PROFESSIONALLY MANAGED PORTFOLIOS, 485BPOS, 1996-07-30

PROFESSIONALLY MANAGED PORTFOLIOS
485BPOS, 1996-07-30

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Securities Act File No. 33-12213
Investment Company Act File No. 811-5037

SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Pre-Effective Amendment No.

Post-Effective Amendment No. 31 |X|

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

Amendment No. 32 |X|

(Check appropriate box or boxes)

PROFESSIONALLY MANAGED PORTFOLIOS
(Exact Name of Registrant as Specified in Charter)

479 West 22nd Street
New York, NY 10011
(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, including Area Code:
(212) 633-9700

Steven J. Paggioli
Professionally Managed Portfolios
479 West 22nd Street
New York, NY 10011

(Name and Address of Agent for Service)

Copy to: Julie Allecta, Esq.
Heller, Ehrman, White & McAuliffe
333 Bush Street
San Francisco, CA, 94104
-----------------------------------------------------------------
It is proposed that this filing will become effective:

|_| Immediately upon filing pursuant to paragraph (b)

|X| On July 31, 1996 pursuant to paragraph (b)

60 days after filing pursuant to paragraph (a)(1)

__ On pursuant to paragraph (a)(1)

75 days after filing pursuant to paragraph (a)(2)

__ On 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.
- --------------------------------------------------------------
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, Registrant has
elected to register an indefinite number of shares of beneficial interest, no
par value. The most recent notice required by Rule 24f-2 was filed on May 30,
1996.

<PAGE>

CROSS REFERENCE SHEET
(as required by Rule 495)

N-1A Item No. Location

Part A

Item 1. Cover Page........................... Cover Page
Item 2. Synopsis............................. Expense
Table

Item 3. Financial Highlights................. N/A

Item 4. General Description of Registrant.... Investment
Objective,
Policies and
Risks;

Item 5. Management of the Fund............... Management
of the Fund

Item 5A Management's Discussion of Fund See Annual
Performance Reports to
Shareholders

Item 6. Capital Stock and Other Securities. . . Distributions
and Taxes;
How the
Fund's Per
Share Value
is Determined

Item 7. Purchase of Securities Being Offered . . How to Invest
in the Fund;
How the
Fund's Per
Share Value
is Determined

Item 8. Redemption or Repurchase. . . . . . . . How to Redeem
an Investment
in the Fund

Item 9. Pending Legal Proceedings . . . . . . . N/A

Part B

Item 10. Cover Page ............................. Cover Page

<PAGE>

Item 11. Table of Contents....................... Table of
Contents

Item 12. General Information and History . . . . The Trust;
General
Information

Item 13 Investment Objectives and Policies .... Investment
Objective and
Policies;
Investment
Restrictions;

Item 14. Management of the Fund................... Management

Item 15. Control Persons and Principal Holders
of Securities............................ Management

Item 16. Investment Advisory and Other Services.... Management

Item 17. Brokerage Allocation...................... Execution of
Portfolio
Transactions

Item 18. Capital Stock and Other Securities........ General
Information

Item 19. Purchase, Redemption and Pricing of
Shares Being Offered.............. Additional
Purchase &
Redemption
Information

Item 20. Tax Status.............................. Distributions
& Tax Infor-
mation

Item 21. Underwriters............................ The Fund's
Distributor

Item 22. Performance Information.................. Performance
Information

Item 23. Financial Statements.................... N/A

Part C

Information required to be included in Part C is set forth under the appropriate
Item, so numbered, in Part C to this Registration Statement

<PAGE>

THE PERKINS OPPORTUNITY FUND
730 East Lake Street
Wayzata, Minnesota 55391-1769
(612) 473-8367
(888) PERKOPP

THE PERKINS OPPORTUNITY FUND (the "Fund") is a mutual fund with the
investment objective of capital appreciation. The Fund seeks to achieve its
objective by investing principally in common stocks. Perkins Capital Management,
Inc. (the "Advisor"), serves as investment advisor to the Fund. The Fund is not
a complete investment program. Stocks in which the Fund invests and the Fund's
net asset value may be volatile. See "Investment Objectives, Policies and
Risks", at page 4. The Fund may not be appropriate for short-term investors.

This Prospectus sets forth basic information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. The Fund is a series of Professionally Managed
Portfolios. A Statement of Additional Information dated August 1, 1996 and as
may be amended from time to time, has been filed with the Securities and
Exchange Commission and is incorporated herein by reference. This Statement of
Additional Information is available without charge upon request to the Fund at
the address or telephone number given above.

TABLE OF CONTENTS

Expense Table.................................................... 2
Financial Highlights............................................. 3
Investment Objectives, Policies and Risks........................ 4
Management of the Fund........................................... 7
How To Invest in the Fund........................................ 8
How To Redeem an Investment in the Fund.......................... 10
Services Available to the Fund's Shareholders.................... 12
How the Fund's Per Share Value Is Determined..................... 13
Distribution and Taxes........................................... 13
General Information.............................................. 14

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

Prospectus dated August 1, 1996
<PAGE>
EXPENSE TABLE

<TABLE>
<CAPTION>
Shareholder Transaction Expenses
<S> <C>
Maximum Sales Load Imposed on Purchases (as a percentage of offering price)................ 4.75%
Maximum Sales Load Imposed on Reinvested Dividends......................................... None
Deferred Sales Load........................................................................ None
Redemption Fees............................................................................ None

Annual Fund Operating Expenses
(As a percentage of average net assets)

Investment Advisory Fees................................................................... 1.00%
12b-1 Fees................................................................................. 0.20%
Shareholder Service Fee.................................................................... 0.25%
Other Expenses............................................................................. 0.52%
----
Total Fund Operating Expenses.............................................................. 1.97%
====
</TABLE>

Example 1 Year 3 Years 5 Years 10 Years

The Example shown above should not be considered a representation of past
or future expenses and actual expenses may be greater or less than those shown.
In addition, federal regulations require the example to assume a 5% annual
return, but the Fund's actual return may be higher or lower. See "Management of
the Fund."

The PERKINS OPPORTUNITY FUND (the "Fund") is a diversified series of
Professionally Managed Portfolios (the "Trust"), an open-end registered
management investment company offering redeemable shares of beneficial interest.
Shares may be purchased at a public offering price which includes a maximum
sales charge of 4.75% of the offering price, or less depending on the amount
invested. The minimum initial investment is $2,500, with subsequent minimum
investments of $100 or more ($1,000 and $100, respectively, for retirement
plans). The Fund has adopted a plan of distribution under which the Fund will
pay the Distributor a fee at an annual rate of up to a maximum of 0.25% of the
Fund's net assets. A long-term shareholder may pay more, directly and
indirectly, in sales charges and such fees than the maximum sales charge
permitted under the rules of the National Association of Securities Dealers.
Shares will be redeemed at net asset value per share.
2
<PAGE>
FINANCIAL HIGHLIGHTS

For a share outstanding throughout each period*.

The following information has been audited by Tait, Weller & Baker,
independent accountants, whose unqualified report covering the periods indicated
below is incorporated by reference herein and appears in the annual report to
shareholders. This information should be read in conjunction with the financial
statements and accompanying notes which appear in the annual report to
shareholders and are incorporated by reference into the Statement of Additional
Information. Further information about the Fund's performance is contained in
its annual report, which may be obtained without charge by writing or calling
the address or telephone of the Investment Advisor on the Prospectus cover page.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Year Year Year February 18, 1993**
Ended Ended Ended through
March 31, March 31, March 31, March 31,
1996 1995 1994 1993
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ........................... $13.03 $10.37 $ 7.96 $ 7.50
Income from investment operations:
Net investment loss ...................................... (.12) (.13) (.13) (.01)
------ ------ ------ ------
Net realized and unrealized gain on investments........... 6.66 3.79 2.70 .47
------ ------ ------ ------
Total from investment operations................................ 6.54 3.66 2.57 .46
Less distributions:
Dividends from net investment income...................... -0- -0- -0- -0-
Distributions from net capital gains ..................... (.79) (1.00) (.16) -0-
------ ------ ------ ------
Total distributions............................................. (.79) (1.00) (.16) -0-
------ ------ ------ ------
Net asset value, end of period ................................. $18.78 $13.03 $10.37 $ 7.96
====== ====== ====== ======
Total return ................................................... 51.29% 38.72% 32.22% 28.37%+
Ratios/supplemental data:
Net assets, end of period (millions)............................ $ 92.3 $ 12.5 $ 3.3 $ 1.0
Ratio of expenses to average net assets:
Before expense reimbursement ............................. 1.97% 3.08% 5.14% 13.15%+
After expense reimbursement............................... 1.97% 2.63% 2.49% 2.42%+
Ratio of net investment (loss) income to average net assets:
Before expense reimbursement ............................. (1.16%) (2.76%) (4.93%) (12.38%)+
After expense reimbursement .............................. (1.16%) (2.31%) (2.28%) (1.65%)+
Portfolio turnover rate ........................................ 92.45% 124.86% 90.63% 15.15%
</TABLE>

*Per share value reflects 2-for-1 stock split.

**Commencement of operations.

+Annualized.
3
<PAGE>
INVESTMENT OBJECTIVES, POLICIES AND RISKS

The investment objective of the Fund is capital appreciation. The primary
approach of the Fund is to purchase common stocks of companies which the Advisor
believes to be attractive investments with capital appreciation potential on an
individual issuer basis. There is, of course, no assurance that the Fund's
objective will be achieved. Because prices of common stocks and other securities
fluctuate, the value of an investment in the Fund will vary, as the market value
of its investment portfolio changes. The Fund is diversified, which under
applicable federal law means that as to 75% of its total assets, no more than 5%
may be invested in the securities of a single issuer and that no more than 10%
of its total assets may be invested in the voting securities of such issuer. The
Fund may make use of investment techniques which involve higher than average
risk, such as leveraging and short sales. See pages 5-6.

Investment Approach. The Advisor's approach to equity investments is to
seek opportunities for growth by investing in companies which it believes will
appreciate in value. The Advisor seeks to find investment opportunities
primarily by searching for companies which it believes are in the process of
undergoing some type of fundamental change. Stocks are purchased when it is
believed that change will result in higher earnings and/or a higher
price/earnings ratio, and thus a higher share price when that change is
discovered by others. Companies undergoing change may have new products,
processes, strategies, management, or may be subjected to change by external
forces. Typically, this results in the Fund's ownership of a mix of companies
with large, medium and small market capitalizations, although the greatest
opportunities are often found in small to medium capitalization companies, often
located in the upper midwest states. In its investment selection process, the
Advisor visits companies, reads a variety of reports and publications and
utilizes computer programs to derive fundamental selection criteria. The Advisor
also uses technical chart analysis as an aid in selecting those companies which
appear to offer the best investment opportunities at a particular time, and as
an aid in selecting what the Advisor believes to be the best purchase or sale
point for a particular security.

The Fund invests principally in common stocks. The Fund's investments may
also include preferred stocks, warrants, convertible debt obligations and other
debt obligations that, in the Advisor's opinion, offer the possibility of
capital growth.

During those times when equity securities that meet the Advisor's
investment criteria cannot be found, for temporary defensive purposes or pending
longer-term investment, the Fund may invest any amount of its assets in
short-term money market instruments, including securities issued by the U.S.
Government, its agencies and instrumentalities or other such instruments rated
in the top two rating categories by Moody's Investors Service or Standard &
Poor's Corporation or, if unrated, in instruments deemed to be of comparable
quality by the Fund's Advisor.

Smaller and Newer Companies. Many of the companies held by the Fund may be
smaller and younger than companies whose shares are traded on the major stock
exchanges. Accordingly, shares of these companies, which typically trade
over-the-counter, may be more volatile than those of larger exchange-listed
companies. New or improved products or methods of development may have a
substantial impact on the earnings and revenues of such companies, and any such
positive and negative developments could have a corresponding positive or
negative effect on the value of their shares. Many of these companies are thinly
traded. In addition, the Fund and other client accounts of the Advisor, on a
collective basis, may hold a significant percentage of a company's outstanding
shares. For these reasons, when the Fund holds a substantial position in these
types of companies, the net asset value of the Fund may be more volatile. The
Fund may not be appropriate for short-term investors.
4
<PAGE>
Repurchase Agreements. The Fund may enter into repurchase agreements in
order to earn additional income on available cash, or as a defensive investment
in periods when the Fund is primarily invested in instruments with short-term
maturities. A repurchase agreement is a short-term investment in which the
purchaser (i.e., the Fund) acquires ownership of a U.S. Government security
(which may be of any maturity) and the seller agrees to repurchase the
obligation at a future time at a set price, thereby determining the yield during
the purchaser's holding period (usually not more than seven days from the date
of purchase). Any repurchase transaction in which the Fund engages will require
full collateralization of the seller's obligation during the entire term of the
repurchase agreement. In the event of a bankruptcy or other default of the
seller, the Fund could experience both delays in liquidating the underlying
security and losses in value. However, the Fund intends to enter into repurchase
agreements only with banks with assets of $500 million or more that have
deposits insured by the Federal Deposit Insurance Corporation and are deemed to
be the most creditworthy registered U.S. Government securities dealers pursuant
to procedures adopted and regularly reviewed by the Trust's Board of Trustees.
Creditworthiness of the banks and securities dealers with whom the Fund engages
in repurchase transactions is monitored under procedures adopted by the Board of
Trustees. The Fund will not invest more than 15% of its net assets in illiquid
securities, including repurchase agreements maturing in more than seven days.

Illiquid and Restricted Securities. The Fund may not invest more than 15%
of its net assets in illiquid securities, including (i) securities for which
there is no readily available market; (ii) securities the disposition of which
would be subject to legal restrictions (so-called "restricted securities"); and
(iii) repurchase agreements having more than seven days to maturity. A
considerable period of time may elapse between the Fund's decision to dispose of
such securities and the time when the Fund is able to dispose of them, during
which time the value of the securities could decline. Securities which meet the
requirements of Securities Act Rule 144A are restricted, but may be determined
to be liquid by the Trustees based on an evaluation of the applicable trading
markets.

Foreign Securities. The Fund may invest up to 10% of its total assets in
U.S. dollar-denominated securities of foreign issuers, including American
Depositary Receipts with respect to securities of foreign issuers. There may be
less publicly available information about these issuers than is available about
companies in the U.S. and foreign auditing requirements may not be comparable to
those in the U.S. In addition, the value of the foreign securities may be
adversely affected by movements in the exchange rates between foreign currencies
and the U.S. dollar, as well as other political and economic developments,
including the possibility of expropriation, confiscatory taxation, exchange
controls or other foreign governmental restrictions. The Fund may also invest
without limit in securities of foreign issuers which are listed and traded on a
domestic national securities exchange.

Short Sales. The Fund may engage in short sales of securities. In a short
sale, the Fund sells stock which it does not own, making delivery with
securities "borrowed" from a broker. The Fund is then obligated to replace the
security borrowed by purchasing it at the market price at the time of
replacement. This price may or may not be less than the price at which the
security was sold by the Fund. Until the security is replaced, the Fund is
required to pay to the lender any dividends or interest which accrue during the
period of the loan. In order to borrow the security, the Fund may also have to
pay a premium which would increase the cost of the security sold. The proceeds
of the short sale will be retained by the broker to the extent necessary to meet
margin requirements, until the short position is closed out.

The Fund also must segregate an account consisting of liquid assets equal
to the difference between (a) the market value of the securities sold short at
the time they were sold short and (b) the value of the collateral deposited with
the broker in connection with the short sale (not including the proceeds from
the short sale). While the short position is open, the Fund must maintain daily
the segregated account at such a level that (1) the amount deposited in it plus
the
5
<PAGE>
amount deposited with the broker as collateral equals the current market value
of the securities sold short and (2) the amount deposited in it plus the amount
deposited with the broker as collateral is not less than the market value of the
securities at the time they were sold short.

The Fund will incur a loss as a result of the short sale if the price of
the security increases between the date of the short sale and date on which the
Fund replaces the borrowed security. The Fund will realize a gain if the
security declines in price between those dates. The amount of any gain will be
decreased and the amount of any loss will be increased by any interest the Fund
may be required to pay in connection with a short sale.

The dollar amount of short sales at any one time (not including short sales
against the box) may not exceed 25% of the net equity of the Fund and the value
of securities of any one issuer in which the Fund is short may not exceed the
lesser of 2% of the value of the Fund's net assets or 2% of the securities of
any class of any issuer. It is expected that normally the dollar amount of such
sales will not exceed 10% of the net equity of the Fund.

A short sale is "against-the-box" if at all times when the short position
is open the Fund owns an equal amount of the securities or securities
convertible into, or exchangeable without further consideration for, securities
of the same issue as the securities sold short. Such a transaction serves to
defer a gain or loss for federal income tax purposes.

Leverage Through Borrowing. The Fund may borrow for investment purposes.
This borrowing, which is known as leveraging, generally will be unsecured,
except to the extent the Fund enters into reverse repurchase agreements
described below. The Investment Company Act of 1940 (the "1940 Act") requires
the Fund to maintain continuous asset coverage (that is, total assets including
borrowings, less liabilities exclusive of borrowings) of 300% of the amount
borrowed. If the 300% asset coverage should decline as a result of market
fluctuations or other reasons, the Fund may be required to sell some of its
portfolio holdings within three days to reduce the debt and restore the 300%
asset coverage, even though it may be disadvantageous from an investment
standpoint to sell securities at that time. Leveraging may exaggerate the effect
on the net asset value of any increase or decrease in the market value of the
Fund's portfolio. Money borrowed for leveraging will be subject to interest
costs which may or may not be recovered by appreciation of the securities
purchased. The Fund also may be required to maintain minimum average balances in
connection with such borrowing or to pay a commitment or other fee to maintain a
line of credit; either of these requirements would increase the cost of
borrowing over the stated interest rate.

Options Transactions. The Fund may buy call and put options on individual
equity securities and write covered call and put options, and engage in related
closing transactions. A call option gives the purchaser of the option the right
to buy, and obligates the writer to sell, the underlying security at the
exercise price at any time during the option period. Conversely, a put option
gives the purchaser of the option the right to sell, and obligates the writer to
buy, the underlying security at the exercise price at any time during the option
period. A covered call option sold by the Fund, which is a call option with
respect to which the Fund owns the underlying security, exposes the Fund during
the term of the option to possible loss of opportunity to realize appreciation
in the market price of the underlying security or to possible continued holding
of a security which might otherwise have been sold to protect against
depreciation in the market price of the security. A covered put option sold by
the Fund exposes the Fund during the term of the option to a decline in the
price of the underlying security. A put option sold by the Fund is covered when,
among other things, liquid assets are placed in a segregated account with the
Fund's custodian to fulfill the obligation undertaken.

To close out a position when writing covered options, the Fund may make a
"closing purchase transaction," which involves purchasing an option on the same
security with the same exercise price and expiration date as the option which it
has previously written on the security. To close out a position as a purchaser
of an option, the Fund may make a "closing sale transaction," which involves
liquidating the Fund's position by selling the option previously
6
<PAGE>
purchased. The Fund will realize a profit or loss from a closing purchase or
sale transaction depending upon the difference between the amount paid to
purchase an option and the amount received from the sale thereof. See the
Statement of Additional Information.

Portfolio Turnover. The annual rate of portfolio turnover is not normally
expected to exceed 100%. In general, the Advisor will not consider the rate of
portfolio turnover to be a normally limiting factor in determining when or
whether to purchase or sell securities in order to achieve the Fund's objective.

The Fund has adopted certain investment restrictions, which are described
fully in the Statement of Additional Information. Like the Fund's investment
objective, certain of these restrictions are fundamental and may be changed only
by the vote of a majority of the Fund's outstanding securities (as defined in
the 1940 Act).

MANAGEMENT OF THE FUND

The Board of Trustees of the Trust establishes the Fund's policies and
supervises and reviews the management of the Fund. Perkins Capital Management,
Inc., 730 East Lake Street, Wayzata, MN 55391-1769, the Fund's Advisor, has been
in the investment advisory business since 1984. The Advisor provides investment
advisory services to individual and institutional accounts with a value in
excess of $350 million. The Fund's portfolio will typically contain many of the
same stocks that are owned by the Advisor's other accounts. However, investment
decisions for the Fund are made independently of investment decisions for the
Advisor's other accounts and reflect certain restrictions that apply to the
Fund. Mr. Richard W. Perkins and Mr. Daniel S. Perkins are principally
responsible for the management of the Fund's portfolio.

Under an Advisory Agreement, the Advisor provides the Fund with advice on
buying and selling securities, manages the investments of the Fund, furnishes
the Fund with office space and certain administrative services, and provides
most of the personnel needed by the Fund. As compensation, the Fund pays the
Advisor a monthly management fee (accrued daily) based upon the average daily
net assets of the Fund at the rate of 1.00% annually.

Under an Administrative Agreement, Investment Company Administration
Corporation (the "Administrator") prepares various federal and state regulatory
filings, reports and returns for the Fund, prepares reports and materials to be
supplied to the Trustees, monitors the activities of the Fund's custodian,
transfer agent and accountants, and coordinates the preparation and payment of
Fund expenses and reviews the Fund's expense accruals. For its services, the
Administrator receives an annual fee based on the following table:

Assets Fee As a Percentage of Net Assets
------ ---------------------------------
Less than $12,000,000....................... $30,000
$12,000,000 - $50,000,000................... .25%
$50,000,000 - $100,000,000.................. .20%
$100,000,000 - $200,000,000................. .15%
$200,000,000 - And Above.................... .10%

The Fund pays a monthly shareholder service fee at the annual rate of 0.25
of 1% of its average daily net assets to the Distributor, selected
broker-dealers and other agents for providing certain ongoing services to
shareholders.

The Fund is responsible for its own operating expenses. The Advisor has
agreed to reduce its fees or reimburse the Fund for its annual operating
expenses which exceed the most stringent limits prescribed by any state in which
the Fund's shares are offered for sale. The Advisor also may reimburse
additional amounts to the Fund at any time in order to reduce the Fund's
expenses, or to the extent required by applicable securities laws. To the extent
the Advisor performs a service for which the Fund is obligated to pay, the Fund
shall reimburse the Advisor for its costs incurred in rendering
7
<PAGE>
such service.

HOW TO INVEST IN THE FUND

The minimum initial investment is $2,500. Subsequent investments must be at
least $100. Investments in retirement plans may be for minimums of $1,000 and
$100, respectively. First Fund Distributors, Inc., acts as Distributor of the
Fund's shares. The Distributor may, at its discretion, waive the minimum
investment requirements for purchases in conjunction with certain group or
periodic plans. Shares of the Fund are offered continuously for purchase at the
public offering price next determined after a purchase order is received. The
public offering price is effective for orders received by the Fund or investment
dealers prior to the time of the next determination of the Fund's net asset
value and, in the case of orders placed with dealers, transmitted properly to
the Transfer Agent. Orders received after the time of the next determination of
the applicable Fund's net asset value will be entered at the next calculated
public offering price.

The public offering price per share is equal to the net asset value per
share, plus a sales charge, which is reduced on purchases involving amounts of
$50,000 or more, as set forth in the table below. The reduced sales charges
apply to quantity purchases made at one time by a "person," which means (i) an
individual, (ii) members of a family (i.e., an individual, spouse and children
under age 21), or (iii) a trustee or fiduciary of a single trust estate or a
single fiduciary account. In addition, purchases of shares made during a
thirteen month period pursuant to a written Letter of Intent are eligible for a
reduced sales charge. Reduced sales charges are also applicable to subsequent
purchases by a "person," based on the aggregate of the amount being purchased
and the value, at offering price, of shares owned at the time of investment.
<TABLE>
<CAPTION>
Sales Charge as percent of: Portion of sales
offering net asset charge retained
Amount of Purchase price value by dealers
- ------------------ ----- ----- ----------
<S> <C> <C> <C>
Less than $50,000............................. 4.75% 4.99% 4.50%
$50,000 but less than $100,000................ 4.00% 4.17% 3.75%
$100,000 but less than $250,000............... 3.00% 3.09% 2.80%
$250,000 but less than $500,000............... 2.00% 2.04% 1.85%
$500,000 but less than $1,000,000............. 1.00% 1.01% 0.90%
$1,000,000 or more............................ None None None
</TABLE>

Purchase Order Placed with Investment Dealers

Dealers who have a sales agreement with the Distributor may place orders
for shares of the Fund on behalf of clients at the offering price next
determined after receipt of the client's order by calling Rodney Square
Management Corporation, the Transfer Agent, at (800) 280-4779. Shares are also
available for purchase by financial intermediaries through brokers or dealers
which have service or sales agreements with the Fund or the Distributor. The
Distributor or
8
<PAGE>
its affiliates, at their expense, may provide additional compensation to dealers
in connection with sales of shares of the Fund. If the order is placed by 4:00
p.m. New York City time on any day that the New York Stock Exchange is open for
trading and forwarded promptly to the Transfer Agent or other service agent, it
will be confirmed at the applicable offering price on that day. The dealer is
responsible for placing order promptly with the Transfer Agent and for
forwarding payment within five business days.

Purchase sent to the Transfer Agent

Investors may purchase shares by sending an Application Form directly to
the Transfer Agent, with payment made either by check or by wire.

By check. For initial investments, an investor should complete the Fund's
Account Application (included with this Prospectus). The completed Application,
together with a check payable to "Perkins Opportunity Fund" should be mailed to
the Fund's Transfer Agent: Rodney Square Management Corporation, P.O. Box 8987,
Wilmington, DE 19899-9752. A purchase order sent by overnight mail should be
sent to Perkins Opportunity Fund, c/o Rodney Square Management, 1105 North
Market Street, 3rd Floor, Wilmington, DE 19890.

For subsequent investments, a stub is attached to the account statement
sent to shareholders after each transaction. The stub should be detached from
the statement and, together with a check payable to "Perkins Opportunity Fund,"
mailed to the Transfer Agent in the envelope provided at the address indicated
above. The investor's account number should be written on the check.

By wire. For initial investments, before wiring funds, an investor should
call the Transfer Agent at (800) 280-4779 between the hours of 9:00 a.m. and
4:00 p.m. Eastern time, on a day when the New York Stock Exchange is open for
trading in order to receive an account number. The Transfer Agent will request
the investor's name, address, tax identification number, amount being wired and
wiring bank. The investor should then instruct the wiring bank to transfer funds
by wire to: Wilmington Trust Company, Wilmington, DE, ABA #0311-0009-2. DDA
#2689-8641, for credit to Perkins Opportunity Fund, for further credit to
[investor's name and account number]. The investor should also ensure that the
wiring bank includes the name of the Fund and the account number with the wire.
If the funds are received by the Transfer Agent prior to the time that the
Fund's net asset value is calculated, the funds will be invested on that day;
otherwise they will be invested on the next business day. Finally, the investor
should write the account number provided by the Transfer Agent on the
Application Form and mail the Form promptly to the Transfer Agent.

For all wire investments, the investor must call the Transfer Agent at
(800) 280-4779 when the wire is sent. Failure to do so may cause the purchase
not to be credited. Investors may obtain further information from the Transfer
Agent about remitting funds in this manner and from their own banks about any
fees that may be imposed.

Purchase at Net Asset Value

Shares of the Fund may be purchased at net asset value by officers,
Trustees, directors and full time employees of the Trust, the Advisor, the
Manager, the Distributor and affiliates of such companies, by their family
members, by persons and their family members who are direct investment advisory
clients of the Advisor, registered representatives and employees of firms which
have sales agreements with the Distributor, investment advisors, financial
planners or other intermediaries who place trades for their own accounts or the
accounts of their clients and who charge a management, consulting or other fee
for their services; clients of such investment advisors, financial planners or
other intermediaries who place trades for their own accounts if the accounts are
linked to the master account of such investment advisor, financial planner or
other intermediaries on the books and records of the broker or agent; and
retirement and deferred compensation plans and trusts used to fund those plans,
including, but not limited to, those
9
<PAGE>
defined in Section 401(a), 403(b) or 457 of the Internal Revenue Code and "rabbi
trusts" and by such other persons who are determined to have acquired shares
under circumstances not involving any sales expense to the Fund or Distributor.
Investors may be charged a fee if they effect transactions in fund shares
through a broker or agent.

Investors may purchase shares of the Fund at net asset value to the extent
that the investment represents the proceeds from the redemption, within the
previous sixty days, of shares (the purchase price of which included a sales
charge) of another mutual fund. When making a purchase at net asset value
pursuant to this provision, the investor should forward to the Transfer Agent
either (i) the redemption check representing the proceeds of the shares
redeemed, endorsed to the order of Perkins Opportunity Fund, or (ii) a copy of
the confirmation from the other fund, showing the redemption transaction.

General

Payment of proceeds from redemption of shares purchased with an initial
investment made by wire may be delayed until one business day after the
completed Account Application is received by the Fund. All investments must be
made in U.S. dollars and, to avoid fees and delays, checks should be drawn only
on U.S. banks and should not be made by third party check. A charge may be
imposed if any check used for investment does not clear. The Fund and the
Distributor reserve the right to reject any purchase order in whole or in part.

If an order, together with payment in proper form, is received by the
Transfer Agent by the close of trading on the New York Stock Exchange (currently
4:00 p.m., New York City time), Fund shares will be purchased at the offering
price determined as of the close of trading on that day. Otherwise, Fund shares
will be purchased at the offering price determined as of the close of trading on
the New York Stock Exchange on the next business day.

The Fund is not required to issue share certificates. All shares are
normally held in non-certificated form registered on the books of the Fund and
the Fund's Transfer Agent for the account of the shareholder.

HOW TO REDEEM AN INVESTMENT IN THE FUND

A shareholder has the right to have the Fund redeem all or any portion of
his outstanding shares at their current net asset value on each day the New York
Stock Exchange is open for trading. The redemption price is the net asset value
per share next determined after the shares are validly tendered for redemption.

Direct Redemption

A written request for redemption must be received by the Fund's Transfer
Agent in order to constitute a valid tender for redemption. Redemption requests
should (a) state the number of shares to be redeemed, (b) identify the
shareholder's account number and (c) be signed by each registered owner exactly
as recorded on the account registration. To protect the Fund and its
shareholders, a signature guarantee is required for certain transactions,
including redemptions. Signature(s) on the redemption request must be guaranteed
by an "eligible guarantor institution" as defined in the federal securities
laws; these institutions include banks, broker-dealers, credit unions and
savings institutions. A broker-dealer guaranteeing signatures must be a member
of a clearing corporation or maintain net capital of at least $100,000. Credit
unions must be authorized to issue signature guarantees. Signature guarantees
will be accepted from any eligible guarantor institution which participates in a
signature guarantee program. A notary public is not an acceptable guarantor.
10
<PAGE>
Telephone Redemption

Shareholders who complete the Redemption by Telephone portion of the Fund's
Account Application may redeem shares on any business day the New York Stock
Exchange is open by calling the Fund's Transfer Agent at (800) 280-4779 before
4:00 p.m. Eastern time. Redemption proceeds will be mailed or wired at the
shareholder's direction the next business day to the predesignated account. The
minimum amount that may be wired is $1,000 (wire charges, if any, will be
deducted from redemption proceeds).

By establishing telephone redemption privileges, a shareholder authorizes
the Fund and its Transfer Agent to act upon the instruction of any person by
telephone to redeem from the account for which such service has been authorized
and transfer the proceeds to the bank account designated in the Authorization.
The Fund and the Transfer Agent will use procedures to confirm that redemption
instructions received by telephone are genuine, including recording of telephone
instructions and requiring a form of personal identification before acting on
such instructions. If these normal identification procedures are not followed,
the Fund or its agents could be liable for any loss, liability or cost which
results from acting upon instructions of a person believed to be a shareholder
with respect to the telephone redemption privilege. The Fund may change, modify,
or terminate these privileges at any time upon at least 60 days' notice to
shareholders.

General

Payment of the redemption proceeds will be made promptly, but not later
than seven days after the receipt of all documents in proper form, including a
written redemption order with the appropriate signature guarantee. The Fund may
suspend the right of redemption under certain extraordinary circumstances in
accordance with the rules of the Securities and Exchange Commission. In the case
of shares purchased by check and redeemed shortly after purchase, the Fund will
not mail redemption proceeds until it has been notified that the check used for
the purchase has been collected, which may take up to 15 days from the purchase
date. To minimize or avoid such delay, investors may purchase shares by
certified check or federal funds wire. A redemption may result in recognition of
a gain or loss for federal income tax purposes.

Due to the relatively high cost of maintaining smaller accounts, the Fund
reserves the right to redeem shares in any account, other than retirement plan
or Uniform Gift to Minors Act accounts, if at any time, due to redemptions by
the shareholder, the total value of a shareholder's account does not equal at
least $1,500. If the Fund determines to make such an involuntary redemption, the
shareholder will first be notified that the value of the account is less than
$1,500 and will be allowed 30 days to make an additional investment to bring the
value of the account to at least $1,500 before the Fund takes any action.

Distribution Agreement

The Distributor is the principal underwriter and distributor of shares of
the Fund and is an affiliate of the Administrator. The Distributor makes a
continuous offering of the Fund's shares and bears the costs and expenses of
printing and distributing to selected dealers and prospective investors any
copies of any prospectuses, Statements of Additional Information and annual and
interim reports of the Fund other than to existing shareholders (after such
11
<PAGE>
items have been prepared and set in type by the Fund) which are used in
connection with the offering of shares, and the costs and expenses of preparing,
printing and distributing any other literature used by the Distributor or
furnished by it for use by selected dealers in connection with the offering of
the shares for sale to the public. All or a part of the expenses borne by the
Distributor may be reimbursed pursuant to the Distribution Plan.

Distribution Plan; Shareholder Service Plan

The Fund has adopted a Distribution Plan pursuant to Rule 12b-1 under the
1940 Act (the "Plan") under which the Fund pays the Distributor an amount which
is accrued daily and paid monthly, at an annual rate of up to 0.25% of the
average daily net assets of the Fund. Amounts paid under the Plan by the Fund
are paid to the Distributor to reimburse it for costs of the services it
provides and the expenses it bears in the distribution of the Fund's shares,
including overhead and telephone selling; printing and distribution of
prospectuses and reports used in connection with the offering of the Fund's
shares to prospective investors; and preparation, printing and distribution of
sales literature and advertising materials. Such fee is paid to the Distributor
each year only to the extent of such costs and expenses of the Distributor under
the Plan actually incurred in that year, up to 0.25% (currently 0.20%) of the
average daily net assets of the Fund for that year.

In addition, the Fund has entered into a Shareholder Servicing Agreement
with the Distributor, under which the Fund pays servicing fees at an annual rate
of up to 0.25% of 1% of the Fund's average daily net assets. Payments to the
Distributor under the Shareholder Servicing Agreement may reimburse the
Distributor for payments it makes to selected brokers, dealers and
administrators which have entered into Service Agreements with the Distributor
for services provided to shareholders of the Fund. The services provided by such
intermediaries are primarily designed to assist shareholders of the Fund and
include the furnishing of office space and equipment, telephone facilities,
personnel and assistance to the Fund in servicing such shareholders. Services
provided by such intermediaries also include the provision of support services
to the Fund and include establishing and maintaining shareholders' accounts and
records, processing purchase and redemption transactions, answering routine
client inquires regarding the Fund, and providing such other personal services
to shareholders as the Fund may reasonably request.

SERVICES AVAILABLE TO THE FUND'S SHAREHOLDERS

Retirement Plans

The minimum initial investment for such plans is $1,000, with minimum
subsequent investments of $100. The Fund offers a prototype Individual
Retirement Account ("IRA") plan, and information is available from the
Distributor or from securities dealers with respect to Keogh, Section 403(b) and
other retirement plans offered. Investors should consult a tax advisor before
establishing any retirement plan.

Check-A-Matic Plan

For the convenience of shareholders, the Fund offers a preauthorized check
service under which a check is automatically drawn on the shareholder's personal
checking account each month for a predetermined amount (but not less than $100),
as if the shareholder had written it directly. Upon receipt of the withdrawn
funds, the Fund automatically invests the money in additional shares of the Fund
at the current offering price. Applications for this service are available from
the Distributor. There is no charge by the Fund for this service. The
Distributor may terminate or modify this privilege at any time, and shareholders
may terminate their participation by notifying the Transfer Agent in writing,
sufficiently in advance of the next scheduled withdrawal.
12
<PAGE>
Systematic Withdrawal Program

As another convenience, the Fund offers a Systematic Withdrawal Program
whereby shareholders may request that a check drawn in a predetermined amount be
sent to them each month or calendar quarter. A shareholder's account must have
Fund shares with a value of at least $10,000 in order to start a Systematic
Withdrawal Program, and the minimum amount that may be withdrawn each month or
quarter under the Systematic Withdrawal Program is $100. This Program may be
terminated or modified by a shareholder or the Fund at any time without charge
or penalty.

A withdrawal under the Systematic Withdrawal Program involves a redemption
of shares, and may result in a gain or loss for federal income tax purposes. In
addition, if the amount withdrawn exceeds the dividends credited to the
shareholder's account, the account ultimately may be depleted.

HOW THE FUND'S PER SHARE VALUE IS DETERMINED

The net asset value of a Fund share is determined once daily as of the
close of public trading on the New York Stock Exchange (currently 4:00 p.m., New
York City time) on each day the New York Stock Exchange is open for trading. Net
asset value per share is calculated by dividing the value of the Fund's total
assets, less its liabilities, by the number of Fund shares outstanding.

Portfolio securities are valued using current market values, if available.
Securities for which market quotations are not readily available are valued at
fair values as determined in good faith by or under the supervision of the
Trust's officers in accordance with methods which are specifically authorized by
the Board of Trustees. Short-term obligations with remaining maturities of 60
days or less are valued at amortized cost as reflecting fair value.

DISTRIBUTIONS AND TAXES

Dividends and Distributions

Dividends from net investment income are expected to be paid in June and
December. Any net capital gains realized during the Fund's fiscal year will also
be distributed to shareholders in June, with a supplemental distribution in
December of any undistributed capital gains earned during the 12-month period
ended each October 31.

Dividends and capital gain distributions (net of any required tax
withholding) are automatically reinvested in additional shares of the Fund at
the net asset value per share on the reinvestment date unless the shareholder
has previously requested in writing to the Transfer Agent that payment be made
in cash.

Any dividend or distribution paid by the Fund has the effect of reducing
the net asset value per share on the reinvestment date by the amount of the
dividend or distribution. Investors should note that a dividend or distribution
paid on shares purchased shortly before such dividend or distribution was
declared will be subject to income taxes as discussed below even though the
dividend or distribution represents, in substance, a partial return of capital
to the shareholder.

Taxes

The Fund has qualified and elected to be treated as a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986 (the "Code"). As
long as the Fund continues to qualify, and as long as the Fund distributes all
of its income each year to the shareholders, the Fund will not be subject to any
federal or excise taxes. The distributions made by the Fund will be taxable to
shareholders whether received in shares (through dividend reinvestment ) or in
cash. Distributions derived from net investment income, including net short-term
capital gains,
13
<PAGE>
are taxable to shareholders as ordinary income. A portion of these distributions
may qualify for the intercorporate dividends-received deduction. Distributions
designated as capital gains dividends are taxable as long-term capital gains
regardless of the length of time shares of the Fund have been held. Although
distributions are generally taxable when received, certain distributions made in
January are taxable as if received the prior December. Shareholders will be
informed annually of the amount and nature of the Fund's distributions.
Additional information about taxes is set forth in the Statement of Additional
Information. Shareholders should consult their own advisers concerning federal,
state and local taxation of distributions from the Fund.

GENERAL INFORMATION

The Trust

The Trust was organized as a Massachusetts business trust on February 17,
1987. The Agreement and Declaration of Trust permits the Board of Trustees to
issue an unlimited number of full and fractional shares of beneficial interest,
without par value, which may be issued in any number of series. The Board of
Trustees may from time to time issue other series, the assets and liabilities of
which will be separate and distinct from any other series. The fiscal year of
the Fund ends on March 31.

Shareholder Rights

Shares issued by the Fund have no preemptive, conversion or subscription
rights. Shareholders have equal and exclusive rights as to dividends and
distributions as declared by the Fund and to the net assets of the Fund upon
liquidation or dissolution. The Fund, as a separate series of the Trust, votes
separately on matters affecting only the Fund (e.g., approval of the Management
and Advisory Agreements); all series of the Trust vote as a single class on
matters affecting all series jointly or the Trust as a whole (e.g., election or
removal of Trustees). Voting rights are not cumulative, so that the holders of
more than 50% of the shares voting in any election of Trustees can, if they so
choose, elect all of the Trustees. While the Trust is not required and does not
intend to hold annual meetings of shareholders, such meetings may be called by
the Trustees in their discretion, or upon demand by the holders of 10% or more
of the outstanding shares of the Trust for the purpose of electing or removing
Trustees.

Performance Information

From time to time, the Fund may publish its total return in advertisements
and communications to investors. Total return information will include the
Fund's average annual compounded rate of return over the most recent year and
over the period from the Fund's inception of operations. The Fund may also
advertise aggregate and average total return information over different periods
of time. The Fund's total return will be based upon the value of the shares
acquired through a hypothetical $1,000 investment (at the maximum public
offering price) at the beginning of the specified period and the net asset value
of such shares at the end of the period, assuming reinvestment of all
distributions and after giving effect to the maximum applicable sales charge.
Total return figures will reflect all recurring charges against Fund income.
Investors should note that the investment results of the Fund will fluctuate
over time, and any presentation of the Fund's total return for any prior period
should not be considered as a representation of what an investor's total return
may be in any future period.

Shareholder Inquiries

Shareholder inquiries should be directed to the Transfer Agent at (800)
280-4779.
14
<PAGE>
Investment Advisor
Perkins Capital Management, Inc.
730 East Lake Street
Wayzata, MN 55391-1769
(612) 473-8367
(888) PERKOPP

Distributor
First Fund Distributors, Inc.
4455 E. Camelback Road, Suite 261-E
Phoenix, AZ 85018

Custodian
The Provident Bank
P.O. Box 14967
Cincinnati, OH 45250-0967

Transfer and Dividend Disbursing Agent
Rodney Square Management Corporation
P.O. Box 8987
Wilmington, DE 19899
(800) 280-4779

Auditors
Tait, Weller & Baker
2 Penn Center Plaza
Philadelphia, PA 19102

Legal Counsel
Heller, Ehrman, White & McAuliffe
333 Bush Street
San Francisco, CA 94104
<PAGE>
THE PERKINS
OPPORTUNITY
FUND

A mutual fund seeking to provide
capital appreciation through a
continuing search for investment opportunities

Prospectus

August 1, 1996

<PAGE>
PRO-CONSCIENCE
WOMEN'S EQUITY MUTUAL FUND
Advancing gender equality in the workplace

500 Washington Street, Suite 600
San Francisco, California 94111
(415) 296-9135
(800) 385-7003

The PRO-CONSCIENCE WOMEN'S EQUITY MUTUAL FUND (the "Fund") is a mutual fund with
the investment objective of providing long-term capital appreciation by
investing primarily in equity securities (common and preferred stocks). The Fund
invests in securities of publicly traded companies that satisfy certain social
responsibility criteria and that are proactive toward women's social and
economic equality. Pro-Conscience Funds, Incorporated (the "Advisor"), serves as
investment advisor to the Fund. United States Trust Company of Boston (the
"Sub-Advisor") acts as Sub-Advisor to the Fund.

This Prospectus sets forth basic information about the Fund that prospective
investors should know before investing. It should be read and retained for
future reference. The Fund is a series of Professionally Managed Portfolios. A
Statement of Additional Information dated August 1, 1996, as may be amended from
time to time, has been filed with the Securities and Exchange Commission and is
incorporated herein by reference. This Statement of Additional Information is
available without charge upon request by calling (800) 385-7003 or (415)
296-9135.

TABLE OF CONTENTS

Expense Table ................................................ 2
Financial Highlights.......................................... 3
Objective, Investment Approach and Risk....................... 4
Management of the Fund ....................................... 6
Distribution Plan............................................. 7
How To Invest in the Fund..................................... 7
How To Redeem an Investment in the Fund....................... 8
Services Available to the Fund's Shareholders................. 10
How the Fund's Per Share Value Is Determined.................. 10
Distributions and Taxes....................................... 10
General Information ......................................... 11

Shareholder Transaction Expenses

Maximum Sales Load Imposed on Purchases........... None

Maximum Sales Load Imposed
on Reinvested Dividends .......................... None

Deferred Sales Load .............................. None

Redemption Fees................................... None

Exchange Fee ..................................... None

Annual Fund Operating Expenses
(As a percentage of average net assets)

Management Fees................................... 1.00%

12b-1 Fees ....................................... 0.25%

Other Expenses (after waiver) .................... 0.25%

Total Fund Operating Expenses (after waiver)*..... 1.50%

*Total operating expenses are capped at 1.50% by agreement with the Advisor. In
the absence of this limitation, the Fund's ratio of expenses to average net
assets would have been 4.75% for the fiscal year ended March 31, 1996.

Example
This table illustrates the net transaction and operating expenses that would be
incurred by an investment in the Fund over different time periods assuming a
$1,000 investment, a 5% annual return, and redemption at the end of:

One year ......................................... $15

Three years....................................... $47

Five years........................................ $82

Ten years......................................... $179

The Example shown above should not be considered a representation of past or
future expenses and actual expenses may be greater or less than those shown. In
addition, Federal regulations require the Example to assume a 5% annual return,
but the Fund's actual return may be higher or lower. See "Management of the
Fund."

The PRO-CONSCIENCE WOMEN'S EQUITY MUTUAL FUND (the "Fund") is a diversified
series of Professionally Managed Portfolios (the "Trust"), an open-end
management investment company offering redeemable shares of beneficial interest.
Shares are purchased and redeemed at their net asset value per share, without a
sales charge. The minimum initial investment is $1,000, with subsequent minimum
investments of $100 or more, except that the minimum initial investment for
Individual Retirement Accounts is $500. Under the Fund's Distribution (Rule
12b-1) Plan, long-term shareholders may pay more than the economic equivalent of
the maximum front-end sales charges permitted by the rules of the National
Association of Securities Dealers.
2
<PAGE>
FINANCIAL HIGHLIGHTS
For a share outstanding throughout the period

The following information has been audited by Tait, Weller & Baker,
independent accountants, whose unqualified report covering the indicated periods
is included in the Statement of Additional Information. This information should
be read in conjunction with the financial statements and accompanying notes
thereto which appear in the annual report to shareholders and are incorporated
by reference into the Statement of Additional Information. Further information
about the Fund's performance may be included in its annual report, which may be
obtained without charge by writing or calling the address or telephone number on
the Prospectus cover page.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Year Year October 1, 1993*
Ended Ended Through
March 31, March 31, March 31,
1996 1995 1994
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset value, beginning period................................... $ 9.93 $10.46 $10.00
Income from investment operations:
Net investment income (loss)...................................... .01 .36 (.01)
Net realized and unrealized gain (loss) on investments............ 1.59 (.28) .47
------ ------ ------
Total from investment operations ................................... 1.60 .08 .46
------ ------ ------
Less distributions:
Dividends from net investment income.............................. (.31) (.02) .00
Distributions from net capital gains.............................. .00 (.59) .00
------ ------ ------
Total distributions.............................................. (.31) (.61) .00
------ ------ ------
Net asset value, end of period...................................... $11.22 $ 9.93 $10.46
====== ====== ======

Total return........................................................ 16.17% 0.97% 9.23%+

Ratios/supplemental data:
Net assets, end of period (millions)................................ $3.3 $1.5 $0.6
Ratios of expenses to average net assets:
Before expense reimbursement...................................... 4.75% 8.69% 21.93%+
After expense reimbursement....................................... 1.50% 1.50% 1.50%+
Ratios of net investment loss to average net assets:
Before expense reimbursement...................................... (1.97%) (1.97%) (20.74)%+
After expense reimbursement....................................... 1.28% 5.22% (.31)%+

Portfolio turnover rate ............................................ 120.64% 705.88% 139.26%
</TABLE>
* Commencement of operations.

+ Annualized.
3
<PAGE>
OBJECTIVE, INVESTMENT APPROACH AND RISK

The investment objective of the Fund is to provide long-term capital
appreciation by investing primarily in equity securities (common and preferred
stocks) in a manner consistent with preservation of the Fund's assets. There is,
of course, no assurance that the Fund's objective will be achieved. The Fund
will invest in securities of publicly traded companies that satisfy certain
social responsibility criteria and that are proactive toward women's social and
economic equality. Under normal circumstances, at least 65% of the Fund's total
assets will be invested in equity securities of companies believed to have these
characteristics.

An investment in the Fund, as is the case with regard to all mutual funds,
involves certain risk factors. Because prices of equity and other securities
fluctuate, the value of an investment in the Fund will vary, as the market value
of its investment portfolio changes.

The Fund is diversified, which under applicable federal law means that as to
75% of its total assets, no more than 5% may be invested in the securities of a
single issuer and that no more than 10% of its total assets may be invested in
the voting securities of any such issuer.

Investment Approach

The Fund seeks long term capital appreciation. The amount of income generated
by a stock will not be an important consideration in seeking to purchase or
retain it. The portfolio will normally be fully invested in stocks, except for
liquidity needs.

The expected returns and risks of different sectors of the equity market
change over time. The ability to evaluate and determine the relative
attractiveness of these sectors is advantageous in controlling risk and
achieving attractive returns. In determining the sector allocation of the Fund,
the Fund's Advisor and Sub-Advisor consider different likely outcomes for
inflation, profits, employment, the dollar and other macroeconomic variables
together with the prices of stocks in various sectors to determine which sectors
combined are expected to maximize returns while controlling portfolio risk. This
may involve substantial changes in industry weightings as economic conditions
and asset prices change. Within each industry sector, the Fund seeks stocks with
the best value to price relationships by assessing each company's financial
strength, examining each firm's business strategy and employing quantitative
measures such as dividend discount models.

The Fund may purchase both common and preferred stocks. Within different
industries, individual stock selection is based upon analysis of the company's
fundamental characteristics including financial strength, response to industry
and economy-wide changes, and price and cost trends. The Fund seeks to purchase
companies with sound competitive positions and strategies. Although companies
with varying fundamental characteristics may be purchased to achieve
diversification, emphasis is given to companies with above-average earnings
growth, sustained profitability, and above-average return on invested capital.

