<PAGE> 1
THE ACHIEVEMENT FUNDS TRUST
-- MUNICIPAL BOND FUND
THE ACHIEVEMENT FUNDS TRUST (the "Trust") is a mutual fund that offers separate
classes of shares of beneficial interest in seven separate portfolios. This
Prospectus relates solely to the Institutional class of shares of the Municipal
Bond Fund (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 a professionally
managed portfolio of securities. The Municipal Bond Fund 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 FIRST SECURITY BANK 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
its Municipal Bond Fund 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 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
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 the
Trust's Municipal Bond Fund. The Municipal Bond Fund is a diversified portfolio
of securities.
INVESTMENT OBJECTIVE AND POLICIES
The 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 Municipal Bond Fund intends to invest primarily in municipal securities, the
interest on which is exempt from Federal income taxes, which meet specified
credit quality standards. There is no assurance that the Municipal Bond Fund
will meet its investment objective. See "INVESTMENT OBJECTIVES AND POLICIES" and
"DESCRIPTION OF CERTAIN PERMITTED INVESTMENTS."
RISK FACTORS INVOLVED WITH AN INVESTMENT IN THE MUNICIPAL BOND FUND
The net asset value of the shares of the Municipal Bond Fund will fluctuate with
changes in the prices of its underlying portfolio securities. Values of fixed
income securities and, correspondingly, share prices of the Municipal Bond Fund
will tend to vary inversely with interest rates and may be affected by other
market and economic factors as well. 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 Municipal Bond Fund. 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> 3
3
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
the Municipal Bond Fund is distributed in the form of dividends that are paid
monthly. 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
4
ESTIMATED ANNUAL OPERATING EXPENSES
(as a % of average net assets)
<TABLE>
<S> <C>
Management Fees (after waivers)(1)............................................................. 0.30%
Administration Fees............................................................................ 0.20%
Other Expenses(2).............................................................................. 0.25%
- -------------------------------------------------------------------------------------------------------
Total Fund Operating Expenses (after waivers)(3)............................................... 0.75%
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
</TABLE>
(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 for the
Municipal Bond Fund would be 0.60%.
(2) Other Expenses of the Municipal Bond Fund include all expenses except
nonrecurring account fees, brokerage commissions and other capital items and
management fees. See "GENERAL INFORMATION--Expenses." Although no fee is
imposed in connection with share redemptions, a $15 fee is charged in
connection with a wire transfer of redemption proceeds.
(3) Absent the voluntary fee waiver described above, total estimated operating
expenses for the Institutional shares of the Municipal Bond Fund stated as a
percentage of net assets would be 1.05%.
EXAMPLE
The following example assumes that all dividends and distributions are
reinvested and that the percentage totals listed under "Estimated 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
- --------------------------------------------------------------------------------------------------------
<S> <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:................... $ 8 $24
Absent the fee waiver described in the footnote above and in this Prospectus, an
investor would pay the following expenses on the same investment:................. $ 11 $33
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
</TABLE>
The Estimated Annual Operating Expenses and Example presented above are designed
to assist an investor in understanding the various costs and expenses that an
investor in the Municipal Bond Fund will bear directly or indirectly. For more
complete descriptions of the various costs and expenses, see "THE ADVISER," "THE
DISTRIBUTOR" and "GENERAL INFORMATION--Expenses" in this Prospectus. The expense
figures for "Administration Fees" and "Other Expenses" presented under the
caption "Estimated Annual Operating Expenses" are based upon estimates of costs,
size of total assets of the Municipal Bond Fund and fees to be charged in the
current fiscal year; actual expenses may be greater or less than those
estimated. The information set forth in the Estimated Annual Operating Expenses
and Example relates only to the Institutional shares. The Municipal Bond Fund
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
5
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 Municipal Bond Fund. The Municipal Bond
Fund is a diversified portfolio. 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 OBJECTIVE AND POLICIES
INVESTMENT OBJECTIVE
The 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 Municipal Bond Fund will invest at least 80%
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 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 Municipal
Bond Fund will not invest more than 10% of its assets in municipal securities of
issuers located in any single state, territory or possession. Under normal
market conditions, the 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. Although the Adviser intends to invest solely in
municipal securities, up to 20% of all of the assets of the Municipal Bond Fund
can be invested in U.S. Treasury obligations when suitable municipal securities
are not available.
The 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 BBB or better by S&P or Baa or better by Moody's.
Municipal bonds held by the Municipal Bond Fund will, on a dollar-weighted
basis, have a rating of A or better. The Municipal Bond Fund may not invest
more than 20% of its assets in municipal bonds rated BBB by S&P or Baa by
Moody's.
(ii) Municipal notes rated at least SP-1 by S&P or MIG-1 by Moody's.
(iii) Tax-exempt commercial paper rated at least A-1 by S&P or Prime-1 by
Moody's.
