NORTH AMERICAN FUNDS, 485APOS, 2000-03-17

NORTH AMERICAN FUNDS
485APOS, 2000-03-17

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REGISTRATION NOS. 33-27958, 811-5797
As filed with the Securities and Exchange Commission
on March 17, 2000
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

____________________

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X /
--

PRE-EFFECTIVE AMENDMENT NO. __ /__/

POST-EFFECTIVE AMENDMENT NO. 32 /X /
--

AND/OR

REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 /X /
--

AMENDMENT NO. 34 /X /
--

NORTH AMERICAN FUNDS
(Exact Name of Registrant as Specified in Charter)

286 Congress Street
Boston, Massachusetts 02210
(800) 872-8037
(Address of Principal Executive Offices)
John I. Fitzgerald, Esq.
General Counsel
North American Funds
286 Congress Street
Boston, MA 02210
(Agent for Service)

____________________

Copy to:
Gregory D. Sheehan, Esq.
Ropes & Gray
One International Place
Boston, MA 02110

It is proposed that this filing will become effective (check appropriate box)

[ ] immediately upon filing pursuant to paragraph (b)
[_] on (date) pursuant to paragraph (b)
[_] 60 days after filing pursuant to paragraph (a)(1)
[_] on (date) pursuant to paragraph (a)(1)
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[X] 75 days after filing pursuant to paragraph (a)(2)
[_] on (date) pursuant to paragraph (a)(2) of rule 485.

If appropriate, check the following box:

[_] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

PARTS A AND B OF THIS AMENDMENT RELATE ONLY TO THE FOLLOWING SERIES OF THE
REGISTRANT:

Mid Cap Value Fund
Stock Index Fund
Small Cap Index Fund
Socially Responsible Fund
High Yield Bond Fund
Aggressive Growth Lifestyle Fund
Moderate Growth Lifestyle Fund
Conservative Growth Lifestyle Fund
Municipal Money Market Fund
Science & Technology Fund

NO INFORMATION RELATING TO ANY OTHER SERIES IS AMENDED, DELETED OR SUPERSEDED BY
PARTS A AND B OF THIS AMENDMENT.

-2-

<PAGE>

PROSPECTUS 2000

North American Funds

Mid Cap Value Fund Aggressive Growth Lifestyle Fund
Stock Index Fund Moderate Growth Lifestyle Fund
Small Cap Index Fund Conservative Growth Lifestyle Fund
Socially Responsible Fund Municipal Money Market Fund
High Yield Bond Fund Science & Technology Fund

Class A Shares
Class B Shares
Class C Shares

The Securities and Exchange Commission has not approved or disapproved of these
securities or passed on the adequacy or accuracy of this prospectus. Any
representation to the contrary is a criminal offense.

May __, 2000
<PAGE>

Table of Contents
Organization of Information

This Prospectus includes information about ten different Funds.

. Section I of the Prospectus includes summaries of each Fund.
. Section II includes additional information about the Funds'
investment strategies, additional risk information and information
about the Funds' management.
. Section III of the Prospectus includes information about how to
invest and manage your North American Funds account.

Section I: Summaries of the Funds .............................. Page

Summary of each Fund

. Investment Objective
. Principal Investment Strategies
. Main Investing Risks
. Investment Performance
. Descriptions of Main Investment Risks

Section II: Other Information about each Fund .................. Page

. Fees and Expenses
. More Information About Investment
Strategies and Risks
. Other Risks of Investment
. Fund Management

Section III: Investing in the Funds ............................. Page

This section includes the information you need about how to invest and how to
redeem shares. It also includes other important information about sales
charges, taxes and account privileges.

More Information

If you'd like information additional to that included in this Prospectus, the
back cover lists a number of places to call or to visit for additional
materials.
<PAGE>

Section I:

Fund Summaries

North American Funds (the "Trust") is a group of mutual funds that includes
twenty-six separate investment portfolios, or funds. Each Fund has a specific,
unique investment objective. Each Fund also has a subadvisor, a firm responsible
for making investment decisions for the Fund.

The summaries starting on the next page describe the investment objective and
principal investment strategies of ten of the North American Funds (the
"Funds"). The summaries also list the main risks of investing in each Fund.
Explanations of these main risks start on page __.

No performance information is available for the Funds because they have just
begun operation. In the future, each Fund will disclose performance information
in a bar chart and performance table. Such disclosure will give some indication
of the risks of an investment in the Fund by comparing the Fund's performance
with a broad measure of market performance and by showing changes in the Fund's
performance from year to year.

It is important to remember that, as with any investment, it is possible for
investors to lose money by investing in the Funds. An investment in any of the
Funds is not a deposit in a bank and is not insured by the Federal Deposit
Insurance Corporation or any other government agency.
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Mid Cap Value Fund

Investment Goal and Strategies

The investment objective of the Mid Cap Value Fund is to seek capital growth.
Neuberger Berman Management, Inc. ("NBM"), the Fund's Subadvisor, pursues this
objective by investing at least 65% of total assets in equity securities of
medium capitalization companies using a value-oriented investment approach. This
investment objective can be changed by the Board of Trustees, without the
approval of the Fund shareholders.

Medium capitalization companies include companies with the characteristics of
companies included in the Russell Midcap/ TM/ Index. As of June 30, 1999, the
largest company included in the Russell Midcap/ TM/ Index had an approximate
market capitalization of $11.2 billion, while the average market capitalization
was approximately $3.9 billion.

NBM chooses securities it believes are undervalued based on strong fundamentals,
including a low price-to-earnings ratio, consistent cash flow, and the company's
track record through all parts of the market cycle. When selecting securities
for this Fund, NBM also considers other factors, including ownership by a
company's management of the company's stock and the dominance of a company in
its particular field. Up to 35% of the Fund's total assets may be invested in
other equity securities, including common and preferred stocks, convertible
securities, and related equities. The Fund may invest in derivatives.

The Fund may participate in the Initial Public Offering ("IPO") market, and a
portion of the Fund's returns may be attributable to the Fund's investments in
IPOs. There is no guarantee that as the Fund's assets grow that it will
experience significant improvement in performance by investing in IPOs. The Fund
will be actively traded, which will be reflected in its portfolio turnover rate.
The rate of portfolio turnover is calculated by dividing the lesser of the
amount of purchases or sales of portfolio securities during the fiscal year by
the average of the value of the portfolio securities. The Fund's active trading
strategy may cause the Fund to have a relatively high amount of short-term
capital gains, which are taxable to you at your ordinary income tax rate.

MAIN INVESTING RISKS

. Credit Risk, (including the particular risks associated with junk bonds)
. Derivatives Risk
. Equity Risk
. Liquidity Risk
. Management Risk

-2-
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Stock Index Fund

Investment Goal and Strategies

The Stock Index Fund seeks to provide investment results that are similar to the
total return of the S&P 500 Index ("Index"). As a group, the investment
results, before expenses, are expected to approximate the total return (the
combination of capital changes and income) of selected common stocks that
statistically reflect the Index. This investment objective can be changed by
the Board of Trustees, without the approval of the Fund shareholders.

An index fund tries to match the performance of its target index as closely as
possible by owning stocks in the index, and holding them in the same
proportions, so the fund will mimic the overall performance of the index. the
Stock Index Fund seeks to match the investment performance of the S&P 500 Index.
The S&P 500 Index is composed of 500 common stocks which are chosen by Standard
& Poor's Corporation. The Index approximates the general distribution of
industries in the U.S. economy, and captures the price performance of a large
cross-section of the publicly traded stock market. The Index is capitalization-
weighted, meaning that it holds each stock in proportion to its total value in
the stock market.

American General Investment Management, L.P., ("AGIM") the Fund's Subadvisor,
pursues this objective by investing in companies that are listed in the Index,
except for a small portion in cash, to be available for redemptions. Since it
may not be possible for this Fund to buy every stock included in the Index, or
in the same proportions, the Fund invests in a sampling of common stocks in
theIndex. The common stocks of the S&P 500 Index to be included in the Fund
will be selected utilizing a statistical sampling technique known as
"optimization." This process selects stocks for the Fund so that various
industry weightings, market capitalizations and fundamental characteristics
(e.g., price-to-book, price-to-earnings, debt- to-asset ratios and dividend
yields) closely approximate those of the Index. The common stocks held by the
Fund are weighted to make the Fund's aggregate investment characteristics
similar to those of the Index as a whole.

Generally, an index fund tries to mirror the target index and its performance.
The performance will not match exactly, thought, because the index fund incurs
operating expenses and other investment overhead as part of its normal
operations. The index is an unmanaged group of securities, so it does not have
these expenses. An investor cannot invest directly in an index. These
differences between an index fund and its index are called tracking differences.
An index fund seeks a tracking difference of 0.05% or less. The tracking
difference may also be shown as a correlation factor. A correlation factor of
0.95, after expenses, is considered to be good, while a correlation of 1.00 is
perfect.

The tracking differences are reviewed daily by AGIM for the Fund. If the Fund
does not accurately track an index, AGI will rebalance the Fund's portfolio by
selecting securities which will provide a more representative sampling of the
securities in the index as a whole or the sector diversification within the
index, as appropriate.

MAIN INVESTING RISKS

. Credit Risk
. Currency Risk
. Derivatives Risk
. Equity Risk
. Foreign Investment Risk
. Liquidity Risk
. Management Risk

-3-
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Small Cap Index Fund

Investment Goal and Strategies

The Small Cap Index Fund seeks to provide investment results that are similar to
the total return of the Russell 2000(R) Index ("Index"). As a group, the
investment results, before expenses, are expected to approximate the total
return (the combination of capital changes and income) of selected common stocks
that statistically reflect the Index. This investment objective can be changed
by the Board of Trustees, without the approval of the Fund shareholders.

An index fund tries to match the performance of its target index as closely as
possible by owning stocks in the index, and holding them in the same
proportions, so the fund will mimic the overall performance of the index. The
Small Cap Index Fund seeks to match the investment performance of the Russell
2000(R) Index. The Russell 2000(R) Index is a sub-index of the Russell 3000(R)
Index, which follows the 3,000 largest U.S. companies based on total market
capitalization. The Russell 2000(R) Index measures the performance of the 2,000
smallest companies in the Russell 3000(R) Index, and represents about 8% of the
total market capitalization of the Russell 3000(R) Index. The average market
capitalization in the Russell 2000(R) Index is $526.4 million as of June 30,
1999. As of the same date, the largest company in the Index had a market
capitalization of nearly $1,350 billion.

To achieve this objective, AGIM, the Fund's subadvisor, invests in companies
that are listed in the Index, except for a small portion in cash, to be
available for redemptions. Since it may not be possible for this Fund to buy
every stock included in the Index, or in the same proportions, the Fund invests
in a sampling of common stocks in the Index. The common stocks of the Russell
2000(R) Index to be included in the Fund will be selected utilizing a
statistical sampling technique known as "optimization." This process selects
stocks for the fund so that various industry weightings, market capitalizations
and fundamental characteristics (e.g., price-to-book, price-to-earnings, debt-
to-asset ratios and dividend yields) closely approximate those of the Index. The
common stocks held by the Fund are weighted to make the Fund's aggregate
investment characteristics similar to those of the Index as a whole.

Generally, an index fund tries to mirror the target index and its performance.
The performance will not march exactly, though, because the index fund incurs
operating expenses and other investment overhead as part of its normal
operations. The index is an unmanaged group of securities, so it does not have
these expenses. An investor cannot invest directly in an index. These
differences between an index fund and its index are called tracking differences.
An index fund seeks a tracking difference of 0.05% or less. The tracking
difference may also be shown as a correlation factor. A correlation factor of
0.95, after expenses, is considered to be good, while a correlation of 1.00 is
perfect.

The tracking differences are reviewed daily by AGIM for the Fund. If the Fund
does not accurately track an index, AGIM will rebalance the Fund's portfolio by
selecting securities which will provide a more representative sampling of the
securities in the index as a whole or the sector diversification within the
index, as appropriate.

MAIN INVESTING RISKS

. Credit Risk
. Currency Risk
. Derivatives Risk
. Equity Risk, (including the risks associated with investing in smaller
companies)
. Foreign Investment Risk
. Liquidity Risk
. Management Risk

-4-
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Socially Responsible Fund

Investment Goal and Strategies

The investment objective of the Socially Responsible Fund is to obtain growth of
capital. This investment objective can be changed by the Board of Trustees,
without the approval of the Fund shareholders.

To achieve this objective, AGIM, the Fund's subadvisor, will invest at least 80%
of the Fund's assets in the equity securities of companies meeting social
criteria established for the Fund. To find out which companies meet the Fund's
social criteria, AGIM relies on industry classifications and research services
such as the Investor Responsibility Research Center ("IRRC").

The Fund does not invest in companies that are significantly engaged in:

- - the production of nuclear energy;

- - the manufacture of weapons or delivery systems;

- - the manufacture of alcoholic beverages or tobacco products;

- - the operation of gambling casinos; or

- - business practices or the production of products that significantly pollute
the environment.

At least once a year, the IRRC surveys state laws to see if there are any new or
revised state laws that govern or affect the investments of public funds. If the
survey shows that at least 20 states have adopted laws that restrict public
funds from being invested in a clearly definable category of investments, this
category is automatically added to the Fund's social criteria list.

Up to 20% of the Fund's total assets may be invested in high quality money
market securities and warrants, or in other types of equity securities of
companies meeting social criteria, including American Depositary Receipts
("ADRs"), foreign securities, preferred stock, and convertible securities. The
Fund may invest in derivatives.

MAIN INVESTING RISKS

. Credit Risk
. Currency Risk
. Derivatives Risk
. Equity Risk
. Foreign Investment Risk
. Liquidity Risk
. Management Risk
. Social Criteria Risk

-5-
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High Yield Bond Fund

Investment Goal and Strategies

The High Yield Bond Fund seeks the highest possible total return consistent with
conservation of capital through investment in a diversified portfolio of high
yielding, high risk fixed-income securities. This investment objective can be
changed by the Board of Trustees, without the approval of the Fund shareholders.

To achieve this objective, AGIM, the Fund's subadvisor, invests at least 65% of
the Fund's total assets in below-investment grade U.S. and foreign junk bonds.
These high yielding, high risk fixed-income securities are rated below Baa3 by
Moody's and BBB- by S&P. Up to 15% can be rated below Caa3 by Moody's or CCC- by
S&P. The Fund may also invest up to 35% of total assets in below-investment
grade foreign fixed-income securities.

To balance this risk, the Fund may invest up to 35% in investment grade
securities, those rated Baa3 or higher by Moody's and BBB- or higher by S&P. In
addition, the Fund may invest up to 15% in zero coupon securities (securities
not paying current cash interest), and up to 20% of total assets in equity
securities. Equity securities includes common or preferred stocks, warrants, and
convertible securities. AGIM is not required to dispose of a bond that is
downgraded to below-investment grade. The Fund may invest in derivatives.

MAIN INVESTING RISKS

. Credit Risk, (including the particular risks associated with junk bonds)
. Currency Risk
. Derivatives Risk
. Foreign Investment Risk
. Interest Rate Risk
. Liquidity Risk
. Management Risk

-6-
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Aggressive Growth Lifestyle Fund

Investment Goal and Strategies

AGIM, the Subadvisor of the Aggressive Growth Lifestyle Fund, seeks growth
through investments in a combination of the North American Funds ("Underlying
Funds"). This Fund is suitable for investors seeking the potential for capital
growth that a fund investing predominately in equity securities may offer. The
investment objective of the Fund can be changed by the Board of Trustees,
without the approval of the Fund shareholders.

Asset allocation among the equity securities of international companies, large
capitalization companies, medium capitalization companies, small capitalization
companies and bonds is the most critical investment decision that you make as an
investor. Selecting the appropriate combination should be based on your personal
investment goals, time horizons and risk tolerance. The chart below reflects the
projected asset allocation ranges and Underlying Fund choices for this Fund, as
of the time of print.

This Fund is managed so that it can serve as a complete investment program for
you or as a core part of your larger portfolio. The Underlying Funds have been
selected to represent a reasonable spectrum of investment options for the Fund.
We have based the target investment percentages for the Fund on the degree to
which we believe the Underlying Funds, in combination, to be appropriate for the
Fund's investment objective. We may change the asset allocation ranges and the
particular Underlying Funds in which the Fund may invest from time to time. The
Fund is a non-diversified investment company under the 1940 Act because it
invests in a limitednumber of the Underlying Funds. However, the Underlying
Funds themselves are diversified companies.

MAIN INVESTING RISKS

. Concentration Risk
. Credit Risk
. Currency Risk
. Derivatives Risk
. Equity Risk
. Interest Rate Risk
. Liquidity Risk
. Foreign Investment Risk
. Management Risk

-7-
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International Equity Securities 25%-35%
Underlying Fund:
International Equity Fund
(This Fund invests at least 65% in non-U.S.
companies.)

Small Capitalization Equity Securities 15%-25%
Underlying Fund:
Small Cap Growth Fund
(This Fund invests in the equities of small
capitalization companies.)

Medium Capitalization Equity Securities 10%-20%
Underlying Funds:
Mid Cap Value Fund
Mid Cap Growth Fund
(These Funds invest in the equities of medium
capitalization companies.)

Large Capitalization Equity Securities 20%-30%
Underlying Funds:
Large Cap Growth Fund
Growth & Income Fund
(These Funds invest in the equities of large
capitalization companies.)

Bonds 5%-15%
Underlying Funds:
Core Bond Fund
High Yield Bond Fund
(These Funds invest in fixed-income securities,
at least 65% of which are investment grade.)

-8-
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Moderate Growth Lifestyle Fund

Investment Goal and Strategies

AGIM, the Fund's subadvisor, seeks growth and current income through investments
in a combination of the North American Funds ("Underlying Funds"). This Fund is
suitable for investors who wish to invest in equity securities, but who are not
willing to assume the substantial market risks of the Growth Lifestyle Fund. The
investment objective of the Fund can be changed by the Board of Trustees,
without the approval of the Fund shareholders.

Asset allocation among the equity securities of international companies, large
capitalization companies, medium capitalization companies, small capitalization
companies and bonds is the most critical investment decision that you make as an
investor. Selecting the appropriate combination should be based on your
personal investment goals, time horizons and risk tolerance. The chart below
reflects the projected asset allocation ranges and Underlying Fund choices for
this Fund, as of the time of print.

This Fund is managed so that it can serve as a complete investment program for
you or as a core part of your larger portfolio. The Underlying Funds have been
selected to represent a reasonable spectrum of investment options for the Fund.
We have based the target investment percentages for the Fund on the degree to
which we believe the Underlying Funds, in combination, to be appropriate for the
Fund's investment objective.We may change the asset allocation ranges and the
particular Underlying Funds in which the Fund may invest from time to time.

The Fund is a non-diversified investment company under the 1940 Act because it
invests in a limited number of the Underlying Funds. However, the Underlying
Funds themselves are diversified companies.

MAIN INVESTING RISKS

. Concentration Risk
. Credit Risk
. Currency Risk
. Derivatives Risk
. Equity Risk
. Interest Rate Risk
. Liquidity Risk
. Foreign Investment Risk
. Management Risk

-9-
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International Equity Securities 10%-20%
Underlying Fund:
International Equity Fund
(This Fund invests at least 65% in non-U.S.
companies.)

Small Capitalization Equity Securities 10%-20%
Underlying Fund:
Small Cap Growth Fund
(This Fund invests in the equities of small
capitalization companies.)

Medium Capitalization Equity Securities 10%-20%
Underlying Funds:
Mid Cap Value Fund
Mid Cap Growth Fund
(These Funds invest in the equities of medium
capitalization companies.)

Large Capitalization Equity Securities 25%-35%
Underlying Funds:
Large Cap Growth Fund
Growth & Income Fund
(These Funds invest in the equities of large
capitalization companies.)

Bonds 20%-30%
Underlying Funds:
Core Bond Fund
High Yield Bond Fund
(These Funds invest in fixed-income securities,
at least 65% of which are investment grade.)

-10-
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Conservative Growth Lifestyle Fund

Investment Goal and Strategies

AGIM, the subadvisor for the fund, seeks current income and low to moderate
growth of capital through investments in a combination of the North American
Funds ("Underlying Funds"). This Fund is suitable for investors who wish to
invest in equity securities, but who are not willing to assume the market risks
of either the Growth Lifestyle Fund or the Moderate Growth Lifestyle Fund. The
investment objective of the Fund can be changed by the Board of Trustees,
without the approval of the Fund shareholders.

This Fund is managed so that it can serve as a complete investment program for
you or as a core part of your larger portfolio. The Underlying Funds have been
selected to represent a reasonable spectrum of investment options for the Fund.
We have based the target investment percentages for the Fund on the degree to
which we believe the Underlying Funds, in combination, to be appropriate for the
Fund's investment objective. We may change the asset allocation ranges and the
particular Underlying Funds in which the Fund may invest from time to time. The
Fund is a non-diversified investment company under the 1940 Act because it
invests in a limited number of the Underlying Funds. However, the Underlying
Funds themselves are diversified companies.

MAIN INVESTING RISKS

. Concentration Risk
. Credit Risk
. Currency Risk
. Derivatives Risk
. Equity Risk
. Interest Rate Risk
. Liquidity Risk
. Foreign Investment Risk
. Management Risk

-11-
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International Equity Securities 5%-15%
Underlying Fund:
International Equity Fund
(This Fund invests at least 65% in non-U.S.
companies.)

Small Capitalization Equity Securities 5%-15%
Underlying Fund:
Small Cap Growth Fund
(This Fund invests in the equities of small
capitalization companies.)

Medium Capitalization Equity Securities 5%-15%
Underlying Funds:
Mid Cap Value Fund
Mid Cap Growth Fund
(These Funds invest in the equities of medium
capitalization companies.)

Large Capitalization Equity Securities 25%-35%
Underlying Funds:
Large Cap Growth Fund
Growth & Income Fund
(These Funds invest in the equities of large
capitalization companies.)

Bonds 30%-50%
Underlying Funds:
Core Bond Fund
High Yield Bond Fund
(These Funds invest in fixed-income securities,
at least 65% of which are investment grade.)

-12-
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Municipal Money Market Fund

Investment Goal and Strategies

The Fund seeks liquidity, protection of capital and current income through
investments in short-term money market securities that are exempt from regular
federal income taxation. This investment objective can be changed by the Board
of Trustees, without the approval of the Fund shareholders.

To achieve this objective, AGIM, the Fund's subadvisor, invests in short-term
money market securities to provide you with liquidity, protection of your
investment and current income that is exempt from federal income tax. AGIM uses
95% of the Fund's total assets to buy short-term securities that are rated
within the highest rating category for short-term fixed-income securities by at
least two nationally recognized rating services or unrated securities of
comparable investment quality. These eligible securities must mature, after
giving effect to any demand features, in 13 months or less and the Fund must
have a dollar-weighted average portfolio maturity of 90 days or less. These
practices are mandated by Rule 2a-7 of the 1940 Act and are designed to reduce
risk and minimize fluctuation in the share price. If the Fund invests in
municipal securities issued for certain private purposes, a portion of the
Fund's dividends may be subject to the alternative minimum tax.

The investments this Fund may buy include:

- - Municipal fixed-income securities with remaining maturities of 13 months or
less
- - Commercial paper sold by municipalities rated at least MIG1 or MIG2 by
Moody's or A1 or A2 by S&P
- - Variable rate demand notes
- - Auction rate preferred stock and other adjustable rate obligations that are
exempt from federal income taxation
- - Illiquid and restricted securities, limited to 10% of the Fund's net assets
at all times
- - Rule 144A securities (liquid)

MAIN INVESTING RISKS

. Credit Risk
. Interest Rate Risk
. Management Risk

-13-
<PAGE>

Science & Technology Fund

Investment Goals and Strategies

The objective of the Science and Technology Fund is long-term growth of capital.

The Fund's subadvisor, T. Rowe Price, pursues this objective by investing at
least 65% of the Fund's assets in the common stocks and equity-related
securities of companies that are expected to benefit from scientific
breakthroughs and advancements in technology. Some of the industries that are
likely to be included in the portfolio are:

- - Chemicals and synthetic materials, including pharmaceuticals
- - Computers, including hardware and software
- - Defense and aerospace
- - E-Commerce
- - Electronics
- - Media and information services
- - Telecommunications

The Fund may invest up to 30% of its assets foreign securities, including
American Depositary Receipts ("ADRs") and other dollar-denominated foreign
securities. The Fund may invest up to 25% in other equity-related securities of
science and technology companies, including convertible debt securities and
convertible preferred stock. In addition, the Fund may invest in money market
securities in order to have cash available for redemptions. The Fund may invest
in derivatives.

MAIN INVESTING RISKS

. Credit Risk
. Currency Risk
. Derivatives Risk
. Equity Risk
. Liquidity Risk
. Foreign Investment Risk
. Management Risk
. Science & Technology Company Risk

-14-
<PAGE>

Descriptions of Main Investing Risks

The value of your investment in a Fund can change for many reasons, and may
decrease. The primary reasons for possible decreases in a Fund's value are
called "Main Investing Risks," and are explained in this section. Because the
types of investments a Fund makes change over time, the types of risks affecting
the Fund will change as well. Section II of the Prospectus includes more
information about other risks that might affect the Funds' values.

Concentration Risk

Investment professionals believe that investment risk can be reduced through
diversification, which is simply the practice of choosing more than one type of
investment. On the other hand, concentrating investments in a smaller number of
securities increases risk.

Credit Risk

Credit Risk is the risk that the issuer or the guarantor (the entity that agrees
to pay the debt if the issuer cannot) of a debt or fixed income security, or the
counterpart to a derivatives contract or a securities loan, will not repay the
principal and interest owed to the investors or otherwise honor its obligations.
There are different levels of credit risk. Funds that invest in lower-rated
securities have higher levels of credit risk. Lower-rated or unrated securities
of equivalent quality (generally known as junk bonds) have very high levels of
credit risk. Securities that are highly rated have lower levels of credit risk.

Funds may be subject to greater credit risk because they may invest in debt
securities issued in connection with corporate restructurings by highly
leveraged (indebted) issuers and in debt securities not current in the payment
of interest or principal, or in default.

Funds that invest in foreign securities are also subject to increased credit
risk because of the difficulties of requiring foreign entities, including
issuers of sovereign (national) debt, to honor their contractual commitments,
and because a number of foreign governments and other issuers are already in
default.

Currency Risk

Funds that invest in securities that are denominated in and/or are receiving
revenues in foreign currencies are subject to currency risk. Currency risk is
the risk that foreign currencies will decline in value relative to the U.S.
dollar. In the case of hedging positions, it is the risk that the U.S. dollar
will decline in value relative to the currency hedged.

Derivatives Risk

Derivatives are financial contracts between two parties whose value depends on,
or is derived from, the change in value of an underlying asset, reference rate
or index. When the value of the underlying security or index changes, the value
of the derivative changes as well. As a result, derivatives can lose all of
their value very quickly. Derivatives also offer the opportunity for great
increases in value. Because derivatives are contracts between parties, there is
also some credit risks associated with using derivatives. Additional risk
associated with derivatives include mispricing and improper valuation.
Derivatives risk for some Funds will be increased by their investments in
structured securities.

Equity Risk

Equity securities, such as a company's common stock, may fall in value in
response to factors relating to the issuer, such as management decisions or
falling demand for a company's goods or services. Additionally, factors
affecting a company's particular industry, such as increased production costs,
may affect the value of its equity securities. Equity securities also rise and
fall in value as a result of factors affecting entire financial markets, such as
political or economic developments, or changes in investor psychology. Growth
stocks are the stocks of companies that have earnings that are expected to grow
relatively rapidly. As a result, the values of growth stocks may be more
sensitive to changes in current or expected

-15-
<PAGE>

earnings than the values of other stocks.

Value stocks are the stocks of companies that are not expected to experience
significant earnings growth, but that are undervalued, or are inexpensive
relative to the value of the company and its business as a whole. These
companies may have experienced recent troubles that have caused their stocks to
be out of favor with investors. If the market does not recognize the value of
the company over time, the price of its stock may fall, or simply may not
increase as expected.

Market capitalization refers to the total value of a company's outstanding
stock. Smaller companies with market capitalizations of less than $1 billion or
so are more likely than larger companies to have limited product lines, smaller
markets for their products and services, and they may depend on a small or
inexperienced management group. Small company stock may not trade very actively,
and their prices may fluctuate more than stocks of larger companies. Stocks of
smaller companies may be more vulnerable to negative changes than stocks of
larger companies.

Foreign Investment Risk

Funds investing in foreign securities may experience rapid changes in value. One
reason for this volatility is that the securities markets of many foreign
countries are relatively small, with a limited number of industries. Also,
foreign securities issuers are usually not subject to the same degree of
regulation as U.S. issuers. Reporting, accounting and auditing standards of
foreign countries differ, in some cases significantly, from U.S. standards.

The possibility of political instability or diplomatic developments in foreign
countries could trigger nationalization of companies and industries,
expropriation (confiscation of property), extremely high levels of taxation, and
other negative developments. In the event of nationalization, expropriation or
other confiscation, a Fund could lose its entire investment. Funds that invest
in sovereign debt obligations are exposed to the risks of political, social and
economic change in the countries that issued the bonds.

Interest Rate Risk (Market Risk)

Interest rate risk, or market risk, is the risk that a change in interest rates
will negatively affect the value of a security. This risk applies primarily to
debt securities such as bonds, notes and asset backed securities. Debt
securities are obligations of the issuer to make payments of principal and/or
interest on future dates. As interest rates rise, an investment in a Fund can
lose value, because the value of the securities the Fund holds may fall.

Market risk is generally greater for Funds that invest in debt securities with
longer maturities. This risk may be increased for Funds that invest in mortgage-
backed or other types of asset-backed securities that are often prepaid. Even
Funds that invest in the highest quality debt securities are subject to interest
rate risk.

Liquidity Risk

Liquidity risk is the risk that a Fund will not be able to sell a security
because there are too few people who actively buy and sell, or trade, that
security on a regular basis. A Fund holding an illiquid security may not be able
to sell the security at a fair price. Liquidity risk increases for Funds
investing in derivatives, foreign investments or restricted securities.

Management Risk

Management risk is the risk that the subadvisor of a Fund, despite using various
investment and risk analysis techniques, may not produce the desired investment
results.

Social Criteria Risk

This risk applies only to the Socially Responsible Fund. If a company stops
meeting the Fund's social criteria after the Fund invested in it, the Fund will
sell these investments even if this means the Fund loses money. Also, if the
Fund changes its social criteria and the companies the Fund has already invested
in no longer qualify, the Fund will sell these investments, even if this means
the Fund loses money. Social criteria screening will limit the availability
of

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<PAGE>

investment opportunities for the Fund more than for funds having no such
criteria.

Science & Technology Company Risk

Companies in the rapidly changing fields of science and technology often face
unusually high price volatility, both in terms of gains and losses. The
potential for wide variation in performance is based on the special risks common
to these stocks. For example, products or services that at first appear
promising may not prove commercially successful or may become obsolete quickly.
Earnings disappointments can result in sharp price declines. A portfolio focused
primarily on these stocks is, therefore, likely to be much more volatile.

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<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)

Class A Class B Class C
- --------------------------------------------------------------------------------
Maximum Sales Charge Imposed on Purchases (as a
percentage of offering price)
Equity Funds 5.75% None None
High Yield Bond Fund 4.75% None None
Municipal Money Market Fund None None None
Maximum Deferred Sales Charge (as a percentage
of original purchase price or redemption price,
whichever is lower)
High Yield Bond Fund 1%(1) 5%(2) 1%(3)
Municipal Money Market Fund None None None

Annual Fund Operating Expenses (expenses that
are deducted from fund assets)

Fund Class A Class B Class C
- --------------------------------------------------------------------------------
Mid Cap Value Fund
Management Fees 0.90% 0.90% 0.90%
Distribution (12b-1) Fees 0.35% 1.00% 1.00%
Other Expenses 0.60% 0.60% 0.60%
Total Annual Fund Operating Expenses 1.85% 2.50% 2.50%
Fee Waiver/Expense Reimbursement 0.07% 0.07% 0.07%
Net Expenses 1.78% 2.43% 2.43%
- --------------------------------------------------------------------------------
Stock Index Fund
Management Fees 0.27% 0.27% 0.27%
Distribution (12b-1) Fees 0.35% 1.00% 1.00%
Other Expenses 0.66% 0.66% 0.66%
Total Annual Fund Operating Expenses 1.28% 1.93% 1.93%
Fee Waiver/Expense Reimbursement 0.28% 0.28% 0.28%
Net Expenses 1.00% 1.65% 1.65%
- ------------------------------------------------------------------------------

- ------------------
(1) 1% first year after purchase for purchases of $1 million or more. 2% for
redemption within 2 years.
(2) 5% first year; 4% second year; 3%third year; 2% fourth year; 1%fifth year.
(3) 0% after first year.

-18-
<PAGE>

- --------------------------------------------------------------------------------
Small Cap Index Fund
Management Fees 0.28% 0.28% 0.28%
Distribution (12b-1) Fees 0.35% 1.00% 1.00%
Other Expenses 1.09% 1.09% 1.09%
Total Annual Fund Operating Expenses 1.72% 2.37% 2.37%
Fee Waiver/Expense Reimbursement 0.72% 0.72% 0.72%
Net Expenses 1.00% 1.65% 1.65%
- --------------------------------------------------------------------------------
Socially Responsible Fund
Management Fees 0.65% 0.65% 0.65%
Distribution (12b-1) Fees 0.35% 1.00% 1.00%
Other Expenses 0.78% 0.78% 0.78%
Total Annual Fund Operating Expenses 1.78% 2.43% 2.43%
Fee Waiver/Expense Reimbursement 0.28% 0.28% 0.28%
Net Expenses 1.50% 2.15% 2.15%
- --------------------------------------------------------------------------------
High Yield Bond Fund
Management Fees 0.83% 0.83% 0.83%
Distribution (12b-1) Fees 0.35% 1.00% 1.00%
Other Expenses 0.55% 0.55% 0.55%
Total Annual Fund Operating Expenses 1.73% 2.38% 2.38%
Fee Waiver/Expense Reimbursement 0.18% 0.18% 0.18%
Net Expenses 1.55% 2.20% 2.20%
- --------------------------------------------------------------------------------
Aggressive Growth Lifestyle Fund
Management Fees 0.10% 0.10% 0.10%
Distribution (12b-1) Fees 0% 0% None
Other Expenses -- -- --
Total Annual Fund Operating Expenses 0.10% 0.10% 0.10%
Fee Waiver/Expense Reimbursement -- -- --
Net Expenses 0.10% 0.10% 0.10%

The number below shows the total combined operating expenses as a percentage
of net assets, including indirect expenses of Underlying Funds after expense
reimbursements. This reflects total average weighted combined operating
expenses.
- --------------------------------------------------------------------------------
Moderate Growth Lifestyle Fund
Management Fees 0.10% 0.10% 0.10%
Distribution (12b-1) Fees 0 0 None
Other Expenses -- -- --
Total Annual Fund Operating Expenses 0.10% 0.10% 0.10%
Fee Waiver/Expense Reimbursement -- -- --
Net Expenses 0.10% 0.10% 0.10%

The number below shows the total combined operating expenses as a percentage
of net assets, including indirect expenses of Underlying Funds after expense
reimbursements. This reflects total average weighted combined operating
expenses.
- --------------------------------------------------------------------------------
Conservative Growth Lifestyle Fund
Management Fees 0.10% 0.10% 0.10%
Distribution (12b-1) Fees 0 0 None
Other Expenses -- -- --
Total Annual Fund Operating Expenses 0.10% 0.10% 0.10%
Fee Waiver/Expense Reimbursement -- -- --
Net Expenses 0.10% 0.10% 0.10%

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<PAGE>

Municipal Money Market Fund

Management Fees 0.35% 0.35% 0.35%
Distribution (12b-1) Fees 0% 0% 0%
Other Expenses 0.85% 0.85% 0.85%
Total Annual Fund Operating Expenses 1.20% 1.20% 1.20%
Fee Waiver/Expense Reimbursement 0.45% 0.45% 0.45%
Net Expenses 0.75% 0.75% 0.75%
- --------------------------------------------------------------------------------
Science & Technology Fund
Management Fees 0.90% 0.90% 0.90%
Distribution (12b-1) Fees 0.35% 1.00% 1.00%
Other Expenses 1.00% 1.00% 1.00%
Total Annual Fund Operating Expenses 2.25% 2.90% 2.90%
Fee Waiver/Expense Reimbursement 0.80% 0.80% 0.80%
Net Expenses 1.45% 2.10% 2.10%
- --------------------------------------------------------------------------------

The higher Distribution Fees borne by Class B and Class C shares may cause long-
term shareholders to pay more in sales charges than the maximum permitted front-
end sales charge on Class A shares.

By translating "Total Annual Fund Operating Expenses" into dollar amounts, these
examples help you compare the costs of investing in a particular Fund, or a
particular class of shares, with the costs of investing in other mutual funds.

* AGAM is contractually obligated to waive its advisory fees and/or reimburse
the Funds for certain expenses in the amounts indicated above through
October 31, 2000.

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<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:

Fund 1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------------
Mid Cap Value 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
- --------------------------------------------------------------------------------
Stock Index Fund
Class A Shares $671 $ 875 $1,096 $1,729
Class B Shares $668 $ 920 $1,097 $1,780
Class B No Redemption $168 $ 520 $ 897 $1,780
Class C Shares $268 $ 520 $ 897 $1,955
Class C No Redemption $168 $ 520 $ 897 $1,955
- --------------------------------------------------------------------------------
Small Cap Index Fund
Class A Shares $671 $ 875 $1,096 $1,729
Class B Shares $668 $ 920 $1,097 $1,780
Class B No Redemption $168 $ 520 $ 897 $1,780
Class C Shares $268 $ 520 $ 897 $1,955
Class C No Redemption $168 $ 520 $ 897 $1,955
- --------------------------------------------------------------------------------
Socially Responsible Fund
Class A Shares $719 $1,022 $1,346 $2,263
Class B Shares $718 $1,073 $1,354 $2,315
Class B No Redemption $218 $ 673 $1,154 $2,315
Class C Shares $318 $ 673 $1,154 $2,483
Class C No Redemption $218 $ 673 $1,154 $2,483
- --------------------------------------------------------------------------------
High Yield Bond Fund
Class A Shares $625 $ 941 $1,280 $2,233
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 $2,534
Class C No Redemption $223 $ 688 $1,180 $2,534
- --------------------------------------------------------------------------------
Aggressive Growth Lifestyle Fund
Class A Shares $585 $ 605 $ 628 $ 696
Class B Shares $510 $ 432 $ 256 $ 128
Class B No Redemption $ 10 $ 32 $ 56 $ 128
Class C Shares $110 $ 32 $ 56 $ 128
Class C No Redemption $ 10 $ 32 $ 56 $ 128
- --------------------------------------------------------------------------------

-21-
<PAGE>

- --------------------------------------------------------------------------------
Moderate Growth Lifestyle Fund
Class A Shares $585 $ 605 $628 $696
Class B Shares $510 $ 432 $256 $128
Class B No Redemption $ 10 $ 32 $ 56 $128
Class C Shares $110 $ 32 $ 56 $128
Class C No Redemption $ 10 $ 32 $ 56 $128
- --------------------------------------------------------------------------------
Conservative Growth Lifestyle Fund
Class A Shares $585 $ 605 $628 $696
Class B Shares $510 $ 432 $256 $128
Class B No Redemption $ 10 $ 32 $ 56 $128
Class C Shares $110 $ 32 $ 56 $128
Class C No Redemption $ 10 $ 32 $ 56 $128
- --------------------------------------------------------------------------------
Municipal Money Market Fund
Class A Shares $ 77 $ 240 $417 $930
Class B Shares $ 77 $ 240 $417 $930
Class B No Redemption $ 77 $ 240 $417 $930
Class C Shares $ 77 $ 240 $417 $930
Class C No Redemption $ 77 $ 240 $417 $930
- --------------------------------------------------------------------------------
Science & Technology Fund
Class A Shares $714 $1,007
Class B Shares $713 $1,058
Class B No Redemption $213 $ 658
Class C Shares $313 $ 658
Class C No Redemption $213 $ 658
- --------------------------------------------------------------------------------

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<PAGE>

More Information About Investment Strategies and Risks

This Prospectus does not attempt to disclose all of the different investment
techniques that the Funds might use, or all of the types of securities in which
the Funds might invest. As with any mutual fund, investors must rely on the
professional judgment and skill of the Funds' management. A subadvisor may
choose not to use some or all of the investment techniques available to a Fund,
and these choices may cause the Fund to lose money or not achieve its goal.

Each Fund has a unique investment objective (see the Fund Summaries) that it
tries to achieve through its investment strategies. The investment objectives
of the Funds may be changed by the Trustees without the approval of a Fund's
shareholders. Except for certain investment restrictions, the strategies a Fund
uses to achieve its investment objective also may be changed by the Trustees
without approval of the shareholders. Because each Fund is different, they have
different investment policies and risks, and will also have different returns
over time. This section provides additional information about the Funds, and
should be read in conjunction with the Fund Summaries.

- --------------------------------------------------------------------------------
More About Portfolio Investments
- --------------------------------------------------------------------------------

Each Fund's principal investment strategy and risks are described above. Funds
may invest in other investments and may use investment techniques as described
below. All Money Market Fund investments must comply with Rule 2a-7 of the 1940
Act, which allows the purchase of only high quality money market instruments.
The Lifestyle Funds invest in other Funds described in this Prospectus and thus
are not specifically mentioned below. Please refer to the SAI for more
information about investments.

Asset-Backed Securities

Asset-backed securities are bonds or notes that are normally supported by a
specific property. If the issuer fails to pay the interest or return the
principal when the bond matures, then the issuer must give the property to the
bondholders or noteholders. Examples of assets supporting asset-backed
securities include credit card receivables, retail installment loans, home
equity loans, auto loans, and manufactured housing loans. All of the Funds may
invest in asset-backed securities.

Depositary Receipts

ADRs are certificates issued by a United States bank or trust company and
represent the right to receive securities of a foreign issuer deposited in a
domestic bank or foreign branch of a United States bank. ADRs in which a Fund
may invest may be sponsored or unsponsored. There may be less information
available about foreign issuers of unsponsored ADRs. All of the Funds except for
the Municipal Money Market Fund may purchase ADRs.

