ACHIEVEMENT FUNDS TRUST, 497, 1996-06-04

ACHIEVEMENT FUNDS TRUST
497, 1996-06-04

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<PAGE> 1

THE ACHIEVEMENT FUNDS TRUST

-- EQUITY FUND
-- BALANCED FUND
-- INTERMEDIATE TERM BOND FUND
-- SHORT TERM BOND FUND
-- SHORT TERM MUNICIPAL BOND FUND
-- IDAHO MUNICIPAL BOND FUND

THE ACHIEVEMENT FUNDS TRUST (the "Trust") is a mutual fund that offers separate
classes of shares of beneficial interest in the six portfolios listed above (the
"Portfolios"). This Prospectus relates solely to the Institutional class of
shares of the Portfolios (the "shares") which are designed to offer financial
institutions ("shareholders") a convenient means of investing their own funds or
funds for which they act in a fiduciary, agency or custodial capacity in one or
more professionally managed portfolios of securities. Each Portfolio also offers
Retail Class A shares that differ from the Institutional shares with respect to
distribution costs, sales charges and dividends.

THE TRUST'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, INCLUDING ANY OF THE FIRST SECURITY BANKS OR ANY OF
THEIR AFFILIATES OR CORRESPONDENTS. THE TRUST'S SHARES ARE NOT FEDERALLY
INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
FEDERAL RESERVE BOARD OR ANY OTHER GOVERNMENT AGENCY. INVESTMENT IN THE SHARES
INVOLVES RISK, INCLUDING POSSIBLE LOSS OF PRINCIPAL.

This Prospectus sets forth concisely the basic information about the Trust and
each Portfolio that a prospective investor should know before investing.
Investors are advised to read this Prospectus and retain it for future
reference. A Statement of Additional Information dated June 1, 1996 has been
filed with the Securities and Exchange Commission (the "SEC") and is available
without charge through the Distributor, SEI Financial Services Company, by
written request addressed to the Distributor at 680 East Swedesford Road, Wayne,
PA 19087-1658 or by calling 1-800-472-0577. The Statement of Additional
Information is incorporated into this Prospectus by reference.

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

JUNE 1, 1996
<PAGE> 2

SUMMARY

The Achievement Funds Trust (the "Trust") is an open-end management investment
company which offers shares of beneficial interest to provide a convenient way
to invest in professionally managed portfolios of securities. This Summary
provides basic information about the Institutional class of shares of Trust's
Equity Fund, Balanced Fund, Intermediate Term Bond Fund, Short Term Bond Fund,
Short Term Municipal Bond Fund and Idaho Municipal Bond Fund (each a "Portfolio"
and collectively the "Portfolios"). Each of the Portfolios is diversified,
except for the Idaho Municipal Bond Fund, which is a non-diversified portfolio
of securities.

INVESTMENT OBJECTIVES OF THE PORTFOLIOS

The EQUITY FUND seeks to provide long-term capital appreciation with current
income as a secondary consideration in selecting portfolio securities. The
BALANCED FUND seeks to provide a total return (both income and capital
appreciation) consistent with prudent investment risk. The INTERMEDIATE TERM
BOND FUND seeks income consistent with prudent investment risk and maintenance
of appropriate liquidity. The SHORT TERM BOND FUND seeks to preserve principal
value and maintain a high degree of liquidity while providing current income.
The SHORT TERM MUNICIPAL BOND FUND seeks to provide as high a level of current
income that is exempt from Federal income tax as is consistent with preservation
of capital. The IDAHO MUNICIPAL BOND FUND seeks to provide as high a level of
current income exempt from Federal and Idaho state income taxes as is consistent
with the preservation of capital. There is no assurance that any Portfolio will
meet its investment objective. See "INVESTMENT OBJECTIVES AND POLICIES" and
"DESCRIPTION OF CERTAIN PERMITTED INVESTMENTS."

RISK FACTORS INVOLVED WITH AN INVESTMENT IN THE PORTFOLIOS

The net asset value of the shares of the Portfolios will fluctuate with changes
in the prices of their underlying portfolio securities. Values of fixed income
securities and, correspondingly, share prices of Portfolios that invest in such
securities tend to vary inversely with interest rates and may be affected by
other market and economic factors as well. Common stocks in which the Equity
Fund and the Balanced Fund invest may be more volatile and may fluctuate in
value more than other types of investments. The Idaho Municipal Bond Fund is a
non-diversified portfolio that invests primarily in Idaho Municipal Securities.
There are other risks associated with the ownership of shares of a mutual fund.
See "RISK FACTORS" and "DESCRIPTION OF CERTAIN PERMITTED INVESTMENTS."

THE ADVISER

First Security Investment Management, Inc. serves as investment adviser (the
"Adviser") to the Portfolios. See "THE ADVISER."

THE ADMINISTRATOR

SEI Fund Resources serves as administrator of the Trust. See "THE
ADMINISTRATOR."
<PAGE> 3

THE TRANSFER AGENT

DST Systems, Inc. serves as transfer agent and dividend disbursing agent for the
Trust. See "GENERAL INFORMATION--Transfer Agent."

THE DISTRIBUTOR

SEI Financial Services Company serves as distributor of the Trust's shares. See
"THE DISTRIBUTOR."

THE CUSTODIAN

CoreStates Bank, N.A., serves as custodian for the cash, securities and other
assets of the Trust. See "GENERAL INFORMATION--Custodian."

PURCHASE, EXCHANGE OR REDEMPTION OF SHARES

Purchases, exchanges or redemptions of shares may be made on any day during
which the New York Stock Exchange is open for business (a "Business Day"). A
purchase, exchange or redemption order must be placed with the Distributor and
will be executed at a per share price equal to the net asset value per share
next determined after the receipt of the purchase, exchange or redemption order.
Orders must be placed prior to 4:00 p.m. Eastern time for the order to be
effective on that day. The minimum initial investment is $500,000, which minimum
amount may be waived by the Distributor. There is no minimum amount for
subsequent purchases of shares. Net asset value is determined as of the close of
trading on the New York Stock Exchange (presently 4:00 p.m. Eastern time) on
each Business Day. See "PURCHASE AND REDEMPTION OF SHARES."

PAYMENT OF DIVIDENDS

Substantially all of the net investment income (exclusive of capital gains) of
each Portfolio is distributed in the form of periodic dividends. Any net capital
gain is distributed at least annually. Distributions are paid in cash unless the
shareholder elects to take payment in another form. See "GENERAL
INFORMATION--Dividends."
<PAGE> 4

ANNUAL OPERATING EXPENSES
(as a % of net assets)

The following table summarizes the expenses incurred by the Portfolios based on
the Trust's most recent fiscal year.

(1) The Trust's investment adviser (the "Adviser") has agreed to waive, on a
voluntary basis, a portion of its fee, and the management fee shown reflects
that voluntary waiver. The Adviser reserves the right to terminate its fee
waiver at any time at its sole discretion without notice to current or
prospective shareholders. Absent such fee waiver, the management fee would
be 0.74% for the Equity Fund and the Balanced Fund, and 0.60% for the
Intermediate Term Bond Fund, the Short Term Bond Fund, the Short Term
Municipal Bond Fund and the Idaho Municipal Bond Fund.
(2) Other Expenses of the Portfolios include all expenses except nonrecurring
account fees, brokerage commissions and other capital items and management
fees. Although no fee is imposed in connection with share redemptions, a $15
fee is charged in connection with a wire transfer of redemption proceeds.
The Trust's administrator (the "Administrator") has agreed to waive, on a
voluntary basis, a portion of its fee chargeable to the Short Term Municipal
Bond Fund and the Idaho Municipal Bond Fund, and the administration fee
shown for those Portfolios reflects that voluntary fee waiver. The
Administrator reserves the right to terminate its fee waiver at any time at
its sole discretion without notice to current or prospective shareholders.
Absent such fee waiver, the annual administration fee would be the greater
of 0.20% of net assets or $100,000 for the Short Term Municipal Bond Fund
and the Idaho Municipal Bond Fund.
(3) Absent the voluntary fee waivers described above, total estimated operating
expenses for the Institutional shares of the Portfolios stated as a
percentage of net assets would be as follows: the Equity Fund--1.13%; the
Balanced Fund--1.13%; the Intermediate Term Bond Fund--1.01%; the Short Term
Bond Fund--0.98%; the Short Term Municipal Bond Fund--1.30%; the Idaho
Municipal Bond Fund--1.35%.

EXAMPLE

The following example assumes that all dividends and distributions are
reinvested and that the percentage totals listed under "Annual Operating
Expenses" remain the same in the years shown. THE EXAMPLE SHOULD NOT BE
CONSIDERED A REPRESENTATION OF FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER
OR LESS THAN THOSE SHOWN.

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
An investor would pay the following expenses on a $1,000 investment, assuming a 5% annual
return and redemption at the end of each time period:
Equity Fund................................................ $ 9 $ 29 $ 50 $ 111
Balanced Fund.............................................. 9 29 50 111
Intermediate Term Bond Fund................................ 8 24 42 93
Short Term Bond Fund....................................... 8 24 42 93
Short Term Municipal Bond Fund............................. 8 24 42 93
Idaho Municipal Bond Fund.................................. 8 24 42 93
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
</TABLE>

The Annual Operating Expenses and Example presented above are designed to assist
an investor in understanding the various costs and expenses that an investor in
a Portfolio will bear directly or indirectly. For more complete descriptions of
the various costs and expenses, see "THE ADVISER" and "THE DISTRIBUTOR" in this
Prospectus. The information set forth in the Annual Operating Expenses and
Example relates only to the Institutional shares. Each Portfolio also offers
Retail Class A shares which are subject to the same expenses except that Retail
Class A shares bear additional distribution costs and sales charges.
<PAGE> 5

FINANCIAL HIGHLIGHTS

Shown below are per share data, ratios and supplemental data for the Trust's
fiscal year ended January 31, 1996. The financial information, for a share
outstanding for the year ended January 31, 1996, has been audited by Deloitte &
Touche LLP, independent accountants, whose report thereon was unqualified. This
information should be read in conjunction with the Trust's financial statements
and notes thereto, which are included in the Trust's Statement of Additional
Information. The Trust's financial statements for the year ended January 31,
1996, also appear, along with the report of Deloitte & Touche LLP, in the
Trust's 1996 Annual Report to shareholders. Additional performance information
is set forth in the 1996 Annual Report to shareholders and is available upon
request and without charge by calling 1-800-472-0577.

For a Share Outstanding Throughout the Year or Period

<TABLE>
<CAPTION>
EQUITY FUND BALANCED FUND
------------------------- -------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED
JANUARY JANUARY 31, JANUARY JANUARY 31,
31, 1996 1995(1)** 31, 1996 1995(1)**
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period....................... $ 10.24 $ 10.00 $ 10.20 $ 10.00
- ------------------------------------------------------------------------------------------------------------------
Net Investment Income...................................... 0.17 0.01 0.39 0.04
- ------------------------------------------------------------------------------------------------------------------
Dividends from Net Investment Income....................... (0.17) -- (0.39) --
- ------------------------------------------------------------------------------------------------------------------
Distributions from Capital Gains........................... (0.72) -- (0.42) --
- ------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gains on Investments............... 3.12 0.23 2.01 0.16
- ------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period............................. $ 12.64 $ 10.24 $ 11.79 $ 10.20
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
Total Return+.............................................. 32.55% 2.40%* 24.15% 2.00%*
- ------------------------------------------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000)............................ $150,957 $ 97,052 $147,357 $112,896
Ratio of Expenses to Average Net Assets.................... 0.90% 0.90% 0.90% 0.90%
Ratio of Expenses to Average Net Assets (Excluding
Waivers)................................................. 1.14% 1.26% 1.14% 1.26%
Ratio of Net Income to Average Net Assets.................. 1.43% 1.22% 3.48% 3.61%
Ratio of Net Income to Average Net Assets (Excluding
Waivers)................................................. 1.19% 0.86% 3.24% 3.25%
Portfolio Turnover Rate.................................... 103.85% 6.03% 59.74% 1.70%
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
* Returns are for the period indicated and have not been annualized.
** Ratios for the period have been annualized.
+ Returns do not reflect any sales load that may be applicable.
(1) Commenced operations on December 28, 1994.
</TABLE>
<PAGE> 6

<TABLE>
<CAPTION>
INTERMEDIATE TERM SHORT TERM
BOND FUND BOND FUND
------------------------- -------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED
JANUARY JANUARY 31, JANUARY JANUARY 31,
31, 1996 1995(1)** 31, 1996 1995(1)**
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period....................... $ 10.09 $ 10.00 $ 10.02 $ 10.00
- ------------------------------------------------------------------------------------------------------------------
Net Investment Income...................................... 0.71 0.05 0.67 0.04
- ------------------------------------------------------------------------------------------------------------------
Dividends from Net Investment Income....................... (0.70) (0.06) (0.65) (0.06)
- ------------------------------------------------------------------------------------------------------------------
Distributions from Capital Gains........................... -- -- -- --
- ------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gains on Investments............... 0.69 0.10 0.14 0.04
- ------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period............................. $ 10.79 $ 10.09 $ 10.18 $ 10.02
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
Total Return+.............................................. 13.62% 1.54%* 7.80% 0.79%*
- ------------------------------------------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000)............................ $115,307 $ 65,633 $ 75,632 $ 70,380
Ratio of Expenses to Average Net Assets.................... 0.75% 0.75% 0.75% 0.75%
Ratio of Expenses to Average Net Assets (Excluding
Waivers)................................................. 1.02% 1.13% 0.99% 1.13%
Ratio of Net Income to Average Net Assets.................. 6.14% 5.60% 6.11% 4.21%
Ratio of Net Income to Average Net Assets (Excluding
Waivers)................................................. 5.87% 5.22% 5.87% 3.83%
Portfolio Turnover Rate.................................... 85.16% 10.57% 83.64% 11.95%
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
* Returns are for the period indicated and have not been annualized.
** Ratios for the period have been annualized.
+ Returns do not reflect any sales load that may be applicable.
(1) Commenced operations on December 28, 1994.
</TABLE>
<PAGE> 7

<TABLE>
<CAPTION>
SHORT TERM MUNICIPAL BOND IDAHO MUNICIPAL
FUND BOND FUND
------------------------- -------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED
JANUARY JANUARY 31, JANUARY JANUARY 31,
31, 1996 1995(1)** 31, 1996 1995(1)**
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period....................... $ 10.01 $ 10.00 $ 10.13 $ 10.00
- ------------------------------------------------------------------------------------------------------------------
Net Investment Income...................................... 0.43 0.03 0.52 0.04
- ------------------------------------------------------------------------------------------------------------------
Dividends from Net Investment Income....................... (0.42) (0.03) (0.51) (0.04)
- ------------------------------------------------------------------------------------------------------------------
Distributions from Capital Gains........................... (0.05) -- (0.12) --
- ------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gains on Investments............... 0.26 0.01 0.78 0.13
- ------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period............................. $ 10.23 $ 10.01 $ 10.80 $ 10.13
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
Total Return+.............................................. 6.71% 0.43%* 12.68% 1.74%*
- ------------------------------------------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000)............................ $ 31,304 $ 33,682 $ 25,873 $ 25,894
Ratio of Expenses to Average Net Assets.................... 0.75% 0.75% 0.75% 0.75%
Ratio of Expenses to Average Net Assets (Excluding
Waivers)................................................. 1.30% 1.26% 1.35% 1.38%
Ratio of Net Income to Average Net Assets.................. 3.88% 3.67% 4.52% 4.21%
Ratio of Net Income to Average Net Assets (Excluding
Waivers)................................................. 3.33% 3.16% 3.92% 3.58%
Portfolio Turnover Rate.................................... 114.09% 11.80% 58.94% 5.66%
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
* Returns are for the period indicated and have not been annualized.
** Ratios for the period have been annualized.
+ Returns do not reflect any sales load that may be applicable.
(1) Commenced operations on December 28, 1994.
</TABLE>
<PAGE> 8

THE TRUST

THE ACHIEVEMENT FUNDS TRUST (the "Trust") is an open-end series management
investment company that offers shares of beneficial interest in separate
investment portfolios. Each Portfolio has two separate classes of shares,
Institutional and Retail Class A, which differ with respect to distribution
costs, sales charges and dividends. This Prospectus offers the Institutional
shares (the "shares") of the Trust's Equity Fund, Balanced Fund, Intermediate
Term Bond Fund, Short Term Bond Fund, Short Term Municipal Bond Fund and Idaho
Municipal Bond Fund. Each of the Portfolios are diversified, except for the
Idaho Municipal Bond Fund which is a non-diversified portfolio. The Trust has
also authorized the issuance of shares of beneficial interest in an additional
portfolio designated the Municipal Bond Fund, but the Trust has not commenced a
public offering of those shares. Additional information pertaining to the Trust
may be obtained by writing to SEI Financial Services Company, 680 East
Swedesford Road, Wayne, PA 19087 or by calling 1-800-472-0577.

INVESTMENT OBJECTIVES AND POLICIES

EQUITY FUND

INVESTMENT OBJECTIVE

The Equity Fund seeks to provide long-term capital appreciation with current
income as a secondary consideration in selecting portfolio securities.

INVESTMENT POLICIES

Under normal market conditions, the Equity Fund invests in a diversified
portfolio of common stocks (including American Depository Receipts ("ADRs") and
securities convertible into or exchangeable for common stock) traded on U.S.
national securities exchanges (including NASDAQ). The Adviser selects securities
for the Equity Fund using an investment strategy often characterized as "Growth
at a Price." Under this strategy, the Adviser purchases for the Equity Fund
securities of companies that have experienced growth in earnings provided that
the securities appear attractively priced based on proprietary valuation
methods. Generally, the Equity Fund will purchase securities of companies with
mid to large size market capitalization (over $100 million). If the Trust's
Adviser believes, however, that the securities of a company with a smaller
market capitalization have an attractive value, it may purchase such securities
for the Portfolio. Under normal conditions, the Equity Fund will invest at least
80% of its total assets in common stocks. The Equity Fund will not invest more
than 20% of its total assets in securities convertible into or exchangeable for
common stock. The Equity Fund may invest only in convertible debentures that
have received a rating of A or higher by Standard & Poor's Corporation ("S&P")
or A or higher by Moody's Investors Service ("Moody's") or are determined to be
of comparable quality by the Adviser at time of purchase.

The Equity Fund may purchase securities on a "when-issued" basis, may engage in
securities repurchase transactions and may borrow money in aggregate amounts not
in excess of 5% of its total assets. The Equity Fund may also write (sell)
covered call options.

In addition, under normal market conditions, the Equity Fund may invest up to
10% of its total assets in money market and U.S. equity index mutual funds.

For additional information regarding risks and permitted investments of the
Equity Fund, see "RISK FACTORS" and "DESCRIPTION OF CERTAIN PERMITTED
INVESTMENTS." For a description of ratings, see the "APPENDIX."

BALANCED FUND

INVESTMENT OBJECTIVE

The Balanced Fund seeks to provide total return (both income and capital
appreciation) consistent with prudent investment risk.
<PAGE> 9

INVESTMENT POLICIES

The Balanced Fund invests in a combination of equity and fixed income securities
and money market instruments. The Balanced Fund seeks total return in all market
conditions, with a special emphasis on minimizing declines in net asset value
during falling equity markets. The Balanced Fund invests primarily in equity
securities, intermediate maturity fixed income securities and money market
instruments.

Under normal market conditions, the Balanced Fund invests between 30-70% of its
total assets in a diversified portfolio of common stocks (including ADRs and
securities convertible into or exchangeable for common stock) traded on U.S.
national securities exchanges (including NASDAQ). The Adviser selects securities
for the Balanced Fund using an investment strategy often characterized as
"Growth at a Price." Under this strategy, the Adviser purchases for the Balanced
Fund securities of companies that have experienced growth in earnings provided
that the securities appear attractively priced based on proprietary valuation
methods. Generally, the Balanced Fund will purchase securities of companies with
mid to large size market capitalization (over $100 million). If the Adviser
believes, however, that the securities of a company with a smaller market
capitalization have an attractive value, it may purchase such securities for the
Portfolio. The Balanced Fund will not invest more than 20% of its total assets
in securities convertible into or exchangeable for common stock. The Balanced
Fund may invest only in convertible debentures that have received a rating of A
or higher by S&P or Moody's or are determined to be of comparable quality by the
Adviser at time of purchase. It is currently anticipated that the Balanced Fund
will invest on the average over time approximately 60% of its total assets in
the foregoing types of securities.

The Balanced Fund will, under normal market conditions, invest a minimum of 25%
of its total assets in fixed income securities, obligations issued by the U.S.
Government and its agencies and instrumentalities, zero coupon receipts
involving U.S. Treasury obligations and corporate bonds and debentures,
asset-backed securities, floating or variable rate corporate notes and Yankee
Bonds. The Portfolio may also invest in mortgage-backed securities (including
collateralized mortgage obligations), which are securities issued by government
sponsored entities, such as the Government National Mortgage Association, or by
private issuers that entitle the holder to a share of all interest and principal
payments from a pool of mortgage loans underlying the security. All of the
foregoing investment securities will be rated A or higher by S&P or by Moody's
at the time of purchase or determined to be of comparable quality by the Adviser
at the time of purchase. In the event the credit quality of these securities
declines below the applicable criteria, the Adviser may consider selling such
securities. The Balanced Fund's investments in mortgage-backed securities,
asset-backed securities, floating or variable rate corporate notes and Yankee
Bonds will not exceed 20% of the Balanced Fund's total assets. The fixed income
securities held by the Balanced Fund will have an aggregate average weighted
maturity of three to seven years and individual securities may have a maximum
maturity of twelve years.

In addition, the Balanced Fund may invest in money market instruments, including
money market and U.S. equity index mutual funds, securities issued or guaranteed
by the United States Government and its agencies or instrumentalities,
repurchase agreements, certificates of deposit or bankers' acceptances issued by
domestic banks or savings institutions with assets exceeding $2.5 billion at the
end of their most recent fiscal year and commercial paper rated, at the time of
purchase, in the top two categories by a national rating agency or determined to
be of comparable quality by the Adviser at time of purchase.

The Balanced Fund may purchase securities on a "when-issued" basis, may engage
in securities repurchase transactions and may borrow money in aggregate amounts
not in excess of 5% of its total assets. The Balanced Fund may also write (sell)
covered call options.
<PAGE> 10

For additional information regarding risks and permitted investments of the
Balanced Fund, see "RISK FACTORS" and "DESCRIPTION OF CERTAIN PERMITTED
INVESTMENTS." For a description of ratings, see the "APPENDIX."

INTERMEDIATE TERM BOND FUND

INVESTMENT OBJECTIVE

The Intermediate Term Bond Fund seeks income consistent with prudent investment
risk and maintenance of appropriate liquidity.

INVESTMENT POLICIES

The Intermediate Term Bond Fund's permitted investments consist of the following
debt securities: fixed income securities, obligations issued by the U.S.
Government and its agencies and instrumentalities, zero coupon receipts
involving U.S. Treasury obligations and corporate bonds and debentures,
asset-backed securities, floating or variable rate corporate notes and Yankee
Bonds. The Portfolio may also invest in mortgage-backed securities (including
collateralized mortgage obligations), which are securities issued by government
sponsored entities, such as the Government National Mortgage Association, or by
private issuers that entitle the holder to a share of all interest and principal
payments from a pool of mortgage loans underlying the security. All of the
foregoing investment securities will be rated A or higher by S&P or by Moody's
at the time of purchase or determined to be of comparable quality by the Adviser
at the time of purchase, and are considered by the Trust to be bonds. In the
event the credit quality of bonds purchased by the Intermediate Term Bond Fund
declines below the applicable criteria, the Adviser may consider selling such
securities. The Intermediate Term Bond Fund's investments in mortgagebacked
securities, asset-backed securities, floating or variable rate corporate notes
and Yankee Bonds will not exceed 20% of its total assets.

In addition, the Intermediate Term Bond Fund may invest in money market
instruments, including securities issued or guaranteed by the United States
Government and its agencies or instrumentalities, repurchase agreements,
certificates of deposit or bankers' acceptances issued by domestic banks or
savings institutions with assets exceeding $2.5 billion at the end of their most
recent fiscal year and commercial paper rated, at the time of purchase, in the
top two categories by a national rating agency or determined to be of comparable
quality by the Adviser at time of purchase. The Intermediate Term Bond Fund may
also invest up to 10% of its total assets in money market mutual funds.

The Portfolio will have an aggregate average weighted maturity of three to seven
years and individual securities held in the Portfolio may have a maximum
maturity of twelve years. By so limiting the maturity of its investments, the
Intermediate Term Bond Fund's assets are expected to experience less price
volatility in response to changes in interest rates than similar securities with
longer maturities.

The Intermediate Term Bond Fund may purchase securities on a "when-issued" basis
and reserves the right to engage in transactions involving standby commitments.
The Intermediate Term Bond Fund may also borrow money in aggregate amounts not
in excess of 5% of its total assets.

For additional information regarding risks and permitted investments of the
Intermediate Term Bond Fund, see "RISK FACTORS" and "DESCRIPTION OF CERTAIN
PERMITTED INVESTMENTS." For a description of ratings, see the "APPENDIX."

SHORT TERM BOND FUND

INVESTMENT OBJECTIVE

The Short Term Bond Fund seeks to preserve principal value and maintain a high
degree of liquidity while providing current income.
<PAGE> 11

INVESTMENT POLICIES

The Short Term Bond Fund's permitted investments consist of the following debt
securities: fixed income securities, obligations issued by the U.S. Government
and its agencies and instrumentalities, zero coupon receipts involving U.S.
Treasury obligations and corporate bonds and debentures, asset-backed
securities, floating or variable rate corporate notes and Yankee Bonds. The
Portfolio may also invest in mortgage-backed securities (including
collateralized mortgage obligations), which are securities issued by government
sponsored entities, such as the Government National Mortgage Association, or by
private issuers that entitle the holder to a share of all interest and principal
payments from a pool of mortgage loans underlying the security. All of the
foregoing investment securities will be rated A or higher by S&P or by Moody's
at the time of purchase or determined to be of comparable quality by the Adviser
at the time of purchase, and are considered by the Trust to be bonds. In the
event the credit quality of the bonds purchased by the Short Term Bond Fund
declines below the applicable criteria, the Adviser will consider selling such
securities. The Short Term Bond Fund's investments in mortgage-backed
securities, asset-backed securities, floating or variable rate corporate notes
and Yankee Bonds will not exceed 30% of its total assets.

In addition, the Short Term Bond Fund may invest in money market instruments,
including securities issued or guaranteed by the United States Government and
its agencies or instrumentalities, repurchase agreements, certificates of
deposit or bankers' acceptances issued by domestic banks or savings institutions
with assets exceeding $2.5 billion at the end of their most recent fiscal year
and commercial paper rated, at the time of purchase, in the top two categories
by a national rating agency or determined to be of comparable quality by the
Adviser at the time of purchase. The Short Term Bond Fund may also invest up to
10% of its total assets in money market mutual funds.

The Portfolio will have an aggregate average weighted maturity of not more than
two years and individual securities held in the Portfolio may have a maximum
maturity of three years. By so limiting the maturity of its investments, the
Short Term Bond Fund's assets are expected to experience less price volatility
in response to changes in interest rates than similar securities with longer
maturities.

The Short Term Bond Fund may purchase securities on a "when-issued" basis and
reserves the right to engage in transactions involving standby commitments. In
addition, the Short Term Bond Fund may borrow money in aggregate amounts not in
excess of 5% of its total assets.

For additional information regarding risks and permitted investments of the
Short Term Bond Fund, see "RISK FACTORS" and "DESCRIPTION OF CERTAIN PERMITTED
INVESTMENTS." For a description of ratings, see the "APPENDIX."

SHORT TERM MUNICIPAL BOND FUND

INVESTMENT OBJECTIVE

The Short Term Municipal Bond Fund seeks to provide as high a level of current
income that is exempt from Federal income tax as is consistent with preservation
of capital.

INVESTMENT POLICIES

Under normal market conditions, the Short Term Municipal Bond Fund will invest
at least 80% and up to 100% of its assets in municipal securities the interest
on which is exempt from Federal income taxes, based on opinions from bond
counsel for the issuers. This investment policy is a fundamental policy of the
Short Term Municipal Bond Fund. The issuers of these securities can be located
in all fifty states, the District of Columbia, Puerto Rico and other U.S.
territories and possessions. The Short Term Municipal Bond Fund will not invest
in securities the interest on which is a preference item for purposes of the
alternative minimum tax. The Short Term Municipal Bond Fund will generally
maintain a dollar-weighted average portfolio maturity of no more
<PAGE> 12

than three years and an individual security maturity of no more than four years.

