The Standish
Group of
Equity Funds
[STANDISH LOGO] STANDISH FUNDS(SM)
Standish Equity Fund
Prospectus
Standish International ..........
Equity Fund
Standish Small
Capitalization
Equity Fund
Standish Small
Capitalization
Equity Fund II
January 28, 1998
Revised May 15, 1998
<PAGE>
Standish Group of Equity Funds
- --------------------------------------------------------------------------------
The Standish Group of Equity Funds includes the Standish Equity Fund, the
Standish Small Capitalization Equity Fund, the Standish Small Capitalization
Equity Fund II and the Standish International Equity Fund. Each Fund is
organized as a separate diversified investment series of Standish, Ayer & Wood
Investment Trust, an open end investment company (the "Trust"). The Equity Fund,
Small Capitalization Equity Fund and Small Capitalization Equity Fund II invest
exclusively in the Standish Equity Portfolio, Standish Small Capitalization
Equity Portfolio and Standish Small Capitalization Equity Portfolio II,
respectively, each an open end investment company. Standish, Ayer & Wood, Inc.
("Standish") is the investment adviser to the Equity Portfolio, the Small
Capitalization Equity Portfolio, and the Small Capitalization Equity Portfolio
II. Standish International Management Company, L.P. ("SIMCO"), Boston,
Massachusetts, is the investment adviser to the International Equity Fund.
Standish and SIMCO are referred to in the Prospectus as the "Adviser" or the
"Advisers."
Prospective investors can obtain more information about the Funds, including
an application and Investor Guide, by calling Standish Fund Distributors, L.P.
at (800) 729-0066 or by visiting our Website at www.standishfunds.com.
The Advisers seek to add value by capturing improving business momentum at
reasonable valuations. Their style blends quantitative and fundamental analysis
to find those stocks or markets where estimates of earnings are being revised
upwards but whose valuation does not yet reflect this positive trend. Standish
has been providing investment counseling to mutual funds, other institutional
investors and high net worth individuals for more than sixty years. Standish
offers a broad array of investment services that includes U.S., international
and global management of fixed income and equity securities for mutual funds and
separate accounts. SIMCO serves as Standish's international research and
investment arm for both debt and equity securities in all countries outside of
the United States. Privately held by twenty-three employee/directors and
headquartered in Boston, Massachusetts, Standish employs over eighty investment
professionals with a total staff of more than two hundred.
This Prospectus sets forth concisely the information about the Funds that a
prospective investor should know before investing and should be retained for
future reference. Additional information has been filed with the Securities and
Exchange Commission ("SEC") in a Statement of Additional Information ("SAI")
dated January 28, 1998, as amended or supplemented from time to time. The
Statement of Additional Information is incorporated by reference into this
Prospectus and is available without charge upon request from (800)729-0066. The
SEC maintains a Website (http://www.sec.gov) that contains the SAI and other
information regarding the Funds and the Portfolios.
Shares of the Funds are not deposits or obligations of, or guaranteed or
endorsed by, any bank or other insured depository institution, and are not
insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board
or any other government agency. An investment in shares of the Funds involves
investment risks, including possible loss of principal.
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.
Shares of the Funds are not available for sale in every state. This
Prospectus is not intended to be an offer to sell shares, nor may an offer to
purchase shares be accepted from investors, in those states where shares of the
Funds may not legally be sold. Contact Standish Fund Distributors to determine
whether the Funds are available for sale in your state.
Standish Group of Equity Funds Revised May 15, 1998
<PAGE>
Table of Contents
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Fund Comparison Highlights....................................................2
Expense Information...........................................................3
Financial Highlights..........................................................4
Investment Objectives and Policies............................................8
The Equity Fund..........................................................8
The Small Capitalization Equity Fund.....................................9
The Small Capitalization Equity Fund II..................................9
The International Equity Fund...........................................10
Description of Securities and Related Risks..................................10
Investment Techniques and Related Risks......................................13
Information about the Master-Feeder Structure................................14
Calculation of Performance Data..............................................15
Dividends and Distributions..................................................15
Purchase of Shares...........................................................15
Net Asset Value..............................................................16
Exchange of Shares...........................................................16
Redemption of Shares.........................................................17
Management...................................................................18
Federal Income Taxes.........................................................19
The Funds and Their Shares...................................................20
Custodians...................................................................20
Transfer Agent and Dividend Disbursing Agent.................................20
Independent Accountants......................................................20
Legal Counsel................................................................20
Tax Certification Instructions...............................................20
Standish Group of Equity Funds Revised May 15, 1998
<PAGE>
Fund Comparison Highlights
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The following table highlights information contained in this Prospectus and
is qualified in its entirety by the more detailed information contained within.
For a complete description of each Fund's distinct investment objective and
policies, see "Investment Objectives and Policies," "Description of Securities
and Related Risks" and "Investment Techniques and Related Risks." There can be
no assurance that a Fund's investment objective will be achieved.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Equity Fund Small Capitalization Small Capitalization International Equity
Equity Fund Equity Fund II Fund
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Long-term growth of capital Long-term growth of Long-term growth of Long-term capital
Objective through investment primarily capital through capital. Seeks to achieve growth through
in a diversified portfolio investment primarily in a that objective through investment in a
of equity and equity-related diversified portfolio of investment primarily in a diversified portfolio
securities of companies equity and equity-related diversified portfolio of of foreign equity
which appear to be securities of small equity and equity related securities
undervalued capitalization companies securities of small
capitalization companies.
Key Emphasize stocks believed to Emphasize rapidly Emphasize rapidly growing, Emphasize stocks and
Strategy offer above average growing, high quality high quality companies markets believed to
potential for capital growth companies with market with market offer above average
through the use of capitalizations less than capitalizations less than potential for capital
statistical modeling $700 million that are $1 billion that are growth through the use
techniques and fundamental involved with value added involved with value added of statistical
analysis products or services products or services modeling techniques
Market No limit; general range is $700 million or less $1 billion or less No limit; general
Capitalization medium to large range is medium to
of capitalization large capitalization
Companies
Focused on
by the Fund
Foreign Yes; no limit for securities Yes; limited to 15% of Yes; limited to 15% of Yes; without limit,
Securities listed on a U.S. exchange or total assets total assets including up to 25% of
traded in the U.S. total assets in
over-the-counter ("OTC") securities of issuers
market but limited to 10% of located in emerging
total assets for foreign markets
securities which are not so
listed or traded
Benchmark S&P 500 Russell 2000, Russell Russell 2000, Russell 2000 EAFE Index
Index 2000 Growth and S&P 500 Growth and S&P 500
</TABLE>
Standish Group of Equity Funds 2 Revised May 15, 1998
<PAGE>
Expense Information
- --------------------------------------------------------------------------------
Total operating expenses are based on expenses for each Fund's fiscal year ended
September 30, 1997, as adjusted for the current expense limitation with respect
to the Small Cap II Fund and the International Equity Fund. Total operating
expenses for the Equity Fund include expenses of the Fund and the Equity
Portfolio, for the Small Capitalization Equity Fund include expenses of the Fund
and the Small Capitalization Equity Portfolio, and for the Small Capitalization
Equity Fund II include expenses of the Fund and the Small Capitalization Equity
Portfolio II. The Trusts' Trustees believe that total operating expenses of the
Equity Fund and the Small Capitalization Equity Fund are approximately equal to
or less than what would be the case if the Funds did not invest all of their
investable assets in their corresponding Portfolios.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Small Small
Capitalization Capitalization International
Equity Fund Equity Fund Equity Fund II Equity Fund
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases None None None None
Maximum Sales Load Imposed on Reinvested Dividends None None None None
Deferred Sales Load None None None None
Redemption Fees None None None None
Annual Operating Expenses
(as a percentage of average net assets)
Management Fees (after applicable limitation) 0.50%* 0.60%* 0.00%* 0.38%*
12b-1 Fees None None None None
Other Expenses (after applicable expense
limitation 0.20%* 0.14%* 1.00%* 0.62%
------------- --------------- -------------- ---------------
Total Operating Expenses (after applicable
expense limitation) 0.70% 0.74% 1.00%* 1.00%*
============= =============== ============== ===============
</TABLE>
* The Advisers have voluntarily and temporarily agreed to limit certain expenses
of the Equity Fund, Small Cap Fund, Small Cap II Fund and International Equity
Fund to 0.70%, 0.74%, 1.00%, and 1.00%, respectively. In the absence of such
agreements, the Management Fees, Other Expenses and Total Operating Expenses (as
a percentage of average daily net assets) for the fiscal year ended September
30, 1997 would have been: Equity Fund -- 0.50%, 0.22% and 0.72%; Small Cap Fund
- -- 0.60%, 0.14%, and 0.74%; Small Cap II Fund -- 0.60%, 2.96% and 3.56%; and
International Equity Fund -- 0.80%, 0.62% and 1.42%. The Small Cap II Fund and
the International Equity Fund were subject to different expense limitations
during the fiscal year ended September 30, 1997. The Advisers may revise or
discontinue these agreements at any time although they have no current
intentions 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 total
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:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Small Small
Capitalization Capitalization International
Equity Fund Equity Fund Equity Fund II Equity Fund
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
After 1 Year $7 $8 $10 $10
After 3 Years 23 24 32 32
After 5 Years 40 41 55 55
After 10 Years 88 92 122 122
</TABLE>
The purpose of the table is to assist investors in understanding the various
costs and expenses that an investor in each Fund will bear directly or
indirectly. 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. On July 12, 1997, the Funds changed
their fiscal year end from December 31 to September 30.
Standish Group of Equity Funds 3 Revised May 15, 1998
<PAGE>
Financial Highlights
- --------------------------------------------------------------------------------
The financial highlights for periods after 1992 have been audited by Coopers
& Lybrand L.L.P., independent accountants, whose reports, together with the
Financial Statements of the Funds, are incorporated into the Statement of
Additional Information. Financial highlights for prior periods were audited by
other independent accountants. The Funds' annual reports, which contain
additional information about Fund performance, may be obtained from Standish
Fund Distributors without charge.
