PROFESSIONALLY MANAGED PORTFOLIOS, 485BPOS, 1996-11-01

PROFESSIONALLY MANAGED PORTFOLIOS
485BPOS, 1996-11-01

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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. 33 /X/

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / /
Amendment No. 34 /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

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:

XX Immediately upon filing pursuant to paragraph (b)
--
On 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 current notice required by Rule 24f-2 will be filed on or
before October 31, 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>

Prospectus

October 31, 1996

BOSTON MANAGED GROWTH FUND
40 Court Street
Boston, MA 02108
(617) 726-7250

BOSTON MANAGED GROWTH FUND (the "Fund") is a no-load mutual fund with the
investment objective of seeking income and long-term capital growth through an
actively managed portfolio of stocks, bonds and money market instruments. United
States Trust Company of Boston, a Massachusetts-chartered banking and trust
company (the "Advisor"), acts as investment advisor to the Fund. The Advisor is
not affiliated with United States Trust Company of New York.

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. A Statement of Additional Information dated
October 31, 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 or telephone number given above.

TABLE OF CONTENTS

<S> <C>
Expense Table........................................................................ 2
Financial Highlights................................................................. 3
Objective and Investment Approach of the Fund; Risk Factors.......................... 4
Management of the Fund............................................................... 5
How To Invest in the Fund............................................................ 6
How To Redeem an Investment in the Fund.............................................. 7
Retirement Plans..................................................................... 9
How the Fund's Per Share Value is Determined......................................... 9
Distributions and Taxes.............................................................. 9
General Information.................................................................. 10

</TABLE>

SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF OR GUARANTEED OR ENDORSED
BY UNITED STATES TRUST COMPANY OF BOSTON OR ANY BANK. SHARES OF THE FUND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION ("FDIC"), FEDERAL RESERVE
BOARD OR ANY OTHER AGENCY.

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 October 31, 1996

<PAGE>
EXPENSE TABLE

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)
Investment Advisory Fee.............................................................. 0.75%
Other expenses (after waiver)........................................................ 0.25%*
- ------------------------------------------------------------------------------------------------------------------------------------
Total Fund Operating Expenses (after waiver)......................................... 1.00%*
====================================================================================================================================
<FN>

*The Advisor has voluntarily undertaken to limit the operating expenses of
the Fund to no more than 1.00% of average net assets annually.

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 each time period. Amounts in the table could increase if
the Advisor's limitation of expenses were terminated.

One year............................................................................. $ 10
Three years.......................................................................... $ 32
Five years........................................................................... $ 55
Ten years............................................................................ $ 122

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."
</FN>
</TABLE>

The BOSTON MANAGED GROWTH 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 may
be purchased and redeemed without a sales or redemption charge at their net
asset value. The minimum initial investment is $100,000 with subsequent
investments of $1,000 or more. Because the prices of stocks, bonds and money
market instruments fluctuate, the value of an investment in the Fund will vary
as the market value of its investment portfolio changes, and when shares are
redeemed, they may be worth more or less than their original cost. 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 in no more than 10% of the voting securities of a single issuer, with
the exception of U.S. Treasury and agency securities.

Page 2
<PAGE>

FINANCIAL HIGHLIGHTS
For a share outstanding throughout the period.

The following information has been audited by Ernst & Young L.L.P.,
independent accountants, whose unqualified report covering the fiscal period
ended June 30, 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>

- ------------------------------------------------------------------------------------------------------------------------------------
December 1, 1995*
through
June 30, 1996
- ------------------------------------------------------------------------------------------------------------------------------------

<S> <C>
Net asset value, beginning of period ................................................... $73.62
------
Income from investment operations:
Net investment income ............................................................ 1.00
Net realized and unrealized gain on investments .................................. 2.78
----
Total from investment operations........................................................ 3.78
----
Less distributions:
Dividends from net investment income.............................................. (0.15)
-----
Net asset value, end of period ......................................................... $77.25
======
Total return ........................................................................... 5.14%++
Ratios/supplemental data:
Net assets, end of period (millions).................................................... $61.8
Ratio of expenses to average net assets:
Before expense reimbursement ..................................................... 1.00%+
After expense reimbursement....................................................... 1.00%+
Ratio of net investment income to average net assets:
Before expense reimbursement ..................................................... 2.43%+
After expense reimbursement ...................................................... 2.43%+
Portfolio turnover rate ................................................................ 17.69%
Average commission rate paid per share.................................................. $ 0.05

<FN>

*Commencement of operations.

+Annualized.

++Not Annualized.
</FN>
</TABLE>

Page 3
<PAGE>
OBJECTIVE AND INVESTMENT APPROACH OF THE FUND; RISK FACTORS

The Fund's investment objective is to seek income and long-term capital
growth through an actively managed portfolio of stocks, bonds and money market
instruments. It is not the policy of the Fund to take risks to obtain
speculatively or aggressively high returns. There is no predetermined percentage
of assets to be allocated to either stocks, bonds or money market instruments.

The expected returns and risks of different asset classes - stocks, bonds
and money market instruments - change over time. The ability to evaluate and
determine the relative attractiveness of these asset categories is advantageous
in controlling risk and achieving attractive returns. In determining the asset
allocation of the Fund, the Advisor considers various macroeconomic variables
such as interest rates, inflation, corporate profits, unemployment, the dollar,
as well as the relative prices of stocks, bonds and money market instruments.
The Fund is not limited in its investment selection to companies located in the
Boston area or any other specific region. The Fund may invest in both domestic
and foreign securities. See "Foreign Securities" on page 4.

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. 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.

Bond investments made by the Fund are those which are considered by the
Advisor to be 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, possess
speculative characteristics and are more susceptible to changing market
conditions. The Fund may purchase lower-rated obligations (those rated below BBB
or Baa, which are considered non-investment grade securities), but no more than
20% of its net assets may be so invested and the Fund will not purchase or hold
obligations rated lower than B.

Bonds rated below investment grade typically carry higher coupon rates
than investment grade bonds, but also are described as speculative by both
Moody's and S&P and may be 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 more
highly rated bonds. Lower rated bonds also are likely to be more sensitive to
adverse economic or company developments. The Advisor seeks to reduce the risks
associated with investing in such securities by limiting the Fund's holdings in
such securities. See the Statement of Additional Information concerning bond
ratings.

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. A repurchase agreement is a short-term investment
in which the purchaser 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 as a purchaser will require
full

Page 4
<PAGE>
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 the most creditworthy banks and 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 5%
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 15% of its assets in
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 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 invest without regard to this 15% limitation in
securities of foreign issuers which are listed and traded on a domestic national
securities exchange.

Other Investment Techniques. The Fund may purchase put and call options
and engage in the writing of covered call options and secured put options on
securities, and employ a variety of other investment techniques, including the
purchase and sale of market index futures contracts, financial futures contracts
and options on such futures. These policies and techniques may involve a greater
degree of risk than those inherent in more conservative investment approaches.
The Fund will engage in futures contracts and related options only for hedging
purposes. It will not engage in such transactions for speculation or leverage.
The Fund maintains an operating policy that it may not invest in options and
futures contracts if as a result more than 5% of its assets would be at risk.

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 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 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. United States Trust Company
of Boston is the Advisor to the Fund. The Advisor is a Massachusetts-chartered
banking and trust company and is a wholly-owned subsidiary of UST Corp., a
Massachusetts bank holding company. It is located at 40 Court Street, Boston MA
02108. The Trust Department of the Advisor has managed funds as a fiduciary
since 1895. Mr. Domenic Colasacco, Executive Vice President of UST Corp., and a
member of UST Corp.'s Executive Policy Committee is the Fund's portfolio
manager. He is the President of United States Trust Company and has been its
Chief Investment Officer since 1980. Mr. Colasacco is a Chartered Financial
Analyst and a member of the Boston Security Analysts' Society. Neither the
Advisor nor UST Corp. is affiliated with United States Trust Company of New
York.

Page 5
<PAGE>
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
investment advisory fee (accrued daily) based upon the average daily net assets
of the Fund at the rate of 0.75% annually.

Investment Company Administration Corporation (the "Administrator") acts
as the Fund's Administrator under a 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 an annual rate equal to the greater of
0.10 of 1% of the Fund's average daily net assets or $30,000.

The Fund is responsible for its own operating expenses. The Advisor has
voluntarily undertaken to limit the Fund's operating expenses to 1.00% of the
Fund's average net assets annually. This undertaking may be modified or
withdrawn by the Advisor upon notice to shareholders. 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. Any
such reductions made by the Advisor in its fees or payments or reimbursements of
expenses which are the Fund's obligation may be subject to reimbursement by the
Fund.

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 in the Fund is $100,000. Subsequent
investments must be at least $1000. First Fund Distributors, Inc. (the
"Distributor"), an affiliate of the Administrator, 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. 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 security has a readily ascertainable market
value, its acquisition is consistent with the Fund's investment objective and
the tendered security is otherwise acceptable to the Fund's Advisor and is
acquired for investment and not resale.

Shares of the Fund are offered continuously for purchase at their net
asset value per share next determined after a purchase order is received.

Investors may purchase shares of the Fund by check or 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 "Boston Managed Growth Fund," should be mailed
to: Boston Managed Growth Fund, c/o United States Trust Company of Boston, 40
Court Street, Boston, MA 02108.

Subsequent investments should be made by check payable to "Boston Managed
Growth Fund," and mailed to the address indicated above in the envelope
provided. The investor's account number should be written on the check.

Page 6
<PAGE>
By Wire: For initial investments, before wiring funds, an investor should
call 1-800-626-7788, ext. 4050, or 1-617-695-4050 to advise that an initial
investment will be made by wire and to receive an account number. The
Shareholder Service Agent will request the investor's name and the dollar amount
to be invested and provide an order confirmation number. The investor should
then complete the Fund's Account Application (included with this Prospectus),
including the date and the order confirmation number on the application. The
completed Application should be mailed to the address shown at the top of the
Account Application. The investor's bank should transmit immediately available
funds by wire for purchase of shares, in the investor's name to the Fund as
follows:

United States Trust Company of Boston
ABA Routing Number: 0110-0133-1
for further credit to Boston Managed Growth Fund
Account Number [Name of Shareholder]

For subsequent investments, the investor's bank should wire funds as
indicated above. It is not necessary to contact the Shareholder Service Agent
prior to making subsequent investments by wire, but 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 from the Shareholder Service Agent
about remitting funds in this manner and from their own banks about any fees
that may be imposed.

General. Payment of redemption proceeds from shares that were 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; 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.

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 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
outstanding shares in the account 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 Shareholder Service 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

Page 7
<PAGE>
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 at
1-800-626-7788, ext. 4050 or 1-617-695-4050 before 1:00 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 agents 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 its agents 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 identification procedures are not followed, the Fund or
its agents could be liable for any loss, expense, 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.

Shareholders may request telephone redemption privileges after an account
is opened; however, the authorization form will require a separate signature
guarantee. Shareholders may experience delays in exercising telephone redemption
privileges during periods of abnormal market activity.

General. Payment of 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 applicable 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. Investors should consult their
own tax advisor as to the effect of any redemption.

