RS INVESTMENT TRUST, 497, 2000-05-05

RS INVESTMENT TRUST
497, 2000-05-05

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RS INVESTMENT TRUST
388 Market Street, Suite 200
San Francisco, CA 94111 PROSPECTUS
800-766-FUND www.rsim.com May 1, 2000
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This Prospectus describes eleven mutual funds offered by RS Investment
Trust.

GROWTH
RS AGGRESSIVE GROWTH FUND
RS DIVERSIFIED GROWTH FUND
RS EMERGING GROWTH FUND
THE INFORMATION AGE FUND-REGISTERED TRADEMARK-
RS INTERNET AGE FUND-TM-
RS MICROCAP GROWTH FUND
RS MIDCAP OPPORTUNITIES FUND
RS VALUE + GROWTH FUND
VALUE
THE CONTRARIAN FUND-TM-
RS GLOBAL NATURAL RESOURCES FUND
RS PARTNERS FUND

You can call RS Investment Management at (800) 766-FUND to find out more
about the Funds. This Prospectus explains what you should know about the Funds
before you invest. Please read it carefully.

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES
OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO
THE
CONTRARY IS A CRIMINAL OFFENSE.
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TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
Summary information......................................... 3

RS Aggressive Growth Fund............................... 3
RS Diversified Growth Fund.............................. 5
RS Emerging Growth Fund................................. 7
The Information Age Fund-Registered Trademark-.......... 9
RS Internet Age Fund-TM-................................ 12
RS MicroCap Growth Fund................................. 14
RS MidCap Opportunities Fund............................ 16
RS Value + Growth Fund.................................. 19
The Contrarian Fund-TM-................................. 21
RS Global Natural Resources Fund........................ 24
RS Partners Fund........................................ 27

Fees and expenses........................................... 29

Other investment strategies and risks....................... 31

Management of the Funds..................................... 36

Portfolio managers.......................................... 37

How the Funds' shares are priced............................ 39

How to purchase shares...................................... 40

How to sell shares.......................................... 41

Exchanges................................................... 43

Dividends and distributions................................. 43

Taxes....................................................... 43

Distribution arrangements and Rule 12b-1 fees............... 44

Financial highlights........................................ 45
</TABLE>

2
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SUMMARY INFORMATION

Objective, Principal Investment Strategies, and Principal Risks.

RS AGGRESSIVE GROWTH FUND
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- - INVESTMENT OBJECTIVE. Capital appreciation.

- - PRINCIPAL INVESTMENT STRATEGIES. The Fund invests in companies of any size
that RSIM, L.P. believes offer the potential for significant increases in
value. The Fund generally invests in industry segments that are experiencing
rapid growth and in companies with proprietary advantages.

RSIM, L.P. typically considers a number of factors in evaluating a potential
investment, including, for example, whether the company has a distinct
proprietary element; whether it is gaining market share; whether it is
earning superior margins or experiencing superior profitability or whether
its incremental margins have potential to show improving returns; whether it
participates in an emerging space with a large market opportunity; and
whether it has a strong management team. RSIM, L.P. may consider selling a
security for the Fund if the issuer's growth rate deteriorates or its
performance otherwise disappoints, if the price of the security attains
RSIM, L.P.'s price target or otherwise appears relatively high to RSIM,
L.P., or if there is an unfavorable change in the issuer's management or
corporate plans or if institutional ownership of the security increases
substantially.

The Fund may sell securities short if RSIM, L.P. expects the value of the
securities to decline.

- - PRINCIPAL INVESTMENTS. The Fund invests principally in common stocks, but
may also invest any portion of its assets in preferred stocks and warrants.
The Fund will likely invest a portion of its assets in technology and
Internet-related companies.

- - PRINCIPAL RISKS.

- It is possible to lose money on an investment in the Fund.

- EQUITY SECURITIES. One risk of investing in the Fund is the risk that
the value of the equity securities in the portfolio will fall, or will
not appreciate as anticipated by RSIM, L.P., due to factors that
adversely affect particular companies in the portfolio and/or the U.S.
equities markets in general.

- OVERWEIGHTING Overweighting investments in certain sectors or
industries of the U.S. stock market increases the risk that the Fund
will suffer a loss because of general advances or declines in the
prices of stocks in those sectors or industries.

- TECHNOLOGY AND INTERNET INVESTMENTS. The Fund's investments in
technology and Internet-related companies may be highly volatile.
Changes in their prices may reflect changes in investor evaluation of a
particular product or group of products, or the prospects of a company
to develop and market a particular technology successfully, or of
technology or Internet-related investments generally.

- SMALL COMPANIES. Although the Fund may invest its assets in companies
of any size, it is likely that some portion of the Fund's assets will
be invested in smaller companies. These companies may have limited
product lines, markets, or financial resources, or may depend on a
limited management group. They may be recently organized, without
proven records of success. Their securities may trade infrequently and
in limited volumes. As a result, the prices of these securities may
fluctuate more than prices of securities of larger, more widely traded
companies and the

3
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Fund may experience difficulty in establishing or closing out positions
in these securities at prevailing market prices. Also, there may be
less publicly available information about small companies or less
market interest in their securities as compared to larger companies,
and it may take longer for the prices of the securities to reflect the
full value of their issuer's earnings potential or assets.

- SHORT SALES AND SHORT POSITIONS. The Fund may sell securities short
and may take short positions on broad securities market indexes, such
as the Standard & Poor's 500 Index. The Fund may sell a security short
and borrow the same security from a broker or other institution to
complete the sale when RSIM, L.P. anticipates that the price of the
security will decline. The Fund may sell futures contracts and related
options on a broad market index if RSIM, L.P. expects a broad market
decline. Short positions may result in a loss if the market price of
the security or index in question increases between the date when the
Fund enters into the short position and the date on which the Fund
closes the short position. The Fund may enter into short sales on
securities with a value of up to 25% of the Fund's total assets.

- PORTFOLIO TURNOVER. Frequent purchases and sales of the Fund's
portfolio securities involve expenses to the Fund, including brokerage
commissions or dealer mark-ups and other transaction costs. They may
also result in realization of taxable capital gains, which may be taxed
to shareholders at ordinary income tax rates. RSIM, L.P. anticipates
that the portfolio turnover rate for the Fund's first full year of
operation will not exceed 200%.

4
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RS DIVERSIFIED GROWTH FUND
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- - INVESTMENT OBJECTIVE. To seek long-term capital growth.

- - PRINCIPAL INVESTMENT STRATEGIES. The Fund invests in small-capitalization
value and growth companies across a broadly diversified mix of industry
sectors and companies. The Fund invests primarily in stocks of companies with
market capitalizations of up to $1.5 billion, but may invest in securities of
larger companies.

In selecting investments for the Fund, RSIM, L.P. may look to see whether
the company has a superior management team; whether the company has
experienced or has the potential for superior earnings per share momentum;
and whether there is a possible catalyst that has the potential to drive
earnings and valuations higher (for example, new management, a new product
launch). RSIM, L.P. may consider selling a security for the Fund if the
stock price declines substantially below the purchase price, if the price of
the security attains RSIM, L.P.'s price target or otherwise appears
relatively high to RSIM, L.P., if the company's business fundamentals turn
negative in RSIM, L.P.'s view, or if RSIM, L.P. believes that another
investment offers a better opportunity.

- - PRINCIPAL INVESTMENTS. The Fund invests principally in common and preferred
stocks and warrants. The Fund will likely invest a portion of its assets in
technology and Internet-related companies.

- - PRINCIPAL RISKS.

- It is possible to lose money on an investment in the Fund.

- SMALL COMPANIES. The Fund invests primarily in small companies, which
tend to be more vulnerable to adverse developments than larger
companies. These companies may have limited product lines, markets, or
financial resources, or may depend on a limited management group. Their
securities may trade infrequently and in limited volumes. They may be
recently organized, without proven records of success. As a result, the
prices of these securities may fluctuate more than the prices of
securities of larger, more widely traded companies and the Fund may
experience difficulty in establishing or closing out positions in these
securities at prevailing market prices. Also, there may be less
publicly available information about small companies or less market
interest in their securities as compared to larger companies, and it
may take longer for the prices of the securities to reflect the full
value of their issuers' earnings potential or assets.

- TECHNOLOGY AND INTERNET INVESTMENTS. The Fund's investments in
technology and Internet-related companies may be highly volatile.
Changes in their prices may reflect changes in investor evaluation of a
particular product or group of products, of the prospects of a company
to develop and market a particular technology successfully, or of
technology and Internet-related investments generally.

- PORTFOLIO TURNOVER. Frequent purchases and sales of the Fund's
portfolio securities involve expense to the Fund, including brokerage
commissions or dealer mark-ups and other transaction costs. They may
also result in realization of taxable capital gains, which may be taxed
to shareholders at ordinary income tax rates.

5
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PERFORMANCE INFORMATION; BAR CHART

The following information provides some indication of the risk of investing
in the Fund by showing changes in the Fund's performance from year to year, and
by comparing the Fund's returns with those of a broad measure of market
performance. The bar chart shows changes in the Fund's performance for the last
three calendar years. The table following the bar chart compares the Fund's
performance to a broad-based market index. THE FUND'S PAST PERFORMANCE IS NOT AN
INDICATION OF FUTURE PERFORMANCE. IT IS POSSIBLE TO LOSE MONEY ON AN INVESTMENT
IN THE FUND. The Fund may not achieve its investment objective.

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
ANNUAL RETURN (%)
CALENDAR YEAR END
<S> <C>
1997 29.45
1998 16.28
1999 150.21
</TABLE>

During the periods shown above, the highest quarterly return was 62.94% for the
quarter ended December 31, 1999, and the lowest was -16.25% for the quarter
ended September 30, 1998.

TABLE

AVERAGE ANNUAL TOTAL RETURNS (FOR SINCE INCEPTION
PERIODS ENDING DECEMBER 31, 1999) PAST ONE YEAR (8/1/96)
<S> <C> <C>
RS Diversified Growth Fund 150.21% 57.08%
Russell 2000 Index* 21.26% 15.87%
</TABLE>

* The Russell 2000 Index is an unmanaged market capitalization-weighted index
composed of 2,000 U.S. companies with an average market capitalization of $467
million. Investment results assume the reinvestment of dividends paid on the
stocks constituting the index.

6
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RS EMERGING GROWTH FUND
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- - INVESTMENT OBJECTIVE. Capital appreciation.

- - PRINCIPAL INVESTMENT STRATEGIES. The Fund invests primarily in smaller,
rapidly growing emerging companies. The Fund generally invests in industry
segments that are experiencing rapid growth and in companies with proprietary
advantages. RS Investment Management, Inc. ("RSIM, Inc.") typically considers
a number of factors in evaluating potential investments, including, for
example, whether the company has a distinct proprietary element; whether it
is gaining market share; whether it is earning superior margins or
experiencing superior profitability; and whether it has a strong management
team. RSIM, Inc. may consider selling a security for the Fund if the issuer's
growth rate deteriorates or its performance otherwise disappoints, if the
price of the security attains RSIM, Inc.'s price target or otherwise appears
relatively high to RSIM, Inc., or if there is an unfavorable change in the
issuer's management or corporate plans or if institutional ownership of the
security increases substantially.

- - PRINCIPAL INVESTMENTS. The Fund invests in a diversified portfolio of equity
securities (principally common stocks) of companies that RSIM, Inc. believes
have the potential for more rapid growth than the overall economy. The Fund
normally invests at least 65% of its assets in such emerging growth
companies. Although the Fund may invest in companies of any size, it is
likely under current market conditions that a substantial amount of its
investments will be in companies with market capitalizations of $1.5 billion
or less. The Fund will likely invest a portion of its assets in technology
and Internet-related companies.

- - PRINCIPAL RISKS.

- It is possible to lose money on an investment in the Fund.

- EQUITY SECURITIES. One risk of investing in the Fund is the risk that
the value of the equity securities in the portfolio will fall, or will
not appreciate as anticipated by RSIM, Inc., due to factors that
adversely affect particular companies in the portfolio and/or the U.S.
equities market in general.

- OVERWEIGHTING. Overweighting investments in certain sectors or
industries of the U.S. stock market increases risk that the Fund will
suffer a loss because of general advances or declines in the prices of
stocks in those sectors or industries.

- SMALL COMPANIES. The Fund invests in smaller companies, which tend to
be more vulnerable to adverse developments than larger companies. These
companies may have limited product lines, markets, or financial
resources, or may depend on a limited management group. They may be
recently organized, without proven records of success. Their securities
may trade infrequently and in limited volumes. As a result, the prices
of these securities may fluctuate more than prices of securities of
larger, more widely traded companies and the Fund may experience
difficulty in establishing or closing out positions in these securities
at prevailing market prices. Also, there may be less publicly available
information about small companies or less market interest in their
securities as compared to larger companies, and it may take longer for
the prices of the securities to reflect the full value of their
issuers' earnings potential or assets.

- TECHNOLOGY AND INTERNET INVESTMENTS. The Fund's investments in
technology and Internet-related companies may be highly volatile.
Changes in their prices may reflect changes in investor evaluation of a
particular product or group of products, of the prospects of a company
to develop and market a particular technology successfully, or of
technology or Internet-related investments generally.

- PORTFOLIO TURNOVER. Frequent purchases and sales of the Fund's
portfolio securities involve expense to the Fund, including brokerage
commissions or dealer mark-ups and other transaction

7
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costs. They may also result in realization of taxable capital gains,
which may be taxed to shareholders at ordinary income tax rates.

PERFORMANCE INFORMATION; BAR CHART

The following information provides some indication of the risk of investing
in the Fund by showing changes in the Fund's performance from year to year, and
by comparing the Fund's returns with those of a broad measure of market
performance. The bar chart shows changes in the Fund's performance for the last
ten calendar years. The table following the bar chart compares the Fund's
performance to a broad-based market index. THE FUND'S PAST PERFORMANCE IS NOT AN
INDICATION OF FUTURE PERFORMANCE. IT IS POSSIBLE TO LOSE MONEY ON AN INVESTMENT
IN THE FUND. The Fund may not achieve its investment objective.

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
ANNUAL RETURN (%)
CALENDAR YEAR END
<S> <C>
1990 9.57
1991 58.69
1992 -2.55
1993 7.22
1994 7.96
1995 20.31
1996 21.53
1997 18.54
1998 28.02
1999 182.56
</TABLE>

During the periods shown above, the highest quarterly return was 75.17% for the
quarter ended December 31, 1999, and the lowest was -23.37% for the quarter
ended September 30, 1998.

TABLE

AVERAGE ANNUAL TOTAL RETURNS (FOR
PERIODS ENDING DECEMBER 31, 1999) PAST ONE YEAR PAST FIVE YEARS PAST TEN YEARS
<S> <C> <C> <C>
RS Emerging Growth Fund 182.56% 44.36% 28.52%
Russell 2000 Growth Index* 43.09% 18.99% 13.51%
</TABLE>

* The Russell 2000 Growth Index is an unmanaged market capitalization-weighted
index containing those securities in the Russell 2000 Index with higher
price-to-book ratios and higher forecasted growth values. Investment results
assume the reinvestment of dividends paid on the stocks constituting the
index.

8
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THE INFORMATION AGE FUND-REGISTERED TRADEMARK-
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- - INVESTMENT OBJECTIVE. Long-term capital appreciation.

- - PRINCIPAL INVESTMENT STRATEGIES. The Fund primarily invests in the
information technology industry sector.

- Companies in the information technology industries include companies
that Elijah Asset Management considers to be principally engaged in the
development, production, or distribution of products or services
related to the processing, storage, transmission, or presentation of
information or data. The following examples illustrate the wide range
of products and services provided by these industries:

- Computer hardware and software of any kind, including, for example,
semiconductors, minicomputers, and peripheral equipment.

- Telecommunications products and services.

- Multimedia products and services, including, for example, goods and
services used in the broadcast and media industries.

- Data processing products and services.

- Financial services companies that collect or disseminate market,
economic, and financial information.

- Internet companies and other companies engaged in, or providing
products or services for, e-commerce.

- A particular company will be considered to be principally engaged in
the information technology industries if at the time of investment
Elijah Asset Management determines that at least 50% of the company's
assets, gross income, or net profits are committed to, or derived from,
those industries. A company will also be considered to be principally
engaged in the information technology industries if Elijah Asset
Management considers that the company has the potential for capital
appreciation primarily as a result of particular products, technology,
patents, or other market advantages in those industries.

In selecting stocks for the Fund, Elijah Asset Management looks at a
company's valuation relative to its potential long-term growth rate. Elijah
Asset Management may look to see whether a company offers a new or improved
product, service, or business operation; whether it has experienced a
positive change in its financial or business condition; whether the market
for its goods or services has expanded or experienced a positive change; and
whether there is a potential catalyst for positive change in the company's
business or stock price. The Fund may sell a security if Elijah Asset
Management determines that the company has become overvalued due to price
appreciation or has experienced a change in its business fundamentals, if
the company's growth rate slows substantially, or if Elijah Asset Management
believes that another investment offers a better opportunity.

- - PRINCIPAL INVESTMENTS. The Fund invests principally in common stocks, but
may also invest any portion of its assets in preferred stocks and warrants.
The Fund normally invests at least 65% of its assets in the information
technology sector.

- - PRINCIPAL RISKS.

- It is possible to lose money on an investment in the Fund.

9
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- EQUITY SECURITIES. One risk of investing in the Fund is the risk that
the value of the equity securities in the portfolio will fall, or will
not appreciate as anticipated by Elijah Asset Management, due to
factors that adversely affect particular companies in the portfolio
and/or the U.S. equities market in general.

- CONCENTRATION. Because the Fund's investments are concentrated in the
information technology industries, the value of its shares will be
especially affected by factors peculiar to those industries and may
fluctuate more widely than the value of shares of a portfolio which
invests in a broader range of industries.

- INFORMATION TECHNOLOGY INVESTMENTS. The Fund's investments in
information technology companies may be highly volatile. Changes in
their prices may reflect changes in investor evaluation of a particular
product or group of products, of the prospects of a company to develop
and market a particular technology successfully, or of information
technology investments generally.

- SMALL COMPANIES. The Fund may invest in small companies, which tend to
be more vulnerable to adverse developments than larger companies. Small
companies may have limited product lines, markets, or financial
resources, or may depend on a limited management group. They may be
recently organized, without proven records of success. Their securities
may trade infrequently and in limited volumes. As a result, the prices
of these securities may fluctuate more than the prices of securities of
larger, more widely traded companies and the Fund may experience
difficulty in establishing or closing out positions in these securities
at prevailing market prices. Also, there may be less publicly available
information about small companies or less market interest in their
securities as compared to larger companies, and it may take longer for
the prices of the securities to reflect the full value of their
issuers' earnings potential or assets.

10
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PERFORMANCE INFORMATION; BAR CHART

The following information provides some indication of the risk of investing
in the Fund by showing changes in the Fund's performance from year to year, and
by comparing the Fund's returns with those of a broad measure of market
performance. The bar chart shows changes in the Fund's performance for the last
four calendar years. The table following the bar chart compares the Fund's
performance to a broad-based market index. THE FUND'S PAST PERFORMANCE IS NOT AN
INDICATION OF FUTURE PERFORMANCE. IT IS POSSIBLE TO LOSE MONEY ON AN INVESTMENT
IN THE FUND. The Fund may not achieve its investment objective.

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
ANNUAL RETURN (%)
CALENDAR YEAR END
<S> <C>
1996 26.72
1997 6.15
1998 52.20
1999 126.22
</TABLE>

During the periods shown above, the highest quarterly return was 59.77% for the
quarter ended December 31, 1999, and the lowest was -21.73% for the quarter
ended December 31, 1997.

TABLE

AVERAGE ANNUAL TOTAL RETURNS (FOR SINCE INCEPTION
PERIODS ENDING DECEMBER 31, 1999) PAST ONE YEAR (11/15/95)
<S> <C> <C>
The Information Age
Fund-Registered Trademark- 126.22% 42.43%
Pacific Stock Exchange Technology Index* 116.40% 45.70%
</TABLE>

* The Pacific Stock Exchange Technology Index is an unmanaged, price-weighted
index of the top 100 U.S. technology stocks.

11
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RS INTERNET AGE FUND-TM-
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- - INVESTMENT OBJECTIVE. Long-term capital appreciation.

- - PRINCIPAL INVESTMENT STRATEGIES. The Fund invests primarily in companies
that RSIM, L.P. believes are likely to benefit substantially from the
development of the Internet. Such companies may include (i) companies that
provide access, infrastructure, content, products, or services to Internet
companies or Internet users; (ii) companies engaged in e-commerce; and
(iii) other companies in any industry that RSIM, L.P. believes are likely to
benefit substantially as a direct or indirect result of the growth of the
Internet.

The following examples illustrate the wide range of products and services
provided by companies in which the Fund may invest:

- Computer hardware and software of any kind, including, for example,
semiconductors, semiconductor equipment, Internet access devices and
technologies, optical components, and any technology used in the
distribution of data, voice, or interactive content.

- Telecommunications products and services including landline, satellite,
and wireless technologies and any other related technology that may
emerge in the future.

- E-commerce, including the distribution or sale of goods and services to
individuals and businesses over the Internet or other means of
electronic commerce.

- Medical products and services developed or provided through or using
the Internet.

- Multimedia products and services.

- Data processing and interpretation products and services.

- Dissemination of market, economic, and financial information.

The Fund may invest in companies that RSIM, L.P. believes are likely to
benefit indirectly from the development of the Internet. For example, the
Fund might invest in media companies RSIM, L.P. believes will benefit
substantially from advertising by companies providing products or services
to Internet users. As a result, the Fund's investments will not necessarily
be limited to high-technology or similar companies but may include issuers
in a wide range of industries.

The Fund may invest in companies of any size. It is likely, however, that
the Fund will at times invest a substantial portion of its assets in small-
and mid-cap companies, if RSIM, L.P. believes that they offer the best
opportunities for long-term capital appreciation. RSIM, L.P. typically
considers a number of factors in evaluating a potential investment,
including, for example, whether a company participates in an emerging space
with a large market opportunity; whether the company has a distinct
proprietary element; whether it is gaining market share; whether it is
earning superior margins or experiencing superior profitability or whether
its incremental margins have potential to show improving returns; and
whether it has a strong management team. RSIM, L.P. may consider selling a
security for the Fund if the issuer's growth rate deteriorates or its
performance otherwise disappoints, if the price of the security attains
RSIM, L.P.'s price target or otherwise appears relatively high to RSIM,
L.P., or if there is an unfavorable change in the issuer's management or
corporate plans or if institutional ownership of the security increases
substantially. Because many of the markets in which the Fund invests are
characterized by rapid change, frequent new entrants, and price volatility,
RSIM, L.P. will trade the Fund's portfolio actively, potentially resulting
in a high portfolio turnover rate.

The Fund may sell securities short if RSIM, L.P. expects the values of those
securities to decline.

12
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- - PRINCIPAL INVESTMENTS. The Fund invests principally in common stocks, but
may also invest any portion of its assets in preferred stocks and warrants.
The Fund invests primarily (and will normally invest at least 65% of its
assets) in companies that RSIM, L.P. believes are likely to benefit
substantially from the development of the Internet.

- - PRINCIPAL RISKS.

- It is possible to lose money on an investment in the Fund.

- INTERNET-RELATED INVESTMENTS. Because the Fund's investments are
concentrated in the securities of companies whose success may depend on
the development of the Internet, the value of its shares will be
especially affected by factors peculiar to those companies and may
fluctuate more widely than the value of shares of a portfolio which
invests in a broader range of companies. These factors might include,
for example, intense competition, changes in consumer preferences,
challenges in achieving product compatibility, and government
regulation. Securities of such companies may experience significant
price movements caused by disproportionate investor optimism or
pessimism with little or no basis in fundamental economic conditions.

The Fund's investments in such companies may be highly volatile.
Changes in their prices may reflect changes in investor evaluation of a
particular product or group of products, of the prospects of a company
to develop and market a particular technology successfully, or of high-
technology investments generally.

- SMALLER COMPANIES. The Fund may invest in smaller companies, which
tend to be more vulnerable to adverse developments than larger
companies. Small companies may have limited product lines, markets, or
financial resources, or may depend on a limited management group. They
may be recently organized, with unproven records of success. Their
securities may trade infrequently and in limited volumes. As a result,
the prices of these securities may fluctuate more than the prices of
securities of larger, more widely traded companies and the Fund may
experience difficulty in establishing or closing out positions in these
securities at prevailing market prices. Also, there may be less
publicly available information about small companies or less market
interest in their securities as compared to larger companies, and it
may take longer for the prices of the securities to reflect the full
value of their issuers' earnings potential or assets.

13
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RS MICROCAP GROWTH FUND
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- - INVESTMENT OBJECTIVE. Long-term capital appreciation.

- - PRINCIPAL INVESTMENT STRATEGIES. The Fund invests primarily in "micro-cap"
companies with market capitalizations of $750 million or less at the time of
investment that, in RSIM, L.P.'s opinion, have potential for long-term
capital appreciation. The Fund may invest the remainder of its assets in
securities of companies of any size. The Fund may also engage in short sales
of securities it expects to decline in price. The Fund will likely invest a
portion of its assets in technology and Internet-related companies.

In selecting investments for the Fund, RSIM, L.P. looks for companies with
sustainable revenue and earnings growth; companies that have a sustainable
competitive advantage, superior financial characteristics, and strong
management; and companies that are underfollowed by Wall Street analysts.
The Fund may sell a stock when RSIM, L.P. no longer believes that a company
provides these advantages or that the stock's price fully reflects what
RSIM, L.P. believes to be the company's value.

- - PRINCIPAL INVESTMENTS. The Fund invests primarily in equity securities,
including common and preferred stocks, and warrants and securities
convertible into common or preferred stocks. The Fund under normal
circumstances invests at least 65% of its assets in "micro-cap" companies.

- - PRINCIPAL RISKS.

- It is possible to lose money on an investment in the Fund.

- MICRO-CAP AND SMALL COMPANIES. The Fund invests primarily in micro-cap
and small companies, which tend to be more vulnerable to adverse
developments than larger companies. These companies may have limited
product lines, markets, or financial resources, or may depend on a
limited management group. They may be recently organized, without
proven records of success. Their securities may trade infrequently and
in limited volumes. As a result, the prices of these securities may be
more volatile than the prices of securities of larger, more widely
traded companies and the Fund may experience difficulty in establishing
or closing out positions in these securities at prevailing market
prices. Also, there may be less publicly available information about
small companies or less market interest in their securities as compared
to larger companies, and it may take longer for the prices of the
securities to reflect the full value of their issuers' earnings
potential or assets.

- SHORT SALES. Short sales may result in a loss if the value of the
security sold short increases between the date when the Fund enters
into the short sale and the date on which the Fund closes the short
sale.

- TECHNOLOGY AND INTERNET INVESTMENTS. The Fund's investments in
technology and Internet-related companies may be highly volatile.
Changes in their prices may reflect changes in investor evaluation of a
particular product or group of products, of the prospects of a company
to develop and market a particular technology successfully, or of
technology and Internet-related investments generally.

14
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

PERFORMANCE INFORMATION; BAR CHART

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
ANNUAL RETURN (%)
CALENDAR YEAR END
<S> <C>
1997 30.45
1998 -0.63
1999 56.66
</TABLE>

During the periods shown above, the highest quarterly return was 34.90% for the
quarter ended December 31, 1999, and the lowest was -24.58% for the quarter
ended September 30, 1998.

TABLE

AVERAGE ANNUAL TOTAL RETURNS (FOR SINCE INCEPTION
PERIODS ENDING DECEMBER 31, 1999) PAST ONE YEAR (8/15/96)
<S> <C> <C>
RS MicroCap Growth Fund 56.66% 26.86%
Russell 2000 Growth Index* 43.09% 18.43%
</TABLE>

15
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

RS MIDCAP OPPORTUNITIES FUND
- --------------------------------------------------------------------------------

- - INVESTMENT OBJECTIVE. Long-term total return.

- - PRINCIPAL INVESTMENT STRATEGIES. The Fund invests in equity and debt
securities of mid-cap companies-- with market capitalizations from $1.5
billion up to $10 billion-- that offer the potential for capital appreciation
and/or current income.

In selecting investments for the Fund, RSIM, L.P. may look to see whether the
company has a superior management team; whether the company has experienced
or has the potential for superior earnings per share momentum; and whether
there is a possible catalyst that has the potential to drive earnings and
valuations higher (for example, new management, a new product launch). RSIM,
L.P. may consider selling a security for the Fund if the stock price declines
substantially below the purchase price, if the price of the security attains
RSIM, L.P.'s price target or otherwise appears relatively high to RSIM, L.P.,
if the company's business fundamentals turn negative in RSIM, L.P.'s view, or
if RSIM, L.P. believes that another investment offers a better opportunity.

- - PRINCIPAL INVESTMENTS. The Fund normally invests a majority of its assets in
common and preferred stocks, convertible securities, bonds, and notes. The
Fund will normally invest in equity securities that typically pay relatively
low dividends, and in convertible securities and preferred stocks, which
offer current income and the potential for capital appreciation upon
conversion. The Fund under normal circumstances invests at least 65% of its
assets in mid-cap companies. The Fund will likely invest a portion of its
assets in technology and Internet-related companies.

- - PRINCIPAL RISKS.

- It is possible to lose money on an investment in the Fund.

- DEBT SECURITIES. The Fund's investments in debt securities are
obligations of the issuer to make payments of principal and/or interest
on future dates. As interest rates rise, the value of the Fund's debt
securities is likely to fall. This risk is generally greater for debt
securities with longer maturities. Debt securities also carry the risk
that the issuer or the guarantor of a security will be unable or
unwilling to make timely principal and/or interest payments, or
otherwise to honor its obligations.

- MID-CAP COMPANIES. The Fund invests in mid-cap companies, which tend
to be more vulnerable to adverse developments than larger companies.
Mid-cap companies may have limited product lines, markets, or financial
resources, or may depend on a limited management group. Their
securities may trade infrequently and in limited volumes. As a result,
the prices of these securities may fluctuate more than the prices of
securities of larger, more widely traded companies. Also, there may be
less publicly available information about mid-cap companies or less
market interest in their securities as compared to larger companies,
and it may take longer for the prices of the securities to reflect the
full value of their issuers' earnings potential or assets.

- CONVERTIBLE SECURITIES. "Convertible" securities include corporate
bonds, debentures, notes, or preferred stocks that can be converted
into (that is, exchanged for) common stock or other equity securities
of the same or a different issuer, and other securities, such as
warrants, that also provide an opportunity for equity participation. As
a result, convertible securities are subject to the risks of investment
generally in debt securities and to the risks of investment in equity
securities, as well.

16
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
and market a particular technology successfully, or of technology and
Internet-related investments generally.

- PORTFOLIO TURNOVER Frequent purchases and sales of the Fund's
portfolio securities involve expense to the Fund, including brokerage
commissions or dealer mark-ups and other transaction costs. They may
also result in realization of taxable capital gains, which may be taxed
to shareholders at ordinary income tax rates.

17
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

PERFORMANCE INFORMATION; BAR CHART

The following information provides some indication of the risk of investing
in the Fund by showing changes in the Fund's performance from year to year, and
by comparing the Fund's returns with those of a broad measure of market
performance. The bar chart shows changes in the Fund's performance for the last
four calendar years. The table following the bar chart compares the Fund's
performance to a broad-based market index. THE FUND'S PAST PERFORMANCE IS NOT AN
INDICATION OF FUTURE PERFORMANCE. IT IS POSSIBLE TO LOSE MONEY ON AN INVESTMENT
IN THE FUND. The Fund may not achieve its investment objective.

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
ANNUAL RETURN (%)
CALENDAR YEAR END
<S> <C>
1996 24.16
1997 22.40
1998 11.65
1999 56.12
</TABLE>

During the periods shown above, the highest quarterly return was 33.16% for the
quarter ended December 31, 1999, and the lowest was -13.53% for the quarter
ended September 30, 1998.

