WOODWARD FUNDS, 497, 1996-04-26

WOODWARD FUNDS
497, 1996-04-26

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PROSPECTUS April 15, 1996
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THE WOODWARD FUNDS
c/o NBD Bank, Transfer Agent
P.O. Box 7058
Troy, Michigan 48007-7058

24 Hour yield and performance information
Purchase and Redemption orders:
(800) 688-3350

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The Woodward Funds (the "Trust") is offering in this Prospectus shares
in the following five investment portfolios (the "Portfolios"), each having
its own investment objective and policies as described in this Prospectus:

Class A shares of the:

Woodward Money Market Fund
Woodward Government Fund
Woodward Treasury Money Market Fund
Woodward Tax-Exempt Money Market Fund
Woodward Michigan Tax-Exempt Money Market Fund

Each of the Portfolios is advised by NBD Bank ("NBD" or the "Adviser")
and is sponsored and distributed by First of Michigan Corporation ("FoM" or
"Co-Distributor") and Essex National Securities, Inc. ("Essex" or
"Co-Distributor").

This Prospectus sets forth concisely information that a prospective
investor should consider before investing. Investors should read this
Prospectus and retain it for future reference. Additional information about
the Trust, contained in a Statement of Additional Information, has been filed
with the Securities and Exchange Commission (the "SEC") and is available upon
request and without charge by writing to The Woodward Funds at the above
address. The Statement of Additional Information bears the same date as this
Prospectus and is incorporated by reference into this Prospectus in its
entirety.

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SHARES OF THE TRUST ARE NOT BANK DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED OR OTHERWISE SUPPORTED BY, NBD BANK, ITS PARENT COMPANY
OR ITS AFFILIATES, AND ARE NOT FEDERALLY INSURED OR GUARANTEED BY THE U.S.
GOVERNMENT, FEDERAL DEPOSIT INSURANCE CORPORATION, OR ANY GOVERNMENTAL AGENCY.
INVESTMENT IN THE TRUST INVOLVES RISKS, INCLUDING THE LOSS OF PRINCIPAL. THERE
CAN BE NO ASSURANCE THAT THE PORTFOLIOS WILL BE ABLE TO MAINTAIN A CONSTANT
NET ASSET VALUE OF $1.00 PER SHARE.

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.
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INVESTMENT ADVISER:

NBD Bank

<PAGE>

EXPENSE SUMMARY

The Trust currently offers Class I shares (formerly known as
"Institutional Shares") and Class A shares (formerly known as "Retail Shares")
in each of the Woodward Money Market Fund ("Money Market Portfolio"), Woodward
Government Fund ("Government Portfolio"), Woodward Treasury Money Market Fund
("Treasury Portfolio"), Woodward Tax-Exempt Money Market Fund ("Tax-Exempt
Portfolio") and Woodward Michigan Tax-Exempt Money Market Fund ("Michigan
Portfolio"). Class I shares are sold primarily to NBD and its affiliated and
correspondent banks acting on behalf of their respective customers. Class A
shares are sold to the general public primarily through financial institutions
such as banks, brokers and dealers. Class I shares are offered in a separate
Prospectus. Investors should call (800) 688-3350, a Co-Distributor or their
financial institutions if they would like to obtain more information
concerning the Class I shares and/or Class A shares of the Portfolios. The
following table is provided to assist in understanding the various costs and
expenses that an investor will indirectly incur as a beneficial owner of Class
A shares in each of the Portfolios.

<TABLE>
<CAPTION>
Michigan
Money Govern- Tax- Tax-
Market ment Treasury Exempt Exempt
Portfolio Portfolio Portfolio Portfolio Portfolio
--------- --------- --------- --------- ---------

<S> <C> <C> <C> <C> <C>
Shareholder Transaction
Expenses
Maximum Sales Load
Imposed on Purchases
(as a percentage of
offering price)............. None None None None None
Sales Load Imposed on
Reinvested Dividends....... None None None None None
Deferred Sales Load........ None None None None None
Redemption Fee............. None None None None None
Exchange Fee............... None None None None None

Annual Operating Expenses
(as a percentage of average
net assets)
Management Fees............... .44% .45% .45% .45% .50%
12b-1 Fees.................... .025% .007% .024% .017% .079%
Shareholder Servicing
Fees(2)..................... .25% .25% .25% .25% .25%
Other Expenses(3)
(before fee waivers
and/or expense
reimbursements)............. .043% .05% .062% .057% .176%
(after fee waivers
and/or expense
reimbursements)............. .035% .043% .026% .033% (.079)%
Total Operating Expenses
(before fee waivers
and/or expense
reimbursements)............ .758% .757% .786% .774% 1.005%
(after fee waivers
and/or expense
reimbursements)............ .75% .75% .75% .75% .75%
<FN>
- --------------------

1. The expenses for each Portfolio have been restated to reflect
current expenses.

2. The Trust has adopted a Shareholder Servicing Plan pursuant to
which the Trust may enter into agreements with institutions under which they
will render shareholder administrative support services for their customers
who beneficially own Class A shares in return for a fee of up to .25% per
annum of the value of such shares ("Servicing Fees"). For further information,

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<PAGE>

see "Shareholder Servicing Plan" and "Investment Adviser, Custodian
and Transfer Agent" under the heading "Management" in this Prospectus.

3. Credits or charges not reflected in the expense table may be
incurred directly by customers of financial institutions in connection with an
investment in the Portfolios.
- -------------------------
</TABLE>

Michigan
Money Govern- Tax- Tax-
Market ment Treasury Exempt Exempt
Portfolio Portfolio Portfolio Portfolio Portfolio
--------- --------- --------- --------- ---------
Example
You would pay the following
expenses on a $1,000 investment
assuming:
(1) a 5% annual return and
(2) redemption at the end of
each time period:
<S> <C> <C> <C> <C> <C>
One Year:................ $ 7.68 $ 7.68 $ 7.68 $ 7.68 $ 7.68
Three Years:............. $24.05 $24.05 $24.05 $24.05 $24.05
Five Years:.............. $41.83 $41.83 $41.83 $41.83 $41.83
Ten Years:............... $93.29 $93.29 $93.29 $93.29 $93.29
</TABLE>

THE FOREGOING SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES OR RATES OF RETURN. ACTUAL EXPENSES OR RATE OF RETURN MAY BE GREATER
OR LESSER THAN THOSE SHOWN.

The example demonstrates the projected dollar amount of total
cumulative expenses that would be incurred over various periods with respect
to a hypothetical investment in Class A shares in each of the Portfolios,
based upon payment of operating expenses at the respective levels set forth
in the expense table. For more complete descriptions of Portfolio expenses,
see "Investment Adviser, Custodian and Transfer Agent," "Sponsors and
Co-Distributors," "Shareholder Servicing Plan," "Service and Distribution
Plan" and "Trust Expenses" under the heading "Management" in this Prospectus
and the financial statements and related notes contained in the Statement
of Additional Information.

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<PAGE>

BACKGROUND

Shares of each Portfolio have been classified into two separate
classes of shares -- Class I shares and Class A shares. Only the Class A
shares are offered pursuant to this Prospectus. Until April 15, 1996, Class I
shares and Class A shares represented equal pro rata interests in a Portfolio.
As of such date, the Trust implemented its Shareholder Servicing Plan with
respect to Class A shares only and began to allocate Servicing Fees
attributable to such shares exclusively to them. See "Shareholder Servicing
Plan" and "Investment Adviser, Custodian and Transfer Agent" under
"Management," and see "Dividends and Distributions" and "Other Information"
for a description of the impact that this may have on holders of Class A
shares.

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<PAGE>

FINANCIAL HIGHLIGHTS

The tables below provide supplementary information to the Portfolios'
financial statements contained in their Statement of Additional Information
and set forth certain information concerning the historic investment results
of Portfolio shares. They present a per share analysis of net investment
income and distributions from net investment income for each of the
Portfolios. The tables have been derived from the Portfolios' financial
statements which have been audited by Arthur Andersen, LLP, the Trust's
independent public accountants, whose report thereon is contained in the
Statement of Additional Information along with the financial statements. The
financial data included in these tables should be read in conjunction with the
financial statements and related notes included in the Statement of Additional
Information. Further information about the performance of the Portfolios is
available in annual reports to shareholders. The Statement of Additional
Information and annual reports to shareholders may be obtained from the Trust
free of charge by calling 1 (800) 688-3350.

<TABLE>
<CAPTION>
Money Market Portfolio
January 4,
1988
(Commence-
Year Year Year Year Year Year Year ment of
Ended Ended Ended Ended Ended Ended Ended Operations)
Decem- Decem- Decem- Decem- Decem- Decem- Decem- to Decem-
ber 31, ber 31, ber 31, ber 31, ber 31, ber 31, ber 31, ber 31,
1995 1994 1993 1992 1991 1990 1989 1988
------- ------- ------- ------- ------- ------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period .... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- -------- -------- --------
Income From Investment
Operations:
Net Investment Income .. $ 0.0549 $ 0.0378 $ 0.0281 $ 0.0347 $ 0.0579 $ 0.0784 $ 0.0877 $ 0.0730
-------- -------- -------- -------- -------- -------- -------- --------
Total From Investment
Operations ............ $ 0.0549 $ 0.0378 $ 0.0281 $ 0.0347 $ 0.0579 $ 0.0784 $ 0.0877 $ 0.0730
-------- -------- -------- -------- -------- -------- -------- --------
Less Distributions:
Dividends From Net
Investment Income ... $(0.0549) $(0.0378) $(0.0281) $(0.0347) $(0.0579) $(0.0784) $(0.0877) $(0.0730)
-------- -------- -------- -------- -------- -------- -------- --------
Total Distributions ... $(0.0549) $(0.0378) $(0.0281) $(0.0347) $(0.0579) $(0.0784) $(0.0877) $(0.0730)
-------- -------- -------- -------- -------- -------- -------- --------
Net Asset Value, End of
Period ................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ======== ======== ========

Total Return ............ 5.63% 3.86% 2.85% 3.58% 5.95% 8.14% 9.19% 7.55%(a)
Ratios/Supplemental Data
Net Assets, End of
Period (in 000's) .... $1,639,695 $1,323,040 $1,326,693 $1,095,354 $775,521 $717,516 $446,466 $250,182
Ratio of Expenses to
Average Net Assets ... 0.51% 0.47% 0.49% 0.52% 0.50% 0.50% 0.51% 0.49%(a)
Ratio of Net Investment
Income to Average Net
Assets ............... 5.49% 3.78% 2.81% 3.47% 5.79% 7.84% 8.77% 7.30%(a)
<FN>
- ---------------------

(a) Total returns and ratios are annualized for periods less than one
year for comparability purposes. Actual annual returns and ratios may be less
than or greater than those shown.
</TABLE>

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<PAGE>

<TABLE>
<CAPTION>
Government Portfolio
January 4,
1988
(Commence-
Year Year Year Year Year Year Year ment of
Ended Ended Ended Ended Ended Ended Ended Operations)
Decem- Decem- Decem- Decem- Decem- Decem- Decem- to Decem-
ber 31, ber 31, ber 31, ber 31, ber 31, ber 31, ber 31, ber 31,
1995 1994 1993 1992 1991 1990 1989 1988
------- ------- ------- ------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period ............... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- -------- -------- --------
Income From Investment
Operations:
Net Investment Income ... $ 0.0544 $ 0.0372 $ 0.0277 $ 0.0357 $ 0.0564 $ 0.0769 $ 0.0862 $ 0.0730
-------- -------- -------- -------- -------- -------- -------- --------
Total From Investment
Operations ............ $ 0.0544 $ 0.0372 $ 0.0277 $ 0.0357 $ 0.0564 $ 0.0769 $ 0.0862 $ 0.0730
-------- -------- -------- -------- -------- -------- -------- --------
Less Distributions:
Dividends From Net
Investment Income ...... $(0.0544) $(0.0372) $(0.0277) $(0.0357) $(0.0564) $(0.0769) $(0.0862) $(0.0730)
-------- -------- -------- -------- -------- -------- -------- --------
Total Distributions ..... $(0.0544) $(0.0372) $(0.0277) $(0.0357) $(0.0564) $(0.0769) $(0.0862) $(0.0730)
-------- -------- -------- -------- -------- -------- -------- --------
Net Asset Value, End of
Period .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ======== ======== ========

Total Return ............. 5.57% 3.77% 2.81% 3.63% 5.79% 7.97% 8.98% 7.55%(a)
Ratios/Supplemental Data
Net Assets, End of
Period (in 000's) ...... $474,377 $421,208 $346,665 $261,614 $288,369 $235,858 $196,095 $106,194
Ratio of Expenses to
Average Net Assets ..... 0.51% 0.51% 0.51% 0.51% 0.50% 0.49% 0.50% 0.50%(a)
Ratio of Net Investment
Income to Average Net
Assets ................ 5.44% 3.72% 2.77% 3.57% 5.64% 7.69% 8.62% 7.30%(a)
<FN>
- ---------------------

(a) Total returns and ratios are annualized for periods less than one
year for comparability purposes. Actual annual returns and ratios may be less
than or greater than those shown.
</TABLE>

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<PAGE>

Treasury Portfolio

Year Ended Year Ended Year Ended
December 31, December 31, December 31,
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of
Period ......................... $ 1.00 $ 1.00 $ 1.00
-------- -------- --------
Income from Investment
Operations:
Net Investment Income .......... $ 0.0539 $ 0.0370 $ 0.0273
-------- -------- --------
Total From Investment Operations $ 0.0539 $ 0.0370 $ 0.0273
-------- -------- --------
Less Distributions:
Dividends From Net Investment
Income ....................... $(0.0539) $(0.0370) $(0.0273)
-------- -------- --------
Total Distributions ............ $(0.0539) $(0.0370) $(0.0273)
-------- -------- --------
Net Asset Value, End of Period ... $ 1.00 $ 1.00 $ 1.00
======== ======== ========

Total Return ..................... 5.53% 3.77% 2.77%
Ratios/Supplemental Data
Net Assets, End of
Period (in 000's) ............ $927,696 $785,694 $854,873
Ratio of Expenses to Average
Net Assets ................... 0.53% 0.50% 0.50%
Ratio of Net Investment
Income to Average Net Assets . 5.39% 3.70% 2.73%
<FN>
- ---------------------

(a) Total returns and ratios are annualized for periods less than one
year for comparability purposes. Actual annual returns and ratios may be less
than or greater than those shown.
</TABLE>

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<PAGE>

Tax-Exempt Portfolio
January 4,
1988
(Commence-
Year Year Year Year Year Year Year ment of
Ended Ended Ended Ended Ended Ended Ended Operations)
Decem- Decem- Decem- Decem- Decem- Decem- Decem- to Decem-
ber 31, ber 31, ber 31, ber 31, ber 31, ber 31, ber 31, ber 31,
1995 1994 1993 1992 1991 1990 1989 1988
------- ------- ------- ------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period ............... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- -------- -------- --------
Income From Investment
Operations:
Net Investment Income ... $ 0.0335 $ 0.0242 $ 0.0196 $ 0.0264 $ 0.0422 $ 0.0553 $ 0.0595 $ 0.0498
-------- -------- -------- -------- -------- -------- -------- --------
Total From Investment
Operations ............. $ 0.0335 $ 0.0242 $ 0.0196 $ 0.0264 $ 0.0422 $ 0.0553 $ 0.0595 $ 0.0498
-------- -------- -------- -------- -------- -------- -------- --------
Less Distributions:
Dividends From Net
Investment Income ..... $(0.0335) $(0.0242) $(0.0196) $(0.0264) $(0.0422) $(0.0553) $(0.0595) $(0.0498)
-------- -------- -------- -------- -------- -------- -------- --------
Total Distributions .... $(0.0335) $(0.0242) $(0.0196) $(0.0264) $(0.0422) $(0.0553) $(0.0595) $(0.0498)
-------- -------- -------- -------- -------- -------- -------- --------
Net Asset Value, End of
Period ................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ======== ======== ========

Total Return ............. 3.41% 2.45% 1.98% 2.70% 4.30% 5.67% 6.11% 5.10%(a)
Ratios/Supplemental Data
Net Assets, End of
Period (in 000's) ..... $564,413 $550,736 $498,706 $379,431 $227,808 $235,451 $210,028 $177,645
Ratio of Expenses to
Average Net Assets .... 0.53% 0.51% 0.51% 0.53% 0.52% 0.52% 0.51% 0.49%(a)
Ratio of Net Investment
Income to Average Net
Assets ................ 3.35% 2.42% 1.96% 2.64% 4.22% 5.53% 5.95% 4.98%(a)
<FN>
- ---------------------

(a) Total returns and ratios are annualized for periods less than one
year for comparability purposes. Actual annual returns and ratios may be less
than or greater than those shown.
</TABLE>

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<PAGE>

Michigan Portfolio
January 23,
1991
(Commencement
of
Year Year Year Year Operations)
Ended Ended Ended Ended to
Decem- Decem- Decem- Decem- Decem-
ber 31, ber 31, ber 31, ber 31, ber 31,
1995 1994 1993 1992 1991
------- ------- ------- ------- --------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period ............... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- ---------
Income From Investment
Operations:
Net Investment Income ... $ 0.0329 $ 0.0235 $ 0.0181 $ 0.0237 $ 0.0353
--------- --------- --------- --------- ---------
Total From Investment
Operations ............. $ 0.0329 $ 0.0235 $ 0.0181 $ 0.0237 $ 0.0353
--------- --------- --------- --------- ---------
Less Distributions:
Dividends From Net
Investment Income ...... $ (0.0329) $ (0.0235) $ (0.0181) $ (0.0237) $ (0.0353)
--------- --------- --------- --------- ---------
Total Distributions ..... $ (0.0329) $ (0.0235) $ (0.0181) $ (0.0237) $ (0.0353)
--------- --------- --------- --------- ---------
Net Asset Value, End of
Period .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ========= =========

Total Return ............. 3.32% 2.38% 1.83% 2.40% 3.83%(a)
Ratios/Supplemental Data
Net Assets, End of
Period (in 000's) ..... $ 122,057 $ 78,640 $ 52,557 $ 52,960 $ 38,885
Ratio of Expenses to
Average Net Assets .... 0.69% 0.67% 0.65% 0.64% 0.65%(a)
Ratio of Net Investment
Income to Average Net
Assets ................ 3.30% 2.35% 1.81% 2.37% 3.77%(a)
Ratio of Expenses to
Average Net Assets
Without Fee Waiver .... 0.76% 0.75% -- -- --
Ratio of Net Investment
Income to Average
Net Assets Without
Fee Waiver ............ 3.23% 2.28% -- -- --
<FN>
- ---------------------

(a) Total returns and ratios are annualized for periods less than one
year for comparability purposes. Actual annual returns and ratios may be less
than or greater than those shown.
</TABLE>

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<PAGE>

INTRODUCTION

The Trust is an open-end, management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"). The
Trust currently consists of seventeen investment portfolios, each of which
consists of a separate pool of assets with separate investment objective and
policies. However, only the Class A shares of the Money Market, Government,
Treasury, Tax-Exempt and Michigan Portfolios are offered pursuant to this
Prospectus. Under the 1940 Act, the Michigan Portfolio is classified as a
non-diversified investment portfolio and the other Portfolios are classified
as diversified investment portfolios.

PROPOSED REORGANIZATION

On December 1, 1995, NBD's parent, NBD Bancorp, Inc., merged with
First Chicago Corporation and the combined company was renamed First Chicago
NBD Corporation ("FCNBD"). An affiliate of FCNBD serves as the investment
adviser to Prairie Funds, Prairie Institutional Funds, Prairie Intermediate
Bond Fund and Prairie Municipal Bond Fund, Inc. (collectively, "Prairie").
FCNBD has recommended to both the Board of Trustees of the Trust and the Board
of Trustees/Directors of Prairie that the portfolios of the Trust and Prairie
be reorganized as described below. In light of this recommendation and after
considering various matters, the Trust's Board and Prairie's Board have
authorized certain Agreements and Plans of Reorganization (the
"Reorganization").

A Special Meeting of the Shareholders of each Prairie portfolio is
expected to be held in June 1996 to consider the approval or disapproval of
the Reorganization. The Reorganization generally provides for the transfer of
substantially all of each Prairie portfolio's assets and liabilities to a
corresponding portfolio of the Trust in exchange for such portfolio's shares.

In connection with the proposed Reorganization, a Special Meeting of
the Shareholders of the Trust is expected to be held in June 1996 to consider
proposals relating to investment policies, service agreements, the election of
two new trustees, and other matters. Proxy materials describing these matters
will be mailed to the Trust's shareholders of record for the meeting.

INVESTMENT OBJECTIVES, POLICIES AND RISK FACTORS

The investment objective of a Portfolio may not be changed without
approval of the holders of at least a majority of the outstanding shares of
such Portfolio. See "Other Information." Except as noted below under
"Investment Limitations," a Portfolio's investment policies may be changed
without a vote of shareholders. There can be no assurance that a Portfolio
will achieve its objective.

Money Market Portfolio, Government Portfolio and Treasury Portfolio

The investment objective of the Money Market Portfolio, Government
Portfolio and Treasury Portfolio is to provide a high level of current income
consistent with the preservation of capital and liquidity.

In seeking to achieve its investment objective, the Money Market
Portfolio invests in the following high quality "money market" instruments:

(1) Obligations issued or guaranteed as to payment of
principal and interest by the U.S. Government, its agencies or
instrumentalities ("U.S. Government Obligations");

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<PAGE>

(2) U.S. dollar denominated obligations issued or guaranteed
by the government of Canada, a Province of Canada, or an
instrumentality or political subdivision thereof;

(3) Certificates of deposit, bankers' acceptances and time
deposits of U.S. banks or other U.S. financial institutions (including
foreign branches of such banks and institutions) having total assets
in excess of $1 billion and which are members of the Federal Reserve
System or the Federal Deposit Insurance Corporation ("FDIC");

(4) Certificates of deposit, bankers' acceptances and time
deposits of foreign banks and U.S. branches of foreign banks having
assets in excess of the equivalent of $1 billion;

(5) Commercial paper, other short term obligations and
variable rate master demand notes, bonds, debentures and notes; and

(6) Repurchase agreements relating to the above instruments.

In seeking to achieve its investment objective, the Government
Portfolio invests in:

(1) U.S. Government Obligations; and

(2) Repurchase agreements relating to the above obligations.

In seeking to achieve its investment objective, the Treasury Portfolio
invests in:

(1) U.S. Treasury bills, notes, and direct U.S. Treasury
obligations having remaining maturities of 13 months or less; and

(2) Repurchase agreements relating to direct U.S. Treasury
obligations.

In accordance with current SEC regulations, the Money Market,
Government and Treasury Portfolios will limit their respective purchases of
the securities of any one issuer (other than U.S. Government Obligations and
repurchase agreements collateralized by such obligations) to 5% of their
respective total assets, except that each Portfolio may invest more than 5%
but no more than 25% of its total assets in "First Tier Securities" of one
issuer for a period of up to three business days. First Tier Securities
include "eligible securities" (defined below under "Policies Applicable to all
Portfolios") that (i) if rated by more than one nationally recognized
statistical rating organization ("Rating Agency"), are rated (at the time of
purchase) by two or more Rating Agencies in the highest rating category for
such securities, (ii) if rated by only one Rating Agency, are rated by such
Rating Agency in its highest rating category for such securities, (iii) have
no short term rating but have been issued by an issuer that has other
outstanding short term obligations that have been rated in accordance with (i)
or (ii) above and are comparable in priority and security to such securities,
and (iv) are certain unrated securities that have been determined by NBD to be
of comparable quality to such securities pursuant to guidelines established by
the Trust's Board of Trustees. In addition, the Money Market and Government
Portfolios will limit their investments in "Second Tier Securities" (which are
eligible securities other than First Tier Securities) to 5% of their
respective total assets, with investments in any one issuer of such securities
being limited to no more than 1% of their respective total assets or $1
million, whichever is greater. Because of these limitations, the Money Market,
Government and Treasury Portfolios will not be able to purchase lower rated or
longer term securities from which a higher income, although a greater degree
of risk, might be derived.

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<PAGE>

Tax-Exempt Portfolio and Michigan Portfolio

The investment objective of the Tax-Exempt Portfolio is to provide a
high level of current interest income that is exempt from federal income taxes
consistent with the preservation of capital and liquidity. In seeking to
achieve its investment objective, the Portfolio invests in high quality debt
obligations issued by states, territories and possessions of the United
States, by the District of Columbia, and by their respective political
subdivisions, agencies, instrumentalities and authorities, the interest on
which is, in the opinion of bond counsel for the issuers, exempt from regular
federal income tax ("Municipal Securities").

The investment objective of the Michigan Portfolio is to provide a
high level of current interest income that is exempt from federal and State of
Michigan income taxes, consistent with the preservation of capital and
liquidity. In seeking to achieve its investment objective, the Portfolio
invests in high quality debt obligations issued by the State of Michigan, its
political subdivisions, municipalities, corporations and authorities, the
interest on which, in the opinion of bond counsel to the issuers, is exempt
from federal and State of Michigan income taxes ("Michigan Municipal
Securities") and in related repurchase agreements. Income earned by the
Portfolio with respect to repurchase agreements is not exempt from federal
income tax. To the extent acceptable Michigan Municipal Securities are at any
time unavailable for investment by the Portfolio, the Portfolio invests
primarily in other Municipal Securities the interest on which is, in the
opinion of bond counsel, exempt from federal, but not State of Michigan,
income tax.

Municipal Securities acquired by the Tax-Exempt Portfolio or Michigan
Portfolio include:

(1) Municipal bonds;

(2) Municipal notes;

(3) Variable rate demand notes;

(4) Tax-exempt commercial paper and floating rate
instruments; and

(5) Unrated notes, paper or other instruments that are of
comparable quality as determined by the Adviser under guidelines
established by the Trust's Board of Trustees. Where necessary to
assure that an instrument is of high quality, the Portfolios may only
purchase the instrument if the issuer's obligation to pay the
principal is backed by an unconditional bank letter of credit, line of
credit, guaranty or commitment to lend.

At least 80% of each of the Tax-Exempt Portfolio's and Michigan
Portfolio's total assets will be invested in Municipal Securities except in
extraordinary circumstances, such as when the Adviser believes that market
conditions indicate that a Portfolio should adopt a temporary defensive
position by holding uninvested cash or investing in taxable short term
securities ("Taxable Investments"), such as those in which the Money Market
Portfolio may invest. This policy is fundamental with respect to the
Tax-Exempt Portfolio and Michigan Portfolio and may not be changed without the
approval of the holders of a majority of a Portfolio's outstanding shares. In
addition, with respect to the Michigan Portfolio, at least 65% of its total
assets will be invested under normal market conditions in Michigan Municipal
Securities and the remainder may be invested in securities that are not
Michigan Municipal Securities and therefore may be subject to Michigan income
taxes. See "Taxes."

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Policies Applicable To All Portfolios

Each Portfolio will only purchase "eligible securities" that present
minimal credit risks as determined by the Adviser pursuant to guidelines
established by the Trust's Board of Trustees. Eligible securities include (i)
U.S. Government Obligations, (ii) securities that are rated (at the time of
purchase) by Rating Agencies in the two highest rating categories for such
securities, and (iii) certain securities that are not so rated but are of
comparable quality to rated eligible securities as determined by the Adviser.
See "Investment Objectives, Policies and Risk Factors" in the Statement of
Additional Information for a more complete description of eligible securities.
A description of ratings is contained in the Statement of Additional
Information.

Each Portfolio is managed so that the average maturity of all
instruments in the Portfolio (on a dollar-weighted basis) will not exceed 90
days. In no event will the Portfolios purchase any securities which are deemed
to mature more than 13 months from the date of purchase (except for certain
variable and floating rate instruments and securities underlying repurchase
agreements and collateral underlying loans of portfolio securities).

OTHER INVESTMENT POLICIES

Bank Obligations

Domestic and foreign bank obligations in which the Money Market
Portfolio may invest include certificates of deposit, bankers' acceptances and
fixed time deposits. Total assets of a bank are determined on the basis of the
bank's most recent annual financial statements.

Obligations issued or guaranteed by foreign branches of U.S. banks
(commonly known as "Eurodollar" obligations) or U.S. branches of foreign banks
(commonly known as "Yankee dollar" obligations) may be general obligations of
the parent bank or obligations only of the issuing branch. Where the
obligation is only that of the issuing branch, the parent bank has no legal
duty to pay such obligation. Such obligations would thus be subject to risks
comparable to those which would be present if the issuing branch were a
separate bank. The Money Market Portfolio will not invest in a Eurodollar
obligation if upon making such investment the total of Eurodollar obligations
which are not general obligations of domestic parent banks would thereby
exceed 25% of the total assets of the Money Market Portfolio.

Obligations of foreign issuers may involve risks that are different
than those of obligations of domestic issuers. These risks include unfavorable
political and economic developments, possible imposition of withholding taxes
on interest income, possible seizure or naturalization of foreign deposits,
possible establishment of exchange controls, or adoption of other foreign
governmental restrictions which might adversely affect the payment of
principal and interest on such obligations. In addition, foreign branches of
U.S. banks and foreign banks may be subject to less stringent reserve
requirements and to different accounting, auditing, reporting, and
recordkeeping standards than those applicable to domestic branches of U.S.
banks and, generally, there may be less publicly available information
regarding such issuers. The Trust could also encounter difficulties in
obtaining or enforcing a judgment against a foreign issuer (including a
foreign branch of a U.S. bank).

Commercial Paper

Commercial paper issued by corporations and other institutions,
including variable rate notes and other short term corporate obligations, must
be rated in one of the two highest categories by at least two Rating Agencies,
or if not

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rated, must have been independently determined by the Adviser to be of
comparable quality.

Government Obligations

The Money Market, Government and Treasury Portfolios may invest in
direct obligations of the U.S. Treasury consisting of bills, notes and bonds.
The Money Market and Government Portfolios may also invest in other
obligations issued or guaranteed by the U.S. Government, its agencies and
instrumentalities. Obligations of certain agencies and instrumentalities, such
as the Government National Mortgage Association, are supported by the full
faith and credit of the U.S. Treasury; others, such as those of the
Export-Import Bank of the United States, are supported by the right of the
issuer to borrow from the Treasury; others, such as those of the Federal
National Mortgage Association, are supported by the discretionary authority of
the U.S. Government to purchase the agency's obligations; still others, such
as those of the Student Loan Marketing Association, are supported only by the
credit of the instrumentality. No assurance can be given that the U.S.
Government would provide financial support to U.S. Government-sponsored
instrumentalities if it is not obligated to do so by law. Some of these
investments may be variable or floating rate instruments.

Variable and Floating Rate Obligations

Each Portfolio may purchase rated and unrated variable and floating
rate obligations which may have stated maturities in excess of 13 months but
will, in any event, permit a Portfolio to demand payment of the principal of
the instrument at least once every 13 months on not more than thirty days'
notice (unless the instrument is a U.S. Government Obligation), provided that
the demand feature may be sold, transferred, or assigned only with the
underlying instrument involved. Such instruments may include variable rate
demand notes which are unsecured instruments that permit the indebtedness
thereunder to vary in addition to providing for periodic adjustments in the
interest rate. The absence of an active secondary market with respect to
particular variable and floating rate instruments could make it difficult for
a Portfolio to dispose of instruments if the issuer defaulted on its payment
obligation or during periods that the Portfolio is not entitled to exercise
its demand rights, and the Portfolio could, for these or other reasons, suffer
a loss with respect to such instruments. Variable and floating rate
instruments held by a Portfolio will be subject to the Portfolio's 10%
limitation on illiquid investments when the Portfolio may not demand payment
of the principal amount within seven days and a reliable trading market is
absent.

Repurchase and Reverse Repurchase Agreements

Each Portfolio may agree to purchase portfolio securities which it may
otherwise purchase from financial institutions subject to the seller's
agreement to repurchase them at a mutually agreed-upon date and price
("repurchase agreements"). No Portfolio will enter into repurchase agreements
with the Adviser, Co-Distributors, or any of their affiliates. Although the
securities subject to repurchase agreements may bear maturities exceeding 13
months provided the repurchase agreement itself matures in one year or less,
the Portfolios generally intend to enter into repurchase agreements which
terminate within seven days after notice by the Portfolios. The seller under a
repurchase agreement will be required to maintain the value of the securities
subject to the agreement at not less than the repurchase price, marked to
market daily. Default by the seller would, however, expose a Portfolio to
possible loss because of adverse market action or delay in connection with the
disposition of the underlying obligations.

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Each Portfolio may also borrow funds for temporary purposes by
entering into reverse repurchase agreements. Pursuant to such agreements the
Portfolios will sell portfolio securities to financial institutions such as
banks and broker-dealers and agree to repurchase them at a particular date and
price. Reverse repurchase agreements involve the risk that the market value of
the securities sold by a Portfolio may decline below the price of the
securities it is obligated to repurchase. Whenever a Portfolio enters into a
reverse repurchase agreement, it will place in a segregated custodial account
liquid assets equal to the repurchase price marked to market daily (including
accrued interest) and will subsequently monitor the account to ensure such
equivalent value is maintained.

Lending Portfolio Securities

To increase income or offset expenses, each Portfolio may lend its
portfolio securities to financial institutions such as banks and
broker-dealers in accordance with the investment limitations described below.
Agreements would require that the loans be continuously secured by collateral
equal at all times in value to at least the market value of the securities
loaned plus accrued interest. Collateral for such loans may include cash or
securities of the U.S. Government, its agencies or instrumentalities, some of
which may bear maturities exceeding 13 months. Such loans will not be made if,
as a result, the aggregate of all outstanding loans of a particular Portfolio
exceeds one-third of the value of its total assets. Loans of securities
involve risks of delay in receiving additional collateral or in recovering the
securities loaned or possibly loss of rights in the collateral should the
borrower of the securities become insolvent. In the event a Portfolio is
unable to recover the securities loaned in a particular transaction, it will
promptly sell any collateral which bears a maturity exceeding 13 months. Loans
will be made only to borrowers that provide the requisite collateral comprised
of liquid assets and when, in the Adviser's judgment, the income to be earned
from the loan justifies the attendant risks.

When-Issued Securities

Each Portfolio may purchase portfolio securities on a "when-issued"
basis and may purchase or sell such securities on a "forward commitment"
basis. These transactions involve commitment by a Portfolio to purchase or
sell particular securities with payment and delivery taking place in the
future, beyond the normal settlement date, at a stated price and yield.
Securities purchased on a when-issued basis or forward commitment basis
involve a risk of loss if the value of the security to be purchased declines
prior to the settlement date, or if the value of the security to be sold
increases prior to the settlement date. When a Portfolio enters into such
transactions, the Custodian will maintain in a segregated account cash or
liquid portfolio securities equal to the amount of the commitment. The
Portfolios do not earn income with respect to these transactions until the
subject securities are delivered to the Portfolios. The Portfolios do not
intend to purchase when-issued securities for speculative purposes but only
for the purposes of acquiring portfolio securities. Each Portfolio's
when-issued purchases and forward commitments are not expected to exceed 25%
of the value of its total assets absent unusual market conditions.

Municipal and Related Securities

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user of the facility being financed. Private activity bonds (i.e. bonds issued
by industrial development authorities) are in most cases revenue securities
and are not payable from the unrestricted revenues of the issuer. Private
activity bonds are included within the term "Municipal Securities" only if the
interest paid thereon is exempt from regular federal income tax and not
treated as a specific tax preference item under the federal alternative
minimum tax. See "Taxes." Consequently, the credit quality of a private
activity bond is usually directly related to the credit standing of the
private user of the facility involved. Notes are short-term instruments which
are obligations of the issuing municipalities or agencies and are sold in
anticipation of a bond sale, collection of taxes or receipt of other revenues.
Moral obligation bonds are normally issued by special purpose public
authorities. If the issuer of a moral obligation bond is unable to meet its
debt service obligations from current revenues, it may draw on a reserve fund,
the restoration of which is a moral commitment but not a legal obligation of
the state or municipality which created the issuer. Municipal Securities also
include municipal lease/purchase agreements which are similar to installment
purchase contracts for property or equipment issued by municipalities.
Municipal lease/purchase agreements may be subject to the Portfolio's 10%
limitation on illiquid investments. See "Restricted Securities."

The Michigan Portfolio may purchase from financial institutions
participation interests in Municipal Securities. A participation interest
gives the Portfolio an undivided interest in the Municipal Security in the
proportion that the Portfolio's participation interest bears to the total
principal amount of the Municipal Security. These instruments may have fixed,
floating or variable rates of interest, with remaining maturities of 13 months
or less as determined in accordance with SEC regulations (although the
securities held by the financial institution may have longer maturities). If
the participation interest is unrated, or has been given a rating below that
which otherwise is permissible for purchase by the Portfolio, the
participation interest will be backed by an irrevocable letter of credit or
guarantee of a bank that the Trust's Board of Trustees has determined meets
the prescribed quality standards for banks set forth below, or the payment
obligation otherwise will be collateralized by U.S. Government securities. For
certain participation interests, the Portfolio will have the right to demand
payment, on not more than seven days' notice, for all or any part of the
Portfolio's participation interest in the Municipal Security, plus accrued
interest. As to these instruments, the Portfolio intends to exercise its right
to demand payment only upon a default under the terms of the Municipal
Security, as needed to provide liquidity to meet redemptions, or to maintain
or improve the quality of its investment portfolio. Participation interests
that do not have this demand feature will be considered illiquid investments
subject to the 10% limitation.

The Tax-Exempt and Michigan Portfolios may acquire "stand-by
commitments" with respect to Municipal Securities they hold. Under a stand-by
commitment, a dealer agrees to purchase at the Portfolio's option specified
Municipal Securities at a specified price. The acquisition of a stand-by
commitment may increase the cost, and thereby reduce the yield of the
Municipal Securities to which the commitment relates. The Portfolios will
acquire stand-by commitments solely to facilitate portfolio liquidity and do
not intend to exercise their rights thereunder for trading purposes.

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state or states to a greater extent than would be the case if its assets were
not so concentrated. If any state or political subdivision thereof were to
suffer serious financial difficulties jeopardizing its ability to pay its
obligations, the marketability of such obligations held by the Portfolio, and
consequently its net asset value, could be adversely affected.

Opinions relating to the validity of Municipal Securities and to the
exemption of interest thereon from federal income tax (and, with respect to
Michigan Municipal Securities, Michigan income taxes) are rendered by bond
counsel to the respective issuers at the time of issuance. Neither the Trust
nor its Adviser will review the proceedings relating to the issuance of
Municipal Securities or the bases for such opinions.

Special Risk Considerations Applicable to the Michigan Portfolio

The Michigan Portfolio will under normal market conditions consist of
Michigan Municipal Securities to the extent of 65% or more of its total
assets. This concentration in securities issued by governmental units of only
one state exposes the Portfolio to risk of loss greater than that of a more
diversified portfolio holding securities issued by governmental units of
different states and different regions of the country.

Moreover, the economy of the State of Michigan is heavily dependent
upon the automobile manufacturing industry. This industry is highly cyclical.
This factor affects the revenue streams of the State of Michigan and its
political subdivisions because it impacts tax sources, particularly sales
taxes, income taxes, and Michigan single business taxes.

A state economy during a recessionary cycle would also, as a separate
matter, adversely affect the capacity of users of facilities constructed or
acquired through the proceeds of private activity bonds or other "revenue"
securities to make periodic payments for the use of those facilities.

The heavy concentration of the Michigan Portfolio in Michigan
Municipal Securities and the cyclical nature of the economy of the State of
Michigan may adversely affect the liquidity of the Portfolio.

In 1993 and 1994, Michigan adopted complex statutory and
constitutional changes which, among several other changes in tax methods and
rates, have the effect of imposing limits on annual assessment increases and
of transferring a significant part of the operating cost of public education
from locally based property tax sources to state based sources, including
increased sales tax. These changes will affect state and local revenues of
Michigan governmental units in future years in differing ways, not all of
which can be presently known with certainty.

Guaranteed Investment Contracts

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of the issuer. The Portfolio will only purchase GICs from issuers which meet
quality and credit standards established by the Adviser. Generally, GICs are
not assignable or transferable without the permission of the issuing insurance
companies, and an active secondary market in GICs does not currently exist.
Therefore, GICs are considered by the Portfolio to be illiquid investments
subject to the limitation on illiquid investments set forth below.

Restricted Securities

In accordance with its fundamental investment limitation described
below, each Portfolio will not invest more than 10% of the value of its total
assets in securities that are illiquid. Illiquid investments may include
securities having legal or contractual restrictions on resale or no readily
available market, GICs (in the case of the Money Market Portfolio), municipal
lease/purchase agreements (in the case of the Tax-Exempt and Michigan
Portfolios) and instruments (including repurchase agreements, variable and
floating rate instruments and time deposits) that do not provide for payment
to a Portfolio within seven days after notice. Securities that have legal or
contractual restrictions on resale but have a readily available market are not
deemed to be illiquid for purposes of this limitation.

Each Portfolio may purchase securities which are not registered under
the Securities Act of 1933, as amended (the "1933 Act"), but which can be sold
to "qualified institutional buyers" in accordance with Rule 144A under the
1933 Act. Any such security will not be considered to be illiquid so long as
it is determined by the Board of Trustees or the Adviser, acting under
guidelines approved and monitored by the Board, that an adequate trading
market exists for that security. This investment practice could have the
effect of increasing the level of illiquidity in a Portfolio during any period
that qualified institutional buyers become uninterested in purchasing these
restricted securities. The ability to sell to qualified institutional buyers
under Rule 144A is a recent development, and it is not possible to predict how
this market will develop. The Board of Trustees will carefully monitor any
investments by the Portfolios in these securities.

Securities of Other Investment Companies

Within the limits prescribed by the 1940 Act, each Portfolio may
invest in securities issued by other investment companies which invest in high
quality, short term debt securities and which determine their net asset value
per share based on the amortized cost or penny-rounding method. As a
shareholder of another investment company, a Portfolio would bear, along with
other shareholders, its pro rata portion of the other investment company's
expenses, including advisory fees. These expenses would be in addition to the
advisory and other expenses that a Portfolio bears directly in connection with
its own operations.

Miscellaneous

The Trust will give 30 days notice to investors of any material change
in any Portfolio's investment policies.

Investment Limitations

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investment limitations that cannot be changed without a vote of shareholders
are contained in the Statement of Additional Information under "Investment
Objectives, Policies and Risk Factors."

No Portfolio may:

1. Purchase the securities of issuers conducting their principal
business activity in the same industry if immediately after such purchase the
value of its investments in such industry would exceed 25% of the value of its
total assets, provided that (a) utilities will be divided according to their
services, wholly-owned finance companies will be considered to be in the
industries of their parents if their activities are primarily related to
financing the activities of their parents, the personal credit and business
credit businesses will be considered separate industries and (b) there is no
limitation with respect to or arising out of investments in Municipal
Securities in the case of the Tax-Exempt Portfolio and Michigan Portfolio,
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities, domestic bank obligations, or repurchase agreements by any
of the foregoing.

2. Borrow money, except from banks or through reverse repurchase
agreements, and except for temporary or emergency purposes and then only in
amounts not exceeding at any one time 20% of the value of its net assets at
the time of the borrowing. A Portfolio will not purchase securities while its
borrowings (including reverse repurchase agreements) in excess of 5% of its
net assets are outstanding. Borrowings will only be effected in conformity
with the requirements of the 1940 Act.

3. Make loans, except (i) through the purchase of debt obligations in
accordance with its investment objective and policies, (ii) through repurchase
agreements and (iii) through the lending of investment securities.

Each of the Money Market, Government and Tax-Exempt Portfolios may not
invest more than 10% of its total assets in illiquid investments, including
restricted securities, securities having no readily available market
quotations, non-negotiable time deposits maturing in more than seven days, and
repurchase agreements with maturities of more than seven days.

Each of the Treasury and Michigan Portfolios may not invest more than
10% of its total assets in illiquid investments. See "Restricted Securities"
above.

With respect to 75% of its assets, the Tax-Exempt Portfolio may not
invest more than 5% of its assets in the securities of any one issuer, except
U.S. Government obligations. In addition, the Tax-Exempt Portfolio may not
invest less than 80% of its net assets in securities the interest on which is
exempt from federal income tax, except during temporary defensive periods.

The Michigan Portfolio may not:

1. Invest less than 80% of its net assets in securities the interest
on which is exempt from federal income tax, except during temporary defensive
periods or periods of unusual market conditions. For purposes of this
investment limitation, securities the interest on which is treated as a
specific tax preference item under the federal alternative minimum tax are
considered taxable.

2. With respect to 50% of its total assets, invest more than 5% of
its assets in the securities of any one issuer, except U.S. Government
Obligations or securities of other regulated investment companies.

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with respect to a private activity bond that is backed only by the assets and
revenues of a nongovernmental user, a security is considered to be issued by
such non-governmental user; (ii) in certain circumstances, the guarantor of a
guaranteed security may also be considered to be an issuer in connection with
such guarantee; and (iii) U.S. Government Obligations (including securities
backed by the full faith and credit of the United States) are deemed to be
U.S. Government obligations for purposes of the 1940 Act.

Generally, a percentage limitation is satisfied at the time of
investment, a later increase or decrease in such percentage resulting from a
change in value of a Portfolio's securities will not constitute a violation of
the limitation for purposes of the 1940 Act.

PURCHASE OF SHARES

In General

Each Portfolio's shares are offered and sold on a continuous basis by
FoM and Essex, as the Trust's Co-Distributors. FoM is a registered
broker/dealer with offices at 100 Renaissance Center, 26th Floor, Detroit,
Michigan 48243. Essex is a registered broker/dealer with offices at 215
Gateway Road West, Napa, California 94558.

Class A shares are sold to the public primarily through financial
institutions such as banks, brokers and dealers. Investors may purchase Class
A shares directly in accordance with the procedures set forth below or through
procedures established by their financial institutions in connection with the
requirements of their accounts.

Financial institutions may impose different minimum investment and
other requirements on their customers and may charge additional fees in
connection with the establishment of accounts with the institutions and
purchase and redemption of Class A shares. Persons wishing to purchase Class A
shares through their accounts at an institution or a Co-Distributor should
contact the institution or Co-Distributor directly for appropriate
instructions and fee information. In addition, certain financial institutions
may enter into shareholder servicing agreements with the Trust whereby they
would perform various administrative support services for their customers who
are the beneficial owners of Class A shares in return for fees from the
Portfolio. See "Shareholder Servicing Plan" under the heading "Management" in
this Prospectus.

All shareholders of record will receive confirmations of share
purchases and redemptions. Class A shares purchased by institutions on behalf
of their customers will normally be held of record by them. Institutions will
record their customers' beneficial ownership of such shares and provide
regular account statements reflecting such beneficial ownership.

Institutions will be responsible for transmitting purchase and
redemption orders to FoM, Essex or NBD acting as transfer agent (the "Transfer
Agent") on a timely basis in accordance with the procedures stated below.

Purchase Procedures

The minimum initial investment is $500 for each Portfolio, except for
purchases through an institution whose clients have invested an aggregate
minimum of $500 or for investments made through a Co-Distributor's or an
institution's sweep privilege, the Trust's Automatic Investment Plan described
below or the Trust's IRA program described below. There is no minimum for
subsequent investments other than those made pursuant to the Automatic
Investment Plan. The Trust reserves the right to reject any purchase order.

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Orders for Class A shares may be placed by telephone (by calling
(800) 688-3350 (provided an investor has made the appropriate election in his
account application)) or by mail (by completing the account application which
accompanies this Prospectus and mailing the completed form and the payment for
shares to FoM, Essex or the Transfer Agent). Orders received by FoM, Essex or
the Transfer Agent for purchase accompanied by a check or other negotiable
draft will be accepted and executed at the time the net asset value is next
determined after conversion to federal funds, normally two Business Days after
receipt. All checks must be drawn on a bank located within the United States
and must be payable in U.S. dollars. Subsequent investments in an existing
account in a Portfolio may be made at any time by sending a check or money
order along with either (a) the detachable form that regularly accompanies the
Trust's confirmation of a prior transaction, (b) a subsequent order form which
may be obtained from the Trust, or (c) a letter stating the amount of the
investment, the name of the Portfolio and the account number in which the
investment is to be made. If any check used for investment in an account does
not clear, the order will be cancelled and notice thereof will be given; in
such event the account will be responsible for any loss to the Trust as well
as a $15 fee imposed by the Transfer Agent.

In order to afford the Trust a reasonable opportunity to invest funds
that are received on the same day, purchase orders received by a
Co-Distributor or the Transfer Agent with respect to the Tax-Exempt and
Michigan Portfolios by noon, Eastern time, and with respect to the Money
Market, Government and Treasury Portfolios, by 3:00 p.m., Eastern time, will
be executed the same day if NBD, acting as the Portfolios' custodian (the
"Custodian"), has received confirmation of receipt of a wire transfer of
federal funds prior to noon and 3:00 p.m., Eastern time, respectively, and the
shares purchased will thus be eligible for that day's dividend; and otherwise
such purchase will be effected, and dividends will begin to accrue, on the
following Business Day (as defined below). With the exception of the customers
of FoM, Class A shares may also be paid for by wiring federal funds to the
Transfer Agent, NBD Bank, ABA 072000326, for the account of The Woodward
Funds, Account Number GL 325612, and identifying the customer name and account
number. Before wiring payment, customers should notify the Transfer Agent by
calling (800) 688-3350.

If customers of FoM wire payment in federal funds, they should direct
payment to NBD Bank, ABA 072000326, for the Account of First of Michigan
Corporation re: The Woodward Funds, Account Number 059-41, and should identify
the customer name and account number. Before wiring payment, customers of FoM
should call FoM at (800) 544-8275 (outside Michigan) or (800) 852-7730 (within
Michigan).

The Trust will not accept payment in cash or third party checks for
the purchase of shares. Federal regulations require that each shareholder
provide a certified taxpayer identification number upon opening or reopening
an account. Applications without a taxpayer identification number will not be
accepted. See the account application for further information about this
requirement.

Net Asset Value and Pricing of Shares

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each Portfolio will be determined and its shares will be Priced as of such
Early Closing Time. Net asset value per Class A share of a Portfolio is
calculated by dividing the value of all securities and other assets belonging
to the Portfolio allocable to that Class A, less the liabilities charged to
that Class A, by the number of the outstanding shares of such Class A.

The assets in each Portfolio are valued based upon the amortized cost
method. Although the Trust seeks to maintain the net asset value per share of
the Portfolios at $1.00, there can be no assurance that the net asset value
will not vary.

REDEMPTION OF SHARES

In General

Redemption orders are effected at the net asset value next determined
after receipt by the Transfer Agent of a proper notice of redemption in
accordance with the procedures set forth below.

Redemption orders must be placed with or through the same financial
institution that placed the original purchase order. It is the responsibility
of the financial institutions to transmit redemption orders to the Transfer
Agent. Redemption proceeds are paid by check or credited to the investor's
account with his financial institution. Investors who purchased shares
directly from the Trust should follow the redemption procedures set forth
below.

Redemption Procedures

Written and telephone redemption requests will be effected on the same
Business Day if the request is received by the Transfer Agent with respect to
the Tax-Exempt and Michigan Portfolios before noon, Eastern time, and with
respect to the Money Market, Government and Treasury Portfolios, before 3:00
p.m. Eastern time. Redemption requests received after noon and 3:00 p.m.,
Eastern time, respectively, will normally be effected on the next Business Day
(and in any event within seven calendar days).

Shareholders of record may redeem shares in any amount by calling
(800) 688-3350 (provided they have made the appropriate election on the account
application) or by sending a written request to The Woodward Funds, c/o NBD
Bank, P.O. Box 7058, Troy, Michigan 48007-7058. Written requests to redeem
shares having a net asset value of more than $50,000 must have all signatures
of the registered owner(s) or their authorized legal representative guaranteed
by a commercial bank or trust company which is a member of the Federal Reserve
System or FDIC, a member firm of a national securities exchange or a savings
and loan association. A signature guaranteed by a savings bank or notarized by
a notary public is not acceptable. A signature guarantee will also be required
for redemption requests (in any amount) if the address of record for the
account has been changed within the previous 15 days or which requests that
the proceeds be paid to an account other than the one preauthorized on the
application, a payee or payees other than the registered owners of the
account, or an address other than the address of record. The Trust may require
additional supporting documents for redemptions made by corporations,
fiduciaries, executors, administrators, trustees, guardians and institutional
investors.

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to be genuine. In attempting to confirm that telephone instructions are
genuine, the Trust and its Transfer Agent will use such procedures as are
considered reasonable, including recording those instructions and requesting
information as to account registration (including, but not limited to, the
name in which an account is registered, the account number, or recent
transactions in the account). To the extent that the Trust and its Transfer
Agent fail to use reasonable procedures to verify the genuineness of telephone
instructions, they may be liable for such instructions that prove to be
fraudulent and unauthorized. In all other cases, shareholders will bear the
risk of loss for fraudulent telephone transactions.

Shareholders will not be credited with dividends on shares being
redeemed on the date of redemption. If a shareholder redeems all of his shares
in a Portfolio (which must be effected through a written redemption request),
he will receive, in addition to the net asset value of the shares, all
declared but unpaid dividends thereon.

Other Redemption Information

The Trust will make payment for redeemed shares within the time period
prescribed by the settlement requirements of the Securities Exchange Act of
1934. After receipt by the Transfer Agent of a request in proper form, except
as provided by the rules of the SEC. If shares to be redeemed were purchased
by check, the Trust will transmit the redemption proceeds promptly upon
clearance of such check, which could take up to fifteen days from the purchase
date. A shareholder having purchased shares by wire must have filed an account
application before any redemption requests can be honored.

Currently, the Trust imposes no charge when shares are redeemed.
However, institutions may charge a fee for providing services in connection
with investments in Portfolio shares; NBD currently charges $16 for wire
transactions. The Trust reserves the right to redeem accounts involuntarily,
after sixty days' notice, if redemptions cause the account's value to remain
at $400 or less. The Trust may also redeem shares of the Portfolio
involuntarily or make payment for redemption in securities or other property
if it is appropriate to do so in light of the Trust's responsibilities under
the 1940 Act.

Questions concerning the proper form for redemption requests should be
directed to the Transfer Agent at (800) 688-3350 or an investor's institution.

Redemption Draft Privilege

The Trust will provide each shareholder, upon request with drafts
("Redemption Drafts") which may be drawn on a Portfolio. Redemption Drafts may
be made payable to the order of any person in any amount not less than $500.
This privilege does not constitute a banking function and owning shares in a
Portfolio is not equivalent to a bank checking account. When a shareholder
presents a Redemption Draft for payment, a sufficient number of whole and
fractional shares in his Portfolio account will be redeemed to cover the
amount of the Redemption Draft. To use this method of redemption, a
shareholder must complete and file an authorization form contained in the
account application; an initial supply of Redemption Drafts will be mailed
within two or three weeks thereafter. At the date of this Prospectus there is
no charge for this service.

SHAREHOLDER SERVICES

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Investors should consult their own financial institutions in this regard.
Other investors should direct any questions to the Transfer Agent. The Trust
may modify or terminate any of the following services and privileges at any
time.

Exchange Privilege

Investors may exchange Class A shares which have been owned for at
least thirty days of the Money Market, Government, Treasury, Tax-Exempt and
Michigan Portfolios, of the Woodward Equity Index Fund and of other investment
portfolios of the Trust which may be offered in the future and sold without a
sales charge (each a "no load portfolio") and Class A shares which have been
owned for at least thirty days of the Woodward Growth/Value, Opportunity,
Intrinsic Value, Capital Growth, Balanced, International Equity, Intermediate
Bond, Bond, Short Bond, Municipal Bond or Michigan Municipal Bond Funds and of
other investment portfolios of the Trust which may be offered in the future
and sold with a sales charge (each a "load portfolio"). The cost of the
acquired Class A shares will be their net asset value plus the applicable
sales load, if any. Class A shares of a no load portfolio may be exchanged for
Class A shares of another no load portfolio without payment of any sales load.
Any exchange of Class A shares of a no load portfolio for Class A shares of a
load portfolio will be subject to the payment of the applicable sales load,
unless the investor is exchanging shares of a no load portfolio which were
received in a previous exchange transaction involving Class A shares of a load
portfolio. In such case, the investor will receive the appropriate credit for
the sales load previously paid. Shareholders contemplating an exchange should
carefully review the Prospectus of the portfolio into which the exchange is
being considered which may be obtained from an investor's financial
institution or from the Transfer Agent by calling (800) 688-3350.

Exchanges will be effected by a redemption of Class A shares of the
portfolio held and the purchase of Class A shares of the portfolio acquired.
Investors should make their exchange requests in writing or by telephone to
the financial institutions through which they purchased their original Class A
shares. It is the responsibility of financial institutions to transmit
exchange requests to the Transfer Agent. Other investors should transmit
exchange requests directly to the Transfer Agent. The total value of shares
being exchanged must at least equal the minimum investment requirement of the
portfolio whose shares are being acquired in the exchange. Only one exchange
in any thirty-day period is permitted and only Class A shares that may be
legally sold in the state of the investor's residence may be acquired in an
exchange. The Trust reserves the right to reject any exchange request.

Investors wishing to make an exchange should contact their financial
institutions or the Transfer Agent (as appropriate). Exchange requests in the
required form which are received by the Transfer Agent with respect to the
Tax-Exempt and Michigan Portfolios prior to noon, Eastern time, and with
respect to the Money Market, Government and Treasury Portfolios, prior to
3:00 p.m., Eastern time, will be effected on the same Business Day after such
request is received. Requests received after noon and 3:00 p.m., Eastern time,
respectively, will be effected on the next Business Day after such request is
received. During periods of significant economic or market change, telephone
exchanges may be difficult to complete. In such event, an investor should mail
the exchange request to his financial institution or the Transfer Agent.
Neither the Trust nor the Transfer Agent will be responsible for the
authenticity of instructions received by telephone that are reasonably
believed to be genuine. In attempting to confirm that telephone instructions
are genuine, the Trust and its Transfer Agent will use such procedures as are
considered reasonable, including recording those instructions and requesting
information as to account registration (including, but not limited to, the
name in which an account is registered, the account number, or recent
transactions in the account). To the extent that the Trust and its Transfer
Agent fail to use reasonable procedures to verify the genuineness

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of telephone instructions, they may be liable for such instructions that prove
to be fraudulent and unauthorized. In all other cases, shareholders will bear
the risk of loss for fraudulent telephone transactions. The Trust reserves the
right to modify or terminate its exchange procedures upon sixty days' notice
to shareholders.

Option to Make Systematic Withdrawals

The Trust has available to shareholders a Systematic Withdrawal Plan
pursuant to which a shareholder who owns Class A shares of any investment
portfolio having a minimum value of $5,000 at the time he elects under the
Plan may have a fixed sum distributed in redemption at regular intervals. An
application form and additional information regarding this service may be
obtained from an investor's financial institution or the Transfer Agent (by
calling (800) 688-3350).

Automatic Investment

The Trust offers an Automatic Investment Plan (the "Plan") whereby a
shareholder may automatically purchase Class A shares on a regular basis in
accordance with an election in his account application. An application may be
obtained from the Transfer Agent by calling (800) 688-3350. Under the Plan, a
shareholder's financial institution debits a pre-authorized amount from his
account and applies the amount to the purchase of Class A shares. The minimum
per transaction is $25. The minimum initial investment in a Portfolio is also
$25 for the following shareholders who elect the Plan: (1) current and retired
directors, officers and employees of NBD or any of its affiliates; (2) the
trustees, former trustees and officers of the Trust; (3) broker/dealers which
have entered into an agreement with a Co-Distributor or the Trust pursuant to
the Trust's Distribution Plan or Shareholder Servicing Plan and their
representatives purchasing for their own accounts; and (4) spouses, children,
grandchildren, siblings, parents, grandparents and in-laws of individuals
referred to in paragraphs (1), (2) and (3) above. An NAV Account Application
may be obtained from the Transfer Agent by calling (800) 688-3350. The Plan
can be implemented with any financial institution that is a member of the
Automated Clearing House. No service fee is currently charged by the Trust for
participating in the Plan. Death or legal incapacity will terminate a
shareholder's participation in the Plan. Deposits, withdrawals and adjustments
will be made electronically under the rules of the Automated Clearing House
Association.

Cross Reinvestment of Dividend Plan

The Trust makes available to shareholders a Cross Reinvestment of
Dividend Plan (the "Plan") pursuant to which a shareholder who owns Class A
shares of any portfolio with a minimum value of $10,000 at the time he elects
under the Plan may have dividends paid by such portfolio automatically
reinvested into Class A shares of another portfolio in which he has invested a
minimum of $500. Shareholders may obtain an application and additional
information from an investor's financial institution or the Transfer Agent by
calling (800) 688-3350.

The Woodward Funds Individual Retirement Custodial Account

Class A shares may be purchased in conjunction with the Trust's
Individual Retirement Custodial Account program ("IRA") where NBD acts as
custodian. Investors should consult their institutions or a Co-Distributor for
information as to applications and annual fees. The minimum investment for an
IRA is $250 for investors who are not employees of NBD and $25 for investors
who are

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<PAGE>

employees of NBD. Investors should also consult their tax advisers to
determine whether the benefits of an IRA are available or appropriate.

Other Retirement Plans

NBD and its affiliates offer a variety of pension and profit sharing
plans including IRAs, defined contribution plans, 401(k) Plans, 403(b)(7)
Plans and 451 Plans through which shareholders may purchase Class A shares.
The minimum investment for these Plans may differ from the minimum discussed
above in "Purchase of Shares." For details concerning any of the retirement
plans, please call the Transfer Agent or a Co-Distributor.

Direct Deposit Program

If an investor receives federal salary, social security, or certain
veteran's, military or other payments from the federal government or elects to
use his employer's payroll deposit program, he is eligible for the Direct
Deposit Program. With this Program, an investor may purchase Class A shares
(minimum of $25) by having these payments automatically deposited into his
Portfolio account. For instructions on how to enroll in the Direct Deposit
Program, an investor should call his institution or the Transfer Agent. Death
or legal incapacity will terminate an investor's participation in the Program.
An investor may elect at any time to terminate his participation by notifying
in writing the appropriate federal agency. Further, the Trust may terminate an
investor's participation upon thirty days' notice to him.

PERFORMANCE AND YIELD INFORMATION

From time to time, in advertisements or in reports to shareholders the
performance and yields of each class of shares of the Portfolios may be quoted
and compared to those of other mutual funds with similar investment objectives
and to stock or other relevant indices or to rankings prepared by independent
services or other financial or industry publications that monitor the
performance of mutual funds. For example, the yields of the Money Market,
Government and Treasury Portfolios may be compared to the Donoghue's Money
Fund Average, Donoghue's Government Money Fund Average and Donoghue's Treasury
Money Fund Average, respectively, which are averages compiled by
IBC/Donoghue's Money Fund Report, a widely recognized independent publication
that monitors the performance of money market funds, or to the average yields
reported by the Bank Rate Monitor for money market deposit accounts offered by
the 50 leading banks and thrift institutions in the top five standard
metropolitan statistical areas. The yields of the Tax-Exempt Portfolio and
Michigan Portfolio may be compared to the Donoghue's Tax-Free Money Fund
Average. Performance and yield data as reported in national financial
publications including, but not limited to, Money Magazine, Forbes, Barron's,
The Wall Street Journal and The New York Times, or in publications of a local
or regional nature, may also be used in comparing the performance and yields
of the Portfolios.

"Yield" refers to the income generated in a class of shares of a
Portfolio over a seven-day period identified in the advertisement. This income
is annualized, i.e., the income during a particular week is assumed to be
generated each week over a 52-week period and is shown as a percentage of the
investment. Each Portfolio may also advertise its "effective yield" which is
calculated similarly but, when annualized, income is assumed to be reinvested,
thereby making the "effective yield" slightly higher because of the
compounding effect of the assumed reinvestment. The Tax-Exempt Portfolio and
Michigan Portfolio may from time to time advertise a "tax-equivalent yield" to
demonstrate the level of taxable yield necessary to produce an after-tax yield
equivalent to that achieved by the Portfolios. The "tax-equivalent yield" will
be computed by dividing the

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tax-exempt portion of a Portfolio's yield by a denominator consisting of one
minus a stated federal (and/or Michigan) income tax rate and adding the
product to that portion, if any, of the Portfolio's yield which is not
tax-exempt.

Performance of each class of shares is based on historical earnings
and will fluctuate and is not intended to indicate future performance. Since
yields fluctuate, yield data cannot necessarily be used to compare an
investment in a class' shares with bank deposits, savings accounts and similar
investment alternatives which often provide an agreed or guaranteed fixed
yield for a stated period of time. Performance and yield are generally
functions of kind and quality of the instruments held in a portfolio,
portfolio maturity, operating expenses, and market conditions. Any fees
charged by financial institutions directly to their customer accounts in
connection with investments in shares will not be reflected in performance
calculations.

DIVIDENDS AND DISTRIBUTIONS

Each Portfolio's net investment income will be declared daily as a
dividend to shareholders of record at the close of business on the day of
declaration. Shareholders will receive dividends in additional Class A shares
of the applicable Portfolio unless they elect to receive cash. Shareholders
must make such election, or any revocation thereof, in writing to their
financial institutions or the Transfer Agent. If an account is established
with telephone privileges, the registered owner or his preauthorized legal
representative may change the election to receive dividends in cash to an
election to receive dividends in shares by telephoning the Transfer Agent
at (800) 688-3350. The election will become effective with respect to
dividends paid after its receipt. Reinvestment or payment of dividends will
be effected monthly at the net asset value per Class A share of the applicable
Portfolio on the date effected, and will include fractional shares if
necessary. If cash payment is requested, checks will be mailed within five
Business Days after the last day of each month.

TAXES

Federal Taxes

Each Portfolio intends to qualify as a "regulated investment company"
under the Internal Revenue Code of 1986, as amended (the "Code"). Such
qualification relieves a Portfolio of liability for federal income taxes to
the extent its earnings are distributed in accordance with the Code.

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Additional Information under "Additional Information Concerning Taxes.") An
exempt-interest dividend is any dividend or part thereof (other than a capital
gain dividend) paid by the Tax-Exempt Portfolio or Michigan Portfolio and
designated as an exempt-interest dividend in a written notice mailed to
shareholders not later than sixty days after the close of the Portfolio's
taxable year which does not exceed in its aggregate the net Municipal
Securities interest received by the Portfolio for the taxable year. It is
anticipated that no part of any distribution by the Portfolios will be
eligible for the dividends received deduction for corporations. In addition,
none of the Portfolios expects to pay capital gain dividends within the
meaning of the Code.

If the Tax-Exempt Portfolio or Michigan Portfolio should hold certain
private activity bonds issued after August 7, 1986, shareholders must include,
as an item of tax preference, the portion of dividends paid by the Portfolio
that is attributable to interest on such bonds in their federal alternative
minimum taxable income for purposes of determining liability (if any) for the
alternative minimum tax applicable to individuals and corporations and the
environmental tax applicable to corporations. Corporate shareholders must also
take all exempt-interest dividends into account in determining certain
adjustments for alternative minimum and environmental tax purposes.
Shareholders receiving Social Security benefits should note that all
exempt-interest dividends will be taken into account in determining the
taxability of such benefits.

Dividends declared in October, November or December of any year
payable to shareholders of record on a specified date in such months will be
deemed to have been received by shareholders and paid by a Portfolio on
December 31 of such year if such dividends are actually paid during January of
the following year.

Shareholders will be advised at least annually as to the federal
income tax consequences of distributions made each year.

State and Local Taxes

Dividends paid by the Tax-Exempt Portfolio and Michigan Portfolio that
are derived from interest attributable to tax-exempt Michigan Municipal
Securities will be exempt from Michigan income tax, Michigan intangibles tax
and Michigan single business tax. Conversely, to the extent that the
Portfolios' dividends are derived from interest on obligations other than
Michigan Municipal Securities or certain U.S. Government Obligations (or are
derived from short term or long term gains), such dividends will be subject to
Michigan income tax, Michigan intangibles tax and Michigan single business
tax, even though the dividends may be exempt for federal income tax purposes.
The Portfolios are unable to predict in advance the portion of their dividends
that will be derived from interest on Michigan Municipal Securities, but will
mail to their respective shareholders not later than sixty days after the
close of the Portfolios' taxable year a written notice containing information
as to the interest derived from Michigan obligations and exempt from Michigan
income tax, Michigan intangibles tax and Michigan single business tax.

Except as noted above with respect to Michigan income taxation,
distributions of net income may be taxable to investors as dividend income
under other state or local laws even though a substantial portion of such
distributions may be derived from interest on tax-exempt obligations which, if
realized directly, would be exempt from such income taxes.

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upon state income taxation may be appropriate. Shareholders are advised to
consult their tax advisers concerning the application of state and local
taxes, which may have different tax consequences from those of the federal
income tax laws.

MANAGEMENT

Trustees and Officers of the Trust

The Board of Trustees of the Trust is responsible for the management
of the business and affairs of the Trust. The Trustees and executive officers
of the Trust and their principal occupations for the last five years are set
forth below. Each Trustee has an address at The Woodward Funds c/o NBD Bank,
611 Woodward Avenue, Detroit, Michigan 48226.

*Earl I. Heenan, Jr., Chairman and President

Director (since 1995), Vice Chairman (1988-1995) and President
(1955-1988), Detroit Mortgage & Realty Company; President (1989-1992) and
Trustee (since 1966), Cottage Hospital of Grosse Pointe (affiliate of Henry
Ford Health System); Trustee, Henry Ford Health Sciences Center (since 1987);
Trustee, Henry Ford Continuing Care Corporation (since 1980); Trustee,
Earhart Foundation (since 1980). He is 77 years old and his address is
333 West Fort Street, Detroit, Michigan 48226.

*Eugene C. Yehle, Trustee and Treasurer

Retired; Director of Investor Relations and Pension Investments, Dow
Chemical Company (1972-1985); Trustee, Alma College (since 1978); Trustee
(since 1977) and Chairman (since 1983), Charles J. Strosacker Foundation;
Trustee (1989-1993), Higgins Lake Foundation. He is 75 years old and his
address is 4501 Linden Drive, Midland, Michigan 48640.

Will M. Caldwell, Trustee

Retired; Executive Vice President, Chief Financial Officer and
Director, Ford Motor Company (1979-1985); Director, First Nationwide Bank
(1986-1991); Director, Air Products & Chemicals, Inc. (since 1985); Director,
Zurich Holding Company of America (since 1990); Director, The Batts Group,
Ltd. (since 1986); Trustee and Vice Chairman, Detroit Medical Center
(1986-1991); Trustee Emeritus and Chairman of the Pension Investment
Sub-Committee, Detroit Medical Center (since 1991). He is 70 years old and his
address is 2733 Glenbrook Court, Bloomfield Hills, Michigan 48302.

Nicholas J. De Grazia, Trustee

Consultant, Lionel L.L.C. (since 1995); President, Chief Operating
Officer and Director, Lionel Trains, Inc. (1990-1995); Vice President-Finance
and Treasurer, University of Detroit (1981-1990); President (1986-1990) and
Director (1986-1995), Polymer Technologies, Inc.; President, Florence
Development Company (1987-1990); Chairman (since 1994) and Director
(1992-1995), Central Macomb County Chamber of Commerce; Vice Chairman, Michigan
Higher Education Facilities Authority (since 1991). He is 53 years old and his
address is 3650 Shorewood Drive, North Lakeport, Michigan 48059.

- --------
* Trustees who are "interested persons" of the Trust, as defined in the 1940
Act.

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John P. Gould, Trustee

Steven G. Rothmeier Professor (since January, 1996); Distinguished
Service Professor of Economics of the University of Chicago Graduate School
of Business (since 1984); Dean of the University of Chicago Graduate School
of Business (1983-1993); Member of Economic Club of Chicago and Commercial
Club of Chicago; Director of Harbor Capital Advisors and Dimensional Fund
Advisors; Trustee, Prairie Family of Funds. He is 57 years old and his address
is University of Chicago Graduate School of Business, 1101 East 58th Street,
Chicago, Illinois 60637.

Marilyn McCoy, Trustee

Vice President of Administration and Planning of Northwestern
University (since 1985); Director of Planning and Policy Development for the
University of Colorado (1981-1985); Member of the Board of Directors of
Evanston Hospital, Chicago Metropolitan YMCA, Chicago Network and United
Charities; Member of the Chicago Economics Club; Trustee, Prairie Family of
Funds. She is 48 years old and her address is 1100 North Lake Shore Drive,
Chicago, Illinois 60611.