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 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 $25,000. 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 $25,000 and will be allowed 30 days to make an additional
investment to bring the value of the account to at least $25,000 before the Fund
takes any action.

Page 8
<PAGE>
RETIREMENT PLANS

The Fund offers an Individual Retirement Account plan and information is
available from the Fund and the Distributor with respect to Keogh, Section
403(b) and other retirement plans offered. Investors should consult their own
tax advisor before establishing any retirement plan.

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.

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 (June 30). 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 earned during the calendar year as well as any additional
undistributed capital gains earned during the 12-month period ended each 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.

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, 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 tax or excise taxes based on net
income. 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 distributions 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 in 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

Page 9
<PAGE>
Statement of Additional Information. Shareholders should consult their own
advisers concerning federal, state and local tax consequences of investment in
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 June 30.

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 a change in the Fund's investment objective); 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, through the most recent calendar quarter. 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 address and telephone number shown on the cover of this prospectus.

Page 10
<PAGE>
Advisor and Shareholder Service Agent

United States Trust Company of Boston
40 Court Street
Boston, MA 02108
(617) 726-7250

Distributor

First Fund Distributors, Inc.
4455 E. Camelback Rd., Ste. 261E
Phoenix, AZ 85018

Custodian and Transfer Agent

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

Auditors

Ernst & Young, L.L.P.
515 South Flower Street
Los Angeles, CA 90071

Legal Counsel

Heller, Ehrman, White & McAuliffe
333 Bush Street
San Francisco, CA 94104
<PAGE>
Leonetti Balanced Fund
Prospectus

October 31, 1996

LEONETTI BALANCED FUND
1130 Lake Cook Road, Ste. 105
Buffalo Grove, IL 60089
(800) 454-0999

The LEONETTI BALANCED FUND (the "Fund") is a no-load mutual fund with the
investment objective of seeking total return through a combination of income and
capital growth, consistent with preservation of capital. The Fund seeks to
achieve its objective by investing primarily in equity securities (common and
preferred stocks) and higher quality fixed-income obligations. The balance
between equity and fixed-income securities will be adjusted based upon the
market interpretation of the Advisor to the Fund, Leonetti & Associates, Inc.
(the "Advisor").

TABLE OF CONTENTS

<S> <C>
Expense Table........................................................................ 2
Financial Highlights................................................................. 3
Objective and Investment Approach of the Fund; Risk Factors.......................... 4
Management of the Fund............................................................... 5
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......................................... 9
Distributions and Taxes.............................................................. 10
General Information.................................................................. 10
</TABLE>

SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF OR GUARANTEED OR
ENDORSED BY LEONETTI & ASSOCIATES, INC. SHARES OF THE FUND ARE NOT INSURED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION ("FDIC"), FEDERAL RESERVE BOARD OR ANY
OTHER AGENCY.

Prospectus dated October 31, 1996

<PAGE>
EXPENSE TABLE

<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

Annual Fund Operating Expenses
(As a percentage of average net assets)
Advisory Fees......................................................................... 1.00%
Fee to Administrator* ................................................................ 0.20%
Other Expenses........................................................................ 1.06%
----
Total Fund Operating Expenses......................................................... 2.26%
====
<FN>

* The Administrator's fee is the greater of $30,000 or 0.20% of average net assets annually.
</FN>
</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
each time period.
<S> <C>
One year.............................................................................. $ 23
Three years........................................................................... $ 71
Five years............................................................................ $ 121
Ten years............................................................................. $ 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."

The LEONETTI BALANCED 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 $100 with subsequent investments of $100 or more. Shares
will be redeemed at net asset value per share.

Page 2
<PAGE>

FINANCIAL HIGHLIGHTS
For a share outstanding throughout the period.

- ------------------------------------------------------------------------------------------------------------------------------------
August 1, 1995*
through
June 30, 1996
- ------------------------------------------------------------------------------------------------------------------------------------

<S> <C>
Net asset value, beginning of period ...................................................... $10.00
Income from investment operations:
Net investment income ............................................................... .09
Net realized and unrealized gain on investments ..................................... .76
---
Total from investment operations........................................................... .85
---
Less distributions:
Dividends from net investment income................................................. (.05)
----
Net asset value, end of period ............................................................ $10.80
======

Total return .............................................................................. 8.46%++

Ratios/supplemental data:
Net assets, end of period (millions)....................................................... $ 10.1
Ratio of expenses to average net assets:
Before expense reimbursement ........................................................ 2.26%+
After expense reimbursement.......................................................... 2.26%+
Ratio of net investment income to average net assets:
Before expense reimbursement ........................................................ 1.02%+
After expense reimbursement ......................................................... 1.02%+

Portfolio turnover rate ................................................................... 42.16%

Average commission rate paid per share of stock purchased by the Fund ..................... $ 0.06
<FN>

*Commencement of operations.

+Annualized.

++Not Annualized.
</FN>
</TABLE>

Page 3
<PAGE>
OBJECTIVE AND INVESTMENT APPROACH OF THE FUND; RISK FACTORS

The investment objective of the Fund is to provide total return, through a
combination of income and capital growth, consistent with preservation of
capital. The Fund seeks to achieve its objective by investing in a combination
of equity securities (common and preferred stocks) and fixed-income obligations.
There is, of course, no assurance that the Fund's objective will be achieved.
There is no fixed percentage of the Fund's assets that will be invested in
either equity securities or fixed-income securities. It is expected that under
normal circumstances the Fund's investment in either equity securities or
fixed-income securities will range between 30% and 70% of net assets.

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, and when shares are redeemed they may be worth more or less
than their original cost. 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.

Investment Approach-Equity Securities. In selecting equity securities for the
Fund the Advisor emphasizes three types of investments: out-of-favor blue chip
stocks, growth stocks that pay dividends and exhibit a rising trend in earnings
and revenue, and small companies with rapidly rising revenues and earnings.

In evaluating out-of-favor companies, the Advisor's fundamental focus is on a
company's business. The Advisor looks for companies that have experienced
problems due to debt, management, excessive expenses or cyclical forces, but are
still leaders in their industries. This group of companies includes, but is not
limited to, the largest corporations, principally those that are components of
the Dow Jones Industrial, Transportation and Utility averages. In the Advisor's
view, such companies frequently undergo restructuring, management changes, debt
reduction and other corporate events that can have a positive effect on prices
of such stocks, while still providing a cash flow through regular dividend
payments.

The Advisor also seeks growth stocks for the Fund that pay dividends and that
have shown a rising trend in earnings and revenues over a period of years. In
looking at such companies, the Advisor views positively such characteristics as
low or declining debt levels, rising gross profit margins, expanding product
lines and significant management stock ownership. Many of such companies may be
components of the Standard & Poor's 500 Index ("S&P 500"), but the Advisor is
not limited to companies within this index and the Fund may invest in other,
non-S&P 500 companies that the Advisor believes have these characteristics.

The small companies selected for the Fund's portfolio will have experienced
rapidly rising revenues and earnings. The Advisor looks for such companies that
have characteristics such as little or no debt, a following in the investment
community, an expanding product line or products that involve a change or
improvement in their industry, and control or significant involvement by company
founders in day-to-day management. Smaller companies present greater
opportunities for capital growth, but may also involve greater risks than larger
companies. Although smaller companies can benefit from the development of new
products and services, they also may have limited product lines, markets or
financial resources, and their securities may trade less frequently and in more
limited volume than the securities of larger, more mature companies. As a
result, the prices of the securities of such smaller companies may fluctuate to
a greater degree than the prices of the securities of other issuers.

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's approach is to focus the Fund's fixed-income holdings in bills,
notes and bonds issued or guaranteed by the U.S. Government, its agencies and
instrumentalities. Corporate bonds and notes held by the Fund must be investment

Page 4
<PAGE>
grade, i.e., rated BBB or better by Standard & Poor's Corporation ("S&P"), Duff
& Phelps Credit Rating Co. ("Duff"), or Fitch Investors Service, Inc. ("Fitch,")
or Baa or better by Moody's Investors Service ("Moody's"). Under normal market
conditions, it is expected that at least 25% of the Fund's net assets will be
held in fixed-income senior securities.

Securities rated BBB by S&P, Duff, and Fitch or Baa by Moody's are
investment grade, but Moody's 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.

In selecting fixed-income securities for the Fund the Advisor uses a combined
approach of technical and fundamental analysis, focusing on interest rate
anticipation and the yield curve. Corporate bond analysis encompasses the same
research approach that is used in purchasing common stocks for the Fund. Lower
quality and "junk" bonds are avoided.

Risk Factors. Securities in which the Fund invests, and its share price and
returns, are subject to fluctuation. Investments in equity securities in general
are subject to market risks that may cause their prices to fluctuate over time.
Generally, the value of fixed-income securities will change as interest rates
fluctuate. During periods of falling interest rates, the values of outstanding
long-term debt obligations generally rise. Conversely, during periods of rising
interest rates, the value of such securities generally declines. The magnitude
of these fluctuations generally will be greater for securities with longer
maturities. Debt securities are also subject to credit risk relative to the
ability of the issuer to make timely interest payments and repay principal on
maturity. To the extent the Fund invests in undervalued or out-of-favor
companies, there may be a substantial time period before the securities of such
companies return to price levels believed by the Advisor to represent their true
value. An investment in the Fund therefore is more suitable for long-term
investors who can bear the risk of short-term fluctuations in principal and net
asset value.

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
approximately 60%. 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.

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. Leonetti & Associates, Inc.,
1130 Lake Cook Road, Suite 105, Buffalo Grove, IL 60089 acts as investment
advisor to the Fund. The Advisor was founded in 1982 and is controlled by Mr.
Michael E. Leonetti. The Advisor provides investment advisory services to
individual and institutional investors, and manages assets in excess of $200
million. Mr. Craig T. Johnson is responsible for management of the Fund's
portfolio.

Page 5
<PAGE>
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. This fee is higher than that paid by most investment
companies.

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 of each 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 million 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 may
reduce its fees or make reimbrsements to the Fund at any time in order to reduce
the Fund's expenses, or to the extent required by applicable securities laws.
Any such reductions made by the Advisor in its fees or payments or reimbursement
of expenses which are the Fund's obligation may be subject to reimbursement by
the Fund.

HOW TO INVEST IN THE FUND

The minimum initial investment in the Fund is $100. Subsequent investments must
be at least $100. First Fund Distributors, Inc. (the "Distributor"), an
affiliate of the Administrator, 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 individuals or group or periodic
plans. 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 objective and it is otherwise acceptable to the
Fund's Advisor.

Page 6
<PAGE>
Fund's net asset value will be entered at the next calculated public offering
price. Investors may be charged a fee if they effect a transaction in fund
shares through a broker or agent.

Investors may purchase shares of the Fund by check or 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 "Leonetti Balanced Fund," should be mailed to
Leonetti Balanced Fund, P.O.
Box 856, Cincinnati, OH 45264-0856.

