<PAGE>
SUPPLEMENT TO PROSPECTUS FOR NORTH AMERICAN FUNDS
Dated March 1, 1999, as revised May 13, 1999
Effective December 14, 1999, and in accordance with the terms of the
Advisory Agreement between North American Funds and CypressTree Asset
Management Corporation, Inc ("CAM"), the expense limitations with respect to
the Management Fees paid to CAM by each of the Funds (other than the Tax-
Sensitive Equity Fund) are being revised.
Pages 19-23 of the prospectus are therefore replaced in their entirety by
the following:
91405 November 10,
1999
<PAGE>
Section II:
Fees and Expenses of the North American Funds
This table describes the fees and expenses that you may pay if you invest in
the Funds.
Shareholder Fees (fees paid directly from your investment)
<TABLE>
<CAPTION>
Class A Class B Class C
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
Maximum Sales Charge Imposed on
Purchases (as a percentage of offering price)
Equity Funds/1/ 5.75% None None
Other Funds except Money Market Fund 4.75% None None
Money Market Fund None None None
Maximum Deferred Sales Charge (as a
percentage of original purchase price or
redemption price, whichever is lower)
Other Funds except Money Market Fund 1%/2/ 5%/3/ 1%/4/
Money Market Fund None None None
Annual Fund Operating Expenses (expenses that are deducted from fund assets)
<CAPTION>
Fund Class A Class B Class C
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
International Small Cap Fund
Management Fees 1.05% 1.05% 1.05%
Distribution (12b-1) Fees 0.35% 1.00% 1.00%
Other Expenses 0.65% 0.65% 0.65%
Total Annual Fund Operating Expenses 2.05% 2.70% 2.70%
- ----------------------------------------------------------------------------
International Equity Fund
Management Fees 0.90% 0.90% 0.90%
Distribution (12b-1) Fees 0.35% 1.00% 1.00%
Other Expenses 0.65% 0.65% 0.65%
Total Annual Fund Operating Expenses 1.90% 2.55% 2.55%
- ----------------------------------------------------------------------------
Global Equity Fund
Management Fees 0.90% 0.90% 0.90%
Distribution (12b-1) Fees 0.35% 1.00% 1.00%
Other Expenses 0.62% 0.62% 0.62%
Total Annual Fund Operating Expenses 1.87% 2.52% 2.52%
- ----------------------------------------------------------------------------
Emerging Growth Fund
Management Fees 0.95% 0.95% 0.95%
Distribution (12b-1) Fees 0.35% 1.00% 1.00%
Other Expenses 0.52% 0.52% 0.52%
Total Annual Fund Operating Expenses 1.82% 2.47% 2.47%
- ----------------------------------------------------------------------------
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
Class Class Class
Fund A B C
- --------------------------------------------------------
<S> <C> <C> <C>
Small/Mid Cap Fund
Management Fees 0.93% 0.93% 0.93%
Distribution (12b-1) Fees 0.35% 1.00% 1.00%
Other Expenses 0.50% 0.50% 0.50%
Total Annual Fund Operating Expenses 1.78% 2.43% 2.43%
- --------------------------------------------------------
Growth Equity Fund
Management Fees 0.90% 0.90% 0.90%
Distribution (12b-1) Fees 0.35% 1.00% 1.00%
Other Expenses 0.52% 0.52% 0.52%
Total Annual Fund Operating Expenses 1.77% 2.42% 2.42%
- --------------------------------------------------------
Tax-Sensitive Equity Fund
Management Fees 0.85% 0.85% 0.85%