Company management is also evaluated based on multiple measures of social
responsibility. The Fund's Sub-Advisor, which is recognized as one of the
premier firms in the business of managing investment portfolios subject to
socially responsive investment criteria, with the oversight and assistance of
the Advisor, will provide the social screening for the portfolio as well as the
investment management. The investment universe is screened for policies toward
women's social and economic equality. The Advisor and Sub-Advisor look for
companies that exhibit some or all of the following socially responsible
characteristics:

o promotes women to top executive positions and compensates them
accordingly

o has a high percentage of women directors on the board

o has strong support from senior executives for workplace quality

o provides career development and training programs for women employees
including mentoring and company-sponsored women networking groups

o monitors hiring and promotion activity closely

o offers programs addressing work/family concerns
4
<PAGE>
o uses women-owned companies as vendors and service providers

o presents positive images of women in their advertising, promotion, and
marketing

o is accountable to employees, investors, and the communities in which it
operates

The following characteristics are viewed negatively when selecting potential
investments:

o has patterns of Equal Employment Opportunity Act violations

o promotes sexist stereotypes in the workplace or in their advertising

o markets products that adversely affect women

o unwillingness to engage in dialogue concerning women's issues

Companies that exhibit some or all of the following characteristics are also
considered:

o sensitive to minority issues

o exhibit fair employee relations

o provide high quality products or services

o sensitive to environmental concerns

Fixed Income Securities

Bond investments made by the Fund normally are those which are considered
investment grade, including bonds which are direct or indirect obligations of
the U.S. government, or which at the date of investment are rated Baa or better
by Moody's Investor Services ("Moody's") or BBB or better by Standard & Poor's
("S&P") or of comparable quality as determined by the Fund. Bonds rated Baa or
BBB are considered medium grade obligations with speculative characteristics and
are more susceptible to changing market conditions.

Money market instruments selected for investment include high grade,
short-term obligations, including those of the U.S. government, its agencies and
instrumentalities. U.S. dollar-denominated certificates of deposit, time
deposits and bankers' acceptances of U.S. banks, generally banks with assets in
excess of $1 billion, repurchase agreements with recognized dealers and banks
and commercial paper (including participation interests in loans extended by
banks to issuers of commercial paper) that at the date of investment is rated
A-1 by S&P or P-1 by Moody's, or, if unrated, of comparable quality as
determined by the Advisor.

Repurchase Agreements

The Fund may enter into repurchase agreements in order to earn additional
income on available cash, or as a defensive investment in periods when the Fund
is invested primarily in short-term maturities. A repurchase agreement is a
short-term investment in which the purchaser (that is, the Fund) acquires
ownership of a U.S. Government security (which may be of any maturity) and the
seller agrees to repurchase the obligation at a future time at a set price,
thereby determining the yield during the purchaser's holding period (usually not
more than seven days from the date of purchase). Any repurchase transaction in
which the Fund engages will require full collateralization of the seller's
obligation during the entire term of the repurchase agreement. In the event of a
bankruptcy or other default of the seller, the Fund could experience both delays
in liquidating the underlying security and losses in value. However, the Fund
intends to enter into repurchase agreements only with banks with assets of $500
million or more that are insured by the Federal Deposit Insurance Corporation
and the most creditworthy registered securities dealers pursuant to procedures
adopted and regularly reviewed by the Trust's Board of Trustees. The Advisor
monitors the creditworthiness of the banks and securities dealers with whom the
Fund engages in repurchase transactions.

Foreign Securities

The Fund may invest up to 20% of its assets in securities of foreign issuers
or in American Depository Receipts of such issuers. Such investments may involve
risks that are in addition to the usual risks inherent in domestic investments.

There may be less publicly available information about these issuers than is
available about companies in the U.S., and foreign auditing requirements may not
be comparable to those in the U.S. In addition, the value of the foreign
securities may be adversely affected by
5
<PAGE>
movements in the exchange rates between foreign currencies and the U.S. dollar,
as well as other political and economic developments, including the possibility
of expropriation, confiscatory taxation, exchange controls or other foreign
governmental restrictions. Dividends and interest on foreign securities may be
subject to foreign withholding taxes. The Fund may also invest without limit in
securities of foreign issuers which are listed and traded on a domestic national
securities exchange.

In connection with its foreign investments, the Fund may engage in currency
exchange transactions by means of buying or selling foreign currency on a spot
basis, entering into foreign currency forward contracts, buying and selling
foreign currency options, futures and options on futures. Foreign currency
exchange transactions may be entered into for the purpose of hedging against
foreign currency exchange risk arising from the Fund's investment or anticipated
investment in securities denominated in foreign currencies. Unanticipated
changes in currency prices may result in poorer overall performance for the Fund
than if it had not entered into foreign currency exchange transactions.

See the Statement of Additional Information for further information regarding
characteristics of and risks involved in the use of foreign currency contracts.

Portfolio Turnover

The annual rate of portfolio turnover may exceed 100%. In general, the
Advisor does not consider the rate of portfolio turnover to be a limiting factor
in determining when or whether to purchase or sell securities in order to
achieve the Fund's objective. Higher rates of portfolio turnover involve greater
brokerage commission expenses and can result in increased taxable capital gain
distributions. The Fund's high portfolio turnover rate in the fiscal year ended
March 31, 1996, was due to the market outlook and to certain strategies used by
its former portfolio manager in an effort to reduce the Fund's tax liability.
Costs associated with this high turnover have been borne by the Advisor.

Investment Restrictions

The Fund has adopted certain investment restrictions, which are described
fully in the Statement of Additional Information. Certain of these restrictions
are fundamental and may be changed only by a majority vote of the Fund's
outstanding shares.

MANAGEMENT OF THE FUND

The Board of Trustees of the Trust establishes the Fund's policies and
supervises and reviews the management of the Fund. The Fund's Advisor is
Pro-Conscience Funds, Incorporated, a California corporation organized in 1993,
which is located at 500 Washington Street, Suite 600, San Francisco, California
94111. The Advisor develops the Fund's investment policy, including guidelines
and social criteria for screening companies for their policies on behalf of
women, oversees the management of the Fund's investments, furnishes the Fund
with office space and certain administrative services and provides most of the
personnel needed by the Fund. As compensation, the Fund pays the Advisor a
monthly management fee (accrued daily) based on the average daily net assets of
the Fund at the rate of 1.00% annually.

United States Trust Company of Boston is the Sub-Advisor to the Fund. The
Sub-Advisor together with the Advisor is responsible for formulating and
implementing the Fund's investment program. The Sub-Advisor is a
Massachusetts-chartered banking and trust company and is a wholly-owned
subsidiary of UST Corporation, a Massachusetts bank holding company. It is
located at 40 Court Street, Boston, MA 02108. The Sub-Advisor has approximately
$3.1 billion of assets under management. The Trust Department of the Sub-Advisor
has managed funds as a fiduciary since 1895. Ms. Cheryl Smith, Vice President of
the Sub-Advisor, is the Fund's portfolio manager. Ms. Smith is a Chartered
Financial Analyst and a member of the Boston Security Analysis Society. Neither
the Sub-Advisor nor UST Corporation is affiliated with United States Trust
Company of New York. For its services, the Sub-Advisor receives a Sub-Advisory
fee from the Advisor at the rate of 0.25% of the Fund's average net assets
annually.

Investment Company Administration Corporation (the "Administrator") acts as
the Fund's Administrator under an Administrative Management Agreement. Under
that agreement, the Administrator prepares various federal and
6
<PAGE>
state regulatory filings, reports and returns for the Fund, prepares reports and
materials to be supplied to the trustees, monitors the activities of the Fund's
custodian, transfer agent and accountants, and coordinates the preparation and
payment of Fund expenses and reviews the Fund's expense accruals. For its
services, the Administrator receives a monthly fee at the following annual rate:

Average Net Assets Fee or Fee Rate*
------------------- ----------------
Under $15 million $30,000
$15 to $50 million 0.20%
$50 to $100 million 0.15%
$100 to $150 million 0.10%
Over $150 million 0.05%

*The Administration Fees are currently being waived until December 31, 1996.

The Fund is responsible for its own operating expenses. The Advisor has
undertaken to reduce its fees or reimburse the Fund for its annual operating
expenses that exceed 1.50% of the Fund's average daily net assets. Brokerage
commissions for securities transactions of the Fund are not included in the
expenses subject to this 1.50% cap. The Advisor also may reimburse additional
amounts to the Fund at any time in order to reduce the Fund's expenses, or to
the extent required by applicable securities laws. To the extent the Advisor
performs a service for which the Fund is obligated to pay, the Fund shall
reimburse the Advisor for its costs incurred in rendering such service.

DISTRIBUTION PLAN

The Fund has adopted a distribution plan pursuant to Rule 12b-1. The Plan
provides that the Fund may pay distribution and related expenses of up to an
annual rate of 0.25% of the Fund's average net assets to the Advisor as
distribution coordinator. Expenses permitted to be paid by the Fund under its
Plan include: preparation, printing and mailing of prospectuses; shareholder
reports such as semiannual and annual reports, performance reports and
newsletters; sales literature and other promotional material to prospective
investors; direct mail solicitation; advertising; public relations; compensation
of sales personnel, advisors or other third parties for their assistance with
respect to the distribution of the Fund's shares; payments to financial
intermediaries for shareholder support; administrative and accounting services
with respect to the shareholders of the Fund; and such other expenses as may be
approved from time to time by the Board of Trustees.

The Rule 12b-1 Distribution Plan allows excess distribution expenses to be
carried forward by the Advisor, as distribution coordinator, and resubmitted in
a subsequent fiscal year provided that (i) distribution expenses cannot be
carried forward for more than three years following initial submission; (ii) the
Board of Trustees has made a determination at the time of initial submission
that the distribution expenses are appropriate to be carried forward; and (iii)
the Board of Trustees makes a further determination, at the time any
distribution expenses which have been carried forward are resubmitted for
payment, to the effect that payment at the time is appropriate, consistent with
the objectives of the Plan and in the current best interests of shareholders.

HOW TO INVEST IN THE FUND

The minimum initial investment is $1,000, except that the minimum for
Individual Retirement Accounts is $500. Subsequent investments must be at least
$100. See "Services Available to the Fund's Shareholders." First Fund
Distributors, Inc. (the "Distributor"), acts as Distributor of the Fund's
shares. The Distributor may, at its discretion, waive the minimum investment
7
<PAGE>
requirements. The Advisor, in its discretion, may pay finder's fees or
commissions at its own expense. Investors who effect purchases or redemptions
through a broker or agent may be charged a fee by that broker or agent.
Investors may purchase shares of the Fund by check or wire.

By Check:

Initial Investment. Complete the Fund's Account Application (included with
this Prospectus). Make your check payable to "Pro-Conscience Women's Equity
Mutual Fund." Mail or deliver the completed Account Application and your check
to: Pro-Conscience Women's Equity Mutual Fund, P.O. Box 856, Cincinnati, OH
45264-0856

Subsequent Investments.

Detach and complete the stub attached to your account statement. Make your
check payable to "Pro-Conscience Women's Equity Mutual Fund." Write your
shareholder account number on the check. Mail or deliver the check and
reinvestment form in the envelope provided or send it to the Fund at the address
indicated above.

By Wire:

Initial Investment. Before wiring funds, call the Fund at (800) 385-7003 to
advise that you intend to make an initial investment by wire and to receive an
account number. Provide your name, and the dollar amount to be invested.

Request your bank to transmit immediately available funds by wire for
purchase of shares in your name to the Fund's Custodian, as follows:

Star Bank, N.A. Cinti/Trust
ABA Routing Number: 0420-0001-3
for further credit to Pro-Conscience Women's
Equity Mutual Fund
DDA #483898037
Account Number [Name of Shareholder]

Subsequent Investments. Instruct your bank to wire funds as indicated above.
It is essential that complete information regarding your account be included in
all wire instructions in order to facilitate prompt and accurate handling of
investments. Investors may obtain further information about remitting funds in
this manner from the Transfer Agent, and any fees that may be imposed by their
own banks.

General

Investors will not be permitted to redeem any shares purchased with an
initial investment made by wire until one business day after the completed
Account Application is received by the Fund. All investments must be made in
U.S. dollars and, to avoid fees and delays, checks should be drawn only on U.S.
banks and should not be made by third party check. A charge may be imposed if
any check used for investment does not clear. The Fund and the Distributor
reserve the right to reject any purchase order in whole or in part.

If an order, together with payment in proper form, is received by the
Transfer Agent by the close of trading on the New York Stock Exchange (currently
4:00 p.m., Eastern time), Fund shares will be purchased at the offering price
determined as of the close of trading on that day. Otherwise, Fund shares will
be purchased at the offering price determined as of the close of trading on the
New York Stock Exchange on the next business day.

The Fund does not issue share certificates. All shares are held in
non-certificated form registered on the books of the Fund and the Fund's
Transfer Agent for the account of the shareholder.

HOW TO REDEEM AN INVESTMENT IN THE FUND

Shareholders have the right to have the Fund redeem all or any portion of
their outstanding shares at their current net asset value on each day the New
York Stock Exchange
8
<PAGE>
is open for trading. The redemption price is the net asset value per share next
determined after the shares are validly tendered for redemption.

Direct Redemption

A written request for redemption must be received by the Fund's Transfer
Agent in order to constitute a valid tender for redemption. Redemption requests
should be sent to Women's Equity Mutual Fund, American Data Services, Inc., 24
West Carver St., Huntington, NY 11743. To protect the Fund and its shareholders,
a signature guarantee is required for certain transactions, including
redemptions. Signature(s) on the redemption request must be guaranteed by an
"eligible guarantor institution" as defined in the federal securities laws;
these institutions include banks, broker-dealers, credit unions and savings
institutions. A broker-dealer guaranteeing signatures must be a member of a
clearing corporation or maintain net capital of at least $100,000. Credit unions
must be authorized to issue signature guarantees. Signature guarantees will be
accepted from any eligible guarantor institution which participates in a
signature guarantee program. A notary public is not an acceptable guarantor.

Telephone Redemption

Shareholders who complete the Telephone Privileges Authorization portion of
the Fund's Account Application may redeem shares on any business day the New
York Stock Exchange is open by calling the Fund's Transfer Agent at (800)
385-7003 before 4:00 p.m. Eastern time. Redemption proceeds will be mailed or
wired at the shareholder's direction the next business day to the predesignated
account. The minimum amount that may be wired is $1,000 (wire charges, if any,
will be deducted from redemption proceeds).

By establishing telephone redemption privileges, a shareholder authorizes the
Fund and its Transfer Agent to act upon the instruction of any person by
telephone to redeem from the account for which such service has been authorized
and transfer the proceeds to the bank account designated in the Authorization.
The Fund and Transfer Agent will use procedures to confirm that redemption
instructions received by telephone are genuine, including recording of telephone
instructions and requiring a form of personal identification before acting on
such instructions. Neither the Fund nor the Transfer Agent will be liable for
any loss, expense, or cost arising out of any telephone redemption or exchange
request, including any fraudulent or unauthorized requests that are reasonably
believed to be genuine, provided that such procedures are followed. The Fund may
change, modify, or terminate these privileges at any time upon at least 60 days'
notice to shareholders.

General

SERVICES AVAILABLE TO THE FUND'S SHAREHOLDERS

Retirement Plans

The Fund offers a prototype Individual Retirement Account ("IRA") plan and
information is available from the Distributor or from your securities dealer
with respect to Keogh, Section 403(b) and other retirement plans offered.
Investors should consult a tax adviser before establishing any retirement plan.

Check-A-Matic Plan

For the convenience of shareholders, the Fund offers a preauthorized check
service under which a check is automatically drawn on the shareholder's personal
checking account each month for a predetermined amount (but not less than $100).
Upon receipt of the check, the Fund automatically invests the money in
additional shares of the Fund at the current offering price. Applications for
this service are available from the Distributor. There is no charge by the Fund
for this service. The Distributor may terminate or modify this privilege at any
time, and shareholders may terminate their participation by notifying the
Transfer Agent in writing.

Systematic Withdrawal Program

A withdrawal under the Systematic Withdrawal Program involves a redemption of
shares, and may result in recognition of a gain or loss for federal income tax
purposes. In addition, if the amount withdrawn exceeds the dividends credited to
the shareholder's account, the account ultimately may be depleted.

HOW THE FUND'S SHARE VALUE IS DETERMINED

Portfolio securities are valued using current market values, if available.
Securities for which market quotations are not readily available are valued at
fair values as determined in good faith by or under the supervision of the
Trust's officers in accordance with methods which are specifically authorized by
the Board of Trustees. Short-term obligations with remaining maturities of sixty
days or less are valued at amortized cost as reflecting fair value.

DISTRIBUTIONS AND TAXES

Dividends and Distributions

Dividends from net investment income are declared and paid at least annually,
typically at the end of the Fund's fiscal year (March 31). Any undistributed net
capital gains realized during the Fund's fiscal year will also be distributed to
shareholders after the end of the year, with a supplemental distribution on or
about December 31 of any undistributed net investment income as well as any
additional undistributed capital gains earned during the 12-month period ended
each October 31.

Any dividend or distribution paid by the Fund has the effect of reducing the
net asset value per share on the reinvestment date by the amount of the dividend
or distribution. Investors should note that a dividend or
10
<PAGE>
distribution paid on shares purchased shortly before such dividend or
distribution was declared will be subject to income taxes as discussed below
even though the dividend or distribution represents, in substance, a partial
return of capital to the shareholder.

Taxes

The Fund has qualified and elected to be treated as a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"). As long as the fund continues to qualify, and as long as the Fund
distributes all of its income each year to the shareholders, the Fund will not
be subject to any federal income or excise taxes. Distributions made by the Fund
will be taxable to shareholders whether received in shares (through dividend
reinvestment) or in cash. Distributions derived from net investment income,
including net short-term capital gains, are taxable to shareholders as ordinary
income. A portion of these distributions may qualify for the dividends-received
deduction available to corporate shareholders. Distributions designated as
capital gain dividends are taxable as long-term capital gains regardless of the
length of time shares of the Fund have been held. Although distributions are
generally taxable when received, certain distributions made in January are
taxable as if received the prior December. Shareholders will be informed
annually of the amount and nature of the Fund's distributions.

GENERAL INFORMATION

The Trust

Shareholder Rights

Shares issued by the Fund have no preemptive, conversion, or subscription
rights. Shareholders have equal and exclusive rights as to dividends and
distributions as declared by the Fund and to the net assets of the Fund upon
liquidation or dissolution. The Fund, as a separate series of the Trust, votes
separately on matters affecting only the Fund (for example, approval of the
Management Agreement); all series of the Trust vote as a single class on matters
affecting all series jointly or the Trust as a whole (for example, election or
removal of Trustees). Voting rights are not cumulative, so that the holders of
more than 50% of the shares voting in any election of Trustees can, if they so
choose, elect all of the Trustees. While the Trust is not required and does not
intend to hold annual meetings of shareholders, such meetings may be called by
the Trustees in their discretion, or upon demand by the holders of 10% or more
of the outstanding shares of the Trust for the purpose of electing or removing
Trustees.

Performance Information

From time to time, the Fund may publish its total return in advertisements
and communications to investors. Total return information will include the
Fund's average annual compounded rate of return over the most recent four
calendar quarters and over the period from the Fund's commencement of
operations. The Fund may also advertise aggregate and average total return
information over different periods of time. The Fund's total return will be
based upon the value of the shares acquired through a hypothetical $1,000
investment at the beginning of the specified period and the net asset value of
such shares at the end of the period, assuming reinvestment of all
distributions. Total return figures will reflect all recurring charges against
Fund income. Investors should note that the investment results of the Fund will
fluctuate over time, and any presentation of the Fund's total return for any
prior period should not be considered as a representation of what an investor's
total return may be in any future period.

Shareholder Inquiries

Shareholder inquiries should be directed to the Fund at the number shown on
the cover of the Prospectus.
11
<PAGE>
PRO-CONSCIENCE
WOMEN'S EQUITY MUTUAL FUND
Advancing gender equality in the workplace

August 1, 1996

500 Washington Street, Suite 600
San Francisco, California 94111
(415) 296-9135
(800) 385-7003

<PAGE>
Advisor

Pro-Conscience Funds Incorporated
500 Washington Street, Suite 600
San Francisco, California 94111
(415) 296-9135

Distributor

First Fund Distributors, Inc.
4455 E. Camelback Road, Suite 261-E
Phoenix, Arizona 85018

Custodian

Star Bank, N.A.
425 Walnut St.
Cincinnati, Ohio 45202

Transfer and Shareholder Service Agent

American Data Services
24 West Carver St.
Huntington, NY 11743

Auditors

Tait, Weller & Baker
2 Penn Center Plaza
Philadelphia, Pennsylvania 19102

Legal Counsel

Heller, Ehrman, White & McAuliffe
333 Bush Street
San Francisco, California 94104
<PAGE>
AVONDALE TOTAL RETURN FUND

1105 Holliday
Wichita Falls, Texas 76301
(817) 761-3777

The AVONDALE TOTAL RETURN FUND (the "Fund") is a mutual fund with the
investment objective of seeking the combination of income and capital
appreciation that will produce the maximum total return consistent with
reasonable risk. The Fund seeks to achieve its objective by investing primarily
in higher quality fixed income obligations and equity securities (common and
preferred stocks). The balance between debt and equity securities will be
adjusted based upon the market interpretation of the Manager of the Fund.

This Prospectus sets forth basic information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. The Fund is a series of Professionally Managed
Portfolios. A Statement of Additional Information dated August 1, 1996, as may
be amended from time to time, has been filed with the Securities and Exchange
Commission and is incorporated herein by reference. The Statement of Additional
Information is available without charge upon written request to the Fund at the
address given above.

TABLE OF CONTENTS

Expense Table........................................................ 2
Financial Highlights ................................................ 3
Objective and Investment Approach of the Fund........................ 4
Management of the Fund............................................... 6
How To Invest in the Fund............................................ 6
How To Redeem an Investment in the Fund ............................. 8
Services Available to the Fund's Shareholders ....................... 9
How the Fund's Per Share Value Is Determined......................... 10
Distributions and Taxes............................................. 10
General Information.................................................. 11

Prospectus dated August 1, 1996
<PAGE>
The AVONDALE TOTAL RETURN FUND (the "Fund") is a diversified series of
Professionally Managed Portfolios (the "Trust"), an open-end management
investment company offering redeemable shares of beneficial interest. Shares of
the Fund may be purchased at their net asset value per share. The minimum
initial investment is $1,000, with subsequent investments of $250 or more ($500
and $100, respectively, for retirement plans). Shares will be redeemed at net
asset value per share.

EXPENSE TABLE

Shareholder Transaction Expenses

Maximum Sales Load Imposed on Purchases............................ None
Maximum Sales Load Imposed on Reinvested Dividends................. None
Deferred Sales Load..................................................... None
Redemption Fees.................................................... None
Exchange Fee ...................................................... None

Annual Fund Operating Expenses
(As a percentage of average net assets)

Management Fees.................................................... 0.70%
Other Expenses..................................................... 0.99%
----
Total Fund Operating Expenses ..................................... 1.69%
====

<TABLE>
<CAPTION>
Example 1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C>
This table illustrates the net transaction and operating expenses that
would be incurred by an investment in the Fund over different time periods
assuming a $1,000 investment, a 5% annual return, and redemption at the end
of each time period..................................................... $17 $53 $92 $200
</TABLE>

The following information has been audited by Tait, Weller & Baker,
independent accountants, whose unqualified report covering the fiscal period
ended March 31, 1996 is incorporated by reference herein and appears in the
annual report to shareholders. This information should be read in conjunction
with the financial statements and accompanying notes which appear in the annual
report and are incorporated by reference into the Statement of Additional
Information. Further information about the Fund's performance is contained in
its annual report, which may be obtained without charge by writing or calling
the address or telephone number on the Prospectus cover.
<TABLE>
<CAPTION>
October 12, 1988*
Year Ended March 31, to March 31,
1996 1995 1994 1993 1992 1991 1990 1989
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, beginning of period...........$23.58 $22.93 $24.78 $24.19 $22.44 $20.76 $19.84 $20.00

Income from Investment Operations:
Net investment income ................... .27 .23 .26 .46 .51 .75 .88 .48
Net realized and unrealized (loss) gain
on investments........................ 6.00 1.49 (.44) 1.62 1.92 1.46 1.13 (.14)
------ ------ ------ ------ ------ ------ ------ ------
Total from investment operations......... 6.27 1.72 (.18) 2.08 2.43 2.21 2.01 .34
------ ------ ------ ------ ------ ------ ------ ------
Less Distributions:
Dividends (from net investment income).. (.27) (.23) (.35) (.49) (.68) (.53) (.79) (.50)
Distributions (from net capital gains).. (1.82) (.84) (1.32) (1.00) -0- -0- (.30) -0-
------ ------ ------ ------ ------ ------ ------ ------
Total distributions..................... (2.09) (1.07) (1.67) (1.49) (.68) (.53) (1.09) (.50)
------ ------ ------ ------ ------ ------ ------ ------

Net Asset Value, end of period.................$27.76 $23.58 $22.93 $24.78 $24.19 $22.44 $20.76 $19.84
====== ====== ====== ====== ====== ====== ====== ======

Total Return............................. 26.67% 7.82% (0.82)% 9.19% 11.07% 10.90% 10.13% 1.72%

Net Assets, end of period (millions) ..........$ 9.8 $ 6.9 $ 7.4 $ 7.6 $ 7.8 $ 5.4 $ 2.4 $ 0.7

Ratios/Supplemental Data:
Ratios of expenses to average net assets:
Before expense reimbursement............. 1.69% 1.77% 1.83% 1.78% 2.13% 2.58% 4.27% 9.33%+
After expense reimbursement............. 1.69% 1.77% 1.83% 1.78% 1.96% 1.98% 1.92% 1.30%+
Ratios of net income (loss) to average net assets:
Before expense reimbursement............. 1.03% 0.96% 1.09% 1.97% 2.00% 3.02% 1.81% (2.63)%+
After expense reimbursement............. 1.03% 0.96% 1.09% 1.97% 2.17% 3.62% 4.16% 5.40%+

Portfolio turnover rate ....................... 52.25% 52.24% 73.65% 157.64% 59.58% 65.51% 99.50% 60.82%+
</TABLE>

* Effective date of the Fund's initial registration under the Securities Act of
1933.
+ Annualized.
3
<PAGE>
OBJECTIVE AND INVESTMENT APPROACH OF THE FUND

The investment objective of the Fund is to realize the combination of
income and capital appreciation that will produce the maximum total return
consistent with reasonable risk. The Fund seeks to achieve its objective by
investing primarily in higher quality fixed income debt securities and equity
securities. There is, of course, no assurance that the Fund's objective will be
achieved, and the Fund's net asset value per share will fluctuate as the market
value of its investment portfolio fluctuates.

General Policies. The Fund will normally invest in fixed income debt
securities, common stocks, securities convertible into common stocks, and
preferred stocks.

The Fund's investment manager, Herbert R. Smith, Incorporated, (the
"Manager") has the flexibility to select among different types of investments
for growth and income and to alter the composition of the portfolio as economic
and market trends change. The Fund may invest up to 100% of the value of its
total assets in higher quality debt securities which, at the time of purchase,
are rated A or better by either Moody's Investors service ("Moody's") or by
Standard & Poor's Corporation ("S&P") or, if unrated, are judged by the Manager
to be of comparable quality to such rated securities. An Appendix in the
Statement of Additional Information contains a complete description of the
applicable ratings of Moody's and S&P.

Up to 85% of the Fund's total assets at any time may be invested in equity
securities (common and preferred stocks). For defensive purposes or pending
longer-term investment, the Fund also may temporarily invest any amount of its
assets in high quality short-term money market instruments rated in the top two
grades by Moody's or S&P or, if unrated, instruments deemed to be of comparable
quality by the Fund's Manager.

The average dollar-weighted effective maturity of the Fund's debt security
portfolio will not exceed 10 years, and no debt security will have an effective
maturity exceeding 15 years.

The Fund is diversified, which under applicable federal law means that as
to 75% of its total assets, no more than 5% may be invested in securities of a
single issuer and that no more than 10% of its total assets may be invested in
the voting securities of such issuer.

Investment Approach. The Manager is a risk-averse investor. The Manager
follows a dual screen process it has developed that uses a combination of
fundamental and technical analysis.

Fundamental analysis with respect to debt securities is concerned with the
present and future state of the economy, monetary conditions, the outlook for
interest rates and the creditworthiness of the issuer. Technical analysis
studies and tracks various economic data as well as supply and demand factors
such as price movements and trading volume. From this dual analysis, the Manager
develops its policy regarding maturity and duration of debt securities. It pays
close attention to the yield curve, i.e., the yields to be earned by investing
in various maturities.

Fundamental analysis with respect to equity securities is concerned with
the business value of the individual company as well as the economy and factors
relating to the company's prospects for increased earnings and a higher stock
price. In the equity area, technical analysis focuses on supply and demand
conditions for a stock, or the stock market as a whole, as revealed by price
movements, money flow, trading volume and other factors. Using this dual
analysis, the Manager is able to identify individual stocks, industries and
industry groups whose statistical patterns are weakening or strengthening.

Foreign Securities. The Fund may invest up to 15% of its assets in foreign
securities. These include U.S. Dollar denominated securities of foreign issuers,
securities of foreign issuers that are listed and traded on a domestic national
4
<PAGE>
securities exchange, and American Depositary Receipts ("ADR's"). ADR's are
receipts typically issued by a U.S. bank or trust company evidencing ownership
of underling foreign securities.

There are risks associated with investing in foreign securities. There
may be less publicly available information about these issuers than is available
about companies in the U.S., and foreign auditing requirements may not be
comparable to those in the U.S. Interest or dividends on foreign securities may
be subject to foreign withholding taxes. Investments in foreign countries may be
subject to the possibility of expropriation or confiscatory taxation, exchange
controls, political or social instability or diplomatic developments that could
adversely affect the value of those investments. In addition, the value of the
foreign securities may be adversely affected by movements in the exchange rates
between foreign currencies and the U.S. dollar, as well as other political and
economic developments.

Securities Lending. In order to generate additional income, the Fund may
lend up to 30% of its portfolio securities to broker-dealers, major banks or
other recognized domestic institutional borrowers of securities who are not
affiliated with the Fund's Manager or Distributor and whose creditworthiness is
acceptable to the Manager. The borrower must deliver to the Fund cash or cash
equivalent collateral, or provide to the Fund an irrevocable letter of credit
equal in value to at least 100% of the value of the securities loaned at all
times during the loan. During the time the portfolio securities are on loan, the
borrower pays the Fund any interest paid on such securities. The Fund may invest
the cash collateral and earn additional income, or it may receive an agreed-upon
amount of interest income if the borrower has delivered equivalent collateral or
a letter of credit.

Repurchase Agreements. The Fund may enter into repurchase agreements in
order to earn additional income on available cash, or as a defensive investment
in periods when the Fund is primarily in short-term maturities. A repurchase
agreement is a short-term investment in which the purchaser (i.e., the Fund)
acquires ownership of a U.S. Government security (which may be of any maturity)
and the seller agrees to repurchase the obligation at a future time at a set
price, thereby determining the yield during the purchaser's holding period
(usually not more than seven days from the date of purchase). Any repurchase
transaction in which the Fund engages will require full collateralization of the
seller's obligation during the entire term of the repurchase agreement. In the
event of a bankruptcy or other default of the seller, the Fund could experience
both delays in liquidating the underlying security and losses in value. However,
the Fund intends to enter into repurchase agreements only with banks with assets
of $500 million or more that are insured by the Federal Deposit Insurance
Corporation and the most creditworthy registered securities dealers pursuant to
procedures adopted and regularly reviewed by the Trust's Board of Trustees. The
Manager monitors the creditworthiness of the banks and securities dealers with
whom the Fund engages in repurchase transactions, and the Fund will not invest
more than 15% of its total assets in illiquid securities, including repurchase
agreements maturing in more than seven days.

When-Issued Securities. The Fund may purchase securities on a when-issued
basis, for payment and delivery at a later date, generally within one month. The
price and yield are generally fixed on the date of commitment to purchase, and
the value of the security is thereafter reflected in the Fund's net asset value.
During the period between purchase and settlement, no payment is made by the
Fund and no interest accrues to the Fund. At the time of settlement, the market
value of the security may be more or less than the purchase price. The Fund
limits its investments in when-issued securities to less than 5% of its total
assets. When the Fund purchases securities on a when-issued basis, it maintains
liquid assets in a segregated account with its Custodian in an amount equal to
the purchase price as long as the obligation to purchase continues.

Portfolio Turnover. The annual rate of portfolio turnover is anticipated to
be less than 100%. However, under certain market conditions, the Fund may
experience a higher rate of portfolio turnover. In general, the Manager will not
consider the rate of portfolio turnover to be a limiting factor in determining
when or whether to purchase or sell securities in order to achieve the Fund's
objective. Although the Fund anticipates that it will be able to effect
transactions
5
<PAGE>
at sharply discounted brokerage commission rates or spreads, high portfolio
turnover involves correspondingly greater brokerage commissions and other
transaction costs, which are borne directly by the Fund, and may increase
realized capital gains which are taxable to Fund shareholders when distributed.

Investment Restrictions. The Fund has adopted certain investment
restrictions, which are described fully in the Statement of Additional
Information. Like the Fund's investment objective, certain of these restrictions
are fundamental and may be changed only by a majority vote of the Fund's
outstanding shares.

MANAGEMENT OF THE FUND

The Board of Trustees of the Trust establishes the Fund's policies and
supervises and reviews the management of the Fund. Herbert R. Smith,
Incorporated, 1105 Holliday, Wichita Falls, Texas 76301, the Fund's Manager, has
been in the investment advisory business since 1970 and manages private and
institutional accounts with aggregate assets of approximately $3 billion as of
the date of this Prospectus. Mr. Herbert R. Smith is principally responsible for
management of the Fund's portfolio.

The Manager provides the Fund with advice on buying and selling securities,
manages the investments of the Fund, furnishes the Fund with office space and
certain administrative services, and provides most of the personnel needed by
the Fund. As compensation, the Fund pays the Manager a monthly management fee
(accrued daily) based upon the average daily net assets of the Fund at the
following annual rates: 0.70% on the first $200 million of net assets; 0.60% on
the next $300 million of net assets; and 0.50% on net assets exceeding $500
million.

Investment Company Administration Corporation (the "Administrator") acts as
the Fund's administrator. The Administrator prepares various federal and state
regulatory filings, reports and returns for the Fund, prepares reports and
materials to be supplied to the trustees, monitors the activities of the Fund's
custodian, transfer agent and accountants, and coordinates the preparation and
payment of Fund expenses and reviews the Fund's expense accruals. For its
services, the Administrator receives an annual fee equal to the greater of 0.20
of 1% of the Fund's average daily net assets or $30,000.

The Fund is responsible for its own operating expenses. The Manager has
agreed to reduce its fees or reimburse the Fund for its annual operating
expenses which exceed the most stringent limits prescribed by any state in which
the Fund's shares are offered for sale. The Manager also may reimburse
additional amounts to the Fund at any time in order to reduce the Fund's
expenses, or to the extent required by applicable securities laws. To the extent
the Manager performs a service for which the Fund is obligated to pay, the Fund
shall reimburse the Manager for its costs incurred in rendering such service.

The Manager considers a number of factors in determining which brokers or
dealers to use for the Fund's portfolio transactions. While these are more fully
discussed in the Statement of Additional Information, the factors include, but
are not limited to, the reasonableness of commissions, quality of services and
execution, and the availability of research which the Manager may lawfully and
appropriately use in its investment management and advisory capacities. Provided
the Fund receives prompt execution at competitive prices, the Manager may also
consider the sale of Fund shares as a factor in selecting broker-dealers for the
Fund's portfolio transactions. The Fund will not effect portfolio transactions
with, nor pay commissions to, any broker-dealer affiliated with the Manager.

HOW TO INVEST IN THE FUND

The minimum initial investment is $1,000. Subsequent investments must be at
least $250. Investments in retirement plans may be for minimums of $500 and
$100, respectively. The Distributor may, at its discretion, waive the minimum
investment requirements for purchases in conjunction with certain group or
periodic plans. In addition to cash purchases,
6
<PAGE>
shares may be purchased by tendering payment in kind in the form of shares of
stock, provided that any such tendered stock is readily marketable, its
acquisition is consistent with the Fund's investment objective, the tendered
stock is otherwise acceptable to the Fund's Manager, and the investor agrees to
pay the brokerage commissions on any sale of stock so tendered if it is sold by
the Fund within 90 days of acquisition.

Investors may purchase shares of the Fund by check or by wire:

By check

Initial Investment. Complete the Fund's Account Application (included with
this Prospectus). Make your check payable to "Avondale Total Return Fund." Mail
or deliver the completed Account Application and your check to the Fund:

Avondale Total Return Fund
P.O. Box 856
Cincinnati, Ohio 45264-0856

A purchase order sent by overnight mail should be sent to: Avondale Total
Return Fund, c/o Star Bank, N.A., 425 Walnut Street, M.L. 6118, Cincinnati, OH
45202.

Subsequent Investments. Detach and complete the stub attached to your
account statement. Make your check payable to "Avondale Total Return Fund."
Write your shareholder account number on the check. Mail or deliver the check
and reinvestment form to the Fund in the envelope provided or send to the Fund
at the address indicated above.

By wire

Initial Investment. Before wiring funds, call the Transfer Agent at (800)
385-7003 between the hours of 9:00 a.m. and 4:00 p.m. Eastern time, on a day the
New York Stock Exchange is open for trading in order to receive an account
number. If the funds are received by the Transfer Agent prior to the time that
the Fund's net asset value is calculated, the funds will be invested on that
day; otherwise they will be invested on the next business day. Provide the
Transfer Agent with your name, and the dollar amount to be invested. Complete
the Fund's Account Application (included with this Prospectus). Be sure to
include the date and the order confirmation number. Mail or deliver the
completed Application to the appropriate address shown at the top of the Account
Application. The investor should also ensure that the wiring bank includes the
name of the Fund and the account number with the wire. Request your bank to
transmit immediately available funds by wire for purchase of shares in your name
to the Fund's Custodian, as follows:

Star Bank, N.A.
ABA Routing Number: 0420-0001-3
Avondale Total Return Fund
DDA # 483897914
(Account name and number)

Subsequent Investments. For subsequent investments, an investor should call
the Transfer Agent at (800) 385-7003 before the wire is sent. Failure to do so
will cause the purchase to be credited the next day, when the Transfer Agent
receives notice of the wire. The investor's bank should wire the funds as
indicated above. It is essential that complete information regarding the
investor's account be included in all wire instructions in order to facilitate
prompt and accurate handling of investments. Investors may obtain further
information about remitting funds in this manner from the Transfer Agent, and
any fees that may be imposed from their own banks.
7
<PAGE>
General. Investors will not be permitted to redeem any shares purchased
with an initial investment made by wire until one business day after the
completed Account Application is received by the Fund. All investments must be
made in U.S. dollars and, to avoid fees and delays, checks should be drawn only
on U.S. banks and should not be made by third party check. A charge may be
imposed if any check used for investment does not clear. The Fund and its
Distributor, First Fund Distributors, Inc. (the "Distributor"), reserve the
right to reject any purchase order in whole or in part.

The Fund does not issue share certificates. All shares are held in
non-certificated form registered on the books of the Fund and the Fund's
Transfer Agent for the account of the shareholder.

HOW TO REDEEM AN INVESTMENT IN THE FUND

Direct Redemption

A written request for redemption must be received by the Fund's Transfer
Agent in order to constitute a valid tender for redemption. Redemption requests
should be sent to: Avondale Total Return Fund, 24 West Carver Street, 2nd Floor,
Huntington, NY 11743. To protect the Fund and its shareholders, a signature
guarantee is required for certain transactions, including redemptions.
Signature(s) on the redemption request must be guaranteed by an "eligible
guarantor institution" as defined in the federal securities laws; these
institutions include banks, broker-dealers, credit unions and savings
institutions. A broker-dealer guaranteeing signatures must be a member of a
clearing corporation or maintain net capital of at least $100,000. Credit unions
must be authorized to issue signature guarantees. Signature guarantees will be
accepted from any eligible guarantor institution which participates in a
signature guarantee program. A notary public is not an acceptable guarantor.

Telephone Redemption.

Shareholders who complete the Redemption by Telephone portion of the Fund's
Account Application may redeem shares on any business day the New York Stock
Exchange is open by calling the Fund's Transfer Agent at (800) 385-7003 before
4:00 p.m. Eastern time. Redemption proceeds will be mailed or wired at the
shareholder's direction the next business day to the predesignated account. The
minimum amount that may be wired is $1,000 (wire charges, if any, will be
deducted from redemption proceeds).

By establishing telephone redemption privileges, a shareholder authorizes
the Fund and its Transfer Agent to act upon the instruction of any person by
telephone to redeem from the account for which such service has been authorized
and transfer the proceeds to the bank account designated in the Authorization.
The Fund and the Transfer Agent will use procedures to confirm that redemption
instructions received by telephone are genuine, including recording of
8
<PAGE>
telephone instructions and requiring a form of personal identification before
acting on such instructions. Neither the Fund nor the Transfer Agent will be
liable for any loss, expense, or cost arising out of any telephone redemption
request, including any fraudulent or unauthorized requests that are reasonably
believed to be genuine, provided that such procedures are followed. The Fund may
change, modify, or terminate these privileges at any time upon at least 60 days'
notice to shareholders.

General

SERVICES AVAILABLE TO THE FUND'S SHAREHOLDERS

Retirement Plans. The minimum initial investment for such plans is $500,
with minimum subsequent investments of $100. The Fund also offers a prototype
Individual Retirement Account ("IRA") plan. Investors should consult a tax
adviser before establishing an IRA plan.

Check-A-Matic Plan. For the convenience of shareholders, the Fund offers a
preauthorized check service under which a check is automatically drawn on the
shareholder's personal checking account each month for a predetermined amount
(but not less than $500), as if the shareholder had written it directly. Upon
receipt of the check, the Fund automatically invests the money in additional
shares of the Fund at the current net asset value. Applications for this service
are available from the Distributor. There is no charge by the Fund for this
service. The Distributor may terminate or modify this privilege at any time, and
shareholders may terminate their participation by notifying the Transfer Agent
in writing.

Systematic Withdrawal Program. As another convenience, the Fund offers a
Systematic Withdrawal Program whereby shareholders may request that a check
drawn in a predetermined amount be sent to them each month or calendar quarter.
A shareholder's account must have Fund shares with a value of at least $10,000
in order to start a Systematic Withdrawal Program, and the minimum amount that
may be withdrawn each month or quarter under the Systematic Withdrawal Program
is $100. This Program may be terminated or modified by a shareholder or the Fund
at any time without charge or penalty.
9
<PAGE>
A withdrawal under the Systematic Withdrawal Program involves a redemption
of shares, and may result in a gain or loss for federal income tax purposes. In
addition, if the amount withdrawn exceed the dividends credited to the
shareholder's account, the account ultimately may be depleted.

HOW THE FUND'S PER SHARE VALUE IS DETERMINED

Portfolio securities are valued using current market values, if available.
Securities for which market quotations are not readily available are valued at
fair values as determined in good faith by or under the supervision of the
Trust's officers in accordance with methods which are specifically authorized by
the Board of Trustees. Short-term obligations with maturities of sixty days or
less are valued at amortized cost as reflecting fair value.

DISTRIBUTIONS AND TAXES

Dividends and Distributions. Dividends from net investment income are
declared and paid quarterly, shortly before the end of each calendar quarter.
Any net realized long-term capital gains not previously distributed and any
undistributed short-term capital gains earned during the Fund's fiscal year will
be distributed to shareholders following the conclusion of the Fund's fiscal
year (March 31), with a supplemental distribution on or about December 31 of any
additional undistributed capital gains earned during the 12-month period ended
October 31.

Dividends and capital gains distributions (net of any required tax
withholding) are automatically reinvested in additional shares of the Fund at
the net asset value per share on the reinvestment date unless the shareholder
has previously requested in writing to the Transfer Agent that payment be made
in cash.

Taxes. The Fund has qualified and elected to be treated as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986 (the
"Code"). As long as the Fund continues to qualify, and as long as the Fund
distributes all of its net investment income and net realized capital gains in
accordance with the timing requirements of the Code, the Fund will not be
subject to any federal or excise taxes. However, distributions made by the Fund
will be taxable to shareholders (other than tax-exempt entities), whether
received in shares (through dividend reinvestment ) or in cash. Distributions
derived from net investment income and short-term capital gains are taxable to
shareholders as ordinary income. A portion of such distributions may qualify for
the intercorporate dividends-received deduction. Distributions derived from
long-term capital gains are taxable as such regardless of the length of time
shares of the fund have been held. Although distributions are generally taxable
when received, certain distributions made in January are taxable as if received
the prior December. Shareholders will be informed annually of the amount and
nature of the Fund's distributions.

The Trust. The Trust was organized as a Massachusetts business trust on
February 17, 1987. The Agreement and Declaration of Trust permits the Board of
Trustees to issue an unlimited number of full and fractional shares of
beneficial interest, without par value, which may be issued in any number of
series. The Board of Trustees may from time to time issue other series, the
assets and liabilities of which will be separate and distinct from any other
series.

Shareholder Rights. Shares issued by the Fund have no preemptive,
conversion, or subscription rights. Shareholders have equal and exclusive rights
as to dividends and distributions as declared by the Fund and to the net assets
of the Fund upon liquidation or dissolution. The Fund, as a separate series of
the Trust, votes separately on matters affecting only the Fund (e.g., approval
of the Management Agreement); all series of the Trust vote as a single class on
matters affecting all series jointly or the Trust as a whole (e.g., election or
removal of Trustees). Voting rights are not cumulative, so that the holders of
more than 50% of the shares voting in any election of Trustees can, if they so
choose, elect all of the Trustees. While the Trust is not required and does not
intend to hold annual meetings of shareholders, such meetings may be called by
the Trustees in their discretion, or upon demand by the holders of 10% or more
of the outstanding shares of the Trust for the purpose of electing or removing
Trustees.

Performance Information. From time to time, the Fund may publish its total
return in advertisements and communications to investors. Total return
information will include the Fund's average annual compounded rate of return
over the most recent four calendar quarters, the past five years and from the
Fund's inception of operations. The Fund may also advertise aggregate and
average total return information over different periods of time. The Fund's
total return will be based upon the value of the shares acquired through a
hypothetical $1,000 investment (at the maximum public offering price) at the
beginning of the specified period and the net asset value of such shares at the
end of the period, assuming reinvestment of all distributions at net asset
value. Total return figures will reflect all recurring charges against Fund
income. Investors should note that the investment results of the Fund will
fluctuate over time, and any presentation of the Fund's total return for any
prior period should not be considered as a representation of what an investor's
total return may be in any future period.

Shareholder Inquiries. Shareholder inquiries should be directed to the
Transfer Agent at (800) 385-7003.

This Prospectus is not an offering of the securities herein described in any
state in which the offering is unauthorized. No salesman, dealer or other person
is authorized to give any information or make any representation other than
those contained in this Prospectus or in the Statement of Additional
Information.
11
<PAGE>
AVONDALE
TOTAL RETURN FUND

A fully managed
mutual fund
investing in equity and
higher quality fixed-income
securities, seeking the
combination of income
and capital appreciation
that will produce
maximum total return

PROSPECTUS

August 1, 1996
<PAGE>
Investment Manager

Herbert R. Smith, Incorporated
1105 Holliday
Wichita Falls, Texas 76301

Custodian

Star Bank, N.A.
425 Walnut Street
Cincinnati, Ohio 45202

Transfer Agent

American Data Services
24 West Carver Street
2nd Floor
Huntington, New York 11743

Auditors

Tait, Weller & Baker
2 Penn Center Plaza
Philadelphia, Pennsylvania 19102

Legal Counsel

Heller, Ehrman, White & McAuliffe
333 Bush Street
San Francisco, California 94104
<PAGE>
THE
OSTERWEIS
FUND

One Maritime Plaza, Suite 1201
San Francisco, CA 94111
(415) 434-4441

THE OSTERWEIS FUND (the "Fund") is a mutual fund with the investment objective
of attaining long term total returns. The Fund seeks to achieve its objective by
investing primarily in equity securities (common and preferred stocks).
Osterweis Capital Management, Inc. (the "Advisor"), serves as investment advisor
to the Fund.

This Prospectus sets forth basic information about the Fund that prospective
investors should know before investing. It should be read and retained for
future reference. The Fund is one of a series of Professionally Managed
Portfolios. A Statement of Additional Information dated August 1, 1996, as may
be amended from time to time, has been filed with the Securities and Exchange
Commission and is incorporated herein by reference. This Statement of Additional
Information is available without charge by calling the number listed above or
(800) 385-7003.

TABLE OF CONTENTS

Expense Table............................ 2

Financial Highlights..................... 3

Objective and Investment
Approach of the Fund.................. 4

Management of the Fund................... 7

How To Invest in the Fund................ 8

How To Redeem an
Investment in the Fund................ 10

Services Available to the
Fund's Shareholders................... 11

How the Fund's Per Share Value
Is Determined......................... 12

Distributions and Taxes.................. 12

General Information...................... 13

Appendix................................. 14

Prospectus dated August 1, 1996
1
<PAGE>

THE OSTERWEIS FUND (the "Fund") is a diversified series of Professionally
Managed Portfolios (the "Trust"), an open-end management investment company
offering redeemable shares of beneficial interest. Shares are purchased and
redeemed at their net asset value per share, without a sales charge. The minimum
initial investment is $100,000, with subsequent investments of $1,000 or more.

EXPENSE TABLE

Expenses are one of several factors to consider when investing in the Fund.
The purpose of the following fee table is to provide an understanding of the
various costs and expenses which may be borne directly or indirectly by an
investment in the Fund. Actual expenses may be more or less than those shown.
<TABLE>
<CAPTION>
<S> <C>
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases ............................................. None
Maximum Sales Load Imposed on Reinvested Dividends................................... None
Deferred Sales Load.................................................................. None
Redemption Fees...................................................................... None
Exchange Fee......................................................................... None

Annual Fund Operating Expenses (after waiver)*
(As a percentage of average net assets)
Management Fees...................................................................... 1.00%
12b-1 Fees........................................................................... None
Other Expenses....................................................................... 0.75%
----
Total Fund Operating Expenses........................................................ 1.75%*
====
</TABLE>
Example

This table illustrates the net transaction and operating expenses that would be
incurred by an investment in the Fund over different time periods assuming a
$1,000 investment, a 5% annual return, and redemption at the end of:
<TABLE>
<CAPTION>
<S> <C>
One year............................................................................. $ 18
Three years.......................................................................... $ 55
Five years........................................................................... $ 95
Ten years............................................................................ $206
</TABLE>
*The Advisor has undertaken to limit the operating expenses of the Fund to
1.75% of average net assets until a date following advance notice to
shareholders. In the absence of such limitation, the Fund's expenses would have
amounted to 1.77% of average net assets during the fiscal year ended March 31,
1996.