TABLE

AVERAGE ANNUAL TOTAL RETURNS (FOR SINCE INCEPTION
PERIODS ENDING DECEMBER 31, 1999) PAST ONE YEAR (7/12/95)
<S> <C> <C>
RS MidCap Opportunities Fund 56.12% 27.62%
Russell Midcap Index* 18.23% 18.79%
</TABLE>

* The Russell Midcap Index is an unmanaged market capitalization-weighted index
which measures the performance of the 800 smallest companies in the Russell
1000 Index. Previously, information was presented in the Table regarding the
Russell Midcap Growth Index; RSIM believes that the broader scope of the
Russell Midcap Index offers a more appropriate comparison for the Fund's
performance. Performance of the Russell Midcap Growth Index for the past one
year and since 7/12/95 was 51.29% and 25.38%, respectively. Investment results
assume the reinvestment of dividends paid on the stocks constituting the
index.

18
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

RS VALUE + GROWTH FUND
- --------------------------------------------------------------------------------

- - INVESTMENT OBJECTIVE. Capital appreciation.

- - PRINCIPAL INVESTMENT STRATEGIES. The Fund invests primarily in equity
securities of mid- and large-capitalization companies (with market
capitalizations greater than $1.5 billion). In selecting investments for the
Fund, the primary emphasis of Elijah Asset Management, LLC, sub-advisor to
the Fund, is typically on evaluating a company's management, growth
prospects, business operations, revenues, earnings, cash flows, and balance
sheet in relationship to its share price.

Elijah Asset Management seeks to identify stocks that are undervalued
relative to their growth prospects. For example, Elijah Asset Management may
look to see whether a company offers a new or improved product, service, or
business operation; whether it has experienced a positive change in its
financial or business condition; whether the market for its goods or services
has expanded or experienced a positive change; and whether there is a
potential catalyst for positive change in the company's business or stock
price. The Fund may sell a security if Elijah Asset Management determines
that the company has become overvalued due to price appreciation or has
experienced a change in its business fundamentals, if the company's growth
rate slows substantially, or if Elijah Asset Management believes that another
investment offers a better opportunity. The Fund may invest in securities of
larger and smaller companies. The Fund may also sell stocks short that Elijah
Asset Management believes are relatively overvalued. The Fund will likely
invest a portion of its assets in technology and Internet-related companies.

- - PRINCIPAL INVESTMENTS. The Fund invests primarily in growth companies with
favorable relationships between price/earnings ratios and growth rates in
sectors offering the potential for above-average returns.

- - PRINCIPAL RISKS.

- It is possible to lose money on an investment in the Fund.

- TECHNOLOGY AND INTERNET INVESTMENTS. The Fund's investments in
technology and Internet-related companies may be highly volatile.
Changes in their prices may reflect changes in investor evaluation of a
particular product or group of products, of the prospects of a company
to develop and market a particular technology successfully, or of
technology and Internet-related investments generally.

19
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

PERFORMANCE INFORMATION; BAR CHART

The following information provides some indication of the risk of investing
in the Fund by showing changes in the Fund's performance from year to year, and
by comparing the Fund's returns with those of a broad measure of market
performance. The bar chart shows changes in the Fund's performance for the last
seven calendar years. The table following the bar chart compares the Fund's
performance to a broad-based market index. THE FUND'S PAST PERFORMANCE IS NOT AN
INDICATION OF FUTURE PERFORMANCE. IT IS POSSIBLE TO LOSE MONEY ON AN INVESTMENT
IN THE FUND. The Fund may not achieve its investment objective.

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
ANNUAL RETURN (%)
CALENDAR YEAR END
<S> <C>
1993 21.57
1994 23.11
1995 42.70
1996 14.12
1997 13.81
1998 27.44
1999 28.43
</TABLE>

During the periods shown above, the highest quarterly return was 24.07% for the
quarter ended December 31, 1998, and the lowest was -14.65% for the quarter
ended December 31, 1995.

TABLE

AVERAGE ANNUAL TOTAL RETURNS (FOR SINCE INCEPTION
PERIODS ENDING DECEMBER 31, 1999) PAST ONE YEAR PAST FIVE YEARS (5/12/92)
<S> <C> <C> <C>
RS Value + Growth Fund 28.43% 24.85% 23.43%
Russell 1000 Growth Index* 33.16% 32.41% 22.40%
</TABLE>

* The Russell 1000 Growth Index is an unmanaged market capitalization-weighted
index containing those securities in the Russell 1000 Index with higher
price-to-book ratios and higher forecasted growth values. Investment results
assume the reinvestment of dividends paid on the stocks constituting the
index.

20
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

THE CONTRARIAN FUND-TM-
- --------------------------------------------------------------------------------

- - INVESTMENT OBJECTIVE. Maximum long-term growth.

- - PRINCIPAL INVESTMENT STRATEGIES. The Fund invests worldwide in attractively
priced equity securities of growth and value companies. The Fund invests
primarily in businesses that have not yet been discovered or become popular,
unpopular companies with growth potential due to changed circumstances,
companies that have declined in value and no longer command an investor
following, and previously popular companies temporarily out of favor due to
short-term factors. Although the Fund may invest in companies of any size, it
may at times invest a substantial portion of its assets in smaller companies.
The Fund may at times invest in companies engaged in the production,
development, or sale of natural resources. The Fund is a non-diversified
mutual fund.

In determining whether to buy or sell a security, RSIM, L.P. typically
performs substantial fundamental analysis of the company, to identify
companies offering the potential for long-term growth but which are out of
favor or have been overlooked.

The Fund may also do the following:

- Sell stocks short.

- Take positions in options and futures contracts in anticipation of a
market decline or advance.

- Borrow money to purchase additional portfolio securities.

- - PRINCIPAL INVESTMENTS. The Fund invests primarily in equity securities of
domestic, multinational, and foreign companies whose potential values
generally have been overlooked by other investors.

- - PRINCIPAL RISKS

- It is possible to lose money on an investment in the Fund.

- CONTRARIAN INVESTING. Because the Fund takes investment positions
contrary to those of most other investors, the Fund may not be able to
realize what RSIM believes to be the unrecognized value in a security
for a substantial period of time, if ever. It is also possible that
RSIM's investment decisions will turn out to have been premature or
incorrect. The Fund will not necessarily realize gains in a falling
market, and it is possible for the Fund to lose money in either a
rising or a falling market.

- EQUITY SECURITIES. One risk of investing in the Fund is the risk that
the value of the equity securities in the portfolio will fall, or will
not appreciate as anticipated by an investment adviser, due to factors
that adversely affect particular companies in the portfolio and/or the
U.S. equities market in general.

- FOREIGN SECURITIES. Investments in foreign securities entail risks not
present in domestic investments including, among others, risks related
to political or economic instability, currency exchange, and taxation.

- EMERGING MARKET SECURITIES. Investments in emerging markets are
subject to the same risks applicable to foreign investments generally
but to a greater extent. For example, the securities markets and legal
systems in emerging markets may provide few, or none, of the advantages
or protections of markets or legal systems available in more developed
countries. Emerging market securities may trade in limited volume and
may be illiquid. Exchanges, if any, on which they trade may not provide
all of the conveniences or protections provided by securities exchanges
in more developed markets.

21
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

- NON-DIVERSIFIED FUND. Because the Fund is "non-diversified," it
generally invests its assets in a more limited number of issuers than a
diversified investment company. As a result, its risk of loss increases
if the market value of a security declines or if an issuer is not able
to meet its obligations.

- FUTURES AND OPTIONS TRANSACTIONS. The Fund may lose money on futures
and options transactions because, among other things, the futures and
options may be illiquid or their prices may not correlate perfectly
with the securities or indices underlying them or with the prices of
any investments which they are intended to hedge, or because an
investment adviser forecasts market or price movements incorrectly. The
Fund also incurs transaction costs when it opens or closes futures or
option positions.

- SMALL COMPANIES. The Fund may invest in smaller companies, which tend
to be more vulnerable to adverse developments than larger companies.
These companies have limited product lines, markets, or financial
resources, or may depend on a limited management group. They may be
recently organized, without proven records of success. Their securities
may trade infrequently and in limited volumes. As a result, the prices
of these securities may fluctuate more than prices of securities of
larger, more widely traded companies and the Fund may experience
difficulty in establishing or closing out positions in these securities
at prevailing market prices. Also, there may be less publicly available
information about small companies or less market interest in their
securities as compared to larger companies, and it may take longer for
the prices of the securities to reflect the full value of their
issuers' earnings potential or assets.

- SHORT SALES AND OTHER SHORT POSITIONS. Short positions may result in a
loss if the value of the security or index in question increases
between the date when the Fund enters into the short position and the
date on which the Fund closes the short position.

- LEVERAGE. Borrowing money to invest in additional securities increases
the Fund's market exposure and risk and may result in losses. The
interest that the Fund must pay on borrowed money will reduce its net
investment income, and may also either offset any potential capital
gains or increase any losses.

- NATURAL RESOURCES INVESTMENTS. Prices of many natural resources are
currently at historically low levels; there can be no assurance as to
when, or whether, prices of those natural resources may recover.

22
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

PERFORMANCE INFORMATION; BAR CHART

The following information provides some indication of the risk of investing
in the Fund by showing changes in the Fund's performance from year to year, and
by comparing the Fund's returns with those of a broad measure of market
performance. The bar chart shows changes in the Fund's performance for the last
six calendar years. The table following the bar chart compares the Fund's
performance to a broad-based market index. THE FUND'S PAST PERFORMANCE IS NOT AN
INDICATION OF FUTURE PERFORMANCE. IT IS POSSIBLE TO LOSE MONEY ON AN INVESTMENT
IN THE FUND. The Fund may not achieve its investment objective.

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
ANNUAL RETURN (%)
CALENDAR YEAR END
<S> <C>
1994 -5.52
1995 30.86
1996 21.68
1997 -29.51
1998 -32.69
1999 38.31
</TABLE>

During the periods shown above, the highest quarterly return was 21.71% for the
quarter ended June 30, 1999, and the lowest was -30.17% for the quarter ended
September 30, 1998.

TABLE

AVERAGE ANNUAL TOTAL RETURNS (FOR SINCE INCEPTION
PERIODS ENDING DECEMBER 31, 1999) PAST ONE YEAR PAST FIVE YEARS (6/30/93)
<S> <C> <C> <C>
The Contrarian Fund-TM- 38.31% 0.88% 1.54%
Morgan Stanley Capital International
All Country World Index* 25.49% 16.76% 14.46%
</TABLE>

* The Morgan Stanley Capital International All Country World Index is an
unmanaged, market capitalization-weighted index composed of companies
representative of the market structure of 47 developed and emerging market
countries.

23
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

RS GLOBAL NATURAL RESOURCES FUND
- --------------------------------------------------------------------------------

- - INVESTMENT OBJECTIVE. Long-term capital appreciation.

- - PRINCIPAL INVESTMENT STRATEGIES. The Fund invests primarily in securities of
issuers in the natural resources industries. The Fund may invest in
securities of issuers located anywhere in the world and normally will invest
in securities of companies located in at least three countries, which may
include the United States. The Fund may also sell a security short if RSIM,
L.P. expects its market price to decline.

- Companies in the natural resources industries include companies that
RSIM, L.P. considers to be principally engaged in the discovery,
development, production, or distribution of natural resources, the
development of technologies for the production or efficient use of
natural resources, or the furnishing of related supplies or services.
Natural resources include, for example, energy sources, precious
metals, forest products, real estate, nonferrous metals, and other
basic commodities.

- Companies in the natural resources industries may include, for example:

- Companies that participate in the discovery and development of
natural resources from new or conventional sources.

- Companies that own or produce natural resources such as oil, natural
gas, precious metals, and other commodities.

- Companies that engage in the transportation, distribution, or
processing of natural resources.

- Companies that contribute new technologies for the production or
efficient use of natural resources, such as systems for energy
conversion, conservation, and pollution control.

- Companies that provide related services such as mining, drilling,
chemicals, and related parts and equipment.

- A particular company will be considered to be principally engaged in
the natural resources industries if at the time of investment RSIM,
L.P. determines that at least 50% of the company's assets, gross
income, or net profits are committed to, or derived from, those
industries. A company will also be considered to be principally engaged
in the natural resources industries if RSIM, L.P. considers that the
company has the potential for capital appreciation primarily as a
result of particular products, technology, patents, or other market
advantages in those industries.

In determining whether to buy or sell a security, RSIM, L.P. typically
performs substantial fundamental analysis of the company and its potential
for capital appreciation. RSIM, L.P. generally seeks to identify companies
that produce a rate of return on capital greater than their cost of capital
over a commodity cycle.

- - PRINCIPAL INVESTMENTS. The Fund invests primarily in common stocks, but may
also invest in preferred stocks, securities convertible into stocks, and
warrants to purchase stocks. The Fund normally invests at least 65% of its
total assets in securities of companies in the natural resources industries.
The Fund may invest the remaining 35% of its assets in securities of
companies in any industry.

- - PRINCIPAL RISKS.

- It is possible to lose money on an investment in the Fund.

24
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

- FOREIGN INVESTMENT. Investments in foreign securities entail risks not
present in domestic investments including, among others, risks related
to political or economic instability, currency exchange, and taxation.
Many companies engaged in the natural resources industries have
substantial operations in foreign countries including emerging markets.
Commodity markets and legal protections in those countries may be in
the early stages of development and may provide few of the advantages
or protections available in domestic markets.

- CONCENTRATION. Because the Fund concentrates in the natural resources
industries, the value of the Fund's shares will be especially affected
by factors peculiar to those industries and may fluctuate more widely
than the value of shares of a portfolio which invests in a broader
range of industries. Also, changes in regulatory policies may have a
material effect on the business of companies in those industries.
Prices of many natural resources are currently at historically low
levels; there can be no assurance as to when, or whether, prices of
those natural resources may recover.

- GEOGRAPHIC CONCENTRATION. There is no limit on the amount of the
Fund's assets that may be invested in securities of issuers domiciled
in any one country. To the extent that the Fund invests a substantial
amount of its assets in one country, it will be more susceptible to the
political and economic developments and market fluctuations in that
country than if it invested in a more geographically diversified
portfolio.

25
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

PERFORMANCE INFORMATION; BAR CHART

The following information provides some indication of the risk of investing
in the Fund by showing changes in the Fund's performance from year to year, and
by comparing the Fund's returns with those of a broad measure of market
performance. The bar chart shows changes in the Fund's performance for the last
four calendar years. The table following the bar chart compares the Fund's
performance to a broad-based market index. THE FUND'S PAST PERFORMANCE IS NOT AN
INDICATION OF FUTURE PERFORMANCE. IT IS POSSIBLE TO LOSE MONEY ON AN INVESTMENT
IN THE FUND. The Fund may not achieve its investment objective.

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
ANNUAL RETURN(%)
CALENDAR YEAR END
<S> <C>
1996 41.21
1997 -17.14
1998 -34.45
1999 22.39
</TABLE>

During the periods shown above, the highest quarterly return was 28.04% for the
quarter ended June 30, 1999, and the lowest was -22.47% for the quarter ended
September 30, 1998.

TABLE

AVERAGE ANNUAL TOTAL RETURNS (FOR SINCE INCEPTION
PERIODS ENDING DECEMBER 31, 1999) PAST ONE YEAR (11/15/95)
<S> <C> <C>
RS Global Natural Resources Fund 22.39% (1.24)%
S&P 500 Index* 21.03% 26.66 %
</TABLE>

* The S&P 500 Index is an unmanaged market capitalization-weighted index of 500
stocks designed to measure performance of the broad domestic economy through
changes in the aggregate market value of 500 stocks representing all major
industries. It is widely recognized as representative of the stock market in
general. Investment results assume the reinvestment of dividends paid on the
stocks constituting the index.

26
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

RS PARTNERS FUND
- --------------------------------------------------------------------------------

- - INVESTMENT OBJECTIVE. Long-term growth.

- - PRINCIPAL INVESTMENT STRATEGIES. The Fund invests in equity securities
primarily of companies with market capitalizations of up to $1 billion that
RSIM believes are undervalued. In evaluating potential investments for the
Fund, RSIM employs a value methodology, combining Graham & Dodd balance sheet
analysis and cash flow analysis (such as the Holt/Value Search cash-flow
model). The Fund may invest most or all of its assets in securities of U.S.
companies, but may also invest any portion of its assets in foreign
securities. The Fund is a non-diversified mutual fund.

- In determining whether to buy or sell investments for the Fund, RSIM,
L.P. will:

- Perform fundamental research focusing on business analysis;

- Observe how management allocates capital;

- Strive to understand the unit economics of the business of the
company;

- Key on the cash flow rate of return on capital employed;

- Discern the sources and uses of cash;

- Consider how management is compensated; and

- Ask how the stock market is pricing the entire company.

- - PRINCIPAL INVESTMENTS. Although the Fund invests principally in common
stocks, it may also invest in preferred stocks and warrants.

- - PRINCIPAL RISKS.

- It is possible to lose money on an investment in the Fund.

27
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

interest in their securities as compared to larger companies, and it
may take longer for the prices of the securities to reflect the full
value of their issuers' earnings potential or assets.

PERFORMANCE INFORMATION; BAR CHART

The following information provides some indication of the risk of investing
in the Fund by showing changes in the Fund's performance from year to year, and
by comparing the Fund's returns with those of a broad measure of market
performance. The bar chart shows changes in the Fund's performance for the last
four calendar years. The table following the bar chart compares the Fund's
performance to a broad-based market index. THE FUND'S PAST PERFORMANCE IS NOT AN
INDICATION OF FUTURE PERFORMANCE. IT IS POSSIBLE TO LOSE MONEY ON AN INVESTMENT
IN THE FUND. The Fund may not achieve its investment objective.

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
ANNUAL RETURN (%)
CALENDAR YEAR END
<S> <C>
1996 43.15
1997 18.08
1998 -27.38
1999 3.73
</TABLE>

During the periods shown above, the highest quarterly return was 18.38% for the
quarter ended March 31, 1996, and the lowest was -23.21% for the quarter ended
September 30, 1998.

TABLE

AVERAGE ANNUAL TOTAL RETURNS (FOR SINCE INCEPTION
PERIODS ENDING DECEMBER 31, 1999) PAST ONE YEAR (7/12/95)
<S> <C> <C>
RS Partners Fund 3.73 % 6.50%
Russell 2000 Value Index* (1.49)% 11.04%
</TABLE>

* The Russell 2000 Value Index is an unmanaged market capitalization-weighted
index composed of those securities in the Russell 2000 Index with lower
price-to-book ratios and lower forecasted growth values. Investment results
assume the reinvestment of dividends paid on the stocks constituting the
index.

28
<PAGE>
- --------------------------------------------------------------------------------

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

FEES AND EXPENSES

THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD
SHARES OF THE FUNDS.

<TABLE>
<S> <C>
SHAREHOLDER FEES (paid directly from your investment):
Maximum Sales Charge (Load) Imposed on Purchases None
Maximum Deferred Sales Charge (Load) None
Maximum Sales Charge (Load) Imposed on Reinvested
Dividends None
Redemption Fee* None
Exchange Fee None
</TABLE>

- --------------------------
* A $9.00 FEE IS CHARGED FOR REDEMPTIONS MADE BY BANK WIRE.

<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from Fund assets):
<S> <C> <C> <C> <C> <C>
AGGRESSIVE DIVERSIFIED EMERGING INFORMATION INTERNET
GROWTH GROWTH GROWTH AGE AGE
----- ----- ----- ----- -----
Management Fees 1.00% 1.00% 1.00% 1.00% 1.25%
Distribution (12b-1) Fees 0.25% 0.25% 0.25% 0.25% 0.25%
Other Expenses(1)(2) 0.38% 0.64% 0.26% 0.35% 0.32%
----- ----- ----- ----- -----
Total Annual Fund Operating Expenses(1)(2) 1.63% 1.89% 1.51% 1.60% 1.82%

Fee Waiver and/or Expense Limitations(2)(3) -- -- -- 0.01% 0.06%
----- ----- ----- ----- -----
Net Expenses(2)(3) 1.63% 1.89% 1.51% 1.59% 1.76%
</TABLE>

<TABLE>
<CAPTION>
MICROCAP MIDCAP VALUE + GLOBAL NATURAL
GROWTH OPPORTUNITIES GROWTH CONTRARIAN RESOURCES PARTNERS
---------- ------------- -------- ----------- -------------- --------
<S> <C> <C> <C> <C> <C> <C>
Management Fees 1.25% 1.00% 1.00% 1.50% 1.00% 1.25%
Distribution (12b-1) Fees 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
Other Expenses(1)(2) 0.47% 0.37% 0.31% 0.68% 1.17% 0.86%
----- ----- ----- ----- ----- -----
Total Annual Fund Operating
Expenses(1)(2) 1.97% 1.62% 1.56% 2.43% 2.42% 2.36%

Fee Waiver and/or Expense
Limitations(2)(3) 0.05% 0.02% -- 0.02% 0.39% 0.43%
----- ----- ----- ----- ----- -----
Net Expenses(2)(3) 1.92% 1.60% 1.56% 2.41% 2.03% 1.93%
</TABLE>

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

(1) OTHER EXPENSES FOR THE RS AGGRESSIVE GROWTH FUND AND RS INTERNET AGE
FUND-TM-, WHICH HAVE NOT YET COMPLETED A FULL FISCAL YEAR, ARE BASED ON
ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.

(2) OTHER EXPENSES, TOTAL ANNUAL FUND OPERATING EXPENSES, FEE WAIVER AND/OR
EXPENSE LIMITATIONS, AND NET EXPENSES FOR THE DIVERSIFIED GROWTH FUND,
INFORMATION AGE FUND-REGISTERED TRADEMARK-, MIDCAP OPPORTUNITIES FUND, VALUE +
GROWTH FUND, CONTRARIAN FUND-TM-, GLOBAL NATURAL RESOURCES FUND, AND PARTNERS
FUND HAVE BEEN RESTATED TO REFLECT THE EFFECT OF EXPENSE LIMITATION
REIMBURSEMENTS AND ONE-TIME ACCOUNTING ADJUSTMENTS TO THE FUNDS' EXPENSES IN
1999.

(3) THE NET EXPENSES SHOWN ABOVE FOR THE INFORMATION AGE
FUND-REGISTERED TRADEMARK-, INTERNET AGE FUND-TM-, MICROCAP GROWTH FUND, MIDCAP
OPPORTUNITIES FUND, CONTRARIAN FUND-TM-, GLOBAL NATURAL RESOURCES FUND, AND
PARTNERS FUND SHOW THE EFFECT OF EXPENSE LIMITATIONS AND/OR FEE WAIVERS IN
EFFECT THROUGH DECEMBER 31, 2000 ON TOTAL ANNUAL FUND OPERATING EXPENSES.
EXPENSE LIMITATIONS AND/OR FEE WAIVERS ARE IMPOSED PURSUANT TO A WRITTEN
AGREEMENT BETWEEN RSIM AND THE TRUST OR PURSUANT TO A SUB-ADMINISTRATION AND
ACCOUNTING SERVICES AGREEMENT BETWEEN THE TRUST AND PFPC, INC., AND MAY BE
REIMBURSED BY A FUND IN SUBSEQUENT YEARS.

Because of Rule 12b-1 fees paid by the Funds, long-term shareholders may pay
more than the economic equivalent of the maximum front-end sales load permitted
under applicable broker-dealer sales rules.

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EXAMPLE

This Example is intended to help you compare the cost of investing in a Fund
with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in a Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment earns a 5% return each year and that
the Fund's operating expenses remain the same as the Total Annual Fund Operating
Expenses shown above. Your actual costs may be higher or lower. Based on these
assumptions, your costs would be:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- -------- -------- --------
<S> <C> <C> <C> <C>
RS Aggressive Growth Fund $166 $514 -- --
RS Diversified Growth Fund $192 $594 $1,020 $2,203
RS Emerging Growth Fund $154 $477 $ 823 $1,796
The Information Age $162 $504 $ 869 $1,893
Fund-Registered Trademark-
RS Internet Age Fund-TM- $179 $567 -- --
RS MicroCap Growth Fund $195 $613 $1,056 $2,283
RS MidCap Opportunities Fund $163 $509 $ 878 $1,914
RS Value + Growth Fund $159 $493 $ 849 $1,851
The Contrarian Fund-TM- $245 $755 $1,291 $2,753
RS Global Natural Resources Fund $206 $717 $1,253 $2,715
RS Partners Fund $196 $695 $1,219 $2,652
</TABLE>

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OTHER INVESTMENT STRATEGIES AND RISKS

In addition to the principal investment strategies described in the Summary
Information section above, the Funds may at times use the strategies and
techniques described below, which involve certain special risks. This Prospectus
does not attempt to disclose all of the various investment techniques and types
of securities that a Fund's Adviser might use in managing the Funds. As in any
mutual fund, investors must rely on the professional investment judgment and
skill of the Adviser.

A Fund may not achieve its objective in all circumstances and you could lose
money by investing. The following provides more detail about the Funds'
principal risks and the circumstances which could adversely affect the value of
a Fund's shares or its total return or yield.

In the remainder of this Prospectus, each of RSIM, L.P., RSIM, Inc., Elijah
Asset Management, LLC, and Eastbourne Management, L.L.C. is referred to
sometimes as an "Adviser" and they are sometimes referred to collectively as the
"Advisers."

The Funds' investment strategies and the portfolio investments of many of
the Funds differ from those of most other mutual funds. Each Adviser seeks
aggressively to identify favorable securities, economic and market sectors, and
investment opportunities that other investors and investment advisers may not
have identified. An Adviser may devote more of a Fund's assets to pursuing an
investment opportunity than many other mutual funds might; it may buy or sell an
investment at times different from when most other mutual funds might do so; and
it may select investments for the Fund that would be inappropriate for less
aggressive mutual funds. In addition, unlike most other mutual funds, some of
the Funds may engage in short sales of securities which involve special risks.
Each of the Funds may hold a portion of its assets in cash or money market
investments.

All percentage limitations on investments will apply at the time of
investment and will not be considered violated unless an excess or deficiency
occurs or exists immediately after and as a result of the investment.

The Trustees of the Trust may change the investment objective and policies
of any Fund without a vote of the shareholders unless otherwise specifically
stated.

RISKS OF INVESTING IN THE FUNDS
- -------------------------------------

INVESTMENTS IN SMALLER COMPANIES. Each of the Funds may invest a
substantial portion of its assets in securities issued by small companies. Such
companies may offer greater opportunities for capital appreciation than larger
companies, but investments in such companies may involve certain special risks.
Such companies may have limited product lines, markets, or financial resources
and may be dependent on a limited management group. In addition, such companies
may have been recently organized, and have little or no track record or success.
Also, the Fund may not have had an opportunity to evaluate such newer companies'
performance in adverse or fluctuating market conditions. While the markets in
securities of such companies have grown rapidly in recent years, such securities
may trade less frequently and in smaller volume than more widely held
securities. The values of these securities may fluctuate more sharply than those
of other securities, and a Fund may experience some difficulty in establishing
or closing out positions in these securities at prevailing market prices. There
may be less publicly available information about the issuers of these securities
or less market interest in such securities than in the case of larger companies,
and it may take a longer period of time for the prices of such securities to
reflect the full value of their issuers' underlying earnings potential or
assets.

Some securities of smaller issuers may be restricted as to resale or may
otherwise be highly illiquid. The ability of a Fund to dispose of such
securities may be greatly limited, and a Fund may have to continue to hold such
securities during periods when an Adviser would otherwise

31
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have sold the security. It is possible that an Adviser or its affiliates or
clients may hold securities issued by the same issuers, and may in some cases
have acquired the securities at different times, on more favorable terms, or at
more favorable prices, than a Fund.

FOREIGN SECURITIES. The Funds may invest in securities principally traded
in foreign markets. Because foreign securities are normally denominated and
traded in foreign currencies, the value of a Fund's assets may be affected
favorably or unfavorably by currency exchange rates, exchange control
regulations, foreign withholding taxes, and restrictions or prohibitions on the
repatriation of foreign currencies. There may be less information publicly
available about a foreign company than about a U.S. company, and foreign
companies are not generally subject to accounting, auditing, and financial
reporting standards and practices comparable to those in the United States. The
securities of some foreign companies are less liquid and at times more volatile
than securities of comparable U.S. companies. Foreign brokerage commissions and
other fees are also generally higher than in the United States. Foreign
settlement procedures and trade regulations may involve certain risks (such as
delay in payment or delivery of securities or in the recovery of a Fund's assets
held abroad) and expenses not present in the settlement of domestic investments.

In addition, there may be a possibility of nationalization or expropriation
of assets, imposition of currency exchange controls, confiscatory taxation,
political or financial instability, and diplomatic developments that could
affect the value of a Fund's investments in certain foreign countries. Legal
remedies available to investors in certain foreign countries may be more limited
than those available with respect to investments in the United States or in
other foreign countries. In the case of securities issued by a foreign
governmental entity, the issuer may in certain circumstances be unable or
unwilling to meet its obligations on the securities in accordance with their
terms, and a Fund may have limited recourse available to it in the event of
default. The laws of some foreign countries may limit a Fund's ability to invest
in securities of certain issuers located in those foreign countries. Special tax
considerations apply to foreign securities. A Fund may buy or sell foreign
currencies and options and futures contracts on foreign currencies for hedging
purposes in connection with its foreign investments. Except as otherwise
provided in this Prospectus, there is no limit on the amount of a Fund's assets
that may be invested in foreign securities.

Each of the Funds may invest in securities of issuers in developing
countries. Certain Funds may at times invest a substantial portion of their
assets in such securities. Investments in developing countries are subject to
the same risks applicable to foreign investments generally, although those risks
may be increased due to conditions in such countries. For example, the
securities markets and legal systems in developing countries may only be in a
developmental stage and may provide few, or none, of the advantages or
protections of markets or legal systems available in more developed countries.
Although many of the securities in which the Funds may invest are traded on
securities exchanges, they may trade in limited volume, and the exchanges may
not provide all of the conveniences or protections provided by securities
exchanges in more developed markets. The Funds may also invest a substantial
portion of their assets in securities traded in the over-the-counter markets in
such countries and not on any exchange, which may affect the liquidity of the
investment and expose the Funds to the credit risk of their counterparties in
trading those investments. The prices of securities of issuers in developing
countries are subject to greater volatility than those of issuers in many more
developed countries.

DEBT SECURITIES. Each of the Funds may invest in debt securities from time
to time, if the Fund's Adviser believes investing in such securities might help
achieve the Fund's objective. The MidCap Opportunities and Partners Funds may
invest without limit in debt securities and other fixed-income securities. Each
of the other Funds may invest in debt securities to the extent consistent with
its investment policies, although the Fund's Adviser expects that under normal
circumstances those Funds would not likely invest a substantial portion of their
assets in debt securities.

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<PAGE>
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The MIDCAP OPPORTUNITIES FUND, the DIVERSIFIED GROWTH FUND, and THE
CONTRARIAN FUND-TM- may invest in lower-quality, high-yielding debt securities.
Lower-rated debt securities (commonly called "junk bonds") are considered to be
of poor standing and predominantly speculative. Securities in the lowest rating
categories may have extremely poor prospects of attaining any real investment
standing, and some of those securities in which a Fund may invest may be in
default. The rating services' descriptions of securities in the lower rating
categories, including their speculative characteristics, are set forth in the
Statement of Additional Information.

Like those of other fixed-income securities, the values of lower-rated
securities fluctuate in response to changes in interest rates. In addition, the
lower ratings of such securities reflect a greater possibility that adverse
changes in the financial condition of the issuer, or in general economic
conditions, or both, or an unanticipated rise in interest rates, may impair the
ability of the issuer to make payments of interest and principal. Changes by
recognized rating services in their ratings of any fixed-income security and in
the ability or perceived inability of an issuer to make payments of interest and
principal may also affect the value of these investments. See the Statement of
Additional Information.

Each of the other Funds will invest only in securities rated "investment
grade" or considered by a Fund's Adviser to be of comparable quality. Investment
grade securities are rated Baa or higher by Moody's Investors Service, Inc. or
BBB or higher by Standard & Poor's. Securities rated Baa or BBB lack outstanding
investment characteristics, have speculative characteristics, and are subject to
greater credit and market risks than higher-rated securities. Descriptions of
the securities ratings assigned by Moody's and Standard & Poor's are described
in the Statement of Additional Information.