EDRs and GDRs are receipts evidencing an arrangement with a non-U.S. bank. We
consider ADRs, EDRs and GDRs to be foreign securities. The High Yield Bond Fund,
Mid Cap Value Fund, Small Cap Index Fund, Socially Responsible Fund, and the
Stock Index Fund may invest in EDRs and GDRs.

Equity Securities

Equity securities represent an ownership position in a company. The prices of
equity securities fluctuate based on changes in the financial condition of the
issuing company and on market and economic conditions. If you own an equity
security, you own a part of the company that issued it. Companies sell equity
securities to get the money they need to grow.

Stocks are one type of equity security. Each share of stock represents a part of
the ownership of the company. The holder of stock participates in the growth of
the company through the stock price and receipt of dividends. All the Funds may
invest in equities except for the Municipal Money Market Fund, though equities
may not be a primary strategy for each Fund.

-23-
<PAGE>

Generally, there are three types of stocks:

1. Common stock - Common stock usually has voting rights, which allow an
investor to vote for the company Board of Directors. Common stock also
--------
gives each owner a share in a company's profits through dividend payments
--------
or the capital appreciation of the security.

2. Preferred stock - Each share of preferred stock allows the holder to get a
fixed dividend before the common stock shareholders receive any dividends
on their shares.

3. Convertible preferred stock - A stock with a fixed dividend which the
holder may exchange for a certain amount of common stock.

Stocks are not the only type of equity security. Other equity securities include
but are not limited to convertible securities, depository receipts, warrants,
rights and partially paid shares, investment company securities, real estate
securities, convertible bonds and foreign equity securities, such as ADRs, GDRs
and EDRs.

Fixed-income Securities

Fixed-income securities include a broad array of short-, medium-and long-term
obligations, including notes and bonds. Fixed-income securities may have fixed,
variable, or floating rates of interest, including rates of interest that vary
inversely at a multiple of a designated or floating rate, or that vary according
to changes in relative values of currencies. Fixed-income securities generally
involve an obligation of the issuer to pay interest on either a current basis or
at the maturity of the security and to repay the principal amount of the
security at maturity.

Bonds are one type of fixed-income security and are sold by governments on the
local, state, and federal levels, and by companies. There are many different
kinds of bonds. For example, each bond issue has specific terms. U.S. Government
bonds are guaranteed to pay interest and principal by the federal government.
Revenue bonds are usually only paid from the revenue of the issuer. An example
of that would be an airport revenue bond. Debentures are a very common type of
corporate bond (a bond sold by a company). Payment of interest and return of
principal is subject to the company's ability to pay. Convertible bonds are
corporate bonds that can be exchanged for stock.

The types of bonds that most Funds purchase, for example, includes U.S.
Government bonds and investment grade corporate bonds. AGAM and the Subadvisors
will not necessarily dispose of a bond if its ratings are downgraded to below
investment grade. All of the Funds may invest in investment grade bonds. Of
those that invest in bonds, only the High Yield Bond Fund and the Mid Cap Value
Fund may also invest in below-investment grade bonds.

Investing in a bond is like making a loan for a fixed period of time at a fixed
interest rate.During the fixed period, the bond pays interest on a regular
basis. At the end of the fixed period, the bond matures and the investor usually
gets back the principal amount of the bond. Fixed periods to maturity are
categorized as short-term (generally less than 12 months), intermediate (one to
10 years), and long-term (10 years or more). Commercial paper is a specific type
of corporate or short-term note. In fact, it's very short-term, being paid in
less than 270 days, though most commercial paper matures in 50 days or less.

Bonds are not the only type of fixed-income security. Other fixed-income
securities include, for example, U.S. and foreign corporate fixed-income
securities, including convertible securities (bonds, debentures, notes and other
similar instruments) and corporate commercial paper; mortgage-related and other
asset-backed securities; inflation-indexed bonds issued by both governments and
corporations; structured notes, including hybrid or "indexed" securities,
preferred or preference stock, catastrophe bonds, and loan participations; bank
certificates of deposit, fixed time deposits and bankers' acceptances;
repurchase agreements and reverse repurchase agreements; fixed-income securities
issued by states or local governments and their agencies, authorities and other
instrumentalities; obligations of foreign governments or their subdivisions,
agencies and instrumentalities; and obligations of international

-24-
<PAGE>

agencies or supranational entities. Fixed-income securities may be acquired with
warrants attached.

Foreign Currency

Funds buy foreign currencies when they believe the value of the currency will
increase. If it does increase, they sell the currency for a profit. If it
decreases they will experience a loss. All the Funds except for the Municipal
Money Market Fund may invest in foreign currency.

Foreign Securities

Securities of foreign issuers may be denominated in foreign currencies.
Generally, all of the Funds may invest in foreign securities except for the
Municipal Money Market Fund.

Securities of foreign issuers include obligations of foreign branches of U.S.
banks and of foreign banks, common and preferred stocks, fixed-income securities
issued by foreign governments, corporations and supranational organizations, and
ADRs, EDRs and GDRs. See "Depositary Receipts".

Futures and Options

Futures and options are considered derivative securities, since the value of the
future or option is derived in part from the value and characteristics of
another security. A "future" is a contract which involves the sale of a security
for future delivery. An "option" gives the buyer the opportunity to buy or sell
a security at a set price on or before a date specified in the contract. A call
option buyer thinks the stock price may go up in the future, while a put option
buyer thinks the stock price may go down. All of the Funds except for the
Municipal Money Market Fund may invest in derivatives.

The Funds use stock and bond futures to invest cash and cash equivalents to:

- - Write (sell) exchange traded covered put and call options on securities and
stock indices.

- - Purchase exchange traded put and call options on securities and stock
indices.

- - Purchase and sell exchange traded financial futures contracts.

- - Write (sell) covered call options and purchase exchange traded put and call
options on financial futures contracts.

- - Write (sell) covered call options and purchase non- exchange traded call
and put options on financial futures contracts.

Illiquid Securities

An illiquid security is one that may not be frequently traded or cannot be
disposed of promptly within seven days and in the usual course of business
without taking a materially reduced price. Illiquid securities include, but are
not limited to, time deposits and repurchase agreements not maturing within
seven days and restricted securities. Non-money market funds may invest up to
15% in illiquid securities, while money market funds are limited to 10%. This
restriction applies at all times to all assets.

A restricted security is one that has not been registered with the SEC and,
therefore, cannot be sold in the public market. Securities eligible for sale
under Rule 144A and commercial paper offered pursuant to Section 4(2) of the
Securities Act of 1933, as amended, are not deemed by AGAM or the Fund's
Subadvisor to be illiquid solely by reason of being restricted. Instead, AGAM or
the Subadvisor will determine whether such securities are liquid based on
trading markets and pursuant to guidelines adopted by the Series Company's Board
of Trustees. If AGAM or the Subadvisor concludes that a security is not liquid,
that investment will be included within the Fund's limitation on illiquid
securities.

Investment Companies

All of the Funds may invest in the securities of other open-end or closed-end
investment companies subject to the limitations imposed by the 1940 Act. A Fund
will indirectly bear

-25-
<PAGE>

its proportionate share of any management fees and other expenses paid by an
investment company in which it invests.

Investment Funds

Some countries have laws and regulations that currently preclude direct foreign
investment in the securities of their companies. However, indirect foreign
investment in the securities of companies listed and traded on the stock
exchanges in these countries is permitted through investment funds which have
been specifically authorized. Mid Cap Value Fund, Small Cap Index Fund and the
Stock Index Fund may invest in investment funds.

Loan Participations

A loan participation is an investment in a loan made to a U.S. company that is
secured by the company's assets. The assets must be, at all times, worth enough
money to cover the balance due on the loan. Major national and regional banks
make loans to companies and then sell the loans to investors. These banks don't
guarantee the companies will pay the principal and interest due on the loans.
All of the Funds except the Mid Cap Value Fund may invest in loan
participations.

Money Market Securities

A money market security is high quality when it is rated in one of the two
highest credit categories by Moody's or S&P or another nationally recognized
rating service or if unrated, deemed high quality by AGAM or a Subadvisor. All
the Funds may invest in money market securities, though it is not a primary
strategy for all Funds.

Examples of high quality money market securities include:

- - Cash and cash equivalents

- - Securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities

- - Certificates of deposit and other obligations of domestic banks having
total assets in excess of $1 billion

- - Commercial paper sold by corporations and finance companies

- - Corporate debt obligations with remaining maturities of 13 months or less

- - Repurchase agreements, money market securities of foreign issuers if
payable in U.S. dollars, asset-backed securities, loan participations, and
adjustable rate securities.

Mortgage-Related Securities

Mortgage-related securities include, but are not limited to, mortgage pass-
through securities, collateralized mortgage obligations and commercial mortgage-
backed securities. All of the Funds except for Small Cap Index Fund, Socially
Responsible Fund, and the Stock Index Fund may invest in mortgage-related
securities. Mortgage pass-through securities are securities representing
interests in "pools" of mortgage loans secured by residential or commercial
real property. Payments of interest and principal on these securities are
generally made monthly, in effect "passing through" monthly payments made by the
individual borrowers on the mortgage loans which underlie the securities.
Mortgage-related securities are subject to interest rate risk and prepayment
risk.

Payment of principal and interest on some mortgage pass-through securities may
be guaranteed by the full faith and credit of the U.S. Government (i.e.,
securities guaranteed by GNMA); or guaranteed by agencies or instrumentalities
of the U.S. Government (i.e., securities guaranteed by FNMA or the Federal Home
Loan Mortgage Corporation ("FHLMC"), which are supported only by the
discretionary authority of the U.S. Government to purchase the agency's
obligations). Mortgage-related securities created by non-governmental issuers
(such as commercial banks, private mortgage insurance companies and other
secondary market issuers) may be supported by various forms of insurance or
guarantees, including individual loan, title, pool and hazard insurance and
letters of credit, which may be issued by governmental entities, private
insurers or the mortgage poolers.

Collateralized mortgage obligations ("CMOs") are hybrid mortgage-related
instruments. CMOs may be collateralized by whole mortgage loans or by portfolios
of mortgage pass-through securities guaranteed by

-26-
<PAGE>

GNMA, FHLMC, or FNMA. CMOs are structured into multiple classes, with each class
bearing a different stated maturity, coupon, and prepayment preference. CMOs
that are issued or guaranteed by the U.S. Government or by any of its agencies
or instrumentalities will be considered U.S. Government securities by the Funds.

Commercial mortgage-backed securities include securities that reflect an
interest in, and are secured by, mortgage loans on commercial real property. The
market for commercial mortgage-backed securities is relatively small compared to
the market for residential single-family mortgage-backed securities. Many of the
risks of investing in commercial mortgage-backed securities reflect the risks of
investing in the real estate securing the underlying mortgage loans. These risks
reflect the effects of local and other economic conditions on real estate
markets, the ability of tenants to make loan payments, and the ability of a
property to attract and retain tenants. Commercial mortgage-backed securities
may be less liquid and exhibit greater price volatility than other types of
mortgage-related or asset-backed securities.

Real Estate Securities

Real estate securities are securities issued by companies that invest in real
estate or interests therein. All of the Funds except for the High Yield Bond
Fund may invest in real estate securities and real estate investment trusts
("REITs"). REITs are generally publicly traded on the national stock exchanges
and in the over-the-counter market and have varying degrees of liquidity.

Repurchase Agreements

A repurchase agreement requires the seller of the security to buy it back at a
set price at a certain time. If a Fund enters into a repurchase agreement, it is
really making a short-term loan (usually for one day to one week). The risk in a
repurchase agreement is the failure of the seller to be able to buy the security
back. If the value of the security declines, the Fund may have to sell at a
loss. A repurchase agreement of more than 7 days duration is illiquid. A Fund
may enter into repurchase agreements only with well-established securities
dealers or banks that are members of the Federal Reserve System. All the Funds
in this Prospectus may invest in repurchase agreements.

Reverse Repurchase Agreements and Dollar Rolls

A reverse repurchase agreement involves the sale of a security by a Fund and its
agreement to repurchase the instrument at a specified time and price. Under a
reverse repurchase agreement, the Fund continues to receive any principal and
interest payments on the underlying security during the term of the agreement.
If a Fund's positions in reverse repurchase agreements or similar transactions
are not covered by liquid assets in a segregated account, such transactions
would be subject to the Funds' limitations on borrowings. The Funds will not
borrow money, except as provided in each Fund's investment restrictions. Reverse
repurchase agreements may be entered into by all Funds.

The High Yield Bond Fund and the Mid Cap Value Fund may enter into dollar rolls.
In a dollar roll transaction, a Fund sells mortgage-backed or other securities
for delivery in the current month and simultaneously contracts to purchase
substantially similar securities on a specified future date.

Structured Securities

The value of the principal of and/or interest on such securities is determined
by reference to changes in the value of specific currencies, interest rates,
commodities, indices or other financial indicators (the "Reference") or the
relative change in two or more References. The interest rate or the principal
amount payable upon maturity or redemption may be increased or decreased
depending upon changes in the applicable Reference. The terms of the structured
securities may provide that in certain circumstances no principal is due at
maturity and, therefore, result in the loss of a Fund's investment. The High
Yield Bond Fund may enter into structured securities.

Swap Agreements

Swap agreements are contracts between parties in which one party agrees to make
payments to the other party based on the change in market value of a

-27-
<PAGE>

specified index or asset. In return, the other party agrees to make payments to
the first party based on the return of a different specified index or asset. The
Mid Cap Value Fund may enter into swap agreements.

U.S. Government Securities

All the Funds may invest in U.S. Government securities. U.S. Government
securities are obligations of, or guaranteed by, the U.S. Government, its
agencies or instrumentalities. The U.S. Government does not guarantee the net
asset value of the Funds' shares. Some U.S. Government securities, such as
Treasury bills, notes and bonds, and securities guaranteed by the Government
National Mortgage Association ("GNMA"), are supported by the full faith and
credit of the United States; others, such as those of the Federal Home Loan
Banks, are supported by the right of the issuer to borrow from the U.S.
Treasury; others, such as those of the Federal National Mortgage Association
("FNMA"), are supported by the discretionary authority of the U.S. Government to
purchase the agency's obligations; and still others, such as those of the
Student Loan Marketing Association, the Tennessee Valley Authority and the Small
Business Authority are supported only by the credit of the instrumentality. U.S.
Government securities include securities that have no coupons, or have been
stripped of their unmatured interest coupons, individual interest coupons from
such securities that trade separately, and evidences of receipt of such
securities. Such securities may pay no cash income, and are purchased at a deep
discount from their value at maturity. Because interest on zero coupon
securities is not distributed on a current basis but is, in effect, compounded,
zero coupon securities tend to be subject to greater market risk than interest-
paying securities of similar maturities. Custodial receipts issued in connection
with so-called trademark zero coupon securities, such as CATs and TIGRs, are not
issued by the U.S. Treasury, and are, therefore, not U.S. Government securities,
although the underlying bond represented by such receipt is a debt obligation of
the U.S. Treasury. Other zero coupon Treasury securities (STRIPs and CUBEs) are
direct obligations of the U.S. Government.

Variable Amount Demand Master Notes

Variable amount master demand notes are unsecured obligations that are
redeemable upon demand and are typically unrated. These instruments are issued
pursuant to written agreements between their issuers and holders. The agreements
permit the holders to increase (subject to an agreed maximum) and the holders
and issuers to decrease the principal amount of the notes, and specify that the
rate of interest payable on the principal fluctuates according to an agreed
formula. The High Yield Bond Fund and the Mid Cap Value Fund may invest in the
variable amount demand master notes.

Variable Rate Demand Notes

Variable rate demand notes ("VRDNs") are either taxable or tax-exempt
obligations containing a floating or variable interest rate adjustment formula,
together with an unconditional right to demand payment of the unpaid principal
balance plus accrued interest upon a short notice period, generally not to
exceed seven days. The Money Market Fund and the Municipal Funds may also may
invest in participation VRDNs, which provide a Fund with an undivided interest
in underlying VRDNs held by major investment banking institutions. All the Funds
may invest in VRDNs.

Warrants and Rights

Warrants and rights are instruments which entitle the holder to buy underlying
equity securities at a specific price for a specific period of time. A warrant
tends to be more volatile than its underlying securities and ceases to have
value if it is not exercised prior to its expiration date. Changes in the value
of a warrant do not necessarily correspond to changes in the value of its
underlying securities. All of the Funds except for the Municipal Money Market
Fund may invest in warrants and rights.

When-Issued Securities

When-issued securities are those investments that have been announced by the
issuer and will soon be on the market. The Funds negotiate the price with a
broker before it goes on the market. If the security ends up selling on the
market at a lower price than negotiated, the Funds may have a loss. If it sells
at a higher price, the Funds may

-28-
<PAGE>

have a profit. All of the Funds except the Mid Cap Value Fund may invest in
when-issued securities.

- --------------------------------------------------------------------------------
More about Index Funds and Tracking an Index
- --------------------------------------------------------------------------------

The factors that cause a Fund to perform differently from the index it tries to
track are called tracking differences. There is no assurance that an Index Fund
can track its index.

The coefficient of correlation (r) is an index number which shows how closely
two variables are related. If r = 0 there is no tendency for one variable to
change with the other. A value of +1 means that one variable will vary exactly
with the other. Index funds try to keep their coefficient of correlation as
close to 1 as possible. As a practical matter, any coefficient above 0.95, when
measured against the comparison index, shows good tracking.

Tracking accuracy is reviewed daily by the Subadvisor for each of the Index
Funds. If an Index Fund does not accurately track an index, the Subadvisor will
rebalance the Fund's portfolio by selecting securities which will provide a more
representative sampling of the securities in the index as a whole or the sector
diversification within the index, as appropriate.

The index may remove one stock and substitute another, requiring the Fund to do
the same. When a stock is sold and the new stock purchased, the Fund incurs
transaction costs.The index incurs no transaction costs. Therefore, any index
fund portfolio manager cannot match exactly the performance of an index.

An index fund may not buy every single stock in its index or in the same
proportions as the index. The Subadvisor may rely on a statistical selection
technique to figure out, of the stocks tracked by their index, how many and
which ones to buy. Stocks are bought and sold when they are added to or dropped
from the index. This helps to keep brokerage fees and other transaction costs
lower than other funds, generally.

-29-
<PAGE>

Management of the Funds

Investment Adviser

Under the federal securities laws, Massachusetts law, and the Trust's Agreement
and Declaration of Trust and By-Laws, the business and affairs of the Trust are
managed under the direction of the Trustees.

American General Asset Management Corp. ("AGAM") is the investment adviser for
the Trust. AGAM was formed in 1996 to advise, acquire and distribute mutual
funds through broker-dealers, banks and other intermediaries. AGAM's address is
286 Congress Street, Boston, Massachusetts 02210.

According to its Advisory Agreement With the Trust (the "Advisory Agreement"),
AGAM:

. Oversees the administration of all aspects of the business and affairs of
the North American Funds

. Selects, contracts with and compensates subadvisors to manage the assets of
the North American Funds

. Makes recommendations to the Trustees regarding the hiring, termination and
replacement of subadvisors

. Reimburses the North American Funds if the total of certain expenses
allocated to any Fund exceeds certain limitation

. Monitors the subadvisors for compliance with the investment objectives and
related policies of each Fund

. Review the performance of the subadvisors

. Periodically reports to the Trustees

The following table shows the management fees each Fund will pay annually as a
percentage of the Fund's average daily net asset value.

-30-
<PAGE>

Advisory fee
Fund Name (as a % of average daily net assets)
- --------------------------------------------------------------------------------
Conservative Growth Lifestyle Fund 0.10%

Aggressive Growth Lifestyle Fund 0.10%

High Yield Bond Fund 0.70% on the first $200 million
0.60% on the next $300 million
0.55% on assets over $500 million

Mid Cap Value Fund 0.75% on the first $100 million
0.725% on the next $150 million
0.70% on the next $250 million
0.675% on the next $250 million
0.65% on the assets over $750 million

Moderate Growth Lifestyle Fund 0.10%

Municipal Money Market Fund 0.50% on the first $200 million
0.45% on the next $300 million
0.40% on assets over $500 million

Small Cap Index Fund 0.28% on the first $500 million
0.27% on assets over $500 million

Socially Responsible Fund 0.25%

Stock Index Fund 0.27% on the first $500 million
0.26% on assets over $500 million

Science and Technology Fund 0.90%

-31-
<PAGE>

Investment Subadvisors

Under an order granted to the Funds by the Securities and Exchange Commission,
AGAM is permitted to appoint a subadvisor, to create a subadvisory agreement,
and to terminate or amend a subadvisory agreement, in each case without
shareholder approval. This "Manager of Managers" structure permits the Funds to
change subadvisors or the fees paid to subadvisors without the expense and
delays associated with obtaining shareholder approval. AGAM has ultimate
responsibility under the Manager of Managers structure to oversee the
subadvisors, including making recommendations to the Trust regarding the hiring,
termination and replacement of subadvisors.

The Subadvisors are:

AGIM
2929 Allen Parkway, Houston, Texas 77015

AGIM is the Subadvisor for the Stock Index Fund, the Small Cap Index Fund, the
Socially Responsible Fund, the High Yield Bond Fund, the Aggressive Growth
Lifestyle fund, the Moderate Growth Lifestyle Fund, the Conservative Growth
Lifestyle Fund and the Municipal Money Market Fund. AGIM was formed in 1998 as a
successor to the investment management division of American General Corporation,
and is an indirect wholly-owned subsidiary of American General Corporation. AGIM
also provides investment management and advisory services to pension and profit
sharing plans, financial institutions and other investors. Investment decisions
for several Funds are made by teams as noted below. Each team meets regularly to
review portfolio holdings and discuss purchase and sale activity.

Magali E. Azema-Barac is responsible for AGIM's equity group. She heads the team
making investment decisions for each of the Index Funds, as well as for the
Socially Responsible Fund. Ms. Azema-Barac joined American General in September,
1999. Prior to that, she worked on the equity desk of US West Investment
Management Company in Englewood, Colorado, where she incepted and managed an
enhanced equity portfolio.

Robert N. Kase, CF, has been Investment Officer of AGAM since September 1998,
and Senior Portfolio Manager of AGIM since September 1998. Previously, Mr. Kase
was Senior Portfolio Manager with CL Capital Management, Inc. from September
1992 until July 1998.

Steven Guterman, Executive Vice President, joined the Subadvisor in June 1998.
Previously, Mr. Guterman was with Salomon Brothers, Inc. from 1983 to May 1998,
where he served as Managing Director from 1996 to May 1998 and with Salomon
Brothers Asset Management, Inc., where he was a Senior Portfolio Manager and
head of the U.S. Fixed Income Portfolio Group from 1990 to May 1998.

Investment decisions for the High Yield Bond Fund are made by a team, headed by
Gordon Massie. Mr. Massie, Senior Vice President, joined the Subadvisor in April
1998. Previously, Mr. Massie was Director of High Yield Research at American
General Corporation from August 1985 to April 1998.

Marybeth Whyte serves as the Portfolio Manager for the Municipal Money market
Fund. She was formerly the portfolio manager of the Salomon Brothers New York
Municipal Money Market Fund, the Salomon Brothers National Intermediate
Municipal Fund and the North American National Municipal Bond Fund. Ms. Whyte,
Senior Vice President, joined the Subadvisor in September 1998. Previously, Ms.
Whyte was Director of the Municipal Bond Group at Salomon Brothers Asset
Management from July 1994 to September 1998 and was the portfolio manager of the
Salomon Brothers New York Municipal Money Market Fund.

Neuberger Berman Management, Inc. ("NB Management")
605 Third Avenue, Second Floor, New York, New York 10158-0180

NB Management is the Subadvisor for the Mid Cap Value Fund. NB Management and
its predecessor firms have

-32-
<PAGE>

specialized in the management of no-load mutual funds
since 1950. As of December 31, 1999, NB Management and its affiliates managed
approximately $54 billion in aggregate net assets.

Robert I. Gendelman and S. Basu Mullick serve as co-managers of the Mid Cap
Value Fund. Messrs. Gendelman and Mullick are Vice Presidents of the Subadvisor
and Mr. Gendelman is a managing director of Neuberger Berman, LLC. Messrs.
Gendelman and Mullick have been associated with the Subadvisor since 1994 and
1998, respectively.

T. Rowe Price Associates, Inc.,
("T. Rowe Price")

T. Rowe Price is the Subadvisor for the Science and Technology Fund. Founded in
1937 by Thomas Rowe Price, Jr., the Baltimore-based investment management firm
is one of the nation's leading providers of no-load mutual funds for individual
investors and corporate retirement programs. As of September 30, 1999, T. Rowe
Price and its affiliates served as investment Advisor to more than 75 stock,
bond, and money market funds and managed about $157.4 billion.

The Fund is managed by an investment advisory committee, chaired by Charles A.
Morris. Mr. Morris has day-to-day responsibility for managing the portfolio and
works with the committee to develop and execute the Fund's investment program.
Mr. Morris has been chairman of the AGSPC 1 Science & Technology Fund committee
since 1994, and has chaired the AGSPC 2 Science & Technology Fund committee
since its inception.

-33-
<PAGE>

Section III:

Investing in the North American Funds
Classes of Shares

There are three classes of shares of North American Fund offered by this
prospectus: Class A shares, Class B shares and Class C shares.

The initial investment minimum for all classes of shares per fund is $1,000. For
retirement plans and other automatic investment programs, the initial purchase
minimum is $50. You must maintain a minimum account balance of $500, or $50 for
retirement plans and other automatic investing programs. Purchases and
redemptions will be made at the share price calculated by North American Funds
after the request is received in good order. Confirmations of all transactions
will be mailed to you promptly, and a copy will be sent to your broker of
record. North American Funds may refuse any request to purchase shares.

Buying Fund Redeeming Fund
Shares Shares

- --------------------------------------------------------------------------------
By Mail Mail a check and account application Send a written request
to: to:
North American Funds North American Funds
P. O. Box 8505 P. O. Box 8505
Boston, MA 02266-8505 Boston, MA 02266-8508

To add to an existing account, mail a
check
with your account number:
North American Funds
P. O. Box 8505
Boston, MA 02266-8505

Overnight Mailing Address:
North American Funds
c/o Boston Financial
attn: Leadership Services
66 Brooks Dr.
Braintree, MA 02184

- --------------------------------------------------------------------------------
By Wire Transfer For wire instructions, Yes, with a minimum of
contact Customer Service at $1,000. For wire
1-800-872-8037 instructions, contact
Customer Service at
1-800-872-8037
- --------------------------------------------------------------------------------
By Phone No Yes, simply call
1-800-872-8037 by 4:00
p.m. to receive that
day's closing price
- --------------------------------------------------------------------------------

-34-
<PAGE>

- --------------------------------------------------------------------------------
Through Broker Dealers Yes, if a dealer Yes, if a dealer
agreement is in place agreement is in place
- --------------------------------------------------------------------------------

Class A Shares Class B Shares Class C Shares
- --------------------------------------------------------------------------------
Sales Charges Purchases of Shares are Shares are
less than $1 sold without a sold without a
million are sold front end front end
with a front end sales charge. sales charge.
sales charge For shares For shares
(see table on redeemed redeemed
next page). within six within one
years there is year there is
Purchases over $1 a sales charge a 1% sales
million are sold at redemption charge at
without (see table on redemption.
a front end next page).
sales charge. Available for
For shares Available for purchases
redeemed within purchases under $1
one year there is of $250,000 or million.
a 1% back end less.
sales
charge at
redemption.
- --------------------------------------------------------------------------------
Programs That Rights of For B and C
Reduce Sales Charges Accumulation - Shares, the
you will pay the back end sales
sales charge charge is
applicable to equal to the
your total lesser of the
account balance net asset
in all classes value at
of shares. redemption, or
the original
purchase price.
Statement of
intention -
agree to invest
a certain amount
over 13 months
and you will pay
the sales charge
based on your
goal.

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

For an account opened after 5-1-95, in any class of
shares, there will be no deferred sales charge
applied, if a systematic withdrawal plan is
established for up to 12% of the account value to
be withdrawn annually.

For qualified group retirement plans, please see
the Statement of Additional information (SAI) for a
more detailed discussion.

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

-35-
<PAGE>

Sales Charge Tables

Class A Shares Sales Charge Table

There is no front end sales charge for Class A shares of the Municipal Money
Market Fund. If A shares of this Fund are exchanged for Class A shares of
another Fund, the regular sales charge for Class A shares will be charged.

<TABLE>
<CAPTION>
Amount of Sales Charge Sales Charge Concession to
Purchase Payment as a as a Broker Dealer as
Percentage of Percentage a Percentage of
the Offering Price of the Net Offering Price
Amount
Invested

- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Less than $50,000 5.75% 6.10% 5.00%
Equity Funds 4.75% 4.99% 4.00%
Other Funds
- -------------------------------------------------------------------------------------------
$50,000 but less than $100,000 4.75% 4.99% 4.00%
- -------------------------------------------------------------------------------------------
$100,000 but less than $250,000 4.00% 4.17% 3.25%
- -------------------------------------------------------------------------------------------
$250,000 but less than $500,000 3.00% 3.09% 2.50%
- -------------------------------------------------------------------------------------------
$500,000 but less than $500,000 2.25% 2.30% 1.75%
- -------------------------------------------------------------------------------------------
$1 million or more None* None* See Below**
- -------------------------------------------------------------------------------------------
</TABLE>

* A CDSC (back end sales charge) may apply.

** For purchases of Class A shares of $1 million or more the Distributor will
pay a commission to dealers as follows: 1.00% on sales up to $5 million
(0.50% for sales of the Municipal Money Market Fund), plus 0.50% of the
amount in excess of $5 million; provided, however, that the Distributor may
pay a commission on sales in excess of $5 million of up to 1.00% to certain
dealers which, at the Distributor's invitation, enter into an agreement
with the Distributor in which the dealer agrees to return any commission
paid to it on the sale (or a pro rata portion thereof) if the shareholder
redeems his shares within a period of time after purchase as specified by
the Distributor. Purchases of $1 million or more for each shareholder
account will be aggregated over a 12 month period (commencing from the date
of the first such purchase) for purposes of determining the level of
commission to be paid during that period with respect to such account.

-36-
<PAGE>

Class B Shares Sales Charge Table*
- ---------------------------------

Year(s) Since Purchase Deferred Sales Charge
as Percentage of
Amount Redeemed
- -------------------------------------------------------------------------------
Up to 2 years 5%
- -------------------------------------------------------------------------------
2 years or more but less than 3 years 4%
- -------------------------------------------------------------------------------
3 years or more but less than 4 years 3%
- -------------------------------------------------------------------------------
4 years or more but less than 5 years 2%
- -------------------------------------------------------------------------------
5 years or more but less than 6 years 1%
- -------------------------------------------------------------------------------
6 or more years 0%
- -------------------------------------------------------------------------------

Class B shares purchased on or after October 1, 1997 will automatically convert
into Class A shares eight years after the calendar months in which a
shareholder's order to purchase the shares was accepted.

Class C Shares*

Class C shares are offered for sale at net asset value and are offered for
purchases of less than $1 million. Class C shares are sold without a front end
sales charge. Class C shares are subject to a deferred sales charge of 1% of the
dollar amount subject thereto during the first year after purchase.

Class C shares will be redeemed or exchanged in order of the date purchased,
with the shares purchased earlier being redeemed or exchanged first, unless a
shareholder specifically requests that specific shares be redeemed or exchanged.

Redemption in Kind

The Funds reserve the right to redeem proceeds in whole or in part by a
distribution in kind of marketable securities held by the Fund.

Payment Following Redemption

Each Fund will normally send the proceeds from a redemption (less any applicable
deferred sales charge) on the next business day, but may delay payment for up to
seven days.

Payment may be delayed if the shares to be redeemed were purchased by a check
that has not cleared. Each Fund may suspend the right of redemption and may
postpone payment for more than seven days when the New York Stock Exchange is
closed for other than weekends or holidays, or if permitted by the rules of, or
action by, the SEC.

-37-
<PAGE>

*Any shares in the redeeming shareholder's account that can be redeemed without
charge will be redeemed prior to those subject to a charge. Only time of
ownership spent in Funds other than the Municipal Money Market Fund counts
towards determining the applicable deferred sales charge.

-38-
<PAGE>

Pricing of Fund Shares

The public offering price of the Class A shares of each Fund is the net asset
value per share (next determined following receipt of an order) plus, in the
case of all Funds except the Municipal Money Market Fund, a front end sales
charge, if applicable. The share price for Class B shares and Class C shares is
the net asset value per share (next determined following receipt of an order).

The net asset value of the shares of each class of each Fund is calculated
separately and, except as described below, is determined once daily as of the
close of regularly scheduled trading on the New York Stock Exchange. Net asset
value per share of each class of each Fund is calculated by dividing the value
of the portion of the Fund's securities and other assets attributable to that
class, less the liabilities attributable to that class, by the number of shares
of that class outstanding. No determination is required on (i) days on which
changes in the value of such Fund's securities holdings will not materially
affect the current net asset value of the shares of the Fund and (ii) days when
the New York Stock Exchange is closed (for example, national holidays).
Generally, trading in non-U.S. securities, as well as U.S. Government securities
and money market instruments, is substantially completed each day at various
times prior to the close of regularly scheduled trading on the New York Stock
Exchange. The values of such securities used in computing the net asset value of
the shares of a class of a Fund are generally determined as of such times.
Occasionally, events which affect the values of such securities may occur
between the times at which they are generally determined and the close of
regularly scheduled trading on the Exchange and would therefore not be reflected
in the computation of a class's net asset value. If events materially affecting
the value of such securities occur during such period, then these securities
will be valued at their fair value as determined in good faith by the
subadvisors under procedures established and regularly reviewed by the Trustees.

Shares of the Fund are available at the net asset value to investors purchasing
shares of the Funds with redemption proceeds from other mutual fund complexes on
which the investor has paid for front end sales charge or was subject to a
deferred sales charge, whether or not paid, if such redemption occurred more
than 60 days prior to such purchase. The Distributor will require satisfactory
evidence of your qualification of this waiver. Please call for more information.
The redemption of the shares from the other mutual fund is, for federal income
tax purposes, a sale upon which a gain or loss may be realized.

All short-term debt instruments with a remaining maturity of 60 days or less
held by the other Funds are valued on an amortized cost basis.

Unless you request cash payment, all dividends and distributions will be
reinvested. All Funds declare and pay capital gains annually.

-39-
<PAGE>

Dividends and Distributions from North American Funds

<TABLE>
<CAPTION>
These Funds declare and pay These Funds declare and pay These Funds declare income
income dividends daily: income dividends monthly: dividends daily and pay
quarterly:
<S> <C> <C>
Municipal Money Market High Yield Bond Conservative Growth Lifestyle
Aggressive Growth Lifestyle
Mid Cap Value
Moderate Growth Lifestyle
Science & Technology
Small Cap Index
Socially Responsible
Stock Index
</TABLE>

-40-
<PAGE>

Taxes

It is expected that each Fund of the Trust will qualify as a "regulated
investment company" under the Code. If it so qualifies, a Fund will not be
subject to United States federal income taxes on its net investment income and
net capital gain, if any, that it distributes to its shareholders in each
taxable year, provided that it distributed to its shareholders (i) at least 90%
of its net investment income for such taxable year, and (ii) with respect to the
Municipal Money Market Fund at least 90% of its net tax-exempt interest income
for such taxable year. If in any year a Fund fails to qualify as a regulated
investment company, such Fund would incur regular corporate federal income tax
on its taxable income for that year and be subject to certain additional
distribution requirements upon re-qualification. Each Fund will be subject to a
4% nondeductible excise tax on its taxable income to the extent it does not meet
certain distribution requirements by the end of each calendar year. Each Fund
intends to make sufficient distributions to avoid application of the corporate
income and excise taxes.

Funds investing in foreign securities or currencies may be required to pay
withholding or other taxes to foreign governments on dividends and interest.
The investment yield of the Funds investing in foreign securities or currencies
will be reduced by these foreign taxes. Shareholders will bear the cost of any
foreign taxes,but may not be able to claim a foreign tax credit or deduction for
these foreign taxes. If a Fund is eligible for and makes an election to allow
the shareholders of that Fund to claim a foreign tax credit or deduction for
these taxes for any taxable year, the shareholders will be notified. The ability
of the shareholders to utilize such a foreign tax credit is subject to a holding
period requirement. In addition, Funds investing in securities of passive
foreign investment companies may be subject to U.S. federal income taxes (and
interest on such taxes) as a result of such investments. The investment yield
of the Funds making such investments will be reduced by these taxes and
interest. Shareholders will bear the cost of these taxes and interest, but will
not be able to claim a deduction for these amounts.

The redemption, sale or exchange of Fund shares (including the exchange of
shares of one Fund for shares of another) is a taxable event and may result in a
gain or loss. Gain or loss, if any, recognized on the sale or other disposition
of shares of the Fund will be taxed as capital gain or loss if the shares are
capital assets in the shareholder's hands. Generally, a shareholder's gain or
loss will be a long-term gain or loss if the shares have been held for more than
one year. Pursuant to the Taxpayer Relief Act of 1997, long-term capital gains
generally are subject to a maximum tax rate of 20%.

If a shareholder sells or otherwise disposes of a share of the Fund before
holding it for more than six months, any loss on the sale or other disposition
of such share shall be (i) treated as a long-term capital loss to the extent of
any capital gain dividends received by the shareholder with respect to such
share or (ii) in the case of the Municipal Money Market Fund, disallowed to the
extent of any exempt-interest dividend received by the shareholder with respect
to such shares. A loss realized on a sale or exchange of shares may be
disallowed if other shares are acquired within a 61-day period beginning 30 days
before and ending 30 days after the date on which the shares are disposed.

Generally, unless a shareholder of any Fund includes his or her taxpayer
identification number (social security number for individuals) in the
Shareholder Application and certifies that he or she is not subject to backup
withholding, the Fund is required to withhold and remit to the U.S. Treasury 31%
from dividends other than exempt-interest dividends and other reportable
payments to the shareholder.

-41-
<PAGE>

owners of certain types of U.S. government securities. Thus, for residents of
these states, distributions derived from a Fund's investment in certain types of
U.S. government securities should be free from state and local income taxes to
the extent that the interest income from such investments would have been exempt
from state and local income taxes if such securities had been held directly by
the respective shareholders themselves.

Municipal Money Market Fund-Taxation

The Municipal Money Market Fund also intends to satisfy conditions under the
Code that will enable interest from municipal obligations, which is exempt from
regular federal income taxes in the hands of each Fund, to qualify as "exempt-
interest dividends" when distributed to such Fund's shareholders. Except as
discussed below, such dividends are exempt from regular federal income taxes.
Although exempt-interest dividends paid by the Municipal Money Market Fund will
be excluded by shareholders of the Funds from their gross income for regular
federal income tax purposes, under the Code all or a portion of such dividends
may be (i) a preference item for purposes of the alternative minimum tax, (ii) a
component of the "ACE" adjustment for purposes of determining the amount of
corporate alternative minimum tax or (iii) a factor in determining the extent to
which a shareholder's Social Security or railroad retirement benefits are
taxable. Moreover, the receipt of exempt-interest dividends from each of the
Funds affects the federal tax liability of certain foreign corporations, S
Corporations and insurance companies. Furthermore, under the Code, interest on
indebtedness incurred or continued to purchase or carry Fund shares, which
interest is deemed to relate to exempt-interest dividends, will not be
deductible by shareholders of the Fund for federal income tax purposes.

The exemption of exempt-interest dividend income from regular federal income
taxation does not necessarily result in similar exemptions for such income under
tax laws of state or local taxing authorities. In general, states exempt from
state income tax only that portion of any exempt-interest dividend that is
derived from interest received by a regulated investment company on its holdings
or obligations issued by that state or its political subdivisions and
instrumentalities.

A notice detailing the tax status of dividends and distributions paid by the
Municipal Money Market Fund will be mailed annually to its shareholders. As
part of this notice, the Fund will report to its shareholders the percentage of
interest income earned by the Fund during the preceding year on tax-exempt
obligations indicating, on a state-by-state basis, the source of such income.

Descriptions of tax consequences set forth in this Prospectus and in the
Statement of Additional Information are intended to be a general guide.
Investors should consult their tax advisers with respect to the specific tax
consequences of an investment in a Fund, including the effect and applicability
of state, local, foreign, and other tax laws and the possible effects of changes
in federal or other tax laws. This discussion is not intended as a substitute
for careful tax planning.

-42-
<PAGE>

Rule 12b-1 Fees

The Trust has adopted a distribution plan under Rule 12b-1 of the Investment
Company act of 1940, as amended, that allows the Funds to pay distribution fees
for the sale and distribution of fund shares. Portions of the fees are used to
provide payments for services provided to shareholders ("service fees"), as
indicated below.

Class A shares of each Fund, except the Municipal Money Market Fund, are subject
to Rule a 12b-1 fee of up to .35% of average daily net assets, five- sevenths of
which (.25%) is a "service fee." There are no Rule 12b-1 fees on the Municipal
Money Market Fund, and the Rule 12b-1 fee paid by Class A shares is up to .15%
of average annual net assets, all of which is a "service fee."

Class B shares of each Fund are subject to a Rule 12b-1 fee of up to 1.00% of
average annual net assets, one-fourth (.25%) of this is a "service fee."

Class C shares of each Fund except the Municipal Money Market Fund are subject
to a Rule 12b-1 fee of up to 1.00% of average annual net assets, one-fourth
(.25%) of this is a "service fee."

Because these fees are paid out of the Fund's assets on an ongoing basis, over
time they will increase the cost of your investment and may cost you more than
paying other types of sales charges. The higher fees for Class B and Class C
shares may therefore cost you more than paying the maximum permitted front end
sales charge on Class A Shares.

-43-
<PAGE>

Account Services

To use any of these programs, simply fill out the appropriate section of your
account application, or request the appropriate form.

Automatic Dividend Diversification

With this program, you can have all dividends and other distributions from one
Fund automatically invested in the same class of shares of another Fund.

Automatic Investment Plan

Shareholders can set up an Automatic Investment Plan. Once each month the
shareholder's account will be debited the amount (at least $50) specified by the
shareholder.

