PROFESSIONALLY MANAGED PORTFOLIOS
497, 2000-02-24
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                       STATEMENT OF ADDITIONAL INFORMATION

                                OCTOBER 18, 1999
                          AS AMENDED FEBRUARY 28, 2000

                         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 ("SAI") is not a prospectus and it
should be read in conjunction with the Prospectus dated October 18, 1999, as may
be  revised,  of U.S.  Global  Leaders  Growth  Fund (the  "Fund"),  a series of
Professionally  Managed  Portfolios  (the  "Trust").  Yeager,  Wood  &  Marshall
Incorporated  (the  "Advisor") is the investment  adviser to the Fund. A copy of
the Fund's  Prospectus  is available by calling the number listed above or (212)
633-9700.

                                TABLE OF CONTENTS

The Trust..................................................................  B-2
Investment Objective and Policies..........................................  B-2
Investment Restrictions....................................................  B-6
Distributions and Tax Information..........................................  B-7
Trustees and Executive Officers............................................  B-9
The Fund's Investment Advisor.............................................. B-11
The Fund's Administrator................................................... B-12
The Fund's Distributor..................................................... B-12
Execution of Portfolio Transactions........................................ B-13
Portfolio Turnover......................................................... B-14
Additional Purchase and Redemption Information ............................ B-15
Determination of Share Price............................................... B-18
Performance Information.................................................... B-18
General Information........................................................ B-19
Financial Statements....................................................... B-21
Appendix................................................................... B-21
<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
SAI relates only to the Fund.

                        INVESTMENT OBJECTIVE AND POLICIES

     The U.S.  Global  Leaders  Growth 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 with
respect to its  portfolio  securities.  Pursuant  to such  agreements,  the Fund
acquires securities from financial institutions such as banks and broker-dealers
as are  deemed  to be  creditworthy  by the  Advisor,  subject  to the  seller's
agreement to repurchase and the Fund's  agreement to resell such securities at a
mutually agreed upon date and price.  The repurchase  price generally equals the
price  paid by the  Fund  plus  interest  negotiated  on the  basis  of  current
short-term  rates  (which  may be more or less  than the rate on the  underlying
portfolio security). Securities subject to repurchase agreements will be held by
the  Custodian  or in  the  Federal  Reserve/Treasury  Book-Entry  System  or an
equivalent  foreign  system.  The seller  under a repurchase  agreement  will be
required to maintain  the value of the  underlying  securities  at not less than
102% of the repurchase price under the agreement.  If the seller defaults on its
repurchase  obligation,  the  Fund  will  suffer a loss to the  extent  that the
proceeds from a sale of the  underlying  securities are less than the repurchase
price under the agreement.  Bankruptcy or insolvency of such a defaulting seller
may cause the Fund's  rights with  respect to such  securities  to be delayed or
limited.  Repurchase  agreements are considered to be loans under the Investment
Company Act (the "1940 Act").

     INVESTMENT  COMPANIES.  The Fund  may  invest  in  shares  of other  invest
companies in pursuit of its investment objective. This may include investment in
money market mutual funds in connection with the Fund's management of daily cash
positions.  In  addition to the  advisory  and  operational  fees the Fund bears
directly in connection  with its own  operation,  the Fund and its  shareholders
will also bear the pro rata portion of each other investment  company's advisory
and operational expenses.

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
expects  that  there  will be little  if any risk  associated  with its  foreign
investments.

                                      B-2
<PAGE>
     AMERICAN DEPOSITARY RECEIPTS.  The Fund may invest its assets in securities
of foreign  issuers in the form of ADRs,  which are receipts for the shares of a
foreign-based  corporation.  The Fund treats ADRs as interests in the underlying
securities  for  purposes  of  its  investment   policies.  A  purchaser  of  an
unsponsored ADR may not have unlimited voting rights and may not receive as much
information  about the issuer of the  underlying  securities as with a sponsored
ADR.

