SUPPLEMENT Dated March 7, 1996
TO THE PROSPECTUS OF
STANDISH TAX-SENSITIVE EQUITY FUND ("EQUITY FUND")
STANDISH SMALL CAP TAX-SENSITIVE EQUITY FUND ("SMALL CAP FUND")
STANDISH INTERMEDIATE TAX EXEMPT BOND FUND ("TAX EXEMPT FUND")
Dated January 1, 1996
Effective until March 31, 1996, Standish, Ayer & Wood, Inc. (the
"Adviser") has voluntarily agreed to limit the Equity Fund's and the Small Cap
Fund's Total Fund Operating Expenses (excluding litigation, indemnification and
other extraordinary expenses) to 0.00% of each such Fund's average daily net
assets.
The following table replaces the table captioned "Annual Fund Operating
Expenses" on page 3 of the attached Prospectus:
<TABLE>
<CAPTION>
Equity Small Cap Tax Exempt
Fund Fund Fund
---- ---- ----
<S> <C> <C> <C>
Annual Fund Operating Expenses
(as a percentage of average net assets)
Management Fees (after fee reduction)+ 0.00% 0.00% 0.16%
12b-1 Fees None None None
Other Expenses (after expense limitation)+ 0.00% 0.00% 0.49%
Total Fund Operating Expenses
(after expense limitation)+ 0.00% 0.00% 0.65%
===== ===== =====
</TABLE>
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The following footnote to the above table replaces the footnotes on
page 4 of the attached Prospectus:
+ The Adviser has voluntarily agreed until March 31, 1996 to limit the
Equity Fund's and the Small Cap Fund's Total Fund Operating Expenses (excluding
litigation, indemnification and other extraordinary expenses) to 0.00% of each
such Fund's average daily net assets. In addition, the Adviser has voluntarily
agreed to limit each Fund's Total Fund Operating Expenses (excluding litigation,
indemnification and other extraordinary expenses) to the following percentages
of each Fund's average daily net assets for the Fund's fiscal year ending
September 30, 1996: Equity Fund-- 1.00%; Small Cap Fund--0.90% and Tax Exempt
Fund--0.65%. These agreements are voluntary and temporary and may be
discontinued or revised by the Adviser at any time after September 30, 1996. If
the Adviser had not agreed to the limits described above, Management Fees, Other
Expenses and Total Fund Operating Expenses are estimated to be 0.50%, 0.30% and
0.80%, respectively, of the Equity Fund's average daily net assets and 0.60%,
0.25% and 0.85%, respectively, of the Small Cap Fund's average daily net assets
for the fiscal year ending September 30, 1996 and would have been 0.40%, 0.49%
and 0.89%, respectively, of the Tax Exempt Fund's average daily net assets for
the fiscal year ended December 31, 1995. On February 9, 1996, the Tax Exempt
Fund changed its fiscal year end from December 31 to September 30.
1
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The following Example replaces the Example contained on page 4 of the
attached Prospectus:
Example: Hypothetically assume that each Fund's annual return is 5% and that its
operating expenses are exactly as just described. For every $1,000 you invested,
you would have paid the following expenses if you closed your account after the
number or years indicated:
2
<PAGE>
Equity Small Cap Tax Exempt
Fund Fund Fund
---- ---- ----
After 1 Year $ 4 $ 4 $ 6
After 3 Years $19 $19 $12
After 5 Years N/A N/A $36
After 10 Years N/A N/A $81
------------------------
Effective immediately, Standish Fund Distributors, L.P. (the "Principal
Underwriter"), One Financial Center, Boston, Massachusetts 02111, serves as the
Principal Underwriter of the Funds' shares.
The following information replaces the information contained under the
caption "Purchase of Shares," "Exchange of Shares" and "Redemption of Shares" on
pages 14, 15 and 16 of the attached Prospectus:
PURCHASE OF SHARES
Shares of the Funds may be purchased directly from the Principal
Underwriter, which offers shares of the Funds to the public on a continuous
basis. Shares are sold at the net asset value per share next computed after the
purchase order and payment for the shares is received in good order by the
Principal Underwriter and payment for the shares is received by the Funds'
custodian. Please see the Funds' account application or call the Principal
Underwriter for instructions on how to make payment of shares to the Funds'
custodian. Unless waived by the Funds, the minimum initial investment is
$100,000. Additional investments may be made in amounts of at least $10,000
($5,000 for the Tax Exempt Fund).
Shares of the Funds 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 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 Funds' 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 Funds purchased through dealers may be subject to transaction
fees, no part of which will be received by the Funds, the Principal Underwriter
or the Adviser.
3
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Each 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 time). The net asset value per share is calculated
by determining the value of all of a Fund's assets, subtracting all liabilities
and dividing the result by the total number of shares outstanding. Equity and
other taxable 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. Equity and other taxable 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. Municipal securities are
valued by the Adviser or by an independent pricing service approved by the
Trustees, which uses information with respect to transactions in bonds,
quotations from bond dealers, market transactions in comparable securities and
various relationships between securities in determining value. The Tax Exempt
Fund believes that reliable market quotations for municipal securities are
generally not readily available for purposes of valuing its portfolio
securities. As a result, it is likely that most of the valuations of municipal
securities made by the Adviser or provided by such pricing service will be based
upon fair value determined on the basis of the factors listed above (which may
also include use of yield equivalents or matrix pricing). 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. Money market instruments with less than sixty days
remaining to maturity when acquired by a Fund are valued on an amortized cost
basis. If a Fund 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 its value on such date unless the Trustees determine during such sixty-day
period that amortized cost does not represent fair value. Additional information
concerning the Funds' valuation policies is contained in the Statement of
Additional Information.