(iv) Municipal lease obligations that have the ratings specified in (i)
above or that are of comparable quality as determined by the Adviser upon
consideration of relevant factors specified by the board of trustees of the
Trust (the "Trustees"), including the likelihood that the lease related to
the obligation will be cancelled or that funds will not be appropriated for
payment thereof. Municipal lease obligations that are subject to an annual
appropriation by the issuer may be purchased by the Municipal Bond Fund only
if the security in question is insured by an approved municipal insurance
company (e.g. AMBAC Indemnity Corporation, Municipal Bond Investors
Assurance Corporation, Financial Guaranty Insurance Company).
(v) Shares of mutual funds that invest primarily in municipal bonds,
municipal notes, tax-exempt commercial paper or municipal lease obligations
that have the ratings specified above. Up to 10% of the assets of the
Municipal Bond Fund may be invested in such mutual fund shares.
<PAGE> 6
6
In the event the credit quality of municipal securities owned by the Municipal
Bond Fund declines below the applicable criteria outlined above, the Adviser may
consider selling such securities. For a description of ratings, see "Appendix."
The Municipal Bond Fund may invest in variable and floating rate obligations,
municipal zero coupon securities, may purchase securities on a "when-issued"
basis and reserves the right to engage in transactions involving standby
commitments. The Municipal Bond Fund may invest up to 15% of its assets in
illiquid securities that are of comparable quality, as determined by the
Adviser, to the ratings discussed above. The Municipal Bond Fund may also borrow
money in aggregate amounts not in excess of 5% of its total assets.
For temporary defensive purposes when the Adviser determines that market
conditions warrant, the Municipal Bond Fund may invest up to 100% of its assets
in tax-exempt money market mutual funds, U.S. Treasury obligations and cash
reserves. To the extent that the Municipal Bond Fund is engaged in temporary
defensive investments, it will not be pursuing its investment objective.
Under normal circumstances, it is anticipated that the annual turnover rate of
the investments of the Municipal Bond Fund will be less than 100%.
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 Municipal Bond Fund 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.
For additional information regarding risks and permitted investments of the
Municipal Bond Fund, see "RISK FACTORS" and "DESCRIPTION OF CERTAIN PERMITTED
INVESTMENTS."
RISK FACTORS
FIXED INCOME SECURITIES--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 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 the
Municipal Bond Fund's shares.
RATED SECURITIES--The Municipal Bond Fund may invest in municipal securities
rated no less than investment grade by either S&P or Moody's. Up to 20% of the
Municipal Bond Fund's assets may be invested in municipal bonds in the lowest
investment grade debt category (i.e, bonds rated BBB by S&P or Baa by Moody's),
which have speculative characteristics. Changes in economic conditions or other
circumstances are more likely to lead to a weakened capacity on the part of
issuers of such municipal bonds to make principal and interest payments than is
the case with higher grade bonds. The Municipal Bond Fund may retain a municipal
security which was rated as investment grade at the time of purchase but whose
rating is subsequently downgraded below investment grade.
OTHER PERMITTED INVESTMENTS--Certain of the other investments permitted for the
Municipal Bond Fund
<PAGE> 7
7
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 THE MUNICIPAL BOND FUND WILL ACHIEVE ITS INVESTMENT
OBJECTIVE.
INVESTMENT LIMITATIONS
The Municipal Bond Fund may not:
1. With respect to 75% of its total assets, purchase securities of any issuer
(except securities issued or guaranteed by the United States Government, its
agencies or instrumentalities) if, as a result, more than 5% of the total assets
of the Municipal Bond Fund would be invested in the securities of such issuer or
it would hold more than 10% of the outstanding voting securities of that issuer.
2. Purchase securities of any issuer (except securities issued or guaranteed by
the U.S. Government, its agencies or instrumentalities) if, as a result, more
than 25% of the total assets of the Municipal Bond Fund 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 Municipal Bond
Fund. All borrowings will be repaid before making additional investments and any
interest paid on such borrowings will reduce the income of the Municipal Bond
Fund.
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 objective and investment limitations stated above are fundamental
policies of the Municipal Bond Fund. Fundamental policies of the Municipal Bond
Fund cannot be changed without the consent of the holders of a majority of the
Municipal Bond Fund's outstanding shares. The term "majority of the outstanding
shares" of the Municipal Bond Fund as used in this Prospectus means the vote of
(i) 67% or more of the Municipal Bond Fund's shares present at a meeting, if the
holders of more than 50% of the outstanding shares of the Municipal Bond Fund
are present or represented by proxy, or (ii) more than 50% of the Municipal Bond
Fund's outstanding shares, whichever is less.
