BERWYN INCOME FUND INC, 485BPOS, 1999-04-27

BERWYN INCOME FUND INC
485BPOS, 1999-04-27

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Pre-Effective Amendment No. ______

Post-Effective Amendment No. 15

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

Amendment No. 17

(Check appropriate box or boxes.)

THE BERWYN FUNDS
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(Exact Name of Registrant as Specified in Charter)

1189 LANCASTER AVENUE, BERWYN, PENNSYLVANIA, 19312
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(Address of Principal Executive Offices) (Zip Code)

(610) 296-7222 Ext. 30
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(Registrant's Telephone Number, including Area Code)

KEVIN M. RYAN, 1189 LANCASTER AVENUE, BERWYN, PA 19312
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(Name and Address of Agent for Service)

Approximate date of PROPOSED Public Offering April 30, 1999

It is proposed that this filing will become effective (check appropriate box):

/_/ immediately upon filing pursuant to paragraph (b)
/X/ on April 30, 1999 pursuant to paragraph (b)
/_/ 60 days after filing pursuant to paragraph (a)(1)
/_/ on (date) pursuant to paragraph (a)(1)
/_/ 75 days after filing pursuant to paragraph (a)(2)
/_/ on (date) pursuant to paragraph (a)(2) of rule 485.

If appropriate, check the following box:

this post effective amendment designates a new effective date for a
previously filed post-effective amendment.

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THE BERWYN FUNDS

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BERWYN INCOME FUND
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PROSPECTUS
April 30, 1999

This Prospectus describes shares of Berwyn Income Fund, one of the
series of The Berwyn Funds (the "Trust"). Shares of Berwyn Income
Fund are sold on a no-load basis.

The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this prospectus. Any representation to
the contrary is a criminal offense.

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TABLE OF CONTENTS Page
Risk/Return Summary 3

Carefully review these sections which
summarize the Fund's investments, risks,
performance and fees Performance 4
Fees and Expenses of the Fund 5

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This section contains important additional Investment Objective,
information, including the Fund's principal Principal Investment
investment strategies and risks Strategies and
Related Risks 6

This sections contains details on the Management and Organization 9
management of the Fund

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Shareholder Information 10
Turn to this section for information on how
to open and maintain your account, including Distribution and Taxes 12
how to purchase, sell and exchange Fund shares Distributor 13

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This sections contains important financial Financial Highlights 14
information on the Fund
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RISK/RETURN SUMMARY

Investment Objective of the Fund

Berwyn Income Fund's investment objective is to provide investors with current
income while seeking to preserve capital by taking what the Fund considers
reasonable risks.

Principal Investment Strategies of the Fund

The Fund intends to achieve its objective through investment in corporate bonds,
preferred stocks, U.S. Treasury bonds and notes, debt securities issued by U.S.
Government agencies and dividend paying common stocks. The Fund's investment
adviser (the "Adviser") determines the percentage of each category of security
to hold based upon the prevailing economic and market conditions. The Fund,
however, does allow investment in common stocks when the value of the common
stocks in the Fund's portfolio is equal to or less than 30% of the value of the
Fund's net assets. The Fund uses value criteria in selecting the Fund's
investments.

Normally, the Fund will invest in a diversified
portfolio consisting of a mix of
securities, such as corporate bonds, preferred stocks and common stocks. The
Adviser may invest 100% of the Fund's net assets in corporate bonds or preferred
stocks. If the Adviser decides it is appropriate, the Adviser may invest all of
the Fund's net assets in lower rated, high yield, high risk bonds or "junk
bonds." The average maturities of bonds purchased for the Fund are typically
five to ten years. The duration of bonds purchased for the Fund will typically
vary from three to seven years. The Adviser has the discretion to vary the
average duration of the bond portfolio in order to take advantage of prevailing
trends in interest rates.

Principal Risks of Investing in the Fund

|_| Although the Fund will strive to achieve its goal, there is no assurance
that it will. The value of the Fund's investments will fluctuate with
market conditions and as a result the value of your investment in the Fund
will fluctuate. You could lose money on your investment in the Fund, or the
Fund could underperform other investments.

|_| High yield bonds entail greater risks than those found in higher rated
bonds. High yield bonds are below investment grade instruments based on the
significant risk of issuer default. High yield bonds and other fixed income
securities are sensitive to interest rate changes. Generally, when interest
rates rise, the prices of fixed income securities fall. The longer the
maturity of fixed income securities, the greater is the impact from
interest rate changes. The value of the Fund's investment will also vary
with bond market conditions.

|_| Other risks of high yield bonds include the market's relative youth, price
volatility, sensitivity to economic changes, limited liquidity, valuation
difficulties and special tax considerations.

|_| The prices of common stocks and preferred stocks are subject to market,
economic and business risks that will cause their prices to fluctuate over
time. The Fund may invest in preferred and common stocks with limited
liquidity. The Fund can invest in the preferred or common stock of
companies with small market capitalizations. Such preferred or common
stock tend to have less liquidty than the stock of companies with large
market capitalizations. The preferred stock of large companies may also
have limited liquidity, particularly if the size of the issue of such
stock is small.

An investment in the Fund is not a deposit of any bank and is not insured
or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any
other government agency.

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PERFORMANCE

The bar chart and table can help you evaluate the potential risks of
investing in Berwyn Income Fund. They show changes in the Fund's yearly
performance over the life of the Fund and compare the Fund's average annual
returns for the past one-year, five-year, and ten-year periods. Investment
performance also often reflects the risks associated with the Fund's investment
objective and policies. You should keep in mind that the Fund's past performance
is not necessarily an indication of the Fund's future performance.

30.00%|
|
|
|
| 23.00%
| 21.70% 21.00%
20.00%|
| 16.90%
|
|
| 11.90% 13.99% 13.36%
10.00%|
|
|
|
0% | -0.13% -1.10%
| -4.57%
|
-10.00%|-----------------------------------------------------------------------
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998

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Best Quarter: 1Q '92 +10.58%
Worst Quarter: 3Q '98 -6.04%

Average Annual Total Return as of 12/31/98

1 Year 5 Years 10 Years
Fund -4.57% 8.13% 11.20%
BIG* 8.71% 7.30% 9.31%
HYC** 3.98% 9.53% 11.42%
LII+ 8.12% 11.37% 11.98%

* Salomon Smith Barney Broad Investment Grade Bond Index ("BIG") is an
unmanaged index of investment grade bonds and does not include the
costs of fund operating or management expenses.

** Salomon Smith Barney High Yield Composite Index ("HYC") is a widely
recognized unmanaged index of high yield securities, and does not
include the costs of fund operating or management expenses.

+ Lipper Income Fund Index ("LII") is an unmanaged composite of the
performance of income funds, funds that invest primarily in fixed
income securities.

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<PAGE>
FEES AND EXPENSES OF THE FUND

As an investor, you pay certain fees and expenses in connection with the Fund,
which are described in the table below.

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Shareholder Transaction Fees
(Fees paid directly from your investment)
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Maximum Sales Charge (load) on Purchases (as a None
percentage of offering price)
Sales Charge on Reinvested Dividends None
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Exchange Fees None
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Annual Fund Operating Expenses
(Expenses that are deducted from Fund assets)
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Management Fee 0.50%
Distribution and Service (12b-1) Fees 0.00%
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Other Expenses 0.14%
Total Fund Operating Expenses 0.64%
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[FN] Shareholder transaction fees are paid from your account. Annual fund
operating expenses are paid out of Fund assets, so that their effect is
included in the share price. The Fund has no sales charges (loads) or Plan
12b-1 distribution fees and minimal shareholder transaction fees.

EXAMPLE

This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. The Example assumes that you
invest $10,000 in the Fund for the time periods indicated and then redeem all of
your shares at the end of those periods. The Example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower based on
these assumptions your costs would be:

One Year Three Years Five Years Ten Years
Berwyn Income Fund $67 $211 $368 $822

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INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES AND RELATED RISKS

The Berwyn Income Fund's investment objective is to provide investors with
current income while seeking to preserve capital by taking what the Fund
considers reasonable risks. The Fund invests in corporate bonds, U.S. Treasury
bonds and notes, debt securities issued by U.S. Government Agencies, preferred
stocks, and dividend paying common stocks. The Fund may invest any percentage of
its net assets in the foregoing securities the Adviser deems appropriate, except
common stocks. The Adviser may not purchase common stocks when the value of the
common stocks that the Fund owns is equal to 30% or more of the Fund's net
assets. The Adviser would not be required to sell any common stocks owned if the
value of the common stocks exceeded 30% of net assets due to appreciation of the
common stocks or depreciation in the Fund's other securities.

The Adviser uses value criteria in selecting the Fund's investments. The value
criteria can lead the Adviser to invest a significant portion of the portfolio
in securities of small companies.

Corporate Bonds -- The Fund seeks to achieve its objective by investing in the
corporate bonds of only those issuers that, in the opinion of the Adviser, have
sufficient net worth and operating cash flow to repay principal and make timely
interest payments. A corporate bond is an interest-bearing debt security issued
by a corporation. The issuer has a contractual obligation to pay interest at a
stated rate on specific dates and to repay principal (the bond's face value) on
a specified date. An issuer may have the right to redeem ("call") a bond before
maturity.

While the bond's annual interest income established by the coupon rate may be
fixed for the life of the bond, its yield (income as a percent of current price)
will reflect current interest rate levels. The bond's price rises and falls so
that its yield remains reflective of current market conditions.

The Adviser will select corporate bonds on the basis of current yield and
secondarily on the basis of anticipated long term return. The average
maturities of bonds purchased for the Fund are typically five to ten years.
The duration of bonds purchased for the Fund will typically vary from three to
seven years. The Adviser has the discretion to vary the average duration of the
bond portfolio in order to take advantage of
prevailing trends in interest rates.

When selecting corporate bonds the Adviser will take into account the
rating the bond has received from S&P and Moody's.
The Adviser has the discretion
to invest in bonds with any rating as long as the issuer is not in default
in the payment of interest or principal. The Adviser may also invest in
unrated bonds and may purchase bonds in private transactions.

Bonds rated A or higher by S&P and Moody's are considered high grade securities
and have the three highest ratings for creditworthiness. Bonds rated BBB by S&P
or Baa by Moody's are defined as medium grade securities. These securities are
considered creditworthy and of investment quality but there is a possibility
that the ability of the issuer of the securities to pay interest or repay the
principal in the future may be impaired by adverse economic conditions or
changing circumstances. Bonds rated lower than BBB or Baa are less creditworthy
than investment grade securities with the same maturity and, as a consequence,
may pay higher income. Bond securities rated BB, B, CCC or CC by S & P or Ba, B
or Caa by Moody's are regarded on balance as predominantly speculative with
respect to capacity to pay interest and repay principal.

At December 31, 1998, the Fund's portfolio was invested in investment grade and
high yield, high risk corporate bonds, preferred and common stocks and
closed-end mutual funds. Listed below are the percentages of the portfolio
invested at December 31, 1998, in securities with various bond ratings published
by Moody's and S&P as well as the percentages invested in unrated bonds,
preferred and common stocks and closed end mutual funds:

Moody's Ratings:
A: 8.8%; Baa: 14.2%; Ba: 1.7%; B: 20.4%; Caa: 0.2%; Unrated: 17%

S&P Ratings:
AA: 7.3%; BBB: 17.9%; BB: 3.4%; B: 16.7%; Unrated: 17%

Preferred and Common Stocks and Closed-End Investment Companies:
Preferred Stocks: 19.1%; Common Stocks: 18.2%;
Closed-End Investment Companies: 0.4%

The Fund will not invest in corporate bonds issued to finance a leveraged
buyout. The Fund will also diversify its portfolio and do a credit analysis of
the issuers in which it invests.

Preferred and Common Stocks -- The Fund also invests in preferred stocks and may
invest in common stocks, subject to the 30% limit described above, when the
Adviser deems it appropriate. The Adviser uses a value criteria in selecting
preferred and common stock. The portfolio allocations to preferred and common
stock are determined by the Adviser based upon the market valuation of these
securities relative to corporate bonds. The outlook for the economy is also a
consideration. During periods of economic strength, greater emphasis is placed
on preferred and common stock. Preferred stocks are
selected from two categories:
(1) stocks offering an above average yield, in the opinion of the Adviser, in
comparison to preferred stocks of the same quality; and (2) stocks offering a
potential for capital appreciation due to the business prospects of the issuer.
The Fund may also purchase preferred stocks in transactions that qualify under
Rule 144A.

Common stocks are selected from three categories: (1) stocks selling
substantially below their book value; (2) stocks selling at low valuations to
their present earnings level; and (3) stocks judged by the Adviser to have above
average growth prospects and to be selling at small premiums to their book value
or at modest valuations to their present earnings level.

The Fund purchases only common stocks that have been paying cash dividends.
Preferred stocks that have a cumulative feature do not have to be paying current
dividends in order to be purchased. If a dividend on a stock is canceled, the
Fund would not be required to sell the stock.

The method of stock selection used by the Fund may result in the Fund selecting
stocks that are not being recommended by other investment advisers or brokerage
firms and the Fund may invest in the securities of lesser known companies. The
Adviser believes, however, that any risks involved in the stocks selected for
the Fund will be minimized by diversification of the Fund's portfolio and daily
monitoring of the stock selection. In addition, the Fund only invests in stocks
listed on national exchanges or on the over-the-counter market and the Fund only
purchases stocks in companies that have been in business at least five years and
have at least $10,000,000 in assets.

Temporary Defensive Positions -- Although the Fund will normally invest
according to its objective as outlined above, the Fund may at times, for
temporary defensive purposes, invest all or a portion of its assets in no load
money market funds, savings accounts and certificates of deposit of domestic
banks with assets in excess of $1,000,000, commercial paper with the highest
investment grade rating (A-1 by S & P and P-1 by Moody's Commercial Paper
Ratings), repurchase agreements, U.S. treasury bills, or treasury notes and
treasury bonds backed by the "full faith and credit" of the U.S. Government, or
the Fund may hold cash. Investment in a no-load money market fund will result in
the Fund paying a management fee on the money invested in such fund in addition
to the operating expenses of the Fund. When the Fund invests for temporary
defensive purposes, the Fund may not achieve its investment objective.

Risks of Investing in the Fund

Investing in any mutual fund such as the Fund involves risk, including the risk
that you may receive little or no return on your investment, and the risk that
you may lose part or all of the money you invest. Before you invest in the Fund
you should carefully evaluate the risks. Because of the nature of the Fund, you
should consider an investment to be a long-term investment that typically
provides the best results when held for a number of years. The following are the
chief risks you assume when investing in the Fund.

Bond prices usually rise when interest rates fall and conversely, bond prices
fall when interest rates rise. If a bond is
subject to call and is called before
maturity, the Fund may have to reinvest the proceeds at lower market rates.

Issuers of high yield, high risk bonds are generally smaller, less creditworthy
companies or highly leveraged companies which are generally less able than more
financially stable companies to make scheduled payments of interest and
principal. The risks posed by bonds issued under such circumstances are
substantial. For example, during an economic downturn or a sustained period of
rising interest rates, highly leveraged companies or smaller, less creditworthy
companies may experience financial stress. During these periods, such companies
may not have sufficient cash flows to meet their interest payment obligations. A
company's ability to service its debt obligations may also be adversely affected
by specific corporate developments, the company's inability to meet specific
projected business forecasts, or the unavailability of additional financing. The
risk of loss due to default by the issuer may be significantly greater for the
holders of high yield, high risk bonds because such securities are unsecured and
are often subordinated to other creditors of the issuer. In addition to the risk
of default, holders of high yield, high risk bonds also face the risk of greater
market volatility than the holders of investment grade bonds. Changes in the
general level of interest rates normally affect the market value and yield of
corporate bonds. As a general rule if the level of interest rates were to
decline, these securities would increase in value and the yield would decline.
Conversely, if the interest rate level rose, bonds would decline in value and
the yield would increase. Fluctuations in the general level of interest rates
would therefore affect the value of the Fund's investments and the value of an
investment in the Fund. However, the market value of high yield, high risk bonds
may also be affected not only by changing interest rates, but also by investors'
perception of credit quality and the outlook for economic growth. When economic
conditions appear to be deteriorating, lower rated bonds may decline due to
investors' heightened concern over credit quality, regardless of prevailing
interest rates. Especially at such times, trading for high yield, high risk
bonds may become thin and market liquidity may be significantly reduced. Even
under normal conditions, the market for high yield, high risk bonds may be less
liquid than the market for investment grade bonds. In periods of reduced market
liquidity, the prices of high yield, high risk bonds may become more volatile
and these securities may experience sudden and substantial price declines.

In addition to bonds that are rated, the Fund also invests in unrated bonds.
These securities may or may not be more speculative than investment grade
securities. The risks of investing in unrated bonds depend upon the
creditworthiness of the issuer, changes in interest rates and economic and
market factors. The Adviser will determine the creditworthiness of an unrated
debt security and the issuer's ability to meet the interest and principal
obligations of such security.

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Risks How The Fund Manages These Risks

Market Risk is the risk that all or a majority of the The Fund maintains a long-term investment approach.
It manages market risk primarily through diversification
- --of asset classes, of industry sectors, of company
names, and in relation to bonds, of maturities.
The Fund does not try to predict overall market
movements and does not trade for short-term purposes.

Industry and Security Risk is the risk that the value of The Berwyn Income Fund limits its assets invested in
securities in a particular industry or the value of an any one industry and in any individual security.The
individual stock or bond will decline because of changing Adviser also follows rigorous selection process
expectations for the performance of that industry or for the individual before choosing securities for the Fund.
company issuing the stock or bond.

Lower Rated, High Yield, High Risk Fixed Income Securities The Fund may invest in fixed income securities that
include those securities rated lower than BBB by S&P or are listed in national exchanges or on the over-the
Baa by Moody's. Securities of this type are considered to counter market. The Adviser will attempt to
be of poor standing and predominantly
speculative as to their minimize the risks of investing in medium grade and
ability to repay interest and principal. high yield, high risk bonds by doing a credit anal-
ysis of the issuer, monitoring the Fund's invest-
ments and the investment environment in general. The
credit rating is not the only criterion for
selection. The Adviser examines the financial
structure of each issuer and with regard to these
securities, makes a determination as to the
issuer's ability to meet its debt obligations.
Achievement of the Fund's investment objective
is more dependent on the Adviser's credit
analysis in selecting high yield, high risk bonds
than is the case in selecting higher quality
securities. However, there can be no guarantee that
the issuer of the bonds in which the Fund invests
will not default or that the securities will not
decline in value.

Portfolio Turnover rates reflect the amount of securities The Fund normally will not invest for short-term
that are replaced from the beginning of the year to the trading purposes. However, the Fund may sell
end of the year by the Fund. The degree of portfolio securities without regard to the length of time they
activity may affect brokerage costs and other transaction have been held. The Fund anticipates that the
costs of the Fund, as well as taxes payable portfolio turnover rate will not exceed 100%.
by shareholders that are subject to federal income tax.

Small Company Investment Risk includes the general risks The securities of companies with small revenues and
of investing in common stocks such as market, economic and capitalizations in which the Fund invests, may offer
business risk that cause their prices to fluctuate over greater opportunity for capital appreciation than
time. Historically, smaller capitalization stocks have larger companies.
been more volatile in price than larger capitalization
stocks. Among the reasons for the greater price
volatility of these securities are the lower degree of
liquidity in the markets for such stocks, and the
potentially greater sensitivity of such small companies to
changes in or failure of management, and in many other
changes in competitive, business, industry and economic
conditions, including risks associated with limited
production, markets, management depth, or financial
resources.

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For additional information about the Fund's investment policies, please see the
Statement of Additional Information.

Year 2000 Issues

Like all mutual funds, the Fund and its service providers utilize systems that
must accurately process date related information on or after January 1, 2000.
If systems used by the Fund or its service providers are negatively affected by
Year 2000 issues, the Fund may not be able to handle securities trades,
payments of interest and dividends, or pricing and account services. Although,
at this time, there can be no assurance that there will be no adverse impact
on the Fund, the Fund's service providers have advised the Fund that they have
been actively working on necessary changes to their computer systems to prepare
for the Year 2000 and expect that their systems, and those of other parties they
deal with, will be prepared in time for that event. The Adviser has reviewed
the types of securities and debt obligations held as investments by the Fund to
determine the impact of the Year 2000 issues on the returned and relative
safety of principal of such securities and debt obligations. Based on this
review, the Adviser does not believe the Year 2000 issues pose any substantial
risk for such returns and safety of principal.

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MANAGEMENT AND ORGANIZATION

The Fund commenced operations as a series of shares of The Berwyn Funds, a
Delaware business trust, on April 30, 1999 in a reorganization of its
predecessor, the Berwyn Income Fund, Inc. In the reorganization, the Fund
succeeded to all the business, assets and liabilities of its predecessor.

The Killen Group, Inc. (the "Adviser") is the investment adviser to the Fund.
The Adviser is a Pennsylvania corporation that was formed in September 1982. Its
address is 1189 Lancaster Avenue, Berwyn, Pennsylvania 19312. Robert E. Killen
is Chairman, Chief Executive Officer and sole shareholder of the Adviser. Robert
Killen is also the President and Chairman of the Board of Trustees of the Trust.
Edward A. Killen, II is primarily responsible for the day-to-day management of
the Berwyn Income Fund. He managed the portfolio of the Berwyn Income Fund,
Inc., the predecessor of the Berwyn Income Fund, from July 1, 1994 to April 30,
1999. He has managed the Berwyn Income Fund since April 30, 1999. Edward Killen
has over twenty year's investment management experience. In 1978 he started work
at Compu-Val Management Associates as a portfolio manager. In February 1983, he
assumed his current position as Vice President and Secretary of the Adviser.

As of December 31, 1998, The Killen Group, Inc. was managing 335 individual
investment portfolios worth approximately $367 million. On December 31, 1998,
Berwyn Income Fund had net assets of over $103 million.

Investment Management Fees

Under the contract between the Fund and the Adviser, the Adviser provides the
Fund with investment management services. These services include advice and
recommendations with respect to investments, investment policies, the purchase
and sale of securities and the management of the Fund's resources. In addition,
employees of the Adviser manage the daily operations of the Fund under the
supervision of the Board of Trustees. For its investment advisory services, the
Adviser receives a fee of 0.50% of the Fund's average daily net assets.

Subject to the policies established by the Trust's Board of Trustees, the
Adviser is responsible for the Fund's portfolio decisions. When buying and
selling securities, the Adviser gives consideration to brokers who have assisted
in the distribution of the Fund's shares. The Fund may also pay brokerage
commissions to brokers who are affiliated with the Adviser or the Fund.

<PAGE>
SHAREHOLDER INFORMATION

Buying Shares

You may buy shares of the Fund without a sales charge. Your price for Fund
shares is the Fund's net asset value per share (NAV). Your order will be priced
at the next NAV calculated after your order is received by the Fund's Transfer
Agent. The Fund also has arrangements that permit third parties to accept orders
on the Fund's behalf, so that investors can receive the NAV calculated after the
order is received in good order by the third party.

