SUPPLEMENT dated December 17, 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
Each Fund
The following table replaces the Expense Information table on pages 2 and
3 of the attached Prospectus:
Shareholder Transaction Expenses Equity Small Tax Exempt
Fund Cap Fund
Fund
Maximum Sales Load Imposed on Purchases None None None
Maximum Sales Load Imposed on Reinvested Dividends None None None
Deferred Sales Load None None None
Redemption Fees None None None
Annual Operating Expenses Equity Small Tax Exempt
(as a percentage of average net assets) Fund Cap Fund
Fund
Management Fees (after fee reduction)* 0.00% 0.11% 0.31%
12b-1 Fees None None None
Other Expenses+ (after expense limitation)* 0.50% 0.64% 0.34%
----- ----- -----
Total Fund Operating Expenses (after expense 0.50% 0.75% 0.65%
===== ===== =====
limitation)*
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*Standish has voluntarily and temporarily agreed to limit certain expenses of
each Fund. In the absence of such agreements, the Management Fees, Other
Expenses and Total Operating Expenses (as a percentage of average net assets)
for the fiscal year ended September 30, 1997 would have been: Equity Fund --
0.50%, 1.23% and 1.73%; Small Cap Fund -- 0.60%, 0.64% and 1.24%; and Tax Exempt
Fund -- 0.40%, 0.34% and 0.74%. The Equity Fund and the Small Cap Fund were
subject to different expense limitations during the fiscal year ended September
30, 1997. Standish may revise or discontinue these agreements at any time
although it has no current intention to do so.
+Other Expenses include custodian and transfer agent fees, registration costs,
payments for insurance and audit and legal services.
Example
Hypothetically assume that each Fund's annual return is 5% and that its
operating expenses are exactly as described. For every $1,000 invested, an
investor would have paid the following expenses if an account were closed after
the number of years indicated:
After 1 Year $5 $8 $6
After 3 years 16 24 21
After 5 Years 28 42 36
After 10 Years 63 93 81
The purpose of the above table is to assist an investor in understanding
the various costs and expenses that an investor in each Fund will bear directly
or indirectly. Total operating expenses are based on expenses for each Fund's
fiscal year ended September 30, 1997 as adjusted for current expense
limitations. The example is included solely for illustrative purposes and should
not be considered a representation of future performance or expenses. Actual
expenses may be more or less than those shown. See "Management" for additional
information about each Fund's expenses.
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Each Fund
The following disclosure replaces the first sentence of the second
paragraph under the caption "Expenses" on page 19 of the attached Prospectus"
The Adviser has voluntarily agreed to limit Total Fund Operating
Expenses (excluding litigation, indemnification and other extraordinary
expenses) of each Fund to the following percentages of each Fund's
average daily net assets): Equity Fund -- 0.50%; Small Cap Fund -- 0.75%;
and Tax Exempt Fund -- 0.65%. The Equity Fund and the Small Cap Fund were
subject to different expense limitations during the fiscal year ended
September 30, 1997.
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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 page 7 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.