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 "Leonetti Balanced Fund," mailed
to the Leonetti Balanced Fund 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 Fund's Transfer Agent at (800) 385-7003 to advise the Transfer Agent that an
initial investment will be made by wire and to receive an account number. The
Transfer Agent will request the investor's name and the dollar amount to be
invested and provide an order confirmation number. The investor should then
complete the Fund's Account Application (included with this Prospectus), also
including the date and the order confirmation number on the application. The
completed Account Application should be mailed to the address shown at the top
of the Account Application. The investor's bank should transmit immediately
available funds by wire for purchase of shares, in the investor's name to the
Fund's Custodian, as follows:
Star Bank, N.A. Cinti/Trust
ABA #0420-0001-3
Attn: Leonetti Balanced Fund
DDA #483897963
Account name (shareholder name)
Shareholder account number

For subsequent investments, the investor should first notify the Transfer Agent
and then the investor's bank should wire 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 from the Transfer Agent
about remitting funds in this manner and from their own banks about any fees
that may be imposed.

General. Payment of redemption proceeds may be delayed with respect to 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., 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. 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.

Page 7
<PAGE>
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.
Requests for redemption of fund shares should be mailed to Leonetti Balanced
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 guarantees are not required on
redemptions of amounts under $5,000 sent to the shareholder at the address of
record on the account. Signature guarantees must be made 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
to the address of record 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).
Telephone redemption is not available for IRA accounts.

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 send the proceeds to the address of record on the account or 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 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.

Shareholders may request telephone redemption privileges after an account is
opened; however, the authorization form may require a separate signature
guarantee. Shareholders may experience delays in exercising telephone redemption
privileges during periods of abnormal market activity.

Page 8
<PAGE>
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 $1,000. 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
$1,000 and will be allowed 30 days to make an additional investment to bring the
value of his account to at least $1,000 before the Fund takes any action.

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 Advisor, 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), as if the shareholder had written it himself. 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 Transfer Agent. 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.

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 the 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. 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 60
days or less are valued at amortized cost as reflecting fair value.

Page 9
<PAGE>
DISTRIBUTIONS AND TAXES

Dividends and Distributions. Any dividends from net investment income are
declared and paid at least annually, typically at the end of the Fund's fiscal
year (June 30). Any undistributed net capital gains realized during the 12-month
period ended each October 31, as well as any additional undistributed capital
gains realized during the Fund's fiscal year, will also be distributed to
shareholders on or about December 31 of each year.

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 (apart from any other change in the value of the Fund's shares on
that date.) 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, 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 tax or excise taxes based on net
income. 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.
Additional information about taxes is set forth in the Statement of Additional
Information. Shareholders should consult their own advisers concerning federal,
state and local tax consequences of investments in 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.

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 a
change in the Fund's investment objective); 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.

Page 10
<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 year and over the period from the Fund's inception of
operations, through the most recent calendar quarter. 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
Transfer Agent at (800) 385-7003.

Page 11
<PAGE>
Advisor
Leonetti & Associates, Inc.
1130 Lake Cook Road, Ste. 105
Buffalo Grove, IL 60089
(800) 454-0999

Distributor
First Fund Distributors, Inc.
4455 E. Camelback Rd., Ste. 261E
Phoenix, AZ 85018

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

Transfer Agent
American Data Services, Inc.
24 West Carver Street, 2nd Floor
Huntington, NY 11743
(800) 385-7003

Auditors
Ernst & Young L.L.P.
515 South Flower Street
Los Angeles, CA 90071

Legal Counsel
Heller, Ehrman, White & McAuliffe
333 Bush Street
San Francisco, CA 94104
<PAGE>
LIGHTHOUSE GROWTH FUND
10000 MEMORIAL DRIVE, SUITE 660
HOUSTON, TX 77024
(713) 688-6881
(800) 282-2340

The LIGHTHOUSE GROWTH FUND (the "Fund") is a mutual fund with the
investment objective of seeking growth of capital. The Fund seeks to achieve its
objective by investing primarily in equity securities (common and preferred
stocks). Lighthouse 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. A Statement of Additional Information dated
October 31, 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 written
request to the Fund at the address given above.

TABLE OF CONTENTS

Expense Table.................................................. 2
Financial Highlights........................................... 3
Advisor Investment Returns..................................... 4
Objective and Investment Approach of the Fund; Risk Factors.... 5
Management of the Fund......................................... 7
Distribution Plan.............................................. 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................... 12
Distributions and Taxes........................................ 12
General Information............................................ 13

Prospectus dated October 31, 1996

<PAGE> 2
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.
The Fund has adopted a plan of distribution under which the Fund will pay the
Advisor as Distribution Coordinator a fee at an annual rate of up to 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.

SHAREHOLDER TRANSACTION EXPENSES

<TABLE>
<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)

Advisory Fees.................................................. 1.25%
12b-1 Expenses................................................. 0.25%
Other Expenses................................................. 0.50%**
-----
Total Fund Operating Expenses.................................. 2.00%**
=====
</TABLE>

**The Advisor is currently undertaking to limit the Fund's expense ratio to
2.00% annually. In the absence of this limitation, the Fund's ratio of expenses
to average net assets would have been 2.95% for the fiscal year ended August 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 each time period.

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C>

$20 $63 $108 $233
</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 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 LIGHTHOUSE GROWTH 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 $2,000 with subsequent investments of $100 or more. Shares
will be redeemed at net asset value per share.

2
<PAGE> 3

FINANCIAL HIGHLIGHTS

FOR A CAPITAL SHARE OUTSTANDING THROUGHOUT THE PERIOD

The following information has been audited by Ernst & Young, L.L.P.,
independent accountants, whose unqualified report covering the fiscal period
ended August 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>
September 29, 1995*
through
August 31, 1996
- ---------------------------------------------------------------------------------------------------------------
<S> <C>

Net Asset Value, Beginning of Period.......................................................... $12.00
Income from Investment Operations:
Net investment loss..................................................................... (.09)
Net realized and unrealized gain on investments......................................... 1.72
------
Total from investment operations.............................................................. 1.63
------
Less Distributions:
Dividends (from net investment income).................................................. -0-
Distributions (from capital gains)...................................................... (.06)
------
Total Distributions........................................................................... (.06)
------
Net Asset Value, End of Period................................................................ $13.57
======

Total Return.................................................................................. 13.67%++

Ratios/Supplemental Data:

Net assets, end of period (thousands)......................................................... $13,964

Ratio of expenses to average net assets:
Before expense reimbursement............................................................ 2.95%+
After expense reimbursement............................................................. 2.00%+

Ratio of net investment loss to average net assets:
Before expense reimbursement............................................................ (2.14)%+
After expense reimbursement............................................................. (1.19)%+

Portfolio turnover............................................................................ 20.56%

Average commision rate per share.............................................................. 0.06
</TABLE>

*Commencement of operations.

+Annualized.

++Not annualized.

3
<PAGE> 4
ADVISOR INVESTMENT RETURNS

Set forth in the table below are certain performance data provided by the
Advisor relating to its individually managed Equity accounts. These accounts had
substantially the same investment objective as the Fund and have been managed
using substantially similar investment strategies and techniques as those used
by the Fund. See "Objective and Investment Approach of the Fund" above. The
Portfolio Manager for these accounts is the same individual who manages the
Fund. The results presented are not intended to predict or suggest the return to
be experienced by the Fund or the return an investor might achieve by investing
in the Fund. Results may differ because of, among other things, differences in
brokerage commissions paid, account expenses, including investment advisory
fees, (which expenses and fees may be higher for the Fund than for the
accounts), the size of positions taken in relation to account size,
diversification of securities, timing of purchases and sales, timing of cash
additions and withdrawals, the private character of the composite accounts
compared with the public character of the Fund, and the tax-exempt status of
some of the accounts compared with the Fund and its shareholders. Investors
should be aware that the use of different methods of determining performance
could result in different performance results. Investors should not rely on the
performance data on the following page as an indication of future performance of
the Advisor or the Fund.

<TABLE>
<CAPTION>
Average Annual Total Returns (%)
(for periods ended June 30, 1996)

Lighthouse Capital Standard & Poor's
Equity Accounts 500 Index
------------------ -----------------
<S> <C> <C>

One year +24.30% +25.92%

Three years +27.09% +17.20%

Five years +28.76% +15.69%
</TABLE>

1. Results account for both income and capital appreciation or depreciation
(Total Return). Returns are time-weighted and calculated in compliance with the
Association for Investment Management and Research ("AIMR") performance
presentation standards, reduced for investment advisory fees.

2. Investors should note that the Fund computes and discloses its average
annual compounded rate of return using the standard formula set forth in SEC
rules, which differs in certain respects from returns calculated under the AIMR
standards noted above. Unlike the AIMR performance presentation standards that
link quarterly rates of return, the SEC total return calculation method calls
for computation and disclosure of an average annual compounded rate of return
for one, five and ten year periods or shorter periods from inception. The
calculation provides a rate of return that equates a hypothetical initial
investment of $1,000 to an ending redeemable value. While the returns shown for
the Advisor are net of advisory fees, the SEC calculation formula requires that
returns be shown for the Portfolios net of advisory fees as well as any maximum
applicable sales charges and all other Portfolio operating expenses. See
"Performance Information" at page 13.

4. The Lighthouse Capital Equity Account Composite shown includes all
accounts managed by the Advisor that meet the criteria for inclusion in the
composite for each period presented.

5. The Standard & Poor's 500 Index is an unmanaged index composed of 500
industrial, utility, transportation and financial companies of the U.S. markets.
The index represents about 75% of New York Stock Exchange ("NYSE") market
capitalization and 30% of NYSE issues. It is a capitalization-weighted index
calculated on a total return basis with dividends reinvested.

4
<PAGE> 5
OBJECTIVE AND INVESTMENT APPROACH OF THE FUND; RISK FACTORS

The investment objective of the Fund is to seek growth of capital. The Fund
seeks to achieve its objective by investing primarily in equity securities.
Equity securities in which the Fund invests include common stocks and securities
having the characteristics of common stocks, such as convertible preferred
stocks, convertible debt securities and warrants. There is, of course, no
assurance that the Fund's objective will be achieved.

Because prices of securities held by the Fund fluctuate, the value of an
investment in the Fund will vary, as the market value of its investment
portfolio changes and when shares are redeemed, they may be worth more or less
than their original cost. 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.

INVESTMENT APPROACH. The Advisor uses a contrarian strategy to seek what it
believes to be the best investments. Since stocks do not become bargains when
they are popular, the Advisor tends to look for sound, undervalued companies in
out-of-favor industries. The Advisor seeks companies that are technologically
aggressive, fiscally conservative and globally competitive. Companies seeking
government protection from what they believe to be "unfair competition" are
avoided.

The Advisor uses a long-term approach to valuation. It is the Advisor's
view that most investors are infatuated with short-term earnings. As a result,
companies with margins that are temporarily low are often discarded. The Advisor
seeks companies that are not afraid to forego short-term profits in order to
invest in research, marketing and service -- all areas which should lead to
higher earnings in the future. Conversely, the Advisor avoids companies that
neglect these areas because it appears likely that long-term profitability of
such companies will suffer.

Although equity securities are the primary focus for the Fund, the Advisor
may also purchase fixed income securities where it believes that such securities
offer the potential for capital growth. The Fund is permitted to hold up to 25%
of its net assets in fixed-income securities, but it is not expected that under
normal circumstances more than 10% of the Fund's portfolio would be invested in
such securities. Fixed-income securities eligible for purchase by the Fund
include those rated investment grade, i.e., rated BBB or better by Standard &
Poor's Corporation ("S&P"), Duff & Phelps Credit Rating Co. ("Duff"), or Fitch
Investors Service, Inc. ("Fitch"), or Baa or better by Moody's Investors Service
("Moody's"). Securities rated BBB by S&P, Duff, and Fitch or Baa by Moody's are
investment grade, but Moody's 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.