The NAV is calculated as of the close of trading on the New York Stock Exchange
(the "Exchange") (4:00 p.m. Eastern Time) every day the Exchange is open. If we
receive your order after the close of trading, you will pay the next business
day's price. Currently, the Exchange is closed when the following holidays are
observed: New Year's Day, Martin Luther King, Jr.'s Birthday, President Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas.

The NAV is determined by dividing the value of the Fund's securities, cash and
other assets, minus all liabilities, by the number of shares
outstanding. The Fund's securities are valued each day at their market value,
which usually means the last quoted sale price on the security's principal
exchange. If market quotes are not readily available, securities will be priced
at their fair value as determined in good faith by the Board of Trustees.

Minimum Investment

|_| The minimum initial investment for each Fund is $3,000 per investor. This
investment may be divided by a single investor among different investment
accounts in each Fund or between accounts in the Berwyn Income Fund and
Berwyn Fund, another series of the Trust, that total $3,000 in the
aggregate. Subsequent investments must be at least $250.

|_| For an Individual Retirement Account (IRA), the investment is $1,000. The
minimum initial investment for a spousal IRA is $250. Subsequent
investments in IRA accounts must be at least $250. There are no minimum
investment requirements for an investment by pension or profit sharing
plan or a custodial account established for the benefit of a minor.

The Fund has an Automatic Investment Plan under which an investor may have money
transferred from the investor's checking account to the investor's account in
the Fund. If you wish to use this Plan, please contact the Fund for further
information and an application.

In Kind Purchases

An investor may exchange securities for shares of the Fund. For taxable
investors an exchange of securities for shares of the Fund will be a taxable
exchange. The securities must meet the Fund's investment objectives and
policies. The securities will be valued in the same way that the Fund's
portfolio is valued for purposes of calculating the NAV. Please contact the
Adviser for further information.

<PAGE>

Exchange of Shares

|_| You may exchange your shares of the Fund for shares of another fund managed
by the Adviser. The initial minimums for the Fund must be met ($1,000 for
IRAs and no minimum initial investment for pension or profit sharing plans
or custodial accounts for minors.).

|_| Shares may also be exchanged for shares in the Rodney Square Fund or the
Rodney Square Tax-Exempt Fund. These funds are money market funds managed
by Rodney Square Management Corporation and distributed by Rodney Square
Distributors, Inc. Exchanges will be made on the basis of the next NAV of
the funds involved that is determined after a request for an exchange has
been received. The minimum initial investment for each of the Rodney Square
funds is $1,000. A shareholder may request an exchange by calling 1 (800)
992-6757 between (9:00 a.m. and 4:00 p.m. Eastern Time) on any business day
or by writing to the Fund's Transfer Agent.

|_| A shareholder in the Fund, however, will only be permitted to exchange
shares in his or her account for shares of one of the other funds four
times in any twelve-month period. A shareholder in a Rodney Square fund may
exchange shares of the Rodney Square fund for shares of the Fund as often
as he or she wishes. The Fund reserves the right to amend or change the
exchange privilege upon 60 days' notice to shareholders.

Redeeming Shares

|_| You may redeem your shares at any time. The shares will be redeemed at the
next NAV calculated after the redemption request has been received by the
Fund's Transfer Agent. You may redeem your shares by sending a written
request to the Fund's Transfer Agent. If you have selected the telephone
redemption option on your application, you may redeem up to $5,000 worth of
shares by calling the Transfer Agent at 1 (800) 992-6757 on any business
day between the hours of 9:00 a.m. and 4:00 p.m. Eastern Time. The Fund
will use reasonable procedures to confirm that instructions communicated by
telephone are genuine and, if the procedures are followed, will not be
liable for any losses due to unauthorized or fraudulent telephone
transactions.

|_| Generally, there is no sales charge for redeeming shares.

Shareholders may buy and sell shares of the Fund through broker dealers who may
charge a fee for such service. In addition, if a shareholder redeems shares
through the Transfer Agent and requests that the proceeds be wired to the
shareholder, the Transfer Agent may charge the shareholder a wiring fee.

DISTRIBUTION AND TAXES

The Fund distributes annually substantially all of its net investment income
and any net realized capital gains. Dividends from net investment income will be
paid quarterly. Unless a shareholder requests otherwise in the account
application, dividends and capital gains distributions will be automatically
reinvested in shares of the Fund at the NAV on the Fund's ex-dividend date.

In general, Fund distributions are taxable to you as either ordinary income or
capital gains. This is true whether you reinvest your distributions in
additional shares of the Fund or receive them in cash. Any capital gains the
Fund distributes are taxable to you as long-term capital gains no matter how
long you have owned your shares. It is not ordinarily to your advantage to buy
shares in the Fund shortly before the Fund makes a distribution because part of
your investment will come back to you as a taxable distribution.

When you sell or redeem your shares of the Fund, you may have a capital gain or
loss. For tax purposes, an exchange of your Fund shares for shares of the Berwyn
Fund, the Rodney Square Fund or the Rodney Square Tax-Exempt Fund is the same as
a sale. The individual tax rate on any gain from the sale or exchange of your
shares depends on how long you have held your shares.

Fund distributions and gains from the sale or exchagne of your shares will
generally be subject to state and local income tax. Non-U.S. investors may be
subject to U.S. withholding and estate tax. You should consult your tax
advisor about the federal, state, local or foreign tax consequences of your
investment in the Fund.

By law, the Fund is required to withhold 31% of your taxable distributions and
proceeds if you do not provide your correct taxpayer identification number (TIN)
or certify that your TIN is correct, or if the IRS instructs us to do so.

DISTRIBUTOR

Berwyn Financial Services Corp. ("Berwyn Financial"), located at 1189 Lancaster
Avenue, Berwyn, Pennsylvania 19312, serves as the non-exclusive distributor of
the Fund's shares pursuant to a selling agreement between Berwyn Financial and
the Trust. Under the terms of the agreement, Berwyn Financial is a selling agent
for the Fund in certain jurisdictions in order to facilitate the registration of
shares of the Fund under state securities laws and to assist in the sale of
shares. Berwyn Financial does not charge a fee for the services provided under
the selling agreement with the Fund. The Fund continues to bear the expenses of
all filing or notification fees incurred in connection with the registration of
shares under state securities laws.

FINANCIAL HIGHLIGHTS

The financial highlights table is intended to help you understand Berwyn Income
Fund's financial performance and reflects the financial performance of the
Berwyn Income Fund, Inc., the predecessor of the Fund, for the past 5 years.
Certain information reflects financial results for a single Fund share. The
total returns in the table represent the rate that an investor would have earned
or lost on an investment in the Fund (assuming reinvestment of all dividends and
distributions).

FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

YEAR ENDED

12/31/98(1) 12/31/97 12/31/96 12/31/95 12/31/94

Net Asset Value, Beginning of Year $12.51 $12.31 $11.95 $10.75 $11.63
------- ------- ------- ------- -------
Income from Investment Operations:
Net Investment Income 0.90 0.77 0.76 0.73 0.73
Net Realized and Unrealized Gains
(Losses) on Securities (1.44) 0.84 0.87 1.48 (0.85)
------- ------- ------- ------- -------

Total from Investment Operations (0.54) 1.61 1.63 2.21 (0.12)
------- ------- ------- ------- -------

Less Distributions:
From Net Investment Income (0.92) (0.77) (0.80) (0.70) (0.73)
From Net Realized Gains (0.15) (0.64) (0.47) (0.31) (0.03)
From Capital (0.18) (0.00) (0.00) (0.00) (0.00)
------- ------- ------- ------- ------
Total Distributions (1.25) (1.41) (1.27) (1.01) (0.76)
------- ------- ------- ------- ------

Net Asset Value, End of Year $10.72 $12.51 $12.31 $11.95 $10.75

Total Return (4.57%) 13.36% 13.99% 21.0% (1.10%)

Ratios/Supplemental Data:
Net Assets, End of Period (000) $103,624 $180,823 $137,166 $119,552 $55,825

Ratio of Expenses to Average Net Assets 0.66% 0.65% 0.68% 0.73% 0.93%
Ratio of Net Investment Income to
Average Net Assets 6.27% 6.15% 6.35% 6.78% 7.20%
Portfolio Turnover Rate 31% 53% 38% 39% 30%

(1) Effect of change in accounting principle (see Note 5 to the financial statements)
is to increase per share net income by $0.04 and ratio of net investment
income to average net assets by 0.3%.

</TABLE>

<PAGE>

Berwyn Income Fund

More information about the Fund's investments is available in the Fund's Annual
and Semi-Annual Report to Shareholders.
In the Fund's Annual Reports to
Shareholders, you will find a discussion of the market conditions and investment
strategies that significantly affected the performance of the Fund's predecessor
during its last fiscal year. You can find more detailed information about the
Fund in the current Statement of Additional Information ("SAI"), which we have
filed with the Securities and Exchange and which is legally a part of this
prospectus. If you want a free copy of the SAI, the Annual or Semi-Annual
Report, or if you have any questions about investing in the Fund, you can write
to us at Berwyn Income Fund, Shareholder Services, c/o PFPC, P. O. Box 8987,
Wilmington, DE 19899 or call toll free 800-992-6757.

You can find reports and other information about the Fund on the SEC web site
(http://www.sec.gov), or you can get copies of this information after payment of
a duplicating fee, by writing to the Public Reference Section of the SEC,
Washington, DC 20549-6009. Information about the Fund, including the SAI, can be
reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can
get information on the public reference room by calling the SEC at 800-SEC-0330.

Shareholder Services

PFPC Inc.
P.O. Box 8987
Wilmington, Delaware 19899

800-992-6757 (toll-free)

(Investment Company Act File Number 811-4963)

<PAGE>

THE BERWYN FUNDS
- --------------------------------------------------------------------------------

BERWYN FUND

- --------------------------------------------------------------------------------

PROSPECTUS
April 30, 1999

This Prospectus describes shares of the Berwyn Fund, one of the
series of The Berwyn Funds (the "Trust"). Shares of Berwyn Fund
are sold on a no-load basis.

The Securities and Exchange Commission has not approved or disapproved
these securities or passed upon the adequacy of this prospectus. Any
representation to the contrary is a criminal offense.

TABLE OF CONTENTS Page
Risk/Return Summary 3

Carefully review these sections which
summarizes the Fund's investments, risks, Performance 4
performance and fees Fees and Expenses of the Fund 5

- ---------------------------------------- ----------------------------- ----

This section contains important additional Investment Objective, Principal Investment 6
information, including the Fund's principal Strategies and Related Risks
investment strategies and risks

This sections contains details on the Management and Organization 9
management of the Fund

- ---------------------------------------- ----------------------------- ----

This sections contains important financial Financial Highlights 13
information on the Fund
</TABLE>

<PAGE>

RISK/RETURN SUMMARY

Investment Objective of the Fund
Berwyn Fund seeks to achieve long-term capital appreciation; current income is a
secondary consideration.

Principal Investment Strategies of the Fund
The Fund invests in common stocks and fixed income securities that offer a
potential for capital appreciation. Under normal market conditions at least 80%
of the value of the Fund's net assets will be invested in common stocks. The
principal strategy of the Fund is to achieve long term growth through
investments in equities that the Fund's investment adviser (the "Adviser")
believes are undervalued. However, during
periods of stock market adversity the
Fund may take a more defensive position through the use of investment grade
and/or junk bonds, as well as preferred stocks. The use of higher yielding
securities also serves to offset the normal operating expenses of the Fund.
Up to twenty percent of the Fund may be invested in fixed income securities.

Principal Risks of Investing in the Fund
|_| Although the Fund will strive to achieve its goal, there is no assurance
that it will. Common stock prices are subject to market, economic and
business risks that will cause their prices to fluctuate over time. While
common stocks have historically been a leading choice of long term
investors, stock prices may decline over short or even extended periods.
Therefore, the value of your investment in the Fund may down and
you could lose money.

|_| Using its investment approach may result in the Fund investing in
securities that are not in favor with other investment advisers or brokers
or securities of lesser known companies. The Fund's investment success
depends on the skill of the Adviser in evaluating, selecting, and
monitoring the Fund's investments. If the Adviser's conclusions about
growth rates or stock values are incorrect, the Fund may not perform as
anticipated.

|_| High yield bonds ("junk bonds") entail greater risks than those found in
higher rated bonds. High yield bonds are below investment grade instruments
based on the significant risk of issuer default. High yield bonds and other
fixed income securities are sensitive to interest rate changes. Generally,
when interest rates rise, the prices of fixed income securities fall.
The longer the maturity of fixed income securities, the greater is the
impact from interest rate changes. The value of the Fund's investments
will also vary with bond market conditions.

|_| Other risks of high yield bonds include the market's relative youth, price
volatility, sensitivity to economic changes, limited liquidity, valuation
difficulties and special tax considerations.

|_| Lastly, the Fund is considered "non-diversified" under federal laws and
regulations. This means that the Fund may invest a greater portion of its
net assets in the shares of individual companies than a diversified fund
could. Changes in the financial condition or market assessment of these
companies may cause greater fluctuations in the share value of the Fund
than in the share value of a diversified fund.

An investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency.

<PAGE>

PERFORMANCE

The bar chart and table can help you evaluate the potential risks of investing
in the Berwyn Fund. They show changes in the Fund's yearly performance over the
life of the Fund and compare the Fund's average annual returns for the past
one-year, five-year, and ten-year periods. Investment performance also often
reflects the risks associated with the Fund's investment objective and policies.
You should keep in mind that the Fund's past performance is not necessarily an
indication of the Fund's future performance.

60.00%|
|
50.00%|
| 43.70%
40.00%|
|
30.00%|
| 22.90% 26.05%
20.00%| 20.60% 19.18%
|16.50% 14.35%
10.00%|
| 3.90%
0% |
|
-10.00%|-----------------------------------------------------------------------
|
| -18.90%
-20.00%|
| -23.90%
-30.00%|
|
-40.00%|

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998

Best Quarter: 1Q '91 +23.91%
Worst Quarter: 3Q '98 -22.73%

- -------------------------------------------------------------------------------

Average Annual Total Return as of 12/31/98

1 Year 5 Years 10 Years
------ ------- --------
Fund -18.90% 7.65% 10.01%

Russell 2000 Index* -2.55% 11.87% 12.92%

* The Russell 2000 Index is an unmanaged index of securities and does
not include the actual costs of fund operation or management expenses.

<PAGE>

FEES AND EXPENSES OF THE FUND

As an investor, you pay certain fees and expenses in connection with the Fund,
which are described in the table below.

- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Shareholder Transaction Fees
(Fees paid directly from your investment)
- ------------------------------------------------------------------------------

Maximum Sales Charge (load) on Purchases (as a percentage of None
offering price)

Sales Charge on Reinvested Dividends None

Redemption Fees* 1.00%

Exchange Fees None
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

Management Fee 1.00%

Distribution and Service (12b-1) Fees 0.00%

Other Expenses 0.20%

Total Fund Operating Expenses 1.20%

- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

* A redemption fee of 1.00% is assessed if shares are redeemed in less than one
year from the date of purchase.

[FN] Shareholder transaction fees are paid from your account. Annual fund
operating expenses are paid out of Fund assets, so that their effect
is included in the share price. The Fund has no sales charges (loads)
or Rule 12b-1 distribution fees and minimal shareholder transaction
fees.

EXAMPLE

This Example is intended to help you compare the cost of investing in the Berwyn
Fund with the cost of investing in other mutual funds. The Example assumes that
you invest $10,000 in the Fund for the time periods indicated and then redeem
all of your shares at the end of those periods. The Example also assumes that
your investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions, your costs would be:

- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
One Year Three Years Five Years Ten Years
Berwyn Fund $122 $381 $660 $1,455
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

<PAGE>

INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES
AND RELATED RISKS

The investment objective of the Berwyn Fund is to seek long-term (i.e., greater
than one year) capital appreciation; current income is a secondary
consideration. The Fund is a non-diversified, open-end management investment
company. Being non-diversified means that the Fund may invest a greater portion
of its net assets in the shares of individual issuers.

Even though the Fund is considered non-diversified, it has placed restrictions
on its investment policy for purposes of diversification. Two particularly
significant restrictions are: (1) with respect to 50% of the value of its total
assets, the Fund will not, at the time of purchase, invest more than 5% of the
value of its total assets, at market value, in the securities of any one issuer,
except the securities of the U.S. government, and (2) with respect to the other
50% of the market value of its total assets, the Fund will not invest at the
time of purchase more than 15% of the market value of its total assets in any
single issuer. With these two restrictions, hypothetically, the Fund could hold
a portfolio with investments in as few as 14 issuers. The Fund does not
anticipate having a portfolio with as few as 14 issuers. The investment policy
of the Adviser has been to use two basic guidelines in the management of
investment portfolios: (1) the initial investment in any single issuer must
comprise less than 5% of the total value of the assets in a portfolio and (2)
the initial investment in any one industry must comprise less than 20% of the
total value of the assets in a portfolio. (The maximum that the Fund will invest
in any industry will be 25% of the value of its total assets). Under normal
market conditions, the Fund follows the 5% and 20% guidelines of the Adviser.
The Fund will always adhere to this 25% limitation.

The Fund invests in what it believes to be undervalued common stock and fixed
income securities that offer a potential for long-term capital appreciation.
This approach can often result in selecting securities that are not being
recommended by other investment advisers and/or brokerage firms. In addition,
this approach can often result in the selection of securities of lesser known
companies. The Fund, however, only invests in corporations that have been in
business for at least five years and have a minimum of $10,000,000 in assets.
Also, the Fund only invests in securities listed on national exchanges or on the
over-the-counter market. The Adviser is a "value" manager. Where value is found
in the marketplace is dependent upon many factors, including the level of
inflation, price-to-earnings ratios, as compared to interest rates, stock market
psychology and political factors. Over its history, the Adviser has, more often
than not, found small- capitalization stocks to offer more than
large-capitalization stocks. Consequently, the performance of the Fund has been
typified by the Russell 2000 composite stock index, a smaller captitalization
index. At the present time the avearge weighted market capitalization for the
Fund is under $900 million, which is comparable to that of the Russell 2000.

Common Stocks -- Under normal market conditions, the Fund invests at least 80%
of the value of its net assets in common stocks. The Fund selects common stock
investments from three broad areas: (1) companies selling substantially below
their book value; (2) companies selling at a low valuation to their present
earnings level; and (3) companies judged by the Adviser to have above-average
growth prospects over the next three-to-five year period and to be selling, in
the opinion of the Adviser, at small premiums to their book value, or at modest
valuations to their present earnings level.

The Adviser believes that (i) its strategy of investing in undervalued common
stock offers the potential for long-term capital appreciation above that of the
leading stock market indices (i.e., Dow Jones Industrial Average, Standard &
Poor 500 Index, Russell 2000 and the Value Line Composite), and (ii) use of the
guidelines of the Adviser for portfolio management together with the investment
restrictions previously described will lessen the risks in this investment
approach.

Corporate Bonds -- A corporate bond is an interest-bearing debt security issued
by a corporation. The issuer has a contractual obligation to pay interest at a
stated rate on specific dates and to repay principal (the bond's face value) on
a specified date. An issuer may have the right to redeem ("call") a bond before
maturity.

While the portfolio of the Fund emphasizes investment in common stock, the Fund
may invest up to 20% of the value of its net assets in fixed income securities
(corporate bonds and preferred stocks.) The Fund invests in fixed income
securities when the Adviser believes prevailing interest rates offer long-term
capital appreciation. The fixed income securities selected may include
securities with any of the ratings listed by Standard & Poor's Ratings Group
("S&P") and Moody's Investors Service, Inc. ("Moody's"), including securities
with a S&P D rating, a Moody's C rating and unrated securities that are
determined by the Adviser to be of equivalent quality. (See Appendices A and B
in the Statement of Additional Information for S&P's and Moody's definitions of
bond ratings.) Fixed income corporate debt securities that have a BBB or Baa
rating have speculative characteristics and are riskier investments than debt
securities rated A (S&P's or Moody's rating) and higher. Fixed income securities
that have credit ratings lower than BBB (S&P's rating) or a Baa (Moody's rating)
are commonly referred to as "junk bonds". These lower rated securities are
speculative investments and investment in them is riskier than an investment in
a fixed income security with a rating of BBB or Baa or higher. The ability of
the issuer of a lower rated security to pay income or repay principal in
accordance with the terms of the obligation may be impacted more severely by
adverse economic conditions or a business downturn than the ability of an issuer
of higher rated securities. Unrated securities may or may not be considered more
creditworthy than lower rated securities.

<PAGE>

Risks of Investing in the Fund

Because the Fund is a non-diversified fund, an investment in the Fund may be a
greater risk than an investment in a diversified fund. Bond prices usually rise
when interest rates fall and conversely, bond prices fall when interest rates
rise. If a bond is subject to a call and is called before maturity, the Fund
may have to reinvest the proceeds at lower market rates.

<TABLE>
<CAPTION>
<S> <C>
Risks How the Fund Manages These Risks

Market Risk is the risk that all or a majority of the The Fund maintains a long-term investment approach and
securities in a certain market - like the stock or bond focus on stocks we believe can appreciate over an extended
market - will decline in value because of factors such as time frame regardless of interim market fluctuations. The
economic conditions, future expectations or investor Fund does not try to predict overall stock market
confidence. If the value of the majority of common stocks movements and does not trade for short-term purposes.
held by the Fund increases in value, then the net assets
of the Fund and an investment in the Fund would
normally Increase in value. If there is a decline in the
value of a majority of the common stocks of the Fund,
then the net assets of the Fund and investment in the
Fund would normally decline in value.

Industry and Security Risk is the risk that the value of The Adviser follows a rigorous selection process before
securities in a particular industry or the value of an choosing securities for the Fund.
individual stock or bond will decline because of changing
expectations for the performance of that industry
or for the individual company issuing the stock or bond.

Lower Rated, High Yield, High Risk Fixed Income The Fund may invest in fixed income securities that are
Securities include those securities rated lower than BBB listed in national exchanges or on the over-the-counter market
by S&P and Baa by Moody's. Securities of this type are The Adviser will attempt to minimize the risks of investing
considered to be of poor standing and predominantly in medium grade and high yield, high risk bonds by doing a credit
speculative as to their ability to repay interest analysis of the issuer, monitoring the Fund's investments and the
and principal. investment environment in general. The credit rating is not the only
criterion for selection. The Adviser examines the financial
structure of each issuer and with regard to these
securities, makes a determination as to the issuer's ability to meet
its debt obligations. Achievement of the Fund's investment objective is
more dependent on the Adviser's credit analysis in selecting high
yield, high risk bonds than is the case in selecting higher quality
securities. However, there can be no guarantee that the issuer
of the bonds in which the Fund invests will not default or that the
securities will not decline in value.

Portfolio Turnover rates reflect the amount of securities The Fund normally will not invest for short-term trading
that are replaced from the beginning of the year to the purposes. However, the Fund may sell securities without
end of the year by the Fund. The degree of portfolio regard to the length of time they have been held. The
activity may affect brokerage costs and othertransaction Fund anticipates that the portfolio turnover rate of the
costs of the Fund, as well as taxes payable by Fund will not exceed 100%.
shareholders that are subject to federal income tax.