The Short Term Municipal Bond Fund may purchase the following types of municipal
securities, but only if such securities, at the time of purchase, have the
requisite ratings set forth below or are of comparable quality as determined by
the Adviser: (i) municipal bonds rated A or better by S&P or Moody's; (ii)
municipal notes rated at least SP-1 by S&P or MIG-1 or VMIG-1 by Moody's; and
(iii) tax-exempt commercial paper rated at least A-1 by S&P or Prime-1 by
Moody's. In the event the credit quality of municipal securities owned by the
Short Term Municipal Bond Fund declines below the applicable criteria outlined
above the Adviser may consider selling such securities. The Short Term Municipal
Bond Fund may also purchase other types of tax exempt instruments as long as
they are of a quality equivalent to the bond, note or commercial paper ratings
stated above, and may invest up to 10% of its total assets in tax-exempt money
market mutual funds.

The Short Term Municipal Bond Fund may invest in variable and floating rate
obligations, may purchase securities on a "when-issued" basis, and reserves the
right to engage in transactions involving standby commitments. The Short Term
Municipal Bond Fund may also borrow money in aggregate amounts not in excess of
5% of its total assets.

For additional information regarding risks and permitted investments of the
Short Term Municipal Bond Fund, see "RISK FACTORS" and "DESCRIPTION OF CERTAIN
PERMITTED INVESTMENTS." For a description of ratings, see the "APPENDIX."

IDAHO MUNICIPAL BOND FUND

INVESTMENT OBJECTIVE

The Idaho Municipal Bond Fund seeks to provide as high a level of current income
exempt from Federal and Idaho state income taxes as is consistent with
preservation of capital.

INVESTMENT POLICIES

The Idaho Municipal Bond Fund will invest at least 65% of its total assets in
municipal securities the interest on which is exempt from Federal and Idaho
state income taxes, based upon opinions from bond counsel for the issuers. This
investment policy is a fundamental policy of the Idaho Municipal Bond Fund. The
Idaho Municipal Bond Fund may purchase the following types of municipal
securities of issuers located in Idaho, but only if such securities, at the time
of purchase, have the requisite ratings set forth below or are of comparable
quality as determined by the Adviser at the time of purchase: (i) municipal
bonds rated A or better by S&P or Moody's; (ii) municipal notes rated at least
SP-1 by S&P or MIG-1 or VMIG-1 by Moody's; and (iii) tax-exempt commercial paper
rated at least A-1 by S&P or Prime-1 by Moody's. The Adviser will consider
selling municipal securities owned by the Idaho Municipal Bond Fund for which
credit quality declines below the applicable criteria outlined above.

Under normal market conditions, the Idaho Municipal Bond Fund will invest at
least 80% of its total assets in securities the interest on which is not a
preference item for purposes of the alternative minimum tax. In addition, up to
20% of the Idaho Municipal Bond Fund's total assets may be invested in
tax-exempt money market funds and other municipal securities, the interest on
which is exempt from Federal income taxes, but not from Idaho income tax, based
upon opinions from bond counsel for the issuers. Such investments will be of the
same credit quality discussed above. The weighted average maturity of the Idaho
Municipal Bond Fund's securities will be twelve years or less.

The Idaho Municipal Bond Fund may invest in variable and floating rate
obligations, may purchase securities on a "when-issued" basis, and reserves the
right to engage in transactions involving standby commitments. The Idaho
Municipal Bond Fund may
<PAGE> 13

also borrow money in aggregate amounts not in excess of 5% of its total assets.

For additional information regarding risks and permitted investments of the
Idaho Municipal Bond Fund, see "RISK FACTORS" and "DESCRIPTION OF CERTAIN
PERMITTED INVESTMENTS." For a description of ratings, see the "APPENDIX."

GENERAL INVESTMENT POLICIES

For temporary defensive purposes when the Adviser determines that market
conditions warrant, (i) the Equity Fund, the Balanced Fund, the Intermediate
Term Bond Fund and the Short Term Bond Fund each may invest up to 100% of its
assets in money market instruments consisting of securities issued or guaranteed
by the United States Government, its agencies or instrumentalities, repurchase
agreements, certificates of deposit and bankers' acceptances issued by domestic
banks or savings and loan associations having net assets of at least $2.5
billion as of the end of their most recent fiscal year, and commercial paper
rated, at the time of purchase, in the top two categories by a national rating
agency or determined to be of comparable quality by the Adviser at the time of
purchase, and other long- and short-term debt instruments which are rated A or
higher by S&P or Moody's at the time of purchase, and may hold a portion of its
assets in cash reserves, and (ii) the Short Term Municipal Bond Fund and Idaho
Municipal Bond Fund may each invest up to 100% of its assets in tax-exempt money
market mutual funds and may hold a portion of its assets in cash reserves. To
the extent that any Portfolio is engaged in temporary defensive investments, it
will not be pursuing its investment objective.

The Advisor expects that under normal circumstances the annual turnover rate of
the investments of the Portfolios will be less than 100%. However, the annual
turnover rate of the investments of the Equity Fund and the Short Term Municipal
Bond Fund was in excess of 100% for the fiscal year ended January 31, 1996. That
rate of portfolio turnover will result in higher transaction costs for, and may
result in additional taxes for shareholders of, those Portfolios. See "Taxes".

In placing orders for the execution of transactions in portfolio securities, it
is the Trust's policy to obtain the best net results taking into account such
factors as price, size, type and difficulty of the transaction involved, a
brokerage firm's general execution and operational facilities and the firm's
risk in positioning the securities involved. The Portfolios may execute
brokerage or other agency transactions through the Distributor or its affiliates
or through affiliates of the Adviser for a commission in conformity with the
Investment Company Act of 1940 (the "1940 Act"), the Securities Exchange Act of
1934 and rules of the SEC. The Trust will not purchase portfolio securities from
any affiliated person acting as a principal except in conformity with the
regulations of the SEC.

RISK FACTORS

EQUITY SECURITIES (EQUITY FUND AND BALANCED FUND)--Investments in common stocks
are subject to market risks which may cause their prices to fluctuate.
Accordingly, the Equity Fund and the Balanced Fund may be more suitable for
long-term investors who can bear the risk of short-term fluctuations. Changes in
the value of portfolio securities will not necessarily affect cash income
derived from those securities but will affect the net asset value of a
Portfolio's shares.

FIXED INCOME SECURITIES (BALANCED FUND, INTERMEDIATE TERM BOND FUND, SHORT TERM
BOND FUND, SHORT TERM MUNICIPAL BOND FUND AND IDAHO MUNICIPAL BOND FUND)--The
market value of fixed income securities will change in response to interest rate
changes and other factors. During periods of falling interest rates, the value
of outstanding fixed income securities generally rises. Conversely, during
periods of rising interest rates, the value of such securities generally
declines. Moreover, while securities with longer maturities tend to produce
higher yields, the prices of longer maturity securities are also subject to
greater market fluctuations as a result of changes in interest rates. Changes by
<PAGE> 14

recognized agencies in the rating of any fixed income security and in the
ability of an issuer to make payments of interest and principal also affect the
value of these investments. Changes in the value of portfolio securities will
not necessarily affect cash income derived from those securities but will affect
the net asset value of a Portfolio's shares.

NON-DIVERSIFICATION (IDAHO MUNICIPAL BOND FUND)--Investment in the Idaho
Municipal Bond Fund, a non-diversified mutual fund, may entail greater risk than
would investment in a diversified investment company because the concentration
in securities of relatively few issuers could result in greater fluctuation in
the total market value of this Portfolio's holdings. Any economic, political or
regulatory developments affecting the value of the securities the Idaho
Municipal Bond Fund holds could have a greater impact on the total value of its
holdings than would be the case if the securities were diversified among more
issuers. The Idaho Municipal Bond Fund intends to comply with the
diversification requirements of Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code"). In accordance with these requirements, the Idaho
Municipal Bond Fund will not invest more than 5% of its total assets in any one
issuer; this limitation applies to 50% of its total assets.

COVERED CALL OPTIONS (EQUITY FUND AND BALANCED FUND)--Risks associated with
covered call option transactions include: (1) the success of a hedging strategy
may depend on an ability to predict movements in the prices of individual
securities, fluctuations in markets and movements in interest rates; (2) there
may be an imperfect correlation between the movement in prices of options and
the securities underlying them; (3) there may not be a liquid secondary market
for options; and (4) while the Portfolios will receive a premium when it writes
covered call options, they may not participate fully in a rise in the market
value of the underlying security.

IDAHO RISK FACTORS (IDAHO MUNICIPAL BOND FUND)--Certain risks are inherent in
the Idaho
Municipal Bond Fund's investments in Idaho municipal securities. The State of
Idaho currently has no outstanding general obligation debt. In the past, tax
anticipation notes have been issued by the State of Idaho that are backed by the
full faith and credit of the State of Idaho. Other securities issued by Idaho
state agencies are secured only by a pledge of revenues generated by investment
of bond proceeds in assets such as low-income housing loans or loans for the
construction of hospital facilities, and of reserve funds and other funds
created from bond proceeds. Timely payment of general obligation bonds issued by
political subdivisions of the State of Idaho is dependent upon the ability of
those entities to collect anticipated tax revenues, which may be affected by
general economic conditions and political changes. Timely payment of revenue
bonds issued by political subdivisions of the State of Idaho is dependent upon
collection of revenues from investments made with bond proceeds. A more complete
description of risks associated with Idaho municipal securities is contained in
the Statement of Additional Information.

OTHER PERMITTED INVESTMENTS--Certain of the other investments permitted for the
Portfolios pose special risks in addition to those risks described above. See
"DESCRIPTION OF CERTAIN PERMITTED INVESTMENTS--Repurchase Agreements," and
"--Standby Commitments," in this Prospectus and the description of permitted
investments in the Statement of Additional Information.

THERE IS NO ASSURANCE THAT ANY PORTFOLIO WILL ACHIEVE ITS INVESTMENT OBJECTIVE.

INVESTMENT LIMITATIONS

No Portfolio may:

1. With respect to 75% of its total assets, purchase securities of any issuer
(other than securities issued or guaranteed by the U.S. Government or any of its
agencies or instrumentalities) if, as a result, (a) more than 5% of the
Portfolio's total assets would be invested in the securities of such issuer, or
(b) the Portfolio would hold more than 10% of the outstanding securities of that
issuer, except that this
<PAGE> 15

limitation shall not be applicable to the Idaho Municipal Bond Fund.

2. Purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. Government or any of its agencies or instrumentalities)
if, as a result, more than 25% of the Portfolio's total assets would be invested
in the securities of companies whose principal business activities are in the
same industry.

3. Borrow money except for temporary or emergency purposes and then only in an
amount not exceeding 5% of the value of the total assets of the Portfolio. All
borrowings will be repaid before making additional investments and any interest
paid on such borrowings will reduce the income of the Portfolio.

The foregoing percentage limitations will apply at the time of the purchase of a
security or the time that money is borrowed. Additional investment limitations
are set forth in the Statement of Additional Information.

FUNDAMENTAL POLICIES

The investment objectives and investment limitations stated above are
fundamental policies of the Portfolios. Fundamental policies cannot be changed
with respect to a Portfolio without the consent of the holders of a majority of
that Portfolio's outstanding shares. The term "majority of the outstanding
shares" of a Portfolio as used in this Prospectus means the vote of (i) 67% or
more of a Portfolio's shares present at a meeting, if the holders of more than
50% of the outstanding shares of the Portfolio are present or represented by
proxy, or (ii) more than 50% of a Portfolio's outstanding shares, whichever is
less.

THE ADVISER

First Security Investment Management, Inc. ("FSIM" or the "Adviser") serves as
investment adviser to the Portfolios pursuant to an investment advisory
agreement (the "Advisory Agreement") with the Trust. The selection of FSIM to
serve as investment adviser to the Portfolios was approved by the Trustees and
the initial shareholder of each Portfolio. Under the Advisory Agreement, the
Adviser makes the investment decisions for the Portfolios and continuously
reviews, supervises and administers each Portfolio's investment program.

Under the Advisory Agreement, FSIM is entitled to receive a fee for the services
it provides, which is calculated daily and paid monthly, at an annual rate of
0.74% of the average daily net assets of the Equity Fund and the Balanced Fund,
and at an annual rate of 0.60% of the average daily net assets of the
Intermediate Term Bond Fund, the Short Term Bond Fund, the Short Term Municipal
Bond Fund and the Idaho Municipal Bond Fund. The Adviser has voluntarily waived
a portion of its fee for the Trust's current fiscal year so that total operating
expenses for the Equity Fund and the Balanced Fund will not exceed 0.90% and the
total operating expenses for the Intermediate Term Bond Fund, the Short Term
Bond Fund, the Short Term Municipal Bond Fund and Idaho Municipal Bond Fund will
not exceed 0.75%. The Adviser may revoke its fee waivers at any time at its sole
discretion without notice to any current or prospective shareholder. For the
fiscal year ended January 31, 1996, the Adviser received advisory fees in
amounts equal to the following annual percentage rates applied to the average
daily net assets of the Portfolios indicated: 0.51% for the Equity Fund; 0.51%
for the Balanced Fund; 0.34% for the Intermediate Term Bond Fund; 0.37% for the
Short Term Bond Fund; 0.17% for the Short Term Municipal Bond Fund; and 0.17%
for the Idaho Municipal Bond Fund.

FSIM, incorporated in August 1984, is a wholly-owned, indirect subsidiary of
First Security Corporation, a financial services organization and registered
bank holding company with headquarters in Utah. In addition to advising the
Portfolios, FSIM's advisory experience includes the management of various
collective and common investment funds and the provision of investment
management services to another investment company, banks and thrift
institutions, corporate and profit-sharing trusts, Taft-
<PAGE> 16

Hartley organizations, municipal and state retirement funds, charitable
foundations, endowments and individual investors throughout the United States.
FSIM had approximately $4.3 billion under management at December 31, 1995. FSIM
is registered as an investment adviser under the Investment Advisers Act of
1940, as amended, and has offices at 61 South Main Street, Salt Lake City, Utah
84111, at 119 North 9th Street, Boise, Idaho 83730 and at 219 Central Avenue NW,
3rd Floor, Albuquerque, New Mexico 87102.

The following individuals are responsible for the day-to-day management of the
Portfolios indicated.

EQUITY FUND--Sterling K. Jenson, CFA, is President of the Adviser and has been
responsible for the Equity Fund since inception. He joined the Adviser in 1990
as a Vice President and Senior Portfolio Manager, and has managed the First
Security Common Stock Fund and EB Common Stock Fund since December, 1994.

BALANCED FUND--Curtis J. Anderson, CFA, is a Vice President and Senior Portfolio
Manager of the Adviser and has been responsible for the Balanced Fund since
inception. He joined the Adviser in 1991 serving as Assistant Vice President and
Portfolio Manager. Prior to joining the Adviser, Mr. Anderson served as a Trust
Investment Officer with West One Trust Company from 1989 to 1991.

INTERMEDIATE TERM BOND FUND AND SHORT TERM BOND FUND--Mark L. Anderson is a Vice
President and Senior Portfolio Manager of the Adviser and has been responsible
for the Intermediate Term Bond Fund and Short Term Bond Fund since inception.
Mr. Anderson joined the Adviser in 1984 and has managed bond, money market,
balanced and equity portfolios since that time.

SHORT TERM MUNICIPAL BOND FUND AND IDAHO MUNICIPAL BOND FUND--James A. Schuck is
a Vice President and Senior Portfolio Manager of the Adviser and has been
responsible for the Short Term Municipal Bond Fund and Idaho Municipal Bond Fund
since inception. Mr. Schuck has been a Vice President and Senior Portfolio
Manager of the Adviser since 1984 and has managed collective investment funds
with investment objectives similar to those of the Short Term Municipal Bond
Fund and the Idaho Municipal Bond Fund since that time.

Banking laws and regulations, including the Glass-Steagall Act as currently
interpreted by the Board of Governors of the Federal Reserve System, prohibit a
bank holding company registered under the Bank Holding Company Act of 1956 or
any affiliate thereof from sponsoring, organizing, controlling, or distributing
the shares of a registered, open-end investment company continuously engaged in
the issuance of its shares, and prohibit banks generally from issuing,
underwriting, selling or distributing securities, but do not prohibit such a
bank holding company or affiliate from acting as investment adviser, transfer
agent, or custodian to such an investment company, or from purchasing shares of
such a company as agent for and upon the order of a customer, or from performing
any combination of such services. FSIM and the Trust believe that FSIM may
perform the advisory services for the Trust described in this Prospectus.
However, future changes in legal requirements relating to the permissible
activities of banks and their affiliates, as well as future interpretations of
present requirements, could prevent FSIM from continuing to perform investment
advisory services for the Trust.

If FSIM or any other service providers were prohibited from performing services
for the Trust, it is expected that the Board of Trustees of the Trust would
recommend to the Trust's shareholders that they approve new agreements with
another entity or entities qualified to perform such services and selected by
the Board.

THE ADMINISTRATOR

investment advisory services), accounting services, regulatory reporting, all
necessary office space, equipment, personnel and facilities, pursuant to an
administration agreement with the Trust (the "Administration Agreement"). For
these services, the Administrator is entitled to a fee from the Equity Fund, the
Balanced Fund, the Intermediate Term Bond Fund and the Short Term Bond Fund in
an amount which is calculated at an annual rate of 0.20% of their average daily
net assets. The Administrator is entitled to a fee from the Short Term Municipal
Bond Fund and the Idaho Municipal Bond Fund in an amount equal to the greater of
0.20% of their daily net assets or $100,000. The Administrator has voluntarily
agreed to waive a portion of its fee for the Short Term Municipal Bond Fund and
the Idaho Municipal Bond Fund. The Administrator reserves the right to terminate
its fee waiver for the Short Term Municipal Bond Fund and the Idaho Municipal
Bond Fund at any time at its sole discretion and without notice to any current
or prospective shareholder.

THE DISTRIBUTOR

SEI Financial Services Company (the "Distributor"), 680 East Swedesford Road,
Wayne, Pennsylvania, 19087, a wholly-owned subsidiary of SEI, serves as the
distributor for the Portfolios pursuant to a distribution agreement
("Distribution Agreement") with the Trust. The Distributor receives no fee for
its services in connection with distribution of the Institutional shares.
Financial institutions that are the record owners of shares for the account of
their customers may impose separate fees for account services to their
customers.

PURCHASE, EXCHANGE AND REDEMPTION OF SHARES

Financial institutions may acquire shares of the Portfolios for their own
account or as record owner on behalf of fiduciary, agency or custody accounts by
placing orders with the Distributor. Institutions that use certain SEI
proprietary systems may place orders electronically through those systems. State
securities laws may require banks and financial institutions purchasing shares
for their customers to register as dealers pursuant to state laws. Shares of
each Portfolio are offered only to residents of states in which the shares are
eligible for purchase.

Shares of each Portfolio may be purchased or redeemed on days during which the
New York Stock Exchange is open for business ("Business Days"). The minimum
initial investment by financial institutions purchasing shares is $500,000;
however the minimum investment may be waived at the Distributor's discretion. No
minimum amount is required for subsequent investments.

Shareholders who desire to purchase shares for cash must place their orders with
the Distributor prior to 4:00 p.m. Eastern time on any Business Day for the
order to be accepted on that Business Day. Financial institutions may impose an
earlier cut-off time for receipt of purchase orders directed through them to
allow for processing and transmittal of these orders to the Distributor for
effectiveness the same day. Cash payment for investments must be transmitted or
delivered in federal funds to the wire agent on the next Business Day following
the day the order is placed. The Trust reserves the right to reject a purchase
order when the Distributor determines that it is not in the best interest of the
Trust or its shareholders to accept such purchase order. Purchases will be made
in full and fractional shares of the Portfolios calculated to three decimal
places. The Trust will send shareholders a statement of shares owned after each
transaction.

The purchase price of shares is the net asset value next determined after a
purchase order is received and accepted by the Trust. The net asset value per
share of each Portfolio is determined by dividing the total market value of a
Portfolio's investments and other assets, less any liabilities, by the total
outstanding shares of that Portfolio. Net asset value per share is determined
daily as of the close of trading on the New York Stock Exchange (presently 4:00
p.m. Eastern time) on any Business Day in the manner described in the Statement
of Additional Information. Financial institutions which purchase shares for the
accounts of their customers may
<PAGE> 18

impose separate charges on these customers for account services.

An exchange between the Institutional class and the Retail Class A shares of any
Portfolio is generally not permitted, except that exchanges between the classes
will occur automatically should an investor in the Institutional class become
ineligible to purchase additional Institutional class shares. For example, an
automatic exchange would occur if an Institutional class investor receives a
distribution from a trust, and such investor would be investing individually
(and becomes a shareholder of record) rather than through a qualified account.
An exchange from the Institutional class to the Retail Class A shares of a
Portfolio will occur automatically when an Institutional class shareholder's
account falls below the $500,000 minimum balance. The Trust will provide thirty
days' notice of any such exchange. The exchange will take place at net asset
value, without the imposition of a sales load, fee or other charge. After the
exchange, the exchanged shares will be subject to all fees applicable to Retail
Class A shares. In the event that a shareholder declines to accept an automatic
exchange, and if the shareholder does not meet the requirements for investing in
Institutional class shares, the Trust reserves the right to redeem the shares
upon expiration of the thirty-day period. The Trust reserves the right to
require shareholders to complete an application or other documentation in
connection with the exchange.

Retail Class A shares of a Portfolio may be exchanged for Institutional Class
shares of the same Portfolio should the shareholder establish a trust, custodial
or money management relationship with a qualified institution.

To exchange shares held of record by a financial institution but beneficially
owned by a customer, the customer should contact the financial institution,
which will contact the Distributor and effect the exchange on behalf of the
customer. If an exchange request in good order is received by the Distributor by
4:00 p.m. Eastern time on any Business Day, the exchange will ordinarily be
effective on that day. Any shareholder or customer of a shareholder who wishes
to make an exchange must have received a current prospectus of the Portfolio
into which the exchange is being made before the exchange will be effected.

Each Portfolio anticipates earning income on its portfolio securities and other
investments in the form of interest income, dividends and capital gains. That
income, after payment of expenses, will be passed along to shareholders as
dividends or capital gain distributions. See "GENERAL INFORMATION--Dividends"
for a discussion of the dividend policy of each Portfolio. Such distributions to
shareholders will automatically be paid in cash, unless the shareholder makes a
different election with respect to such distributions.

Distributions of dividends and capital gains made by the Portfolios may be
invested in shares of one of the other Portfolios if shares of the other
Portfolio are available for sale. Such investments will be subject to initial
investment minimums, as well as additional purchase minimums. A shareholder
considering this distribution investment option should consider the differences
in investment objectives and policies of another Portfolio before making any
investment in such Portfolio. The Trust reserves the right to terminate this
distribution investment option without further notice to shareholders.

Shareholders who desire to redeem shares of a Portfolio must place their
redemption orders with the Distributor prior to 4:00 p.m. Eastern time on any
Business Day. The redemption price is the net asset value per share of the
Portfolio next determined after receipt by the Distributor of the redemption
order. Payment on redemption will be made as promptly as possible and, in any
event, within seven days after the redemption order is received.

Purchase, redemption and exchange orders may be placed by telephone. Neither the
Trust nor the Trust's transfer agent will be responsible for any loss,
liability, cost or expense for acting upon telephone instructions that it
reasonably believes to be genuine. The Trust and the Trust's transfer agent will
each employ reasonable procedures to confirm that instructions communicated by
telephone are genuine,
<PAGE> 19

including requiring a form of personal identification prior to acting upon
instructions received by telephone and recording telephone instructions. The
Trust or the Trust's transfer agent may be liable for losses resulting from
fraudulent or unauthorized instructions if it does not employ these procedures.
If market conditions are extraordinarily active, or other extraordinary
circumstances exist, and a shareholder experiences difficulties placing
redemption orders by telephone, the shareholder may wish to consider placing its
order by other means.

PERFORMANCE

GENERAL

From time to time the Portfolios may advertise yield and total return. The Short
Term Municipal Bond Fund and the Idaho Municipal Bond Fund each may also
advertise a "taxable equivalent yield." These figures are based on historical
earnings and are not intended to indicate future performance. No representation
can be made concerning actual future yields or returns. The yield of each
Portfolio refers to the income generated by a hypothetical investment in such
Portfolio over a thirty day period. This income is then "annualized," i.e., the
income over thirty days is assumed to be generated over one year and is shown as
a percentage of the investment.

A "taxable equivalent yield" is calculated by determining the yield that would
have been achieved on a fully taxable investment to produce the after-tax
equivalent of a Portfolio's yield, assuming certain rates of taxation for a
shareholder.

The total return of each Portfolio refers to the average compounded rate of
return on a hypothetical investment for designated time periods, assuming that
the entire investment is redeemed at the end of each period and assuming the
reinvestment of all dividend and capital gain distributions.

A Portfolio may periodically compare its performance to that of other mutual
funds tracked by mutual funds rating services (such as Lipper Analytical
Services, Inc.), financial and business publications and periodicals, broad
groups of comparable mutual funds or unmanaged indices which may assume
investment of dividends but generally do not reflect deductions for
administrative and management costs. A Portfolio may quote a service that ranks
mutual funds on the basis of risk-adjusted performance (such as Morningstar,
Inc.). A Portfolio may use long-term performance of appropriate capital markets
to demonstrate general long-term risk versus reward scenarios and could include
the value of a hypothetical investment in the appropriate capital markets. A
Portfolio may also quote financial and business publications and periodicals as
they relate to fund management, investment philosophy and investment techniques.

Each Portfolio may quote various measures of volatility and benchmark
correlation in advertising and may compare these measures to those of other
funds. Measures of volatility attempt to compare historical share price
fluctuations or total returns to a benchmark while measures of benchmark
correlation indicate how valid a comparative benchmark might be. Measures of
volatility and correlation are calculated using averages of historical data and
cannot be calculated precisely.

Additional performance information for the Portfolios is set forth in the
Trust's Annual Report to shareholders for its fiscal year ended January 31,
1996, which is available upon request and without charge by calling
1-800-472-0577.

TAXES

The following summary of federal income tax consequences is based on current tax
laws and regulations, which may be changed by legislative, judicial or
administrative action. No attempt has been made to present a detailed
explanation of the federal, state, or local income tax treatment of the
Portfolios or their shareholders. Accordingly, shareholders are urged to consult
their tax advisers regarding specific questions as to federal, state and local
income taxes. State and local tax consequences of an investment in
<PAGE> 20

the Portfolios may differ from the federal income tax consequences described
below. Additional information concerning taxes is set forth in the Statement of
Additional Information.

TAX STATUS OF THE PORTFOLIOS

Each Portfolio is treated as a separate entity for federal income tax purposes
and is not combined with the Trust's other portfolios. Each Portfolio intends to
qualify for the special tax treatment afforded regulated investment companies
("RICs") under Subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code"), so as to be relieved of federal income tax on investment company
taxable income and net capital gains (the excess of net long-term capital gains
over net short-term capital losses) distributed to Shareholders.

TAX STATUS OF DISTRIBUTIONS (EQUITY FUND, BALANCED FUND, INTERMEDIATE TERM BOND
FUND, AND SHORT TERM BOND FUND)

Each Portfolio intends to distribute substantially all of its net investment
income (including net short-term capital gains and realized market discounts)
and net capital gains to shareholders. Dividends from a Portfolio's investment
company taxable income are taxable to its shareholders as ordinary income
(whether received in cash or in additional shares) to the extent of the
Portfolio's earnings and profits. Dividends paid by a Portfolio to corporate
shareholders will qualify for the deduction for dividends received by
corporations to the extent of the dividends received by the Portfolio from
domestic corporations. However, the full amount of such dividends will be taken
into account in determining liability (if any) for corporate alternative minimum
tax. Distributions of net capital gains do not qualify for the corporate
dividends received deduction and are taxable to shareholders as long-term
capital gains, regardless of how long shareholders have held their shares and
regardless of whether the distributions are received in cash or in additional
shares. The Portfolios provide annual reports to shareholders of the federal
income tax status of all distributions.

The sale, exchange or redemption of Portfolio shares is a taxable transaction to
the shareholder.