Checkwriting

Checkwriting is available to Class A and Class C shareholders of the Municipal
Money Market Fund. Simply request this on your account application, and
complete a signature care, and you will receive a book of blank checks. The
minimum amount of a check is $250. When a check is presented for payment,
enough shares will be redeemed to cover the amount of the check and any
applicable deferred sales charge. If the amount of the check plus the sales
charge is more than the account value, the check will be returned unpaid.

Exchange Privilege

Shareholders may make free unlimited exchanges by mail or telephone within
classes of shares without any sales charge. Shares of one class may not be
exchanged for shares of any other class of any Fund. Be aware that exchanges are
regarded as sales for federal and state income tax purposes and could result in
a gain or loss, depending on the original cost of shares exchanged. Exchanges
usually occur on the same day they are requested. The terms of the exchange
privilege may change and the privilege may be revoked at any time without
notice.

The Fund will not be responsible for any losses resulting from unauthorized
telephone transactions if it follows reasonable procedures designed to verify
the identify of the caller. The Fund will request personal or other information
from the caller, and will record calls. By establishing an account with the
Fund, you consent to all recording of telephone calls.

You may make exchanges over the telephone by calling 1-800-872-8037.

Reinstatement Privilege

If you redeem Class A shares (under $1 million) and reinvest within 90 days, you
will not have to pay a sales charge. If you redeem Class A shares over $1
million, or Class B or C shares and pay a deferred sales charge and then
reinvest within 90 days, your account will be credited the amount of the
deferred sales charge.

Systematic Investing

Your shares of any class of the Municipal Money Market Fund can be exchanged
monthly for shares of the same class of other Funds. An exchange of at least
$50 per exchange will be made around the 15th of each month in accordance with
your instructions. This program takes advantage of dollar cost averaging.

Systematic Withdrawal Plan

If you have an account balance of at least $10,000, you can set up a plan to
have redemptions paid to you, or someone you designate, on a monthly, quarterly,
semi-annual or annual basis. You can withdraw up to 12% of the account value
annually, if a monthly plan, up to 1% per month, without a deferred sales
charge. If you request this service after completing our application and
payments are to be made to someone other than yourself, you will have to provide
a signature guarantee. Redemption checks are generally mailed within two days
after redemption. The availability of this service may end, and a fee of up to
$5 per withdrawal may be charged with 30 days written notice to you.

Transfer of Shares

You may transfer Fund shares to family members and others at any time without a
sales charge. Consult your tax adviser concerning such transfers.

-44-
<PAGE>

North American Funds
286 Congress Street
Boston, Massachusetts 02210
(800) 872-8037

International Small Cap Fund Mid Cap Value Fund
International Equity Fund Stock Index Fund
Global Equity Fund Small Cap Index Fund
Emerging Growth Fund Socially Responsible Fund
Strategic Growth Fund High Yield Bond Fund
Small/Mid Cap Fund Aggressive Growth Lifestyle Fund
Growth Equity Fund Moderate Growth Lifestyle Fund
Tax-Sensitive Equity Fund Conservative Growth Lifestyle Fund
Growth and Income Fund Municipal Money Market Fund
Equity-Income Fund Science & Technology Fund
Balanced Fund
Strategic Income Fund
Investment Quality Bond Fund
National Municipal Bond Fund
U.S. Government Securities Fund
Money Market Fund

For Additional Information
More information about the Funds, including the SAI, is available to you free of
charge. To request additional information:

By Telephone
Call 1-800-872-8037

By Mail from the Funds (There is no fee)
Write to:
North American Funds
286 Congress Street
Boston, MA 02210

By mail, by electronic request at [email protected] or in Person from the
Public Reference Room of the Securities and Exchange Commission (SEC). (You will
pay a duplication fee.)

Visit or Write to:
SEC's Public Reference Section
450 Fifth Street, NW
Washington, D.C. 20549-6009
1-202-942-8090

Online at the SEC's Internet Site
Text-only versions of fund documents are available on the EDGAR Database at
http://www.sec.gov.

Statement of Additional Information (SAI)
The SAI provides additional information about the Trust and the North American
Funds.

-45-
<PAGE>

PROSPECTUS 2000

North American Funds

Mid Cap Value Fund Aggressive Growth Lifestyle Fund
Socially Responsible Fund Moderate Growth Lifestyle Fund
High Yield Bond Fund Conservative Growth Lifestyle Fund

Institutional Class I Shares
Institutional Class II Shares

May __, 2000
<PAGE>

Table of Contents
Organization of Information

This Prospectus includes information about ten different Funds.

. Section I of the Prospectus includes summaries of each Fund.
. Section II includes additional information about the Funds' investment
strategies, additional risk information and information about the
Funds' management.
. Section III of the Prospectus includes information about how to invest
and manage your North American Funds account.

Section I: Summaries of the Funds ........................................ Page

Summary of each Fund
. Investment Objective
. Principal Investment Strategies
. Main Investing Risks
. Investment Performance
. Descriptions of Main Investment Risks

Section II: Other Information about each Fund ............................ Page

. Fees and Expenses
. More Information About Investment Strategies and Risks
. Other Risks of Investment
. Fund Management

Section III: Investing in the Funds ....................................... Page

This section includes the information you need about how to invest and how to
redeem shares. It also includes other important information about sales
charges, taxes and account privileges.

More Information

If you'd like information additional to that included in this Prospectus, the
back cover lists a number of places to call or to visit for additional
materials.
<PAGE>

Section I:

Fund Summaries

Mid Cap Value Fund

Investment Goal and Strategies

Medium capitalization companies include companies with the characteristics of
companies included in the Russell Midcap(TM) Index. As of June 30, 1999, the
largest company included in the Russell Midcap(TM) Index had an approximate
market capitalization of $11.2 billion, while the average market capitalization
was approximately $3.9 billion.

MAIN INVESTING RISKS

. Credit Risk, (including the particular risks associated with junk bonds)
. Derivatives Risk
. Equity Risk
. Liquidity Risk
. Management Risk

-2-
<PAGE>

Stock Index Fund

Investment Goal and Strategies

An index fund tries to match the performance of its target index as closely as
possible by owning stocks in the index, and holding them in the same
proportions, so the fund will mimic the overall performance of the index. The
Stock Index Fund seeks to match the investment performance of the S&P 500 Index.
The S&P 500 Index is composed of 500 common stocks which are chosen by Standard
& Poor's Corporation. The Index approximates the general distribution of
industries in the U.S. economy, and captures the price performance of a large
cross-section of the publicly traded stock market. The Index is capitalization-
weighted, meaning that it holds each stock in proportion to its total value in
the stock market.

American General Investment Management, L.P., ("AGIM") the Fund's Subadvisor,
pursues this objective by investing in companies that are listed in the Index,
except for a small portion in cash, to be available for redemptions. Since it
may not be possible for this Fund to buy every stock included in the Index, or
in the same proportions, the Fund invests in a sampling of common stocks in
the Index. The common stocks of the S&P 500 Index to be included in the Fund
will be selected utilizing a statistical sampling technique known as
"optimization." This process selects stocks for the Fund so that various
industry weightings, market capitalizations and fundamental characteristics
(e.g., price-to-book, price-to-earnings, debt- to-asset ratios and dividend
yields) closely approximate those of the Index. The common stocks held by the
Fund are weighted to make the Fund's aggregate investment characteristics
similar to those of the Index as a whole.

MAIN INVESTING RISKS

. Credit Risk
. Currency Risk
. Derivatives Risk
. Equity Risk
. Foreign Investment Risk
. Liquidity Risk
. Management Risk

-3-
<PAGE>

Small Cap Index Fund

Investment Goal and Strategies

An index fund tries to match the performance of its target index as closely as
possible by owning stocks in the index, and holding them in the same
proportions, so the fund will mimic the overall performance of the index. The
Small Cap Index Fund seeks to match the investment performance of the Russell
2000(R) Index. The Russell 2000(R) Index is a sub-index of the Russell 3000(R)
Index, which follows the 3,000 largest U.S. companies based on total market
capitalization. The Russell 2000(R) Index measures the performance of the 2,000
smallest companies in the Russell 3000(R) Index, and represents about 8% of the
total market capitalization of the Russell 3000(R) Index. The average market
capitalization in the Russell 2000(R) Index is $526.4 million as of June 30,
1999. As of the same date, the largest company in the Index had a market
capitalization of nearly $1,350 billion.

MAIN INVESTING RISKS

. Credit Risk
. Currency Risk
. Derivatives Risk
. Equity Risk, (including the risks associated with investing in smaller
companies)
. Foreign Investment Risk
. Liquidity Risk
. Management Risk

-4-
<PAGE>

Socially Responsible Fund

Investment Goal and Strategies

The Fund does not invest in companies that are significantly engaged in:
- - the production of nuclear energy;
- - the manufacture of weapons or delivery systems;
- - the manufacture of alcoholic beverages or tobacco products;
- - the operation of gambling casinos; or
- - business practices or the production of products that significantly pollute
the environment.

MAIN INVESTING RISKS

. Credit Risk
. Currency Risk
. Derivatives Risk
. Equity Risk
. Foreign Investment Risk
. Liquidity Risk
. Management Risk
. Social Criteria Risk

-5-
<PAGE>

High Yield Bond Fund

Investment Goal and Strategies

MAIN INVESTING RISKS

. Credit Risk, (including the particular risks associated with junk bonds)
. Currency Risk
. Derivatives Risk
. Foreign Investment Risk
. Interest Rate Risk
. Liquidity Risk
. Management Risk

-6-
<PAGE>

Aggressive Growth Lifestyle Fund

Investment Goal and Strategies

This Fund is managed so that it can serve as a complete investment program for
you or as a core part of your larger portfolio. The Underlying Funds have been
selected to represent a reasonable spectrum of investment options for the Fund.
We have based the target investment percentages for the Fund on the degree to
which we believe the Underlying Funds, in combination, to be appropriate for the
Fund's investment objective. We may change the asset allocation ranges and the
particular Underlying Funds in which the Fund may invest from time to time. The
Fund is a non-diversified investment company under the 1940 Act because it
invests in a limited number of the Underlying Funds. However, the Underlying
Funds themselves are diversified companies.

MAIN INVESTING RISKS

. Concentration Risk
. Credit Risk
. Currency Risk
. Derivatives Risk
. Equity Risk
. Interest Rate Risk
. Liquidity Risk
. Foreign Investment Risk
. Management Risk

-7-
<PAGE>

International Equity Securities 25%-35%
Underlying Fund:
International Equity Fund
(This Fund invests at least 65% in non-U.S.
companies.)

Small Capitalization Equity Securities 15%-25%
Underlying Fund:
Small Cap Growth Fund
(This Fund invests in the equities of small
capitalization companies.)

Medium Capitalization Equity Securities 10%-20%
Underlying Funds:
Mid Cap Value Fund
Mid Cap Growth Fund
(These Funds invest in the equities of medium
capitalization companies.)

Large Capitalization Equity Securities 20%-30%
Underlying Funds:
Large Cap Growth Fund
Growth & Income Fund
(These Funds invest in the equities of large
capitalization companies.)

Bonds 5%-15%
Underlying Funds:
Core Bond Fund
High Yield Bond Fund
(These Funds invest in fixed-income securities,
at least 65% of which are investment grade.)

-8-
<PAGE>

Moderate Growth Lifestyle Fund

Investment Goal and Strategies

Asset allocation among the equity securities of international companies, large
capitalization companies, medium capitalization companies, small capitalization
companies and bonds is the most critical investment decision that you make as an
investor. Selecting the appropriate combination should be based on your
personal investment goals, time horizons and risk tolerance. The chart below
reflects the projected asset allocation ranges and Underlying Fund choices for
this Fund, as of the time of print.

The Fund is a non-diversified investment company under the 1940 Act because it
invests in a limited number of the Underlying Funds. However, the Underlying
Funds themselves are diversified companies.

MAIN INVESTING RISKS

. Concentration Risk
. Credit Risk
. Currency Risk
. Derivatives Risk
. Equity Risk
. Interest Rate Risk
. Liquidity Risk
. Foreign Investment Risk
. Management Risk

-9-
<PAGE>

International Equity Securities 10%-20%
Underlying Fund:
International Equity Fund
(This Fund invests at least 65% in non-U.S.
companies.)

Small Capitalization Equity Securities 10%-20%
Underlying Fund:
Small Cap Growth Fund
(This Fund invests in the equities of small
capitalization companies.)

Medium Capitalization Equity Securities 10%-20%
Underlying Funds:
Mid Cap Value Fund
Mid Cap Growth Fund
(These Funds invest in the equities of medium
capitalization companies.)

Large Capitalization Equity Securities 25%-35%
Underlying Funds:
Large Cap Growth Fund
Growth & Income Fund
(These Funds invest in the equities of large
capitalization companies.)

Bonds 20%-30%
Underlying Funds:
Core Bond Fund
High Yield Bond Fund
(These Funds invest in fixed-income securities,
at least 65% of which are investment grade.)

-10-
<PAGE>

Conservative Growth Lifestyle Fund

Investment Goal and Strategies

This Fund is managed so that it can serve as a complete investment program for
you or as a core part of your larger portfolio. The Underlying Funds have been
selected to represent a reasonable spectrum of investment options for the Fund.
We have based the target investment percentages for the Fund on the degree to
which we believe the Underlying Funds, in combination, to be appropriate for the
Fund's investment objective. We may change the asset allocation ranges and the
particular Underlying Funds in which the Fund may invest from time to time. The
Fund is a non-diversified investment company under the 1940 Act because it
invests in a limited number of the Underlying Funds. However, the Underlying
Funds themselves are diversified companies.

MAIN INVESTING RISKS

. Concentration Risk
. Credit Risk
. Currency Risk
. Derivatives Risk
. Equity Risk
. Interest Rate Risk
. Liquidity Risk
. Foreign Investment Risk
. Management Risk

-11-
<PAGE>

International Equity Securities 5%-15%
Underlying Fund:
International Equity Fund
(This Fund invests at least 65% in non-U.S.
companies.)

Small Capitalization Equity Securities 5%-15%
Underlying Fund:
Small Cap Growth Fund
(This Fund invests in the equities of small
capitalization companies.)

Medium Capitalization Equity Securities 5%-15%
Underlying Funds:
Mid Cap Value Fund
Mid Cap Growth Fund
(These Funds invest in the equities of medium
capitalization companies.)

Large Capitalization Equity Securities 25%-35%
Underlying Funds:
Large Cap Growth Fund
Growth & Income Fund
(These Funds invest in the equities of large
capitalization companies.)

Bonds 30%-50%
Underlying Funds:
Core Bond Fund
High Yield Bond Fund
(These Funds invest in fixed-income securities,
at least 65% of which are investment grade.)

-12-
<PAGE>

Municipal Money Market Fund

Investment Goal and Strategies

The investments this Fund may buy include:
- - Municipal fixed-income securities with remaining maturities of 13 months or
less
- - Commercial paper sold by municipalities rated at least MIG1 or MIG2 by
Moody's or A1 or A2 by S&P
- - Variable rate demand notes
- - Auction rate preferred stock and other adjustable rate obligations that are
exempt from federal income taxation
- - Illiquid and restricted securities, limited to 10% of the Fund's net assets
at all times
- - Rule 144A securities (liquid)

MAIN INVESTING RISKS

. Credit Risk
. Interest Rate Risk
. Management Risk

-13-
<PAGE>

Science & Technology Fund

Investment Goals and Strategies

The objective of the Science and Technology Fund is long-term growth of capital.

MAIN INVESTING RISKS

. Credit Risk
. Currency Risk
. Derivatives Risk
. Equity Risk
. Liquidity Risk
. Foreign Investment Risk
. Management Risk
. Science & Technology Company Risk

-14-
<PAGE>

Descriptions of Main Investing Risks

Concentration Risk

Credit Risk

Currency Risk

Derivatives Risk

Equity Risk

-15-
<PAGE>

earnings than the values of other stocks.

Market capitalization refers to the total value of a company's outstanding
stock. Smaller companies with market capitalizations of less than $1 billion or
so are more likely than larger companies to have limited product lines, smaller
markets for their products and services, and they may depend on a small or
inexperienced management group. Small company stock may not trade very
actively, and their prices may fluctuate more than stocks of larger companies.
Stocks of smaller companies may be more vulnerable to negative changes than
stocks of larger companies.

Foreign Investment Risk

Funds investing in foreign securities may experience rapid changes in value.
One reason for this volatility is that the securities markets of many foreign
countries are relatively small, with a limited number of industries. Also,
foreign securities issuers are usually not subject to the same degree of
regulation as U.S. issuers. Reporting, accounting and auditing standards of
foreign countries differ, in some cases significantly, from U.S. standards.

Interest Rate Risk (Market Risk)

Liquidity Risk

Liquidity risk is the risk that a Fund will not be able to sell a security
because there are too few people who actively buy and sell, or trade, that
security on a regular basis. A Fund holding an illiquid security may not be
able to sell the security at a fair price. Liquidity risk increases for Funds
investing in derivatives, foreign investments or restricted securities.

Management Risk
Management risk is the risk that the subadvisor of a Fund, despite using various
investment and risk analysis techniques, may not produce the desired investment
results.

Social Criteria Risk

-16-
<PAGE>

investment opportunities for the Fund more than for funds having no such
criteria.

Science & Technology Company Risk

-17-
<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) Institutional Institutional
Class I Class II/1/
- --------------------------------------------------------------------------------
Maximum Sales Charge Imposed on Purchases (as None None
a percentage of offering price)

Maximum Deferred Sales Charge (as a percentage None None
of original purchase price or redemption
price, whichever is lower)

Annual Fund Operating Expenses (expenses that
are deducted from fund assets)
Institutional Institutional
Fund Class I Class II
- --------------------------------------------------------------------------------
Mid Cap Value Fund
Management Fees 0.90%
Admin Service Fee 0.25
Other Expenses 1.60%

Total Annual Fund Operating Expenses 1.75%
Fee Waiver/Expense Reimbursements 0.07
Net Expenses 1.68
- --------------------------------------------------------------------------------
Socially Responsible Fund
Management Fees 0.65%
Admin Service Fee 0.25
Other Expenses 1.78%

Total Annual Fund Operating Expenses 1.68%
Fee Waiver/Expense Reimbursements 0.28
Net Expenses 1.40
- --------------------------------------------------------------------------------
High Yield Bond Fund
Management Fees 0.83%
Admin Service Fee 0.25
Other Expenses 1.55%
Total Annual Fund Operating Expenses 1.63%
Fee Waiver/Expense Reimbursement 0.18
Net Expenses 1.45
- --------------------------------------------------------------------------------

- ----------
/1/ Only the High Yield Bond Fund offers Institutional Class II Shares.

-18-
<PAGE>

- --------------------------------------------------------------------------------
Aggressive Growth Lifestyle Fund
Management Fees 0.10%
Other Expenses 0.00%
Total Annual Fund Operating Expenses 0.10%
Fee Waiver/Expense Reimbursement 0.00%
Net Expenses 0.10%

AGAM has agreed to waive or reimburse expenses
as shown above. This contractual arrangement
will extend for an indefinite period of time.

The number below shows the total combined
operating expenses as a percentage of net
assets, including indirect expenses of the
Underlying Funds after expense
reimbursements. This reflects total average
weighted combined operating expenses.
0.10%
Total Combined Operating Expenses

- --------------------------------------------------------------------------------
Moderate Growth Lifestyle Fund
Management Fees 0.10%
Other Expenses 0.00%
Total Annual Fund Operating Expenses 0.10%
Fee Waiver/Expense Reimbursement 0.00%
Net Expenses 0.10%

AGAM has agreed to waive or reimburse expenses
as shown above. This contractual arrangement
will extend for an indefinite period of time.

-19-
<PAGE>

- --------------------------------------------------------------------------------
Conservative Growth Lifestyle Fund 0.10%
Management Fees 0.10%
Other Expenses 0.00%
Total Annual Fund Operating Expenses 0.10%
Fee Waiver/Expense Reimbursement 0.00%
Net Expenses 0.10%

AGAM has agreed to waive or reimburse expenses
as shown above. This contractual arrangement
will extend for an indefinite period of time.

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:

Fund 1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------------
Mid Cap Value Fund
Institutional Class I $178 $551 $949 $2,062
- --------------------------------------------------------------------------------
Socially Responsible Fund
Institutional Class I $171 $530 $913 $1,987
- --------------------------------------------------------------------------------
High Yield Bond Fund
Institutional Class I $148 $459 $792 $1,735
Institutional Class II $ - $ - $ - $ -
- --------------------------------------------------------------------------------
Aggressive Growth Lifestyle Fund
Institutional Class I $ 10 $ 32 $ 56 $ 128
- --------------------------------------------------------------------------------
Moderate Growth Lifestyle Fund
Institutional Class I $ 10 $ 32 $ 56 $ 128
- --------------------------------------------------------------------------------
Conservative Growth Lifestyle Fund
Institutional Class I $ 10 $ 32 $ 56 $ 128
- --------------------------------------------------------------------------------

-20-
<PAGE>

More Information About Investment Strategies and Risks

- --------------------------------------------------------------------------------
More About Portfolio Investments
- --------------------------------------------------------------------------------

Asset-Backed Securities

Depositary Receipts

Equity Securities

-21-
<PAGE>

Generally, there are three types of stocks:

2. Preferred stock - Each share of preferred stock allows the holder to get a
fixed dividend before the common stock shareholders receive any dividends
on their shares.

3. Convertible preferred stock - A stock with a fixed dividend which the
holder may exchange for a certain amount of common stock.

Fixed-income Securities

-22-
<PAGE>

agencies or supranational entities. Fixed-income securities may be acquired with
warrants attached.

Foreign Currency

Foreign Securities

Securities of foreign issuers may be denominated in foreign currencies.
Generally, all of the Funds may invest in foreign securities except for the
Municipal Money Market Fund.

Futures and Options

The Funds use stock and bond futures to invest cash and cash equivalents to:

- - Write (sell) exchange traded covered put and call options on securities and
stock indices.

- - Purchase exchange traded put and call options on securities and stock
indices.

- - Purchase and sell exchange traded financial futures contracts.

- - Write (sell) covered call options and purchase exchange traded put and call
options on financial futures contracts.

- - Write (sell) covered call options and purchase non- exchange traded call
and put options on financial futures contracts.

Illiquid Securities

Investment Companies

All of the Funds may invest in the securities of other open-end or closed-end
investment companies subject to the limitations imposed by the 1940 Act. A Fund
will indirectly bear

-23-
<PAGE>

its proportionate share of any management fees and other expenses paid by an
investment company in which it invests.

Investment Funds

Loan Participations

Money Market Securities

Examples of high quality money market securities include:

- - Cash and cash equivalents

- - Securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities

- - Certificates of deposit and other obligations of domestic banks having
total assets in excess of $1 billion

- - Commercial paper sold by corporations and finance companies

- - Corporate debt obligations with remaining maturities of 13 months or less

- - Repurchase agreements, money market securities of foreign issuers if
payable in U.S. dollars, asset-backed securities, loan participations, and
adjustable rate securities.

Mortgage-Related Securities

-24-
<PAGE>

Real Estate Securities

Real estate securities are securities issued by companies that invest in real
estate or interests therein. All of the Funds except for the High Yield Bond
Fund may invest in real estate securities and real estate investment trusts
("REITs").REITs are generally publicly traded on the national stock exchanges
and in the over-the-counter market and have varying degrees of liquidity.

Repurchase Agreements

Reverse Repurchase Agreements and Dollar Rolls

Structured Securities

Swap Agreements

Swap agreements are contracts between parties in which one party agrees to make
payments to the other party based on the change in market value of a

-25-
<PAGE>

U.S. Government Securities

Variable Amount Demand Master Notes

Variable Rate Demand Notes

Warrants and Rights

When-Issued Securities

-26-
<PAGE>

have a profit. All of the Funds except the Mid Cap Value Fund may invest in
when-issued securities.

The factors that cause a Fund to perform differently from the index it tries to
track are called tracking differences. There is no assurance that an Index Fund
can track its index.

The index may remove one stock and substitute another, requiring the Fund to do
the same. When a stock is sold and the new stock purchased, the Fund incurs
transaction costs. The index incurs no transaction costs. Therefore, any index
fund portfolio manager cannot match exactly the performance of an index.

-27-
<PAGE>

Management of the Funds

Investment Adviser

According to its Advisory Agreement With the Trust (the "Advisory Agreement"),
AGAM:

. Oversees the administration of all aspects of the business and affairs of
the North American Funds
. Selects, contracts with and compensates subadvisors to manage the assets of
the North American Funds
. Makes recommendations to the Trustees regarding the hiring, termination and
replacement of subadvisors
. Reimburses the North American Funds if the total of certain expenses
allocated to any Fund exceeds certain limitation
. Monitors the subadvisors for compliance with the investment objectives and
related policies of each Fund
. Review the performance of the subadvisors
. Periodically reports to the Trustees

The following table shows the management fees each Fund will pay annually as a
percentage of the Fund's average daily net asset value.

-28-
<PAGE>

Advisory fee
Fund Name (as a % of average daily net assets)
- --------------------------------------------------------------------------------
Conservative Growth Lifestyle Fund 0.10%

Aggressive Growth Lifestyle Fund 0.10%

High Yield Bond Fund 82.5% on the first $200 million
72.5% on the next $300 million
67.5% on assets over $500 million

Mid Cap Value Fund 90.0% on the first $100 million
87.5% on the next $150 million
85.0% on the next $250 million
82.5% on the next $250 million
80.0% on the assets over $750 million

Moderate Growth Lifestyle Fund 0.10%

Municipal Money Market Fund 0.35% on the first $200 million
0.35% on the next $300 million
0.35% on assets over $500 million

Small Cap Index Fund 0.28% on the first $500 million
0.27% on assets over $500 million

Socially Responsible Fund 0.65%

Stock Index Fund 0.27% on the first $500 million
0.26% on assets over $500 million

Science and Technology Fund 0.90%

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<PAGE>

Investment Subadvisors

The Subadvisors are:

AGIM
2929 Allen Parkway, Houston, Texas 77015

Magali E. Azema-Barac is responsible for AGIM's equity group. She heads the team
making investment decisions for each of the Index Funds, as well as for the
Socially Responsible Fund. Ms. Azema-Barac joined American General in
September, 1999. Prior to that, she worked on the equity desk of US West
Investment Management Company in Englewood, Colorado, where she incepted and
managed an enhanced equity portfolio.

Neuberger Berman Management, Inc. ("NB Management")
605 Third Avenue, Second Floor, New York, New York 10158-0180

NB Management is the Subadvisor for the Mid Cap Value Fund. NB Management and
its predecessor firms have

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<PAGE>

specialized in the management of no-load mutual funds since 1950. As of December
31, 1999, NB Management and its affiliates managed approximately $54 billion in
aggregate net assets.

T. Rowe Price Associates, Inc.,
("T. Rowe Price")

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<PAGE>

Section III:

Investing in the North American Funds
Classes of Shares

There are two classes of shares of North American Funds offered by this
prospectus: Institutional Class I shares and Institutional Class II shares.

Institutional Class I shares of each Fund and Institutional Class II shares of
the High Yield Bond Fund are available to you through your employer plan.
Institutional Class I and Class II Shares are available to any qualifying
employer plan once the plan establishes a minimum account balance of $5 million
with the Trust. A plan's account balance is equal at any time to the aggregate
of all amounts contributed by the plan to the Trust, less the cost of all
redemptions by such plan from the Trust. The Distributor may waive the minimum
account balance requirement if it reasonably anticipates that the size of the
plan and/or the anticipated amount of contributions will present economies of
scale. As a participant in an employer retirement plan, you do not purchase
Institutional Class I and Class II Shares of the Funds directly. Rather,
Institutional Class I and Class II Shares of a Fund are purchased for you when
you elect to allocate your retirement contributions to a Fund that is available
as an investment option in your retirement or savings plan. You may be permitted
to elect different investment options, alter the amounts contributed to your
plan, or change how contributions are allocated among your investment options in
accordance with your plan's specific provisions. See your plan administrator or
employee benefits office for more details. Investments by individual
participants in employer retirement plans are made through their plan sponsor or
administrator, who is responsible for transmitting instructions for all orders
for the purchase, redemption and exchange of Fund shares. The availability of an
investment by a plan participant in the Funds, and the procedures for investing,
depend upon the provisions of the plan and whether the plan sponsor or
administrator has contracted with the Trust or designated agent for special
processing services.

For more information on how to participate in the Funds through an employee
retirement plan, please refer to your plan materials or contact your employee
benefits office.

Transfer or exchange of balances

An employer retirement plan may allow you to exchange all or part of your
existing plan balance from one investment option to another. Check with your
plan administrator for details on the rules governing exchanges in your plan.
Exchanges will be accepted by the Trust only as permitted by your plan. Your
plan administrator can explain how frequently exchanges are allowed. The Trust
reserves the right to refuse any exchange purchase request.

Pricing of Fund Shares

The price of the shares of each Fund is the net asset value per share (next
determined following receipt of an order). The net asset value of the shares of
each class of each Fund is calculated separately and, except as described below,
is determined once daily as of the close of regularly scheduled trading on the
New York Stock Exchange. Net asset value per share of each class of each Fund
is calculated by dividing the value of the portion of the Fund's securities and
other assets attributable to that class, less the liabilities attributable to
that class, by the number of shares of that class outstanding. No determination
is required on (i) days on which changes in the value of such Fund's securities
holdings will not materially affect the current net asset value of the shares of
the Fund and (ii) days when the New York Stock Exchange is closed (for example,
national holidays). Generally, trading in non-U.S. securities, as well as U.S.
Government securities and money market instruments, is substantially completed
each day

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<PAGE>

at various times prior to the close of regularly scheduled trading on the New
York Stock Exchange. The values of such securities used in computing the net
asset value of the shares of a class of a Fund are generally determined as of
such times. Occasionally, events which affect the values of such securities may
occur between the times at which they are generally determined and the close of
regularly scheduled trading on the Exchange and would therefore not be reflected
in the computation of a class's net asset value. If events materially affecting
the value of such securities occur during such period, then these securities
will be valued at their fair value as determined in good faith by the
subadvisors under procedures established and regularly reviewed by the Trustees.

All short-term debt instruments with a remaining maturity of 60 days or less
held by the other Funds are valued on an amortized cost basis.

Unless you request cash payment, all dividends and distributions will be
reinvested. All Funds declare and pay capital gains annually.

Dividends and Distributions from North American Funds

This Fund declares and pays income dividends monthly:

High Yield Bond

These Funds declare income dividends daily and pay quarterly:

Conservative Growth Lifestyle
Aggressive Growth Lifestyle
Mid Cap Value
Moderate Growth Lifestyle
Socially Responsible

Taxes

It is expected that each Fund of the Trust will qualify as a "regulated
investment company" under the Code. If it so qualifies, a Fund will not be
subject to United States federal income taxes on its net investment income and
net capital gain, if any, that it distributes to its shareholders in each
taxable year, provided that it distributed to its shareholders at least 90% of
its net investment income for such taxable year. If in any year a Fund fails to
qualify as a regulated investment company, such Fund would incur regular
corporate federal income tax on its taxable income for that year and be subject
to certain additional distribution requirements upon re-qualification. Each
Fund will be subject to a 4% nondeductible excise tax on its taxable income to
the extent it does not meet certain distribution requirements by the end of each
calendar year. Each Fund intends to make sufficient distributions to avoid
application of the corporate income and excise taxes.

Funds investing in foreign securities or currencies may be required to pay
withholding or other taxes to foreign governments on dividends and interest.
The investment yield of the Funds investing in foreign securities or currencies
will be reduced by these foreign taxes. Shareholders will bear the cost of any
foreign taxes, but may not be able to claim a foreign tax credit or deduction
for these foreign taxes. If a Fund is eligible for and makes an election to
allow the shareholders of that Fund to claim a foreign tax credit or deduction
for these taxes for any taxable year, the shareholders will be notified. The
ability of the shareholders to utilize such a foreign tax credit is subject to a
holding period requirement. In addition, Funds investing in securities of
passive foreign investment companies may be subject to U.S. federal income taxes
(and interest on such taxes) as a result of such investments. The investment
yield of the Funds making such investments will be reduced by these taxes and
interest. Shareholders will bear the cost of these taxes and interest, but will
not be able to claim a deduction for these amounts.

If a shareholder sells or otherwise disposes of a share of the Fund before
holding it for more than six months, any loss

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<PAGE>

on the sale or other disposition of such share shall be treated as a long-term
capital loss to the extent of any capital gain dividends received by the
shareholder with respect to such share. A loss realized on a sale or exchange of
shares may be disallowed if other shares are acquired within a 61-day period
beginning 30 days before and ending 30 days after the date on which the shares
are disposed.

Depending on the residence of the shareholder for tax purposes, distributions
may also be subject to state and local taxes or withholding taxes. Most states
provide that a regulated investment company may pass through (without
restriction) to its shareholders state and local income tax exemptions available
to direct owners of certain types of U.S. government securities. Thus, for
residents of these states, distributions derived from a Fund's investment in
certain types of U.S. government securities should be free from state and local
income taxes to the extent that the interest income from such investments would
have been exempt from state and local income taxes if such securities had been
held directly by the respective shareholders themselves.

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<PAGE>

North American Funds
286 Congress Street
Boston, Massachusetts 02210
(800) 872-8037

For Additional Information
More information about the Funds, including
the SAI, is available to you free of charge.
To request additional information:

By Telephone
Call 1-800-872-8037

By Mail from the Funds (There is no fee)
Write to:
North American Funds
286 Congress Street
Boston, MA 02210

By mail, by electronic request at [email protected], or in Person from the
Public Reference Room of the Securities and Exchange Commission (SEC). (You will
pay a duplication fee.)

Visit or Write to:
SEC's Public Reference Section
450 Fifth Street, NW
Washington, D.C. 20549-6009
1-202-942-8090

Online at the SEC's Internet Site
Text-only versions of fund documents are available on the EDGAR Database at
http://www.sec.gov.

Statement of Additional Information (SAI)
The SAI provides additional information about the Trust and the North American
Funds.

-35-
<PAGE>

NORTH AMERICAN FUNDS

Supplement Dated May __, 2000
to the
Statement of Additional Information
Dated March 1, 2000

Disclosure relating to:
Ten new series of the Trust:
Mid Cap Value Fund, Stock Index Fund, Small Cap Index Fund, Socially
Responsible Fund, High Yield Bond Fund, Aggressive Growth Lifestyle
Fund, Moderate Growth Lifestyle Fund, Conservative Growth Lifestyle
Fund, Municipal Money Market Fund, Science & Technology Fund

- --------------------------------------------------------------------------------
Note: This document supplements the North American Funds (the "Trust")
Statement of Additional Information dated March 1, 2000 (the "Statement of
Additional Information") filed electronically with the Securities and Exchange
Commission via EDGAR on March 2, 2000 -Registration Nos. 33-27958, 811-5797,
Accession Number: 95019-00-000730 - and incorporated herein by reference.

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

I. Date of the Statement of additional Information.

The date of the Statement of Additional Information is hereby amended to May __,
2000.

II. Ten New Series of the Trust.

The Trust intends to offer Class A, Class B, Class C and Institutional Class I
shares of ten new series: the Mid Cap Value Fund, the Stock Index Fund, the
Small Cap Index Fund, the Socially Responsible Fund, the High Yield Bond Fund,
the Aggressive Growth Lifestyle Fund, the Moderate Growth Lifestyle Fund, the
Conservative Growth Lifestyle Fund, the Municipal Money Market Fund, and the
Science & Technology Fund (collectively, the "Funds"). The Trust intends to
offer Institutional Class II shares of the High Yield Bond Fund.

III Investment Policies and Risks.

The disclosure under "Investment and Risk Factors Applicable to Multiple Funds"
in the Statement of Additional Information applies to the Funds. The disclosure
under "Hedging and Other Strategic Transactions" applies to the Funds.

<PAGE>

IV. Investment Restrictions.

The Funds have each adopted certain fundamental investment restrictions which,
unlike the investment objectives, policies, and investment program of each Fund,
may only be changed with the consent of a majority of the outstanding voting
securities of the particular Fund. The fundamental and, if applicable, non-
fundamental, investment restrictions of each Fund are listed below. The
percentage limitations referenced in some of the restrictions are to be
determined at the time of purchase. However, percentage limitations for illiquid
securities and borrowings apply at all times. Calculation of each Fund's total
assets for compliance with any of the investment restrictions will not include
cash collateral held in connection with securities lending activities.

A. As a matter of fundamental policy, the Mid Cap Value Fund may not:

(1) Borrow money, except that the Fund may (i) borrow money from banks for
temporary or emergency purposes and not for leveraging or investment and (ii)
enter into reverse repurchase agreements and employ similar investment
techniques, and pledge its assets in connection therewith, for any purpose;
provided that (i) and (ii) in combination do not exceed 33 1/3% of the value of
its total assets (including the amount borrowed) less liabilities (other than
borrowings). If borrowings exceed 33 1/3% of the value of the Fund's total
assets, the Fund will reduce its borrowings within three days (excluding Sundays
and holidays) to the extent necessary to comply with the 33 1/3% limitation.

(2) Purchase physical commodities or contracts thereon, unless acquired as a
result of the ownership of securities or instruments, but this restriction shall
not prohibit the Fund from purchasing futures contracts or options (including
options on futures contracts, but excluding options or futures contracts on
physical commodities) or from investing in securities of any kind. For purposes
of the limitations on commodities, the Fund does not consider foreign currencies
or forward contracts to be physical commodities.

(3) With respect to 75% of the value 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 value of the Fund's total assets would be invested in the
securities of that issuer or (ii) the Fund would hold more than 10% of the
outstanding voting securities of that issuer; except that the Fund may purchase
securities of other investment companies without regard to such limitation to
the extent permitted by (i) the 1940 Act, as amended from time to time, (ii) the
rules and regulations promulgated by the SEC under the 1940 Act, as amended from
time to time, or (iii) an exemption or other relief from the provisions of the
1940 Act.

(4) Purchase any security if, as a result, 25% or more of its total assets
(taken at current value) would be invested in the securities of issuers having
their principal business activities in the same industry, provided, however,
that this limitation excludes shares of other open-end
-2-
<PAGE>

investment companies owned by the Fund but includes the Fund's pro rata portion
of the securities and other assets owned by any such company. This limitation
does not apply to securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities.

(5) Lend any security or make any other loan if, as a result, more than 33 1/3%
of its total assets (taken at current value) would be lent to other parties,
except, in accordance with its investment objective, policies, and limitations,
(i) through the purchase of a portion of an issue of debt securities or (ii) by
engaging in repurchase agreements.

(6) Purchase real estate unless acquired as a result of the ownership of
securities or instruments, but this restriction shall not prohibit the Fund from
purchasing securities issued by entities or investment vehicles that own or deal
in real estate or interests therein or instruments secured by real estate or
interests therein.

(7) Issue senior securities, except as permitted under the 1940 Act.

(8) Underwrite securities of other issuers, except to the extent that the Fund,
in disposing of portfolio securities, may be deemed to be an underwriter within
the meaning of the 1933 Act.

As a matter of non-fundamental policy, the Mid Cap Value Fund may not:

(1) Purchase securities if outstanding borrowings, including any reverse
repurchase agreements, exceed 5% of its total assets.

(2) Purchase securities on margin from brokers or other lenders, except that the
Fund may obtain such short-term credits as are necessary for the clearance of
securities transactions. Margin payments in connection with transactions in
futures contracts and options on futures contracts shall not constitute the
purchase of securities on margin and shall not be deemed to violate the
foregoing limitation.

(3) Invest more than 10% of the value of its total assets in securities of
foreign issuers, provided that the limitation shall not apply to foreign
securities denominated in U.S. dollars, including American Depositary Receipts
("ADRs").

(4) Invest more than 15% of the Fund's net assets in illiquid and restricted
securities.

(5) Invest in securities issued by other investment companies except as part of
a merger, reorganization or other acquisition and except to the extent permitted
by (i) the 1940 Act, as amended from time to time, (ii) the rules and
regulations promulgated by the SEC under the 1940 Act, as amended from time to
time, or (iii) an exemption or other relief from the provisions of the 1940 Act.

B. As a matter of fundamental policy, the Stock Index Fund may not:

-3-
<PAGE>

(1) Borrow money or mortgage or hypothecate assets of the Fund, except that in
an amount not to exceed 1/3 of the current value of the Fund's total assets, it
may borrow money as a temporary measure for extraordinary or emergency purposes
and enter into reverse repurchase agreements or dollar roll transactions, and
except that it may pledge, mortgage or hypothecate not more than 1/3 of such
assets to secure such borrowings (it is intended that money would be borrowed
only from banks and only either to accommodate requests for the withdrawal of
beneficial interests (redemption of shares) while effecting an orderly
liquidation of portfolio securities or to maintain liquidity in the event of an
unanticipated failure to complete a portfolio security transaction or other
similar situations) or reverse repurchase agreements, provided that collateral
arrangements with respect to options and futures, including deposits of initial
deposit and variation margin, are not considered a pledge of assets for purposes
of this restriction and except that assets may be pledged to secure letters of
credit solely for the purpose of participating in a captive insurance company
sponsored by the Investment Company Institute. If borrowings exceed 5% of the
Fund's total assets the Fund will not purchase additional securities.

(2) Underwrite securities issued by other persons except insofar as the Trust
(or the Fund) may technically be deemed an underwriter under the Securities Act
of 1933 ("1933 Act") in selling a portfolio security.

(3) Make loans to other persons except: (a) through the lending of the Fund's
portfolio securities and provided that any such loans not exceed 30% of the
Fund's total assets (taken at market value); (b) through the use of repurchase
agreements or the purchase of short-term obligations; or (c) by purchasing a
portion of an issue of debt securities of types distributed publicly or
privately.

(5) Concentrate its investments in any particular industry (excluding U.S.
Government securities), but if it is deemed appropriate for the achievement of
the Fund's investment objective, up to 25% of its total assets may be invested
in any one industry. This limitation excludes shares of other open-end
investment companies owned by the Fund but includes the Fund's pro rata portion
of the securities and other assets owned by any such company.

(6) Issue any senior security (as that term is defined in the 1940 Act) if such
issuance is specifically prohibited by the 1940 Act or the rules and regulations
promulgated thereunder, provided that collateral arrangements with respect to
options and futures, including deposits of initial deposit and variation margin,
are not considered to be the issuance of a senior security for purposes of this
restriction.