A Fund will not necessarily dispose of a security when its debt rating is
reduced below its rating at the time of purchase, although the Fund's Adviser
will monitor the investment to determine whether continued investment in the
security will assist in meeting the Fund's investment objective. If a security's
rating is reduced below investment grade, an investment in that security may
entail the risks of lower-rated securities described below.

BORROWING AND LEVERAGE. THE CONTRARIAN FUND-TM- may borrow money to invest
in additional portfolio securities. This practice, known as "leverage,"
increases the Fund's market exposure and its risk. In addition, use of short
sales by the Fund may provide the economic equivalent of the Fund's borrowing
money. When the Fund has borrowed money for leverage and its investments
increase or decrease in value, the Fund's net asset value will normally increase
or decrease more than if it had not borrowed money. The interest the Fund must
pay on borrowed money will reduce the amount of any potential gains or increase
any losses. The extent to which the Fund will borrow money, and the amount it
may borrow, depend on market conditions and interest rates. Successful use of
leverage depends on the Adviser's ability to predict market movements correctly.
The Fund may at times borrow money by means of reverse repurchase agreements.
Reverse repurchase agreements generally involve the sale by the Fund of
securities held by it and an agreement to repurchase the securities at an
agreed-upon price, date, and interest payment. Reverse repurchase agreements
will increase the Fund's overall investment exposure and may result in losses.
The amount of money borrowed by the Fund for leverage may generally not exceed
one-third of the Fund's assets (including the amount borrowed).

SHORT SALES (AGGRESSIVE GROWTH FUND, RS INTERNET AGE FUND-TM-, MICROCAP
GROWTH FUND, VALUE + GROWTH FUND, THE CONTRARIAN FUND-TM-, AND GLOBAL NATURAL
RESOURCES FUND ONLY). When a Fund's Adviser anticipates that the price of a
security will decline, it may sell the security short and borrow the same
security from a broker or other institution to complete the sale. A Fund may
make a profit or incur a loss depending upon whether the market price of the
security decreases or increases between the date of the short sale and the date
on which the Fund must replace the borrowed security. An increase in the value
of a security sold short by a Fund over the price at which it was sold short
will result in a loss to the Fund, and there can be no assurance that

33
<PAGE>
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a Fund will be able to close out the position at any particular time or at an
acceptable price.

The Contrarian Fund-TM- may enter into short sales on securities with a
value of up to 40% of the Fund's total assets. Use of short sales by a Fund may
have the effect of providing the Fund with investment leverage. For a
description of the effects and the risks of investment leverage, see "Borrowing
and leverage" in this Prospectus. Each of the Funds other than The Contrarian
Fund-TM- may enter into short sales on securities with a value of up to 25% of
the Fund's total assets.

ZERO COUPON BONDS. Any of the Funds may at times invest in so-called
"zero-coupon" bonds and "payment-in-kind" bonds. Zero-coupon bonds are issued at
a significant discount from face value and pay interest only at maturity rather
than at intervals during the life of the security. Payment-in-kind bonds allow
the issuer, at its option, to make current interest payments on the bonds either
in cash or in additional bonds. The values of zero-coupon bonds and payment-in-
kind bonds are subject to greater fluctuation in response to changes in market
interest rates than bonds which pay interest currently, and may involve greater
credit risk than such bonds.

OPTIONS AND FUTURES. A Fund may buy and sell call and put options to hedge
against changes in net asset value or to attempt to realize a greater current
return. In addition, through the purchase and sale of futures contracts and
related options, a Fund may at times seek to hedge against fluctuations in net
asset value and to attempt to increase its investment return.

A Fund's ability to engage in options and futures strategies will depend on
the availability of liquid markets in such instruments. It is impossible to
predict the amount of trading interest that may exist in various types of
options or futures contracts. Therefore, there is no assurance that a Fund will
be able to utilize these instruments effectively for the purposes stated above.
Options and futures transactions involve certain risks which are described below
and in the Statement of Additional Information.

Transactions in options and futures contracts involve brokerage costs and
may require a Fund to segregate assets to cover its outstanding positions. For
more information, see the Statement of Additional Information.

INDEX FUTURES AND OPTIONS. A Fund may buy and sell index futures contracts
("index futures") and options on index futures and on indices (or may purchase
investments whose values are based on the value from time to time of one or more
securities indices) for hedging purposes. An index future is a contract to buy
or sell units of a particular bond or stock index at an agreed price on a
specified future date. Depending on the change in value of the index between the
time when the Fund enters into and terminates an index futures or option
transaction, the Fund realizes a gain or loss. A Fund may also buy and sell
index futures and options to increase its investment return.

RISKS RELATED TO OPTIONS AND FUTURES STRATEGIES. Options and futures
transactions involve costs and may result in losses. Certain risks arise because
of the possibility of imperfect correlations between movements in the prices of
futures and options and movements in the prices of the underlying security or
index or of the securities held by a Fund that are the subject of a hedge. The
successful use by a Fund of the strategies described above further depends on
the ability of its Adviser to forecast market movements correctly. Other risks
arise from a Fund's potential inability to close out futures or options
positions. Although a Fund will enter into an options or futures transactions
only if its Adviser believes that a liquid secondary market exists for such
option or futures contract, there can be no assurance that a Fund will be able
to effect closing transactions at any particular time or at an acceptable price.

Each Fund expects that its options and futures transactions generally will
be conducted on recognized exchanges. A Fund may in certain instances purchase
and sell options in the over-the-counter markets. A Fund's ability to terminate
options in the over-the-counter markets may be more limited than for
exchange-traded options, and such transactions also involve the risk that
securities dealers participating in such

34
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transactions would be unable to meet their obligations to the Fund. A Fund will,
however, engage in over-the-counter transactions only when appropriate
exchange-traded transactions are unavailable and when, in the opinion of its
Adviser, the pricing mechanism and liquidity of the over-the-counter markets are
satisfactory and the participants are responsible parties likely to meet their
obligations.

A Fund will not purchase futures or options on futures or sell futures if,
as a result, the sum of the initial margin deposits on the Fund's existing
futures positions and premiums paid for outstanding options on futures contracts
would exceed 5% of the Fund's net assets. (For options that are "in-the-money"
at the time of purchase, the amount by which the option is "in-the-money" is
excluded from this calculation.)

NON-DIVERSIFICATION AND SECTOR CONCENTRATION. THE CONTRARIAN FUND-TM- and
the PARTNERS FUND are "non-diversified" investment companies, and may invest
their assets in a more limited number of issuers than may other investment
companies. Under the Internal Revenue Code, an investment company, including a
non-diversified investment company, generally may not invest more than 25% of
its assets in the securities of any one issuer other than U.S. Government
securities and other securities of certain other investment companies and, with
respect to 50% of its total assets, a Fund may not invest more than 5% of its
total assets in the securities of any one issuer (except U.S. Government
securities and securities of certain other investment companies). Thus, each of
those Funds may invest up to 25% of its total assets in the securities of each
of any two issuers. This practice involves an increased risk of loss to a Fund
if the market value of a security should decline or its issuer were otherwise
not to meet its obligations. At times a Fund may invest more than 25% of its
assets in securities of issuers in one or more market sectors such as, for
example, the technology sector. A market sector may be made up of companies in a
number of related industries. A Fund (other than The Information Age
Fund-Registered Trademark-, RS Internet Age Fund-TM-, and Global Natural
Resources Fund, which typically concentrate in specific market sectors) would
only concentrate its investments in a particular market sector if its Adviser
were to believe the investment return available from concentration in that
sector justifies any additional risk associated with concentration in that
sector. When a Fund concentrates its investments in a market sector, financial,
economic, business, and other developments affecting issuers in that sector will
have a greater effect on the Fund than if it had not concentrated its assets in
that sector.

HIGH-TECHNOLOGY AND THE INTERNET. Many of the Funds may invest all or a
substantial portion of their assets in companies in high-technology or
Internet-related sectors. Companies in those sectors operate in markets that are
characterized by rapid change, evolving industry standards, frequent new service
and product announcements, introductions, and enhancements, and changing
customer demands. The failure of a company to adapt to such changes could have a
material adverse effect on the company's business, results of operations, and
financial condition. In addition, the widespread adoption of new technologies or
other technological changes could require substantial expenditures by a company
to modify or adapt its services or infrastructure, which could have a material
adverse effect on its business, results of operations, and financial condition.
Investments in these sectors may be highly volatile.

SECURITIES LOANS AND REPURCHASE AGREEMENTS. Each of the Funds other than
the Value + Growth Fund may lend portfolio securities to broker-dealers, and
each of the Funds may enter into repurchase agreements. These transactions must
be fully collateralized at all times, but involve some risk to a Fund if the
other party should default on its obligations and the Fund is delayed or
prevented from recovering the collateral.

DEFENSIVE STRATEGIES. At times, a Fund's Adviser may judge that market
conditions make pursuing a Fund's basic investment strategy inconsistent with
the best interests of its shareholders. At such times, the Adviser may
temporarily use alternative strategies, primarily designed to reduce
fluctuations in the values of the Fund's assets. In implementing these
"defensive" strategies, a Fund may invest in U.S. Government securities, other
high-quality debt

35
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instruments, and other securities its Adviser believes to be consistent with the
Fund's best interests. If such a temporary "defensive" strategy is implemented,
a Fund may not achieve its investment objective.

PORTFOLIO TURNOVER. The length of time a Fund has held a particular
security is not generally a consideration in investment decisions. The
investment policies of a Fund may lead to frequent changes in the Fund's
investments, particularly in periods of volatile market movements. A change in
the securities held by a Fund is known as "portfolio turnover." Portfolio
turnover generally involves some expense to a Fund, including brokerage
commissions or dealer mark-ups and other transaction costs on the sale of
securities and reinvestment in other securities. Such sales may result in
realization of taxable capital gains including short-term capital gains which
are generally taxed to shareholders at ordinary income tax rates. The Portfolio
turnover rates for each of the Funds are set forth under "Financial Highlights."

MANAGEMENT OF THE FUNDS

INVESTMENT ADVISERS
- -------------------------------------

RS Investment Management, L.P., 388 Market Street, Suite 200, San Francisco,
CA 94111, is the investment adviser for each of the Funds other than the
Emerging Growth Fund. RSIM, L.P., a California partnership, was formed in 1993.
RS Investment Management, Inc., 40 Tower Lane, Avon Park South, Avon,
Connecticut 06001 is the investment adviser for the Emerging Growth Fund.
RSIM, Inc. commenced operations in March 1986. (RSIM, L.P. and RSIM, Inc. are
sometimes referred to collectively in this Prospectus as "RS Investment
Management.")

Subject to such policies as the Trustees may determine, RS Investment
Management (or a Sub-Adviser to the Fund in question, as the case may be)
furnishes a continuing investment program for the Funds and makes investment
decisions on their behalf. The Trust pays all expenses not assumed by RS
Investment Management including, among other things, Trustees' fees, auditing,
accounting, legal, custodial, investor servicing, and shareholder reporting
expenses, and payments under the Funds' Distribution Plans.

The Advisers place all orders for purchases and sales of the Funds'
investments. In selecting broker-dealers, an Adviser may consider research and
brokerage services furnished to it and its affiliates. Subject to seeking the
most favorable price and execution available, an Adviser may consider sales of
shares of the Funds as a factor in the selection of broker-dealers.

RS Investment Management may at times bear certain expenses of the Funds.
The Investment Advisory Agreements between the Funds and RS Investment
Management permit RS Investment Management to seek reimbursement for those
expenses within the succeeding two-year period, subject to any expense
limitations then applicable to the Fund in question.

ADMINISTRATIVE SERVICES. Each of the AGGRESSIVE GROWTH, DIVERSIFIED GROWTH,
THE INFORMATION AGE-REGISTERED TRADEMARK-, RS INTERNET AGE-TM-, MICROCAP GROWTH,
MIDCAP OPPORTUNITIES, AND GLOBAL NATURAL RESOURCES FUNDS has entered into an
agreement with RSIM, L.P. pursuant to which RSIM, L.P. provides administrative
services to the Fund. No fees are payable by the Funds under the agreement.

SUB-ADVISERS
- -------------------------------------

Elijah Asset Management, LLC, 100 Pine St., Suite 420, San Francisco,
California 94111, a newly formed Delaware limited liability company, serves as
sub-adviser to The Information Age Fund-Registered Trademark- and the Value +
Growth Fund in respect of all of the assets of those Funds. Eastbourne
Management, L.L.C. 1101 Fifth Avenue, Suite

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160, San Rafael, California 94901, serves as a sub-adviser in respect of a
portion of the assets of The Contrarian Fund-TM-. (Each of Elijah Asset
Management and Eastbourne is sometimes referred to as a "Sub-Adviser.") Subject
to such policies as the Trustees or RSIM, L.P. may determine, each Sub-Adviser
manages such of the Fund's assets as are allocated to it in accordance with the
Fund's investment objective, policies, and limitations. Each Sub-Adviser also
makes investment decisions for the Fund as to those assets and places orders to
purchase and sell securities and other investments for such Fund in respect of
those assets.

ELIJAH ASSET MANAGEMENT, LLC. RSIM, L.P. pays a fee to Elijah Asset
Management with respect to each of The Information Age
Fund-Registered Trademark- and the Value + Growth Fund equal to 50% of the fees
paid to RSIM, L.P. by such Fund pursuant to its Investment Advisory Agreement.

Pursuant to an agreement with RSIM, L.P., Elijah Asset Management has agreed
to employ Mr. Ronald Elijah as the full-time principal portfolio manager of The
Information Age Fund-Registered Trademark- and the Value + Growth Fund.
Previously, Mr. Elijah managed those Funds as an employee of RSIM, L.P.

EASTBOURNE MANAGEMENT, L.L.C. RSIM, L.P. allocates a portion of The
Contrarian Fund's-TM- assets for management by Eastbourne in circumstances where
RSIM, L.P. believes that management of those assets by Eastbourne would be in
the best interests of the Fund, such as where RSIM, L.P. believes that an
increase in, or change to, the Fund's short positions might be desirable, or
where it believes that long investments by the Fund might be desirable in
sectors or companies where Eastbourne might offer a successful investment
program. RSIM, L.P. pays a fee to Eastbourne in an amount equal to 40% of the
fees paid to RSIM, L.P. under its Investment Advisory Agreement with the Fund,
in respect of assets allocated to Eastbourne. Eastbourne may terminate its
sub-advisory agreement at any time.

For 1999, the Funds paid, in total, the following advisory fees (as a
percentage of each Fund's average net assets):

<TABLE>
<CAPTION>
ADVISORY CONTRACTUAL
FEES PAID* RATE
---------- -----------
<S> <C> <C>
RS Diversified Growth Fund 1.00% 1.00%
RS Emerging Growth Fund 1.00% 1.00%
The Information Age
Fund-Registered Trademark- 1.00% 1.00%
RS Internet Age Fund-TM-(1) 1.25% 1.25%
RS MicroCap Growth Fund 1.25% 1.25%
RS MidCap Opportunities Fund 0.94% 1.00%
RS Value + Growth Fund 1.00% 1.00%
The Contrarian Fund-TM- 1.50% 1.50%
RS Global Natural Resources Fund 1.00% 1.00%
RS Partners Fund 0.71% 1.25%
</TABLE>

* The fees paid reflect expense limitations in effect during the period for
certain Funds. They do not reflect reimbursements by the Funds during the year
for expenses borne by RSIM in prior periods.

(1) Shares of the RS Internet Age Fund-TM- were first offered for sale on
December 1, 1999. Therefore, the fees paid reflect fees for December 1 through
December 31, 1999.

PORTFOLIO MANAGERS

Roderick R. Berry, formerly an employee of RSIM, L.P. and now a member of
Elijah Asset Management, serves as a co-portfolio manager of The Information Age
Fund-Registered Trademark-. Prior to joining Elijah Asset Management, Mr. Berry
was a member of the RS Investment Management research team. He has served on the
management team of that Fund since its inception. Prior to joining RS Investment
Management, Mr. Berry worked for USL Capital for six years as both an investment
officer and a financial manager. Prior to joining USL Capital, he was the
assistant product manager for interest-bearing checking at Wells Fargo Bank.
From 1987-1989, Mr. Berry was president and founder of the Bay Area Optical
Laboratory, Inc., a wholesale optical laboratory. He holds a B.A. in economics
from Stanford University and an M.B.A. from the J.L. Kellogg School at
Northwestern University.

James L. Callinan is responsible for managing the Emerging Growth Fund's and
the Aggressive Growth Fund's portfolios. Mr. Callinan is also a co-manager of RS
Internet Age Fund-TM-. From

37
<PAGE>
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- --------------------------------------------------------------------------------
1986 until June 1996, Mr. Callinan was employed by Putnam Investments, where,
beginning in June 1994, he served as portfolio manager of the Putnam OTC
Emerging Growth Fund. Mr. Callinan received an A.B. in economics from Harvard
College, an M.S. in accounting from New York University, and an M.B.A. from
Harvard Business School, and is a Charter Financial Analyst.

Ronald E. Elijah, formerly an employee of RSIM, L.P. and now a managing
member of Elijah Asset Management, has managed the Value + Growth Fund's
portfolio since that Fund's inception in April 1992. Mr. Elijah is also the
portfolio manager for The Information Age Fund-Registered Trademark-. From
August 1985 to January 1990, Mr. Elijah was a securities analyst for Robertson,
Stephens & Company LLC. From January 1990 to January 1992, Mr. Elijah was an
analyst and portfolio manager for Water Street Capital, which managed short
selling investment funds. He holds a master's degree in economics from Humboldt
State University and an M.B.A. with an emphasis in finance from Golden Gate
University.

David J. Evans is responsible for managing the portfolio of the MicroCap
Growth Fund. Mr. Evans has more than fifteen years of investment research and
management experience, and has been a part of the management team at RS
Investment Management since 1989. Mr. Evans was an analyst and portfolio manager
at CIGNA before joining RS Investment Management. He holds a B.A. from Muskingum
College and an M.B.A. from the Wharton School of the University of Pennsylvania.

Andrew P. Pilara, Jr. has been responsible for managing the Partners Fund
since the Fund's inception in July 1995 and is responsible for managing the
Global Natural Resources Fund. Since August 1993 he has been a member of The
Contrarian Fund-TM- management team. Mr. Pilara has been involved in the
securities business for over 25 years, with experience in portfolio management,
research, trading, and sales. Prior to joining RS Investment Management, he was
president of Pilara Associates, an investment management firm he established in
1974. He holds a B.A. in economics from St. Mary's College. Mr. Pilara served as
a Trustee of the Trust from September 1997 to May 1999.

Rainerio Reyes joined RS Investment Management in February 1994 and serves
as a co-portfolio manager of the MicroCap Growth Fund. Prior to joining RS
Investment Management, he was a manager in Ernst & Young's management consulting
division and served clients in the retail, hotel, financial services, real
estate, and business services industries. During the Aquino Administration,
Mr. Reyes served as Executive Assistant to the Secretary of Transportation and
Communications, Republic of the Philippines. While with the Hilton Hotels
Corporation, Mr. Reyes held various management positions with the food and
beverage and rooms divisions. Mr. Reyes holds a B.S. in hotel and restaurant
administration from Cornell University and an M.B.A. with a major in finance
from the Wharton School of the University of Pennsylvania.

John H. Seabern serves as a co-portfolio manager of the Diversified Growth
Fund. He has served on the management team of that Fund since its inception.
Mr. Seabern is also a research analyst for the MidCap Opportunities Fund. Prior
to joining the MidCap Opportunities Fund, Mr. Seabern was a research analyst for
The Contrarian Fund-TM-. He has been with RS Investment Management since
September 1993. Prior to that time, Mr. Seabern worked at Duncan-Hurst Capital
Management as a performance analyst for two years. He holds a B.S. degree in
finance from the University of Colorado and is a CFA.

John L. Wallace has been responsible for managing the MidCap Opportunities
Fund since its inception in July 1995 and is responsible for managing the
Diversified Growth Fund. Prior to joining RS Investment Management, Mr. Wallace
was Vice President of Oppenheimer Management Corp., where he was portfolio
manager of the Oppenheimer Main Street Income and Growth Fund. He holds a B.A.
from the University of Idaho and an M.B.A. from Pace University.

Catherine Baker is co-manager of RS Internet Age Fund-TM-. Ms. Baker joined
the RS Investment Management research team in

38
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March 1997 and is a member of RS Growth Equities Group. Previously, she was a
Principal and Senior Analyst covering information technology and services
companies at Robertson, Stephens & Co. beginning in the spring of 1995. Prior to
joining Robertson, Stephens & Co., she served as an analyst at Cowen & Company.
She also has previous brokerage analyst experience at J.P. Morgan Securities and
industry experience at IBM as an analyst in software acquisitions. Cathy has a
B.S.E. in Electrical Engineering from the University of Michigan and an M.B.A.
from Carnegie-Mellon University. She is also a CFA.

The Contrarian Fund-TM- is managed by a team of investment professionals at
RS Investment Management and Eastbourne Management, L.L.C. Mr. Paul Stephens and
Mr. Andrew P. Pilara, Jr. serve as senior members of the RS Investment
Management team for the Fund and Mr. Rick Barry serves as a senior member of the
Eastbourne team for the Fund.

HOW THE FUNDS' SHARES ARE PRICED

CALCULATION OF NET ASSET VALUE
- -------------------------------------

Each Fund calculates the net asset value of its shares by dividing the total
value of its assets, less its liabilities, by the number of shares outstanding.
Shares are valued as of 4:30 p.m. eastern time on each day the New York Stock
Exchange is open. The Funds value their portfolio securities for which market
quotations are readily available at market value. Short-term investments that
will mature in 60 days or less are stated at amortized cost, which approximates
market value. The Funds value all other securities and assets at their fair
values as determined in accordance with the guidelines and procedures adopted by
the Trust's Board of Trustees.

The Funds will not price their shares on days when the New York Stock
Exchange is closed. The Funds expect that the days, other than weekend days,
that the New York Stock Exchange will be closed are New Year's Day, Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day (observed), Labor Day, Thanksgiving Day, and Christmas Day.

Securities quoted in foreign currencies are translated into U.S. dollars at
the current exchange rates or at such other rates as may be used in accordance
with procedures approved by the Trustees. As a result, fluctuations in the
values of such currencies in relation to the U.S. dollar will affect the net
asset value of a Fund's shares even though there has not been any change in the
values of such securities as quoted in such foreign currencies. All assets and
liabilities of a Fund denominated in foreign currencies are valued in U.S.
dollars based on the exchange rate last quoted by a major bank prior to the time
when the net asset value of a Fund's shares is calculated. Because certain of
the securities in which a Fund may invest may trade on days when such Fund does
not price its shares, the net asset value of a Fund's shares may change on days
when shareholders will not be able to purchase or redeem their shares.

Generally, trading in certain securities (such as foreign securities) is
substantially completed each day at various times prior to the close of the
Exchange. The values of these securities used in determining the net asset value
are computed as of such times. Also because of the amount of time required to
collect and process trading information as to large number of securities issues,
the values of certain securities (such as convertible bonds) are determined
based on market quotations collected earlier in the day at the latest
practicable time prior to the close of the Exchange. Occasionally, events
affecting the value of such securities may occur between such times and the
close of the Exchange which will not be reflected in the computation of net
asset value. If events materially affecting the value of such securities occur
during such period, then these securities will be valued at their fair value
following procedures approved by the Trustees.

During any 90-day period, the Trust is committed to pay in cash all requests
to redeem

39
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shares by any one shareholder, up to the lesser of $250,000 and 1% of the value
of a Fund's net assets at the beginning of the period. Should redemptions by any
shareholder of a Fund exceed this limitation, the Trust reserves the right to
redeem the excess amount in whole or in part in securities or other assets. If
shares are redeemed in this manner, the redeeming shareholder typically will
incur brokerage and other costs in converting the securities to cash.

HOW TO PURCHASE SHARES

Currently, your minimum initial investment is $5,000 ($1,000 for IRA and for
gift/transfer-to-minor accounts), and your subsequent investments must be at
least $100 ($1 for IRA). You may obtain an Application by calling RS Funds at
1-800-766-FUND, or by writing to RS Funds at 388 Market Street, Suite 200, San
Francisco, CA 94111. For more information on RS Funds IRAs, please call to
request an IRA Disclosure Statement.

INITIAL INVESTMENTS
- -------------------------------------

You may make your initial investment by mail or by wire transfer as
described below.

BY MAIL: Send a completed Application, together with a check made payable
to the Fund in which you intend to invest (or, if you are investing in more than
one Fund, make your check payable to RS Investment Trust), to the Funds'
Transfer Agent: National Financial Data Services, P.O. Box 219717, Kansas City,
MO 64121-9717.

BY OVERNIGHT MAIL: Send the information described above to: National
Financial Data Services, 330 West 9th Street, First Floor, Kansas City, MO
64105-1514.

BY WIRE:

(1) Telephone National Financial Data Services at 1-800-624-8025. Indicate the
name(s) to be used on the account registration, the mailing address, your
social security or tax ID number, the amount being wired, the name of your
wiring bank, and the name and telephone number of a contact person at the
wiring bank.

(2) Then instruct your bank to wire the specified amount, along with your
account name and number to:

State Street Bank and Trust Company
ABA# 011 000028
Attn.: Custody
DDA# 99047177
225 Franklin Street
Boston, MA 02110
Credit: [Name of Fund]
For further credit:
---------------------------------
(Shareholder's name)
---------------------------------
(Shareholder's account #)

(3) At the same time, you MUST mail a completed and signed Application to:
National Financial Data Services, P.O. Box 219717, Kansas City, MO
64121-9717. Please include your account number on the Application. Failure
to supply a signed Application may result in backup withholding.

You also may purchase and sell shares through certain securities brokers.
Such brokers may charge you a transaction fee for this service; account options
available to clients of securities brokers, including arrangements regarding the
purchase and sale of Fund shares, may differ from those available to persons
investing directly in the Funds. The Funds, an Adviser, or Provident
Distributors, Inc. ("Provident"), the Funds' distributor, may in their
discretion pay such brokers for shareholder, subaccounting, and other services.

SUBSEQUENT INVESTMENTS
- -------------------------------------

After your account is open, you may invest by mail, telephone, or wire at
any time. Please include your name and account number on all checks and wires.
Please use separate checks or wires for investments to separate accounts.

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

AUTOBUY. The Autobuy option allows shareholders to purchase shares by
moving money directly from their checking account to a Fund. If you have
established the Autobuy option, you may purchase additional shares in an
existing account in any amount that does not exceed the cumulative dollar value
held in the account, by calling the Transfer Agent at 1-800-624-8025 and
instructing the Transfer Agent as to the dollar amount you wish to invest. The
investment will automatically be processed through the Automatic Clearing House
(ACH) system. Shares will be issued at the net asset value per share after the
Fund accepts your order, which will typically be on the date when you provide
proper instructions to the Transfer Agent (assuming you do so prior to the close
of the New York Stock Exchange). There is no fee for this option. If you did not
establish this option at the time you opened your account, send a letter of
instruction, along with a voided check, to the Transfer Agent.

OTHER INFORMATION
ABOUT PURCHASING SHARES
- -------------------------------------

All purchases of the Funds' shares are subject to acceptance by a Fund and
are not binding until accepted and shares are issued. Your signed and completed
Application (for initial investments) or account statement stub (for subsequent
investments) and full payment, in the form of either a wire transfer or a check,
must be received and accepted by a Fund before any purchase becomes effective.
Failure to include your specific Fund and account information may delay
processing of purchases. Purchases of Fund shares are made at the net asset
value next determined after the purchase is accepted. See "How the Funds' Shares
are Priced." Please initiate any wire transfer early in the morning to ensure
that the wire is received by a Fund before the close of the New York Stock
Exchange, normally 4:00 p.m. eastern time.

All purchases must be made in U.S. dollars, and checks should be drawn on
banks located in the U.S. Third-party checks will not be accepted as payment for
purchases. If your purchase of shares is canceled due to non-payment or because
a check does not clear, you will be held responsible for any loss incurred by
the Funds or the Transfer Agent. Each Fund can redeem shares to reimburse it or
the Transfer Agent for any such loss.

Each Fund reserves the right to reject any purchase, in whole or in part,
and to suspend the offering of its shares for any period of time and to change
or waive the minimum investment amounts specified in this Prospectus.

No share certificates will be issued, except that certificates for shares of
the Emerging Growth Fund will be issued upon written request to the Transfer
Agent.

HOW TO SELL SHARES

You may redeem your shares, or sell your shares back to the appropriate
Fund, on any business day by following one of the procedures explained below.

REDEMPTIONS BY MAIL
- -------------------------------------

You may redeem your shares of a Fund by mailing a written request for
redemption to the Transfer Agent that:

(1) states the number of shares or dollar amount to be redeemed;

(2) identifies your Fund and account number; and

(3) is signed by you and all other owners of the account exactly as their names
appear on the account.

If you request that the proceeds from your redemption be sent to you at an
address other than your address of record, or to another party, you must include
a signature guarantee for each such signature by an eligible signature
guarantor, such as a member firm of a national securities exchange or a
commercial bank or trust company located in the United States. If you are a
resident of a foreign country, another type of certification may be required.
Please contact the Transfer Agent for more details. Corporations, fiduciaries,
and other types of shareholders may be required to supply additional documents
which support their authority to effect a redemption.

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

REDEMPTIONS BY TELEPHONE AND INTERNET

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

Unless you have indicated you do not wish to establish telephone redemption
privileges (see the Account Application or call the Transfer Agent for details),
you may redeem shares by calling the Transfer Agent at 1-800-624-8025 by the
close of the New York Stock Exchange, normally 4:00 p.m. eastern time, on any
day the New York Stock Exchange is open for business.

If an account has more than one owner, the Transfer Agent may rely on the
instructions of any one owner. Each Fund employs reasonable procedures in an
effort to confirm the authenticity of telephone instructions. If procedures
established by the Trust are not followed, the Funds and the Transfer Agent may
be responsible for any losses because of unauthorized or fraudulent
instructions. By not declining telephone redemption privileges, you authorize
the Transfer Agent to act upon any telephone instructions it believes to be
genuine (1) to redeem shares from your account and (2) to mail or wire the
redemption proceeds. If you recently opened an account by wire, you cannot
redeem shares by telephone until the Transfer Agent has received your completed
Application.

Telephone redemption is not available for shares held in IRAs. Each Fund may
change, modify, or terminate its telephone redemption services at any time upon
30 days' notice.

You may in the future be able to initiate many transactions electronically.
Neither the Funds nor the Transfer Agent will be responsible for any losses
resulting from unauthorized transactions if they follow reasonable security
procedures designed to verify the identity of the investor. The Transfer Agent
may request personalized security codes or other information. For transactions
conducted through the Internet, RSIM recommends the use of an Internet browser
with 128-bit encryption. If you do not want the ability to sell and exchange by
Internet, call RSIM for instructions.

WIRE TRANSFER OF REDEMPTIONS
- -------------------------------------

If your financial institution receives Federal Reserve wires, you may
instruct that your redemption proceeds be forwarded to you by a wire transfer.
Please indicate your financial institution's complete wiring instructions. The
Funds will forward proceeds from telephone redemptions only to the bank account
or brokerage account that you have authorized in writing. A $9.00 wire fee will
be paid either by redeeming shares from your account, or upon a full redemption,
deducting the fee from the proceeds.

AUTOSELL: The Autosell option allows shareholders to redeem shares from
their RS Fund accounts and to have the proceeds sent directly to their checking
account. If you have established the Autosell option, you may redeem shares by
calling the Transfer Agent at 1-800-624-8025 and instructing it as to the dollar
amount or number of shares you wish to redeem. The proceeds will automatically
be sent to your bank through the Automatic Clearing House (ACH) system. There is
no fee for this option. If you did not establish this option at the time you
opened your account, send a letter of instruction along with a voided check to
the Transfer Agent.

GENERAL REDEMPTION POLICIES
- -------------------------------------

The redemption price per share is the net asset value per share next
determined after the Transfer Agent receives the request for redemption in
proper form, and each Fund will make payment for redeemed shares within seven
days thereafter. Under unusual circumstances, a Fund may suspend repurchases, or
postpone payment of redemption proceeds for more than seven days, as permitted
by federal securities law. If you purchase shares of a Fund by check (including
certified check) and redeem them shortly thereafter, the Fund will delay payment
of the redemption proceeds for up to fifteen days after the Fund's receipt of
the check or until the check has cleared, whichever occurs first. If you
purchase shares of a Fund through the Autobuy option and redeem them shortly
thereafter, the Fund will delay payment of the redemption proceeds for up to
fifteen days after your purchase of shares through the Autobuy option is
accepted.

