EXPEDITION FUNDS, 485APOS, 1999-12-16

EXPEDITION FUNDS
485APOS, 1999-12-16

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 16, 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. 33 /X/

and
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 / /

AMENDMENT NO. 30 /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)

/ / immediately upon filing pursuant to paragraph (b)
/ / on [___________] pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)
/x/ 75 days after filing pursuant to paragraph (a)
/ / on [___________] pursuant to paragraph (a) of Rule 485.

<PAGE>

EXPEDITION FUNDS

INVESTMENT SHARES-CLASS A
INVESTMENT SHARES-CLASS B
INSTITUTIONAL SHARES

PROSPECTUS
MARCH 1, 2000

EXPEDITION EQUITY INCOME FUND
EXPEDITION INVESTMENT GRADE BOND FUND
EXPEDITION TAX-FREE INVESTMENT GRADE BOND FUND

INVESTMENT ADVISER:
COMPASS BANK

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

Page 1 of 31
<PAGE>

ABOUT 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 Income Fund, Expedition Investment
Grade Bond Fund and Expedition Tax-Free Investment Grade 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 Equity Fund, 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 RISK AND RETURN THAT IS COMMON TO EACH OF THE
FUNDS. FOR MORE DETAILED INFORMATION ABOUT THE FUNDS, PLEASE SEE:

<TABLE>
<CAPTION>
PAGE
<S> <C>
EXPEDITION EQUITY INCOME FUND.............................5
EXPEDITION INVESTMENT GRADE BOND FUND.....................9
EXPEDITION TAX-FREE INVESTMENT GRADE BOND FUND...........14
MORE INFORMATION ABOUT RISK..............................17
MORE INFORMATION ABOUT FUND INVESTMENTS..................19
INVESTMENT ADVISER.......................................19
PURCHASING, SELLING AND EXCHANGING FUND SHARES...........19
DISTRIBUTION OF FUND SHARES..............................27
DIVIDENDS AND DISTRIBUTIONS..............................27
TAXES....................................................27
CUSTODIAN................................................28
FINANCIAL HIGHLIGHTS.....................................29
HOW TO OBTAIN MORE INFORMATION ABOUT THE
EXPEDITION FUNDS.....................................Back Cover
</TABLE>

Page 2 of 31
<PAGE>

Shares of the Expedition Funds are not deposits of or obligations of, or
guaranteed or endorsed by Compass Bank, Compass Bancshares, Inc. or any of their
affiliates, or any bank, and are not obligations of, guaranteed by or insured by
the U.S. Government, the Federal Deposit Insurance Corporation, the Federal
Reserve Board, or any other government agency.

An investment in shares of the Funds involves investment risk, including the
possible loss of all or a portion of the principal invested, and the investment
return and value of shares of the Funds will fluctuate so that an investment,
when liquidated, may be worth more or less than the original cost.

Compass Bank serves as investment adviser and custodian to the Expedition Funds,
and Compass Bank and various of its affiliates may provide various services to
the Funds, for which investment advisory, custodian and other services Compass
Bank and/or such other affiliates are entitled to receive compensation.

Page 3 of 31
<PAGE>

RISK/RETURN INFORMATION COMMON TO THE 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 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 prices 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.

Page 4 of 31
<PAGE>

EXPEDITION EQUITY INCOME FUND

FUND SUMMARY

INVESTMENT GOAL Long-term growth of capital with an
emphasis on current income

INVESTMENT FOCUS Dividend-paying common stocks issued
by large and medium sized U.S. companies

SHARE PRICE VOLATILITY Medium

PRINCIPAL INVESTMENT STRATEGY Investing in stocks which have potential
for capital appreciation and an above-
average dividend yield relative to the
Standard & Poor's 500 Index (S&P 500)

INVESTOR PROFILE Long-term investors who want growth of
capital and income and who can tolerate
share price volatility

INVESTMENT STRATEGY OF THE EXPEDITION EQUITY INCOME FUND

The Fund invests primarily in dividend-paying common stocks and other equity
securities issued by U.S. companies with medium to large market capitalization
(in excess of $1 billion) that the Adviser believes are attractively valued,
relative to historical earnings and dividend trends, and offer potential for
moderate long-term growth. The Adviser analyzes a company's appreciation
potential based on factors such as sales or earnings growth, pricing
flexibility, and profitability trends compared to a company's industry peers.
The Fund generally seeks to diversify its investments across all major industry
sectors.

The Fund pursues the income portion of its investment goal by choosing stocks of
those companies that have historical dividend yields which are higher than the
dividend yield of the average company in the S&P 500, or which the Adviser
believes have the ability to grow their dividends in future years. The Fund
expects to hold more stocks with value characteristics than growth
characteristics because value stocks typically pay higher dividends.

The Adviser monitors the companies held by the Fund and may sell a security
when it achieves a designated price target, there is a fundamental change in a
company's prospects or better investment opportunities become available.

Page 5 of 31
<PAGE>

PRINCIPAL RISKS OF INVESTING IN THE EXPEDITION EQUITY INCOME FUND

Since it purchases equity securities, 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 Fund also invests in preferred stocks which have characteristics of both
equity and fixed income securities. Since preferred stocks receive their income
in a fixed or variable stream of dividends, their value tends to decrease if
interest rates rise and vice versa. Also, like common stock, preferred stock's
value is subject to short- or long-term fluctuations of stock prices in general.
Unlike with fixed income securities, a company which issues preferred stock is
under no obligation to pay dividends to the shareholder (although most preferred
stock dividends accumulate and must be paid at a later date before common
dividends). Although preferred stocks do evidence ownership in a company,
preferred stocks usually do not carry any voting rights.

Companies which have historically paid dividends may discontinue dividend
payments or pay dividends at lower levels. This may affect the Fund's ability to
produce current income.

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

The convertible securities the Fund invests in have characteristics of both
fixed income and equity securities. The value of securities convertible into
equity securities are subject to equity risks, because the value of the
convertible security tends to move with the market value of the underlying
stock, as well as fixed income risks such as prevailing interest rates, the
credit quality of the issuer and any call provisions of the issue.

The Fund is also subject to the risk that its investment approach, which seeks
to identify dividend-paying equity securities 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 Fund had not yet commenced operations and did not have a full calendar year
of performance information at the time this prospectus was printed.

Page 6 of 31
<PAGE>

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>
INSTITUTIONAL
CLASS A SHARES CLASS B SHARES SHARES
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)* 4.00% None None
Maximum Deferred Sales Charge (Load)
(as a percentage of net asset value)** None 5.00% None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends
and other Distributions (as a percentage of offering price) None None None
Redemption Fee
(as a percentage of amount redeemed, if applicable) None None None
Exchange 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 and decreases over time, depending on how long you own your
shares. See "Selling Fund Shares."