     RISKS OF INVESTING IN FOREIGN SECURITIES. Investments in foreign securities
involve certain inherent risks, including the following:

     POLITICAL AND ECONOMIC  FACTORS.  Individual  foreign  economies of certain
countries  may differ  favorably or  unfavorably  from the U.S.  economy in such
respects  as  growth  of gross  national  product,  rate of  inflation,  capital
reinvestment, resource self-sufficiency, diversification and balance of payments
position.  The  internal  politics of certain  foreign  countries  may not be as
stable as those of the United States.  Governments in certain foreign  countries
also continue to participate to a significant degree, through ownership interest
or regulation, in their respective economies.  Action by these governments could
include  restrictions on foreign investment,  nationalization,  expropriation of
goods or  imposition  of taxes,  and could have a  significant  effect on market
prices of  securities  and payment of  interest.  The  economies of many foreign
countries are heavily  dependent upon  international  trade and are  accordingly
affected  by the  trade  policies  and  economic  conditions  of  their  trading
partners. Enactment by these trading partners of protectionist trade legislation
could have a  significant  adverse  effect upon the  securities  markets of such
countries.

     CURRENCY  FLUCTUATIONS.  The Fund may invest in securities  denominated  in
foreign  currencies.  Accordingly,  a change in the  value of any such  currency
against the U.S. dollar will result in a corresponding change in the U.S. dollar
value of the Fund's assets denominated in that currency.  Such changes will also
affect the Fund's income. The value of the Fund's assets may also be affected by
currency  restrictions  and exchange  control  regulations  enacted from time to
time.

     EURO  CONVERSION.  Several  European  countries  adopted  a single  uniform
currency known as the "euro,"  effective  January 1, 1999. The euro  conversion,
that will take place over a several-year  period,  could have potential  adverse
effects  on the  Fund's  ability  to value its  portfolio  holdings  in  foreign
securities,  and could increase the costs associated with the Fund's operations.
The Fund and the Advisor are working  with  providers of services to the Fund in
the  areas of  clearance  and  settlement  of trade in an  effect  to avoid  any
material  impact  on the  Fund  due  to the  euro  conversion;  there  can be no
assurance, however, that the steps taken will be sufficient to avoid any adverse
impact on the Fund.

     LEGAL AND  REGULATORY  MATTERS.  Certain  foreign  countries  may have less
supervision of securities markets,  brokers and issuers of securities,  and less
financial  information  available  to issuers,  than is  available in the United
States.

     TAXES. The interest and dividends  payable on certain of the Fund's foreign
portfolio  securities may be subject to foreign withholding taxes, thus reducing
the net amount of income available for distribution to Fund shareholders.

                                      B-3
<PAGE>
     COSTS. To the extent that the Fund invests in foreign securities, its
expense  ratio  is  likely  to be  higher  than  those of  investment  companies
investing only in domestic securities, since the cost of maintaining the custody
of foreign securities is higher.

     EMERGING  MARKETS.  Some of the securities in which the Fund may invest may
be located in developing or emerging  markets,  which entail  additional  risks,
including  less social,  political and economic  stability;  smaller  securities
markets and lower trading volume, which may result in less liquidity and greater
price  volatility;  national  policies  that may restrict the Fund's  investment
opportunities,  including  restrictions on investments in issuers or industries,
or expropriation or confiscation of assets or property; and less developed legal
structures governing private or foreign investment.

BORROWING

     The Fund may borrow money from banks in an  aggregate  amount not to exceed
one-third of the value of the Fund's total assets to meet temporary or emergency
purposes, and may pledge its assets in connection with such borrowings. The Fund
will not  purchase any  securities  while any such  borrowings  exceed 5% of the
Fund's total assets.

     ILLIQUID SECURITIES.  The Fund may not invest more than 15% of the value of
its net  assets  in  securities  that at the  time of  purchase  have  legal  or
contractual  restrictions on resale or are otherwise illiquid.  The Advisor will
monitor the amount of illiquid  securities  in the Fund's  portfolio,  under the
supervision  of the Trust's  Board of Trustees,  to ensure  compliance  with the
Fund's investment restrictions.

