed without a vote of the Fund's shareholders. The investment objective
of the Portfolio is not a fundamental policy and may be changed upon notice to
but without the approval of the Portfolio's investors. Investment policies which
are not fundamental policies may be changed by the Trustees of the Trust and the
Trustees of the Portfolio Trust without the approval of the Fund's shareholders
or the Portfolio's investors. The Fund's and the Portfolio's investment policies
are described further in the Statement of Additional Information.

INVESTMENT POLICIES

<PAGE>

The common stocks of small growth companies in which the Portfolio
invests have market capitalizations up to and including $700 million. Market
capitalization is determined by multiplying the number of fully diluted equity
shares by the current market price per share. Morningstar Mutual Funds, a
leading mutual fund monitoring service, includes in the small-cap category all
funds that invest in companies with median market capitalizations of less than
$1 billion. The Portfolio expects to emphasize investments in companies involved
with value added products or services in expanding industries. At times,
particularly when the Adviser believes that securities of small capitalization
companies are overvalued, the Portfolio's portfolio may include securities of
larger, more mature companies, provided that the value of the securities of such
larger, more mature companies shall not exceed 20% of the Portfolio's net
assets. As a temporary matter and for defensive purposes, the Portfolio may
invest all or a portion of its assets in short-term debt securities or cash
equivalents. The Portfolio will attempt to reduce risk by diversifying its
investments within the investment policy set forth above. The Portfolio will
invest in publicly traded equity securities and, excluding equity securities
received as distributions on portfolio securities, will not normally hold equity
securities which are restricted as to disposition under federal securities laws
or are otherwise illiquid or not readily marketable but may do so to a limited
extent under certain circumstances. The Portfolio may participate in initial
public offerings for previously privately held companies which are expected to
have market capitalizations of up to $700 million after the consummation of the
offering and whose securities are expected to be liquid after the offering. Such
companies may have a more limited operating history and/or less experienced
management than other companies in which the Portfolio invests, which may pose
additional risks. See "Risk Factors and Suitability."

FOREIGN SECURITIES

The Portfolio may invest up to 15% of its net assets in foreign equity
securities, including securities of foreign issuers that are listed on a United
States exchange or traded in the U.S. over-the-counter market and sponsored and
unsponsored American Depositary Receipts (ADRs). Securities of foreign issuers,
including emerging markets companies, will be selected for investment by the
Portfolio if the Adviser believes these securities will offer above average
capital growth potential. Investing in securities of foreign companies which are
generally denominated in foreign currencies and utilizing foreign currency
transactions involve certain risks of political, economic and legal conditions
and developments not typically associated with investing in United States
companies. Such conditions or developments might include favorable or
unfavorable changes in currency exchange rates, exchange control regulations

<PAGE>

(including currency blockage), civil disorder, expropriation of assets of
companies in which the Portfolio invests, nationalization of such companies,
imposition of withholding taxes on dividend or interest payments, and possible
difficulty in obtaining and enforcing judgments against a foreign issuer. Also,
foreign securities may not be as liquid as, and may be more volatile than,
comparable domestic securities. Furthermore, issuers of foreign securities are
subject to different, often less comprehensive, accounting, reporting and
disclosure requirements than domestic issuers. The Portfolio, in connection with
its purchases and sales of foreign securities, other than securities denominated
in United States dollars, will incur transaction costs in converting currencies.
Also, foreign custodial costs relating to the Portfolio's portfolio securities
are higher than domestic custodial costs. Fixed commissions on foreign stock
exchanges are generally higher than negotiated commissions on United States
exchanges. Finally, transactions in equity securities effected on some foreign
stock exchanges, and consequently the Portfolio's investments on such exchanges,
may not be settled promptly and therefore such investments may be less liquid
and subject to the risk of fluctuating currency exchange rates pending
settlement.

Investments by the Portfolio in securities of issuers in emerging
markets involves risks in addition to those discussed above. Many emerging
market countries have experienced substantial, and in some periods extremely
high, rates of inflation for many years. Inflation and rapid fluctuations in
inflation rates have had and may continue to have negative effects on the
economies and securities markets of certain emerging market countries. Moreover,
the economies of individual emerging market countries may differ favorably or
unfavorably from the U.S. economy in such respects as the rate of growth of
gross domestic product, the rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payments position.

SHORT TERM DEBT SECURITIES; MONEY MARKET INSTRUMENTS

The Portfolio may invest uncommitted cash and cash needed to maintain
liquidity for redemptions in short-term debt securities and cash equivalents,
including short-term U.S. Government securities (direct obligations of the U.S.
Government backed by the full faith and credit of the United States and
securities issued by agencies and instrumentalities of the U.S. Government),
U.S. and foreign commercial paper, negotiable certificates of deposit,
non-negotiable fixed time deposits, bankers' acceptances , repurchase agreements
and other money market securities and instruments.

When the Adviser deems it advisable because of market conditions, the
Portfolio may temporarily invest in short-term debt securities or retain cash or
cash equivalents without limit. Such investments will be limited to 20% of total
assets unless the Portfolio is in a temporary defensive

<PAGE>

position.

The Portfolio's investments in money market securities (i.e.,
securities with maturities of less than one year) will be limited to securities
which are rated P-1 by Moody's Investors Service, Inc. (Moody's) or A-1 by
Standard & Poor's Ratings Group ("Standard & Poor's"). The Portfolio will invest
at least 95% of its assets which are invested in short-term interest-bearing
securities (i.e., securities with maturities of one to three years) in
securities which are rated at the time of investment Aaa, Aa or A by Moody's or
AAA, AA, or A by Standard & Poor's, or which, if not rated, are of comparable
investment quality in the opinion of the Adviser. Up to 5% of assets invested in
such short-term securities may be invested in securities which are rated Baa by
Moody's or BBB by Standard & Poor's, or which, if not rated, are of comparable
investment quality in the opinion of the Adviser. In the case of a security
rated differently by the two rating services the higher rating is used in
applying the 5% limit.

In the event that the rating on a security held in the Portfolio's
portfolio is lowered by a rating service, such action will be considered by the
Adviser in its evaluation of the overall investment merits of that security, but
will not necessarily result in the sale of the security. Securities rated Baa by
Moody's and BBB by Standard & Poor's may have some speculative characteristics
and changes in economic conditions and other circumstances are more likely to
lead to weakened capacity to make principal and interest payments than is the
case with higher rated securities.

REPURCHASE AGREEMENTS

The Portfolio may invest up to 10% of its net assets in repurchase
agreements under normal circumstances. Repurchase agreements acquired by the
Portfolio will always be fully collateralized as to principal and interest by
money market instruments and will be entered into with commercial banks, brokers
and dealers considered creditworthy by the Adviser. If the other party or
"seller" of a repurchase agreement defaults, the Portfolio might suffer a loss
to the extent that the proceeds from the sale of the underlying securities and
other collateral held by the Portfolio in connection with the related repurchase
agreement are less than the repurchase price. In addition, in the event of
bankruptcy of the seller or failure of the seller to repurchase the securities
as agreed, the Portfolio could suffer losses, including loss of interest on or
principal of the security and costs associated with delay and enforcement of the
repurchase agreement.

STRATEGIC TRANSACTIONS

The Portfolio may, but is not required to, utilize various other
investment strategies as described below to hedge

<PAGE>

various market risks (such as interest rates, currency exchange rates, and broad
or specific equity market movements), or to enhance potential gain. Such
strategies are generally accepted as part of modern portfolio management and are
regularly utilized by many mutual funds and other institutional investors.
Techniques and instruments used by the Portfolio may change over time as new
instruments and strategies are developed or regulatory changes occur.

In the course of pursuing its investment objective, the Portfolio may
purchase and sell (write) exchange-listed and over-the-counter put and call
options on securities, equity indices and other financial instruments; purchase
and sell financial futures contracts and options thereon; enter into various
interest rate transactions such as swaps, caps, floors or collars; and enter
into various currency transactions such as currency forward contracts, currency
futures contracts, currency swaps or options on currencies or currency futures
(collectively, all the above are called "Strategic Transactions"). Strategic
Transactions may be used in an attempt to protect against possible changes in
the market value of securities held in or to be purchased for the Portfolio's
portfolio resulting from securities markets or currency exchange rate
fluctuations, to protect the Portfolio's unrealized gains in the value of its
portfolio securities, to facilitate the sale of such securities for investment
purposes, or to establish a position in the derivatives markets as a temporary
substitute for purchasing or selling particular securities. In addition to the
hedging transactions referred to in the preceding sentence, Strategic
Transactions may also be used to enhance potential gain in circumstances where
hedging is not involved although the Portfolio's net loss exposure resulting
from Strategic Transactions entered into for such purposes will not exceed 3% of
the Portfolio's net assets at any one time and, to the extent necessary, the
Portfolio will close out transactions in order to comply with this limitation.
(Transactions such as writing covered call options are considered to involve
hedging for the purposes of this limitation.) In calculating the Portfolio's net
loss exposure from such Strategic Transactions, an unrealized gain from a
particular Strategic Transaction position would be netted against an unrealized
loss from a related Strategic Transaction position. For example, if the Adviser
believes that the Portfolio is underweighted in cyclical stocks and overweighted
in consumer stocks, the Portfolio may buy a cyclical index call option and sell
a cyclical index put option and sell a consumer index call option and buy a
consumer index put option. Under such circumstances, any unrealized loss in the
cyclical position would be netted against any unrealized gain in the consumer
position (and vice versa) for purposes of calculating the Portfolio's net loss
exposure. The ability of the Portfolio to utilize these Strategic Transactions
successfully will depend on the Adviser's ability to predict pertinent market
movements, which cannot be assured. The Portfolio will comply with

<PAGE>

applicable regulatory requirements when implementing these strategies,
techniques and instruments. The Portfolio's activities involving Strategic
Transactions may be limited to enable the Fund to comply with the requirements
of Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"),
for qualification as a regulated investment company.

Strategic Transactions have risks associated with them including
possible default by the other party to the transaction, illiquidity and, to the
extent the Adviser's view as to certain market movements is incorrect, the risk
that the use of such Strategic Transactions could result in losses greater than
if they had not been used. The writing of put and call options may result in
losses to the Portfolio, force the purchase or sale, respectively, of portfolio
securities at inopportune times or for prices higher than (in the case of
purchases due to the exercise of put options) or lower than (in the case of
sales due to the exercise of call options) current market values, limit the
amount of appreciation the Portfolio can realize on its investments or cause the
Portfolio to hold a security it might otherwise sell. The use of currency
transactions can result in the Portfolio incurring losses as a result of a
number of factors including the imposition of exchange controls, suspension of
settlements, or the inability to deliver or receive a specified currency. The
use of options and futures transactions entails certain other risks. In
particular, the variable degree of correlation between price movements of
futures contracts and price movements in the related portfolio position of the
Portfolio creates the possibility that losses on the hedging instrument may be
greater than gains in the value of the Portfolio's position. The writing of
options could significantly increase the Portfolio's portfolio turnover rate
and, therefore, associated brokerage commissions or spreads.

In addition, futures and options markets may not be liquid in all
circumstances and certain over-the-counter options may have no markets. As a
result, in certain markets, the Portfolio might not be able to close out a
transaction without incurring substantial losses, if at all. Although the use of
futures and options transactions for hedging should tend to minimize the risk of
loss due to a decline in the value of the hedged position, at the same time, in
certain circumstances, these transactions tend to limit any potential gain which
might result from an increase in value of such position. The loss incurred by
the Portfolio in writing options on futures and entering into futures
transactions is potentially unlimited; however, as described above, the
Portfolio will limit its net loss exposure resulting from Strategic Transactions
entered into for non-hedging purposes to 3% of its net assets at any one time.
Futures markets are highly volatile and the use of futures may increase the
volatility of the Portfolio's net asset value. Finally, entering into futures
contracts would create a greater ongoing potential financial risk than would
purchases of options where the exposure is limited to the cost of the initial
premium. Losses resulting from the use of Strategic Transactions

<PAGE>

would reduce net asset value and the net result may be less favorable than if
the Strategic Transactions had not been utilized. Further information concerning
the Portfolio's Strategic Transactions is set forth in the Statement of
Additional Information.

SHORT-SELLING

The Portfolio will incur a loss as a result of the short sale if the
price of the security increases between the date of the short sale and the date
on which the Portfolio replaces the borrowed security. The Portfolio will
realize a gain if the security declines in price between those dates by an
amount greater than premium and transaction costs. This result is the opposite
of what one would expect from a cash purchase of a long position in a security.
The amount of any gain will be decreased, and the amount of any loss increased,
by the amount of any premium or amounts in lieu of dividends or interest the
Portfolio may be required to pay in connection with a short sale.

The Portfolio's loss on a short sale as a result of an increase in the
price of the security sold short is potentially unlimited. The Portfolio may
purchase call

<PAGE>

options to provide a hedge against an increase in the price of a security sold
short by the Portfolio. When the Portfolio purchases a call option it must pay a
premium to the person writing the option and a commission to the broker selling
the option. If the option is exercised by the Portfolio, the premium and the
commission paid may be more than the amount of the brokerage commission charged
if the security were to be purchased directly. See "Strategic Transactions"
above.

The Portfolio anticipates that the frequency of short sales will vary
substantially in different periods, and it does not intend that any specified
portion of its assets, as a matter of practice, will be in short sales. However,
no securities will be sold short if, after effect is given to any such short
sale, the total market value of all securities sold short would exceed 5% of the
value of the Portfolio's net assets.

OTHER INVESTMENT COMPANIES

The Portfolio may invest up to 10% of its total assets in the
securities of other investment companies but may not invest more than 5% of its
total assets in the securities of any one investment company or acquire more
than 3% of the voting securities of any other investment company. For example,
the Portfolio may invest in Standard & Poor's Depositary Receipts (commonly
referred to as "Spiders"), which are exchange-traded shares of a closed-end
investment company that are designed to replicate the price performance and
dividend yield of the Standard & Poor's 500 Composite Stock Price Index. The
Portfolio will indirectly bear its proportionate share of any management fees
and other expenses paid by investment companies in which it invests in addition
to the advisory and administration fees paid by the Portfolio. However, to the
extent that the Portfolio invests in a registered open-end investment company,
the Adviser will waive its advisory fees on the portion of the Portfolio's
assets so invested.

PORTFOLIO TURNOVER

<PAGE>

change its portfolio investments at any time in accordance with the Adviser's
appraisal of factors affecting any particular issuer or market, or the economy
in general. Portfolio turnover is not expected to exceed 150% on an annual
basis. A rate of turnover of 100% would occur, for example, if the value of the
lesser of purchases or sales of portfolio securities for a particular year
equaled the average monthly value of portfolio securities owned during the year
(excluding securities with a maturity date of one year or less at the date of
acquisition). A high rate of portfolio turnover involves a correspondingly
greater amount of transaction costs which must be borne directly by the
Portfolio and thus indirectly by the Fund and its shareholders. It may also
result in the realization of larger amounts of short-term capital gains, the
Fund's distribution from which are taxable to Fund shareholders as ordinary
income and may, under certain circumstances, make it more difficult for the Fund
to qualify as a regulated investment company under the Code. The portfolio
turnover rates are listed in the section captioned "Financial Highlights."

INVESTMENT RESTRICTIONS

Each of the Fund and the Portfolio have adopted certain fundamental
policies which may not be changed without the approval of the Fund's
shareholders or the Portfolio's investors, as the case may be.

The Fund has the same investment restrictions as the Portfolio, except
that the Fund may invest substantially all of its Investable Assets in an
open-end management investment company with substantially the same investment
objective as the Fund. Reference below to the Portfolio's investment
restrictions also include the Fund's investment restrictions. These policies
provide, among other things, that the Portfolio may not: (i) invest, with
respect to at least 75% of its total assets, more than 5% in the securities of
any one issuer (other than the U.S. Government, its agencies or
instrumentalities) or acquire more than 10% of the outstanding voting securities
of any issuer; (ii) issue senior securities, borrow money, enter into reverse
repurchase agreements or pledge or mortgage its assets, except that the
Portfolio may borrow from banks in an amount up to 15% of the current value of
its total assets as a temporary measure for extraordinary or emergency purposes
(but not investment purposes), and pledge its assets to an extent not greater
than 15% of the current value of its total assets to secure such borrowings;
however, the Portfolio may not make any additional investments while its
outstanding borrowings exceed 5% of the current value of its total assets; (iii)
make loans of portfolio securities ; or (iv) invest 25% or more of its total
assets in a single industry except that this restriction shall not apply to U.S.
Government securities

<PAGE>

RISK FACTORS AND SUITABILITY

The Fund is not intended to provide an investment program meeting all
of the requirements of an investor. The companies in which the Fund invests
generally reinvest their earnings, and dividend income should not be expected.
Additionally, notwithstanding the Portfolio's ability to diversify and spread
risk by holding securities of a number of portfolio companies, investors should
invest in the Fund only if they are able and prepared to bear the risk of
investment losses which may accompany the investments contemplated by the
Portfolio.

Although investments in small companies may present greater
opportunities for growth, they also involve greater risks than are customarily
associated with investments in established companies. The securities of smaller
companies may be subject to more volatile market movements than securities of
larger, more established companies. Smaller companies may have limited product
lines, markets or financial resources, and they may depend upon a limited or
less experienced management group. The securities of smaller companies may be
traded only on the over-the-counter market or on a regional securities exchange
and may not be traded daily or in the volume typical of trading on a national
securities exchange. As a result, the disposition by the Portfolio of portfolio
securities in order to meet redemptions or otherwise may require the Portfolio
to sell securities at a discount from market prices, over a longer period of
time or during periods when disposition is not desirable.

The Portfolio's investments in foreign securities and its utilization
of Strategic Transactions and short sales also involve special risks, as
discussed above in the correspondingly captioned sections.

SPECIAL INFORMATION CONCERNING THE HUB AND SPOKE(R) MASTER-FEEDER
FUND STRUCTURE1

- --------
1 Hub and Spoke(R) is a registered service mark of Signature Financial
Group, Inc.

<PAGE>

consistent with that objective. Therefore, an investor's interest in the
Portfolio's securities is indirect, like investments in other investment
companies and pooled investment vehicles only more so. In addition to selling a
beneficial interest to the Fund, the Portfolio may sell beneficial interests to
other mutual funds or institutional investors. Such investors will invest in the
Portfolio on the same terms and conditions and will pay a proportionate share of
the Portfolio's expenses. However, the other investors investing in the
Portfolio are not required to sell their shares at the same public offering
price as the Fund due to the imposition of sales commissions and variations in
other operating expenses. Therefore, investors in the Fund should be aware that
these differences may result in differences in returns experienced by investors
in the different funds that invest in the Portfolio. Such differences in returns
are also present in other mutual fund structures. Information concerning other
holders of interests in the Portfolio is available from the Adviser [( ) - ].

The Hub and Spoke master-feeder fund structure has been developed
relatively recently, so shareholders should carefully consider this investment
approach.

<PAGE>

Fund could incur brokerage, tax or other charges in converting the securities to
cash. In addition, the distribution in kind may result in a less diversified
portfolio of investments or adversely affect the liquidity of the Fund.
Notwithstanding the above, there are other means for meeting redemption
requests, such as borrowing.

CALCULATION OF PERFORMANCE DATA

From time to time the Fund may advertise its total return. Total return
figures are based on historical earnings and are not intended to indicate future
performance.

The "total return" of the Fund refers to the average annual compounded
rates of return over 1, 5 and 10 year periods that would equate an initial
amount invested at the beginning of a stated period to the ending redeemable
value of the investment. The calculation assumes the reinvestment of all
dividends and distributions, includes all recurring fees that are charged to all
shareholder accounts and deducts all nonrecurring charges at the end of each
period. If the Fund has been operating less than 1, 5 or 10 years, the time
period during which the Fund has been operating is substituted.

<PAGE>

DIVIDENDS AND DISTRIBUTIONS

The Fund's dividends from short-term and long-term capital gains, if
any, after reduction by capital losses, will be declared and distributed at
least annually, as will dividends from net investment income. In determining the
amounts of its dividends, the Fund will take into account its share of the
income, gains or losses, expenses, and any other tax items of the Portfolio.
Dividends from net investment income and capital gains distributions, if any,
are automatically reinvested in additional shares of the Fund unless the
shareholder elects to receive them in cash.