Within the overall limit on investment in fixed-income securities, the Fund
also may invest in corporate debt securities that are rated below investment
grade or which are unrated. Such securities typically carry higher coupon rates
than investment grade securities but also are described as speculative by both
Moody's and S&P and may be 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 or unrated fixed income
securities also are likely to be more sensitive to adverse economic or company
developments. 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. 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.

5
<PAGE> 6
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 deposit in a segregated account 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) 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.

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 dividends or
interest the Fund may be required to pay in connection with the 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 assets 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.

SMALLER COMPANIES. Some of the companies held by the Fund may be smaller
and younger than companies whose shares trade 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 such developments could have a
positive or negative impact on their shares. Some of these companies may be
thinly traded. From time to time, the Fund and other client accounts of the
Advisor, on a collective basis, may hold a significant amount of such companies'
outstanding shares or trading volume. During such times, the Fund's ability to
dispose of such securities without affecting market price could be limited. The
Fund will monitor the level of investment in such securities to determine
whether they may be considered illiquid and subject to the Fund's limitation
that no more than 15% of its total assets may in invested in restricted or
illiquid securities.

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

6
<PAGE> 7
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 (other than the
custodian bank) and securities dealers with whom the Fund engages in repurchase
transactions.

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 approximately 25%. 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.

OTHER PERMITTED INVESTMENTS AND RISKS. The Fund is authorized to invest in
foreign securities, engage in options transactions on equity securities and
indexes, to borrow money and to lend portfolio securities. However, the Fund may
not engage in any of such activities to an extent greater than 5% of its net
assets. For more information on such securities and practices and the risks
associated with them, see the Fund's Statement of Additional Information.

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. The Advisor is located at
10000 Memorial Drive, Suite 660, Houston, TX 77024. The Advisor was founded in
1988 and is controlled by Mr. Paul G. Horton, President and Managing Director
and Mr. Kevin P. Duffy, Research Director and Portfolio Manager. The Advisor
provides investment advisory services to individual and institutional investors
with assets of approximately $250 million. Mr. Duffy is responsible for
management of the Fund's portfolio.

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 1.25% annually. This fee is higher than that paid by most investment
companies.

Investment Company Administration Corporation (the "Administrator") acts as
the Fund's Administrator under an Administration Agreement. Under that
agreement, the Administrative Manager 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 Administrative Manager receives a monthly fee at the annual rate
specified on the following page.

7
<PAGE> 8
<TABLE>
<CAPTION>
Average net assets of the Fund Fee or fee rate
- ---------------------------------------------------------------
<S> <C>
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
</TABLE>

The Fund is responsible for its own operating expenses. The Advisor is
currently undertaking to limit the Fund's expense ratio to 2.00% annually. Any
reductions made by the Advisor in its fees or payments or reimbursements of
expenses which are the Fund's obligation may be subject to reimbursement by the
Fund.

DISTRIBUTION PLAN

The Fund has adopted a distribution plan pursuant to Rule 12b-1 under the
Investment Company Act. The Plan provides that the Fund may pay for 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.

The Advisor, out of its own funds, also may compensate broker-dealers who
have signed dealer agreements for the distribution of the Fund's shares as well
as other service providers who provide shareholder and administrative services.

8
<PAGE> 9
HOW TO INVEST IN THE FUND

The minimum initial investment is $2,000. Subsequent investments must be at
least $100. 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. 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 objective and it is otherwise
acceptable to the Fund's Advisor.

Shares of the Fund are offered continuously for purchase at their net asset
value per share next determined after a purchase order is received. The public
offering price is effective for orders received by the Fund prior to the time of
the next determination of the Fund's net asset value. Orders received after the
time of the next determination of the Fund's net asset value will be entered at
the next calculated public offering price. Investors may be charged a fee if
they effect a transaction in fund shares through a broker or agent. Such brokers
or agents may also impose different minimum transaction amounts.

INVESTORS MAY PURCHASE SHARES OF THE FUND BY CHECK OR 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 "Lighthouse Growth Fund," should be mailed to
the Fund's Transfer Agent: Lighthouse Growth Fund, P.O. Box 856, Cincinnati, OH
45264-0856. A purchase order sent by overnight mail should be sent to Lighthouse
Growth Fund, 425 Walnut Street, M.L. 6118, Cincinnati, OH 45202.

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 "Lighthouse Growth 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) 282-2340 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: Star Bank, N.A. Cinti/Trust, ABA #0420-0001-3, Attn: Lighthouse
Growth Fund, DDA #483897971, for credit to Lighthouse Growth 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 subsequent investments, an investor should call the Transfer Agent at
(800) 282-2340 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 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 from the Transfer Agent
about remitting funds in this manner and from their own banks about any fees
that may be imposed.

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

9
<PAGE> 10
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.

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 redemptions. See the Fund's
Account Application for further information concerning this requirement.

HOW TO REDEEM AN INVESTMENT IN THE FUND

Shareholders have the right to redeem all or any portion of their
outstanding shares at the 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.

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) 282-2340 between the hours of 9:00 a.m. and 4:00 p.m. Eastern time.
Redemption proceeds will be mailed to the address of record 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 send the proceeds to the address of record on the account or 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. As long as these identification procedures are followed, neither
the Fund nor its agents will 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.

10
<PAGE> 11
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 privileges
during periods of abnormal market activity.

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 $2,000. 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
$2,000 and will be allowed 30 days to make an additional investment to bring the
value of the account to at least $2,000 before the Fund takes any action.

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.

AUTOMATIC INVESTMENT 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 himself.
Upon receipt of the withdrawn funds, the Fund automatically invests the money in
additional shares of the Fund at the current offering price. Purchases are made
at Net Asset Value at the close of regular trading on the New York Stock
Exchange (the "Exchange") (currently 4:00 P.M. Eastern time) on or about the
20th day of the month. 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.

AUTOMATIC WITHDRAWALS. As another convenience, the Fund offers an Automatic
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 an Automatic Withdrawal Program, and the minimum amount that may
be withdrawn each month or quarter under the Automatic Withdrawal Program is
$100. Redemptions are made at net asset value as of the close of regular trading
on the Exchange on the 25th day of each month (or the next business day). This
Program may be terminated or modified by a shareholder or the Fund at any time
without charge or penalty.

11
<PAGE> 12
A withdrawal under the Automatic 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 Exchange (currently 4:00 p.m. Eastern time) on
each day the 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.

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 (August 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 for the calendar year as well as any additional
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 distributions 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, 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. 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. Additional
information about taxes is set forth in the Statement of Additional Information.
Shareholders should consult their own advisers concerning federal, state and
local tax consequences of investments in the Fund.

12
<PAGE> 13
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.

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 a change in the Fund's investment objective); 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, through the most recent calendar quarter. 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.

CUSTODIAN AND TRANSFER AGENT; SHAREHOLDER INQUIRIES. Star Bank, 425 Walnut
St., Cincinnati, OH 45202, serves as custodian of the Fund's assets. American
Data Services, 24 West Carver Street, 2nd Floor, Huntington, NY 11743 is the
Fund's Transfer Agent. Shareholder inquiries should be directed to the Transfer
Agent at (800) 282-2340.

13
<PAGE> 14

[LOGO]
LIGHTHOUSE GROWTH FUND

Advisor
LIGHTHOUSE CAPITAL MANAGEMENT, INC.
10000 Memorial Drive, Suite 660
Houston, Texas 77024
(713) 688-6881
Account Inquiries (800) 282-2340

Distributor
FIRST FUND DISTRIBUTORS, INC.
4455 East Camelback Road, Suite 261E
Phoenix, Arizona 85018

Custodian
STAR BANK, N.A.
425 Walnut Street
Cincinnati, Ohio 45202

Transfer Agent
AMERICAN DATA SERVICES, INC.
24 West Carver Street, 2nd Floor
Huntington, NY 11743

Auditors
ERNST & YOUNG, L.L.P.
515 South Flower Street
Los Angeles, California 90071

Legal Counsel
HELLER, EHRMAN, WHITE & McAULIFFE
333 Bush Street
San Francisco, California 94104

<PAGE>
U.S. GLOBAL LEADERS GROWTH FUND
================================================================================
PROSPECTUS

- --------------------------------------------------------------------------------
OCTOBER 31, 1996
- --------------------------------------------------------------------------------

TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Expense Table 2
Financial Highlights 4
Objective and Investment Approach of the Fund 5
Management of the Fund 8
How To Invest in the Fund 9
How To Redeem an Investment in the Fund 11
Services Available to the Fund's Shareholders 13
How the Fund's Per Share Value Is Determined 13
Distributions and Taxes 14
General Information 15
<PAGE>
U.S. GLOBAL LEADERS GROWTH FUND
P.O. Box 856
Cincinnati, Ohio 45264-0856
(800) 282-2340
U.S. GLOBAL LEADERS GROWTH FUND (the "Fund") is a mutual fund with the
investment objective of seeking growth of capital. The Fund seeks to achieve its
objective by investing primarily in common stocks of United States companies
that have substantial international activities ("U.S. Global Leaders"). The Fund
does not have a policy of investment in any specific number of countries outside
the U.S., although it may invest in securities of foreign companies that meet
the Advisor's criteria of global leadership. Yeager, Wood & Marshall
Incorporated (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. A Statement of Additional Information dated
October 31, 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 written
request to the Fund at the address given above.

SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF OR GUARANTEED OR
ENDORSED BY ANY BANK. SHARES OF THE FUND ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION ("FDIC"), FEDERAL RESERVE BOARD OR ANY OTHER AGENCY 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.

Page 1

<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.

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)

- ------------------------------------------------------------------------------------------------------------------------------------
Advisory Fees 1.00%

- ------------------------------------------------------------------------------------------------------------------------------------
Other Expenses (after waiver) 0.48%*

- ------------------------------------------------------------------------------------------------------------------------------------
Total Fund Operating Expenses (after waiver) 1.48%*

<FN>

*The Advisor has agreed to reduce its fees or make payments to assure that the
Fund's ratio of operating expenses to average net assets will not exceed 1.48%.
In the absence of this limitation, the Fund's ratio of expenses to average net
assets would have been 2.55% for the fiscal year ended June 30, 1996.
</FN>
</TABLE>

Page 2
<PAGE>
EXAMPLE
- --------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
One year $ 15

- ------------------------------------------------------------------------------------------------------------------------------------
Three years $ 47

- ------------------------------------------------------------------------------------------------------------------------------------
Five years $ 81

- ------------------------------------------------------------------------------------------------------------------------------------
Ten years $ 177

</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. Amounts in the table could
increase if the Advisor's limitation of expenses were to be terminated. See
"Management of the Fund."

U.S. GLOBAL LEADERS GROWTH 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. See
"Non-Diversification" on page 7. Shares of the Fund may be purchased at their
net asset value per share. The minimum initial investment is $2,500 with
subsequent investments of $1,000 or more. Shares will be redeemed at net asset
value per share.

