CROWLEY PORTFOLIO GROUP INC, 485BPOS, 1997-03-28

CROWLEY PORTFOLIO GROUP INC
485BPOS, 1997-03-28

Previous: CORNERSTONE REALTY INCOME TRUST INC, 8-K/A, 1997-03-28

Next: EXABYTE CORP /DE/, 4, 1997-03-28

As filed with the Securities and Exchange Commission on March 28, 1997.

File No. 33-30975
811-5875

SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]

Pre-Effective Amendment No. [ ]

Post-Effective Amendment No. 9 [X]

and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]

Amendment No. 11 [X]

(Check appropriate box or boxes.)
THE CROWLEY PORTFOLIO GROUP, INC.
(Exact Name of Registrant as Specified in Charter)

1813 Marsh Road, Suite H, Wilmington, Delaware 19810
(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, Including Area Code (302) 529-1717

Robert A. Crowley, President, The Crowley Portfolio Group, Inc.,
1813 Marsh Road, Suite H, Wilmington, Delaware 19810
(Name and Address of Agent for Service)

Please send copies of all communications to:

Bruce G. Leto, Esquire
Stradley, Ronon, Stevens & Young
2600 One Commerce Square
Philadelphia, PA 19103-7098

Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of the registration statement.

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

X immediately upon filing pursuant to paragraph (b).
_____ on (date) pursuant to paragraph (b).
_____ 60 days after filing pursuant to paragraph (a)(1).
_____ on (date) pursuant to paragraph (a)(1).
_____ 75 days after filing pursuant to paragraph (a)(2).
_____ on (date) pursuant to paragraph (a)(2) of Rule 485.

If appropriate, check the following box:
_____ This post-effective amendment designates a new effective
date for a previously filed post-effective amendment.

Registrant has registered an indefinite number or amount of securities under the
Securities Act of 1933 pursuant to Rule 24f-2 of the Investment Company Act of
1940. Registrant filed its Rule 24f-2 Notice for Registrant's fiscal year ended
November 30, 1996 on January 29, 1997.

<PAGE>

CROSS REFERENCE SHEET

N-1A
Item No. INFORMATION REQUIRED
PART A. IN A PROSPECTUS. Caption or Location.
Item 1. Cover Page. Cover Page.

Item 2. Synopsis. Expenses of the
Portfolios; Highlights.

Item 3. Condensed Financial
Information. Financial Highlights.

Item 4. General Description
of Registrant. Prospectus Cover;
Financial Highlights;
Investment Objective
and Policies of Each
Portfolio; Risk
Factors; Investment
Restrictions.

Item 5. Management of the Fund. Management of the
Fund; Distribution of
Shares; Custodian;
Transfer and Dividend
Disbursing Agent;
General Operations.

Item 5A. Management's Discussion of
Fund Performance. Performance;
Management's
Discussion of Fund
Performance.

Item 6. Capital Stock and Other
Securities. Capital Stock;
Dividends,
Distributions and
Taxes.

Item 7. Purchase of Securities
Being Offered. Determination of Net
Asset Value; How to
Purchase Shares;
Special Plans.

Item 8. Redemption or Repurchase. How to Redeem
Shares; Special Plans.

Item 9. Pending Legal Proceedings. Not Applicable.

<PAGE>

N-1A
Item No. INFO. REQUIRED IN A
PART B. STMT. OF ADD'L. INFO. Caption or Location.
Item 10. Cover Page. Cover Page.

Item 11. Table of Contents. Table of Contents.

Item 12. General Information and
History. General Information; See
"Investment Objectives and
Policies of Each Portfolio".

Item 13. Investment Objectives
and Policies. Cover Page; The Crowley
Portfolio Group, Inc. --
Investment Objective and
Policies; Investment
Restrictions.

Item 14. Management of the
Registrant. Officers and Directors of the Fund.

Item 15. Control Persons and Ownership of Securities.
Principal Holders of Securities.

Item 16. Investment Advisory and
Other Services. Investment Advisor.

Item 17. Brokerage Allocation and
Other Practices. Allocation of Portfolio Brokerage.

Item 18. Capital Stock and Other
Securities. See "Capital Stock" in Prospectus.

Item 19. Purchase, Redemption and Purchase of Shares; See
Pricing of Securities Being "Determination of Net Asset
Offered Value" in Prospectus.

Item 20. Tax Status. Not Applicable.

Item 21. Underwriters. Distributor.

Item 22. Calculation of Performance
Data. Performance.

Item 23. Financial Statements. 1

III

<PAGE>

N-1A
Item No.
PART C. OTHER INFORMATION. Caption or Location.
Item 24. Financial Statements and Exhibits. 1

Item 25. Persons Controlled by or
Under Common Control with Registrant. *

Item 26. Number of Holders of Securities. *

Item 27. Indemnification. *

Item 28. Business and Other Connections
of Investment Adviser. *

Item 29. Principal Underwriters. *

Item 30. Location of Accounts and Records. *

Item 31. Management Services. *

Item 32. Undertakings. *

1 Incorporated by reference to filing of Registrant's Annual Report to
Shareholders dated November 30, 1996, as filed with the Securities and
Exchange Commission's EDGAR system on January 29, 1997.
- --------
* Item has been answered in order in Part C of the Registrant's Registration
Statement on Form N-1A.
[/R]
IV
<PAGE>

THE CROWLEY PORTFOLIO GROUP, INC.

THE DATE OF THIS PROSPECTUS IS MARCH 30, 1997

1813 Marsh Road, Suite H, Wilmington, DE 19810
(302) 529-1717

The Crowley Portfolio Group, Inc. ("Fund") is an open-end diversified management
investment company. It was organized as a series Maryland corporation on August
15, 1989 and currently offers shares of three series (the "Portfolio(s)"), each
of which has a specific investment objective. There is no assurance that each
Portfolio's objective will be achieved.

THE CROWLEY GROWTH AND INCOME PORTFOLIO (formerly, The Crowley Growth
Portfolio). The objective of the Portfolio is long-term growth of capital for
investors, with the secondary objective being current income. The Portfolio
seeks to achieve its objective by investing in the securities of companies
which, in the view of the investment advisor, have the prospects for above
average capital growth and by making other investments selected in accordance
with the Portfolio's investment policies and restrictions. (See "Investment
Objectives and Policies of Each Portfolio - The Crowley Growth and Income
Portfolio," page o ).

THE CROWLEY INCOME PORTFOLIO. The objective of the Portfolio is to maximize
current income, consistent with prudent risk. The Portfolio seeks to achieve its
objective by investing in fixed-income securities and other debt instruments in
accordance with the Portfolio's investment policies and restrictions. (See
"Investment Objectives and Policies of Each Portfolio - The Crowley Income
Portfolio," page o ).

THE CROWLEY DIVERSIFIED MANAGEMENT PORTFOLIO. The objective of the Portfolio
is high total return consistent with reasonable risk. The Portfolio seeks to
achieve its objective by concentrating (investing 25% or more of the value of
its assets) its investments in shares of registered investment companies and by
making other investments in accordance with the Portfolio's investment policies
and restrictions (see "Investment Objective and Policies of Each Portfolio - The
Crowley Diversified Management Portfolio," page o ). The Portfolio, by investing
in shares of registered investment companies, indirectly pays a portion of the
operating expenses, management expenses and brokerage costs of such companies as
well as the expenses of operating the Portfolio. The Portfolio's investors
indirectly may pay higher total operating expenses and other costs than they
might by owning the underlying investment companies directly.

The shares of the Portfolios may be purchased or redeemed at any time. Purchases
will be effected at the public offering price and redemptions will be effected
at net asset value next determined following receipt of the investor's request.
(See "Determination of Net Asset Value," page o , "How to Purchase Shares," page
o , and "How to Redeem Shares," page o ).

This Prospectus sets forth concisely the information about the Fund that a
prospective investor should know before investing. Investors should read and
retain this Prospectus for future reference.

More information about the Fund has been filed with the Securities and Exchange
Commission, and is contained in the "Statement of Additional Information," dated
March 30, 1997, which is available at no charge upon written request to the
Fund. The Fund's Statement of Additional Information is incorporated herein by
reference.

<PAGE>

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.

-2-

<PAGE>

EXPENSES OF THE PORTFOLIOS

The following table illustrates all expenses and fees that a shareholder of the
Fund will incur.

Shareholder Transaction Expenses
<TABLE>
<CAPTION>
Crowley Crowley
Growth and Crowley Diversified
Income Income Management
Portfolio Portfolio Portfolio
<S> <C> <C> <C>

Maximum Sales Load Imposed on None None None
Purchases (as a percentage of
offering price)

Maximum Deferred Sales Load (as
a percentage of offering price) None None None

Maximum Sales Load Imposed on
Reinvested Dividends [and Other
Distributions] (as a percentage None None None
of offering price)

Deferred Sales Load (as a None None None
percentage of original purchase
price or redemptions proceeds,
as applicable)

Redemption Fees (as a percentage
of amount redeemed, if
applicable) None None None

Exchange Fee None None None

Annual Fund Operating Expenses
(as a percentage of average net
assets)

Management Fees 1.00% 0.60% 1.00%

12b-1 Fees None None None

Other Expenses 0.95% 0.79% 1.22%

Total Fund Operating Costs 1.95% 1.39% 2.22%
</TABLE>

The purpose of this table is to assist the investor in understanding the various
expenses that an investor in the Fund will bear directly or indirectly. An
investor will bear Fund expenses in proportion to the number of shares owned by
such investor. For a more complete description of the Fund's various costs and
expenses, see the sections entitled "Management of the Fund" and "General
Operations" on pages o and o , respectively.

-3-

<PAGE>

Management and Advisory Expenses with respect to The Crowley Growth and Income
Portfolio and The Crowley Diversified Management Portfolio are higher than those
paid by most other investment companies, but are similar to the expenses
normally paid by other funds with similar investment objectives.

The following example illustrates the expenses that you would pay on a $1,000
investment over various time periods, assuming: (1) a 5% annual rate of return;
and (2) redemption at the end of each time period. As noted in the table above,
the Fund charges no redemption fees of any kind.

Example 1 yr. 3 yrs. 5 yrs. 10 yrs.
Crowley Growth
and Income Portfolio $20 $61 $105 $227

Crowley Income Portfolio $14 $44 $76 $167

Crowley Diversified
Management Portfolio $23 $69 $119 $255

This example should not be considered a representation of past or future
expenses or performance. Actual expenses may be greater or lesser than those
shown.

-4-
<PAGE>

HIGHLIGHTS

INVESTMENT OBJECTIVE

THE CROWLEY GROWTH AND INCOME PORTFOLIO (formerly, The Crowley Growth
Portfolio). The objective of the Portfolio is long-term growth of capital, with
the secondary objective being current income. The Portfolio seeks to achieve its
objective by investing in the securities of companies which have the prospects
for above-average capital growth and by making other investments in accordance
with the Portfolio's investment policies and restrictions. (See "Investment
Objectives and Policies.")

THE CROWLEY INCOME PORTFOLIO. The objective of the Portfolio is to maximize
current income which is consistent with prudent risk. The Portfolio seeks to
achieve its objective by investing in fixed-income securities and other debt
instruments and by making other investments selected in accordance with the
Portfolio's investment policies and restrictions. (See "Investment Objectives
and Policies.")

INVESTMENT POLICIES
The Crowley Growth and Income Portfolio attempts to achieve its objectives by
investing primarily in common stocks, common stock equivalents and convertible
securities of companies which offer the prospect for growth of earnings while
paying current dividends. The Portfolio diversifies its investments among
different industries and companies, and changes its portfolio securities for
investment considerations and not for trading purposes. During times when the
investment advisor (Crowley & Crowley Corp.) determines that there is a
generally rising trend in the stock market, any return generated by the
Portfolio will consist primarily of net realized and unrealized appreciation in
the value of the securities it holds and, to a lesser degree, from dividends and
interest.

The Crowley Income Portfolio attempts to achieve its objectives by investing
primarily in a diversified portfolio of fixed-income securities; however, the
portfolio may invest its assets in all classes of securities, bonds, preferred
stocks and common stocks which it believes have better income potential than
fixed-income securities. The investment advisor selects the Portfolio's
diversified group of securities for their high yields relative to risk involved.
During times when the investment advisor determines that there is a generally
rising trend in fixed-income markets any return will, in general, consist
primarily of interest and, to a lesser degree, from net realized and unrealized
appreciation, and in a rising stock market the returns will consist of dividends
and net realized and unrealized gain from stocks.

The Crowley Diversified Management Portfolio attempts to achieve its objectives
by concentrating (investing 25% or more of the value of its assets) in shares of
other registered investment companies and by making other investments in
accordance with the Portfolio's investment policies and

-5-

<PAGE>

restrictions. To generate its return, the Portfolio uses a variety of investment
techniques in an effort to generate a high total return consisting of the sum of
interest, dividend and other income and net realized and unrealized appreciation
in the value of the Portfolio of investment companies (including money market
mutual funds), closed-end investment companies, cash equivalents (such as
repurchase agreements or certificates of deposit), cash, stocks, bonds and other
debt obligations, stock options, stock index options, stock index futures and
options thereon. These include investment companies which invest in foreign
stocks and bonds and gold and silver mining companies. To further enhance the
performance, the Advisor may invest in so-called "sector funds" which, in
general, concentrate their assets in one segment of the equity market. The
Portfolio is unable to predict what portion of its total return will consist of
income, short-term capital gains or long-term capital gains.

During times when the investment advisor determines that there is a generally
declining trend in the fixed-income and/or stock markets, greater percentages of
a Portfolio's assets will be placed in cash or cash equivalents. For each
Portfolio, such investments will emphasize protection of principal and will
de-emphasize the generation of growth (Crowley Growth and Income), high income
(Crowley Income), and high total return (Crowley Diversified Management). Cash
equivalents will consist of money market securities, which will include
marketable securities issued or guaranteed as to principal and interest by the
government of the United States or by its agencies or instrumentalities,
domestic bank certificates of deposit, bankers' acceptances, prime commercial
paper, and repurchase agreements (secured by United States Treasury or agency
obligations). Furthermore, in times of extremely volatile or abnormal market
conditions, the investment advisor may adopt a purely temporary defensive
position which would consist of having most, if not all, of the assets invested
in these instruments. This is designed to concentrate solely on preserving the
value of the assets in the Portfolios.

HOW TO INVEST
Shares of each Portfolio are distributed by Crowley Securities, the Distributor,
and selected dealers. The minimum initial investment is $5,000; subsequent
purchases must be at least $1,000. The minimum investment amount may consist of
a single investment in one Portfolio or an aggregate investment in any
combination of Portfolios. An investment by a spouse or parent may be combined
with an investment of the other spouse or children to meet the minimum initial
or subsequent investment limit. Further, an investment by a tax-qualified plan
may be combined with a personal investment to meet the minimum initial or
subsequent investment limit. (See "How to Purchase Shares.")

HOW TO REDEEM
Shares may be redeemed by the Portfolios or repurchased by the Distributor at
any time at the net asset value next determined after receipt of the request by
the Fund, which acts as its own Transfer Agent. There is no charge for
redemptions by the Portfolios or repurchases by the Distributor.

The Portfolios have the right to redeem shares in-kind, and to redeem accounts
reduced to less than the minimum investment (presently $5,000) when the account
is not brought up to the minimum after 60 days' notice to the shareholder. If an
investor purchases Fund shares in the minimum amount, then any redemption
request could subject the entire account to mandatory redemption by the Fund. If
shares are redeemed in-kind, the redeeming shareholder may incur brokerage costs
in converting

-6-

<PAGE>

the assets into cash. (For information regarding redemption or repurchase of
shares, see "How to Redeem Shares.")

DIVIDENDS AND DISTRIBUTIONS
The net investment income of each Portfolio, if any, is distributed by an annual
dividend. If net capital gains are realized, they will be distributed in an
annual distribution. Dividends or distributions may be received in cash or by
reinvestment in additional shares. (See "Dividends, Distributions and Taxes.")

INVESTMENT ADVISOR
Crowley & Crowley Corp. serves as the investment advisor to each Portfolio
(managing the assets of each Portfolio and allocating its portfolio
transactions) pursuant to separate management contracts providing for a monthly
fee equal to an annualized rate of 1.00% of the average daily net assets with
respect to The Crowley Growth and Income Portfolio and the Crowley Diversified
Management Portfolio, and 0.60% of average daily net assets with respect to The
Crowley Income Portfolio. The fee with respect to The Crowley Growth and Income
Portfolio and The Crowley Diversified Management Portfolio is higher than the
investment advisory fees paid by most other mutual funds. Crowley & Crowley
Corp. currently provides investment advisory services for individuals, trusts,
estates and the three Portfolios of the Fund. (See "Investment Advisor.")

RISK FACTORS AND SPECIAL CONSIDERATIONS
Prospective investors in each Portfolio should consider a number of factors:

1. The Portfolios may engage in the following portfolio strategies: write
covered options; purchase options; and engage in transactions in stock
index options and futures and related options on such futures. (See
"Futures and Options," "Options," "Stock Index Futures," and "Risks of
Transactions in Stock Options, Stock Index Options and Options on Stock
Index Futures" under "Risk Factors.")

2. The Portfolios may invest in repurchase agreements which involve risks of
loss if a seller defaults on its obligations under the agreement. (See
"Investment Objective and Policies" for a discussion of the risks of
repurchase agreements.)

3. Redeeming shareholders may pay redemption fees or brokerage costs if shares
are redeemed in-kind.

4. The Crowley Diversified Management Portfolio concentrates (invests more
than 25% and up to 100% of the value of its assets) in the shares of
registered investment companies, is affected by their performance, and
contributes to the expenses of operating those companies (including their
advisory or operating fees). (See "Investment Objectives and Policies of
Each Portfolio"). The Portfolio has the right to invest in investment
companies which impose a sales load or sales charges. While the Portfolio
will seek to minimize such charges, they can reduce the Portfolio's
investment results. (See "Risk Factors.")