-4-
<PAGE>

As a matter of non-fundamental policy, the Stock Index Fund may not:

(1) Pledge, mortgage or hypothecate for any purpose in excess of 10% of the Fund
total assets (taken at market value), provided that collateral arrangements with
respect to options and futures, including deposits of initial deposit and
variation margin, are not considered a pledge of assets for purposes of this
restriction.

(2) Purchase any security or evidence of interest therein on margin, except that
such short-term credit as may be necessary for the clearance of purchases and
sales of securities may be obtained and except that deposits of initial deposit
and variation margin may be made in connection with the purchase, ownership,
holding or sale of futures.

(3) Sell any security which it does not own unless by virtue of its ownership of
other securities it has at the time of sale a right to obtain securities,
without payment of further consideration, equivalent in kind and amount to the
securities sold and provided that if such right is conditional the sale is made
upon the same conditions.

(4) Invest for the purpose of exercising control or management.

(5) Invest more than 15% of the Fund's net assets (taken at the greater of cost
or market value) in securities that are illiquid or not readily marketable not
including (a) Rule 144A securities that have been determined to be liquid by the
Board of Trustees, and (b) commercial paper that is sold under section 4(2) of
the 1933 Act which: (i) is not traded flat or in default as to interest or
principal: and (ii) is rated in one of the two highest categories by at least
two nationally recognized statistical rating organizations and the Trust's Board
of Trustees have determined the commercial paper to be liquid: or (iii) is rated
in one of the two highest categories by one nationally recognized statistical
rating agency and the Board of Trustees has determined that the commercial paper
is equivalent quality and is liquid.

(6) Invest more than 10% of the Fund's total assets (taken at the greater of
cost or market value) in securities that are restricted as to resale under the
1933 Act (other than Rule 144A securities deemed liquid by the Board of
Trustees.)

(7) Invest more than 5% of the Fund's total assets in securities issued by
issuers which (including predecessors) have been in operation less than three
years.

(8) With respect to 75% of the Fund's total assets, purchase securities of any
issuer if such purchase at the time thereof would cause the Fund to hold more
than 10% of any class of securities of such issuer, for which purposes all
indebtedness of an issuer shall be deemed a single class and all preferred stock
of an issuer shall be deemed a single class, except that futures or option
contracts shall not be subject to this restriction. The Fund may purchase
securities of other investment companies without regard to such limitation to
the extent permitted by (i) the

-5-
<PAGE>

1940 Act, as amended from time to time, (ii) the rules and regulations
promulgated by the SEC under the 1940 Act, as amended from time to time, or
(iii) an exemption or other relief from the provisions of the 1940 Act.

(9) With respect to 75% of its assets, invest more than 5% of its total assets
in the securities (excluding U.S. government securities) of any one issuer;
except that the Fund may purchase securities of other investment companies
without regard to such limitation to the extent permitted by (i) the 1940 Act,
as amended from time to time, (ii) the rules and regulations promulgated by the
SEC under the 1940 Act, as amended from time to time, or (iii) an exemption or
other relief from the provisions of the 1940 Act.

(10) Purchase or retain in the Fund's portfolio any securities issued by an
issuer any of whose officers, directors, trustees or security holders is an
officer or Trustee of the Trust, or is an officer or partner of AGAM or the
Subadvisor, if after the purchase of the securities of such issuer for the Fund
one or more of such persons owns beneficially more than 1/2 of 1% of the shares
or securities, or both, all taken at market value, of such issuer, and such
persons owning more than 1/2 of 1% of such shares or securities together own
beneficially more than 5% of such shares or securities, or both, all taken at
market value.

(11) Invest more than 5% of the Fund's net assets in warrants (valued at the
lower of cost or market) (other than warrants acquired by the Fund as part of a
unit or attached to securities at the time of purchase), but not more than 2% of
the Fund's net assets may be invested in warrants not listed on the New York
Stock Exchange Inc. (the "NYSE") or the American Stock Exchange.

(12) Make short sales of securities or maintain a short position, unless at all
times when a short position is open, it owns an equal amount of such securities
or securities convertible into or exchangeable without payment of any further
consideration, for securities of the same issue and equal in amount to, the
securities sold short and unless not more than 10% of the Fund's net assets
(taken at market value) is represented by such securities, or securities
convertible into or exchangeable for such securities, at any one time. The Fund
has no current intention to engage in short selling.

(13) Write puts and calls on securities unless each of the following conditions
are met: (a) the security underlying the put or call is within the investment
policies of the Fund and the option is issued by the Options Clearing
Corporation, except for put and call options issued by non-U.S. entities or
listed on non-U.S. securities or commodities exchanges: (b) the aggregate value
of the obligations underlying the puts determined as of the date the options are
sold shall not exceed 50% of the Fund's net assets; (c) the securities subject
to the exercise of the call written by the Fund must be owned by the Fund at the
time the call is sold and must continue to be owned by the Fund until the call
has been exercised, has lapsed, or the Fund has purchased a closing call, and
such purchase has been confirmed, thereby extinguishing the Fund's obligation to
deliver securities pursuant to the call it has sold: and (d) at the time a put
is written, the Fund establishes a segregated account with its custodian
consisting of cash or short-term U.S. government

-6-
<PAGE>

securities equal in value to the amount the Fund will be obligated to pay upon
exercise of the put (this account must be maintained until the put is exercised,
has expired, or the Fund has purchased a closing put, which is a put of the same
series as the one previously written).

(14) Buy and sell puts and calls on securities, stock index futures or options
on stock index futures, or financial futures or options on financial futures
unless such options are written by other persons and: (a) the options or futures
are offered through the facilities of a national securities association or are
listed on a national securities or commodities exchange, except for put and call
options issued by non-U.S. entities or listed on non-U.S. securities or
commodities exchanges; (b) the aggregate premiums paid on all such options which
are held at any time do not exceed 20% of the Fund's total net assets; and (c)
the aggregate margin deposits required on all such futures or options thereon
held at any time do not exceed 5% of the Fund's total assets.

(15) Invest in securities issued by other investment companies except as part of
a merger, reorganization or other acquisition and except to the extent permitted
(i) by the 1940 Act, as amended from time to time, (ii) the rules and
regulations promulgated by the SEC under the 1940 Act, as amended from time to
time, or (iii) an exemption or other relief from the provisions of the 1940 Act.

C. As a matter of fundamental policy, the Small Cap Index Fund may not:

(2) Underwrite securities issued by other persons except insofar as the Trust
(or the Fund) may technically be deemed an underwriter under the 1933 Act in
selling a portfolio security.

-7-
<PAGE>

(4) Purchase or sell real estate (including limited partnership interests but
excluding securities secured by real estate or interests therein), interests in
oil, gas or mineral leases, commodities or commodity contracts (except futures
and option contracts) in the ordinary course of business (except that the Trust
may hold and sell, for the Fund's portfolio, real estate acquired as a result of
the Fund's ownership of securities). This limitation excludes shares of other
open-end investment companies owned by the Fund but includes the Fund's pro rata
portion of the securities and other assets owned by any such company.

(5) Concentrate its investments in any particular industry (excluding U.S.
Government securities), but if it is deemed appropriate for the achievement of a
Fund's investment objective(s), up to 25% of its total assets may be invested in
any one industry, provided, however, that this limitation excludes shares of
other open-end investment companies owned by the Fund but includes the Fund's
pro rata portion of the securities and other assets owned by any such company.

As a matter of non-fundamental policy, the Small Cap Index Fund may not:

(1) Pledge, mortgage or hypothecate for any purpose in excess of 10% of the
Fund's total assets (taken at market value), provided that collateral
arrangements with respect to options and futures, including deposits of initial
deposit and variation margin, and reverse repurchase agreements are not
considered a pledge of assets for purposes of this restriction.

(3) Sell securities it does not own such that the dollar amount of such short
sales at any one time exceeds 25% of the net equity of the Fund, and the value
of securities of any one issuer in which the Fund is short exceeds the lesser of
2.0% of the value of the Fund's net assets or 2.0% of the securities of any
class of any U.S. issuer and, provided that short sales may be made only in
those securities which are fully listed on a national securities exchange or a
foreign exchange (This provision does not include the sale of securities of the
Fund contemporaneously owns or

-8-
<PAGE>

has the right to obtain securities equivalent in kind and amount to those sold,
i.e., short sales against the box.) (The Fund has no current intention to engage
in short selling).

(4) Invest for the purpose of exercising control or management; except that the
Fund may purchase securities of other investment companies without regard to
such limitation to the extent permitted by (i) the 1940 Act, as amended from
time to time, (iii) the rules and regulations promulgated by the SEC under the
1940 Act, as amended from time to time, or (iii) an exemption or other relief
from the provisions of the 1940 Act.

(5) Invest more than 10% of the Fund's total assets (taken at the greater of
cost or market value) in securities that are restricted as to resale under the
1933 Act (other than Rule 144A securities deemed liquid by the Fund's Board of
Trustees).

(6) Invest more than 15% of the Fund's net assets (taken at the greater of cost
or market value) in securities that are illiquid or not readily marketable not
including (a) Rule 144A securities that have been determined to be liquid by the
Board of Trustees; and (b) commercial paper that is sold under section 4(2) of
the 1933 Act which: (i) is not traded flat or in default as to interest or
principal; and (ii) is rated in one of the two highest categories by at least
two nationally recognized statistical rating organizations and the Board of
Trustees have determined the commercial paper to be liquid; or (iii) is rated in
one of the two highest categories by one nationally recognized statistical
rating agency and the Board of Trustees have determined that the commercial
paper is equivalent quality and is liquid.

(7) Invest more than 5% of the Fund's total assets in securities issued by
issuers which (including predecessors) have been in operation less than three
years.

(9) Invest more than 5% of its total assets in the securities (excluding U.S.
government securities) of any one issuer; except that the Fund may purchase
securities of other investment companies without regard to such limitation to
the extent permitted by (i) the 1940 Act, as amended from time to time, (ii) the
rules and regulations promulgated by the SEC under the 1940 Act, as amended from
time to time, or (iii) an exemption or other relief from the provisions of the
1940 Act.

-9-
<PAGE>

(10) Invest in securities issued by an issuer any of whose officers, directors,
trustees or security holders is an officer or Trustee of the Trust, or is an
officer or partner of AGAM or of the Subadvisor, if after the purchase of the
securities of such issuer for the Fund one or more of such persons owns
beneficially more than 1/2 of 1% of the shares or securities, or both, all taken
at market value, of such issuer, and such persons owning more than 1/2 of 1% of
such shares or securities together own beneficially more than 5% of such shares
or securities, or both, all taken at market value.

(11) Invest in warrants (other than warrants acquired by the Fund as part of a
unit or attached to securities at the time of purchase) if, as a result, the
investments (valued at the lower of cost or market) would exceed 5% of the value
of the Fund's net assets or if, as a result, more than 2% of the Fund's net
assets would be invested in warrants not listed on a recognized United States or
foreign stock exchange, to the extent permitted by applicable state securities
laws.

(12) Write puts and calls on securities unless each of the following conditions
are met: (a) the security underlying the put or call is within the Investment
Practices of the Fund and the option is issued by the Options Clearing
Corporation, except for put and call options issued by non-U.S. entities or
listed on non-U.S. securities or commodities exchanges; (b) the aggregate value
of the obligations underlying the puts determined as of the date the options are
sold shall not exceed 5% of the Fund's net assets; (c) the securities subject to
the exercise of the call written by the Fund must be owned by the Fund at the
time the call is sold and must continue to be owned by the Fund until the call
has been exercised, has lapsed, or the Fund has purchased a closing call, and
such purchase has been confirmed, thereby extinguishing the Fund's obligation to
deliver securities pursuant to the call it has sold; and (d) at the time a put
is written, the Fund establishes a segregated account with its custodian
consisting of cash or short-term U.S. government securities equal in value to
the amount the Fund will be obligated to pay upon exercise of the put (this
account must be maintained until the put is exercised, has expired, or the Fund
has purchased a closing put, which is a put of the same series as the one
previously written).

(13) Buy and sell puts and calls on securities, stock index futures or options
on stock index futures, or financial futures or options on financial futures
unless such options are written by other persons and: (a) the options or futures
are offered through the facilities of a national securities association or are
listed on a national securities or commodities exchange, except for put and call
options issued by non-U.S. entities or listed on non-U.S. securities or
commodities exchanges; (b) the aggregate premiums paid on all, such options
which are held at any time do not exceed 20% of the Fund's total net assets; and
(c) the aggregate margin deposits required on all such or options thereon held
at any time do not exceed 5% of the Fund's total assets.

(14) Invest in securities issued by other investment companies except as part of
a merger, reorganization or other acquisition and except to the extent permitted
(i) by the 1940 Act, as amended from time to time, (ii) the rules and
regulations promulgated by the SEC under the 1940 Act, as amended from time to
time, or (iii) an exemption or other relief from the provisions of the 1940 Act.

-10-
<PAGE>

D. As a matter of fundamental policy, the Socially Responsible Fund may not:

(1) Invest more than 5% of the value of its total assets in the securities of
any one issuer or purchase more than 10% of the outstanding voting securities,
or any other class of securities, of any one issuer; except that the Fund may
purchase securities of other investment companies without regard to such
limitation to the extent permitted by (i) the 1940 Act, as amended from time to
time, (ii) the rules and regulations promulgated by the SEC under the 1940 Act,
as amended from time to time, or (iii) an exemption or other relief from the
provisions of the 1940 Act. For purposes of this restriction, all outstanding
debt securities of an issuer are considered as one class, and all preferred
stock of an issuer is considered as one class. This restriction does not apply
to obligations issued or guaranteed by the U.S. Government, its agencies, or
instrumentalities. As a matter of operating policy, the Trust will not consider
repurchase agreements subject to the 5% limitation if the collateral underlying
the repurchase agreements are U.S. Government securities.

(2) (a) Issue senior securities except in connection with investments in options
and futures contracts; or (b) borrow money, enter into reverse repurchase
agreements, or employ similar investment techniques, and pledge its assets in
connection therewith, except to the extent permitted by applicable law, and
provided that the Fund will not purchase additional securities if borrowings
exceed 5% of total assets.

(3) Acquire real estate or real estate contracts, although the Fund may acquire
obligations that are secured by real estate or securities issued by companies
investing in real estate, such as real estate investment trusts.

(4) Underwrite securities of other issuers except where the sale of restricted
portfolio securities constitutes an underwriting under the federal securities
laws.

(5) Lend money, except by purchasing debt obligations in which a Fund may invest
consistent with its investment objective(s) and policies or by purchasing
securities subject to repurchase agreements.

(6) Purchase or sell commodities or commodities contracts. This restriction
shall not prohibit the Fund, subject to restrictions described in the Prospectus
and elsewhere in this Statement of Additional Information, from purchasing,
selling or entering into futures contracts, options on futures contracts,
foreign currency forward contracts, foreign currency options, or any interest
rate, securities-related or foreign currency-related hedging instruments,
including swap agreements and other derivative instruments, subject to
compliance with any applicable provisions of the federal securities or
commodities laws.

(7) Lend its portfolio securities to broker-dealers and other financial
institutions in an amount in excess of 33 1/3% of the value of the Fund's total
assets.

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<PAGE>

(8) Enter into financial futures contracts (by exercise of any option or
otherwise) or acquire any options thereon, if, immediately thereafter, the total
of the initial margin deposits required with respect to all open futures
positions at the time such positions were established plus the sum of the
premiums paid for all unexpired options on futures contracts would exceed 5% of
the value of its total assets.

(9) Invest more than 25% of the value of its total assets in the securities of
issuers primarily engaged in any one industry (excluding the U.S. Government or
any of its agencies or instrumentalities), provided, however, that this
limitation excludes shares of other open-end investment companies owned by the
Fund but includes the Fund's pro rata portion of the securities and other assets
owned by any such company.

As a matter of non-fundamental policy, the Socially Responsible Fund may
not:

(1) Invest more than 10% of the Fund's net assets in illiquid and restricted
securities.

(2) Invest in securities issued by other investment companies except as part of
a merger, reorganization or other acquisition and except to the extent permitted
by (i) the 1940 Act, as amended from time to time, (ii) the rules and
regulations promulgated by the SEC under the 1940 Act, as amended from time to
time, or (iii) an exemption or other relief from the provisions of the 1940 Act.

(3) Acquire securities for the purpose of influencing the management of, or
exercising control over, the issuer; except that the Fund may purchase
securities of other investment companies without regard to such limitation to
the extent permitted by (i) the 1940 Act, as amended from time to time, (ii) the
rules and regulations promulgated by the SEC under the 1940 Act, as amended from
time to time, or (iii) an exemption or other relief from the provisions of the
1940 Act.

(4) Effect short sales of securities or purchase securities on margin, except in
connection with investment in options and futures contracts. The Fund may use
short-term credits when necessary to clear transactions.

E. As a matter of fundamental policy, the High Yield Bond Fund may not:

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<PAGE>

considered as one class, and all preferred stock of an issuer is considered as
one class. This restriction does not apply to obligations issued or guaranteed
by the U.S. Government, its agencies, or instrumentalities or securities issued
by state or municipal governments and their political subdivisions. As a matter
of operating policy, the Trust will not consider repurchase agreements subject
to the 5% limitation if the collateral underlying the repurchase agreements are
U.S. Government securities.

(2) (a) Issue senior securities except in connection with investments in options
and futures contracts; or (b) borrow from banks or enter into reverse repurchase
agreements, or employ similar investment techniques, and pledge its assets in
connection therewith, unless immediately after each borrowing there is asset
coverage of 300%.

(3) Acquire real estate or real estate contracts, although a Fund may acquire
obligations that are secured by real estate or securities issued by companies
investing in real estate, such as real estate investment trusts.

(4) Underwrite securities of other issuers except where the sale of restricted
portfolio securities constitutes an underwriting under the federal securities
laws.

(5) Lend money, except by purchasing debt obligations in which a Fund may invest
consistent with its investment objective(s) and policies or by purchasing
securities subject to repurchase agreements.

(7) Lend its portfolio securities to broker-dealers and other financial
institutions in an amount in excess of 33 1/3% of the value of a Fund's total
assets.

(8) Invest more than 25% of its total assets in issuers primarily engaged in a
single industry (excluding the U.S. Government or any of its agencies or
instrumentalities, provided, however, that this limitation excludes shares of
other open-end investment companies owned by a Fund but includes a Fund's pro
rata portion of the securities and other assets owned by any such company.

As a matter of non-fundamental policy, the High Yield Bond Fund may not:

(1) Invest more than 15% of its net assets in illiquid and restricted
securities.

-13-
<PAGE>

(3) Acquire securities for the purpose of influencing the management of, or
exercising control over, the issuer; except that a Fund may purchase securities
of other investment companies without regard to such limitation to the extent
permitted by (i) the 1940 Act, as amended from time to time, (ii) the rules and
regulations promulgated by the SEC under the 1940 Act, as amended from time to
time, or (iii) an exemption or other relief from the provisions of the 1940 Act.

(4) Effect short sales of securities or purchase securities on margin, except in
connection with investment in options and futures contracts. A Fund may use
short-term credits when necessary to clear transactions.

F. As a matter of fundamental policy, the Conservative Growth Lifestyle Fund,
the Aggressive Growth Lifestyle Fund and the Moderate Growth Lifestyle Fund may
not:

(1) Issue senior securities.

(2) Borrow money, except to the extent permitted by applicable law, and provided
that the Fund may not purchase additional securities if borrowings exceed 5% of
total assets.

(3) Underwrite the securities of other issuers.

(4) Purchase real estate or real estate mortgage loans, although the underlying
mutual funds in which a Fund will invest may purchase marketable securities of
companies which deal in real estate, real estate mortgage loans or interests
therein.

(5) Purchase or sell commodities or commodity contracts.

(6) Make loans except by purchasing bonds, debentures or similar obligations
which are either publicly distributed or customarily purchased by institutional
investors.

(7) Invest more than 25% of its assets in any one industry, other than Funds
that are part of the Trust.

As a matter of non-fundamental policy, the Aggressive Growth Lifestyle
Fund, the Moderate Growth Lifestyle Fund and the Conservative Growth Lifestyle
Fund may not:

-14-
<PAGE>

(1) Purchase any securities on margin, make short sales of securities or
purchase or sell puts and calls, or combinations thereof.

(2) Invest directly in oil, gas, or other mineral exploration or development
programs; provided, however, that the underlying mutual funds in which the Fund
will invest may purchase the securities of companies engaged in such activities.

(3) Purchase or retain any security other than shares of the underlying Trust
Funds if (i) one or more officers or trustees of the Trust individually own or
would own, directly or beneficially, more than 1/2 of 1 percent of the
securities of such issuer and (ii) in the aggregate such persons own or would
own more than 5% of such securities.

(4) Invest in companies for the purpose of exercising control of management.

G. As a matter of fundamental policy, the Municipal Money Market Fund may not:

(1) Purchase the securities of any issuer (except the U.S. Government, its
agencies or instrumentalities, or securities which are backed by the full faith
and credit of the U.S. or securities issued by state or municipal governments
and their political subdivisions) if, as a result, more than 5% of its total
assets would be invested in the securities of such issuer or more than 10% of
the outstanding voting securities of any class of any issuer would be held by
the Fund. The Fund may purchase securities of other investment companies without
regard to such limitation to the extent permitted by (i) the 1940 Act, as
amended from time to time, (ii) the rules and regulations promulgated by the SEC
under the 1940 Act, as amended from time to time, or (iii) an exemption or other
relief from the provisions of the 1940 Act.

(2) Borrow money, except from a bank for temporary or emergency purposes and not
for investment purposes, and then in an amount not exceeding 10% of the value of
the Fund's total assets at the time of borrowing. (No new investments will be
made by the Fund while any outstanding borrowings exceed 5% of its total
assets.) Secured temporary borrowings may take the form of reverse repurchase
agreements, pursuant to which the Fund would sell portfolio securities for cash
and simultaneously agree to repurchase them at a specified date for the same
amount of cash plus an interest component.

(3) Underwrite any issue of securities, except to the extent that the purchase
of municipal obligations in accordance with the Fund's investment objectives,
policies, and restrictions, either directly from the issuer, or from an
underwriter for an issuer, may be deemed to be underwriting.

(4) Purchase or sell real estate, but this shall not prevent the Fund from
investing in municipal fixed income securities secured by real estate or
interests therein.

-15-
<PAGE>

(5) Purchase or sell commodities or commodity contracts or invest in oil, gas or
other mineral exploration or development programs.

(6) Make loans, except (i) by the purchase of a portion of an issue of debt
securities in accordance with its investment objectives, policies, and
restrictions, (ii) by engaging in repurchase transactions, and (iii) by making
loans of portfolio securities not in excess of 10% of the value of the Fund's
total assets.

(7) Write, purchase or sell puts, calls, or combinations thereof, except that it
may obtain rights to resell municipal bonds and notes.

(8) Purchase securities (other than municipal bonds, notes and other fixed
income securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities) if, as a result, more than 25% of total Fund assets would be
invested in any one industry.

As a matter of non-fundamental policy, the Municipal Money Market Fund may
not:

(1) Pledge, mortgage, or hypothecate its assets, except that, to secure
borrowings permitted by subparagraph (2) above, it may pledge securities having
a market value at the time of pledge not exceeding 10% of the value of the
Fund's total assets.

(2) Invest more than 10% of the Fund's net assets in illiquid or restricted
securities.

(3) Make short sales of securities or purchase any securities on margin, except
for such short-term credits as are necessary for the clearance of transactions.

(4) Purchase or retain the securities of any issuer other than the securities of
the Fund, if, to the Fund's knowledge, those Trustees and officers of the Trust,
or of the investment manager, who individually own beneficially more than 1/2 of
1% of the outstanding securities of such issuer together own beneficially more
than 5% of such outstanding securities.

(5) Invest for the purpose of exercising control or management of another
company.

(6) Invest in securities issued by other investment companies except as part of
a merger, reorganization or other acquisition and except to the extent permitted
(i) by the 1940 Act, as amended from time to time, (ii) the rules and
regulations promulgated by the SEC under the 1940 Act, as amended from time to
time, or (iii) an exemption or other relief from the provisions of the 1940 Act.

(7) Purchase an industrial revenue bond if, as a result of such purchase, more
than 5% of total Fund assets would be invested in industrial revenue bonds where
the payment of principal and interest are the responsibility of companies with
less than three years of operating history.

-16-
<PAGE>

For the purposes of the investment limitations applicable to the Municipal
Money Market Fund, the identification of the issuer of a municipal obligation
depends on the terms and conditions of the obligation. If the assets and
revenues of an agency, authority, instrumentality, or other political
subdivision are separate from those of the government creating the subdivision
and the obligation is backed only by the assets and revenues of the subdivision,
such subdivision would be regarded as the sole issuer. Similarly, in the case of
a private activity bond, if the bond is backed only by the assets and revenues
of the non-governmental user, such non-governmental user would be regarded as
the sole issuer. If in either case the creating government or another entity
guarantees an obligation, the guarantee would be considered a separate security
and treated as an issue of such government or entity.

H. As a matter of fundamental policy, the Science & Technology Fund may not:

(1) Make any investment inconsistent with its classification as a diversified
investment company under the 1940 Act.

(2) Invest 25% or more of its total assets in the securities of one or more
issuers conducting their principal business activities in the same industry
(excluding the U.S. Government or any of its agencies or instrumentalities),
provided, however, that this limitation excludes shares of other open-end
investment companies owned by the Fund but includes the Fund's pro rata portion
of the securities and other assets owned by any such company.

(3) Issue senior securities or borrow money, except from banks or other persons
for non-leveraging, temporary or emergency purposes, and then only in an amount
up to 33 1/3% of the value of its total assets or as permitted by law and except
by engaging in reverse repurchase agreements, where allowed. In order to secure
any permitted borrowings and reverse repurchase agreements under this section,
the Fund may pledge, mortgage or hypothecate its assets.

(4) Make loans, although the Fund may lend portfolio securities, purchase of
money market instruments and repurchase agreements or bonds, debentures or other
debt securities, or as permitted by law. The purchase of all or a portion of an
issue of publicly distributed or privately placed debt obligations and purchase
debt in accordance with the Fund's investment objective, policies and
restrictions, shall not constitute the making of a loan.

(5) Underwrite the securities of other issuers, except as allowed by law or to
the extent that the purchase of obligations in accordance with its investment
objective and policies, either directly from the issuer, or from an underwriter
for an issuer, may be deemed an underwriting.

(6) Invest directly in commodities or real estate, unless acquired as a result
of ownership of securities or other instruments, or as permitted by law.
However, the Fund may invest in securities which are secured by real estate or
real estate mortgages and securities of issuers which invest or deal in
commodities, commodity futures, real estate or real estate mortgages.

-17-
<PAGE>

As a matter of non-fundamental policy, the Science & Technology Fund may not:

(1) Effect short sales of securities or purchase securities on margin, except in
connection with investments in options and futures contracts. Each Fund may use
short-term credits when necessary to clear transactions.

(2) Purchase illiquid securities if more than 15% of the value of its net assets
would be invested in such securities, or as permitted by the 1940 Act.

(3) Enter into reverse repurchase agreements if the aggregate proceeds from
outstanding reverse repurchase agreements, when added to other outstanding
borrowings permitted by the 1940 Act, would exceed 33 1/3% of its total assets.
The Fund does not intend to make any purchases of securities if borrowing
exceeds 5% of its total assets.

(4) Invest in securities issued by other investment companies except as part of
a merger, reorganization or other acquisition and except to the extent permitted
by (i) the 1940 Act, as amended from time to time, (ii) the rules and
regulations promulgated by the SEC under the 1940 Act, as amended from time to
time, or (iii) an exemption or other relief from the provisions of the 1940 Act.

(5) Acquire securities for the purpose of influencing the management of, or
exercising control over, the issuer; except that the Fund may purchase
securities of other investment companies without regard to such limitation to
the extent permitted by (i) the 1940 Act, as amended from time to time, (ii) the
rules and regulations promulgated by the SEC under the 1940 Act, as amended from
time to time, or (iii) an exemption or other relief from the provisions of the
1940 Act.

V. Temporary Defensive Positions. From time to time, the Funds may take
temporary defensive positions that are inconsistent with their principal
investment strategies in attempting to respond to adverse market, economic,
political, or other conditions. If a Fund takes such a temporary defensive
position, it may not achieve its investment objective.

VI. Management of the Trust.

The disclosure under the headings "Management of the Fund" and "Investment
Management Arrangements" in the Statement of Additional Information applies to
the Funds and is incorporated herein by reference.

American General Asset Management Corp. ("AGAM") is the investment adviser for
the Fund. Prior to March 10, 2000, AGAM was known by the name CypressTree
Management Corporation ("CAM"), which name was changed in connection with the
acquisition of CAM by American General Corporation. American General
Corporation is a part of American

-18-
<PAGE>

General Financial Group, a financial services company with approximately $115
billion in assets and over $6 billion in total stockholders equity. American
General Corporation's address is 2929 Allen Parkway, Houston, Texas 77015.

The Trust, AGAM and AGFD have adopted codes of ethics under rule 17j-1 of
the Investment Company Act; the codes permit personnel subject to the codes to
invest, in securities under certain circumstances, in securities that may be
purchased or held by a Fund.

Pursuant to Subadvisory Agreements between AGAM and AGIM, AGAM and
Neuberger Berman Management, Inc. ("NBM"), and AGAM and T. Rowe Price
Associates, Inc. ("T. Rowe Price"), (collectively, the "Subadvisors"), AGAM pays
each of the Subadvisors a monthly subadvisory fee based on the average daily net
assets of the relevant Fund.

For the Mid Cap Value Fund, AGAM pays NBM, a monthly fee computed at the
annual rate of 0.50% of the first $100 million, 0.475% of the next $150 million,
0.45% of the next $250 million, 0.425% of the next $250 million and 0.40% of
average daily net asset values on the excess over $750 million.

For the Municipal Money Market Fund, AGAM pays to AGIM a monthly fee
computed at the annual rate of 0.25% of the first $200 million, 0.20% of the
next $300 million and 0.15% of average daily net asset values on the excess over
$500 million.

For the High Yield Bond Fund, AGAM pays AGIM a monthly fee computed at the
annual rate of 0.45% of the first $200 million, 0.35% of the next $300 million
and 0.30% of average daily net assets over $500 million.

For the Stock Index Fund, AGAM pays AGIM a monthly fee computed at the
annual rate of .020% of the $2 billion and .010% on the excess over $2 billion.

For the Small Cap Index Fund, AGAM pays AGIM a monthly fee computed at the
annual rate of .030% of the first $150,000,000 and .020% on excess over
$150,000,000.

For the Socially Responsible Fund, AGAM pays AGIM a monthly fee computed at
the annual rate of .250%.

For the Aggressive Growth Lifestyle Fund, AGAM pays AGIM a monthly fee
computed at the annual rate of .100%.

For the Moderate Growth Lifestyle Fund, AGAM pays AGIM a monthly fee
computed at the annual rate of .100%.

For the Conservative Growth Lifestyle Fund, AGAM pays AGIM a monthly fee
computed at the annual rate of .100%.

For the Science & Technology Fund, AGAM pays T. Rowe Price a monthly fee
computed at the annual rate of 0.60% on the first $500 million, and 0.55% on the
assets over $500 million.

-19-
<PAGE>

VII. Distribution Plans.

The disclosure under the heading "Distribution Plans" applies to the Class
A, Class B and Class C shares of the Funds and is incorporated herein by
reference.

The Sections "Portfolio Brokerage," "Capital Stock," "Purchase, Redemption
and Pricing," "Performance Information" and "Taxes" apply to the Funds and are
incorporated herein by reference.

-20-
<PAGE>

Item 23. Exhibits
--------

(1) (a) Amended and Restated Agreement and Declaration of Trust dated
February 18, 1994. (8)

(b) Declaration of Trust Amendment -- Establishment and Designation
of Additional Series of Shares for the International Growth and
Income Fund, dated December 28, 1994. (8)

(d) Declaration of Trust Amendment - Establishment and Designation of
Additional Series of Shares for the Growth Equity, International
Small Cap, and Small/Mid Cap Funds dated February 28, 1996. (8)

(e) Declaration of Trust Amendment - Redesignation of Series of
Shares of Beneficial Interest known as the Growth Fund dated
February 28, 1996. (8)

(f) Declaration of Trust Amendment - Redesignation of Series of
Shares of Beneficial Interest known as the Global Growth Fund and
the Asset Allocation Fund dated October 1, 1996. (8)

(g) Declaration of Trust Amendment - Establishment of the Tax-
Sensitive Equity Fund and Emerging Growth Fund series. (10)

(h) Declaration of Trust Amendment - Establishment of 11 additional
series of shares and 2 additional classes of shares. (14)

(2) By-laws of North American Funds -- previously filed as Exhibit (b)(2)
to North American Funds initial registration statement on Form N-1A
(File No. 33-27958) dated April 5, 1989. (10)

(3) See Articles 4 and 5 of the North American Funds Amended and Restated
Declaration of Trust; and see Articles 2 and 9 of the By-laws of North
American Funds.

(4) (a) Interim Investment Advisory Agreement dated March 10, 2000
between North American Funds and American General Asset
Management Corp. (14)

(b) Interim Subadvisory Agreement between American General Asset
Management Corp. and American General Investment Management, L.P.
dated March 10, 2000. (14)

1
<PAGE>

(c) Subadvisory Agreement between American General Asset Management
Corp. and Wellington Management Company, dated March 10, 2000.
(9)(14)

(d) Subadvisory Agreement between American General Asset Management
Corp. and Morgan Stanley Dean Witter Investment Management Inc.
dated March 10, 2000. (9)(14)

(e) Subadvisory Agreement between American General Asset Management
Corp. and INVESCO Funds Group, Inc. dated March 10, 2000.
(9)(14)

(f) Subadvisory Agreement between American General Asset Management
Corp. and Founders Asset Management LLC dated March 10, 2000.
(9)(14)

(g) (Reserved)

(h) Subadvisory Agreement between American General Asset Management
Corp. and T. Rowe Price Associates, Inc. dated March 10,
2000. (9)(14)

(i) Subadvisory Agreement between American General Asset Management
Corp. and Neuberger Bornan Management, Inc. dated March 10,
2000. (9)(14)

(j) (Reserved)

(k) Subadvisory Agreement between American General Asset Management
Corp. and Credit Suisse Asset Management, LLC dated March 10,
2000. (10)(14)

2
<PAGE>

(5) (a) Distribution Agreement Between North American Funds and American
General Funds Distributors, Inc. dated March 10, 2000. (14)

(b) Most Recent Form of Dealer Agreement Among American General Funds
Distributors, Inc. and Selected Broker-Dealers. (14)

(6) Not applicable.

(7) (a) Custodian Agreement Between North American Funds and Boston Safe
Deposit and Trust Company. (1)

(b) Custodian Agreement Between North American Funds and State Street
Bank and Trust Company. (1)

(d) Forms of Sub-Custodian Agreements Between State Street Bank and
Trust Company and the Bank of New York, Chemical Bank and Bankers
Trust. (5)

(8) Not applicable.

(9) (a) Opinion of Ruth Ann Fleming, Esq. (10)

3
<PAGE>

(b) Opinion of Christina M. Perrino, Esq. (10)

(d) Opinion of Christina M. Perrino, Esq. (10)

(e) Opinion of Jeffrey M. Ulness, Esq. (10)

(f) Opinion of Tracy A. Kane, Esq. (10)

(g) Opinion of Counsel of Betsy Anne Seel, Esq. (10)

(h) Opinion of Counsel of Betsy Anne Seel, Esq. (6)

(i) Opinion of Ropes & Gray dated December 18, 1997 regarding the
Tax-Sensitive Equity Fund and the Emerging Growth Fund. (10)

(j) Form of Opinion of Ropes & Gray regarding 10 new series of shares
of the Trust. (14)

(10) Consent of PricewaterhouseCoopers LLP (13)

(11) Not applicable.

(12) Letter Containing Investment Undertaking of North American Life
Assurance Company. (3)

(13) (a) Amended and Restated Rule 12b-1 Distribution Plan for Class A
shares dated September 26, 1997. (9)

(b) Amended and Restated Rule 12b-1 Distribution Plan for Class B
shares dated September 26, 1997. (9)

(14) Amended and Restated Rule 18f-3 plan dated February 27, 2000. (14)

(15) Code of Ethics (14).

(16) (a) Power of Attorney. (14)

(b) Power of Attorney. (14)

4
<PAGE>

________________________________________________________________________________

(1) Previously filed as Exhibit to North American Fund's initial registration
statement on Form N-1A No. 33-27958) dated November 1, 1991.

(2) Previously filed as Exhibit to North American Fund's Post-Effective
Amendment No. 1 on Form N-1A (File No. 33-27958) dated December 29, 1989.

(3) Previously filed as Exhibit to North American Funds' Post-Effective
Amendment No. 2 on Form N-1A (File No. 33-27958) dated August 29, 1990.

(4) Previously filed as Exhibit to North American Fund's Post-Effective
Amendment No. 7 on Form N-1A (File No. 33-27958) dated November 1, 1991.

(5) Previously filed as Exhibit to North American Funds' Post-Effective
Amendment No. 17 on Form N-1A (File No. 33-27958) dated April 1, 1994.

(6) Previously filed as Exhibit to North American Funds Post effective
Amendment No. 21 on Form N1-A (File No. 33-27958) dated December 15, 1995.

(7) Previously filed as Exhibit to North American Funds Post-Effective
Amendment No. 22 on Form N-1A (File No. 33-27958) dated February 23, 1996.

(8) Previously filed as Exhibit to North American Funds' Post-Effective
Amendment No. 25 on Form N-1A dated December 30, 1996.

(9) Previously filed as Exhibit to North American Funds' Post-Effective
Amendment No. 26 on Form N-1A (File No. 33-27958) dated October 17, 1997.

(10) Previously filed as Exhibit to North American Funds' Post-Effective
Amendment No. 27 on Form N-1A (File No. 33-27958) dated December 30, 1997.

(11) Previously filed as Exhibit to North American Funds' Post-Effective
Amendment No. 28 on Form N-1A (File No. 33-27958) dated December 18, 1998.

(12) Previously filed as Exhibit to North American Funds' Post-Effective
Amendment No. 29 on Form N-1A (File No. 33-27958) dated March 1, 1999.

(13) Previously filed as Exhibit to North American Funds' Post-Effective
Amendment No. 31 on Form N-1A (File No. 33-27958) dated March 2, 2000.

(14) Filed herewith.

5
<PAGE>

Item 24. Persons Controlled by or Under Common Control with Registrant
-------------------------------------------------------------

No person is directly or indirectly controlled by the Registrant. With
respect to the portfolios of the Registrant, no person controls the Registrant
by virtue of share ownership in the Registrant.

While the Registrant disclaims any such control relationship, it may be
deemed to be controlled by its investment adviser by virtue of the advisory
relationship. In such case, the Registrant and its adviser, American General
Asset Management Corp. ("AGAM"), a Delaware corporation, may be deemed to be
under common control of the adviser's parent corporation. AGAM is a wholly-owned
subsidiary of American General Corporation ("American General"), a Texas
corporation which is based in Houston, Texas. American General is also the
parent company of American General Funds Distributors, Inc, a Delaware
corporation and the Registrant's distributor. American General is also the
parent company of American General Investment Management, L.P., the subadviser
to several of the Funds.

Item 25. Indemnification
---------------

Sections 6.4 and 6.5 of the Agreement and Declaration of Trust of the
Registrant provide that the Registrant shall indemnify each of its Trustees and
officers against all liabilities, including but not limited to amounts paid in
satisfaction of judgments, in compromise or as fines and penalties, and against
all expenses, including but not limited to accountants and counsel fees,
reasonably incurred in connection with the defense or disposition of any action,
suit or other proceeding, whether civil or criminal, before any court or
administrative or legislative body, in which such trustee or officer may be or
may have been involved as a party or otherwise or with which such person may be
or may have been threatened, while in office or thereafter, by reason of being
or having been such a trustee or officer, except that indemnification shall not
be provided if it shall have been finally adjudicated in a decision on the
merits by the court or other body before which the proceeding was brought that
such trustee or officer (i) did not act in good faith in the reasonable belief
that his or her action was in the best interests of the Registrant or (ii) is

6
<PAGE>

liable to the Registrant or its shareholders by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of such person's office.

Registrant has previously provided the undertaking set forth in Rule 481
under the Securities Act of 1933.

Item 26. Business and Other Connections of Investment Adviser
----------------------------------------------------

See "Management of the Fund" in the Prospectus and Statement of Additional
Information and "Investment Management Arrangements" in the Statement of
Additional Information for information regarding the business of the Adviser and
each of the Subadvisors. For information as to the business, profession,
vocation or employment of a substantial nature of each director, officer or
partner of the Adviser and each of the Subadvisors, reference is made to the
respective Form ADV, as amended, filed under the Investment Advisers Act of
1940, each of which is herein incorporated by reference.

Item 27. Principal Underwriters
----------------------

a. American General Funds Distributors, Inc., the Registrant's principal
underwriter, does not serve as principal underwriter, depositor or
investment adviser to any other investment company.

b. Officers and Directors of Principal Underwriter

Positions And
Name and Principal Positions and Offices Offices with
Business Address with Underwriter Registrant
- ------------------------ ----------------------- -------------------
Alice T. Kane* President Chairman &
President

Joseph T. Grause, Jr.* Vice President & Treasurer
Treasurer

John I. Fitzgerald* General Counsel & Secretary
Chief Financial Officer

Paul Foley* Vice President Assistant Secretary

Leana D. Vacirca* Secretary None

7
<PAGE>

* c/o American General Asset Management Corp.
286 Congress Street
Boston, MA 02110

c. Not applicable.