You may experience delays in exercising telephone redemptions during periods
of abnormal market activity. Accordingly, during periods of volatile economic
and market conditions, you may wish to consider transmitting redemption orders
to the Transfer Agent by an overnight courier service.

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EXCHANGES

Shares of one Fund may be exchanged for shares of another Fund. Exchanges of
shares will be made at their relative net asset values. Shares may be exchanged
only if the amount being exchanged satisfies the minimum investment required and
the shareholder is a resident of a state where shares of the Fund in question
are qualified for sale and qualifies to purchase shares of that Fund. (At the
date of this Prospectus, the Emerging Growth Fund is being offered only to
limited classes of investors.) However, you may not exchange your investment
more than four times in any twelve-month period (including the initial exchange
of your investment from that Fund during the period, and subsequent exchanges of
that investment from other Funds or RS money market funds during the same
twelve-month period).

Investors should note that an exchange will result in a taxable event and
will generally result in a taxable gain or loss. Exchange privileges may be
terminated, modified, or suspended by a Fund upon 60 days' prior notice to
shareholders.

Unless you have indicated that you do not wish to establish telephone
exchange privileges (see the Account Application or call the Funds for details),
you may make exchanges by telephone.

DIVIDENDS AND DISTRIBUTIONS

Each Fund distributes substantially all of its net investment income and net
capital gains to shareholders at least annually (more often, if necessary to
avoid certain excise or income taxes on the Fund).

YOU MAY CHOOSE EITHER OF THE FOLLOWING DISTRIBUTION OPTIONS:

- - Reinvest your distributions in additional shares of your Fund; or

- - Receive your distributions in cash.

All distributions will be automatically reinvested in Fund shares unless the
shareholder requests cash payment on at least 10 days' prior written notice to
the Transfer Agent.

TAXES

QUALIFICATION AS A REGULATED INVESTMENT COMPANY. Each Fund intends to
qualify as a "regulated investment company" under Subchapter M of the Internal
Revenue Code and to meet all other requirements that are necessary for it to be
relieved of federal taxes on income and gains it distributes to shareholders. A
Fund will distribute substantially all of its net investment income and net
capital gain income on a current basis.

TAXES ON DIVIDENDS AND DISTRIBUTIONS. For federal income tax purposes,
distributions of investment income are taxable as ordinary income. Taxes on
distributions of capital gains are determined by how long the Fund owned the
investments that generated them, rather than how long shareholders have held
Fund shares. Distributions are taxable to shareholders even if they are paid
from income or gains earned by the Fund before an investment in a Fund (and thus
were included in the price paid for the Fund shares). Distributions of gains
from investments that the Fund owned for more than one year will be taxable as
capital gains. Distributions of gains from investments that the Fund owned for
one year or less will be taxable as ordinary income. Distributions will be
taxable as described above, whether received in cash or in shares through the
reinvestment of distributions. Early in each year, the Trust will notify you of
the amount and tax status of distributions paid to you by each of the Funds for
the preceding year.

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

TAXES WHEN YOU SELL OR EXCHANGE YOUR SHARES. Any gain resulting from the
sale or exchange of your shares in the Funds will also generally be subject to
federal income or capital gains tax, depending on your holding period. A Fund's
investments in certain debt obligations may cause the Fund to recognize taxable
income in excess of the cash generated by such obligations. Thus, a Fund could
be required at times to liquidate other investments in order to satisfy its
distribution requirements.

A Fund's investments in foreign securities may be subject to foreign
withholding taxes. In that case, the Fund's yield on those securities would be
decreased. In addition, a Fund's investments in foreign securities or foreign
currencies may increase or accelerate the Fund's recognition of ordinary income
and may affect the timing or amount of the Fund's distributions. Shareholders in
a Fund that invests more than 50% of its assets in foreign securities may be
entitled to claim a credit or deduction with respect to foreign taxes.

CONSULT YOUR TAX ADVISOR ABOUT OTHER POSSIBLE TAX CONSEQUENCES. This is a
summary of certain federal tax consequences of investing in a Fund. You should
consult your tax advisor for more information on your own tax situation,
including possible foreign, state, and local taxes.

DISTRIBUTION ARRANGEMENTS AND RULE 12b-1 FEES

Provident Distributors, Inc. is the principal underwriter of the Funds'
shares. To compensate Provident for the services it provides and for the
expenses it bears in connection with the distribution of a Fund's shares, each
Fund makes payments to Provident under a Distribution Plan adopted pursuant to
Rule 12b-1 under the Investment Company Act of 1940. Under the Plan, each of the
Funds pays Provident compensation, accrued daily and paid monthly, at the annual
rate of 0.25% of the Fund's average daily net assets. Provident may pay brokers
a commission expressed as a percentage of the purchase price of shares of the
Funds.

RS Investment Management or its affiliates provide certain services to
Provident in respect of the promotion of the shares of the Funds. In return for
those services, Provident pays to RS Investment Management or those affiliates a
portion of the payments received by Provident under the Distribution Plan. The
Plan is a compensation plan.

RS Investment Management and its affiliates or Provident, at their own
expense and out of their own assets, may also provide other compensation to
financial institutions in connection with sales of the Funds' shares or the
servicing of shareholders or shareholder accounts. Such compensation may
include, but is not limited to, financial assistance to financial institutions
in connection with conferences, sales, or training programs for their employees,
seminars for the public, advertising or sales campaigns, or other financial
institution-sponsored special events. In some instances, this compensation may
be made available only to certain financial institutions whose representatives
have sold or are expected to sell significant amounts of shares. Dealers may not
use sales of the Funds' shares to qualify for this compensation to the extent
such may be prohibited by the laws or rules of any state or any self-regulatory
agency, such as the National Association of Securities Dealers, Inc.

The Funds pay distribution and other fees for the sale of their shares and
for services provided to shareholders out of the Funds' assets on an on-going
basis. As a result, over time these fees will increase the cost of your
investment and may cost you more than paying other types of sales charges.

44
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- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS

DIVERSIFIED GROWTH FUND

The financial highlights table is intended to help you understand the financial
performance of the Fund since the Fund commenced operations. Certain information
reflects financial results for a single Fund share. The total returns in the
table represent the rate that an investor would have earned or lost on an
investment in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by PricewaterhouseCoopers LLP,
whose report, along with each Fund's financial statements, is included in the
annual report, which is available upon request.

<TABLE>
<CAPTION>
Diversified Growth Fund
- -----------------------------------------------------------------------------------------------------------------
PERIOD
YEAR YEAR YEAR 8/1/96
ENDED ENDED ENDED THROUGH
12/31/99 12/31/98 12/31/97 12/31/96(1)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $15.89 $14.04 $12.42 $10.00
Net investment income/(loss) -- (0.19) (0.17) (0.05)
Net realized and unrealized gain/(loss) 22.58 2.43 3.72 2.47
- -----------------------------------------------------------------------------------------------------------------
Total operations 22.58 2.24 3.55 2.42
Distributions from net investment income -- -- -- --
Distribution from net realized capital gain (5.48) (0.39) (1.93) --
- -----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $32.99 $15.89 $14.04 $12.42
Total Return 150.21% 16.28% 29.45% 24.20%
Net assets, end of period (thousands) $304,746 $69,031 $80,278 $59,588
Net ratio of expenses to average net assets 1.84% 1.89% 1.94% 2.28%*
Gross ratio of expenses to average net assets 1.89% 1.95% 2.14% 2.44%
Net ratio of net investment income/(loss) to average net
assets (1.40)% (1.29)% (1.20)% (1.05)%*
Gross ratio of net investment income/(loss) to average net
assets (1.44)% (1.35)% (1.40)% (1.21)%
Portfolio turnover rate 473% 403% 370% 69%
- -----------------------------------------------------------------------------------------------------------------
</TABLE>

Per share data has been determined by using the average number of shares
outstanding throughout the period.

* ANNUALIZED.

(1) THE DIVERSIFIED GROWTH FUND COMMENCED OPERATIONS ON AUGUST 1, 1996.

45
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FINANCIAL HIGHLIGHTS (continued)

EMERGING GROWTH FUND

The financial highlights table is intended to help you understand the financial
performance of the Fund for the past five fiscal years. Certain information
reflects financial results for a single Fund share. The total returns in the
table represent the rate that an investor would have earned or lost on an
investment in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by PricewaterhouseCoopers LLP,
whose report, along with the Fund's financial statements, is included in the
annual report, which is available upon request.

<TABLE>
<CAPTION>
Emerging Growth Fund
- -----------------------------------------------------------------------------------------------------------------
NINE
YEAR YEAR YEAR YEAR MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
12/31/99 12/31/98 12/31/97 12/31/96 12/31/95 3/31/95
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $22.95 $18.71 $20.07 $19.21 $18.36 $18.37
Net investment
income/(loss) 0.14 (0.20) (0.14) (0.17) (0.15) (0.17)
Net realized and unrealized
gain/(loss) 40.89 5.32 3.80 4.23 2.58 2.26
- -----------------------------------------------------------------------------------------------------------------
Total operations 41.03 5.12 3.66 4.06 2.43 2.09
Distributions from net
investment income -- -- -- -- -- --
Distribution from net
realized capital gain (3.31) (0.88) (5.02) (3.20) (1.58) (2.10)
- -----------------------------------------------------------------------------------------------------------------
Net asset value, end of
period $60.67 $22.95 $18.71 $20.07 $19.21 $18.36
Total Return 182.56% 28.02% 18.54% 21.53% 13.50% 12.01%
Net assets, end of period
(thousands) $3,579,620 $403,330 $248,730 $210,404 $167,728 $182,275
Net ratio of expenses to
average net assets 1.51% 1.47% 1.50% 1.60% 1.64%* 1.56%
Gross ratio of expenses to
average net assets 1.51% 1.47% 1.50% 1.60% 1.64% 1.56%
Net ratio of net investment
income/(loss) to average
net assets (1.19)% (1.03)% (0.68)% (0.83)% (0.99)%* (0.96)%
Gross ratio of net
investment income/(loss)
to average net assets (1.19)% (1.03)% (0.68)% (0.83)% (0.99)% (0.96)%
Portfolio turnover rate 177% 291% 462% 270% 147% 280%
- -----------------------------------------------------------------------------------------------------------------
</TABLE>

Per share data has been determined by using the average number of shares
outstanding throughout the period.

* ANNUALIZED.

46
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS (continued)

THE INFORMATION AGE FUND-REGISTERED TRADEMARK-

The financial highlights table is intended to help you understand the financial
performance of the Fund since the Fund commenced operations. Certain information
reflects financial results for a single Fund share. The total returns in the
table represent the rate that an investor would have earned or lost on an
investment in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by PricewaterhouseCoopers LLP,
whose report, along with the Fund's financial statements, is included in the
annual report, which is available upon request.

<TABLE>
<CAPTION>
The Information Age Fund-Registered Trademark-
- --------------------------------------------------------------------------------------------------------------------
PERIOD
YEAR YEAR YEAR YEAR 11/15/95
ENDED ENDED ENDED ENDED THROUGH
12/31/99 12/31/98 12/31/97 12/31/96 12/31/95(1)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $17.96 $11.80 $11.51 $9.30 $10.00
Net investment income/(loss) -- (0.20) (0.22) (0.20) (0.01)
Net realized and unrealized gain/(loss) 21.72 6.36 0.95 2.68 (0.69)
- --------------------------------------------------------------------------------------------------------------------
Total operations 21.72 6.16 0.73 2.48 (0.70)
Distributions from net investment income -- -- -- -- --
Distribution from net realized capital gain (3.89) -- (0.44) (0.27) --
- --------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $35.79 $17.96 $11.80 $11.51 $9.30
Total Return 126.22% 52.20% 6.15% 26.72% (7.00)%
Net assets, end of period (thousands) $354,636 $159,604 $118,832 $106,264 $32,826
Net ratio of expenses to average net assets 1.68% 1.74% 1.82% 2.03% 2.13%*
Gross ratio of expenses to average net assets 1.69% 1.74% 1.82% 2.03% 2.13%
Net ratio of net investment income/(loss) to average
net assets (1.54)% (1.55)% (1.71)% (1.85)% (0.89)%*
Gross ratio of net investment income/(loss) to average
net assets (1.55)% (1.55)% (1.71)% (1.85)% (0.89)%
Portfolio turnover rate 182% 224% 369% 452% 89%
- --------------------------------------------------------------------------------------------------------------------
</TABLE>

Per share data has been determined by using the average number of shares
outstanding throughout the period.

* ANNUALIZED.

(1) THE INFORMATION AGE FUND-REGISTERED TRADEMARK- COMMENCED OPERATIONS ON
NOVEMBER 15, 1995.

47
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS (continued)

RS INTERNET AGE FUND-TM-

The financial highlights table is intended to help you understand the financial
performance of the Fund since the Fund commenced operations. Certain information
reflects financial results for a single Fund share. The total returns in the
table represent the rate that an investor would have earned or lost on an
investment in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by PricewaterhouseCoopers LLP,
whose report, along with the Fund's financial statements, is included in the
annual report, which is available upon request.

<TABLE>
<CAPTION>
RS Internet Age Fund-TM-
- --------------------------------------------------------------------------------------------------------------------
PERIOD
12/1/99
THROUGH
12/31/99(1)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.00
Net investment income/(loss) --
Net realized and unrealized gain/(loss) $2.18
- --------------------------------------------------------------------------------------------------------------------
Total operations $2.18
Distributions from net investment income --
Distribution from net realized capital gain --
- --------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.18
Total Return 21.80%
Net assets, end of period (thousands) $103,585
Net ratio of expenses to average net assets 1.76%*
Gross ratio of expenses to average net assets 1.82%
Net ratio of net investment income/(loss) to average
net assets (1.34)%*
Gross ratio of net investment income/(loss) to average
net assets (1.40)%
Portfolio turnover rate 2%
- --------------------------------------------------------------------------------------------------------------------
</TABLE>

Per share data has been determined by using the average number of shares
outstanding throughout the period.

* ANNUALIZED.

(1) RS INTERNET AGE FUND-TM- COMMENCED OPERATIONS ON DECEMBER 1, 1999.

48
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS (continued)

MICROCAP GROWTH FUND

<TABLE>
<CAPTION>
MicroCap Growth Fund
- -------------------------------------------------------------------------------------------------------------------
PERIOD
YEAR YEAR YEAR 8/15/96
ENDED ENDED ENDED THROUGH
12/31/99 12/31/98 12/31/97 12/31/96(1)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $14.26 $14.35 $11.00 $10.00
Net investment income/(loss) -- (0.21) (0.19) (0.08)
Net realized and unrealized gain/(loss) 8.08 0.12 3.54 1.08
- -------------------------------------------------------------------------------------------------------------------
Total operations 8.08 (0.09) 3.35 1.00
Distributions from net investment income -- -- -- --
Distribution from net realized capital gain -- -- -- --
- -------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $22.34 $14.26 $14.35 $11.00
Total Return 56.66% (0.63)% 30.45% 10.00%
Net assets, end of period (thousands) $103,312 $94,723 $104,858 $9,464
Net ratio of expenses to average net assets 1.92% 1.91% 1.95% 3.08%*
Gross ratio of expenses to average net assets 1.97% 2.01% 2.60% 6.40%
Net ratio of net investment income/(loss) to average net
assets (1.67)% (1.46)% (1.35)% (2.13)%*
Gross ratio of net investment income/(loss) to average net
assets (1.72)% (1.56)% (2.00)% (5.45)%
Portfolio turnover rate 90% 108% 170% 22%
- -------------------------------------------------------------------------------------------------------------------
</TABLE>

Per share data has been determined by using the average number of shares
outstanding throughout the period.

* ANNUALIZED.

(1) THE MICROCAP GROWTH FUND COMMENCED OPERATIONS ON AUGUST 15, 1996.

49
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS (continued)

MIDCAP OPPORTUNITIES FUND

The financial highlights table is intended to help you understand the financial
performance of the Fund since the Fund commenced operations. Certain information
reflects financial results for a single Fund share. The total returns in the
table represent the rate that an investor would have earned or lost on an
investment in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by PricewaterhouseCoopers LLP,
whose report, along with the Fund's financial statements, is included in the
annual report, which is available upon request.

<TABLE>
<CAPTION>
MidCap Opportunities Fund
- ---------------------------------------------------------------------------------------------------------------------------------
PERIOD
YEAR YEAR YEAR YEAR 7/12/95
ENDED ENDED ENDED ENDED THROUGH
12/31/99 12/31/98 12/31/97 12/31/96 12/31/95(1)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $14.04 $13.52 $13.62 $11.24 $10.00
Net Investment income/(loss) 0.04 0.14 0.07 0.02 --
Net realized and unrealized
gain/(loss) 6.95 1.34 2.90 2.70 1.24
- ---------------------------------------------------------------------------------------------------------------------------------
Total operations 6.99 1.48 2.97 2.72 1.24
Distributions:
Distributions from net investment
income (0.05) (0.19) (0.04) (0.02) --
Distribution from net realized
capital gain (5.06) (0.77) (3.03) (0.32) --
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $15.92 $14.04 $13.52 $13.62 $11.24
Total Return 56.12% 11.65% 22.40% 24.16% 12.40%
Net assets, end of period
(thousands) $226,529 $183,910 $298,669 $309,775 $136,902
Net ratio of expenses to average
net assets 1.59% 1.30% 1.30% 1.71% 1.94%*
Gross ratio of expenses to
average net assets 1.67% 1.64% 1.72% 1.76% 1.94%
Net ratio of net investment
income/(loss) to average net
assets 0.31% 1.00% 0.45% 0.18% (0.01)%*
Gross ratio of net investment
income/(loss) to average net
assets 0.23% 0.65% 0.03% 0.13% (0.01)%
Portfolio turnover rate 408% 212% 236% 212% 97%
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

Per share data has been determined by using the average number of shares
outstanding throughout the period.

* ANNUALIZED.

(1) THE MIDCAP OPPORTUNITIES FUND COMMENCED OPERATIONS ON JULY 12, 1995.

50
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS (continued)

VALUE + GROWTH FUND

The financial highlights table is intended to help you understand the financial
performance of the Fund for the past five fiscal years. Certain information
reflects financial results for a single Fund share. The total returns in the
table represent the rate that an investor would have earned or lost on an
investment in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by PricewaterhouseCoopers LLP,
whose report, along with each Fund's financial statements, is included in the
annual report, which is available upon request.

<TABLE>
<CAPTION>
Value + Growth Fund
- --------------------------------------------------------------------------------------------------------------------------
NINE
YEAR YEAR YEAR YEAR MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
12/31/99 12/31/98 12/31/97 12/31/96 12/31/95 3/31/95
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $25.92 $23.18 $24.16 $22.66 $18.25 $13.56
Net investment income/(loss) -- (0.25) (0.26) (0.24) (0.16) (0.18)
Net realized and unrealized
gain/(loss) 7.16 6.33 3.71 3.47 4.57 5.07
- --------------------------------------------------------------------------------------------------------------------------
Total operations 7.16 6.08 3.45 3.23 4.41 4.89
Distributions from net investment
income -- -- -- -- -- --
Distribution from net realized
capital gain (2.65) (3.34) (4.43) (1.73) -- (0.20)
- --------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $30.43 $25.92 $23.18 $24.16 $22.66 $18.25
Total Return 28.43% 27.44% 13.81% 14.12% 24.16% 36.27%
Net assets, end of period
(thousands) $673,900 $677,505 $752,994 $643,157 $1,140,151 $428,903
Net ratio of expenses to average net
assets 1.59% 1.46% 1.44% 1.51% 1.45%* 1.68%
Gross ratio of expenses to average
net assets 1.59% 1.46% 1.44% 1.51% 1.45% 1.68%
Net ratio of net investment income/
(loss) to average net assets (1.20)% (0.96)% (0.96)% (1.06)% (1.04)%* (1.09)%
Gross ratio of net investment
income/ (loss) to average net
assets (1.20)% (0.96)% (0.96)% (1.06)% (1.04)% (1.09)%
Portfolio turnover rate 80% 190% 228% 221% 104% 232%
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>

Per share data has been determined by using the average number of shares
outstanding throughout the period.

* ANNUALIZED.

51
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS (continued)

THE CONTRARIAN FUND-TM-

The financial highlights table is intended to help you understand the financial
performance of the Fund for the past five fiscal years. Certain information
reflects financial results for a single Fund share. The total returns in the
table represent the rate that an investor would have earned or lost on an
investment in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by PricewaterhouseCoopers LLP,
whose report, along with each Fund's financial statements, is included in the
annual report, which is available upon request.

<TABLE>
<CAPTION>
The Contrarian Fund-TM-
- -----------------------------------------------------------------------------------------------------------------
NINE
YEAR YEAR YEAR YEAR MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
12/31/99 12/31/98 12/31/97 12/31/96 12/31/95 3/31/95
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $7.23 $11.61 $16.57 $13.78 $10.70 $12.34
Net investment income/(loss) 0.20 (0.08) 0.00 0.00 (0.01) (0.04)
Net realized and unrealized
gain/(loss) 2.57 (3.72) (4.88) 2.99 3.09 (1.35)
- -----------------------------------------------------------------------------------------------------------------
Total operations 2.77 (3.80) (4.88) 2.99 3.08 (1.39)
Distributions from net
investment income -- -- -- -- -- --
Distribution from net
realized capital gain -- (0.58) (0.08) (0.20) -- (0.25)
- -----------------------------------------------------------------------------------------------------------------
Net asset value, end of
period $10.00 $7.23 $11.61 $16.57 $13.78 $10.70
Total Return 38.31% (32.69)% (29.51)% 21.68% 28.79% (11.23)%
Net assets, end of period
(thousands) $115,911 $124,666 $398,242 $1,063,438 $507,477 $397,646
Net ratio of expenses to
average net assets 2.17% 2.83% 2.48% 2.46% 2.54%* 2.46%
Gross ratio of expenses to
average net assets 2.43% 2.83% 2.48% 2.46% 2.54% 2.58%
Net ratio of net investment
income/(loss) to average
net assets (1.17)% (0.80)% 0.01% (0.02)% (0.20)%* (0.27)%
Gross ratio of net
investment income/(loss) to
average net assets (1.43)% (0.80)% 0.01% (0.02)% (0.20)% (0.39)%
Portfolio turnover rate 86% 39% 36% 44% 29% 79%
- -----------------------------------------------------------------------------------------------------------------
</TABLE>

Per share data has been determined by using the average number of shares
outstanding throughout the period.

* ANNUALIZED.

52
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS (continued)

GLOBAL NATURAL RESOURCES FUND

<TABLE>
<CAPTION>
Global Natural Resources Fund
- ---------------------------------------------------------------------------------------------------------------------------------
PERIOD
YEAR YEAR YEAR YEAR 11/15/95
ENDED ENDED ENDED ENDED THROUGH
12/31/99 12/31/98 12/31/97 12/31/96 12/31/95(1)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $7.46 $11.67 $14.29 $10.12 $10.00
Net investment
income/(loss) (0.01) (0.07) (0.05) (0.06) 0.02
Net realized and
unrealized gain/(loss) 1.68 (3.95) (2.39) 4.24 0.10
- ---------------------------------------------------------------------------------------------------------------------------------
Total operations 1.67 (4.02) (2.44) 4.18 0.12
Distributions from net
investment income -- -- -- (0.01) --
Distribution from net
realized capital gain -- (0.19) (0.18) -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of
period $9.13 $7.46 $11.67 $14.29 $10.12
Total Return 22.39% (34.45)% (17.14)% 41.21% 1.20%
Net assets, end of period
(thousands) $22,818 $23,476 $78,371 $120,521 $792
Net ratio of expenses to
average net assets 2.09% 1.95% 1.81% 1.94% 2.60%*
Gross ratio of expenses to
average net assets 2.42% 2.21% 1.82% 2.16% 14.25%
Net ratio of net
investment income/(loss)
to average net assets (1.72)% (0.69)% (0.38)% (0.45)% 1.84%*
Gross ratio of net
investment income/(loss)
to average net assets (2.05)% (0.96)% (0.38)% (0.67)% (9.81)%
Portfolio turnover rate 140% 63% 97% 82% 0%
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

Per share data has been determined by using the average number of shares
outstanding throughout the period.

* ANNUALIZED.

(1) THE GLOBAL NATURAL RESOURCES FUND COMMENCED OPERATIONS ON NOVEMBER 15, 1995.

53
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS (continued)

PARTNERS FUND

<TABLE>
<CAPTION>
Partners Fund
- -------------------------------------------------------------------------------------------------------------------------
PERIOD
YEAR YEAR YEAR YEAR 7/12/95
ENDED ENDED ENDED ENDED THROUGH
12/31/99 12/31/98 12/31/97 12/31/96 12/31/95(1)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.53 $16.49 $14.60 $10.39 $10.00
Net investment income/(loss) (0.04) (0.04) 0.13 0.13 0.06
Net realized and unrealized gain/(loss) 0.47 (4.31) 2.52 4.36 0.33
- -------------------------------------------------------------------------------------------------------------------------
Total operations 0.43 (4.35) 2.65 4.49 0.39
Distribution from net investment income -- (0.38) (0.12) (0.06) --
Distribution from net realized capital gain -- (0.23) (0.64) (0.22) --
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.96 $11.53 $16.49 $14.60 $10.39
Total Return 3.73% (27.38)% 18.08% 43.15% 3.90%
Net assets, end of period (thousands) $22,374 $47,936 $194,133 $127,268 $7,480
Net ratio of expenses to average net assets 2.13% 1.88% 1.78% 1.93% 2.41%*
Gross ratio of expenses to average net assets 2.79% 2.07% 1.78% 2.15% 5.12%
Net ratio of net investment income/(loss) to average net
assets (1.24)% (0.26)% 0.82% 0.95% 1.34%*
Gross ratio of net investment income/(loss) to average
net assets (1.90)% (0.46)% 0.82% 0.73% (1.37)%
Portfolio turnover rate 84% 73% 78% 101% 71%
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>

Per share data has been determined by using the average number of shares
outstanding throughout the period.

* ANNUALIZED.

(1) THE PARTNERS FUND COMMENCED OPERATIONS ON JULY 12, 1995.

54
<PAGE>
This Page Intentionally Left Blank

55
<PAGE>
The Trust's Statement of Additional Information ("SAI") dated May 1, 2000
and annual and semi-annual reports to shareholders contain additional
information about the Funds. The SAI and the financial statements included in
the Trust's most recent annual report to shareholders are incorporated by
reference into this prospectus, which means that they are part of this
prospectus for legal purposes. The Trust's annual report discusses the market
conditions and investment strategies that significantly affected each Fund's
performance during its last fiscal year. You may obtain free copies of these
materials, request other information about the Funds, or make shareholder
inquiries by writing to the Trust at the address below or by telephoning
1-800-766-FUND.

The Trust, RS Investment Management, and Provident Distributors, Inc. have
adopted codes of ethics which, under certain circumstances, permit personnel
subject to those codes to invest in securities that may be purchased or held by
the Funds. The codes of ethics of the Trust, RS Investment Management, and
Provident are filed as an exhibit to the Trust's registration statement. You may
review and copy information about the Trust, including the SAI and the codes of
ethics, at the Securities and Exchange Commissions Public Reference Room in
Washington, D.C. You may call the Commission at 1-202-942-8090 for information
about the operation of the public reference room. The Commission maintains a Web
site at http://www.sec.gov, which contains reports and other information about
the Funds. You may also obtain copies of these materials, including the codes of
ethics, upon payment of a duplicating fee, by electronic request at the
following e-mail address: [email protected], or by writing the Public Reference
Section of the Commission, Washington, D.C. 20549-6009. You may need to refer to
the Trust's file number under the Investment Company Act, which is 811-05159.

ADDRESS CORRESPONDENCE TO:
RS Investment Management
388 Market Street, Suite 200
San Francisco, CA 94111
www.rsim.com

Shareholder Services
1-800-766-FUND

[LOGO]

RS INVESTMENT TRUST

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

PROSPECTUS
----------------

MAY 1, 2000

1-800-766-FUND
WWW.RSIM.COM

507509
Investment Company Act File No. 811-05159

<PAGE>

STATEMENT OF ADDITIONAL INFORMATION
RS INVESTMENT TRUST

GROWTH
RS AGGRESSIVE GROWTH FUND
RS DIVERSIFIED GROWTH FUND
RS EMERGING GROWTH FUND
THE INFORMATION AGE FUND-Registered Trademark-
RS INTERNET AGE FUND-TM-
RS MICROCAP GROWTH FUND
RS MIDCAP OPPORTUNITIES FUND
RS VALUE + GROWTH FUND

VALUE
THE CONTRARIAN FUND-TM-
RS GLOBAL NATURAL RESOURCES FUND
RS PARTNERS FUND

MAY 1, 2000,

This Statement of Additional Information ("SAI" or "Statement") is not a
prospectus and should be read in conjunction with the Prospectus of RS
Investment Trust (the "Trust") dated May 1, 2000, as it may be further revised
from time to time. A copy of a Prospectus of the Trust can be obtained upon
request made to RS Investment Management, 388 Market Street, Suite 200, San
Francisco, California 94111, telephone 1-800-766-FUND.

Certain disclosure has been incorporated by reference into this SAI from
the Funds' annual report. For a free copy of the annual report, please call
1-800-766-FUND.

<TABLE>
<CAPTION>
TABLE OF CONTENTS
CAPTION PAGE
<S> <C>
INVESTMENTS AND RISKS.....................................................B-1
THE FUNDS' INVESTMENT LIMITATIONS........................................B-13
HOW NET ASSET VALUE IS DETERMINED........................................B-34
TAXES....................................................................B-35
HOW PERFORMANCE IS DETERMINED............................................B-37
ADDITIONAL INFORMATION...................................................B-39
APPENDIX A...............................................................B-41
</TABLE>

<PAGE>

TRUST INFORMATION

TRUST HISTORY

RS Investment Trust (formerly, Robertson Stephens Investment Trust) was
organized on May 11, 1987 under the laws of The Commonwealth of
Massachusetts and is a business entity commonly known as a "Massachusetts
business trust." A copy of the Agreement and Declaration of Trust, which is
governed by Massachusetts law, is on file with the Secretary of State of
The Commonwealth of Massachusetts.

FUND CLASSIFICATION

The Trust currently offers shares of beneficial interest of eleven
series (the "Funds") with separate investment objectives and policies. Each
Fund is an open-end, management investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"). Each of the Diversified
Growth Fund, Emerging Growth Fund, Global Natural Resources Fund, MidCap
Opportunities Fund, The Information Age Fund-Registered Trademark-,
MicroCap Growth Fund, RS Internet Age Fund-TM-, Value + Growth Fund and
Aggressive Growth Fund is also a "diversified" investment company under
the 1940 Act. This means that with respect to 75% of a Fund's total assets,
the Fund may not invest in securities of any issuer if, immediately after
such investment, more than 5% of the total assets of the Fund (taken at
current value) would be invested in the securities of that issuer (this
limitation does not apply to investments in U.S. Government securities). A
Fund is not subject to this limitation with respect to the remaining 25% of
its total assets.

CAPITALIZATION

The Trust has an unlimited number of shares of beneficial interest that
may, without shareholder approval, be divided into an unlimited number of
series of such shares, which, in turn, may be divided into an unlimited
number of classes of such shares.

The proceeds received by each Fund for each issue or sale of its
shares, and all income, earnings, profits, and proceeds thereof, subject
only to the rights of creditors, will be specifically allocated to such
Fund, and constitute the underlying assets of that Fund. The underlying
assets of each Fund will be segregated on the Trust's books of account, and
will be charged with the liabilities in respect of such Fund and with a
share of the general liabilities of the Trust. Expenses with respect to any
two or more Funds may be allocated in proportion to the net asset values of
the respective Funds except where allocations of direct expenses can
otherwise be fairly made.