-7-
<PAGE>

5. The Crowley Diversified Management Portfolio may invest in securities of
registered investment companies that invest in foreign securities, which
involves significant risks that shareholders should consider. (See "Risk
Factors" and the Appendix to this Prospectus.)

-8-
<PAGE>

FINANCIAL HIGHLIGHTS

The following financial highlights from December 6, 1989 through November 30,
1996 are derived from the financial statements of The Crowley Portfolio Group,
Inc. and have been audited by Tait, Weller & Baker, independent auditors. The
data should be read in conjunction with the financial statements, related notes,
and the report of Tait, Weller & Baker covering such financial information and
highlights for the fiscal year ended November 30, 1996, all of which are
incorporated by reference into the Fund's Statement of Additional Information. A
copy of the Fund's Annual Report (including the report of Tait, Weller & Baker)
may be obtained from the Fund upon request at no charge.

CROWLEY GROWTH AND INCOME PORTFOLIO
<TABLE>
<CAPTION>
12/01/95 12/01/94 12/01/93 12/01/92 12/01/91 12/01/90 12/06/89(a)
to to to to to to to
11/30/96 11/30/95 11/30/94 11/30/93 11/30/92 11/30/91 11/30/90
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $11.37 $10.69 $10.45 $10.19 $9.94 $9.39 $10.00
------ ------ ------ ------ ----- ----- ------

Income from Investment
Operations:

Net Investment Income .23 .32 .12 .11 .17 .33 .32

Net Gains or Losses on Securities
(both realized & unrealized)
.36 .88 .63 .18 .32 1.06 (.61)
--- --- --- --- --- ---- -----

Total from Investment
Operations .59 1.20 .75 .29 .49 1.39 (.29)
--- ---- --- --- --- ---- -----

Less Distributions:

Dividends (from net investment
income) (.32) (.12) (.11) (.03) (.17) (.33) (.32)

Distributions (from capital
gains) (.50) (.40) (.40) (----) (.07) (.50) (----)

Return of Capital (----) (----) (----) (----) (----) (.01) (----)
------ ------ ------ ------ ------ ----- ------

Total Distributions (.82) (.52) (.51) (.03) (.24) (.84) (.32)
----- ----- ----- ----- ----- ----- -----

Net Asset Value, End of Period $11.14 $11.37 $10.69 $10.45 $10.19 $9.94 $9.39
====== ====== ====== ====== ====== ===== =====

Total Return 5.55% 11.85% 7.41% 2.85% 4.93% 14.85% (2.90%)
- ------------

Ratios/Supplemental Data:

Net Assets, End of Period
(000 omitted) $6,744 $6,545 $5,496 $4,593 $4,440 $3,283 $1,653

Ratio of Expenses to Average
Net Assets 1.95% 1.93% 1.85% 1.61% 1.52% 1.89% 1.00%(b)(c)

Ratio of Net Investment Income
to Average Net Assets 2.06% 3.00% 1.10% 1.00% 1.72% 3.64% 4.49%(b)(c)

Portfolio Turnover Rate 182.41% 118.08% 107.37% 243.85% 178.78% 74.86% 110.61%

Average Commission Rate $.05 --- --- --- --- --- ---
</TABLE>

(a) Effective date of the Fund's initial registration under the Securities Act
of 1933, as amended.
(b) Annualized.
(c) The ratio of operating expenses and net income before reimbursement of
expenses by the advisor were 2.00% and 3.49%, respectively.

-9-
<PAGE>

FINANCIAL HIGHLIGHTS

CROWLEY INCOME PORTFOLIO
<TABLE>
<CAPTION>
12/01/95 12/01/94 12/01/93 12/01/92 12/01/91 12/01/90 12/06/89(a)
to to to to to to to
11/30/96 11/30/95 11/30/94 11/30/93 11/30/92 11/30/91 11/30/90
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value
Beginning of Period $11.08 $10.69 $11.57 $10.58 $10.48 $10.19 $10.00
----- ------ ------ ------ ------ ------ ------

Income from Investment Operations:

Net Investment Income .59 .65 .61 .65 .61 .67 .58

Net Gains or Losses on Securities
(both realized & unrealized) (.15) .37 (.76) .40 .22 .43 .23
----- --- ----- --- --- --- ---

Total from Investment Operations .44 1.02 (.15) 1.05 .83 1.10 .81
--- ---- ----- ---- --- ---- ---

Less Distributions:

Dividends (from net investment
income) (.62) (.63) (.66) (.06) (.61) (.67) (.58)

Distributions (from capital gains) (--) (--) (.07) (--) (.12) (.13) (.04)

Return of Capital (--) (--) (--) (--) (--) (.01) (--)
----- --- ----- --- --- --- ---

Total Distributions (.62) (.63) (.73) (.06) (.73) (.81) (.62)
----- ----- ----- ----- ----- ----- -----

Net Asset Value,
End of Period $10.90 $11.08 $10.69 $11.57 $10.58 $10.48 $10.19
====== ====== ====== ====== ====== ====== ======

Total Return 4.16% 10.12% (1.43%) 9.97% 7.69% 10.88% 8.10%
- ------------

Ratios/Supplemental Data:

Net Assets, End of Period
(000 omitted) $9,529 $8,940 $6,654 $5,423 $4,133 $2,865 $1,397

Ratio of Expenses to Average Net
Assets 1.39% 1.43% 1.37% 1.23% 1.20% 1.09(c) .99%(b)(c)

Ratio of Net Investment Income to
Average Net Assets 5.62% 6.43% 6.28% 6.27% 6.11% 6.78(c) 7.10%(b)(c)

Portfolio Turnover Rate 66.18% 31.60% 14.45% 19.17% 45.00% 79.36% 48.74%
</TABLE>

-10-

<PAGE>

FINANCIAL HIGHLIGHTS

The following financial highlights from April 3, 1995 (commencement of
operations) through November 30, 1996 are derived from the financial statements
of The Crowley Portfolio Group, Inc. and have been audited by Tait, Weller &
Baker, independent auditors. The data should be read in conjunction with the
financial statements, related notes, and the report of Tait, Weller & Baker
covering such financial information and highlights for the fiscal year ended
November 30, 1996, all of which are incorporated by reference into the Fund's
Statement of Additional Information. A copy of the Fund's Annual Report
(including the report of Tait, Weller & Baker) may be obtained from the Fund
upon request at no charge.

CROWLEY DIVERSIFIED MANAGEMENT PORTFOLIO
Period
12/01/95 04/03/95(a)
to to
11/30/96 11/30/95

Net Asset Value, Beginning of Period $10.71 $10.00
------ ------

Income From Investment Operations:
Net investment income .05
Net Gains or Losses on Securities (both
realized & unrealized) 1.43 .71
------ ------
Total from Investment Operations 1.48 .71

Less Distributions:
Dividends (from net investment income) (.04)
Distributions (from capital gains)
Return of capital -- --
------ ------
Total Distributions (.04) --
------ ------
Net Asset Value, End of Period $12.15 $10.71

Total Return 13.87% 7.10%

Ratios/Supplemental Data:

Net Assets, End of Period (000 omitted) $1,500 $962
Ratio of Expenses to Average
Net Assets 2.22% 2.06%(b)
Ratio of Net Investment
Loss to Average Net Assets .46% (0.09%)(b)
Portfolio Turnover Rate 20.69%

(a) Effective date of the Fund's initial registration under the Securities Act
of 1933, as amended.

(b) Annualized.

-11-
<PAGE>

INVESTMENT OBJECTIVES AND POLICIES OF EACH PORTFOLIO

Set forth below are the investment objectives and policies of each Portfolio.
The investment objective of a Portfolio is a fundamental policy and may not be
changed without the approval of the holders of a majority of the Portfolio's
outstanding voting securities. There can be no assurance that a Portfolio will
achieve its objective.

THE CROWLEY GROWTH AND INCOME PORTFOLIO
The Crowley Growth and Income Portfolio was formerly named The Crowley Growth
Portfolio. On November 1, 1995, the Fund's Board of Directors voted unanimously
to change the name of the Portfolio to reflect more accurately the investment
objectives of the Portfolio. The name change of the Portfolio has been effected
under Maryland corporate law, effective March 29, 1996.

The Portfolio's objective is long-term growth of capital, with the secondary
objective being to achieve current income. The Crowley Growth and Income
Portfolio seeks to achieve its investment objectives by investing primarily in
common stocks, securities convertible into common stocks and common stock
equivalents (including rights and warrants). The Portfolio will invest most of
its assets in common stocks, although it may also invest in other types of
securities such as preferred stocks, high-grade bonds, short-term United States
Government securities, other high-quality, short-term securities such as
commercial paper, repurchase agreements, banker's acceptances, certificates of
deposit and other evidences of indebtedness. While it is the Portfolio's policy
to seek long-term investments, changes will be made whenever management believes
that such changes will strengthen the Portfolio's investments and realization of
its objectives. The Portfolio may also utilize stock index futures and options
to a limited extent, for hedging purposes, although at no time will more than 5%
of the Portfolio's assets be allocated to futures or options premiums. The
Portfolio will pursue its objective by investing a major portion of its assets
in securities of companies which offer prospects for growth of capital. The
Portfolio will consider income potential incidental to growth potential. The
Portfolio expects to include primarily securities that offer growth and
secondarily securities that combine elements of current income, dividend growth
and capital appreciation. The Portfolio may also invest up to 5% of its assets
in foreign securities, including sponsored or unsponsored American Depository
Receipts, and an additional 5% in sponsored or unsponsored American Depository
Receipts only, as more fully described in the Statement of Additional
Information.

To achieve its investment objective, Crowley & Crowley Corp., the investment
advisor (the "Advisor") will attempt to determine the prevailing trend in the
equity market. In order to assess the trend for rising or falling securities,
the Advisor will make use of the stock market moving averages, for example, the
Dow Jones Industrial Average, the Standard & Poor's 500 Average and the NASDAQ
OTC Composite. The Advisor will plot weekly statistics to assess the various
trends. The Advisor will also make use of the weekly advance-decline statistics
and new high-low statistics. When it is determined that there is a prevailing
upward trend in the equity market, more of the Portfolio will be positioned in
common stocks and common stock equivalents. During times when the Advisor
determines that there is a generally rising trend in the stock market, the
Portfolio will attempt to take advantage of this opportunity by generating
returns consisting primarily of net realized and unrealized appreciation in the
value of the securities it holds and, to a lesser degree, from dividends and
interest. The Portfolio will generally select securities based on their current
income, their prospects for dividend growth, and their prospects for capital
appreciation. Since the Portfolio seeks long-term growth of capital and
secondarily current income, its portfolio can be expected to

-12-

<PAGE>

include some securities that offer only growth, others that offer only income
potential, as well as many securities that combine elements of both. When
investing for long-term growth of capital, the Portfolio will seek to buy equity
securities of companies with attractive earnings prospects. A portion of the
portfolio may consist of non-income producing common stocks when their potential
for capital appreciation is believed to be especially promising. The Portfolio
may invest in preferred stocks consistent with its objectives. From time to time
the Portfolio may invest a portion of its assets in cash or debt securities,
when the Advisor feels such a position is advisable in light of economic or
market conditions. When the Advisor anticipates a generally declining trend in
the equity market, the Advisor will begin to move funds into cash and cash
equivalents purely as a temporary defensive position. If the Advisor anticipates
a prolonged or significant decline, then the Portfolio may place most, if not
all, of its funds in cash or cash equivalents.

The Fund's Advisor will attempt to monitor and respond to changing economic and
market conditions and then, if necessary, reposition the Portfolio's assets,
depending on the trend analysis. Trends are analyzed by using a variety of
technical and fundamental indicators. Trends are determined by the Fund's
Advisor's judgment in light of current and past general economic and market
conditions. Among the factors which are included in the analysis are direction
of interest rates, fiscal and monetary policy, economic growth, inflation rates,
industry trends and various moving averages. When a general rising trend of the
securities market is identified, The Crowley Growth Portfolio will position
itself in common stocks and in common stock equivalents that offer prospects for
above-average capital growth.

In order to determine whether a company has above-average capital growth
prospects, the Advisor will find a mean in the growth and earnings of a
particular company over a three to five year period. The Advisor will compare
that mean to the company's actual and projected earnings to determine a
realistic estimate of future growth and earnings. The Advisor will use such
comparative figures, as well as future projections, to compare a company's
growth with the Dow Jones Industrial Average and the Standard & Poor growth
rates. Although the analysis will be done primarily for individual companies,
the Advisor may rely on similar comparative analyses performed on an industry
basis in its selection of individual securities.

THE CROWLEY INCOME PORTFOLIO
The Portfolio's objective is to maximize current income, consistent with prudent
risk, (i.e, reasonable risk to principal). The Portfolio primarily seeks to earn
and pay its shareholders current income while limiting risk to principal through
prudent investing, (i.e., achieving maximum current income with reasonable risk
to principal). The Portfolio seeks to achieve this objective by investing in a
diversified portfolio of debt securities of domestic corporations, United States
Government securities, bankers' acceptances and certificates of deposit,
repurchase agreements and convertible securities. The Portfolio may also
purchase dividend paying common stocks which it believes have better income
potential than fixed-income securities. Fixed-income securities will include
debt securities and preferred stocks, some of which may have a call on common
stock by means of a conversion privilege or attached warrants. Investment in
corporate debt securities will meet a minimum rating of Baa by Moody's Investor
Service, Inc. ("Moody's") or BBB by Standard & Poor's Corporation ("S&P") or, if
not so rated, will have been issued by a corporation having outstanding
indebtedness rated at least Baa or BBB, and dollar-denominated obligations of
foreign issuers issued in the U.S. Such securities are considered to be
"investment grade" and have been assigned one of the four highest grades by
Moody's and S&P. Only up to 5% of the Portfolio's assets may be invested in
corporate debt securities rated Baa by Moody's or BBB by S&P, or that are of
comparable quality. The remaining investments by the Portfolio in corporate debt
securities must be made in securities rated at least A by Moody's or A by S&P,
or be of comparable quality. See "Risk Factors to Consider - Fixed-income

-13-

<PAGE>

Securities." In the event that the rating attributed to a security which the
Portfolio has purchased is reduced below Baa by Moody's or BBB by S&P, the
Portfolio, as soon as practicable, will dispose of the security unless such
disposal would be detrimental to the Portfolio in light of market conditions.

The Portfolio's policy is to invest shorter to intermediate term when interest
rates are historically lower and longer-term when interest rates are
historically higher. The Portfolio may also utilize stock index futures and
options to a limited extent, although at no time will more than 5% of the
Portfolio's assets be allocated to futures or options premiums. The Portfolio
may also invest up to 5% of its assets in foreign securities, including
sponsored or unsponsored American Depository Receipts, and an additional 5% in
sponsored or unsponsored American Depository Receipts only, as more fully
described in the Statement of Additional Information.

In selecting corporate debt securities for the Portfolio, the Advisor reviews
and monitors the creditworthiness of each issuer and issue. Interest rate trends
and specific developments which may affect individual issuers are also analyzed.

When the Advisor anticipates a generally declining trend in fixed-income
securities markets, the Advisor will begin to move more funds into cash and cash
equivalents. If the Advisor anticipates a prolonged or significant decline, then
the Portfolio may place most, if not all, of its funds in cash and cash
equivalents.

The Portfolio's Advisor will attempt to monitor and respond to changing economic
and market conditions and then, if necessary, reposition the Portfolio's assets,
depending on the trend analysis. Trends are analyzed by using a variety of
technical and fundamental indicators. The trends are determined by the Fund's
Advisor's judgment in light of current and past general economic and market
conditions. Among the factors which are included in the analysis, but not
limited to, are the direction of interest rates, trends in yields, fiscal and
monetary policy, economic growth, inflation rates, industry trends and various
moving averages. Fixed-income securities are more dependent upon interest rate
movements than are stocks. In The Crowley Income Portfolio, when a general
rising trend in the fixed-income market is identified, the Portfolio will
position itself in fixed-income securities. If a general rising trend is
identified in both the fixed-income market and the equity market, the Portfolio
will position itself in fixed-income securities, preferred stocks, and high
dividend paying stocks.

The range of maturities of obligations to be held by the Portfolio will
generally be short to intermediate, zero to seven years. The Portfolio intends
to invest one-third of its obligations in each segment of the zero to seven year
range (one segment being obligations maturing within zero to two years, one
segment being obligations which mature within two to four years, and one-third
being obligations maturing within four to seven years). The Portfolio retains
the right to invest in obligations with greater maturities when greater returns
are available because of higher interest rates.

THE CROWLEY DIVERSIFIED MANAGEMENT PORTFOLIO
The Portfolio's objective is high total return consistent with reasonable risk.
The Crowley Diversified Management Portfolio seeks to achieve its investment
objective by investing primarily in shares of other registered investment
companies. While it is the Portfolio's policy to invest primarily in registered
investment companies, the Portfolio may also utilize other investment vehicles
such as cash or cash equivalents (such as repurchase agreements or certificates
of deposit), closed-end investment portfolios, stocks, bonds and other debt
objectives, stock options, stock index options, stock index futures and options

-14-

<PAGE>

thereon. At no time will more than 5% of the Portfolio's assets be allocated to
futures or option premiums. Further, the Portfolio, under normal circumstances,
will not invest in a registered investment company that has a stated policy of
investing more than 50% of its assets in derivatives, and will not invest more
than 35% of its net assets in any registered investment company that may invest
more than 35% of its net assets in bonds rated lower than Baa by Moody's or BBB
by Standard & Poor's. (See the Appendix at the end of this Prospectus for a
description of "junk bonds.")

The Portfolio will invest only in registered investment companies. If a
registered investment company in which the Portfolio invests becomes a
non-registered investment company, the Portfolio will dispose of the securities
of such non-registered investment company that it holds in its portfolio of
securities.

The Portfolio may invest in registered investment companies that are closed-end
funds. After their initial public offering, the shares of closed-end funds
frequently trade on the open market at a price per share which is less than the
net asset value per share, the difference representing the "market discount" of
such shares. Market discount may be due in part to the fact that the shares of
closed-end funds are not redeemable by the holder upon demand to the issuer at
the next determined net asset value, but rather are subject to the principles of
supply and demand in the market. A relative lack of secondary market purchasers
of closed-end fund shares also may contribute to such shares trading at a
discount to their net asset value.