Item 28. Location of Accounts and Records
--------------------------------

All accounts, books and other documents required to be maintained under
Section 31(a) of the Investment Company Act of 1940 are kept by American General
Asset Management Corp. the Registrant's investment adviser, at its offices at
286 Congress Street, Boston, Massachusetts 02210; by Credid Suisse Asset
Management, Inc. the investment subadvisor to the Small Cap Growth Fund, at its
offices at 466 Lexington Avenue., New York, New York, 10017-3147; by Wellington
Management Company, LLP, the investment subadvisor to the Growth & Income Fund,
Tax-Sensitive Equity Fund and the Equity-Income Fund at its offices at 75
State Street, Boston, Massachusetts 02109; by Founders Asset Management, LLC,
the investment adviser to the International Small Cap, Large Cap Growth Fund and
Growth Equity Fund, at its offices at 2930 East Third Avenue, Denver, Colorado
80206; by the Registrant at its principal business office located at 286
Congress Street, Boston, Massachusetts 02110; by T. Rowe Price Associates, Inc.,
the investment subadvisor to the Science & Technology Fund, at its offices at
100 East Pratt Street, Baltimore, Maryland 21202; by Morgan Stanley Dean Witter
Investment Management Inc., the investment subadvisor of the International
Equity Fund, at its offices at 1221 Avenue of the Americas, New York, New York
10020; by INVESCO Fund Group, Inc., 1166 Avenue of the Americas, New York, N.Y.
10036, the investment subadviser to the Balanced Fund and the Mid Cap Growth
Fund; by Neuberger Berman Management, Inc., 805 Third Avenue, New York, N.Y.
10158, investment subadviser to the Mid Cap Value Fund; by American General
Investment Management, L.P., 2929 Allen Parkway, Houston, Texas 77015, the
investment subadviser to the Strategic Income Fund, the Municipal Bond Fund, the
Money Market Fund, the Core Bond Fund, the Stock Index Fund, the Small Cap Index
Fund, the Socially Responsible Fund, the High Yield Bond Fund, the Aggressive
Growth Lifestyle Fund, the Moderate Growth Lifestyle Fund, the Conservative
Growth Lifestyle Fund, the Municipal Money Market Fund, and the U.S. Government
Securities Fund; by Boston Safe Deposit and Trust Company, custodian for the
Global Growth Fund's assets, at its offices at One Boston Place, Boston,
Massachusetts 02108; or by State Street Bank and Trust Company, the custodian
and transfer agent for all the other portfolios of the Registrant, at its
offices at 225 Franklin Street, Boston, Massachusetts 02110.

Item 29. Not applicable.

8
<PAGE>

Item 30. The Registrant undertakes to furnish to each person to whom a
prospectus of the Registrant is delivered a copy of the Registrant's latest
annual report to shareholders, upon request and without charge.

9
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended,
and the Investment Company Act of 1940, as amended, North American Funds has
duly caused this Amendment to its Registration Statement to be signed on its
behalf by the undersigned, duly authorized, in the City of Boston, and
Commonwealth of Massachusetts on the 17th day of March, 2000.

NORTH AMERICAN FUNDS
--------------------
Registrant

By: *
-------------------------
Alice T. Kane, President

Attest:

/s/ John I. Fitzgerald
- -----------------------
John I. Fitzgerald
Secretary
<PAGE>

Pursuant to the requirements of the Securities Act of 1933, as amended,
this amended Registration Statement has been signed by the following persons in
the capacities and on the 17th day of March, 2000.

Title
-----

*
- ------------------------------- Trustee
William F. Achtmeyer

*
- ------------------------------- Trustee
Don B. Allen

*
- ------------------------------- Trustee
William F. Devin

*
- ------------------------------- Trustee, Chairman and President
Alice T. Kane

*
- ------------------------------- Trustee
Kenneth J. Lavery

*
- ------------------------------- Assistant Treasurer
Thomas J. Brown (Principal Accounting Officer)
(Principal Financial Officer)

/s/ John I. Fitzgerald
- ------------------------------- *By John I. Fitzgerald
John I. Fitzgerald Attorney-in-fact

-2-
<PAGE>

Exhibit Index

1(h). Declaration of Trust Amendment - Establishment of 11 additional series of
shares and 2 additional classes of shares.

4(a). Interim Investment Advisory Agreement dated March 10, 2000 between North
American Funds and American General Asset Management Corp.

4(b). Interim Subadvisory Agreement between American General Asset Management
Corp. and American General Investment Management, L.P. dated March 10,
2000.

4(c). Subadvisory Agreement between American General Asset Management Corp. and
Wellington Management Company, dated March 10, 2000.

4(d). Subadvisory Agreement between American General Asset Management Corp. and
Morgan Stanley Dean Witter Investment Management Inc. dated March 10,
2000.

4(e). Subadvisory Agreement between American General Asset Management Corp. and
INVESCO Funds Group, Inc. dated March 10, 2000.

4(f). Subadvisory Agreement between American General Asset Management Corp. and
Founders Asset Management LLC dated March 10, 2000.

4(h). Subadvisory Agreement between American General Asset Management Corp. and
T. Rowe Price Associates, Inc. dated March 10, 2000.

4(i). Subadvisory Agreement between American General Asset Management Corp. and
Neuberger Bornan Management, Inc. dated March 10, 2000.

4(k). Subadvisory Agreement between American General Asset Management Corp. and
Credit Suisse Asset Management, LLC dated March 10, 2000.

5(a). Distribution Agreement between North American Funds and American General
Funds Distributors, Inc. dated March 10, 2000.

5(b). Most Recent Form of Dealer Agreement among American General Funds
Distributors, Inc. and Selected Broker-Dealers.

9(j). Form of opinion of Ropes & Gray regarding 10 new series of shares of the
Trust.

14. Amended and Restated Rule 18f-3 plan dated February 27, 2000.

15. Code of Ethics.

16. (a) Power of Attorney.
(b) Power of Attorney.

<PAGE>

NORTH AMERICAN FUNDS

Establishment and Designation
of Additional Series of Shares of Beneficial Interest
($0.001 par value per share)

Re-naming of Certain Series of Shares

Establishment and Designation of Classes of Shares

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

The undersigned, being a majority of the Trustees of North American
Funds (the "Trust"), acting pursuant to Section 4.1(a) of the Amended and
Restated Agreement and Declaration of Trust, dated February 18, 1994 (the
"Declaration of Trust"), hereby establish and designate 11 new Series of Shares
(as defined in the Declaration of Trust), such Series to have the following
special and relative rights:

The 11 new Series of Shares shall be designated the (i) Mid Cap Value
Fund, (ii) Stock Index Fund, (iii) Small Cap Index Fund, (iv) Socially
Responsible Fund, (v) High Yield Bond Fund, (vi) Aggressive Growth Lifestyle
Fund, (vii) Moderate Growth Lifestyle Fund, (viii) Conservative Growth Lifestyle
Fund, (ix) Municipal Money Market Fund, (x) Science & Technology Fund, and (xi)
Capital Appreciation Fund (the "New Funds").

The New Funds shall have the relative rights and preferences described
in Section 4.2 of the Declarations of Trust, provided that the Trustees, in
their absolute discretion, may amend any previously established relative rights
and preferences as they may deem necessary or desirable to enable the Trust to
comply with the Investment Company Act of 1940, as amended, or other applicable
law.

* * *

The following existing Series of Shares are hereby renamed as set forth
in the table below:

Current Name New Name
------------ --------

Growth Equity Fund Large Cap Growth Fund

Small/Mid Cap Fund Mid Cap Growth Fund

Emerging Growth Fund Small Cap Growth Fund

Growth and Income Fund Growth & Income Fund

National Municipal Bond Fund Municipal Bond Fund

Investment Quality Bond Fund Core Bond Fund
<PAGE>

* * *

The undersigned, being a majority of the Trustees of the Trust, acting
pursuant to Section 4.1(b) of the Declaration of Trust, hereby create the
following classes of Shares, within the meaning of Section 4.1(b):

(1) with respect to the New Funds, five classes of Shares designated
Class A Shares, Class B Shares, Class C Shares, Institutional Class I Shares,
and Institutional Class II Shares; and

(2) with respect to the 15 Series of Shares of the Trust existing prior
to the date hereof, two classes of Shares designated Institutional Class I
Shares and Institutional Class II Shares.

Class A Shares, Class B Shares, Class C Shares, Institutional Class I
Shares, and Institutional Class II Shares shall be entitled to all the rights
and preferences accorded to Shares under the Declaration of Trust.

The rights and preferences of Class A Shares, Class B Shares, Class C
Shares, Institutional Class I Shares, and Institutional Class II Shares shall be
established by the Trustees of the Trust in accordance with the Declaration of
Trust and shall be set forth in the current Prospectuses and Statements of
Additional Information of the Trust, as amended from time to time.

-2-
<PAGE>

In witness whereof, the undersigned have executed this instrument in
duplicate original counterparts and have caused a duplicate original to be
lodged among the records of the Trust this 28th day of February, 2000.

/s/ William F. Achtmeyer /s/ Don B. Allen
- ------------------------------- ---------------------------
William F. Achtmeyer Don B. Allen

/s/ William F. Devin /s/ Bradford K. Gallagher
- ------------------------------- ----------------------------
William F. Devin Bradford K. Gallagher

/s/ Kenneth J. Lavery
- -------------------------------
Kenneth J. Lavery

The Declaration of Trust, a copy of which together with all amendments
thereto is on file in the office of the Secretary of The Commonwealth of
Massachusetts, provides that the Declaration of Trust was executed by the
Trustees of the Trust as Trustees and not individually and that the obligations
of the Declaration of Trust are not binding upon any of them or the shareholders
of the Trust individually but are binding only upon the assets belonging to the
Trust, or the particular Series of Shares or class in question, as the case may
be.

-3-

<PAGE>

INTERIM INVESTMENT ADVISORY AGREEMENT

INTERIM INVESTMENT ADVISORY AGREEMENT made as of March 1, 2000, between
North American Funds, a Massachusetts business trust (the "Trust"), and American
General Asset Management Corp., a Delaware corporation (the "Adviser"). In
consideration of the mutual covenants contained herein, the parties agree as
follows:

1. APPOINTMENT OF ADVISER

The Trust hereby appoints the Adviser, subject to the supervision of
the Trustees of the Trust and the terms of this Agreement, as the investment
adviser for each of the portfolios of the Trust specified in Appendix A to this
Agreement as it shall be amended by the Adviser and the Trust from time to time
(the "Funds"). The Adviser accepts such appointment and agrees to render the
services and to assume the obligations set forth in this Agreement commencing on
its effective date. The Adviser will be an independent contractor and will have
no authority to act for or represent the Trust in any way or otherwise be deemed
an agent unless expressly authorized in this Agreement or another writing by the
Trust and Adviser.

2. DUTIES OF THE ADVISER

a. Subject to the general supervision of the Trustees of the Trust and the
terms of this Agreement, the Adviser will at its own expense select,
contract with, and compensate investment subadvisers ("Subadvisers") to
manage the investments and determine the composition of the assets of
the Funds; provided, that any contract with a Subadviser (the
"Subadvisory Agreement") shall be in compliance with and approved as
required by the Investment Company Act of 1940, as amended ("Investment
Company Act"). Subject always to the direction and control of the
Trustees of the Trust, the Adviser will monitor compliance of each
Subadviser with the investment objectives and related investment
policies, as set forth in the Trust's registration statement as filed
with the Securities and Exchange Commission, of any Fund or Funds under
the management of such Subadviser, and review and report to the
Trustees of the Trust on the performance of such Subadviser.

b. The Adviser will oversee the administration of all aspects of the
Trust's business and affairs and in that connection will furnish to the
Trust the following services:

(1) Office and Other Facilities. The Adviser shall furnish to the
---------------------------
Trust office space in the offices of the Adviser or in such
other place as may be agreed upon by the parties hereto from
time to time and such other office facilities, utilities and
office equipment as are necessary for the Trust's operations.

(2) Trustees and Officers. The Adviser agrees to permit
---------------------
individuals who are directors, officers or employees of the
Adviser to serve (if duly elected or appointed) as Trustees or
President, Vice President, Treasurer or Secretary of the
Trust, without remuneration from or other cost to the Trust.

-1-
<PAGE>

(3) Other Personnel. The Adviser shall furnish to the Trust, at
---------------
the Trust's expense, any other personnel necessary for the
operations of the Trust.

(4) Financial, Accounting, and Administrative Services. The
--------------------------------------------------
Adviser shall maintain the existence and records of the Trust;
maintain the registrations and qualifications of Trust shares
under federal and state law; and perform all administrative,
financial, accounting, bookkeeping and recordkeeping functions
of the Trust except for any such functions that may be
performed by a third party pursuant to a custodian, transfer
agency or service agreement executed by the Trust. The Trust
shall reimburse the Adviser for its expenses associated with
all such services, including the compensation and related
personnel expenses and expenses of office space, office
equipment, utilities and miscellaneous office expenses, except
any such expenses directly attributable to officers or
employees of the Adviser who are serving as President, Vice
President, Treasurer or Secretary of the Trust. The Adviser
shall determine the expenses to be reimbursed by the Trust
pursuant to expense allocation procedures established by the
Adviser in accordance with generally accepted accounting
principles.

(5) Liaisons with Agents. The Adviser, at its own expense, shall
--------------------
maintain liaison with the various agents and other persons
employed by the Trust (including the Trust's transfer agent,
custodian, independent accountants and legal counsel) and
assist in the coordination of their activities on behalf of
the Trust. Fees and expenses of such agents and other persons
will be paid by the Trust.

(6) Reports to Trust. The Adviser shall furnish to or place at the
----------------
disposal of the Trust such information, reports, valuations,
analyses and opinions as the Trust may, at any time or from
time to time, reasonably request or as the Adviser may deem
helpful to the Trust, provided that the expenses associated
with any such materials furnished by the Adviser at the
request of the Trust shall be borne by the Trust.

(7) Reports and Other Communications to Trust Shareholders. The
------------------------------------------------------
Adviser shall assist the Trust in developing (but not pay for)
all general shareholder communications including regular
shareholder reports.

3. EXPENSES ASSUMED BY THE TRUST

In addition to paying the advisory fee provided for in Section 4, the
Trust will pay all expenses of its organization, operations and business not
specifically assumed or agreed to be paid by the Adviser as provided in this
Agreement, by a Subadviser as provided in a Subadvisory Agreement, or by the
Distributor as provided in the Distribution Agreement. Without limiting the
generality of the foregoing, the Trust, in addition to certain expenses
described in Section 2 above, shall pay or arrange for the payment of the
following:

-2-
<PAGE>

a. Custody and Accounting Services. All expenses of the transfer, receipt,
-------------------------------
safekeeping, servicing and accounting for the Trust's cash, securities,
and other property, including all charges of depositories, custodians
and other agents, if any;

b. Shareholder Servicing. All expenses of maintaining and servicing
---------------------
shareholder accounts, including all charges of the Trust's transfer,
shareholder recordkeeping, dividend disbursing, redemption, and other
agents, if any;

c. Shareholder Communications. All expenses of preparing, setting in type,
--------------------------
printing, and distributing reports and other communications to
shareholders;

d. Shareholder Meetings. All expenses incidental to holding meetings of
--------------------
Trust shareholders, including the printing of notices
and proxy material, and proxy solicitation therefor;

e. Prospectuses. All expenses of preparing, setting in type, and printing
------------
of annual or more frequent revisions of the Trust's prospectus and
statement of additional information and any supplements thereto and of
mailing them to shareholders;

f. Pricing. All expenses of computing the net asset value per share for
-------
each of the Funds, including the cost of any equipment or services used
for obtaining price quotations and valuing its investment portfolio;

g. Communication Equipment. All charges for equipment or services used for
-----------------------
communication between the Adviser or the Trust and the custodian,
transfer agent or any other agent selected by the Trust;

h. Legal and Accounting Fees and Expenses. All charges for services and
--------------------------------------
expenses of the Trust's legal counsel and independent auditors;

i. Trustees and Officers. Except as expressly provided otherwise in
---------------------
paragraph 2.b.(2), all compensation of Trustees and officers, all
expenses incurred in connection with the service of Trustees and
officers, and all expenses of meetings of the Trustees and Committees
of Trustees;

j. Federal Registration Fees. All fees and expenses of registering and
-------------------------
maintaining the registration of the Trust under the Investment Company
Act and the registration of the Trust's shares under the Securities Act
of 1933, as amended (the "1933 Act"), including all fees and expenses
incurred in connection with the preparation, setting in type, printing
and filing of any registration statement and prospectus under the 1933
Act or the Investment Company Act, and any amendments or supplements
that may be made from time to time;

k. State Registration Fees. All fees and expenses of qualifying and
-----------------------
maintaining qualification of the Trust and of the Trust's shares for
sale under securities laws of various states or jurisdictions, and of
registration and qualification of the Trust under all other laws
applicable to the Trust or its business activities (including
registering the Trust as a broker-dealer, or any officer of the Trust
or any person as agent or salesman of the Trust in any state);

-3-
<PAGE>

l. Issue and Redemption of Trust Shares. All expenses incurred in
------------------------------------
connection with the issue, redemption, and transfer of Trust shares,
including the expense of confirming all share transactions, and of
preparing and transmitting certificates for shares of beneficial
interest in the Trust;

m. Bonding and Insurance. All expenses of bond, liability and other
---------------------
insurance coverage required by law or regulation or deemed advisable by
the Trust's Trustees including, without limitation, such bond,
liability and other insurance expense that may from time to time be
allocated to the Trust in a manner approved by its Trustees;

n. Brokerage Commissions. All brokers' commissions and other charges
---------------------
incident to the purchase, sale, or lending of the Trust's portfolio
securities;

o. Taxes. All taxes or governmental fees payable by or with respect to the
-----
Trust to federal, state, or other governmental agencies, domestic or
foreign, including stamp or other transfer taxes, and all expenses
incurred in the preparation of tax returns;

p. Trade Association Fees. All fees, dues, and other expenses incurred in
----------------------
connection with the Trust's membership in any trade association or

q. Nonrecurring and Extraordinary Expenses. Such nonrecurring expenses as
---------------------------------------
may arise, including the costs of actions, suits, or proceedings to
which the Trust is, or is threatened to be made, a party and the
expenses the Trust may incur as a result of its legal obligation to
provide indemnification to its Trustees, officers, agents and
shareholders.

4. COMPENSATION OF ADVISER

For the services provided, the Trust will pay the Adviser with respect
to each Fund the compensation specified in Appendix A of this Agreement (the
"Compensation"). Further:

(a) The Compensation shall be held in an interest-bearing escrow account
with State Street Bank and Trust Company pursuant to an Escrow
Agreement substantially in the form attached hereto;

(b) If a majority of a Fund's outstanding voting securities approve a new
Investment Advisory Agreement with the Adviser before 150 days after
March 1, 2000, the amount in the escrow account (including interest
earned thereon) with respect to such Fund shall be paid to the Adviser;
and

(c) If a majority of a Fund's outstanding voting securities do not approve
a new Investment Advisory Agreement with the Adviser, the Adviser shall
be paid, from the escrow account, the lesser of an amount equal to:

(1) any costs incurred in performing this Agreement (plus interest
earned on that amount in the escrow account); or

-4-
<PAGE>

(2) the total amount in the escrow account (plus interest earned
thereon).

5. NON-EXCLUSIVITY

The services of the Adviser to the Trust are not to be deemed to be
exclusive, and the Adviser shall be free to render investment advisory or other
services to others (including other investment companies) and to engage in other
activities. It is understood and agreed that the directors, officers, and
employees of the Adviser are not prohibited from engaging in any other business
activity or from rendering services to any other person, or from serving as
partners, officers, directors, trustees or employees of any other firm or
corporation, including other investment companies.

6. SUPPLEMENTAL ARRANGEMENTS

The Adviser may enter into arrangements with other persons affiliated
with the Adviser to better enable it to fulfill its obligations under this
Agreement for the provision of certain personnel and facilities to the Adviser.

7. CONFLICTS OF INTEREST

It is understood that Trustees, officers, agents and shareholders of
the Trust are or may be interested in the Adviser as directors, officers,
stockholders, or otherwise; that directors, officers, agents and stockholders of
the Adviser are or may be interested in the Trust as Trustees, officers,
shareholders or otherwise; that the Adviser may be interested in the Trust; and
that the existence of any such dual interest shall not affect the validity
hereof or of any transactions hereunder except as otherwise provided in the
Agreement and Declaration of Trust of the Trust and the Articles of
Incorporation of the Adviser, respectively, or by specific provision of
applicable law.

8. REGULATION

The Adviser shall submit to all regulatory and administrative bodies
having jurisdiction over the services provided pursuant to this Agreement any
information, reports or other material which any such body by reason of this
Agreement may request or require pursuant to applicable laws and regulations.
The Adviser will comply in all material respects with Rule 17j-1 under the
Investment Company Act.

9. DURATION AND TERMINATION OF AGREEMENT

This Agreement shall become effective on March 1, 2000 with respect to
each Fund and will continue in effect if a new Investment Advisory Agreement
between the Trust and the Adviser is approved by the shareholders of each of the
Funds or for 150 days, whichever is less. The required shareholder approval of
the new Advisory Agreement or of any continuance of the Agreement shall be
effective with respect to any Fund if a majority of the outstanding voting
securities of the series (as defined in Rule 18f-2(h) under the Investment
Company Act) of shares of that Fund votes to approve the Agreement or its
continuance, notwithstanding that the Agreement or its continuance

-5-
<PAGE>

may not have been approved by a majority of the outstanding voting securities of
(a) any other Fund affected by the Agreement or (b) all the Funds of the Trust.

10. PROVISION OF CERTAIN INFORMATION BY ADVISER

The Adviser will promptly notify the Trust in writing of the occurrence
of any of the following events:

a. the Adviser fails to be registered as an investment adviser under the
Investment Advisers Act or under the laws of any jurisdiction in which
the Adviser is required to be registered as an investment adviser in
order to perform its obligations under this Agreement;

b. the Adviser is served or otherwise receives notice of any action, suit,
proceeding, inquiry or investigation, at law or in equity, before or by
any court, public board or body, involving the affairs of the Trust;
and

c. the chief executive officer or controlling stockholder of the Adviser
or the portfolio manager of any Fund changes.

11. AMENDMENTS TO THE AGREEMENT

This Agreement may be amended by the parties only if such amendment is
specifically approved by the vote of a majority of the outstanding voting
securities of each of the Funds affected by the amendment and by the vote of a
majority of the Trustees of the Trust who are not interested persons of any
party to this Agreement cast in person at a meeting called for the purpose of
voting on such approval. The required shareholder approval shall be effective
with respect to any Fund if a majority of the outstanding voting securities of
the series of shares of that Fund vote to approve the amendment, notwithstanding
that the amendment may not have been approved by a majority of the outstanding
voting securities of (a) any other Fund affected by the amendment or (b) all the
Funds of the Trust.

12. ENTIRE AGREEMENT

This Agreement contains the entire understanding and agreement of the
parties.

13. HEADINGS

The headings in the sections of this Agreement are inserted for
convenience of reference only and shall not constitute a part hereof.

-6-
<PAGE>

14. NOTICES

All notices required to be given pursuant to this Agreement shall be
delivered or mailed to the last known business address of the Trust or Adviser
in person or by registered mail or a private mail or delivery service providing
the sender with notice of receipt. Notice shall be deemed given on the date
delivered or mailed in accordance with this section.

15. SEVERABILITY

Should any portion of this Agreement for any reason be held to be void
in law or in equity, the Agreement shall be construed, insofar as is possible,
as if such portion had never been contained herein.

16. GOVERNING LAW

The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of The Commonwealth of Massachusetts, or any of the
applicable provisions of the Investment Company Act. To the extent that the laws
of The Commonwealth of Massachusetts, or any of the provisions in this
Agreement, conflict with applicable provisions of the Investment Company Act,
the latter shall control.

17. LIMITATION OF LIABILITY

The Declaration of Trust establishing the Trust, dated September 29,
1988, as amended and restated February 18, 1994, a copy of which, together with
all amendments thereto (the "Declaration"), is on file in the office of the
Secretary of The Commonwealth of Massachusetts, provides that the name "North
American Funds" refers to the Trustees under the Declaration collectively as
Trustees, but not as individuals or personally; and no Trustee, shareholder,
officer, employee or agent of the Trust shall be held to any personal liability,
nor shall resort be had to their private property, for the satisfaction of any
obligation or claim, in connection with the affairs of the Trust or any Fund
thereof, but only the assets belonging to the Trust, or to the particular Fund
with which the obligee or claimant dealt, shall be liable.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal by their duly authorized officers as of the date first
mentioned above.

North American Funds

By:
-------------------------------

American General Asset Management Corp.

By:
-------------------------------

-7-
<PAGE>

APPENDIX A

1. Equity-Income Fund: .750% of the first $50,000,000, .650% between
$50,000,000 and $200,000,000 and .550% on the excess over $500,000,000 of
the average net assets of the Fund.

2. Growth and Income Fund: .725% of the first $50,000,000, .675% between
$50,000,000 and $200,000,000, .625% between $200,000,000 and $500,000,000
and .55% on the excess over $500,000,000 of the average net assets of the
Fund.

3. Balanced Fund: .775% of the first $50,000,000, .725% between $50,000,000
and $200,000,000, .675% between $200,000,000 and $500,000,000 and .625% on
the excess over $500,000,000 of the average net assets of the Fund.

4. U.S. Government Securities Fund: .60% of the first $50,000,000, .60%
between $50,000,000 and $200,000,000 and .525% between $200,000,000 and
$500,000,000 and .475% on the excess over $500,000,000 of the average net
assets of the Fund.

5. Core Bond Fund: .60% of the first $50,000,000, .60% between $50,000,000
and $200,000,000, .525% between $200,000,000 and $500,000,000 and .475% on
the excess over $500,000,000 of the average net assets of the Fund.

6. Money Market Fund: .20% of the first $50,000,000, .20% between $50,000,000
and $200,000,000, .20% between $200,000,000 and $500,000,000 and .145% on
the excess over $500,000,000 of the average net assets of the Fund.

7. Global Equity Fund: .90% of the first $50 million, .90% between
$50,000,000 and $200,000,000, .70% between $200,000,000 and $500,000,000
and .70% on the excess over $500,000,000 of the average net assets of the
Fund.

8. Municipal Bond Fund: .60% of the first $50,000,000, .60% between
$50,000,000 and $200,000,000, .60% between $200,000,000 and $500,000,000
and .60% on the excess over $500,000,000 of the average net assets of the
Fund.

9. Strategic Income Fund: .75% of the first $50 million, .70% between
$50,000,000 and $200,000,000, .65% between $200,000,000 and $500,000,000
and .60% on the excess over $500,000,000 of the average net assets of the
Fund.

10. International Equity Fund: .90% of the first $50 million, .85% between
$50,000,000 and $200,000,000, .80% between $200,000,000 and $500,000,000
and .75% on the excess over $500,000,000 of the average net assets of the
Fund.

11. Mid Cap Growth Fund: .925% of the first $50,000,000, .900% between
$50,000,000 and $200,000,000, .875% between $200,000,000 and $500,000,000
and .850% on the excess over $500,000,000 of the average net assets of the
Fund.

-8-
<PAGE>

12. International Small Cap Fund: 1.05% of the first $50,000,000, 1.0% between
$50,000,000 and $200,000,000, .900% between $200,000,000 and $500,000,000
and .800% on the excess over $500,000,000 of the average net assets of the
Fund.

13. Large Cap Growth Fund: .900% of the first $50,000,000, .850% between
$50,000,000 and $200,000,000, .825% between $200,000,000 and $500,000,000
and .800% on the excess over $500,000,000 of the average net assets of the
Fund.

14. Tax-Sensitive Equity Fund: .850% of the first $50,000,000,.800% between
$50,000,000 and $200,000,000, .775% between $200,000,000 and $500,000,000
and .700% on the excess over $500,000,000 of the average net assets of the
Fund.

15. Small Cap Growth Fund: .950% of the Fund's average net assets.

16. Mid Cap Value Fund: .900% of the first $100,000,000, .875% between
$100,000,000 and $250,000,000, .850% between $250,000,000 and
$500,000,000, .825% between $500,000,000 and $750,000,000 and .800% on the
excess over $750,000,000 of the average net assets of the Fund.

17. Stock Index Fund: .270% of the first $500,000,000 and .260% on the excess
over $500,000,000 of the average net assets of the Fund.

18. Small Cap Index Fund: .280% of the first $500,000,000 and .270% on the
excess over $500,000,000 of the average net assets of the Fund.

19. Socially Responsible Fund: .650% of the average net assets of the Fund.

20. High Yield Bond Fund : .825% of the first $200,000,000, .725% between
$200,000,000 and $500,000,000, and .675% on the excess over $500,000,000
of the average net assets of the Fund.

21. Growth Lifestyle Fund: .100% of the average net assets of the Fund.

22. Moderate Growth Lifestyle Fund: .100% of the average net assets of the
Fund.

23. Conservative Growth Lifestyle Fund: .100% of the average net assets of the
Fund.

24. Municipal Money Market Fund: .350% of the average net assets of the Fund.

25. Science & Technology Fund: .900% of the average net assets of the Fund.

26. Capital Appreciation Fund: .900% of the first $50,000,000, .850% between
$50,000,000 and $200,000,000, .825% between $200,000,000 and $500,000,000
and .800% on the excess over $500,000,000 of the average net assets of the
Fund.

-9-
<PAGE>

The Percentage Fee for each Fund shall be accrued for each calendar day
and the sum of the daily fee accruals shall be payable monthly to the Adviser.
The daily fee accruals will be computed by multiplying the fraction of one over
the number of calendar days in the year by the applicable annual rate described
in the preceding paragraph, and multiplying this product by the net assets of
the Fund as determined in accordance with the Fund's prospectus and statement of
additional information as of the close of business on the previous business day
on which the Fund was open for business.

If this Agreement becomes effective or terminates before the
end of any month, the fee for the period from the effective date to the end of
such month or from the beginning of such month to the date of termination, as
the case may be, shall be prorated according to the proportion which such period
bears to the full month in which such effectiveness or termination occurs.

-10-

<PAGE>

NORTH AMERICAN FUNDS
INTERIM SUBADVISORY AGREEMENT

INTERIM AGREEMENT made as of March 10, 2000, between American General
Asset Management Corp., a Delaware corporation (the "Adviser"), and American
General Investment Management L.P., a Delaware limited partnership (the
"Subadviser"). In consideration of the mutual covenants contained herein, the
parties agree as follows:

1. APPOINTMENT OF SUBADVISER

The Subadviser undertakes to act as investment subadviser to, and,
subject to the supervision of the Trustees of North American Funds (the "Trust")
and the terms of this Agreement, to manage the investment and reinvestment of
the assets of the series of the Trust specified in Appendix A to this Agreement
as it shall be amended by the Adviser and the Subadviser from time to time (the
"Funds"). The Subadviser will be an independent contractor and will have no
authority to act for or represent the Trust or Adviser in any way except as
expressly authorized in this Agreement or another writing by the Trust and
Adviser.

2. SERVICES TO BE RENDERED BY THE SUBADVISER TO THE TRUST

a. Subject always to the direction and control of the Trustees of the
Trust, the Subadviser will manage the investments and determine the
composition of the assets of the Funds in accordance with the Funds'
registration statement, as amended. In fulfilling its obligations to
manage the investments and reinvestments of the assets of the Funds,
the Subadviser will:

i. obtain and evaluate pertinent economic, statistical, financial
and other information affecting the economy generally and
individual companies or industries the securities of which are
included in the Funds or are under consideration for inclusion
in the Funds;

ii. formulate and implement a continuous investment program for
each Fund consistent with the investment objectives and
related investment policies for each such Fund as described in
the Trust's registration statement, as amended;

iii. take whatever steps are necessary to implement these
investment programs by the purchase and sale of securities
including the placing of orders for such purchases and sales;

iv. regularly report to the Trustees of the Trust with respect to
the implementation of these investment programs;

v. provide assistance to the Trust's Custodian regarding the fair
value of securities held by the Funds for which market
quotations are not readily available for purposes of enabling
the Trust's Custodian to calculate net asset value; and

vi. vote proxies in accordance with the Proxy Voting Policy of the
Trust.

b. The Subadviser, at its expense, will furnish (i) all necessary
investment and management facilities, including salaries of personnel
required for it to execute its duties faithfully, and (ii)
administrative facilities, including bookkeeping, clerical personnel
and equipment necessary for the efficient conduct of the investment
affairs of the Funds (excluding determination of net asset value and
shareholder accounting services).

provides research and brokerage services a higher spread or commission
for a particular transaction than otherwise might have been charged by
another broker-dealer, if the Subadviser determines that the higher
spread or commission is reasonable in relation to the value of the
brokerage and research services that such broker-dealer provides,
viewed in terms of either the particular transaction or the
Subadviser's overall responsibilities with respect to accounts managed
by the Subadviser. The Subadviser may use for the benefit of the
Subadviser's other clients, or make available to companies affiliated
with the Subadviser or to its directors for the benefit of its clients,
any such brokerage and research services that the Subadviser obtains
from brokers or dealers.

d. On occasions when the Subadviser deems the purchase or sale of a
security to be in the best interest of the Fund as well as other
clients of the Subadviser, the Subadviser to the extent permitted by
applicable laws and regulations, may, but shall be under no obligation
to, aggregate the securities to be purchased or sold to attempt to
obtain a more favorable price or lower brokerage commissions and
efficient execution. In such event, allocation of the securities so
purchased or sold, as well as the expenses incurred in the transaction,
will be made by the Subadviser in the manner the Subadviser considers
to be the most equitable and consistent with its fiduciary obligations
to the Fund and to its other clients.

e. The Subadviser will maintain all accounts, books and records with
respect to the Funds as are required of an investment adviser of a
registered investment company pursuant to the Investment Company Act of
1940, as amended (the "Investment Company Act") and Investment Advisers
Act of 1940, as amended (the "Investment Advisers Act") and the rules
thereunder.

f. The Subadviser agrees to comply with Rule 17j-1 under the Investment
Company Act. On a quarterly basis, the Subadviser will either (i)
certify to the Adviser that the Subadviser and its Access Persons have
complied with the Subadviser's Code of Ethics with respect to the Fund
or (ii) identify any material violations which have occurred with
respect to the Fund. In addition, the Subadviser will report at least
annually to the Adviser concerning any other violations of the
Subadviser's Code of Ethics which required significant remedial action
and which were not previously reported.

3. COMPENSATION OF SUBADVISER

The Adviser will pay the Subadviser with respect to each Fund the
compensation specified in Appendix A to this Agreement (the "Compensation").
Further:

(a) The Compensation shall be held in an interest-bearing escrow account
with State Street Bank and Trust Company pursuant to an Escrow
Agreement substantially in the form attached hereto;

(b) If a majority of a Fund's outstanding voting securities approve a
Subadvisory Agreement with the Subadviser before 150 days after March
1, 2000, the amount in the escrow account (including interest earned
thereon) with respect to such Fund shall be paid to the Subadviser;
and

(c) If a majority of a Fund's outstanding voting securities do not
approve a new Subadvisory Agreement with the Subadviser, the
Subadviser shall be paid from the escrow account, the lesser of an
amount equal to:

(1) any costs incurred in performing this Agreement (plus interest
earned on that amount in the escrow account); or

(2) the total amount in the escrow account (plus interest earned
thereon).

4. LIABILITY OF SUBADVISER

Neither the Subadviser nor any of its employees shall be liable to the
Adviser or Trust for any loss suffered

2
<PAGE>

by the Adviser or Trust resulting from any error of judgment made in the good
faith exercise of the Subadviser's investment discretion in connection with
selecting Fund investments except for losses resulting from willful misfeasance,
bad faith or gross negligence of, or from reckless disregard of, the duties of
the Subadviser or any of its partners or employees; and neither the Subadviser
nor any of its employees shall be liable to the Adviser or Trust for any loss
suffered by the Adviser or Trust resulting from any other matters to which this
Agreement relates (i.e., those other matters specified in Sections 2 and 8 of
this Agreement), except for losses resulting from willful misfeasance, bad
faith, or gross negligence in the performance of, or from disregard of, the
duties of the Subadviser or any of its partners or employees.

5. SUPPLEMENTAL ARRANGEMENTS

The Subadviser may enter into arrangements with other persons
affiliated with the Subadviser to better enable it to fulfill its obligations
under this Agreement for the provision of certain personnel and facilities to
the Subadviser.

6. CONFLICTS OF INTEREST

It is understood that trustees, officers, agents and shareholders of
the Trust are or may be interested in the Subadviser as trustees, officers,
partners or otherwise; that directors, officers, agents and partners of the
Subadviser are or may be interested in the Trust as trustees, officers,
shareholders or otherwise; that the Subadviser may be interested in the Trust;
and that the existence of any such dual interest shall not affect the validity
hereof or of any transactions hereunder except as otherwise provided in the
Agreement and Declaration of Trust of the Trust and the Certificate of
Incorporation of the Subadviser, respectively, or by specific provision of
applicable law.

7. REGULATION

The Subadviser shall submit to all regulatory and administrative bodies
having jurisdiction over the services provided pursuant to this Agreement any
information, reports or other material which any such body by reason of this
Agreement may request or require pursuant to applicable laws and regulations.

8. DURATION AND TERMINATION OF AGREEMENT

This Agreement shall become effective on March ___, 2000 with respect
to each Fund and continue in effect until a new Sub-Advisory Agreement between
Adviser and Subadviser is approved by shareholders of each of the Funds, or for
150 days, whichever is less.

This Agreement may be terminated at any time, without the payment of
any penalty, by the Trustees of the Trust, by the vote of a majority of the
outstanding voting securities of the Trust, or with respect to any Fund by the
vote of a majority of the outstanding voting securities of such Fund, on ten
days' written notice to the Adviser and the Subadviser, or by the Adviser or
Subadviser on sixty days' written notice to the Trust and the other party. This
agreement will automatically terminate, without the payment of any penalty, in
the event of its assignment (as defined in the Investment Company Act) or in the
event the Advisory Agreement between the Adviser and the Trust terminates for
any reason.

9. PROVISION OF CERTAIN INFORMATION BY SUBADVISER

The Subadviser will promptly notify the Adviser in writing of the
occurrence of any of the following events:

a. the Subadviser fails to be registered as an investment adviser under
the Investment Advisers Act or under the laws of any jurisdiction in
which the Subadviser is required to be registered as an investment
adviser in order to perform its obligations under this Agreement;

3
<PAGE>

b. the Subadviser is served or otherwise receives notice of any action,
suit, proceeding, inquiry or investigation, at law or in equity, before
or by any court, public board or body, involving the affairs of the
Trust; and

c. any change in actual control or management of the Subadviser or the
portfolio manager of any Fund.

10. PROVISION OF CERTAIN INFORMATION BY THE ADVISER

The Adviser shall furnish the Subadviser with copies of the Trust's
Prospectus and Statement of Additional Information, and any reports made by the
Trust to its shareholders, as soon as practicable after such documents become
available. The Adviser shall furnish the Subadviser with any further documents,
materials or information that the Subadviser may reasonably request to enable it
to perform its duties pursuant to this Agreement.

11. SERVICES TO OTHER CLIENTS

The Adviser understands, and has advised the Trust's Board of Trustees,
that the Subadviser now acts, or may in the future act, as an investment adviser
to fiduciary and other managed accounts and as investment adviser or subadviser
to other investment companies. Further, the Adviser understands, and has advised
the Trust's Board of Trustees that the Subadviser and its affiliates may give
advice and take action for its accounts, including investment companies, which
differs from advice given on the timing or nature of action taken for the Fund.
The Subadviser is not obligated to initiate transaction for the Fund in any
security which the Subadviser, its principals, affiliates or employees may
purchase or sell for their own accounts or other clients.

12. AMENDMENTS TO THE AGREEMENT

This Agreement may be amended by the parties only if such amendment is
specifically approved by the vote of a majority of the outstanding voting
securities of each of the Funds affected by the amendment and by the vote of a
majority of the Trustees of the Trust who are not interested persons of any
party to this Agreement cast in person at a meeting called for the purpose of
voting on such approval. The required shareholder approval shall be effective
with respect to any Fund if a majority of the outstanding voting securities of
that Fund vote to approve the amendment, notwithstanding that the amendment may
not have been approved by a majority of the outstanding voting securities of (a)
any other Fund affected by the amendment or (b) all the series of the Trust.

13. ENTIRE AGREEMENT

This Agreement contains the entire understanding and agreement of the
parties.

14. HEADINGS

The headings in the sections of this Agreement are inserted for
convenience of reference only and shall not constitute a part hereof.

15. NOTICES

All notices required to be given pursuant to this Agreement shall be
delivered or mailed to the last known business address of the Trust or
applicable party in person or by registered mail or a private mail or delivery
service providing the sender with notice of receipt. Notice shall be deemed
given on the date delivered or mailed in accordance with this paragraph.

16. SEVERABILITY

Should any portion of this Agreement for any reason be held to be void
in law or in equity, the Agreement

4
<PAGE>

shall be construed, insofar as is possible, as if such portion had never been
contained herein.

17. GOVERNING LAW

18. LIMITATION OF LIABILITY

The Amended and Restated Agreement and Declaration of Trust dated
February 18, 1994, a copy of which, together with all amendments thereto (the
"Declaration"), is on file in the office of the Secretary of The Commonwealth of
Massachusetts, provides that the name "North American Funds" refers to the
Trustees under the Declaration collectively as Trustees, but not as individuals
or personally; and no Trustee, shareholder, officer, employee or agent of the
Trust shall be held to any personal liability, nor shall resort be had to their
private property, for the satisfaction of any obligation or claim, in connection
with the affairs of the Trust or any portfolio thereof, but only the assets
belonging to the Trust, or to the particular portfolio with which the obligee or
claimant dealt, shall be liable.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal by their duly authorized officers as of the date first
mentioned above.

American General Asset Management Corp.

by:
-----------------------------

American General Investment Management, L.P.

by:
-----------------------------

5
<PAGE>

APPENDIX A
----------

The Subadviser shall serve as investment subadviser for the following
Funds of the Trust. The Adviser will pay the Subadviser, as full compensation
for all services provided under this Agreement, the fee computed separately for
each such Fund at an annual rate as follows (the "Subadviser Percentage Fee"):

1. U.S. Government Securities Fund: .225% of the first
$200,000,000, .15% between $200,000,000 and $500,000,000 and
.10% on the excess over $500,000,000 of the average net assets
of the Fund.

2. Municipal Bond Fund: .25% of the first $50,000,000, .25%
between $50,000,000 and $200,000,000, .25% between
$200,000,000 and $500,000,000 and .25% on the excess over
$500,000,000 of the average net assets of the Fund.

3. Strategic Income Fund: .35% of the first $50 million, .30%
between $50,000,000 and $200,000,000, .25% between
$200,000,000 and $500,000,000 and .20% on the excess over
$500,000,000 of the average net assets of the Fund.