     Historically,  illiquid  securities  have  included  securities  subject to
contractual  or  legal  restrictions  on  resale  because  they  have  not  been
registered under the Securities Act of 1933 (the "Securities  Act"),  securities
which are otherwise not readily  marketable and repurchase  agreements  having a
maturity of longer than seven days.  Securities  which have not been  registered
under the  Securities  Act are referred to as private  placement  or  restricted
securities  and are  purchased  directly  from the  issuer  or in the  secondary
market.  Mutual  funds  do not  typically  hold a  significant  amount  of these
restricted or other illiquid  securities  because of the potential for delays on
resale and  uncertainty in valuation.  Limitations on resale may have an adverse
effect on the marketability of portfolio securities and the Fund might be unable
to dispose of restricted or other illiquid  securities promptly or at reasonable
prices and might thereby experience  difficulty  satisfying  redemption requests
within  seven  days.  The Fund  might  also  have to  register  such  restricted
securities  in order to dispose of them,  resulting  in  additional  expense and
delay.  Adverse  market  conditions  could  impede  such a  public  offering  of
securities.

     In recent years,  however, a large  institutional  market has developed for
certain  securities that are not registered under the Securities Act,  including
repurchase   agreements,   commercial  paper,   foreign  securities,   municipal
securities and corporate bonds and notes.  Institutional  investors depend on an
efficient institutional market in which the unregistered security can be readily
resold or on an issuer's ability to honor a demand for repayment.  The fact that
there are  contractual or legal  restrictions on resale to the general public or

                                      B-4
<PAGE>
to  certain  institutions  may  not be  indicative  of  the  liquidity  of  such
investments.   These  securities  might  be  adversely   affected  if  qualified
institutional  buyers  were  unwilling  to  purchase  such  securities.  If such
securities are subject to purchase by  institutional  buyers in accordance  with
Rule 144A  promulgated by the SEC under the Securities Act, the Trust's Board of
Trustees  may  determine  that  such  securities  are  not  illiquid  securities
notwithstanding  their legal or  contractual  restrictions  on resale.  However,
these may become illiquid if  institutions  become for a time  disinterested  in
buying these  securities.  In all other cases,  however,  securities  subject to
restrictions on resale will be deemed illiquid.

SHORT-TERM  INVESTMENTS.  The Fund may invest in any of the following securities
and instruments:

     CERTIFICATES OF DEPOSIT,  BANKERS' ACCEPTANCES AND TIME DEPOSITS.  The Fund
may acquire  certificates  of deposit,  bankers'  acceptances and time deposits.
Certificates  of  deposit  are  negotiable  certificates  issued  against  funds
deposited  in a  commercial  bank for a  definite  period of time and  earning a
specified  return.  Bankers'  acceptances  are  negotiable  drafts  or  bills of
exchange,  normally  drawn  by an  importer  or  exporter  to pay  for  specific
merchandise,  which are  "accepted"  by a bank,  meaning in effect that the bank
unconditionally  agrees to pay the face  value of the  instrument  on  maturity.
Certificates  of deposit and bankers'  acceptances  acquired by the Fund will be
dollar- denominated obligations of domestic banks, savings and loan associations
or financial institutions which, at the time of purchase, have capital,  surplus
and  undivided  profits  in excess  of $100  million  (including  assets of both
domestic and foreign branches),  based on latest published reports, or less than
$100 million if the principal  amount of such bank obligations are fully insured
by the U.S. Government.

     In addition to purchasing certificates of deposit and bankers' acceptances,
to the extent permitted under its investment objective and policies stated above
and in its  prospectus,  the  Fund  may  make  interest-bearing  time  or  other
interest-bearing  deposits in  commercial  or savings  banks.  Time deposits are
non-negotiable  deposits  maintained  at a banking  institution  for a specified
period of time at a specified interest rate.

     COMMERCIAL PAPER AND SHORT-TERM NOTES. The Fund may invest a portion of its
assets in commercial  paper and short-term  notes.  Commercial paper consists of
unsecured  promissory notes issued by  corporations.  Issues of commercial paper
and short-term  notes will normally have maturities of less than nine months and
fixed rates of return,  although such  instruments  may have maturities of up to
one year.

     Commercial  paper and short-term  notes will consist of issues rated at the
time of purchase "A-2" or higher by Standard & Poor's  Ratings Group,  "Prime-1"
or "Prime-2" by Moody's Investors  Service,  Inc., or similarly rated by another
nationally  recognized  statistical rating organization or, if unrated,  will be
determined by the Advisor to be of comparable quality.  These rating symbols are
described in the Appendix.

                                      B-5
<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.

     2. (a) Borrow money,  except as stated in the  Prospectus and this SAI. 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 real estate,  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  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 except as permitted
under the 1940 Act.

                                       B-6
<PAGE>
     9. Invest, in the aggregate,  more than 15% of its net 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.