The following information has been audited by Ernst & Young L.L.P.,
independent accountants, whose unqualified report covering the fiscal period
ended March 31, 1996 is incorporated by reference herein and appears in the
annual report to shareholders. This information shoud be read in conjunction
with the financial statements and accompanying notes thereto which appear in the
annual report and are incorporated by reference into the Statement of Additional
Information. Further information about the Fund's performance may be included in
its annual report, which may be obtained without charge by writing or calling
the address or telephone number on the Prospectus cover page.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Year Year October 1, 1993*
Ended Ended through
March 31,1996 March 31,1995 March 31,1994
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period ............................ $10.33 $10.28 $10.00
Income from investment operations:
Net investment income ..................................... .12 .28 .08
Net realized and unrealized gain on investments ........... 1.48 .11 .22
------ ------ ------
Total from investment operations................................. 1.60 .39 .30
------ ------ ------

Less distributions:
Dividends from net investment income....................... (.19) (.25) (.02)
Distributions from net capital gains ...................... -0- (.09) -0-
------ ------ ------
Total distributions.............................................. (.19) (.34) (.02)
------ ------ ------
Net asset value, end of period .................................. $11.74 $10.33 $10.28
====== ====== =======

Total return .................................................... 15.59% 3.91% 6.29%+

Ratios/supplemental data:
Net assets, end of period (millions)............................. $ 16.9 $ 9.8 $ 5.1
Ratio of expenses to average net assets:
Before expense reimbursement .............................. 1.77% 2.32% 3.73%+
After expense reimbursement................................ 1.75% 1.74% 1.75%+
Ratio of net investment income to average net assets:
Before expense reimbursement .............................. 1.47% 2.74% 0.42%+
After expense reimbursement ............................... 1.49% 3.32% 2.40%+
Portfolio turnover rate ......................................... 57.31% 28.65% 34.97%
</TABLE>

*Commencement of operations.

+Annualized.
3
<PAGE>
OBJECTIVE AND INVESTMENT APPROACH OF THE FUND
The investment objective of the Fund is to attain long-term total returns. The
Fund seeks to achieve its objective by investing primarily in equity securities.
There is, of course, no assurance that the Fund's objective will be achieved.
Because prices of the securities held by the Fund will fluctuate, the value of
an investment in the Fund will vary as the market value of its investment
portfolio changes. In addition to common stocks, equity securities purchased for
the Fund may include preferred stocks, convertible preferred stocks and
warrants.

Investment Approach. The Advisor selects equity securities for the Fund which it
believes offer superior investment value. The Advisor focuses on the securities
of companies which it believes to be undervalued or otherwise out-of-favor in
the market. The stock prices of such companies may be depressed by visible
near-term problems and not reflective of the companies' longer term prospects.
The Advisor places particular emphasis on the analysis of a company's ability to
generate cash and its management's deployment of this cash.

The Advisor also seeks under- researched, high growth situations that it
believes can be purchased for modest multiples as well as companies with
substantial, unrecognized assets and improving earnings prospects. As such
companies achieve greater visibility and their stocks are accorded valuations
more in line with their growth rates, the Advisor is inclined to regard them as
candidates for sale, in order to reduce the risk of future earnings
disappointments.

Although equity securities are the primary focus for the Fund, the Advisor may
also purchase fixed income securities and convertible bonds for the Fund's
portfolio in pursuing its goal of long-term total return. The Advisor prefers to
purchase fixed income securities during times of high real interest rates or
when it believes that the outlook for the equity markets is sufficiently
unsettled to warrant building yield into the Fund's portfolio.

Fixed income securities eligible for purchase by the Fund include investment
grade corporate debt securities, those rated BBB or better by Standard & Poor's
Corporation ("S&P") or Baa or better by Moody's Investors Service ("Moody's").
Securities rated BBB by S&P are considered investment grade, but Moody's
considers securities rated Baa to have speculative characteristics. The Fund
also may invest up to 5% of its assets in mortgage-related securities. See the
Statement of Additional Information.

The Fund may invest in corporate debt securities that are rated below investment
grade, but will limit that investment to no more than 30% of its total assets.
Such securities, sometimes referred to as junk bonds, typically carry higher
coupon rates than investment grade securities but also are described as
speculative by both Moody's and S&P. They may be subject to greater market price
fluctuations, less liquidity, and greater risk of income or principal, including
a greater possibility of default
4
<PAGE>
or bankruptcy of the issuer of such securities, than are more highly rated debt
securities. Lower rated fixed income securities also are likely to be more
sensitive to adverse economic or company developments. During periods of
economic downturn or rising interest rates, highly leveraged issuers of lower
rated securities may experience financial stress which could adversely affect
their ability to make payments of interest and principal and increase the
possibility of default. In addition, the market for lower rated debt securities
has expanded rapidly in recent years, and its growth paralleled a long economic
expansion. At times in recent years, the prices of many lower rated debt
securities declined substantially, reflecting an expectation that many issuers
of such securities might experience financial difficulties. There can be no
assurance that such declines will not recur. The market for lower rated debt
issues generally is thinner and less active than that for higher quality
securities, which may limit the Fund's ability to sell such securities at fair
value in response to changes in the economy or financial markets. Adverse
publicity and investor perception, whether or not based on fundamental analysis,
may also decrease the values and liquidity of lower rated securities, especially
in a thinly traded market.

The Advisor seeks to reduce the risks associated with investing in such
securities by limiting the Fund's holdings in such securities and by the depth
of its own credit analysis. The Fund will not invest in such securities rated
below B by S&P or Moody's. In selecting below investment grade securities, the
Advisor seeks securities in companies with improving cash flows and balance
sheet prospects and whose credit ratings the Advisor views as likely to be
upgraded. The Advisor believes that such securities can produce returns similar
to equities, but with less risk. See the Appendix for a description of Moody's
and S&P ratings.

Repurchase Agreements. The Fund may enter into repurchase agreements in order to
earn additional income on available cash, or as a defensive investment in
periods when the Fund is invested primarily in short-term maturities. A
repurchase agreement is a short-term investment in which the purchaser (i.e.,
the Fund) acquires ownership of a U.S. Government security (which may be of any
maturity) and the seller agrees to repurchase the obligation at a future time at
a set price, thereby determining the yield during the purchaser's holding period
(usually not more than seven days from the date of purchase). Any repurchase
transaction in which the Fund engages will require full collateralization of the
seller's obligation during the entire term of the repurchase agreement. In the
event of a bankruptcy or other default of the seller, the Fund could experience
both delays in liquidating the underlying security and losses in value. However,
the Fund intends to enter into repurchase agreements only with banks with assets
of $500 million or more that are insured by the Federal Deposit Insurance
Corporation and the most creditworthy registered securities dealers pursuant to
procedures adopted and regularly
5
<PAGE>
reviewed by the Trust's Board of Trustees. The Advisor monitors the
creditworthiness of the banks and securities dealers with whom the Fund engages
in repurchase transactions.

Illiquid and Restricted Securities. The Fund may not invest more than 15% of its
net assets in illiquid securities, including (i) securities for which there is
no readily available market; (ii) securities the disposition of which would be
subject to legal restrictions (so-called "restricted securities"); and (iii)
repurchase agreements having more than seven days to maturity. A considerable
period of time may elapse between the Fund's decision to dispose of such
securities and the time when the Fund is able to dispose of them, during which
time the value of the securities could decline. Restricted securities do not
include those which meet the requirements of Securities Act Rule 144A and which
the Trustees have determined to be liquid based on the applicable trading
markets.

Foreign Securities. The Fund may invest up to 20% of its total assets in
securities of foreign issuers. The Advisor usually buys securities of leading
foreign companies that have well recognized franchises and are selling at a
discount to the securities of similar domestic businesses. There may be less
publicly available information about these issuers than is available about
companies in the U.S., and foreign auditing requirements may not be comparable
to those in the U.S. In addition, the value of the foreign securities may be
adversely affected by movements in the exchange rates between foreign currencies
and the U.S. dollar, as well as other political and economic developments,
including the possibility of expropriation, confiscatory taxation, exchange
controls or other foreign governmental restrictions. Dividends and interest on
foreign securities may be subject to foreign withholding taxes. The Fund may
also invest without limit in securities of foreign issuers which are listed and
traded on a U.S. national securities exchange.

Options and Futures. The Fund has the ability to invest up to 5% of its assets
in options, futures and options on futures, but has no present intention of
using such instruments. See the Statement of Additional Information for further
information regarding characteristics of and risks involved in the use of these
instruments.

U.S. Government Securities. The Fund may invest in U.S. Government securities.
U.S. Government securities include direct obligations issued by the U.S.
Treasury, such as Treasury bills, certificates of indebtedness, notes and bonds.
U.S. Government agencies and instrumentalities that issue or guarantee
securities include, but are not limited to, the Federal National Mortgage
Association ("FNMA"), Government National Mortgage Association ("GNMA"), Federal
Home Loan Banks, Federal Financing Bank, and Student Loan Marketing Association.

All Treasury securities are backed by the full faith and credit of the United
States. Obligations of U.S. Government agencies and instrumentalities may or may
not be supported by the full faith and credit of the United States. Some,
6
<PAGE>
such as the Federal Home Loan Banks, are backed by the right of the agency or
instrumentality to borrow from the U.S. Treasury. Others, such as securities
issued by FNMA, are supported only by the credit of the instrumentality and not
by the U.S. Treasury. If the securities are not backed by the full faith and
credit of the United States, the owner of the securities must look principally
to the agency issuing the obligation for repayment and may not be able to assert
a claim against the United States in the event that the agency or
instrumentality does not meet its commitment. Investment Restrictions. The Fund
has adopted certain investment restrictions, which are described fully in the
Statement of Additional Information. Like the Fund's investment objective,
certain of these restrictions are fundamental and may be changed only by a
majority vote of the Fund's outstanding shares.
- --------------------------------------------------------------------------------
MANAGEMENT OF THE FUND
The Board of Trustees of the Trust establishes the Fund's policies and
supervises and reviews the management of the Fund. Osterweis Capital Management,
Inc., acts as the Fund's Advisor, and has been in the investment advisory
business since 1983. The Advisor provides investment advisory services to
individual and institutional accounts with a value in excess of $700,000,000.
Mr. John S. Osterweis, President and Director of the Advisor, is principally
responsible for the management of the Fund's portfolio. He has over twenty years
of securities analysis and portfolio management experience.

The Advisor provides the Fund with advice on buying and selling securities,
manages the investments of the Fund, furnishes the Fund with office space and
certain administrative services, and provides most of the personnel needed by
the Fund. As compensation, the Fund pays the Advisor a monthly management fee
(accrued daily) based upon the average daily net assets of the Fund at the rate
of 1.00% annually. Investment Company Administration Corporation (the
"Administrator") acts as the Fund's Administrator under an Administration
Agreement. Under that agreement, the Administrator prepares various federal and
state regulatory filings, reports and returns for the Fund, prepares reports and
materials to be supplied to the Trustees, monitors the activities of the Fund's
custodian, transfer agent and accountants, and coordinates the preparation and
payment of Fund expenses and reviews the Fund's expense accruals. For its
services, the Administrator receives a monthly fee at the following annual rate:

Average Net Assets Fee or Fee Rate
- ------------------ ---------------
Under $15 million $30,000
$15 to $50 million 0.20%
$50 to $100 million 0.15%
$100 to $150 million 0.10%
Over $150 million 0.05%

The Fund is responsible for its own operating expenses, including, but not
limited to, the advisory and administrative management fees, custody and
transfer agent fees, legal and auditing expenses, federal and state registration
fees, and fees to the Trust's
7
<PAGE>
disinterested Trustees. The Advisor has agreed to reduce its fees or reimburse
the Fund for its annual operating expenses which exceed the most stringent
limits prescribed by any state in which the Fund's shares are offered for sale.
The Advisor also may reduce its fees, make payments on behalf of the Fund for
expenses which are the Fund's obligation under the Advisory agreement, or
reimburse additional amounts to the Fund at any time in order to reduce the
Fund's expenses. In this regard, the Advisor currently has undertaken to limit
the Fund's operating expenses to 1.75% of average net assets. Any such
reductions made by the Advisor in its fees or payments or reimbursement of
expenses which are the Fund's obligation are subject to reimbursement by the
Fund within the following three years provided the Fund is able to effect such
reimbursement and remain in compliance with applicable expense limitations.

The Advisor considers a number of factors in determining which brokers or
dealers to use for the Fund's portfolio transactions. While these are more fully
discussed in the Statement of Additional Information, the factors include, but
are not limited to, the reasonableness of commissions, quality of services and
execution, and the availability of research which the Advisor may lawfully and
appropriately use in its investment management and advisory capacities. Provided
the Fund receives prompt execution at competitive prices, the Advisor may also
consider the sale of Fund shares as a factor in selecting broker-dealers for the
Fund's portfolio transactions.
- --------------------------------------------------------------------------------
HOW TO INVEST IN THE FUND
The minimum initial investment is $100,000. Subsequent investments must be at
least $1,000. First Fund Distributors, Inc. (the "Distributor"), acts as
Distributor of the Fund's shares. The Distributor may, at its discretion, waive
the minimum investment requirements. In addition to cash purchases, shares may
be purchased by tendering payment in kind in the form of shares of stock, bonds
or other securities, provided that any such tendered security is readily
marketable, its acquisition is consistent with the Fund's investment objective
and the tendered security is otherwise acceptable to the Fund's Advisor.
Purchasing shares in this manner will cause the investor to realize a capital
gain or loss on each security tendered. The investor must also agree to pay the
brokerage commissions on the sale of any security so tendered if it is sold by
the Fund within 90 days of acquisition.

Investors may purchase shares of the Fund by check or wire:

By check:

Initial Investment. Complete the Fund's Account Application (included with this
Prospectus). Make your check payable to "The Osterweis Fund." Mail or deliver
the completed Account Application and your check to:

The Osterweis Fund
P.O. Box 856
Cincinnati, OH 45264-0856
8
<PAGE>
A purchase order sent by overnight mail should be sent to:

The Osterweis Fund
24 West Carver Street, 2nd Floor
Huntington, NY 11743

Subsequent Investments. Detach and complete the stub attached to your account
statement. Make your check payable to "The Osterweis Fund." Write your
shareholder account number on the check. Mail or deliver the check and
reinvestment form to the Fund in the envelope provided or send to the Fund at
the address indicated above.

By wire:
Initial Investment. Before wiring funds, call the Transfer Agent at (800)
385-7003 between the hours of 9:00 a.m. to 4:00 p.m. Eastern time on a day when
the New York Stock Exchange is open for trading to advise the Transfer Agent
that you intend to make an initial investment by wire and to receive an account
number. Provide the Transfer Agent with your name, and the dollar amount to be
invested.

Request your bank to transmit immediately available funds by wire for purchase
of shares in your name to the Fund's Custodian, as follows:

Star Bank, N.A. Cinti/Trust
ABA Routing Number: 0420-0001-3
The Osterweis Fund DDA #483898003
(Account name and number]

Subsequent Investments. For subsequent investments an investor should call the
Transfer Agent at (800) 385-7003 before the wire is sent. Failure to do so will
cause the purchase to be credited the next day, when the Transfer Agent receives
notice of the wire. Instruct your bank to wire funds as indicated above. It is
not necessary to contact the Transfer Agent prior to making subsequent
investments by wire. It is essential that complete information regarding your
account be included in all wire instructions in order to facilitate prompt and
accurate handling of investments. Investors may obtain further information about
remitting funds in this manner from the Transfer Agent, and any fees that may be
imposed by their own banks.

General. Investors will not be permitted to redeem any shares purchased with an
initial investment made by wire until one business day after the completed
Account Application is received by the Fund. All investments must be made in
U.S. dollars and, to avoid fees and delays, checks should be drawn only on U.S.
banks and should not be made by third party check. A charge may be imposed if
any check used for investment does not clear. The Fund and the Distributor
reserve the right to reject any purchase order in whole or in part.

If an order to purchase shares, together with payment in proper form, is
received by the Transfer Agent by the close of trading on the New York Stock
Exchange (currently 4:00 p.m., Eastern time), Fund shares will be purchased at
the offering price determined as of the close of trading on that day. Otherwise,
9
<PAGE>
Fund shares will be purchased at the offering price determined as of the close
of trading on the New York Stock Exchange on the next business day.

Federal tax law requires that investors provide a certified Taxpayer
Identification Number and certain other required certifications upon opening or
reopening an account in order to avoid backup withholding of taxes at the rate
of 31% on taxable distributions and proceeds of redemptions. See the Fund's
Account Application for further information concerning this requirement.

The Fund does not issue share certificates. All shares are held in
non-certificated form registered on the books of the Fund and the Fund's
Transfer Agent for the account of the shareholder.
- --------------------------------------------------------------------------------
HOW TO REDEEM AN INVESTMENT IN THE FUND
A shareholder has the right to have the Fund redeem all or any portion of his
outstanding shares at their current net asset value on each day the New York
Stock Exchange is open for trading. Redemption requests should be sent to The
Osterweis Fund, 24 West Carver Street, 2nd Floor, Huntington, NY 11743. The
redemption price is the net asset value per share next determined after the
shares are validly tendered for redemption.

Direct Redemption. A written request for redemption must be received by the
Fund's Transfer Agent in order to constitute a valid tender for redemption. To
protect the Fund and its shareholders, a signature guarantee is required for
certain transactions, including redemptions. Signature(s) on the redemption
request must be guaranteed by an "eligible guarantor institution" as defined in
the federal securities laws; these institutions include banks, broker-dealers,
credit unions and savings institutions. A broker-dealer guaranteeing signatures
must be a member of a clearing corporation or maintain net capital of at least
$100,000. Credit unions must be authorized to issue signature guarantees.
Signature guarantees will be accepted from any eligible guarantor institution
which participates in a signature guarantee program. A notary public is not an
acceptable guarantor.

Telephone Redemption. Shareholders who complete the Redemption by Telephone
portion of the Fund's Account Application may redeem shares on any business day
the New York Stock Exchange is open by calling the Fund's Transfer Agent at
(800) 385-7003 before 4:00 p.m. Eastern time. Redemption proceeds will be mailed
or wired at the shareholder's direction the next business day to the
predesignated account. The minimum amount that may be wired is $1,000 (wire
charges, if any, will be deducted from redemption proceeds).

By establishing telephone redemption privileges, a shareholder authorizes the
Fund and its Transfer Agent to act upon the instruction of any person by
telephone to redeem from the account for which such service has been authorized
and transfer the proceeds to the bank account designated in the Authorization.
The Fund and the
10
<PAGE>
Transfer Agent will use procedures to confirm that redemption instructions
received by telephone are genuine, including recording of telephone instructions
and requiring a form of personal identification before acting on such
instructions. Neither the Fund nor the Transfer Agent will be liable for any
loss, expense, or cost arising out of any telephone redemption request,
including any fraudulent or unauthorized requests that are reasonably believed
to be genuine, provided that such procedures are followed. The Fund may change,
modify, or terminate these privileges at any time upon at least 60 days' notice
to shareholders.

General. Payment of the redemption proceeds will be made promptly, but not later
than seven days after the receipt of all documents in proper form, including a
written redemption order with appropriate signature guarantee in cases where
telephone redemption privileges are not being utilized. The Fund may suspend the
right of redemption under certain extraordinary circumstances in accordance with
the rules of the Securities and Exchange Commission. In the case of shares
purchased by check and redeemed shortly after purchase, the Fund will not mail
redemption proceeds until it has been notified that the check used for the
purchase has been collected, which may take up to 15 days from the purchase
date. To minimize or avoid such delay, investors may purchase shares by
certified check or federal funds wire. A redemption may result in recognition of
a gain or loss for federal income tax purposes.

Due to the relatively high cost of maintaining smaller accounts, the Fund
reserves the right to redeem shares in any account, other than retirement plan
or Uniform Gifts/Transfers to Minors Acts accounts, if at any time, due to
redemptions by the shareholder, the total value of a shareholder's account does
not equal at least $1,500. If the Fund determines to make such an involuntary
redemption, the shareholder will first be notified that the value of his account
is less than $1,500 and will be allowed 30 days to make an additional investment
to bring the value of his account to at least $1,500 before the Fund takes any
action.
- --------------------------------------------------------------------------------
SERVICES AVAILABLE TO THE FUND'S SHAREHOLDERS
Retirement Plans. The minimum initial investment for such plans is $100,000,
with minimum subsequent investments of $1,000. The Fund offers a prototype
Individual Retirement Account ("IRA") plan, and information is available from
the Distributor or from securities dealers with respect to Keogh, Section 403(b)
and other retirement plans offered. Investors should consult a tax advisor
before establishing any retirement plan.

Check-A-Matic Plan. For the convenience of shareholders, the Fund
11
<PAGE>
offers a preauthorized check service under which a check is automatically drawn
on the shareholder's personal checking account each month for a predetermined
amount (but not less than $250). Upon receipt of the check, the Fund
automatically invests the money in additional shares of the Fund at the current
offering price. Applications for this service are available from the
Distributor. There is no charge by the Fund for this service. The Distributor
may terminate or modify this privilege at any time, and shareholders may
terminate their participation by notifying the Transfer Agent in writing.

A withdrawal under the Systematic Withdrawal Program involves a redemption of
shares, and may result in a gain or loss for federal income tax purposes. In
addition, if the amount withdrawn exceed the dividends credited to the
shareholder's account, the account ultimately may be depleted.

HOW THE FUND'SPER SHARE VALUE IS DETERMINED
The net asset value of a Fund share is determined once daily as of the close of
public trading on the New York Stock Exchange (currently 4:00 p.m., Eastern
time) on each day the New York Stock Exchange is open for trading. Net asset
value per share is calculated by dividing the value of the Fund's total assets,
less its liabilities, by the number of Fund shares outstanding.

Portfolio securities are valued using current market values, if available.
Securities for which market quotations are not readily available are valued at
fair values as determined in good faith by or under the supervision of the
Trust's officers in accordance with methods which are specifically authorized by
the Board of Trustees. Short-term obligations with remaining maturities of sixty
days or less are valued at amortized cost as reflecting fair value.

DISTRIBUTIONS AND TAXES
Dividends and Distributions. Dividends from net income are declared and paid at
least annually, typically after the end of the Fund's fiscal year. Any net
capital gains realized during the Fund's fiscal year will also be distributed to
shareholders in June, with a supplemental distribution in December of any
undistributed net capital gains earned during the 12-month period ended each
October 31.
12
<PAGE>
Dividends and capital gain distributions (net of any required tax withholding)
are automatically reinvested in additional shares of the Fund at the net asset
value per share on the reinvestment date unless the shareholder has previously
requested in writing to the Transfer Agent that payment be made in cash.

Any dividend or distribution paid by the Fund has the effect of reducing the net
asset value per share on the reinvestment date by the amount of the dividend or
distribution. Investors should note that a dividend or distribution paid on
shares purchased shortly before such dividend or distribution was declared will
be subject to income taxes as discussed below even though the dividend or
distribution represents, in substance, a partial return of capital to the
shareholder.

Taxes. The Fund intends to qualify and elect to be treated as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986 (the
"Code"). As long as the Fund continues to qualify, and as long as the Fund
distributes all of its income each year to the shareholders, the Fund will not
be subject to any federal or excise taxes. The distributions made by the Fund
will be taxable to shareholders whether received in shares (through dividend
reinvestment) or in cash. Distributions derived from net investment income,
including net short-term capital gains, are taxable to shareholders as ordinary
income. A portion of these distributions may qualify for the dividends-received
deduction. Distributions designated as capital gains dividends are taxable as
long-term capital gains regardless of the length of time shares of the Fund have
been held. Although distributions are generally taxable when received, certain
distributions made in January are taxable as if received the prior December.
Shareholders will be informed annually of the amount and nature of the Fund's
distributions.

Additional information about taxes is set forth in the Statement of Additional
Information. Shareholders should consult their own advisers concerning federal,
state and local taxation of distributions from the Fund.
- --------------------------------------------------------------------------------
GENERAL INFORMATION
The Trust. The Trust was organized as a Massachusetts business trust on February
17, 1987. The Agreement and Declaration of Trust permits the Board of Trustees
to issue an unlimited number of full and fractional shares of beneficial
interest, without par value, which may be issued in any number of series. The
Board of Trustees may from time to time issue other series, the assets and
liabilities of which will be separate and distinct from any other series. The
fiscal year of the Fund ends on March 31.

Shareholder Rights. Shares issued by the Fund have no preemptive, conversion or
subscription rights. Shareholders have equal and exclusive rights as to
dividends and distributions as declared by the Fund and to the net assets of the
Fund upon liquidation or dissolution. The Fund, as a separate series of the
Trust, votes separately on
13
<PAGE>
matters affecting only the Fund (e.g., approval of the Advisory and
Administrative Management Agreements); all series of the Trust vote as a single
class on matters affecting all series jointly or the Trust as a whole (e.g.,
election or removal of Trustees). Voting rights are not cumulative, so that the
holders of more than 50% of the shares voting in any election of Trustees can,
if they so choose, elect all of the Trustees. While the Trust is not required
and does not intend to hold annual meetings of shareholders, such meetings may
be called by the Trustees in their discretion, or upon demand by the holders of
10% or more of the outstanding shares of the Trust for the purpose of electing
or removing Trustees.

Performance Information. From time to time, the Fund may publish its total
return in advertisements and communications to investors. Total return
information will include the Fund's average annual compounded rate of return
over the most recent four calendar quarters and over the period from the Fund's
inception of operations. The Fund may also advertise cumulative and average
total return information over different periods of time. The Fund's total return
will be based upon the value of the shares acquired through a hypothetical
$1,000 investment at the beginning of the specified period and the net asset
value of such shares at the end of the period, assuming reinvestment of all
distributions. Total return figures will reflect all recurring charges against
Fund income. Investors should note that the investment results of the Fund will
fluctuate over time, and any presentation of the Fund's total return for any
prior period should not be considered as a representation of what an investor's
total return may be in any future period.

Shareholder Inquiries. Shareholder inquiries should be directed to the Fund at
the number shown on the cover of the Prospectus.
- --------------------------------------------------------------------------------
APPENDIX
Description of Bond Ratings*
Moody's Investors Service
- -------------------------

Aaa: Bonds rated Aaa 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. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
Aa: Bonds rated Aa are judged to be of high quality by all standards. Together
with the Aaa group they comprise what are generally known as high-grade bonds.
They are rated lower than the best bonds because margins of protection may not
be as large as in Aaa securities or fluctuations or protective elements may be
of greater amplitude or there may be other elements present which make long-term
risks appear somewhat larger than in Aaa securities.
A: Bonds rated A possess many favorable investment attributes and are to be
considered as upper-medium
14
<PAGE>
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: Bonds rated Baa are considered as medium grade obligations, i.e., they are
neither highly protected nor poorly secured. Interest payments and principal
security appear adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
Ba: Bonds rated Ba are judged to have speculative elements: their future cannot
be considered as well assured. Often the protection of interest and principal
payments may be very moderate and thereby not well safeguarded during both good
and bad times over the future. Uncertainly of position characterizes bonds in
this class.
B: Bonds rated B 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. Standard & Poor's
Corporation
- --------------------------------------------------------------------------------
AAA: Bonds rated AAA are highest grade debt obligations. This rating indicates
an extremely strong capacity to pay principal and interest.
AA: Bonds rated AA also qualify as high-quality debt obligations. Capacity to
pay principal and interest is very strong, and in the majority of instances they
differ from AAA issues only in a small degree.
A: Bonds rated A have a strong capacity to pay principal and interest, although
they are more susceptible to the adverse effects of change in circumstances and
economic conditions.
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay principal and interest for bonds in
this category than for bonds in the A category.
BB and B: Bonds rated BB and B are regarded, on balance, as predominately
speculative with respect to the issuer's capacity to pay interest and principal
in accordance with the terms of the obligation. BB indicates a lower degree of
speculation than B. While such bonds will likely have some quality of protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions.

The ratings may be modified by the addition of a plus or minus sign to show
relative standing within the major rating categories.

*Ratings are generally given to securities at the time of issuance. While the
rating agencies may from time-to-time revise such ratings, they undertake no
obligation to do so.
15
<PAGE>

Advisor
Osterweis Capital Management, Inc.
One Maritime Plaza, Suite 1201
San Francisco, California 94111

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

Distributor
First Fund Distributors, Inc.
4455 E. Camelback Road, Suite 261E
Phoenix, Arizona 85018

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

Custodian
Star Bank, N.A.
425 Walnut Street
Cincinnati, Ohio 45202

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

Transfer Agent
American Data Services
24 West Carver Street
2nd Floor
Huntington, New York 11743

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

Auditors
Ernst & Young LLP
515 South Flower Street
Los Angeles, California 90071

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

Legal Counsel
Heller, Ehrman, White & McAuliffe
333 Bush Street
San Francisco, California 94104

[LOGO]

Prospectus

August 1, 1996
<PAGE>
UAM/FPA CRESCENT FUND
11400 West Olympic Blvd., Suite 1200
Los Angeles, California 90064
(800) 385-7003

UAM/FPA CRESCENT FUND (the "Fund") is a mutual fund with the investment
objective of providing, through a combination of income and capital
appreciation, a total return consistent with reasonable investment risk. The
Fund seeks to achieve its objective by investing primarily in equity securities
(common and preferred stocks) and fixed income obligations. First Pacific
Advisors, Inc. (the "Advisor") serves as investment advisor to the Fund.

A proposal is currently pending to reorganize the Fund as a new series of
the UAM Funds. If this reorganization proposal is approved, the Fund will become
part of the UAM Funds on October 1, 1996. See Page 13 for additional details.

This Prospectus sets forth basic information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. The Fund is a series of Professionally Managed
Portfolios. A Statement of Additional Information dated August 1, 1996, as may
be amended from time to time, has been filed with the Securities and Exchange
Commission and is incorporated herein by reference. This Statement of Additional
Information is available without charge upon request to the Fund at the address
or telephone number given above.

TABLE OF CONTENTS

Expense Table.................................................. 2
Financial Highlights........................................... 3
Objective and Investment Approach of the Fund.................. 4
Management of the Fund......................................... 8
How To Invest in the Fund...................................... 9
How To Redeem an Investment in the Fund........................ 10
Services Available to the Fund's Shareholders.................. 11
How the Fund's Per Share Value Is Determined................... 11
Distribution and Taxes......................................... 12
General Information............................................ 12

Prospectus dated August 1, 1996
<PAGE>
EXPENSE TABLE

Expenses are one of several factors to consider when investing in the
Fund. The purpose of the following fee table is to provide an understanding of
the various costs and expenses which may be borne directly or indirectly by an
investment in the Fund. Actual expenses may be more or less than those shown.
<TABLE>
<CAPTION>
Shareholder Transaction Expenses
<S> <C>
Maximum Sales Load Imposed on Purchases.................................................... None
Maximum Sales Load Imposed on Reinvested Dividends......................................... None
Deferred Sales Load........................................................................ None
Redemption Fees............................................................................ None
Exchange Fee............................................................................... None

Annual Fund Operating Expenses
(As a percentage of average net assets)
Management Fees............................................................................ 1.00%
12b-1 Fees................................................................................. None
Other Expenses............................................................................. 0.59%
----
Total Fund Operating Expenses.............................................................. 1.59%
====
</TABLE>

Example 1 Year 3 Years 5 Years 10 Years

The Example shown above should not be considered a representation of past
or future expenses and actual expenses may be greater or less than those shown.
In addition, Federal regulations require the Example to assume a 5% annual
return, but the Fund's actual return may be higher or lower. See "Management of
the Fund."

UAM/FPA CRESCENT FUND (the "Fund") is a diversified series of
Professionally Managed Portfolios (the "Trust"), an open-end management
investment company offering redeemable shares of beneficial interest. Shares are
purchased and redeemed at their net asset value per share, without an initial
sales charge. The minimum initial investment is $5,000, with subsequent minimum
investments of $500 or more ($2,000 and $200, respectively, for retirement
plans).
2
<PAGE>
FINANCIAL HIGHLIGHTS
For a capital share outstanding throughout the period.

Year Ended Year Ended June 2, 1993*
March 31, March 31, through
1996 1995 March 31, 1994
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period .................................. $11.23 $10.96 $10.00
------ ------ ------
Income from investment operations:
Net investment income ........................................... .40 .21 .13
Net realized and unrealized gain on investments ................. 2.29 .77 .99
------ ------ ------
Total from investment operations....................................... 2.69 .98 1.12
------ ------ ------
Less distributions:
Dividends from net investment income............................. (.37) (.18) (.10)
Distributions from net capital gains ............................ (.88) (.53) (.06)
------ ------ ------
Total distributions.................................................... (1.25) (.71) (.16)
------ ------ ------
Net asset value, end of period ........................................ $12.67 $11.23 $10.96
====== ====== ======
Total return .......................................................... 24.71% 9.35% 13.73%+
Ratios/supplemental data:
Net assets, end of period (millions).................................. $ 22.0 $ 16.0 $ 10.2
Ratio of expenses to average net assets:
Before expense reimbursement .................................... 1.59% 1.65% 1.86%+
After expense reimbursement...................................... 1.59% 1.65% 1.85%+
Ratio of net investment income to average net assets:
Before expense reimbursement .................................... 3.35% 2.16% 1.60%+
After expense reimbursement ..................................... 3.35% 2.16% 1.61%+
Portfolio turnover rate ............................................... 99.98% 101.41% 88.88%
</TABLE>

*Commencement of operations.

+Annualized.
3
<PAGE>
OBJECTIVE AND INVESTMENT APPROACH OF THE FUND

The investment objective of the Fund is to provide, through a combination
of income and capital appreciation, a total return consistent with reasonable
investment risk. The Fund seeks to achieve its objective by investing in a
combination of equity securities and fixed income obligations. There is, of
course, no assurance that the Fund's objective will be achieved. Because prices
of common stocks and fixed-income securities fluctuate, the value of an
investment in the Fund will vary, as the market value of its investment
portfolio changes.

Investment Approach-Equity Securities. The Advisor selects equity
securities for the Fund which it believes offer superior investment value. The
Advisor looks for securities of quality companies with characteristics such as:

o Projected corporate earnings growth rate exceeding that of the stock
market average

o High return on capital

o Solid balance sheet

o Meaningful cash flow

o High relative profit margin

o Increasing dividend

o Active share repurchase program

o Superior management, seeking to maximize shareholder value

In the Advisor's view, the stock market prices securities efficiently in
the long term, rewarding companies who successfully grow their earnings and
penalizing those who do not. The Advisor's investment philosophy is based on the
conviction that the market valuation of securities is often inefficient in the
short term. When reacting to current economic or company information, investors
frequently make purchase or sale decisions hastily. These decisions could cause
a particular security, industry group or the entire market to become underpriced
or overpriced in the short term thereby creating an excellent opportunity to
either buy or sell.

Fundamental analysis is the foundation of the Advisor's investment
approach. The Advisor makes use of computer screens, company reports, research
and personal contacts to determine the prospects for a particular industry or
company. Specific considerations affecting an industry or company are reviewed,
as well as macroeconomic factors affecting financial markets.

In addition to common stocks, equity securities purchased for the Fund may
include preferred stocks, convertible preferred stocks and warrants.

Investment Approach-Fixed Income Obligations. Through fixed-income
investments, the Advisor seeks a reliable and recurring stream of income for the
Fund, while preserving its capital. The Advisor attempts to identify the current
interest rate and invest funds accordingly. Usually, a defensive strategy is
employed, with investments made at different points along the yield curve in an
attempt to keep the average maturity of fixed-income investments less than or
equal to ten years.

The Advisor's approach is to invest in U.S. Treasury obligations, U.S.
Government Agency and mortgage-backed securities, corporate and convertible
bonds. The Advisor considers yield spread relationships and their underlying
factors such as credit quality, investor perception and liquidity on a
continuous basis to determine which sector offers the best investment value.

The Fund may purchase investment grade corporate debt securities.
Securities rated BBB by Standard & Poor's Corporation ("S&P") or Moody's
Investors Service ("Moody's") are investment grade, but Moody's
4
<PAGE>
considers securities rated Baa to have speculative characteristics. Changes in
economic conditions or other circumstances are more likely to lead to a weakened
capacity for such securities to make principal and interest payments than is the
case for higher-rated debt securities.

Lower Rated Securities. The Fund may invest in debt securities that are
rated below investment grade, but will limit that investment to no more than 20%
of its assets. Such securities, sometimes referred to as "junk bonds," typically
carry higher coupon rates than investment grade securities but also involve
higher risks and are described as speculative by both Moody's and S&P. They may
by subject to greater market price fluctuations, less liquidity, and greater
risk of income or principal, including a greater possibility of default or
bankruptcy of the issuer of such securities, than are more highly rated debt
securities. Lower rated fixed income securities also are likely to be more
sensitive to adverse economic or company developments and more subject to price
fluctuations in response to changes in interest rates. The market for
lower-rated debt issues generally is thinner and less active than that for
higher quality securities, which may limit the Fund's ability to sell such
securities at fair value in response to changes in the economy or financial
markets.

The Advisor seeks to reduce the risk associated with investing in such
securities by limiting the Fund's holdings in such securities and by the depth
of its own credit analysis. In selecting below investment grade securities, the
Advisor seeks securities in companies with improving cash flows and balance
sheet prospects, whose credit ratings the Advisor views as likely to be
upgraded. The Advisor believes that such securities can produce returns similar
to equities, but with less risk. See the Statement of Additional Information.

Repurchase Agreements. The Fund may enter into repurchase agreements in
order to earn additional income on available cash, or as a defensive investment
in periods when the Fund is primarily in short-term maturities. A repurchase
agreement is a short-term investment in which the purchaser (i.e., the Fund)
acquires ownership of a U.S. Government security (which may be of any maturity)
and the seller agrees to repurchase the obligation at a future time at a set
price, thereby determining the yield during the purchaser's holding period
(usually not more than seven days from the date of purchase). Any repurchase
transaction in which the Fund engages will require full collateralization of the
seller's obligation during the entire term of the repurchase agreement. In the
event of a bankruptcy or other default of the seller, the Fund could experience
both delays in liquidating the underlying security and losses in value. However,
the Fund intends to enter into repurchase agreements only with banks with assets
of $500 million or more that are insured by the Federal Deposit Insurance
Corporation and the most creditworthy registered securities dealers pursuant to
procedures adopted and regularly reviewed by the Trust's Board of Trustees. The
Advisor monitors the creditworthiness of the banks and securities dealers with
whom the Fund engages in repurchase transactions.

Illiquid and Restricted Securities. The Fund may not invest more than 15%
of its net assets in illiquid securities, including (i) securities for which
there is no readily available market; (ii) securities the disposition of which
would be subject to legal restrictions (so-called "restricted securities"); and
(iii) repurchase agreements having more than seven days to maturity. A
considerable period of time may elapse between the Fund's decision to dispose of
such securities and the time when the Fund is able to dispose of them, during
which time the value of the securities could decline. Restricted securities do
not include those which meet the requirements of Securities Act Rule 144A and
which the Trustees have determined to be liquid based on the applicable trading
markets.

Foreign Securities. The Fund may invest up to 20% of its assets in
securities of foreign issuers. The Advisor usually buys securities of larger
foreign companies that have well recognized franchises and are selling at a
discount to the securities of similar domestic businesses.

There may be less publicly available information about these issuers than
is available about companies in the U.S. and foreign auditing requirements may
not be comparable to those in the U.S. In addition, the value of
5
<PAGE>
the foreign securities may be adversely affected by movements in the exchange
rates between foreign currencies and the U.S. dollar, as well as other political
and economic developments, including the possibility of expropriation,
confiscatory taxation, exchange controls or other foreign governmental
restrictions. The Fund may also invest without limit in securities of foreign
issuers which are listed and traded on a domestic national securities exchange.

Short Sales. The Fund may engage in short sales of securities. In a short
sale, the Fund sells stock which it does not own, making delivery with
securities "borrowed" from a broker. The Fund is then obligated to replace the
security borrowed by purchasing it at the market price at the time of
replacement. This price may or may not be less than the price at which the
security was sold by the Fund. Until the security is replaced, the Fund is
required to pay to the lender any dividends or interest which accrue during the
period of the loan. In order to borrow the security, the Fund may also have to
pay a premium which would increase the cost of the security sold. The proceeds
of the short sale will be retained by the broker, to the extent necessary to
meet margin requirements, until the short position is closed out.

The Fund also must segregate an account consisting of liquid assets equal
to the difference between (a) the market value of the securities short at the
time they were sold short and (b) the value of the collateral deposited with the
broker in connection with the short sale (not including the proceeds from the
short sale). While the short position is open, the Fund must maintain daily the
segregated account at such a level that (1) the amount deposited in it plus the
amount deposited with the broker as collateral equals the current market value
of the securities sold short and (2) the amount deposited in it plus the amount
deposited with the broker as collateral is not less than the market value of the
securities at the time they were sold short.

A short sale is "against-the-box" if at all times when the short position
is open the Fund owns an equal amount of the securities or securities
convertible into, or exchangeable without further consideration for, securities
of the same issue as the securities sold short. Such a transaction serve to
defer a gain or loss for Federal income tax purposes.

Options and Futures. The Fund may purchase and write call and put options
on securities, securities indexes and on foreign currencies, and enter into
futures contracts and use options on futures contracts. The Fund may use these
techniques to hedge against changes in interest rates, foreign currency exchange
rates or securities prices or as part of its overall investment strategies. The
Fund is subject to regulatory limitations on the use of such techniques and is
required to maintain segregated accounts consisting of liquid assets (or, as
permitted by applicable regulation, enter into certain offsetting positions) to
cover its obligations under options and futures contracts to avoid leveraging of
the Fund.

The Fund may buy or sell interest rate futures contracts, options on
interest rate futures contracts and options on debt securities for the purpose
of hedging against changes in the value of securities which the Fund owns or
anticipates purchasing due to anticipated changes in interest rates. The Funds
also may engage in currency exchange transactions by means of buying or selling
foreign currency on a spot basis, entering into foreign currency forward
contracts, any buying and selling foreign currency options, futures and options
on futures.
6
<PAGE>
Foreign currency exchange transactions may be entered into for the purpose of
hedging against foreign currency exchange risk arising from the Fund's
investment or anticipated investment in securities denominated in foreign
currencies.

See the Statement of Additional Information for further information
regarding characteristics of and risks involved in the use of these instruments.

U.S. Government Securities. The Fund may invest in U.S. Government
securities. U.S. Government securities include direct obligations issued by the
U.S. Treasury, such as Treasury bills, certificates of indebtedness, notes and
bonds. U.S. Government agencies and instrumentalities that issue or guarantee
securities include, but are not limited to, the Federal National Mortgage
Association, Government National Mortgage Association, Federal Home Loan Banks,
Federal Financing Bank, and Student Loan Marketing Association.

Mortgage-Related Securities. Mortgage pass-through securities are
securities representing interests in pools of mortgages in which payments of
both interest and principal on the securities are generally made monthly, in
effect "passing through" monthly payments made by the individual borrowers on
the residential mortgage loans which underlie the securities (net of fees paid
to the issuer or guarantor of the securities). Early repayment of principal on
mortgage pass-through securities (arising from prepayments of principal due to
the sale of underlying property, refinancing, or foreclosure, net of fees and
costs which may be incurred) may expose a Fund to a lower rate of return upon
reinvestment of principal. Also, if a security subject to repayment has been
purchased at a premium, in the event of prepayment the value of the premium
would be lost.

As noted above, payment of principal and interest on some mortgage related
securities (but not the market value of the securities themselves) may be
guaranteed by the full faith and credit of the U.S. Government (in the case of
securities guaranteed by GNMA), by agencies or instrumentalities of the U.S.
Government (in the case of securities guaranteed by FNMA or the Federal Home
Loan Mortgage Corporation ("FHLMC"), which are supported only by the
discretionary authority of the U.S. Government to purchase the agency's
obligations). Mortgage pass-through securities created by non-governmental
issuers (such as commercial banks, savings and loan institutions, private
mortgage insurance companies, mortgage bankers and other secondary market
issuers) may be supported by various forms of insurance or guarantees, including
individual loan, title, pool and hazard insurance, and letters of credit, which
may be issued by governmental entities, private insurers or the mortgage
poolers.

Collateralized mortgage obligations ("CMO's") are hybrid instruments with
characteristics of both mortgage-backed bonds and mortgage pass-through
securities. Similar to a bond, interest and prepaid principal on a CMO are paid,
in most cases, semi-annually. CMO's may be collateralized by whole mortgage
loans but are more typically collateralized by portfolios of mortgage
pass-through securities guaranteed by GNMA, FHLMC, or FNMA. CMO's are structured
into multiple classes, with each class bearing a different stated maturity.
Monthly
7
<PAGE>
payments of principal, including prepayments, are first returned to investors
holding the shortest maturity class. Investors holding the longer maturity
classes receive principal only after the first class has been retired. Other
mortgage related securities include those that directly or indirectly represent
a participation in or are secured by and payable from mortgage loans on real
property, such as CMO residuals or stripped mortgage-backed securities, and may
be structured in classes with rights to receive varying proportions of principal
and interest.

Portfolio Turnover. The annual rate of portfolio turnover is not expected
to exceed 100%. In general, the Advisor will not consider the rate of portfolio
turnover to be a normally limiting factor in determining when or whether to
purchase or sell securities in order to achieve the Fund's objective.

MANAGEMENT OF THE FUND

The Board of Trustees of the Trust establishes the Fund's policies and
supervises and reviews the management of the Fund. First Pacific Advisors, Inc.,
(the "Advisor") is the Fund's investment Advisor. The Advisor, together with its
predecessors, has been in the investment advisory business since 1954. Presently
the Advisor manages assets of approximately $3.4 billion for five investment
companies, including one closed-end investment company, and more than 45
institutional accounts. The Advisor is an indirect wholly-owned subsidiary of
United Asset Management Coporation ("UAM"), a New York Stock Exchange listed
holding company principally engaged, through affiliated firms, in providing
institutional investment management and acquiring investment management firms.

Under the Investment Advisory Agreement, the Advisor provides the Fund
with advice on buying and selling securities, manages the investments of the
Fund, furnishes the Fund with office space and certain administrative services,
and provides most of the personnel needed by the Fund. As compensation, the Fund
pays the Advisor a monthly management fee (accrued daily) based upon the average
daily net assets of the Fund at the rate of 1.00% annually.

Investment Company Administration Corporation (the "Administrator") acts
as the Fund's Administrator under an Administrative Agreement; under that
agreement, the Administrator prepares various federal and state regulatory
filings, reports and returns for the Fund, prepares reports and materials to be
supplied to the trustees, monitors the activities of the Fund's custodian,
transfer agent and accountants, and coordinates the preparation and payment of
Fund expenses and reviews the Fund's expense accruals. For its services, the
Administrator receives a monthly fee at the following annual rate:

Average net assets Fee or fee rate
------------------ ---------------
Under $15 million $30,000
$15 to $50 million 0.20% of average net assets
$50 to $100 million 0.15% of average net assets
$100 to $150 million 0.10% of average net assets
Over $150 million 0.05% of average net assets

The Fund is responsible for its own operating expenses. The Advisor has
agreed to reduce its fees or reimburse the Fund for its annual operating
expenses which exceed the most stringent limits prescribed by any state in which
the Fund's shares are offered for sale. The Advisor also may reimburse
additional amounts to the Fund at any time in order to reduce the Fund's
expenses, or to the extent required by applicable securities laws. To the extent
the Advisor
8
<PAGE>
performs a service for which the Fund is obligated to pay, the Fund shall
reimburse the Advisor for its costs incurred in rendering such service.

HOW TO INVEST IN THE FUND

The minimum initial investment is $5,000. Subsequent investments must be
at least $500. Investments in retirement plans may be for minimums of $2,000 and
$200, respectively. First Fund Distributors, Inc. (the "Distributor"), acts as
Distributor of the Fund's shares. The Distributor may, at its discretion, waive
the minimum investment requirements for purchases in conjunction with certain
group or periodic plans.

Investors may purchase shares of the Fund by check or wire:

By Check:

Initial Investment. Complete the Fund's Account Application (included with
this Prospectus). Make your check payable to "UAM/FPA Crescent Fund" Mail or
deliver the completed Account Application and your check to the:
UAM/FPA Crescent Fund, P.O. Box 856, Cincinnati, Ohio 45264-0856.

Subsequent Investments. Detach and complete the stub attached to your
account statement. Make your check payable to "UAM/FPA Crescent Fund." Write
your shareholder account number on the check. Mail or deliver the check and
reinvestment form to the Fund in the envelope provided or send to the address
indicated above.

By Wire:

Initial Investment. Before wiring funds, call the Transfer Agent at (800)
385-7003 between the hours of 9:00 a.m. and 4:00 p.m. Eastern time on a day when
the New York Stock Exchange is open for trading to advise the Fund that you
intend to make an initial investment by wire and to receive an account number.
Provide the Fund with your name, and the dollar amount to be invested.

Request your bank to transmit immediately available funds by wire for
purchase of shares in your name to the Fund's Custodian, as follows:

Star Bank, N.A., Cinti/Trust
ABA #0420-0001-3
Attn: UAM/FPA Crescent Fund
DDA #483897922
(Account name and number)

Subsequent Investments. For subsequent investments, you should first
notify the Fund and then instruct your bank to wire funds as indicated above. It
is essential that complete information regarding your account be included in all
wire instructions in order to facilitate prompt and accurate handling of
investments. Investors may obtain further information about remitting funds in
this manner from the Transfer Agent, and any fees that may be imposed from their
own banks.
9
<PAGE>
General. Investors will not be permitted to redeem any shares purchased
with an initial investment made by wire until one business day after the
completed Account Application is received by the Fund. All investments must be
made in U.S. dollars and, to avoid fees and delays, checks should be drawn only
on U.S. banks and should not be made by third party check. A charge may be
imposed if any check used for investment does not clear. The Fund and the
Distributor reserve the right to reject any purchase order in whole or in part.

If an order, together with payment in proper form, is received by the
Transfer Agent by the close of public trading on the New York Stock Exchange
(currently 4:00 p.m., New York City time), Fund shares will be purchased at the
offering price determined as of the close of public trading on that day.
Otherwise, Fund shares will be purchased at the offering price determined as of
the close of public trading on the New York Stock Exchange on the next business
day.