ANNUAL FUND OPERATING EXPENSES (EXPENSES DEDUCTED FROM FUND ASSETS)

<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES INSTITUTIONAL SHARES
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Management Fees 0.75% 0.75% 0.75%
Distribution and Service (12b-1) Fees 0.25% 1.00% None
Other Expenses X.XX% X.XX% X.XX%
----- ----- -----
Total Annual Fund Operating Expenses X.XX% X.XX% X.XX%
</TABLE>

For more information about these fees, see "Investment Adviser" and
"Distribution of Fund Shares."

Page 7 of 31
<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, Fund
operating expenses remain the same, and you reinvest all dividends and
distributions. Although your actual costs and returns might be different, your
estimated costs of investing $10,000 in the Fund would be:

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 $X.XX $X.XX N/A N/A
CLASS A SHARES $X.XX $X.XX N/A N/A
CLASS B SHARES $X.XX $X.XX N/A 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 $X.XX $X.XX N/A N/A
CLASS A SHARES $X.XX $X.XX N/A N/A
CLASS B SHARES $X.XX $X.XX N/A N/A*
</TABLE>

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

Page 8 of 31
<PAGE>

EXPEDITION INVESTMENT GRADE BOND FUND

FUND SUMMARY

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.

INVESTMENT STRATEGY OF THE EXPEDITION INVESTMENT GRADE 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 organization(s) 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 7 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 when 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.

Page 9 of 31
<PAGE>

PRINCIPAL RISKS OF INVESTING IN THE EXPEDITION INVESTMENT GRADE 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.

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

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.

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.*

1993 6.73%
1994 (1.51%)
1995 12.52%
1996 2.76%
1997 6.76%
1998 7.44%
1999 X.XX%

BEST QUARTER WORST QUARTER
X.XX% X.XX%
(XX/XX/XX) (XX/XX/XX)

* THE PERFORMANCE INFORMATION SHOWN ABOVE IS BASED ON A CALENDAR YEAR.

THIS TABLE COMPARES THE FUND'S AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS
ENDED DECEMBER 31, 1999 TO THOSE OF THE LEHMAN BROTHERS INTERMEDIATE
GOVERNMENT/CORPORATE BOND INDEX AND THE LIPPER SHORT/INTERMEDIATE GOVERNMENT
BOND AVERAGE.

Page 10 of 31
<PAGE>

<TABLE>
<CAPTION>
SINCE
INVESTMENT GRADE BOND FUND 1 YEAR 5 YEAR INCEPTION
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Class A Shares x.xx% x.xx% x.xx%*
- ---------------------------------------------------------------------------------------------------------
Class B Shares x.xx% x.xx%** x.xx%**
- ---------------------------------------------------------------------------------------------------------
Institutional Shares x.xx% x.xx%*** x.xx%***
- ---------------------------------------------------------------------------------------------------------
Lehman Brothers Intermediate
Govt/Corporate Bond Index x.xx% x.xx% x.xx%+
- ---------------------------------------------------------------------------------------------------------
Lipper Short/Intermediate
Government Bond Average x.xx% x.xx% x.xx%+
- ---------------------------------------------------------------------------------------------------------
</TABLE>

* Since April 20, 1992.
** Class B Shares of the Fund were offered beginning November 16, 1998. The
performance information shown prior to that date represents performance
of the Fund's Class A Shares, which were offered April 20, 1992. The
performance of the Class A Shares has been adjusted for the maximum
contingent deferred sales charge applicable to Class B Shares in year one
only, but does not reflect the Class B Shares' Rule 12b-1 fees and
expenses. With those adjustments, performance would be lower than that
shown.
*** Institutional Shares of the Fund were offered beginning June 16, 1997.
The performance information shown prior to that date represents
performance of the Fund's Class A Shares, which were offered April 20,
1992. The performance of the Class A Shares has been adjusted to deduct
the front-end sales charge applicable to Class A Shares, but does not
deduct the Class A Shares' Rule 12b-1 fees and expenses. With those
adjustments, performance would be higher than that shown.
+ Since April 30, 1992.

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 one to five years.

Page 11 of 31
<PAGE>

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)

* This sales charge varies depending upon how much you invest. See "Front-End
Sales Charges - Class A Shares."
** This sales charge is imposed if you sell Class B Shares within one year of
your purchase. See "Contingent Deferred Sales Charges - Class B Shares."

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

<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES INSTITUTIONAL SHARES
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment Advisory Fees 0.50% 0.50% 0.50%
Distribution and Service (12b-1) Fees 0.25% 1.00% None
Other Expenses X.XX% X.XX% X.XX%
----- ----- -----
Total Annual Fund Operating Expenses X.XX% X.XX% X.XX%
- --------------------------------------------------------------------------------------------------------------------
</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
waived a portion of the fees in order to keep total operating expenses at a
specified level. These fee waivers remain in place as of the date of this
prospectus, but the Adviser may discontinue all or part of these waivers at any
time. With these fee waivers, the Fund's actual total operating expenses were as
follows:

<TABLE>
<S> <C>
Class A Shares X.XX%
Class B Shares X.XX%
Institutional Shares X.XX%
</TABLE>

For more information about these fees, see "Investment Advisers" and
"Distribution of Fund Shares."

Page 12 of 31
<PAGE>

EXAMPLE

The Example also assumes that each year your investment has a 5% return, Fund
operating expenses remain the same and you reinvest all dividends and
distributions. Although your actual costs and returns might be different, your
approximate costs of investing $10,000 in the Fund would be:

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 $X.XX $X.XX $X.XX $X.XX
CLASS A SHARES $X.XX $X.XX $X.XX $X.XX
CLASS B SHARES $X.XX $X.XX $X.XX $X.XX*
</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 $X.XX $X.XX $X.XX $X.XX
CLASS A SHARES $X.XX $X.XX $X.XX $X.XX
CLASS B SHARES $X.XX $X.XX $X.XX $X.XX*
</TABLE>

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

Page 13 of 31
<PAGE>

EXPEDITION TAX-FREE INVESTMENT GRADE BOND FUND

FUND SUMMARY

INVESTMENT GOAL Current income exempt from Federal
income tax

INVESTMENT FOCUS High quality municipal bonds and
other fixed income securities

SHARE PRICE VOLATILITY Medium

PRINCIPAL INVESTMENT STRATEGY Investing in municipal obligations which
pay interest that is exempt from Federal
income tax

INVESTOR PROFILE Taxable investors who want current
income exempt from Federal income tax
and who are willing to accept the risks
of owning a portfolio of municipal
securities.