Although the Portfolio intends primarily to purchase shares of closed-end funds
which trade at a market discount and which the investment manager believes
present the opportunity for capital appreciation or increased income due in part
to such market discount, there can be no assurance that the market discount on
shares of any closed-end fund will ever decrease. In fact, it is possible that
this market discount may increase or that the Portfolio may experience realized
or unrealized capital losses due to further decline in the market price of the
securities held in the portfolios of such closed-end funds, thereby adversely
affecting the net asset value of the Portfolio's shares. Similarly, there can be
no assurance that the shares of closed-end funds which trade at a premium will
continue to trade at a premium or that the premium will not decrease subsequent
to a purchase of such shares by the Portfolio. Although no assurances can be
given, the Advisor believes that its market research and analysis and the
diversification policies of the Portfolio will enable the Portfolio to avoid
significant declines in the net asset value of the Portfolio's shares due to
losses related to an individual issuer.

The Portfolio must structure its investments in other investment company shares
to comply with certain provisions of federal and state securities laws. The
Portfolio and its affiliates currently may not hold more than 3% of an
underlying fund's shares. In the event that the Portfolio holds more than 1% of
an underlying fund's shares, the underlying fund is obligated to redeem only 1%
of the underlying fund's outstanding securities during any period of less than
30 days. Consequently, any shares of an underlying fund held by the Portfolio in
excess of 1% of the underlying fund's outstanding shares will be considered
illiquid securities that, together with other such securities, may not exceed
10% of the Portfolio's net assets. When the Portfolio is more heavily
concentrated in small investment companies, it may not be able to readily
dispose of such investment company shares and may be forced to redeem Portfolio
shares in-kind to redeeming Portfolio shareholders by delivering shares of
investment companies that are held in the Portfolio. The Portfolio may be
restricted in its ability to redeem because of the 1% limitation discussed
above; however, Portfolio shareholders who redeem their shares in-kind would not
be so restricted. Applicable fundamental policies are reflected in the
Portfolio's investment restrictions.

-15-
<PAGE>

To achieve the Portfolio's investment objective, the Advisor attempts to
determine the prevailing trend in the equity market. The strategy consists of
moving into those investments which would most benefit from the prevailing
trend. In choosing from among the available investment companies, the Advisor
considers among other things, the prior performance of the underlying investment
company, its management, its performance in both up and down markets, the
current composition of its portfolio and current investment philosophy.

The Advisor attempts to monitor and respond to changing economic and market
conditions as well as monitor the performance of the investments. If necessary,
the Advisor will reposition the Portfolio's assets to meet the changing
environment.

When the Advisor has identified a significant upward trend in a particular
industry group, the Portfolio retains the right to invest in investment
companies that concentrate in a particular industry sector. The Portfolio may
invest in these investment companies, which tend to have greater fluctuations in
value when compared to other categories of investment companies.

The Portfolio expects that it will select the investment companies in which it
will invest based, in part, upon an analysis of the past and projected
performance and investment structure of the investment companies. (See the
Appendix at the end of this Prospectus for a description of the securities that
underlying funds of the Portfolio may invest in.) However, the Portfolio must
consider other factors in the selection of the investment companies. These other
factors include the investment company's size, shareholder services, liquidity,
the investment objective and investment techniques, etc. The Portfolio may be
affected by the losses of such underlying investment companies, and the level or
risk arising from the investment practices of such investment companies (such as
repurchase agreements, quality standards, or lending of securities) and had no
control over the risk taken by such investment companies. The Portfolio can also
elect to redeem (subject to the 1% limitation discussed above) its investment in
an underlying investment company (or sell it to the company as a closed-end one)
if that action is considered necessary or appropriate.

In accordance with the Investment Company Act of 1940, if an underlying fund
submits a matter to shareholders for a vote, the Portfolio will either vote the
shares: (i) in accordance with instructions received from Portfolio
shareholders; or (ii) in the same proportion as the vote of all other holders of
such securities.

RISK FACTORS

Unless otherwise noted, the following risk factors apply to each Portfolio.

Fixed-income Securities. The Portfolios may invest only in fixed-income
securities that are investment grade, which means that they have a rating of Baa
or better as determined by Moody's or BBB or better by S&P or are of comparable
quality. These are the four highest ratings or categories as defined by Moody's
and S&P. Debt securities that are rated Baa by Moody's or BBB by S&P or, if
unrated, are of comparable quality, have speculative characteristics, and
changes in economic conditions or other circumstances are more likely to lead to
a weakened capacity to make principal and interest payments than is the case
with higher rated bonds. Only up to 5% of a Portfolio's assets may be invested
in debt securities rated Baa by Moody's, or BBB by S&P, or if unrated, are
determined to be of comparable quality. Any additional investments in such
securities must be rated A or better by Moody's and S&P, or be deemed to be of
comparable quality.

-16-
<PAGE>

Categories below this have lower ratings and are considered more speculative in
nature. In the event that the rating attributed to a security which a Portfolio
has purchased is reduced below Baa by Moody's or BBB by S&P, the Portfolio, as
soon as practicable, will dispose of the security unless such disposal would be
detrimental to the Portfolio in light of market conditions.

The following four categories of bonds are eligible for investment by the
Portfolios and are included in the categories of bonds classified as investment
grade by Moody's and Standard and Poor's.

Moody's Standard & Poor's
No lower than -

Gilt-Edged Aaa AAA
High-Quality Aa AA
High-Grade A A
Investment-Grade Baa BBB

The Advisor will attempt to monitor and respond to changing economic and market
conditions and if necessary reposition the portfolios' assets depending on the
trend analysis. Trends are analyzed by using a variety of technical and
fundamental indicators. Among the factors which are included in the analysis are
the direction of interest rates, economic growth, industry trends and various
moving averages.

When the Advisor identifies an upward trend, The Crowley Growth and Income
Portfolio will seek to obtain growth over income while managing risk, The
Crowley Income Portfolio will seek to obtain income while managing risk, and The
Crowley Diversified Management Portfolio will seek to obtain high total return
while managing risk. There can be no assurance that the judgment of the Advisor
as to market trends will be correct. In the event that a Portfolio were invested
substantially in common stocks during a downward market trend, because of the
volatility of stocks, it is likely that the value of an investment in the Fund
would decline more rapidly than the decline in the market as a whole.

When a downward trend has been identified protection of principal may be
emphasized over opportunities for gains in each Portfolio. When the Advisor
believes that income producing assets are more appropriate due to the economic
and market conditions an emphasis will be placed on income producing investment
vehicles. During periods of time when the Advisor believes there may be
unacceptable high risks, the portfolios may invest in cash, bank money market
accounts, or money market instruments to protect the value of the Portfolios.

The market value of the interest-bearing debt securities held by the Fund is
affected by changes in interest rates. There is normally an inverse relationship
between the market value of securities sensitive to prevailing interest rates
and actual changes in interest rates; i.e., a decline in interest rates produces
an increase in market value, while an increase in rates produces a decrease in
market value. Moreover, the longer the remaining maturity of a security, the
greater is the effect of interest rate changes on the market value of such a
security. In addition, changes in the ability of an issuer to make payments of
interest and principal and in the market's perception of an issuer's
creditworthiness also affect the market value of the debt securities of that
issuer.

-17-
<PAGE>

Money Market Securities. Each Portfolio may invest in money market securities,
which include: marketable securities issued or guaranteed as to principal and
interest by the government of the United States or by its agencies or
instrumentalities, domestic bank certificates of deposit, bankers' acceptances,
prime commercial paper and repurchase agreements (secured by United States
Treasury or agency obligations).

Cash equivalents will consist of high-quality money market instruments which
return maximum current income and maintain preservation of capital. These
instruments are considered safe because of their short-term maturities,
liquidity and high-quality ratings.

Commercial paper is limited to the two highest ratings of Moody's and S&P. Firms
rate borrowers differently according to their classifications. S&P's rates
companies from A for the highest quality to D for the lowest quality rating. The
A-rated companies are also subdivided into three groups depending on relative
strength. Moody's uses P-1 as their highest rating along with P-2 and P-3.
Commercial Paper may be purchased that is rated P-1 or P-2 by Moody's or A-1 or
A-2 by S&P. Instruments such as commercial paper and notes which are issued by
companies having an outstanding debt rated within these two highest ratings may
be purchased.

Bank Certificates of Deposit and Bankers' Acceptances are limited to U.S. dollar
denominated instruments of domestic banks (generally limited to institutions
with a net worth of at least $100,000,000) and of domestic branches of foreign
banks (limited to institutions having total assets of not less than $1 billion
or its equivalent).

Repurchase Agreements. Under a repurchase agreement the Portfolio acquires a
debt instrument for a relatively short period (usually not more than one week)
subject to the obligations of the seller to repurchase and of the Portfolio to
resell such instrument at a fixed price. The use of repurchase agreements
involves certain risks. For example, if the seller of the agreement defaults on
its obligation to repurchase the underlying securities at a time when the value
of these securities has declined, the Portfolio may incur a loss upon
disposition of them. If the seller of the agreement becomes insolvent and
subject to liquidation or reorganization under the Bankruptcy Code or other
laws, a bankruptcy court may determine that the underlying securities are
collateral not within the control of the Portfolio and therefore subject to sale
by the trustee in bankruptcy. Finally, it is possible that the Portfolio may not
be able to substantiate its interest in the underlying securities. While
management of the Portfolio acknowledges these risks, it is expected that they
can be controlled through stringent security selection and careful monitoring
procedures. A Portfolio may not invest more than 10% of its net assets in
repurchase agreements maturing in more than seven days. A Portfolio may enter
into repurchase agreements with banks or broker-dealers deemed to be
creditworthy by the Advisor and the Advisor will monitor the creditworthiness of
these banks or broker-dealers on an ongoing basis to ensure continued ability of
the Portfolios to engage in repurchase transactions with such institutions.

The Portfolios will select money market securities for investment when such
securities offer a current market rate of return which the Advisor considers
reasonable in relation to the risk of the investment, and the issuer can satisfy
suitable standards of creditworthiness set by the Advisor and described in the
Statement of Additional Information.

Futures And Options. Each Portfolio may seek to protect itself from anticipated
market action by using "hedging" techniques which the Fund expects will generate
gains which would offset losses on other

-18-

<PAGE>

securities owned by the Fund. These hedging techniques could involve
combinations of various techniques, such as the purchase or sale of stocks or
the use of stock options, stock index options, stock index futures and options
thereon to seek to achieve increases in the values of such options and futures
which offset decreases in the values of other securities owned by the Fund. The
Fund's Advisor would select the specific technique(s) based upon analysis of the
Fund's Portfolios, market conditions, relative costs and risks, tax effects and
other factors. There can be variations between the relative movements of
investments and the hedge selected with respect to that investment. This may
increase or decrease the gains or losses each Fund achieves by its hedging
relative to losses or gains on the hedged investments. The following
descriptions illustrate some of the techniques and risks involved in such
hedging. Further information appears in the Statement of Additional Information,
and a more detailed description of futures and options activities is contained
in the Appendix to this Prospectus.

Options. Each Portfolio intends to purchase and/or write ("sell") call and put
options that are traded on U.S. Securities Exchanges. Each Portfolio seeks to
enhance its objective by receiving premiums for writing covered call and put
options. Although each Portfolio receives premium income from these techniques,
any appreciation realized will be limited by the terms of the option. Each
Portfolio may purchase call options to protect against an increase in the price
of securities that it ultimately wants to buy. It may purchase put options to
protect its Portfolio securities against a decline in market value.

Stock Index Futures. Each Portfolio intends to purchase and sell stock index
futures contracts. A Portfolio may sell stock index futures contracts in
anticipation of, or during a market decline to attempt to offset the decrease in
market value of its common stocks that might otherwise result; and it may
purchase such contracts in order to offset increases in the cost of common
stocks that it intends to purchase.

Options on Stock Indexes and Stock Index Futures. Each Portfolio intends to
purchase and/or write call and put options on stock indexes which are traded on
U.S. Exchanges. The Portfolios also intend to purchase and/or write call and put
options on stock index futures which are traded on U.S. Exchanges. Options on
stock index futures are similar to options on stocks or options on stock
indexes.

The selection of the foregoing techniques or any combination of them to be used
at any particular time will depend upon an assessment of the relative
implementation costs and the liquidity of the particular secondary market in
which such options, stock index futures, and options on stock indexes and stock
index futures are traded.

Risks of Transactions in Stock Options, Stock Index Options and Options on Stock
Index Futures. An option position may be closed out only on an Exchange which
provides a secondary market for an option of the same series. Although the
Portfolios will generally purchase or write only those options for which the
Advisor believes there is an active secondary market, there is no assurance that
a liquid secondary market on an Exchange will exist for any particular option.
In such event, it might not be possible to effect closing transactions in
particular options, with the result that the Portfolio would have to exercise
its options in order to realize any profit or allow the option to expire. The
inability to close-out these options may result in a loss to the Portfolio. If
exercised, the Portfolio would incur brokerage commissions upon the subsequent
disposition of underlying securities acquired. An imperfect correlation exists
between the options and securities being hedged. Success of any hedging position
depends on the ability of the investment advisor to predict a stock and interest
rate movement. The skills necessary for successful use of hedges are different
than those used in the selection of equity or fixed-income securities. The
Advisor's officer who will be

-19-
<PAGE>

responsible for hedging does not have experience in managing portfolios which
trade in such hedging instruments. If the Advisor is incorrect in its forecasts
regarding market values, interest rates, and other applicable factors, the
Portfolio utilizing these investment techniques may be in a worse position than
if the investment techniques had never been used.

While the Portfolios have not adopted fundamental limitations on their futures
or options activities, they must comply with certain requirements of the U.S.
Securities and Exchange Commission and the Commodities Futures Trading
Commission. For example, these provisions require that each Portfolio shall not
purchase or sell any futures or puts or calls on futures if immediately
thereafter the sum of the amount of the Portfolio's margin deposits (both
initial and variation deposits) and premiums paid for outstanding puts and/or
calls on futures would exceed 5% of the value of its total assets. This
limitation could, however, change if regulatory provisions applicable to the
Portfolios were to be changed. The Portfolios will not engage in transactions in
future contracts or related options for speculation but only as a hedge against
changes resulting from market conditions in the values of securities held in the
Portfolio or which a Portfolio intends to purchase. Although it is not a
fundamental policy, a Portfolio will not purchase or sell futures contracts or
purchase or sell related options if immediately thereafter more than 30% of its
net assets would be so invested. Shareholders will be notified in advance of any
change in this limitation.

By writing a call option, the Portfolio limits its opportunity to profit from
any increase in the market value of the underlying security above the exercise
price of the option. By writing a put option, the Portfolio assumes the risk
that it may be required to purchase the underlying security for an exercise
price higher than its current market value, resulting in a potential capital
loss unless the security subsequently appreciates in value.

Risks of Investing in Other Investment Companies. The Crowley Diversified
Management Portfolio, by investing in shares of investment companies, indirectly
pays a portion of the operating expenses, management expenses and brokerage
costs of such companies as well as the expense of operating the Portfolios.
Thus, the Portfolio's investors may indirectly pay higher total operating
expenses and other costs than they might pay by owning the underlying investment
companies directly. The Portfolio attempts to identify investment companies that
have demonstrated superior management in the past, thus possibly offsetting
these factors by producing better results and/or lower costs and expenses than
other investment companies. There can be no assurance that this result will be
achieved.

Further, the Portfolio may invest in investment companies which concentrate
(invest 25% or more of the value of their assets) in a particular industry.
These companies tend to have greater fluctuation in value than other investment
companies.

The Crowley Diversified Management Portfolio may invest in shares of registered
investment companies which invest in foreign securities.

Foreign Securities and Currency Considerations
The Crowley Diversified Management Portfolio may invest in shares of registered
investment companies which invest in foreign securities. Investments in
securities of foreign issuers may involve greater risks that those of U.S.
issuers. There is generally less information available to the public about
non-U.S. companies and less government regulation and supervision of non-U.S.
stock exchanges, brokers and listed companies. Non-U.S. companies are not
subject to uniform global accounting, auditing and financial reporting
standards,

-20-
<PAGE>

practices and requirements. Securities of some non-U.S. companies are less
liquid and their prices more volatile than securities of comparable U.S.
companies. Securities trading practices abroad may offer less protection to
investors. Settlement of transactions in some non-U.S. markets may be delayed or
may be less frequent than in the U.S., which could affect the liquidity of the
underlying fund's portfolio, and, in turn, the Portfolio. Additionally, in some
non-U.S. countries, there is the possibility of expropriation or confiscatory
taxation, limitations on the removal of securities, property or other assets of
the fund, political or social instability, or diplomatic developments which
could affect U.S. investments in those countries. The Portfolio intends to
invest in such registered investment companies that diversify broadly among
countries, but reserves the right to invest in investment companies that invest
a substantial portion of assets in one or more countries if economic and
business conditions warrant such investments. The Advisor will take these
factors into consideration in managing the Portfolio's investments.

The U.S. dollar market value of the underlying funds' investments and of
dividends and interest earned by the underlying funds, and in turn, the
Portfolio may be significantly affected by changes in currency exchange rates.
Some currency prices may be volatile, and there is the possibility of
governmental controls on currency exchange or governmental intervention in
currency markets, which could adversely affect the underlying funds and, in
turn, the Portfolio. Although underlying funds may attempt to manage currency
exchange rate risks, there is no assurance that the underlying funds will do so
at an appropriate time or that it will be able to predict exchange rates
accurately. For example, if any of the funds increase their exposure to a
currency and that currency's price subsequently falls, such currency management
may result in increased losses to those funds. Similarly, if any of the funds
decrease their exposure to a currency, and the currency's price rises, those
funds will lose the opportunity to participate in the currency's appreciation.
These events may adversely affect the Portfolio.