Julius L. Pallone, Trustee

President, J.L. Pallone Associates, Consultants (since 1994); Chairman
of the Board (1974-1993), Maccabees Life Insurance Company; President and
Chief Executive Officer, Royal Financial Services (1991-1993); Director,
American Council of Life Insurance of Washington, D.C. (life insurance
industry association) (1988-1993); Director, Crowley, Milner and Company
(department store) (since 1988); Trustee, Lawrence Institute of Technology
(since 1982); Director, Detroit Symphony Orchestra (since 1985); Director,
Oakland Commerce Bank (since 1984) and Michigan Opera Theater (since 1981). He
is 65 years old, and his address is 26957 Northwestern Highway, Suite 288,
Southfield, Michigan 48034.

*Donald G. Sutherland, Trustee

Partner of the law firm Ice, Miller, Donadio & Ryan, Indianapolis,
Indiana. He is 67 years old, and his address is One American Square, 34th
Floor, Indianapolis, Indiana 46204.

Donald L. Tuttle, Trustee

Vice President (since 1995), Senior Vice President (1992-1995),
Association for Investment Management and Research; Senior Professor of
Finance, Indiana University (1970-1991); Vice President, Trust &
Investment Advisers, Inc. (1990-1991); Director, Federal Home Loan Bank
of Indianapolis (1981 to 1985). He is 61 years old, and his address is
5 Boar's Head Lane, Charlottesville, Virginia 22903.

W. Bruce McConnel, III, Secretary

Partner of the law firm Drinker Biddle & Reath, Philadelphia,
Pennsylvania. He is 53 years old, and his address is 1345 Chestnut Street,
Philadelphia, Pennsylvania 19107.

The Trustees receive fees and are reimbursed for their expenses in
connection with each meeting of the Board of Trustees they attend. Additional
information on the compensation paid by the Trust to its Trustees and officers
is included in the Statement of Additional Information.

- -----------------------------
* Trustees who are "interested persons" of the Trust, as defined in the 1940
Act.

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Investment Adviser; Custodian and Transfer Agent

The investment adviser of the Trust is NBD, a wholly owned subsidiary
of First Chicago NBD Corporation, a bank holding company. As of December 31,
1995, NBD was providing investment management and advisory services for
accounts aggregating approximately $37.9 billion of which in excess of $3.7
billion were money market instruments. NBD has been in the business of
providing such services since 1933. Included among NBD's accounts are pension
and profit sharing funds for major corporations and state and local
governments, as well as commingled trust funds and a variety of institutional
and personal advisory accounts, estates and trusts, all of which are potential
customers for shares of the Trust. NBD also acts as investment adviser for
other registered investment company portfolios.

Under the Advisory Agreement, NBD is subject to the general
supervision of the Trust's Board of Trustees and manages each Portfolio in
conformance with the stated policies of the Trust. In this regard, it is the
responsibility of NBD to make investment decisions for the Trust and to place
all purchase and sale orders for its portfolio transactions. Under the
Advisory Agreement, NBD also provides the Trust with certain administrative
services, such as maintaining the Trust's general ledger and assisting in the
preparation of various regulatory reports.

NBD is entitled to receive fees for advisory and administrative
services provided to the Portfolios, computed daily and payable monthly, at
annual rates of: (i) .45% of the first $1.0 billion of each of the Money
Market, Government, Treasury and Tax-Exempt Portfolio's average daily net
assets, .425% of the next $1.0 billion, and .40% of each such Portfolio's
average daily net assets in excess of $2.0 billion; and (ii) .50% of the
average daily net assets of the Michigan Portfolio. In addition, NBD is
entitled to 4/10ths of the gross income earned by a Portfolio on each loan of
securities (excluding capital gains and losses, if any). NBD may, however,
waive its fees in whole or in part. (The Trust will give 30 days notice to
investors of the discontinuance of advisory fee waivers.)

NBD also receives compensation as the Trust's Custodian and Transfer
Agent under separate agreements. The fees payable by the Portfolios for these
services are described in the Statement of Additional Information.

NBD is reimbursed for postage and other out-of-pocket expenses in
connection with the above duties and also receives compensation from the Trust
for costs associated with clearing redemption drafts through NBD, and for its
standard bank charges for processing lock box deposits, processing redemption
drafts, and performing other services.

Banking laws and regulations currently prohibit a bank holding company
registered under the Bank Holding Company Act of 1956 or any affiliate thereof
from sponsoring, organizing, controlling, or distributing the shares of a
registered, open-end investment company continuously engaged in the issuance
of its shares, and prohibit banks generally from underwriting securities, but
do not prohibit such a bank holding company or affiliate from acting as
adviser, transfer agent, or custodian to such an investment company or from
purchasing shares of such a company as agent for and upon the order of a
customer. NBD and the Trust believe that NBD may perform the advisory,
custodial and transfer agency services for the Trust described in this
Prospectus, and that NBD, subject to such banking laws and regulations, may
perform the shareholder services contemplated by this Prospectus, without
violation of such banking laws or regulations. However, future changes in
legal requirements relating to the permissible activities of banks and their
affiliates, as well as future interpretations of present requirements, could
prevent NBD from continuing to perform investment advisory, custodial or
transfer agency services for the Trust or require NBD to alter or discontinue
the services it provides to shareholders.

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If NBD were prohibited from performing investment advisory, custodial
or transfer agency services for the Trust, it is expected that the Board of
Trustees of the Trust would recommend that shareholders approve new agreements
with another entity or entities qualified to perform such services and
selected by the Board. If NBD or its affiliates were required to discontinue
all or part of its shareholder servicing activities, their customers would be
permitted to remain the beneficial owners of Trust shares and alternative
means for continuing the servicing of such customers would be sought. The
Trust does not anticipate that investors would suffer any adverse financial
consequences as a result of these occurrences.

Sponsors and Co-Distributors

FoM, a Delaware corporation and a wholly owned subsidiary of First of
Michigan Capital Corporation, is a sponsor and Co-Distributor of the Trust's
shares. It is engaged in the securities underwriting and securities and
commodities brokerage business and is a member of the New York Stock Exchange,
Inc., other major securities and commodities exchanges, and the National
Association of Securities Dealers, Inc. FoM participates as a member of
various selling groups or as agent of other investment companies, executes
orders on behalf of investment companies for the purchase and sale of their
securities and sells securities to such companies as a broker or dealer in
securities. On December 31, 1995, FoM had a net worth of $37,231,000.

Essex, a New York corporation, is a wholly owned subsidiary of CUC
International, Inc. Essex is engaged in the business of securities brokerage
through financial institutions and is a member of the National Association of
Securities Dealers, Inc. Essex has entered into dealer agreements with the
distributors of various investment companies and executes orders on behalf of
such companies for the purchase and sale of their securities. As of December
31, 1995, Essex had a net worth of $1,945,000.

FoM and Essex act as sponsors and Co-Distributors of the Trust's
shares pursuant to the Distribution Agreement with the Trust which has been
entered into pursuant to the Distribution Plan described below. Neither FoM
nor Essex receives a sales load in connection with the sale of the Portfolios'
shares.

Service and Distribution Plan

The Trust has adopted its Distribution Plan pursuant to Rule 12b-1
under the 1940 Act (the "Plan"). Under the Plan, the Trust incurs expenses
primarily intended to result in the sale of the Trust's shares in an amount
not to exceed .35 of 1% of the value of each portfolio's average daily net
assets calculated as follows in the case of the Portfolios: (i) fees payable
to the Co-Distributors pursuant to the Distribution Agreement; (ii) the
actual costs and expenses in connection with advertising and marketing the
Portfolios' shares; and (iii) fees pursuant to agreements with securities
dealers, financial institutions, and other professionals ("Service Agents")
for administration or servicing of Portfolio shareholders ("Servicing").
Servicing may include, among other things: answering client inquiries
regarding the Trust and the Portfolios; assisting clients in changing dividend
options, account designations and addresses; performing sub-accounting;
establishing and maintaining shareholder accounts and records; processing
purchase and redemption transactions; investing client cash account balances
automatically in Portfolio shares; providing periodic statements showing a
client's account balance and integrating such statements with those of other
transactions and balances in the client's other accounts serviced by the
Service Agent; arranging for bank wires; and such other services as the Trust
may request, to the extent the Service Agent is permitted by applicable
statute, rule or regulation. Under the Plan, the Trust also bears the cost of
preparing and printing Prospectuses for use in selling shares of the

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Trust and costs associated with implementing and operating the Plan. These
costs are included in computing the .35 of 1% limitation set forth above.

Pursuant to the Distribution Agreement, FoM is entitled to receive a
fee at the annual rate of .025% of the aggregate average net assets invested
in the Portfolios up to $400,000,000 and .005% of such assets in excess of
$400,000,000, and Essex is entitled to receive a fee at the annual rate of
.10% of the aggregate average net assets of the Trust's investment portfolios
attributable to investments by clients of Essex. The payments to be made to
the Co-Distributors which are based on a percentage of the net assets of the
Portfolios are designed to compensate the Co-Distributors for their
participation in the distribution of the Portfolios' shares and to reimburse
the Co-Distributors for certain distribution costs. Nonreimbursable expenses
of the Co-Distributors include salaries of executives, sales and clerical
personnel performing services for the Trust and overhead expenses. Such costs
are by their nature not subject to precise quantification and the Trustees
have determined that the fees to be paid to the Co-Distributors are reasonable
under the circumstances.

If current restrictions under the Glass-Steagall Act were relaxed, the
Trust expects that NBD would consider the possibility of offering to perform
some or all of the services now provided by the Co-Distributors. Legislation
modifying such restrictions has been proposed in past Sessions of Congress
which, if enacted, would permit a bank holding company to establish a non-bank
subsidiary having the authority to organize, sponsor and distribute shares of
an investment company. If such legislation were enacted, the Trust expects
that NBD's parent bank holding company would consider the possibility of one
of its non-bank subsidiaries offering to perform some or all of the services
now provided by the Co-Distributors. It is not possible, of course, to predict
whether or in what form legislation might be enacted or the terms upon which
NBD or such a non-bank affiliate might offer to provide such services.

Shareholder Servicing Plan

Pursuant to a Shareholder Servicing Plan ("Servicing Plan") adopted by
its Board of Trustees, the Trust may enter into agreements with banks and
financial institutions, which may include the Adviser and its affiliates
("Shareholder Servicing Agents"), under which they will render shareholder
administrative support services for their customers who beneficially own Class
A shares of the Portfolios. Such services, which are described more fully in
the Statement of Additional Information, may include processing purchase and
redemption requests from customers, placing net purchase and redemption orders
with the Co- Distributors; processing, among other things, distribution
payments from the Trust, providing necessary personnel and facilities to
establish and maintain customer accounts and records, and providing
information periodically to customers showing their positions in Class A
shares.

For these services, the Trust will pay fees to Shareholder Servicing
Agents at an annual rate of up to .25% of the average daily net asset value of
Class A shares held by such Shareholder Servicing Agents for the benefit of
their customers and, at the Trust's option, it may reimburse the Shareholder
Servicing Agents' out-of-pocket expenses. Shareholder Servicing Agents are
required to provide their customers with a schedule of any credits, fees or
other conditions that may be applicable to the investment of customer assets
in Class A shares. The fees payable under such servicing agreements will be
allocated exclusively to the Class A shares in each Portfolio.

-33-

<PAGE>

jurisdiction of the SEC, the Department of Labor or state securities
commissions, are urged to consult legal counsel before entering into servicing
agreements.

Trust Expenses

The Trust is responsible for the payment of its expenses. These
include, for example, fees payable to NBD as Adviser, or expenses otherwise
incurred by the Trust in connection with the management of the investment of
the Trust's assets, the fees and expenses of NBD as the Trust's Custodian and
as its Transfer Agent, the fees payable to the Co-Distributors under the
Distribution Agreement, the fees and expenses of Trustees, expenses associated
with the Trust's Distribution Plan and Shareholder Servicing Plan, outside
auditing and legal expenses, all taxes and corporate fees payable by the
Trust, SEC fees, state securities qualification fees, costs of preparing and
printing prospectuses for regulatory purposes and for distribution to
shareholders, costs to shareholder reports and shareholder meetings, and any
extraordinary expenses. Each Portfolio also pays for brokerage commissions and
transfer taxes (if any) in connection with the purchase and sale of portfolio
securities. Expenses attributable to a particular portfolio of the Trust will
be charged to that portfolio, and expenses not readily identifiable as
belonging to a particular portfolio will be allocated by the Board of Trustees
among one or more portfolios in such a manner as it deems fair and equitable.
For the fiscal year ended December 31, 1995, the Money Market, Government,
Treasury, Tax-Exempt and Michigan Portfolios' total expenses were .51%, .51%,
.53%, .53% and .69% (after fee waivers), if any of their average net assets,
respectively. The Statement of Additional Information describes in more detail
the fees and expenses borne by the Trust.

OTHER INFORMATION

The Trust was organized as a Massachusetts business trust on April 21,
1987 under a Declaration of Trust, which was amended and restated as of May 1,
1992. The Trust is a series fund having seventeen series of shares of
beneficial interest, each of which evidences an interest in a separate
investment portfolio. The Declaration of Trust permits the Board of Trustees
to issue an unlimited number of full and fractional shares and to create an
unlimited number of series of shares ("Series") representing interests in a
portfolio and an unlimited number of classes of shares within a Series. In
addition to the Portfolios described herein, the Trust offers the following
investment portfolios: the Woodward Intermediate Bond Fund, Bond Fund, Short
Bond Fund, Municipal Bond Fund, Michigan Municipal Bond Fund, Growth/Value
Fund, Opportunity Fund, Intrinsic Value Fund, Capital Growth Fund, Balanced
Fund, International Equity Fund and Equity Index Fund. The Trust has
established the following two distinct classes of shares within each
Portfolio described herein: Class I shares (Special Class 1) and
Class A shares (Original Class). A sales person and any other person or
institution entitled to receive compensation for selling or servicing shares
may receive different compensation with respect to different classes of shares
in the Series.

Shareholders are entitled to one vote for each full share held, and a
proportionate fractional vote for each fractional share held, and each Series
entitled to vote on a matter will vote thereon in the aggregate and not by
Series, except as otherwise expressly required by law or when the Board of
Trustees determine that the matter to be voted on affects only the interests
of shareholders of a particular Series. In addition, shareholders of each of
the Series have equal voting rights except that only shares of a particular
class within a Series are entitled to vote on matters affecting only that
class. Voting rights are not cumulative, and accordingly, the holders of more
than 50% of the aggregate number of shares of all Trust portfolios may elect
all of the Trustees.

-34-

<PAGE>

As of March 29, 1996, NBD held beneficially or of record
approximately 30.70%, 15.67%, 7.64%, 41.45% and 16.85% of the outstanding
shares of the Money Market, Government, Treasury, Tax-Exempt and Michigan
Portfolios, respectively, and therefore may be considered to be a controlling
person of the Portfolios for purposes of the 1940 Act.

Because NBD serves the Trust as both Custodian and as Adviser, the
Trustees have established a procedure requiring three annual verifications,
two of which are unannounced, of all investments held pursuant to the
Custodian Agreement, to be conducted by the Trust's independent accountants.

The Trust does not presently intend to hold annual meetings of
shareholders except as required by the 1940 Act or other applicable law. The
Trust's By-laws provide that special meetings of shareholders of any Series
shall be called at the written request of shareholders entitled to cast at
least 10% of the votes of a Series entitled to be cast at such meeting. The
Trust also stands ready to assist shareholder communications in connection
with any meeting of shareholders as prescribed in Section 16(c) of the 1940
Act.

-35-

<PAGE>

[ BACK COVER, COLUMN 1 ]

No person has been authorized to give any information or to
make any representations not contained in this Prospectus, or in the
Portfolios' Statement of Additional Information incorporated herein by
reference, in connection with the offering made by this Prospectus and, if
given or made, such information or representations must not be relied upon as
having been authorized by the Trust, Adviser or Sponsors and Co- Distributors.
This Prospectus does not constitute an offering by the Portfolios or by their
Co-Distributors in any jurisdiction in which such offering may not lawfully
be made.

TABLE OF CONTENTS Page

EXPENSE SUMMARY................................. 2
BACKGROUND...................................... 4
FINANCIAL HIGHLIGHTS............................ 5
INTRODUCTION.................................... 10
PROPOSED REORGANIZATION......................... 10
INVESTMENT OBJECTIVES,
POLICIES AND RISK
FACTORS................................. 10
OTHER INVESTMENT POLICIES....................... 12
PURCHASE OF SHARES.............................. 19
REDEMPTION OF SHARES............................ 21
SHAREHOLDER SERVICES............................ 23
PERFORMANCE AND YIELD
INFORMATION............................. 25
DIVIDENDS AND DISTRIBUTIONS..................... 26
TAXES ........................................ 27
MANAGEMENT...................................... 28
OTHER INFORMATION............................... 34

Investment Adviser:
NBD Bank
Detroit, Michigan 48226
Sponsors and Co-Distributors:
First of Michigan Corporation
Detroit, Michigan 48243
Essex National Securities, Inc.
Napa, California 94558
Custodian and Transfer Agent:
NBD Bank
Troy, Michigan 48007-7058
Legal Counsel:
Drinker Biddle & Reath
Philadelphia, PA 19107
<PAGE>

[ BACK COVER, COLUMN 2 ]

CLASS A SHARES IN THE:

WOODWARD MONEY MARKET FUND

WOODWARD GOVERNMENT FUND

WOODWARD TREASURY MONEY MARKET FUND

WOODWARD TAX-EXEMPT MONEY
MARKET FUND

WOODWARD MICHIGAN TAX-EXEMPT
MONEY MARKET FUND

THE WOODWARD FUNDS(R)

Prospectus
April 15, 1996
-36-

<PAGE>

- ------------------------------------------------------------------------------
PROSPECTUS April 15, 1996
- ------------------------------------------------------------------------------

THE WOODWARD FUNDS
c/o NBD Bank, Transfer Agent
P.O. Box 7058
Troy, Michigan 48007-7058

24 Hour yield and performance information
Purchase and Redemption orders:
(800) 688-3350

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

Class I shares of the:

Woodward Money Market Fund
Woodward Government Fund
Woodward Treasury Money Market Fund
Woodward Tax-Exempt Money Market Fund
Woodward Michigan Tax-Exempt Money Market Fund

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

SHARES OF THE TRUST ARE NOT BANK DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED OR OTHERWISE SUPPORTED BY, NBD BANK, ITS PARENT COMPANY
OR ITS AFFILIATES, AND ARE NOT FEDERALLY INSURED OR GUARANTEED BY THE U.S.
GOVERNMENT, FEDERAL DEPOSIT INSURANCE CORPORATION, OR ANY GOVERNMENTAL AGENCY.
INVESTMENT IN THE TRUST INVOLVES RISKS, INCLUDING THE LOSS OF PRINCIPAL. THERE
CAN BE NO ASSURANCE THAT THE PORTFOLIOS WILL BE ABLE TO MAINTAIN A CONSTANT
NET ASSET VALUE OF $1.00 PER SHARE.

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.

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

INVESTMENT ADVISER:

NBD Bank

<PAGE>

EXPENSE SUMMARY

The Trust currently offers Class I shares (formerly known as
"Institutional Shares") and Class A shares (formerly known as "Retail Shares")
in each of the Woodward Money Market Fund ("Money Market Portfolio"), Woodward
Government Fund ("Government Portfolio"), Woodward Treasury Money Market Fund
("Treasury Portfolio"), Woodward Tax-Exempt Money Market Fund ("Tax-Exempt
Portfolio") and Woodward Michigan Tax-Exempt Fund ("Michigan Portfolio").
Class I shares are sold primarily to NBD and its affiliated and correspondent
banks acting on behalf of their respective customers. Class A shares are sold
to the general public primarily through financial institutions such as banks,
brokers and dealers. Class A shares are offered in a separate Prospectus.
Investors should call (800) 688-3350, a Co-Distributor or their financial
institutions if they would like to obtain more information concerning the
Class I shares and/or Class A shares of the Portfolios. The following table is
provided to assist in understanding the various costs and expenses that an
investor will indirectly incur as a beneficial owner of Class I shares in each
of the Portfolios.
<TABLE>
<CAPTION>
Money Govern- Tax-
Market ment Treasury Exempt Michigan
Portfolio Portfolio Portfolio Portfolio Portfolio
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on
Purchases........................ None None None None None
(as a percentage of
offering price)

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

ANNUAL FUND OPERATING EXPENSES(1)
(as a percentage of average
net assets)
Management Fees.................... .44% .45% .45% .45% 0.50%
12b-1 Fees......................... .025% .003% .024% .017% 0.079%
Other Expenses(2).................. .055% .083% .076% .053% .121%
Total Operating Expenses........... .52% .54% .55% .52% 0.70%
<FN>
- --------------------

1. The expenses for each of the Portfolios have been restated to
reflect current expenses.

2. Credits or charges not reflected in the expense table may be
incurred directly by customers of financial institutions in connection with an
investment in the Portfolios.
</TABLE>

-2-

<PAGE>

Money Govern- Tax-
Market ment Treasury Exempt Michigan
Portfolio Portfolio Portfolio Portfolio Portfolio
--------- --------- --------- --------- ---------

<S> <C> <C> <C> <C> <C>
Example
You would pay the following
expenses on a $1,000 investment
assuming:
(1) a 5% annual return and
(2) redemption at the end of
each time period:
One Year:..................... $ 5.33 $ 5.53 $ 5.64 $ 5.33 $ 7.17
Three Years:.................. 16.71 17.35 17.67 16.71 22.46
Five Years:................... 29.14 30.24 30.80 29.14 39.08
Ten Years:.................... 65.40 67.84 69.07 65.40 87.28
</TABLE>

THE FOREGOING SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES OR RATES OF RETURN. ACTUAL EXPENSES OR RATE OF RETURN MAY BE GREATER
OR LESSER THAN THOSE SHOWN.

The example demonstrates the projected dollar amount of total
cumulative expenses that would be incurred over various periods with respect
to a hypothetical investment in Class I shares in each of the Portfolios,
based upon payment of operating expenses at the respective levels set forth in
the expense table. For more complete descriptions of Portfolio expenses, see
"Investment Adviser, Custodian and Transfer Agent," "Sponsors and Co-
Distributors," "Service and Distribution Plan" and "Trust Expenses" under the
heading "Management" in this Prospectus and the financial statements and
related notes contained in the Statement of Additional Information.

-3-

<PAGE>

BACKGROUND

Shares of each Portfolio have been classified into two separate
classes of shares -- Class I shares and Class A shares. Only the Class I
shares are offered pursuant to this Prospectus. Until April 15, 1996, Class I
shares and Class A shares represented equal pro rata interests in a Portfolio.
As of such date, the Trust implemented its Shareholder Servicing Plan with
respect to Class A shares only and began to allocate servicing fees payable
under the plan exclusively to such shares.

-4-

<PAGE>

FINANCIAL HIGHLIGHTS

The tables below provide supplementary information to the Portfolios'
financial statements contained in their Statement of Additional Information
and set forth certain information concerning the historic investment results
of Portfolio shares. They present a per share analysis of net investment
income and distributions from net investment income for each of the
Portfolios. The tables have been derived from the Portfolios' financial
statements which have been audited by Arthur Andersen LLP, the Trust's
independent public accountants, whose report thereon is contained in the
Statement of Additional Information along with the financial statements. The
financial data included in these tables should be read in conjunction with the
financial statements and related notes included in the Statement of Additional
Information. Further information about the performance of the Portfolios is
available in annual reports to shareholders. The Statement of Additional
Information and annual reports to shareholders may be obtained from the Trust
free of charge by calling (800) 688-3350.

<TABLE>
<CAPTION>
Money Market Portfolio
January 4,
1988
(Commence-
Year Year Year Year Year Year Year ment of
Ended Ended Ended Ended Ended Ended Ended Operations)
Decem- Decem- Decem- Decem- Decem- Decem- Decem- to Decem-
ber 31, ber 31, ber 31, ber 31, ber 31, ber 31, ber 31, ber 31,
1995 1994 1993 1992 1991 1990 1989 1988
------- ------- ------- ------- ------- ------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period ..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- -------- -------- -------- --------
Income From Investment
Operations:
Net Investment Income ... $ 0.0549 $ 0.0378 $ 0.0281 $ 0.0347 $ 0.0579 $ 0.0784 $ 0.0877 $ 0.0730
---------- ---------- ---------- ---------- -------- -------- -------- --------
Total From Investment
Operations ............. $ 0.0549 $ 0.0378 $ 0.0281 $ 0.0347 $ 0.0579 $ 0.0784 $ 0.0877 $ 0.0730
---------- ---------- ---------- ---------- -------- -------- -------- --------
Less Distributions:
Dividends From Net
Investment Income...... $ (0.0549) $ (0.0378) $ (0.0281) $ (0.0347) $(0.0579) $(0.0784) $(0.0877) $(0.0730)
---------- ---------- ---------- ---------- -------- -------- -------- --------
Total Distributions..... $ (0.0549) $ (0.0378) $ (0.0281) $ (0.0347) $(0.0579) $(0.0784) $(0.0877) $(0.0730)
---------- ---------- ---------- ---------- -------- -------- -------- --------
Net Asset Value, End of
Period.................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ======== ======== ======== ========

Total Return ............. 5.63% 3.86% 2.85% 3.58% 5.95% 8.14% 9.19% 7.55%(a)
Ratios/Supplemental Data
Net Assets, End of
Period (in 000's) ..... $1,639,695 $1,323,040 $1,326,693 $1,095,354 $775,521 $717,516 $446,466 $250,182
Ratio of Expenses to
Average Net Assets .... 0.51% 0.47% 0.49% 0.52% 0.50% 0.50% 0.51% 0.49%(a)
Ratio of Net Investment
Income to Average Net
Assets ............... 5.49% 3.78% 2.81% 3.47% 5.79% 7.84% 8.77% 7.30%(a)

<FN>
- ---------------------

(a) Total returns and ratios are annualized for periods less than one
year for comparability purposes. Actual annual returns and ratios may be less
than or greater than those shown.
</TABLE>

-5-

<PAGE>

<TABLE>
<CAPTION>
Government Portfolio
January 4,
1988
(Commence-
Year Year Year Year Year Year Year ment of
Ended Ended Ended Ended Ended Ended Ended Operations)
Decem- Decem- Decem- Decem- Decem- Decem- Decem- to Decem-
ber 31, ber 31, ber 31, ber 31, ber 31, ber 31, ber 31, ber 31,
1995 1994 1993 1992 1991 1990 1989 1988
------- ------- ------- ------- ------- ------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
of Period .............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- -------- -------- --------
Income From Investment
Operations:
Net Investment Income .. $ 0.0544 $ 0.0372 $ 0.0277 $ 0.0357 $ 0.0564 $ 0.0769 $ 0.0862 $ 0.0730
-------- -------- -------- -------- -------- -------- -------- --------
Total From Investment
Operations ........... $ 0.0544 $ 0.0372 $ 0.0277 $ 0.0357 $ 0.0564 $ 0.0769 $ 0.0862 $ 0.0730
-------- -------- -------- -------- -------- -------- -------- --------
Less Distributions:
Dividends From Net
Investment Income ..... $(0.0544) $(0.0372) $(0.0277) $(0.0357) $(0.0564) $(0.0769) $(0.0862) $(0.0730)
-------- -------- -------- -------- -------- -------- -------- --------
Total Distributions .... $(0.0544) $(0.0372) $(0.0277) $(0.0357) $(0.0564) $(0.0769) $(0.0862) $(0.0730)
-------- -------- -------- -------- -------- -------- -------- --------
Net Asset Value, End of
Period ................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ======== ======== ========

Total Return ............ 5.57% 3.77% 2.81% 3.63% 5.79% 7.97% 8.98% 7.55%(a)
Ratios/Supplemental Data
Net Assets, End of
Period (in 000's) ..... $474,377 $421,208 $346,665 $261,614 $288,369 $235,858 $196,095 $106,194
Ratio of Expenses to
Average Net Assets .... 0.51% 0.51% 0.51% 0.51% 0.50% 0.49% 0.50% 0.50%(a)
Ratio of Net Investment
Income to Average Net
Assets ............... 5.44% 3.72% 2.77% 3.57% 5.64% 7.69% 8.62% 7.30%(a)
<FN>
- ---------------

(a) Total returns and ratios are annualized for periods less than one
year for comparability purposes. Actual annual returns and ratios may be less
than or greater than those shown.

</TABLE>

-6-

<PAGE>

Treasury Portfolio

Year Ended Year Ended Year Ended
December 31, December 31, December 31,
1995 1994 1993
-------------- -------------- -----------
<S> <C> <C> <C>
Net Asset Value, Beginning of
Period................... $ 1.00 $ 1.00 $ 1.00
------- ------- -------
Income from Investment
Operations:
Net Investment Income.... $0.0539 $0.0370 $0.0273
------- ------- -------
Total From Investment Operations $0.0539 $0.0370 $0.0273
------- ------- -------
Less Distributions:
Dividends From Net Investment
Income................. $ (0.0539) $(0.0370) $(0.0273)
--------- --------- ---------
Total Distributions...... $ (0.0539) $(0.0370) $(0.0273)
--------- --------- ---------
Net Asset Value, End of Period $ 1.00 $ 1.00 $ 1.00
========= ========= =========

Total Return............... 5.53% 3.77% 2.77%
Ratios/Supplemental Data
Net Assets, End of
Period (in 000's)...... $ 927,696 $ 785,694 $ 854,873
Ratio of Expenses to Average
Net Assets............. 0.53% 0.50% 0.50%
Ratio of Net Investment
Income to Average Net Assets 5.39% 3.70% 2.73%
<FN>
- ---------------------

(a) Total returns and ratios are annualized for periods less than one
year for comparability purposes. Actual annual returns and ratios may be less
than or greater than those shown.
</TABLE>

-7-

<PAGE>

Tax-Exempt Portfolio
January 4,
1988
(Commence-
Year Year Year Year Year Year Year ment of
Ended Ended Ended Ended Ended Ended Ended Operations)
Decem- Decem- Decem- Decem- Decem- Decem- Decem- to Decem-
ber 31, ber 31, ber 31, ber 31, ber 31, ber 31, ber 31, ber 31,
1995 1994 1993 1992 1991 1990 1989 1988
------- ------- ------- ------- ------- ------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period ............... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- -------- -------- --------
Income From Investment
Operations:
Net Investment Income ... $ 0.0335 $ 0.0242 $ 0.0196 $ 0.0264 $ 0.0422 $ 0.0553 $ 0.0595 $ 0.0498
-------- -------- -------- -------- -------- -------- -------- --------
Total From Investment
Operations ............. $ 0.0335 $ 0.0242 $ 0.0196 $ 0.0264 $ 0.0422 $ 0.0553 $ 0.0595 $ 0.0498
-------- -------- -------- -------- -------- -------- -------- --------
Less Distributions:
Dividends From Net
Investment Income ..... $(0.0335) $(0.0242) $(0.0196) $(0.0264) $(0.0422) $(0.0553) $(0.0595) $(0.0498)
-------- -------- -------- -------- -------- -------- -------- --------
Total Distributions .... $(0.0335) $(0.0242) $(0.0196) $(0.0264) $(0.0422) $(0.0553) $(0.0595) $(0.0498)
-------- -------- -------- -------- -------- -------- -------- --------
Net Asset Value, End of
Period ................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ======== ======== ========

Total Return ............. 3.41% 2.45% 1.98% 2.70% 4.30% 5.67% 6.11% 5.10%(a)
Ratios/Supplemental Data
Net Assets, End of
Period (in 000's) ..... $564,413 $550,736 $498,706 $379,431 $227,808 $235,451 $210,028 $177,645
Ratio of Expenses to
Average Net Assets .... 0.53% 0.51% 0.51% 0.53% 0.52% 0.52% 0.51% 0.49%(a)
Ratio of Net Investment
Income to Average
Net Assets ............ 3.35% 2.42% 1.96% 2.64% 4.22% 5.53% 5.95% 4.98%(a)
<FN>
- ---------------------

(a) Total returns and ratios are annualized for periods less than one
year for comparability purposes. Actual annual returns and ratios may be less
than or greater than those shown.
</TABLE>

-8-

<PAGE>

Michigan Portfolio
January 23, 1991
Year Year Year Year (Commencement
Ended Ended Ended Ended of Operations)
Decem- Decem- Decem- Decem- to Decem-
ber 31, ber 31, ber 31, ber 31, ber 31,
1995 1994 1993 1992 1991
------- ------- ------- ------- -----

<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- ---------
Income From Investment
Operations:
Net Investment Income..... $ 0.0329 $ 0.0235 $ 0.0181 $ 0.0237 $ 0.0353
--------- --------- --------- --------- ---------
Total From Investment
Operations............... $ 0.0329 $ 0.0235 $ 0.0181 $ 0.0237 $ 0.0353
--------- --------- --------- --------- ---------
Less Distributions:
Dividends From Net
Investment Income........ $ (0.0329) $ (0.0235) $ (0.0181) $ (0.0237) $ (0.0353)
--------- --------- --------- --------- ---------
Total Distributions....... $ (0.0329) $ (0.0235) $ (0.0181) $ (0.0237) $ (0.0353)
--------- --------- --------- --------- ---------
Net Asset Value, End of
Period.................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ========= =========

Total Return............... 3.32% 2.38% 1.83% 2.40% 3.83%(a)
Ratios/Supplemental Data
Net Assets, End of
Period (in 000's)....... $ 122,057 $ 78,640 $ 52,557 $ 52,960 $ 38,885
Ratio of Expenses to
Average Net Assets...... 0.69% 0.67% 0.65% 0.64% 0.65%(a)
Ratio of Net Investment
Income to Average Net
Assets.................. 3.30% 2.35% 1.81% 2.37% 3.77%(a)
Ratio of Expenses to
Average Net Assets
Without Fee Waiver...... 0.76% 0.75% 0.00% 0.00% 0.00%
Ratio of Net Investment
Income to Average
Net Assets
Without Fee Waiver...... 3.23% 2.28% 0.00% 0.00% 0.00%
<FN>
- ---------------------

(a) Total returns and ratios are annualized for periods less than one
year for comparability purposes. Actual annual returns and ratios may be less
than or greater than those shown.
</TABLE>

-9-

<PAGE>

INTRODUCTION

The Trust is an open-end, management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"). The
Trust currently consists of seventeen investment portfolios, each of which
consists of a separate pool of assets with separate investment objectives and
policies. However, only the Class I shares of the Money Market, Government,
Treasury, Tax-Exempt and Michigan Portfolios are offered pursuant to this
Prospectus. Under the 1940 Act, the Michigan Portfolio is classified as a
non-diversified investment portfolio and the other Portfolios are classified
as diversified investment portfolios.

PROPOSED REORGANIZATION

INVESTMENT OBJECTIVES, POLICIES AND RISK FACTORS

Money Market Portfolio, Government Portfolio and Treasury Portfolio

In seeking to achieve its investment objective, the Money Market
Portfolio invests in the following high quality "money market" instruments:

(1) Obligations issued or guaranteed as to payment of
principal and interest by the U.S. Government, its agencies or
instrumentalities ("U.S. Government Obligations");

(2) U.S. dollar denominated obligations issued or guaranteed
by the government of Canada, a Province of Canada, or an
instrumentality or political subdivision thereof;

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(4) Certificates of deposit, bankers' acceptances and time
deposits of foreign banks and U.S. branches of foreign banks having
assets in excess of the equivalent of $1 billion;

(5) Commercial paper, other short term obligations and
variable rate master demand notes, bonds, debentures and notes; and

(6) Repurchase agreements relating to the above instruments.

In seeking to achieve its investment objective, the Government
Portfolio invests in:

(1) U.S. Government Obligations; and

(2) Repurchase agreements relating to the above obligations.

In seeking to achieve its investment objective, the Treasury Portfolio
invests in:

(1) U.S. Treasury bills, notes, and direct U.S. Treasury
obligations having remaining maturities of 13 months or less; and

(2) Repurchase agreements relating to direct U.S. Treasury
obligations.

Tax-Exempt Portfolio and Michigan Portfolio

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subdivisions, agencies, instrumentalities and authorities, the interest on
which is, in the opinion of bond counsel for the issuers, exempt from regular
federal income tax ("Municipal Securities").

The investment objective of the Michigan Portfolio is to provide a
high level of current interest income that is exempt from federal and State of
Michigan income taxes, consistent with the preservation of capital and
liquidity. In seeking to achieve its investment objective, the Portfolio
invests in high quality debt obligations issued by the State of Michigan, its
political subdivisions, municipalities, corporations and authorities, the
interest on which, in the opinion of bond counsel to the issuers, is exempt
from federal and State of Michigan income taxes ("Michigan Municipal
Securities") and in related repurchase agreements. Income earned by the
Portfolio with respect to repurchase agreements and securities lending
transactions is not exempt from federal income tax. To the extent acceptable
Michigan Municipal Securities are at any time unavailable for investment by
the Portfolio, the Portfolio invests primarily in other Municipal Securities
the interest on which is, in the opinion of bond counsel, exempt from federal,
but not State of Michigan, income tax.

Municipal Securities acquired by the Tax-Exempt Portfolio or Michigan
Portfolio include:

(1) Municipal bonds;

(2) Municipal notes;

(3) Variable rate demand notes;

(4) Tax-exempt commercial paper and floating rate
instruments; and

At least 80% of each of the Tax-Exempt Portfolio's and Michigan
Portfolio's total assets will be invested in Municipal Securities, except in
extraordinary circumstances, such as when the Adviser believes that market
conditions indicate that a Portfolio should adopt a temporary defensive
position by holding uninvested cash or investing in taxable short term
securities ("Taxable Investments"), such as those in which the Money Market
Portfolio may invest. This policy is fundamental with respect to the Tax-
Exempt Portfolio and Michigan Portfolio and may not be changed without the
approval of the holders of a majority of a Portfolio's outstanding shares. In
addition, with respect to the Michigan Portfolio, at least 65% of its total
assets will be invested under normal market conditions in Michigan Municipal
Securities and the remainder may be invested in securities that are not
Michigan Municipal Securities and therefore may be subject to Michigan income
taxes. A security is included within the term "Municipal Securities" only if
the interest paid thereon is exempt from regular federal income tax and not
treated as a specific tax preference item under the federal alternative
minimum tax. See "Taxes."

Policies Applicable To All Portfolios

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See "Investment Objectives, Policies and Risk Factors" in the Statement of
Additional Information for a more complete description of eligible securities.
A description of ratings is contained in the Statement of Additional
Information.

OTHER INVESTMENT POLICIES

Bank Obligations

Commercial Paper

Government Obligations

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issuer to borrow from the Treasury; others, such as those of the Federal
National Mortgage Association, are supported by the discretionary authority of
the U.S. Government to purchase the agency's obligations; still others, such
as those of the Student Loan Marketing Association, are supported only by the
credit of the instrumentality. No assurance can be given that the U.S.
Government would provide financial support to U.S. Government-sponsored
instrumentalities if it is not obligated to do so by law. Some of these
investments may be variable or floating rate instruments.

Variable and Floating Rate Obligations

Repurchase and Reverse Repurchase Agreements

Lending Portfolio Securities

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securities of the U.S. Government, its agencies or instrumentalities, some of
which may bear maturities exceeding 13 months. Such loans will not be made if,
as a result, the aggregate of all outstanding loans of a particular Portfolio
exceeds one-third of the value of its total assets. Loans of securities
involve risks of delay in receiving additional collateral or in recovering the
securities loaned or possibly loss of rights in the collateral should the
borrower of the securities become insolvent. In the event a Portfolio is
unable to recover the securities loaned in a particular transaction, it will
promptly sell any collateral which bears a maturity exceeding 13 months. Loans
will be made only to borrowers that provide the requisite collateral comprised
of liquid assets and when, in the Adviser's judgment, the income to be earned
from the loan justifies the attendant risks.

When-Issued Securities

Each Portfolio may purchase portfolio securities on a "when-issued"
basis and may purchase or sell such securities on a "forward commitment"
basis. These transactions involve commitment by a Portfolio to purchase or
sell particular securities with payment and delivery taking place in the
future, beyond the normal settlement date, at a stated price and yield.
Securities purchased on a when-issued basis or forward commitment basis
involve a risk of loss if the value of the security to be purchased declines
prior to the settlement date, or if the value of the security to be sold
increases prior to the settlement date. When a Portfolio enters into such
transactions, the Custodian will maintain in a segregated account cash or
liquid portfolio securities equal to the amount of the commitment. The
Portfolios do not earn income with respect to these transactions until the
subject securities are delivered to the Portfolios. The Portfolios do not
intend to purchase when-issued securities for speculative purposes but only
for the purposes of acquiring portfolio securities. Each Portfolio's when-
issued purchases and forward commitments are not expected to exceed 25% of the
value of its total assets absent unusual market conditions.

Municipal and Related Securities

Municipal Securities may include general obligations, revenue
obligations, notes, and moral obligation bonds. General obligations are
secured by the issuer's pledge of its full faith, credit and taxing power for
the payment of principal and interest. Revenue obligations are payable only
from the revenues derived from a particular facility, class of facilities or,
in some cases, from the proceeds of a special excise or other specific revenue
source such as the user of the facility being financed. Private activity bonds
(i.e. bonds issued by industrial development authorities) are in most cases
revenue securities and are not payable from the unrestricted revenues of the
issuer. Consequently, the credit quality of a private activity bond is usually
directly related to the credit standing of the private user of the facility
involved. Notes are short-term instruments which are obligations of the
issuing municipalities or agencies and are sold in anticipation of a bond
sale, collection of taxes or receipt of other revenues. Moral obligation bonds
are normally issued by special purpose public authorities. If the issuer of a
moral obligation bond is unable to meet its debt service obligations from
current revenues, it may draw on a reserve fund, the restoration of which is a
moral commitment but not a legal obligation of the state or municipality which
created the issuer. Municipal Securities also include municipal lease/purchase
agreements which are similar to installment purchase contracts for property or
equipment issued by municipalities. Municipal lease/purchase agreements may be
considered illiquid investments.
See "Restricted Securities."

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the participation interest is unrated, or has been given a rating below that
which otherwise is permissible for purchase by the Portfolio, the
participation interest will be backed by an irrevocable letter of credit or
guarantee of a bank that the Trust's Board of Trustees has determined meets
the prescribed quality standards for banks set forth below, or the payment
obligation otherwise will be collateralized by U.S. Government securities. For
certain participation interests, the Portfolio will have the right to demand
payment, on not more than seven days' notice, for all or any part of the
Portfolio's participation interest in the Municipal Security, plus accrued
interest. As to these instruments, the Portfolio intends to exercise its right
to demand payment only upon a default under the terms of the Municipal
Security, as needed to provide liquidity to meet redemptions, or to maintain
or improve the quality of its investment portfolio. Participation interests
that do not have this demand feature will be considered illiquid investments.

The Tax-Exempt Portfolio has no policy of seeking particularly to
invest in Municipal Securities issued by or within any single state or select
group of states. However, certain states traditionally are sources of large
amounts of Municipal Securities, e.g., California, Colorado, Florida,
Michigan, New York and Texas. The Portfolio may from time to time have more
than 25% of its assets invested in securities issued by or from any of the
above states. To the extent that the Portfolio's assets are invested in
Municipal Securities issued by or from a single state or a few states, the
Portfolio will be subject to the peculiar risks presented by the laws and
economic conditions relating to such state or states to a greater extent than
would be the case if its assets were not so concentrated. If any state or
political subdivision thereof were to suffer serious financial difficulties
jeopardizing its ability to pay its obligations, the marketability of such
obligations held by the Portfolio, and consequently its net asset value, could
be adversely affected.

Special Risk Considerations Applicable to the Michigan Portfolio

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The heavy concentration of the Michigan Portfolio in Michigan
Municipal Securities and the cyclical nature of the economy of the State of
Michigan may adversely affect the liquidity of the Portfolio.

Guaranteed Investment Contracts

The Money Market Portfolio may make limited investments in guaranteed
investment contracts ("GICs") issued by highly rated U.S. insurance companies.
Pursuant to such contracts, the Portfolio makes cash contributions to a
deposit fund of the insurance company's general account. The insurance company
then credits to the Portfolio on a monthly basis guaranteed interest which is
based on an index (in most cases this index will be the Salomon Brothers CD
Index). The GICs provide that this guaranteed interest will not be less than a
certain minimum rate. Generally, a GIC allows a purchaser to buy an annuity
with the monies accumulated under contract; however, the Portfolio will not
purchase any such annuity. A GIC is a general obligation of the issuing
insurance company and not a separate account. The purchase price paid for a
GIC becomes a part of the general assets of the issuer, and the contract is
paid from the general assets of the issuer. The Portfolio will only purchase
GICs from issuers which meet quality and credit standards established by the
Adviser. Generally, GICs are not assignable or transferable without the
permission of the issuing insurance companies, and an active secondary market
in GICs does not currently exist. Therefore, GICs are considered by the
Portfolio to be illiquid investments and subject to the limitation on illiquid
investments set forth below.

Restricted Securities

Securities of Other Investment Companies

Within the limits prescribed by the 1940 Act, each Portfolio may
invest in securities issued by other investment companies which invest in high

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quality, short term debt securities and which determine their net asset value
per share based on the amortized cost or penny-rounding method. As a
shareholder of another investment company, a Portfolio would bear, along with
other shareholders, its pro rata portion of the other investment company's
expenses, including advisory fees. These expenses would be in addition to the
advisory and other expenses that a Portfolio bears directly in connection with
its own operations.

Miscellaneous

The Trust will give 30 days notice to investors of any material change
in any Portfolio's investment policies.

Investment Limitations

Each Portfolio is subject to a number of investment limitations. The
following investment limitations are matters of fundamental policy and may not
be changed with respect to a particular Portfolio without the affirmative vote
of the holders of a majority of the Portfolio's outstanding shares. Other
investment limitations that cannot be changed without a vote of shareholders
are contained in the Statement of Additional Information under "Investment
Objectives, Policies and Risk Factors."

No Portfolio may:

Each of the Treasury and Michigan Portfolios may not invest more than
10% of its total assets in illiquid investments. See "Restricted Securities"
above.

With respect to 75% of its assets, the Tax-Exempt Portfolio may not
invest more than 5% of its assets in the securities of any one issuer, except
U.S. Government Obligations.

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In addition, the Tax-Exempt Portfolio may not invest less than 80% of
its net assets in securities the interest on which is exempt from federal
income tax, except during temporary defensive periods.

The Michigan Portfolio may not:

2. With respect to 50% of its total assets, invest more than 5% of its
assets in the securities of any one issuer, except U.S. Government Obligations
or securities of other regulated investment companies.

For purposes of the Investment Limitation above applicable to the
Money Market, Government, Treasury and Tax-Exempt Portfolios and No. 2 above
applicable to the Michigan Portfolio: (i) a security is considered to be
issued by the government entity (or entities) whose assets and revenues back
the security, or, with respect to a private activity bond that is backed only
by the assets and revenues of a nongovernmental user, a security is considered
to be issued by such nongovernmental user; (ii) in certain circumstances, the
guarantor of a guaranteed security may also be considered to be an issuer in
connection with such guarantee; and (iii) U.S. Government Obligations
(including securities backed by the full faith and credit of the United
States) are deemed to be U.S. Government obligations for purposes of the 1940
Act.

Generally, if a percentage limitation is satisfied at the time of
investment, a later increase or decrease in such percentage resulting from a
change in value of a Portfolio's securities will not constitute a violation of
the limitation for purposes of the 1940 Act.

PURCHASE OF SHARES

In General

Class I shares are sold primarily to NBD and its affiliated and
correspondent banks (the "Banks") acting on behalf of their respective
customers. The Banks may impose different minimum investment and other
requirements, as well as account charges, on their customers and may establish
separate operational arrangements by which shares may be purchased and
redeemed. Customers should contact their Banks for further information.

It is the responsibility of the Banks to transmit their customers'
purchase orders to NBD acting as transfer agent (the "Transfer Agent") and to
deliver required funds on a timely basis. Class I shares will normally be held
of record by the Banks. Confirmations of share purchases and redemptions will
be sent to the Banks. Beneficial ownership of Class I shares will be recorded
by the Banks and reflected in the account statements provided by them to their
customers.

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federal funds prior to noon and 3:00 p.m., Eastern time, respectively, and the
shares purchased will thus be eligible for that day's dividend, and otherwise
such purchase will be effected, and dividends will begin to accrue, on the
following business day.

Questions concerning the purchase of shares should be directed to the
Transfer Agent at (800) 688-3350.

Net Asset Value and Pricing of Shares

The net asset value of each Portfolio for purposes of pricing purchase
and redemption orders is determined by the Adviser as of noon and as of 3:00
p.m., Eastern Time, on each day the New York Stock Exchange ("Exchange"),
NBD Bank or its bank affiliates are open for business ("Business Day") except:
(i) those holidays which the Exchange, NBD Bank or its bank affiliates observe
(currently New Year's Day, Dr. Martin Luther King, Jr. Day, Presidents' Day,
Good Friday, Memorial Day (observed), Independence Day, Labor Day, Columbus
Day, Veterans' Day, Thanksgiving Day and Christmas Day); and (ii) those
Business Days on which the Exchange closes prior to the close of its
regular trading hours ("Early Closing Time"), in which event the net
asset value of each Portfolio will be determined and its shares will be
priced as of such Early Closing Time. Net asset value per Class I share
of a Portfolio is calculated by dividing the value of all securities
and other assets belonging to the Portfolio allocable to that Class I,
less the liabilities charged to that Class I, by the number of the
outstanding shares of such Class I.

REDEMPTION OF SHARES

Redemption orders are effected at the net asset value next determined
after receipt by the Transfer Agent of a proper notice of redemption. It is
the responsibility of the Banks to transmit redemption orders to the Transfer
Agent and credit their customers' accounts with the redemption proceeds on a
timely basis.

Written and telephone redemption requests will be effected on the same
Business Day if the request is received by the Transfer Agent with respect to
the Tax-Exempt and Michigan Portfolios before noon, Eastern time, and with
respect to the Money Market, Government and Treasury Portfolios, before 3:00
p.m., Eastern time. Redemption requests received after noon and 3:00 p.m.,
Eastern time, respectively, will normally be effected on the next Business Day
(and in any event within seven calendar days).

The Trust will make payment for redeemed shares within the time period
prescribed by the settlement requirements of the Securities Exchange Act of
1934 after receipt by the Transfer Agent of a request in proper form. If
shares to be redeemed were purchased by check, the Trust will transmit the
redemption proceeds promptly upon clearance of such check, which could take up
to fifteen days from the purchase date. A shareholder of record having
purchased shares by wire must have filed an account application before any
redemption requests can be honored.

Written requests to redeem shares having a net asset value of more
than $50,000 must have all signatures of the registered owner(s) or their
authorized legal representative guaranteed by a commercial bank or trust
company which is a member of the Federal Reserve System or FDIC, a member firm
of a national securities exchange or a savings and loan association. A
signature guaranteed by a savings bank or notarized by a notary public is not
acceptable. A signature guarantee will also be required for a redemption
request (in any amount) if the address of record for the account has been
changed within the previous 15 days or which requests that the proceeds be
paid to an account other than the one preauthorized on the application, a
payee or payees other than the registered owners of the account, or an address
other than the address of record. The Trust may require additional supporting

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documents for redemptions made by corporations, fiduciaries, executors,
administrators, trustees, guardians and institutional investors.

Currently, the Trust imposes no charge when shares are redeemed.
However, Banks may charge a fee for providing services in connection with
investments in shares. The Trust reserves the right to redeem accounts
involuntarily, after sixty days' notice, if redemptions cause the account's
value to remain at $400 or less. Under certain circumstances, the
Trust may make payment for redemptions in securities or other property.

Questions concerning the proper form for redemption requests should be
directed to the Transfer Agent at (800) 688-3350.

PERFORMANCE AND YIELD INFORMATION

From time to time, in advertisements or in reports to shareholders the
performance and yields of each class of shares of the Portfolios may be quoted
and compared to the performance and yields of other mutual funds with similar
investment objectives and to stock or other relevant indices or to rankings
prepared by independent services or other financial or industry publications
that monitor the performance of mutual funds. For example, yields of the Money
Market, Government and Treasury Portfolios may be compared to the Donoghue's
Money Fund Average, Donoghue's Government Money Fund Average and Donoghue's
Treasury Money Fund Average, respectively, which are averages compiled by
IBC/Donoghue's Money Fund Report, a widely recognized independent publication
that monitors the performance of money market funds, or to the average yields
reported by the Bank Rate Monitor for money market deposit accounts offered by
the 50 leading banks and thrift institutions in the top five standard
metropolitan statistical areas. The yields of the Tax-Exempt Portfolio and
Michigan Portfolio may be compared to the Donoghue's Tax-Free Money Fund
Average. Performance and yield data as reported in national financial
publications including, but not limited to, Money Magazine, Forbes, Barron's,
The Wall Street Journal and The New York Times, or in publications of a local
or regional nature, may also be used in comparing the performance and yields
of the Portfolios.

Performance of each class of shares is based on historical earnings
and will fluctuate and is not intended to indicate future performance. Since
yields fluctuate, yield data cannot necessarily be used to compare an
investment in a class' shares with bank deposits, savings accounts and similar
investment alternatives which often provide an agreed or guaranteed fixed
yield for a stated period of time. Performance and yield are generally
functions of kind and quality of the instruments held in a portfolio,
portfolio maturity, operating expenses and market conditions. Any fees charged
by financial institutions directly to their customer accounts in connection
with investments in shares will not be reflected in performance calculations.

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DIVIDENDS AND DISTRIBUTIONS

Each Portfolio's net investment income will be declared daily as a
dividend to shareholders of record at the close of business on the day of
declaration. Shareholders will receive dividends in additional Class I shares
of the applicable Portfolio unless they elect to receive cash. Shareholders
must make such election, or any revocation thereof, in writing to their Banks.
If an account is established with telephone privileges, the registered owner
or his preauthorized legal representative may change the election to receive
dividends in cash to an election to receive dividends in shares by telephoning
the Transfer Agent at (800) 688-3350. The election will become effective
with respect to dividends paid after its receipt. Reinvestment or
payment of dividends will be effected monthly at the net asset value per Class
I share of the applicable Portfolio on the date effected, and will include
fractional shares if necessary. If cash payment is requested, checks will be
mailed within five Business Days after the last day of each month.

TAXES

Federal Taxes

Qualification as a regulated investment company for a taxable year
requires, among other things, that each Portfolio distribute to its
shareholders an amount equal to at least the sum of 90% of 23 its tax-exempt
interest income net of certain deductions and 90% of its investment company
taxable income for each taxable year. In general, a Portfolio's investment
company taxable income will be its taxable income, including interest, subject
to certain adjustments and excluding the excess of any net long term capital
gain for the taxable year over the net short term capital loss, if any, for
such year. Each Portfolio's policy is to distribute as dividends substantially
all of its investment company taxable income each year. Such dividends will be
taxable as ordinary income to the Portfolio's shareholders who are not
currently exempt from federal income taxes, whether such income or gain is
received in cash or reinvested in additional shares. (Federal income taxes for
distributions to an IRA are deferred under the Code.) In the case of the
Tax-Exempt Portfolio and Michigan Portfolio, dividends derived from tax-exempt
interest income ("exempt-interest dividends") may be treated by shareholders
as items of interest excludable from their gross income under Section 103(a)
of the Code unless under the circumstances applicable to the particular
shareholder the exclusion would be disallowed. (See Statement of Additional
Information under "Additional Information Concerning Taxes.") An
exempt-interest dividend is any dividend or part thereof (other than a capital
gain dividend) paid by the Tax-Exempt Portfolio or Michigan Portfolio and
designated as an exempt-interest dividend in a written notice mailed to
shareholders not later than sixty days after the close of the Portfolio's
taxable year which does not exceed in its aggregate the net Municipal
Securities interest received by the Portfolio for the taxable year. It is
anticipated that no part of any distribution by the Portfolios will be
eligible for the dividends received deduction for corporations. In addition,
none of the Portfolios expects to pay capital gain dividends within the
meaning of the Code.

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interest dividends will be taken into account in determining the taxability of
such benefits.

Shareholders will be advised at least annually as to the federal
income tax consequences of distributions made each year.

State and Local Taxes

The Trust may be subject to state or local taxes in jurisdictions in
which the Trust may be deemed to be doing business. In addition, in those
states or localities which have income tax laws, the treatment of the Trust
and its shareholders under such laws may differ from treatment under federal
income tax laws. In certain states, review with a shareholder's tax adviser of
the effect of portfolio investments in repurchase agreements and U.S.
Government Obligations upon state income taxation may be appropriate.
Shareholders are advised to consult their tax advisers concerning the
application of state and local taxes, which may have different consequences
from those of the federal income tax laws.

MANAGEMENT

Trustees and Officers of the Trust

*Earl I. Heenan, Jr., Chairman and President

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* Trustees who are "interested persons" of the Trust, as defined in the
1940 Act.

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*Eugene C. Yehle, Trustee and Treasurer

Retired; Director of Investor Relations and Pension Investments, Dow
Chemical Company (1972-1985); Trustee, Alma College (since 1978); Trustee
(since 1977) and Chairman (since 1983), Charles J. Strosacker Foundation;
Trustee (1989-1993), Higgins Lake Foundation. He is 76 years old and his
address is 4501 Linden Drive, Midland, Michigan 48640.

Will M. Caldwell, Trustee

Nicholas J. De Grazia, Trustee

John P. Gould, Trustee

Steven G. Rothmeier Professor (since January, 1996); Distinguished
Service Professor of Economics of the University of Chicago Graduate School
of Business (since 1984); Dean of the University of Chicago Graduate School
of Business (1983-1993); Member of Economic Club of Chicago and Commercial
Club of Chicago, Director of Harbor Capital Advisors and Dimensional Fund
Advisors; Trustee, Prairie Family of Funds. He is 57 years old and his address
is University of Chicago School of Business, 1101 East 58th Street, Chicago,
Illinois 60637.

Marilyn McCoy, Trustee

Julius L. Pallone, Trustee

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* Trustees who are "interested persons" of the Trust, as defined in the
1940 Act.

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*Donald G. Sutherland, Trustee

Partner of the law firm Ice, Miller, Donadio & Ryan, Indianapolis,
Indiana. He is 67 years old, and his address is One American Square, 34th
Floor, Indianapolis, Indiana 46204.

Donald L. Tuttle, Trustee

Vice President (since 1995), Senior Vice President (1992-1995),
Association for Investment Management and Research; Senior Professor
of Finance, Indiana University (1970-1991); Vice President, Trust &
Investment Advisers, Inc. (1990-1991); Director, Federal Home Loan
Bank of Indianapolis (1981 to 1985). He is 61 years old, and his
address is 5 Boar's Head Lane, Charlottesville, Virginia 22903.

W. Bruce McConnel, III, Secretary

Partner of the law firm Drinker Biddle & Reath, Philadelphia,
Pennsylvania. He is 53 years old, and his address is 1345 Chestnut Street,
Philadelphia, Pennsylvania 19107.

Investment Adviser, Custodian and Transfer Agent

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* Trustees who are "interested persons" of the Trust, as defined in the
1940 Act.

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If NBD were prohibited from performing investment advisory, custodial
or transfer agency services for the Trust, it is expected that the Board of
Trustees would recommend that shareholders approve new agreements with another
entity or entities qualified to perform such services and selected by the
Board. If NBD or its affiliates were required to discontinue all or part of
its shareholder servicing activities, their customers would be permitted to
remain the beneficial owners of Trust shares and alternative means for
continuing the servicing of such customers would be sought. The Trust does not
anticipate that investors would suffer any adverse financial consequences as a
result of these occurrences.

Sponsors and Co-Distributors

FoM, a Delaware corporation and a wholly owned subsidiary of First of
Michigan Capital Corporation, is a sponsor and Co-Distributor of the Trust's
shares. It is engaged in the securities underwriting and securities and
commodities brokerage business and is a member of the New York Stock Exchange,
Inc., other major securities and commodities exchanges and the National
Association of Securities Dealers, Inc. FoM participates as a member of
various selling groups or as agent of other investment companies, executes
orders on behalf of investment companies for the purchase and sale of their
securities and sells securities to such companies as a broker or dealer in
securities. On December 31, 1995, FoM had a net worth of $37,231,000.

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Service and Distribution Plan

The Trust has adopted its Distribution Plan pursuant to Rule 12b-1
under the 1940 Act (the "Plan"). Under the Plan, the Trust incurs expenses
primarily intended to result in the sale of the Trust's shares in an amount
not to exceed .35 of 1% of the value of each portfolio's average daily net
assets calculated as follows in the case of the Portfolios: (i) fees payable
to the Co-Distributors pursuant to the Distribution Agreement; (ii) the actual
costs and expenses in connection with advertising and marketing the
Portfolios' shares; and (iii) fees pursuant to agreements with securities
dealers, financial institutions, and other professionals ("Service Agents")
for administration or servicing of Portfolio shareholders ("Servicing").
Servicing may include, among other things: answering client inquiries
regarding the Trust and the Portfolios; assisting clients in changing dividend
options, account designations and addresses; performing sub-accounting;
establishing and maintaining shareholder accounts and records; processing
purchase and redemption transactions; investing client cash account balances
automatically in Portfolio shares; providing periodic statements showing a
client's account balance and integrating such statements with those of other
transactions and balances in the client's other accounts serviced by the
Service Agent; arranging for bank wires; and such other services as the Trust
may request, to the extent the Service Agent is permitted by applicable
statute, rule or regulation. Under the Plan, the Trust also bears the cost of
preparing and printing Prospectuses for use in selling shares of the Trust and
costs associated with implementing and operating the Plan. These costs are
included in computing the .35 of 1% limitation set forth above.

Trust Expenses

The Trust is responsible for the payment of its expenses. These
include, for example, fees payable to NBD as Adviser, or expenses otherwise
incurred by the Trust in connection with the management of the investment of
the Trust's assets, the fees and expenses of NBD as the Trust's Custodian and
as its Transfer Agent, the fees payable to the Co-Distributors under the
Distribution Agreement, the fees and expenses of Trustees, expenses associated
with the Trust's Distribution Plan and Shareholder Servicing Plan, outside
auditing and legal expenses, all taxes and corporate fees payable by the

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Trust, SEC fees, state securities qualification fees, costs of preparing and
printing prospectuses for regulatory purposes and for distribution to
shareholders, costs to shareholder reports and shareholder meetings, and any
extraordinary expenses. Each Portfolio also pays for brokerage commissions and
transfer taxes (if any) in connection with the purchase and sale of portfolio
securities. Expenses attributable to a particular portfolio of the Trust will
be charged to that portfolio and expenses not readily identifiable as
belonging to a particular portfolio will be allocated by the Board of Trustees
among one or more portfolios in such a manner as it deems fair and equitable.
For the fiscal year ended December 31, 1995, the Money Market, Government,
Treasury, Tax-Exempt and Michigan Portfolios' total expenses were .51%, .51%,
.53%, .53% and .69% (after fee waivers) of their average net assets,
respectively. The Statement of Additional Information describes in more detail
the fees and expenses borne by the Trust.

OTHER INFORMATION

The Trust was organized as a Massachusetts business trust on April 21,
1987 under a Declaration of Trust, which was amended and restated as of May 1,
1992. The Trust is a series fund having seventeen series of shares of
beneficial interest, each of which evidences an interest in a separate
investment portfolio. The Declaration of Trust permits the Board of Trustees
to issue an unlimited number of full and fractional shares and to create an
unlimited number of series of shares ("Series") representing interests in a
portfolio and an unlimited number of classes of shares within a Series. In
addition to the Portfolios described herein, the Trust offers the following
investment portfolios: the Woodward Intermediate Bond Fund, Bond Fund, Short
Bond Fund, Municipal Bond Fund, Michigan Municipal Bond Fund, Growth/Value
Fund, Opportunity Fund, Intrinsic Value Fund, Capital Growth Fund, Balanced
Fund, International Equity Fund and Equity Index Fund. The Trust has
established the following two distinct classes of shares within each Portfolio:
described herein Class I shares (Special Class 1) and Class A shares
(Original Class). A sales person and any other person or institution
entitled to receive compensation for selling or servicing shares may receive
different compensation with respect to different classes of shares in the
Series.

Shareholders are entitled to one vote for each full share held, and a
proportionate fractional vote for each fractional share held, and each Series
entitled to vote on a matter will vote thereon in the aggregate and not by
Series, except as otherwise expressly required by law or when the Board of
Trustees determines that the matter to be voted on affects only the interests
of shareholders of a particular Series. In addition, shareholders of each of
the Series have equal voting rights except that only shares of a particular
class within a Series are entitled to vote on matters affecting only that
class. Voting rights are not cumulative, and accordingly the holders of more
than 50% of the aggregate number of shares of all Trust portfolios may elect
all of the Trustees.

-28-

<PAGE>

[ BACK COVER, COLUMN 1 ]

No person has been authorized to give any information or to make any
representations not contained in this Prospectus, or in the Portfolios'
Statement of Additional Information incorporated herein by reference, in
connection with the offering made by this Prospectus and, if given or made,
such information or representations must not be relied upon as having been
authorized by the Trust, Adviser or Sponsors and Co-Distributors. This
Prospectus does not constitute an offering by the Portfolios or by their
Co-Distributors in any jurisdiction in which such offering may not lawfully be
made.

TABLE OF CONTENTS Page

EXPENSE SUMMARY.............................. 2
BACKGROUND................................... 4
FINANCIAL HIGHLIGHTS......................... 5
INTRODUCTION................................. 9
PROPOSED REORGANIZATION...................... 9
INVESTMENT OBJECTIVES,
POLICIES AND RISK
FACTORS.............................. 9
OTHER INVESTMENT POLICIES.................... 12
PURCHASE OF SHARES........................... 18
REDEMPTION OF SHARES......................... 19
PERFORMANCE AND YIELD
INFORMATION.......................... 20
DIVIDENDS AND DISTRIBUTIONS.................. 21
TAXES ..................................... 21
MANAGEMENT................................... 22
OTHER INFORMATION............................ 27

Investment Adviser:
NBD Bank
Detroit, Michigan 48226
Sponsors and Co-Distributors:
First of Michigan Corporation
Detroit, Michigan 48243
Essex National Securities,
Inc.
Napa, California 94558
Custodian and Transfer Agent:
NBD Bank
Troy, Michigan 48007-7058
Legal Counsel:
Drinker Biddle & Reath
Philadelphia, PA 19107
<PAGE>
[ BACK COVER, COLUMN 2 ]

CLASS I SHARES OF THE:

WOODWARD MONEY MARKET FUND

WOODWARD GOVERNMENT FUND

WOODWARD TREASURY MONEY MARKET FUND

WOODWARD TAX-EXEMPT MONEY MARKET
FUND

WOODWARD MICHIGAN TAX-EXEMPT MONEY
MARKET FUND

THE WOODWARD FUNDS(R)

Prospectus
April 15, 1996

-29-

<PAGE>

- ------------------------------------------------------------------------------
PROSPECTUS April 15, 1996
- ------------------------------------------------------------------------------
THE WOODWARD FUNDS
c/o NBD Bank, Transfer Agent
P.O. Box 7058
Troy, Michigan 48007-7058

24 Hour yield and performance information
Purchase and Redemption orders:
(800) 688-3350
- -------------------------------------------------------------------------------
The Woodward Funds (the "Trust") is offering in this Prospectus shares
in the following six investment portfolios (the "Portfolios"), each having its
own investment objective and policies as described in this Prospectus:

Class A shares of the:

Woodward Growth/Value Fund
Woodward Opportunity Fund
Woodward Intrinsic Value Fund
Woodward Capital Growth Fund
Woodward Balanced Fund
Woodward International Equity Fund

This Prospectus sets forth concisely information that a prospective
investor should consider before investing. Investors should read this
Prospectus and retain it for future reference. Additional information about
the Trust, contained in a Statement of Additional Information, has been filed
with the Securities and Exchange Commission (the "SEC") and is available upon
request without charge by writing to The Woodward Funds at the address above.
The Statement of Additional Information bears the same date as this Prospectus
and is incorporated by reference in its entirety into the Prospectus.

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.
- ------------------------------------------------------------------------------

INVESTMENT ADVISER:

NBD Bank

<PAGE>

EXPENSE SUMMARY

<TABLE>
<CAPTION>
Inter-
Growth/ Oppor- Intrinsic Capital national
Value tunity Value Growth Balanced Equity
Portfolio(1) Portfolio(1) Portfolio(1) Portfolio(1) Portfolio(1) Portfolio(1)
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed
on Purchases............... 5.0% 5.0% 5.0% 5.0% 5.0% 5.0%
(as a percentage of
offering price)

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

ANNUAL FUND OPERATING EXPENSES
(as a percentage of
average net assets)
Management Fees............... .75% .75% .75% .75% .75% .75%
12b-1 Fees(2)................. .011% .015% .011% .005% .013% .004%
Shareholder Servicing Fees(3). .25% .25% .25% .25% .25% .25%
Other Expenses(4)
(before fee waivers and/or
expense reimbursements).... .039% .035% .089% 0.145% 0.327% 0.596%
(after fee waivers and/or
expense reimbursements).... N/A N/A N/A 0.125% .187% 0.406%
Total Operating Expenses
(before fee waivers and/or
expense reimbursements).... 1.05% 1.05% 1.10% 1.15% 1.34% 1.60%
(after fee waivers and/or
expense reimbursements).... N/A N/A N/A 1.13% 1.20% 1.41%
<FN>
- ---------------------

1. The expenses for each of the Portfolios have been restated to
reflect current expenses.

2. As a result of the payment of sales loads and 12b-1 fees, long-term
shareholders may pay more than the economic equivalent of the maximum
front-end sales charge permitted by the National Association of Securities
Dealers, Inc. (the "NASD"). Rules adopted by the NASD generally limit the
aggregate sales charges and payments under the Trust's Service and
Distribution Plan ("Distribution Plan") to a certain percentage of total new
gross share sales,

-2-

<PAGE>

plus interest. The Trust would stop accruing 12b-1 fees if, to the extent, and
for as long as, such limit would otherwise be exceeded.

3. The Trust has adopted a Shareholder Servicing Plan pursuant to
which the Trust may enter into agreements with institutions under which they
will render shareholder administrative support services for their customers
who beneficially own shares in return for a fee of up to .25% per annum of the
value of such shares ("Servicing Fees"). For further information,
see "Shareholder Servicing Plan" and "Investment Adviser, Custodian
and Transfer Agent" under the heading "Management" in this Prospectus.

4. Credits or charges not reflected in the expense table may be
incurred directly by customers of financial institutions in connection with an
investment in the Portfolios.
- -------------------
</TABLE>

<TABLE>
<CAPTION>
Inter-
Growth/ Oppor- Intrinsic Capital national
Value tunity Value Growth Balanced Equity
Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Example
You would pay the following
expenses on a $1,000
investment, assuming:
(1) a 5% annual return
and (2) redemption at the
end of each time period:
One Year.................. $ 10.76 $ 10.76 $ 11.27 $ 11.58 $ 12.30 $ 14.45
Three Years............... 33.57 33.57 35.15 36.09 38.30 44.91
Five Years................ 58.20 58.20 60.91 62.53 66.31 77.58
Ten Years................. 128.75 128.75 134.57 138.04 146.10 169.97
Example
You would pay the following
expenses on a $1,000
investment, assuming (1) a
5% annual return, (2)
redemption at the end
of each time period
and (3) the imposition
of a maximum sales load at
the beginning of the period:
One Year:................ $ 60.22 $ 60.22 $ 60.71 $ 61.00 $ 61.68 $ 63.72
Three Years:............. 81.89 81.89 83.39 84.29 86.39 92.67
Five Years:.............. 105.29 105.29 107.86 109.40 112.99 123.70
Ten Years:............... 172.32 172.32 177.84 181.14 188.80 211.47
</TABLE>

THE FOREGOING SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES OR RATES OF RETURN. ACTUAL EXPENSES OR RATE OF RETURN MAY BE
GREATER OR LESSER THAN THOSE SHOWN.

The examples demonstrate the projected dollar amount of total
cumulative expenses that would be incurred over various periods with respect
to a hypothetical investment in Class A shares in each of the Portfolios,
based upon payment by the Portfolios of operating expenses at the respective
levels set forth in the expense table. For more complete descriptions of
Portfolio expenses, see "Investment Adviser, Custodian and Transfer Agent",
"Sponsors and Co- Distributors", "Shareholder Servicing Plan", "Service and
Distribution Plan" and "Trust Expenses" under the heading "Management" in this
Prospectus and the financial statements and related notes contained in the
Statement of Additional Information.