INVESTMENT STRATEGY OF THE EXPEDITION TAX-FREE INVESTMENT GRADE BOND FUND

The Fund invests substantially all of its assets in municipal securities that
generate income exempt from Federal income taxes. These securities include
securities of municipal issuers located in any of the fifty states, the
District of Columbia, Puerto Rico and other U.S. territories and possessions.
All such instruments must be rated "A" or better by one or more nationally
recognized rating organizations at the time of purchase. In selecting
securities for the Fund, the Adviser will consider each security's
creditworthiness, yield relative to comparable issuers and maturities,
appreciation potential and liquidity. The Fund's average weighted maturity
will be maintained at 15 years or less. 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. The Advisor
monitors the securities held by the Fund and may sell a security to adjust
the maturity of the Fund or when better opportunities become available. The
Fund intends to invest as much of its assets as possible in securities that
are not subject to Federal taxes, but it may invest up to 20% of its total
assets in taxable securities.

PRINCIPAL RISKS OF INVESTING IN THE EXPEDITION TAX-FREE INVESTMENT GRADE 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 including governments.
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. Fixed income securities are also subject to credit risk, which is
the possibility that an issuer will be unable to make timely payments of either
principal or interest.

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 municipal securities.

Page 14 of 31
<PAGE>

Constitutional or legislative limits on borrowing by municipal issuers may
result in reduced supplies of municipal securities. Moreover, certain municipal
securities are backed only by a municipal issuer's ability to levy and collect
taxes.

Since the Fund may purchase 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.

The Fund is subject to the risk that its market segment, municipal fixed income
securities, may underperform other fixed income market segments or the fixed
income markets as a whole.

PERFORMANCE INFORMATION

The Fund had not yet commenced operations 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
FUND SHARES.

SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)

* This sales charge varies depending upon how much you invest. See "Front-End
Sales Charges - Class A Shares."
** This sales charge is imposed if you sell Class B Shares within one year of
your purchase and decreases over time, depending on how long you own your
shares. See "Contingent Deferred Sales Charges - Class B Shares."

Page 15 of 31
<PAGE>

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

<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES INSTITUTIONAL SHARES
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Management Fees 0.50% 0.50% 0.50%
Distribution and Service (12b-1) Fees 0.25% 1.00% None
Other Expenses X.XX% X.XX% X.XX%
----- ----- -----
Total Annual Fund Operating Expenses X.XX% X.XX% X.XX%
- --------------------------------------------------------------------------------------------------------------------
</TABLE>

* The Fund's total actual annual fund operating expenses should be less
than the amount shown above because the Adviser intends to waive 0.10% of its
management fee in order to keep total operating expenses at a specified level.
These fee waivers remain in place as of the date of this prospectus, but 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 expected to be as
follows:

<TABLE>
<S> <C>
Class A Shares X.XX%
Class B Shares X.XX%
Institutional Shares X.XX%
</TABLE>

For more information about these fees, see "Investment Adviser" and
"Distribution of Fund Shares."

EXAMPLE

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

Page 16 of 31
<PAGE>

MORE INFORMATION ABOUT RISK

<TABLE>
<S> <C>
EQUITY RISK - Equity securities include public and Equity Income Fund
privately issued equity 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 Investment Grade Bond Fund
investments change in response to interest rate changes Tax-Free Investment Grade Bond Fund
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 17 of 31
<PAGE>

MORTGAGE-BACKED SECURITIES - Mortgage-backed Investment Grade Bond Fund
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.

MUNICIPAL ISSUER RISK - There may be economic or Tax-Free Investment Grade Bond Fund
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 may also adversely affect the
value of the Fund's municipal securities.
Constitutional or legislative limits on borrowing
by municipal issuers may result in reduced
supplies of municipal securities. Moreover,
certain municipal securities are backed only by a
municipal issuer's ability to levy and collect
taxes.
</TABLE>

Page 18 of 31
<PAGE>

MORE INFORMATION ABOUT FUND INVESTMENTS

The prospectus describes the Funds' primary strategies, and the Funds will
normally invest in the types of securities described 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 any
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.

INVESTMENT ADVISER

The Investment Adviser makes investment decisions for the Funds and continuously
reviews, supervises and administers the Funds' respective investment programs.
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 an
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, 1999, Compass Bank had
approximately $___ billion in assets under administration, with investment
discretion over $___billion. For the fiscal year ended October 31, 1999, Compass
Bank received advisory fees as a percentage of average daily net assets (after
waivers) of the Investment Grade Bond Fund of X.XX%

The Adviser is entitled to receive 0.75% of the Equity Income Fund and 0.50% of
the Tax-Free Investment Grade Bond Fund's average daily net assets for its
investment advisory services, but may receive less due to waivers.

PURCHASING, SELLING AND EXCHANGING FUND SHARES

Page 19 of 31
<PAGE>

This section tells you how to buy, sell (sometimes called "redeem") and 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 certain 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 available 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 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 their authorized Compass Asset
Management representative and other eligible customers should contact their
financial institutions.

Page 20 of 31
<PAGE>

You may also purchase 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 (NYSE) is
open for business (a Business Day). Shares cannot be purchased by Federal
Reserve wire on days that either the NYSE 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 NYSE (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 the net assets of
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 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 each 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

Page 21 of 31
<PAGE>

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:

<TABLE>
<CAPTION>
YOUR SALES CHARGE AS A PERCENTAGE OF YOUR SALES CHARGE AS A PERCENTAGE OF
IF YOUR INVESTMENT IS: OFFERING PRICE YOUR NET 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.

Page 22 of 31
<PAGE>

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;
- - by directors, officers and employees and members of their immediate family,
of Compass Bancshares 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, under their dealer agreements with the Distributor or otherwise, do
not receive any or receive a reduced portion of the front-end sales charge;
- - 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 Class A Shares of the Investment
Grade 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 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

Page 23 of 31
<PAGE>

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 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
YEAR SINCE PURCHASE DOLLAR AMOUNT SUBJECT TO 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>

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

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.

Page 24 of 31
<PAGE>

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.

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,
customers of the Compass Asset Management Group should contact their Asset
Management Group authorized representative.

If you own your shares directly, you may sell (sometimes called "redeem") 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.

Page 25 of 31
<PAGE>

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

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
Funds' 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 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 Securities and Exchange Commission ("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.

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. 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).

Page 26 of 31
<PAGE>

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.

You may exchange Class A Shares of any Fund for Class A Shares of any other Fund
or Investment Service Shares of the Money Market Fund and Tax-Free Money Market
Fund. 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: 0.25%
For Class B Shares: 1.00%
</TABLE>

DIVIDENDS AND DISTRIBUTIONS

Dividends for the Investment Grade Bond Fund and the Tax-Free Investment Grade
Bond Fund are declared daily and paid monthly to shareholders of record.
Dividends for the Equity Income 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.