TAX STATUS OF DISTRIBUTIONS (SHORT TERM MUNICIPAL BOND FUND AND IDAHO MUNICIPAL
BOND FUND)

Each Portfolio intends to distribute substantially all of its net investment
income (including net short-term capital gains and realized market discounts) to
shareholders. If, at the close of each quarter of its taxable year, at least 50%
of the value of a Portfolio's total assets consists of obligations the interest
on which is excludable from gross income, that Portfolio may distribute its net
tax-exempt interest income as "exempt-interest dividends" to its shareholders.
Exempt-interest dividends are excludable from a shareholder's gross income for
federal income tax purposes but may have certain collateral federal tax
consequences including alternative minimum tax consequences. In addition, the
receipt of exempt-interest dividends may cause persons receiving Social Security
or Railroad Retirement benefits to be taxable on a portion of such benefits. See
the Statement of Additional Information.

Current federal tax law limits the types and volume of bonds qualifying for the
federal income tax exemption of interest, which may have an effect on the
ability of a Portfolio to purchase sufficient amounts of tax-exempt securities
to satisfy the Code's requirements for the payment of exempt-interest dividends.

Any dividends paid out of net short-term capital gains and realized market
discounts or out of any income realized by a Portfolio on taxable securities
will be taxable to shareholders as ordinary income (whether received in cash or
in additional shares) to the extent of that Portfolio's earnings and profits and
will not qualify for the dividends-received deduction for corporate
shareholders. Distributions to shareholders of net capital gains of a Portfolio
also will not qualify for the corporate dividends-received deduction and will be
taxable to shareholders as long-term capital gain, whether received in cash or
additional shares, and regardless of how long a shareholder has held the shares.
<PAGE> 21

The Portfolios will report annually to shareholders the percentages of their net
investment income which are exempt from the regular federal income tax, which
constitute items of tax preference for purposes of the federal alternative
minimum tax, and which are fully taxable. In addition, the Idaho Municipal Bond
Fund will report annually to shareholders the percentages of its net investment
income which are exempt from Idaho corporate and personal income tax (discussed
below). The Portfolios will apply such percentages uniformly to all
distributions declared from net investment income during each report year. These
percentages may differ significantly from the actual percentages for any
particular day.

An investment in these Portfolios is not intended to constitute a balanced
investment program. Shares of the Short Term Municipal Bond Fund or the Idaho
Municipal Bond Fund would not be suitable for tax-exempt institutions and may
not be suitable for retirement plans qualified under Section 401 of the Code,
H.R. 10 plans and individual retirement accounts since such plans and accounts
generally qualify for deferral of taxes on income or gains and, therefore, not
only would not gain any additional benefit from the dividends of those
Portfolios being tax-exempt but also such dividends would be taxable when
distributed to the beneficiary.

ADDITIONAL FEDERAL TAX INFORMATION

Dividends declared by each Portfolio in October, November or December of any
year and payable to shareholders of record on a date in any such month will be
deemed to have been paid by the Portfolio and received by the shareholders on
December 31 of that year if paid by the Portfolio at any time during the
following January.

Each Portfolio intends to make sufficient distributions prior to the end of each
calendar year to avoid liability for federal excise tax.

Shareholders should consult their tax advisers concerning the state and local
tax consequences of investment in a Portfolio, which may differ from federal
income tax consequences described above.

IDAHO TAXES

Exempt-interest dividends that are paid by the Idaho Municipal Bond Fund will
not be subject to Idaho corporate and personal income taxes to the extent that
they are attributable to interest earned on municipal securities that is exempt
from Idaho state income taxes in the opinion of bond counsel for their issuers.

GENERAL INFORMATION

THE TRUST

The Trust was organized as an unincorporated business trust under the laws of
Massachusetts on December 16, 1988 pursuant to a Master Trust Agreement of that
date, which agreement was amended and restated on October 7, 1994 and was
further amended on December 1, 1994 (as further amended from time to time, the
"Trust Agreement").

The Trust currently offers shares of beneficial interest in six separate
portfolios. The Trust has also authorized the issuance of shares of beneficial
interest in an additional portfolio designated the Municipal Bond Fund, but the
Trust has not commenced a public offering of those shares. The Trust may issue
an unlimited number of shares of each of its portfolios. Each share is entitled
to such dividends and distributions out of income earned on the assets of such
portfolio as are declared in the discretion of the Trust's Board of Trustees.
When issued and paid for, shares will be fully paid and non-assessable by the
Trust and will have no preference, conversion or preemptive rights. The Trust
Agreement authorizes the Board of Trustees to classify or reclassify any shares
of any portfolio into one or more other portfolio and to create classes in such
portfolio. Each portfolio is divided into two classes of shares, the
Institutional and Retail Class A classes. Both classes of a Portfolio have a
common investment objective and investment limitations and policies. Shares of
the Institutional class are offered by this prospectus. Shares of the Retail
Class A class are offered through a separate prospectus.
<PAGE> 22

TRUSTEES OF THE TRUST

The management and affairs of the Trust are supervised by the Trustees under the
laws of Massachusetts. The Trustees supervise the business activities of the
Trust and have approved contracts under which, as described above, certain
companies provide essential management services to the Trust.

VOTING RIGHTS

All shares of the Trust have equal voting rights and will be voted in the
aggregate, and not by series or class, except where voting by series or class is
required by law or where the matter involved affects only one series or class.
The Trust is not required under Massachusetts law to hold annual meetings of
shareholders, but will hold shareholder meetings if required to do so by the
1940 Act. Special meetings may be called for specific Portfolios for purposes
such as changing fundamental policies or approving certain contracts.
Shareholders will be permitted to call a meeting of shareholders and will
receive assistance in communicating with other shareholders, for the purpose of
voting upon the removal of any Trustee as long as such shareholder request is in
writing and is signed by shareholders of record of no less than 10% of the
Trust's outstanding shares.

REPORTING

The Trust issues unaudited financial information semiannually and audited
financial statements annually. The Trust furnishes proxy statements and other
reports to shareholders of record.

SHAREHOLDER INQUIRIES

Shareholder inquiries should be directed to SEI Financial Services Company in
writing to 680 East Swedesford Road, Wayne, PA 19087 or by calling
1-800-472-0577.

DIVIDENDS

Substantially all of the net investment income (exclusive of capital gains) of
each Portfolio is distributed in the form of dividends that are declared and
paid quarterly by the Equity Fund, declared and paid monthly by the Balanced
Fund and declared daily and paid monthly by the Intermediate Term Bond Fund, the
Short Term Bond Fund, the Short Term Municipal Bond Fund and the Idaho Municipal
Bond Fund. Shareholders of record on the last Business Day of each month will be
entitled to receive the monthly dividend distribution, which is generally paid
on the 10th Business Day of the following month. If any net capital gains are
realized, they will be distributed by the Portfolios at least annually.

Shareholders automatically receive all income dividends and capital gains
distributions in cash, unless the shareholder has elected to take such payments
in another form. Shareholders may change their election by providing written
notice to the Transfer Agent at least 15 days prior to the change.

Dividends and distributions of a Portfolio are paid on a per-share basis. The
value of each share will be reduced by the amount of any such payment. If shares
are purchased shortly before the record date for a dividend or the distribution
of capital gains, a shareholder will pay the full price for the shares and
receive some portion of the price back as a taxable dividend or distribution.

THE TRANSFER AGENT

DST Systems, Inc., P.O. Box 419448, Kansas City, Missouri 64141-6448 (the
"Transfer Agent") acts as the transfer agent and dividend disbursing agent for
the Portfolios under a transfer agency agreement with the Trust.
<PAGE> 23

COUNSEL AND INDEPENDENT ACCOUNTANTS

Ballard Spahr Andrews & Ingersoll serves as counsel to the Trust. Deloitte &
Touche LLP serves as independent accountants of the Trust.

CUSTODIAN

CoreStates Bank, N.A., Broad and Chestnut Streets, P.O. Box 7618, Philadelphia,
PA 19101 (the "Custodian"), acts as custodian of the Trust. The Custodian holds
cash, securities and other assets of the Trust as required by the 1940 Act.

DESCRIPTION OF CERTAIN PERMITTED INVESTMENTS

BANKERS' ACCEPTANCES--Bankers' acceptances are bills of exchange or time drafts
drawn on and accepted by a commercial bank. Bankers' acceptances are used by
corporations to finance the shipment and storage of goods. Maturities are
generally six months or less.

CERTIFICATES OF DEPOSIT--Certificates of deposit are interest bearing
instruments with a specific maturity. They are issued by banks and savings and
loan institutions in exchange for the deposit of funds and normally can be
traded in the secondary market prior to maturity. Certificates of deposit with
penalties for early withdrawal will be considered illiquid.

COMMERCIAL PAPER--Commercial paper is a term used to describe unsecured
short-term promissory notes issued by banks, municipalities, corporations and
other entities. Maturities on these issues vary from a few to 270 days.

CONVERTIBLE SECURITIES--Convertible securities are corporate securities that are
exchangeable for a set number of another security at a prestated price.
Convertible securities typically have characteristics similar to both fixed
income and equity securities. Because of the conversion feature, the market
value of a convertible security tends to move with the market value of the
underlying stock. The value of a convertible security is also affected by
prevailing interest rates, the credit quality of the issuer, and any call
provisions.

COVERED CALL OPTIONS--A call option gives the purchaser of the option the right
to buy, and the writer of the option the obligation to sell, a specified
underlying security at any time during the option period. In a covered call
option, the writer of the option owns a sufficient amount of the underlying
securities to "cover" the option through delivery of the optioned securities
upon exercise of the option. The Equity Fund and Balanced Fund may write covered
call options as a means of increasing the yield of these portfolios and as a
means of providing limited protection against decreases in the market value of
portfolio securities.

EQUITY INDEX MUTUAL FUNDS--Equity index mutual funds are open-end investment
companies that structure their securities investments so that the performance of
the portfolio approximates the performance of a target equity securities index.

EQUITY SECURITIES--Equity securities include common stock, preferred stock and
other securities that are convertible to or grant the right to acquire common
stock or preferred stock.

FIXED INCOME SECURITIES--Fixed income securities are debt obligations bearing a
specified rate of interest during their term that are issued by the United
States government and its agencies and instrumentalities, corporations,
municipalities and other borrowers.

which means they are (i) rated, at the time of investment, by at least two
nationally recognized security rating organizations (one if it is the only
organization rating such obligation) in the highest rating category or, if
unrated, determined to be of comparable quality (a "first tier security"), or
(ii) rated according to the foregoing criteria in the second highest rating
category or, if unrated, determined to be of comparable quality ("second tier
security"). A security is not considered to be unrated if the issuer has
outstanding obligations of comparable priority and security that have a short-
term rating. In the case of taxable money market funds, investments in second
tier securities are subject to the further constraints in that (i) no more than
5% of a Fund's assets may be invested in second tier securities and (ii) any
investment in securities of any one such issuer is limited to the greater of 1%
of the Fund's total assets or $1 million. A taxable money market fund may also
hold more than 5% of its assets in first tier securities of a single issuer for
three "business days" (that is, any day other than a Saturday, Sunday or
customary business holiday).

MUNICIPAL SECURITIES--Municipal securities consist of (i) debt obligations
issued by or on behalf of public authorities for various public purposes,
including the construction of a wide range of public facilities such as
airports, bridges, highways, housing, mass transportation, schools, streets and
water and sewer works, the refunding of outstanding obligations, for general
operating expenses, and for lending such funds to other public institutions and
facilities, and (ii) certain private activity and industrial development bonds
issued by or on behalf of public authorities to obtain funds to provide for the
construction, equipment, repair or improvement of privately operated facilities.

Municipal securities include both municipal notes and municipal bonds. Municipal
notes include general obligation notes, tax anticipation notes, revenue
anticipation notes, bond anticipation notes, certificates of indebtedness,
demand notes and construction loan notes and participation interests in
municipal notes. Municipal bonds include general obligation bonds, revenue or
special obligation bonds, private activity and industrial development bonds and
participation interests in municipal bonds.

General obligation bonds are backed by the taxing power of the issuing
municipality. Revenue bonds are backed by the revenues of a project or facility
(tolls from a bridge, for example). Certificates of participation represent an
interest in an underlying obligation or commitment, such as an obligation issued
in connection with a leasing arrangement. Private activity bonds are bonds that
are issued by municipalities, the proceeds of which are used in an activity
considered a nonessential government function under the Internal Revenue Code,
which may include activities such as construction and operation of airports,
convention centers, auditoriums, sports facilities, hospitals and mass commuting
facilities. The payment of principal and interest on private activity and
industrial development bonds generally is dependent solely on the ability of a
facility's user to meet its financial obligations and the pledge, if any, of
real and personal property as security for such payment.

Economic, business, or political developments might affect all municipal
securities of a similar type. To the extent that a significant portion of the
Short Term Municipal Bond Fund's or Idaho Municipal Bond Fund's assets are
invested in municipal securities payable from revenue on similar projects, those
Portfolios will be subject to the peculiar risks presented by such projects to a
greater extent than it would be if its assets were not so invested. For example,
certain municipal securities may be obligations of issuers who rely in whole or
in part on ad valorem real property taxes as a source of revenue and legislation
may have the effect of limiting ad valorem taxes on real property or restricting
the ability of taxing entities to increase real property tax revenues. Municipal
securities that are payable only from the revenues derived from a particular
facility, such as a utility or housing project, may be adversely affected by
laws or regulations that make it more difficult for the particular facility to
generate revenues
<PAGE> 25

sufficient to pay such interest and principal, including laws and regulations
that limit the amount of fees, rates or other charges that may be imposed for
use of the facility or that increase competition among facilities of that type
or that limit or otherwise have the effect of reducing the use of such
facilities generally, thereby reducing the revenues generated by the particular
facility. If the payment of interest and principal on municipal securitie is
insured in whole or in part by a government created fund the municipal
securities may be adversely affected by laws or regulations that restrict the
aggregate insurance proceeds available for payment of principal and interest in
the event of a default on such securities. State and local tax revenues
generally mirror economic conditions and may be adversely affected by regional
or national recessions.

RECEIPTS--Receipts are sold as zero coupon securities which means that they are
sold at a substantial discount and redeemed at face value at their maturity date
without interim cash payments of interest or principal. The amount of this
discount accretes over the life of the security, and such accretion will
constitute the income earned on the security for both accounting and tax
purposes. Because of these features, such securities may be subject to greater
interest rate volatility than interest paying investments.

REPURCHASE AGREEMENTS--Repurchase agreements are agreements by which a Portfolio
obtains a security and simultaneously commits to return the security to the
seller at an agreed upon price on an agreed upon date within a number of days
from the date of purchase. The custodian will hold the security as collateral
for the repurchase agreement. A Portfolio bears a risk of loss in the event the
other party defaults on its obligations and the Portfolio is delayed or
prevented from exercising its right to dispose of the collateral or if the
Portfolio realizes a loss on the sale of the collateral. A Portfolio will enter
into repurchase agreements only with financial institutions deemed to present
minimal risk of bankruptcy during the term of the agreement based on established
guidelines. Repurchase agreements are considered loans under the 1940 Act.

STANDBY COMMITMENTS--Securities subject to standby commitments permit the holder
thereof to sell the securities at a fixed price prior to maturity. Securities
subject to a standby commitment may be sold at any time at the current market
price. However, unless the standby commitment was an integral part of the
security as originally issued, it may not be marketable or assignable;
therefore, the standby commitment would only have value to the Portfolio owning
the security to which it relates. In certain cases, a premium may be paid for a
standby commitment, which premium will have the effect of reducing the yield
otherwise payable on the underlying security. The Portfolios will limit standby
commitment transactions to institutions believed to present minimal credit risk.

U.S. GOVERNMENT AGENCIES--U.S. Government agency obligations are obligations
issued or guaranteed by agencies of the U.S. Government, including, among
others, the Federal Farm Credit Bank, the Federal Housing Administration and the
Small Business Administration, and obligations issued or guaranteed by
instrumentalities of the U.S. Government, including, among others, the Federal
Home Loan Mortgage Corporation, the Federal Land Banks and the U.S. Postal
Service. Some of these securities are supported by the full faith and credit of
the U.S. Treasury (e.g., Government National Mortgage Association), others are
supported by the right of the issuer to borrow from the Treasury (e.g., Federal
Farm Credit Bank), while still others are supported only by the credit of the
instrumentality (e.g., Federal National Mortgage Association). Guarantees of
principal by agencies or instrumentalities of the U.S. Government may be a
guarantee of payment at the maturity of the obligation so that in the event of a
default prior to maturity there might not be a market and thus no means of
realizing on the obligation prior to maturity. Guarantees as to the timely
payment of principal and interest do not extend to the value or yield of these
securities nor to the value of the Portfolio's shares.
<PAGE> 26

U.S. TREASURY OBLIGATIONS--U.S. Treasury obligations consist of bills, notes and
bonds issued by the U.S. Treasury and separately traded interest and principal
component parts of such obligations that are transferable through the Federal
book-entry system known as Separately Traded Registered Interest and Principal
Securities ("STRIPS").

For additional information regarding permitted investments see "Description of
Permitted Investments" in the Trust's Statement of Additional Information.
<PAGE> 27

APPENDIX

DESCRIPTION OF CORPORATE AND MUNICIPAL BOND RATINGS

Bonds rated AAA have the highest rating S&P assigns to a debt obligation. Such a
rating indicates an extremely strong capacity to pay principal and interest.
Bonds rated AA also qualify as high-quality debt obligations. Capacity to pay
principal and interest is very strong, and in the majority of instances they
differ from AAA issues only in small degrees.

Debt rated A by S&P 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. 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.

Bonds which are rated Aaa by Moody's 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 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. Bonds rated Aa by
Moody's are judged by Moody's to be of high quality by all standards. Together
with bonds rated Aaa, 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.

Bonds which are rated A by Moody's 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.

Bonds which are rated Baa by Moody's 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.

DESCRIPTION OF COMMERCIAL PAPER RATINGS

Commercial paper rated A by S&P is regarded by S&P as having the greatest
capacity for timely payment. Issues rated A are further refined by use of the
numbers 1+, 1, 2 and 3 to indicate the relative degree of safety. Issues rated
A-1+ are those with an "overwhelming degree" of credit protection. Those rated
A-1 reflect a "very strong" degree of safety regarding timely payment. Those
rated A-2 reflect a safety regarding timely payment but not as high as A-1.

Commercial paper issuers rated Prime-1 and Prime-2 by Moody's are judged by
Moody's to be of the two highest quality ratings on the basis of relative
repayment capacity.

DESCRIPTION OF MUNICIPAL NOTE RATINGS

An S&P note rating reflects the liquidity concerns and market access risks
unique to notes. Notes due in three years or less will likely receive a note
rating. Notes maturing beyond three years will most likely receive a long-term
debt rating. The following criteria will be used in making that assessment:

Amortization schedule (the larger the final maturity relative to other
maturities the more likely it will be treated as a note).
<PAGE> 28

Source of Payment (the more dependent the issue is on the market for its
refinancing the more likely it will be treated as a note).

The note rating symbol SP-1 reflects very strong or strong capacity to pay
principal and interest. Those issues determined to possess overwhelming safety
characteristics will be given a plus (+) description.

Moody's highest rating for state and municipal and other short-term notes is
MIG-1 and VMIG-1. Short-term municipal securities rated MIG-1 or VMIG-1 are of
the best quality. They have strong protection from established cash flows of
funds for their servicing or from established and broad-based access to the
market for refinancing or both.
<PAGE> 29

TABLE OF CONTENTS
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
Summary.......................................... 2
Financial Highlights............................. 5
The Trust........................................ 8
Investment Objectives and Policies............... 8
Risk Factors..................................... 13
Investment Limitations........................... 14
Fundamental Policies............................. 15
The Adviser...................................... 15
The Administrator................................ 16
The Distributor.................................. 17
Purchase, Exchange and Redemption of Shares...... 17
Performance...................................... 19
Taxes............................................ 19
General Information.............................. 21
Description of Certain Permitted Investments..... 23
Appendix......................................... 27
</TABLE>
<PAGE> 30

<TABLE>
<S> <C>
[SEI ACHIEVEMENT FUNDS LOGO]

THIS FUND IS OFFERED THE ACHIEVEMENT FUNDS
IN CONJUNCTION WITH THE ACHIEVEMENT FUNDS TRUST
THE ACHIEVEMENT FUNDS INSTITUTIONAL
(PORTFOLIOS OF CERTAIN PROSPECTUS
MUTUAL FUNDS) TO AFFORD EQUITY FUND
A CONVENIENT RANGE OF BALANCED FUND
INVESTMENT CHOICES INTERMEDIATE TERM BOND FUND
TO INVESTORS. SHORT TERM BOND FUND
SHORT TERM MUNICIPAL BOND FUND
IDAHO MUNICIPAL BOND FUND
JUNE 1, 1996
DISTRIBUTED BY
SEI FINANCIAL SERVICES COMPANY
680 EAST SWEDESFORD ROAD
WAYNE, PENNSYLVANIA 19087-1658
800-472-0577
ACH-F-003-03
</TABLE>
<PAGE> 31

THE ACHIEVEMENT FUNDS TRUST

-- EQUITY FUND
-- BALANCED FUND
-- INTERMEDIATE TERM BOND FUND
-- SHORT TERM BOND FUND
-- SHORT TERM MUNICIPAL BOND FUND
-- IDAHO MUNICIPAL BOND FUND

THE ACHIEVEMENT FUNDS TRUST (the "Trust") is a mutual fund that offers separate
classes of shares of beneficial interest in the six portfolios listed above (the
"Portfolios"). This Prospectus relates solely to the Retail Class A shares (the
"shares") of the Portfolios, a class of shares designed to offer investors
("shareholders") a convenient means of investing in one or more professionally
managed portfolios of securities through a participating dealer. Each Portfolio
also offers Institutional shares that differ from the Retail Class A shares with
respect to distribution costs, sales charges and dividends.

JUNE 1, 1996
<PAGE> 32

SUMMARY

The Achievement Funds Trust (the "Trust") is an open-end management investment
company which provides a convenient way to invest in professionally managed
portfolios of securities. This Summary provides basic information about the
Retail Class A shares of the Trust's Equity Fund, Balanced Fund, Intermediate
Term Bond Fund, Short Term Bond Fund, Short Term Municipal Bond Fund and Idaho
Municipal Bond Fund (each a "Portfolio," and collectively the "Portfolios").
Each of the Portfolios is diversified, except for the Idaho Municipal Bond Fund,
which is a non-diversified portfolio of securities.

INVESTMENT OBJECTIVES OF THE PORTFOLIOS

RISK FACTORS INVOLVED WITH AN INVESTMENT IN THE PORTFOLIOS

The net asset value of the shares of the Portfolios will fluctuate with changes
in the prices of their underlying portfolio securities. Values of fixed income
securities and, correspondingly, share prices of Portfolios that invest in such
securities, tend to vary inversely with interest rates and may be affected by
other market and economic factors as well. Common stocks in which the Equity
Fund and the Balanced Fund invest may be more volatile and may fluctuate in
value more than other types of investments. The Idaho Municipal Bond Fund is a
non-diversified portfolio that invests primarily in Idaho Municipal Securities.
There are other risks associated with the ownership of shares of a mutual fund.
See "RISK FACTORS" and "DESCRIPTION OF CERTAIN PERMITTED INVESTMENTS."

THE ADVISER

First Security Investment Management, Inc. serves as investment adviser (the
"Adviser") to the Portfolios. See "THE ADVISER."

THE ADMINISTRATOR

SEI Fund Resources serves as administrator of the Trust. See "THE
ADMINISTRATOR."

THE TRANSFER AGENT

DST Systems, Inc. serves as transfer agent and dividend disbursing agent for the
Trust. See "GENERAL INFORMATION--Transfer Agent."
<PAGE> 33

THE DISTRIBUTOR

SEI Financial Services Company serves as distributor of the Trust's shares. See
"THE DISTRIBUTOR."

THE CUSTODIAN

CoreStates Bank, N.A. serves as custodian for the cash, securities and other
assets of the Trust. See "GENERAL INFORMATION--Custodian."

PURCHASE, EXCHANGE OR REDEMPTION OF SHARES

Purchases, exchanges or redemptions of shares may be made on any day on which
the New York Stock Exchange is open for business (a "Business Day"). A purchase,
exchange or redemption order may be placed through a financial institution or a
broker dealer that has established a dealer agreement with the Distributor, or
directly with the Transfer Agent.

The Distributor has entered into an agreement with First Security Investor
Services, Inc. ("FSIS") authorizing FSIS to sell Portfolio shares as a
participating dealer. Representatives of FSIS may be contacted at:

First Security Investor Services
61 South Main Street
Salt Lake City, Utah 84111
(800) 574-6609

A purchase, exchange or redemption order will be executed at a per share price
equal to the net asset value per share next determined after the receipt of the
purchase, exchange or redemption order. Orders must be placed prior to 4:00 p.m.
Eastern time for the order to be effective on that day. The minimum initial
investment is $1,000, which minimum amount may be waived by the Distributor. The
minimum amount for subsequent purchases of shares is $100. Net asset value is
determined as of the close of trading on the New York Stock Exchange (currently
4:00 p.m. Eastern time) on each Business Day. See "PURCHASE AND REDEMPTION OF
SHARES."

PAYMENT OF DIVIDENDS

Substantially all of the net investment income (exclusive of capital gains) of
each Portfolio is distributed in the form of periodic dividends. Any net capital
gain is distributed at least annually. Distributions are paid in the form of
additional shares of the Portfolio making such distributions, unless the
shareholder elects to take payment in another form. See "GENERAL
INFORMATION--Dividends."
<PAGE> 34

ANNUAL OPERATING EXPENSES
(as a % of net assets)

The following table summarizes the expenses incurred by the Portfolios based on
the Trust's most recent fiscal year.

<TABLE>
<CAPTION>
SHORT IDAHO
INTERMEDIATE TERM MUNICIPAL
EQUITY BALANCED TERM SHORT TERM MUNICIPAL BOND
FUND FUND BOND FUND BOND FUND BOND FUND FUND
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES(1)
Maximum sales load imposed on purchase of shares
(as a % of the offering price).................. 4.50% 4.50% 3.50% 1.50% 1.50% 4.00%
ESTIMATED ANNUAL OPERATING EXPENSES
(AS A % OF NET ASSETS)
Management Fees (after waivers)(2)................ .51% .51% .34% .37% .17% .17%
12b-1 Fees........................................ .25% .25% .25% .25% .25% .25%
Other Expenses(3)................................. .39% .39% .41% .38% .58% .58%
- ------------------------------------------------------------------------------------------------------------------
Total Fund Operating Expenses
(after waivers)(4).............................. 1.15% 1.15% 1.00% 1.00% 1.00% 1.00%
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Although no fee is imposed in connection with share redemptions, a $15 fee
will be charged in connection with a wire transfer of redemption proceeds.
(2) The Trust's investment adviser (the "Adviser") has agreed to waive, on a
voluntary basis, a portion of its fee, and the management fee shown reflects
that voluntary waiver. The Adviser reserves the right to terminate its fee
waiver at any time at its sole discretion without notice to current or
prospective shareholders. Absent such fee waiver, the management fee would
be 0.74% for the Equity Fund and the Balanced Fund, and 0.60% for the
Intermediate Term Bond Fund, the Short Term Bond Fund, the Short Term
Municipal Bond Fund and the Idaho Municipal Bond Fund.
(3) Other Expenses of the Portfolios include all expenses except nonrecurring
account fees, brokerage commissions and other capital items, and management
fees. The Trust's administrator (the "Administrator") has agreed to waive,
on a voluntary basis, a portion of its fee for the Short Term Municipal Bond
Fund and the Idaho Municipal Bond Fund, and the administration fee shown for
those Portfolios reflects that voluntary waiver. The Administrator reserves
the right to terminate its fee waiver at any time at its sole discretion
without notice to current or prospective shareholders. Absent such fee
waiver, the annual administration fee would be the greater of 0.20% of net
assets or $100,000 for the Short Term Bond Fund and the Idaho Municipal Bond
Fund.
(4) Absent the voluntary fee waivers described above, total estimated operating
expenses for the Retail Class A shares of the Portfolios would be as
follows: the Equity Fund--1.38%; the Balanced Fund--1.38%; the Intermediate
Term Bond Fund--1.26%; the Short Term Bond Fund--1.23%; the Short Term
Municipal Bond Fund--1.55%; the Idaho Municipal Bond Fund--1.60%.