-3-

<PAGE>

BACKGROUND

-4-

<PAGE>

FINANCIAL HIGHLIGHTS

The tables below provide supplementary information to the Portfolios'
financial statements contained in their Statement of Additional Information
and set forth certain information concerning the historic investment results
of Portfolio shares. They present a per share analysis of how each Portfolio's
net asset value has changed during the periods presented. The tables have been
derived from the Portfolios' financial statements which have been audited by
Arthur Andersen LLP, the Trust's independent public accountants, whose report
thereon is contained in the Statement of Additional Information along with the
financial statements. The financial data included in these tables should be
read in conjunction with the financial statements and related notes included
in the Statement of Additional Information. Further information about the
performance of the Portfolios is available in annual reports to shareholders.
The Statement of Additional Information and annual reports to shareholders may
be obtained from the Trust free of charge by calling (800) 688-3350.

<TABLE>
<CAPTION>
Growth/Value Portfolio
June 1, 1991
(Commencement
Year Ended Year Ended Year Ended Year Ended of Operations) to
December December December December December 31,
31, 1995 31, 1994 31, 1993 31, 1992 1991
---------- ---------- ---------- ---------- -----------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period...................... $10.67 $11.16 $10.51 $ 9.86 $10.00
Income from investment
operations:
Net investment income.......... 0.21 0.23 0.20 0.22 0.14
Net realized and unrealized
gains (losses) on
investments.................. 2.76 (0.17) 1.24 0.75 (0.14)
------ ------- ------ ------ -------
Total from investment
operations................... $ 2.97 $ 0.06 $ 1.44 $ 0.97 $ 0.00
------ ------ ------ ------ ------
Less distributions:
From net investment
income...................... $ (0.22) $ (0.21) $(0.20) $(0.22) $(0.14)
From realized
gains....................... (0.26) (0.30) (0.59) (0.10) (0.00)
In excess of realized
gains....................... 0.00 (0.01) 0.00 0.00 0.00
Tax return of capital.......... 0.00 (0.03) 0.00 0.00 0.00
------- ------- ------- ------- -------
Total distributions......... $ (0.48) $ (0.55) $ (0.79) $ (0.32) $ (0.14)
------- ------- ------- ------- -------
Net asset value, end of
period...................... $13.16 $10.67 $11.16 $10.51 $ 9.86
====== ====== ====== ====== ======

Total return(b).................. 28.04% 0.55% 13.79% 9.87% 0.17%(a)
Ratios/Supplemental Data
Net assets, end of period........ $737,167,067 $571,370,711 $429,635,045 $287,344,809 $238,085,630
Ratio of expenses to average
net assets..................... 0.84% 0.84% 0.83% 0.83% 0.85%(a)
Ratio of net investment income
to average net assets.......... 1.73% 2.07% 1.84% 2.20% 2.56%(a)
Portfolio turnover rate.......... 26.80% 28.04% 42.31% 16.28% 0.94%
Average Commission Rate.......... $0.04
<FN>
- ------------------------

(a) Annualized for periods less than one year for comparability
purposes. Actual annual values may be less than or greater than those shown.

(b) Total returns as presented do not include any applicable sales
load.
</TABLE>

-5-

<PAGE>

Opportunity Portfolio

June 1, 1991
(Commencement
Year Ended Year Ended Year Ended Year Ended of Operations) to
December December December December December 31,
31, 1995 31, 1994 31, 1993 31, 1992 1991
---------- ---------- ---------- ---------- -----------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period...................... $13.34 $14.49 $12.37 $10.40 $10.00
Income from investment
operations:
Net investment income.......... 0.06 0.07 0.10 0.11 0.09
Net realized and unrealized
gains (losses) on
investments.................. 2.57 (0.54) 2.87 2.43 0.43
------ ------- ------ ------ ------
Total from investment
operations................... $ 2.63 $ (0.47) $ 2.97 $ 2.54 $ 0.52
------ ------- ------ ------ ------
Less distributions:
From net investment
income....................... $(0.06) $(0.07) $(0.10) $(0.11) $(0.09)
From realized
gains........................ (0.76) (0.49) (0.75) (0.46) (0.03)
In excess of realized
gains......................... 0.00 (0.02) 0.00 0.00 0.00
Tax return of capital.......... 0.00 (0.10) 0.00 0.00 0.00
------- ------- ------ ------ ------
Total distributions........... $ (0.82) $ (0.68) $ (0.85) $ (0.57) $ (0.12)
------- ------- ------- ------- -------
Net asset value, end of
period......................... $15.15 $13.34 $14.49 $12.37 $10.40
====== ====== ====== ====== ======

Total return(b).................. 19.88% (3.27%) 24.01% 24.56% 8.92%(a)
Ratios/Supplemental Data
Net assets, end of period........ $650,952,268 $524,999,120 $365,664,513 $166,423,073 $108,046,450
Ratio of expenses to average
net assets..................... 0.89% 0.90% 0.86% 0.84% O.84%(a)
Ratio of net investment income
to average net assets.......... 0.37% 0.53% 0.71% 1.09% 1.56%(a)
Portfolio turnover rate 53.55% 37.51% 33.99% 34.44% 2.92%
Average Commission Rate.......... $0.04
<FN>
- ------------------------

(a) Annualized for periods less than one year for comparability
purposes. Actual annual values may be less than or greater than those shown.

(b) Total returns as presented do not include any applicable sales
load.
</TABLE>

-6-

<PAGE>

Intrinsic Value Portfolio

June 1, 1991
(Commencement
Year Ended Year Ended Year Ended Year Ended of Operations) to
December December December December December 31,
31, 1995 31, 1994 31, 1993 31, 1992 1991
---------- ---------- ---------- ---------- -----------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period...................... $10.48 $11.05 $10.40 $ 9.89 $10.00
Income from investment
operations:
Net investment income.......... 0.29 0.31 0.29 0.29 0.17
Net realized and unrealized
gains (losses) on
investments.................. 2.24 (0.38) 1.23 1.14 ( 0.02)
------ ------- ------ ------ -------
Total from investment
operations................... $ 2.53 $(0.07) $ 1.52 $ 1.43 $ 0.15
------- ------- ------ ------ ------
Less distributions:
From net investment
income....................... $(0.30) $(0.30) $(0.28) $(0.28) $(0.17)
From realized
gains........................ (0.82) (0.20) ( 0.59) ( 0.64) ( 0.09)
------ ------- ------- ------- -------
Total distributions............ $ (1.12) $ (0.50) $ (0.87) $ (0.92) $ (0.26)
------- ------- ------- ------- -------
Net asset value, end of
period......................... $11.89 $10.48 $11.05 $10.40 $9.89
====== ====== ====== ====== =====

Total return(b).................. 24.38% (0.60%) 14.71% 14.56% 2.70%(a)
Ratios/Supplemental Data
Net assets, end of period........ $255,884,859 $220,028,096 $192,555,183 $107,260,873 $77,450,163
Ratio of expenses to average
net assets..................... 0.91% 0.91% 0.86% 0.84% O.84%(a)
Ratio of net investment income
to average net assets.......... 2.49% 2.92% 2.67% 2.78% 3.03%(a)
Portfolio turnover rate.......... 45.55% 58.62% 63.90% 48.52% 1.80%
Average Commission Rate.......... $0.03
<FN>
- ------------------------

(a) Annualized for periods less than one year for comparability
purposes. Actual annual values may be less than or greater than those shown.

(b) Total returns as presented do not include any applicable sales
load.
</TABLE>

-7-

<PAGE>

Capital Growth Portfolio

July 2, 1994
(Commencement
Year Ended of Operations) to
December 31, December 31,
1995 1994
------------ -----------------
<S> <C> <C>
Net asset value, beginning of period .......... $ 10.44 $ 10.00

Income from investment operations:
Net investment income ....................... 0.08 0.05
Net realized and unrealized gains (losses) on
investments ............................... 2.93 0.43
--------------- ---------------
Total from investment operations ............ $ 3.01 $ 0.48
--------------- ---------------

Less distributions:
From net investment income .................. $ (0.08) $ (0.04)
From net realized gains ..................... (0.11) 0.00
--------------- ---------------
Total distributions ......................... $ (0.19) $ (0.04)
--------------- ---------------

Net asset value, end of period ................ $ 13.26 $ 10.44
=============== ===============

Total return (b) .............................. 28.90% 9.62%(a)

Ratios/Supplemental Data
Net assets, end of period ..................... $ 195,861,178 $ 81,269,604
Ratio of expenses to average net assets ....... 0.86% 0.85%(a)
Ratio of net investment income to average net
assets ...................................... 0.65% 1.25%(a)
Ratio of expenses to average net assets without
fee waivers/reimbursed expenses ............. 0.90% 0.95%(a)
Ratio of net investment income to average net
assets without fee waivers/reimbursed
expenses .................................... 0.61% 1.15%(a)
Portfolio turnover rate ....................... 6.97% 3.29%
Average Commission Rate ....................... $ 0.04
<FN>
- ---------------

(a) Annualized for periods less than one year for comparability
purposes. Actual annual values may be less than or greater than those shown.

(b) Total returns as presented do not include any applicable sales
load.
</TABLE>

-8-

<PAGE>

Balanced Portfolio

Year Ended Year Ended
December 31, December 31,
1995 1994
------------ ------------
<S> <C> <C>
Net asset value, beginning
of period .............................. $ 9.53 $ 10.00
Income from investment
operations:
Net investment income .................. 0.35 0.28
Net realized and unrealized
gains (losses) on
investments .......................... 1.83 (0.48)
-------------- --------------
Total from investment
operations ........................... $ 2.18 $ (0.20)
-------------- --------------
Less distributions:
From net investment
income ............................... $ (0.35) $ (0.27)
From realized
gains ................................ (0.12) 0.00
-------------- --------------
Total distributions .................... $ (0.47) $ (0.27)
-------------- --------------
Net asset value, end of
period ................................. $ 11.24 $ 9.53
============== ==============

Total return(a) .......................... 23.18% (1.95%)
Ratios/Supplemental Data
Net assets, end of period ................ $ 93,623,801 $ 54,167,192
Ratio of expenses to average
net assets ............................. 0.91% 0.85%
Ratio of net investment income
to average net assets .................. 3.40% 3.41%
Ratio of expenses to average net assets
without fee waivers/reimbursed expenses 1.09% 1.56%
Ratio of net investment income to average
net assets without fee waivers/reimbursed
expenses ................................ 3.22% 2.70%
Portfolio turnover rate .................. 31.76% 37.49%
Average Commission Rate .................. $ 0.05
<FN>
- ------------------------

(a) Total returns as presented do not include any applicable sales load.
</TABLE>

-9-

<PAGE>

International Equity Portfolio

December 3, 1994
Year Ended (Commencement
December 31, of Operations) to
1995 December 31, 1994
------------ -----------------
<S> <C> <C>
Net asset value, beginning
of period ............................. $ 10.01 $ 10.00
Income from investment
operations:
Net investment income ................. 0.10 0.01
Net realized and unrealized
gains (losses) on
investments ......................... 1.05 0.00
Total from investment
operations .......................... $ 1.15 $ 0.01
--------------- ---------------
Less distributions:
From net investment
income .............................. $ (0.11) $ 0.00
From realized
gains ............................... (0.00) 0.00
--------------- ---------------
Total distributions ................... $ (0.11) $ 0.00
--------------- ---------------
Net asset value, end of
period ................................ $ 11.05 $ 10.01
=============== ===============
Total return(b) ......................... 11.47% 1.26%(a)
Ratios/Supplemental Data
Net assets, end of period ............... $ 107,288,301 $ 36,545,470
Ratio of expenses to average
net assets ............................ 1.16% 1.15%(a)
Ratio of net investment income
to average net assets ................. 1.43% 1.18%(a)
Ratio of expenses to average net
assets without reimbursed
expenses .............................. 1.24% 1.92%(a)
Ratio of net investment income to average
net assets without reimbursed
expenses .............................. 1.35% 0.41%(a)
Portfolio turnover rate ................. 2.09% 0.30%
Average Commission Rate ................. $ 0.05
<FN>
- ------------------------

(a) Annualized for periods less than one year for comparability
purposes. Actual annual values may be less than or greater than those shown.

(b) Total return as presented does not include any applicable sales
load.
</TABLE>

-10-

<PAGE>

INTRODUCTION

The Trust is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"). The
Trust currently consists of seventeen investment portfolios, each of which
consists of a separate pool of assets with separate investment objective and
policies. However, only the Class A shares of the Growth/Value, Opportunity,
Intrinsic Value, Capital Growth, Balanced and International Equity Portfolios
are offered pursuant to this Prospectus. Each such Portfolio is classified as
a diversified investment portfolio under the 1940 Act.

PROPOSED REORGANIZATION

INVESTMENT OBJECTIVES, POLICIES AND RISK FACTORS

Growth/Value Portfolio

The investment objective of the Growth/Value Portfolio is to achieve
long-term capital appreciation and, secondarily, to produce current income
approximating that prevailing within the general equity market. The Portfolio
seeks to achieve this objective by investing primarily in equity securities of
relatively large companies. The Adviser believes that well managed, larger
companies historically have provided investors with attractive returns, high
liquidity and lower than average volatility. The Portfolio invests in
companies which the Adviser believes have earnings growth expectations that
exceed those implied by the market's current valuation. In addition, the
Portfolio seeks to maintain a portfolio of companies whose earnings will
increase at a faster rate than within the general equity market. The equity
portion of the portfolio generally will be constructed in a "bottom-up"
manner. "Bottom-up" refers to an analytical approach to securities selection
which first focuses on the company

-11-

<PAGE>

and company-related matters as contrasted to a "top-down" analysis which first
focuses on the industry or the economy. In the Adviser's opinion this
procedure may generally be expected to result in a portfolio characterized by
lower price/earnings ratios, above average growth prospects, and average
market risk.

Opportunity Portfolio

The investment objective of the Opportunity Portfolio is to achieve
long-term capital appreciation and, secondarily, to maintain a moderate level
of dividend income. The Portfolio seeks to achieve this objective by investing
primarily in equity securities of companies with small to intermediate market
capitalization. The Adviser believes that there are many companies in this
size range that enjoy enhanced growth prospects, operate in more stable market
niches, and have greater ability to respond to new business opportunities, all
of which increase their likelihood of attaining superior levels of
profitability and investment returns. However, they may escape many investors'
attention because they are less well known than some larger companies. Shares
of these companies may also be more volatile than those of larger companies,
so the Opportunity Portfolio can be expected to exhibit somewhat greater
volatility than market indices dominated by very large companies. The Adviser
intends to reduce the volatility and enhance the potential return of the
Portfolio's holdings by concentrating on companies which have demonstrated
records of superior profitability, maintain conservative balance sheets, and
are, in general, of above-average quality, although stocks of lesser quality
may be purchased by the Portfolio if the Adviser believes they offer
sufficient opportunity for capital appreciation.

Intrinsic Value Portfolio

The investment objective of the Intrinsic Value Portfolio is to
provide long-term capital growth, with income a secondary consideration. The
Portfolio seeks to achieve this objective by investing primarily in equity
securities of companies believed by the Adviser to represent a value or
potential worth which is not fully recognized by prevailing market prices. In
selecting investments for the Portfolio, screening techniques are employed to
isolate issues believed to be attractively priced. The Adviser then evaluates
the underlying earning power and dividend paying ability of these potential
investments. The Portfolio's holdings are usually characterized by lower
price/earnings, price/cash flow and price/book value ratios and by above
average current dividend yields relative to the equity market. Companies
purchased by the Portfolio are often deemed by the Adviser to be overlooked
and out of favor by the marketplace at the time of purchase. In general the
Portfolio's investments are diversified among industry groups that meet the
Portfolio's valuation criteria to attempt to reduce certain of the risks
inherent in common stock investments.

Capital Growth Portfolio

The investment objective of the Capital Growth Portfolio is to
maximize long-term capital appreciation with current income not a significant
consideration. The Portfolio seeks to achieve this objective by investing
primarily in equity securities of companies with a market capitalization of at
least $1 billion. In selecting investments for the Portfolio, the Adviser will
employ screening techniques and a research intensive approach emphasizing
superior, sustainable annual earnings growth which is supported by strong
revenue growth, margin expansion and conservative financial leverage. Because
of this growth orientation, certain market sectors may be over represented in
the Portfolio's investments; however, investments will be diversified among
industry groups and individual issuers. The value of the Portfolio's
investments will fluctuate based on market and specific industry conditions,
and other factors such as investment-style preferences. It is anticipated
that, generally, the dividend yield of the Portfolio will be less than or
equal to that of the broad

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equity market and will likely fluctuate. Therefore, the Portfolio is intended
for investors seeking long-term capital appreciation.

Investment Policies Applicable to the Growth/Value, Opportunity, Intrinsic Value
and Capital Growth Portfolios

The Growth/Value, Opportunity, Intrinsic Value and Capital Growth
Portfolios invest primarily in publicly traded common stocks of companies
incorporated in the United States, although each such Portfolio may also
invest up to 25% of its total assets in the securities of foreign issuers,
either directly or through American Depository Receipts. In addition, they may
invest in securities convertible into common stock, such as certain bonds and
preferred stocks, and may invest up to 5% of their respective net assets in
other types of securities having common stock characteristics (such as rights
and warrants to purchase equity securities). The Portfolios may also enter
into futures contracts and related options and may utilize options. Under
normal market conditions, each Portfolio expects to invest at least 65% of the
value of its total assets in equity securities. Each Portfolio may also hold
up to 35% of its total assets in short-term obligations issued or guaranteed
by the U.S. Government, or its agencies or instrumentalities, money market
instruments, repurchase agreements and cash.

Balanced Portfolio

The investment objective of the Balanced Portfolio is to achieve
long-term total return through a combination of capital appreciation and
current income. The Portfolio seeks to achieve its investment objective by
investing its assets primarily in three major asset groups: equity securities;
fixed income securities; and cash equivalent securities. In pursuing the
Portfolio's investment objective, the Adviser allocates the Portfolio's
investments primarily based on its evaluation of the long-term relative
attractiveness of the major asset groups. The Adviser bases its evaluations of
relative attractiveness on its outlook for the capital market. This outlook
includes, but is not limited to, judgments about where the economy appears to
be in the business cycle together with expectations for inflation, interest
rates, and long-term corporate earnings growth.

Under normal market conditions, the Portfolio's policy is to invest at
least 25% of the value of its total assets in fixed income senior securities
and no more than 75% in equity securities. Compliance with these percentage
requirements may limit the ability of the Portfolio to maximize total return.
The actual percentage of assets invested in equity securities, fixed income
securities and cash equivalent securities will vary from time to time,
depending on the judgment of the Adviser as to general market and economic
conditions, trends in yields, interest rates and changes in fiscal and
monetary developments.

Equity Securities. The equity securities in which the Balanced
Portfolio normally invests are common stocks, preferred stocks, rights,
warrants and securities convertible into common or preferred stocks. The
equity portion of the Balanced Portfolio's investments will be invested
primarily in publicly traded stocks of companies incorporated in the United
States, although up to 20% of its total assets may be invested in the equity
securities of foreign issuers, either directly or through American Depository
Receipts.

The Adviser selects equity securities for the Portfolio based on such
factors as general financial condition, price/earnings, price/cash flow and
price/book value ratios, above average current dividend yields relative to the
equity market, market share, product leadership and other investment criteria.
The Portfolio invests in the equity securities of companies which the Adviser
believes have earnings growth expectations that exceed those implied by the
market's current valuation and that will increase at a faster rate than within
the general equity market. The Adviser may also select equity securities of

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companies with small to intermediate market capitalization which enjoy
enhanced growth prospects, operate in market niches, and have greater ability
to respond to new business opportunities, all of which increase their
likelihood of attaining superior levels of profitability and investment
returns. The Adviser may also select equity securities of companies it
believes represent a value or potential worth which is not fully recognized by
prevailing market prices.

Debt Securities. The Balanced Portfolio invests the fixed income
portion of its portfolio of investments in a broad range of debt securities
rated "investment grade" or higher at the time of purchase, or unrated
investments deemed by the Adviser to be of comparable quality. Debt securities
in which the Portfolio normally invests are: (i) obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities; (ii)
corporate, bank and commercial obligations; (iii) securities issued or
guaranteed by foreign governments, their agencies or instrumentalities; (iv)
securities issued by supranational banks; (v) mortgage backed securities; and
(vi) securities representing interests in pools of assets. Investments include
fixed and variable-rate bonds, zero coupon bonds, debentures, and various
types of demand instruments. Obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities may include mortgage backed
securities, as well as "stripped securities" (both interest-only and
principal-only) and custodial receipts for Treasury securities. Most fixed
income obligations acquired by the Portfolio will be issued by companies or
governmental entities located within the United States. Up to 15% of the total
assets of the Portfolio may, however, be invested in dollar-denominated debt
obligations (including cash equivalent securities) of foreign issuers.

The Adviser manages the fixed income portion of the Portfolio based on
anticipated interest rate changes and the use of active management strategies
such as sector rotation, intra-sector adjustments and yield curve and
convexity considerations. In use of such active management strategies, the
Adviser seeks value in investment grade fixed income securities. Sector
rotation involves the Adviser selecting among different economic or industry
sectors based upon apparent or relative attractiveness. Thus at times a sector
offers yield advantages relative to other sectors. An intra-sector adjustment
occurs when the Adviser determines to select a particular issue within a
sector. Yield curve considerations involve the Adviser attempting to compare
the relationship between time to maturity and yield to maturity in order to
identify the relative value in the relationship. Convexity considerations
consist of the Adviser seeking securities that rise in price more quickly, or
decline in price less quickly, than the typical security of that price risk
level and therefore enable the Adviser to obtain an additional return when
interest rates change dramatically.

In acquiring particular fixed income securities for the Portfolio, the
Adviser will consider, among other things, historical yield relationships
between private and governmental debt securities, intermarket yield
relationships among various industry sectors, current economic cycles and the
attractiveness and creditworthiness of particular issuers. Depending upon the
Adviser's analysis of these and other factors, the Portfolio's holdings of
issues in particular industry sectors may be overweighted when compared to the
relative industry weightings in the Lehman Brothers Aggregate Bond Index, or
other recognized indices. The value of the fixed income portion of the
Portfolio can be expected to vary inversely with changes in prevailing
interest rates.

Cash Equivalent Securities and Other Investments. The cash equivalent
securities in which the Balanced Portfolio normally invests are short-term
obligations issued or guaranteed by the U.S. Government, or its agencies or
instrumentalities, "high quality" money market instruments such as
certificates of deposit, bankers' acceptances, time deposits, repurchase
agreements, reverse repurchase agreements, short-term obligations issued by
state and local governmental issuers which carry yields that are competitive
with those of other types of high quality money market instruments, commercial
paper, notes, other

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<PAGE>

short-term obligations and variable rate master demand notes. "High quality"
money market instruments are money market instruments which are rated at the
time of purchase within the two highest rating categories or which are unrated
at such time but are deemed by the Adviser to be of comparable quality. Such
investments may include obligations of foreign banks and foreign branches of
U.S. banks. The Portfolio may also invest its cash balances in securities
issued by other investment companies which invest in high-quality, short-term
debt securities. As a shareholder of another investment company, the Portfolio
would bear, along with other shareholders, its pro rata portion of the other
investment company's expenses, including advisory fees. These expenses would
be in addition to the advisory and other expenses that the Portfolio bears
directly in connection with its own operations.

The Balanced Portfolio may also enter into futures contracts
and related options and utilize options as more fully described below.

International Equity Portfolio

The investment objective of the International Equity Portfolio is to
achieve long-term capital appreciation and, secondarily, to produce current
income. The Portfolio seeks to achieve its objective by investing primarily in
equity securities of foreign issuers. The Portfolio may exhibit more
volatility than the U.S. equity market in general.

The Adviser's investment approach to managing the Portfolio's assets
emphasizes active country selection involving global economic and political
assessments together with valuation analysis of selected countries' securities
markets. This country allocation approach is based on absolute/relative
valuations, expected total returns including currency and changing
fundamentals. In situations where an investment's attractiveness outweighs
prospects for currency weakness, the Adviser will take suitable hedging
measures. An index approach is typically used at the stock selection level.

The Adviser employs quantitative techniques in conjunction with its
judgment and experience to determine the foreign equity markets that the
Portfolio will be invested in and the percentage of total assets the Portfolio
will hold by country. This investment approach focuses on economic
developments in foreign countries, fundamental analysis at the country level
and the political environment. After the country weightings have been
determined, investments are typically made in country "baskets" of equity
securities. A country "basket" is comprised of equity securities of a
particular country and is constructed using a quantitatively-oriented sampling
technique to replicate the performance of an individual country's stock market
index. The Morgan Stanley Capital International Country Indexes have, for some
time, been the accepted benchmarks in the U.S. for international equity fund
country comparisons. The Portfolio may also invest in individual equity
securities the Adviser believes offer opportunity for capital appreciation.

The Portfolio's investments will generally be diversified among
geographic regions and countries. The Portfolio's assets may be invested in
equity securities located in but not limited to the United Kingdom and
European continent, Japan, other Far East areas and Latin America. The
Portfolio may also invest in other regions seeking to capitalize on investment
opportunities in other parts of the world. The Portfolio's assets will be
invested at all times in the securities of issuers located in at least three
different foreign countries. Investments in a particular country may exceed
25% of the Portfolio's total assets, thus making its performance more
dependent upon the political and economic circumstances of a particular
country than a more widely diversified portfolio.

The Portfolio will be primarily invested in equity securities of
foreign companies consisting of common stocks, preferred stocks, rights,
warrants, and

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<PAGE>

securities convertible into common or preferred stock. Equity investments also
include American Depository Receipts, European Depository Receipts and similar
securities that are either sponsored or unsponsored. Under normal market
conditions, the Portfolio expects to invest at least 65% of the value of its
total assets in equity securities of foreign issuers. The Portfolio may hold
up to 35% of its total assets in debt securities, and cash equivalent holdings
consisting of short-term debt obligations and cash. However, the Portfolio
does not expect to have a substantial portion of its assets invested in debt
securities and cash equivalent holdings under normal market conditions. Debt
securities in which the Portfolio may invest consist of: (i) debt securities
of foreign issuers, foreign governments and agencies that the Adviser
believes, based on market conditions, the financial condition of the issuer,
general economic conditions and other relevant factors, offer opportunities
for capital appreciation; (ii) obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities; (iii) corporate, bank and
commercial obligations; (iv) mortgage backed securities; and (v) securities
representing interests in pools of assets. In the event the Adviser determines
that unusual and adverse market conditions exist, the Portfolio may adopt a
temporary defensive posture and invest without limitation in debt securities
and cash equivalent holdings. To the extent the Portfolio is so invested, its
investment objective may not be achieved.

The Portfolio may also enter into futures contracts, related options,
foreign currency transactions and forward contracts, and utilize options.

OTHER INVESTMENT POLICIES

Ratings

If not rated as commercial paper, debt obligations acquired by any of
the Portfolios will be investment grade at the time of purchase, i.e.,
obligations rated AAA, AA, A or BBB by Standard & Poor's Rating Group,
Division of McGraw Hill ("S&P"), Fitch Investors Service, Inc. ("Fitch"), Duff
& Phelps Credit Co. ("Duff") or IBCA, Inc. ("IBCA") or Aaa, Aa, A or Baa by
Moody's Investors Service, Inc. ("Moody's") (each a "Rating Agency") or be
unrated but deemed by the Adviser to be comparable in quality at the time of
purchase to instruments that are so rated. Obligations rated in the lowest of
the top four rating categories (Baa by Moody's or BBB by S&P, Fitch, Duff or
IBCA) are considered to have less capacity to pay interest and repay principal
and have certain speculative characteristics. The debt ratings are described
in the Statement of Additional Information.

Short-Term Investments

Each Portfolio may hold the types of short-term investments described
under "Balanced Portfolio - Cash Equivalent Securities and Other Investments"
above.

U.S. Government Obligations

The Portfolios may invest in all types of U.S. Government securities,
including U.S. Treasury bonds, notes and bills, and obligations of Federal
Home Loan Banks, Federal Farm Credit Banks, Federal Land Banks, the Federal
Housing Administration, Farmers Home Administration, Export-Import Bank of the
United States, Small Business Administration, Government National Mortgage
Association, Federal National Mortgage Association, General Services
Administration, Student Loan Marketing Association, Central Bank for
Cooperatives, Federal Home Loan Mortgage Corporation, Federal Intermediate
Credit Banks, Tennessee Valley Authority, Resolution Funding Corporation and
Maritime Administration. The Portfolios may also invest in interests in the
foregoing securities, including collateralized mortgage obligations guaranteed
by a U.S. Government agency or instrumentality, and in Government-backed
trusts which hold obligations of

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foreign governments that are guaranteed or backed by the full faith and credit
of the United States.

Obligations of certain U.S. Government agencies and instrumentalities
such as those of the Government National Mortgage Association, are supported
by the full faith and credit of the U.S. Treasury; others, such as the
Export-Import Bank of the United States, are supported by the right of the
issuer to borrow from the Treasury; others, such as those of the Federal
National Mortgage Association, are supported by the discretionary authority of
the U.S. Government to purchase the agency's obligations; still others, such
as those of the Student Loan Marketing Association, are supported only by the
credit of the instrumentality.

Securities issued or guaranteed by the U.S. Government, its agencies
or instrumentalities have historically involved little risk of loss of
principal if held to maturity. However, no assurance can be given that the
U.S. Government would provide financial support to U.S. Government-sponsored
instrumentalities if it is not legally obligated to do so.

Stripped Government Obligations

To the extent consistent with their respective investment objectives,
the Balanced and International Equity Portfolios may purchase Treasury
receipts and other "stripped" securities that evidence ownership in either the
future interest payments or the future principal payments on U.S. Government
obligations. These participations, which may be issued by the U.S. Government
(or a U.S. Government agency or instrumentality) or by private issuers such as
banks and other institutions, are issued at a discount to their "face value,"
and may include stripped mortgage backed securities ("SMBS"), which are
derivative multi-class mortgage securities. Stripped securities, particularly
SMBS, may exhibit greater price volatility than ordinary debt securities
because of the manner in which their principal and interest are returned to
investors.

SMBS are usually structured with two classes that receive different
proportions of the interest and principal distributions from a pool of
mortgage backed obligations. A common type of SMBS will have one class
receiving all of the interest, while the other class will receive all of the
principal. However, in some instances, one class will receive some of the
interest and most of the principal while the other class will receive most of
the interest and the remainder of the principal. If the underlying obligations
experience greater than anticipated prepayments of principal, a Portfolio may
fail to fully recoup its initial investment in these securities. The market
value of the class consisting entirely of principal payments generally is
extremely volatile in response to changes in interest rates. The yields on a
class of SMBS that receives all or most of the interest are generally higher
than prevailing market yields on other mortgage backed obligations because
their cash flow patterns are more volatile and there is a greater risk that
the initial investment will not be fully recouped.

Custodial Receipts for Treasury Securities

The Balanced and International Equity Portfolios may purchase
participations in trusts that hold U.S. Treasury securities (such as TIGRs and
CATs) where the trust participations evidence ownership in either the future
interest payments or the future principal payments on the U.S. Treasury
obligations. These participations are normally issued at a discount to their
"face value," and may exhibit greater price volatility than ordinary debt
securities because of the manner in which their principal and interest are
returned to investors.

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Repurchase and Reverse Repurchase Agreements

To increase its income, each Portfolio may agree to purchase portfolio
securities from financial institutions subject to the seller's agreement to
repurchase them at a mutually agreed-upon date and price ("repurchase
agreements"). No Portfolio will enter into repurchase agreements with the
Adviser, the Co-Distributors, or any of their affiliates. The seller under a
repurchase agreement will be required to maintain the value of the securities
subject to the agreement at not less than the repurchase price, marked to
market daily. Default by the seller would, however, expose a Portfolio to
possible loss because of adverse market action or delay in connection with the
disposition of the underlying obligations.

Each Portfolio may also obtain funds for temporary purposes by
entering into reverse repurchase agreements. Pursuant to such agreements the
Portfolios will sell portfolio securities to financial institutions such as
banks and broker-dealers and agree to repurchase them at a particular date and
price. Reverse repurchase agreements involve the risk that the market value of
the securities sold by a Portfolio may decline below the price of the
securities it is obligated to repurchase.

Lending Portfolio Securities

To increase income or offset expenses, each Portfolio may lend its
portfolio securities to financial institutions such as banks and
broker-dealers in accordance with the investment limitations described below.
Agreements would require that the loans be continuously secured by collateral
equal at all times in value to at least the market value of the securities
loaned plus accrued interest. Collateral for such loans could include cash or
securities of the U.S. Government, its agencies or instrumentalities. Such
loans will not be made if, as a result, the aggregate of all outstanding loans
of a particular Portfolio exceeds one-third of the value of its total assets.
Loans of securities involve risks of delay in receiving additional collateral
or in recovering the securities loaned or possible loss of rights in the
collateral should the borrower of the securities become insolvent. Loans will
be made only to borrowers that provide the requisite collateral comprised of
liquid assets and when, in the Adviser's judgment, the income to be earned
from the loan justifies the attendant risks.

Illiquid Securities

In accordance with their fundamental investment limitation described
below, the Growth/Value, Opportunity and Intrinsic Value Portfolios will not
knowingly invest more than 10% and the Capital Growth, Balanced and
International Equity Portfolios will not knowingly invest more than 15% of the
value of their respective total assets in securities that are illiquid.
Securities having legal or contractual restrictions on resale or no readily
available market, and instruments (including repurchase agreements, variable
and floating rate instruments and time deposits) that do not provide for
payment to the Portfolios within seven days after notice are subject to this
limitation. Securities that have legal or contractual restrictions on resale
but have a readily available market are not deemed to be illiquid for purposes
of this limitation.

The Portfolios may purchase securities which are not registered under
the Securities Act of 1933, as amended (the "1933 Act"), but which can be sold
to "qualified institutional buyers" in accordance with Rule 144A under the
1933 Act. Any such security will not be considered to be illiquid so long as
it is determined by the Board of Trustees or the Adviser, acting under
guidelines approved and monitored by the Board, that an adequate trading
market exists for that security. This investment practice could have the
effect of increasing the level of illiquidity in a Portfolio during any period
that qualified institutional buyers become uninterested in purchasing these
restricted securities. The ability to sell to qualified institutional buyers
under

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Rule 144A is a recent development, and it is not possible to predict how this
market will develop. The Board of Trustees will carefully monitor any
investments by a Portfolio in these securities.

Borrowings

The Portfolios may borrow money for temporary purposes in accordance
with the investment limitations described below. Borrowings may be effected
through reverse repurchase agreements under which the Portfolios would sell
portfolio securities to financial institutions such as banks and
broker-dealers and agree to repurchase them at a particular date and price.
Reverse repurchase agreements involve the risk that the market value of the
securities sold by a Portfolio may decline below the price of the securities
it is obligated to repurchase.

Foreign Securities

As stated above, the Growth/Value, Opportunity, Intrinsic Value,
Capital Growth, Balanced and International Equity Portfolios may invest up to
25%, 25%, 25%, 25%, 20% and 100% of their respective total assets (exclusive
of short-term cash investments) in foreign securities. Investments in foreign
securities, whether made directly or indirectly, involve certain inherent
risks, such as political or economic instability of the issuer or the country
of issue, the difficulty of predicting international trade patterns, changes
in exchange rates of foreign currencies and the possibility of adverse changes
in investment or exchange control regulations. There may be less publicly
available information about a foreign company than about a U.S. company.
Listed foreign companies generally are not subject to uniform accounting,
auditing and financial reporting standards comparable to those applicable to
domestic companies. Further, foreign stock markets are generally not as
developed or efficient as those in the U.S. and in most foreign markets volume
and liquidity are less than in the U.S. Fixed commissions on foreign stock
exchanges are generally higher than the negotiated commissions on U.S.
exchanges, and there is generally less government supervision and regulation
of foreign stock exchanges, brokers and listed companies than in the U.S. With
respect to certain foreign countries, there is a possibility of expropriation
or confiscatory taxation, limitations on the removal of funds or other assets
or diplomatic developments that could affect investment within those
countries. Because of these and other factors, securities of foreign companies
acquired by a Portfolio may be subject to greater fluctuation in price than
securities of domestic companies.

Since foreign securities often are purchased with and payable in
currencies of foreign countries, the value of these assets as measured in U.S.
dollars may be affected favorably or unfavorably by changes in currency rates
and exchange control regulations. Some currency exchange costs may be incurred
when a Portfolio changes investments from one country to another.

Furthermore, some securities may be subject to brokerage taxes levied
by foreign governments, which have the effect of increasing the costs of such
investments and reducing the realized gain or increasing the realized loss on
such securities at the time of sale. Income received by the Portfolios from
sources within foreign countries may be reduced by withholding or other taxes
imposed by such countries. Tax conventions between certain countries and the
United States, however, may reduce or eliminate such taxes. All such taxes
paid by a Portfolio will reduce its net income available for distribution to
investors.

American Depository Receipts ("ADRs")

The Portfolios may invest in securities of foreign issuers in the form
of ADRs or similar securities representing securities of foreign issuers.
These securities may not be denominated in the same currency as the securities
they represent. ADRs are receipts typically issued by a United States bank or
trust

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company evidencing ownership of the underlying foreign securities and are
denominated in U.S. dollars. Certain such institutions issuing ADRs may not be
sponsored by the issuer. A non-sponsored depository may not provide the same
shareholder information that a sponsored depository is required to provide
under its contractual arrangements with the issuer.

European Depository Receipts ("EDRs")

The Capital Growth and International Equity Portfolios may invest in
securities of foreign issuers in the form of EDRs or similar securities
representing securities of foreign issuers. These securities may not be
denominated in the same currency as the securities they represent. EDRs are
receipts issued by a European financial institution evidencing ownership of
the underlying foreign securities and are generally denominated in foreign
currencies. Generally, EDRs, in bearer form, are designed for use in the
European securities markets.

Supranational Bank Obligations

The Balanced Portfolio may invest in obligations of supranational
banks. Supranational banks are international banking institutions designed or
supported by national governments to promote economic reconstruction,
development or trade between nations (e.g., the World Bank). Obligations of
supranational banks may be supported by appropriated but unpaid commitments of
their member countries and there is no assurance that these commitments will
be undertaken or met in the future.

Convertible Securities

A convertible security is a security that may be converted either at a
stated price or rate within a specified period of time into a specified number
of shares of common stock. By investing in convertible securities, a Portfolio
seeks the opportunity, through the conversion feature, to participate in the
capital appreciation of the common stock into which the securities are
convertible, while earning higher current income than is available from the
common stock. Convertible securities acquired by a Portfolio will be rated
investment grade by a Rating Agency, or if unrated, will be of comparable
quality as determined by the Adviser. Subsequent to its purchase by a
Portfolio, a rated security may cease to be rated or its rating may be reduced
below the minimum rating required for purchase by the Portfolio. The Adviser
will consider such an event in determining whether the Portfolio involved
should continue to hold the security. The Adviser expects, however, to
promptly sell any securities that are non-investment grade as a result of
these events that exceed 5% of a Portfolio's net assets where it has
determined that such sale is in the best interest of the Portfolio.

Warrants

Each Portfolio may invest up to 5% of its assets at the time of
purchase in warrants and similar rights (other than those that have been
acquired in units or attached to other securities). Warrants represent rights
to purchase securities at a specified price valid for a specified period of
time. The prices of warrants do not necessarily correlate with the prices of
the underlying securities.

When-Issued Purchases and Forward Commitments

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security it owns or intends to purchase, regardless of future changes in
interest rates. When-issued and forward commitment transactions involve the
risk, however, that the yield obtained in a transaction may be less favorable
than the yield available in the market when the securities delivery takes
place. Each Portfolio's forward commitments and when-issued purchases are not
expected to exceed 25% of the value of its total assets absent unusual market
conditions. The Portfolios do not earn income with respect to these
transactions until the subject securities are delivered to the Portfolios. The
Portfolios do not intend to engage in when-issued purchases and forward
commitments for speculative purposes but only in furtherance of their
investment objectives.

Asset Backed Securities

Asset Backed Securities held by the Balanced and International Equity
Portfolios arise through the grouping by governmental, government-related and
private organizations of loans, receivables and other assets originated by
various lenders, as described below.

The yield characteristics of Asset Backed Securities differ from
traditional debt securities. A major difference is that the principal amount
of the obligations may be prepaid at any time because the underlying assets
(i.e., loans) generally may be prepaid at any time. As a result, if an Asset
Backed Security is purchased at a premium, a prepayment rate that is faster
than expected will reduce yield to maturity, while a prepayment rate that is
slower than expected will have the opposite effect of increasing yield to
maturity. Conversely, if an Asset Backed Security is purchased at a discount,
faster than expected prepayments will increase, while slower than expected
prepayments will decrease, yield to maturity. In calculating the average
weighted maturity of the Portfolios, the maturity of Asset Backed Securities
will be based on estimates of average life.

Prepayments on Asset Backed Securities generally increase with falling
interest rates and decrease with rising interest rates. Prepayment rates are
also influenced by a variety of economic and social factors. In general, the
collateral supporting non-mortgage backed securities is of shorter maturity
than mortgage loans and is less likely to experience substantial prepayments.
Like other fixed income securities, when interest rates rise the value of an
Asset Backed Security generally will decline; however, when interest rates
decline, the value of an Asset Backed Security with prepayment features may
not increase as much as that of other fixed income securities, and, as noted
above, changes in market rates of interest may accelerate or retard
prepayments and thus affect maturities.

These characteristics may result in a higher level of price volatility
for these assets under certain market conditions. In addition, while the
trading market for short-term mortgages and Asset Backed Securities is
ordinarily quite liquid, in times of financial stress the trading market for
these securities sometimes becomes restricted.

Mortgage Backed Securities. Asset Backed Securities acquired by the
Balanced and International Equity Portfolios consist of both mortgage and
non-mortgage backed securities. Mortgage backed securities represent an
ownership interest in a pool of mortgages, the interest on which is in most
cases issued and guaranteed by an agency or instrumentality of the U.S.
Government, although not necessarily by the U.S. Government itself. Mortgage
backed securities include collateralized mortgage obligations and mortgage
pass-through certificates.

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("REMICs"). CMOs are issued in multiple classes, each with a specified fixed
or floating interest rate and a final distribution date. The relative payment
rights of the various CMO classes may be structured in a variety of ways. In
most cases, however, payments of principal are applied to the CMO classes in
the order of their respective stated maturities, so that no principal payments
will be made on a CMO class until all other classes having an earlier stated
maturity date are paid in full. These multiple class securities may be issued
or guaranteed by U.S. Government agencies or instrumentalities, including the
Government National Mortgage Association ("GNMA"), Federal National Mortgage
Association ("FNMA") and Federal Home Loan Mortgage Corporation ("FHLMC"), or
issued by trusts formed by private originators of, or investors in, mortgage
loans. Classes in CMOs which the Portfolios may hold are known as "regular"
interests. CMOs also issue "residual" interests, which in general are junior
to and more volatile than regular interests. The Portfolios do not intend to
purchase residual interests.

Mortgage pass-through certificates provide the holder with a pro rata
interest in the underlying mortgages. One type of such certificate in which
the Portfolios may invest is a GNMA Certificate which is backed as to the
timely payment of principal and interest by the full faith and credit of the
U.S. Government. Another type is a FNMA Certificate, the principal and
interest of which are guaranteed only by FNMA itself, not by the full faith
and credit of the U.S. Government. Another type is a FHLMC Participation
Certificate which is guaranteed by FHLMC as to timely payment of principal and
interest. However, like a FNMA security it is not guaranteed by the full faith
and credit of the U.S. Government. Privately issued mortgage backed securities
will carry a rating at the time of purchase of at least A by S&P or by Moody's
or, if unrated, will be in the Adviser's opinion equivalent in credit quality
to such rating. Mortgage backed securities issued by private issuers, whether
or not such obligations are subject to guarantees by the private issuer, may
entail greater risk than obligations directly or indirectly guaranteed by the
U.S. Government.

Non-Mortgage Backed Securities. The Balanced and International Equity
Portfolios may also invest in non-mortgage backed securities including
interests in pools of receivables, such as motor vehicle installment purchase
obligations and credit card receivables. Such securities are generally issued
as pass-through certificates, which represent undivided fractional ownership
interests in the underlying pools of assets. Such securities may also be debt
instruments, which are also known as collateralized obligations and are
generally issued as the debt of a special purpose entity organized solely for
the purpose of owning such assets and issuing such debt. Non-mortgage backed
securities are not issued or guaranteed by the U.S. Government or its agencies
or instrumentalities.

Non-mortgage backed securities involve certain risks that are not
presented by mortgage backed securities. Primarily, these securities do not
have the benefit of the same security interest in the underlying collateral.
Credit card receivables are generally unsecured and the debtors are entitled
to the protection of a number of state and federal consumer credit laws. Most
issuers of motor vehicle receivables permit the servicers to retain possession
of the underlying obligations. If the servicer were to sell these obligations
to another party, there is a risk that the purchaser would acquire an interest
superior to that of the holders of the related motor vehicle receivables. In
addition, because of the large number of vehicles involved in a typical
issuance and technical requirements under state laws, the trustee for the
holders of the motor vehicle receivables may not have an effective security
interest in all of the obligations backing such receivables. Therefore, there
is a possibility that recoveries on repossessed collateral may not, in some
cases, be able to support payments on these securities.

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Variable and Floating Rate Instruments

The Balanced Portfolio may invest in leveraged inverse floating rate
debt instruments ("inverse floaters"). The interest rate of an inverse floater
resets in the opposite direction from the market rate of interest to which it
is indexed. An inverse floater may be considered to be leveraged to the extent
that its interest rate varies by a magnitude that exceeds the magnitude of the
change in the index rate of interest. The higher degree of leverage inherent
in inverse floaters is associated with greater volatility in their market
values.

The absence of an active secondary market with respect to particular
variable and floating rate instruments could make it difficult for the
Balanced Portfolio to dispose of the instruments if the issuer defaulted on
its payment obligation or during periods that the Portfolio is not entitled
to exercise demand rights, and the Portfolio could, for these or other reasons,
suffer a loss with respect to such instruments. Variable and floating rate
instruments (including inverse floaters) will be subject to the Portfolio's
limitation on illiquid investments. See "Illiquid Securities."

Zero Coupon Obligations

Each Portfolio may invest in zero coupon obligations which are
discount debt obligations that do not make periodic interest payments although
income is generally imputed to the holder on a current basis. Such obligations
may have higher price volatility than those which require the payment of
interest periodically. The Adviser will consider the liquidity needs of a
Portfolio when any investment in zero coupon obligations is made.

Foreign Currency Transactions

The International Equity and Balanced Portfolios may engage in
currency exchange transactions to the extent consistent with their respective
investment objectives or to hedge their portfolios. The Portfolios will
conduct their currency exchange transactions either on a spot (i.e., cash)
basis at the rate prevailing in the currency exchange market, or through
entering into forward contracts to purchase or sell currencies. A forward
currency exchange contract involves an obligation to purchase or sell a
specific currency at a future date, which must be more than two days from the
date of the contract, at a price set at the time of the contract. Forward
currency exchange contracts are entered into in the interbank market conducted
directly between currency traders (typically commercial banks or other
financial institutions) and their customers. They may be used to reduce the
level of volatility caused by changes in foreign currency exchange rates or
when such transactions are economically appropriate for the reduction of risks
in the ongoing management of the Portfolios. Although forward currency
exchange contracts may be used to minimize the risk of loss due to a decline
in the value of the hedged currency, at the same time they tend to limit any
potential gain that might be realized should the value of such currency
increase. The Portfolios also may combine forward currency exchange contracts
with investments in securities denominated in other currencies.

The International Equity Portfolio also may maintain short positions
in forward currency exchange transactions, which would involve the Portfolio
agreeing to exchange an amount of a currency it did not currently own for
another currency at a future date in anticipation of a decline in the value of
the currency sold relative to the currency the Portfolio contracted to receive
in the exchange.

Each of the International Equity and Balanced Portfolios will maintain
in a segregated custodial account cash or U.S. Government securities or other
high quality liquid debt securities at least equal to the aggregate amount of
its short positions (in the case of the International Equity Portfolio) and of
its total assets committed to consummation of its forward currency exchange
contracts, plus accrued interest, in accordance with applicable requirements
of the SEC.

Options on Foreign Currency

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<PAGE>

of the currency at the time the option expires. Put options convey the right
to sell the underlying currency at a price which is anticipated to be higher
than the spot price of the currency at the time the option expires. The
Portfolios may use foreign currency options for the same purposes as forward
currency exchange and futures transactions, as described herein. See also
"Options" and "Currency Futures and Options on Currency Futures" below.

Futures Contracts and Related Options

Each Portfolio may trade futures contracts and options on futures
contracts in U.S. domestic markets, such as the Chicago Board of Trade and the
International Monetary Market of the Chicago Mercantile Exchange. To the
extent permitted under applicable law, the International Equity Portfolio may
also trade futures contracts and related options on exchanges located outside
the United States, such as the London International Financial Futures Exchange
and the Sydney Futures Exchange Limited. Foreign markets may offer advantages
such as trading in commodities that are not currently traded in the United
States or arbitrage possibilities not available in the United States. Foreign
markets, however, may have greater risk potential than domestic markets.

Each Portfolio may purchase and sell futures contracts which obligate
it to take or make delivery of certain securities at maturity, as well as
stock index futures contracts which are bilateral agreements pursuant to which
two parties agree to take or make delivery of an amount of cash equal to a
specified dollar amount times the difference between the stock index value
(which assigns relative values to the common stocks included in the index) at
the close of the last trading day of the contract and the price at which the
futures contract is originally struck. No physical delivery of the underlying
stocks in the index is made. The Capital Growth, Balanced and International
Equity Portfolios may enter into contracts for the future delivery of
fixed-income securities commonly known as interest rate futures contracts.

A Portfolio may sell a futures contract in order to offset an expected
decrease in the value of its portfolio that might otherwise result from a
market decline or currency exchange fluctuation. A Portfolio may do so either
to hedge the value of its securities portfolio as a whole, or to protect
against declines occurring prior to sales of securities in the value of the
securities to be sold. In addition, a Portfolio may utilize futures contracts
in anticipation of changes in the composition of its holdings or in currency
exchange rates.

The Capital Growth, Balanced and International Equity Portfolios may
also purchase options on futures contracts and may purchase and write put and
call options on stock indices listed on U.S. and, in the case of the
International Equity Portfolio foreign exchanges, or traded in the
over-the-counter market. A futures option gives the holder, in return for the
premium paid, the right to buy (call) from or sell (put) to the writer of the
option a futures contract at a specified price at any time during the period
of the option.

When a Portfolio sells an option on a futures contract, it becomes
obligated to purchase or sell a futures contract if the option is exercised.
In anticipation of a market advance, a Portfolio may purchase call options on
futures contracts as a substitute for the purchase of futures contracts to
hedge against a possible increase in the price of securities which the
Portfolio intends to purchase. Similarly, if the value of a Portfolio's
portfolio securities is expected to decline, the Portfolio might purchase put
options or sell call options on futures contracts rather than sell futures
contracts.

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<PAGE>

fide hedging transactions, would exceed 5% of the liquidation value of its
assets, after taking into account unrealized profits and unrealized losses on
such contracts it has entered into; provided, however, that in the case of an
option that is in-the-money at the time of purchase, the in-the-money amount
may be excluded in calculating the percentage limitation. Pursuant to SEC
requirements, the Portfolios will be required to segregate cash or high
quality money market instruments in connection with their commodities
transactions in an amount generally equal to the value of the underlying
commodity. The Trust intends to comply with the regulations of the CFTC
exempting the Portfolios from registration as a "commodity pool operator".

For a more detailed description of futures contracts and related
options, see Appendix B to the Statement of Additional Information.

Currency Futures and Options on Currency Futures

The International Equity and Balanced Portfolios may purchase and sell
currency futures contracts and options thereon. By selling foreign currency
futures, a Portfolio can establish the number of U.S. dollars that it will
receive in the delivery month for a certain amount of a foreign currency. In
this way, if a Portfolio anticipates a decline of a foreign currency against
the U.S. dollar, the Portfolio can attempt to fix the U.S. dollar value of
some or all of its securities that are denominated in that currency. By
purchasing foreign currency futures, a Portfolio can establish the number of
U.S. dollars that it will be required to pay for a specified amount of a
foreign currency in the delivery month. Thus, if a Portfolio intends to buy
securities in the future and expects the U.S. dollar to decline against the
relevant foreign currency during the period before the purchase is effected,
the Portfolio, for the price of the currency future, can attempt to fix the
price in U.S. dollars of the securities it intends to acquire.

The purchase of options on currency futures will allow a Portfolio,
for the price of the premium it must pay for the option, to decide whether or
not to buy (in the case of a call option) or to sell (in the case of a put
option) a futures contract at a specified price at any time during the period
before the option expires. If the Portfolios, in purchasing an option, have
been correct in their judgment concerning the direction in which the price of
a foreign currency would move as against the U.S. dollar, they may exercise
the option and thereby take a futures position to hedge against the risk they
had correctly anticipated or close out the option position at a gain that will
offset, to some extent, currency exchange losses otherwise suffered by the
Portfolios. If exchange rates move in a way a Portfolio did not anticipate,
the Portfolio will have incurred the expense of the option without obtaining
the expected benefit. As a result, a Portfolio's profits on the underlying
securities transactions may be reduced or overall losses may be incurred.

Options

The Capital Growth, Balanced and International Equity Portfolios may
purchase and sell put and call options listed on a national securities
exchange and issued by the Options Clearing Corporation for hedging purposes.
Such transactions may be effected on a principal basis with primary reporting
dealers in U.S. Government securities in an amount not exceeding 5% of a
Portfolio's net assets, as described further in the Statement of Additional
Information. Such options may relate to particular securities or to various
stock indices or bond indices. Purchasing options is a specialized investment
technique which entails a substantial risk of a complete loss of the amounts
paid as premiums to the writer of the option. Each such Portfolio may also
purchase and write put and call options on stock indices listed on foreign
exchanges or traded in the over-the-counter market.

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<PAGE>

The Capital Growth, Balanced and International Equity Portfolios may
purchase and sell put options on portfolio securities at or about the same
time that they purchase the underlying security or at a later time. By buying
a put, a Portfolio limits its risk of loss from a decline in the market value
of the security until the put expires. Any appreciation in the value of and
yield otherwise available from the underlying security, however, will be
partially offset by the amount of the premium paid for the put option and any
related transaction costs. Call options may be purchased by a Portfolio in
order to acquire the underlying security at a later date at a price that
avoids any additional cost that would result from an increase in the market
value of the security. A Portfolio may also purchase call options to increase
its return to investors at a time when the call is expected to increase in
value due to anticipated appreciation of the underlying security. Prior to its
expiration, a purchased put or call option may be sold in a closing sale
transaction (a sale by a Portfolio, prior to the exercise of an option that it
has purchased, of an option of the same series), and profit or loss from the
sale will depend on whether the amount received is more or less than the
premium paid for the option plus the related transaction costs.

In addition, the Capital Growth, Balanced and International Equity
Portfolios may write covered call and secured put options. A covered call
option means that a Portfolio owns or has the right to acquire the underlying
security subject to call at all times during the option period. A secured put
option means that a Portfolio maintains in a segregated account with its
custodian cash or U.S. Government securities in an amount not less than the
exercise price of the option at all times during the option period. Such
options will be listed on a national securities exchange and issued by the
Options Clearing Corporation and may be effected on a principal basis with
primary reporting dealers in U.S. Government securities. The aggregate value
of the securities subject to options written by a Portfolio will not exceed
25% of the value of its net assets. In order to close out an option position
prior to maturity, a Portfolio may enter into a "closing purchase transaction"
by purchasing a call or put option (depending upon the position being closed
out) on the same security with the same exercise price and expiration date as
the option which it previously wrote.

By writing a covered call option, a Portfolio forgoes the opportunity
to profit from an increase in the market price of the underlying security
above the exercise price except insofar as the premium represents such a
profit, and it is not able to sell the underlying security until the option
expires or is exercised or the Portfolio effects a closing purchase
transaction by purchasing an option of the same series. If a Portfolio writes
a secured put option, it assumes the risk of loss should the market value of
the underlying security decline below the exercise price of the option. The
use of covered call and secured put options will not be a primary investment
technique of the Portfolios.

For additional information relating to option trading practices,
including particular risks thereof, see the Statement of Additional
Information.

Risk Factors Associated with Futures, Options and Currency Futures and Options

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<PAGE>

contracts, the Portfolio may buy or sell futures contracts in a greater or
lesser dollar amount than the dollar amount of the securities being hedged if
the historical volatility of the futures contract has been less or greater
than that of the securities. Such "over hedging" or "under hedging" may
adversely affect the Portfolio's net investment results if market movements
are not as anticipated when the hedge is established.

Successful use of futures by a Portfolio also is subject to the
Adviser's ability to predict correctly movements in the direction of
securities prices, interest rates, currency exchange rates and other economic
factors. For example, if the Portfolio has hedged against the possibility of a
decline in the market adversely affecting the value of securities held in its
portfolio and prices increase instead, the Portfolio will lose part or all of
the benefit of the increased value of securities which it has hedged because
it will have offsetting losses in its futures positions. In addition, in such
situations, if the Portfolio has insufficient cash, it may have to sell
securities to meet daily variation margin requirements. Such sales of
securities may, but will not necessarily, be at increased prices which reflect
the rising market. The Portfolio may have to sell securities at a time when it
may be disadvantageous to do so.

Although a Portfolio intends to enter into futures contracts and
options transactions only if there is an active market for such contracts, no
assurance can be given that a liquid market will exist for any particular
contract at any particular time. See "Illiquid Securities" above. Many futures
exchanges and boards of trade limit the amount of fluctuation permitted in
futures contract prices during a single trading day. Once the daily limit has
been reached in a particular contract, no trades may be made that day at a
price beyond that limit or trading may be suspended for specified periods
during the trading day. Futures contracts prices could move to the limit for
several consecutive trading days with little or no trading, thereby preventing
prompt liquidation of futures positions and potentially subjecting the
Portfolio to substantial losses. If it is not possible, or the Portfolio
determines not, to close a futures position in anticipation of adverse price
movements, it will be required to make daily cash payments of variation
margin. In such circumstances, an increase in the value of the portion of the
portfolio being hedged, if any, may offset partially or completely losses on
the futures contract.

Currency exchange rates may fluctuate significantly over short periods
of time. They generally are determined by the forces of supply and demand in
the foreign exchange markets and the relative merits of investments in
different countries, actual or perceived changes in interest rates and other
complex factors as seen from an international perspective. Currency exchange
rates also can be affected unpredictably by intervention by U.S. or foreign
governments or central banks, or the failure to intervene, or by currency
controls or political developments in the United States or abroad. The foreign
currency market offers less protection against defaults in the forward trading
of currencies than is available when trading in currencies occurs on an
exchange. Since a forward currency contract is not guaranteed by an exchange
or clearinghouse, a default on the contract would deprive the Portfolio of
unrealized profits or force the Portfolio to cover its commitments for
purchase or resale, if any, at the current market price.

Unlike trading on domestic commodity exchanges, trading on foreign
commodity exchanges is not regulated by the CFTC and may be subject to greater
risks than trading on domestic exchanges. For example, some foreign exchanges
are principal markets so that no common clearing facility exists and a trader
may look only to the broker for performance of the contract. In addition,
unless the Portfolio hedges against fluctuations in the exchange rate between
the U.S. dollar and the currencies in which trading is done on foreign
exchanges, any profits that the Portfolio might realize in trading could be
eliminated by adverse changes in the exchange rate, or the Portfolio could
incur losses as a

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<PAGE>

result of those changes. Transactions on foreign exchanges may include both
commodities which are traded on domestic exchanges and those which are not.

Risk Factors Associated with Derivative Instruments

Each Portfolio may purchase derivative instruments. Derivative
instruments are instruments that derive value from the performance of
underlying assets, interest or currency exchange rates, or indices, and
include (but are not limited to) futures contracts, options, forward currency
contracts and structured debt obligations (including collateralized mortgage
obligations and other types of asset-backed securities, "stripped" securities
and various floating rate instruments, including "inverse" floaters).

Derivative instruments present, to varying degrees, market risk that
the performance of the underlying assets, exchange rates or indices will
decline; credit risk that the dealer or other counterparty to the transaction
will fail to pay its obligations; volatility and leveraging risk that, if
interest or exchange rates change adversely, the value of the derivative
instrument will decline more than the assets, rates or indices on which it is
based; liquidity risk that a Portfolio will be unable to sell a derivative
instrument when it wants because of lack of market depth or market disruption;
pricing risk that the value of a derivative instrument (such as an option)
will not correlate exactly to the value of the underlying assets, rates or
indices on which it is based; and operations risk that loss will occur as a
result of inadequate systems and controls, human error or otherwise. Some
derivative instruments are more complex than others, and for those
instruments that have been developed recently, data are lacking regarding
their actual performance over complete market cycles.

The Adviser will evaluate the risks presented by the derivative
instruments purchased by the Portfolios, and will determine, in connection
with its day-to-day management of the Portfolios, how they will be used in
furtherance of the Portfolios' investment objectives. It is possible, however,
that the Adviser's evaluations will prove to be inaccurate or incomplete and,
even when accurate and complete, it is possible that the Portfolios will,
because of the risks discussed above, incur loss as a result of their
investments in derivative instruments.

Portfolio Turnover

Generally the Portfolios will purchase securities for capital
appreciation or investment income, or both, and not for short-term trading
profits. However, a Portfolio may sell a portfolio investment soon after its
acquisition if the Adviser believes that such a disposition is consistent with
or in furtherance of the Portfolio's investment objective. Portfolio
investments may be sold for a variety of reasons, such as more favorable
investment opportunities or other circumstances. As a result, such Portfolios
are likely to have correspondingly greater brokerage commissions and other
transaction costs which are borne indirectly by shareholders. Portfolio
turnover may also result in the realization of substantial net capital gains.
(See "Taxes-Federal" in the Prospectus and "Additional Information Concerning
Taxes" in the Statement of Additional Information.) While it is not possible
to accurately predict portfolio turnover rates, the annual turnover rates for
the Growth/Value, Opportunity, Intrinsic Value, Capital Growth and
International Equity Portfolios are not expected to exceed 100% and the annual
turnover rate for the Balanced Portfolio is not expected to exceed 75%.

Investment Limitations

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<PAGE>

investment limitations that cannot be changed without a vote of shareholders
are contained in the Statement of Additional Information under "Investment
Objectives, Policies and Risk Factors."

No Portfolio may:

1. Purchase securities of any one issuer (other than securities issued
or guaranteed by the U.S. Government, its agencies or instrumentalities) if,
immediately after such purchase, more than 5% of the value of a Portfolio's
total assets would be invested in the securities of such issuer, or more than
10% of the issuer's outstanding voting securities would be owned by a
Portfolio, except that up to 25% of the value of the Portfolio's total assets
may be invested without regard to these limitations.

2. Purchase any securities which would cause 25% or more of the value
of the Portfolio's total assets at the time of purchase to be invested in the
securities of one or more issuers conducting their principal business
activities in the same industry, provided that (a) there is no limitation with
respect to obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities and repurchase agreements secured by such
instruments; (b) wholly-owned finance companies will be considered to be in
the industries of their parents if their activities are primarily related to
financing the activities of the parents; and (c) utilities will be divided
according to their services, for example, gas, gas transmission, electric and
gas, electric and telephone will each be considered a separate industry.

3. Make loans, except that each Portfolio may purchase and hold debt
instruments and enter into repurchase agreements in accordance with its
investment objective and policies and may lend portfolio securities in an
amount not exceeding one-third of its total assets.

4. Borrow money or issue senior securities, except that each Portfolio
may borrow from banks and enter into reverse repurchase agreements for
temporary purposes in amounts not in excess of 10% of the value of its total
assets at the time of such borrowing; or mortgage, pledge or hypothecate any
assets, except in connection with any such borrowing and in amounts not in
excess of the lesser of the dollar amounts borrowed or 10% of the value of the
Portfolio's total assets at the time of such borrowing. No Portfolio will
purchase securities while its borrowings (including reverse repurchase
agreements) in excess of 5% of its total assets are outstanding. Securities
held in escrow or separate accounts in connection with a Portfolio's
investment practices described in the Statement of Additional Information or
in this Prospectus are not deemed to be pledged for purposes of this
limitation.

In addition, the Growth/Value, Opportunity and Intrinsic Value
Portfolios may not invest more than 10% of their respective total assets in
illiquid investments. The Capital Growth, Balanced and International Equity
Portfolios may invest up to 15% of their respective total assets in illiquid
securities. See "Illiquid Securities" above.

Generally, if a percentage limitation is satisfied at the time of
investment, a later increase or decrease in such percentage resulting from a
change in the value of a Portfolio's portfolio securities will not constitute
a violation of such limitation for purposes of the 1940 Act.

In order to permit the sale of a Portfolio's shares in certain states,
the Portfolios may make commitments more restrictive than the investment
policies and limitations described above. Should a Portfolio determine that
any such commitment is no longer in the best interests of the Portfolio, it
will revoke the commitment by terminating sales of its shares in the state
involved.

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<PAGE>

PURCHASE OF SHARES
In General

Financial institutions may impose different minimum investment and
other requirements on their customers and may charge additional fees in
connection with the establishment of accounts with the institutions and
purchase and redemption of Class A shares. Persons wishing to purchase Class A
shares through their accounts at an institution or a Co-Distributor should
contact the institution or Co-distributor directly for appropriate
instructions and fee information. In addition, certain financial institutions
may enter into shareholder servicing agreements with the Trust whereby they
would perform various administrative support services for their customers who
are the beneficial owners of Class A shares in return for fees from the
Portfolios. See "Shareholder Servicing Plan" under the heading "Management" in
this Prospectus.

Institutions will be responsible for transmitting purchase and
redemption orders to FoM, Essex or NBD acting as transfer agent (the "Transfer
Agent") on a timely basis, in accordance with the procedures stated below.

Purchase Procedures

The minimum initial investment is $1,000, except for purchases through
an institution whose customers have invested an aggregate minimum of $1,000 or
for investments made through a Co-Distributor's or an institution's sweep
privilege, the Trust's Automatic Investment Plan described below, or the
Trust's IRA program described below. The minimum subsequent investment is
$100, except for reinvested dividends or as otherwise described below. The
Trust reserves the right to reject any purchase order.

Orders for Class A shares may be placed by telephone by calling (800)
688-3350 (provided an investor has made the appropriate election in his
account application) or by mail (by completing the account application which
accompanies this Prospectus and mailing the completed form and the payment for
shares to FoM, Essex or the Transfer Agent). All checks must be drawn on a
bank located within the United States and must be payable in U.S. dollars.
Subsequent investments in an existing account in a Portfolio may be made at
any time by sending a check or money order along with either (a) the
detachable form that regularly accompanies the Trust's confirmation of a prior
transaction, (b) a subsequent order form which may be obtained from the Trust,
or (c) a letter stating the amount of the investment, the name of the
Portfolio and the account number in which the investment is to be made. If any
check used for investment in an account does not clear, the order will be
cancelled and notice thereof will be given; in such event the account will be
responsible for any loss to the Trust as well as a $15 fee imposed by the
Transfer Agent.

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<PAGE>

With the exception of customers of FoM and residents of
the state of Texas, Class A shares may also be paid for by wiring
federal funds to the Transfer Agent, NBD Bank, ABA 072000326, for the
account of The Woodward Funds, Account Number GL 325612, and
identifying the customer name and account number. Before wiring payment,
customers should notify the Transfer Agent by calling (800) 688-3350.

If customers of FoM wire payment in federal funds, they should direct
payment to NBD Bank, ABA 072000326, for the account of First of Michigan
Corporation re: The Woodward Funds, Account Number 059-41, and should identify
the customer name and account number. Before wiring payment, customers of FoM
should call FoM at (800) 544-8275 (outside Michigan) or (800) 852-7730 (within
Michigan).

Purchase orders which are accompanied by payment (by check or wire
transfer) and received by the Transfer Agent in proper form on a Business Day
(as defined below) prior to the close of the New York Stock Exchange are
priced at the public offering price (i.e. net asset value plus the applicable
sales load set forth below) of the particular Portfolio determined on that
Business Day. Purchase orders which are received by the Transfer Agent after
the close of trading on the Exchange on a Business Day or on non-Business Days
will be executed as of the determination of net asset value on the next
Business Day.

The Trust will not accept payment in cash or third party checks for
the purchase of shares. Federal regulations require that each investor provide
a certified taxpayer identification number upon opening or reopening an
account. Applications without a taxpayer identification number will not be
accepted. See the account application for further information about this
requirement.

Net Asset Value and Pricing of Shares

The net asset value of each Portfolio for purposes of pricing purchase
and redemption orders is determined as of the close of trading on the floor
of the New York Stock Exchange ("Exchange") (currently 4:00 p.m. New York
Time), on each day the Exchange is open for business ("Business
Day") except: (i) those holidays which the Exchange observes (currently New
Year's Day, Presidents' Day, Good Friday, Memorial Day (observed),
Independence Day, Labor Day, Thanksgiving Day and Christmas Day); and
(ii) those Business Days on which the Exchange closes prior to the close of
its regular trading hours ("Early Closing Time"), in which event the net asset
value of each Portfolio will be determined and its shares will be priced as
of such Early Closing Time. Net asset value per Class I share of
a Portfolio is calculated by dividing the value of all securities
and other assets belonging to the Portfolio allocable to that Class I,
less the liabilities charged to that Class I, by the number of the
outstanding shares of such Class I.

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<PAGE>

available, and other assets are valued at fair value by the Adviser under the
supervision of the Board of Trustees. Securities may be valued on the basis of
prices provided by independent pricing services when the Adviser believes such
prices reflect the fair market value of such securities. The prices provided
by pricing services take into account institutional size trading in similar
groups of securities and any developments related to specific securities. For
valuation purposes, the value of assets and liabilities expressed in foreign
currencies will be converted to U.S. dollars equivalent at the prevailing
market rate on the day of valuation. A Portfolio's open futures contracts will
be "marked-to-market."

PUBLIC OFFERING PRICE

The public offering price for Class A shares of the Portfolios is the
sum of the net asset value per share of the Class A shares being purchased
plus a sales load as follows:
<TABLE>
<CAPTION>
Reallowance to
Total Sales Load Institutions
------------------------------- --------------
As a % of As a % of As a % of
offering price net asset value offering price
Amount of Transaction per share per share per share
- --------------------- -------------- --------------- --------------
<S> <C> <C> <C>
Less than $49,999................... 5.00 5.26 4.50
$50,000 to $99,999.................. 4.50 4.71 4.00
$100,000 to $249,999................ 3.50 3.63 3.00
$250,000 to $499,999................ 2.50 2.56 2.00
$500,000 to $999,999................ 2.00 2.04 1.75
$1,000,000 and over................. .00 .00 .00
</TABLE>

The sales load described above will not be applicable to purchases of
Class A shares by: (1) any bank, trust company or other institution acting on
behalf of its fiduciary customer accounts or any other account maintained by
its trust department (including a pension, profit-sharing or other employee
benefit trust created pursuant to a plan qualified under Section 401 of the
Internal Revenue Code of 1986, as amended); (2) any individual, trust,
corporation or other person where the shares are acquired in connection with
the distribution of assets held in any account referred to in (l) above with
NBD or its affiliates; (3) individual retirement accounts maintained by the
trust division of NBD or of its affiliates; (4) current and retired directors,
officers and employees of NBD or any of its affiliates; (5) the trustees,
former trustees and officers of the Trust; (6) broker/dealers which have
entered into an agreement with a Co- Distributor or the Trust pursuant to the
Trust's Service and Distribution Plan or Shareholder Servicing Plan and their
representatives purchasing for their own accounts; and (7) spouses, children,
grandchildren, siblings, parents, grandparents and in-laws of individuals
referred to in paragraphs (4), (5) and (6) above. An application to qualify
for such purchases of Class A shares (an "NAV Account Application") may be
obtained from the Transfer Agent by calling (800) 688-3350. In addition, no
sales load is charged on the reinvestment of dividends or distributions, or in
connection with certain share exchanges described below under "Shareholder
Services -- Exchange Privilege." The Trust may terminate any exemption from
the sales load by providing notice in the Prospectus, but any such termination
would only affect future purchases of Class A shares. The reallowance to
institutions may be changed from time to time.