Shareholder of each series will have one vote for each full share owned
and proportionate, fractional votes for fractional shares held. Generally,
shares of each series vote separately as a single series except when
required by law or determined by the Board of Trustees. Although the Trust
is not required to hold annual meetings of its shareholders, shareholders
have the right to call a meeting to elect or remove Trustees or to take
other actions as provided in the Declaration of Trust.

INVESTMENTS AND RISKS

In addition to the principal investment strategies and the principal
risks of the Funds described in the Prospectus, each Fund may employ other
investment practices and may be subject to additional risks which are
described below. Because the following is a combined description of
investment strategies and risks for all the Funds, certain strategies
and/or risks described below may not apply to your Fund. Unless a strategy
or policy described below is specifically prohibited by the investment
restrictions listed in the Prospectus, under "The Funds' Investment
Limitations" in this SAI, or by applicable law, a Fund may engage in each
of the practices described below.

RS Investment Management, L.P. ("RSIM, L.P.") serves as investment
adviser to all of the Funds, except for the Emerging Growth Fund. The
Emerging Growth Fund is managed by RS Investment Management, Inc. ("RSIM,
Inc."). RSIM, L.P. and RSIM, Inc. are sometimes referred to in this
Statement collectively as "RS Investment Management." Elijah Asset
Management, LLC ("Elijah Asset Management") serves as sub-adviser to The
Information Age Fund-Registered Trademark- and the Value + Growth Fund.
Eastbourne Management, L.L.C. ("Eastbourne") serves as sub-adviser in
respect of a portion of the assets of The Contrarian Fund.-TM- (Each of
Elijah Asset Management and Eastbourne is sometimes referred to in this
Statement as a "Sub-Adviser".) Each

B1
<PAGE>

of RS Investment Management, Elijah Asset Management, and Eastbourne is
sometimes referred to in this Statement as an "Adviser".

LOWER-RATED DEBT SECURITIES

Certain of the Funds may purchase lower-rated debt securities,
sometimes referred to as "junk bonds" (those rated BB or lower by Standard
& Poor's ("S&P") or Ba or lower by Moody's Investor Service, Inc.
("Moody's")). See APPENDIX A for a description of these ratings. None of
the Funds intends, under current circumstances, to purchase such securities
if, as a result, more than 35% of the Fund's assets would be invested in
securities rated below BB or Ba.

The lower ratings of certain securities held by a Fund reflect a
greater possibility that adverse changes in the financial condition of the
issuer, or in general economic conditions, or both, or an unanticipated
rise in interest rates, may impair the ability of the issuer to make
payments of interest and principal. The inability (or perceived inability)
of issuers to make timely payment of interest and principal would likely
make the values of securities held by the Fund more volatile and could
limit the Fund's ability to sell its securities at prices approximating the
values a Fund had placed on such securities. It is possible that
legislation may be adopted in the future limiting the ability of certain
financial institutions to purchase lower rated securities; such legislation
may adversely affect the liquidity of such securities. In the absence of a
liquid trading market for securities held by it, the Fund may be unable at
times to establish the fair market value of such securities. The rating
assigned to a security by Moody's or S&P does not reflect an assessment of
the volatility of the security's market value or of the liquidity of an
investment in the security.

Like those of other fixed-income securities, the values of lower-rated
securities fluctuate in response to changes in interest rates. Thus, a
decrease in interest rates generally will result in an increase in the
value of a Fund's fixed-income securities. Conversely, during periods of
rising interest rates, the value of a Fund's fixed-income securities
generally will decline. In addition, the values of such securities are also
affected by changes in general economic conditions and business conditions
affecting the specific industries of their issuers. Changes by recognized
rating services in their ratings of any fixed-income security and in the
ability of an issuer to make payments of interest and principal may also
affect the value of these investments. Changes in the value of portfolio
securities generally will not affect cash income derived from such
securities, but will affect the Fund's net asset value. A Fund will not
necessarily dispose of a security when its rating is reduced below its
rating at the time of purchase, although the Fund's Adviser will monitor
the investment to determine whether continued investment in the security
will assist in meeting the Fund's investment objective.

Issuers of lower-rated securities are often highly leveraged, so that
their ability to service their debt obligations during an economic downturn
or during sustained periods of rising interest rates may be impaired. In
addition, such issuers may not have more traditional methods of financing
available to them, and may be unable to repay debt at maturity by
refinancing. The risk of loss due to default in payment of interest or
principal by such issuers is significantly greater because such securities
frequently are unsecured and subordinated to the prior payment of senior
indebtedness. Certain of the lower-rated securities in which the Funds may
invest are issued to raise funds in connection with the acquisition of a
company, in so-called "leveraged buy-out" transactions. The highly
leveraged capital structure of such issuers may make them especially
vulnerable to adverse changes in economic conditions.

Under adverse market or economic conditions or in the event of adverse
changes in the financial condition of the issuer, a Fund could find it more
difficult to sell lower-rated securities when an Adviser believes it
advisable to do so or may be able to sell such securities only at prices
lower than if such securities were more widely held. In many cases, such
securities may be purchased in private placements and, accordingly, will be
subject to restrictions on resale as a matter of contract or under
securities laws. Under such circumstances, it may also be more difficult to
determine the fair value of such securities for purposes of computing a
Fund's net asset value. In order to enforce its rights in the event of a
default under such securities, a Fund may be required to take possession of
and manage assets securing the issuer's obligations on such securities,
which may increase the Fund's operating expenses and adversely affect the
Fund's net asset value. A Fund may also be limited in its ability to
enforce its rights and may incur greater costs in enforcing its rights in
the event an issuer becomes the subject of bankruptcy proceedings.

Certain securities held by a Fund may permit the issuer at its option
to "call," or redeem, its securities. If an issuer were to redeem
securities held by a Fund during a time of declining interest rates, the
Fund may not be able to reinvest the proceeds in securities providing the
same investment return as the securities redeemed.

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OPTIONS

The Funds may purchase and sell put and call options on their
portfolio securities to enhance investment performance and to protect
against changes in market prices. There is no assurance that a Fund's use
of put and call options will achieve its desired objective, and a Fund's
use of options may result in losses to the Fund.

COVERED CALL OPTIONS. A Fund may write covered call options on its
securities to realize a greater current return through the receipt of
premiums than it would realize on its securities alone. Such option
transactions may also be used as a limited form of hedging against a
decline in the price of securities owned by the Fund.

A call option gives the holder the right to purchase, and obligates
the writer to sell, a security at the exercise price at any time before the
expiration date. A call option is "covered" if the writer, at all times
while obligated as a writer, either owns the underlying securities (or
comparable securities satisfying the cover requirements of the securities
exchanges), or has the right to acquire such securities through immediate
conversion of securities.

In return for the premium received when it writes a covered call
option, a Fund gives up some or all of the opportunity to profit from an
increase in the market price of the securities covering the call option
during the life of the option. The Fund retains the risk of loss should the
price of such securities decline. If the option expires unexercised, the
Fund realizes a gain equal to the premium, which may be offset by a decline
in price of the underlying security. If the option is exercised, the Fund
realizes a gain or loss equal to the difference between the Fund's cost for
the underlying security and the proceeds of sale (exercise price minus
commissions) plus the amount of the premium.

A Fund may terminate a call option that it has written before it
expires by entering into a closing purchase transaction. A Fund may enter
into closing purchase transactions in order to free itself to sell the
underlying security or to write another call on the security, realize a
profit on a previously written call option, or protect a security from
being called in an unexpected market rise. Any profits from a closing
purchase transaction may be offset by a decline in the value of the
underlying security. Conversely, because increases in the market price of a
call option will generally reflect increases in the market price of the
underlying security, any loss resulting from a closing purchase transaction
is likely to be offset in whole or in part by unrealized appreciation of
the underlying security owned by the Fund.

COVERED PUT OPTIONS. A Fund may write covered put options in order to
enhance its current return. Such options transactions may also be used as a
limited form of hedging against an increase in the price of securities that
the Fund plans to purchase. A put option gives the holder the right to
sell, and obligates the writer to buy, a security at the exercise price at
any time before the expiration date. A put option is "covered" if the
writer segregates cash and high-grade short-term debt obligations or other
permissible collateral equal to the price to be paid if the option is
exercised.

In addition to the receipt of premiums and the potential gains from
terminating such options in closing purchase transactions, a Fund also
receives interest on the cash and debt securities maintained to cover the
exercise price of the option. By writing a put option, the Fund assumes the
risk that it may be required to purchase the underlying security for an
exercise price higher than its then current market value, resulting in a
potential capital loss unless the security later appreciates in value.

A Fund may terminate a put option that it has written before it
expires by a closing purchase transaction. Any loss from this transaction
may be partially or entirely offset by the premium received on the
terminated option.

PURCHASING PUT AND CALL OPTIONS. A Fund may also purchase put options
to protect portfolio holdings against a decline in market value. This
protection lasts for the life of the put option because the Fund, as a
holder of the option, may sell the underlying security at the exercise
price regardless of any decline in its market price. In order for a put
option to be profitable, the market price of the underlying security must
decline sufficiently below the exercise price to cover the premium and
transaction costs that the Fund must pay. These costs will reduce any
profit the Fund might have realized had it sold the underlying security
instead of buying the put option.

A Fund may purchase call options to hedge against an increase in the
price of securities that the Fund wants ultimately to buy. Such hedge
protection is provided during the life of the call option since the Fund,
as holder of the call option, is able to buy the underlying security at the
exercise price regardless of any increase in the underlying security's
market price. In order for a call

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option to be profitable, the market price of the underlying security must
rise sufficiently above the exercise price to cover the premium and
transaction costs. These costs will reduce any profit the Fund might have
realized had it bought the underlying security at the time it purchased the
call option.

A Fund may also purchase put and call options to attempt to enhance
its current return.

OPTIONS ON FOREIGN SECURITIES. A Fund may purchase and sell options on
foreign securities if its Adviser believes that the investment
characteristics of such options, including the risks of investing in such
options, are consistent with the Fund's investment objective. It is
expected that risks related to such options will not differ materially from
risks related to options on U.S. securities. However, position limits and
other rules of foreign exchanges may differ from those in the U.S. In
addition, options markets in some countries, many of which are relatively
new, may be less liquid than comparable markets in the U.S.

RISKS INVOLVED IN THE SALE OF OPTIONS. Options transactions involve
certain risks, including the risks that an Adviser will not forecast
interest rate or market movements correctly, that a Fund may be unable at
times to close out such positions, or that hedging transactions may not
accomplish their purpose because of imperfect market correlations. The
successful use of these strategies depends on the ability of an Adviser to
forecast market and interest rate movements correctly.

An exchange-listed option may be closed out only on an exchange which
provides a secondary market for an option of the same series. There is no
assurance that a liquid secondary market on an exchange will exist for any
particular option or at any particular time. If no secondary market were to
exist, it would be impossible to enter into a closing transaction to close
out an option position. As a result, a Fund may be forced to continue to
hold, or to purchase at a fixed price, a security on which it has sold an
option at a time when an Adviser believes it is inadvisable to do so.

Higher than anticipated trading activity or order flow or other
unforeseen events might cause The Options Clearing Corporation or an
exchange to institute special trading procedures or restrictions that might
restrict a Fund's use of options. The exchanges have established
limitations on the maximum number of calls and puts of each class that may
be held or written by an investor or group of investors acting in concert.
It is possible that the Trust and other clients of an Adviser may be
considered such a group. These position limits may restrict the Funds'
ability to purchase or sell options on particular securities.

Options which are not traded on national securities exchanges may be
closed out only with the other party to the option transaction. For that
reason, it may be more difficult to close out unlisted options than listed
options. Furthermore, unlisted options are not subject to the protection
afforded purchasers of listed options by The Options Clearing Corporation.

Government regulations may also restrict the Funds' use of options.

SPECIAL EXPIRATION PRICE OPTIONS

Certain of the Funds may purchase over-the-counter ("OTC") puts and
calls with respect to specified securities ("special expiration price
options") pursuant to which the Funds in effect may create a custom index
relating to a particular industry or sector that an Adviser believes will
increase or decrease in value generally as a group. In exchange for a
premium, the counterparty, whose performance is guaranteed by a
broker-dealer, agrees to purchase (or sell) a specified number of shares of
a particular stock at a specified price and further agrees to cancel the
option at a specified price that decreases straight line over the term of
the option. Thus, the value of the special expiration price option is
comprised of the market value of the applicable underlying security
relative to the option exercise price and the value of the remaining
premium. However, if the value of the underlying security increases (or
decreases) by a prenegotiated amount, the special expiration price option
is canceled and becomes worthless. A portion of the dividends during the
term of the option are applied to reduce the exercise price if the options
are exercised. Brokerage commissions and other transaction costs will
reduce these Funds' profits if the special expiration price options are
exercised. A Fund will not purchase special expiration price options with
respect to more than 25% of the value of its net assets, and will limit
premiums paid for such options in accordance with state securities laws.

LEAPS AND BOUNDS

The Value + Growth Fund may purchase certain long-term exchange-traded
equity options called Long-Term Equity Anticipation Securities ("LEAPs")
and Buy-Right Options Unitary Derivatives ("BOUNDs"). LEAPs provide a
holder the

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<PAGE>

opportunity to participate in the underlying securities' appreciation in
excess of a fixed dollar amount. BOUNDs provide a holder the opportunity to
retain dividends on the underlying security while potentially participating
in the underlying securities' capital appreciation up to a fixed dollar
amount. The Value + Growth Fund will not purchase these options with
respect to more than 25% of the value of its net assets.

LEAPs are long-term call options that allow holders the opportunity to
participate in the underlying securities' appreciation in excess of a
specified strike price, without receiving payments equivalent to any cash
dividends declared on the underlying securities. A LEAP holder will be
entitled to receive a specified number of shares of the underlying stock
upon payment of the exercise price, and therefore the LEAP will be
exercisable at any time the price of the underlying stock is above the
strike price. However, if at expiration the price of the underlying stock
is at or below the strike price, the LEAP will expire worthless.

BOUNDs are long-term options which are expected to have the same
economic characteristics as covered call options, with the added benefits
that BOUNDs can be traded in a single transaction and are not subject to
early exercise. Covered call writing is a strategy by which an investor
sells a call option while simultaneously owning the number of shares of the
stock underlying the call. BOUND holders are able to participate in a
stock's price appreciation up to but not exceeding a specified strike price
while receiving payments equivalent to any cash dividends declared on the
underlying stock. At expiration, a BOUND holder will receive a specified
number of shares of the underlying stock for each BOUND held if, on the
last day of trading, the underlying stock closes at or below the strike
price. However, if at expiration the underlying stock closes above the
strike price, the BOUND holder will receive a payment equal to a multiple
of the BOUND's strike price for each BOUND held. The terms of a BOUND are
not adjusted because of cash distributions to the shareholders of the
underlying security. BOUNDs are subject to the position limits for equity
options imposed by the exchanges on which they are traded.

The settlement mechanism for BOUNDs operates in conjunction with that
of the corresponding LEAPs. For example, if at expiration the underlying
stock closes at or below the strike price, the LEAP will expire worthless,
and the holder of a corresponding BOUND will receive a specified number of
shares of stock from the writer of the BOUND. If, on the other hand, the
LEAP is "in the money" at expiration, the holder of the LEAP is entitled to
receive a specified number of shares of the underlying stock from the LEAP
writer upon payment of the strike price, and the holder of a BOUND on such
stock is entitled to the cash equivalent of a multiple of the strike price
from the writer of the BOUND. An investor holding both a LEAP and a
corresponding BOUND, where the underlying stock closes above the strike
price at expiration, would be entitled to receive a multiple of the strike
price from the writer of the BOUND and, upon exercise of the LEAP, would be
obligated to pay the same amount to receive shares of the underlying stock.
LEAPs are American-style options (exercisable at any time prior to
expiration), whereas BOUNDs are European-style options (exercisable only on
the expiration date).

FUTURES CONTRACTS

INDEX FUTURES CONTRACTS AND OPTIONS. A Fund may buy and sell stock
index futures contracts and related options for hedging purposes or to
attempt to increase investment return. A stock index futures contract is a
contract to buy or sell units of a stock index at a specified future date
at a price agreed upon when the contract is made. A unit is the current
value of the stock index.

The following example illustrates generally the manner in which index
futures contracts operate. The Standard & Poor's 100 Stock Index (the "S&P
100 Index") is composed of 100 selected common stocks, most of which are
listed on the New York Stock Exchange. The S&P 100 Index assigns relative
weightings to the common stocks included in the Index, and the Index
fluctuates with changes in the market values of those common stocks. In the
case of the S&P 100 Index, contracts are to buy or sell 100 units. Thus, if
the value of the S&P 100 Index were $180, one contract would be worth
$18,000 (100 units x $180). The stock index futures contract specifies that
no delivery of the actual stocks making up the index will take place.
Instead, settlement in cash must occur upon the termination of the
contract, with the settlement being the difference between the contract
price and the actual level of the stock index at the expiration of the
contract. For example, if a Fund enters into a futures contract to buy 100
units of the S&P 100 Index at a specified future date at a contract price
of $180 and the S&P 100 Index is at $184 on that future date, the Fund will
gain $400 (100 units x gain of $4). If the Fund enters into a futures
contract to sell 100 units of the stock index at a specified future date at
a contract price of $180 and the S&P 100 Index is at $182 on that future
date, the Fund will lose $200 (100 units x loss of $2).

Positions in index futures may be closed out only on an exchange or
board of trade which provides a secondary market for such futures.

B-5
<PAGE>

In order to hedge its investments successfully using futures contracts
and related options, a Fund must invest in futures contracts with respect
to indexes or sub-indexes the movements of which will, in its judgment,
have a significant correlation with movements in the prices of the Fund's
securities.

Options on index futures contracts give the purchaser the right, in
return for the premium paid, to assume a position in an index futures
contract (a long position if the option is a call and a short position if
the option is a put) at a specified exercise price at any time during the
period of the option. Upon exercise of the option, the holder would assume
the underlying futures position and would receive a variation margin
payment of cash or securities approximating the increase in the value of
the holder's option position. If an option is exercised on the last trading
day prior to the expiration date of the option, the settlement will be made
entirely in cash based on the difference between the exercise price of the
option and the closing level of the index on which the futures contract is
based on the expiration date. Purchasers of options who fail to exercise
their options prior to the exercise date suffer a loss of the premium paid.

As an alternative to purchasing and selling call and put options on
index futures contracts, each of the Funds which may purchase and sell
index futures contracts may purchase and sell call and put options on the
underlying indexes themselves to the extent that such options are traded on
national securities exchanges. Index options are similar to options on
individual securities in that the purchaser of an index option acquires the
right to buy (in the case of a call) or sell (in the case of a put), and
the writer undertakes the obligation to sell or buy (as the case may be),
units of an index at a stated exercise price during the term of the option.
Instead of giving the right to take or make actual delivery of securities,
the holder of an index option has the right to receive a cash "exercise
settlement amount." This amount is equal to the amount by which the fixed
exercise price of the option exceeds (in the case of a put) or is less than
(in the case of a call) the closing value of the underlying index on the
date of the exercise, multiplied by a fixed "index multiplier."

A Fund may purchase or sell options on stock indices in order to close
out its outstanding positions in options on stock indices which it has
purchased. A Fund may also allow such options to expire unexercised.

Compared to the purchase or sale of futures contracts, the purchase of
call or put options on an index involves less potential risk to a Fund
because the maximum amount at risk is the premium paid for the options plus
transactions costs. The writing of a put or call option on an index
involves risks similar to those risks relating to the purchase or sale of
index futures contracts.

MARGIN PAYMENTS. When a Fund purchases or sells a futures contract, it
is required to deposit with its custodian an amount of cash, U.S. Treasury
bills, or other permissible collateral equal to a small percentage of the
amount of the futures contract. This amount is known as "initial margin."
The nature of initial margin is different from that of margin in security
transactions in that it does not involve borrowing money to finance
transactions. Rather, initial margin is similar to a performance bond or
good faith deposit that is returned to a Fund upon termination of the
contract, assuming the Fund satisfies its contractual obligations.

Subsequent payments to and from the broker occur on a daily basis in a
process known as "marking to market." These payments are called "variation
margin" and are made as the value of the underlying futures contract
fluctuates. For example, when a Fund sells a futures contract and the price
of the underlying index rises above the delivery price, the Fund's position
declines in value. The Fund then pays the broker a variation margin payment
equal to the difference between the delivery price of the futures contract
and the value of the index underlying the futures contract. Conversely, if
the price of the underlying index falls below the delivery price of the
contract, the Fund's futures position increases in value. The broker then
must make a variation margin payment equal to the difference between the
delivery price of the futures contract and the value of the index
underlying the futures contract.

When a Fund terminates a position in a futures contract, a final
determination of variation margin is made, additional cash is paid by or to
the Fund, and the Fund realizes a loss or a gain. Such closing transactions
involve additional commission costs.

SPECIAL RISKS OF TRANSACTIONS IN FUTURES CONTRACTS AND RELATED OPTIONS

LIQUIDITY RISKS. Positions in futures contracts may be closed out only
on an exchange or board of trade which provides a secondary market for such
futures. Although the Funds intend to purchase or sell futures only on
exchanges or boards of trade where there appears to be an active secondary
market, there is no assurance that a liquid secondary market on an exchange
or board of trade will exist for any particular contract or at any
particular time. If there is not a liquid secondary market at a particular
time, it may not be possible to close a futures position at such time and,
in the event of adverse price movements, a Fund would continue

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<PAGE>

to be required to make daily cash payments of variation margin. However, in
the event financial futures are used to hedge portfolio securities, such
securities will not generally be sold until the financial futures can be
terminated. In such circumstances, an increase in the price of the
portfolio securities, if any, may partially or completely offset losses on
the financial futures.

The ability to establish and close out positions in options on futures
contracts will be subject to the development and maintenance of a liquid
secondary market. It is not certain that such a market will develop.
Although a Fund generally will purchase only those options for which there
appears to be an active secondary market, there is no assurance that a
liquid secondary market on an exchange will exist for any particular option
or at any particular time. In the event no such market exists for
particular options, it might not be possible to effect closing transactions
in such options, with the result that a Fund would have to exercise the
options in order to realize any profit.

HEDGING RISKS. There are several risks in connection with the use by a
Fund of futures contracts and related options as a hedging device. One risk
arises because of the imperfect correlation between movements in the prices
of the futures contracts and options and movements in the underlying
securities or index or movements in the prices of a Fund's securities which
are the subject of a hedge. An Adviser will, however, attempt to reduce
this risk by purchasing and selling, to the extent possible, futures
contracts and related options on securities and indexes the movements of
which will, in its judgment, correlate closely with movements in the prices
of the underlying securities or index and the Fund's portfolio securities
sought to be hedged.

Successful use of futures contracts and options by a Fund for hedging
purposes is also subject to an Adviser's ability to predict correctly
movements in the direction of the market. It is possible that, where a Fund
has purchased puts on futures contracts to hedge its portfolio against a
decline in the market, the securities or index on which the puts are
purchased may increase in value and the value of securities held in the
portfolio may decline. If this occurred, the Fund would lose money on the
puts and also experience a decline in value in its portfolio securities. In
addition, the prices of futures, for a number of reasons, may not correlate
perfectly with movements in the underlying securities or index due to
certain market distortions. First, all participants in the futures market
are subject to margin deposit requirements. Such requirements may cause
investors to close futures contracts through offsetting transactions which
could distort the normal relationship between the underlying security or
index and futures markets. Second, the margin requirements in the futures
markets are less onerous than margin requirements in the securities markets
in general, and as a result the futures markets may attract more
speculators than the securities markets do. Increased participation by
speculators in the futures markets may also cause temporary price
distortions. Due to the possibility of price distortion, even a correct
forecast of general market trends by an Adviser still may not result in a
successful hedging transaction over a very short time period.

OTHER RISKS. Funds will incur brokerage fees in connection with their
futures and options transactions. In addition, while futures contracts and
options on futures will be purchased and sold to reduce certain risks,
those transactions themselves entail certain other risks. Thus, while a
Fund may benefit from the use of futures and related options, unanticipated
changes in interest rates or stock price movements may result in a poorer
overall performance for the Fund than if it had not entered into any
futures contracts or options transactions. Moreover, in the event of an
imperfect correlation between the futures position and the portfolio
position which is intended to be protected, the desired protection may not
be obtained and the Fund may be exposed to risk of loss.

INDEXED SECURITIES

Certain of the Funds may purchase securities whose prices are indexed
to the prices of other securities, securities indices, currencies, precious
metals, or other commodities, or other financial indicators. Indexed
securities typically, but not always, are debt securities or deposits whose
value at maturity or coupon rate is determined by reference to a specific
instrument or statistic. Gold-indexed securities, for example, typically
provide for a maturity value that depends on the price of gold, resulting
in a security whose price tends to rise and fall together with gold prices.
Currency-indexed securities typically are short-term to intermediate-term
debt securities whose maturity values or interest rates are determined by
reference to the values of one or more specified foreign currencies, and
may offer higher yields than U.S. dollar-denominated securities of
equivalent issuers. Currency-indexed securities may be positively or
negatively indexed; that is, their maturity value may increase when the
specified currency value increases, resulting in a security whose price
characteristics are similar to a put option on the underlying currency.
Currency-indexed securities also may have prices that depend on the values
of a number of different foreign currencies relative to each other.

The performance of indexed securities depends to a great extent on the
performance of the security, currency, commodity or other instrument to
which they are indexed, and also may be influenced by interest rate changes
in the U.S. and abroad. At the same

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time, indexed securities are subject to the credit risks associated with
the issuer of the security, and their values may decline substantially if
the issuer's creditworthiness deteriorates. Recent issuers of indexed
securities have included banks, corporations, and certain U.S. Government
agencies.

REPURCHASE AGREEMENTS

A Fund may enter into repurchase agreements. A repurchase agreement is
a contract under which the Fund acquires a security for a relatively short
period (usually not more than one week) subject to the obligation of the
seller to repurchase and the Fund to resell such security at a fixed time
and price (representing the Fund's cost plus interest). It is the Trust's
present intention to enter into repurchase agreements only with member
banks of the Federal Reserve System and securities dealers meeting certain
criteria as to creditworthiness and financial condition established by the
Trustees of the Trust and only with respect to obligations of the U.S.
Government or its agencies or instrumentalities or other high-quality,
short-term debt obligations. Repurchase agreements may also be viewed as
loans made by a Fund which are collateralized by the securities subject to
repurchase. An Adviser will monitor such transactions to ensure that the
value of the underlying securities will be at least equal at all times to
the total amount of the repurchase obligation, including the interest
factor. If the seller defaults, a Fund could realize a loss on the sale of
the underlying security to the extent that the proceeds of sale including
accrued interest are less than the resale price provided in the agreement
including interest. In addition, if the seller should be involved in
bankruptcy or insolvency proceedings, a Fund may incur delay and costs in
selling the underlying security or may suffer a loss of principal and
interest if the Fund is treated as an unsecured creditor and required to
return the underlying collateral to the seller's estate.

LEVERAGE

Leveraging a Fund creates an opportunity for increased net income but,
at the same time, creates special risk considerations. For example,
leveraging may exaggerate changes in the net asset value of a Fund's shares
and in the yield on a Fund's portfolio. Although the principal of such
borrowings will be fixed, a Fund's assets may change in value during the
time the borrowing is outstanding. Since any decline in value of a Fund's
investments will be borne entirely by the Fund's shareholders (and not by
those persons providing the leverage to the Fund), the effect of leverage
in a declining market would be a greater decrease in net asset value than
if the Fund were not so leveraged. Leveraging will create interest expenses
for a Fund, which can exceed the investment return from the borrowed funds.
To the extent the investment return derived from securities purchased with
borrowed funds exceeds the interest a Fund will have to pay, the Fund's
investment return will be greater than if leveraging were not used.
Conversely, if the investment return from the assets retained with borrowed
funds is not sufficient to cover the cost of leveraging, the investment
return of the Fund will be less than if leveraging were not used.

REVERSE REPURCHASE AGREEMENTS

In connection with its leveraging activities, a Fund may enter into
reverse repurchase agreements, in which the Fund sells securities and
agrees to repurchase them at a mutually agreed date and price. A reverse
repurchase agreement may be viewed as a borrowing by the Fund, secured by
the security which is the subject of the agreement. In addition to the
general risks involved in leveraging, reverse repurchase agreements involve
the risk that, in the event of the bankruptcy or insolvency of the Fund's
counterparty, the Fund would be unable to recover the security which is the
subject of the agreement, that the amount of cash or other property
transferred by the counterparty to the Fund under the agreement prior to
such insolvency or bankruptcy is less than the value of the security
subject to the agreement, or that the Fund may be delayed or prevented, due
to such insolvency or bankruptcy, from using such cash or property or may
be required to return it to the counterparty or its trustee or receiver.

SECURITIES LENDING

A Fund may lend its portfolio securities, provided: (1) the loan is
secured continuously by collateral consisting of U.S. Government
securities, cash, or cash equivalents adjusted daily to have market value
at least equal to the current market value of the securities loaned; (2)
the Fund may at any time call the loan and regain the securities loaned;
(3) a Fund will receive any interest or dividends paid on the loaned
securities; and (4) the aggregate market value of securities of any Fund
loaned will not at any time exceed one-third (or such other limit as the
Trustees may establish) of the total assets of the Fund. In addition, it is
anticipated that a Fund may share with the borrower some of the income
received on the collateral for the loan or that it will be paid a premium
for the loan.

B-8
<PAGE>

Before a Fund enters into a loan, an Adviser considers all relevant
facts and circumstances, including the creditworthiness of the borrower.
The risks in lending portfolio securities, as with other extensions of
credit, consist of possible delay in recovery of the securities or possible
loss of rights in the collateral should the borrower fail financially.
Although voting rights or rights to consent with respect to the loaned
securities pass to the borrower, a Fund retains the right to call the loans
at any time on reasonable notice, and it will do so in order that the
securities may be voted by a Fund if the holders of such securities are
asked to vote upon or consent to matters materially affecting the
investment. A Fund will not lend portfolio securities to borrowers
affiliated with the Fund.

SHORT SALES

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

A Fund will incur a loss as a result of the short sale if the price of
the security increases between the date of the short sale and the date on
which a Fund replaces the borrowed security. A Fund will realize a gain if
the security declines in price between those dates. The amount of any gain
will be decreased, and the amount of any loss increased, by the amount of
the premium, dividends, interest or expenses a Fund may be required to pay
in connection with a short sale. An increase in the value of a security
sold short by a Fund over the price at which it was sold short will result
in a loss to the Fund, and there can be no assurance that a Fund will be
able to close out the position at any particular time or at an acceptable
price.

FOREIGN INVESTMENTS

Investments in foreign securities may involve considerations different
from investments in domestic securities due to limited publicly available
information, non-uniform accounting standards, lower trading volume and
possible consequent illiquidity, greater volatility in price, the possible
imposition of withholding or confiscatory taxes, the possible adoption of
foreign governmental restrictions affecting the payment of principal and
interest, expropriation of assets, nationalization, or other adverse
political or economic developments. Foreign companies may not be subject to
auditing and financial reporting standards and requirements comparable to
those which apply to U.S. companies. Foreign brokerage commissions and
other fees are generally higher than in the United States. It may be more
difficult to obtain and enforce a judgment against a foreign issuer.

In addition, to the extent that a Fund's foreign investments are not
U.S. dollar-denominated, the Fund may be affected favorably or unfavorably
by changes in currency exchange rates or exchange control regulations and
may incur costs in connection with conversion between currencies.

DEVELOPING COUNTRIES. The considerations noted above for foreign
investments generally are intensified for investments in developing
countries. These risks include (i) volatile social, political and economic
conditions; (ii) the small current size of the markets for such securities
and the currently low or nonexistent volume of trading, which result in a
lack of liquidity and in greater price volatility; (iii) the existence of
national policies which may restrict a Fund's investment opportunities,
including restrictions on investment in issuers or industries deemed
sensitive to national interests; (iv) foreign taxation; (v) the absence of
developed structures governing private or foreign investment or allowing
for judicial redress for injury to private property; (vi) the absence,
until recently in certain developing countries, of a capital market
structure or market-oriented economy; (vii) economies based on only a few
industries; and (viii) the possibility that recent favorable economic
developments in certain developing countries may be slowed or reversed by
unanticipated political or social events in such countries.