The Fund does not issue share certificates. All shares are held in
non-certificated form registered on the books of the Fund and the Fund's
Transfer Agent for the account of the shareholder.

HOW TO REDEEM AN INVESTMENT IN THE FUND

Direct Redemption. A written request for redemption must be received by
the Fund's Transfer Agent in order to constitute a valid tender for redemption.
The Transfer Agent requires that the signature(s) on the written request be
guaranteed by a commercial bank or a member firm of a domestic stock exchange or
the National Association of Securities Dealers, Inc.

Telephone Redemption. Shareholders who complete the Telephone Privileges
Authorization portion of the Fund's Account Application may redeem shares on any
business day the New York Stock Exchange is open by calling the Fund's Transfer
Agent at (800) 385-7003 before 4:00 p.m. Eastern time. Redemption proceeds will
be mailed or wired at the shareholder's direction the next business day to the
predesignated account. The minimum amount that may be wired is $1,000 (wire
charges, if any, will be deducted from redemption proceeds).

By establishing telephone redemption privileges, a shareholder authorizes
the Fund and its Transfer Agent to act upon the instruction of any person by
telephone to redeem from the account for which such service has been authorized
and transfer the proceeds to the bank account designated in the Authorization.
The Fund and the Transfer Agent will use procedures to confirm that redemption
instructions received by telephone are genuine, including recording of telephone
instructions and requiring a form of personal identification before acting on
such instructions. Neither the Fund nor the Transfer Agent will be liable for
any loss, expense, or cost arising out of any telephone redemption request,
including any fraudulent or unauthorized requests that are reasonably believed
to be genuine, provided that such procedures are followed. The Fund may change,
modify, or terminate these privileges at any time upon at least 60 days' notice
to shareholders.

Shareholders may request telephone redemption after an account is opened;
however, the authorization form will require a separate signature guarantee.
Shareholders may experience delays in exercising telephone redemption during
periods of abnormal market activity.
10
<PAGE>
General. Payment of the redemption proceeds will be made promptly, but not
later than seven days after the receipt of all documents in proper form,
including a written redemption order with appropriate signature guarantee in
cases where telephone redemption privileges are not being utilized. The Fund may
suspend the right of redemption under certain extraordinary circumstances in
accordance with the Rules of the Securities and Exchange Commission. In the case
of shares purchased by check and redeemed shortly after purchase, the Fund will
not mail redemption proceeds until it has been notified that the check used for
the purchase has been collected, which may take up to 15 days from the purchase
date. To minimize or avoid such delay, investors may purchase shares by
certified check or federal funds wire. A redemption may result in recognition of
a gain or loss for Federal income tax purposes.

Due to the relatively high cost of maintaining smaller accounts, the Fund
reserves the right to redeem shares in any account, other than retirement plan
or Uniform Gift to Minors Act accounts, if at any time, due to redemptions by
the shareholder, the total value of a shareholder's account does not equal at
least $1,500. If the Fund determines to make such an involuntary redemption, the
shareholder will first be notified that the value of his account is less than
$1,500 and will be allowed 30 days to make an additional investment to bring the
value of his account to at least $1,500 before the Fund takes any action.

SERVICES AVAILABLE TO THE FUND'S SHAREHOLDERS

Retirement Plans. The minimum initial investment for such plans is $2,000,
with minimum subsequent investments of $200. The Fund offers a prototype
Individual Retirement Account ("IRA") plan and information is available from the
Distributor or from your securities dealer with respect to Keogh, Section 403(b)
and other retirement plans offered. Investors should consult a tax adviser
before establishing any retirement plan.

Check-A-Matic Plan. For the convenience of shareholders, the Fund offers a
preauthorized check service under which a check is automatically drawn on the
shareholder's personal checking account each month for a predetermined amount
(but not less than $250), as if the shareholder had written it directly. Upon
receipt of the check, the Fund automatically invests the money in additional
shares of the Fund at the current offering price. Applications for this service
are available from the Distributor. There is no charge by the Fund for this
service. The Distributor may terminate or modify this privilege at any time, and
shareholders may terminate their participation by notifying the Transfer Agent
in writing.

A withdrawal under the Systematic Withdrawal Program involves a redemption
of shares, and may result in a gain or loss for federal income tax purposes. In
addition, if the amount withdrawn exceed the dividends credited to the
shareholder's account, the account ultimately may be depleted.

HOW THE FUND'S PER SHARE VALUE IS DETERMINED

The net asset value of a Fund share is determined once daily as of the
close of public trading on the New York Stock Exchange (currently 4:00 p.m.
Eastern time) on each day the New York Stock Exchange is open for trading. Net
asset value per share is calculated by dividing the value of the Fund's total
assets, less its liabilities, by the number of Fund shares outstanding.
11
<PAGE>
Portfolio securities are valued using current market values, if available.
Securities for which market quotations are not readily available are valued at
fair values as determined in good faith by or under the supervision of the
Trust's officers in accordance with methods which are specifically authorized by
the Board of Trustees. Short-term obligations with remaining maturities of sixty
days or less are valued at amortized cost as reflecting fair value.

DISTRIBUTIONS AND TAXES

Dividends and Distributions. Dividends from net investment income are
expected to be paid in June and December. Any undistributed net capital gains
realized during the Fund's fiscal year will also be distributed to shareholders
in June, with a supplemental distribution in December of any undistributed
capital gains earned during the 12-month period ended each October 31.

Any dividend or distribution paid by the Trust has the effect of reducing
the net asset value per share on the reinvestment date by the amount of the
dividend or distribution. Investors should note that a dividend or distribution
paid on shares purchased shortly before such dividend or distribution was
declared will be subject to income taxes as discussed below even though the
dividend or distribution represents, in substance, a partial return of capital
to the shareholder.

Taxes. The Trust intends to qualify and elect to be treated as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"). As long as the Fund continues to qualify, and as long as
the Fund distributes all of its income each year to the shareholders, the Fund
will not be subject to any federal or excise taxes. The distributions made by
the Fund will be taxable to shareholders whether received in shares (through
dividend reinvestment ) or in cash. Distributions derived from net investment
income, including net short-term capital gains, are taxable to shareholders as
ordinary income. A portion of these distributions may qualify for the
intercorporate dividends-received deduction. Distributions designated as capital
gains dividends are taxable as long-term capital gains regardless of the length
of time shares of the Fund have been held. Although distributions are generally
taxable when received, certain distributions made in January are taxable as if
received the prior December. Shareholders will be informed annually of the
amount and nature of the Fund's distributions.

GENERAL INFORMATION

Shareholder Rights. Shares issued by the Fund have no preemptive,
conversion or subscription rights. Shareholders have equal and exclusive rights
as to dividends and distributions as declared by the Fund and to the net assets
of the Fund upon liquidation or dissolution. The Fund, as a separate series of
the Trust, votes separately
12
<PAGE>
on matters affecting only the Fund (e.g., approval of the Management Agreement);
all series of the Trust vote as a single class on matters affecting all series
jointly or the Trust as a whole (e.g., election or removal of Trustees). Voting
rights are not cumulative, so that the holders of more than 50% of the shares
voting in any election of Trustees can, if they so choose, elect all of the
Trustees. While the Trust is not required and does not intend to hold annual
meetings of shareholders, such meetings may be called by the Trustees in their
discretion, or upon demand by the holders of 10% or more of the outstanding
shares of the Trust for the purpose of electing or removing Trustees.

Performance Information. From time to time, the Fund may publish its total
return in advertisements and communications to investors. Total return
information will include the Fund's average annual compounded rate of return
over the most recent four calendar quarters and over the period from the Fund's
inception of operations. The Fund may also advertise aggregate and average total
return information over different periods of time. The Fund's total return will
be based upon the value of the shares acquired through a hypothetical $1,000
investment (at the maximum public offering price) at the beginning of the
specified period and the net asset value of such shares at the end of the
period, assuming reinvestment of all distributions and after giving effect to
the maximum applicable sales charge. Total return figures will reflect all
recurring charges against Fund income. Investors should note that the investment
results of the Fund will fluctuate over time, and any presentation of the Fund's
total return for any prior period should not be considered as a representation
of what an investor's total return may be in any future period.

Shareholder Inquiries. Shareholder inquiries should be directed to the
Transfer Agent at (800) 385-7003.

Proposed Reorganization. At the request of the Advisor, the Board of
Trustees of the Trust has approved for submission to the shareholders of the
Fund a proposal to reorganize the Fund as a new series of the UAM Funds. All
shareholders of record on July 15, 1996 will be eligible to vote on this
proposal. The shareholder meeting is scheduled to be held on September 6, 1996.
If the reorganization proposal is approved by shareholders and all other
conditions to the reorganization are satisfied, the Fund will become a separate
series of the UAM Funds on October 1, 1996. It is anticipated that the operating
expenses of the Fund will either remain the same or be reduced as a result of
the proposed reorganization. Because the reorganization will affect all
shareholders, shareholders acquiring shares after July 15, 1996 may wish to
review the proxy statement relating to the proposed organization even though
such shareholders will not be eligible to vote on the proposal. A copy of the
proxy statement can be obtained at no charge by contacting the Fund at the
address and telephone number above.
13
<PAGE>
UAM/FPA
CRESCENT
FUND

Prospectus

August 1, 1996
<PAGE>

Advisor

First Pacific Advisors, Inc.
11400 West Olympic Blvd.
Suite 1200
Los Angeles, CA 90064
(310) 996-5436

Distributor

First Fund Distributors, Inc.
4455 E. Camelback Road
Suite 261-E
Phoenix, AZ 85018

Custodian

Star Bank, N.A.
425 Walnut Street
Cincinnati, OH 45202

Transfer Agent

American Data Services
24 West Carver Street
Huntington, NY 11743
(800) 385-7003

Auditors

Tait, Weller & Baker
2 Penn Center Plaza
Philadelphia, PA 19102

Legal Counsel

Heller Ehrman White & McAuliffe
333 Bush Street
San Francisco, CA 94104

<PAGE>
[HODGES FUND LOGO]

2905 Maple Avenue
Dallas, Texas 75201
(800) 388-8512

The HODGES FUND (the "Fund") is a mutual fund with the investment
objective of seeking long-term capital appreciation. The Fund seeks to achieve
its objective by investing principally in common stocks. Hodges Capital
Management, Inc. (the "Advisor"), serves as investment advisor to the Fund.

This Prospectus sets forth basic information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. The Fund is a series of Professionally Managed
Portfolios. A Statement of Additional Information dated August 1, 1996, as may
be amended from time to time, has been filed with the Securities and Exchange
Commission and is incorporated herein by reference. This Statement of Additional
Information is available without charge upon request to the Fund at the address
or telephone number given above.

TABLE OF CONTENTS

Expense Table.................................................. 2
Financial Highlights........................................... 3
Objective and Investment Approach of the Fund.................. 4
Management of the Fund......................................... 7
How To Invest in the Fund...................................... 8
How To Redeem an Investment in the Fund........................ 10
Services Available to the Fund's Shareholders.................. 12
How the Fund's Per Share Value Is Determined................... 13
Distribution and Taxes......................................... 13
General Information............................................ 14

Prospectus dated August 1, 1996
1
<PAGE>
The HODGES FUND (the "Fund") is a non-diversified series of Professionally
Managed Portfolios (the "Trust"), an open-end management investment company
offering redeemable shares of beneficial interest. Shares may be purchased at a
public offering price which includes a maximum sales charge of 2.50% of the
offering price, or less depending on the amount invested. The minimum initial
investment is $500, with subsequent investments of $50 or more. The Fund has
adopted a plan of distribution under which the Fund will pay the Distributor a
fee at an annual rate of up to .50% of the Fund's net assets. A long-term
shareholder may pay more, directly and indirectly, in sales charges and such
fees than the maximum sales charge permitted under the rules of the National
Association of Securities Dealers. Shares will be redeemed at net asset value
per share.

EXPENSE TABLE

Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases................... 2.50%
Maximum Sales Load Imposed on Reinvested Dividends........ None
Deferred Sales Load....................................... None
Redemption Fees........................................... None
Exchange Fee.............................................. None

Annual Fund Operating Expenses
(As a percentage of average net assets)

Investment Advisory Fees.................................. 0.85%
12b-1 Fees................................................ 0.50%
Other Expenses............................................ 0.73%
-----
Total Fund Operating Expenses............................. 2.08%
=====
<TABLE>
<CAPTION>
Example 1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C>

This table illustrates the net transaction and operating expenses that
would be incurred by an investment in the Fund over different time
periods assuming a $1,000 investment, a 5% annual return,
and redemption at the end of:........................................... $46 $89 $134 $260
</TABLE>
The Example shown above should not be considered a representation of past
or future expenses and actual expenses may be greater or less than those shown.
In addition, federal regulations require the Example to assume a 5% annual
return, but the Fund's actual return may be higher or lower. See "Management of
the Fund" on page 7.
2
<PAGE>
FINANCIAL HIGHLIGHTS

For a share outstanding throughout each period.

- -----------------------------------------------------------------------------------------------------------------------------------
Year Year Year Oct. 9, 1992*
Ended Ended Ended through
March 31, March 31, March 31, March 31,
1996 1995 1994 1993
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>

Net asset value, beginning of period .............................. $ 11.55 $ 10.80 $ 11.78 $ 10.25
Income from investment operations:
Net investment (loss) income ................................ (.07) (.08) (.03) .02
Net realized and unrealized gain on investments ............. 3.42 1.09 .07 1.51
----------- ----------- ----------- -----------
Total from investment operations .................................. 3.35 1.01 .04 1.53
----------- ----------- ----------- -----------

Less distributions:
Dividends from net investment income ........................ -0- -0- (.01) -0-
Distributions from net capital gains ........................ (2.03) (.26) (1.01) -0-
----------- ----------- ----------- -----------
Total distributions ............................................... (2.03) (.26) (1.02) -0-
----------- ----------- ----------- -----------
Net asset value, end of period .................................... $ 12.87 $ 11.55 $ 10.80 $ 11.78
----------- ----------- ----------- -----------
Total return ...................................................... 32.33% 9.60% 0.22% 25.59%+

Ratios/supplemental data:
Net assets, end of period (millions) .............................. $ 13.3 $ 9.3 $ 8.5 $ 6.9
Ratio of expenses to average net assets:
Before expense reimbursement ................................ 2.08% 2.31% 2.63% 2.17%+
After expense reimbursement ................................. 2.08% 2.31% 2.07% 2.17%+
Ratio of net investment (loss) income to average net assets:
Before expense reimbursement ................................ (0.61%) (0.75%) (0.84%) 0.41%+
After expense reimbursement ................................. (0.61%) (0.75%) (0.29%) 0.41%+

Portfolio turnover rate ........................................... 124.89% 73.65% 192.03% 26.23%
</TABLE>
*Commencement of operations.

+Annualized.
3
<PAGE>
OBJECTIVE AND INVESTMENT APPROACH OF THE FUND

The investment objective of the Fund is capital appreciation. The primary
approach of the Fund is to seek investments which the Advisor believes to be
attractive investments with capital appreciation potential on an individual
issuer basis. There is, of course, no assurance that the Fund's objective will
be achieved, and the Fund's net asset value per share will fluctuate as the
market value of its investment portfolio fluctuates.

Investment Approach and Risk Considerations. The Fund emphasizes the
purchase of common stocks of both domestic and foreign companies (U.S. dollar
denominated) with rapidly growing earnings per share, other companies whose
earnings growth is slower but which appear to have a predictable track record
and are undervalued by other criteria of their fundamental net worth in the
opinion of the Advisor, as well as companies whose shares are out of favor, but
appear to have good prospects for a turnaround. The Fund also will invest in
low-priced common stocks that the Advisor believes have appreciation potential
that could be substantial. Although not an objective of the Fund, growth of
income may accompany growth of capital, and the Fund may invest in some moderate
growth stocks whose shares offer a high dividend yield.

Some of the companies in the Fund's portfolio may be unseasoned, although
others may be well-known and established. Many of the companies in the Fund's
portfolio will have a small capitalization (i.e., less than $500 million). The
volatility of its investment portfolio is likely to be greater than that of the
Standard & Poor's 500 Stock Index.

The Fund may invest in securities of unseasoned companies. The Advisor
regards a company as unseasoned when, for example, it is relatively new to or
not yet well established in its primary line of business. Such companies are
generally smaller and younger than companies whose shares are traded on the
major stock exchanges. Accordingly, their shares are often traded
over-the-counter and their share prices may be more volatile than those of
larger, exchange listed companies. Developments such as new or improved products
and methods may have a substantial impact on the earnings and revenues of these
companies, and such positive and negative developments can result in a
correspondingly positive or negative impact on the value of their shares. Such
companies also may be more dependent on key personnel and may have more limited
financing resources. For these reasons, the net asset value per share of the
Fund may fluctuate substantially, and the Fund may not be appropriate for
short-term investors.

The Fund invests principally in common stocks, and under normal market
conditions, at least 55% of the value of its total assets will be invested in
common stocks selected for their growth potential. The Fund's investments may
also include preferred stocks, warrants, convertible debt obligations and other
debt obligations that, in the Advisor's opinion, offer the possibility of
capital growth.

During those times when equity securities cannot be found that meet the
Advisor's investment criteria, for temporary defensive purposes or pending
longer-term investment, the Fund may invest any amount of its assets in
short-term money market instruments, including securities issued by the U.S.
Government, its agencies and instrumentalities or other such instruments rated
in the top two grades by Moody's Investors Service or Standard & Poor's,
Corporation or, if unrated, instruments deemed to be of comparable quality by
the Fund's Advisor.

The Fund may also invest in securities of foreign companies (U.S. dollar
denominated), and special situations. Such securities often involve greater
risks than investments in more established domestic companies, primarily because
they may be more likely to experience unexpected fluctuations in price. See
below for a further discussion of the policies regarding investments in foreign
companies, and special situations. Because prices of common stocks and other
securities fluctuate, the value of an investment in the Fund will vary, as the
market value of its investment portfolio changes.
4
<PAGE>
Repurchase Agreements. The Fund may enter into repurchase agreements in
order to earn additional income on available cash, or as a defensive investment
in periods when the Fund is primarily in short-term maturities. A repurchase
agreement is a short-term investment in which the purchaser (i.e., the Fund)
acquires ownership of a U.S. Government security (which may be of any maturity)
and the seller agrees to repurchase the obligation at a future time at a set
price, thereby determining the yield during the purchaser's holding period
(usually not more than seven days from the date of purchase). Any repurchase
transaction in which the Fund engages will require full collateralization of the
seller's obligation during the entire term of the repurchase agreement. In the
event of a bankruptcy or other default of the seller, the Fund could experience
both delays in liquidating the underlying security and losses in value. However,
the Fund intends to enter into repurchase agreements only with banks with assets
of $500 million or more that are insured by the Federal Deposit Insurance
Corporation and the most creditworthy registered securities dealers pursuant to
procedures adopted and regularly reviewed by the Trust's Board of Trustees. The
Advisor monitors the creditworthiness of the banks and securities dealers with
whom the Fund engages in repurchase transactions, and the Fund will not invest
more than 15% of its total assets in illiquid securities, including repurchase
agreements maturing in more than seven days.

Illiquid and Restricted Securities. The Fund may not invest more than 15%
of its net assets in illiquid securities, including (i) securities for which
there is no readily available market; (ii) securities the disposition of which
would be subject to legal restrictions (so-called "restricted securities"); and
(iii) repurchase agreements having more than seven days to maturity. A
considerable period of time may elapse between the Fund's decision to dispose of
such securities and the time when the Fund is able to dispose of them, during
which time the value of the securities could decline. Restricted securities do
not include those which meet the requirements of Securities Act Rule 144A and
which the Trustees have determined to be liquid based on the applicable trading
markets.

Foreign Securities. The Fund may invest up to 10% of its assets in U.S.
dollar denominated securities of foreign issuers. There may be less publicly
available information about these issuers than is available about companies in
the U.S. and foreign auditing requirements may not be comparable to those in the
U.S. In addition, the value of the foreign securities may be adversely affected
by movements in the exchange rates between foreign currencies and the U.S.
dollar, as well as other political and economic developments, including the
possibility of expropriation, confiscatory taxation, exchange controls or other
foreign governmental restrictions. The Fund may also invest in American
Depositary Receipts with respect to foreign companies which are listed and
traded on a domestic national securities exchange.

Short Sales. The Fund may engage in short sales of securities, provided
the securities are fully listed on a national securities exchange. In a short
sale, the Fund sells stock which it does not own, making delivery with
securities "borrowed" from a broker. The Fund is then obligated to replace the
security borrowed by purchasing it at the market price at the time of
replacement. This price may or may not be less than the price at which the
security was sold by the Fund. Until the security is replaced, the Fund is
required to pay to the lender any dividends or interest which accrue during the
period of the loan. In order to borrow the security, the Fund may also have to
pay a premium which would increase the cost of the security sold. The proceeds
of the short sale will be retained by the broker, to the extent necessary to
meet margin requirements, until the short position is closed out.

The Fund also must segregate an account consisting of liquid assets equal
to the difference between (a) the market value of the securities sold short at
the time they were sold short and (b) the value of the collateral deposited with
the broker in connection with the short sale (not including the proceeds from
the short sale). While the short position is open, the Fund must maintain daily
the segregated account at such a level that (1) the amount deposited in
5
<PAGE>
it plus the amount deposited with the broker as collateral equals the current
market value of the securities sold short and (2) the amount deposited in it
plus the amount deposited with the broker as collateral is not less than the
market value of the securities at the time they were sold short.

The dollar amount of short sales at any one time (not including short
sales against the box) may not exceed 25% of the net equity of the Fund, and it
is expected that normally the dollar amount of such sales will not exceed 10% of
the net equity of the Fund. The value of securities of any one issuer in which
the Fund is short may not exceed the lesser of 2% of the value of the Fund's net
assets or 2% of the securities of any class of any issuer.

Special Situations. As a matter of operating policy, the Fund may invest
in special situations which the Advisor believes present opportunities for
capital growth. A special situation arises when, in the opinion of the Advisor,
the securities of a particular company will, within a reasonable period of time,
be accorded market recognition at an appreciated value solely by reason of a
development particularly or uniquely applicable to that company and regardless
of general business conditions or movements of the market as a whole.
Developments creating special situations might include, among others, the
following: liquidations, reorganizations, recapitalizations, mergers or tender
offers; material litigation or resolution thereof; technological breakthroughs;
and new management or management policies. Investments by the Fund in special
situations may not exceed 30% of the Fund's total assets.

Options Transactions. The Fund may write (sell) covered call options on
individual securities and on stock indices and engage in related closing
transactions. A covered call option on a security is an agreement by the Fund in
exchange for a premium, to sell a particular portfolio security if the option is
exercised at a specified price or before a set date. An option on a stock index
gives the option holder the right to receive, upon exercising the option, a cash
settlement amount based on the difference between the exercise price and the
value of the underlying stock index. Risks associated with writing covered
options include the possible inability to effect closing transactions at
favorable prices and an appreciation limit on the securities set aside for
settlement. The Fund may also purchase call options in closing transactions.
There is no assurance of liquidity in the secondary market for purposes of
closing out covered call option positions.

The Fund may purchase put and call options on stock indices for the
purpose of hedging against the risk of unfavorable price movements adversely
affecting the value of the Fund's securities or securities the Fund intends to
buy. The Fund may also sell put and call options in closing transactions.

Portfolio Turnover. The annual rate of portfolio turnover is anticipated
to approximate 125%, although in unusual circumstances it could exceed this
amount. In general, the Advisor will not consider the rate of portfolio turnover
to be a limiting factor in determining when or whether to purchase or sell
securities in order to achieve the Fund's objective. Although the Fund
anticipates that it will be able to effect transactions at discounted brokerage
commission rates or spreads, high portfolio turnover involves correspondingly
greater brokerage commissions and
6
<PAGE>
other transaction costs, which are borne directly by the Fund, and may increase
realized capital gains which are taxable to Fund shareholders when distributed.

Non-Diversification. The Fund is a non-diversified investment company
portfolio, which means that the Fund is required to comply only with the
diversification requirements of the Internal Revenue Code of 198C (The "Code")
so that the Fund will not be subject to U.S. taxes on its net investment income.
These provisions, among others, require that at the end of each calendar
quarter, (1) not more than 25% of the value of the Fund's total assets can be
invested in the securities of a single issuer, and (2) with respect to 50% of
the value of the Fund's total assets, no more than 5% of the value of its total
assets can be invested in the securities of a single issuer and the Fund may not
own more than 10% of the outstanding voting securities of a single issuer.

Since the Fund, as a non-diversified investment company portfolio, could
invest in a smaller number of individual issuers than a diversified investment
company, the value of the Fund's investments could be more affected by any
single adverse occurrence than would the value of the investments of a
diversified investment company. However, it is the policy of the Fund to attempt
to reduce its overall exposure to risk from declines in individual securities by
spreading its investments over many different companies and a variety of
industries.

MANAGEMENT OF THE FUND

The Board of Trustees of the Trust establishes the Fund's policies and
supervises and reviews the management of the Fund. Hodges Capital Management,
Inc., 2905 Maple Avenue, Dallas, Texas 75201, the Fund's Advisor, has been in
the investment advisory business since 1989. Mr. Don W. Hodges manages the
Fund's investment portfolio. The Advisor is owned by First Dallas Holdings,
Inc., a corporation controlled by Mr. Hodges. Mr. Hodges has over 30 years of
experience in the securities brokerage industry and previously served as
President of a large regional brokerage firm.

The Advisor provides the fund with advice on buying and selling
securities, manages the investment of the Fund, furnishes the Fund with office
space and certain administrative services, and provides most of the personnel
needed by the Fund. As compensation, the Fund pays the Advisor a monthly
investment advisory fee (accrued daily) based upon the average daily net assets
of the Fund at the rate of 0.85% annually.

Investment Company Administration Corporation (the "Administrator") acts
as the Fund's Administrator. The Administrator prepares various federal and
state regulatory filings, reports and returns for the Fund, prepares reports and
materials to be supplied to the trustees, monitors the activities of the Fund's
custodian, transfer agent and accountants, and coordinates the preparation and
payment of the Fund expenses and reviews the Fund's expense accruals. For its
services, the Administrator receives a monthly fee at the following annual rate:

Average net assets of the Fund Fee or fee rate
------------------------------ ---------------
Under $15 million $30,000
$15 to $50 million 0.20% of average net assets
$50 to $100 million 0.15% of average net assets
$100 to $150 million 0.10% of average net assets
Over $150 million 0.05% of average net assets
7
<PAGE>
The Fund is responsible for its own operating expenses. At times the
Advisor may waive a portion of its fee, and the Advisor also may reimburse
additional amounts to the Fund at any time in order to reduce the Fund's
expenses, or to the extent required by applicable securities laws. To the extent
the Advisor performs a service for which the Fund is obligated to pay, the Fund
shall reimburse the Advisor for its costs incurred in rendering such service.

HOW TO INVEST IN THE FUND

The minimum initial investment is $500. Subsequent investments must be at
least $50. First Dallas Securities, Inc., 2905 Maple Avenue, Dallas, Texas 75201
(the "Distributor"), an affiliate of the Advisor, acts as Distributor and may,
at its discretion, waive the minimum investment requirements. Shares of the Fund
are offered continuously for purchase at the public offering price next
determined after a purchase order is received. The public offering price is
effective for orders received by the Fund or investment dealers prior to the
time of the next determination of the Fund's net asset value and, in the case of
orders placed with dealers, transmitted promptly to the Transfer Agent. Orders
received after the time of the next determination of the applicable Fund's net
asset value will be entered at the next calculated public offering price.

The public offering price per share is equal to the net asset value per
share, plus a sales charge, which is reduced on purchases involving amounts of
$25,000 or more, as set forth in the table below. The reduced sales charges
apply to quantity purchases made at one time by a "person," which means (i) an
individual, (ii) members of a family (i.e., an individual, spouse children under
age 21), or (iii) a trustee or fiduciary of a single trust estate or a single
fiduciary account. In addition, purchases of shares made during a thirteen month
period pursuant to a written Letter of Intent are eligible for a reduced sales
charge. Reduced sales charges are also applicable to subsequent purchases by a
"person," based on the aggregate of the amount being purchased and the value, at
offering price, of shares owned at the time of investment.
<TABLE>
<CAPTION>

Sales Charge as percent of: Portion of sales
offering net asset charge retained
Amount of Purchase price value by dealers
<S> <C> <C> <C>

Less than $25,000.............................. 2.50% 2.56% 2.00%
$25,000 but less than $200,000................. 2.00% 2.04% 1.60%
$200,000 but less than $350,000................ 1.50% 1.52% 1.20%
$350,000 but less than $500,000................ 1.00% 1.01% 0.80%
8
<PAGE>
$500,000 but less than $1,500,000.............. 0.75% 0.76% 0.60%
$1,500,000 but less than $3,000,000............ 0.60% 0.60% 0.48%
$3,000,000 or more............................. 0.30% 0.30% 0.24%
</TABLE>

Purchase Order Placed with Investment Dealers

Dealers who have a sales agreement with the Distributor may place orders
for shares of the Fund on behalf of clients at the offering price next
determined after receipt of the client's order by calling the Distributor. If
the order is placed by the client with the dealer by 4:00 p.m. Eastern time and
forwarded to the Transfer Agent any day that the New York Stock Exchange is open
for trading, it will be confirmed at the applicable offering price on that day.
The dealer is responsible for placing orders promptly with the Transfer Agent
and for forwarding payment within five business days.

Purchase Sent to the Transfer Agent

Investors may purchase shares by sending an Application Form directly to
the Transfer Agent, with payment made either by check or by wire.

By check. For initial investments, complete the Fund's Account Application
(included with this Prospectus). Make your check payable to "Hodges Fund." Mail
or deliver the completed Account Application and your check to: Hodges Fund,
P.O. Box 856, Cincinnati, OH 45264-0856. Investments sent by overnight delivery
services should be sent to: Hodges Fund, c/o Star Bank, N.A., 425 Walnut Street,
M.L. 6118, Cincinnati, OH 45202

For subsequent investments, detach and complete the stub attached to an
account statement you have received from the Transfer Agent. Make your check
payable to "Hodges Fund." Write your shareholder account number on the check.
Mail or deliver the check and reinvestment form to the Fund in the envelope
provided or send to the address indicated above.

By wire. For initial investments, before wiring funds, call the Transfer
Agent at (800) 385-7003 between the hours of 9:00 a.m. and 4:00 p.m. Eastern
time on a day when the New York Stock Exchange is open for trading to advise the
Fund that you intend to make an initial investment by wire and to receive an
account number. Provide the Fund with your name, and the dollar amount to be
invested.

Complete the Fund's Account Application (included with this Prospectus).
Be sure to include the date and the order confirmation number. Mail or deliver
the completed Application to the appropriate address shown at the top of the
Account Application. Request your bank to transmit immediately available funds
by wire for purchase of shares in your name to the Fund, as follows:

Star Bank, N.A. Cinti/Trust
ABA Routing Number: 0420-0001-3
Hodges Fund
DDA # 483897948
(Account name and number)

For subsequent investments, the investor should first notify the Fund and
then the investor's bank should wire funds as indicated above. It is essential
that complete information regarding your account be included in all wire
instructions in order to facilitate prompt and accurate handling of investments.
Investors may obtain further information about remitting funds in this manner
from the Transfer Agent and should obtain from their own banks information about
any fees that may be imposed.
9
<PAGE>
Purchase at Net Asset Value

Shares of the Fund may be purchased at net asset value by officers,
Trustees, directors and full time employees of the Trust, the Advisor, the
Manager, the Distributor and affiliates of such companies, by their family
members, by persons and their family members who are direct investment advisory
clients of the Advisor, registered representatives and employees of firms which
have sales agreements with the Distributor, investment advisors, financial
planners or other intermediaries who place trades for their own accounts or the
accounts of their clients and who charge a management, consulting or other fee
for their services; clients of such investment advisors, financial planners or
other intermediaries who place trades for their own accounts if the accounts are
linked to the master account of such investment advisor, financial planner or
other intermediaries on the books and records of the broker or agent; and
retirement and deferred compensation plans and trusts used to fund those plans,
including, but not limited to, those defined in Section 401(a), 403(b) or 457 of
the Internal Revenue Code and "rabbi trusts" and by such other persons who are
determined to have acquired shares under circumstances not involving any sales
expense to the Fund or Distributor. Investors may be charged a fee if they
effect transactions in fund shares through a broker or agent.

Investors may purchase shares of the Fund at net asset value to the extent
that the investment represents the proceeds from the redemption, within the
previous sixty days, of shares (the purchase price of which included a sales
charge) of another mutual fund. When making a purchase at net asset value
pursuant to this provision, the investor should forward to the Transfer Agent
either (i) the redemption check representing the proceeds of the shares
redeemed, endorsed to the order of Hodges Fund, or (ii) a copy of the
confirmation from the other fund, showing the redemption transaction.

General

Federal tax regulations require that investors provide a certified
Taxpayer Identification Number and certain other required certifications upon
opening or reopening an account in order to avoid backup withholding of taxes at
the rate of 31% on taxable distributions and proceeds of in order to avoid
backup withholding of taxes at the rate of 31% on taxable distributions and
proceeds of redemptions. (See the Fund's Account Application for further
information concerning this requirement.) The Fund is not required to issue
share certificates. All shares are normally held in non-certificated form
registered on the books of the Fund and the Fund's Transfer Agent for the
account of the shareholder.

HOW TO REDEEM AN INVESTMENT IN THE FUND

A written request for redemption must be received by the Fund's Transfer
Agent in order to constitute a valid tender for redemption. To protect the Fund
and its shareholders, a signature guarantee is required for certain
transactions, including redemptions. Signature(s) on the redemption request must
be guaranteed by an "eligible guarantor institution" as defined in the federal
securities laws; these institutions include banks, broker-dealers, credit unions
and savings institutions. A broker-dealer guaranteeing signatures must be a
member of a clearing corporation or maintain net capital of at least $100,000.
Credit unions must be authorized to issue signature guarantees. Signature
guarantees will be accepted from any eligible guarantor institution which
participates in a signature guarantee program. A notary public is not an
acceptable guarantor.

Telephone Redemption.

Shareholders who complete the Redemption by Telephone portion of the
Fund's Account Application may redeem shares on any business day the New York
Stock Exchange is open by calling the Fund's Transfer Agent at (800) 385-7003
before 4:00 p.m. Eastern time. Redemption proceeds will be mailed or wired at
the shareholder's direction the next business day to the predesignated account.
The minimum amount that may be wired is $1,000 (wire charges, if any, will be
deducted from redemption proceeds).

By establishing telephone redemption privileges, a shareholder authorizes
the Fund and its Transfer Agent to act upon the instruction of any person by
telephone to redeem from the account for which such service has been authorized
and transfer the proceeds to the bank account designated in the Authorization.
The Fund and the Transfer Agent will use procedures to confirm that redemption
instructions received by telephone are genuine, including recording of telephone
instructions and requiring a form of personal indentification before acting on
such instructions. Neither the Fund nor the Transfer Agent will be liable for
any loss, expense, or cost arising out of any telephone redemption request,
including any fraudulent or unauthorized requests that are reasonably believed
to be genuine, provided that such procedures are followed. The Fund may change,
modify, or terminate these privileges at any time upon at least 60 days' notice
to shareholders.

General

Payment of the redemption proceeds will be made promptly, but not later
than seven days after the receipt of all documents in proper form, including a
written redemption order with appropriate signature guarantee in cases where
telephone redemption privileges are not being utilized. The Fund may suspend the
right of redemption under certain extraordinary circumstances in accordance with
the rules of the Securities and Exchange Commission. In the case of shares
purchased by check and redeemed shortly after purchase, the Fund will not mail
redemption proceeds until it has been notified that the check used for the
purchase has been collected, which may take up to 15 days from the purchase
date. To minimize or avoid such delay, investors may purchase shares by
certified check or federal funds wire. A redemption may result in recognition of
a gain or loss for Federal income tax purposes.
11
<PAGE>
Due to the relatively high cost of maintaining smaller accounts, the Fund
reserves the right to redeem shares in any account, other than retirement plan
or Uniform Gifts/Transfer to Minors Act accounts, if at any time, due to
redemptions by the shareholder, the total value of a shareholder's account does
not equal at least $1,500. If the Fund determines to make such an involuntary
redemption, the shareholder will first be notified that the value of his account
is less than $1,500 and will be allowed 30 days to make an additional investment
to bring the value of his account to at least $1,500 before the Fund takes any
action.

Distribution Agreement

The Distributor is the principal underwriter of shares of the Fund and is
an affiliate of the Advisor. The Distributor makes a continuous offering of the
Fund's shares and bears the costs and expenses of printing and distributing to
selected dealers and prospective investors any copies of any prospectuses,
statements of additional information and annual and interim reports of the Fund
other than to existing shareholders (after such items have been prepared and set
in type by the Fund) which are used in connection with the offering of shares,
and the costs and expenses of preparing, printing and distributing any other
literature used by the Distributor or furnished by it for use by selected
dealers in connection with the offering of the shares for sale to the public.
All or a part of the expenses borne by the Distributor may be reimbursed
pursuant to the Distribution and Shareholder Servicing Plan discussed below.

Distribution and Shareholder Servicing Plan

The Fund has adopted a Distribution and Shareholder Servicing Plan
pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the "Plan")
under which the Fund pays the Distributor an amount which is accrued daily and
paid monthly, at an annual rate of up to 0.50% of the average daily net assets
of the Fund. Amounts paid under the Plan by the Fund are paid to the Distributor
to reimburse it for costs of the services it provides and the expenses it bears
in the distribution of the Fund's shares, including overhead and telephone
expenses; printing and distribution of prospectuses and reports used in
connection with the offering of the Fund's shares to prospective investors; and
preparation, printing and distribution of sales literature and advertising
materials. Such fee is paid to the Distributor each year only to the extent of
such costs and expenses of the Distributor under the Plan actually incurred in
that year. In addition, payments to the Distributor under the Plan reimburse the
Distributor for payments it makes to selected dealers and administrators which
have entered into Service Agreements with the Distributor of periodic fees for
services provided to shareholders of the Fund. The services provided by selected
dealers pursuant to the Plan are primarily designed to promote the sale of
shares of the Fund and include the furnishing of office space and equipment,
telephone facilities, personnel and assistance to the Fund in servicing such
shareholders. The service provided by administrators pursuant to the Plan are
designed to provide support services to the Fund and include establishing and
maintaining shareholders' accounts and records, processing purchase and
redemption transactions, answering routine client inquires regarding the Fund,
and providing other services to the Fund as the Company may reasonably request.

SERVICES AVAILABLE TO THE FUND'S SHAREHOLDERS

Retirement Plans

The Fund offers a prototype Individual Retirement Account ("IRA") plan and
information is available from the Distributor and Transfer Agent or from your
securities dealer with respect to Keogh, Section 403(b) and other retirement
plans offered. Investors should consult a tax adviser before establishing any
retirement plan.
12
<PAGE>
Check-A-Matic Plan

For the convenience of shareholders, the Fund offers a preauthorized check
service under which a check is automatically drawn on the shareholder's personal
checking account each month for a predetermined amount (but not less than $250),
as if the shareholder had written it himself. Upon receipt of the check, the
Fund automatically invests the money in additional shares of the Fund at the
current offering price. Applications for this service are available from the
Distributor. There is no charge by the Fund for this service. The Distributor
may terminate or modify this privilege at any time, and shareholders may
terminate their participation by notifying the Transfer Agent in writing.

Systematic Withdrawal Program

HOW THE FUND'S PER SHARE VALUE IS DETERMINED

Portfolio securities are valued using current market values, if available.
Securities for which market quotations are not readily available are valued at
fair values as determined in good faith by or under the supervision of the
Trust's officers in accordance with methods which are specifically authorized by
the Board of Trustees. Short-term obligations with remaining maturities of sixty
days or less are valued at amortized cost as reflecting fair value.

DISTRIBUTIONS AND TAXES

Dividends and Distributions

Dividends from net investment income are declared and paid at least
annually, typically after the end of the Fund's fiscal year (March 31). Any net
realized long- term capital gains not previously distributed and any
undistributed short-term capital gains earned during the Fund's fiscal year will
also be distributed to shareholders following the conclusion of the Fund's
fiscal year, with a supplemental distribution on or about December 31 of any
additional undistributed capital gains earned during the 12-month period ended
October 31.

The Fund intends to qualify and elect to be treated as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986 (the
"Code"). As long as the Fund continues to qualify, and as long as the Fund
distributes all of its net investment company income and net realized capital
gains in accordance with the timing requirements of the Code, the Fund will not
be subject to any federal or excise taxes. However, distributions made by the
Fund will be taxable to shareholders (other than tax-exempt entities), whether
received in shares (through dividend reinvestment ) or in cash. Distributions
derived from net investment income and short-term capital gains are taxable to
shareholders as ordinary income. A portion of such distributions may qualify for
the intercorporate dividends-received deduction. Distributions derived from
long-term capital gains are taxable as such regardless of the length of time
shares of the Fund have been held.

Although distributions are generally taxable when received, certain
distributions made in January are taxable as if received the prior December.
Shareholders will be informed annually of the amount and nature of the Fund's
distributions.

GENERAL INFORMATION

The Trust

Shareholder Rights

Shares issued by the Fund have no preemptive, conversion, or subscription
rights. Shareholders have equal and exclusive rights as to dividends and
distributions as declared by the Fund and to the net assets of the Fund upon
liquidation or dissolution. The Fund, as a separate series of the Trust, votes
separately on matters affecting only the Fund (e.g., approval of the Management
Agreement); all series of the Trust vote as a single class on matters affecting
all series jointly or the Trust as a whole (e.g., election or removal of
Trustees). Voting rights are not cumulative, so that the holders of more than
50% of the shares voting in any election of Trustees can, if they so choose,
elect all of the Trustees. While the Trust is not required and does not intend
to hold annual meetings of shareholders, such meetings may be called by the
Trustees in their discretion, or upon demand by the holders of 10% or more of
the outstanding shares of the Trust for the purpose of electing or removing
Trustees.
14
<PAGE>
Performance Information

From time to time, the Fund may publish its total return in advertisements
and communications to investors. Total return information will include the
Fund's average annual compounded rate of return over the most recent four
calendar quarters and over the period from the Fund's inception of operations.
The Fund may also advertise aggregate and average total return information over
different periods of time. The Fund's total return will be based upon the value
of the shares acquired through a hypothetical $1,000 investment (at the maximum
public offering price) at the beginning of the specified period and the net
asset value of such shares at the end of the period, assuming reinvestment of
all distributions and after giving effect to the maximum applicable sales
charge. Total return figures will reflect all recurring charges against Fund
income. Investors should note that the investment results of the Fund will
fluctuate over time, and any presentation of the Fund's total return for any
prior period should not be considered as a representation of what an investor's
total return may be in any future period.

Shareholder Inquiries

Shareholder inquiries should be directed to the Fund at (800) 388-8512.
15
<PAGE>
Advisor
Hodges Capital Management, Inc.
2905 Maple Avenue
Dallas, Texas 75201
(800) 388-8512
--
Distributor
First Dallas Securities, Inc.
2905 Maple Avenue
Dallas, Texas 75201
--
Custodian
Star Bank, N.A.
425 Walnut Street
Cincinnati, Ohio 45202
--
Transfer Agent
American Data Services
24 West Carver Street
2nd Floor
Huntington, New York 11743
--
Auditors
Tait, Weller & Baker
2 Penn Center Plaza
Philadelphia, Pennsylvania 19102
--
Legal Counsel
Heller, Ehrman, White & McAuliffe
333 Bush Street
San Francisco, California 94104

16
<PAGE>

[HODGES FUND LOGO]

Designed
for Investors
Who Want Growth
of Capital

Prospectus

August 1, 1996

STATEMENT OF ADDITIONAL INFORMATION
August 1, 1996

AVONDALE TOTAL RETURN FUND
a series of
PROFESSIONALLY MANAGED PORTFOLIOS
1105 Holliday
Wichita Falls, Texas 76301
(817) 761-3777

This Statement of Additional Information is not a prospectus, and it should
be read in conjunction with the prospectus of the Avondale Total Return Fund.
Copies of the prospectus are available by calling (817) 761-3777 or (800)
385-7003.

TABLE OF CONTENTS

Page

Investment Objective and Policies............................. B-2
Investment Restrictions....................................... B-4
Distributions and Tax Information............................. B-6
Management......................... .......................... B-9
The Fund's Investment Manager................................ B-12
The Fund's Administrator...................................... B-12
The Fund's Distributor........................................ B-13
Execution of Portfolio Transactions........................... B-13
Additional Purchase and Redemption Information................ B-15
Determination of Share Price.................................. B-17
Performance Information....................................... B-17
General Information........................................... B-18
Financial Statements . . . . . . . . . . . . . . . . B-20
Appendix . . . . . . . . . . . . . . . . . . . . . . . B-20

INVESTMENT OBJECTIVE AND POLICIES

The Avondale Total Return Fund (the "Fund") is a mutual fund with the
investment objective of seeking the combination of income and capital
appreciation that will produce the maximum total return consistent with
reasonable risk. The Fund seeks to

B-1
<PAGE>

achieve its objective by investing primarily in equity securities (common and
preferred stocks) and higher quality fixed income obligations. The balance
between debt and equity securities may be adjusted based upon the market
interpretation of the Investment Manager of the Fund. The following discussion
supplements the discussion of the Fund's investment objective and policies as
set forth in the Prospectus. There can be no assurance the objective of the Fund
will be attained.

Repurchase Agreements

The Fund may enter into repurchase agreements as discussed in the
Prospectus. Under such agreements, the seller of the security agrees to
repurchase it at a mutually agreed upon time and price. The repurchase price may
be higher than the purchase price, the difference being income to the Fund, or
the purchase and repurchase prices may be the same, with interest at a stated
rate due to the Fund together with the repurchase price on repurchase. In either
case, the income to the Fund is unrelated to the interest rate on the U.S.
Government security itself. Such repurchase agreements will be made only with
banks with assets of $500 million or more that are insured by the Federal
Deposit Insurance Corporation or with Government securities dealers recognized
by the Federal Reserve Board and registered as broker-dealers with the
Securities and Exchange Commission ("SEC") or exempt from such registration. The
Fund will generally enter into repurchase agreements of short durations, from
overnight to one week, although the underlying securities generally have longer
maturities. The Fund may not enter into a repurchase agreement with more than
seven days to maturity if, as a result, more than 15% of the value of the Fund's
total assets would be invested in illiquid securities including such repurchase
agreements.

For purposes of the Investment Company Act of 1940 (the "1940 Act"), a
repurchase agreement is deemed to be a loan from the Fund to the seller of the
U.S. Government security subject to

B-2

<PAGE>

the repurchase agreement. It is not clear whether a court would consider the
U.S. Government security acquired by the Fund subject to a repurchase agreement
as being owned by the Fund or as being collateral for a loan by the Fund to the
seller. In the event of the commencement of bankruptcy or insolvency proceedings
with respect to the seller of the U.S. Government security before its repurchase
under a repurchase agreement, the Fund may encounter delays and incur costs
before being able to sell the security. Delays may involve loss of interest or a
decline in price of the U.S. Government security. If a court characterizes the
transaction as a loan and the Fund has not perfected a security interest in the
U.S. Government security, the Fund may be required to return the security to the
seller's estate and be treated as an unsecured creditor of the seller. As an
unsecured creditor, the Fund would be at the risk of losing some or all of the
principal and income involved in the transaction. As with any unsecured debt
instrument purchased for the Fund, the investment manager seeks to minimize the
risk of loss through repurchase agreements by analyzing the creditworthiness of
the obligor, in this case the seller of the U.S. Government security.

Apart from the risk of bankruptcy or insolvency proceedings, there is
also the risk that the seller may fail to repurchase the security. However, the
Fund will always receive as collateral for any repurchase agreement to which it
is a party securities acceptable to it, the market value of which is equal to at
least 100% of the amount invested by the Fund plus accrued interest, and the
Fund will make payment against such securities only upon physical delivery or
evidence of book entry transfer to the account of its Custodian. If the market
value of the U.S. Government security subject to the repurchase agreement
becomes less than the repurchase price (including interest), the Fund will
direct the seller of the U.S. Government security to deliver additional
securities so that the market value of all securities subject to the repurchase
agreement will equal or exceed the repurchase price. It is possible that the
Fund will be unsuccessful in seeking to impose on the seller a contractual
obligation to deliver additional securities.

Lending of Portfolio Securities

As noted in the Prospectus, the Fund may lend up to 30% of its
portfolio securities in order to generate additional income.

B-3
<PAGE>

The Fund may pay reasonable administrative and custodial fees in connection with
a loan and may pay a negotiated portion of the income earned on the cash to the
borrower or placing broker. Loans are subject to termination at the option of
the Fund or the borrower at any time.

When-Issued Securities

The Fund may from time to time purchase securities on a "when-issued"
basis. The price of such securities, which may be expressed in yield terms, is
fixed at the time the commitment to purchase is made, but delivery and payment
for the when-issued securities take place at a later date. Normally, the
settlement date occurs within one month of the purchase; during the period
between purchase and settlement, no payment is made by the Fund to the issuer
and no interest accrues to the Fund. To the extent that assets of the Fund are
held in cash pending the settlement of a purchase of securities, the Fund would
earn no income; however, it is the Fund's intention to be fully invested to the
extent practicable and subject to the policies stated above. While when-issued
securities may be sold prior to the settlement date, the Fund intends to
purchase such securities with the purpose of actually acquiring them unless a
sale appears desirable for investment reasons. At the time the Fund makes the
commitment to purchase a security on a when-issued basis, it will record the
transaction and reflect the value of the security in determining its net asset
value. The market value of the when-issued securities may be more or less than
the purchase price. The Fund does not believe that its net asset value or income
will be adversely affected by its purchase of securities on a when-issued basis.
The Fund will establish a segregated account with its Custodian in which it will
maintain liquid assets equal in value to commitments for when-issued securities.
Such segregated assets either will mature or, if necessary, be sold on or before
the settlement date.

Foreign Securities

The Fund may invest up to 15% of its total assets in foreign securities.
Foreign economies may differ from the U.S. economy; individual foreign companies
may differ from domestic companies in the same industry and foreign currencies
maybe stronger or weaker than the U.S. dollar. An investment may be affected by

B-4

<PAGE>

changes in currency rates and in exchange control regulations, and the Fund may
incur transaction charges in exchanging currencies. Foreign companies are
frequently not subject to the accounting and financial reporting standards
applicable to domestic companies, and there may be less information available
about foreign issuers. Foreign stock markets may have substantially less volume
than the New York Stock Exchange, and securities of foreign issuers may be
generally less liquid and more volatile than those of comparable domestic
issuers. There is frequently less government regulation of exchanges,
broker-dealers and issuers than in the United States. In addition, investments
in foreign countries are subject to the possibility of expropriation or
confiscatory taxation, political or social instability or diplomatic
developments that could adversely affect the value of those investments.