From time to time, the Co-Distributors, at their expense, may offer
additional promotional incentives to dealers.

Quantity Discounts

An investor may be entitled to reduced sales charges through Rights of
Accumulation, a Letter of Intent or a combination of investments, even if the

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<PAGE>

investor does not wish to make an investment of a size that would normally
qualify for a quantity discount.

An investor must notify his institution or the Transfer Agent at the
time of purchase whenever a quantity discount applies. Upon such notification,
the investor will receive the lowest applicable sales charge. Quantity
discounts may be modified or terminated at any time and are subject to
confirmation of an investor's holdings. For more information about quantity
discounts, an investor should contact his institution or call (800) 688-3350.

Right of Accumulation. A reduced sales load applies to any purchase of
Class A shares of the Portfolios and any other portfolio which is currently
offered or may be offered in the future by the Trust that is sold with a sales
load ("Eligible Portfolios") where an investor's then current aggregate
investment is $50,000 or more. "Aggregate investment" means the total of: (a)
the dollar amount of the then current purchase; and (b) the value (based on
current net asset value) of Class A shares of Eligible Portfolios on which a
sales load has been paid (including shares acquired through reinvestment of
dividends or distributions on shares that were subject to a sales load). If,
for example, an investor beneficially owns Class A shares of the Growth/Value
Portfolio with an aggregate current value of $49,500 and subsequently
purchases additional Class A shares having a current value of $1,000, the load
applicable to the subsequent purchase would be reduced to 4.50% of the
offering price. Similarly, with respect to each subsequent investment, the
current value of all Class A shares of Eligible Portfolios that are
beneficially owned by the investor at the time of investment may be combined
to determine the applicable sales load.

Letter of Intent. By signing a Letter of Intent form (available from
his institution or the Transfer Agent) an investor becomes eligible for the
reduced sales load applicable to the total number of Eligible Portfolio Class
A shares purchased in a thirteen-month period (net of redemptions) pursuant to
the terms and under the conditions set forth in the Letter of Intent. To
compute the applicable sales load, the offering price of Class A shares an
investor beneficially owns (on the date of submission of the Letter of Intent)
in any Eligible Portfolio that may be used toward "Right of Accumulation"
benefits described above may be used as a credit toward completion of the
Letter of Intent. However, the reduced sales load will be applied only to new
purchases.

The Transfer Agent will hold in escrow Class A shares equal to the
amount indicated in the Letter of Intent for payment of a higher sales load if
an investor does not purchase the full amount specified in the Letter of
Intent. The escrow will be released when an investor fulfills the terms of the
Letter of Intent by purchasing the specified amount. If total purchases within
the thirteen-month period of the Letter of Intent exceed the amount specified,
an adjustment will be made in the form of additional Class A shares credited
to the shareholder's account to reflect further reduced sales charges
applicable to such purchases. If total purchases are less than the amount
specified, an investor will be requested to remit an amount equal to the
difference between the sales load actually paid and the sales load applicable
to the total purchases. If such remittance is not received within thirty days,
the Transfer Agent, as attorney-in-fact pursuant to the terms of the Letter of
Intent, will redeem an appropriate number of Class A shares held in escrow to
realize the difference. Signing a Letter of Intent does not bind an investor
to purchase the full amount indicated at the sales load in effect at the time
of signing, but an investor must complete the intended purchase to obtain the
reduced sales load.

Qualification for Discounts. For the purpose of applying the Right of
Accumulation and Letter of Intent privileges described above, the scale of
sales loads applies to the combined purchases made by any individual and/or
spouse purchasing securities for his, her or their own account or for the
account of any minor children under the Uniform Gifts to Minors Act or the
Uniform Transfers to Minors Act, or the aggregate investments of a trustee or
custodian of any

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<PAGE>

qualified pension or profit sharing plan or IRA established, or the aggregate
investment of a trustee or other fiduciary, for the benefit of the persons
listed above.

REDEMPTION OF SHARES
In General

Redemption orders are effected at the net asset value next determined
after receipt by the Transfer Agent of a proper notice of redemption in
accordance with the procedures set forth below.

Redemption Procedures

Redemption orders for Class A shares may be placed through an
institution or directly by telephone by calling (800) 688-3350. During periods
of unusual economic or market changes, telephone redemptions may be difficult
to implement. In such event, shareholders should mail their redemption
requests to their financial institutions or The Woodward Funds, c/o NBD Bank
at the address shown above. Neither the Trust nor its Transfer Agent will be
responsible for the authenticity of instructions received by telephone that
are reasonably believed to be genuine. In attempting to confirm that telephone
instructions are genuine, the Trust and its Transfer Agent will use such
procedures as are considered reasonable, including recording those
instructions and requesting information as to account registration (including,
but not limited to, the name in which an account is registered, the account
number, or recent transactions in the account). To the extent that the Trust
and its Transfer Agent fail to use reasonable procedures to verify the
genuineness of telephone instructions, they may be liable for such
instructions that prove to be fraudulent and unauthorized. In all other cases,
shareholders will bear the risk of loss for fraudulent telephone transactions.

Other Redemption Information

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<PAGE>

be redeemed were purchased by check, the Trust will transmit the redemption
proceeds promptly upon clearance of such check, which could take up to fifteen
days from the purchase date. A shareholder having purchased shares by wire
must have filed an account application before any redemption requests can be
honored.

Currently, the Trust imposes no charge when shares are redeemed.
However, institutions may charge a fee for providing services in connection
with investments in Portfolio shares; NBD currently charges $16 for wire
transactions. The Trust reserves the right to redeem accounts involuntarily,
after sixty days' notice, if redemptions cause the account's net asset value
to remain at $1,000 or less. Under certain circumstances, the Trust may make
payment for redemption in securities or other property.

Questions concerning the proper form for redemption requests should be
directed to the Transfer Agent at (800) 688-3350 or an investor's financial
institution.

SHAREHOLDER SERVICES

The shareholder services and privileges under this heading may not be
available to certain clients of particular financial institutions, and some
may impose conditions on their clients that are different from those described
below. investors should consult their own financial institutions in this
regard. Other investors should direct any questions to the Transfer Agent. The
Trust may modify or terminate any of the following services and privileges at
any time.

Exchange Privilege

Investors may exchange Class A shares which have been owned for at
least thirty days of the Growth/Value, Opportunity, Intrinsic Value, Capital
Growth, Balanced and International Equity Portfolios, of the Woodward
Intermediate Bond, Bond, Short Bond, Municipal Bond and Michigan Municipal
Bond Funds and of other investment portfolios of the Trust which may be
offered in the future and sold with a sales charge (each a "load portfolio")
and Class A shares which have been owned for at least thirty days of the
Woodward Equity Index, Money Market, Government, Treasury Money Market,
Tax-Exempt Money Market and Michigan Tax-Exempt Money Market Funds and of
other investment portfolios of the Trust which may be offered in the future
and sold without a sales charge (each a "no load portfolio"). The cost of the
acquired Class A shares will be their net asset value plus the applicable
sales load, if any.

With respect to exchanges between load portfolios other than exchanges
involving the Woodward Short Bond Fund, no additional sales load will be
payable, provided that the investor previously paid a sales load upon the
acquisition of Class A shares of a load Portfolio. Investors exchanging Class
A shares of the Woodward Short Bond Fund will be required to pay the
difference between the sales load previously paid and the sales load
applicable on the Class A shares being acquired in the exchange, unless the
investor's holding of Class A shares of the Woodward Short Bond Fund resulted
from a previous exchange of Class A shares with respect to which the investor
had paid a higher sales load.

Exchanges of Class A shares of a load portfolio for Class A shares of
a no load portfolio and exchanges of Class A shares of a no load portfolio for
Class A shares of another no load portfolio will not be subject to the payment
of a sales load.

Any exchange of Class A shares of a no load portfolio for Class A
shares of a load portfolio will be subject to the payment of the applicable
sales load, unless the investor is exchanging shares of a no load portfolio
which were received in a previous exchange transaction involving Class A
shares of a load portfolio. In such case, the investor will receive a credit
for any sales load

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<PAGE>

previously paid and no additional sales load will be payable, except as noted
above with respect to the Woodward Short Bond Fund.

Shareholders contemplating an exchange should carefully review the
prospectus of the portfolio into which the exchange is being considered. The
Prospectus for any portfolio of the Trust may be obtained from an investor's
financial institution or from the Transfer Agent by calling (800) 688-3350.
Exchanges will only be made into shares of Portfolios which are legally
registered for sale in the state of residence of the investor.

Investors wishing to make an exchange should contact their
institutions or the Transfer Agent (as appropriate). Exchange requests in the
required form which are received by the Transfer Agent prior to 4:00 p.m.,
Eastern time or Early Closing Time, will be effected on the same
Business Day after such request is received. Requests received after
4:00 p.m., Eastern time or Early Closing Time, will be effected on
the next Business Day after such request is received. During periods of
significant economic or market change, telephone exchanges may be difficult to
complete. In such event, an investor should mail the exchange request to his
financial institution or the Transfer Agent. Neither the Trust nor the
Transfer Agent will be responsible for the authenticity of instructions
received by telephone that are reasonably believed to be genuine. In
attempting to confirm that telephone instructions are genuine, the Trust and
its Transfer Agent will use such procedures as are considered reasonable,
including recording those instructions and requesting information as to
account registration (including, but not limited to, the name in which an
account is registered, the account number, or recent transactions in the
account). To the extent that the Trust and its Transfer Agent fail to use
reasonable procedures to verify the genuineness of telephone instructions,
they may be liable for such instructions that prove to be fraudulent and
unauthorized. In all other cases, shareholders will bear the risk of loss for
fraudulent telephone transactions. The Trust reserves the right to modify or
terminate its exchange procedures upon sixty days notice to shareholders.

Reinvestment Privilege

Class A shares of a Portfolio may be purchased at net asset value by
persons who have redeemed within the previous 120 days their Class A shares of
that Portfolio or another investment portfolio of the Trust which were
purchased with a sales load. The amount which may be so reinvested is limited
to an amount up to the redemption proceeds. In order to exercise this
privilege, a written order for the purchase of Class A shares of the Portfolio
must be received by the Transfer Agent within 120 days after the redemption.
Reinvestment will be at the next calculated net asset value after receipt.

Option to Make Systematic Withdrawals

The Trust has available to shareholders a Systematic Withdrawal Plan
pursuant to which a shareholder who owns Class A shares of any investment
portfolio having a minimum value of $15,000 at the time he elects under the
Plan may have a fixed sum distributed in redemption at regular intervals. An
application form and additional information regarding this service may be

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<PAGE>

obtained from an investor's financial institution or the Transfer Agent by
calling (800) 688-3350.

Automatic Investment

The Trust offers an Automatic Investment Plan (the "Plan") whereby a
shareholder may automatically purchase Class A shares on a regular basis in
accordance with an election in his account application. An application may be
obtained from the Transfer Agent by calling (800) 688-3350. Under the Plan a
shareholder's financial institution debits a pre-authorized amount from his
account and applies the amount to the purchase of Class A shares. The minimum
per transaction is $25. The minimum initial investment in a Portfolio is also
$25 for the following shareholders who elect the Plan: (1) current and retired
directors, officers and employees of NBD or any of its affiliates; (2) the
trustees, former trustees and officers of the Trust; (3) broker/dealers which
have entered into an agreement with a Co-Distributor or the Trust pursuant to
the Trust's Distribution Plan or Shareholder Servicing Plan and their
representatives purchasing for their own accounts; and (4) spouses, children,
grandchildren, siblings, parents, grandparents and in-laws of individuals
referred to in (l), (2) and (3) above. An NAV Account Application may be
obtained from the Transfer Agent by calling (800) 688-3350. The Plan can be
implemented with any financial institution that is a member of the Automated
Clearing House. No service fee is currently charged by the Trust for
participating in the Plan. Death or legal incapacity will terminate a
shareholder's participation in the Plan. Deposits, withdrawals and adjustments
will be made electronically under the rules of the Automated Clearing House
Association.

Cross Reinvestment of Dividend Plan

The Trust makes available to shareholders a Cross Reinvestment of
Dividend Plan (the "Plan") pursuant to which a shareholder who owns Class A
shares of any portfolio with a minimum value of $10,000 at the time he elects
under the Plan may have dividends paid by such portfolio automatically
reinvested into Class A shares of another portfolio in which he has invested a
minimum of $1,000. Shareholders may obtain an application and additional
information from their institutions or the Transfer Agent by calling
(800) 688-3350.

The Woodward Funds Individual Retirement Custodial Account

Class A shares may be purchased in conjunction with the Trust's
Individual Retirement Custodial Account program ("IRA") where NBD acts as
custodian. investors should consult their institutions or a Co-Distributor for
information as to applications and annual fees. The minimum investment for an
IRA is $250 for investors who are not employees of NBD and $25 for investors
who are employees of NBD. Investors should also consult their tax advisers to
determine whether the benefits of an IRA are available or appropriate.

Other Retirement Plans

NBD and its affiliates offer a variety of pension and profit sharing
plans including IRAs, defined contribution plans, 401(k) Plans, 403(b)(7)
Plans and 457 Plans through which investors may purchase Class A shares. The
minimum investment for these Plans may differ from the minimum discussed above
in "Purchase of Shares." For details concerning any of the retirement plans,
please call the Transfer Agent or a Co-Distributor.

Direct Deposit Program

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<PAGE>

$25) by having these deposits automatically deposited into his Portfolio
account. For instructions on how to enroll in the Direct Deposit Program, an
investor should call his institution or the Transfer Agent. Death or legal
incapacity will terminate an investor's participation in the Program. An
investor may elect at any time to terminate his participation by notifying in
writing the appropriate federal agency. Further, the Trust may terminate an
investor's participation upon thirty days' notice to him.

PERFORMANCE INFORMATION

From time to time, in advertisements or in reports to shareholders the
performance of each class of shares of the Portfolios may be compared to the
performance of other mutual funds with similar investment objectives and to
stock and other relevant indices or to rankings prepared by independent
services or other financial or industry publications that monitor the
performance of mutual funds. For example, performance may be compared to data
prepared by Lipper Analytical Services, Inc. In addition, the performance of
the Portfolios may be compared to the Standard & Poor's 500 Index, an index of
unmanaged groups of common stocks, the Consumer Price Index, or the Dow Jones
Industrial Average, a recognized unmanaged index of common stocks of thirty
industrial companies listed on the New York Stock Exchange. Performance data
as reported in national financial publications such as Money Magazine, Forbes,
Barron's, The Wall Street Journal and The New York Times, or in publications
of a local or regional nature, may also be used in comparing the performance
of a Portfolio.

The Portfolios calculate their total returns on an "average annual
total return" basis for various periods from the date they commenced
investment operations and for other periods as permitted under the rules of
the SEC. Average annual total return of a class reflects the average annual
percentage change in value of an investment in the class over the measuring
period. Total returns may also be calculated on an "aggregate total return
basis" for various periods. Aggregate total return reflects the total
percentage change in value over the measuring period. Both methods of
calculating total return also reflect changes in the price of the shares and
assume that any dividends and capital gain distributions made by the class
during the period are reinvested in shares of the class. When considering
average total return figures for periods longer than one year, it is important
to note that a class' annual total return for any one year in the period might
have been greater or less than the average for the entire period.

Performance of each class of shares is based on historical earnings
and will fluctuate and is not intended to indicate future performance. The
investment return and principal value of an investment in a class will
fluctuate so that a shareholder's shares, when redeemed, may be worth more or
less than their original cost. Performance data may not provide a basis for
comparison with bank deposits and other investments which provide a fixed
yield for a stated period of time. Performance data should also be considered
in light of the risks associated with a Portfolio's portfolio composition,
quality, maturity, operating expenses and market conditions. Any fees charged
by financial institutions directly to their customer accounts in connection
with investments in shares will not be reflected in performance calculations.

DIVIDENDS AND DISTRIBUTIONS

Dividends from net investment income are declared and paid quarterly
by each Portfolio, except the International Equity Portfolio which declares
and pays dividends annually. Each Portfolio's net realized capital gains are
distributed at least annually.

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of the same Portfolio at their net asset value per share determined on the
payment date, unless the holder has notified the Transfer Agent in writing
that he elects to have dividends or capital gain distributions (or both) paid
in cash. Shareholders must make such election, or any revocation thereof, in
writing to their financial institutions or Transfer Agent. If an account
is established with telephone privileges, the registered owner or his
preauthorized legal representative may change the election to receive
dividends in cash to an election to receive dividends in shares by
telephoning the Transfer Agent at (800) 688-3350. The election will
become effective with respect to dividends paid after its receipt by the
Transfer Agent.

TAXES

Federal

Each Portfolio intends to qualify as a "regulated investment company"
under the Internal Revenue Code of 1986, as amended (the "Code"). Such
qualification will relieve the Portfolios of liability for federal income
taxes to the extent their earnings are distributed in accordance with the
Code.

Substantially all of each Portfolio's net realized long-term capital
gains, if any, will be distributed at least annually to its shareholders. The
Portfolios will generally have no tax liability with respect to such gains and
the distributions will be taxable to Portfolio shareholders who are not
currently exempt from federal income taxes as long-term capital gains,
regardless of how long the shareholders have held the shares and whether such
gains are received in cash or reinvested in additional shares.

Dividends declared in October, November or December of any year
payable to shareholders of record on a specified date in such months will be
deemed for federal tax purposes to have been paid by the Portfolio and
received by the shareholders on December 31 of such year if such dividends are
paid during January of the following year.

Prior to purchasing shares of a Portfolio, the impact of dividends or
distributions which are expected to be declared or have been declared, but not
paid, should be carefully considered. Any dividend or distribution declared
shortly after the purchase of shares prior to the record date will have the
effect of reducing the per share net asset value by the per share amount of
the dividend or distribution. All or a portion of such amounts, although in
effect a return of capital, is subject to tax.

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<PAGE>

A taxable gain or loss may be realized by a shareholder upon his
redemption, transfer or exchange of shares of a Portfolio depending upon the
tax basis and their price at the time of redemption, transfer or exchange. If
a shareholder has held shares for six months or less and during that time
received a distribution taxable as a long-term capital gain, then any loss the
shareholder might realize on the sale of those shares will be treated as a
long-term loss to the extent of the earlier capital gain distribution.
Generally, a shareholder may include sales charges incurred upon the purchase
of Portfolio shares in his tax basis for such shares for the purpose of
determining gain or loss on a redemption, transfer or exchange of such shares.
However, if the shareholder effects an exchange of such shares for shares of
another Portfolio within 90 days of the purchase and is able to reduce the
sales charges applicable to the new shares (by virtue of the Trust's exchange
privilege), the amount equal to such reduction may not be included in the tax
basis of the shareholder's exchanged shares but may be included under certain
circumstances in the tax basis of the new shares.

It is expected that dividends and certain interest income earned by
the International Equity Portfolio from foreign securities will be subject to
foreign withholding taxes or other taxes. So long as more than 50% of the
value of the Portfolio's total assets at the close of any taxable year
consists of equity or debt securities of foreign corporations, the Portfolio
may elect, for U.S. federal income tax purposes, to treat certain foreign
taxes paid by it, including generally any withholding taxes and other foreign
income taxes, as paid its shareholders. The Portfolio may make this election.
As a consequence, the amount of such foreign taxes paid by the Portfolio will
be included in its shareholders' income pro rata (in addition to taxable
distributions actually received by them), and the shareholders will be
entitled (a) to credit their proportionate amounts of such taxes against their
U.S. federal income tax liabilities, or (b) if they itemize their deductions,
to deduct such proportionate amounts from their U.S. income.

Shareholders will be advised at least annually as to the federal
income tax consequences of distributions made to them each year.

The foregoing discussion summarizes some of the important tax
considerations generally affecting the Portfolios and their shareholders and
is not intended as a substitute for careful tax planning. Accordingly,
potential investors in the Portfolios should consult their tax advisers with
specific reference to their own tax situation.

State and Local

The Trust may be subject to state or local taxes in jurisdictions in
which the Trust may be deemed to be doing business. In addition, in those
states or localities which have income tax laws, the treatment of the Trust
and its shareholders under such laws may differ from treatment under federal
income tax laws. Shareholders are advised to consult their tax advisers
concerning the application of state and local taxes, which may have different
consequences from those of the federal income tax law described above.

MANAGEMENT

Trustees and Officers of the Trust

The Board of Trustees of the Trust is responsible for the management
of the business and affairs of the Trust. The Trustees and executive officers
of the Trust and their principal occupations for the last five years are set
forth below. Each Trustee has an address at The Woodward Funds, c/o NBD Bank,
611 Woodward Avenue, Detroit, Michigan 48226.

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*Earl I. Heenan, Jr., Chairman and President

Director (since 1995), Vice Chairman (1988-1995) and President
(1955-1988), Detroit Mortgage & Realty Company; President (1989-1992)
and Trustee (since 1966), Cottage Hospital of Grosse Pointe (affiliate
of Henry Ford Health System); Trustee, Henry Ford Health Sciences Center
(since 1987); Trustee, Henry Ford Continuing Care Corporation (since 1980);
Trustee, Earhart Foundation (since 1980). He is 77 years old and his
address is 333 West Fort Street, Detroit, Michigan 48226.

*Eugene C. Yehle, Trustee and Treasurer

Will M. Caldwell, Trustee

Nicholas J. De Grazia, Trustee

Consultant, Lionel L.L.C. (since 1995); President, Chief Operating
Officer and Director, Lionel Trains, Inc. (1990-1995); Vice President-Finance
and Treasurer, University of Detroit (1986-1990); President (1981-1990) and
Director (1986-1995), Polymer Technologies, Inc.; President, Florence
Development Company (1987-1990); Chairman (since 1994) and Director
(1992-1995), Central Macomb County Chamber of Commerce; Vice Chairman, Michigan
Higher Education Facilities Authority (since 1991). He is 53 years old and his
address is 3650 Shorewood Drive, North Lakeport, Michigan 48059.

John P. Gould, Trustee

Marilyn McCoy, Trustee

- -----------------------------
* Trustees who are "interested persons" of the Trust, as defined in the 1940
Act.

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<PAGE>

Julius L. Pallone, Trustee

*Donald G. Sutherland, Trustee

Partner of the law firm Ice, Miller, Donadio & Ryan, Indianapolis,
Indiana. He is 67 years old, and his address is One American Square, 34th
Floor, Indianapolis, Indiana 46204.

Donald L. Tuttle, Trustee

Vice President (since 1995), Senior Vice President (1992-1995),
Association for Investment Management and Research; Senior Professor of
Finance, Indiana University (1970-1991); Vice President, Trust & Investment
Advisers, Inc. (1990-1991); Director, Federal Home Loan Bank of Indianapolis
(1981 to 1985). He is 61 years old, and his address is 5 Boar's Head Lane,
Charlottesville, Virginia 22903.

W. Bruce McConnel, III, Secretary

Partner of the law firm Drinker Biddle & Reath, Philadelphia,
Pennsylvania. He is 53 years old, and his address is 1345 Chestnut Street,
Philadelphia, Pennsylvania 19107.

Investment Adviser, Custodian and Transfer Agent

The investment adviser for each Portfolio is NBD, a wholly owned
subsidiary of First Chicago NBD Corporation, a bank holding company. NBD has
offices at 611 Woodward Avenue, Detroit, Michigan 48226. As of December 31,
1995, NBD was providing investment management and advisory services for
accounts aggregating approximately $37.9 billion. NBD has been in the business
of providing such services since 1933. Included among NBD's accounts are
pension and profit sharing funds for major corporations and state and local
governments, commingled trust funds and a variety of institutional and
personal advisory accounts, estates and trusts. NBD also acts as investment
adviser for other registered investment company portfolios.

NBD provides investment advisory and certain administrative services
to each Portfolio pursuant to an Advisory Agreement. Subject to the overall
supervision of the Board of Trustees, NBD makes investment decisions for each
of the Portfolios.

- -----------------------------
* Trustees who are "interested persons" of the Trust, as defined in the 1940
Act.

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Jeffrey C. Beard, First Vice President and Gary L. Konsler, First Vice
President, are primarily responsible for the day-to-day management of the
Growth/Value and Capital Growth Portfolios. Mr. Beard joined NBD in 1982 after
receiving an MBA in Finance from Michigan State University in 1981. Mr.
Konsler joined NBD in 1973 after receiving a JD from Indiana University.

Ronald L. Doyle, First Vice President, and Joseph R. Gatz, Second Vice
President, are primarily responsible for the day-to-day management of the
Opportunity Portfolio. Mr. Doyle joined NBD in 1982 after receiving his MBA in
Finance from Michigan State University. Mr. Gatz joined NBD in 1986 after
receiving his MBA from Indiana University.

Chris M. Gassen, Vice President, and F. Richard Neumann, Vice
President, are primarily responsible for the day-to-day management of the
Intrinsic Value Portfolio. Mr. Gassen joined NBD in 1985 after receiving an
MBA in Finance from Indiana University. Mr. Neumann joined NBD in 1981 after
receiving an MBA in Finance/Accounting from the University of Chicago.

Claude B. Erb, First Vice President, is primarily responsible
for the day-to-day portfolio management of the Balanced Portfolio. Mr. Erb
joined First Chicago NBD Corporation in 1993, after receiving his MBA in
Finance from the University of California.

Richard P. Kost, First Vice President and Clyde L. Carter, Jr.,
Assistant Vice President, are primarily responsible for the day-to-day
portfolio management of the International Equity Portfolio. Mr. Kost joined
NBD in 1964 after he received his MBA from the University of Michigan. Mr.
Carter joined NBD in 1987 after he received his MBA from Western Michigan
University.

For its services under the Advisory Agreement, NBD is entitled to
receive advisory fees, computed daily and payable monthly, at an annual rate
of .75% of the average daily net assets of each of the Portfolios. In
addition, NBD is entitled to 4/10ths of the gross income earned by a Portfolio
on each loan of securities (excluding capital gains and losses, if any). NBD
may voluntarily waive its fees in whole or in part with respect to any
particular Portfolio.

Banking laws and regulations currently prohibit a bank holding company
registered under the Bank Holding Company Act of 1956 or any affiliate thereof
from sponsoring, organizing, controlling, or distributing the shares of a
registered open-end investment company continuously engaged in the issuance of
its shares, and prohibit banks generally from underwriting securities, but do
not prohibit such a bank holding company or affiliate from acting as
investment adviser, transfer agent, or custodian to such an investment company
or from purchasing shares of such a company as agent for and upon the order of
a customer. The Adviser and the Trust believe that the Adviser may perform the
advisory, custodial and transfer agency services for the Trust described in
this Prospectus, and that the Adviser, subject to such banking laws and
regulations, may perform the shareholder services contemplated by this
Prospectus, without violation of such banking laws or regulations. However,
future changes in legal requirements relating to the permissible activities of
banks and their affiliates, as well as future interpretations of present
requirements, could prevent the Adviser from continuing to perform investment
advisory, custodial or transfer agency services for the Trust or require the
Adviser to alter or discontinue the services provided by it to shareholders.

-43-

<PAGE>

agreements with another entity or entities qualified to perform such services
and selected by the Board. If the Adviser or its affiliates were required to
discontinue all or part of its shareholder servicing activities, their
customers would be permitted to remain the beneficial owners of Portfolio
shares and alternative means for continuing the servicing of such customers
would be sought. The Trust does not anticipate that investors would suffer any
adverse financial consequences as a result of these occurrences.

Sponsors and Co-Distributors

Service and Distribution Plan

The Trust has adopted its Distribution Plan pursuant to Rule 12b-1
under the 1940 Act (the "Plan"). Under the Plan, the Trust incurs expenses
primarily intended to result in the sale of the Trust's shares in an amount
not to exceed .35 of 1% of the value of each portfolio's average daily net
assets calculated as follows in the case of each Portfolio: (i) fees payable
to the Co- Distributors pursuant to the Distribution Agreement; (ii) the
actual costs and expenses in connection with advertising and marketing the
Portfolio's shares; and (iii) fees pursuant to agreements with securities
dealers, financial institutions and other professionals ("Service Agents") for
administration or servicing of Portfolio shareholders ("Servicing"). Servicing
may include, among other things: answering client inquiries regarding the
Trust and the Portfolios; assisting clients in changing dividend options,
account designations and addresses; performing sub-accounting; establishing
and maintaining shareholder accounts and records; processing purchase and
redemption transactions; investing client cash account balances automatically
in Portfolio shares; providing periodic statements showing a client's account
balance and integrating such statements with those of other transactions and
balances in the client's other accounts serviced by the Service Agent;
arranging for bank wires; and such other services as the Trust may request, to
the extent the Service Agent is permitted by applicable statute, rule or
regulation. Under the Plan, the Trust also bears the cost of preparing and
printing Prospectuses for use in selling shares of the Trust and costs
associated with implementing and operating the Plan. These costs are included
in computing the .35 of 1% limitation set forth above.

-44-

<PAGE>

assets of the Trust's investment portfolios attributable to investments by
clients of Essex. The payments to be made to the Co-Distributors which are
based on a percentage of the net assets of the Portfolios are designed to
compensate the Co-Distributors for their participation in the distribution of
the Portfolios' shares and to reimburse the Co-Distributors for certain
distribution costs. Nonreimbursable expenses of the Co-Distributors include
salaries of executives, sales and clerical personnel performing services for
the Trust, and overhead expenses. Such costs are by their nature not subject
to precise quantification and the Trustees have determined that the fees to be
paid to the Co-Distributors are reasonable under the circumstances.

Shareholder Servicing Plan

Pursuant to a Shareholder Servicing Plan ("Servicing Plan") adopted by
its Board of Trustees, the Trust may enter into agreements ("Servicing
Agreements") with banks and financial institutions, which may include the
Adviser and its affiliates ("Shareholder Servicing Agents"), under which they
will render shareholder administrative support services for their customers
who beneficially own Class A shares of the Portfolios. Such services, which
are described more fully in the Statement of Additional Information, may
include processing purchase and redemption requests from customers, placing
net purchase and redemption orders with a Co-Distributor, processing, among
other things, distribution payments from the Trust, providing necessary
personnel and facilities to establish and maintain customer accounts and
records, and providing information periodically to customers showing their
positions in Class A shares.

Conflict of interest restrictions may apply to the receipt of
compensation paid by the Trust to a Shareholder Servicing Agent in connection
with the investment of fiduciary funds in Portfolio shares. Banks and other
institutions regulated by the Comptroller of the Currency or other federal or
state bank regulatory agencies, and investment advisers and other money
managers subject to the jurisdiction of the SEC, the Department of Labor or
state securities commissions, are urged to consult legal counsel before
entering into Servicing Agreements.

-45-

<PAGE>

Trust Expenses

The Trust is responsible for the payment of its expenses. These
include, for example, fees payable to NBD as Adviser, or expenses otherwise
incurred by the Trust in connection with the management of the investment of
the Trust's assets such as brokerage fees, commissions and other transaction
charges, the fees and expenses of NBD as the Trust's Custodian and as its
Transfer Agent, the fees payable to the Co-Distributors under the Distribution
Agreement, the fees and expenses of Trustees, expenses associated with the
Trust's Distribution Plan and Shareholder Servicing Plan, outside auditing and
legal expenses, all taxes and corporate fees payable by the Trust, SEC fees,
state securities qualification fees, costs of preparing and printing
prospectuses for regulatory purposes and for distribution to shareholders,
costs of shareholder reports and shareholder meetings, and any extraordinary
expenses. Each Portfolio also pays for brokerage commissions and transfer
taxes (if any) in connection with the purchase and sale of portfolio
securities. Expenses attributable to a particular Portfolio of the Trust will
be charged to that Portfolio, and expenses not readily identifiable as
belonging to a particular Portfolio will be allocated by the Board of Trustees
among one or more Portfolios in such a manner as it shall deem fair and
equitable. For the fiscal year ended December 31, 1995, the Growth/Value,
Opportunity, Intrinsic Value, Capital Growth, Balanced and International
Equity Portfolios' total expenses were .84%, .89%, .91%, .86%, .91% and 1.16%
(after fee waivers, if any) of their average net assets, respectively. The
Statement of Additional Information describes in more detail the fees and
expenses borne by the Trust.

OTHER INFORMATION

The Trust was organized as a Massachusetts business trust on April 21,
1987 under a Declaration of Trust which was amended and restated as of May 1,
1992. The Trust is a series fund having seventeen series of shares of
beneficial interest, each of which evidences an interest in a separate
investment portfolio. The Declaration of Trust permits the Board of Trustees
to issue an unlimited number of full and fractional shares and to create an
unlimited number of series of shares ("Series") representing interests in a
portfolio and an unlimited number of classes of shares within a Series. In
addition to the Portfolios described herein, the Trust offers the following
investment portfolios: the Woodward Money Market Fund, Government Fund,
Treasury Money Market Fund, Tax- Exempt Money Market Fund, Michigan Tax-Exempt
Money Market Fund, Intermediate Bond Fund, Bond Fund, Short Bond Fund,
Municipal Bond Fund, Michigan Municipal Bond Fund and Equity Index Fund. The
Trust has established the following two distinct classes of shares within each
Portfolio described herein: Class I shares (Original Class) and Class A shares
(Special Class 1). A sales person and any other person or institution entitled
to receive compensation for selling or servicing shares may receive different
compensation with respect to different classes of shares in the Series. Each
share has $.10 par value, represents an equal proportionate interest in the
related Portfolio with other shares of the same class outstanding, and is
entitled to such dividends and distributions out of the income earned on the
assets belonging to such Portfolio as are declared in the discretion of the
Board of Trustees.

Shareholders are entitled to one vote for each full share held, and a
proportionate fractional vote for each fractional share held, and each Series
entitled to vote on a matter will vote thereon in the aggregate and not by
Series, except as otherwise expressly required by law or when the Board of
Trustees determines that the matter to be voted on affects only the interests
of shareholders of a particular Series. In addition, shareholders of each of
the Series have equal voting rights except that only shares of a particular
class within a Series are entitled to vote on matters affecting only that
class. Voting rights are not cumulative, and accordingly, the holders of more
than 50% of the aggregate number of shares of all Trust portfolios may elect
all of the Trustees.

-46-

<PAGE>

As of March 29, 1996, NBD held beneficially or of record
approximately 84.53%, 80.72%, 79.93%, 69.57%, 88.25% and 89.56% of the
outstanding shares of the Growth/Value, Opportunity, Intrinsic Value, Capital
Growth, Balanced and International Equity Portfolios, respectively, and
therefore may be considered to be a controlling person of the Trust for
purposes of the 1940 Act.

The Trust does not presently intend to hold annual meetings of
shareholders except as required by the 1940 Act or other applicable law. The
Trust's By-Laws provide that special meetings of shareholders of any Series
shall be called at the written request of shareholders entitled to cast at
least 10% of the votes of a Series entitled to be cast at such meeting. The
Trust also stands ready to assist shareholder communications in connection
with any meeting of shareholders as prescribed in Section 16(c) of the 1940
Act.

-47-

<PAGE>

[ BACK COVER, COLUMN 1 ]

No person has been authorized to give
any information or to make any
representations not contained in this
Prospectus, or in the Portfolios'
Statement of Additional Information
incorporated herein by reference, in
connection with the offering made by
this Prospectus and, if given or
made, such information or
representations must not be relied
upon as having been authorized by the
Trust, Adviser or Sponsors and Co-
Distributors. This Prospectus does
not constitute an offering by the
Portfolios or by their Co-
Distributors, in any jurisdiction in
which such offering may not lawfully
be made.

TABLE OF CONTENTS Page

EXPENSE SUMMARY............................. 2
BACKGROUND.................................. 4
FINANCIAL HIGHLIGHTS........................ 5
INTRODUCTION................................ 11
PROPOSED REORGANIZATION..................... 11
INVESTMENT OBJECTIVES, POLICIES AND
RISK FACTORS.......................... 11
OTHER INVESTMENT POLICIES................... 16
PURCHASE OF SHARES.......................... 30
PUBLIC OFFERING PRICE....................... 32
REDEMPTION OF SHARES........................ 34
SHAREHOLDER SERVICES........................ 35
PERFORMANCE INFORMATION..................... 38
DIVIDENDS AND DISTRIBUTIONS................. 38
TAXES .................................... 39
MANAGEMENT.................................. 40
OTHER INFORMATION........................... 46

<PAGE>
[ BACK COVER, COLUMN 2 ]

CLASS A SHARES OF THE:
WOODWARD GROWTH/VALUE FUND

WOODWARD OPPORTUNITY FUND

WOODWARD INTRINSIC VALUE FUND

WOODWARD CAPITAL GROWTH FUND

WOODWARD BALANCED FUND

WOODWARD INTERNATIONAL EQUITY FUND

THE WOODWARD FUNDS(R)

Prospectus
April 15, 1996

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<PAGE>

24 Hour yield and performance information
Purchase and Redemption orders:
(800) 688-3350
- ------------------------------------------------------------------------------
The Woodward Funds (the "Trust") is offering in this Prospectus shares
in the following investment portfolio which has its own investment objective
and policies as described in this Prospectus:

Class A shares of the:

Woodward Equity Index Fund

The Woodward Equity Index Fund ("Equity Index Portfolio" or the
"Portfolio") is advised by NBD Bank ("NBD" or the "Adviser") and is sponsored
and distributed by First of Michigan Corporation ("FoM" or "Co-Distributor")
and Essex National Securities, Inc. ("Essex" or "Co-Distributor").

This Prospectus sets forth concisely information that a prospective
investor should consider before investing. Investors should read this
Prospectus and retain it for future reference. Additional information about
the Trust, contained in a Statement of Additional Information, has been filed
with the Securities and Exchange Commission (the "SEC") and is available upon
request without charge by writing to The Woodward Funds at the address above.
The Statement of Additional Information bears the same date as this Prospectus
and is incorporated by reference in its entirety into the Prospectus.

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

INVESTMENT ADVISER:

NBD Bank

<PAGE>

EXPENSE SUMMARY

The Trust currently offers Class I shares (formerly known as
"Institutional Shares") and Class A shares (formerly known as "Retail Shares")
in the Portfolio. Class I shares are sold primarily to NBD and its affiliated
and correspondent banks acting on behalf of their respective customers. Class
A shares are sold to the general public primarily through financial
institutions such as banks, brokers and dealers. Class I shares are offered in
a separate Prospectus. Investors should call (800) 688-3350, a Co-Distributor
or their financial institutions if they would like to obtain more information
concerning Class I shares and/or Class A shares of the Portfolios. The
following table is provided to assist investors in understanding the various
costs and expenses that an investor will indirectly incur as a beneficial
owner of Class A shares in the Portfolio.

<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases................ None
(as a percentage of offering price)

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

ANNUAL FUND OPERATING EXPENSES1
(as a percentage of average net assets)
Management Fees........................................ .10%
12b-1 Fees............................................. .03%
Shareholder Servicing Fees(2).......................... .25%
Other Expenses
(assuming no fee waivers and/or expense reimbursements) .03%
Total Operating Expenses
(assuming no fee waivers and/or expense reimbursements) .41%
<FN>
- ---------------------

1. The expenses for the Portfolio have been restated to reflect
current expenses.

3. Credits or charges not reflected in the expense table may be
incurred directly by customers of financial institutions in connection with an
investment in the Portfolio.

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

Example
You would pay the following
expenses on a $1,000
investment, assuming:
(1) a 5% annual return
and (2) redemption at the
end of each time period:
One Year................... $ 4.20
Three Years................ 13.19
Five Years................. 23.02
Ten Years.................. 51.83
</TABLE>

-2-

<PAGE>

THE FOREGOING SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES OR RATES OF RETURN. ACTUAL EXPENSES OR RATE OF RETURN MAY BE GREATER
OR LESSER THAN THOSE SHOWN.

The example demonstrates the projected dollar amount of total cumulative
expenses that would be incurred over various periods with respect to a
hypothetical investment in Class A shares in the Portfolio, based upon payment
by the Portfolio of operating expenses at the respective levels set forth in
the expense table. For more complete descriptions of Portfolio expenses, see
"Investment Adviser, Custodian and Transfer Agent", "Sponsors and Co-
Distributors", "Shareholder Servicing Plan", "Service and Distribution Plan"
and "Trust Expenses" under the heading "Management" in this Prospectus and the
financial statements and related notes contained in the Statement of
Additional Information.

-3-

<PAGE>

BACKGROUND

Shares of the Portfolio have been classified into two separate classes of
shares -- Class I shares and Class A shares. Only the Class A shares are
offered pursuant to this Prospectus. Until April 15, 1996, Class I shares and
Class A shares represented equal pro rata interests in the Portfolio. As of
such date, the Trust implemented its Shareholder Servicing Plan with respect
to Class A shares only and began to allocate Servicing Fees attributable to
such shares exclusively to them. See "Shareholder Servicing Plan" and
"Investment Adviser, Custodian and Transfer Agent" under "Management," and see
"Dividends and Distributions" and "Other Information" for a description of the
impact that this may have on holders of Class A shares.

-4-

<PAGE>

FINANCIAL HIGHLIGHTS

The table below provides supplementary information to the Portfolio's
financial statements contained in the Statement of Additional Information and
sets forth certain information concerning the historic investment results of
Portfolio shares. It presents a per share analysis of how the Portfolio's net
asset value has changed during the periods presented. The table has been
derived from the Portfolio's financial statements which have been audited by
Arthur Andersen LLP, the Trust's independent public accountants, whose report
thereon is contained in the Statement of Additional Information along with the
financial statements. The financial data included in the table should be read
in conjunction with the financial statements and related notes included in the
Statement of Additional Information. Further information about the performance
of the Portfolio is available in annual reports to shareholders. The Statement
of Additional Information and annual reports to shareholders may be obtained
from the Trust free of charge by calling (800) 688-3350.

June 1, 1992
(Commencement
Year Ended Year Ended Year Ended of Operations) to
December December December December 31,
31, 1995 31, 1994 31, 1993 1992
---------- ---------- ---------- -----------------
<S> <C> <C> <C> <C>
Net asset value, beginning
of period .................. $ 10.65 $ 11.15 $ 10.52 $ 10.00
Income from investment
operations:
Net investment income ...... 0.30 0.31 0.28 0.12
Net realized and unrealized
gains (losses) on
investments .............. 3.65 (0.20) 0.75 0.52
--------------- --------------- --------------- ---------------
Total from investment
operations ............... $ 3.95 $ 0.11 $ 1.03 $ 0.64
--------------- --------------- --------------- ---------------
Less distributions:
From net investment
income ................... $ (0.31) $ (0.30) $ (0.27) $ (0.12)
From realized
gains .................... (0.14) (0.23) (0.13) 0.00
In excess
of realized gains ......... (0.00) (0.08) 0.00 0.00
--------------- --------------- --------------- ---------------
Total distributions ......... $ (0.45) $ (0.61) $ (0.40) $ (0.12)
--------------- --------------- --------------- ---------------
Net asset value, end of
period ..................... $ 14.15 $ 10.65 $ 11.15 $ 10.52
=============== =============== =============== ===============

Total return ................. 37.35% 1.02% 9.77% 13.61%(a)
Ratios/Supplemental Data
Net assets, end of period .... $ 528,202,913 $ 340,808,050 $ 325,328,903 $ 242,057,866
Ratio of expenses to average
net assets ................. 0.15% 0.17% 0.20% 0.22%(a)
Ratio of net investment income
to average net assets ...... 2.39% 2.71% 2.59% 2.71%(a)
Portfolio turnover rate ...... 10.66% 24.15% 16.01% 0.50%
Average Commission Rate ...... $ 0.03%
<FN>
- ---------------

(a) Annualized for periods less than one year for comparability
purposes. Actual annual values may be less than or greater than those shown.
</TABLE>

-5-

<PAGE>

INTRODUCTION

PROPOSED REORGANIZATION

INVESTMENT OBJECTIVE, POLICIES AND RISK FACTORS

The investment objective of the Portfolio may not be changed without
approval of the holders of at least a majority of the outstanding shares of
the Portfolio. See "Other Information." Except as noted below under
"Investment Limitations," the Portfolio's investment policies may be changed
without a vote of shareholders. There can be no assurance that the Portfolio
will achieve its objective.

The investment objective of the Portfolio is to provide an investment
return which substantially duplicates the price and yield performance of
domestically traded common stocks in the aggregate, as represented by the
Standard & Poor's Composite Stock Price Index (the "S&P 500 Index" or
"Index"). The Portfolio uses the S&P 500 Index as a benchmark for comparison
because it represents roughly two-thirds of the market value of all publicly
traded common stocks in the United States, is well known to investors and is a
widely accepted measure of common stock investment returns. The Index contains
a representative sample of common stocks that trade on the New York and
American Stock Exchanges and also contains over-the-counter stocks that are a
part of the National Market System. The S&P 500 Index is constructed using a
"bottom-up" approach through identification of important industry categories
and allocation of a representative sample of stocks to these categories.

-6-

<PAGE>

Index. However, there is no assurance that the Portfolio's objective will be
attained. Deviations from the performance of the Index ("tracking error") may
result from shareholder purchases and redemptions of shares of the Portfolio
that occur daily, as well as from the expenses borne by the Portfolio. To the
extent that a cash reserve is held to meet expected redemptions or pending
investment in securities, to the extent that securities must be sold to meet
redemption requests, and to the extent that purchases and sales are made to
conform the Portfolio's holdings more closely with that of the Index in
response to cash inflows or outflows and associated brokerage costs are
incurred, these daily inflows or outflows of cash may increase the Portfolio's
tracking error. In addition, tracking error may occur due to changes made in
the S&P 500 Index and the manner in which the Index is calculated by S&P among
other factors. In the event the performance of the Portfolio is not comparable
to the performance of the Index, the Board of Trustees will examine the
reasons for the deviation and the availability of corrective measures. These
measures may include adjustments to the Adviser's portfolio management
practices. If substantial deviation in the Portfolio's performance were to
continue for extended periods, it is expected that the Board of Trustees would
consider possible changes to the Portfolio's investment objective.

The Portfolio will not be managed by using traditional economic,
financial or market analysis. Instead, the Portfolio utilizes a sampling
methodology to determine which stocks to purchase or sell in order to closely
replicate the performance of the S&P 500 Index. Stocks are selected for the
Portfolio based on both capitalization weighing in the Index and industry
representation. Larger market capitalization securities in the Index are added
to the Portfolio according to their relative weight. Smaller capitalization
securities are then added to the Portfolio in equal weights according to an
analysis of the industry diversification of the Index. Therefore, while all
industry weights in the Portfolio are essentially matched to those of the S&P
500 Index, not necessarily all 500 stocks are held in the Portfolio. The
Adviser believes that a sampling methodology allows the Portfolio to maintain
a close correlation to the performance of the S&P 500 Index while at the same
time controlling the portfolio turnover and transaction costs of the
Portfolio.

Under normal market conditions, the Portfolio invests substantially
all of its total assets in the common stocks that comprise the Index in
accordance with their relative capitalization and sector weightings as
described above. It is possible, that if an issuer drops in ranking, or is
eliminated entirely from the Index, the Adviser may be required to sell some
or all of the common stock of such issuer then held by the Portfolio. Sales of
portfolio securities may be made at times when, if the Adviser were not
required to effect purchases and sales of portfolio securities in accordance
with the Index, such securities might not be sold. Such sales may result in
lower prices for such securities than may have been realized or in losses that
may not have been incurred if the Adviser were not required to effect the
purchases and sales. The failure of an issuer to declare or pay dividends, the
institution against an issuer of materially adverse legal proceedings, the
existence or threat of defaults materially and adversely affecting an issuer's
future declaration and payment of dividends, or the existence of other
materially adverse credit factors will not necessarily be the basis for the
disposition of portfolio securities, unless such event causes the issuer to be
eliminated entirely from the Index. The Portfolio may receive from time to
time as part of a "spin-off" or corporate restructuring of an issuer included
in the Index, securities that are themselves outside of the Index. Such
securities will be disposed of by the Portfolio in due course consistent with
the Portfolio's investment objective. In addition, the Portfolio may invest up
to 25% of its total assets in the securities of foreign issuers through
American Depository Receipts. An investment in the Portfolio involves risks
similar to those of investing in common stocks.

Pending investment and to meet anticipated redemption requests, the
Portfolio may hold up to 5% of its total assets in various short-term

-7-

<PAGE>

investments. In addition, up to 5% of the Portfolio's total assets may be
invested in futures contracts and related options in an effort to maintain
exposure to price movements in the Index pending investment of funds or while
maintaining liquidity to meet potential shareholder redemptions.

-8-

<PAGE>

OTHER INVESTMENT POLICIES

Ratings

If not rated as commercial paper, debt obligations acquired by the
Portfolio will be investment grade at the time of purchase, i.e., obligations
rated AAA, AA, A or BBB by Standard & Poor's Rating Group, Division of McGraw-
Hill ("S&P"), Fitch Investors Service ("Fitch") or IBCA, Inc. ("IBCA") or Aaa,
Aa, A or Baa by Moody's Investors Service, Inc. ("Moody's") or be unrated but
deemed by the Adviser to be comparable in quality at the time of purchase to
instruments that are so rated. Obligations rated in the lowest of the top four
rating categories (Baa by Moody's or BBB by S&P or Fitch or IBCA) are
considered to have less capacity to pay interest and repay principal and have
certain speculative characteristics. The debt ratings are described in the
Statement of Additional Information.

Short-Term Investments

The Portfolio may hold short-term U.S. Government obligations, "high
quality" money market instruments such as certificates of deposit, bankers'
acceptances and time deposits (i.e. those rated at the time of purchase within
the two highest rating categories or which are unrated at such time but are
deemed by the Adviser to be of comparable quality), repurchase agreements,
reverse repurchase agreements, short-term obligations issued by state and
local governmental issuers which carry yields that are competitive with those
of other types of high quality money market instruments, commercial paper,
notes, other short-term obligations, variable rate master demand notes, and
cash, pending investment or to meet anticipated redemption requests. Such
investments may be in such proportions as, in the opinion of the Adviser,
existing circumstances may warrant, and may include obligations of foreign
banks and foreign branches of U.S banks. The Portfolio may also invest its
cash balances in securities issued by other investment companies which invest
in high-quality, short-term debt securities. As a shareholder of another
investment company, the Portfolio would bear, along with other shareholders,
its pro rata portion of the other investment company's expenses, including
advisory fees. These expenses would be in addition to the advisory and other
expenses that the Portfolio bears directly in connection with its own
operations. These short-term investments are described in greater detail in
the Statement of Additional Information.

U.S. Government Obligations

The Portfolio may invest in all types of U.S. Government securities,
including U.S. Treasury bonds, notes and bills, and obligations of Federal
Home Loan Banks, Federal Farm Credit Banks, Federal Land Banks, the Federal
Housing Administration, Farmers Home Administration, Export-Import Bank of the
United States, Small Business Administration, Government National Mortgage
Association, Federal National Mortgage Association, General Services
Administration, Student Loan Marketing Association, Central Bank for
Cooperatives, Federal Home Loan Mortgage Corporation, Federal Intermediate
Credit Banks, Tennessee Valley Authority, Resolution Funding Corporation and
Maritime Administration. The Portfolio may also invest in interests in the
foregoing securities, including collateralized mortgage obligations guaranteed
by a U.S. Government agency or instrumentality, and in Government-backed
trusts which hold obligations of foreign governments that are guaranteed or
backed by the full faith and credit of the United States.

-9-

<PAGE>

to purchase the agency's obligations; still others, such as those of the
Student Loan Marketing Association, are supported only by the credit of the
instrumentality.

Repurchase and Reverse Repurchase Agreements

To increase its income, the Portfolio may agree to purchase portfolio
securities from financial institutions subject to the seller's agreement to
repurchase them at a mutually agreed-upon date and price ("repurchase
agreements"). The Portfolio will not enter into repurchase agreements with the
Adviser, the Co-Distributors, or any of their affiliates. The seller under a
repurchase agreement will be required to maintain the value of the securities
subject to the agreement at not less than the repurchase price, marked to
market daily. Default by the seller would, however, expose the Portfolio to
possible loss because of adverse market action or delay in connection with the
disposition of the underlying obligations.

The Portfolio may also obtain funds for temporary purposes by entering
into reverse repurchase agreements. Pursuant to such agreements the Portfolio
will sell portfolio securities to financial institutions such as banks and
broker-dealers and agree to repurchase them at a particular date and price.
Reverse repurchase agreements involve the risk that the market value of the
securities sold by the Portfolio may decline below the price of the securities
it is obligated to repurchase.

Lending Portfolio Securities

To increase income or offset expenses, the Portfolio may lend its
portfolio securities to financial institutions such as banks and
broker-dealers in accordance with the investment limitations described below.
Agreements would require that the loans be continuously secured by collateral
equal at all times in value to at least the market value of the securities
loaned plus accrued interest. Collateral for such loans could include cash or
securities of the U.S. Government, its agencies or instrumentalities. Such
loans will not be made if, as a result, the aggregate of all outstanding loans
of the Portfolio exceeds one-third of the value of its total assets. Loans of
securities involve risks of delay in receiving additional collateral or in
recovering the securities loaned or possible loss of rights in the collateral
should the borrower of the securities become insolvent. Loans will be made
only to borrowers that provide the requisite collateral comprised of liquid
assets and when, in the Adviser's judgment, the income to be earned from the
loan justifies the attendant risks.

Illiquid Securities

In accordance with its fundamental investment limitation described
below, the Portfolio will not knowingly invest more than 10% of the value of
its total assets in securities that are illiquid. Securities having legal or
contractual restrictions on resale or no readily available market, and
instruments (including repurchase agreements, variable and floating rate
instruments and time deposits) that do not provide for payment to the
Portfolio within seven days after notice are subject to this 10% limit.
Securities that have legal or contractual restrictions on resale but have a
readily available market are not deemed to be illiquid for purposes of this
limitation.

The Portfolio may purchase securities which are not registered under
the Securities Act of 1933, as amended (the "1933 Act"), but which can be sold
to

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<PAGE>

"qualified institutional buyers" in accordance with Rule 144A under the 1933
Act. Any such security will not be considered to be illiquid so long as it is
determined by the Board of Trustees or the Adviser, acting under guidelines
approved and monitored by the Board, that an adequate trading market exists
for that security. This investment practice could have the effect of
increasing the level of illiquidity in the Portfolio during any period that
qualified institutional buyers become uninterested in purchasing these
restricted securities. The ability to sell to qualified institutional buyers
under Rule 144A is a recent development, and it is not possible to predict how
this market will develop. The Board of Trustees will carefully monitor any
investments by the Portfolio in these securities.

Borrowings

The Portfolio may borrow money for temporary purposes in accordance
with the investment limitations described below. Borrowings may be effected
through reverse repurchase agreements under which the Portfolio would sell
portfolio securities to financial institutions such as banks and
broker-dealers and agree to repurchase them at a particular date and price.
Reverse repurchase agreements involve the risk that the market value of the
securities sold by the Portfolio may decline below the price of the securities
it is obligated to repurchase.

Foreign Securities

As stated above, the Portfolio may invest up to 25% of its total
assets (exclusive of short-term cash investments) in the securities of foreign
issuers through American Depository Receipts. Investments in foreign
securities, whether made directly or indirectly, involve certain inherent
risks, such as political or economic instability of the issuer or the country
of issue, the difficulty of predicting international trade patterns, changes
in exchange rates of foreign currencies and the possibility of adverse changes
in investment or exchange control regulations. There may be less publicly
available information about a foreign company than about a U.S. company.
Listed foreign companies generally are not subject to uniform accounting,
auditing and financial reporting standards comparable to those applicable to
domestic companies. Further, foreign stock markets are generally not as
developed or efficient as those in the U.S. and in most foreign markets volume
and liquidity are less than in the U.S. Fixed commissions on foreign stock
exchanges are generally higher than the negotiated commissions on U.S.
exchanges, and there is generally less government supervision and regulation
of foreign stock exchanges, brokers and listed companies than in the U.S. With
respect to certain foreign countries, there is a possibility of expropriation
or confiscatory taxation, limitations on the removal of funds or other assets
or diplomatic developments that could affect investment within those
countries. Because of these and other factors, securities of foreign companies
acquired by the Portfolio may be subject to greater fluctuation in price than
securities of domestic companies.

American Depository Receipts ("ADRs")

The Portfolio may invest in securities of foreign issuers in the form
of ADRs or similar securities representing securities of foreign issuers.
These securities may not be denominated in the same currency as the securities
they represent. ADRs are receipts typically issued by a United States bank or
trust company evidencing ownership of the underlying foreign securities and
are denominated in U.S. dollars. Certain such institutions issuing ADRs may
not be sponsored by the issuer. A non-sponsored depository may not provide the
same shareholder information that a sponsored depository is required to
provide under its contractual arrangements with the issuer.

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<PAGE>

When-Issued Purchases and Forward Commitments

The Portfolio may purchase securities on a "when-issued" basis and may
purchase or sell securities on a "forward commitment" basis. These
transactions, which involve a commitment by the Portfolio to purchase or sell
particular securities with payment and delivery taking place at a future date
(perhaps one or two months later), permit the Portfolio to lock-in a price or
yield on a security it owns or intends to purchase, regardless of future
changes in interest rates. When-issued and forward commitment transactions
involve the risk, however, that the yield obtained in a transaction may be
less favorable than the yield available in the market when the securities
delivery takes place. The Portfolio's forward commitments and when-issued
purchases are not expected to exceed 25% of the value of its total assets
absent unusual market conditions. The Portfolio does not earn income with
respect to these transactions until the subject securities are delivered to
the Portfolio. The Portfolio does not intend to engage in when-issued
purchases and forward commitments for speculative purposes but only in
furtherance of its investment objective.

Zero Coupon Obligations

The Portfolio may invest in zero coupon obligations which are discount
debt obligations that do not make periodic interest payments although income
is generally imputed to the holder on a current basis. Such obligations may
have higher price volatility than those which require the payment of interest
periodically. The Adviser will consider the liquidity needs of the Portfolio
when any investment in zero coupon obligations is made.

Futures Contracts and Related Options

The Portfolio may trade futures contracts and options on futures
contracts in U.S. domestic markets, such as the Chicago Board of Trade and the
International Monetary Market of the Chicago Mercantile Exchange. The
Portfolio may purchase and sell futures contracts which obligate it to take or
make delivery of certain securities at maturity, as well as stock index
futures contracts which are bilateral agreements pursuant to which two parties
agree to take or make delivery of an amount of cash equal to a specified
dollar amount times the difference between the stock index value (which
assigns relative values to the common stocks included in the index) at the
close of the last trading day of the contract and the price at which the
futures contract is originally struck. No physical delivery of the underlying
stocks in the index is made.

The Portfolio may sell a futures contract in order to offset an
expected decrease in the value of its portfolio that might otherwise result
from a market decline. The Portfolio may do so either to hedge the value of
its securities portfolio as a whole, or to protect against declines occurring
prior to sales of securities in the value of the securities to be sold. In
addition, the Portfolio may utilize futures contracts in anticipation of
changes in the composition of its holdings.

The Portfolio may also purchase options on futures contracts including
stock index futures contracts. A futures option gives the holder, in return
for the premium paid, the right to buy (call) from or sell (put) to the writer
of the option a futures contract at a specified price at any time during the
period of the option.

When the Portfolio sells an option on a futures contract, it becomes
obligated to purchase or sell a futures contract if the option is exercised.
In anticipation of a market advance, the Portfolio may purchase call options
on futures contracts as a substitute for the purchase of futures contracts to
hedge against a possible increase in the price of securities which the
Portfolio intends to purchase. Similarly, if the value of the Portfolio's
portfolio

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<PAGE>

securities is expected to decline, the Portfolio might purchase put options or
sell call options on futures contracts rather than sell futures contracts.

The Portfolio's commodities transactions must constitute bona fide
hedging or other permissible transactions pursuant to regulations promulgated
by the Commodities and Futures Trading Commission ("CFTC"). In addition, the
Portfolio may not engage in such transactions if the sum of the amount of
initial margin deposits and premiums paid for unexpired commodity options,
other than for bona fide hedging transactions, would exceed 5% of the
liquidation value of its assets, after taking into account unrealized profits
and unrealized losses on such contracts it has entered into; provided,
however, that in the case of an option that is in-the-money at the time of
purchase, the in-the-money amount may be excluded in calculating the
percentage limitation. Pursuant to SEC requirements, the Portfolio may be
required to segregate cash or high quality money market instruments in
connection with its commodities transactions in an amount generally equal to
the value of the underlying commodity. The Trust intends to comply with the
regulations of the CFTC exempting the Portfolio from registration as a
"commodity pool operator".

For a more detailed description of futures contracts and related
options, see Appendix B to the Statement of Additional Information.

Risk Factors Associated with Futures and Related Options

To the extent the Portfolio is engaging in a futures transaction as a
hedging device, due to the risk of an imperfect correlation between securities
in its portfolio that are the subject of a hedging transaction and the futures
contract used as a hedging device, it is possible that the hedge will not be
fully effective in that, for example, losses on the portfolio securities may
be in excess of gains on the futures contract or losses on the futures
contract may be in excess of gains on the portfolio securities that were the
subject of the hedge. In futures contracts based on indices, the risk of
imperfect correlation increases as the composition of the Portfolio varies
from the composition of the index. In an effort to compensate for the
imperfect correlation of movements in the price of the securities being hedged
and movements in the price of futures contracts, the Portfolio may buy or sell
futures contracts in a greater or lesser dollar amount than the dollar amount
of the securities being hedged if the historical volatility of the futures
contract has been less or greater than that of the securities. Such "over
hedging" or "under hedging" may adversely affect the Portfolio's net
investment results if market movements are not as anticipated when the hedge
is established.

Successful use of futures by the Portfolio also is subject to the
Adviser's ability to predict correctly movements in the direction of
securities prices, interest rates and other economic factors. For example, if
the Portfolio has hedged against the possibility of a decline in the market
adversely affecting the value of securities held in its portfolio and prices
increase instead, the Portfolio will lose part or all of the benefit of the
increased value of securities which it has hedged because it will have
offsetting losses in its futures positions. In addition, in such situations,
if the Portfolio has insufficient cash, it may have to sell securities to meet
daily variation margin requirements. Such sales of securities may, but will
not necessarily, be at increased prices which reflect the rising market. The
Portfolio may have to sell securities at a time when it may be disadvantageous
to do so.

Although the Portfolio intends to enter into futures contracts and
options transactions only if there is an active market for such contracts, no
assurance can be given that a liquid market will exist for any particular
contract at any particular time. See "Illiquid Securities" above. Many futures
exchanges and boards of trade limit the amount of fluctuation permitted in
futures contract prices during a single trading day. Once the daily limit has
been reached in a particular contract, no trades may be made that day at a
price beyond that limit

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<PAGE>

or trading may be suspended for specified periods during the trading day.
Futures contracts prices could move to the limit for several consecutive
trading days with little or no trading, thereby preventing prompt liquidation
of futures positions and potentially subjecting the Portfolio to substantial
losses. If it is not possible, or the Portfolio determines not, to close a
futures position in anticipation of adverse price movements, it will be
required to make daily cash payments of variation margin. In such
circumstances, an increase in the value of the portion of the portfolio being
hedged, if any, may offset partially or completely losses on the futures
contract.

Risk Factors Associated with Derivative Instruments

The Portfolio may purchase certain derivative instruments.
Derivative instruments are instruments that derive value from the
performance of underlying assets, interest or currency exchange rates, or
indices, and include (but are not limited to) futures contracts, options and
structured debt obligations (including collateralized mortgage obligations and
various floating rate instruments).

Derivative instruments present, to varying degrees, market risk that
the performance of the underlying assets, exchange rates or indices will
decline; credit risk that the dealer or other counterparty to the transaction
will fail to pay its obligations; volatility and leveraging risk that, if
interest or exchange rates change adversely, the value of the derivative
instrument will decline more than the assets, rates or indices on which it is
based; liquidity risk that the Portfolio will be unable to sell a derivative
instrument when it wants because of lack of market depth or market disruption;
pricing risk that the value of a derivative instrument (such as an option)
will not correlate exactly to the value of the underlying assets, rates or
indices on which it is based; and operations risk that loss will occur as a
result of inadequate systems and controls, human error or otherwise. Some
derivative instruments are more complex than others, and for those
instruments that have been developed recently, data are lacking regarding
their actual performance over complete market cycles.

The Adviser will evaluate the risks presented by the derivative
instruments purchased by the Portfolio, and will determine, in connection with
its day-to-day management of the Portfolio, how they will be used in
furtherance of the Portfolio's investment objective. It is possible, however,
that the Adviser's evaluations will prove to be inaccurate or incomplete and,
even when accurate and complete, it is possible that the Portfolio will,
because of the risks discussed above, incur loss as a result of its
investments in derivative instruments.

Portfolio Turnover

The Portfolio's annual portfolio turnover rate will be somewhat
dependent on factors beyond the Adviser's control, such as changes made to the
S&P 500 Index, the dividend policy of issuers within the Index and the amount
of purchases and redemptions. A high rate of turnover may result in
correspondingly greater brokerage commissions and other transaction costs
which are borne indirectly by shareholders. Portfolio turnover may also result
in the realization of substantial net capital gains. (See "Taxes-Federal" in
the Prospectus and "Additional Information Concerning Taxes" in the Statement
of Additional Information.) Equity index funds typically have lower levels of
turnover than actively managed funds.

Investment Limitations

The Portfolio is subject to a number of investment limitations. The
following investment limitations are matters of fundamental policy and may not
be changed without the affirmative vote of the holders of a majority of the
Portfolio's outstanding shares. Other investment limitations that cannot be

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<PAGE>

changed without a vote of shareholders are contained in the Statement of
Additional Information under "Investment objective, Policies and Risk
Factors."

The Portfolio may not:

1. Purchase securities of any one issuer (other than securities issued
or guaranteed by the U.S. Government, its agencies or instrumentalities) if,
immediately after such purchase, more than 5% of the value of its total assets
would be invested in the securities of such issuer, or more than 10% of the
issuer's outstanding voting securities would be owned by the Portfolio, except
that up to 25% of the value of the Portfolio's total assets may be invested
without regard to these limitations.

3. Invest more than 10% of its total assets in illiquid investments.
See "Illiquid Securities" above.

4. Make loans, except that the Portfolio may purchase and hold debt
instruments and enter into repurchase agreements in accordance with its
investment objective and policies and may lend portfolio securities in an
amount not exceeding one-third of its total assets.

5. Borrow money or issue senior securities, except that the Portfolio
may borrow from banks and enter into reverse repurchase agreements for
temporary purposes in amounts not in excess of 10% of the value of its total
assets at the time of such borrowing; or mortgage, pledge or hypothecate any
assets, except in connection with any such borrowing and in amounts not in
excess of the lesser of the dollar amounts borrowed or 10% of the value of the
Portfolio's total assets at the time of such borrowing. The Portfolio will not
purchase securities while its borrowings (including reverse repurchase
agreements) in excess of 5% of its total assets are outstanding. Securities
held in escrow or separate accounts in connection with the Portfolio's
investment practices described in the Statement of Additional Information or
in this Prospectus are not deemed to be pledged for purposes of this
limitation.

Generally, if a percentage limitation is satisfied at the time of
investment, a later increase or decrease in such percentage resulting from a
change in the value of the Portfolio's portfolio securities will not
constitute a violation of such limitation for purposes of the 1940 Act.

In order to permit the sale of the Portfolio's shares in certain
states, the Portfolio may make commitments more restrictive than the
investment policies and limitations described above. Should the Portfolio
determine that any such commitment is no longer in the best interests of the
Portfolio, it will revoke the commitment by terminating sales of its shares in
the state involved.

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<PAGE>

PURCHASE OF SHARES
In General

The Portfolio's shares are offered and sold on a continuous basis by
FoM and Essex, as the Trust's Co-Distributors. FoM is a registered
broker/dealer with offices at 100 Renaissance Center, 26th Floor, Detroit,
Michigan 48243. Essex is a registered broker/dealer with offices at 215
Gateway Road West, Napa, California 94558.

Class A shares of the Portfolio are sold to the public primarily
through financial institutions such as banks, brokers and dealers. Investors
may purchase such shares directly in accordance with the procedures set forth
below or through procedures established by their financial institutions in
connection with the requirements of their accounts.

Financial institutions may impose different minimum investment and
other requirements on their customers and may charge additional fees in
connection with the establishment of accounts with the institutions and
purchase and redemption of Class A shares. Persons wishing to purchase Class A
shares through their accounts at an institution or a Co-Distributor should
contact the institution or Co-Distributor directly for appropriate
instructions and fee information. In addition, certain financial institutions
may impose different minimum investment and other requirements on their
customers. In addition, certain financial institutions may enter into
shareholder servicing agreements with the Trust whereby they would perform
various administrative support services for their customers who are the
beneficial owners of Class A shares in return for fees from the Portfolio.
See "Shareholder Servicing Plan" under the heading "Management" in this
Prospectus.

Institutions will be responsible for transmitting purchase and
redemption orders to FoM, Essex or NBD acting as transfer agent ("the Transfer
Agent") on a timely basis, in accordance with the procedures stated below.

Purchase Procedures

Orders for Class A shares may be placed by telephone by calling (800)
688-3350 (provided an investor has made the appropriate election in his
account application) or by mail (by completing the account application which
accompanies this Prospectus and mailing the completed form and the payment for
shares to FoM, Essex or the Transfer Agent). All checks must be drawn on a
bank located within the United States and must be payable in U.S. dollars.
Subsequent investments in an existing account in the Portfolio may be made at
any time by sending a check or money order along with either (a) the
detachable form that regularly accompanies the Trust's confirmation of a prior
transaction, (b) a subsequent order form which may be obtained from the Trust,
or (c) a letter stating the amount of the investment, the name of the
Portfolio and the account number in which the investment is to be made. If any
check used for investment in an account does not clear, the order will be
cancelled and notice thereof will be

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<PAGE>

given; in such event the account will be responsible for any loss to the Trust
as well as a $15 fee imposed by the Transfer Agent.

With the exception of customers of FoM, Class A shares may also be
paid for by wiring federal funds to the Transfer Agent, NBD Bank, ABA
072000326, for the account of The Woodward Funds, Account Number GL 325612,
and identifying the customer name and account number. Before wiring payment,
customers should notify the Transfer Agent by calling (800) 688-3350.

Purchase orders which are accompanied by payment (by check or wire
transfer) and received by the Transfer Agent in proper form on a Business Day
(as defined below) prior to the close of the New York Stock Exchange are
priced at the net asset value determined on that Business Day. Purchase orders
which are received by the Transfer Agent after the close of trading on the
Exchange on a Business Day or on non-Business Days will be executed as of the
determination of net asset value on the next Business Day.

Net Asset Value and Pricing of Shares

The net asset value of each Portfolio for purposes of pricing purchase
and redemption orders is determined as of the close of trading on the floor
of the New York Stock Exchange ("Exchange") (currently 4:00 p.m., New York
Time), on each day the Exchange is open for business ("Business Day") except:
(i) those holidays which the Exchange observes (currently New Year's Day,
Presidents' Day, Good Friday, Memorial Day (observed), Independence Day, Labor
Day, Thanksgiving Day and Christmas Day); and (ii) those Business Days on
which the Exchange closes prior to the close of its regular trading
hours ("Early Closing Time"), in which event the net asset value
of each Portfolio will be determined and its shares will be priced
as of such Early Closing Time. Net asset value per Class I share
of a Portfolio is calculated by dividing the value of all
securities and other assets belonging to the Portfolio allocable
to that Class I, less the liabilities charged to that Class I, by the
number of the outstanding shares of such Class I.

Securities held by the Portfolio which are traded on a recognized U.S.
stock exchange are valued at the last sale price on the securities exchange on
which such securities are primarily traded or at the last sale price on the
national securities market. Securities traded on only over-the-counter markets
and securities for which there were no transactions are valued at the average
of the current bid and asked prices. Fixed income securities held by the
Portfolio are valued according to the broadest and most representative market,
which ordinarily will be the over-the-counter markets. Such securities are
valued at the average of the current bid and asked prices. Securities for
which accurate market quotations are not readily available, and other assets
are valued at fair value by the Adviser under the supervision of the Board of
Trustees. Securities may be valued on the basis of prices provided by
independent pricing services when the Adviser believes such prices reflect the
fair market value of such securities. The prices provided by pricing services
take into account

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<PAGE>

institutional size trading in similar groups of securities and any developments
related to specific securities. The Portfolio's open futures contracts will be
"marked-to-market."