     10. With respect to fundamental investment restriction 2(a) above, the Fund
will not purchase portfolio securities while outstanding borrowings exceed 5% of
its assets.

     If a percentage  restriction  set forth in the prospectus or in this SAI 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 with respect to borrowing or the purchase
of restricted or illiquid securities.

                        DISTRIBUTIONS AND TAX INFORMATION

DISTRIBUTIONS

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

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

TAX INFORMATION

     Each series of the Trust is treated as a separate entity for federal income
tax purposes.  The Fund intends to continue to qualify as a regulated investment
company  under  Subchapter M of the Internal  Revenue Code of 1986 (the "Code"),
provided it complies with all  applicable  requirements  regarding the source of
its  income,  diversification  of its assets and  timing of  distributions.  The
Fund's policy is to distribute to  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
ordinary  income  for such  year,  (ii) at least 98% of the  excess of  realized
capital  gains over 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.

                                       B-7
<PAGE>
     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  policies,  it is
expected that  dividends  from domestic  corporations  may 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 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 of Fund shares may result in  recognition of a taxable gain or
loss. Any loss realized upon a redemption  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 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 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.

                                       B-8
<PAGE>
     The Fund may be subject  to  foreign  withholding  taxes on  dividends  and
interest earned with respect to securities of foreign corporations.

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

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

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

                        TRUSTEES AND EXECUTIVE OFFICERS

     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, their affiliations, dates of
birth and  principal  occupations  for the past five years are set forth  below.
Unless noted  otherwise,  each person has held the position listed for a minimum
of five years.

Steven J. Paggioli,* 04/03/50 President and Trustee
915 Broadway, New York, New York 10010. Executive Vice President,  The Wadsworth
Group   (consultants);   Executive   Vice   President  of   Investment   Company
Administration  L.L.C.  ("ICA")  (mutual  fund  administrator  and  the  Trust's
administrator),and  Vice President of First Fund  Distributors,  Inc. ("FFD") (a
registered broker-dealer and the Fund's Distributor).

Dorothy A. Berry, 08/12/43 Chairman and Trustee
14 Five Roses East,  Ancram,  NY 12502.  President,  Talon  Industries  (venture
capital and business consulting);  formerly Chief Operating Officer,  Integrated
Asset Management (investment adviser and manager) and formerly President,  Value
Line, Inc., (investment advisory and financial publishing firm).

                                       B-9
<PAGE>
Wallace L. Cook 09/10/39 Trustee
One Peabody Lane,  Darien,  CT 06820.  Retired.  Formerly Senior Vice President,
Rockefeller Trust Co. Financial Counselor, Rockefeller & Co.

Carl A. Froebel 05/23 /38 Trustee
2 Crown Cove Lane,  Savannah,  GA 31411.  Private  Investor.  Formerly  Managing
Director,  Premier Solutions,  Ltd. (computer software);  formerly President and
Founder,  National  Investor Data Services,  Inc.  (investment  related computer
software).

Rowley W.P. Redington 06/01/44 Trustee
1191 Valley Road,  Clifton,  New Jersey 07103.  President;  Intertech  (consumer
electronics and computer service and marketing); formerly Vice President, PRS of
New Jersey, Inc. (management  consulting),  and Chief Executive Officer,  Rowley
Associates (consultants).

Robert M. Slotky* 6/17/47 Treasurer
2020 E.  Financial  Way,  Suite 100,  Glendora,  California  91741.  Senior Vice
President,  ICA since May 1997;  former  instructor  of accounting at California
State  University-Northridge  (1997);  Chief  Financial  Officer,  Wanger  Asset
Management L.P. and Treasurer of Acorn Investment Trust (1992- 1996).

Robin Berger* 11/17/56 Secretary
915 Broadway, New York, New York 10010. Vice President, The Wadsworth Group.

Robert H. Wadsworth* 01/25/40 Vice President
4455 E. Camelback Road,  Suite 261E,  Phoenix,  Arizona 85018.  President of The
Wadsworth Group; President of ICA 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 all portfolios of the Trust.  This total amount is allocated among
the portfolios. Disinterested Trustees receive an annual retainer of $10,000 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  $5,000.
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 from the portfolios of the Trust.