FOREIGN CURRENCY TRANSACTIONS

B-9
<PAGE>

A Fund may engage in currency exchange transactions to protect against
uncertainty in the level of future foreign currency exchange rates and to
increase current return. A Fund may engage in both "transaction hedging"
and "position hedging."

There can be no assurance that appropriate foreign currency
transactions will be available for a Fund at any time; or that a Fund will
enter into such transactions at any time or under any circumstances even if
appropriate transactions are available to it.

When it engages in transaction hedging, a Fund enters into foreign
currency transactions with respect to specific receivables or payables of
the Fund generally arising in connection with the purchase or sale of its
portfolio securities. A Fund will engage in transaction hedging when it
desires to "lock in" the U.S. dollar price of a security it has agreed to
purchase or sell, or the U.S. dollar equivalent of a dividend or interest
payment in a foreign currency. By transaction hedging, a Fund will attempt
to protect against a possible loss resulting from an adverse change in the
relationship between the U.S. dollar and the applicable foreign currency
during the period between the date on which the security is purchased or
sold or on which the dividend or interest payment is declared, and the date
on which such payments are made or received.

A Fund may purchase or sell a foreign currency on a spot (I.E., cash)
basis at the prevailing spot rate in connection with transaction hedging. A
Fund may also enter into contracts to purchase or sell foreign currencies
at a future date ("forward contracts") and purchase and sell foreign
currency futures contracts.

For transaction hedging purposes, a Fund may also purchase
exchange-listed and over-the-counter call and put options on foreign
currency futures contracts and on foreign currencies. A put option on a
futures contract gives a Fund the right to assume a short position in the
futures contract until expiration of the option. A put option on currency
gives a Fund the right to sell a currency at a specified exercise price
until the expiration of the option. A call option on a futures contract
gives a Fund the right to assume a long position in the futures contract
until the expiration of the option. A call option on currency gives a Fund
the right to purchase a currency at the exercise price until the expiration
of the option. A Fund will engage in over-the-counter transactions only
when appropriate exchange-traded transactions are unavailable and when, in
the opinion of an Adviser, the pricing mechanism and liquidity are
satisfactory and the participants are responsible parties likely to meet
their contractual obligations.

When it engages in position hedging, a Fund enters into foreign
currency exchange transactions to protect against a decline in the values
of the foreign currencies in which securities held by the Fund are
denominated or are quoted in their principle trading markets or an increase
in the value of currency for securities which the Fund expects to purchase.
In connection with position hedging, a Fund may purchase put or call
options on foreign currency and foreign currency futures contracts and buy
or sell forward contracts and foreign currency futures contracts. A Fund
may also purchase or sell foreign currency on a spot basis.

The precise matching of the amounts of foreign currency exchange
transactions and the value of the portfolio securities involved will not
generally be possible since the future value of such securities in foreign
currencies will change as a consequence of market movements in the values
of those securities between the dates the currency exchange transactions
are entered into and the dates they mature.

It is impossible to forecast with precision the market value of a
Fund's portfolio securities at the expiration or maturity of a forward or
futures contract. Accordingly, it may be necessary for a Fund to purchase
additional foreign currency on the spot market (and bear the expense of
such purchase) if the market value of the security or securities being
hedged is less than the amount of foreign currency a Fund is obligated to
deliver and if a decision is made to sell the security or securities and
make delivery of the foreign currency. Conversely, it may be necessary to
sell on the spot market some of the foreign currency received upon the sale
of the portfolio security or securities of a Fund if the market value of
such security or securities exceeds the amount of foreign currency the Fund
is obligated to deliver.

To offset some of the costs to a Fund of hedging against fluctuations
in currency exchange rates, the Fund may write covered call options on
those currencies.

Transaction and position hedging do not eliminate fluctuations in the
underlying prices of the securities which a Fund owns or intends to
purchase or sell. They simply establish a rate of exchange which one can
achieve at some future point in time. Additionally, although these
techniques tend to minimize the risk of loss due to a decline in the value
of the hedged currency, they tend to limit any potential gain which might
result from the increase in the value of such currency.

B-10
<PAGE>

A Fund may also seek to increase its current return by purchasing and
selling foreign currency on a spot basis, by purchasing and selling options
on foreign currencies and on foreign currency futures contracts, and by
purchasing and selling foreign currency forward contracts.

CURRENCY FORWARD AND FUTURES CONTRACTS. A forward foreign currency
exchange contract involves an obligation to purchase or sell a specific
currency at a future date, which may be any fixed number of days from the
date of the contract as agreed by the parties, at a price set at the time
of the contract. In the case of a cancelable forward contract, the holder
has the unilateral right to cancel the contract at maturity by paying a
specified fee. The contracts are traded in the interbank market conducted
directly between currency traders (usually large commercial banks) and
their customers. A forward contract generally has no deposit requirement,
and no commissions are charged at any stage for trades. A foreign currency
futures contract is a standardized contract for the future delivery of a
specified amount of a foreign currency at a future date at a price set at
the time of the contract. Foreign currency futures contracts traded in the
United States are designed by and traded on exchanges regulated by the
Commodity Futures Trading Commission (the "CFTC"), such as the New York
Mercantile Exchange.

Forward foreign currency exchange contracts differ from foreign
currency futures contracts in certain respects. For example, the maturity
date of a forward contract may be any fixed number of days from the date of
the contract agreed upon by the parties, rather than a predetermined date
in a given month. Forward contracts may be in any amounts agreed upon by
the parties rather than predetermined amounts. Also, forward foreign
exchange contracts are traded directly between currency traders so that no
intermediary is required. A forward contract generally requires no margin
or other deposit.

At the maturity of a forward or futures contract, a Fund may either
accept or make delivery of the currency specified in the contract, or at or
prior to maturity enter into a closing transaction involving the purchase
or sale of an offsetting contract. Closing transactions with respect to
forward contracts are usually effected with the currency trader who is a
party to the original forward contract. Closing transactions with respect
to futures contracts are effected on a commodities exchange; a clearing
corporation associated with the exchange assumes responsibility for closing
out such contracts.

Positions in foreign currency futures contracts and related options
may be closed out only on an exchange or board of trade which provides a
secondary market in such contracts or options. Although a Fund will
normally purchase or sell foreign currency futures contracts and related
options only on exchanges or boards of trade where there appears to be an
active secondary market, there is no assurance that a secondary market on
an exchange or board of trade will exist for any particular contract or
option or at any particular time. In such event, it may not be possible to
close a futures or related option position and, in the event of adverse
price movements, a Fund would continue to be required to make daily cash
payments of variation margin on its futures positions.

FOREIGN CURRENCY OPTIONS. Options on foreign currencies operate
similarly to options on securities, and are traded primarily in the
over-the-counter market, although options on foreign currencies have
recently been listed on several exchanges. Such options will be purchased
or written only when an Adviser believes that a liquid secondary market
exists for such options. There can be no assurance that a liquid secondary
market will exist for a particular option at any specific time. Options on
foreign currencies are affected by all of those factors which influence
exchange rates and investments generally.

The value of a foreign currency option is dependent upon the value of
the foreign currency and the U.S. dollar, and may have no relationship to
the investment merits of a foreign security. Because foreign currency
transactions occurring in the interbank market involve substantially larger
amounts than those that may be involved in the use of foreign currency
options, investors may be disadvantaged by having to deal in an odd lot
market (generally consisting of transactions of less than $1 million) for
the underlying foreign currencies at prices that are less favorable than
for round lots.

There is no systematic reporting of last-sale information for foreign
currencies and there is no regulatory requirement that quotations available
through dealers or other market sources be firm or revised on a timely
basis. Available quotation information is generally representative of very
large transactions in the interbank market and thus may not reflect
relatively smaller transactions (less than $1 million) where rates may be
less favorable. The interbank market in foreign currencies is a global,
around-the-clock market. To the extent that the U.S. options markets are
closed while the markets for the underlying currencies remain open,
significant price and rate movements may take place in the underlying
markets that cannot be reflected in the U.S. options markets.

FOREIGN CURRENCY CONVERSION. Although foreign exchange dealers do not
charge a fee for currency conversion, they do realize a profit based on the
difference (the "spread") between prices at which they buy and sell various
currencies. Thus, a dealer may

B-11
<PAGE>

offer to sell a foreign currency to a Fund at one rate, while offering a
lesser rate of exchange should a Fund desire to resell that currency to the
dealer.

PRECIOUS METALS

The value of the investments of certain Funds may be affected by
changes in the price of gold and other precious metals. Gold has been
subject to substantial price fluctuations over short periods of time and
may be affected by unpredictable international monetary and other
governmental policies, such as currency devaluations or revaluations;
economic and social conditions within a country; trade imbalances; or trade
or currency restrictions between countries. Because much of the world's
known gold reserves are located in South Africa, political and social
conditions there may pose special risks to investments in gold. For
instance, social upheaval and related economic difficulties in South Africa
could cause a decrease in the share values of South African issuers. Many
institutions have rescinded policies that preclude investments in companies
doing business in South Africa. In July 1991, the United States lifted the
prohibition on new U.S. investment in South Africa, including the purchase
of newly-issued securities of South African companies.

In addition to its investments in securities, a Fund may, as described
from time to time in the Prospectus, invest a portion of its assets in
precious metals, such as gold, silver, platinum, and palladium, and
precious metal options and futures. The prices of precious metals are
affected by broad economic and political conditions, but are less subject
to local and company-specific factors than securities of individual
companies. As a result, precious metals and precious metal options and
futures may be more or less volatile in price than securities of companies
engaged in precious metals-related businesses. Precious metals may be
purchased in any form, including bullion and coins, provided that an
Adviser intends to purchase only those forms of precious metals that are
readily marketable and that can be stored in accordance with custody
regulations applicable to mutual funds. A Fund may incur higher custody and
transaction costs for precious metals than for securities. Also, precious
metals investments do not pay income.

Under current federal income tax law, gains from selling precious
metals (and certain other assets) may not exceed 10% of a Fund's annual
gross income. This tax requirement could cause a Fund to hold or sell
precious metals, securities, options, or futures when it would not
otherwise do so.

ZERO-COUPON DEBT SECURITIES AND PAY-IN-KIND SECURITIES

Zero-coupon securities in which a Fund may invest are debt obligations
which are generally issued at a discount and payable in full at maturity,
and which do not provide for current payments of interest prior to
maturity. Zero-coupon securities usually trade at a deep discount from
their face or par value and are subject to greater market value
fluctuations from changing interest rates than debt obligations of
comparable maturities which make current distributions of interest. As a
result, the net asset value of shares of a Fund investing in zero-coupon
securities may fluctuate over a greater range than shares of other mutual
funds investing in securities making current distributions of interest and
having similar maturities.

When debt obligations have been stripped of their unmatured interest
coupons by the holder, the stripped coupons are sold separately. The
principal or corpus is sold at a deep discount because the buyer receives
only the right to receive a future fixed payment on the security and does
not receive any rights to periodic cash interest payments. Once stripped or
separated, the corpus and coupons may be sold separately. Typically, the
coupons are sold separately or grouped with other coupons with like
maturity dates and sold in such bundled form. Purchasers of stripped
obligations acquire, in effect, discount obligations that are economically
identical to the zero-coupon securities issued directly by the obligor.

Zero-coupon securities allow an issuer to avoid the need to generate
cash to meet current interest payments. Even though zero-coupon securities
do not pay current interest in cash, a Fund is nonetheless required to
accrue interest income on them and to distribute the amount of that
interest at least annually to shareholders. Thus, a Fund could be required
at times to liquidate other investments in order to satisfy its
distribution requirement.

A Fund also may purchase pay-in-kind securities. Pay-in-kind
securities pay all or a portion of their interest or dividends in the form
of additional securities.

B-12
<PAGE>

LEAPS AND BOUNDS.

The Value + Growth Fund may purchase long-term exchange-traded equity
options called Long-Term Equity Anticipation Securities ("LEAPS") and
Buy-Write Options Unitary Derivatives ("BOUNDS"). LEAPS provide a holder
the opportunity to participate in the underlying securities' appreciation
in excess of a fixed dollar amount, and BOUNDS provide a holder the
opportunity to retain dividends on the underlying securities while
potentially participating in the underlying securities' capital
appreciation up to a fixed dollar amount. The Value + Growth Fund will not
purchase these options with respect to more than 25% of the value of its
net assets.

TEMPORARY DEFENSIVE STRATEGIES

At times, a Fund's Adviser may judge that market conditions make
pursuing the Fund's basic investment strategy inconsistent with the best
interests of its shareholders. At such times, the Adviser may temporarily
use alternative strategies, primarily designed to reduce fluctuations in
the values of the Fund's assets. In implementing these "defensive
strategies", a Fund may invest in U.S. Government securities, other
high-quality debt instruments, and other securities its Adviser believes to
be consistent with the Fund's best interests.

PORTFOLIO TURNOVER

Many of the Funds experienced high rates of portfolio turnover in
recent years. In most cases, these rates were the result of active trading
strategies employed by the Funds' portfolio managers in response to market
conditions, and not reflective of a material change in investment strategy.
The change in portfolio turnover rate for the Contrarian Fund from fiscal
year 1998 to fiscal year 1999 is due in part to changes in the portfolio
management of that Fund.

THE FUNDS' INVESTMENT LIMITATIONS

The Trust has adopted the following fundamental investment
restrictions which (except to the extent they are designated as
nonfundamental as to any Fund) may not be changed without the affirmative
vote of a majority of the outstanding voting securities of the affected
Fund.

THE CONTRARIAN FUND-TM- AND THE VALUE + GROWTH FUND.

A Fund may not:

1. purchase or sell commodities or commodity contracts, or interests in
oil, gas, or other mineral leases, or other mineral exploration or
development programs, although it may invest in companies that engage
in such businesses to the extent otherwise permitted by a Fund's
investment policies and restrictions and by applicable law, except as
required in connection with otherwise permissible options, futures and
commodity activities as described elsewhere in the Prospectus and this
Statement;

2. purchase or sell real estate, although it may invest in securities
secured by real estate or real estate interests, or issued by
companies, including real estate investment trusts, that invest in
real estate or real estate interests;

3. make short sales or purchases on margin, although it may obtain
short-term credit necessary for the clearance of purchases and sales
of its portfolio securities and except as required in connection with
permissible options, futures, short selling and leverage activities as
described elsewhere in the Prospectus and this Statement;

4. (a) for The Contrarian Fund-TM- only: with respect to 50% of its total
assets, invest in the securities of any one issuer (other than the
U.S. Government and its agencies and instrumentalities), if
immediately after and as a result of such investment more than 5% of
the total assets of the Fund would be invested in such issuer (the
remaining 50% of its total assets may be invested without restriction
except to the extent other investment restrictions may be applicable);

(b) for the Value + Growth Fund only: with respect to 75% of its total
assets, invest in the securities of any one issuer (other than the
U.S. Government and its agencies and instrumentalities), if
immediately after and as a result of such

B-13
<PAGE>

investment more than 5% of the total assets of the Fund would be
invested in such issuer (the remaining 25% of its total assets may be
invested without restriction except to the extent other investment
restrictions may be applicable);

5. mortgage, hypothecate, or pledge any of its assets as security for any
of its obligations, except as required for otherwise permissible
borrowings (including reverse repurchase agreements), short sales,
financial options and other hedging activities;

6. make loans of the Fund's assets, including loans of securities
(although it may, subject to the other restrictions or policies stated
herein, purchase debt securities or enter into repurchase agreements
with banks or other institutions to the extent a repurchase agreement
is deemed to be a loan), except that The Contrarian Fund-TM- may lend
up to one-third of its total assets to other parties;

7. borrow money, except from banks for temporary or emergency purposes or
in connection with otherwise permissible leverage activities, and then
only in an amount not in excess of (a) one-third of the value of The
Contrarian Fund's-TM- total assets, or (b) 5% of the Value + Growth
Fund's total assets (in any case as determined at the lesser of
acquisition cost or current market value and excluding collateralized
reverse repurchase agreements);

8. underwrite securities of any other company, although it may invest in
companies that engage in such businesses if it does so in accordance
with policies established by the Trust's Board of Trustees (the
Board's current policy permits a Fund to invest in companies that
directly or through subsidiaries execute portfolio transactions for a
Fund or have entered into selling agreements with the Distributor to
sell Fund shares, to the extent permitted by applicable law), and
except to the extent that the Fund may be considered an underwriter
within the meaning of the Securities Act of 1933, as amended, in the
disposition of restricted securities;

9. invest more than 25% of the value of the Fund's total assets in the
securities of companies engaged in any one industry (except securities
issued by the U.S. Government, its agencies and instrumentalities);

10. issue senior securities, as defined in the 1940 Act, except that this
restriction shall not be deemed to prohibit the Fund from making any
otherwise permissible borrowings, mortgages or pledges, or entering
into permissible reverse repurchase agreements, and options and
futures transactions;

11. for the Value + Growth Fund only: purchase the securities of other
investment companies, except as permitted by the 1940 Act or as
part of a merger, consolidation, acquisition of assets or similar
reorganization transaction.

ALL OTHER FUNDS.

As fundamental investment restrictions, which may not be changed with
respect to a Fund without approval by the holders of a majority of the
outstanding shares of that Fund, a Fund may not:

1. (all Funds other than Emerging Growth Fund) issue any class of
securities which is senior to the Fund's shares of beneficial
interest, except that each of the Funds may borrow money to the extent
contemplated by Restriction 3 below.

(Emerging Growth Fund) issue any class of securities which is senior
to the Fund's shares of beneficial interest, except to the extent the
Fund is permitted to borrow money or otherwise to the extent
consistent with applicable law.

2. (all Funds other than Emerging Growth Fund, RS Internet Age Fund-TM-,
and Aggressive Growth Fund) purchase securities on margin (but a Fund
may obtain such short-term credits as may be necessary for the
clearance of transactions) (Margin payments or other arrangements in
connection with transactions in short sales, futures contracts,
options, and other financial instruments are not considered to
constitute the purchase of securities on margin for this purpose.);

3. (all Funds other than Emerging Growth Fund, RS Internet Age Fund-TM-,
and Aggressive Growth Fund) borrow more than one-third of the value
of its total assets less all liabilities and indebtedness (other than
such borrowings) not represented by senior securities.

(Emerging Growth Fund) borrow money, except to the extent
permitted by

B-14
<PAGE>

applicable law.

(RS Internet Age Fund-TM- and Aggressive Growth Fund) borrow money,
except to the extent permitted by applicable law, regulation or order;

4. act as underwriter of securities of other issuers except to the extent
that, in connection with the disposition of portfolio securities, it
may be deemed to be an underwriter under certain federal securities
laws;

5. (i) (as to 75% of the Diversified Growth Fund's, the Global Natural
Resources Fund's, the MidCap Opportunities Fund's, the Information Age
Fund's-Registered Trademark-, the RS Internet Age Fund's-TM-, the
MicroCap Growth Fund's, and the Aggressive Growth Fund's total assets
and 50% of the Partners Fund's total assets) purchase any security
(other than obligations of the U.S. Government, its agencies or
instrumentalities) if as a result more than 5% of the Fund's total
assets (taken at current value) would then be invested in securities
of a single issuer;

(as to 75% of the Emerging Growth Fund's total assets) purchase any
security (other than U.S. Government securities), if as a result more
than 5% of the Fund's total assets (taken at current value) would then
be invested in securities of a single issuer, or

(ii) purchase any security if as a result 25% or more of the Fund's
total assets (taken at current value) would be invested in a single
industry, except that the Information Age Fund-Registered Trademark-
will invest without limit in any one or more information technology
industries, and the Global Natural Resources Fund will invest without
limit in any one or more natural resources industries, as described in
the Trust's Prospectus at the time, and the RS Internet Age Fund-TM-
will invest in companies RSIM believes are likely to benefit
substantially from the development of the Internet without limitation
as to industry concentration;

6. (all Funds other than Emerging Growth Fund, RS Internet Age Fund-TM-,
and Aggressive Growth Fund) invest in securities of any issuer if any
officer or Trustee of the Trust or any officer or director of RSIM,
L.P. or RSIM, Inc., as the case may be, owns more than 1/2 of 1% of
the outstanding securities of such issuer, and such officers, Trustees
and directors who own more than 1/2 of 1% own in the aggregate more
than 5% of the outstanding securities of such issuer (This policy is
non-fundamental as to the MicroCap Growth Fund);

7. make loans, except by purchase of debt obligations or other financial
instruments in which the Fund may invest consistent with its
investment policies, by entering into repurchase agreements, or
through the lending of its portfolio securities;

8. purchase or sell commodities or commodity contracts, except that a
Fund may purchase or sell financial futures contracts, options on
financial futures contracts, and futures contracts, forward contracts,
and options with respect to foreign currencies, and may enter into
swap transactions or other financial transactions, and except as
required in connection with otherwise permissible options, futures,
and commodity activities as described elsewhere in the Prospectus or
this Statement at the time;

9. purchase or sell real estate or interests in real estate, including
real estate mortgage loans, although (i) it may purchase and sell
securities which are secured by real estate and securities of
companies, including limited partnership interests, that invest or
deal in real estate and it may purchase interests in real estate
investment trusts, and (ii) the Global Natural Resources Fund may
invest in any issuers in the natural resources industries, as
described in the Prospectus at the time. (For purposes of this
restriction, investments by a Fund in mortgage-backed securities and
other securities representing interests in mortgage pools shall not
constitute the purchase or sale of real estate or interests in real
estate or real estate mortgage loans.)

In addition, it is contrary to the current policy of each of the Emerging
Growth, Diversified Growth, Global Natural Resources, RS Internet Age, MidCap
Opportunities, Information Age-Registered Trademark-, MicroCap Growth, Partners,
and Aggressive Growth Funds, which policy may be changed without shareholder
approval, to invest more than 15% of its net assets in securities which are not
readily marketable, including securities restricted as to resale (other than
securities restricted as to resale but determined by the Trustees, or persons
designated by the Trustees to make such determinations, to be readily
marketable).

All percentage limitations on investments will apply at the time of
investment and shall not be considered violated unless an excess or deficiency
occurs or exists immediately after and as a result of such investment. Except
for the investment restrictions listed above as fundamental or to the extent
designated as such in the Prospectus, the other investment policies described in
this

B-15
<PAGE>

Statement or in the Prospectus are not fundamental and may be changed by
approval of the Trustees. As a matter of policy, the Trustees would not
materially change a Fund's investment objective without shareholder approval.

The Investment Company Act of 1940, as amended (the "1940 Act"), provides
that a "vote of a majority of the outstanding voting securities" of the Fund
means the affirmative vote of the lesser of (1) more than 50% of the outstanding
shares of a Fund, or (2) 67% or more of the shares present at a meeting if more
than 50% of the outstanding shares are represented at the meeting in person or
by proxy.

MANAGEMENT OF THE FUNDS

TRUSTEES AND OFFICERS

The Trustees of the Trust are responsible for generally overseeing the
conduct of the Trust's business. Set forth below is certain information
about the Trust's trustees and executive officers:

LEONARD B. AUERBACH, TRUSTEE
c/o RS Investment Management, 388 Market Street, Suite 200, San Francisco, CA
94111
Mr. Auerbach, 53, is the President and Chief Executive Officer of Centre
Capital Group, Inc., a member company of American International Group, Inc.
Mr. Auerbach is also President of LBA&C, Inc., which served until July 1997
as general partner of Tuttle & Company, which provides mortgage pipeline
interest rate hedging services and related software to a variety of
institutional clients. He served until July 1997 as President of Tuttle &
Auerbach Securities, Inc., an introducing broker trading futures on behalf
of institutional hedging clients and individuals. He is also a Director of
Roelof Mining, Inc. and until March 1999 served as a director of Headlands
Mortgage Corp. Mr. Auerbach is President of APMT LLC, a manager of mortgage
assets. Mr. Auerbach is a limited partner in RS Residential Fund, L.P. and
RS Commercial Property Fund, L.P., of which RSRF Company, L.L.C., and RS
Investment Management Co., L.L.C., respectively, affiliates of RSIM, L.P.,
and RSIM, Inc. are the general partners. Mr. Auerbach is also a member of
RS Property Fund IV L.L.C. of which RS Fund IV Manager L.P., an affiliate
of RSIM L.P., is the Managing Member. Mr. Auerbach has been a Trustee of
the Trust since June 1987.

JOHN W. GLYNN, JR., TRUSTEE
c/o RS Investment Management, 388 Market Street, Suite 200, San Francisco, CA
94111
Mr. Glynn, 58, is the Principal and Chairman of the Board of Glynn Capital
Management, an investment management firm which he founded in 1983. Mr.
Glynn is a Director of Sterling Payot Company, a private investment banking
firm that advises executives and companies on financial and strategic
matters. He is also a director of several private companies. He is also a
lecturer at the Darden School of Business at the University of Virginia and
at the Stanford Business School. Mr. Glynn was until June 1997 a limited
partner in The Orphan Fund, of which RSIM, L.P. is a general partner. He
has been a Trustee of the Trust since July 1997.

*G. RANDALL HECHT, TRUSTEE, PRESIDENT AND PRINCIPAL EXECUTIVE OFFICER
c/o RS Investment Management, 388 Market Street, Suite 200, San Francisco, CA
94111
Mr. Hecht, 49, was elected President and Principal Executive Officer of the
Trust in February 1999. Mr. Hecht is the chief executive officer of RSIM,
L.P. and RSIM, Inc. He is also the chief executive officer and a member of
RS Investment Management Co., LLC, the parent company to RSIM, L.P. and
RSIM, Inc. Mr. Hecht served as Chief Operating Officer of Robertson,
Stephens & Company, Inc. from January 1993 to 1997, as Chief Financial
Officer of Robertson, Stephens & Company LLC (and its predecessors) from
June 1984 to January 1993 and as the head of that firm's Investment
Management Group. He was also a limited partner of Robertson, Stephens &
Company LLC, and a member of the Management and Executive Committees of
Robertson, Stephens & Company, Inc. He was a Trustee of the Trust from June
1987 until December 1997 and was most recently elected a Trustee in May,
1999.

B-16
<PAGE>

JAMES K. PETERSON, TRUSTEE
c/o RS Investment Management, 388 Market Street, Suite 200, San Francisco, CA
94111
Mr. Peterson, 58, is a Managing Director of Oak Glen Consultancy, L.L.C.,
a firm which advises pension funds and other institutions on investment
issues. From October 1998 until April 1999, Mr. Peterson was an employee
of Mitchum, Jones & Templeton, Inc., a registered broker-dealer. He served
as Director of Investment Management for the IBM Retirement Funds from
April 1988 until October 1996. Mr. Peterson was a Manager of the IBM
Retirement Funds from March 1981 until April 1988. Since December 1, 1998,
Mr. Peterson has served as a director of Capital Research and Management's
Income Fund of America and American Balanced Fund. Mr. Peterson is a
limited partner of RS Residential Fund, L.P., a limited partnership of
which RSRF Company, L.L.C., an affiliate of RSIM, L.P. and RSIM, Inc., is
the general partner. He has been a Trustee of the Trust since June 1987.

STEVEN COHEN, TREASURER
c/o RS Investment Management, 388 Market Street, Suite 200, San Francisco, CA
94111
Mr. Cohen, 34, is the Chief Financial Officer of RSIM, L.P. and RSIM, Inc.
Prior to joining RS Investment Management in April 1999, Mr. Cohen was
Trading Operations Manager of Ziff Brothers Investments from 1997 until
1998. From 1994 until 1997, he served as an Audit Manager at Ernst & Young.
Mr. Cohen has been Treasurer of the Trust since April 1999.

SUZANNE DUFRANE, SECRETARY
c/o RS Investment Management, 388 Market Street, Suite 200, San Francisco, CA
94111
Prior to joining RS Investment Management, Ms. DuFrane, 32, was a Vice
President at Credit Suisse First Boston in New York. From 1996-1997, Ms.
DuFrane worked at Robertson Stephens Investment Management as a controller
in the hedge fund group. Before joining Robertson Stephens Investment
Management in 1996, Ms. DuFrane was a senior tax consultant at Price
Waterhouse in San Francisco for three years. She has a B.A. in Social
Science from U.C. Berkeley. Ms. DuFrane has been Secretary of the Trust
since May, 1999.

Pursuant to the terms of the Advisory Agreements with the Funds, RS
Investment Management pays all compensation of officers of the Trust as well as
the fees and expenses of all Trustees of the Trust who are affiliated persons of
RS Investment Management. The Trust pays each unaffiliated Trustee a quarterly
fee of $15,000 and reimburses their actual out-of-pocket expenses relating to
attendance at meetings of the Board of Trustees. Each Fund pays its allocable
portion of Trustee fees and expenses based on each such Fund's net asset value.

B-17
<PAGE>

<TABLE>
<CAPTION>
COMPENSATION TABLE
FOR THE YEAR ENDED DECEMBER 31, 1999

Name of Aggregate Pension or Estimated Annual Total Compensation
Person, Position Compensation From Retirement Benefits Benefits Upon From Fund Paid to
Trust Accrued As Part of Retirement Trustees
Trust Expenses
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Leonard Auerbach, Trustee $60,000 -- -- $60,000

John W. Glynn, Jr., Trustee $60,000 -- -- $60,000

James K. Peterson, Trustee $60,000 -- -- $60,000

G. Randall Hecht,* Trustee -- -- -- --
</TABLE>

*Denotes a Trustee who is an "interested person" as defined in the 1940 Act.

The Trust, RS Investment Management and Provident Distributors Inc.
have adopted codes of ethics under rule 17j-1 of the Investment Company Act
which permit personnel subject to the codes to invest in securities,
including securities that may be purchased or held by a Fund.

CONTROL PERSONS AND SHARE OWNERSHIP

As of April 4, 2000, to the Funds' knowledge, the shareholders who owned of
record or beneficially more than 5% of the outstanding shares of any Fund were
as follows:

<TABLE>
<CAPTION>
SHAREHOLDER SHARES OWNED PERCENTAGE OF
OUTSTANDING SHARES OF
FUND OWNED
-------------------------------------------------------------------------------------
<S> <C> <C>
THE CONTRARIAN FUND-TM-

Charles Schwab & Co. Inc. 2,162,636.633 21.20%
Reinvest Account
Attn: Mutual Funds Department
101 Montgomery Street
San Francisco, CA 94104-4122

National Financial Services Corp. 862,513.824 8.45
FBO The Exclusive Benefit of Our
Customers
PO Box 3908
Church Street Station
New York, NY 10008-3908

DIVERSIFIED GROWTH FUND

Charles Schwab & Co. Inc. 7,313,312.095 39.93%
Reinvest Account
Attn: Mutual Funds Department
101 Montgomery Street
San Francisco, CA 94104-4122

B-18
<PAGE>

National Financial Services Corp. 3,338,422.259 18.23%
FBO The Exclusive Benefit of Our
Customers
PO Box 3908
Church Street Station
New York, NY 10008-3908

EMERGING GROWTH FUND

Charles Schwab & Co. Inc. 24,092,040.701 29.47%
Reinvest Account
Attn: Mutual Funds Department
101 Montgomery Street
San Francisco, CA 94104-4122

National Financial Services Corp. 14,566,685.576 17.82%
FBO The Exclusive Benefit of Our
Customers
PO Box 3908
Church Street Station
New York, NY 10008-3908

GLOBAL NATURAL RESOURCES FUND

Charles Schwab & Co. Inc. 1,350,703.572 52.99%
Reinvest Account
Attn: Mutual Funds Department
101 Montgomery Street
San Francisco, CA 94104-4122

National Investor Service Corp. 233,373.297 9.16%
For the Exclusive Benefit
of our Customers
55 Water St., Fl. 32
New York, NY 10041-3299

National Financial Services Corp. 232,684.277 9.13%
FBO The Exclusive Benefit of Our
Customers
PO Box 3908
Church Street Station
New York, NY 10008-3908

MIDCAP OPPORTUNITIES FUND

Charles Schwab & Co. Inc. 6,525,153.257 40.55%
Reinvest Account
Attn: Mutual Funds Department
101 Montgomery Street
San Francisco, CA 94104-4122

B-19
<PAGE>

National Financial Services Corp. 2,013,751.693 12.51%
FBO The Exclusive Benefit of Our
Customers
PO Box 3908
Church Street Station
New York, NY 10008-3908

INFORMATION AGE FUND-REGISTERED TRADEMARK-

Charles Schwab & Co. Inc. 3,859,413.745 40.83%
Reinvest Account
Attn: Mutual Funds Department
101 Montgomery Street
San Francisco, CA 94104-4122

National Financial Services Corp. 1,254,777.379 13.28%
FBO The Exclusive Benefit of Our
Customers
PO Box 3908
Church Street Station
New York, NY 10008-3908

RS INTERNET AGE FUND-TM-

Charles Schwab & Co. Inc. 5,608,613.818 27.30%
Reinvest Account
Attn: Mutual Funds Department
101 Montgomery Street
San Francisco, CA 94104-4122

National Financial Services Corp. 3,340,000.120 16.26%
FBO The Exclusive Benefit of Our
Customers
PO Box 3908
Church Street Station
New York, NY 10008-3908

MICROCAP GROWTH FUND

Charles Schwab & Co. Inc. 753,780.705 19.03%
Reinvest Account
Attn: Mutual Funds Department
101 Montgomery Street
San Francisco, CA 94104-4122

National Financial Services Corp. 1,154,696.743 29.16%
FBO The Exclusive Benefit of Our
Customers
PO Box 3908
Church Street Station
New York, NY 10008-3908

National Investor Service Corp. 351,310.514 6.30%
For the Exclusive Benefit of Our
Customers
55 Water St., Fl. 32
New York, NY 10041-3299

B-20
<PAGE>

PARTNERS FUND

Charles Schwab & Co. Inc. 500,587.606 31.59%
Reinvest Account
Attn: Mutual Funds Department
101 Montgomery Street
San Francisco, CA 94104-4122

National Financial Services Corp. 163,180.508 10.30%
FBO The Exclusive Benefit of Our
Customers
PO Box 3908
Church Street Station
New York, NY 10008-3908

VALUE + GROWTH FUND

Charles Schwab & Co. Inc. 5,899,138.085 29.68%
Reinvest Account
Attn: Mutual Funds Department
101 Montgomery Street
San Francisco, CA 94104-4122

National Financial Services Corp. 2,780,556.185 13.99%
FBO The Exclusive Benefit of Our
Customers
PO Box 3908
Church Street Station
New York, NY 10008-3908
</TABLE>

On April 4, 2000, the officers and Trustees of the Trust, as a group,
beneficially owned less than 1% of the outstanding shares of each Fund except
the Partners Fund in which G. Randall Hecht beneficially owned 1.33% of the
outstanding shares.