PURCHASE OF SHARES

Shares of the Fund may be purchased from the Principal Underwriter,
which offers Fund shares to the public on a continuous basis. Shares are sold at
the net asset value per share next computed after the purchase order is received
in good order by the Principal Underwriter and payment for the shares is
received by the Fund's custodian. Please see the Fund's account application or
call the Principal Underwriter for instructions on how to make payment of shares
to the Fund's custodian. Unless waived by the Fund, the minimum initial
investment is $100,000. Additional investments may be made in amounts of at
least $10,000.

Shares of the Fund may also be purchased through securities dealers.
Orders for the purchase of Fund shares received by dealers by the close of
regular trading on the New York Stock Exchange on any business day and
transmitted to the Principal Underwriter by the close of its business day
(normally 4:00 p.m., New York City time) will be effected as of the close of
regular trading on the New York Stock Exchange on that day, provided that
payment for the shares is also received by the Fund's custodian on that day.
Otherwise, orders will be effected at the net asset value per share determined
on the next business day. It is the responsibility of dealers to transmit orders
so that they will be received by the Principal Underwriter by the close of its
business day. Shares of the Fund purchased through dealers may be subject to
transaction fees, no part of which will be received by the Fund, the Principal
Underwriter or the Adviser.

<PAGE>

The Fund's net asset value per share is computed on each day on which
the New York Stock Exchange is open as of the close of regular trading
(currently 4:00 p.m., New York City time). The net asset value per share is
calculated by determining the value of all the Fund's assets (i.e., the value of
its investment in the Portfolio and other assets), subtracting all liabilities
and dividing the result by the total number of shares outstanding. The
Portfolio's portfolio securities are valued at the last sales prices, on the
valuation date, on the exchange or national securities market on which they are
primarily traded. Securities not listed on an exchange or national securities
market, or securities for which there are no reported transactions, are valued
at the last quoted bid prices. Securities for which quotations are not readily
available and all other assets will be valued at fair value as determined in
good faith by the Adviser in accordance with procedures approved by the Trustees
of the Portfolio Trust. Additional information concerning the Portfolio's
valuation policies is contained in the Statement of Additional Information.

In the sole discretion of the Trust, the Fund may accept securities
instead of cash for the purchase of shares of the Fund. The Trust will ask the
Adviser to determine that any securities acquired by the Fund in this manner are
consistent with the investment objective, policies and restrictions of the
Portfolio. The securities will be valued in the manner stated above. The
purchase of Fund shares for securities instead of cash may cause an investor who
contributes them to realize a taxable gain or loss with respect to the
securities transferred to the Fund.

EXCHANGE OF SHARES

<PAGE>

price by the fund into which your shares are to be exchanged (which may take up
to three business days), your money will not be invested. To obtain a current
prospectus for any of the other funds in the Standish, Ayer & Wood family of
funds, please call the Principal Underwriter at (800) 221-4795. Please consider
the differences in investment objectives and expenses of a fund as described in
its prospectus before making an exchange.

WRITTEN EXCHANGES

TELEPHONIC EXCHANGES

GENERAL EXCHANGE INFORMATION

All exchanges are subject to the following exchange restrictions: (i)
the fund into which shares are being exchanged must be registered for sale in
your state; (ii) exchanges may be made only between funds that are registered in
the same name, address and, if applicable, taxpayer identification number; and
(iii) unless waived by the Trust, the amount to be exchanged must satisfy the
minimum account size of the fund to be exchanged into. Exchange requests will
not be processed until payment for the shares of the current Fund have been
received by the Principal Underwriter. The exchange privilege may be changed or
discontinued and may be subject to additional limitations upon sixty (60) days'
notice to shareholders, including certain restrictions on purchases by
market-timer accounts.

REDEMPTION OF SHARES

<PAGE>

Purchase Application and payment for the shares to be redeemed have been
received.

<PAGE>

WRITTEN REDEMPTION

Shares of the Fund may be redeemed by written order to the Principal
Underwriter, One Financial Center, Boston, Massachusetts 02111. A written
redemption request must (a) state the name of the Fund and the number of shares
or the dollar amount to be redeemed, (b) identify the shareholder's account
number and (c) be signed by each registered owner exactly as the shares are
registered. Signature (s) must be guaranteed by a member of either the
Securities Transfer Association's STAMP program or the New York Stock Exchange's
Medallion Signature Program or by any one of the following institutions,
provided that such institution meets credit standards established by Investors
Bank and Trust Company, the Fund's transfer agent: (i) a bank; (ii) a securities
broker or dealer, including a government or municipal securities broker or
dealer, that is a member of a clearing corporation or has net capital of at
least $100,000; (iii) a credit union having authority to issue signature
guarantees; (iv) a savings and loan association, a building and loan
association, a cooperative bank, or a federal savings bank or association; or
(v) a national securities exchange, a registered securities exchange or a
clearing agency. Additional supporting documents may be required in the case of
estates, trusts, corporations, partnerships and other shareholders that are not
individuals. Redemption proceeds will normally be paid by check mailed within
three business days of receipt by the Principal Underwriter of a written
redemption request in proper form. If shares to be redeemed were recently
purchased by check, the Fund may delay transmittal of redemption proceeds until
such time as it has assured itself that good funds have been collected for the
purchase of such shares. This may take up to fifteen (15) days in the case of
payments made by check.

TELEPHONIC REDEMPTION

<PAGE>

Redemption proceeds will be sent only by check payable to the shareholder of
record at the address of record, unless the shareholder has indicated, in the
initial application for the purchase of shares or subsequently in writing, a
commercial bank to which redemption proceeds may be sent by wire. These
instructions may be changed subsequently only in writing, accompanied by a
signature guarantee, and additional documentation in the case of shares held by
a corporation or other entity or by a fiduciary such as a trustee or executor.
Proper identification will be required for each telephonic redemption.

REPURCHASE ORDER

In addition to written redemption of Principal Underwriter shares, the
Fund may accept telephone orders from brokers or dealers for the repurchase of
Fund shares, or from the Adviser with respect to accounts over which it has
investment discretion. The repurchase price is the net asset value per share
next determined after receipt of the repurchase order by the Principal
Underwriter and payment for the shares by the Fund's custodian's.
Brokers and dealers are obligated to transmit repurchase orders to the
Principal Underwriter prior to the close of the Principal Underwriter's business
day (normally 4:00 p.m.). Brokers or dealers may charge for their services in
connection with a repurchase of Fund shares, but neither the Trust nor the
Principal Underwriter imposes a charge for share repurchases.

TELEPHONE TRANSACTIONS

By maintaining an account that is eligible for telephonic exchange and
redemption privileges, the shareholder authorizes

<PAGE>

the Adviser, the Principal Underwriter, the Trust and the Fund's custodian to
act upon instructions of any person to redeem and/or exchange shares from the
shareholder's account. Further, the shareholder acknowledges that, as long as
the Fund employs reasonable procedures to confirm that telephonic instructions
are genuine, and follows telephonic instructions that it reasonably believes to
be genuine, neither the Adviser, nor the Principal Underwriter, nor the Trust,
nor the Fund, nor the Fund's custodian, nor their respective officers or
employees, will be liable for any loss, expense or cost arising out of any
request for a telephonic redemption or exchange, even if such transaction
results from any fraudulent or unauthorized instructions. Depending upon the
circumstances, the Fund intends to employ personal identification or written
confirmation of transactions procedures, and if it does not, the Fund may be
liable for any losses due to unauthorized or fraudulent instructions. All
telephone transaction requests will be recorded. Shareholders may experience
delays in exercising telephone transaction privileges during periods of abnormal
market activity. Accordingly, during periods of volatile economic and market
conditions, shareholders may wish to consider transmitting redemption and
exchange requests in writing.

* * * *

Because of the cost of maintaining shareholder accounts, the Fund may
redeem, at net asset value, the shares in any account which has a value of less
than $25,000 as a result of redemptions or transfers. Before doing so, the Fund
will notify the shareholder that the value of the shares in the account is less
than the specified minimum and will allow the shareholder 30 days to make an
additional investment in an amount which will increase the value of the account
to at least $25,000. The Fund may eliminate duplicate mailings of Fund materials
to shareholders that have the same address of record.

MANAGEMENT

TRUSTEES

The Fund is a separate investment series of Standish, Ayer & Wood
Investment Trust, a Massachusetts business trust. Under the terms of the
Agreement and Declaration of Trust establishing the

<PAGE>

Trust, which is governed by the laws of The Commonwealth of Massachusetts, the
Trustees of the Trust are ultimately responsible for the management of its
business and affairs.

INVESTMENT ADVISER

Standish, One Financial Center, Boston, Massachusetts 02111, serves as
investment adviser to the Portfolio pursuant to an investment advisory agreement
with the Trust and manages the Portfolio's investments and affairs subject to
the supervision of the Trustees of the Trust. The Adviser is a Massachusetts
corporation incorporated in 1933 and is a registered investment adviser under
the Investment Advisers Act of 1940.

The Adviser provides fully discretionary management services and
counseling and advisory services to a broad range of clients throughout the
United States. The Adviser also provides investment advisory services to certain
other funds within the Standish, Ayer & Wood family of funds, acting as
investment adviser to Standish Controlled Maturity Fund, Standish Equity
Portfolio, Standish Fixed Income Portfolio, Standish Fixed Income Portfolio II,
Standish Short-Term Asset Reserve Fund, Standish Intermediate Tax Exempt Bond
Fund, Standish Massachusetts Intermediate Tax Exempt Bond Fund and Standish
Securitized Fund, which had net assets of $8 million, $89 million, $2.3 billion,
$8 million, $243 million , $33 million, $33 million, and $55 million,
respectively, at December 31, 1995. The Adviser also serves as the investment
adviser to Standish Tax-Sensitive Equity Fund and Standish Small Cap
Tax-Sensitive Equity Fund, which commenced operations on January 2, 1996. An
affiliate of the Adviser, Standish International Management Company, L.P.
("SIMCO"), acts as investment adviser to Standish International Equity Fund,
Standish International Fixed Income Fund, and Standish Global Fixed Income
Portfolio, which had net assets of $59

<PAGE>

million, $804 million and $138 million at December 31, 1995. Corporate pension
funds are the largest asset under active management by the Adviser. The
Adviser's clients also include charitable and educational endowment funds,
financial institutions, trusts and individual investors. As of December 31,
1995, the Adviser managed approximately $29 billion of assets.

The Portfolio's portfolio manager is Nicholas S. Battelle. Mr. Battelle
has been primarily responsible for the day-to-day management of the Fund's
portfolio since its inception as a registered investment company in August, 1990
and of the Portfolio's portfolio since the Fund's conversion to the Hub and
Spoke master-feeder fund structure on March 29, 1996.

During the past five years, Mr. Battelle has served as a Director of the
Adviser.

Subject to the supervision and direction of the Trustees of the
Portfolio Trust, the Adviser manages the Portfolio in accordance with its stated
investment objective and policies, recommends investment decisions for the
Portfolio, places orders to purchase and sell securities on behalf of the
Portfolio and permits the Portfolio to use the name "Standish." For its services
to the Portfolio, the Adviser receives a monthly fee equal on an annual basis to
0.60% of the Portfolio's average daily net assets . For the fiscal year ended
December 31, 1995, advisory fees amounted to 877,243, which represented 0.60% of
the Fund's average daily net assets.

ADMINISTRATOR OF THE FUND

Standish also serves as administrator to the Fund (the "Administrator")
pursuant to an administration agreement. As Administrator, Standish manages the
affairs of the Fund, provides all necessary office space and services of
executive personnel for administering the affairs of the Fund, and allows the
Fund to use the name "Standish." For these services, Standish currently does not
receive any additional compensation. The Trustees of the Trust may, however,
determine in the future to compensate Standish for its administrative services.

<PAGE>

EXPENSES

The Portfolio and the Fund, as the case may be, will each be
responsible for all of its respective costs and expenses not expressly stated to
be payable by Standish under the investment advisory agreement with the
Portfolio or the administration agreement with the Fund. Among other expenses,
the Portfolio will pay investment advisory fees; bookkeeping, share pricing and
custodian fees and expenses; expenses of investor reports; and expenses of the
Portfolio's administrator. The Fund will pay shareholder servicing fees and
expenses; expenses of prospectuses, statements of additional information and
shareholder reports which are furnished to existing shareholders. Each of the
Fund and Portfolio will pay legal and auditing fees; registration and reporting
fees and expenses; and Trustees' fees and expenses. The Trust's Principal
Underwriter, Standish Fund Distributors, L.P., bears, without subsequent
reimbursement, the distribution expenses attributable to the offering and sale
of Fund shares. Expenses of the Trust or the Portfolio Trust which relate to
more than one of their respective series are allocated among such series by the
Adviser and SIMCO in an equitable manner, primarily on the basis of relative net
asset values. For the fiscal year ended December 31, 1995, expenses borne by the
Fund amounted to $1,100,300, which represented 0.75% of the Fund's average daily
net assets.

Standish has voluntarily agreed to limit the master-feeder aggregate
annual operating expenses (excluding brokerage commissions, taxes and
extraordinary expenses) of the Fund and Portfolio to the Fund's ratio of
expenses to average net assets in effect immediately prior to the Fund's
conversion to the Hub and Spoke master-feeder fund structure. Standish may
discontinue or modify such limitation in the future at its discretion, although
it has no current intention to do so. In addition, Standish has agreed in the
administration agreement to limit the Fund's aggregate annual operating expenses
(excluding brokerage commissions, taxes and extraordinary expenses) to the
permissible limit applicable in any state in which shares of the Fund are then
qualified for sale. Standish has also agreed in the advisory agreement to limit
the Portfolio's total annual operating expenses (excluding brokerage
commissions, taxes and extraordinary expenses) to 1.50% of the Portfolio's
average daily net assets. If the expense limit is exceeded, the compensation due
Standish for such fiscal year shall be proportionately reduced by the amount of
such excess by a reduction or refund thereof at the time such compensation is
payable after the end of each calendar month, subject to readjustment during
such fiscal year.

PORTFOLIO TRANSACTIONS

<PAGE>

Subject to the consideration of best price and execution and to
applicable regulations, the receipt of research and sales of Fund shares may
also be considered factors in the selection of brokers that execute orders to
purchase and sell portfolio securities for the Portfolio.

FEDERAL INCOME TAXES

<PAGE>

will be taxable to shareholders as long-term capital gains, whether received in
cash or Fund shares and without regard to how long the shareholder has held
shares of the Fund. Capital gain distributions do not qualify for the corporate
dividends received deduction. Dividends and capital gain distributions may also
be subject to state and local or foreign taxes.

The Portfolio anticipates that it may be subject to foreign withholding
taxes or other foreign taxes on income (possibly including capital gains) on
certain foreign investments (if any), which will reduce the yield on those
investments. Such taxes may be reduced or eliminated pursuant to an income tax
treaty in some cases. The Fund does not expect to qualify to pass its allocable
share of such foreign taxes and any associated tax deductions or credits through
to its shareholders.

After the close of each calendar year, the Fund will send a notice to
shareholders that provides information about the federal tax status of
distributions to shareholders for such calendar year.

<PAGE>

THE FUND AND THE PORTFOLIO

Certificates representing shares of the Fund will not be issued.

The Trust has established fourteen series that currently offer their
shares to the public and may establish additional series at any time. Each
series is a separate taxpayer, eligible to qualify as a separate regulated
investment company for federal income tax purposes. The calculation of the net
asset value of a series and the determination of the tax consequences of
investing in a series will be determined separately for each series.

If less than two-thirds of the Trustees holding office have been
elected by shareholders, a meeting of shareholders of the Trust will be called
to elect Trustees. Under the Agreement and Declaration of Trust and the 1940
Act, the record holders of not less than two-thirds of the outstanding shares of
the Trust may remove a Trustee by votes cast in person or by proxy at a meeting
called for the purpose or by a written declaration filed with each of the
Trust's custodian banks. Except as described above, the Trustees will continue
to hold office and may appoint successor Trustees. Whenever ten or more

<PAGE>

shareholders of the Trust who have been such for at least six months, and who
hold in the aggregate shares having a net asset value of at least $25,000 or at
least 1% of the outstanding shares, whichever is less, apply to the Trustees in
writing stating that they wish to communicate with other shareholders with a
view to obtaining signatures to request a meeting, and such application is
accompanied by a form of communication and request which they wish to transmit,
the Trustees shall within five (5) business days after receipt of 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 Trust; 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 or form
of request.

Inquiries concerning the Fund should be made by contacting the Fund or
the Principal Underwriter at the address and telephone number listed on the
cover of this Prospectus.

PRINCIPAL UNDERWRITER

Standish Fund Distributors, L.P., One Financial Center, 26th Floor, Boston,
Massachusetts 02111, serves as the Trust's principal underwriter.

<PAGE>

CUSTODIAN, TRANSFER AGENT AND
DIVIDEND-DISBURSING AGENT

Investors Bank & Trust Company, 24 Federal Street, Boston, Massachusetts
02110, serves as the Fund's transfer and dividend-disbursing agent and as
custodian of all cash and securities of the Portfolio.

INDEPENDENT ACCOUNTANTS

Coopers & Lybrand L.L.P., One Post Office Square, Boston, Massachusetts
02109 and Coopers & Lybrand, P.O. Box 219, Grand Cayman, Grand Cayman Islands,
BWI, serve as independent accountants for the Trust and the Portfolio Trust,
respectively, and will audit the Fund's and the Portfolio's respective financial
statements annually.

LEGAL COUNSEL

Hale and Dorr, 60 State Street, Boston, Massachusetts 02109, is legal
counsel to the Trust, the Portfolio Trust and to the Adviser.

NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS OR IN THE STATEMENT OF ADDITIONAL INFORMATION, AND, IF GIVEN OR MADE,
SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE TRUST. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY
JURISDICTION IN WHICH SUCH OFFERING MAY NOT BE LAWFULLY MADE.

TAX CERTIFICATION INSTRUCTIONS

<PAGE>

STANDISH SMALL CAPITALIZATION EQUITY FUND

INVESTMENT ADVISER

Standish, Ayer & Wood, Inc.
One Financial Center
Boston, Massachusetts 02111

CUSTODIAN

Investors Bank & Trust Company
24 Federal Street
Boston, Massachusetts 02110

PRINCIPAL UNDERWRITER

Standish Fund Distributors, L.P.
One Financial Center
Boston, Massachusetts 02111

INDEPENDENT ACCOUNTANTS

Coopers & Lybrand L.L.P.
One Post Office Square
Boston, Massachusetts 02109

LEGAL COUNSEL

Hale and Dorr
60 State Street
Boston, Massachusetts 02109

SAW0004E

<PAGE>

MARCH 1, 1996
SAW0007E

STANDISH EQUITY FUND
ONE FINANCIAL CENTER
BOSTON, MASSACHUSETTS 02111
(800) 221-4795

STATEMENT OF ADDITIONAL INFORMATION

This Statement of Additional Information is not a prospectus, but
expands upon and supplements the information contained in the Prospectus dated
March 1, 1996, as amended and/or supplemented from time to time (the
"Prospectus") of Standish Equity Fund (the "Fund"), a separate investment series
of Standish, Ayer & Wood Investment Trust (the "Trust"). This Statement of
Additional Information should be read in conjunction with the Fund's Prospectus
a copy of which may be obtained without charge by writing or calling the Trust's
principal underwriter, Standish Fund Distributors, L.P. (the "Principal
Underwriter"), at the address and phone number set forth above.

THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS
AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR
ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.

CONTENT
PAGE
Investment Objective and Policies 1
Investment Restrictions 1
Calculation of Performance Data 1
Management 1
Redemption of Shares 1
Portfolio Transactions 1
Determination of Net Asset Value 1
The Fund and Its Shares 1
The Portfolio and Its Investors 1
Taxation 1
Additional Information 1
Experts and Financial Statements 1
Financial Statements 1

<PAGE>

INVESTMENT OBJECTIVE AND POLICIES

As described in the Prospectus, the Fund seeks to achieve
its investment objective by investing all its investable assets

<PAGE>

in the Standish Equity Portfolio (the "Portfolio"), a series of Standish, Ayer &
Wood Master Portfolio (the "Portfolio Trust"), an open-end management investment
company. The Portfolio has the same investment objective and restrictions as the
Fund.