Portfolio Turnover. It is anticipated that the annualized portfolio turnover
rate for The Crowley Growth and Income Portfolio, The Crowley Income Portfolio
and The Crowley Diversified Management Portfolio generally will not exceed 150%,
100% and 200%, respectively. The portfolio turnover rate of the underlying funds
in The Crowley Diversified Management Portfolio will affect indirectly gains and
losses, and transaction costs, of that Portfolio. High portfolio turnover (100%
or more) involves additional transaction costs (such as brokerage commissions or
sales charges) which are borne by the Portfolio, and might involve adverse tax
effects. (See "Dividends, Distributions and Taxes.")

INVESTMENT RESTRICTIONS

The investment restrictions set forth below have been adopted by the Fund as
fundamental policies for each Portfolio, to limit certain risks that may result
from investment in specific types of securities or from engaging in certain
kinds of transactions addressed by such restrictions. They may not be changed
without the affirmative vote of the holders of a majority of the outstanding
voting securities of the Portfolio. Certain of these policies are detailed
below, while other policies are set forth in the Statement of Additional
Information. Changes in values of particular Portfolio assets or the assets of
the Portfolio as a whole will not cause a violation of the investment
restrictions so long as percentage restrictions are observed by the Portfolio at
the time it purchases any security.

-21-
<PAGE>

Each Portfolio's investment restrictions specifically provide that the Portfolio
will not:

(a) as to 75% of the Portfolio's total assets, invest more than 5%
of its total assets in the securities of any one issuer. (This
limitation does not apply to cash and cash items, obligations
issued or guaranteed by the United States Government, its
agencies or instrumentalities.)

(b) purchase more than 10% of the voting securities, or more than
10% of any class of securities of any issuer. For purposes of
this restriction, all outstanding fixed-income securities of
an issuer are considered as one class.

(c) purchase or sell commodities or commodity futures contracts,
provided that each Portfolio may enter into futures contracts
and related options and make initial and variation margin
deposits in connection therewith.

(d) make loans of money or securities, except: (i) by the purchase
of fixed-income obligations in which the Portfolio may invest
consistent with its investment objective and policies; or (ii)
by investment in repurchase agreements (see "Investment
Objective and Policies").

(e) invest in securities of any company if, to the knowledge of
the Portfolio, any officer or director of the Fund or the
Advisor owns more than 0.5% of the outstanding securities of
such company and such officers and directors (who own more
than 0.5%) in the aggregate own more than 5% of the
outstanding securities of such company.

(f) borrow money, except the Portfolio may borrow from banks: (i)
for temporary or emergency purposes in an amount not exceeding
5% of the Portfolio's assets; or (ii) to meet redemption
requests that might otherwise require the untimely disposition
of portfolio securities, in an amount up to 33 1/3% of the
value of the Portfolio's total assets (including the amount
borrowed) valued at market less liabilities (not including the
amount borrowed) at the time the borrowing was made. While
borrowings exceed 5% of the value of the Portfolio's total
assets, the Portfolio will not purchase securities. Interest
paid on borrowings will reduce net income.

(g) pledge, hypothecate, mortgage or otherwise encumber its
assets, except in an amount up to 33 1/3% of the value of its
net assets but only to secure borrowings for temporary or
emergency purposes, such as to effect redemptions.

(h) purchase the securities of any issuer, if, as a result, more
than 10% of the value of a Portfolio's net assets would be
invested in securities that are subject to legal or
contractual restrictions on resale ("restricted securities"),
in securities for which there are no readily available market
quotations, or in repurchase agreements maturing in more than
seven days, if all such securities would constitute more than
10% of the Portfolio's net assets.

(i) for The Crowley Diversified Management Portfolio only -

-22-

<PAGE>

o invest in any investment company if a purchase of its
shares would result in the Portfolio and its
affiliates owning more than 3% of the total
outstanding stock of such investment company.

o invest in any investment company which itself does
not qualify as a diversified investment company under
the Internal Revenue Code.

CAPITAL STOCK

The authorized capital stock of The Crowley Portfolio Group, Inc. consists of
500,000,000 shares of common stock with a par value of $0.01 each. At the
present time, 150,000,000 shares of such stock have been allocated to each of
The Crowley Growth and Income Portfolio, The Crowley Income Portfolio and The
Crowley Diversified Management Portfolio. Each share has equal dividend, voting,
liquidation and redemption rights. There are no conversion or preemptive rights.
Shares, when issued, will be fully-paid and non-assessable. Fractional shares
have proportional voting rights. Shares of the Portfolios do not have cumulative
voting rights, which means that the holders of more than 50% of the shares
voting for the election of directors can elect all of the directors if they
choose to do so and, in such event, the holders of the remaining shares will not
be able to elect any person to the Board of Directors. The Portfolios'
shareholders will vote together to elect directors and on other matters
affecting the entire corporation, but will vote separately on matters affecting
separate series, such as changing the investment objective or restrictions
governing a Portfolio.

Shareholder inquiries should be made directly to the Distributor at (302)
529-1717.

MANAGEMENT OF THE FUND

Board of Directors. The Fund's Board of Directors are fiduciaries for the
Portfolios' shareholders and are governed by the law of the State of Maryland in
this regard. They establish policy for the operation of the Portfolios, and
appoint the Officers who conduct the daily business of the Portfolios.

Investment Advisor. The investments of each Portfolio are managed by Crowley &
Crowley Corp., a corporation organized on August 28, 1989 under the laws of the
state of Delaware, (the "Advisor"), 1813 Marsh Road, Suite H, Wilmington, DE
19810, under separate management contracts (the "Management Contracts".) The
Management Contracts became effective on December 6, 1989 for The Crowley Growth
and Income Portfolio (formerly, The Crowley Growth Portfolio) and The Crowley
Income Portfolio; April 1, 1995 for The Crowley Diversified Management
Portfolio. The Management Contracts were initially approved by shareholders of
The Crowley Growth and Income Portfolio and The Crowley Income Portfolio on
November 29, 1990 and by the initial shareholder of the Crowley Diversified
Management Portfolio on April 3, 1995. The Management Contracts are approved
annually by the Board of Directors, including a majority of the Board of
Directors who are not parties to the Management Contract or interested persons
(as such term is defined in the Investment Company Act of 1940, as amended) of
any party to the Agreement, voting in person at a meeting called for the purpose
of voting on such approval. The Management Contracts provide that Crowley &
Crowley Corp. shall supervise and manage each Portfolio's investments and shall
determine each Portfolio's portfolio transactions, subject to periodic review
and

-23-
<PAGE>

ratification by the Fund's Directors. The Advisor is responsible for selecting
brokers and dealers to execute transactions for the Portfolios. The Board has
also authorized the Advisor and the Fund's officers to consider sales of
Portfolio shares when allocating brokerage, subject to the policy of obtaining
best price and execution on such transactions.

Pursuant to its Management Contract with each Portfolio, the Advisor will manage
the assets of each Portfolio in accordance with the stated objective, policies
and restrictions of the Portfolio and manage the business affairs of the Fund
(subject to the supervision of the Fund's Board of Directors and the Fund's
officers). The Advisor will also provide administrative and clerical services,
keep certain books and records in connection with its services to the Fund and
supervise the services rendered to the Fund by other persons. The Advisor has
also authorized any of its directors, officers and employees who have been
elected as directors or officers of the Fund to serve in the capacities in which
they have been elected. Services furnished by the Advisor under the contracts
may be furnished through the medium of any such directors and officers.

As compensation for its services as Advisor, the Advisor receives a fee,
computed daily and payable monthly, at the annualized rate of 1.00% of the
average daily net assets of The Crowley Growth and Income Portfolio and The
Crowley Diversified Management Portfolio, and 0.60% of the average daily net
assets of The Crowley Income Portfolio. The Advisor's fee with respect to The
Crowley Growth and Income Portfolio and The Crowley Diversified Management
Portfolio is higher than that paid by most other investment companies. The
Advisor pays all expenses incurred by it in rendering management services to the
Fund including the costs of accounting, bookkeeping and data processing services
provided in its role as administrator. The Fund bears its costs of operations.
These expenses include, but are not limited to: the fee of the Advisor, taxes,
brokerage fees, fees associated with calculating the net asset value of each
Portfolio daily, legal fees, custodian and auditing fees, and printing and other
expenses which are not expressly assumed by the Advisor under the Management
Contracts. For the fiscal year ending November 30, 1996, The Crowley Growth and
Income Portfolio, The Crowley Income Portfolio and The Crowley Diversified
Management Portfolio incurred expenses equal to 1.95%, 1.39%, and 2.22%,
respectively, of average net assets.

The Advisor has committed to the Fund to offset the management fees payable by
The Crowley Diversified Management Portfolio by the fees that Crowley
Securities, the Portfolios' Distributor and an affiliate of the Advisor,
receives in connection with the purchase and sale of investment company
securities for such Portfolio for which Crowley Securities is the dealer of
record and which have an associated sales charge, 12b-1 or shareholder servicing
fee. The Advisor will offset management fees on a monthly basis, consistent with
its receipt of such fees.

Frederick J. Crowley, Jr., Vice President of the Fund, and Robert A. Crowley,
President of the Fund, each own 50% of the voting common stock of the Advisor.
The Advisor was organized in 1986 and principally provides investment advice to
individuals. The Advisor does not provide investment advice to any other
investment companies.

Each Management Contract also identifies the right of the Advisor to the use of
the name "Crowley," and the Fund may be required to change its name if the
Advisor ceases to act as advisor to the Portfolios.

-24-
<PAGE>

The Advisor, pursuant to the Management Contracts, also serves as the
Portfolios' administrator. The Management Contracts provide that the Advisor
will furnish each Portfolio with office facilities, with any ordinary clerical
and bookkeeping services not furnished by the custodian, or distributor and with
Portfolio accounting services. Such services include the maintenance of the
Fund's books and records of each Portfolio. The Advisor has not agreed to
perform daily pricing for the Fund. The Fund will perform that function.

The portfolio manager for each Portfolio is Mr. Robert A. Crowley, who has been
managing all the Portfolios since their inception, in 1989 for The Crowley
Growth and Income Portfolio and The Crowley Income Portfolio, and 1995 for The
Crowley Diversified Management Portfolio. Mr. Crowley, who received his
Chartered Financial Analyst certification in 1990, received his Bachelor of
Science Degree in Business Administration from the University of Delaware in
1980 and his Masters Degree in Business Administration from George Washington
University in 1985. In addition to his responsibilities in managing the
Portfolios, Mr. Crowley is a financial planner with Crowley & Crowley Corp.
Prior to managing the Portfolios, Mr. Crowley managed individual securities
accounts in addition to engaging in financial planning activities.

DISTRIBUTION OF SHARES

Crowley Securities (the "Distributor") is each Portfolio's distributor under
separate Distribution Agreements for each Portfolio dated December 6, 1989
(April 1, 1995 for The Crowley Diversified Management Portfolio), and renewed
annually by the Portfolios' Board of Directors. The Distributor promotes the
distribution of the shares of each Portfolio in accordance with each respective
agreement. Frederick J. Crowley, Jr. and Robert A. Crowley, officers of the
Advisor, are also equal general partners and registered representatives of the
Distributor, which is, therefore, an affiliated person of the Fund. The
Distributor's offices are at 1813 Marsh Road, Suite H, Wilmington, DE 19810.

All orders for the purchase of shares of a Portfolio are subject to acceptance
or rejection by the Fund in its discretion. The sale of shares will be suspended
during any period when the determination of net asset value is suspended, and
may be suspended by the Board of Directors whenever in its judgment it is in the
best interest of the Fund to do so.

CUSTODIAN

Wilmington Trust Company, Rodney Square North, Wilmington, DE, 19890, acts as
the Custodian of the securities and cash of each Portfolio.

TRANSFER AND DIVIDEND DISBURSING AGENT

The Crowley Financial Group, Inc. ("CFG" or the "Transfer Agent") serves as the
Fund's transfer agent, dividend disbursing agent, and as redemption agent for
redemptions. CFG is under common control with the Advisor and the Distributor
and as compensation for its services, receives an asset-based fee.

-25-

<PAGE>

GENERAL OPERATIONS

Except as indicated above, the Fund is responsible for the payment of its
expenses, including: (a) the fees payable to the Advisor, the Distributor and
the Transfer Agent; (b) the fees and expenses of directors who are not
affiliated with the Advisor or the Distributor; (c) the fees and certain
expenses of the Fund's Custodian; (d) the charges and expenses of the Fund's
legal counsel and independent accountants; (e) brokers' commissions and any
issue or transfer taxes chargeable to a Portfolio in connection with its
securities transactions; (f) all taxes and corporate fees payable by the Fund to
governmental agencies; (g) the fees of any trade association of which the Fund
is a member; (h) the cost of stock certificates, if any, representing shares of
the Portfolio; (i) reimbursements of the organization expenses of the Fund and
the fees and expenses involved in registering and maintaining registration of
the Fund and its shares with the Securities and Exchange Commission laws, and
the preparation and printing of the Fund's registration statements and
prospectuses for such purposes; (j) allocable communications expenses with
respect to investor services and all expenses of shareholders and directors
meetings and of preparing, printing and mailing prospectuses and reports to
shareholders; (k) litigation and indemnification expenses and other
extraordinary expenses not incurred in the ordinary course of the Fund's
business; and (l) compensation for employees of the Fund.

DIVIDENDS, DISTRIBUTIONS AND TAXES

Each Portfolio will declare and pay annual dividends to its shareholders of
substantially all of its net investment income, if any, earned during the year
from its investments, and each Portfolio will distribute net realized capital
gains, if any, once with respect to each year. Expenses of the Portfolios,
including the advisory fee, are accrued each day. Reinvestments of dividends and
distributions in additional shares of a Portfolio will be made on the payment
date at the net asset value determined on the record date of the dividend or
distribution unless the shareholder has elected in writing to receive dividends
or distributions in cash. An election may be changed by notifying the Transfer
Agent in writing thirty days prior to record date.

The Crowley Portfolio Group, Inc. is a series corporation. Each Portfolio of The
Crowley Portfolio Group, Inc. is treated as a separate corporation for federal
income and excise tax purposes. Each Portfolio intends to qualify as a regulated
investment company under the Internal Revenue Code of 1986 (the "Code"). Such
qualification removes from a Portfolio any liability for Federal income taxes
upon the portion of its income distributed to shareholders and makes Federal
income tax upon such distributed income generated by each Portfolio's
investments the sole responsibility of the shareholders. Continued qualification
requires each Portfolio to distribute to its shareholders each year
substantially all of its income and capital gains. The Code imposes a
nondeductible, 4% excise tax on a regulated investment company which does not
distribute to investors in each calendar year, an amount equal to: (i) 98% of
its calendar year ordinary income; (ii) 98% of its capital gain net income (the
excess of short and long-term capital gain over short and long-term capital
loss) for the one-year period ending each November 30; and (iii) 100% of any
undistributed ordinary or capital gain net income from the prior year. The Fund
intends to declare and pay dividends and capital gain distributions in a manner
to avoid imposition of the excise tax. The Portfolios also intend to comply with
other Code requirements such as: (1) appropriate diversification of portfolio
investments; (2) realization of 90% of annual gross income from dividends,
interest, gains from sales of securities, or other "qualifying

-26-

<PAGE>

income;" and (3) realization of less than 30% of gross income from gains on sale
or other disposition of securities held less than three months.

Any net capital gains recognized by a Portfolio will be distributed to its
investors without need to offset (for Federal tax purposes) such gains against
any net capital losses of another Portfolio.

Any dividend or distribution to a shareholder shortly after the purchase of a
Portfolio's shares will have the effect of reducing the net asset value per
share of such shares by the amount of the dividend or distribution. While such
payment (whether made in cash or reinvested in shares) is in effect a return of
capital, it may be subject to income taxes. Regardless of the length of time a
Portfolio's shares have been owned by shareholders who are subject to federal
income taxes, distributions from long-term capital gains are taxable as such.
The net capital gain of individuals is taxed at the same rates and in the same
manner as ordinary income, except that the maximum federal rate of tax on the
net capital gain of individuals is 28%. The net capital gain of corporations is
taxed at the same rate as ordinary corporate income.

The dividends paid by a Portfolio may qualify for the 70% dividends received
deduction for corporations. The Fund will provide an information return to
shareholders describing the Federal tax status of the dividends paid by a
Portfolio during the preceding year within 60 days after the end of each year as
required by present tax law. Individual shareholders will receive Form 1099-DIV
and Form 1099-B as required by present tax law during January of each year. If
any Portfolio makes a distribution after the close of its fiscal year which is
attributable to income or gains earned in such earlier year, then the Portfolio
shall send a notice to its shareholders describing the amount and character of
such distribution within 60 days after the close of the year in which the
distribution is made. Shareholders should consult their tax advisors concerning
the state or local taxation of such dividends, and the Federal, state and local
taxation of capital gains distributions. Corporate investors should recognize
that the investor must hold Portfolio shares for more than 45 days to qualify
any dividends (or portion thereof) for the dividends received deduction.
Dividends declared in December of any year to investors of record on any date in
December will be deemed to have been received by the investors and paid by the
series on the record date, provided such dividends are paid before February 1 of
the following year.

In accordance with law, the Fund may be required to withhold a portion of
dividends, redemptions or capital gains paid to an investor and remit such
amount to the Internal Revenue Service, if the investor fails to furnish the
Fund with a correct taxpayer identification number, if the investor fails to
supply the Fund with a tax identification number altogether, if the investor
fails to make a required certification, or if the Internal Revenue Service
notifies the Fund to withhold a portion of such distributions from an investor's
account. Certain entities, such as certain types of trusts, may be exempt from
this withholding provided they file an appropriate exemption certificate with
the Fund.

DETERMINATION OF NET ASSET VALUE

The net asset value of a Portfolio share is determined by the Fund as of the
close of regular trading on each day that the New York Stock Exchange is open
for unrestricted trading from Monday through Friday and on which there is a
purchase or redemption of a Portfolio's share. The net asset value is determined
by the Fund by dividing the value of the Portfolio's securities, plus any cash
and other assets, less all liabilities,

-27-

<PAGE>

by the number of shares outstanding. Expenses and fees of the Portfolio,
including the advisory and the distributor fees, are accrued daily and taken
into account for the purpose of determining the net asset value.