Small Company Investment Risk includes the general risks The securities of companies with small revenues and
of investing in common stocks such as market, economic and capitalizations, in which the Fund invests, may offer
business risk that cause their prices to fluctuate over greater opportunity for capital appreciation than larger
time. Historically, smaller capitalization stocks have companies.
been more volatile in price than larger capitalization
stocks. Among the reasons for the greater price
volatility of these securities are the lower degree of
liquidity in the markets for such stocks, and the
potentially greater sensitivity of such small companies to
changes in or failure of management, and in many other
changes in competitive, business, industry and economic
conditions, including risks associated with limited
production, markets, management depth, or financial
resources.

</TABLE>

For additional information about the Fund's investment policies, please see the
Statement of Additional Information.

Year 2000 Issues

Like all mutual funds, the Fund and its service providers utilize systems that
must accurately process date related information on or after January 1, 2000.
If systems used by the Fund or its service providers are negatively affected by
Year 2000 issues, the Fund may not be able to handle securities trades,
payments of interest and dividends, or pricing and account services. Although,
at this time, there can be no assurance that there will be no adverse impact
on the Fund, the Fund's service providers have advised the Fund that they have
been actively working on necessary changes to their computer systems to prepare
for the Year 2000 and expect that their systems, and those of other parties they
deal with, will be prepared in time for that event. The Adviser has reviewed
the types of securities and debt obligations held as investments by the Fund to
determine the imapct of the Year 2000 issues on the returns and relative safety
of principal of such securities and debt obligations. Based on this
review, the Adviser does not believe the Year 2000 issues pose any substantial
risk for such returns and safety of principal.

MANAGEMENT AND ORGANIZATION

The Fund commenced operations as a series of shares of The Berwyn Funds, a
Delaware business trust, on April 30, 1999 in a reorganization of its
predecessor, The Berwyn Fund, Inc. In the reorganization, the Fund succeeded to
all the business, assets and liabilities of its predecessor.

Robert Killen is also the President and Chairman of the Board of the Trust. He
is the person primarily responsible for the day-to-day management of the Berwyn
Fund's portfolio. He managed the portfolio of The Berwyn Fund, Inc., the
predecessor of the Berwyn Fund, from May 4, 1984, the date of that Fund's public
offering, until April 30, 1999. Robert Killen has over twenty-five years
experience as an investment adviser. In 1969, Robert Killen cofounded Compu-Val
Management Associates, an investment advisory firm and was a 50% partner until
February 1983. At that time, The Killen Group, Inc., replaced him as the 50%
partner. The partnership of Compu-Val Management Associates was dissolved on
December 31, 1983 and The Killen Group, Inc. continued its advisory business as
a separate entity.

As of December 31, 1998, The Killen Group, Inc. was managing 335 individual
investment portfolios worth approximately $367 million. On December 31, 1998,
The Berwyn Fund, Inc. had over $62 million in net assets.

Investment Management Fees

Under the contract between the Fund and the Adviser, the Adviser provides the
Fund with investment management services. These services include advice and
recommendations with respect to investments, investment policies, the purchase
and sale of securities and the management of the Fund's resources. In addition,
employees of the Adviser manage the daily operations of the Fund under the
supervision of the Board of Trustees. For the advisory services it provides, the
Adviser receives a fee of 1.00% of the Fund's average daily net assets. The
advisory fee payable to the Adviser by the Berwyn Fund is higher than that of
many mutual funds.

SHAREHOLDER INFORMATION

Buying Shares

You may buy shares of the Fund without a sales charge. Your price for Fund
shares is the Fund's net asset value per share (NAV). Your order will be priced
at the next NAV calculated after the Fund's Transfer Agent receives your order.
The Fund also has arrangements that permit third parties to accept orders on the
Fund's behalf, so that investors can receive the NAV calculated after the order
is received in good order by the third party.

The NAV is determined by dividing the value of the Fund's securities, cash and
other assets, minus all expense and liabilities, by the number of shares
outstanding. The Fund's securities are valued each day at their market value,
which usually means the last quoted sale price on the security's principal
exchange. If market quotes are not readily available, securities will be priced
at their fair value as determined in good faith by the Fund's Board of Trustees.

Minimum Investment

|_| The minimum initial investment for the Fund is $3,000 per investor. This
investment may be divided by a single investor among different investment
accounts in the Fund or between accounts in the Berwyn Fund and Berwyn
Income Fund, another series of the Trust, that total $3,000 in the
aggregate. Subsequent investments must be at least $250.

In Kind Purchases

<PAGE>

Exchange of Shares

|_| You may exchange your shares of one Fund for shares of Berwyn Income Fund,
another series of the Trust. The initial minimums for the Funds must be met
($1,000 for IRAs and no minimum initial investment for pension or profit
sharing plans or custodial accounts for minors.).

Redeeming Shares

|_| You may redeem your shares at any time. The shares will be redeemed at the
next NAV calculated after the Fund's Transfer Agent has received the
redemption request. You may redeem your shares by sending a written request
to the Fund's Transfer Agent. If you have selected the telephone redemption
option on your application, you may redeem up to $5,000 worth of shares by
calling the Transfer Agent at 1 (800) 992-6757 on any business day between
the hours of 9:00 a.m. and 4:00 p.m. Eastern Time. The Fund will use
reasonable procedures to confirm that instructions communicated by
telephone are genuine and, if the procedures are followed, will not be
liable for any losses due to unauthorized or fraudulent telephone
transactions.

|_| Generally, there is no sales charge for redeeming shares. The Fund,
however, does charge a 1% redemption fee on shares held for less than one
year. The fee is charged on the proceeds of the redemption. The fee is paid
to the Fund and included in its net assets for the benefit of the remaining
shares. This fee is waived for those who buy and sell shares of the Fund
through third parties.

<PAGE>

DISTRIBUTION AND TAXES

The Fund distributes annually all of its net investment income and any net
realized capital gains. Unless a shareholder requests otherwise in the account
application, dividends and capital gains distributions will be automatically
reinvested in shares of the Fund at the NAV on the Fund's ex-dividend date.

It is not ordinarily to your advantage to buy shares in the Fund shortly before
the Fund makes a distribution because part of your investment will come back to
you as a taxable distribution.

Every January, you will receive a statement that shows the tax status of
distributions you received for the previous year. Distributions declared in
December but paid in January are taxable as if they were paid in December. The
Adviser expects that the majority of the payments from the Fund will be
long-term capital gains distributions.

When you sell or redeem your shares of the Fund, you may have a capital gain or
loss. For tax purposes, an exchange of your Fund shares for shares of the Berwyn
Income Fund, the Rodney Square Fund or the Rodney Square Tax-Exempt Fund is the
same as a sale. The individual tax rate on any gain from the sale or exchange of
your shares depends on how long you have held your shares.

Fund distributions and gains from the sale or exchange of your shares will
generally be subject to state and local income tax. Non-U.S. investors may be
subject to U.S. withholding and estate tax. You should consult your tax advisor
about the federal, state, local or foreign tax consequences of your investment
in the Fund.

DISTRIBUTOR

<PAGE>

FINANCIAL HIGHLIGHTS

The financial highlights table is intended
to help you understand the Berwyn
Fund's financial performance and reflects the financial performance of The
Berwyn Fund, Inc., the predecessor of the Fund,
for the past 5 years. Certain
information reflects financial results for a single Fund share. The total
returns in the table represent the rate that an investor would have
earned or lost on an investment in the Fund (assuming reinvestment of
all dividends and distributions).

FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

YEAR ENDED

12/31/98 12/31/97 12/31/96 12/31/95 12/31/94

Net Asset Value, Beginning of Year $22.01 $19.69 $19.43 $17.55 $17.67
------- ------- ------- ------- -------
Income from Investment Operations:
Net Investment Income (Loss) (0.09) 0.00 (0.02) 0.00 0.02
Net Realized and Unrealized Gains
(Losses) on Securities (4.11) 5.06 2.78 3.34 0.65
------- ------- ------- ------- -------
Total from Investment Operations (4.20) 5.06 2.76 3.34 0.67
------- ------- ------- ------- -------

Less Distributions:
Dividends from Net Investment Income 0.00 0.00 0.00 (0.01) (0.01)
Distributions from Net Realized Gains (0.85) (2.74) (2.50) (1.45) (0.78)
------- ------- ------- ------- -------

Total Distributions (0.85) (2.74) (2.50) (1.46) (0.79)
------- ------- ------- ------- -------

Net Asset Value, End of Year $16.96 $22.01 $19.69 $19.43 $17.55

Total Return (18.90%) 26.05% 14.35% 19.18% 3.90%

Ratios/Supplemental Data:
Net Assets, End of Period (000) $62,862 $100,406 $94,056 $97,234 $63,522

Ratio of Expenses to Average Net Assets 1.20% 1.20% 1.21% 1.23% 1.33%

Ratio of Net Investment Income (Loss) to
Average Net Assets (0.45%) (0.02%) (0.10%) 0.04% 0.11%

Portfolio Turnover Rate 19% 26% 32% 32% 24%

</TABLE>

<PAGE>

Berwyn Fund

More information about the Fund's investments is available in the Fund's Annual
and Semi-Annual Reports to Shareholders. In the Fund's Annual Report to
Shareholders, you will find a discussion of the market conditions and investment
strategies that significantly affected the performance of the Fund's predecessor
during its last fiscal year. You can find more detailed information about the
Fund in the current Statement of Additional Information ("SAI"), which we have
filed with the Securities and Exchange and which is legally a part of this
prospectus. If you want a free copy of the SAI, the Annual or Semi-Annual
Report, or if you have any questions about investing in the Fund, you can write
to us at The Berwyn Fund, Shareholder Services, c/o PFPC, P. O. Box 8987,
Wilmington, DE 19899 or call toll free 1-800-992-6757.

Shareholder Services

PFPC Inc.
P.O. Box 8987
Wilmington, Delaware 19899

800-992-6757 (toll-free)

(Investment Company Act File Number 811-4963)

<PAGE>

THE BERWYN FUNDS
Berwyn Income Fund, a Series of The Berwyn Funds
Shareholder Services
c/o PFPC Inc.
P.O. Box 8987
Wilmington, DE 19899
1 (800) 992-6757

STATEMENT OF ADDITIONAL INFORMATION

April 30, 1999

This Statement of Additional Information ("SAI") is not a Prospectus. The SAI is
a document that relates to the Prospectus of the Berwyn Income Fund series (the
"Fund") of The Berwyn Funds (the "Trust") dated April 30, 1999 and contains
additional information regarding the Fund. This SAI should be read in
conjunction with the Prospectus. The Prospectus may be obtained by writing to
the Fund at the above address or calling the 800 number. The audited financial
statements and notes thereto for the year ended December 31, 1998 of the Berwyn
Income Fund, Inc. ("BIF"), the predecessor of the Fund, and the report of
PricewaterhouseCoopers LLP, the Fund's independent accountants, on such
financial statements (the "Report"), included in BIF's 1998 Annual Report
to Shareholders will be incorporated by reference in this SAI by amendment to
the Trust's registration statement.

<PAGE>
TABLE OF CONTENTS

Investment Policies and Risk Factors....................................... 1

Investment Restrictions.................................................... 3

Investment Advisory Arrangements........................................... 5

Expense Limitation......................................................... 5

Trustees and Officers...................................................... 6

Ownership of the Fund...................................................... 8

Portfolio Transactions and Brokerage Commissions........................... 8

Computation of Net Asset Value............................................. 9

Share Purchases............................................................ 9

Distributor................................................................ 10

Redemption of Shares....................................................... 10

Calculation of Performance Data............................................ 10

General Information........................................................ 12

Distribution and Taxes..................................................... 12

Financial Statements....................................................... 15

<PAGE>

INVESTMENT POLICIES AND RISK FACTORS

(See also "Investment Objectives, Principal Investment Strategies and Related
Risks" in the Fund's Prospectus.)

The Fund is a no-load, diversified series of shares of The Berwyn Funds, an
open-end, management investment company. Its investment objective is to provide
investors with current income while seeking to preserve capital by taking what
the Fund considers to be reasonable risks. In pursuing its investment objective,
the Fund may also offer, as a secondary consideration, the potential for capital
appreciation. To achieve its objective, the Fund invests in investment grade
corporate debt securities, securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities, high yield, high risk corporate
debt securities (also known as "junk bonds"), unrated corporate debt securities,
and preferred and common stocks. The Adviser determines the percentage of each
category of securities to purchase and hold based upon the prevailing economic
and market conditions. This means, that the Fund may invest up to 100% of its
net assets in high yield, high risk corporate debt securities. The Fund,
however, may not invest in common stock when the value of the common stock in
the Fund's portfolio equals or exceeds 30% of the value of the Fund's net
assets.

Securities rated BBB or higher by Standard & Poor's Rating Group ("S&P") or Baa
or better by Moody's Investors Service, Inc. ("Moody's") are considered
investment grade corporate debt securities. Securities rated lower than BBB or
Baa by these services are considered high yield securities. Appendices A and B
list the definitions of the S&P and Moody's bond ratings.

The Fund may invest in fixed income securities that are not rated. The Fund will
only invest in unrated securities that have a creditworthiness, in the opinion
of the Adviser, that is equal to or better than the creditworthiness of fixed
income securities with S&P ratings of CC or Moody's ratings of Caa.

The Fund may also purchase certain debt securities that have not been registered
with the U.S. Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended ("1933 Act"), and are restricted from sale to
the general public. The Fund will purchase these restricted securities from the
issuer or qualified institutional buyers, and will sell these restricted
securities, exclusively in transactions that are exempt pursuant to Rule 144A
under the 1933 Act. The Fund will limit its investment in such restricted
securities to no more than 10% of the value of its net asset.

There are risks associated with investing in Rule 144A Securities. The
securities may become illiquid if qualified institutional buyers are not
interested in acquiring the securities. Although the Rule 144A Securities may be
resold in negotiated transactions, the price realized from these sales could be
less than the price originally paid by the Fund or less than what may be
considered the fair value of such securities. Furthermore, if such securities
are required to be registered under the securities laws of one or more
jurisdictions before being resold, the Fund may be required to bear the expense
of registration.

In an effort to minimize the risks associated with these securities, the Fund
will only purchase Rule 144A Securities of companies that have publicly traded
securities outstanding, have been in business a minimum of 5 years, and have a
market capitalization of at least $100 million. Finally, the Fund will purchase
Rule 144A Securities only in situations where the Adviser has a reasonable
expectation that the securities will be registered with the Securities and
Exchange Commission within six months.

In addition to corporate debt securities, the Fund may invest in the securities
issued or guaranteed by the U.S. Government and its agencies and in preferred
and common stocks. The securities of the U.S. Government in which the Fund
invests are U.S. Treasury bonds and notes. The Fund may also purchase debt
securities issued by Government agencies or by an instrumentality of the
Government. Some of the Federal agencies that issue or guarantee securities
include, among others, the Export-Import Bank of the United States, Farmers Home
Administration, Federal Housing Administration, Maritime Administration, Small
Business Administration and the Tennessee Valley Authority. An instrumentality
of the U. S. Government is a government agency organized under Federal charter
with government supervision. Instrumentalities issuing or guaranteeing
securities include, among others, the Federal Home Loan Banks, the Federal Land
Banks, Central Bank for Cooperatives, Federal Intermediate Credit Banks and the
Federal National Mortgage Association.

U.S. Treasury bonds and notes are backed by the full faith and credit of the
U.S. Government. Securities issued by Government agencies or instrumentalities
may or may not be backed by the full faith and credit of the United States. In
the case of securities not backed by the full faith and credit of the United
States, an investor must look principally to the agency or instrumentality for
repayment.

The Fund invests in preferred stocks that, in the opinion of the Adviser, are
offering an above average yield in comparison to preferred stocks of the same
quality or in preferred stocks offering a potential for capital appreciation.
The Fund may also purchase preferred stocks that are restricted securities
subject to the limitations under Rule 144A described above.

The Fund invests in common stocks that it considers to be selling at undervalued
prices. The investment approach of the Fund may be deemed "contrarian" in its
selection of common stocks due to the fact that this approach may lead the Fund
to select stocks not recommended by other investment advisers or brokerage
firms. The Fund, however, will purchase only common stocks that pay cash
dividends and will not purchase additional common stocks when common stocks
comprise 30% or more of the Fund's net assets.

Aside from the investments listed above, the Fund may at times, for temporary
defensive purposes, invest all or a portion of its assets in no-load money
market funds, savings accounts and certificates of deposit of domestic banks
with assets in excess of $1,000,000, commercial paper rated A-1, repurchase
agreements or Treasury bills, and may hold cash.

Investment by the Fund in a no-load money market fund will result in the Fund
paying a management fee and other fund expenses on the money invested in such
fund in addition to the operating expenses of the Fund.

The Fund may invest in real estate investment trusts ("REITs") and repurchase
agreements. The Fund limits investment in REITs to 10% of its net assets and
investment in repurchase agreements to 5% of its net assets.

REITs are companies that invest their capital in real estate, long and short
term mortgages and construction loans. These companies normally do not pay
federal income tax but distribute their income to their shareholders who become
liable for the tax. The Fund invests in REITs that generate income and have a
potential for capital appreciation. Some REITs own properties and earn income
from leases and rents. These types of REITs are termed "Equity" REITs. Other
REITs hold mortgages and earn income from interest payments. These REITs are
termed "Mortgage" REITs. Finally, there are "Hybrid" REITs that own properties
and hold mortgages. The Fund may invest in any of the three types of REITs and
may purchase the common stocks, preferred stocks or bonds issued by REITs.

There are risks in investing in REITs. The property owned by a REIT could
decrease in value and the mortgages and loans held by a REIT could become
worthless. The Adviser, however, monitors the investment environment and the
Fund's investments as a means of lessening risks. As of December 31, 1998, 4.9%
of the Fund's net assets were invested in REITs.

In a repurchase agreement a seller of securities, usually a banking institution
or securities dealer, sells securities to the Fund and agrees with the Fund at
the time of sale to repurchase the securities from the Fund at a mutually agreed
upon time and price. The Fund intends to enter into repurchase agreements only
with established banking institutions that deal in Treasury bills and notes. The
Fund intends to invest mostly in overnight repurchase agreements. In the event
of bankruptcy of the seller of a repurchase agreement or the failure of the
seller to repurchase the underlying securities as agreed upon, the Fund could
experience losses. Such losses could include a possible decline in the value of
the underlying securities during the period the Fund seeks to enforce its rights
thereto and a possible loss of all or part of the income from such securities.
The Fund would also incur additional expenses enforcing its rights. As of
December 31, 1998, the Fund had no assets invested in repurchase agreements.

INVESTMENT RESTRICTIONS

The investment restrictions set forth below are fundamental policies of the
Fund. Fundamental policies may not be changed without approval by vote of a
majority of the Fund's outstanding voting securities. As used in this SAI and in
the Prospectus, "a majority of the Fund's outstanding voting securities" means
the lesser of (a) more than 50% of the Fund's outstanding shares, or (b) at
least 67% of the shares present or represented by proxy at a meeting of
shareholders provided that the holders of more than 50% of the Fund's
outstanding shares are present in person or represented by proxy.

When investing its assets, the Fund will not:

(1) invest more than 5% of the value of its total assets in the securities of
any one issuer or purchase more than 10% of the outstanding voting
securities, debt or preferred stock of any one issuer. This restriction
does not apply to obligations issued or guaranteed by the U. S.
Government, its agencies or instrumentalities;

(2) invest more than 25% of the value of its total assets in the securities of
issuers in any one industry;

(3) lend money, provided that for purposes of this restriction, the acquisition
of publicly distributed corporate bonds, and investment in U.S. government
obligations, short-term commercial paper, certificates of deposit and
repurchase agreements shall not be deemed to be the making of a loan;

(4) buy or sell real estate and real estate mortgage loans, commodities,
commodity futures contracts, puts and calls and straddles;

(5) underwrite securities of other issuers, except as the Fund may be deemed to
be an underwriter under the Securities Act of 1933, as amended, in
connection with the purchase and sale of portfolio securities in accordance
with its objectives and policies;

(6) make short sales or purchase securities on margin;

(7) borrow money, except that the Fund may borrow up to 5% of the value of its
total assets at the time of such borrowing from banks for temporary or
emergency purposes (the proceeds of such loans will not be used for
investment or to purchase securities, but will be used to pay expenses);

(8) invest for the purposes of exercising control or management;

(9) invest in restricted securities (securities that must be registered under
the Securities Act of 1933, as amended, before they may be offered and sold
to the public, except that the Fund will be permitted to purchase
restricted securities that are eligible for resale pursuant to Rule 144A
under the Securities Act of 1933, as amended);

(10) participate in a joint investment account; and

(11) issue senior securities.

The Fund has also adopted certain investment restrictions that are not
fundamental policies. These restrictions are that the Fund will not invest in
real estate limited partnerships or oil, gas or other mineral leases and any
investments in warrants will not exceed 5% of the Fund's net assets.
Restrictions that are not fundamental policies may be changed by a vote of the
majority of the Board of Trustees. If any of these non-fundamental restrictions
are changed, however, the Fund will give shareholders at least 60 days' written
notice.

INVESTMENT ADVISORY ARRANGEMENTS

(See also "Management of the Fund" in the Fund's Prospectus)

The Killen Group, Inc., is the investment adviser (the "Adviser") to the Fund.
Robert E. Killen is Chairman, CEO and sole shareholder of the Adviser. He is
also President and Chairman of the Board of the Fund. Edward A. Killen, II is
Vice President, Secretary and a Director of the Adviser and a Trustee of the
Trust.

The Adviser provides the Fund with investment management services. Under the
Contract for Investment Advisory Services between the Trust, on behalf of the
Fund, and the Adviser (the "Contract"), dated March 26, 1999, the Adviser
provides the Fund with advice and recommendations with respect to investments,
investment policies, the purchase and sale of securities and the management of
the Fund's resources. In addition, employees of the Adviser administer the
operation of the Fund. These employees prepare and maintain the accounts, books
and records of the Fund, calculate the daily net asset value per share each day
the New York Stock Exchange is open, prepare and file the documents required of
the Fund under Federal and state laws and prepare all shareholder reports.

The Contract provides that it will continue in effect, after the initial
two-year term of the Contract, from year to year if continuation is specifically
approved annually by either a majority of the Board of Trustees or a vote of a
majority of the outstanding voting securities of the Fund. Continuance of the
Contract must also be approved annually by a majority of Trustees who are not
parties to the Contract or interested persons of any such party cast in person
at a meeting called for the purpose of voting on such approval. The Fund may
terminate the Contract on sixty days' written notice to the Adviser, without
payment of any penalty, provided such termination is authorized by the Board of
Trustees or by a vote of a majority of the outstanding voting securities of the
Fund. The Adviser may terminate the Contract on sixty days' written notice to
the Fund without payment of any penalty. The Contract will be automatically and
immediately terminated in the event of its assignment.

As compensation for its investment management services to the Fund under the
Contract, the Adviser is entitled to receive monthly compensation at the annual
rate of 0.50% of the average daily net assets of the Fund. The fee is computed
daily by multiplying the net assets for a day by the appropriate percentage and
dividing the result by 365. At the end of the month, the daily fees are added
and the sum is paid to the Adviser.