THE ADVISER
First Security Investment Management, Inc. ("FSIM" or the "Adviser") serves as
investment adviser to the Municipal Bond Fund pursuant to an investment advisory
agreement (the "Advisory Agreement") with the Trust. The selection of FSIM to
serve as investment adviser to the Municipal Bond Fund was approved by the
Trustees and the initial shareholder of the Municipal Bond Fund. Under the
Advisory Agreement, the Adviser makes investment decisions for the Municipal
Bond Fund and continuously reviews, supervises and administers the Municipal
Bond Fund'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
0.60% of the average daily net assets of the Municipal Bond Fund. The Adviser
has voluntarily waived a portion of its fee for the Municipal Bond Fund's
current fiscal year so that total operating expenses for the Municipal Bond Fund
will not exceed 0.75%. When the fee waiver is in effect, the fee payable to the
Adviser will be calculated by applying 0.30% to the average daily net assets of
the Municipal Bond Fund. The Adviser may revoke its fee waiver at any time at
its sole discretion without notice to any current or prospective shareholder.
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
<PAGE> 8
8
in Utah. In addition to advising the Municipal Bond Fund and the Trust's other
investment 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 individual is responsible of the day-to-day management of the
Municipal Bond Fund:
James A. 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 Municipal Bond Fund since that time. Mr.
Schuck also is responsible for management of the Trust's Short Term Municipal
Bond Fund and Idaho Municipal Bond Fund.
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
SEI Fund Resources, 680 East Swedesford Road, Wayne, PA 19087, a wholly-owned
subsidiary of SEI Financial 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 Municipal Bond
Fund in an amount which is calculated at an annual rate of 0.20% of its average
daily net assets.
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 Municipal Bond Fund 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.
<PAGE> 9
9
PURCHASE, EXCHANGE AND REDEMPTION
OF SHARES
Financial institutions may acquire shares of the Municipal Bond Fund 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 the Municipal Bond Fund are offered only to residents of states in which the
shares are eligible for purchase.
Shares of the Municipal Bond Fund 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 Municipal Bond Fund 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 the Municipal Bond Fund is determined by dividing the total market
value of the Municipal Bond Fund's investments and other assets, less any
liabilities, by the total outstanding shares of the Municipal Bond Fund. 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
impose separate charges on these customers for account services.
An exchange between the Institutional class and the Retail Class A shares of the
Municipal Bond Fund 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 the Municipal Bond Fund 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 the Municipal Bond Fund may be exchanged for
Institutional Class shares
<PAGE> 10
10
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.
The Municipal Bond Fund 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 the
Municipal Bond Fund. 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 Municipal Bond Fund may
be invested in shares of one of the other investment portfolios offered by the
Trust if shares of such 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 the other
investment 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 the Municipal Bond Fund 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
Municipal Bond Fund 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, 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
From time to time the Municipal Bond Fund may advertise yield and total return,
and 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 the Municipal Bond Fund refers to the income generated by a hypothetical
investment in the Municipal Bond Fund 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 the Municipal Bond Fund's yield, assuming certain rates of
taxation for a shareholder.
The total return of the Municipal Bond Fund refers to the average compounded
rate of return on a hypothetical investment for designated time periods,
<PAGE> 11
11
assuming that the entire investment is redeemed at the end of each period and
assuming the reinvestment of all dividend and capital gain distributions.
The Municipal Bond Fund 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. The Municipal Bond Fund may advertise
performance that includes results from periods during which the initial assets
of the Municipal Bond Fund were held in a predecessor collective investment
trust managed by the Adviser. The Municipal Bond Fund may quote a service that
ranks mutual funds on the basis of risk-adjusted performance (such as
Morningstar, Inc.). The Municipal Bond Fund 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. The Municipal Bond Fund may also quote financial
and business publications and periodicals as they relate to fund management,
investment philosophy and investment techniques.
The Municipal Bond Fund 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.
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
Municipal Bond Fund or its 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 the
Municipal Bond Fund 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 MUNICIPAL BOND FUND
The Municipal Bond Fund is treated as a separate entity for federal income tax
purposes and is not combined with the Trust's other portfolios. The Municipal
Bond Fund 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
The Municipal Bond Fund 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 the Municipal Bond Fund's total assets
consists of obligations the interest on which is excludable from gross income,
the Municipal Bond Fund 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,
<PAGE> 12
12
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 the Municipal Bond Fund 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 received by the Municipal Bond Fund from taxable
securities will be taxable to shareholders as ordinary income (whether received
in cash or in additional shares) to the extent of the Municipal Bond Fund's
earnings and profits and will not qualify for the dividends-received deduction
for corporate shareholders. Distributions to shareholders of net capital gains
of the Municipal Bond Fund 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.
The Municipal Bond Fund 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. The Municipal Bond Fund
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 the Municipal Bond Fund is not intended to constitute a
balanced investment program. Shares of the 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 the Municipal Bond Fund being
tax-exempt, but also such dividends would be taxable when distributed to the
beneficiary.