EXAMPLE

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
An investor would pay the following expenses (which include sales charges) on a $1,000 investment, assuming a 5% annual
return and redemption at the end of each time period:
Equity Fund............................................................. $56 $ 80 $105 $ 178
Balanced Fund........................................................... 56 80 105 178
Intermediate Term Bond Fund............................................. 45 66 88 153
Short Term Bond Fund.................................................... 25 46 69 136
Short Term Municipal Bond Fund.......................................... 25 46 69 136
Idaho Municipal Bond Fund............................................... 50 71 93 158
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
</TABLE>

The Annual Operating Expenses and Example presented above are designed to assist
an investor in understanding the various costs and expenses that an investor in
a Portfolio will bear directly or indirectly. For more complete descriptions of
the various costs and expenses, see "THE ADVISER" and "THE DISTRIBUTOR" in this
Prospectus. The information set forth in the Annual Operating Expenses and
Example relates only to the Retail Class A shares. Each Portfolio also offers
Institutional shares which are subject to the same expenses except that
Institutional shares do not bear certain distribution costs or sales charges.
<PAGE> 35

FINANCIAL HIGHLIGHTS

Shown below are per share data, ratios and supplemental data for the Trust's
fiscal year ended January 31, 1996. The financial information, for a share
outstanding for the year ended January 31, 1996, has been audited by Deloitte &
Touche LLP, independent accountants, whose report thereon was unqualified. This
information should be read in conjunction with the Trust's financial statements
and notes thereto, which are included in its Statement of Additional
Information. The Trust's financial statements for the year ended January 31,
1996, also appear, along with the report of Deloitte & Touche LLP, in the
Trust's 1996 Annual Report to shareholders. Additional performance information
is set forth in the 1996 Annual Report to shareholders and is available upon
request and without charge by calling 1-800-472-0577.

For a Share Outstanding Throughout the Year or Period

<TABLE>
<CAPTION>
EQUITY BALANCED
FUND FUND
------------ ------------
FOR THE FOR THE
PERIOD ENDED PERIOD ENDED
JANUARY 31, JANUARY 31,
1996(1)** 1996(1)**
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period................................................. $10.52 $10.34
- ------------------------------------------------------------------------------------------------------------------
Net Investment Income................................................................ 0.14 0.32
- ------------------------------------------------------------------------------------------------------------------
Dividends from Net Investment Income................................................. (0.15) (0.31)
- ------------------------------------------------------------------------------------------------------------------
Distributions from Capital Gains..................................................... (0.72) (0.42)
- ------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gains on Investments......................................... 2.86 1.85
- ------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period....................................................... $12.65 $11.78
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
Total Return+........................................................................ 32.34% 23.88%
- ------------------------------------------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000)...................................................... $1,769 $1,664
Ratio of Expenses to Average Net Assets.............................................. 1.15% 1.15%
Ratio of Expenses to Average Net Assets (Excluding Waivers).......................... 1.37% 1.38%
Ratio of Net Income to Average Net Assets............................................ 0.99% 3.06%
Ratio of Net Income to Average Net Assets (Excluding Waivers)........................ 0.77% 2.83%
Portfolio Turnover Rate.............................................................. 103.85% 59.74%
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
** Ratios and returns for the period have been annualized.
+ Returns do not reflect any sales load that may be applicable.
(1) Commenced operations on March 6, 1995.
</TABLE>
<PAGE> 36

<TABLE>
<CAPTION>
INTERMEDIATE SHORT
TERM TERM
BOND FUND BOND FUND
------------ ------------
FOR THE FOR THE
PERIOD ENDED PERIOD ENDED
JANUARY 31, JANUARY 31,
1996(1)** 1996(1)**
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period................................................. $10.16 $10.03
- ------------------------------------------------------------------------------------------------------------------
Net Investment Income................................................................ 0.56 0.53
- ------------------------------------------------------------------------------------------------------------------
Dividends from Net Investment Income................................................. (0.55) (0.52)
- ------------------------------------------------------------------------------------------------------------------
Distributions from Capital Gains..................................................... -- --
- ------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gains on Investments......................................... 0.65 0.14
- ------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period....................................................... $10.82 $10.18
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
Total Return+........................................................................ 13.49% 7.55%
- ------------------------------------------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000)...................................................... $ 963 $ 39
Ratio of Expenses to Average Net Assets.............................................. 1.00% 1.00%
Ratio of Expenses to Average Net Assets (Excluding Waivers).......................... 1.26% 1.23%
Ratio of Net Income to Average Net Assets............................................ 5.74% 5.75%
Ratio of Net Income to Average Net Assets (Excluding Waivers)........................ 5.48% 5.52%
Portfolio Turnover Rate.............................................................. 85.16% 83.64%
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
** Ratios and returns for the period have been annualized.
+ Returns do not reflect any sales load that may be applicable.
(1) Commenced operations on March 6, 1995.
</TABLE>
<PAGE> 37

<TABLE>
<CAPTION>
SHORT TERM IDAHO
MUNICIPAL MUNICIPAL
BOND FUND BOND FUND
------------ ------------
FOR THE FOR THE
PERIOD ENDED PERIOD ENDED
JANUARY 31, JANUARY 31,
1996(1)** 1996(1)**
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period................................................. $10.01 $10.21
- ------------------------------------------------------------------------------------------------------------------
Net Investment Income................................................................ 0.33 0.41
- ------------------------------------------------------------------------------------------------------------------
Dividends from Net Investment Income................................................. (0.33) (0.40)
- ------------------------------------------------------------------------------------------------------------------
Distributions from Capital Gains..................................................... (0.05) (0.12)
- ------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gains on Investments......................................... 0.29 0.73
- ------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period....................................................... $10.25 $10.83
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
Total Return+........................................................................ 6.99% 12.60%
- ------------------------------------------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000)...................................................... $ 212 $3,109
Ratio of Expenses to Average Net Assets.............................................. 1.00% 1.00%
Ratio of Expenses to Average Net Assets (Excluding Waivers).......................... 1.54% 1.58%
Ratio of Net Income to Average Net Assets............................................ 3.49% 4.18%
Ratio of Net Income to Average Net Assets (Excluding Waivers)........................ 2.95% 3.60%
Portfolio Turnover Rate.............................................................. 114.09% 58.94%
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
** Ratios and returns for the period have been annualized.
+ Returns do not reflect any sales load that may be applicable.
(1) Commenced operations on March 6, 1995.
</TABLE>
<PAGE> 38

THE TRUST

THE ACHIEVEMENT FUNDS TRUST (the "Trust") is an open-end series management
investment company that offers shares of beneficial interest in separate
investment portfolios. Each Portfolio has two separate classes of shares,
Institutional and Retail Class A, which differ with respect to distribution
costs, sales charges and dividends. This Prospectus offers the Retail Class A
shares (the "shares") of the Trust's Equity Fund, Balanced Fund, Intermediate
Term Bond Fund, Short Term Bond Fund, Short Term Municipal Bond Fund and Idaho
Municipal Bond Fund. Institutional shares of the Portfolios are only available
for purchase by financial institutions investing their own funds or funds for
which they act in a fiduciary, agency or custodial capacity. Each of the
Portfolios is diversified, except for the Idaho Municipal Bond Fund which is a
non-diversified portfolio. The Trust has also authorized the issuance of shares
of beneficial interest in an additional portfolio designated the Municipal Bond
Fund, but the Trust has not commenced a public offering of those shares.
Additional information pertaining to the Trust may be obtained by writing to SEI
Financial Services Company, 680 East Swedesford Road, Wayne, PA 19087 or by
calling 1-800-472-0577.

INVESTMENT OBJECTIVES AND POLICIES

EQUITY FUND

INVESTMENT OBJECTIVE

The Equity Fund seeks to provide long-term capital appreciation with current
income as a secondary consideration in selecting portfolio securities.

INVESTMENT POLICIES

Under normal market conditions, the Equity Fund invests in a diversified
portfolio of common stocks (including American Depository Receipts ("ADRs") and
securities convertible into or exchangeable for common stock) traded on U.S.
national securities exchanges (including NASDAQ). The Adviser selects securities
for this Portfolio using an investment strategy often characterized as "Growth
at a Price." Under this strategy, the Adviser purchases for the Equity Fund
securities of companies that have experienced growth in earnings provided that
the securities appear attractively priced based on proprietary valuation
methods. Generally, the Equity Fund will purchase securities of companies with
mid to large size market capitalization (over $100 million). If the Trust's
Adviser believes, however, that the securities of a company with a smaller
market capitalization have an attractive value, it may purchase such securities
for the Portfolio. Under normal conditions, the Equity Fund will invest at least
80% of its total assets in common stocks. The Equity Fund will not invest more
than 20% of its total assets in securities convertible into or exchangeable for
common stock. The Equity Fund may invest only in convertible debentures that
have received a rating of A or higher by Standard & Poor's Corporation ("S&P")
or A or higher by Moody's Investors Service ("Moody's") or are determined to be
of comparable quality by the Adviser at time of purchase.

In addition, under normal market conditions, the Equity Fund may invest up to
10% of its total assets in money market and U.S. equity index mutual funds.

BALANCED FUND

INVESTMENT OBJECTIVE

The Balanced Fund seeks to provide total return (both income and capital
appreciation) consistent with prudent investment risk.

INVESTMENT POLICIES

The Balanced Fund invests in a combination of equity and fixed income securities
and money market instruments. The Portfolio seeks total return in all market
conditions, with a special emphasis on minimizing declines in net asset value
during falling equity markets. The Balanced Fund invests primarily in equity
securities, intermediate maturity fixed income securities and money market
instruments.

Under normal market conditions, the Balanced Fund invests between 30-70% of its
total assets in a diversified portfolio of common stocks (including ADRs and
securities convertible into or exchangeable for common stock) traded on U.S.
national securities exchanges (including NASDAQ). The Adviser selects securities
for the Portfolio using an investment strategy often characterized as "Growth at
a Price." Under this strategy, the Adviser purchases for the Balanced Fund
securities of companies that have experienced growth in earnings provided that
the securities appear attractively priced based on proprietary valuation
methods. Generally, the Balanced Fund will purchase securities of companies with
mid to large size market capitalization (over $100 million). If the Adviser
believes, however, that the securities of a company with a smaller market
capitalization have an attractive value, it may purchase such securities for the
Portfolio. The Balanced Fund will not invest more than 20% of its total assets
in securities convertible into or exchangeable for common stock. The Portfolio
may invest only in convertible debentures that have received a rating of A or
higher by S&P or by Moody's or are determined to be of comparable quality by the
Adviser at time of purchase. It is currently anticipated that the Balanced Fund
will invest on the average over time approximately 60% of its total assets in
the foregoing types of securities.

The Balanced Fund will, under normal market conditions, invest a minimum of 25%
of its total assets in fixed income securities, obligations issued by the U.S.
Government and its agencies and instrumentalities, zero coupon receipts
involving U.S. Treasury obligations and corporate bonds and debentures,
asset-backed securities, floating or variable rate corporate notes and Yankee
Bonds. The Portfolio may also invest in mortgage-backed securities (including
collateralized mortgage obligations), which are securities issued by government
sponsored entities, such as the Government National Mortgage Association, or by
private issuers that entitle the holder to a share of all interest and principal
payments from a pool of mortgage loans underlying the security. All of the
foregoing investment securities will be rated A or higher by S&P or by Moody's
at the time of purchase or determined to be of comparable quality by the Adviser
at the time of purchase. In the event the credit quality of these securities
declines below the applicable criteria, the Adviser may consider selling such
securities. The Balanced Fund's investments in mortgage-backed securities,
asset-backed securities, floating or variable rate corporate notes and Yankee
Bonds will not exceed 20% of the Portfolio's total assets. The fixed income
securities held by the Balanced Fund will have an aggregate average weighted
maturity of three to seven years and individual securities may have a maximum
maturity of twelve years.

In addition, the Balanced Fund may invest in U.S. equity index mutual funds and
in money market instruments, including money market mutual funds, securities
issued or guaranteed by the United States Government and its agencies or
instrumentalities, repurchase agreements, certificates of deposit or bankers'
acceptances issued by domestic banks or savings institutions with assets
exceeding $2.5 billion at the end of their most recent fiscal year and
commercial paper rated, at the time of purchase, in the top two categories by a
national rating agency or
<PAGE> 40

determined to be of comparable quality by the Adviser at time of purchase.

INTERMEDIATE TERM BOND FUND

INVESTMENT OBJECTIVE

The Intermediate Term Bond Fund seeks income consistent with prudent investment
risk and maintenance of appropriate liquidity.

INVESTMENT POLICIES

The Intermediate Term Bond Fund's permitted investments consist of the following
debt securities: fixed income securities, obligations issued by the U.S.
Government and its agencies and instrumentalities, zero coupon receipts
involving U.S. Treasury obligations and corporate bonds and debentures,
asset-backed securities, floating or variable rate corporate notes and Yankee
Bonds and debentures. The Portfolio may also invest in mortgage-backed
securities (including collateralized mortgage obligations), which are securities
issued by government sponsored entities, such as the Government National
Mortgage Association, or by private issuers that entitle the holder to a share
of all interest and principal payments from a pool of mortgage loans underlying
the security. All of the foregoing investment securities will be rated A or
higher by S&P or by Moody's at the time of purchase or determined to be of
comparable quality by the Adviser at the time of purchase, and are considered by
the Trust to be bonds. In the event the credit quality of bonds purchased by the
Intermediate Term Bond Fund declines below the applicable criteria, the Adviser
may consider selling such securities. The Portfolio's investments in
mortgage-backed securities, asset-backed securities, floating or variable rate
corporate notes and Yankee Bonds will not exceed 20% of its total assets.

The Portfolio will have an aggregate average weighted maturity of three to seven
years and individual securities held in the Portfolio may have maximum maturity
of twelve years. By so limiting the maturity of its investments, the Portfolio's
assets are expected to experience less price volatility in response to changes
in interest rates than similar securities with longer maturities.

SHORT TERM BOND FUND

INVESTMENT OBJECTIVE

The Short Term Bond Fund seeks to preserve principal value and maintain a high
degree of liquidity while providing current income.

INVESTMENT POLICIES

The Short Term Bond Fund's permitted investments consist of the following debt
securities: fixed income securities, obligations issued by the U.S. Government
and its agencies and instrumentalities, zero coupon receipts involving U.S.
Treasury obligations and corporate bonds and debentures, asset-backed
securities, floating or variable rate corporate notes and Yankee Bonds. The
Portfolio may also invest in mortgage-backed securities (including
collateralized mortgage obligations), which are securities issued by government
sponsored entities, such as the Government National Mortgage Association, or by
private issuers that entitle the holder to a share of all principal and interest
payments from a pool of mortgage loans underlying the security. All of the
foregoing investment securities will be rated A or higher by S&P or by Moody's
at the time of purchase or determined to be of comparable quality by the Adviser
at the time of purchase, and are considered by the Trust to be bonds. In the
event the credit quality of the bonds purchased by the Short Term Bond Fund
declines below the applicable criteria, the Adviser will consider selling such
securities. The Portfolio's investments in mortgage-backed securities,
asset-backed securities, floating or variable rate corporate notes and Yankee
Bonds will not exceed 30% of its total assets.

The Portfolio will have an aggregate average weighted maturity of not more than
two years and individual securities held in the Portfolio may have a maximum
maturity of three years. By so limiting the maturity of its investments, the
Portfolio's assets are expected to experience less price volatility in response
to changes in interest rates than similar securities with longer maturities.

The Short Term Bond Fund may purchase securities on a "when-issued" basis and
reserves the right to engage in transactions involving standby commitments. In
addition, the Portfolio may borrow money in aggregate amounts not in excess of
5% of its total assets.

SHORT TERM MUNICIPAL BOND FUND

INVESTMENT OBJECTIVE

The Short Term Municipal Bond Fund seeks to provide as high a level of current
income that is exempt from Federal income tax as is consistent with preservation
of capital.

INVESTMENT POLICIES

policy of the Short Term Municipal Bond Fund. The issuers of these securities
can be located in all fifty states, the District of Columbia, Puerto Rico and
other U.S. territories and possessions. The Short Term Municipal Bond Fund will
not invest in securities the interest on which is a preference item for purposes
of the alternative minimum tax. The Portfolio will generally maintain a
dollar-weighted average portfolio maturity of no more than three years and an
individual security maturity of no more than four years.

The Short Term Municipal Bond Fund may purchase the following types of municipal
securities, but only if such securities, at the time of purchase, have the
requisite ratings set forth below or are of comparable quality as determined by
the Adviser: (i) municipal bonds rated A or better by S&P or Moody's; (ii)
municipal notes rated at least SP-1 by S&P or MIG-1 or VMIG-1 by Moody's; and
(iii) tax-exempt commercial paper rated at least A-1 by S&P or Prime-1 by
Moody's. In the event the credit quality of municipal securities owned by the
Portfolio declines below the applicable criteria outlined above the Adviser may
consider selling such securities. The Short Term Municipal Bond Fund may also
purchase other types of tax exempt instruments as long as they are of a quality
equivalent to the bond, note or commercial paper ratings stated above, and may
invest up to 10% of its total assets in tax-exempt money market mutual funds.

The Short Term Municipal Bond Fund may invest in variable and floating rate
obligations, may purchase securities on a "when-issued" basis, and reserves the
right to engage in transactions involving standby commitments. The Portfolio may
also borrow money in aggregate amounts not in excess of 5% of its total assets.

IDAHO MUNICIPAL BOND FUND

INVESTMENT OBJECTIVE

The Idaho Municipal Bond Fund seeks to provide as high a level of current income
exempt from Federal and Idaho state income taxes as is consistent with
preservation of capital.

INVESTMENT POLICIES

The Idaho Municipal Bond Fund will invest at least 65% of its total assets in
municipal securities the interest on which is exempt from Federal and Idaho
state income taxes, based upon opinions from bond counsel for the issuers. This
investment policy is a fundamental policy of the Portfolio. The Idaho Municipal
Bond Fund may purchase the following types of municipal securities of issuers
located in Idaho, but only if such securities, at the time of purchase, have the
requisite ratings set forth below or are of comparable quality as determined by
the Adviser at the time of purchase: (i) municipal bonds rated A or better by
S&P or Moody's; (ii) municipal notes rated at least SP-1 by S&P or MIG-1 or
VMIG-1 by Moody's; and (iii) tax-exempt commercial paper rated at least A-1 by
S&P or Prime-1 by Moody's. The Adviser will consider selling municipal
securities owned by the Portfolio for which credit quality declines below the
applicable criteria outlined above.

Under normal market conditions, the Idaho Municipal Bond Fund will invest at
least 80% of its total assets in securities the interest on which is not a
preference item for purposes of the alternative minimum tax. In addition, up to
20% of the Portfolio's total assets may be invested in tax-exempt money market
funds and other municipal securities, the interest on which is exempt from
Federal income taxes, but not from Idaho income tax, based upon opinions from
bond counsel for the issuers. Such investments will be of the same credit
quality discussed above. The weighted average maturity of the Portfolio's
securities will be twelve years or less.
<PAGE> 43

GENERAL INVESTMENT POLICIES

The Advisor expects that under normal circumstances the annual turnover rate for
the investments of the Portfolios will be less then 100%. However, the annual
turnover rate of the investments of the Equity Fund and the Short Term Municipal
Bond Fund was in excess of 100% for the fiscal year ended January 31, 1996. That
rate of portfolio turnover will result in higher transaction costs for, and may
result in additional taxes for shareholders of, those Portfolios. See "Taxes."

RISK FACTORS

periods of rising interest rates, the value of such securities generally
declines. Moreover, while securities with longer maturities tend to produce
higher yields, the prices of longer maturity securities are also subject to
greater market fluctuations as a result of changes in interest rates. Changes by
recognized agencies in the credit rating of any fixed income security and in the
ability of an issuer to make payments of interest and principal also affect the
value of these investments. Changes in the value of portfolio securities will
not necessarily affect cash income derived from those securities but will affect
the net asset value of a Portfolio's shares.

IDAHO RISK FACTORS (IDAHO MUNICIPAL BOND FUND)--Certain risks are inherent in
the Idaho Municipal Bond Fund's investments in Idaho municipal securities. The
State of Idaho currently has no outstanding general obligation debt. In the
past, tax anticipation notes have been issued by the State of Idaho that are
backed by the full faith and credit of the State of Idaho. Other securities
issued by Idaho state agencies are secured only by a pledge of revenues
generated by investment of bond proceeds in assets such as low-income housing
loans or loans for the construction of hospital facilities, and of reserve funds
and other funds created from bond proceeds. Timely payment of general obligation
bonds issued by political subdivisions of the State of Idaho is dependent upon
the ability of those entities to collect anticipated tax revenues, which may be
affected by general economic conditions and political changes. Timely payment of
revenue bonds issued by political subdivisions of the State of Idaho is
dependent upon collection of revenues from investments made with bond proceeds.
A more complete description of risks associated with Idaho municipal securities
is contained in the Statement of Additional Information.

THERE IS NO ASSURANCE THAT ANY PORTFOLIO WILL ACHIEVE ITS INVESTMENT OBJECTIVE.

INVESTMENT LIMITATIONS

No Portfolio may:

1. With respect to 75% of its total assets, purchase the securities of any
issuer (other than securities
<PAGE> 45

issued or guaranteed by the U.S. Government or its agencies or
instrumentalities) if, as a result, (a) more than 5% of the Portfolio's total
assets would be invested in the securities of such issuer, or (b) the Portfolio
would hold more than 10% of the outstanding securities of that issuer, except
that this limitation shall not be applicable to the Idaho Municipal Bond Fund.

2. Purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. Government or any of its agents or instrumentalities),
if, as a result, more than 25% of the total assets of the Portfolio would be
invested in the securities of one or more companies whose principal business
activities are in the same industry.

FUNDAMENTAL POLICIES

The investment objectives and investment limitations stated above are
fundamental policies of the Portfolios. Fundamental policies cannot be changed
with respect to a Portfolio without the consent of the holders of a majority of
that Portfolio's outstanding shares. The term "majority of the outstanding
shares" of a Portfolio as used in this Prospectus means the vote of (i) 67% or
more of the Portfolio's shares present at a meeting, if the holders of more than
50% of the outstanding shares of the Portfolio are present or represented by
proxy, or (ii) more than 50% of the Portfolio's outstanding shares, whichever is
less.

THE ADVISER

Under the Advisory Agreement, FSIM is entitled to receive a fee for the services
it provides, which is calculated daily and paid monthly, at an annual rate of
0.74% of the average daily net assets of the Equity Fund and the Balanced Fund,
and at an annual rate of 0.60% of the average daily net assets of the
Intermediate Term Bond Fund, the Short Term Bond Fund, the Short Term Municipal
Bond Fund and the Idaho Municipal Bond Fund. The Adviser has voluntarily waived
a portion of its fee for the Trust's current fiscal year so that total operating
expenses for the Equity Fund and the Balanced Fund (excluding 12b-1 fees) will
not exceed 0.90% and the total operating expenses for the Intermediate Term Bond
Fund, the Short Term Bond Fund, the Short Term Municipal Bond Fund and Idaho
Municipal Bond Fund (excluding 12b-1 fees) will not exceed 0.75%. The Adviser
may revoke its fee waivers at any time at its sole discretion without notice to
any current or prospective shareholder. For the fiscal year ended January 31,
1996, the Adviser received advisory fees in amounts equal to the following
annual percentage rates applied to the average daily net assets of the
Portfolios indicated: 0.51% for the Equity Fund; 0.51% for the Balanced Fund;
0.34% for the Intermediate Term Bond Fund; 0.37% for the Short Term Bond Fund;
0.17% for the Short Term Municipal Bond Fund; and 0.17% for the Idaho Municipal
Bond Fund.

FSIM, incorporated in August 1984, is a wholly-owned, indirect subsidiary of
First Security Corporation, a financial services organization and
<PAGE> 46

registered bank holding company with headquarters in Utah. In addition to
advising the Portfolios, FSIM's advisory experience includes the management of
various collective and common investment funds and the provision of investment
management services to another investment company, banks and thrift
institutions, corporate and profit-sharing trusts, Taft-Hartley organizations,
municipal and state retirement funds, charitable foundations, endowments and
individual investors throughout the United States. FSIM had approximately $4.3
billion under management at December 31, 1995. FSIM is registered as an
investment adviser under the Investment Advisers Act of 1940, as amended, and
has offices at 61 South Main Street, Salt Lake City, Utah 84111, at 119 North
9th Street, Boise, Idaho 83730 and at 219 Central Avenue NW, 3rd Floor,
Albuquerque, New Mexico 87102.

The following individuals are responsible for the day-to-day management of the
Portfolios indicated.

BALANCED FUND--Curtis J. Anderson, CFA, is a Vice President and Senior Portfolio
Manager of the Adviser and has been responsible for the Balanced Fund since
inception. He joined the Adviser in 1991 as an Assistant Vice President and
Portfolio Manager. Prior to joining the Adviser, Mr. Anderson served as a Trust
Investment Officer with West One Trust Company from 1989 to 1991.

entities qualified to perform such services and selected by the Board.

THE ADMINISTRATOR

SEI Fund Resources, 680 East Swedesford Road, Wayne, PA 19087, a wholly-owned
subsidiary of SEI Financial Management Corporation, a wholly-owned subsidiary of
SEI Corporation ("SEI"), provides the Trust with administrative services (other
than investment advisory services), accounting services, regulatory reporting,
all necessary office space, equipment, personnel and facilities, pursuant to an
administration agreement with the Trust (the "Administration Agreement"). For
these services, the Administrator is entitled to a fee from the Equity Fund, the
Balanced Fund, the Intermediate Term Bond Fund and the Short Term Bond Fund in
an amount which is calculated at an annual rate of 0.20% of their average daily
net assets. The Administrator is entitled to a fee from the Short Term Municipal
Bond Fund and the Idaho Municipal Bond Fund in an amount equal to the greater of
0.20% of their daily net assets or $100,000 per annum. The Administrator has
voluntarily agreed to waive a portion of its fee for the Short Term Municipal
Bond Fund and the Idaho Municipal Bond Fund. The Administrator reserves the
right to terminate its fee waiver for the Short Term Municipal Bond Fund and the
Idaho Municipal Bond Fund at any time at its sole discretion and without notice
to any current or prospective shareholder.

THE DISTRIBUTOR

SEI Financial Services Company (the "Distributor"), 680 East Swedesford Road,
Wayne, PA 19087, a wholly-owned subsidiary of SEI, serves as the distributor for
the Portfolios pursuant to a distribution agreement (the "Distribution
Agreement") which applies to Institutional and Retail Class A shares of the
Portfolios. The Trust has adopted a distribution plan for the Retail Class A
shares (the "Retail Plan") of the Portfolios in accordance with the provisions
of Rule 12b-1 under the 1940 Act. The Trust may also execute brokerage or other
agency transactions through the Distributor for which the Distributor may
receive usual and customary compensation. The Trust intends to operate the
Retail Plan in accordance with its terms and with the National Association of
Securities Dealers, Inc. ("NASD") rules concerning sales charges.

The Distribution Agreement and Retail Plan provide for payment to the
Distributor of a total fee in connection with the servicing of shareholder
accounts of the Retail Class A shares, calculated and payable monthly, at the
annual rate of 0.25% of the value of the average daily net assets of such class.
All or any portion of such total fee may be payable as a Shareholder Servicing
Fee, and all or any portion of such total fee may be payable as a Distribution
Fee, as determined from time to time by the Trustees of the Trust. All such fees
are currently designated and payable as a Shareholder Servicing Fee.

The Shareholder Servicing Fee may be used by the Distributor to provide
compensation for ongoing servicing or maintenance of shareholder accounts with
respect to the Retail Class A class of the Portfolios of the Trust. Compensation
may be paid by the Distributor to persons, including employees of the
Distributor, and institutions who respond to inquiries of holders of Retail
Class A shares regarding their ownership of shares or their accounts with the
Trust or who provide other administrative or accounting services not otherwise
provided by the Adviser, transfer agent or other agent of the Trust.

Payments under the Retail Plan are not tied exclusively to the expenses for
shareholder servicing activities actually incurred by the Distributor, so that
such payments may exceed expenses actually incurred by the Distributor. The
Trust's Board of Trustees will evaluate the appropriateness of the Retail Plan
and its payment terms on a continuing basis and in doing so will consider all
relevant factors, including expenses borne by the Distributor and amounts it
receives under the plan.