INVESTMENT RESTRICTIONS

The following policies and investment restrictions have been adopted by
the Fund and (unless otherwise noted) are fundamental and cannot be changed
without the affirmative vote of a majority of the Fund's outstanding voting
securities as defined in the 1940 Act. The Fund may not:

1. With respect to 75% of its total assets: (a) invest more than 5% of
its total assets (taken at market value at the time of investment) in the
securities of any one issuer, or (b) acquire more than 10% of the outstanding
voting securities of any one issuer (at the time of acquisition); except that
this restriction does not apply to securities issued or guaranteed by the United
States Government or its agencies or instrumentalities.

2. Make loans to others, except (a) through the purchase of debt
securities in accordance with its investment objectives and policies, (b)
through the lending of its portfolio securities as described above and in its
Prospectus, or (c) to the extent the entry into a repurchase agreement is deemed
to be a loan.

3. (a) Borrow money, except temporarily for extraordinary or emergency
purposes from a bank and then not in excess of 10% of its total assets (at the
lower of cost or fair market value). Any such borrowing will be made only if
immediately thereafter

B-5

<PAGE>

there is an asset coverage of at least 300% of all borrowings, and no additional
investments may be made while any such borrowings are in excess of 5% of total
assets.

(b) Mortgage, pledge or hypothecate any of its assets
except in connection with any such borrowings.

4. Purchase securities on margin, sell securities short, participate on
a joint or joint and several basis in any securities trading account, or
underwrite securities. (Does not preclude the Fund from obtaining such
short-term credit as may be necessary for the clearance of purchases and sales
of its portfolio securities.)

5. Buy or sell interests in oil, gas or mineral exploration or
development programs, or real estate. (Does not preclude investments in
marketable securities of issuers engaged in such activities.)

6. Purchase or hold securities of any issuer, if, at the time of
purchase or thereafter, any of the Trustees or officers of the Trust or the
Fund's investment manager owns beneficially more than 1/2 of 1%, and all such
Trustees or officers holding more than 1/2 of 1% together own beneficially more
than 5% of the issuer's securities.

7. Purchase or sell commodities or commodity contracts or invest in put,
call, straddle or spread options. (As a matter of operating policy, the Board of
Trustees may authorize the Fund to engage in certain activities involving
options and/or futures for bona fide hedging purposes; any such authorization
will be accompanied by appropriate notification to shareholders.)

8. Invest, in the aggregate, more than 10% of its total assets in
securities with legal or contractual restrictions on resale, securities which
are not readily marketable and repurchase agreements with more than seven days
to maturity.

9. Invest in any issuer for purposes of exercising control
or management.

10. Invest more than 25% of the market value of its assets
in the securities of companies engaged in any one industry.

B-6

<PAGE>

(Does not apply to investment in the securities of the U.S. Government, its
agencies or instrumentalities.)

11. Issue senior securities, as defined in the 1940 Act, except that
this restriction shall not be deemed to prohibit the Fund from (a) making any
permitted borrowings, mortgages or pledges, or (b) entering into repurchase
transactions.

The Fund observes the following policies, which are not deemed fundamental
and which may be changed without shareholder vote.

12. Invest more than 5% of the value of its total assets in securities
of any issuer which has not had a record, together with predecessors, of at
least three years of continuous operation.

13. Invest in securities of other investment companies which would result
in the Fund owning more than 3% of the outstanding voting securities of any one
such investment company, the Fund owning securities of another investment
company having an aggregate value in excess of 5% of the value of the Fund's
total assets, or the Fund owning securities of investment companies in the
aggregate which would exceed 10% of the value of the Fund's total assets.

Under applicable provisions of Texas law, any investment by the Fund in
warrants may not exceed 5% of the value of the Fund's net assets. Included
within that amount, but not to exceed 2% of the value of the Fund's net assets
may be warrants which are not listed on the New York or American Stock Exchange.

If a percentage restriction is adhered to at the time of investment, a
subsequent increase or decrease in a percentage resulting from a change in the
values of assets will not constitute a violation of that restriction, except as
otherwise noted.

DISTRIBUTIONS AND TAX INFORMATION

Distributions

Dividends from net investment income and distributions from

B-7

<PAGE>

net profits from the sale of securities are generally made annually, as
described in the Prospectus after the conclusion of the Fund's fiscal year
(March 31). Also, the Fund expects to distribute any undistributed net
investment income on or about December 31 of each year. Any net capital gains
realized through the period ended October 31 of each year will also be
distributed by December 31 of each year.

Each distribution by the Fund is accompanied by a brief explanation of
the form and character of the distribution. In January of each year the Fund
will issue to each shareholder a statement of the federal income tax status of
all distributions.

Tax Information

Each series of the Trust is treated as a separate entity for federal
income tax purposes. The Fund intends to continue to qualify and elect to be
treated as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"), provided it complies with all
applicable requirements regarding the source of its income, diversification of
its assets and timing of distributions. The Fund's policy is to distribute to
its shareholders all of its investment company taxable income and any net
realized long-term capital gains for each fiscal year in a manner that complies
with the distribution requirements of the Code, so that the Fund will not be
subject to any federal income or excise taxes. To comply with the requirements,
the Fund must also distribute (or be deemed to have distributed) by December 31
of each calendar year (I) at least 98% of its ordinary income for such year,
(ii) at least 98% of the excess of its realized capital gains over its realized
capital losses for the 12-month period ending on October 31 during such year and
(iii) any amounts from the prior calendar year that were not distributed and on
which the Fund paid no federal income tax.

Net investment income consists of interest and dividend income, less
expenses. Net realized capital gains for a fiscal period are computed by taking
into account any capital loss carryforward of the Fund.

Distributions of net investment income and net short-term
capital gains are taxable to shareholders as ordinary income. In

B-8

<PAGE>

the case of corporate shareholders, a portion of the distributions may qualify
for the intercorporate dividends-received deduction to the extent the Fund
designates the amount distributed as a qualifying dividend. The aggregate amount
so designated cannot, however, exceed the aggregate amount of qualifying
dividends received by the Fund for its taxable year. In view of the Fund's
investment policy, it is expected that dividends from domestic corporations will
be part of the Fund's gross income and that, accordingly, part of the
distributions by the Fund may be eligible for the dividends-received deduction
for corporate shareholders. However, the portion of the Fund's gross income
attributable to qualifying dividends is largely dependent on that Fund's
investment activities for a particular year and therefore cannot be predicted
with any certainty. The deduction may be reduced or eliminated if the Fund
shares held by a corporate investor are treated as debt-financed or are held for
less than 46 days.

Distributions of the excess of net long-term capital gains over net
short-term capital losses are taxable to shareholders as long-term capital
gains, regardless of the length of time they have held their shares. Capital
gains distributions are not eligible for the dividends-received deduction
referred to in the previous paragraph. Distributions of any net investment
income and net realized capital gains will be taxable as described above,
whether received in shares or in cash. Shareholders electing to receive
distributions in the form of additional shares will have a cost basis for
federal income tax purposes in each share so received equal to the net asset
value of a share on the reinvestment date. Distributions are generally taxable
when received. However, distributions declared in October, November or December
to shareholders of record on a date in such a month and paid the following
January are taxable as if received on December 31. Distributions are includable
in alternative minimum taxable income in computing a shareholder's liability for
the alternative minimum tax.

B-9

<PAGE>

or loss from an exchange of Fund shares for shares of another mutual fund, the
sales charge incurred in purchasing the shares that are surrendered will be
excluded from their tax basis to the extent that a sales charge that would
otherwise be imposed in the purchase of the shares received in the exchange is
reduced. Any portion of a sales charge excluded from the basis of the shares
surrendered will be added to the basis of the shares received. Any loss realized
upon a redemption or exchange may be disallowed under certain wash sale rules to
the extent shares of the same Fund are purchased (through reinvestment of
distributions or otherwise) within 30 days before or after the redemption or
exchange.

Under the Code, the Fund will be required to report to the Internal
Revenue Service ("IRS") all distributions of taxable income and capital gains as
well as gross proceeds from the redemption or exchange of Fund shares, except in
the case of exempt shareholders, which includes most corporations. Pursuant to
the backup withholding provisions of the Internal Revenue Code, distributions of
any taxable income and capital gains and proceeds from the redemption of Fund
shares may be subject to withholding of federal income tax at the rate of 31
percent in the case of non-exempt shareholders who fail to furnish the Fund with
their taxpayer identification numbers and with required certifications regarding
their status under the federal income tax law. If the withholding provisions are
applicable, any such distributions and proceeds, whether taken in cash or
reinvested in additional shares, will be reduced by the amounts required to be
withheld. Corporate and other exempt shareholders should provide the Fund with
their taxpayer identification numbers or certify their exempt status in order to
avoid possible erroneous application of backup withholding. The Fund reserves
the right to refuse to open an account for any person failing to provide a
certified taxpayer identification number.

The Fund will not be subject to tax in the Commonwealth of
Massachusetts as long as it qualifies as a regulated investment
company for federal income tax purposes. Distributions and the
transactions referred to in the preceding paragraphs may be
subject to state and local income taxes, and the tax treatment
thereof may differ from the federal income tax treatment.
Moreover, the above discussion is not intended to be a complete
discussion of all applicable federal tax consequences of an

B-10
<PAGE>

investment in the Fund. Shareholders are advised to consult with their own tax
advisers concerning the application of federal, state and local taxes to an
investment in the Fund.

The foregoing discussion of U.S. federal income tax law relates solely to
the application of that law to U.S. citizens or residents and U.S. domestic
corporations, partnerships, trusts and estates. Each shareholder who is not a
U.S. person should consider the U.S. and foreign tax consequences of ownership
of shares of the Fund, including the possibility that such a shareholder may be
subject to a U.S. withholding tax at a rate of 30 percent (or at a lower rate
under an applicable income tax treaty) on amounts constituting ordinary income.

This discussion and the related discussion in the prospectus have been
prepared by Fund management, and counsel to the Fund has expressed no opinion in
respect thereof.

MANAGEMENT

Trustees

The Trustees of the Trust, who were elected for an indefinite term by
the initial shareholders of the Trust, are responsible for the overall
management of the Trust, including general supervision and review of the
investment activities of the Fund. The Trustees, in turn, elect the officers of
the Trust, who are responsible for administering the day-to-day operations of
the Trust and its separate series. The current Trustees and officers and their
affiliations and principal occupations for the past five years are set forth
below.

Steven J. Paggioli,* 46 President and Trustee

479 West 22nd Street, New York, New York 10011. Executive Vice
President, Robert H. Wadsworth & Associates, Inc. (consultants)
since 1986; Executive Vice President of Investment Company
Administration Corporation ("ICAC"; mutual fund administrator and
the Trust's administrator),and Vice President of First Fund
Distributors, Inc. ("FFD"; registered broker-dealer and the Fund's
Distributor) since 1990.

B-11
<PAGE>

Dorothy A. Berry, 52 Trustee

Wildflower Hill, Ancram New York 12502. President, Talon Industries (venture
capital and business consulting); formerly Chief Operating Officer, Integrated
Asset Management (investment advisor and manager) and formerly President, Value
Line, Inc., (investment advisory and financial publishing firm).

Wallace L. Cook, 56 Trustee

30 Rockefeller Plaza, New York, New York 10112. Senior Vice
President, Rockefeller Trust Co. Financial Counselor, Rockefeller
& Co.

Carl A. Froebel, 57 Trustee

333 Technology Dr., Malvern, PA. Managing Director, Premier
Solutions, Ltd. Formerly President and Founder, National Investor
Data Services, Inc. (investment related computer software).

Rowley W.P. Redington, 51 Trustee

260 Washington Street, Newark, New Jersey 07102. Vice President,
PRS of New Jersey, Inc. (management consulting); Chief Financial
Officer, Jersey Electronics, Inc. (formerly ESI, Inc.) (consumer
electronics service and marketing); formerly President, Aveco Inc.
(consumer electronic service and marketing) and formerly Chief
Executive Officer, Rowley Associates (consultants).

Eric M. Banhazl*, 38 Treasurer

2025 E. Financial Way, Suite 101, Glendora, California 91741.
Senior Vice President, Robert H. Wadsworth & Associates, Inc.,
Senior Vice President of ICAC and Vice President of FFD since 1990.

Robin Berger*, 39 Secretary

479 West 22nd St., New York, New York 10011. Vice President, Robert
H. Wadsworth & Associates, Inc. since June, 1993; formerly
Regulatory and Compliance Coordinator, Equitable Capital
Management, Inc. (1991-93).

B-12
<PAGE>

Robert H. Wadsworth*, 56 Vice President

4455 E. Camelback Road, Suite 261E, Phoenix, Arizona 85018.
President of Robert H. Wadsworth & Associates, Inc. since 1982,
President of ICAC and FFD since 1990.

*Indicates an "interested person" of the Trust as defined in the
1940 Act.

Set forth below is the rate of compensation received by the following
Trustees from the Fund and all other portfolios of the Trust. This amount is
allocated among the portfolios. Disinterested trustees are also reimbursed for
expenses in connection with each Board meeting attended. No other compensation
or retirement benefits were received by any Trustee or officer from the Fund or
any other portfolios of the Trust.

Name of Trustee Total Annual Compensation

Dorothy A. Berry $10,000
Wallace L. Cook $10,000
Carl A. Froebel $10,000
Rowley W.P Redington $10,000

During the fiscal year ended March 31, 1996, trustees' fees and expenses in
the amount of $3,308 were allocated to the Fund.

The Fund receives investment advisory services pursuant to agreements
with the Advisor and the Trust. Each such agreement, after its initial term,
continues in effect for successive annual periods so long as such continuation
is approved at least annually by the vote of (1) the Board of Trustees of the
Trust (or a majority of the outstanding shares of the Fund to which the
agreement applies), and (2) a majority of the Trustees who are not interested
persons of any party to the Agreement, in each case cast in person at a meeting
called for the purpose of voting on such approval. Any such agreement may be
terminated at any time, without penalty, by either party to the agreement upon
sixty days' written notice and is automatically terminated in the event of its
"assignment," as defined in the 1940 Act.

B-13
<PAGE>

THE FUND'S INVESTMENT MANAGER

As stated in the Prospectus, investment management services are
provided to the Fund by Herbert R. Smith, Incorporated, the Manager, pursuant to
an Investment Management Agreement. The Agreement continues in effect from year
to year so long as such continuation is approved at least annually by (1) the
Board of Trustees of the Trust or the vote of a majority of the outstanding
shares of the Fund, and (2) a majority of the Trustees who are not interested
persons of any party to the Agreement, in each case cast in person at a meeting
called for the purpose of voting on such approval. The Agreement may be
terminated at any time, without penalty, by either the Fund or the Manager upon
sixty days' written notice and is automatically terminated in the event of its
assignment as defined in the 1940 Act.

For the fiscal years ended March 31, 1994, March 31, 1995, and March
31, 1996, the Manager received investment management fees of $58,018, $44,869
and $58,529 under the Agreement.

Herbert R. Smith,Incorporated is independently owned by its officers.
Herbert R. Smith is the Chairman, Chief Executive Officer and a Director of the
Manager and owns a controlling interest in the Investment Manager.

The use of the name "Avondale" by the Fund is pursuant to a license
granted by the Investment Manager, and in the event the Investment Management
Agreement with the Fund is terminated, the Investment Manager has reserved the
right to require the Fund to remove any references to the name "Avondale."

THE FUND'S ADMINISTRATOR

The Fund has an Administration Agreement with Investment Company
Administration Corporation (the "Administrator"), a corporation owned and
controlled by Messrs. Banhazl, Paggioli and Wadsworth with offices at 4455 E.
Camelback Rd., Ste. 261-E, Phoenix, AZ 85018. The Administration Agreement
provides that the Administrator will prepare and coordinate reports and other
materials supplied to the Trustees; prepare and/or supervise the preparation and
filing of all securities filings, periodic financial reports, prospectuses,
statements of additional information, marketing materials, tax returns,
shareholder reports

B-14
<PAGE>

and other regulatory reports or filings required of the Fund; prepare all
required filings necessary to maintain the Fund's qualification and/or
registration to sell shares in all states where the Fund currently does, or
intends to do business; coordinate the preparation, printing and mailing of all
materials (e.g., Annual Reports) required to be sent to shareholders; coordinate
the preparation and payment of Fund related expenses; monitor and oversee the
activities of the Fund's servicing agents (i.e., transfer agent, custodian, fund
accountants, etc.); review and adjust as necessary the Fund's daily expense
accruals; and perform such additional services as may be agreed upon by the Fund
and the Administrator. For its services, the Administrator receives an annual
fee equal to the greater of .15% of the Fund's average daily net assets or
$30,000, provided that if the Fund's annual operating expenses exceed $90,000
after waiver of the Investment Manager's fee, and if the net assets of the Fund
are $5 million or less, the Administrator will waive its fee in an amount equal
to such excess.

During each of the fiscal years ended March 31, 1996, March 31, 1995 and March
31, 1994, respectively, the Administrator and its predecessor received fees of
$30,000.

THE FUND'S DISTRIBUTOR

First Fund Distributors, Inc., (the "Distributor"), a corporation owned
by Mr. Banhazl, Mr. Paggioli and Mr. Wadsworth, acts as the Fund's principal
underwriter in a continuous public offering of the Fund's shares. The
Distribution Agreement between the Fund and the Distributor continues in effect
for periods not exceeding one year if approved at least annually by (I) the
Board of Trustees or the vote of a majority of the outstanding shares of the
Fund (as defined in the 1940 Act) and (ii) a majority of the Trustees who are
not interested persons of any such party, in each case cast in person at a
meeting called for the purpose of voting on such approval. The Distributing
Agreement may be terminated without penalty by the parties thereto upon sixty
days' written notice, and is automatically terminated in the event of its
assignment as defined in the 1940 Act.

EXECUTION OF PORTFOLIO TRANSACTIONS

Pursuant to the Investment Management Agreement, the Manager

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determines which securities are to be purchased and sold by the Fund and which
broker-dealers will be used to execute the Fund's portfolio transactions.
Purchases and sales of securities in the over-the-counter market will be
executed directly with a "market-maker" unless, in the opinion of the Manager, a
better price and execution can otherwise be obtained by using a broker for the
transaction.

Purchases of portfolio securities for the Fund also may be made
directly from issuers or from underwriters. Where possible, purchase and sale
transactions will be effected through dealers (including banks) which specialize
in the types of securities which the Fund will be holding, unless better
executions are available elsewhere. Dealers and underwriters usually act as
principal for their own account. Purchases from underwriters will include a
concession paid by the issuer to the underwriter and purchases from dealers will
include the spread between the bid and the asked price. If the execution and
price offered by more than one broker, dealer or underwriter are comparable, the
order may be allocated to a broker, dealer or underwriter that has provided
research or other services as discussed below.

In placing portfolio transactions, the Manager will use its best
efforts to choose a broker-dealer capable of providing the services necessary to
obtain the most favorable price and execution available. The full range and
quality of services available will be considered in making these determinations,
such as the size of the order, the difficulty of execution, the operational
facilities of the firm involved, the firm's risk in positioning a block of
securities, and other factors. In those instances where it is reasonably
determined that more than one broker-dealer can offer the most favorable price
and execution available, consideration may be given to those broker-dealers
which furnish or supply research and statistical information to the Manager that
it may lawfully and appropriately use in its investment advisory capacities, as
well as provide other services in addition to execution services. The Manager
considers such information, which is in addition to and not in lieu of the
services required to be performed by it under its Agreement with the Fund, to be
useful in varying degrees, but of indeterminable value. Portfolio transactions
may be placed with broker-dealers who sell shares of the Fund subject to rules
adopted by the National Association of Securities Dealers, Inc.

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<PAGE>

While it is the Fund's general policy to seek first to obtain the most
favorable price and execution available, in selecting a broker-dealer to execute
portfolio transactions for the Fund, weight is also given to the ability of a
broker-dealer to furnish brokerage and research services to the Fund or to the
Manager, even if the specific services are not directlt useful to the Fund and
may be useful to the Manager in advising other clients. In negotiating
commissions with a broker or evaluating the spread to be paid to a dealer, the
Fund may therefore pay a higher commission or spread than would be the case if
no weight were given to the furnishing of these supplemental services, provided
that the amount of such commission or spread has been determined in good faith
by the Manager to be reasonable in relation to the value of the brokerage and/or
research services provided by such broker-dealer. The standard of reasonableness
is to be measured in light of the Manager's overall responsibilities to the
Fund. In this regard, during the fiscal year ended March 31, 1996, substantially
all of the brokerage commissions paid by the Fund were directed to the selected
brokers because of research services provided and were effected at rates
believed by the Manager to be higher than otherwise obtainable, but reasonable
in relation to the services provided. The services obtained by this allocation
of brokerage included the Bridge Trading System software and data access fees
and research reports from William O'Neil & Co.

Investment decisions for the Fund are made independently from those of
other client accounts or mutual funds ("Funds") managed or advised by the
Manager. Nevertheless, it is possible that at times identical securities will be
acceptable for both the Fund and one or more of such client accounts. In such
event, the position of the Fund and such client account(s) in the same issuer
may vary and the length of time that each may choose to hold its investment in
the same issuer may likewise vary. However, to the extent any of these client
accounts seeks to acquire the same security as the Fund at the same time, the
Fund may not be able to acquire as large a portion of such security as it
desires, or it may have to pay a higher price or obtain a lower yield for such
security. Similarly, the Fund may not be able to obtain as high a price for, or
as large an execution of, an order to sell any particular security at the same
time. If one or more of such client accounts simultaneously purchases or sells
the same security that the Fund is purchasing or selling, each day's
transactions in such security will be allocated between the Fund and all such
client accounts in a manner deemed

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<PAGE>

equitable by the Manager, taking into account the respective sizes of the
accounts and the amount being purchased or sold. It is recognized that in some
cases this system could have a detrimental effect on the price or value of the
security insofar as the Fund is concerned. In other cases, however, it is
believed that the ability of the Fund to participate in volume transactions may
produce better executions for the Fund.

The Fund does not use the Distributor to execute its portfolio
transactions. For the fiscal years ended March 31, 1994, March 31, 1995, and
March 31, 1996, respectively, the aggregate brokerage commissions paid by the
Fund were $17,664, $12,690 and $15,895.

The Fund does not effect securities transactions through brokers solely
for selling shares of the Fund, although the Fund may consider the sale of
shares as a factor in allocating brokerage. However, as stated above,
broker-dealers who execute brokerage transactions may effect purchases of shares
of the Fund for their customers.

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION

The Trust reserves the right in its sole discretion (I) to suspend the
continued offering of the Fund's shares, (ii) to reject purchase orders in whole
or in part when in the judgment of the Manager or the Distributor such rejection
is in the best interest of the Fund, and (iii) to reduce or waive the minimum
for initial and subsequent investments for certain fiduciary accounts or under
circumstances where certain economies can be achieved in sales of the Fund's
shares.

The Fund issues shares for consideration other than cash only where there
is a bona fide reorganization, statutory merger, or where the securities to be
acquired meet the investment objectives and policies of the Fund, are acquired
for investment and not for resale, and liquid and not restricted as to transfer
either by law or market liquidity, and have a value which is readily
ascertainable (and not established only by valuation procedures), as evidenced
by a listing on the American Stock Exchange, the New York Stock Exchange or
NASDAQ.

Payments to shareholders for shares of the Fund redeemed directly from
the Fund will be made as promptly as possible but no

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<PAGE>

later than seven days after receipt by the Fund's Transfer Agent of the written
request in proper form, with the appropriate documentation as stated in the
Prospectus, except that the Fund may suspend the right of redemption or postpone
the date of payment during any period when (a) trading on the New York Stock
Exchange is restricted as determined by the SEC or such Exchange is closed for
other than weekends and holidays; (b) an emergency exists as determined by the
SEC making disposal of portfolio securities or valuation of net assets of the
Fund not reasonably practicable; or (c) for such other period as the SEC may
permit for the protection of the Fund's shareholders. At various times, the Fund
may be requested to redeem shares for which it has not yet received confirmation
of good payment; in this circumstance, the Fund may delay the redemption until
payment for the purchase of such shares has been collected and confirmed to the
Fund.

The Fund intends to pay cash (U.S. dollars) for all shares redeemed,
but, under abnormal conditions which make payment in cash unwise, the Fund may
make payment partly in securities with a current market value equal to the
redemption price. Although the Fund does not anticipate that it will make any
part of a redemption payment in securities, if such payment were made, an
investor may incur brokerage costs in converting such securities to cash. The
Fund has elected to be governed by the provisions of Rule 18f-1 under the 1940
Act, which contains a formula for determining the minimum redemption amounts
that must be paid in cash.

The value of shares on redemption or repurchase may be more or less
than the investor's cost, depending upon the market value of the Fund's
portfolio securities at the time of redemption or repurchase.

As discussed in the Prospectus, the Fund provides a Check-A-Matic Plan
for the convenience of investors who wish to purchase shares of the Fund on a
regular basis. All record keeping and custodial costs of the Check-A-Matic Plan
are paid by the Fund. The market value of the Fund's shares is subject to
fluctuation, so before undertaking any plan for systematic investment, the
investor should keep in mind that this plan does not assure a profit nor protect
against depreciation in declining markets.

DETERMINATION OF SHARE PRICE

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<PAGE>

As noted in the Prospectus, the net asset value and offering price of
shares of the Fund will be determined once daily as of the close of public
trading on the New York Stock Exchange (currently 4:00 p.m. Eastern time) on
each day that the Exchange is open for trading. It is expected that the Exchange
will be closed on Saturdays and Sundays and on New Year's Day, Presidents' Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas. The Fund does not expect to determine the net asset value of its
shares on any day when the Exchange is not open for trading even if there is
sufficient trading in its portfolio securities on such days to materially affect
the net asset value per share.

In valuing the Fund's assets for calculating net asset value, readily
marketable portfolio securities listed on a national securities exchange or on
NASDAQ are valued at the last sale price on the business day as of which such
value is being determined. If there has been no sale on such exchange or on
NASDAQ on such day, the security is valued at the closing bid price on such day.
Readily marketable securities traded only in the over-the-counter market and not
on NASDAQ are valued at the current or last bid price. If no bid is quoted on
such day, the security is valued by such method as the Board of Trustees of the
Trust shall determine in good faith to reflect the security's fair value. All
other assets of each Fund are valued in such manner as the Board of Trustees in
good faith deems appropriate to reflect their fair value.

The net asset value per share of the Fund is calculated as follows: all
liabilities incurred or accrued are deducted from the valuation of total assets
which includes accrued but undistributed income; the resulting net assets are
divided by the number of shares of the Fund outstanding at the time of the
valuation and the result (adjusted to the nearest cent) is the net asset value
per share.

PERFORMANCE INFORMATION

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<PAGE>

return over the most recent four calendar quarters and the period from the
Fund's inception of operations. The Fund may also advertise aggregate and
average total return information over different periods of time.

The Fund's average annual compounded rate of return is determined by
reference to a hypothetical $1,000 investment that includes capital appreciation
and depreciation for the stated period, according to the following formula:

P(1+T)n = ERV

Where: P = a hypothetical initial purchase order of $1,000 from
which the maximum sales load is deducted

T = average annual total return
n = number of years
ERV = ending redeemable value of the hypothetical $1,000
purchase at the end of the period

Aggregate total return is calculated in a similar manner, except that
the results are not annualized. Each calculation assumes that all dividends and
distributions are reinvested at net asset value on the reinvestment dates during
the period.

The average annual compounded rate of returns, or total return, for the
Fund for the one year and five year periods and from the period from inception
of the Fund on October 12, 1988 through June 30, 1996 were 15.43%, 11.17% and
9.88%, respectively.

The Fund's total return may be compared to relevant indices, including
Standard & Poor's 500 Composite Stock Index and indices published by Lipper
Analytical Services, Inc. From time to time, evaluations of a Fund's performance
by independent sources may also be used in advertisements and in information
furnished to present or prospective investors in the Funds.

Investors should note that the investment results of the Fund will
fluctuate over time, and any presentation of the Fund's total return for any
period should not be considered as a representation of what an investment may
earn or what an investor's total return may be in any future period.

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<PAGE>

GENERAL INFORMATION

Investors in the Fund will be informed of the Fund's progress through periodic
reports. Financial statements certified by independent public accountants will
be submitted to shareholders at least annually.

Star Bank N.A., 425 Walnut Street, Cincinnati, OH 45202 acts as Custodian
of the securities and other assets of the Fund. American Data Services, Inc., 24
West Carver St., Huntington, NY 11743 is the Fund's transfer and shareholder
service agent. The Custodian and Transfer Agent do not participate in decisions
relating to the purchase and sale of securities by the Fund.

Tait, Weller & Baker, 121 South Broad Street, Philadelphia, PA 19107, are
the independent auditors for the Fund.

Heller, Ehrman, White & McAuliffe, 333 Bush Street, San Francisco,
California 94104, are legal counsel to the Fund.

The following persons are beneficial owners of more than 5% of the Fund's
outstanding voting securities as of July 11, 1996. An asterisk (*) denotes an
account affiliated with the Fund's investment advisor, officers or trustees:

Trust Company of Texas, Trustee, Humphrey Printing Co. Profit
Sharing Trust, Dallas, TX 75205; 5.364%.

Star Bank, custodian for Ted F Gingrich IRA Account, Yuba City, CA 95991;
5.15%.

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<PAGE>

limited to the assets of the Fund. The Agreement and Declaration of Trust
further provides that the Trust may maintain appropriate insurance (for example,
fidelity bonding and errors and omissions insurance) for the protection of the
Trust, its shareholders, trustees, officers, employees and agents to cover
possible tort and other liabilities. Furthermore, the activities of the Trust as
an investment company would not likely give rise to liabilities in excess of the
Trust's total assets. Thus, the risk of a shareholder incurring financial loss
on account of shareholder liability is limited to circumstances in which both
inadequate insurance exists and the Fund itself is unable to meet its
obligations.

The Trust is registered with the SEC as a management investment company.
Such a registration does not involve supervision of the management or policies
of the Fund. The Prospectus of the Fund and this Statement of Additional
Information omit certain of the information contained in the Registration
Statement filed with the SEC. Copies of such information may be obtained from
the SEC upon payment of the prescribed fee.

FINANCIAL STATEMENTS

The annual report to shareholders for the Fund for the fiscal year ended
March 31, 1996 is a separate document supplied with this Statement of Additional
Information and the financial statements, accompanying notes and report of
independent accountants appearing therein are incorporated by reference in this
Statement of Additional Information.

APPENDIX

Description of Bond Ratings*

Moody's Investors Service

Aaa: Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edge." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most

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<PAGE>

unlikely to impair the fundamentally strong position of such
issues.

Aa: Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuations or protective elements
may be of greater amplitude or there may be other elements present which make
long-term risks appear somewhat larger than in Aaa securities.

A: Bonds which are rated A 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: Bonds which are rated Baa are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.

Ba: Bonds which are rated Ba are judged to have speculative elements: their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.

B: Bonds which are rated B 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: Bonds which are rated Caa are of poor standing. Such issues
may be in default or there may be present elements of danger with
respect to principal or interest.

Ca: Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or

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<PAGE>

have other marked shortcomings.

Standard & Poor's Corporation

AAA: Bonds rated AAA are highest grade debt obligations. This
rating indicates an extremely strong capacity to pay principal and
interest.

AA: Bonds rated AA also qualify as high-quality debt obligations. Capacity to
pay principal and interest is very strong, and in the majority of instances they
differ from AAA issues only in small degree.

A: Bonds rated A have a strong capacity to pay principal and interest, although
they are more susceptible to the adverse effects of changes in circumstances and
economic conditions.

BBB: Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay principal and interest for bonds in
this category than for bonds in the A category.

BB, B, CCC, CC: Bonds rated BB, B, CCC and CC are regarded, on balance, as
predominantly speculative with respect to the issuer's 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 of speculation. While
such bonds will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions.

The ratings from AA to CCC may be modified by the addition of a plus or minus
sign to show relative standing within the major rating categories.

*Ratings are generally given to securities at the time of issuance. While the
rating agencies may from time to time revise such ratings, they undertake no
obligation to do so.

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<PAGE>

STATEMENT OF ADDITIONAL INFORMATION
August 1, 1996
HODGES FUND
a series of
PROFESSIONALLY MANAGED PORTFOLIOS
2905 Maple Avenue
Dallas, Texas 75201
(800) 388-8512

This Statement of Additional Information is not a prospectus and it
should be read in conjunction with the prospectus of the Hodges Fund (the
"Fund"). A copy of the prospectus of the Fund dated August 1, 1996 is available
by calling (800) 388-8512 or (800) 385-7003.

TABLE OF CONTENTS

Page

The Trust . . . . . . . . . . . . . . . . . . . . . . . . B-2
Investment Objective and Policies . . . . . . . . . . . . B-2
Investment Restrictions . . . . . . . . . . . . . . . . . B-5
Distributions and Tax Information . . . . . . . . . . . . B-7
Trustees and Officers . . . . . . . . . . . . . . . . . . B-11
The Fund's Investment Advisor . . . . . . . . . . . . . . B-12
The Fund's Manager . . . . . . . . . . . . . . . . . . . B-12
The Fund's Distributor. . . . . . . . . . . . . . . . . . . B-13
Execution of Portfolio Transactions . . . . . . . . . . . B-13
Additional Purchase and Redemption Information . . . . . B-16
Determination of Share Price . . . . . . . . . . . . . . B-17
Performance Information . . . . . . . . . . . . . . . . . B-17
General Information . . . . . . . . . . . . . . . . . . . B-18
Appendix . . . . . . . . . . . . . . . . . . . . . . . . B-20

<PAGE>

THE TRUST

Professionally Managed Portfolios (the "Trust") is an open-end
management investment company organized as a Massachusetts business trust. The
Trust consists of various series which represent separate investment portfolios.
This Statement of Additional Information relates only to the Hodges Fund series
(the "Fund").

INVESTMENT OBJECTIVE AND POLICIES

The Hodges Fund (the "Fund") is a mutual fund with the investment
objective of seeking capital appreciation. The following discussion supplements
the discussion of the Fund's investment objective and policies as set forth in
the Prospectus. There can be no assurance the objective of the Fund will be
attained.

Repurchase Agreements

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<PAGE>

For purposes of the Investment Company Act of 1940 (the "1940 Act"), a
repurchase agreement is deemed to be a loan from the Fund to the seller of the
U.S. Government security subject to the repurchase agreement. It is not clear
whether a court would consider the U.S. Government security acquired by the Fund
subject to a repurchase agreement as being owned by the Fund or as being
collateral for a loan by the Fund to the seller. In the event of the
commencement of bankruptcy or insolvency proceedings with respect to the seller
of the U.S. Government security before its repurchase under a repurchase
agreement, the Fund may encounter delays and incur costs before being able to
sell the security. Delays may involve loss of interest or a decline in price of
the U.S. Government security. If a court characterizes the transaction as a loan
and the Fund has not perfected a security interest in the U.S. Government
security, the Fund may be required to return the security to the seller's estate
and be treated as an unsecured creditor of the seller. As an unsecured creditor,
the Fund would be at the risk of losing some or all of the principal and income
involved in the transaction. As with any unsecured debt instrument purchased for
the Fund, the investment manager seeks to minimize the risk of loss through
repurchase agreements by analyzing the creditworthiness of the obligor, in this
case the seller of the U.S. Government security.

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When-Issued Securities

The Fund may from time to time purchase securities on a "when-issued"
basis. The price of such securities, which may be expressed in yield terms, is
fixed at the time the commitment to purchase is made, but delivery and payment
for the when-issued securities take place at a later date. Normally, the
settlement date occurs within one month of the purchase; during the period
between purchase and settlement, no payment is made by the Fund to the issuer
and no interest accrues to the Fund. To the extent that assets of the Fund are
held in cash pending the settlement of a purchase of securities, the Fund would
earn no income; however, it is the Fund's intention to be fully invested to the
extent practicable and subject to the policies stated above. While when-issued
securities may be sold prior to the settlement date, the Fund intends to
purchase such securities with the purpose of actually acquiring them unless a
sale appears desirable for investment reasons. At the time the Fund makes the
commitment to purchase a security on a when-issued basis, it will record the
transaction and reflect the value of the security in determining its net asset
value. The market value of the when-issued securities may be more or less than
the purchase price. The Fund does not believe that its net asset value or income
will be adversely affected by its purchase of securities on a when-issued basis.
The Fund will establish a segregated account with its Custodian in which it will
maintain liquid assets equal in value to commitments for when-issued securities.
Such segregated securities either will mature or, if necessary, be sold on or
before the settlement date.

U. S. Government Securities

U.S. Government securities in which the Fund may invest include direct
obligations issued by the U.S. Treasury, such as Treasury bills, certificates of
indebtedness, notes and bonds. U.S. Government agencies and instrumentalities
that issue or guarantee securities include, but are not limited to, the Federal
Housing Administration, Federal National Mortgage Association, Federal Home Loan
Banks, Government National Mortgage Association, International Bank for
Reconstruction and Development and Student Loan Marketing Association.

All Treasury securities are backed by the full faith and

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<PAGE>

credit of the United States. Obligations of U.S. Government agencies and
instrumentalities may or may not be supported by the full faith and credit of
the United States. Some, such as the Federal Home Loan Banks, are backed by the
right of the agency or instrumentality to borrow from the Treasury. Others, such
as securities issued by the Federal National Mortgage Association, are supported
only by the credit of the instrumentality and not by the Treasury. If the
securities are not backed by the full faith and credit of the United States, the
owner of the securities must look principally to the agency issuing the
obligation for repayment and may not be able to assert a claim against United
States in the event that the agency or instrumentality does not meet its
commitment.

Among the U.S. Government securities that may be purchased by the Fund are
"mortgage-backed securities" of the Government National Mortgage Association
("Ginnie Mae"), the Federal Home Loan Mortgage Association ("Freddie Mac") and
the Federal National Mortgage Association ("Fannie Mae"). These mortgage-backed
securities include "pass-through" securities and "participation certificates,"
both of which represent pools of mortgages that are assembled, with interests
sold in the pool. Payments of principal (including prepayments) and interest by
individual mortgagors are "passed through" to the holders of interests in the
pool; thus each payment to holders may contain varying amounts of principal and
interest. Prepayments of the mortgages underlying these securities may result in
the Fund's inability to reinvest the principal at comparable yields.
Mortgage-backed securities also include "collateralized mortgage obligations,"
which are similar to conventional bonds in that they have fixed maturities and
interest rates and are secured by groups of individual mortgages. Timely payment
of principal and interest on Ginnie Mae pass-throughs is guaranteed by the full
faith and credit of the United States. Freddie Mac and Fannie Mae are both
instrumentalities of the U.S. Government, but their obligations are not backed
by the full faith and credit of the United States.

Securities Lending

Although the Fund's objective is capital appreciation, the Fund
reserves the right to lend its portfolio securities in order to generate
additional income. Securities may be loaned to

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<PAGE>

broker-dealers, major banks or other recognized domestic institutional borrowers
of securities who are not affiliated with the Advisor or Distributor and whose
creditworthiness is acceptable to the Advisor. The borrower must deliver to the
Fund cash or cash equivalent collateral, or provide to the Fund an irrevocable
letter of credit equal in value to at least 100% of the value of the loaned
securities at all times during the loan. During the time the portfolio
securities are on loan, the borrower pays the Fund any interest paid on such
securities. The Fund may invest the cash collateral and earn additional income,
or it may receive an agreed-upon amount of interest income if the borrower has
delivered equivalent collateral or a letter of credit. The Fund may pay
reasonable administrative and custodial fees in connection with a loan and may
pay a negotiated portion of the income earned on the cash to the borrower or
placing broker. Loans are subject to termination at the option of the Fund or
the borrower at any time. It is not anticipated that more than 5% of the value
of the Fund's portfolio securities will be subject to lending.

Options on Securities

The Fund may write (sell) covered call options to a limited extent on its
portfolio securities ("covered options") in an attempt to enhance gain.

When the Fund writes a covered call option, it gives the purchaser of the
option the right, upon exercise of the option, to buy the underlying security at
the price specified in the option (the "exercise price") at any time during the
option period, generally ranging up to nine months. If the option expires
unexercised, the Fund will realize income to the extent of the amount received
for the option (the "premium"). If the call option is exercised, a decision over
which the Fund has no control, the Fund must sell the underlying security to the
option holder at the exercise price. By writing a covered option, the Fund
forgoes, in exchange for the premium less the commission ("net premium") the
opportunity to profit during the option period from an increase in the market
value of the underlying security above the exercise price.

The Fund may terminate its obligation as writer of a call

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option by purchasing an option with the same exercise price and
expiration date as the option previously written. This
transaction is called a "closing purchase transaction."

Closing sale transactions enable the Fund immediately to realize gains or
minimize losses on its options positions. There is no assurance that a liquid
secondary market on an options exchange will exist for any particular option, or
at any particular time, and for some options no secondary market may exist. In
addition, stock index prices may be distorted by interruptions in the trading of
securities of certain companies or of issuers in certain industries, which could
disrupt trading in option positions on such indices and preclude the Fund from
closing out its options positions. If the Fund is unable to effect a closing
purchase transaction with respect to options it has written, it will not be able
to terminate its obligations or minimize its losses under such options prior to
their expiration. If the Fund is unable to effect a closing sale transaction
with respect to options that it has purchased, it would have to exercise the
option in order to realize any profit.

The hours of trading for options may not conform to the hours during which
the underlying securities are traded. To the extent that the options markets
close before the markets for the underlying securities, significant price and
rate movements may take place in the underlying markets that cannot be reflected
in the options markets. The purchase of options is a highly specialized activity
which involves investment techniques and risks different from those associated
with ordinary portfolio securities transactions.

Options on Securities Indices

The Fund may write (sell) covered call options on securities indices in an
attempt to increase gain. A securities index option written by the Fund would
obligate it, upon exercise of the options, to pay a cash settlement, rather than
to deliver actual securities, to the option holder. Although the Fund will not
ordinarily own all of the securities comprising the stock indices on which it
writes call options, such options will usually be written on those indices which
correspond most closely to the composition of the Fund's portfolio. As with the
writing of covered call options on securities, the Fund will realize a

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<PAGE>

gain in the amount of the premium received upon writing an option if the value
of the underlying index increases above the exercise price and the option is
exercised, the Fund will be required to pay a cash settlement that may exceed
the amount of the premium received by the Fund. The Fund may purchase call
options in order to terminate its obligations under call options it has written.

The Fund may purchase call and put options on securities indices for the
purpose of hedging against the risk of unfavorable price movements adversely
affecting the value of the Fund's securities or securities the Fund intends to
buy. Securities index options will not be purchased for speculative purposes.
Unlike an option on securities, which gives the holder the right to purchase or
sell specified securities at a specified price, an option on a securities index
gives the holder the right, upon the exercise of the option, to receive a cash
"exercise settlement amount" equal to (i) the difference between the exercise
price of the option and the value of the underlying securities index on the
exercise date multiplied by (ii) a fixed "index multiplier."

A securities index fluctuates with changes in the market value of the
securities included in the index. For example, some securities index options are
based on a broad market index such as the Standard & Poor's 500 or the Value
Line Composite Index, or a narrower market index such as the Standard & Poor's
100. Indices may also be based on industry or market segments.

The Fund may purchase put options in order to hedge against an anticipated
decline in stock market prices that might adversely affect the value of the
Fund's portfolio securities. If the Fund purchases a put option on a stock
index, the amount of payment it receives on exercising the option depends on the
extent of any decline in the level of the stock index below the exercise price.
Such payments would tend to offset a decline in the value of the Fund's
portfolio securities. If, however, the level of the stock index increases and
remains above the exercise price while the put option is outstanding, the Fund
will not be able to profitably exercise the option and will lose the amount of
the premium and any transaction costs. Such loss may be partially offset by an
increase in the value of the Fund's portfolio securities. The Fund may write put
options on stock

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<PAGE>

indices in order to close out positions in stock index put
options which it has purchased.

The Fund may purchase call options on stock indices in order to participate
in an anticipated increase in stock market prices or to lock in a favorable
price on securities that it intends to buy in the future. If the Fund purchases
a call option on a stock index, the amount of the payment it receives upon
exercising the option depends on the extent of any increase in the level of the
stock index above the exercise price. Such payments would in effect allow the
Fund to benefit from stock market appreciation even though it may not have had
sufficient cash to purchase the underlying stocks. Such payments may also offset
increases in the price of stocks that the Fund intends to purchase. If, however,
the level of the stock index declines and remains below the exercise price while
the call option is outstanding, the Fund will not be able to exercise the option
profitably and will lose the amount of the premium and transaction costs. Such
loss may be partially offset by a reduction in the price the Fund pays to buy
additional securities for its portfolio. The Fund may write call options on
stock indices in order to close out positions in stock index call options which
it has purchased.

The effectiveness of hedging through the purchase of options on securities
indices will depend upon the extent to which price movements in the portion of
the securities portfolio being hedged correlate with price movements in the
selected stock index. Perfect correlation is not possible because the securities
held or to be acquired by the Fund will not exactly match the composition of the
stock indices on which the options are available. In addition, the purchase of
stock index options involves the risk that the premium and transaction costs
paid by the Fund in purchasing an option will be lost as a result of
unanticipated movements in prices of the securities comprising the stock index
on which the option is based.

INVESTMENT RESTRICTIONS

The following policies and investment restrictions have been adopted by
the Fund and (unless otherwise noted) are fundamental and cannot be changed
without the affirmative vote

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<PAGE>

of a majority of the Fund's outstanding voting securities as
defined in the 1940 Act. The Fund may not:

1. Make loans to others, except (a) through the purchase of debt
securities in accordance with its investment objectives and policies, (b)
through the lending of its portfolio securities as described above and in its
Prospectus, or (c) to the extent the entry into a repurchase agreement is deemed
to be a loan.

2. (a) Borrow money, except temporarily for extraordinary or emergency
purposes from a bank and then not in excess of 10% of its total assets (at the
lower of cost or fair market value). Any such borrowing will be made only if
immediately thereafter there is an asset coverage of at least 300% of all
borrowings, and no additional investments may be made while any such borrowings
are in excess of 5% of total assets.

(b) Mortgage, pledge or hypothecate any of its assets
except in connection with any such borrowings.

3. Purchase securities on margin, participate on a joint or joint and
several basis in any securities trading account, or underwrite securities. (Does
not preclude the Fund from obtaining such short-term credit as may be necessary
for the clearance of purchases and sales of its portfolio securities.)

4. Buy or sell interests in oil, gas or mineral exploration or
development programs or related leases, or real estate. (Does not preclude
investments in marketable securities of issuers engaged in such activities.)

5. Purchase or sell commodities or commodity contracts (As a matter of
operating policy, the Board of Trustees may authorize the Fund to engage in
certain activities regarding futures contracts for bona fide hedging purposes;
any such authorization will be accompanied by appropriate notification to
shareholders).

6. Invest more than 25% of the market value of its assets
in the securities of companies engaged in any one industry.
(Does not apply to investment in the securities of the U.S.
Government, its agencies or instrumentalities.)

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<PAGE>

7. Issue senior securities, as defined in the 1940 Act, except that
this restriction shall not be deemed to prohibit the Fund from (a) making any
permitted borrowings, mortgages or pledges, or (b) entering into options,
futures or repurchase transactions.

8. Invest in any issuer for purposes of exercising control
or management.

The Fund observes the following policies, which are not deemed fundamental
and which may be changed without shareholder vote. The Fund may not:

9. Purchase or hold securities of any issuer, if, at the time of purchase
or thereafter, any of the Trustees or officers of the Trust or the Fund's
investment manager owns beneficially more than 1/2 of 1%, and all such Trustees
or officers holding more than 1/2 of 1% together own beneficially more than 5%
of the issuer's securities.

10. Invest in securities of other investment companies which would
result in the Fund owning more than 3% of the outstanding voting securities of
any one such investment company, the Fund owning securities of another
investment company having an aggregate value in excess of 5% of the value of the
Fund's total assets, or the Fund owning securities of investment companies in
the aggregate which would exceed 10% of the value of the Fund's total assets.

11. Invest, in the aggregate, more than 15% of its total assets in
securities with legal or contractual restrictions on resale, securities which
are not readily marketable and repurchase agreements with more than seven days
to maturity.

The Fund has undertaken to certain state securities
administrators (a) not to purchase the securities of any issuer

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<PAGE>

if, as to seventy-five percent of the assets of the Fund at the time of
purchase, more than ten percent of the voting securities of any issuer would be
held by the Fund and (b) not to invest more than 15 % of the Fund's total assets
in securities of issuers which together with any predecessors have a record of
less than three years continuous operation and in securities of issuers which
are restricted as to disposition.

DISTRIBUTIONS AND TAX INFORMATION

Distributions

Dividends from net investment income and distributions from net profits
from the sale of securities, if any, are generally made annually by the Fund
after the conclusion of its fiscal year (March 31). Also, the Fund expects to
distribute any undistributed net investment income on or about December 31 of
each year. Any net capital gains realized through the twelve month period ended
October 31 of each year will also be distributed by December 31 of each year.

Tax Information

The Fund is treated as a separate entity for federal income tax
purposes. The Fund intends to continue to qualify and elect to be treated as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986 (the "Code"). In order to qualify, the Fund must comply with all applicable
requirements regarding the source of its income, diversification of its assets
and timing of its distributions. The Fund's policy is to distribute to its
shareholders all of its investment company taxable income and any net realized
long-term capital gains for

B-12

<PAGE>

each fiscal year in a manner that complies with the distribution requirements of
the Code, so that the Fund will not be subject to any federal income tax or
excise taxes based on net income. The Fund will generally be subject to federal
income tax on its undistributed net investment income and capital gains. To
avoid federal excise taxes based on its net income, the Fund must distribute (or
be deemed to have distributed) by December 31 of each calendar year (i) at least
98% of its ordinary income for such year, (ii) at least 98% of the excess of its
realized capital gains over its realized capital losses for the 12-month period
ending on October 31 during such year and (iii) any amounts from the prior
calendar year that were not distributed.

Net investment income consists of interest and dividend income and
foreign currency gain, less expenses. Net realized capital gains for a fiscal
period are computed by taking into account any capital loss carryforward of the
Fund.