Distribution (12b-1) Fees 0.35% 1.00% 1.00%
Other Expenses 0.40% 0.40% 0.40%
Total Annual Fund Operating Expenses 1.60% 2.25% 2.25%
- --------------------------------------------------------
Growth and Income Fund
Management Fees 0.73% 0.73% 0.73%
Distribution (12b-1) Fees 0.35% 1.00% 1.00%
Other Expenses 0.38% 0.38% 0.38%
Total Annual Fund Operating Expenses 1.46% 2.11% 2.11%
- --------------------------------------------------------
Equity-Income Fund
Management Fees 0.75% 0.75% 0.75%
Distribution (12b-1) Fees 0.35% 1.00% 1.00%
Other Expenses 0.37% 0.37% 0.37%
Total Annual Fund Operating Expenses 1.47% 2.12% 2.12%
- --------------------------------------------------------
Balanced Fund
Management Fees 0.78% 0.78% 0.78%
Distribution (12b-1) Fees 0.35% 1.00% 1.00%
Other Expenses 0.38% 0.38% 0.38%
Total Annual Fund Operating Expenses 1.51% 2.16% 2.16%
- --------------------------------------------------------
Strategic Income Fund
Management Fees 0.75% 0.75% 0.75%
Distribution (12b-1) Fees 0.35% 1.00% 1.00%
Other Expenses 0.45% 0.45% 0.45%
Total Annual Fund Operating Expenses 1.55% 2.20% 2.20%
- --------------------------------------------------------
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
Fund Class A Class B Class C
- --------------------------------------------------------------
<S> <C> <C> <C>
Investment Quality Bond Fund
Management Fees 0.60% 0.60% 0.60%
Distribution (12b-1) Fees 0.35% 1.00% 1.00%
Other Expenses 0.35% 0.35% 0.35%
Total Annual Fund Operating Expenses 1.30% 1.95% 1.95%
- --------------------------------------------------------------
National Municipal Bond Fund
Management Fees 0.60% 0.60% 0.60%
Distribution (12b-1) Fees 0.15% 1.00% 1.00%
Other Expenses 0.25% 0.25% 0.25%
Total Annual Fund Operating Expenses 1.00% 1.85% 1.85%
- --------------------------------------------------------------
U.S. Government Securities Fund
Management Fees 0.60% 0.60% 0.60%
Distribution (12b-1) Fees 0.35% 1.00% 1.00%
Other Expenses 0.30% 0.30% 0.30%
Total Annual Fund Operating Expenses 1.25% 1.90% 1.90%
- --------------------------------------------------------------
Money Market Fund
Management Fees 0.20% 0.20% 0.20%
Distribution (12b-1) Fees 0.00% 0.00% 0.00%
Other Expenses 0.50% 0.50% 0.50%
Total Annual Fund Operating Expenses 0.70% 0.70% 0.70%
</TABLE>
- --------------------------------------------------------------------------------
1 "Equity Funds" The higher Distribution By translating "Total
are the first ten Fees borne by Class B Annual Fund Operating
funds listed in and Class C shares may Expenses" into dollar
the table. cause long-term amounts, these examples
2 For purchases of shareholders to pay help you compare the
$1 million or more in sales charges costs of investing in a
more. than the maximum particular Fund, or a
3 5% first and second permitted front-end particular class of
year; 4% third sales charge on Class A shares, with the costs
year; 3% fourth shares. of investing in other
year; 2% fifth mutual funds.
year; 1% sixth year
and 0% thereafter.
4 0% after first year.
21
<PAGE>
The examples assume that you:
. Invest $10,000 in a Fund for the time period indicated and then redeem all
of your shares at the end of those periods.