The Fund's Prospectus describes the investment objective of the Fund
and the Portfolio and summarizes the investment policies they will follow. Since
the investment characteristics of the Fund will correspond directly to those of
the Portfolio, the following, which supplements the Prospectus, is a discussion
of the various investment techniques employed by the Portfolio. See the
Prospectus for a more complete description of the Fund's and the Portfolio's
investment objective, policies and restrictions.

INVESTMENT OBJECTIVE

The Portfolio's investment objective is to achieve long-term growth of
capital through investment primarily in equity securities of companies which
appear to be undervalued. Under normal circumstances, at least 80% of the
Portfolio's assets will be invested in such securities. The Portfolio may invest
in equity securities of foreign issuers that are listed on a United States
exchange or traded in the U.S. over-the-counter market, but will not invest more
than 10% of its assets in such securities which are not so listed or traded. In
addition, the Portfolio may engage in certain strategic transactions as
discussed below. Although the Portfolio normally does not invest in securities
which are restricted as to disposition by federal securities laws or are
otherwise illiquid, the Portfolio may so invest up to 15% of its net assets. The
Portfolio purchases short-term interest-bearing securities with uninvested
funds, the amount of which will depend upon market conditions and the needs of
the Portfolio.

SUITABILITY AND RISK FACTORS

The Fund is not intended to provide an investment program meeting all
of the requirements of an investor. The companies in which the Portfolio invests
generally reinvest their earnings, and dividend income should not be expected.
Additionally, notwithstanding the Portfolio's ability to spread risk by holding
securities of a number of portfolio companies, shareholders should be able and
prepared to bear the risk of investment losses which may accompany the
investments contemplated by the Portfolio.

FOREIGN SECURITIES

Foreign securities may be purchased and sold in over-the-counter
markets (but persons affiliated with the Portfolio will not act as principal in
such purchases and sales)

<PAGE>

or on stock exchanges located in the countries in which the respective principal
offices of the issuers of the various securities are located, if that is the
best available market. Foreign stock markets are generally not as developed or
efficient as those in the United States. While growing in volume, they usually
have substantially less volume than the New York Stock Exchange, and securities
of some foreign companies are less liquid and more volatile than securities of
comparable United States companies. Fixed commissions on foreign stock exchanges
are generally higher than negotiated commissions on United States exchanges,
although the Portfolio will endeavor to achieve the most favorable net results
on its portfolio transactions. There is generally less government supervision
and regulation of stock exchanges, brokers and listed companies abroad than in
the United States.

The dividends and interest payable on certain of the Portfolio's
foreign portfolio securities may be subject to foreign withholding taxes and in
some cases capital gains from such securities may also be subject to foreign
tax, thus reducing the net amount of income or gain available for distribution
to the Fund's shareholders.

Investors should understand that the expense ratio of the Portfolio may
be higher than that of investment companies investing exclusively in domestic
securities because of the cost of maintaining the custody of foreign securities.

STRATEGIC TRANSACTIONS

<PAGE>

portfolio resulting from securities market or currency exchange rate
fluctuations, to protect the Portfolio's unrealized gains in the value of its
portfolio securities, to facilitate the sale of such securities for investment
purposes, or to establish a position in the derivatives markets as a temporary
substitute for purchasing or selling particular securities. In addition to the
hedging transactions referred to in the preceding sentence, Strategic
Transactions may also be used to enhance potential gain in circumstances where
hedging is not involved although the Portfolio's net loss exposure resulting
from Strategic Transactions entered into for such purposes will not exceed 3% of
the Portfolio's net assets at any one time and, to the extent necessary, the
Portfolio will close out transactions in order to comply with this limitation.
(Transactions such as writing covered call options are considered to involve
hedging for the purposes of this limitation.) In calculating the Portfolio's net
loss exposure from such Strategic Transactions, an unrealized gain from a
particular Strategic Transaction position would be netted against an unrealized
loss from a related Strategic Transaction position. For example, if Standish,
Ayer & Wood, Inc. ("Standish" or the "Adviser") believes that the Portfolio is
underweighted in cyclical stocks and overweighted in consumer stocks, the
Portfolio may buy a cyclical index call option and sell a cyclical index put
option and sell a consumer index call option and buy a consumer index put
option. Under such circumstances, any unrealized loss in the cyclical position
would be netted against any unrealized gain in the consumer position (and vice
versa) for purposes of calculating the Portfolio's net loss exposure. The
ability of the Portfolio to utilize these Strategic Transactions successfully
will depend on the Adviser's ability to predict pertinent market movements,
which cannot be assured. The Portfolio will comply with applicable regulatory
requirements when implementing these strategies, techniques and instruments. The
Portfolio's activities involving Strategic Transactions may be limited in order
to enable the Fund to comply with the requirements of Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code") for qualification as a
regulated investment company.

RISKS OF STRATEGIC TRANSACTIONS

<PAGE>

amount of appreciation the Portfolio can realize on its investments or cause the
Portfolio to hold a security it might otherwise sell. The use of currency
transactions can result in the Portfolio incurring losses as a result of a
number of factors including the imposition of exchange controls, suspension of
settlements, or the inability to deliver or receive a specified currency. The
use of options and futures transactions entails certain other risks. In
particular, the variable degree of correlation between price movements of
futures contracts and price movements in the related portfolio position of the
Portfolio creates the possibility that losses on the hedging instrument may be
greater than gains in the value of the Portfolio's position. The writing of
options could significantly increase the Portfolio's portfolio turnover rate
and, therefore, associated brokerage commissions or spreads.
In addition, futures and options markets may not be liquid in all circumstances
and certain over-the-counter options may have no markets. As a result, in
certain markets, the Portfolio might not be able to close out a transaction
without incurring substantial losses, if at all. Although the use of futures and
options transactions for hedging should tend to minimize the risk of loss due to
a decline in the value of the hedged position, at the same time, in certain
circumstances, they tend to limit any potential gain which might result from an
increase in value of such position. The loss incurred by the Portfolio in
writing options on futures and entering into futures transactions is potentially
unlimited; however, as described above, the Portfolio will limit its net loss
exposure resulting from Strategic Transactions entered into for non-hedging
purposes to 3% of its net assets at any one time. Futures markets are highly
volatile and the use of futures may increase the volatility of the Fund's net
asset value. Finally, entering into futures contracts would create a greater
ongoing potential financial risk than would purchases of options where the
exposure is limited to the cost of the initial premium. Losses resulting from
the use of Strategic Transactions would reduce net asset value and the net
result may be less favorable than if the Strategic Transactions had not been
utilized.

GENERAL CHARACTERISTICS OF OPTIONS

Put options and call options typically have similar structural
characteristics and operational mechanics regardless of the underlying
instrument on which they are purchased or sold.

Thus, the following general discussion relates to each of the particular types
of options discussed in greater detail below. In addition, many Strategic
Transactions involving options require segregation of the Portfolio's assets in
special accounts, as described below under "Use of Segregated Accounts."

A put option gives the purchaser of the option, in consideration for
the payment of a premium, the right to sell, and the writer the obligation to
buy (if the option is

<PAGE>

exercised), the underlying security, commodity, index, currency or other
instrument at the exercise price. For instance, the Portfolio's purchase of a
put option on a security might be designed to protect its holdings in the
underlying instrument (or, in some cases, a similar instrument) against a
substantial decline in the market value by giving the Portfolio the right to
sell such instrument at the option exercise price. A call option, in
consideration for the payment of a premium, gives the purchaser of the option
the right to buy, and the seller the obligation to sell (if the option is
exercised), the underlying instrument at the exercise price. The Portfolio may
purchase a call option on a security, futures contract, index, currency or other
instrument to seek to protect the Portfolio against an increase in the price of
the underlying instrument that it intends to purchase in the future by fixing
the price at which it may purchase such instrument. An American style put or
call option may be exercised at any time during the option period while a
European style put or call option may be exercised only upon expiration or
during a fixed period prior thereto. The Portfolio is authorized to purchase and
sell exchange listed options and over-the-counter options ( "OTC options").
Exchange listed options are issued by a regulated intermediary such as the
Options Clearing Corporation ( "OCC"), which guarantees the performance of the
obligations of the parties to such options. The discussion below uses the OCC as
an example, but is also applicable to other financial intermediaries.

With certain exceptions, exchange listed options generally settle by
physical delivery of the underlying security or currency, although in the future
cash settlement may become available. Index options and Eurodollar instruments
are cash settled for the net amount, if any, by which the option is "in
- -the-money" (i.e., where the value of the underlying instrument exceeds, in the
case of a call option, or is less than, in the case of a put option, the
exercise price of the option) at the time the option is exercised. Frequently,
rather than taking or making delivery of the underlying instrument through the
process of exercising the option, listed options are closed by entering into
offsetting purchase or sale transactions that do not result in ownership of the
new option.

The Portfolio's ability to close out its position as a purchaser or
seller of an exchange listed put or call option is dependent, in part, upon the
liquidity of the option market. There is no assurance that a liquid option
market on an exchange will exist. In the event that the relevant market for an
option on an exchange ceases to exist, outstanding options on that exchange
would generally continue to be exercisable in accordance with their terms.

The hours of trading for listed options may not coincide with the hours
during which the underlying financial instruments are traded. To the extent that
the option markets close before

<PAGE>

the markets for the underlying financial instruments, significant price and rate
movements can take place in the underlying markets that cannot be reflected in
the option markets.

OTC options are purchased from or sold to securities dealers, financial
institutions or other parties ( "Counterparties") through direct bilateral
agreement with the Counterparty. In contrast to exchange listed options, which
generally have standardized terms and performance mechanics, all the terms of an
OTC option, including such terms as method of settlement, term, exercise price,
premium, guarantees and security, are set by negotiation of the parties. The
Portfolio will generally sell (write) OTC options (other than OTC currency
options) that are subject to a buy-back provision permitting the Portfolio to
require the Counterparty to sell the option back to the Portfolio at a formula
price within seven days. (To the extent that the Portfolio does not do so, the
OTC options are subject to the Portfolio's restriction on illiquid securities.)
The Portfolio expects generally to enter into OTC options that have cash
settlement provisions, although it is not required to do so.

Unless the parties provide for it, there is no central clearing or
guaranty function in an OTC option. As a result, if the Counterparty fails to
make delivery of the security, currency or other instrument underlying an OTC
option it has entered into with the Portfolio or fails to make a cash settlement
payment due in accordance with the terms of that option, the Portfolio will lose
any premium it paid for the option as well as any anticipated benefit of the
transaction. Accordingly, the Adviser must assess the creditworthiness of each
such Counterparty or any guarantor or credit enhancement of the Counterparty's
credit to determine the likelihood that the terms of the OTC option will be
satisfied. The Portfolio will engage in OTC option transactions only with U.S.
Government securities dealers recognized by the Federal Reserve Bank of New York
as "primary dealers", or broker dealers, domestic or foreign banks or other
financial institutions which have received, combined with any credit
enhancements, a long-term debt rating of A from Standard & Poor's Ratings Group
("S&P") or Moody's Investors Service, Inc. ("Moody's") or an equivalent rating
from any other nationally recognized statistical rating organization ( "NRSRO")
or which issue debt that is determined to be of equivalent credit quality by the
Adviser. The staff of the Securities and Exchange Commission ("SEC") currently
takes the position that, absent the buy-back provisions discussed above, OTC
options purchased by the Portfolio, and portfolio securities "covering" the
amount of the Portfolio's obligation pursuant to an OTC option sold by it (the
cost of the sell-back plus the in-the-money amount, if any) are illiquid, and
are subject to the Portfolio's limitation on investing in illiquid securities.
However, for options written with "primary dealers" in U.S. Government
securities

<PAGE>

pursuant to an agreement requiring a closing purchase transaction at a formula
price, the amount which is considered to be illiquid may be calculated by
reference to a formula price.

If the Portfolio sells (writes) a call option, the premium that it
receives may serve as a partial hedge, to the extent of the option premium,
against a decrease in the value of the underlying securities or instruments in
its portfolio or will increase the Portfolio's income. The sale (writing) of put
options can also provide income.

The Portfolio may purchase and sell (write) call options on securities,
equity securities (including convertible securities) and Eurodollar instruments
that are traded on U.S. and foreign securities exchanges and in the
over-the-counter markets, and on securities indices, currencies and futures
contracts. All calls sold by the Portfolio must be "covered" (i.e., the
Portfolio must own the securities or futures contract subject to the call) or
must meet the asset segregation requirements described below as long as the call
is outstanding. Even though the Portfolio will receive the option premium to
help offset any loss, the Portfolio may incur a loss if the exercise price is
below the market price for the security subject to the call at the time of
exercise. A call sold by the Portfolio also exposes the Portfolio during the
term of the option to possible loss of opportunity to realize appreciation in
the market price of the underlying security or instrument and may require the
Portfolio to hold a security or instrument which it might otherwise have sold.

The Portfolio may purchase and sell (write) put options on securities
including equity securities (including convertible securities) and Eurodollar
instruments (whether or not it holds the above securities in its portfolio), and
on securities indices, currencies and futures contracts. The Portfolio will not
sell put options if, as a result, more than 50% of the Portfolio's assets would
be required to be segregated to cover its potential obligations under such put
options other than those with respect to futures and options thereon. In selling
put options, there is a risk that the Portfolio may be required to buy the
underlying security at a price above the market price.

OPTIONS ON SECURITIES INDICES AND OTHER FINANCIAL INDICES

<PAGE>

exceeds, in the case of a call, or is less than, in the case of a put, the
exercise price of the option (except if, in the case of an OTC option, physical
delivery is specified). This amount of cash is equal to the differential between
the closing price of the index and the exercise price of the option, which also
may be multiplied by a formula value. The seller of the option is obligated, in
return for the premium received, to make delivery of this amount upon exercise
of the option. In addition to the methods described above, the Portfolio may
cover call options on a securities index by owning securities whose price
changes are expected to be similar to those of the underlying index, or by
having an absolute and immediate right to acquire such securities without
additional cash consideration (or for additional cash consideration held in a
segregated account by its custodian) upon conversion or exchange of other
securities in its portfolio.

GENERAL CHARACTERISTICS OF FUTURES

The Portfolio may enter into financial futures contracts or purchase or
sell put and call options on such futures. Futures are generally bought and sold
on the commodities exchanges where they are listed and involve payment of
initial and variation margin as described below. The sale of futures contracts
creates a firm obligation by the Portfolio , as seller, to deliver to the buyer
the specific type of financial instrument called for in the contract at a
specific future time for a specified price (or, with respect to index futures
and Eurodollar instruments, the net cash amount). The purchase of futures
contracts creates a corresponding obligation by the Portfolio, as purchaser to
purchase a financial instrument at a specific time and price. Options on futures
contracts are similar to options on securities except that an option on a
futures contract gives the purchaser the right in return for the premium paid to
assume a position in a futures contract and obligates the seller to deliver such
position upon exercise of the option.

<PAGE>

Portfolio to deposit with its custodian for the benefit of a futures commission
merchant as security for its obligations an amount of cash or other specified
assets (initial margin) which initially is typically 1% to 10% of the face
amount of the contract (but may be higher in some circumstances). Additional
cash or assets (variation margin) may be required to be deposited directly with
the futures commission merchant thereafter on a daily basis as the value of the
contract fluctuates. The purchase of an option on financial futures involves
payment of a premium for the option without any further obligation on the part
of the Portfolio. If the Portfolio exercises an option on a futures contract it
will be obligated to post initial margin (and potential subsequent variation
margin) for the resulting futures position just as it would for any position.
Futures contracts and options thereon are generally settled by entering into an
offsetting transaction but there can be no assurance that the position can be
offset prior to settlement at an advantageous price, nor that delivery will
occur. The segregation requirements with respect to futures contracts and
options thereon are described below.

CURRENCY TRANSACTIONS

The Portfolio may engage in currency transactions with Counterparties
in order to hedge the value of portfolio holdings denominated in particular
currencies against fluctuations in relative value or to enhance potential gain.
Currency transactions include currency contracts, exchange listed currency
futures, exchange listed and OTC options on currencies, and currency swaps. A
forward currency contract involves a privately negotiated obligation to purchase
or sell (with delivery generally required) a specific currency at a future date,
which may be any fixed number of days from the date of the contract agreed upon
by the parties, at a price set at the time of the contract. A currency swap is
an agreement to exchange cash flows based on the notional (agreed-upon)
difference among two or more currencies and operates similarly to an interest
rate swap, which is described below. A Portfolio may enter into over-the-counter
currency transactions with Counterparties which have received, combined with any
credit enhancements, a long term debt rating of A by S&P or Moody's,
respectively, or that have an equivalent rating from a NRSRO or (except for OTC
currency options) whose obligations are determined to be of equivalent credit
quality by the Adviser.

The Portfolio's dealings in forward currency contracts and other
currency transactions such as futures, options, options on futures and swaps
will generally be limited to hedging involving either specific transactions or
portfolio positions. See, "Strategic Transactions." Transaction hedging is
entering into a currency transaction with respect to specific assets or
liabilities of a Portfolio, which will generally arise in connection with the
purchase or sale of its portfolio securities or the receipt of income

<PAGE>

therefrom. Position hedging is entering into a currency transaction with respect
to portfolio security positions denominated or generally quoted in that
currency.

The Portfolio will not enter into a transaction to hedge currency
exposure to an extent greater, after netting all transactions intended wholly or
partially to offset other transactions, than the aggregate market value (at the
time of entering into the transaction) of the securities held in its portfolio
that are denominated or generally quoted in or currently convertible into such
currency, other than with respect to proxy hedging as described below.

The Portfolio may also cross-hedge currencies by entering into
transactions to purchase or sell one or more currencies that are expected to
decline in value in relation to other currencies to which the Portfolio has or
in which the Portfolio expects to have portfolio exposure. For example, the
Portfolio may hold a French security and the Adviser may believe that French
francs will deteriorate against German marks.
The Portfolio would sell French francs to reduce its exposure to that currency
and buy German marks. This strategy would be a hedge against a decline in the
value of French francs, although it would expose the Portfolio to declines in
the value of the German mark relative to the U.S. dollar.

To reduce the effect of currency fluctuations on the value of existing
or anticipated holdings of portfolio securities, the Portfolio may also engage
in proxy hedging. Proxy hedging is often used when the currency to which the
Portfolio's portfolio is exposed is difficult to hedge or to hedge against the
dollar. Proxy hedging entails entering into a forward contract to sell a
currency whose changes in value are generally considered to be linked to a
currency or currencies in which certain of the Portfolio's portfolio securities
are or are expected to be denominated, and to buy U.S. dollars. The amount of
the contract would not exceed the value of the Portfolio's securities
denominated in linked currencies. For example, if the Adviser considers that the
Austrian schilling is linked to the German deutschemark (the "D-mark"), the
Portfolio holds securities denominated in schillings and the Adviser believes
that the value of schillings will decline against the U.S. dollar, the Adviser
may enter into a contract to sell D-marks and buy dollars. Proxy hedging
involves some of the same risks and considerations as other transactions with
similar instruments. Currency transactions can result in losses to the Portfolio
if the currency being hedged fluctuates in value to a degree or in a direction
that is not anticipated. Further, there is the risk that the perceived linkage
between various currencies may not be present or may not be present during the
particular time that the Portfolio is engaging in proxy hedging. If the
Portfolio enters into a currency hedging transaction, the Portfolio will comply
with the asset segregation requirements described below.

<PAGE>

RISKS OF CURRENCY TRANSACTIONS

Currency transactions are subject to risks different from those of
other portfolio transactions. Because currency control is of great importance to
the issuing governments and influences economic planning and policy, purchases
and sales of currency and related instruments can be negatively affected by
government exchange controls, blockages, and manipulations or exchange
restrictions imposed by governments. These can result in losses to the Portfolio
if it is unable to deliver or receive currency or funds in settlement of
obligations and could also cause hedges it has entered into to be rendered
useless, resulting in full currency exposure as well as incurring transaction
costs. Buyers and sellers of currency futures are subject to the same risks that
apply to the use of futures generally. Further, settlement of a currency futures
contract for the purchase of most currencies must occur at a bank based in the
issuing nation. Trading options on currency futures is relatively new, and the
ability to establish and close out positions on such options is subject to the
maintenance of a liquid market which may not always be available. Currency
exchange rates may fluctuate based on factors extrinsic to that country's
economy.