BIF, the predecessor of the Fund, paid the Adviser $789,024 in fees in 1998,
$806,435 in 1997, and $638,212 in 1996.

EXPENSE LIMITATION

The Contract provides that the Adviser's fee payable by the Fund will be reduced
in any fiscal year by any amount necessary to prevent Fund expenses and
liabilities (excluding taxes, interest, brokerage commissions and extraordinary
expenses, determined by the Fund or the Adviser, but inclusive of the Adviser's
fee payable by the Fund) from exceeding 2% of the average daily net assets of
the Fund. In any month that the Fund expenses and liabilities exceed 2%, the
Adviser's fee will be reduced so that expenses and liabilities will be 2%.
Although the Fund expects to maintain expenses within 2% of its average daily
net assets, the Adviser will not be responsible for additional expenses
exceeding its advisory fee payable by the Fund. Once the net assets of the Fund
exceed $100 million, the expense limitation will be reduced to 1.5% of the
average daily net assets of the Fund. The expense limitation has not reduced the
Adviser's fee since 1988. In 1998 the Fund's total annual operating expenses
amounted to 0.66% the average daily net assets of the Fund.

TRUSTEES AND OFFICERS

The Board of Trustees oversees the management of the business of the Trust and
the Fund. The Board is elected initially by shareholders and thereafter Trustees
are elected by the Board or the shareholders from time to time in accordance
with the Trust's Agreement and Declaration of Trust and By-Laws. The Board of
Trustees sets broad policies for the Fund and has responsibility for supervision
of the operations of the Fund. The daily operations of the Fund are administered
by employees of the Adviser under the Board's supervision.

The Trustees and executive officers of the Trust and their ages and principal
occupations for the past five years are set forth below:

<TABLE>
<CAPTION>
Name, Age, Position Principal Occupation for the Past Five Year
and Address
<S> <C>
*Robert E. Killen (57) Director of Westmoreland Coal Co. (a mining company) since
President & Trustee July 1996. Director and shareholder, Berwyn Financial Services
1199 Lancaster Avenue Corp. ("BFS"), a financial services company (registered as a broker-dealer with
Berwyn, Pennsylvania the SEC since December 1993 and a member of the National Association of
Securities Dealers, Inc. (the "NASD") since July 1994) since October 1991. President and
Director of the Berwyn Income Fund, Inc. ("BIF"), the predecessor of the Fund, and
The Berwyn Fund, Inc. ("TBF") (both registered investment companies managed by
the Adviser) from December 1986 to April, 1999 and from February 1983 to April 1999,
respectively. Chairman, Chief Executive Officer and sole shareholder of the Adviser
(an investment advisory firm) since April, 1996. President, Treasurer, Director and
sole shareholder of the Adviser from September 1982 to March 1996.

*Anthony N. Carrelli (50) Director of BIF from December 1996 to April 1999 and TBF from January 1995 to
Trustee April 1999. Vice President of the Adviser since August 1986.
1189 Lancaster Avenue
Berwyn, Pennsylvania

*Edward A. Killen, II (47) Director, Secretary and shareholder of BFS since October 1991. Director of BIF
Trustee from January 1995 to April 1999 and TBF from February 1983 to January 1995 and
1189 Lancaster Avenue from March 1999 to April 1999. Vice President, Secretary and Director of the
Berwyn, Pennsylvania Adviser since February 1983.

Denis P. Conlon (51) Director of BIF and TBF from June 1992 to April 1999.
Trustee President and Chief Executive Officer of CRC Industries (a worldwide
1282 Farm Road manufacturer) since September 1996. Vice President, Corporate
Berwyn, Pennsylvania Development, Berwind Corporation (diversified manufacturing
and financial company) from 1990 to September 1996.

Deborah D. Dorsi (43) Director of BIF and TBF from April 1998 to April 1999. Retired industry
Trustee executive since 1994. Director Worldwide Customer Support, Kulick Soffa
1801 Stanbridge Street Industries, Inc. (Semi Conductor Equipment Manufacturer) from 1993 to 1994.
Norristown, Pennsylvania Corporate Account Manager for Kulick & Soffa Industries, Inc. prior to 1993.

Kevin P. Ryan (51) President, Treasurer, Director and shareholder of BFS since
1199 Lancaster Avenue October 1991. Secretary-Treasurer, and Director of BIF from December 1986 to January
Berwyn, Pennsylvania 1995. Secretary and Treasurer of TBF from February 1983 to April 1999 and BIF from December
1986 to April 1999, Director of TBF from February 1983 to March 1999. Legal counsel to the
Adviser since September 1985.

* Robert E. Killen, Anthony N. Carrelli, Edward A. Killen, II and Kevin M. Ryan are "interested persons"
of the Fund as defined in the Investment Company Act of 1940, as amended (the "1940 Act"). Consequently, Robert E. Killen,
Anthony N. Carrelli, and Edward A. Killen, II are the "Interested Trustees" of the Fund. Robert E. Killen is an Officer,
Director and sole shareholder of the Adviser. Robert E. Killen is also a Director of BFS, a registered broker-dealer,
and owns one-third of its outstanding shares. Anthony N. Carrelli is a Vice President of the Adviser. Edward A.
Killen, II is an officer and Director of the Adviser. He is also an officer, Director and the owner of one-third of the
outstanding shares of BFS. Kevin M. Ryan is legal counsel to the Adviser and an officer, Director and owner of one-third
of the outstanding shares of BFS. In addition, Robert E. Killen and Edward A. Killen, II are brothers and Kevin M. Ryan
is brother-in-law to both. BFS serves as the distributor for the Fund's shares in certain jurisdictions.

</TABLE>

Mr. Conlon and Ms. Dorsi are the Trustees of the Trust who are not "interested
persons" of the Trust as defined in the 1940 Act (the "Independent Trustees")
and are paid a fee of $800 for each Board or Committee meeting attended and are
reimbursed for any travel expenses by the Trust. If a Board and Committee
meetings are held on the same day, the Independent Trustees receive only one
$800 fee for all meetings on the same day. The Trust has not adopted a pension
or retirement plan or any other plan that would afford benefits to its Trustees.

The Trust estimates that the Trust will pay Ms. Dorsi and Mr. Conlon each $3,200
for the Trust's initial fiscal year ending December 31, 1999. The Trust is not a
part of any fund complex.

Officers of the Trust are not paid compensation by the Trust or any fund complex
for their work as officers and no fees are paid by the Trust or any fund complex
to the Trustees that are not Independent Trustees for the performance of their
duties. (See "Management of the Fund" in the Prospectus for a discussion of
management responsibilities of the Board and officers.)

OWNERSHIP OF THE FUND

As of February 11, 1999, there were no shareholders of the Trust or the Fund. As
of February 1, 1999 there were 9,136,706 shares of BIF, the predecessor of the
Fund, outstanding. Charles Schwab & Co. ("Schwab"), 101 Montgomery Street, San
Francisco, CA was the record owner of 44% of the outstanding shares. Although
Schwab is the record owner of more than 25% of the outstanding shares of the
Fund, Schwab cannot be considered to control the Fund. Schwab holds the shares
in nominee name for its customers and does not have the power to vote the shares
or to sell them. National Financial Services Corp., One World Trade Center, 200
Liberty Street, New York, NY was the record owner of 9% of the Fund's
outstanding shares. National Financial Services Corp. holds the shares for its
customers and does not have the power to vote the shares or to sell them. The
records of the Fund do not indicate that any individual owns more than 5% of the
Fund's outstanding shares. As of February 1, 1999, the Trustees and officers of
BIF, as a group, owned beneficially and of record 143,022 shares of BIF. This
amount constitutes 1.6% of the outstanding shares.

PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS

Subject to policy established by the Trust's Board of Trustees, the Adviser is
responsible for the Fund's portfolio decisions and the buying and selling of the
Fund's portfolio securities. In executing such
transactions, the Adviser will seek
to obtain the best net results for the Fund, taking into account such factors as
price (including the applicable brokerage commission or dealer spread), size of
order, difficulty of execution and operational facilities and capabilities of
the firm involved. While the Adviser generally seeks reasonably competitive
commission rates, the Adviser is authorized to pay a broker a brokerage
commission in excess of that which another broker might have charged for
effecting the same transaction, in recognition of the value of brokerage and
research services provided by the broker that effects the transaction.

The Adviser may select brokers who, in addition to meeting the primary
requirements of execution and price, have furnished statistical or other factual
information and services which, in the opinion of the Board, are reasonable and
necessary to the Fund's normal operations. The services provided by these
brokerage firms may also be used in dealing with the portfolio transactions of
the Adviser's other clients, and not all such services may be used by the
Adviser in connection with the Fund. Those services may include economic
studies, industry studies, security analysis or reports, sales literature and
statistical services furnished either directly to the Fund or to the Adviser.
The Adviser makes no effort in any given circumstance to determine the value of
these materials or services or the amount they might have reduced expenses of
the Adviser. The Fund considers giving brokerage business to brokers who have
assisted in the distribution of shares of the Fund.

The Board has adopted procedures pursuant to Rule 17e-1 under the 1940 Act that
permit portfolio transactions to be executed through affiliated brokers. In
1996, 1997, and 1998 BIF used an affiliated broker, BFS, pursuant to
substantially the same procedures, and the Fund anticipates using BFS pursuant
to its Rule 17e-1 procedures in its current fiscal year.

BFS is affiliated with the Fund because officers and Trustees of the Fund and
the Adviser are officers, Directors and shareholders of BFS. In addition, BFS
serves as the distributor for the Fund's shares in various jurisdictions
pursuant to a written agreement.

In 1996, 1997 and 1998, BIF paid a total of $126,520, $193,023 and $185,897
in commissions to BFS, respectively. These figures represent 88%, 77% and 85%
of the total commissions paid by BIF, respectively. The percentage of
BIF's aggregate dollar amount of transactions involving the payment of
commissions effected through BFS was 90%, 74% and 88%, respectively.

BIF paid brokerage commissions of $217,957 in 1998, $247,987 in 1997 and
$144,128 in 1996.

The Adviser has other advisory clients which include individuals, trusts,
pension and profit sharing funds, and an investment company, some of which have
similar investment objectives to the Fund. As such, there will be times when the
Adviser may recommend purchases and/or sales of the same portfolio securities
for the Fund and its other clients. In such circumstances, it will be the policy
of the Adviser to allocate purchases and sales as well as expenses incurred in
the transactions among the Fund and its other clients in a manner which the
Adviser deems equitable, taking into consideration such factors as size of
account, concentration of holdings, investment objectives, tax status, cash
availability, purchase cost, holding period and other pertinent factors relative
to each account. Simultaneous transactions could adversely affect the ability of
the Fund to obtain or dispose of the full amount of a security which it seeks to
purchase or sell or the price at which such security can be purchased or sold.

COMPUTATION OF NET ASSET VALUE

(See also "Computation of Net Asset Value" in the Prospectus.)

The net asset value per share of the Fund is determined by dividing the total
value of the Fund's investments and other assets, less any liabilities, by the
total number of outstanding shares of the Fund. Net asset value per share is
determined as of the close of regular trading on the New York Stock Exchange
(the "Exchange") (ordinarily 4:00 p.m. Eastern Time) on each day that the
Exchange is open and is effective as of the time of computation.

SHARE PURCHASES

(See also "Buying Shares" in the Prospectus.)

The Fund offers shares for sale on a continuous basis. The Fund does not impose
sales charge (load) on the purchase of the Fund's shares. The offering price of
shares of the Fund is the net asset value per share next determined after
receipt by the Transfer Agent or a broker authorized by the Fund to receive
orders for the purchase of shares. The net asset value of shares can be expected
to fluctuate daily.

The minimum initial investment is $3,000 per investor. This investment may be
divided by a single investor among different investment accounts in the Fund
that total $3,000 in the aggregate or between accounts in the Fund and the
Berwyn Fund series of the Trust. Subsequent investments must be at least $250
per account. The minimum initial investment for Individual Retirement Accounts
("IRAs") is $1,000. The minimum is $250 for a spousal IRA. Subsequent
investments in IRAs must be at least $250. There are no minimum requirements for
pension and profit sharing plans or custodial accounts for minors.

The Fund reserves the right to reduce or waive the minimum purchase requirements
in certain cases where subsequent and continuing purchases are contemplated.

DISTRIBUTOR

(See also "Distributor" in the Prospectus.)

BFS, a broker-dealer registered with the U.S. Securities and Exchange
Commission, is the current distributor of the Fund's shares, pursuant to a
selling agreement which became effective April 30, 1999 (the "Selling
Agreement"). Under the Selling Agreement, BFS is the non-exclusive agent in
certain jurisdictions for the Fund's continuous offering of shares. Shares of
the Fund are offered to the public at net asset value, without the imposition of
a sales load. The jurisdictions in which BFS is the distributor are Arizona,
Arkansas, Florida, Maryland, North Dakota, Nebraska, Texas, Vermont and West
Virginia.

The Selling Agreement provides that it will continue in effect from year to year
only so long as such continuance is approved at least annually by the Trust's
Board of Trustees and by the vote of a majority of the Trustees who are not
parties to the agreement or interested persons of any such party by vote cast in
person at a meeting called for the purpose of voting on such approval. The
Selling Agreement will terminate automatically in the event of its assignment.

REDEMPTION OF SHARES

(See also "Redemption of Shares" in the Fund's Prospectus.)

The Fund will redeem all full and fractional shares of the Fund upon receipt of
a written request in proper form. The redemption price is the net asset value
per share next determined after receipt of proper notice of redemption.
Shareholders liquidating their holdings will receive upon redemption all
dividends reinvested through the date of redemption.

CALCULATION OF PERFORMANCE DATA

Yield

The Fund's yield for the month ended December 31, 1998 was 8.7%.

The yield was determined based upon the net investment income per share for the
period December 1 to December 31, 1998. Expenses accrued for the period were
subtracted from the interest and dividends accrued and the remainder was divided
by daily average number of shares multiplied by maximum offering price per
share. The number then obtained was annualized.

Total Return

The average annual total return of the Fund for one year, five years and ten
years ended December 31, 1998 are listed below:

One Year: (4.57%)
Five Years: 8.13%
Ten Years: 11.20%

The period of time for one year's performance is from January 1, 1998 to
December 31, 1998. The dates for the five-year period are January 1, 1994 to
December 31, 1998 and for the ten year period are from January 1, 1989 to
December 31, 1998. To obtain the performance listed above, the Fund computed its
average total return for each period of time. The Fund made this calculation by
first determining the total return for a period and then using an exponential
function based upon the number of years involved to obtain an average.

The total return for a period is calculated by determining the redeemable value
of $1,000 initial investment made at the beginning of the period, with dividends
and capital gains reinvested on the reinvestment date, on the last day of the
period and dividing that value by $1,000. The average annual total return for
the period is calculated by taking the total return for the period and
determining the annual average by using an exponential function based upon the
number of years and any fraction thereof in the period.

In addition to an average annual total return, the Fund calculates its total
returns on a calendar year basis. Listed below are the Fund's total returns for
the calendar years 1988 through 1998:

January 1, 1988 - December 31, 1988 l1.3%
January 1, 1989 - December 31, 1989 11.9%
January 1, 1990 - December 31, 1990 -0.13%
January 1, 1991 - December 31, 1991 23.0%
January 1, 1992 - December 31, 1992 21.7%
January 1, 1993 - December 31, 1993 16.9%
January 1, 1994 - December 31, 1994 -1.1%
January 1, 1995 - December 31, 1995 21.0%
January 1, 1996 - December 31, 1996 14.0%
January 1, 1997 - December 31, 1997 13.4%
January 1, 1998 - December 31, 1998 -4.57%

The Fund calculates the total return for a calendar year by determining the
redeemable value of $1,000 investment made at the beginning of the year with
dividends and capital gains reinvested on the reinvestment date, on last day of
the year and dividing that value by $1,000.

Annual average total return and the total returns for calendar year are based on
historical performance and are not intended as an indication of future
performance.

GENERAL INFORMATION

History and Capital Structure

The Fund is a series of shares of The Berwyn Funds, a Delaware business trust
formed under the laws of the State of Delaware on February 4, 1999. The Fund is
the successor to BIF, a corporation organized under the laws of the Commonwealth
of Pennsylvania on December 26, 1986, which was a no-load, diversified, open-end
management investment company. In a reorganization approved by vote of the
shareholders of BIF and accomplished on April 30, 1999, all the assets and
liabilities of BIF were transferred to the Fund and the shareholders of BIF
became the shareholders of the Fund. Thereafter the Fund has carried on the
business of BIF.

The Fund has authorized an unlimited number of shares of beneficial interest,
without par value per share. Each share has equal dividend, distribution and
liquidation rights. There are no conversion or preemptive rights applicable to
any shares of the Fund. All shares issued are fully paid and nonassessable. Fund
shares do not have cumulative voting rights.

Custodian

PFPC Trust Company, 400 Bellevue Parkway, Suite 108, Wilmington, DE 19809 is the
custodian of the Fund. The custodian holds all securities and cash owned by the
Fund and collects all dividends and interest due on the securities.

Independent Accountants

PricewaterhouseCoopers LLP, 30 South 17th Street, Philadelphia, Pennsylvania
has been selected as the independent accountants for the Fund by the Board of
Trustees and its initial sole shareholder. PricewaterhouseCoopers LLP, will
perform an annual audit of the financial statements of the Fund.

Litigation

The Fund is not involved in any litigation or other legal proceedings.

DISTRIBUTION AND TAXES

Distributions of Net Investment Income

The Fund receives income generally in the form of dividends and interest on its
investments. This income, less expenses incurred in the operation of the Fund,
constitutes the Fund's net investment income from which dividends may be paid to
you. Any distributions by the Fund from such income will be taxable to you as
ordinary income, whether you take them in cash or in additional shares.

Distributions of Capital Gains

The Fund may derive capital gains and losses in connection with sales or other
dispositions of its portfolio securities. Distributions from net short-term
capital gains will be taxable to you as ordinary income. Distributions from net
long-term capital gains will be taxable to you as long-term capital gain,
regardless of how long you have held your shares in the Fund. Any net capital
gains realized by the Fund generally will be distributed once each year, and may
be distributed more frequently, if necessary, in order to reduce or eliminate
excise or income taxes on the Fund.

Information on the Tax Character of Distributions

The Fund will inform you of the amount of your ordinary income dividends and
capital gains distributions at the time they are paid, and will advise you of
their tax status for federal income tax purposes shortly after the close of each
calendar year. If you have not held Fund shares for a full year, the Fund may
designate and distribute to you, as ordinary income or capital gain, a
percentage of income that is not equal to the actual amount of such income
earned during the period of your investment in the Fund.

Election to Be Taxed as a Regulated Investment Company

The Fund has elected to be treated as a regulated investment company under
Subchapter M of the Internal Revenue Code, has qualified as such for its most
recent fiscal year, and intends to so qualify during the current fiscal year. As
a regulated investment company, the Fund generally pays no federal income tax on
the income and gains it distributes to you. The board reserves the right not to
maintain the qualification of the Fund as a regulated investment company if it
determines such course of action to be beneficial to shareholders. In such case,
the Fund will be subject to federal, and possibly state, corporate taxes on its
taxable income and gains, and distributions to you will be taxed as ordinary
dividend income to the extent of the Fund's earnings and profits.

Excise Tax Distribution Requirements

To avoid federal excise taxes, the Internal Revenue Code requires the Fund to
distribute to you by December 31 of each year, at a minimum, the following
amounts: 98% of its taxable ordinary income earned during the calendar year; 98%
of its capital gain net income earned during the twelve month period ending
October 31; and 100% of any undistributed amounts from the prior year. The Fund
intends to declare and pay these amounts in December (or in January, which
you treat as received in December) to avoid these excise taxes, but can
give no assurances that its distributions will be sufficient to eliminate all
taxes.

Redemption of Fund Shares

Redemptions and exchanges of Fund shares are taxable transactions for federal
and state income tax purposes. If you redeem your Fund shares, or exchange your
Fund shares for shares of the Berwyn Income Fund, the Rodney Square Fund or the
Rodney Square Tax-Exempt Fund, the IRS will require that you report a gain or
loss on your redemption or exchange. If you hold your shares as a capital asset,
the gain or loss that you realize will be capital gain or loss and will
belong-term or short-term, generally depending on how long you hold your shares.
Any loss incurred on the redemption or exchange of shares held for six months or
less will be treated as a long-term capital loss to the extent of any long-term
capital gains distributed to you by the Fund on those shares.

All or a portion of any loss that you realize upon the redemption of your Fund
shares will be disallowed to the extent that you buy other shares in the Fund
(through reinvestment of dividends or otherwise) within 30 days before or after
your share redemption. Any loss disallowed under these rules will be added to
your tax basis in the new shares you buy.

U.S. Government Obligations

Many states grant tax-free status to dividends paid to you from interest earned
on direct obligations of the U.S. government, subject in some states to minimum
investment requirements that must be met by the Fund. Investments in Government
National Mortgage Association or Federal National Mortgage Association
securities, bankers` acceptances, commercial paper and repurchase agreements
collateralized by U.S. government securities do not generally qualify for
tax-free treatment. The rules on exclusion of this income are different for
corporations.

Investment in Complex Securities

The Fund may investment in complex securities. These investments may be subject
to numerous special and complex tax rules. These rules could affect whether
gains and losses recognized by the Fund are treated as ordinary income or
capital gain, accelerate the recognition of income to the Fund and/or defer the
Fund's ability to recognize losses. In turn, these rules may affect the amount,
timing or character of the income distributed to you by the Fund.

FINANCIAL STATEMENTS

BIF's audited financial statements and notes thereto for the year ended December
31, 1998 and the report of PricewaterhouseCoopers LLP, BIF's
independent accountants, on such financial statements (the "Report") are
included in BIF's 1998 Annual Report to Shareholders (the "Annual Report"), and
incorporated by reference in this SAI by amendment to the Trust's
registration statement. A copy of the Annual Report accompanies this SAI and an
investor may obtain a copy of the Annual Report without charge by writing to the
Fund at the address on the cover of the SAI or calling (800) 992-6757.

<PAGE>
APPENDIX A

DEFINITIONS OF STANDARD & POOR'S BOND RATINGS

Standard & Poor's Ratings Group gives ratings to bonds that range from AAA to D.
The Fund may invest in bonds with ratings of CC above. Definitions of these
ratings are set forth below.

AAA Debt rated AAA has the highest rating assigned by Standard &
Poor's. Capacity to pay interest and repay principal is extremely
strong.

AA Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small
degree.

A Debt rated A has a strong capacity to pay interest and principal
although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in
higher rated categories.

BBB Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in
higher rated categories.

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

D Debt rated D is in default, and payment of interest and/or
repayment of principal is in arrears.

<PAGE>

APPENDIX B

MOODY'S BOND RATINGS

Moody's Investors Service, Inc. gives ratings to bonds that
range from Aaa to D.
Definitions of these ratings are set forth below. The Fund may invest in bonds
with any ratings of Caa or better.

Aaa - These bonds are judged to be of the best quality. They carry the
smallest degree of investment risk. Interest payments are protected
by a large or by an exceptionally stable margin and principal is
secure.