REDEMPTION OF SHARES
In General

Redemption orders are effected at the net asset value next determined
after receipt by the Transfer Agent of a proper notice of redemption in
accordance with the procedures set forth below.

Redemption Procedures

Redemption orders for Class A shares may be placed through an
institution or directly by telephone by calling (800)688-3350. During periods
of unusual economic or market changes, telephone redemptions may be difficult
to implement. In such event, shareholders should mail their redemption
requests to their financial institutions or The Woodward Funds, c/o NBD Bank
at the address shown above. Neither the Trust nor its Transfer Agent will be
responsible for the authenticity of instructions received by telephone that
are reasonably believed to be genuine. In attempting to confirm that telephone
instructions are genuine, the Trust and its Transfer Agent will use such
procedures as are considered reasonable, including recording those
instructions and requesting information as to account registration (including,
but not limited to, the name in which an account is registered, the account
number, or recent transactions in the account). To the extent that the Trust
and its Transfer Agent fail to use reasonable procedures to verify the
genuineness of telephone instructions, they may be liable for such
instructions that prove to be fraudulent and unauthorized. In all other cases,
shareholders will bear the risk of loss for fraudulent telephone transactions.

Other Redemption Information

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<PAGE>

provided by the rules of the SEC. If shares to be redeemed were purchased by
check, the Trust will transmit the redemption proceeds promptly upon clearance
of such check, which could take up to fifteen days from the purchase date. A
shareholder having purchased shares by wire must have filed an account
application before any redemption requests can be honored.

Currently, the Trust imposes no charge when shares are redeemed.
However, institutions may charge a fee for providing services in connection
with investments in Portfolio shares; NBD currently charges $16 for wire
transactions. The Trust reserves the right to redeem accounts involuntarily,
after sixty days' notice, if redemptions cause the account's net asset value
to remain at $1,000 or less. Under certain circumstances, the Trust may make
payment for redemption in securities or other property.

Questions concerning the proper form for redemption requests should be
directed to the Transfer Agent at (800)688-3350 or an Investor's institution.

SHAREHOLDER SERVICES

The shareholder services and privileges under this heading may not be
available to certain clients of particular financial institutions, and some
may impose conditions on their clients that are different from those described
below. Investors should consult their own financial institutions in this
regard. Other investors should direct any questions to the Transfer Agent. In
addition, the Trust may modify or terminate any of the following services and
privileges at any time.

Exchange Privilege

Investors may exchange Class A shares which have been owned for at
least thirty days of the Equity Index Portfolio, of the Woodward Money Market,
Government, Treasury Money Market, Tax-Exempt Money Market and Michigan Money
Market Funds and of other investment portfolios of the Trust which may be
offered in the future and sold without a sales charge (each a "no load
portfolio") and Class A shares which have been owned for at least thirty days
of the Woodward Growth/Value, Opportunity, Intrinsic Value, Capital Growth,
Balanced, International Equity, Intermediate Bond, Bond, Short Bond, Municipal
Bond and Michigan Municipal Bond Funds, and of other investment portfolios of
the Trust which may be offered in the future and sold with a sales charge
(each a "load portfolio"). The cost of the acquired Class A shares will be
their net asset value plus the applicable sales load, if any. Class A shares
of a no load portfolio may be exchanged for Class A shares of another no load
portfolio without payment of any sales load. Any exchange of Class A shares of
a no load portfolio for Class A shares of a load portfolio will be subject to
the payment of the applicable sales load, unless the investor is exchanging
shares of a no load portfolio which were received in a previous exchange
transaction involving Class A shares of a load portfolio. In such case, the
investor will receive the appropriate credit for the sales load previously
paid. Shareholders contemplating an exchange should carefully review the
prospectus of the portfolio into which the exchange is being considered. The
Prospectus for any portfolio of the Trust may be obtained from an Investor's
financial institution or from the Transfer Agent by calling (800) 688-3350.

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<PAGE>

thirty-day period is permitted and only Class A Shares that may be legally
sold in the state of the investor's residence may be acquired in an exchange.
The Trust reserves the right to reject any exchange request.

Investors wishing to make an exchange should contact their financial
institutions or the Transfer Agent (as appropriate). Exchange requests in the
required form which are received by the Transfer Agent prior to 4:00 p.m.,
Eastern time or Early Closing Time, will be effected on the same Business
Day after such request is received. Requests received after 4:00 p.m.,
Eastern time or Early Closing Time, will be effected on the next
Business Day after such request is received. During periods of significant
economic or market change, telephone exchanges may be difficult to
complete. In such event, an investor should mail the exchange request to his
financial institution or the Transfer Agent. Neither the Trust nor the
Transfer Agent will be responsible for the authenticity of instructions
received by telephone that are reasonably believed to be genuine. In
attempting to confirm that telephone instructions are genuine, the Trust and
its Transfer Agent will use such procedures as are considered reasonable,
including recording those instructions and requesting information as to
account registration (including, but not limited to, the name in which an
account is registered, the account number, or recent transactions in the
account). To the extent that the Trust and its Transfer Agent fail to use
reasonable procedures to verify the genuineness of telephone instructions,
they may be liable for such instructions that prove to be fraudulent and
unauthorized. In all other cases, shareholders will bear the risk of loss for
fraudulent telephone transactions. The Trust reserves the right to modify or
terminate its exchange procedures upon sixty days' notice to shareholders.

Option to Make Systematic Withdrawals

The Trust has available to shareholders a Systematic Withdrawal Plan
pursuant to which a shareholder who owns Class A shares of the Portfolio
having a minimum value of $15,000 at the time he elects under the Plan may
have a fixed sum distributed in redemption at regular intervals. An
application form and additional information regarding this service may be
obtained from an investor's financial institution or the Transfer Agent by
calling (800)688-3350.

Automatic Investment

The Trust offers an Automatic Investment Plan (the "Plan") whereby a
shareholder may automatically purchase Class A shares on a regular basis in
accordance with an election in his account application. An application may be
obtained from the Transfer Agent by calling (800)688-3350. Under the Plan a
shareholder's financial institution debits a pre-authorized amount from his
account and applies the amount to the purchase of Class A shares. The minimum
per transaction is $25. The minimum initial investment in the Portfolio is
also $25 for the following shareholders who elect the Plan: (l) current and
retired directors, officers and employees of NBD or any of its affiliates; (2)
the trustees, former trustees and officers of the Trust; (3) broker/dealers
which have entered into an agreement with a Co-Distributor or the Trust
pursuant to the Trust's Distribution Plan or Shareholder Servicing Plan and
their representatives purchasing for their own accounts; and (4) spouses,
children, grandchildren, siblings, parents, grandparents and in-laws of
individuals referred to in (l), (2) and (3) above. An NAV Account Application
may be obtained from the Transfer Agent by calling (800)688-3350. The Plan can
be implemented with any financial institution that is a member of the
Automated Clearing House. No service fee is currently charged by the Trust for
participating in the Plan. Death or legal incapacity will terminate a
shareholder's participation in the Plan. Deposits, withdrawals and adjustments
will be made electronically under the rules of the Automated Clearing House
Association.

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Cross Reinvestment of Dividend Plan

The Trust makes available to shareholders a Cross Reinvestment of
Dividend Plan (the "Plan") pursuant to which a shareholder who owns Class A
shares of any portfolio with a minimum value of $10,000 at the time he elects
under the Plan may have dividends paid by such portfolio automatically
reinvested into Class A shares of another portfolio in which he has invested a
minimum of $1,000. Shareholders may obtain an application and additional
information from their financial institutions or the Transfer Agent by calling
(800)688-3350.

The Woodward Funds Individual Retirement Custodial Account

Class A Shares may be purchased in conjunction with the Trust's
Individual Retirement Custodial Account program ("IRA") where NBD acts as
custodian. Investors should consult their institutions or a Co-Distributor for
information as to applications and annual fees. The minimum investment for an
IRA is $250 for investors who are not employees of NBD and $25 for investors
who are employees of NBD. Investors should also consult their tax advisers to
determine whether the benefits of an IRA are available or appropriate.

Other Retirement Plans

Direct Deposit Program

If an investor receives federal salary, social security, or certain
veteran's, military or other payments from the federal government or elects to
use his employer's payroll deposit program, he is eligible for the Direct
Deposit Program. With this Program, an investor may purchase Class A shares
(minimum of $25) by having these deposits automatically deposited into his
Portfolio account. For instructions on how to enroll in the Direct Deposit
Program, an investor should call his institution or the Transfer Agent. Death
or legal incapacity will terminate an investor's participation in the Program.
An investor may elect at any time to terminate his participation by notifying
in writing the appropriate federal agency. Further, the Trust may terminate an
investor's participation upon thirty days' notice to him.

PERFORMANCE INFORMATION

From time to time, in advertisements or in reports to shareholders the
performance of each class of shares of the Portfolio may be compared to the
performance of other mutual funds with similar investment objectives and to
stock or other relevant indices or to rankings prepared by independent
services or other financial or industry publications that monitor the
performance of mutual funds. For example, performance may be compared to data
prepared by Lipper Analytical Services, Inc. In addition, the performance of
the Portfolio may be compared to the Standard & Poor's 500 Index, an index of
unmanaged groups of common stocks, the Consumer Price Index, or the Dow Jones
Industrial Average, a recognized unmanaged index of common stocks of thirty
industrial companies listed on the New York Stock Exchange. Performance data
as reported in national financial publications such as Money Magazine, Forbes,
Barron's, The Wall Street Journal and The New York Times, or in publications
of a local or regional nature, may also be used in comparing the performance
of the Portfolio.

The Portfolio calculates its total returns on an "average annual total
return" basis for various periods from the date it commenced investment

-21-

<PAGE>

operations and for other periods as permitted under the rules of the SEC.
Average annual total return of a class reflects the average annual
percentage change in value of an investment in the class over the
measuring period. Total returns may also be calculated on an "aggregate
total return basis" for various periods. Aggregate total return reflects
the total percentage change in value over the measuring period. Both
methods of calculating total return also reflect changes in the price of
the shares and assume that any dividends and capital gain distributions
made by the class during the period are reinvested in shares of the class.
When considering average total return figures for periods longer than one
year, it is important to note that the class' annual total return for
any one year in the period might have been greater or less than the
average for the entire period.

Performance of each class of shares is based on historical earnings
and will fluctuate and is not intended to indicate future performance. The
investment return and principal value of an investment in a class will
fluctuate so that a shareholder's shares, when redeemed, may be worth more or
less than their original cost. Performance data may not provide a basis for
comparison with bank deposits and other investments which provide a fixed
yield for a stated period of time. Performance data should also be considered
in light of the risks associated with the Portfolio's portfolio composition,
quality, maturity, operating expenses and market conditions. Any fees charged
by financial institutions directly to their customer accounts in connection
with investments in shares will not be reflected in performance calculations.

DIVIDENDS AND DISTRIBUTIONS

Dividends from net investment income are declared and paid quarterly
by the Portfolio. The Portfolio's net realized capital gains are distributed
at least annually.

Dividends and distributions will reduce the class' net asset value by
the amount of the dividend or distribution. All dividends and distributions
are automatically reinvested in additional Class A shares of the same
Portfolio at their net asset value per share determined on the payment date,
unless the holder has notified the Transfer Agent in writing that he elects to
have dividends or capital gain distributions (or both) paid in cash.
Shareholders must make such election, or any revocation thereof, in writing to
their financial institutions or Transfer Agent. If an account is
established with telephone privileges, the registered owner or his
preauthorized legal representative may change the election to receive
dividends in cash to an election to receive dividends in shares by
telephoning the Transfer Agent at (800) 688-3350. The election will become
effective with respect to dividends paid after its receipt by the Transfer
Agent.

TAXES

Federal

The Portfolio intends to qualify as a "regulated investment company"
under the Internal Revenue Code of 1986, as amended (the "Code"). Such
qualification will relieve the Portfolio of liability for federal income taxes
to the extent their earnings are distributed in accordance with the Code.

Qualification as a regulated investment company under the Code for a
taxable year requires, among other things, that the Portfolio distribute to
its shareholders an amount equal to at least the sum of 90% of its investment
company taxable income and 90% of its net tax-exempt interest income for such
year. In general, the Portfolio's investment company taxable income will be
its taxable income, subject to certain adjustments and excluding the excess of
any net long-term capital gain for the taxable year over the net short-term
capital loss, if

-22-

<PAGE>

any, for such year. The Portfolio intends to distribute as dividends
substantially all of its investment company taxable income and any net
tax-exempt interest income each year. Such dividends will be taxable as
ordinary income to the Portfolio's shareholders who are not currently exempt
from federal income taxes regardless of whether a distribution is received in
cash or reinvested in additional shares. (Federal income taxes for
distributions to an IRA are deferred under the Code.) Such ordinary income
distributions will qualify for the dividends received deduction for
corporations to the extent of the total qualifying dividends received by the
Portfolio from domestic corporations for the taxable year.

Substantially all of the Portfolio's net realized long-term capital
gains, if any, will be distributed at least annually to its shareholders. The
Portfolio will generally have no tax liability with respect to such gains and
the distributions will be taxable to Portfolio shareholders who are not
currently exempt from federal income taxes as long-term capital gains,
regardless of how long the shareholders have held the shares and whether such
gains are received in cash or reinvested in additional shares.

Prior to purchasing shares of the Portfolio, the impact of dividends
or distributions which are expected to be declared or have been declared, but
not paid, should be carefully considered. Any dividend or distribution
declared shortly after the purchase of shares prior to the record date will
have the effect of reducing the per share net asset value by the per share
amount of the dividend or distribution. All or a portion of such amounts,
although in effect a return of capital, is subject to tax.

A taxable gain or loss may be realized by a shareholder upon his
redemption, transfer or exchange of shares of the Portfolio depending upon the
tax basis and their price at the time of redemption, transfer or exchange. If
a shareholder has held shares for six months or less and during that time
received a distribution taxable as a long-term capital gain, then any loss the
shareholder might realize on the sale of those shares will be treated as a
long-term loss to the extent of the earlier capital gain distribution.
Generally, a shareholder may include sales charges incurred upon the purchase
of Portfolio shares in his tax basis for such shares for the purpose of
determining gain or loss on a redemption, transfer or exchange of such shares.
However, if the shareholder effects an exchange of such shares for shares of
another investment portfolio within 90 days of the purchase and is able to
reduce the sales charges applicable to the new shares (by virtue of the
Trust's exchange privilege), the amount equal to such reduction may not be
included in the tax basis of the shareholder's exchanged shares but may be
included under certain circumstances in the tax basis of the new shares.

Shareholders will be advised at least annually as to the federal
income tax consequences of distributions made to them each year.

The foregoing discussion summarizes some of the important tax
considerations generally affecting the Portfolio and its shareholders and is
not intended as a substitute for careful tax planning. Accordingly, potential
investors in the Portfolio should consult their tax advisers with specific
reference to their own tax situation.

-23-

<PAGE>

State and Local

The Trust may be subject to state or local taxes in jurisdictions in
which the Trust may be deemed to be doing business. In addition, in those
states or localities which have income tax laws, the treatment of the Trust
and its shareholders under such laws may differ from treatment under federal
income tax laws. Shareholders are advised to consult their tax advisers
concerning the application of state and local taxes, which may have different
consequences from those of the federal income tax law described above.

MANAGEMENT

Trustees and Officers of the Trust

The Board of Trustees of the Trust is responsible for the management
of the business and affairs of the Trust. The Trustees and executive officers
of the Trust and their principal occupations for the last five years are set
forth below. Each Trustee has an address at The Woodward Funds, c/o NBD Bank,
611 Woodward Avenue, Detroit, Michigan 48226.

*Earl I. Heenan, Jr., Chairman and President

Director (since 1995), Vice Chairman (1988-1995) and President
(1955-1988), Detroit Mortgage & Realty Company; President (1989-1992)
and Trustee (since 1966), Cottage Hospital of Grosse Pointe (affiliate
of Henry Ford Health System); Trustee, Henry Ford Health Sciences Center
(since 1987); Trustee, Henry Ford Continuing Care Corporation (since 1980);
Trustee, Earhart Foundation (since 1980). He is 77 years old and his
address is 333 West Fort Street, Detroit, Michigan 48226.

*Eugene C. Yehle, Trustee and Treasurer

Will M. Caldwell, Trustee

- -----------------------------
* Trustees who are "interested persons" of the Trust, as defined in the 1940
Act.

-24-

<PAGE>

Nicholas J. De Grazia, Trustee

John P. Gould, Trustee

Steven G. Rothmeier Professor (since January, 1996); Distinguished
Service Professor of Economics of the University of Chicago Graduate School
of Business (since 1984); Dean of the University of Chicago Graduate School
of Business (1983-1993); Member of Economics Club of Chicago and Commercial
Club of Chicago; Director of Harbor Capital Advisors and Dimensional Fund
Advisors; Trustee, Prairie Family of Funds. He is 57 years old and his address
is University of Chicago Graduate School of Business, 1101 East 58th Street,
Chicago, Illinois 60637.

Marilyn McCoy, Trustee

Julius L. Pallone, Trustee

*Donald G. Sutherland, Trustee

Partner of the law firm Ice, Miller, Donadio & Ryan, Indianapolis,
Indiana. He is 67 years old, and his address is One American Square, 34th
Floor, Indianapolis, Indiana 46204.

Donald L. Tuttle, Trustee

Vice President (since January 1995), Senior Vice President
(1992-1995), Association for Investment Management and Research;
Professor of Finance, Indiana University (1970-1991); Vice President,
Trust & Investment Advisers, Inc. (1990-1991); Director, Federal Home
Loan Bank of Indianapolis (1981 to 1985). He is 61 years old, and his
address is 5 Boar's Head Lane, Charlottesville, Virginia 22903.

- -----------------------------
* Trustees who are "interested persons" of the Trust, as defined in the 1940
Act.

-25-

<PAGE>

W. Bruce McConnel, III, Secretary

Partner of the law firm Drinker Biddle & Reath, Philadelphia,
Pennsylvania. He is 53 years old, and his address is 1345 Chestnut Street,
Philadelphia, Pennsylvania 19107.

The Trustees receive fees and are reimbursed for their expenses in
connection with each meeting of the Board of Trustees they attend. Additional

information on the compensation paid by the Trust to its Trustees and officers
is included in the Statement of Additional Information.

Investment Adviser, Custodian and Transfer Agent

The investment adviser for the Portfolio is NBD, a wholly owned
subsidiary of First Chicago NBD Corporation, a bank holding company. NBD has
offices at 611 Woodward Avenue, Detroit, Michigan 48226. As of December 31,
1995, NBD was providing investment management and advisory services for
accounts aggregating approximately $37.9 billion. NBD has been in the business
of providing such services since 1933. Included among NBD's accounts are
pension and profit sharing funds for major corporations and state and local
governments, commingled trust funds and a variety of institutional and
personal advisory accounts, estates and trusts. NBD also acts as investment
adviser for other registered investment company portfolios.

NBD provides investment advisory and certain administrative services
to the Portfolio pursuant to an Advisory Agreement. Subject to the overall
supervision of the Board of Trustees, NBD makes investment decisions for the
Portfolio.

F. Richard Neumann, Vice President and Henry Kaczmarek, Assistant Vice
President, are primarily responsible for the day-to-day management of the
Equity Index Portfolio. Mr. Neumann joined NBD in 1985 after receiving an MBA
in Finance from Indiana University. Mr. Kaczmarek joined NBD in 1993 after
receiving his MBA in Finance from Indiana University.

For its services under the Advisory Agreement, NBD is entitled to
receive advisory fees, computed daily and payable monthly, at an annual rate
of .10% of the average daily net assets of the Equity Index Portfolio. In
addition, NBD is entitled to 4/10ths of the gross income earned by the
Portfolio on each loan of securities (excluding capital gains and losses, if
any). NBD may voluntarily waive its fees in whole or in part with respect to
the Portfolio.

NBD also receives compensation as the Trust's Custodian and Transfer
Agent under separate agreements. The fees payable by the Portfolio for these
services are described in the Statement of Additional Information.

Banking laws and regulations currently prohibit a bank holding company
registered under the Bank Holding Company Act of 1956 or any affiliate thereof
from sponsoring, organizing, controlling, or distributing the shares of a
registered open-end investment company continuously engaged in the issuance of
its shares, and prohibit banks generally from underwriting securities, but do
not prohibit such a bank holding company or affiliate from acting as
investment adviser, transfer agent, or custodian to such an investment company
or from purchasing shares of such a company as agent for and upon the order of
a customer. The Adviser and the Trust believe that the Adviser may perform the
advisory, custodial and transfer agency services for the Trust described in
this Prospectus, and that the Adviser, subject to such banking laws and
regulations, may perform the shareholder services contemplated by this
Prospectus, without violation of such banking laws or regulations. However,
future changes in legal requirements relating to the permissible activities of
banks and their affiliates, as well as future interpretations of present
requirements, could

-26-

<PAGE>

prevent the Adviser from continuing to perform investment advisory, custodial
or transfer agency services for the Trust or require the Adviser to alter or
discontinue the services provided by it to shareholders.

If the Adviser were prohibited from performing investment advisory,
custodial or transfer agency services for the Trust, it is expected that the
Board of Trustees of the Trust would recommend that shareholders approve new
agreements with another entity or entities qualified to perform such services
and selected by the Board. If the Adviser or its affiliates were required to
discontinue all or part of its shareholder servicing activities, their
customers would be permitted to remain the beneficial owners of Portfolio
shares and alternative means for continuing the servicing of such customers
would be sought. The Trust does not anticipate that investors would suffer any
adverse financial consequences as a result of these occurrences.

Sponsors and Co-Distributors

Service and Distribution Plan

The Trust has adopted its Distribution Plan pursuant to Rule 12b-1
under the 1940 Act (the "Plan"). Under the Plan, the Trust incurs expenses
primarily intended to result in the sale of the Trust's shares in an amount
not to exceed .35 of 1% of the value of each portfolio's average daily net
assets calculated as follows in the case of the Portfolio: (i) fees payable to
the Co-Distributors pursuant to the Distribution Agreement; (ii) the actual
costs and expenses in connection with advertising and marketing the
Portfolio's shares; and (iii) fees pursuant to agreements with securities
dealers, financial institutions and other professionals ("Service Agents") for
administration or servicing of Portfolio shareholders ("Servicing"). Servicing
may include, among other things: answering client inquiries regarding the
Trust and the Portfolio; assisting clients in changing dividend options,
account designations and addresses; performing sub-accounting; establishing
and maintaining shareholder accounts and records; processing purchase and
redemption transactions; investing client cash account balances automatically
in Portfolio shares; providing periodic statements showing a client's account
balance and integrating such statements with those of other transactions and
balances in the client's other accounts serviced by the Service Agent;
arranging for bank wires; and such other services as the Trust may request, to
the extent the Service Agent is permitted by applicable statute, rule or
regulation. Under the Plan, the Trust also bears the cost of preparing and

-27-

<PAGE>

printing Prospectuses for use in selling shares of the Trust and costs
associated with implementing and operating the Plan. These costs are included
in computing the .35 of 1% limitation set forth above.

Pursuant to the Distribution Agreement, FoM is entitled to receive a
fee at the annual rate of .005% of the Portfolio's average net assets, and
Essex is entitled to receive a fee at the annual rate of .10% of the aggregate
average net assets of the Trust's investment portfolios attributable to
investments by clients of Essex. The payments to be made to the
Co-Distributors which are based on a percentage of the net assets of the
Portfolio are designed to compensate the Co-Distributors for their
participation in the distribution of the Portfolio's shares and to reimburse
the Co-Distributors for certain distribution costs. Nonreimbursable expenses
of the Co-Distributors include salaries of executives, sales and clerical
personnel performing services for the Trust, and overhead expenses. Such costs
are by their nature not subject to precise quantification and the Trustees
have determined that the fees to be paid to the Co-Distributors are reasonable
under the circumstances.

Shareholder Servicing Plan

Pursuant to a Shareholder Servicing Plan ("Servicing Plan") adopted by
its Board of Trustees, the Trust may enter into agreements ("Servicing
Agreements") with banks and financial institutions, which may include the
Adviser and its affiliates ("Shareholder Servicing Agents"), under which they
will render shareholder administrative support services for their customers
who beneficially own Class A shares of the Portfolio. Such services, which are
described more fully in the Statement of Additional Information, may include
processing purchase and redemption requests from customers, placing net
purchase and redemption orders with a Co-Distributor, processing, among other
things, distribution payments from the Trust, providing necessary personnel
and facilities to establish and maintain customer accounts and records, and
providing information periodically to customers showing their positions in
Class A shares.

-28-

<PAGE>

commissions, are urged to consult legal counsel before entering into Servicing
Agreements.

Trust Expenses

The Trust is responsible for the payment of its expenses. These
include, for example, fees payable to NBD as Adviser, or expenses otherwise
incurred by the Trust in connection with the management of the investment of
the Trust's assets such as brokerage fees, commissions and other transaction
charges, the fees and expenses of NBD as the Trust's Custodian and as its
Transfer Agent, the fees payable to the Co-Distributors under the Distribution
Agreement, the fees and expenses of Trustees, expenses associated with the
Trust's Distribution Plan and Shareholder Servicing Plan, outside auditing and
legal expenses, all taxes and corporate fees payable by the Trust, SEC fees,
state securities qualification fees, costs of preparing and printing
prospectuses for regulatory purposes and for distribution to shareholders,
costs of shareholder reports and shareholder meetings, and any extraordinary
expenses. The Portfolio also pays for brokerage commissions and transfer taxes
(if any) in connection with the purchase and sale of portfolio securities.
Expenses attributable to a particular investment portfolio of the Trust will
be charged to that Portfolio, and expenses not readily identifiable as
belonging to a particular investment portfolio will be allocated by the Board
of Trustees among one or more investment portfolios in such a manner as it
shall deem fair and equitable. For the fiscal year ended December 31, 1995,
the Equity Index Portfolio's total expenses were .15% of its average net
assets, respectively. The Statement of Additional Information describes in
more detail the fees and expenses borne by the Trust.

OTHER INFORMATION

The Trust was organized as a Massachusetts business trust on April 21,
1987 under a Declaration of Trust which was amended and restated as of May 1,
1992. The Trust is a series fund having seventeen series of shares of
beneficial interest, each of which evidences an interest in a separate
investment portfolio. The Declaration of Trust permits the Board of Trustees
to issue an unlimited number of full and fractional shares and to create an
unlimited number of series of shares ("Series") representing interests in a
portfolio and an unlimited number of classes of shares within a Series. In
addition to the Portfolio described herein, the Trust offers the following
investment portfolios: the Woodward Growth/Value Fund, Intrinsic Value Fund,
Capital Growth Fund, Balanced Fund, International Equity Fund, Intermediate
Bond Fund, Bond Fund, Short Bond Fund, Municipal Bond Fund, Michigan Municipal
Bond Fund, Money Market Fund, Government Fund, Treasury Money Market Fund,
Tax-Exempt Money Market Fund and Michigan Tax-Exempt Money Market Fund. The
Trust has established the following two distinct classes of shares within each
Portfolio described herein: Class I shares (Original Class) and Class A shares
(Special Class 1). A salesperson and any other person or institution entitled
to receive compensation for selling or servicing shares may receive different
compensation with respect to different classes of shares in the Series. Each
share has $.10 par value, represents an equal proportionate interest in the
related portfolio with other shares of the same class outstanding, and is
entitled to such dividends and distributions out of the income earned on the
assets belonging to such portfolio as are declared in the discretion of the
Board of Trustees.

Shareholders are entitled to one vote for each full share held, and a
proportionate fractional vote for each fractional share held, and each Series
entitled to vote on a matter will vote thereon in the aggregate number of and
not by Series, except as otherwise expressly required by law or when the Board
of Trustees determines that the matter to be voted on affects only the
interests of shareholders of a particular Series. In addition, shareholders of
each of the Series have equal voting rights except that only shares of a
particular class within a Series are entitled to vote on matters affecting
only that class. Voting rights are not cumulative, and accordingly, the
holders of more than 50%

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<PAGE>

of the aggregate number of shares of all Trust portfolios may elect all of the
Trustees.

As of March 29, 1996, NBD held beneficially or of record
approximately 91.41% of the outstanding shares of the Equity Index Portfolio
and therefore may be considered to be a controlling person of the Trust for
purposes of the 1940 Act.

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<PAGE>

[ BACK COVER, COLUMN 1 ]

No person has been authorized to give
any information or to make any
representations not contained in this
Prospectus, or in the Portfolio's
Statement of Additional Information
incorporated herein by reference, in
connection with the offering made by
this Prospectus and, if given or
made, such information or
representations must not be relied
upon as having been authorized by the
Trust, Adviser or Sponsors and Co-
Distributors. This Prospectus does
not constitute an offering by the
Portfolio or by their Co-
Distributors, in any jurisdiction in
which such offering may not lawfully
be made.

TABLE OF CONTENTS Page

EXPENSE SUMMARY............................. 2
BACKGROUND.................................. 4
FINANCIAL HIGHLIGHTS........................ 5
INTRODUCTION................................ 6
PROPOSED REORGANIZATION..................... 6
INVESTMENT OBJECTIVE, POLICIES AND
RISK FACTORS............................ 6
OTHER INVESTMENT POLICIES................... 9
PURCHASE OF SHARES.......................... 16
REDEMPTION OF SHARES........................ 18
SHAREHOLDER SERVICES........................ 19
PERFORMANCE INFORMATION..................... 21
DIVIDENDS AND DISTRIBUTIONS................. 22
TAXES .................................... 22
MANAGEMENT.................................. 24
OTHER INFORMATION........................... 29

<PAGE>

[ BACK COVER, COLUMN 2 ]

CLASS A SHARES OF THE:
WOODWARD EQUITY INDEX FUND

THE WOODWARD FUNDS(R)

Prospectus
April 15, 1996

-31-
<PAGE>

24 Hour yield and performance information
Purchase and Redemption orders:
(800) 688-3350
- ------------------------------------------------------------------------------
The Woodward Funds (the "Trust") is offering in this Prospectus shares
in the following seven investment portfolios (the "Portfolios"), each having
its own investment objective and policies as described in this Prospectus:

Class I shares of the:

Woodward Growth/Value Fund
Woodward Opportunity Fund
Woodward Intrinsic Value Fund
Woodward Capital Growth Fund
Woodward Balanced Fund
Woodward Equity Index Fund
Woodward International Equity Fund

This Prospectus sets forth concisely information that a prospective
investor should consider before investing. Investors should read this
Prospectus and retain it for future reference. Additional information about
the Trust, contained in a Statement of Additional Information, has been filed
with the Securities and Exchange Commission (the "SEC") and is available upon
request without charge by writing to The Woodward Funds at the address above.
The Statement of Additional Information bears the same date as this Prospectus
and is incorporated by reference in its entirety into the Prospectus.

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

INVESTMENT ADVISER:

NBD Bank

<PAGE>

EXPENSE SUMMARY

The Trust currently offers Class I shares (formerly known as
"Institutional Shares") and Class A shares (formerly known as "Retail Shares")
in each of the Woodward Growth/Value Fund ("Growth/Value Portfolio"), Woodward
Opportunity Fund ("Opportunity Portfolio"), Woodward Intrinsic Value Fund
("Intrinsic Value Portfolio"), Woodward Capital Growth Fund ("Capital Growth
Portfolio"), Woodward Balanced Fund ("Balanced Portfolio"), Woodward Equity
Index Fund ("Equity Index Portfolio") and Woodward International Equity Fund
("International Equity Portfolio"). Class I shares are sold primarily to NBD
and its affiliated and correspondent banks acting on behalf of their
respective customers. Class A shares are sold to the general public primarily
through financial institutions such as banks, brokers and dealers. Class A
shares are offered in a separate Prospectus. Investors should call (800)
688-3350, a Co-Distributor or their financial institutions if they would like
to obtain more information concerning Class I shares and/or Class A shares of
the Portfolios. The following table is provided to assist investors in
understanding the various costs and expenses that an investor will indirectly
incur as a beneficial owner of Class I shares in each of the Portfolios.
<TABLE>
<CAPTION>
Inter-
Growth/ Oppor- Intrinsic Capital Equity national
Value tunity Value Growth Balanced Index Equity
Portfolio(1) Portfolio(1) Portfolio(1) Portfolio(1) Portfolio(1) Portfolio(1) Portfolio(1)
------------ ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Shareholder Transaction
Expenses
Maximum Sales Load
Imposed on Purchases
(as a percentage of
offering price....... None None None None None None None

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

Annual Operating Expenses
(as a percentage of
average net assets)
Management Fees......... .75% .75% .75% .75% .75% .10% .75%
12b-1 Fees.............. .011% .015% .011% .005% .013% .03% .004%
Other Expenses(2)
(before no fee waivers
and/or expense
reimbursements)...... .039% .035% .089% .145% .327% .03% 0.596%
(after fee waivers
and/or expense
reimbursements)...... N/A N/A N/A .125% .187% N/A .406%
Total Operating Expenses
(before fee waivers
and/or expense
reimbursements)...... .80% .80% .85% .90% 1.09% .16% 1.35%
(after fee waivers
and/or expense
reimbursements....... N/A N/A N/A .88% .95% N/A 1.16%
<FN>
- ---------------------

1. The expenses for each Portfolio have been restated to reflect
current expenses.

-2-

<PAGE>

2. Credits or charges not reflected in the expense table may be
incurred directly by customers of financial institutions in connection with an
investment in the Portfolios.
- -------------------
</TABLE>

<TABLE>
<CAPTION>
Inter-
Growth/ Oppor- Intrinsic Capital Equity national
Value tunity Value Growth Balanced Index Equity
Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
--------- --------- ------------------- --------- --------- ---------
Example
You would pay the following
expenses on a $1,000
investment, assuming:
(1) a 5% annual return
and (2) redemption at the
end of each time period:
<S> <C> <C> <C> <C> <C> <C> <C>
One Year:..... $ 8.20 $ 8.20 $ 8.71 $ 9.02 $ 9.73 $ 1.64 $ 11.89
Three Years:.. 25.64 25.64 27.23 28.18 30.40 5.16 37.04
Five Years:... 44.57 44.57 47.31 48.95 52.76 9.03 64.15
Ten Years:.... 99.27 99.27 105.22 108.78 117.05 20.47 141.50
</TABLE>

THE FOREGOING SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES OR RATES OF RETURN. ACTUAL EXPENSES OR RATE OF RETURN MAY BE
GREATER OR LESSER THAN THOSE SHOWN.

The example demonstrates the projected dollar amount of total
cumulative expenses that would be incurred over various periods with respect
to a hypothetical investment in Class I shares in each of the Portfolios,
based upon payment by the Portfolios of operating expenses at the respective
levels set forth in the expense table. For more complete descriptions of
Portfolio expenses, see "Investment Adviser, Custodian and Transfer Agent,"
"Sponsors and Co-Distributors," "Service and Distribution Plan" and "Trust
Expenses" under the heading "Management" in this Prospectus and the financial
statements and related notes contained in the Statement of Additional
Information.

-3-

<PAGE>

BACKGROUND

Shares of each Portfolio have been classified into two separate
classes of shares -- Class I shares and Class A shares. Only the Class I
shares are offered pursuant to this Prospectus. Until April 15, 1996, Class I
shares and Class A shares represented equal pro rata interests in a Portfolio.
As of such date, the Trust implemented its Shareholder Servicing Plan with
respect to Class A shares only and began to allocate Servicing Fees
attributable to such shares exclusively to them.

-4-

<PAGE>

FINANCIAL HIGHLIGHTS

The tables below provide supplementary information to the Portfolios'
financial statements contained in their Statement of Additional Information
and set forth certain information concerning the historic investment results
of Portfolio shares. They present a per share analysis of how each Portfolio's
net asset value has changed during the periods presented. The tables have been
derived from the Portfolios' financial statements which have been audited by
Arthur Andersen LLP, the Trust's independent public accountants, whose report
thereon is contained in the Statement of Additional Information along with the
financial statements. The financial data included in these tables should be
read in conjunction with the financial statements and related notes included
in the Statement of Additional Information. Further information about the
performance of the Portfolios is available in annual reports to shareholders.
The Statement of Additional Information and annual reports to shareholders may
be obtained from the Trust free of charge by calling (800) 688-3350.

<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period .................. $ 10.67 $ 11.16 $ 10.51 $ 9.86 $ 10.00
Income from investment
operations:
Net investment income ...... 0.21 0.23 0.20 0.22 0.14
Net realized and unrealized
gains (losses) on
investments .............. 2.76 (0.17) 1.24 0.75 (0.14)
--------------- --------------- --------------- --------------- ---------------
Total from investment
operations ............... $ 2.97 $ 0.06 $ 1.44 $ 0.97 $ 0.00
--------------- --------------- --------------- --------------- ---------------
Less distributions:
From net investment
income ................... $ (0.22) $ (0.21) $ (0.20) $ (0.22) $ (0.14)
From realized
gains .................... (0.26) (0.30) (0.59) (0.10) 0.00
In excess
of realized gains ......... 0.00 (0.01) 0.00 0.00 0.00
Tax return of capital ....... 0.00 (0.03) 0.00 0.00 0.00
--------------- --------------- --------------- --------------- ---------------
Total distributions ........ $ (0.48) $ (0.55) $ (0.79) $ (0.32) $ (0.14)
--------------- --------------- --------------- --------------- ---------------
Net asset value, end of
period ..................... $ 13.16 $ 10.67 $ 11.16 $ 10.51 $ 9.86
=============== =============== =============== =============== ===============

Total return ................. 28.04% 0.55% 13.79% 9.87% 0.17%(a)
Ratios/Supplemental Data
Net assets, end of period .... $ 737,167,067 $ 571,370,711 $ 429,635,045 $ 287,344,809 $ 238,085,630
Ratio of expenses to average
net assets ................. 0.84% 0.84% 0.83% 0.83% 0.85%(a)
Ratio of net investment income
to average net assets ...... 1.73% 2.07% 1.84% 2.20% 2.56%(a)
Portfolio turnover rate ...... 26.80% 28.04% 42.31% 16.28% 0.94%
Average Commission Rate ...... $ 0.04
<FN>
- ---------------
(a) Annualized for periods less than one year for comparability
purposes. Actual annual values may be less than or greater than those shown.
</TABLE>

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<PAGE>

Opportunity Portfolio
June 1, 1991
(Commencement
Year Ended Year Ended Year Ended Year Ended of Operations) to
December December December December December 31,
31, 1995 31, 1994 31, 1993 31, 1992 1991
---------- ---------- ---------- ---------- -----------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period .................. $ 13.34 $ 14.49 $ 12.37 $ 10.40 $ 10.00
Income from investment
operations:
Net investment income ...... 0.06 0.07 0.10 0.11 0.09
Net realized and unrealized
gains (losses) on
investments .............. 2.57 (0.54) 2.87 2.43 0.43
------------ ------------ ------------ ------------ ------------
Total from investment
operations ............... $ 2.63 $ (0.47) $ 2.97 $ 2.54 $ 0.52
------------ ------------ ------------ ------------ ------------
Less distributions:
From net investment
income ................... $ (0.06) $ (0.07) $ (0.10) $ (0.11) $ (0.09)
From realized
gains .................... (0.76) (0.49) (0.75) (0.46) (0.03)
In excess
of realized gains ......... 0.00 (0.02) 0.00 0.00 0.00
Tax return of capital ...... 0.00 (0.10) 0.00 0.00 0.00
------------ ------------ ------------ ------------ ------------
Total distributions ........ $ (0.82) $ (0.68) $ (0.85) $ (0.57) $ (0.12)
------------ ------------ ------------ ------------ ------------
Net asset value, end of
period ..................... $ 15.15 $ 13.34 $ 14.49 $ 12.37 $ 10.40
============ ============ ============ ============ ============

Total return ................. $ 19.88% (3.27%) 24.01% 24.56% 8.92%(a)
Ratios/Supplemental Data
Net assets, end of period .... $650,952,268 $524,999,120 $365,664,513 $166,423,073 $108,046,450
Ratio of expenses to average
net assets ................. 0.89% 0.90% 0.86% 0.84% O.84%(a)
Ratio of net investment income
to average net assets ...... 0.37% 0.53% 0.71% 1.09% 1.56%(a)
Portfolio turnover rate ...... 53.55% 37.51% 33.99% 34.44% 2.92%
Average Commission Rate ...... $ 0.04
<FN>
- ------------

(a) Annualized for periods less than one year for comparability
purposes. Actual annual values may be less than or greater than those shown.
</TABLE>

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<PAGE>

Intrinsic Value Portfolio

June 1, 1991
(Commencement
Year Ended Year Ended Year Ended Year Ended of Operations) to
December December December December December 31,
31, 1995 31, 1994 31, 1993 31, 1992 1991
---------- ---------- ---------- ---------- -----------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period .................. $ 10.48 $ 11.05 $ 10.40 $ 9.89 $ 10.00
Income from investment
operations:
Net investment income ...... 0.29 0.31 0.29 0.29 0.17
Net realized and unrealized
gains (losses) on
investments .............. 2.24 (0.38) 1.23 1.14 (0.02)
------------ ------------ ------------ ------------ ------------
Total from investment
operations ............... $ 2.53 $ (0.07) $ 1.52 $ 1.43 $ 0.15
------------ ------------ ------------ ------------ ------------
Less distributions:
From net investment
income ................... $ (0.30) $ (0.30) $ (0.28) $ (0.28) $ (0.17)
From realized
gains .................... $ (0.82) $ (0.20) (0.59) (0.64) (0.09)
------------ ------------ ------------ ------------ ------------
Total distributions ........ $ (1.12) $ (0.50) $ (0.87) $ (0.92) $ (0.26)
------------ ------------ ------------ ------------ ------------
Net asset value, end of
period ..................... $ 11.89 $ 10.48 $ 11.05 $ 10.40 $ 9.89
============ ============ ============ ============ ============

Total return ................. 24.38% (0.60%) 14.71% 14.56% 2.70%(a)
Ratios/Supplemental Data
Net assets, end of period .... $255,884,859 $220,028,096 $192,555,183 $107,260,873 $ 77,450,163
Ratio of expenses to average
net assets ................. 0.91% 0.91% 0.86% 0.84% 0.84%(a)
Ratio of net investment income
to average net assets ...... 2.49% 2.92% 2.67% 2.78% 3.03%(a)
Portfolio turnover rate ...... 45.55% 58.62% 63.90% 48.52% 1.80%
Average Commission Rate ...... $ 0.03
<FN>
- ------------

(a) Annualized for periods less than one year for comparability
purposes. Actual annual values may be less than or greater than those shown.
</TABLE>

-7-

<PAGE>

Capital Growth Portfolio

July 2, 1994
(Commencement
Year Ended of Operations) to
December 31, December 31,
1995 1994
------------ ----------------
<S> <C> <C>
Net asset value, beginning of period ....... $ 10.44 $ 10.00

Income from investment operations:
Net investment income .................... 0.08 0.05
Net realized and unrealized gains (losses)
on investments ......................... 2.93 0.43
------------ ------------
Total from investment operations ......... $ 3.01 $ 0.48
------------ ------------

Less distributions:
From net investment income ............... $ (0.08) $ (0.04)
From net realized gains .................. (0.11) 0.00
------------ ------------
Total distributions ...................... $ (0.19) $ (0.04)
------------ ------------

Net asset value, end of period ............. $ 13.26 $ 10.44
============ ============

Total return ............................... 28.90% 9.62%(a)
Ratios/Supplemental Data
Net assets, end of period .................. $195,861,178 $ 81,269,604
Ratio of expenses to average net assets .... 0.86% 0.85%(a)
Ratio of net investment income to average
net assets ................................ 0.65% 1.25%(a)
Ratio of expenses to average net assets
without fee waivers/reimbursed
expenses .................................. 0.90% 0.95%(a)
Ratio of net investment income to average
net assets without fee waivers/reimbursed
expenses ................................. 0.61% 1.15%(a)
Portfolio turnover rate .................... 6.97% 3.29%
Average Commission Rate .................... $ 0.04
<FN>
- ------------

(a) Annualized for periods less than one year for comparability
purposes. Actual annual values may be less than or greater than those shown.

</TABLE>

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<PAGE>

Balanced Portfolio

Year Ended Year Ended
December 31, December 31,
1995 1994
------------ -----------
<S> <C> <C>
Net asset value, beginning
of period .............................. $ 9.53 $ 10.00
Income from investment
operations:
Net investment income .................. 0.35 0.28
Net realized and unrealized
gains (losses) on
investments .......................... 1.83 (0.48)
------------ ------------
Total from investment
operations ........................... $ 2.18 $ (0.20)
------------ ------------
Less distributions:
From net investment
income ............................... $ (0.35) $ (0.27)
From realized
gains ................................ (0.12) 0.00
------------ ------------
Total distributions .................... $ (0.47) $ (0.27)
------------ ------------
Net asset value, end of
period ................................. $ 11.24 $ 9.53
============ ============

Total return ............................. 23.18% (1.95%)
Ratios/Supplemental Data
Net assets, end of period ................ $ 93,623,801 $ 54,167,192
Ratio of expenses to average
net assets ............................. 0.91% 0.85%
Ratio of net investment income
to average net assets .................. 3.40% 3.41%
Ratio of expenses to average net assets
without fee waivers/reimbursed expenses 1.09% 1.56%
Ratio of net investment income to average
net assets without fee waivers/reimbursed
expenses ................................ 3.22% 2.70%
Portfolio turnover rate .................. 31.76% 37.49%
Average Commission Rate .................. $ 0.05
- ------------
</TABLE>

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<PAGE>

Equity Index Fund

July 10, 1992
(Commencement of
Year Ended Year Ended Year Ended Operations) to
December 31, December 31, December 31, December 31,
1995 1994 1993 1992
------------ ------------ ------------ ---------------
<S> <C> <C> <C> <C>
Net asset value, beginning
of period ................... $ 10.65 $ 11.15 $ 10.52 $ 10.00
Income from investment
operations:
Net investment income ....... 0.30 0.31 0.28 0.12
Net realized and unrealized
gains (losses) on
investments ............... 3.65 (0.20) 0.75 0.52
------------ ------------ ------------ ------------
Total from investment
operations ................ $ 3.95 $ 0.11 $ 1.03 $ 0.64
------------ ------------ ------------ ------------
Less distributions:
Dividends from net investment
income .................... $ (0.31) $ (0.30) $ (0.27) $ (0.12)
Distributions from realized
gains ..................... $ (0.14) $ (0.23) (0.13) 0.00
Distributions in excess of
realized gains ............ (0.00) (0.08) 0.00 0.00
------------ ------------ ------------ ------------
Total distributions ......... $ (0.45) $ (0.61) $ (0.40) $ (0.12)
------------ ------------ ------------ ------------
Net asset value, end of
period ...................... $ 14.15 $ 10.65 $ 11.15 $ 10.52
============ ============ ============ ============

Total return .................. 37.35% 1.02% 9.77% 13.61%(a)
Ratios/Supplemental Data
Net assets, end of period ..... $528,202,913 $340,808,050 $325,328,903 $242,057,866
Ratio of expenses to average
net assets .................. 0.15% 0.17% 0.20% O.22%(a)
Ratio of net investment income
to average net assets ....... 2.39% 2.71% 2.59% 2.71%(a)
Portfolio turnover rate ....... 10.66% 24.15% 16.01% 0.50%
Average Commission Rate ....... $ 0.03
<FN>
- ------------

(a) Annualized for periods less than one year for comparability
purposes. Actual annual values may be less than or greater than those shown.
</TABLE>

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<PAGE>

International Equity Portfolio

December 3, 1994
(Commencement
Year Ended of Operations) to
December 31, 1995 December 31, 1994
----------------- -----------------
<S> <C> <C>
Net asset value, beginning
of period ........................................ $ 10.01 $ 10.00
Income from investment
operations:
Net investment income ............................ 0.10 0.01
Net realized and unrealized
gains (losses) on
investments .................................... 1.05 0.00
------------ ------------
Total from investment
operations ..................................... $ 1.15 $ 0.01
------------ ------------
Less distributions:
From net investment
income ......................................... $ (0.11) $ 0.00
From realized
gains .......................................... (0.00) 0.00
------------ ------------
Total distributions .............................. $ (0.11) $ 0.00
------------ ------------
Net asset value, end of
period ........................................... $ 11.05 $ 10.01
============ ============

Total return ....................................... 11.47% 1.26%(a)
Ratios/Supplemental Data
Net assets, end of period .......................... $107,288,301 $ 36,545,470
Ratio of expenses to average
net assets ....................................... 1.16% 1.15%(a)
Ratio of net investment income
to average net assets ............................ 1.43% 1.18%(a)
Ratio of expenses to average net assets without fee
waivers/reimbursed expenses ...................... 1.24% 1.92%(a)
Ratio of net investment income to average net assets
without fee waivers/reimbursed expenses .......... 1.35% 0.41%(a)
Portfolio turnover rate ............................ 2.09% 0.30%
Average Commission Rate ............................ $ 0.05
<FN>
- ------------

(a) Annualized for periods less than one year for comparability
purposes. Actual annual values may be less than or greater than those shown.
</TABLE>

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<PAGE>

INTRODUCTION

The Trust is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"). The
Trust currently consists of seventeen investment portfolios, each of which
consists of a separate pool of assets with separate investment objectives and
policies. However, only the Class I shares of the Growth/Value, Opportunity,
Intrinsic Value, Capital Growth, Balanced, Equity Index and International
Equity Portfolios are offered pursuant to this Prospectus. Each such Portfolio
is classified as a diversified investment portfolio under the 1940 Act.

PROPOSED REORGANIZATION

In connection with the proposed Reorganization, a Special Meeting of
the Shareholders of the Trust is to expected be held in June 1996 to consider
proposals relating to investment policies, service agreements, the election of
two new trustees, and other matters. Proxy materials describing these matters
will be mailed to the Trust's shareholders of record for the meeting.

INVESTMENT OBJECTIVES, POLICIES AND RISK FACTORS

Growth/Value Portfolio

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<PAGE>

focuses on the industry or the economy. In the Adviser's opinion this
procedure may generally be expected to result in a portfolio characterized by
lower price/earnings ratios, above average growth prospects, and average
market risk.

Opportunity Portfolio

Intrinsic Value Portfolio

Capital Growth Portfolio

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<PAGE>

Investment Policies Applicable to the Growth/Value, Opportunity, Intrinsic
Value and Capital Growth Portfolios

The Growth/Value, Opportunity, Intrinsic Value and Capital Growth
Portfolios invest primarily in publicly traded common stocks of companies
incorporated in the United States, although each such Portfolio may also
invest up to 25% of its total assets in the securities of foreign issuers,
either directly or through American Depository Receipts. In addition, they may
invest in securities convertible into common stock, such as certain bonds and
preferred stocks, and may invest up to 5% of their respective net assets in
other types of securities having common stock characteristics (such as rights
and warrants to purchase equity securities). The Portfolios may also enter
into futures contracts and related options and may utilize options. Under
normal market conditions, each Portfolio expects to invest at least 65% of the
value of its total assets in equity securities. Each Portfolio may also hold
up to 35% of its total assets in investment grade short-term obligations
issued or guaranteed by the U.S. Government, or its agencies or
instrumentalities, money market instruments, repurchase agreements and cash.

Balanced Portfolio

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<PAGE>

business opportunities, all of which increase their likelihood of attaining
superior levels of profitability and investment returns. The Adviser may also
select equity securities of companies it believes represent a value or
potential worth which is not fully recognized by prevailing market prices.

-15-

<PAGE>

of purchase within the two highest rating categories or which are unrated at
such time but are deemed by the Adviser to be of comparable quality. Such
investments may include obligations of foreign banks and foreign branches of
U.S. banks. The Portfolio may also invest its cash balances in securities
issued by other investment companies which invest in high-quality, short-term
debt securities. As a shareholder of another investment company, the Portfolio
would bear, along with other shareholders, its pro rata portion of the other
investment company's expenses, including advisory fees. These expenses would
be in addition to the advisory and other expenses that the Portfolio bears
directly in connection with its own operations.

The Balanced Portfolio may also enter into futures contracts
and related options and utilize options as more fully described below.

Equity Index Portfolio

The investment objective of the Equity Index Portfolio is to provide
an investment return which substantially duplicates the price and yield
performance of domestically traded common stocks in the aggregate, as
represented by the Standard & Poor's Composite Stock Price Index (the "S&P 500
Index" or "Index"). The Portfolio uses the S&P 500 Index as a benchmark for
comparison because it represents roughly two-thirds of the market value of all
publicly traded common stocks in the United States, is well known to investors
and is a widely accepted measure of common stock investment returns. The Index
contains a representative sample of common stocks that trade on the New York
and American Stock Exchanges and also contains over-the-counter stocks that
are a part of the National Market System. The S&P 500 Index is constructed
using a "bottom-up" approach through identification of important industry
categories and allocation of a representative sample of stocks to these
categories.

The Portfolio seeks to achieve a 95% correlation coefficient between
its performance and that of the Index. Therefore, the Portfolio's price
changes are expected to closely match movements in the underlying Index. In
addition, the total return of the Portfolio is expected to substantially match
that of the Index. However, there is no assurance that the Portfolio's
objective will be attained. Deviations from the performance of the Index
("tracking error") may result from shareholder purchases and redemptions of
shares of the Portfolio that occur daily, as well as from the expenses borne
by the Portfolio. To the extent that a cash reserve is held to meet expected
redemptions or pending investment in securities, to the extent that securities
must be sold to meet redemption requests, and to the extent that purchases and
sales are made to conform the Portfolio's holdings more closely with that of
the Index in response to cash inflows or outflows and associated brokerage
costs are incurred, these daily inflows or outflows of cash may increase the
Portfolio's tracking error. In addition, tracking error may occur due to
changes made in the S&P 500 Index and the manner in which the Index is
calculated by S&P among other factors. In the event the performance of the
Portfolio is not comparable to the performance of the Index, the Board of
Trustees will examine the reasons for the deviation and the availability of
corrective measures. These measures may include adjustments to the Adviser's
portfolio management practices. If substantial deviation in the Portfolio's
performance were to continue for extended periods, it is expected that the
Board of Trustees would consider possible changes to the Portfolio's
investment objective.

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<PAGE>

diversification of the Index. Therefore, while all industry weights in the
Portfolio are essentially matched to those of the S&P 500 Index, not
necessarily all 500 stocks are held in the Portfolio. The Adviser believes
that a sampling methodology allows the Portfolio to maintain a close
correlation to the performance of the S&P 500 Index while at the same time
controlling the portfolio turnover and transaction costs of the Portfolio.

Under normal market conditions, the Portfolio invests substantially
all of its total assets in the common stocks that comprise the Index in
accordance with their relative capitalization and sector weightings as
described above. It is possible, that if an issuer drops in ranking, or is
eliminated entirely from the Index, the Adviser may be required to sell some
or all of the common stock of such issuer then held by the Portfolio. Sales of
portfolio securities may be made at times when, if the Adviser were not
required to effect purchases and sales of portfolio securities in accordance
with the Index, such securities might not be sold. Such sales may result in
lower prices for such securities than may have been realized or in losses that
may not have been incurred if the Adviser were not required to effect the
purchases and sales. The failure of an issuer to declare or pay dividends, the
institution against an issuer of materially adverse legal proceedings, the
existence or threat of defaults materially and adversely affecting an issuer's
future declaration and payment of dividends, or the existence of other
materially adverse credit factors will not necessarily be the basis for the
disposition of portfolio securities, unless such event causes the issuer to be
eliminated entirely from the Index. The Portfolio may receive from time to
time as part of a "spin-off" or corporate restructuring of an issuer included
in the Index, securities that are themselves outside of the Index. Such
securities will be disposed of by the Portfolio in due course consistent with
the Portfolio's investment objective. In addition, the Portfolio may invest up
to 25% of its assets in the securities of foreign issuers through American
Depository Receipts. An investment in the Portfolio involves risks similar to
those of investing in common stocks.

Pending investment and to meet anticipated redemption requests, the
Portfolio may hold up to 5% of its total assets in short-term obligations
issued or guaranteed by the U.S. Government, or its agencies or
instrumentalities, money market instruments, repurchase agreements and cash.
In addition, up to 5% of the Portfolio's total assets may be invested in
futures contracts and related options in an effort to maintain exposure to
price movements in the Index pending investment of funds or while maintaining
liquidity to meet potential shareholder redemptions.

International Equity Portfolio

The Adviser's investment approach to managing the Portfolio's assets
emphasizes active country selection involving global economic and political
assessments together with valuation analysis of selected countries' securities
markets. This country allocation approach is based on absolute/relative
valuations, changing fundamentals and expected total returns including
currency. In situations where an investment's attractiveness outweighs
prospects for currency weakness, the Adviser will take suitable hedging
measures. An index approach is typically used at the stock selection level.

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<PAGE>

in foreign countries, fundamental analysis at the country level and the
political environment. After the country weightings have been determined,
investments are typically made in country "baskets" of equity securities. A
country "basket" is comprised of equity securities of a particular country and
is constructed using a quantitatively-oriented sampling technique to replicate
the performance of an individual country's stock market index. The Morgan
Stanley Capital International Country Indexes have, for some time, been the
accepted benchmarks in the U.S. for international equity fund country
comparisons. The Portfolio may also invest in individual equity securities the
Adviser believes offer opportunity for capital appreciation.

The Portfolio's investments will generally be allocated among
countries and geographic regions. The Portfolio's assets may be invested in
equity securities located in but not limited to the United Kingdom and
European continent, Japan, other Far East areas and Latin America. The
Portfolio may also invest in other regions seeking to capitalize on investment
opportunities in other parts of the world. The Portfolio's assets will be
invested at all times in the securities of issuers located in at least three
different foreign countries. Investments in a particular country may exceed
25% of the Portfolio's total assets, thus making its performance more
dependent upon the political and economic circumstances of a particular
country than a more widely diversified portfolio.

The Portfolio will be primarily invested in equity securities of
foreign companies consisting of common stocks, preferred stocks, rights,
warrants, and securities convertible into common or preferred stock. Equity
investments also include American Depository Receipts, European Depository
Receipts and similar securities that are either sponsored or unsponsored.
Under normal market conditions, the Portfolio expects to invest at least 65%
of the value of its total assets in equity securities of foreign issuers. The
Portfolio may hold up to 35% of its total assets in debt securities, and cash
equivalent holdings consisting of short-term debt obligations and cash.
However, the Portfolio does not expect to have a substantial portion of its
assets invested in debt securities and cash equivalent holdings under normal
market conditions. Debt securities in which the Portfolio may invest consist
of: (i) debt securities of foreign issuers, foreign governments and agencies
that the Adviser believes, based on market conditions, the financial condition
of the issuer, general economic conditions and other relevant factors, offer
opportunities for capital appreciation; (ii) obligations issued or guaranteed
by the U.S. Government, its agencies or instrumentalities; (iii) corporate,
bank and commercial obligations; (iv) mortgage backed securities; and (v)
securities representing interests in pools of assets. In the event the Adviser
determines that unusual and adverse market conditions exist, the Portfolio may
adopt a temporary defensive posture and invest without limitation in debt
securities and cash equivalent holdings. To the extent the Portfolio is so
invested, its investment objective may not be achieved.

The Portfolio may also enter into futures contracts, related options,
foreign currency transactions and forward contracts, and utilize options.

OTHER INVESTMENT POLICIES

Ratings

If not rated as commercial paper, debt obligations acquired by
any of the Portfolios will be investment grade at the time of purchase, i.e.,
obligations rated AAA, AA, A or BBB by Standard & Poor's Rating Group,
Division of McGraw Hill ("S&P"), Fitch Investors Service, Inc. ("Fitch"),
Duff & Phelps Credit Co. ("Duff") or IBCA, Inc. ("IBCA") or Aaa, Aa, A or
Baa by Moody's Investors Service, Inc. ("Moody's") (each a "Rating Agency")
or be unrated but deemed by the Adviser to be comparable in quality at the
time of purchase to instruments that are so rated. Obligations rated in
the lowest of the top four rating

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<PAGE>

categories (Baa by Moody's or BBB by S&P, Fitch, Duff or IBCA) are considered
to have less capacity to pay interest and repay principal and have certain
speculative characteristics. The debt ratings are described in the Statement
of Additional Information.

Short-Term Investments

Each Portfolio may hold the types of short-term investments described
under "Balanced Portfolio - Cash Equivalent Securities and Other Investments"
above.

U.S. Government Obligations

Securities issued or guaranteed by the U.S. Government, its agencies
or instrumentalities have historically involved little risk of loss of
principal if held to maturity. The value of these securities may fluctuate
significantly, which may result in a significant decline in a Portfolio's net
asset value. In such event, an investor potentially may suffer a loss if the
investor liquidates his portfolio shares. No assurance can be given that the
U.S. Government would provide financial support to U.S. Government-sponsored
instrumentalities if it is not legally obligated to do so.

Stripped Government Obligations

SMBS are usually structured with two classes that receive different
proportions of the interest and principal distributions from a pool of
mortgage

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<PAGE>

backed obligations. A common type of SMBS will have one class receiving all of
the interest, while the other class will receive all of the principal.
However, in some instances, one class will receive some of the interest and
most of the principal while the other class will receive most of the interest
and the remainder of the principal. If the underlying obligations experience
greater than anticipated prepayments of principal, a Portfolio may fail to
fully recoup its initial investment in these securities. The market value of
the class consisting entirely of principal payments generally is extremely
volatile in response to changes in interest rates. The yields on a class of
SMBS that receives all or most of the interest are generally higher than
prevailing market yields on other mortgage backed obligations because their
cash flow patterns are more volatile and there is a greater risk that the
initial investment will not be fully recouped.

Custodial Receipts for Treasury Securities

Repurchase and Reverse Repurchase Agreements

Lending Portfolio Securities

To increase income or offset expenses, each Portfolio may lend its
portfolio securities to financial institutions such as banks and
broker-dealers in accordance with the investment limitations described below.
Agreements would require that the loans be continuously secured by collateral
equal at all times in value to at least the market value of the securities
loaned plus accrued interest. Collateral for such loans could include cash or
securities of the U.S. Government, its agencies or instrumentalities. Such
loans will not be made if, as a result, the aggregate of all outstanding loans
of a particular Portfolio exceeds one-third of the value of its total assets.
Loans of securities involve risks of delay in receiving additional collateral
or in recovering the securities loaned or possible loss of rights in the
collateral should the borrower of the securities become insolvent. Loans will
be made only to borrowers that provide the requisite collateral comprised of
liquid assets and when, in the Adviser's judgment, the income to be earned
from the loan justifies the attendant risks.

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<PAGE>

Illiquid Securities

In accordance with their fundamental investment limitation described
below, the Growth/Value, Opportunity, Intrinsic Value and Equity Index
Portfolios will not knowingly invest more than 10% and the Capital Growth,
Balanced and International Equity Portfolios will not knowingly invest more
than 15% of the value of their respective total assets in securities that are
illiquid. Securities having legal or contractual restrictions on resale or no
readily available market, and instruments (including repurchase agreements,
variable and floating rate instruments and time deposits) that do not provide
for payment to the Portfolios within seven days after notice are subject to
this limitation. Securities that have legal or contractual restrictions on
resale but have a readily available market are not deemed to be illiquid for
purposes of this limitation.

Borrowings

Foreign Securities

As stated above, the Growth/Value, Opportunity, Intrinsic Value,
Capital Growth, Balanced and International Equity Portfolios may invest up to
25%, 25%, 25%, 25%, 20% and 100% of their respective total assets (exclusive
of short-term cash investments) in foreign securities. In addition the Equity
Index Portfolio may invest up to 25% of its total assets in American
Depository Receipts. Investments in foreign securities, whether made directly
or indirectly, involve certain inherent risks, such as political or economic
instability of the issuer or the country of issue, the difficulty of
predicting international trade patterns, changes in exchange rates of foreign
currencies and the possibility of adverse changes in investment or exchange
control regulations. There may be less publicly available information about a
foreign company than about a U.S. company. Listed foreign companies generally
are not subject to uniform accounting, auditing and financial reporting
standards comparable to those applicable to domestic companies. Further,
foreign stock markets are generally not as developed or efficient as those in
the U.S. and in most foreign markets volume and liquidity are less than in the
U.S. Fixed commissions on foreign stock exchanges are generally higher than
the negotiated commissions on U.S. exchanges, and there is generally less
government supervision and regulation of foreign stock exchanges, brokers and
listed companies than in the U.S. With respect to certain foreign countries,
there is a possibility of expropriation or confiscatory taxation, limitations
on the removal of funds or other assets or

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diplomatic developments that could affect investment within those countries.
Because of these and other factors, securities of foreign companies acquired
by a Portfolio may be subject to greater fluctuation in price than securities
of domestic companies.

American Depository Receipts ("ADRs")

Each Portfolio may invest in securities of foreign issuers in the form
of ADRs or similar securities representing securities of foreign issuers.
These securities may not be denominated in the same currency as the securities
they represent. ADRs are receipts typically issued by a United States bank or
trust company evidencing ownership of the underlying foreign securities and
are denominated in U.S. dollars. Certain such institutions issuing ADRs may
not be sponsored by the issuer. A non-sponsored depository may not provide the
same shareholder information that a sponsored depository is required to
provide under its contractual arrangements with the issuer.

European Depository Receipts ("EDRs")

Supranational Bank Obligations

Convertible Securities

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<PAGE>

common stock. Convertible securities acquired by a Portfolio will be rated
investment grade by a Rating Agency, or if unrated, will be of comparable
quality as determined by the Adviser. Subsequent to its purchase by a
Portfolio, a rated security may cease to be rated or its rating may be reduced
below the minimum rating required for purchase by the Portfolio. The Adviser
will consider such an event in determining whether the Portfolio involved
should continue to hold the security. The Adviser expects, however, to
promptly sell any securities that are non-investment grade as a result of
these events that exceed 5% of a Portfolio's net assets where it has
determined that such sale is in the best interest of the Portfolio.

Warrants

When-Issued Purchases and Forward Commitments

The Portfolios may purchase securities on a "when-issued" basis and
may purchase or sell securities on a "forward commitment" basis. These
transactions, which involve a commitment by a Portfolio to purchase or sell
particular securities with payment and delivery taking place at a future date
(perhaps one or two months later), permit the Portfolio to lock-in a price or
yield on a security it owns or intends to purchase, regardless of future
changes in interest rates. When-issued and forward commitment transactions
involve the risk, however, that the yield obtained in a transaction may be
less favorable than the yield available in the market when the securities
delivery takes place. Each Portfolio's forward commitments and when-issued
purchases are not expected to exceed 25% of the value of its total assets
absent unusual market conditions. The Portfolios do not earn income with
respect to these transactions until the subject securities are delivered to
the Portfolios. The Portfolios do not intend to engage in when-issued
purchases and forward commitments for speculative purposes but only in
furtherance of their investment objectives.

Asset Backed Securities

Asset backed securities held by the Balanced and International Equity
Portfolios arise through the grouping by governmental, government-related and
private organizations of loans, receivables and other assets originated by
various lenders ("Asset Backed Securities") as described below.

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<PAGE>

mortgage loans and is less likely to experience substantial prepayments. Like
other fixed income securities, when interest rates rise the value of an Asset
Backed Security generally will decline; however, when interest rates decline,
the value of an Asset Backed Security with prepayment features may not
increase as much as that of other fixed income securities, and, as noted
above, changes in market rates of interest may accelerate or retard
prepayments and thus affect maturities.

Collateralized mortgage obligations ("CMOs") provide the holder with a
specified interest in the cash flow of a pool of underlying mortgages or other
mortgage backed securities. Issuers of CMOs ordinarily elect to be taxed as
pass-through entities known as real estate mortgage investment conduits
("REMICs"). CMOs are issued in multiple classes, each with a specified fixed
or floating interest rate and a final distribution date. The relative payment
rights of the various CMO classes may be structured in a variety of ways.
These multiple class securities may be issued or guaranteed by U.S. Government
agencies or instrumentalities, including the Government National Mortgage
Association ("GNMA"), Federal National Mortgage Association ("FNMA") and
Federal Home Loan Mortgage Corporation ("FHLMC"), or issued by trusts formed
by private originators of, or investors in, mortgage loans. Classes in CMOs
which the Portfolios may hold are known as "regular" interests. CMOs also
issue "residual" interests, which in general are junior to and more volatile
than regular interests. The Portfolios do not intend to purchase residual
interests.

Mortgage pass-through certificates provide the holder with a pro rata
interest in the underlying mortgages. One type of such certificate in which
the Portfolios may invest is GNMA Certificate which is backed as to the timely
payment of principal and interest by the full faith and credit of the U.S.
Government. Another type is a FNMA Certificate, the principal and interest of
which are guaranteed only by FNMA itself, not by the full faith and credit of
the U.S. Government. Another type is a FHLMC Participation Certificate which
is guaranteed by FHLMC as to timely payment of principal and interest.
However, like a FNMA security, it is not guaranteed by the full faith and
credit of the U.S. Government. Privately issued mortgage backed securities
will carry a rating at the time of purchase of at least A by S&P or by Moody's
or, if unrated, will be in the Adviser's opinion equivalent in credit quality
to such rating. Mortgage backed securities issued by private issuers, whether
or not such obligations are subject to guarantees by the private issuer, may
entail greater risk than obligations directly or indirectly guaranteed by the
U.S. Government.

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<PAGE>

the debt of a special purpose entity organized solely for the purpose of
owning such assets and issuing such debt. Non-mortgage backed securities are
not issued or guaranteed by the U.S. Government or its agencies or
instrumentalities.

Variable and Floating Rate Instruments

The Balanced Portfolio may invest in inverse floating rate debt
instruments ("inverse floaters") which may or may not be leveraged. The
interest rate of an inverse floater resets in the opposite direction from the
market rate of interest to which it is indexed. An inverse floater may be
considered to be leveraged to the extent that its interest rate varies by a
magnitude that exceeds the magnitude of the change in the index rate of
interest. The higher degree of leverage inherent in inverse floaters is
associated with greater volatility in their market values.

The absence of an active secondary market with respect to particular
variable and floating rate instruments could make it difficult for the
Balanced Portfolio to dispose of the instruments if the issuer defaulted on
its payment obligation or during periods that the Portfolio is not entitled to
exercise demand rights, and the Portfolio could, for these or other reasons,
suffer a loss with respect to such instruments. Variable and floating rate
instruments (including inverse floaters) will be subject to the Portfolio's
limitation on illiquid investments. See "Illiquid Securities."

Zero Coupon Obligations

Foreign Currency Transactions

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<PAGE>

They may be used to reduce the level of volatility caused by changes in
foreign currency exchange rates or when such transactions are economically
appropriate for the reduction of risks in the ongoing management of the
Portfolios. Although forward currency exchange contracts may be used to
minimize the risk of loss due to a decline in the value of the hedged
currency, at the same time they tend to limit any potential gain that might be
realized should the value of such currency increase. The Portfolios also may
combine forward currency exchange contracts with investments in securities
denominated in other currencies.

Options on Foreign Currency

The International Equity and Balanced Portfolios may purchase and sell
call and put options on foreign currency for the purpose of hedging against
changes in future currency exchange rates. Call options convey the right to
buy the underlying currency at a price which is expected to be lower than the
spot price of the currency at the time the option expires. Put options convey
the right to sell the underlying currency at a price which is anticipated to
be higher than the spot price of the currency at the time the option expires.
The Portfolios may use foreign currency options for the same purposes as
forward currency exchange and futures transactions, as described herein. See
also "Options" and "Currency Futures and Options on Currency Futures" below.

Futures Contracts and Related Options

Each Portfolio may purchase and sell futures contracts which obligate
it to take or make delivery of certain securities at maturity, as well as
stock index futures contracts which are bilateral agreements pursuant to which
two parties agree to take or make delivery of an amount of cash equal to a
specified dollar amount times the difference between the stock index value
(which assigns relative values to the common stocks included in the index) at
the close of the last trading day of the contract and the price at which the
futures contract is originally struck. No physical delivery of the underlying
stocks in the index is made. The Capital Growth, Balanced and International
Equity Portfolios may enter into contracts for the future delivery of fixed
income securities commonly known as interest rate futures contracts.

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<PAGE>

The Capital Growth, Balanced, Equity Index and International Equity
Portfolios may also purchase options on futures contracts and may purchase and
write put and call options on stock indices listed on U.S. and, in the case of
the International Equity Portfolio foreign exchanges, or traded in the
over-the-counter market. A futures option gives the holder, in return for the
premium paid, the right to buy (call) from or sell (put) to the writer of the
option a futures contract at a specified price at any time during the period
of the option.

