EXPEDITION FUNDS, 485BPOS, 1999-02-26

EXPEDITION FUNDS
485BPOS, 1999-02-26

Previous: ARONEX PHARMACEUTICALS INC, SC 13D/A, 1999-02-26

Next: MUNDER FUNDS TRUST, NSAR-A, 1999-02-26

<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 26, 1999

FILE NO. 33-30950
FILE NO. 811-5900
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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

FORM N-1A

REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 / /
POST-EFFECTIVE AMENDMENT NO. 32 /X/
AND
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 / /
AMENDMENT NO. 29 /X/

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

THE EXPEDITION FUNDS
(Exact Name of Registrant as Specified in Charter)

C/O CT CORPORATION
2 Oliver Street
Boston, Massachusetts 02109
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (800) 342-5734

MARK E. NAGLE
c/o SEI Investments Company
Oaks, Pennsylvania 19456
(Name and Address of Agent for Service)

COPIES TO:
Richard W. Grant, Esq.
John H. Grady, Jr., Esq.
Morgan, Lewis & Bockius LLP
1701 Market Street
Philadelphia, PA 19103

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

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

<TABLE>
<C> <S>
/ / immediately upon filing pursuant to paragraph (b)
/X/ on February 27, 1999 pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)
/ / 75 days after filing pursuant to paragraph (a)
/ / on [ ] pursuant to paragraph (a) of Rule 485
</TABLE>

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

EXPEDITION FUNDS

Investment Shares-Class A
Investment Shares-Class B
Institutional Shares

PROSPECTUS
MARCH 1, 1999

EXPEDITION EQUITY FUND
EXPEDITION BOND FUND

INVESTMENT ADVISER:
COMPASS BANK

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED ANY
FUND SHARES OR DETERMINED WHETHER THIS PROSPECTUS IS ACCURATE OR
COMPLETE. IT IS A CRIME FOR ANYONE TO TELL YOU OTHERWISE.

Page 1 of 30

<PAGE>

HOW TO READ THIS PROSPECTUS

Expedition Funds is a mutual fund family that offers shares in separate
investment portfolios (Funds). The Funds have individual investment goals and
strategies. This prospectus gives you important information about the Investment
Shares-Class A (Class A Shares), Investment Shares-Class B (Class B Shares) and
Institutional Shares of the Expedition Equity Fund and the Expedition Bond Fund
that you should know before investing. Please read this prospectus and keep it
for future reference.

Expedition Funds also offers shares of the Expedition Money Market Fund and
Expedition Tax-Free Money Market Fund in separate prospectuses which are
available by calling 1-800-992-2085.

THIS PROSPECTUS HAS BEEN ARRANGED INTO DIFFERENT SECTIONS SO THAT YOU CAN EASILY
REVIEW THIS IMPORTANT INFORMATION. ON THE NEXT PAGE, THERE IS SOME GENERAL
INFORMATION YOU SHOULD KNOW ABOUT THE FUNDS. FOR MORE DETAILED INFORMATION ABOUT
THE FUNDS, PLEASE SEE:

<TABLE>
<CAPTION>
PAGE
<S> <C>
EQUITY FUND 4
BOND FUND 9
MORE INFORMATION ABOUT RISK 14
EACH FUND'S OTHER INVESTMENTS 15
THE INVESTMENT ADVISER 16
PURCHASING, SELLING AND EXCHANGING FUND SHARES 18
DIVIDENDS, DISTRIBUTIONS AND TAXES 25
FINANCIAL HIGHLIGHTS 27
HOW TO OBTAIN MORE INFORMATION ABOUT
EXPEDITION FUNDS BACK COVER
</TABLE>

Page 2 of 30

<PAGE>

INTRODUCTION - INFORMATION COMMON TO BOTH FUNDS

Each Fund is a mutual fund. A mutual fund pools shareholders' money and, using
professional investment managers, invests it in securities.
[cad 179]
Each Fund has an investment goal and strategies for reaching that goal. The
investment managers invest Fund assets in a way that they believe will help a
Fund achieve its goal. Still, investing in a Fund involves risk and there is no
guarantee that a Fund will achieve its goal. An investment manager's judgments
about the markets, the economy, or companies may not anticipate actual market
movements, economic conditions or company performance, and these judgments may
affect the return on your investment. In fact, no matter how good a job an
investment manager does, you could lose money on your investment in a Fund, just
as you could with other investments.

The value of your investment in a Fund is based on the market value of the
securities the Fund holds. These prices change daily due to economic and other
events that affect particular companies and other issuers. These price
movements, sometimes called volatility, may be greater or lesser depending on
the types of securities a Fund owns and the markets in which they trade. The
estimated volatility for each Fund is set forth in the fund summaries that
follow. The effect on a Fund of a change in the value of a single security will
depend on how widely the Fund diversifies its holdings.

RISKS OF INVESTING IN THE FUNDS

An investment in either Fund is not a deposit of Compass Bank and is not insured
or guaranteed by the FDIC or any other government agency.

YEAR 2000 RISK - The Funds depend on the smooth functioning of computer systems
in almost every aspect of its business. Like other mutual funds, businesses and
individuals around the world, the Funds could be adversely affected if the
computer systems used by their service providers do not properly process dates
on and after January 1, 2000, and distinguish between the year 2000 and the year
1900. The Funds have asked their service providers whether they expect to have
their computer systems adjusted for the year 2000 transition, and are seeking
assurances from each service provider that they are devoting significant
resources to prevent material adverse consequences to the Funds. While it is
likely that such assurances will be obtained, the Funds and their shareholders
may experience losses if these assurances prove to be incorrect or as a result
of year 2000 computer difficulties experienced by issuers of portfolio
securities or third parties, such as custodians, banks, broker-dealers or others
with which the Funds do business.

Page 3 of 30

<PAGE>

EXPEDITION EQUITY FUND

<TABLE>
<CAPTION>
FUND SUMMARY
<S> <C>
Investment Goal Growth of capital with a secondary objective of
income

Investment Focus Common stocks issued by large and medium sized U.S.
companies

Share Price Volatility Medium

Principal Investment Strategy Investing in a blended portfolio of both growth and
value stocks

Investor Profile Investors who want growth of capital and dividend
income, and are willing to accept the risks of
equity investing
</TABLE>

INVESTMENT STRATEGY OF THE EXPEDITION EQUITY FUND

The Fund invests primarily in common stocks issued by U.S. companies with
medium to large market capitalizations (in excess of $1 billion) that the
Adviser believes are attractively valued and offer favorable long-term growth
potential. The Fund generally seeks to diversify its investments across all
major industry sectors. The Adviser's investment selection process begins
with the use of quantitative screening techniques to evaluate securities
based on both value characteristics (whether a company's value is attractive
relative to historical earnings and its prospects for future earnings and
dividend growth) and momentum characteristics (such as changes in a company's
earnings per share estimates). The Adviser then analyzes the fundamental
characteristics of these companies to evaluate which companies hold the best
prospects for future growth. These growth characteristics include factors
such as above average sales or earnings growth, pricing flexibility, and
superior margins and profitability trends compared to a company's industry
peers. The Adviser monitors the companies owned by the Fund and may sell a
security when there is a fundamental change in a company's outlook or better
opportunities are available within that industry sector. By blending these
value and growth criteria, the Adviser attempts to lessen the Fund's volatility
and avoid the cycles in performance associated with "style specific" investment
management.

PRINCIPAL RISKS OF INVESTING IN THE EXPEDITION EQUITY FUND

Since it purchases common stocks, the Fund is subject to the risk that stock
prices will fall over short or extended periods of time. Historically, the
equity markets have moved in cycles, and the value of the Fund's equity
securities may fluctuate drastically from day-to-day. Individual companies may
report poor results or be negatively affected by industry and/or economic trends
and developments. The prices of securities issued by such companies may suffer a
decline in response. These factors contribute to price volatility, which is the
principal risk of investing in the Fund.

The medium capitalization companies the Fund invests in may be more vulnerable
to adverse business or economic events than larger, more established companies.
In particular, these medium sized companies may have limited product lines,
markets and financial resources, and may depend upon a relatively small

Page 4 of 30

<PAGE>

management group. Therefore, medium capitalization stocks may be more volatile
than those of larger companies.

The Fund is also subject to the risk that its investment approach, which seeks
to identify common stocks with both growth and value characteristics, may cause
it to perform differently than funds that target a specific equity market
segment or that invest in other asset classes.

PERFORMANCE INFORMATION

The bar chart and the performance table below illustrate the risks and
volatility of an investment in the Fund. Of course, the Fund's past performance
does not necessarily indicate how the Fund will perform in the future.

The periods prior to June 13, 1997, when the Fund began operating, represent the
performance of the Adviser's similarly managed common trust fund. This past
performance has been adjusted to reflect current expenses for the Institutional
Shares of the Fund. The Adviser's common trust fund was not a registered mutual
fund so it was not subject to the same investment and tax restrictions as the
Fund. If it had been, the common trust fund's performance may have been lower.

This bar chart shows changes in the performance of the Fund's Institutional
Shares from year to year.*
<TABLE>
<S> <C>
1994 (1.20%)
1995 25.78%
1996 18.61%
1997 31.33%
1998 28.49%
</TABLE>

BEST QUARTER WORST QUARTER
<S> <C>
23.47% (12.09%)
(12/31/98) (09/30/98)
</TABLE>

* The performance information shown above is based on a calendar year.

Page 5 of 30

<PAGE>

THIS TABLE COMPARES THE FUND'S AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS
ENDING DECEMBER 31, 1998 TO THOSE OF THE S&P 500 INDEX, THE S&P MIDCAP 400
INDEX AND THE LIPPER GROWTH INCOME AVERAGE.

<TABLE>
<CAPTION>
SINCE
INCEPTION
EQUITY FUND 1 YEAR 5 YEARS (10/13/93)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Institutional Shares 28.49% 19.99% 19.10%

Class A Shares* 23.35% 19.00% 18.17%

Class B Shares** 23.25% 19.85% 19.06%

S&P 500 Index 28.60% 24.05% 23.25%***

S&P MidCap 400 Index 19.12% 18.84% 18.70%***

Lipper Growth & Income Average 15.61% 18.35% N/A

* The periods from June 1997 to November 1997 represent the performance of the Institutional Shares of the Fund
adjusted to reflect sales changes.
** The periods from June 1997 to November 1998 represent the performance of the Institutional Shares of the Fund
adjusted to reflect sales changes.
***The inception date for each index is 10/31/93.

</TABLE>

WHAT IS AN INDEX?

An index measures the market prices of a specific group of securities in a
particular market or securities in a market sector. You cannot invest directly
in an index. Unlike a mutual fund, an index does not have an investment adviser
and does not pay any commissions or expenses. If an index had expenses, its
performance would be lower. The S&P 500 Index is a widely-recognized, market
value-weighted (higher market value stocks have more influence than lower market
value stocks) index of 500 stocks designed to mimic the overall equity market's
industry weightings. The S&P MidCap 400 Index is a widely-recognized,
capitalization-weighted (companies with larger market capitalizations have more
influence than those with smaller market capitalizations) index of 400 domestic
mid-cap stocks chosen for market size, liquidity, and industry group
representation.

WHAT IS AN AVERAGE?

An average is a composite of mutual funds with similar investment goals. The
Lipper Growth & Income Average is a widely-recognized average of mutual funds
which invest in equity securities that have growth and income characteristics.

FUND FEES AND EXPENSES

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

Page 6 of 30

<PAGE>

SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
<TABLE>
<CAPTION>
CLASS A CLASS B INSTITUTIONAL
SHARES SHARES SHARES
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES (AS A PERCENTAGE OF 4.00% None None
OFFERING PRICE)*

MAXIMUM DEFERRED SALES CHARGE (LOAD) (AS A PERCENTAGE OF NET ASSET None 5.00% None
VALUE)**

MAXIMUM SALES CHARGE (LOAD) IMPOSED ON REINVESTED DIVIDENDS AND None None None
OTHER DISTRIBUTIONS (AS A PERCENTAGE OF OFFERING PRICE)

REDEMPTION FEE (AS A PERCENTAGE OF AMOUNT REDEEMED, IF APPLICABLE) None None None

EXCHANGE FEE None None None

MAXIMUM ACCOUNT FEE None None None
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>

* This sales charge varies depending upon how much you invest. See "Purchasing
Fund Shares."

** This sales charge is imposed if you sell Class B Shares within
1 year of your purchase. See "Selling Fund Shares."

ANNUAL FUND OPERATING EXPENSES (EXPENSES DEDUCTED FROM FUND ASSETS)

<TABLE>
<CAPTION>
CLASS A CLASS B INSTITUTIONAL
SHARES SHARES SHARES
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Management Fees .75% .75% .75%
Distribution and Service (12b-1) Fees .25% 1.00% None
Other Expenses .33% .33% .33%
- ------------------------------------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 1.33% 2.08% 1.08%
</TABLE>

FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER" AND
"DISTRIBUTION OF FUND SHARES."

Page 7 of 30

<PAGE>

EXAMPLE

This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. The Example assumes that you
invest $10,000 in the Fund for the time periods indicated.

The Example also assumes that each year your investment has a 5% return and Fund
operating expenses remain the same. Although your actual costs may be higher or
lower, your approximate costs of investing $10,000 in the Fund would be:

IF YOU SELL YOUR SHARES AT THE END OF THE PERIOD:
<TABLE>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Institutional Shares $110 $343 $595 $1,317
Class A Shares $530 $805 $1,100 $1,917
Class B Shares $711 $952 $1,219 N/A*
</TABLE>

IF YOU DO NOT SELL YOUR SHARES AT THE END OF THE PERIOD:
<TABLE>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Institutional Shares $110 $343 $595 $1,317
Class A Shares $530 $805 $1,100 $1,937
Class B Shares $211 $652 $1,119 N/A*
</TABLE>

*Class B Shares automatically convert to Class A Shares after eight years.

Page 8 of 30

<PAGE>

EXPEDITION BOND FUND

<TABLE>
FUND SUMMARY
<S> <C>
Investment Goal Current income

Investment Focus High quality bonds and other fixed income securities

Share Price Volatility Low to medium

Principal Investment Strategy Investing in U.S. dollar denominated bonds and
other fixed income securities.

Investor Profile Investors who want current income, and who are
willing to accept the risks of owning a portfolio of
fixed income securities.
</TABLE>

INVESTMENT STRATEGY OF THE EXPEDITION BOND FUND

The Fund invests primarily in fixed income securities issued by the U.S.
government and its agencies and instrumentalities, including mortgage-backed
securities, as well as in U.S. corporate fixed income securities. All such
instruments must be denominated in U.S. dollars and must be rated "A" or better
by one or more nationally recognized statistical rating organizations at the
time of purchase.

The Adviser's investment selection process begins with a top-down analysis of
general economic conditions to determine how the Fund's investments will be
weighted between the U.S. Treasury, government agency and corporate sectors.
The Adviser maintains a relatively "duration neutral" posture, meaning it
does not attempt to anticipate future interest rate changes and does not
significantly adjust the duration of the Fund. The Fund's average weighted
maturity will be maintained at 3 to 5 years. The individual maturity is
limited to 10 years for all securities, except mortgage backed securities,
which have no individual maturity limit. The Adviser conducts credit
analysis of the corporate issues it buys and diversifies the Fund's
investments in corporate debt among the major industry sectors. The Adviser
monitors the sector weighting of the Fund and may sell a security when there
is a fundamental change in a company's or sector's outlook or better
opportunities become available. If a security's credit rating is downgraded,
the Adviser will promptly review that security and take appropriate action,
including the possible sale of that security.

PRINCIPAL RISKS OF INVESTING IN THE EXPEDITION BOND FUND

The prices of the Fund's fixed income securities respond to economic
developments, particularly interest rate changes, as well as to perceptions
about the creditworthiness of individual issuers. Generally, the Fund's fixed
income securities will decrease in value if interest rates rise and vice versa,
and the volatility of lower rated securities is even greater than that of higher
rated securities. Also, longer-term securities are generally more volatile, so
the average maturity or duration of these securities affects risk.

The mortgages underlying mortgage-backed securities may be paid off early, which
makes it difficult to determine their actual maturity and therefore calculate
how they will respond to changes in interest rates. The Fund may have to
reinvest prepaid amounts at lower interest rates. This risk of prepayment is an
additional risk of mortgage-backed securities.

Page 9 of 30

<PAGE>

Although the Fund's U.S. government securities are considered to be among the
safest investments, they are not guaranteed against price movements due to
changing interest rates. Obligations issued by some U.S. government agencies are
backed by the U.S. Treasury, while others are backed solely by the ability of
the agency to borrow from the U.S. Treasury or by the agency's own resources.

The Fund is also subject to the risk that its investment approach, which focuses
on a blend of U.S. government and U.S. corporate fixed income securities, may
cause it to perform differently than funds that target other fixed income market
segments or that invest in other asset classes.

PERFORMANCE INFORMATION

This bar chart shows changes in the performance of the Fund's Class A Shares
from year to year. The chart does not reflect sales charges. If sales charges
had been reflected, returns would be less than those shown below.*
<TABLE>
<S> <C>
1993 6.73%
1994 (1.51%)
1995 12.52%
1996 2.76%
1997 6.76%
1998 7.44%
</TABLE>

BEST QUARTER WORST QUARTER
<S> <C>
4.39% (2.42%)
(9/30/98) (10/31/94)
</TABLE>

* The performance information shown above is based on a calendar year.

Page 10 of 30

<PAGE>

THIS TABLE COMPARES THE FUND'S AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS
ENDING DECEMBER 31, 1998 TO THOSE OF THE LEHMAN BROTHERS INTERMEDIATE
GOVERNMENT/CORPORATE BOND INDEX AND LIPPER SHORT/INTERMEDIATE GOVEREMENT BOND
AVERAGE.

<TABLE>
<CAPTION>
SINCE
INCEPTION
INSTITUTIONAL SHARES 1 YEAR 6/13/97
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Bond Fund 7.66% 7.93%
Lehman Brothers Intermediate 8.42% 8.95%*
Government/Corporate Bond Index
Lipper Short/Intermediate Goverment Bond Average 6.58% N/A**
</TABLE>
** Since 6/30/97

<TABLE>
<CAPTION>
SINCE
INCEPTION
CLASS A SHARES 1 YEAR 5 YEARS 4/20/92
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Bond Fund 3.15% 4.62% 6.49%
Lehman Brothers Intermediate 7.64% 6.23% 6.68%*
Government/Corporate Bond Index
Lipper Short/Intermediate Government Bond Average 6.58% 5.34% N/A**
</TABLE>

* The inception date for the index is 4/30/92

WHAT IS AN INDEX?

An index measures the market prices of a specific group of securities in a
particular market or securities in a market sector. You cannot invest directly
in an index. Unlike a mutual fund, an index does not have an investment adviser
and does not pay any commissions or expenses. If an index had expenses, its
performance would be lower. The Lehman Brothers Intermediate
Government/Corporate Bond Index is a widely-recognized, market value-weighted
(higher market value bonds have more influence than lower market value bonds)
index of U.S. Treasury securities, U.S. government agency obligations, corporate
debt backed by the U.S. government, fixed-rate nonconvertible corporate debt
securities, Yankee bonds and nonconvertible debt securities issued by or
guaranteed by foreign governments and agencies. All securities in the index are
rated investment grade (BBB) or higher, with maturities of 1 to 10 years.

WHAT IS AN AVERAGE?

An average is a composite of mutual funds with similar investment goals. The
Lipper Short/Intermediate Government Bond Average is a widely recognized
average of mutual funds which invest in fixed income obligations of the U.S.
government, with maturities of 1 to 5 years.

FUND FEES AND EXPENSES

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

SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)

<TABLE>
<CAPTION>
CLASS A CLASS B INSTITUTIONAL
SHARES SHARES SHARES
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES (AS A PERCENTAGE OF 4.00% None None
OFFERING PRICE)*

Page 11 of 30

<PAGE>

MAXIMUM DEFERRED SALES CHARGE (LOAD) (AS A PERCENTAGE OF NET ASSET None 5.00% None
VALUE)**

MAXIMUM SALES CHARGE (LOAD) IMPOSED ON REINVESTED DIVIDENDS AND None None None
OTHER DISTRIBUTIONS (AS A PERCENTAGE OF OFFERING PRICE)

REDEMPTION FEE (AS A PERCENTAGE OF AMOUNT REDEEMED, IF APPLICABLE) None None None

EXCHANGE FEE None None None

MAXIMUM ACCOUNT FEE None None None
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
* This sales charge varies depending upon how much you invest. See "Purchasing
Fund Shares."
** This sales charge is imposed if you sell Class B Shares within 1 year of
your purchase. See "Selling Fund Shares."

ANNUAL FUND OPERATING EXPENSES (EXPENSES DEDUCTED FROM FUND ASSETS)*

<TABLE>
<CAPTION>
CLASS A CLASS B INSTITUTIONAL
SHARES SHARES SHARES
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment Advisory Fees .75% .75% .75%
Distribution and Service (12b-1) Fees .25% 1.00% None
Other Expenses .38% .38% .38%
- -----------------------------------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 1.38% 2.13% 1.13%
</TABLE>

*THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE MOST RECENT
FISCAL YEAR WERE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADVISER IS WAIVING
A PORTION OF THE FEES IN ORDER TO KEEP TOTAL OPERATING EXPENSES AT A SPECIFIED
LEVEL. THE ADVISER MAY DISCONTINUE ALL OR PART OF THESE WAIVERS AT ANY TIME.
WITH THESE FEE WAIVERS, THE FUND'S ACTUAL TOTAL OPERATING EXPENSES ARE AS
FOLLOWS:

<TABLE>
<S> <C>
BOND FUND - CLASS A SHARES 1.19%
BOND FUND - CLASS B SHARES 1.94%
BOND FUND - INSTITUTIONAL SHARES .94%
</TABLE>

FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER" AND
"DISTRIBUTION OF FUND SHARES."

EXAMPLE

Page 12 of 30

<PAGE>

IF YOU SELL YOUR SHARES AT THE END OF THE

PERIOD:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Institutional Shares $115 $359 $622 $1,375
Class A Shares $565 $819 $1,125 $1,991
Class B Shares $716 $967 $1,244 N/A*
</TABLE>

IF YOU DO NOT SELL YOUR SHARES AT THE END OF THE PERIOD:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Institutional Shares $115 $359 $622 $1,375
Class A Shares $535 $819 $1,125 $1,991
Class B Shares $216 $667 $1,144 N/A*
</TABLE>
*Class B Shares automatically convert to Class A Shares after eight years.

Page 13 of 30

<PAGE>

MORE INFORMATION ABOUT RISK
<TABLE>
<S> <C>

EQUITY RISK - Equity securities include public and privately issued equity Equity Fund
securities, common and preferred stocks, warrants, rights to subscribe to
common stock and convertible securities, as well as instruments that
attempt to track the price movement of equity indices. Investments in
equity securities and equity derivatives in general are subject to market
risks that may cause their prices to fluctuate over time. The value of
securities convertible into equity securities, such as warrants or
convertible debt, is also affected by prevailing interest rates, the credit
quality of the issuer and any call provision. Fluctuations in the value of
equity securities in which a mutual fund invests will cause a fund's net
asset value to fluctuate. An investment in a portfolio of equity securities
may be more suitable for long-term investors who can bear the risk of these
share price fluctuations.

FIXED INCOME RISK - The market value of fixed income investments change in Bond Fund
response to interest rate changes and other factors. During periods of
falling interest rates, the values of outstanding fixed income securities
generally rise. Moreover, while securities with longer maturities tend to
produce higher yields, the prices of longer maturity securities are also
subject to greater market fluctuations as a result of changes in interest
rates. During periods of falling interest rates, certain debt obligations
with high interest rates may be prepaid (or "called") by the issuer prior
to maturity. This may cause a Fund's average weighted maturity to
fluctuate, and may require a Fund to invest the resulting proceeds at lower
interest rates. In addition to these fundamental risks, fixed income
securities may be subject to credit risk, which is the possibility that an
issuer will be unable to make timely payments of either principal or
interest.

Page 14 of 30

<PAGE>

MORTGAGE-BACKED SECURITIES - Mortgage-backed securities are fixed income
securities representing an interest in a pool of underlying mortgage loans.
They are sensitive to changes in interest rates, but may respond to these
changes differently from other fixed income securities due to the
possibility of prepayment of the underlying mortgage loans. As a result, it
may not be possible to determine in advance the actual maturity date or
average life of a mortgage-backed security. Rising interest rates tend to
discourage refinancings, with the result that the average life and
volatility of the security will increase exacerbating its decrease in
market price. When interest rates fall, however, mortgage-backed securities
may not gain as much in market value because of the expectation of
additional mortgage prepayments that must be reinvested at lower interest
rates. Prepayment risk may make it difficult to calculate the average
maturity of a portfolio of mortgage-backed securities and, therefore, to
assess the volatility risk of that portfolio.
</TABLE>

EACH FUND'S OTHER INVESTMENTS

The prospectus describes the Funds' primary strategies, and the Funds will
normally invest in the types of securities desribed in this prospectus. However,
in addition to the investments and strategies described in this prospectus, the
Funds also may invest in other securities, use other strategies and engage in
other investment practices. These investments and strategies, as well as those
described in this prospectus, are described in detail in our Statement of
Additional Information. Of course, we cannot guarantee that either Fund will
achieve its investment goal.

The investments and strategies described in this prospectus are those that we
use under normal conditions. During unusual economic or market conditions, or
for temporary defensive or liquidity purposes, a Fund may invest up to 100% of
its assets in cash, shares of money market mutual funds and short-term
repurchase agreements that would not ordinarily be consistent with a Fund's
objectives. A Fund will do so only if the Adviser believes that the risk of loss
outweighs the opportunity for capital gains or higher income.

Page 15 of 30

<PAGE>

INVESTMENT ADVISER

The Investment Adviser makes investment decisions for the Funds and continuously
reviews, supervises and administers the Fund's respective investment program.
The Board of Trustees of Expedition Funds supervises the Adviser and establishes
policies that the Adviser must follow in its management activities. The Funds
are managed by a team of investment professionals from the Adviser's Portfolio
Management Team. No one person is primarily responsible for making investment
recommendations to the team.

Compass Bank, a wholly-owned subsidiary of Compass Bancshares, Inc. (Compass
Bancshares) serves as the Adviser to the Funds. Compass Bank has served as
investment adviser to mutual funds since 1990. Through the Compass Asset
Management Group, the adviser and its affiliates provide investment advisory
services for the assets of individuals, pension and profit sharing plans,
endowments and foundations. As of December 31, 1998, Compass Bank had
approximately $7.8 billion in assets under administration, with investment
discretion over $2.6 billion. For the fiscal period ended October 31, 1998,
Compass Bank received advisory fees as a percentage of average daily net
assets (after waivers) of:

<TABLE>
<S> <C>
EQUITY FUND .71%
BOND FUND .57%
</TABLE>

The Adviser has agreed to voluntarily waive a portion of its fees and
reimburse certain expenses of each Fund in order to limit the total operating
expenses of the Bond Fund to 1.10% (not including distribution and service
fees) and the Equity Fund to 1.25% (not including distribution and service
fees) of the average daily net assets of each Fund.

Page 16 of 30

<PAGE>

PURCHASING, SELLING AND EXCHANGING FUND SHARES

This section tells you how to buy, sell (sometimes called "redeem") or exchange
Class A Shares, Class B Shares and Institutional Shares of the Funds.

Class A Shares and Class B Shares have different expenses and other
characteristics, allowing you to choose the class that best suits your needs.
You should consider the amount you want to invest, how long you plan to have it
invested, and whether you plan to make additional investments.

CLASS A SHARES
- -Front-end sales charge
- -Lower annual expenses
- -$1,000 minimum initial investment for regular accounts
- -$500 minimum initial investment for IRA accounts

CLASS B SHARES
- -Contingent deferred sales charge
- -Higher annual expenses
- -$1,000 minimum initial investment for regular accounts
- -$500 minimum initial investment for IRA accounts
- -Automatically convert to Class A Shares after eight years

For some investors the minimum initial investment for Class A and Class B Shares
may be lower.

Institutional Shares are available solely to individuals and entities
establishing fiduciary, trust, agency, custody or similar relationships with the
Asset Management Group of Compass Bank or trust divisions or trust companies
that are affiliated with Compass Bancshares. Institutional Shares are also
for financial institutions investing for their own or their customers' accounts.
For information on how to open an account and set up procedures for placing
transactions call 1-800-992-2085.

Class A and Class B Shares are for individual and institutional investors.

HOW TO PURCHASE FUND SHARES

You may purchase shares directly by:
- -Mail
- -Telephone, or
- -Wire

To purchase Class A or Class B Shares directly from us, please call
1-800-992-2085, or complete and send in an account application. Write your
check, payable in U.S. dollars, to "Expedition Funds" and include the name of
the appropriate Fund(s) on the check. We cannot accept third-party checks,
credit

Page 17 of 30

<PAGE>

cards, credit card checks or cash.

Institutional Shares are available for eligible investors through the Asset
Management Group of Compass Bank or through trust divisions or trust companies
that are affiliated with Compass Bancshares or through other qualifying
financial institutions. To purchase Institutional Shares, eligible Compass Asset
Management Group customers should contact Compass Asset Management and other
eligible customers should contact their financial institutions.

You may also buy shares through accounts with brokers and other institutions
that are authorized to place trades in Fund shares for their customers. If you
invest through an authorized institution, you will have to follow its
procedures, which may be different from the procedures for investing directly.
Your institution may charge a fee for its services, in addition to the fees
charged by the Fund. You will also generally have to address your correspondence
or questions regarding the Fund to your institution.

GENERAL INFORMATION

You may purchase shares on any day that the New York Stock Exchange is open for
business (a Business Day). Shares cannot be purchased by Federal Reserve wire on
days that either the New York Stock Exchange or the Federal Reserve is closed.

A Fund may reject any purchase order if it is determined that accepting the
order would not be in the best interests of the Fund or its shareholders.

The price per share (the offering price) will be the net asset value per share
(NAV) next determined after the Fund receives your purchase order plus, in the
case of Class A Shares, the applicable front-end sales charge.

Each Fund calculates its NAV once each Business Day at the regularly-scheduled
close of normal trading on the New York Stock Exchange (normally, 3:00 p.m.
Central time). So, for you to receive the current Business Day's NAV, generally
the Fund must receive your purchase order before 3:00 p.m. Central time.

HOW WE CALCULATE NAV

NAV for one Fund share is the value of that share's portion of all of the net
assets in the Fund.

In calculating NAV, the Fund generally values its investment portfolio at market
price. If market prices are unavailable or the Fund thinks that they are
unreliable, fair value prices may be determined in good faith using methods
approved by the Board of Trustees.

MINIMUM PURCHASES

To purchase Class A Shares or Class B Shares for the first time, you must invest
at least $1,000 in any

Page 18 of 30

<PAGE>

Fund. To open an IRA account, you must invest at least $500 in any Fund. The
minimum is $25 in the case of directors, officers and employees of Compass
Bancshares and its affiliates and members of their immediate families
participating in the Systematic Investment Plan. Your subsequent investments
in either Fund must be made in amounts of at least $100 ($25 for directors,
officers and employees of Compass Bancshares and its affiliates and members
of their immediate families). A Fund may accept investments of smaller
amounts for either class of shares at its discretion.

To purchase Institutional Shares, eligible Compass Asset Management Group
customers should contact their Compass Asset Management Group authorized
representative and other eligible customers should contact their financial
institutions.

SYSTEMATIC INVESTMENT PLAN

If you have a checking or savings account with a bank, you may purchase
shares of either Fund automatically through regular deductions from your
account. Once your account has been opened, you may begin regularly scheduled
investments of at least $100 ($25 in the case of directors, officers and
employees of Compass Bancshares and its affiliates and members of their
immediate families) for each Fund. Purchases of Class A Shares made through
the Systematic Investment Plan are subject to the applicable sales charge.

SALES CHARGES

FRONT-END SALES CHARGES - CLASS A SHARES

The offering price of Class A Shares is the NAV next calculated after the Fund
receives your request, plus the front-end sales load.

The amount of any front-end sales charge included in your offering price varies,
depending on the amount of your investment:

Page 19 of 30

<PAGE>

<TABLE>
<CAPTION>
YOUR SALES CHARGE YOUR SALES CHARGE AS A
IF YOUR INVESTMENT IS: AS A PERCENTAGE OF PERCENTAGE OF YOUR NET
OFFERING PRICE INVESTMENT
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Less than $100,000 4.00% 4.17%
$100,000 but less than $250,000 3.50% 3.63%
$250,000 but less than $500,000 2.75% 2.83%
$500,000 but less than $1,000,000 1.00% 1.01%
$1,000,000 and over* 0.00% 0.00%
</TABLE>

*Even though you do not pay a sales charge on purchases of $1,000,000 or
more, the Distributor may pay dealers a 1% commission for these transactions.