TAXES

Page 27 of 31
<PAGE>

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

Each 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 a Fund may be taxable whether or not you reinvest them. Income
distributions are generally taxable at ordinary income tax rates. Capital gains
distributions are generally taxable at the rates applicable to long-term capital
gains. EACH SALE OR EXCHANGE OF FUND SHARES IS A TAXABLE EVENT.

The Tax-Free Investment Grade Bond Fund intends to distribute federally
tax-exempt income. The 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 average daily net assets for this service.

Page 28 of 31
<PAGE>

FINANCIAL HIGHLIGHTS

The table that follows presents performance information about Class A Shares,
Class B Shares, and Institutional Shares of the Investment Grade Bond Fund,
fiscal year ended October 31. The Equity Income Fund and Tax-Free Investment
Grade Bond Fund had not commenced operations as of October 31. This information
is intended to help you understand the 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 the Fund, assuming you reinvested all of your dividends and
distributions. This information has been audited by [_________], 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 29 of 31
<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, 2000, 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 and their
impact on Fund performance. The reports also contain detailed financial
information about the Funds.

TO OBTAIN AN SAI, ANNUAL OR SEMI-ANNUAL REPORT, OR MORE INFORMATION:

BY TELEPHONE: Call 1-800-922-2085

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

Page 30 of 31
<PAGE>

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 EDGAR Database on
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 on the
operation of the Public Reference Room, call 202-942-8090). 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
20549-0102. You may also obtain the information upon payment of a duplicating
fee, by e-mailing the SEC at the following address: [email protected].
Expedition Funds' Investment Company Act registration number is 811-5900.

Page 31 of 31
<PAGE>

EXPEDITION FUNDS

INSTITUTIONAL SHARES

PROSPECTUS
MARCH 1, 2000

EXPEDITION MONEY MARKET FUND

INVESTMENT ADVISER:
COMPASS BANK

Page 1 of 15
<PAGE>

ABOUT 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 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, Expedition
Equity Income Fund, Expedition Investment Grade Bond Fund, Expedition Tax-Free
Investment Grade Bond Fund and Expedition Tax-Free Money Market Fund in separate
prospectuses which is 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 RISK AND RETURN. FOR MORE DETAILED INFORMATION
ABOUT THE FUND, PLEASE SEE:

PAGE
<S> <C>
MONEY MARKET FUND..............................................5
MORE INFORMATION ABOUT FUND INVESTMENTS........................8
INVESTMENT ADVISER ............................................8
PURCHASING, SELLING AND EXCHANGING FUND SHARES.................9
DIVIDENDS AND DISTRIBUTIONS...................................11
TAXES.........................................................12
CUSTODIAN.....................................................12
HOW TO OBTAIN MORE INFORMATION ABOUT
THE EXPEDITION FUNDS......................................Back Cover
</TABLE>

Page 2 of 15
<PAGE>

Shares of the Expedition Money Market Fund are not deposits of or obligations
of, or guaranteed or endorsed by Compass Bank, Compass Bancshares, Inc. or any
of their affiliates, or any bank, and are not obligations of, guaranteed by or
insured by the U.S. Government, the Federal Deposit Insurance Corporation, the
Federal Reserve Board, or any other government agency.

An investment in shares of the Fund involves investment risk, including the
possible loss of all or a portion of the principal invested, and the investment
return and value of shares of the Fund will fluctuate so that an investment,
when liquidated, may be worth more or less than the original cost.

The Expedition Money Market Fund tries to maintain a constant price per share of
$1.00, but we cannot guarantee this.

Compass Bank serves as investment adviser and custodian to the Expedition Money
Market Fund, and Compass Bank and various of its affiliates may provide various
services to the Fund, for which investment advisory, custodian and other
services Compass Bank and/or such other affiliates are entitled to receive
compensation.

Page 3 of 15
<PAGE>

RISK/RETURN INFORMATION

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

The 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 the
Fund achieve its goal. Still, investing in the Fund involves risks and there is
no guarantee that the 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
the Fund, just as you could with other investments.

Page 4 of 15
<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 collaterized repurchase
agreements. The Fund's portfolio is comprised only of short-term debt securities
that are rated in the highest rating category or unrated securities that the
Adviser determines are of comparable 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 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 for the past two years and of the Fund's Investment
Service Shares for the prior years.*

Page 5 of 15
<PAGE>

Investment Service Shares are not offered by this prospectus; however, because
they are invested in the same portfolio of securities, the annual returns for
the two classes would be substantially similar. The performance of the
Investment Service Shares has been adjusted to reflect the expenses applicable
to Institutional Shares.

1991 X.XX%
1992 X.XX%
1993 X.XX%
1994 X.XX%
1995 X.XX%
1996 X.XX%
1997 X.XX%
1998 5.25%
1999 X.XX%

BEST QUARTER WORST QUARTER
X.XX% X.XX%
(XX/XX/XX) (XX/XX/XX)

* 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 ENDED
DECEMBER 31, 1999.

SINCE INCEPTION
INSTITUTIONAL SHARES 1 YEAR 5 YEARS (2/5/90)
- ---------------------------------------- ------------------- ------------------- -------------------
<S> <C> <C> <C>
MONEY MARKET FUND X.XX% X.XX%* X.XX*
</TABLE>

* Institutional Shares of the Fund were offered beginning June 9, 1997. The
performance information shown prior to that date represents performance
of the Fund's Class A Shares, which were offered February 5, 1990. The
performance of the Class A Shares has not been adjusted to deduct Class A
Shares' Rule 12b-1 fees and expenses. With those adjustments, performance
would be higher than that shown.

FUND FEES AND EXPENSES

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

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

INSTITUTIONAL SHARES
- ------------------------------------------------------------------------------------------
<S> <C>
Management Fees 0.40%
Other Expenses X.XX%
-----
Total Annual Fund Operating Expenses X.XX%
- ------------------------------------------------------------------------------------------
</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 waived a
portion of the fees in order to keep total operating expenses at a specified
level. These fee waivers remain in place as of the date of this prospectus, but
the Adviser may discontinue all or part of these waivers at any time. With these
fee waivers, the Fund's actual total operating expenses were as follows:

Institutional Shares X.XX%

For more information about these fees, see "Investment Adviser and Sub-Adviser."

Page 6 of 15
<PAGE>

EXAMPLE

This Example is intended to help you compare the cost of investing in the
Fund's Institutional Shares 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 and that you sell your shares at the end of the period.

1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C>
$ $ $ $
--- --- --- ---
</TABLE>

Page 7 of 15
<PAGE>

MORE INFORMATION ABOUT FUND INVESTMENTS

In addition to the investments and strategies described in this prospectus, the
Fund 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 the Fund will
achieve its investment goal.