The Portfolios' commodities transactions must constitute bona fide
hedging or other permissible transactions pursuant to regulations promulgated
by the Commodities and Futures Trading Commission ("CFTC"). In addition, a
Portfolio may not engage in such transactions if the sum of the amount of
initial margin deposits and premiums paid for unexpired commodity options,
other than for bona fide hedging transactions, would exceed 5% of the
liquidation value of its assets, after taking into account unrealized profits
and unrealized losses on such contracts it has entered into; provided,
however, that in the case of an option that is in-the-money at the time of
purchase, the in-the-money amount may be excluded in calculating the
percentage limitation. Pursuant to SEC requirements, the Portfolios will be
required to segregate cash or high quality money market instruments in
connection with their commodities transactions in an amount generally equal to
the value of the underlying commodity. The Trust intends to comply with the
regulations of the CFTC exempting the Portfolios from registration as a
"commodity pool operator."

For a more detailed description of futures contracts and related
options, see Appendix B to the Statement of Additional Information.

Currency Futures and Options on Currency Futures

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<PAGE>

Options

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<PAGE>

(depending upon the position being closed out) on the same security with the
same exercise price and expiration date as the option which it previously
wrote.

For additional information relating to option trading practices,
including particular risks thereof, see the Statement of Additional
Information.

Risk Factors Associated with Futures, Options and Currency Futures and Options

To the extent a Portfolio is engaging in a futures transaction as a
hedging device, due to the risk of an imperfect correlation between securities
in its portfolio that are the subject of a hedging transaction and the futures
contract used as a hedging device, it is possible that the hedge will not be
fully effective. For example, losses on the portfolio securities may be in
excess of gains on the futures contract or losses on the futures contract may
be in excess of gains on the portfolio securities that were the subject of the
hedge. In futures contracts based on indices, the risk of imperfect
correlation increases as the composition of the Portfolio varies from the
composition of the index. In an effort to compensate for the imperfect
correlation of movements in the price of the securities being hedged and
movements in the price of futures contracts, the Portfolio may buy or sell
futures contracts in a greater or lesser dollar amount than the dollar amount
of the securities being hedged if the historical volatility of the futures
contract has been less or greater than that of the securities. Such "over
hedging" or "under hedging" may adversely affect the Portfolio's net
investment results if market movements are not as anticipated when the hedge
is established.

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<PAGE>

anticipation of adverse price movements, it will be required to make daily
cash payments of variation margin. In such circumstances, an increase in the
value of the portion of the portfolio being hedged, if any, may offset
partially or completely losses on the futures contract.

Risk Factors Associated with Derivative Instruments

Each Portfolio may purchase certain "derivative instruments."
Derivative instruments are instruments that derive value from the performance
of underlying assets, interest or currency exchange rates, or indices, and
include, but are not limited to, futures contracts, options, forward currency
contracts and structured debt obligations (including collateralized mortgage
obligations and other types of asset backed securities, "stripped" securities
and various floating rate instruments, including inverse floaters).

Derivative instruments present, to varying degrees, market risk that
the performance of the underlying assets, exchange rates or indices will
decline; credit risk that the dealer or other counterparty to the transaction
will fail to pay its obligations; volatility and leveraging risk that, if
interest or exchange rates change adversely, the value of the derivative
instrument will decline more than the assets, rates or indices on which it is
based; liquidity risk that a Portfolio will be unable to sell a derivative
instrument when it wants because of lack of market depth or market disruption;
pricing risk that the value of a derivative instrument (such as an option)
will not correlate exactly to the value of the underlying assets, rates or
indices on which it is based; and operations risk that loss will occur as a
result of inadequate systems and controls, human error or otherwise. Some
derivative instruments are more complex than others, and for those instruments
that have been developed recently, data are lacking regarding their actual
performance over complete market cycles.

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<PAGE>

complete, it is possible that the Portfolios will, because of the risks
discussed above, incur loss as a result of their investments in derivative
instruments.

Portfolio Turnover

Generally, the Portfolios will purchase securities for capital
appreciation or investment income, or both, and not for short-term trading
profits. However, a Portfolio may sell a portfolio investment soon after its
acquisition if the Adviser believes that such a disposition is consistent with
or in furtherance of the Portfolio's investment objective. Portfolio
investments may be sold for a variety of reasons, such as more favorable
investment opportunities or other circumstances. As a result, such Portfolios
are likely to have correspondingly greater brokerage commissions and other
transaction costs which are borne indirectly by shareholders. Portfolio
turnover may also result in the realization of substantial net capital gains.
(See "Taxes-Federal" in the Prospectus and "Additional Information Concerning
Taxes" in the Statement of Additional Information.) While it is not possible
to accurately predict portfolio turnover rates, the annual turnover rates for
the Growth/Value, Opportunity, Intrinsic Value, Capital Growth and
International Equity Portfolios are not expected to exceed 100% and the annual
turnover rate for the Balanced Portfolio is not expected to exceed 75%. Equity
index funds typically have lower levels of turnover than actively managed
funds.

Investment Limitations

No Portfolio may:

4. Borrow money or issue senior securities, except that each Portfolio
may borrow from banks and enter into reverse repurchase agreements for
temporary

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purposes in amounts not in excess of 10% of the value of its total assets at
the time of such borrowing; or mortgage, pledge or hypothecate any assets,
except in connection with any such borrowing and in amounts not in excess of
the lesser of the dollar amounts borrowed or 10% of the value of the
Portfolio's total assets at the time of such borrowing. No Portfolio will
purchase securities while its borrowings (including reverse repurchase
agreements) in excess of 5% of its total assets are outstanding. Securities
held in escrow or separate accounts in connection with a Portfolio's
investment practices described in the Statement of Additional Information or
in this Prospectus are not deemed to be pledged for purposes of this
limitation.

In addition, the Growth/Value, Opportunity, Intrinsic Value and Equity
Index Portfolios may not invest more than 10% of their respective total assets
in illiquid investments. The Capital Growth, Balanced and International Equity
Portfolios may invest up to 15% of their respective total assets in illiquid
securities. See "Illiquid Securities" above.

PURCHASE OF SHARES

In General

Purchase orders which are accompanied by payment (by check or wire
transfer) and received by the Transfer Agent in proper form on a Business Day
(as defined below) prior to the close of the New York Stock Exchange
("Exchange") are priced at the net asset value of the particular Portfolio
determined on that Business Day. Purchase orders which are received by the
Transfer Agent after the close of trading on the Exchange on a Business Day or
on non-Business Days will be executed as of the determination of net asset
value on the next Business Day.

Questions concerning the purchase of shares should be directed to the
Transfer Agent at (800) 688-3350.

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<PAGE>

Net Asset Value and Pricing of Shares

The net asset value of each Portfolio for purposes of pricing purchase
and redemption orders is determined as of the close of trading on the floor
of the New York Stock Exchange ("Exchange") (currently 4:00 p.m., New York
Time), on each day the Exchange is open for business ("Business Day") except:
(i) those holidays which the Exchange observes (currently New Year's Day,
Day, Presidents' Day, Good Friday, Memorial Day (observed), Independence
Day, Labor Day, Thanksgiving Day and Christmas Day); and (ii) those
Business Days on which the Exchange closes prior to the close of
its regular trading hours ("Early Closing Time"), in which event the
net asset value of each Portfolio will be determined and its shares
will be priced as of such Early Closing Time. Net asset value per
Class I share of a Portfolio is calculated by dividing the value
of all securities and other assets belonging to the Portfolio allocable
to that Class I, less the liabilities charged to that Class I, by the
number of the outstanding shares of such Class I.

Securities held by the Portfolios which are traded on a recognized
U.S. stock exchange are valued at the last sale price on the securities
exchange on which such securities are primarily traded or at the last sale
price on the national securities market. Securities which are primarily traded
on foreign securities exchanges are generally valued at the latest closing
price on their respective exchanges, except when an occurrence subsequent to
the time a value was established is likely to have changed such value, in
which case the fair value of those securities will be determined through
consideration of other factors by the Adviser under the supervision of the
Board of Trustees. Securities, whether U.S. or foreign, traded on only
over-the-counter markets and securities for which there were no transactions
are valued at the average of the current bid and asked prices. Fixed income
securities held by the Portfolios are valued according to the broadest and
most representative market, which ordinarily will be the over-the-counter
markets, whether in the United States or in foreign countries. Such securities
are valued at the average of the current bid and asked prices. Securities for
which accurate market quotations are not readily available, and other assets
are valued at fair value by the Adviser under the supervision of the Board of
Trustees. Securities may be valued on the basis of prices provided by
independent pricing services when the Adviser believes such prices reflect the
fair market value of such securities. The prices provided by pricing services
take into account institutional size trading in similar groups of securities
and any developments related to specific securities. For valuation purposes,
the value of assets and liabilities expressed in foreign currencies will be
converted to U.S. dollars equivalent at the prevailing market rate on the day
of valuation. A Portfolio's open futures contracts will be "marked-to-
market."

REDEMPTION OF SHARES

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<PAGE>

Currently, the Trust imposes no charge when shares are redeemed.
However, Banks may charge a fee for providing services in connection with
investments in Portfolio shares. The Trust reserves the right to redeem
Portfolio shares involuntarily, after sixty days notice, if redemptions cause
an account's value to remain at $1,000 or less. Under certain circumstances,
the Trust may make payment for redemptions in securities or other property.

Questions concerning the proper form for redemption requests should be
directed to the Transfer Agent at (800) 688-3350.

PERFORMANCE INFORMATION

From time to time, in advertisements or in reports to shareholders the
performance of each class of shares of the Portfolios may be compared to the
performance of other mutual funds with similar investment objectives and to
stock or other relevant indices or to rankings prepared by independent
services or other financial or industry publications that monitor the
performance of mutual funds. For example, performance may be compared to data
prepared by Lipper Analytical Services, Inc. In addition, the performance of
the Portfolios may be compared to the Standard & Poor's 500 Index, an index of
unmanaged groups of common stocks, the Consumer Price Index, or the Dow Jones
Industrial Average, a recognized unmanaged index of common stocks of thirty
industrial companies listed on the New York Stock Exchange. Performance data
as reported in national financial publications such as Money Magazine, Forbes,
Barron's, The Wall Street Journal and The New York Times, or in publications
of a local or regional nature, may also be used in comparing the performance
of a Portfolio.

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<PAGE>

deposits and other investments which provide a fixed yield for a stated period
of time. Performance data should also be considered in light of the risks
associated with a Portfolio's portfolio composition, quality, maturity,
operating expenses and market conditions. Any fees charged by financial
institutions directly to their customer accounts in connection with
investments in shares will not be reflected in performance calculations.

DIVIDENDS AND DISTRIBUTIONS

Dividends and distributions will reduce a class' net asset value by
the amount of the dividend or distribution. All dividends and distributions
are automatically reinvested in additional Class I shares of the same
Portfolio at their net asset value per share determined on the payment date,
unless the holder has notified the Bank in writing that he elects to have
dividends or capital gain distributions (or both) paid in cash. Shareholders
must make such election, or any revocation thereof, in writing to their
financial institutions. If an account is established with telephone
privileges, the registered owner or his preauthorized legal representative
may change the election to receive dividends in cash to an election to
receive dividends in shares by telephoning the Transfer Agent at
(800) 688-3350. The election will become effective with respect to
dividends paid after its receipt by the Transfer Agent.

TAXES

Federal

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<PAGE>

long the shareholders have held the shares and whether such gains are received
in cash or reinvested in additional shares.

Shareholders will be advised at least annually as to the federal
income tax consequences of distributions made to them each year.

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<PAGE>

State and Local

The Trust may be subject to state or local taxes in jurisdictions in
which the Trust may be deemed to be doing business. In addition, in those
states or localities which have income tax laws, the treatment of the Trust
and its shareholders under such laws may differ from treatment under federal
income tax laws. Shareholders are advised to consult their tax advisers
concerning the application of state and local taxes, which may have different
consequences from those of the federal income tax law described above.

MANAGEMENT

Trustees and Officers of the Trust

The Board of Trustees of the Trust is responsible for the management
of the business and affairs of the Trust. The Trustees and executive officers
of the Trust and their principal occupations for the last five years are set
forth below. Each Trustee has an address at The Woodward Funds, c/o NBD Bank,
611 Woodward Avenue, Detroit, Michigan 48226.

*Earl I. Heenan, Jr., Chairman and President

Director (since 1995), Vice Chairman (1988-1995) and President
(1955-1988), Detroit Mortgage & Realty Company; President (1989-1992) and
Trustee (since 1966), Cottage Hospital of Grosse Pointe (affiliate of
Henry Ford Health System); Trustee, Henry Ford Health Sciences Center
(since 1987); Trustee, Henry Ford Continuing Care Corporation (since 1980);
Trustee, Earhart Foundation (since 1980). He is 77 years old and his
address is 333 West Fort Street, Detroit, Michigan 48226.

*Eugene C. Yehle, Trustee and Treasurer

Will M. Caldwell, Trustee

Nicholas J. De Grazia, Trustee

- --------
* Trustees who are "interested persons" of the Trust, as defined in the 1940
Act.

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<PAGE>

Authority (since 1991). He is 53 years old and his address is 3650 Shorewood
Drive, North Lakeport, Michigan 48059.

John P. Gould, Trustee

Steven G. Rothmeier Professor (since January, 1996); Distinguished
Service Professor of Economics of the University of Chicago Graduate
School of Business (since 1984); Dean of the University of Chicago Graduate
School of Business (1983-1993); Member of Economic Club of Chicago and
Commercial Club of Chicago; Director of Harbor Capital Advisors and
Dimensional Fund Advisors; Trustee, Prairie Family of Funds. He is 57
years old and his address is University of Chicago Graduate School of
Business, 1101 East 58th Street, Chicago, Illinois 60637.

Marilyn McCoy, Trustee

Julius L. Pallone, Trustee

*Donald G. Sutherland, Trustee

Partner of the law firm Ice, Miller, Donadio & Ryan, Indianapolis,
Indiana. He is 67 years old, and his address is One American Square, 34th
Floor, Indianapolis, Indiana 46204.

Donald L. Tuttle, Trustee

Vice President (since 1995), Senior Vice President (1992-1995),
Association for Investment Management and Research; Senior Professor
of Finance, Indiana University (1970-1991); Vice President, Trust &
Investment Advisers, Inc. (1990-1991); Director, Federal Home Loan
Bank of Indianapolis (1981 to 1985). He is 61 years old, and his
address is 5 Boar's Head Lane, Charlottesville, Virginia 22903.

W. Bruce McConnel, III, Secretary

Partner of the law firm Drinker Biddle & Reath, Philadelphia,
Pennsylvania. He is 53 years old, and his address is 1345 Chestnut Street,
Philadelphia, Pennsylvania 19107.

- --------------------------------
* Trustees who are "interested persons" of the Trust, as defined in the 1940
Act.

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<PAGE>

Investment Adviser, Custodian and Transfer Agent

Jeffrey C. Beard, First Vice President, and Gary L. Konsler, First
Vice President are primarily responsible for the day-to-day management of the
Growth/Value and Capital Growth Portfolios. Mr. Beard joined NBD in 1982
after receiving an MBA in Finance from Michigan State University. Mr. Konsler
joined NBD in 1973 after receiving a JD from Indiana University.

Ronald L. Doyle, First Vice President, and Joseph R. Gatz, Vice
President, are primarily responsible for the day-to-day management of the
Opportunity Portfolio. Mr. Doyle joined NBD in 1982 after receiving his MBA in
Finance from Michigan State University. Mr. Gatz joined NBD in 1986 after
receiving an MBA from Indiana University.

Chris M. Gassen, Vice President, and F. Richard Neumann, Vice
President, are primarily responsible for the day-to-day management of the
Intrinsic Value Portfolio. Mr. Gassen joined NBD in 1985 after receiving
an MBA in Finance from Indiana University. Mr. Neumann joined NBD in
1981 after receiving an MBA in Finance/Accounting from the University of
Chicago.

Claude B. Erb, First Vice President, is primarily responsible for the
day-to-day portfolio management of the Balanced Portfolio. Mr. Erb joined
First Chicago NBD Corporaiton in 1993, after receiving his MBA in Finance
from the University of California.

F. Richard Neumann, Vice President and Henry Kaczmarek, Assistant
Vice President, are primarily responsible for the day-to-day management
of the Equity Index Portfolio. Mr. Kaczmarek joined NBD in 1993 after receiving
an MBA in Finance from Indiana University.

Richard P. Kost, First Vice President, and Clyde L. Carter, Jr.,
Assistant Vice President are primarily responsible for the day-to-day
portfolio management of the International Equity Portfolio. Mr. Kost joined
NBD in 1964, after receiving his MBA from the University of Michigan.
Mr. Carter joined NBD in 1987 after he received his MBA from Western
Michigan University.

For its services under the Advisory Agreement, NBD is entitled to
receive advisory fees, computed daily and payable monthly, at an annual rate
of .75% of the average daily net assets of each of the Growth/Value,
Opportunity, Intrinsic Value, Capital Growth, Balanced and International
Equity Portfolios and .10% of the average daily net assets of the Equity Index
Portfolio. In addition, NBD is entitled to 4/10ths of the gross income earned
by each Portfolio on each loan of securities (excluding capital gains and
losses, if any). NBD may voluntarily waive its fees in whole or in part with
respect to any particular Portfolio.

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<PAGE>

Banking laws and regulations currently prohibit a bank holding company
registered under the Bank Holding Company Act of 1956 or any affiliate thereof
from sponsoring, organizing, controlling, or distributing the shares of a
registered open-end investment company continuously engaged in the issuance of
its shares, and prohibit banks generally from underwriting securities, but do
not prohibit such a bank holding company or affiliate from acting as
investment adviser, transfer agent, or custodian to such an investment company
or from purchasing shares of such a company as agent for and upon the order of
a customer. The Adviser and the Trust believe that the Adviser may perform the
advisory, custodial and transfer agency services for the Trust described in
this Prospectus, and that the Adviser, subject to such banking laws and
regulations, may perform the shareholder services contemplated by this
Prospectus, without violation of such banking laws or regulations. However,
future changes in legal requirements relating to the permissible activities of
banks and their affiliates, as well as future interpretations of present
requirements, could prevent the Adviser from continuing to perform investment
advisory, custodial or transfer agency services for the Trust or require the
Adviser to alter or discontinue the services provided by it to shareholders.

If the Adviser were prohibited from performing investment advisory,
custodial or transfer agency services for the Trust, it is expected that the
Board of Trustees would recommend that shareholders approve new agreements
with another entity or entities qualified to perform such services and
selected by the Board. If the Adviser or its affiliates were required to
discontinue all or part of its shareholder servicing activities, their
customers would be permitted to remain the beneficial owners of Portfolio
shares and alternative means for continuing the servicing of such customers
would be sought. The Trust does not anticipate that investors would suffer any
adverse financial consequences as a result of these occurrences.

Sponsors and Co-Distributors

FoM, a Delaware corporation and a wholly owned subsidiary of First of
Michigan Capital Corporation, is a sponsor and Co-Distributor of the Trust's
shares. It is engaged in the securities underwriting and securities and
commodities brokerage business and is a member of the New York Stock Exchange,
Inc., other major securities and commodities exchanges and the National
Association of Securities Dealers, Inc. FoM participates as a member of
various selling groups or as agent of other investment companies, executes
orders on behalf of investment companies for the purchase and sale of their
securities and sells securities to such companies as a broker or dealer in
securities. On December 31, 1995, FoM had a net worth of $37,231,000.

-40-

<PAGE>

Service and Distribution Plan

The Trust has adopted its Distribution Plan pursuant to Rule 12b-1
under the 1940 Act (the "Plan"). Under the Plan, the Trust incurs expenses
primarily intended to result in the sale of the Trust's shares in an amount
not to exceed .35 of 1% of the value of each portfolio's average daily net
assets calculated as follows in the case of each Portfolio: (i) fees payable
to the Co-Distributors pursuant to the Distribution Agreement; (ii) the
actual costs and expenses in connection with advertising and marketing the
Portfolio's shares; and (iii) fees pursuant to agreements with securities
dealers, financial institutions and other professionals ("Service Agents") for
administration or servicing of Portfolio shareholders ("Servicing"). Servicing
may include, among other things: answering client inquiries regarding the
Trust and the Portfolios; assisting clients in changing dividend options,
account designations and addresses; performing sub-accounting; establishing
and maintaining shareholder accounts and records; processing purchase and
redemption transactions; investing client cash account balances automatically
in Portfolio shares; providing periodic statements showing a client's account
balance and integrating such statements with those of other transactions and
balances in the client's other accounts serviced by the Service Agent;
arranging for bank wires; and such other services as the Trust may request, to
the extent the Service Agent is permitted by applicable statute, rule or
regulation. Under the Plan, the Trust also bears the cost of preparing and
printing Prospectuses for use in selling shares of the Trust and costs
associated with implementing and operating the Plan. These costs are included
in computing the .35 of 1% limitation set forth above.

Pursuant to the Distribution Agreement, FoM is entitled to receive a
fee at the annual rate of .005% of a Portfolio's average net assets, and Essex
is entitled to receive a fee at the annual rate of .10% of the aggregate
average net assets of the Trust's investment portfolios attributable to
investments by clients of Essex. The payments to be made to the
Co-Distributors which are based on a percentage of the net assets of the
Portfolios are designed to compensate the Co-Distributors for their
participation in the distribution of the Portfolios' shares and to reimburse
the Co-Distributors for certain distribution costs. Nonreimbursable expenses
of the Co-Distributors include salaries of executives, sales and clerical
personnel performing services for the Trust, and overhead expenses. Such costs
are by their nature not subject to precise quantification and the Trustees
have determined that the fees to be paid to the Co-Distributors are reasonable
under the circumstances.

Trust Expenses

-41-

<PAGE>

and Shareholder Servicing Plan, outside auditing and legal expenses, all taxes
and corporate fees payable by the Trust, SEC fees, state securities
qualification fees, costs of preparing and printing prospectuses for
regulatory purposes and for distribution to shareholders, costs of shareholder
reports and shareholder meetings, and any extraordinary expenses. Each
Portfolio also pays for brokerage commissions and transfer taxes (if any) in
connection with the purchase and sale of portfolio securities. Expenses
attributable to a particular Portfolio of the Trust will be charged to that
Portfolio and expenses not readily identifiable as belonging to a particular
Portfolio will be allocated by the Board of Trustees among one or more
Portfolios in such a manner as it shall deem fair and equitable. For the
fiscal year ended December 31, 1995, the Growth/Value, Opportunity, Intrinsic
Value, Capital Growth, Balanced, Equity Index and International Equity
Portfolios' total expenses were .84%, .89%, .91%, .86%, .91%, .15% and 1.16%
(after fee waivers, if any) of their average net assets, respectively. The
Statement of Additional Information describes in more detail the fees and
expenses borne by the Trust.

OTHER INFORMATION

The Trust was organized as a Massachusetts business trust on April 21,
1987 under a Declaration of Trust which was amended and restated as of May 1,
1992. The Trust is a series fund having seventeen series of shares of
beneficial interest, each of which evidences an interest in a separate
investment portfolio. The Declaration of Trust permits the Board of Trustees
to issue an unlimited number of full and fractional shares and to create an
unlimited number of series of shares ("Series") representing interests in a
portfolio and an unlimited number of classes of shares within a Series. In
addition to the Portfolios described herein, the Trust offers the following
investment portfolios: the Woodward Money Market Fund, Government Fund,
Treasury Money Market Fund, Tax-Exempt Money Market Fund, Michigan Tax-Exempt
Money Market Fund, Intermediate Bond Fund, Bond Fund, Short Bond Fund,
Municipal Bond Fund and Michigan Municipal Bond Fund. The Trust has
established the following two distinct classes of shares within each
Portfolio described herein: Class I shares (Original Class) and Class A
shares (Special Class 1). A sales person and any other person or institution
entitled to receive compensation for selling or servicing shares may receive
different compensation with respect to different classes of shares in the
Series. Each share has $.10 par value, represents an equal proportionate
interest in the related Portfolio with other shares of the same class
outstanding, and is entitled to such dividends and distributions out of
the income earned on the assets belonging to such Portfolio as are declared
in the discretion of the Board of Trustees.

Shareholders are entitled to one vote for each full share held, and a
proportionate fractional vote for each fractional share held, and each Series
entitled to vote on a matter will vote thereon in the aggregate and not by
Series, except as otherwise expressly required by law or when the Board of
Trustees determines that the matter to be voted on affects only the interests
of shareholders of a particular Series. In addition, shareholders of each of
the Series have equal voting rights except that only shares of a particular
class within a Series are entitled to vote on matters affecting only that
class. Voting rights are not cumulative, and accordingly the holders of more
than 50% of the aggregate number of shares of all Trust portfolios may elect
all of the Trustees.

As of March 29, 1996, NBD held beneficially or of record
approximately 84.53%, 80.72%, 79.93%, 89.57%, 88.25%, 91.41% and 89.56% of the
outstanding shares of the Growth/Value, Opportunity, Intrinsic Value, Capital
Growth, Balanced, Equity Index and International Equity Portfolios,
respectively, and therefore may be considered to be a controlling person of
the Trust for purposes of the 1940 Act.

-42-

<PAGE>

-43-

<PAGE>

[ BACK COVER, COLUMN 1 ]

No person has been authorized to give
any information or to make any
representations not contained in this
Prospectus, or in the Portfolios'
Statement of Additional Information
incorporated herein by reference, in
connection with the offering made by
this Prospectus and, if given or
made, such information or
representations must not be relied
upon as having been authorized by the
Trust, Adviser or Sponsors and Co-
Distributors. This Prospectus does
not constitute an offering by the
Portfolios or by their Co-
Distributors, in any jurisdiction in
which such offering may not lawfully
be made.

TABLE OF CONTENTS Page

EXPENSE SUMMARY............................. 2
BACKGROUND.................................. 4
FINANCIAL HIGHLIGHTS........................ 5
INTRODUCTION................................ 12
PROPOSED REORGANIZATION..................... 12
INVESTMENT OBJECTIVES, POLICIES AND
RISK FACTORS............................ 12
OTHER INVESTMENT POLICIES................... 18
PURCHASE OF SHARES.......................... 32
REDEMPTION OF SHARES........................ 33
PERFORMANCE INFORMATION..................... 34
DIVIDENDS AND DISTRIBUTIONS................. 35
TAXES .................................... 35
MANAGEMENT.................................. 37
OTHER INFORMATION........................... 42

<PAGE>

[ BACK COVER, COLUMN 1 ]

CLASS I SHARES OF THE:

WOODWARD GROWTH/VALUE FUND

WOODWARD OPPORTUNITY FUND

WOODWARD INTRINSIC VALUE FUND

WOODWARD CAPITAL GROWTH FUND

WOODWARD BALANCED FUND

WOODWARD EQUITY INDEX FUND

WOODWARD INTERNATIONAL EQUITY FUND

THE WOODWARD FUNDS(R)

Prospectus
April 15, 1996

-44-

<PAGE>

24 Hour yield and performance information
Purchase and Redemption orders:
(800) 688-3350
- ------------------------------------------------------------------------------
The Woodward Funds (the "Trust") is offering in this Prospectus shares
in the following three investment portfolios (the "Portfolios"), each having
its own investment objective and policies as described in this Prospectus:

Class A shares of the:

Woodward Intermediate Bond Fund
Woodward Bond Fund
Woodward Short Bond Fund

This Prospectus sets forth concisely information that a prospective
investor should consider before investing. Investors should read this
Prospectus and retain it for future reference. Additional information about
the Trust, contained in a Statement of Additional Information, has been filed
with the Securities and Exchange Commission (the "SEC") and is available upon
request without charge by writing to The Woodward Funds at the address above.
The Statement of Additional Information bears the same date as this Prospectus
and is incorporated by reference in its entirety into the Prospectus.

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

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.
______________________________________________________________________________

INVESTMENT ADVISER:

NBD Bank

<PAGE>
EXPENSE SUMMARY

The Trust currently offers Class I shares (formerly known as
"Institutional Shares") and Class A shares (formerly known as "Retail Shares")
in each of the Woodward Intermediate Bond Fund ("Intermediate Bond
Portfolio"), Woodward Bond Fund ("Bond Portfolio") and Woodward Short Bond
Fund ("Short Bond Portfolio"). Class I shares are sold primarily to NBD and
its affiliated and correspondent banks acting on behalf of their respective
customers. Class A shares are sold to the general public primarily through
financial institutions such as banks, brokers and dealers. Class I shares are
offered in a separate Prospectus. Investors should call (800) 688-3350, a
Co-Distributor or their financial institutions if they would like to obtain
more information concerning Class I shares and/or Class A shares of the
Portfolios. The following table is provided to assist investors in
understanding the various costs and expenses that an investor will indirectly
incur as a beneficial owner of Class A shares in each of the Portfolios.
<TABLE>
<CAPTION>

Intermediate Bond Short Bond
Bond Portfolio(1) Portfolio(1) Portfolio(1)
--------------- ---------- ----------
<S> <C> <C> <C>
Shareholder Transaction Expenses
Maximum Sales Load
Imposed on Purchases....... 4.75% 4.75% 3.00%
(as a percentage of
offering price)
Sales Load
Imposed on Reinvested
Dividends................. None None None
Deferred Sales Load........... None None None
Redemption Fee................ None None None
Exchange Fee.................. None None None

Annual Operating Expenses
(as a percentage of
average net assets)
Management Fees............... .65% .65% .65%
12b-1 Fees(2)................. .008% .01% .004%
Shareholder Servicing
Fees(3).................... .25% .25% .25%
Other Expenses(4)
(before fee waivers
and/or expense
reimbursements)............ .062% .06% .156%
(after fee waivers
and/or expense
reimbursements)............ N/A N/A (.044)%
Total Operating Expenses
(before fee waivers
and/or expense
reimbursements)............ .97% .97% 1.06%
(after fee waivers
and/or expense
reimbursements)............ N/A N/A .86%
- ---------
<FN>
1. The expenses for each Portfolio have been restated to reflect
current expenses.

<PAGE>
plus interest. The Trust would stop accruing 12b-1 fees if, to the extent,
and for as long as, such limit would otherwise be exceeded.

3. The Trust has adopted a Shareholder Servicing Plan pursuant to
which the Trust may enter into agreements with institutions under which they
will render shareholder administrative support services for their customers
who beneficially own Class A shares in return for a fee of up to .25% per
annum of the value of such shares ("Servicing Fees"). For further information,
see "Shareholder Servicing Plan" and "Investment Adviser, Custodian and
Transfer Agent" under the heading "Management" in this Prospectus.

4. Credits or charges not reflected in the expense table may be
incurred directly by customers of financial institutions in connection with an
investment in the Portfolios.
</TABLE>

<TABLE>
<CAPTION>
Intermediate Bond Short Bond
Bond Portfolio Portfolio Portfolio
-------------- --------- ---------
<S> <C> <C> <C>
Example
You would pay the following
expenses on a $1,000
investment, assuming:
(1) a 5% annual return
and (2) redemption at the
end of each time period:
One Year................... $ 9.94 $ 9.94 $ 8.81
Three Years................ 31.03 31.03 27.54
Five Years................. 53.85 53.85 47.85
Ten Years.................. 119.40 119.40 106.41
Example
You would pay the following
expenses on a $1.00
investment, assuming
(1) a 5% annual return,
(2) redemption at the end
of each time period and
(3) the imposition of a
maximum sales load at the
beginning of the period:
One Year:.................. $ 56.97 $ 56.97 $ 38.55
Three Years:............... 77.06 77.06 56.72
Five Years:................ 98.79 98.79 76.42
Ten Years:................. 161.23 161.23 133.22
</TABLE>

THE FOREGOING SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES OR RATES OF RETURN. ACTUAL EXPENSES OR RATE OF RETURN MAY BE
GREATER OR LESSER THAN THOSE SHOWN.

The examples demonstrate the projected dollar amount of total
cumulative expenses that would be incurred over various periods with respect
to a hypothetical investment in Class A shares in each of the Portfolios,
based upon payment by the Portfolios of operating expenses at the respective
levels set forth in the expense table. For more complete descriptions of
Portfolio expenses, see "Investment Adviser, Custodian and Transfer Agent",
"Sponsors and Co-Distributors", "Shareholder Servicing Plan", "Service and
Distribution Plan" and "Trust Expenses" under the heading "Management" in this
Prospectus and the financial statements and related notes contained in the
Statement of Additional Information.

-3-

<PAGE>
BACKGROUND

-4-

<PAGE>
FINANCIAL HIGHLIGHTS

The tables below provide supplementary information to the Portfolios'
financial statements contained in their Statement of Additional Information
and set forth certain information concerning the historic investment results
of Portfolio shares. They present a per share analysis of how each Portfolio's
net asset value has changed during the periods presented. The tables have been
derived from the Portfolios' financial statements which have been audited by
Arthur Andersen LLP, the Trust's independent public accountants, whose report
thereon is contained in the Statement of Additional Information along with the
financial statements. The financial data included in these tables should be
read in conjunction with the financial statements and related notes included
in the Statement of Additional Information. Further information about the
performance of the Portfolios is available in annual reports to shareholders.
The Statement of Additional Information and annual reports to shareholders may
be obtained from the Trust free of charge by calling (800) 688-3350.

<TABLE>
<CAPTION>
Intermediate Bond Portfolio

June 1, 1991
(Commencement
of operations)
Year Ended Year Ended Year Ended Year Ended to
December 31, December 31, December 31, December 31, December 31,
1995 1994 1993 1992 1991
------------ ------------ ------------ ------------ --------------

<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period...................... $ 9.21 $10.41 $10.28 $10.55 $10.00
Income from investment
operations:
Net investment income.......... 0.59 0.56 0.59 0.71 0.40
Net realized and unrealized
gains (losses) on
investments.................. 1.16 (1.20) 0.26 (0.10) 0.57
------------ ------------ ----------- ------------ ------------
Total from investment
operations................... $ 1.75 $(0.64) $ 0.85 $ 0.61 $ 0.97
------------ ------------ ----------- ------------ ------------
Less distributions:
From net investment
income....................... $(0.59) $(0.55) $(0.59) $(0.71) $(0.40)
From realized
gains........................ (0.00) (0.01) ( 0.13) ( 0.17) ( 0.02)
------------ ------------ ----------- ------------ ------------
Total distributions............ $(0.59) $(0.56) ($0.72) ($0.88) ($0.42)
------------ ------------ ----------- ------------ ------------
Net asset value, end of
period......................... $10.37 $ 9.21 $10.41 $10.28 $10.55
============ ============ =========== ============ ============

Total return(b).................. 19.48% (6.31%) 8.41% 6.00% 16.62%(a)
Ratios/Supplemental Data
Net assets, end of period....... $405,309,939 $393,019,168 $429,789,85 $220,432,255 $130,367,032
Ratio of expenses to average
net assets..................... 0.73% 0.74% 0.74% 0.74% 0.75%(a)
Ratio of net investment income
to average net assets.......... 5.98% 5.73% 5.44% 6.91% 6.59%(a)
Portfolio turnover rate 36.47% 54.60% 92.80% 56.30% 7.38%
<FN>
- ---------
(a) Annualized for periods less than one year for comparability purposes.
Actual annual values may be less than or greater than those shown.

(b) Total returns as presented do not include any applicable sales load.
</TABLE>

-5-

Bond Portfolio

June 1, 1991
(Commencement
of operations)
Year Ended Year Ended Year Ended Year Ended to
December 31, December 31, December 31, December 31, December 31,
1995 1994 1993 1992 1991
----------- ------------ ------------ ------------ -------------

<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period...................... $ 9.01 $10.32 $10.25 $10.55 $10.00
Income from investment
operations:
Net investment income.......... 0.63 0.61 0.76 0.83 0.51
Net realized and unrealized
gains (losses) on
investments.................. 1.45 (1.31) 0.38 ( 0.17) 0.57
------------ ------------ ------------ ------------ ------------
Total from investment
operations................... $ 2.08 $(0.70) $ 1.14 $ 0.66 $ 1.08
------------ ------------ ------------ ------------ ------------
Less distributions:
From net investment
income....................... $(0.64) $(0.59) $(0.76) $(0.83) $(0.51)
From realized
gains........................ (0.00) (0.02) (0.31) (0.13) (0.02)
------------ ------------ ------------ ------------ ------------
Total distributions............ $(0.64) $(0.61) $(1.07) $(0.96) $(0.53)
------------ ------------ ------------ ------------ ------------
Net asset value, end of
period......................... $10.45 $ 9.01 $10.32 $10.25 $10.55
============ ============ ============ ============ ============
Total return(b).................. 23.75% (6.99%) 11.39% 6.56% 18.45%(a)
Ratios/Supplemental Data
Net assets, end of period....... $517,565,579 $427,168,395 $501,196,278 $321,758,333 $237,673,316
Ratio of expenses to average
net assets..................... 0.74% 0.74% 0.73% 0.73% 0.75%(a)
Ratio of net investment income
to average net assets.......... 6.39% 6.36% 7.20% 8.08% 8.44%(a)
Portfolio turnover rate 41.91% 75.67% 111.52% 90.45% 8.19%
<FN>
- ---------
(a) Annualized for periods less than one year for comparability
purposes. Actual annual values may be less than or greater than those shown.

(b) Total returns as presented do not include any applicable sales
load.
</TABLE>

-6-

<PAGE>
<TABLE>
<CAPTION>
Short Bond Portfolio

September 17, 1994
(Commencement
Year Ended of Operations) to
December 31, December 31,
------------ ------------------
1995 1994

<S> <C> <C>
Net asset value, beginning
of period...................... $ 9.84 $10.00
Income from investment
operations:
Net investment income.......... 0.58 0.17
Net realized and unrealized
gains (losses) on
investments.................. 0.39 (0.16)
------------ -----------
Total from investment
operations................... $ 0.97 $ 0.01
------------ -----------
Less distributions:
From net investment
income....................... $(0.58) $(0.17)
From realized
gains........................ (0.00) 0.00
------------ -----------
Total distributions............ $(0.58) $(0.17)
------------ -----------
Net asset value, end of
period......................... $10.23 $ 9.84
============ ===========
Total return(b).................. 10.07% 0.21%(a)
Ratios/Supplemental Data
Net assets, end of period....... $163,336,885 $64,239,163
Ratio of expenses to average
net assets..................... 0.75% 0.75%(a)
Ratio of net investment income
to average net assets.......... 5.74% 5.92%(a)
Ratio of expenses to average
net assets without fee
waivers/reimbursed expenses..... 0.81% 0.93%(a)
Ratio of net investment income
to average net assets without
fee waivers/reimbursed expenses. 5.68% 5.74%(a)
Portfolio turnover rate.......... 30.94% 10.20%
<FN>
- ---------

(a) Annualized for periods less than one year for comparability
purposes. Actual annual values may be less than or greater than those shown.

(b) Total return as presented does not include any applicable sales
load.
</TABLE>

-7-

<PAGE>
INTRODUCTION

The Trust is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"). The
Trust currently consists of seventeen investment portfolios, each of which
consists of a separate pool of assets with separate investment objective and
policies. However, only the Class A shares of the Intermediate Bond, Bond and
Short Bond Portfolios are offered pursuant to this Prospectus. Each such
Portfolio is classified as a diversified investment portfolio under the 1940
Act.

PROPOSED REORGANIZATION

INVESTMENT OBJECTIVES, POLICIES AND RISK FACTORS

Intermediate Bond Portfolio

The investment objective of the Intermediate Bond Portfolio is to
maximize total rate of return while providing relative stability of principal
by investing predominantly in intermediate-term debt securities. While the
Portfolio may purchase securities with maturities or average lives of up to 15
years, during normal market conditions, its average weighted portfolio
maturity is expected to be between 3 and 6 years.

Bond Portfolio

The investment objective of the Bond Portfolio is to maximize total
rate of return by investing predominantly in intermediate and long-term debt
securities. During normal market conditions, the Portfolio's average weighted
portfolio maturity is expected to be between 6 and 12 years.

Short Bond Portfolio

-8-

<PAGE>

The investment objective of the Short Bond Portfolio is to maximize
total rate of return while providing relative stability of principal. While
the Portfolio may purchase securities with maturities or average lives of up
to 10 years, during normal market conditions, its average weighted portfolio
maturity will be limited to a maximum of 3 years.

Investment Policies Applicable to the Portfolios

The two components of total rate of return consist of current income
and capital appreciation. The Portfolios are more likely to exceed the
performance level of equity funds in the market with respect to current
income; however, it is more probable that the capital appreciation performance
of equity funds will surpass that of the Portfolios.

In pursuing their respective investment objectives, the Portfolios may
invest in the following debt securities: (i) obligations issued or guaranteed
by the U.S. Government, its agencies or instrumentalities; (ii) corporate,
bank and commercial obligations; (iii) securities issued or guaranteed by
foreign governments, their agencies or instrumentalities; (iv) securities
issued by supranational banks; (v) mortgage backed securities; and (vi)
securities representing interests in pools of assets. Obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities may
include mortgage backed securities, as well as "stripped securities" (both
interest-only and principal-only) and custodial receipts for Treasury
securities. The Portfolios may also invest in options and futures contracts
and related options. In addition, each Portfolio may invest in high quality
short-term obligations. For further information concerning these securities,
see "Other Investment Policies" below.

Each of the Portfolios invests at least 65% of the total value of its
assets in obligations, including mortgage backed securities, which are
investment grade or are issued or guaranteed by the U.S. Government, its
agencies or instrumentalities. Most obligations acquired by the Portfolios
will be issued by companies or governmental entities located within the United
States. Up to 15% of the total assets of each Portfolio may, however, be
invested in dollar denominated debt obligations of foreign issuers.

The debt securities in which the Portfolios may invest will be rated
investment grade, or if unrated, will be deemed by the Adviser to be
comparable in quality at the time of purchase to instruments that are so
rated. By so restricting their investments, the Portfolios' ability to
maximize total rate of return will be limited.

Although fixed income securities acquired by the Intermediate Bond and
Bond Portfolios will normally have intermediate or long-term maturities,
during temporary defensive periods the Portfolios may invest without
limitation in high quality short-term investments.

The Adviser manages the Portfolios based on anticipated interest rate
changes and the use of active management strategies such as sector rotation,
intra-sector adjustments and yield curve and convexity considerations. In use
of such active management strategies, the Adviser seeks value in investment
grade fixed income securities. Sector rotation involves the Adviser selecting
among different economic or industry sectors based upon apparent or relative
attractiveness. Thus at times a sector offers yield advantages relative to
other sectors. An intra-sector adjustment occurs when the Adviser determines
to select a particular issue within a sector. Yield curve considerations
involve the Adviser attempting to compare the relationship between time to
maturity and yield to maturity in order to identify the relative value in the
relationship. Convexity considerations consist of the Adviser seeking
securities that rise in price more quickly, or decline in price less quickly,
than the typical security

-9-

<PAGE>
of that price risk level and therefore enable the Adviser to obtain an
additional return when interest rates change dramatically.

In acquiring particular portfolio securities for a Portfolio, the
Adviser will consider, among other things, historical yield relationships
between private and governmental debt securities, intermarket yield
relationships among various industry sectors, current economic cycles and the
attractiveness and creditworthiness of particular issuers. Depending upon the
Adviser's analysis of these and other factors, a Portfolio's holdings of
issues in particular industry sectors may be overweighted when compared to the
relative industry weightings in related recognized indices. The value of the
Portfolios can be expected to vary inversely with changes in prevailing
interest rates.

OTHER INVESTMENT POLICIES

Ratings

If not rated as commercial paper, debt obligations acquired by the
Portfolios will be rated investment grade at the time of purchase, i.e.,
obligations rated AAA, AA, A or BBB by Standard & Poor's Rating Group,
Division of McGraw Hill ("S&P"), Fitch Investors Service ("Fitch"), Duff &
Phelps Credit Co. ("Duff") or IBCA, Inc. ("IBCA") or Aaa, Aa, A or Baa by
Moody's Investors Service, Inc. ("Moody's") (each a "Rating Agency") or be
unrated but deemed by the Adviser to be comparable in quality at the time of
purchase to instruments that are so rated. Obligations rated in the lowest of
the top four rating categories (Baa by Moody's, BBB by S&P or Fitch or IBCA)
are considered to have less capacity to pay interest and repay principal and
have certain speculative characteristics. The debt ratings are described in
the Statement of Additional Information.

Short-Term Investments

Each Portfolio may hold short-term U.S. Government obligations, "high
quality" money market instruments such as certificates of deposit, bankers'
acceptances and time deposits (i.e. those rated at the time of purchase within
the two highest rating categories or which are unrated at such time but are
deemed by the Adviser to be of comparable quality), repurchase agreements,
reverse repurchase agreements, short-term obligations issued by state and
local governmental issuers which carry yields that are competitive with those
of other types of high quality money market instruments, commercial paper,
notes, other short-term obligations, variable rate master demand notes, and
cash, pending investment, to meet anticipated redemption requests or if, in
the opinion of the Adviser, suitable bonds or other fixed income securities in
which the Portfolios invest are unavailable. Such investments may be in such
proportions as, in the opinion of the Adviser, existing circumstances may
warrant, and may include obligations of foreign banks and foreign branches of
U.S banks. The Portfolios may also invest their cash balances in securities
issued by other investment companies which invest in high-quality, short-term
debt securities. These short- term investments are described in greater detail
in the Statement of Additional Information.

U.S. Government Obligations

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<PAGE>
Portfolio may also invest in interests in the foregoing securities, including
collateralized mortgage obligations guaranteed by a U.S. Government agency or
instrumentality, and in Government-backed trusts which hold obligations of
foreign governments that are guaranteed or backed by the full faith and credit
of the United States.

Stripped Government Obligations

The Intermediate Bond, Bond and Short Bond Portfolios may purchase
Treasury receipts and other "stripped" securities that evidence ownership in
either the future interest payments or the future principal payments on U.S.
Government obligations. These participations, which may be issued by the U.S.
Government (or a U.S. Government agency or instrumentality) or by private
issuers such as banks and other institutions, are issued at a discount to
their "face value," and may include stripped mortgage backed securities
("SMBS"), which are derivative multi-class mortgage securities. Stripped
securities, particularly SMBS, may exhibit greater price volatility than
ordinary debt securities because of the manner in which their principal and
interest are returned to investors.

Custodial Receipts for Treasury Securities

The Portfolios may purchase participations in trusts that hold U.S.
Treasury securities (such as TIGRs and CATs) where the trust participations
evidence ownership in either the future interest payments or the future
principal payments on the U.S. Treasury obligations. These participations are
normally issued at a discount to their "face value," and may exhibit greater
price volatility than ordinary debt securities because of the manner in which
their principal and interest are returned to investors.

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<PAGE>
Repurchase and Reverse Repurchase Agreements

Lending Portfolio Securities

To increase income or offset expenses, each Portfolio may lend its
portfolio securities to financial institutions such as banks and
broker-dealers in accordance with the investment limitations described below.
Agreements would require that the loans be continuously secured by collateral
equal at all times in value to at least the market value of the securities
loaned plus accrued interest. Collateral for such loans could include cash or
securities of the U.S. Government, its agencies or instrumentalities. Such
loans will not be made if, as a result, the aggregate of all outstanding loans
of a particular Portfolio exceeds one-third of the value of its total assets.
Loans of securities involve risks of delay in receiving additional collateral
or in recovering the securities loaned or possible loss of rights in the
collateral should the borrower of the securities become insolvent. Loans will
be made only to borrowers that provide the requisite collateral comprised of
liquid assets and when, in the Adviser's judgment, the income to be earned
from the loan justifies the attendant risks.

Illiquid Securities

In accordance with their fundamental investment limitation described
below, the Intermediate Bond and Bond Portfolios will not knowingly invest
more than 10% and the Short Bond Portfolio will not knowingly invest more than
15% of the value of their respective total assets in securities that are
illiquid. Securities having legal or contractual restrictions on resale or no
readily available market, and instruments (including repurchase agreements,
variable and floating rate instruments and time deposits) that do not provide
for payment to the Portfolios within seven days after notice are subject to
this limitation. Securities that have legal or contractual restrictions on
resale but have a readily available market are not deemed to be illiquid for
purposes of this limitation.

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<PAGE>
Rule 144A is a recent development, and it is not possible to predict how this
market will develop. The Board of Trustees will carefully monitor any
investments by a Portfolio in these securities.

Borrowings

Asset Backed Securities

Asset Backed Securities held by the Portfolios arise through the
grouping by governmental, government-related and private organizations of
loans, receivables and other assets originated by various lenders, as
described below.

Mortgage Backed Securities. Asset Backed Securities acquired by the
Portfolios consist of both mortgage and non-mortgage backed securities.
Mortgage backed securities represent an ownership interest in a pool of
mortgages, the interest on which is in most cases issued and guaranteed by an
agency or instrumentality of the U.S. Government, although not necessarily by
the U.S. Government itself. Mortgage backed securities include collateralized
mortgage obligations and mortgage pass-through certificates.

Collateralized mortgage obligations ("CMOs") provide the holder with a
specified interest in the cash flow of a pool of underlying mortgages or other

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<PAGE>
mortgage backed securities. Issuers of CMOs ordinarily elect to be taxed as
pass-through entities known as real estate mortgage investment conduits
("REMICs"). CMOs are issued in multiple classes, each with a specified fixed
or floating interest rate and a final distribution date. The relative payment
rights of the various CMO classes may be structured in a variety of ways. In
most cases, however, payments of principal are applied to the CMO classes in
the order of their respective stated maturities, so that no principal payments
will be made on a CMO class until all other classes having an earlier stated
maturity date are paid in full. These multiple class securities may be issued
or guaranteed by U.S. Government agencies or instrumentalities, including the
Government National Mortgage Association ("GNMA"), Federal National Mortgage
Association ("FNMA") and Federal Home Loan Mortgage Corporation ("FHLMC"), or
issued by trusts formed by private originators of, or investors in, mortgage
loans. Classes in CMOs which the Portfolio may hold are known as "regular"
interests. CMOs also issue "residual" interests, which in general are junior
to and more volatile than regular interests. The Portfolios do not intend to
purchase residual interests.

Non-Mortgage Backed Securities. The Portfolios may also invest in non-
mortgage backed securities including interests in pools of receivables, such
as motor vehicle installment purchase obligations and credit card receivables.
Such securities are generally issued as pass-through certificates, which
represent undivided fractional ownership interests in the underlying pools of
assets. Such securities may also be debt instruments, which are also known as
collateralized obligations and are generally issued as the debt of a special
purpose entity organized solely for the purpose of owning such assets and
issuing such debt. Non-mortgage backed securities are not issued or guaranteed
by the U.S. Government or its agencies or instrumentalities.

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<PAGE>
Variable and Floating Rate Instruments

The Portfolios may invest in leveraged inverse floating rate debt
instruments ("inverse floaters"). The interest rate of an inverse floater
resets in the opposite direction from the market rate of interest to which it
is indexed. An inverse floater may be considered to be leveraged to the extent
that its interest rate varies by a magnitude that exceeds the magnitude of the
change in the index rate of interest. The higher degree of leverage inherent
in inverse floaters is associated with greater volatility in their market
values.

The absence of an active secondary market with respect to particular
variable and floating rate instruments could make it difficult for a Portfolio
to dispose of the instruments if the issuer defaulted on its payment
obligation or during periods that the Portfolio is not entitled to exercise
demand rights, and the Portfolio could, for these or other reasons, suffer a
loss with respect to such instruments. Variable and floating rate instruments
(including inverse floaters) will be subject to the Portfolio's limitation on
illiquid investments when a Portfolio may not demand payment of the principal
amount within seven days and a reliable trading market is absent. See
"Illiquid Securities."

Zero Coupon Obligations

Each Portfolio may invest in zero coupon obligations which are
discount debt obligations that do not make periodic interest payments although
income is generally imputed to the holder on a current basis. Such obligations
may have higher price volatility than those which require the payment of
interest periodically. The Adviser will consider the liquidity needs of the
Portfolios when any investment in zero coupon obligations is made.

Futures Contracts and Related Options

The Portfolios may trade futures contracts and options on futures
contracts in U.S. domestic markets, such as the Chicago Board of Trade and the
International Monetary Market of the Chicago Mercantile Exchange. They may
purchase and sell futures contracts which obligate a Portfolio to take or make
delivery of fixed income securities at maturity, commonly known as interest
rate futures contracts.

A Portfolio may sell a futures contract in order to offset an expected
decrease in the value of its portfolio that might otherwise result from a
market decline. A Portfolio may do so either to hedge the value of its
securities portfolio as a whole, or to protect against declines occurring
prior to sales of securities in the value of the securities to be sold. In
addition, a Portfolio may utilize futures contracts in anticipation of changes
in the composition of its holdings.

The Portfolios may also purchase options on futures contracts and may
purchase and write put and call options on bond indices listed on U.S.
exchanges or traded in the over-the-counter market. A futures option gives the
holder, in return for the premium paid, the right to buy (call) from or sell
(put) to the writer of the option a futures contract at a specified price at
any time during the period of the option.

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<PAGE>
The Portfolios' commodities transactions must constitute bona fide
hedging or other permissible transactions pursuant to regulations promulgated
by the Commodities and Futures Trading Commission ("CFTC"). In addition, a
Portfolio may not engage in such transactions if the sum of the amount of
initial margin deposits and premiums paid for unexpired commodity options,
other than for bona fide hedging transactions, would exceed 5% of the
liquidation value of its assets, after taking into account unrealized profits
and unrealized losses on such contracts it has entered into; provided,
however, that in the case of an option that is in-the-money at the time of
purchase, the in-the-money amount may be excluded in calculating the
percentage limitation. Pursuant to SEC requirements, the Portfolios may be
required to segregate cash or high quality money market instruments in
connection with their commodities transactions in an amount generally equal to
the value of the underlying commodity. The Trust intends to comply with the
regulations of the CFTC exempting the Portfolios from registration as a
"commodity pool operator."

For a more detailed description of futures contracts and related
options, see Appendix B to the Statement of Additional Information.

Options

Each Portfolio may purchase and sell put and call options listed on a
national securities exchange and issued by the Options Clearing Corporation
for hedging purposes. Such transactions may be effected on a principal basis
with primary reporting dealers in U.S. Government securities in an amount not
exceeding 5% of a Portfolio's net assets, as described further in the
Statement of Additional Information. Such options may relate to particular
securities or to various bond indices. Purchasing options is a specialized
investment technique which entails a substantial risk of a complete loss of
the amounts paid as premiums to the writer of the option.

A Portfolio may purchase and sell put options on portfolio securities
at or about the same time that they purchase the underlying security or at a
later time. By buying a put, a Portfolio limits its risk of loss from a
decline in the market value of the security until the put expires. Any
appreciation in the value of and yield otherwise available from the underlying
security, however, will be partially offset by the amount of the premium paid
for the put option and any related transaction costs. Call options may be
purchased by a Portfolio in order to acquire the underlying security at a
later date at a price that avoids any additional cost that would result from
an increase in the market value of the security. A Portfolio may also purchase
call options to increase its return to investors at a time when the call is
expected to increase in value due to anticipated appreciation of the
underlying security. Prior to its expiration, a purchased put or call option
may be sold in a closing sale transaction (a sale by a Portfolio, prior to the
exercise of an option that it has purchased, of an option of the same series),
and profit or loss from the sale will depend on whether the amount received is
more or less than the premium paid for the option plus the related transaction
costs.

In addition, each Portfolio may write covered call and secured put
options. A covered call option means that a Portfolio owns or has the right to
acquire the underlying security subject to call at all times during the option
period. A secured put option means that a Portfolio maintains in a segregated
account with its custodian cash or U.S. Government securities in an amount not
less than the exercise price of the option at all times during the option
period. Such options will be listed on a national securities exchange and
issued by the Options Clearing Corporation and may be effected on a principal
basis with primary reporting dealers in U.S. Government securities. The
aggregate value of the securities subject to options written by the
Intermediate Bond or Bond Portfolio will not exceed 25% of the value of its
net assets. In order to close out an option position prior to maturity, a
Portfolio may enter into a "closing purchase transaction" by purchasing a call
or put option (depending upon the position

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<PAGE>
being closed out) on the same security with the same exercise price and
expiration date as the option which it previously wrote.

For additional information relating to option trading practices,
including particular risks thereof, see the Statement of Additional
Information.

Risk Factors Associated with Futures and Related Options

To the extent a Portfolio is engaging in a futures transaction as a
hedging device, due to the risk of an imperfect correlation between securities
in its portfolio that are the subject of a hedging transaction and the futures
contract used as a hedging device, it is possible that the hedge will not be
fully effective in that, for example, losses on the portfolio securities may
be in excess of gains on the futures contract or losses on the futures
contract may be in excess of gains on the portfolio securities that were the
subject of the hedge. In futures contracts based on indices, the risk of
imperfect correlation increases as the composition of the Portfolio varies
from the composition of the index. In an effort to compensate for the
imperfect correlation of movements in the price of the securities being hedged
and movements in the price of futures contracts, the Portfolio may buy or sell
futures contracts in a greater or lesser dollar amount than the dollar amount
of the securities being hedged if the historical volatility of the futures
contract has been less or greater than that of the securities. Such "over
hedging" or "under hedging" may adversely affect the Portfolio's net
investment results if market movements are not as anticipated when the hedge
is established.

Successful use of futures by a Portfolio also is subject to the
Adviser's ability to predict correctly movements in the direction of
securities prices, interest rates and other economic factors. For example, if
the Portfolio has hedged against the possibility of a decline in the market
adversely affecting the value of securities held in its portfolio and prices
increase instead, the Portfolio will lose part or all of the benefit of the
increased value of securities which it has hedged because it will have
offsetting losses in its futures positions. In addition, in such situations,
if the Portfolio has insufficient cash, it may have to sell securities to meet
daily variation margin requirements. Such sales of securities may, but will
not necessarily, be at increased prices which reflect the rising market. The
Portfolio may have to sell securities at a time when it may be disadvantageous
to do so.

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<PAGE>
payments of variation margin. In such circumstances, an increase in the value
of the portion of the portfolio being hedged, if any, may offset partially or
completely losses on the futures contract.

Risk Factors Associated with Derivative Instruments

The Portfolios may purchase certain "derivative" instruments.
"Derivative" instruments are instruments that derive value from the
performance of underlying assets, interest or currency exchange rates, or
indices, and include (but are not limited to) futures contracts, options,
forward currency contracts and structured debt obligations (including
collateralized mortgage obligations and other types of asset backed
securities, "stripped" securities and various floating rate instruments,
including "inverse" floaters).

Derivative instruments present, to varying degrees, market risk that
the performance of the underlying assets, exchange rates or indices will
decline; credit risk that the dealer or other counterparty to the transaction
will fail to pay its obligations; volatility and leveraging risk that, if
interest or exchange rates change adversely, the value of the "derivative"
instrument will decline more than the assets, rates or indices on which it is
based; liquidity risk that a Portfolio will be unable to sell a "derivative"
instrument when it wants because of lack of market depth or market disruption;
pricing risk that the value of a "derivative" instrument (such as an option)
will not correlate exactly to the value of the underlying assets, rates or
indices on which it is based; and operations risk that loss will occur as a
result of inadequate systems and controls, human error or otherwise. Some
"derivative" instruments are more complex than others, and for those
instruments that have been developed recently, data are lacking regarding
their actual performance over complete market cycles.

The Adviser will evaluate the risks presented by the "derivative"
instruments purchased by the Portfolios, and will determine, in connection
with its day-to-day management of the Portfolios, how they will be used in
furtherance of the Portfolios' investment objectives. It is possible, however,
that the Adviser's evaluations will prove to be inaccurate or incomplete and,
even when accurate and complete, it is possible that the Portfolios will,
because of the risks discussed above, incur loss as a result of their
investments in "derivative" instruments.

Foreign Securities

The Portfolios may invest in dollar-denominated obligations of foreign
issuers. Such investments may include both obligations of foreign corporations
and banks, as well as obligations of foreign governments and their political
subdivisions. Investments in foreign securities, whether made directly or
indirectly, involve certain inherent risks, such as political or economic
instability of the issuer or the country of issue, the difficulty of
predicting international trade patterns, changes in exchange rates of foreign
currencies and the possibility of adverse changes in investment or exchange
control regulations. There may be less publicly available information about a
foreign company than about a U.S. company. Listed foreign companies generally
are not subject to uniform accounting, auditing and financial reporting
standards comparable to those applicable to domestic companies. Further,
foreign stock markets are generally not as developed or efficient as those in
the U.S. and in most foreign markets volume and liquidity are less than in the
U.S. Fixed commissions on foreign stock exchanges are generally higher than
the negotiated commissions on U.S. exchanges, and there is generally less
government supervision and regulation of foreign stock exchanges, brokers and
listed companies than in the U.S. With respect to certain foreign countries,
there is a possibility of expropriation or confiscatory taxation limitations
on the removal of funds or other assets or diplomatic developments that could
affect investment within those countries. Because of these and other factors,
securities of foreign companies acquired by

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<PAGE>
a Portfolio may be subject to greater fluctuation in price than securities of
domestic companies.

Supranational Bank Obligations

The Portfolios may invest in obligations of supranational banks.
Supranational banks are international banking institutions designed or
supported by national governments to promote economic reconstruction,
development or trade between nations (e.g., the World Bank). Obligations of
supranational banks may be supported by appropriated but unpaid commitments of
their member countries and there is no assurance that these commitments will
be undertaken or met in the future.

When-Issued Purchases and Forward Commitments

Portfolio Turnover

Generally, the Portfolios will purchase securities for capital
appreciation or investment income, or both, and not for short-term trading
profits. However, a Portfolio may sell a portfolio investment soon after its
acquisition if the Adviser believes that such a disposition is consistent with
or in furtherance of the Portfolio's investment objective. Portfolio
investments may be sold for a variety of reasons, such as more favorable
investment opportunities or other circumstances. As a result, the Portfolios
are likely to have correspondingly greater brokerage commissions and other
transaction costs which are borne indirectly by shareholders. Portfolio
turnover may also result in the realization of substantial net capital gains.
(See "Taxes-Federal" in the Prospectus and "Additional Information Concerning
Taxes" in the Statement of Additional Information.) While it is not possible
to accurately predict portfolio turnover rates, the annual turnover rates for
the Intermediate Bond, Bond, and Short Bond Portfolios are not expected to
exceed 300%, 400% and 300%, respectively.

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<PAGE>
Investment Limitations

No Portfolio may:

2. Purchase any securities which would cause 25% or more of the value
of the Portfolio's total assets at the time of purchase to be invested in the
securities of one or more issuers conducting their principal business
activities in the same industry, provided that (a) there is no limitation with
respect to obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities and repurchase agreements secured by such
instruments, (b) wholly-owned finance companies will be considered to be in
the industries of their parents if their activities are primarily related to
financing the activities of the parents, and (c) utilities will be divided
according to their services, for example, gas, gas transmission, electric and
gas, electric and telephone will each be considered a separate industry.

In addition, the Intermediate Bond and Bond Portfolios may not invest
more than 10% of their respective total assets in illiquid investments. The
Short Bond Portfolio may not invest more than 15% of its total assets in
illiquid investments. See "Illiquid Securities" above.

In order to permit the sale of a Portfolio's shares in certain states,
the Portfolios may make commitments more restrictive than the investment
policies and

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<PAGE>
limitations described above. Should a Portfolio determine that any such
commitment is no longer in the best interests of the Portfolio, it will revoke
the commitment by terminating sales of its shares in the state involved.

PURCHASE OF SHARES
In General

Financial institutions may impose different minimum investment and
other requirements on their customers and may charge additional fees in
connection with the establishment of accounts with the institutions and
purchase and redemption of Class A shares. Persons wishing to purchase Class A
shares through their accounts at an institution or a Co-Distributor should
contact the institution or Co-Distributor directly for appropriate
instructions and fee information. In addition, certain financial institutions
may enter into shareholder servicing agreements with the Trust whereby they
would perform various administrative support services for their customers who
are the beneficial owners of Class A shares in return for fees from the
Portfolios. See "Shareholder Servicing Plan" under the heading "Management" in
this Prospectus.

Purchase Procedures

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<PAGE>
amount of the investment, the name of the Portfolio and the account number in
which the investment is to be made. If any check used for investment in an
account does not clear, the order will be cancelled and notice thereof will be
given; in such event the account will be responsible for any loss to the Trust
as well as a $15 fee imposed by the Transfer Agent.

Purchase orders which are accompanied by payment (by check or wire
transfer) and received by the Transfer Agent in proper form on a Business Day
(as defined below) prior to the close of the New York Stock Exchange are
priced at the public offering price (i.e. net asset value plus the applicable
sales load set forth below) of the particular portfolio determined on that
Business Day. Purchase orders which are received by the Transfer Agent after
the close of trading on the Exchange on a Business Day or on non-Business Days
will be executed as of the determination of net asset value on the next
Business Day.

Net Asset Value and Pricing of Shares

The net asset value of each Portfolio for purposes of pricing purchase
and redemption orders is determined as of the close of trading on the floor
of the New York Stock Exchange ("Exchange") (currently 4:00 p.m., New York
Time), on each day the Exchange is open for business ("Business Day") except:
(i) those holidays which the Exchange observes (currently New Year's Day,
Presidents' Day, Good Friday, Memorial Day (observed), Independence Day, Labor
Day, Thanksgiving Day and Christmas Day); and (ii) those Business Days on
which the Exchange closes prior to the close of its regular trading
hours ("Early Closing Time"), in which event the net asset value of
each Portfolio will be determined and its shares will be priced
as of such Early Closing Time. Net asset value per Class I share of
a Portfolio is calculated by dividing the value of all securities
and other assets belonging to the Portfolio allocable to that
Class I, less the liabilities charged to that Class I, by the number
of the outstanding shares of such Class I.

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<PAGE>
believes such prices reflect the fair market value of such securities. The
prices provided by pricing services take into account institutional size
trading in similar groups of securities and any developments related to
specific securities. For valuation purposes, the value of assets and
liabilities expressed in foreign currencies will be converted to U.S. dollars
equivalent at the prevailing market rate on the day of valuation. A
Portfolio's open futures contracts will be "marked-to-market."

PUBLIC OFFERING PRICE

The public offering price for Class A shares of the Intermediate Bond
and Bond Portfolios is the sum of the net asset value per share of the Class A
shares being purchased plus a sales load as follows:
<TABLE>
<CAPTION>
Total Sales Load Reallowance to Institutions
------------------------------- ---------------------------
As a % of As a % of As a % of
offering price net asset value offering price
Amount of Transaction per share per share per share
- --------------------- -------------- --------------- --------------
<S> <C> <C> <C>
Less than $49,999.................... 4.75 4.99 4.25
$50,000 to $99,999................... 4.25 4.44 3.75
$100,000 to $249,999................. 3.50 3.63 3.00
$250,000 to $499,999................. 2.50 2.56 2.00
$500,000 to $999,999................. 2.00 2.04 1.75
$1,000,000 and over.................. .00 .00 .00
</TABLE>
The public offering price for Class A shares of the Short Bond
Portfolio is the sum of the net asset value per share of the Class A
shares being purchased plus a sales load as follows:

<TABLE>
<CAPTION>
Total Sales Load Reallowance to Institutions
-------------------------------- ---------------------------

As a % of As a % of As a % of
offering price net asset value offering price
Amount of Transaction per share per share per share
- --------------------- -------------- --------------- --------------
<S> <C> <C> <C>
Less than $99,999.................... 3.00 3.09 2.50
$100,000 to $249,999................. 2.25 2.30 2.00
$250,000 to $499,999................. 1.75 1.78 1.50
$500,000 to $999,999................. 1.25 1.27 1.00
$1,000,000 and over.................. .00 .00 .00
</TABLE>

The sales load described above will not be applicable to purchases of
Class A shares by: (1) any bank, trust company or other institution acting on
behalf of its fiduciary customer accounts or any other account maintained by
its trust department (including a pension, profit-sharing or other employee
benefit trust created pursuant to a plan qualified under Section 401 of the
Internal Revenue Code of 1986, as amended); (2) any individual, trust,
corporation or other person where the shares are acquired in connection with
the distribution of assets held in any account referred to in (l) above with
NBD or its affiliates; (3) individual retirement accounts maintained by the
trust division of NBD or of its affiliates; (4) current and retired directors,
officers and employees of NBD or any of its affiliates; (5) the trustees,
former trustees and officers of the Trust; (6) broker/dealers which have
entered into an agreement with a Co-Distributor or the Trust pursuant to the
Trust's Service and Distribution Plan or Shareholder Servicing Plan and their
representatives purchasing for their own accounts; and (7) spouses, children,
grandchildren, siblings, parents, grandparents and in-laws of individuals
referred to in paragraphs (4), (5) and (6) above. An application to qualify
for such purchases of Class A shares (an "NAV Account Application") may be
obtained from the Transfer Agent by calling (800) 688-3350. In addition, no
sales load is charged on the reinvestment of dividends or distributions, or in
connection with certain share exchanges

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described below under "Shareholder Services -- Exchange Privilege." The Trust
may terminate any exemption from the sales load by providing notice in the
Prospectus, but any such termination would only affect future purchases of
Class A shares. The reallowance to Institutions may be changed from time to
time.

From time to time, the Co-Distributors, at their expense, may offer
additional promotional incentives to dealers.

Quantity Discounts

An investor may be entitled to reduced sales charges through Rights of
Accumulation, a Letter of Intent or a combination of investments, even if the
investor does not wish to make an investment of a size that would normally
qualify for a quantity discount.

An investor must notify his institution or the Transfer Agent at the time
of purchase whenever a quantity discount applies. Upon such notification, the
investor will receive the lowest applicable sales charge. Quantity discounts
may be modified or terminated at any time and are subject to confirmation of
an investor's holdings. For more information about quantity discounts, an
investor should contact his institution or call (800) 688-3350.

Right of Accumulation. A reduced sales load applies to any purchase of
Class A shares of the Portfolios and any other portfolio which is currently
offered or may be offered in the future by the Trust that is sold with a sales
load ("Eligible Portfolios") where an investor's then current aggregate
investment is $50,000 or more in the case of the Intermediate Bond and Bond
Portfolios and $100,000 or more in the case of the Short Bond Portfolio.
"Aggregate investment" means the total of: (a) the dollar amount of the then
current purchase; and (b) the value (based on current net asset value) of
Class A shares of Eligible Portfolios on which a sales load has been paid
(including shares acquired through reinvestment of dividends or distributions
on shares that were subject to a sales load). If, for example, an investor
beneficially owns Class A shares of the Intermediate Bond Portfolio with an
aggregate current value of $49,500 and subsequently purchases additional Class
A shares having a current value of $1,000, the load applicable to the
subsequent purchase would be reduced to 4.25% of the offering price.
Similarly, with respect to each subsequent investment, the current value of
all Class A shares of Eligible Portfolios that are beneficially owned by the
investor at the time of investment may be combined to determine the applicable
sales load.

Letter of Intent. By signing a Letter of Intent form (available from his
institution or the Transfer Agent) an investor becomes eligible for the
reduced sales load applicable to the total number of Eligible Portfolio Class
A shares purchased in a thirteen-month period (net of redemptions) pursuant to
the terms and under the conditions set forth in the Letter of Intent. To
compute the applicable sales load, the offering price of Class A shares an
investor beneficially owns (on the date of submission of the Letter of Intent)
in any Eligible Portfolio that may be used toward "Right of Accumulation"
benefits described above may be used as a credit toward completion of the
Letter of Intent. However, the reduced sales load will be applied only to new
purchases.

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<PAGE>
load actually paid and the sales load applicable to the total purchases. If
such remittance is not received within thirty days, the Transfer Agent, as
attorney-in-fact pursuant to the terms of the Letter of Intent, will redeem
an appropriate number of Class A shares held in escrow to realize the
difference. Signing a Letter of Intent does not bind an investor to purchase
the full amount indicated at the sales load in effect at the time of signing,
but an investor must complete the intended purchase to obtain the reduced
sales load.

REDEMPTION OF SHARES
In General

Redemption orders are effected at the net asset value next determined
after receipt by the Transfer Agent of a proper notice of redemption in
accordance with the procedures set forth below.