COMBINED TRANSACTIONS

The Portfolio may enter into multiple transactions, including multiple
options transactions, multiple futures transactions, multiple currency
transactions (including forward currency contracts) and multiple interest rate
transactions, structured notes and any combination of futures, options, currency
and interest rate transactions ("component transactions"), instead of a single
Strategic Transaction, as part of a single or combined strategy when, in the
opinion of the Adviser it is in the best interests of the Portfolio to do so. A
combined transaction will usually contain elements of risk that are present in
each of its component transactions. Although combined transactions are normally
entered into based on the Adviser's judgment that the combined strategies will
reduce risk or otherwise more effectively achieve the desired portfolio
management goal, it is possible that the combination will instead increase such
risks or hinder achievement of the portfolio management objective.

SWAPS, CAPS, FLOORS AND COLLARS

<PAGE>

fluctuations, as a duration management technique or protecting against an
increase in the price of securities the Portfolio anticipates purchasing at a
later date. Swaps, caps, floors and collars may also be used to enhance
potential gain in circumstances where hedging is not involved although, as
described above, the Portfolio's net loss exposure resulting from swaps, caps,
floors and collars and other Strategic Transactions entered into for such
purposes will not exceed 1% of the Portfolio's net assets at any one time. The
Portfolio will not sell interest rate caps or floors where it does not own
securities or other instruments providing the income stream the Portfolio may be
obligated to pay. Interest rate swaps involve the exchange by the Portfolio with
another party of their respective commitments to pay or receive interest, e.g.,
an exchange of floating rate payments for fixed rate payments with respect to a
notional amount of principal. A currency swap is an agreement to exchange cash
flows on a notional amount of two or more currencies based on the relative value
differential among them and an index swap is an agreement to swap cash flows on
a notional amount based on changes in the values of the reference indices. The
purchase of a cap entitles the purchaser to receive payments on a notional
principal amount from the party selling such cap to the extent that a specified
index exceeds a predetermined interest rate or amount. The purchase of a floor
entitles the purchaser to receive payments on a notional principal amount from
the party selling such floor to the extent that a specified index falls below a
predetermined interest rate or amount. A collar is a combination of a cap and a
floor that preserves a certain rate of return within a predetermined range of
interest rates or values.

The Portfolio will usually enter into swaps on a net basis, i.e., the
two payment streams are netted out in a cash settlement on the payment date or
dates specified in the instrument, with the Portfolio receiving or paying, as
the case may be, only the net amount of the two payments. The Portfolio will not
enter into any swap, cap, floor or collar transaction unless, at the time of
entering into such transaction, the unsecured long-term debt of the
Counterparty, combined with any credit enhancements, is rated at least A by S&P
or Moody's or has an equivalent rating from an NRSRO or which issue debt that is
determined to be of equivalent credit quality by the Adviser. If there is a
default by the Counterparty, the Portfolio may have contractual remedies
pursuant to the agreements related to the transaction. The swap market has grown
substantially in recent years with a large number of banks and investment
banking firms acting both as principals and as agents utilizing standardized
swap documentation. As a result, the swap market has become relatively liquid.
Caps, floors and collars are more recent innovations for which standardized
documentation has not yet been fully developed. Swaps, caps, floors and collars
are considered illiquid for purposes of the Portfolio's policy regarding
illiquid securities, unless it is determined, based upon

<PAGE>

continuing review of the trading markets for the specific security, that such
security is liquid. The Board of Trustees has adopted guidelines and delegated
to the Adviser the daily function of determining and monitoring the liquidity of
swaps, caps, floors and collars. The Portfolio Trust's Board of Trustees,
however, retains oversight focusing on factors such as valuation, liquidity and
availability of information and is ultimately responsible for such
determinations. The staff of the SEC currently takes the position that swaps,
caps, floors and collars are illiquid, and are subject to the Portfolio's
limitation on investing in illiquid securities.

EURODOLLAR CONTRACTS

The Portfolio may make investments in Eurodollar contracts. Eurodollar
contracts are U.S. dollar-denominated futures contracts or options thereon which
are linked to the London Interbank Offered Rate ("LIBOR"), although foreign
currency-denominated instruments are available from time to time.
Eurodollar futures contracts enable purchasers to obtain a fixed rate for the
lending of funds and sellers to obtain a fixed rate for borrowings. The
Portfolio might use Eurodollar futures contracts and options thereon to hedge
against changes in LIBOR, to which many interest rate swaps and fixed income
instruments are linked.

RISKS OF STRATEGIC TRANSACTIONS OUTSIDE THE UNITED STATES

When conducted outside the United States, Strategic Transactions may
not be regulated as rigorously as in the United States, may not involve a
clearing mechanism and related guarantees, and are subject to the risk of
governmental actions affecting trading in, or the prices of, foreign securities,
currencies and other instruments. The value of such positions also could be
adversely affected by: (i) lesser availability than in the United States of data
on which to make trading decisions, (ii) delays in the Portfolio's ability to
act upon economic events occurring in foreign markets during non-business hours
in the United States, (iii) the imposition of different exercise and settlement
terms and procedures and margin requirements than in the United States, (iv)
lower trading volume and liquidity, and (v) other complex foreign political,
legal and economic factors. At the same time, Strategic Transactions may offer
advantages such as trading in instruments that are not currently traded in the
United States or arbitrage possibilities not available in the United States.

USE OF SEGREGATED ACCOUNTS

<PAGE>

The Portfolio will not enter into Strategic Transactions that expose the
Portfolio to an obligation to another party unless it owns either (i) an
offsetting position in securities or other options, futures contracts or other
instruments or (ii) cash, receivables or liquid, high grade debt securities with
a value sufficient to cover its potential obligations. The Portfolio may have to
comply with any applicable regulatory requirements for Strategic Transactions,
and if required, will set aside cash and other assets in a segregated account
with its custodian bank in the amount prescribed. In that case, the Portfolio's
custodian would maintain the value of such segregated account equal to the
prescribed amount by adding or removing additional cash or other assets to
account for fluctuations in the value of the account. Assets held in a
segregated account would not be sold while the Strategic Transaction is
outstanding, unless they are replaced with similar assets. As a result, there is
a possibility that segregation of a large percentage of the Portfolio's assets
could impede portfolio management or the Portfolio's ability to meet redemption
requests or other current obligations.

MONEY MARKET INSTRUMENTS AND REPURCHASE AGREEMENTS

When the Adviser considers investments in equity securities to present
excessive risks and to maintain liquidity for redemptions, the Portfolio may
invest all or a portion of its assets in money market instruments or short-term
interest-bearing securities. The Portfolio may also invest uncommitted cash in
such instruments and securities.

Money market instruments include short-term U.S. government securities,
U.S. and foreign commercial paper (promissory notes issued by corporations to
finance their short-term credit needs), negotiable certificates of deposit,
non-negotiable fixed time deposits, bankers' acceptances and repurchase
agreements.

U.S. government securities include securities which are direct obligations
of the U.S. government backed by the full faith and credit of the United States,
and securities issued by agencies and instrumentalities of the U.S. government,
which may be guaranteed by the U.S. Treasury or supported by the issuer's right
to borrow from the Treasury or may be backed by the credit of the federal agency
or instrumentality itself. Agencies and instrumentalities of the U.S. government
include, but are not limited to, Federal Land Banks, the Federal Farm Credit
Bank, the Central Bank for Cooperatives, Federal Intermediate Credit Banks,
Federal Home Loan Banks and the Federal National Mortgage Association.

A repurchase agreement is an agreement under which the Portfolio
acquires money market instruments (generally U.S. government securities,
bankers' acceptances or certificates of deposit) from a commercial bank, broker
or

<PAGE>

dealer, subject to resale to the seller at an agreed-upon price and date
(normally the next business day). The resale price reflects an agreed-upon
interest rate effective for the period the instruments are held by the Portfolio
and is unrelated to the interest rate on the instruments. The instruments
acquired by the Portfolio (including accrued interest) must have an aggregate
market value in excess of the resale price and will be held by the custodian
bank for the Portfolio until they are repurchased. The Trustees will monitor the
standards which the Adviser will use in reviewing the creditworthiness of any
party to a repurchase agreement with the Portfolio.

The use of repurchase agreements involves certain risks. For example,
if the seller defaults on its obligation to repurchase the instruments acquired
by the Portfolio at a time when their market value has declined, the Portfolio
may incur a loss. If the seller becomes insolvent or subject to liquidation or
reorganization under bankruptcy or other laws, a court may determine that the
instruments acquired by the Portfolio are collateral for a loan by the Portfolio
and therefore are subject to sale by the trustee in bankruptcy. Finally, it is
possible that the Portfolio may not be able to substantiate its interest in the
instruments it acquires. While the Trustees acknowledge these risks, it is
expected that they can be controlled through careful documentation and
monitoring.

PORTFOLIO TURNOVER

The Portfolio places no restrictions on portfolio turnover and it may
sell any portfolio security without regard to the period of time it has been
held, except as may be necessary to enable the Fund to maintain its status as a
regulated investment company under the Internal Revenue Code. The Portfolio may
therefore generally change its portfolio investments at any time in accordance
with the Adviser's appraisal of factors affecting any particular issuer or
market, or the economy in general.

INVESTMENT RESTRICTIONS

The Fund and the Portfolio have each adopted the following fundamental
policies in addition to those described under "Investment Objective and Policies
- -- Investment Restrictions" in the Prospectus. Each of the Fund's and the
Portfolio's fundamental policies cannot be changed unless the change is
approved, respectively, by the "vote of the outstanding voting securities" of
the Fund or the Portfolio, as the case may be, which phrase as used herein means
the lesser of (i) 67% or more of the voting securities of the Fund or the
Portfolio present at a meeting, if the holders of more than

<PAGE>

50% of the outstanding voting securities of the Fund or the Portfolio are
present or represented by proxy, or (ii) more than 50% of the outstanding voting
securities of the Fund or the Portfolio.

As a matter of fundamental policy, the Portfolio (Fund) may not (except
that the Fund may invest substantially all of its assets (other than assets
which are not "investment securities," as defined in the 1940 Act, or are
excepted by the SEC) in an open-end management investment company with
substantially the same investment objective as the Fund):

1. Invest more than 25% of the current value of its total
assets in any single industry, provided that this
restriction shall not apply to U.S. government securities.

2. Underwrite the securities of other issuers, except to the extent that,
in connection with the disposition of portfolio securities, the
Portfolio (Fund) may be deemed to be an underwriter under the
Securities Act of 1933.

3. Purchase real estate or real estate mortgage loans.

4. Purchase securities on margin (except that the Portfolio (Fund) may
obtain such short-term credits as may be necessary for the clearance of
purchases and sales of securities).

5. Purchase or sell commodities or commodity contracts (except futures
contracts and options on such futures contracts and foreign currency
exchange transactions).

6. With respect to at least 75% of its total assets, invest
more than 5% in the securities of any one issuer (other than
the U.S. Government, its agencies or instrumentalities) or
acquire more than 10% of the outstanding voting securities
of any issuer

7. Issue senior securities, borrow money, enter into reverse
repurchase agreements or pledge or mortgage its assets,
except that the Fund may borrow from banks in an amount up
to 15% of the current value of its total assets as a
temporary measure for extraordinary or emergency purposes
(but not investment purposes), and pledge its assets to an
extent not greater than 15% of the current value of its
total assets to secure such borrowings; however, the Fund
may not make any additional investments while its
outstanding borrowings exceed 5% of the current value of its
total assets.

8. Make loans of portfolio securities.

The following restrictions are not fundamental policies and
may be changed by the Trustees of the Portfolio Trust (Trust)

<PAGE>

without investor approval, in accordance with applicable laws, regulations or
regulatory policy. The Portfolio (Fund) may not (except that the Fund may invest
substantially all of its assets (other than assets which are not "investment
securities," as defined in the 1940 Act, or are excepted by the SEC) in an
open-end management investment company with substantially the same investment
objective as the Fund):

a. Make short sales of securities unless (a) after effect is
given to any such short sale, the total market value of all
securities sold short would not exceed 5% of the value of
the Portfolio's (Fund's) net assets or (b) at all
times during which a short position is open it owns an equal
amount of such securities, or by virtue of ownership of
convertible or exchangeable securities it has the right to
obtain through the conversion or exchange of such other
securities an amount equal to the securities sold short.

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

c. Invest in interests in oil, gas or other exploration or
development programs.

d. Invest more than 5% of the assets of the Portfolio
(Fund) in the securities of any issuers which together with
their corporate parents have records of less than three
years' continuous operation, including the operation
of any predecessor, other than (a) obligations issued or
guaranteed by the U.S. Government or its agencies and (b)
repurchase agreements fully collateralized by such
securities.

e. Invest in securities of any company if any officer or director
(trustee) of the Portfolio Trust (Trust) or of the Portfolio's
investment adviser owns more than 1/2 of 1% of the outstanding
securities of such company and such officers and directors (trustees)
own in the aggregate more than 5% of the securities of such company.

f. Purchase or write options, except pursuant to the
limitations under "Strategic Transactions."

g. Invest more than an aggregate of 15% of the net assets of the Portfolio
(Fund) in (a) repurchase agreements which are not terminable within
seven days and (b) securities subject to legal or contractual
restrictions on resale or for which there are no readily available
market quotations and (c) in other illiquid securities, unless such
securities were received as distributions on portfolio securities.

h. Purchase the securities of other investment companies,
provided that the Fund may make such a purchase as part of a
merger, consolidation, or acquisition of assets, or except

<PAGE>

by purchase in the open market where no commission or profit to a
sponsor or dealer results from the purchase other than customary
brokers' commissions and then only if, as a result, no (i) more than
10% of the Fund's assets would be invested in securities of other
investment companies, (ii) more than 3% of the total outstanding voting
securities of any one such investment company would be held by the Fund
or (iii) more than 5% of the Fund's assets would be invested in any one
such investment company.

i. Invest more than 10% of its net assets in repurchase
agreements (this restriction is Fundamental with respect to
the Fund, but not the Portfolio).

If any percentage restriction described above is adhered to at the time
of investment, a subsequent increase or decrease in the percentage resulting
from a change in the value of the Portfolio's (Fund's) assets will not
constitute a violation of the restriction, except with respect to restriction
(e) above.

In order to permit the sale of shares of the Fund in certain states,
the Board may, in its sole discretion, adopt restrictions on investment policy
more restrictive than those described above.
Should the Board determine that any such more restrictive policy is no longer
in the best interest of the Fund and its shareholders, the Fund may cease
offering shares in the state involved and the Board may revoke such restrictive
policy. Moreover, if the states involved shall no longer require any such
restrictive policy, the Board may, in its sole discretion, revoke such policy.

CALCULATION OF PERFORMANCE DATA

As indicated in the Prospectus, the Fund may, from time to time,
advertise certain total return information. The average annual total return of
the Fund for a period is computed by subtracting the net asset value per share
at the beginning of the period from the net asset value per share at the end of
the period (after adjusting for the reinvestment of any income dividends and
capital gain distributions), and dividing the result by the net asset value per
share at the beginning of the period. In particular, the average annual total
return of the Fund ("T") is computed by using the redeemable value at the end of
a specified period of time ("ERV") of a hypothetical initial investment of
$1,000 ("P") over a period of time ( "n") according to the formula P(1+T)n=ERV.

The average annual total return quotations for the Fund for the one
year period ended December 31, 1995, and since inception (January 2, 1991 to
December 31, 1995) are 37.55% and %, respectively. These performance quotations
should not be considered as representative of the Fund's performance for any
specified period in the future.

<PAGE>

In addition to average annual return quotations, the Fund may quote
quarterly and annual performance on a net (with management and administration
fees deducted) and gross basis as follows:

QUARTER/YEAR NET GROSS

1Q91 16.30 16.50
2Q91 (2.76) (2.53)
3Q91 6.15 6.42
4Q91 11.09 11.34
1991 36.36 34.62
1Q92 (2.77) (2.52)

2Q92 (2.63) (2.38)
3Q92 4.03 4.28
4Q92 11.20 10.74
1992 9.52 9.52
1Q93 7.71 7.91
2Q93 2.76 2.96
3Q93 6.64 6.84
4Q93 2.34 2.54
1993 20.79 21.72
1Q94 (2.30) (2.13)
2Q94 (3.14) (2.96)
3Q94 3.22 3.40
4Q94 (1.50) (1.33)
1994 (3.78)% (3.10)%
1Q95 8.76 8.93
2Q95 11.10 11.28
3Q95 9.56 9.74
4Q95 3.90 4.09
1995 37.55 38.46

These performance quotations should not be considered as representative
of the Fund's performance for any specified period in the future.

The Fund's performance may be compared in sales literature to the
performance of other mutual funds having similar objectives or to standardized
indices or other measures of investment performance. In particular, the Fund may
compare its performance to the S&P 500 Index, which is generally considered to
be representative of the performance of unmanaged common stocks that are
publicly traded in the United States securities markets. Comparative performance
may also be expressed by reference to a ranking prepared by a mutual fund
monitoring service or by one or more newspapers, newsletters or financial
periodicals. Performance comparisons may be useful to investors who wish to
compare the Fund's past performance to that of other mutual funds and investment
products. Of course, past performance is not a guarantee of future results.

<PAGE>

MANAGEMENT

TRUSTEES AND OFFICERS OF THE TRUST AND PORTFOLIO TRUST

The Trustees and executive officers of the Trust are listed below. The
Trustees of the Portfolio Trust are identical to the Trustees of the Trust. The
officers of the Portfolio Trust are Messrs. Clayson, Ladd, Wood, Hollis and
Murray, and Mss. Banfield, Hermann and Kneeland who hold the same office with
the Portfolio Trust as with the Trust. All executive officers of the Trust and
the Portfolio Trust are affiliates of Standish, Ayer & Wood, Inc., the
Portfolio's investment adviser.
<TABLE>
<CAPTION>

NAME, ADDRESS POSITION HELD PRINCIPAL OCCUPATION
AND DATE OF BIRTH WITH TRUST DURING PAST 5 YEARS
<S> <C> <C>
D. Barr Clayson*, 7/29/35 Vice President Vice President and Managing
c/o Standish, Ayer & Wood, Inc. and Trustee Director, Standish, Ayer
One Financial Center & Wood, Inc.; President,
Boston, MA 02111 Standish International
Management Company, L.P.

Samuel C. Fleming, 9/30/40 Trustee Chairman of the Board and
c/o Decision Resources, Inc. Chief Executive Officer,
1100 Winter Street Decision Resources, Inc.;
Waltham, MA 02154 through 1989, Senior V.P.
Arthur D. Little

Benjamin M. Friedman, 8/5/44 Trustee William Joseph Maier
c/o Harvard University Professor of Political
Cambridge, MA 02138 Economy, Harvard
University

John H. Hewitt, 4/11/35 Trustee Trustee, The Peabody
P.O. Box 307 Foundation; Trustee,
So. Woodstock, VT 05071 Visiting Nurse Alliance of
Vermont and New Hampshire

<PAGE>

NAME, ADDRESS POSITION HELD PRINCIPAL OCCUPATION
AND DATE OF BIRTH WITH TRUST DURING
PAST 5 YEARS

Edward H. Ladd*, 1/3/38 Trustee and Chairman of the Board and
c/o Standish, Ayer & Wood, Inc. Vice President Managing Director,
One Financial Center Standish, Ayer & Wood, Inc.
Boston, MA 02111 since 1990; formerly,
President of Standish, Ayer
& Wood, Inc.

Caleb Loring III, 11/14/43 Trustee Trustee, Essex Street
c/o Essex Street Associates Associates (family
P.O. Box 5600 investment trust office);
Beverly Farms, MA 01915 Director, Holyoke Mutual
Insurance Company

Richard S. Wood*, 5/2/54 President and Vice President, Secretary
c/o Standish, Ayer & Wood, Inc. Trustee and Director, Standish,
One Financial Center Ayer & Wood, Inc.;
Boston, MA 02111 Executive Vice President,
Standish International
Management Company, L.P.