Distributions of net investment income and the excess of net short-term
capital gain over net long-term capital loss are taxable to shareholders as
ordinary income. In the case of corporate shareholders, a portion of the
distributions may qualify for the intercorporate dividends-received deduction to
the extent the Fund designates the amount distributed as a qualifying dividend.
The aggregate amount so designated cannot, however, exceed the aggregate amount
of qualifying dividends received by the Fund for its taxable year. In view of
the Fund's investment policy, it is expected that dividends from domestic
corporations will be part of the Fund's gross income and that, accordingly, part
of the distributions by the Fund may be eligible for the dividends-received
deduction for corporate shareholders. However, the portion of the Fund's gross
income attributable to qualifying dividends is largely dependent on the Fund's
investment activities for a particular year and therefore cannot be predicted
with any certainty. The deduction may be reduced or eliminated if the Fund
shares held by a corporate investor are treated as debt-financed or are held for
less than 46 days.

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<PAGE>

are not eligible for the dividends-received deduction referred to in the
previous paragraph. Distributions of any net investment income and net realized
capital gains will be taxable as described above, whether received in shares or
in cash. Shareholders electing to receive distributions in the form of
additional shares will have a cost basis for federal income tax purposes in each
share so received equal to the net asset value of a share on the reinvestment
date. Distributions are generally taxable when received. However, distributions
declared in October, November or December to shareholders of record on a date in
such a month and paid the following January are taxable as if received on
December 31. Distributions are includable in alternative minimum taxable income
in computing a shareholder's liability for the alternative minimum tax.

The Fund may write, purchase or sell certain options and futures contracts.
Such transactions are subject to special tax rules that may affect the amount,
timing and character of distributions to shareholders. Unless the Fund is
eligible to make and makes a special election, such contracts that are "Section
1256 contracts" will be "marked-to-market" for federal income tax purposes at
the end of each taxable year, i.e., each contract will be treated as sold for
its fair market value on the last day of the taxable year. In general, unless
the special election referred to in the previous sentence is made, gain or loss
from transactions in such contracts will be 60% long-term and 40% short-term
capital gain or loss. Section 1092 of the Code, which applies to certain
"straddles", may affect the taxation of the Fund's transactions in options and
futures contracts. Under Section 1092 of the Code, the Fund may be required to
postpone recognition for tax purposes of losses incurred in certain closing
transactions.

One of the requirements for qualification as a regulated investment
company is that less than 30% of the Fund's gross income must be derived from
gains from the sale or other disposition of securities held for less than three
months. Accordingly, the Fund may be restricted in effecting closing
transactions within three months after entering into an option contract.

A redemption of Fund shares may result in recognition of a
taxable gain or loss. Any loss realized upon a redemption of

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<PAGE>

shares within six months from the date of their purchase will be treated as a
long-term capital loss to the extent of any amounts treated as distributions of
long-term capital gains during such six-month period. Any loss realized upon a
redemption of Fund shares may be disallowed under certain wash sale rules to the
extent shares of the Fund are purchased (through reinvestment of distributions
or otherwise) within 30 days before or after the redemption.

Under the Code, the Fund will be required to report to the Internal
Revenue Service all distributions of taxable income and capital gains as well as
gross proceeds from the redemption or exchange of Fund shares, except in the
case of exempt shareholders, which includes most corporations. Pursuant to the
backup withholding provisions of the Code, distributions of any taxable income
and capital gains and proceeds from the redemption of Fund shares may be subject
to withholding of federal income tax at the rate of 31 percent in the case of
non-exempt shareholders who fail to furnish the Fund with their taxpayer
identification numbers and with required certifications regarding their status
under the Code. If the withholding provisions are applicable, any such
distributions and proceeds, whether taken in cash or reinvested in additional
shares, will be reduced by the amounts required to be withheld. Corporate and
other exempt shareholders should provide the Fund with their taxpayer
identification numbers or certify their exempt status in order to avoid possible
erroneous application of backup withholding. The Fund reserves the right to
refuse to open an account for any person failing to provide a certified taxpayer
identification number.

The Fund will not be subject to tax in The Commonwealth of
Massachusetts as long as it qualifies as a regulated investment company for
federal income tax purposes. Distributions and the transactions referred to in
the preceding paragraphs may be subject to state and local income taxes, and the
tax treatment thereof may differ from the federal income tax treatment.
Moreover, the above discussion is not intended to be a complete discussion of
all applicable tax consequences of an investment in the Fund. Shareholders are
advised to consult with their own tax advisers concerning the application of
federal, state and local taxes to an investment in the Fund.

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<PAGE>

The foregoing discussion of the Code relates solely to the
application of that law to U.S. citizens or residents and U.S.
domestic corporations, partnerships, trusts and estates. Each
shareholder who is not a U.S. person should consider the U.S. and
foreign tax consequences of ownership of shares of the Fund,
including the possibility that such a shareholder may be subject
to a U.S. withholding tax at a rate of 30 percent (or at a lower
rate under an applicable income tax treaty) on amounts
constituting ordinary income.

This discussion and the related discussion in the prospectus have been
prepared by Fund management, and counsel to the Fund has expressed no opinion in
respect thereof.

MANAGEMENT

Trustees

Steven J. Paggioli,* 46 President and Trustee

479 West 22nd Street, New York, New York 10011. Executive Vice
President, Robert H. Wadsworth & Associates, Inc. (consultants)
since 1986; Executive Vice President of Investment Company
Administration Corporation ("ICAC"; mutual fund administrator and
the Fund's Administrator), and Vice President of First Fund
Distributors, Inc. ("FFD"; registered broker-dealer and the Fund's
Distributor) since 1990.

Dorothy A. Berry, 52 Trustee

Wildflower Hill, Ancram New York 12502. President, Talon Industries

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<PAGE>

(venture capital and business consulting); formerly Chief Operating Officer,
Integrated Asset Management (investment advisor and manager) and formerly
President, Value Line, Inc., (investment advisory and financial publishing
firm).

Wallace L. Cook, 56 Trustee

30 Rockefeller Plaza, New York, New York 10112. Senior Vice
President, Rockefeller Trust Co. Financial Counselor, Rockefeller
& Co.

Carl A. Froebel, 57 Trustee

333 Technology Dr., Malvern, PA. Managing Director, Premier
Solutions, Ltd. Founder and Former President, National Investor
Data Services, Inc. (investment related computer software).

Rowley W.P. Redington, 51 Trustee

Eric M. Banhazl*, 38 Treasurer

2025 E. Financial Way, Suite 101, Glendora, California 91741.
Senior Vice President, Robert H. Wadsworth & Associates, Inc.,
Senior Vice President of ICAC and Vice President of FFD since 1990.

Robin Berger*, 39 Secretary

Robert H. Wadsworth*, 56 Vice President

4455 E. Camelback Road, Suite 261E, Phoenix, Arizona 85018.

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<PAGE>

President of Robert H. Wadsworth & Associates, Inc. since 1982,
President of ICAC and FFD 1990.

*Indicates an "interested person" of the Trust as defined in the
1940 Act.

Set forth below is the rate of compensation received by the following
Trustees from the Fund and all other portfolios of the Trust. This total amount
is allocated among the portfolios. Disinterested trustees are also reimbursed
for expenses in connection with each Board meeting attended. No other
compensation or retirement benefits were received by any Trustee or officer from
the Fund or any other portfolios of the Trust.

Name of Trustee Total Compensation

Dorothy A. Berry $10,000
Wallace L. Cook $10,000
Carl A. Froebel $10,000
Rowley W.P Redington $10,000

During the fiscal year ended March 31, 1996, trustees' fees and expenses in
the amount of $3,209 were allocated to the Fund.

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<PAGE>

Investment Advisor

As stated in the Prospectus, investment advisory services are provided
to the Fund by Hodges Capital Management, Inc., the Advisor, pursuant to an
Investment Advisory Agreement. The Investment Advisory Agreement continues in
effect from year to year so long as such continuation is approved at least
annually by (1) the Board of Trustees of the Trust or the vote of a majority of
the outstanding shares of the Fund, and (2) a majority of the Trustees who are
not interested persons of any party to the Agreement, in each case cast in
person at a meeting called for the purpose of voting on such approval. The
Agreement may be terminated at any time, without penalty, by either the Fund or
the Advisor upon sixty days' written notice and is automatically terminated in
the event of its assignment as defined in the 1940 Act. For the fiscal year
ended March 31, 1994, the Advisor voluntarily waived $43,804 of its advisory fee
of $66,915. The Advisor received advisory fees totalling $73,966 and $94,361 for
the fiscal years ended March 31, 1995 and March 31, 1996, respectively.

The use of the name "Hodges" by the Fund is pursuant to a license
granted by the Advisor, and in the event the Investment Advisory Agreement with
the Fund is terminated, the Advisor has reserved the right to require the Fund
to remove any references to the name "Hodges."

Administrator

The Fund has entered into an Administration Agreement with ICAC, a
corporation owned and controlled by Messrs. Banhazl, Paggioli and Wadsworth. The
Agreement provides that ICAC will prepare and coordinate reports and other
materials supplied to the Trustees; prepare and/or supervise the preparation and
filing of all securities filings, periodic financial reports, prospectuses,
statements of additional information, marketing materials, tax returns,
shareholder reports and other regulatory reports or filings required of the
Fund; prepare all required filings necessary to maintain the Fund's
qualification and/or registration to sell shares in all states where the Fund
currently does, or intends to do business; coordinate the preparation, printing
and mailing of all materials (e.g., Annual Reports) required to be sent to
shareholders; coordinate the preparation and payment of Fund related expenses;
monitor and oversee the activities of the Fund's

B-19

<PAGE>

servicing agents (i.e., transfer agent, custodian, fund accountants, etc.);
review and adjust as necessary the Fund's daily expense accruals; and perform
such additional services as may be agreed upon by the Fund and the Manager. For
its services, ICAC receives a monthly fee at the following annual rate:

Average Net Assets Fee or Fee Rate

Under $15 million $30,000
$15 to $15 million 0.20%
$50 to $100 million 0.15%
$100 to $150 million 0.10%
Over $150 million 0.05%

During the fiscal years ended March 31, 1996, March 31, 1995 and March 31, 1994,
ICAC and its predecessor received fees of $30,476, $30,000 and $30,000
respectively.

Distributor

First Dallas Securities, (the "Distributor"), an affiliate of the
Advisor, acts as the Fund's principal underwriter in a continuous public
offering of the Fund's shares. The Distribution Agreement between the Fund and
the Distributor continues in effect from year to year if approved at least
annually by (i) the Board of Trustees or the vote of a majority of the
outstanding shares of the Fund (as defined in the 1940 Act) and (ii) a majority
of the Trustees who are not interested persons of any such party, in each case
cast in person at a meeting called for the purpose of voting on such approval.
The Distribution Agreement may be terminated without penalty by the parties
thereto upon sixty days' written notice, and is automatically terminated in the
event of its assignment as defined in the 1940 Act. In connection with the
distribution of the Fund's shares, the Distributor received as commissions
$16,914, $10,969 and $7,021 during the fiscal years ended March 31, 1994, March
31, 1995 and March 31, 1996, respectively.

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<PAGE>

expenses incurred for distribution related activities. During the year
ended March 31, 1996, the Fund paid fees of $55,506 to the Distributor, of which
$44,405 was for selling compensation, and $1,033 was for expenses related to
advertising and sales material and $10,068 related to Distributor printing
expenses.

EXECUTION OF PORTFOLIO TRANSACTIONS

Pursuant to the Investment Management Agreement, the Advisor determines
which securities are to be purchased and sold by the Fund and which
broker-dealers will be used to execute the Fund's portfolio transactions.
Purchases and sales of securities in the over-the-counter market will be
executed directly with a "market-maker" unless, in the opinion of the Advisor, a
better price and execution can otherwise be obtained by using a broker for the
transaction.

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<PAGE>

Advisor that it may lawfully and appropriately use in its investment advisory
capacities, as well as provide other services in addition to execution services.
The Advisor considers such

B-22

<PAGE>

information, which is in addition to and not in lieu of the services required to
be performed by it under its Agreement with the Fund, to be useful in varying
degrees, but of indeterminable value. Portfolio transactions also may be placed
with broker-dealers who sell shares of the Fund subject to rules adopted by the
National Association of Securities Dealers, Inc.

Investment decisions for the Fund are made independently from those of
other client accounts or mutual funds ("Funds") managed or advised by the
Advisor. Nevertheless, it is possible that at times identical securities will be
acceptable for both the Fund and one or more of such client accounts or Funds.
In such event, the position of the Fund and such client account(s) or Funds in
the same issuer may vary and the length of time that each may choose to hold its
investment in the same issuer may likewise vary. However, to the extent any of
these client accounts or Funds seeks to acquire the same security as the Fund at
the same time, the Fund may not be able to acquire as large a portion of such
security as it desires, or it may have to pay a higher price or obtain a lower
yield for such security. Similarly, the Fund may not be able to obtain as high a
price for, or as large an execution of, an order to sell any particular security
at the same time. If one or more of such client accounts or Funds simultaneously
purchases or sells the same security that the Fund is purchasing or selling,
each day's transactions in such security will be allocated between the

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<PAGE>

Fund and all such client accounts or Funds in a manner deemed equitable by the
Advisor, taking into account the respective sizes of the accounts and the amount
being purchased or sold. It is recognized that in some cases this system could
have a detrimental effect on the price or value of the security insofar as the
Fund is concerned. In other cases, however, it is believed that the ability of
the Fund to participate in volume transactions may produce better executions for
the Fund.

The Fund does not effect securities transactions through brokers in
accordance with any formula, nor does it effect securities transactions through
such brokers solely for selling shares of the Fund, although the Fund may
consider the sale of shares as a factor in allocating brokerage. However, as
stated above, broker-dealers who execute brokerage transactions may effect
purchase of shares of the Fund for their customers.

During the Fund's fiscal years ended March 31, 1994, 1995 and 1996, the
Distributor received $25,603, $12,756 and $20,198 respectively in brokerage
commissions with respect to Fund portfolio transactions, which constituted all
of the Fund's brokerage commissions during those periods.

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION

The Trust reserves the right in its sole discretion (i) to suspend the
continued offering of the Fund's shares, (ii) to reject purchase orders in whole
or in part when in the judgment of the Advisor or the Distributor such rejection
is in the best interest of the Fund, and (iii) to reduce or waive the minimum
for initial and subsequent investments for certain fiduciary accounts or under
circumstances where certain economies can be achieved in sales of the Fund's
shares.

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<PAGE>

for other than weekends and holidays; (b) an emergency exists as determined by
the SEC making disposal of portfolio securities or valuation of net assets of
the Fund not reasonably practicable; or (c) for such other period as the SEC may
permit for the protection of the Fund's shareholders. At various times, the Fund
may be requested to redeem shares for which it has not yet received confirmation
of good payment; in this circumstance, the Fund may delay the redemption until
payment for the purchase of such shares has been collected and confirmed to the
Fund.

DETERMINATION OF SHARE PRICE

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<PAGE>

Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas. The Fund does not expect to determine the net
asset value of its shares on any day when the Exchange is not open for trading
even if there is sufficient trading in its portfolio securities on such days to
materially affect the net asset value per share.

PERFORMANCE INFORMATION

From time to time, the Fund may state its total return in
advertisements and investor communications. Total return may be stated for any
relevant period as specified in the advertisement or communication. Any
statements of total return will be accompanied by information on the Fund's
average annual compounded rate of return over the most recent four calendar
quarters and the period from the Fund's inception of operations. The Fund may
also advertise aggregate and average total return information over different
periods of time.

The Fund's average annual compounded rate of return is

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<PAGE>

determined by reference to a hypothetical $1,000 investment that includes
capital appreciation and depreciation for the stated period, according to the
following formula:

P(1+T)n = ERV

Where: P = a hypothetical initial purchase order of $1,000
from which the maximum sales load is deducted

T = average annual total return

n = number of years

ERV = ending redeemable value of the
hypothetical $1,000 purchase at the end of the
period

The Fund's average annual total returns for the one year period and for the
period from inception on October 9, 1992 through June 30, 1996 were 28.39% and
15.90%, respectively.

GENERAL INFORMATION

Investors in the Fund will be informed of the Fund's progress

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<PAGE>

through periodic reports. Financial statements certified by independent public
accountants will be submitted to shareholders at least annually.

Star Bank N.A., 425 Walnut St., Cincinnati, OH 45202 acts as Custodian of
the securities and other assets of the Fund. American Data Services, Inc., 24
West Carver St., Huntington, NY 11743 is the Fund's transfer and shareholder
service agent. The Custodian and Transfer Agent do not participate in decisions
relating to the purchase and sale of securities by the Fund.

Tait, Weller & Baker, Two Penn Center Plaza, Philadelphia, PA 19102,
are the independent auditors for the Fund.

*Don W. Hodges, 2905 Maple Ave., Dallas, TX 75201; 9.39%.

Heller, Ehrman, White & McAuliffe, 333 Bush Street, San Francisco,
California 94104, are legal counsel to the Fund.

The shareholders of a Massachusetts business trust could, under certain
circumstances, be held personally liable as partners for its obligations.
However, the Trust's Agreement and Declaration of Trust contains an express
disclaimer of shareholder liability for acts or obligations of the Trust. The
Agreement and Declaration of Trust also provides for indemnification and
reimbursement of expenses out of the Fund's assets for any shareholder held
personally liable for obligations of the Fund or Trust. The Agreement and
Declaration of Trust provides that the Trust shall, upon request, assume the
defense of any claim made against any shareholder for any act or obligation of
the Fund or Trust and satisfy any judgment thereon. All such rights are limited
to the assets of the Fund. The Agreement and Declaration of Trust further
provides that the Trust may maintain appropriate insurance (for example,
fidelity bonding and errors and omissions insurance) for the protection of the
Trust, its shareholders, trustees, officers, employees and agents to cover
possible tort and other liabilities. Furthermore, the activities of the Trust as
an investment company would not likely give rise to liabilities in

B-28

<PAGE>

excess of the Trust's total assets. Thus, the risk of a shareholder incurring
financial loss on account of shareholder liability is limited to circumstances
in which both inadequate insurance exists and the Fund itself is unable to meet
its obligations.

The Trust is registered with the SEC as a management investment
company. Such a registration does not involve supervision of the management or
policies of the Fund. The Prospectus of the Fund and this Statement of
Additional Information omit certain of the information contained in the
Registration Statement filed with the SEC. Copies of such information may be
obtained from the SEC upon payment of the prescribed fee.

FINANCIAL STATEMENTS

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STATEMENT OF ADDITIONAL INFORMATION
August 1, 1996

PERKINS OPPORTUNITY FUND
a series of
PROFESSIONALLY MANAGED PORTFOLIOS
730 East Lake Street
Wayzata, MN 55391-1713
(800) 366-8361
(612) 473-8367

This Statement of Additional Information is not a prospectus and it
should be read in conjunction with the prospectus of the Perkins Opportunity
Fund (the "Fund"). A copy of the prospectus of the Fund dated August 1, 1996 is
available by calling the numbers listed above or (212) 633-9700.

TABLE OF CONTENTS

Page

The Trust . . . . . . . . . . . . . . . . . . . . . . . . B-2
Investment Objective and Policies . . . . . . . . . . . . B-2
Investment Restrictions . . . . . . . . . . . . . . . . . B-8
Distributions and Tax Information . . . . . . . . . . . . B-10
Management . . . . . . . . . . . . . . . . . . . . . . . B-13
The Fund's Investment Advisor . . . . . . . . . . . . . . B-15
The Fund's Administrative Manager . . . . . . . . . . . B-16
The Fund's Distributor. . . . . . . . . . . . . . . . . . . B-17
Execution of Portfolio Transactions . . . . . . . . . . . B-17
Additional Purchase and Redemption Information . . . . . B-20
Determination of Share Price . . . . . . . . . . . . . . B-21
Performance Information . . . . . . . . . . . . . . . . . B-22
General Information . . . . . . . . . . . . . . . . . . . B-23
Financial Statements . . . . . . . . . . . . . . . . .. . B-24

<PAGE>

THE TRUST

INVESTMENT OBJECTIVE AND POLICIES

The Perkins Opportunity Fund (the "Fund") is a mutual fund with the
investment objective of seeking capital appreciation. The following discussion
supplements the discussion of the Fund's investment objective and policies as
set forth in the Prospectus. There can be no assurance the objective of the Fund
will be attained.

Repurchase Agreements

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When-Issued Securities

Securities Lending

Although the Fund's objective is capital appreciation, the Fund
reserves the right to lend its portfolio securities in order to generate
additional income. Securities may be loaned to broker-dealers, major banks or
other recognized domestic institutional borrowers of securities who are not
affiliated with the Advisor or Distributor and whose creditworthiness is
acceptable to the Advisor. The borrower must deliver to the Fund cash or cash
equivalent collateral, or provide to the Fund an irrevocable letter of credit
equal in value to at least 100% of the value of the loaned securities at all
times during the loan, marked to market daily. During the time the portfolio
securities

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are on loan, the borrower pays the Fund any interest paid on such securities.
The Fund may invest the cash collateral and earn additional income, or it may
receive an agreed-upon amount of interest income if the borrower has delivered
equivalent collateral or a letter of credit. The Fund may pay reasonable
administrative and custodial fees in connection with a loan and may pay a
negotiated portion of the income earned on the cash to the borrower or placing
broker. Loans are subject to termination at the option of the Fund or the
borrower at any time. It is not anticipated that more than 5% of the value of
the Fund's portfolio securities will be subject to lending.

Foreign Investments

Although it has no present intention of doing so, the Fund has reserved
the right to invest in foreign securities. Foreign investments can involve
significant risks in addition to the risks inherent in U.S. investments. The
value of securities denominated in or indexed to foreign currencies, and of
dividends and interest from such securities, can change significantly when
foreign currencies strengthen or weaken relative to the U.S. dollar. Foreign
securities markets generally have less trading volume and less liquidity than
U.S. markets, and prices on some foreign markets can be highly volatile. Many
foreign countries lack uniform accounting and disclosure standards comparable to
those applicable to U.S. companies, and it may be more difficult to obtain
reliable information regarding an issuer's financial condition and operations.
In addition, the costs of foreign investing, including withholding taxes,
brokerage commissions, and custodial costs, generally are higher than for U.S.
investments.

Foreign markets may offer less protection to investors than U.S.
markets. Foreign issuers, brokers, and securities markets may be subject to less
government supervision. Foreign security trading practices, including those
involving the release of assets in advance of payment, may invoke increased
risks in the event of a failed trade or the insolvency of a broker-dealer, and
may involve substantial delays. It also may be difficult to enforce legal rights
in foreign countries.

Investing abroad also involves different political and
economic risks. Foreign investments may be affected by actions of

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foreign governments adverse to the interests of U.S. investors, including the
possibility of expropriation or nationalization of assets, confiscatory
taxation, restrictions on U.S. investment or on the ability to repatriate assets
or convert currency into U.S. dollars, or other government intervention. There
may be a greater possibility of default by foreign governments or foreign
government-sponsored enterprises. Investments in foreign countries also involve
a risk of local political, economic, or social instability, military action or
unrest, or adverse diplomatic developments. There is no assurance that an
Adviser will be able to anticipate or counter these potential events and their
impacts on the Fund's share price.

American Depositary Receipts and European Depositary Receipts ("ADRs"
and "EDRs") are certificates evidencing ownership of shares of a foreign-based
issuer held in trust by a bank or similar financial institution. Designed for
use in U.S. and European securities markets, respectively, ADRs and EDRs are
alternatives to the purchase of the underlying securities in their national
market and currencies.

Options on Securities

Although it has no present intention of doing so, the Fund reserves the
right to engage in certain purchases and sales of options on securities. The
Fund may write (i.e., sell) call options ("calls") on equity securities if the
calls are "covered" throughout the life of the option. A call is "covered" if
the Fund owns the optioned securities. When the Fund writes a call, it receives
a premium and gives the purchaser the right to buy the underlying security at
any time during the call period at a fixed exercise price regardless of market
price changes during the call period. If the call is exercised, the Fund will
forgo any gain from an increase in the market price of the underlying security
over the exercise price.

The Fund may purchase a call on securities to effect a "closing
purchase transaction" which is the purchase of a call covering the same
underlying security and having the same exercise price and expiration date as a
call previously written by the Fund on which it wishes to terminate its
obligation. If the Fund is unable to effect a closing purchase transaction, it
will not be able to sell the underlying security until the call

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previously written by the Fund expires (or until the call is exercised and the
Fund delivers the underlying security).

The Fund also may write and purchase put options ("puts"). When the
Fund writes a put, it receives a premium and gives the purchaser of the put the
right to sell the underlying security to the Fund at the exercise price at any
time during the option period. When the Fund purchases a put, it pays a premium
in return for the right to sell the underlying security at the exercise price at
any time during the option period. If any put is not exercised or sold, it will
become worthless on its expiration date. When the Fund writes a put, it will
maintain at all times during the option period, in a segregated account, liquid
assets equal in value to the exercise price of the put.

The Fund's option positions may be closed out only on an exchange which
provides a secondary market for options of the same series, but there can be no
assurance that a liquid secondary market will exist at a given time for any
particular option.

The Fund's custodian, or a securities depository acting for it,
generally acts as escrow agent as to the securities on which the Fund as written
puts or calls, or as to other securities acceptable for such escrow so that no
margin deposit is required of the Fund. Until the underlying securities are
released from escrow, they cannot be sold by the Fund.

In the event of a shortage of the underlying securities deliverable on
exercise of an option, the Options Clearing Corporation has the authority to
permit other, generally comparable securities to be delivered in fulfillment of
option exercise obligations. If the Options Clearing Corporation exercises its
discretionary authority to allow such other securities to be delivered, it may
also adjust the exercise prices of the affected options by setting different
prices at which otherwise ineligible securities may be delivered. As an
alternative to permitting such substitute deliveries, the Options Clearing
Corporation may impose special exercise settlement procedures.

The hours of trading for options may not conform to the
hours during which the underlying securities are traded. To the

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<PAGE>

extent that the options markets close before the markets for the underlying
securities, significant price and rate movements may take place in the
underlying markets that cannot be reflected in the options markets. The purchase
of options is a highly specialized activity which involves investment techniques
and risks different from those associated with ordinary portfolio securities
transactions.

Short Sales

The Fund may seek to hedge investments or realize additional gains
through short sales. The Fund may make short sales, which are transactions in
which the Fund sells a security it does not own, in anticipation of a decline in
the market value of that security. To complete such a transaction, the Fund must
borrow the security to make delivery to the buyer. The Fund than is obligated to
replace the security borrowed by purchasing it at the market price at or prior
to the time of replacement. The price at such time may be more or less than the
price at which the security was sold by the Fund. Until the security is
replaced, the Fund is required to repay the lender any dividends or interest
that accrue during the period of the loan. To borrow the security, the Fund also
may be required to pay a premium, which would increase the cost of the security
sold. The net proceeds of the short sale will be retained by the broker, to the
extent necessary to meet margin requirements, until the short position is closed
out. The Fund also will incur transaction costs in effecting short sales.

The Fund will incur a loss as a result of the short sale if the price
of the security increases between the date of the short sale and the date on
which the Fund replaces the borrowed security. The Fund will realize a gain if
the security declines in price between those dates. The amount of any gain will
be decreased, and the amount of any loss increased by the amount of the premium,
dividends, interest, or expenses the Fund may be required to pay in connection
with a short sale.

No securities will be sold short if, after effect is given to any such
short sale, the total market value of all securities sold short would exceed 25%
of the value of the Fund's net equity. The Fund similarly will limit its short
sales of the securities of any single issuer if the market value of the

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<PAGE>

securities that have been sold short by the Fund would exceed the two percent
(2%) of the value of the Fund's net equity or if such securities would
constitute more than two percent (2%) of any class of the issuer's securities.

Whenever the Fund engages in short sales, its custodian will segregate
liquid assets equal to the difference between (a) the market value of the
securities sold short at the time they were sold short and (b) any cash or U.S.
Government securities required to be deposited with the broker in connection
with the short sale (not including the proceeds from the short sale). The
segregated assets are marked to market daily, provided that at no time will the
amount deposited in it plus the amount deposited with the broker be less than
the market value of the securities at the time they were sold short.

In addition, the Fund may make short sales "against the box," i.e. when
a security identical to one owned by the Fund is borrowed and sold short. If the
Fund enters into a short sale against the box, it is required to segregate
securities equivalent in kind and amount to the securities sold short (or
securities convertible or exchangeable into such securities) and is required to
hold such securities while the short sale is outstanding. The Fund will incur
transaction costs, in connection with opening, maintaining, and closing short
sales against the box.

Leverage Through Borrowing

The Fund may borrow money for leveraging purposes. Leveraging creates
an opportunity for increased net income but, at the same time, creates special
risk considerations. For example, leveraging may exaggerate changes in the net
asset value of Fund shares and in the yield on the Fund's portfolio. Although
the principal of such borrowings will be fixed, the Fund's assets may change in
value during the time the borrowing is outstanding. Leveraging will create
interest expenses for the Fund which can exceed the income from the assets
retained. To the extent the income derived from securities purchased with
borrowed funds exceeds the interest the Fund will have to pay, the Fund's net
income will be greater than if leveraging were not used. Conversely, if the
income from the assets retained with borrowed funds is not sufficient to cover
the cost of leveraging, the net

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<PAGE>

income of the Fund will be less than if leveraging were not used, and therefore
the amount available for distribution to stockholders as dividends will be
reduced.

INVESTMENT RESTRICTIONS

2. (a) Borrow money, except as stated in the Prospectus
and this Statement of Additional Information. Any such borrowing
will be made only if immediately thereafter there is an asset
coverage of at least 300% of all borrowings.

(b) Mortgage, pledge or hypothecate any of its assets
except in connection with any such borrowings.

4. Buy or sell interests in oil, gas or mineral exploration or
development programs or related leases or real estate. (Does not preclude
investments in marketable securities of issuers engaged in such activities.)

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<PAGE>

authorization will be accompanied by appropriate notification to
shareholders).

8. Invest in any issuer for purposes of exercising control
or management.

The Fund observes the following policies, which are not deemed fundamental
and which may be changed without shareholder vote. The Fund may not:

Under applicable provisions of Texas law, any investment by

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the Fund in warrants may not exceed 5% of the value of the Fund's net assets.
Included within that amount, but not to exceed 2% of the value of the Fund's net
assets may be warrants which are not listed on the New York or American Stock
Exchange. Also, as provided for under Texas law, the Fund may not purchase real
estate limited partnership interests.

DISTRIBUTIONS AND TAX INFORMATION

Distributions

Dividends from net investment income and distributions from net profits
from the sale of securities are generally made annually, as described in the
Prospectus after the conclusion of the Fund's fiscal year (March 31). Also, the
Fund expects to distribute any undistributed net investment income on or about
December 31 of each year. Any net capital gains realized through the period
ended October 31 of each year will also be distributed by December 31 of each
year.

Tax Information

Each series of the Trust is treated as a separate entity for federal
income tax purposes. The Fund intends to qualify and elect to be treated as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code") for its fiscal period ended March 31, 1994 and
intends to continue to qualify, provided it complies with all applicable
requirements regarding the source of its income, diversification of its assets
and timing of distributions. The Fund's policy is to distribute to its
shareholders all of its investment company taxable income and any net realized
long-term

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<PAGE>

capital gains for each fiscal year in a manner that complies with the
distribution requirements of the Code, so that the Fund will not be subject to
any federal income or excise taxes. To comply with the requirements, the Fund
must also distribute (or be deemed to have distributed) by December 31 of each
calendar year (i) at least 98% of its ordinary income for such year, (ii) at
least 98% of the excess of its realized capital gains over its realized capital
losses for the 12-month period ending on October 31 during such year and (iii)
any amounts from the prior calendar year that were not distributed and on which
the Fund paid no federal income tax.

Distributions of net investment income and net short-term capital gains
are taxable to shareholders as ordinary income. In the case of corporate
shareholders, a portion of the distributions may qualify for the intercorporate
dividends-received deduction to the extent the Fund designates the amount
distributed as a qualifying dividend. The aggregate amount so designated cannot,
however, exceed the aggregate amount of qualifying dividends received by the
Fund for its taxable year. In view of the Fund's investment policy, it is
expected that dividends from domestic corporations will be part of the Fund's
gross income and that, accordingly, part of the distributions by the Fund may be
eligible for the dividends-received deduction for corporate shareholders.
However, the portion of the Fund's gross income attributable to qualifying
dividends is largely dependent on that Fund's investment activities for a
particular year and therefore cannot be predicted with any certainty. The
deduction may be reduced or eliminated if the Fund shares held by a corporate
investor are treated as debt-financed or are held for less than 46 days.

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<PAGE>

and net realized capital gains will be taxable as described above, whether
received in shares or in cash. Shareholders electing to receive distributions in
the form of additional shares will have a cost basis for federal income tax
purposes in each share so received equal to the net asset value of a share on
the reinvestment date. Distributions are generally taxable when received.
However, distributions declared in October, November or December to shareholders
of record on a date in such a month and paid the following January are taxable
as if received on December 31. Distributions are includable in alternative
minimum taxable income in computing a shareholder's liability for the
alternative minimum tax.

A redemption or exchange of Fund shares may result in recognition of a
taxable gain or loss. Any loss realized upon a redemption or exchange of shares
within six months from the date of their purchase will be treated as a long-term
capital loss to the extent of any amounts treated as distributions of long-term
capital gains during such six-month period. In determining gain or loss from an
exchange of Fund shares for shares of another mutual fund, the sales charge
incurred in purchasing the shares that are surrendered will be excluded from
their tax basis to the extent that a sales charge that would otherwise be
imposed in the purchase of the shares received in the exchange is reduced. Any
portion of a sales charge excluded from the basis of the shares surrendered will
be added to the basis of the shares received. Any loss realized upon a
redemption or exchange may be disallowed under certain wash sale rules to the
extent shares of the same Fund are purchased (through reinvestment of
distributions or otherwise) within 30 days before or after the redemption or
exchange.

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certifications regarding their status under the federal income tax law. If the
withholding provisions are applicable, any such distributions and proceeds,
whether taken in cash or reinvested in additional shares, will be reduced by the
amounts required to be withheld. Corporate and other exempt shareholders should
provide the Fund with their taxpayer identification numbers or certify their
exempt status in order to avoid possible erroneous application of backup
withholding. The Fund reserves the right to refuse to open an account for any
person failing to provide a certified taxpayer identification number.

The Fund will not be subject to tax in the Commonwealth of
Massachusetts as long as it qualifies as a regulated investment company for
federal income tax purposes. Distributions and the transactions referred to in
the preceding paragraphs may be subject to state and local income taxes, and the
tax treatment thereof may differ from the federal income tax treatment.
Moreover, the above discussion is not intended to be a complete discussion of
all applicable federal tax consequences of an investment in the Fund.
Shareholders are advised to consult with their own tax advisers concerning the
application of federal, state and local taxes to an investment in the Fund.

The foregoing discussion of U.S. federal income tax law
relates solely to the application of that law to U.S. citizens or
residents and U.S. domestic corporations, partnerships, trusts
and estates. Each shareholder who is not a U.S. person should
consider the U.S. and foreign tax consequences of ownership of
shares of the Fund, including the possibility that such a
shareholder may be subject to a U.S. withholding tax at a rate of
30 percent (or at a lower rate under an applicable income tax
treaty) on amounts constituting ordinary income.

This discussion and the related discussion in the prospectus have been
prepared by Fund management, and counsel to the Fund has expressed no opinion in
respect thereof.

MANAGEMENT

Trustees

The Trustees of the Trust, who were elected for an indefinite

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term by the initial shareholders of the Trust, are responsible for the overall
management of the Trust, including general supervision and review of the
investment activities of the Fund. The Trustees, in turn, elect the officers of
the Trust, who are responsible for administering the day-to-day operations of
the Trust and its separate series. The current Trustees and officers and their
affiliations and principal occupations for the past five years are set forth
below.

Steven J. Paggioli,* 46 President and Trustee

479 West 22nd Street, New York, New York 10011. Executive Vice
President, Robert H. Wadsworth & Associates, Inc. (consultants)
since 1986; Executive Vice President of Investment Company
Administration Corporation ("ICAC"; mutual fund administration and
the Fund's Administrator), and Vice President of First Fund
Distributors, Inc. ("FFD"; registered broker-dealer and the Fund's
Distributor) since 1990.

Dorothy A. Berry, 52 Trustee

Wallace L. Cook, 56 Trustee

30 Rockefeller Plaza, New York, New York 10112. Senior Vice
President, Rockefeller Trust Co. Financial Counselor, Rockefeller
& Co.

Carl A. Froebel, 57 Trustee

333 Technology Dr., Malvern, PA. Managing Director, Premier
Solutions, Ltd. Founder and former President, National Investor
Data Services, Inc. (investment related computer software).

Rowley W.P. Redington, 51 Trustee

260 Washington Street, Newark, New Jersey 07102. Vice President,

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PRS of New Jersey, Inc. (management consulting); Chief Financial
Officer, Jersey Electronics, Inc. (formerly ESI, Inc.) (consumer
electronics service and marketing); formerly President, Aveco Inc.
(consumer electronic service and marketing) and formerly Chief
Executive Officer, Rowley Associates (consultants).

Eric M. Banhazl*, 38 Treasurer

2025 E. Financial Way, Suite 101, Glendora, California 91741.
Senior Vice President, Robert H. Wadsworth & Associates, Inc.,
Senior Vice President of ICAC and Vice President of
FFD since 1990.

Robin Berger*, 39 Secretary

Robert H. Wadsworth*, 56 Vice President

4455 E. Camelback Road, Suite 261E, Phoenix, Arizona 85018.
President of Robert H. Wadsworth & Associates, Inc. since 1982,
President of ICAC and FFD since 1990.

*Indicates an "interested person" of the Trust as defined in the
1940 Act.

Name of Trustee Total Compensation

Dorothy A. Berry $10,000
Wallace L. Cook $10,000

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Carl A. Froebel $10,000
Rowley W.P Redington $10,000

THE FUND'S INVESTMENT ADVISOR

As stated in the Prospectus, investment advisory services are provided
to the Fund by Perkins Capital Management, Inc., the Advisor, pursuant to an
Investment Advisory Agreement. The Advisor is controlled by Richard Perkins,
Sr., Richard Perkins, Jr. and Daniel Perkins. The Investment Advisory Agreement
continues in effect from year to year so long as such continuation is approved
at least annually by (1) the Board of Trustees of the Trust or the vote of a
majority of the outstanding shares of the Fund, and (2) a majority of the
Trustees who are not interested persons of any party to the Agreement, in each
case cast in person at a meeting called for the purpose of voting on such
approval. The Agreement may be terminated at any time, without penalty, by
either the Fund or the Advisor upon sixty days' written notice and is
automatically terminated in the event of its assignment as defined in the 1940
Act.

The Advisor has agreed to reduce fees payable to it by the Fund to the
extent necessary to limit the Fund's aggregate annual operating expenses to the
most stringent limits prescribed by any state in which the Fund's sales are
offered for sale. Currently, the expense limit is 2.5% on the first $30 million
of net assets, 2% on the next $70 million of net assets and 1 1/2% thereafter.
For the fiscal year ended March 31, 1994, the Advisor waived its

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fee of $19,303 and reimbursed the Fund for other expenses in the amount of
$31,782. For the fiscal year ended March 31, 1995, the Advisor received fees of
$48,841 and reimbursed the Fund for other expenses in the amount of $22,466. For
the fiscal year ended March 31, 1996, the Advisor received fees of $516,259.

The use of the name "Perkins" by the Fund is pursuant to a license
granted by the Advisor, and in the event the Investment Advisory Agreement with
the Fund is terminated, the Advisor has reserved the right to require the Fund
to remove any references to the name "Perkins."

THE FUND'S ADMINISTRATOR

The Fund has entered into an Administratiion Agreement with Investment
Company Administration Corporation (the "Administrator"), a corporation owned
and controlled by Messrs. Banhazl, Paggioli and Wadsworth. The Administration
Agreement provides that the Administrator will prepare and coordinate reports
and other materials supplied to the Trustees; prepare and/or supervise the
preparation and filing of all securities filings, periodic financial reports,
prospectuses, statements of additional information, marketing materials, tax
returns, shareholder reports and other regulatory reports or filings required of
the Fund; prepare all required filings necessary to maintain the Fund's
qualification and/or registration to sell shares in all states where the Fund
currently does, or intends to do business; coordinate the preparation, printing
and mailing of all materials (e.g., Annual Reports) required to be sent to
shareholders; coordinate the preparation and payment of Fund related expenses;
monitor and oversee the activities of the Fund's servicing agents (i.e.,
transfer agent, custodian, fund accountants, etc.); review and adjust as
necessary the Fund's daily expense accruals; and perform such additional
services as may be agreed upon by the Fund and the Administrator. For its
services, the Administrator receives an monthly fee at the following annual
rate:

Less than $12,000,000 $30,000
$12 million to $50 million 0.25%
$50 million to $100 million 0.20%
$100 million to $200 million 0.15%

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Over $200 million 0.10%

During the fiscal years ended March 31, 1996, March 31, 1995, and March 31,
1994, the Administrator and its predecessor received fees of $123,567, $30,000
and $30,000, respectively.

THE FUND'S DISTRIBUTOR

First Fund Distributors, Inc. (the "Distributor"), a corporation owned
by Messrs. Banhazl, Paggioli and Wadsworth, acts as the Fund's principal
underwriter in a continuous public offering of the Fund's shares. The
Distribution Agreement between the Fund and the Distributor continues in effect
from year to year if approved at least annually by (i) the Board of Trustees or
the vote of a majority of the outstanding shares of the Fund (as defined in the
1940 Act) and (ii) a majority of the Trustees who are not interested persons of
any such party, in each case cast in person at a meeting called for the purpose
of voting on such approval. The Distribution Agreement may be terminated without
penalty by the parties thereto upon sixty days' written notice, and is
automatically terminated in the event of its assignment as defined in the 1940
Act. During the fiscal years ended March 31, 1996, March 31, 1995 and March 31,
1994, the aggregate of sales commissions received by the Distributor were
$78,000, $35,000 and $922, respectively.

The Fund has adopted a Distribution Plan in accordance with Rule 12b-1
under the 1940 Act. The Plan provides that the Fund will pay a fee to the
Distributor at an annual rate of up to 0.25% of the average daily net assets of
the Fund (currently 0.20%). The fee is paid to the Distributor as reimbursement
for, or in anticipation of, expenses incurred for distribution related activity.
During the fiscal year ended March 31, 1994, the Fund paid fees of $4,805 to the
Distributor, all of which was paid out as selling compensation to dealers.
During the year ended March 31, 1995, the Fund paid fees of $12,435 to the
Distributor, of which $3,460 was paidout by the Distributor as selling
compensation to dealers, $6521 was for reimbursement of Distributor printing
expenses and $2,108 was for reimbursement of advertising/sales literature
expenses. During the year ended March 31, 1996, the Fund paid fees of $76,418 to
the Distributor, of which $2,874 was paid out by the Distributor as selling
compensation to dealers and $13,026 was for reimbursement of

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Distributor printing expenses and $60,518 was for reimbursement of
advertising/sales literature expenses. The Fund also has a Shareholder Service
Plan pursuant to which payments or reimbursements of payments may be made to
selected brokers, dealers or administrators which have enetered into agreements
for services provided to shareholders of the Fund. During the fiscal year ended
March 31, 1996, fees of $76,000 were paid pursuant to the shareholder service
plan.

EXECUTION OF PORTFOLIO TRANSACTIONS

Pursuant to the Investment Management Agreement, the Advisor
determines which securities are to be purchased and sold by the Fund and which
broker-dealers will be used to execute the Fund's portfolio transactions.
Purchases and sales of securities in the over-the-counter market will generally
be executed directly with a "market-maker" unless, in the opinion of the
Advisor, a better price and execution can otherwise be obtained by using a
broker for the transaction.

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<PAGE>

broker-dealer can offer the most favorable price and execution available,
consideration may be given to those broker-dealers which furnish or supply
research and statistical information to the Advisor that it may lawfully and
appropriately use in its investment advisory capacities, as well as provide
other services in addition to execution services. The Advisor considers such
information, which is in addition to and not in lieu of the services required to
be performed by it under its Agreement with the Fund, to be useful in varying
degrees, but of indeterminable value. Portfolio transactions may also be placed
with broker-dealers who sell shares of the Fund subject to rules adopted by the
National Association of Securities Dealers, Inc.

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<PAGE>

yield for such security. Similarly, the Fund may not be able to obtain as high a
price for, or as large an execution of, an order to sell any particular security
at the same time. If one or more of such client accounts or Funds simultaneously
purchases or sells the same security that the Fund is purchasing or selling,
each day's transactions in such security will be allocated between the Fund and
all such client accounts or Funds in a manner deemed equitable by the Advisor,
taking into account the respective sizes of the accounts and the amount being
purchased or sold. It is recognized that in some cases this system could have a
detrimental effect on the price or value of the security insofar as the Fund is
concerned. In other cases, however, it is believed that the ability of the Fund
to participate in volume transactions may produce better executions for the
Fund.

The Fund does not use the Distributor to execute its portfolio
transactions. During the fiscal years ended March 31, 1996, March 31, 1995 and
March 31, 1994, such commissions paid by the Fund totaled $225,689, $42,830 and
$4,181, respectively.

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION

B-23

<PAGE>

documentation as stated in the Prospectus, except that the Fund may suspend the
right of redemption or postpone the date of payment during any period when (a)
trading on the New York Stock Exchange is restricted as determined by the SEC or
such Exchange is closed for other than weekends and holidays; (b) an emergency
exists as determined by the SEC making disposal of portfolio securities or
valuation of net assets of the Fund not reasonably practicable; or (c) for such
other period as the SEC may permit for the protection of the Fund's
shareholders. At various times, the Fund may be requested to redeem shares for
which it has not yet received confirmation of good payment; in this
circumstance, the Fund may delay the redemption until payment for the purchase
of such shares has been collected and confirmed to the Fund.

DETERMINATION OF SHARE PRICE

As noted in the Prospectus, the net asset value and offering

B-24

<PAGE>

price of shares of the Fund will be determined once daily as of 4:00 p.m., New
York City time, on each day the New York Stock Exchange is open for trading. It
is expected that the Exchange will be closed on Saturdays and Sundays and on New
Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas. The Fund does not expect to determine the
net asset value of its shares on any day when the Exchange is not open for
trading even if there is sufficient trading in its portfolio securities on such
days to materially affect the net asset value per share.

PERFORMANCE INFORMATION

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<PAGE>

P(1+T)n = ERV

Where: P = a hypothetical initial purchase order of $1,000
from which the maximum sales load is deducted

T = average annual total return

n = number of years

ERV = ending redeemable value of the hypothetical $1,000
purchase at the end of the period

The Fund's average annual total returns for the one year period and for the
period from inception on February 18, 1993 through June 30, 1996 were 35.90% and
40.17%, respectively.

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<PAGE>

may be in any future period.

GENERAL INFORMATION

Investors in the Fund will be informed of the Fund's progress through
periodic reports. Financial statements certified by independent public
accountants will be submitted to shareholders at least annually.

The Provident Bank, One East Fourth Street, Cincinnati, OH 45202 acts as
Custodian of the securities and other assets of the Fund. Rodney Square
Management Corp., P.O. Box 8987, Wilmington, DE 19899, acts as the Fund's
transfer and shareholder service agent. The Custodian and Transfer Agent do not
participate in decisions relating to the purchase and sale of securities by the
Fund.

Tait, Weller & Baker, 121 South Broad Street, Philadelphia, PA 19107,
are the independent auditors for the Fund.

Heller, Ehrman, White & McAuliffe, 333 Bush Street, San Francisco,
California 94104, are legal counsel to the Fund.

As of July 13, 1996, the following shareholders owned more than 5% of
the outstanding voting securities of the Fund: Donaldson Lufkin Jenrette
Securities Corporation, Jersey City, NJ 07303 6.612%; Charles Schwab & Co., Inc.
For Exclusive Benefit of Customers, San Francisco CA 94104; 18.36%.

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<PAGE>

of Trust further provides that the Trust may maintain appropriate insurance (for
example, fidelity bonding and errors and omissions insurance) for the protection
of the Trust, its shareholders, trustees, officers, employees and agents to
cover possible tort and other liabilities. Furthermore, the activities of the
Trust as an investment company would not likely give rise to liabilities in
excess of the Trust's total assets. Thus, the risk of a shareholder incurring
financial loss on account of shareholder liability is limited to circumstances
in which both inadequate insurance exists and the Fund itself is unable to meet
its obligations.

The Trust is registered with the SEC as a management investment
company. Such a registration does not involve supervision of the management or
policies of the Fund. The Prospectus of the Fund and this Statement of
Additional Information omit certain of the information contained in the
Registration Statement filed with the SEC. Copies of such information may be
obtained from the SEC upon payment of the prescribed fee.

FINANCIAL STATEMENTS

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<PAGE>

STATEMENT OF ADDITIONAL INFORMATION
August 1, 1996
UAM/FPA CRESCENT FUND
a series of
PROFESSIONALLY MANAGED PORTFOLIOS
11400 West Olympic Blvd.
Los Angeles, CA 90064
(310) 996-5417

This Statement of Additional Information is not a prospectus and it
should be read in conjunction with the prospectus of the UAM/FPA Crescent Fund
(the "Fund"). A copy of the prospectus of the Fund dated August 1, 1996 is
available by calling the number listed above or (800) 385-7003.

TABLE OF CONTENTS

Page

The Trust . . . . . . . . . . . . . . . . . . . . . . . . B-2
Investment Objective and Policies . . . . . . . . . . . . B-2
Investment Restrictions . . . . . . . . . . . . . . . . . B-7
Distributions and Tax Information . . . . . . . . . . . . B-9
Management . . . . . . . . . . . . . . . . . . B-13
Execution of Portfolio Transactions . . . . . . . . . . . B-16
Additional Purchase and Redemption Information . . . . . B-18
Determination of Share Price . . . . . . . . . . . . . . B-19
Performance Information . . . . . . . . . . . . . . . . . B-20
General Information . . . . . . . . . . . . . . . . . . . B-21
Financial Statements . . . . . . . . . . . . . . . . . . . B-22
Appendix-Description of Bond Ratings . . . . . . . . . . . B-23

B-1

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THE TRUST

Professionally Managed Portfolios (the "Trust") is an open-end
management investment company organized as a Massachusetts business trust. The
Trust currently consists of various series which represent separate investment
portfolios. This Statement of Additional Information relates only to the UAM/FPA
Crescent Fund series (the "Fund").