WAIVER OF FRONT-END SALES CHARGE - CLASS A SHARES

The front-end sales charge will be waived on Class A Shares purchased: by
reinvestment of dividends and distributions; by persons repurchasing shares they
redeemed within the last 30 days (see Repurchase of Class A Shares); by
investors who purchase shares with redemption proceeds (but only to the extent
of such redemption proceeds) from another investment company within 90 days of
such redemption, provided that, the investors paid either a front-end or
contingent deferred sales charge on the original shares redeemed (proper
documentation may be required); by directors, officers and employees, of
Compass Bancshares Inc. and its affiliates and dealers that enter into
agreements with the Distributor; by Trustees and officers of Expedition Funds;
through wrap fee and asset allocation programs and financial institutions that
have entered into dealer agreements with the Distributor; by persons purchasing
shares of a fund through a payroll deduction plan or a qualified employee
benefit retirement plan which permits purchases of shares of a Fund; or by a
shareholder purchasing additional of Class A Shares of the Bond Fund who
previously purchased any or all of their shares prior to June 9, 1997.

REPURCHASE OF CLASS A SHARES

You may repurchase any amount of Class A Shares of any Fund at NAV (without the
normal front-end sales charge), up to the limit of the value of any amount of
Class A Shares (other than those which were purchased with reinvested dividends
and distributions) that you redeemed within the past 30 days. In effect, this
allows you to reacquire shares that you may have had to redeem, without
re-paying the front-end sales charge. You may only exercise this privilege once.
To exercise this privilege, we must receive your purchase order within 30 days
of your redemption. IN ADDITION, YOU MUST NOTIFY US IN WRITING AND INDICATE ON
YOUR PURCHASE ORDER THAT YOU ARE REPURCHASING SHARES.

REDUCED SALES CHARGES -CLASS A SHARES

RIGHTS OF ACCUMULATION. In calculating the appropriate sales charge rate, this
right allows you to add the

Page 20 of 30

<PAGE>

value of the Class A Shares you already own to the amount that you are currently
purchasing. The Fund will combine the value of your current purchases with the
current value of any Class A Shares you purchased previously for (i) your
account, (ii) your spouse's account, (iii) a joint account with your spouse, or
(iv) your minor children's trust or custodial accounts. A fiduciary purchasing
shares for the same fiduciary account, trust or estate may also use this right
of accumulation. The Fund will only consider the value of Class A Shares
purchased previously that were sold subject to a sales charge. TO BE ENTITLED TO
A REDUCED SALES CHARGE BASED ON SHARES ALREADY OWNED, YOU MUST ASK US FOR THE
REDUCTION AT THE TIME OF purchase. You must provide the Fund with your account
number(s) and, if applicable, the account numbers for your spouse and/or
children (and provide the children's ages). The Fund may amend or terminate this
right of accumulation at any time.

LETTER OF INTENT. You may purchase Class A Shares at the sales charge rate
applicable to the total amount of the purchases you intend to make over a
13-month period. In other words, a Letter of Intent allows you to purchase Class
A Shares of a Fund over a 13-month period and receive the same sales charge as
if you had purchased all the shares at the same time. The Fund will only
consider the value of Class A Shares sold subject to a sales charge. As a
result, Class A Shares purchased with dividends or distributions
will not be included in the calculation. To be entitled to a reduced sales
charge based on shares you intend to purchase over the 13-month period, you must
send the Fund a Letter of Intent. In calculating the total amount of purchases
you may include in your letter purchases made up to 90 days before the date of
the Letter. The 13-month period begins on the date of the first purchase,
including those purchases made in the 90-day period before the date of the
Letter. Please note that the purchase price of these prior purchases will not be
adjusted.

You are not legally bound by the terms of your Letter of Intent to purchase the
amount of your shares stated in the Letter. The Letter does, however, authorize
the Fund to hold in escrow 4.0% of the total amount you intend to purchase. If
you do not complete the total intended purchase at the end of the 13-month
period, the Fund's transfer agent will redeem the necessary portion of the
escrowed shares to make up the difference between the reduced rate sales charge
(based on the amount you intended to purchase) and the sales charge that would
normally apply (based on the actual amount you purchased).

COMBINED PURCHASE/QUANTITY DISCOUNT PRIVILEGE. When calculating the appropriate
sales charge rate, the Fund will combine same day purchases of Class A Shares
(that are subject to a sales charge) made by you, your spouse and your minor
children (under age 21). This combination also applies to Class A Shares you
purchase with a Letter of Intent.

CONTINGENT DEFERRED SALES CHARGES - CLASS B SHARES

You do not pay a sales charge when you purchase Class B Shares. The offering
price of Class B Shares is simply the next calculated NAV. But if you sell your
shares within 5 years after your purchase, you will pay a contingent deferred
sales charge as described in the table below of either (1) the NAV of the shares
at the time of purchase, or (2) NAV of the shares next calculated after we
receive your sale request, whichever is less. The sales charge does not apply to
shares you purchase through reinvestment of dividends or

Page 21 of 30

<PAGE>

distributions. So, you never pay a deferred sales charge on any increase in your
investment above the initial offering price. This sales charge does not apply to
exchanges of Class B Shares of one Fund for Class B Shares of another Fund.

<TABLE>
<CAPTION>
CONTINGENT DEFERRED SALES
CHARGE AS A PERCENTAGE OF
DOLLAR AMOUNT SUBJECT TO
YEAR SINCE PURCHASE CHARGE
<S> <C>
First 5.00%
Second 4.00%
Third 3.00%
Fourth 2.00%
Fifth 1.00%
Sixth 0.00%
Seventh 0.00%
Eighth 0.00%
</TABLE>

The contingent deferred sales charge will be waived if you sell your Class B
Shares for the following reasons: to make certain required withdrawals from a
retirement plan (including IRAs); or because of death or disability.

In addition, Class B shareholders who automatically reinvest their dividends and
distributions may redeem up to 12% of the value of their shares per year,
determined at the time of each redemption, without payment of a contingent
deferred sales charge.

GENERAL INFORMATION ABOUT SALES CHARGES

Your securities dealer is paid a commission when you buy your shares and is paid
a servicing fee as long as you hold your shares. Your securities dealer or
servicing agent may receive different levels of compensation depending on which
Class of shares you buy.

From time to time, some financial institutions, including brokerage firms
affiliated with the Adviser, may be reallowed up to the entire sales charge.
Firms that receive a reallowance of the entire sales charge may be considered
underwriters for the purpose of federal securities law.

The Distributor may, from time to time in its sole discretion, institute one or
more promotional incentive programs for dealers, which will be paid for by the
Distributor from any sales charge it receives or from any other source available
to it. Under any such program, the Distributor may provide incentives, in the
form of cash or other compensation, including merchandise, airline vouchers,
trips and vacation packages, to dealers selling shares of the Funds.

Page 22 of 30

<PAGE>

HOW TO SELL YOUR FUND SHARES

Holders of Institutional Shares may sell shares by following procedures
established when they opened their account or accounts. If you have questions,
call Compass Asset Management by telephoning Compass Bank.

If you own your shares directly, you may sell your shares on any Business Day by
contacting the Fund directly by mail or telephone at 1-800-992-2085.

You may also sell your shares by contacting your financial institution by mail
or telephone. Compass Asset Management Group customers should contact their
Asset Management Group authorized representative.

If you would like to sell $40,000 or more of your shares, please notify the Fund
in writing and include a signature guarantee by a bank or other financial
institution (a notarized signature is not sufficient).

The sale price of each share will be the next NAV determined after the Fund
receives your request less, in the case of Class B Shares, any applicable
contingent deferred sales charge.

SYSTEMATIC WITHDRAWAL PLAN

Class A shareholders with at least a $10,000 account balance, may use the
systematic withdrawal plan. Under the plan you may arrange monthly, quarterly,
semi-annual or annual automatic withdrawals from any Fund. The proceeds of each
withdrawal will be mailed to you by check or, if you have a checking or savings
account with a bank, electronically transferred to your account.

RECEIVING YOUR MONEY

Normally, we will send your sale proceeds within one Business Day after we
receive your request, and in any event within seven days. Your proceeds can be
wired to your bank account (amounts less than $5,000 may be subject to a wire
fee) or sent to you by check. IF YOU RECENTLY PURCHASED YOUR SHARES BY CHECK,
REDEMPTION PROCEEDS MAY NOT BE AVAILABLE UNTIL YOUR CHECK HAS CLEARED (WHICH MAY
TAKE UP TO 15 DAYS FROM YOUR DATE OF PURCHASE).

REDEMPTIONS IN KIND

Page 23 of 30

<PAGE>

part of your redemption proceeds in liquid securities with a market value equal
to the redemption price (redemption in kind). It is highly unlikely that your
shares would ever be redeemed in kind, but if they were you would probably have
to pay transaction costs to sell the securities distributed to you, as well as
taxes on any capital gains from the sale as with any redemption.

INVOLUNTARY REDEMPTIONS OF YOUR SHARES

If your account balance drops below $1,000 because of redemptions for Class A
or Class B Shares the Fund may redeem your shares. But, the Fund will always
give you at least 30 days' written notice to give you time to add to your
account and avoid the involuntary redemption of your shares.

SUSPENSION OF YOUR RIGHT TO SELL YOUR SHARES

A Fund may suspend your right to sell your shares if the NYSE restricts trading,
the SEC declares an emergency or for other reasons. More information about this
is in our Statement of Additional Information.

HOW TO EXCHANGE YOUR SHARES

You may exchange your shares on any Business Day by contacting us directly by
mail or telephone by calling 1-800-992-2085. Exchange requests for Class A or
Class B shares must be for an amount of at least $1,000 ($25 for directors,
officers and employees of Compass Bancshares, Inc. and members of their
immediate families).

You may also exchange shares through your financial institution by mail or
telephone. Compass Asset Management Group customers should contact their Asset
Management Group authorized representative.

IF YOU RECENTLY PURCHASED SHARES BY CHECK, YOU MAY NOT BE ABLE TO EXCHANGE YOUR
SHARES UNTIL YOUR CHECK HAS CLEARED (WHICH MAY TAKE UP TO 15 DAYS FROM YOUR DATE
OF PURCHASE). This exchange privilege may be changed or canceled at any time
upon 60 days' written notice.

When you exchange shares, you are really selling your shares and buying other
Fund shares. So, your sale price and purchase price will be based on the NAV
next calculated after the Fund receives your exchange request.

CLASS A SHARES

You may exchange Class A Shares of any Fund for Class A Shares of any other
Fund. If you exchange shares that you purchased without a sales charge or with a
lower sales charge into a Fund with a sales charge or with a higher sales
charge, the exchange is subject to an incremental sales charge (e.g., the
difference between the lower and higher applicable sales charges). If you
exchange shares into a Fund with the same, lower or no sales charge, there is no
incremental sales charge for the exchange.

Page 24 of 30

<PAGE>

CLASS B SHARES

You may exchange Class B Shares of any Fund for Class B Shares of any other
Fund. If you exchange shares that you purchased without a sales charge or with a
lower sales charge into a Fund with a sales charge or with a higher sales
charge, the exchange is subject to an incremental sales charge (e.g., the
difference between the lower and higher applicable sales charges). If you
exchange shares into a Fund with the same, lower or no sales charge there is no
incremental sales charge, for the exchange.

TELEPHONE TRANSACTIONS

Purchasing, selling and exchanging Fund shares over the telephone is extremely
convenient, but not without risk. Although the Fund has certain safeguards and
procedures to confirm the identity of callers and the authenticity of
instructions, the Fund is not responsible for any losses or costs incurred by
following telephone instructions we reasonably believe to be genuine. If you or
your financial institution transact with the Fund over the telephone, you will
generally bear the risk of any loss.

DISTRIBUTION OF FUND SHARES

The Funds have adopted distribution plans for Class A and Class B Shares that
allow the Funds to pay distribution and service fees for the sale and
distribution of their shares, and for services provided to Class A and Class B
shareholders. Because these fees are paid out of a Fund's assets continuously,
over time these fees will increase the cost of your investment and may cost you
more than paying other types of sales charges.

Distribution and service fees, as a percentage of average daily net assets are
as follows:

<TABLE>
<S> <C>
For Class A Shares: .25%
For Class B Shares: 1.00%
</TABLE>

DIVIDENDS, DISTRIBUTIONS AND TAXES

Dividends for the Bond Fund are declared daily and paid monthly to
shareholders of record. Dividends for the Equity Fund are declared and paid
quarterly. Each Fund makes distributions of capital gains, if any, at least
annually. If you own Fund shares on a Fund's record date, you will be
entitled to receive the distribution.

You will receive dividends and distributions in the form of additional Fund
shares unless you elect to receive payment in cash. To elect cash payment, you
must notify the Fund in writing prior to the date of the distribution. Your
election will be effective for dividends and distributions paid after the Fund
receives your written notice. To cancel your election, simply send the Fund
written notice.

Page 25 of 30

<PAGE>

TAXES

PLEASE CONSULT YOUR TAX ADVISER REGARDING YOUR SPECIFIC QUESTIONS ABOUT FEDERAL,
STATE AND LOCAL INCOME TAXES. Below we have summarized some important tax issues
that affect the Funds and its shareholders. This summary is based on current tax
laws, which may change.

The Fund will distribute substantially all of its income and capital gains, if
any. The dividends and distributions you receive may be subject to federal,
state and local taxation, depending upon your tax situation. Distributions you
receive from the Fund may be taxable whether or not you reinvest them. EACH SALE
OR EXCHANGE OF FUND SHARES IS A TAXABLE EVENT.

MORE INFORMATION ABOUT TAXES IS IN THE STATEMENT OF ADDITIONAL INFORMATION.

CUSTODIAN

Compass Bank serves as Custodian for the assets of the Funds. It receives an
annual fee of .02% of each Fund's average daily net assets for this service.

Page 26 of 30

<PAGE>

FINANCIAL HIGHLIGHTS

The tables that follow present performance information about Class A Shares and
Institutional Shares of each Fund. As of October 31, 1998, Class B Shares were
not available to investors. This information is intended to help you understand
each Fund's financial performance for the past five years, or, if shorter, the
period of the Fund's operations. Some of this information reflects financial
information for a single Fund share. The total returns in the tables represent
the rate that you would have earned (or lost) on an investment in a Fund,
assuming you reinvested all of your dividends and distributions. This
information has been audited by Deloitte & Touche LLP, independent public
accountants. Their report, along with the Funds' financial statements, appears
in the annual report that accompanies our Statement of Additional Information.
You can obtain the annual report, which contains more performance information,
at no charge by calling 1-800-992-2085.

Page 27 of 30

<PAGE>

Financial Highlights

For the periods ended October 31,

For a Share Outstanding Throughout each Period.

<TABLE>
<CAPTION>
Net Asset Realized and Distributions
Value, Unrealized Gain from Net Net Asset
Beginning of Net Investment or (Losses) on Investment Distributions from Value, End
Period Income Securities Income Capital Gains of Period
<S> <C> <C> <C> <C> <C> <C>
Equity Fund
Institutional Shares

1998 $9.39 0.06 1.67 -0.06 -0.51 $10.55

1997(1) $10.00 0.02 0.25 -0.02 -0.86 $9.39
Investment Shares

1998(2) $9.65 $0.04 1.45 -0.05 -0.51 $10.58

Bond Fund
Institutional Shares

1998 $9.85 0.51 0.30 -0.51 - $10.15
1997(1) $9.69 0.19 0.16 -0.19 - $9.85
Investment Shares

1998 $9.85 0.49 0.30 -0.49 - $10.15
1997 $9.77 0.53 0.08 -0.53 - $9.85
1996 $9.92 0.58 -0.15 -0.58 - $9.77
1995 $9.54 0.63 0.38 -0.63 - $9.92
1994 $10.40 0.54 -0.86 -0.54 - $9.54
1993 $10.25 0.63 0.21 -0.63 -0.06 $10.40
1992(2) $10.00 0.36 0.25 -0.36 - $10.25

<CAPTION>
Ratio of Net
Ratio of Investment Ratio of Expenses to
Expenses to Income to Average Net Assets
Total Net Assets End of Average Net Average Net (Excluding Waivers and
Return# Period (000) Assets Assets Reimbursements)
<S> <C> <C> <C> <C> <C>
Equity Fund
Institutional Shares

1998 19.18% $283,170 1.08% 0.38% 1.11%

1997(1) 2.96% $237,567 1.09%* 0.53%* 1.09%*
Investment Shares

1998(2) 16.16%(3) $1,911 1.29%* (0.14%)* 1.37%*

Bond Fund
Institutional Shares

1998 8.43% $104,953 0.94% 5.11% 1.13%
1997(1) 3.49% $101,224 1.10%* 5.05%* 1.11%
Investment Shares

1998 8.25%(3) $10,346 1.10% 4.95% 1.25%
1997 6.41%(3) $23,630 1.13% 5.46% 1.56%
1996 4.44%(3) $44,552 1.08% 5.90% 1.58%
1995 10.94%(3) $63,521 1.04% 6.51% 1.51%
1994 (3.12%)(3) $58,827 1.20% 5.44% 1.50%
1993 8.42%(3) $97,246 1.11% 6.11% 1.40%
1992(2) 6.24%(3) $65,984 0.79%* 6.79%* 1.39%*

Ratio of Net Investment
Income to Average Net
Assets (Excluding Portfolio
Waivers and Turnover
Reimbursements) Rate
<S> <C> <C>
Equity Fund
Institutional Shares

1998
0.35% 54.19%
1997(1)
Investment Shares 0.53%* 64.68%

1998(2)
(0.22%)* 54.19%
Bond Fund
Institutional Shares

1998
1997(1) 4.92% 32.93%
Investment Shares 5.04%* 69.09%

1998
1997 4.80% 32.93%
1996 5.03% 69.09%
1995 5.40% 77.00%
1994 6.04% 79.00%
1993 5.14% 91.00%
1992(2) 5.82% 69.00%
6.19%* 88.00%
</TABLE>

* Annualized
# Returns are for the period indicated
(1) Commenced operations on June 13, 1997
(2) Commenced operations on November 24, 1997
(3) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable

Page 28 of 30

<PAGE>

EXPEDITION FUNDS

INVESTMENT ADVISER AND CUSTODIAN
Compass Bank
15 S. 20th Street
Birmingham, Alabama 35233

DISTRIBUTOR
SEI Investments Distribution Co.
One Freedom Valley Drive
Oaks, Pennsylvania 19456

LEGAL COUNSEL
Morgan, Lewis & Bockius LLP
1800 M Street, N.W.
Washington, DC 20036

More information about Expedition Funds is available without charge through the
following:

STATEMENT OF ADDITIONAL INFORMATION (SAI) The SAI dated March 1, 1999, includes
detailed information about Expedition Funds. The SAI is on file with the SEC and
is incorporated by reference into this prospectus. This means that the SAI, for
legal purposes, is a part of this prospectus.

ANNUAL AND SEMI-ANNUAL REPORTS These reports list the Fund's holdings and
contain information from the Fund's managers about strategies, and recent market
conditions and trends. The reports also contain detailed financial information
about the Funds.

TO OBTAIN MORE INFORMATION:
BY TELEPHONE: Call 1-800-922-2085

BY MAIL: Write to us
Expedition Funds
c/o State Street Bank and Trust Company

Page 29 of 30

<PAGE>

P.O. Box 8010
Boston, Massachusetts 02266

FROM THE SEC: You can also obtain the SAI or the Annual and Semi-annual reports,
as well as other information about Expedition Funds, from the SEC's website
("http://www.sec.gov"). You may review and copy documents at the SEC Public
Reference Room in Washington, DC (for information call 1-800-SEC-0330). You may
request documents by mail from the SEC, upon payment of a duplicating fee, by
writing to: Securities and Exchange Commission, Public Reference Section,
Washington, DC 20549-6009. Expedition Funds' Investment Company Act registration
number is 811-5900.

Page 30 of 30

<PAGE>

EXPEDITION FUNDS

Institutional Shares

PROSPECTUS
MARCH 1, 1999

EXPEDITION MONEY MARKET FUND
EXPEDITION TAX-FREE MONEY MARKET FUND

INVESTMENT ADVISER:
COMPASS BANK

INVESTMENT SUB-ADVISER:
WEISS, PECK & GREER, L.L.C.
(EXPEDITION TAX-FREE MONEY MARKET FUND)

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED ANY FUND SHARES
OR DETERMINED WHETHER THIS PROSPECTUS IS ACCURATE OR COMPLETE.
IT IS A CRIME FOR ANYONE TO TELL YOU OTHERWISE.

Page 1 of 20

<PAGE>

HOW TO READ THIS PROSPECTUS

Expedition Funds is a mutual fund family that offers different classes of shares
in separate investment portfolios (Funds). The Funds have individual investment
goals and strategies. This prospectus gives you important information about the
Institutional Shares of the Expedition Money Market Fund and Expedition Tax-Free
Money Market Fund that you should know before investing. Please read this
prospectus and keep it for future reference.

The Expedition Funds also offers shares of the Expedition Equity Fund and
Expedition Bond Fund in a separate prospectus which is available by calling
1-800-992-2085.

<TABLE>
<CAPTION>
PAGE
<S> <C>
MONEY MARKET FUND 4
TAX-FREE MONEY MARKET FUND 7
MORE INFORMATION ABOUT RISK 10
THE FUND'S OTHER INVESTMENTS 10
THE INVESTMENT ADVISER AND SUB-ADVISER 11
PURCHASING, SELLING AND EXCHANGING FUND SHARES 12
DIVIDENDS, DISTRIBUTIONS AND TAXES 16
FINANCIAL HIGHLIGHTS 17
HOW TO OBTAIN MORE INFORMATION ABOUT
EXPEDITION FUNDS Back Cover
</TABLE>

Page 2 of 20

<PAGE>

INTRODUCTION - INFORMATION COMMON TO BOTH FUNDS

Each Fund is a mutual fund. A mutual fund pools shareholders' money and, using
professional investment managers, invests it in securities.

Each Fund has an investment goal and strategies for reaching that goal. The
investment managers invest Fund assets in a way that they believe will help a
Fund achieve its goal. Still, investing in a Fund involves risks and there is no
guarantee that a Fund will achieve its goal. An investment manager's judgments
about the markets, the economy, or companies may not anticipate actual market
movements, economic conditions or company performance, and these judgments may
affect the return on your investment. In fact, no matter how good a job the
investment manager does, you could lose money on your investment in a Fund, just
as you could with other investments.

RISKS OF INVESTING IN THE FUNDS

An investment in either Fund is not a deposit of Compass Bank and is not insured
or guaranteed by the FDIC or any other government agency. Although each Fund
seeks to preserve the value of your investment at $1.00 per share, it is
possible to lose money by investing in either Fund.

Page 3 of 20

<PAGE>

EXPEDITION MONEY MARKET FUND

FUND SUMMARY

Investment Goal Current income consistent with stability of
principal

Investment Focus Money market instruments

Share Price Volatility Very low

Principal Investment Strategy Investing in a broad range of high quality
short-term U.S. dollar denominated debt
securities

Investor Profile Conservative investors who want to receive
current income through a liquid investment

INVESTMENT STRATEGY OF THE EXPEDITION MONEY MARKET FUND

The Fund invests in a broad range of high quality short-term U.S. dollar
denominated money market instruments, such as obligations of the U.S. Treasury
agencies and instrumentalities of the U.S. government, domestic and foreign
banks, domestic and foreign corporations, supranational entities, and foreign
governments. The Fund may also enter into fully collateralized repurchase
agreements. The Fund's portfolio is comprised only of short-term debt securities
that are rated in the highest category by nationally recognized ratings
organizations or securities that the Adviser determines are of equal quality.
The Fund will maintain an average dollar weighted maturity of 90 days or less,
and will only acquire securities that have a remaining maturity of 397 days or
less.

The Adviser's investment selection process seeks to add value through security
selection, sector rotation and positioning on the yield curve. Securities are
chosen based on the issuer's financial condition, the financial condition of any
person or company which guarantees the credit of the issuer, liquidity and
competitive yield. The Fund attempts to avoid purchasing or holding securities
that are subject to a decline in credit quality through careful credit screening
as well as ongoing monitoring of each issuer and any person or company providing
credit support.

PRINCIPAL RISKS OF INVESTING IN THE EXPEDITION MONEY MARKET FUND

An investment in the Fund is subject to income risk, which is the possibility
that the Fund's yield

Page 4 of 20
<PAGE>

will decline due to falling interest rates.

PERFORMANCE INFORMATION

This bar chart shows changes in the performance of the Fund's Institutional
Shares from year to year.*

<TABLE>
<CAPTION>
1998 5.25%
BEST QUARTER WORST QUARTER
<S> <C>
1.31% 1.24%
(09/30/98) (12/31/98)
</TABLE>

*The performance information shown above is based on a calendar year.

Call 1-800-992-2085 for the Fund's most current 7-day yield.

THIS TABLE SHOWS THE FUND'S AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDING
DECEMBER 31, 1998.

<TABLE>
<CAPTION>
SINCE
INSTITUTIONAL SHARES 1 YEAR INCEPTION
- ------------------------------------------------------------------------
<S> <C> <C>
Money Market Fund 5.25% 5.31%*

</TABLE>

*Since 6/9/97

FUND FEES AND EXPENSES

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

Page 5 of 20

<PAGE>

ANNUAL FUND OPERATING EXPENSES (EXPENSES DEDUCTED FROM FUND ASSETS)*

<TABLE>
<CAPTION>
INSTITUTIONAL
SHARES
- -------------------------------------------------------------------------------
<S> <C>
Management Fees .40%
Other Expenses .26%
- -------------------------------------------------------------------------------
Total Annual Fund Operating Expenses .66%

</TABLE>

* THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE MOST RECENT
FISCAL YEAR WERE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADVISER IS WAIVING
A PORTION OF THE FEES IN ORDER TO KEEP TOTAL OPERATING EXPENSES AT A SPECIFIED
LEVEL. THE ADVISER MAY DISCONTINUE ALL OR PART OF THESE WAIVERS AT ANY TIME.
WITH THESE FEE WAIVERS, THE FUND'S ACTUAL TOTAL OPERATING EXPENSES ARE AS
FOLLOWS:

MONEY MARKET FUND - INSTITUTIONAL SHARES .43%

FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER AND SUB-ADVISER."

EXAMPLE

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C>
$67 $211 $368 $822
</TABLE>

Page 6 of 20

<PAGE>

EXPEDITION TAX-FREE MONEY MARKET FUND

FUND SUMMARY

Investment Goal Current income exempt from Federal income taxes
consistent with stability of principal

Investment Focus Tax-free money market instruments

Share Price Volatility Very low

Principal Investment Strategy Investing in a well diversified portfolio of
short-term municipal securities which pay
interest that is exempt from Federal income
taxes

Investor Profile Taxable investors who want income exempt from
federal income taxes through a liquid investment

INVESTMENT STRATEGY OF THE EXPEDITION TAX-FREE MONEY MARKET FUND

The Fund invests substantially all of its assets in a broad range of high
quality short-term municipal money market instruments that pay interest that is
exempt from Federal income taxes. The issuers of these securities may be state
and local governments and agencies located in any of the fifty states, the
District of Columbia, Puerto Rico and other U.S. territories and possessions.
The Fund's portfolio seeks to be well diversified among these issuers, and will
be comprised only of short-term debt securities that are rated in one of the two
highest categories by nationally recognized ratings organizations, or have been
determined by the Sub-Adviser to be of equal quality. The Fund will maintain an
average dollar weighted maturity of 90 days or less, and will only acquire
securities that have a remaining maturity of 397 days or less.

The Adviser has engaged Weiss, Peck & Greer, L.L.C. as sub-adviser (Sub-Adviser)
to manage the Fund on a day-to-day basis. The Sub-Adviser's investment selection
process seeks to add value through a strategy that takes advantage of the
inefficient nature of the municipal securities market rather than attempting to
predict interest rate movements. Securities are chosen based on the issuer's
financial condition, the financial condition of any person or company which
guarantees the credit of the issuer, liquidity and competitive yield. The Fund
attempts to avoid purchasing or holding securities that are subject to a decline
in credit quality of the issue through careful credit screening, as well as
ongoing monitoring of each issuer and any person or company providing credit
support.

PRINCIPAL RISKS OF INVESTING IN THE EXPEDITION TAX-FREE MONEY MARKET FUND

An investment in the Fund is subject to income risk, which is the possibility
that the Fund's yield will decline due to falling interest rates.

Page 7 of 20
<PAGE>

There may be economic or political changes that impact the ability of municipal
issuers to repay principal and to make interest payments on municipal
securities. Changes to the financial condition or credit rating of municipal
issuers also may adversely affect the value of the Fund's municipal securities.

Since the Fund often purchases securities supported by credit enhancements from
banks and other financial institutions, changes in the credit quality of these
institutions could cause losses to the Fund and affect its share price.

PERFORMANCE INFORMATION

The Fund commenced operations on May 20, 1998 and did not have a full
calendar year of performance information at the time this prospectus was
printed.

FUND FEES AND EXPENSES

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

ANNUAL FUND OPERATING EXPENSES (EXPENSES DEDUCTED FROM FUND ASSETS)*

<TABLE>
<CAPTION>
INSTITUTIONAL
SHARES
- -------------------------------------------------------------------------------
<S> <C>
Management Fees 40%
Other Expenses 38%
- -------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 78%

</TABLE>

* THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE MOST RECENT
FISCAL YEAR WERE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADVISER IS WAIVING
A PORTION OF THE FEES IN ORDER TO KEEP TOTAL OPERATING EXPENSES AT A SPECIFIED
LEVEL. THE ADVISER MAY DISCONTINUE ALL OR PART OF THESE WAIVERS AT ANY TIME.
WITH THESE FEE WAIVERS, THE FUND'S ACTUAL TOTAL OPERATING EXPENSES ARE AS
FOLLOWS:

TAX-FREE MONEY MARKET FUND - INSTITUTIONAL SHARES .43%

FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER AND SUB-ADVISER."

Page 8 of 20
<PAGE>

EXAMPLE

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C>
$80 $249 $433 $966
</TABLE>

Page 9 of 20
<PAGE>

MORE INFORMATION ABOUT RISK

YEAR 2000 RISK - The Funds depend on the smooth functioning of computer systems
in almost every aspect of their business. Like other mutual funds, businesses
and individuals around the world, the Funds could be adversely affected if the
computer systems used by their service providers do not properly process dates
on and after January 1, 2000, and distinguish between the year 2000 and the year
1900. The Funds have asked their service providers whether they expect to have
their computer systems adjusted for the year 2000 transition, and are seeking
assurances from each service provider that they are devoting significant
resources to prevent material adverse consequences to the Funds. While it is
likely that such assurances will be obtained, the Funds and their shareholders
may experience losses if these assurances prove to be incorrect or as a result
of year 2000 computer difficulties experienced by issuers of portfolio
securities or third parties, such as custodians, banks, broker-dealers or others
with which the Funds do business.

EACH FUND'S OTHER INVESTMENTS

In addition to the investments and strategies described in this prospectus, the
Funds also may invest in other securities, use other strategies and engage in
other investment practices. These investments and strategies, as well as those
described in this prospectus, are described in detail in our Statement of
Additional Information. Of course, we cannot guarantee that either Fund will
achieve its investment goal.

Page 10 of 20
<PAGE>

INVESTMENT ADVISER AND SUB-ADVISER

The Investment Adviser makes investment decisions for the Money Market Fund and
continuously reviews, supervises and administers the Money Market Fund's
investment program. The Adviser oversees the Sub-Adviser to ensure compliance
with the Tax-Free Money Market Fund's investment policies and guidelines, and
monitors the Sub-Adviser's adherence to its investment style. The Adviser pays
the Sub-Adviser out of the investment advisory fees it receives (described
below). The Board of Trustees of Expedition Funds supervises the Adviser and
Sub-Adviser and establishes policies that the Adviser and Sub-Adviser must
follow in their management activities.

Compass Bank, a wholly-owned subsidiary of Compass Bancshares, Inc. (Compass
Bancshares), serves as the Adviser to the Funds. Compass Bank has served as
investment adviser to mutual funds since 1990. Through the Compass Asset
Management Group, the Adviser and its affiliates provide investment advisory
and management services for the assets of individuals, pension and profit
sharing plans, endowments and foundations. As of December 31, 1998, Compass
Bank had approximately $7.8 billion in assets under administration, with
investment discretion over $2.6 billion. For the fiscal period ended October
31, 1998, Compass Bank received advisory fees as a percentage of average
daily net assets (after waivers) of:

<TABLE>
<S> <C>
MONEY MARKET FUND .17%
TAX-FREE MONEY MARKET FUND .10%
</TABLE>

Weiss, Peck & Greer, L.L.C., (WPG) One New York Plaza, New York, NY 10004,
serves as the Sub-Adviser and manages the Tax-Free Money Market Fund on a
day-to-day basis. The Sub-Adviser selects, buys and sells securities for the
Fund under the supervision of the Adviser and the Board of Trustees.