ADDITIONAL FEDERAL TAX INFORMATION
Dividends declared by the Municipal Bond Fund 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 Municipal Bond Fund and received by the
shareholders on December 31 of that year if paid at any time during the
following January.
The Municipal Bond Fund 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 the Municipal Bond Fund, which may differ from
federal income tax consequences described above.
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").
In addition to the Municipal Bond Fund, the Trust currently offers shares of
beneficial interest in six separate investment portfolios designated as the
Equity Fund, Balanced Fund, Intermediate Term Bond Fund, Short Term Bond Fund,
Short Term Municipal
<PAGE> 13
13
Bond Fund and Idaho Municipal Bond Fund. 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. The Trust currently offers two classes of shares of each of its
portfolios, 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 of the Municipal Bond Fund are
offered by this prospectus. Shares of the Retail Class A class of the Municipal
Bond Fund are offered through a separate prospectus.
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.
EXPENSES
The Municipal Bond Fund will incur expenses in the conduct of its operations in
addition to the fees to be paid to the Adviser and the Administrator described
above. Those expenses will include custodial fees, professional fees,
registration fees, printing expenses, certain organizational costs and other
third party expenses. See "Estimated Annual Operating Expenses" for an estimate
of the amount of such other expenses expressed as a percentage of the Municipal
Bond Fund's net assets.
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
the Municipal Bond Fund is distributed in the form of dividends that are
declared daily and paid monthly. 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 Municipal Bond
Fund at least annually.
<PAGE> 14
14
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 the Municipal Bond Fund 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 Municipal Bond Fund under a transfer agency agreement with the Trust.
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
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.
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.
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 its daily cash positions, the Municipal Bond Fund may invest in
money market fund shares having investment objectives and policies consistent
with those of the Municipal Bond Fund. 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).
MUNICIPAL LEASE OBLIGATIONS--Municipal lease obligations are securities issued
by state and local
<PAGE> 15
15
governments and authorities to finance the acquisition of equipment and
facilities. They may take the form of a lease, an installment purchase contract,
a conditional sales contract, or a participation interest in any of the above.
Municipal lease obligations are subject to the risk that the issuing
municipality may fail to appropriate funds for the payments due thereunder in
future years. Depending upon the market for such securities, municipal lease
obligations may be illiquid. The Trust's Board of Trustee's has adopted
guidelines that direct the Municipal Bond Fund's investment adviser to consider
the following factors in determining whether municipal lease obligations are
liquid securities: (i) the frequency of trades and market quotations for the
securities; (ii) the number of dealers willing and ready to purchase and sell
the securities; (iii) the number of potential purchasers of the securities; (iv)
whether any dealers have agreed to make a market in the securities; (v) the
nature of the securities and the nature of marketplace trades, including the
time needed to dispose of the security, the method of soliciting offers and the
mechanics of transfer; (vi) whether the lease can be cancelled; (vii) what
assurances, if any, exist that the assets represented by the lease can be sold;
(viii) the strength of the lessee's general credit; (ix) the likelihood that the
municipality will discontinue appropriating funding for the leased property
because the property is no longer deemed essential to the operation of the
municipality; and (x) the legal recourse in the event of failure to appropriate.
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, (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,
(iii) municipal lease obligations, and (iv) tax-exempt mutual funds, including
tax-exempt money market funds.
Municipal securities include 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
Municipal Bond Fund's assets are invested in municipal securities payable from
revenue on similar projects, the Municipal Bond Fund 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
<PAGE> 16
16
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
effected by regional or national recessions.
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 Municipal Bond
Fund if it owns the security to which the commitment 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
Municipal Bond Fund will limit standby commitment transactions to institutions
believed to present minimal credit risk.
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> 17
17
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
(e.g., 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> 18
18
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> 19
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Summary.......................................... 2
Estimated Annual Operating Expenses.............. 4
The Trust........................................ 5
Investment Objectives and Policies............... 5
Risk Factors..................................... 6
Investment Limitations........................... 7
Fundamental Policies............................. 7
The Adviser...................................... 7
The Administrator................................ 8
The Distributor.................................. 8
Purchase, Exchange and Redemption of Shares...... 9
Performance...................................... 10
Taxes............................................ 11
General Information.............................. 12
Description of Certain Permitted Investments..... 14
Appendix......................................... 17
</TABLE>
<PAGE> 20
<TABLE>
<S> <C>
[THE 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 MUNICIPAL BOND FUND
A CONVENIENT RANGE OF
INVESTMENT CHOICES
TO INVESTORS.
JUNE 1, 1996
DISTRIBUTED BY
SEI FINANCIAL SERVICES COMPANY
680 EAST SWEDESFORD ROAD
WAYNE, PENNSYLVANIA 19087-1658
800-472-0577
ACH-F-017-02
</TABLE>