INVESTMENT OBJECTIVE AND POLICIES

UAM/FPA Crescent Fund (the "Fund") is a mutual fund with the investment
objective of seeking to provide, through a combination of income and capital
appreciation, a total return consistent with reasonable investment risk. The
following discussion supplements the discussion of the Fund's investment
objective and policies as set forth in the Prospectus. There can be no assurance
the objective of the Fund will be attained.

Repurchase Agreements

The Fund may enter into repurchase agreements as discussed in the
Prospectus. Under such agreements, the seller of the security agrees to
repurchase it at a mutually agreed upon time and price. The repurchase price may
be higher than the purchase price, the difference being income to the Fund, or
the purchase and repurchase prices may be the same, with interest at a stated
rate due to the Fund together with the repurchase price on repurchase. In either
case, the income to the Fund is unrelated to the interest rate on the U.S.
Government security itself. Such repurchase agreements will be made only with
banks with assets of $500 million or more that are insured by the Federal
Deposit Insurance Corporation or with Government securities dealers recognized
by the Federal Reserve Board and registered as broker-dealers with the
Securities and Exchange Commission ("SEC") or exempt from such registration.
The Fund will generally enter into repurchase agreements of short durations,
from overnight to one week, although the underlying securities generally have
longer maturities. The Fund may not enter into a repurchase agreement with more
than seven days to maturity if, as a result, more than 15% of the value of the
Fund's total assets would be invested in illiquid securities including such
repurchase agreements.

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<PAGE>

repurchase under a repurchase agreement, the Fund may encounter delays and incur
costs before being able to sell the security. Delays may involve loss of
interest or a decline in price of the U.S. Government security. If a court
characterizes the transaction as a loan and the Fund has not perfected a
security interest in the U.S. Government security, the Fund may be required to
return the security to the seller's estate and be treated as an unsecured
creditor of the seller. As an unsecured creditor, the Fund would be at the risk
of losing some or all of the principal and income involved in the transaction.
As with any unsecured debt instrument purchased for the Fund, the investment
manager seeks to minimize the risk of loss through repurchase agreements by
analyzing the creditworthiness of the obligor, in this case the seller of the
U.S. Government security.

When-Issued Securities

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<PAGE>

its net asset value. The market value of the when-issued securities may be more
or less than the purchase price. The Fund does not believe that its net asset
value or income will be adversely affected by its purchase of securities on a
when-issued basis. The Fund will establish a segregated account with its
Custodian in which it will maintain liquid assets equal in value to commitments
for when-issued securities. Such segregated assets either will mature or, if
necessary, be sold on or before the settlement date.

Foreign Securities

Among the means through which the Fund may invest in foreign securities is
the purchase of American Depository Receipts ("ADR's") or European Depository
Receipts ("EDR's"). Generally, ADR's, in registered form, are denominated in
U.S. dollars and are designed for use in the U.S. securities markets, while
EDR's, in bearer form, may be denominated in other currencies and are designed
for use in European securities markets. ADR's are receipts typically issued by a
U.S. bank or trust company evidencing ownership of the underlying securities.
EDR's are European receipts evidencing a similar arrangement. For purposes of
the Funds' investment policies, ADR's and EDR's are deemed to have the same
classification as the underlying securities they represent. Thus an ADR or EDR
representing ownership of common stock will be treated as common stock.

Debt Securities and Ratings

Ratings of debt securities represent the rating agencies' opinions
regarding their quality, are not a guarantee of quality and may be reduced after
the Fund has acquired the security. The Advisor will consider whether the Fund
should continue to hold the security but is not required to dispose of it.
Credit ratings attempt to evaluate the safety of principal and interest payments
and do not evaluate the risks of fluctuations in market value. Also, rating
agencies may fail to make timely changes in credit ratings in response to
subsequent events, so that an issuer's current financial conditions may be
better or worse than the rating indicates.

The Fund reserves the right to invest up to 20% of its assets in securities
rated lower than BBB by S & P or lower than Baa by Moody's but rated at least B
by S & P or Moody's (or, in either case, if unrated, deemed by the Advisor to be
of comparable quality). Lower rated securities generally offer a higher current
yield than that available for higher grade issues. However, lower rated
securities involve higher risks, in that they are especially subject to adverse
changes in general economic conditions and in the industries in which the
issuers are engaged, to changes in the financial condition of the issuers and to
price fluctuations in response to changes in interest rates. During periods of
economic downturn or rising interest rates, highly leveraged issuers may

B-4

<PAGE>

experience financial stress which could adversely affect their ability to make
payments of interest and principal and increase the possibility of default. In
addition, the market for lower rated debt securities has expanded rapidly in
recent years, and its growth paralleled a long economic expansion. At times in
recent years, the prices of many lower rated debt securities declined
substantially, reflecting an expectation that many issuers of such securities
might experience financial difficulties. As a result, the yields on lower rated
debt securities rose dramatically, but such higher yields did not reflect the
value of the income stream that holders of such securities expected, but rather,
the risk that holders of such securities could lose a substantial portion of
their value as a result of the issuers' financial restructuring or default.
There can be no assurance that such declines will not recur. The market for
lower-rated debt issues generally is thinner and less active than that for
higher quality securities, which may limit the Fund's ability to sell such
securities at fair value in response to changes in the economy or financial
markets. Adverse publicity and investor perceptions, whether or not based on
fundamental analysis, may also decrease the values and liquidity of lower rated
securities, especially in a thinly traded market.

Short Sales

No securities will be sold short if, after effect is given to any such
short sale, the total market value of all securities sold

B-5

<PAGE>

short would exceed 25% of the value of the Fund's net equity. The Fund similarly
will limit its short sales of the securities of any single issuer if the market
value of the securities that have been sold short by the Fund would exceed the
two percent (2%) of the value of the Fund's net equity or if such securities
would constitute more than two percent (2%) of any class of the issuer's
securities.

Whenever the Fund engages in short sales, its custodian segregates an
amount of liquid assets equal to the difference between (a) the market value of
the securities sold short at the time they were sold short and (b) any cash or
U.S. Government securities required to be deposited with the broker in
connection with the short sale (not including the proceeds from the short sale).
The segregated assets are marked to market daily, provided that at no time will
the amount deposited in it plus the amount deposited with the broker be less
than the market value of the securities at the time they were sold short.

Options and Futures Transactions.

As indicated in the prospectus, to the extent consistent with its
investment objectives and policies, the Fund may purchase and write call and put
options on securities, securities indexes and on foreign currencies and enter
into futures contracts and use options on futures contracts, to the extent of up
to 5% of its assets.

Transactions in options on securities and on indexes involve certain risks.
For example, there are significant differences between the securities and
options markets that could result in an imperfect correlation between these
markets, causing a given transaction not to achieve its objectives. A decision
as to whether, when and how to use options involves the exercise of skill and
judgment, and even a well-conceived transaction may be unsuccessful to some
degree because of market behavior or unexpected events.

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<PAGE>

it would not be able to sell the underlying security unless the option expired
without exercise. As the writer of a covered call option, the Fund forgoes,
during the option's life, the opportunity to profit from increases in the market
value of the security covering the call option above the sum of the premium and
the exercise price of the call.

If trading were suspended in an option purchased by the Fund, the Fund
would not be able to close out the option. If restrictions on exercise were
imposed, the Fund might be unable to exercise an option it has purchased. Except
to the extent that a call option on an index written by the Fund is covered by
an option on the same index purchased by the Fund, movements in the index may
result in a loss to the Fund; such losses may be mitigated or exacerbated by
changes in the value of the Fund's securities during the period the option was
outstanding.

Use of futures contracts and options thereon also involves certain risks.
The variable degree of correlation between price movements of futures contracts
and price movements in the related portfolio positions of the Fund creates the
possibility that losses on the hedging instrument may be greater than gains in
the value of the Fund's position. Also, futures and options markets may not be
liquid in all circumstances and certain over the counter options may have no
markets. As a result, in certain markets, the Fund might not be able to close
out a transaction at all or without incurring losses. Although the use of
options and futures transactions for hedging should minimize the risk of loss
due to a decline in the value of the hedged position, at the same time they tend
to limit any potential gain which might result from an increase in the value of
such position. If losses were to result from the use of such transactions, they
could reduce net asset value and possibly income. The Fund may use these
techniques to hedge against changes in interest rates or securities prices or as
part of its overall investment strategy. The Fund will maintain segregated
accounts consisting of liquid assets (or, as permitted by applicable regulation,
enter into certain offsetting positions) to cover its obligations under options
and futures contracts to avoid leveraging of the Fund.

INVESTMENT RESTRICTIONS

1. Make loans to others, except (a) through the purchase of debt
securities in accordance with its investment objectives and policies, (b) to the
extent the entry into a repurchase agreement is deemed to be a loan.

B-7

<PAGE>

2. (a) Borrow money, except as stated in the Prospectus and
this Statement of Additional Information. Any such borrowing will
be made only if immediately thereafter there is an asset coverage
of at least 300% of all borrowings.

(b) Mortgage, pledge or hypothecate any of its assets
except in connection with any such borrowings.

4. Purchase or sell commodities or commodity contracts (other than
futures transactions for the purposes and under the conditions described in the
prospectus and in this Statement of Additional Information).

5. Invest more than 25% of the market value of its assets in
the securities of companies engaged in any one industry. (Does not
apply to investment in the securities of the U.S. Government, its
agencies or instrumentalities.)

6. Issue senior securities, as defined in the 1940 Act, except that
this restriction shall not be deemed to prohibit the Fund from (a) making any
permitted borrowings, mortgages or pledges, or (b) entering into options,
futures or repurchase transactions.

7. Purchase the securities of any issuer, if as a result more than 5% of
the total assets of the Fund would be invested in the securities of that issuer,
other than obligations of the U.S. Government, its agencies or
instrumentalities, provided that up to 25% of the value of the Fund's assets may
be invested without regard to this limitation.

8. Purchase or sell real estate; however, the Fund may invest in debt
securities secured by real estate or interests therein or issued by companies
which invest in real estate or interests therein, including real estate
investment trusts;

The Fund observes the following policies, which are not deemed
fundamental and which may be changed without shareholder vote. The
Fund may not:

9. Purchase any security if as a result the Fund would then hold more than
10% of any class of securities of an issuer (taking all common stock issues of
an issuer as a single class, all preferred stock issues as a single class, and
all debt issues as a single class) or more than 10% of the outstanding voting
securities of an issuer.

B-8

<PAGE>

10. Invest in any issuer for purposes of exercising control
or management.

11. Buy or sell interests in oil, gas or mineral exploration or development
programs or related leases, or real estate. (Does not preclude investments in
marketable securities of issuers engaged in such activities.)

12. Purchase or hold securities of any issuer, if, at the time of purchase
or thereafter, any of the Trustees or officers of the Trust or the Fund's
investment manager owns beneficially more than 1/2 of 1%, and all such Trustees
or officers holding more than 1/2 of 1% together own beneficially more than 5%
of the issuer's securities.

14. Invest, in the aggregate, more than 15% of its total
assets in securities which are not readily marketable or are
illiquid.

DISTRIBUTIONS AND TAX INFORMATION

Distributions

Each distribution by the Fund is accompanied by a brief
explanation of the form and character of the distribution. In

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<PAGE>

January of each year the Fund will issue to each shareholder a statement of the
federal income tax status of all distributions.

Tax Information

The Fund is treated as a separate entity for federal income tax
purposes. The Fund intends to qualify and elect to be treated as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986 (the
"Code"). In order to qualify, the Fund must comply with all applicable
requirements regarding the source of its income, diversification of its assets
and timing of its distributions. The Fund's policy is to distribute to its
shareholders all of its investment company taxable income and any net realized
long-term capital gains for each fiscal year in a manner that complies with the
distribution requirements of the Code, so that the Fund will not be subject to
any federal income tax or excise taxes based on net income. The Fund will
generally be subject to federal income tax on its undistributed net investment
income and capital gains. To avoid federal excise taxes based on its net income,
the Fund must distribute (or be deemed to have distributed) by December 31 of
each calendar year (i) at least 98% of its ordinary income for such year, (ii)
at least 98% of the excess of its realized capital gains over its realized
capital losses for the 12-month period ending on October 31 during such year and
(iii) any amounts from the prior calendar year that were not distributed.

Distributions of the excess of net long-term capital gains

B-10

<PAGE>

over net short-term capital losses are taxable to shareholders as long-term
capital gains, regardless of the length of time the shareholders have held their
shares. Capital gains distributions are not eligible for the dividends-received
deduction referred to in the previous paragraph. Distributions of any net
investment income and net realized capital gains will be taxable as described
above, whether received in shares or in cash. Shareholders electing to receive
distributions in the form of additional shares will have a cost basis for
federal income tax purposes in each share so received equal to the net asset
value of a share on the reinvestment date. Distributions are generally taxable
when received. However, distributions declared in October, November or December
to shareholders of record on a date in such a month and paid the following
January are taxable as if received on December 31. Distributions are includable
in alternative minimum taxable income in computing a shareholder's liability for
the alternative minimum tax.

A redemption of Fund shares may result in recognition of a taxable gain
or loss. Any loss realized upon a redemption of shares within six months from
the date of their purchase will be treated as a long-term capital loss to the
extent of any amounts treated as distributions of long-term capital gains during
such six-month period. Any loss realized upon a redemption of Fund shares may be
disallowed under certain wash sale rules to the extent shares of the Fund are
purchased (through reinvestment of distributions or otherwise) within 30 days
before or after the redemption.

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<PAGE>

The foregoing discussion of the Code relates solely to the
application of that law to U.S. citizens or residents and U.S.
domestic corporations, partnerships, trusts and estates. Each
shareholder who is not a U.S. person should consider the U.S. and
foreign tax consequences of ownership of shares of the Fund,
including the possibility that such a shareholder may be subject to
a U.S. withholding tax at a rate of 30 percent (or at a lower rate
under an applicable income tax treaty) on amounts constituting
ordinary income.

This discussion and the related discussion in the prospectus have been
prepared by Fund management, and counsel to the Fund has expressed no opinion in
respect thereof.

MANAGEMENT

Trustees

The Trustees of the Trust, who were elected for an indefinite
term by the initial shareholders of the Trust, are responsible for

B-12

<PAGE>

the overall management of the Trust, including general supervision and review of
the investment activities of the Fund. The Trustees, in turn, elect the officers
of the Trust, who are responsible for administering the day-to-day operations of
the Trust and its separate series. The current Trustees and officers and their
affiliations and principal occupations for the past five years are set forth
below.

Steven J. Paggioli,* 46 President and Trustee

479 West 22nd Street, New York, New York 10011. Executive Vice
President, Robert H. Wadsworth & Associates, Inc. (consultants)
since 1986; Executive Vice President of Investment Company
Administration Corporation ("ICAC"; mutual fund administration and
the Fund's Administrator), and Vice President of First Fund
Distributors, Inc. ("FFD"; registered broker-dealer and the Fund's
Distributor) since 1990.

Dorothy A. Berry, 52 Trustee

Wallace L. Cook, 56 Trustee

30 Rockefeller Plaza, New York, New York 10112. Senior Vice
President, Rockefeller Trust Co. Financial Counselor, Rockefeller
& Co.

Carl A. Froebel, 57 Trustee

333 Technology Dr., Malvern, PA 19355. Managing Director, Premier
Solutions, Ltd. Founder and former President, National Investor
Data Services, Inc. (investment related computer software).

Rowley W.P. Redington, 51 Trustee

Eric M. Banhazl*, 38 Treasurer

2025 E. Financial Way, Suite 101, Glendora, California 91741.
Senior Vice President, Robert H. Wadsworth & Associates, Inc.,
Senior Vice President of ICAC and Vice President of
FFD since 1990.

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<PAGE>

Robin Berger*, 39 Secretary

Robert H. Wadsworth*, 56 Vice President

4455 E. Camelback Road, Suite 261E, Phoenix, Arizona 85018.
President of Robert H. Wadsworth & Associates, Inc. since 1982,
President of ICAC and FFD.

*Indicates an "interested person" of the Trust as defined in the
1940 Act.

Name of Trustee Total Compensation

Dorothy A. Berry $10,000
Wallace L. Cook $10,000
Carl A. Froebel $10,000
Rowley W.P Redington $10,000

During the fiscal year ended March 31, 1996, trustees' fees and
expenses in the amount of $3,609 were allocated to the Fund.

Investment Advisor

Investment advisory services are provided to the Fund by First Pacific
Advisors, Inc., (the "Advisor"), pursuant to an Investment Advisory Agreement.
The Agreement continues in effect from year to

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<PAGE>

year for periods not exceeding one year so long as such continuation is approved
at least annually by (1) the Board of Trustees of the Trust or the vote of a
majority of the outstanding shares of the Fund, and (2) a majority of the
Trustees who are not interested persons of any party to the Agreement, in each
case cast in person at a meeting called for the purpose of voting on such
approval. The Agreement may be terminated at any time, without penalty, by
either the Fund or the Advisor upon sixty days' written notice and is
automatically terminated in the event of its assignment as defined in the 1940
Act.

During the Fund's initial fiscal period ended March 31, 1994, Crescent
Management, the Fund's previous Advisor received advisory fees of $75,407 and
reimbursed expenses of $927. For the fiscal year ended March 31, 1995, the
previous Advisor received advisory fees of $132,646. For the fiscal year ended
March 31, 1996, the previous Advisor, and with respect to the month of March,
1996, the Advisor received advisory fees totaling $189,156.

Administrator

The Fund has entered into an Administrative Agreement with Investment
Company Administration Corporation (the "Administrator"), a corporation owned
and controlled by Messrs. Banhazl, Paggioli and Wadsworth. The Agreement
provides that the Administrator will prepare and coordinate reports and other
materials supplied to the Trustees; prepare and/or supervise the preparation and
filing of all securities filings, periodic financial reports, prospectuses,
statements of additional information, marketing materials, tax returns,
shareholder reports and other regulatory reports or filings required of the
Fund; prepare all required filings necessary to maintain the Fund's
qualification and/or registration to sell shares in all states where the Fund
currently does, or intends to do business; coordinate the preparation, printing
and mailing of all materials (e.g., Annual Reports) required to be sent to
shareholders; coordinate the preparation and payment of Fund related expenses;
monitor and oversee the activities of the Fund's servicing agents (i.e.,
transfer agent, custodian, fund accountants, etc.); review and adjust as
necessary the Fund's daily expense accruals; and perform such additional
services as may be agreed upon by the Fund and the Administrator. For its
services, the Administrator receives a fee at the following annual rate:

Average net assets Fee or fee rate

Under $15 million $30,000
$15 to $50 million 0.20%
$50 to $100 million 0.15%
$100 million to $150 million 0.10%
Over $150 million 0.05%

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<PAGE>

During the fiscal years ended March 31, 1996, March 31, 1995 and for
the initial fiscal period ended March 31, 1994 the Administrator and its
predecessor received fees of $51,509, $30,000 and $24,936, respectively.

Distributor

First Fund Distributors, (the "Distributor") a corporation owned by
Messrs. Banhazl, Paggioli and Wadsworth, acts as the Fund's distributor and
principal underwriter in a continuous public offering of the Fund's shares. The
Distribution Agreement between the Fund and the Distributor continues in effect
from year to year if approved at least annually by (I) the Board of Trustees or
the vote of a majority of the outstanding shares of the Fund (as defined in the
1940 Act) and (ii) a majority of the Trustees who are not interested persons of
any such party, in each case cast in person at a meeting called for the purpose
of voting on such approval. The Distribution Agreement may be terminated without
penalty by the parties thereto upon sixty days' written notice, and is
automatically terminated in the event of its assignment as defined in the 1940
Act.

EXECUTION OF PORTFOLIO TRANSACTIONS

Pursuant to the Investment Advisory Agreement, the Advisor determines
which securities are to be purchased and sold by the Fund and which
broker-dealers will be used to execute the Fund's portfolio transactions.
Purchases and sales of securities in the over-the-counter market will be
executed directly with a "market-maker" unless, in the opinion of the Advisor, a
better price and execution can otherwise be obtained by using a broker for the
transaction.

Purchases of portfolio securities for the Fund also may be made
directly from issuers or from underwriters. Where possible, purchase and sale
transactions will be effected through dealers (including banks) which specialize
in the types of securities which the Fund will be holding, unless better
executions are available elsewhere. Dealers and underwriters usually act as
principal for their own account. Purchases from underwriters will include a
concession paid by the issuer to the underwriter and purchases from dealers will
include the spread between the bid and the asked price. If the execution and
price offered by more than one broker dealer or underwriter are comparable, the
order may be allocated to a broker dealer or underwriter that has provided
research or other services as discussed below.

B-16

<PAGE>

available will be considered in making these determinations, such as the size of
the order, the difficulty of execution, the operational facilities of the firm
involved, the firm's risk in positioning a block of securities, and other
factors. In those instances where it is reasonably determined that more than one
broker-dealer can offer the most favorable price and execution available,
consideration may be given to those broker-dealers which furnish or supply
research and statistical information to the Advisor that it may lawfully and
appropriately use in its investment advisory capacities, as well as provide
other services in addition to execution services. The Advisor considers such
information, which is in addition to and not in lieu of the services required to
be performed by it under its Agreement with the Fund, to be useful in varying
degrees, but of indeterminable value. Portfolio transactions also may be placed
with broker-dealers who sell shares of the Fund subject to rules adopted by the
National Association of Securities Dealers, Inc.

B-17

<PAGE>

day's transactions in such security will be allocated between the Fund and all
such client accounts or Funds in a manner deemed equitable by the Advisor,
taking into account the respective sizes of the accounts and the amount being
purchased or sold. It is recognized that in some cases this system could have a
detrimental effect on the price or value of the security insofar as the Fund is
concerned. In other cases, however, it is believed that the ability of the Fund
to participate in volume transactions may produce better executions for the
Fund.

The Fund does not use the Distributor to execute its portfolio
transactions. During the initial fiscal period from June 2, 1993 through March
31, 1994 and for the fiscal year ended March 31, 1995, and March 31, 1996
brokerage commissions paid by the Fund totaled $38,160, $51,853 and $63,938,
respectively.

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION

The Trust reserves the right in its sole discretion (I) to suspend the
continued offering of the Fund's shares, (ii) to reject purchase orders in whole
or in part when in the judgment of the Advisor or the Distributor such rejection
is in the best interest of the Fund, and (iii) to reduce or waive the minimum
for initial and subsequent investments for certain fiduciary accounts or under
circumstances where certain economies can be achieved in sales of the Fund's
shares.

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<PAGE>

valuation of net assets of the Fund not reasonably practicable; or (C) for such
other period as the SEC may permit for the protection of the Fund's
shareholders. At various times, the Fund may be requested to redeem shares for
which it has not yet received confirmation of good payment; in this
circumstance, the Fund may delay the redemption until payment for the purchase
of such shares has been collected and confirmed to the Fund.

DETERMINATION OF SHARE PRICE

As noted in the Prospectus, the net asset value of shares of the Fund
will be determined once daily as of 4:00 p.m., New York City time, on each day
the New York Stock Exchange is open for trading. It is expected that the
Exchange will be closed on Saturdays and Sundays and on New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas. The Fund does not expect to determine the net
asset value of its shares on any day when the Exchange is not open for trading
even if there is sufficient trading in its portfolio securities on such days to
materially affect the net asset value per share.

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<PAGE>

Readily marketable securities traded only in the over-the-counter market and not
on NASDAQ are valued at the current or last bid price. If no bid is quoted on
such day, the security is valued by such method as the Board of Trustees of the
Trust shall determine in good faith to reflect the security's fair value. All
other assets of each Fund are valued in such manner as the Board of Trustees in
good faith deems appropriate to reflect their fair value.

PERFORMANCE INFORMATION

P(1+T)n = ERV

Where: P = a hypothetical initial purchase order of $1,000
from which the maximum sales load is deducted

T = average annual total return

n = number of years

ERV = ending redeemable value of the hypothetical
$1,000 purchase at the end of the period

Aggregate total return is calculated in a similar manner,
except that the results are not annualized. Each calculation

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<PAGE>

assumes that all dividends and distributions are reinvested at net asset value
on the reinvestment dates during the period and gives effect to the maximum
applicable sales charge.

The Fund's average annual total returns for the one year period and from
inception on June 2, 1993 through June 30, 1996 were 22.27% and 16.16%
respectively.

GENERAL INFORMATION

Investors in the Fund will be informed of the Fund's progress through
periodic reports. Financial statements certified by independent public
accountants will be submitted to shareholders at least annually.

The Star Bank, located at 425 Walnut Street, Cincinnati, Ohio 45201
acts as Custodian of the securities and other assets of the Fund. American Data
Services, 24 West Carver St., Huntington, NY, 11743 acts as the Fund's transfer
and shareholder service agent. The Custodian and Agent do not participate in
decisions relating to the purchase and sale of securities by the Fund.

Tait, Weller & Baker, Two Penn Center Plaza, Philadelphia, PA
19102, are the independent auditors for the Fund.

Heller, Ehrman, White & McAuliffe, 333 Bush Street, San Francisco,
California 94104, are legal counsel to the Fund.

The following persons are beneficial owners of more than 5% of the Fund's
outstanding voting securities as of July 11,, 1996. An asterisk (*) denotes an
account affiliated with the Fund's investment advisor, officers or trustees:

David Sofro Trust DTD 1990, Van Nuys, CA 91409; 13.96%

*Crescent Multi-Advisor Fund, LP, Los Angeles, CA; 13.20%

Bear Stearns Securities Corp., Special Custody Acc't for
Customers, Brooklyn, NY 11201, 7.71%

Hillside Memorial Park Fund, Los Angeles, CA 90045, 5.23%

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<PAGE>

The Trust is registered with the SEC as a management investment
company. Such a registration does not involve supervision of the management or
policies of the Fund. The Prospectus of the Fund and this Statement of
Additional Information omit certain of the information contained in the
Registration Statement filed with the SEC. Copies of such information may be
obtained from the SEC upon payment of the prescribed fee.

FINANCIAL STATEMENTS

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APPENDIX
Description of Bond Ratings*

Moody's Investors Service

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<PAGE>

Standard & Poor's Corporation

AAA: Bonds rated AAA are highest grade debt obligations. This
rating indicates an extremely strong capacity to pay principal and
interest.

A: Bonds rated A have a strong capacity to pay principal and interest, although
they are more susceptible to the adverse effects of changes in circumstances and
economic conditions.

BB, B: Bonds rated BB and B are regarded, on balance, as predominantly
speculative with respect to the issuer's capacity to pay interest and repay
principal in accordance with the terms of the obligation. While such bonds will
likely have some quality and protective characteristics, these are outweighed by
large uncertainties or major risk exposures to adverse conditions.

Ratings may be modified by the addition of a plus or minus sign to show relative
standing within the major rating categories.

*Ratings are generally given to securities at the time of issuance. While the
rating agencies may from time to time revise such ratings, they undertake no
obligation to do so.

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<PAGE>

STATEMENT OF ADDITIONAL INFORMATION
August 1, 1996

THE OSTERWEIS FUND
a series of
PROFESSIONALLY MANAGED PORTFOLIOS
One Maritime Plaza, Suite 1201
San Francisco, CA 94111
(415) 434-4441

This Statement of Additional Information is not a prospectus and it
should be read in conjunction with the prospectus of the Osterweis Fund (the
"Fund"). A copy of the prospectus of the Fund dated August 1, 1996 is available
by calling the number listed above or (800-385-7003).

TABLE OF CONTENTS

Page

The Trust . . . . . . . . . . . . . . . . . . . . . . . . B-2
Investment Objective and Policies . . . . . . . . . . . . B-2
Investment Restrictions . . . . . . . . . . . . . . . . . B-7
Distributions and Tax Information . . . . . . . . . . . . B-9
Management . . . . . . . . . . . . . . . . . . . . . . . B-12
Execution of Portfolio Transactions . . . . . . . . . . . B-16
Additional Purchase and Redemption Information . . . . . B-18
Determination of Share Price . . . . . . . . . . . . . . B-19
Performance Information . . . . . . . . . . . . . . . . . B-20
General Information . . . . . . . . . . . . . . . . . . . B-21
Financial Statements . . . . . . . . . . . . . . . . . . B-22
Appendix: Description of Bond Ratings . . . . . . . . . . B-23

B-1

<PAGE>

THE TRUST

INVESTMENT OBJECTIVE AND POLICIES

The Osterweis Fund (the "Fund") is a mutual fund with the investment
objective of attaining long term total returns. The following discussion
supplements the discussion of the Fund's investment objective and policies as
set forth in the Prospectus. There can be no assurance the objective of the Fund
will be attained.

Repurchase Agreements

The Fund may enter into repurchase agreements as discussed in the
Prospectus. Under such agreements, the seller of the security to the Fund agrees
to repurchase it at a mutually agreed upon time and price. The repurchase price
may be higher than the purchase price, the difference being income to the Fund,
or the purchase and repurchase prices may be the same, with interest at a stated
rate due to the Fund together with the repurchase price on repurchase. In either
case, the income to the Fund is unrelated to the interest rate on the U.S.
Government security itself. Such repurchase agreements will be made only with
banks with assets of $500 million or more that are insured by the Federal
Deposit Insurance Corporation or with Government securities dealers recognized
by the Federal Reserve Board and registered as broker-dealers with the
Securities and Exchange Commission ("SEC") or exempt from such registration. The
Fund will generally enter into repurchase agreements of short durations, from
overnight to one week, although the underlying securities generally have longer
maturities. The Fund may not enter into a repurchase agreement with more than
seven days to maturity if, as a result, more than 15% of the value of the Fund's
total assets would be invested in illiquid securities including such repurchase
agreements.

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<PAGE>

encounter delays and incur costs before being able to sell the security. Delays
may involve loss of interest or a decline in price of the U.S. Government
security. If a court characterizes the transaction as a loan and the Fund has
not perfected a security interest in the U.S. Government security, the Fund may
be required to return the security to the seller's estate and be treated as an
unsecured creditor of the seller. As an unsecured creditor, the Fund would be at
the risk of losing some or all of the principal and income involved in the
transaction. As with any unsecured debt instrument purchased for the Fund, the
investment manager seeks to minimize the risk of loss through repurchase
agreements by analyzing the creditworthiness of the obligor, in this case the
seller of the U.S. Government security.

When-Issued Securities

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<PAGE>

determining its net asset value. The market value of the when-issued securities
may be more or less than the purchase price. The Fund does not believe that its
net asset value or income will be adversely affected by its purchase of
securities on a when-issued basis. The Fund will establish a segregated account
with its Custodian in which it will maintain liquid assets equal in value to
commitments for when-issued securities. Such segregated assets either will
mature or, if necessary, be sold on or before the settlement date.

Foreign Securities

Debt Securities and Ratings

Ratings of debt securities represent the rating agencies' opinions
regarding their quality, are not a guarantee of quality and may be reduced after
the Fund has acquired the security. If a security's rating is reduced while it
is held by the Fund, the Advisor will consider whether the Fund should continue
to hold the security but is not required to dispose of it. Credit ratings
attempt to evaluate the safety of principal and interest payments and do not
evaluate the risks of fluctuations in market value. Also, rating agencies may
fail to make timely changes in credit ratings in response to subsequent events,
so that an issuer's current financial conditions may be better or worse than the
rating indicates.

The Fund reserves the right to invest up to 30% of its assets in securities
rated lower than BBB by S & P or lower than Baa by Moody's but rated at least B
by S & P or Moody's (or, in either case, if unrated, deemed by the Advisor to be
of comparable quality). Lower-rated securities generally offer a higher current
yield than that available for higher grade issues. However, lower-rated
securities involve higher risks, in that they are especially subject to adverse
changes in general economic conditions and in the industries in which the
issuers are engaged, to changes in the financial condition of the issuers and to
price fluctuations in response to changes in interest

B-4

<PAGE>

rates. During periods of economic downturn or rising interest rates, highly
leveraged issuers may experience financial stress which could adversely affect
their ability to make payments of interest and principal and increase the
possibility of default. In addition, the market for lower-rated debt securities
has expanded rapidly in recent years, and its growth paralleled a long economic
expansion. At times in recent years, the prices of many lower-rated debt
securities declined substantially, reflecting an expectation that many issuers
of such securities might experience financial difficulties. As a result, the
yields on lower-rated debt securities rose dramatically, but such higher yields
did not reflect the value of the income stream that holders of such securities
expected, but rather, the risk that holders of such securities could lose a
substantial portion of their value as a result of the issuers' financial
restructuring or default. There can be no assurance that such declines will not
recur. The market for lower-rated debt issues generally is thinner and less
active than that for higher quality securities, which may limit the Fund's
ability to sell such securities at fair value in response to changes in the
economy or financial markets. Adverse publicity and investor perceptions,
whether or not based on fundamental analysis, may also decrease the values and
liquidity of lower-rated securities, especially in a thinly traded market.

Lower-rated debt obligations also present risks based on payment
expectations. If an issuer calls the obligation for redemption, a Fund may have
to replace the security with a lower-yielding security, resulting in a decreased
return for investors. Also, as the principal value of bonds moves inversely with
movements in interest rates, in the event of rising interest rates the value of
the securities held by a Fund may decline proportionately more than a Fund
consisting of higher-rated securities. If a Fund experiences unexpected net
redemptions, it may be forced to sell its higher-rated bonds, resulting in a
decline in the overall credit quality of the securities held by the Fund and
increasing the exposure of the Fund to the risks of lower-rated securities.
Investments in zero-coupon bonds may be more speculative and subject to greater
fluctuations in value due to changes in interest rates than bonds that pay
interest currently.

Options and Futures Transactions. As indicated in the prospectus, to the extent
consistent with its investment objectives and policies, the Fund may purchase
and write call and put options on securities, securities indexes and on foreign
currencies and enter into futures contracts and use options on futures
contracts, to the extent of up to 5% of its assets.

Transactions in options on securities and on indexes involve certain risks.
For example, there are significant differences between the securities and
options markets that could result in

B-5

<PAGE>

an imperfect correlation between these markets, causing a given transaction not
to achieve its objectives. A decision as to whether, when and how to use options
involves the exercise of skill and judgment, and even a well-conceived
transaction may be unsuccessful to some degree because of market behavior or
unexpected events.

There can be no assurance that a liquid market will exist when the Fund
seeks to close out an option position. If the Fund were unable to close out an
option that it had purchased on a security, it would have to exercise the option
in order to realize any profit or the option may expire worthless. If the Fund
were unable to close out a covered call option that it had written on a
security, it would not be able to sell the underlying security unless the option
expired without exercise. As the writer of a covered call option, the Fund
forgoes, during the option's life, the opportunity to profit from increases in
the market value of the security covering the call option above the sum of the
premium and the exercise price of the call.

Use of futures contracts and options thereon also involves certain risks.
The variable degree of correlation between price movements of futures contracts
and price movements in the related portfolio positions of the Fund creates the
possibility that losses on the hedging instrument may be greater than gains in
the value of the Fund's position. Also, futures and options markets may not be
liquid in all circumstances and certain over the counter options may have no
markets. As a result, in certain markets, the Fund might not be able to close
out a transaction at all or without incurring losses. Although the use of
options and futures transactions for hedging should minimize the risk of loss
due to a decline in the value of the hedged position, at the same time they tend
to limit any potential gain which might result from an increase in the value of
such position. If losses were to result from the use of such transactions, they
could reduce net asset value and possibly income. The Fund may use these
techniques to hedge against changes in interest rates or securities prices or as
part of its overall investment strategy. The Fund will maintain segregated
accounts consisting of liquid assets, (or, as permitted by applicable
regulation, enter into certain offsetting positions) to cover its obligations
under options and futures contracts to avoid leveraging of the Fund.

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<PAGE>

INVESTMENT RESTRICTIONS

(b) Mortgage, pledge or hypothecate any of its assets
except in connection with any such borrowings.

4. Purchase or sell real estate, commodities or commodity contracts
(other than futures transactions for the purposes and under the conditions
described in the prospectus and in this Statement of Additional Information).

5. Invest more than 25% of the market value of its assets
in the securities of companies engaged in any one industry.
(Does not apply to investment in the securities of the U.S.
Government, its agencies or instrumentalities.)

The Fund observes the following policies, which are not deemed fundamental
and which may be changed without shareholder vote. The Fund may not:

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<PAGE>

8. Purchase any security if as a result the Fund would then hold more than
10% of any class of securities of an issuer (taking all common stock issues of
an issuer as a single class, all preferred stock issues as a single class, and
all debt issues as a single class) or more than 10% of the outstanding voting
securities of an issuer.

9. Invest in any issuer for purposes of exercising control
or management.

10. Purchase or hold securities of any issuer, if, at the time of purchase
or thereafter, any of the Trustees or officers of the Trust or the Fund's
investment manager owns beneficially more than 1/2 of 1%, and all such Trustees
or officers holding more than 1/2 of 1% together own beneficially more than 5%
of the issuer's securities.

11. Invest in securities of other investment companies which would result in
the Fund owning more than 3% of the outstanding voting securities of any one
such investment company, the Fund owning securities of another investment
company having an aggregate value in excess of 5% of the value of the Fund's
total assets, or the Fund owning securities of investment companies in the
aggregate which would exceed 10% of the value of the Fund's total assets.

12. Invest, in the aggregate, more than 15% of its total assets in
securities with legal or contractual restrictions on resale, securities which
are not readily marketable and repurchase agreements with more than seven days
to maturity.

13. Buy or sell interests in oil, gas or mineral exploration or development
programs or related leases, or real estate. (Does not preclude investments in
marketable securities of issuers engaged in such activities.)

14. Purchase any security if as a result the Fund would have more than 5% of
its total assets (taken at current value) invested in securities of companies
(including predecessors) less than three years old.

B-8

<PAGE>

DISTRIBUTIONS AND TAX INFORMATION

Distributions

Tax Information

B-9

<PAGE>

the extent the Fund designates the amount distributed as a qualifying dividend.
The aggregate amount so designated cannot, however, exceed the aggregate amount
of qualifying dividends received by the Fund for its taxable year. In view of
the Fund's investment policy, it is expected that dividends from domestic
corporations will be part of the Fund's gross income and that, accordingly, part
of the distributions by the Fund may be eligible for the dividends-received
deduction for corporate shareholders. However, the portion of the Fund's gross
income attributable to qualifying dividends is largely dependent on the Fund's
investment activities for a particular year and therefore cannot be predicted
with any certainty. The deduction may be reduced or eliminated if the Fund
shares held by a corporate investor are treated as debt-financed or are held for
less than 46 days.

Distributions of the excess of net long-term capital gains over net
short-term capital losses are taxable to shareholders as long-term capital
gains, regardless of the length of time the shareholders have held their shares.
Capital gains distributions are not eligible for the dividends-received
deduction referred to in the previous paragraph. Distributions of any net
investment income and net realized capital gains will be taxable as described
above, whether received in shares or in cash. Shareholders electing to receive
distributions in the form of additional shares will have a cost basis for
federal income tax purposes in each share so received equal to the net asset
value of a share on the reinvestment date. Distributions are generally taxable
when received. However, distributions declared in October, November or December
to shareholders of record on a date in such a month and paid the following
January are taxable as if received on December 31. Distributions are includable
in alternative minimum taxable income in computing a shareholder's liability for
the alternative minimum tax.

B-10

<PAGE>

B-11

<PAGE>

This discussion and the related discussion in the prospectus have been
prepared by Fund management, and counsel to the Fund has expressed no opinion in
respect thereof.

MANAGEMENT

Trustees

Steven J. Paggioli,* 46 President and Trustee

479 West 22nd Street, New York, New York 10011. Executive Vice
President, Robert H. Wadsworth & Associates, Inc. (consultants)
since 1986; Executive Vice President of Investment Company
Administration Corporation ("ICAC"; mutual fund administration, and
the Fund's Administrative Manager), and Vice President of First
Fund Distributors, Inc. ("FFD"; registered broker-dealer and the
Fund's Distributor) since 1990.

Dorothy A. Berry, 52 Trustee

Wallace L. Cook, 56 Trustee

30 Rockefeller Plaza, New York, New York 10112. Senior Vice
President, Rockefeller Trust Co. Financial Counselor, Rockefeller
& Co.

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<PAGE>

Carl A. Froebel, 57 Trustee

333 Technology Drive, Malvern, PA. Managing Director, Premier
Solutions, Ltd., Founder and former President, National Investor
Data Services, Inc. (investment related computer software).

Rowley W.P. Redington, 51 Trustee

Eric M. Banhazl*, 38 Treasurer

2025 E. Financial Way, Suite 101, Glendora, California 91741.
Senior Vice President, Robert H. Wadsworth & Associates, Inc.,
Senior Vice President of ICAC and Vice President of FFD since 1990.

Robin Berger*, 39 Secretary

Robert H. Wadsworth*, 56 Vice President

4455 E. Camelback Road, Suite 261E, Phoenix, Arizona 85018.
President of Robert H. Wadsworth & Associates, Inc. since 1982,
President of ICAC and FFD since 1990.

*Indicates an "interested person" of the Trust as defined in the
1940 Act.

Name of Trustee Total Compensation

Dorothy A. Berry $10,000
Wallace L. Cook $10,000
Carl A. Froebel $10,000
Rowley W.P Redington $10,000

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<PAGE>

During the fiscal year ended March 31, 1996, trustees' fees and
expenses in the amount of $3,009 were allocated to the Fund.

Investment Advisor

The Board of Trustees of the Trust establishes the Fund's policies and
supervises and reviews the management of the Fund. Osterweis Capital Management,
One Maritime Plaza, Suite 1201, San Francisco, CA 94111, is the Advisor to the
Fund.

Under the Investment Advisory Agreement with the Fund, the Advisor
provides the Fund with advice on buying and selling securities, manages the
investments of the Fund, furnishes the Fund with office space and certain
administrative services, and provides most of the personnel needed by the Fund.
As compensation, the Fund pays the Advisor a monthly management fee (accrued
daily) based upon the average daily net assets of the Fund at the rate of 1.00%
annually.

The Investment Advisory Agreement continues in effect from year to year so
long as such continuation is approved at least annually by (1) the Board of
Trustees of the Trust or the vote of a majority of the outstanding shares of the
Fund, and (2) a majority of the Trustees who are not interested persons of any
party to the Agreement, in each case cast in person at a meeting called for the
purpose of voting on such approval. The Agreement may be terminated at any time,
without penalty, by either the Fund or the Advisor upon sixty days' written
notice and is automatically terminated in the event of its assignment as defined
in the 1940 Act.

The Adviser has undertaken to limit the Fund's operating expenses to an
annual level of 1.75% of the Fund's average net assets. During the fiscal year
ended March 31, 1996, the Adviser received fees of $160,490 and reimbursed
expenses of $2,770. During the fiscal year ended March 31, 1995, the Fund
incurred advisory fees of $77,490 and the Advisor reimbursed expenses of
$44,889. During the Fund's initial fiscal period from October 4, 1993 through
March 31, 1994, the Fund incurred advisory fees of

B-14

<PAGE>

$14,490 and the Advisor reimbursed expenses of $29,431.

Administrator

The Fund has entered into an Administrative Management Agreement with
Investment Company Administration Corporation ("ICAC"), a corporation owned and
controlled by Messrs. Banhazl, Paggioli and Wadsworth. The Agreement provides
that ICAC will prepare and coordinate reports and other materials supplied to
the Trustees; prepare and/or supervise the preparation and filing of all
securities filings, periodic financial reports, prospectuses, statements of
additional information, marketing materials, tax returns, shareholder reports
and other regulatory reports or filings required of the Fund; prepare all
required filings necessary to maintain the Fund's qualification and/or
registration to sell shares in all states where the Fund currently does, or
intends to do business; coordinate the preparation, printing and mailing of all
materials (e.g., Annual Reports) required to be sent to shareholders; coordinate
the preparation and payment of Fund related expenses; monitor and oversee the
activities of the Fund's servicing agents (i.e., transfer agent, custodian, fund
accountants, etc.); review and adjust as necessary the Fund's daily expense
accruals; and perform such additional services as may be agreed upon by the Fund
and the Manager. For its services, ICAC receives an annual fee equal to the
greater of 0.25% of the Fund's average daily net assets or $30,000. During the
fiscal years ended March 31, 1996, March 31, 1995, and March 31, 1994, ICAC and
its predecessor received fees of $38,728, $30,000, and $14,712, respectively.

Distributor

First Fund Distributors, (the "Distributor") a corporation owned by
Messrs. Banhazl, Paggioli and Wadsworth, acts as the Fund's distributor and
principal underwriter in a continuous public offering of the Fund's shares. The
Distribution Agreement between the Fund and the Distributor continues in effect
from year to year if approved at least annually by (i) the Board of Trustees or
the vote of a majority of the outstanding shares of the Fund (as defined in the
1940 Act) and (ii) a majority of the Trustees who are not interested persons of
any such party, in each case cast in person at a meeting called for the purpose
of voting on such approval. The Distribution Agreement may be terminated without
penalty by the parties thereto upon sixty days' written notice, and is
automatically terminated in the event of its assignment as defined in the 1940
Act.

EXECUTION OF PORTFOLIO TRANSACTIONS

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<PAGE>

over-the-counter market will be executed directly with a "market-maker" unless,
in the opinion of the Advisor, a better price and execution can otherwise be
obtained by using a broker for the transaction.

Purchases of portfolio securities for the Fund also may be made
directly from issuers or from underwriters. Where possible, purchase and sale
transactions will be effected through dealers (including banks) which specialize
in the types of securities which the Fund will be holding, unless better
executions are available elsewhere. Dealers and underwriters usually act as
principal for their own account. Purchases from underwriters will include a
concession paid by the issuer to the underwriter and purchases from dealers will
include the spread between the bid and the asked price. If the execution and
price offered by more than one broker, dealer or underwriter are comparable, the
order may be allocated to a borker, dealer or underwriter that has provided
research or other services as discussed below.

In placing portfolio transactions, the Advisor will use its reasonable
efforts to choose broker-dealers capable of providing the services necessary to
obtain the most favorable price and execution available. The full range and
quality of services available will be considered in making these determinations,
such as the size of the order, the difficulty of execution, the operational
facilities of the firm involved, the firm's risk in positioning a block of
securities, and other factors. In those instances where it is reasonably
determined that more than one broker-dealer can offer the most favorable price
and execution available, consideration may be given to those broker-dealers
which furnish or supply research and statistical information to the Advisor that
it may lawfully and appropriately use in its investment advisory capacities, as
well as provide other services in addition to execution services. The Advisor
considers such information, which is in addition to and not in lieu of the
services required to be performed by it under its Agreement with the Fund, to be
useful in varying degrees, but of indeterminable value. Portfolio transactions
also may be placed with broker-dealers who sell shares of the Fund subject to
rules adopted by the National Association of Securities Dealers, Inc.

B-16

<PAGE>

determined in good faith by the Advisor to be reasonable in relation to the
value of the brokerage and/or research services provided by such broker-dealer.
The standard of reasonableness is to be measured in light of the Advisor's
overall responsibilities to the Fund.

The Fund does not effect securities transactions through brokers in
accordance with any formula, nor does it effect securities transactions through
brokers solely for selling shares of the Fund, although the Fund may consider
the sale of shares as a factor in allocating brokerage. However, as stated
above, broker-dealers who execute brokerage transactions may effect purchase of
shares of the Fund for their customers. The Fund does not use the Distributor to
execute its portfolio transactions. During the fiscal period from inception on
October 4, 1993 through March 31, 1994 and for the fiscal years ended March 31,
1995 and March 31, 1996, aggregate brokerage commissions paid by the Fund were
$7,043, $15,346 and $23,276, respectively.

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION

B-17

<PAGE>

and subsequent investments for certain fiduciary accounts or under circumstances
where certain economies can be achieved in sales of the Fund's shares.

Payments to shareholders for shares of the Fund redeemed directly from
the Fund will be made as promptly as possible but no later than seven days after
receipt by the Fund's Transfer Agent of the written request in proper form, with
the appropriate documentation as stated in the Prospectus, except that the Fund
may suspend the right of redemption or postpone the date of payment during any
period when (a) trading on the New York Stock Exchange is restricted as
determined by the SEC or such Exchange is closed for other than weekends and
holidays; (b) an emergency exists as determined by the SEC making disposal of
portfolio securities or valuation of net assets of the Fund not reasonably
practicable; or (c) for such other period as the SEC may permit for the
protection of the Fund's shareholders. At various times, the Fund may be
requested to redeem shares for which it has not yet received confirmation of
good payment; in this circumstance, the Fund may delay the redemption until
payment for the purchase of such shares has been collected and confirmed to the
Fund.

DETERMINATION OF SHARE PRICE

As noted in the Prospectus, the net asset value and offering price of
shares of the Fund will be determined once daily as of 4:00 p.m., New York City
time, on each day the New York Stock Exchange is open for trading. It is
expected that the Exchange will be closed on Saturdays and Sundays and on New
Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas. The Fund does not expect to determine the
net asset value of its shares on any day when the Exchange is not open for
trading even if there is sufficient trading in its portfolio securities on such
days to materially affect the net asset value per share.

B-18

<PAGE>

In valuing the Fund's assets for calculating net asset value, readily
marketable portfolio securities listed on a national securities exchange or on
the National Association of Securities Dealers' National Market System (the
"NASDAQ National Market System") are valued at the last sale price on the
business day as of which such value is being determined. If there has been no
sale on such exchange or the NASDAQ National Market System on such day, the
security is valued at the closing bid price on such day. Readily marketable
securities traded only in the over-the-counter market and not on the NASDAQ
National Market System are valued at the current or last bid price. If no bid is
quoted on such day, the security is valued by such method as the Board of
Trustees of the Trust shall determine in good faith to reflect the security's
fair value. All other assets of the Fund are valued in such manner as the Board
of Trustees in good faith deems appropriate to reflect their fair value.

PERFORMANCE INFORMATION

P(1+T)n = ERV

Where: P = a hypothetical initial purchase order of $1,000
from which the maximum sales load is deducted

T = average annual total return

n = number of years

ERV = ending redeemable value of the hypothetical $1,000
purchase at the end of the period

B-19

<PAGE>

The Fund's average annual total returns for the one year period and period
from inception on October 4, 1993 through June 30, 1996 were 13.94% and 10.01%,
respectively.

The Fund's total return may be compared to relevant indices, including
Standard & Poor's 500 Composite Stock Index and indices published by Lipper
Analytical Services, Inc. From time to time, evaluations of the Fund's
performance by independent sources may also be used in advertisements and in
information furnished to present or prospective investors in the Funds.