WPG was founded in 1970, and engaged in investment management, venture
capital management and management buyouts. Since its founding, WPG has been
active in managing portfolios of tax exempt securities.

The Adviser has agreed to voluntarily waive a portion of its fees and
reimburse certain expenses of each Fund in order to limit the total operating
expenses of the Money Market Fund and Tax-Free Money Market Fund to 0.43% of
the average daily net assets of each Fund. The adviser may discontinue all
or part of these services at any time.

Page 11 of 20
<PAGE>

PURCHASING, SELLING AND EXCHANGING FUND SHARES

This section tells you how to buy, sell (sometimes called "redeem") or exchange
shares of the Funds.

Institutional Shares are for financial institutions investing for their own
or their customers' accounts. Institutional Shares are also available for
purchase by subsidiaries and other affiliates of Compass Bancshares,
including the Compass Asset Management Group, on behalf of certain qualifying
fiduciary, trust, agency, investment advisory, asset allocation, custody or
similar accounts.

HOW TO PURCHASE FUND SHARES

You may purchase shares directly by:
- - Mail
- - Telephone, or
- - Wire

To purchase Institutional Shares, qualifying customers of the Compass Asset
Management Group should contact their authorized Asset Management Group
representative by calling Compass Bank. Unless you arrange to pay by wire, you
must complete and send in an account application and enclose your check, payable
in U.S. dollars, to "Expedition Funds" and include the name of the appropriate
Fund(s) on the check. A Fund cannot accept third-party checks, credit cards,
credit card checks or cash.

GENERAL INFORMATION

You may purchase shares on any day that the New York Stock Exchange and the
Federal Reserve is open for business (a Business Day). Shares cannot be
purchased by Federal Reserve Wire on days when either the New York Stock
Exchange or the Federal Reserve is closed.

A Fund may reject any purchase order if it determines that accepting the order
would not be in the best interests of the Fund or its shareholders.

The price per share (the offering price) will be the net asset value per share
(NAV) next determined after the Fund receives your purchase order. We expect
that the NAV of the Funds will remain constant at $1.00 per share.

Page 12 of 20
<PAGE>

The Money Market Fund calculates its NAV each business day at 12:00 noon and
4:00 p.m. Central time. So, for you to be eligible to receive dividends
declared on the day you submit your purchase order, generally the Fund must
receive your order and federal funds (readily available funds) before 4:00
p.m., Central time.

The Tax-Free Money Market Fund calculates their NAV each Business Day at
12:00 noon Central time and the close of normal trading on the New York Stock
Exchange (normally 3:00 p.m. Central time). So, for you to be eligible to
receive dividends declared on the day you submit your purchase order,
generally the Fund must receive your order and federal funds (readily
available funds) before 1:00 p.m. Central time.

HOW WE CALCULATE NAV

NAV for one Fund share is the value of that share's portion of all of the net
assets in the Fund.

In calculating NAV for the Funds, we generally value a Fund's investment
portfolio using the amortized cost valuation method, which is described in
detail in our Statement of Additional Information. If this method is determined
to be unreliable during certain market conditions or for other reasons, a Fund
may value its portfolio at market price or fair value prices may be determined
in good faith using methods approved by the Board of Trustees.

HOW TO SELL YOUR FUND SHARES

Holders of the Institutional Shares may sell shares by following procedures
established when they opened their account or accounts. If you have questions,
customers of the Compass Asset Management Group should contact their Asset
Management Group authorized representative. Other investors holding shares
through a financial institution or intermediary should contact their financial
institution or intermediary.

The sale price of each share will be the next NAV determined after we receive
your request. Redemption requests received before 11:30 a.m. Central time for
the Tax-Free Money Market Fund and before 4:00 p.m. Central time for the Money
Market Fund will not be entitled to that day's dividend.

Page 13 of 20
<PAGE>

RECEIVING YOUR MONEY

REDEMPTIONS IN KIND

We generally pay sale (redemption) proceeds in cash. However, under unusual
conditions that make the payment of cash unwise (and for the protection of the
Fund's remaining shareholders), we might pay all or part of your redemption
proceeds in liquid securities with a market value equal to the redemption price
(redemption in kind). It is highly unlikely that your shares would ever be
redeemed in kind, but if they were you would probably have to pay transaction
costs to sell the securities distributed to you, as well as taxes on any capital
gains from the sale as with any redemption.

SUSPENSION OF YOUR RIGHT TO SELL YOUR SHARES

HOW TO EXCHANGE YOUR SHARES

You may exchange your shares for any other Institutional Shares of the
Expedition Funds on any Business Day by contacting us directly by mail or
telephone by calling 1-800-992-2085.

You may also exchange shares through your financial institution by mail or
telephone. Customers of the Compass Asset Management Group should contact
their Asset Management Group authorized representative.

IF YOU RECENTLY PURCHASED SHARES BY CHECK, YOU MAY NOT BE ABLE TO EXCHANGE
YOUR SHARES UNTIL YOUR CHECK HAS CLEARED (WHICH MAY TAKE UP TO 15 DAYS FROM
YOUR DATE OF PURCHASE). This exchange privilege may be changed or canceled at
any time upon 30 days' notice.

Page 14 of 20
<PAGE>

TELEPHONE TRANSACTIONS
Purchasing, selling and exchanging Fund shares over the telephone is extremely
convenient, but not without risk. Although the Fund has certain safeguards and
procedures to confirm the identity of callers and the authenticity of
instructions, the Fund is not responsible for any losses or costs incurred by
following telephone instructions we reasonably believe to be genuine. If you or
your financial institution transact with the Fund over the telephone, you will
generally bear the risk of any loss.

Page 15 of 20
<PAGE>

DIVIDENDS, DISTRIBUTIONS AND TAXES

Dividends are declared daily and paid monthly. Each Fund makes distributions of
capital gains, if any, at least annually. If you own Fund shares on a Fund's
record date, you will be entitled to receive the distribution.

You will receive dividends and distributions in the form of additional Fund
shares unless you elect to receive payment in cash. To elect cash payment, you
must notify us in writing prior to the date of the distribution. Your election
will be effective for dividends and distributions paid after we receive your
written notice. To cancel your election, simply send us written notice.

TAXES

The Tax-Free Money Market Fund intends to distribute the federally tax-exempt
income. The Tax-Free Money Market Fund may invest a portion of its assets in
securities that generate taxable income for federal or state income taxes.
Income exempt from federal tax may be subject to state and local taxes. Any
capital gains distributed by the Fund may be taxable.

MORE INFORMATION ABOUT TAXES IS IN THE STATEMENT OF ADDITIONAL INFORMATION.

CUSTODIAN
Compass Bank serves as Custodian for the assets of the Funds. It receives an
annual fee of .02% of each Fund's daily average net assets for this service.

Page 16 of 20
<PAGE>

FINANCIAL HIGHLIGHTS

The tables that follow present performance information about Institutional
Shares of the Funds. This information is intended to help you understand each
Fund's financial performance for the past five years, or, if shorter, the period
of the Fund's operations. Some of this information reflects financial
information for a single Fund share. The total returns in the tables represent
the rate that you would have earned (or lost) on an investment in a Fund,
assuming you reinvested all of your dividends and distributions. This
information has been audited by Deliotte & Touche LLP, independent public
accountants. Their report, along with each Fund's financial statements, appears
in the annual report that accompanies our Statement of Additional Information.
You can obtain the annual report, which contains more performance information,
at no charge by calling 1-800-992-2085.

Page 17 of 20
<PAGE>

FINANCIAL HIGHLIGHTS

FOR THE PERIODS ENDED OCTOBER 31,

FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.

<TABLE>
<CAPTION>
Net Asset Realized and Distributions
Value, Unrealized Gains from Net Net Asset
Beginning of Net Investment or (losses) Investment Distributions from Value, End Total
Period Income on Investments Income Capital Gains of Period Return+
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
MONEY MARKET FUND
INSTITUTIONAL SHARES
1998 $1.00 0.05 -- (0.05) -- $1.00 5.33%
1997(1) $1.00 0.02 -- (0.02) -- $1.00 5.26

Ratio of Net Ratio of Net Investment
Ratio of Investment Ratio of Expenses to Income to Average Net
Expenses to Income to Average Net Assets Assets (Excluding Portfolio
Net Assets End of Average Net Average Net (Excluding Waivers and Waivers and Turnover
Period (000) Assets Assets Reimbursements) Reimbursements) Rate
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
MONEY MARKET FUND
INSTITUTIONAL SHARES
1998 $102,699 0.43% 5.18% 0.66% 4.95% --
1997(1) $48,006 0.43%* 5.22%* 0.70%* 4.95%* --
</TABLE>

(1) COMMENCED OPERATIONS ON JUNE 13, 1997

Page 18 of 20
<PAGE>

EXPEDITION FUNDS

INVESTMENT ADVISER AND CUSTODIAN
Compass Bank
15 S. 20th Street
Birmingham, Alabama 35233

DISTRIBUTOR
SEI Investments Distribution Co.
One Freedom Valley Drive
Oaks, Pennsylvania 19456

LEGAL COUNSEL
Morgan, Lewis & Bockius LLP
1800 M Street, N.W.
Washington, DC 20036

More information about Expedition Funds is available without charge through the
following:

STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI dated March 1, 1999, includes detailed information about Expedition
Funds. The SAI is on file with the SEC and is incorporated by reference into
this prospectus. This means that the SAI, for legal purposes, is a part of this
prospectus.

ANNUAL AND SEMI-ANNUAL REPORTS
These reports list the Funds' holdings and contain information from the Funds'
managers about strategies, and recent market conditions and trends. The reports
also contain detailed financial information about the funds.

TO OBTAIN MORE INFORMATION:
BY TELEPHONE: Call 1-800-992-2085

BY MAIL: Write to us
Expedition Funds
c/o State Street Bank and Trust Company
P.O. Box 8010
Boston, Massachusetts 02266

Page 19 of 20

<PAGE>

Page 20 of 20
<PAGE>

EXPEDITION FUNDS

Investment Service Shares

PROSPECTUS

MARCH 1, 1999

EXPEDITION MONEY MARKET FUND
EXPEDITION TAX-FREE MONEY MARKET FUND

INVESTMENT ADVISER:
COMPASS BANK
INVESTMENT SUB-ADVISER:
WEISS, PECK & GREER, L.L.C.
(EXPEDITION TAX-FREE MONEY MARKET FUND)

The Securities and Exchange Commission has not approved any Fund shares or
determined whether this prospectus is accurate or complete.
It is a crime for anyone to tell you otherwise.

Page 1 of 20
<PAGE>

HOW TO READ THIS PROSPECTUS

Expedition Funds is a mutual fund family that offers different classes of shares
in separate investment portfolios (Funds). The Funds have individual investment
goals and strategies. This prospectus gives you important information about the
Investment Service Shares of the Expedition Money Market Fund and Expedition
Tax-Free Money Market Fund that you should know before investing. Please read
this prospectus and keep it for future reference.

Expedition Funds also offers shares of the Expedition Equity Fund and Expedition
Bond Fund in a separate prospectus which is available by calling 1-800-992-2085.

Page
MONEY MARKET FUND 4
TAX-FREE MONEY MARKET FUND 7
MORE INFORMATION ABOUT RISK 10
THE FUND'S OTHER INVESTMENTS 10
THE INVESTMENT ADVISER AND SUB-ADVISER 11
PURCHASING, SELLING AND EXCHANGING FUND SHARES 12
DIVIDENDS, DISTRIBUTIONS AND TAXES 15
FINANCIAL HIGHLIGHTS 17
HOW TO OBTAIN MORE INFORMATION ABOUT
EXPEDITION FUNDS BACK COVER

Page 2 of 20
<PAGE>

INTRODUCTION - INFORMATION COMMON TO BOTH FUNDS

Each Fund is a mutual fund. A mutual fund pools shareholders' money and, using
professional investment managers, invests it in securities.

Each Fund has an investment goal and strategies for reaching that goal. The
investment managers invest Fund assets in a way that they believe will help a
Fund achieve its goal. Still, investing in the Fund involves risk and there is
no guarantee that a Fund will achieve its goal. An investment manager's
judgments about the markets, the economy, or companies may not anticipate actual
market movements, economic conditions or company performance, and these
judgments may affect the return on your investment. In fact, no matter how good
a job an investment manager does, you could lose money on your investment in a
Fund, just as you could with other investments.

RISKS OF INVESTING IN THE FUNDS

An investment in either Fund is not a deposit of Compass Bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation FDIC or
any other government agency. Although each Fund seeks to preserve the value
of your investment at $1.00 per share, it is possible to lose money by
investing in either Fund.

Page 3 of 20
<PAGE>

EXPEDITION MONEY MARKET FUND

Fund Summary

Investment Goal Current income consistent with stability of
principal

Investment Focus Money market instruments

Share Price Volatility Very low

Principal Investment Investing in a broad range of high quality short-
Strategy term U.S. dollar denominated debt securities

Investor Profile Conservative investors who want to receive current
income through a liquid investment

INVESTMENT STRATEGY OF THE EXPEDITION MONEY MARKET FUND

The Fund invests in a broad range of high quality short-term U.S. dollar
denominated money market instruments, such as obligations of the U.S. Treasury,
agencies and instrumentalities of the U.S. government, domestic and foreign
banks, domestic and foreign corporations, supranational entities, and foreign
governments. The Fund may also enter into fully collateralized repurchase
agreements. The Fund's portfolio is comprised only of short-term debt
securities that are rated in the highest category by nationally recognized
ratings organizations or securities that the Adviser determines are of equal
quality. The Fund will maintain an average dollar weighted maturity of 90 days
or less, and will only acquire securities that have a remaining maturity of 397
days or less.

PRINCIPAL RISKS OF INVESTING IN THE EXPEDITION MONEY MARKET FUND

An investment in the Fund is subject to income risk, which is the possibility
that the Fund's yield will decline due to falling interest rates.

Performance Information

The bar chart and the performance table below illustrate the risks and
volatility of an investment in the

Page 4 of 20
<PAGE>

Fund. Of course, the Fund's past performance does not necessarily indicate how
the Fund will perform in the future.

This bar chart shows changes in the performance of the Fund's Investment Service
Shares from year to year.*

<TABLE>
<S> <C>
1991 5.99%
1992 3.73%
1993 2.77%
1994 3.65%
1995 5.59%
1996 4.86%
1997 5.03%
1998 4.99%

<CAPTION>
BEST QUARTER WORST QUARTER
<S> <C> <C>
1.67% 0.66%
(03/31/91) (03/31/94)
</TABLE>

* The performance information shown above is based on a calendar year.

Call 1-800-992-2085 for the Fund's most current 7-day yield.

THIS TABLE PRESENTS THE FUND'S AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS
ENDING DECEMBER 31, 1998.

<TABLE>
<CAPTION>
SINCE
INVESTMENT SERVICE SHARES 1 YEAR 5 YEARS INCEPTION
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
Money Market Fund 4.99% 4.82% 4.92%*
</TABLE>

* Since 2/5/90

FUND FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.

ANNUAL FUND OPERATING EXPENSES (EXPENSES DEDUCTED FROM FUND ASSETS)*

<TABLE>
<CAPTION>
INVESTMENT SERVICE
SHARES
- --------------------------------------------------------------------------------
<S> <C>
Management Fees .40%
Shareholder Servicing Fees .25%
Other Expenses .26%
- --------------------------------------------------------------------------------
Total Annual Fund Operating Expenses .91%
</TABLE>

* THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE MOST RECENT
FISCAL YEAR WERE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADVISER IS WAIVING
A PORTION OF THE FEES IN ORDER TO KEEP

Page 5 of 20
<PAGE>

TOTAL OPERATING EXPENSES AT A SPECIFIED LEVEL. THE ADVISER MAY DISCONTINUE ALL
OR PART OF THESE WAIVERS AT ANY TIME. WITH THESE FEE WAIVERS, THE FUND'S ACTUAL
TOTAL OPERATING EXPENSES ARE AS FOLLOWS:

MONEY MARKET FUND - INVESTMENT SERVICE SHARES .68%

FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER AND SUB-ADVISER"
AND "SHAREHOLDER SERVICES."

EXAMPLE

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C>
$93 $290 $504 $1,120
</TABLE>

Page 6 of 20
<PAGE>

EXPEDITION TAX-FREE MONEY MARKET FUND

Fund Summary

Investment Goal Current income exempt from Federal income taxes
consistent with stability of principal

Investment Focus Tax-free money market instruments

Share Price Volatility Very low

Principal Investment Investing in a well diversified portfolio of
Strategy short-term municipal securities which pay interest
that is exempt from Federal income taxes

Investor Profile Taxable investors who want income exempt from
federal income taxes through a liquid investment

INVESTMENT STRATEGY OF THE EXPEDITION TAX-FREE MONEY MARKET FUND

The Adviser has engaged Weiss, Peck & Greer, L.L.C. as sub-adviser
(Sub-Adviser) to manage the Fund on a day-to-day basis. The Sub-Adviser's
investment selection process seeks to add value through a strategy that takes
advantage of the inefficient nature of the municipal securities market rather
than attempting to predict interest rate movements. Securities are chosen based
on the issuer's financial condition, the financial condition of any person or
company which guarantees the credit of the issuer, liquidity and competitive
yield. The Fund attempts to avoid purchasing or holding securities that are
subject to a decline in credit quality of the issue through careful credit
screening, as well as ongoing monitoring of each issuer and any person or
company providing credit support.

PRINCIPAL RISKS OF INVESTING IN THE EXPEDITION TAX-FREE MONEY MARKET FUND

An investment in the Fund is subject to income risk, which is the possibility
that the Fund's yield will decline due to falling interest rates.

Page 7 of 20
<PAGE>

There may be economic or political changes that impact the ability of municipal
issuers to repay principal and to make interest payments on municipal
securities. Changes in the financial condition or credit rating of municipal
issuers also may adversely affect the value of the Fund's securities.

PERFORMANCE INFORMATION

The Fund commenced operations on May 20, 1998 and did not have a full calendar
year of performance information at the time this prospectus was printed.

FUND FEES AND EXPENSES

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

ANNUAL FUND OPERATING EXPENSES (expenses deducted from Fund assets)*

<TABLE>
<CAPTION>
INVESTMENT SERVICE
SHARES
- ------------------------------------------------------------------------------
<S> <C>
Management Fees .40%
Shareholder Servicing Fees .25%
Other Expenses .38%
- ------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 1.03%
</TABLE>

* THE FUND'S TOTAL ACTUAL ANNUAL FUND OPERATING EXPENSES FOR THE MOST RECENT
FISCAL YEAR WERE LESS THAN THE AMOUNT SHOWN ABOVE BECAUSE THE ADVISER IS WAIVING
A PORTION OF THE FEES IN ORDER TO KEEP TOTAL OPERATING EXPENSES AT A SPECIFIED
LEVEL. THE ADVISER MAY DISCONTINUE ALL OR PART OF THESE WAIVERS AT ANY TIME.
WITH THESE FEE WAIVERS, THE FUND'S ACTUAL TOTAL OPERATING EXPENSES ARE AS
FOLLOWS:

TAX-FREE MONEY MARKET FUND- INVESTMENT SERVICE SHARES .68%

FOR MORE INFORMATION ABOUT THESE FEES, SEE "INVESTMENT ADVISER AND SUB-ADVISER"
AND "SHAREHOLDER SERVICES."

EXAMPLE

Page 8 of 20
<PAGE>

The Example also assumes that each year your investment has a 5% return and
Fund operating expenses remain the same. Although your actual costs may be
higher or lower, your approximate costs of investing $10,000 in the Fund
would be:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C>
$105 $328 $569 $1,259
</TABLE>

Page 9 of 20
<PAGE>

MORE INFORMATION ABOUT RISK

YEAR 2000 RISK - The Funds depend on the smooth
functioning of computer systems in almost every
aspect of their business. Like other mutual
funds, businesses and individuals around the
world, the Funds could be adversely affected if
the computer systems used by its service
providers do not properly process dates on and
after January 1, 2000, and distinguish between
the year 2000 and the year 1900. The Funds
have asked their service providers whether they
expect to have their computer systems adjusted
for the year 2000 transition, and is seeking
assurances from each service provider that they
are devoting significant resources to prevent
material adverse consequences to the Funds.
While it is likely that such assurances will be
obtained, the Funds and their shareholders may
experience losses if these assurances prove to
be incorrect or as a result of year 2000
computer difficulties experienced by issuers of
portfolio securities or third parties, such as
custodians, banks, broker-dealers or others
with which the Funds do business.

EACH FUND'S OTHER INVESTMENTS

Page 10 of 20
<PAGE>

INVESTMENT ADVISER AND SUB-ADVISER

Compass Bank, a wholly-owned subsidiary of Compass Bancshares, Inc., (Compass
Bancshares) serves as the Adviser to the Funds. Compass Bank has served as
investment adviser to mutual funds since 1990. Through the Compass Asset
Management Group, the Adviser and its affiliates provide investment advisory
and management services for the assets of individuals, pension and profit
sharing plans, endowments and foundations. As of December 31, 1998, Compass
Bank had approximately $7.8 billion in assets under administration, with
investment discretion over $2.6 billion. For the fiscal period ended October
31, 1998, Compass Bank received advisory fees as a percentage of average
daily net assets (after waivers) of:

<TABLE>
<S> <C>
MONEY MARKET FUND .17%
TAX-FREE MONEY MARKET FUND .10%
</TABLE>

WPG was founded in 1970, and engages in investment management, venture
capital management and management buyouts. Since its founding, WPG has been
active in managing portfolios of tax-exempt securities.

The Adviser has
agreed to voluntarily waive a portion of its fees and reimburse certain
expenses of each Fund in order to limit the tatal operating expenses of the
Money Market Fund and the Tax-Free Money Market Fund to 0.68% of the average
daily net assets of each Fund.

Page 11 of 20

<PAGE>

PURCHASING, SELLING AND EXCHANGING FUND SHARES

This section tells you how to buy, sell (sometimes called "redeem") or exchange
shares of the Funds.

Investment Service Shares are for individual and institutional investors.

Investment Service Shares are also available to customers of subsidiaries and
other affiliates of Compass Bancshares, including certain customers
maintaining accounts with the Compass Asset Management Group or obtaining
brokerage, investment and similar services through Compass Brokerage, Inc. or
other subsidiaries or affiliates of Compass Bancshares.

HOW TO PURCHASE FUND SHARES

You may purchase shares by:
- - Mail
- - Telephone, or
- - Wire

To purchase shares directly from us, please call 1-800-992-2085, or complete
and send in an account application. To purchase Investment Service Shares
through their Compass Asset Management Group account, customers should
contact their authorized Asset Management Group representative. Compass
Brokerage, Inc. customers should contact their Compass Brokerage, Inc.
authorized representative. Unless you arrange to pay by wire, you must
complete and send in an account application and enclose your check, payable
in U.S. dollars, to "Expedition Funds" and include the name of the
appropriate Fund(s) on the check. A Fund cannot accept third-party checks,
credit cards, credit card checks or cash.

You may also buy shares through accounts with brokers and other institutions
that are authorized to place trades in Fund shares for their customers. If you
invest through an authorized institution, you will have to follow its
procedures, which may be different from the procedures for investing directly.
Your institution may charge a fee for its services, in addition to the fees
charged by the Fund. You will also generally have to address your
correspondence or questions regarding the Fund to your institution.

GENERAL INFORMATION

You may purchase shares on any day that the New York Stock Exchange and the
Federal Reserve are open for business (a Business Day). Shares cannot be
purchased by Federal Reserve Wire on days when either the New York Stock
Exchange or the Federal Reserve is closed.

A Fund may reject any purchase order if it determines that accepting the order
would not be in the best interests of the Fund or its shareholders.

Page 12 of 20
<PAGE>

The Money Market Fund calculates its NAV each business day at 12:00 noon and
4:00 p.m. Central time. So, for you to be eligible to receive dividends
declared on the day you submit your purchase order, generally the Fund must
receive your order before 1:00 p.m. Central time and federal funds (readily
available funds) before 4:00 p.m. Central time.

The Tax-Free Money Market Fund calculates its Fund's NAV each Business Day at
12:00 noon Central time and the close of normal trading on the New York Stock
Exchange (normally 3:00 p.m. Central time). So, for you to be eligible to
receive dividends declared on the day you submit your purchase order, generally
the fund must receive your order before 1:00 p.m. Central time and federal funds
(readily available funds) before 1:00 p.m. Central time.

HOW WE CALCULATE NAV

NAV for one Fund share is the value of that share's portion of all of the net
assets in the Fund.

MINIMUM PURCHASES

To purchase Investment Service Shares for the first time, you must invest at
least $1,000 in either Fund. The minimum purchase amount for IRA accounts is
$500. The minimum of $25 in the case of directors, officers and employees of
Compass Bancshares and its affiliates and members of their immediate
families) participaiting in the Systematic Investment Plan. Your subsequent
investments in either Fund must be made in amounts of at least $100 ($25 for
directors, officers and employees of Compass Bancshares and its affiliates
and members of their immediate families).

A Fund may accept investments of smaller amounts at its discretion.

SYSTEMATIC INVESTMENT PLAN

If you have a checking or savings account with a bank, you may purchase shares
of either Fund automatically through regular deductions from your account. Once
your account has been opened, you may begin regularly scheduled investments of
at least $100($25 in the case of directors, officers and employees of Compass
Bancshares and its affiliates and members of their emmediate families).

HOW TO SELL YOUR FUND SHARES

If you own your shares through an account with a broker or other institution,
contact that broker or institution to sell your shares. Compass Asset
Management customers should contact their Asset Management Group authorized
representative. Customers of Compass Brokerage Inc. should contact their
Compass Brokerage authorized representative.

If you own your shares directly, you may sell your shares on any Business Day by
contacting us directly by mail or telephone by calling 1-800-992-2085.

If you would like to sell $40,000 or more of your shares, please notify the Fund
in writing and include a

Page 13 of 20
<PAGE>

signature guarantee by a bank or other financial institution (a notarized
signature is not sufficient).

SYSTEMATIC WITHDRAWAL PLAN

If you have at least $10,000 in your account, you may use the systematic
withdrawal plan. Under the plan you may arrange monthly, quarterly, semi-annual
or annual automatic withdrawals from any Fund. The proceeds of each withdrawal
will be mailed to you by check or, if you have an account with a bank,
electronically transferred to your account.

RECEIVING YOUR MONEY

REDEMPTIONS IN KIND

We generally pay sale (redemption) proceeds in cash. However, under unusual
conditions that make the payment of cash unwise (and for the protection of the
Fund's remaining shareholders) we might pay all or part of your redemption
proceeds in liquid securities with a market value equal to the redemption price
(redemption in kind). It is highly unlikely that your shares would ever be
redeemed in kind, but if they were you would probably have to pay transaction
costs to sell the securities distributed to you, as well as taxes on any capital
gains from the sale as with any redemption.

INVOLUNTARY REDEMPTIONS OF YOUR SHARES

If your account balance drops below $1,000 because of redemptions, the Fund may
redeem your shares. But, the Fund will always give you at least 30 days'
written notice to give you time to add to your account and avoid the
involutary redemption of your shares.

SUSPENSION OF YOUR RIGHT TO SELL YOUR SHARES

HOW TO EXCHANGE YOUR SHARES

You may exchange your shares on any Business Day by contacting us directly by
mail or telephone by

Page 14 of 20
<PAGE>

calling 1-800-992-2085.

You may also exchange shares through your financial institution by mail or
telephone. Compass Asset Management customers should contact their Asset
Management Group authorized representative. Customers of Compass Brokerage Inc.
should contact their Compass Brokerage authorized representative. Exchange
requests must be for an amount of at least $1,000 ($25 for directors,
officers and employees of Compass Bancshares and its affiliates and members of
their immediate families).

IF YOU RECENTLY PURCHASED SHARES BY CHECK, YOU MAY NOT BE ABLE TO EXCHANGE YOUR
SHARES UNTIL YOUR CHECK HAS CLEARED (WHICH MAY TAKE UP TO 15 DAYS from your
date of purchase). This exchange privilege may be changed or canceled at any
time upon 30 days' notice.

If you exchange shares that you purchased without a sales charge or with a lower
sales charge into a Fund with a sales charge or with a higher sales charge, the
exchange is subject to an incremental sales charge (e.g., the difference between
the lower and higher applicable sales charges). If you exchange shares into a
Fund with the same, lower or no sales charge there is no incremental sales
charge for the exchange.

TELEPHONE TRANSACTIONS

SHAREHOLDER SERVICES

Each Fund has adopted a shareholder service plan that allows the Funds to pay
service fees for services provided to Investment Service shareholders. Because
these fees are paid out of a Fund's assets continuously, over time these fees
will increase the cost of your investment and may cost you more than paying
other types of sales charges.

Shareholder servicing fees under the plan, as a percentage of average daily net
assets, are .25% for Investment Service Shares.

The Distributor may, from time to time in its sole discretion, institute one or
more promotional incentive programs for dealers, which will be paid for by the
Distributor. Under any such program, the Distributor may provide incentives, in
the form of cash or other compensation, including merchandise, airline vouchers,
trips and vacation packages, to dealers selling shares of the Funds.

DIVIDENDS, DISTRIBUTIONS AND TAXES

Dividends are declared daily and paid monthly. Each Fund makes distributions of
capital gains, if any, at

Page 15 of 20
<PAGE>

least annually. If you own Fund shares on a Fund's record date, you will be
entitled to receive the distribution.

TAXES

PLEASE CONSULT YOUR TAX ADVISER REGARDING YOUR SPECIFIC QUESTIONS ABOUT FEDERAL,
STATE AND LOCAL INCOME TAXES. Below we have summarized some important tax
issues that affect the Funds and its shareholders. This summary is based on
current tax laws, which may change.

The Fund will distribute substantially all of its income and capital gains, if
any. The dividends and distributions you receive may be subject to federal,
state and local taxation, depending upon your tax situation. Distributions you
receive from the Fund may be taxable whether or not you reinvest them. EACH
SALE OR EXCHANGE OF FUND SHARES IS A TAXABLE EVENT.

The Tax-Free Money Market Fund intends to distribute federally tax-exempt
income. The Tax-Free Money Market Fund may invest a portion of its assets in
securities that generate taxable income for federal or state income taxes.
Income exempt from federal tax may be subject to state and local taxes. Any
capital gains distributed by the Fund may be taxable.

MORE INFORMATION ABOUT TAXES IS IN THE STATEMENT OF ADDITIONAL INFORMATION.

CUSTODIAN

Compass Bank serves as Custodian for the assets of the Funds. It receives an
annual fee of .02% of each Fund's daily average net assets for this service.

Page 16 of 20
<PAGE>

FINANCIAL HIGHLIGHTS

The tables that follow present performance information about Investment Service
Shares of the Funds. This information is intended to help you understand each
Fund's financial performance for the past five years, or, if shorter, the period
of the Fund's operations. Some of this information reflects financial
information for a single Fund share. The total returns in the tables represent
the rate that you would have earned (or lost) on an investment in a Fund,
assuming you reinvested all of your dividends and distributions. This
information has been audited by Deloitte & Touche LLP, independent public
accountants. Their report, along with each Fund's financial statements, appears
in the annual report that accompanies our Statement of Additional Information.
You can obtain the annual report, which contains more performance information,
at no charge by calling 1-800-992-2085.

Page 17 of 20
<PAGE>

FINANCIAL HIGHLIGHTS

FOR THE PERIODS ENDED OCTOBER 31,

FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.