Aa - These bonds are judged to be of high quality by all standards.
They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation
of protective elements may be of greater amplitude or there may be
other elements present which make the long-term risks appear
somewhat larger than in Aaa securities.

A - These are bonds which possess many favorable investment
attributes and are to be considered as upper medium grade
obligations. Factors giving security to principal and interest
are considered adequate but elements may be present which suggest
a susceptibility to impairment sometime in the future.

Baa - These bonds are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Such bonds
lack outstanding investment characteristics and in fact have
speculative characteristics as well.

Ba - These are bonds judged to have speculative elements; their future
cannot be considered as well assured. Uncertainty of position
characterizes bonds in this class.

B - These bonds generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period
of time may be small.

Caa - These are bonds of poor standing. Such issues may be in default
or there may be present elements of danger with respect to
principal or interest.

Ca - These bonds represent obligations which are speculative in a high
degree. Such issues are often in default or have other market
shortcomings.

C - These are the lowest rated class of bonds and issues so rated
can be regarded as having extremely poor prospects of ever
attaining any real investment standing.

<PAGE>

THE BERWYN FUNDS
Berwyn Fund, a Series of The Berwyn Funds
Shareholders Services
c/o PFPC Inc.
P. O. Box 8987
Wilmington, DE 19899
1 (800) 992-6757

STATEMENT OF ADDITIONAL INFORMATION

April 30, 1999

This Statement of Additional Information ("SAI") is not a Prospectus. The SAI is
a document that relates to the Prospectus of the Berwyn Fund series (the "Fund")
of The Berwyn Funds (the "Trust") dated April 30, 1999 and contains additional
information regarding the Fund. This SAI should be read in conjunction with the
Prospectus. The Prospectus may be obtained by writing to the Fund at the above
address or calling the 800 number. The audited financial statements and notes
thereto for the year ended December 31, 1998 of The Berwyn Fund, Inc. ("TBF"),
the predecessor of the Fund, and the report of PricewaterhouseCoopers
LLP, the Fund's independent accountants, on such financial statements
(the "Report"), included in TBF's 1998 Annual Report to Shareholders will be
incorporated by reference in this SAI by amendment to the Trust's registration
statement.

<PAGE>

TABLE OF CONTENTS

Investment Policies and Risk Factors........................................1

Investment Restrictions.....................................................2

Investment Advisory Arrangements............................................4

Expense Limitation..........................................................5

Trustees and Officers.......................................................5

Ownership of the Fund.......................................................7

Portfolio Transactions and Brokerage Commissions............................7

Computation of Net Asset Value..............................................8

Share Purchases.............................................................8

Distributor.................................................................9

Redemption of Shares........................................................9

Calculation of Performance Data.............................................9

General Information.........................................................10

Distribution and Taxes......................................................11

Financial Statements........................................................12

<PAGE>

INVESTMENT POLICIES AND RISK FACTORS

(See also "Investment Objectives, Principal Investment Strategies and Related
Risks " in the Fund's Prospectus.)

The Fund is a no-load, non-diversified series of shares of The Berwyn Funds, an
open-end management investment company that seeks long term (i.e., greater than
one year) capital appreciation by investing in common stocks and fixed income
securities that offer a potential for capital appreciation. Current income is a
secondary consideration.

Under normal market conditions, the Fund invests at least 80% of the value of
its net assets in common stocks. The Fund invests in common stocks that The
Killen Group, Inc. (the "Adviser") considers to be selling at undervalued
prices. These are stocks selling substantially below their book value or at a
low valuation to present earnings or are stocks of companies, judged by the
Adviser, to have above average growth prospects and to be selling at a small
premium to book value or at modest valuation to their present earnings level.

The investment approach of the Fund may be deemed "contrarian" in that it may
lead the Fund to select stocks not recommended by other investment advisers or
brokerage firms.

While the portfolio of the Fund emphasizes common stocks, the Fund may also
invest up to 20% of the value of its net assets in fixed income securities. The
fixed income securities in which the Fund invests are corporate bonds and
preferred stocks. The Fund selects fixed income securities that have a potential
for capital appreciation due to prevailing interest rates.

There are no restrictions on the Adviser as to the investment rating a fixed
income corporate debt security must have in order to be purchased. The Fund may
purchase fixed income corporate debt securities in any investment grade rating
listed by Standard & Poor's Ratings Group ("Standard & Poor's") and Moody's
Investors Service, Inc. ("Moody's). (See Appendices A and B for Standard &
Poor's and Moody's definitions of Bond ratings.) This means that the Fund may
invest up to 20% of the value of its net assets in high yield, high risk
corporate debt securities that are commonly referred to as "junk bonds". These
are corporate debt securities that are rated lower than BBB by Standard & Poor's
and Baa by Moody's. These securities have a low rating due to the fact that the
issuers of the securities are not considered as creditworthy as the issuers of
investment grade bonds. There is the risk that the issuer of a lower rated
security may default in the payment of interest and principal. On the whole,
these lower rated securities are considered speculative investments.

As of December 31, 1998, 0.60% of the Fund's net assets were invested in lower
rated corporate debt securities.

The Fund may at times, for temporary defensive purposes, invest all or a portion
of its assets in no-load money market funds, savings accounts and certificates
of deposit of domestic banks with assets in excess of $1,000,000, commercial
paper with the highest investment grade rating (i.e., A-l and P-1, as defined in
Standard & Poor's and Moody's Commercial Paper Ratings, respectively),
repurchase agreements, U.S. Treasury bills, notes and bonds, or cash.

The Fund's investment in securities issued by the U. S. Government does not mean
the U.S. Government is required to provide financial support to the Fund.

The Fund may also invest in Real Estate Investment Trusts ("REITs"). REITs are
companies that invest in real estate. REITs normally do not pay federal income
tax but distribute their income to their shareholders who become liable for the
tax. Some REITs own properties and earn income from leases and rents. These
types of REITs are termed "Equity" REITs. Other REITs hold mortgages and earn
income from interest payments. These REITs are termed "Mortgage" REITs. Finally,
there are "Hybrid" REITs that own properties and hold mortgages. The Fund may
invest in any of the three types of REITs and may purchase the common stocks,
preferred stocks or bonds issued by REITs. The Fund invests in REITs that
generate income and have a potential for capital appreciation. There are risks
in investing in REITs. The property owned by a REIT could decrease in value and
the mortgages and loans held by a REIT could become worthless. The Adviser,
however, monitors the investment environment and the Fund's investments as a
means of lessening risks. As of December 31, 1998, the Fund was not invested in
any REITs.

In a repurchase agreement a seller of a security, usually a banking institution
or securities dealer, sells securities to the Fund and agrees with the Fund at
the time of sale to repurchase the securities from the Fund at a mutually agreed
upon time and price. The Fund intends to enter into repurchase agreements only
with established banking institutions that deal in treasury bills and notes. The
Fund intends to invest mostly in overnight repurchase agreements. The Fund will
only invest up to 5% of its net assets in repurchase agreements. In the event of
the bankruptcy of the seller of a repurchase agreement or the failure of a
seller to repurchase the underlying securities as agreed upon, the Fund could
experience losses. Such losses could include a possible decline in the value of
the underlying securities during the period while the Fund seeks to enforce its
rights thereto and a possible loss of all or part of the income from such
securities. The Fund would also incur additional expenses enforcing its rights.
As of December 31, 1998, the Fund had no assets invested in repurchase
agreements.

INVESTMENT RESTRICTIONS

The investment restrictions set forth below are fundamental policies of the
Fund. Fundamental policies may not be changed without approval by vote of a
majority of the Fund's outstanding voting securities. Under the Investment
Company Act of 1940, as amended (the "1940 Act"), such approval requires the
affirmative vote at a meeting of shareholders of the lesser of (a) more than 50%
of the Fund's outstanding shares, or (b) at least 67% of shares present or
represented by proxy at the meeting, provided that the holders of more than 50%
of the Fund's outstanding shares are present in person or represented by proxy.

When investing its assets, the Fund will not:

(1) purchase more than 10% of the outstanding voting securities of a single
issuer;

(2) invest more than 25% of the value of its total assets in any one industry;

(4) buy or sell real estate, real estate mortgage loans, commodities, commodity
futures contracts, puts, calls and straddles;

(5) underwrite securities of other issuers, except as the Fund may be deemed to
be an underwriter under the Securities Act of 1933, as amended (the "1933
Act") in connection with the purchase and sale of portfolio securities in
accordance with its objectives and policies;

(6) make short sales or purchase securities on margin;

(8) invest for the purposes of exercising control or management;

(9) invest in restricted securities (securities that must be registered under
the 1933 Act before they may be offered and sold to the public);

(10) participate in a joint investment account; and

(11) issue senior securities.

In addition, the Fund has the following restrictions:

(1) With respect to 50% of its assets, the Fund will not at time of purchase
invest more than 5% of its gross assets, at market value, in the securities
of any one issuer (except the securities of the United States government);
and

(2) With respect to the other 50% of its assets, the Fund will not invest at
the time of purchase more than 15% of the market value of its total assets
in any single issuer.

The Fund has also adopted certain investment restrictions that are not
fundamental policies. These restrictions are that (i) the Fund will not invest
in real estate limited partnerships or in oil, gas or other mineral leases, and
(ii) the Fund's investments in warrants will not exceed 5% of the Fund's net
assets. Restrictions that are not fundamental may be changed by a vote of the
majority of the Board of Trustees. But if any of these nonfundamental
restrictions are changed, the Fund will give shareholders at least 60 days'
written notice.

INVESTMENT ADVISORY ARRANGEMENTS

(See also "Management of the Fund" in the Fund's Prospectus)

The Killen Group, Inc. is the investment adviser (the "Adviser") to the Fund.
Robert E. Killen is Chairman, Chief Executive Officer ("CEO") and sole
shareholder of the Adviser. Edward A. Killen, II is Vice President and Secretary
of the Adviser. Both Robert E. Killen and Edward A. Killen, II are Directors of
the Adviser and Robert E. Killen is a Trustee of the Trust. In addition, Robert
E. Killen is President of the Trust.

As compensation for its investment management services to the Fund under the
Contract, the Adviser is entitled to receive monthly compensation at the annual
rate of 1% of the average daily net assets of the Fund. The fee is computed
daily by multiplying the net assets for a day by 1% and dividing the result by
365. At the end of the month, the daily fees are added and the resulting sum is
paid to the Adviser.

TBF paid the Adviser $843,125 in fees in 1998, $947, 901 in 1997, and $976,110
in 1996.

EXPENSE LIMITATION

The Contract provides that the Adviser's fee payable by the Fund will be reduced
in any fiscal year by any amount necessary to prevent Fund expenses and
liabilities (excluding taxes, interest, brokerage commissions and extraordinary
expenses, determined by the Fund or the Adviser, but inclusive of the Adviser's
fee payable by the Fund) from exceeding 2% of the average daily net assets of
the Fund. In any month that the Fund expenses and liabilities exceed 2%, the
Adviser's fee will be reduced so that expenses and liabilities will be 2%.
Although the Fund expects to maintain expenses within 2% of its average daily
net assets, the Adviser will not be responsible for additional expenses
exceeding its advisory fee payable by the Fund. Once the net assets of the Fund
exceed $100 million, the expense limitation will be reduced to 1.5% of the
average daily net assets of the Fund. The expense limitation has not reduced the
Adviser's fee since 1985. In 1998, the Fund's ratio of total annual operating
expenses to average net assets was 1.20%.

TRUSTEES AND OFFICERS

The Trustees and executive officers of the Trust and their principal occupations
for the past five years are set forth below:

<TABLE>
<CAPTION>
<S> <C>
Name, Age, Position Principal Occupation for the Past Five Year
and Address
*Robert E. Killen (57) Director of Westmoreland Coal Co. (a mining company) since
President & Trustee July 1996. Director and shareholder, Berwyn Financial Services
1199 Lancaster Avenue Corp. ("BFS"), a financial services company (registered as a broker-dealer with
Berwyn, Pennsylvania the SEC since December 1993 and a member of the National Association of
Securities Dealers, Inc. (the "NASD") since July 1994) since October 1991. President and
Director of the Berwyn Income Fund, Inc. ("BIF"), the predecessor of the Fund, and
The Berwyn Fund, Inc. ("TBF") (both registered investment companies managed by
the Adviser) from December 1986 to April, 1999 and from February 1983 to April 1999,
respectively. Chairman, Chief Executive Officer and sole shareholder of the Adviser
(an investment advisory firm) since April, 1996. President, Treasurer, Director and
sole shareholder of the Adviser from September 1982 to March 1996.

Denis P. Conlon (51) Director of BIF and TBF from June 1992 to April 1999.
Trustee President and Chief Executive Officer of CRC Industries (a worldwide
1282 Farm Road manufacturer) since September 1996. Vice President, Corporate
Development, Berwind Corporation (diversified manufacturing and financial
company) Berwyn, Pennsylvania from 1990 to September 1996.

Kevin P. Ryan (51) President, Treasurer, Director and shareholder of BFS since October 1991. Director of BIF from
Secretary and Treasuer December 1986 to January 1995. Secretary and Treasurer of TBF from February 1983 to April and
1199 Lancaster Avenue BIF from December 1986 to April 1999. Director of TBF from February 1983 to March 1999. Legal
counsel to the Adviser since September 1985.

Robert E. Killen is an Officer, Director and sole shareholder of the Adviser.
Robert E. Killen is also a Director of BFS, a registered broker-dealer, and owns
one-third of its outstanding shares. Anthony N.
Carrelli is a Vice President
of the Adviser. Edward A. Killen, II is an officer and
Director of the Adviser.
He is also an officer, Director and the owner of one-third of the outstanding
shares of BFS. Kevin M. Ryan is legal counsel to the Adviser and an officer,
Director and owner of one-third of the outstanding shares of BFS. In addition,
Robert E. Killen and Edward A. Killen, II are brothers and Kevin M. Ryan is
brother-in-law to both. BFS serves as the distributor for the Fund's shares in
certain jurisdictions.

The Trust estimates that the Trust will pay Ms. Dorsi and Mr. Conlon each $3,200
for the Trust's initial fiscal year ending December 31, 1999. The Trust is not a
part of any fund complex.

OWNERSHIP OF THE FUND

As of February 11, 1999, there are no shareholders of the Trust or the Fund. As
of February 1, 1999, there were 3,554,799 shares of TBF, the predecessor of the
Fund, outstanding. Charles Schwab & Co., 101 Montgomery Street, San Francisco,
CA was the record owner of 12% of the outstanding shares. National Financial
Services Corp., One World Financial Center, 200 Liberty Street, New York, NY was
the record owner of 9% of the outstanding shares. The records of the Fund do not
indicate that any individual owned more than 5% of the outstanding shares of the
Fund. As of February 1, 1999, the Directors and officers of TBF as a group,
owned beneficially and of record 338,297 shares of TBF. This amount constituted
9.5% of the outstanding shares of TBF.

PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS

Subject to policy established by the Trust's Board of Trustees, the Adviser is
responsible for the Fund's portfolio decisions and the buying and selling of the
Fund's portfolio securities. In executing such transactions, the Adviser seeks
to obtain the best net results for the Fund, taking into account such factors as
price (including the applicable brokerage commission or dealer spread), size of
order, difficulty of execution and operational facilities and capabilities of
the firm involved. While the Adviser generally seeks reasonably competitive
commission rates, the Adviser is authorized to pay a broker a brokerage
commission in excess of that which another broker might have charged for
effecting the same transaction, in recognition of the value of brokerage and
research services provided by the broker that effects the transaction.

The Adviser may select brokers who, in addition to meeting the primary
requirements of execution and price, have furnished statistical or other factual
information and services, which in the opinion of the Board, are reasonable and
necessary to the decision making responsibilities of the Adviser for the Fund.
The services provided by these brokerage firms may also be used in dealing with
the portfolio transactions of the Adviser's other clients and not all such
services may be used by the Adviser in connection with the Fund. Those services
may include economic studies, industry studies, security analysis or reports,
sales literature of the Fund's portfolio securities and statistical services
furnished either directly to the Fund or to the Adviser. No effort is made in
any given circumstance to determine the value of these materials or services or
the amount by which they might have reduced expenses of the Adviser. The Fund
considers giving brokerage business to brokers who have assisted in the
distribution of shares of the Fund.

The Board has adopted procedures pursuant to Rule 17e-1 under the 1940 Act that
permit portfolio transactions to be executed through affiliated brokers. In
1996, 1997, and 1998, BIF used an affiliated broker, BFS, pursuant to
substantially the same procedures, and the Fund anticipates using BFS pursuant
to its Rule 17e-1 procedures in its current fiscal year.

In 1996, 1997 and 1998, TBF paid a total of $187,169, $115,779 and $109,726 in
commissions to BFS, respectively. This figure represents 62%, 50% and 53%
of the total commissions paid by TBF, respectively. The percentage of the
Fund's aggregate dollar amount of transactions involving the payment of
commissions effected through BFS was 77%, 74%, and 72%, respectively.

TBF paid brokerage Commissions of $207,140 in 1998, $231,239 in 1997, and
$303,958 in 1996. The level of trading in 1998 was similar to the level in
1997.

The Adviser has other advisory clients which include individuals, trusts,
pension and profit sharing funds, some of which have similar investment
objectives to the Fund. As such, there will be times when the Adviser may
recommend purchases and/or sales of the same portfolio securities for the Fund
and its other clients. In such circumstances, it will be the policy of the
Adviser to allocate purchases and sales as well as expenses incurred in the
transactions among the Fund and its other clients in a manner which the Adviser
deems equitable, taking into consideration such factors as size of account,
concentration of holdings, investment objectives, tax status, cash availability,
purchase cost, holding period and other pertinent factors relative to each
account. Simultaneous transactions could adversely affect the ability of the
Fund to obtain or dispose of the full amount of a security which it seeks to
purchase or sell or the price at which such security can be purchased or sold.

COMPUTATION OF NET ASSET VALUE

(See also "Computation of Net Asset Value" in the Prospectus). The net asset
value per share of the Fund is determined by dividing the total value of the
Fund's investments and other assets, less any liabilities, by the total number
of outstanding shares of the Fund. Net asset value per share is determined at
the close of regular trading on the New York Stock Exchange (the "Exchange")
(ordinarily 4:00 p.m. Eastern Time) on each day that the Exchange is open and is
effective as of the time of computation.

<PAGE>
SHARE PURCHASES

(See also "Buying Shares" in the Prospectus)

The minimum initial investment is $3,000 per investor. This investment may be
divided by a single investor among different investment accounts in the Fund
that total $3,000 in the aggregate or between accounts in the Fund and the
Berwyn Income Fund series of the Trust. Subsequent investments must be at
least $250 per account. The minimum initial investment for Individual
Retirement Accounts ("IRAs") is $1,000. The minimum is $250 for a
spousal IRA. Subsequent investments in IRAs must be at least $250. There are
no minimum requirements for pension and profit sharing plans or custodial
accounts for minors.

The Fund reserves the right to reduce or waive the minimum purchase requirements
in certain cases where subsequent and continuing purchases are contemplated.

DISTRIBUTOR

BFS, a broker-dealer registered with the SEC and a member of the NASD, is the
current distributor of the Fund's shares, pursuant to a selling agreement which
became effective on [April 30], 1999 (the "Selling Agreement"). Under the
Selling Agreement, BFS is the non-exclusive agent in certain jurisdictions for
the Fund's continuous offering of shares. Shares of the Fund are offered to the
public at net asset value, without the imposition of a sales load. The
jurisdictions in which BFS is the distributor are Arizona, Arkansas, Florida,
Maryland, North Dakota, Nebraska, Texas, Vermont and West Virginia.

REDEMPTION OF SHARES

(See "Redemption of Shares" in the Prospectus).

CALCULATION OF PERFORMANCE DATA

The average annual total returns of the Fund for one year, five years and ten
years ended December 31, 1998 are listed below:

One Year: -18.90%
Five Years: 7.65%
Ten Years: 10.01%

The one-year performance is for the period January 1, 1998 to December 31, 1998.
The five-year period runs from January 1, 1994 to December 31, 1998 and the ten
year-period runs from January 1, l988 to December 31, 1997. To obtain the
performance listed above, the Fund computed its average total return for each
period of time. The Fund made this calculation by first determining the total
return for a period and then using an exponential function based upon the number
of years involved to obtain an average.

The total return for a period is calculated by determining the redeemable value
of a $1,000 initial investment made at the beginning of the period, with
dividends and capital gains reinvested on the reinvestment date, on the last day
of the period and dividing the value by $1,000. The average annual total return
for the period is calculated by taking the total return for the period and
determining the annual average by using an exponential function based upon the
number of years and any fraction thereof in the period.

In addition to an average annual total return, the Fund calculates its total
returns on a calendar year basis. Listed below are the Funds total returns for
each calendar year from 1985 through 1998:

January 1, 1985 - December 31, l985 23.6%
January 1, 1986 - December 31, l986 14.6%
January 1, 1987 - December 31, l987 2.9%
January 1, 1988 - December 31, l988 21.6%
January 1, 1989 - December 31, l989 16.5%
January 1, 1990 - December 31, 1990 -23.9%
January 1, 1991 - December 31, 1991 43.7%
January 1, 1992 - December 31, 1992 20.6%
January 1, 1993 - December 31, 1993 22.9%
January 1, 1994 - December 31, 1994 3.9%
January 1, 1995 - December 31, 1995 19.2%
January 1, 1996 - December 31, 1996 14.4%
January 1, 1997 - December 31, 1997 26.1%
January 1, 1998 - December 31, 1998 -18.90%

Annual average total return and the total returns for calendar year are based on
historical performance and are not intended as an indication of future
performance.

GENERAL INFORMATION

History and Capital Structure

The Fund is a series of shares of The Berwyn Funds, a Delaware business trust
formed under the laws of the State of Delaware on February 4, 1999. The Fund is
the successor to TBF, a corporation organized under the laws of the Commonwealth
of Pennsylvania in February, 1983, which was a no-load, diversified, open-end
management investment company. In a reorganization approved by vote of the
shareholders of TBF and accomplished on April 30, 1999, all the assets and
liabilities of TBF were transferred to the Fund and the shareholders of TBF
became the shareholders of the Fund. Thereafter the Fund has carried on the
business of TBF.

Custodian

PNC Bank, 400 Bellevue Parkway, Suite 108, Wilmington, DE 19809 is the custodian
for the Fund. The custodian holds all securities and cash owned by the Fund and
collects all dividends and interest due on the securities.

Independent Accountants

PricewaterhouseCoopers LLP, 30 South 17th Street, Philadelphia, Pennsylvania,
has been selected as the independent accountants for the Fund by the Board of
Trustees. PricewaterhouseCoopers LLP performs an annual audit of the financial
statements of the Fund.

Litigation

The Fund is not involved in any litigation or other legal proceedings.

DISTRIBUTION AND TAXES

Distributions of Net Investment Income

Distributions of Capital Gains

Information on the Tax Character of Distributions

Election to Be Taxed as a Regulated Investment Company

The Fund has elected to be treated as a regulated investment company under
Subchapter M of the Internal Revenue Code, has qualified as such for its most
recent fiscal year, and intends to so qualify during the current fiscal year. As
a regulated investment company, the Fund generally pays no federal income tax on
the income and gains it distributes to you. The Board reserves the right not to
maintain the qualification of the Fund as a regulated investment company if it
determines such course of action to be beneficial to shareholders. In such case,
the Fund will be subject to federal, and possibly state, corporate taxes on its
taxable income and gains, and distributions to you will be taxed as ordinary
dividend income to the extent of the Fund's earnings and profits.