Page 3
<PAGE>

FINANCIAL HIGHLIGHTS
For a share outstanding
throughout the period.

October 1, 1995*
through
June 30, 1996

<S> <C>
Net asset value, beginning of period ................... $10.00
------
Income from investment operations:
Net investment income ............................... 0.01
Net realized and unrealized gain on investments ..... 2.08
----
Total from investment operations........................ 2.09
----
Less distributions:
Dividends from net investment income................. (0.01)
-----
Net asset value, end of period ......................... $12.08
======
Total return ........................................... 20.83%++
Ratios/supplemental data:
Net assets, end of period (000's)....................... $9,022
Ratio of expenses to average net assets:
Before expense reimbursement ........................ 2.55%+
After expense reimbursement.......................... 1.48%+
Ratio of net investment loss to average net assets:
Before expense reimbursement ........................ (1.08)%+
After expense reimbursement ......................... (0.01)%+
Portfolio turnover rate ................................ 4.91%
Average commission rate paid per share.................. $ 0.07

<FN>
*Commencement of operations.

+Annualized.

++Not Annualized.
</FN>
</TABLE>

Page 4
<PAGE>
OBJECTIVE AND INVESTMENT APPROACH
OF THE FUND
The investment objective of the Fund is to seek growth of capital. The Fund
seeks to achieve its objective by investing primarily in common stocks of United
States companies that have substantial international activities ("U.S. Global
Leaders"). Under normal market conditions, at least 65% of the Fund's total
assets will be invested in stocks of companies the Advisor regards as U.S.
Global Leaders as set forth below. Unlike most mutual funds that are classified
as "global" funds, the Fund does not have a policy of investment in any specific
number of countries outside the U.S., although it may invest in securities of
foreign companies that meet the Advisor's criteria of global leadership. There
is, of course, no assurance that the Fund's objective will be achieved. The Fund
is not designed for investors seeking income rather than growth of capital.

INVESTMENT APPROACH: U.S. GLOBAL LEADERS

In selecting common stocks for the Fund, the Advisor focuses on companies it
views as "U.S. Global Leaders": Companies that have leading positions in growing
markets in the developed countries and also derive a substantial portion of
their profits in fast-growing emerging markets. Under normal market conditions,
the Fund will invest at least 65% of the value of its total assets in securities
of such companies.

U.S. Global Leaders portfolio companies typically:

-Hold leading market shares of their relevant growth markets, and hence possess
the pricing flexibility that results in high profit margins and high investment
returns.

-Supply consumable products or services so that their revenue streams are
recurring rather than derived from infrequent or postponable sales of big-ticket
items.

-Maintain strong balance sheets with relatively low debt to equity ratios.

The Advisor believes that companies with these characteristics should have
relatively low business risk and relatively high sustainability of earnings
growth.

Page 5
<PAGE>
The Advisor believes that leading multinational companies traded publicly
in U.S. securities markets have a number of advantages that make them attractive
investments. U.S. capital markets are large and liquid. Accounting practices are
consistent and well regulated. Currency and political risks are minimized, and
the costs associated with investing abroad are reduced.

Companies that have leading positions in growing markets in the U.S. and other
developed countries and also derive a significant portion of their profits in
fast-growing emerging markets are relatively limited in number at this time.
Because of the difficulty and expense in building broad-based distribution in
newer global markets, it appears likely that the number of such companies will
not expand rapidly. Thus, the Advisor's view is that the stocks of multinational
companies that can sustain superior global earnings growth are likely to be
accorded premium relative valuations.

The Advisor's investment policy is to identify U.S. Global Leaders companies
with superior long-term earnings prospects and to continue to own them as long
as their managements are fulfilling their mission. As long as the Advisor
believes that shares of such companies continue to enjoy favorable prospects for
capital growth and that they are not overvalued in the marketplace, such shares
are ordinarily retained. Thus it is expected that the Fund's annual rate of
portfolio turnover will be relatively low compared to that of most common stock
mutual funds, normally not more than 25%.

FOREIGN INVESTMENTS

There are foreign companies that fit the profile of Global Leaders companies
developed by the Advisor, and the Advisor may invest in such companies. While
the Advisor is permitted to invest up to 25% of the Fund's net assets in foreign
companies, under normal circumstances, the level of such investment is not
expected to exceed 15%. Investment in foreign companies generally will be in the
form of American Depository Receipts ("ADRs"). These 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. securities markets, and ADRs are
alternatives to the purchase of the underlying securities in their national
market and currencies.

The Advisor intends to limit its investment in foreign companies to large
capitalization, well-established issuers, the securities of which are publicly
traded in the U.S and which provide their financial data in accordance with
generally accepted accounting principles in the United States. Thus the Advisor
expects to minimize the risks associated with investing in foreign

Page 6
<PAGE>
companies generally. For further information on foreign investing, including the
risks associated with such investments, see the Statement of Additional
Information.

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 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 a number of different companies and a variety of industries.

OTHER PERMITTED INVESTMENTS AND RISKS

Under normal market conditions, it is expected that the Fund will be
substantially fully invested, and cash and cash equivalent investment should
account for less than 5% of Fund assets. However, if the Advisor believes market
conditions to warrant a temporary defensive position, the Fund may invest
without limit in cash, certificates of deposit, bankers acceptances and other
short-term bank deposit accounts, short-term U.S. Government, agency and
instrumentality obligations, repurchase agreements with respect to such
obligations and in other domestic debt rated in one of the two highest grades by
one or more of the nationally recognized statistical ratings organizations, or
if unrated, believed by the Advisor to be of comparable quality.

Page 7
<PAGE>
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 Advisor is located at 630
Fifth Avenue, New York, NY 10111. The Advisor was founded in 1968 and is
controlled by George M. Yeager, President. Mr. Yeager is responsible for the
management of the Fund's portfolio. The Advisor provides investment advisory
services to individual and institutional investors with assets in excess of
$250,000,000.

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. This fee is higher than that paid by most investment
companies.

Investment Company Administration Corporation (the "Administrator") acts as the
Fund's Administrator under an Administration 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;
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: 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 limit the Fund's operating expenses to assure that the Fund's ratio of
operating expenses to average net assets will not exceed the limit imposed by
the most restrictive applicable state regulation, currently 2.50% In addition to
this limitation, the Advisor 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. The Advisor is currently undertaking to limit the
Fund's annual operating expenses to no more than 1.48% 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 may be subject to reimbursement by
the Fund.

Page 8
<PAGE>
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.

The Advisor may in its discretion and out of its own funds compensate third
parties for the sale and marketing of shares of the Fund for services provided
to Fund shareholders.

HOW TO INVEST IN THE FUND

The minimum initial investment is $2,500. Subsequent investments must be at
least $1,000. First Fund Distributors, Inc. (the "Distributor"), acts as
Distributor of the Fund's shares. Shares of the Fund may be purchased without
regard to these minimums by employees, officers and Trustees of the Trust, the
Advisor or firms providing contractual services to the Fund, and members of
their immediate families and by retirement plans and trusts for their benefit.
The Distributor may, at its discretion, waive the minimum investment
requirements for charitable organizations, employee benefit plans, clients of
the Advisor, and others with whom the Advisor has an established business
relationship. Brokers or other financial institutions may charge a fee to their
customers who purchase shares of the Fund through them as intermediaries. 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 security is readily marketable, its acquisition is consistent with the
Fund's investment objective and it is otherwise acceptable to the Fund's
Advisor.

Shares of the Fund are offered continuously for purchase at their net asset
value per share next determined after a purchase order is received. The public
offering price is effective for orders received by the Fund prior to the time of
the next determination of the Fund's net asset value. 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.

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

BY CHECK: For initial investments, an investor should complete the Fund's
Account Application (included with this Prospectus). The com-

Page 9
<PAGE>
pleted application, together with a check payable to "U.S. Global Leaders
Growth Fund," should be mailed to: U.S. Global Leaders Growth Fund, P.O. Box
856, Cincinnati, OH 45264-0856. Investments sent by overnight delivery services
should be sent to: U.S. Global Leaders Growth Fund, c/o Star Bank, N.A., 425
Walnut Street, M.L. 6118, Cincinnati, OH 45202

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 "U. S. Global Leaders Growth
Fund," mailed in the envelope provided to 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 Fund's Transfer Agent at (800) 282-2340 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 : Star Bank, N.A. Cinti/Trust, ABA #0420-0001-3, DDA # 483898029,
U.S. Global Leaders Growth Fund, [Account name and 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 subsequent investments, the investor should first notify the Fund and then
have the investor's financial institution 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 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.

GENERAL. Payment of redemption proceeds from shares that were 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

Page 10
<PAGE>
for investment does not clear. The Fund and the Distributor reserve the
right to reject any purchase order in whole or in part.

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

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. Additional documentation
may be required from corporate, trust, or partnership shareholders. 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.

Page 11
<PAGE>
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) 282-2340 before 4:00 p.m. Eastern time. Redemption proceeds will be mailed
to the address of record 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).

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.

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.

Page 12
<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 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 $1,000. 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
$1,000 and will be allowed 30 days to make an additional investment to bring the
value of his account to at least $1,000 before the Fund takes any action.

SERVICES AVAILABLE TO THE FUND'S SHAREHOLDERS

AUTOMATIC INVESTMENT 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 withdrawn funds, the Fund automatically invests the money in
additional shares of the Fund at the current offering price as of the close of
regular trading on the New York Stock Exchange. 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.

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.

Page 13
<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.

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 (June
30). 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 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.

Page 14
<PAGE>
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 tax consequences of investments in
the Fund.

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., any change in
the Fund's investment objective); 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.

Page 15
<PAGE>
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.

CUSTODIAN AND TRANSFER AGENT;
SHAREHOLDER INQUIRIES.
Star Bank, N.A., 425 Walnut Street, Cincinnati, OH 45202, serves as custodian of
the Fund's assets. American Data Services, Inc., 24 West Carver Street, 2nd
Floor, Huntington, NY 11743 is the Fund's Transfer and Dividend Disbursing
Agent. Shareholder inquiries should be directed to the Transfer Agent at (800)
282-2340.

Page 16
<PAGE>
ADVISOR

Yeager, Wood & Marshall, Incorporated
630 Fifth Avenue
New York, New York 10111
(212) 765-5350

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 AND
DIVIDEND
DISBURSING AGENT

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

AUDITORS

Ernst & Young, L.L.P.
515 South Flower Street
Los Angeles, California 90071

LEGAL COUNSEL

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

U.S. GLOBAL LEADERS GROWTH FUND

P.O. Box 856
Cincinnati, Ohio 45264-0856
(800) 282-2340
<PAGE>

STATEMENT OF ADDITIONAL INFORMATION

October 31, 1996

BOSTON MANAGED GROWTH FUND
a series of
PROFESSIONALLY MANAGED PORTFOLIOS
40 Court St.
Boston, MA 02108
(617) 726-7250

This Statement of Additional Information is not a prospectus. It should
be read in conjunction with the prospectus of the Boston Managed Growth Fund. A
copy of the prospectus dated October 31, 1996 is available by calling the number
listed above or (212) 633-9700.