                                      B-10
<PAGE>
Name of Trustee                     Total Annual Compensation
- ---------------                     -------------------------
Dorothy A. Berry                            $25,000
Wallace L. Cook                             $20,000
Carl A. Froebel                             $20,000
Rowley W.P. Redington                       $20,000

During the Fund's fiscal year ended June 30, 1999, $12,334 of Trustees' fees and
expenses  were  allocated to the Fund.  As of the date of this SAI, the Trustees
and Officers of the Trust as a group did not own more than 1% of the outstanding
shares of the Fund.

                          THE FUND'S INVESTMENT ADVISOR

     The Board of  Trustees of the Trust  establishes  the Fund's  policies  and
supervises and reviews the management of the Fund.

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

     The Advisor has  voluntarily  agreed to reduce its fees and/or pay expenses
of the Fund to  ensure  that the  Fund's  aggregate  annual  operating  expenses
(excluding  interest  and tax  expenses)  will not  exceed  1.39% of the  Fund's
average daily net assets.  Any reduction in advisory fees or payment of expenses
made by the Advisor  may be  reimbursed  by the Fund if the Advisor  requests in
subsequent fiscal years.  This  reimbursement may be requested by the Advisor if
the aggregate  amount  actually paid by the Fund toward  operating  expenses for
such fiscal year  (taking into  account the  reimbursement)  does not exceed the
applicable  limitation  on  Fund  expenses.  The  Advisor  is  permitted  to  be
reimbursed  for fee reductions  and/or expense  payments made in the prior three
fiscal years. Any such reimbursement will be reviewed by the Trustees.  The Fund
must pay its current ordinary  operating expenses before the Advisor is entitled
to any reimbursement of fees and/or expenses.

     During the fiscal year ended June 30, 1999,  the Fund paid advisory fees of
$1,017,545.

                                      B-11
<PAGE>
     During the fiscal year ended June 30, 1998, the Fund incurred advisory fees
of $539,774; during this period the Advisor undertook to reduce the limit on the
Fund's  total  expenses  from 1.48% to 1.39%  annually and  reimbursed  the Fund
$6,910 in expenses.

     During the fiscal year ended June 30, 1997, the Fund incurred advisory fees
of  $148,503,  and the Advisor  reimbursed  expenses in the amount of $59,209 in
accordance  with its  undertaking  to limit the Fund's total expenses to no more
than 1.48% of average net assets annually.

                            THE FUND'S ADMINISTRATOR

     The  Fund  has  an   Administration   Agreement  with  Investment   Company
Administration,  LLC (the  "Administrator"),  a  corporation  partly  owned  and
controlled by Messrs. Paggioli and Wadsworth with offices at 2020 East Financial
Way,  Ste.  100,  Glendora,  CA 91741 and 4455 E.  Camelback  Rd.,  Ste.  261-E,
Phoenix, AZ 85018. The Administration  Agreement provides that the Administrator
will  prepare  and  coordinate  reports  and  other  materials  supplied  to the
Trustees;  prepare and/or supervise the preparation and filing of all securities
filings,  periodic  financial  reports,  prospectuses,  statements of additional
information,  marketing  materials,  tax returns,  shareholder reports 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 it
currently does, or intends to do business; coordinate the preparation,  printing
and  mailing of all  materials  (e.g.,  annual  reports)  required to be sent to
shareholders;  coordinate the preparation and payment of Fund related  expenses;
monitor  and  oversee  the  activities  of the Fund's  servicing  agents  (i.e.,
transfer  agent,  custodian,  fund  accountants,  etc.);  review  and  adjust as
necessary  the Fund's  daily  expense  accruals;  and  perform  such  additional
services as may be agreed upon by the Fund and the Administrator.

     For its services, the Administrator receives a monthly fee from the Fund 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 $80 million                          0.15% of average net assets
$80 million to $100 million                 0.10% of average net assets
Over $100 million                           0.05% of average net assets

     During the Fund's  fiscal  years ended June 30,  1999,  1998 and 1997,  the
Administrator received fees of $162,193, $95,452 and $27,423, respectively.