INVESTMENT ADVISER

The Investment Adviser makes investment decisions for the Fund and continuously
reviews, supervises and administers the Fund's investment program. The Board of
Trustees of Expedition Funds supervises the Adviser and establishes policies
that the Adviser must follow in its management activities.

Compass Bank, a wholly-owned subsidiary of Compass Bancshares, Inc. (Compass
Bancshares) serves as the Adviser to the Fund. Compass Bank has served as an
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, 1999, Compass Bank had
approximately $______ in assets under administration, with investment discretion
over $________. For the fiscal period ended October 31, 1999, Compass Bank
received advisory fees as a percentage of average daily net assets (after
waivers) the Money Market Fund of X.XX%.

Page 8 of 15
<PAGE>

PURCHASING, SELLING AND EXCHANGING FUND SHARES

This section tells you how to purchase, sell (sometimes called "redeem") and
exchange shares of the Fund.

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 Fund on the
check. The 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 broker or 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 (NYSE) and
the Federal Reserve is open for business (a Business Day). Shares cannot be
purchased by Federal Reserve Wire on days when either the NYSE or the Federal
Reserve is closed.

The 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 Fund will remain constant at $1.00 per share.

The 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, the Fund generally must receive your order
and Federal funds (readily available funds) before 4:00 p.m. Central time.

HOW WE CALCULATE NAV

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

Page 9 of 15
<PAGE>

In calculating NAV for the Fund, we generally value the 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, the 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 the 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 4:00 p.m. Central time will
not be entitled to that day's dividend.

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

The Fund may suspend your right to sell your shares if the NYSE restricts
trading, the Securities and Exchange Commission ("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 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.

Page 10 of 15
<PAGE>

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.

TELEPHONE TRANSACTIONS

DIVIDENDS AND DISTRIBUTIONS

Dividends are declared daily and paid monthly. The Fund makes distributions of
capital gains, if any, at least annually. If you own Fund shares on the 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.

Page 11 of 15
<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 Fund 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. Income
distributions are generally taxable at ordinary income tax rates. Capital gains
distributions are generally taxable at the rates applicable to long-term capital
gains. 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 Fund. It receives an
annual fee of 0.02% of the Fund's average daily net assets for this service.

Page 12 of 15
<PAGE>

FINANCIAL HIGHLIGHTS

The table that follows presents performance information about Institutional
Shares of the Funds, fiscal year ended October 31. 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 __________,
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 13 of 15
<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)

ANNUAL AND SEMI-ANNUAL REPORTS

TO OBTAIN AN SAI, ANNUAL OR SEMI-ANNUAL REPORT, OR 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 14 of 15
<PAGE>

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 EDGAR Database on
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 on the
operation of the Public Reference Room, call 202-942-8090). 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
20549-0102. You may also obtain this information, upon payment of a duplicating
fee, by e-mailing the SEC at the following address: [email protected].
Expedition Funds' Investment Company Act registration number is 811-5900.

Page 15 of 15
<PAGE>

EXPEDITION FUNDS

EXPEDITION MONEY MARKET FUND
EXPEDITION TAX-FREE MONEY MARKET FUND
EXPEDITION EQUITY FUND
EXPEDITION EQUITY INCOME FUND
EXPEDITION INVESTMENT GRADE BOND FUND
EXPEDITION TAX-FREE INVESTMENT GRADE BOND FUND

(PORTFOLIOS OF THE EXPEDITION FUNDS)

MARCH 1, 2000

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, 2000. Prospectuses may be obtained by
writing to the Trust or calling toll-free 1-800-992-2085.

TABLE OF CONTENTS
THE TRUST......................................................................1
ADDITIONAL INFORMATION ABOUT THE FUNDS AND
THEIR INVESTMENT OBJECTIVES....................................................1
DESCRIPTION OF PERMITTED INVESTMENTS...........................................5
INVESTMENT LIMITATIONS........................................................14
REGULATORY COMPLIANCE.........................................................20
INVESTMENT ADVISER............................................................20
THE ADMINISTRATOR.............................................................22
THE DISTRIBUTOR...............................................................23
THE TRANSFER AGENT............................................................24
THE CUSTODIAN.................................................................24
INDEPENDENT AUDITORS..........................................................24
LEGAL COUNSEL.................................................................24
TRUSTEES AND OFFICERS OF THE TRUST............................................24
PERFORMANCE INFORMATION.......................................................27
COMPUTATION OF YIELD..........................................................28
CALCULATION OF TOTAL RETURN...................................................29
PURCHASING SHARES.............................................................31
REDEEMING SHARES..............................................................33
DETERMINATION OF NET ASSET VALUE..............................................33
TAXES.........................................................................35
FUND TRANSACTIONS.............................................................38
TRADING PRACTICES AND BROKERAGE...............................................39
DESCRIPTION OF SHARES.........................................................41
SHAREHOLDER LIABILITY.........................................................41
LIMITATION OF TRUSTEES' LIABILITY.............................................41
5% AND 25% SHAREHOLDERS.......................................................42
EXPERTS.......................................................................44

<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 Equity Fund, Expedition Equity Income Fund (together the "Equity
Funds"), Expedition Investment Grade Bond Fund (formerly the Expedition Bond
Fund) and Expedition Tax-Free Investment Grade Bond Fund (together the "Bond
Funds") 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, Equity
and Bond 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. There can be no assurance that the Fund
will achieve its objective.

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.

<PAGE>

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. There can be no assurance that the Fund will achieve its objective.

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 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

2
<PAGE>

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 the Funds nor the Adviser
will review the proceedings relating to the issuance of municipal securities or
the basis for such opinions.

EXPEDITION EQUITY FUND

The Equity Fund's investment objective is to provide growth of capital, with a
secondary objective of income. There can be no assurance that the Fund will
achieve its objective.

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").

The Fund will not attempt to set or meet a specific portfolio turnover rate
since any turnover would be incidental to transactions undertaken in an attempt
to achieve the Fund's investment objective. However, the Fund does not expect
its annual rate of portfolio turnover to exceed 100% under normal market
conditions. The portfolio turnover rate for the fiscal years ending October 31,
1998 and 1999 was 54.19% and __%, respectively.

EXPEDITION EQUITY INCOME FUND

The investment objective of the Equity Income Fund is to provide current income
and, as a secondary objective, moderate capital appreciation. There can be no
assurance that the Fund will achieve its investment objectives.