Portfolio securities listed or traded on a securities exchange for which
representative market quotations are available, will be valued at the last
quoted sales price on the security's principal exchange on that day. Listed
securities not traded on an exchange that day, and other securities which are
traded in the over-the-counter market, will be valued at the last reported bid
price in the market on that day, if any. Securities for which market quotations
are not readily available and all other assets will be valued at their
respective fair market value as determined in good faith by, or under procedures
established by, the Board of Directors.

Money market securities with less than sixty days remaining to maturity when
acquired by a Portfolio will be valued on an amortized cost basis by a
Portfolio, excluding unrealized gains or losses thereon from the valuation. This
is accomplished by valuing the security at cost and then assuming a constant
amortization to maturity of any premium or discount. If the Portfolio acquires a
money market security with more than sixty days remaining to its maturity, it
will be valued at current market value until the 60th day prior to maturity, and
will then be valued on an amortized cost basis based upon the value on such date
unless the Board determines during such 60 day period that this amortized cost
value does not represent fair market value.

HOW TO PURCHASE SHARES

Shares of the Fund are offered for sale to the public through its Distributor at
the public offering price thereof next computed after the receipt of both the
purchase order by the Distributor, and payment for shares purchased by the
Custodian. The public offering price is equal to the net asset value of the
shares of a Portfolio. Net asset value per share of each Portfolio is determined
as of the close of the New York Stock Exchange on each day when the Exchange is
open for business and during which there is a sufficient degree of trading in a
Portfolio's securities that the current net asset value of the shares might be
materially affected by the changes in value of such securities but only when
there has been a purchase or redemption of a Portfolio's share.

The minimum initial investment in the Fund is $5,000, and each subsequent
investment must be not less than $1,000. The minimum amount may consist of a
single investment in one Portfolio or an aggregate investment in any combination
of the Portfolios. An investment by a spouse or parent may be combined with an
investment of the other spouse or children to meet the minimum initial or
subsequent investment limit. Further, an investment by a tax-qualified plan may
be combined with a personal investment to meet the minimum initial or subsequent
investment limit.

Investments in any Portfolio may be made by completing the application form and
mailing it together with your check payable to The Crowley Portfolio Group,
Inc., to:

Crowley Securities
1813 Marsh Road
Suite H
Wilmington, Delaware 19810

-28-

<PAGE>

Subsequent investments may be made at any time (minimum additional investment
$1,000) by mailing a check, payable to The Crowley Portfolio Group, Inc., to the
Distributor at the above address. The Distributor may be reached at (302)
529-1717.

Investments in any Portfolio may also be made through investment dealers which
have sales agreements with Crowley Securities, the principal underwriter of the
Fund's shares. Such dealers should send the investor's Investment Application
and payment for the shares to the Fund. Payment should be made by check.
Purchase orders placed by dealers will be confirmed at the public offering price
calculated next after receipt of the properly completed Investment Application
and payment by Wilmington Trust, the Custodian. It is the responsibility of
dealers to transmit purchase orders so that they will be received by the
Custodian by 4:00 p.m. Orders received by Wilmington Trust after 4:00 p.m. will
be priced at the public offering price in effect at 4:00 p.m. on the next
business day. To date, Crowley Securities has not retained any selling dealers.

Each Portfolio reserves the right in its sole discretion: (i) to suspend the
offering of its shares; and (ii) to reject purchase orders when in the best
interest of the Portfolio.

Your purchase will be made in full and fractional shares of the Portfolio
calculated to three decimal places. Shares are normally held in an open account
for shareholders by each Portfolio, which will send to shareholders a statement
of shares owned at the time of each transaction. Share certificates for full
shares are, of course, available at any time by written request at no additional
cost to the shareholder. No certificates will be issued for fractional shares.

HOW TO REDEEM SHARES

Shareholders may redeem all or a portion of their shares without charge on any
day on which the Portfolios calculate their net asset values (see "Determination
of Net Asset Value"). Redemptions of shares of each Portfolio of the Fund will
be effective at the net asset value per share next determined after the receipt
of a redemption request by the Transfer Agent, meeting the requirements
described below. Written redemption requests should be submitted to: The Crowley
Financial Group, Inc., 1813 Marsh Road, Suite H, Wilmington, DE 19810.
Shareholders who have questions about a redemption should contact the Transfer
Agent at (302) 529-1717, although all redemption requests must be in writing.
The Portfolios normally send redemption proceeds on the next business day, but
in any event redemption proceeds are sent within seven days of receipt of a
redemption request in proper form.

A written redemption request to the Transfer Agent must: (i) identify the
Portfolio and the shareholder's account number; (ii) state the number of shares
to be redeemed; and (iii) be signed by each registered owner exactly as the
shares are registered. If the shares to be redeemed were issued in certificate
form, the certificates must be endorsed for transfer (or be accompanied by an
endorsed stock power) and must be submitted to the Transfer Agent together with
the redemption request. A redemption request for an amount in excess of $5,000,
or for any amount if for payment other than to the shareholder of record, or if
the proceeds are to be sent elsewhere than the address of record, must be
accompanied by signature guarantees. The guarantor of a signature must be a
national bank or trust company (not a savings bank), a member bank of the
Federal Reserve System or a member firm of a national securities exchange. The
Transfer Agent may require additional supporting documents for redemptions made
by corporations, executors, administrators, trustees and guardians. A redemption
request will not be deemed to be properly received until the Transfer

-29-

<PAGE>

Agent receives all required documents in proper form. Questions with respect to
the proper form for redemption requests should be directed to the Transfer Agent
at the numbers listed on the cover of this Prospectus.

Delivery of the proceeds of a redemption of shares purchased and paid for by
check shortly before the receipt of the request may be delayed until the
Portfolio determines that its Custodian Bank has completed collection of the
purchase check which may take up to 15 days from the purchase date. The Board of
Directors may suspend the right of redemption or postpone the date of payment
during any period when: (a) trading on the New York Stock Exchange is restricted
as determined by the Securities and Exchange Commission or such Exchange is
closed for other than weekends and holidays; (b) the Securities and Exchange
Commission has by order permitted such suspension; or (c) an emergency, as
defined by rules of the Commission, exists during which time the sale of
Portfolio securities or valuation of securities held by the Portfolio are not
reasonably practicable.

Each Portfolio also reserves the right to redeem an investor's account where the
aggregate account is worth less than the minimum initial investment required
when the account is established, presently $5,000. (The minimum initial
investment may be divided between the Portfolios. Any redemption of shares from
an inactive account established with a minimum investment may reduce the account
below the minimum initial investment, and could subject the account to such
redemption). The Portfolio will advise the shareholder of such intention in
writing at least sixty (60) days prior to effecting such redemption, during
which time the shareholder may purchase additional shares in any amount
necessary to bring the account back to $5,000, and the Portfolio will not redeem
an investor's account which is worth less than $5,000 solely on account of a
market decline.

If the Board determines that it would be detrimental to the best interest of the
remaining shareholders of a Portfolio to make payment in cash, the Portfolio may
pay the redemption price in whole or in part by distribution in-kind of
securities from the Portfolio, within certain limits prescribed by the United
States Securities and Exchange Commission. Such securities will be valued on the
basis of the procedures used to determine the net asset value at the time of the
redemption. If shares are redeemed in-kind, the redeeming shareholder will incur
brokerage costs in converting the assets into cash.

SPECIAL PLANS

Each Portfolio also offers its shares for use in certain Tax Sheltered (such as
IRA, Keogh, 401(k) and 403(b)(7) plans) and Withdrawal Plans. Information on
these Plans is available from the Portfolios' Distributor or by reviewing the
Statement of Additional Information.

Exchange Privilege. Shareholders of a Portfolio may exchange all or part of
their shares into any other Portfolio, at net asset value, with a maximum of two
exchanges per calendar year. There is no fee for exchanges. Shares of a
Portfolio are available only in states where such shares may lawfully be sold.
The amount invested must equal or exceed the required minimum investment of the
Portfolio which is purchased. A shareholder requesting an exchange will be sent
a current prospectus and an exchange authorization form to authorize the
exchange. To exchange shares, shareholders should contact the Portfolios'
Distributor. Exchanges may not be made by telephone. The Fund retains the right
to modify the terms of its exchange privilege or to terminate the privilege.

-30-

<PAGE>

An exchange, for tax purposes, constitutes the sale of one Portfolio and the
purchase of another. The sale may involve either a capital gain or loss to the
shareholder for federal income tax purposes.

PERFORMANCE

Total return data may from time to time be included in advertisements about the
Portfolios.

"Total return" of a Portfolio of the Fund refers to the average annual
compounded rates of return over certain periods that would equate an initial
amount invested at the beginning of a stated period from which the maximum sales
load is deducted, to the ending redeemable value of the investment. The Fund
will provide total returns for the Portfolios for one, five and ten-year
periods, as well as from inception. Nonstandardized total return quotations may
also be presented for other periods, or to reflect voluntary expense limitations
in effect for the Fund in question during the relevant period, or to reflect
investment at reduced sales charge levels or net asset value. Any quotation of
total return not reflecting the maximum sales charge, or which reflects any
voluntary expense limitations, would be reduced if the maximum sales charge were
used or Fund expenses were not voluntarily limited.

The Fund may also include the yield of The Crowley Income Portfolio, accompanied
by its total return, in advertising and other written material. Yield will be
computed by dividing the net investment income per share earned during a recent
one-month period by the maximum offering price per share of the Portfolio
(reduced by any undeclared earned income expected to be paid shortly as a
dividend) on the last day of the period.

The Portfolios may also compare their investment performance to appropriate
market indexes such as the S&P Index and to appropriate mutual fund indexes;
they may advertise their ranking compared to other similar mutual funds as
reported by industry analysts such as Lipper Analytical Services, Inc.

All data will be based on a Portfolio's past investment results and does not
predict future performance. Investment performance, which will vary, is based on
many factors, including market conditions, the composition of the investments in
a Portfolio, and a Portfolio's operating expenses. Investment performance also
often reflects the risk associated with a Portfolio's investment objective and
policies. These factors should be considered when comparing a Portfolio to other
mutual funds and other investment vehicles.

-31-

<PAGE>

MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE

The line graphs depicted below for The Crowley Growth and Income Portfolio, The
Crowley Income Portfolio, and The Crowley Diversified Management Portfolio,
respectively, illustrate the performance of $10,000 in each Portfolio from
November 30, 1989 to November 30, 1996 (April 3, 1995 to November 30, 1996 for
The Crowley Diversified Management Portfolio), as compared to certain
broad-based indexes.

The Crowley Growth and Income Portfolio [Line graph and total return table
appear here.]

Past Performance is not predictive of future performance.
Source: LIPPER ANALYTICAL SERVICES, INC.

The line graph illustrates the past performance of The Crowley Growth and Income
Portfolio as compared to the Lipper Growth & Income Index. The chart illustrates
that a $10,000 investment in November of 1989 would be worth $24,278 for the
Lipper Growth & Income Index and $15,710 for The Crowley Growth and Income
Portfolio through November 30, 1996. The average annual total return chart for
The Crowley Growth and Income Portfolio appears next to the line graph. This
chart illustrates that the average annual total return for The Crowley Growth
and Income Portfolio appears next to the line graph. This chart illustrates that
the average annual total return for The Crowley Growth and Income Portfolio was
5.55%, 6.47% and 6.67% for the one, five and since inception time periods,
respectively.

The Crowley Growth and Income Portfolio ("T.C.G.P.") is an investment vehicle
which seeks to achieve long term growth of capital and, secondarily, current
income. The investment vehicles for this Portfolio are common stocks and fixed
income investments. During times when the Advisor perceives that stock prices
are fully valued for investment purposes, the Advisor will increase the
percentage of fixed income investments. In the Advisor's judgement, this has
been the case for most of the existence of the Portfolio, and the Advisor has
chosen to invest in a balance of stocks, preferred stocks, money market
instruments and bonds, both U.S. government and corporate.

During the fiscal year ended November 30, 1996, "T.C.G.P." had an average annual
total return of 5.55%. An index of funds which invest in stocks and bonds (the
"Lipper Growth & Income Index") returned 23.80% for the same period. The Advisor
cannot determine the composition of each fund within the index, but would
estimate that the average fund in the index had maintained a higher stock
exposure than that of "T.C.G.P." The historical balance of investments of
"T.C.G.P." is more reflective of the Lipper Growth & Income Index than of a
growth index, but the Portfolio also maintained a much larger cash and cash
equivalent position than funds within the Lipper Growth and Income Index. The
Advisor continues to believe that stocks are fully valued and that a correction
is needed to make the risk-reward ratio of investing in stocks more attractive
for the long-term value investor.

For the five year period ended November 30, 1996, the market value of the
"T.C.G.P." would have been $13,685 and $21,331 for the Lipper Growth & Income
Index. Since inception, "T.C.G.P." produced an investment value of $15,710,
while the investment value for the Lipper Growth & Income Index would have been
$24,278. The Advisor attributes the difference in investment value to the
conservative management philosophy and the continuance of an overextended stock
market cycle. Management does not believe that

-32-

<PAGE>

investors in the "T.C.G.P." have experienced a below market level of risk due to
the greater-than- anticipated cash positions of the Portfolio during it's
initial years of operation.

The Crowley Income Portfolio

[Line graph and total return table appear here.]

Past Performance is not predictive of future performance.
Source: LIPPER ANALYTICAL SERVICES, INC.

The line graph illustrates the past performance of The Crowley Income Portfolio
as compared to the Lipper Investment Grade Bond Index ("Lipper Corp. A") and the
Lipper Short Investment Grade Bond Index ("Lipper Short A"). The chart
illustrates that a $10,000 investment in November of 1989 would be worth $15,798
for the Lipper Short A, $17,681 for the Lipper Corp. A., and $16,089 for The
Crowley Income Portfolio through November 30, 1996. The average annual total
return chart for The Crowley Income Portfolio appears next to the line graph.
This chart illustrates that the average annual total return for The Crowley
Income Portfolio appears next to the line graph. This chart illustrates that the
average annual total return for The Crowley Income Portfolio was 4.16%, 6.86%
and 7.03% for the one, five and since inception time periods, respectively.

The objective of The Crowley Income Portfolio ("T.C.I.P") is to maximize current
income, consistent with prudent risk. The Portfolio has the flexibility to
invest in several types of fixed income vehicles but the majority of its
investments must be by definition investment grade, which means in one of the
four top ratings of certain nationally recognized statistical rating
organizations. (See "Risk Factors-Fixed-income Securities"). Since inception,
T.C.I.P. has invested almost exclusively in high quality corporate bonds,
government and government agency bonds. By investing in such bonds, the
Portfolio has been able to reduce its exposure to the the risk of default by any
one issuer. Over the seven years of operations, the Portfolio has not held any
securities that have defaulted or missed a coupon payment.

A second area of risk management has been through the use of maturity length.
Over the past seven years, the Advisor has taken a short to intermediate
approach to maturities. By selecting bonds which mature or are callable in
several years, the Advisor attempts to control the price volatility of the
investments within the Portfolio. This should add an element of downside risk
protection if interest rates were to rise significantly.

As of November 30, 1996, the dollar weighted average Portfolio maturity was 10.5
years, as compared to 5.8 years as of November 30, 1995. Given the rise of
interest rates over the last 12 month period, the Advisor has decided to start
to increase the weighted average maturity length of its investments. The Advisor
has also invested a portion of the Portfolio in preferred stocks. T.C.I.P. had a
total return of 4.16% for the fiscal year ended November, 30, 1996. By
comparison, the Lipper Investment Grade Bond Index ("Corporate A") had an
investment return of 5.21% for the same period. The Lipper Short Investment
Grade Bond Index ("Short A") had an investment return of 5.44%. Both indexes may
be comparable to the Portfolio, depending on maturity and duration during a
given period.

-33-

<PAGE>

For the five year period ended November 30, 1996, the investment value for the
Short A would have been $13,185, Corporate A would have been $14,584, while the
T.C.I.P. produced an investment value of $13,501. Since inception, T.C.I.P.
produced an investment value of $16,089, while the Corporate A would have been
$17,681 and $15,798 for Short A. Over the first six years, the Advisor continued
to maintain a shorter weighted average maturity and has recently started to
increase the weighted average maturity. During the first six years, the weighted
average maturity was more similar to that of a Short A Index and currently
reflects more of a Corporate A index.

The Crowley Diversified Management Portfolio

[Line graph and total return table appear here.]

Past Performance is not predictive of future performance.
Source: LIPPER ANALYTICAL SERVICES, INC.

The line graph illustrates the past performance of The Crowley Diversified
Management Portfolio as compared to the Lipper Growth Index ("Lipper Growth").
The chart illustrates that a $10,000 investment in November of 1989 would be
worth $14,689 for the Lipper Growth and $12,195 for The Crowley Diversified
Management Portfolio through November 30, 1996. The average annual total return
chart for The Crowley Diversified Management Portfolio appears next to the line
graph. This chart illustrates that the average annual total return for The
Crowley Diversified Management Portfolio appears next to the line graph. This
chart illustrates that the average annual total return for The Crowley
Diversified Management Portfolio was 13.87% and 10.45% for the one and since
inception time periods, respectively.

The Crowley Diversified Management Portfolio ("T.C.D.M.") seeks high total
return consistent with reasonable risk. The Portfolio invests primarily in
shares of other registered investment companies. Since inception in April of
1995, T.C.D.M. had an investment value of $12,195. There is not a readily
available index for similar portfolios, so management has chosen the Lipper
Growth Index as the broad-based index with which to compare T.C.D.M. During the
same period (April 3, 1995 to November 30, 1996), the index would have produced
an investment value of $14,689. During the fiscal year ended November 30, 1996,
T.C.D.M. had a total return of 13.87%. The Lipper Growth Index had a total
return of 21.09%. At year end, T.C.D.M. had investments in 35 mutual funds in 8
classifications. The greatest weighting was that of the Growth category
(15.31%), followed by Small Company (12.52%), Growth/Income (10.47%), Aggressive
Growth (10.01%). The international portion of the Portfolio was at 27.18% as of
November 30, 1996. Management intends to increase the number of different
companies invested in to approximately 50, while continuing to stay close to
fully invested.