The Trust's Adviser and the Distributor may, at their option and in their sole
discretion, make payments
<PAGE> 48

from their own resources to cover costs of additional shareholder servicing
activities.

PURCHASE, EXCHANGE AND REDEMPTION OF
SHARES

PARTICIPATING DEALERS

Shares of the Portfolios may be purchased, exchanged or redeemed through a
financial intermediary, such as a brokerdealer, bank or other financial
institution or organization, which has entered into an agreement with the
Distributor to sell shares (a "Participating Dealer"). Persons ("Customers")
wishing to purchase shares, or who wish to exchange or redeem shares already
purchased, should contact their Participating Dealer for information about the
services available to them and for specific instructions on how to purchase,
exchange or redeem shares.

The Distributor has entered into an agreement with First Security Investor
Services, Inc. ("FSIS") authorizing FSIS to sell Portfolio shares as a
Participating Dealer. FSIS representatives may be contacted at:

First Security Investor Services
61 South Main Street
Salt Lake City, Utah 84111
(800) 574-6609

Participating Dealers may impose a cut-off time earlier than those described
below for receipt of purchase, exchange or redemption orders directed through
them to allow for processing and transmittal of those orders to the Transfer
Agent for effectiveness the same day. Shares purchased by Customers through
Participating Dealers may be held of record by the Participating Dealer.
Customers who desire to transfer the registration of shares beneficially owned
by them but held of record by a Participating Dealer should contact their
Participating Dealer to accomplish such change. Depending upon the terms of a
particular Customer account, a Participating Dealer may charge a Customer
account fees. Information concerning these services and any charges should be
obtained by the Customer from the Participating Dealer.

GENERAL INFORMATION ON SHARE PURCHASES

Customers wishing to purchase shares of the Portfolios should contact a
Participating Dealer for information on the services available to them and for
specific instructions on how to purchase shares. The Participating Dealer may
indicate that the Customer may purchase shares by contacting the Transfer Agent
directly by mail or by wire as described below. Existing shareholders may
purchase additional shares through an automatic investment plan or exercise of a
distribution investment option.

The minimum initial investment in the shares is $1,000; however, the minimum
investment may be waived at the Distributor's discretion. All subsequent
purchases must be in amounts of at least $100 (including purchases through
payroll deductions authorized pursuant to pre-approved payroll deduction plans).
Shares may be purchased on days on which the New York Stock Exchange is open for
business ("Business Days"). Orders for the purchase of shares must be received
before 4:00 p.m. Eastern time on any Business Day for the order to be accepted
on that Business Day. The Trust reserves the right to reject a purchase order
when the Distributor determines that it is not in the best interest of the Trust
or shareholders to accept such purchase order.

PURCHASE BY MAIL

A Customer may purchase shares of a Portfolio by completing and signing an
Account Application form and mailing it, along with a check (or other negotiable
bank instrument or money order) payable to "The Achievement Funds Trust,
(Portfolio Name)" to a Participating Dealer, or in some cases to the Transfer
Agent at P.O. Box 419448, Kansas City, Missouri 64141-6448. All purchases made
by check should be in U.S. dollars and made payable to "The Achievement Funds
Trust, (Portfolio Name)." Third party checks, credit card checks and cash will
not be accepted. Orders placed by mail will be executed on receipt of payment by
the Transfer Agent. If a Customer's check does not clear, the purchase will
<PAGE> 49

be canceled and the Customer could be liable for any losses or fees incurred.

Account Application forms may be obtained by calling the Distributor at
1-800-472-0577.

PURCHASE BY WIRE

A Customer may purchase shares by wiring funds through the Federal Reserve wire
transfer system ("Fedwire"), provided that an Account Application has been
previously received. Customers purchasing shares by wire should instruct their
bank to transfer funds by wire to: United Missouri Bank of Kansas, N.A.; ABA
#10-10-00695; for Account #98-7060-046-3; further credit [Name of Portfolio].
The wire instructions must include the Customer's name and account number. An
order to purchase shares by wire will be deemed to have been received by the
Trust on the Business Day of the wire, provided that the Customer wires funds to
the Transfer Agent prior to 4:00 p.m. Eastern time. If the Transfer Agent does
not receive the wire by 4:00 p.m. Eastern time, the order will be executed the
next business day.

AUTOMATIC INVESTMENT PLAN

Shares of a Portfolio may be purchased systematically through transfers from
checking or savings accounts maintained by certain banks. Customers may purchase
shares on a fixed schedule (monthly, quarterly, semi-annually or annually) with
a minimum investment amount of $100. The Automatic Investment Plan is subject to
sales charges, minimum purchase amounts and minimum maintained balance
requirements disclosed in "General Information on Share Purchases", "Sales
Charges" and under "Other Information Regarding Redemptions".

DISTRIBUTION INVESTMENT OPTION

If directed by the Customer, distributions of dividends and capital gains made
by a Portfolio may be invested in shares of one of the other Portfolios, if such
shares are available for sale. Investments of distributions in shares of other
Portfolios must meet the applicable initial investment minimum, or be made in an
existing account and meet the applicable additional purchase minimum. Such
investments will not be subject to sales charges. A Customer considering the
Distribution Investment Option should consider the differences in objectives and
policies of another Portfolio before making any investment in such Portfolio.
The Trust reserves the right to terminate this Distribution Investment Option
without further notice to shareholders.

SALES CHARGES

The purchase of shares of a Portfolio is subject to a sales charge which varies
depending on the size of the purchase and which of the Portfolios shares are
being purchased. The following tables show the regular sales charges on
Portfolio shares to a single purchaser, together with the reallowance paid to
dealers and the agency commission paid to brokers (collectively, the
"Commission").
<PAGE> 50

EQUITY FUND AND BALANCED FUND
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
REALLOWANCE AND
SALES CHARGE AS SALES CHARGE AS BROKERAGE COMMISSIONS
A PERCENTAGE OF A PERCENTAGE OF AS A PERCENTAGE
AMOUNT OF PURCHASE OFFERING PRICE NET AMOUNT INVESTED OF OFFERING PRICE
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
less than $25,000................... 4.50% 4.71% 4.05%
$25,000 but less than $50,000....... 4.00% 4.17% 3.60%
$50,000 but less than $100,000...... 3.50% 3.63% 3.15%
$100,000 but less than $250,000..... 3.00% 3.09% 2.70%
$250,000 but less than $500,000..... 2.50% 2.56% 2.25%
$500,000 but less than $1,000,000... 2.00% 2.04% 1.80%
$1,000,000 and over(1).............. -- -- --
</TABLE>

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

INTERMEDIATE BOND FUND
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
REALLOWANCE AND
SALES CHARGE AS SALES CHARGE AS A BROKERAGE COMMISSIONS
A PERCENTAGE OF PERCENTAGE OF AS A PERCENTAGE
AMOUNT OF PURCHASE OFFERING PRICE NET AMOUNT INVESTED OF OFFERING PRICE
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
less than $50,000................... 3.50% 3.63% 3.15%
$50,000 but less than $100,000...... 3.00% 3.09% 2.70%
$100,000 but less than $250,000..... 2.50% 2.56% 2.25%
$250,000 but less than $500,000..... 2.00% 2.04% 1.80%
$500,000 but less than $1,000,000... 1.50% 1.52% 1.35%
$1,000,000 and over(1).............. -- -- --
</TABLE>

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

SHORT TERM BOND FUND AND SHORT TERM MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
REALLOWANCE AND
SALES CHARGE AS SALES CHARGE AS A BROKERAGE COMMISSIONS
A PERCENTAGE OF PERCENTAGE OF AS A PERCENTAGE
AMOUNT OF PURCHASE OFFERING PRICE NET AMOUNT INVESTED OF OFFERING PRICE
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
less than $100,000................. 1.50% 1.52% 1.35%
$100,000 but less than $250,000.... 1.00% 1.01% 0.90%
$250,000 but less than $500,000.... 0.75% 0.76% 0.68%
$500,000 but less then
$1,000,000....................... 0.50% 0.50% 0.45%
$1,000,000 and over(1)............. -- -- --
</TABLE>

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

IDAHO MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
REALLOWANCE AND
SALES CHARGE AS SALES CHARGE AS A BROKERAGE COMMISSIONS
A PERCENTAGE OF PERCENTAGE OF AS A PERCENTAGE
AMOUNT OF PURCHASE OFFERING PRICE NET AMOUNT INVESTED OF OFFERING PRICE
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
less than $50,000.................. 4.00% 4.17% 3.60%
$50,000 but less than $100,000..... 3.50% 3.63% 3.15%
$100,000 but less than $250,000.... 3.00% 3.09% 2.70%
$250,000 but less than $500,000.... 2.50% 2.56% 2.25%
$500,000 but less than
$1,000,000....................... 2.00% 2.04% 1.80%
$1,000,000 and over(1)............. -- -- --
</TABLE>

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Although no sales charge is paid by a Customer investing amounts over
$1,000,000, a brokerage commission may be paid in connection with such
transactions.
<PAGE> 51

Under certain circumstances, commissions up to the amount of the entire sales
charge may be reallowed to certain investment professionals, who might then be
deemed to be "underwriters" under the Securities Act of 1933, as amended.

REDUCTION OF SALES CHARGE: RIGHT OF ACCUMULATION. In calculating the sales
charge rates applicable to current purchases of a Portfolio's shares, a single
purchaser is entitled to combine current purchases with the current market value
of previously purchased shares of a Portfolio, or previously purchased shares of
the ProVantage class of shares of certain portfolios of the SEI Family of Funds
offered as part of The Achievement Funds, which are sold subject to a comparable
sales charge. See the tables above for the sales charge on quantity purchases.

REDUCTION OF SALES CHARGE: LETTER OF INTENT. Reduced sales charges are also
applicable to the aggregate amount of purchases made by any qualified Customer
within a 13-month period pursuant to a written Letter of Intent provided to the
Distributor that does not legally bind the signer to purchase any set number of
shares and provides for the holding in escrow by the Distributor of 5% of the
amount purchased until such purchase is completed within the 13-month period. A
Letter of Intent may be dated to include shares purchased up to 90 days prior to
the date the Letter of Intent is signed. The 13-month period begins on the date
of the earliest purchase. If the intended investment is not completed, the
Distributor will surrender an appropriate number of the escrowed shares for
redemption in order to recover the difference between the sales charge imposed
under the Letter of Intent and the sales charge that would have otherwise been
imposed.

REINSTATEMENT PRIVILEGE: A shareholder who has redeemed shares of any Portfolio
has a one-time right to reinvest the redemption proceeds in shares of that
Portfolio at net asset value as of the time of reinvestment. Such a reinvestment
must be made within 30 days of the redemption and is limited to the amount of
the redemption proceeds. Although redemptions and repurchases of shares are
taxable events, a reinvestment within such 30-day period in the same fund is
considered a "wash sale" and results in the inability to recognize currently all
or a portion of a loss realized on the original redemption for federal income
tax purposes. The shareholder or his or her Participating Dealer must notify the
Transfer Agent at the time the trade is placed that the transaction is a
reinvestment.

SALES CHARGE WAIVERS: No sales charge is imposed on shares of the Portfolios
(i) issued in plans of reorganization, such as mergers, asset acquisitions and
exchange offers, to which the Trust is a party, (ii) sold to dealers or brokers
that have a sales agreement with the Distributor for their own account or for
retirement plans for employees or sold to present employees of dealers or
brokers that certify to the Distributor at the time of purchase that such
purchase is for their own account, (iii) sold to present employees of SEI or one
of its affiliates; (iv) sold to present employees of First Security Corporation
or one of its affiliates; (v) sold to persons participating in certain financial
services programs offered by the bank affiliates of First Security Corporation
and authorized for sales charge waiver by the Distributor; (vi) sold to tax
exempt organizations enumerated in Section 501(c) of the Internal Revenue Code
or qualified employee benefit plans created under Section 401, 403(b)(7) or 457
of the Internal Revenue Code (but not IRAs or SEPs); (vii) sold to Trustees and
officers of the Trust; (viii) purchased with the proceeds from the recent
redemption of shares of another Portfolio as set forth above under Reinstatement
Privilege; (ix) purchased through the exercise of a Distribution Option
described above; and (x) purchased with proceeds from the recent redemption of
shares of a registered open-end management investment company for which a
front-end sales load was paid (deferred sales charges paid upon redemption do
not qualify for this waiver).

The waiver of the sales charge under clause (x) applies only if the following
conditions are met: the purchase must be made within 30 days of the redemption;
the Distributor must be notified in writing
<PAGE> 52

by the investor, or his or her agent, at the time the purchase is made; and a
copy of the investor's account statement showing such redemption must accompany
such notice. The waiver policy with respect to the purchase of shares through
the use of proceeds from a recent redemption above may be discontinued at any
time without notice. Investors should contact the Distributor to confirm
continued availability prior to initiating the procedures described above.

OTHER INFORMATION REGARDING PURCHASES

Shares of the Portfolio are sold on a continuous basis and are offered only to
residents of states in which the shares are eligible for purchase. No
certificates representing shares will be issued. The purchase price of shares is
the net asset value next determined after a purchase order is received and
accepted plus the applicable sales charge. The net asset value per share of a
Portfolio is determined by dividing the total value of its investments and other
assets, less any liabilities, by the total outstanding shares of the Portfolio.
The Portfolio's investments will be valued at their last sales price as
described in the Statement of Additional Information. Net asset value per share
is determined daily as of the close of trading on the New York Stock Exchange
(currently 4:00 p.m. Eastern time) on each Business Day.

The Distributor may, from time to time and at its own expense, provide
promotional incentives in the form of cash or other compensation to certain
investment professionals or financial institutions whose registered
representatives have sold or are expected to sell significant amounts of the
shares of the Portfolios. Such other compensation may take the form of payments
for travel expenses, including lodging, incurred in connection with trips taken
by qualifying registered representatives to places within or outside of the
United States.

EXCHANGE PRIVILEGES

Once payment for shares has been received (i.e., an account has been
established), a shareholder may exchange some or all of such shares for Retail
Class A shares of other Portfolios of the Trust or for ProVantage class shares
of certain portfolios of the SEI Family of Funds currently offered as part of
The Achievement Funds, including the Treasury Securities Portfolio of the SEI
Liquid Asset Trust and the Tax Free Portfolio of the SEI Tax Exempt Trust (the
"SEI Money Market Funds"), the Small Cap Growth Portfolio of the SEI
Institutional Managed Trust and the Core International Equity Portfolio of the
SEI International Trust (together with the SEI Money Market Funds, the "SEI
Funds").

Exchanges are made at net asset value plus any applicable sales charge. If,
within 6 months of their acquisition, Portfolio shares are exchanged for shares
of another Portfolio or the SEI Funds with a higher sales charge, the customer
will pay the difference between the sales charges in connection with the
exchange. No refund of a sales charge will be made if shares of a Portfolio are
exchanged for shares of another Portfolio or an SEI Fund that imposes a lower
sales charge. No additional sales charge will be imposed in connection with an
exchange of shares of a Portfolio for shares of another Portfolio or an SEI Fund
if such exchange occurs more than 6 months after the Customer's purchase of the
Portfolio shares disposed of in the exchange. Shares of a Portfolio may be
exchanged for shares of an SEI Money Market Fund without imposition of a sales
charge by the SEI Money Market Fund. Such SEI Money Market Fund shares may
subsequently be exchanged for shares of a Portfolio, but such an exchange, if
consummated after 30 days of the initial exchange, will be subject to imposition
of the full sales charge associated with an acquisition of shares of that
Portfolio.

If a shareholder buys shares of a Portfolio and receives a sales charge waiver,
the shareholder will be deemed to have paid the sales charge for purposes of
this exchange privilege. In calculating any sales charge payable on an exchange,
the Trust will assume that the first shares exchanged are those on which a sales
charge has already been paid. Sales charge waivers may also be available under
certain
<PAGE> 53

circumstances, as described in this Prospectus. The Trust reserves the right to
change the terms and conditions of the exchange privilege discussed herein, or
to terminate the exchange privilege, upon sixty days' notice.

Shareholders should contact a Participating Dealer for instructions on how to
exchange shares. Exchanges will be made only after receipt of proper
instructions in writing or by telephone (an "Exchange Request") for an
established account by the Transfer Agent. The liability of the Trust, the
Distributor or the Transfer Agent for unauthorized or fraudulent telephone
instructions may be limited as described under "PURCHASE, EXCHANGE AND
REDEMPTION OF SHARES--Redemption of Shares--By Telephone." If an Exchange
Request in good order is received by the Transfer Agent by 4:00 p.m. Eastern
time on any Business Day, the exchange will ordinarily be effective on that day.
Any Customer who wishes to make an exchange must have received a current
prospectus of the Portfolio or SEI Fund into which the exchange is being made
before the exchange will be effected. Information contained in this Prospectus
concerning sales charges imposed by SEI Funds is subject to change by the SEI
Funds.

An exchange between the Retail Class A shares and the Institutional class shares
of any Portfolio is generally not permitted, except that exchanges between the
classes will be permitted should a Retail Class A shareholder become eligible to
purchase Institutional class shares. For example, a Retail Class A shareholder
may establish a trust account that is eligible to purchase shares of the
Institutional class. In this case, an exchange will be permitted between the
Retail Class A class of a Portfolio and the Institutional class of that same
Portfolio at net asset value, without the imposition of a sales charge, fee or
other charge. An exchange from the Institutional class of a Portfolio to the
Retail Class A class of that same Portfolio will occur automatically when an
Institutional class shareholder becomes ineligible to invest in the
Institutional class at net asset value, without the imposition of a sales load,
fee or other charge. The Trust will provide at least thirty days' notice of any
such exchange. After the exchange, the exchanged shares will be subject to all
fees applicable to the Retail Class A shares. The Trust reserves the right to
require shareholders to complete an application or other documentation in
connection with the exchange.

Each exchange between Portfolios or between a Portfolio and an SEI Fund actually
represents the sale of shares of one Portfolio and the purchase of shares in the
other, which may produce a gain or loss for tax purposes. In order to protect
each Portfolio's performance and its shareholders, the Trust discourages
frequent exchange activity in response to short-term market fluctuations. The
Trust reserves the right to modify or withdraw the exchange privilege or to
suspend the offering of shares in any class without notice to shareholders if,
in the Adviser's judgment, a Portfolio would be unable to invest effectively in
accordance with its investment objective and policies, or would otherwise
potentially be adversely affected. Each Portfolio also reserves the right to
reject any specific purchase order, including certain purchases by exchange.

REDEMPTION OF SHARES

Shareholders may redeem their shares without charge on any Business Day by mail,
by telephone or through a systematic withdrawal plan. Shareholders should
contact a Participating Dealer for information on how to redeem shares.
Redemption proceeds will be sent by check, by the Federal Reserve System's
automated clearance house ("ACH") or by Fedwire to or for the account of the
record owner of the shares redeemed. A wire redemption charge (presently $15.00)
will be deducted from the amount of proceeds of a redemption that are
transferred by ACH or Fedwire.

REDEMPTIONS BY MAIL

A written request for redemption must be received by the Transfer Agent, P.O.
Box 419448, Kansas City, Missouri 64141-6448 in order to constitute a valid
redemption request.
<PAGE> 54

If the redemption request exceeds $5,000, or if the request directs the proceeds
to be sent to an address different from that of record, the Transfer Agent may
require that the signature on the written redemption request be guaranteed.
Customers should be able to obtain a signature guarantee from a bank,
broker-dealer, credit union, securities exchange or association, clearing agency
or savings association. Notaries public cannot guarantee signatures. The
signature guarantee requirement will be waived if all of the following
conditions apply: (1) the redemption is for not more than $5,000 worth of
shares, (2) the redemption check is payable to the shareholder of record and (3)
the redemption check is mailed to the shareholder at his or her address of
record.

REDEMPTIONS BY TELEPHONE

If authorized by a Shareholder in the account application, shares may be
redeemed upon request made by the Shareholder by telephone to the Transfer Agent
at 1-800-472-0577, or by contacting a Participating Dealer. Shareholders may not
close their accounts by telephone.

Neither the Trust, the Distributor nor the Transfer Agent will be responsible
for any loss, liability, cost or expense for acting upon wire instructions or
upon telephone instructions that it reasonably believes to be genuine. The
Trust, the Distributor and the Transfer Agent will each employ reasonable
procedures to confirm that instructions communicated by telephone are genuine,
including requiring a form of personal identification prior to acting upon
instructions received by telephone and recording telephone instructions. The
Trust, the Distributor or Transfer Agent may be liable for losses resulting from
fraudulent or unauthorized instructions if it does not employ these procedures.

If market conditions are extraordinarily active, or other extraordinary
circumstances exist, and a shareholder experiences difficulties placing
redemption orders by telephone, the shareholder may wish to consider placing an
order by mail.

SYSTEMATIC WITHDRAWAL PLAN

A systematic withdrawal plan can be established for a Portfolio account. Under
the plan, redemptions can be automatically processed from accounts (monthly,
quarterly, semi-annually or annually) by check or by ACH transfer with a minimum
redemption amount of $100. The Portfolio account must maintain a minimum balance
of $10,000 at all times while the systematic withdrawal plan is in effect.

OTHER INFORMATION REGARDING REDEMPTIONS

All redemption orders are effected at the net asset value per share next
determined after receipt and effectiveness of a valid request for redemption, as
described above. A redemption order will be effective on the same Business Day
it is received if it is received by the Transfer Agent before 4:00 p.m. Eastern
time; otherwise, the redemption order will be effective on the following
Business Day. Net asset value per share is determined as of the close of trading
on the New York Stock Exchange (currently 4:00 p.m. Eastern time) on each
Business Day. Payment to shareholders for shares redeemed will be made within
seven days after receipt by the Transfer Agent of the redemption request in good
order. Participating Dealers may impose an earlier cut-off time for receipt of
redemption orders directed through them to allow for processing and transmittal
of these orders to the Distributor for effectiveness the same day.

At various times, a Portfolio may be requested to redeem shares for which it has
not yet received good payment. In such circumstances, redemption proceeds will
be forwarded upon collection of payment for the shares; collection of payment
may take 10 or more days. The Portfolios intend to pay cash for all shares
redeemed, but under abnormal conditions which make payment in cash unwise,
payment may be made wholly or partly in portfolio securities with a market value
equal to the redemption price. In such cases, an investor may incur brokerage
costs in converting such securities to cash.
<PAGE> 55

Due to the relatively high cost of handling small investments, the Trust
reserves the right to redeem, at net asset value, the shares of any shareholder
if, because of redemptions of shares by or on behalf of the shareholder, the
account of such shareholder in a Portfolio has a value of less than $1,000.
Before the Trust exercises its right to redeem such shares and send the proceeds
to the shareholder, the shareholder will be given notice that the value of the
shares in his or her account is less than the minimum amount and will be allowed
60 days to make an additional investment in the Portfolio in an amount which
will increase the value of the account to at least $1,000.

See "Purchase and Redemption of Shares" in the Statement of Additional
Information for examples of when the right of redemption may be suspended.

PERFORMANCE

GENERAL

From time to time the Portfolios may advertise yield and total return. The Short
Term Municipal Bond Fund and the Idaho Municipal Bond Fund each may also
advertise a "taxable equivalent yield." These figures are based on historical
earnings and are not intended to indicate future performance. No representation
can be made concerning actual future yields or returns. The yield of each
Portfolio refers to the income generated by a hypothetical investment, net of
any sales charge, in such Portfolio over a thirty day period. This income is
then "annualized," i.e., the income over thirty days is assumed to be generated
over one year and is shown as a percentage of the investment.

TAXES

The following summary of federal income tax consequences is based on current tax
laws and regulations, which may be changed by legislative,
<PAGE> 56

judicial or administrative action. No attempt has been made to present a
detailed explanation of the federal, state or local income tax treatment of the
Portfolios or their shareholders. Accordingly, shareholders are urged to consult
their tax advisers regarding specific questions as to federal, state and local
income taxes. State and local tax consequences of an investment in a Portfolio
may differ from the federal income tax consequences described below. Additional
information concerning taxes is set forth in the Statement of Additional
Information.

TAX STATUS OF THE PORTFOLIOS

TAX STATUS OF DISTRIBUTIONS BY THE EQUITY FUND, BALANCED FUND, INTERMEDIATE TERM
BOND FUND, AND SHORT TERM BOND FUND

The sale, exchange or redemption of Portfolio shares is a taxable transaction to
the shareholder.

TAX STATUS OF DISTRIBUTIONS BY THE SHORT TERM MUNICIPAL BOND FUND AND IDAHO
MUNICIPAL BOND FUND

Any dividends paid out of net short-term capital gains and realized market
discount or out of any income
<PAGE> 57

realized by a Portfolio on taxable securities will be taxable to shareholders as
ordinary income (whether received in cash or in additional shares) to the extent
of the Portfolio's earnings and profits and will not qualify for the
dividends-received deduction for corporate shareholders. Distributions to
shareholders of net capital gains of a Portfolio also will not qualify for the
corporate dividends-received deduction and will be taxable to shareholders as
long-term capital gain, whether received in cash or additional shares, and
regardless of how long a shareholder has held the shares.

An investment in the Short Term Municipal Bond Fund or the Idaho Municipal Bond
Fund is not intended to constitute a balanced investment program. Shares of
those Portfolios would not be suitable for tax-exempt institutions and may not
be suitable for retirement plans qualified under Section 401 of the Code, H.R.
10 plans and individual retirement accounts since such plans and accounts
generally qualify for deferral of taxes on income or gains and, therefore, not
only would not gain any additional benefit from the dividends of those
Portfolios being tax-exempt, but also such dividends would be taxable when
distributed to the beneficiary.

ADDITIONAL FEDERAL TAX INFORMATION

Dividends declared by each Portfolio in October, November or December of any
year and payable to

shareholders of record on a date in any such month will be deemed to have been
paid by the Portfolio and received by the shareholders on December 31 of that
year if paid by the Portfolio at any time during the following January.

Each Portfolio intends to make sufficient distributions prior to the end of each
calendar year to avoid liability for federal excise tax.

Shareholders should consult their tax advisers concerning the state and local
tax consequences of investment in a Portfolio, which may differ from federal
income tax consequences described above.

IDAHO TAXES

GENERAL INFORMATION

THE TRUST

the assets of such portfolio as are declared in the discretion of the Trust's
Board of Trustees. When issued and paid for, shares will be fully paid and non-
assessable by the Trust and will have no preference, conversion or preemptive
rights. The Trust Agreement authorizes the Board of Trustees to classify or
reclassify any shares of any portfolio into one or more other portfolio and to
create classes in such portfolio. Each portfolio is divided into two classes of
shares, the Institutional and Retail Class A classes. Both classes of a
Portfolio have a common investment objective and investment limitations and
policies. Shares of the Retail Class A class are offered by this prospectus.
Shares of the Institutional class are offered through a separate prospectus.

TRUSTEES OF THE TRUST

VOTING RIGHTS

All shares of the Trust have equal voting rights and will be voted in the
aggregate, and not by series or class, except where voting by series or class is
required by law or where the matter involved affects only one series or class.
The Trust is not required under Massachusetts law to hold annual meetings of
shareholders, but will hold shareholder meetings if required to do so by the
1940 Act. Special meetings may be called for a specific Portfolio for purposes
such as changing fundamental policies or approving certain contracts.
Shareholders will be permitted to call a meeting of shareholders and will
receive assistance in communicating with other shareholders, for the purpose of
voting upon the removal of any Trustee as long as such shareholder request is in
writing and is signed by shareholders of record of no less than 10% of the
Trust's outstanding shares.

REPORTING

The Trust issues unaudited financial information semiannually and audited
financial statements annually. The Trust furnishes proxy statements and other
reports to shareholders of record.

SHAREHOLDER INQUIRIES

Shareholder inquiries should be directed to SEI Financial Services Company in
writing to 680 East Swedesford Road, Wayne, PA 19087 or by calling
1-800-472-0577.

DIVIDENDS

Shareholders automatically receive all income dividends and capital gains
distributions in additional shares of the Portfolio making the distribution
(which will be issued at the net asset value next determined following the
record date), unless the shareholder has elected to take such payment in another
form. Shareholders may change their election by providing written notice to the
Transfer Agent at least 15 days prior to the change.

for a dividend or the distribution of capital gains, a shareholder will pay the
full price for the shares and receive some portion of the price back as a
taxable dividend or distribution.

THE TRANSFER AGENT

COUNSEL AND INDEPENDENT ACCOUNTANTS

Ballard Spahr Andrews & Ingersoll serves as counsel to the Trust. Deloitte &
Touche LLP serves as independent accountants of the Trust.

