SUPPLEMENT dated October 20, 1997
TO THE PROSPECTUS OF
STANDISH TAX-SENSITIVE EQUITY FUND
STANDISH SMALL CAP TAX-SENSITIVE EQUITY FUND
STANDISH INTERMEDIATE TAX EXEMPT BOND FUND
Dated January 27, 1997
The Tax-Sensitive Funds
The following supplements the description of the Tax-Sensitive Funds
under the caption "Investment Objectives and Policies -- The Tax-Sensitive
Funds" on page 9 of the Prospectus:
The Tax-Sensitive Funds are designed for investors in the upper federal
income tax brackets who seek the highest long-term after-tax total return.
The Taxpayer Relief Act of 1997 (the "Act") was recently enacted into
law and establishes different maximum rates of taxation for individuals on
long-term capital gains. Prior to the Act, long-term capital gains distributed
to individuals by mutual funds were taxed at federal tax rates of up to 28%.
Subject to future Treasury regulations, such gains recognized after May 6,1997
should be generally taxable to individual upper-bracket investors at the maximum
federal tax rates of either (i)28% if the assets were held for more than one
year but not more than 18 months or (ii)20% if the assets were held more than 18
months. Taxable dividends, other than from long-term capital gains, distributed
to individuals by mutual funds continue to taxable at federal income tax rates
of up to 39.6%, and the effective tax rate may be higher due to limitations at
higher income levels on allowable deductions and exemptions. Shareholders should
consult their own tax advisers about the effects of the Act in light of their
particular circumstances.
The Tax Sensitive Funds employ various techniques to seek the highest
long-term total return after considering the impact of federal income taxes paid
by shareholders on the Funds' distributions. In addition to those techniques
described on page7 of the Prospectus, when required to sell portfolio securities
that will produce capital gains, each Tax-Sensitive Fund will select shares of
the specific security with holding periods longer than 18 months (if any) when
appropriate in order to allow individual investors in the Funds to benefit from
the lower capital gains tax rate.
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Standish Small Cap Tax-Sensitive Equity Fund
The following sentence replaces the first sentence of the second
paragraph under the caption "Standish Small Cap Tax-Sensitive Equity Fund --
Investment Policies" on page 8 of the Prospectus:
The common stocks of small capitalization growth companies in which the Small
Cap Fund purchases have market capitalizations of up to and including $1 billion
The following sentence replaces the last sentence of the second
paragraph under the caption "Risk Factors, Suitability and Other Investment
Practices -- Investing in Small Capitalization Companies" on page 9 of the
Prospectus:
The Small Cap Fund will participate in initial public offerings of companies
that are expected to have market capitalizations of up to $1 billion after
consummation of the offering.
The second to last sentence in the first paragraph under the caption
"Risk Factors, Suitability and Other Investment Practices -- Foreign Securities"
on page 10 of the Prospectus is deleted.