NET ASSET REALIZED AND DISTRIBUTIONS
VALUE, UNREALIZED GAINS FROM NET NET ASSET
BEGINNING OF NET INVESTMENT OR (LOSSES) INVESTMENT DISTRIBUTIONS FROM VALUE, END
PERIOD INCOME ON INVESTMENTS INCOME CAPITAL GAINS OF PERIOD
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
MONEY MARKET FUND
Investment Service Shares (1)
1998 $1.00 0.05 -- (0.05) -- $1.00
1997(1) $1.00 0.08 -- (0.08) -- $1.00
1996 $1.00 0.04 -- (0.04) -- $1.00
1995 $1.00 0.05 -- (0.05) -- $1.00
1994 $1.00 0.03 -- (0.03) -- $1.00
1993 $1.00 0.03 -- (0.03) -- $1.00
1992 $1.00 0.04 -- (0.04) -- $1.00
1991 $1.00 0.06 -- (0.06) -- $1.00
1990 (2) $1.00 0.06 -- (0.06) -- $1.00
TAX-FREE MONEY MARKET FUND
INVESTMENT SERVICE SHARES (3)
1998 $1.00 0.01 -- (0.01) -- $1.00

<CAPTION>
RATIO OF NET
RATIO OF INVESTMENT RATIO OF EXPENSES TO
EXPENSES TO INCOME TO AVERAGE NET ASSETS
TOTAL NET ASSETS END OF AVERAGE NET AVERAGE NET (EXCLUDING WAIVERS AND
RETURN PERIOD (000) ASSETS ASSETS REIMBURSEMENTS)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
MONEY MARKET FUND
Investment Service Shares (1)
1998 5.07% $142,910 0.68% 4.95% 0.91%
1997(1) 4.97% $147,651 0.73% 4.84% 0.85%
1996 4.95% $136,666 0.71% 4.85% 0.71%
1995 5.51% $141,434 0.56% 5.38% 0.66%
1994 3.29% $158,367 0.75% 3.26% 0.79%
1993 2.84% $131,508 0.70% 2.83% 0.70%
1992 4.07% $187,394 0.64% 4.01% 0.65%
1991 6.44% $212,997 0.62% 6.13% 0.67%
1990 (2) 5.89% $117,716 0.58% 7.80% 0.68%
TAX-FREE MONEY MARKET FUND
INVESTMENT SERVICE SHARES (3)
1998 1.33% $64,542 0.68%* 2.95%* 0.78%*

<CAPTION>
RATIO OF NET INVESTMENT
INCOME TO AVERAGE NET
ASSETS (EXCLUDING PORTFOLIO
WAIVERS AND TURNOVER
REIMBURSEMENTS) RATE
- ----------------------------------------------------------------------
<S> <C> <C>
MONEY MARKET FUND
Investment Service Shares (1)
1998 4.73% --
1997(1) 4.72% --
1996 4.85% --
1995 5.28% --
1994 3.22% --
1993 2.83% --
1992 4.00% --
1991 6.08% --
1990 (2) 7.70%* --
TAX-FREE MONEY MARKET FUND
INVESTMENT SERVICE SHARES (3)
1998 2.85%* --
</TABLE>

* ANNUALIZED
(1) DURING 1997, THE STARBURST MONEY MARKET TRUST SHARES WERE RENAMED THE
EXPEDITION MONEY MARKET INVESTMENT SERVICE SHARES.
(2) COMMENCED OPERATIONS ON FEBRUARY 5, 1990.
(3) COMMENCED OPERATIONS ON MAY 20, 1998.

Page 18 of 20
<PAGE>

EXPEDITION FUNDS

INVESTMENT ADVISER AND CUSTODIAN
Compass Bank
15 S. 20th Street
Birmingham, Alabama 35233

DISTRIBUTOR
SEI Investments Distribution Co.
One Freedom Valley Drive
Oaks, Pennsylvania 19456

LEGAL COUNSEL
Morgan, Lewis & Bockius LLP
1800 M Street, N.W.
Washington, DC 20036

More information about Expedition Funds is available without charge through the
following:

STATEMENT OF ADDITIONAL INFORMATION (SAI)

The SAI dated March 1, 1999, includes detailed information about Expedition
Funds. The SAI is on file with the SEC and is incorporated by reference into
this prospectus. This means that the SAI, for legal purposes, is a part of this
prospectus.

TO OBTAIN MORE INFORMATION:
BY TELEPHONE: CALL 1-800-992-2085

BY MAIL: Write to us
Expedition Funds
c/o State Street Bank and Trust Company
P.O. Box 8010
Boston, Massachusetts 02266

FROM THE SEC: You can also obtain the SAI or the Annual and Semi-annual
reports, as well as other information about Expedition Funds, from the SEC's
website ("HTTP://WWW.SEC.GOV"). You may review and copy documents at the SEC
Public Reference Room in Washington, DC (for information call 1-800-SEC-0330).
You may request documents by mail from the SEC, upon

Page 19 of 20
<PAGE>

payment of a duplicating fee, by writing to: Securities and Exchange
Commission, Public Reference Section, Washington, DC 20549-6009. Expedition
Funds' Investment Company Act registration number is 811-5900.

Page 20 of 20
<PAGE>
EXPEDITION MONEY MARKET FUND
EXPEDITION TAX-FREE MONEY MARKET FUND
EXPEDITION BOND FUND
EXPEDITION EQUITY FUND

(PORTFOLIOS OF THE EXPEDITION FUNDS)

MARCH 1, 1999

Investment Adviser:

Compass Bank

This STATEMENT OF ADDITIONAL INFORMATION is not a prospectus. It is intended
to provide additional information regarding the activities and operations of the
Expedition Funds (the "Trust") and should be read in conjunction with the
Trust's prospectuses dated March 1, 1999. Prospectuses may be obtained by
writing to the Trust or calling toll-free 1-800-992-2085.

TABLE OF CONTENTS

<TABLE>
<S> <C>
The Trust................................................................. S-2
Investment Objectives..................................................... S-2
Description of Permitted Investments...................................... S-4
Investment Limitations.................................................... S-14
The Expedition Funds Management...........................................
Investment Advisers....................................................... S-20
The Administrator......................................................... S-21
The Distributor........................................................... S-22
The Transfer Agent........................................................ S-22
The Custodian............................................................. S-22
Independent Auditors...................................................... S-23
Legal Counsel............................................................. S-23
Trustees and Officers of the Trust........................................ S-23
Performance Information................................................... S-26
Computation of Yield...................................................... S-26
Calculation of Total Return............................................... S-27
Purchasing Shares......................................................... S-29
Redeeming Shares.......................................................... S-30
Determination of Net Asset Value.......................................... S-30
Taxes..................................................................... S-32
Fund Transactions......................................................... S-36
Trading Practices and Brokerage........................................... S-36
Description of Shares..................................................... S-37
Shareholder Liability..................................................... S-38
Limitation of Trustees' Liability......................................... S-38
Year 2000................................................................. S-38
5% and 25% Shareholders................................................... S-38
Experts................................................................... S-40
</TABLE>

<PAGE>
THE TRUST

Each Fund is a portfolio in the Expedition Funds (the "Trust"). The Trust,
formerly The Starburst Funds, was established as a Massachusetts business trust
under a Declaration of Trust dated August 7, 1989.

Shares of the Expedition Money Market Fund and the Expedition Tax-Free Money
Market Fund (together the "Money Market Funds") are offered in two classes,
known as Investment Service Shares and Institutional Shares. Shares of the
Expedition Bond Fund (the "Bond Fund") and the Expedition Equity Fund (the
"Equity Fund") are offered in three classes, known as the Investment
Shares--Class A ("Class A Shares") (formerly, Investment Shares), Investment
Shares--Class B ("Class B Shares") and Institutional Shares. Each of the Money
Market, Bond and Equity Funds are referred to herein as a "Fund" and
collectively as the "Funds." Capitalized terms not defined herein are defined in
the Prospectuses. No investment in shares of a Fund should be made without first
reading the Fund's prospectus carefully.

ADDITIONAL INFORMATION ABOUT THE FUNDS AND THEIR INVESTMENT OBJECTIVES

No Fund's investment objective can be changed without approval of
shareholders.

EXPEDITION MONEY MARKET FUND

The Money Market Fund's investment objective is to provide current income
consistent with stability of principal.

The Fund invests in high quality money market instruments that are either
rated in the highest short-term rating category by one or more nationally
recognized statistical rating organizations or of comparable quality to
securities having such ratings. Examples of these instruments include, but are
not limited to:

- debt obligations issued by U.S. and foreign corporations, including
variable rate demand notes;

- commercial paper (including Canadian Commercial Paper ("CCP") and
Europaper);

- certificates of deposit, demand and time deposits, bankers' acceptances
and other instruments of domestic and foreign banks and other deposit
institutions ("Bank Instruments");

- short-term credit facilities, such as demand notes;

- debt obligations issued by Canada and other foreign nations, as well as by
supranational entities such as the World Bank;

- asset-backed and mortgage-backed securities, including collateralized
mortgage obligations ("CMOs");

- obligations issued or guaranteed as to payment of principal and interest
by the U.S. Government or one of its agencies or instrumentalities
("Government Securities"); and

- other money market instruments, including shares of other money market
funds.

The Fund invests only in instruments denominated and payable in U.S.
dollars.

EXPEDITION TAX-FREE MONEY MARKET FUND

The Tax-Free Money Market Fund's investment objective is to provide current
income, exempt from Federal income taxes, consistent with stability of
principal.

Under normal market conditions, the Fund will invest at least 80% of its net
assets in eligible securities issued by or on behalf of the states, territories
and possessions of the United States and the

S-2
<PAGE>
District of Columbia and their political subdivisions, agencies and
instrumentalities (collectively, "Municipal Securities"), the interest on which
is exempt from Federal income tax. The Fund will invest at least 80% of its
assets in Municipal Securities the interest on which is not treated as a
preference item for purposes of the federal alternative minimum tax. This
investment policy is a fundamental policy of the Fund. The Fund will purchase
municipal bonds, municipal notes, municipal lease obligations, tax-exempt money
market mutual funds, and tax-exempt commercial paper rated in the two highest
short-term rating categories by a nationally recognized statistical rating
organization (an "NRSRO") in accordance with Securities and Exchange Commission
("SEC") regulations at the time of investment or, if not rated, determined by
the Adviser to be or comparable quality.

The Adviser will not invest 25% or more of the Fund's assets in Municipal
Securities (a) whose issuers are located in the same state or (b) the interest
on which is derived from revenues of similar type projects. This restriction
does not apply to Municipal Securities in any of the following categories:
public housing authorities; general obligations of states and localities; state
and local housing finance authorities; or municipal utilities systems.

The Fund may purchase municipal obligations with demand features, including
variable and floating rate obligations. In addition, the Fund may invest in
commitments to purchase securities on a "when issued" basis and purchase
securities subject to a standby commitment.

The Fund may invest up to 20% of the Fund's net assets in the aggregate in
taxable money market instruments, taxable money market mutual funds, and
securities subject to the alternative minimum tax. Taxable money market
instruments in which the Fund may invest consist of (i) Municipal Securities;
(ii) bankers' acceptances, certificates of deposits, notes and time deposits of
highly-rated U.S. banks and U.S. branches of foreign banks; (iii) U.S. Treasury
obligations and obligations issued or guaranteed by the agencies and
instrumentalities of the U.S. Government, including STRIPS; (iv) high quality
commercial paper issued by U.S. and foreign corporations; (v) debt obligations
with a maturity of one year or less issued by corporations with outstanding
high-quality commercial paper; (vi) receipts (including TRs, TIGRs and CATs, as
defined below) and (vii) repurchase agreements involving any of the foregoing
obligations entered into with highly-rated banks and broker-dealers.

The Fund may engage in securities lending and may also borrow money in
amounts up to 33% of its net assets.

With respect to investments in U.S. treasury STRIPS, which are sold with
original issue discount and do not make periodic cash interest payments, the
Fund will be required to include as part of its current income the imputed
interest on such obligations even though the Fund has not received any interest
payments on such obligations during that period. Because the Fund distributes
all of its net investment income to its shareholders, the Fund may have to sell
portfolio securities to distribute such imputed income, which may occur at a
time when the Adviser would not have chosen to sell such securities and which
may result in a taxable gain or loss.

Investment income received directly by the Fund on direct U.S. Government
obligations is exempt from income tax at the state level when received directly
and may be exempt, depending on the state, when received by a shareholder as
income dividends provided certain state specific conditions are satisfied.
Interest received on repurchase agreements collateralized by direct U.S.
Government obligations normally is not exempt from state taxation. The Fund will
inform shareholders annually of the percentage of income and distributions
derived from direct U.S. Government obligations. Shareholders should consult
their tax advisers to determine whether any portion of the income dividends
received from the Fund is considered tax exempt in their particular states.

Opinions relating to the validity of municipal securities and to the
exemption of interest thereon from federal income tax are rendered by bond
counsel to the respective issuers at the time of issuance. Neither

S-3
<PAGE>
the Funds nor the Adviser will review the proceedings relating to the issuance
of municipal securities or the basis for such opinions.

EXPEDITION BOND FUND

The Bond Fund's investment objective is to provide current income.

The Fund invests primarily in bonds as well as other fixed income
securities. Under normal circumstances, the Fund will invest at least 65% of the
value of its total assets in bonds, which may include debentures and notes,
issued by U.S. and foreign companies as well as by U.S. and foreign governments
and supranational entities. All such instruments must be denominated in U.S.
dollars and must be rated "A" or better by one or more nationally recognized
statistical rating organization ("NRSRO") at the time of purchase. Under normal
circumstances, the Fund's average weighted maturity will be maintained at from 3
to 5 years. In the event that a security owned by the Fund is downgraded below
the stated rating categories, the Adviser will review and take appropriate
action with regard to the security. The Fund may invest any remaining assets in
a variety of fixed income securities, as further described below.

The Fund will not attempt to set or meet a portfolio turnover rate since any
turnover would be incidental to transactions undertaken in an attempt to achieve
the Fund's investment objective. The estimated annual rate of portfolio turnover
will not exceed 100%.

EXPEDITION EQUITY FUND

The Equity Fund's investment objective is to provide growth of capital, with
a secondary objective of income.

The Fund invests primarily (at least 80% of the value of its total assets)
in common stocks issued by mid-and large-capitalization companies. The Fund may
invest any remaining assets in warrants and rights to purchase common stocks,
preferred stocks convertible into common stock, non-convertible preferred
stocks, U.S. dollar denominated equity securities of foreign issuers listed on
national securities exchanges or actively traded in the over-the counter market,
and American Depositary Receipts ("ADRs"). The Fund also may purchase and sell
("write") put and call options (including options on indices) and may purchase
financial futures contracts and options thereon. The Fund also may purchase
bonds convertible into common stock and Standard & Poor's Depositary Receipts
("SPDRs").

DESCRIPTION OF PERMITTED INVESTMENTS

AMERICAN DEPOSITORY RECEIPTS ("ADRs")

ADRs are securities, typically issued by a U.S. financial institution (a
"depositary"), that evidence ownership interests in a security or a pool of
securities issued by a foreign issuer and deposited with the depositary. ADRs
include American Depositary Shares and New York Shares. Generally, ADRs are
designed for trading in the U.S. securities market. ADRs may be available for
investment through "sponsored" or "unsponsored" facilities. A sponsored facility
is established jointly by the issuer of the security underlying the receipt and
a depositary, whereas an unsponsored facility may be established by a depositary
without participation by the issuer of the receipt's underlying security. The
Equity Fund may invest in ADRs traded on registered exchanges or on NASDAQ and
may also invest in ADRs not traded on an established exchange. While the Fund
typically invests in sponsored ADRs, joint arrangements between the issuer and
the depositary, some ADRs may be unsponsored. Unlike sponsored ADRs, the holders
of unsponsored ADRs bear all expenses and the depositary may not be obligated to
distribute shareholder communications or to pass through the voting rights on
the deposited securities.

S-4
<PAGE>
ASSET-BACKED SECURITIES

Asset-backed securities are securities backed by non-mortgage assets such as
company receivables, truck and auto loans, leases and credit card receivables.
Other asset-backed securities may be created in the future. These securities may
be traded over-the-counter and typically have a short-intermediate maturity
structure depending on the paydown characteristics of the underlying financial
assets which are passed through to the security holder. These securities are
generally issued as pass-through certificates, which represent undivided
fractional ownership interests in the underlying pool of assets. Asset-backed
securities may also be debt obligations, which are known as collateralized
obligations and are generally issued as the debt of a special purpose entity,
such as a trust, organized solely for the purpose of owning these assets and
issuing debt obligations.

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

Asset-backed securities entail prepayment risk, which may vary depending on
the type of asset, but is generally less than the prepayment risk associated
with mortgage-backed securities. In addition, credit card receivables are
unsecured obligations of the card holder.

The market for asset-backed securities is at a relatively early stage of
development. Accordingly, there may be a limited secondary market for such
securities.

BANK OBLIGATIONS

Bank obligations are short-term obligations issued by U.S. and foreign
banks, including bankers' acceptances, certificates of deposit, custodial
receipts, and time deposits. Eurodollar and Yankee Bank Obligations are U.S.
dollar-denominated certificates of deposit or time deposits issued outside the
U.S. by foreign branches of U.S. banks or by foreign banks.

COMMON AND PREFERRED STOCKS

Common and preferred stocks represent units of ownership in a corporation.
Owners of common stock typically are entitled to vote on important matters.
Owners of preferred stock ordinarily do not have voting rights, but are entitled
to dividends at a specified rate. Preferred stock has a prior claim to common
stockholders with respect to dividends.

CREDIT ENHANCED SECURITIES

Funds typically evaluate the credit quality and ratings of credit-enhanced
securities based upon the financial condition and ratings of the party providing
the credit enhancement (the "credit enhancer"), rather than the issuer. However,
credit-enhanced securities will not be treated as having been issued by the
credit enhancer for diversification purposes, unless the Money Market Fund has
invested more than 10% of its assets in securities issued, guaranteed or
otherwise credit enhanced by the credit enhancer, in which case the securities
will be treated as having been issued by both the issuer and the credit
enhancer.

The Money Market Fund may have more than 25% of its total assets invested in
securities credit enhanced by banks.

S-5
<PAGE>
DEBT SECURITIES

Debt securities represent money borrowed that obligates the issuer (E.G., a
corporation, municipality, government, government agency) to repay the borrowed
amount at maturity (when the obligation is due and payable) and usually to pay
the holder interest at specific times (E.G., bonds, notes, debentures).

THE EURO

On January 1, 1999, the European Monetary Union (EMU) implemented a new
currency unit, the Euro. The countries initially converting or tieing their
currencies to the Euro include Austria, Belgium, France, Germany, Luxembourg,
the Netherlands, Ireland, Finland, Italy, Portugal, and Spain. Financial
transactions and market information, including share quotations and company
accounts, in participating countries are denominated in Euros. Approximately 46%
of the stock exchange capitalization of the total European market is now
reflected in Euros, and participating governments will issue their bonds in
Euros. Monetary policy for participating countries is now uniformly managed by a
new central bank, the European Central Bank (ECB).

Although it is not possible to predict the impact of the Euro conversion on
the Funds, the transition to the Euro may change the economic environment and
behavior of investors, particularly in European markets. For example, investors
may begin to view those countries participating in the EMU as a single entity,
and the Adviser may need to adapt investment strategies accordingly. The process
of implementing the Euro also may adversely affect financial markets worldwide
and may result in changes in the relative strength and value of the U.S. dollar
or other major currencies, as well as possible adverse tax consequences. The
transition to the Euro is likely to have a significant impact on fiscal and
monetary policy in the participating countries and may produce unpredictable
effects on trade and commerce generally. These resulting uncertainties could
create increased volatility in financial markets world-wide.

FOREIGN SECURITIES

Foreign securities include equity securities of foreign entities,
obligations of foreign branches of U.S. banks and of foreign banks, including,
without limitation, European Certificates of Deposit, European Time Deposits,
European Bankers' Acceptances, Canadian Time Deposits, Europaper and Yankee
Certificates of Deposit, and investments in Canadian Commercial Paper and
foreign securities. These instruments have investment risks that differ in some
respects from those related to investments in obligations of U.S. domestic
issuers. Such risks include future adverse political and economic developments,
the possible imposition of withholding taxes on interest or other income,
possible seizure, nationalization, or expropriation of foreign deposits, the
possible establishment of exchange controls or taxation at the source, greater
fluctuations in value due to changes in exchange rates, or the adoption of other
foreign governmental restrictions which might adversely affect the payment of
principal and interest on such obligations. Such investments may also entail
higher custodial fees and sales commissions than domestic investments. Foreign
issuers of securities or obligations are often subject to accounting treatment
and engage in business practices different from those respecting domestic
issuers of similar securities or obligations. Foreign branches of U.S. banks and
foreign banks may be subject to less stringent reserve requirements than those
applicable to domestic branches of U.S. banks.

FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS

Futures contracts provide for the future sale by one party and purchase by
another party of a specified amount of a specific security at a specified future
time and at a specified price. An option on a futures contract gives the
purchase the right, in exchange for a premium, to assume a position in a futures
contract at a specified exercise price during the term of the option.

A Fund may use futures contracts, and related options for bona fide hedging
purposes, to offset changes in the value of securities held or expected to be
acquired. They may also be used to minimize

S-6
<PAGE>
fluctuations in foreign currencies or to gain exposure to a particular market or
instrument. A Fund will minimize the risk that it will be unable to close out a
futures contract by only entering into futures contracts which are traded on
national futures exchanges and for which there appears to be a liquid secondary
market.

Index futures are futures contracts for various indices that are traded on
registered securities exchanges. An index futures contract obligates the seller
to deliver (and the purchaser to take) an amount of cash equal to a specific
dollar amount times the difference between the value of a specific index at the
close of the last trading day of the contract and the price at which the
agreement is made.

Although futures contracts by their terms call for actual delivery or
acceptance of the underlying securities, in most cases the contracts are closed
out before the settlement date without the making or taking of delivery. Closing
out an open futures position is done by taking an opposite position ("buying" a
contract which has previously been "sold" or "selling" a contract which has
previously been "purchased") in an identical contract to terminate the position.
Brokerage commissions are incurred when a futures contract is bought or sold.

Futures traders are required to make a good faith margin deposit in cash or
government securities with or for the account of a broker or custodian to
initiate and maintain open secondary market will exist for any particular
futures contract at any specific time. Thus, it may not be possible to close a
futures position. In the event of adverse price movements, a Fund would continue
to be required to make daily cash payments to maintain its required margin. In
such situations, if a Fund has insufficient cash, it may have to sell portfolio
securities to meet daily margin requirements at a time when it may be
disadvantageous to do so. In addition, the Funds may be required to make
delivery of the instruments underlying the futures contracts they hold. The
inability to close options and futures positions also could have an adverse
impact on the ability to effectively hedge the underlying securities.

The risk of loss in trading futures contracts can be substantial, due both
to the low margin deposits required and the extremely high degree of leverage
involved in futures pricing. As a result, a relatively small price movement in a
futures contract may result in immediate and substantial loss (or gain) to a
Fund. For example, if at the time of purchase, 10% of the value of the futures
contract is deposited as margin, a subsequent 10% decrease in the value of the
futures contract would result in a total loss of the margin deposit, before any
deduction for the transaction costs, if the account were then closed out. A 15%
decrease would result in a loss equal to 150% of the original margin deposit if
the contract were closed out. Thus, a purchase or sale of a futures contract may
result in losses in excess of the amount invested in the contract. However,
because the Funds will be engaged in futures transactions only for hedging
purposes, the Advisers do not believe that the Funds will generally be subject
to the risks of loss frequently associated with futures transactions. The Funds
presumably would have sustained comparable losses if, instead of the futures
contract, they had invested in the underlying financial instrument and sold it
after the decline. The risk of loss from the purchase of options is less as
compared with the purchase or sale of futures contracts because the maximum
amount at risk is the premium paid for the option.

Utilization of futures transactions by the Funds does involve the risk of
imperfect or no correlation where the securities underlying futures contracts
have different maturities than the fund securities being hedged. It is also
possible that the Funds could both lose money on futures contracts and
experience a decline in value of its fund securities. There is also the risk of
loss by the Funds of margin deposits in the event of the bankruptcy of a broker
with whom the Funds have an open position in a futures contract or related
option.

Most futures exchanges limit the amount of fluctuation permitted in futures
contract prices during a single trading day. The daily limit establishes the
maximum amount that the price of a futures contract may vary either up or down
from the previous day's settlement price at the end of a trading session. Once
the daily limit has been reached in a particular type of contract, no trades may
be made on that day at a price beyond that limit. The daily limit governs only
price movement during a particular trading day and

S-7
<PAGE>
therefore does not limit potential losses because the limit may prevent the
liquidation of unfavorable positions. Futures contract prices have occasionally
moved to the daily limit for several consecutive trading days with little or no
trading, thereby preventing prompt liquidation of future positions and
subjecting some futures traders to substantial losses.

INVESTMENT COMPANY SHARES

The Funds may purchase shares of other mutual funds to the extent consistent
with applicable law. Investment companies typically incur fees that are separate
from those fees incurred directly by the Funds. A Fund's purchase of such
investment company securities results in the layering of expenses, such that you
would indirectly bear a proportionate share of investment company operating
expenses, such as advisory fees.

LENDING OF PORTFOLIO SECURITIES

The collateral received when a Fund lends portfolio securities must be
valued daily and, should the market value of the loaned securities increase, the
borrower must furnish additional collateral to the Fund. During the time
portfolio securities are on loan, the borrower pays the Fund any dividends or
interest paid on such securities. Loans are subject to termination at the option
of the Fund or the borrower. The Funds may pay reasonable administrative and
custodial fees in connection with a loan and may pay a negotiated portion of the
interest earned on the cash or equivalent collateral to the borrower or placing
broker.

MUNICIPAL SECURITIES

MUNICIPAL SECURITIES--The two principal classifications of Municipal
Securities are "general obligation" and "revenue" issues. General obligation
issues are issues involving the credit of an issuer possessing taxing power and
are payable from the issuer's general unrestricted revenues, although the
characteristics and method of enforcement of general obligation issues may vary
according to the law applicable to the particular issuer. Revenue issues are
payable only from the revenues derived from a particular facility or class of
facilities or other specific revenue source. Municipal Securities include debt
obligations issued by governmental entities to obtain funds for various public
purposes, such as the construction of a wide range of public facilities, the
refunding of outstanding obligations, the payment of general operating expenses,
and the extension of loans to other public institutions and facilities. Certain
private activity bonds that are issued by or on behalf of public authorities to
finance various privately-owned or operated facilities are included within the
term "Municipal Securities." Private activity bonds and industrial development
bonds are generally revenue bonds, the credit and quality of which are directly
related to the credit of the private user of the facilities.

Municipal Securities may also include general obligation notes, tax
anticipation notes, bond anticipation notes, revenue anticipation notes, project
notes, certificates of indebtedness, demand notes, tax-exempt commercial paper,
construction loan notes and other forms of short-term, tax-exempt loans. Such
instruments are issued with a short-term maturity in anticipation of the receipt
of tax funds, the proceeds of bond placements or other revenues. Project notes
are issued by a state or local housing agency and are sold by the Department of
Housing and Urban Development. While the issuing agency has the primary
obligation with respect to its project notes, they are also secured by the full
faith and credit of the United States through agreements with the issuing
authority which provide that, if required, the Federal government will lend the
issuer an amount equal to the principal of and interest on the project notes.

The quality of Municipal Securities, both within a particular classification
and between classifications, will vary, and the yields on Municipal Securities
depend upon a variety of factors, including general money market conditions, the
financial condition of the issuer (or other entity whose financial resources are
supporting the securities), general conditions of the municipal bond market, the
size of a particular offering, the maturity of the obligation and the rating(s)
of the issue. In this regard, it should be

S-8
<PAGE>
emphasized that the ratings of any NRSRO are general and are not absolute
standards of quality. Municipal Securities with the same maturity, interest rate
and rating(s) may have different yields, while Municipal Securities of the same
maturity and interest rate with different rating(s) may have the same yield.

An issuer's obligations under its Municipal Securities are subject to the
provisions of bankruptcy, insolvency, and other laws affecting the rights and
remedies of creditors, such as the Federal Bankruptcy Code, and laws, if any,
which may be enacted by Congress or state legislatures extending the time for
payment of principal or interest, or both, or imposing other constraints upon
the enforcement of such obligations or upon the ability of municipalities to
levy taxes. The power or ability of an issuer to meet its obligations for the
payment of interest on and principal of its Municipal Securities may be
materially adversely affected by litigation or other conditions.

MUNICIPAL LEASES--A Fund may invest in instruments, or participations in
instruments, issued in connection with lease obligations or installment purchase
contract obligations of municipalities ("municipal lease obligations"). Although
municipal lease obligations do not constitute general obligations of the issuing
municipality, a lease obligation is ordinarily backed by the municipality's
covenant to budget for, appropriate funds for, and make the payments due under
the lease obligation. However, certain lease obligations contain
"non-appropriation" clauses, which provide that the municipality has no
obligation to make lease or installment purchase payments in future years unless
money is appropriated for such purpose in the relevant years. Municipal lease
obligations are a relatively new form of financing, and the market for such
obligations is still developing. Municipal leases will be treated as liquid only
if they satisfy criteria set forth in guidelines established by the Board of
Trustees, and there can be no assurance that a market will exist or continue to
exist for any municipal lease obligation. The guidelines indicate that (a) the
Adviser shall consider and evaluate such factors as it deems appropriate to
determine that the securities to be purchased are liquid, including, but not
limited to the following factors: (i) the frequency of trades and market
quotations for the securities; (ii) the number of dealers willing and ready to
purchase and sell the securities; (iii) the number of potential purchasers for
the securities; (iv) whether any dealers have agreed to make a market in the
securities; (v) the nature of the securities and the nature of marketplace
trades, including the time needed to dispose of the security, the method of
soliciting offers, and the mechanics of transfer; (vi) whether the lease can be
canceled; (vii) what assurances, if any, exist that the assets represented by
the lease can be sold; (viii) the strength of the lessee's general credit; (ix)
the likelihood that the municipality will discontinue appropriating funding for
the leased property because the property is no longer deemed essential to the
operation of the municipality; and (x) the legal recourse in the event of
failure to appropriate.

PUTS ON MUNICIPAL SECURITIES--A Fund may acquire "puts" with respect to its
acquisition of Municipal Securities. A put is a right to sell a specified
security (or securities) within a specified period of time at a specified
exercise price. A Fund may sell, transfer, or assign the put only in conjunction
with the sale, transfer, or assignment of the underlying security or securities.

The amount payable upon the exercise of a put is normally (i) a Fund's
acquisition cost of the Municipal Securities (excluding any accrued interest
which the Fund paid on the acquisition), less any amortized market premium or
plus any amortized market or original issue discount during the period the Fund
owned the securities, plus (ii) all interest accrued on the securities since the
last interest payment date during that period.

Puts on Municipal Securities may be acquired to facilitate the liquidity of
portfolio assets and the reinvestment of assets at a rate of return more
favorable than that of the underlying security. A Fund will generally acquire
puts only where the puts are available without the payment of any direct or
indirect consideration. However, if necessary or advisable, the Fund may pay for
puts either separately in cash or by paying a higher price for portfolio
securities which are acquired subject to the puts (thus reducing the yield to
maturity otherwise available for the same securities).

S-9
<PAGE>
TAXABLE MUNICIPAL SECURITIES--The Tax-Free Money Market Fund may invest up
to 20% of its net assets in taxable securities, including Municipal Securities,
such as certain private activity or industrial revenue bonds, the interest on
which is not tax-exempt for Federal income tax purposes but which otherwise meet
the Fund's investment criteria.

OTHER INVESTMENTS

The Funds are not prohibited from investing in bank obligations issued by
clients of SEI Investments Company ("SEI Investments"), the parent company of
the Administrator and the Distributor. The purchase of Fund shares by these
banks or their customers will not be a consideration in deciding which bank
obligations the Funds will purchase. The Funds will not purchase obligations
issued by the Adviser or its affiliates.

PRIVATELY ISSUED MORTGAGE-RELATED SECURITIES

Privately issued mortgage-related securities generally represent an
ownership interest in federal agency mortgage pass through securities such as
those issued by Government National Mortgage Association. The terms and
characteristics of the mortgage instruments may vary among pass through mortgage
loan pools.

RATINGS

A nationally recognized statistical rating organizations' ("NRSROs") highest
rating category is determined without regard for subcategories and gradations.
For example, securities rated A-1 or A-1+ by Standard & Poor's Ratings Group
("S&P"), Prime-1 by Moody's Investors Service, Inc. ("Moody's"), or F-1 (+ or -)
by Fitch Investors Service, Inc. ("Fitch") are all considered rated in the
highest short-term rating category. The Money Market Funds will follow
applicable regulations in determining whether a security rated by more than one
NRSRO can be treated as being in the highest short-term rating category;
currently, unless a security is rated by only one NRSRO, such securities must be
rated by two NRSROs in their highest rating category. See "Regulatory
Compliance."

REPURCHASE AGREEMENTS

Repurchase agreements are agreements by which a person (E.G., a Fund)
obtains a security and simultaneously commits to return the security to the
seller (a primary securities dealer as recognized by the Federal Reserve Bank of
New York or a national member bank as defined in Section 3(d)(1) of the Federal
Deposit Insurance Act, as amended) at an agreed upon price (including principal
and interest) on an agreed upon date within a number of days (usually not more
than seven) from the date of purchase. The resale price reflects the purchase
price plus an agreed upon market rate of interest which is unrelated to the
coupon rate or maturity of the underlying security. A repurchase agreement
involves the obligation of the seller to pay the agreed upon price, which
obligation is, in effect, secured by the value of the underlying security.

Repurchase agreements are considered to be loans by a Fund for purposes of
its investment limitations. The repurchase agreements entered into by a Fund
will provide that the underlying security at all times shall have a value at
least equal to 102% of the resale price stated in the agreement (the Advisers
and Sub-Adviser monitor compliance with this requirement). Under all repurchase
agreements entered into by a Fund, the appropriate Custodian or its agent must
take possession of the underlying collateral. However, if the seller defaults, a
Fund could realize a loss on the sale of the underlying security to the extent
that the proceeds of the sale including accrued interest are less than the
resale price provided in the agreement including interest. In addition, even
though the Bankruptcy Code provides protection for most repurchase agreements,
if the seller should be involved in bankruptcy or insolvency proceedings, a Fund
may incur delay and costs in selling the underlying security or may suffer a
loss of principal and interest if

S-10
<PAGE>
the Fund is treated as an unsecured creditor and required to return the
underlying security to the seller's estate.