The Trust's Declaration of Trust and By-Laws provide that the Trust will
indemnify its Trustees and officers against liabilities and expenses incurred in
connection with litigation in which they may be involved because of their
offices with the Trust, except if it is determined in the manner specified in
the Declaration of Trust and By-Laws that they have not acted in good faith in
the reasonable belief that their actions were in the best interests of the Trust
or that such indemnification would relieve any officer or Trustee of any
liability to the Trust or its shareholders by reason of willful misfeasance, bad
faith, gross negligence, or reckless disregard of his or her duties. The Trust,
at its expense, provides liability insurance for the benefit of its Trustees and
officers.

RS INVESTMENT MANAGEMENT

RS Investment Management Co., L.L.C. ("RSIM Co."), a Delaware limited
liability company, is the owner of all of the outstanding beneficial interest in
RSIM, L.P. G. Randall Hecht, Chairman and Chief Executive Officer of RSIM Co.,
owns 29% of the membership interest in RSIM Co.; Mr. Paul Stephens, Mr. Andrew
P. Pilara, and Mr. James Callinan, portfolio managers of certain of the Funds,
own 22%, 15%, and 20%, respectively. The remainder of the membership interests
is owned by other employees of RSIM Co. or its affiliates and by other persons
otherwise unaffiliated with RSIM Co. Each of Messrs. Callinan, Hecht, Pilara,
and Stephens and Messrs. David Evans and James Foster, employees of RSIM Co. or
its affiliates, is a member of the Board of Managers of RSIM Co. Mr. Hecht
serves as the President and Principal Executive Officer, and as a Trustee, of
the Trust.

Pursuant to Investment Advisory Agreements (the "Advisory Agreements"), RS
Investment Management, at its expense, furnishes investment management services
with respect to the assets of each Fund, consistent with the investment
objective and policies of such Fund and subject to the supervision and direction
of the Trust's Board of Trustees, and (i) furnishes the Trust with investment
advice, research, and recommendations with respect to the investment of each
Fund's assets and the purchase and sale of its portfolio securities, (ii)
furnishes the Trust and each Fund with reports, statements, and other data on
securities, economic conditions, and other pertinent subjects, and (iii) in

B-21
<PAGE>

general superintends and manages the investments of each Fund, subject to the
ultimate supervision and direction of the Board of Trustees. In addition, the
Advisory Agreements provide that RS Investment Management provides all
administrative services needed for the management and operation of each Fund
and furnishes such office space and personnel as are needed by the Fund
(except in the case of the Diversified Growth, Global Natural Resources,
MidCap Opportunities, The Information Age-Registered Trademark-, RS Internet
Age-TM-, RS Aggressive Growth, and MicroCap Growth Funds, where such
administrative services are furnished by RS Investment Management pursuant to
an Administrative Services Agreement with those Funds, as described in
"Administrative Services" below). The services of RS Investment Management to
the Funds are not deemed to be exclusive, and RS Investment Management or any
affiliate may provide similar services to other series of the Trust, other
investment companies, and other clients, and may engage in other activities.

Each Advisory Agreement provides that RS Investment Management shall not,
in the absence of willful misfeasance, bad faith, gross negligence, or reckless
disregard by it of its obligations or duties, be subject to liability to the
Fund in question or the shareholders of the Fund for any act or omission in the
course of, or connected with, its rendering services thereunder, or for any
losses that may be sustained in the purchase, holding, or sale of any security
by the Fund.

Each of the Advisory Agreements is subject to annual approval, commencing
in 2001 (2002 in the case of RS Aggressive Growth Fund), by (i) the vote of the
Trustees or of a majority of the outstanding voting securities (as defined in
the 1940 Act) of the affected Fund, and (ii) the vote of a majority of the
Trustees who are not "interested persons" (as defined in the 1940 Act) of the
Trust, RSIM, L.P., or RSIM, Inc. Each is terminable by RS Investment Management,
the Trust, or a vote of a majority of the outstanding voting securities of the
affected Fund, without penalty, on 60 days written notice and will terminate
automatically in the event of its assignment.

Each Advisory Agreement also provides that RS Investment Management may, at
its own expense, delegate certain of its responsibilities under the Agreement to
sub-advisers for the Funds, who would be required to furnish an investment
program and make investment decisions for the Funds. RSIM, L.P. has entered into
sub-advisory agreements with Elijah Asset Management, in respect of the
Information Age-Registered Trademark- and Value + Growth Funds, and with
Eastbourne in respect of a portion of the assets of The Contrarian Fund-TM-. See
"The Sub-Advisors," below.

THE SUB-ADVISORS

Elijah Asset Management serves as sub-advisor to The Information Age
Fund-Registered Trademark- and the Value + Growth Fund. Eastbourne serves as
sub-adviser in respect of a portion of the assets of The Contrarian Fund-TM-.
Pursuant to each sub-advisory agreement ("Sub-Advisory Agreements"), each
Sub-Adviser (i) manages such of the Fund's assets as are allocated to it in
accordance with the Fund's investment objective, policies, and limitations and
with any additional policies or guidelines established from time to time by
RSIM, L.P. or the Board of Trustees, (ii) makes investment decisions for the
Fund as to those assets, and (iii) places orders to purchase and sell securities
and other investments for the Fund in respect of those assets. Each Sub-Advisory
Agreement requires the Sub-Adviser to keep the Trust and RSIM, L.P informed of
developments materially affecting the Fund in question. RSIM, L.P. currently
allocates all of the assets of The Information Age Fund-Registered Trademark-
and the Value + Growth Fund to Elijah Asset Management for management by that
firm. RSIM, L.P. currently allocates only a portion of the assets of The
Contrarian Fund-TM- to Eastbourne for management, as described below.

ELIJAH ASSET MANAGEMENT, LLC.

Elijah Asset Management ("EAM") is a Delaware limited liability company
founded in March 1999. EAM's majority managing members are Ronald E. Elijah
(20% ownership), Roderick R. Berry (14% ownership), and Aeltus Investment
Management (25% ownership). Ronald Elijah maintains 75% of the voting
interest in the firm. EAM personnel and outside investors hold the remaining
ownership of the firm. Mr. Elijah serves as portfolio manager to the
Information Age Fund-Registered Trademark- and the Value + Growth Fund. Mr.
Berry serves as co-portfolio manager to the Information Age Fund-Registered
Trademark-. Aeltus Investment Management is a wholly owned subsidiary of
Aetna, Incorporated.

Under the Sub-Advisory Agreement with Elijah Asset Management, RSIM, L.P
will pay a fee to Elijah Asset Management with respect to each of The
Information Age Fund-Registered Trademark- and the Value + Growth Fund equal to
50% of the fees paid to RSIM, L.P. by such Fund pursuant to the Advisory
Agreement.

The Sub-Advisory Agreement with Elijah Asset Management may be terminated
as to either Fund (i) by the Trust at any time without penalty, upon the vote of
a majority of the Trust's Trustees or by vote of a majority of the outstanding
voting securities of the Fund in question, upon 60 days written notice to Elijah
Asset Management and RSIM, L.P., (ii) by RSIM, L.P. at any time without penalty,
upon 60 days written notice to Elijah Asset Management and the Trust (which
right RSIM, L.P. has agreed with Elijah Asset Management not to exercise except
under certain circumstances, as described below), or (iii) by Elijah Asset
Management at any time without penalty, upon 60 days written notice

B-22
<PAGE>

to RSIM, L.P. and the Trust. The Sub-Advisory Agreement will continue in effect
for a period of more than two years in respect of a Fund only if its continuance
is approved annually by the Board of Trustees of the Trust or the shareholders
of the Fund in question and by the disinterested Trustees of the Trust.

RSIM, L.P. has entered into a separate agreement with Elijah Asset
Management relating generally to Elijah Asset Management's management of assets
of a number of clients of RSIM, L.P., including the Funds. That agreement
includes provisions, by way of example, requiring Elijah Asset Management to
provide certain types of information to RSIM, L.P., to continue to employ Mr.
Ronald Elijah as the full-time principal portfolio manager of the accounts of
those clients, to comply with all applicable laws, rules, and regulations, and
to comply with such investment guidelines and protocols as RSIM, L.P. may
establish from time to time. It also includes provisions requiring RSIM, L.P. to
make payments to Elijah Asset Management at an annual rate of up to 0.025% of
the average daily net assets of each of the Funds in consideration of Elijah
Asset Management's cooperation with RSIM, L.P. in respect of the promotion of
the shares of the Funds. In that agreement, RSIM, L.P. has also agreed not to
exercise its right to terminate the Sub-Advisory Agreement in respect of either
Fund for a period of three years except for cause, which is defined in the
agreement to include, among other things, Elijah Asset Management's becoming
subject to a statutory disqualification preventing it from serving as
sub-adviser; Elijah Asset Management's (or any affiliate's) becoming subject to
any claim, investigation, action, or suit that could reasonably be expected to
injure or call into question the goodwill, reputation, or business of any Fund,
of RSIM, L.P., or of any of their affiliates; any breach by Elijah Asset
Management of any material provision of the agreement or of the Sub-Advisory
Agreement; or Elijah Asset Management's (or any affiliate's) committing any act
of fraud or dishonesty that could injure the goodwill, reputation, or business
of any Fund or of RSIM, L.P. or of any of their affiliates. RSIM, L.P. has also
agreed not to exercise its right to terminate the Sub-Advisory Agreement in
respect of the Fund after that three-year period except for cause so long as the
investment performance of the Fund meets certain criteria agreed upon by RSIM,
L.P. and Elijah Asset Management. Nothing in that agreement limits in any way
the right of any Fund to terminate a Sub-Advisory Agreement in accordance with
its terms or the right or ability of RSIM, L.P. to provide evaluations and
recommendations to the Board of Trustees as to Elijah Asset Management, its
services, or its status as sub-adviser to a Fund.

In its agreement with RSIM, L.P., Elijah Asset Management has agreed to
limit its management of other mutual funds comparable to the Information Age and
Value + Growth Funds.

EASTBOURNE MANAGEMENT, L.L.C.

Eastbourne is a newly formed Delaware limited liability company; its sole
managing member is Rick Barry, who currently serves as a member of the portfolio
management team for The Contrarian Fund-TM-. Mr. Barry owns the majority of the
outstanding membership interest in Eastbourne; certain employees of Eastbourne
own the remaining membership interests.

Currently, RSIM, L.P. allocates a portion of The Contrarian Fund's-TM-
assets for management by Eastbourne in circumstances where RSIM, L.P. believes
that management of those assets by Eastbourne would be in the best interest of
the Fund. RSIM, L.P. allocates a portion of the Fund's assets to Eastbourne in
circumstances where, for example, RSIM, L.P. believes that an increase in, or
change to, the Fund's short positions might be desirable, or where it believes
that long investments by the Fund might be desirable in sectors or companies
where Eastbourne might offer a successful investment program. Under the
Sub-Advisory Agreement, RSIM, L.P. pays a fee to Eastbourne in an amount equal
to 40% of the fees received by RSIM, L.P. under its Investment Advisory
Agreement with the Fund in respect of assets allocated to Eastbourne.

The Sub-Advisory Agreement with Eastbourne may be terminated (i) at any
time without penalty by the Trust, upon the vote of a majority of the Trust's
Trustees or by vote of the majority of the outstanding voting securities of The
Contrarian Fund, upon 60 days written notice to Eastbourne and RSIM, L.P., (ii)
by RSIM, L.P. at any time without penalty, upon 60 days written notice to
Eastbourne and the Trust, or (iii) by Eastbourne at any time without penalty,
upon 60 days written notice to RSIM, L.P. and the Trust. The Sub-Advisory
Agreement will continue in effect for a period of more than two years in respect
of the Fund only if its continuance is approved annually by the Board of
Trustees of the Trust or the shareholders of the Fund and by the disinterested
Trustees of the Trust.

Eastbourne may from time to time place limits on the amount of assets it
will manage for The Contrarian Fund-TM- and other clients of RSIM, L.P. for the
purpose of making "short" investments; currently, Eastbourne has fixed that
limit at $50 million.

B-23
<PAGE>

MANAGEMENT AND ADMINISTRATIVE FEES

MANAGEMENT FEES. The Funds pay RS Investment Management fees as
compensation for the services provided by it under the Advisory Agreements. The
amount of these management fees is calculated daily and payable monthly at the
following annual rates based on the average daily net assets of each Fund:

<TABLE>
<S> <C>
The Contrarian Fund-TM- 1.50%
Diversified Growth Fund 1.00%
Emerging Growth Fund 1.00%
Global Natural Resources Fund 1.00%
RS Internet Age Fund-TM- 1.25%
MidCap Opportunities Fund 1.00%
Information Age Fund-Registered Trademark- 1.00%
MicroCap Growth Fund 1.25%
Partners Fund 1.25%
Value + Growth Fund 1.00%
Aggressive Growth Fund 1.00%
</TABLE>

These management fees are higher than those paid by most other investment
companies. RS Investment Management also may at its discretion from time to time
pay Fund expenses from its own assets, or reduce the management fee of a Fund.

ADMINISTRATIVE SERVICES. The Diversified Growth Fund, Global Natural
Resources Fund, RS Internet Age Fund-TM-, MidCap Opportunities Fund, The
Information Age Fund-Registered Trademark-, MicroCap Growth Fund, and Aggressive
Growth Fund have entered into an Administrative Services Agreement with RSIM,
L.P., pursuant to which RSIM, L.P. continuously provides business management
services to the Funds and generally manages all of the business and affairs of
the Funds, subject to the general oversight of the Trustees. No fees are payable
by these Funds under the Administrative Services Agreement.

The Administrative Services Agreement is subject to annual approval,
commencing in 2001 (2002 in the case of RS Aggressive Growth Fund), by (i) the
Board of Trustees, and (ii) the vote of a majority of the Trustees who are not
"interested persons" (as defined in the 1940 Act). The Administrative Services
Agreement may be terminated without penalty, by the Trust or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act) of
the affected Fund, on 30 days notice to RSIM, L.P.

RECENT MANAGEMENT AND ADMINISTRATIVE FEES PAID BY THE FUNDS.

<TABLE>
<CAPTION>
Reimbursement Administration
Management Fees(1) of Expenses(2) Fees(3)
------------------ -------------- --------------
<S> <C> <C> <C>
THE CONTRARIAN FUND-TM-
Year ended 12/31/97 $13,674,978 -- --
Year ended 12/31/98 $ 3,977,993 -- --
Year ended 12/31/99 $ 1,883,627 -- --

DIVERSIFIED GROWTH FUND
Year ended 12/31/97 $ 646,730 $ 126,477 $161,683
Year ended 12/31/98 $ 734,620 $ 151,559 $ 82,199
Year ended 12/31/99 $ 1,097,348 -- --

EMERGING GROWTH FUND
Year ended 12/31/97 $ 2,277,624 -- --
Year ended 12/31/98 $ 2,833,019 -- --
Year ended 12/31/99 $12,119,940 -- --

B-24
<PAGE>

GLOBAL NATURAL RESOURCES FUND
Year ended 12/31/97 $ 1,438,918 $ 9,044 $359,729
Year ended 12/31/98 $ 507,251 $ 132,665 $ 69,681
Year ended 12/31/99 $ 281,954 $ 29,580 --

MIDCAP OPPORTUNITIES FUND
Year ended 12/31/97 $ 2,972,467 $1,235,367 $743,117
Year ended 12/31/98 $ 2,451,091 $ 853,895 $288,447
Year ended 12/31/99 $ 1,887,526 $ 120,329 --

THE INFORMATION AGE FUND-Registered Trademark-
Year ended 12/31/97 $ 1,234,823 -- $308,706
Year ended 12/31/98 $ 1,177,214 -- $126,941
Year ended 12/31/99 $ 2,051,514 -- --

RS INTERNET AGE FUND-TM-(4)
Year ended 12/31/99 $ 68,676 -- --

MICROCAP GROWTH FUND
Year ended 12/31/97 $ 530,205 $ 274,052 $106,041
Year ended 12/31/98 $ 1,386,701 $ 104,172 $126,373
Year ended 12/31/99 $ 1,055,450 $ 27,155 --

PARTNERS FUND
Year ended 12/31/97 $ 2,580,567 $ 1,746 --
Year ended 12/31/98 $ 1,496,310 $ 236,741 --
Year ended 12/31/99 $ 409,292 $ 175,552 --

VALUE + GROWTH FUND
Year ended 12/31/97 $ 7,509,306 -- --
Year ended 12/31/98 $ 7,015,541 -- --
Year ended 12/31/99 $ 6,576,886 -- --
</TABLE>

(1) Before giving effect to any reimbursement or waiver by RSIM, L.P. or
RSIM, Inc.

(2) Includes amount of management fees waived or reimbursed by RSIM, L.P.
or RSIM, Inc. plus the amount of any other expenses for which RSIM, L.P. or
RSIM, Inc. reimbursed the Fund or which RSIM, L.P. or RSIM, Inc. bore on
behalf of the Fund.

(3) On May 26, 1998, the Administrative Services Agreement between the
Trust on behalf of certain of the Funds and RSIM, L.P. was amended to
provide that no fee is payable by the Funds under that Agreement. Prior to
such date, certain of the Funds paid fees under the Administrative Services
Agreement at an annual rate of 0.25% of a Fund's average daily net assets.

(4) Shares of RS Internet Age Fund-TM- were first offered for sale to the
public on December 1, 1999.

The Trust, on behalf of each Fund, has entered into a Sub-Administration
and Accounting Services Agreement with PFPC, Inc. ("PFPC"), a subsidiary of PNC
Bank Corp. (and an affiliate of Provident Distributors, Inc. , the Fund's
Distributor), pursuant to which PFPC performs a variety of accounting,
bookkeeping, and other administrative services for the Funds. For its services
under the Agreement, PFPC, Inc. has the right to receive fees, in addition to
reimbursement of out-of-pocket expenses, from each Fund at the following annual
rates:

B-25
<PAGE>

Administrative Service Fees (subject to applicable waivers/caps described
below):

.03% of each Fund's first $1 billion of average daily net assets;
.02% of each Fund's next $750 million of such assets; and
.015% of each Fund's such assets in excess of $1.75 billion.

Payment of these fees is subject to the following waiver and cap
provisions:

PFPC has waived the administrative service fee for Funds with average net
assets of less than $50 million and has capped the service fees at certain other
asset levels as follows:

.01% of the average daily net assets of each Fund with average net assets
between $50 and $100 million; and
.02% of the average daily net assets of each Fund with average net assets
between $100 and $200 million.

Accounting Service Fees:

.085% of each Fund's first $350 million of average daily net assets;
.060% of each Fund's next $300 million of such assets;
.035% of each Fund's next $250 million of such assets;
.020% of each Fund's next $850 million of such assets; and
.015% of each Fund's such assets in excess of $1.75 billion.

PFPC has waived the accounting service fee for Funds with average net
assets of less than $50 million and has capped the service fees at certain
other asset levels as follows:

.02% of the average daily net assets of each Fund with average net assets
of less than $50 million; and
.035% of the average daily net assets of each Fund with average net assets
between $50 and $75 million;
.075% of the average daily net assets of each Fund with average net assets
between $75 and $100 million; and
.080% of the average daily net assets of each Fund with average net assets
between $100 and $300 million.

In addition, PFPC has agreed to waive all Sub-Administration and
Accounting fees for Funds that commenced (or will commence) operations on or
after December 1, 1999 on the first $75 million in gross assets of such Funds,
excluding transaction and out-of-pocket expenses. If during the three years
following implementation of the cap/waiver, PFPC is removed from the
Sub-Administration and Accounting Services Agreement, PFPC will recoup 100% of
the fees waived during the first year.

EXPENSES

Each Fund will pay all expenses related to its operation which are not
borne by an Adviser, including but not limited to taxes, interest, brokerage
fees and commissions, compensation paid to Provident Distributors, Inc., Four
Falls Corporate Center, 6th Floor, West Conshohocken, Pennsylvania 19428
("Provident" or the "Distributor"), the Trust's distributor, under the Funds'
12b-1 Plan, fees paid to members of the Board of Trustees who are not officers,
directors, stockholders, or employees of an Adviser or Provident, SEC fees and
related expenses, state Blue Sky qualification fees, charges of custodians,
transfer agents, registrars or other agents, outside auditing, accounting, and
legal services, charges for the printing of prospectuses and statements of
additional information for regulatory purposes or for distribution to
shareholders, certain shareholder report charges, and charges relating to
corporate matters.

PORTFOLIO TRANSACTIONS AND BROKERAGE

Investment decisions for the Funds and for the other investment advisory
clients of an Adviser and its affiliates are made with a view to achieving their
respective investment objectives. Investment decisions are the product of many
factors in addition to basic suitability for the particular client involved.
Thus, a particular security may be bought or sold for certain clients even
though it could have been bought or sold for other clients at the same time.
Likewise, a particular security may be bought for one or more clients when one
or more other clients are selling the security. In some instances, one client
may sell a particular security to another client. It also sometimes happens that
two or more clients simultaneously purchase or sell the same security, in which
event each day's transactions in such security are, insofar as possible,
averaged as to price and allocated between such clients in a manner which in the
Adviser's opinion is equitable to each and in accordance with the amount being
purchased or sold by each. There may be circumstances when purchases or sales of
portfolio securities for one or more

B-26
<PAGE>

clients will have an adverse effect on other clients. Each Adviser employs
professional staffs of portfolio managers who draw upon a variety of resources
for research information for the Funds.

Transactions on U.S. stock exchanges, commodities markets, and futures
markets and other agency transactions involve the payment by a Fund of
negotiated brokerage commissions. Such commissions vary among different brokers.
A particular broker may charge different commissions according to such factors
as the difficulty and size of the transaction. Transactions in foreign
investments often involve the payment of fixed brokerage commissions, which may
be higher than those in the United States. There is generally no stated
commission in the case of securities traded in the over-the-counter markets, but
the price paid by the Trust usually includes an undisclosed dealer commission or
mark-up. In underwritten offerings, the price paid by the Trust includes a
disclosed, fixed commission or discount retained by the underwriter or dealer.

It has for many years been a common practice in the investment advisory
business for advisers of investment companies and other institutional investors
to receive brokerage and research services (as defined in the Securities
Exchange Act of 1934, as amended (the "1934 Act")) from broker-dealers that
execute portfolio transactions for the clients of such advisers and from third
parties with which such broker-dealers have arrangements. Consistent with this
practice, the Advisers receive brokerage and research services and other similar
services from many broker-dealers with which they place a Fund's portfolio
transactions and from third parties with which these broker-dealers have
arrangements. These services include such matters as general economic and market
reviews, industry and company reviews, evaluations of investments,
recommendations as to the purchase and sale of investments, newspapers,
magazines, pricing services, quotation services, news services, and personal
computers utilized by an Adviser's managers and analysts. Where the services
referred to above are not used exclusively by an Adviser for research purposes,
the Adviser, based upon its own allocations of expected use, bears that portion
of the cost of these services which directly relates to its non-research use.
Some of these services are of value to an Adviser and its affiliates in advising
various of its clients (including the Funds), although not all of these services
are necessarily useful and of value in managing the Funds. The management fee
paid by a Fund is not reduced because an Adviser or its affiliates receive these
services even though the Adviser might otherwise be required to purchase some of
these services for cash.

The Advisers place all orders for the purchase and sale of portfolio
investments for the Funds and buy and sell investments for the Funds through a
substantial number of brokers and dealers. Each Adviser seeks the best overall
terms available for the Funds, except to the extent an Adviser may be permitted
to pay higher brokerage commissions as described below. In doing so, an Adviser,
having in mind a Fund's best interests, considers all factors it deems relevant,
including, by way of illustration, price, the size of the transaction, the
nature of the market for the security or other investment, the amount of the
commission, the timing of the transaction taking into account market prices, and
trends, the reputation, experience, and financial stability of the broker-dealer
involved and the quality of service rendered by the broker-dealer in other
transactions.

As permitted by Section 28(e) of the 1934 Act, an Adviser may cause a Fund
to pay a broker-dealer which provides "brokerage and research services" (as
defined in the 1934 Act) to the Adviser an amount of disclosed commission for
effecting securities transactions on stock exchanges and other transactions for
the Fund on an agency basis in excess of the commission which another
broker-dealer would have charged for effecting that transaction. An Adviser's
authority to cause a Fund to pay any such greater commissions is also subject to
such policies as the Trustees may adopt from time to time. None of the Advisers
currently intends to cause the Funds to make such payments. It is the position
of the staff of the Securities and Exchange Commission that Section 28(e) does
not apply to the payment of such greater commissions in "principal"
transactions. Accordingly, the Advisers will use their best efforts to obtain
the best overall terms available with respect to such transactions.

B-27
<PAGE>

The following tables provide information regarding brokerage commissions
paid by the Funds for the periods indicated.

<TABLE>
<CAPTION>
FISCAL YEAR FISCAL YEAR FISCAL YEAR
THE CONTRARIAN FUND-TM- ENDED 12/31/99 ENDED 12/31/98 ENDED 12/31/97
- -------------------- -------------- -------------- --------------
<S> <C> <C> <C>
Percentage of total transactions involving 94% 80% 77%
brokerage commissions

Dollar amount of commissions $970,300 $908,205 $2,654,377

Percentage (dollar amount) paid to Robertson, 3.12% ($30,320) 0.3%($2,370) 0.6%($16,986)
Stephens & Company LLC ("RS&Co.")/BancAmerica
Robertson
Stephens ("BARS")/NationsBanc Montgomery
Securities/("NMS")

Percentage of brokerage transactions effected 7% 0% 3%
through RS&Co./BARS/NMS

Percentage of transactions effected without 6% 20% 23%
brokerage commissions

FISCAL YEAR FISCAL YEAR FISCAL YEAR
DIVERSIFIED GROWTH FUND ENDED 12/31/99 ENDED 12/31/98 ENDED 12/31/97
- -------------------- -------------- -------------- --------------
<S> <C> <C> <C>
Percentage of total transactions 19% 41% 46%
involving brokerage commissions

Dollar amount of commissions $4,460,016 $947,156 $611,542

Percentage (dollar amount) paid to 8.06% ($359,441) 4.3%($40,890) 9.6%($58,721)
RS&Co./BARS/NMS

Percentage of brokerage transactions effected 9% 3% 8%
through RS&Co./BARS/NMS

Percentage of transactions effected without 81% 59% 54%
brokerage commissions

FISCAL YEAR FISCAL YEAR FISCAL YEAR
EMERGING GROWTH FUND ENDED 12/31/99 ENDED 12/31/98 ENDED 12/31/97
- -------------------- -------------- -------------- --------------
<S> <C> <C> <C>
Percentage of total transactions involving 16% 19% 40%
brokerage commissions

Dollar amount of commissions $12,797,171 $611,965 $892,322

Percentage (dollar amount) paid to 10.81% ($1,383,015) 12.3%($74,833) 10.0%($89,505)
RS&Co./BARS/NMS

B-28
<PAGE>

Percentage of brokerage transactions effected 13% 5% 6%
through RS&Co./BARS/NMS

Percentage of transactions effected without 84% 81% 60%
brokerage commissions

FISCAL YEAR FISCAL YEAR FISCAL YEAR
VALUE + GROWTH FUND ENDED 12/31/99 ENDED 12/31/98 ENDED 12/31/97
- -------------------- -------------- -------------- --------------
<S> <C> <C> <C>
Percentage of total transactions involving 72% 63% 58%
brokerage commissions

Dollar amount of commissions $1,449,199 $2,283,182 $2,286,747

Percentage (dollar amount) paid to 3.7% (54,071.66) 6.19%($139,451) 5.2%($118,446)
RS&Co./BARS/NMS

Percentage of brokerage transactions effected 0.7% 4% 3%
through RS&Co./BARS/NMS

Percentage of transactions effected without 28% 37% 42%
brokerage commissions

FISCAL YEAR FISCAL YEAR FISCAL YEAR
GLOBAL NATURAL RESOURCES FUND ENDED 12/31/99 ENDED 12/31/98 ENDED 12/31/97
- -------------------- -------------- -------------- --------------
<S> <C> <C> <C>
Percentage of total transactions 95% 91% 82%
involving brokerage commissions

Dollar amount of commissions $417,511 $271,072 $416,574

Percentage (dollar amount) paid to 4.06% ($16,947) 0.4%($1,000) 0.3%($1,120)
RS&Co./BARS/NMS

Percentage of brokerage transactions 3% 1% 0.4%
effected through RS&Co./BARS/NMS

Percentage of transactions effected 5% 9% 18%
without brokerage commissions

FISCAL YEAR FISCAL YEAR FISCAL YEAR
MIDCAP OPPORTUNITIES FUND ENDED 12/31/99 ENDED 12/31/98 ENDED 12/31/97
- -------------------- -------------- -------------- --------------
<S> <C> <C> <C>
Percentage of total transactions involving 40% 65% 55%
brokerage commissions

Dollar amount of commissions $3,474,942 $1,758,597 $1,869,262

Percentage (dollar amount) paid to 6.46% ($224,520) 8.0%($139,293) 10%($186,869)
RS&Co./BARS/NMS

Percentage of brokerage transactions effected 7% 7% 9%
through RS&Co./BARS/NMS

B-29
<PAGE>

Percentage of transactions effected without 60% 35% 45%
brokerage commissions

FISCAL YEAR FISCAL YEAR FISCAL YEAR
INFORMATION AGE FUND-Registered Trademark- ENDED 12/31/99 ENDED 12/31/98 ENDED 12/31/97
- ------------------------ -------------- -------------- --------------
<S> <C> <C> <C>
Percentage of total transactions involving 24% 28% 24%
brokerage commissions

Dollar amount of commissions $839,765 $260,603 $339,164

Percentage (dollar amount) paid to 5.75% ($48,282.48) 6.4%($16,610) 5.9%($19,850)
RS&Co./BARS/NMS

Percentage of brokerage transactions effected 0.2% 4% 3%
through RS&Co./BARS/NMS

Percentage of transactions effected without 76% 72% 76%
brokerage commissions

MONTH FISCAL YEAR FISCAL YEAR
RS INTERNET AGE FUND-TM-(1) ENDED 12/31/99 ENDED 12/31/98 ENDED 12/31/97
- ------------------------ -------------- -------------- --------------
<S> <C> <C> <C>
Percentage of total transactions involving 18% - -
brokerage commissions

Dollar amount of commissions $157,238 - -

Percentage (dollar amount) paid to 5.51% ($8,659) - -
RS&Co./BARS/NMS

Percentage of brokerage transactions effected 9% - -
through RS&CO./BARS/NMS

Percentage of transactions effected without 82% - -
brokerage commissions

FISCAL YEAR FISCAL YEAR FISCAL YEAR
MICROCAP FUND ENDED 12/31/99 ENDED 12/31/98 ENDED 12/31/97
- ------------- -------------- -------------- --------------
<S> <C> <C> <C>
Percentage of total transactions involving 7% 6% 6%
brokerage commissions

Dollar amount of commissions $410,057 $56,235 $62,898

Percentage (dollar amount) paid to RS&Co./BARS/NMS 7.43% ($30,457) 2.39%($1,332) 0%

Percentage of brokerage transactions effected 8% 0% 0%
through RS&Co./BARS/NMS

Percentage of transactions effected without 93% 94% 94%
brokerage commissions

FISCAL YEAR FISCAL YEAR FISCAL YEAR
PARTNERS FUND ENDED 12/31/99 ENDED 12/31/98 ENDED 12/31/97
- ------------- -------------- -------------- --------------
<S> <C> <C> <C>
Percentage of total transactions involving brokerage 87% 80% 81%
commissions

B-30
<PAGE>

Dollar amount of commissions $319,537 $594,245 $599,656

Percentage (dollar amount) paid to RS&Co./BARS/NMS 4.5% ($14,627) 0%($0) 0.5%($2,965)

Percentage of brokerage transactions effected through 3% 0% 0.4%
RS&Co./BARS/NMS

Percentage of transactions effected without brokerage 13% 20% 19%
commissions
</TABLE>

(1) Shares of RS Internet Age Fund-TM- were first offered for sale to the
public on December 1, 1999.