<TABLE>
<CAPTION>
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Equity Fund Nine Months Ended Year Ended December 31,
September 30, 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value - beginning of period $38.79 $34.81 $28.66 $30.89
------------- ------------- ------------- -------------
Income from investment operations
Net investment income** 0.39 0.60 0.76 0.45
Net realized and unrealized gain (loss)
on investments 12.79 8.52 9.94 (1.62)
------------- ------------- ------------- -------------
Total from investment operations 13.18 9.12 10.70 (1.17)
------------- ------------- ------------- -------------
Less distributions declared to shareholders
From net investment income (0.43) (0.56) (0.78) (0.44)
From net realized gain on investments (2.73) (4.58) (3.77) (0.62)
From paid-in capital -- -- -- --
------------- ------------- ------------- -------------
Total distributions declared to shareholders (3.16) (5.14) (4.55) (1.06)
------------- ------------- ------------- -------------
Net asset value - end of period $48.81 $38.79 $34.81 $28.66
============= ============= ============= =============
Total return(5) 35.13% 26.84% 37.55% (3.78%)
Ratios (to average daily net assets)/Supplemental Data
Net assets at end of period (000 omitted) $170,170 $105,855 $88,532 $86,591
Expenses**(1) 0.70%(t) 0.71% 0.69% 0.70%
Net investment income** 0.95%(t) 1.53% 2.05% 1.55%
Portfolio turnover 75%(3) 118%(3) 128%(4) 100%(4)
Average Broker Commission Rate $0.0465(2) $0.0499(2)
</TABLE>
<TABLE>
<CAPTION>
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Equity Fund
1993 1992* 1991*(+)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value - beginning of period $26.28 $25.66 $20.00
------------- ------------- -------------
Income from investment operations
Net investment income** 0.50 0.56 0.46
Net realized and unrealized gain (loss)
on investments 5.57 1.81 6.17
------------- ------------- -------------
Total from investment operations 6.07 2.37 6.63
------------- ------------- -------------
Less distributions declared to shareholders
From net investment income (0.47) (0.54) (0.35)
From net realized gain on investments (0.99) (1.19) (0.62)
From paid-in capital -- (0.02) --
------------- ------------- -------------
Total distributions declared to shareholders (1.46) (1.75) (0.97)
------------- ------------- -------------
Net asset value - end of period $30.89 $26.28 $25.66
============= ============= =============
Total return(5) 20.79% 9.52% 33.45%(t)
Ratios (to average daily net assets)/Supplemental Data
Net assets at end of period (000 omitted) $72,916 $14,679 $7,498
Expenses**(1) 0.80% 0.00% 1.00%(t)
Net investment income** 1.29% 2.52% 1.92%(t)
Portfolio turnover 89%(4) 92% 86%
Average Broker Commission Rate
</TABLE>
________________
** For the periods indicated, Standish did not impose a portion of its
advisory fee and/or reimbursed a portion of the Fund's operating expenses.
If this voluntary reduction had not been undertaken, the net investment
income per share and the ratios would have been:
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Net Investment Income per share $0.38 $0.59 -- -- $0.47 $0.34 $0.23(#)
Ratios (to average daily net assets):
Expenses(1) 0.72%(t) 0.72% -- -- 0.97% 1.00% 1.99%(#)
Net Investment Income 0.93%(t) 1.52% -- -- 1.12% 1.52% 0.93%(#)
</TABLE>
(#) Unaudited
(t) Computed on an annualized basis.
(*) Audited by other auditors.
(+) For the period from January 2, 1991 (start of business) to December 31,
1991.
(1) Includes the Fund's share of the Standish Equity Portfolio's allocated
expenses for the nine months ended September 30, 1997 and for the period
from May 3, 1996 to December 31, 1996.
(2) Represents activity while the Fund was making investments directly in
securities. For the period from May 3, 1996 to December 31, 1996, the
average broker commission rate for the Standish Equity Portfolio was
$0.0483. For periods after December 31, 1996, information provided is for
the Standish Equity Portfolio.
(3) Represents the unaudited theoretical portfolio turnover rate of the Fund
for the year ended December 31, 1996 had the Fund not contributed its
assets to the Standish Equity Portfolio on May 3, 1996. The portfolio
turnover rate of the Fund for the period from January 1, 1996 to May 2,
1996 was 41%. The portfolio turnover rate of the Standish Equity Portfolio
for the period from May 3, 1996 to December 31, 1996 was 78%. For periods
after December 31, 1996, information provided is for the Standish Equity
Portfolio.
(4) Restated for comparative purposes.
(5) The Fund's performance benchmark is the S&P 500 Index. See "Calculation of
Performance Data" for a description of the S&P 500 Index. The average
annual total return of the S&P 500 Index for each year since the Fund's
inception was as follows (this total return information is not audited):
<TABLE>
<CAPTION>
Total Return: 1997 1996 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C> <C>
S&P 500 33.36% 22.96% 37.58% 1.32% 10.08% 7.63% 30.47%
</TABLE>
Standish Group of Equity Funds 4 Revised May 15, 1998
<PAGE>
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
International Equity Fund Nine Months Ended Year Ended December 31,
September 30, 1997 1996 1995 1994 1993 1992* 1991*
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value
- --beginning of period $23.25 $23.54 $23.12 $26.74 $19.78 $22.20 $20.16
-------- -------- -------- -------- -------- -------- --------
Income from investment operations
Net investment income** 0.39 0.47 0.04 0.21 0.26 0.26 0.33
Net realized and unrealized
gain (loss) on investments 1.44 1.28 0.45 (2.08) 7.29 (2.47) 2.02
-------- -------- -------- -------- -------- -------- --------
Total from investment
operations 1.83 1.75 0.49 (1.87) 7.55 (2.21) 2.35
-------- -------- -------- -------- -------- -------- --------
Less distributions declared
to shareholders
From net investment income (0.30) (0.51) -- (0.12) (0.23) (0.21) (0.30)
In excess of net
investment income -- -- -- -- (0.36) -- --
From net realized gains
on investments (1.21) (1.53) (0.07) (1.63) -- -- (0.01)
-------- -------- -------- -------- -------- -------- --------
Total distributions declared
to shareholders (1.51) (2.04) (0.07) (1.75) (0.59) (0.21) (0.31)
-------- -------- -------- -------- -------- -------- --------
Net asset value
--end of period $23.57 $23.25 $23.54 $23.12 $26.74 $19.78 $22.20
======== ======== ======== ======== ======== ======== ========
Total return(2) 7.65% 7.44% 2.14% (6.99%) 38.27% (9.95%) 11.73%
Net assets at end of
period (000 omitted) $49,497 $47,739 $59,473 $104,435 $92,419 $56,539 $47,077
Ratios (to average daily net assets)/
Supplemental Data
Expenses** 0.84%(t) 0.50% 1.22% 1.23% 1.34% 1.53% 1.54%
Net investment income** 1.78%(t) 1.80% 1.76% 1.52% 1.09% 1.18% 1.30%
Portfolio turnover 155% 163% 108% 75% 98% 98% 27%
Average Broker Commission
Rate(1) $0.0137 $0.0092
</TABLE>
- ------------------------------------------------------------------------------
International Equity Fund
1990* 1989* 1988*(+)
- ------------------------------------------------------------------------------
Net asset value
- --beginning of period $23.10 $20.07 $20.00
-------- -------- --------
Income from investment operations
Net investment income** 0.55 0.49 0.06
Net realized and unrealized
gain (loss) on investments (2.67) 3.23 0.01
-------- -------- --------
Total from investment
operations (2.12) 3.72 0.07
-------- -------- --------
Less distributions declared
to shareholders
From net investment income (0.41) (0.50) --
In excess of net
investment income -- -- --
From net realized gains
on investments (0.41) (0.19) --
-------- -------- --------
Total distributions declared
to shareholders (0.82) (0.69) 0.00
-------- -------- --------
Net asset value
--end of period $20.16 $23.10 $20.07
======== ======== ========
Total return(2) (9.44%) 18.79% .35%(t)
Net assets at end of
period (000 omitted) $24,872 $19,141 $10,158
Ratios (to average daily net assets)/
Supplemental Data
Expenses** 1.60% 1.60% 1.60%(t)
Net investment income** 2.19% 2.29% 3.90%(t)
Portfolio turnover 48% 38% 0%
Average Broker Commission
Rate(1)
________________
(t) Computed on an annualized basis.
* Audited by other auditors.
** For the periods indicated, Standish voluntarily agreed not to impose a
portion of its investment advisory fee. In the absense of this agreement,
the net investment income per share and the ratios would have been:
Net investment income per share $0.29 $0.27
Ratios (to average net assets):
Expenses 1.42%(t) 1.29%
Net investment income 1.20%(t) 1.01%
(+) For the period from December 8, 1988 (start of business) to December 31,
1988.
(1) Amount represents the average commission per share paid to brokers on the
purchase and sale of portfolio securities.
(2) The Fund's performance benchmark is the Europe, Asia, Far-East ("EAFE")
Index. See "Calculation of Performance Data" for a description of the EAFE
Index. The average annual total return of the EAFE Index for each year
since the Fund's inception was as follows (this total return information
is not audited):
<TABLE>
<CAPTION>
Total Return: 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
EAFE 1.77% 6.04% 11.22% 7.79% 32.57% (12.19%) (12.12%) (23.43%) 10.61% 0.60%
</TABLE>
Standish Group of Equity Funds 5 Revised May 15, 1998
<PAGE>
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Small Capitalization Equity Fund Nine Months Ended Year Ended December 31,
September 30, 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value - beginning of period $52.96 $53.46 $42.15 $48.97
-------------- -------------- -------------- --------------
Income from investment operations
Net investment income (loss)** (0.23) -- -- --
Net realized and unrealized gain
(loss) on investments 14.80 9.29 12.57 (1.84)
-------------- -------------- -------------- --------------
Total from investment operations 14.57 9.29 12.57 (1.84)
-------------- -------------- -------------- --------------
Less distributions declared to shareholders
From net investment income -- -- --
From realized gains on investments (1.03) (9.79) (1.26) (4.98)
From paid-in capital -- -- -- --
-------------- -------------- -------------- --------------
Total distributions declared to shareholders (1.03) (9.79) (1.26) (4.98)
-------------- -------------- -------------- --------------
Net asset value - end of period $66.50 $52.96 $53.46 $42.15
============== ============== ============== ==============
Total return(%)(5) 27.92% 17.36% 29.83% (3.66%)
Ratios (to average daily net assets)/
Supplemental Data
Net assets at end of period (000 omitted) $274,368 $244,131 $180,470 $107,591
Expenses**(1) 0.74%(t) 0.75% 0.75% 0.79%
Net investment income** (0.57%)(t) (0.44%) (0.30%) (0.27%)
Portfolio turnover 70%(3) 113%(3) 103%(4) 95%(4)
Average Broker Commission Rate $0.0403(2) $0.0450(2) -- --
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Small Capitalization Equity Fund
1993 1992* 1991* 1990*(+)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value - beginning of period $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 11.31 4.00 17.87 1.33
-------------- -------------- -------------- --------------
Total from investment operations 11.24 3.89 17.83 1.34
-------------- -------------- -------------- --------------
Less distributions declared to shareholders
From net investment income -- -- -- (0.01)
From realized gains on investments (2.10) (4.05) (5.35) --
From paid-in capital -- -- (0.06) --
-------------- -------------- -------------- --------------
Total distributions declared to shareholders (2.10) (4.05) (5.41) (0.01)
-------------- -------------- -------------- --------------
Net asset value - end of period $48.97 $39.83 $39.99 $27.57
============== ============== ============== ==============
Total return(%)(5) 28.21% 9.74% 64.71% 15.35%(t)
Ratios (to average daily net assets)/
Supplemental Data
Net assets at end of period (000 omitted) $85,141 $50,950 $35,418 $13,273
Expenses**(1) 0.88% 1.04% 0.87% 1.48%(t)
Net investment income** (0.18%) (0.38%) (0.15%) 0.17%(t)
Portfolio turnover 118%(4) 101% 96% 13%
Average Broker Commission Rate -- -- -- --
</TABLE>
______________
(t) Computed on an annualized basis.