RESTRICTED SECURITIES

Restricted securities are securities that may not be sold to the public
without registration under the Securities Act of 1933 (the "1933 Act") or an
exemption from registration. Permitted investments for the Funds include
restricted securities, and each such Fund may invest up to 15% of its net assets
(10% for the Money Market Funds) in illiquid securities, subject to each Fund's
investment limitations on the purchase of illiquid securities. Restricted
securities, including securities eligible for re-sale under 1933 Act Rule 144A,
that are determined to be liquid are not subject to this limitation. This
determination is to be made by the Funds' Adviser pursuant to guidelines adopted
by the Board of Trustees. Under these guidelines, the Adviser will consider the
frequency of trades and quotes for the security, the number of dealers in, and
potential purchasers for, the securities, dealer undertakings to make a market
in the security, and the nature of the security and of the marketplace trades.
In purchasing such Restricted Securities, the Adviser intends to purchase
securities that are exempt from registration under Rule 144A under the 1933 Act.

REVERSE REPURCHASE AGREEMENTS

Reverse repurchase agreements are similar to borrowing cash. In a reverse
repurchase agreement a Fund transfers possession of a portfolio instrument to
another person, such as a financial institution, broker or dealer, in return for
a percentage of the instrument's market value in cash, and agrees that on a
stipulated date in the future the Fund will repurchase the portfolio instrument
by remitting the original consideration plus interest at an agreed upon rate.

The use of reverse repurchase agreements may enable a Fund to avoid selling
portfolio instruments at a time when a sale may be deemed to be disadvantageous,
but the ability to enter into reverse repurchase agreements does not ensure that
a Fund will be able to avoid selling portfolio instruments at a disadvantageous
time.

When effecting reverse repurchase agreements, liquid assets of a Fund, in a
dollar amount sufficient to make payment for the obligations to be purchased,
are segregated at the trade date. These assets are marked to market daily and
maintained until the transaction is settled.

During the period any reverse repurchase agreements are outstanding, but
only to the extent necessary to assure completion of the reverse repurchase
agreements, the Money Market Fund will restrict the purchase of portfolio
instruments to money market instruments maturing on or before the expiration
date of the reverse repurchase agreement.

SECURITIES LENDING

Each Fund may lend securities pursuant to agreements which require that the
loans be continuously secured by collateral at all times equal to 100% of the
market value of the loaned securities which consists of: cash, securities of the
U.S. Government or its agencies, or any combination of cash and such securities.
Such loans will not be made if, as a result, the aggregate amount of all
outstanding securities loans for a Fund exceed one-third of the value of the
Fund's total assets taken at fair market value. A Fund will continue to receive
interest on the securities lent while simultaneously earning interest on the
investment of the cash collateral in U.S. Government securities. However, a Fund
will normally pay lending fees to such broker-dealers and related expenses from
the interest earned on invested collateral. There may be risks of delay in
receiving additional collateral or risks of delay in recovery of the securities
or even loss of rights in the collateral should the borrower of the securities
fail financially. However, loans are made only to borrowers deemed by the
Adviser to be of good standing and when, in the judgment of the Adviser, the
consideration which can be earned currently from such securities loans justifies
the attendant risk. Any

S-11
<PAGE>

loan may be terminated by either party upon reasonable notice to the other
party. The Funds may use the Distributor or a broker-dealer affiliate of the
Adviser and Sub-Adviser as a broker in these transactions.

STANDARD & POOR'S DEPOSITARY RECEIPTS ("SPDRs")

SPDRs are securities that represent ownership in a unit investment trust (a
"UIT") that holds a portfolio of common stocks designed to track the performance
of the Standard & Poor's 500 Composite Stock Price Index (the "S&P Index").
SPDRs may be obtained from the UIT directly or purchased in the secondary
market. SPDRs are generally listed on the American Stock Exchange.

The UIT will issue SPDRs in aggregations of 50,000 known as "Creation Units"
in exchange for a "Portfolio Deposit" consisting of (a) a portfolio of
securities substantially similar to the component securities ("Index
Securities") of the S&P Index, (b) a cash payment equal to a pro rata portion of
the dividends accrued on the UIT's portfolio securities since the last dividend
payment by the UIT, net of expenses and liabilities, and (c) a cash payment or
credit ("Balancing Amount") designed to equalize the net asset value of the S&P
Index and the net asset value of a Portfolio Deposit.

SPDRs are not individually redeemable, except upon termination of the UIT.
To redeem, the Fund must accumulate enough SPDRs to reconstitute a Creation
Unit. The liquidity of small holdings of SPDRs, therefore, will depend upon the
existence of a secondary market. Upon redemption of a Creation Unit, the Fund
will receive Index Securities and cash identical to the Portfolio Deposit
required of an investor wishing to purchase a Creation Unit that day.

The price of SPDRs is derived and based upon the securities held by the UIT.
Accordingly, the level of risk involved in the purchase or sale of a SPDR is
similar to the risk involved in the purchase or sale of traditional common
stock, with the exception that the pricing mechanism for SPDRs is based on a
basket of stocks. Disruptions in the markets for the securities underlying SPDRs
purchased or sold by the Fund could result in losses on SPDRs. Trading in SPDRs
involves risks similar to those risks, described above under "Options," involved
in the writing of options on securities.

STRIPS

Separately Traded Interest and Principal Securities ("STRIPS") are component
parts of U.S. Treasury Securities traded through the Federal Book-Entry System.
An Advisor will only purchase STRIPS that it determines are liquid or, if
illiquid, do not violate the affected Fund's investment policy concerning
investments in illiquid securities. Consistent with Rule 2a-7 under the
Investment Company Act of 1940, as amended, (the "1940 Act"), the Money Market
Funds' Adviser will only purchase STRIPS for Money Market Funds that have a
remaining maturity of 397 days or less; therefore, the Money Market Funds
currently may only purchase interest component parts of U.S. Treasury
securities. While there is no limitation on the percentage of a Fund's assets
that may be comprised of STRIPS, the Money Market Funds' Adviser will monitor
the level of such holdings to avoid the risk of impairing shareholders'
redemption rights and of deviations in the value of shares of the Money Market
Funds.

U.S. GOVERNMENT OBLIGATIONS

The types of U.S. Government obligations in which the Funds may invest
generally include direct obligations of the U.S. Treasury (such as U.S. Treasury
bills, notes, and bonds) and obligations issued or guaranteed by U.S. Government
agencies or instrumentalities. These securities are backed by:

- the full faith and credit of the U.S. Treasury;

- the issuer's right to borrow from the U.S. Treasury;

- the discretionary authority of the U.S. government to purchase certain
obligations of agencies or instrumentalities; or

S-12
<PAGE>
- the credit of the agency or instrumentality issuing the obligations.

Examples of agencies and instrumentalities which may not always receive
financial support from the U.S. government are:

- Farm Credit Banks;

- National Bank for Cooperatives;

- Federal Home Loan Banks;

- Farmers Home Administration; and

- Fannie Mae.

VARIABLE AND FLOATING RATE SECURITIES

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

WARRANTS

Warrants give holders the right, but not the obligation, to buy shares of a
company at a given price, usually higher than the market price, during a
specified period.

WHEN-ISSUED SECURITIES

The Funds may purchase debt obligations on a when-issued basis, in which
case delivery and payment normally take place on a future date. The Funds will
make commitments to purchase obligations on a when-issued basis only with the
intention of actually acquiring the securities, but may sell them before the
settlement date. During the period prior to the settlement date, the securities
are subject to market fluctuation, and no interest accrues on the securities to
the purchaser. The payment obligation and the interest rate that will be
received on the securities at settlement are each fixed at the time the
purchaser enters into the commitment. Purchasing obligations on a when-issued
basis may be used as a form of leveraging because the purchaser may accept the
market risk prior to payment for the securities. The Funds, however, will not
use such purchases for leveraging; instead, as disclosed in the Prospectus, the
Funds will set aside assets to cover its commitments. If the value of these
assets declines, the Funds will place additional liquid assets aside on a daily
basis so that the value of the assets set aside is equal to the amount of the
commitment.

WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS

These transactions are made to secure what is considered to be an
advantageous price or yield for a Fund. No fees or other expenses, other than
normal transaction costs, are incurred. However, liquid assets of the
appropriate Fund sufficient to make payment for the securities to be purchased
are segregated on the Fund's records at the trade date. These assets are marked
to market daily and are maintained until the transaction has been settled. Each
Fund does not intend to engage in when-issued and delayed delivery transactions
to an extent that would cause the segregation of more than 20% of the total
value of its assets.

S-13
<PAGE>
INVESTMENT LIMITATIONS

MONEY MARKET FUND

FUNDAMENTAL LIMITATIONS

The Money Market Fund is subject to a number of fundamental investment
restrictions that may be changed only by a vote of a majority of the outstanding
shares of the Fund. A "majority of the outstanding shares" of the Trust or the
Fund means the affirmative vote, at a meeting of shareholders duly called, of
the lesser of (a) 67% or more of the votes of shareholders of the Trust or the
Fund present at a meeting at which the holders of more than 50% of the votes
attributable to shareholders of record of the Trust or the Fund are represented
in person or by proxy, or (b) the holders of more than 50% of the outstanding
votes of shareholders of the Trust or the Fund.

SELLING SHORT AND BUYING ON MARGIN

The Money Market Fund will not sell any securities short or purchase any
securities on margin but may obtain such short-term credits as may be necessary
for clearance of transactions.

ISSUING SENIOR SECURITIES AND BORROWING MONEY

The Money Market Fund will not issue senior securities except that the Fund
may borrow money directly or through reverse repurchase agreements in amounts up
to one-third of the value of its total assets including the amounts borrowed.
The Fund will not borrow money or engage in reverse repurchase agreements for
investment leverage, but rather as a temporary, extraordinary, or emergency
measure or to facilitate management of the portfolio by enabling the Fund to
meet redemption requests when the liquidation of portfolio securities is deemed
to be inconvenient or disadvantageous. The Fund will not purchase any securities
while borrowings in excess of 5% of the value of its total assets are
outstanding. During the period any reverse repurchase agreements are
outstanding, the Fund will restrict the purchase of portfolio instruments to
money market instruments maturing on or before the expiration date of the
reverse repurchase agreements, but only to the extent necessary to assure
completion of the reverse repurchase agreements.

PLEDGING ASSETS

The Money Market Fund will not mortgage, pledge, or hypothecate any assets
except to secure permitted borrowings. In those cases, it may pledge assets
having a value not exceeding the lesser of the dollar amounts borrowed or 15% of
the value of total assets of the Fund at the time of the pledge.

CONCENTRATION OF INVESTMENTS

The Money Market Fund will not invest 25% or more of the value of its total
assets in any one industry except that the Fund will invest 25% of the value of
its total assets in the commercial paper issued by finance companies.

The Fund may invest more than 25% of the value of its total assets in cash
or cash items, securities issued or guaranteed by the U.S. Government, its
agencies, or instrumentalities, or instruments secured by these money market
instruments, such as repurchase agreements.

INVESTING IN COMMODITIES AND REAL ESTATE

The Money Market Fund will not purchase or sell commodities, commodity
contracts, or commodity futures contracts. The Fund will not purchase or sell
real estate, although it may invest in securities of issuers whose business
involves the purchase or sale of real estate or in securities which are secured
by real estate or interests in real estate.

S-14
<PAGE>
INVESTING IN RESTRICTED SECURITIES

The Money Market Fund will not invest more than 10% of the value of its net
assets in securities which are subject to legal or contractual restrictions on
resale, except for commercial paper issued under Section 4(2) of the Securities
Act of 1933.

UNDERWRITING

The Money Market Fund will not underwrite any issue of securities, except as
it may be deemed to be an underwriter under the Securities Act of 1933 in
connection with the sale of securities in accordance with its investment
objective, policies, and limitations.

LENDING CASH OR SECURITIES

The Money Market Fund will not lend any of its assets, except portfolio
securities. This shall not prevent the Fund from purchasing or holding bonds,
debentures, notes, certificates of indebtedness, or other debt securities,
entering into repurchase agreements or engaging in other transactions where
permitted by the Fund's investment objective, policies, limitations or
Declaration of Trust.

DIVERSIFICATION OF INVESTMENTS

With respect to 75% of the value of its total assets, the Money Market Fund
will not purchase securities issued by any one issuer (other than cash, cash
items or securities issued or guaranteed by the government of the United States
or its agencies or instrumentalities and repurchase agreements collateralized by
such securities) if as a result more than 5% of the value of its total assets
would be invested in the securities of that issuer.

NON-FUNDAMENTAL LIMITATIONS

The following limitations may be changed by the Trustees without shareholder
approval. Shareholders will be notified before any material change in these
limitations becomes effective.

INVESTING IN ILLIQUID SECURITIES

The Money Market Fund will not invest more than 10% of the value of its net
assets in illiquid securities, including repurchase agreements providing for
settlement in more than seven days after notice, non-negotiable time deposits
with maturities over seven days, and certain restricted securities not
determined by the Trustees to be liquid.

Except with respect to borrowing money, if a percentage limitation is
adhered to at the time of investment, a later increase or decrease in percentage
resulting from any change in value or net assets will not result in a violation
of such restriction.

The Money Market Fund does not expect to borrow money, pledge securities,
invest in illiquid securities, restricted securities or engage in when-issued
and delayed delivery transactions, or reverse repurchase agreements in excess of
5% of the value of its net assets during the coming fiscal year.

For purposes of its policies and limitations, the Money Market Fund
considers certificates of deposit and demand and time deposits issued by a U.S.
branch of a domestic bank or savings and loan having capital, surplus, and
undivided profits in excess of $100,000,000 at the time of investment to be
"cash items." For purposes of the Money Market Fund's limitation on industry
concentration, "finance companies" are limited to U.S. banks and U.S. branches
of foreign banks.

S-15
<PAGE>
THE TAX-FREE MONEY MARKET FUND

FUNDAMENTAL LIMITATIONS

The Tax-Free Money Market Fund is subject to a number of fundamental
investment restrictions that may be changed only by a vote of a majority of the
outstanding shares of the Fund. A "majority of the outstanding shares" of the
Trust or the Fund means the affirmative vote, at a meeting of shareholders duly
called, of the lesser of (a) 67% or more of the votes of shareholders of the
Trust or the Fund present at a meeting at which the holders of more than 50% of
the votes attributable to shareholders of record of the Trust or the Fund are
represented in person or by proxy, or (b) the holders of more than 50% of the
outstanding votes of shareholders of the Trust or the Fund.

Pursuant to these investment restrictions, the Tax-Free Money Market Fund
will not:

1. Purchase securities of any one issuer, other than obligations issued or
guaranteed by the U.S. Government or its agencies and instrumentalities and
repurchase agreements involving such securities, if, immediately after such
purchase, more than 5% of the value of its total assets would be invested in
any one issuer, or more than 10% of the outstanding voting securities of
such issuer; PROVIDED that the Fund may invest up to 25% of its total assets
without regard to this restriction only as permitted by applicable laws and
regulations. For purposes of this limitation, a security is considered to be
issued by the government entity (or entities) whose assets and revenues back
the security; with respect to a private activity bond that is backed only by
the assets and revenues of a non-governmental user, a security is considered
to be issued by such non-governmental user. For purposes of this limitation,
all debt securities are each considered as one class.

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

3. Borrow money except for temporary or emergency purposes and then only in an
amount not exceeding one-third of the value of total assets. Any borrowing
will be done from a bank and to the extent that such borrowing exceeds 5% of
the value of the Fund's assets, asset coverage of at least 300% is required.
In the event that such asset coverage shall at any time fall below 300%, the
Fund shall, within three days thereafter or such longer period as the
Securities and Exchange Commission may prescribe by rules and regulations,
reduce the amount of its borrowings to such an extent that the asset
coverage of such borrowings shall be at least 300%. This borrowing provision
is included solely to facilitate the orderly sale of portfolio securities to
accommodate heavy redemption requests if they should occur and is not for
investment purposes. All borrowings will be repaid before making additional
investments and any interest paid on such borrowings will reduce income.

4. Pledge, mortgage or hypothecate assets except to secure temporary borrowings
permitted by (3) above in aggregate amounts not to exceed 15% of total
assets taken at current value at the time of the incurrence of such loan,
except as permitted with respect to securities lending.

5. Purchase or sell real estate, real estate limited partnership interests,
commodities or commodities contracts and interests in a pool of securities
that are secured by interests in real estate. However, subject to their
permitted investments, the Fund may invest in companies which invest in real
estate commodities or commodities contracts.

6. Make short sales of securities, maintain a short position or purchase
securities on margin, except that the Fund may obtain short-term credits as
necessary for the clearance of security transactions; this limitation shall
not prohibit short sales "against the box."

7. Act as an underwriter of securities of other issuers except as it may be
deemed an underwriter under Federal securities laws in selling the Fund
security.

8. Purchase securities of other investment companies except as permitted by the
1940 Act, and the rules and regulations thereunder.

S-16
<PAGE>
9. Issue senior securities (as defined in the 1940 Act) except in connection
with permitted borrowings as described above or as permitted by rule,
regulation or order of the Securities and Exchange Commission.

10. Make loans except that the Fund may (i) purchase or hold debt instruments in
accordance with its investment objective and policies; (ii) enter into
repurchase agreements; and (iii) engage in securities lending as described
in the Prospectus and this Statement of Additional Information.

The Fund has no present intention to sell securities short "against the
box."

NON-FUNDAMENTAL POLICIES

The Fund may not invest in illiquid securities in an amount exceeding, in
the aggregate, 10% of its net assets.

The Fund may not invest in interests in oil, gas or other mineral
exploration or development programs or oil, gas or mineral leases.

With the exception of the limitations that apply to illiquid securities, the
foregoing percentages will apply at the time of the purchase of a security and
shall not be considered violated unless an excess occurs or exists immediately
after and as a result of a purchase of such security.

THE NON-MONEY MARKET FUNDS

FUNDAMENTAL LIMITATIONS

The following are fundamental limitations of the Equity and Bond Funds.
Fundamental investment limitations cannot be changed without shareholder
approval.

DIVERSIFICATION OF INVESTMENTS

With respect to 75% of the value of each Fund's total assets, the Fund will
not purchase securities of any one issuer (other than cash, cash items and
securities issued or guaranteed by the government of the United States or its
agencies or instrumentalities) if as a result more than 5% of the value of its
total assets would be invested in the securities of that issuer.

Under this limitation, as it relates to the Bond Fund, each governmental
subdivision, including states and the District of Columbia, territories,
possessions of the United States, or their political subdivisions, agencies,
authorities, instrumentalities, or similar entities, will be considered a
separate issuer if its assets and revenues are separate from those of the
governmental body creating it and the security is backed only by its own assets
and revenues.

BUYING ON MARGIN

A Fund will not purchase any securities on margin, but may obtain such
short-term credits as are necessary for clearance of transactions. The deposit
or payment by a Fund of initial or variation margin in connection with financial
futures contracts or related options transactions is not considered the purchase
of a security on margin.

ISSUING SENIOR SECURITIES AND BORROWING MONEY

A Fund will not issue senior securities except that the Fund may borrow
money and the Bond Fund may engage in reverse repurchase agreements in amounts
up to one-third of the value of its net assets, including the amounts borrowed.

A Fund will not borrow money or, with respect to the Bond Fund, engage in
reverse repurchase agreements for investment leverage, but rather as a
temporary, extraordinary, or emergency measure or to

S-17
<PAGE>
facilitate management of the portfolio by enabling a Fund to meet redemption
requests when the liquidation of portfolio securities is deemed to be
inconvenient or disadvantageous. The Fund will not purchase any securities while
borrowings in excess of 5% of its total assets are outstanding. During the
period any reverse repurchase agreements are outstanding, but only to the extent
necessary to assure completion of the reverse repurchase agreements, the Bond
Fund will restrict the purchase of portfolio instruments to money market
instruments maturing on or before the expiration date of the reverse repurchase
agreements.

PLEDGING ASSETS

A Fund will not mortgage, pledge, or hypothecate any assets except to secure
permitted borrowings. In these cases, it may pledge assets having a market value
not exceeding the lesser of the dollar amounts borrowed or 10% of the value of
total assets at the time of the borrowing. Neither the deposit of underlying
securities and other assets in escrow in connection with the writing of put or
call options on securities nor margin deposits for the purchase and sale of
financial futures contracts and related options are deemed to be a pledge.

INVESTING IN REAL ESTATE

A Fund will not buy or sell real estate including limited partnership
interests, although it may invest in securities of companies whose business
involves the purchase or sale of real estate or in securities which are secured
by real estate or interests in real estate.

INVESTING IN COMMODITIES

A Fund will not purchase or sell commodities, except that the Fund may
purchase and sell financial futures contracts and related options.

UNDERWRITING

A Fund will not underwrite any issue of securities, except as it may be
deemed to be an underwriter under the Securities Act of 1933, as amended, in
connection with the sale of securities in accordance with its investment
objective, policies, and limitations.

LENDING CASH OR SECURITIES

A Fund will not lend any of its assets except portfolio securities up to
one-third of the value of its total assets. (This shall not prevent the purchase
or holding of U.S. Government securities, repurchase agreements covering U.S.
Government securities, or other transactions which are permitted by the Fund's
investment objective and policies.)

SELLING SHORT

A Fund will not sell securities short.

NON-FUNDAMENTAL LIMITATIONS

The following limitations may be changed by the Trustees without shareholder
approval. Shareholders will be notified before any material change in these
limitations becomes effective.

INVESTING IN ILLIQUID SECURITIES

A Fund will not invest more than 15% of the value of its net assets in
securities which are not readily marketable or which are otherwise considered
illiquid, including over-the-counter options and also including repurchase
agreements providing for settlement in more than seven days after notice.

S-18
<PAGE>
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES

A Fund will limit its respective investment in other investment companies to
no more than 3% of the total outstanding voting stock of any investment company,
invest no more than 5% of total assets in any one investment company, or invest
more than 10% of total assets in investment companies in general. The Fund will
purchase securities of closed-end investment companies only in open market
transactions involving only customary broker's commissions. However, these
limitations are not applicable if the securities are acquired in a merger,
consolidation, reorganization, or acquisition of assets. It should be noted that
investment companies incur certain expenses such as management fees, and
therefore any investment by a Fund in shares of another investment company would
be subject to such customary expenses.

The Trust and the Adviser have received an exemptive order from the
Securities and Exchange Commission, which allows the Bond and Equity Funds to
invest in shares of the Trust's Money Market Funds. Should a Fund invest in
shares of the Trust's money market funds, the Trust's Board of Trustees will
determine to what extent, if any, that the Adviser's advisory fees should be
adjusted to reflect the impact of such investments.

WRITING COVERED PUT AND CALL OPTIONS AND PURCHASING PUT OPTIONS

A Fund will not write call options on securities unless the securities are
held in the Fund's portfolio or unless the Fund is entitled to them in
deliverable form without further payment or after segregating cash in the amount
of any further payment. When writing put options, the Fund will segregate cash
or U.S. Treasury obligations with a value equal to or greater than the exercise
price of the underlying securities. The Fund will not write put or call options
or purchase put or call options in excess of 5% of the value of its total
assets.

For purposes of its policies and limitations, the Bond Fund considers
certificates of deposit and demand and time deposits issued by a U.S. branch of
a domestic bank or savings association having capital, surplus, and undivided
profits in excess of $100,000,000 at the time of investment to be "cash items."

REGULATORY COMPLIANCE

The Money Market Fund and the Tax-Free Money Market Fund may follow
non-fundamental operational policies that are more restrictive than their
fundamental investment limitations, as set forth in the prospectus' for each
fund and this Statement of Additional Information, in order to comply with
applicable laws and regulations, including the provisions of and regulations
under the Investment Company Act of 1940. In particular, the Funds will comply
with the various requirements of Rule 2a-7, which regulates money market mutual
funds. For example, with limited exceptions, Rule 2a-7 prohibits the investment
of more than 5% of the Funds' total assets in the securities of any one issuer,
although the Funds' investment limitation only requires such 5% diversification
with respect to 75% of its assets. The Funds will invest more than 5% of its
assets in any one issuer only under the circumstances permitted by Rule 2a-7.
The Funds will also determine the effective maturity of its investments, as well
as its ability to consider a security as having received the requisite
short-term ratings by NRSROs according to Rule 2a-7. The Funds may change these
operational policies to reflect changes in the laws and regulations without the
approval of their shareholders.

S-19
<PAGE>
INVESTMENT ADVISER

The Adviser, an Alabama state banking corporation, is a wholly-owned
subsidiary of Compass Bancshares, Inc. ("Bancshares"), a bank holding company
organized under the laws of Delaware. Through its subsidiaries and affiliates,
Bancshares, the 48th largest bank holding company in the United States in terms
of total assets as of December 31, 1997, offers a full range of financial
services to the public including commercial lending, depository services, cash
management, brokerage services, retain banking, credit card services, investment
advisory services and trust services.

As of December 31, 1998, Compass Bank offered a broad range of commercial
banking services. The Adviser has served as investment adviser to mutual funds
since February 5, 1990. Through the Compass Asset Management Group, the Adviser
provides investment advisory and management services for the assets of
individuals, pension and profit sharing plans, endowments and foundations. As of
December 31, 1998, the Compass Asset Management Group had approximately $7.8
billion under administration ($2.6 billion of which was comprised of assets of
accounts over which the Adviser exercised discretion).

As part of its regular banking operations, the Adviser may make loans to
public companies. Thus, it may be possible, from time to time, for the Fund to
hold or acquire the securities of issuers which are also lending clients of the
Adviser. The lending relationship will not be a factor in the selection of
securities.

The Adviser shall not be liable to the Trust, a Fund, or any shareholder of
a Fund for any losses that may be sustained in the purchase, holding, or sale of
any security, or for anything done or omitted by it, except acts or omissions
involving willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties imposed upon it by its contract with the Trust.

Because of the internal controls maintained by the Adviser to restrict the
flow of non-public information, Fund investments are typically made without any
knowledge of the Adviser's or its affiliates' lending relationships with an
issuer.

ADVISORY FEES

For its advisory services, Compass Bank receives an annual investment
advisory fee as described in the prospectuses.

For the fiscal years ended October 31, 1996, 1997 and 1998, the Funds paid
the following advisory fees:

<TABLE>
<CAPTION>
FEES PAID FEE WAIVERS
------------------------------------ ----------------------------------
FUND 1996 1997 1998 1996 1997 1998
- -------------------------------------- ---------- ---------- ------------ ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Money Market Fund..................... $ 646,650 $ 490,590 $ 319,769 $ 0 $ 166,107 $ 413,223
Tax-Free Money Market Fund............ * * $ 27,940 * * $ 78,291
Bond Fund............................. $ 411,493 $ 478,461 $ 661,196 $ 137,165 $ 68,168 $ 214,248
Equity Fund........................... * $ 691,952 $ 1,988,195 * $ 0 $ 0
</TABLE>

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

* An asterisk indicates that the Fund had not commenced operations as of the
period indicated.

SUB-ADVISER TO THE TAX-FREE MONEY MARKET FUND

The Adviser has entered into a sub-advisory agreement (the "Sub-Advisory
Agreement") with Weiss, Peck & Greer, L.L.C. ("WPG") dated April 1, 1998
relating to the Tax-Free Money Market Fund. Under the Sub-Advisory Agreement,
WPG invests the assets of the Fund on a daily basis, and continuously
administers the investment program of the Fund.

WPG is a limited liability company founded as a limited partnership in 1970,
and engages in investment management, venture capital management and management
buyouts. Since its founding, WPG

S-20
<PAGE>
has been active in managing portfolios of tax exempt securities. As of February
28, 1998, WPG manages over $15.9 billion in assets, $2.6 billion of which is
invested in tax exempt money market funds. The principal business address of WPG
is One New York Plaza, New York, N.Y. 10004.

WPG is entitled to a fee which is paid by the Adviser and which is
calculated daily and paid monthly, at an annual rate of: .075% of the Fund's
average daily net assets up to $150 million; .05% of the next $350 million of
the Fund's average daily net assets, .04% of the next $500 million in average
daily net assets; and .03% of the Fund's average daily net assets over $1
billion.

The continuance of the Sub-Advisory Agreement, after the first year, must be
specifically approved at least annually (i) by the vote of the Trustees, and
(ii) by the vote of a majority of the Trustees who are not parties to the
Agreement or "interested persons" of any party thereto, cast in person at a
meeting called for the purpose of voting on such approval. The Sub-Advisory
Agreement may be terminated by the Adviser, the Trust's Board of Trustees or by
a vote of the majority of the outstanding voting securities of the Tax-Free
Money Market Fund at any time, without the payment or any penalty, on sixty (60)
days' written notice to WPG and may be terminated at any time by ninety (90)
days' written notice to the Adviser. The Sub-Advisory Agreement will immediately
terminate in the event of its assignment or upon termination of the Advisory
agreement between the Adviser and the Trust with regard to the Tax-Free Money
Market Fund (as used herein, the terms "majority of the outstanding voting
securities," "interested persons" and "assignment" have the same meaning of such
terms in the 1940 Act).

<TABLE>
<CAPTION>
FEES PAID FEE WAIVERS
------------ ---------------
FUND 1998 1998
- --------------------------------------------------------------------------------------- ------------ ---------------
<S> <C> <C>
Tax-Free Money Market Fund............................................................. $ 18,627.03 $ 0
</TABLE>

THE ADMINISTRATOR

The Trust and SEI Investments Mutual Funds Services (the "Administrator")
have entered into an administration agreement (the "Administration Agreement").
Under the Administration Agreement, the Administrator provides the Trust with
administrative services, including regulatory reporting and all necessary office
space, equipment, personnel and facilities. For these administrative services,
The Administrator is entitled to a fee from each Fund, which is calculated daily
and paid monthly, at an annual rate of 0.20% of average daily net assets.

The Administration Agreement provides that the Administrator shall not be
liable for any error of judgment or mistake of law or for any loss suffered by a
Fund in connection with the matters to which the Administration Agreement
relates, except a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Administrator in the performance of its duties or
from reckless disregard by it of its duties and obligations thereunder. The
Administration Agreement was entered into on June 9, 1997 and has a stated term
of three years.

The Administrator, a Delaware business trust, has its principal business
offices at Oaks, Pennsylvania 19456. SEI Investments Management Corporation
("SIMC"), a wholly-owned subsidiary of SEI Investments, is the owner of all
beneficial interests in the Administrator. SEI Investments and its subsidiaries
and affiliates, including the Administrator, are leading providers of funds
evaluation services, trust accounting systems, and brokerage and information
services to financial institutions, institutional investors, and money managers.
The Administrator and its affiliates also serve as administrator or
sub-administrator to the following other mutual funds: The Achievement Funds
Trust, The Advisors' Inner Circle Fund, The Arbor Fund, ARK Funds, Armada Funds,
Bishop Street Funds, Boston 1784 Funds-Registered Trademark-, CrestFunds, Inc.,
CUFUND, First American Funds, Inc., First American Investment Funds, Inc., First
American Strategy Funds, Inc., HighMark Funds, Huntington Funds, The Nevis
Funds, Oak Associates Funds, The PBHG Funds, Inc., PBHG Advisor Funds, Inc.,
PBHG Insurance Series Fund, Inc., The Pillar Funds, SEI Asset Allocation Trust,
SEI Daily Income Trust, SEI Index Funds, SEI Institutional International Trust,
SEI

S-21
<PAGE>
Institutional Investments Trust, SEI Institutional Managed Trust, SEI Liquid
Asset Trust, SEI Tax Exempt Trust, STI Classic Funds, STI Classic Variable
Trust, TIP Funds and Alpha Select Funds.

For the fiscal year ended October 31, 1998, the Administrator earned
$274,873, $39,920, $233,455 and $549,966 for the Money Market, Tax-Free Money
Market, Bond Fund and the Equity Fund, respectively. For the fiscal period
beginning June 9, 1997 and ended October 31, 1997, the Administrator earned
$149,922, $96,779, and $186,608 for the Money Market Fund, and Bond and Equity
Fund, respectively. Federated Administrative Services, a subsidiary of Federated
Investors, previously provided administrative personnel and services to the
Money Market and Bond Funds. For the fiscal period beginning November 1, 1996
and ended June 9, 1997 and the fiscal year ended October 31, 1996 the Money
Market Fund incurred $162,059, and $230,264, respectively, for administrative
services, on which there were no voluntary fee waivers. For the fiscal period
beginning November 1, 1996 and ended June 9, 1997 and the fiscal years ended
October 31, 1996, the Bond Fund incurred $62,443 and $78,143, respectively, for
administrative services, on which there were no voluntary fee waivers.

THE DISTRIBUTOR

SEI Investments Distribution Co. (the "Distributor"), a wholly-owned
subsidiary of SEI Investments, and the Trust are parties to a distribution
agreement (the "Distribution Agreement") which applies to each Fund's classes of
shares.