Richard C. Doll, 7/8/48 Vice President Vice President and
c/o Standish, Ayer & Wood, Inc. Director, Standish, Ayer
One Financial Center & Wood, Inc.
Boston, MA 02111

James E. Hollis III, 11/21/48 Executive Vice Vice President and
c/o Standish, Ayer & Wood, Inc. President Director, Standish, Ayer
One Financial Center & Wood, Inc.
Boston, MA 02111

David W. Murray, 5/5/40 Treasurer and Vice President, Treasurer
<PAGE>

NAME, ADDRESS POSITION HELD PRINCIPAL OCCUPATION
AND DATE OF BIRTH WITH TRUST DURING PAST 5 YEARS
- ----------------- --------------- -------------------

c/o Standish, Ayer & Wood, Inc. Secretary and Director, Standish,
One Financial Center Ayer & Wood, Inc.
Boston, MA 02111

Caleb F. Aldrich, 9/20/57 Vice President Vice President and
c/o Standish, Ayer & Wood, Inc. Director, Standish, Ayer
One Financial Center & Wood, Inc.
Boston, MA 02111

Beverly E. Banfield, 7/6/56 Vice President Vice President and
c/o Standish, Ayer & Wood, Inc. Compliance Officer,
One Financial Center Standish, Ayer & Wood,
Boston, MA 02111 Inc.; Assistant Vice
President and Compliance
Officer, Freedom Capital
Management Corp.
(1989-1992)

<PAGE>

NAME, ADDRESS POSITION HELD PRINCIPAL OCCUPATION
AND DATE OF BIRTH WITH TRUST DURING PAST 5 YEARS
- ----------------- --------------- -------------------

NAME, ADDRESS POSITION HELD PRINCIPAL OCCUPATION
AND DATE OF BIRTH WITH TRUST DURING
PAST 5 YEARS

Nicholas S. Battelle, 6/24/42 Vice President Vice President and
c/o Standish, Ayer & Wood, Inc. Director, Standish, Ayer
One Financial Center & Wood, Inc.
Boston, MA 02111

Walter M. Cabot, 1/6/33 Vice President Senior Advisor and
c/o Standish, Ayer & Wood, Inc. Director, Standish, Ayer
One Financial Center & Wood, Inc.; prior to
Boston, MA 02111 1991, President, Harvard
Management Company

David H. Cameron, 11/2/55 Vice President Vice President and
c/o Standish, Ayer & Wood, Inc. Director, Standish, Ayer
One Financial Center & Wood, Inc.

<PAGE>

NAME, ADDRESS POSITION HELD PRINCIPAL OCCUPATION
AND DATE OF BIRTH WITH TRUST DURING PAST 5 YEARS
- ----------------- --------------- -------------------

Boston, MA 02111

Karen K. Chandor, 2/13/50 Vice President Vice President and
c/o Standish, Ayer & Wood, Inc. Director, Standish, Ayer
One Financial Center & Wood, Inc.
Boston, MA 02111

Lavinia B. Chase, 6/4/46 Vice President Vice President, Standish,
c/o Standish, Ayer & Wood, Inc. Ayer & Wood, Inc.
One Financial Center
Boston, MA 02111

Susan B. Coan, 5/1/52 Vice President Vice President, Standish,
c/o Standish, Ayer & Wood, Inc. Ayer & Wood, Inc.
One Financial Center
Boston, MA 02111

W. Charles Cook II, 7/16/63 Vice President Vice President, Standish,
c/o Standish, Ayer & Wood, Inc. Ayer & Wood, Inc.
One Financial Center
Boston, MA 02111

James W. Copley, Jr., 2/1/52 Vice President President and Director,
c/o Standish, Ayer & Wood, Inc. Consolidated Investment
One Financial Center Corporation;
Boston, MA 02111 Vice-President, Funds
Management, Consolidated
Healthcare, Inc.

<PAGE>

NAME, ADDRESS POSITION HELD PRINCIPAL OCCUPATION
AND DATE OF BIRTH WITH TRUST DURING PAST 5 YEARS
- ----------------- --------------- -------------------

Joseph M. Corrado, 5/13/55 Vice President Vice President, Standish,
c/o Standish, Ayer & Wood, Inc. Ayer & Wood, Inc.
One Financial Center
Boston, MA 02111

Dolores S. Driscoll, 2/17/48 Vice President Vice President and Managing

<PAGE>

NAME, ADDRESS POSITION HELD PRINCIPAL OCCUPATION
AND DATE OF BIRTH WITH TRUST DURING PAST 5 YEARS
- ----------------- --------------- -------------------

c/o Standish, Ayer & Wood, Inc. Director, Standish, Ayer
One Financial Center & Wood, Inc.
Boston, MA 02111

Anne P. Herrmann, 1/26/56 Vice President Mutual Fund Administrator,
c/o Standish, Ayer & Wood, Inc. Standish, Ayer & Wood, Inc.
One Financial Center
Boston, MA 02111

Ann S. Higgins, 4/8/35 Vice President Vice President, Standish,
c/o Standish, Ayer & Wood, Inc. Ayer & Wood, Inc.
One Financial Center
Boston, MA 02111

Denise B. Kneeland, 8/19/51 Vice President Senior Operations Manager,
c/o Standish, Ayer & Wood, Inc. Standish, Ayer & Wood, Inc.
One Financial Center since January, 1995;
Boston, MA 02111 formerly Vice President,
Scudder Clark and Stevens

Raymond J. Kubiak, 9/3/57 Vice President Vice President and
c/o Standish, Ayer & Wood, Inc. Director, Standish, Ayer
One Financial Center & Wood, Inc.
Boston, MA 02111

Maria D. Furman, 2/3/54 Vice President Vice President and
c/o Standish, Ayer & Wood, Inc. Director, Standish, Ayer
One Financial Center & Wood, Inc.
Boston, MA 02111

Phillip D. Leonardi, 4/24/62 Vice President Vice President, Standish,
c/o Standish, Ayer & Wood, Inc. Ayer & Wood, Inc. since
One Financial Center November 1993; formerly,
Boston, MA 02111 Investment Sales, Cigna
Corporation (1993) and
Travelers Corporation
(1984-1993)

<PAGE>

NAME, ADDRESS POSITION HELD PRINCIPAL OCCUPATION
AND DATE OF BIRTH WITH TRUST DURING PAST 5 YEARS
- ----------------- --------------- -------------------

Laurence A. Manchester, 5/24/43 Vice President Vice President and
c/o Standish, Ayer & Wood, Inc. Director, Standish, Ayer
One Financial Center & Wood, Inc.
Boston, MA 02111

George W. Noyes, 11/12/44 Vice President President and Managing
c/o Standish, Ayer & Wood, Inc. Director, Standish, Ayer
One Financial Center & Wood, Inc.
Boston, MA 02111

Arthur H. Parker, 8/12/35 Vice President Vice President and
c/o Standish, Ayer & Wood, Inc. Director, Standish, Ayer
One Financial Center & Wood, Inc.
Boston, MA 02111

Jennifer A. Pline, 3/8/60 Vice President Vice President, Standish,
c/o Standish, Ayer & Wood, Inc. Ayer & Wood, Inc.
One Financial Center
Boston, MA 02111

Howard B. Rubin, 10/29/59 Vice President Vice President and
c/o Standish, Ayer & Wood, Inc. Director, Standish, Ayer
One Financial Center & Wood, Inc.
Boston, MA 02111

Michael C. Schoeck, 10/24/55 Vice President Vice President, Standish,
c/o Standish, Ayer & Wood, Inc. Ayer & Wood, Inc. since
One Financial Center August, 1993; formerly,
Boston, MA 02111 Vice President,
Commerzbank, Frankfurt,
Germany

Austin C. Smith, 7/25/42 Vice President Vice President and
c/o Standish, Ayer & Wood, Inc. Director, Standish, Ayer
One Financial Center & Wood, Inc.

<PAGE>

NAME, ADDRESS POSITION HELD PRINCIPAL OCCUPATION
AND DATE OF BIRTH WITH TRUST DURING PAST 5 YEARS
- ----------------- --------------- -------------------

Boston, MA 02111

Stephen A. Smith, 3/13/49 Vice President Vice President, since
c/o Standish, Ayer & Wood, Inc. November 2, 1993; formerly,
One Financial Center Standish, Ayer & Wood, Inc.
Boston, MA 02111 Consultant Cambridge

James W. Sweeney, 5/15/59 Vice President Vice President and
c/o Standish, Ayer & Wood, Inc. Director, Standish, Ayer
One Financial Center & Wood, Inc.
Boston, MA 02111

Ralph S. Tate, 4/2/47 Vice President Vice President and
c/o Standish, Ayer & Wood, Inc. Director, Standish, Ayer
One Financial Center & Wood, Inc.
since April,
Boston, MA 02111 1990; formerly Vice
President, Aetna Life &
Casualty

Michael W. Thompson, 3/31/56 Vice President Vice President, Standish,
c/o Standish, Ayer & Wood, Inc. Ayer & Wood, Inc.
One Financial Center
Boston, MA 02111
</TABLE>

*Indicates that Trustee is an interested person of the Trust or the Portfolio
Trust for purposes of the 1940 Act.

COMPENSATION OF TRUSTEES AND OFFICERS

Each of the Trust and the Portfolio Trust pays no compensation to the
Trustees of the Trust or the Portfolio Trust affiliated with Standish as the
Administrator of the Fund (the "Fund Administrator") or the Adviser,
respectively, or the Trust's and Portfolio Trust's officers. None of the
Trustees or officers have engaged in any financial transactions with the Trust,
the Portfolio Trust or the Adviser.

<PAGE>

The following table sets forth all compensation paid to the Trust's
Trustees as of the Fund's fiscal year ended December 31, 1995:

TOTAL
PENSION OR RETIREMENT COMPENSATION
AGGREGATE BENEFITS ACCRUED AS FROM FUND
COMPENSATION PART OF AND OTHER FUNDS
NAME OF TRUSTEE FROM THE FUND FUND'S EXPENSES IN COMPLEX*

D. Barr Clayson $0 $0 $0
Richard C. Doll** 0 0 0
Samuel C. Fleming 0 0 41,750
Benjamin M. Friedman 217 0 36,750
John H. Hewitt 191 0 36,750
Edward H. Ladd 101 0 0
Caleb Loring, III 191 0 36,750
Richard S. Wood 0 0 0

* As of the date of this Statement of Additional Information there were 18 funds
in the fund complex.

** Mr. Doll resigned as a Trustee effective December 6, 1995.

CERTAIN SHAREHOLDERS

At January 15, 1996, Trustees and officers of the Trust and the
Portfolio Trust as a group beneficially owned (i.e., had voting and/or
investment power) approximately 1.09% of the then outstanding shares of the
Fund. At that date, each of the following persons beneficially owned 5% or more
of the then outstanding shares of the Fund:

<PAGE>

[ ]

INVESTMENT ADVISER

OF THE PORTFOLIO TRUST

Standish serves as the Adviser to the Portfolio pursuant to a written
investment advisory agreement with the Portfolio Trust.
Prior to April, 1996, the Adviser managed directly the assets of the Fund
pursuant to an investment advisory agreement. This agreement was terminated by
the Fund on such date subsequent to the approval by the Fund's shareholders on
March 29, 1996 to implement certain changes in the Fund's investment
restrictions which enable the Fund to invest all of its investable assets in the
Portfolio. The Adviser is a Massachusetts corporation organized in 1933 and is
registered under the Investment Advisers Act of 1940.

The following, constituting all of the Directors and all of the
shareholders of the Adviser, are the Adviser's controlling persons: Caleb F.
Aldrich, Nicholas S. Battelle, Walter M. Cabot, Sr., David H. Cameron, Karen K.
Chandor, D. Barr Clayson, Richard C. Doll, Dolores S. Driscoll, Mark A.
Flaherty, Maria D. Furman, James E. Hollis III, Raymond J. Kobiak, Edward H.
Ladd, Laurence A. Manchester, David W. Murray, George W. Noyes, Arthur H.
Parker, Howard B. Rubin, Austin C. Smith, David C. Stuehr, James J. Sweeney,
Ralph S. Tate and Richard S. Wood.

Certain services provided by the Adviser under the advisory agreement
are described in the Prospectus. These services are provided without
reimbursement by the Portfolio for any costs incurred. Under the investment
advisory agreement, the Adviser is paid a fee based upon a percentage of the
Portfolio's average daily net asset value computed as described in the
Prospectus. The rate and time at which the fee is paid is described in the
Prospectus. For services to the fund during the fiscal year ended December 31,
1993, the Adviser did not impose a portion of its fee, amounting to $60,610, and
received advisory fees of $114,932. For the fiscal year ended December 31, 1994
and 1995, the Adviser received advisory fees of $422,731 and $557,342.

<PAGE>

auditing fees and expenses; expenses of investor reports to be provided to
existing shareholders; registration and reporting fees and expenses; and
Trustees' fees and expenses.

Unless terminated as provided below, the Investment Advisory Agreement
continues in full force and effect until March 29, 1998 and for successive
periods of one year thereafter, but only so long as each such continuance is
approved annually (i) by either the Trustees of the Portfolio Trust or by the
"vote of a majority of the outstanding voting securities" of the Portfolio, and,
in either event (ii) by vote of a majority of the Trustees of the Portfolio
Trust who are not parties to the Investment Advisory Agreement or "interested
persons" (as defined in the 1940 Act) of any such party, cast in person at a
meeting called for the purpose of voting on such approval. The Investment
Advisory Agreement may be terminated at any time without the payment of any
penalty by vote of the Trustees of the Portfolio Trust or by the "vote of a
majority of the outstanding voting securities" of the Portfolio or by the
Adviser, on sixty days' written notice to the other parties. The Investment
Advisory Agreement terminates in the event of its assignment as defined in the
1940 Act.

In an attempt to avoid any potential conflict with portfolio
transactions for the Portfolio, the Adviser , the Trust and the Portfolio Trust
have each adopted extensive restrictions on personal securities trading by
personnel of the Adviser and its affiliates. These restrictions include:
pre-clearance of all personal securities transactions and a prohibition of
purchasing initial public offerings of securities. These restrictions are a
continuation of the basic principle that the interests of the Fund and its
shareholders, and the Portfolio and its investors, come before those of the
Adviser and its employees.

ADMINISTRATOR OF THE FUND

Standish also serves as the administrator to the Fund (the
"Fund Administrator") pursuant to a written administration

<PAGE>

agreement with the Trust on behalf of the Fund. Certain services provided by the
Fund Administrator under the administration agreement are described in the
Prospectus. For these services, the Fund Administrator currently does not
receive any additional compensation. The Trustees of the Trust may, however,
determine in the future to compensate the Fund Administrator for its
administrative services. The administration agreement provides that if the total
expenses of the Fund and the Portfolio in any fiscal year exceed the most
restrictive expense limitation applicable to the Fund in any state in which
shares of the Fund are then qualified for sale, the compensation due the Fund
Administrator shall be reduced by the amount of the excess, by a reduction or
refund thereof at the time such compensation is payable after the end of each
calendar month during the fiscal year, subject to readjustment during the year.
Currently, the most restrictive state expense limitation provision limits the
Fund's expenses to 2 1/2% of the first $30 million of average net assets, 2% of
the next $70 million of such net assets and 1 1/2% of such net assets in excess
of $100 million.

The Fund's administration agreement can be terminated by either party
on not more than sixty days' written notice.

ADMINISTRATOR OF THE PORTFOLIO

IBT Trust Company (Cayman) Ltd., P.O. Box 501, Grand Cayman, Cayman
Islands, BWI, serves as the administrator to the Portfolio (the "Portfolio
Administrator") pursuant to a written administration agreement with the
Portfolio Trust on behalf of the Portfolio. The Portfolio Administrator provides
the Portfolio Trust with office space for managing its affairs, and with certain
clerical services and facilities. For these services, the Portfolio
Administrator currently receives a fee from the Portfolio in the amount of
$7,500 annually.

The Portfolio's administration agreement can be terminated by either
party on not more than sixty days' written notice.

DISTRIBUTOR OF THE FUND

<PAGE>

not "interested persons" (as defined by the 1940 Act) of the parties to the
Underwriting Agreement, cast in person at a meeting called for the purpose of
voting on such approval. The Underwriting Agreement will terminate automatically
if assigned by either party thereto and is terminable at any time without
penalty by a vote of a majority of the Trustees of the Trust, a vote of a
majority of the Trustees who are not "interested persons" of the Trust, or by a
vote of the holders of a majority of the Fund's outstanding shares, in any case
without payment of any penalty on not more than 60 days' written notice to the
other party. The offices of the Principal Underwriter are located at One
Financial Center, 26th Floor, Boston, Massachusetts 02111.

REDEMPTION OF SHARES

Detailed information on redemption of shares is included in the Prospectus. The
Trust may suspend the right to redeem Fund shares or postpone the date of
payment upon redemption for more than seven days (i) for any period during which
the New York Stock Exchange is closed (other than customary weekend or holiday
closings) or trading on the exchange is restricted; (ii) for any period during
which an emergency exists as a result of which disposal by the Portfolio of
securities owned by it or determination by the Portfolio of the value of its net
assets is not reasonably practicable; or (iii) for such other periods as the SEC
may permit for the protection of shareholders of the Fund.

The Trust intends to pay in cash for all Fund shares redeemed, but
under certain conditions, the Trust may make payment wholly or partly in
portfolio securities from the Portfolio, in conformity to the applicable rule of
the SEC. Portfolio securities paid upon redemption of Fund shares will be valued
at their then current market value. The Trust, on behalf of each of its series,
has elected to be governed by the provisions of Rule 18f-1 under the 1940 Act
which contains a formula for determining the minimum amount of cash which may be
paid as part of any redemption, limiting cash payments to any shareholder during
any 90-day period to the lesser of $250,000 or 1% of the Fund's net asset value
at the beginning of such period.
An investor may incur brokerage costs in converting portfolio securities
received upon redemption to cash. The Portfolio has advised the Trust that the
Portfolio will not redeem in-kind except in circumstances in which the Fund is
permitted to redeem in-kind or except in the event the Fund completely withdraws
its interest from the Portfolio.

PORTFOLIO TRANSACTIONS

<PAGE>

portfolio transactions will be prompt execution of orders in an efficient manner
at the most favorable price. In selecting broker-dealers and in negotiating
commissions, the Adviser will consider the firm's reliability, the quality of
its execution services on a continuing basis and its financial condition. When
more than one firm is believed to meet these criteria, preference may be given
to firms which also provide research services. These services may include (i)
furnishing advice as to the value of securities, the advisability of investing
in, purchasing or selling securities, and the availability of securities or
purchasers or sellers of securities, (ii) furnishing analyses and reports
concerning issuers, industries, securities, economic factors and trends,
portfolio strategy, and the performance of accounts, and (iii) effecting
securities transactions and performing functions incidental thereto (such as
clearance and settlement). Research services furnished by firms through which
the Portfolio effects its securities transactions may be used by the Adviser in
servicing other accounts; not all of these services may be used by the Adviser
in connection with the Portfolio. The investment advisory fee paid by the
Portfolio under the advisory agreement will not be reduced as a result of the
Adviser's receipt of research services.

For the fiscal years ended December 31, 1993 , 1994 and 1995, brokerage
commissions paid by the Fund on portfolio transactions totaled $75,896 ,
$287,545 and $ , respectively. Brokerage commissions of $ paid during the fiscal
year ended December 31, 1995 were paid on portfolio transactions aggregating $
executed by brokers who provided research and other statistical and factual
information. At December 31, 1995, the Fund did not hold any securities of its
regular brokers or dealers.

The Adviser also places portfolio transactions for other advisory
accounts. The Adviser will seek to allocate portfolio transactions equitably
whenever concurrent decisions are made to purchase or sell securities for the
Portfolio and another advisory account. In some cases, this procedure could have
an adverse effect on the price or the amount of securities available to the
Portfolio. In making such allocations, the main factors considered by the
Adviser will be the respective investment objectives, the relative size of
portfolio holdings of the same or comparable securities, the availability of
cash for investment, the size of investment commitments generally held, and
opinions of the persons responsible for recommending the investment.

DETERMINATION OF NET ASSET VALUE

The Fund's net asset value per share is computed on each day on which
the New York Stock Exchange is open, (a "Business Day") as of the close of
regular trading (currently 4:00 p.m. New York City time). Currently the New York
Stock Exchange is not open on weekends, New Year's Day, Presidents' Day, Good
Friday, Memorial

<PAGE>

Day, Independence Day, Labor Day, Thanksgiving Day and Christmas.
The net asset value per share is computed by dividing the value

of all securities and other assets of the Fund (substantially all of which will
be represented by the Fund's investment in the Portfolio) less all liabilities
by the number of Fund shares outstanding, and rounding to the nearest cent per
share. Expenses and fees of the Fund are accrued daily and taken into account
for the purpose of determining net asset value.