A-1
<PAGE>

APPENDIX

INVESTMENT POLICIES AND PRACTICES OF UNDERLYING FUNDS
Convertible Securities

Certain preferred stocks and debt securities that may be held by an underlying
fund have conversion features allowing the holder to convert securities into
another specified security (usually common stock) of the same issuer at a
specified conversion ratio (e.g., two shares of preferred for one share of
common stock) at some specified future date or period. The market value of
convertible securities generally includes a premium that reflects the conversion
right. That premium may be negligible or substantial. To the extent that any
preferred stock or debt security remains unconverted after the expiration of the
conversion period, the market value will fall to the extent represented by that
premium.

Foreign Investments

The Crowley Diversified Management Portfolio (the "Portfolio") may invest in
certain underlying funds which invest all or a portion of their assets in
foreign securities. Investing in securities of non-U.S. companies, which are
generally denominated in foreign currencies, and utilization of forward foreign
currency exchange contracts and other currency hedging techniques involve
certain considerations comprising both opportunity and risk not typically
associated with investing in U.S. dollar-denominated securities. Risks unique to
international investing include: (1) restrictions on foreign investment and on
repatriation of capital; (2) fluctuations in currency exchange rates; (3) costs
of converting foreign currency into U.S. dollars; (4) price volatility and less
liquidity; (5) settlement practices, including delays, which may differ from
those customary in U.S. markets; (6) exposure to political and economic risks,
including the risk of nationalization, expropriation of assets, and war; (7)
possible imposition of foreign taxes and exchange control and currency
restrictions; (8) lack of uniform accounting, auditing, and financial reporting
standards; (9) less governmental supervision of securities markets, brokers and
issuers of securities; (10) less financial information available to investors;
(11) difficulty in enforcing legal rights outside the U.S.; and (12) higher
costs, including custodial fees. These risks are often heightened for
investments in emerging or developing countries.

Foreign Currency Transactions

Foreign securities in which the underlying funds invest are subject to currency
risk, (i.e, the risk that the U.S. dollar value of these securities may be
affected favorably or unfavorably by changes in foreign currency exchange rates
and exchange control regulations.) To manage this risk and facilitate the
purchase and sale of foreign securities, these underlying funds may engage in
foreign currency transactions involving the purchase and sale of forward foreign
currency exchange contracts. Although foreign currency transactions will be used
primarily to protect the underlying funds from adverse currency movements, they
also involve the risk that anticipated currency movements will not be accurately
predicted and the underlying funds' total return could be adversely affected.

Futures Contracts

An underlying fund may enter into futures contracts for the purchase or sale of
debt securities and stock indexes. A futures contract is an agreement between
two parties to buy and sell a security or an index for

A-2

<PAGE>

a set price on a future date. Futures contracts are traded on designated
"contract markets" which, through their clearing corporations, guarantee
performance of the contracts.

Generally, if market interest rates increase, the value of outstanding debt
securities declines (and vice versa). Entering into a futures contract for the
sale of securities has an effect similar to the actual sale of securities,
although sale of the futures contract might be accomplished more easily and
quickly. For example, if a fund holds long-term U.S. Government securities and
it anticipates a rise in long-term interest rates, it could, in lieu of
disposing of its portfolio securities, enter into futures contracts for the sale
of similar long-term securities. If rates increased and the value of the fund's
portfolio securities declined, the value of the fund's futures contracts would
increase, thereby protecting the fund by preventing the net asset value from
declining as much as it otherwise would have. Similarly, entering into futures
contracts for the purchase of securities has an effect similar to the actual
purchase of the underlying securities but permits the continued holding of
securities other than the underlying securities. For example, if the fund
expects long-term interest rates to decline, it might enter into futures
contracts for the purchase of long-term securities so that it could gain rapid
market exposure that may offset anticipated increases in the cost of securities
it intends to purchase while continuing to hold higher-yield short-term
securities or waiting for the long-term market to stabilize.

A stock index futures contract may be used to hedge an underlying fund's
portfolio with regard to market risk as distinguished from risk relating to a
specific security. A stock index futures contract does not require the physical
delivery of securities but merely provides for profits and losses resulting from
changes in the market value of the contract to be credited or debited at the
close of each trading day to the respective accounts of the parties to the
contract. On the contract's expiration date, a final cash settlement occurs.
Changes in the market value of a particular stock index futures contract reflect
changes in the specified index of equity securities on which the future is
based.

There are several risks in connection with the use of futures contracts. In the
event of an imperfect correlation between the futures contract and the portfolio
position which is intended to be protected, the desired protection may not be
obtained, and the fund may be exposed to risk of loss. Further, unanticipated
changes in interest rates or stock price movements may result in a poorer
overall performance for the fund than if it had not entered into futures
contracts on debt securities or stock indexes.

In addition, the market prices of futures contracts may be affected by certain
factors. First, all participants in the futures market are subject to margin
deposit and maintenance requirements. Rather than meeting additional margin
deposit requirements, investors may close futures contracts through offsetting
transactions which could distort the normal relationship between the securities
and futures markets. Second, from the point of view of speculators, the deposit
requirements in the futures market are less onerous than margin requirements in
the securities market. Therefore, increased participation by speculators in the
futures market may also cause temporary price distortions.

Finally, positions in futures contracts may be closed out only on an exchange or
board of trade which provides a secondary market for such futures. There is no
assurance that a liquid secondary market on an exchange or board of trade will
exist for any particular contract or at any particular time.

A-3

<PAGE>

Options on Futures Contracts

A fund also may purchase and sell listed put and call options on futures
contracts. An option on a futures contract gives the purchaser the right, in
return for the premium paid, to assume a position in a futures contract (a long
position if the option is a call and a short position if the option is a put) at
a specified exercise price at any time during the option period. When an option
on a futures contract is exercised, delivery of the futures position is
accompanied by cash representing the difference between the current market price
of the futures contract and the exercise price of the option. The fund may
purchase put options on futures contracts in lieu of, and for the same purpose
as, a sale of a futures contract. It also may purchase such put options in order
to hedge a long position in the underlying futures contract in the same manner
as it purchases "protective puts" on securities.

As with options on securities, the holder of an option may terminate a position
by selling an option of the same series. There is no guarantee that such closing
transactions can be effected. The fund is required to deposit initial margin and
maintenance margin with respect to put and call options on futures contracts
written by it pursuant to brokers' requirements similar to those applicable to
futures contracts described above, and, in addition, net option premiums
received will be included as initial margin deposits.

In addition to the risks which apply to all options transactions, there are
several special risks relating to options on futures contracts. The ability to
establish and close out positions on such options will be subject to the
development and maintenance of a liquid secondary market. It is not certain that
this market will develop. Compared to the use of futures contracts, the purchase
of options on futures contracts involves less potential risk to the fund,
because the maximum amount at risk is the premium paid for the options (plus
transaction costs). However, there may be circumstances when the use of an
option on a futures contract would result in a loss to the fund when the use of
a futures contract would not, such as when there is no movement in the prices of
the underlying securities. Writing an option on a futures contract involves
risks similar to those arising in the sale of futures contracts as described
above.

Options Activities

An underlying fund may write (i.e., sell) listed call options ("calls") if the
calls are "covered" throughout the life of the option. A call is "covered" if
the fund owns the optioned securities. When a fund writes a call, it receives a
premium and gives the purchaser the right to buy the underlying security at any
time during the call period (usually not more than nine months in the case of
common stock) at a fixed exercise price regardless of market price changes
during the call period. If the call is exercised, the fund will forgo any gain
from an increase in the market price of the underlying security over the
exercise price.

A fund may purchase a call on securities only to effect a "closing purchase
transaction" which is the purchase of a call covering the same underlying
security and having the same exercise price and expiration date as a call
previously written by the fund on which it wishes to terminate its obligation.
If the fund is unable to effect a closing purchase transaction, it will not be
able to sell the underlying security until the call previously written by the
fund expires (or until the call is exercised and the fund delivers the
underlying security).

An underlying fund also may write and purchase put options ("puts"). When a fund
writes a put, it receives a premium and gives the purchaser of the put the right
to sell the underlying security to the fund at the

A-4

<PAGE>

exercise price at any time during the option period. When a fund purchases a
put, it pays a premium in return for the right to sell the underlying security
at the exercise price at any time during the option period. An underlying fund
also may purchase stock index puts which differ from puts on individual
securities in that they are settled in cash based on the values of the
securities in the underlying index rather than by delivery of the underlying
securities. Purchase of a stock index put is designed to protect against decline
in the value of the portfolio generally rather than an individual security in
the portfolio. If any put is not exercised or sold, it will become worthless on
its expiration date.

A fund's option positions may be closed out only on an exchange which provides a
secondary market for options of the same series, but there can be no assurance
that a liquid secondary market will exist at a given time for any particular
option. In this regard, trading in options on certain securities (such as U.S.
Government securities) is relatively new so that it is impossible to predict to
what extent liquid markets will develop or continue.

The underlying fund's custodian, or a securities depository acting for it,
generally acts as escrow agent for the securities on which the fund has written
puts or calls or for other securities acceptable for such escrow, so that no
margin deposit is required of the fund. Until the underlying securities are
released from escrow, they cannot be sold by the fund.

In the event of a shortage of the underlying securities deliverable on exercise
of an option, the Options Clearing Corporation has the authority to permit
other, generally comparable securities to be delivered in fulfillment of option
exercise obligations. If the Options Clearing Corporation exercises its
discretionary authority to allow such other securities to be delivered, it may
also adjust the exercise prices of the affected options by setting different
prices at which otherwise ineligible securities may be delivered. As an
alternative to permitting such substitute deliveries, the Options Clearing
Corporation may impose special exercise settlement procedures.

Hedging

An underlying fund may employ many of the investment techniques described in
this APPENDIX not only for investment purposes, but also for hedging purposes.
For example, an underlying fund may purchase or sell put and call options on
common stocks to hedge against movements in individual common stock prices or
purchase and sell stock index futures and related options to hedge against
market wide movements in common stock prices. Although such hedging techniques
generally tend to minimize the risk of loss that is hedged against, they also
may limit commensurately the potential gain that might have resulted had the
hedging transaction not occurred. Also, the desired protection generally
resulting from hedging transactions may not always be achieved.

Junk Bonds

Bonds which are rated BB and below by Standard & Poor's and Ba and below by
Moody's (See "RISK FACTORS - Fixed-income Securities" for a more detailed
explanation of bond ratings) are commonly known as "junk bonds." Investing in
junk bonds involves special risks in addition to the risks associated with
investments in higher rated debt securities. Junk bonds may be regarded as
predominately speculative with respect to the issuer's continuing ability to
meet principal and interest payments.

A-5

<PAGE>

Junk bonds may be more susceptible to real or perceived adverse economic and
competitive industry conditions than higher grade securities. The prices of junk
bonds have been found to be less sensitive to interest rate changes than more
highly rated investments but more sensitive to adverse economic downturns or
individual corporate developments. A projection of an economic downturn or of a
period of rising interest rates, for example, could cause a decline in junk
bonds prices, because the advent of a recession could lessen the ability of a
highly leveraged company to make principal and interest payments on its debt
securities. If the issuer of junk bonds defaults, a fund may incur additional
expenses to seek recovery. In the case of junk bonds structured as zero coupon
or payment-in-kind securities, the market prices of such securities are affected
to a greater extent by interest rate changes and, therefore, tend to be more
volatile than securities which pay interest periodically and in cash.

The secondary markets on which junk bonds are traded may be less liquid than the
market for higher grade securities. Less liquidity in the secondary trading
markets could adversely affect and cause large fluctuations in the daily net
asset value of a fund's shares. Adverse publicity and investor perceptions,
whether or not based on fundamental analysis, may decrease the values and
liquidity of junk bonds, especially in a thinly traded market.

There may be special tax considerations associated with investing in junk bonds
structured as zero coupon or payment-in-kind securities. A fund records the
interest on these securities as income even though it receives no cash interest
until the security's maturity or payment date. A fund will be required to
distribute all or substantially all such amounts annually and may have to obtain
the cash to do so by selling securities which otherwise would continue to be
held. Shareholders will be taxed on these distributions.

The use of credit ratings as the sole method of evaluating junk bonds can
involve certain risks. For example, credit ratings evaluate the safety of
principal and interest payments, not the market value risk of junk bonds. Also,
credit rating agencies may fail to change credit ratings in a timely fashion to
reflect events since the security was last rated.

Illiquid and Restricted Securities

An underlying fund may invest not more than 15% of its net assets in securities
for which there is no readily available market ("illiquid securities") including
securities the disposition of which would be subject to legal restrictions
(so-called "restricted securities") and repurchase agreements having more than
seven days to maturity. A considerable period of time may elapse between an
underlying fund's decision to dispose of such securities and the time when the
fund is able to dispose of them, during which time the value of the securities
(and therefore the value of the underlying fund's shares held by the Portfolio)
could decline.

Industry Concentration

An underlying fund may concentrate its investments within one industry. Because
the scope of investment alternatives within an industry is limited, the value of
the shares of such an underlying fund may be subject to greater market
fluctuation than an investment in a fund which invests in a broader range of
securities.

A-6

<PAGE>

Leverage through Borrowing

An underlying fund may borrow up to 33 1/3% of the value of its net assets on an
unsecured basis from banks to increase its holdings of portfolio securities.
Under the 1940 Act, a fund is required to maintain continuous asset coverage of
300% with respect to such borrowings and to sell (within three days) sufficient
portfolio holdings to restore such coverage if it should decline to less than
300% due to market fluctuations or otherwise, even if disadvantageous from an
investment standpoint. Leveraging will exaggerate the effect of any increase or
decrease in the value of portfolio securities on a fund's net asset value, and
money borrowed will be subject to interest costs (which may include commitment
fees and/or the cost of maintaining minimum average balances) which may or may
not exceed the interest and option premiums received from the securities
purchased with borrowed funds.

Loans of Portfolio Securities

An underlying fund may lend its portfolio securities provided that: (1) the loan
is secured continuously by collateral consisting of U.S. Government securities
or cash or cash equivalents maintained on a daily mark-to-market basis in an
amount at least equal to the current market value of the securities loaned; (2)
the fund may at any time call the loan and obtain the return of the securities
loaned; (3) the fund will receive any interest or dividends paid on the loaned
securities; and (4) the aggregate market value of securities loaned will not at
any time exceed one-third of the total assets of the fund. Loans of securities
involve a risk that the borrower may fail to return the securities or may fail
to provide additional collateral.

Master Demand Notes

Although the Portfolio itself will not do so, underlying funds (particularly
money market mutual funds) may invest up to 100% of their assets in master
demand notes. Master demand notes are unsecured obligations of U.S. corporations
redeemable upon notice that permit investment by a fund of fluctuating amounts
at varying rates of interest pursuant to direct arrangements between the fund
and the issuing corporation. Because they are direct arrangements between the
fund and the issuing corporation, there is no secondary market for the notes.
However, they are redeemable at face value plus accrued interest at any time.

Repurchase Agreements

Underlying funds, particularly money market funds, may enter into repurchase
agreements with banks and broker-dealers under which they acquire securities
subject to an agreement with the seller to repurchase the securities at an
agreed upon time and price. These agreements are considered under the 1940 Act
to be loans by the purchaser collateralized by the underlying securities. If the
seller should default on its obligation to repurchase the securities, the
underlying fund may experience delay or difficulties in exercising its rights to
realize upon the securities held as collateral and might incur a loss if the
value of the securities should decline.

Short Sales

An underlying fund may sell securities short. In a short sale, a fund sells
stock which it does not own, making delivery with securities "borrowed" from a
broker. The fund is then obligated to replace the security borrowed by
purchasing it at the market price at the time of replacement. This price may not
be less than

A-7

<PAGE>

the price at which the security was sold by the fund. Until the security is
replaced, the fund is required to pay to the lender any dividends or interest
which accrue during the period of the loan. In order to borrow the security, the
fund may also have to pay a premium which would increase the cost of the
security sold. The proceeds of the short sale will be retained by the broker to
the extent necessary to meet margin requirements until the short position is
closed out.

The fund also must deposit in a segregated account an amount of cash or U.S.
Government securities equal to the difference between: (a) the market value of
the securities sold short at the time they were sold short; and (b) the value of
the collateral deposited with the broker in connection with the short sale (not
including the proceeds from the short sale). While the short position is open,
the fund must maintain daily the segregated account at such a level that: (1)
the amount deposited in it plus the amount deposited with the broker as
collateral equals the current market value of the securities sold short; and (2)
the amount deposited in it plus the amount deposited with the broker as
collateral is not less than the market value of the securities at the time they
were sold short. Depending upon market conditions, up to 80% of the value of a
fund's net assets may be deposited as collateral for the obligation to replace
securities borrowed to effect short sales and allocated to a segregated account
in connection with short sales.

The fund will incur a loss as a result of the short sale if the price of the
security increases between the date of the short sale and the date on which the
fund replaces the borrowed security. The fund will realize a gain if the
security declines in price between those dates. The amount of any gain will be
decreased and the amount of any loss increased by the amount of any premium,
dividends, or interest the fund may be required to pay in connection with a
short sale.

A short sale is "against the box" if at all times when the short position is
open the fund owns an equal amount of the securities or securities convertible
into, or exchangeable without further consideration for, securities of the same
issue as the securities sold short. Such a transaction serves to defer a gain or
loss for federal income tax purposes.

Warrants

An underlying fund may invest in warrants, which are options to purchase equity
securities at specific prices valid for a specific period of time. The prices do
not necessarily move parallel to the prices of the underlying securities.
Warrants have no voting rights, receive no dividends, and have no rights with
respect to the assets of the issuer. If a warrant is not exercised within the
specified time period, it will become worthless and the fund will lose the
purchase price and the right to purchase the underlying security.