Excise Tax Distribution Requirements

To avoid federal excise taxes, the Internal Revenue Code requires the Fund to
distribute to you by December 31 of each year, at a minimum, the following
amounts: 98% of its taxable ordinary income earned during the calendar year; 98%
of its capital gain net income earned during the twelve month period ending
October 31; and 100% of any undistributed amounts from the prior year. The Fund
intends to declare and pay these amounts in December (or in January, which you
treat as received in December) to avoid these excise taxes, but can
give no assurances that its distributions will be sufficient to eliminate all
taxes.

Redemption of Fund Shares

U.S. Government Obligations

Investment in Complex Securities

FINANCIAL STATEMENTS

TBF's audited financial statements and notes thereto for the year ended December
31, 1998 and the report of PricewaterhouseCoopers LLP, TBF's
independent accountants, on such financial statements (the "Report") are
included in TBF's 1998 Annual Report to Shareholders (the "Annual Report") and
incorporated by reference in this SAI by amendment to the Trust's
registration statement. A copy of the Annual Report accompanies this SAI and an
investor may obtain a copy of the Annual Report by writing to the Fund or
calling (800) 992-6757.

<PAGE>

APPENDIX A

DEFINITIONS OF STANDARD & POOR'S BOND RATINGS

Standard & Poor's Ratings Group gives ratings to bonds that range from AAA to D.
Definitions of these ratings are set forth below. The Fund may invest in bonds
with any of these ratings.

AAA Debt rated AAA has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.

AA Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small degree.

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

C The rating C is reserved for income bonds on which no interest is being
paid.

D Debt rated D is in default, and payment of interest and/or repayment of
principal is in arrears.

<PAGE>

APPENDIX B

MOODY'S BOND RATINGS

Moody's Investor's Service, Inc. gives
ratings to bonds that range from Aaa to D.
Definitions of these ratings are set forth below. The Fund may invest in bonds
with any of these ratings.

Aaa - These bonds are judged to be of the best quality. They carry the
smallest degree of investment risk. Interest payments are protected by a
large or by an exceptionally stable margin and principal is secure.

Aa - These bonds are judged to be of high quality by all standards. They
are rated lower than the best bonds because margins of protection may
not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than in
Aaa securities.

A - These are bonds which possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements
may be present which suggest a susceptibility to impairment sometime in
the future.

Baa - These bonds are considered as medium grade obligations, i.e., they are
neither highly protected nor poorly secured. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics
as well.

Ba - These are bonds judged to have speculative elements; their future
cannot be considered as well assured. Uncertainty of position
characterizes bonds in this class.

Caa - These are bonds of poor standing. Such issues may be in default or
there may be present elements of danger with respect to principal or
interest.

Ca - These bonds represent obligations which are speculative in a high
degree. Such issues are often in default or have other market
shortcomings.

C - These are the lowest rated class of bonds and issues so rated can be
regarded as having extremely poor prospects of ever attaining any real
investment standing.

<PAGE>
PART C

Item 23. Exhibits

(a)(1) Agreement and Declaration of Trust is incorporated by
reference.

(a)(2) Certificate of Trust is incorporated by reference.

(b) By-Laws are incorporated by reference.

(d)(1) Form of Contract for Investment Advisory Services for the
Berwyn Fund series is incorporated by reference.

(d)(2) Form of Contract for Investment Advisory Services for the
Berwyn Income Fund series is incorporated by reference.

(e) Form of Selling Agreement between the Fund and Berwyn
Financial Services Corp. is incorporated by reference.

(f) Not applicable.

(g) Form of Custodian Services Agreement between the Fund and PNC
Trust Company is included herein as Exhibit EX-99.B8.
=
(h) Form of Transfer Agency Services Agreement between the
Fund and PFPC Inc. is included herein as Exhibit EX-99.B9.

(i) Opinion and consent of counsel is included herein as Exhibit
EX-99.B10.

(j) Consent of PricewaterhouseCoopers LLP is included herein
as Exhibit EX-99.B11.

(k) Not applicable.

(l) Not applicable.

(m) Not applicable.

(n)(1) Financial Data Schedule for the Berwyn Income Fund series is
included herein as Exhibit EX-27.1.

(n)(2) Financial Data Schedule for Berwyn Fund series is
included herein as Exhibit EX-27.2.

(o) Not applicable.

(p)(1) Power of Attorney for Robert E. Killen is incorporated by
reference.

(p)(2) Power of Attorney for Edward A. Killen, II, Anthony N.
Carrelli, Deborah D. Dorsi, Denis P. Conlon and the Fund is
incorporated by reference.

Item 24. Persons Controlled by or Under Common Control with the Fund.

The Fund is not under common control with any person and does not control
directly or indirectly any person.

Item 25. Indemnification.

Article VII, Section 2 of the Fund's Agreement and Declaration of Trust and
Article VI of the By-Laws set forth the rules on indemnification of officers and
Trustees. Article VII, Section 2 of the Agreement and Declaration of Trust
provides:

(a) To the fullest extent that limitations on the liability of Trustees
and officers are permitted by the DBTA, the officers and Trustees shall
not be responsible or liable in any event for any act or omission of
any agent, employee, Investment Adviser or Principal Underwriter of the
Trust; or with respect to each Trustee and officer, the act or omission
of any other Trustee or officer, respectively. The Trust, out of the
Trust Property, shall indemnify and hold harmless each and every
officer and Trustee from and against any and all claims and demands
whatsoever arising out of or related to such officer's or Trustee's
performance of his or her duties as an officer or Trustee of the Trust.
This limitation on liability applies to events occurring at the time a
Person serves as a Trustee or officer of the Trust whether or not such
Person is a Trustee or officer at the time of any proceeding in which
liability is asserted. Nothing herein contained shall indemnify, hold
harmless or protect any officer or Trustee from or against any
liability to the Trust or any Shareholder to which such Person would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of such Person's office.

(b) Every note, bond, contract, instrument, certificate or undertaking
and every other act or document whatsoever issued, executed or done by
or on behalf of the Trust, the officers or the Trustees or any of them
in connection with the Trust shall be conclusively deemed to have been
issued, executed or done only in such Person's capacity as Trustee
and/or as officer, and such Trustee or officer, as applicable, shall
not be personally liable therefore, except as described in the last
sentence of the first paragraph of this Section 2 of this Article VII.

Article VI, Section 2 of the By-Laws provides:

ACTIONS OTHER THAN BY TRUST. The Trust shall indemnify any person who
was or is a party or is threatened to be made a party to any proceeding
(other than an action by or in the right of the Trust) by reason of the
fact that such person is or was an agent of the Trust, against
expenses, judgments, fines, settlements and other amounts actually and
reasonably incurred in connection with such proceeding if such person
acted in good faith and in a manner that such person reasonably
believed to be in the best interests of the Trust and in the case of a
criminal proceeding, had no reasonable cause to believe the conduct of
such person was unlawful. The termination of any proceeding by
judgment, order, settlement, conviction or plea of nolo contendere or
its equivalent shall not of itself create a presumption that the person
did not act in good faith or in a manner which the person reasonably
believed to be in the best interests of the Trust or that the person
had reasonable cause to believe that the person's conduct was unlawful.

Article VI, Section 3 of the By-Laws provides:

ACTIONS BY TRUST. The Trust shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action by or in the right of the Trust to procure a judgment
in its favor by reason of the fact that the person is or was an agent
of the Trust, against expenses actually and reasonably incurred by that
person in connection with the defense or settlement of that action if
that person acted in good faith, in a manner that person believed to be
in the best interests of the Trust and with such care, including
reasonable inquiry, as an ordinarily prudent person in a like position
would use under similar circumstances.

Article VI, Section 4 of the By-Laws provides:

EXCLUSION OF INDEMNIFICATION. Notwithstanding any provision to the
contrary contained herein, there shall be no right to indemnification
for any liability arising by reason of willful misfeasance, bad faith,
gross negligence, or the reckless disregard of the duties involved in
the conduct of the agent's office with the Trust.

Item 26. Business and Other Connections of the Investment Adviser.

Robert E. Killen, President and a Trustee of the Fund, is Chairman and Chief
Executive Officer of The Killen Group, Inc., the investment adviser (the
"Adviser") to the Fund. He is a Director and Shareholder of Berwyn Financial
Services Corp. ("BFS"), a registered broker-dealer.

Edward A. Killen, II is Vice President and a Director of the Adviser. He is also
a Director, officer and shareholder of BFS.

For information as to any other business, profession, vocation or employment of
a substantial nature in which each Director or officer of the Adviser is or has
been engaged for his own account or in the capacity of Director, officer,
employee, partner or trustee within the last two fiscal years of the Fund,
reference is made to the Adviser's Form ADV (File #801-18770) currently on file
with the U.S. Securities and Exchange Commission as required by the Investment
Advisers Act of 1940, as amended.

Item 27. Principal Underwriters.

(a) None.

<PAGE>

(b)
Name & Principal Position & Offices Positions & Offices
Business Address with BFS with the Fund
Robert E. Killen Director President and Trustee
1199 Lancaster Avenue
Berwyn, PA 19132

Edward A. Killen, II Secretary and Director Trustee
1189 Lancaster Avenue
Berwyn, PA 19132

Kevin M. Ryan President, Treasurer Secretary and Treasurer
1199 Lancaster Avenue and Director
Berwyn, PA 19132

Item 28. Location of Accounts and Records

Accounts, books and other documents that are required to be maintained under
Section 31(a) of the Investment Company Act of 1940, as amended, and the
regulations thereunder are maintained as follows:

1) Journals detailing the purchase and sale of securities, the receipt and
delivery of securities, receipt and disbursement of cash and all other
debits and credits will be in the physical possession of Kevin M. Ryan at
1189 Lancaster Avenue, Berwyn, PA 19312.

2) Ledgers reflecting all asset, liability, reserve, capital, income and
expense accounts as well as ledgers containing the information required for
each portfolio security, for each broker-dealer, bank or other person
through whom transactions in portfolio securities are effected and for each
shareholder of record in the investment company will be maintained in the
physical possession of Kevin M. Ryan, 1189 Lancaster Avenue, Berwyn, PA
19312.

3) The Agreement and Declaration of Trust, the By-Laws, the minutes of
shareholders and Trustees' meetings will be maintained under the control of
Kevin M. Ryan, 1189 Lancaster Avenue, Berwyn, PA 19312.

4) A record of all brokerage orders and a record of all portfolio purchases
and sales will be maintained under the control of Kevin M. Ryan, 1189
Lancaster Avenue, Berwyn, PA 19312.

5) Monthly trial balances for all ledger accounts, a quarterly record of
broker commissions, a record identifying persons authorizing the purchase
or sale of portfolio securities and files of all advisory material received
from the Adviser will be under the control of Kevin M. Ryan, 1189 Lancaster
Avenue, Berwyn, PA 19312.

6) Records required to be maintained by the Adviser will be under the control
of Robert E. Killen, 1189 Lancaster Avenue, Berwyn, PA 19312.

Item 29. Management Services.

None.

Item 30. Undertakings.

The Fund has placed information required by Item 5 of the Form N-1A in the
latest annual report to shareholders and undertakes to furnish each person to
whom a prospectus is delivered with a copy of the Fund's latest annual report to
shareholders upon request and without charge.

<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act and the Investment Company
Act, the Fund certifies that it meets all of the requirements for effectiveness
of this Registration Statement under Rule 485(b) under the Securities Act and
has duly caused this registration statement to be signed on its behalf by the
undersigned, duly authorized, in the City of Berwyn, and the Commonwealth
of Pennsylvania on the 22nd day of April, 1999.

THE BERWYN FUNDS

By: /S/ ROBERT E. KILLEN
Robert E. Killen, President

Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed below by the following persons in the capacities and
on the date indicated.

Signature Title Date

/S/ ROBERT E. KILLEN President and Trustee April 22, 1999
ROBERT E. KILLEN (chief executive officer)

/S/ KEVIN M. RYAN Treasurer (chief financial officer) April 22, 1999
KEVIN M. RYAN

/S/ ANTHONY N. CARRELLI* Trustee April 22, 1999
ANTHONY N. CARRELLI

/S/ DENIS P. CONLON* Trustee April 22, 1999
DENIS P. CONLON

/S/ DEBORAH D. DORSI* Trustee April 22, 1999
DEBORAH D. DORSI

/S/ EDWARD A. KILLEN, II* Trustee April 22, 1999
EDWARD A. KILLEN, II

* By /S/ KEVIN M. RYAN
Kevin M. Ryan, as attorney-in-fact for such person, pursuant to a
Power of Attorney filed herewith with the U.S. Securities
and Exchange Commission.

<PAGE>

EXHIBIT INDEX

EDGAR EXHIBIT FORM N-1A EXHIBIT
NUMBER NUMBER
EX-99.B8 Form of Custodian Services Agreement
between the Fund and PNC Trust 23(g)

EX-99.B9 Form of Transfer Agency Services
Agreement between the Fund and PFPC
Inc. 23(h)

EX-99.B10 Opinion and consent of counsel 23(i)

EX-99.B11. Consent of PricewaterhouseCoopers LLP 23(j)

EX-27.1 Financial Data Schedule of The Berwyn
Income Fund series 23(n)(1)

EX-27.2 Financial Data Schedule of The Berwyn
Fund series 23(n)(2)

CUSTODIAN SERVICES AGREEMENT

THIS AGREEMENT is made as of April 30, 1999 by and between PFPC TRUST
COMPANY ("PFPC Trust"), and THE BERWYN FUNDS, a Delaware business trust (the
"Fund").
W I T N E S S E T H:
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Fund wishes to retain PFPC Trust to provide custodian
services, and PFPC Trust wishes to furnish custodian services, either directly
or through an affiliate or affiliates, as more fully described herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, the parties
hereto agree as follows:

1. Definitions. As Used in This Agreement:
(a) "1933 Act" means the Securities Act of 1933, as amended.

(b) "1934 Act" means the Securities Exchange Act of 1934, as amended.

(c) "Authorized Person" means any officer of the Fund and any other
person authorized by the Fund to give Oral or Written Instructions
on behalf of the Fund and listed on the Authorized Persons Appendix
attached hereto or any amendment thereto as may be received by PFPC
Trust. An Authorized Person's scope of authority may be limited by
the Fund by setting forth such limitation in the Authorized Persons
Appendix.

(d) "Book-Entry System" means Federal Reserve Treasury book-entry
system for United States and federal agency securities, its
successor or successors, and its nominee or nominees and any
book-entry system maintained by an exchange registered with the SEC
under the 1934 Act.

(e) "CEA" means the Commodities Exchange Act, as amended.

(f) "Change of Control" means a change in ownership or control (not
including transactions between wholly-owned direct or indirect
subsidiaries of a common parent) of 25% or more of the beneficial
ownership of the shares of common stock or shares of beneficial
interest of an entity or its parent(s).

(g) "Oral Instructions" mean oral instructions received by PFPC Trust
from an Authorized Person or from a person reasonably believed by
PFPC Trust to be an Authorized Person.

(h) "PFPC Trust" means PFPC Trust Company or a subsidiary or affiliate
of PFPC Trust Company.

(i) "SEC" means the Securities and Exchange Commission.

(j) "Securities Laws" mean the 1933 Act, the 1934 Act, the 1940 Act
and the CEA.

(k) "Shares" mean the shares of beneficial interest of any series or
class of the Fund.

(l) "Property" means:
(i) any and all securities and other investment items which the
Fund may from time to time deposit, or cause to be deposited,
with PFPC Trust or which PFPC Trust may from time to time hold
for the Fund;

(ii) all income in respect of any of such securities or other
investment items;

(iii) all proceeds of the sale of any of such securities or
investment items; and

(iv) all proceeds of the sale of securities issued by the Fund,
which are received by PFPC Trust from time to time, from or on
behalf of the Fund.

(m) "Written Instructions" mean written instructions signed by two
Authorized Persons and received by PFPC Trust. The instructions may
be delivered by hand, mail, tested telegram, cable, telex or
facsimile sending device.

2. Appointment. The Fund hereby appoints PFPC Trust to provide custodian
services to the Fund, on behalf of each of its investment portfolios
(each, a "Portfolio"), and PFPC Trust accepts such appointment and agrees
to furnish such services.

3. Delivery of Documents. The Fund has provided or, where applicable, will
provide PFPC Trust with the following: (a) certified or authenticated
copies of the resolutions of the Fund's Board of Trustees, approving the
appointment of PFPC Trust or its affiliates to provide services;

(b) a copy of the Fund's most recent effective registration statement;

(d) a copy of the distribution agreement with respect to each class of
Shares;

(e) a copy of each Portfolio's administration agreement;

(f) copies of any shareholder servicing agreements made in respect of
the Fund or a Portfolio; and

(g) certified or authenticated copies of any and all amendments or
supplements to the foregoing.

4. Compliance with Laws.
PFPC Trust undertakes to comply with material applicable requirements of
the Securities Laws and material laws, rules and regulations of
governmental authorities having jurisdiction with respect to the duties to
be performed by PFPC Trust hereunder. Except as specifically set forth
herein, PFPC Trust assumes no responsibility for such compliance by the
Fund or any Portfolio.

5. Instructions.
(a) Unless otherwise provided in this Agreement, PFPC Trust shall act
only upon Oral Instructions or Written Instructions.

(b) PFPC Trust shall be entitled to rely upon any Oral Instructions
or Written Instructions it receives from an Authorized Person (or
from a person reasonably believed by PFPC Trust to be an
Authorized Person) pursuant to this Agreement. PFPC Trust may
assume that any Oral Instructions or Written Instructions
received hereunder are not in any way inconsistent with the
provisions of organizational documents of the Fund or of any
vote, resolution or proceeding of the Fund's Board of Trustees or
of the Fund's shareholders, unless and until PFPC Trust receives
Written Instructions to the contrary.

(c) The Fund agrees to forward to PFPC Trust Written Instructions
confirming Oral Instructions (except where such Oral Instructions
are given by PFPC Trust or its affiliates) so that PFPC Trust
receives the Written Instructions by the close of business on the
same day that such Oral Instructions are received. The fact that
such confirming Written Instructions are not received by PFPC
Trust shall in no way invalidate the transactions or
enforceability of the transactions authorized by the Oral
Instructions. Where Oral Instructions or Written Instructions
reasonably appear to have been received from an Authorized
Person, PFPC Trust shall incur no liability to the Fund in acting
upon such Oral Instructions or Written Instructions provided that
PFPC Trust's actions comply with the other provisions of this
Agreement.

6. Right to Receive Advice.
(a) Advice of the Fund. If PFPC Trust is in doubt as to any action it
should or should not take, PFPC Trust may request directions or
advice, including Oral Instructions or Written Instructions, from
the Fund.

(b) Advice of Counsel. If PFPC Trust shall be in doubt as to any
question of law pertaining to any action it should or should not
take, PFPC Trust may request advice at its own cost from such
counsel of its own choosing (who may be counsel for the Fund, the
Fund's investment adviser or PFPC Trust, at the option of PFPC
Trust).

(c) Conflicting Advice. In the event of a conflict between
directions, advice or Oral Instructions or Written Instructions
PFPC Trust receives from the Fund, and the advice it receives
from counsel, PFPC Trust shall be entitled to rely upon and
follow the advice of counsel. In the event PFPC Trust so relies
on the advice of counsel, PFPC Trust remains liable for any
action or omission on the part of PFPC Trust which constitutes
willful misfeasance, bad faith, negligence or reckless disregard
by PFPC Trust of any duties, obligations or responsibilities set
forth in this Agreement.

(d) Protection of PFPC Trust. PFPC Trust shall be protected in any act
ion it takes or does not take in reliance upon directions, advice or
Oral Instructions or Written Instructions it receives from the
Fund or from counsel and which PFPC Trust believes, in good
faith, to be consistent with those directions, advice or Oral
Instructions or Written Instructions. Nothing in this section
shall be construed so as to impose an obligation upon PFPC Trust
(i) to seek such directions, advice or Oral Instructions or
Written Instructions, or (ii) to act in accordance with such
directions, advice or Oral Instructions or Written Instructions
unless, under the terms of other provisions of this Agreement,
the same is a condition of PFPC Trust's properly taking or not
taking such action. Nothing in this subsection shall excuse
PFPC Trust when an action or omission on the part of PFPC Trust
constitutes willful misfeasance, bad faith, negligence or
reckless disregard by PFPC Trust of any duties, obligations or
responsibilities set forth in this Agreement.

7. Records; Visits. The books and records pertaining to the Fund and any
Portfolio, which are in the possession or under the control of PFPC
Trust, shall be the property of the Fund. Such books and records shall
be prepared and maintained as required by the 1940 Act and other
applicable securities laws, rules and regulations. The Fund and
Authorized Persons shall have access to such books and records at all
times during PFPC Trust's normal business hours. Upon the reasonable
request of the Fund, copies of any such books and records shall be
provided by PFPC Trust to the Fund or to an authorized representative
of the Fund, at the Fund's expense.

8. Confidentiality. PFPC Trust agrees to keep confidential all records of
the Fund and information relating to the Fund and its shareholders,
unless the release of such records or information is otherwise
consented to, in writing, by the Fund. The Fund agrees that such
consent shall not be unreasonably withheld and may not be withheld
where PFPC Trust may be exposed to civil or criminal contempt
proceedings or when PFPC Trust is required to divulge such information
or records to duly constituted authorities.

9. Cooperation with Accountants. PFPC Trust shall cooperate with the Fund's
independent public accountants and shall take all reasonable action to
make any requested information available to such accountants as reasonably
requested by the Fund.

10. Disaster Recovery. PFPC Trust shall enter into and shall maintain in
effect with appropriate parties one or more agreements making
reasonable provisions for emergency use of electronic data processing
equipment to the extent appropriate equipment is available. In the
event of equipment failures, PFPC Trust shall, at no additional expense
to the Fund, take reasonable steps to minimize service interruptions.
PFPC Trust shall have no liability with respect to the loss of data or
service interruptions caused by equipment failure provided such loss or
interruption is not caused by PFPC Trust's own willful misfeasance, bad
faith, negligence or reckless disregard of its duties or obligations
under this Agreement.

11. Year 2000 Readiness Disclosure. PFPC Trust (a) has reviewed its
business and operations as they relate to the services provided
hereunder, (b) has developed or is developing a program to remediate or
replace computer applications and systems, and (c) has developed a
testing plan to test the remediation or replacement of computer
applications/systems, in each case, to address on a timely basis the
risk that certain computer applications/systems used by PFPC Trust may
be unable to recognize and perform date sensitive functions involving
dates prior to, including and after December 31, 1999, including dates
such as February 29, 2000 (the "Year 2000 Challenge"). To the best of
PFPC Trust's knowledge and belief, the reasonably foreseeable
consequences of the Year 2000 Challenge will not adversely effect PFPC
Trust's ability to perform its duties and obligations under this
Agreement.