Under normal market conditions, at least 65% of the Fund's assets will be
invested in a diversified portfolio of common stocks. The investment approach
employed by the advisers emphasizes income-producing common stocks which, in
general, have above-average dividend yields relative to the stock market as
measured by the Standard & Poor's 500 Index. Any remaining assets may be
invested in warrants and rights to purchase common stocks, preferred stocks
convertible into common stock, non-convertible preferred stocks, investment
grade bonds convertible into common stocks and, although it has no current
intention to do so, investment grade fixed income securities. The Fund may also
borrow money, invest in illiquid securities, when-issued, and delayed-delivery
securities, shares of REITs, and shares of other investment companies, and lend
its securities to qualified buyers.

The Fund will not attempt to set or meet a specific portfolio turnover rate
since any turnover would be incidental to transactions undertaken in an attempt
to achieve the Fund's investment objective. However, the Fund does not expect
its annual rate of portfolio turnover to exceed 100% under normal market
conditions. Additionally, the Adviser expects portfolio turnover for the Equity
Income Fund will be lower than that of the Equity Fund.

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EXPEDITION INVESTMENT GRADE BOND FUND

The Investment Grade Bond Fund's investment objective is to provide current
income. There can be no assurance that the Fund will achieve its investment
objectives.

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 7 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.

EXPEDITION TAX-FREE INVESTMENT GRADE BOND FUND

The Fund's investment objective is to seek current income exempt from Federal
income tax. There can be no assurance that the Fund will achieve its objective.

The Fund invests at least 80% of its net assets in municipal securities the
interest of which is exempt from federal income taxes based on opinions from
bond counsel for the issuers. This investment policy is a fundamental policy of
the Fund. The issuers of these securities can be located in all fifty states,
the District of Columbia, Puerto Rico, and other U.S. territories and
possessions. Under normal conditions, the Fund will invest at least 80% of its
net assets in securities the interest of which is not a preference item for
purposes of the federal alternative minimum tax. Although the Fund has no
present intention of doing so, up to 20% of its assets can be invested in
taxable debt securities.

The Fund may purchase municipal obligations rated A or better by Standard &
Poor's Corporation ("S&P") or by Moody's Investors Service, Inc. ("Moody's") or
of comparable quality as determined by the Adviser and tax-exempt commercial
paper rated at least A-1 by S&P or Prime-1 by Moody's. Municipal obligations
owned by the Fund which become less than the prescribed investment quality shall
be sold at a time when, in the judgment of the Adviser, it does not
substantially impact the market value of the Fund.

There could be economic, business, or political developments which might affect
all municipal securities of a similar type or whose issuers are located in the
same state. To the extent that a significant portion of the Fund's assets are
invested in municipal securities payable from revenues on similar projects or
whose issuers are located in the same state, the Fund will be subject to the
risks presented by such types of securities, projects or issuers to a greater
extent than it would be if the Fund's assets were not invested in such a manner.

The Fund will typically maintain a dollar-weighted average portfolio maturity of
less than 15 years. However, when the Adviser determines that market conditions
so warrant, the Fund may maintain an average weighted maturity of greater than
15 years.

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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. However, the Fund does not expect its annual
rate of portfolio turnover to exceed 100% under normal market conditions.

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's underlying security. The
Equity Funds 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.

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.

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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 a 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.

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).

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.

THE EURO -- On January 1, 1999, the European Monetary Union (EMU)
implemented a new currency unit, the Euro. The countries initially
converting or tying 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.

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Approximately 46% of the stock exchange capitalization of the total
European market is now reflected in Euros, and participating
governments now 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.

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 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

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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 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 investment companies 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

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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 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

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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).

TAXABLE MUNICIPAL SECURITIES -- The Tax-Free Money Market Fund and the Tax-Free
Investment Grade Bond 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 Funds' respective 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 IBCA 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" and "Appendix."

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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 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.

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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 Funds 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 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

12
<PAGE>

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 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.

13
<PAGE>

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.

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.

14
<PAGE>

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.

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.

15
<PAGE>

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.

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 SEC may prescribe by rules and regulations, reduce the amount
of its borrowings

16
<PAGE>

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.

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 SEC.

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.

17
<PAGE>

EQUITY AND BOND 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 Funds, 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 Funds may borrow money
and the Bond Funds 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 Funds, 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 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 Funds 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.

18
<PAGE>

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.

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.

19
<PAGE>

The Trust and the Adviser have received an exemptive order from the SEC, 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 their policies and limitations, the Bond Funds consider
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.

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.

Compass Bank offers 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, 1999, the Compass Asset
Management Group had approximately $[ ] billion under

20
<PAGE>

administration ($[ ] 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.

The continuance of the 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 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 Equity and
Bond Funds at any time, without the payment or any penalty, on sixty (60) days'
written notice to Bancshares and may be terminated at any time by ninety (90)
days' written notice to the Adviser. The 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 Equity and Bond
Funds (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).

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,
1997, 1998 and 1999, the Funds paid the following advisory fees:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Fund Fees Paid Fee Waivers
-----------------------------------------------------------------------------------------
1997 1998 1999 1997 1998 1999
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Money Market Fund $490,590 $319,769 $ $166,107 $413,213 $
- --------------------------------------------------------------------------------------------------------------------------------
Tax-Free Money Market Fund * $27,940 $ $ $78,291 $
- --------------------------------------------------------------------------------------------------------------------------------
Equity Fund $691,952 $1,988,195 $ $0 $0 $
- --------------------------------------------------------------------------------------------------------------------------------
Equity Income Fund * * * * * *
- --------------------------------------------------------------------------------------------------------------------------------
Investment Grade Bond Fund** $478,461 $661,196 $ $68,168 $214,248 $
- --------------------------------------------------------------------------------------------------------------------------------
Tax-Free Investment Grade Bond Fund * * * * * *
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>

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

21
<PAGE>

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 has been active in managing portfolios of tax
exempt securities. As of [ , 2000], WPG manages over $[ ] billion in assets,
$[ ] 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>
---------------------------------------------------------------
---------------------------------------------------------------
Fund Fees Paid Fee Waivers
------------------------------------------
1998 1999 1998 1999
---------------------------------------------------------------
<S> <C> <C> <C> <C>
Tax-Free Money $18,627 $ $0 $
Market Fund
---------------------------------------------------------------
---------------------------------------------------------------
</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 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 0.20% 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 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,

22
<PAGE>

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, Alpha
Select Funds, Amerindo Funds, Inc.,The Arbor Fund, ARK Funds, Armada Funds,
Bishop Street Funds, Boston 1784 Funds-Registered Trademark-, CNI Charter
Funds, 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 Parkstone Advantage Funds, The
PBHG 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 UAM Funds Inc.
II.