The Non-Money Market Funds imposed a front-end sales charge upon their
Investment Shares (now the Class A Shares) in the amounts shown for the fiscal
years ended October 31, 1996, 1997 and 1998:

<TABLE>
<CAPTION>
DOLLAR AMOUNT OF LOADS
RETAINED BY SEI INVESTMENTS
DOLLAR AMOUNT OF LOADS
-------------------------------- -------------------------------
FUND 1996 1997 1998 1996 1997 1998
- --------------------------------------------------------------- --------- ---------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Bond Fund...................................................... N/A **$1,431 N/A $0
Equity Fund.................................................... * $ 0 * $0
</TABLE>

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

* An asterisk indicates that the Fund had not commenced operations as of the
periods indicated.

** Since 6/9/97

The Administrator provides the Funds with certain administrative personnel
and services necessary to operate the Funds. Such services include shareholder
servicing and certain legal and accounting services. For these services, the
Administrator is entitled to a fee which is calculated daily and paid monthly at
an annual rate of .20% of the Fund's average daily net assets payable from the
assets of the Funds. The Administrator may choose to voluntarily waive a portion
of its fee. The Administrator reserves the right, in its sole discretion, to
termination these voluntary waivers at any time.

THE TRANSFER AGENT

State Street Bank and Trust Company (the "Transfer Agent") serves as
transfer agent for the Trust and Boston Financial Data Services, Inc. (the
"Servicing Agent") serves as the Trust's servicing agent. The fee paid to the
Transfer Agent is based upon the size, type and number of accounts and
transactions made by shareholders. The Transfer Agent pays the Servicing Agent's
compensation.

THE CUSTODIAN

Compass Bank, Birmingham, Alabama, which is also the Adviser, is custodian
for the securities and cash of the Funds for which it receives an annual fee of
0.02% of each Fund's average aggregate daily net assets and is reimbursed for
its out-of-pocket expenses.

S-22
<PAGE>
INDEPENDENT AUDITORS

The independent auditors for the Trust are Deloitte & Touche LLP, Princeton,
New Jersey.

LEGAL COUNSEL

Morgan, Lewis & Bockius LLP, 1800 M Street, N.W., Washington, D.C. serves as
legal counsel to the Trust.

TRUSTEES AND OFFICERS OF THE TRUST

The management and affairs of the Trust are supervised by the Trustees under
the laws of the Commonwealth of Massachusetts. The Trust pays the fees for
unaffiliated Trustees.

The Trustees and Executive Officers of the Trust, their respective dates of
birth, and their principal occupations for the last five years are set forth
below. Each may have held other positions with the named companies during that
period. Unless otherwise noted, the business address of each Trustee and each
Executive Officer is SEI Investments Company, Oaks, Pennsylvania 19456. Certain
officers of the Trust also serve as officers of some or all of the following:
The Achievement Funds Trust, The Advisors' Inner Circle Fund, The Arbor Fund,
ARK Funds, Armada Funds, Bishop Street Funds, Boston 1784
Funds-Registered Trademark-, CrestFunds, Inc., CUFUND, First American Funds,
Inc., First American Investment Funds, Inc., First American Strategy Funds,
Inc., HighMark Funds, Huntington Funds, Oak Associates Funds, The PBHG Funds,
Inc., PBHG Advisor Funds, Inc., PBHG Insurance Series Fund, Inc., The Pillar
Funds, SEI Asset Allocation Trust, SEI Daily Income Trust, SEI Index Funds, SEI
Institutional International Trust, SEI Institutional Investments Trust, SEI
Institutional Managed Trust, SEI Liquid Asset Trust, SEI Tax Exempt Trust, STI
Classic Funds, STI Classic Variable Trust, TIP Funds and Alpha Select Funds,
each of which is an open-end management investment company managed by SEI
Investments Mutual Funds Services or its affiliates and, except for PBHG Advisor
Funds, Inc., distributed by SEI Investments Distribution Co.

ROBERT A. NESHER (DOB 08/17/46)--Chairman of the Board of
Trustees*--Currently performs various services on behalf of SEI Investments for
which Mr. Nesher is compensated. Executive Vice President of SEI Investments,
1986-1994. Director and Executive Vice President of the Administrator and the
Distributor, 1981-1994. Trustee of The Advisors' Inner Circle Fund, The Arbor
Fund, Boston 1784 Funds-Registered Trademark-, Oak Associates Funds, Pillar
Funds, SEI Asset Allocation Trust, SEI Daily Income Trust, SEI Index Funds, SEI
Institutional Investments Trust, SEI Institutional Managed Trust, SEI
Institutional International Trust, SEI Liquid Asset Trust and SEI Tax Exempt
Trust.

JOHN T. COONEY (DOB 01/20/27)--Trustee**--Vice Chairman of Ameritrust Texas
N.A., 1989-1992, and MTrust Corp., 1985-1989. Trustee of The Advisors' Inner
Circle Fund, The Arbor Fund, and Oak Associates Funds.

WILLIAM M. DORAN (DOB 05/26/40)--Trustee*--1701 Market Street, Philadelphia,
PA 19103-2921. Partner, Morgan, Lewis & Bockius LLP (law firm), counsel to the
Trust, SEI Investments, the Administrator and the Distributor. Director and
Secretary of SEI Investments and Secretary of the Administrator and the
Distributor. Trustee of The Advisors' Inner Circle Fund, The Arbor Fund, Oak
Associates Funds, SEI Asset Allocation Trust, SEI Daily Income Trust, SEI Index
Funds, SEI Institutional Investments Trust, SEI Institutional Managed Trust, SEI
Institutional International Trust, SEI Liquid Asset Trust and SEI Tax Exempt
Trust.

ROBERT A. PATTERSON (DOB 11/05/27)--Trustee**--Pennsylvania State
University, Senior Vice President, Treasurer (Emeritus). Financial and
Investment Consultant, Professor of Transportation (1984-present). Vice
President - Investments, Treasurer, Senior Vice President (Emeritus)
(1982-1984). Director, Pennsylvania Research Corp.; Member and Treasurer, Board
of Trustees of Grove City College. Trustee of The Advisors' Inner Circle Fund,
The Arbor Fund, and Oak Associates Funds.

S-23
<PAGE>
EUGENE B. PETERS (DOB 06/03/29)--Trustee**--Private investor from 1987 to
present. Vice President and Chief Financial Officer, Western Company of North
America (petroleum service company) (1980-1986). President of Gene Peters and
Associates (import company) (1978-1980). President and Chief Executive Officer
of Jos. Schlitz Brewing Company before 1978. Trustee of The Advisors' Inner
Circle Fund, The Arbor Fund, and Oak Associates Funds.

JAMES M. STOREY (DOB 04/12/31)--Trustee**--Partner, Dechert Price & Rhoads,
from September 1987 - December 1993; Trustee of The Advisors' Inner Circle Fund,
The Arbor Fund, Oak Associates Funds, SEI Asset Allocation Trust, SEI Daily
Income Trust, SEI Index Funds, SEI Institutional Investments Trust, SEI
Institutional Managed Trust, SEI Institutional International Trust, SEI Liquid
Asset Trust and SEI Tax Exempt Trust.

GEORGE J. SULLIVAN (DOB 11/13/42)--Trustee**--Chief Executive Officer
Newfound Consultants Inc. since April 1997. General Partner, Teton Partners,
L.P., June 1991-December 1996; Chief Financial Officer, Noble Partners, L.P.,
March 1991-December 1996; Treasurer and Clerk, Peak Asset Management, Inc.,
since 1991; Trustee, Navigator Securities Lending Trust, since 1995. Trustee of
The Arbor Fund, the Oak Associates Funds, The Advisors' Inner Circle Funds, SEI
Asset Allocation Trust, SEI Daily Income Trust, SEI Index Funds, SEI Liquid
Asset Trust, SEI Institutional Investments Trust, SEI Institutional Managed
Trust, SEI Institutional International Trust, and SEI Tax Exempt Trust.

MARK E. NAGLE (DOB 10/20/59)--President and Chief Executive Officer--Vice
President of Fund Accounting and Administration for SEI Fund Resources and Vice
President of the Administrator since 1996. Vice President of the Distributor
since December 1997. Vice President, Fund Accounting, BISYS Fund Services,
September 1995 to November 1996. Senior Vice President and Site Manager,
Fidelity Investments 1981 to September 1995.

TODD B. CIPPERMAN (DOB 02/14/66)--Vice President and Assistant
Secretary--Vice President and Assistant Secretary of SEI Investments, the
Administrator and the Distributor since 1995. Associate, Dewey Ballantine (law
firm), 1994-1995. Associate, Winston & Strawn (law firm) 1991-1994.

JAMES R. FOGGO (DOB 06/30/64)--Vice President and Assistant Secretary--Vice
President and Assistant Secretary of the Administrator and the Distributor since
1998. Associate, Paul Weiss, Rifkind, Wharton & Garrison (law firm), 1998.
Associate, Baker & McKenzie (law firm), 1995-1998. Associate, Battle Fowler
L.L.P. (law firm), 1993-1995. Operations Manager, The Shareholder Services
Group, Inc., 1986-1990.

LYDIA A. GAVALIS (DOB 06/05/64)--Vice President and Assistant
Secretary--Vice President and Assistant Secretary of the Administrator and the
Distributor since 1998. Assistant General Counsel and Director of Arbitration,
Philadelphia Stock Exchange, 1989-1998.

KATHY HEILIG (DOB 12/21/58)--Vice President and Assistant
Secretary--Treasurer of SEI Investments since 1997; Assistant Controller of SEI
Investments since 1995; Vice President of SEI Investments since 1991; Director
of Taxes of SEI Investments, 1987 to 1991. Tax Manager, Arthur Anderson LLP
prior to 1987.

JOSEPH M. O'DONNELL (DOB 11/13/54)--Vice President and Assistant
Secretary--Vice President and Assistant Secretary of the Administrator and the
Distributor since 1998. Vice President and General Counsel, FPS Services, Inc.,
1993-1997. Staff Counsel and Secretary, Provident Mutual Family of Funds,
1990-1993.

SANDRA K. ORLOW (DOB 10/18/53)--Vice President and Assistant
Secretary--Secretary of the Distributor since 1998; Vice President of the
Distributor since 1988. Vice President and Assistant Secretary of the Manager
since 1988. Assistant Secretary of the Distributor from 1988 to 1998.

KEVIN P. ROBINS (DOB 04/15/61)--Vice President and Assistant
Secretary--Senior Vice President and General Counsel of SEI Investments, the
Administrator and the Distributor since 1994. Assistant

S-24
<PAGE>
Secretary of SEI Investments since 1992; Secretary of the Administrator since
1994. Vice President, General Counsel and Assistant Secretary of the
Administrator and the Distributor, 1992-1994. Associate, Morgan, Lewis & Bockius
LLP (law firm), 1988-1992.

LYNDA J. STRIEGEL (DOB 10/30/48)--Vice President and Assistant
Secretary--Vice President and Assistant Secretary of the Administrator and the
Distributor since 1998. Senior Asset Management Counsel, Barnett Banks, Inc.,
1997-1998. Partner, Groom and Nordberg, Chartered, 1996-1997. Associate General
Counsel, Riggs Bank, N.A., 1991-1995.

ROBERT DELLACROCE (DOB 12/17/63)--Controller and Chief Financial
Officer--Director, Funds Administration and Accounting of SEI Investments since
1994. Senior Audit Manager, Arthur Andersen LLP, 1986-1994.

JOHN H. GRADY, JR. (DOB 06/01/61)--Secretary--1701 Market Street,
Philadelphia, PA 19103-2921, Partner since 1995, Morgan, Lewis & Bockius LLP
(law firm), counsel to the Trust, SEI Investments, the Administrator and the
Distributor.

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

* Messrs. Nesher and Doran are Trustees who may be deemed to be "interested"
persons of the Fund as that term is defined in the 1940 Act.

** Messrs. Cooney, Patterson, Peters, Storey and Sullivan serve as members of
the Audit Committee of the Fund.

<TABLE>
<CAPTION>
AGGREGATE
COMPENSATION
FROM REGISTRANT
FOR THE FISCAL PENSION OR TOTAL COMPENSATION FROM REGISTRANT
YEAR ENDING RETIREMENT BENEFITS ESTIMATED ANNUAL AND FUND COMPLEX* PAID TO TRUSTEES
OCTOBER 31, ACCRUED AS PART OF BENEFITS FOR THE FISCAL YEAR ENDING
NAME OF PERSON, POSITION 1998 FUND EXPENSES UPON RETIREMENT OCTOBER 31, 1998
- ---------------------------- --------------- --------------------- ------------------- -----------------------------------
<S> <C> <C> <C> <C>
John T. Cooney.............. $ 2,687 N/A N/A $29,000 for services on 1 board
Frank E. Morris**........... $ 2,666 N/A N/A $29,000 for services on 1 board
Robert Patterson............ $ 3,009 N/A N/A $30,000 for services on 1 board
Eugene B. Peters............ $ 2,889 N/A N/A $30,000 for services on 1 board
James M. Storey, Esq........ $ 2,812 N/A N/A $30,000 for services on 1 board
George J. Sullivan, Jr...... N/A N/A N/A N/A
William M. Doran, Esq....... N/A N/A N/A N/A
Robert A. Nesher............ N/A N/A N/A N/A
</TABLE>

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

* The Trust is the only investment company in the "Fund Complex."

** Mr. Morris retired as of December 30, 1998.

Officers and Trustees own less than 1% of the Trust's outstanding shares.

TRUSTEE LIABILITY

The Trust's Declaration of Trust provides that the Trustees will not be
liable for errors of judgment or mistakes of fact or law. However, they are not
protected against any liability to which they would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of their office.

S-25
<PAGE>
PERFORMANCE INFORMATION

From time to time a Fund may advertise its performance. Performance figures
are based on historical earnings and are not intended to indicate future
performance.

CLASSES OF SHARES AND PERFORMANCE

A Fund's performance fluctuates on a daily basis largely because net
earnings and, with respect to the Non-Money Market Funds, because their offering
price per share fluctuate daily. Both net earnings and offering price per share
are factors in the computation of yield and total return.

PERFORMANCE COMPARISONS

Each Fund may periodically compare its performance to other mutual funds
tracked by mutual fund rating services, to broad groups of comparable mutual
funds, or to unmanaged indices. These comparisons may assume reinvestment of
dividends but generally do not reflect deductions for administrative and
management costs.

ECONOMIC AND MARKET INFORMATION

Advertising and sales literature for a Fund may include discussions of
economic, financial and political developments and their effect on the
securities market. Such discussions may take the form of commentary on these
developments by Fund portfolio managers and their views and analysis on how such
developments could affect the Fund. In addition, advertising and sales
literature may quote statistics and give general information about the mutual
fund industry, including the growth of the industry, from sources such as the
Investment Company Institute ("ICI").

COMPUTATION OF YIELD

Yields are one basis upon which investors may compare the Funds with other
money market funds; however, yields of other money market funds and other
investment vehicles may not be comparable because of the factors set forth above
and differences in the methods used in valuing portfolio instruments.

SEVEN-DAY YIELD

The current yield of the Money Market Funds will be calculated daily based
upon the seven days ending on the date of calculation (the "base period"). The
yield is computed by determining the net change (exclusive of capital changes)
in the value of a hypothetical pre-existing shareholder account having a balance
of one share at the beginning of the period, subtracting a hypothetical charge
reflecting deductions from shareholder accounts, and dividing such net change by
the value of the account at the beginning of the same period to obtain the base
period return and multiplying the result by (365/7). Realized and unrealized
gains and losses are not included in the calculation of the yield. The effective
compound yield of the Money Market Funds is determined by computing the net
change (exclusive of capital changes) in the value of a hypothetical
pre-existing account having a balance of one share at the beginning of the
period, subtracting a hypothetical charge reflecting deductions from shareholder
accounts, and dividing the difference by the value of the account at the
beginning of the base period to obtain the base period return, and then
compounding the base period return by adding 1, raising the sum to a power equal
to 365 divided by 7, and subtracting 1 from the result, according to the
following formula: Effective Yield = [(Base Period Return + 1)To The Power of
365/7] - 1. The current and the effective yields reflect the reinvestment of net
income earned daily on portfolio assets.

The Tax-Free Money Market Fund's "tax equivalent yield" and "tax equivalent
effective yield" are calculated by determining the rate of return that would
have to be achieved on a fully taxable investment to produce the after-tax
equivalent of the Fund's yield, assuming certain tax brackets for a Shareholder.
Tax-

S-26
<PAGE>
exempt yield is calculated according to the same formula except that E equals
the interest exempt from federal income tax earned during the period. This
tax-exempt yield is then translated into tax-equivalent yield according to the
following formula:

E
TAX-EQUIVALENT YIELD = ----- + T
% 1-P

E = the portion of the yield which is tax-exempt
P = stated income tax rate
T = the portion of the yield which is taxable

The yield for the Institutional Shares of the Money Market Fund for the
seven-day period ended October 31, 1998 was 4.90%. The yield for the Investment
Services Shares for the same period was 4.64%. The yield for the Investment
Service Shares of the Tax-Free Money Market Fund for the seven-day period ended
October 31, 1998 was 2.82%.

The yields of these Funds fluctuate, and the annualization of a week's
dividend is not a representation by the Trust as to what an investment in the
Fund will actually yield in the future. Actual yields will depend on such
variables as asset quality, average asset maturity, the type of instruments a
Fund invests in, changes in interest rates on money market instruments, changes
in the expenses of the Fund and other factors.

THIRTY-DAY YIELD

The Bond and Equity Funds may advertise a 30-day yield. In particular, yield
will be calculated according to the following formula:

Yield = (2 (a-b/cd + 1)To The Power of 6 - 1) where a = dividends and
interest earned during the period; b = expenses accrued for the period (net of
reimbursement); c = the average daily number of shares outstanding during the
period that were entitled to receive dividends; and d = the maximum offering
price per share on the last day of the period.

The Bond Fund's yield for the thirty-day period ended October 31, 1998 was
as follows: Class A Shares 3.67% and Class B Shares 4.07%.

The Equity Fund's yield for the thirty-day period ended October 31, 1998 was
as follows: Institutional Shares 0.23% and Class A Shares 0.06%.

CALCULATION OF TOTAL RETURN

The Funds may advertise total return. In particular, total return will be
calculated according to the following formula: P (1 + T)(n) = ERV, where P = a
hypothetical initial payment of $1,000; T = average annual total return; n =
number of years; and ERV = ending redeemable value of a hypothetical $1,000
payment made at the beginning of the designated time period as of the end of
such period.

S-27
<PAGE>
The average total returns for the Funds from inception through October 31,
1998 were as follows:

UPDATE

<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
-----------------------------------------
ONE FIVE SINCE
FUND CLASS(1) YEAR YEARS TEN YEARS INCEPTION*
- ------------------------- --------------------------------------- ------ ------ ----- ----------
<S> <C> <C> <C> <C> <C>
Money Market Fund........ Institutional Shares 5.33% N/A N/A 1.81%
Investment Service Shares 5.07% 4.75% N/A 1.99%

Tax-Free Money Market
Fund.................... Institutional Shares N/A N/A N/A N/A
Investment Service Shares N/A N/A N/A 1.33%

Bond Fund................ Synthetic Institutional Shares 8.43% 5.31% N/A 8.75%**
Class A Shares (without load) 8.25% 5.28% N/A 6.29%
Class A Shares (load) 3.93% 4.43% N/A 5.63%
Class B Shares (without load) N/A N/A N/A N/A
Class B Shares (with load) N/A N/A N/A N/A

Equity Fund.............. Synthetic Institutional Shares 19.18% 16.76%** N/A 15.94%**
Synthetic Class A Shares (without load) 19.38% 16.80%** N/A 17.39%**
Synthetic Class A Shares (load) 14.62% 15.86% N/A 12.40%**
Class B Shares (without load) N/A N/A N/A N/A
Class B Shares (with load) N/A N/A N/A N/A
</TABLE>

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

* Institutional Shares of the Money Market Fund were initially offered to the
public on June 9, 1997. Investment Service Shares (formerly, Trust Shares)
of the Money Market Fund were initially offered to the public on February 5,
1990. Prior to June 9, 1997, Investment Service Shares (Trust Shares) of the
Money Market Fund were not subject to Rule 12b-1 or shareholder servicing
fees. Investment Shares of the Bond Fund were initially offered to the
public on April 20, 1992. Institutional Shares of the Tax-Free Money Market
Fund were not offered as of October 31, 1998. Investment Services Shares of
the Tax-Free Money Market Fund were initially offered to the public on May
20, 1998. Institutional Shares of the Bond Fund were initially offered to
the public on June 16, 1997. Class B Shares of the Bond Fund and Class B
Shares of the Equity Fund were not offered to the public during the fiscal
year ended October 31, 1998. Institutional Shares of the Equity Fund were
initially offered to the public on June 13, 1997. Class A Shares (formerly,
Investment Shares) of the Equity Fund were initially offered to the public
on November 24, 1997.

** The performance for the period from October 13, 1993 to June 13, 1997
represents the performance on a common trust fund managed by the Adviser.

The average annual total return for a Fund is the average compounded rate of
return for a given period that would equate a $1,000 initial investment to the
ending redeemable value of that investment. The ending redeemable value is
computed by multiplying the number of shares owned at the end of the period by
the offering price per share at the end of the period. The number of shares
owned at the end of the period is based on the number of shares purchased at the
beginning of the period with $1,000, less any applicable sales charge, adjusted
over the period by any additional shares, assuming the monthly reinvestment of
all dividends and distributions. Total return may also be shown without giving
effect to any sales charge.

S-28
<PAGE>
PURCHASING SHARES

Shares are sold at their net asset value with any applicable sales charge on
days when the New York Stock Exchange (the "NYSE") is open for business and,
with respect to the Money Market Fund, days when both the NYSE and the Federal
Reserve are open for business, except for federal or state holidays restricting
wire transfers. The procedures for purchasing shares of the Funds is explained
in the prospectuses.

The Adviser, Compass Brokerage, Inc. and the other affiliates of Bancshares
which provide shareholder and administrative services to the Fund sometimes are
referred herein as "Compass."

DISTRIBUTION AND SHAREHOLDER SERVICES PLANS

The Trust has adopted separate Plans for the Class A Shares and Class B
Shares of the Non-Money Market Funds pursuant to Rule 12b-1 (the "12b-1 Plans")
which was promulgated by the Securities and Exchange Commission under the
Investment Company Act of 1940. The 12b-1 Plans provide for payment of fees to
finance any activity which is principally intended to result in the sale of a
Fund's shares subject to the 12b-1 Plans. Such activities may include the
advertising and marketing of shares; preparing, printing and distributing
prospectuses and sales literature to prospective shareholders, brokers or
administrators; and implementing and operating the 12b-1 Plans. Pursuant to the
12b-1 Plans, the Distributor may pay fees to brokers for distribution and
administrative services and to administrators for administrative services as to
shares.

With respect to the Investment Service Shares of the Money Market Funds, the
Trust has adopted a Shareholder Service Plan (the "Service Plan"). Pursuant to
the Service Plan, the Distributor may pay fees to administrators for
administrative services as to Shares.

The administrative services are provided by a representative who has
knowledge of the shareholder's particular circumstances and goals, and include,
but are not limited to: communicating account openings; communicating account
closings; entering purchase transactions; entering redemption transactions;
providing or arranging to provide accounting support for all transactions;
wiring funds and receiving funds for Share purchases and redemptions; confirming
and reconciling all transactions; reviewing the activity in Fund accounts; and
providing training and supervision of broker personnel; posting and reinvesting
dividends to Fund accounts or arranging for this service to be performed by the
Trust's transfer agent; and maintaining and distributing current copies of
prospectuses and shareholder reports to the beneficial owners of Shares and
prospective shareholders.

The Trustees expect that the adoption of the 12b-1 Plans will result in the
sale of a sufficient number of shares so as to allow the Non-Money Market Funds
to achieve economic viability. It is also anticipated that an increase in the
size of a Fund will facilitate more efficient portfolio management and assist
the Fund in seeking to achieve its investment objective.

PAYMENTS UNDER THE CLASS A PLAN

For the fiscal year ended October 31, 1998, the Class A Shares of the
Non-Money Market Funds incurred the following distribution expenses, pursuant to
the Class A Plan:

<TABLE>
<CAPTION>
TOTAL
DISTRIBUTION
TOTAL EXPENSES (AS A
DISTRIBUTION % OF NET SALES PRINTING
FUND EXPENSES ASSETS) EXPENSES COSTS OTHER COSTS
- ---------------------------------------------------------- ----------- --------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Bond Fund................................................. $ 19,857 .14%* N/A N/A N/A
Equity Fund............................................... $ 1,461 .25% N/A N/A N/A
</TABLE>

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

* Reflects voluntary fee waiver in effect for the period indicated.

S-29
<PAGE>
PAYMENTS UNDER THE CLASS B PLAN

As of October 31, 1998, the Trust had not commenced offering of Class B
Shares.

PAYMENTS UNDER THE SERVICE PLAN

For the fiscal year ended October 31, 1998, the Investment Service Shares of
the Money Market Funds were subject to shareholder servicing fees under its
Service Plan for which the Money Market Fund paid $341,000, none of which was
voluntarily waived and the Tax-Free Money Market Fund paid $67,000, none of
which was waived.

CONVERSION TO FEDERAL FUNDS

It is each Fund's policy to be as fully invested as possible so that maximum
interest may be earned. To this end, all payments from shareholders must be in
federal funds or be converted into federal funds.

REDEEMING SHARES

Each Fund redeems shares at the next computed net asset value after the
Transfer Agent receives the redemption request. Redemption procedures are
explained in the Fund's prospectuses. Although the Transfer Agent does not
charge for telephone redemptions, it reserves the right to charge a fee for the
cost of wire-transferred redemptions of less than $5,000.

REDEMPTION IN KIND

Although the Trust intends to redeem shares in cash, it reserves the right
under certain circumstances to pay the redemption price in whole or in part by a
distribution of securities from each respective Fund's portfolio.

Redemption in kind will be made in conformity with applicable Securities and
Exchange Commission rules, taking such securities at the same value employed in
determining net asset value and selecting the securities in a manner the
Trustees determine to be fair and equitable.

The Trust has elected to be governed by Rule 18f-1 of the Investment Company
Act of 1940 under which the Trust is obligated to redeem shares for any one
shareholder in cash only up to the lesser of $250,000 or 1% of a Fund's net
asset value during any 90-day period.

Redemption in kind is not as liquid as a cash redemption. If redemption is
made in kind, shareholders receiving their securities and selling them before
their maturity could receive less than the redemption value of their securities
and could incur certain transaction costs.

DETERMINATION OF NET ASSET VALUE

THE MONEY MARKET FUND AND TAX-FREE MONEY MARKET FUND

The Money Market Fund and Tax-Free Money Market Fund attempt to stabilize
the value of a Share at $1.00. Net asset value is calculated on days on which
both the New York Stock Exchange and the Federal Reserve wire system are open
for business. Currently, the Fund is closed for business when the following
holidays are observed: New Year's Day, Martin Luther King Jr. Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Columbus Day,
Veterans' Day, Thanksgiving and Christmas.

USE OF THE AMORTIZED COST METHOD

The Trustees have decided that the best method for determining the value of
portfolio instruments for the Money Market Fund and Tax-Free Money Market Fund
is amortized cost. Under this method,

S-30
<PAGE>
portfolio instruments are valued at the acquisition cost as adjusted for
amortization of premium or accumulation of discount rather than at current
market value.

The Money Market and Tax-Free Money Market Funds' use of the amortized cost
method of valuing portfolio instruments depends on its compliance with certain
conditions in Rule 2a-7 (the "Rule") promulgated by the SEC under the Investment
Company Act of 1940. Under the Rule, the Trustees must establish procedures
reasonably designed to stabilize the net asset value per Share, as computed for
purposes of distribution and redemption, at $1.00 per Share, taking into account
current market conditions and the Funds' investment objective.

Under the Rule, the Money Market and Tax-Free Money Market Funds are
permitted to purchase instruments which are subject to demand features or
standby commitments. As defined by the Rule, a demand feature entitles the Funds
to receive the principal amount of the instrument from the issuer or a third
party on (1) no more than 30 days' notice or (2) at specified intervals not
exceeding one year on no more than 30 days' notice. A standby commitment
entitles the Funds to achieve same day settlement and to receive an exercise
price equal to the amortized cost of the underlying instrument plus accrued
interest at the time of exercise.

MONITORING PROCEDURES

The Trustees' procedures include monitoring the relationship between the
amortized cost value per Share and the net asset value per Share based upon
available indications of market value. The Trustees will decide what, if any,
steps should be taken if there is a difference of more than 0.5% between the two
values. The Trustees will take any steps they consider appropriate (such as
redemption in kind or shortening the average portfolio maturity) to minimize any
material dilution or other unfair results arising from differences between the
two methods of determining net asset value.

INVESTMENT RESTRICTIONS

The Rule requires that the Funds limit their investments to instruments
that, in the opinion of the Trustees, present minimal credit risks and have
received the requisite rating from one or more NRSRO. If the instruments are not
rated, the Trustees must determine that they are of comparable quality. The Rule
also requires the Funds to maintain a dollar-weighted average portfolio maturity
(not more than 90 days) appropriate to the objective of maintaining a stable net
asset value of $1.00 per Share. Except as allowed under the Rule, no instrument
with a remaining maturity of more than thirteen months can be purchased by the
Funds.

Should the disposition of a portfolio security result in a dollar-weighted
average portfolio maturity of more than 90 days, the Money Market and Tax-Free
Money Market Funds will invest their available cash to reduce the average
maturity to 90 days or less as soon as possible.

The Money Market and Tax-Free Money Market Funds may attempt to increase
yield by trading portfolio securities to take advantage of short-term market
variations. Under the amortized cost method of valuation, neither the amount of
daily income nor the net asset value is affected by any unrealized appreciation
or depreciation of the portfolio.

In periods of declining interest rates, the indicated daily yield on Shares
of the Money Market and Tax-Free Money Market Funds, computed by dividing the
annualized daily income on the Funds' portfolio by the net asset value computed
as above, may tend to be higher than a similar computation made by using a
method of valuation based upon market prices and estimates.

In periods of rising interest rates, the indicated daily yield on Shares of
the Money Market and Tax-Free Money Market Funds computed the same way may tend
to be lower than a similar computation made by using a method of calculation
based upon market prices and estimates.

S-31
<PAGE>
NON-MONEY MARKET FUNDS

Net asset value generally changes each day for each Non-Money Market Fund.
Net asset value is calculated on days on which the New York Stock Exchange is
open for business. Currently the Funds are closed when the following holidays
are observed: New Year's Day, Martin Luther King Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas.

DETERMINING MARKET VALUE OF SECURITIES

Market values of a Non-Money Market Fund's portfolio securities are
determined as follows:

- as provided by an independent pricing service;

- for short-term obligations, according to the mean between bid and asked
prices, as furnished by an independent pricing service, or for short-term
obligations with remaining maturities of less than 60 days at the time of
purchase, at amortized cost unless the Trustees determine this is not fair
value; or

- at fair value as determined in good faith by the Trustees.

Prices provided by independent pricing services may be determined without
relying exclusively on quoted prices. Pricing services may consider:

- yield;

- quality;

- coupon rate;

- maturity;

- type of issue;

- trading characteristics; and

- other market data.

Over-the-counter put options will be valued at the mean between the bid and the
asked prices. Covered call options will be valued at the last sale price on the
national exchange on which such option is traded. Unlisted call options will be
valued at the latest bid price as provided by brokers.

TAXES

The following is only a summary of certain additional federal income tax
considerations generally affecting the Funds and its shareholders that are not
described in the Funds' prospectus. No attempt is made to present a detailed
explanation of the tax treatment of the Funds or its shareholders, and the
discussion here and in the Funds' prospectus is not intended as a substitute for
careful tax planning. Shareholders are urged to consult their tax advisors with
specific reference to their own tax situations including their state and local
tax liabilities.

FEDERAL INCOME TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS

The following general discussions of certain federal income tax consequences
is based on the Internal Revenue Code of 1986, as amended (the "Code") and the
regulations issued thereunder as in effect on the date of this Statement of
Additional Information. New legislation, as well as administrative changes or
court decisions, may significantly change the conclusions expressed herein, and
may have a retroactive effect with respect to the transactions contemplated
herein.

S-32
<PAGE>

QUALIFICATION AS REGULATED INVESTMENT COMPANY

Each Fund intends to qualify and elect to be treated as a "regulated
investment company" ("RIC") as defined under Subchapter M of the Code. By
following such a policy, each Fund expects to eliminate or reduce to a nominal
amount the federal taxes to which it may be subject.