4. Money Market Fund: .075% of the first $500,000,000 and .020%
on the excess over $500,000,000 of the average net assets of
the Fund.

5. Core Bond Fund: .225% of the first $200,000,000, .15% between
$200,000,000 and $500,000,000 and .10% on the excess over
$500,000,000 of the average net assets of the Fund.

6. High Yield Bond Fund: .450% of the first $200,000,000; .350%
between $200,000,000 and $500,000,000 and.300% on the excess
over $500,000,000 of the average net assets of the Fund.

7. Municipal Money Market Fund: .250% of the first $200,000,000;
.200% between $200,000,000 and $500,000,000 and .150% on the
excess over $500,000,000 of the average net assets of the
Fund.

8. Stock Index Fund: .020% of the first $2 billion and .010% on
the excess over $2 billion of the average net assets of the
Fund.

9. Small Cap Index Fund: .030% of the first $150,000,000 and
.020% on the excess over $150,000,000 of the average net
assets of the Fund.

10. Socially Responsible Fund: .250% of the Fund's average daily
assets.

11. Aggressive Growth Lifestyle Fund: .100% of the Fund's average
daily assets.

12. Moderate Growth Lifestyle Fund: .100% of the Fund's average
daily assets.

13. Conservative Growth Lifestyle Fund: .100% of the Fund's
average daily assets.

The Subadviser Percentage Fee for each Fund shall be accrued for each
calendar day and the sum of the daily fee accruals shall be paid monthly to the
Subadviser. The daily fee accruals will be computed by multiplying the fraction
of one over the number of calendar days in the year by the applicable annual
rate described in the preceding paragraph, and multiplying this product by the
net assets of the Fund as determined in accordance with the Trust's prospectus
and statement of additional information as of the close of business on the
previous business day on which the Trust was open for business.

6
<PAGE>

termination, as the case may be, shall be prorated according to the proportion
which such period bears to the full month in which such effectiveness or
termination occurs.

<PAGE>

NORTH AMERICAN FUNDS
SUBADVISORY AGREEMENT

AGREEMENT made as of March 10, 2000, between American General Asset
Management Corp., a Delaware corporation (the "Adviser"), and Wellington
Management Company, LLP, a Massachusetts limited liability partnership (the
"Subadviser"). In consideration of the mutual covenants contained herein, the
parties agree as follows:

1. APPOINTMENT OF SUBADVISER

The Subadviser undertakes to act as investment subadviser to, and,
subject to the supervision of the Trustees of North American Funds (the "Trust")
and the terms of this Agreement, to manage the investment and reinvestment of
the assets of the Portfolios specified in Appendix A to this Agreement as it
shall be amended by the Adviser and the Subadviser from time to time (the
"Portfolios"). The Subadviser will be an independent contractor and will have no
authority to act for or represent the Trust or Adviser in any way except as
expressly authorized in this Agreement or another writing by the Trust and
Adviser.

2. SERVICES TO BE RENDERED BY THE SUBADVISER TO THE TRUST

a. Subject always to the direction and control of the Trustees of the
Trust, the Subadviser will manage the investments and determine the
composition of the assets of the Portfolios in accordance with the
Portfolios' registration statement, as amended. In fulfilling its
obligations to manage the investments and reinvestments of the assets
of the Portfolios, the Subadviser will:

i. obtain and evaluate pertinent economic, statistical, financial
and other information affecting the economy generally and
individual companies or industries the securities of which are
included in the Portfolios or are under consideration for
inclusion in the Portfolios;

ii. formulate and implement a continuous investment program for
each Portfolio consistent with the investment objectives and
related investment policies for each such Portfolio as
described in the Trust's registration statement, as amended;

iii. take whatever steps are necessary to implement these
investment programs by the purchase and sale of securities
including the placing of orders for such purchases and sales;

iv. regularly report to the Trustees of the Trust with respect to
the implementation of these investment programs;

v. provide assistance to the Trust's Custodian in accordance with
procedures and methods established by the Trustees of the
Trust regarding the fair value of securities held by the
Portfolios for which market quotations are not readily
available for purposes of enabling the Trust's Custodian to
calculate net asset value; and

vi. Vote proxies in accordance with the Subadviser's Proxy Voting
Policy.

b. The Subadviser, at its expense, will furnish (i) all necessary
investment and management facilities, including salaries of personnel
required for it to execute its duties faithfully, and (ii)
administrative facilities, including bookkeeping, clerical personnel
and equipment necessary for the efficient conduct of the investment
affairs of the Portfolios (excluding determination of net asset value
and shareholder accounting services).

c. The Subadviser shall have full and complete discretion to establish
brokerage accounts with one or more brokers, dealers or other financial
intermediaries as the Subadviser may select. The Subadviser will select
brokers and dealers to effect all transactions subject to the following
conditions: The Subadviser will place all orders with brokers, dealers,
or issuers, and will negotiate brokerage commissions if applicable. The
Subadviser is directed at all times to seek to execute brokerage
transactions for the Portfolios in accordance
<PAGE>

with the Subadviser's Statement of Policy on Brokerage Practices and
such policies or practices as may be established by the Trustees and
described in the Trust's registration statement as amended. The
Subadviser may pay a broker-dealer which provides research and
brokerage services a higher spread or commission for a particular
transaction than otherwise might have been charged by another
broker-dealer, if the Subadviser determines that the higher spread or
commission is reasonable in relation to the value of the brokerage and
research services that such broker-dealer provides, viewed in terms of
either the particular transaction or the Subadviser's overall
responsibilities with respect to accounts managed by the Subadviser.
The Subadviser may use for the benefit of the Subadviser's other
clients, or make available to companies affiliated with the Subadviser
or to its directors for the benefit of its clients, any such brokerage
and research services that the Subadviser obtains from brokers or
dealers.

d. On occasions when the Subadviser deems the purchase or sale of a
security to be in the best interest of a Portfolio as well as other
clients of the Subadviser, the Subadviser to the extent permitted by
applicable laws and regulations, may, but shall be under no obligation
to, aggregate the securities to be purchased or sold to attempt to
obtain a more favorable price or lower brokerage commissions and
efficient execution. In such event, allocation of the securities so
purchased or sold, as well as the expenses incurred in the transaction,
will be made by the Subadviser in the manner the Subadviser considers
to be the most equitable and consistent with its fiduciary obligations
to the Portfolio and to its other clients.

e. The Subadviser will maintain all accounts, books and records with
respect to the Portfolios as are required by subparagraphs (b)(5), (6),
(7), (9), (10) and (11) of Rule 31a-1 under the Investment Company Act
of 1940 (the "Investment Company Act") and such other records as are
required of an investment adviser of a registered investment company
pursuant to the Investment Advisers Act of 1940 (the "Investment
Advisers Act") and the rules thereunder.

f. The Subadviser, including its Access Persons (as defined in subsection
(e) of Rule 17j-1 under the Investment Company Act), agrees to observe
and comply with Rule 17j-1 and its Code of Ethics (which shall comply
in all material respects with Rule 17j-1, as the same may be amended
from time to time). On a quarterly basis, the Subadviser will either
(i) certify to the Adviser that the Subadviser and its Access Persons
have complied with the Subadviser's Code of Ethics with respect to the
Portfolio or (ii) identify any material violations which have occurred
with respect to the Portfolio. In addition, the Subadviser will report
at least annually to the Adviser concerning any other violations of the
Subadviser's Code of Ethics which required significant remedial action
and which were not previously reported.

3. COMPENSATION OF SUBADVISER

The Adviser will pay the Subadviser with respect to each Portfolio the
compensation specified in Appendix A to this Agreement.

4. LIABILITY OF SUBADVISER

Neither the Subadviser nor any of its officers or employees shall be
liable to the Adviser or Trust for any loss suffered by the Adviser or Trust
resulting from any error of judgment made in the good faith exercise of the
Subadviser's investment discretion in connection with selecting Portfolio
investments except for losses resulting from willful misfeasance, bad faith or
gross negligence of, or from reckless disregard of, the duties of the Subadviser
or any of its officers or employees; and neither the Subadviser nor any of its
officers or employees shall be liable to the Adviser or Trust for any loss
suffered by the Adviser or Trust resulting from any other matters to which this
Agreement relates (i.e., those other matters specified in Sections 2 and 8 of
this Agreement), except for losses resulting from willful misfeasance, bad
faith, or gross negligence in the performance of, or from disregard of, the
duties of the Subadviser or any of its officers or employees.

2
<PAGE>

5. SUPPLEMENTAL ARRANGEMENTS

6. CONFLICTS OF INTEREST

It is understood that trustees, officers, agents and shareholders of
the Trust are or may be interested in the Subadviser as trustees, officers,
partners or otherwise; that directors, officers, agents and partners of the
Subadviser are or may be interested in the Trust as trustees, officers,
shareholders or otherwise; that the Subadviser may be interested in the Trust;
and that the existence of any such dual interest shall not affect the validity
hereof or of any transactions hereunder except as otherwise provided in the
Agreement and Declaration of Trust of the Trust and the Partnership Agreement of
the Subadviser, respectively, or by specific provision of applicable law.

7. REGULATION

8. DURATION AND TERMINATION OF AGREEMENT

Unless sooner terminated, this Agreement will continue in effect for a
period more than two years from the date of its execution only so long as such
continuance is specifically approved at least annually either by the Trustees of
the Trust or by a majority of the outstanding voting securities of each of the
Portfolios, provided that in either event such continuance shall also be
approved by the vote of a majority of the Trustees of the Trust who are not
interested persons (as defined in the Investment Company Act) of any party to
this Agreement cast in person at a meeting called for the purpose of voting on
such approval. The required shareholder approval of the Agreement or of any
continuance of the Agreement shall be effective with respect to any Portfolio if
a majority of the outstanding voting securities of the series (as defined in
Rule 18f-2(h) under the Investment Company Act) of shares of that Portfolio
votes to approve the Agreement or its continuance, notwithstanding that the
Agreement or its continuance may not have been approved by a majority of the
outstanding voting securities of (a) any other Portfolio affected by the
Agreement or (b) all the portfolios of the Trust.

If the shareholders of any Portfolio fail to approve the Sub-Advisory
Agreement the Subadviser will continue to act as investment subadviser with
respect to such Portfolio pending the required approval of the Agreement or its
continuance or of any contract with the Subadviser or a different adviser or
subadviser or other definitive action; provided, that the compensation received
by the Subadviser in respect of such Portfolio during such period is in
compliance with Rule 15a-4 under the Investment Company Act.

This Agreement may be terminated at any time, without the payment of
any penalty, by the Trustees of the Trust, by the vote of a majority of the
outstanding voting securities of the Trust, or with respect to any Portfolio by
the vote of a majority of the outstanding voting securities of such Portfolio,
on sixty days' written notice to the Adviser and the Subadviser, or by the
Adviser or Subadviser on sixty days' written notice to the Trust and the other
party. This agreement will automatically terminate, without the payment of any
penalty, in the event of its assignment (as defined in the Investment Company
Act) or in the event the Advisory Agreement between the Adviser and the Trust
terminates for any reason.

9. PROVISION OF CERTAIN INFORMATION BY SUBADVISER

The Subadviser will promptly notify the Adviser in writing of the
occurrence of any of the following events:

3
<PAGE>

c. any change in actual control or management of the Subadviser or the
portfolio manager of any Portfolio.

10. PROVISION OF CERTAIN INFORMATION BY THE ADVISER

During the term of this Agreement, the Adviser shall furnish the
Subadviser with copies of the Trust's Prospectus and Statement of Additional
Information and any supplements thereto, proxy statements, reports to
shareholders, sales literature or other materials prepared for distribution to
shareholders, or the public that refer to the Subadviser for the Subadviser's
review and approval. The Subadviser shall be deemed to have approved all such
materials unless the Subadviser reasonably objects by giving notice to the
Adviser in writing within five business days (or such other period as may be
mutually agreed) after receipt thereof. The Subadviser's right to object to such
materials is limited to the portions of such materials that expressly relate to
the Subadviser, its services and its clients. The Adviser agrees to use its
reasonable best efforts to ensure that materials prepared by its employees or
agents or its affiliates that refer to the Subadviser or its clients in any way
are consistent with those materials previously approved by the Subadviser as
referenced in this paragraph. Sales literature may be furnished to the
Subadviser by first class or overnight mail, facsimile transmission or hand
delivery. The Adviser shall furnish the Subadviser with any further documents,
materials or information that the Subadviser may reasonably request to enable it
to perform its duties pursuant to this Agreement.

11. SERVICES TO OTHER CLIENTS

The Adviser understands, and has advised the Trust's Board of Trustees,
that the Subadviser now acts, or may in the future act, as an investment adviser
to fiduciary and other managed accounts and as investment adviser or subadviser
to other investment companies. Further, the Adviser understands, and has advised
the Trust's Board of Trustees that the Subadviser and its affiliates may give
advice and take action for its accounts, including investment companies, which
differs from advice given on the timing or nature of action taken for the
Portfolio. The Subadviser is not obligated to initiate transaction for the
Portfolio in any security which the Subadviser, its principals, affiliates or
employees may purchase or sell for their own accounts or other clients.

12. AMENDMENTS TO THE AGREEMENT

This Agreement may be amended by the parties only if such amendment is
specifically approved by the vote of a majority of the outstanding voting
securities of each of the Portfolios affected by the amendment and by the vote
of a majority of the Trustees of the Trust who are not interested persons of any
party to this Agreement cast in person at a meeting called for the purpose of
voting on such approval. The required shareholder approval shall be effective
with respect to any Portfolio if a majority of the outstanding voting securities
of that Portfolio vote to approve the amendment, notwithstanding that the
amendment may not have been approved by a majority of the outstanding voting
securities of (a) any other Portfolio affected by the amendment or (b) all the
portfolios of the Trust.

13. ENTIRE AGREEMENT

This Agreement contains the entire understanding and agreement of the
parties.

4
<PAGE>

14. HEADINGS

The headings in the sections of this Agreement are inserted for
convenience of reference only and shall not constitute a part hereof.

15. NOTICES

16. SEVERABILITY

17. GOVERNING LAW

18. LIMITATION OF LIABILITY

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal by their duly authorized officers as of the date first
mentioned above.

American General Asset Management Corp.

by:
---------------------------

Wellington Management Company, LLP

by:
---------------------------

5
<PAGE>

APPENDIX A
----------

The Subadviser shall serve as investment subadviser for the following
portfolios of the Trust. The Adviser will pay the Subadviser, as full
compensation for all services provided under this Agreement, the fee computed
separately for each such Portfolio at an annual rate as follows (the "Subadviser
Percentage Fee"):

Growth and Income Fund: .325% of the first $50,000,000, .275% for the
next $150,000,000, .225% for the next $300,000,000 and .15% on the
excess over $500,000,000 of the average net assets of the Fund.

Tax-Sensitive Equity Fund: .450% of the first $50,000,000; .400%
between $50,0000,000 and $200,000,000; .375% between $200,000,000 and
$500,000,000 and .300% on the excess of the average net assets of the
Fund.

Equity-Income Fund: .375% of the first $50,000,000, .275% between
$50,000,000 and $200,000,000, .200% between $200,000,000 and
$500,000,000 and .200% on the excess over $500,000,000 of the average
net assets of the Fund.

The Subadviser Percentage Fee for each Portfolio shall be accrued by
the Portfolio's custodian for each calendar day and the sum of the daily fee
accruals shall be paid monthly to the Subadviser. The daily fee accruals will be
computed by multiplying the fraction of one over the number of calendar days in
the year by the applicable annual rate described in the preceding paragraph, and
multiplying this product by the net assets of the Portfolio as determined in
accordance with the Trust's prospectus and statement of additional information
as of the close of business on the previous business day on which the Trust was
open for business.

If this Agreement becomes effective or terminates before the end of any month,
the fee (if any) for the period from the effective date to the end of such month
or from the beginning of such month to the date of termination, as the case may
be, shall be prorated according to the proportion which such period bears to the
full month in which such effectiveness or termination occurs.

<PAGE>

NORTH AMERICAN FUNDS
SUBADVISORY AGREEMENT

AGREEMENT made as of March 10, 2000, between American General Asset
Management Corp., a Delaware corporation (the "Adviser"), and Morgan Stanley
Dean Witter Investment Management Inc., a Delaware corporation (the
"Subadviser"). In consideration of the mutual covenants contained herein, the
parties agree as follows:

1. APPOINTMENT OF SUBADVISER

The Subadviser undertakes to act as investment subadviser to, and,
subject to the supervision of the Trustees of North American Funds (the "Trust")
and the terms of this Agreement, to manage the investment and reinvestment of
the assets of the Portfolios specified in Appendix A to this Agreement as it
shall be amended by the Adviser and the Subadviser from time to time (the
"Portfolios"). The Subadviser will be an independent contractor and will have no
authority to act for or represent the Trust or Adviser in any way except as
expressly authorized in this Agreement or another writing by the Trust and
Adviser.

2. SERVICES TO BE RENDERED BY THE SUBADVISER TO THE TRUST

i. obtain and evaluate pertinent economic, statistical, financial
and other information affecting the economy generally and
individual companies or industries the securities of which are
included in the Portfolios or are under consideration for
inclusion in the Portfolios;

iii. take whatever steps are necessary to implement these
investment programs by the purchase and sale of securities
including the placing of orders for such purchases and sales;

iv. regularly report to the Trustees of the Trust with respect to
the implementation of these investment programs; and

v. provide assistance to the Trust's Custodian regarding the fair
value of securities held by the Portfolios for which market
quotations are not readily available for purposes of enabling
the Trust's Custodian to calculate net asset value.

b. The Subadviser, at its expense, will furnish (i) all necessary
investment and management facilities, including salaries of personnel
required for it to execute its duties faithfully, and (ii)
administrative facilities, including bookkeeping, clerical personnel
and equipment necessary for the efficient conduct of the investment
affairs of the Portfolios (excluding determination of net asset value
and shareholder accounting services).

c. The Subadviser will select brokers and dealers to effect all
transactions subject to the following conditions: The Subadviser will
place all orders with brokers, dealers, or issuers, and will negotiate
brokerage commissions if applicable. The Subadviser is directed at all
times to seek to execute brokerage transactions for the Portfolios in
accordance with such policies or practices as may be established by the
Trustees and described in the Trust's registration statement as
amended. The Subadviser may pay a broker-dealer which provides research
and brokerage services a higher spread or commission for a particular
transaction than otherwise might have been charged by another
broker-dealer, if the Subadviser determines that the higher
<PAGE>

spread or commission is reasonable in relation to the value of the
brokerage and research services that such broker-dealer provides,
viewed in terms of either the particular transaction or the
Subadviser's overall responsibilities with respect to accounts managed
by the Subadviser. The Subadviser may use for the benefit of the
Subadviser's other clients, or make available to companies affiliated
with the Subadviser or to its directors for the benefit of its clients,
any such brokerage and research services that the Subadviser obtains
from brokers or dealers. In accordance with Section 11(a) of the
Securities Exchange Act of 1934, as amended, and Rule 11a-2-2(T)
thereunder, and subject to any other applicable laws and regulations
including Section 17(e) of the Investment Company Act of 1940 (the
"Investment Company Act") and Rule 17e-1 thereunder, the Subadviser may
engage its affiliates as broker-dealers to effect portfolio
transactions in securities for the Portfolios.

d. On occasions when the Subadviser deems the purchase or sale of a
security to be in the best interest of the Portfolio as well as other
clients of the Subadviser, the Subadviser to the extent permitted by
applicable laws and regulations, may, but shall be under no obligation
to, aggregate the securities to be purchased or sold to attempt to
obtain a more favorable price or lower brokerage commissions and
efficient execution. In such event, allocation of the securities so
purchased or sold, as well as the expenses incurred in the transaction,
will be made by the Subadviser in the manner the Subadviser considers
to be the most equitable and consistent with its fiduciary obligations
to the Portfolio and to its other clients.

e. The Subadviser will maintain all accounts, books and records with
respect to the Portfolios as are required of an investment adviser of a
registered investment company pursuant to the Investment Company Act
and Investment Advisers Act of 1940 (the "Investment Advisers Act") and
the rules thereunder.

3. COMPENSATION OF SUBADVISER

The Adviser will pay the Subadviser with respect to each Portfolio the
compensation specified in Appendix A to this Agreement.

4. LIABILITY OF SUBADVISER

Neither the Subadviser nor any of its affiliates, officers, partners or
employees, nor anyone who controls the Subadviser (or any of its affiliates,
officers, partners or employees) within the meaning of Section 15 of the
Securities Act of 1933 (the "1933 Act"), shall be liable to the Adviser or Trust
for any loss suffered by the Adviser or Trust resulting from any error of
judgment made in the good faith exercise of the Subadviser's investment
discretion in connection with selecting Portfolio investments except for losses
resulting from willful misfeasance, bad faith or gross negligence of, or from
reckless disregard of, the duties of the Subadviser or any of its affiliates,
partners or employees; and neither the Subadviser nor any of its affiliates,
officers, partners or employees, nor anyone who controls the Subadviser (or any
of its affiliates, officers, partners or employees) within the meaning of
Section 15 of the 1933 Act, shall be liable to the Adviser or Trust for any loss
suffered by the Adviser or Trust resulting from any other matters to which this
Agreement relates (i.e., those other matters specified in Sections 2 and 8 of
this Agreement), except for losses resulting from willful misfeasance, bad
faith, or gross negligence in the performance of, or from disregard of, the
duties of the Subadviser or any of its affiliates, partners or employees.

2
<PAGE>

5. SUPPLEMENTAL ARRANGEMENTS

6. CONFLICTS OF INTEREST

7. REGULATION

8. DURATION AND TERMINATION OF AGREEMENT

If the shareholders of any Portfolio fail to approve the Sub-Advisory
Agreement or any continuance of the New Sub-Advisory Agreement that is submitted
to shareholders for approval, the Subadviser will continue to act as investment
subadviser with respect to such Portfolio pending the required approval of the
Agreement or its continuance or of any contract with the Subadviser or a
different adviser or subadviser or other definitive action; provided, that the
compensation received by the Subadviser in respect of such Portfolio during such
period is in compliance with Rule 15a-4 under the Investment Company Act.

This Agreement may be terminated at any time, without the payment of
any penalty, by the Trustees of the Trust, by the vote of a majority of the
outstanding voting securities of the Trust, or with respect to any Portfolio by
the vote of a majority of the outstanding voting securities of such Portfolio,
on sixty days' written notice to the Adviser and the Subadviser, or by the
Adviser or Subadviser on sixty days' written notice to the Trust and the other
party. This agreement will automatically terminate, without the payment of any
penalty, in the event of its assignment (as defined in the Investment Company
Act) or in the event the Advisory Agreement between the Adviser and the Trust
terminates for any reason.

9. PROVISION OF CERTAIN INFORMATION BY SUBADVISER

The Subadviser will promptly notify the Adviser in writing of the
occurrence of any of the following

3
<PAGE>

events:

c. any change in actual control of the Subadviser, which constitutes an
assignment of this Agreement under the Investment Company Act or the
portfolio manager of any Portfolio.

10. INDEMNIFICATION

a. The Adviser agrees to indemnify and hold harmless the Subadviser from
and against any and all claims, losses, liabilities or damages
(including reasonable attorneys' fees and other related expenses)
("Losses") arising from or in connection with this Agreement or the
performance by the Subadviser of its duties hereunder; provided,
however, that the Subadviser shall not be indemnified hereunder for
Losses arising from or in connection with this Agreement or the
performance by the Subadviser of its duties hereunder resulting from
the Subadviser's or any of its employees' willful misfeasance, bad
faith, gross negligence or reckless disregard.

b. The Subadviser agrees to indemnify and hold harmless the Adviser from
and against any and all Losses arising from the Subadviser's, or any of
its employees', affiliates', officers', or parties', willful
malfeasance, bad faith, gross negligence, or reckless disregard in
connection with this Agreement or the performance by the Subadviser of
its duties hereunder; provided, however, that the Adviser shall not be
indemnified hereunder for Losses arising from or in connection with
this Agreement or the performance by the Adviser for its duties
hereunder resulting from the Adviser's or any of its employees' willful
misfeasance, bad faith, gross negligence, or reckless disregard.

11. DISCLOSURE

Except as otherwise provided by applicable law or this Agreement,
neither the Trust nor the Adviser shall, without the prior written consent of
the Subadviser (such consent not to be unreasonably withheld or delayed), make
available to the general public any representations regarding or references to
the Subadviser or any of its affiliates (in each case, "Disclosure") in any
disclosure document; provided, however, that the Subadviser shall be deemed to
have consented to the use of any Disclosure if (i) the Advisor has submitted
such Disclosure to the Subadviser for its approval a reasonable period of time
prior to any regulatory filing date or other deadline for the use of the
Disclosure and (ii) the Subadviser does not, within five (5) business days of
the Subadviser's receipt of such Disclosure (or such other period of time as
agreed to by the Adviser and the Subadviser), provide the Adviser with notice of
its disapproval of such Disclosure. Notwithstanding the preceding sentence, the
Adviser shall not be required to obtain the Subadviser's approval of any
Disclosure if obtaining such approval by the process described in the preceding
sentence would cause the Trust or the Adviser to violate any applicable law,
rule or regulation as reasonably determined by the Adviser or the Trustees of
the Trust. For the purposes of this Section 11, the term "affiliate" shall mean
any person controlling, controlled by or under common control with the
Subadviser.

12. ADV

The Adviser acknowledges receipt of the most recent current Form ADV of
the Subadviser.

4
<PAGE>

13. PROXY VOTING

The Adviser shall be responsible for voting all proxies received by the Trust in
connection with any of the securities held in the Portfolios managed by the
Subadviser.

14. AMENDMENTS TO THE AGREEMENT

15. ENTIRE AGREEMENT

This Agreement contains the entire understanding and agreement of the
parties.

16. HEADINGS

The headings in the sections of this Agreement are inserted for
convenience of reference only and shall not constitute a part hereof.

17. NOTICES

18. SEVERABILITY

19. GOVERNING LAW

20. LIMITATION OF LIABILITY

5
<PAGE>

Declaration collectively as Trustees, but not as individuals or personally; and
no Trustee, shareholder, officer, employee or agent of the Trust shall be held
to any personal liability, nor shall resort be had to their private property,
for the satisfaction of any obligation or claim, in connection with the affairs
of the Trust or any portfolio thereof, but only the assets belonging to the
Trust, or to the particular portfolio with which the obligee or claimant dealt,
shall be liable.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal by their duly authorized officers as of the date first
mentioned above.

American General Asset Management Corp.

by:
----------------------------

Morgan Stanley Dean Witter Investment
Management Inc.

by:
----------------------------

6
<PAGE>

APPENDIX A
----------

The Subadviser shall serve as investment subadviser for the following
portfolio of the Trust. The Adviser will pay the Subadviser, as full
compensation for all services provided under this Agreement, the fee computed
separately for each such Portfolio at an annual rate as follows (the "Subadviser
Percentage Fee"):

International Equity Portfolio: .50% of the first $50,000,000, .45%
between $50,000,000 and $200,000,000, .40% between $200,000,000 and
$500,000,000 and .35% on the excess over $500,000,000 of the average
net assets of the Portfolio;

The Subadviser Percentage Fee for each Portfolio shall be accrued for
each calendar day and the sum of the daily fee accruals shall be paid monthly to
the Subadviser. The daily fee accruals will be computed by multiplying the
fraction of one over the number of calendar days in the year by the applicable
annual rate described in the preceding paragraph, and multiplying this product
by the net assets of the Portfolio as determined in accordance with the Trust's
prospectus and statement of additional information as of the close of business
on the previous business day on which the Trust was open for business.

If this Agreement becomes effective or terminates before the end of any
month, the fee (if any) for the period from the effective date to the end of
such month or from the beginning of such month to the date of termination, as
the case may be, shall be prorated according to the proportion which such period
bears to the full month in which such effectiveness or termination occurs.

<PAGE>

NORTH AMERICAN FUNDS
SUBADVISORY AGREEMENT

AGREEMENT made as of March 10, 2000, between American General Asset
Management Corp., a Delaware corporation (the "Adviser"), and INVESCO Funds
Group, Inc., a Delaware corporation (the "Subadviser"). In consideration of the
mutual covenants contained herein, the parties agree as follows:

1. APPOINTMENT OF SUBADVISER

The Subadviser undertakes to act as investment subadviser to, and, subject
to the supervision of the Trustees of North American Funds (the "Trust") and the
terms of this Agreement, to manage the investment and reinvestment of the assets
of the Portfolios specified in Appendix A to this Agreement as it shall be
amended by the Adviser and the Subadviser from time to time (the "Portfolios").
The Subadviser will be an independent contractor and will have no authority to
act for or represent the Trust or Adviser in any way except as expressly
authorized in this Agreement or another writing by the Trust and Adviser.

2. SERVICES TO BE RENDERED BY THE SUBADVISER TO THE TRUST

a. Subject always to the direction and control of the Trustees of the Trust,
the Subadviser will manage the investments and determine the composition of
the assets of the Portfolios in accordance with the Portfolios'
registration statement, as amended. In fulfilling its obligations to manage
the investments and reinvestments of the assets of the Portfolios, the
Subadviser will:

i. obtain and evaluate pertinent economic, statistical, financial and
other information affecting the economy generally and individual
companies or industries the securities of which are included in the
Portfolios or are under consideration for inclusion in the Portfolios;

ii. formulate and implement a continuous investment program for each
Portfolio consistent with the investment objectives and related
investment policies for each such Portfolio as described in the
Trust's registration statement, as amended;

iii. take whatever steps are necessary to implement these investment
programs by the purchase and sale of securities including the placing
of orders for such purchases and sales;

iv. regularly report to the Trustees of the Trust with respect to the
implementation of these investment programs; and

v. provide assistance to the Trust's Custodian regarding the fair value
of securities held by the Portfolios for which market quotations are
not readily available for purposes of enabling the Trust's Custodian
to calculate net asset value.

b. The Subadviser, at its expense, will furnish (i) all necessary investment
and management facilities, including salaries of personnel required for it
to execute its duties faithfully, and (ii) administrative facilities,
including bookkeeping, clerical personnel and equipment necessary for the
efficient conduct of the investment affairs of the Portfolios (excluding
determination of net asset value and shareholder accounting services).

c. The Subadviser will select brokers and dealers to effect all transactions
subject to the following conditions: The Subadviser will place all orders
with brokers, dealers, or issuers, and will negotiate brokerage commissions
if applicable. The Subadviser is directed at all times to seek to execute
brokerage transactions for the Portfolios in accordance with such policies
or practices as may be established by the Trustees and described in the
Trust's registration statement as amended. The Subadviser may pay a
broker-dealer which provides research and brokerage services a higher
spread or commission for a particular transaction than otherwise might have
been charged by another broker-dealer, if the Subadviser determines that
the higher spread or commission is reasonable in relation to the value of
the brokerage and research services that such
<PAGE>

broker-dealer provides, viewed in terms of either the particular
transaction or the Subadviser's overall responsibilities with respect to
accounts managed by the Subadviser. The Subadviser may use for the benefit
of the Subadviser's other clients, or make available to companies
affiliated with the Subadviser or to its directors for the benefit of its
clients, any such brokerage and research services that the Subadviser
obtains from brokers or dealers.

d. On occasions when the Subadviser deems the purchase or sale of a security
to be in the best interest of the Portfolio as well as other clients of the
Subadviser, the Subadviser to the extent permitted by applicable laws and
regulations, may, but shall be under no obligation to, aggregate the
securities to be purchased or sold to attempt to obtain a more favorable
price or lower brokerage commissions and efficient execution. In such
event, allocation of the securities so purchased or sold, as well as the
expenses incurred in the transaction, will be made by the Subadviser in the
manner the Subadviser considers to be the most equitable and consistent
with its fiduciary obligations to the Portfolio and to its other clients.

e. The Subadviser will maintain all accounts, books and records with respect
to the Portfolios as are required by paragraphs (b)(5), (6), (7), (9), (10)
and (11) of Rule 31a-1 under the Investment Company Act of 1940 (the
"Investment Company Act") and Investment Advisers Act of 1940 (the
"Investment Advisers Act") and the rules thereunder.

f. The Subadviser, including its Access Persons (as defined in subsection (e)
of Rule 17j-1 under the Investment Company Act), agrees to observe and
comply with Rule 17j-1 and its Code of Ethics (which shall comply in all
material respects with Rule 17j-1, as the same may be amended from time to
time). On a quarterly basis, the Subadviser will either (i) certify to the
Adviser that the Subadviser and its Access Persons have complied with the
Subadviser's Code of Ethics with respect to the Portfolio or (ii) identify
any material violations which have occurred with respect to the Portfolio.
In addition, the Subadviser will report at least annually to the Adviser
concerning any other violations of the Subadviser's Code of Ethics which
required significant remedial action and which were not previously
reported.

3. COMPENSATION OF SUBADVISER

The Adviser will pay the Subadviser with respect to each Portfolio the
compensation specified in Appendix A to this Agreement.

4. LIABILITY OF SUBADVISER

Neither the Subadviser nor any of its employees shall be liable to the
Adviser or Trust for any loss suffered by the Adviser or Trust resulting from
any error of judgment made in the good faith exercise of the Subadviser's
investment discretion in connection with selecting Portfolio investments except
for losses resulting from willful misfeasance, bad faith or gross negligence of,
or from reckless disregard of, the duties of the Subadviser or any of its
partners or employees; and neither the Subadviser nor any of its employees shall
be liable to the Adviser or Trust for any loss suffered by the Adviser or Trust
resulting from any other matters to which this Agreement relates (i.e., those
other matters specified in Sections 2 and 8 of this Agreement), except for
losses resulting from willful misfeasance, bad faith, or gross negligence in the
performance of, or from disregard of, the duties of the Subadviser or any of its
partners or employees.

5. SUPPLEMENTAL ARRANGEMENTS

The Subadviser may enter into arrangements with other persons affiliated
with the Subadviser to better enable it to fulfill its obligations under this
Agreement for the provision of certain personnel and facilities to the
Subadviser.

2
<PAGE>

6. CONFLICTS OF INTEREST

It is understood that trustees, officers, agents and shareholders of the
Trust are or may be interested in the Subadviser as trustees, officers, partners
or otherwise; that directors, officers, agents and partners of the Subadviser
are or may be interested in the Trust as trustees, officers, shareholders or
otherwise; that the Subadviser may be interested in the Trust; and that the
existence of any such dual interest shall not affect the validity hereof or of
any transactions hereunder except as otherwise provided in the Agreement and
Declaration of Trust of the Trust and the Certificate of Incorporation of the
Subadviser, respectively, or by specific provision of applicable law.

7. REGULATION

8. DURATION AND TERMINATION OF AGREEMENT

If the shareholders of any Portfolio fail to approve the New Sub-Advisory
Agreement the Subadviser will continue to act as investment subadviser with
respect to such Portfolio pending the required approval of the Agreement or its
continuance or of any contract with the Subadviser or a different adviser or
subadviser or other definitive action; provided, that the compensation received
by the Subadviser in respect of such Portfolio during such period is in
compliance with Rule 15a-4 under the Investment Company Act.

This Agreement may be terminated at any time, without the payment of any
penalty, by the Trustees of the Trust, by the vote of a majority of the
outstanding voting securities of the Trust, or with respect to any Portfolio by
the vote of a majority of the outstanding voting securities of such Portfolio,
on sixty days' written notice to the Adviser and the Subadviser, or by the
Adviser or Subadviser on sixty days' written notice to the Trust and the other
party. This agreement will automatically terminate, without the payment of any
penalty, in the event of its assignment (as defined in the Investment Company
Act) or in the event the Advisory Agreement between the Adviser and the Trust
terminates for any reason.

9. PROVISION OF CERTAIN INFORMATION BY SUBADVISER

The Subadviser will promptly notify the Adviser in writing of the
occurrence of any of the following events:

a. the Subadviser fails to be registered as an investment adviser under the
Investment Advisers Act or under the laws of any jurisdiction in which the
Subadviser is required to be registered as an investment adviser in order
to perform its obligations under this Agreement;

3
<PAGE>

b. the Subadviser is served or otherwise receives notice of any action, suit,
proceeding, inquiry or investigation, at law or in equity, before or by any
court, public board or body, involving the affairs of the Trust; and

c. any change in actual control or management of the Subadviser or the
portfolio manager of any Portfolio.

10. PROVISION OF CERTAIN INFORMATION BY THE ADVISER

11. SERVICES TO OTHER CLIENTS

The Adviser understand, and has advised the Trust's Board of Trustees, that
the Subadviser now acts, or may in the future act, as an investment adviser to
fiduciary and other managed accounts and as investment adviser or subadviser to
other investment companies. Further, the Adviser understands, and has advised
the Trust's Board of Trustees that the Subadviser and its affiliates may give
advice and take action for its accounts, including investment companies, which
differs from advice given on the timing or nature of action taken for the
Portfolio. The Subadviser is not obligated to initiate transaction for the
Portfolio in any security which the Subadviser, its principals, affiliates or
employees may purchase or sell for their own accounts or other clients.

12. AMENDMENTS TO THE AGREEMENT

13. ENTIRE AGREEMENT

This Agreement contains the entire understanding and agreement of the
parties.

14. HEADINGS

The headings in the sections of this Agreement are inserted for convenience
of reference only and shall not constitute a part hereof.

15. NOTICES

4
<PAGE>

16. SEVERABILITY

Should any portion of this Agreement for any reason be held to be void in
law or in equity, the Agreement shall be construed, insofar as is possible, as
if such portion had never been contained herein.

17. GOVERNING LAW

18. LIMITATION OF LIABILITY

The Amended and Restated Agreement and Declaration of Trust dated February
18, 1994, a copy of which, together with all amendments thereto (the
"Declaration"), is on file in the office of the Secretary of The Commonwealth of
Massachusetts, provides that the name "North American Funds" refers to the
Trustees under the Declaration collectively as Trustees, but not as individuals
or personally; and no Trustee, shareholder, officer, employee or agent of the
Trust shall be held to any personal liability, nor shall resort be had to their
private property, for the satisfaction of any obligation or claim, in connection
with the affairs of the Trust or any portfolio thereof, but only the assets
belonging to the Trust, or to the particular portfolio with which the obligee or
claimant dealt, shall be liable.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
under seal by their duly authorized officers as of the date first mentioned
above.

American General Asset Management Corp.

by: ______________________________

` INVESCO Funds Group, Inc.

by: ______________________________

5
<PAGE>

APPENDIX A

Mid Cap Growth Fund: .550% of the first $50,000,000, .500% between
$50,000,000 and $100,000,000, .450% between $100,000,000 and $250,000,000,
.400% between $250,000,000 and $500,000,000 and .350% on the excess over
$500,000,000 of the average net assets of the Fund.

Balanced Fund : .400% of the first $50,000,000, .400% between $50,000,000
and $100,000,000, .350% between $100,000,000 and $250,000,000 and .300% on
the excess over $250,000,000 of the average net assets of the Fund.

The Subadviser Percentage Fee for each Portfolio shall be accrued for each
calendar day and the sum of the daily fee accruals shall be paid monthly to the
Subadviser. The daily fee accruals will be computed by multiplying the fraction
of one over the number of calendar days in the year by the applicable annual
rate described in the preceding paragraph, and multiplying this product by the
net assets of the Portfolio as determined in accordance with the Trust's
prospectus and statement of additional information as of the close of business
on the previous business day on which the Trust was open for business.

<PAGE>

NORTH AMERICAN FUNDS
SUBADVISORY AGREEMENT

AGREEMENT made this March 10, 2000, between American General Asset
Management Corp., a Delaware corporation (the "Adviser"), and Founders Asset
Management LLC, a Delaware limited liability company (the "Subadviser"). In
consideration of the mutual covenants contained herein, the parties agree as
follows:

1. APPOINTMENT OF SUBADVISER

The Subadviser undertakes to act as investment subadviser to, and,
subject to the supervision of the Trustees of North American Funds (the "Trust")
and the terms of this Agreement, to manage the investment and reinvestment of
the assets of the Portfolios specified in Appendix A to this Agreement as it
shall be amended by the Adviser and the Subadviser from time to time (the
"Portfolios"). The Subadviser will be an independent contractor and will have no
authority to act for or represent the Trust or Adviser in any way except as
expressly authorized in this Agreement or another writing by the Trust and
Adviser.

2. SERVICES TO BE RENDERED BY THE SUBADVISER TO THE TRUST

i. obtain and evaluate pertinent economic, statistical, financial
and other information affecting the individual companies or
industries the securities of which are included in the
Portfolios or are under consideration for inclusion in the
Portfolios;

iii. take whatever steps are necessary to implement these
investment programs by the purchase and sale of securities
including the placing of orders for such purchases and sales;

iv. regularly report to the Trustees of the Trust with respect to
the implementation of these investment programs;

v. provide recommendations, in accordance with procedures and
methods established by the Trustees of the Trust, of the fair
value of securities held by the Portfolios for which market
quotations are not readily available for purposes of enabling
the Trust's Custodian to calculate net asset value; and

vi. vote proxies in accordance with the Proxy Voting Policy of the
Subadviser.

b. The Subadviser, at its expense, will furnish (i) all necessary
investment and management facilities, including salaries of personnel
required for it to execute its duties faithfully, and (ii)
administrative facilities, including bookkeeping, clerical personnel
and equipment necessary for the efficient conduct of the investment
affairs of the Portfolios (excluding determination of net asset value
and shareholder accounting services).