TABLE OF CONTENTS

Page

The Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-2
Investment Objective and Policies . . . . . . . . . . . . . . . . . . . B-2
Investment Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . B-6
Distributions and Tax Information . . . . . . . . . . . . . . . . . . . . B-8
Management . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . B-11
Execution of Portfolio Transactions . . . . . . .. . . . . . . . . . . B-14
Additional Purchase and Redemption Information .. . . . . . . . . . . . B-16
Determination of Share Price . . . . . . . . . . . . . . . . . . . . . . B-17
Performance Information . . . . . . . . . . . . . . . . . . . . . . . . . B-17
General Information . . . . . . . . . . . . . . .. . . . . . . . . . . . . B-18
Finanial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . B-19
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-20

B-1

<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 a number of series which represent separate investment
portfolios. This Statement of Additional Information relates only to the Boston
Managed Growth Fund series (the "Fund").

INVESTMENT OBJECTIVE AND POLICIES

The Fund is a mutual fund with the investment objective of seeking
income and long-term capital growth through an actively managed portfolio of
stocks, bonds and money market instruments. 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 U.S. Government security to
the Fund agrees to repurchase it at a mutually agreed 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 underlying U.S. Government security itself. Such repurchase
agreements will be made only with banks with deposits 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 5% 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 the repurchase agreement. It is not clear,
however, 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

B-2

<PAGE>

creditor, the Fund would be at 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 at the time
the transaction is entered into 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 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 cash and marketable securities 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

The Fund may invest up to 15% of its assets 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,

B-3

<PAGE>

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 securities trading practices, including those
involving the release of assets in advance of payment, may involve 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 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 can be no assurance that the Advisor will be able
to anticipate or counter these potential events and their impacts on the Fund's
share price.

Securities of foreign issuers may be held by the Fund in the form of
American Depositary Receipts and European Depositary Receipts ("ADRs" and
"EDRs"). These 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.

The Fund may invest without regard to the 15% limitation in securities
of foreign issuers which are listed and traded on a domestic national securities
exchange.

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 the Fund 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

B-4

<PAGE>

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 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 smaller 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 smaller and less actively traded market.

Lower-rated debt obligations also present risks based on payment
expectations. If an issuer calls the obligation for redemption, the Fund may
have to replace the security with a lower-yielding security, resulting in a
decreased return to investors. Also, because 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 the Fund may decline proportionately
more than the Fund consisting of higher-rated securities. If the 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 Contracts

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

B-5

<PAGE>

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.

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 cash, U.S. Government securities, or
other high grade debt obligations (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

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. 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-6

<PAGE>

2. (a) Borrow money, except from banks for temporary or emergency purposes.
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.

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

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.)

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, forward 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.

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

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 a single issuer.

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

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.

B-7

<PAGE>

11. Invest, in the aggregate, more than 5% 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.

12. Invest more than 15% of its assets in securities of foreign issuers
(including American Depositary Receipts with respect to foreign issuers, but
excluding securities of foreign issuers listed and traded on a domestic national
securities exchange).

13. Invest in securities issued by UST Corp. (parent corporation of the
Advisor).
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 net profits
from the sale of securities, if any, are generally made annually by the Fund
after the conclusion of its fiscal year. 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 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

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<PAGE>

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.

The Fund may write, purchase or sell certain option, futures, and
foreign currency 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 option, futures and foreign currency 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.

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<PAGE>

Section 988 of the Code contains special tax rules applicable to
certain foreign currency transactions that may affect the amount, timing, and
character of income, gain or loss recognized by the Fund. Under these rules,
foreign exchange gain or loss realized with respect to foreign
currency-denominated debt instruments, foreign currency forward contracts,
foreign currency-denominated payables and receivables and foreign currency
options and futures contracts (other than options, futures, and foreign currency
contracts that are governed by the mark-to-market and 60%-40% rules of Section
1256 of the Code and for which no election is made) is treated as ordinary
income or loss.

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 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.

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

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<PAGE>

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
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 and Chairman

40 Maple Lane, Copake, NY 12516. 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.

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<PAGE>

Carl A. Froebel, 57 Trustee

333 Technology Dr., Malvern, PA 19355. Managing Director, Premier
Solutions, Ltd. Formerly 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, 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. Formerly Vice President, Huntington
Advisors, Inc. (investment advisors) 1988-90.

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), and Legal
Product Manager, Mitchell Hutchins Asset Management (1988-91).

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 total amount
is allocated among the portfolios. Disinterested trustees receive an annual
retainer of $7,500 and a fee of $2,500 for each regularly scheduled meeting.
These trustees also receive a fee of $1,000 for any special meeting attended.
The Chairman of the Board of Trustees receives an additional annual retainer of
$4,500. The disinterested trustees are also reimbursed for expenses in
connection with each Board meeting attended. No other compensation or retirement
benefits are received by any Trustee or officer from the Fund or any other
portfolios of the Trust. During the Fund's initial fiscal period ended June 30,
1996, trustees fees and expenses of $1,751 were allocated to the Fund.

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<PAGE>
Name of Trustee Total Compensation

Dorothy A. Berry $22,000
Wallace L. Cook $17,500
Carl A. Froebel $17,500
Rowley W. P. Redington $17,500

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

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 0.75%
annually. During the Fund's initial fiscal period ended June 30, 1996, the
Advisor received advisory fees of $241,607.

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

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<PAGE>

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.

Administrator

The Fund has entered into an Administration Agreement with Investment
Company Administration Corporation ("ICAC"), a corporation owned in part 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. For its services, ICAC receives an annual fee equal to the greater of
0.10% of the Fund's average daily net assets or $30,000. During the Fund's
initial fiscal period ended June 30, 1996 the Administrator received fees of
$32,214

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 are eligible 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.

Purchases of portfolio securities for the Fund also may be made directly
from issuers or from
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<PAGE>

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 dealer or underwriter are comparable, the order may be allocated to a
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 services needed to
obtain 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 is subject to rules adopted by the National Association of
Securities Dealers, Inc.

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
Advisor, even if the specific services are not directly useful to the Fund and
may be useful to the Advisor 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 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.

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<PAGE>

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
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
ended June 30, 1996 brokerage commissions totalled $19,693.

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.

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<PAGE>

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.

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.

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.

`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

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

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<PAGE>

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 and gives effect to the maximum applicable sales charge. For the
Fund's initial fiscal period ended June 30, 1996 the Fund's average annual total
return was 10.59%. Its aggregate total return for the period was 8.75%.

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.

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

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 and as the Fund's
transfer agent. The Custodian does not participate in decisions relating to the
purchase and sale of securities by the Fund.

Ernst & Young, LLP, 515 S. Flower St., Los Angeles, CA 90071 are the
independent auditors for the Fund.

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<PAGE>

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

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

The annual report to shareholders for the Fund for the fiscal period
ended June 30, 1996 is a separate document supplied with this Statement of
Additional Information and the financial statements, acompanying notes and
report of independent acocuntants appearing therein are incorporated by
reference in this Statement of Additional Information.

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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 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.

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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.

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: 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.

B-21

<PAGE>

STATEMENT OF ADDITIONAL INFORMATION

October 31, 1996

LEONETTI BALANCED FUND
a series of
PROFESSIONALLY MANAGED PORTFOLIOS
1130 Lake Cook Road. Ste. 105
Buffalo Grove, IL 60089
(708) 520-0999

This Statement of Additional Information is not a prospectus and it
should be read in conjunction with the prospectus of the Leonetti Balanced Fund
(the "Fund"). A copy of the prospectus of the Fund dated October, 31, 1996 is
available by calling the number above or (212) 633-9700.

TABLE OF CONTENTS

Page

The Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-2
Investment Objective and Policies . . . . . . . . . . . . . . . . . . B-2
Investment Restrictions . . . . . . . . . . . . . . . . . . . . . . . B-3
Distributions and Tax Information . . . . . . . . . . . . . . . . . . B-5
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-7
The Fund's Investment Advisor . . . . . . . . . . . . . . . . . . . . B-9
The Fund's Administrator. . . . . . . . . . . . . . . . . . . . . . . B-9
The Fund's Distributor. . . . . . . . . . . . . . . . . . . . . . . . B-10
Additional Purchase and Redemption Information . . . . . . . . . . . B-12
Determination of Share Price . . . . . . . . . . . . . . . . . . . . B-14
General Information . . . . . . . . . . . . . . . . . . . . . . . . . B-15
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . B-16

<PAGE>

THE TRUST

This Statement of Additional Information relates only to the Leonetti Balanced
Fund series (the "Fund").

INVESTMENT OBJECTIVE AND POLICIES

The Leonetti Balanced Fund (the "Fund") is a mutual fund with the
investment objective of seeking total return through a combination of income and
capital growth, consistent with preservation of capital. 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 has reserved the right to enter into repurchase agreements,
although it has no present intention to do so. The Fund might enter into such
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 transaction. 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 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.

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.

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. 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 from banks for temporary or emergency
purposes. 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.

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. 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).

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.

7. 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:

8. 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.

9. 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 (other than securities that meet the requirements of Securities Act
Rule 144A which the Trustees have determined to be liquid based on applicable
trading markets).

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 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 (June 30). 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"). 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 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.

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.

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 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 31 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 each of the Funds. The Trustees, in turn, elect the
officers of the Trust, who are responsible for administering the day-to-day
operations of the Trust and the Funds. 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); Executive Vice President of
Investment Company Administration Corporation ("ICAC" mutual fund administration
and the Fund's Administrator); Vice President of First Fund Distributors, Inc.
("FFD"), (registered broker-dealer).

Dorothy A. Berry, 52 Trustee and Chairman

40 Maple Lane, Copake, New York 12516. 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 19355. Managing Director, Premier Solutions,
Ltd; formerly 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 91740. 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), and Legal Product
Manager, Mitchell Hutchins Asset Management (1988-91).

Robert H. Wadsworth*, 56 Vice President

4455 E. Camelback Road, Suite 261E, Phoenix, Arizona 85018. President of Robert
H. Wadsworth & Associates, Inc., 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 receive an annual
retainer of $7,500 and a fee of $2,500 for each regularly scheduled meeting.
These trustees also receive a fee of $1,000 for any special meeting attended.
The Chairman of the Board of Trustees receives an additional annual retainer of
$4,500. The disinterested trustees are also reimbursed for expenses in
connection with each Board meeting attended. No other compensation or
retirement benefits are received by any Trustee or officer from the Fund or any
other portfolios of the Trust. During the Fund's initial fiscal period ended
June 30, 1996, trustees fees and expenses of $2,754 were allocated to the Fund.

Name of Trustee Total Compensation

Dorothy A. Berry $22,000
Wallace L. Cook $17,500
Carl A. Froebel $17,500
Rowley W. P. Redington $17,500

THE FUND'S INVESTMENT ADVISOR

As stated in the Prospectus, investment advisory services are provided
to the Fund by Leonetti & Associates, Inc., the Advisor, pursuant to an
Investment Advisory Agreement. The Advisor is controlled by Mr. Michael
Leonetti. 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. Under the Investment Advisory Agreement, the
Adviser receives monthly a fee at the annual rate of 1.00% of the Fund's average
daily net assets. During the Fund's initial fiscal period ended June 30, 1996,
the Adviser received fees of $83,530 under the Agreement.