GENERAL INFORMATION

Investors in the Fund will be informed of the Fund's progress through
periodic reports. Financial statements certified by independent public
accountants will be submitted to shareholders at least annually.

Star Bank, 425 Walnut St., Cincinnati, OH 45201 acts as Custodian of the
securities and other assets of the Fund. American Data Services, 24 West Carver
St., Huntington, NY, 11743 acts as the Fund's transfer agent. The Custodian and
Transfer agent do not participate in decisions relating to the purchase and sale
of securities by the Fund.

Coopers and Lybrand, L.L.P., 350 South Grand Avenue, Los Angeles, CA
90071, are the independent auditors for the Fund.

Heller, Ehrman, White & McAuliffe, 333 Bush Street, San Francisco,
California 94104, are legal counsel to the Fund.

The following persons are beneficial owners of more than 5% of the Fund's
outstanding voting securities as of July 11, 1996. An asterisk (*)denotes an
account affiliated with the Advisor, officers or trustees:

*Osterweis Retirement Trust, John S. Osterweis, Trustee, San
Francisco, CA 94111; 9.46%

Hawaiian Trust Co, Trustee, FBO J. Edmunds Amended Profit
Sharing Trust, Honolulu, HI 96805-1930; 5.75%

B-20

<PAGE>

U.S. Bank of Oregon as Custodian, Vesper Society, Portland, OR
CA 94607; 12.08%.

The holders of beneficial interest of a Massachusetts business trust
could, under certain circumstances, be held personally liable as partners for
its obligations. However, the Trust's Agreement and Declaration of Trust
contains an express disclaimer of beneficial interest holder liability for acts
or obligations of the Trust. The Agreement and Declaration of Trust also
provides for indemnification and reimbursement of expenses out of the Fund's
assets for any beneficial interest holder held personally liable for obligations
of the Fund or Trust. The Agreement and Declaration of Trust provides that the
Trust shall, upon request, assume the defense of any claim made against any
beneficial interest holder for any act or obligation of the Fund or Trust and
satisfy any judgment thereon. All such rights are limited to the assets of the
Fund. The Agreement and Declaration of Trust further provides that the Trust may
maintain appropriate insurance (for example, fidelity bonding and errors and
omissions insurance) for the protection of the Trust, its shareholders,
trustees, officers, employees and agents to cover possible tort and other
liabilities. Furthermore, the activities of the Trust as an investment company
would not likely give rise to liabilities in excess of the Trust's total assets.
Thus, the risk of a beneficial interest holder incurring financial loss on
account of shareholder liability is limited to circumstances in which both
inadequate insurance exists and the Fund itself is unable to meet its
obligations.

The Trust is registered with the SEC as a management investment
company. Such a registration does not involve supervision of the management or
policies of the Fund. The Prospectus of the Fund and this Statement of
Additional Information omit certain of the information contained in the
Registration Statement filed with the SEC. Copies of such information may be
obtained from the SEC upon payment of the prescribed fee.

FINANCIAL STATEMENTS

B-21

<PAGE>
APPENDIX
Description of Bond Ratings*

Moody's Investors Service

B-22

<PAGE>

Standard & Poor's Corporation

AAA: Bonds rated AAA are highest grade debt obligations. This
rating indicates an extremely strong capacity to pay principal and
interest.

A: Bonds rated A have a strong capacity to pay principal and interest, although
they are more susceptible to the adverse effects of changes in circumstances and
economic conditions.

Ratings may be modified by the addition of a plus or minus sign to show relative
standing within the major rating categories.

*Ratings are generally given to securities at the time of issuance. While the
rating agencies may from time to time revise such ratings, they undertake no
obligation to do so.

B-23

<PAGE>

STATEMENT OF ADDITIONAL INFORMATION
August 1, 1996
PRO-CONSCIENCE
WOMEN'S EQUITY MUTUAL FUND
a series of
PROFESSIONALLY MANAGED PORTFOLIOS
500 Washington St. Ste. 600
San Francisco, CA 94133
(415) 296-9135

This Statement of Additional Information is not a prospectus and it
should be read in conjunction with the prospectus of the Pro-Conscience Women's
Equity Mutual Fund (the "Fund"). A copy of the prospectus of the Fund dated
August 1, 1996 is available by calling (415) 296-9135 or (800) 385-7003.

TABLE OF CONTENTS

Page

The Trust . . . . . . . . . . . . . . . . . . . . . . . . B-2
Investment Objective and Policies . . . . . . . . . . . . B-2
Investment Restrictions . . . . . . . . . . . . . . . . . B-5
Distributions and Tax Information . . . . . . . . . . . . B-7
Management . . . . . . . . . . . . . . . . . . . . . . . B-10
Execution of Portfolio Transactions . . . . . . . . . . . B-15
Additional Purchase and Redemption Information . . . . . B-17
Determination of Share Price . . . . . . . . . . . . . . B-18
Performance Information . . . . . . . . . . . . . . . . . B-18
General Information . . . . . . . . . . . . . . . . . . . B-19
Financial Statements . . . . . . . . . . . . . . . . . .. B-21
Appendix-Description of Bond Ratings . . . . . . . .. . . B-22

<PAGE>

THE TRUST

Professionally Managed Portfolios (the "Trust") is an open-end management
investment company organized as a Massachusetts business trust. The Trust
currently consists of various series which represent separate investment
portfolios. This Statement of Additional Information relates only to the
Pro-Conscience Women's Equity Mutual Fund series (the "Fund").

INVESTMENT OBJECTIVE AND POLICIES

The Fund is a mutual fund with the investment objective of providing long-term
capital appreciation by investing primarily in equity securities (common and
preferred stocks). The following discussion supplements the discussion of the
Fund's investment objective and policies as set forth in the Prospectus. There
can be no assurance the objective of the Fund will be attained.

Repurchase Agreements

The Fund may enter into repurchase agreements as discussed in the Prospectus.
Under such agreements, the seller of the security agrees to repurchase it at a
mutually agreed upon time and price. The repurchase price may be higher than the
purchase price, the difference being income to the Fund, or the purchase and
repurchase prices may be the same, with interest at a stated rate due to the
Fund together with the repurchase price on repurchase. In either case, the
income to the Fund is unrelated to the interest rate on the U.S. Government
security itself. Such repurchase agreements will be made only with banks with
assets of $500 million or more that are insured by the Federal Deposit Insurance
Corporation or with Government securities dealers recognized by the Federal
Reserve Board and registered as broker-dealers with the Securities and Exchange
Commission ("SEC") or exempt from such registration. The Fund will generally
enter into repurchase agreements of short durations, from overnight to one week,
although the underlying securities generally have longer maturities. The Fund
may not enter into a repurchase agreement with more than seven days to maturity
if, as a result, more than 15% of the value of the Fund's total assets would be
invested in illiquid securities including such repurchase agreements.

B-2

<PAGE>

delays and incur costs before being able to sell the security. Delays may
involve loss of interest or a decline in price of the U.S. Government security.
If a court characterizes the transaction as a loan and the Fund has not
perfected a security interest in the U.S. Government security, the Fund may be
required to return the security to the seller's estate and be treated as an
unsecured creditor of the seller. As an unsecured creditor, the Fund would be at
the risk of losing some or all of the principal and income involved in the
transaction. As with any unsecured debt instrument purchased for the Fund, the
investment manager seeks to minimize the risk of loss through repurchase
agreements by analyzing the creditworthiness of the obligor, in this case the
seller of the U.S. Government security.

Apart from the risk of bankruptcy or insolvency proceedings, there is also the
risk that the seller may fail to repurchase the security. However, the Fund will
always receive as collateral for any repurchase agreement to which it is a party
securities acceptable to it, the market value of which is equal to at least 100%
of the amount invested by the Fund plus accrued interest, and the Fund will make
payment against such securities only upon physical delivery or evidence of book
entry transfer to the account of its Custodian. If the market value of the U.S.
Government security subject to the repurchase agreement becomes less than the
repurchase price (including interest), the Fund will direct the seller of the
U.S. Government security to deliver additional securities so that the market
value of all securities subject to the repurchase agreement will equal or exceed
the repurchase price. It is possible that the Fund will be unsuccessful in
seeking to impose on the seller a contractual obligation to deliver additional
securities.

When-Issued Securities

The Fund may from time to time purchase securities on a "when-issued" basis. The
price of such securities, which may be expressed in yield terms, is fixed at the
time the commitment to purchase is made, but delivery and payment for the
when-issued securities take place at a later date. Normally, the settlement date
occurs within one month of the purchase; during the period between purchase and
settlement, no payment is made by the Fund to the issuer and no interest accrues
to the Fund. To the extent that assets of the Fund are held in cash pending the
settlement of a purchase of securities, the Fund would earn no income; however,
it is the Fund's intention to be fully invested to the extent practicable and
subject to the policies stated above. While when-issued securities may be sold
prior to the settlement date, the Fund intends to purchase such securities with
the purpose of actually acquiring them unless a sale appears desirable for
investment reasons. At the time the Fund makes the commitment to purchase a
security on a when-issued basis, it will record the transaction and reflect the
value of the security in determining its net asset value. The market value of
the when-issued

B-3

<PAGE>

securities may be more or less than the purchase price. The Fund does not
believe that its net asset value or income will be adversely affected by its
purchase of securities on a when-issued basis. The Fund will establish a
segregated account with its Custodian in which it will maintain liquid assets
equal in value to commitments for when-issued securities. Such segregated
securities either will mature or, if necessary, be sold on or before the
settlement date.

Foreign Securities; Currency Contracts and Related Options

Among the means through which the Fund may invest in foreign securities is the
purchase of American Depository Receipts ("ADR's") or European Depository
Receipts ("EDR's"). Generally, ADR's, in registered form, are denominated in
U.S. dollars and are designed for use in the U.S. securities markets, while
EDR's, in bearer form, may be denominated in other currencies and are designed
for use in European securities markets. ADR's are receipts typically issued by a
U.S. bank or trust company evidencing ownership of the underlying securities.
EDR's are European receipts evidencing a similar arrangement. For purposes of
the Funds' investment policies, ADR's and EDR's are deemed to have the same
classification as the underlying securities they represent. Thus an ADR or EDR
representing ownership of common stock will be treated as common stock.

As indicated in the prospectus, to the extent consistent with its investment
objectives and policies relating to investment in foreign securities, the Fund
is authorized to engage in currency exchange transactions by means of buying and
selling foreign currency on a spot basis, entering into foreign currency forward
contracts, buying and selling currency options, futures and options on future to
the extent of up to 5% of its assets. The Fund has no present intention to do
so.

These transactions involve certain risks. For example, there are significant
differences between the securities markets and options, futures or currency
contract markets that could result in an imperfect correlation between these
markets, causing a given transaction not to achieve its objectives. A decision
as to whether, when and how to use these transactions involves the exercise of
skill and judgment, and even a well-conceived transaction may be unsuccessful to
some degree because of market behavior or unexpected events.

There can be no assurance that a liquid market will exist when the Fund seeks to
close out an options, futures or currency contract position. The variable degree
of correlation between price movements of options, futures or currency contracts
and price movements in the related portfolio positions of the Fund creates the
possibility that losses on these transactions may be greater than gains in the
value of the Fund's position. Also, options, futures and currency contract
markets may not be liquid in all

B-4

<PAGE>

circumstances and certain over the counter options may have no markets. As a
result, in certain markets, the Fund might not be able to close out a
transaction at all or without incurring losses. Although the use of these
transactions is intended to reduce the risk of loss due to a decline in the
value of the Fund's underlying position, at the same time they tend to limit any
potential gain which might result from an increase in the value of such
position. If losses were to result from the use of such transactions, they could
reduce net asset value and possibly income. If the Fund determines to make use
of these transactions to the limited degree set forth above, the Fund will
observe the federal and other regulatory requirements pertaining to such
transactions and will maintain segregated accounts consisting of liquid assets
(or, as permitted by applicable regulation, enter into certain offsetting
positions) to cover its obligations under such transactions to avoid leveraging
of the Fund.

INVESTMENT RESTRICTIONS

The following policies and investment restrictions have been adopted by the Fund
and (unless otherwise noted) are fundamental and cannot be changed without the
affirmative vote of a majority of the Fund's outstanding voting securities as
defined in the 1940 Act. The Fund may not:

2. (a) Borrow money, except as stated in the Prospectus and
this Statement of Additional Information. Any such borrowing will
be made only if immediately thereafter there is an asset coverage
of at least 300% of all borrowings.

(b) Mortgage, pledge or hypothecate any of its assets
except in connection with any such borrowings.

B-5

<PAGE>

The Fund observes the following policies, which are not deemed
fundamental and which may be changed without shareholder vote. The
Fund may not:

10. Invest in any issuer for purposes of exercising control
or management.

B-6

<PAGE>

14. Invest, in the aggregate, more than 15% of its total
assets in securities which are not readily marketable or are
illiquid.

Under applicable provisions of Texas law, any investment by the Fund in warrants
may not exceed 5% of the value of the Fund's net assets. Included within that
amount, but not to exceed 2% of the value of the Fund's net assets may be
warrants which are not listed on the New York or American Stock Exchange.

DISTRIBUTIONS AND TAX INFORMATION

Distributions

Dividends from net investment income and distributions from net profits from the
sale of securities, if any, are generally made annually by the Fund after the
conclusion of its fiscal year (March 31). Also, the Fund expects to distribute
any undistributed net investment income on or about December 31 of each year.
Any net capital gains realized through the twelve month period ended October 31
of each year will also be distributed by December 31 of each year.

Each distribution by the Fund is accompanied by a brief explanation of the form
and character of the distribution. In January of each year the Fund will issue
to each shareholder a statement of the federal income tax status of all
distributions.

Tax Information

The Fund is treated as a separate entity for federal income tax purposes. The
Fund intends to qualify and elect to be treated as a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986 (the "Code"). In
order to qualify, the Fund must comply with all applicable requirements
regarding the source of its income, diversification of its assets and timing of
its distributions. The Fund's policy is to distribute to its shareholders all of
its investment company taxable income and any net realized long-term capital
gains for each fiscal year in a manner that complies with the distribution
requirements of the Code, so that the Fund will not be subject to any federal
income tax or excise taxes based on net income. The Fund will generally be
subject to federal income tax on its undistributed net investment income and
capital gains. To avoid federal excise taxes based on its net income, the Fund
must distribute (or be deemed to have distributed) by December 31 of each
calendar year (i) at least 98% of its ordinary income for such year, (ii) at
least 98% of the

B-7

<PAGE>

excess of its realized capital gains over its realized capital losses for the
12-month period ending on October 31 during such year and (iii) any amounts from
the prior calendar year that were not distributed.

Net investment income consists of interest and dividend income and foreign
currency gain, less expenses. Net realized capital gains for a fiscal period are
computed by taking into account any capital loss carryforward of the Fund.

Distributions of net investment income and the excess of net short-term capital
gain over net long-term capital loss are taxable to shareholders as ordinary
income. In the case of corporate shareholders, a portion of the distributions
may qualify for the intercorporate dividends-received deduction to the extent
the Fund designates the amount distributed as a qualifying dividend. The
aggregate amount so designated cannot, however, exceed the aggregate amount of
qualifying dividends received by the Fund for its taxable year. In view of the
Fund's investment policy, it is expected that dividends from domestic
corporations will be part of the Fund's gross income and that, accordingly, part
of the distributions by the Fund may be eligible for the dividends-received
deduction for corporate shareholders. However, the portion of the Fund's gross
income attributable to qualifying dividends is largely dependent on the Fund's
investment activities for a particular year and therefore cannot be predicted
with any certainty. The deduction may be reduced or eliminated if the Fund
shares held by a corporate investor are treated as debt-financed or are held for
less than 46 days.

Distributions of the excess of net long-term capital gains over net short-term
capital losses are taxable to shareholders as long-term capital gains,
regardless of the length of time the shareholders have held their shares.
Capital gains distributions are not eligible for the dividends-received
deduction referred to in the previous paragraph. Distributions of any net
investment income and net realized capital gains will be taxable as described
above, whether received in shares or in cash. Shareholders electing to receive
distributions in the form of additional shares will have a cost basis for
federal income tax purposes in each share so received equal to the net asset
value of a share on the reinvestment date. Distributions are generally taxable
when received. However, distributions declared in October, November or December
to shareholders of record on a date in such a month and paid the following
January are taxable as if received on December 31. Distributions are includable
in alternative minimum taxable income in computing a shareholder's liability for
the alternative minimum tax.

B-8

<PAGE>

held for less than three months. Accordingly, the Fund may be restricted in
effecting closing transactions within three months after entering into an option
contract.

A redemption of Fund shares may result in recognition of a taxable gain or loss.
Any loss realized upon a redemption of shares within six months from the date of
their purchase will be treated as a long-term capital loss to the extent of any
amounts treated as distributions of long-term capital gains during such
six-month period. Any loss realized upon a redemption of Fund shares may be
disallowed under certain wash sale rules to the extent shares of the Fund are
purchased (through reinvestment of distributions or otherwise) within 30 days
before or after the redemption.

Under the Code, the Fund is required to report to the Internal Revenue Service
all distributions of taxable income and capital gains as well as gross proceeds
from the redemption or exchange of Fund shares, except in the case of exempt
shareholders, which includes most corporations. Pursuant to the backup
withholding provisions of the Code, distributions of any taxable income and
capital gains and proceeds from the redemption of Fund shares may be subject to
withholding of federal income tax at the rate of 31 percent in the case of
non-exempt shareholders who fail to furnish the Fund with their taxpayer
identification numbers and with required certifications regarding their status
under the Code. If the withholding provisions are applicable, any such
distributions and proceeds, whether taken in cash or reinvested in additional
shares, will be reduced by the amounts required to be withheld. Corporate and
other exempt shareholders should provide the Fund with their taxpayer
identification numbers or certify their exempt status in order to avoid possible
erroneous application of backup withholding. The Fund reserves the right to
refuse to open an account for any person failing to provide a certified taxpayer
identification number.

The Fund will not be subject to tax in The Commonwealth of Massachusetts as long
as it qualifies as a regulated investment company for federal income tax
purposes. Distributions and the transactions referred to in the preceding
paragraphs may be subject to state and local income taxes, and the tax treatment
thereof may differ from the federal income tax treatment. Moreover, the above
discussion is not intended to be a complete discussion of all applicable tax
consequences of an investment in the Fund. Shareholders are advised to consult
with their own tax advisers concerning the application of federal, state and
local taxes to an investment in the Fund.

B-9

<PAGE>

a U.S. withholding tax at a rate of 30 percent (or at a lower rate
under an applicable income tax treaty) on amounts constituting
ordinary income.

This discussion and the related discussion in the prospectus have been prepared
by Fund management, and counsel to the Fund has expressed no opinion in respect
thereof.

MANAGEMENT

Trustees

The Trustees of the Trust, who were elected for an indefinite term by the
initial shareholders of the Trust, are responsible for the overall management of
the Trust, including general supervision and review of the investment activities
of the Fund. The Trustees, in turn, elect the officers of the Trust, who are
responsible for administering the day-to-day operations of the Trust and its
separate series. The current Trustees and officers and their affiliations and
principal occupations for the past five years are set forth below.

Steven J. Paggioli,* 46 President and Trustee

479 West 22nd Street, New York, New York 10011. Executive Vice
President, Robert H. Wadsworth & Associates, Inc. (consultants)
since 1986; Executive Vice President of Investment Company
Administration Corporation ("ICAC"; mutual fund administration and
the Fund's Administrator), and Vice President of First Fund
Distributors, Inc. ("FFD"; registered broker-dealer and the Fund's
Distributor) since 1990.

Dorothy A. Berry, 52 Trustee

Wallace L. Cook, 56 Trustee

30 Rockefeller Plaza, New York, New York 10112. Senior Vice
President, Rockefeller Trust Co. Financial Counselor, Rockefeller
& Co.

Carl A. Froebel, 57 Trustee

333 Technology Dr., Malvern, PA 19355. Managing Director, Premier
Solutions, Ltd. Founder and former President, National Investor

B-10

<PAGE>

Data Services, Inc. (investment related computer software).

Rowley W.P. Redington, 51 Trustee

Eric M. Banhazl*, 39 Treasurer

2025 E. Financial Way, Suite 101, Glendora, California 91741.
Senior Vice President, Robert H. Wadsworth & Associates, Inc.,
Senior Vice President of ICAC and Vice President of
FFD since 1990.

Robin Berger*, 39 Secretary

Robert H. Wadsworth*, 56 Vice President

4455 E. Camelback Road, Suite 261E, Phoenix, Arizona 85018.
President of Robert H. Wadsworth & Associates, Inc. since 1982,
President of ICAC and FFD.

*Indicates an "interested person" of the Trust as defined in the
1940 Act.

Set forth below is the rate of compensation received by the following Trustees
from the Fund and all other portfolios of the Trust. This total amount is
allocated among the portfolios. Disinterested trustees are also reimbursed for
expenses in connection with each Board meeting attended. No other compensation
or retirement benefits were received by any Trustee or officer from the Fund or
any other portfolios of the Trust.

Name of Trustee Total Compensation

Dorothy A. Berry $10,000
Wallace L. Cook $10,000
Carl A. Froebel $10,000
Rowley W.P Redington $10,000

During the fiscal year ended March 31, 1996, trustees' fees and expenses of
$3,008 were allocated to the Fund.

B-11

<PAGE>

The Fund receives investment advisory services pursuant to agreements with the
Advisor and the Trust. Each such agreement, after its initial term, continues in
effect for successive annual periods so long as such continuation is approved at
least annually by the vote of (1) the Board of Trustees of the Trust (or a
majority of the outstanding shares of the Fund to which the agreement applies),
and (2) a majority of the Trustees who are not interested persons of any party
to the Agreement, in each case cast in person at a meeting called for the
purpose of voting on such approval. Any such agreement may be terminated at any
time, without penalty, by either party to the agreement upon sixty days' written
notice and is automatically terminated in the event of its "assignment," as
defined in the 1940 Act.

Investment Advisor

As stated in the Prospectus, investment advisory services are provided to the
Fund by Pro-Conscience Funds, Inc., the Advisor, pursuant to an Investment
Advisory Agreement. The Agreement continues in effect from year to year for
periods not exceeding one year so long as such continuation is approved at least
annually by (1) the Board of Trustees of the Trust or the vote of a majority of
the outstanding shares of the Fund, and (2) a majority of the Trustees who are
not interested persons of any party to the Agreement, in each case cast in
person at a meeting called for the purpose of voting on such approval. The
Agreement may be terminated at any time, without penalty, by either the Fund or
the Advisor upon sixty days' written notice and is automatically terminated in
the event of its assignment as defined in the 1940 Act.

The use of the name "Pro-Conscience" by the Fund is pursuant to a license
granted by the Advisor, and in the event the Investment Advisory Agreement with
the Fund is terminated, the Advisor has reserved the right to require the Fund
to remove any references to the name "Pro-Conscience."

The Advisor has undertaken to limit the Fund's operating expenses to no more
than 1.50% of the Fund's average net assets annually. During the Fund's initial
fiscal period from October 1, 1993 through March 31, 1994, the Advisor received
advisory fees of $1,786 and reimbursed fees and expenses of $37,334. For the
fiscal year ended March 31, 1995, the Advisor waived its advisory fee and
reimbursed expenses in an amount totaling $75,535. For the fiscal year ended
March 31, 1996, the Advisor waived its advisory fee and reimbursed expenses
totaling $68,805.

Sub-Advisor

United States Trust Company of Boston is the Sub-Advisor to the
Fund, pursuant to a Sub-Advisory agreement approved by shareholders
at a meeting held on September 15,1995. The Sub-Advisor, together

B-12

<PAGE>

with the Advisor, is responsible for formulating and implementing the Fund's
investment program. The Sub-Advisor is a Massachusetts-chartered banking and
trust company and is a wholly-owned subsidiary of UST Corporation, a
Massachusetts bank holding company. It is located at 40 Court St., Boston, MA
02108. The Sub-Advisor has approximately $3.1 billion of assets under
management. The Trust Department of the Sub-Advisor has managed funds as a
fiduciary since 1895. Ms. Cheryl Smith, Vice President of the Sub-Advisor, is
the Fund's portfolio manager. For its services, the Sub-Advisor receives a
Sub-Advisory fee from the Advisor at the rate of 0.25% of the Fund's average net
assets annually. During the fiscal year ended March 31, 1996, the subadvisor
waived its fee.

Administrator

The Fund has entered into an Administration Agreement with Investment
Company Administration Corporation ("ICAC"), a corporation owned and controlled
by Messrs. Banhazl, Paggioli and Wadsworth. The Agreement provides that ICAC
will prepare and coordinate reports and other materials supplied to the
Trustees; prepare and/or supervise the preparation and filing of all securities
filings, periodic financial reports, prospectuses, statements of additional
information, marketing materials, tax returns, shareholder reports and other
regulatory reports or filings required of the Fund; prepare all required filings
necessary to maintain the Fund's qualification and/or registration to sell
shares in all states where the Fund currently does, or intends to do business;
coordinate the preparation, printing and mailing of all materials (e.g., Annual
Reports) required to be sent to shareholders; coordinate the preparation and
payment of Fund related expenses; monitor and oversee the activities of the
Fund's servicing agents (i.e., transfer agent, custodian, fund accountants,
etc.); review and adjust as necessary the Fund's daily expense accruals; and
perform such additional services as may be agreed upon by the Fund and ICAC.
ICAC received fees of $30,000 for each of the fiscal years ended March 31, 1995
and March 31, 1996 and $14,784 during the Fund's initial fiscal period from
October 1, 1993 through March 31, 1994

Distributor

First Fund Distributors, (the "Distributor") a corporation owned by Messrs.
Banhazl, Paggioli and Wadsworth, acts as the Fund's distributor and principal
underwriter in a continuous public offering of the Fund's shares. The
Distribution Agreement between the Fund and the Distributor continues in effect
from year to year if approved at least annually by (I) the Board of Trustees or
the vote of a majority of the outstanding shares of the Fund (as defined in the
1940 Act) and (ii) a majority of the Trustees who are not interested persons of
any such party, in each case cast in person at a meeting called for the purpose
of voting on such approval. The Distribution Agreement may be terminated without

B-13

<PAGE>

penalty by the parties thereto upon sixty days' written notice, and is
automatically terminated in the event of its assignment as defined in the 1940
Act.

Distribution Plan

At a meeting held on September 15, 1995, shareholders approved a distribution
plan under Investment Company Act Rule 12b-1. The Plan provides that the Fund
may pay distribution and related expenses of up to 0.25% of the Fund's average
net assets to the Advisor as distribution coordinator. Expenses permitted to be
paid include preparation, printing and mailing of prospectuses, shareholder
reports such as semi-annual and annual reports, performance reports and
newsletters, sales literature and other promotional material to prospective
investors, direct mail solicitations, advertising, public relations,
compensation of sales personnel, advisors or other third parties for their
assistance with respect to the distribution of the Fund's shares, payments to
financial intermediaries for shareholder support, administrative and accounting
services with respect to shareholders of the Fund and such other expenses as may
be approved from time to time by the Board of Trustees.

The Plan allows excess distribution expenses to be carried forward by the
Advisor, as distribution coordinator, and resubmitted in a subsequent fiscal
year, provided that (I)distribution expenses cannot be carried forward for more
than three years following initial submission; (ii) the Board of Trustees has
made a determination at the time of initial submission that the distribution
expenses are appropriate to be carried forward and (iii) the Trustees make a
further determination, at the time any distribution expenses which have been
carried forward are submitted for payment, that payment at the time is
appropriate, consistent with the objectives of the Plan and in the current best
interests of shareholders.

Under the Plan, the Trustees are furnished with information quarterly detailing
the amount of expenses paid under the plan and the purposes for which payments
were made. The Plan may be terminated at any time by vote of a majority of the
Trustees of the Trust who are not interested persons. Continuation of the Plan
is considered by such Trustees no less frequently than annually. Distribution
fees in the amount of $3,587 were incurred by the Fund from inception of the
Plan through March 31, 1996.

B-14

<PAGE>

EXECUTION OF PORTFOLIO TRANSACTIONS

Pursuant to the Investment Management Agreement, the Advisor determines which
securities are to be purchased and sold by the Fund and which broker-dealers
will be used to execute the Fund's portfolio transactions. Purchases and sales
of securities in the over-the-counter market will be executed directly with a
"market-maker" unless, in the opinion of the Advisor, a better price and
execution can otherwise be obtained by using a broker for the transaction.

Purchases of portfolio securities for the Fund also may be made directly from
issuers or from underwriters. Where possible, purchase and sale transactions
will be effected through dealers (including banks) which specialize in the types
of securities which the Fund will be holding, unless better executions are
available elsewhere. Dealers and underwriters usually act as principal for their
own account. Purchases from underwriters will include a concession paid by the
issuer to the underwriter and purchases from dealers will include the spread
between the bid and the asked price. If the execution and price offered by more
than one broker, dealer or underwriter are comparable, the order may be
allocated to a broker, dealer or underwriter that has provided research or other
services as discussed below.

In placing portfolio transactions, the Advisor will use its best efforts to
choose a broker-dealer capable of providing the services necessary to obtain the
most favorable price and execution available. The full range and quality of
services available will be considered in making these determinations, such as
the size of the order, the difficulty of execution, the operational facilities
of the firm involved, the firm's risk in positioning a block of securities, and
other factors. In those instances where it is reasonably determined that more
than one broker-dealer can offer the most favorable price and execution
available, consideration may be given to those broker-dealers which furnish or
supply research and statistical information to the Advisor that it may lawfully
and appropriately use in its investment advisory capacities, as well as provide
other services in addition to execution services. The Advisor considers such
information, which is in addition to and not in lieu of the services required to
be performed by it under its Agreement with the Fund, to be useful in varying
degrees, but of indeterminable value. Portfolio transactions may be placed with
broker-dealers who sell shares of the Fund subject to rules adopted by the
National Association of Securities Dealers, Inc.

B-15

<PAGE>

the Fund and may be useful to the Advisor in advising other clients. In
negotiating any commissions with a broker or evaluating the spread to be paid to
a dealer, the Fund may therefore pay a higher commission or spread than would be
the case if no weight were given to the furnishing of these supplemental
services, provided that the amount of such commission or spread has been
determined in good faith and the Advisor to be reasonable in relation to the
value of the brokerage and/or research services provided by such broker-dealer.
The standard of reasonableness is to be measured in light of the Advisor's
overall responsibilities to the Fund.

Investment decisions for the Fund are made independently from those of other
client accounts or mutual funds ("Funds") managed or advised by the Advisor.
Nevertheless, it is possible that at times identical securities will be
acceptable for both the Fund and one or more of such client accounts or Funds.
In such event, the position of the Fund and such client account(s) or Funds in
the same issuer may vary and the length of time that each may choose to hold its
investment in the same issuer may likewise vary. However, to the extent any of
these client accounts or Funds seeks to acquire the same security as the Fund at
the same time, the Fund may not be able to acquire as large a portion of such
security as it desires, or it may have to pay a higher price or obtain a lower
yield for such security. Similarly, the Fund may not be able to obtain as high a
price for, or as large an execution of, an order to sell any particular security
at the same time. If one or more of such client accounts or Funds simultaneously
purchases or sells the same security that the Fund is purchasing or selling,
each day's transactions in such security will be allocated between the Fund and
all such client accounts or Funds in a manner deemed equitable by the Advisor,
taking into account the respective sizes of the accounts and the amount being
purchased or sold. It is recognized that in some cases this system could have a
detrimental effect on the price or value of the security insofar as the Fund is
concerned. In other cases, however, it is believed that the ability of the Fund
to participate in volume transactions may produce better executions for the
Fund.

The Fund does not effect securities transactions through brokers in accordance
with any formula, nor does it effect securities transactions through such
brokers solely for selling shares of the Fund, although the Fund may consider
the sale of shares as a factor in allocating brokerage. However, as stated
above, broker-dealers who execute brokerage transactions may effect purchase of
shares of the Fund for their customers.

The Fund does not use the Distributor to execute its portfolio transactions.
During the Fund's initial fiscal period from October 1, 1993 through March 31,
1994 and for the fiscal years ended March 31, 1995 and March 31, 1996, brokerage
commissions paid by the Fund totaled $6,211, $31,934 and $12,822, respectively.

B-16

<PAGE>

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION

The Trust reserves the right in its sole discretion (I) to suspend the continued
offering of the Fund's shares, (ii) to reject purchase orders in whole or in
part when in the judgment of the Advisor or the Distributor such rejection is in
the best interest of the Fund, and (iii) to reduce or waive the minimum for
initial and subsequent investments for certain fiduciary accounts or under
circumstances where certain economies can be achieved in sales of the Fund's
shares.

Payments to shareholders for shares of the Fund redeemed directly from the Fund
will be made as promptly as possible but no later than seven days after receipt
by the Fund's Transfer Agent of the written request in proper form, with the
appropriate documentation as stated in the Prospectus, except that the Fund may
suspend the right of redemption or postpone the date of payment during any
period when (a) trading on the New York Stock Exchange is restricted as
determined by the SEC or such Exchange is closed for other than weekends and
holidays; (b) an emergency exists as determined by the SEC making disposal of
portfolio securities or valuation of net assets of the Fund not reasonably
practicable; or (C) for such other period as the SEC may permit for the
protection of the Fund's shareholders. At various times, the Fund may be
requested to redeem shares for which it has not yet received confirmation of
good payment; in this circumstance, the Fund may delay the redemption until
payment for the purchase of such shares has been collected and confirmed to the
Fund.

The Fund intends to pay cash (U.S. dollars) for all shares redeemed, but, under
abnormal conditions which make payment in cash unwise, the Fund may make payment
partly in securities with a current market value equal to the redemption price.
Although the Fund does not anticipate that it will make any part of a redemption
payment in securities, if such payment were made, an investor may incur
brokerage costs in converting such securities to cash. The Fund has elected to
be governed by the provisions of Rule 18f-1 under the 1940 Act, which contains a
formula for determining the minimum redemption amounts that must be paid in
cash.

The value of shares on redemption or repurchase may be more or less than the
investor's cost, depending upon the market value of the Fund's portfolio
securities at the time of redemption or repurchase.

As discussed in the Prospectus, the Fund provides a Check-A-Matic Plan for the
convenience of investors who wish to purchase shares of the Fund on a regular
basis. All record keeping and custodial costs of the Check-A-Matic Plan are paid
by the Fund. The market value of the Fund's shares is subject to fluctuation, so
before undertaking any plan for systematic investment, the investor should keep
in mind that this plan does not assure a profit nor protect against depreciation
in declining markets.

B-17

<PAGE>

DETERMINATION OF SHARE PRICE

As noted in the Prospectus, the net asset value of shares of the Fund will be
determined once daily as of 4:00 p.m., New York City time, on each day the New
York Stock Exchange is open for trading. It is expected that the Exchange will
be closed on Saturdays and Sundays and on New Year's Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas. The Fund does not expect to determine the net asset value of its
shares on any day when the Exchange is not open for trading even if there is
sufficient trading in its portfolio securities on such days to materially affect
the net asset value per share.

In valuing the Fund's assets for calculating net asset value, readily marketable
portfolio securities listed on a national securities exchange or on NASDAQ are
valued at the last sale price on the business day as of which such value is
being determined. If there has been no sale on such exchange or on NASDAQ on
such day, the security is valued at the closing bid price on such day. Readily
marketable securities traded only in the over-the-counter market and not on
NASDAQ are valued at the current or last bid price. If no bid is quoted on such
day, the security is valued by such method as the Board of Trustees of the Trust
shall determine in good faith to reflect the security's fair value. All other
assets of each Fund are valued in such manner as the Board of Trustees in good
faith deems appropriate to reflect their fair value.

PERFORMANCE INFORMATION

From time to time, the Fund may state its total return in advertisements and
investor communications. Total return may be stated for any relevant period as
specified in the advertisement or communication. Any statements of total return
will be accompanied by information on the Fund's average annual compounded rate
of return over the most recent four calendar quarters and the period from the
Fund's inception of operations. The Fund may also advertise aggregate and
average total return information over different periods of time.

The Fund's average annual compounded rate of return is determined by reference
to a hypothetical $1,000 investment that includes capital appreciation and
depreciation for the stated period, according to the following formula:

B-18

<PAGE>

P(1+T)n = ERV

Where: P = a hypothetical initial purchase order of $1,000
from which the maximum sales load is deducted

T = average annual total return

n = number of years

ERV = ending redeemable value of the
hypothetical $1,000 purchase at the end of the
period

Aggregate total return is calculated in a similar manner, except that the
results are not annualized. Each calculation assumes that all dividends and
distributions are reinvested at net asset value on the reinvestment dates during
the period and gives effect to the maximum applicable sales charge.

The Fund's average annual total returns for the one year period and from
inception on October 1, 1993 through June 30, 1996 were 16.89% and 8.27%
respectively.

The Fund's total return may be compared to relevant indices, including Standard
& Poor's 500 Composite Stock Index and indices published by Lipper Analytical
Services, Inc. From time to time, evaluations of a Fund's performance by
independent sources may also be used in advertisements and in information
furnished to present
or prospective investors in the Funds.

Investors should note that the investment results of the Fund will fluctuate
over time, and any presentation of the Fund's total return for any period should
not be considered as a representation of what an investment may earn or what an
investor's total return may be in any future period.

GENERAL INFORMATION

The Star Bank, located at 425 Walnut St., Cincinnati, Ohio 45201 acts as
Custodian of the securities and other assets of the Fund. American Data Services
, 24 West Carver St., Huntington, NY 11743 acts as the Fund's transfer and
shareholder service agent. The Custodian and Transfer Agent do not participate
in decisions relating to the purchase and sale of securities by the Fund.

B-19

<PAGE>

Tait, Weller & Baker, Two Penn Center Plaza, Philadelphia, PA
19102, are the independent auditors for the Fund.

Heller, Ehrman, White & McAuliffe, 333 Bush Street, San Francisco,
California 94104, are legal counsel to the Fund.

The following persons are beneficial owners of more than 5% of the Fund's
outstanding voting securities as of July 11, 1996. An asterisk denotes an
account affiliated with the Fund's investment advisor, officers, or trustees:

Star Bank, Cust., L. Christian IRA, Seattle, WA 98119; 8.20%*

Hub & Co., c/o U.S. Trust Co. Boston, Boston, MA 02108; 5.81%*

First National Bank of Seattle, Trustee, Rosebud Trust, Los Angeles, CA
90051; 7.64%.

The Trust is registered with the SEC as a management investment company. Such a
registration does not involve supervision of the management or policies of the
Fund. The Prospectus of the Fund and this Statement of Additional Information
omit certain of the information contained in the Registration Statement filed
with the SEC. Copies of such information may be obtained from the SEC upon
payment of the prescribed fee.

B-20

<PAGE>

FINANCIAL STATEMENTS

The annual report to shareholders for the Fund for the fiscal year ended March
31, 1996 is a separate document supplied with this Statement of Additional
Information and the financial statements, accompanying notes and report of
independent accountants appearing therein are incorporated by reference in this
Statement of Additional Information.

B-21

<PAGE>

APPENDIX
Description of Bond Ratings*

Moody's Investors Service

B-22

<PAGE>

Standard & Poor's Corporation

AAA: Bonds rated AAA are highest grade debt obligations. This
rating indicates an extremely strong capacity to pay principal and
interest.

A: Bonds rated A have a strong capacity to pay principal and interest, although
they are more susceptible to the adverse effects of changes in circumstances and
economic conditions.

Ratings may be modified by the addition of a plus or minus sign to show relative
standing within the major rating categories.

*Ratings are generally given to securities at the time of issuance. While the
rating agencies may from time to time revise such ratings, they undertake no
obligation to do so.

B-23

<PAGE>

PROFESSIONALLY MANAGED PORTFOLIOS

FORM N-1A
PART C

Item 24. Financial Statements and Exhibits.

(a) Financial Statements: Financial Statements for
the fiscal year ended March 31, 1996: Incorporated by
reference from the annual reports to shareholders for the
fiscal year ended March 31, 1996;(unaudited) (Avondale
Total Return, Crescent, Hodges, Osterweis, Perkins
Opportunity, and Women's Equity Mutual Fund Series).

Financial Statements for the fiscal year ended August
31, 1995: Incorporated by Reference from the annual
reports to shareholders for the fiscal year ended August 31, 1995
(Academy Value and Trent Equity Fund Series).

Financial Statements for the fiscal period ended December 31, 1995;
Incorporated by Reference from the annual reports to shareholders for
the fiscal period ended December 31, 1995 (Kayne, Anderson Rising
Dividend Fund Series, Insightful Investor Growth Fund Series, Matrix
Growth Fund Series, Matrix Emerging Growth Fund Series) and semi-annual
report for the fiscal period ended December 31, 1995 (Boston Managed
Growth Fund, Leonetti Balanced Fund and U.S. Global Leaders Growth Fund
series).

Financial Statements for the fiscal period ended February 29, 1996:
Incorporated by reference from the semi-annual report to shareholders
for the fiscal period ended February 29, 1996 (Lighthouse Growth Fund).

(b) Exhibits:

(1) Agreement and Declaration of Trust-2

(2) By-Laws--2

(3) Voting Trust Agreement -- Not applicable

(4) Specimen Share Certificate-3

(5) Form of Investment Advisory Agreement-1

(6) Form of Distribution Agreement-1

(7) Benefit Plan -- Not applicable

(8) Form of Custodian and Transfer Agent
Agreements-6

(9) Form of Administration Agreement-6

<PAGE>
(10) Consent and Opinion of Counsel as to legality of
shares-3

(11) Consent of Accountants-2

(12) All Financial Statements omitted from Item 23 --
Not applicable

(13) Letter of Understanding relating to initial
capital-3

(14) Model Retirement Plan Documents - Not applicable

(15) Form of Plan pursuant to Rule 12b-1 -1

(16) Schedule for Computation of Performance
Quotations-5

1 Incorporated by reference from Post-Effective Amendment No. 24 to
the Registration Statement on Form N-1A, filed on January 16, 1996.

2 Incorporated by reference from Post-Effective Amendment No. 23 to
the Registration Statement on Form N-1A, filed on December 29,
1995.

3 Incorporated by reference from Pre-Effective Amendment No. 1 to
the Registration Statement on Form N-1A, filed on April 13, 1987.

4 Incorporated by reference to Post-effective Amendment No. 5 to
the Registration Statement on Form N-1A, filed on May 2, 1991.

5 Incorporated by reference to Post-Effective Amendment No. 7 to
the Registration Statement on Form N-1A filed on June 17, 1992.

<PAGE>

Item 25. Persons Controlled by or under Common Control with
Registrant.

As of the date of this Amendment to the Registration Statement, there
are no persons controlled or under common control with the Registrant.

Item 26. Number of Holders of Securities.

Number of Record
Holders as of
Title of Class July 1, 1996

Shares of Beneficial Interest, no par value:

Academy Value Fund 134
Avondale Total Return Fund 150
Boston Managed Growth Fund 141
UAM/FPA Crescent Fund 119
Hodges Fund 124
Osterweis Fund 128
Perkins Opportunity Fund 7,223
ProConscience Womens Equity Fund 478
Trent Equity Fund 131
Matrix Growth Fund 479
Matrix Emerging Growth Fund 62
Kayne, Anderson Rising Dividend Fund 128
Insightful Investor Growth Fund 125
Leonetti Balanced Fund 291
U.S.Global Leaders Growth Fund 30
Harris, Bretall, Sullivan & Smith
Growth Equity Fund 26
Pzena Focused Value Fund 2
Titan Financial Services Fund 51

Item 27. Indemnification

The information on insurance and indemnification is
incorporated by reference to Pre-Effective Amendment No. 1 and
Post-Effective Amendment No. 1 to the Registrant's Registration
Statement.

In addition, insurance coverage for the officers and trustees
of the Registrant also is provided under a Directors and

<PAGE>

Officers/Errors and Omissions Liability insurance policy issued by ICI Mutual
Insurance Company with a $1,000,000 limit of liability.

Insofar as indemnification for liabilities arising under the Securities
Act of 1933 ("Securities Act") may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable. In the event
that a claim for indemnification against such liabilities (other than payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in connection with the successful defense
of any action, suit or proceeding) is asserted against the Registrant by such
director, officer or controlling person in connection with the shares being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

Item 28. Business and Other Connections of Investment Adviser.

With respect to Investment Advisors, the response to this item is
incorporated by reference to their Form ADVs as amended:

Herbert R. Smith & Co, Inc. File No. 801-7098
Hodges Capital Management, Inc. File No. 801-35811
Perkins Capital Management, Inc. File No. 801-22888
Crescent Research & Management File No. 801-36828
Osterweis Capital Management File No. 801-18395
Pro-Conscience Funds, Inc. File No. 801-43868
Trent Capital Management, Inc. File No. 801-34570
Academy Capital Management File No. 801-27836
Kayne, Anderson Investment Mgmnt. File No. 801-24241
Sena, Weller, Rohs, Williams File No. 801-5326
Insightful Management Company File No. 801-46565
Leonetti & Associates, Inc. File No. 801-36381
Lighthouse Capital Management File No. 801-32168
Yeager, Wood & Marshall, Inc. File No. 801-4995
Harris Bretall Sullivan & Smith File No. 801-7369

<PAGE>

Pzena Investment Management LLC File No. 801-50838
Titan Investment Advisers, LLC File No. 801-51306
Pacific Gemini Partners LLC File No. 801-50007

With respect to United States Trust Company of Boston, the response to this
item is incorporated by reference to the responses to Item 5 of Part A and Item
16 of Part B ("Management")of Post-Effective Amendment No. 20 to the
Registration Statement.

Item 29. Principal Underwriters.

(a) First Fund Distributors, Inc. (the "Distributor") is the principal
underwriter all series of the Registrant except for the Hodges Fund, the Matrix
Growth Fund, the Matrix Emerging Growth Fund and the Insightful Investor Growth
Fund. The Distributor acts as principal underwriter for the following other
investment companies:

RNC Liquid Assets Fund, Inc.
Hotchkis and Wiley Funds
PIC Investment Trust
Rainier Investment Management Mutual Funds
Guinness Flight Investment Funds
Jurika & Voyles Fund Group

First Dallas Securities, Inc., 2311 Cedar Springs Rd., Ste.
100, Dallas, TX 75201, an affiliate of Hodges Capital Management,
acts as Distributor of the Hodges Fund. The President and Chief
Financial Officer of First Dallas Securities, Inc. is Don W.
Hodges. First Dallas does not act as principal underwriter for any
other investment companies. Reynolds, DeWitt Securities Co., an
affiliate of Sena Weller Rohs Williams, 300 Main St., Cincinnati,
OH 45202, acts as Distributor for the Matrix Growth Fund and Matrix
Emerging Growth Fund. Newcomb & Company, 6 New England Executive
Park, Ste. 400, Burlington, MA 01803 acts as Distributor for the
Insightful Investor Growth Fund.

(b) The officers of First Fund Distributors, Inc. are:

Robert H. Wadsworth President & Treasurer
Eric Banhazl Vice President
Steven J. Paggioli Secretary

Each officer's business address is 4455 E. Camelback Rd., Ste.

<PAGE>

261-E, Phoenix, AZ 85018. Mr. Paggioli serves as President and a
Trustee of the Registrant. Mr. Wadsworth serves as Vice President
of the Registrant. Mr. Banhazl serves as Treasurer of the
Registrant.

c. Incorporated by reference from the Statement of Additional
Information filed herewith as Part B.

Item 30. Location of Accounts and Records.

The accounts, books and other documents required to be maintained by
Registrant pursuant to Section 31(a) of the Investment Company Act of 1940 and
the rules promulgated thereunder are in the possession the Registrant's
custodian and transfer agent, except those records relating to portfolio
transactions and the basic organizational and Trust documents of the Registrant
(see Subsections (2) (iii). (4), (5), (6), (7), (9), (10) and (11) of Rule
31a-1(b)), which, with respect to portfolio transactions are kept by each Fund's
Advisor at its address set forth in the prospectus and statement of additional
information and with respect to trust documents by its administrator at 479 West
22nd Street, New York, NY 10011.

Item 31. Management Services.

There are no management-related service contracts not discussed in
Parts A and B.

Item 32. Undertakings

The registrant undertakes to furnish to each person to whom a prospectus is
delivered a copy of each Fund's latest annual report to shareholders, upon
request and without charge.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940 the Registrant certifies that it meets all of the
requirements for effectiveness of this amendment to this registration statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused
this amendment to this Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized, in the City of New York in the State of
New York on July 19, 1996.

PROFESSIONALLY MANAGED PORTFOLIOS

By /S/ Steven J. Paggioli
Steven J. Paggioli
President

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

/S/ Steven J. Paggioli Trustee July 19, 1996
Steven J. Paggioli

/S/ Eric M. Banhazl Principal July 19, 1996
Eric M. Banhazl Financial
Officer

Dorothy A. Berry Trustee July 19, 1996
*Dorothy A. Berry

Wallace L. Cook Trustee July 19, 1996
*Wallace L. Cook

Carl A. Froebel Trustee July 19, 1996
*Carl A. Froebel

Rowley W. P. Redington Trustee July 19, 1996
*Rowley W. P. Redington

* By /S/ Steven J. Paggioli
Steven J. Paggioli, Attorney-in-Fact under powers of
attorney as filed withPost-Effective Amendment No. 20 to the
Registration Statement filed on May 17, 1995

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

We consent to the references to our firm in the Post-Effective Amendment No.
31 to the Registration Statement on Form N-1A of Professionally Managed
Portfolios and to the use of our reports dated April 26, 1996 on the financial
statements and financial highlights of the Avondale Total Return Fund, Hodges
Fund, Perkins Opportunity Fund, UAM/FPA Crescent Fund, and Pro-Conscience
Women's Equity Mutual Fund, each a series of Professionally Managed Portfolios.
Such financial statements and financial highlights appear in the 1996 Annual
Report to Shareholders of each Fund which are incorporated by reference into the
Statements of Additional Information.

Tait, Weller & Baker

Philadelphia, PA
July 19, 1996

<PAGE>

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

We consent to the references to our firm in the Post-Effective Amendment No.
31 to the Registration Statement on Form N-1A of Professionally Managed
Portfolios and to the use of our report dated May 17, 1996 on the financial
statements and financial highlights of the Osterweis Fund, a series of
Professionally Managed Portfolios. Such financial statements and financial
highlights appear in the 1996 Annual Report to Shareholders of the Fund which
are incorporated by reference into the Statements of Additional Information.

Ernst & Young LLP

Los Angeles, CA
July 19, 1996