12. Compensation. As compensation for custody services rendered by PFPC Trust
during the term of this Agreement, the Fund, on behalf of each of the
Portfolios, will pay to PFPC Trust a fee or fees as may be agreed to in
writing from time to time by the Fund and PFPC Trust.

13. Indemnification. The Fund, on behalf of each Portfolio, agrees to
indemnify and hold harmless PFPC Trust from all taxes, charges,
expenses, assessments, claims and liabilities (including, without
limitation, liabilities arising under the Securities Laws and any state
or foreign securities or blue sky laws, and amendments thereto, and
expenses, including (without limitation) attorneys' fees and
disbursements), arising directly or indirectly from any action or
omission to act which PFPC Trust takes (i) in connection with providing
its service hereunder, (ii) at the request or on the direction of or in
reliance on the advice of the Fund or (iii) upon Oral Instructions or
Written Instructions. PFPC Trust shall not be indemnified against any
liability (or any expenses incident to such liability) arising out of
PFPC Trust's willful misfeasance, bad faith, negligence or reckless
disregard of its duties under this Agreement.

14. Responsibility of PFPC Trust.
(a) PFPC Trust shall be under no duty to take any action on behalf of
the Fund or any Portfolio except as specifically set forth herein
or as may be specifically agreed to by PFPC Trust in writing.
PFPC Trust shall be obligated to exercise care and diligence in
the performance of its duties hereunder, to act in good faith and
to use its best efforts, within reasonable limits, in performing
services provided for under this Agreement. PFPC Trust shall be
liable for any damages arising out of PFPC Trust's failure to
perform its duties under this Agreement to the extent such
damages arise out of PFPC Trust's willful misfeasance, bad faith,
negligence or reckless disregard of its duties under this
Agreement.

(b) Without limiting the generality of the foregoing or of any other
provision of this Agreement, PFPC Trust shall not be under any
duty or obligation to inquire into and shall not be liable for
(i) the validity or invalidity or authority or lack thereof of
any Oral Instruction or Written Instruction, notice or other
instrument which PFPC Trust reasonably believes to be genuine; or
(ii) subject to Sections 10 and 11, delays, errors, loss of data
or other losses occurring by reason of circumstances beyond PFPC
Trust's control, including acts of civil or military authority,
national emergencies, fire, flood, catastrophe, acts of God,
insurrection, war, riots or failure of the mails, transportation,
communication or power supply.

(c) Notwithstanding anything in this Agreement to the contrary, neither
PFPC Trust nor its affiliates shall be liable to the Fund or to any
Portfolio for any consequential, special or indirect losses or
damages which the Fund may incur or suffer, whether or not the
likelihood of such losses or damages was known by PFPC Trust or its
affiliates.

15. Description of Services.
(a) Delivery of the Property. The Fund will deliver or arrange for
delivery to PFPC Trust, all the Property owned by the Portfolios,
including cash received as a result of the distribution of Shares,
during the period that is set forth in this Agreement. PFPC Trust
will not be responsible for such property until actual receipt.

(b) Receipt and Disbursement of Money. PFPC Trust, acting upon
Written Instructions, shall open and maintain separate accounts
in the Fund's name using all cash received from or for the
account of the Fund, subject to the terms of this Agreement. In
addition, upon Written Instructions, PFPC Trust shall open
separate custodial accounts for each separate Portfolio of the
Fund (collectively, the "Accounts") and shall hold in the
Accounts all cash received from or for the Accounts of the Fund
specifically designated to each separate Portfolio.
PFPC Trust shall make cash payments from or for the Accounts of a
Portfolio only for:

(i) purchases of securities in the name of a Portfolio, PFPC
Trust, PFPC Trust's nominee or a sub-custodian or nominee
thereof as provided in sub-section (j) and for which PFPC
Trust has received a copy of the broker's or dealer's
confirmation or payee's invoice, as appropriate;

(ii) purchase or redemption of Shares of the Fund delivered to PFPC
Trust;

(iii) payment of, subject to Written Instructions, interest, taxes,
administration, accounting, distribution, advisory, management
fees or similar expenses which are to be borne by a Portfolio;

(iv) payment to, subject to receipt of Written Instructions, the
Fund's transfer agent, as agent for the shareholders, of an
amount equal to the amount of dividends and distributions
stated in the Written Instructions to be distributed in
cash by the transfer agent to shareholders, or, in lieu of
paying the Fund's transfer agent, PFPC Trust may arrange
for the direct payment of cash dividends and distributions
to shareholders in accordance with procedures mutually
agreed upon from time to time by and among the Fund, PFPC
Trust and the Fund's transfer agent.

(v) payments, upon receipt of Written Instructions, in connection
with the conversion, exchange or surrender of securities owned
or subscribed to by the Fund and held by or delivered to PFPC
Trust;

(vi) payments of the amounts of dividends received with respect to
securities sold short;

(vii) payments made to a sub-custodian pursuant to provisions in
sub-section (c) of this Section; and

(viii)payments, upon Written Instructions, made for other Fund
purposes.

PFPC Trust is hereby authorized to endorse and collect all checks,
drafts or other orders for the payment of money received as custodian
for the Accounts.

(c) Receipt of Securities; Subcustodians.
(i) PFPC Trust shall hold all securities received by it for the
Accounts in a separate account that physically segregates
such securities from those of any other persons, firms or
corporations, except for securities held in a Book-Entry
System. All such securities shall be held or disposed of
only upon Written Instructions of the Fund pursuant to the
terms of this Agreement. PFPC Trust shall have no power or
authority to assign, hypothecate, pledge or otherwise
dispose of any such securities or investment, except upon
the express terms of this Agreement and upon Written
Instructions authorizing the transaction. In no case may
any member of the Fund's Board of Trustees, or any officer,
employee or agent of the Fund withdraw any securities.

At PFPC Trust's own expense and for its own convenience, PFPC
Trust may enter into sub-custodian agreements with other banks
or trust companies to perform duties described in this
sub-section (c) with respect to domestic assets. Such bank or
trust company shall have an aggregate capital, surplus and
undivided profits, according to its last published report, of
at least one million dollars ($1,000,000), if it is a
subsidiary or affiliate of PFPC Trust, or at least twenty
million dollars ($20,000,000) if such bank or trust company is
not a subsidiary or affiliate of PFPC Trust. In addition, such
bank or trust company must be qualified to act as custodian
and agree to comply with the relevant provisions of applicable
rules and regulations. Any such arrangement will not be
entered into without prior written notice to the Fund (or as
otherwise provided in the 1940 Act).

In addition, PFPC Trust may enter into arrangements with
sub-custodians with respect to services regarding foreign
assets. Any such arrangement will be entered into with prior
written notice to the Fund (or as otherwise provided in the
1940 Act).

PFPC Trust shall remain responsible for the performance of all
of its duties as described in this Agreement and shall hold
the Fund and each Portfolio harmless from its own acts or
omissions, under the standards of care provided for herein, or
the acts and omissions of any sub-custodian chosen by PFPC
Trust under the terms of this sub-section (c).

(d) Transactions Requiring Instructions. Upon receipt of Oral
Instructions or Written Instructions and not otherwise, PFPC
Trust, directly or through the use of the Book-Entry System,
shall:

(i) deliver any securities held for a Portfolio against the
receipt of payment for the sale of such
securities;

(ii) execute and deliver to such persons as may be designated in
such Oral Instructions or Written Instructions, proxies,
consents, authorizations, and any other instruments whereby
the authority of a Portfolio as owner of any securities may be
exercised;

(iii) deliver any securities to the issuer thereof, or its agent,
when such securities are called, redeemed, retired or
otherwise become payable at the option of the holder; provided
that, in any such case, the cash or other consideration is to
be delivered to PFPC Trust;

(iv) deliver any securities held for a Portfolio against receipt of
other securities or cash issued or paid in connection with the
liquidation, reorganization, refinancing, tender offer,
merger, consolidation or recapitalization of any corporation,
or the exercise of any conversion privilege;

(v) deliver any securities held for a Portfolio to any
protective committee, reorganization committee or other
person in connection with the reorganization, refinancing,
merger, consolidation, recapitalization or sale of assets
of any corporation, and receive and hold under the terms of
this Agreement such certificates of deposit, interim
receipts or other instruments or documents as may be issued
to it to evidence such delivery;

(vi) make such transfer or exchanges of the assets of the
Portfolios and take such other steps as shall be stated in
said Oral Instructions or Written Instructions to be for the
purpose of effectuating a duly authorized plan of liquidation,
reorganization, merger, consolidation or recapitalization of
the Fund;

(vii) release securities belonging to a Portfolio to any bank or
trust company for the purpose of a pledge or hypothecation to
secure any loan incurred by the Fund on behalf of that
Portfolio; provided, however, that securities shall be
released only upon payment to PFPC Trust of the monies
borrowed, except that in cases where additional collateral is
required to secure a borrowing already made subject to proper
prior authorization, further securities may be released for
that purpose; and repay such loan upon redelivery to it of the
securities pledged or hypothecated therefor and upon surrender
of the note or notes evidencing the loan;

(viii)release and deliver securities owned by a Portfolio in
connection with any repurchase agreement entered into on
behalf of the Fund, but only on receipt of payment therefor;
and pay out moneys of the Fund in connection with such
repurchase agreements, but only upon the delivery of the
securities;

(ix) release and deliver or exchange securities owned by the Fund
in connection with any conversion of such securities, pursuant
to their terms, into other securities;

(x) release and deliver securities to a broker in connection with
the broker's custody of margin collateral relating to futures
and options transactions;

(xi) release and deliver securities owned by the Fund for the
purpose of redeeming in kind shares of the Fund upon delivery
thereof to PFPC Trust; and

(xii) release and deliver or exchange securities owned by the Fund
for other corporate purposes.

PFPC Trust must also receive a certified resolution describing
the nature of the corporate purpose and the name and address
of the person(s) to whom delivery shall be made when such
action is pursuant to sub-paragraph d(xii).

(e) Use of Book-Entry System. PFPC Trust is authorized and
instructed, on a continuous basis, to deposit in the Book-Entry
System all securities belonging to the Portfolios eligible for
deposit therein and to utilize the Book-Entry System to the
extent possible in connection with settlements of purchases and
sales of securities by the Portfolios, and deliveries and returns
of securities loaned, subject to repurchase agreements or used as
collateral in connection with borrowings. PFPC Trust shall
continue to perform such duties until it receives Written
Instructions or Oral Instructions authorizing contrary
actions.

PFPC Trust shall administer the Book-Entry System as follows:

(i) With respect to securities of each Portfolio which are
maintained in the Book-Entry System, the records of PFPC Trust
shall identify by Book-Entry or otherwise those securities
belonging to each Portfolio.

(ii) Assets of each Portfolio deposited in the Book-Entry System
will at all times be segregated from any assets and cash
controlled by PFPC Trust in other than a fiduciary or
custodian capacity but may be commingled with other assets
held in such capacities.

PFPC Trust will provide the Fund with such reports on its own system
of internal control as the Fund may reasonably request from time to
time.

(f) Registration of Securities. All Securities held for a Portfolio
which are issued or issuable only in bearer form, except such
securities held in the Book-Entry System, shall be held by PFPC
Trust in bearer form; all other securities held for a Portfolio
may be registered in the name of the Fund on behalf of that
Portfolio, PFPC Trust, the Book-Entry System, a sub-custodian, or
any duly appointed nominee of the Fund, PFPC Trust, Book-Entry
System or sub-custodian. The Fund reserves the right to instruct
PFPC Trust as to the method of registration and safekeeping of
the securities of the Fund. The Fund agrees to furnish to PFPC
Trust appropriate instruments to enable PFPC Trust to hold or
deliver in proper form for transfer, or to register in the name
of its nominee or in the name of the Book-Entry System or in the
name of another appropriate entity, any securities which it may
hold for the Accounts and which may from time to time be
registered in the name of the Fund on behalf of a Portfolio.

(g) Voting and Other Action. Neither PFPC Trust nor its nominee
shall vote any of the securities held pursuant to this Agreement
by or for the account of a Portfolio, except in accordance with
Written Instructions. PFPC Trust, directly or through the use of
the Book-Entry System, shall execute in blank and promptly
deliver all notices, proxies and proxy soliciting materials
received by PFPC Trust as custodian of the Property to the
registered holder of such securities. If the registered holder
is not the Fund on behalf of a Portfolio, then Written
Instructions or Oral Instructions must designate the person who
owns such securities.

(h) Transactions Not Requiring Instructions. In the absence of
contrary Written Instructions, PFPC Trust is authorized to take
the following actions:

(i) Collection of Income and Other Payments.

(A) collect and receive for the account of each
Portfolio, all income, dividends, distributions,
coupons, option premiums, other payments and similar
items, included or to be included in the Property,
and, in addition, promptly advise each Portfolio of
such receipt and credit such income, as collected, to
each Portfolio's custodian account;

(B) endorse and deposit for collection, in the name of the
Fund, checks, drafts, or other orders for the payment of
money;

(C) receive and hold for the account of each Portfolio
all securities received as a distribution on the
Portfolio's securities as a result of a stock
dividend, share split-up or reorganization,
recapitalization, readjustment or other rearrangement
or distribution of rights or similar securities
issued with respect to any securities belonging to a
Portfolio and held by PFPC Trust hereunder;

(D) present for payment and collect the amount payable upon
all securities which may mature or be, on a mandatory
basis, called, redeemed, or retired, or otherwise become
payable on the date such securities become payable; and

(E) take any action which may be necessary and proper in
connection with the collection and receipt of such
income and other payments and the endorsement for
collection of checks, drafts, and other negotiable
instruments.

(ii) Miscellaneous Transactions.

(A) PFPC Trust is authorized to deliver or cause to be
delivered Property against payment or other
consideration or written receipt therefor in the
following cases:

(1) for examination by a broker or dealer selling for
the account of a Portfolio in accordance with
street delivery custom;

(2) for the exchange of interim receipts or temporary
securities for definitive securities; and

(3) for transfer of securities into the name of the
Fund on behalf of a Portfolio or PFPC Trust or a
sub-custodian or a nominee of one of the
foregoing, or for exchange of securities for a
different number of bonds, certificates, or other
evidence, representing the same aggregate face
amount or number of units bearing the same
interest rate, maturity date and call provisions,
if any; provided that, in any such case, the new
securities are to be delivered to PFPC Trust.

(B) unless and until PFPC Trust receives Oral Instructions
or Written Instructions to the contrary, PFPC Trust
shall:

(1) pay all income items held by it which call for
payment upon presentation and hold the cash
received by it upon such payment for the account
of each Portfolio;

(2) collect interest and cash dividends received, with
notice to the Fund, to the account of each
Portfolio;

(3) hold for the account of each Portfolio all stock
dividends, rights and similar securities issued
with respect to any securities held by PFPC Trust;
and

(4) execute as agent on behalf of the Fund all
necessary ownership certificates required by the
Internal Revenue Code or the Income Tax
Regulations of the United States Treasury
Department or under the laws of any state now or
hereafter in effect, inserting the Fund's name, on
behalf of a Portfolio, on such certificate as the
owner of the securities covered thereby, to the
extent it may lawfully do so.

(i) Segregated Accounts.

(i) PFPC Trust shall upon receipt of Written Instructions or Oral
Instructions establish and maintain segregated accounts on its
records for and on behalf of each Portfolio. Such accounts may
be used to transfer cash and securities, including securities
in the Book-Entry System:

(A) for the purposes of compliance by the Fund with the
procedures required by a securities or option exchange,
providing such procedures comply with the 1940 Act and
any releases of the SEC relating to the maintenance of
segregated accounts by registered investment companies;
and

(B) upon receipt of Written Instructions, for other
corporate purposes.

(ii) PFPC Trust shall arrange for the establishment of IRA
custodian accounts for such shareholders holding Shares
through IRA accounts, in accordance with the Fund's
prospectuses, the Internal Revenue Code of 1986, as amended
(including regulations promulgated thereunder), and with
such other procedures as are mutually agreed upon from time
to time by and among the Fund, PFPC Trust and the Fund's
transfer agent.

(j) Purchases of Securities. PFPC Trust shall settle purchased
securities upon receipt of Oral Instructions or Written Instructions
that specify:

(i) the name of the issuer and the title of the
securities, including CUSIP number if applicable;

(ii) the number of shares or the principal amount purchased and
accrued interest, if any;

(iii) the date of purchase and settlement;

(iv) the purchase price per unit;

(v) the total amount payable upon such
purchase;

(vi) the Portfolio involved; and

(vii) the name of the person from whom or the broker through whom
the purchase was made. PFPC Trust shall upon receipt of
securities purchased by or for a Portfolio pay out of the
moneys held for the account of the Portfolio the total amount
payable to the person from whom or the broker through whom the
purchase was made, provided that the same conforms to the
total amount payable as set forth in such Oral Instructions or
Written Instructions.

(k) Sales of Securities. PFPC Trust shall settle sold securities upon
receipt of Oral Instructions or Written Instructions that specify:

(i) the name of the issuer and the title of the security,
including CUSIP number if applicable;

(ii) the number of shares or principal amount sold, and accrued
interest, if any;

(iii) the date of trade and settlement;

(iv) the sale price per unit;

(v) the total amount payable to the Fund upon such sale;

(vi) the name of the broker through whom or the person to whom the
sale was made;

(vii) the location to which the security must be delivered and
delivery deadline, if any; and

(viii)the Portfolio involved.

PFPC Trust shall deliver the securities upon receipt of the total amount
payable to the Portfolio upon such sale, provided that the total amount
payable is the same as was set forth in the Oral Instructions or Written
Instructions. Notwithstanding the other provisions thereof, PFPC Trust may
accept payment in such form as shall be satisfactory to it, and may
deliver securities and arrange for payment in accordance with the customs
prevailing among dealers in securities.

(l) Reports; Proxy Materials.

(i) PFPC Trust shall furnish to the Fund the following reports:

(A) such periodic and special reports as the Fund may
reasonably request;

(B) a monthly statement summarizing all transactions and
entries for the account of each portfolio, listing each
portfolio security belonging to each Portfolio with the
adjusted average cost of each issue and the market value
at the end of such month and stating the cash account of
each Portfolio including disbursements;

(D) such other information as may be agreed upon from time
to time between the Fund and PFPC Trust.

(ii) PFPC Trust shall transmit promptly to the Fund any proxy
statement, proxy material, notice of a call or conversion or
similar communication received by it as custodian of the
Property. PFPC Trust shall be under no other obligation to
inform the Fund as to such actions or events.

(m) Collections. All collections of monies or other property in
respect, or which are to become part, of the Property (but not
the safekeeping thereof upon receipt by PFPC Trust) shall be at
the sole risk of the Fund. If payment is not received by PFPC
Trust within a reasonable time after proper demands have been
made, PFPC Trust shall notify the Fund in writing, including
copies of all demand letters, any written responses and memoranda
of all oral responses and shall await instructions from the
Fund. PFPC Trust shall not be obliged to take legal action for
collection unless and until reasonably indemnified to its
satisfaction. PFPC Trust shall also notify the Fund as soon as
reasonably practicable whenever income due on securities is not
collected in due course and shall provide the Fund with periodic
status reports of such income collected after a reasonable time.

16. Duration and Termination. This Agreement shall continue until
terminated by the Fund or PFPC Trust on sixty (60) days' prior written
notice to the other party. In the event this Agreement is terminated
(pending appointment of a successor to PFPC Trust or vote of the
shareholders of the Fund to dissolve or to function without a custodian
of its cash, securities or other property), PFPC Trust shall not
deliver cash, securities or other property of the Portfolios to the
Fund. It may deliver them to a bank or trust company of PFPC Trust's
choice, having an aggregate capital, surplus and undivided profits, as
shown by its last published report, of not less than twenty million
dollars ($20,000,000), as a custodian for the Fund to be held under
terms similar to those of this Agreement. PFPC Trust shall not be
required to make any delivery or payment of assets upon termination
until full payment shall have been made to PFPC Trust of all of its
fees, compensation, costs and expenses. PFPC Trust shall have a
security interest in and shall have a right of setoff against the
Property as security for the payment of such fees, compensation, costs
and expenses.

17. Change of Control. Notwithstanding any other provision of this Agreement,
in the event of an agreement to enter into a transaction that would result
in a Change of Control of the Fund's adviser or sponsor, the Fund's
ability to terminate the Agreement will be suspended from the time of such
agreement until two years after the Change of Control.

18. Notices. All notices and other communications, including Written
Instructions, shall be in writing or by confirming telegram, cable,
telex or facsimile sending device. Notice shall be addressed (a) if to
PFPC Trust at 400 Bellevue Parkway, Wilmington, Delaware 19809; (b) if
to the Fund, at , Attn: ; or (c)
if to neither of the foregoing, at such other address as shall have
been given by like notice to the sender of any such notice or other
communication by the other party. If notice is sent by confirming
telegram, cable, telex or facsimile sending device, it shall be deemed
to have been given immediately. If notice is sent by first-class mail,
it shall be deemed to have been given five days after it has been
mailed. If notice is sent by messenger, it shall be deemed to have
been given on the day it is delivered.

19. Amendments. This Agreement, or any term hereof, may be changed or waived
only by a written amendment, signed by the party against whom enforcement
of such change or waiver is sought.

20. Delegation; Assignment. PFPC Trust may assign its rights and delegate
its duties hereunder to any affiliate of PFPC Trust or of PNC Bank
Corp., provided that (i) PFPC Trust gives the Fund 30 days' prior
written notice of such assignment or delegation; (ii) the assignee or
delegate agrees to comply with the relevant provision of the 1940 Act;
and (iii) PFPC Trust and such assignee or delegate promptly provide
such information as the Fund may reasonably request, and respond to
such questions as the Fund may reasonably ask, relative to the
assignment or delegation (including, without limitation, the
capabilities of the assignee or delegate).

21. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

22. Further Actions. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.

23. Limitations of Liability of the Trustees and Shareholders. A copy of the
Declaration of Trust of the Fund is on file with
, and notice is hereby given that
this instrument is executed on behalf of the Trustees of the Trust as
Trustees and not individually and that the obligations of this instrument
are not binding upon any of the Trustees or Shareholders individually but
are binding only upon the assets and property of the Fund.

24. Miscellaneous.
(a) Entire Agreement. This Agreement embodies the entire agreement and
understanding between the parties and supersedes all prior
agreements and understandings relating to the subject matter hereof,
provided that the parties may embody in one or more separate
documents their agreement, if any, with respect to delegated duties
or Oral Instructions.

(b) Captions. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of
the provisions hereof or otherwise affect their construction or
effect.

(c) Governing Law. This Agreement shall be deemed to be a contract made
in Delaware and governed by Delaware law, without regard to
principles of conflicts of law.

(d) Partial Invalidity. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.

(e) Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.

(f) Facsimile Signatures. The facsimile signature of any party to this
Agreement shall constitute the valid and binding execution hereof by
such party.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.