In order to qualify as a RIC, a Fund must distribute at least 90% of its net
investment income (generally, includes dividends, taxable interest, and the
excess of net short-term capital gains over net long-term capital losses less
operating expenses) and at least 90% of its net tax exempt interest income, for
each tax year, if any, to its shareholders and also must meet several additional
requirements. Among these requirements are the following: (i) at least 90% of a
Fund's gross income each taxable year must be derived from dividends, interest,
payments with respect to securities loans and gains from the sale or other
disposition of stock or securities, or certain other income; (ii) at the close
of each quarter of each Fund's taxable year, at least 50% of the value of its
total assets must be represented by cash and cash items, U.S. Government
securities, securities of other RICs and other securities, with such other
securities limited, in respect to any one issuer, to an amount that does not
exceed 5% of the value of the Fund's assets and that does not represent more
than 10% of the outstanding voting securities of such issuer; and (iii) at the
close of each quarter of each Fund's taxable year, not more than 25% of the
value of its assets may be invested in securities (other than U.S. Government
securities or the securities of other RICs) of any one issuer or of two or more
issuers that each Fund controls or that are engaged in the same, similar or
related trades or business. For purposes of the 90% gross income requirement
described above, foreign currency gains that are not directly related to the
Fund's principal business of investing in stock or securities (or options or
futures with respect to stock or securities) may be excluded from income that
qualifies under the 90% requirement.

Although the Funds intend to distribute substantially all of its net
investment income and may distribute its capital gains for any taxable year, the
Fund will be subject to federal income taxation to the extent any such income or
gains are not distributed.

If a Fund fails to qualify for any taxable year as a RIC, all of its taxable
income will be subject to tax at regular corporate income tax rates without any
deduction for distributions to shareholders and such distributions generally
will be taxable to shareholders as ordinary dividends to the extent of a Fund's
current and accumulated earnings and profits. In this event, distributions
generally will be eligible for the dividends-received deduction for corporate
shareholders.

FUND DISTRIBUTIONS

Distributions of investment company taxable income will be taxable to
shareholders as ordinary income, regardless of whether such distributions are
paid in cash or are reinvested in additional Shares, to the extent of the Fund's
earnings and profits. The Funds anticipate that it will distribute substantially
all of its investment company taxable income for each taxable year.

A Fund may either retain or distribute to shareholders its excess of net
long-term capital gains over net short-term capital losses ("net capital
gains"). If such gains are distributed as a capital gains distribution, they are
taxable to shareholders who are individuals at a maximum rate of 20%, regardless
of the length of time the shareholder has held shares. If any such gains are
retained, a Fund will pay federal income tax thereon.

In the case of corporate shareholders, distributions (other than capital
gains distributions) from a RIC generally qualify for the dividends-received
deduction only to the extent of the gross amount of qualifying dividends
received by the Fund for the year. Generally, and subject to certain
limitations, a dividend will be treated as a qualifying dividend if it has been
received from a domestic corporation. Accordingly, it is not expected that any
distribution from the Money Market Fund, Tax-Free Money Market Fund, or Bond
Fund

S-33
<PAGE>

will qualify for the corporate dividends-received deduction. Conversely,
distributions from the Equity Fund will generally qualify for the corporate
dividends-received deduction.

Ordinarily, investors should include all dividends as income in the year of
payment. However, dividends declared payable to shareholders of record in
December of one year, but paid in January of the following year, will be deemed
for tax purposes to have been received by the shareholder and paid by a Fund in
the year in which the dividends were declared.

The Funds will provide a statement annually to shareholders as to the
federal tax status of distributions paid (or deemed to be paid) by a Fund during
the year, including the amount of dividends eligible for the corporate
dividends-received deduction.

SALE OR EXCHANGE OF FUND SHARES

Generally, gain or loss on the sale or exchange of a Share will be capital
gain or loss that will be long-term if the Share has been held for more than
twelve months and otherwise will be short-term. For individuals, long-term
capital gains are currently taxed at a maximum rate of 20% and short-term
capital gains are currently taxed at ordinary income tax rates. However, if a
shareholder realizes a loss on the sale, exchange or redemption of a Share held
for six months or less and has previously received a capital gains distribution
with respect to the Share (or any undistributed net capital gains of a Fund with
respect to such Share are included in determining the shareholder's long-term
capital gains), the shareholder must treat the loss as a long-term capital loss
to the extent of the amount of the prior capital gains distribution (or any
undistributed net capital gains of a Fund that have been included in determining
such shareholder's long-term capital gains). In addition, any loss realized on a
sale or other disposition of Shares will be disallowed to the extent an investor
repurchases (or enters into a contract or option to repurchase) Shares within a
period of 61 days (beginning 30 days before and ending 30 days after the
disposition of the Shares). This loss disallowance rule will apply to Shares
received through the reinvestment of dividends during the 61-day period.

In certain cases, a Fund will be required to withhold, and remit to the
United States Treasury, 31% of any distributions paid to a shareholder who (1)
has failed to provide a correct taxpayer identification number, (2) is subject
to backup withholding by the Internal Revenue Service, or (3) has failed to
certify to that Fund that such shareholder is not subject to backup withholding.

FEDERAL EXCISE TAX

If a Fund fails to distribute in a calendar year at least 98% of its
ordinary income for the year and 98% of its capital gain net income (the excess
of short and long term capital gains over short and long term capital losses)
for the one-year period ending October 31 of that year (and any retained amount
from the prior calendar year), a fund will be subject to a nondeductible 4%
Federal excise tax on the undistributed amounts. The Funds intend to make
sufficient distributions to avoid imposition of this tax, or to retain, at most
its net capital gains and pay tax thereon.

TAX-FREE MONEY MARKET FUND

The Tax-Free Money Market Fund intends to qualify to pay "exempt interest
dividends" to the shareholders by satisfying the Code's requirement that at the
close of each quarter of its taxable year at least 50% of the value of its total
assets consist of obligations, the interest on which is exempt from federal
income tax. As long as this and certain other requirements are met, dividends
derived from the Fund's net tax-exempt interest income will be "exempt interest
dividends" that are excluded from your gross income for federal income tax
purposes. Exempt interest dividends may however, have collateral federal income
tax consequences as discussed below. Exempt interest dividends may be subject to
the alternative minimum tax (the "Alternative Minimum Tax") imposed by Section
55 of the Code. The Alternative Minimum Tax is imposed at a rate up to 28% in
the case of non-corporate taxpayers and at the rate of 20% in the case of
corporate taxpayers, to the extent it exceeds the taxpayer's regular tax
liability. The Alternative Minimum

S-34
<PAGE>

Tax may be imposed in two circumstances. First, exempt-interest dividends
derived from certain "private activity bonds" issued after August 7, 1986, will
generally be an item of tax preference (and therefore potentially subject to the
Alternative Minimum Tax) for both corporate and non-corporate taxpayers. Second,
in the case of exempt-interest dividends received by corporate shareholders, all
exempt-interest dividends, regardless of when the bonds from which they are
derived were issued or whether they are derived from private activity bonds,
will be included in the corporation's "adjusted current earnings," as defined in
Section 56(g) of the Code, in calculating the corporation's alternative minimum
taxable income for purposes of determining the Alternative Minimum Tax.

The Tax-Free Money Market Fund may make investments in securities (such as
STRIPS) that bear "original issue discount" or "acquisition discount"
(collectively, "OID Securities"). The holder of such securities is deemed to
have received interest income even though no cash payments have been received.
Accordingly, OID Securities may not produce sufficient current cash receipts to
match the amount of distributable net investment income the Fund must distribute
to satisfy the Distribution Requirement. In some cases, the Fund may have to
borrow money or dispose of other investments in order to make sufficient cash
distributions to satisfy the Distribution Requirement.

Any loss recognized by a shareholder upon the sale or redemption of shares
of the Fund held for six months or less will be disallowed to the extent of any
exempt-interest dividends the shareholder has received with respect to such
shares. Interest on indebtedness incurred by shareholders to purchase or carry
shares of the Fund will not be deductible for federal income tax purposes. The
deduction otherwise allowable to property and casualty insurance companies for
"losses incurred" will be reduced by an amount equal to a portion of
exempt-interest dividends received or accrued during any taxable year. Foreign
corporations engaged in a trade or business in the United States will be subject
to a "branch profits tax" on their "dividend equivalent amount" for the taxable
year, which will include exempt-interest dividends. Certain Subchapter S
corporations may also be subject to taxes on their "passive investment income,"
which could include exempt-interest dividends. Up to 85% of the Social Security
benefits or railroad retirement benefits received by an individual during any
taxable year will be included in the gross income of such individual if the
individual's "modified adjusted gross income" (which includes exempt-interest
dividends) plus one-half of the Social Security benefits or railroad retirement
benefits received by such individual during that taxable year exceeds the base
amount described in Section 86 of the Code.

The Tax-Free Money Market Fund may not be an appropriate investment for
persons (including corporations and other business entities) who are
"substantial users" (or persons related to such users) of facilities financed by
industrial development or private activity bonds. A "substantial user" is
defined generally to include certain persons who regularly use a facility in
their trade or business. Such entities or persons should consult their tax
advisers before purchasing shares of the Tax-Free Money Market Fund.

Issuers of bonds purchased by the Tax-Free Money Market Fund (or the
beneficiary of such bonds) may have made certain representations or covenants in
connection with the issuance of such bonds to satisfy certain requirements of
the Code that must be satisfied subsequent to the issuance of such bonds.
Investors should be aware that exempt-interest dividends derived from such bonds
may become subject to federal income taxation retroactively to the date thereof
if such representations are determined to have been inaccurate or if the issuer
of such bonds (or the beneficiary of such bonds) fails to comply with such
covenants.

Capital gains experienced by the Tax-Free Money Market Fund could result in
an increase in dividends. Capital losses could result in a decrease in
dividends. If, for some extraordinary reason, the Fund realizes net long-term
capital gains, it will distribute them at least once every 12 months.

STATE AND LOCAL TAXES

Rules of state and local taxation of dividend and capital gains
distributions from regulated investment companies often differ from the rules
for federal income taxation described above. Shareholders are urged

S-35
<PAGE>

to consult their tax advisors as to the consequences of these and other state
and local tax rules affecting investment in the Funds.

FUND TRANSACTIONS

The Trust has no obligation to deal with any dealer or group of dealers in
the execution of transactions in portfolio securities. Subject to policies
established by the Trustees, the Adviser or Sub-Adviser is responsible for
placing the orders to execute transactions for a Fund. In placing orders, it is
the policy of the Trust to seek to obtain the best net results taking into
account such factors as price (including the applicable dealer spread), the
size, type and difficulty of the transaction involved, the firm's general
execution and operational facilities, and the firm's risk in positioning the
securities involved. While the Adviser or Sub-Adviser generally seeks reasonably
competitive spreads or commissions, the Trust will not necessarily be paying the
lowest spread or commission available.

The money market securities in which the Funds invest are traded primarily
in the over-the-counter market. Bonds and debentures are usually traded
over-the-counter, but may be traded on an exchange. Where possible, the Adviser
or Sub-Adviser will deal directly with the dealers who make a market in the
securities involved except in those circumstances where better prices and
execution are available elsewhere. Such dealers usually are acting as principal
for their own account. On occasion, securities may be purchased directly from
the issuer. Money market securities are generally traded on a net basis and do
not normally involve either brokerage commissions or transfer taxes. The cost of
executing portfolio securities transactions of the Trust will primarily consist
of dealer spreads and underwriting commissions.

Although investment decisions for the Funds are made independently from
those of the other accounts managed by the Adviser or Sub-Adviser, investments
of the type the Funds may make may also be made by those other accounts. When a
Fund and one or more other accounts managed by the Adviser or Sub-Adviser are
prepared to invest in, or desire to dispose of, the same security, available
investments or opportunities for sales will be allocated in a manner believed by
the Adviser or Sub-Adviser to be equitable to each. In some cases, this
procedure may adversely affect the price paid or received by a Fund or the size
of the position obtained or disposed of by the Fund. In other cases, however, it
is believed that coordination and the ability to participate in volume
transactions will be to the benefit of the Fund.

TRADING PRACTICES AND BROKERAGE

When selecting brokers and dealers to handle the purchase and sale of
portfolio instruments, the Adviser or Sub-Adviser looks for prompt execution of
the order at a favorable price. In working with dealers, the Adviser or
Sub-Adviser will generally use those who are recognized dealers in specific
portfolio instruments, except when a better price and execution of the order can
be obtained elsewhere. The Adviser or Sub-Adviser makes decisions on portfolio
transactions and selects brokers and dealers subject to guidelines established
by the Trustees. The Adviser and Sub-Adviser may select brokers and dealers who
offer brokerage and research services. These services may be furnished directly
to the Funds or to the Adviser or Sub-Adviser and may include: advice as to the
advisability of investing in securities; security analysis and reports; economic
studies; industry studies; receipt of quotations for portfolio evaluations; and
similar services. Research services provided by brokers and dealers may be used
by the Adviser, Sub-Adviser or its affiliates in advising the Funds and other
accounts. To the extent that receipt of these services may supplant services for
which the Adviser, Sub-Adviser or its affiliates might otherwise have paid, it
would tend to reduce their expenses. The Adviser, Sub-Adviser and their
affiliates exercise reasonable business judgment in selecting brokers who offer
brokerage and research services to execute securities transactions. They
determine in good faith that commissions charged by such persons are reasonable
in relationship to the value of the brokerage and research services provided.
Although investment decisions for the Funds are made independently from those of
the other accounts managed by the Adviser or Sub-Adviser, investments of the
type the Funds may make may also be made by those other accounts. When a Fund
and one or more other accounts managed by the Adviser or Sub-Adviser are
prepared to invest in, or

S-36
<PAGE>
desire to dispose of, the same security, available investments or opportunities
for sales will be allocated in a manner believed by the Adviser or Sub-Adviser
to be equitable to each. In some cases, this procedure may adversely affect the
price paid or received by a Fund or the size of the position obtained or
disposed of by the Fund. In other cases, however, it is believed that
coordination and the ability to participate in volume transactions will be to
the benefit of the Fund.

For the fiscal year ended October 31, 1998, the following commissions were
paid on brokerage transactions, pursuant to an agreement or understanding, to
brokers because of research services provided by the brokers:

<TABLE>
<CAPTION>
TOTAL DOLLAR AMOUNT OF TOTAL DOLLAR AMOUNT OF TRANSACTIONS
BROKERAGE COMMISSIONS FOR INVOLVING DIRECTED BROKERAGE
FUND RESEARCH SERVICES COMMISSIONS FOR RESEARCH SERVICES
- ----------------------------------------------------- ----------------------------- -------------------------------------
<S> <C> <C>
Money Market Fund.................................... $ 0 $ 0
Tax-Free Money Market Fund........................... $ 0 $ 0
Bond Fund............................................ $ 0 $ 0
Equity Fund.......................................... $ 0 $ 0
</TABLE>

For the fiscal years indicated, the Funds paid the following brokerage
commissions:

<TABLE>
<CAPTION>
% OF TOTAL
% OF TOTAL BROKERAGE
BROKERAGE TRANSACTIONS
TOTAL $ AMOUNT OF BROKERAGE COMMISSIONS EFFECTED
PAID TO THE THROUGH
TOTAL $ AMOUNT OF BROKERAGE COMMISSIONS PAID TO AFFILIATED AFFILIATED AFFILIATED
COMMISSIONS PAID BROKERS BROKERS BROKERS
--------------------------------- ------------------------------- --------------- ---------------
FUND 1996 1997 1998 1996 1997 1998 1998 1998
- ----------------------------- --------- ---------- ---------- --------- --------- --------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Money Market................. N/A N/A $ 6,468 N/A N/A $ 6,468 0% 100%
Tax-Free Money Market Fund... N/A N/A N/A N/A N/A N/A N/A N/A
Bond Fund.................... N/A N/A $ 877.67 N/A N/A $ 878 100% 0%
Equity Fund * $ 332,823 $ 323,867 * $0 $ 1,058 0.32% 0%
</TABLE>

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

* An asterisk indicates that the Fund had not commenced operations as of the
period indicated.

"Regular brokers or dealers" of the Trust are the ten brokers or dealers
that, during the most recent fiscal year, (i) received the greatest dollar
amounts of brokerage commissions from the Trust's portfolio transactions, (ii)
engaged as principal in the largest dollar amounts of portfolio transactions of
the Trust, or (iii) sold the largest dollar amounts of the Trust's shares. On
October 31, 1998, the following Funds held securities of the Trust's "regular
brokers or dealers" as follows: the Bond Fund held repurchase agreements valued
at $1,810,818 at the fiscal year end with J.P. Morgan, Inc.; the Equity Fund
held repurchase agreements valued at $1,004,292 at the fiscal year end with
Morgan Stanley and the Money Market Fund held repurchase agreements valued at
$25,650,331 at the fiscal year end with J.P. Morgan, Inc.

DESCRIPTION OF SHARES

The Declaration of Trust authorizes the issuance of an unlimited number of
shares and classes of shares of the Funds each of which represents an equal
proportionate interest in that Fund with each other share. Shares are entitled
upon liquidation to a pro rata share in the net assets of the Funds.
Shareholders have no preemptive rights. The Declaration of Trust provides that
the Trustees of the Trust may create additional series of shares or classes of
series. All consideration received by the Trust for shares of any additional
series and all assets in which such consideration is invested would belong to
that series and would be subject to the liabilities related thereto. Share
certificates representing shares will not be issued.

S-37
<PAGE>
SHAREHOLDER LIABILITY

The Trust is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders of such a trust could,
under certain circumstances, be held personally liable as partners for the
obligations of the trust. Even if, however, the Trust were held to be a
partnership, the possibility of the Shareholders' incurring financial loss for
that reason appears remote because the Trust's Declaration of Trust contains an
express disclaimer of Shareholder liability for obligations of the Trust and
requires that notice of such disclaimer be given in each agreement, obligation
or instrument entered into or executed by or on behalf of the Trust or the
Trustees, and because the Declaration of Trust provides for indemnification out
of the Trust property for any Shareholder held personally liable for the
obligations of the Trust.

LIMITATION OF TRUSTEES' LIABILITY

The Declaration of Trust provides that a Trustee shall be liable only for
his own willful defaults and, if reasonable care has been exercised in the
selection of officers, agents, employees or investment advisers, shall not be
liable for any neglect or wrongdoing of any such person. The Declaration of
Trust also provides that the Trust will indemnify its Trustees and officers
against liabilities and expenses incurred in connection with actual or
threatened litigation in which they may be involved because of their offices
with the Trust unless it is determined in the manner provided in the Declaration
of Trust that they have not acted in good faith in the reasonable belief that
their actions were in the best interests of the Trust. However, nothing in the
Declaration of Trust shall protect or indemnify a Trustee against any liability
for his willful misfeasance, bad faith, gross negligence or reckless disregard
of his duties.

YEAR 2000

The Trust depends on the smooth functioning of computer systems in almost
every aspect of its business. Like other mutual funds, businesses and
individuals around the world, the Trust could be adversely affected if the
computer systems used by its service providers do not properly process dates on
and after January 1, 2000 and distinguish between the year 2000 and the year
1900. The Trust has asked its service providers whether they expect to have
their computer systems adjusted for the year 2000 transition, and received
assurances from each from each that its system is expected to accommodate the
year 2000 without material adverse consequences to the Trust. The Trust and its
shareholders may experience losses if these assurances prove to be incorrect or
as a result of year 2000 computer difficulties experienced by issuers of
portfolio securities or third parties, such as custodians, banks, broker-dealers
or others with which the Trust does business.

5% AND 25% SHAREHOLDERS

<TABLE>
<CAPTION>
% OF FUND
EXPEDITION BOND FUND--INSTITUTIONAL SHARES HELD
<S> <C>
Compass Bank 58.10%
Attn Trust Oper 3rd Level S
P.O. Box 10566
Birmingham, AL 35296-0001 (Account 1)
Compass Bank 39.49%
Attn Trust Oper 3rd Level S
P.O. Box 10566
Birmingham, AL 35296-0001 (Account 2)
</TABLE>

S-38
<PAGE>

<TABLE>
<CAPTION>
% OF FUND
EXPEDITION EQUITY FUND--CLASS A SHARES HELD
<S> <C>
Donaldson Lufkin Jenrette 8.25%
Securities Corporation Inc.
P.O. Box 2052
Jersey City, New Jersey 07303-2052 (Account 1)
Donaldson Lufkin Jenrette 5.73%
Securities Corporation Inc.
P.O. Box 2052
Jersey City, New Jersey 07303-2052 (Account 2)
<CAPTION>
% OF FUND
EXPEDITION EQUITY FUND--INSTITUTIONAL SHARES HELD
<S> <C>
Compass Bank 54.62%
Attn Trust Oper 3rd Level S
P.O. Box 10566
Birmingham, AL 35296-0001 (Account 1)
Compass Bank 35.80%
Attn Trust Oper 3rd Level S
P.O. Box 10566
Birmingham, AL 35296-0001 (Account 2)
Compass Bank Trustee for 6.89%
Compass Bancshares Inc. 401K Plan
c/o Benefit Services Corporation
1375 Peachtree Street NE Suite 300
Atlanta, GA 30309-3112
<CAPTION>
% OF FUND
EXPEDITION TAX-FREE MONEY MARKET FUND--INSTITUTIONAL SHARES HELD
<S> <C>
Compass Bank 100.00%
Attn Trust Oper 3rd Level S
P.O. Box 10566
Birmingham, AL 35296-0001 (Account 1)
<CAPTION>
% OF FUND
EXPEDITION TAX-FREE MONEY MARKET FUND--INVESTMENT SHARES HELD
<S> <C>
Compass Bank 99.51%
Attn Trust Oper 3rd Level S
P.O. Box 10566
Birmingham, AL 35296-0001 (Account 1)
<CAPTION>
% OF FUND
EXPEDITION MONEY MARKET FUND--INVESTMENT SHARES HELD
<S> <C>
Compass Bank 75.63%
Attn Trust Oper 3rd Level S
P.O. Box 10566
Birmingham, AL 35296-0001 (Account 1)
<CAPTION>
% OF FUND
EXPEDITION MONEY MARKET FUND--INSTITUTIONAL SHARES HELD
<S> <C>
Compass Bank 92.67%
Attn Trust Oper 3rd Level S
P.O. Box 10566
Birmingham, AL 35296-0001 (Account 1)
</TABLE>

S-39
<PAGE>
EXPERTS

The financial statements as of October 31, 1998 have been audited by
Deloitte & Touche LLP, Independent Auditors, as indicated in their report dated
October 31, 1998 with respect thereto, and are included herein in reliance upon
the authority of said firm as experts in giving said report.

S-40
<PAGE>
PART C: OTHER INFORMATION

ITEM 23. EXHIBITS:

<TABLE>
<S> <C>
(a)(1) Declaration of Trust is incorporated herein by reference to Registrant's
Post-Effective Amendment No. 22 on Form N-1A (File No. 33-30950) filed with
the Securities and Exchange Commission ("SEC") on December 29, 1995.
(a)(2) Amendment No. 1 to Declaration of Trust is incorporated herein by reference as
Exhibit (1)(i) to Registrant's Pre-Effective Amendment No. 1 on Form N-1A
(File No. 33-30950) filed with the SEC on November 16, 1989.
(a)(3) Amendment No. 2 to Declaration of Trust is incorporated herein by reference as
Exhibit (1)(ii) to Registrant's Post-Effective Amendment No. 1 on Form N-1A
(File No. 33-30950) filed with the SEC on May 21, 1990.
(a)(4) Amendment Nos. 3, 4, and 5 to Declaration of Trust are incorporated herein by
reference as Exhibit (1)(iii) to Registrant's Post-Effective Amendment No. 3
on Form N-1A (File No. 33-30950) filed with the SEC on September 11, 1991.
(a)(5) Amendment No. 6 to Declaration of Trust is incorporated herein by reference as
Exhibit (1)(iv) to Registrant's Post-Effective Amendment No. 5 on Form N-1A
(File No. 33-30950) filed with the SEC on February 14, 1992.
(a)(6) Amendment No. 7 to Declaration of Trust is incorporated herein by reference as
Exhibit (1)(v) to Registrant's Post-Effective Amendment No. 8 on Form N-1A
(File No. 33-30950) filed with the SEC on September 28, 1992.
(a)(7) Amendment Nos. 8 and 9 to Declaration of Trust are incorporated herein by
reference as Exhibit (1)(vi) to Registrant's Post-Effective Amendment No. 22
on Form N-1A (File No. 33-30950) filed with the SEC on December 29, 1995.
(a)(8) Amendment No. 10 to Declaration of Trust is incorporated herein by reference to
Registrant's Post-Effective Amendment No. 26 on Form N-1A filed with the SEC
on June 4, 1997.
(a)(9) Amendment No. 12 is incorporated herein by reference as Exhibit (1)(h) to
Registrants Post-Effective Amendment No. 28 on Form N-1A (File No. 33-30950)
filed with the SEC on January 15, 1998.
(a)(10) Amendment No. 13 is incorporated herein by reference as Exhibit (1)(i) to
Registrants Post-Effective Amendment No. 28 on Form N-1A (File No. 33-30950)
filed with the SEC on January 15, 1998.
(a)(11) Amendment No. 14 is incorporated herein by reference to Registrants
Post-Effective Amendment No. 30 on Form N-1A (File No. 33-30950) filed with
the SEC on September 16, 1998.
(a)(12) Specimen Certificate for Shares of Beneficial Interest of The Starburst
Government Income Fund is incorporated herein by reference as Exhibit (4)(i)
to Registrant's Post-Effective Amendment No. 22 on Form N-1A (File No.
33-30950) filed with the SEC on December 29, 1995.
(a)(13) Specimen Certificate for Shares of Beneficial Interest of The Starburst
Government Money Market Fund--Investment Shares is incorporated herein by
reference as Exhibit (4)(ii) to Registrant's Post-Effective Amendment No. 22
on Form N-1A (File No. 33-30950) filed with the SEC on December 29, 1995.
(a)(14) Specimen Certificate for Shares of Beneficial Interest of The Starburst
Government Money Market Fund--Trust Shares is incorporated herein by reference
as Exhibit (4)(iii) to Registrant's Post-Effective Amendment No. 22 on Form
N-1A (File No. 33-30950) filed with the SEC on December 29, 1995.
</TABLE>

C-1
<PAGE>

<TABLE>
<S> <C>
(a)(15) Specimen Certificate for Shares of Beneficial Interest of The Starburst Money
Market Fund--Investment Shares is incorporated herein by reference as Exhibit
(4)(iv) to Registrant's Post-Effective Amendment No. 22 on Form N-1A (File No.
33-30950) filed with the SEC on December 29, 1995.
(a)(16) Specimen Certificate for Shares of Beneficial Interest of The Starburst Money
Market Fund--Trust Shares is incorporated herein by reference as Exhibit
(4)(v) to Registrant's Post-Effective Amendment No. 22 on Form N-1A (File No.
33-30950) filed with the SEC on December 29, 1995.
(b) By-Laws are incorporated herein by reference to Registrant's Post-Effective
Amendment No. 22 on Form N-1A (File No. 33-30950) filed with the SEC on
December 29, 1995.
(c) Not Applicable
(d)(1) Investment Advisory Contract of the Registrant through and including Exhibit D
is incorporated herein by reference as Exhibit (5)(i) to Registrant's
Post-Effective Amendment No. 22 on Form N-1A (File No. 33-30950) filed with
the SEC on December 29, 1995.
(d)(2) Investment Management Contract of the Registrant through and including Exhibit A
is incorporated herein by reference as Exhibit (5)(ii) to Registrant's
Post-Effective Amendment No. 22 on Form N-1A (File No. 33-30950) filed with
the SEC on December 29, 1995.
(d)(3) Exhibit E to the Investment Advisory Contract of the Registrant relating to The
Expedition Equity Fund is incorporated herein by reference to Registrant's
Post-Effective Amendment No. 29 on Form N-1A (File No. 33-30950) filed with
the SEC on January 30, 1998.
(d)(4) Exhibit F to the Investment Advisory Contract of the Registrant relating to The
Expedition Tax-Free Money Market Fund is incorporated herein by reference to
Registrant's Post-Effective Amendment No. 30 on Form N-1A (File No. 33-30950)
filed with the SEC on September 16, 1998.
(d)(5) Investment Sub-Advisory Agreement between the Advisor and Weiss, Peck & Greer,
L.L.C. is incorporated herein by reference to Registrants Post-Effective
Amendment No. 31 on Form N-1A (File No. 33-30950) filed with the SEC on
December 29, 1998.
(e)(1) Distributor's Contract of the Registrant through and including Exhibit F is
incorporated herein by reference to Registrant's Post-Effective Amendment No.
22 on Form N-1A (File No. 33-30950) filed with the SEC on December 29, 1995.
(e)(2) Distribution Agreement with SEI Investments Distribution Co. is incorporated
herein by reference to Registrant's Post-Effective Amendment No. 29 on Form
N-1A (File No. 33-30950) filed with the SEC on January 30, 1998.
(f) Not applicable
(g) Custodian Agreement of the Registrant is incorporated herein by reference to
Registrant's Post-Effective Amendment No. 22 on Form N-1A (File No. 33-30950)
filed with the SEC on December 29, 1995.
(h)(1) Agreement for Fund Accounting, Shareholder Record keeping, and Custody Services
Procurement is incorporated herein by reference as Exhibit (9)(i) to
Registrant's Post-Effective Amendment No. 20 on Form N-1A (File No. 33-30950)
filed with the SEC on December 28, 1994.
(h)(2) Sales Agreement with Federated Securities Corp. is incorporated herein by
reference as Exhibit (9)(ii) to Registrant's Post-Effective Amendment No. 17
on Form N-1A (File No. 33-30950) filed with the SEC on August 3, 1994.
(h)(3) Electronic Communications and Record keeping Agreement is incorporated herein by
reference as Exhibit (9)(iii) to Registrant's Post-Effective Amendment No. 17
on Form N-1A (File No. 33-30950) filed with the SEC on August 3, 1994.
</TABLE>

C-2
<PAGE>

<TABLE>
<S> <C>
(h)(4) Administration Agreement with SEI Fund Resources is incorporated herein by
reference to Registrant's Post-Effective Amendment No. 29 on Form N-1A (File
No. 33-30950) filed with the SEC on January 30, 1998.
(h)(5) Shareholder Service Plan and Agreement as it relates to the Investment Service
Shares is incorporated herein by reference to Registrant's Post-Effective
Amendment No. 29 on Form N-1A (File No. 33-30950) filed with the SEC on
January 30, 1998.
(i) Opinion and Consent of Counsel is incorporated herein by reference to
Registrant's Post-Effective Amendment No. 20 on Form N-1A (File No. 33-30950)
filed with the SEC on December 28, 1994.
(j) Consent of the Independent Auditors is filed herewith.
(k) Not applicable.
(l) Initial Capital Understanding is incorporated herein by reference to
Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File No. 33-30950)
filed with the SEC on November 16, 1989.
(m)(1) Distribution Plan through and including Exhibit G is incorporated herein by
reference as Exhibit (15)(i) to Registrant's Post-Effective Amendment No. 22
on Form N-1A (File No. 33-30950) filed with the SEC on December 29, 1995.
(m)(2) Form of 12b-1 Agreement is incorporated herein by reference as Exhibit (15)(ii)
to Registrant's Post-Effective Amendment No. 24 on Form N-1A (File No.
33-30950) filed with the SEC on December 27, 1996.
(m)(3) Amended and Restated Distribution Plan is incorporated herein by reference to
Registrant's Post-Effective Amendment No. 26 on Form N-1A filed with the SEC
on June 4, 1997.
(m)(4) Distribution and Service Plan for the Class B Shares dated May 18, 1998 is
incorporated herein by reference to Registrants Post-Effective Amendment No.
30 on Form N-1A (File No. 33-30950) filed with the SEC on September 16, 1998.
(n) The Financial Data Schedules are filed herewith.
(o)(1) Multiple Class Plan of the Registrant is incorporated herein by reference to
Registrant's Post-Effective Amendment No. 24 on Form N-1A (File No. 33-30950)
filed with the SEC on December 27, 1996.
(o)(2) Rule 18f-3 Multiple Class Plan of May, 1998 is incorporated herein by reference
to Registant's Post-Effective Amendment No. 30 on Form N-1A (File No.
33-30950) filed with the SEC on September 16, 1998.
(p) Powers of Attorney for Dr. Robert A. Patterson, Eugene B. Peters, Frank E.
Morris, Robert A. Nesher, William M. Doran, James M. Storey, John T. Cooney
and Mark E. Nagle are incorporated herein by reference to Registrants
Post-Effective Amendment No. 30 on Form N-1A (File No. 33-30950) filed with
the SEC on September 16, 1998.
</TABLE>

ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT:

See the Statement of Additional Information regarding the Trust's control
relationships. The Administrator is a subsidiary of SEI Investments Company
which also controls the distributor of the Registrant (SEI Investments
Distribution Co.) and other corporations engaged in providing various financial
and record keeping services, primarily to bank trust departments, pension plan
sponsors and investment managers.

ITEM 25. INDEMNIFICATION:

Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 2 on Form N-1A filed May 23, 1990. (File No. 33-30950).