Redemption Procedures

Shareholders of record may redeem shares in any amount by calling
(800) 688-3350 (provided they have made the appropriate election on the account
application) or by sending a written request to The Woodward Funds, c/o NBD
Bank, P.O. Box 7058, Troy, Michigan 48007-7058. Written requests to redeem
shares having a net asset value of more than $50,000 must have all signatures
of the registered owner(s) or their authorized legal representative guaranteed
by a commercial bank or trust company which is a member of the Federal Reserve
System or FDIC, a member firm of a national securities exchange or a savings
and loan association. A signature guaranteed by a savings bank or notarized by
a notary public is not acceptable. A signature guarantee will also be required
for a redemption request (in any amount) if the address of record for the
account has been changed within the previous 15 days or which requests that
the proceeds be paid to an account other than the one preauthorized on the
application, a payee or payees other than the registered owners of the
account, or an address other than the address of record. The Trust may require
additional supporting documents for redemptions made by corporations,
fiduciaries, executors, administrators, trustees, guardians and institutional
investors.

-25-

<PAGE>
reasonable, including recording those instructions and requesting information
as to account registration (including, but not limited to, the name in which
an account is registered, the account number, or recent transactions in the
account). To the extent that the Trust and its Transfer Agent fail to use
reasonable procedures to verify the genuineness of telephone instructions,
they may be liable for such instructions that prove to be fraudulent and
unauthorized. In all other cases, shareholders will bear the risk of loss for
fraudulent telephone transactions.

Other Redemption Information

The Trust will make payment for redeemed shares within the time period
prescribed by the settlement requirements of the Securities and Exchange Act
of 1934 after receipt by the Transfer Agent of a request in proper form. If
shares to be redeemed were purchased by check, the Trust will transmit the
redemption proceeds promptly upon clearance of such check, which could take up
to fifteen days from the purchase date. A shareholder having purchased shares
by wire must have filed an account application before any redemption requests
can be honored.

Currently, the Trust imposes no charge when shares are redeemed.
However, institutions may charge a fee for providing services in connection
with investments in Portfolio shares; NBD currently charges $16 for wire
transactions. The Trust reserves the right to redeem accounts involuntarily,
after sixty days' notice, if redemptions cause the account's net asset value
to remain at $1,000 or less. Under certain circumstances, the Trust may make
payment for redemption in securities or other property.

Questions concerning the proper form for redemption requests should be
directed to the Transfer Agent at (800) 688-3350 or an investor's institution.

SHAREHOLDER SERVICES

The shareholder services and privileges under this heading may not be
available to certain clients of particular financial institutions, and some
may impose conditions on their clients that are different from those described
below. Investors should consult their own financial institutions in this
regard. Other investors should direct any questions to the Transfer Agent. The
Trust may modify or terminate any of the following services and privileges at
any time.

Exchange Privilege

Investors may exchange Class A shares which have been owned for at
least thirty days of the Intermediate Bond, Bond and Short Bond Portfolios, of
the Woodward Municipal Bond, Michigan Municipal Bond, Growth/Value,
Opportunity, Intrinsic Value, Capital Growth, Balanced and International
Equity Funds and of other investment portfolios of the Trust which may be
offered in the future and sold without a sales charge (each a "load
Portfolio") and Class A shares which have been owned for at least thirty days
of the Woodward Equity Index, Money Market, Government, Treasury Money Market,
Tax-Exempt Money Market and Michigan Tax-Exempt Money Market Funds and of
other investment portfolios of the Trust which may be offered in the future
and sold without a sales charge (each a "no load portfolio"). The cost of the
acquired Class A shares will be their net asset value plus the applicable
sales load, if any.

With respect to exchanges between load portfolios other than exchanges
involving the Short Bond Portfolio, no additional sales load will be payable,
provided that the investor previously paid a sales load upon the acquisition
of Class A shares of a load Portfolio. Investors exchanging Class A shares of
the Short Bond Portfolio will be required to pay the difference between the
sales load previously paid and the sales load applicable on the Class A shares
being acquired in the exchange, unless the investor's holding of Class A
shares of the

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<PAGE>
Short Bond Portfolio resulted from a previous exchange of Class A shares with
respect to which the investor had paid a higher sales load.

Reinvestment Privilege

-27-

<PAGE>
up to the redemption proceeds. In order to exercise this privilege, a written
order for the purchase of Class A shares of the Portfolio must be received by
the Transfer Agent within 120 days after the redemption. Reinvestment will be
at the next calculated net asset value after receipt.

Option to Make Systematic Withdrawals

The Trust has available to shareholders a Systematic Withdrawal Plan
pursuant to which a shareholder who owns Class A shares of any investment
portfolio having a minimum value of $15,000 at the time he elects under the
Plan may have a fixed sum distributed in redemption at regular intervals. An
application form and additional information regarding this service may be
obtained from an investor's institution or the Transfer Agent by calling
(800) 688-3350.

Automatic Investment

The Trust offers an Automatic Investment Plan (the "Plan") whereby a
shareholder may automatically purchase Class A shares on a regular basis in
accordance with an election in his account application. An application may be
obtained from the Transfer Agent by calling (800) 688-3350. Under the Plan a
shareholder's financial institution debits a pre-authorized amount from his
account and applies the amount to the purchase of Class A shares. The minimum
per transaction is $25. The minimum initial investment in a Portfolio is also
$25 for the following shareholders who elect the Plan: (l) current and retired
directors, officers and employees of NBD or any of its affiliates; (2) the
trustees, former trustees and officers of the Trust; (3) broker/dealers which
have entered into an agreement with a Co-Distributor or the Trust pursuant to
the Trust's Distribution Plan or Shareholder Servicing Plan and their
representatives purchasing for their own accounts; and (4) spouses, children,
grandchildren, siblings, parents, grandparents and in-laws of individuals
referred to in (l), (2) and (3) above. An NAV Account Application may be
obtained from the Transfer Agent by calling (800) 688-3350. The Plan can be
implemented with any financial institution that is a member of the Automated
Clearing House. No service fee is currently charged by the Trust for
participating in the Plan. Death or legal incapacity will terminate a
shareholder's participation in the Plan. Deposits, withdrawals and adjustments
will be made electronically under the rules of the Automated Clearing House
Association.

Cross Reinvestment of Dividend Plan

The Trust makes available to shareholders a Cross Reinvestment of
Dividend Plan (the "Plan") pursuant to which a shareholder who owns Class A
shares of any portfolio with a minimum value of $10,000 at the time he elects
under the Plan may have dividends paid by such portfolio automatically
reinvested into Class A shares of another portfolio in which he has invested a
minimum of $1,000. Shareholders may obtain an application and additional
information from their institutions or the Transfer Agent by calling
(800) 688-3350.

The Woodward Funds Individual Retirement Custodial Account

-28-

<PAGE>
Other Retirement Plans

Direct Deposit Program

If an investor receives federal salary, social security, or certain
veteran's, military or other payments from the federal government or elects to
use his employer's payroll deposit program, he is eligible for the Direct
Deposit Program. With this Program, an Investor may purchase Class A shares
(minimum of $25) by having these deposits automatically deposited into his
Portfolio account. For instructions on how to enroll in the Direct Deposit
Program, an investor should call his institution or the Transfer Agent. Death
or legal incapacity will terminate an investor's participation in the Program.
An investor may elect at any time to terminate his participation by notifying
in writing the appropriate federal agency. Further, the Trust may terminate an
investor's participation upon thirty days' notice to him.

PERFORMANCE AND YIELD INFORMATION

From time to time, in advertisements or in reports to shareholders the
performance and yield of each class of shares of the Portfolios may be
compared to the performance of other mutual funds with similar investment
objectives and to bond or other relevant indices or to rankings prepared by
independent services or other financial or industry publications that monitor
the performance of mutual funds. For example, performance and yield may be
compared to data prepared by Lipper Analytical Services, Inc. In addition,
performance and yield data as reported in national financial publications such
as Money Magazine, Forbes, Barron's, The Wall Street Journal and The New York
Times, or in publications of a local or regional nature, may also be used in
comparing the performance of a Portfolio.

Performance of each class of shares is based on historical earnings
and will fluctuate and is not intended to indicate future performance. The

-29-

<PAGE>
investment return and principal value of an investment in a class will
fluctuate so that a shareholder's shares, when redeemed, may be worth more or
less than their original cost. Performance data may not provide a basis for
comparison with bank deposits and other investments which provide a fixed
yield for a stated period of time. Yield and total return data should also be
considered in light of the risks associated with a Portfolio's portfolio
composition, quality, maturity, operating expenses and market conditions. Any
fees charged by financial institutions directly to their customer accounts in
connection with investments in shares will not be reflected in performance
calculations.

DIVIDENDS AND DISTRIBUTIONS

Dividends from net investment income are declared and paid monthly by
the Portfolios. Each Portfolio's net realized capital gains are distributed at
least annually.

Dividends and distributions will reduce a class' net asset value
by the amount of the dividend or distribution. All dividends and distributions
are automatically reinvested (without any sales charge) in additional shares
of the same class at their net asset value per share determined on the payment
date, unless the holder has notified the Transfer Agent in writing that he
elects to have dividends or capital gain distributions (or both) paid in cash.
Shareholders must make such election, or any revocation thereof, in writing to
their financial institutions or Transfer Agent. If an account is established
with telephone privileges, the registered owner or his preauthorized legal
representative may change the election to receive dividends in cash to an
election to receive dividends in shares by telephoning the Transfer Agent
at (800) 688-3350. The election will become effective with respect to
dividends paid after its receipt by the Transfer Agent.

TAXES

Federal

-30-

<PAGE>
exempt from federal income taxes as long-term capital gains, regardless of how
long the shareholders have held the shares and whether such gains are received
in cash or reinvested in additional shares.

Shareholders will be advised at least annually as to the federal
income tax consequences of distributions made to them each year.

State and Local

The Trust may be subject to state or local taxes in jurisdictions in
which the Trust may be deemed to be doing business. In addition, in those
states or localities which have income tax laws, the treatment of the Trust
and its shareholders under such laws may differ from treatment under federal
income tax laws. Shareholders are advised to consult their tax advisers
concerning the application of state and local taxes, which may have different
consequences from those of the federal income tax law described above.

MANAGEMENT

Trustees and Officers of the Trust

-31-

<PAGE>
below. Each Trustee has an address at The Woodward Funds, c/o NBD Bank, 611
Woodward Avenue, Detroit, Michigan 48226.

*Earl I. Heenan, Jr., Chairman and President

Director (since 1995), Vice Chairman (1988-1995) and President
(1955-1988), Detroit Mortgage & Realty Company; President (1989-1992)
and Trustee (since 1966), Cottage Hospital of Grosse Pointe (affiliate
of Henry Ford Health System); Trustee, Henry Ford Health Sciences Center
(since 1987); Trustee, Henry Ford Continuing Care Corporation (since 1980);
Trustee, Earhart Foundation (since 1980). He is 77 years old and his
address is 333 West Fort Street, Detroit, Michigan 48226.

*Eugene C. Yehle, Trustee and Treasurer

Retired; Director of Investor Relations and Pension Investments, Dow
Chemical Company (1972-1985); Trustee, Alma College (since 1978); Trustee
(since 1977) and Chairman (since 1983), Charles J. Strosacker Foundation;
Trustee (1989- 1993), Higgins Lake Foundation. He is 75 years old and his
address is 4501 Linden Drive, Midland, Michigan 48640.

Will M. Caldwell, Trustee

Nicholas J. De Grazia, Trustee

John P. Gould, Trustee

Marilyn McCoy, Trustee

- ---------
* Trustees who are "interested persons" of the Trust, as defined in the 1940
Act.

-32-

<PAGE>

Julius L. Pallone, Trustee

*Donald G. Sutherland, Trustee

Partner of the law firm Ice, Miller, Donadio & Ryan, Indianapolis,
Indiana. He is 67 years old, and his address is One American Square, 34th
Floor, Indianapolis, Indiana 46204.

Donald L. Tuttle, Trustee

Vice President (since 1995), Senior Vice President (1992-1995),
Association for Investment Management and Research; Senior Professor
of Finance, Indiana University (1970-1991); Vice President, Trust &
Investment Advisers, Inc. (1990-1991); Director, Federal Home Loan Bank
of Indianapolis (1981 to 1985). He is 61 years old, and his address
is 5 Boar's Head Lane, Charlottesville, Virginia 22903.

W. Bruce McConnel, III, Secretary

Partner of the law firm Drinker Biddle & Reath, Philadelphia,
Pennsylvania. He is 53 years old, and his address is 1345 Chestnut Street,
Philadelphia, Pennsylvania 19107.

Investment Adviser, Custodian and Transfer Agent

- ---------
* Trustees who are "interested persons" of the Trust, as defined in the 1940
Act.

-33-

<PAGE>
Douglas S. Swanson, First Vice President, and Ricardo F. Cipicchio,
Vice President, are primarily responsible for the day-to-day management of the
Intermediate Bond and Bond Portfolios. Mr. Swanson joined NBD in 1983 after
receiving an M.S. in Management from the Massachusetts Institute of Technology
(Sloan School). Prior to joining NBD in 1989, Mr. Cipicchio was employed by
CITGO as a petroleum engineer. Mr. Cipicchio received an MBA in Finance from
the University of Michigan.

Mr. Cipicchio and Christopher J. Nauseda, Vice President, are
primarily responsible for the day-to-day portfolio management of the Short
Bond Portfolio. Mr. Nauseda, who received an MBA from Wayne State University
in 1992, joined NBD in 1982.

For its services under the Advisory Agreement, NBD is entitled to
receive an advisory fee, computed daily and payable monthly, at an annual rate
of .65% of the average daily net assets of each of the Portfolios. In
addition, NBD is entitled to 4/10ths of the gross income earned by the
Intermediate Bond, Bond and Short Bond Portfolios on each loan of securities
(excluding capital gains and losses, if any). NBD may voluntarily waive its
fee in whole or in part with respect to any particular Portfolio.

Banking laws and regulations currently prohibit a bank holding company
registered under the Bank Holding Company Act of 1956 or any affiliate thereof
from sponsoring, organizing, controlling, or distributing the shares of a
registered open-end investment company continuously engaged in the issuance of
its shares, and prohibit banks generally from underwriting securities, but do
not prohibit such a bank holding company or affiliate from acting as
investment adviser, transfer agent, or custodian to such an investment company
or from purchasing shares of such a company as agent for and upon the order of
a customer. The Adviser and the Trust believe that the Adviser may perform the
advisory, custodial and transfer agency services for the Trust described in
this Prospectus, and that the Adviser, subject to such banking laws and
regulations, may perform the shareholder services contemplated by this
Prospectus, without violation of such banking laws or regulations. However,
future changes in legal requirements relating to the permissible activities of
banks and their affiliates, as well as future interpretations of present
requirements, could prevent the Adviser from continuing to perform investment
advisory, custodial or transfer agency services for the Trust or require the
Adviser to alter or discontinue the services provided by it to shareholders.

Sponsors and Co-Distributors

-34-

<PAGE>
Association of Securities Dealers, Inc. FoM participates as a member of
various selling groups or as agent of other investment companies, executes
orders on behalf of investment companies for the purchase and sale of their
securities and sells securities to such companies as a broker or dealer in
securities. On December 31, 1995, FoM had a net worth of $37,231,000.

Service and Distribution Plan

The Trust has adopted its Distribution Plan pursuant to Rule 12b-1
under the 1940 Act (the "Plan"). Under the Plan, the Trust incurs expenses
primarily intended to result in the sale of the Trust's shares in an amount
not to exceed .35 of 1% of the value of each portfolio's average daily net
assets calculated as follows in the case of each Portfolio: (i) fees payable
to the Co-Distributors pursuant to the Distribution Agreement; (ii) the actual
costs and expenses in connection with advertising and marketing the
Portfolio's shares; and (iii) fees pursuant to agreements with securities
dealers, financial institutions and other professionals ("Service Agents") for
administration or servicing of Portfolio shareholders ("Servicing"). Servicing
may include, among other things: answering client inquiries regarding the
Trust and the Portfolios; assisting clients in changing dividend options,
account designations and addresses; performing sub-accounting; establishing
and maintaining shareholder accounts and records; processing purchase and
redemption transactions; investing client cash account balances automatically
in Portfolio shares; providing periodic statements showing a client's account
balance and integrating such statements with those of other transactions and
balances in the client's other accounts serviced by the Service Agent;
arranging for bank wires; and such other services as the Trust may request, to
the extent the Service Agent is permitted by applicable statute, rule or
regulation. Under the Plan, the Trust also bears the cost of preparing and
printing Prospectuses for use in selling shares of the Trust and costs
associated with implementing and operating the Plan. These costs are included
in computing the .35 of 1% limitation set forth above.

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<PAGE>
if enacted, would permit a bank holding company to establish a non-bank
subsidiary having the authority to organize, sponsor and distribute shares of
an investment company. If such legislation were enacted, the Trust expects
that NBD's parent bank holding company would consider the possibility of one
of its non-bank subsidiaries offering to perform some or all of the services
now provided by the Co-Distributors. It is not possible, of course, to predict
whether or in what form legislation might be enacted or the terms upon which
NBD or such a non-bank affiliate might offer to provide such services.

Shareholder Servicing Plan

Trust Expenses

The Trust is responsible for the payment of its expenses. These
include, for example, fees payable to NBD as Adviser, or expenses otherwise
incurred by the Trust in connection with the management of the investment of
the Trust's assets such as brokerage fees, commissions and other transaction
charges, the fees and expenses of NBD as the Trust's Custodian and as its
Transfer Agent, the fees payable to the Co-Distributors under the Distribution
Agreement, the fees and expenses of Trustees, expenses associated with the
Trust's Distribution Plan and Shareholder Servicing Plan, outside auditing and
legal expenses, all taxes and corporate fees payable by the Trust, SEC fees,
state securities qualification fees, costs of preparing and printing
prospectuses for regulatory purposes and for distribution to shareholders,
costs of shareholder reports and shareholder meetings, and any extraordinary
expenses. Each Portfolio also pays for brokerage commissions and transfer
taxes (if any) in connection with the purchase and sale of portfolio
securities. Expenses attributable to a particular Portfolio of the Trust will
be charged to that Portfolio, and expenses not readily identifiable as
belonging to a particular Portfolio will be allocated by the Board of Trustees

-36-

<PAGE>
among one or more Portfolios in such a manner as it shall deem fair and
equitable. For the fiscal year ended December 31, 1995, the Intermediate Bond,
Bond and Short Bond Portfolios' total expenses were .73%, .74%, and .75%
(after fee waivers, if any) of their average net assets, respectively. The
Statement of Additional Information describes in more detail the fees and
expenses borne by the Trust.

OTHER INFORMATION

The Trust was organized as a Massachusetts business trust on April 21,
1987 under a Declaration of Trust which was amended and restated as of May 1,
1992. The Trust is a series fund having seventeen series of shares of
beneficial interest, each of which evidences an interest in a separate
investment portfolio. The Declaration of Trust permits the Board of Trustees
to issue an unlimited number of full and fractional shares and to create an
unlimited number of series of shares ("Series") representing interests in a
portfolio and an unlimited number of classes of shares within a Series. In
addition to the Portfolios described herein, the Trust offers the following
investment portfolios: the Woodward Municipal Bond Fund, Michigan Municipal
Bond Fund, Growth/Value Fund, Opportunity Fund, Intrinsic Value Fund, Capital
Growth Fund, Balanced Fund, Intermediate Equity Fund, Equity Index Fund, Money
Market Fund, Government Fund, Treasury Money Market Fund, Tax-Exempt Money
Market Fund and Michigan Tax-Exempt Money Market Fund. The Trust has
established the following two distinct classes of shares within each
Portfolio described herein: Class I shares (Original Class) and Class A
shares (Special Class 1). A sales person and any other person or
institution entitled to receive compensation for selling or servicing
shares may receive different compensation with respect to different
classes of shares in the Series. Each share has $.10 par value,
represents an equal proportionate interest in the related Portfolio
with other shares of the same class outstanding, and is entitled to such
dividends and distributions out of the income earned on the assets belonging
to such Portfolio as are declared in the discretion of the Board of Trustees.

Shareholders are entitled to one vote for each full share held, and a
proportionate fractional vote for each fractional share held, and each Series
entitled to vote on a matter will vote thereon in the aggregate and not by
Series, except as otherwise expressly required by law or when the Board of
Trustees determines that the matter to be voted on affects only the interests
of shareholders of a particular series. In addition, shareholders of each of
the Series have equal voting rights except that only shares of a particular
class within a Series are entitled to vote on matters affecting only that
class. Voting rights are not cumulative, and accordingly, the holders of more
than 50% of the aggregate number of shares of all Trust portfolios may elect
all of the Trustees.

As of March 29, 1996, NBD held beneficially or of record
approximately 87.05%, 87.91% and 91.01% of the outstanding shares of the
Intermediate Bond, Bond and Short Bond Portfolios, respectively, and therefore
may be considered to be a controlling person of the Trust for purposes of the
1940 Act.

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<PAGE>

[ BACK COVER, COLUMN 1 ]

No person has been authorized to give any information or to make any
representations not contained in this Prospectus, or in the Portfolios'
Statement of Additional Information incorporated herein by reference, in
connection with the offering made by this Prospectus and, if given or made,
such information or representations must not be relied upon as having been
authorized by the Trust, Adviser or Sponsors and Co-Distributors. This
Prospectus does not constitute an offering by the Portfolios or by their Co-
Distributors, in any jurisdiction in which such offering may not lawfully be
made.

TABLE OF CONTENTS Page

EXPENSE SUMMARY............................. 2
BACKGROUND.................................. 4
FINANCIAL HIGHLIGHTS........................ 5
INTRODUCTION................................ 8
PROPOSED REORGANIZATION..................... 8
INVESTMENT OBJECTIVES, POLICIES AND
RISK FACTORS............................ 8
OTHER INVESTMENT POLICIES................... 11
PURCHASE OF SHARES.......................... 21
PUBLIC OFFERING PRICE....................... 23
REDEMPTION OF SHARES........................ 26
SHAREHOLDER SERVICES........................ 27
PERFORMANCE AND YIELD
INFORMATION......................... 30
DIVIDENDS AND DISTRIBUTIONS................. 30
TAXES .................................... 31
MANAGEMENT.................................. 32
OTHER INFORMATION........................... 37

<PAGE>
[BACK COVER, COLUM 2]

CLASS A SHARES OF THE:

WOODWARD INTERMEDIATE BOND FUND

WOODWARD BOND FUND

WOODWARD SHORT BOND FUND

THE WOODWARD FUNDS(R)

Prospectus
April 15, 1996

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<PAGE>

- ------------------------------------------------------------------------------
PROSPECTUS April 15, 1996
- ------------------------------------------------------------------------------

THE WOODWARD FUNDS
c/o NBD Bank, Transfer Agent
P.O. Box 7058
Troy, Michigan 48007-7058

24 Hour yield and performance information
Purchase and Redemption orders:
(800) 688-3350

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

The Woodward Funds (the "Trust") is offering in this Prospectus shares
in the following two investment portfolios (the "Portfolios"), each having its
own investment objective and policies as described in this Prospectus:

Class A shares of the:

Woodward Municipal Bond Fund
Woodward Michigan Municipal Bond Fund

This Prospectus sets forth concisely information that a prospective
investor should consider before investing. Investors should read this
Prospectus and retain it for future reference. Additional information about
the Trust, contained in a Statement of Additional Information, has been filed
with the Securities and Exchange Commission (the "SEC") and is available upon
request without charge by writing to The Woodward Funds at the address above.
The Statement of Additional Information bears the same date as this Prospectus
and is incorporated by reference in its entirety into the Prospectus.

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

INVESTMENT ADVISER:

NBD Bank

<PAGE>
EXPENSE SUMMARY

The Trust currently offers Class I shares (formerly known as
"Institutional Shares") and Class A shares (formerly known as "Retail Shares")
in each of the Woodward Municipal Bond Fund ("Municipal Bond Portfolio") and
Woodward Michigan Municipal Bond Fund ("Michigan Municipal Bond Portfolio").
Class I shares are sold primarily to NBD and its affiliated and correspondent
banks acting on behalf of their respective customers. Class A shares are sold
to the general public primarily through financial institutions such as banks,
brokers and dealers. Class I shares are offered in a separate Prospectus.
Investors should call (800) 688-3350, a Co-Distributor or their financial
institutions if they would like to obtain more information concerning Class I
shares and/or Class A shares of the Portfolios. The following table is
provided to assist investors in understanding the various costs and expenses
that an investor will indirectly incur as a beneficial owner of Class A shares
in each of the Portfolios.

<TABLE>
<CAPTION>
Michigan
Municipal Municipal
Bond Bond
Portfolio(1) Portfolio(1)
------------ ------------

<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed
on Purchases............................ 4.75% 4.75%
(as a percentage of offering price)

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

ANNUAL OPERATING EXPENSES
(as a percentage of average
net assets)............................
Management Fees............................. .65% .65%
12b-1 Fees(2)............................... .017% .038%
Shareholder Servicing Fees(3)............... .25% .25%
Other Expenses(4)
(before fee waivers and/or
expense reimbursements)................ .263% .352%
(after fee waivers and/or
expense reimbursements)................ .053% .002%
Total Operating Expenses
(before fee waivers and/or
expense reimbursements)................ 1.18% 1.29%
(after fee waivers and/or
expense reimbursements)................ .97% .94%
- ---------

<FN>
1. The expenses for each Portfolio have been restated to reflect
current expenses.

-2-

<PAGE>
("Distribution Plan") to a certain percentage of total new gross share sales,
plus interest. The Trust would stop accruing 12b-1 fees if, to the extent,
and for as long as, such limit would otherwise be exceeded.

3. The Trust has adopted a Shareholder Servicing Plan pursuant to
which the Trust may enter into agreements with institutions under which they
will render shareholder administrative support services for their customers
who beneficially own Class A shares in return for a fee of up to .25% per
annum of the value of such shares ("Servicing Fees"). For further information,
see "Shareholder Servicing Plan", "Sponsors and Co-Distributors", "Service
and Distribution Plan" and "Investment Adviser, Custodian and Transfer Agent"
under the heading "Management" in this Prospectus.

4. Credits or charges not reflected in the expense table may be
incurred directly by customers of financial institutions in connection with an
investment in the Portfolios.
</TABLE>

Michigan
Municipal Municipal
Bond Bond
Portfolio Portfolio
--------- ---------

<S> <C> <C>
Example
You would pay the following
expenses on a $1,000
investment, assuming:
(1) a 5% annual return
and (2) redemption at the
end of each time period:
One Year........................... $ 9.94 $ 9.63
Three Years........................ 31.03 30.08
Five Years......................... 53.85 52.22
Ten Years.......................... 119.40 115.87
Example
You would pay the following
expenses on a $1.00
investment, assuming
(1) a 5% annual return,
(2) redemption at the end
of each time period and
(3) the imposition of a
maximum sales load at the
beginning of the period:
One Year:.......................... $56.97 $56.67
Three Years:....................... 77.06 76.15
Five Years:........................ 98.79 97.24
Ten Years:......................... 161.23 157.87
</TABLE>

THE FOREGOING SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES OR RATES OF RETURN. ACTUAL EXPENSES OR RATE OF RETURN MAY BE
GREATER OR LESSER THAN THOSE SHOWN.

The examples demonstrate the projected dollar amount of total
cumulative expenses that would be incurred over various periods with respect
to a hypothetical investment in Class A shares in each of the Portfolios,
based upon payment by the Portfolios of operating expenses at the respective
levels set forth in the expense table. For more complete descriptions of
Portfolio expenses, see "Investment Adviser, Custodian and Transfer Agent",
"Sponsors and Co-Distributors", "Shareholder Servicing Plan", "Service and
Distribution Plan" and "Trust Expenses" under the heading "Management" in this
Prospectus and the

-3-

<PAGE>
financial statements and related notes contained in the Statement of Additional
Information.

BACKGROUND

-4-

<PAGE>
FINANCIAL HIGHLIGHTS

The tables below provide supplementary information to the Portfolios'
financial statements contained in their Statement of Additional Information
and set forth certain information concerning the historic investment results
of Portfolio shares. They present a per share analysis of how each Portfolio's
net asset value has changed during the periods presented. The tables have been
derived from the Portfolios' financial statements which have been audited by
Arthur Andersen, LLP, the Trust's independent public accountants, whose report
thereon is contained in the Statement of Additional Information along with the
financial statements. The financial data included in these tables should be
read in conjunction with the financial statements and related notes included
in the Statement of Additional Information. Further information about the
performance of the Portfolios is available in annual reports to shareholders.
The Statement of Additional Information and annual reports to shareholders may
be obtained from the Trust free of charge by calling (800) 688-3350.

<TABLE>
<CAPTION>
Municipal Bond Portfolio

February 1, 1993
(Commencement
Year Ended Year Ended of Operations) to
December 31, December 31, December 31,
1995 1994 1993
------------ ------------ ------------------

<S> <C> <C> <C>
Net asset value, beginning
of period...................... $9.59 $10.69 $10.00
Income from investment
operations:
Net investment income.......... 0.48 0.50 0.45
Net realized and unrealized
gains (losses) on
investments.................. 1.08 (1.11) 0.69
Total from investment
operations................... $1.56 $(0.61) $ 1.14
Less distributions:
From net investment
income....................... $(0.47) $(0.49) $(0.44)
From realized
gains........................ 0.00 0.00 ( 0.01)
Total distributions............ $(0.47) $(0.49) $(0.45)
Net asset value, end of
period......................... $10.68 $ 9.59 $10.69

Total return(b).................. 16.54% (5.72%) 12.69%(a)
Ratios/Supplemental Data
Net assets, end of period........ $76,963,564 $61,255,773 $54,703,974
Ratio of expenses to average
net assets..................... 0.79% 0.53% 0.19%(a)
Ratio of net investment income
to average net assets.......... 4.63% 4.94% 5.27%(a)
Ratio of expenses to average
net assets without fee
waivers/reimbursed
expenses....................... 0.93% 0.88% 1.12%(a)
Ratio of net investment income
to average net assets
without fee waivers/reimbursed
expenses....................... 4.49% 4.59% 4.34%(a)
Portfolio turnover rate.......... 20.46% 19.11% 11.12%
<FN>
- ---------
(a) Annualized for periods less than one year for comparability
purposes. Actual annual values may be less than or greater than those shown.

(b) Total returns as presented do not include any applicable sales
load.
</TABLE>
-5-

<PAGE>

Michigan Municipal Bond Portfolio

February 1, 1993
(Commencement
Year Ended Year Ended of Operations) to
December 31, December 31, December 31,
1995 1994 1993
------------ ------------ ------------------

<S> <C> <C> <C>
Net asset value, beginning
of period...................... $9.54 $10.60 $10.00
Income from investment
operations:
Net investment income.......... 0.48 0.50 0.44
Net realized and unrealized
gains (losses) on
investments.................. 1.06 (1.06) 0.59
----------- ----------- -----------
Total from investment
operations................... $1.54 $(0.56) $ 1.03
----------- ----------- -----------
Less distributions:
From net investment
income....................... $(0.48) $(0.50) $(0.43)
From realized
gains........................ 0.00 0.00 ( 0.00)
----------- ----------- -----------
Total distributions............ $(0.48) $(0.50) $(0.43)
----------- ----------- -----------
Net asset value, end of
period......................... $10.60 $ 9.54 $10.60
=========== =========== ===========
Total return(b).................. 16.49% (5.42%) 11.50%(a)
Ratios/Supplemental Data
Net assets, end of period........ $53,453,160 $45,263,059 $42,113,795
Ratio of expenses to average
net assets..................... 0.79% 0.53% 0.19%(a)
Ratio of net investment income
to average net assets.......... 4.71% 5.01% 5.12%(a)
Ratio of expenses to average
net assets without fee
waivers/reimbursed
expenses....................... 1.04% 1.05% 1.21%(a)
Ratio of net investment income
to average net assets
without fee waivers/reimbursed
expenses....................... 4.46% 4.49% 4.10%(a)
Portfolio turnover rate.......... 26.97% 25.93% 41.70%
<FN>
- ---------
(a) Annualized for periods less than one year for comparability
purposes. Actual annual values may be less than or greater than those shown.

(b) Total returns as presented do not include any applicable sales
load.
</TABLE>

-6-

<PAGE>
INTRODUCTION

The Trust is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"). The
Trust currently consists of seventeen investment portfolios, each of which
consists of a separate pool of assets with separate investment objective and
policies. However, only the Class A shares of the Municipal Bond and Michigan
Municipal Bond Portfolios are offered pursuant to this Prospectus. The
Municipal Bond Portfolio is classified as a diversified investment portfolio
and the Michigan Municipal Bond Portfolio is classified as a non-diversified
investment portfolio under the 1940 Act.

PROPOSED REORGANIZATION

INVESTMENT OBJECTIVES, POLICIES AND RISK FACTORS

The investment objective of a Portfolio may not be changed without
approval of the holders of at least a majority of the outstanding shares of
that Portfolio. See "Other Information." Except as noted below under
"Investment Limitations," a Portfolio's investment policies may be changed
without a vote of shareholders. There can be no assurance that a Portfolio
will achieve its objective.

Municipal Bond Portfolio

The investment objective of the Municipal Bond Portfolio is to seek as
high a level of current income exempt from federal income tax as is consistent
with relative stability of principal. Under normal market and economic
conditions, the Portfolio seeks to achieve this objective by investing
primarily in investment grade debt obligations issued by or on behalf of
states, territories and possessions of the United States, the District of
Columbia and their respective political subdivisions, agencies,
instrumentalities and authorities, the interest on which is, in the opinion of
bond counsel for the issuers, exempt from regular federal income tax
("Municipal Securities").

-7-

<PAGE>
Michigan Municipal Bond Portfolio

The investment objective of the Michigan Municipal Bond Portfolio is
to seek as high a level of current income exempt from federal, and to the
extent possible, from State of Michigan income taxes as is consistent with
relative stability of principal. Under normal market and economic conditions,
the Portfolio seeks to achieve this objective by investing primarily in
investment grade debt obligations issued by the State of Michigan, its
political subdivisions, municipalities, corporations and authorities, the
interest on which is, in the opinion of bond counsel to the issuers, exempt
from federal and State of Michigan income taxes ("Michigan Municipal
Securities"). To the extent that acceptable Michigan Municipal Securities are
at any time unavailable for investment by the Portfolio, the Portfolio will
invest primarily in other Municipal Securities the interest on which is, in
the opinion of bond counsel, exempt from federal, but not State of Michigan
income taxes.

Investment Policies Applicable to the Portfolios

At least 80% of each of the Portfolios' total assets will be invested
in Municipal Securities except in extraordinary circumstances, such as when
the Adviser believes that market conditions indicate that a Portfolio should
adopt a temporary defensive position by holding uninvested cash or investing
in taxable short-term securities ("Short-Term Investments"). This policy is
fundamental with respect to each Portfolio and may not be changed without the
approval of the holders of a majority of the Portfolio's outstanding shares.
In addition, with respect to the Michigan Municipal Bond Portfolio, at least
65% of its total assets will be invested under normal market conditions in
Michigan Municipal Securities and the remainder may be invested in securities
that are not Michigan Municipal Securities and therefore may be subject to
Michigan income taxes. (See "Taxes.")

During normal market conditions each Portfolio's average weighted
portfolio maturity is expected to be between 7 and 20 years.

-8-

<PAGE>
OTHER INVESTMENT POLICIES

Ratings

Municipal Securities acquired by the Municipal Bond and Michigan
Municipal Bond Portfolios will be investment grade at the time of purchase,
i.e., obligations rated AAA, AA, A or BBB by Standard & Poor's Rating Group,
Division McGraw Hill ("S&P"), Fitch Investors Service ("Fitch"), Duff & Phelps
Credit Co. ("Duff") or IBCA, Inc. ("IBCA") or Aaa, Aa, A or Baa by Moody's
Investors Service, Inc. ("Moody's") (each a "Rating Agency") in the case of
bonds, rated SP-2 or higher by S&P, MIG-2 or higher by Moody's or F-2 or
higher by Fitch, in the case of notes, rated A-2 or higher by S&P, Prime-2 or
higher by Moody's, F-2 or higher by Fitch or A2 or higher by IBCA, in the case
of tax-exempt commercial paper or VMIG or higher by Moody's in the case of
variable demand notes, or be unrated but deemed by the Adviser to be
comparable in quality at the time of purchase to instruments that are so
rated. Obligations rated in the lowest of the top four rating categories (Baa
by Moody's, BBB by S&P or Fitch or IBCA) are considered to have less capacity
to pay interest and repay principal and have certain speculative
characteristics. In the event that the rating of a security held by the
Municipal Bond or Michigan Municipal Bond Portfolios is reduced below Baa or
Moody's, BBB by S&P, BBB by Fitch or BBB by IBCA, the security will be
disposed of in an orderly fashion as soon as possible. The debt ratings are
described in the Statement of Additional Information.

Short-Term Investments

Each Portfolio may hold short-term U.S. Government obligations, "high
quality" money market instruments such as certificates of deposit, bankers'
acceptances and time deposits (i.e. those rated at the time of purchase within
the two highest rating categories or which are unrated at such time but are
deemed by the Adviser to be of comparable quality), repurchase agreements,
reverse repurchase agreements, commercial paper, notes, other short-term
obligations, variable rate master demand notes, and cash, pending investment,
to meet anticipated redemption requests or if, in the opinion of the Adviser,
suitable bonds or other fixed-income securities in which the Portfolios invest
are unavailable. Such investments may be in such proportions as, in the
opinion of the Adviser, existing circumstances may warrant, and may include
obligations of foreign banks and foreign branches of U.S banks. The Portfolios
may also invest their cash balances in securities issued by other investment
companies which invest in high-quality, short-term debt securities. These
short-term investments are described in greater detail in the Statement of
Additional Information.

U.S. Government Obligations

Each Portfolio may invest in all types of U.S. Government securities,
including U.S. Treasury bonds, notes and bills, and obligations of Federal
Home Loan Banks, Federal Farm Credit Banks, Federal Land Banks, the Federal
Housing Administration, Farmers Home Administration, Export-Import Bank of the
United States, Small Business Administration, Government National Mortgage
Association, Federal National Mortgage Association, General Services
Administration, Student Loan Marketing Association, Central Bank for
Cooperatives, Federal Home Loan Mortgage Corporation, Federal Intermediate
Credit Banks, Tennessee Valley Authority, Resolution Funding Corporation and
Maritime Administration. The Portfolios may also invest in interests in the
foregoing securities, including collateralized mortgage obligations guaranteed
by a U.S. Government agency or instrumentality, and in Government-backed
trusts which hold obligations of foreign governments that are guaranteed or
backed by the full faith and credit of the United States.

Obligations of certain U.S. Government agencies and instrumentalities
such as those of the Government National Mortgage Association, are supported
by the

-9-

<PAGE>
full faith and credit of the U.S. Treasury; others, such as the
Export-Import Bank of the United States, are supported by the right of the
issuer to borrow from the Treasury; others, such as those of the Federal
National Mortgage Association, are supported by the discretionary authority of
the U.S. Government to purchase the agency's obligations; still others, such
as those of the Student Loan Marketing Association, are supported only by the
credit of the instrumentality.

Municipal and Related Securities

Municipal Securities may include general obligations, revenue
obligations, notes, and moral obligation bonds. General obligations are
secured by the issuer's pledge of its full faith, credit and taxing power for
the payment of principal and interest. Revenue obligations are payable only
from the revenues derived from a particular facility, class of facilities or,
in some cases, from the proceeds of a special excise or other specific revenue
source such as the user of the facility being financed. Private activity bonds
(i.e. bonds issued by industrial development authorities) are in most cases
revenue securities and are not payable from the unrestricted revenues of the
issuer. Consequently, the credit quality of a private activity bond is usually
directly related to the credit standing of the private user of the facility
involved. Although interest paid on private activity bonds is exempt from
regular federal income tax, it may be treated as a specific tax preference
item under the federal alternative minimum tax. (See "Taxes") Notes are
short-term instruments which are obligations of the issuing municipalities or
agencies and are sold in anticipation of a bond sale, collection of taxes or
receipt of other revenues. Moral obligation bonds are normally issued by a
special purpose public authorities. If the issuer of a moral obligation bond
is unable to met its debt service obligations from current revenues, it may
draw on a reserve fund, the restoration of which is a moral commitment but not
a legal obligation of the state or municipality which created the issuer.
Municipal Securities also include municipal lease/purchase agreements which
are similar to installment purchase contracts for property or equipment issued
by municipalities. The Adviser will only invest in rated municipal
lease/purchase agreements.

There are, of course, variations in the quality of Municipal
Securities both within a particular classification and between
classifications, and the yields on Municipal Securities depend upon a variety
of factors, including general money market conditions, the financial condition
of the issuer, general conditions of the municipal bond market, the size of a
particular offering, the maturity of the obligation and the rating of the
issue.

Among other securities, the Portfolios may purchase short-term Tax
Anticipation Notes. Bond Anticipation Notes, Revenue Anticipation Notes, and
other forms of short-term loans. Such notes are issued with a short-term
maturity in anticipation of the receipt of tax or other funds, the proceeds of
bonds or other revenues. The Portfolios may also acquire zero coupon
obligations, which have greater price volatility than coupon obligations and
which will not result in the payment of interest until maturity.

Opinions relating to the validity of Municipal Securities and to the
exemption of interest thereon from federal income tax (and, with respect to
Michigan Municipal Securities, Michigan income taxes) are rendered by bond
counsel to the respective issues at the time of issuance. Neither the
Portfolios nor the Adviser will review the proceedings relating to the
issuance of Municipal Securities or the bases for such opinions.

-10-

<PAGE>

Variable and Floating Rate Municipal Securities

Municipal Securities purchased by the Portfolios may include rated and
unrated variable and floating rate tax-exempt instruments. There may be no
active secondary market with respect to a particular variable or floating rate
instrument. Nevertheless, the periodic readjustments of their interest rates
tend to assure that their value to a Portfolio will approximate their par
value. Illiquid variable and floating rate instruments (instruments which are
not payable upon seven days' notice and do not have an active trading market)
that are acquired by the Portfolios are considered illiquid investments.
See "Illiquid Securities."

Repurchase and Reverse Repurchase Agreements

Lending Portfolio Securities

To increase income or offset expenses, each Portfolio may lend its
portfolio securities to financial institutions such as banks and
broker-dealers in accordance with the investment limitations described below.
Agreements would require that the loans be continuously secured by collateral
equal at all times in value to at least the market value of the securities
loaned plus accrued interest. Collateral for such loans could include cash or
securities of the U.S. Government, its agencies or instrumentalities. Such
loans will not be made if, as a result, the aggregate of all outstanding loans
of a particular Portfolio exceeds one-third of the value of its total assets.
Loans of securities involve risks of delay in receiving additional collateral
or in recovering the securities loaned or possible loss of rights in the
collateral should the borrower of the securities become insolvent. Loans will
be made only to borrowers that provide the requisite collateral comprised of
liquid assets and when, in the Adviser's judgment, the income to be earned
from the loan justifies the attendant risks.

Securities of Other Investment Companies

Within the limits prescribed by the 1940 Act, each Portfolio may
invest in securities issued by other investment companies which invest in high
quality, short-term debt securities and which determine their net asset value
per share based on the amortized cost or penny-rounding method. As a
shareholder of another investment company, a Portfolio would bear, along with
other shareholders, its pro rata portion of the other investment company's
expenses, including advisory fees. These expenses would be in addition to the
advisory and other expenses that each Portfolio bears directly in connection
with its own operations.

-11-

<PAGE>
Custodial Receipts and Certificates of Participation

Securities acquired by the Portfolios may be in the form of custodial
receipts evidencing rights to receive a specific future interest payment,
principal payment or both on certain Municipal Securities. Such securities are
held in custody by a bank on behalf of holders of the receipts. These
custodial receipts are known by various names, including "Municipal Receipts,"
"Municipal Certificates of Accrual on Tax-Exempt Securities" ("M-CATs") and
"Municipal Zero-Coupon Receipts." The Portfolios may also purchase from time
to time certificates of participation that, in the opinion of counsel to the
issuer, are exempt from federal income tax. A certificate of participation
gives a Portfolio an undivided interest in a pool of Municipal Securities.
Certificates of participation may have fixed, floating or variable rates of
interest. If a certificate of participation is unrated, the Adviser will have
determined that the instrument is of comparable quality to those instruments
in which a Portfolio may invest pursuant to guidelines approved by the Board
of Trustees. For certain certificates of participation, a Portfolio will have
the right to demand payment, on not more than 30 days' notice, for all or any
part of such Portfolio's participation interest, plus accrued interest. As to
these instruments, each Portfolio intends to exercise its right to demand
payment as needed to provide liquidity, to maintain or improve the quality of
its investment portfolio or upon a default (if permitted under the terms of
the instrument).

Illiquid Securities

In accordance with their fundamental investment limitation described
below, the Portfolios will not knowingly invest more than 10% of the value of
their respective total assets in securities that are illiquid. Securities
having legal or contractual restrictions on resale or no readily available
market, and instruments (including repurchase agreements, variable and
floating rate instruments and time deposits) that do not provide for payment
to the Portfolios within seven days after notice are subject to this 10%
limit. Securities that have legal or contractual restrictions on resale but
have a readily available market are not deemed to be illiquid for purposes of
this limitation.

Borrowings

-12-

<PAGE>
Options

In addition, each Portfolio may write covered call and secured put
options. A covered call option means that a Portfolio owns or has the right to
acquire the underlying security subject to call at all times during the option
period. A secured put option means that a Portfolio maintains in a segregated
account with its custodian cash or U.S. Government securities in an amount not
less than the exercise price of the option at all times during the option
period. Such options will be listed on a national securities exchange and
issued by the Options Clearing Corporation and may be effected on a principal
basis with primary reporting dealers in U.S. Government securities. The
aggregate value of the securities subject to options written by a Portfolio
will not exceed 25% of the value of its net assets. In order to close out an
option position prior to maturity, a Portfolio may enter into a "closing
purchase transaction" by purchasing a call or put option (depending upon the
position being closed out) on the same security with the same exercise price
and expiration date as the option which it previously wrote.

For additional information relating to option trading practices,
including particular risks thereof, see the Statement of Additional
Information.

-13-

<PAGE>
When-Issued Purchases and Forward Commitments

Risk Factors Associated with Derivative Instruments

The Portfolios may purchase certain "derivative" instruments such as
options, and various float rate investments. "Derivative" instruments are
instruments that derive value from the performance of underlying assets,
interest or currency exchange rates, or indices, and include (but are not
limited to) futures contracts, options and structured debt obligations
(including collateralized mortgage obligations and various floating rate
instruments.)

Derivative instruments present, to varying degrees, market risk that
the performance of the underlying assets, exchange rates or indices will
decline; credit risk that the dealer or other counterpart to the transaction
will fail to pay its obligations; volatility and leveraging risk that, if
interest or exchange rates change adversely, the value of the "derivative"
instrument will decline more than the assets, rates or indices on which it is
based; liquidity risk that a Portfolio will be unable to sell a "derivative"
instrument when it wants because of lack of market depth or market disruption;
pricing risk that the value of a "derivative" instrument (such as an option)
will not correlate exactly to the value of the underlying assets, rates or
indices on which it is based; and operations risk that loss will occur as a
result of inadequate systems and controls, human error or otherwise. Some
"derivative" instruments are more complex than others, and for those
instruments that have been developed recently, data are lacking regarding
their actual performance over complete market cycles.

Special Risk Considerations Applicable to the Michigan Municipal
Bond Portfolio

The Michigan Municipal Bond Portfolio will under normal market
conditions consist of Michigan Municipal Securities to the extent of 65% or
more of its total assets. This concentration in securities issued by
governmental units of only one state exposes the Portfolio to risk of loss
greater than that of a more diversified portfolio holding securities issued by
governmental units of different states and different regions of the country.

Moreover, the economy of the State of Michigan is heavily dependent
upon the automobile manufacturing industry. This industry is highly cyclical.
This

-14-

<PAGE>
factor affects the revenue streams of the State of Michigan and its political
subdivisions because it impacts on tax sources, particularly sales taxes,
income taxes and Michigan single business taxes.

The heavy concentration of the Michigan Municipal Bond Portfolio in
Michigan Municipal Securities and the cyclical nature of the economy of the
State of Michigan may adversely affect the liquidity of the Portfolio.

Portfolio Turnover

Although it may vary from year to year, it is currently estimated that
under normal market conditions the annual portfolio turnover rate for a
Portfolio will not exceed 100%. A Portfolio's annual portfolio turnover rate
will not, however, be a factor preventing a sale or purchase when the Adviser
believes investment considerations warrant such sale or purchase. Portfolio
turnover may vary greatly from year to year as well as within a particular
year. High portfolio turnover rates generally result in higher transaction
costs to a Portfolio.

Investment Limitations

No Portfolio may:

1. Make loans, except that each Portfolio may purchase and hold debt
instruments and enter into repurchase agreements in accordance with its
investment objective and policies and may lend portfolio securities in an
amount not exceeding one-third of its total assets.

2. Borrow money or issue senior securities, except that each Portfolio
may borrow from banks and enter into reverse repurchase agreements for
temporary purposes in amounts not in excess of 10% of the value of its total
assets at the time of such borrowing; or mortgage, pledge or hypothecate any
assets, except in connection with any such borrowing and in amounts not in
excess of the lesser of the dollar amounts borrowed or 10% of the value of the
Portfolio's total assets at the time of such borrowing. No Portfolio will
purchase securities while its borrowings (including reverse repurchase
agreements) in excess of 5% of its total assets are outstanding. Securities
held in escrow or separate accounts in connection with a Portfolio's
investment practices described in the Statement of

-15-

<PAGE>
Additional Information or in its Prospectus are not deemed to be pledged for
purposes of this limitation.

3. Invest more than 10% of its total assets in illiquid investments.
See "Illiquid Securities" above.

4. Purchase the securities of issuers conducting their principal
business activity in the same industry if immediately after such purchase the
value of a Portfolio's investments in such industry would exceed 25% of the
value of its total assets, provided that (a) utilities will be divided
according to their services, wholly-owned finance companies will be considered
to be in the industries of their parents if their activities are primarily
related to financing the activities of their parents, the personal credit and
business credit businesses will be considered separate industries and (b)
there is no limitation with respect to or arising out of investments in
Municipal Securities (other than private activity bonds), or obligations
issued or guaranteed by the U.S. Government, or its agencies or
instrumentalities or repurchase agreements secured by any of the foregoing.

In addition, the Municipal Bond Portfolio may not purchase securities
of any one issuer (other than securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities) if, immediately after such
purchase, more than 5% of the value of a Portfolio's total assets would be
invested in the securities of such issuer, or more than 10% of the issuer's
outstanding voting securities would be owned by a Portfolio, except that up to
25% of the value of the Portfolio's total assets may be invested without
regard to theses limitations.

In addition, the Michigan Municipal Bond Portfolio may not with
respect to 50% of its total assets, invest more than 5% of its assets in
securities of any one issuer, except U.S. Government obligations or securities
of other regulated investment companies.

For purposes of the Investment Limitation above applicable to the
Municipal and Michigan Municipal Bond Portfolios, (i) a security is considered
to be issued by the governmental entity (or entities) whose assets and
revenues back the security, or with respect to a private activity bond that is
backed only by the assets and revenues of a non-governmental user, a security
is considered to be issued by such non-governmental user; (ii) in certain
circumstances, the guarantor of a guaranteed security may also be considered
to be an issuer in connection with such guarantee; and (iii) U.S. Governmental
obligations (including securities backed by the full faith and credit of the
United States) are deemed to be U.S. Government obligations for purposes of
the 1940 Act.

PURCHASE OF SHARES
In General

-16-

<PAGE>
Essex is a registered broker/dealer with offices at 215 Gateway Road West,
Napa, California 94558.

Financial institutions may impose different minimum investment and
other requirements on their customers and may charge additional fees in
connection with the establishment of accounts with the institutions and
purchase and redemption of Class A shares. Persons wishing to purchase
Class A shares through their accounts at an institution or a Co-Distributor
should contact the institution or Co-Distributor directly for appropriate
instructions and fee information. In addition, certain financial institutions
may enter into shareholder servicing agreements with the Trust whereby they
would perform various administrative support services for their customers who
are the beneficial owners of Class A shares in return for fees from the
Portfolios. See "Shareholder Servicing Plan" under the heading "Management" in
this Prospectus.

Purchase Procedures

The minimum initial investment is $1,000, except for purchases through
an institution whose customers have invested an aggregate minimum of $1,000 or
for investments made through a Co-Distributor's or an institution's sweep
privilege and the Trust's Automatic Investment Plan described below. The
minimum subsequent investment is $100, except for reinvested dividends or as
otherwise described below. The Trust reserves the right to reject any purchase
order.

-17-

<PAGE>
If customers of FoM wire payment in federal funds, they should direct
payment to NBD Bank, ABA 072000326, for the account of First of Michigan
Corporation re: The Woodward Funds, Account Number 059-41, and should identify
the customer name and account number. Before wiring payment, customers of FoM
should call FoM at (800) 544-8275 (outside Michigan) or (800) 852-7730 (within
Michigan).

Net Asset Value and Pricing of Shares

The net asset value of each Portfolio for purposes of pricing purchase
and redemption orders is determined as of the close of trading on the floor
of the New York Stock Exchange ("Exchange") (currently 4:00 p.m., New York
Time), on each day the Exchange is open for business ("Business Day") except:
(i) those holidays which the Exchange observes (currently New Year's Day,
Presidents' Day, Good Friday, Memorial Day (observed), Independence
Day, Labor Day, Thanksgiving Day and Christmas Day); and (ii) those
Business Days on which the Exchange closes prior to the close of its
regular trading hours ("Early Closing Time"), in which event the
net asset value of each Portfolio will be determined and its shares
will be priced as of such Early Closing Time. Net asset value per
Class I share of a Portfolio is calculated by dividing the value
of all securities and other assets belonging to the Portfolio allocable
to that Class I, less the liabilities charged to that Class I, by the
number of the outstanding shares of such Class I.

Securities held by the Portfolios traded only on over-the-counter
markets and securities for which there were no transactions are valued at the
average of the current bid and asked prices. Securities for which accurate
market quotations are not readily available, and other assets are valued at
fair value by the Adviser under the supervision of the Board of Trustees.
Securities may be valued on the basis of prices provided by independent
pricing services when the Adviser believes such prices reflect the fair market
value of such securities. The prices provided by pricing services take into
account institutional size trading in similar groups of securities and any
developments related to specific securities.

PUBLIC OFFERING PRICE

The public offering price for Class A shares of the Portfolios is the
sum of the net asset value per share of the Class A shares being purchased
plus a sales load as follows:

-18-

<PAGE>
<TABLE>
<CAPTION>
Total Sales Load Reallowance to Institutions
-------------------------------- ---------------------------

As a % of As a % of As a % of
offering price net asset value offering price
Amount of Transaction per share per share per share
- --------------------- -------------- --------------- --------------

The sales load described above will not be applicable to purchases of
Class A shares by: (1) any bank, trust company or other institution acting on
behalf of its fiduciary customer accounts or any other account maintained by
its trust department; (2) any individual, trust, corporation or other person
where the shares are acquired in connection with the distribution of assets
held in any account referred to in (l) above with NBD or its affiliates; (3)
individual retirement accounts maintained by the trust division of NBD or of
its affiliates; (4) current and retired directors, officers and employees of
NBD or any of its affiliates; (5) the trustees, former trustees and officers
of the Trust; (6) broker/dealers which have entered into an agreement with a
Co-Distributor or the Trust pursuant to the Trust's Service and Distribution
Plan or Shareholder Servicing Plan and their representatives purchasing for
their own accounts; and (7) spouses, children, grandchildren, siblings,
parents, grandparents and in-laws of individuals referred to in paragraphs
(4), (5) and (6) above. An application to qualify for such purchases of Class
A shares (an "NAV Account Application") may be obtained from the Transfer
Agent by calling (800) 688-3350. In addition, no sales load is charged on the
reinvestment of dividends or distributions, or in connection with certain
share exchanges described below under "Shareholder Services -- Exchange
Privilege." The Trust may terminate any exemption from the sales load by
providing notice in the Prospectus, but any such termination would only affect
future purchases of Class A shares. The reallowance to institutions may be
changed from time to time.

From time to time, the Co-Distributors, at their expense, may offer
additional promotional incentives to dealers.

Quantity Discounts

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<PAGE>
aggregate current value of $49,500 and subsequently purchases additional Class
A shares having a current value of $1,000, the load applicable to the
subsequent purchase would be reduced to 4.25% of the offering price.
Similarly, with respect to each subsequent investment, the current value of
all Class A shares of Eligible Portfolios that are beneficially owned by the
investor at the time of investment may be combined to determine the applicable
sales load.

The Transfer Agent will hold in escrow Class A shares equal to the
amount indicated in the Letter of Intent for payment of a higher sales load if
an investor does not purchase the full amount specified in the Letter of
Intent. The escrow will be released when an investor fulfills the terms of the
Letter of Intent by purchasing the specified amount. If total purchases within
the thirteen-month period of the Letter of Intent exceed the amount specified,
an adjustment will be made in the form of additional Class A shares credited
to the shareholder's account to reflect further reduced sales charges
applicable to such purchases. If total purchases are less than the amount
specified, an investor will be requested to remit an amount equal to the
difference between the sales load actually paid and the sales load applicable
to the total purchases. If such remittance is not received within thirty days,
the Transfer Agent, as attorney-in-fact pursuant to the terms of the Letter
of Intent, will redeem an appropriate number of Class A shares held in escrow
to realize the difference. Signing a Letter of Intent does not bind an
investor to purchase the full amount indicated at the sales load in effect at
the time of signing, but an investor must complete the intended purchase to
obtain the reduced sales load.

REDEMPTION OF SHARES
In General

Redemption orders are effected at the net asset value next determined
after receipt by the Transfer Agent of a proper notice of redemption in
accordance with the procedures set forth below.

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<PAGE>
Redemption Procedures

Shareholders of record may redeem shares in any amount by calling
(800) 688-3350 (provided they have made the appropriate election on the account
application) or by sending a written request to The Woodward Funds, c/o NBD
Bank, P.O. Box 7058, Troy, Michigan 48007-7058. Written requests to redeem
shares having a net asset value of more than $50,000 must have all signatures
of the registered owner(s) or their authorized legal representative guaranteed
by a commercial bank or trust company which is a member of the Federal Reserve
System or FDIC, a member firm of a national securities exchange or a savings
and loan association. A signature guaranteed by a savings bank or notarized by
a notary public is not acceptable. A signature guarantee will also be required
for a redemption request (in any amount) if the address of record for the
account has been changed within the previous 15 days or which requests that
the proceeds be paid to an account other than the one preauthorized on the
application, a payee or payees other than the registered owners of the
account, or an address other than the address of record. The Trust may require
additional supporting documents for redemptions made by corporations,
fiduciaries, executors, administrators, trustees, guardians and institutional
investors.

Redemption orders for Class A shares may be placed through an
institution or directly by telephone by calling (800) 688-3350. During periods
of unusual economic or market changes, telephone redemptions may be difficult
to implement. In such event, shareholders should mail their redemption
requests to their financial institutions or The Woodward Funds, c/o NBD Bank,
at the address shown above. Neither the Trust nor its Transfer Agent will be
responsible for the authenticity of instructions received by telephone that
are reasonably believed to be genuine. In attempting to confirm that telephone
instructions are genuine, the Trust and its Transfer Agent will use such
procedures as are considered reasonable, including recording those
instructions and requesting information as to account registration (including,
but not limited to, the name in which an account is registered, the account
number, or recent transactions in the account). To the extent that the Trust
and its Transfer Agent fail to use reasonable procedures to verify the
genuineness of telephone instructions, they may be liable for such
instructions that prove to be fraudulent and unauthorized. In all other cases,
shareholders will bear the risk of loss for fraudulent telephone transactions.

Other Redemption Information

The Trust will make payment for redeemed shares within the time period
prescribed by the settlement requirements of the Securities Exchange Act of
1934 after receipt by the Transfer Agent of a request in proper form. If
shares to be redeemed were purchased by check, the Trust will transmit the
redemption proceeds promptly upon clearance of such check, which could take up
to fifteen days from the purchase date. A shareholder having purchased shares
by wire must have filed an account application before any redemption requests
can be honored.

Currently, the Trust imposes no charge when shares are redeemed.
However, institutions may charge a fee for providing services in connection
with investments in Portfolio shares; NBD currently charges $16 for wire
transactions. The Trust reserves the right to redeem accounts involuntarily,
after sixty days' notice, if redemptions cause the account's net asset value
to remain at $1,000 or less. Under certain circumstances, the Trust may make
payment for redemption in securities or other property.

Questions concerning the proper form for redemption requests should be
directed to the Transfer Agent at (800) 688-3350 or an investor's institution.

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<PAGE>
SHAREHOLDER SERVICES

Exchange Privilege

Investors may exchange Class A shares which have been owned for at
least thirty days of the Municipal Bond and Michigan Municipal Bond
Portfolios, of the Woodward Intermediate Bond, Bond, Short Bond, Growth/Value,
Opportunity, Intrinsic Value, Capital Growth, Balanced and International
Equity Funds and of other investment portfolios of the Trust which may be
offered in the future and sold with a sales charge (each a "load portfolio")
and Class A shares which have been owned for at least thirty days of the
Woodward Equity Index, Money Market, Government, Treasury Money Market,
Tax-Exempt Money Market and Michigan Tax-Exempt Money Market Funds and of
other investment portfolios of the Trust which may be offered in the future
and sold without a sales charge (each a "no load portfolio"). The cost of the
acquired Class A shares will be their net asset value plus the applicable
sales load, if any.

Shareholders contemplating an exchange should carefully review the
Prospectus of the portfolio into which the exchange is being considered.
The Prospectus for any portfolio of the Trust may be obtained from an
investor's financial institution or from the Transfer Agent by
calling (800) 688-3350.

Exchanges will be effected by a redemption of Class A shares of the
portfolio held and the purchase of Class A shares of the portfolio acquired.
investors should make their exchange requests in writing or by telephone to
the financial institutions through which they purchased their original Class A
shares. It is the responsibility of financial institutions to transmit
exchange requests to the Transfer Agent. Other investors should transmit
exchange requests directly to the Transfer Agent. The total value of shares
being exchanged must at least equal the minimum investment requirement of the
portfolio whose shares are being acquired in the exchange. Only one exchange
in any thirty-day period is permitted and only shares that may be legally sold
in the

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<PAGE>
state of the investor's residence may be acquired in an exchange. The Trust
reserves the right to reject any exchange request.

Investors wishing to make an exchange should contact their
institutions or the Transfer Agent (as appropriate). Exchange requests in the
required form which are received by the Transfer Agent prior to 4:00 p.m.,
Eastern time or Early Closing Time, will be effected on the same Business Day
after such request is received. Requests received after 4:00 p.m., Eastern
time or Early Closing Time, will be effected on the next Business Day
after such request is received. During periods of significant economic
or market change, telephone exchanges may be difficult to complete.
In such event, an investor should mail the exchange request to his
financial institution or the Transfer Agent. Neither the Trust nor the
Transfer Agent will be responsible for the authenticity of instructions
received by telephone that are reasonably believed to be genuine. In
attempting to confirm that telephone instructions are genuine, the Trust and
its Transfer Agent will use such procedures as are considered reasonable,
including recording those instructions and requesting information as to
account registration (including, but not limited to, the name in which an
account is registered, the account number, or recent transactions in the
account). To the extent that the Trust and its Transfer Agent fail to use
reasonable procedures to verify the genuineness of telephone instructions,
they may be liable for such instructions that prove to be fraudulent and
unauthorized. In all other cases, shareholders will bear the risk of loss for
fraudulent telephone transactions. The Trust reserves the right to modify or
terminate its exchange procedures upon sixty days' notice to shareholders.

Reinvestment Privilege

Option to Make Systematic Withdrawals

The Trust has available to shareholders a Systematic Withdrawal Plan
pursuant to which a shareholder who owns Class A shares of any investment
portfolio having a minimum value of $15,000 at the time he elects under the
Plan may have a fixed sum distributed in redemption at regular intervals. An
application form and additional information regarding this service may be
obtained from an investor's financial institution or the Transfer Agent by
calling (800) 688-3350.

Automatic Investment

-23-

<PAGE>
(2) and (3) above. An NAV Account Application may be obtained from the
Transfer Agent by calling (800) 688-3350. The Plan can be implemented with any
financial institution that is a member of the Automated Clearing House. No
service fee is currently charged by the Trust for participating in the Plan.
Death or legal incapacity will terminate a shareholder's participation in the
Plan. Deposits, withdrawals and adjustments will be made electronically under
the rules of the Automated Clearing House Association.

Cross Reinvestment of Dividend Plan

The Trust makes available to shareholders a Cross Reinvestment of
Dividend Plan (the "Plan") pursuant to which a shareholder who owns Class A
shares of any portfolio with a minimum value of $10,000 at the time he elects
under the Plan may have dividends paid by such portfolio automatically
reinvested into Class A shares of another portfolio in which he has invested a
minimum of $1,000. Shareholders may obtain an application and additional
information from their institutions or the Transfer Agent by calling
(800) 688-3350.

Direct Deposit Program

If an investor receives federal salary, social security, or certain
veteran's, military or other payments from the federal government or elects to
use his employer's payroll deposit program, he is eligible for the Direct
Deposit Program. With this Program, an investor may purchase Class A shares
(minimum of $25) by having these deposits automatically deposited into his
Portfolio account. For instructions on how to enroll in the Direct Deposit
Program, an investor should call his institution or the Transfer Agent. Death
or legal incapacity will terminate an investor's participation in the Program.
An investor may elect at any time to terminate his participation by notifying
in writing the appropriate federal agency. Further, the Trust may terminate an
investor's participation upon thirty days' notice to him.

PERFORMANCE AND YIELD INFORMATION

From time to time, in advertisements or in reports to shareholders the
performance and yield of each class of shares of the Portfolios may be
compared to the performance of other mutual funds with similar investment
objectives and to bond or other relevant indices or to rankings prepared by
independent services or other financial or industry publications that monitor
the performance of mutual funds. For example, performance and yield may be
compared to data prepared by Lipper Analytical Services, Inc. Performance and
yield data as reported in national financial publications such as Money
Magazine, Forbes, Barron's, The Wall Street Journal and The New York Times, or
in publications of a local or regional nature, may also be used in comparing
the performance of a Portfolio.

"Yield" refers to the income generated by an investment in a class of
shares of a Portfolio over a thirty-day period identified in the
advertisement. This income is then "annualized," i.e., the income generated by
the investment during the thirty-day period is assumed to be earned and
reinvested at a constant rate and compounded semi-annually. The annualized
income is then shown as a percentage of the investment. The Portfolios may
from time to time advertise a "tax-equivalent yield" to demonstrate the level
of taxable yield necessary to produce an after-tax equivalent to that
achieved by the Portfolios. The "tax-equivalent yield" will be computed by
dividing the tax-exempt portion of a Portfolio's yield by a denominator
consisting of one minus a stated federal (and/or Michigan) income tax rate
and adding the product to that portion, if any, of the Portfolio's yield
which is not tax-exempt.

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<PAGE>
distributions made by the class during the period are reinvested in shares of
the class. When considering average total return figures for periods longer
than one year, it is important to note that a Class' annual total return for
any one year in the period might have been greater or less than the average
for the entire period.

DIVIDENDS AND DISTRIBUTIONS

Dividends from net investment income are declared and paid monthly by
each Portfolio. Each Portfolio's net realized capital gains are distributed at
least annually.

Dividends and distributions will reduce a class' net asset value by
the amount of the dividend or distribution. All dividends and distributions
are automatically reinvested (without any sales charge) in additional Class A
shares of the same Portfolio at their net asset value per share determined on
the payment date, unless the holder has notified the Transfer Agent in writing
that he elects to have dividends or capital gain distributions (or both) paid
in cash. Shareholders must make such election, or any revocation thereof, in
writing to their financial institutions or Transfer Agent. If an account
is established with telephone privileges, the registered owner or his
preauthorized legal representative may change the election to receive
dividends in cash to an election to receive dividends in shares by
telephoning the Transfer Agent at (800) 688-3350. The election will
become effective with respect to dividends paid after its receipt by the
Transfer Agent.

TAXES

Federal

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<PAGE>
In general, a Portfolio's investment company taxable income, if any, will be
its taxable income, including taxable interest subject to certain adjustments
and short term capital gains. Dividends derived from such income will
generally be taxable to shareholders. It is anticipated that no part of any
distribution by the Portfolios will be eligible for the dividends received
deduction for corporations.

If a Portfolio should hold certain private activity bonds issued after
August 7, 1986, shareholders must include, as an item of tax preference, the
portion of dividends paid by the Portfolio that is attributable to interest on
such bonds in their federal alternative minimum taxable income for purposes of
determining liability (if any) for the alternative minimum tax applicable to
individuals and corporations and the environmental tax applicable to
corporations. Corporate shareholders must also take all exempt-interest
dividends into account in determining certain adjustments for alternative
minimum and environmental tax purposes. Shareholders receiving Social Security
benefits should note that all exempt-interest dividends will be taken into
account in determining the taxability of such benefits.

Shareholders will be advised at least annually as to the federal
income tax consequences of distributions made to them each year.

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<PAGE>
The foregoing discussion summarizes some of the important tax
considerations generally affecting the Portfolios and their shareholders and
is not intended as a substitute for careful tax planning. Accordingly,
potential investors in the Portfolios should consult their tax advisers with
specific reference to their own tax situation.

State and Local

Dividends paid by the Michigan Municipal Bond Portfolio that are
derived from interest attributable to tax-exempt Michigan Municipal Securities
will be exempt from Michigan income tax, Michigan intangibles tax and Michigan
single business tax. Conversely, to the extent that the Portfolio's dividends
are derived from interest on obligations other than Michigan Municipal
Securities or certain U.S. Government Obligations (or are derived from short
term or long term gains), such dividends will be subject to Michigan income
tax. Michigan intangible tax and Michigan single business tax, even though the
dividends may be exempt for federal income tax purposes. The Portfolio is
unable to predict in advance the portion of its dividends that will be derived
from interest on Michigan Municipal Securities, but will mail to its
shareholders not later than sixty days after the close of the Portfolio's
taxable year a written notice containing information as to the interest
derived from Michigan Securities and exempt from Michigan income tax, Michigan
intangibles tax and Michigan single business tax.

Miscellaneous

The Trust may be subject to state or local taxes in jurisdictions in
which the Trust may be deemed to be doing business. In addition, in those
states or localities which have income tax laws the treatment of the Trust and
its shareholders under such laws may differ from treatment under federal
income tax laws. Shareholders are advised to consult their tax advisers
concerning the application of state and local taxes, which may have different
consequences from those of the federal income tax law described above.

MANAGEMENT

Trustees and Officers of the Trust

The Board of Trustees of the Trust is responsible for the management
of the business and affairs of the Trust. The Trustees and executive officers
of the Trust and their principal occupations for the last five years are set
forth below. Each Trustee has an address at The Woodward Funds, c/o NBD Bank,
611 Woodward Avenue, Detroit, Michigan 48226.

*Earl I. Heenan, Jr., Chairman and President

Director (since 1995), Vice Chairman (1988-1995) and President
(1955-1988), Detroit Mortgage & Realty Company; President (1989-1992)
and Trustee (since 1966), Cottage Hospital of Grosse Pointe (affiliate of
Henry Ford Health System); Trustee, Henry Ford Health Sciences Center
(since 1987); Trustee, Henry Ford Continuing Care Corporation (since 1980);
Trustee, Earhart Foundation (since 1980). He is 77 years old and his
address is 333 West Fort Street, Detroit, Michigan 48226.

- -------------
* Trustees who are "interested persons" of the Trust, as defined in the 1940
Act.

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<PAGE>
*Eugene C. Yehle, Trustee and Treasurer

Will M. Caldwell, Trustee

Nicholas J. De Grazia, Trustee

John P. Gould, Trustee

Steven G. Rothmeier Professor (since January, 1996), Distinguished
Service Professor of Economics of the University of Chicago Graduate School
of Business (since 1984); Dean of the University of Chicago Graduate School
of Business (1983-1993); Member of Economic Club of Chicago and Commercial
Club of Chicago; Director of Harbor Capital Advisors and Dimensional Fund
Advisors; Trustee, Prairie Family of Funds. He is 57 years old and his address
is University of Chicago Graduate School of Business, 1101 East 58th Street,
Chicago, Illinois 60637.

Marilyn McCoy, Trustee

Julius L. Pallone, Trustee

- -------------
* Trustees who are "interested persons" of the Trust, as defined in the 1940
Act.