The use of the name "Leonetti" 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 "Leonetti."

THE FUND'S ADMINISTRATOR

The Fund has entered into an Administration Agreement with Investment
Company Administration Corporation (the "ICAC"), a corporation owned in part 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. 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 $50 million 0.20% of average net assets
$50 to $100 million 0.15% of average net assets
$100 million to $150 million 0.10% of average net assets
Over $150 million 0.05% of average net assets

During the Fund's initial fiscal period ended June 30, 1996, the Administrator
received fees of $27,534.

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.

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 are eligible 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.

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 dealer or underwriter are comparable, the order
may be allocated to a 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 services needed to
obtain 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.

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
Advisor, even if the specific services are not directly useful to the Fund and
may be useful to the Advisor 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 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 ended June 30, 1996, the Fund paid brokerage commissions of
$26,457.

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 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

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

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 year and the period from the
Fund's inception of operations through the most recent calendar quarter. 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 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
August 1, 1995 through September 30, 1996 were 20.20% and 7.29% 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.

GENERAL INFORMATION

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

Ernst & Young, LLP, 515 S. Flower St., 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.

On October 7, 1996, the following persons owned of record more that 5%
of the Fund's outstanding voting securities:

Star Bank, NA, Custodian for Frank G. Valeria IRA Account, Niles, IL,
60714; 14.06%

Charles Schwab & Co., Special Custody Account, San Francisco, CA 94104;
13.67%

Aetna Screw Products Co., Retirement Plan #1, Niles, IL, 60714; 5.93%

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 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 period
ended June 30, 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.

<PAGE>

STATEMENT OF ADDITIONAL INFORMATION

October 31, 1996

LIGHTHOUSE GROWTH FUND
a series of
PROFESSIONALLY MANAGED PORTFOLIOS
10000 Memorial Drive, Suite 660
Houston, TX 77024
(713) 688-6881

This Statement of Additional Information is not a prospectus and it should be
read in conjunction with the prospectus of the Lighthouse Growth Fund (the
"Fund"). A copy of the prospectus of the Fund dated October 31, 1996 is
available by calling the number listed above or (212) 633-9700.

TABLE OF CONTENTS

Page

The Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-2
Investment Objective and Policies . . . . . . . . . . . . . . . . . . B-2
Investment Restrictions . . . . . . . . . . . . . . . . . . . . . . . B-6
Distributions and Tax Information . . . . . . . . . . . . . . . . . . B-7
Management . . . . . . . . . . . . . . . . . .. . . . . . . . . . . .B-14
Additional Purchase and Redemption Information . . . . . . . . . . . B-16
Determination of Share Price . . . . . . . . . . . . . . . . . . . .B-17
General Information . . . . . . . . . . . . . . . . . . . . . . . B-18
Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . B-19
<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 Lighthouse Growth Fund
series (the "Fund").

INVESTMENT OBJECTIVE AND POLICIES

The Lighthouse Growth Fund (the "Fund") is a mutual fund with the
investment objective of seeking growth of capital. 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 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.

Other Investment Practices

The Fund is authorized to make use of the following investment
practices, but only to the extent of up to 5% of its net assets with respect to
any given practice.

Securities Lending

Although the Fund's objective is growth of capital, the Fund reserves
the right to lend its portfolio securities in order to generate income from time
to time. 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 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

The Fund may 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 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.

ADR's and closed-end investment companies traded in U.S. markets are not
considered foreign securities for purposes of the 5% limitation on investments
in foreign issuers noted above.

Options Transactions

The Fund may purchase and write call and put options on securities and
securities indexes. 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.

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.

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 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.

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 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

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. 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 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.

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. Purchase or sell commodities or commodity contracts (the Board of
Trustees may in the future 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).

5. Invest 25% or more 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. 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:

8. 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.

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 (August 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 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 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.

The Fund may write, purchase or sell certain option, futures, and
foreign currency 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 option, futures and foreign currency 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.

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 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.

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

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. Formerly Founder and 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

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), and Legal Product
Manager, Mitchell Hutchins Asset Management (1988-91).

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 total amount
is allocated among the portfolios. Disinterested trustees receive an annual
retainer of $7,500 and a fee of $2,500 for each regularly scheduled meeting.
These trustees also receive a fee of $1,000 for any special meeting attended.
The Chairman of the Board of Trustees receives an additional annual retainer or
$4,500. 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. During the Fund's initial fiscal period ended August 31, 1996
Trustees' fees and expenses in the amount of $2,038 were allocated to the Fund.

Name of Trustee Total Compensation

Dorothy A. Berry $22,000
Wallace L. Cook $17,500
Carl A. Froebel $17,500
Rowley W.P. Redington $17,500

The officers of the Trust receive no compensation directly from it for
performing the duties of their offices. However, those officers and Trustees of
the Trust who are officers and/or stockholders of those companies that render
administrative services to the Trust as noted below may receive remuneration
indirectly because of fees that these companies receive from the Trust. As of
the date of this Statement of Additional Information, the Trustees and officers
of the Trust as a group did not own more than 1% of the outstanding shares of
any Fund. Trustees receive no retirement benefits or deferred compensation from
the Trust.

Investment Advisor

The Board of Trustees of the Trust establishes the Fund's policies and
supervises and reviews the management of the Fund. The Advisor is located at
10000 Memorial Drive, Suite 660, Houston, TX 77024. The Advisor was founded in
1988 and is controlled by Mr. Paul G. Horton, President and Managing Director
and Mr. Kevin P. Duffy, Research Director and Portfolio Manager. While the
Advisor has not previously advised a registered investment company, it provides
investment advisory services to individual and institutional investors with
assets of approximately $200 million. Mr. Duffy is responsible for management
of the Fund's portfolio.

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 1.25%
annually. During the Fund's initial fiscal period ended August 31, 1996
advisory fees totaled $92,926, of which $71,298 was waived by the advisor in
order to limit the Fund's operating expenses to no more than 2.00% of average
net assets.

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.

Administrator

The Fund has entered into an Administrative Agreement with Investment
Company Administration Corporation ('ICAC'), a corporation owned in part 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 ability 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. For its
services, ICAC 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

During the Fund's initial fiscal period ended August 31, 1996, the
Administrator received fees of $24,698.

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.

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. The fee is paid to the Distributor as reimbursement of, or in
anticipation of, expenses incurred for distribution related activity. During
the Fund's initial fiscal period ended August 31, 1996, the Fund paid fees of
$18,585 to the Distributor, which consisted of $13,794 in marketing and
mailing expenses, $3,915 in printing expenses and $876 in travel and
enteratainment expenses relating to the distribution of the Fund's shares.

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 are eligible 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. 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 dealer or
underwriter are comparable, the order may be allocated to a 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 services needed to
obtain 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 may be placed with broker-dealers who sell
shares of the Fund is subject to rules adopted by the National Association of
Securities Dealers, Inc.

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
Advisor, even if the specific services were not imputed just to 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
by the Fund and the Advisor to be reasonable in relation to the value of the
brokerage and/or research services provided by such broker-dealer, which
services either produce a direct benefit to the Fund or assist the Advisor in
carrying out its responsibilities to the Fund. 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
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 ended August 31,1996, brokerage commissions paid by the Fund
totaled $31,341.

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION

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 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 an Automatic
Investment 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 this
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

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

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

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 return for the one year period from inception on September
29, 1996 through September 30, 1996 was 12.92%

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.

GENERAL INFORMATION

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

Ernst & Young LLP, 515 South Flower St., 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.

On October 7, 1996, Charles Schwab & Co. Special Custody Account for
Customers, San Francisco, CA owned of record 33.27% of the Fund's outstanding
voting securities.

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
August 31,1996 is a separate document supplied with this Statement of Additional
Information and the financial statements, therein are incorporated by reference
in this Statement of Additional Information.

<PAGE>

STATEMENT OF ADDITIONAL INFORMATION

October 31, 1996

U.S. GLOBAL LEADERS GROWTH FUND
a series of
PROFESSIONALLY MANAGED PORTFOLIOS
630 Fifth Avenue
New York, NY 10111
(212) 765-5350

This Statement of Additional Information is not a prospectus and it should be
read in conjunction with the prospectus of the U.S. Global Leaders Growth Fund
(the "Fund"). A copy of the prospectus of the Fund dated October 31, 1996 is
available by calling the number listed above or (212) 633- 9700.

TABLE OF CONTENTS

Page

The Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-2
Investment Objective and Policies . . . . . . . . . . . . . . . . . . B-2
Investment Restrictions . . . . . . . . . . . . . . . . . . . . . . . . B-4
Distributions and Tax Information . . . . . . . . . . . . . . . . . . . B-6
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-7
Investment Advisor . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-10
Administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-10
Distributor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-11
Execution of Portfolio Transactions . . . . . . . . . . . . . . . . . . . B-11
Additional Purchase and Redemption Information . . . . . . . . . . . . B-13
Determination of Share Price . . . . . . . . . . . . . . . . . . . . . B-14
Performance Information . . . . . . . . . . . . . . . . . . . . . . . . B-14
General Information . . . . . . . . . . . . . . . . . . . . . . . . . . B-15
Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . B-16

B-1

<PAGE>

THE TRUST

INVESTMENT OBJECTIVE AND POLICIES

The U.S. Global Leaders Growth Fund (the "Fund") is a mutual fund with the
investment objective of seeking growth of capital. 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 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>

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.

Foreign Investments

The Advisor is permitted to invest up to 25% of the Fund's net assets in foreign
companies, although the level of such investment is not expected to exceed 15%
under normal circumstances. The Advisor intends to invest only in large
capitalization, well established foreign issuers the securities of which are
traded in the U.S., and which present their financial data in accordance with
generally accepted accounting principles in the U.S. Thus, the Advisor thus
expects that there will be little, if any risk associated with its foreign
investments.

The risks associated with foreign issuers include political and economic risks.
Foreign investments may be affected by actions of 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. While the Advisor believes it unlikely that the
companies and countries in which the Advisor invests would be subject to such
circumstances, there is no assurance that the Advisor will be able to anticipate
or counter these potential events in selecting foreign issuers for the Fund's
portfolio.

B-3

<PAGE>

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. Make loans to others, except (a) through the occasional 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) 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. Purchase or sell commodities or commodity contracts (the Board of Trustees
may in the future 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. 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.

7. 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:

8. 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

B-4

<PAGE>

aggregate which would exceed 10% of the value of the Fund's total assets.

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 (June 30). 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 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.

B-5

<PAGE>

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.

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 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

B-6

<PAGE>

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.

Non-U.S. Shareholders. Dividends paid by the Fund to a shareholder who, as to
the United States, is a nonresident alien individual, nonresident alien
fiduciary of a trust or estate, foreign corporation or foreign partnership
("foreign shareholder") will be subject to U.S. withholding tax (at a rate of
30% or lower treaty rate). Withholding will not apply if a dividend paid by the
Fund to a foreign shareholder is "effectively connected with the conduct of a
U.S. trade or business," in which case the reporting and withholding
requirements applicable to domestic shareholders will apply. Distributions of
net capital gain are not subject to withholding, but in the case of a foreign
shareholder who is a nonresident alien individual, those distributions
ordinarily will be subject to U.S. income tax at a rate of 30% (or lower treaty
rate), if the individual is physically present in the United States for more
than 182 days during the taxable year and the distributions are attributable to
a fixed place of business maintained by the individual in the United States.