                             THE FUND'S DISTRIBUTOR

     First Fund  Distributors,  Inc. (the  "Distributor"),  a corporation partly
owned  by  Messrs.  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
for periods  not  exceeding  one year if  approved at least  annually by (i) the
Board of  Trustees or the vote of a majority  of the  outstanding  shares of the
Fund (as  defined in the 1940 Act) and (ii) a majority of the  Trustees  who are
not  interested  persons  of any such  party,  in each  case cast in person at a
meeting  called for the  purpose of voting on such  approval.  The  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.

                                      B-12
<PAGE>
                       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   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 accounts.  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 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.

                                      B-13
<PAGE>
     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
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.

     For the fiscal year ended June 30, 1999, the Fund paid $80,491 in brokerage
commissions, of which $4,564 was paid to firms that furnished research services.
For the fiscal  years  ended June 30, 1998 and 1997,  the Fund paid  $45,143 and
$27,828, respectively, in brokerage commissions.

                               PORTFOLIO TURNOVER

     Although  the  Fund  generally  will  not  invest  for  short-term  trading
purposes,  portfolio securities may be sold without regard to the length of time
they  have  been  held  when,   in  the  opinion  of  the  Advisor,   investment
considerations  warrant such action.  Portfolio  turnover  rate is calculated by
dividing (1) the lesser of purchases  or sales of portfolio  securities  for the
fiscal  year by (2) the  monthly  average of the value of  portfolio  securities
owned  during the  fiscal  year.  A 100%  turnover  rate would  occur if all the
securities  in the Fund's  portfolio,  with the  exception of  securities  whose
maturities  at the time of  acquisition  were one  year or less,  were  sold and
either  repurchased  or  replaced  within  one year.  A high  rate of  portfolio
turnover  (100% or more)  generally  leads to higher  transaction  costs and may
result in a greater number of taxable transactions.  See "Execution of Portfolio
Transactions." For the fiscal years ended June 30, 1999 and 1998, the Fund had a
portfolio turnover rate of 14.27% and 4.02%, respectively.

                                      B-14
<PAGE>
                 ADDITIONAL PURCHASE AND REDEMPTION INFORMATION

     The information provided below supplements the information contained in the
Fund's Prospectus regarding the purchase and redemption of Fund shares.

HOW TO BUY SHARES

     You may  purchase  shares of the Fund  from  selected  securities  brokers,
dealers or  financial  intermediaries.  Investors  should  contact  these agents
directly for  appropriate  instructions,  as well as  information  pertaining to
accounts  and any  service  or  transaction  fees that may be  charged  by those
agents. Purchase orders through securities brokers,  dealers and other financial
intermediaries are effected at the next-determined net asset value after receipt
of the order by such agent before the Fund's daily cutoff time.  Orders received
after that time will be purchased at the next-determined net asset value.

     The public  offering price of Fund shares is the net asset value.  The Fund
receives the net asset value.  Shares are purchased at the public offering price
next  determined  after the Transfer Agent receives your order in proper form as
discussed  in the Fund's  Prospectus.  In most cases,  in order to receive  that
day's  public  offering  price,  the  Transfer  Agent must receive your order in
proper form before the close of regular  trading on the New York Stock  Exchange
("NYSE").  If  you  buy  shares  through  your  investment  representative,  the
representative  must receive  your order before the close of regular  trading on
the NYSE to receive that day's public offering price.  Orders are in proper form
only after funds are converted to U.S. funds.

     If you are considering  redeeming or transferring  shares to another person
shortly after  purchase,  you should pay for those shares with a certified check
to avoid any delay in REDEMPTION,  exchange or transfer.  Otherwise the Fund may
delay payment until the purchase price of those shares has been collected or, if
you redeem by  telephone,  until 15 calendar  days after the purchase  date.  To
eliminate the need for  safekeeping,  the Fund will not issue  certificates  for
your shares unless you request them.

     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.

     The Fund may also issue Fund shares in exchange for  appropriate  portfolio
securities.   Such   transactions  may  benefit  the  Fund  by  eliminating  the
transaction  costs  that  would  otherwise  be borne  by the Fund in  purchasing
portfolio securities in the stock markets. Under certain limited conditions,  an
investor may purchase Fund shares with portfolio  securities that are moved into
the Fund's portfolio on a tax-free basis for the investor. In such instance, the
unrealized  gain or loss in the transferred  portfolio  would become  unrealized
gain or loss for the Fund.