* Audited by other auditors.
** For the periods indicated, Standish did not impose a portion of its
advisory fee and/or reimbursed the Fund for a portion of its operating
expenses. If this voluntary reduction had not been undertaken, the net
investment income per share and the ratios would have been:
Net investment income (loss) per share ($0.23) ($0.01)
Ratios (to average daily net assets):
Expenses(1) 0.74%(t) 0.76%
Net investment income (0.57%)(t) (0.45%)
(+) For the period from August 31, 1990 (start of business) to December 31,
1990.
(1) Includes the Fund's share of Standish Small Capitalization Equity
Portfolio's allocated expenses for the nine months ended September 30,
1997 and for the period from May 3, 1996 to December 31, 1996.
(2) Represents activity while the Fund was making investments directly in
securities. For the period from May 3, 1996 to December 31, 1996, the
average broker commission rate for the Standish Small Cap Equity Portfolio
was $0.0434. For periods after December 31, 1996, information provided is
for Standish Small Cap Equity Portfolio.
(3) Represents the theoretical portfolio turnover rate of the Fund for the
year ended December 31, 1996 had the Fund not contributed its assets to
the Standish Small Cap Equity Portfolio on May 3, 1996. The portfolio
turnover rate of the Fund for the period from January 1, 1996 to May 2,
1996 was 28%. The portfolio turnover rate of the Standish Cap Equity
Portfolio for the period from May 3, 1996 to December 31, 1996 was 76%.
For periods after December 31, 1996, information provided is for the
Standish Small Cap Equity Portfolio.
(4) Restated for comparative purposes.
(5) The Fund's performance benchmarks are the S&P 500 Index, the Russell 2000
Index and the Russell 2000 Growth Index. See "Calculation of Performance
Data" for a description of these indices. The average annual total return
of these indices for each year since the Fund's inception was as follows
(this total return information is not audited):
<TABLE>
<CAPTION>
Total Return: 1997 1996 1995 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C> <C> <C>
S&P 500 33.36% 22.96% 37.58% 1.32% 10.08% 7.63% 39.47% (3.16%)
Russell 2000 22.37% 16.53% 28.44% (1.83%) 10.89% 18.42% 41.64% (19.52%)
Russell 2000 Growth 12.94% 11.26% 31.04% (2.43%) 13.36% 7.77% 51.19% (17.41%)
</TABLE>
Standish Group of Equity Funds 6 Revised May 15, 1998
<PAGE>
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
For the period
December 23, 1996
Nine Months (commencement
Ended of operations) to
Small Capitalization Equity Fund II September 30, 1997 December 31, 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value - beginning of period $20.39 $20.00
------------------------ --------------------
Income from investment operations
Net investment income (1) 0.03 0.00
Net realized and unrealized gain on investments 8.71 0.39
------------------------ --------------------
Total from investment operations 8.74 0.39
------------------------ --------------------
Less distributions declared to shareholders
From net investment income (0.01) --
From realized gains on investments -- --
From paid-in capital -- --
------------------------ --------------------
Total distributions declared to shareholders (0.01) --
Net asset value - end of period $29.12 $20.39
======================== ====================
Total return(4) 42.94% --(2)
Ratios (to average daily net assets)/Supplemental Data
Net assets at end of period (000 omitted) $6,314 $484
Expenses(1)** 0.00%t N/A(2)*
Net investment income(1) 0.49%t N/A(2)
Portfolio turnover 122%(3) 0.00%
Average Broker Commission Rate $0.0768(3) $0.2000
<CAPTION>
- ----------------
** For the periods indicated, Standish waived its investment advisory fee and
reimbursed the Small Cap II Portfolio and the Small Cap II Fund for all of
their operating expenses. If this voluntary action had not been taken, the
net investment income per share and the ratios would have been:
<S> <C> <C>
Net investment income (loss) per share ($0.25) N/A(2)
Ratios (to average daily net assets):
Expenses(1) 3.56%t N/A(2)
Net investment income (3.07%)t N/A(2)
</TABLE>
(t) Computed on an annualized basis.
(1) Includes the Fund's share of Portfolio allocated expenses for the nine
months ended September 30, 1997 and for the period December 23, 1996
(commencement of operations) to December 31, 1996.
(2) Amounts are not meaningful due to the short period of operations.
(3) The portfolio turnover and average broker commission rate figures listed are
for the Standish Small Cap II Portfolio. Because the Fund does not make
investments directly in securities, the Fund does not have any portfolio
turnover or average brokerage commission rate activity during this period.
(4) The Fund's performance benchmarks are the S&P 500 Index, the Russell 2000
Index and the Russell 2000 Growth Index. See "Calculation of Performance
Data" for a description of these indices. The average annual total return of
these indices for each year since the Funds' inception was as follows (this
total return information is not audited):
- --------------------------------------------------------------------------------
Total Return: 1997 1996
- --------------------------------------------------------------------------------
S&P 500 33.36% 22.96%
Russell 2000 22.37% 16.53%
Russell 2000 Growth 12.94% 11.26%
Standish Group of Equity Funds 7 Revised May 15, 1998
<PAGE>
Investment Objectives and Policies
- --------------------------------------------------------------------------------
Investment Strategy
Each Fund is an actively managed diversified portfolio consisting primarily
of equity and equity-related securities. Each Fund is managed to achieve
long-term growth of capital. The Equity Fund seeks to achieve its objective by
investing primarily in equity and equity-related securities of companies which
appear to be undervalued. The Small Capitalization Equity Fund ("Small Cap
Fund") and the Small Capitalization Equity Fund II ("Small Cap II Fund") seek to
achieve their respective objectives by focusing on equity and equity-related
securities of small capitalization companies. The Small Cap Fund invests
primarily in securities of companies with market capitalizations less than $700
million while the Small Cap II Fund invests primarily in securities of companies
with market capitalizations less than $1 billion. The International Equity Fund
seeks to achieve its objective by investing in a diversified portfolio of
foreign equity securities. The Equity Fund, the Small Cap Fund and the Small Cap
II Fund each invests all of its investable assets in a corresponding Portfolio.
These Funds are sometimes referred to in this Prospectus as the Standish Feeder
Funds. This structure, where one fund invests all of its investable assets in
another investment company, is described below under the caption "Information
About The Master-Feeder Structure."
The Advisers seek to add value to portfolios of securities by finding
companies with improving business momentum whose securities have reasonable
valuations. For the Equity Fund and the International Equity Fund, the Advisers
utilize both quantitative and fundamental analysis to find stocks whose
estimates of earnings are being revised upwards but whose valuation does not yet
reflect this positive trend. For the Small Cap and Small Cap II Funds, Standish
emphasizes small capitalization companies that have developed strong sector or
industry positions and have produced solid balance sheets.
The equity and equity-related securities in which each Fund invests include
exchange-traded and over-the-counter ("OTC") common and preferred stocks but may
also include warrants, rights, convertible securities, depositary receipts,
depositary shares, trust certificates, shares of other investment companies and
real estate investment trusts ("REITs"), limited partnership interests and
equity participations. These equity securities may be issued by U.S. or foreign
companies, although not all Funds invest to the same extent in securities of
foreign issuers. Please refer to each Fund's specific investment objective and
policies and "Description of Securities and Related Risks" for a more
comprehensive list of permissible securities and investments.
* * *
Each Fund's specific investment objective, policies and strategies are set
forth below to assist the investor in differentiating each Fund's unique
characteristics. Because of the uncertainty inherent in all investments, no
assurance can be given that a Fund will achieve its investment objective. See
"Description of Securities and Related Risks" and "Investment Techniques and
Related Risks" below for additional information.
The Equity Fund
The investment objective and characteristics of the Equity Fund correspond
directly to those of the Equity Portfolio in which the Fund invests all of its
investable assets. The following is a discussion of the investment objective and
policies of the Equity Portfolio.
Investment Objective. The Equity Portfolio's investment objective is to
achieve long-term growth of capital through investment primarily in a
diversified portfolio of equity and equity-related securities of companies which
appear to be undervalued.
Principal Investments. Under normal circumstances, at least 80% of the Equity
Portfolio's total assets are invested in equity and equity-related securities.
Investment Strategies. The Equity Portfolio follows a disciplined investment
strategy, emphasizing stocks which Standish believes offer above average
potential for capital growth. Although the precise application of the discipline
varies according to market conditions, Standish intends to use statistical
modeling techniques that utilize stock specific factors (e.g., 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 be
subject to further fundamental analysis by Standish's professional staff before
they are included in the Equity Portfolio's holdings. Securities selected for
inclusion in the Equity Portfolio's holdings will represent various industries
and sectors.
Other Investments. The Equity Portfolio may invest without limit in equity
and equity-related securities of foreign issuers that are listed on a United
States securities exchange or traded in the U.S. OTC market. The Portfolio may
not invest more than 10% of its total assets in such securities which are not so
listed or traded.
The Equity Portfolio may to a limited extent invest in debt securities and
preferred stocks which are convertible into, or exchangeable for, common stocks.
Generally, these securities will be rated, at the time of investment, Aaa, Aa or
A by Moody's Investors Service, Inc., or AAA, AA, or A by Standard and Poor's
Ratings Group, Duff and Phelps, Inc. or Fitch Investors Service, Inc., or, if
unrated, determined by Standish to be of comparable credit quality. Up to 5% of
the Equity 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, Duff,
or Fitch or, if unrated, determined by Standish to be of comparable credit
quality. As a temporary matter and for defensive purposes, the Equity Portfolio
may purchase investment grade short-term debt securities, the amount of which
will depend on market conditions and the needs of the Equity Portfolio.
Standish Group of Equity Funds 8 Revised May 15, 1998
<PAGE>
The Equity Portfolio may enter into repurchase agreements, engage in short
selling and invest in restricted and illiquid securities, although it intends to
invest in restricted and illiquid securities on an occasional basis only. The
Equity Portfolio may purchase and sell put and call options, enter into futures
contracts, purchase and sell options on such futures contracts and engage in
currency transactions. See "Description of Securities and Related Risks" and
"Investment Techniques and Related Risks" below for additional information.
The Small Capitalization Equity Fund
The investment objective and characteristics of the Small Cap Fund correspond
directly to those of the Small Capitalization Equity Portfolio ("Small Cap
Portfolio") in which the Fund invests all of its investable assets. The
following is a discussion of the investment objectives and policies of the Small
Cap Portfolio.
Investment Objective. The Small Cap Portfolio's investment objective is to
achieve long-term growth of capital through investment primarily in a
diversified portfolio of equity and equity-related securities of small
capitalization companies.