A-8

<PAGE>

INVESTMENT ADVISOR
Crowley & Crowley Corp.
1813 Marsh Road
Suite H
Wilmington, DE 19810

DISTRIBUTOR
Crowley Securities
1813 Marsh Road
Suite H
Wilmington, DE 19810

TRANSFER AGENT
The Crowley Financial Group, Inc.
1813 Marsh Road
Suite H
Wilmington, DE 19810

CUSTODIAN
Wilmington Trust Company
Rodney Square North
Wilmington, DE 19890

LEGAL COUNSEL
Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, PA 19103-7098

AUDITORS
Tait, Weller & Baker
Two Penn Center
Suite 700
Philadelphia, PA 19102-1707

<PAGE>

The Crowley Portfolio Group, Inc.
Prospectus
March 30, 1997

Contents Page
Expenses of the Portfolios.................................................
Highlights.................................................................
Financial Highlights.......................................................
Investment Objectives and Policies
of Each Portfolio.......................................................
Risk Factors ..............................................................
Investment Restrictions....................................................
Capital Stock..............................................................
Management of the Fund.....................................................
Distribution of Shares.....................................................
Custodian..................................................................
Transfer and Dividend Disbursing Agent.....................................
General Operations.........................................................
Dividends, Distributions and Taxes.........................................
Determination of Net Asset Value...........................................
How to Purchase Shares.....................................................
How to Redeem Shares.......................................................
Special Plans..............................................................
Performance................................................................
Management's Discussion of Fund Performance................................
Appendix...................................................................

<PAGE>

THE CROWLEY PORTFOLIO GROUP, INC.

STATEMENT OF ADDITIONAL INFORMATION DATED MARCH 30, 1997

1813 Marsh Road, Suite H, Wilmington, DE 19810

The Distributor may be telephoned at (302) 529-1717

A copy of the Prospectus of The Crowley Portfolio Group, Inc. (the "Fund") is
available without charge upon written request to the Fund.

The Fund is an open-end diversified investment company currently offering three
series of shares: The Crowley Growth and Income Portfolio (formerly, The Crowley
Growth Portfolio; see "Investment Objectives and Policies of Each Portfolio -
The Crowley Growth and Income Portfolio" in the Fund's prospectus), The Crowley
Income Portfolio, and The Crowley Diversified Management Portfolio (each, a
"Portfolio"). The shares of each Portfolio may be purchased or redeemed at any
time. Purchases will be effected at the public offering price and redemptions
will be effected at net asset value next computed after the receipt of the
investor's request.

The objective of The Crowley Growth and Income Portfolio is long-term growth of
capital for investors, with the secondary objective being current income. The
objective of The Crowley Income Portfolio is to maximize current income,
consistent with prudent risk (i.e. reasonable risk to principal). The objective
of The Crowley Diversified Management Portfolio is high total return consistent
with reasonable risk. The Portfolios will use a variety of investment strategies
in an effort to balance portfolio risks and to hedge market risks. There can be
no assurance that the objectives of the Portfolios will be achieved.

THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND
SHOULD BE READ IN CONNECTION WITH THE FUND'S PROSPECTUS DATED MARCH
30, 1997. RETAIN THIS STATEMENT OF ADDITIONAL INFORMATION FOR FUTURE
REFERENCE.

<PAGE>

TABLE OF CONTENTS

Page

INVESTMENT OBJECTIVES AND POLICIES.........................................
Money Market Securities...........................................
Foreign Investments...............................................
Investment Company Securities.....................................
Portfolio Turnover................................................

INVESTMENT RESTRICTIONS....................................................

INVESTMENT ADVISOR.........................................................

DISTRIBUTOR................................................................

ALLOCATION OF PORTFOLIO BROKERAGE..........................................

TRANSFER AGENCY FUNCTION...................................................

PURCHASE OF SHARES.........................................................
Tax-Sheltered Retirement Plans....................................

OFFICERS AND DIRECTORS OF THE FUND.........................................

OWNERSHIP OF SECURITIES....................................................

GENERAL INFORMATION........................................................
Audits and Reports................................................
Custodian ........................................................

PERFORMANCE................................................................
Comparisons and Advertisements....................................

FINANCIAL STATEMENTS.......................................................

-1-

<PAGE>

INVESTMENT OBJECTIVES AND POLICIES

Each Portfolio seeks to achieve its objective by making investments selected in
accordance with the Portfolio's investment restrictions and policies. Each
Portfolio will vary its investment strategy to achieve its objective, as
described in the Portfolio's prospectus. This Statement of Additional
Information contains further information concerning the techniques and
operations of each Portfolio, the securities in which it will invest, and the
policies it will follow.

Money Market Securities
Although The Crowley Growth and Income Portfolio (formerly, The Crowley Growth
Portfolio) intends to invest in common stocks and common stock equivalents, The
Crowley Income Portfolio will primarily invest in debt securities,
dividend-paying stocks and preferred stocks; The Crowley Diversified Management
Portfolio concentrates its investments in shares of registered investment
companies. Each Portfolio may invest its assets directly in money market
securities whenever deemed appropriate by the advisor to achieve the Portfolio's
investment objective. It may invest, without limitation, in such securities for
temporary defensive purposes.

Securities issued or guaranteed as to principal and interest by the United
States government ("Government Securities") include a variety of Treasury
securities, which differ in their interest rates, maturities and dates of issue.
Treasury bills have a maturity of one year or less; Treasury notes have
maturities of one to ten years; Treasury bonds generally have a maturity of
greater than five years. The Portfolios will only acquire Government Securities
which are supported by the "full faith and credit" of the United States.
Securities which are backed by the full faith and credit of the United States
include Treasury bills, Treasury notes, Treasury bonds, and obligations of the
Government National Mortgage Association, the Farmers Home Administration, and
the Export- Import Bank. The Portfolios' direct investments in money market
securities will generally favor securities with shorter maturities (maturities
of less than 60 days) which are less affected by price fluctuations than those
with longer maturities.

Certificates of deposit are certificates issued against funds deposited in a
commercial bank or a savings and loan association for a definite period of time
and earning a specified return. Bankers' acceptances are negotiable drafts or
bills of exchange, normally drawn by an importer or exporter to pay for specific
merchandise, which are "accepted" by a bank, meaning, in effect, that the bank
unconditionally agrees to pay the face value of the instrument on maturity.
Investments in bank certificates of deposit and bankers' acceptances are
generally limited to domestic banks and savings and loan associations that are
members of the Federal Deposit Insurance Corporation or Federal Savings and Loan
Insurance Corporation having a net worth of at least one hundred million dollars
("Domestic Banks") and domestic branches of foreign banks (limited to
institutions having total assets not less than $1 billion or its equivalent).

Investments in prime commercial paper may be made in notes, drafts, or similar
instruments payable on demand or having a maturity at the time of issuance not
exceeding nine months, exclusive of days of grace, or any renewal thereof
payable on demand or having a maturity likewise limited.

Under a repurchase agreement the Portfolio acquires a debt instrument for a
relatively short period (usually not more than one week) subject to the
obligation of the seller to repurchase and the

-2-

<PAGE>

Portfolio to resell such debt instrument at a fixed price. The Portfolio will
enter into repurchase agreements only with banks which are members of the
Federal Reserve System, or securities dealers who are members of a national
securities exchange or are market-makers in government securities and report to
the Market Reports Division of the Federal Reserve Bank of New York and, in
either case, only where the debt instrument collateralizing the repurchase
agreement is a U.S. Treasury or agency obligation supported by the full faith
and credit of the U.S. A repurchase agreement may also be viewed as the loan of
money by the Portfolio to the seller. The resale price specified is normally in
excess of the purchase price, reflecting an agreed upon interest rate. The rate
is effective for the period of time the Portfolio is invested in the agreement
and may not be related to the coupon rate on the underlying security. The term
of these repurchase agreements will usually be short (from overnight to one
week) and at no time will a Portfolio invest in repurchase agreements of more
than sixty days. The securities which are collateral for the repurchase
agreements, however, may have maturity dates in excess of sixty days from the
effective date of the repurchase agreement. A Portfolio will always receive, as
collateral, securities whose market value, including accrued interest, will be
at least equal to 102% of the dollar amount to be paid to the Portfolio under
each agreement at its maturity, and the Portfolio will make payment for such
securities only upon physical delivery or evidence of book entry transfer to the
account of the Custodian. If the seller defaults, the Portfolio might incur a
loss if the value of the collateral securing the repurchase agreement declines,
and might incur disposition costs in connection with liquidation of the
collateral. In addition, if bankruptcy proceedings are commenced with respect to
the seller of the security, collection of the collateral by the Portfolio may be
delayed or limited. A Portfolio may not enter into a repurchase agreement with
more than seven days to maturity if, as a result, more than 10% of the market
value of the Portfolio's net assets would be invested in such repurchase
agreements together with any other illiquid assets.

Foreign Investments
The Portfolios have the authority to invest up to 5% of their respective assets
in foreign securities, including sponsored or unsponsored American Depository
Receipts ("ADRs") for securities of foreign issuers, and the authority to invest
an additional 5% of their respective assets in sponsored or unsponsored American
Depository Receipts only. ADRs are receipts typically issued by a U.S. bank or
trust company evidencing ownership of underlying foreign securities. These
securities are not denominated in the same currency as their underlying
securities, but rather in U.S. dollars. The issuers of unsponsored ADRs are not
obligated to disclose material information in the United States and therefore
there may not be a correlation between such information and the market value of
unsponsored ADRs. Investment in foreign issuers, directly or through ADRs,
involves certain risks which are in addition to the usual risks inherent in
domestic investments. Such risks include the fact that there may be less
publicly available information about foreign companies, and such companies are
generally not subject to uniform accounting, auditing and financial reporting
standards.

Investment Company Securities
Each investment company in which The Crowley Diversified Management Portfolio
invests will be a registered investment company, and will operate subject to a
variety of regulatory constraints. While such regulation does not guarantee the
investment success of an investment company, or assure that it will not suffer
investment losses, the Advisor believes that such investment companies provide a
sound foundation upon which to base an investment portfolio. By investing in a
broad spectrum

-3-

<PAGE>

of such companies the Portfolio hopes to benefit from the collective research
and analysis of many experienced investment personnel.

There are many types of investment companies. All maintain portfolios which are
generally liquid, but can be composed of different kinds of securities and
involve different objectives. Such companies may seek only income, only
appreciation, or various combinations of these. They may invest in money market
securities, short or long-term bonds, dividend producing stocks, tax-exempt
municipal securities, or a variety of other instruments. They may seek
speculative or conservative investments ranging from securities issued by new
companies to securities issued by "blue-chip" companies. An investment company
which has a policy of holding 80% of its assets in debt securities maturing in
thirteen months or less, or which holds itself out as a "money market fund,"
will be treated as a money market fund by the Portfolio.

The Portfolio's investment advisor will be responsible for monitoring and
evaluating these kinds of factors to select investment company fund securities
for the Portfolio in accordance with the policies and techniques described in
the prospectus.

The Portfolio, by investing in shares of investment companies, indirectly pay a
portion of the operating expenses, management expenses and brokerage costs of
such companies as well as the expense of operating the Portfolio. Thus, the
Portfolio's investors will indirectly pay higher total operating expenses and
other costs than they would pay by owning the underlying investment companies
directly. The Portfolio attempts to identify investment companies that have
demonstrated superior management in the past, thus possibly offsetting these
factors by producing better results and/or lower costs and expenses than other
investment companies. There can be no assurance that this result will be
achieved.

Investment decisions by the investment advisors of the underlying funds are made
independently of the Portfolio and its Advisor. Therefore, the investment
advisor of one underlying fund may be purchasing shares of the same issuer whose
shares are being sold by the investment advisor of another such fund. The result
of this would be an indirect expense to the Portfolio without accomplishing any
investment purpose.

The Portfolio expects that it will select the investment companies in which it
will invest based, in part, upon an analysis of the past and projected
performance and investment structure of the investment companies. However, the
Portfolio must consider other factors in the selection of investment companies.
These other factors include the investment company's size, shareholder services,
liquidity, investment objective and investment techniques, etc. The Portfolio
will be affected by the losses of its underlying investment companies, and the
level of risk arising from the investment practices of such investment companies
(such as repurchase agreements, quality standards, or lending of securities) and
has no control over the risks taken by such investment companies. The Portfolio
can also elect to redeem (subject to the 1% limitation discussed in the
Portfolio's prospectus) its investment in an underlying investment company (or
sell it if the company is a closed-end one) if that action is considered
necessary or appropriate.

Portfolio Turnover

-4-

<PAGE>

It is not the policy of the Portfolios to purchase or sell securities for
short-term trading purposes, but each Portfolio of the Fund may sell securities
to recognize gains or avoid potential for loss. A Portfolio of the Fund will,
however, sell any portfolio security (without regard to the time it has been
held) when the investment advisor believes that market conditions,
credit-worthiness factors or general economic conditions warrant such a step.
The Fund presently estimates that the annualized portfolio turnover rates for
The Crowley Growth and Income Portfolio, The Crowley Income Portfolio, and The
Crowley Diversified Management Portfolio generally will not exceed 150%, 100%
and 200%, respectively. High portfolio turnover (100% or more) will involve
additional transaction costs (such as brokerage commissions or sales charges or
adverse tax effects) which are borne by the respective Portfolio. (See
"Dividends, Distributions and Taxes" in the prospectus.) During the fiscal years
ending November 30, 1996 and 1995, the portfolio turnover rates for The Crowley
Growth and Income Portfolio were 182.41% and 118.08%, respectively, and for The
Crowley Income Portfolio were 66.18% and 31.60%, respectively. The portfolio
turnover for the Crowley Diversified Management Portfolio was 20.69% for the
fiscal year ended November 30, 1996 and 0% for the period of April 3, 1995
(commencement of operations) to November 30, 1995.

INVESTMENT RESTRICTIONS

In addition to those set forth in the Fund's current Prospectus, the Fund has
adopted the Investment Restrictions set forth below for each Portfolio, which
are fundamental policies and cannot be changed without the approval of a
majority of the outstanding voting securities of each Portfolio. As provided in
the Investment Company Act of 1940, a "vote of a majority of the outstanding
voting securities" of each Portfolio means the affirmative vote of the lesser
of: (i) more than 50% of the outstanding shares of the Portfolio; or (ii) 67% or
more of the shares present at a meeting if more than 50% of the outstanding
shares are represented at the meeting in person or by proxy. These investment
restrictions provide that each Portfolio will not:

(1) issue senior securities;

(2) engage in the underwriting of securities except insofar as the
Portfolio may be deemed an underwriter under the Securities Act of 1933 in
disposing of a portfolio security;

(3) purchase or sell real estate or interests therein, although it may
purchase securities of issuers which engage in real estate operations and
securities which are secured by real estate or interests therein;

(4) invest for the purpose of exercising control or management of
another company;

(5) purchase oil, gas or other mineral leases, rights or royalty
contracts or exploration or development programs, except that the Portfolio may
invest in the securities of companies which invest in or sponsor such programs;

(6) concentrate (invest 25% or more of the value of its assets) its
investments in any industry (this restriction does not apply to The Crowley
Diversified Management Portfolio with respect to registered investment
companies);

-5-

<PAGE>

(7) make purchases of securities on "margin", or make short sales of
securities, provided that each Portfolio may enter into futures contracts and
related options and make initial and variation margin deposits in connection
therewith.

With the exception of investment restriction (f) in the Fund's Prospectus
relating to borrowing, so long as percentage restrictions are observed by each
Portfolio at the time it purchases any security, changes in values of particular
Portfolio assets or the assets of the Portfolio as a whole will not cause a
violation of any of the foregoing restrictions.

INVESTMENT ADVISOR

The Management Contract for The Crowley Growth and Income Portfolio (formerly,
The Crowley Growth Portfolio) and The Crowley Income Portfolio became effective
on December 6, 1989 for an initial term of two years. Shareholders of the Fund
approved those Management Contracts on November 29, 1990. The Management
Contract for The Crowley Diversified Management Portfolio initially became
effective on April 1, 1995. The Management Contracts are initially effective for
a two-year term, and, thereafter, continue in effect from year-to-year only if
such continuance is approved annually by either: (i) the Portfolio's Board of
Directors; or (2) by a vote of a majority of the outstanding voting securities
of the respective Portfolio of the Fund and, in either case, by the vote of a
majority of the directors who are not parties to the Management Contract or
interested persons (as such term is defined in the Investment Company Act of
1940, as amended) of any party to the Management Contract, voting in-person at a
meeting called for the purpose of voting on such approval. The Agreements may be
terminated at any time without penalty by: (i) the Fund's Board of Directors; or
(ii) by a majority vote of the outstanding shares of the Fund, or by the
Investment Advisor, in each instance on not less than 60 days' written notice
and shall automatically terminate in the event of its assignment.

The management fees for each Portfolio are paid monthly at the annual rate of
1.00%, 0.60% and 1.00% of the average daily net assets of The Crowley Growth and
Income Portfolio, The Crowley Income Portfolio and The Crowley Diversified
Management Portfolio, respectively.

For the fiscal years ended November 30, 1994, 1995 and 1996, the adviser
received fees of $50,097, $60,261 and $66,981, respectively, for The Crowley
Growth and Income Portfolio and $35,724, $46,815 and $55,642 respectively, for
The Crowley Income Portfolio. With regard to The Crowley Diversified Management
Portfolio, for period from April 3, 1995 (commencement of operations) to
November 30, 1996 and the fiscal year ended November 30, 1996 the adviser
received fees of $4,534 and $12,059, respectively.

The officers and directors of The Crowley Portfolio Group, Inc. and their
positions held with the Fund are as follows: Robert A. Crowley, President and
Treasurer; Frederick J. Crowley, Jr., Vice President and Secretary; Catherine C.
Crowley, Assistant Secretary and Assistant Treasurer.