                                      B-15
<PAGE>
HOW TO SELL SHARES

     You can sell your Fund shares any day the NYSE is open for regular trading,
either directly to the Fund or through your investment representative.  The Fund
will forward  redemption  proceeds or redeem  shares for which it has  collected
payment of the purchase price.

     Payments to shareholders  for Fund shares  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 with complete  information
and meeting all the requirements discussed in the Fund's 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 NYSE is  restricted  as  determined by
the SEC or the NYSE 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.

SELLING SHARES DIRECTLY TO THE FUND

     Send a signed letter of  instruction to the Transfer  Agent.  The price you
will receive is the next net asset value calculated after your order is received
by the Transfer Agent with complete information and meeting all the requirements
discussed  in the Fund's  Prospectus.  In order to receive  that day's net asset
value,  the Transfer Agent must receive your request before the close of regular
trading on the NYSE.

SELLING SHARES THROUGH YOUR INVESTMENT REPRESENTATIVE

     Your investment  representative  must receive your request before the close
of  regular  trading on the NYSE to receive  that  day's net asset  value.  Your
investment  representative  will be  responsible  for  furnishing  all necessary
documentation to the Transfer Agent, and may charge you for its services.

     If you want your  redemption  proceeds  sent to an address  other than your
address as it appears on the Transfer Agent's records, a signature  guarantee is
required.  The Fund may require additional  documentation for the sale of shares
by a corporation,  partnership,  agent or fiduciary, or a surviving joint owner.
Contact the Transfer Agent for details.

DELIVERY OF PROCEEDS

     The Fund generally sends you payment for your shares the business day after
your request is received in proper form, assuming the Fund has collected payment
of the purchase price of your shares. Under unusual circumstances,  the Fund may
suspend  redemptions,  or postpone payment for more than seven days, but only as
authorized by SEC rules, as stated above under "How to Sell Shares."

                                      B-16
<PAGE>
TELEPHONE REDEMPTIONS

     Upon  receipt  of  any  instructions  or  inquiries  by  telephone  from  a
shareholder  or, if held in a joint  account,  from  either  party,  or from any
person  claiming  to be the  shareholder,  the Fund or its agent is  authorized,
without  notifying the  shareholder or joint account  parties,  to carry out the
instructions or to respond to the inquiries, consistent with the service options
chosen by the  shareholder or joint  shareholders in his or their latest Account
Application  or  other  written  request  for  services,  including  purchasing,
exchanging or redeeming shares of the Fund and depositing and withdrawing monies
from the bank account specified in the shareholder's  latest Account Application
or as otherwise properly specified to the Fund in writing.

     The Transfer  Agent will employ these and other  reasonable  procedures  to
confirm that instructions  communicated by telephone are genuine; if it fails to
employ  reasonable  procedures,  the Fund may be liable  for any  losses  due to
unauthorized or fraudulent  instructions.  An investor agrees,  however, that to
the extent  permitted by applicable law, neither the Fund nor its agents will be
liable for any loss,  liability,  cost or expense  arising out of any redemption
request,  including any fraudulent or  unauthorized  request.  For  information,
consult the Transfer Agent.

     During periods of unusual market changes and shareholder activity,  you may
experience delays in contacting the Transfer Agent by telephone.  In this event,
you may  wish to  submit a  written  redemption  request,  as  described  in the
Prospectus, or contact your investment representative.  The Telephone Redemption
Privilege  is not  available  if you were  issued  certificates  for shares that
remain  outstanding.  The  Telephone  Redemption  Privilege  may be  modified or
terminated without notice.

REDEMPTIONS-IN-KIND

     The Trust has filed an election  under SEC Rule 18f-1  committing to pay in
cash all  redemptions by a shareholder of record up to amounts  specified by the
rule (in excess of the lesser of (i) $250,000 or (ii) 1% of the Fund's  assets).
The Fund has  reserved  the right to pay the  redemption  price of its shares in
excess of the amounts specified by the rule,  either totally or partially,  by a
distribution in kind of portfolio  securities  (instead of cash). The securities
so  distributed  would be valued at the same amount as that  assigned to them in
calculating  the net asset  value for the shares  being sold.  If a  shareholder
receives a distribution in kind, the shareholder  could incur brokerage or other
charges in converting the securities to 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-17
<PAGE>
                          DETERMINATION OF SHARE PRICE

     As noted in the Prospectus,  the net asset value of shares of the Fund will
be determined once daily as of the close of public trading on the NYSE (normally
4:00 p.m.  Eastern  time) on each day that the NYSE is open for  trading.  It is
expected that the NYSE will be closed on Saturdays and Sundays and on New Year's
Day,  Martin Luther King Jr. 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 shares on any day when the NYSE 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.
However,  the net asset value of Fund shares may be  determined on days the NYSE
is closed or at times other than 4:00 p.m.  if the Board of Trustees  decides it
is necessary.