Principal Investments. Under normal circumstances, at least 80% of the Small
Cap Portfolio's total assets are invested in equity and equity-related
securities of small capitalization companies. The Small Cap Portfolio focuses
its investments in small capitalization companies that have market
capitalizations less than $700 million. When Standish believes that securities
of small capitalization companies are overvalued, the Small Cap Portfolio may
invest in securities of larger, more mature companies, provided that such
investments do not exceed 20% of the Portfolio's total assets. The Small Cap
Portfolio may participate in initial public offerings for previously privately
held companies which are expected to have market capitalizations less than $700
million after the consummation of the offering, and whose securities are
expected to be liquid after the offering.
Investment Strategies. The Small Cap Portfolio pursues investments in rapidly
growing, high quality companies that are involved with value added products or
services. These companies have market capitalizations less than $700 million,
although the Small Cap Portfolio may include securities of larger, more mature
companies. Companies with small market capitalizations may have more limited
operating histories and/or less experienced management than larger
capitalization companies and investments in such companies may pose additional
risks.
Other Investments. The Small Cap Portfolio may invest up to 15% of its total
assets in equity and equity-related securities of foreign issuers, including
issuers located in emerging markets. As a temporary matter and for defensive
purposes, the Small Cap Portfolio may purchase investment grade short-term debt
securities, the amount of which will depend on market conditions and the needs
of the Small Cap Portfolio.
The Small Cap Portfolio may enter into repurchase agreements, engage in short
selling and invest in restricted and illiquid securities, although it intends to
invest in restricted and illiquid securities on an occasional basis only. The
Small Cap Portfolio may purchase and sell put and call options, enter into
futures contracts, purchase and sell options on such futures contracts and
engage in currency transactions. See "Description of Securities and Related
Risks" and "Investment Techniques and Related Risks" below for additional
information.
The Small Capitalization Equity Fund II
The investment objective and characteristics of the Small Cap II Fund
correspond directly to those of the Small Capitalization Equity Portfolio II
("Small Cap II Portfolio") in which the Fund invests all of its investable
assets. The following is a discussion of the investment objectives and policies
of the Small Cap II Portfolio.
Investment Objective. The Small Cap II Portfolio's investment objective is to
achieve long term growth of capital. The Portfolio seeks to achieve its
objective through investment primarily in a diversified portfolio of equity and
equity-related securities of small capitalization companies.
Principal Investments. Under normal circumstances, at least 80% of the Small
Cap II Portfolio's total assets are invested in equity and equity-related
securities of small capitalization companies. The Small Cap II Portfolio focuses
its investments in small capitalization companies on those with market values
are less than $1 billion. When Standish believes that securities of small
capitalization companies are overvalued, the Small Cap II Portfolio may invest
in securities of larger, more mature companies, provided that such investments
do not exceed 20% of the Portfolio's total assets. The Small Cap II Portfolio
may participate in initial public offerings for previously privately held
companies which are generally expected to have market capitalizations less than
$1 billion after the consummation of the offering, and whose securities are
expected to be liquid after the offering.
Investment Strategies. The Small Cap II Portfolio pursues investments in
rapidly growing, high quality companies that are involved with value added
products or services. These companies have market capitalizations less than $1
billion. Companies with small market capitalizations may have more limited
operating histories and/or less experienced management than larger
capitalization companies and investments in such companies may pose additional
risks.
Other Investments. The Small Cap II Portfolio may invest up to 15% of its
total assets in equity and equity-related securities of foreign issuers,
including issuers located in emerging markets. As a temporary matter and for
defensive purposes, the Small Cap II Portfolio may purchase investment grade
short-term debt securities, the amount of which will depend on market conditions
and the needs of the Small Cap II Portfolio.
The Small Cap II Portfolio may enter into repurchase agreements, engage in
short selling and is permitted to invest in restricted and illiquid securities,
although it intends to invest in restricted and illiquid securities on an
occasional basis only. The Small Cap II Portfolio may also purchase and sell put
and call options, enter into futures contracts, purchase and sell options on
such futures contracts and engage in currency transactions. See "Description of
Securities and Related Risks" and "Investment Techniques and Related Risks"
below for additional information.
Standish Group of Equity Funds 9 Revised May 15, 1998
<PAGE>
The International Equity Fund
Investment Objective. The International Equity Fund's investment objective is
to obtain long-term capital growth through investment in a diversified portfolio
of foreign equity securities. Capital growth is expected to result primarily
from appreciation of the equity securities held in the Fund's portfolio;
however, the Fund may take advantage of changes in currency exchange rates in an
effort to realize additional capital appreciation. Income received on the Fund's
investments is incidental to the Fund's primary objective to obtain long-term
capital growth.
Principal Investments. Under normal circumstances, at least 65% of the
International Equity Fund's total assets are invested in equity and
equity-related securities of companies located in the foreign countries
represented in the Morgan Stanley Capital International Europe, Australia, Far
East Index (the "EAFE Index"), Canada and, to a limited extent, emerging
markets. The Fund intends to be invested in a broad range of foreign countries,
but is not required to invest in each country represented in the EAFE Index or
to invest in those countries in accordance with their weightings in these
Indices. The Fund intends to invest in a minimum of five countries.
Up to 25% of the Fund's total assets may be invested in securities of issuers
doing business in emerging markets, provided that not more than 5% of the Fund's
total assets may be invested in issuers located in any one emerging market.
SIMCO considers an emerging equity market to be any country that is not
represented in the MSCI World Index, which is an index of stocks in developed
markets.
Investment Strategy. The Fund follows a disciplined investment strategy,
emphasizing stocks and markets which SIMCO believes offer above average
potential for capital growth. Although the precise application of the discipline
varies according to market conditions, SIMCO uses statistical modeling
techniques that utilize stock and market specific factors to identify equity
securities and markets that are attractive as purchase candidates. These factors
include current and historical price multiple ratios and trends in consensus
analysis estimates. Once identified, these securities and markets are subject to
further review by the Fund's portfolio manager before they are included in the
Fund's portfolio. Securities selected for inclusion in the Fund's portfolio will
represent various industries and sectors.
Other Investments. The Fund may invest in fixed income securities such as
bonds, notes, Eurodollar securities and other debt obligations issued by the
U.S. government, its agencies, authorities and sponsored enterprises, foreign
governments and their political subdivisions, and corporate issuers located in
or doing business in foreign countries. These fixed income securities will be
rated at the time of investment A or better by Moody's, Standard & Poor's, Duff
or Fitch or, if unrated, determined by SIMCO to be of comparable credit quality.
The Fund may invest in preferred stocks of an issuer of any credit quality if
the common stocks of the issuer are not available to the Fund for investment. As
a temporary matter and for defensive purposes, the International Equity Fund may
purchase investment grade short-term debt securities, the amount of which will
depend on market conditions and the needs of the International Equity Fund.
The Fund may enter into repurchase agreements, engage in short selling and
invest in restricted and illiquid securities. The Fund may purchase and sell put
and call options, enter into futures contracts, purchase and sell options on
such futures contracts and engage in currency transactions. See "Description of
Securities and Related Risks" and "Investment Techniques and Related Risks"
below for additional information.
Description of Securities and Related Risks
The following sections describe specific securities and the risks that are
associated with the purchase of a particular type of security or the utilization
of a specific investment technique. For purposes of the discussion in this
section and the "Investment Techniques and Related Risks" section of this
Prospectus, the use of the term "Fund" or "Funds" refers to each of the Equity
Portfolio, the Small Cap Portfolio, the Small Cap II Portfolio and the
International Equity Fund, unless otherwise noted.
Common Stocks. Common stocks are shares of a corporation or other entity that
entitle the holder to a pro rata share of the profits of the corporation, if
any, without preference over any other shareholder or class of shareholders,
including holders of the entity's preferred stock and other senior equity.
Common stock usually carries with it the right to vote and frequently an
exclusive right to do so.
Small Capitalization Stocks. The Small Cap and Small Cap II Portfolios invest
primarily, and the other Funds may invest to a lesser extent, in securities of
small capitalization companies. Although investments in small capitalization
companies may present greater opportunities for growth, they also involve
greater risks than are customarily associated with investments in larger, more
established companies. The securities of small 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 small capitalization companies may be traded only on
the OTC 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 a Portfolio of 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.
Convertible Securities Convertible debt securities and preferred stock
entitle the holder to acquire the issuer's stock by exchange or purchase for a
predetermined rate. Convertible securities are subject both to the credit and
interest rate risks associated with fixed income securities and to the stock
market risk associated with equity securities.
Warrants. Warrants acquired by a Fund entitle it to buy common stock from the
issuer at a specified price and time. Warrants are subject to the same market
risks as stocks, but may be more volatile in price. A Fund's investment in
warrants will not entitle it to receive dividends or exercise voting rights and
will become worthless if the warrants cannot be profitably exercised before
their expiration dates.
Standish Group of Equity Funds 10 Revised May 15, 1998
<PAGE>
REITs. Each Fund may invest in shares of real estate investment trusts, which
are pooled investment vehicles that invest in real estate or real estate loans
or interests. Investing in REITs involves risks similar to those associated with
investing in equity securities of small capitalization companies. REITs are
dependent upon management skills, are not diversified, and are subject to risks
of project financing, default by borrowers, self-liquidation, and the
possibility of failing to qualify for the exemption from taxation under the
Internal Revenue Code of 1986, as amended (the "Code").
U.S. Government Securities. Each Fund may invest in U.S. Government
securities. Generally, these securities include U.S. Treasury obligations and
obligations issued or guaranteed by U.S. Government agencies, instrumentalities
or sponsored enterprises which are supported by (a) the full faith and credit of
the U.S. Treasury (such as the Government National Mortgage Association), (b)
the right of the issuer to borrow from the U.S. Treasury (such as securities of
the Student Loan Marketing Association), (c) the discretionary authority of the
U.S. Government to purchase certain obligations of the issuer (such as the
Federal National Mortgage Association and Federal Home Loan Mortgage
Corporation), or (d) only the credit of the agency. No assurance can be given
that the U.S. Government will provide financial support to U.S. Government
agencies, instrumentalities or sponsored enterprises in the future. U.S.
Government securities also include Treasury receipts, zero coupon bonds, U.S.
Treasury inflation-indexed bonds, deferred interest securities and other
stripped U.S. Government securities, where the interest and principal components
of stripped U.S. Government securities are traded independently.
Foreign Securities. The International Equity Fund may invest in foreign
securities without limit. The Small Cap Portfolio and the Small Cap II Portfolio
limit their investments in foreign securities to 15% of their respective total
assets, including securities of foreign issuers that trade on a U.S. exchange or
in the U.S. OTC market. The Equity Portfolio may invest without limit in foreign
securities which trade on a U.S. exchange or in the U.S. OTC market, but may not
invest more than 10% of its total assets in foreign securities which are not so
listed or traded.
Investing in the securities of foreign issuers involves risks that are not
typically associated with investing in U.S. dollar-denominated securities of
domestic issuers. Investments in foreign issuers may be affected by changes in
currency rates, changes in foreign or U.S. laws or restrictions applicable to
such investments and in exchange control regulations (e.g., currency blockage).