THE FUNDS' DISTRIBUTION PLAN

Each of the Funds has adopted a Distribution Plan under Rule 12b-l of
the 1940 Act (the "Plan"). Pursuant to the Plan, each Fund may pay to the
Fund's distributor fees, for services the distributor renders and costs and
expenses it incurs in connection with the promotion and distribution of the
Fund's shares, at an annual rate of 0.25% of the Fund's average daily net
assets. Such expenses may include, but are not limited to, costs of
advertising and promoting the sale of shares of the Funds and payments to
dealers, financial institutions, advisers, or other firms. They also include
the distributor's overhead expenses attributable to the distribution of each
Fund's shares, which may include, for example, expenses for office space,
communications, and salaries of the distributor personnel, and any other of
the distributor's expenses attributable to the distribution of the Funds'
shares.

Affiliates of RSIM, L.P. provide certain services to Provident in respect of
the promotion of the shares of the Funds. In return for those services,
Provident pays to these affiliates a portion of the payments received by
Provident under the Plan. The Plan is a "compensation" plan.

Provident makes payments, from amounts paid to it under the Plan, to dealers,
financial institutions, advisers and other firms in respect of shareholder
accounts in each of the Funds. In addition, Provident retains from amounts paid
to it under the Plan $8,000 a month in compensation for its services as
distributor. The balance of the amounts paid to it under the Plan are currently
paid by it to RSIM, L.P.

RECENT PAYMENTS UNDER THE FUNDS' DISTRIBUTION PLAN*.

<TABLE>
<CAPTION>
THE CONTRARIAN FUND-TM- DISTRIBUTION FEES
<S> <C>
Year ended 12/31/97 $6,816,512
Year ended 12/31/98 $1,050,953
Year ended 12/31/99 $ 313,537

DIVERSIFIED GROWTH FUND
Year ended 12/31/97 $ 161,523
Year ended 12/31/98 $ 181,969
Year ended 12/31/99 $ 273,575

EMERGING GROWTH FUND
Year ended 12/31/97 $ 569,136
Year ended 12/31/98 $ 706,777
Year ended 12/31/99 $3,028,974

GLOBAL NATURAL RESOURCES FUND
Year ended 12/31/97 $ 359,714
Year ended 12/31/98 $ 126,725
Year ended 12/31/99 $ 700,465

MIDCAP OPPORTUNITIES FUND
Year ended 12/31/97 $ 742,070
Year ended 12/31/98 $ 608,595
Year ended 12/31/99 $ 470,308

B-31
<PAGE>

THE INFORMATION AGE FUND-Registered Trademark-
Year ended 12/31/97 $ 308,650
Year ended 12/31/98 $ 293,961
Year ended 12/31/99 $ 512,717

RS INTERNET AGE FUND-TM-(1)
Year ended 12/31/99 $ 13,775

MICROCAP GROWTH FUND
Year ended 12/31/97 $ 105,123
Year ended 12/31/98 $ 274,092
Year ended 12/31/99 $ 210,694

PARTNERS FUND
Year ended 12/31/97 $ 514,757
Year ended 12/31/98 $ 297,791
Year ended 12/31/99 $ 81,774

VALUE + GROWTH FUND
Year ended 12/31/97 $1,876,469
Year ended 12/31/98 $1,750,301
Year ended 12/31/99 $1,642,971
</TABLE>

* Distribution fees were paid to Edgewood Services, Inc., the Funds'
distributor until December 31, 1998 ("Edgewood").

(1) Shares of RS Internet Age Fund-TM- were first offered for sale to the
public on December 1, 1999.

RECENT PAYMENTS UNDER THE FUNDS' CLASS C DISTRIBUTION PLAN*(1):

<TABLE>
<CAPTION>
THE CONTRARIAN FUND-TM- DISTRIBUTION FEES
<S> <C>
4/14/97 - 12/31/97 $20,977
Year ended 12/31/98 $18,507
Year ended 12/31/99 $1,166

DIVERSIFIED GROWTH FUND
9/10/97 - 12/31/97 $478
Year ended 12/31/98 $5,057
Year ended 12/31/99 $2,225

EMERGING GROWTH FUND
5/8/97 - 12/31/97 $811
Year ended 12/31/98 $4,433
Year ended 12/31/99 $2,939

GLOBAL NATURAL RESOURCES FUND
7/30/97 - 12/31/97 $48
Year ended 12/31/98 $263
Year ended 12/31/99 $68

B-32
<PAGE>

MIDCAP OPPORTUNITIES FUND
5/9/97 - 12/31/97 $3,140
Year ended 12/31/98 $12,533
Year ended 12/31/99 $4,590

THE INFORMATION AGE FUND-Registered Trademark-
7/11/97 - 12/31/97 $167
Year ended 12/31/98 $1,029
Year ended 12/31/99 $399

MICROCAP GROWTH FUND
6/18/97 - 12/31/97 $2,755
Year ended 12/31/98 $9,744
Year ended 12/31/99 $1,159

PARTNERS FUND
4/14/97 - 12/31/97 $4,068
Year ended 12/31/98 $4,414
Year ended 12/31/99 $247

VALUE + GROWTH FUND
5/28/97 - 12/31/97 $2,570
Year ended 12/31/98 $10,753
Year ended 12/31/99 $3,654
</TABLE>

*Distribution fees were paid to Edgewood Services, Inc., the Funds' distributor
until December 31, 1998 ("Edgewood").

(1)The Distribution Plan adopted in respect of the Funds' Class C shares (the
"Class C Plan") was in effect through April 1999. The Class C Plan provided for
payments by each Fund from the assets attributable to the Funds' Class C shares
at an annual rate of up to 1.00% (although each of the Funds' had limited
payments under the Class C Plan to an annual rate of 0.75% of a Fund's average
daily net assets attributable to its Class C shares). Affiliates of RSIM, L.P.
received substantially all of the payments paid under the Class C Plan.

RECENT CONTINGENT DEFERRED SALES CHARGES ("CDSC") RECEIVED FOR CLASS C
SHARES(2):

CDSCs were received during fiscal 1997, 1998 and 1999 in the following amounts:

<TABLE>
<CAPTION>
THE CONTRARIAN FUND-TM- CDSC PAID
<S> <C>
4/14/97 - 12/31/97 $5,351.73
Year ended 12/31/98 $18,057.11
Year ended 12/31/99 $ 0

DIVERSIFIED GROWTH FUND
9/10/97 - 12/31/97 $45.32
Year Ended 12/31/98 $344.44
Year ended 12/31/99 $727.47

B-33
<PAGE>

EMERGING GROWTH FUND
5/8/97 - 12/31/97 $108.62
Year ended 12/31/98 $2,563.77
Year ended 12/31/99 $474.145

GLOBAL NATURAL RESOURCES FUND
7/30/97 - 12/31/97 $32.13
Year ended 12/31/98 $0
Year ended 12/31/99 $0

MIDCAP OPPORTUNITIES FUND
5/9/97 - 12/31/97 $105.01
Year ended 12/31/98 $2,154.00
Year ended 12/31/99 $1,946.83

THE INFORMATION AGE FUND-Registered Trademark-
7/11/97 - 12/31/97 $34
Year ended 12/31/98 $2,105.76
Year ended 12/31/99 $38.39

MICROCAP GROWTH FUND
6/18/97 - 12/31/97 $438.82
Year ended 12/31/98 $2,579.04
Year ended 12/31/99 $353.81

PARTNERS FUND
4/14/97 - 12/31/97 $958.57
Year ended 12/31/98 $1,543.46
Year ended 12/31/99 $0.26

VALUE + GROWTH FUND
5/28/97 - 12/31/97 $4,958.15
Year ended 12/31/98 $3,006.03
Year ended 12/31/99 $10.14
</TABLE>

(2)Class C shares were subject to a 1.00% contingent deferred sales charge
("CDSC") if redeemed within one year after purchase. Affiliates of RSIM, L.P.
received substantially all of the proceeds of any CDSC imposed on redemption of
shares.

HOW NET ASSET VALUE IS DETERMINED

Each Fund determines the net asset value per share once daily, as of 4:30
p.m. eastern time, on each day the New York Stock Exchange (the "Exchange") is
open. The Exchange is closed Saturdays, Sundays, New Year's Day, Martin Luther
King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, the Independence Day
(observed), Labor Day, Thanksgiving, and Christmas.

Securities for which market quotations are readily available are valued
using the last reported sale price or, if no sales are reported (as in the case
of some securities traded over-the-counter), at the mean between the closing bid
and asked prices, except that certain U.S. Government securities are stated at
the mean between the last reported bid and asked prices. Short-term investments
having remaining maturities of 60 days or less are stated at amortized cost,
which approximates market value. All other securities and assets are valued at
their fair value following procedures approved by the Trustees.

B-34
<PAGE>

Reliable market quotations are not considered to be readily available for
long-term corporate bonds and notes, certain preferred stocks, or certain
foreign securities. These investments are stated at fair value on the basis of
valuations furnished by pricing services, which determine valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.

If any securities held by a Fund are restricted as to resale, their fair
value is determined in accordance with the guidelines and procedures adopted by
the Trust's Board of Trustees. The fair value of such securities is generally
determined as the amount which a Fund could reasonably expect to realize from an
orderly disposition of such securities over a reasonable period of time. The
valuation procedures applied in any specific instance are likely to vary from
case to case. However, consideration is generally given to the financial
position of the issuer and other fundamental analytical data relating to the
investment and to the nature of the restrictions on disposition of the
securities (including any registration expenses that might be borne by the Fund
in connection with such disposition). In addition, specific factors are also
generally considered, such as the cost of the investment, the market value of
any unrestricted securities of the same class (both at the time of purchase and
at the time of valuation), the size of the holding, the prices of any recent
transactions or offers with respect to such securities, and any available
analysts' reports regarding the issuer.

Generally, trading in certain securities (such as foreign securities) is
substantially completed each day at various times prior to the close of the
Exchange. The values of these securities used in determining the net asset value
of a Fund's shares are computed as of such times. Also, because of the amount of
time required to collect and process trading information as to large numbers of
securities issues, the values of certain securities (such as convertible bonds
and U.S. Government securities) are determined based on market quotations
collected earlier in the day at the latest practicable time prior to the close
of the Exchange. Occasionally, events affecting the value of such securities may
occur between such times and the close of the Exchange which will not be
reflected in the computation of a Fund's net asset value. If events materially
affecting the value of such securities occur during such period, then these
securities will be valued at their fair value following procedures approved by
the Trustees.

TAXES

Each Fund intends to qualify each year and elect to be taxed as a regulated
investment company under Subchapter M of the United States Internal Revenue Code
of 1986, as amended (the "Code").

As a regulated investment company qualifying to have its tax liability
determined under Subchapter M, a Fund would not be subject to federal income tax
on any of its net investment income or net realized capital gains that are
distributed to shareholders.

In order to qualify as a "regulated investment company," a Fund must, among
other things, (a) derive at least 90% of its gross income from dividends,
interest, payments with respect to securities loans, gains from the sale or
other dispositions of stock, securities, or foreign currencies, and other income
(including gains from options, futures, or forward contracts) derived with
respect to its business of investing in such stock, securities, or currencies
and (b) diversify its holdings so that, at the close of each quarter of its
taxable year, (i) at least 50% of the value of its total assets consists of
cash, cash items, U.S. Government securities, and other securities limited
generally with respect to any one issuer to not more than 5% of the total assets
of the Fund and not more than 10% of the outstanding voting securities of such
issuer, and (ii) not more than 25% of the value of its assets is invested in the
securities of any issuer (other than U.S. Government securities). In order to
receive the favorable tax treatment accorded regulated investment companies and
their shareholders, moreover, a Fund must in general distribute with respect to
each taxable year at least 90% of the sum of its taxable net investment income,
its net tax-exempt income, and the excess, if any, of net short-term capital
gains over net long-term capital gains.

An excise tax at the rate of 4% will be imposed on the excess, if any, of
each Fund's "required distribution" over its actual distributions in any
calendar year. Generally, the "required distribution" is 98% of the Fund's
ordinary income for the calendar year plus 98% of its capital gain net income
recognized during the one-year period ending on October 31 (or December 31, if
the Fund so elects) plus undistributed amounts from prior years. Each Fund
intends to make distributions sufficient to avoid imposition of the excise tax.
Distributions declared by a Fund during October, November, or December to
shareholders of record on a date in any such month and paid by the Fund during
the following January will be treated for federal tax purposes as paid by the
Fund and received by shareholders on December 31 of the year in which declared.

B-35
<PAGE>

With respect to investment income and gains received by a Fund from sources
outside the United States, such income and gains may be subject to foreign taxes
which are withheld at the source. Thus, a Fund's yield on foreign investments
would be decreased by such taxes. The effective rate of foreign taxes to which a
Fund will be subject depends on the specific countries in which its assets will
be invested and the extent of the assets invested in each such country and
therefore cannot be determined in advance.

If a Fund engages in hedging transactions, including hedging transactions
in options, futures contracts, and straddles, or other similar transactions, it
will be subject to special tax rules (including constructive sale,
mark-to-market, straddle, wash sale, and short sale rules), the effect of which
may be to accelerate income to the Fund, defer losses to the Fund, cause
adjustments in the holding periods of the Fund's securities, convert long-term
capital gains into short-term capital gains, or convert short-term capital
losses into long-term capital losses. These rules could therefore affect the
amount, timing and character of distributions to shareholders. Each Fund will
endeavor to make any available elections pertaining to such transactions in a
manner believed to be in the best interests of the Fund.

A Fund's transactions in foreign currencies, foreign currency-denominated
debt securities and certain foreign currency options, futures contracts and
forward contracts (and similar instruments) may give rise to ordinary income or
loss to the extent such income or loss results from fluctuations in the value of
the foreign currency concerned.

A Fund's transactions in foreign currency-denominated debt instruments and
its hedging activities will likely produce a difference between its book income
and its taxable income. This difference may cause a portion of the Fund's
distributions of book income to constitute returns of capital for tax purposes
or require the Fund to make distributions exceeding book income in order to
permit the Fund to continue to qualify, and be taxed under Subchapter M of the
Code, as a regulated investment company.

Under federal income tax law, a portion of the difference between the
purchase price of zero-coupon securities in which a Fund has invested and their
face value ("original issue discount") is considered to be income to the Fund
each year, even though the Fund will not receive cash interest payments from
these securities. This original issue discount (imputed income) will comprise a
part of the net investment income of the Fund which must be distributed to
shareholders in order to maintain the qualification of the Fund as a regulated
investment company and to avoid federal income tax at the level of the Fund.
Thus, a Fund could be required at times to liquidate other investments in order
to satisfy its distribution requirements.

A Fund generally is required to withhold and remit to the U.S. Treasury 31%
of the taxable dividends and other distributions paid to non-corporate
shareholders who fail to furnish the Fund with a correct taxpayer identification
number, who have underreported dividends or interest income, or who fail to
certify to the Fund that they are not subject to such withholding. An
individual's taxpayer identification number is his or her social security
number. Tax-exempt shareholders are not subject to these back-up withholding
rules so long as they furnish the Fund with a proper certification.

Non-resident alien individuals, foreign corporations and certain other
foreign entities generally will be subject to a U.S. withholding tax at a rate
of 30% on a Fund's distributions from its ordinary income and the excess of its
net short-term capital gain over its net long-term capital loss, unless the tax
is reduced or eliminated by an applicable tax treaty. Distributions from the
excess of the Fund's net capital gain received by such shareholders and any gain
from the sale or other disposition of shares of the Fund generally will not be
subject to U.S. Federal income taxation, provided that non-resident alien status
has been certified by the shareholder. Different U.S. tax consequences may
result if the shareholder is engaged in a trade or business in the United
States, is present in the United States for a sufficient period of time during a
taxable year to be treated as a U.S. resident, or fails to provide any required
certifications regarding status as a non-resident alien investor. Foreign
shareholders should consult their tax advisors regarding the U.S. and foreign
tax consequences of an investment in the Fund.

The IRS recently revised its regulations affecting the application to
foreign investors of the back-up withholding and withholding tax rules described
above. The new regulations will generally be effective for payments made on or
after January 1, 2000 (although transition rules will apply). In some
circumstances, the new rules will increase the certification and filing
requirements imposed on foreign investors in order to qualify for exemption from
31% back-up withholding tax and for reduced withholding tax rates under income
tax treaties. Foreign investors in each Fund should consult their tax advisors
with respect to the potential application of these new regulations.

The foregoing is a general and abbreviated summary of the applicable
provisions of the Code and related regulations currently in

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<PAGE>

effect. For the complete provisions, reference should be made to the pertinent
Code sections and regulations. The Code and regulations are subject to change by
legislative or administrative actions. Dividends and distributions also may be
subject to local, state and foreign taxes. Shareholders are urged to consult
their tax advisers regarding specific questions as to federal, state, local, and
foreign taxes. The foregoing discussion relates solely to U.S. federal income
tax law. Non-U.S. investors should consult their tax advisers concerning the tax
consequences of ownership of shares of the Fund. Statements as to the tax status
of distributions will be mailed annually.

HOW PERFORMANCE IS DETERMINED

STANDARDIZED PERFORMANCE INFORMATION

Average annual total return of a class of shares of a Fund for one-, five-,
and ten-year periods (or for such shorter periods as shares of that class of
shares of the Fund have been offered) is determined by calculating the actual
dollar amount of investment return on a $1,000 investment in that class of
shares at the beginning of the period, and then calculating the annual
compounded rate of return which would produce that amount. Total return for a
period of one year or less is equal to the actual return of that class of shares
during that period. Total return calculations assume reinvestment of all Fund
distributions at net asset value on their respective reinvestment dates. Total
return may be presented for other periods.

At times, RS Investment Management may reduce its compensation or assume
expenses of the Fund in order to reduce the Fund's expenses. Any such fee
reduction or assumption of expenses would increase the Fund's total return
during the period of the fee reduction or assumption of expenses.

All data are based on past performance and do not predict future results.

PERFORMANCE INFORMATION

Yield and total return data for a Fund's shares may from time to time be
included in advertisements about the Funds. A Fund's "yield" is calculated by
dividing the annualized net investment income per share during a recent 30-day
period by the net asset value per share on the last day of that period. "Total
return" for one-, five-, and ten-year periods, and for the life of a Fund,
through the most recent calendar quarter represents the average annual
compounded rate of return (or, in the case of a period of one year or less, the
actual rate of return) on an investment of $1,000 in the Fund's shares. Total
return may also be presented for other periods. Quotations of yield or total
return for a period when an expense limitation was in effect will be greater
than if the limitation had not been in effect. A Fund's performance may be
compared to various indices. Information may be presented in advertisements
about a Fund describing the background and professional experience of the Fund's
investment advisor or any portfolio manager.

All data are based on a Fund's past investment results and do not predict
future performance. Investment performance, which will vary, is based on many
factors, including market conditions, the composition of the Fund's portfolio,
and the Fund's investments expenses. Investment performance also often reflects
the risks associated with a Fund's investment objective and policies. These
factors should be considered when comparing a Fund's investment results to those
of other mutual funds and other investment vehicles.

The average annual total returns of the shares of each of the Funds for the
periods indicated through December 31, 1999 are set forth below.

<TABLE>
<CAPTION>
<S> <C>
THE CONTRARIAN FUND-TM-
Year ended December 31, 1999 38.31%
Five years ended December 31, 1999 0.88%
From inception (6/30/93) through December 31, 1999 1.54%

B-37
<PAGE>

DIVERSIFIED GROWTH FUND
Year ended December 31, 1999 150.21%
From inception (8/1/96) through December 31, 1999 57.08%

EMERGING GROWTH FUND
Year ended December 31, 1999 182.56%
Five years ended December 31, 1999 44.36%
Ten years ended December 31, 1999 28.52%

MIDCAP OPPORTUNITIES FUND
Year ended December 31, 1999 56.12%
From inception (7/12/95) through December 31, 1999 27.62%

INFORMATION AGE FUND-Registered Trademark-
Year ended December 31, 1999 126.22%
From inception (11/15/95) through December 31, 1999 42.43%

RS INTERNET AGE FUND-TM-
From inception (12/1/99) to 12/31/99 21.80%

MICROCAP GROWTH FUND
Year ended December 31, 1999 56.66%
From inception (8/15/96) through December 31, 1999 26.86%

PARTNERS FUND
Year ended December 31, 1999 3.73%
From inception (7/12/95) through December 31, 1999 6.50%

VALUE + GROWTH
Year ended December 31, 1999 28.43%
Five years ended December 31, 1999 24.85%
From inception (5/12/92) through December 31, 1999 23.43%
</TABLE>

NON-STANDARDIZED TOTAL RETURN INFORMATION

From time to time, a Fund may present non-standardized total return
information, in addition to standardized performance information, which may
include such results as the growth of a hypothetical $10,000 investment in the
Fund's shares, and cumulative total return. Cumulative total return is
calculated in a similar manner to average annual total return, except that the
results are not annualized. Each calculation assumes that all dividends and
distributions are reinvested at net asset value on the reinvestment dates during
the period.

INDICES AND PUBLICATIONS

A Fund may compare its performance with that of appropriate indices such as
the Standard & Poor's Composite Index of 500 stocks ("S&P 500"), Standard &
Poor's MidCap 400 Index ("S&P 400"), the NASDAQ Industrial Index, the NASDAQ
Composite Index, Russell 2000 Index, or other unmanaged indices so that
investors may compare such results with those of a group of unmanaged
securities. The S&P 500, the S&P 400, the NASDAQ Industrial Index, the NASDAQ
Composite Index, and the Russell 2000 Index are unmanaged groups of common
stocks traded principally on national securities exchanges and the over the
counter market, as the case may be. A Fund may also, from time to time, compare
its performance to other mutual funds with similar investment objectives and to
the industry as a whole, as quoted by rating services and publications, such as
Lipper Analytical Services, Inc., Morningstar Mutual Funds, Forbes, Money, and
Business Week.

B-38
<PAGE>

In addition, one or more portfolio managers or other employees of an
Adviser may be interviewed by print media, such as THE WALL STREET JOURNAL or
BUSINESS WEEK, or electronic news media, and such interviews may be reprinted or
excerpted for the purpose of advertising regarding the Fund.

RELATIVE VOLATILITY - BETA

From time to time a Fund may present a statistical measure of the
volatility of a Fund's performance relative to the volatility of the performance
of the S&P 500. A Fund calls this comparative measure its "beta." Beta is
approximate, because it is statistical, and is not necessarily indicative of
future fund performance volatility. Thus, if a Fund's portfolio volatility
perfectly represents that of the S&P 500, a Fund's beta would be 1.0. If a
Fund's beta is greater than 1.0, a Fund's portfolio would tend to represent a
greater market risk than the S&P 500 because a Fund's portfolio would tend to be
more sensitive to movements in the securities markets. For example, if a Fund's
beta is 1.1, a Fund's performance would tend to vary approximately 10% more than
would the performance of the S&P 500. If a Fund's beta is 0.9, a Fund's
performance would tend to vary 10% less than the performance of the S&P 500. The
correlation is not usually exact because, depending upon the diversification of
a Fund's portfolio, a beta of less than 1.0 may indicate only that the portfolio
is less sensitive to market movements, not that the Fund's portfolio has low
overall risk.

The beta included with any presentation of the Fund's performance data will be
calculated according to the following formula:

_ _
R R
( R R -n F M)
n FT MT
sum
B = --------------------
n 2 _ 2
sum ( R - nR )
MT m

Where: n = number of months measured

RFT = rate of return on the Fund in month T

RMT = rate of return on the market index, I.E., the S&P 500,
in month T
-
RF = arithmetic average monthly rate of return of the Fund
-
RM = arithmetic average monthly rate of return on the market
index, I.E., the S&P 500

ADDITIONAL INFORMATION

TRANSFER AGENT AND CUSTODIAN

State Street Bank and Trust Company, c/o National Financial Data Services,
at P.O. Box 419717, Kansas City, MO 64141, serves as the Funds' transfer agent
and dividend-paying agent ("Transfer Agent"). PFPC Trust Company ("PFPC Trust"),
400 Bellevue Parkway, Wilmington, DE 19809, serves as the Funds' custodian
("Custodian"). As Custodian, PFPC Trust and subcustodians approved by the Board
of Trustees hold the securities in the Funds' portfolios and other assets for
safekeeping. The Transfer Agent and Custodian do not participate in making
investment decisions for the Funds.

INDEPENDENT ACCOUNTANTS

PricewaterhouseCoopers LLP, 555 California Street, San Francisco,
California 94104, are the Trust's independent accountants, providing audit
services, tax return review, and other tax consulting services and assistance
and consultation in connection with the review of various Securities and
Exchange Commission filings.

B-39
<PAGE>

SHAREHOLDER LIABILITY

Under Massachusetts law, shareholders could, under certain circumstances,
be held personally liable for the obligations of the Trust. However, the
Agreement and Declaration of Trust disclaims shareholder liability for acts or
obligations of the Trust and requires that notice of such disclaimer be given in
each agreement, obligation, or instrument entered into or executed by the Trust
or the Trustees. The Agreement and Declaration of Trust provides for
indemnification out of a Fund's property for all loss and expense of any
shareholder held personally liable for the obligations of that Fund. Thus the
risk of a shareholder's incurring financial loss on account of shareholder
liability is limited to circumstances in which the Fund would be unable to meet
its obligations.

B-40
<PAGE>

APPENDIX A

DESCRIPTION OF SECURITIES RATINGS

This Appendix describes ratings applied to corporate bonds by Standard & Poor's
("S&P"), Moody's Investors Service, Inc. ("Moody's") and Fitch Investor
Services, Inc. ("Fitch").

S&P'S RATINGS

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

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

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

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

Debt rated 'BB,' 'B,' 'CCC,' 'CC,' and 'C' is regarded as having predominantly
speculative characteristics with respect to capacity to pay interest and repay
principal. 'BB' indicates the least degree of speculation and 'C' the highest.
While such debt will likely have some quality and protective characteristics,
these are outweighed by large uncertainties of major exposures to adverse
markets.

BB: Debt rated 'BB' has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial, or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. The 'BB'
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied 'BBB-' rating.

B: Debt rated 'B' has a greater vulnerability to default but currently has the
capacity to meet interest payments and principal repayments. Adverse business,
financial, or economic conditions will likely impair capacity or willingness to
pay interest and repay principal. The 'B' rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied 'BB' or 'BB-'
rating.

CCC: Debt rated 'CCC' has a currently identifiable vulnerability to default, and
is dependent upon favorable business, financial, and economic conditions to meet
timely payment of interest and repayment of principal. In the event of adverse
business, financial, or economic conditions, it is not likely to have the
capacity to pay interest and repay principal. The 'CCC' rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
'B' or 'B-' rating.

CC: The rating 'CC' typically is applied to debt subordinated to senior debt
that is assigned an actual or implied 'CCC' rating.

C: The rating 'C' typically is applied to debt subordinated to senior debt that
is assigned an actual or implied 'CCC-' rating. The 'C' rating may be used to
cover a situation where a bankruptcy petition has been filed, but debt service
payments are continued.

CI: The rating 'CI' is reserved for income bonds on which no interest is being
paid.

D: Debt rated 'D' is in payment default. The 'D' rating category is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless S&P believes that such payments
will be made during such grace period. The 'D' rating will also be used upon the
filing of a bankruptcy petition if debt service payments are jeopardized.

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<PAGE>

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

MOODY'S RATINGS

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

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

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

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

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

B: Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.

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

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

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

Moody's applies numerical modifiers, 1, 2, and 3, in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.

FITCH RATINGS

AAA: Bonds considered to be investment grade and of the highest credit quality.
The obligor has an exceptionally strong ability to pay interest and repay
principal, which is unlikely to be affected by reasonably foreseeable events.

AA: Bonds considered to be investment grade and of very high credit quality. The
obligor's ability to pay interest and repay principal is very strong, although
not quite as strong as bonds rated 'AAA.' Because bonds rate in the 'AAA' and
'AA' categories are not significantly vulnerable to foreseeable future
developments, short-term debt of these issuers is generally rated 'F-1+.'

B-42
<PAGE>

A: Bonds considered to be investment grade and of high credit quality. The
obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.

BBB: Bonds considered to be investment grade and of satisfactory credit quality.
The obligor's ability to pay interest and repay principal is considered to be
adequate. Adverse changes in economic conditions and circumstances, however, are
more likely to have adverse impact on these bonds, and therefore impair timely
payment. The likelihood that the rating of these bonds will fall below
investment grade is higher than for bonds with higher ratings.

BB: Bonds are considered to be speculative. The obligor's ability to pay
interest and repay principal may be affected over time by adverse economic
changes. However, business and financial alternatives can be identified which
could assist the obligor in satisfying its debt service requirements.

B: Bonds are considered highly speculative. While bonds in this class are
currently meeting debt service requirements, the probability of continued timely
payment of principal and interest reflects the obligor=s limited margin of
safety and the need for reasonable business and economic activity throughout the
life of the issues.

CCC: Bonds have certain identifiable characteristics that, if not remedied, may
lead to default. The ability to meet obligations requires an advantageous
business and economic environment.

CC: Bonds are minimally protected. Default in payment of interest and/or
principal seems probable.

C: Bonds are in imminent default in payment of interest or principal.

DDD, DD, and D: Bonds in default on interest and/or principal payments. Such
bonds are extremely speculative and should be valued on the basis of their
ultimate recovery value in liquidation or reorganization of the obligor. "DDD"
represents the highest potential for recovery on these bonds, and "D" represents
the lowest potential for recovery.

Note: Fitch ratings (other than the "AAA," "DDD," "DD," or "D" categories) may
be modified by the addition of a plus (+) or minus (-) sign to show relative
position of a credit within the rating category.

FINANCIAL STATEMENTS

The financial statements, financial highlights, and Independent Auditors'
reports included in the Annual Reports for the Funds' fiscal year ended December
31, 1999 and filed electronically on April 6, 2000 (File No. 811-5159; Accession
No. 000912057-00-016286) are incorporated by reference into this Statement of
Additional Information.

B-43