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

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

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

                                      B-18
<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:

                                        n
                                  P(1+T)  = ERV

Where:
        P = a hypothetical initial purchase order of $1,000 from which the
            maximum sales load is deducted
        T = average annual total return
        n = number of years
      ERV = ending redeemable value of the hypothetical $1,000 purchase at the
            end of the period

     Aggregate total return is calculated in a similar  manner,  except that the
results are not  annualized.  Each  calculation  assumes that all  dividends and
distributions are reinvested at net asset value on the reinvestment dates during
the period.  The Fund's  average  annual  total  return  since its  inception on
September 29, 1995 through the fiscal year ending June 30, 1999 was 28.90%.  The
Fund's total return for the fiscal year ending June 30, 1999 was 14.77%. Certain
fees and expenses of the Fund have been reimbursed  from inception  through June
30, 1999.  Accordingly,  return figures are higher than they would have been had
such fees and expenses not been reimbursed.

                               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.

     Firstar Institutional Custody Services, 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,  Inc., P.O. Box 5536, Hauppauge,
NY 11743 is the Fund's Transfer and Dividend Disbursing Agent.

     Ernst & Young LLP,  725 South  Figueroa,  Los  Angeles,  CA 90017,  are the
independent auditors for the Fund.

     Paul, Hastings, Janofsky & Walker, LLP, 345 California St., 29th floor, San
Francisco, California 94104, are legal counsel to the Fund.

     On  September  30,  1999,  the  following  persons  owned of record  and/or
beneficially more than 5% of the Fund's outstanding voting securities:

     BHC Securities Inc. Trade Account, Philadelphia, PA 19103; 8.52%

     Lazard Freres & Co. LLC, New York, NY 10020; 7.25%

     Charles Schwab & Co., San Francisco, CA 94104; 28.41%

     Trustees of Bethany College, Bethany, WV 26031; 11.35%

                                      B-19
<PAGE>
     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.

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

     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.

                                      B-20
<PAGE>
                              FINANCIAL STATEMENTS

     The annual report to  shareholders  for the Fund for its most recent fiscal
year  end is a  separate  document  supplied  with  this  SAI and the  financial
statements,  accompanying notes and report of independent  accountants appearing
therein are incorporated by reference in this SAI.

                                    APPENDIX
                            COMMERCIAL PAPER RATINGS

MOODY'S INVESTORS SERVICE, INC.

     Prime-1--Issuers (or related supporting  institutions) rated "Prime-1" have
a  superior  ability  for  repayment  of  senior  short-term  debt  obligations.
"Prime-1"  repayment  ability will often be  evidenced by many of the  following
characteristics:  leading market positions in well-established  industries, high
rates of return on funds employed,  conservative  capitalization structures with
moderate reliance on debt and ample asset protection,  broad margins in earnings
coverage of fixed  financial  charges and high  internal  cash  generation,  and
well-established  access to a range of financial  markets and assured sources of
alternate liquidity.

     Prime-2--Issuers (or related supporting  institutions) rated "Prime-2" have
a strong ability for repayment of senior short-term debt obligations.  This will
normally be evidenced by many of the characteristics cited above but to a lesser
degree.  Earnings trends and coverage ratios,  while sound, will be more subject
to variation.  Capitalization  characteristics,  while still appropriate, may be
more affected by external conditions. Ample alternative liquidity is maintained.

STANDARD & POOR'S RATINGS GROUP

     A-1--This  highest  category  indicates that the degree of safety regarding
timely payment is strong.  Those issues  determined to possess  extremely strong
safety characteristics are denoted with a plus (+) sign designation.

     A-2--Capacity  for  timely  payment  on  issues  with this  designation  is
satisfactory.  However,  the  relative  degree  of  safety is not as high as for
issues designated "A-1".

                                      B-21


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