A decline in the exchange rate of the currency (i.e., weakening of the currency
against the U.S. dollar) in which a portfolio security is quoted or denominated
relative to the U.S. dollar would reduce the value of the portfolio security.
Commissions on transactions in foreign securities may be higher than those for
similar transactions on domestic stock markets and foreign custodial costs are
higher than domestic custodial costs. In addition, clearance and settlement
procedures may be different in foreign countries and, in certain markets, such
procedures have on occasion been unable to keep pace with the volume of
securities transactions, thus making it difficult to conduct such transactions.
Foreign issuers are not generally subject to uniform accounting, auditing and
financial reporting standards comparable to those applicable to U.S. issuers.
There may be less publicly available information about a foreign issuer than
about a U.S. issuer. In addition, there is generally less government regulation
of foreign markets, companies and securities dealers than in the U.S. Most
foreign securities markets may have substantially less trading volume than U.S.
securities markets and securities of many foreign issuers are less liquid and
more volatile than securities of comparable U.S. issuers. Furthermore, with
respect to certain foreign countries, there is a possibility of nationalization,
expropriation or confiscatory taxation, imposition of withholding or other taxes
on dividend or interest payments (or in some cases, capital gains), limitations
on the removal of funds or other assets, political or social instability or
diplomatic developments which could affect investments in those countries.
Currency Risks. The U.S. dollar value of securities denominated in a foreign
currency will vary with changes in currency exchange rates, which can be
volatile. Accordingly, changes in the value of the currencies in which a Fund's
investments are denominated relative to the U.S. dollar will affect the Fund's
net asset value. Exchange rates are generally affected by the forces of supply
and demand in the international currency markets, the relative merits of
investing in different countries and the intervention or failure to intervene of
U.S. or foreign governments and central banks. Some emerging market countries
also may have managed currencies which are not free floating against the U.S.
dollar. In addition, emerging markets are subject to the risk of restrictions
upon the free conversion of their currencies into other currencies. Any
devaluations relative to the U.S. dollar in the currencies in which a Fund's
securities are quoted would reduce the Fund's net asset value per share.
The International Equity Fund may invest any portion of its assets in
securities denominated in a particular foreign currency. The portion of the
International Equity Fund's assets invested in securities denominated in
non-U.S. currencies will vary depending on market conditions. The other Funds
may invest a smaller portion of their assets in securities donominated in
Foreign currencies.
Each Fund may enter into forward foreign currency exchange contracts and
cross currency forward contracts with banks or other foreign currency brokers or
dealers to purchase or sell foreign currencies at a future date and may purchase
and sell foreign currency futures contracts and cross-currency futures contracts
to seek to hedge against changes in foreign currency exchange rates, although
the Equity, the Small Cap and Small Cap II Portfolios have no current intention
to engage in such transactions. A forward foreign currency exchange contract is
a negotiated agreement between the contracting parties to exchange a specified
amount of currency at a specified future time at a specified rate. A
cross-currency forward contract is a forward contract that uses one currency
which historically moves in relation to a second currency to hedge against
changes in that second currency. See "Strategic Transactions" within the
"Investment Techniques and Related Risks" section for a further discussion of
the risks associated with currency transactions.
Standish Group of Equity Funds 11 Revised May 15, 1998
<PAGE>
Investing in Emerging Markets. Although each Fund invests primarily in
securities of established issuers based in the U.S. and, particularly in the
case of the International Equity Fund, in other developed markets, each Fund may
also invest in securities of issuers in emerging markets, including issuers in
Asia (including Russia), Eastern Europe, Latin and South America, the
Mediterranean and Africa. The International Equity Fund may invest up to 25% of
its total assets in issuers located in emerging markets. The Equity, Small Cap
and Small Cap II Portfolios may invest up to 10% of their total assets in
issuers located in emerging markets generally and up to 3% of their total assets
in issuers of any one specific emerging market country. The Funds may also
invest in currencies of such countries and may engage in strategic transactions
in the markets of such countries. Investing in securities of issuers in emerging
markets involves exposure to significantly higher risk than investing in foreign
countries with developed markets and may be considered speculative. These
heightened risks include: (i) greater risks of expropriation, confiscatory
taxation, nationalization and less social, political and economic stability;
(ii) the small current size of the markets for securities of emerging market
issuers and the currently low or nonexistent volume of trading and frequent
artificial limits on daily price movements, resulting in lack of liquidity and
in price uncertainty; (iii) certain national policies which may restrict a
Fund's investment opportunities, including limitations on aggregate holdings by
foreign investors and restrictions on investing in issuers or industries deemed
sensitive to relevant national interests; (iv) the absence of developed legal
structures governing private or foreign investment in private property which may
adversely effect the Fund's ability to retain ownership of its securities during
periods of economic, social or political turmoil; and (v) high rates of
inflation and rapid fluctuations in interest rates that have had and may
continue to have negative effects on the economies and securities markets of
certain emerging market countries.
The economies of emerging market countries may be predominantly based on only
a small number of industries or dependent on revenues from the sale of
particular commodities or on international aid or development assistance. As a
result, these economies may be significantly more vulnerable to changes in local
or global trade conditions, and may suffer from volatile or extreme fluctuations
in currency exchange rates, inflation and deflation rates as well as debt
burdens. Many emerging market countries have experienced and will continue to
experience periods of rapid inflation, resulting in significant market
uncertainty and sharp drops in the U.S. dollar value of the country's assets.
The currencies of emerging market countries may also be devalued as a result of
governmental action in addition to market factors. Recently, the economies of
certain emerging market countries have experienced deflation which has
diminished the demand for goods and services resulting in excess capacity in
factories that were built upon the forecast of continuing strong demand for such
goods and services. All of these risks may adversely affect the Funds'
investments in emerging market countries. See "Investing in Foreign Securities"
and "Currency Risks" above and the Statement of Additional Information for a
further description of the risks associated with investing in emerging market
countries.
Depositary Receipts and Depositary Shares. Depositary receipts and depositary
shares are typically issued by a U.S. or foreign bank or trust company and
evidence ownership of underlying securities of a U.S. or foreign issuer.
Unsponsored programs are organized independently and without the cooperation of
the issuer of the underlying securities. As a result, available information
concerning the issuer may not be as current as for sponsored depositary
instruments and their prices may be more volatile than if they were sponsored by
the issuers of the underlying securities. Examples of such investments include,
but are not limited to, American Depositary Receipts and Shares ("ADRs" and
"ADSs"), Global Depositary Receipts and Shares ("GDRs" and "GDSs") and European
Depository Receipts and Shares ("EDRs" and "EDSs").
Money Market Instruments and Short-Term Securities. Although each Fund
intends to remain invested in equity and equity-related securities to the extent
practical in light of its objective, each Fund may, under normal market
conditions, establish and maintain cash balances and may purchase money market
instruments with maturities of less than one year and short-term
interest-bearing fixed income securities with maturities of one to three years
("Short-Term Obligations") to maintain liquidity to meet redemptions. The Small
Cap Portfolio and Small Cap II Portfolio may invest up to 20% of their total
assets in money market instruments and Short-Term Obligations without regard to
the liquidity needs of their portfolios. Each Fund may also maintain cash
balances and invest in money market instruments and Short-Term Obligations
without limitation as a temporary measure or for defenses purposes. For example,
during periods of rapid in-flows of new money by investors into the Small Cap II
Portfolio, the Portfolio may temporarily have more than 20% of its total assets
invested in money market instruments and Short-Term Obligations pending the
investment of such amounts in equity and equity-related securities of small
capitalization companies. During such periods, the Small Cap II Portfolio will
temporarily have less than 80% of its total assets invested in equity and
equity-related securities of small capitalization companies.
Money market instruments and Short-Term Obligations include obligations
issued or guaranteed by the U.S. Government or any of its agencies and
instrumentalities, U.S. and foreign commercial paper, bank obligations,
repurchase agreements and other debt obligations of U.S. and foreign issuers.
Money market instruments in which the Funds invest will be rated at the time of
purchase P-1 by Moody's or A-1 or Duff-1 by Standard & Poor's, Duff and Fitch
or, if unrated, determined by the Adviser to be of comparable quality. At least
95% of a Fund's assets that are invested in Short-Term Obligations must be
invested in obligations rated at the time of purchase Aaa, Aa, A or P-1 by
Moody's or AAA, AA, A, A-1 or Duff-1 by Standard & Poor's, Duff or Fitch or, if
unrated, determined by the Adviser to be of comparable credit quality. Up to 5%
of a Fund's total assets invested in Short-Term Obligations may be invested in
obligations rated Baa by Moody's or BBB by Standard & Poor's, Duff or Fitch or,
if unrated, determined by the Adviser to be of comparable credit quality.
Standish Group of Equity Funds 12 Revised May 15, 1998
<PAGE>
Securities rated within the top three investment grade ratings (i.e., Aaa,
Aa, A or P-1 by Moody's or AAA, AA, A or Duff-1 by Standard & Poor's, Duff or
Fitch) are generally regarded as high grade obligations. Securities rated Baa by
Moody's or BBB by Standard & Poor's, Duff or Fitch are generally considered
medium grade obligations and have some speculative characteristics. Adverse
changes in economic conditions or other circumstances are more likely to weaken
the medium grade issuer's capability to pay interest and repay principal than is
the case for high grade securities. If a security is rated differently by two or
more rating agencies, the Adviser uses the highest rating to determine its
rating category. If the rating of a security held by a Fund is downgraded below
the minimum rating, the Adviser will determine whether to retain that security
in the Fund's portfolio.
Investment Techniques and Related Risks
Strategic Transactions. Each Fund may, but is not required to, utilize
various investment strategies to seek to hedge 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 each Fund may
change over time as new instruments and strategies are developed or regulatory
changes occur.
In the course of pursuing their investment objectives, each Fund may purchase
and sell (write) exchange-listed and OTC put and call options on securities,
equity indices and other financial instruments; purchase and sell financial
futures contracts and options thereon; and, to the extent a Fund invests in
foreign securities, enter into currency transactions such as forward foreign
currency exchange contracts, cross-currency forward contracts, currency futures
contracts, currency swaps and options on currencies or currency futures
(collectively, all the above are called "Strategic Transactions"). Strategic
Transactions may be used to seek to protect against possible changes in the
market value of securities held in or to be purchased for a Fund's portfolio
resulting from securities markets, currency exchange rate fluctuations, to seek
to protect a Fund's unrealized gains in the value of 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.
The ability of a Fund to utilize Strategic Transactions successfully will
depend on Standish's ability to predict pertinent market, currency and interest
rate movements, which cannot be assured. Each Fund will comply with applicable
regulatory requirements when implementing these strategies, techniques and
instruments. The Funds' activities involving Strategic Transactions may be
limited by the requirements of 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, interest rate or currency 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 a Fund, 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 a Fund can realize on its investments
or cause a Fund to hold a security it might otherwise sell.