CUSTODIAN

DESCRIPTION OF CERTAIN PERMITTED INVESTMENTS

EQUITY SECURITIES--Equity securities include common stock, preferred stock and
other securities that are convertible to or grant the right to acquire common
stock or preferred stock.

instrumentalities, corporations, municipalities and other borrowers.

MONEY MARKET FUNDS--Money market funds are open-end investment companies that
are continuously engaged in the issuance of shares. In connection with
management of their daily cash positions, a Portfolio may invest in money market
fund shares having investment objectives and policies consistent with those of
the Portfolio. Investments by a money market fund are subject to limitations
imposed under regulations adopted by the Securities and Exchange Commission.
Under these regulations, money market funds may only acquire obligations that
present minimal credit risk and that are "eligible securities," which means they
are (i) rated, at the time of investment, by at least two nationally recognized
security rating organizations (one if it is the only organization rating such
obligation) in the highest rating category or, if unrated, determined to be of
comparable quality (a "first tier security"), or (ii) rated according to the
foregoing criteria in the second highest rating category or, if unrated,
determined to be of comparable quality ("second tier security"). A security is
not considered to be unrated if the issuer has outstanding obligations of
comparable priority and security that have a short-term rating. In the case of
taxable money market funds, investments in second tier securities are subject to
the further constraints in that (i) no more than 5% of a Fund's assets may be
invested in second tier securities and (ii) any investment in securities of any
one such issuer is limited to the greater of 1% of the Fund's total assets or $1
million. A taxable money market fund may also hold more than 5% of its assets in
first tier securities of a single issuer for three "business days" (that is, any
day other than a Saturday, Sunday or customary business holiday).

General obligation bonds are backed by the taxing power of the issuing
municipality. Revenue bonds are backed by the revenues of a project or facility
(tolls from a bridge, for example). Certificates of participation represent an
interest in an underlying obligation or commitment, such as an obligation issued
in connection with a leasing arrangement. Private activity bonds are bonds that
are issued by municipalities, the proceeds of which are used in an activity
considered a nonessential government function under the Internal Revenue Code,
which may include activities such as construction and operation of airports,
convention centers, auditoriums, hospitals and mass commuting facilities. The
payment of principal and interest on private activity and industrial development
bonds generally is dependent solely on the ability of a facility's user to meet
its financial obligations and the pledge, if any, of real and personal property
as security for such payment.

Economic, business or political developments might affect all municipal
securities of a similar type. To the extent that a significant portion of the
Short Term Municipal Bond Fund's or Idaho Municipal Bond Fund's assets are
invested in municipal securities payable from revenue on similar projects, those
Portfolios will be subject to the peculiar risks
<PAGE> 61

presented by such projects to a greater extent than they would be if its assets
were not so invested. For example, certain municipal securities may be
obligations of issuers who rely in whole or in part on ad valorem real property
taxes as a source of revenue and legislation may have the effect of limiting ad
valorem taxes on real property or restricting the ability of taxing entities to
increase real property tax revenues. Municipal securities that are payable only
from the revenues derived from a particular facility, such as a utility or
housing project, may be adversely affected by laws or regulations that make it
more difficult for the particular facility to generate revenues sufficient to
pay such interest and principal, including laws and regulations that limit the
amount of fees, rates or other charges that may be imposed for use of the
facility or that increase competition among facilities of that type or that
limit or otherwise have the effect of reducing the use of such facilities
generally, thereby reducing the revenues generated by the particular facility.
If the payment of interest and principal on municipal securities is insured in
whole or in part by a government created fund, the municipal securities may be
adversely affected by laws or regulations that restrict the aggregate insurance
proceeds available for payment of principal and interest in the event of a
default on such securities. State and local tax revenues generally mirror
economic conditions and may be adversely affected by regional or national
recessions.

are supported by the right of the issuer to borrow from the Treasury (e.g.,
Federal Farm Credit Bank), while still others are supported only by the credit
of the instrumentality (e.g., Federal National Mortgage Association). Guarantees
of principal by agencies or instrumentalities of the U.S. Government may be a
guarantee of payment at the maturity of the obligation so that in the event of a
default prior to maturity there might not be a market and thus no means of
realizing on the obligation prior to maturity. Guarantees as to the timely
payment of principal and interest do not extend to the value or yield of these
securities nor to the value of a Portfolio's shares.

For additional information regarding permitted investments see "Description of
Permitted Investments" in the Trust's Statement of Additional Information.
<PAGE> 63

APPENDIX

DESCRIPTION OF CORPORATE AND MUNICIPAL BOND RATINGS

DESCRIPTION OF COMMERCIAL PAPER RATINGS

Commercial paper issuers rated Prime-1 and Prime-2 by Moody's are judged by
Moody's to be of the two highest quality ratings on the basis of relative
repayment capacity.

DESCRIPTION OF MUNICIPAL NOTE RATINGS

Amortization schedule (the larger the final maturity relative to other
maturities the more likely it will be treated as a note).
<PAGE> 64

Source of Payment (the more dependent the issue is on the market for its
refinancing the more likely it will be treated as a note).

TABLE OF CONTENTS
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
Summary.......................................... 2
Financial Highlights............................. 5
The Trust........................................ 8
Investment Objectives and Policies............... 8
Risk Factors..................................... 13
Investment Limitations........................... 14
Fundamental Policies............................. 15
The Adviser...................................... 15
The Administrator................................ 17
The Distributor.................................. 17
Purchase, Exchange and Redemption of Shares...... 18
Performance...................................... 25
Taxes............................................ 25
General Information.............................. 27
Description of Certain Permitted Investments..... 29
Appendix......................................... 33
</TABLE>
<PAGE> 66

<TABLE>
<S> <C>
[SEI ACHIEVEMENT FUNDS LOGO]

THIS FUND IS OFFERED THE ACHIEVEMENT FUNDS
IN CONJUNCTION WITH THE ACHIEVEMENT FUNDS TRUST
THE ACHIEVEMENT FUNDS RETAIL
(PORTFOLIOS OF CERTAIN PROSPECTUS
MUTUAL FUNDS) TO AFFORD EQUITY FUND
A CONVENIENT RANGE OF BALANCED FUND
INVESTMENT CHOICES INTERMEDIATE TERM BOND FUND
TO INVESTORS. SHORT TERM BOND FUND
SHORT TERM MUNICIPAL BOND FUND
IDAHO MUNICIPAL BOND FUND
JUNE 1, 1996
DISTRIBUTED BY
SEI FINANCIAL SERVICES COMPANY
680 EAST SWEDESFORD ROAD
WAYNE, PENNSYLVANIA 19087-1658
800-472-0577
ACH-F-009-03
</TABLE>
<PAGE> 67
THE ACHIEVEMENT FUNDS TRUST

INVESTMENT ADVISER:
FIRST SECURITY INVESTMENT MANAGEMENT, INC.

ADMINISTRATOR:
SEI FUND RESOURCES
DISTRIBUTOR:
SEI FINANCIAL SERVICES COMPANY

CUSTODIAN:
CORESTATES BANK, N.A.

THIS STATEMENT OF ADDITIONAL INFORMATION is not a prospectus. It is intended to
provide additional information regarding activities and operations of The
Achievement Funds Trust (the "Trust"), and should be read in conjunction with
the Trust's Prospectuses dated June 1, 1996 for the Trust's Equity Fund,
Balanced Fund, Intermediate Bond Fund, Short Term Bond Fund, Short Term
Municipal Bond Fund and Idaho Municipal Bond Fund and for the Trust's Municipal
Bond Fund (collectively the "Portfolios," and each a "Portfolio"). The
Prospectuses may be obtained through SEI Financial Services Company, 680 East
Swedesford Road, Wayne, PA 19087.

TABLE OF CONTENTS

<TABLE>
<S> <C>
THE TRUST AND DESCRIPTION OF SHARES......................................... 3
DESCRIPTION OF PERMITTED INVESTMENTS........................................ 3
INVESTMENT POLICIES AND LIMITATIONS......................................... 10
THE ADVISER................................................................. 12
THE ADMINISTRATOR........................................................... 13
DISTRIBUTION................................................................ 14
TRUSTEES AND OFFICERS OF THE TRUST.......................................... 15
PERFORMANCE................................................................. 18
PURCHASE AND REDEMPTION OF SHARES........................................... 20
DETERMINATION OF NET ASSET VALUE............................................ 20
TAXES ................................................................... 21
PORTFOLIO TRANSACTIONS...................................................... 27
LIMITATION OF TRUSTEE'S LIABILITY........................................... 28
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES......................... 29
COUNSEL TO THE TRUST........................................................ 29
FINANCIAL STATEMENTS........................................................ 29
</TABLE>

June 1, 1996
<PAGE> 68
THE TRUST AND DESCRIPTION OF SHARES

The Achievement Funds Trust (formerly known as The FSB Funds) was organized as
an unincorporated business trust under the laws of the Commonwealth of
Massachusetts pursuant to a Master Trust Agreement dated December 16, 1988,
which agreement was amended and restated on October 7, 1994 and was further
amended on December 1, 1994 (as further amended from time to time, the "Trust
Agreement"). Each of the Portfolios is a series of the shares of the Trust, and
the shares of each Portfolio are divided into Institutional and Retail Class A
classes (collectively, the "shares"). The Trust's Municipal Bond Fund has not
commenced operations and the Trust is not currently offering shares of that
portfolio to the public.

The shares do not have cumulative voting rights, which means that holders of
more than 50% of the shares voting for the election of Trustees can elect all
Trustees. Shares are transferable but have no preemptive, conversion or
subscription rights. Shareholders generally vote by series, except that
shareholders vote in the aggregate with respect to the election of Trustees and
the selection of independent public accountants and shareholders vote as a class
with respect to matters affecting a class of a series of Portfolio's shares.

The Trustees of the Trust were elected at the first meeting of shareholders
following the commencement of the Trust's operations. The Trustees so elected
are to serve during the lifetime of the Trust or until they die, resign or are
removed, and Trustees may elect their own successors. Under the Trust Agreement,
shareholders of record of no less than two-thirds of the outstanding shares of
the Trust may remove a Trustee through a declaration in writing or by vote cast
in person or by proxy at a meeting called for that purpose. The Trust Agreement
also requires the Trustees to call a meeting of shareholders for the purpose of
voting upon the question of removal of any Trustee when requested in writing to
do so by the shareholders of record of not less than 10% of the Trust's
outstanding shares.

Massachusetts law provides that shareholders, under certain circumstances, could
be held personally liable for the obligations of the Trust. However, the Trust
Agreement 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 a Trustee. The
Trust Agreement provides for indemnification from the Trust's property for all
losses and expenses of any shareholder held personally liable for the
obligations of the Trust. Thus, the risk of a shareholder's incurring financial
loss on account of shareholder liability is limited to circumstances in which
the Trust would be unable to meet its obligations, a possibility that the
Trust's management believes is remote. Upon payment of any liability incurred by
the Trust, the shareholder paying the liability will be entitled to
reimbursement from the general assets of the Trust. The Trustees intend to
conduct the operations of the Trust in such a way so as to avoid, as far as
possible, liability of the shareholders for liabilities of the Trust.

DESCRIPTION OF PERMITTED INVESTMENTS

A Portfolio may make the following investments if, and to the extent, such
investments are covered by the Portfolio's investment policies described in the
Prospectus.

AMERICAN DEPOSITARY RECEIPTS ("ADRS") -- ADRs are securities, typically issued
by a U.S. financial institution (a "depositary"), that evidence ownership
interests in a security or a pool of securities issued by a foreign issuer and
deposited with the depositary. ADRs may be available through "sponsored" or

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"unsponsored" facilities. A sponsored facility is established jointly by the
issuer of the security underlying the receipts and a depositary, whereas an
unsponsored facility may be established by a depositary without participation by
the issuer of the underlying security. Holders of unsponsored depositary
receipts generally bear all the costs of the unsponsored facility. The
depositary of an unsponsored facility frequently is under no obligation to
distribute shareholder communications received from the issuer of the deposited
security or to pass through, to the holders of the receipts, voting rights with
respect to the deposited securities.

ASSET-BACKED SECURITIES -- Asset-backed securities are securities secured by
non-mortgage assets such as company receivables, truck and auto loans, leases
and credit card receivables. Such securities are generally issued as
pass-through certificates, which represent undivided fractional ownership
interests in the underlying pools of assets. Such securities also may be debt
instruments, which are also known as collateralized obligations and are
generally issued as the debt of a special purpose entity, such as a trust,
organized solely for the purpose of owning such assets and issuing such debts.

Asset-backed securities are not issued or guaranteed by the U.S. Government or
its agencies or instrumentalities; however, the payment of principal and
interest on such obligations may be guaranteed up to certain amounts and for a
certain period by a letter of credit issued by a financial institution (such as
a bank or insurance company) unaffiliated with the issuers of such securities.
The purchase of asset-backed securities raises risk considerations peculiar to
the financing of the instruments underlying such securities. For example, there
is a risk that another party could acquire an interest in the obligations
superior to that of the holders of the asset-backed securities. There also is
the possibility that recoveries on repossessed collateral may not, in some
cases, be available to support payments on those securities. In addition, credit
card receivables are unsecured obligations of the card holder. Asset-backed
securities entail prepayment risk, which may vary depending on the type of
asset, but is generally less than the prepayment risk associated with
mortgage-backed securities.

COVERED CALL OPTIONS -- A call option gives the purchaser of the option the
right to buy, and the writer of the option the obligation to sell, the
underlying security at any time during the option period. In a covered call
option, the writer of the option owns a sufficient amount of the underlying
security to "cover" the option. The premium paid to the writer is the
consideration for undertaking the obligations under the option contract. The
initial sale of an option contract is an "opening transaction." In order to
close out an option position, the Portfolio may enter into a "closing
transaction," which is simply the purchase of an option contract on the same
security with the same exercise price and expiration date as the option contract
originally opened.

The Portfolios may write covered call options as a means of increasing the yield
on its portfolio and as a means of providing limited protection against
decreases in its market value. When it sells an option, if the underlying
securities do not increase or decrease to a price level that would make the
exercise of the option profitable to the holder thereof, the option generally
will expire without being exercised and the Portfolio will realize as profit the
premium received for such option. When a call option of which the Portfolio is
the writer is exercised, it will be required to sell the underlying securities
to the option holder as the strike price, and will not participate in any
increase in the price of such securities above the strike price.

The Portfolios may write options on an exchange or over-the-counter.
Over-the-counter options ("OTC options") differ from exchange-traded options in
several respects. They are transacted directly with dealers and not with a
clearing corporation, and therefore entail the risk of non-performance by the
dealer.

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OTC options are available for a greater variety of securities and for a wider
range of expiration dates and exercise prices than are available for
exchange-traded options. Because OTC options are not traded on an exchange,
pricing is done normally by reference to information from a market maker.

ILLIQUID INVESTMENTS -- Illiquid investments are investments that cannot be sold
or disposed of in the ordinary course of business at approximately the price at
which they are valued. Under the supervision of the Trustees, the Trust's
investment adviser (the "Adviser"), determines the liquidity of each Portfolio's
investments and, through reports from the Adviser, the Trustees monitor
investments in illiquid instruments. In determining the liquidity of a
Portfolio's investments, the Adviser may consider various factors including (1)
the frequency of trades and quotations, (2) the number of dealers and
prospective purchasers in the marketplace, (3) dealer undertakings to make a
market, (4) the nature of the security (including any demand or tender
features); (5) the nature of the marketplace for trades (including the ability
to assign or offset a Portfolio's rights and obligations relating to the
investment); and (6) general credit quality. Investments currently considered by
the Trust to be illiquid include repurchase agreements not entitling the holder
to payment of principal and interest within seven days, non-government stripped
fixed-rate mortgage-backed securities and government stripped fixed-rate
mortgage-backed securities, loans and other direct debt instruments, over the
counter options and swap agreements. Although restricted securities and
municipal lease obligations are sometimes considered illiquid, the Adviser may
determine certain restricted securities and municipal lease obligations to be
liquid. In the absence of market quotations, illiquid investments are priced at
fair value as determined in good faith by the Adviser pursuant to guidelines
established by the Board of Trustees. If, as a result of a change in values, net
assets or other circumstances, a Portfolio were in a position where more than
15% of its assets were invested in illiquid securities it would seek to take
appropriate steps to protect liquidity.

MORTGAGE-BACKED SECURITIES -- Mortgage-backed securities are instruments that
entitle the holder to a share of all interest and principal payments from
mortgages underlying the security. The mortgages backing these securities
include conventional thirty-year fixed rate mortgages, graduated payment
mortgages, and adjustable rate mortgages. During periods of declining interest
rates, prepayment of mortgages underlying mortgage-backed securities can be
expected to accelerate. Prepayment of mortgages which underlie securities
purchased at a premium often results in capital losses, while prepayment of
mortgages purchased at a discount often results in capital gains. Because of
these unpredictable prepayment characteristics, it is often not possible to
predict accurately the average life or realized yield of a particular issue.

Collateralized Mortgage Obligations ("CMOs") are a type of mortgage-backed
security. CMOs are debt obligations or multiclass pass-through certificates
issued by agencies or instrumentalities of the U.S. Government or by private
originators or investors in mortgage loans. In a CMO, series of bonds or
certificates are usually issued in multiple classes. Principal and interest paid
on the underlying mortgage assets may be allocated among the several classes of
a CMO in a variety of ways. Each class of a CMO, often referred to as a
"tranche", is issued with a specific fixed or floating coupon rate and has a
stated maturity or final distribution date. Principal payments on the underlying
mortgage assets may cause CMOs to be retired substantially earlier then their
stated maturities or final distribution dates, resulting in a loss of all or
part of any premium paid.

There are particular risk factors underlying investments in mortgage-backed
securities. Due to the possibility of prepayments of the underlying mortgage
instruments, market participants generally refer to an estimated average life
for mortgage-backed securities that is shorter than their stated maturity. An
average life estimate is a function of an assumption regarding anticipated
prepayment patterns, based upon

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current interest rates, current conditions in the relevant housing markets and
other factors. The assumption is necessarily subjective, and thus different
market participants can produce different average life estimates with regard to
the same security. There can be no assurance that estimated average life will be
a security's actual average life.

SECURITIES LENDING -- In order to generate additional income, the Portfolios may
lend securities which they own pursuant to agreements requiring that the loan be
continuously secured by collateral consisting of cash or securities of the U.S.
Government or its agencies equal to at least 100% of the market value of the
securities lent. The Portfolios continue to receive interest on the securities
lent while simultaneously earning interest on the investment of cash collateral.
Collateral is marked to market daily. There may be risks of delay in recovery of
the securities or even loss of rights in the collateral should the borrower of
the securities fail financially or become insolvent.

VARIABLE AND FLOATING RATE INSTRUMENTS -- Certain obligations may carry variable
or floating rates of interest, and may involve a conditional or unconditional
demand feature. Such instruments bear interest at rates which are not fixed, but
which vary with changes in specified market rates or indices. The interest rates
on these securities may be reset daily, weekly, quarterly or some other reset
period, and may have a floor or ceiling on interest rate changes. There is a
risk that the current interest rate on such obligations may not accurately
reflect existing market interest rates. A demand instrument with a demand notice
exceeding seven days may be considered illiquid if there is no secondary market
for such security.

YANKEE OBLIGATIONS -- Yankee Obligations are U.S. dollar-denominated instruments
of foreign issuers who either register with the Securities and Exchange
Commission or issue securities under Rule 144(A). These instruments consist of
debt securities (including preferred or preference stock of non-governmental
issuers), certificates of deposit, fixed time deposits and bankers' acceptances
issued by foreign banks, and debt obligations of foreign governments or their
subdivisions, agencies and instrumentalities, international agencies and
supranational entities. Some securities issued by foreign governments or their
subdivisions, agencies and instrumentalities may not be backed by the full faith
and credit of the foreign government.

Investing in the securities of issuers based in any foreign country involves
special risks and considerations not typically associated with investing in U.S.
companies. These include risks resulting from differences in accounting,
auditing and financial reporting standards, lower liquidity than U.S. fixed
income or debt securities, the possibility of nationalization, expropriation or
confiscatory taxation, adverse changes in investment or exchange control
regulations and political instability. There may be less publicly available
information concerning foreign issuers of securities held by a Portfolio than is
available concerning U.S. issuers. Purchases and sales of foreign securities and
dividends and interest payable on those securities may be subject to foreign
taxes and taxes may be withheld from dividend and interest payments on those
securities. Foreign securities often trade with less frequency and volume than
domestic securities and therefore may exhibit greater price volatility and a
greater risk of liquidity.

The Yankee Obligations selected for a Portfolio will adhere to the same quality
standards as those utilized for the selection of domestic debt obligations.

WHEN-ISSUED AND DELAYED DELIVERY SECURITIES -- When-issued or delayed delivery
basis transactions involve the purchase of an instrument with payment and
delivery taking place in the future. Delivery of and payment for these
securities may occur a month or more after the date of the purchase commitment.
A Portfolio will maintain with the custodian a separate account with liquid,
high-grade debt securities or cash in an amount at least equal to these
commitments. The interest rate realized on these securities is

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fixed as of the purchase date and no interest accrues to a Portfolio before
settlement. These securities are subject to market fluctuation due to changes in
market interest rates and it is possible that the market value at the time of
settlement could be higher or lower than the purchase price if the general level
of interest rates has changed. Although a Portfolio generally purchases
securities on a when-issued or forward commitment basis with the intention of
actually acquiring securities, it may dispose of a when-issued security or
forward commitment prior to settlement if it deems appropriate.

SPECIAL CONSIDERATIONS RELATING TO IDAHO MUNICIPAL SECURITIES

The following information as to certain risk factors relating to the State of
Idaho is given to investors in view of the policy of the Idaho Municipal Bond
Fund of concentrating its investments in Idaho issuers. Such information
constitutes only a brief summary, does not purport to be a complete description
and is based on information from official statements relating to securities
offerings of Idaho issuers available as of the date of this Statement of
Additional Information. The Trust has not independently verified any of the
information contained in those official statements.

Idaho Economic Overview and Outlook

After slowing from its record-setting pace of the last nine years, Idaho's
economy more closely paralleled the nations's growth last year. The increase in
the state's employment and personal income moderated to 3.5% and 6.5%,
respectively, last year. Idaho's general economic outlook for 1996 and the next
two years is for a continuation of these lower, but quite respectable, gains in
employment income. As the economy enters a period of more sustainable economic
growth, net in-migration will slow to under 2% per annum from its current 2.5%
rate. The national economy's soft landing engineered by the Federal Reserve
Board resulted in real Gross Domestic Product increasing 2% for 1995. With
aggressive anti-inflation policies by the Federal Reserve and budget impasses,
real Gross Domestic Product will continue to rise at this slower rate, and the
consumer price index measured inflation rate will be between 2.3 and 2.5%.

Current State Debt Outstanding

The State of Idaho has no outstanding general obligation bond debt.

Debt of State Government and Quasi-governmental Agencies, Authorities and
Commissions

1. The Idaho Housing and Finance Association

The Idaho Housing and Finance Association (formerly Idaho Housing
Agency) (the "IHFA"), an independent public body, corporate and politic, was
created in 1972, by the Idaho Legislature under the provisions of Chapter 62,
Title 67 of the Idaho Code, as amended (the "Act"). The Act empowers the IHFA,
among other things, to issue notes and bonds in furtherance of its purpose of
providing safe and sanitary housing for persons and families of low income
residing in the State of Idaho, and, in addition, to coordinate and encourage
cooperation among private enterprise and State and local governments to sponsor,
build and rehabilitate residential housing for such persons and families.

The IHFA is governed by seven commissioners, appointed for alternating
four-year terms by the Governor of the State, one of whom is selected chairman
by the Governor. The vice chairman and secretary-treasurer are elected annually
by the entire Board of Commissioners.

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The IHFA has no taxing power and neither the State nor any political subdivision
thereof is liable for its bond or other indebtedness. At the time of the IHFA's
inception, the Idaho Legislature enacted a continuing appropriation of the State
Sales Tax Account as additional collateral for designated bond issues or
portions thereof. The Legislature has eliminated the continuing appropriations
for all IHFA bonds issued on or after January 1, 1996.

No claims have ever been made by the IHFA for state sales tax funds and
none are anticipated. The IHFA's mortgage loans are either guaranteed by Federal
agencies, insured by private mortgage guarantee policies or collateralized by
the IHFA's fund balances. The aggregate amount of bond debt supported by Idaho
State Sales Tax totalled $90 million and $82 millon at December 31, 1995 and
1994, respectively.

As of December 31, 1995, 91.16% of the total bond debt has been used to
purchase single family mortgages, 8.46% has provided the construction and
permanent financing for multifamily developments.

As of December 31, 1995, the Agency's outstanding bond indebtedness was
$999.9 million. Funds balances, including reserves, were $95.8 million.

2. The Idaho Health Facilities Authority

Organized in 1972, the Idaho Health Facilities Authority (the
"Authority") is an independent public body, politic and corporate, constituting
a public instrumentality of the State of Idaho, functioning without any
financial support form the Legislature.

Seven appointees of the Governor comprise the Authority and they serve
staggered five-year terms. The Executive Director is hired by and serves at the
pleasure of the Authority members. The Authority has the power, among others, to
issue tax-exempt revenue bonds or notes and re-lend the funds to nonprofit and
governmental health facilities for the purposes of construction of or
improvements to facilities, acquisition of equipment, or for refinancing of
outstanding capital debt.

These debt instruments do not directly, indirectly, or contingently
obligate the State or any political subdivision thereof to levy any form of
taxation or to make any appropriations for the payment thereof and any such levy
or appropriation is prohibited.

As of December 31, 1995, the Authority's outstanding bond indebtedness
was $208,728,687.

3. The Idaho State Building Authority

The Idaho State Building Authority (the "Authority") is a public
corporation of the State established in 1974 by the State of Idaho under the
provisions of the Idaho State Building Authority Act. The Act empowers the
Authority, among other things, to issue notes and bonds to finance construction
or acquisition of facilities for rental to State governmental bodies with the
approval of the Legislature.

The Authority is governed by seven commissioners appointed by the
Governor to serve staggered five-year terms. The Authority, in turn, appoints an
executive director to administer the agency.

The bonded debt of the Authority is not a debt or obligation of the
State of Idaho, or of any department, board, commission, agency, political
subdivision, body corporate and politic or

S-7
<PAGE> 74
instrumentality of or municipality or county within the State of Idaho, nor
shall the bonded debt be payable out of any funds other than those of the
Authority. The Authority has no taxing power.

As of December 31, 1995, the Authority's outstanding bond indebtedness
was $59,149,249.

4. The Idaho State Lottery

The Idaho State Lottery was established in 1989. Total sales for 1995
were $88.5 million. Net proceeds for that year totalled $18 million and are
divided equally between the Permanent Building Account, for use in carrying out
state public works projects and the Public School Income Account for
distribution to Idaho's Public SchooL Districts.

Idaho Code stipulates that the State Treasurer will invest Lottery
receipts and the interest generated on the Lottery Account balance will be
transferred to the General fund. Interest earnings for 1995 were approximately
$438,500.

5. Public Employees' Retirement System of Idaho

The Public Employees Retirement System of Idaho ("PERSI") covers
eligible employees who work 20 hours per week or more. The membership of PERSI
includes employees of the State of Idaho, including state colleges and
universities, employees of political subdivisions, (e.g., counties, cities,
hospitals) and local school districts. As of June, 1995, PERSI had 55,881 active
members, 7,564 inactive (of whom 3,708 are entitled to vested benefits), and
19,272 annuitants. PERSI collects contributions from employees and employers to
fund retirement, disability, death and separation benefits, as provided by
Chapter 13, Title 59, Idaho code.

As of July 1, 1995, PERSI had an unfunded actuarial liability ("UAL")
of $990.5 million ($1,106.4 million pension benefit obligation (PBO)) of which
approximately $326.9 million UAL ($365.1 million PBO) is the direct
responsibility of the State. After actuarial review, the PERSI Retirement Board
determined the current schedule of contribution rates will meet the normal cost
of the system as they accrue, and amortize the unfunded actuarial liability in
18.1 years.

The employer contribution rate in effect on July 1, 1996 is 11.61% for
General Members and 11.85% for Police Officer Members. With the exception of
police and fire fighter members, the member contribution rate is 6.97% of
salary. The employee contribution rate for police and fire fighters is 8.53% of
salary.