Prospective investors should consider the tax implications of buying
shares of a Fund prior to an anticipated taxable dividend or capital gain
distribution from that Fund. A portion of the purchase price of such shares may
be attributable to the taxable income already earned by the Fund and/or net
capital gains already realized by the Fund that will be included in the
anticipated distribution. The distribution will, nevertheless, generally be
taxable to the investor even if it reduces the net asset value of the Fund's
shares below the investor's cost and economically represents a return of a
portion of the investor's purchase price.
In the sole discretion of the Adviser, each Fund may accept securities
instead of cash for the purchase of Fund shares. The Adviser will determine that
any securities acquired in this manner are consistent with the investment
objective, policies and restrictions of the particular Fund. 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.
Consequently, prospective investors should consult with their own tax advisers
before acquiring Fund shares in exchange for appreciated or depreciated
securities in order to evaluate fully the effect on their particular tax
situations.
The Trust reserves the right in its sole discretion (i) to suspend the
offering of each Fund's shares, (ii) to reject purchase orders when in the best
interest of the particular Fund and (iii) to modify or eliminate the minimum
initial investment requirement in Fund shares. The Funds' investment minimums 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 Funds' investment minimums
apply to the aggregate value invested in omnibus accounts rather than to the
investment of underlying participants in such omnibus accounts.
4
<PAGE>
EXCHANGE OF SHARES
Shares of the Funds may be exchanged for shares of one or more other
funds in the Standish, Ayer & Wood family of funds. Shares of the Funds redeemed
in an exchange transaction are valued at their net asset value next determined
after the exchange request is received by the Principal Underwriter. 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 Principal Underwriter
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.
Written Exchanges
Shares of the Funds 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 elected telephonic privileges may exchange shares by
calling the Principal Underwriter at (800) 221-4795. Telephonic privileges are
not available to shareholders automatically. 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 Funds' custodian. 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 Funds may be redeemed by any of the methods described
below at the net asset value per share next determined after receipt by the
Principal Underwriter 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.
5
<PAGE>
Written Redemption
Shares of the Funds 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) 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 Funds' 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, a 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 elect telephonic privileges may redeem shares by
calling the Principal Underwriter at (800) 221-4795. Telephonic privileges are
not available to shareholders automatically. 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. 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, 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. Wire charges, if any,
will be deducted from redemption proceeds. Proper identification will be
required for each telephonic redemption.
Repurchase Order
In addition to telephonic and written redemption of Fund shares, the
Principal Underwriter may accept telephone orders from brokers or dealers for
the repurchase of Fund shares. The repurchase price is the net asset value per
share next determined after receipt of the repurchase order by the Principal
Underwriter and the payment for the shares by the Funds' 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 and dealers may charge for their services in connection with a
repurchase of Fund shares, but none of the Funds 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 Funds and the Funds' 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 Funds employ reasonable
procedures to confirm that telephonic instructions are genuine, and follow
telephonic instructions that they reasonably believe to be genuine, neither the
Adviser, nor the Principal Underwriter, nor the Trust, nor any of the Funds, nor
the Funds' 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 Funds intend to
employ personal identification or written confirmation of transactions
procedures, and if they do not, the Funds 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.
6
<PAGE>
* * * *
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 applicable
Fund's portfolio investments at the time of redemption or repurchase. Each Fund
intends to pay cash for all shares redeemed, but under certain conditions, the
Funds may make payments wholly or partially in portfolio securities. Please see
the Statement of Additional Information for further information regarding the
Funds' ability to satisfy redemption requests in-kind.
Because of the cost of maintaining shareholder accounts, the Funds may
redeem, at net asset value, the shares in any account that has a value of less
than $25,000 ($10,000 for the Tax Exempt Fund) as a result of redemptions or
transfers. Before doing so, the applicable 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
that will increase the value of the account to at least $25,000 ($10,000 for the
Tax Exempt Fund). The Funds may eliminate duplicate mailings of Fund materials
to shareholders that have the same address of record.
7
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SUPPLEMENT Dated March 7, 1996
TO THE STATEMENT OF ADDITIONAL INFORMATION OF
STANDISH TAX-SENSITIVE EQUITY FUND ("EQUITY FUND")
STANDISH SMALL CAP TAX-SENSITIVE EQUITY FUND ("SMALL CAP FUND")
STANDISH INTERMEDIATE TAX EXEMPT BOND FUND ("TAX EXEMPT FUND")
Dated January 1, 1996
Effective immediately, Standish Fund Distributors, L.P., One Financial
Center, Boston, Massachusetts 02111, serves as the principal underwriter of the
Funds' shares. The following information supplements the disclosure contained
under the caption "Management" in the attached Statement of Additional
Information:
Distributor of the Trust
Standish Fund Distributors, L.P. (the "Principal Underwriter"), an
affiliate of the Adviser, serves as the Trust's exclusive principal underwriter
and holds itself available to receive purchase orders for the Funds' shares. In
that capacity, the Principal Underwriter has been granted the right, as agent of
the Trust, to solicit and accept orders for the purchase of the Funds' shares in
accordance with the terms of the Underwriting Agreement between the Trust and
the Principal Underwriter. Pursuant to the Underwriting Agreement, the Principal
Underwriter has agreed to use its best efforts to obtain orders for the
continuous offering of the Funds' shares. The Principal Underwriter receives no
commissions or other compensation for its services, and has not received any
such amounts in any prior year. The Underwriting Agreement shall continue in
effect with respect to a Fund until two years after its execution and for
successive periods of one year thereafter only if it is approved at least
annually thereafter (i) by a vote of the holders of a majority of the Fund's
outstanding shares or by the Trustees of the Trust or (ii) by a vote of a
majority of the Trustees of the Trust who are 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 with respect to a Fund 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 applicable 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.