-1-
<PAGE>

for the Portfolios in accordance with such policies or practices as may
be established by the Trustees and described in the Trust's
registration statement as amended. To the extent permitted by Section
28(e) of the Securities Exchange Act of 1934, the Subadviser may pay a
broker-dealer which provides research and brokerage services a higher
spread or commission for a particular transaction than otherwise might
have been charged by another broker-dealer, if the Subadviser
determines that the higher spread or commission is reasonable in
relation to the value of the brokerage and research services that such
broker-dealer provides, viewed in terms of either the particular
transaction or the Subadviser's overall responsibilities with respect
to accounts managed by the Subadviser. The Subadviser may use for the
benefit of the Subadviser's other clients, or make available to
companies affiliated with the Subadviser or to its members, officers or
directors for the benefit of its clients, any such brokerage and
research services that the Subadviser obtains from brokers or dealers.

d. The Subadviser will maintain all accounts, books and records with
respect to the Portfolios in connection with the Subadviser's provision
of services under this Agreement as are required of an investment
adviser of a registered investment company pursuant to the Investment
Company Act of 1940 (the "Investment Company Act") and Investment
Advisers Act of 1940 (the "Investment Advisers Act") and the rules
thereunder.

e. The Subadviser will maintain all accounts, books and records with
respect to the Portfolios as are required of an investment adviser of a
registered investment company pursuant to the Investment Company Act of
1940 (the "Investment Company Act") and Investment Advisers Act of 1940
(the "Investment Advisers Act") and the rules thereunder.

f. The Subadviser agrees to observe and comply with Rule 17j-1 under the
Investment Company Act, as the same may be amended from time to time
("Rule 17j-1"), and with Subadviser's Code of Ethics (which shall
comply in all material respects with Rule 17j-1). The Subadviser also
shall use its best efforts to cause its Access Persons (as defined in
subsection (e) of Rule 17j-1) to observe and comply with Rule 17j-1 and
its Code of Ethics. On a quarterly basis, the Subadviser will either
(i) certify to the Adviser that the Subadviser and its Access Persons
have complied with the Subadviser's Code of Ethics with respect to the
Fund or (ii) identify any material violations which have occurred with
respect to the Fund. In addition, the Subadviser will report at least
annually to the Adviser concerning any other violations of the
Subadviser's Code of Ethics concerning the Portfolios which required
significant remedial action and which were not previously reported.

3. COMPENSATION OF SUBADVISER

The Adviser will pay the Subadviser with respect to each Portfolio the
compensation specified in Appendix A to this Agreement.

4. LIABILITY OF SUBADVISER

Neither the Subadviser nor any of its members or employees shall be
liable to the Adviser or Trust for any loss suffered by the Adviser or Trust
resulting from any error of judgment made in the good faith exercise of the
Subadviser's investment discretion in connection with selecting Portfolio
investments except for losses resulting from willful misfeasance, bad faith or
gross negligence of, or from reckless disregard of the duties of, the Subadviser
or any of its members or employees; and neither the Subadviser nor any of its
members or employees shall be liable to the Adviser or Trust for any loss
suffered by the Adviser or Trust resulting from any other matters to which this
Agreement relates (i.e., those other matters specified in Sections 2 and 8 of
this Agreement), except for losses resulting from willful misfeasance, bad
faith, or negligence in the performance of, or from disregard of the duties of,
the Subadviser or any of its members or employees.

-2-
<PAGE>

5. SUPPLEMENTAL AND OTHER ARRANGEMENTS

The services of the Subadviser to the Trust are not to be deemed to be
exclusive, the Subadviser and any person controlled by or under common control
with the Subadviser being free to render investment advisory and other services
to any other person or entity.

6. CONFLICTS OF INTEREST

It is understood that trustees, officers, agents and shareholders of
the Trust are or may be interested in the Subadviser as trustees, officers,
partners or otherwise; that directors, officers, agents and members of the
Subadviser are or may be interested in the Trust as trustees, officers,
shareholders or otherwise; that the Subadviser may be interested in the Trust;
and that the existence of any such dual interest shall not affect the validity
hereof or of any transactions hereunder except as otherwise provided in the
Agreement and Declaration of Trust of the Trust and the Certificate of Formation
and Operating Agreement of the Subadviser, respectively, or by specific
provision of applicable law.

7. REGULATION

8. DURATION AND TERMINATION OF AGREEMENT

Unless sooner terminated, this Agreement will continue in effect with
respect to each Portfolio for a period more than two years from the date of its
initial effectiveness only so long as such continuance is specifically approved
at least annually either by the Trustees of the Trust or by a majority of the
outstanding voting securities of such Portfolio, provided that in either event
such continuance shall also be approved by the vote of a majority of the
Trustees of the Trust who are not interested persons (as defined in the
Investment Company Act) of any party to this Agreement cast in person at a
meeting called for the purpose of voting on such approval.

This Agreement may be terminated at any time, without the payment of
any penalty, by the Trustees of the Trust, by the vote of a majority of the
outstanding voting securities of the Trust or, with respect to any Portfolio, by
the vote of a majority of the outstanding voting securities of such Portfolio on
sixty days' written notice to the Adviser and the Subadviser, or, with respect
to any or all Portfolios, by the Adviser or Subadviser on sixty days' written
notice to the Trust and the other party. This agreement will automatically
terminate, without the payment of any penalty, in the event of its assignment
(as defined in the Investment Company Act) or with respect to a Portfolio in the
event the Advisory Agreement between the Adviser and the Trust terminates with
respect to such Portfolio for any reason.

9. PROVISION OF CERTAIN INFORMATION BY SUBADVISER

The Subadviser will promptly notify the Adviser in writing of the
occurrence of any of the following events:

-3-
<PAGE>

c. the managing member or controlling member of the Subadviser or the
portfolio manager of any Portfolio changes.

10. AMENDMENTS TO THE AGREEMENT

This Agreement may be amended by the parties only if such amendment is
specifically approved by the vote of a majority of the Trustees of the Trust who
are not interested persons of any party to this Agreement, cast in person at a
meeting called for the purpose of voting on such approval, and, if required by
applicable law, by the vote of a majority of the outstanding securities of each
Portfolio affected by the amendment.

11. ENTIRE AGREEMENT

This Agreement contains the entire understanding and agreement of the
parties.

12. HEADINGS

The headings in the sections of this Agreement are inserted for
convenience of reference only and shall not constitute a part hereof.

13. NOTICES

14. SEVERABILITY

15. GOVERNING LAW

16. LIMITATION OF LIABILITY

-4-
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal by their duly authorized officers as of the date first
mentioned above.

American General Asset Management Corp.

by:
--------------------------------

Founders Asset Management LLC

by:
--------------------------------

-5-
<PAGE>

APPENDIX A
----------

The Subadviser shall serve as investment subadviser for the following
Portfolios of the Trust. The Adviser will pay the Subadviser, as full
compensation for all services provided under this Agreement, the fee computed
separately for each such Portfolio at an annual rate as follows (the "Subadviser
Percentage Fee"):

International Small Cap Fund: .500% of the first $300,000,000, .450%
between $300,000,000 and $500,000,000 and .400% on the excess over
$500,000,000 of the average net assets of the Fund;

Large Cap Growth Fund: .500% of the first $50,000,000, .450% between
$50,000,000 and $200,000,000, .425% between $200,000,000 and
$500,000,000, .400% between $500,000,000 and $850,000,000 and .350% on
the excess over $850,000,000 of the average net assets of the Fund;

Global Equity Fund: .500% of the first $50,000,000, .450% between
$50,000,000 and $200,000,000, .400% between $200,000,000 and
$500,000,000 and .350% on the excess over $500,000,000 of the average
net assets of the Fund;

The Subadviser Percentage Fee for each Portfolio shall be accrued for
each calendar day this Agreement is in force and the sum of the daily fee
accruals shall be paid monthly to the Subadviser. The daily fee accruals will be
computed by multiplying the fraction of one over the number of calendar days in
the year by the applicable annual rate described in the preceding paragraph, and
multiplying this product by the net assets of the Portfolio as determined in
accordance with the Trust's prospectus and statement of additional information
as of the close of business on the previous business day on which the Trust was
open for business.

If this Agreement becomes effective or terminates before the end of any
month, the fee (if any) for the period from the effective date to the end of
such month or from the beginning of such month to the date of termination, as
the case may be, shall be prorated according to the proportion which such period
bears to the full month in which such effectiveness or termination occurs.

-6-

<PAGE>

NORTH AMERICAN FUNDS
SUBADVISORY AGREEMENT

AGREEMENT made as of March 10, 2000, between American General Asset
Management Corp., a Delaware corporation (the "Adviser"), and T. Rowe Price
Associates, Inc. a Maryland corporation (the "Subadviser"). In consideration of
the mutual covenants contained herein, the parties agree as follows:

1. APPOINTMENT OF SUBADVISER

The Subadviser undertakes to act as investment subadviser to, and,
subject to the supervision of the Trustees of North American Funds (the "Trust")
and the terms of this Agreement, to manage the investment and reinvestment of
the assets of the Portfolios specified in Appendix A to this Agreement as it
shall be amended by the Adviser and the Subadviser from time to time (the
"Portfolios"). The Subadviser will be an independent contractor and will have no
authority to act for or represent the Trust or Adviser in any way except as
expressly authorized in this Agreement or another writing by the Trust and
Adviser.

2. SERVICES TO BE RENDERED BY THE SUBADVISER TO THE TRUST

i. obtain and evaluate pertinent economic, statistical, financial
and other information affecting the economy generally and
individual companies or industries the securities of which are
included in the Portfolios or are under consideration for
inclusion in the Portfolios;

iii. take whatever steps are necessary to implement these
investment programs by the purchase and sale of securities
including the placing of orders for such purchases and sales;

iv. regularly report to the Trustees of the Trust with respect to
the implementation of these investment programs;

vi. vote proxies in accordance with the Proxy Voting Policy of the
Trust.

b. The Subadviser, at its expense, will furnish (i) all necessary
investment and management facilities, including salaries of personnel
required for it to execute its duties faithfully, and (ii)
administrative facilities, including bookkeeping, clerical personnel
and equipment necessary for the efficient conduct of the investment
affairs of the Portfolios (excluding determination of net asset value
and shareholder accounting services).

otherwise might have been charged by another broker-dealer, if the
Subadviser determines that the higher spread or commission is
reasonable in relation to the value of the brokerage and research
services that such broker-dealer provides, viewed in terms of either
the particular transaction or the Subadviser's overall responsibilities
with respect to accounts managed by the Subadviser. The Subadviser may
use for the benefit of the Subadviser's other clients, or make
available to companies affiliated with the Subadviser or to its
directors for the benefit of its clients, any such brokerage and
research services that the Subadviser obtains from brokers or dealers.

e. The Subadviser will maintain all accounts, books and records with
respect to the Portfolios as are required of an investment adviser of a
registered investment company pursuant to the Investment Company Act of
1940 (the "Investment Company Act") and Investment Advisers Act of 1940
(the "Investment Advisers Act") and the rules thereunder.

3. COMPENSATION OF SUBADVISER

The Adviser will pay the Subadviser with respect to each Portfolio the
compensation specified in Appendix A to this Agreement.

4. LIABILITY OF SUBADVISER

5. SUPPLEMENTAL ARRANGEMENTS

2
<PAGE>

6. CONFLICTS OF INTEREST

7. REGULATION

8. DURATION AND TERMINATION OF AGREEMENT

This Agreement shall become effective as of March 1, 2000. The
Agreement will continue in effect for a period more than two years from the date
of its execution only so long as such continuance is specifically approved at
least annually either by the Trustees of the Trust or by a majority of the
outstanding voting securities of each of the Portfolios, provided that in either
event such continuance shall also be approved by the vote of a majority of the
Trustees of the Trust who are not interested persons (as defined in the
Investment Company Act) of any party to this Agreement cast in person at a
meeting called for the purpose of voting on such approval. The required
shareholder approval of the Agreement or of any continuance of the Agreement
shall be effective with respect to any Portfolio if a majority of the
outstanding voting securities of the series (as defined in Rule 18f-2(h) under
the Investment Company Act) of shares of that Portfolio votes to approve the
Agreement or its continuance, notwithstanding that the Agreement or its
continuance may not have been approved by a majority of the outstanding voting
securities of (a) any other Portfolio affected by the Agreement or (b) all the
portfolios of the Trust.

If the shareholders of any Portfolio fail to approve the New
Sub-Advisory Agreement the Subadviser will continue to act as investment
subadviser with respect to such Portfolio pending the required approval of the
Agreement or its continuance or of any contract with the Subadviser or a
different adviser or subadviser or other definitive action; provided, that the
compensation received by the Subadviser in respect of such Portfolio during such
period is in compliance with Rule 15a-4 under the Investment Company Act.

This Agreement may be terminated at any time, without the payment of
any penalty, by the Trustees of the Trust, by the vote of a majority of the
outstanding voting securities of the Trust, or with respect to any Portfolio by
the vote of a majority of the outstanding voting securities of such Portfolio,
on sixty days' written notice to the Adviser and the Subadviser, or by the
Adviser or Subadviser on sixty days' written notice to the Trust and the other
party. This agreement will automatically terminate, without the payment of any
penalty, in the event of its assignment (as defined in the Investment Company
Act) or in the event the Advisory Agreement between the Adviser and the Trust
terminates for any reason.

9. PROVISION OF CERTAIN INFORMATION BY SUBADVISER

The Subadviser will promptly notify the Adviser in writing of the
occurrence of any of the following events:

3
<PAGE>

c. any change in actual control or management of the Subadviser or the
portfolio manager of any Portfolio.

10. PROVISION OF CERTAIN INFORMATION BY THE ADVISER

The Adviser shall furnish the Subadviser with copies of the Trust's
Prospectus and Statement of Additional Information, and any reports made by the
Trust to its shareholders, as soon as practicable after such documents become
available. The Adviser shall furnish the Subadviser with any further documents,
materials or informaiton that the Subadviser may reasonably request to enable it
to perform its duties pursuant to this Agreement.

11. SERVICES TO OTHER CLIENTS

The Adviser understand, and has advised the Trust's Board of Trustees,
that the Subadviser now acts, or may in the future act, as an investment adviser
to fiduciary and other managed accounts and as investment adviser or subadviser
to other investment companies. Further, the Adviser understands, and has advised
the Trust's Board of Trustees that the Subadviser and its affiliates may give
advice and take action for its accounts, including investment companies, which
differs from advice given on the timing or nature of action taken for the
Portfolio. The Subadviser is not obligated to initiate transaction for the
Portoflio in any security which the Subadviser, its principals, affiliates or
employees may purchase or sell for their own acounts or other clients.

12. AMENDMENTS TO THE AGREEMENT

13. ENTIRE AGREEMENT

This Agreement contains the entire understanding and agreement of the
parties.

14. HEADINGS

The headings in the sections of this Agreement are inserted for
convenience of reference only and shall not constitute a part hereof.

15. NOTICES

4
<PAGE>

16. SEVERABILITY

17. GOVERNING LAW

18. LIMITATION OF LIABILITY

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal by their duly authorized officers as of the date first
mentioned above.

American General Asset Management Corp.

by:
-----------------------------

T. Rowe Price Associates, Inc.

by:
-----------------------------

5
<PAGE>

APPENDIX A
----------

Science & Technology Fund: .600% of the first $500,000,000 and .550% on
the excess over $500,000,000 of the average net assets of the Portfolio.

<PAGE>

NORTH AMERICAN FUNDS
SUBADVISORY AGREEMENT

AGREEMENT made as of March 10, 2000, between American General Asset
Management Corp., a Delaware corporation (the "Adviser"), and Neuberger Berman
Management, Inc., a Delaware corporation (the "Subadviser"). In consideration of
the mutual covenants contained herein, the parties agree as follows:

1. APPOINTMENT OF SUBADVISER

The Subadviser undertakes to act as investment subadviser to, and,
subject to the supervision of the Trustees of North American Funds (the "Trust")
and the terms of this Agreement, to manage the investment and reinvestment of
the assets of the Portfolios specified in Appendix A to this Agreement as it
shall be amended by the Adviser and the Subadviser from time to time (the
"Portfolios"). The Subadviser will be an independent contractor and will have no
authority to act for or represent the Trust or Adviser in any way except as
expressly authorized in this Agreement or another writing by the Trust and
Adviser.

2. SERVICES TO BE RENDERED BY THE SUBADVISER TO THE TRUST

i. obtain and evaluate pertinent economic, statistical, financial
and other information affecting the economy generally and
individual companies or industries the securities of which are
included in the Portfolios or are under consideration for
inclusion in the Portfolios;

iii. take whatever steps are necessary to implement these
investment programs by the purchase and sale of securities
including the placing of orders for such purchases and sales;

iv. regularly report to the Trustees of the Trust with respect to
the implementation of these investment programs;

vi. vote proxies in accordance with the Proxy Voting Policy of the
Trust.

b. The Subadviser, at its expense, will furnish (i) all necessary
investment and management facilities, including salaries of personnel
required for it to execute its duties faithfully, and (ii)
administrative facilities, including bookkeeping, clerical personnel
and equipment necessary for the efficient conduct of the investment
affairs of the Portfolios (excluding determination of net asset value
and shareholder accounting services).

e. The Subadviser will maintain all accounts, books and records with
respect to the Portfolios as are required of an investment adviser of a
registered investment company pursuant to the Investment Company Act of
1940 (the "Investment Company Act") and Investment Advisers Act of 1940
(the "Investment Advisers Act") and the rules thereunder.

3. COMPENSATION OF SUBADVISER

The Adviser will pay the Subadviser with respect to each Portfolio the
compensation specified in Appendix A to this Agreement.

4. LIABILITY OF SUBADVISER

5. SUPPLEMENTAL ARRANGEMENTS

2
<PAGE>

6. CONFLICTS OF INTEREST

7. REGULATION

8. DURATION AND TERMINATION OF AGREEMENT

If the shareholders of any Portfolio fail to approve the New
Sub-Advisory Agreement the Subadviser will continue to act as investment
subadviser with respect to such Portfolio pending the required approval of the
Agreement or its continuance or of any contract with the Subadviser or a
different adviser or subadviser or other definitive action; provided, that the
compensation received by the Subadviser in respect of such Portfolio during such
period is in compliance with Rule 15a-4 under the Investment Company Act.

This Agreement may be terminated at any time, without the payment of
any penalty, by the Trustees of the Trust, by the vote of a majority of the
outstanding voting securities of the Trust, or with respect to any Portfolio by
the vote of a majority of the outstanding voting securities of such Portfolio,
on sixty days' written notice to the Adviser and the Subadviser, or by the
Adviser or Subadviser on sixty days' written notice to the Trust and the other
party. This agreement will automatically terminate, without the payment of any
penalty, in the event of its assignment (as defined in the Investment Company
Act) or in the event the Advisory Agreement between the Adviser and the Trust
terminates for any reason.

9. PROVISION OF CERTAIN INFORMATION BY SUBADVISER

The Subadviser will promptly notify the Adviser in writing of the
occurrence of any of the following events:

3
<PAGE>

c. any change in actual control or management of the Subadviser or the
portfolio manager of any Portfolio.

10. PROVISION OF CERTAIN INFORMATION BY THE ADVISER

11. SERVICES TO OTHER CLIENTS

The Adviser understand, and has advised the Trust's Board of Trustees,
that the Subadviser now acts, or may in the future act, as an investment adviser
to fiduciary and other managed accounts and as investment adviser or subadviser
to other investment companies. Further, the Adviser understands, and has advised
the Trust's Board of Trustees that the Subadviser and its affiliates may give
advice and take action for its accounts, including investment companies, which
differs from advice given on the timing or nature of action taken for the
Portfolio. The Subadviser is not obligated to initiate transaction for the
Portfolio in any security which the Subadviser, its principals, affiliates or
employees may purchase or sell for their own accounts or other clients.

12. AMENDMENTS TO THE AGREEMENT

13. ENTIRE AGREEMENT

This Agreement contains the entire understanding and agreement of the
parties.

14. HEADINGS

The headings in the sections of this Agreement are inserted for
convenience of reference only and shall not constitute a part hereof.

15. NOTICES

4
<PAGE>

16. SEVERABILITY

17. GOVERNING LAW

18. LIMITATION OF LIABILITY

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
under seal by their duly authorized officers as of the date first mentioned
above.

American General Asset Management Corp.

by:
------------------------------

` Neuberger Berman Management, Inc.

by:
------------------------------

5
<PAGE>

APPENDIX A
----------

Mid Cap Value Fund: .500% of the first $100,000,000, .475% between
$100,000,000 and $250,000,000, .450% between $250,000,000 and
$500,000,000, .425% between $500,000,000 and $750,000,000 and .400% on
the excess over $750,000,000 of the average net assets of the
Portfolio.

<PAGE>

NORTH AMERICAN FUNDS
SUBADVISORY AGREEMENT

AGREEMENT made as of March 10, 2000, between American General Asset
Management Corp., a Delaware corporation (the "Adviser"), and Credit Suisse
Asset Management, LLC, a Delaware corporation (the "Subadviser"). In
consideration of the mutual covenants contained herein, the parties agree as
follows:

1. APPOINTMENT OF SUBADVISER

The Subadviser undertakes to act as investment subadviser to, and,
subject to the supervision of the Trustees of North American Funds (the "Trust")
and the terms of this Agreement, to manage the investment and reinvestment of
the assets of the Portfolios specified in Appendix A to this Agreement as it
shall be amended by the Adviser and the Subadviser from time to time (the
"Portfolios"). The Subadviser will be an independent contractor and will have no
authority to act for or represent the Trust or Adviser in any way except as
expressly authorized in this Agreement or another writing by the Trust and
Adviser.

2. SERVICES TO BE RENDERED BY THE SUBADVISER TO THE TRUST

i. obtain and evaluate pertinent economic, statistical, financial
and other information affecting the economy generally and
individual companies or industries the securities of which are
included in the Portfolios or are under consideration for
inclusion in the Portfolios;

iii. take whatever steps are necessary to implement these
investment programs by the purchase and sale of securities
including the placing of orders for such purchases and sales;

iv. regularly report to the Trustees of the Trust with respect to
the implementation of these investment programs;

vi. vote proxies in accordance with the Proxy Voting Policy of the
Trust.

b. The Subadviser, at its expense, will furnish (i) all necessary
investment and management facilities, including salaries of personnel
required for it to execute its duties faithfully, and (ii)
administrative facilities, including bookkeeping, clerical personnel
and equipment necessary for the efficient conduct of the investment
affairs of the Portfolios (excluding determination of net asset value
and shareholder accounting services).

e. The Subadviser will maintain all accounts, books and records with
respect to the Portfolios as are required of an investment adviser of a
registered investment company pursuant to the Investment Company Act of
1940 (the "Investment Company Act") and Investment Advisers Act of 1940
(the "Investment Advisers Act") and the rules thereunder.

3. COMPENSATION OF SUBADVISER

The Adviser will pay the Subadviser with respect to each Portfolio the
compensation specified in Appendix A to this Agreement.

4. LIABILITY OF SUBADVISER

5. SUPPLEMENTAL ARRANGEMENTS

2
<PAGE>

6. CONFLICTS OF INTEREST

7. REGULATION

8. DURATION AND TERMINATION OF AGREEMENT

If the shareholders of any Portfolio fail to approve the New
Sub-Advisory Agreement the Subadviser will continue to act as investment
subadviser with respect to such Portfolio pending the required approval of the
Agreement or its continuance or of any contract with the Subadviser or a
different adviser or subadviser or other definitive action; provided, that the
compensation received by the Subadviser in respect of such Portfolio during such
period is in compliance with Rule 15a-4 under the Investment Company Act.

This Agreement may be terminated at any time, without the payment of
any penalty, by the Trustees of the Trust, by the vote of a majority of the
outstanding voting securities of the Trust, or with respect to any Portfolio by
the vote of a majority of the outstanding voting securities of such Portfolio,
on sixty days' written notice to the Adviser and the Subadviser, or by the
Adviser or Subadviser on sixty days' written notice to the Trust and the other
party. This agreement will automatically terminate, without the payment of any
penalty, in the event of its assignment (as defined in the Investment Company
Act) or in the event the Advisory Agreement between the Adviser and the Trust
terminates for any reason.

9. PROVISION OF CERTAIN INFORMATION BY SUBADVISER

The Subadviser will promptly notify the Adviser in writing of the
occurrence of any of the following events:

3
<PAGE>

c. any change in actual control or management of the Subadviser or the
portfolio manager of any Portfolio.

10. PROVISION OF CERTAIN INFORMATION BY THE ADVISER

11. SERVICES TO OTHER CLIENTS

The Adviser understand, and has advised the Trust's Board of Trustees,
that the Subadviser now acts, or may in the future act, as an investment adviser
to fiduciary and other managed accounts and as investment adviser or subadviser
to other investment companies. Further, the Adviser understands, and has advised
the Trust's Board of Trustees that the Subadviser and its affiliates may give
advice and take action for its accounts, including investment companies, which
differs from advice given on the timing or nature of action taken for the
Portfolio. The Subadviser is not obligated to initiate transaction for the
Portoflio in any security which the Subadviser, its principals, affiliates or
employees may purchase or sell for their own acounts or other clients.

12. AMENDMENTS TO THE AGREEMENT

13. ENTIRE AGREEMENT

This Agreement contains the entire understanding and agreement of the
parties.

14. HEADINGS

The headings in the sections of this Agreement are inserted for
convenience of reference only and shall not constitute a part hereof.

15. NOTICES

4
<PAGE>

16. SEVERABILITY

17. GOVERNING LAW

18. LIMITATION OF LIABILITY

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
under seal by their duly authorized officers as of the date first mentioned
above.

American General Asset Management Corp.

by:
----------------------------

` Credit Suisse Asset Management, LLC

by:
----------------------------

5
<PAGE>

APPENDIX A
----------

Small Cap Growth Fund: .550% of the average net assets of the
Portfolio.

<PAGE>

DISTRIBUTION AGREEMENT
----------------------

AGREEMENT made as of March 10, 2000, by and between North American
Funds (the "Trust"), a Massachusetts business trust which intends to engage in
business as an open-end investment company under the Investment Company Act of
1940, as amended (the "Investment Company Act"), and American General Funds
Distributors, Inc. (the "Distributor"), a Delaware corporation registered under
the Securities Exchange Act of 1934, as amended, as a broker-dealer.

1. Appointment of Distributor. The Trust hereby appoints the
--------------------------
Distributor as the principal underwriter and exclusive distributor of shares of
each series of shares of beneficial interest of the Trust (the "Shares") and the
Distributor hereby accepts that appointment.

2. Sale of Shares Through Distributor.
----------------------------------

(a) The Trust hereby grants to the Distributor the exclusive
right to sell, as agent for the Trust not as principal, and to arrange for the
sale of Shares upon the terms herein set forth. The exclusive right hereby
granted shall not apply to Shares issued or transferred or sold: (i) in
connection with the merger or consolidation of any other investment company or
personal holding company with the Trust or one of its portfolio series or the
acquisition by purchase or otherwise of all (or substantially all) the assets or
the outstanding shares of any such company by the Trust or one of its portfolio
series; or (ii) pursuant to reinvestment of dividends or capital gains
distributions; or (iii) pursuant to any reinstatement privilege afforded
redeeming shareholders. It is understood that shares may be purchased directly
through the Trust's transfer and dividend disbursing agent in the manner set
forth in the Trust's prospectus.

(b) The Distributor, either directly or through a promotional
agent selected and compensated by the Distributor, will devote research, time
and effort to effect sales
<PAGE>

of Shares through dealers, and will assist those dealers and their associated
persons to the extent and in whatever manner the Distributor deems appropriate
in order to enhance the sale of Shares, but the Distributor does not undertake
to arrange for the sale of any specific number of Shares. Neither the
Distributor nor any selected dealer nor any other person is authorized by the
Trust to give any information or to make any representations, other than those
contained in the registration statement or related prospectus and statement of
additional information and any sales literature specifically approved by the
Trust. The services of the Distributor to the Trust hereunder are not to be
deemed exclusive and nothing herein contained shall prevent the Distributor from
entering into like arrangements with other investment companies so long as the
performance of its obligations hereunder is not impaired thereby.

(c) The Distributor shall have the right, as agent of the
Trust, to order from the Trust the Shares needed, but not more than the Shares
needed (except for reasonable allowances for clerical errors, delays and errors
of transmission and cancellation of orders), to fill unconditional orders for
Shares received by the Distributor from dealers and investors. The price which
shall be paid to the Trust for the Shares so purchased shall be the net asset
value, determined as set forth in Section 2(e) hereof.

(d) The price at which the Distributor or dealer purchasing
shares through the Distributor may sell Shares to the public shall be the public
offering price determined in accordance with the method set forth in the Trust's
prospectus and statement of additional information.

(e) The net asset value of Shares of the Trust shall be
determined by the Trust or any agent of the Trust in accordance with the method
set forth in the prospectus and statement of additional information of the Trust
and guidelines established by the trustees of the Trust (the "Trustees").

(f) The Trust shall have the right to suspend the sale of its
Shares at times when redemption is suspended pursuant to the conditions set
forth in Section 8(c) hereof. The Trust shall also have the right to suspend the
sale of its Shares if a banking moratorium shall have been declared by federal
or applicable state authorities, or if there shall have been some other event,
which, in the judgment of the Trustees,
<PAGE>

makes it impracticable or inadvisable to sell the Shares.

(g) The Trust, or any agent of the Trust designated in writing
by the Trust, shall be advised promptly of all purchase orders for Shares
received by the Distributor. Any order may be rejected by the Trust; provided,
however, that the Trust will not arbitrarily or without reasonable cause refuse
to accept or confirm orders for the purchase of Shares. The Trust (or its agent)
will confirm orders upon their receipt, will make appropriate book entries and,
upon receipt by the Trust (or its agent) of payment therefor, will deliver
deposit receipts or certificates for such Shares pursuant to the instructions of
the Distributor.

3. Sales Charges.
-------------

(a) For the purposes of this Section 3, "Distribution Fees"
shall mean, collectively, (A) the sales charges payable to the Distributor as
set forth in Section 3(b), below, and (B) the amounts payable to the Distributor
under the Distribution Plans as set forth in Section 3(c) and "Effective Date"
shall mean the date hereof.

(b) The Distributor shall have the right to receive the sales
charges (including, without limitation, contingent deferred sales charges) in
respect of Shares (i) sold during the term of this Agreement or any continuation
hereof, (ii) later issued in connection with the reinvestment of dividends
(whether ordinary, capital gain or tax exempt dividends, or return of capital)
paid in respect of Shares described in clause (i) or this clause (ii), (iii)
later acquired by a holder of Shares described in clause (i) or clause (ii) upon
a free exchange of such Shares for shares of another Fund or (iv) later issued
in connection with a reinvestment of dividends paid in respect of Shares
described in clause (iii) (collectively, "New Distributor Shares"), in each case
under the circumstances, upon the terms and conditions and in the amounts set
forth in the Trust's prospectus at the time of the sale, but excluding "Former
Distributor Shares" (as that term is defined in Section 3 of the Distribution
Agreement between NASL Financial Services, Inc. and the Trust dated January 1,
1996, as amended on September 30, 1997 and as in effect on the date hereof). The
Distributor shall have no right to receive sales charges (including, without
limitation, contingent deferred sales charges) in
<PAGE>

respect of Former Distributor Shares.

(i) with respect to assets attributable to Former Distributor
Shares, the Distributor, in its capacity as distributor, shall not have the
right to receive any amounts payable under such Distribution Plans; and

(ii) with respect to assets attributable to New Distributor
Shares, the Distributor shall have the right to receive one hundred percent
(100%) of the amounts payable under such Distribution Plans.

(d) The Distributor may transfer its right to receive
Distribution Fees (but not its obligations under this Agreement), and such
transfer shall be effective upon written notice from the Distributor to the
Trust. In connection with the foregoing, the Trust is authorized to pay all or a
part of the Distribution Fees directly to such transferee of the Distributor.

(e) The right of the Distributor to receive Distribution Fees
with respect to New Distributor Shares shall survive the termination of this
Agreement.

4. Duties of the Trust. The Trust shall:
-------------------

(a) Furnish to the Distributor copies of its prospectus and
statement of additional information, its annual and interim reports, and other
information, financial statements and papers, including one certified copy of
all financial statements prepared for the Trust by independent public
accountants, to the extent reasonably requested by the Distributor for use in
connection with the distribution of Shares of the Trust.

(b) Take, from time to time, any steps necessary to register
the Shares under the Securities Act of 1933 (the "Securities Act"), so that
there will be available for sale as many Shares as the Distributor reasonably
may be expected to sell.

(c) Use its best efforts to qualify and maintain the
qualification of an appropriate number of its Shares for sale under the
securities laws of those states approved by the Distributor and the Trust, and,
if necessary or appropriate in connection therewith, to qualify and maintain the
qualification of the Trust as a broker-
<PAGE>

dealer in those states; provided that any such qualification may be terminated
or withdrawn by the Trust at any time in its discretion. The Distributor shall
furnish information and other material relating to its affairs and activities
reasonably required by the Trust in connection with any such qualification(s).

5. Duties of the Distributor. The Distributor shall:
-------------------------
(a) Use its best efforts in all respects duly to conform with
the requirements of all federal and state laws relating to the sale of the
Shares of the Trust and with all applicable rules and regulations of all
regulatory bodies, including the National Association of Securities Dealers,
Inc. (the "NASD").

(b) Use its best efforts to obtain any approval or clearance
required from the NASD or other regulatory authorities with respect to sales
material for the Trust or any of its portfolio series.

6. Selected Dealer Agreements. The Distributor shall:
--------------------------

(a) Have the right to enter into selected dealer agreements
with securities dealers of its choice ("selected dealers") for the sale of
Shares. Shares sold to selected dealers shall be for resale by the selected
dealers only at the public offering price determined as set forth in Section
2(d) hereof. Any agreement with selected dealers pertaining to sales of the
Shares shall be approved by the Trustees.

(b) Offer and sell Shares, within the United States, only to
selected dealers that are members in good standing of the NASD.

7. Payment of Expenses.
-------------------

(a) The Trust shall bear all costs and expenses of the Trust,
except for those expenses assumed by any investment adviser or subadviser of the
Trust or any other party contracting with the Trust or by the Distributor
pursuant to Section 7(b) of this Agreement.

(b) The Distributor shall bear the costs and expenses of: (i)
any
<PAGE>

payments made to selected dealers; (ii) the printing and distributing of any
copies of prospectuses, statements of additional information and annual and
interim reports to be used in connection with the offering of Shares to selected
dealers or prospective investors pursuant to this Agreement after the same have
been prepared and set in type and copies have been printed and distributed to
regulatory bodies and existing shareholders as deemed necessary; (iii)
preparing, printing and distributing any other literature used by the
Distributor or furnished by it for use by selected dealers in connection with
the offering of the Shares for sale to the public; (iv) any advertising expenses
incurred by the Distributor in connection with the offering; and (v) the
registration or qualification of the Distributor as a broker-dealer under
federal and states laws and of continuing those registrations or qualifications.

8. Redemption of Shares. Any of the outstanding Shares may be
--------------------
tendered for redemption at any time, and the Trust agrees to redeem the Shares
so tendered in accordance with its obligations as set forth in Article IV of its
Agreement and Declaration of Trust, as amended from time to time, in accordance
with the applicable provisions set forth in the prospectus and statement of
additional information of the Trust, and subject to the following conditions:

(a) The price to be paid to redeem the Shares shall be equal
to the net asset value calculated in accordance with the provisions of Section
2(e) hereof.
(b) The Trust shall pay the total amount of the redemption
price as defined in the above paragraph pursuant to the instructions of the
Distributor on or before the seventh day subsequent to receiving the notice of
redemption in proper form.

(c) Redemption of Shares or payment may be suspended at times
when the New York Stock Exchange is closed, when trading on that Exchange is
suspended or restricted, when an emergency exists as a result of which disposal
by a portfolio series of the Trust of its investment securities is not
reasonably practicable or it is not reasonably practicable for a portfolio
series of the Trust fairly to determine the value of its net assets, or during
any other period when the Securities and Exchange Commission, by order, so
permits.
<PAGE>

9. Repurchase of Shares. The Trust hereby authorizes the
--------------------
Distributor to repurchase upon the terms and conditions set forth in the Trust's
prospectus and statement of additional information (as supplemented by written
instructions given by the Trust to the Distributor from time to time), as the
Trust's agent and for the Trust's account, such Shares as may be offered for
sale to the Trust from time to time by holders of those Shares or their agents.
No offers for sale of Shares to the Trust shall be accepted by the Distributor
during any time when the redemption of Shares by the Trust shall have been
suspended.

10. Indemnification.
---------------

(a) The Trust shall indemnify and hold harmless the
Distributor and each person, if any, who controls the Distributor, against any
loss, liability, claim, damage or expense (including the reasonable cost of
investigating or defending any alleged loss, liability, claim, damage or expense
and reasonable counsel fees incurred in connection therewith), arising by reason
of any person acquiring any Shares, which may be based upon the Securities Act,
or on any other statute or at common law, on the ground that the registration
statement or related prospectus and statement of additional information, as from
time to time amended and supplemented, or an annual or interim report to
shareholders of the Trust, includes an untrue statement of material fact or
omits to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading, unless that statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Trust in connection therewith by or on behalf of the
Distributor; provided, however, that in no case (i) is the indemnity of the
Trust in favor of the Distributor and/or its controlling persons to be deemed to
protect the Distributor or any controlling persons thereof against any liability
to the Trust or its security holders to which the Distributor or any of its
controlling persons would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence in the performance of their duties or by reason of
the reckless disregard of their obligations and duties under this Agreement; or
(ii) is the Trust to be liable under
<PAGE>

its indemnity agreement contained in this paragraph with respect to any claim
made against the Distributor or its controlling persons, unless the Distributor
or its controlling persons, as the case may be, shall have notified the Trust in
writing within a reasonable time after the summons or other first legal process
giving information of the nature of the claim shall have been served upon the
Distributor or its controlling persons (or after the Distributor or its
controlling persons shall have received notice of service on any designated
agent), but failure to notify the Trust of any claim shall not relieve the Trust
from any liability which it may have to the person against whom the action is
brought otherwise than on account of the indemnity agreement contained in this
paragraph. The Trust will be entitled to participate at its own expense in the
defense, or, if it so elects, to assume the defense, of any suit brought to
enforce any such liability, but if the Trust elects to assume the defense, that
defense shall be conducted by counsel chosen by it and satisfactory to the
Distributor or the Distributor's controlling person or persons, defendant or
defendants in the suit. In the event the Trust elects to assume the defense of a
suit and retain satisfactory counsel, the Distributor or its controlling person
or persons, defendant or defendants in the suit, shall bear the fees and
expenses of any additional counsel retained by them, but, in case the Trust does
not elect to assume the defense of such a suit, it will reimburse the
Distributor or the Distributor's controlling person or persons, defendant or
defendants in the suit, for the reasonable fees and expenses of any counsel
retained by them. The Trust shall promptly notify the Distributor of the
commencement of any litigation or proceedings against it or any of its officers
or Trustees in connection with the issuance or sale of any of the Shares.

(b) The Distributor shall indemnify and hold harmless the
Trust and each of its Trustees and officers and each person, if any, who
controls the Trust against any loss, liability, claim, damage or expense
described in the foregoing indemnity contained in subsection (a) of this Section
10, but only with respect to statements or omissions made in reliance upon, and
in conformity with, information furnished to the Trust by or on behalf of the
Distributor for use in connection with the registration statement or related
prospectus and statement of additional information, as from time to time
amended, or the annual or interim reports to shareholders. In case any action
shall be
<PAGE>

brought against the Trust or any person so indemnified, in respect of which
indemnity may be sought against the Distributor, the Distributor shall have the
rights and duties given to the Trust, and the Trust and each person so
indemnified shall have the rights and duties given to the Distributor by the
provisions of subsection (a) of this Section 10.

11. Continuation, Amendment or Termination of the Agreement.
-------------------------------------------------------

(a) This Agreement shall become effective as of the date first
written above and shall continue in full force and effect from year to year so
long as continuance is approved at least annually (i) by the Trustees or by vote
of a majority of the outstanding voting securities of the Trust and (ii) by vote
of a majority of the Trustees who are not interested persons of the Distributor
or of the Trust cast in person at a meeting called for the purpose of voting on
such approval, provided, however, that (a) this Agreement may at any time be
terminated without the payment of any penalty either by vote of the Trustees or
by vote of a majority of the outstanding voting securities of the Trust, on
sixty (60) days' notice to the Distributor; (b) this Agreement shall immediately
terminate in the event of its assignment; and (c) this Agreement may be
terminated by the Distributor on ninety (90) days' written notice to the Trust.

(b) This Agreement may be amended at any time by mutual
consent of the parties, provided that the consent on the part of the Trust shall
have been approved (i) by the Trustees or by vote of a majority of the
outstanding voting securities of the Trust and (ii) by vote of a majority of the
Trustees who are not interested persons of the Distributor or of the Trust cast
in person at a meeting called for the purpose of voting on the amendment.

(c) Any notice under this Agreement shall be given in writing,
addressed and delivered, or mailed post-paid, to the other party at the
principal office of the other party.

12. Definitions. For the purposes of this Agreement, the terms
-----------
"vote of a majority of the outstanding voting securities," "interested person"
and "assignment" shall have the respective meanings specified in the Investment
Company Act.

13. Agreement and Declaration of Trust. The Agreement and
----------------------------------
Declaration of
<PAGE>

Trust establishing the Trust, dated September 28, 1988, a copy of which,
together with all amendments thereto (the "Declaration"), is on file in the
office of the Secretary of the Commonwealth of Massachusetts, provides that the
name "North American Security Trust" or "North American Funds" refers to the
Trustees under the Declaration collectively as Trustees, but not as individuals
or personally; and no Trustee, shareholder, officer, employee or agent of the
Trust shall be held to any personal liability, nor shall resort be had to their
private property for the satisfaction of any obligation or claim, in connection
with the affairs of the Trust or any portfolio series thereof, but only the
assets belonging to the Trust, or to the particular portfolio series with which
the obligee or claimant dealt, shall be liable.
<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed this agreement as
of the day and year first above written.

NORTH AMERICAN FUNDS

By:
----------------------------

AMERICAN GENERAL
FUNDS DISTRIBUTORS, INC.

By:
----------------------------

<PAGE>

DEALER AGREEMENT

AGREEMENT dated as of ___________, 2000 by and among American General Funds
Distributors, Inc. ("AGFD"), a Delaware corporation and _______________________
("Selling Dealer"), each of whom is registered as a broker-dealer under the
Securities and Exchange Act of 1934, as amended, and is a member of the National
Association of Securities Dealers, Inc. ("NASD").

I. INTRODUCTION

WHEREAS, AGFD has been appointed Principal Underwriter of the shares of one or
more management investment companies (open-end or closed-end) registered under
the Investment Company Act of 1940 (the "Act") engaged in a continuous offering
of shares ("Fund" or "Funds") and has the rights as agent for the Funds to sell
shares of the Funds; and

WHEREAS, Selling dealer wishes to participate in the distribution of the shares
of the Funds;

NOW THEREFORE, in consideration of the premises of the mutual covenants
hereinafter contained, the parties hereto agree as follows:

II. AGREEMENT TO SELL

Subject to the terms of and conditions set forth in the Agreement, AGFD shall,
acting as agent for the Funds and not as principal, sell shares of the Funds to
Selling Dealer which shall, acting as principal (dealer) for its own account and
not as broker or agent for, or employee of, AGFD or the Fund, resell such shares
to the public.