C-3
<PAGE>
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISOR:

For a description of the other business of Compass Bank, the investment
adviser, see the section entitled "Management of the Fund" in Part A.

The Executive Officers of the investment adviser are:

<TABLE>
<CAPTION>
OTHER SUBSTANTIAL
BUSINESS, PROFESSION,
NAME POSITION WITH THE ADVISER VOCATION, EMPLOYMENT
- ------------------------------ ---------------------------------------- ----------------------------------------
<S> <C> <C>
D. Paul Jones, Jr. Chairman, President, Chief Executive Chairman, Chief Executive Officer,
Officer, Treasurer and Director Treasurer and Director of Compass
Bancshares, Inc.; Director of Golden
Enterprises, Inc. (snack food and
metal fastener production and
distribution), the principal business
address of which is 110 South Sixth
Street, Birmingham, Alabama 35205
E. Lee Harris, Jr. Executive Vice President, Executive
Officer, Human Resources
Garrett R. Hegel Chief Financial Officer Chief Financial Officer of Compass
Bancshares, Inc.
Jerry W. Powell General Counsel and Secretary General Counsel of Compass Bancshares,
Inc.
G. Ray Stone Senior Executive Vice President, Chief Credit Policy
Officer
Byrd Williams Group Executive Vice President, Chief Executive Vice President of Compass
Retail Banking Executive Bancshares, Inc.
Michael A. Bean Executive Vice President, Controller
Christina L. Boles Executive Vice President, Asset and
Liability Management
Eugene C. Boles Executive Vice President, Loan
Administration
Ralph H. Cassell Executive Vice President, Regional
Executive, Community Banking
D. Stevenson Ferguson, Jr. Executive Vice President, Asset
Management
James G. Heslop Executive Vice President, Metro Alabama,
Retail Banking
Thomas E. Lazenby Executive Vice President, Consumer
Finance
Robert S. McKean Executive Vice President, Regional
Executive, Community Banking
John C. Neiman Executive Vice President, National
Industries
Dewey A. White, III Executive Vice President, Correspondent
and Investment Services
David N. Wright Executive Vice President, Southern
Region Executive
</TABLE>

C-4
<PAGE>
The business address for each of the above-listed persons is 15 South 20th
Street, Birmingham, Alabama 35233.

The principal business address of Compass Bank, Compass Bancshares, Inc. and
Compass Bancshares Insurance, Inc. is 15 South 20th Street, Birmingham, Alabama
35233.

DIRECTORS:

<TABLE>
<CAPTION>
NAME OTHER SUBSTANTIAL BUSINESS, PROFESSION, VOCATION OR EMPLOYMENT
- ------------------------------- ---------------------------------------------------------------------------------
<S> <C>
Charles W. Daniel President, Dantract, Inc. (real estate investments), Suite 100, 200 Office Park
Drive, Birmingham, Alabama 35223.
William Eugene Davenport President and Chief Operating Officer of Russell Lands, Inc. (real estate
development), 1 Willowpoint Road, Alexander City, Alabama 35010.
Marshall Durbin, Jr. President of Marshall Durbin & Company, Inc. (poultry processing), 3125
Independence Drive, Birmingham, Alabama 35209.
Tranum Fitzpatrick Chairman of Guilford Company, Inc. (real estate development), President of
Guilford Capital (real estate investment) and President of Empire-Rouse (real
estate development) 2600 East South Boulevard, Montgomery, Alabama 36116.
George W. Hansberry, M.D. Decatur General Hospital (medical services provider) P.O. Box 2239, Decatur,
Alabama 35609-2239 and Parkway Medical Center (medical services provider) P.O.
Box 2211, Decatur, Alabama 35609-2211.
D. Paul Jones, Jr. Chairman, Chief Executive Officer and Treasurer of Compass Bancshares, Inc. and
Compass Bank; President of Compass Bank; Director of Golden Enterprises, Inc.
(snack food distribution), 110 South Sixth Street, Birmingham, Alabama 35205.
Goodwin L. Myrick President and Chairman, Alabama Farmers Federation, ALFA Corporation, ALFA
Insurance Companies and ALFA Services, Inc. (agriculture and insurance), the
principal address of each of which is 2108 East South Boulevard, Montgomery,
Alabama 36116.
John S. Stein President and Chief Executive Officer of Golden Foods, Inc. (snack food
distribution), 110 South Sixth Street, Birmingham, Alabama 35205.
</TABLE>

All of the members of the Compass Bank Board of Directors are also members
of the Board of Directors of Compass Bancshares, Inc.

C-5
<PAGE>
ITEM 27. PRINCIPAL UNDERWRITERS:

(a) Furnish the name of each investment company (other than the Registrant)
for which each principal underwriter currently distributing the securities of
the Registrant also acts as a principal underwriter, distributor or investment
advisor.

Registrant's distributor, SEI Investments Distribution Co. (the
"Distributor"), acts as distributor for:

SEI Daily Income Trust July 15, 1982
SEI Liquid Asset Trust November 29, 1982
SEI Tax Exempt Trust December 3, 1982
SEI Index Funds July 10, 1985
SEI Institutional Managed Trust January 22, 1987
SEI Institutional International Trust August 30, 1988
The Advisors' Inner Circle Fund November 14, 1991
The Pillar Funds February 28, 1992
CUFUND May 1, 1992
STI Classic Funds May 29, 1992
First American Funds, Inc. November 1, 1992
First American Investment Funds, Inc. November 1, 1992
The Arbor Fund January 28, 1993
Boston 1784 Funds-Registered Trademark- June 1, 1993
The PBHG Funds, Inc. July 16, 1993
Morgan Grenfell Investment Trust January 3, 1994
The Achievement Funds Trust December 27, 1994
Bishop Street Funds January 27, 1995
CrestFunds, Inc. March 1, 1995
STI Classic Variable Trust August 18, 1995
ARK Funds November 1, 1995
Huntington Funds January 11, 1996
SEI Asset Allocation Trust April 1, 1996
TIP Funds April 28, 1996
SEI Institutional Investments Trust June 14, 1996
First American Strategy Funds, Inc. October 1, 1996
HighMark Funds February 15, 1997
Armada Funds March 8, 1997
PBHG Insurance Series Fund, Inc. April 1, 1997
Alpha Select Funds January 1, 1998
Oak Associates Funds February 27, 1998
The Nevis Funds June 29, 1998
The Parkstone Group of Funds September 14, 1998

The Distributor provides numerous financial services to investment managers,
pension plan sponsors, and bank trust departments. These services include
portfolio evaluation, performance measurement and consulting services
("Funds Evaluation") and automated execution, clearing and settlement of
securities transactions ("MarketLink").

C-6
<PAGE>
(b) Furnish the Information required by the following table with respect to
each director, officer or partner of each principal underwriter named in the
answer to Item 21 of Part B. Unless otherwise noted, the business address of
each director or officer is Oaks, PA 19456.

<TABLE>
<CAPTION>
POSITION AND OFFICES POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
- ------------------------------- ------------------------------------------------------ ------------------------
<S> <C> <C>
Alfred P. West, Jr. Director, Chairman of the Board of Directors --

Henry H. Greer Director --

Carmen V. Romeo Director --

Mark J. Held President & Chief Operating Officer --

Gilbert L. Beebower Executive Vice President --

Richard B. Lieb Executive Vice President --

Dennis J. McGonigle Executive Vice President --

Robert M. Silvestri Chief Financial Officer & Treasurer --

Leo J. Dolan, Jr. Senior Vice President --

Carl A. Guarino Senior Vice President --

Larry Hutchison Senior Vice President --

Jack May Senior Vice President --

Hartland J. McKeown Senior Vice President --

Barbara J. Moore Senior Vice President --

Kevin P. Robins Senior Vice President & General Counsel Vice President &
Assistant Secretary

Patrick K. Walsh Senior Vice President --

Robert Aller Vice President --

Gordon W. Carpenter Vice President --

Todd Cipperman Vice President & Assistant Secretary Vice President &
Assistant Secretary

S. Courtney E. Collier Vice President & Assistant Secretary --

Robert Crudup Vice President & Managing Director --

Barbara Doyne Vice President --

Jeff Drennen Vice President --

Vic Galef Vice President & Managing Director --

Lydia A. Gavalis Vice President & Assistant Secretary Vice President &
Assistant Secretary

Greg Gettinger Vice President & Assistant Secretary --

Kathy Heilig Vice President Vice President &
Assistant Secretary

Jeff Jacobs Vice President --

Samuel King Vice President --

Kim Kirk Vice President & Managing Director --

John Krzeminski Vice President & Managing Director --

Carolyn McLaurin Vice President & Managing Director --
</TABLE>

C-7
<PAGE>

Mark Nagle Vice President President

Joanne Nelson Vice President --

Joseph M. O'Donnell Vice President & Assistant Secretary Vice President &
Assistant Secretary

Sandra K. Orlow Vice President & Secretary Vice President &
Assistant Secretary

Cynthia M. Parrish Vice President & Assistant Secretary --

Kim Rainey Vice President --

Rob Redican Vice President --

Maria Rinehart Vice President --

Mark Samuels Vice President & Managing Director --

Steve Smith Vice President --

Daniel Spaventa Vice President --

Kathryn L. Stanton Vice President & Assistant Secretary Vice President &
Assistant Secretary

Lynda J. Striegel Vice President & Assistant Secretary Vice President &
Assistant Secretary

Lori L. White Vice President & Assistant Secretary --

Wayne M. Withrow Vice President & Managing Director --
</TABLE>

ITEM 28. LOCATION OF ACCOUNTS AND RECORDS:

Books or other documents required to be maintained by Section 31(a) of the
Investment Company Act of 1940, as amended (the "1940 Act"), and the rules
promulgated thereunder, are maintained as follows:

(a) With respect to Rules 31a-1(a); 31a-1(b)(1); (2)(a) and (b); (3);
(6); (8); (12); and 31a-1(d), the required books and records are maintained
at the offices of the Portfolios' Custodian:

Compass Bank
701 S. 32nd Street
Birmingham, AL 35233

(b)/(c) With respect to Rules 31a-1(a); 31a-1(b)(1), (4); (2)(C) and
(D); (4); (5); (6); (8); (9); (10); (11); and 31a-1(f), the required books
and records are maintained at the offices of Registrant's Administrator:

SEI Investments Mutual Funds Services
Oaks, PA 19456

C-8
<PAGE>
(d) With respect to Rules 31a-(b)(5); (6), (9) and (10) and 31a-1(f),
the required books and records are maintained at the offices of Registrant's
Advisors:

Compass Bank
701 S. 32nd Street
Birmingham, AL 35233
Weiss, Peck & Greer, L.L.C.
One New York Plaza
New York, New York 10004

ITEM 29. MANAGEMENT SERVICES:

None.

ITEM 30. UNDERTAKINGS:

Registrant hereby undertakes to comply with the provisions of Section 16(c)
of the 1940 Act with respect to the removal of Trustees and the calling of
special shareholder meetings by shareholders.

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

NOTICE

A copy of the Declaration of Trust of The Expedition Funds is on file with
the Secretary of State of the Commonwealth of Massachusetts and notice is hereby
given that this Registration Statement has been executed on behalf of the Trust
by an officer of the Trust as an officer and by its Trustees as trustees and not
individually and the obligations of or arising out of this Registration
Statement are not binding upon any of the Trustees, officers, or shareholders
individually but are binding only upon the assets and property of the Trust.

C-9
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, and
the Investment Company Act of 1940, as amended, the Registrant has duly caused
this Post-Effective Amendment No. 32 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Oaks, Commonwealth of
Pennsylvania on the 26th day of February, 1999.

THE EXPEDITION FUNDS

By: /s/ MARK E. NAGLE
-----------------------------------------
Mark E. Nagle
PRESIDENT

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacity on the dates indicated.

*
- ------------------------------ Trustee February 26, 1999
William M. Doran

*
- ------------------------------ Trustee February 26, 1999
Dr. Robert A. Patterson

*
- ------------------------------ Trustee February 26, 1999
Frank E. Morris

*
- ------------------------------ Trustee February 26, 1999
Robert A. Nesher

*
- ------------------------------ Trustee February 26, 1999
James M. Storey

*
- ------------------------------ Trustee February 26, 1999
Eugene B. Peters

*
- ------------------------------ Trustee February 26, 1999
John T. Cooney

/s/ MARK E. NAGLE
- ------------------------------ President February 26, 1999
Mark E. Nagle

/s/ ROBERT J. DELLACROCE
- ------------------------------ Controller & Chief February 26, 1999
Robert J. DellaCroce Financial Officer

*By: /s/ MARK E. NAGLE
-------------------------
Mark E. Nagle
ATTORNEY IN FACT

C-10
<PAGE>
EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
- -------------------- ---------------------------------------------------------------------------------------------
<S> <C>
EX-99.A1 Declaration of Trust is incorporated herein by reference to Registrant's Post-Effective
Amendment No. 22 on Form N-1A (File No. 33-30950) filed with the Securities and Exchange
Commission ("SEC") on December 29, 1995.
EX-99.A2 Amendment No. 1 to Declaration of Trust is incorporated herein by reference as Exhibit (1)(i)
to Registrant's Pre-Effective Amendment No. 1 on Form N-1A (File No. 33-30950) filed with
the SEC on November 16, 1989.
EX-99.A3 Amendment No. 2 to Declaration of Trust is incorporated herein by reference as Exhibit
(1)(ii) to Registrant's Post-Effective Amendment No. 1 on Form N-1A (File No. 33-30950)
filed with the SEC on May 21, 1990.
EX-99.A4 Amendment Nos. 3, 4, and 5 to Declaration of Trust are incorporated herein by reference as
Exhibit (1)(iii) to Registrant's Post-Effective Amendment No. 3 on Form N-1A (File No.
33-30950) filed with the SEC on September 11, 1991.
EX-99.A5 Amendment No. 6 to Declaration of Trust is incorporated herein by reference as Exhibit
(1)(iv) to Registrant's Post-Effective Amendment No. 5 on Form N-1A (File No. 33-30950)
filed with the SEC on February 14, 1992.
EX-99.A6 Amendment No. 7 to Declaration of Trust is incorporated herein by reference as Exhibit (1)(v)
to Registrant's Post-Effective Amendment No. 8 on Form N-1A (File No. 33-30950) filed with
the SEC on September 28, 1992.
EX-99.A7 Amendment Nos. 8 and 9 to Declaration of Trust are incorporated herein by reference as
Exhibit (1)(vi) to Registrant's Post-Effective Amendment No. 22 on Form N-1A (File No.
33-30950) filed with the SEC on December 29, 1995.
EX-99.A8 Amendment No. 10 to Declaration of Trust is incorporated herein by reference to Registrant's
Post-Effective Amendment No. 26 on Form N-1A filed with the SEC on June 4, 1997.
EX-99.A9 Amendment No. 12 is incorporated herein by reference as Exhibit (1)(h) to Registrants
Post-Effective Amendment No. 28 on Form N-1A (File No. 33-30950) filed with the SEC on
January 15, 1998.
EX-99.A10 Amendment No. 13 is incorporated herein by reference as Exhibit (1)(i) to Registrants
Post-Effective Amendment No. 28 on Form N-1A (File No. 33-30950) filed with the SEC on
January 15, 1998.
EX-99.A11 Amendment No. 14 is incorporated herein by reference to Registrants Post-Effective Amendment
No. 30 on Form N-1A (File No. 33-30950) filed with the SEC on September 16, 1998.
EX-99.A12 Specimen Certificate for Shares of Beneficial Interest of The Starburst Government Income
Fund is incorporated herein by reference as Exhibit (4)(i) to Registrant's Post-Effective
Amendment No. 22 on Form N-1A (File No. 33-30950) filed with the SEC on December 29, 1995.
EX-99.A13 Specimen Certificate for Shares of Beneficial Interest of The Starburst Government Money
Market Fund--Investment Shares is incorporated herein by reference as Exhibit (4)(ii) to
Registrant's Post-Effective Amendment No. 22 on Form N-1A (File No. 33-30950) filed with
the SEC on December 29, 1995.
EX-99.A14 Specimen Certificate for Shares of Beneficial Interest of The Starburst Government Money
Market Fund--Trust Shares is incorporated herein by reference as Exhibit (4)(iii) to
Registrant's Post-Effective Amendment No. 22 on Form N-1A (File No. 33-30950) filed with
the SEC on December 29, 1995.
EX-99.A15 Specimen Certificate for Shares of Beneficial Interest of The Starburst Money Market
Fund--Investment Shares is incorporated herein by reference as Exhibit (4)(iv) to
Registrant's Post-Effective Amendment No. 22 on Form N-1A (File No. 33-30950) filed with
the SEC on December 29, 1995.
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
- -------------------- ---------------------------------------------------------------------------------------------
<S> <C>
EX-99.A16 Specimen Certificate for Shares of Beneficial Interest of The Starburst Money Market
Fund--Trust Shares is incorporated herein by reference as Exhibit (4)(v) to Registrant's
Post-Effective Amendment No. 22 on Form N-1A (File No. 33-30950) filed with the SEC on
December 29, 1995.
EX-99.B By-Laws are incorporated herein by reference to Registrant's Post-Effective Amendment No. 22
on Form N-1A (File No. 33-30950) filed with the SEC on December 29, 1995.
EX-99.C Not Applicable.
EX-99.D1 Investment Advisory Contract of the Registrant through and including Exhibit D is
incorporated herein by reference as Exhibit (5)(i) to Registrant's Post-Effective Amendment
No. 22 on Form N-1A (File No. 33-30950) filed with the SEC on December 29, 1995.
EX-99.D2 Investment Management Contract of the Registrant through and including Exhibit A is
incorporated herein by reference as Exhibit (5)(ii) to Registrant's Post-Effective
Amendment No. 22 on Form N-1A (File No. 33-30950) filed with the SEC on December 29, 1995.
EX-99.D3 Exhibit E to the Investment Advisory Contract relating to The Expedition Equity Fund is
incorporated herein by reference to Registrant's Post-Effective Amendment No. 29 on Form
N-1A (File No. 33-30950) filed with the SEC on January 30, 1998.
EX-99.D4 Exhibit F to the Investment Advisory Contract of the Registrant relating to The Expedition
Tax-Free Money Market Fund is incorporated herein by reference to Registrant's
Post-Effective Amendment No. 30 on Form N-1A (File No. 33-30950) filed with the SEC on
September 16, 1998.
EX-99.D5 Investment Sub-Advisory Agreement between the Adviser and Weiss, Peck & Greer, L.L.C. is
incorporated herein by reference to Registrant's Post-Effective Amendment No. 31 on Form
N-1A (File No. 33-30950) filed with the SEC on December 29, 1998.
EX-99.E1 Distributor's Contract of the Registrant through and including Exhibit F is incorporated
herein by reference to Registrant's Post-Effective Amendment No. 22 on Form N-1A (File No.
33-30950) filed with the SEC on December 29, 1995.
EX-99.E2 Distribution Agreement with SEI Investments Distribution Co. is incorporated herein by
reference to Registrant's Post-Effective Amendment No. 29 on Form N-1A (File No. 33-30950)
filed with the SEC on January 30, 1998.
EX-99.F Not applicable
EX-99.G Custodian Agreement of the Registrant is incorporated herein by reference to Registrant's
Post-Effective Amendment No. 22 on Form N-1A (File No. 33-30950) filed with the SEC on
December 29, 1995.
EX-99.H1 Agreement for Fund Accounting, Shareholder Record keeping, and Custody Services Procurement
is incorporated herein by reference as Exhibit (9)(i) to Registrant's Post-Effective
Amendment No. 20 on Form N-1A (File No. 33-30950) filed with the SEC on December 28, 1994.
EX-99.H2 Sales Agreement with Federated Securities Corp. is incorporated herein by reference as
Exhibit (9)(ii) to Registrant's Post-Effective Amendment No. 17 on Form N-1A (File No.
33-30950) filed with the SEC on August 3, 1994.
EX-99.H3 Electronic Communications and Record keeping Agreement is incorporated herein by reference as
Exhibit (9)(iii) to Registrant's Post-Effective Amendment No. 17 on Form N-1A (File No.
33-30950) filed with the SEC on August 3, 1994.
EX-99.H4 Administration Agreement with SEI Fund Resources is incorporated herein by reference to
Registrant's Post-Effective Amendment No. 29 on Form N-1A (File No. 33-30950) filed with
the SEC on January 30, 1998.
EX-99.H5 Shareholder Service Plan and Agreement as it related to the Investment Service Shares is
incorporated herein by reference to Registrant's Post-Effective Amendment No. 29 on Form
N-1A (File No. 33-30950) filed with the SEC on January 30, 1998.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
- -------------------- ---------------------------------------------------------------------------------------------
<S> <C>
EX-99.I Opinion and Consent of Counsel is incorporated herein by reference to Registrant's
Post-Effective Amendment No. 20 on Form N-1A (File No. 33-30950) filed with the SEC on
December 28, 1994.
EX-99.J Consent of the Independent Auditors is filed herewith.
EX-99.K Not applicable
EX-99.L Initial Capital Understanding is incorporated herein by reference to Registrant's Pre-
Effective Amendment No. 1 on Form N-1A (File No. 33-30950) filed with the SEC on November
16, 1989.
EX-99.M1 Distribution Plan through and including Exhibit G is incorporated herein by reference as
Exhibit (15)(i) to Registrant's Post-Effective Amendment No. 22 on Form N-1A (File No.
33-30950) filed with the SEC on December 29, 1995.
EX-99.M2 Form of 12b-1 Agreement is incorporated herein by reference as Exhibit (15)(ii) to
Registrant's Post-Effective Amendment No. 24 on Form N-1A (File No. 33-30950) filed with
the SEC on December 27, 1996.
EX-99.M3 Amended and Restated Distribution Plan is incorporated herein by reference to Registrant's
Post-Effective Amendment No. 26 on form N-1A filed with the SEC on June 4, 1997.
EX-99.M4 Distribution and Service Plan for the Class B Shares dated May 18, 1998 is filed herewith.
EX-99.N The Financial Data Schedules are filed herewith.
EX-99.O(1) Multiple Class Plan of the Registrant is incorporated herein by reference to Registrant's
Post-Effective Amendment No. 24 on Form N-1A (File No. 33-30950) filed with the SEC on
December 27, 1996.
EX-99.O(2) Rule 18f-3 Multiple Class Plan of May, 1998 is incorporated herein by reference to
Registrant's Post-Effective Amendment No. 30 on Form N-1A (File No. 33-30950) filed with
the SEC on September 16, 1998.
EX-99.P Powers of Attorney for Dr. Robert A. Patterson, Eugene B. Peters, Frank E. Morris, Robert A.
Nesher, William M. Doran, James M. Storey, John T. Cooney and Mark E. Nagle are
incorporated herein by reference to Registrants Post-Effective Amendment No. 30 on Form
N-1A (File No. 33-30950) filed with the SEC on September 16, 1998.
</TABLE>

<PAGE>

CONSENT OF INDEPENDENT AUDITORS

THE EXPEDITION FUNDS:

We consent to the incorporation by reference in Post-Effective Amendment No. 32
to Registration Statement No. 33-30950 of our report dated December 3, 1998
appearing in the Annual Report to Shareholders-October 31, 1998 and to the
references to us under the captions "Experts" appearing in Statement of
Additional Information, which is a part of such Registration Statements and
"Financial Highlights" appearing in the Prospectus, which also is a part of such
Registration Statement.

/s/ Deloitte & Touche LLP

DELOITTE & TOUCHE LLP
Princeton, New Jersey
February 26, 1999

<PAGE>
<ARTICLE> 6
<CIK> 0000854850
<NAME> EXPEDITION FUNDS
<SERIES>
<NUMBER> 020
<NAME> MONEY MARKET INSTITUTIONAL SERVICES
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> NOV-01-1997
<PERIOD-END> OCT-31-1998
<INVESTMENTS-AT-COST> 246731
<INVESTMENTS-AT-VALUE> 246731
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 246731
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1122
<TOTAL-LIABILITIES> 1122
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 245607
<SHARES-COMMON-STOCK> 102697
<SHARES-COMMON-PRIOR> 48006
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (1)
<ACCUMULATED-NET-GAINS> 3
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 245609
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 10310
<OTHER-INCOME> 0
<EXPENSES-NET> (1129)
<NET-INVESTMENT-INCOME> 9181
<REALIZED-GAINS-CURRENT> 7
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 9188
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2424
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 177765
<NUMBER-OF-SHARES-REDEEMED> (123149)
<SHARES-REINVESTED> 75
<NET-CHANGE-IN-ASSETS> 54693
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 733
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1633
<AVERAGE-NET-ASSETS> 181024
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .05
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.05)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .43
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<CIK> 0000854850
<NAME> EXPEDITION FUNDS
<SERIES>
<NUMBER> 021
<NAME> MONEY MARKET INVESTOR SERVICES
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> NOV-01-1997
<PERIOD-END> OCT-31-1998
<INVESTMENTS-AT-COST> 246731
<INVESTMENTS-AT-VALUE> 246731
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 246731
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1122
<TOTAL-LIABILITIES> 1122
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 245607
<SHARES-COMMON-STOCK> 142910
<SHARES-COMMON-PRIOR> 147655
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 3
<ACCUMULATED-NET-GAINS> 70
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 245609
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 10310
<OTHER-INCOME> 0
<EXPENSES-NET> (1129)
<NET-INVESTMENT-INCOME> 9181
<REALIZED-GAINS-CURRENT> 7
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 9188
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 6758
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 578112
<NUMBER-OF-SHARES-REDEEMED> (584475)
<SHARES-REINVESTED> 1618
<NET-CHANGE-IN-ASSETS> (4741)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 733
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1633
<AVERAGE-NET-ASSETS> 181024
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .05
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.05)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .68
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<CIK> 0000854850
<NAME> EXPEDITION FUNDS
<SERIES>
<NUMBER> 040
<NAME> BOND INSTITUTIONAL
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> NOV-01-1997
<PERIOD-END> OCT-31-1998
<INVESTMENTS-AT-COST> 109646
<INVESTMENTS-AT-VALUE> 114157
<RECEIVABLES> 0
<ASSETS-OTHER> 1142
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 115299
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 114364
<SHARES-COMMON-STOCK> 10337
<SHARES-COMMON-PRIOR> 10275
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (8)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (3568)
<ACCUM-APPREC-OR-DEPREC> 4511
<NET-ASSETS> 115299
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 7057
<OTHER-INCOME> 0
<EXPENSES-NET> (1118)
<NET-INVESTMENT-INCOME> 5939
<REALIZED-GAINS-CURRENT> 544
<APPREC-INCREASE-CURRENT> 2966
<NET-CHANGE-FROM-OPS> 9449
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (5215)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 21515
<NUMBER-OF-SHARES-REDEEMED> (22835)
<SHARES-REINVESTED> 1945
<NET-CHANGE-IN-ASSETS> 3729
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (3)
<OVERDIST-NET-GAINS-PRIOR> (4112)
<GROSS-ADVISORY-FEES> 875
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1118
<AVERAGE-NET-ASSETS> 116699
<PER-SHARE-NAV-BEGIN> 9.85
<PER-SHARE-NII> .51
<PER-SHARE-GAIN-APPREC> .30
<PER-SHARE-DIVIDEND> (.51)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.15
<EXPENSE-RATIO> .94
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<CIK> 0000854850
<NAME> EXPEDITION FUNDS
<SERIES>
<NUMBER> 041
<NAME> BOND CLASS 2
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> NOV-01-1997
<PERIOD-END> OCT-31-1998
<INVESTMENTS-AT-COST> 109646
<INVESTMENTS-AT-VALUE> 114157
<RECEIVABLES> 0
<ASSETS-OTHER> 1142
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 115299
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 114364
<SHARES-COMMON-STOCK> 1020
<SHARES-COMMON-PRIOR> 2399
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (8)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (3568)
<ACCUM-APPREC-OR-DEPREC> 4511
<NET-ASSETS> 115299
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 7057
<OTHER-INCOME> 0
<EXPENSES-NET> (1118)
<NET-INVESTMENT-INCOME> 5939
<REALIZED-GAINS-CURRENT> 544
<APPREC-INCREASE-CURRENT> 2966
<NET-CHANGE-FROM-OPS> 9449
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (729)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 62
<NUMBER-OF-SHARES-REDEEMED> (14136)
<SHARES-REINVESTED> 389
<NET-CHANGE-IN-ASSETS> (13284)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (3)
<OVERDIST-NET-GAINS-PRIOR> (4112)
<GROSS-ADVISORY-FEES> 875
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1118
<AVERAGE-NET-ASSETS> 116699
<PER-SHARE-NAV-BEGIN> 9.85
<PER-SHARE-NII> .49
<PER-SHARE-GAIN-APPREC> .30
<PER-SHARE-DIVIDEND> (.49)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.15
<EXPENSE-RATIO> 1.10
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<CIK> 0000854850
<NAME> EXPEDITION FUNDS
<SERIES>
<NUMBER> 050
<NAME> EQUITY INSTITUTIONAL
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> NOV-01-1997
<PERIOD-END> OCT-31-1998
<INVESTMENTS-AT-COST> 244294
<INVESTMENTS-AT-VALUE> 284247
<RECEIVABLES> 0
<ASSETS-OTHER> 834
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 285081
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 229443
<SHARES-COMMON-STOCK> 26829
<SHARES-COMMON-PRIOR> 25303
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 33
<ACCUMULATED-NET-GAINS> 15718
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 39953
<NET-ASSETS> 285081
<DIVIDEND-INCOME> 3887
<INTEREST-INCOME> 153
<OTHER-INCOME> 0
<EXPENSES-NET> (2900)
<NET-INVESTMENT-INCOME> 1140
<REALIZED-GAINS-CURRENT> 16144
<APPREC-INCREASE-CURRENT> 28082
<NET-CHANGE-FROM-OPS> 45366
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1525)
<DISTRIBUTIONS-OF-GAINS> (12889)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 70889
<NUMBER-OF-SHARES-REDEEMED> (58339)
<SHARES-REINVESTED> 246
<NET-CHANGE-IN-ASSETS> 45603
<ACCUMULATED-NII-PRIOR> 124
<ACCUMULATED-GAINS-PRIOR> 12691
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2076
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2900
<AVERAGE-NET-ASSETS> 276936
<PER-SHARE-NAV-BEGIN> 9.39
<PER-SHARE-NII> .06
<PER-SHARE-GAIN-APPREC> 1.67
<PER-SHARE-DIVIDEND> (.06)
<PER-SHARE-DISTRIBUTIONS> (.51)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.55
<EXPENSE-RATIO> 1.08
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<CIK> 0000854850
<NAME> EXPEDITION FUNDS
<SERIES>
<NUMBER> 051
<NAME> EQUITY CLASS 2
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> NOV-01-1997
<PERIOD-END> OCT-31-1998
<INVESTMENTS-AT-COST> 244294
<INVESTMENTS-AT-VALUE> 284247
<RECEIVABLES> 0
<ASSETS-OTHER> 834
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 285081
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 229443
<SHARES-COMMON-STOCK> 181
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 33
<ACCUMULATED-NET-GAINS> 15718
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 39953
<NET-ASSETS> 285081
<DIVIDEND-INCOME> 3887
<INTEREST-INCOME> 153
<OTHER-INCOME> 0
<EXPENSES-NET> (2900)
<NET-INVESTMENT-INCOME> 1140
<REALIZED-GAINS-CURRENT> 16144
<APPREC-INCREASE-CURRENT> 28082
<NET-CHANGE-FROM-OPS> 45366
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1846
<NUMBER-OF-SHARES-REDEEMED> (81)
<SHARES-REINVESTED> 1
<NET-CHANGE-IN-ASSETS> 1911
<ACCUMULATED-NII-PRIOR> 124
<ACCUMULATED-GAINS-PRIOR> 12691
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2076
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 276936
<PER-SHARE-NAV-BEGIN> 9.65
<PER-SHARE-NII> .04
<PER-SHARE-GAIN-APPREC> 1.45
<PER-SHARE-DIVIDEND> (.05)
<PER-SHARE-DISTRIBUTIONS> (.51)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.58
<EXPENSE-RATIO> 1.29
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<CIK> 0000854850
<NAME> EXPEDITION FUNDS
<SERIES>
<NUMBER> 060
<NAME> TAX FREE MONEY MARKET CLASS 1
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> NOV-01-1997
<PERIOD-END> OCT-31-1998
<INVESTMENTS-AT-COST> 62975
<INVESTMENTS-AT-VALUE> 62975
<RECEIVABLES> 0
<ASSETS-OTHER> 1567
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 64542
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 64542
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 64542
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 960
<OTHER-INCOME> 0
<EXPENSES-NET> (181)
<NET-INVESTMENT-INCOME> 779
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 779
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (779)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 140266
<NUMBER-OF-SHARES-REDEEMED> (75725)
<SHARES-REINVESTED> 1
<NET-CHANGE-IN-ASSETS> 65542
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 106
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 181
<AVERAGE-NET-ASSETS> 52441
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .01
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.01)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .68
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>