The value of the Portfolio's net assets (I.E., the value of its
securities and other assets less its liabilities, including expenses payable or
accrued) is determined at the same time and on the same days as the net asset
value per share of the Fund is determined. Each investor in the Portfolio,
including the Fund, may add to or reduce its investment in the Portfolio on each
Business Day. As of 4:00 p.m. (Eastern time) on each Business Day, the value of
each investor's interest in the Portfolio will be determined by multiplying the
net asset value of the Portfolio by the percentage representing that investor's
share of the aggregate beneficial interests in the Portfolio. Any additions or
reductions which are to be effected on that day will then be effected. The
investor's percentage of the aggregate beneficial interests in the Portfolio
will then be recomputed as the percentage equal to the fraction (i) the
numerator of which is the value of such investor's investment in the Portfolio
as of 4:00 p.m. on such day plus or minus, as the case may be, the amount of net
additions to or reductions in the investor's investment in the Portfolio
effected on such day, and (ii) the denominator of which is the aggregate net
asset value of the Portfolio as of 4:00 p.m. on such day plus or minus, as the
case may be, the amount of the net additions to or reductions in the aggregate
investments in the Portfolio by all investors in the Portfolio. The percentage
so determined will then be applied to determine the value of the investor's
interest in the Portfolio as of 4:00 p.m. on the following Business Day.

Portfolio securities are valued at the last sale prices on the exchange
or national securities market on which they are primarily traded. Securities not
listed on an exchange or national securities market, or securities for which
there were no reported transactions, are valued at the last quoted bid prices.
Securities for which quotations are not readily available and all other assets
will be valued at fair value as determined in good faith by the Adviser in
accordance with procedures approved by the Trustees.

THE FUND AND ITS SHARES

<PAGE>

Trustees of the Trust have authority to issue an unlimited number of shares of
beneficial interest, par value $.01 per share, of the Fund. Each share
represents an equal proportionate interest in the Fund with each other share and
is entitled to such dividends and distributions as are declared by the Trustees.
Upon any liquidation of the Fund, shareholders are entitled to share pro rata in
the net assets available for distribution.

All Fund shares have equal rights with regard to voting, and
shareholders of the Fund have the right to vote as a separate class with respect
to matters as to which their interests are not identical to those of
shareholders of other classes of the Trust, including any change of investment
policy requiring the approval of shareholders.

Under Massachusetts law, shareholders of the Trust could, under certain
circumstances, be held liable for the obligations of the Trust. However, the
Agreement and Declaration of Trust disclaims shareholder liability for acts or
obligations of the Trust and requires that notice of this disclaimer be given in
each agreement, obligation or instrument entered into or executed by the Trust
or a Trustee. The Declaration also provides for indemnification from the assets
of the Trust for all losses and expenses of any Trust shareholder held liable
for the obligations of the Trust. Thus, the risk of a shareholder incurring a
financial loss on account of his or its liability as a shareholder of the Trust
is limited to circumstances in which the Trust would be unable to meet its
obligations. The possibility that these circumstances would occur is remote.
Upon payment of any liability incurred by the Trust, the shareholder paying the
liability will be entitled to reimbursement from the general assets of the
Trust. The Trustees intend to conduct the operations of the Trust to avoid, to
the extent possible, ultimate liability of shareholders for liabilities of the
Trust.

Except as described below, whenever the Trust is requested to vote on a
fundamental policy of or matters pertaining to the Portfolio, the Trust will
hold a meeting of the Fund's shareholders and will cast its vote proportionately
as instructed by the Fund's shareholders. Fund shareholders who do not vote will
not affect the Trust's votes at the Portfolio meeting. The percentage of the
Trust's votes representing Fund shareholders not voting will be voted by the
Trustees of the Trust in the same proportion as the Fund shareholders who do, in
fact, vote. Subject to applicable statutory and regulatory requirements, the
Fund would not request a vote of its shareholders with respect to (a) any
proposal relating to the Portfolio, which proposal, if made with respect to the
Fund, would not require the vote of the shareholders of the Fund, or (b) any
proposal with respect to the Portfolio that is identical in all material
respects to a proposal that has previously been approved by shareholders of the
Fund. Any proposal submitted to holders in the Portfolio, and that is not
required to be voted on by shareholders of the Fund,

<PAGE>

would nonetheless be voted on by the Trustees of the Trust.

THE PORTFOLIO AND ITS INVESTORS

The Portfolio is a series of Standish, Ayer & Wood Master Portfolio, a
newly formed trust and, like the Fund, is an open-end management investment
company under the Investment Company Act of 1940, as amended. The Portfolio
Trust was organized as a master trust fund under the laws of the State of New
York on January [ ], 1996.

Interests in the Portfolio have no preemptive or conversion rights, and
are fully paid and non-assessable, except as set forth below. The Portfolio
normally will not hold meetings of holders of such interests except as required
under the 1940 Act. The Portfolio would be required to hold a meeting of holders
in the event that at any time less than a majority of its Trustees holding
office had been elected by holders. The Trustees of the Portfolio continue to
hold office until their successors are elected and have qualified. Holders
holding a specified percentage of interests in the Portfolio may call a meeting
of holders in the Portfolio for the purpose of removing any Trustee.
A Trustee of the Portfolio may be removed upon a majority vote of the interests
held by holders in the Portfolio qualified to vote in the election. The 1940 Act
requires the Portfolio to assist its holders in calling such a meeting. Upon
liquidation of the Portfolio, holders in the Portfolio would be entitled to
share pro rata in the net assets of the Portfolio available for distribution to
holders.

Each holder in the Portfolio is entitled to a vote in proportion to its
percentage interest in the Portfolio.

TAXATION

Each series of the Trust, including the Fund, is treated as a separate
entity for accounting and tax purposes. The Fund has qualified and elected to be
treated as a "regulated investment company" ("RIC") under Subchapter M of the
Code and intends to continue to so qualify in the future. As such and by
complying with the applicable provisions of the Code regarding the sources of
its income, the timing of its distributions, and the diversification of its
assets, the Fund will not be subject to Federal income tax on its investment
company taxable income (i.e., all income, after reduction by deductible
expenses, other than its "net capital gain," which is the excess, if any, of its
net long-term capital gain over its net short-term capital loss) and net capital
gain which are distributed to shareholders in accordance with the timing
requirements of the Code.

<PAGE>

tax liability, its share of the Portfolio's income, gains, losses, deductions,
credits and tax preference items, without regard to whether it has received any
cash distributions from the Portfolio. Because the Fund invests its assets in
the Portfolio, the Portfolio normally must satisfy the applicable source of
income and diversification requirements in order for the Fund to satisfy them.
The Portfolio will allocate at least annually among its investors, including the
Fund, each investor's distributive share of the Portfolio's net investment
income, net realized capital gains, and any other items of income, gain, loss,
deduction or credit. The Portfolio will make allocations to the Fund in
accordance with the Code and applicable regulations and will make moneys
available for withdrawal at appropriate times and in sufficient amounts to
enable the Fund to satisfy the tax distribution requirements that apply to the
Fund and that must be satisfied in order to avoid Federal income and/or excise
tax on the Fund. For purposes of applying the requirements of the Code regarding
qualification as a RIC, the Fund will be deemed (i) to own its proportionate
share of each of the assets of the Portfolio and (ii) to be entitled to the
gross income of the Portfolio attributable to such share.

The Fund will be subject to a 4% non-deductible federal excise tax on
certain amounts not distributed (and not treated as having been distributed) on
a timely basis in accordance with annual minimum distribution requirements. The
Fund intends under normal circumstances to avoid liability for such tax by
satisfying such distribution requirements.

The Fund is not subject to Massachusetts corporate excise or franchise
taxes. Provided that the Fund qualifies as a regulated investment company under
the Code, it will also not be required to pay any Massachusetts income tax.

The Fund will not distribute long-term or short-term capital gain
realized in any year to the extent that a capital loss is carried forward from
prior years against such gain. For federal income tax purposes, the Fund is
permitted to carry forward a net capital loss in any year to offset its own net
capital gains, if any, during the eight years following the year of the loss. To
the extent subsequent capital gains are offset by such losses, they would not
result in federal income tax liability to the Fund and, as noted above, would
not be distributed as such to shareholders. The Fund has [$5,704,684] of capital
loss carryforwards, which expire on December 31, 2002, available to offset
future capital gains. [update after 12/31/95]

Limitations imposed by the Code on regulated investment companies like
the Fund may restrict the Portfolio's ability to enter into futures, options and
currency forward transactions.

Certain options, futures and forward foreign currency

<PAGE>

transactions undertaken by the Portfolio may cause the Portfolio to recognize
gains or losses from marking to market even though the Portfolio's positions
have not been sold or terminated and affect the character as long-term or
short-term (or, in the case of certain currency forwards, options and futures,
as ordinary income or loss) and timing of some capital gains and losses realized
by the Portfolio and allocable to the Fund. Any net mark to market gains may
also have to be distributed by the Fund to satisfy the distribution requirements
referred to above even though no corresponding cash amounts may concurrently be
received, possibly requiring the disposition by the Portfolio of portfolio
securities or borrowing to obtain the necessary cash. Also, certain of the
Portfolio's losses on the Portfolio's transactions involving options, futures or
forward contracts and/or offsetting Portfolio positions may be deferred rather
than being taken into account currently in calculating the Portfolio's taxable
income or gain. Certain of the applicable tax rules may be modified if the
Portfolio is eligible and chooses to make one or more of certain tax elections
that may be available. Because the Fund's income, gains and losses consist
primarily of its share of the income, gains and losses of the Portfolio, which
are directly affected by the provisions described in this paragraph, these
transactions may affect the amount, timing and character of the Fund's
distributions to shareholders. The Portfolio will take into account the special
tax rules (including consideration of available elections) applicable to
options, futures or forward contracts in order to minimize any potential adverse
tax consequences.

The Federal income tax rules applicable to interest rate or currency
swaps, caps, floors and collars are unclear in certain respects, and the
Portfolio may be required to account for these instruments under tax rules in a
manner that, under certain circumstances, may limit its transactions in these
instruments.

<PAGE>

Foreign exchange gains and losses realized by the Portfolio in
connection with certain transactions involving foreign currency-denominated debt
securities, if any, certain foreign currency futures and options, foreign
currency forward contracts, foreign currencies, or payables or receivables
denominated in a foreign currency are subject to Section 988 of the Code, which
generally causes such gains and losses to be treated as ordinary income and
losses and, because the Fund invests in the Portfolio, may affect the amount,
timing and character of Fund distributions to shareholders. Any such
transactions that are not directly related to the Portfolio's investment in
stock or securities, possibly including speculative currency positions or
currency derivatives not used for hedging purposes, may increase the amount of
gain it is deemed to recognize from the sale of certain investments held for
less than three months. The Fund's share of such gain (plus any such gain the
Fund may realize from other sources) is limited under the Code to less than 30%
of the Fund's annual gross income. Such transactions could under future Treasury
regulations produce income not among the types of "qualifying income" from which
the Fund must derive at least 90% of its annual gross income.

The Portfolio may be subject to withholding and other taxes imposed by
foreign countries with respect to its investments in foreign securities. Tax
conventions between certain countries and the U.S. may reduce or eliminate such
taxes. Investors in the Fund would be entitled to claim U.S. foreign tax credits
or deductions with respect to such taxes, subject to certain provisions and
limitations contained in the Code, only if more than 50% of the value of the
Fund's total assets at the close of any taxable year were to consist of stock or
securities of foreign corporations and the Fund were to file an election with
the Internal Revenue Service. Because the investments of the Portfolio are such
that the Fund generally does not expect to meet this 50% requirement,
shareholders of the Fund generally will not directly take into account the
foreign taxes, if any, paid by the Portfolio and allocable to the Fund, and will
generally not be entitled to any related tax deductions or credits. Such taxes
will reduce the amounts the Fund would otherwise have available to distribute.

<PAGE>

elections may, if available, ameliorate these adverse tax consequences, but any
such election would require the Fund to recognize taxable income or gain without
the concurrent receipt of cash. The Portfolio may limit and/or manage its stock
holdings in passive foreign investment companies to minimize the Fund's tax
liability or maximize its return from these investments.

Distributions from the Fund's current or accumulated earnings and
profits ("E&P"), as computed for Federal income tax purposes, will be taxable as
described in the Fund's Prospectus whether taken in shares or in cash.
Distributions, if any, in excess of E&P will constitute a return of capital,
which will first reduce an investor's tax basis in Fund shares and thereafter
(after such basis is reduced to zero) will generally give rise to capital gains.
Shareholders electing to receive distributions in the form of additional shares
will have a cost basis for federal income tax purposes in each share so received
equal to the amount of cash they would have received had they elected to receive
the distributions in cash, divided by the number of shares received.

For purposes of the dividends received deduction available to
corporations, dividends received by the Portfolio and allocable to the Fund, if
any, from U.S. domestic corporations in respect of the stock of such
corporations held by the Portfolio, for U.S. Federal income tax purposes, for at
least a minimum holding period, generally 46 days, and distributed and
designated by the Fund may be treated as qualifying dividends. Corporate
shareholders must meet the minimum holding period requirement referred to above
with respect to their shares of the Fund in order to qualify for the deduction
and, if they borrow to acquire such shares, may be denied a portion of the
dividends received deduction. The entire qualifying dividend, including the
otherwise deductible amount, will be included in determining the excess (if any)
of a corporate shareholder's adjusted current earnings over its alternative
minimum taxable income, which may increase its alternative minimum tax
liability. Additionally, any corporate shareholder should consult its tax
adviser regarding the possibility that its basis in its shares may be reduced,
for Federal income tax purposes, by reason of "extraordinary dividends" received
with respect to the shares, for the purpose of computing its gain or loss on
redemption or other disposition of the shares.

At the time of an investor's purchase of Fund shares, a portion of the
purchase price is often attributable to undistributed net investment income
and/or realized or unrealized appreciation in the Fund's share of the
Portfolio's portfolio. Consequently, subsequent distributions by the Fund from
such income and/or appreciation may be taxable to such investor even if the net
asset value of the investor's shares is, as a result of the distributions,
reduced below the investor's cost for such shares, and the distributions in
reality represent

<PAGE>

a return of a portion of the purchase price.

Upon a redemption (including a repurchase) of shares of the Fund, a
shareholder may realize a taxable gain or loss, depending upon the difference
between the redemption proceeds and the shareholder's tax basis in his shares.
Such gain or loss will be treated as capital gain or loss if the shares are
capital assets in the shareholder's hands and will be long-term or short-term,
depending upon the shareholder's tax holding period for the shares. Any loss
realized on a redemption may be disallowed to the extent the shares disposed of
are replaced with other shares of the Fund within a period of 61 days beginning
30 days before and ending 30 days after the shares are disposed of, such as
pursuant to automatic dividend reinvestments. In such a case, the basis of the
shares acquired will be adjusted to reflect the disallowed loss. Any loss
realized upon the redemption of shares with a tax holding period of six months
or less will be treated as a long-term capital loss to the extent of any amounts
treated as distributions of long-term capital gain with respect to such shares.

Different tax treatment, including penalties on certain excess
contributions and deferrals, certain pre-retirement and post-retirement
distributions and certain prohibited transactions, is accorded to accounts
maintained as qualified retirement plans. Shareholders should consult their tax
advisers for more information.

The foregoing discussion relates solely to U.S. Federal income tax law
as applicable to U.S. persons (i.e., U.S. citizens or residents and U.S.
domestic corporations, partnerships, trusts or estates) subject to tax under
such law. The discussion does not address special tax rules applicable to
certain classes of investors, such as tax-exempt entities, insurance companies,
and financial institutions. Dividends, capital gain distributions, and ownership
of or gains realized on the redemption (including an exchange) of Fund shares
may also be subject to state and local taxes. Shareholders should consult their
own tax advisers as to the Federal, state or local tax consequences of ownership
of shares of, and receipt of distributions from, the Fund in their particular
circumstances.

Non-U.S. investors not engaged in a U.S. trade or business with which
their investment in the Fund is effectively connected will be subject to U.S.
Federal income tax treatment that is different from that described above. These
investors may be subject to nonresident alien withholding tax at the rate of 30%
(or a lower rate under an applicable tax treaty) on amounts treated as ordinary
dividends from the Fund and, unless an effective IRS Form W-8 or authorized
substitute is on file, to 31% backup withholding on certain other payments from
the Fund. Non-U.S. investors should consult their tax advisers regarding such
treatment and the application of foreign taxes to an investment in the Fund.

<PAGE>

ADDITIONAL INFORMATION

The Fund's Prospectus and this Statement of Additional Information omit
certain information contained in the registration statement filed with the SEC,
which may be obtained from the SEC's principal office at 450 Fifth Street, N.W.,
Washington, D.C. 20549, upon payment of the fee prescribed by the rules and
regulations promulgated by the Commission.

EXPERTS AND FINANCIAL STATEMENTS

The Fund's financial statements for the fiscal years ended December 31,
1993 , 1994 and 1995 and the Portfolio's statement of assets and liabilities
dated [] 1996 included in this Statement of Additional Information have been
audited by Coopers & Lybrand L.L.P. and Coopers & Lybrand, respectively,
independent accountants, as set forth in their reports appearing elsewhere
herein, and have been so included in reliance upon the authority of the report
of such auditors as experts in accounting and auditing. The financial highlights
of the Fund for the fiscal year ended December 31, 1992 and for the period from
January 2, 1991 (commencement of operations) through December 31, 1991 were
audited by Deloitte & Touche LLP, independent auditors, and have been similarly
included in reliance upon the expertise of that firm. Coopers & Lybrand L.L.P.
and Coopers & Lybrand, independent accountants, will audit the Fund's and the
Portfolio's respective financial statements for the fiscal year ending December
31, 1996.

<PAGE>

SAW0007E
STANDISH, AYER & WOOD MASTER PORTFOLIO --
STANDISH EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES

March [], 1996

ASSETS:
Cash . . . . . . . . . . . . . . . . . . . . . . . .$100,100
Deferred organization expenses . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . .

LIABILITIES:
Accrued organization expenses . . . . . . . . . . .

Net assets . . . . . . . . . . . . . . . . .$100,100

NOTES:

(1) Standish, Ayer & Wood Master Portfolio, a master trust fund
organized under the laws of the State of New York, (the
"Portfolio Trust") was organized on January , 1996 and has
--
been inactive since that date with respect to Standish
Equity Portfolio (the "Portfolio") except for matters
relating to the Portfolio's establishment and designation as
a subtrust or series of the Portfolio Trust, and the sale of
a beneficial interest in the Portfolio at the purchase price
of $100,000 to Standish, Ayer & Wood Investment Trust --
Standish Equity Fund (the "Fund") and $100 to Standish, Ayer
& Wood, Inc. (the "Initial Interests"). The Portfolio is
one of four series of the Portfolio Trust.

(2) Organization expenses of the Portfolio are being deferred
and will be amortized on a straight-line basis over a period
not to exceed five years from the commencement of investment
operations of the Portfolio. The amount paid by the
Portfolio Trust on any withdrawal by the Fund, or any other
then-current holder of an Initial Interest, of part or all
of an Initial Interest in the Portfolio will be reduced by a
portion of any unamortized organization expenses of the
Portfolio, determined by the proportion of the amount of the
Initial Interest withdrawn to the aggregate amount of the
Initial Interests in the Portfolio then-outstanding after
taking into account any prior withdrawals of any of the
Initial Interests in the Portfolio.

(3) At 4:00 p.m., New York time, on each business day of the
Portfolio, the value of an investor's beneficial interest in
the Portfolio is equal to the product of (i) the aggregate
net asset value of the Portfolio multiplied by (ii) the
percentage representing that investor's share of the
aggregate beneficial interests in the Portfolio effective
for that day.

(4) The Portfolio Trust has entered into an Investment Advisory

<PAGE>

Agreement with Standish, Ayer & Wood, Inc. and an
Administration and Services Agreement with IBT Trust Company
(Cayman) Ltd.