Since June 9, 1997, SEI Investments Mutual Funds Services has served as
administrator to the Funds. Prior to June 9, 1997, Federated Administrative
Services served as administrator to the Funds.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Fund Fees Paid Fees Waivers
-----------------------------------------------------------------------------------------
Fiscal Period Fiscal Year Fiscal Period Fiscal Year
-----------------------------------------------------------------------------------------
1996(1) 1997(2) 1998 1999 1996(1) 1997(2) 1998 1999
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Money Market Fund $162,059 $149,922 $274,873 $ $0 $ $ $
- --------------------------------------------------------------------------------------------------------------------------------
Tax-Free Money Market Fund $ $ $39,920 $ $ $ $ $
- --------------------------------------------------------------------------------------------------------------------------------
Equity Fund $ $187,608 $549,966 $ $ $ $ $
- --------------------------------------------------------------------------------------------------------------------------------
Equity Income Fund * * * * * * * *
- --------------------------------------------------------------------------------------------------------------------------------
Investment Grade Bond Fund** $62,445 $96,779 $233,455 $ $0 $ $ $
- --------------------------------------------------------------------------------------------------------------------------------
Tax-Free Investment Grade Bond Fund * * * * * * * *
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Not in operation
** Formerly the Expedition Bond Fund
(1) Fiscal period beginning November 1, 1996 and ended June 8, 1997.
(2) Fiscal period beginning June 9, 1997 and ended October 31, 1997.

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 Equity and Bond Funds imposed a front-end sales charge upon their Investment
Shares (now Class A Shares) in the amounts shown for the fiscal years ended
October 31, 1997, 1998 and 1999:

23
<PAGE>

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Fund Dollar Amount of Loads Dollar Amounts of Loads Retained by SEI
Investments
---------------------------------------------------------------------------------------
1997 1998 1999 1997 1998 1999
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Equity Fund $0 $19,807 $ $0 $0 $
- -----------------------------------------------------------------------------------------------------------------------------------
Equity Income Fund * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
Investment Grade Bond Fund*** **$1,431 $1,142 $ $0 $0 $
- -----------------------------------------------------------------------------------------------------------------------------------
Tax-Free Investment Grade Bond Fund * * * * * *
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* An asterisk indicates that the Fund had not commenced operations as of the
periods indicated.
** Since 6/9/97
***Formerly the Expedition Bond Fund

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.

INDEPENDENT AUDITORS

The independent auditors for the Trust are [ ], 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, Alpha Select
Funds, The Arbor Fund, ARK Funds, Armada

24
<PAGE>

Funds, Bishop Street Funds, Boston 1784 Funds-Registered Trademark-, CNI
Charter Funds, CUFUND, First American Funds, Inc., First American Investment
Funds, Inc., First American Strategy Funds, Inc., HighMark Funds, Huntington
Funds, The Nevis Fund, Inc., Oak Associates Funds, The Parkstone Advantage
Fund, The Parkstone Group of Funds, The PBHG 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 and TIP Funds, each of which is an open-end management investment
company managed by SEI Investments Mutual Funds Services or its affiliates
and 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.

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, JR. (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

25
<PAGE>

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.

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.

TIMOTHY D. BARTO (DOB 03/28/68) -- Vice President and Assistant Secretary
-- Associate of the Administrator in the Proprietary Funds group since
October 1999. Associate, Dechert, Price & Rhoads LLP (law firm), 1997-1999.
Associate, Richter, Miller, & Finn LLP (law firm), 1994-1997. Student with
High Honors, George Washington University School of Law, 1994. Student
(Masters Program), George Washington University, 1994. Student (bachelors
Program) magma cum laude, University of Connecticut, 1990.

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 SEI Investments since January
1998. Vice President and Assistant Secretary of the Administrator and the
Distributor since May 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.

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 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.

EDWARD T. SEARLE (DOB 04/03/54) -- Vice President and Assistant Secretary
-- Vice President and Assistant Secretary of the Administrator and the
Distributor since August 1999. Associate, Drinker, Biddle & Reath LLP (law
firm), June 1998-August 1999. Associate, Ballard, Spahr, Andrews& Ingersoll
LLP ( law firm), September 1995-June 1998. Student, Temple University
School of Law, 1992-1995.

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.

26
<PAGE>

JOHN H. GRADY, JR. (DOB 06/01/61) -- Secretary -- 2000 One Logan Square,
Philadelphia, PA 19103-2921, Partner since 1995, Morgan, Lewis & Bockius
LLP (law firm), counsel to the Trust, SEI Investments, the Administrator
and the Distributor.

RICHARD W. GRANT (DOB 10/25/45) - Secretary - 1701 Market Street,
Philadelphia, PA 19103. Partner, Morgan, Lewis & Bockius LLP (law firm),
counsel to the Trust, 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.

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.

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.

27
<PAGE>

CLASSES OF SHARES AND PERFORMANCE

A Fund's performance fluctuates on a daily basis largely because net
earnings and, with respect to the Equity and Bond 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-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:

28
<PAGE>

TAX EQUIVALENT YIELD = E + 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, 1999 was [ ]%. The yield for the
Investment Services Shares for the same period was [ ]%.The yield for the
Institutional Shares of the Tax-Free Money Market Fund for the seven-day
period ended October 31, 1999 was [ ]%. The Investment Service Shares for
the same period was [ ]%.

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 Equity and Bond 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 Equity Funds' yield for the thirty-day period ended October 31, 1999 were as
follows: Institutional Shares [ ]% and Class A Shares [ ]%.

The Investment Grade Bond Fund yield for the thirty-day period ended
October 31, 1999 was as follows: Class A Shares [ ]% and Class B Shares [ ]%.
As of October 31, 1999, the Tax-Free Investment Grade Bond Fund had not
commenced operations.

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)TO THE POWER OF 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.

29
<PAGE>

The average total returns for the Funds from inception through October 31,
1999 were as follows:

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
Fund Class Average Annual Total Return
---------------------------------------------------------------
One Year Five Years Ten Years Since Inception*
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Money Market Fund Institutional Shares N/A
-----------------------------------------------------------------------------------------------
Investment Service Shares N/A
- -------------------------------------------------------------------------------------------------------------------------
Tax-Free Money Market Institutional Shares N/A
Fund
-----------------------------------------------------------------------------------------------
Investment Service Shares N/A
- -------------------------------------------------------------------------------------------------------------------------
Equity Fund Institutional Shares N/A
-----------------------------------------------------------------------------------------------
Class A Shares (without load) N/A
-----------------------------------------------------------------------------------------------
Class A Shares (load) N/A
-----------------------------------------------------------------------------------------------
Class B Shares (without load) N/A
-----------------------------------------------------------------------------------------------
Class B Shares (load) N/A
- -------------------------------------------------------------------------------------------------------------------------
Equity Income Fund Institutional Shares N/A
-----------------------------------------------------------------------------------------------
Class A Shares (without load) N/A
-----------------------------------------------------------------------------------------------
Class A Shares (load) N/A
-----------------------------------------------------------------------------------------------
Class B Shares (without load) N/A
-----------------------------------------------------------------------------------------------
Class B Shares (load) N/A
- -------------------------------------------------------------------------------------------------------------------------
Investment Grade Bond Institutional Shares N/A
Fund #
-----------------------------------------------------------------------------------------------
Class A Shares (without load) N/A
-----------------------------------------------------------------------------------------------
Class A Shares (load) N/A
-----------------------------------------------------------------------------------------------
Class B Shares (without load) N/A
-----------------------------------------------------------------------------------------------
Class B Shares (load) N/A
- -------------------------------------------------------------------------------------------------------------------------
Tax-Free Investment Institutional Shares N/A
Grade Bond Fund
-----------------------------------------------------------------------------------------------
Class A Shares (without load) N/A
-----------------------------------------------------------------------------------------------
Class A Shares (load) N/A
-----------------------------------------------------------------------------------------------
Class B Shares (without load) N/A
-----------------------------------------------------------------------------------------------
Class B Shares (load) N/A
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Institutional Shares of the Money Market Fund were initially offered to
the public on June 9, 1997. Investment Service Shares of the Money Market
Fund were initially offered to the public on February 5, 1990. Prior to
June 9, 1997, Investment Service 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 Investment Grade Bond
Fund(formerly, 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 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 performance for the period from April 20, 1992 to June 13, 1997
represents the performance of Class A Shares of the Bond Fund.

# Formerly the Expedition Bond Fund.

30
<PAGE>

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.

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 Equity and Bond Funds pursuant to Rule 12b-1 (the "12b-1
Plans") which was promulgated by the SEC 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 Equity and Bond
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.

31
<PAGE>

PAYMENTS UNDER THE CLASS A PLAN

For the fiscal year ended October 31, 1999, the Class A Shares of the
Equity and Bond Funds incurred the following distribution expenses,
pursuant to the Class A Plan:

* An asterisk that the Fund had not commenced operations as of the period
indicated.
**Reflects voluntary fee waiver in effect for the period indicated.
***Formerly the Expedition Bond Fund
<TABLE>
<CAPTION>
PAYMENTS UNDER THE CLASS B PLAN
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------

Fund Total Distribution Total Distribution Expenses Sales Expenses Printing Costs Other Costs
Expenses (as a % of net assets)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Equity Fund $ % N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------------------
Equity Income Fund * * * * *
- --------------------------------------------------------------------------------------------------------------------------------
Investment Grade Bond $ %** N/A N/A N/A
Fund ***
- --------------------------------------------------------------------------------------------------------------------------------
Tax-Free Investment * * * * *
Grade Bond Fund
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>

* An asterisk that the Fund had not commenced operations as of the period
indicated.
**Reflects voluntary fee waiver in effect for the period indicated.
*** Formerly the Expedition Bond Fund

PAYMENTS UNDER THE SERVICE PLAN

For the fiscal year ended October 31, 1999, 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 [$ ], none of which
was voluntarily waived, and the Tax-Free Money Market Fund paid [$ ], 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.

32
<PAGE>

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 SEC 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 FUNDS

The Money Market Funds attempt to stabilize the value of a share at $1.00.
Net asset value is calculated on days on which both the NYSE 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 Funds are amortized cost. Under
this method, 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 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 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

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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 Funds will invest their available cash to reduce the
average maturity to 90 days or less as soon as possible.

The 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 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 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.

EQUITY AND BOND FUNDS

Net asset value generally changes each day for the Equity and Bond Funds.
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.

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DETERMINING MARKET VALUE OF SECURITIES

Market values of a Equity and Bond Funds' 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 discussion 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.

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.

Each Fund intends to qualify under Subchapter M of the Code for tax
treatment as a RIC. In order to qualify as a RIC, a Fund must satisfy
certain requirements. First, a Fund must derive at least 90% of its annual
gross income (including tax-exempt interest) from dividends, interest,
payments with respect to securities loans, gains from the sale of or other
disposition of stock or securities, foreign currencies or other income
(including but not limited to gains from options and futures) derived with
respect to its business of investing in such stock or securities (the "90%
gross income test"). Second, a Fund must diversify its holdings so that, at
the close of each quarter of its taxable year, (i) at least 50% of the
value of its total assets is comprised of cash, cash items, United States
Government securities, securities of other regulated investment companies
and other securities limited in respect of any one issuer to an amount not
greater in value than 5% of the value of a Fund's total assets and to not
more than 10% of the outstanding voting securities of such issuer, and (ii)
not more than 25% of the value of the total assets is invested in the
securities of any one issuer (other than United States Government
securities

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and securities of other regulated investment companies) or two or more issuers
controlled by a Fund and engaged in the same, similar or related trades or
businesses.

A Fund will not be taxable as a RIC for a taxable year unless it
distributes at least 90% of the sum of (i) its "investment company taxable
income" (which includes dividends, taxable interest, taxable original issue
discount and market discount income, income from securities lending, net
short-term capital gain in excess of long-term capital loss, and any other
taxable income other than "net capital gain" (as defined below) and is
reduced by deductible expenses) and (ii) its net tax-exempt interest (the
excess of its gross tax-exempt interest income over certain disallowed
deductions). A Fund may retain for investment its net capital gain (which
consists of the excess of its net long-term capital gain over its net
short-term capital loss). However, if a Fund retains any net capital gain
or any investment company taxable income, it will be subject to tax at
regular corporate rates on the amount retained. Each fund intends to
distribute at least annually to its shareholders all or substantially all
of its net tax-exempt interest and any investment company taxable income
and net capital gain.

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 Funds or
Bond Funds will qualify for the corporate dividends-received deduction.
Conversely, distributions from the Equity Funds may 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
October, November or 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.

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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 that
have been 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 of 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 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.

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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 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
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

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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 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.

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For the fiscal year ended October 31, 1999, the following commissions were
paid on brokerage transactions, pursuant to an agreement or understanding,
to brokers because of research services provided by the brokers:

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

"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, 1999, the following Funds held securities of
the Trust's "regular brokers or dealers" as follows: the Bond Funds held
repurchase agreements valued at $[ ] at the fiscal year end with [J.P.
Morgan, Inc.];

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the Equity Funds held repurchase agreements valued at $[ ] at the fiscal year
end with [Morgan Stanley] and the Money Market Funds held repurchase agreements
valued at $[ ] 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.

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.

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5% [AND 25%] SHAREHOLDERS

EXPEDITION MONEY MARKET FUND % OF FUND HELD
INVESTMENT SHARES