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

B-7

<PAGE>

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 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 and Chairman

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. Formerly 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.

B-8

<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
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 total amount is
allocated among the portfolios. Disinterested trustees receive an annual
retainer of $7,500 and a fee of $2,500 for each regularly scheduled meeting.
These trustees also receive a fee of $1,000 for any special meeting attended.
The Chairman of the Board of Trustees receives an additional annual retainer of
$4,500. The disinterested trustees are also reimbursed for expenses in
connection with each Board meeting attended. No other compensation or retirement
benefits are received by any Trustee or officer from the Fund or any other
portfolios of the Trust. During the Fund's initial fiscal period ended June 30,
1996, $1,493 of Trustees' fees and expenses were allocated to the Fund.

Name of Trustee Total Compensation

Dorothy A. Berry $22,000
Wallace L. Cook $17,500
Carl A. Froebel $17,500
Rowley W. P. Redington $17,500

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-9

<PAGE>

INVESTMENT ADVISOR

The Board of Trustees of the Trust establishes the Fund's policies and
supervises and reviews the management of the Fund. The Advisor is located at 630
Fifth Avenue, New York, NY 10111. The Advisor was founded in 1968 and is
controlled by Mr. George M. Yeager, President. While the Advisor has not
previously advised a registered investment company, it provides investment
advisory services to individual and institutional investors with assets of over
$250 million. Mr. Yeager is responsible for management of the Fund's portfolio.

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. During the Fund's initial fiscal period ended June 30, 1996, the
Advisor reimbursed fees and expenses totaling $43,575, including its advisory
fee of $40,684.

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.

ADMINISTRATOR

The Fund has entered into an Administrative Agreement with Investment Company
Administration Corp. ("ICAC"), a corporation owned in part 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. For its
services, ICAC receives a monthly fee at the following annual rate:

B-10

<PAGE>

Average net assets Fee or fee rate

During the Fund's initial fiscal period ended June 30, 1996, the Administrator
received fees of $20,027.

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 Management Agreement, the Advisor determines which
securities are to be purchased and sold by the Fund and which broker-dealers are
eligible 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.

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 dealer or underwriter are comparable, the order may be allocated to a
dealer or underwriter that has provided research or other services as discussed
below.

B-11

<PAGE>

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 services needed to obtain 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.

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
Advisor, even if the specific services are not directly useful to the Fund and
may be useful to the Advisor 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 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

B-12

<PAGE>

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. Brokerage commissions paid by the Fund
during its initial fiscal period ended June 30, 1996 totaled $7,275.

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, which may take up to fifteen days after purchase.

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.

B-13

<PAGE>

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.

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 year and the period from the Fund's inception of
operations through the most recent calendar quarter. 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-14

<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
total return for the one year period and from inception on September 29, 1995
through September 30, 1996 were 30.04% and 29.85%, respectively.

The Fund's total return may be compared to that of certain broad based
statistical market averages, such as the Dow Jones Industrial Average, 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

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 Street, Cincinnati, OH 45202 acts as Custodian of the
securities and other assets of the Fund. The Custodian does not participate in
decisions relating to the purchase and sale of securities by the Fund. American
Data Services, 24 West Carver St., Huntington, NY 11743 is the Fund's Transfer
and Dividend Disbursing Agent.

Ernst & Young, 515 S. Flower St., Los Angeles, CA 90071 are the independent
auditors for the Fund.

B-15

<PAGE>

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

On October 7, 1996, the following persons owned of record and beneficially more
than 5% of the Fund's outstanding voting securities:

BHC Securities Inc. Trade Account, Philadelphia, PA 19103; 59.40% record.

Lazard Freres & Co. LLC, New York, NY 10271; 19.66% record.

Charlotte D. Nau, Bronxville, NY 10708; 5.75%, record and beneficially

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 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 period ended June
30, 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-16

<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; ) (Avondale Total Return,
Hodges, Osterweis, Perkins Opportunity and Women's Equity
Mutual Fund Series).

Financial Statements for the fiscal year ended August
31, 1996: Incorporated by Reference from the annual
reports to shareholders for the fiscal year ended August 31, 1996
(Academy Value, Lighthouse Growth and Trent Equity Fund Series).

Financial Statements for the fiscal yer ended December
31, 1995; Incorporated by Reference from the annual
reports to shareholders for the fiscal period ended
December 31, 1995 (Insightful Investor Growth Fund
Series, Matrix Growth Fund Series, Matrix Emerging Growth
Fund Series)

Financial Statements for the fiscal year ended June 30, 1996;
Incorporated by Reference from the annual report for the
fiscal period ended June 30, 1996 (Boston Managed Growth Fund,
Leonetti Balanced Fund and U.S. Global Leaders Growth Fund
series).

(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

<PAGE>

(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

(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 October 1, 1996

Shares of Beneficial Interest, no par value:

Academy Value Fund 136
Avondale Total Return Fund 151
Boston Managed Growth Fund 129
Hodges Fund 124
Osterweis Fund 127
Perkins Opportunity Fund 8,788
ProConscience Womens Equity Fund 486
Trent Equity Fund 131
Matrix Growth Fund 465
Matrix Emerging Growth Fund 61
Insightful Investor Growth Fund 110
Leonetti Balanced Fund 330
U.S.Global Leaders Growth Fund 34
Harris, Bretall, Sullivan & Smith
Growth Equity Fund 41
Pzena Focused Value Fund 38
Titan Financial Services Fund 106

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 Officers/Errors and Omissions
Liability insurance policy issued by ICI Mutual Insurance Company with a
$1,000,000 limit of liability.

<PAGE>

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
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
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
Pzena Investment Management LLC File No. 801-50838
Titan Investment Advisers, LLC File No. 801-51306
Pacific Gemini Partners LLC File No. 801-50007

<PAGE>

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:

Berger/BIAM International Fund
RNC Mutual Fund Group, Inc.
Hotchkis and Wiley Funds
PIC Investment Trust
Rainier Investment Management Mutual Funds
Guinness Flight Investment Funds
Jurika & Voyles Fund Group
O'Shaughnessy Funds, Inc.
Masters Concentrated Select Trust

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.
261-E, Phoenix, AZ 85018. Mr. Paggioli serves as President and a

<PAGE>

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 and 2025 E. Financial Way, Ste. 101, Glendora,
CA 91741.

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 October 21, 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 October 21, 1996
Steven J. Paggioli

/S/ Eric M. Banhazl Principal October 21, 1996
Eric M. Banhazl Financial

Officer
Dorothy A. Berry Trustee October 21, 1996
*Dorothy A. Berry

Wallace L. Cook Trustee October 21, 1996
*Wallace L. Cook

Carl A. Froebel Trustee October 21, 1996
*Carl A. Froebel

Rowley W. P. Redington Trustee October 21, 1996
*Rowley W. P. Redington

* By /S/ Steven J. Paggioli
Steven J. Paggioli, Attorney-in-Fact under powers of
attorney as filed with Post-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.
33 to the Registration Statement on Form N-1A of Professionally Managed
Portfolios and to the use of our reports on the financial statements and
financial highlights dated June 30, 1996 with respect to the Boston Managed
Growth Fund, Leonetti Balanced Fund and U.S. Global Leaders Growth Fund series
and dated August 31, 1996 with respect to the Lighthouse Growth Fund series.
Such financial statements and financial highlights appear in the 1996 Annual
Reports to Shareholders of the Funds which are incorporated by reference into
the Statements of Additional Information.

Ernst & Young LLP

Los Angeles, CA
November 1, 1996

<ARTICLE> 6
<CIK> 811030
<NAME> PROFESSIONALLY MANAGED PORTFOLIOS
<SERIES>
<NUMBER> 15
<NAME> BOSTON MANAGED GROWTH FUND

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 59,150,784
<INVESTMENTS-AT-VALUE> 61,471,247
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<NET-INVESTMENT-INCOME> 786,736
<REALIZED-GAINS-CURRENT> (354,958)
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<NUMBER-OF-SHARES-SOLD> 827,127
<NUMBER-OF-SHARES-REDEEMED> (28,929)
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<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<CIK> 811030
<NAME> PROFESSIONALLY MANAGED PORTFOLIOS
<SERIES>
<NUMBER> 16
<NAME> LEONETTI BALANCED FUND

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 9,468,814
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<OVERDISTRIBUTION-NII> 0
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<NET-ASSETS> 10,087,215
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<OTHER-INCOME> 2,182
<EXPENSES-NET> 172,716
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<NUMBER-OF-SHARES-REDEEMED> (46,213)
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<PER-SHARE-NAV-BEGIN> 10
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</TABLE>

<ARTICLE> 6
<CIK> 811030
<NAME> PROFESSIONALLY MANAGED PORTFOLIOS
<SERIES>
<NUMBER> 18
<NAME> LIGHTHOUSE GROWTH FUND

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 12,181,533
<INVESTMENTS-AT-VALUE> 12,220,605
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<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> (88,658)
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<NET-ASSETS> 13,964,425
<DIVIDEND-INCOME> 24,655
<INTEREST-INCOME> 35,802
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<EXPENSES-NET> 149,115
<NET-INVESTMENT-INCOME> (88,658)
<REALIZED-GAINS-CURRENT> 221,566
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<EQUALIZATION> 0
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<DISTRIBUTIONS-OF-GAINS> 29,461
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,114,505
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<SHARES-REINVESTED> 2,409
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<PER-SHARE-NAV-BEGIN> 12
<PER-SHARE-NII> (0.09)
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<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<CIK> 811030
<NAME> PROFESSIONALLY MANAGED PORTFOLIOS
<SERIES>
<NUMBER> 17
<NAME> U.S. GLOBAL LEADERS GROWTH FUND

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 8,126,000
<INVESTMENTS-AT-VALUE> 9,118,000
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<ASSETS-OTHER> 421
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<TOTAL-ASSETS> 9,129,197
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<OVERDISTRIBUTION-NII> (1,841)
<ACCUMULATED-NET-GAINS> 4,980
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 992,100
<NET-ASSETS> 9,020,443
<DIVIDEND-INCOME> 56,840
<INTEREST-INCOME> 2,942
<OTHER-INCOME> 0
<EXPENSES-NET> 60,212
<NET-INVESTMENT-INCOME> (430)
<REALIZED-GAINS-CURRENT> 4,980
<APPREC-INCREASE-CURRENT> 992,100
<NET-CHANGE-FROM-OPS> 996,650
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<NUMBER-OF-SHARES-SOLD> 747,451
<NUMBER-OF-SHARES-REDEEMED> (887)
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<GROSS-ADVISORY-FEES> 40,684
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 103,787
<AVERAGE-NET-ASSETS> 5,434,419
<PER-SHARE-NAV-BEGIN> 10
<PER-SHARE-NII> 0.01
<PER-SHARE-GAIN-APPREC> 2.08
<PER-SHARE-DIVIDEND> (0.01)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.08
<EXPENSE-RATIO> 0.01
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>