The use of options and futures transactions entails certain other risks.
Futures markets are highly volatile and the use of futures may increase the
volatility of a Fund's net asset value. In particular, the variable degree of
correlation between price movements of futures contracts and price movements in
the related portfolio position of a Fund creates the possibility that losses on
the hedging instrument may be greater than gains in the value of the Fund's
position. The writing of options could significantly increase a Fund's portfolio
turnover rate and associated brokerage commissions or spreads. In addition,
futures and options markets may not be liquid in all circumstances and certain
OTC options may have no markets. As a result, in certain markets, a Fund might
not be able to close out a transaction without incurring substantial losses.
Losses resulting from the use of Strategic Transactions could reduce a Fund's
net asset value and the net result may be less favorable than if the Strategic
Transactions had not been utilized. 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 position, at the same time, such transactions can
limit any potential gain which might result from an increase in value of such
position. The loss incurred by a Fund in writing options and entering into
futures transactions is potentially unlimited.
The use of currency transactions can result in a Fund 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. Each Fund will attempt to limit its net loss exposure resulting from
Strategic Transactions entered into for non-hedging purposes to 3% of net
assets. In calculating a Fund's net loss exposure from such Strategic
Transactions, an unrealized gain from a particular Strategic Transaction would
be netted against an unrealized loss from a related position. See the Statement
of Additional Information for further information regarding the use of Strategic
Transactions.
Repurchase Agreements. Each Fund (except the International Equity Fund) may
invest up to 10% of its net assets in repurchase agreements. The International
Equity Fund is not subject to the same limit, except that investments in
repurchase agreements maturing in more than 7 days are subject to the Fund's 15%
limit on investments in illiquid securities. In a repurchase agreement, a Fund
buys a security at one price and simultaneously agrees to sell it back at a
higher price. Delays or losses could result if the other party to the agreement
defaults or becomes insolvent. Repurchase agreements acquired by a Fund will
always be fully collateralized as to principal and interest by money market
instru-
Standish Group of Equity Funds 13 Revised May 15, 1998
<PAGE>
ments and will be entered into only with commercial banks, brokers and dealers
considered creditworthy by the Adviser.
Short Sales. Each Fund may engage in short sales and short sales against the
box. In a short sale, a Fund sells a security it does not own in anticipation of
a decline in the market value of that security. In a short sale against the box,
a Fund either owns or has the right to obtain at no extra cost the security sold
short. The broker holds the proceeds of the short sale until the settlement
date, at which time the Fund delivers the security (or an identical security) to
cover the short position. The Fund receives the net proceeds from the short
sale. When a Fund enters into a short sale other than against the box, the Fund
must first borrow the security to make delivery to the buyer and must place cash
or liquid assets in a segregated account that is marked to market daily. Short
sales other than against the box involve unlimited exposure to loss. 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 a Fund's net assets.
Restricted and Illiquid Securities. Each Fund may invest up to 15% of its net
assets in illiquid securities; however, the Equity Portfolio, the Small Cap
Portfolio and Small Cap II Portfolio invest in these securities only on an
occasional basis. Illiquid securities are those 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, swap transactions, certain OTC
options and certain restricted securities. Based upon continuing review of the
trading markets for a specific restricted security, the security may be
determined to be eligible for resale to qualified institutional buyers pursuant
to Rule 144A under the Securities Act of 1933 and, therefore, to be liquid.
Also, certain illiquid securities may be determined to be liquid if they are
found to satisfy relevant liquidity requirements.
The Boards of Trustees have adopted guidelines and delegated to the Advisers
the daily function of determining and monitoring the liquidity of portfolio
securities, including restricted and illiquid securities. The Boards of
Trustees, however, retain oversight and are ultimately responsible for such
determinations. The purchase price and subsequent valuation of illiquid
securities normally reflect a discount, which may be significant, from the
market price of comparable securities for which a liquid market exists.
Investments in Other Investment Companies. Each Fund is permitted to invest
up to 10% of its total assets in shares of investment companies and up to 5% of
its total assets in any one investment company as long as that investment does
not represent more than 3% of the total voting stock of the acquired investment
company. Investments in the securities of other investment companies may involve
duplication of advisory fees and other expenses. Because certain emerging
markets are closed to investment by foreigners, the Funds may invest in issuers
in those markets primarily through specifically authorized investment funds. In
addition, each Fund may invest in investment companies that are designed to
replicate the composition and performance of a particular index. For example,
Standard & Poor's Depositary Receipts ("SPDERS") are exchange-traded shares of a
closed-end investment company designed to replicate the price performance and
dividend yield of the Standard & Poor's 500 Composite Stock Price Index. Another
example is World Equity Benchmark Series ("WEBS") which are exchange traded
shares of open-end investment companies designed to replicate the composition
and performance of publicly traded issuers in particular countries. Investments
in index baskets involve the same risks associated with a direct investment in
the types of securities included in the baskets.
Portfolio Turnover. A high rate of portfolio turnover (100% or more) involves
correspondingly higher transaction costs which must be borne directly by a Fund
and thus indirectly by its shareholders. It may also result in a Fund's
realization of larger amounts of short-term capital gains, distributions from
which are taxable to shareholders as ordinary income.
Short-Term Trading. Each Fund will sell a portfolio security without regard
to the length of time such security has been held if, in Standish's view, the
security meets the criteria for disposal.
Investment Restrictions. The investment objectives of the Portfolios and the
Small Capitalization Equity Fund II are not fundamental and may be changed by
the Boards of Trustees without the approval of shareholders. The investment
objectives of the Equity Fund, the International Equity Fund and the Small
Capitalization Equity Fund are fundamental and may not be changed without a vote
of the applicable Fund's shareholders. If there is a change in a Fund's
investment objective, shareholders should consider whether the Fund remains an
appropriate investment in light of their current financial situation. Each
Portfolio's and Fund's investment policies set forth in this Prospectus are
non-fundamental and may be changed without shareholder approval, except that the
Equity Fund's 10% limit on repurchase agreements is fundamental. Each Fund and
Portfolio has adopted fundamental policies which may not be changed without the
approval of the applicable Fund's shareholders. See "Investment Restrictions" in
the Statement of Additional Information. If any percentage restriction is
adhered to at the time of investment, a subsequent increase or decrease in the
percentage resulting from a change in the value of a Fund's assets will not
constitute a violation of the restriction.
Information About the Master-Feeder Structure
Each Standish Feeder Fund seeks to achieve its investment objective by
investing all of its investable assets in its corresponding Portfolio, which has
an identical investment objective. Each of the Standish Feeder Funds is a feeder
fund and its corresponding Portfolio is the master fund in a so-called
master-feeder structure. The International Equity Fund purchases securities
directly and maintains its own individual portfolio.
In addition to the Standish Feeder Funds, other feeder funds may invest in
these Portfolios, and information about these other feeder funds is available
from Standish Fund Distributors. The other feeder funds invest in the Portfolios
on the same terms as the Funds and bear a proportionate share of the Portfolios'
expenses. The other feeder funds may sell shares on different terms and under a
different pricing structure than the Funds, which may produce different
investment results.
Standish Group of Equity Funds 14 Revised May 15, 1998
<PAGE>
There are certain risks associated with an investment in a master-feeder
structure. Large scale redemptions by other feeder funds in a Portfolio may
reduce the diversification of a Portfolio's investments, reduce economies of
scale and increase a Portfolio's operating expenses. If the Portfolio Trust's
Board of Trustees approves a change to the investment objective of a Portfolio
that is not approved by the Trust's Board of Trustees, a Fund would be required
to withdraw its investment in the Portfolio and engage the services of an
investment adviser or find a substitute master fund. Withdrawal of a Fund's
interest in its Portfolio, which may be required by the Trust's Board of
Trustees without shareholder approval might cause the Fund to incur expenses it
would not otherwise be required to pay.
If a Fund is requested to vote on a matter affecting the Portfolio in which
it invests, the Fund will call a meeting of its shareholders to vote on the
matter. The Fund will then vote on the matter at the meeting of the Portfolio's
investors in the same proportion that the Fund's shareholders voted on the
matter. The Fund will vote those shares held by its shareholders who did not
vote in the same proportion as those Fund shareholders who did vote on the
matter.
A majority of the Trustees who are not "interested persons" (as defined in the
Investment Company Act of 1940, as amended (the "1940 Act")) of the Trust or the
Portfolio Trust, as the case may be, have adopted 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.
Calculation of Performance Data
From time to time, each Fund may advertise its annual total return which is
determined by computing the average annual percentage change in the value of
$1,000 invested at the maximum public offering price for specified periods
ending with the most recent calendar quarter, assuming reinvestment of all
dividends and distributions at net asset value. The total return calculation
assumes a complete redemption of the investment at the end of the relevant
period. Each Fund may also from time to time advertise total return on a
cumulative, average, year-by-year or other basis for various specified periods
by means of quotations, charts, graphs or schedules.
From time to time, a Fund may compare its performance in publications 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, a Fund's performance may be
compared to alternative investment or savings vehicles or to indices or
indicators of economic activity.
The EAFE Index. The EAFE Index is a market capitalization weighted foreign
securities index which is widely used to measure the performance of European,
Australian, and Far Eastern stock markets. The EAFE Index currently includes
over 1,000 companies drawn from the following 21 countries: Australia, Austria,
Belgium, Denmark, Finland, France, Germany, Hong Kong, Ireland, Italy, Japan,
Malaysia, The Netherlands, New Zealand, Norway, Portugal, Singapore, Spain,
Sweden, Switzerland and the United Kingdom.
The S&P 500 Index. The S&P 500 Index is a market weighted compilation of 500
common stocks selected on a statistical basis by Standard & Poor's. Total return
for the S&P 500 Index assumes reinvestment of dividends. The S&P 500 Index is
typically composed of issues in the following sectors: industrial, financial,
public utilities and transportation. Most stocks that comprise the S&P 500 Index
are traded on the New York Stock Exchange, although some are traded on the
American Stock Exchange and in the OTC market.
The Russell 2000 Index. The Russell 2000 Index is composed of approximately
2,000 small capitalization common stocks and is generally representative of
unmanaged small capitalization stocks in the U.S. markets. A company's stock
market capitalization is the total market value of its floating outstanding
shares.
The Russell 2000 Growth Index. The Russell 2000 Growth Index is composed of
approximately 2,000 small capitalization common stocks and is generally
considered to be representative of those Russell 2000 companies with higher
price-to-book ratios and forecasted growth.
Dividends and Distributions
The Funds' dividends from short-term and long-term capital gains, if any,
after reduction by capital losses, will be declared and distributed at least
annually. The Small Cap, Small Cap II and International Equity Fund's dividends
from net investment income will also be declared and distributed annually. The
Equity Fund's dividends from net investment income will be declared and
distributed quarterly. In determining the amounts of its dividends, the Equity
Fund, Small Cap Fund and Small Cap II Fund will take into account their share of
the income, gain or loss, expense, and any other tax items of its corresponding
Portfolio. Dividends from net investment income and capital gains distributions,
if any, are automatically reinvested in additional shares of the applicable Fund
unless the shareholder elects to receive them in cash.