III. TERMS AND CONDITIONS

All transactions in shares of the Funds shall be subject to the following terms
and conditions:

1. Shares will be offered pursuant to the then current prospectus of a
Fund. If such prospectus contains provisions inconsistent with this Agreement,
the prospectus shall control.

2. Orders received from Selling Dealer will be accepted through AGFD only
at the public offering price applicable to each order as set forth in the then
current prospectus of a Fund. All orders from Selling Dealer will be confirmed
by or on behalf of a Fund in writing. Procedures for processing orders shall be
determined by AGFD and instructions relating thereto shall be
<PAGE>

forwarded to selling Dealer from time to time. A Fund and AGFD each may accept
or reject any order in their sole discretion.

3. AGFD will pay to Selling Dealer from its own assets, and not from Fund
assets, such discounts or commission payments as specified in Schedule A hereto
and in the circumstances set forth in the then current prospectus of a Fund.

4. If any shares of a Fund sold to Selling Dealer under the terms of this
Agreement are tendered for redemption or repurchase within seven business days
after the date of the confirmation of the original purchase by Selling Dealer,
Selling Dealer shall forfeit its rights to any discount or commission with
respect to such shares. AGFD shall notify Selling Dealer of any such redemption
or repurchase within ten business days from the date on which the request for
redemption or repurchase is delivered to AGFD or to a Fund, and Selling Dealer
shall immediately refund to AGFD any discount or commission allowed or paid in
connection with such sale. In the event of any such redemption or repurchase,
AGFD shall refund to a Fund its share of the sales charge.

5. Selling Dealer shall purchase shares of a Fund only from the Fund
through AGFD and from Selling Dealer's customers. It is expressly understood
that Selling Dealer will not purchase shares subject to a periodic repurchase
offer from its customers. If shares are purchased from a Fund, Selling Dealer
agrees that all such purchases shall be made only to cover orders already
received by Selling Dealer or for its own bona fide investment. If shares are
purchased from customers, Selling Dealer agrees to pay such customers not less
than the price to be paid by a Fund with respect to purchase accepted through
AGFD at such time.

6. Selling Dealer shall sell shares only: (a) to customers at the public
offering price which is the next determined net asset value per share after the
order is received, in states where shares of the Fund may be legally sold by
Selling Dealer and in accordance with the terms of the then current prospectus,
registrations and permits of the Fund; and (b) to the Fund upon tender for
redemption or repurchase, which redemption or repurchase shall be effected in
the manner set forth in the then current prospectus of a Fund. In the event of
such a tender, excluding those pursuant to Rule 23c-3 under the Act, Selling
Dealer may act as principal for its own account, it agrees to pay its customer
not less than the price received from a Fund or AGFD acting for a Fund. If
selling Dealer acts as agent for its customer, it agrees not to charge the
customer more than a fair commission for handling the transaction.

7. All sales of shares of a Fund by Selling Dealer shall be

2
<PAGE>

made at the public offering price as determined as set forth in the then current
prospectus of a Fund, and the Selling Dealer shall not withhold orders from AGFD
so as to profit as a result of such withholding.

8. AGFD will not forward to a Fund for acceptance any conditional order
from Selling Dealer for the sale, repurchase or redemption of shares of the
Fund.

9. Payment for shares ordered by Selling Dealer must be received by a
Fund's transfer agent by the later of: (a) three business days after Selling
Dealer receives such customer's purchase order; or (b) one business day after
Selling Dealer receives payment from the customer. If such payment is not so
received, a Fund or AGFD as agent for a Fund reserves the right, without notice,
to immediately cancel the sale, in which case Selling Dealer shall be held
responsible for any loss, including loss of profit, suffered by AGFD or a Fund
resulting from the failure of Selling Dealer to make payment as specified above.

10. Unless other arrangements for payment and delivery are made, shares of
a Fund sold to Selling Dealer pursuant to this Agreement shall be available for
delivery, against payment, at the office of State Street Bank and Trust Company,
225 Franklin Street, Boston, Massachusetts 02110, unless otherwise agreed to by
AGFD.

11. No person is authorized to make any representations concerning the
shares of a Fund except those contained in the then current prospectus of a Fund
and in such other printed information subsequently issued by a Fund of AGFD as
information supplemental to such prospectus. Any such supplemental materials
shall not be modified by Selling Dealer without the prior written consent of
AGFD. Moreover, Selling Dealer shall not make use of any advertisement or sales
literature which refers specifically to a Fund unless such material has been
approved in writing by AGFD prior to its first use by Selling Dealer. In
purchasing shares of a Fund from AGFD, Selling Dealer shall rely solely on the
representations contained in the then current prospectus of a Fund and
supplemental information referred to above.

12. AGFD shall provide Selling Dealer upon request, without any expense to
Selling Dealer, copies in reasonable numbers of the then current prospectus of a
Fund, any information issued supplementing such prospectus and such other
material as AGFD determines is necessary or desirable for use in connection with
sales of the shares of a Fund.

13. A Fund and AGFD each reserve the right in their discretion, without
notice, to suspend sales or withdraw the offering of the shares of a Fund
entirely.

3
<PAGE>

14. AGFD will, upon request, inform Selling Dealer as to the states in
which shares of a Fund have been qualified for sale under, or are exempt from
the requirements of, applicable state securities laws. AGFD assumes no
responsibility or obligation, however, as to Selling Dealer's right to sell
shares of a Fund in any jurisdiction.

15. Selling Dealer appoints a Fund's transfer agent as its agent to execute
the purchase transactions of shares of a Fund in accordance with the terms and
provisions of any account, program, plan, or service established or used by
Selling Dealer's customers and to confirm each purchase to such customers on
Selling Dealer's behalf. Selling Dealer guarantees the legal capacity of its
customers purchasing shares of a Fund and any other person or entity in whose
name shares are to be registered.

16. In the event of a tender pursuant to a Rule 23c-3 periodic repurchase
offer conducted in accordance with procedures described in a Fund's prospectus,
Selling Dealer may act as principal for its own account or as agent for its
customer. Selling Dealer shall notify AGFD daily during the pendency of a
repurchase offer of the number of shares tendered by its customers, or by itself
acting as principal, for repurchase. Selling Dealer will be responsible for the
receipt of tendered shares by its customers, and forwarding such tenders to a
Fund or AGFD in a timely fashion, according to the terms of the repurchase
offer, and shall indemnify and hold harmless AGFD from any claims relating to a
customer's participation in a repurchase offer or failure to so participate.
Selling Dealer agrees to cooperate reasonably with a Fund, AGFD or any affiliate
of a Fund or AGFD, in the conduct of repurchase offers.

17. Selling Dealer agrees that it will not sell any shares of a Fund
subject to a periodic repurchase offer to any account over which it exercises
discretionary authority.

GENERAL PROVISIONS

A. WAIVER

Failure of any party to insist upon strict compliance with any of the terms
and conditions of this Agreement shall not be construed as a waiver of any of
the terms and conditions, but the same shall remain in full force and effect. No
waiver of any of the provisions of this Agreement shall be deemed to be, or
shall constitute, a waiver of any other provisions, whether or not similar, nor
shall any waiver constitute a continuing waiver.

B. BINDING EFFECT

4
<PAGE>

This Agreement shall be binding on and shall inure to the benefit of
parties to it and respective successors and assigns, provided that Selling
Dealer may assign this Agreement or any of the rights and obligations hereunder
only with the prior written consent of AGFD.

C. REGULATIONS

All parties agree to observe and comply with the existing laws, rules and
regulations of applicable local, state, and federal regulatory authorities and
with those which may be enacted or adopted while this Agreement is in force
regulating the business contemplated hereby in any jurisdiction in which the
business described herein is to be transacted.

D. DISPUTES

All parties agree to this Agreement agree to abide by the NASD's Business
Conduct Rules and agree that any dispute arising hereunder shall be submitted to
arbitration held in Boston, Massachusetts in accordance with the Code of
Arbitration Procedure of the NASD, or similar rules or codes, in effect at the
time of submission of any such dispute.

5
<PAGE>

E. GOVERNING LAW

This Agreement shall be construed in accordance with and governed by the
laws of the Commonwealth of Massachusetts.

F. AMENDMENT OF AGREEMENT

AGFD reserves the right to amend this Agreement at any time and Selling
Dealer agrees that an order to purchase shares of a Fund placed after notice of
any such amendment shall constitute Selling Dealer's consent to any such
amendment.

G. TERMINATION

Each of the parties to this Agreement has the right to cancel this
Agreement with or without cause on notice to the other party. Each of the
parties represents that it is a member in good standing of the NASD and agrees
that termination or suspension of such membership at any time shall immediately
terminate this Agreement.

H. LIABILITY

AGFD shall have full authority to take such action as it may deem
advisable in respect of all matters pertaining to the continuous offering. AGFD
shall be under no liability to Selling Dealer except for lack of good faith,
gross negligence, willful misconduct, and for obligations expressly assumed by
AGFD in this Agreement. Nothing contained in this paragraph is intended to
operate as, and the provisions of this paragraph shall not in any way whatsoever
constitute, a waiver by Selling Dealer of compliance with any provision of the
Securities Act, or of the rules and regulations of the Securities and exchange
Commission issued under the Securities Act.

I. PROSPECTUS

If the Prospectus contains any provisions inconsistent with the terms of
the Agreement, the Prospectus shall control.

J. NOTICES

All notices or communications shall be sent to the address shown below, or
to such other address as the party may request by giving written notice to the
other party.

6
<PAGE>

For American General Funds Distributors, Inc.
286 Congress Street
Boston, MA 02110
(800) 872-8037
Attention: Thomas J. Brown

For Selling Dealer

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

Tel. _____________________________

Attention: ______________________

I. SIGNATURES

American General Funds Distributors, Inc.

By:
------------------------------------
Name and Title (Please Print)

----------------------------------------
Signature

Selling Dealer:

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

By:
------------------------------------
Name and Title (Please Print)

----------------------------------------
Signature

----------------------------------------
Back Office/Operations Contact

Tel:
-----------------------------------

<PAGE>

EX 9 (J).DOC

[DRAFT]

May __, 2000

North American Funds
286 Congress Street
Boston, Massachusetts 02210

Ladies and Gentlemen:

You have informed us that you propose to register under the Securities
Act of 1933, as amended (the "Act"), and offer and sell from time to time shares
of beneficial interest, without par value (the "Shares"), of your series listed
on Exhibit A hereto (the "New Funds"), at not less than "net asset value", as
defined in your Amended and Restated Agreement and Declaration of Trust, as
amended (the "Declaration of Trust").

We have examined the Declaration of Trust on file in the office of the
Secretary of The Commonwealth of Massachusetts and the Clerk of the City of
Boston and are familiar with the Action taken by your trustees to authorize the
issue and sale to the public from time to time of authorized and unissued
Shares. We have documents, receipts and records as we have deemed necessary for
the purpose of this opinion.

Based on the foregoing, we are of the opinion that:

1. The beneficial interests in the New Funds are divided into an
unlimited number of Shares.

2. The issue and sale of the authorized but unissued Shares has been
duly authorized under Massachusetts law, and, upon the original issue and sale
of any of such authorized but unissued Shares and upon receipt of the authorized
consideration therefor in an amount not less than the net asset value of the
Shares at the time of their sale, the shares so issued will be validly issued,
fully paid and nonassessable by the Trust.

The Trust is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Trust.
However, the Agreement and Declaration of Trust disclaims shareholder that
notice of such disclaimer be given in each agreement, obligation or instrument
entered into or executed by the Trust or its Trustees. The Agreement and
Declaration of Trust provides for indemnification out of the property of the
Emerging Growth Fund series (the "series") for all loss and expense of any
shareholder of the Series held personally liable solely by reason of his being
or having been a shareholder. Thus, the risk of
<PAGE>

a shareholder incurring financial loss on account of being a shareholder is
limited to circumstances in which the Series itself would be unable to meet its
obligations.

We understand that this opinion is to be used in connection with the
registration of an indefinite number of shares of offering and sale pursuant to
the Act. We consent to the filing of this opinion with and as part of your
Registration Statement on Form N-1A (File No. 033-27958) relating to such
offering and sale.

Very truly yours,

Ropes & Gray

-2-

<PAGE>

NORTH AMERICAN FUNDS
AMENDED AND RESTATED
MULTICLASS PLAN PURSUANT TO RULE 18F-3
UNDER THE INVESTMENT COMPANY ACT OF 1940

February 27, 2000

I. Background
----------

This amended and restated plan (the "Plan") pertains to the issuance by
the North American Funds (the "Trust") on behalf of the investment portfolios
listed on Schedule A hereto (each a "Fund") of multiple classes of shares of
beneficial interest and is being adopted by the Trust pursuant to Rule 18f-3
under the Investment Company Act of 1940, as amended (the "1940 Act"). The Plan
amends and restates the Trust's previous Amended and Restated Multiclass Plan
(dated December 16, 1997) in order to modify the conversion features of the
Funds' Class C shares, add an additional class of shares and additional
portfolios, as described herein. The Plan does not effect any other changes to
the Trust's existing multiple class structure (other than the addition of a new
class of shares, Class D) including its distribution/service arrangements and
expense allocations. These distribution/service arrangements and expense
allocations were previously approved by the Trust's Board of Trustees in
accordance with an exemptive order (the "Order") granted by the Securities and
Exchange Commission to the Trust on February 28, 1994 and, along with other
features of the Trust's multiple class structure, are set forth below. Reference
should be made to the Trust's prospectus for further information about the
Trust's multiple class structure.

II. Creation of Classes
-------------------

The Trust's Declaration of Trust authorizes the Trust to issue multiple
classes of shares. Pursuant to action taken by the Board of Trustees of the
Trust at its March 17-18, 1994 meeting and in accordance with the terms of the
Order, the Trust on April 1, 1994 established three classes of shares for each
of the Funds, designated "Class A" shares, "Class B" shares and "Class C"
shares. The shares of the Strategic Income, Investment Quality Bond, U.S.
Government Securities, National Municipal Bond and Money Market Funds
outstanding on April 1, 1994 were reclassified as "Class A" shares and the
shares of the Global Growth, Growth, Growth and Income and Asset Allocation
Funds outstanding on April 1, 1994 were reclassified as "Class C" shares.

Pursuant to action taken by the Board of Trustees of the Trust at its
December 12-13, 1996 meeting, the Trust on December 31, 1996 established an
additional class of shares for each of the Funds (other than the five Lifestyle
Funds), designated "Class D" shares.

Pursuant to action taken by the Board of Trustees of the Trust at its
December 16, 1997 meeting, the Trust on December 16, 1997 established additional
portfolios: Emerging Growth and Tax-Sensitive Equity Funds with "Class A"
shares, "Class B" shares and "Class C" shares.

Pursuant to action taken by the Board of Trustees of the Trust at its
June 8, 1999 meeting, the Trustees effective July 1, 1999 eliminated the
conversion of Class C shares purchased on or

-1-
<PAGE>

after July 1, 1999, including shares purchased through reinvestment of dividends
and distributions, into Class A shares after ten years.

III. Sales Charges
-------------

Class A shares are offered for sale at net asset value per share plus a
front end sales charge (with the exception of Class A shares of the Money Market
Fund, which are offered without a sales charge). Certain purchases of Class A
shares qualify for a waived or reduced front end sales charge. In addition,
purchases of Class A shares above a certain dollar amount are offered for sale
at net asset value subject to a CDSC (currently 1% of the dollar amount subject
thereto during the first year after purchase).

Class B shares are sold at net asset value per share without a front
end sales charge but are subject to a CDSC (currently 5% of the dollar amount
subject thereto during the first and second year after purchase, and declining
by 1% each year thereafter to 0% after the sixth year (with the exception of
Class B shares of the Money Market Fund, which are not subject to any CDSC upon
redemption)).

Class C shares are sold at net asset value without a front end sales
charge but for Class C shares purchased after May 1, 1995 subject to a CDSC
(currently 1% of the dollar amount subject thereto on redemptions made within
one year of purchase (with the exception of Class C shares of the Money Market
Fund, which are not subject to any CDSC upon redemption)).

Class D shares are sold at net asset value without a front end sales
charge or CDSC.

Institutional Class I and Institutional Class II shares are sold at net
asset value without a front end sales charge or CDSC.

The CDSC for each class of shares is assessed in compliance with Rule
6c-10 under the 1940 Act.

IV. Distribution and Service Fees
-----------------------------

According to a plan adopted pursuant to Rule 12b-1 under the 1940 Act
("Rule 12b-1"), Class A shares are subject to a service fee and a distribution
fee (with the exception of Class A shares of the Money Market Fund, which bear
no such fees).

According to a plan adopted pursuant to Rule 12b-1, Class B shares are
subject to a service fee and a distribution fee which is higher than the Class A
service and distribution fee (with the exception of Class B shares of the Money
Market Fund, which bear no such fees).

According to a plan adopted pursuant to Rule 12b-1, Class C shares are
subject to a service fee and a distribution fee which is higher than the Class A
service and distribution fee (with the exception of Class C shares of the Money
Market Fund, which bear no such fees).

Class D shares are not subject to any Rule 12b-1 service fee or
distribution fee.

Institutional Class I and Institutional Class II shares are not subject
to any Rule 12b-1

-2-
<PAGE>

service fee or distribution fee. Institutional Class I and Class II shares may,
however, be subject to an administrative service fee as described in the Trust's
Registration Statement.

V. Exchange and Conversion Features
--------------------------------

Shares of a particular class of a Fund are exchangeable for shares of
the same class of another Fund as set forth in the Trust's Registration
Statement.

Class B shares (except for shares of the Money Market Fund) purchased
prior to October 1, 1997 will automatically convert, based upon relative net
asset value, to Class A shares of the same Fund six years after purchase. Class
B shares (except for shares of the Money Market Fund) purchased on or after
October 1, 1997 will automatically convert, based upon relative net asset value,
to Class A shares of the same Fund eight years after purchase. Upon conversion,
these shares will no longer be subject to the higher 12b-1 service and
distribution fee of Class B shares.

Class C shares purchased on or after July 1, 1999, including shares
purchased through reinvestment of dividends and distributions, will not convert
into Class A shares after ten years. Class C shares purchased before July 1,
1999 will continue to convert into Class A shares ten years after the end of the
calendar month in which a shareholder's order to purchase the shares was
accepted. After June 30, 1999, Class C shares will be redeemed or exchanged in
order of the date purchased, with the shares purchased earliest being redeemed
or exchanged first, unless a shareholder specifically requests that specific
shares are redeemed or exchanged.

There are no automatic conversion features for Class A shares, Class D
shares, Institutional Class I shares or Institutional Class II shares.

VI. Allocation of Expenses
----------------------

Expenses of each Fund are borne by the various classes of the Fund on
the basis of relative net assets. The fees identified as "class expenses" (see
below) are to be allocated to each class based on actual expenses incurred, to
the extent that such expenses can properly be so allocated. To the extent that
such expenses cannot be properly allocated, such expenses are to be borne by all
classes on the basis of relative net assets.

The following are "class expenses":

(i) transfer and shareholder servicing agent fees and shareholder
servicing costs;

(ii) printing and postage expenses related to preparing and
distributing to the shareholders of a specific class materials such as
shareholder reports, prospectuses and proxies;

(iii) Blue Sky and SEC registration fees incurred by a class;

(iv) professional fees relating solely to such class;

(v) Trustees' fees, including independent counsel fees, relating to
one class; and

-3-
<PAGE>

(vi) shareholder meeting expenses for meetings of a particular class.

VI. Voting Rights
-------------

All shares of each Fund have equal voting rights and will be voted in
the aggregate, and not by class, except where voting by class is required by law
or by the Declaration of Trust.

VII. Amendments
----------

No material amendment to this Plan may be made unless it is first
approved by a majority of both (a) the full Board of Trustees of the Trust and
(b) those Trustees who are not "interested persons" of the Trust, as that term
is defined in the 1940 Act.

-4-
<PAGE>

SCHEDULE A

INVESTMENT PORTFOLIOS

Global Equity
Growth & Income Fund
Tax-Sensitive Equity Fund
Equity-Income Fund
International Equity Fund
Balanced Fund
Strategic Income Fund
U.S. Government Securities Fund
Municipal Bond Fund
Money Market Fund
International Small Cap Fund
Large Cap Growth Fund
Mid Cap Growth Fund
Small Cap Growth Fund
Core Bond Fund
Mid Cap Value Fund
Stock Index Fund
Small Cap Index Fund
Socially Responsible Fund
High Yield Bond Fund
Aggressive Growth Lifestyle Fund
Moderate Growth Lifestyle Fund
Conservative Growth Lifestyle Fund
Municipal Money Market Fund
Science & Technology Fund
Strategic Growth Fund

-5-

<PAGE>

AGC INVESTMENT ADVISER/
INVESTMENT COMPANY
CODE OF ETHICS

I. Applicability

This Code of Ethics (the "Code") is applicable to all persons designated as
"Access Persons" of the subsidiary firms of American General Corporation ("AGC")
that are registered as investment advisers ("AGC Investment Advisers") with the
Securities and Exchange Commission (the "SEC"), and officers, directors,
trustees and Access Persons of any Investment Company (collectively, "Covered
Persons"). This Code is supplemented by a number of other AGC published
compliance policies, including the Insider Trading Policy as discussed below.

II. Overview of Regulatory Framework

The AGC Investment Advisers supervise the investment portfolios of registered
investment company accounts ("Investment Companies") and other investment
advisory client accounts (collectively, "Advisory Clients"). Pursuant to
investment advisory agreements with the Advisory Clients, the AGC Investment
Advisers are authorized to take all actions necessary and appropriate to carry
out the investment objectives and investment policies established for each
Advisory Client, including, but not limited to, the purchase and sale of
securities on each Advisory Client's behalf. In carrying out these contractual
obligations, the AGC Investment Advisers acknowledge that they have a fiduciary
duty to the Advisory Clients and that this duty is recognized under federal
securities laws and regulations. In particular, the Investment Advisers Act of
1940, as amended (the "Advisers Act"), establishes as a matter of federal law
the fiduciary status of investment advisers and regulates the relationship
between investment advisers and their advisory clients. The Advisers Act, among
other things, prohibits advisers from engaging in practices that constitute
fraud or deceit upon advisory clients, including the practice of an adviser or
an employee of an adviser trading privately in securities for personal benefit
at the same time that its advisory clients are caused to trade in the same
securities.

The Investment Company Act of 1940, as amended (the "1940 Act"), regulates and
controls the relationship between the AGC Investment Advisers and the Investment
Companies that they manage. The 1940 Act specifically prohibits certain types of
financial transactions, either directly or indirectly, involving both the
Investment Company and the Investment Adviser, or officers and employees of the
adviser, unless prior written approval is obtained from the SEC. The 1940 Act
also requires every investment company and each investment adviser for such
investment company to adopt a written code of ethics.

The AGC Investment Advisers and each Investment Company have adopted this
<PAGE>

Code in compliance with both the Advisers Act and the 1940 Act. This Code,
together with the compliance policies of the AGC Investment Advisers, is
designed to detect and prevent violations of the Adviser's Act and the 1940 Act.
The Insider Trading and Securities Fraud Enforcement Act of 1988 (the "Insider
Trading Act") requires all investment advisers to establish, maintain and
enforce written policies and procedures designed to detect and prevent both
insider trading and the misuse of material, nonpublic information. The AGC
Investment Advisers have adopted policies and procedures designed to detect and
prevent insider trading pursuant to the Insider Trading Act. Covered Persons
should examine this Code in conjunction with the provisions of the Insider
Trading Policy adopted by the AGC Investment Advisers.

All personal securities transactions must be conducted consistent with the Code
of Ethics and in a manner to avoid any actual or potential conflict of interest
or any abuse of a Covered Person's position of trust and responsibility. In
conducting personal securities transactions, Covered Persons must not take
inappropriate advantage of their positions and must at all times place the
interest of Advisory Clients first.

Although the AGC Investment Advisers respect the personal freedom and privacy of
their Covered Persons, they believe that, in the regulatory environment in which
they operate, these considerations are outweighed in certain circumstances by
the need to carry out their fiduciary duties to the fullest extent possible.
Therefore, the AGC Investment Advisers have adopted the standards outlined below
to prevent potential conflicts of interest between Covered Persons' personal
business activities and the investment activities of Advisory Clients.

III. Definitions

The following definitions are applicable to terms used in the Code:

1. Access Person. The term "Access Person" means any individual affiliated with
an AGC Investment Adviser or its Advisory Client in a control relationship who,
in connection with his or her regular functions or duties, makes, participates
in, or obtains information regarding the purchase or sale of a Security for an
Advisory Client, or whose functions relate to the making of any recommendations
with respect to these purchases or sales.

2. Beneficial Ownership. The term "Beneficial Ownership" includes accounts of a
spouse or domestic partner, minor children and relatives living in an Access
Person's home, as well as accounts of any other person if by reason of any
contract, understanding, relationship, agreement or other arrangement the Access
Person obtains benefits substantially equivalent to those of ownership,
including benefits associated with survivorship or inheritance. For purposes of
this Code, a prohibition or requirement applicable to any Access Person applies
also to transactions in securities for any account for which the Access Person
has a Beneficial Ownership, including transactions executed by the Access
<PAGE>

Person's spouse or relatives living in the Access Person's household, unless
such account is specifically exempted from such requirement by the Chief
Compliance Officer. A copy of a Release issued by the SEC on the meaning of the
term "Beneficial Ownership" is available upon request, and should be studied
carefully by any Access Person concerned with this definition before preparing
any report.

3. Compliance Officer. The term "Compliance Officer" means a member of the
Compliance Department of an AGC Investment Adviser who is responsible for
monitoring compliance with regulatory requirements and this Code of Ethics, and
any person designated by the Chief Compliance Officer who assists in performing
the above described duties.

4. Considered for Purchase or Sale. A security is being Considered for Purchase
or Sale when a recommendation to purchase or sell the security has been made and
communicated by an authorized Access Person in the course of his or her duties.
With respect to the person making the recommendation, a security is being
Considered for Purchase or Sale when the person seriously considers making such
a recommendation.

5. Control. The term "Control" has the same meaning as in Section 2(a)(9) of the
1940 Act (i.e., the power to exercise a controlling influence over the
management or policies of a company, unless such power is solely the result of
an official position with such company). Any person who owns beneficially,
either directly or through one or more controlled companies, more than 25% of
the voting securities of a company shall be presumed to control such company.

6. Exempt Officers, Directors and Trustees. The phrase "Exempt Officers,
Directors and Trustees" means an officer, director or trustee who is not an
"interested person" of an Investment Company within the meaning of Section
2(a)(19) of the 1940 Act. The determination as to the exempt status of any
officer, director, or trustee shall be made by the Chief Compliance Officer.

7. Investment Company. The term "Investment Company" means an investment company
affiliate of AGC which is registered with the SEC.

8. Investment Personnel. The term "Investment Personnel" includes those
employees who are authorized to make investment decisions or to recommend
securities transactions on behalf of clients, research analysts, and employees
who work directly with portfolio managers and traders in an assistant capacity.

9. Portfolio Manager. The term "Portfolio Manager" means a person with the
direct responsibility and authority to make investment decisions affecting an
Advisory Client, including, but not limited to, private placement, Investment
Company and private account Portfolio Managers.

10. Security or Securities. The term "Security" shall have the same meaning as
set forth in Section 2(a)(36) of the 1940 Act, except that it shall not include
shares of registered open-end investment companies, securities issued or
guaranteed by the U.S. Government, banker's acceptances, bank certificates of
deposit, and commercial paper. Any prohibition or reporting obligation relating
to
<PAGE>

a Security shall apply equally to any option, warrant or right to purchase or
sell the Security and to any Security convertible into or exchangeable for such
Security (i.e., a "Related Security").

IV. Standards of Conduct

1. No Covered Person may engage, directly or indirectly, in any business
transaction or arrangement for personal profit that is inconsistent with the
best interests of Advisory Clients; nor shall he or she make use of any
confidential information gained by reason of his or her affiliation with the AGC
Investment Advisers or their affiliates in order to derive a personal profit for
himself or herself or for any beneficial interest, in violation of the fiduciary
duty owed by the AGC Investment Advisers and their affiliates to Advisory
Clients.

2. No Access Person shall purchase or sell, directly or indirectly, any Security
(or Related Security) in which he or she has, or by reason of the transaction
acquires, any direct or indirect beneficial ownership and that he or she knows
or should have known, at the time of purchase or sale: (i) is being Considered
for Purchase or Sale for an Advisory Client; or (ii) is being purchased or sold
for an Advisory Client. Securities purchased or sold through basket trades for
index-based accounts may be exempted from this prohibition with the approval of
a Compliance Officer.

3. Access Persons and any other AGC employee may not trade in market options
(puts or calls), warrants or other derivative instruments of AGC securities.
Options granted to employees by AGC are not considered market options.

4. Access Persons who are senior officers (i.e., senior vice presidents and
above) of an AGC Investment Adviser may not engage in market transactions
involving AGC securities (including stock and stock options) from the last day
of each fiscal quarter until three business days after AGC releases its earnings
for that quarter.

5. When a Security in which a Portfolio Manager has Beneficial Ownership is
recommended to his/her client for purchase, the Portfolio Manager's interest
(including dates of acquisition and costs) must be disclosed to a Compliance
Officer prior to the recommendation being made. Securities purchased or sold
through basket trades for index-based accounts may be exempted from this
requirement with the approval of a Compliance Officer.

6. No Covered Person may use material, nonpublic information when engaging in
Securities transactions. For example, Covered Persons who are directors of
closed-end Investment Companies may not purchase the closed-end Investment
Company's Securities prior to a dividend distribution of which he or she has
knowledge. Any Access Person who obtains material, confidential information

(a) by reason of his or her employment;

(b) by entering into a special confidential relationship in the conduct of
his or her duties; or
<PAGE>

7. Without obtaining prior written approval from a Compliance Officer, no Access
Person shall dispense any reports, recommendations, or other information
concerning Securities holdings or Securities transactions for Advisory Clients
to anyone outside or inside the AGC Investment Advisers, unless such persons
have a business need for this information as a part of their normal duties and
activities. However, Access Persons may disclose this information

(a) where there is a public report containing the same information;

(b) when the information is dispensed in accordance with compliance procedures
established to prevent conflicts of interest between the AGC Investment Advisers
and their Advisory Clients; or

(c) when the information is reported to directors or trustees of Advisory
Clients or to administrators or other fiduciaries of Advisory Clients and when
these persons receive the information in the course of carrying out their
fiduciary duties. Note: No such information may be dispensed without the prior
approval of a Compliance Officer.

8. No Access Person shall accept directly or indirectly from a broker/dealer or
any other person who transacts business with the AGC Investment Advisers or
their Advisory Clients gifts, gratuities, preferential treatment, valuable
consideration or favors that are excessive in value or frequency which might
reasonably be expected to interfere with or influence the exercise of
independent and objective judgment in carrying out such Access Person's duties
as a fiduciary. Additional limitations and prohibitions on the receipt of gifts
or entertainment can be found in AGC's Gift and Entertainment Policy.

9. No Access Person shall join an investment club, or enter into an investment
partnership (including hedge funds) without obtaining prior written approval
from a Compliance Officer.

10. Portfolio Managers are prohibited from buying or selling a Security,
directly or indirectly, within seven calendar days before and after any Advisory
Client trades in that same Security. All Access Persons are prohibited from
buying or selling a Security, directly or indirectly, within seven calendar days
after any Advisory Client trade and seven calendar days before any anticipated
trade for an Advisory Client in that same Security. With the prior written
approval of the Chief Compliance Officer, securities purchased or sold through
basket trades for index-based accounts may be exempted from this prohibition.

11. Access Persons are prohibited from profiting, directly or indirectly, in the
purchase and sale, or sale and purchase, of the same (or equivalent) Securities
within 60 calendar days. Securities exempted from the prior clearance
requirement as outlined in Section 1 of Article V below are also exempt from
this prohibition.

12. Access Persons shall not purchase, directly or indirectly, any Securities,
or by
<PAGE>

reason of a transaction, acquire direct or indirect beneficial ownership of
Securities, in an initial public offering.

13. Research Analysts are required to obtain prior approval from a Compliance
Officer prior to purchasing or selling an equity Security in an industry he or
she follows unless the analyst has communicated his or her idea to the
appropriate Portfolio Manager or Trader.

Note: The prohibitions outlined in sections 2, 10, 11, and 12 above do not apply
to accounts over which a broker or Power of Attorney has full investment
discretion, although the Compliance Department must be notified of such accounts
in writing and must receive duplicate account statements and confirmations.

V. Prior Clearance Requirements

1. No Access Person shall purchase or sell any Security without obtaining prior
written clearance from a Compliance Officer. This includes direct or indirect
purchases of the Security (e.g., purchases by an Access Person's spouse,
purchases for investment club accounts, etc.). The following Securities are
exempt from the prior clearance requirements (but not from personal trading
reporting requirements): commodities and commodity futures, DRIPs or stock
purchase plans sponsored by AGC or USLIFE Income Fund, Inc., other corporate
DRIPs, index-based securities, transactions for thrift and/or incentive plans
sponsored by AGC and (subject to applicable blackout periods) common stock of
AGC. Any Exempt Officer, Director or Trustee may at his or her option request
preclearance for any proposed purchase or sale.

2. Preclearance is effective only until the close of trading on the day it is
granted, although "after-hours" Internet trades are permitted with proper
pre-clearance, provided that the transaction is effected prior to midnight on
the day it is granted.

3. Limit Orders must be pre-cleared on the day the order is placed with a
broker, prior to the opening of the order. Limit orders are required to be
pre-cleared on subsequent days so long as the order remains open.

4. No Access Person shall acquire directly or indirectly any Beneficial
Ownership of Securities in a private placement without obtaining prior written
approval of the Chief Compliance Officer.

5. No Access Person shall serve on the board of directors of a publicly traded
company without obtaining prior written clearance from a Compliance Officer.

6. No Access Person shall: (i) act as an investment adviser to any other person
or entity for compensation; or (ii) obtain a significant interest in a
broker/dealer.

VI. Exempt Purchases and Sales

The prohibitions of Section 1 of Article IV and Section 1 of Article V shall not
apply to:
<PAGE>

1. Purchases or sales effected in any account over which the Access Person has
no direct or indirect influence or control.

2. Transactions in employee benefit plans or employer-sponsored investment
programs.

3. Purchases which are part of an automatic dividend reinvestment plan.

4. Purchases or sales effected upon the exercise of rights issued by the issuer
pro rata to all holders of a class of its Securities, to the extent the rights
were acquired from such issuer.

5. Purchases or sales effected for accounts for which a broker or Power of
Attorney has full investment discretion. The Compliance Department must be
notified of such accounts in writing and must receive duplicate account
statements and confirmations.

6. Other purchases or sales which are non-volitional (e.g., inherited securities
or Corporate Actions).

VII. Exceptions

1. Exceptions to this Code of Ethics will be granted only in rare circumstances,
and then only with the prior written approval of the Chief Compliance Officer.
Exceptions may be granted only when the Chief Compliance Officer believes that
the potential for conflict is remote. Copies of all written approvals will be
maintained by the Compliance Department and will describe the circumstances
surrounding and the justification for granting the exception. For exceptions
involving Covered Persons of an Investment Company, the Board of Directors of
the Investment Company will be notified at least annually regarding any
exceptions that have been granted pursuant to this provision.

2. The exceptions to the policies and procedures described in this Code of
Ethics should not be viewed as necessarily applicable to the other codes or
written standards of business conduct adopted by AGC or its subsidiaries which
may also be applicable to Access Persons covered under this Code. Exceptions to
these other requirements must be obtained independently.

VIII. Reporting

1. Reporting Obligation. Every Access Person shall report to a Compliance
Officer the information described in Section 3 below with respect to
transactions in any Security in which such Access Person has, or by reason of
such transaction acquires, any direct or indirect Beneficial Ownership in the
Security (e.g., purchases or sales by an Access Person's spouse).

2. Exempt Officers, Directors and Trustees. An Exempt Officer, Director or
Trustee shall report a transaction in a Security if such Officer, Director or
Trustee, at the time of the transaction, knew or, in the ordinary course of
fulfilling his or her official duties as an Exempt Officer, Director or Trustee,
should have known that, during the 15-day period immediately preceding or after
the date of the transaction in a Security by the Officer, Director or Trustee,
such Security
<PAGE>

was purchased or sold for an Advisory Client or was considered by such Advisory
Client for purchase or sale.

3. Form of Report. Quarterly reports of securities transactions shall be made no
later than 10 calendar days after the end of the calendar quarter in which the
transaction to which the report relates was effected, and shall contain the
following information:

(a) The date of the transaction, the issuer's name and the number of shares,
and/or the principal amount of the shares involved;

(b) the nature of the transaction, i.e., purchase, sale or any other type of
acquisition or disposition;

(d) the name of the broker, dealer or bank with or through whom the
transaction was affected.

All reports shall be made on an appropriate form, as distributed by the
Compliance Department. Originals (not copies) of brokerage statements may be
attached to a signed report in lieu of setting forth the information otherwise
required.

4. Disclaimer of Beneficial Ownership. Quarterly reports of securities
transactions shall not be construed as an admission by the person making the
report that he or she has any direct or indirect Beneficial Ownership in the
Security to which the report relates.

5. Notification of Reporting Obligation. The quarterly report of securities
transactions is designed to comply with the requirements of the SEC under the
Advisers Act and the 1940 Act. Every Access Person has a continuing obligation
to file such reports in a timely manner. Information supplied on the reports is
available for inspection by the SEC at any time.

6. Disclosure of Personal Holdings. All Access Persons must disclose all
personal Securities holdings upon commencement of employment and thereafter on
an annual basis.

7. Disclosure of Interest in Transaction. No Covered Person shall recommend any
securities transaction for any Advisory Client without having disclosed his or
her interest, if any, in such Securities or the issuer thereof, including
without limitation: (a) his or her direct or indirect Beneficial Ownership of
any Securities of such issuer; (b) any contemplated transaction by such person
in such Securities; (c) any position with the issuer or its affiliates; (d) any
present or proposed business relationship between the issuer or its affiliates
and such person or any party in which such person has a significant interest;
and (e) any factors about the transaction that are potentially relevant to a
conflicts of interest analysis.

8. Confidentiality. All information obtained from any Covered Persons hereunder
shall be kept in strict confidence, except that reports of securities
transactions will be made available to the SEC or any other regulatory or
self-regulatory
<PAGE>

organization to the extent required by law or regulation.

IX. Certifications

1. All Access Persons, within 10 days of becoming an Access Person, shall
certify that they have: (a) received a copy of this Code; (b) read and
understood the provisions of this Code; and (c) agreed to serve the Advisory
Clients in accordance with the terms of this Code.

2. All Access Persons shall annually certify that they have: (a) read and
understood this Code; (b) complied with the principles of this Code; and (c)
disclosed or reported all personal securities transactions which are required by
the Code to be disclosed or reported.

X. Records of Securities Transactions

Every Access Person shall direct his or her broker to supply the Chief
Compliance Officer, on a timely basis, with duplicate copies of confirmations of
all personal Securities transactions and copies of periodic statements for
brokerage accounts.

XI. Sanctions

1. Any violation of this Code of Ethics shall be reported to and considered by
the Chief Compliance Officer and, in his or her discretion, by senior management
of the relevant AGC Investment Adviser. Such individuals or bodies shall impose
sanctions as deemed appropriate in the circumstances, and may include disgorging
of profits and termination of employment of the violator.

2. With respect to any Investment Company, the Chief Compliance Officer shall
furnish annually to the Investment Company's Board of Directors/Trustees a
report regarding the administration of this Code of Ethics, including any
material violations, and summarizing any reports filed hereunder. If the report
indicates that any changes are advisable, the Board of Directors/Trustees shall
make an appropriate recommendation to the Chief Compliance Officer.

<PAGE>

POWER OF ATTORNEY
-----------------

We, the undersigned Officers and Trustees of North American Funds (the
"Trust"), hereby severally constitute and appoint Joseph T. Grause, Jr., John I.
Fitzgerald, and Thomas J. Brown, and each of them singly, our true and lawful
attorneys, with full power to them and each of them, to sign for us, and in our
names and in the capacities indicated below, the Registration Statement on Form
N-1A of the Trust and any and all amendments (including post-effective
amendments) to said Registration Statement and to file the same with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto our said attorneys, and each
of them acting alone, full power and authority to do and perform each and every
act and thing requisite or necessary to be done in the premises, as fully to all
intents and purposes as he might or could do in person, and hereby ratify and
confirm all that said attorneys or any of them may lawfully do or cause to be
done by virtue thereof.

WITNESS our hands and common seal on the date set forth below.

Signature Title Date
- --------- ----- ----

/s/ Bradford K. Gallagher Chairman; Trustee; February 28, 2000
- ------------------------ President; Principal
Bradford K. Gallagher Executive Officer

/s/ William F. Achtmeyer Trustee February 28, 2000
- ------------------------
William F. Achtmeyer

/s/ Don B. Allen Trustee February 28, 2000
- ------------------------
Don B. Allen

/s/ William F. Devin Trustee February 28, 2000
- ------------------------
William F. Devin

/s/ Kenneth J. Lavery Trustee February 28, 2000
- ------------------------
Kenneth J. Lavery

/s/ Thomas J. Brown Treasurer; Principal February 28, 2000
- ------------------------ Financial and
Thomas J. Brown Accounting Officer

<PAGE>

POWER OF ATTORNEY
-----------------

WITNESS our hands and common seal on the date set forth below.

Signature Title Date
- --------- ----- ----

/s/ Alice T. Kane Chairman; Trustee; March 14, 2000
- ------------------------ President; Principal
Alice T. Kane Executive Officer

Trustee February 28, 2000
- ------------------------
William F. Achtmeyer

Trustee February 28, 2000
- ------------------------
Don B. Allen

Trustee February 28, 2000
- ------------------------
William F. Devin

Trustee February 28, 2000
- ------------------------
Kenneth J. Lavery

Treasurer; Principal February 28, 2000
- ------------------------ Financial and
Thomas J. Brown Accounting Officer