The PERSI actuary has confirmed that the current schedule of
contribution rates will meet the normal costs of the system as they accrue and
will amortize and fund the unfunded actuarial liability.

6. The Idaho State Insurance Fund

The Idaho State Insurance Fund (the "Fund") was created in 1917 by the
Idaho State Legislature to insure employers against liability under the Workers'
Compensation Act. Although not a legal corporation, it has been ruled as
occupying similar status to be administered without liability to the State. The
money in the Fund does not belong to the State and is not in the State Treasury
within the meaning of Article 7, Section 13 of the Constitution (State v.
Musgrave, 84 Idaho 77, 370 P.2d 778 (1962)). It is deposited with the State
Treasurer as custodian and is held by her as such for contributing employers and
S-8
<PAGE> 75
the beneficiaries of the compensation laws and for the payment of the costs of
operation of the Fund. All public employers are required by law to obtain their
workers' compensation insurance through the State Insurance Fund. Private
employers may, at their discretion, also procure workers' compensation insurance
from the Fund.

As of December 31, 1995, the Fund had a surplus (fund balance) of $135
million. The Fund has no bonded debt.

The Fund is administered by the manager, who is appointed by the
Governor. The manager of the Fund is also the trustee for the Idaho Petroleum
Clean Water Trust Fund (Trust Fund), a not-for-profit entity created in 1990 by
the legislature to insure petroleum storage tank owners and operators.
Statutorily, neither the Fund nor the state has any liability for the Trust
Fund's obligations.

As of December 31, 1995, the Trust Fund had fund balances of $30
million. The Trust Fund has no bonded debt.

INVESTMENT POLICIES AND LIMITATIONS

The following policies and limitations supplement those set forth in the
Prospectus. Unless otherwise expressly noted, whenever an investment policy or
limitation states a maximum percentage of a Portfolio's assets that may be
invested in any security or other asset, or sets forth a policy regarding
quality standards, such percentage or standard will be determined immediately
after and as a result of the Portfolio's acquisition of such security or other
asset. Accordingly, any subsequent change in values, net assets or other
circumstances will not be considered when determining whether the investment
complies with the Portfolio's investment policies and limitations.

Unless otherwise expressly noted, a Portfolio's limitations and policies are
non-fundamental. Fundamental investment policies and limitations cannot be
changed without approval by a "majority of the outstanding voting securities"
(as defined in the Investment Company Act of 1940 (the 1940 Act)) of a
Portfolio. The Portfolios have adopted the following investment limitations, in
addition to those described in the Prospectus:

FUNDAMENTAL POLICIES

No Portfolio may:

1. Make loans, including securities lending, if, as a result, more than 33
1/3% of its total assets would be lent to other parties, except that
(i) a Portfolio may purchase or hold debt instruments, and (ii) a
Portfolio may enter into repurchase agreements as described in the
Prospectus.

2. Invest in companies for the purpose of exercising control.

3. With respect to 75% of its total assets, purchase the securities of any
issuer (other than securities issued or guaranteed by the U.S.
government or any of its agencies or instrumentalities) if, as a result
(i) more than 5% of the Portfolio's total assets would be invested in
the securities of that issuer, or (ii) the Portfolio would hold more
than 10% of the outstanding voting securities of that issuer, except
that this limitation shall not be applicable of the Idaho Municipal
Bond Fund.

S-9
<PAGE> 76
4. Purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the Portfolio's
total assets would be invested in the securities of companies whose
principal business activities are in the same industry.

5. Purchase or sell real estate, real estate limited partnership
interests, commodities or commodities contracts (including commodities
future contracts), unless acquired as a result of ownership of other
securities or instruments. However, a Portfolio (other than the
Municipal Bond Fund, Short Term Municipal Bond Fund and Idaho Municipal
Bond Fund) may purchase obligations issued by companies which invest in
real estate, commodities or commodities contracts if the obligations of
such companies are permitted investments.

6. Act as an underwriter of securities of other issuers except as it may
be deemed an underwriter in selling a portfolio security.

7. Issue senior securities (as defined in the 1940 Act) except in
connection with permitted borrowing as described in the Prospectus and
this Statement of Additional Information or as permitted by rule,
regulation, order or interpretation of the Securities and Exchange
Commission (the "SEC").

THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.

No Portfolio may:

1. Pledge, mortgage or hypothecate assets except to secure temporary
borrowings permitted as described in its Prospectus.

2. Sell securities short, unless the Portfolio undertaking such
transaction owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short.

3. Purchase securities of other investment companies, except for the
purchase of shares of money market, U.S. equity index or tax-exempt
investment companies as described in the Prospectus.

4. Purchase any security while borrowings (including reverse repurchase
agreements) representing more than 5% of its total assets are
outstanding.

5. Purchase securities on margin, except that a Portfolio may obtain such
short term credits as are necessary for the clearance of transactions.

6. Engage in securities repurchase transactions or make loans, but this
limitation does not apply to the purchase of debt securities.

7. Purchase or retain the securities of an issuer if, to the knowledge of
the Trust, an officer, director, partner or Trustee of the Trust, or
any investment adviser of the Trust, owns beneficially more than 1/2 of
1% of the share or securities of such issuer and all such officers,
directors, partners or Trustees owning more than 1/2 of 1% of such
shares or securities together own more than 5% of such shares or
securities.

S-10
<PAGE> 77
8. Purchase securities of any company which has (with its predecessors) a
record of less than three years continuing operations if, as a result,
more than 5% of the total assets of such Portfolio (taken at fair
market value) would be invested in such securities.

9. Invest in interests in oil, gas or other mineral exploration or
development programs or oil, gas or mineral leases.

10. Purchase warrants, puts, calls, straddles, spreads or combinations
thereof, except that the Intermediate Term Bond Fund, the Short Term
Bond Fund, the Short Term Municipal Bond Fund and the Idaho Municipal
Bond Fund may invest in standby commitments and the Equity Fund and the
Balanced Fund may write (sell) covered call options.

THE ADVISER

The Trust and First Security Investment Management, Inc. (the "Adviser") have
entered into an advisory agreement dated as of February 1, 1989 and an amendment
to the advisory agreement dated as of December 27, 1994 (as further amended from
time to time, the "Advisory Agreement"). The Advisory Agreement provides that
the Adviser shall not be protected against any liability to the Trust or its
shareholders by reason of willful misfeasance, bad faith or gross negligence on
its part in the performance of its duties or from reckless disregard of its
obligations or duties thereunder.

The Advisory Agreement provides that if, for any fiscal year, the expenses of
any Portfolio (including amounts payable to the Adviser but excluding interest,
taxes, brokerage, litigation, and other extraordinary expenses) exceed
limitations established by any applicable statute or regulatory authority of any
jurisdiction in which the shares are qualified for offer and sale, the Adviser
will bear the amount of such excess. The Adviser will not be required to bear
expenses of the Trust to an extent which would result in a Portfolio's inability
to qualify as a regulated investment company under provisions of the Internal
Revenue Code.

The continuance of the Advisory Agreement must be specifically approved at least
annually (i) by the vote of the Trustees or by vote of a majority of the
outstanding voting securities of each Portfolio, and (ii) by the vote of a
majority of the Trustees who are not parties to the Agreement or "interested
persons" of any party thereto, cast in person at a meeting called for the
purpose of voting on such approval. The Advisory Agreement will terminate
automatically in the event of its assignment, and is terminable at any time
without penalty by the Trustees of the Trust or, with respect to a Portfolio by
a majority of the outstanding shares of that Portfolio, on not less than 30 days
nor more than 60 days written notice to the Adviser, or by the Adviser on 90
days written notice to the Trust.

The Adviser is an indirect wholly-owned subsidiary of First Security
Corporation, a financial services organization and registered bank holding
company with headquarters in Salt Lake City, Utah.

For their first full fiscal year ended January 31, 1996, the Portfolios paid the
Adviser the following fees:

<TABLE>
<CAPTION>
Fee Fee
Paid Waived
---- ------
<S> <C> <C>
Equity Fund $620,489 $297,531
</TABLE>

S-11
<PAGE> 78
<TABLE>
<S> <C> <C>
Balanced Fund 656,712 315,940

Intermediate Term Bond Fund 286,782 233,801

Short Term Bond Fund 273,536 185,940

Short Term Municipal Bond Fund 53,630 135,172

Idaho Municipal Bond Fund 46,342 117,504
</TABLE>

The advisory fees paid by the Portfolios are allocated between the Institutional
and Retail Class A classes of shares based upon the total assets of the
respective classes. The Municipal Bond Fund has not commenced operations and
paid no fees to the Advisor during the Trust's fiscal year ended January 31,
1996.

THE ADMINISTRATOR

The Trust and SEI Financial Management Corporation entered into an
administration agreement (the "Administration Agreement") dated December 27,
1994. On June 1, 1996 SEI Fund Resources (the "Administrator") assumed the
responsibilities of SEI Financial Management Corporation under the
Administration Agreement. The Administration Agreement provides that the
Administrator shall not be liable for any error of judgment or mistake of law or
for any loss suffered by the Trust in connection with the matters to which the
Administration Agreement relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of the Administrator in
the performance of its duties or from reckless disregard by it of its duties and
obligations thereunder.

The Administration Agreement shall remain in effect for three years and
thereafter shall continue in effect for successive two-year periods unless
terminated by either party on not less than 90 days prior written notice to the
other party.

The Portfolios paid the Administrator the following fees pursuant to the
Administration Agreement for the Trust's fiscal year ended January 31, 1996:
Equity Fund - $248,113; Balanced Fund - $262,879; Intermediate Term Bond Fund -
$173,528; Short Term Bond Fund - $153,159; Short Term Municipal Bond Fund -
$62,934; Idaho Municipal Bond Fund - $54,615. For the fiscal year ended January
31, 1996, the Administrator waived fees due under the Administration Agreement
from the Short Term Municipal Bond Fund and the Idaho Municipal Bond Fund in the
amount of $37,066 and $45,385, respectively. The Municipal Bond Fund has not
commenced operations and paid no fees to the Administrator during the Trust's
fiscal year ended January 31, 1996.

The Administrator is a wholly owned subsidiary of SEI Financial Management
Corporation, which is a wholly-owned subsidiary of SEI Corporation ("SEI"). The
Administrator has its principal business offices at 680 East Swedesford Road,
Wayne, PA 19087. SEI and its subsidiaries are leading providers of funds
evaluation services, trust accounting systems, and brokerage and information
services to financial institutions, institutional investors and money managers.
The Administrator also serves as administrator to the following other
institutional
S-12
<PAGE> 79
mutual funds: SEI Liquid Asset Trust; SEI Tax Exempt Trust; SEI Asset Allocation
Trust; SEI Index Funds; SEI Institutional Managed Trust; SEI Daily Income Trust;
SEI International Trust; Stepstone Funds; The Advisor's Inner Circle Fund; The
Pillar Funds; CUFund; STI Classic Funds; First American Funds, Inc.; First
American Investment Funds, Inc.; Rembrandt Funds; Marquis Funds; Morgan Grenfell
Investment Trust, the PBHG Funds, Inc.; The Arbor Fund; CoreFunds, Inc.; STI
Classic Variable Trust; CrestFunds, Inc.; ARK Funds; Monitor Funds; FMB Funds,
Inc.; Bishop Street Funds; Inventor Funds, Inc.; and 1784 Funds.

DISTRIBUTION

SEI Financial Services Company (the "Distributor"), a wholly-owned subsidiary of
SEI, and the Trust are parties to a distribution agreement ("Distribution
Agreement") dated December 27, 1994. The Distribution Agreement has an initial
term of 1 year and shall continue in force and effect from year to year
thereafter if such continuance is approved (i) by the Trust's Trustees or by the
vote of a majority of the outstanding shares of the Trust, and (ii) by the vote
of a majority of the Trustees of the Trust who are not parties to the
Distribution Agreement or interested persons (as defined in the 1940 Act) of any
party to the Distribution Agreement, cast in person at a meeting called for the
purpose of voting on such approval. The Distribution Agreement will terminate in
the event of any assignment, as defined in the 1940 Act, and is terminable with
respect to a particular Portfolio on not less than sixty days' notice by the
Trust's Trustees, by vote of a majority of the outstanding shares of such
Portfolio or by the Distributor.

The Trust has adopted a Distribution Plan for the Retail Class A shares of each
Portfolio (the "Distribution Plan") in accordance with the provisions of Rule
12b-1 under the 1940 Act which regulates circumstances under which an investment
company may directly or indirectly bear expenses relating to the distribution of
its shares. In this regard, the Board of Trustees has determined that the
Distribution Plan and the Distribution Agreement are in the best interests of
the Retail Class A shareholders. Continuance of the Distribution Plan must be
approved annually by a majority of the Trustees of the Trust and by a majority
of the Trustees who are not "interested persons" of the Trust as that term is
defined in the 1940 Act and who have no direct or indirect financial interest in
the operation of the Distribution Plan or in any agreements related thereto
("Qualified Trustees"). The Distribution Plan requires that quarterly written
reports of amounts spent under the Distribution Plan and the purposes of such
expenditures be furnished to and reviewed by the Trustees. The Distribution Plan
may not be amended to increase materially the amount which may be spent
thereunder without approval by a majority of the outstanding Retail Class A
shares of the Portfolio affected. All material amendments of the Distribution
Plan will require approval by a majority of the Trustees of the Trust and of the
Qualified Trustees.

The Distribution Plan adopted by the Retail Class A shareholders of the
Portfolio provides that the Trust will pay the Distributor a fee of up to .25%
of the average daily net assets of a Portfolio's Retail Class A shares which the
Distributor can use to compensate broker-dealer and service providers, including
SEI Financial Services Company and its affiliates which provide distribution
related services to Retail Class A shareholders. For the fiscal year ended
January 31, 1996, the Retail Class A classes of the Portfolios paid the
Distributor the following amounts: Equity Fund - $1,637; Balanced Fund - $1,486;
Intermediate Term Bond Fund - $1,223; Short Term Bond Fund - $87; Short Term
Municipal Bond Fund - $93; Idaho Municipal Bond Fund - $4,141. The Distributor
used those funds to make payments to third parties for distribution-related
services. The Municipal Bond Fund has not commenced operations and did not make
payments to the Distributor during the Trust's fiscal year ended January 31,
1996.

S-13
<PAGE> 80
Except to the extent that the Administrator and Adviser benefitted through
increased fees from an increase in the net assets of the Trust which may have
resulted in part from the expenditures, no interested person of the Trust nor
any Trustee of the Trust who is not an interested person of the Trust had a
direct or indirect financial interest in the operation of the Distribution Plan
or related agreements.

Retail Class A shares of the Portfolios are offered for sale to the public at
net asset value of each Retail Class A share plus the applicable sales charge.
The following chart reflects the total sales charges paid in connection with the
sale of Retail Class A shares of each Portfolio (other than the Municipal Bond
Fund) and the amount retained by the Distributor for the period from March 6,
1995 to January 31, 1996.

<TABLE>
<CAPTION>
Sales Amount
Charges Retained
------- --------
<S> <C> <C>
Equity Fund $61,284 $6,149

Balanced Fund 60,565 6,087

Intermediate Term Bond Fund 26,161 2,529

Short Term Bond Fund 673 54

Short Term Municipal Bond Fund 1,917 228

Idaho Municipal Bond Fund 63,756 6,417
</TABLE>

TRUSTEES AND OFFICERS OF THE TRUST

The principal occupations of the Trustees and officers of the Trust for the past
five years are listed below. Trustees deemed to be "interested persons" of the
Trust for purposes of the 1940 Act are indicated by an asterisk.

<TABLE>
<CAPTION>
Position Principal
Held With Occupation(s)
Name and Address Registrant During Past 5 Years
---------------- ---------- -------------------
<S> <C> <C>
Frederick A. Moreton, Jr.* Trustee and Vice President, Paine Webber,
P.O. Box 45170 Chairman Incorporated
Salt Lake City, UT 84145-0170

Robert G. Love Trustee Chairman, Harris & Love Advertising
University Club Building
136 East South Temple,
Suite 1800
Salt Lake City, UT 84120

August Glissmeyer, Jr. Trustee Partner, Deloitte Haskins & Sells (prior
4458 Camille Street to 1986); retired (since 1986)
Salt Lake City, UT 84124
</TABLE>

S-14
<PAGE> 81
<TABLE>
<CAPTION>
Position Principal
Held With Occupation(s)
Name and Address Registrant During Past 5 Years
---------------- ---------- -------------------
<S> <C> <C>
Carl S. Minden Trustee Vice President, The National Asphalt
314 Federal Height Circle Co.
Salt Lake City, UT 84103

George L. Denton, Jr.* Trustee Executive President and Manager,
2915 Sherwood Drive Capital Markets and Funds Management
Salt Lake City, UT 84108 Division, First Security Corporation
(prior to April 30, 1990); retired (since
April 30, 1990).

David G. Lee President Senior Vice President of SEI since 1993.
SEI Financial Management Vice President of SEI since 1991.
Corporation President, GW Sierra Trust Funds prior
680 East Swedesford Road to 1991.
Wayne, PA 19087-1658

Kathryn L. Stanton Vice President Vice President, Assistant Secretary of
SEI Financial Management and Secretary SEI, the Administrator and the
Corporation Distributor since 1994. Associate,
680 East Swedesford Road Morgan, Lewis & Bockius (law firm)
Wayne, PA 19087-1658 1989-1994.

Sandra K. Orlow Vice President and Vice President and Assistant Secretary of
SEI Financial Management Assistant Secretary the Administrator and Distributor since
Corporation 1993.
680 East Swedesford Road
Wayne, PA 19087-1658

Kevin P. Robins Vice President and Senior Vice President and General
SEI Financial Management Assistant Secretary Counsel of SEI, the Administrator and
Corporation the Distributor since 1994. Vice
680 East Swedesford Road President of SEI, the Administrator and
Wayne, PA 19087-1658 the Distributor 1992-1994. Associate,
Morgan, Lewis & Bockius (law firm)
prior to 1992.

Barbara A. Nugent Vice President and Vice President and Assistant Secretary of
SEI Financial Management Assistant Secretary SEI, the Administrator and the
Corporation Distributor since 1996. Associate,
680 East Swedesford Road Drinker, Biddle & Reath (law firm)
Wayne, PA 19087-1658 1994-1996. Delaware Service
Company, Inc. prior to 1994.
</TABLE>

S-15
<PAGE> 82
<TABLE>
<CAPTION>
Position Principal
Held With Occupation(s)
Name and Address Registrant During Past 5 Years
---------------- ---------- -------------------
<S> <C> <C>
Todd Cipperman Vice President and Vice President and Assistant Secretary of
SEI Financial Management Assistant Secretary SEI, the Administrator and the
Corporation Distributor since 1995. Associate,
680 East Swedesford Road Dewey Ballantine (law firm) 1994-1995.
Wayne, PA 19087-1658 Associate, Winston & Strawn (law firm)
1991-1994.

Stephen Meyer Treasurer and Vice-President and Controller, Chief
SEI Financial Management Principal Financial Accounting Officer - SEI Corporation.
Corporation Officer Director - Internal Audit and Risk
680 East Swedesford Road Management - SEI Corporation - 1992
Wayne, PA 19087-1658 to March 1995. Coopers & Lybrand,
Senior Associate - 1990 to 1992.
</TABLE>

Trustees and officers of the Trust owned less than 1% of the outstanding shares
of the Trust as of May 6, 1996.

Trustees receive from the Trust an annual fee and are reimbursed for all
out-of-pocket expenses relating to attendance of meetings. The fees paid to
Trustees for the fiscal year ended January 31, 1996, are shown below. Officers
of the Trust do not receive compensation from the Trust for serving as officers.
No person who is a director, officer or employee of the Adviser serves as a
Trustee, officer or employee of the Trust.

<TABLE>
<CAPTION>
Pension or Total
Aggregate Retirement Compensation
Compensation Benefits Accrued Estimated from Trust
from the as Part of Annual Benefits and Fund
Trustee (1) Trust Trust Expenses upon Retirement Complex(2)
----------- ----- -------------- --------------- ----------
<S> <C> <C> <C> <C>
Frederick A. Moreton, Jr $4,000 $0 $0 $4,000

Robert G. Love 4,000 0 0 4,000

August Glissmeyer, Jr 4,000 0 0 4,000

Carl S. Minden 4,000 0 0 4,000

George L. Denton, Jr 4,000 0 0 4,000
</TABLE>

(1) Mitchell Melich served as a Trustee of the Trust until his resignation
on May 17, 1996. He received $4,000 in aggregate compensation from the
Trust during its fiscal year ended January 31, 1996. He is not entitled
to receive any pension or retirement benefits from the Trust.

(2) The Trust is not part of a Fund Complex.

S-16
<PAGE> 83
PERFORMANCE

From time to time, each Portfolio may advertise yield or total return. These
figures will be based on historical earnings and are not intended to indicate
future performance.

The yield of a Portfolio refers to the annualized income generated by an
investment in the Portfolio over a specified 30-day period. The yield is
calculated by assuming that the income generated by the investment during that
period is generated in each such period over one year and is shown as a
percentage of the investment. In particular, yield will be calculated according
to the following formula: Yield = 2[(a-b)/cd) + 1)(6)-1], where a = dividends
and interest earned during the period; b= expenses accrued for the period (net
of reimbursement); c= the current daily number of shares outstanding during the
period that were entitled to receive dividends; and d= maximum offering price
per share on the last day of period.

For the 30 day period ended January 31, 1996, the yield for the Institutional
class of shares of each Portfolio (other than the Municipal Bond Fund, which has
not commenced operations) was: Equity Fund - 1.14%; Balanced Fund - 2.66%;
Intermediate Term Bond Fund - 4.95%; Short Term Bond Fund - 4.75%; Short Term
Municipal Bond Fund - 3.28%; Idaho Municipal Bond Fund - 3.96%.

For the 30 day period ended January 31, 1996, the yield for the Retail Class A
shares of each Portfolio (other than the Municipal Bond Fund, which has not
commenced operations) was: Equity Fund - 0.85%; Balanced Fund - 2.30%;
Intermediate Term Bond Fund - 4.54%; Short Term Bond Fund - 4.43%; Short Term
Municipal Bond Fund - 2.99%; Idaho Municipal Bond Fund - 3.56%.

The Municipal Bond Fund, Short Term Municipal Bond Fund and Idaho Municipal Bond
Fund may from time to time advertise a taxable equivalent yield. The taxable
equivalent yield for those Portfolios is the rate an investor would have to earn
from a fully taxable investment in order to equal it's yield after taxes.
Taxable equivalent yields are calculated by dividing the Portfolio's yield by
one minus the stated federal tax rate and one minus the stated federal tax rate
plus the state tax rate for state specific funds (if only a portion of the
Portfolio's yield was tax-exempt, only that portion is adjusted in the
calculation). For the 30 day period ended January 31, 1996 the taxable
equivalent yield for Institutional class of shares of the Short Term Municipal
Bond Fund and Idaho Municipal Bond Fund was 5.43% and 7.5%, respectively, and
for the Retail Class A shares of the Short Term Bond Fund and Idaho Municipal
Bond Fund was 4.95% and 6.82% respectively. The Municipal Bond Fund has not
commenced operations.

The total return of a Portfolio refers to the average compounded rate of return
to a hypothetical investment for designated time periods (including, but not
limited to, the period from which the Portfolio commenced operations through the
specified date), assuming that the entire investment is redeemed at the end of
each period. In particular, total return will be calculated according to the
following formula: P(1+T)n=ERV, where P = a hypothetical initial payment of
$1,000; T = average annual total return; n = number of years; and ERV = ending
redeemable value of a hypothetical $1,000 payment made at the beginning of the
designated time period as of the end of such period.

Equity Fund

For the fiscal year ended January 31, 1996, the Institutional class of shares of
the Equity Fund had an annual total return of 32.55%. For the period from
December 28, 1994 (commencement of operations) through January 31, 1996, the
Institutional class of shares of the Equity Fund had an annual total return of
32.24%.

S-17
<PAGE> 84
For the period from March 6, 1995 (commencement of operations) to January 31,
1996, the Retail Class A shares of the Equity Fund had a total return of 23.08%
(25.73% annualized).

Balanced Fund

For the fiscal year ended January 31, 1996, the Institutional class of shares of
the Balanced Fund had an annual return of 24.15%. For the period from December
28, 1994 (commencement of operations) to January 31, 1996, the Institutional
class of shares of the Balanced Fund had an average annual total return of
24.11%.

For the period from March 6, 1995 (commencement of operations) to January 31,
1996, the Retail Class A shares of the Balanced Fund had a total return of
15.94% (17.71% annualized).

Intermediate Term Bond Fund

For the fiscal year ended January 31, 1996, the Institutional class of shares of
the Intermediate Term Bond Fund had an annual return of 13.62%. For the period
from December 28, 1994 (commencement of operations) to January 31, 1996, the
Institutional class of shares of the Intermediate Term Bond Fund had an average
annual total return of 13.97%.

For the period from March 6, 1995 (commencement of operations) to January 31,
1996, the Retail Class A shares of the Intermediate Term Bond Fund had a total
return of 8.22% (9.10% annualized).

Short Term Bond Fund

For the fiscal year ended January 31, 1996, the Institutional class of shares of
the Short Term Bond Fund had an annual total return of 7.80%. For the period
from December 28, 1994 (commencement of operations) to January 31, 1996, the
Institutional class of shares of the Short Term Bond Fund had an average annual
total return of 7.89%.

For the period from March 6, 1995 (commencement of operations) to January 31,
1996, the Retail Class A shares of the Short Term Bond Fund had a total return
of 5.25% (5.81% annualized).

Short Term Municipal Bond Fund

For the fiscal year ended January 31, 1996, the Institutional class of shares of
the Short Term Municipal Bond Fund had an annual return of 6.71%. For the period
from December 28, 1994 (commencement of operations) to January 31, 1996, the
Institutional class of shares of the Short Term Municipal Bond Fund had an
average annual total return of 6.54%.

For the period from March 6, 1995 (commencement of operations) to January 31,
1996, the Retail Class A shares of the Short Term Municipal Bond Fund had a
total return of 4.75% (5.25% annualized).

Idaho Municipal Bond Fund

For the fiscal year ended January 31, 1996, the Institutional class of shares of
the Idaho Municipal Bond Fund had an annual return of 12.68%. For the period
from December 28, 1994 (commencement of
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operations) to January 31, 1996, the Institutional class of shares of the Idaho
Municipal Bond Fund had an average annual total return of 13.31%.

For the period from March 6, 1995 (commencement of operations) to January 31,
1996, the Retail Class A shares of the Idaho Municipal Bond Fund had a total
return of 6.86% (7.59% annualized).

Each Portfolio may from time to time compare its performance to other mutual
funds tracked by mutual fund rating services, to broad groups of comparable
mutual funds or to unmanaged indices which may assume investment of dividends
but generally do not reflect deductions for sales charges, administrative and
management costs.

PURCHASE AND REDEMPTION OF SHARES

The purchase and redemption price of the Institutional shares is the net asset
value of each Institutional share. The purchase price of Retail Class A shares
is the net asset value of each Retail Class A share plus the applicable sales
load, and Retail Class A shares will be redeemed at a price equal to the net
asset value of such Retail Class A shares. Shareholders may at any time redeem
all or a portion of their shares at net asset value without charge. The
investor's price for purchase or redemption will be determined by the net asset
value of the applicable Portfolio's shares next determined following the receipt
of an order or purchase or a request to redeem such shares.

It is currently the Trust's policy to pay all redemptions in cash. The Trust
retains the right, however, to alter this policy to provide for redemptions in
whole or in part by a distribution in kind of readily marketable securities held
by a Portfolio in lieu of cash. Shareholders may incur brokerage charges on the
sale of any such securities so received in payment of redemptions.

A gain or loss for federal income tax purposes may be realized by a taxable
shareholder upon an in-kind redemption depending upon the shareholder's basis in
the shares of the Trust redeemed.

The Trust reserves the right to suspend the right of redemption or to postpone
the date of payment upon redemption for any period during which trading on the
New York Stock Exchange is restricted, or during the existence of an emergency
(as determined by the SEC by rule or regulation) as a result of which disposal
or evaluation of the portfolio securities is not reasonably practicable, or for
such other periods as the SEC may by order permit. The Trust also reserves the
right to suspend sales of shares of the Portfolio's for any period during which
the New York Stock Exchange, the Administrator, the Distributor, the Adviser or
the Custodian is not open for business.