<PAGE>

SAW0006G
MARCH 1, 1996

STANDISH FIXED INCOME FUND
ONE FINANCIAL CENTER
BOSTON, MASSACHUSETTS 02111
(800) 221-4795

STATEMENT OF ADDITIONAL INFORMATION

This Statement of Additional Information is not a prospectus, but
expands upon and supplements the information contained in the Prospectus dated
March 1, 1996, as amended and/or supplemented from time to time (the
"Prospectus"), of Standish Fixed Income Fund (the "Fund"), a separate investment
series of Standish, Ayer & Wood Investment Trust (the "Trust"). This Statement
of Additional Information should be read in conjunction with the Fund's
Prospectus, a copy of which may be obtained without charge by writing or calling
the Trust's principal underwriter, Standish Fund Distributors, L.P. (the
"Principal Underwriter"), at the address and phone number set forth above.

THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS
AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR
ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.

CONTENTS

Investment Objective and Policies
Investment Restrictions
Calculation of Performance Data
Management
Redemption of Shares
Portfolio Transactions
Determination of Net Asset Value
The Fund and Its Shares
The Portfolio and Its Investors
Taxation
Additional Information
Experts and Financial Statements
Financial Statements

<PAGE>

INVESTMENT OBJECTIVE AND POLICIES

As described in the Prospectus, the Fund seeks to achieve its
investment objective by investing all its investable assets in the Standish
Fixed Income Portfolio (the "Portfolio"), a series of Standish, Ayer & Wood
Master Portfolio (the "Portfolio Trust"), an open-end management investment
company. The Portfolio has the same investment objective and restrictions as the
Fund.

MONEY MARKET INSTRUMENTS AND REPURCHASE AGREEMENTS

Money market instruments include short-term U.S. Government securities,
commercial paper (promissory notes issued by corporations to finance their
short-term credit needs), negotiable certificates of deposit, nonnegotiable
fixed time deposits, bankers' acceptances and repurchase agreements.

U.S. Government securities include securities which are direct
obligations of the U.S. Government backed by the full faith and credit of the
United States, and securities issued by agencies and instrumentalities of the
U.S. Government, which may be guaranteed by the U.S. Treasury or supported by
the issuer's right to borrow from the U.S. Treasury or may be backed by the
credit of the federal agency or instrumentality itself. Agencies and
instrumentalities of the U.S. Government include, but are not limited to,
Federal Land Banks, the Federal Farm Credit Bank, the Central Bank for
Cooperatives, Federal Intermediate Credit Banks, Federal Home Loan Banks and the
Federal National Mortgage Association.

Investments in commercial paper will be rated Prime-1 by Moody's
Investors Service, Inc. ("Moody's") or A-1 by Standard & Poor's Ratings Group
("S&P") or Duff 1+ by Duff & Phelps, which are the highest ratings assigned by
these rating services (even if rated lower by one or more of the other
agencies), or which, if not rated or rated lower by one or more of the agencies
and not rated by the other agency or agencies, are judged by Standish, Ayer &
Wood, Inc. ("Standish" or the "Adviser"), the Portfolio's investment adviser, to
be of equivalent quality to the securities so rated.

A repurchase agreement is an agreement under which the

<PAGE>

Portfolio acquires money market instruments (generally U.S. Government
securities, bankers' acceptances or certificates of deposit) from a commercial
bank, broker or dealer, subject to resale to the seller at an agreed-upon price
and date (normally the next business day). The resale price reflects an
agreed-upon interest rate effective for the period the instruments are held by
the Portfolio and is unrelated to the interest rate on the instruments. The
instruments acquired by the Portfolio (including accrued interest) must have an
aggregate market value in excess of the resale price and will be held by the
custodian bank for the Portfolio until they are repurchased. The Trustees of the
Portfolio Trust will monitor the standards which the Adviser will use in
reviewing the credit worthiness of any party to a repurchase agreement with the
Portfolio.

STRATEGIC TRANSACTIONS

The Portfolio may, but is not required to, utilize various other
investment strategies as described below to hedge various market risks (such as
interest rates, currency exchange rates, and broad or specific equity or
fixed-income market movements), to manage the effective maturity or duration of
fixed-income securities, or to enhance potential gain. Such strategies are
generally accepted as part of modern portfolio management and are regularly
utilized by many mutual funds and other institutional investors. Techniques and
instruments used by the Portfolio may change over time as new instruments and
strategies are developed or regulatory changes occur.

<PAGE>

(collectively, all the above are called "Strategic Transactions"). Strategic
Transactions may be used in an attempt to protect against possible changes in
the market value of securities held in or to be purchased for the Portfolio's
portfolio resulting from securities markets or currency exchange rate
fluctuations, to protect the Portfolio's unrealized gains in the value of its
portfolio securities, to facilitate the sale of such securities for investment
purposes, to manage the effective maturity or duration of the Portfolio's
portfolio, or to establish a position in the derivatives markets as a temporary
substitute for purchasing or selling particular securities. In addition to the
hedging transactions referred to in the preceding sentence, Strategic
Transactions may also be used to enhance potential gain in circumstances where
hedging is not involved although the Portfolio's net loss exposure resulting
from Strategic Transactions entered into for such purposes will not exceed 3% of
the Portfolio's net assets at any one time and, to the extent necessary, the
Portfolio will close out transactions in order to comply with this limitation.
(Transactions such as writing covered call options are considered to involve
hedging for the purposes of this limitation.) In calculating the Portfolio's net
loss exposure from such Strategic Transactions, an unrealized gain from a
particular Strategic Transaction position would be netted against an unrealized
loss from a related Strategic Transaction position. For example, if the Adviser
anticipates that the Belgian franc will appreciate relative to the French franc,
the Portfolio may take a long forward currency position in the Belgian franc and
a short foreign currency position in the French franc. Under such circumstances,
any unrealized loss in the Belgian franc position would be netted against any
unrealized gain in the French franc position (and vice versa) for purposes of
calculating the Portfolio's net loss exposure. The ability of the Portfolio to
utilize these Strategic Transactions successfully will depend on the Adviser's
ability to predict pertinent market movements, which cannot be assured. The
Portfolio will comply with applicable regulatory requirements when implementing
these strategies, techniques and instruments. The Portfolio's activities
involving Strategic Transactions may be limited in order to enable the Fund to
comply with the requirements of Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code"), for qualification as a regulated investment
company.

RISKS OF STRATEGIC TRANSACTIONS

<PAGE>

or for prices higher than (in the case of purchases due to the exercise of put
options) or lower than (in the case of sales due to the exercise of call
options) current market values, limit the amount of appreciation the Portfolio
can realize on its investments or cause the Portfolio to hold a security it
might otherwise sell. The use of currency transactions can result in the
Portfolio incurring losses as a result of a number of factors including the
imposition of exchange controls, suspension of settlements, or the inability to
deliver or receive a specified currency. The use of options and futures
transactions entails certain other risks. In particular, the variable degree of
correlation between price movements of futures contracts and price movements in
the related portfolio position of the Portfolio creates the possibility that
losses on the hedging instrument may be greater than gains in the value of the
Portfolio's position. The writing of options could significantly increase the
Portfolio's portfolio turnover rate and, therefore, associated brokerage
commissions or spreads.
In addition, futures and options markets may not be liquid in all circumstances
and certain over-the-counter options may have no markets. As a result, in
certain markets, the Portfolio might not be able to close out a transaction
without incurring substantial losses, if at all. Although the use of futures and
options transactions for hedging should tend to minimize the risk of loss due to
a decline in the value of the hedged position, at the same time, in certain
circumstances, they tend to limit any potential gain which might result from an
increase in value of such position. The loss incurred by the Portfolio in
writing options on futures and entering into futures transactions is potentially
unlimited; however, as described above, the Portfolio will limit its net loss
exposure resulting from Strategic Transactions entered into for non-hedging
purposes to 3% of its net assets at any one time. Futures markets are highly
volatile and the use of futures may increase the volatility of the Fund's net
asset value. Finally, entering into futures contracts would create a greater
ongoing potential financial risk than would purchases of options where the
exposure is limited to the cost of the initial premium. Losses resulting from
the use of Strategic Transactions would reduce net asset value and the net
result may be less favorable than if the Strategic Transactions had not been
utilized.

COLLATERALIZED MORTGAGE OBLIGATIONS ("CMOS")

The Investment Company Act of 1940, as amended (the "1940 Act"), limits
the ability of one investment company to invest in the securities of another
investment company. The staff of the Securities and Exchange Commission (the
"SEC") takes the position that CMOs and certain other securitized assets are
investment companies for this purpose unless such issuers have complied with an
exemptive rule or have obtained orders from the SEC exempting them from all
provisions of the Act. The Portfolio intends to operate within the applicable
limitations. See the Prospectus for a further description of CMOs.

<PAGE>

GENERAL CHARACTERISTICS OF OPTIONS

Put options and call options typically have similar structural
characteristics and operational mechanics regardless of the underlying
instrument on which they are purchased or sold.

A put option gives the purchaser of the option, in consideration for
the payment of a premium, the right to sell, and the writer the obligation to
buy (if the option is exercised), the underlying security, commodity, index,
currency or other instrument at the exercise price. For instance, the
Portfolio's purchase of a put option on a security might be designed to protect
its holdings in the underlying instrument (or, in some cases, a similar
instrument) against a substantial decline in the market value by giving the
Portfolio the right to sell such instrument at the option exercise price. A call
option, in consideration for the payment of a premium, gives the purchaser of
the option the right to buy, and the seller the obligation to sell (if the
option is exercised), the underlying instrument at the exercise price. The
Portfolio may purchase a call option on a security, futures contract index,
currency or other instrument to seek to protect the Portfolio against an
increase in the price of the underlying instrument that it intends to purchase
in the future by fixing the price at which it may purchase such instrument. An
American style put or call option may be exercised at any time during the option
period while a European style put or call option may be exercised only upon
expiration or during a fixed period prior thereto. The Portfolio is authorized
to purchase and sell exchange listed options and over-the-counter options ("OTC"
options). Exchange listed options are issued by a regulated intermediary such as
the Options Clearing Corporation ("OCC"), which guarantees the performance of
the obligations of the parties to such options. The discussion below uses the
OCC as an example, but is also applicable to other financial intermediaries.

With certain exceptions, exchange listed options generally settle by
physical delivery of the underlying security or currency, although in the future
cash settlement may become available. Index options and Eurodollar instruments
are cash settled for the net amount, if any, by which the option is in-the-money
(i.e., where the value of the underlying instrument exceeds, in the case of a
call option, or is less than, in the case of a put option, the exercise price of
the option) at the time the option is exercised. Frequently, rather than taking
or making delivery of the underlying instrument through the process of
exercising the option, listed options are closed by entering

<PAGE>

into offsetting purchase or sale transactions that do not result
in ownership of the new option.

The hours of trading for listed options may not coincide with the hours
during which the underlying financial instruments are traded. To the extent that
the option markets close before the markets for the underlying financial
instruments, significant price and rate movements can take place in the
underlying markets that cannot be reflected in the option markets.

OTC options are purchased from or sold to securities dealers, financial
institutions or other parties ("Counterparties") through direct agreement with
the Counterparty. In contrast to exchange listed options, which generally have
standardized terms and performance mechanics, all the terms of an OTC option,
including such terms as method of settlement, term, exercise price, premium,
guarantees and security, are set by negotiation of the parties. The Portfolio
will generally sell (write) OTC options (other than OTC currency options) that
are subject to a buy-back provision permitting the Portfolio to require the
Counterparty to sell the option back to the Portfolio at a formula price within
seven days. (To the extent that the Portfolio does not do so, the OTC options
are subject to the Portfolio's restriction on illiquid securities.) The
Portfolio expects generally to enter into OTC options that have cash settlement
provisions, although it is not required to do so.

<PAGE>

A from S&P or Moody's or an equivalent rating from any other nationally
recognized statistical rating organization ("NRSRO") or the debt of which is
determined to be of equivalent credit quality by the Adviser. The staff of the
SEC currently takes the position that, absent the buy-back provisions discussed
above, OTC options purchased by the Portfolio, and portfolio securities
"covering" the amount of the Portfolio's obligation pursuant to an OTC option
sold by it (the cost of the sell-back plus the in-the-money amount, if any) are
illiquid, and are subject to the Portfolio's limitation on investing in illiquid
securities. However, for options written with "primary dealers" pursuant to an
agreement requiring a closing purchase transaction at a formula price, the
amount which is considered to be illiquid may be calculated by reference to a
formula price.

The Portfolio may purchase and sell (write) call options on securities
including U.S. Treasury and agency securities, mortgage-backed securities,
corporate debt securities, equity securities (including convertible securities)
and Eurodollar instruments that are traded on U.S. and foreign securities
exchanges and in the over-the-counter markets, and on securities indices,
currencies and futures contracts. All calls sold by the Portfolio must be
covered (i.e., the Portfolio must own the securities or the futures contract
subject to the call) or must meet the asset segregation requirements described
below as long as the call is outstanding. Even though the Portfolio will receive
the option premium to help offset any loss, the Portfolio may incur a loss if
the exercise price is below the market price for the security subject to the
call at the time of exercise. A call sold by the Portfolio also exposes the
Portfolio during the term of the option to possible loss of opportunity to
realize appreciation in the market price of the underlying security or
instrument and may require the Portfolio to hold a security or instrument which
it might otherwise have sold.

The Portfolio may purchase and sell (write) put options on securities
including U.S. Treasury and agency securities, mortgage backed securities,
foreign sovereign debt, corporate debt securities, equity securities (including
convertible securities) and Eurodollar instruments (whether or not it holds the
above securities in its portfolio), and on securities indices, currencies and
futures contracts. The Portfolio will not sell put options if, as a result, more
than 50% of the Portfolio's assets would be required to be segregated to cover
its potential obligations under such put options other than those with respect
to futures and options thereon. In selling

<PAGE>

put options, there is a risk that the Portfolio may be required to buy the
underlying security at a price above the market price.

OPTIONS ON SECURITIES INDICES AND OTHER FINANCIAL INDICES

The Portfolio may also purchase and sell (write) call and put options
on securities indices and other financial indices. Options on securities indices
and other financial indices are similar to options on a security or other
instrument except that, rather than settling by physical delivery of the
underlying instrument, they settle by cash settlement. For example, an option on
an index gives the holder the right to receive, upon exercise of the option, an
amount of cash if the closing level of the index upon which the option is based
exceeds, in the case of a call, or is less than, in the case of a put, the
exercise price of the option (except if, in the case of an OTC option, physical
delivery is specified). This amount of cash is equal to the differential between
the closing price of the index and the exercise price of the option, which also
may be multiplied by a formula value. The seller of the option is obligated, in
return for the premium received, to make delivery of this amount. In addition to
the methods described above, the Portfolio may cover call options on a
securities index by owning securities whose price changes are expected to be
similar to those of the underlying index, or by having an absolute and immediate
right to acquire such securities without additional cash consideration (or for
additional cash consideration held in a segregated account by its custodian)
upon conversion or exchange of other securities in its portfolio.

GENERAL CHARACTERISTICS OF FUTURES

The Portfolio's use of financial futures and options thereon will in
all cases be consistent with applicable regulatory requirements and in
particular the regulations of the

<PAGE>

Commodity Futures Trading Commission relating to exclusions from regulation as a
commodity pool operator. Those regulations currently provide that the Portfolio
may use commodity futures and option positions (i) for bona fide hedging
purposes without regard to the percentage of assets committed to margin and
option premiums, or (ii) for other purposes permitted by the SEC to the extent
that the aggregate initial margin and option premiums required to establish such
non-hedging positions (net of the amount that the positions were "in the money"
at the time of purchase) do not exceed 5% of the net asset value of the
Portfolio's portfolio, after taking into account unrealized profits and losses
on such positions. Typically, maintaining a futures contract or selling an
option thereon requires the Portfolio to deposit, with its custodian for the
benefit of a futures commission merchant as security for its obligations an
amount of cash or other specified assets (initial margin) which initially is
typically 1% to 10% of the face amount of the contract (but may be higher in
some circumstances). Additional cash or assets (variation margin) may be
required to be deposited directly with the futures commission merchant
thereafter on a daily basis as the value of the contract fluctuates. The
purchase of an option on financial futures involves payment of a premium for the
option without any further obligation on the part of the Portfolio. If the
Portfolio exercises an option on a futures contract it will be obligated to post
initial margin (and potential subsequent variation margin) for the resulting
futures position just it would for any position. Futures contracts and options
thereon are generally settled by entering into an offsetting transaction but
there can be no assurance that the position can be offset prior to settlement at
an advantageous price, nor that delivery will occur. The segregation
requirements with respect to futures contracts and options thereon are described
below.

CURRENCY TRANSACTIONS

The Portfolio may engage in currency transactions with Counterparties
in order to hedge the value of portfolio holdings denominated in particular
currencies against fluctuations in relative value or to enhance potential gain.
Currency transactions include currency contracts, exchange listed currency
futures, exchange listed and OTC options on currencies, and currency swaps. A
forward currency contract involves a privately negotiated obligation to purchase
or sell (with delivery generally required) a specific currency at a future date,
which may be any fixed number of days from the date of the contract agreed upon
by the parties, at a price set at the time of the contract. A currency swap is
an agreement to exchange cash flows based on the notional (agreed upon)
difference among two or more currencies and operates similarly to an interest
rate swap, which is described below. A Portfolio may enter into over-the-counter
currency transactions with Counterparties which have received, combined with any
credit enhancements, a long term debt rating of A by S&P or Moody's,
respectively, or that have an

<PAGE>

equivalent rating from NRSRO or (except for OTC currency options) are determined
to be equivalent credit quality by the Adviser.

The Portfolio's dealings in forward currency contracts and other
currency transactions such as futures, options, options on futures and swaps
will generally be limited to hedging involving either specific transactions or
portfolio positions. See "Strategic Transactions." Transaction hedging is
entering into a currency transaction with respect to specific assets or
liabilities of a Portfolio, which will generally arise in connection with the
purchase or sale of its portfolio securities or the receipt of income therefrom.
Position hedging is entering into a currency transaction with respect to
portfolio security positions denominated or generally quoted in that currency.

The Portfolio may also cross-hedge currencies by entering into
transactions to purchase or sell one or more currencies that are expected to
decline in value in relation to other currencies to which the Portfolio has or
in which the Portfolio expects to have portfolio exposure. For example, the
Portfolio may hold a French government bond and the Adviser may believe that
French francs will deteriorate against German marks. The Portfolio would sell
French francs to reduce its exposure to that currency and buy German marks. This
strategy would be a hedge against a decline in the value of French francs,
although it would expose the Portfolio to declines in the value of the German
mark relative to the U.S.

dollar.

<PAGE>

Adviser believes that the value of schillings will decline against the U.S.
dollar, the Adviser may enter into a contract to sell D-marks and buy dollars.
Proxy hedging involves some of the same risks and considerations as other
transactions with similar instruments. Currency transactions can result in
losses to the Portfolio if the Currency being hedged fluctuates in value to a
degree or in a direction that is not anticipated. Further, there is the risk
that the perceived linkage between various currencies may not be present or may
not be present during the particular time that the Portfolio is engaging in
proxy hedging. If the Portfolio enters into a currency hedging transaction, the
Portfolio will comply with the asset segregation requirements described below.

RISKS OF CURRENCY TRANSACTIONS

COMBINED TRANSACTIONS

The Portfolio may enter into multiple transactions, including multiple
options transactions, multiple futures transactions, multiple currency
transactions (including forward currency contracts) and multiple interest rate
transactions, structured notes and any combination of futures, options, currency
and interest rate transactions (component transactions), instead of a single
Strategic Transaction, as part of a single or combined strategy when, in the
opinion of the Adviser it is in the best interests of the Portfolio to do so. A
combined transaction will usually contain elements of risk that are present in
each of its component transactions. Although combined transactions are normally
entered into based on the Adviser's judgment that the combined strategies will
reduce risk or otherwise more effectively achieve the desired portfolio

<PAGE>

management goal, it is possible that the combination will instead increase such
risks or hinder achievement of the portfolio management objective.