Purchase of Shares
Shares of the Funds may be purchased from Standish Fund Distributors, which
offers the Funds' 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 Standish Fund Distributors and payment for the shares is
received by the Fund's custodians (the "Custodians"). Investors Bank & Trust
Company serves as custodian for the Equity Fund, Small Cap Fund and Small Cap II
Fund and Morgan Stanley Trust Company serves as custodian for the International
Equity Fund. Please see each Fund's account application or call (800) 221-4795
for instructions on how to make payment for Fund shares. Each Fund requires
minimum initial investments of $100,000. Additional investments must be in
amounts of at least $10,000. Certificates for Fund shares are not issued. Shares
of the Funds may also be purchased through securities dealers. Orders for the
purchase of Fund shares received by broker-dealers by the close of regular
trading on the New York Stock Exchange ("NYSE") on any business day and
transmitted to
Standish Group of Equity Funds 15 Revised May 15, 1998
<PAGE>
Standish Funds Distributor or its agent 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 NYSE on that day, if payment for the shares is also
received by the Custodians 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 broker-dealers to transmit orders so they will be received by
Standish Fund Distributors before the close of its business day. Shares of a
Fund purchased through broker-dealers may be subject to transaction fees on
purchase or redemption, no part of which will be received by the Funds, Standish
Fund Distributors or the Advisers.
In the sole discretion of the Trust, each Fund may accept securities instead
of cash for the purchase of shares. The Trust will ask the applicable Adviser to
determine that any securities acquired by the Funds in this manner are
consistent with the investment objective, policies and restrictions of the
applicable Fund. The securities will be valued in the manner stated below. The
purchase of Fund shares by a transfer of 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 a Fund's shares, (ii) to reject purchase orders when in the best
interest of a Fund, (iii) to modify or eliminate the minimum initial or
subsequent investment in Fund shares and (iv) to eliminate duplicate mailings of
Fund material to shareholders who reside at the same address. A Fund's
investment minimums do not apply to accounts for which Standish or any of its
affiliates serves as investment adviser or to employees of Standish or any of
its affiliates or to members of such persons' immediate families. A Fund's
investment minimums apply to the aggregate value invested in omnibus accounts
rather than to the investment of the underlying participants in the omnibus
accounts.
Net Asset Value
Each Fund's net asset value per share is computed each day on which the NYSE
is open as of the close of regular trading on the NYSE (normally 4:00 p.m., New
York City time). The net asset value per share is calculated by determining the
value of all a Fund's assets (the value of their investments in the
corresponding Portfolio and other assets in the case of the Standish Feeder
Funds), subtracting all liabilities and dividing the result by the total number
of shares outstanding. Equity securities are valued at the last sale prices on
the exchange or national securities market on which they are primarily traded.
Equity 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 accurate market prices are not readily
available and all other assets are valued at fair value as determined in good
faith by the applicable 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 unless
the Trustees determine that amortized cost does not represent fair value. 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 the value on
such date unless the Trustees determine during such sixty-day period that
amortized cost does not represent fair value.
Portfolio securities traded on more than one U.S. national securities
exchange or on a U.S. exchange and a foreign securities exchange are valued at
the last sale price from the exchange representing the principal market for such
securities on the business day when such value is determined. The value of all
assets and liabilities expressed in foreign currencies will be converted into
U.S. dollar values at currency exchange rates determined by Investors Bank and
Trust Company, the Funds' transfer agent, to be representative of fair levels at
times prior to the close of trading on the NYSE. If such rates are not
available, the rate of exchange will be determined in good faith under
procedures established by the Trustees. Trading in securities on European and
Far Eastern securities exchanges and OTC markets is normally completed well
before the close of business on the NYSE and may not take place on all business
days that the NYSE is open and may take place on days when the NYSE is closed.
Events affecting the values of portfolio securities that occur between the time
their prices are determined and the close of regular trading on the NYSE will
not be reflected in the Funds' calculation of net asset values unless the
Adviser determines that the particular event would materially affect net asset
value, in which case an adjustment may be made.
Exchange of Shares
Shares of the Funds may be exchanged for shares of one or more other funds in
the Standish fund family subject to the terms and restrictions imposed on the
purchase of shares of such funds. Shares of a Fund redeemed in an exchange
transaction are valued at the net asset value next determined after the exchange
request is received by Standish Fund Distributors or its agent. Shares of a fund
purchased in an exchange transaction are valued at the net asset value next
determined after the exchange request is received by Standish Fund Distributors
or its agent and payment for the shares is received by the fund into which
shares are to be exchanged. Until receipt of the purchase price by the fund into
which 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 fund family, please call (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
Standish Fund Distributors, P.O. Box 1407, Boston, Massachusetts 02205-1407. 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 described under "Written Redemption" below.
Standish Group of Equity Funds 16 Revised May 15, 1998
<PAGE>
Telephone Exchanges. Shareholders who elect telephone privileges may exchange
shares by calling Standish Fund Distributors at (800) 221-4795. Telephone
privileges are not available to shareholders automatically. Proper
identification will be required for each telephone exchange. Please see
"Telephone Transactions" below for more information regarding telephone
transactions.
General Exchange Information. All exchanges are subject to the following
exchange restrictions: (i) the fund into which shares are being exchanged must
be lawfully available 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 has been received by Standish Fund Distributors. 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 or repurchased by the methods described
below at the net asset value per share next determined after receipt by Standish
Fund Distributors or its agent of a redemption or repurchase request in proper
form. Redemptions will not be processed until a completed account application
and payment for the shares to be redeemed have been received.
Written Redemption. Shares of each Fund may be redeemed by written order to
Standish Fund Distributors, P.O. Box 1407, Boston, Massachusetts 02205-1407. 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 NYSE's Medallion
Signature Program or by any one of the following institutions, provided that the
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. Standish Fund
Distributors reserves the right to waive the requirement that signatures be
guaranteed. 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 Standish Fund Distributors of a written
redemption request in proper form. If shares to be redeemed were recently
purchased by check, the Funds may delay transmittal of redemption proceeds until
such time as they are assured that good funds have been collected for the
purchase of the shares. This may take up to fifteen (15) days in the case of
payments made by check.
Telephone Redemption. Shareholders who elect telephone privileges may redeem
shares by calling Standish Fund Distributors at (800) 221-4795. Telephone
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 telephone 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 telephone redemption.
Repurchase Order. In addition to telephonic and written redemption of Fund
shares, Standish Fund Distributors may accept telephone orders from brokers or
dealers for the repurchase of Fund shares. Brokers and dealers are obligated to
transmit repurchase orders to Standish Fund Distributors promptly prior to the
close of Standish Fund Distributors' 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 Standish Fund Distributors 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
Advisers, Standish Fund Distributors, the Trust and the Custodians 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 telephone instructions
are genuine and follow telephone instructions that they reasonably believe to be
genuine, neither the Advisers, Standish Fund Distributors, the Trust, the
applicable Fund, the Custodians, nor their respective officers or employees,
will be liable for any loss, expense or cost arising out of any request for a
telephone 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 transaction procedures, and if they do
not, a Fund may be liable for any losses due to unauthorized or fraudulent
instructions. All telephone transaction requests will be recorded. Shareholders
Standish Group of Equity Funds 17 Revised May 15, 1998
<PAGE>
may experience delays in exercising telephone transaction privileges during
periods of abnormal market activity. During these periods, shareholders should
transmit 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 applicable Fund's or
Portfolio's portfolio investments at the time of redemption or repurchase. The
Funds intend to pay cash for all shares redeemed, but under certain conditions,
the Funds may make payments wholly or partially in securities for this purpose.
Please see the Statement of Additional Information for further information.
Each 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 to increase the value of the account to an
amount at least equal to the stated minimums.
Management
Trustees. Each Fund is a separate investment series of the Trust, a
Massachusetts business trust. Under the terms of the Agreement and Declaration
of Trust establishing the Trust, the Trustees of the Trust are ultimately
responsible for the management of its business and affairs. Each Portfolio is a
separate investment series of the Standish, Ayer & Wood Master Portfolio
("Portfolio Trust"), a master trust fund organized under the laws of the State
of New York. Under the terms of the Declaration of Trust, each Portfolio's
affairs are managed under the supervision of the Portfolio Trust's 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 Advisers. Standish, One Financial Center, Boston, Massachusetts
02111, serves as investment adviser to the Equity Portfolio, Small Cap Portfolio
and Small Cap II Portfolio pursuant to separate investment advisory agreements.
Standish is a Massachusetts corporation incorporated in 1933 and is a registered
investment adviser under the Investment Advisers Act of 1940.
SIMCO, One Financial Center, Boston, Massachusetts 02111, serves as
investment adviser to the International Equity Fund pursuant to an investment
advisory agreement and manages the International Equity Fund's investments and
affairs subject to the supervision of the Trustees of the Trust. SIMCO is a
Delaware limited partnership which was organized in 1991 and is a registered
investment adviser under the Investment Advisers Act of 1940. The general
partner of SIMCO is Standish, which holds a 99.98% partnership interest. The
limited partners, who each hold a 0.01% interest in SIMCO, are Walter M. Cabot,
Sr., Director and Senior Adviser to Standish, and D. Barr Clayson, Chairman of
the Board and Vice President of SIMCO and a Managing Director and Vice President
of Standish. Ralph S. Tate, a Managing Director of Standish, is President and a
Director of SIMCO. Richard S. Wood, Vice President and a Managing Director of
Standish and the President of the Trust, is the Executive Vice President and a
Director of SIMCO.
Standish and SIMCO provide fully discretionary management services and
counseling and advisory services to a broad range of clients throughout the
United States and abroad. As of December 31, 1997, Standish and SIMCO managed
approximately $39 billion of assets.
The Equity 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
master-feeder structure on May 3, 1996. During the past five years, Mr. Tate has
served as a Managing Director of Standish (since 1995) and President of SIMCO
(since 1996) and both Messrs. Tate and Cameron have served as a Director and
Vice President of Standish and a Director of SIMCO (since 1995 for Mr. Cameron).
The International Equity Fund's portfolio manager is Remi J. Browne, who has
been primarily responsible for the day-to-day management of the Fund's portfolio
since December 1996. During the past five years, Mr. Browne has served as Vice
President and Chief Investment Officer of SIMCO and Vice President of Standish
since 1996 and as Managing Director of Ark Asset Management Company, New York,
prior thereto.
The Small Capitalization Equity 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 in August, 1990 and of
the Portfolio's portfolio since the Fund's conversion to the master-feeder fund
structure on May 3, 1996. During the past five years, Mr. Battelle has served as
a Vice President as well as a Director of Standish.