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<PAGE>
Director, Detroit Symphony Orchestra (since 1985); Director, Oakland Commerce
Bank (since 1984) and Michigan Opera Theater (since 1981). He is 65 years old,
and his address is 26957 Northwestern Highway, Suite 288, Southfield, Michigan
48034.

*Donald G. Sutherland, Trustee

Partner of the law firm Ice, Miller, Donadio & Ryan, Indianapolis,
Indiana. He is 67 years old, and his address is One American Square, 34th
Floor, Indianapolis, Indiana 46204.

Donald L. Tuttle, Trustee

W. Bruce McConnel, III, Secretary

Partner of the law firm Drinker Biddle & Reath, Philadelphia,
Pennsylvania. He is 53 years old, and his address is 1345 Chestnut Street,
Philadelphia, Pennsylvania 19107.

The Trustees receive fees and are reimbursed for their expenses in
connection with each meeting of the Board of Trustees they attend. Additional
information on the compensation paid by the Trust to its Trustees and Officers
is included in the Statement of Additional Information.

Investment Adviser, Custodian and Transfer Agent

Robert T. Grabowski, First Vice President and manager of the municipal
desk at NBD, is the person primarily responsible for the day-to-day management
of the Municipal Bond Portfolio. Mr. Grabowski has been the portfolio manager
of the Portfolio since its inception and manager of the municipal desk since
1985. Mr. Grabowski and Rebecca L. Gersonde, Vice President, are primarily
responsible for the day-to-day management of the Michigan Municipal
Bond Portfolio. Ms. Gersonde joined NBD in 1982.

- ---------------
* Trustees who are "interested persons" of the Trust, as defined in the 1940
Act.

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<PAGE>
For its services under the Advisory Agreement, NBD is entitled to
receive advisory fees, computed daily and payable monthly, at an annual rate
of .65% of the average daily net assets of each of the Portfolios. In
addition, NBD is entitled to 4/10ths of the gross income earned by the
Portfolios on each loan of securities (excluding capital gains and losses, if
any). NBD may voluntarily waive its fees in whole or in part with respect to
any particular Portfolio.

Banking laws and regulations currently prohibit a bank holding company
registered under the Bank Holding Company Act of 1956 or any affiliate thereof
from sponsoring, organizing, controlling, or distributing the shares of a
registered open-end investment company continuously engaged in the issuance of
its shares, and prohibit banks generally from underwriting securities, but do
not prohibit such a bank holding company or affiliate from acting as
investment adviser, transfer agent, or custodian to such an investment company
or from purchasing shares of such a company as agent for and upon the order of
a customer. The Adviser and the Trust believe that the Adviser may perform the
advisory, custodial and transfer agency services for the Trust described in
this Prospectus, and that the Adviser, subject to such banking laws and
regulations, may perform the shareholder services contemplated by this
Prospectus, without violation of such banking laws or regulations. However,
future changes in legal requirements relating to the permissible activities of
banks and their affiliates, as well as future interpretations of present
requirements, could prevent the Adviser from continuing to perform investment
advisory, custodial or transfer agency services for the Trust or require the
Adviser to alter or discontinue the services provided by it to shareholders.

Sponsors and Co-Distributors

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<PAGE>
FoM and Essex act as sponsors and Co-Distributors of the Trust's
shares pursuant to the Distribution Agreement with the Trust which has been
entered into pursuant to the Distribution Plan described below.

Service and Distribution Plan

The Trust has adopted its Distribution Plan pursuant to Rule 12b-1
under the 1940 Act (the "Plan"). Under the Plan, the Trust incurs expenses
primarily intended to result in the sale of the Trust's shares in an amount
not to exceed .35 of 1% of the value of each portfolio's average daily net
assets calculated as follows in the case of each Portfolio: (i) fees payable
to the Co-Distributors pursuant to the Distribution Agreement; (ii) the actual
costs and expenses in connection with advertising and marketing the
Portfolio's shares; and (iii) fees pursuant to agreements with securities
dealers, financial institutions and other professionals ("Service Agents") for
administration or servicing of Portfolio shareholders ("Servicing"). Servicing
may include, among other things: answering client inquiries regarding the
Trust and the Portfolios; assisting clients in changing dividend options,
account designations and addresses; performing sub-accounting; establishing
and maintaining shareholder accounts and records; processing purchase and
redemption transactions; investing client cash account balances automatically
in Portfolio shares; providing periodic statements showing a client's account
balance and integrating such statements with those of other transactions and
balances in the client's other accounts serviced by the Service Agent;
arranging for bank wires; and such other services as the Trust may request, to
the extent the Service Agent is permitted by applicable statute, rule or
regulation. Under the Plan, the Trust also bears the cost of preparing and
printing Prospectuses for use in selling shares of the Trust and costs
associated with implementing and operating the Plan. These costs are included
in computing the .35 of 1% limitation set forth above.

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<PAGE>
Shareholder Servicing Plan

Pursuant to a Shareholder Servicing Plan ("Servicing Plan") adopted by
its Board of Trustees, the Trust may enter into agreements ("Servicing
Agreements") with banks and financial institutions, which may include the
Adviser and its affiliates ("Shareholder Servicing Agents"), under which they
will render shareholder administrative support services for their customers
who beneficially own Class A shares of the Portfolio. Such services, which are
described more fully in the Statement of Additional Information, may include
processing purchase and redemption requests from customers, placing net
purchase and redemption orders with a Co-Distributor, processing, among other
things, distribution payments from the Trust, providing necessary personnel
and facilities to establish and maintain customer accounts and records, and
providing information periodically to customers showing their positions in
Class A shares.

Trust Expenses

The Trust is responsible for the payment of its expenses. These
include, for example, fees payable to NBD as Adviser, or expenses otherwise
incurred by the Trust in connection with the management of the investment of
the Trust's assets such as brokerage fees, commissions and other transaction
charges, the fees and expenses of NBD as the Trust's Custodian and as its
Transfer Agent, the fees payable to the Co-Distributors under the Distribution
Agreement, the fees and expenses of Trustees, expenses associated with the
Trust's Distribution Plan and Shareholder Servicing Plan, outside auditing and
legal expenses, all taxes and corporate fees payable by the Trust, SEC fees,
state securities qualification fees, costs of preparing and printing
prospectuses for regulatory purposes and for distribution to shareholders,
costs of shareholder reports and shareholder meetings, and any extraordinary
expenses. Each Portfolio also pays for brokerage commissions and transfer
taxes (if any) in connection with the purchase and sale of portfolio
securities. Expenses attributable to a particular Portfolio of the Trust will
be charged to that Portfolio, and expenses not readily identifiable as
belonging to a particular Portfolio will be allocated by the Board of Trustees
among one or more Portfolios in such a manner as it shall deem fair and
equitable. For the fiscal year ended December 31, 1995, the Municipal Bond
and Michigan Municipal Bond Portfolios' total expenses after fee waivers
and reimbursements were .79% and .79% of their average net assets,
respectively. The Statement of Additional Information describes
in more detail the fees and expenses borne by the Trust.

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<PAGE>
OTHER INFORMATION

The Trust was organized as a Massachusetts business trust on April 21,
1987 under a Declaration of Trust which was amended and restated as of May 1,
1992. The Trust is a series fund having seventeen series of shares of
beneficial interest, each of which evidences an interest in a separate
investment portfolio. The Declaration of Trust permits the Board of Trustees
to issue an unlimited number of full and fractional shares and to create an
unlimited number of series of shares ("Series") representing interests in a
portfolio and an unlimited number of classes of shares within a Series. In
addition to the Portfolios described herein, the Trust offers the following
investment portfolios: the Woodward Intermediate Bond Fund, Bond Fund, Short
Bond Fund, Growth/Value Fund, Opportunity Fund, Intrinsic Value Fund, Capital
Growth Fund, Balanced Fund, International Equity, Equity Index Fund, Money
Market Fund, Government Fund, Treasury Money Market Fund, Tax-Exempt Money
Market Fund and Michigan Tax-Exempt Money Market Fund. The Trust has
established the following two distinct classes of shares within each
Portfolio described herein: Class I shares (Original Class) and Class A
shares (Special Class 1). A sales person and any other person or
institution entitled to receive compensation for selling or servicing
shares may receive different compensation with respect to different
classes of shares in the Series. Each share has $.10 par value,
represents an equal proportionate interest in the related portfolio
with other shares of the same class outstanding, and is entitled to such
dividends and distributions out of the income earned on the assets belonging
to such portfolio as are declared in the discretion of the Board of Trustees.

Shareholders are entitled to one vote for each full share held, and a
proportionate fractional vote for each fractional share held, and each Series
entitled to vote on a matter will vote thereon in the aggregate and not by
Series, except as otherwise expressly required by law or when the Board of
Trustees determines that the matter to be voted on affects only the interests
of shareholders of a particular Series. In addition, shareholders of each of
the Series have equal voting rights except that only shares of a particular
class within a Series are entitled to vote on matters affecting only that
class. Voting rights are not cumulative, and accordingly, the holders of more
than 50% of the aggregate number of shares of all Trust portfolios may elect
all of the Trustees.

As of March 29, 1996, NBD held beneficially or of record
approximately 60.26% and 38.84% of the outstanding shares of Municipal Bond
and Michigan Municipal Bond Portfolios, respectively, and therefore may be
considered to be a controlling person of the Trust for purposes of the 1940
Act.

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<PAGE>
[ BACK COVER, COLUMN 1 ]

No person has been authorized to give any information or to make any
representations not contained in this Prospectus, or in the Portfolios'
Statement of Additional Information incorporated herein by reference, in
connection with the offering made by this Prospectus and, if given or made,
such information or representations must not be relied upon as having been
authorized by the Trust, Adviser or Sponsors and Co- Distributors. This
Prospectus does not constitute an offering by the Portfolios or by their Co-
Distributors, in any jurisdiction in which such offering may not lawfully be
made.

TABLE OF CONTENTS Page

EXPENSE SUMMARY............................. 2
BACKGROUND.................................. 4
FINANCIAL HIGHLIGHTS........................ 5
INTRODUCTION................................ 7
PROPOSED REORGANIZATION..................... 7
INVESTMENT OBJECTIVES, POLICIES AND
RISK FACTORS............................ 7
OTHER INVESTMENT POLICIES................... 9
PURCHASE OF SHARES.......................... 16
PUBLIC OFFERING PRICE....................... 18
REDEMPTION OF SHARES........................ 20
SHAREHOLDER SERVICES........................ 22
PERFORMANCE AND YIELD
INFORMATION......................... 24
DIVIDENDS AND DISTRIBUTIONS................. 25
TAXES .................................... 25
MANAGEMENT.................................. 27
OTHER INFORMATION........................... 33

<PAGE>
[ BACK COVER, COLUMN 2 ]

CLASS A SHARES OF THE:

WOODWARD MUNICIPAL BOND FUND

WOODWARD MICHIGAN MUNICIPAL BOND FUND

THE WOODWARD FUNDS(R)

Prospectus
April 15, 1996

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<PAGE>

- ------------------------------------------------------------------------------
PROSPECTUS April 15, 1996
- ------------------------------------------------------------------------------

THE WOODWARD FUNDS
c/o NBD Bank, Transfer Agent
P.O. Box 7058
Troy, Michigan 48007-7058

24 Hour yield and performance information
Purchase and Redemption orders:
(800) 688-3350

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

Class I shares of the:

Woodward Intermediate Bond Fund
Woodward Bond Fund
Woodward Short Bond Fund
Woodward Municipal Bond Fund
Woodward Michigan Municipal Bond Fund

This Prospectus sets forth concisely information that a prospective
investor should consider before investing. Investors should read this
Prospectus and retain it for future reference. Additional information about
the Trust, contained in a Statement of Additional Information, has been filed
with the Securities and Exchange Commission (the "SEC") and is available upon
request without charge by writing to The Woodward Funds at the address above.
The Statement of Additional Information bears the same date as this Prospectus
and is incorporated by reference in its entirety into the Prospectus.

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

INVESTMENT ADVISER:

NBD Bank

<PAGE>
EXPENSE SUMMARY

The Trust currently offers Class I shares (formerly known as
"Institutional Shares") and Class A shares (formerly known as "Retail Shares")
in each of the Woodward Intermediate Bond Fund ("Intermediate Bond
Portfolio"), Woodward Bond Fund ("Bond Portfolio"), Woodward Short Bond Fund
("Short Bond Portfolio") Woodward Municipal Bond Fund ("Municipal Bond
Portfolio") and Woodward Michigan Municipal Bond Fund ("Michigan Municipal
Bond Portfolio"). Class I shares are sold primarily to NBD and its affiliated
and correspondent banks acting on behalf of their respective customers. Class
A shares are sold to the general public primarily through financial
institutions such as banks, brokers and dealers. Class A shares are offered in
a separate Prospectus. Investors should call (800) 688-3350, a Co-Distributor
or their financial institutions if they would like to obtain more information
concerning Class I shares and/or Class A shares of the Portfolios. The
following table is provided to assist investors in understanding the various
costs and expenses that an investor will indirectly incur as a beneficial
owner of Class I shares in each of the Portfolios.

<TABLE>
<CAPTION>
Michigan
Intermediate Short Municipal Municipal
Bond Bond Bond Bond Bond
Portfolio(1) Portfolio(1) Portfolio(1) Portfolio(1) Portfolio(1)
------------ ------------ ------------ ---------- ----------

<S> <C> <C> <C> <C> <C>
Shareholder Transaction Expenses
Maximum Sales Load
Imposed on Purchases....... None None None None None
(as a percentage of
offering price)
Sales Load
Imposed on Reinvested
Dividends................. None None None None None
Deferred Sales Load........... None None None None None
Redemption Fee................ None None None None None
Exchange Fee.................. None None None None None

Annual Operating Expenses
(as a percentage of
average net assets)
Management Fees............... .65% .65% .65% .65% .65%

12b-1 Fees.................... .008% .01% .004% . 017% .038%

Other Expenses(2)
(before no fee waivers
and/or expense
reimbursements)............ .062% .06% .156% .263% .352%
(after fee waivers
and/or expense
reimbursements)............ N/A N/A .126% .153% .132%
Total Operating Expenses
(before fee waivers
and/or expense
reimbursements)............ .72% .72% .81% .93% 1.04%
(after fee waivers
and/or expense
reimbursements)............ N/A N/A .78% .82% .82%
<FN>
- ---------
1. The expenses for each of the Portfolios have been restated to
reflect current expenses.

-2-

<PAGE>
2. Credits or charges not reflected in the expense table may be
incurred directly by customers of financial institutions in connection with an
investment in the Portfolios.
</TABLE>

<TABLE>
<CAPTION>
Michigan
Intermediate Short Municipal Municipal
Bond Bond Bond Bond Bond
Portfolio Portfolio Portfolio Portfolio Portfolio
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Example
You would pay the following
expenses on a $1,000
investment, assuming:
(1) a 5% annual return
and (2) redemption at the
end of each time period:
One Year:.................. $ 7.38 $ 7.38 $ 7.99 $ 8.41 $ 8.41
Three Years:............... 23.10 23.10 25.00 26.28 26.28
Five Years:................ 40.18 40.18 43.47 45.67 45.67
Ten Years:................. 89.69 89.69 96.88 101.66 101.66
</TABLE>

THE FOREGOING SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES OR RATES OF RETURN. ACTUAL EXPENSES OR RATE OF RETURN MAY BE
GREATER OR LESSER THAN THOSE SHOWN.

The example demonstrates the projected dollar amount of total
cumulative expenses that would be incurred over various periods with respect
to a hypothetical investment in Class I shares in each of the Portfolios,
based upon payment by the Portfolios of operating expenses at the respective
levels set forth in the expense table. For more complete descriptions of
Portfolio expenses, see "Investment Adviser, Custodian and Transfer Agent,"
"Sponsors and Co-Distributors," "Service and Distribution Plan" and "Trust
Expenses" under the heading "Management" in this Prospectus and the
financial statements and related notes contained in the Statement of
Additional Information.

-3-

<PAGE>
BACKGROUND

Shares of each Portfolio have been classified into two separate
classes of shares -- Class I shares and Class A shares. Only the Class I
shares are offered pursuant to this Prospectus. Until April 15, 1996, Class I
shares and Class A shares represented equal pro rata interests in a Portfolio.
As of such date, the Trust implemented its Shareholder Servicing Plan with
respect to Class A shares only and began to allocate Servicing Fees
attributable to such shares exclusively to them.

-4-

<PAGE>
FINANCIAL HIGHLIGHTS

The tables below provide supplementary information to the Portfolios'
financial statements contained in their Statement of Additional Information
and set forth certain information concerning the historic investment results
of Portfolio shares. They present a per share analysis of how each Portfolio's
net asset value has changed during the periods presented. The tables have been
derived from the Portfolios' financial statements which have been audited by
Arthur Andersen LLP, the Trust's independent public accountants, whose report
thereon is contained in the Statement of Additional Information along with the
financial statements. The financial data included in these tables should be
read in conjunction with the financial statements and related notes included
in the Statement of Additional Information. Further information about the
performance of the Portfolios is available in annual reports to shareholders.
The Statement of Additional Information and annual reports to shareholders may
be obtained from the Trust free of charge by calling (800) 688-3350.

<TABLE>
<CAPTION>
Intermediate Bond Portfolio

June 1, 1991
(Commencement)
of Operations)
Year Ended Year Ended Year Ended Year Ended to
December 31, December 31, December 31, December 31, December 31,
1995 1994 1993 1992 1991
------------ ------------ ------------ ------------ --------------

<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period..................... $ 9.21 $10.41 $10.28 $10.55 $10.00
Income from investment
operations:
Net investment income......... 0.59 0.56 0.59 0.71 0.40
Net realized and unrealized
gains (losses) on
investments................. 1.16 (1.20) 0.26 (0.10) 0.57
------------ ------------ ------------ ------------ ------------
Total from investment
operations.................. $ 1.75 $(0.64) $ 0.85 $ 0.61 $ 0.97
------------ ------------ ------------ ------------ ------------
Less distributions:
From net investment
income...................... $(0.59) $(0.55) $(0.59) $(0.71) $(0.40)
From realized
gains....................... -- (0.01) ( 0.13) ( 0.17) ( 0.02)
------------ ------------ ------------ ------------ ------------
Total distributions........... $(0.59) $(0.56) ($0.72) ($0.88) ($0.42)
------------ ------------ ------------ ------------ ------------
Net asset value, end of
period........................ $10.37 $ 9.21 $10.41 $10.28 $10.55
============ ============ ============ ============ ============
Total return.................... $19.48 (6.31%) 8.41% 6.00% 16.62%(a)
Ratios/Supplemental Data
Net assets, end of period....... $405,309,939 $393,019,168 $429,789,857 $220,432,255 $130,367,032
Ratio of expenses to average
net assets.................... 0.73% 0.74% 0.74% 0.74% 0.75%(a)
Ratio of net investment income
to average net assets......... 5.98% 5.73% 5.44% 6.91% 6.59%(a)
Portfolio turnover rate......... 36.47% 54.60% 92.80% 56.30% 7.38%
<FN>
- ---------
(a) Annualized for periods less than one year for comparability
purposes. Actual annual values may be less than or greater than those shown.
</TABLE>

-5-

<PAGE>
<TABLE>
<CAPTION>
Bond Portfolio

<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period...................... $ 9.01 $10.32 $10.25 $10.55 $10.00
Income from investment
operations:
Net investment income.......... 0.63 0.61 0.76 0.83 0.51
Net realized and unrealized
gains (losses) on
investments.................. 1.45 (1.31) 0.38 ( 0.17) 0.57
------------ ------------ ------------ ------------ ------------
Total from investment
operations................... $ 2.08 $(0.70) $ 1.14 $ 0.66 $ 1.08
------------ ------------ ------------ ------------ ------------
Less distributions:
From net investment
income....................... $(0.64) $(0.59) $(0.76) $(0.83) $(0.51)
From realized
gains........................ -- (0.02) (0.31) (0.13) (0.02)
------------ ------------ ------------ ------------ ------------
Total distributions............ $(0.64) $(0.61) $(1.07) $(0.96) $(0.53)
------------ ------------ ------------ ------------ ------------
Net asset value, end of
period......................... $10.45 $ 9.01 $10.32 $10.25 $10.55
============ ============ ============ ============ ============
Total return..................... 23.75% (6.99%) 11.39% 6.56% 18.45%(a)
Ratios/Supplemental Data
Net assets, end of period........ $517,565,579 $427,168,395 $501,196,278 $321,758,333 $237,673,316
Ratio of expenses to average
net assets..................... 0.74% 0.74% 0.73% 0.73% 0.75%(a)
Ratio of net investment income
to average net assets.......... 6.39% 6.36% 7.20% 8.08% 8.44%(a)
Portfolio turnover rate 41.91% 75.67% 111.52% 90.45% 8.19%
<FN>
- ---------
(a) Annualized for periods less than one year for comparability
purposes. Actual annual values may be less than or greater than those shown.
</TABLE>

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<PAGE>
<TABLE>
<CAPTION>
Short Bond Portfolio

September 17, 1994
(Commencement
Year-Ended of Operations) to
December 31, December 31,
1995 1994
------------ ------------------

<S> <C> <C>
Net asset value, beginning
of period...................... $ 9.84 $10.00
Income from investment
operations:
Net investment income.......... 0.58 0.17
Net realized and unrealized
gains (losses) on
investments.................. 0.39 (0.16)
------------ -----------
Total from investment
operations................... $ 0.97 $ 0.01
------------ -----------
Less distributions:
From net investment
income....................... $(0.58) $(0.17)
From realized
gains........................ 0.00 0.00
------------ -----------
Total distributions............ $(0.58) $(0.17)
------------ -----------
Net asset value, end of
period......................... $10.23 $ 9.84
============ ===========
Total return..................... 10.07% 0.21%(a)
Ratios/Supplemental Data
Net assets, end of period........ $163,336,855 $64,239,163
Ratio of expenses to average
net assets..................... 0.75% 0.75%(a)
Ratio of net investment income
to average net assets.......... 5.74% 5.92%(a)
Ratio of expenses to average net
assets without fee waivers/
reimbursed expenses............. 0.81% 0.93%(a)
Ratio of net investment income to
average net assets without fee
waivers/reimbursed expenses..... 5.68% 5.74%(a)
Portfolio turnover rate 30.94% 10.20%
<FN>
- ---------
(a) Annualized for periods less than one year for comparability
purposes. Actual annual values may be less than or greater than those shown.
</TABLE>

-7-

<PAGE>
<TABLE>
<CAPTION>
Municipal Bond Portfolio

February 1, 1993
(Commencement
Year Ended Year Ended of Operations) to
December 31, December 31, December 31
1995 1994 1993
------------ ------------ -----------------

<S> <C> <C> <C>
Net asset value, beginning of period.. $ 9.59 $10.69 $10.00
Income from investment operations:
Net investment income............... 0.48 0.50 0.45
Net realized and unrealized
gains (losses)
on investments.................... 1.08 (1.11) 0.69
----------- ----------- -----------
Total from investment operations.... $ 1.56 $(0.61) $ 1.14
----------- ----------- -----------
Less distributions:
From net investment income.......... (0.47) $(0.49) $(0.44)
----------- ----------- -----------
From realized gains................. 0.00 (0.01)
----------- ----------- -----------
Total distributions................. $(0.47) $(0.49) $(0.45)
----------- ----------- -----------
Net asset value, end of period........ $10.68 $ 9.59 $10.69
=========== =========== ===========
Total return.......................... 16.54% (5.72%) 12.69%(a)
Ratios/Supplemental Data
Net assets, end of period............. $76,963,564 $61,255,733 $54,703,974
Ratio of expenses to average net assets 0.79% 0.53% 0.19%(a)
Ratio of net investment income to
average net assets.................. 4.63% 4.94% 5.27%(a)
Ratio of expenses to average net assets
without fee waivers/reimbursed
expenses............................ 0.93% 0.88% 1.12%(a)
Ratio of net investment income to average
net assets without fee waivers/reimbursed
expenses............................ 4.49% 4.59% 4.34%(a)
Portfolio turnover rate............... 20.46% 19.11% 11.12%

<FN>
- ---------
(a) Annualized for periods less than one year for comparability
purposes. Actual annual values may be less than or greater than those shown.
</TABLE>

-8-

<PAGE>
<TABLE>
<CAPTION>
Michigan Municipal Bond Portfolio

February 1, 1993
(Commencement
Year Ended Year Ended of Operations) to
December 31, December 31, December 31,
1995 1994 1993
------------ ------------ -----------------
<S> <C> <C> <C>
Net asset value, beginning
of period...................... $9.54 $10.60 $10.00
Income from investment
operations:
Net investment income.......... 0.48 0.50 0.44
Net realized and unrealized
gains (losses) on
investments.................. 1.06 (1.06) 0.59
----------- ----------- -----------
Total from investment
operations................... $ 1.54 $(0.56) $ 1.03
----------- ----------- -----------
Less distributions:
From net investment
income....................... $(0.48) $(0.50) $(0.43)
From realized
gains........................ -- 0.00 0.00
----------- ----------- -----------
Total distributions............ $(0.48) $(0.50) $(0.43)
----------- ----------- -----------
Net asset value, end of
period......................... $10.60 $ 9.54 $10.60
=========== =========== ===========
Total return..................... 16.49% (5.42)% 11.50%(a)
Ratios/Supplemental Data
Net assets, end of period........ $53,453,160 $45,263,059 $42,113,795
Ratio of expenses to average
net assets..................... 0.79% 0.53% 0.19%(a)
Ratio of net investment income
to average net assets.......... 4.71% 5.01% 5.12%(a)
Ratio of expenses to average
net assets without fee
waivers/reimbursed
expenses....................... 1.04% 1.05% 1.21%(a)
Ratio of net investment income
to average net assets
without fee waivers/reimbursed
expenses....................... 4.46% 4.49% 4.10%(a)
Portfolio turnover rate.......... 26.97% 25.93% 41.70%
<FN>
- ---------
(a) Annualized for periods less than one year for comparability
purposes. Actual annual values may be less than or greater than those shown.
</TABLE>

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<PAGE>
INTRODUCTION

The Trust is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the"1940 Act"). The
Trust currently consists of seventeen investment portfolios, each of which
consists of a separate pool of assets with separate investment objectives and
policies. However, only the Class I shares of the Intermediate Bond, Bond,
Short Bond, Municipal Bond and Michigan Municipal Bond Portfolios are offered
pursuant to this Prospectus. The Intermediate Bond, Bond, Short Bond and
Municipal Bond Portfolios are classified as diversified investment portfolios
and the Michigan Municipal Bond Portfolio is classified as a non-diversified
investment portfolio under the 1940 Act.

PROPOSED REORGANIZATION

INVESTMENT OBJECTIVES, POLICIES AND RISK FACTORS

Intermediate Bond Portfolio

Bond Portfolio

The investment objective of the Bond Portfolio is to maximize total
rate of return by investing predominantly in intermediate and long-term debt

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<PAGE>
securities. During normal market conditions, the Portfolio's average weighted
portfolio maturity is expected to be between 6 and 12 years.

Short Bond Portfolio

Investment Policies Applicable to the Intermediate Bond, Bond and Short Bond
Portfolios

Municipal Bond Portfolio

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<PAGE>
Michigan Municipal Bond Portfolio

Investment Policies Applicable to the Municipal Bond and Michigan Municipal
Bond Portfolios

During normal market conditions each Portfolio's average weighted
portfolio maturity is expected to be between 7 and 20 years.

Investment Policies Applicable to All Portfolios

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<PAGE>
industry sectors, current economic cycles and the attractiveness and
creditworthiness of particular issuers. Depending upon the Adviser's analysis
of these and other factors, a Portfolio's holdings of issues in particular
industry sectors may be overweighted when compared to the relative industry
weightings in related recognized indices. The value of the Portfolios can be
expected to vary inversely with changes in prevailing interest rates.

OTHER INVESTMENT POLICIES

Ratings

If not rated as commercial paper, debt obligations acquired by the
Portfolios and Municipal Securities acquired by the Municipal Bond and
Michigan Municipal Bond Portfolios will be investment grade at the time of
purchase, i.e., obligations rated AAA, AA, A or BBB by Standard & Poor's
Ratings Group, Division of McGraw Hill ("S&P"), Fitch Investors Service
("Fitch"), Duff & Phelps Credit Co. ("Duff") or IBCA, Inc. ("IBCA") or Aaa,
Aa, A or Baa by Moody's Investors Service, Inc. ("Moody's") (each a "Rating
Agency") in the case of bonds, rated SP-2 or higher by S&P, MIG-2 or higher by
Moody's or F-2 or higher by Fitch, in the case of notes, rated A-2 or higher
by S&P, Prime-2 or higher by Moody's, F-2 or higher by Fitch or A2 or higher
by IBCA, in the case of tax-exempt commercial paper or VMIG or higher by
Moody's in the case of variable demand notes, or be unrated but deemed by the
Adviser to be comparable in quality at the time of purchase to instruments
that are so rated. Obligations rated in the lowest of the top four rating
categories (Baa by Moody's, BBB by S&P or Fitch or IBCA) are considered to
have less capacity to pay interest and repay principal and have certain
speculative characteristics. In the event that the rating of a security held
by the Municipal Bond or Michigan Municipal Bond Portfolios is reduced below
Baa by Moody's, BBB by S&P, BBB by Fitch or BBB by IBCA, the security will be
disposed of in an orderly fashion as soon as possible. The debt ratings are
described in the Statement of Additional Information.

Short-Term Investments

Each Portfolio may hold short-term U.S. Government obligations, "high
quality" money market instruments such as certificates of deposit, bankers'
acceptances and time deposits (i.e. those rated at the time of purchase within
the two highest rating categories or which are unrated at such time but are
deemed by the Adviser to be of comparable quality), repurchase agreements,
reverse repurchase agreements, short-term obligations issued by state and
local governmental issuers which carry yields that are competitive with those
of other types of high quality money market instruments, commercial paper,
notes, other short-term obligations, variable rate master demand notes, and
cash, pending investment, to meet anticipated redemption requests or if, in
the opinion of the Adviser, suitable bonds or other fixed income securities in
which the Portfolios invest are unavailable. Such investments may be in such
proportions as, in the opinion of the Adviser, existing circumstances may
warrant, and may include obligations of foreign banks and foreign branches of
U.S. banks. The Portfolios may also invest their cash balances in securities
issued by other investment companies which invest in high-quality, short-term
debt securities. These short-term investments are described in greater detail
in the Statement of Additional Information.

U.S. Government Obligations

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<PAGE>
Loan Marketing Association, Central Bank for Cooperatives, Federal Home Loan
Mortgage Corporation, Federal Intermediate Credit Banks, Tennessee Valley
Authority, Resolution Funding Corporation and Maritime Administration. The
Portfolios may also invest in interests in the foregoing securities, including
collateralized mortgage obligations guaranteed by a U.S. Government agency or
instrumentality, and in Government-backed trusts which hold obligations of
foreign governments that are guaranteed or backed by the full faith and credit
of the United States.

Stripped Government Obligations

SMBS are usually structured with two classes that receive different
proportions of the interest and principal distributions from a pool of
mortgage backed obligations. A common type of SMBS will have one class
receiving all of the interest, while the other class will receive all of the
principal. However, in some instances, one class will receive some of the
interest and most of the principal while the other class will receive most of
the interest and the remainder of the principal. With respect to investments
in interest only securities, should the underlying obligations experience
greater than anticipated prepayments of principal, a Portfolio may fail to
fully recoup its initial investment in these securities. The market value of
the class consisting entirely of principal payments may be more volatile in
response to changes in interest rates. The yields on a class of SMBS that
receives all or most of the interest are generally higher than prevailing
market yields on other mortgage backed obligations because their cash flow
patterns are more volatile. For interest only securities, there is a greater
risk that the initial investment will not be fully recouped.

Custodial Receipts and Certificates of Participation

The Intermediate Bond, Bond and Short Bond Portfolios may purchase
participations in trusts that hold U.S. Treasury securities (such as TIGRs and
CATs) where the trust participations evidence ownership in either the future
interest payments or the future principal payments on the U.S. Treasury
obligations. These participations are normally issued at a discount to their

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<PAGE>
"face value," and may exhibit greater price volatility than ordinary debt
securities because of the manner in which their principal and interest are
returned to investors.

Securities acquired by the Municipal Bond and Michigan Municipal Bond
Portfolios may be in the form of custodial receipts evidencing rights to
receive a specific future interest payment, principal payment or both on
certain Municipal Securities. Such securities are held in custody by a bank on
behalf of holders of the receipts. These custodial receipts are known by
various names, including "Municipal Receipts," "Municipal Certificates of
Accrual on Tax-Exempt Securities" ("M-CATs") and "Municipal Zero-Coupon
Receipts." The Portfolios may also purchase from time to time certificates of
participation that, in the opinion of counsel to the issuer, are exempt from
federal income tax. A certificate of participation gives a Portfolio an
undivided interest in a pool of Municipal Securities. Certificates of
participation may have fixed, floating or variable rates of interest. If a
certificate of participation is unrated, the Adviser will have determined that
the instrument is of comparable quality to those instruments in which a
Portfolio may invest pursuant to guidelines approved by the Board of Trustees.
For certain certificates of participation, a Portfolio will have the right to
demand payment, on not more than 30 days' notice, for all or any part of such
Portfolio's participation interest, plus accrued interest. As to these
instruments, each Portfolio intends to exercise its right to demand payment as
needed to provide liquidity, to maintain or improve the quality of its
investment portfolio or upon a default (if permitted under the terms of the
instrument).

Repurchase and Reverse Repurchase Agreements

Lending Portfolio Securities

To increase income or offset expenses, each Portfolio may lend its
portfolio securities to financial institutions such as banks and
broker-dealers in accordance with the investment limitations described below.
Agreements would require that the loans be continuously secured by collateral
equal at all times in value to at least the market value of the securities
loaned plus accrued interest. Collateral for such loans could include cash or
securities of the U.S. Government, its agencies or instrumentalities. Such
loans will not be made if, as a result, the aggregate of all outstanding loans
of a particular Portfolio exceeds one-third of the value of its total assets.
Loans of securities involve risks of delay in receiving additional collateral
or in recovering the securities loaned or possible loss of rights in the
collateral should the borrower of the securities become insolvent. Loans will
be made only to borrowers that provide

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<PAGE>
the requisite collateral comprised of liquid assets and when, in the Adviser's
judgment, the income to be earned from the loan justifies the attendant risks.

Illiquid Securities

In accordance with their fundamental investment limitation described
below, the Intermediate Bond, Bond, Municipal Bond and Michigan Municipal Bond
Portfolios will not knowingly invest more than 10% and the Short Bond
Portfolio will not knowingly invest more than 15% of the value of their
respective total assets in securities that are illiquid. Securities having
legal or contractual restrictions on resale or no readily available market,
and instruments (including repurchase agreements, variable and floating rate
instruments and time deposits) that do not provide for payment to the
Portfolios within seven days after notice are subject to this limitation.
Securities that have legal or contractual restrictions on resale but have a
readily available market are not deemed to be illiquid for purposes of this
limitation.

Borrowings

Asset Backed Securities

Asset backed securities held by the Intermediate Bond, Bond and Short
Bond Portfolios arise through the grouping by governmental, government-related
and private organizations of loans, receivables and other assets originated by
various lenders ("Asset Backed Securities"), as described below.

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<PAGE>
Prepayments on Asset Backed Securities generally increase with falling
interest rates and decrease with rising interest rates. Prepayment rates are
also influenced by a variety of economic and social factors. In general, the
collateral supporting non-mortgage backed securities is of shorter maturity
than mortgage loans and is less likely to experience substantial prepayments.
Like other fixed income securities, when interest rates rise the value of an
Asset Backed Security generally will decline; however, when interest rates
decline, the value of an Asset Backed Security with prepayment features may
not increase as much as that of other fixed income securities, and, as noted
above, changes in market rates of interest may accelerate or retard
prepayments and thus affect maturities.

Mortgage Backed Securities. Asset Backed Securities acquired by the
Intermediate Bond, Bond and Short Bond Portfolios consist of both mortgage and
non-mortgage backed securities. Mortgage backed securities represent an
ownership interest in a pool of mortgages, the interest on which is in most
cases issued and guaranteed by an agency or instrumentality of the U.S.
Government, although not necessarily by the U.S. Government itself. Mortgage
backed securities include collateralized mortgage obligations and mortgage
pass-through certificates.

Mortgage pass-through certificates provide the holder with a pro rata
interest in the underlying mortgages. One type of such certificate in which
the Portfolios may invest is a GNMA Certificate which is backed as to the
timely payment of principal and interest by the full faith and credit of the
U.S. Government. Another type is a FNMA Certificate, the principal and
interest of which are guaranteed only by FNMA itself, not by the full faith
and credit of the U.S. Government. Another type is a FHLMC Participation
Certificate which is guaranteed by FHLMC as to timely payment of principal and
interest. However, like a FNMA security, it is not guaranteed by the full
faith and credit of the U.S. Government. Privately issued mortgage backed
securities will carry a rating at the time of purchase of at least A by S&P or
by Moody's or, if unrated, will be in the Adviser's opinion equivalent in
credit quality to such rating. Mortgage backed securities issued by private
issuers, whether or not such obligations are subject to guarantees by the
private issuer, may entail greater risk than obligations directly or
indirectly guaranteed by the U.S. Government.

Non-Mortgage Backed Securities. The Intermediate Bond, Bond and Short
Bond Portfolios may also invest in non-mortgage backed securities including
interests in pools of receivables, such as motor vehicle installment purchase
obligations

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<PAGE>
and credit card receivables. Such securities are generally issued as pass-
through certificates, which represent undivided fractional ownership interests
in the underlying pools of assets. Such securities may also be debt
instruments, which are also known as collateralized obligations and are
generally issued as the debt of a special purpose entity organized solely for
the purpose of owning such assets and issuing such debt. Non-mortgage backed
securities are not issued or guaranteed by the U.S. Government or its agencies
or instrumentalities.

Variable and Floating Rate Instruments

The Intermediate Bond, Bond and Short Bond Portfolios may invest in
inverse floating rate debt instruments ("inverse floaters") some of which may
be leveraged. The interest rate of an inverse floater resets in the opposite
direction from the market rate of interest to which it is indexed. An inverse
floater may be considered to be leveraged to the extent that its interest rate
varies by a magnitude that exceeds the magnitude of the change in the index
rate of interest. The higher degree of leverage inherent in inverse floaters
is associated with greater volatility in their market values.

The absence of an active secondary market with respect to particular
variable and floating rate instruments could make it difficult for a Portfolio
to dispose of the instruments if the issuer defaulted on its payment
obligation or during periods that the Portfolio is not entitled to exercise
demand rights, and the Portfolio could, for these or other reasons, suffer a
loss with respect to such instruments. Variable and floating rate instruments
(including inverse floaters) will be subject to a Portfolio's limitation on
illiquid investments. See "Illiquid Securities."

Zero Coupon Obligations

Each Portfolio may invest in zero coupon obligations which are
discount debt obligations that do not make periodic interest payments although
income is generally imputed to the holder on a current basis. Such obligations
may have higher price volatility than those which require the payment of
interest periodically. The Adviser will consider the liquidity needs of the
Portfolios when any investment in zero coupon obligations is made.

Municipal and Related Securities

Municipal Securities acquired by the Municipal Bond and Michigan
Municipal Bond Portfolios may include general obligations, revenue
obligations, notes, and moral obligation bonds. General obligations are
secured by the issuer's pledge of its full faith, credit and taxing power for
the payment of principal and interest. Revenue obligations are payable only
from the revenues derived from a particular facility, class of facilities or,
in some cases, from the proceeds of a special excise or other specific revenue
source such as the user of the

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<PAGE>
facility being financed. Private activity bonds (i.e. bonds issued by
industrial development authorities) are in most cases revenue securities and
are not payable from the unrestricted revenues of the issuer. Consequently,
the credit quality of a private activity bond is usually directly related to
the credit standing of the private user of the facility involved. Although
interest paid on private activity bonds is exempt from regular federal income
tax, it may be treated as a specific tax preference item under the federal
alternative minimum tax. (See "Taxes") Notes are short-term instruments which
are obligations of the issuing municipalities or agencies and are sold in
anticipation of a bond sale, collection of taxes or receipt of other revenues.
Moral obligation bonds are normally issued by a special purpose public
authorities. If the issuer of a moral obligation bond is unable to met its
debt service obligations from current revenues, it may draw on a reserve fund,
the restoration of which is a moral commitment but not a legal obligation of
the state or municipality which created the issuer. Municipal Securities also
include municipal lease/purchase agreements which are similar to installment
purchase contracts for property or equipment issued by municipalities. The
Adviser will only invest in rated municipal lease/purchase agreements.

Among other securities, the Municipal Bond and Michigan Municipal Bond
Portfolios may purchase short-term Tax Anticipation Notes. Bond Anticipation
Notes, Revenue Anticipation Notes and other forms of short-term loans. Such
notes are issued with a short-term maturity in anticipation of the receipt of
tax or other funds, the proceeds of bonds or other revenues. The Portfolios
may also acquire zero coupon obligations, which have greater price volatility
than coupon obligations and which will not result in the payment of interest
until maturity.

Opinions relating to the validity of Municipal Securities and to the
exemption of interest thereon from federal income tax (and, with respect to
Michigan Municipal Securities, Michigan income taxes) are rendered by bond
counsel to the respective issues at the time of issuance. Neither the
Portfolios nor the Adviser will review the proceedings relating to the
issuance of Municipal Securities or the bases for such opinions.

Variable and Floating Rate Municipal Securities

Municipal Securities purchased by the Municipal Bond and Michigan Bond
Portfolios may include rated and unrated variable and floating rate tax-exempt
instruments. There may be no active secondary market with respect to a
particular variable or floating rate instrument. Nevertheless, the periodic
readjustments of their interest rates tend to assure that their value to a
Portfolio will approximate their par value. Illiquid variable and floating
rate instruments (instruments which are not payable upon seven days' notice
and do not have an active trading market) that are acquired by the Portfolios
are subject to Portfolios' limitation on illiquid instruments. See "Illiquid
Securities."

Futures Contracts and Related Options

The Intermediate Bond, Bond and Short Bond Portfolios may trade
futures contracts and options on futures contracts in U.S. domestic markets,
such as the Chicago Board of Trade and the International Monetary Market of
the Chicago Mercantile Exchange. They may purchase and sell futures contracts
which obligate a Portfolio to take or make delivery of fixed income securities
at maturity commonly known as interest rate futures contracts.

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<PAGE>
A Portfolio may sell a futures contract in order to offset an expected
decrease in the value of its portfolio that might otherwise result from a
market decline. A Portfolio may do so either to hedge the value of its
securities portfolio as a whole, or to protect against declines occurring
prior to sales of securities in the value of the securities to be sold. In
addition, a Portfolio may utilize futures contracts in anticipation of changes
in the composition of its holdings.

The Portfolios' commodities transactions must constitute bona fide
hedging or other permissible transactions pursuant to regulations promulgated
by the Commodities and Futures Trading Commission ("CFTC"). In addition, a
Portfolio may not engage in such transactions if the sum of the amount of
initial margin deposits and premiums paid for unexpired commodity options,
other than for bona fide hedging transactions, would exceed 5% of the
liquidation value of its assets, after taking into account unrealized profits
and unrealized losses on such contracts it has entered into; provided,
however, that in the case of an option that is in-the-money at the time of
purchase, the in-the-money amount may be excluded in calculating the
percentage limitation. Pursuant to SEC requirements, the Portfolios may be
required to segregate cash or high quality money market instruments in
connection with their commodities transactions in an amount generally equal to
the value of the underlying commodity. The Trust intends to comply with the
regulations of the CFTC exempting the Portfolios from registration as a
"commodity pool operator".

For a more detailed description of futures contracts and related
options, see Appendix B to the Statement of Additional Information.

Options

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<PAGE>
order to acquire the underlying security at a later date at a price that
avoids any additional cost that would result from an increase in the market
value of the security. A Portfolio may also purchase call options to increase
its return to investors at a time when the call is expected to increase in
value due to anticipated appreciation of the underlying security. Prior to its
expiration, a purchased put or call option may be sold in a closing sale
transaction (a sale by a Portfolio, prior to the exercise of an option that it
has purchased, of an option of the same series), and profit or loss from the
sale will depend on whether the amount received is more or less than the
premium paid for the option plus the related transaction costs.

In addition, each Portfolio may write covered call and secured put
options. A covered call option means that a Portfolio owns or has the right to
acquire the underlying security subject to call at all times during the option
period. A secured put option means that a Portfolio maintains in a segregated
account with its custodian cash or U.S. Government securities in an amount not
less than the exercise price of the option at all times during the option
period. Such options will be listed on a national securities exchange and
issued by the Options Clearing Corporation and may be effected on a principal
basis with primary reporting dealers in U.S. Government securities. The
aggregate value of the securities subject to options written by a Portfolio
will not exceed 25% of the value of its net assets. In order to close out an
option position prior to maturity, a Portfolio may enter into a "closing
purchase transaction" by purchasing a call or put option (depending upon the
position being closed out) on the same security with the same exercise price
and expiration date as the option which it previously wrote.

For additional information relating to option trading practices,
including particular risks thereof, see the Statement of Additional
Information.

Risk Factors Associated with Futures and Related Options

Successful use of futures by a Portfolio also is subject to the
Adviser's ability to predict correctly movements in the direction of
securities prices,

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<PAGE>
interest rates and other economic factors. For example, if the Portfolio has
hedged against the possibility of a decline in the market adversely affecting
the value of securities held in its portfolio and prices increase instead, the
Portfolio will lose part or all of the benefit of the increased value of
securities which it has hedged because it will have offsetting losses in its
futures positions. In addition, in such situations, if the Portfolio has
insufficient cash, it may have to sell securities to meet daily variation
margin requirements. Such sales of securities may, but will not necessarily,
be at increased prices which reflect the rising market. The Portfolio may have
to sell securities at a time when it may be disadvantageous to do so.

Risk Factors Associated with Derivative Instruments

The Portfolios may purchase certain "derivative instruments."
Derivative instruments are instruments that derive value from the performance
of underlying assets, interest or currency exchange rates, or indices, and
include (but are not limited to) futures contracts, options and structured
debt obligations (including collateralized mortgage obligations and various
floating rate instruments, including inverse floaters).

Derivative instruments present, to varying degrees, market risk that
the performance of the underlying assets, exchange rates or indices will
decline; credit risk that the dealer or other counterparty to the transaction
will fail to pay its obligations; volatility and leveraging risk that, if
interest or exchange rates change adversely, the value of the derivative
instrument will decline more than the assets, rates or indices on which it is
based; liquidity risk that a Portfolio will be unable to sell a derivative
instrument when it wants because of lack of market depth or market disruption;
pricing risk that the value of a derivative instrument (such as an option)
will not correlate exactly to the value of the underlying assets, rates or
indices on which it is based; and operations risk that loss will occur as a
result of inadequate systems and controls, human error or otherwise. Some
derivative instruments are more complex than others, and for those instruments
that have been developed recently, data are lacking regarding their actual
performance over complete market cycles.

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<PAGE>
Foreign Securities

The Intermediate Bond, Bond and Short Bond Portfolios may invest in
dollar-denominated obligations of foreign issuers. Such investments may
include both obligations of foreign corporations and banks, as well as
obligations of foreign governments and their political subdivisions.
Investments in foreign securities, whether made directly or indirectly,
involve certain inherent risks, such as political or economic instability of
the issuer or the country of issue, the difficulty of predicting international
trade patterns, changes in exchange rates of foreign currencies and the
possibility of adverse changes in investment or exchange control regulations.
There may be less publicly available information about a foreign company than
about a U.S. company. Listed foreign companies generally are not subject to
uniform accounting, auditing and financial reporting standards comparable to
those applicable to domestic companies. Further, foreign stock markets are
generally not as developed or efficient as those in the U.S. and in most
foreign markets volume and liquidity are less than in the U.S. Fixed
commissions on foreign stock exchanges are generally higher than the
negotiated commissions on U.S. exchanges, and there is generally less
government supervision and regulation of foreign stock exchanges, brokers and
listed companies than in the U.S. With respect to certain foreign countries,
there is a possibility of expropriation or confiscatory taxation limitations
on the removal of funds or other assets or diplomatic developments that could
affect investment within those countries. Because of these and other factors,
securities of foreign companies acquired by a Portfolio may be subject to
greater fluctuation in price than securities of domestic companies.

Supranational Bank Obligations

The Intermediate Bond, Bond and Short Bond Portfolios may invest in
obligations of supranational banks. Supranational banks are international
banking institutions designed or supported by national governments to promote
economic reconstruction, development or trade between nations (e.g., the World
Bank). Obligations of supranational banks may be supported by appropriated but
unpaid commitments of their member countries and there is no assurance that
these commitments will be undertaken or met in the future.

When-Issued Purchases and Forward Commitments

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<PAGE>
to engage in when-issued purchases and forward commitments for speculative
purposes but only in furtherance of their investment objectives.

Special Risk Considerations Applicable to the Michigan Municipal Bond
Portfolio

Moreover, the economy of the State of Michigan is heavily dependent
upon the automobile manufacturing industry. This industry is highly cyclical.
This factor affects the revenue streams of the State of Michigan and its
political subdivisions because it impacts on tax sources, particularly sales
taxes, income taxes and Michigan single business taxes.

Portfolio Turnover

Generally, the Portfolios will purchase securities for capital
appreciation or investment income, or both, and not for short-term trading
profits. However, a Portfolio may sell a portfolio investment soon after its
acquisition if the Adviser believes that such a disposition is consistent with
or in furtherance of the Portfolio's investment objective. Portfolio
investments may be sold for a variety of reasons, such as more favorable
investment opportunities or other circumstances. As a result, the Portfolios
are likely to have correspondingly greater brokerage commissions and other
transaction costs which are borne indirectly by shareholders. Portfolio
turnover may also result in the realization of substantial net capital gains.
(See "Taxes-Federal" in the Prospectus and "Additional Information Concerning
Taxes" in the Statement of Additional Information.) While it is not possible
to accurately predict portfolio turnover rates, the annual turnover rates for
the Intermediate Bond, Bond, Short Bond, Municipal Bond and Michigan Municipal
Bond Portfolios are not expected to exceed 300%, 400%, 300%, 100% and 100%,
respectively.

Investment Limitations

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<PAGE>
contained in the Statement of Additional Information under "Investment
Objectives, Policies and Risk Factors."

No Portfolio may:

1. Purchase any securities which would cause 25% or more of the value
of the Portfolio's total assets at the time of purchase to be invested in the
securities of one or more issuers conducting their principal business
activities in the same industry, provided that (a) there is no limitation with
respect to obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities and repurchase agreements secured by such
instruments, (b) wholly-owned finance companies will be considered to be in
the industries of their parents if their activities are primarily related to
financing the activities of the parents, (c) utilities will be divided
according to their services, for example, gas, gas transmission, electric and
gas, electric and telephone will each be considered a separate industry, (d)
personal credit and business credit businesses will be considered separate
industries, and (e) there is no limitation with respect to or arising out of
investments in Municipal Securities (other than private activity bonds).

2. Make loans, except that each Portfolio may purchase and hold debt
instruments and enter into repurchase agreements in accordance with its
investment objective and policies and may lend portfolio securities in an
amount not exceeding one-third of its total assets.

3. Borrow money or issue senior securities, except that each Portfolio
may borrow from banks and enter into reverse repurchase agreements for
temporary purposes in amounts not in excess of 10% of the value of its total
assets at the time of such borrowing; or mortgage, pledge or hypothecate any
assets, except in connection with any such borrowing and in amounts not in
excess of the lesser of the dollar amounts borrowed or 10% of the value of the
Portfolio's total assets at the time of such borrowing. No Portfolio will
purchase securities while its borrowings (including reverse repurchase
agreements) in excess of 5% of its total assets are outstanding. Securities
held in escrow or separate accounts in connection with a Portfolio's
investment practices described in the Statement of Additional Information or
in this Prospectus are not deemed to be pledged for purposes of this
limitation.

The Intermediate Bond, Bond, Municipal Bond and Michigan Municipal
Bond Portfolios may not invest more than 10% of their respective total assets
in illiquid investments. The Short Bond Portfolio may not invest more than 15%
of its total assets in illiquid investments. See "Illiquid Securities" above.

The Intermediate Bond, Bond, Short Bond and Municipal Bond Portfolios
may not purchase securities of any one issuer (other than securities issued or
guaranteed by the U.S. Government, its agencies or instrumentalities) if,
immediately after such purchase, more than 5% of the value of a Portfolio's
total assets would be invested in the securities of such issuer, or more than
10% of the issuer's outstanding voting securities would be owned by a
Portfolio, except that up to 25% of the value of the Portfolio's total assets
may be invested without regard to these limitations.

The Michigan Municipal Bond Portfolio may not with respect to 50% of
its total assets, invest more than 5% of its assets in securities of any one
issuer, except U.S. Government obligations or securities of other regulated
investment companies.

For purposes of the Investment Limitations above, (i) a security is
considered to be issued by the governmental entity (or entities) whose assets
and revenues back the security, or with respect to a private activity bond
that is backed only by the assets and revenues of a non-governmental user, a
security is considered to be issued by such non-governmental user; (ii) in
certain

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<PAGE>
circumstances, the guarantor of a guaranteed security may also be considered
to be an issuer in connection with such guarantee; and (iii) U.S. Government
obligations (including securities backed by the full faith and credit of the
United States) are deemed to be U.S. Government obligations for purposes of
the 1940 Act.

PURCHASE OF SHARES

In General

Purchase orders which are accompanied by payment (by check or wire
transfer) and received by the Transfer Agent in proper form on a Business Day
(as defined below) prior to the close of the New York Stock Exchange
("Exchange") are priced at net asset value of the particular Portfolio
determined on that Business Day. Purchase orders which are received by the
Transfer Agent after the close of trading on the Exchange on a Business Day or
on non-Business Days will be executed as of the determination of net asset
value on the next Business Day.

Questions concerning the purchase of shares should be directed to the
Transfer Agent at (800) 688-3350.

Net Asset Value and Pricing of Shares

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<PAGE>
Exchange closes prior to the close of its regular trading hours ("Early
Closing Time"), in which event the net asset value of each Portfolio
will be determined and its shares will be priced as of such Early
Closing Time. Net asset value per Class I share of a Portfolio is calculated
by dividing the value of all securities and other assets belonging to the
Portfolio allocable to that Class I, less the liabilities charged to that
Class I, by the number of the outstanding shares of such Class I.

Securities held by the Portfolios which are traded on only
over-the-counter markets and securities for which there were no transactions
are valued at the average of the current bid and asked prices. Fixed income
securities held by the Portfolios are valued according to the broadest and
most representative market, which ordinarily will be the over-the-counter
markets, whether in the United States or in foreign countries. Such securities
are valued at the average of the current bid and asked prices. Securities for
which accurate market quotations are not readily available, and other assets
are valued at fair value by the Adviser under the supervision of the Board of
Trustees. Securities may be valued on the basis of prices provided by
independent pricing services when the Adviser believes such prices reflect the
fair market value of such securities. The prices provided by pricing services
take into account institutional size trading in similar groups of securities
and any developments related to specific securities. For valuation purposes,
the value of assets and liabilities expressed in foreign currencies will be
converted to U.S. dollars equivalent at the prevailing market rate on the day
of valuation. A Portfolio's open futures contracts will be "marked-to-market."

REDEMPTION OF SHARES

The Trust will make payment for redeemed shares within the time period
prescribed by the settlement requirements of the Securities and Exchange Act
of 1934 after receipt by the Transfer Agent of a request in proper form. If
shares to be redeemed were purchased by check, the Trust will transmit the
redemption proceeds promptly upon clearance of such check, which could take up
to fifteen days from the purchase date. A shareholder of record having
purchased shares by wire must have filed an account application before any
redemption requests can be honored.

Currently, the Trust imposes no charge when shares are redeemed.
However, Banks may charge a fee for providing services in connection with
investments in

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<PAGE>
Portfolio shares. The Trust reserves the right to redeem shares involuntarily,
after sixty days notice, if redemptions cause an account's value to remain
at $1,000 or less. Under certain circumstances, the Trust may make payment
for redemptions in securities or other property.

Questions concerning the proper form for redemption requests should be
directed to the Transfer Agent at (800) 688-3350.

PERFORMANCE AND YIELD INFORMATION

"Yield" refers to the income generated by an investment in a class of
shares of a Portfolio over a thirty-day period identified in the
advertisement. This income is then "annualized," i.e., the income generated by
the investment during the thirty-day period is assumed to be earned and
reinvested at a constant rate and compounded semi-annually. The annualized
income is then shown as a percentage of the investment. The Municipal Bond and
Michigan Municipal Bond Portfolios may from time to time advertise a
"tax-equivalent yield" to demonstrate the level of taxable yield necessary to
produce an after-tax yield equivalent to that achieved by the Portfolios. The
"tax-equivalent yield" will be computed by dividing the tax-exempt portion of
a Portfolio's yield by a denominator consisting of one minus a stated federal
(and/or Michigan) income tax rate and adding the product to that portion, if
any, of the Portfolio's yield which is not tax-exempt.

Performance of each class of shares is based on historical earnings
and will fluctuate and is not intended to indicate future performance. The
investment return and principal value of an investment in a class will
fluctuate so that a shareholder's shares, when redeemed, may be worth more or
less than their original cost. Performance data may not provide a basis for
comparison with bank deposits and other investments which provide a fixed
yield for a stated period of time. Yield and total return data should also be
considered in light of the risks associated with a Portfolio's portfolio
composition, quality, maturity, operating expenses and market conditions. Any
fees charged by

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<PAGE>
financial institutions directly to their customer accounts in connection with
investments in shares will not be reflected in performance calculations.

DIVIDENDS AND DISTRIBUTIONS

Dividends from net investment income are declared and paid monthly by
the Portfolios. Each Portfolio's net realized capital gains are distributed at
least annually.

TAXES

Federal

Qualification as a regulated investment company under the Code for a
taxable year requires, among other things, that each Portfolio distribute to
its shareholders an amount equal to at least the sum of 90% of its investment
company taxable income and 90% of its net tax-exempt interest income for such
year. In general, a Portfolio's investment company taxable income will be its
taxable income, subject to certain adjustments and excluding the excess of any
net long-term capital gain for the taxable year over the net short-term
capital loss, if any, for such year. Each Portfolio intends to distribute as
dividends substantially all of its investment company taxable income and any
net tax-exempt interest income each year. Such dividends will be taxable as
ordinary income to the Intermediate Bond, Bond and Short Bond Portfolios'
shareholders who are not currently exempt from federal income taxes regardless
of whether a distribution is received in cash or reinvested in additional
shares. (Federal income taxes for distributions to an IRA are deferred under
the Code.) Such ordinary income distributions will qualify for the dividends
received deduction for corporations to the extent of the total qualifying
dividends received by the distributing Portfolio from domestic corporations
for the taxable year. Dividends derived from tax-exempt interest income
("exempt-interest dividends") paid by the Municipal Bond and Michigan
Municipal Bond Portfolios may be treated by their shareholders as items of
interest excludable from their gross income under Section 103(a) of the Code
unless under the circumstances applicable to the particular shareholder the
exclusion would be disallowed. (See Statement of Additional Information under
"Additional Information Concerning Taxes.") An exempt-interest dividend is any
dividend or part thereof (other than a capital gain dividend) paid by the
Municipal Bond and Michigan Bond Portfolios and designated as an
exempt-interest dividend in a written notice mailed to their shareholders not
later than sixty days after the close of such Portfolios' taxable year which
does not exceed in its aggregate the net Municipal Securities interest
received such the Portfolios for the taxable year.

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Shareholders will be advised at least annually as to the federal
income tax consequences of distributions made to them each year.

State and Local

Dividends paid by the Michigan Municipal Bond Portfolio that are
derived from interest attributable to tax-exempt Michigan Municipal Securities
will be exempt from Michigan income tax, Michigan intangibles tax and Michigan
single business tax. Conversely, to the extent that the Portfolio's dividends
are derived from interest on obligations other than Michigan Municipal
Securities or certain U.S. Government Obligations (or are derived from short
term or long term gains), such dividends will be subject to Michigan income
tax. Michigan intangibles tax and Michigan single business tax, even though
the dividends may be exempt for federal income tax purposes. The Portfolio is
unable to predict in advance the portion of its dividends that will be derived
from interest on Michigan Municipal Securities, but will mail to its
shareholders not later than sixty days after the close of the Portfolio's
taxable year a written notice

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<PAGE>
containing information as to the interest derived from Michigan Securities and
exempt from Michigan income tax, Michigan intangibles tax and Michigan single
business tax.

Miscellaneous

The Trust may be subject to state or local taxes in jurisdictions in
which the Trust may be deemed to be doing business. In addition, in those
states or localities which have income tax laws the treatment of the Trust and
its shareholders under such laws may differ from treatment under federal
income tax laws. Shareholders are advised to consult their tax advisers
concerning the application of state and local taxes, which may have different
consequences from those of the federal income tax law described above.

MANAGEMENT

Trustees and Officers of the Trust

The Board of Trustees of the Trust is responsible for the management
of the business and affairs of the Trust. The Trustees and executive officers
of the Trust and their principal occupations for the last five years are set
forth below. Each Trustee has an address at The Woodward Funds, c/o NBD Bank,
611 Woodward Avenue, Detroit, Michigan 48226.

*Earl I. Heenan, Jr., Chairman and President

Director (since 1995), Vice Chairman (1988-1995) and President
(1955-1988), Detroit Mortgage & Realty Company; President (1989-1992)
and Trustee (since 1966), Cottage Hospital of Grosse Pointe (affiliate of
Henry Ford Health System); Trustee, Henry Ford Health Sciences Center
(since 1987); Trustee, Henry Ford Continuing Care Corporation (since 1980);
Trustee, Earhart Foundation (since 1980). He is 77 years old and his
address is 333 West Fort Street, Detroit, Michigan 48226.

*Eugene C. Yehle, Trustee and Treasurer

Will M. Caldwell, Trustee

[FN]
- ---------
* Trustees who are "interested persons" of the Trust, as defined in the 1940
Act.

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<PAGE>

Nicholas J. De Grazia, Trustee

John P. Gould, Trustee

Steven G. Rothmeier Professor (since January, 1996); Distinguished
Service Professor of Economics of the University of Chicago Graduate School
of Business (since 1984); Dean of the University of Chicago Graduate School
of Business (1983-1993); Member of Economic Club of Chicago and Commercial
Club of Chicago, Director of Harbor Capital Advisors and Dimensional Fund
Advisors; Trustee, Prairie Family of Funds. He is 57 years old and his address
is University of Chicago Graduate School of Business, 1101 East 58th Street,
Chicago, Illinois 60637.

Marilyn McCoy, Trustee

Vice President of Administration and Planning of Northwestern
University (1984-1985); Director of Planning and Policy Development for the
University of Colorado (1981-1985); Member of the Board of Directors of
Evanston Hospital, Chicago Metropolitan YMCA, Chicago Network and United
Charities; Member of the Chicago Economics Club; Trustee, Prairie Family of
Funds. She is 48 years old and her address is 1100 North Lake Shore Drive,
Chicago, Illinois 60611.

Julius L. Pallone, Trustee

*Donald G. Sutherland, Trustee

Partner of the law firm Ice, Miller, Donadio & Ryan, Indianapolis,
Indiana. He is 67 years old, and his address is One American Square, 34th
Floor, Indianapolis, Indiana 46204.

Donald L. Tuttle, Trustee

Vice President (since 1995), Senior Vice President (1992-1995),
Association for Investment Management and Research; Professor of Finance,
Indiana University (1970-1991); Vice President, Trust & Investment Advisers,
Inc. (1990-1991); Director, Federal Home Loan Bank of Indianapolis
(1981 to 1985). He is 61 years old, and his address is 5 Boar's Head Lane,
Charlottesville, Virginia 22903.

[FN]
- ---------
* Trustees who are "interested persons" of the Trust, as defined in the 1940
Act.

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<PAGE>

W. Bruce McConnel, III, Secretary

Partner of the law firm Drinker Biddle & Reath, Philadelphia,
Pennsylvania. He is 53 years old, and his address is 1345 Chestnut Street,
Philadelphia, Pennsylvania 19107.

Investment Adviser, Custodian and Transfer Agent

Douglas S. Swanson, First Vice President, and Ricardo F. Cipicchio,
Vice President, are primarily responsible for the day-to-day management of the
Intermediate Bond and Bond Portfolios. Mr. Swanson joined NBD in 1983 after
receiving an M.S. in Management from the Massachusetts Institute of Technology
(Sloan School). Prior to joining NBD in 1989, Mr. Cipicchio was employed by
CITGO as a petroleum engineer. Mr. Cipicchio received an MBA in Finance from
the University of Michigan.

Robert T. Grabowski, First Vice President and manager of the municipal
desk at NBD, is the person primarily responsible for the day-to-day management
of the Municipal Bond and Michigan Municipal Bond Portfolios. Mr. Grabowski
has been the portfolio manager of the Portfolio since its inception and
manager of the municipal desk since 1985. Rebecca L. Gersonde, Vice President,
is the associate manager for both portfolios. Ms. Gersonde joined NBD in 1982.

For its services under the Advisory Agreement, NBD is entitled to
receive an advisory fee, computed daily and payable monthly, at an annual rate
of .65% of the average daily net assets of each of the Portfolios. In
addition, NBD is entitled to 4/10ths of the gross income earned by the
Intermediate Bond, Bond, Municipal Bond and Michigan Municipal Bond Portfolios
on each loan of securities (excluding capital gains and losses, if any). NBD
may voluntarily waive its fee in whole or in part with respect to any
particular Portfolio.

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<PAGE>
Banking laws and regulations currently prohibit a bank holding company
registered under the Bank Holding Company Act of 1956 or any affiliate thereof
from sponsoring, organizing, controlling, or distributing the shares of a
registered open-end investment company continuously engaged in the issuance of
its shares, and prohibit banks generally from underwriting securities, but do
not prohibit such a bank holding company or affiliate from acting as
investment adviser, transfer agent, or custodian to such an investment company
or from purchasing shares of such a company as agent for and upon the order of
a customer. The Adviser and the Trust believe that the Adviser may perform the
advisory, custodial and transfer agency services for the Trust described in
this Prospectus, and that the Adviser, subject to such banking laws and
regulations, may perform the shareholder services contemplated by this
Prospectus, without violation of such banking laws or regulations. However,
future changes in legal requirements relating to the permissible activities of
banks and their affiliates, as well as future interpretations of present
requirements, could prevent the Adviser from continuing to perform investment
advisory, custodial or transfer agency services for the Trust or require the
Adviser to alter or discontinue the services provided by it to shareholders.

Sponsors and Co-Distributors

Service and Distribution Plan

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pursuant to the Distribution Agreement; (ii) the actual costs and expenses in
connection with advertising and marketing the Portfolio's shares; and (iii)
fees pursuant to agreements with securities dealers, financial institutions
and other professionals ("Service Agents") for administration or servicing of
Portfolio shareholders ("Servicing"). Servicing may include, among other
things: answering client inquiries regarding the Trust and the Portfolios;
assisting clients in changing dividend options, account designations and
addresses; performing sub-accounting; establishing and maintaining
shareholder accounts and records; processing purchase and redemption
transactions; investing client cash account balances automatically in
Portfolio shares; providing periodic statements showing a client's account
balance and integrating such statements with those of other transactions and
balances in the client's other accounts serviced by the Service Agent;
arranging for bank wires; and such other services as the Trust may request, to
the extent the Service Agent is permitted by applicable statute, rule or
regulation. Under the Plan, the Trust also bears the cost of preparing and
printing Prospectuses for use in selling shares of the Trust and costs
associated with implementing and operating the Plan. These costs are included
in computing the .35 of 1% limitation set forth above.

Trust Expenses

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Trust will be charged to that Portfolio and expenses not readily identifiable
as belonging to a particular Portfolio will be allocated by the Board of
Trustees among one or more Portfolios in such a manner as it shall deem fair
and equitable. For the fiscal year ended December 31, 1995, the Intermediate
Bond, Bond, Short Bond, Municipal Bond and Michigan Municipal Bond Portfolios'
total expenses were .73%, .74%, .75%, .79% and .79% (after fee waivers, if
any) of their average net assets, respectively. The Statement of Additional
Information describes in more detail the fees and expenses borne by the Trust.

OTHER INFORMATION

The Trust was organized as a Massachusetts business trust on April 21,
1987 under a Declaration of Trust which was amended and restated as of May 1,
1992. The Trust is a series fund having seventeen series of shares of
beneficial interest, each of which evidences an interest in a separate
investment portfolio. The Declaration of Trust permits the Board of Trustees
to issue an unlimited number of full and fractional shares and to create an
unlimited number of series of shares ("Series") representing interests in a
portfolio and an unlimited number of classes of shares within a Series. In
addition to the Portfolios described herein, the Trust offers the following
investment portfolios: the Woodward Growth/Value Fund, Opportunity Fund,
Intrinsic Value Fund, Capital Growth Fund, Balanced Fund, Equity Index Fund,
International Equity Fund, Money Market Fund, Government Fund, Treasury Money
Market Fund, Tax-Exempt Money Market Fund and Michigan Tax-Exempt Money Market
Fund. The Trust has established the following two distinct classes of shares
within each Portfolio described herein: Class I shares (Original Class)
and Class A shares (Special Class 1). A sales person and any other
person or institution entitled to receive compensation for selling or
servicing shares may receive different compensation with respect to
different classes of shares in the Series. Each share has $.10 par
value, represents an equal proportionate interest in the related
portfolio with other shares of the same class outstanding, and is
entitled to such dividends and distributions out of the income earned on the
assets belonging to such portfolio as are declared in the discretion of the
Board of Trustees.

Shareholders are entitled to one vote for each full share held, and a
proportionate fractional vote for each fractional share held, and each Series
entitled to vote on a matter will vote thereon in the aggregate and not by
Series, except as otherwise expressly required by law or when the Board of
Trustees determines that the matter to be voted on affects only the interests
of shareholders of a particular series. In addition, shareholders of each of
the Series have equal voting rights except that only shares of a particular
class within a Series are entitled to vote on matters affecting only that
class. Voting rights are not cumulative, and accordingly, the holders of more
than 50% of the aggregate number of shares of all Trust portfolios may elect
all of the Trustees.

As of March 29, 1996, NBD held beneficially or of record
approximately 87.05%, 87.91%, 91.01%, 60.26% and 38.84% of the outstanding
shares of the Intermediate Bond, Bond, Short Bond, Municipal Bond and Michigan
Municipal Bond Portfolios, respectively, and therefore may be considered to be
a controlling person of the Trust for purposes of the 1940 Act.

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assist shareholder communications in connection with any meeting of
shareholders as prescribed in Section 16(c) of the 1940 Act.

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[ BACK COVER, COLUMN 1 ]

No person has been authorized to give
any information or to make any
representations not contained in this
Prospectus, or in the Portfolios'
Statement of Additional Information
incorporated herein by reference, in
connection with the offering made by
this Prospectus and, if given or
made, such information or
representations must not be relied
upon as having been authorized by the
Trust, Adviser or Sponsors and Co-
Distributors. This Prospectus does
not constitute an offering by the
Portfolios or by their Co-
Distributors, in any jurisdiction in
which such offering may not lawfully
be made.

TABLE OF CONTENTS Page

EXPENSE SUMMARY............................. 2
BACKGROUND.................................. 4
FINANCIAL HIGHLIGHTS........................ 5
INTRODUCTION................................ 10
PROPOSED REORGANIZATION..................... 10
INVESTMENT OBJECTIVES, POLICIES AND
RISK FACTORS................................ 10
OTHER INVESTMENT POLICIES................... 13
PURCHASE OF SHARES.......................... 26
REDEMPTION OF SHARES........................ 27
PERFORMANCE AND YIELD
INFORMATION............................... 28
DIVIDENDS AND DISTRIBUTIONS................. 29
TAXES .................................... 29
MANAGEMENT.................................. 31
OTHER INFORMATION........................... 36

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[ BACK COVER, COLUMN 2 ]

CLASS I SHARES OF THE:

WOODWARD INTERMEDIATE BOND FUND

WOODWARD BOND FUND

WOODWARD SHORT BOND FUND

WOODWARD MUNICIPAL BOND FUND

WOODWARD MICHIGAN MUNICIPAL BOND FUND

THE WOODWARD FUNDS(R)

Prospectus
April 15, 1996

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