. Your investment earns a 5% return each year and that each Fund's operating
expenses remain the same.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
<TABLE>
<CAPTION>
Fund 1 Year 3 Years 5 Years 10 Years
- -------------------------------------------------------------
<S> <C> <C> <C> <C>
International Small Cap Fund
Class A Shares 771 1,181 1,615 2,817
Class B Shares 773 1,238 1,630 2,872
Class B No redemption 273 838 1,430 2,872
Class C Shares 373 838 1,430 3,032
Class C No redemption 273 838 1,430 3,032
- -------------------------------------------------------------
International Equity Fund
Class A Shares 757 1,138 1,542 2,669
Class B Shares 758 1,193 1,555 2,724
Class B No redemption 258 793 1,355 2,724
Class C Shares 358 793 1,355 2,885
Class C No redemption 258 793 1,355 2,885
- -------------------------------------------------------------
Global Equity Fund
Class A Shares 754 1,129 1,528 2,639
Class B Shares 755 1,185 1,540 2,694
Class B No redemption 255 785 1,340 2,694
Class C Shares 355 785 1,340 2,856
Class C No redemption 255 785 1,340 2,856
- -------------------------------------------------------------
Emerging Growth Fund
Class A Shares 749 1,115 1,504 2,589
Class B Shares 750 1,170 1,516 2,643
Class B No redemption 250 770 1,316 2,643
Class C Shares 350 770 1,316 2,806
Class C No redemption 250 770 1,316 2,806
- -------------------------------------------------------------
Small/Mid Cap Fund
Class A Shares 745 1,103 1,484 2,549
Class B Shares 746 1,158 1,496 2,603
Class B No redemption 246 758 1,296 2,603
Class C Shares 346 758 1,296 2,766
Class C No redemption 246 758 1,296 2,766
- -------------------------------------------------------------
Growth Equity Fund
Class A Shares 745 1,100 1,479 2,539
Class B Shares 745 1,155 1,491 2,593
Class B No redemption 245 755 1,291 2,593
Class C Shares 345 755 1,291 2,756
Class C No redemption 245 755 1,291 2,756
- -------------------------------------------------------------
Tax-Sensitive Equity Fund
Class A Shares 728 1,051 1,396 2,366
Class B Shares 728 1,103 1,405 2,419
Class B No redemption 228 703 1,205 2,419
Class C Shares 328 703 1,205 2,585
Class C No redemption 228 703 1,205 2,585
- -------------------------------------------------------------
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
Fund 1 Year 3 Years 5 Years 10 Years
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
Growth and Income Fund
Class A Shares 715 1,010 1,327 2,221
Class B Shares 714 1,061 1,334 2,273
Class B No redemption 214 661 1,134 2,273
Class C Shares 314 661 1,134 2,441
Class C No redemption 214 661 1,134 2,441
- ----------------------------------------------------------------
Equity-Income Fund
Class A Shares 716 1,103 1,332 2,231
Class B Shares 715 1,064 1,339 2,284
Class B No redemption 215 664 1,139 2,284
Class C Shares 315 664 1,139 2,452
Class C No redemption 215 644 1,139 2,452
- ----------------------------------------------------------------
Balanced Fund
Class A Shares 720 1,025 1,351 2,273
Class B Shares 719 1,076 1,359 2,326
Class B No redemption 219 676 1,159 2,326
Class C Shares 319 676 1,159 2,493
Class C No redemption 219 676 1,159 2,493
- ----------------------------------------------------------------
Strategic Income Fund
Class A Shares 724 1,036 1,371 2,314
Class B Shares 723 1,088 1,380 2,367
Class B No redemption 223 688 1,180 2,367
Class C Shares 323 688 1,180 2,543
Class C No redemption 223 688 1,180 2,534
- ----------------------------------------------------------------
Investment Quality Bond Fund
Class A Shares 700 963 1,247 2,053
Class B Shares 698 1,012 1,252 2,104
Class B No redemption 198 612 1,052 2,104
Class C Shares 298 612 1,052 2,275
Class C No redemption 198 612 1,052 2,275
- ----------------------------------------------------------------
National Municipal Bond
Class A Shares 671 875 1,096 1,729
Class B Shares 688 982 1,201 1,944
Class B No redemption 188 582 1,001 1,944
Class C Shares 288 582 1,001 2,169
Class C No redemption 188 582 1,001 2,169
- ----------------------------------------------------------------
U.S. Government Securities Fund
Class A Shares 695 949 1,222 1,999
Class B Shares 693 997 1,226 2,051
Class B No redemption 193 597 1,026 2,051
Class C Shares 293 597 1,026 2,222
Class C No redemption 193 597 1,026 2,222
- ----------------------------------------------------------------
Money Market Fund
Class A Shares 72 224 390 871
Class B Shares 72 224 390 871
Class B No Redemption 72 224 390 871
Class C Shares 72 224 390 871
Class C No Redemption 72 224 390 871
- ----------------------------------------------------------------
</TABLE>
23