The Small Capitalization Equity Portfolio II's portfolio has two portfolio
managers: Mr. Nicholas S. Battelle and Mr. Andrew L. Beja. Mr. Battelle has been
primarily responsible for the day-to-day management of the Portfolio since 1990.
During the past five years, Mr. Battelle has served as a Vice President as well
as a Director of Standish. Mr. Beja has been associated with Standish since
March 1996 as Senior Analyst on the small capitalization company team and is a
Vice President of Standish. Prior to joining Standish, Mr. Beja was a Vice
President and analyst at Advest, Inc. from 1985-1996.
Subject to the supervision and direction of the Trustees of the Trust and the
Portfolio Trust, Standish manages the Portfolios' investments and SIMCO manages
the International Equity Fund's investments in accordance with their respective
investment objectives and policies, recommend investment decisions, place orders
to purchase and sell securities and permit the Portfolios' and the Funds to use
the name "Standish." For these services, each Portfolio pays Standish and the
International Equity Fund pays SIMCO a monthly fee at a stated annual percentage
rate of such Portfolio's (Fund's) average daily net asset value:
Standish Group of Equity Funds 18 Revised May 15, 1998
<PAGE>
Actual Rate
Contractual Paid for the
Advisory Fee Year Ended
Annual Rate September 30, 1997
Equity Portfolio 0.50% 0.50%*
Small Cap Equity Portfolio 0.60% 0.60%*
Small Cap Equity II Portfolio 0.60% 0.00%*
International Equity Fund 0.80% 0.23%*
*The applicable Adviser has voluntarily and temporarily agreed to limit total
expenses (excluding brokerage commissions, taxes and extraordinary expenses) of
the Equity Fund, Small Cap Fund, Small Cap II Fund and International Equity Fund
to 0.70%, 0.74%. 1.00% and 1.00%, respectively, of the applicable Fund's average
daily net assets. The Small Cap II Fund and the International Equity Fund were
subject to different expense limitations during the fiscal year ended September
30, 1997. The Advisers may terminate or revise these agreements at any time
although they have no current intention to do so. If an expense limit is
exceeded, the compensation due to an Adviser shall be proportionately reduced by
the amount of such excess by a reduction or refund thereof, subject to
readjustment during the period during which such limit is in place.
Administrator. Standish serves as administrator to the Equity Fund, Small Cap
Fund and Small Cap II Fund. As administrator, Standish manages the affairs of
these Funds, provides all necessary office space and services of executive
personnel for administering the affairs of the Funds, and allows these Funds to
use the name "Standish." For these services, Standish currently does not receive
any additional compensation. The Trustees of the Trust may determine in the
future to compensate Standish for its administrative services.
Expenses. Each Portfolio and each Fund bears the expenses of its respective
operations other than those incurred by the respective Adviser under the
investment advisory agreements or the administration agreement.
Each Portfolio pays investment advisory fees; bookkeeping, share pricing and
custodian fees and expenses; expenses of notices and reports to interest
holders; and expenses of the Portfolio's administrator. Each Standish Feeder
Fund pays shareholder servicing fees and expenses, expenses of prospectuses,
statements of additional information and shareholder reports which are furnished
to existing shareholders. Each Standish Feeder Fund and its corresponding
Portfolio pays legal and auditing fees; registration and reporting fees and
expenses. The International Equity Fund, since it does not invest in a
corresponding portfolio, bears all of the expenses listed above for both the
Portfolios and the Funds. Expenses of the Trust which relate to more than one
series are allocated among such series by Standish in an equitable manner.
Standish Fund Distributors bears the distribution expenses attributable to
the offering and sale of Fund shares without subsequent reimbursement.
Each Fund's total annual operating expenses for the fiscal year ended
September 30, 1997 are described above under the caption "Financial Highlights."
Portfolio Transactions. Subject to the supervision of the Trustees of the
Trust and the Portfolio Trust, the Advisers select the brokers and dealers that
execute orders to purchase and sell portfolio securities for the Portfolios and
the International Equity Fund. The Advisers will generally seek to obtain the
best available price and most favorable execution with respect to all
transactions for the Portfolios and the International Equity Fund. The Advisers
may also consider the extent to which a broker or dealer provides research to
the Advisers and the number of Fund shares sold by the broker or dealer in
making their selection.
Year 2000 Issue. The Funds' and the Portfolios' operations depend on the
seamless functioning of computer systems in the financial service industry,
including those of the Adviser, the Custodian and the Transfer Agent. Many
computer software systems in use today cannot properly process date-related
information after December 31, 1999 because of the method by which dates are
encoded and calculated. This failure, commonly referred to as the "Year 2000
Issue," could adversely affect the handling of securities trades, pricing and
account servicing for the Funds and Portfolios. The Adviser has made compliance
with the Year 2000 Issue a high priority and is taking steps that it believes
are reasonably designed to address the Year 2000 Issue with respect to its
computer systems. The Adviser has also been informed that comparable steps are
being taken by the Funds' and Portfolios' other major service providers. The
Adviser does not currently anticipate that the Year 2000 Issue will have a
material impact on its ability to continue to fulfill its duties as investment
adviser.
Federal Income Taxes
Each Fund is a separate entity for federal tax purposes and intends to
qualify for each taxable year for taxation as a "regulated investment company"
under the Code. If it qualifies as a regulated investment company, each Fund
will not be subject to federal income tax on income (including capital gains)
distributed to shareholders in accordance with certain timing and other
requirements of the Code.
Shareholders which are taxable entities or persons will be subject to federal
income tax on dividends and capital gain distributions made by the Funds.
Dividends paid by a 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 reinvested in Fund shares. No portion of such dividends paid
by the International Equity Fund is expected to qualify for the corporate
dividends received deduction under the Code. A portion of such dividends paid by
the other Funds will generally qualify for that deduction, subject to certain
requirements and limitations under the Code. Dividends paid by a 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 capital gains, whether received in cash or reinvested in Fund
shares and without regard to how long the shareholder has held shares of the
Fund. Capital gains distributions are taxable for noncorporate shareholders at
maximum federal rates of 28% or 20%, or in unusual cases 25%, depending upon the
source. 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. Redemptions (including exchanges) and
repurchases of shares are taxable events for shareholders that are subject to
tax.
Standish Group of Equity Funds 19 Revised May 15, 1998
<PAGE>
The International Equity Fund and the Portfolios may be subject to foreign
taxes with respect to income or gains from certain foreign investments, which
will reduce the yield or return from such investments. The International Equity
Fund may, but the other Funds are not likely to, qualify to elect to pass
certain qualifying foreign taxes through to shareholders. If this election is
made, shareholders would include their shares of qualified foreign taxes in
their gross incomes (in addition to any actual dividends and distributions) and
might be entitled to a corresponding federal income tax credit or deduction.
Shareholders will receive appropriate information from the Trust if this
election is made for any year.
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 applicable 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
Funds and, unless a current IRS Form W-8 or an acceptable substitute is
furnished to the applicable Fund, to backup withholding on certain payments from
that Fund.
After the close of each calendar year, the Funds will send a notice to
shareholders that provides information about the federal tax status of
distributions to shareholders for such calendar year.
The Funds and Their Shares
The Trust was organized on August 13, 1986 as a Massachusetts business trust.
In addition to the Funds offered in this Prospectus, the Trust offers other
series to the public. Shareholders of each Fund are entitled to one full or
fractional vote for each share of that Fund. There is no cumulative voting and
shares have no preemption or conversion rights. All series of the Trust vote
together except as provided in the 1940 Act or the Declaration of Trust. The
Trust does not intend to hold annual meetings of shareholders. The Trustees will
call special meetings of shareholders to the extent required by the Trust's
Declaration of Trust or the 1940 Act. The 1940 Act requires the Trustees, under
certain circumstances, to call a meeting to allow shareholders to vote on the
removal of a Trustee and to assist shareholders in communicating with each
other. Certificates for Fund shares are not issued.
The Portfolio Trust was organized on January 18, 1996 as a New York trust. In
addition to the Portfolios, the Portfolio Trust offers interests in other series
to certain qualified investors. See "Information about the Master-Feeder
Structure" above for additional information about the Portfolio Trust.
Inquiries concerning the Funds should be made by contacting Standish Fund
Distributors at the address and telephone number listed on the back cover of
this Prospectus.
Custodians
Investors Bank & Trust Company, 200 Clarendon Street, Boston, Massachusetts
02116, serves as custodian for all cash and securities of the Portfolios and the
Equity Fund, Small Cap Equity Fund and Small Cap Equity II Fund.
Morgan Stanley Trust Company, One Pierrepont Plaza, Brooklyn, New York 11201,
serves as custodian for all cash and securities of the International Equity
Fund.
Transfer Agent and Dividend Disbursing Agent
Investors Bank & Trust Company, 200 Clarendon Street, Boston, Massachusetts
02116, serves as the Funds' transfer agent, dividend disbursing agent and
Investors Bank & Trust, Boston and Toronto, Canada, also provides accounting
services to the Funds.
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, serves
as independent accountants for the Trust and the Portfolio Trust, respectively,
and will audit the Funds' and Portfolios' financial statements annually.
Legal Counsel
Hale and Dorr LLP, 60 State Street, Boston, Massachusetts 02109, is legal
counsel to the Trust, the Portfolio Trust and Standish and its affiliates.
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 TIN-related
certifications contained in the Account Purchase Application ("Application") or
you are otherwise subject to backup withholding. A Fund will not impose backup
withholding as a result of your failure to make any certification, except the
certifications in the Application that directly relate to your TIN and backup
withholding status. 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.
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 Funds and must provide certain
certifications on IRS Form W-8 to avoid backup withholding with respect to other
payments. For further information, see Code Sections 1441, 1442 and 3406 and/or
consult your tax adviser.
Standish Group of Equity Funds 20 Revised May 15, 1998
<PAGE>
Standish Group of Equity Funds
- --------------------------------------------------------------------------------
Investment Adviser
Standish, Ayer & Wood, Inc.
One Financial Center
Boston, Massachusetts 02111
(Equity Fund, Small Capitalization Equity Fund and
Small Capitalization Equity Fund II)
Standish International Management Company, L.P.
One Financial Center
Boston, Massachusetts 02111
(International Equity Fund)
Principal Underwriter
Standish Fund Distributors, L.P.
One Financial Center
Boston, MA 02111
Independent Accountants
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, Massachusetts 02109
Custodian
Investors Bank & Trust Company
200 Clarendon Street
Boston, Massachusetts 02116
(Equity Fund, Small Capitalization Equity Fund and
Small Capitalization Equity Fund II)
Custodian
Morgan Stanley Trust Company
One Pierrepont Plaza
Brooklyn, New York 11201
(Standish International Equity Fund)
Legal Counsel
Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
================================================================================
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.
Standish Group of Equity Funds 21 Revised May 15, 1998
<PAGE>
[STANDISH LOGO] STANDISH FUNDS(SM)
One Financial Center
Boston, MA 02111-2662
(800) 729-0066
www.standishfunds.com
97-350 A