SWAPS, CAPS, FLOORS AND COLLARS

Among the Strategic Transactions into which the Portfolio may enter are
interest rate, currency and index swaps and the purchase or sale of related
caps, floors and collars. The Portfolio expects to enter into these transactions
primarily for hedging purposes, including, but not limited to, preserving a
return or spread on a particular investment or portion of its portfolio,
protecting against currency fluctuations, as a duration management technique or
protecting against an increase in the price of securities the Portfolio
anticipates purchasing at a later date. Swaps, caps, floors and collars may also
be used to enhance potential gain in circumstances where hedging in not involved
although, as described above, the Portfolio's net loss exposure resulting from
swaps, caps, floors and collars and other Strategic Transactions entered into
for such purposes will not exceed 3% of the Portfolio's net assets at any one
time. The Portfolio will not sell interest rate caps or floors where it does not
own securities or other instruments providing the income stream the Portfolio
may be obligated to pay. Interest rate swaps involve the exchange by the
Portfolio with another party of their respective commitments to pay or receive
interest, e.g., an exchange of floating rate payments for fixed rate payments
with respect to a notional amount of principal. A currency swap is an agreement
to exchange cash flows on a notional amount of two or more currencies based on
the relative value differential among them and an index swap is an agreement to
swap cash flows on a notional amount based on changes in the values of the
reference indices. The purchase of a cap entitles the purchaser to receive
payments on a notional principal amount from the party selling such cap to the
extent that a specified index exceeds a predetermined interest rate or amount.
The purchase of a floor entitles the purchaser to receive payments on a notional
principal amount from the party selling such floor to the extent that a
specified index falls below a predetermined interest rate or amount. A collar is
a combination of a cap and a floor that preserves a certain rate of return
within a predetermined range of interest rates or values.

<PAGE>

Counterparty issues debt that is determined to be of equivalent credit quality
by the Adviser. If there is a default by the Counterparty, the Portfolio may
have contractual remedies pursuant to the agreements related to the transaction.
The swap market has grown substantially in recent years with a large number of
banks and investment banking firms acting both as principals and as agents
utilizing standardized swap documentation. As a result, the swap market has
become relatively liquid. Caps, floors and collars are more recent innovations
for which standardized documentation has not yet been fully developed. Swaps,
caps, floors and collars are considered illiquid for purposes of the Portfolio's
policy regarding illiquid securities, unless it is determined, based upon
continuing review of the trading markets for the specific security, that such
security is liquid. The Board of Trustees of the Portfolio Trust has adopted
guidelines and delegated to the Adviser the daily function of determining and
monitoring the liquidity of swaps, caps, floors and collars. The Portfolio
Trust's Board of Trustees, however, retains oversight focusing on factors such
as valuation, liquidity and availability of information and is ultimately
responsible for such determinations. The staff of the SEC currently takes the
position that swaps, caps, floors and collars are illiquid, and are subject to
the Portfolio's limitation on investing in illiquid securities.

EURODOLLAR CONTRACTS

The Portfolio may make investments in Eurodollar contracts. Eurodollar
contracts are U.S. dollar-denominated futures contracts or options thereon which
are linked to the London Interbank Offered Rate ("LlBOR"), although foreign
currency-denominated instruments are available from time to time.
Eurodollar futures contracts enable purchasers to obtain a fixed rate for the
lending of funds and sellers to obtain a fixed rate for borrowings. The
Portfolio might use Eurodollar futures contracts and options thereon to hedge
against changes in LIBOR, to which many interest rate swaps and fixed income
instruments are linked.

RISKS OF STRATEGIC TRANSACTIONS OUTSIDE THE UNITED STATES

<PAGE>

requirements than in the United States, (iv) lower trading volume and liquidity,
and (v) other complex foreign political, legal and economic factors. At the same
time, Strategic Transactions may offer advantages such as trading in instruments
that are not currently traded in the United States or arbitrage possibilities
not available in the United States.

USE OF SEGREGATED ACCOUNTS

The Portfolio will hold securities or other instruments whose values
are expected to offset its obligations under the Strategic Transactions. The
Portfolio will cover Strategic Transactions as required by interpretive
positions of the SEC. The Portfolio will not enter into Strategic Transactions
that expose the Portfolio to an obligation to another party unless it owns
either (i) an offsetting position in securities or other options, futures
contracts or other instruments or (ii) cash, receivables or liquid, high grade
debt securities with a value sufficient to cover its potential obligations. The
Portfolio may have to comply with any applicable regulatory requirements for
Strategic Transactions, and if required, will set aside cash and other assets in
a segregated account with its custodian bank in the amount prescribed. In that
case, the Portfolio's custodian would maintain the value of such segregated
account equal to the prescribed amount by adding or removing additional cash or
other assets to account for fluctuations in the value of the account. Assets
held in a segregated account would not be sold while the Strategic Transaction
is outstanding, unless they are replaced with similar assets. As a result, there
is a possibility that segregation of a large percentage of the Portfolio's
assets could impede portfolio management or the Portfolio's ability to meet
redemption requests or other current obligations.

"WHEN-ISSUED" AND "DELAYED DELIVERY SECURITIES"

The Portfolio may commit up to 15% of its net assets to purchase
securities on a "when-issued" and "delayed delivery" basis, which means that
delivery and payment for the securities will normally take place 15 to 45 days
after the date of the transaction. The payment obligation and interest rate on
the securities are fixed at the time the Portfolio enters into the commitment,
but interest will not accrue to the Portfolio until delivery of and payment for
the securities. Although the Portfolio will only make commitments to purchase
"when-issued" and "delayed delivery" securities with the intention of actually
acquiring the securities, the Portfolio may sell the securities before the
settlement date if deemed advisable by the Adviser.

Unless the Portfolio has entered into an offsetting
agreement to sell the securities purchased on a when-issued or

<PAGE>

forward commitment basis, cash or liquid, high-grade debt obligations with a
market value at least equal to the amount of the Portfolio's commitment will be
segregated with the Portfolio's custodian bank. If the market value of these
securities declines, additional cash or securities will be segregated daily so
that the aggregate market value of the segregated securities equals the amount
of the Portfolio's commitment.

Securities purchased on a "when-issued" and "delayed delivery" basis
may have a market value on delivery which is less than the amount paid by the
Portfolio. Changes in market value may be based upon the public's perception of
the creditworthiness of the issuer or changes in the level of interest rates.
Generally, the value of "when-issued" securities will fluctuate inversely to
changes in interest rates, i.e., they will appreciate in value when interest
rates fall and will depreciate in value when interest rates rise.

PORTFOLIO TURNOVER

It is not the policy of the Portfolio to purchase or sell securities
for trading purposes. However, the Portfolio places no restrictions on portfolio
turnover and it may sell any portfolio security without regard to the period of
time it has been held, except as may be necessary to enable the Fund to maintain
its status as a regulated investment company under the Code. The Portfolio may
therefore generally change its portfolio investments at any time in accordance
with the Adviser's appraisal of factors affecting any particular issuer or
market, or the economy in general. A rate of turnover of 100% would occur if the
value of the lesser of purchases and sales of portfolio securities for a
particular year equaled the average monthly value of portfolio securities owned
during the year (excluding short-term securities). A high rate of portfolio
turnover (100% or more) involves a correspondingly greater amount of brokerage
commissions and other costs which must be borne directly by the Portfolio and
thus indirectly by its shareholders. It may also result in the realization of
larger amounts of net short-term capital gains, which (when allocated to and
distributed by the Fund) are taxable to its shareholders as ordinary income and
may, under certain circumstances, make it more difficult for the Fund to qualify
as a regulated investment company under the Code.

INVESTMENT RESTRICTIONS

<PAGE>

"vote of the outstanding voting securities" of the Fund or the Portfolio, as the
case may be, which phrase as used herein means the lesser of (i) 67% or more of
the voting securities of the Fund or the Portfolio present at a meeting, if the
holders of more than 50% of the outstanding voting securities of the Fund or the
Portfolio are present or represented by proxy, or (ii) more than 50% of the
outstanding voting securities of the Fund or the Portfolio.

1. Invest, with respect to at least 75% of its total assets, more than 5%
in the securities of any one issuer (other than the U.S. Government,
its agencies or instrumentalities) or acquire more than 10% of the
outstanding voting securities of any issuer.

2. Issue senior securities, borrow money or securities or
pledge or mortgage its assets, except that the Fund may
(a) borrow money from banks as a temporary measure for
extraordinary or emergency purposes (but not for investment
purposes) in an amount up to 15% of the current value of its
total assets, (b) enter into forward roll transactions, and
(c) pledge its assets to an extent not greater than 15% of
the current value of its total assets to secure such
borrowings; however, the Fund may not make any additional
investments while its outstanding bank borrowings exceed 5%
of the current value of its total assets.

3. Lend portfolio securities.

4. Invest more than 25% of the current value of its total assets in any
single industry, provided that this restriction shall not apply to U.S.
Government securities, including mortgage pass-through securities
(GNMAs).

5. Underwrite the securities of other issuers, except to the extent that,
in connection with the disposition of portfolio securities, the
Portfolio (Fund) may be deemed to be an underwriter under the
Securities Act of 1933.

6. Purchase real estate or real estate mortgage loans, although the
Portfolio (Fund) may purchase marketable securities of companies which
deal in real estate, real estate mortgage loans or interests therein.

7. Purchase securities on margin (except that the
Portfolio (Fund) may obtain such short-term credits as may

<PAGE>

be necessary for the clearance of purchases and sales of
securities).

8. Purchase or sell commodities or commodity contracts except that the
Portfolio (Fund) may purchase and sell financial futures contracts and
options on financial futures contracts and engage in foreign currency
exchange transactions.

The following restrictions are not fundamental policies and may be
changed by the Trustees of the Portfolio Trust (Trust) without investor approval
in accordance with applicable laws, regulations or regulatory policy. The
Portfolio (Fund) may not (except that the Fund may invest substantially all of
its assets (other than assets which are not "investment securities," as defined
in the 1940 Act, or are excepted by the SEC) in an open-end management
investment company with substantially the same investment objective as the
Fund):

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

c. Purchase securities of any other investment company except
as part of a merger, consolidation or acquisition of assets.

d. Purchase or write options, except as described under
"Strategic Transactions."

e. Invest in interests in oil, gas or other exploration or
development programs.

f. Invest more than 5% of the assets of the Portfolio (Fund) in the
securities of any issuers which together with their corporate parents
have records of less than three years' continuous operation, including
the operation of any predecessor, other than obligations issued or
guaranteed by the U.S. Government or its agencies, and securities fully
collateralized by such securities.

g. Invest in securities of any company if any officer or director
(Trustee) of the Portfolio Trust (Trust) or of the Portfolio's
investment adviser owns more than 1/2 of 1% of the outstanding
securities of such company and such officers and directors (Trustees)
own in the aggregate more than 5% of the securities of such company.

h. Invest more than an aggregate of 15% of the net assets of the Portfolio
(Fund) in (a) repurchase agreements which are not terminable within
seven days, (b) securities subject to legal or contractual restrictions
on resale or for which there are no readily available market quotations
and (c) other illiquid securities, including nonnegotiable fixed time
deposits.

i. Invest more than 5% of its net assets in repurchase
agreements (this restriction is fundamental with respect to
the Fund, but not the Portfolio).

If any percentage restriction described above is adhered to at the time
of investment, a subsequent increase or decrease in the percentage resulting
from a change in the value of the Portfolio's (Fund's) assets will not
constitute a violation of the restriction, except with respect to restriction
(g) above.

CALCULATION OF PERFORMANCE DATA

As indicated in the Prospectus, the Fund may, from time to

<PAGE>

time, advertise certain total return and yield information. The average annual
total return of the Fund for a period is computed by subtracting the net asset
value per share at the beginning of the period from the net asset value per
share at the end of the period (after adjusting for the reinvestment of any
income dividends and capital gain distributions), and dividing the result by the
net asset value per share at the beginning of the period. In particular, the
average annual total return of the Fund ("T") is computed by using the
redeemable value at the end of a specified period of time ("ERV") of a
hypothetical initial investment of $1,000 ("P") over a period of time ("n")
according to the formula P(1+T)n=ERV. The average annual total return quotations
for the Fund for the one and five year periods ended December 31, 1995 are
18.54% and 10.21%, respectively, and since inception (March 27, 1987 to December
31, 1995) is 9.46%. The Fund's average annualized yield for the thirty day
period ended December 31, 1995 was %.

The yield of the Fund is computed by dividing the net investment income
per share earned during the period stated in the advertisement by the maximum
offering price per share on the last day of the period. For the purpose of
determining net investment income, the calculation includes, among expenses of
the Fund, all recurring fees that are charged to all shareholder accounts and
any non-recurring charges for the period stated. In particular, yield is
determined according to the following formula:

Yield = 2[(A - B + 1)6 - 1]
CD

Where: A equals dividends and interest earned during the period; B
equals net expenses accrued for the period; C equals average daily number of
shares outstanding during the period that were entitled to receive dividends; D
equals the maximum offering price per share on the last day of the period.

The Fund may also quote non-standardized yield, such as
yield-to-maturity ("YTM"). YTM represents the rate of return an investor will
receive if a long-term, interest bearing investment, such as a bond, is held to
its maturity date. YTM does not take into account purchase price, redemption
value, time to maturity, coupon yield, and the time between interest payments.

In addition to average annual return quotations, the Fund may quote
quarterly and annual performance on a net (with management and administration
fees deducted) and gross basis as follows:
<TABLE>
<CAPTION>

QUARTER/YEAR NET GROSS
<S> <C> <C>
2Q87 (1.14)% (0.95)%
3Q87 (2.16) (2.04)

<PAGE>

4Q87 4.15 4.30
1987 0.74 1.20
1Q88 4.36 4.52
2Q88 1.18 1.29
3Q88 1.98 2.11
4Q88 0.78 0.91
1988 8.53 9.09
1Q89 1.23 1.37
2Q89 7.57 7.70
3Q89 1.13 1.26
4Q89 3.30 3.42
1989 13.76 14.33
1Q90 (0.50) (0.38)
2Q90 3.69 3.84
3Q90 0.89 1.00
4Q90 4.95 5.06
1990 9.23 9.77
1Q91 3.16 3.28
2Q91 1.71 1.84
3Q91 6.19 6.29
4Q91 5.58 5.68
1991 17.65 18.15
1Q92 (0.95) (0.84)
2Q92 4.95 5.04
3Q92 3.43 3.53
4Q92 (0.58) (0.47)
1992 6.88 7.33
1Q93 5.88 5.98
2Q93 3.42 3.52
3Q93 3.42 3.52
4Q93 1.23 1.33
1993 14.64 15.08
1Q94 (3.99) (3.90)
2Q94 (1.88) (1.78)
3Q94 0.67 0.77
4Q94 0.32 0.42
1994 (4.86) (4.48)
1Q95 4.39 4.48
2Q95 5.91 6.01
3Q95 2.46 2.56
4Q95 4.64 4.73
1995 18.54 18.97

</TABLE>

These performance quotations should not be considered as representative
of the Fund's performance for any specified period in the future.

The Fund's performance may be compared in sales literature to the
performance of other mutual funds having similar objectives or to standardized
indices or other measures of investment performance. In particular, the Fund may
compare its performance to the Lehman Government/Corporate Index, which is
generally considered to be representative of the performance of all domestic,
dollar denominated, fixed rate, investment grade bonds, and the Lehman Brothers
Aggregate Index which is composed of securities from the Lehman Brothers
Government/Corporate Bond Index, Mortgage Backed Securities Index and Yankee
Bond Index, and is generally considered to be representative of all unmanaged,
domestic, dollar denominated, fixed rate investment grade bonds. Comparative
performance may also be expressed by reference to a ranking prepared by a mutual
fund monitoring

<PAGE>

service or by one or more newspapers, newsletters or financial periodicals.
Performance comparisons may be useful to investors who wish to compare the
Fund's past performance to that of other mutual funds and investment products.
Of course, past performance is not a guarantee of future results.

MANAGEMENT

TRUSTEES AND OFFICERS OF THE TRUST AND PORTFOLIO TRUST

The Trustees and executive officers of the Trust are listed below. The
Trustees of the Portfolio Trust are identical to the Trustees of the Trust. The
officers of the Portfolio Trust are Messrs. Clayson, Ladd, Wood, Hollis and
Murray, and Mss. Banfield, Herrmann and Kneeland, who hold the same office with
the Portfolio Trust as with the Trust. All executive officers of the Trust and
the Portfolio Trust are affiliates of Standish, Ayer & Wood, Inc., the
Portfolio's investment adviser.

NAME , ADDRESS POSITION HELD PRINCIPAL OCCUPATION
AND DATE OF BIRTH WITH TRUST DURING PAST 5 YEARS

<S> <C> <C>
Samuel C. Fleming, 9/30/40 Trustee Chairman of the Board and
c/o Decision Resources, Inc. Chief Executive Officer,
1100 Winter Street Decision Resources, Inc.;
Waltham, MA 02154 through 1989, Senior V.P.
Arthur D. Little

Benjamin M. Friedman, 8/5/44 Trustee William Joseph Maier
c/o Harvard University Professor of Political
Cambridge, MA 02138 Economy, Harvard
University

John H. Hewitt, 4/11/35 Trustee Trustee, The Peabody
P.O. Box 307 Foundation; Trustee,
So. Woodstock, VT 05071 Visiting Nurse Alliance of
Vermont and New Hampshire
Edward H. Ladd*, 1/3/38 Trustee and Chairman of the Board and
c/o Standish, Ayer & Wood, Inc. Vice President Managing Director,
One Financial Center Standish, Ayer & Wood, Inc.
Boston, MA 02111 since 1990; formerly,
President of Standish, Ayer
& Wood, Inc.

Richard C. Doll, 7/8/48 Vice President Vice President and
c/o Standish, Ayer & Wood, Inc. Director, Standish, Ayer
One Financial Center & Wood, Inc.
Boston, MA 02111

<PAGE>

NAME, ADDRESS POSITION HELD PRINCIPAL OCCUPATION
AND DATE OF BIRTH WITH TRUST DURING PAST 5 YEARS
- ----------------- --------------- -------------------

James E. Hollis III, 11/21/48 Executive Vice Vice President and
c/o Standish, Ayer & Wood, Inc. President Director, Standish, Ayer
One Financial Center & Wood, Inc.
Boston, MA 02111

David W. Murray, 5/5/40 Treasurer and Vice President, Treasurer
c/o Standish, Ayer & Wood, Inc. Secretary and Director, Standish,
One Financial Center Ayer & Wood, Inc.
Boston, MA 02111

Caleb F. Aldrich, 9/20/57 Vice President Vice President and
c/o Standish, Ayer & Wood, Inc. Director, Standish, Ayer
One Financial Center & Wood, Inc.
Boston, MA 02111

Nicholas S. Battelle, 6/24/42 Vice President Vice President and
c/o Standish, Ayer & Wood, Inc. Director, Standish, Ayer
One Financial Center & Wood, Inc.
Boston, MA 02111

David H. Cameron, 11/2/55 Vice President Vice President and
c/o Standish, Ayer & Wood, Inc. Director, Standish, Ayer
One Financial Center & Wood, Inc.
Boston, MA 02111

Karen K. Chandor, 2/13/50 Vice President Vice President and
c/o Standish, Ayer & Wood, Inc. Director, Standish, Ayer
One Financial Center & Wood, Inc.
Boston, MA 02111

Lavinia B. Chase, 6/4/46 Vice President Vice President, Standish,
c/o Standish, Ayer & Wood, Inc. Ayer & Wood, Inc.
One Financial Center
Boston, MA 02111

Susan B. Coan, 5/1/52 Vice President Vice President, Standish,
c/o Standish, Ayer & Wood, Inc. Ayer & Wood, Inc.
One Financial Center
Boston, MA 02111

W. Charles Cook II, 7/16/63 Vice President Vice President, Standish,
c/o Standish, Ayer & Wood, Inc. Ayer & Wood, Inc.
One Financial Center
Boston, MA 02111

<PAGE>

NAME, ADDRESS POSITION HELD PRINCIPAL OCCUPATION
AND DATE OF BIRTH WITH TRUST DURING PAST 5 YEARS
- ----------------- --------------- -------------------

Joseph M. Corrado, 5/13/55 Vice President Vice President, Standish,
c/o Standish, Ayer & Wood, Inc. Ayer & Wood, Inc.
One Financial Center
Boston, MA 02111

Dolores S. Driscoll, 2/17/48 Vice President Vice President and Managing
c/o Standish, Ayer & Wood, Inc. Director, Standish, Ayer
One Financial Center & Wood, Inc.
Boston, MA 02111