PFPC TRUST COMPANY

By: /s/ Joeph Gramlich
Joseph Gramlich

Title: Sr. Vice President

THE BERWYN FUNDS

By: /s/ Robert E. Killen
Robert E. Killen

Title: President

<PAGE>
AUTHORIZED PERSONS APPENDIX

NAME (Type) SIGNATURE

TRANSFER AGENCY SERVICES AGREEMENT

THIS AGREEMENT is made as of April 30, 1999 by and between PFPC INC., a
Delaware corporation ("PFPC"), and THE BERWYN FUNDS, a Delaware business trust
(the "Fund").
W I T N E S S E T H:
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Fund wishes to retain PFPC to serve as transfer agent,
registrar, dividend disbursing agent and shareholder servicing agent to its
investment portfolios listed on Exhibit A attached hereto and made a part
hereof, as such Exhibit A may be amended from time to time (each a "Portfolio"),
and PFPC wishes to furnish such services.

NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, the parties
hereto agree as follows:

1. Definitions. As Used in this Agreement:
(a) "1933 Act" means the Securities Act of 1933, as amended.

(b) "1934 Act" means the Securities Exchange Act of 1934, as amended.

(c) "Authorized Person" means any officer of the Fund and any other
person duly authorized by the Fund's Board of Trustees to give Oral
Instructions and Written Instructions on behalf of the Fund and
listed on the Authorized Persons Appendix attached hereto and made a
part hereof or any amendment thereto as may be received by PFPC. An
Authorized Person's scope of authority may be limited by the Fund by
setting forth such limitation in the Authorized Persons Appendix.

(d) "CEA" means the Commodities Exchange Act, as amended.

(e) "Change of Control" means a change in ownership or control (not
including transactions between wholly-owned direct or indirect
subsidiaries of a common parent) of 25% or more of the beneficial
ownership of the shares of common stock or shares of beneficial
interest of an entity or its parents(s).

(f) "Oral Instructions" mean oral instructions received by PFPC from an
Authorized Person or from a person reasonably believed by PFPC to be
an Authorized Person.

(g) "SEC" means the Securities and Exchange Commission.

(h) "Securities Laws" mean the 1933 Act, the 1934 Act, the 1940 Act
and the CEA.

(i) "Shares" mean the shares of beneficial interest of any series or
class of the Fund.

(j) "Written Instructions" mean written instructions signed by an
Authorized Person and received by PFPC. The instructions may be
delivered by hand, mail, tested telegram, cable, telex or facsimile
sending device.

2. Appointment. The Fund hereby appoints PFPC to serve as transfer agent,
registrar, dividend disbursing agent and shareholder servicing agent to
the Fund in accordance with the terms set forth in this Agreement. PFPC
accepts such appointment and agrees to furnish such services.

3. Delivery of Documents. The Fund has provided or, where applicable, will
provide PFPC with the following: (a) Certified or authenticated copies of
the resolutions of the Fund's Board of Trustees, approving the
appointment of PFPC or its affiliates to provide services to the
Fund and approving this Agreement;

(b) A copy of the Fund's most recent effective registration statement;

(d) A copy of the distribution agreement with respect to each class of
Shares of the Fund;

(e) A copy of each Portfolio's administration agreements if PFPC is not
providing the Portfolio with such services;

(f) Copies of any shareholder servicing agreements made in respect of
the Fund or a Portfolio; and

(g) Copies (certified or authenticated where applicable) of any and all
amendments or supplements to the foregoing.

4. Compliance with Rules and Regulations. PFPC undertakes to comply with all
applicable requirements of the Securities Laws and any laws, rules and
regulations of governmental authorities having jurisdiction with respect
to the duties to be performed by PFPC hereunder. Except as specifically
set forth herein, PFPC assumes no responsibility for such compliance by
the Fund or any of its investment portfolios.

5. Instructions.
(a) Unless otherwise provided in this Agreement, PFPC shall act only
upon Oral Instructions and Written Instructions.

(b) PFPC shall be entitled to rely upon any Oral Instructions and
Written Instructions it receives from an Authorized Person (or
from a person reasonably believed by PFPC to be an Authorized
Person) pursuant to this Agreement. PFPC may assume that any
Oral Instruction or Written Instruction received hereunder is not
in any way inconsistent with the provisions of organizational
documents or this Agreement or of any vote, resolution or
proceeding of the Fund's Board of Trustees or of the Fund's
shareholders, unless and until PFPC receives Written Instructions
to the contrary.

(c) The Fund agrees to forward to PFPC Written Instructions
confirming Oral Instructions so that PFPC receives the Written
Instructions by the close of business on the same day that such
Oral Instructions are received. The fact that such confirming
Written Instructions are not received by PFPC shall in no way
invalidate the transactions or enforceability of the transactions
authorized by the Oral Instructions. Where Oral Instructions or
Written Instructions reasonably appear to have been received from
an Authorized Person, PFPC shall incur no liability to the Fund
in acting upon such Oral Instructions or Written Instructions
provided that PFPC's actions comply with the other provisions of
this Agreement.

6. Right to Receive Advice.
(a) Advice of the Fund. If PFPC is in doubt as to any action it should
or should not take, PFPC may request directions or advice, including
Oral Instructions or Written Instructions, from the Fund.

(b) Advice of Counsel. If PFPC shall be in doubt as to any question of
law pertaining to any action it should or should not take, PFPC may
request advice at its own cost from such counsel of its own choosing
(who may be counsel for the Fund, the Fund's investment adviser or
PFPC, at the option of PFPC).

(c) Conflicting Advice. In the event of a conflict between
directions, advice or Oral Instructions or Written Instructions
PFPC receives from the Fund, and the advice it receives from
counsel, PFPC may rely upon and follow the advice of counsel. In
the event PFPC so relies on the advice of counsel, PFPC remains
liable for any action or omission on the part of PFPC which
constitutes willful misfeasance, bad faith, negligence or
reckless disregard by PFPC of any duties, obligations or
responsibilities set forth in this Agreement.

(d) Protection of PFPC. PFPC shall be protected in any action it
takes or does not take in reliance upon directions, advice or
Oral Instructions or Written Instructions it receives from the
Fund or from counsel and which PFPC believes, in good faith, to
be consistent with those directions, advice or Oral Instructions
or Written Instructions. Nothing in this section shall be
construed so as to impose an obligation upon PFPC (i) to seek
such directions, advice or Oral Instructions or Written
Instructions, or (ii) to act in accordance with such directions,
advice or Oral Instructions or Written Instructions unless, under
the terms of other provisions of this Agreement, the same is a
condition of PFPC's properly taking or not taking such action.
Nothing in this subsection shall excuse PFPC when an action or
omission on the part of PFPC constitutes willful misfeasance, bad
faith, negligence or reckless disregard by PFPC of any duties,
obligations or responsibilities set forth in this Agreement.

7. Records; Visits. The books and records pertaining to the Fund, which
are in the possession or under the control of PFPC, shall be the
property of the Fund. Such books and records shall be prepared and
maintained as required by the 1940 Act and other applicable securities
laws, rules and regulations. The Fund and Authorized Persons shall
have access to such books and records at all times during PFPC's normal
business hours. Upon the reasonable request of the Fund, copies of any
such books and records shall be provided by PFPC to the Fund or to an
Authorized Person, at the Fund's expense.

8. Confidentiality. PFPC agrees to keep confidential all records of the Fund
and information relating to the Fund and its shareholders, unless the
release of such records or information is otherwise consented to, in
writing, by the Fund. The Fund agrees that such consent shall not be
unreasonably withheld and may not be withheld where PFPC may be exposed to
civil or criminal contempt proceedings or when required to divulge such
information or records to duly constituted authorities.

9. Cooperation with Accountants. PFPC shall cooperate with the Fund's
independent public accountants and shall take all reasonable actions in
the performance of its obligations under this Agreement to ensure that the
necessary information is made available to such accountants for the
expression of their opinion, as required by the Fund.

10. Disaster Recovery. PFPC shall enter into and shall maintain in effect
with appropriate parties one or more agreements making reasonable
provisions for emergency use of electronic data processing equipment to
the extent appropriate equipment is available. In the event of
equipment failures, PFPC shall, at no additional expense to the Fund,
take reasonable steps to minimize service interruptions. PFPC shall
have no liability with respect to the loss of data or service
interruptions caused by equipment failure, provided such loss or
interruption is not caused by PFPC's own willful misfeasance, bad
faith, negligence or reckless disregard of its duties or obligations
under this Agreement.

11. Year 2000 Readiness Disclosure. PFPC (a) has reviewed its business and
operations as they relate to the services provided hereunder, (b) has
developed or is developing a program to remediate or replace computer
applications and systems, and (c) has developed a testing plan to test
the remediation or replacement of computer applications/systems, in
each case, to address on a timely basis the risk that certain computer
applications/systems used by PFPC may be unable to recognize and
perform properly date sensitive functions involving dates prior to,
including and after December 31, 1999, including dates such as February
29, 2000 (the "Year 2000 Challenge"). To the best of PFPC's knowledge
and belief, the reasonably foreseeable consequences of the Year 2000
Challenge will not adversely effect PFPC's ability to perform its
duties and obligations under this Agreement.

12. Compensation. As compensation for services rendered by PFPC during the
term of this Agreement, the Fund will pay to PFPC a fee or fees as may be
agreed to from time to time in writing by the Fund and PFPC.

13. Indemnification. The Fund agrees to indemnify and hold harmless PFPC
and its affiliates from all taxes, charges, expenses, assessments,
claims and liabilities (including, without limitation, liabilities
arising under the Securities Laws and any state and foreign securities
and blue sky laws, and amendments thereto), and expenses, including
(without limitation) attorneys' fees and disbursements, arising
directly or indirectly from (i) any action or omission to act which
PFPC takes (a) at the request or on the direction of or in reliance on
the advice of the Fund or (b) upon Oral Instructions or Written
Instructions or (ii) the acceptance, processing and/or negotiation of
checks or other methods utilized for the purchase of Shares. Neither
PFPC, nor any of its affiliates, shall be indemnified against any
liability (or any expenses incident to such liability) arising out of
PFPC's or its affiliates' own willful misfeasance, bad faith,
negligence or reckless disregard of its duties and obligations under
this Agreement, provided that in the absence of a finding to the
contrary the acceptance, processing and/or negotiation of a fraudulent
payment for the purchase of Shares shall be presumed not to have been
the result of PFPC=s or its affiliates own willful misfeasance, bad
faith, negligence or reckless disregard of such duties and obligations.

14. Responsibility of PFPC.
(a) PFPC shall be under no duty to take any action on behalf of the
Fund except as specifically set forth herein or as may be
specifically agreed to by PFPC in writing. PFPC shall be
obligated to exercise care and diligence in the performance of
its duties hereunder, to act in good faith and to use its best
efforts, within reasonable limits, in performing services
provided for under this Agreement. PFPC shall be liable for any
damages arising out of PFPC's failure to perform its duties under
this Agreement to the extent such damages arise out of PFPC's
willful misfeasance, bad faith, negligence or reckless disregard
of such duties.

(b) Without limiting the generality of the foregoing or of any other
provision of this Agreement, (i) PFPC, shall not be liable for
losses beyond its control, provided that PFPC has acted in
accordance with the standard of care set forth above; and (ii)
PFPC shall not be under any duty or obligation to inquire into
and shall not be liable for (A) the validity or invalidity or
authority or lack thereof of any Oral Instruction or Written
Instruction, notice or other instrument which conforms to the
applicable requirements of this Agreement, and which PFPC
reasonably believes to be genuine; or (B) subject to Sections 10
and 11, delays or errors or loss of data occurring by reason of
circumstances beyond PFPC's control, including acts of civil or
military authority, national emergencies, labor difficulties,
fire, flood, catastrophe, acts of God, insurrection, war, riots
or failure of the mails, transportation, communication or power
supply.

(c) Notwithstanding anything in this Agreement to the contrary, neither
PFPC nor its affiliates shall be liable to the Fund for any
consequential, special or indirect losses or damages which the Fund
may incur or suffer by or as a consequence of PFPC's or its
affiliates' performance of the services provided hereunder, whether
or not the likelihood of such losses or damages was known by PFPC or
its affiliates.

15. Description of Services.
(a) Services Provided on an Ongoing Basis, If
Applicable.

(i) Calculate 12b-1 payments;

(ii) Maintain proper shareholder registrations;

(iii) Review new applications and correspond with shareholders to
complete or correct information;

(iv) Direct payment processing of checks or wires;

(v) Prepare and certify stockholder lists in conjunction with
proxy solicitations;

(vi) Countersign share certificates;

(vii) Prepare and mail to shareholders confirmation of activity;

(viii)Provide toll-free lines for direct shareholder use, plus
customer liaison staff for on-line inquiry response;

(ix) Mail duplicate confirmations to broker-dealers of their
clients' activity, whether executed through the broker-dealer
or directly with PFPC;

(x) Provide periodic shareholder lists and statistics to the
clients;

(xi) Provide detailed data for underwriter/broker confirmations;

(xii) Prepare periodic mailing of year-end tax and statement
information;

(xiii)Notify on a timely basis the investment adviser, accounting
agent, and custodian of fund activity; and

(xiv) Perform other participating broker-dealer shareholder services
as may be agreed upon from time to time.

(b) Services Provided by PFPC Under Oral Instructions or Written
Instructions.

(i) Accept and post daily Fund purchases and redemptions;

(ii) Accept, post and perform shareholder transfers and
exchanges;

(iii) Pay dividends and other distributions;

(iv) Solicit and tabulate proxies; and

(v) Issue and cancel certificates (when requested in writing by
the shareholder).

(c) Purchase of Shares. PFPC shall issue and credit an account of an
investor, in the manner described in the Fund's prospectus, once it
receives: (i) A purchase order;

(ii) Proper information to establish a shareholder account; and

(iii) Confirmation of receipt or crediting of funds for such order
to the Fund's custodian.

(d) Redemption of Shares. PFPC shall redeem Shares only if that
function is properly authorized by the certificate of
incorporation or resolution of the Fund's Board of Trustees.
Shares shall be redeemed and payment therefor shall be made in
accordance with the Fund's prospectus, when the recordholder
tenders Shares in proper form and directs the method of
redemption. If Shares are received in proper form, Shares shall
be redeemed before the funds are provided to PFPC from the Fund's
custodian (the "Custodian"). If the recordholder has not
directed that redemption proceeds be wired, when the Custodian
provides PFPC with funds, the redemption check shall be sent to
and made payable to the recordholder, unless:

(i) the surrendered certificate is drawn to the order of an
assignee or holder and transfer authorization is signed by
the recordholder; or

(ii) Transfer authorizations are signed by the recordholder when
Shares are held in book-entry form.

When a broker-dealer notifies PFPC of a redemption desired by a
customer, and the Custodian provides PFPC with funds, PFPC shall
prepare and send the redemption check to the broker-dealer and made
payable to the broker-dealer on behalf of its customer.

(e) Dividends and Distributions. Upon receipt of a resolution of the
Fund's Board of Trustees authorizing the declaration and payment
of dividends and distributions, PFPC shall issue dividends and
distributions declared by the Fund in Shares, or, upon
shareholder election, pay such dividends and distributions in
cash, if provided for in the Fund's prospectus. Such issuance or
payment, as well as payments upon redemption as described above,
shall be made after deduction and payment of the required amount
of funds to be withheld in accordance with any applicable tax
laws or other laws, rules or regulations. PFPC shall mail to the
Fund's shareholders such tax forms and other information, or
permissible substitute notice, relating to dividends and
distributions paid by the Fund as are required to be filed and
mailed by applicable law, rule or regulation. PFPC shall prepare,
maintain and file with the IRS and other appropriate taxing
authorities reports relating to all dividends above a stipulated
amount paid by the Fund to its shareholders as required by tax or
other law, rule or regulation.

(f) Shareholder Account Services.
(i) PFPC may arrange, in accordance with the prospectus, for
issuance of Shares obtained through:

- Any pre-authorized check plan; and
- Direct purchases through broker wire orders, checks
and applications.

(ii) PFPC may arrange, in accordance with the prospectus, for a
shareholder's:

- Exchange of Shares for shares of another fund with
which the Fund has exchange privileges;
- Automatic redemption from an account where that
shareholder participates in a automatic redemption
plan; and/or
- Redemption of Shares from an account with a
checkwriting privilege.

(g) Communications to Shareholders. Upon timely Written Instructions,
PFPC shall mail all communications by the Fund to its shareholders,
including:

(i) Reports to shareholders;

(ii) Confirmations of purchases and sales of Fund shares;

(iii) Monthly or quarterly statements;

(iv) Dividend and distribution notices;

(v) Proxy material; and

(vi) Tax form information.

In addition, PFPC will receive and tabulate the proxy cards for the
meetings of the Fund's shareholders.

(h) Records. PFPC shall maintain records of the accounts for each
shareholder showing the following information:
(i) Name, address and United States Tax Identification or
Social Security number;

(ii) Number and class of Shares held and number and class of Shares
for which certificates, if any, have been issued, including
certificate numbers and denominations;

(iii) Historical information regarding the account of each
shareholder, including dividends and distributions paid and
the date and price for all transactions on a shareholder's
account;

(iv) Any stop or restraining order placed against a shareholder's
account;

(v) Any correspondence relating to the current maintenance of a
shareholder's account;

(vi) Information with respect to withholdings; and

(vii) Any information required in order for the transfer agent to
perform any calculations contemplated or required by this
Agreement.

(i) Lost or Stolen Certificates. PFPC shall place a stop notice against
any certificate reported to be lost or stolen and comply with all
applicable federal regulatory requirements for reporting such loss
or alleged misappropriation. A new certificate shall be registered
and issued only upon:

(i) The shareholder's pledge of a lost instrument bond or such
other appropriate indemnity bond issued by a surety company
approved by PFPC; and

(ii) Completion of a release and indemnification agreement signed
by the shareholder to protect PFPC and its affiliates.

(j) Shareholder Inspection of Stock Records. Upon a request from any
Fund shareholder to inspect stock records, PFPC will notify the Fund
and the Fund will issue instructions granting or denying each such
request. Unless PFPC has acted contrary to the Fund's instructions,
the Fund agrees and does hereby, release PFPC from any liability for
refusal of permission for a particular shareholder to inspect the
Fund's stock records.

(k) Withdrawal of Shares and Cancellation of Certificates. Upon receipt
of Written Instructions, PFPC shall cancel outstanding certificates
surrendered by the Fund to reduce the total amount of outstanding
shares by the number of shares surrendered by the Fund.

16. Duration and Termination. This Agreement shall continue until terminated
by the Fund or by PFPC on sixty (60) days' prior written notice to the
other party.

18. Notices. All notices and other communications, including Written
Instructions, shall be in writing or by confirming telegram, cable,
telex or facsimile sending device. Notices shall be addressed (a) if
to PFPC, at 400 Bellevue Parkway, Wilmington, Delaware 19809; (b) if to
the Fund, at , Attn: or (c)
if to neither of the foregoing, at such other address as shall have
been given by like notice to the sender of any such notice or other
communication by the other party. If notice is sent by confirming
telegram, cable, telex or facsimile sending device, it shall be deemed
to have been given immediately. If notice is sent by first-class mail,
it shall be deemed to have been given three days after it has been
mailed. If notice is sent by messenger, it shall be deemed to have
been given on the day it is delivered.

19. Amendments. This Agreement, or any term thereof, may be changed or waived
only by a written amendment, signed by the party against whom enforcement
of such change or waiver is sought.

20. Delegation; Assignment. PFPC may assign its rights and delegate its
duties hereunder to any majority-owned direct or indirect subsidiary of
PFPC or PNC Bank Corp., provided that (i) PFPC gives the Fund 30 days
prior written notice of such assignment or delegation, (ii) the
assignee or delegate agrees to comply with the relevant provision of
the 1940 Act, and (iii) PFPC and such assignee or delegate promptly
provide such information as the Fund may reasonably request, and
respond to such questions as the Fund may reasonably ask, relative to
the assignment or delegation (including, without limitation, the
capabilities of the assignee or delegate).

21. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

22. Further Actions. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.

23. Limitations of Liability of the Trustees and Shareholders. A copy of
the Declaration of Trust of the Fund is on file with
________________________, and notice is hereby given that this
instrument is executed on behalf of the Trustees of the Trust as
Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees or Shareholders
individually but are binding only upon the assets and property of the
Fund.

(c) Governing Law. This Agreement shall be deemed to be a contract made
in Delaware and governed by Delaware law, without regard to
principles of conflicts of law.

(e) Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.

(f) Facsimile Signatures. The facsimile signature of any party to this
Agreement shall constitute the valid and binding execution hereof by
such party.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.

PFPC INC.

By: /s/ Steven Turowski
Steven Turowski

Title: THE BERWYN FUNDS

By: /s/ Robert E. Killen
Robert E. Killen
Title: President

<PAGE>

EXHIBIT A

THIS EXHIBIT A, dated as of April 30, 1999, is Exhibit A to that certain
Transfer Agency Services Agreement dated as of April 30, 1999 between PFPC Inc.
and The Berwyn Funds.

PORTFOLIOS

The Berwyn Fund

The Berwyn Income Fund

<PAGE>
AUTHORIZED PERSONS APPENDIX

Name (Type) Signature

- ---------------------------------- ------------------------------

OPINION OF COUNSEL

I am counsel to The Berwyn Funds (the "Fund").
This letter is being submitted in connection with the
registration statement filed by the Fund with the U.S.
Securities and Exchange Commission to register the Fund
as an investment company and to register its shares
for sale to the public.

The Fund is a Delaware Business Trust that was organized
and registered on February 4, 1999. On that date the
Board of Trustees adopted an Agreement and Declaration
of Trust. Under the terms of the Agreement and
Declaration of Trust, the Fund has the authority,
among other things, to issue an unlimited number of
shares that represent a beneficial interest in the
Fund. The Board of Trustees may also authorize the
division of the Fund's shares into separate serials.

On February 4, 1999, the Board of
Trustees authorized, in accordance
with Article 111, Sections 1 and 6 of the
Agreement and Declaration of Trust, that
two series of shares of beneficial interest
be established and designated as follows,
with an unlimited number of shares allocated to each series:

1. Berwyn Fund series; and
2. Berwyn Income Fund series.

The Board of Trustees further determined that
each share of a series of the Fund shall represent
a proportionate interest in and have equal rights
with each other share of that series with respect
to the assets of the Fund pertaining to that series.
Such shares shall have the same preferences,
conversion or other rights, voting powers,
restrictions, limitations as to dividends,
qualifications, or terms or conditions of
redemption, as set forth in the Declaration.

Based upon the foregoing it is my opinion
that the shares of the Fund, when offered
to the public will be legally issued, fully paid and non-assessable.

Kevin M. Ryan
Kevin M. Ryan
Counsel to The Berwyn Funds

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by
reference in the Prospectuses and Statements
of Additional Information constituting
parts of this Post-Effective Amendment No. 15
to the registration statement on Form N-1A
(the "Registration Statement') of our
reports dated February 12, 1999, relating
to the financial statements and financial
highlights appearing in the December 31,
1998 Annual Reports to Shareholders of The
Berwyn Fund, Inc. and Berwyn Income Fund,
Inc. (Subsequently reorganized as Berwyn Fund and

PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Philadelphia, PA
also consent to the references to us
under the headings "Financial Statements"
and "General Information - Independent
Accountants" in the Statements of Additional Information.

PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Philadelphia, PA
April 19, 1999