DETERMINATION OF NET ASSET VALUE

In accordance with the current rules and regulations of the SEC, the net asset
value of a share of each Portfolio is determined once daily as of the close of
trading on the New York Stock Exchange (presently 4:00 p.m. Eastern time) on
each business day for the Portfolios. The net asset values per share of the
Institutional and the Retail Class A classes of the Portfolios will differ
because of different expenses attributable to each class. The income or loss and
the expenses common to both classes of a Portfolio are allocated to each class
on the basis of the net assets of each class of a Portfolio, calculated as of
the close of business on the previous business day of the Portfolio in relation
to the total net assets in the Portfolio
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as of such date. In addition to certain common expenses which are allocated to
both classes of a Portfolio, certain expenses, such as those related to the
distribution of shares of a class, are allocated only to the class to which such
expenses relate. The net asset value per share of a class is determined by
subtracting the liabilities (e.g., the expenses) allocated to the class from the
assets allocated to the class and dividing the result by the total number of
shares outstanding of such class. Determination of each Portfolio's net asset
value per share is made in accordance with generally accepted accounting
principles.

A Portfolio's securities are valued by the Administrator pursuant to valuations
provided by an independent pricing service. Except as provided in the next
sentence, a security listed or traded on an exchange is valued at its last sales
price on the exchange where the security is principally traded or, lacking any
sales on a particular day, the security is valued at the most recently quoted
bid price. Each security traded in the over-the-counter market (but not
including securities reported on the NASDAQ National Market system) is valued at
the mean between the last bid and asked prices based upon quotes furnished by
market makers for such securities. Each security reported on the NASDAQ National
Market System is valued at the last sales price on the valuation date. The
pricing service may also use a matrix system to determine valuations. This
system considers such factors as security prices, yields, maturities, call
features, ratings and developments relating to specific securities in arriving
at valuations. The procedures of the pricing service and its valuations are
reviewed by the officers of the Trust under the general supervision of the
Trustees. Securities for which market quotations are not readily available are
valued at fair value as determined in good faith by or under the supervision of
the Trust's officers in a manner specifically authorized by the Trustees of the
Trust. Short-term obligations having 60 days or less to maturity are valued at
amortized cost, which approximates fair market value.

Because net asset value per share of each Portfolio is determined only on
business days of the Portfolio, the net asset value per share of a Portfolio may
be significantly affected on days when an investor can not exchange or redeem
shares of the Portfolio.

TAXES

The following is only a summary of certain additional tax considerations
generally affecting the Portfolios and their shareholders that are not described
in the Prospectus. No attempt is made to present a detailed explanation of the
tax treatment of the Portfolios or their shareholders, and the discussion here
and in the Prospectus is not intended as a substitute for careful tax planning.
Investors are urged to consult their tax advisers with specific reference to
their own tax situation.

QUALIFICATION AS A RIC

In order to qualify for treatment as a regulated investment company ("RIC")
under Subchapter M of the Internal Revenue Code of 1986, as amended ("Code"), a
Portfolio must distribute annually to its shareholders at least 90% of its
investment company taxable income (generally, net investment income plus net
short-term capital gain and realized market discount) ("Distribution
Requirement") and must meet several additional requirements. Among these
requirements are the following (i) at least 90% of a Portfolio's gross income
each taxable year must be derived from dividends, interest, certain payments
with respect to securities loans, and gains from the sale or other disposition
of stock or securities, or other income derived with respect to its business of
investing in such stock or securities (the "Income Requirement"); (ii) less than
30% of a Portfolio's gross income each taxable year may be derived from the sale
or other disposition of stock, securities or options held for less than three
months (the "Short-Term
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Gains Test"); (iii) at the close of each quarter of a Portfolio's taxable year,
at least 50% of the value of its total assets must be represented by cash and
cash items, U.S. Government securities, securities of other RICs and other
securities, with such other securities limited, in respect of any one issuer, to
an amount that does not exceed 5% of the value of a Portfolio's assets and that
does not represent more than 10% of the outstanding voting securities of such
issuer; and (iv) at the close of each quarter of a Portfolio's taxable year, not
more than 25% of the value of its assets may be invested in securities (other
than U.S. Government securities or the securities of other RICs) of any one
issuer or of two or more issuers which the Portfolio controls and which are
engaged in the same, similar or related trades or businesses. (The requirements
described in clauses (iii) and (iv) will collectively be referred to in the
following discussion as the "Asset Diversification Requirement".)

Income derived by a RIC from a partnership or trust will satisfy the Income
Requirement only to the extent such income is attributable to items of income of
the partnership or trust that would satisfy the Income Requirement if they were
realized by a RIC in the same manner as realized by the partnership or trust.

FEDERAL INCOME TAX CONSEQUENCES OF PORTFOLIO DISTRIBUTIONS

Although the Portfolios are not required by the Distribution Requirement to
distribute long-term capital gains, the Portfolios intend to distribute any net
realized long-term capital gains annually. The aggregate amount of distributions
designated by a Portfolio as capital gain dividends may not exceed the net
capital gain of such Portfolio for any taxable year, determined by excluding any
net capital loss or net long-term loss attributable to transactions occurring
after October 31 of such year and by treating any such loss as if it arose on
the first day of the following taxable year. Such distributions will be
designated as a capital gains dividend in a written notice mailed by the Trust
to shareholders not later than 60 days after the close of each Portfolio's
respective taxable year.

In the case of corporate shareholders, distributions (other than capital gain
dividends) of a RIC for any taxable year generally qualify for the 70%
dividends-received deduction to the extent of the gross amount of "qualifying
dividends" received by such RIC for the year. Generally, a dividend will be
treated as a "qualifying dividend" if it has been received from a domestic
corporation. However, a dividend received by a taxpayer will not be treated as a
"qualifying dividend" if (1) it has been received with respect to any share of
stock that the taxpayer has held for 45 days (90 days in the case of certain
preferred stock) or less (excluding any day more than 45 days (or 90 days in the
case of certain preferred stock) after the date on which the stock becomes
ex-dividend), or (2) to the extent that the taxpayer is under an obligation
(pursuant to a short sale or otherwise) to make related payments with respect to
positions in substantially similar or related property. The Trust will designate
the portion, if any, of the distribution made by a Portfolio that qualifies for
the dividends-received deduction in a written notice mailed by the Portfolio to
shareholders not later than 60 days after the close of the Portfolio's taxable
year. Only the Equity Fund and the Balanced Fund are expected to have any
portion of their dividends so designated.

Investors should note that changes made to the Code by the Revenue
Reconciliation Act of 1993 have increased the tax rate distinctions between
capital gain and ordinary income distributions. The nominal maximum marginal
rate on ordinary income for individuals, trusts and estates is now 39.6%, but
for individual taxpayers whose adjusted gross income exceeds certain threshold
amounts (that differ depending on the taxpayer's filing status), provisions
phasing out personal exemptions and limiting itemized deductions may cause the
actual marginal rate to exceed 39.6%. The maximum rate on the net capital gain
of individuals, trusts and estates, however, is in all cases 28%. Capital gains
and ordinary income of

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corporate taxpayers are taxed at a nominal maximum rate of 35% (an effective
marginal rate of 39% applies in the case of corporations having taxable income
between $100,000 and $335,000 and an effective marginal rate of 38% applies in
the case of corporations having taxable income between $15,000,000 and
$18,333,333).

Corporate taxpayers may be liable for alternative minimum tax, which is imposed
at the rate of 20% of "alternative minimum taxable income" (less the applicable
"exemption amount" in the case of corporate shareholders with "alternative
minimum taxable income" of less than $310,000), in lieu of the regular corporate
income tax. "Alternative minimum taxable income" is equal to "taxable income"
(as determined for regular corporate income tax purposes) with certain
adjustments. Although corporate taxpayers in determining "alternative minimum
taxable income" are allowed to exclude exempt-interest dividends (other than
exempt-interest dividends derived from certain private activity bonds, as
explained below) and to utilize the 70% dividends-received deduction at the
first level of computation, the Code requires (as a second computational step)
that "alternative minimum taxable income" be increased by 75% of the excess of
"adjusted current earnings" over other "alternative minimum taxable income."

In determining their "adjusted current earnings," corporate shareholders must
take into account (1) all exempt-interest dividends and (2) the full amount of
all dividends from a Portfolio that are treated as "qualifying dividends" for
purposes of the dividends-received deduction. As much as 75% of any
exempt-interest dividend and 82.5% of any "qualifying dividend" received by a
corporate shareholder could, as a consequence, be subject to alternative minimum
tax. Corporate investors should also note that the Superfund Amendments and
Reauthorization Act of 1986 imposes an environmental tax on corporate taxpayers
of 0.12% of the excess of "alternative minimum taxable income" (with certain
modifications) over $2,000,000 for taxable years beginning after 1986 and before
1996, regardless of whether such taxpayers are liable for alternative minimum
tax.

If for any taxable year any Portfolio does not qualify as a RIC, all of its
taxable income will be subject to tax at regular corporate rates without any
deduction for distributions to shareholders, and all distributions will be
taxable as ordinary dividends (including amounts derived from interest on
municipal securities in the case of the Municipal Bond Fund, Short Term
Municipal Bond Fund and the Idaho Municipal Bond Fund) to the extent of such
Portfolio's current and accumulated earning and profits. Such distributions will
be eligible for the dividends-received deduction in the case of corporate
shareholders.

SPECIAL CONSIDERATIONS RELATING TO MUNICIPAL BOND FUND, SHORT TERM MUNICIPAL
BOND FUND AND IDAHO MUNICIPAL BOND FUND

As described in the Prospectus, each of these Portfolios is designed to provide
investors with current tax-exempt interest income in the form of exempt-interest
dividends. Investors in these Portfolios should note, however, that taxpayers
are required to report the receipt of tax-exempt interest and exempt-interest
dividends in their Federal income tax returns. Furthermore, distributions made
by the Portfolios out of realized capital gain or realized market discount will
be taxable. Although the Portfolios generally do not expect to receive net
investment income other than interest on municipal securities, up to 20% of the
net assets of each Portfolio may be invested in securities that do not pay
tax-exempt interest. Any taxable income recognized by the Portfolios will be
distributed and taxed to their shareholders in accordance with the rules
described in the Prospectus with respect to the other Portfolios of the Trust.
See Prospectus, "Taxes - Tax Status of Distributions (Equity Fund, Balanced
Fund, Intermediate Term Bond Fund, and Short Term Bond Fund)."

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Investors should also note that in two circumstances exempt-interest dividends,
while exempt from regular Federal income tax, are subject to alternative minimum
tax at a maximum rate of 28%, in the case of individuals, trusts and estates,
and 20% in the case of corporate taxpayers. First, tax-exempt interest and
exempt-interest dividends derived from certain private activity bonds issued
after August 7, 1986, will generally constitute an item of tax preference for
corporate and non-corporate taxpayers in determining alternative minimum tax
liability. The Municipal Bond Fund, Short Term Municipal Bond Fund may invest in
such private activity bonds if consistent with the credit quality standards and
other investment policies of those Portfolios. Although it does not currently
intend to do so, the Idaho Municipal Bond Fund may invest up to 100% of its net
assets in such private activity bonds. Secondly (as discussed above), tax-exempt
interest and exempt-interest dividends derived from all municipal securities
must be taken into account by corporate taxpayers in determining their adjusted
current earnings adjustment for alternative minimum tax purposes and may as a
consequence be subject to tax at an effective rate of 15%.

Receipt of exempt-interest dividends may also result in collateral Federal
income tax consequences to certain taxpayers, including S corporations,
financial institutions, property and casualty insurance companies, individual
recipients of Social Security or Railroad Retirement benefits, and foreign
corporations engaged in a trade or business in the United States. Prospective
investors should consult their own tax advisors as to such consequences.

The Portfolios may also not be an appropriate investment for entities which are
"substantial users" of facilities financed by private activity bonds or "related
persons" thereof. "Substantial user" is defined under U.S. Treasury Regulations
to include a nonexempt person who regularly uses a part of such facilities in
his trade or business and (1) whose gross revenues derived with respect to the
facilities financed by the issuance of the bonds are more than 5% of the total
revenue derived by all users of such facilities, (2) who occupies more than 5%
of the entire usable area of such facilities, or (3) for whom such facilities or
a part thereof were specifically constructed, reconstructed or acquired.
"Related persons" include certain related natural persons, affiliated
corporations, a partnership and its partners and an S Corporation and its
shareholders.

Each of the Portfolios reserves the right to acquire standby commitments with
respect to municipal securities held in its portfolio and will treat any
interest received on municipal securities subject to such standby commitments as
tax-exempt income. In Rev. Rul. 82-144, 1982-2 C.B. 34, the Internal Revenue
Service held that a mutual fund acquired ownership of municipal obligations for
Federal income tax purposes, even though the fund simultaneously purchased "put"
agreements with respect to the same municipal obligations from the seller of the
obligations. The Portfolios will not engage in transactions involving the use of
standby commitments that differ materially from the transaction described in
Rev. Rul. 82-144 without first obtaining a private letter ruling from the
Internal Revenue Service or the opinion of counsel.

Interest on indebtedness incurred by a shareholder to purchase or carry shares
of the Portfolios is not deductible for income tax purposes if (as expected) the
Portfolios distribute exempt-interest dividends during the shareholder's taxable
year.

SPECIAL TAX CONSIDERATIONS RELATING TO THE EQUITY FUND AND THE BALANCED FUND

The following discussion relates to the particular Federal income tax
consequences of the investment policies of the Equity Fund and the Balanced
Fund. The ability of these Portfolios to engage in options and short sale
activities will be somewhat limited by the requirements for their continued
qualification as

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RICs under the Code, in particular the Distribution Requirement, the Short-Term
Gains Test and the Asset Diversification Requirement.

The options transactions that the Equity Fund and Balanced Fund enter into may
result in "straddles" for Federal income tax purposes. The straddle rules of the
Code may affect the character of gains and losses realized by the Portfolios. In
addition, losses realized by the Portfolios on positions that are part of a
straddle may be deferred under the straddle rules, rather than being taken into
account in calculating the investment company taxable income and net capital
gain of the Portfolios for the taxable year in which such losses are realized.
Losses realized prior to October 31 of any year may be similarly deferred under
the straddle rules in determining the "required distribution" that the
Portfolios must make in order to avoid Federal excise tax. Furthermore, in
determining their investment company taxable income and ordinary income, the
Portfolios may be required to capitalize, rather than deduct currently, any
interest expense on indebtedness incurred or continued to purchase or carry any
positions that are part of a straddle. The tax consequences to the Portfolios of
holding straddle positions may be further affected by various annual and
transactional elections provided under the Code and Treasury regulations that
the Portfolios may make.

Because only a few regulations implementing the straddle rules have been
promulgated by the U.S. Treasury, the tax consequences to the Equity Fund and
Balanced Fund of engaging in options transactions are not entirely clear.
Nevertheless, it is evident that application of the straddle rules may
substantially increase or decrease the amount which must be distributed to
shareholders in satisfaction of the Distribution Requirement (or to avoid
Federal excise tax liability) for any taxable year in comparison to a fund that
did not engage in options transactions. For purposes of the Short-Term Gains
Test, current Treasury regulations provide that (except to the extent that the
short sale rules discussed below would otherwise apply) the straddle rules will
have no effect on the holding period of any straddle position. However, the U.S.
Treasury has announced that it is continuing to study the application of the
straddle rules for this purpose.

The writer of a covered call option generally does not recognize income upon
receipt of the option premium. If the option expires unexercised or is closed on
an exchange, the writer generally recognizes short-term capital gain. If the
option is exercised, the premium is included in the consideration received by
the writer in determining the capital gain or loss recognized in the resultant
sale.

Because of the Short-Term Gains Test, the Equity Fund may have to limit the sale
of appreciated (but not depreciated) securities that they have held for less
than three months. The short sale of (1) securities held on the date of the
short sale or acquired after the short sale and on or before the date of closing
thereof or (2) securities which are "substantially identical" to securities held
on the date of the short sale or acquired after the short sale and on or before
the date of the closing thereof may reduce the holding period of such securities
for purposes of the Short-Term Gains Test.

Any increase in value of a position that is part of a "designated hedge" will be
offset by any decrease in value (whether realized or not) of the offsetting
hedging position during the period of such hedge for purposes of the Short-Term
Gains Test. Thus, only the net gain (if any) from the designated hedge will be
included to gross income for purposes of the Short-Term Gains Test. Each of the
Equity Fund and Balanced Fund anticipates engaging in hedging transactions that
qualify as designated hedges. However, because of the failure of the U.S.
Treasury to promulgate regulations as authorized by the Code, it is not clear at
the present time whether this treatment will be available for all of the
Portfolios' hedging transactions. To the extent the Portfolios' transactions do
not qualify as designated hedges, the Portfolios' investments in short sales,
options or other transactions may be limited.

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For purposes of the Asset Diversification Requirement, the issuer of a call
option on a security (including an option written on an exchange) will be deemed
to be the issuer of the underlying security. The Internal Revenue Service has
informally ruled, however, that a call option that is written by a fund need not
be counted for purposes of the Asset Diversification Requirement where the fund
holds the underlying security. Under the Code, a fund may not rely on informal
rulings of the Internal Revenue Service issued to other taxpayers. Consequently,
the Equity Fund and Balanced Fund may find it necessary to seek a ruling from
the Internal Revenue Service on this issue or to curtail their writing of
covered call options in order to stay within the limits of the Asset
Diversification Requirement.

ADDITIONAL FEDERAL TAX CONSIDERATIONS

The Code imposes a non-deductible 4% excise tax on RICs that do not distribute
with respect to each calendar year an amount equal to 98 percent of their
ordinary income for the calendar year plus 98 percent of their capital gain net
income for the one-year period ending on October 31 of such calendar year. The
balance of such income must be distributed during the next calendar year. For
the foregoing purposes, a company is treated as having distributed any amount on
which it is subject to income tax for any taxable year ending in such calendar
year. Because each Portfolio intends to distribute all of its taxable income
currently, none of the Portfolios anticipates incurring any liability for this
excise tax.

Investors should be aware that any loss realized on a sale of shares of a
Portfolio will be disallowed to the extent an investor repurchases shares of the
same Portfolio within a period of 61 days (beginning 30 days before and ending
30 days after the day of disposition of the shares). Dividends paid by a
Portfolio in the form of shares within the 61-day period would be treated as a
purchase for this purpose.

A shareholder will recognize gain or loss upon an exchange of shares of a
Portfolio for shares of another Portfolio upon exercise of an exchange
privilege. Shareholders may not include the initial sales charge in the tax
basis of shares exchanged for shares of another Portfolio for the purpose of
determining gain or loss on the exchange, where the shares exchanged have been
held 90 days or less. The sales charge that was imposed on the exchanged shares
will instead increase the basis of the shares acquired through exercise
privilege (unless the shares acquired are also exchanged for shares of another
Portfolio within 90 days after the first exchange).

The Portfolios will be required in certain cases to withhold and remit to the
United States Treasury 31% of dividends (other than exempt-interest dividends)
paid to any shareholder (1) who has provided either an incorrect tax
identification number or no number at all, (2) who is subject to backup
withholding by the Internal Revenue Service for failure to report the receipt of
interest or dividend income properly, or (3) who has failed to certify to the
Portfolio that he is not subject to backup withholding or that he is an "exempt
recipient."

The foregoing general discussion of Federal income tax consequences is based on
the Code and the regulations issued thereunder as in effect on the date of this
Statement of Additional Information. Future legislative or administrative
changes or court decisions may significantly change the conclusions expressed
herein, and any such changes or decisions may have a retroactive effect with
respect to the transactions contemplated herein.

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STATE AND LOCAL TAX CONSIDERATIONS

Although each Portfolio expects to qualify as a RIC and to be relieved of all or
substantially all Federal income taxes, depending upon the extent of its
activities in states and localities in which its offices are maintained, in
which its agents or independent contractors are located or in which it is
otherwise deemed to be conducting business, each Portfolio may be subject to the
tax laws of such states or localities.

PORTFOLIO TRANSACTIONS

The Portfolios have no obligation to deal with any dealer or group of dealers in
the execution of transactions in securities. Subject to policies established by
the Trustees, the Adviser is responsible for placing orders to execute portfolio
transactions. In placing orders, it is the policy of each Portfolio to seek to
obtain the best net results taking into account such factors as price (including
the applicable dealer spread), size, type and difficulty of the transaction
involved, the firm's general execution and operational facilities, and the
firm's risk in positioning the securities involved. While the Adviser generally
seeks reasonably competitive spreads or commissions, the Portfolios will not
necessarily be paying the lowest spread or commissions available. A Portfolio
will not purchase securities from any affiliated person acting as principal
except in conformity with the regulations of the SEC.

The Portfolios may execute brokerage or other agency transactions through the
Distributor, a registered broker-dealer, for a commission, in conformity with
the 1940 Act, the Securities Exchange Act of 1934, as amended, and rules of the
SEC. Under these provisions, the Distributor is permitted to receive and retain
compensation for effecting portfolio transactions for a Portfolio on an exchange
if a written contract is in effect between the Distributor and the Trust
expressly permitting the Distributor to receive and retain such compensation.
The Portfolios may also execute brokerage or other agency transactions with
affiliates of the Adviser in compliance with those provisions.

Those provisions further require that commissions paid to the Distributor by the
Trust for exchange transactions not exceed "usual and customary" brokerage
commissions. The rules define "usual and customary" commissions to include
amounts which are "reasonable and fair compared to the commission, fee or other
remuneration received or to be received by other brokers in connection with
comparable transactions involving similar securities being purchased or sold on
a securities exchange during a comparable period of time." In addition, a
Portfolio may direct commission business to one or more designated
broker-dealers, including the Distributor, in connection with such
broker-dealer's payment of certain of the Portfolio's expenses or the
performance of certain services, such as research services. The Trustees,
including those who are not "interested persons" of the Trust, have adopted
procedures for evaluating the reasonableness of commissions paid to the
Distributor and will review these procedures periodically.

Since the Trust does not currently market its shares through intermediary
brokers or dealers, it is not the Trust's practice to allocate brokerage or
principal business on the basis of sales of its shares which may be made through
such firms. However, the Adviser may place portfolio orders with qualified
broker-dealers who recommend the Trust to clients, and may, when a number of
brokers and dealers can provide best price and execution on a particular
transaction, consider such recommendations by a broker or dealer in selecting
among broker-dealers.

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The Trust does not use one particular dealer, but the Adviser may, consistent
with the interests of the Portfolios, select brokers on the basis of the
research services they provide to the Adviser. Such services may include
analysis of the business or prospects of a company, industry or economic sector
or statistical and pricing services. Information so received by the Adviser will
be in addition to and not in lieu of the services required to be performed by
the Adviser under the Advisory Agreement. Research services furnished by brokers
through whom the Trust effects securities transactions may be used by the
Adviser in the servicing of its other accounts and not all such services may be
used by the Adviser in connection with the Portfolios. If in the judgment of the
Adviser the Portfolios, or other accounts managed by the Adviser, will be
benefitted by supplemental research services, the Adviser is authorized to pay
brokerage commissions to a broker furnishing such services which are in excess
of commissions which another broker may have charged for effecting the same
transaction. The expenses of an Adviser will not necessarily be reduced as a
result of the receipt of such supplemental information.

For the fiscal year ended January 31, 1996, the Equity Fund paid brokerage
commissions of $291,662. The Adviser allocated certain of the Equity Fund's
brokerage transactions to certain broker-dealers that provided the Adviser with
certain research, statistical and other information. Such transactions amounted
to $220,015,937 and the related brokerage commissions were $291,662.

For the fiscal year ended January 31, 1996, the Balanced Fund paid brokerage
commissions of $165,537. The Adviser allocated certain of the Balance Fund's
brokerage transactions to certain broker-dealers that provided the Adviser with
research, statistical and other information. Such transactions amounted to
$121,648,681 and the related brokerage commissions were $165,537.

The portfolio turnover rate for each of the Portfolios for the fiscal year ended
January 31, 1996, was as follows: Equity Fund - 104%; Balanced Fund - 60%;
Intermediate Term Bond Fund - 85%; Short Term Bond Fund - 84%; Short Term
Municipal Bond Fund - 114%; Idaho Municipal Bond Fund - 59%. The Municipal Bond
Fund has not commenced operations and, accordingly, has not experienced any
portfolio turnover. Portfolio turnover rates may vary from year to year and may
be affected by cash requirements for redemptions and by requirements which
enable a Portfolio to maintain its status as a regulated investment company
under the Code.

The Trust is required to identify any securities of its "regular brokers or
dealers" (as such term is defined in the 1940 Act) which the Trust has acquired
during its most recent fiscal year. As of January 31, 1996, the Balanced Fund,
Short Term Bond Fund and Intermediate Term Bond Fund held medium term notes
issued by Bear Sterns & Co., Inc. having a value of $1,999,960, $1,022,730 and
$1,022,730, respectively, and the Intermediate Term Bond Fund held bonds issued
by J. P. Morgan Securities, Inc. having a value of $1,072,500.

LIMITATION OF TRUSTEE'S LIABILITY

The Trust Agreement provides indemnities and waivers of liability to Trustees
based on certain actions or failures to act while serving as a Trustee.
Insurance has also been obtained by the Trust on behalf of the Trustees to cover
losses arising from certain errors or omissions of a Trustee.

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CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

As of May 6, 1996, the following entities owned 5% or more of the outstanding
Institutional shares: Equity Fund: First Security Bank of Utah, N.A., P.O. Box
25297, Salt Lake City, Utah 84125 (100%); Balanced Fund: First Security Bank of
Utah, N.A., P.O. Box 25297, Salt Lake City, Utah 84125 (99.4%); Intermediate
Term Bond Fund: First Security Bank of Utah, N.A., P.O. Box 25297, Salt Lake
City, Utah 84125 (100%); Short Term Bond Fund: First Security Bank of Utah,
N.A., P.O. Box 25297, Salt Lake City, Utah 84125 (100%); Short Term Municipal
Bond Fund: First Security Bank of Utah, N.A., P.O. Box 25297, Salt Lake City,
Utah 84125 (100%); Idaho Municipal Bond Fund: First Security Bank of Utah, N.A.,
P.O. Box 25297, Salt Lake City, Utah 84125 (99.3%).

As of May 6, 1996, the following entities owned 5% or more of the outstanding
Retail Class A shares: Equity Fund: BHC Securities, Inc., One Commerce Square,
2005 Market St., Philadelphia, PA 19103 (71.3%); Balanced Fund: BHC Securities,
Inc., One Commerce Square, 2005 Market St., Philadelphia, PA 19103 (77.1%);
Intermediate Term Bond Fund: BHC Securities, Inc., One Commerce Square, 2005
Market St., Philadelphia, PA 19103 (88.9%); Short Term Bond Fund: BHC
Securities, Inc., One Commerce Square, 2005 Market St., Philadelphia, PA 19103
(45.9%); Lynn Flance, Trustee, Harry and Leone Borchardt Trust, 4860B E. Fort
Lowell, Tucson, AZ 85712 (27%); Karen Bradley, Trustee, Harry and Leone
Borchardt Trust, 3812 Arlote Ave S.E., Albuquerque, N.M. 87108 (24.6%); Short
Term Municipal Bond Fund: BHC Securities, Inc., One Commerce Square, 2005 Market
St., Philadelphia, PA 19103 (100%); Idaho Municipal Bond Fund: BHC Securities,
Inc., One Commerce Square, 2005 Market St., Philadelphia, PA 19103 (70.4%);
Arthur P. Jensen, Trustee, Arthur P. Jensen Revocable Family Trust, 325 West 1st
South, Rigby, UT 83442 (5.0%).

COUNSEL TO THE TRUST

Ballard Spahr Andrews & Ingersoll serves as counsel to the Trust.

FINANCIAL STATEMENTS

Audited financial statements of the Trust for the fiscal year ended January 31,
1996 and the Independent Auditors' Report of Deloitte & Touche LLP dated March
22, 1996 are contained in the Trust's Annual Report to Shareholders for its
fiscal year ended January 31, 1996 and are incorporated in this Statement of
Additional Information by reference. A copy of the Trust's Annual Report to
Shareholders shall be provided along with this Statement of Additional
Information to each person to whom the Statement of Additional Information is
sent, unless such person then holds securities issued by the Trust, in which
case a copy of the Trust's Annual Report to Shareholders will be furnished to
such person without charge upon request made to SEI Financial Services Company,
by written request addressed to 680 E. Swedesford Road, Wayne, PA 19087-0481 or
by calling 1-800-472-0577.

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