-6-

<PAGE>

DISTRIBUTOR

Pursuant to the Fund's Distribution Agreement, the expenses of printing all
sales literature, including prospectuses used as sales material, are to be borne
by the Distributor. The Distribution Agreement for each Portfolio provides that
it will continue in effect from year-to-year only so long as such continuance is
specifically approved at least annually by either the Fund's Board of Directors
or by a vote of a majority of the outstanding voting securities of the
respective Portfolio of the Fund and, in either case, by the vote of a majority
of the Fund's disinterested directors, voting in-person at a meeting called for
the purpose of voting on such approval. The Agreement will terminate
automatically in the event of its assignment. Under the Distribution Agreement,
the Distributor is the exclusive agent for the Portfolio's shares, and has the
right to select selling dealers to offer the shares to investors.

Effective August 1, 1994, the 2% sales load on the sale of Portfolio shares was
eliminated. For the fiscal year ended 1994, the Distributor received $27,986, of
aggregate underwriting commissions, all of which it retained. Of this amount,
$10,648 of such commission was attributable to The Crowley Growth and Income
Portfolio, and $17,338, was attributable to The Crowley Income Portfolio for the
same period. The Crowley Diversified Management Portfolio has never been offered
with a sales load.

ALLOCATION OF PORTFOLIO BROKERAGE

The Crowley Portfolio Group, Inc., in effecting the purchases and sales of
portfolio securities for the account of the Fund, will seek execution of trades
either: (i) at the most favorable and competitive rate of commission charged by
any broker, dealer or member of an exchange; or (ii) at a higher rate of
commission charges if reasonable in relation to brokerage and research services
provided to the Fund or the Investment Advisor by such member, broker, or
dealer. Such services may include, but are not limited to, any one or more of
the following: Information as to the availability of securities for purchase or
sale; statistical or factual information or opinions pertaining to investments.
The Fund's Investment Advisor may use research and services provided to it by
brokers and dealers in servicing all its clients, however, not all such services
will be used by the Investment Advisor in connection with the Fund. Brokerage
may also be allocated to dealers in consideration of the Fund's share
distribution but only when execution and price are comparable to that offered by
other brokers.

The Investment Advisor is responsible for making the Fund's portfolio decisions
subject to instructions described in the prospectus. The Board of Directors may,
however, impose limitations on the allocation of portfolio brokerage. For the
fiscal years ending November 30, 1994, 1995 and 1996, aggregate brokerage
commissions for The Crowley Growth and Income Portfolio amounted to $10,915,
$9,232 and $14,393, respectively and for The Crowley Income Portfolio,
commissions amounted to $350, $250 and $515, respectively. For the fiscal year
ended November 30, 1996 and period April 3, 1995 (commencement of operations) to
November 30, 1995, and the fiscal year ended November 30, 1996, aggregate
brokerage commissions for The Crowley Diversified Management Portfolio amounted
to $0 and $0, respectively.

-7-

<PAGE>

TRANSFER AGENCY FUNCTION

The Crowley Financial Group, Inc. ("CFG") serves as the Fund's transfer agent,
dividend disbursing agent and redemption agent for redemptions, performing all
the usual or ordinary services required, including: receiving and processing
orders and payments for purchases of shares, opening stockholder accounts,
preparing annual stockholder meeting lists, mailing proxy material, receiving
and tabulating proxies, mailing stockholder reports and prospectuses,
withholding certain taxes on nonresident alien accounts, disbursing income
dividends and capital distributions, preparing and filing U.S. Treasury
Department Form 1099 (or equivalent) for all stockholders, preparing and mailing
confirmation forms to stockholders for all purposes and redemption of the Fund's
shares and all other confirmable transactions in stockholders' accounts,
recording reinvestment of dividends and distributions of the Fund's shares and
causing redemption of shares for and disbursements of proceeds to withdrawal
plan stockholders. CFG is under common control with the Advisor and the
Distributor and, as compensation for its services, receives an asset-based fee.

PURCHASE OF SHARES

The shares of each Portfolio of the Fund are continuously offered by the
Distributor. Orders will not be considered complete until receipt by the
Distributor of a completed account application form, and receipt by the
Custodian of payment for the shares purchased. Once both are received, such
orders will be confirmed at the next determined net asset value (based upon
valuation procedures described in the prospectus) as of the close of business of
the business day on which the completed order is received, normally 4:00 p.m.
Eastern Time. Completed orders received by the Fund after 4:00 p.m. will be
confirmed at the next day's price.

Tax-Sheltered Retirement Plans
Shares of each Portfolio of the Fund are available to all types of tax-deferred
retirement plans including IRA's, Keogh Plans and tax-sheltered custodial
accounts described in Section 403(b)(7) of the Internal Revenue Code. Qualified
investors benefit from the tax-free compounding of income dividends and capital
gains distributions.

Individual Retirement Accounts (IRA) -- Individuals, who are not active
participants (and, when a joint return is filed, who do not have a spouse who is
an active participant) in an employer maintained retirement plan are eligible to
contribute on a deductible basis to an IRA account. The IRA deduction is also
retained for individual taxpayers and married couples with adjusted gross
incomes not in excess of certain specified limits. All individuals who have
earned income may make nondeductible IRA contributions to a separate account to
the extent that they are not eligible for a deductible contribution. Income
earned by an IRA account will continue to be tax deferred. A special IRA program
is available for employers under which the employers may establish IRA accounts
for their employees in lieu of establishing tax qualified retirement plans.
Known as SEP- IRAs (Simplified Employee Pension-IRA), they free the employer of
many of the recordkeeping requirements of establishing and maintaining a
tax-qualified retirement plan trust.

If you have received a lump sum distribution from another qualified retirement
plan, you may rollover all or part of that distribution into the Fund's IRA.
Your rollover contribution is not subject

-8-

<PAGE>

to the limits on annual IRA contributions. By acting within applicable time
limits, you can continue to defer Federal income taxes on your lump sum
contribution and on any income that is earned on that contribution.

Keogh Plans for Self-Employed -- If you are a self-employed individual, you may
establish a Self- Employed Retirement (Keogh) Plan and contribute up to the
maximum amounts permitted for your plan under current tax laws. Under a Defined
Benefit Keogh Plan, you may establish a program with a specific amount of
retirement income as your objective. The annual contributions needed to achieve
this goal are calculated actuarially and can sometimes exceed the tax-deductible
contributions allowed under a regular Keogh Plan.

Tax-Sheltered Custodial Accounts -- If you are an employee of a public school,
state college or university, or a nonprofit organization exempt from tax under
Section 501(c)(3) of the Internal Revenue Code, you may be eligible to make
contributions into a custodial account (pursuant to section 403(b)(7) of the
IRC) which invests in Fund shares. Such contributions, to the extent that they
do not exceed certain limits, are excludable from the gross income of the
employee for federal income tax purposes.

How to Establish Retirement Accounts -- All the foregoing retirement plan
options require special plan documents. Please call us to obtain information
regarding the establishment of retirement plan accounts. In the case of IRA and
Keogh Plans, Delaware Charter Guarantee and Trust Company acts as the plan
custodian and charges nominal fees in connection with plan establishment and
maintenance. These fees are detailed in the plan documents. You should consult
with your attorney or other tax advisor for specific advice prior to
establishing a plan.

OFFICERS AND DIRECTORS OF THE FUND

The directors and principal executive offers and their principal occupations for
the past five years are listed below.
<TABLE>
<CAPTION>

Position(s)
Held with Principal Occupation(s)
Name, Address and Age the Fund During the Past Five Years
<S> <C> <C>
*Robert A. Crowley (38) President, Treasurer Vice President, Crowley & Crowley Corp.
1813 Marsh Road and Director (financial planning and registered
Suite H investment advisor) (formerly Crowley Planning
Wilmington, DE 19810 & Management Corp.) from November, 1986
until present; Vice President,
The Crowley Financial Group, Inc.
(financial management firm and
transfer agent) from February,
1990 to present; Vice President,
Crowley Real Estate Services,
Inc. from September, 1986 until
present; General Partner, Crowley
Securities (registered
broker-dealer) from February,
1985 until present; Partner,
Crowley Insurance, (insurance
brokerage) July, 1986 until
present.

-9-

<PAGE>

*Frederick J. Vice President, President, Crowley & Crowley Corp. (financial
Crowley, Jr. (40) Secretary, and planning and registered investment advisor)
1813 Marsh Road Director (formerly Crowley Planning & Management
Suite H Corp.) from November, 1986 until present;
Wilmington, DE 19810 President and Treasurer, The Crowley
Financial Group, Inc. (financial
management firm and transfer
agent) from February, 1990 to
present; Vice President, Crowley
Real Estate Services, Inc. (real
estate brokerage) from September,
1986 until present; General
Partner, Crowley Securities
(registered broker-dealer) from
February, 1985 until present;
Partner, Crowley Insurance,
(insurance brokerage?) July, 1985
until present.

William O. Cregar (71) Director Retired. Formerly Security Director, E.I.
4556 Simon Road duPont de Nemours & Co., until December,
Wilmington, DE 19803 1990.

Bruce A. Humphries (49) Director Operations Planning Manager for Virology
2 Radburn Lane Business, E.I. duPont de Nemours & Co.,
Hillstream 1987 to Present.
Newark, DE 19711

Daniel J. Piscitello (55) Director Director of Creative Services, Lenox
3933 Branches Lane Collections, 1986 to Present.
Doylestown, PA 18901

Peter Veenema (47) Director Senior Research Engineer, E.I. duPont
1211 Norbee Drive de Nemours, 1989 to Present.
Normandy Manor
Wilmington, DE 19803

Catherine C. Crowley (61) Assistant Secretary Office Manager, Crowley & Crowley Corp.
1813 Marsh Road & Assistant Treasurer (financial planning and registered investment
Suite H advisor) (formerly Crowley Planning &
Wilmington, DE 19810 Management Corp.); Secretary, The Crowley
Financial Group, Inc. (financial management
firm and transfer agent) from February, 1990
to present.
</TABLE>
- -------------------

* "Interested" director as defined in the Investment Company Act of 1940 (the
"1940 Act")

The officers conduct and supervise the daily business operations of the Fund,
while the directors, in addition to functions set forth under "Advisor" and
"Distributor" review such actions and decide on general policy. Compensation to
officers and directors of the Fund who are affiliated with the Investment
Advisor or the Distributor is paid by the Investment Advisor or the Distributor,

-10-

<PAGE>

respectively, and not by the Fund. Each non-affiliated director of the Fund
received $1,500 for the fiscal year ending November 30, 1996. Robert A. Crowley
and Frederick J. Crowley, Jr. are brothers, and the sons of Catherine C.
Crowley.
<TABLE>
<CAPTION>

(3) (5)
Pension or (4) Total
(2) Retirement Estimated Compensation
Aggregate Benefits Annual from Registrant
(1) Compensation Accrued as Benefits and Fund
Name of from Part of Fund Upon Complex Paid
Person, Position Registrant Expenses Retirement to Directors*

<S> <C> <C> <C> <C>
Robert A. Crowley, $0 $0 $0 $0
President, Treasurer and
Director

Frederick J. Crowley, $0 $0 $0 $0
Jr., Vice President,
Secretary and Director

William O. Cregar, $1,500 $0 $0 $1,500
Director

Bruce A. Humphries, $1,500 $0 $0 $1,500
Director

Daniel J. Piscitello, $1,500 $0 $0 $1,500
Director

Peter Veenema, Director $1,500 $0 $0 $1,500
</TABLE>

* The "Fund Complex" presently consists of three investment companies, each an
individual series of the Registrant.

OWNERSHIP OF SECURITIES

As of February 28, 1997, the directors and officers of the Fund owned
beneficially, in the aggregate, 9.0%, 6.4% and 4.2% of the shares outstanding of
The Crowley Growth and Income Portfolio, The Crowley Income Portfolio and The
Crowley Diversified Management Portfolio, respectively.

As of the same date, the following individuals owned greater than five percent
(5%) of a Portfolio of the Fund:

Portfolio Shareholder/Address % of Portfolio
The Crowley Income Ronald Cooney 7.2%
Portfolio Wilmington, DE

-11-

<PAGE>

Portfolio Shareholder/Address % of Portfolio
The Crowley Diversified Albert R. and 11.4%
Management Portfolio Patricia A. Forster
Glendale, AZ

Diane M. Olsen 6.5%
Wilmington, DE

Charles Laudadio 10.6%
West Chester, PA

GENERAL INFORMATION

Audits and Reports
The accounts of the Fund are audited each year by Tait, Weller & Baker of
Philadelphia, PA, independent certified public accountants whose selection must
be ratified annually by the shareholders. Shareholders receive semi-annual and
annual reports of the Fund including the annual audited financial statements and
a list of securities owned.

Custodian
The Fund has retained Wilmington Trust Company, Rodney Square North, Wilmington,
DE 19890 (the "Custodian Bank"), to act as custodian of the securities and cash
of the Fund.

PERFORMANCE

Current yield and total return may be quoted in advertisements, shareholder
reports or other communications to shareholders. Yield is the ratio of income
per share derived from a Portfolio's investments to a current maximum offering
price expressed in terms of percent. The yield is quoted on the basis of
earnings after expenses have been deducted. Total return is the total of all
income and capital gains paid to shareholders, assuming reinvestment of all
distributions, plus (or minus) the change in the value of the original
investment, expressed as a percentage of the purchase price. Occasionally, the
Fund may include its distribution rate in advertisements. The distribution rate
is the amount of distributions per share made by the Fund over a 12-month period
divided by the current maximum offering price.

U.S. Securities and Exchange Commission rules require the use of standardized
performance quotations or, alternatively, that every non-standardized
performance quotation furnished by the Fund be accompanied by certain
standardized performance information computed as required by the Commission.
Current yield and total return quotations used by the Fund are based on the
standardized methods of computing performance mandated by the Commission. An
explanation of those and other methods used by the Fund to compute or express
performance follows.

The yield for The Crowley Income Portfolio for the 30-day period ended on
November 30, 1996 was 5.36%

-12-

<PAGE>

As indicated below, current yield is determined by dividing the net investment
income per share earned during the period by the maximum offering price per
share on the last day of the period and annualizing the result. Expenses accrued
for the period include any fees charged to all shareholders during the 30-day
base period. According to the SEC formula:

6
Yield = 2 [(a-b +1) - 1]
----------------
cd

where

a = dividends and interest earned during the period.

b = expenses accrued for the period (net of reimbursements).

c = the average daily number of shares outstanding during the
period that were entitled to receive dividends.

d = the maximum offering price per share on the last day of the period.

The average annual total return figures for The Crowley Income Portfolio for the
one year period ending November 30, 1996, the five year period ending November
30, 1996, and the period from inception to November 30, 1996, were 4.16%, 6.86%,
and 7.03%, respectively; for The Crowley Growth and Income Portfolio for the one
year period ending November 30, 1996, the five year period ending November 30,
1996, and the period from inception to November 30, 1996, were 5.55%, 6.47% and
6.67%, respectively. The average total return figures for The Crowley
Diversified Management Portfolio for the one year period ending November 1, 1996
and the period from April 5, 1997 (commencement of operations) to November 30,
1996 (not annualized) were 13.87% and 10.45%, respectively.

As the following formula indicates, the average annual total return is
determined by multiplying a hypothetical initial purchase order of $1,000 by the
average annual compound rate of return (including capital
appreciation/depreciation and dividends and distributions paid and reinvested)
for the stated period less any fees charged to all shareholder accounts and
annualizing the result. The calculation assumes the maximum sales load is
deducted from the initial $1,000 purchase order and that all dividends and
distributions are reinvested at the public offering price on the reinvestment
dates during the period. The quotation assumes the account was completely
redeemed at the end of each one, five and ten-year period and assumes the
deduction of all applicable charges and fees. According to the SEC formula:

n
P(1+T) = ERV
where:

P = a hypothetical initial payment of $1,000.

T = average annual total return.

n = number of years.

-13-

<PAGE>

ERV= ending redeemable value of a hypothetical $1,000 payment made at the
beginning of the 1, 5 or 10-year periods, determined at the end of the
1, 5 or 10-year periods (or fractional portion thereof).

Regardless of the method used, past performance is not necessarily indicative of
future results, but is an indication of the return to shareholders only for the
limited historical period used.

Comparisons and Advertisements

To help investors better evaluate how an investment in a Portfolio of the Fund
might satisfy their investment objective, advertisements regarding the Fund's
Portfolios may discuss yield or total return for a Portfolio as reported by
various financial publications. Advertisements may also compare yield or total
return to yield or total return as reported by other investments, indices, and
averages. The following publications, indices, and averages may be used:

Lipper Mutual Fund Performance Analysis

Lipper Fixed Income Analysis

Lipper Mutual Fund Indices

Morgan Stanley World Index

Shearson Lehman Hutton Treasury Index

Salomon Bros. Corporate Bond Index

-14-

<PAGE>

FINANCIAL STATEMENTS

The Fund's audited financial statements, related notes and the report of Tait,
Weller & Baker for the fiscal year ended November 30, 1996, as set forth in the
Fund's Annual Report to Stockholders dated November 30, 1996, are incorporated
herein by reference. A shareholder may obtain a copy of the Annual Report to
Stockholders upon request and without charge by contacting the Fund at the
address or telephone number appearing on the cover of the Statement of
Additional Information.

-15-

<PAGE>

INVESTMENT ADVISOR
Crowley & Crowley Corp.
1813 Marsh Road
Suite H
Wilmington, DE 19810

DISTRIBUTOR
Crowley Securities
1813 Marsh Road
Suite H
Wilmington, DE 19810

TRANSFER AGENT
The Crowley Financial Group, Inc.
1813 Marsh Road
Suite H
Wilmington, DE 19810

CUSTODIAN
Wilmington Trust Company
Rodney Square North
Wilmington, DE 19890

LEGAL COUNSEL
Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, PA 19103-7098

AUDITORS
Tait, Weller & Baker
Two Penn Center
Suite 700
Philadelphia, PA 19102-1707

<PAGE>
PART C

OTHER INFORMATION

Item 24. FINANCIAL STATEMENTS AND EXHIBITS.

(a) Financial Statements:

Included in Part A:

o Financial Highlights for The Crowley Growth and Income Portfolio
(formerly, The Crowley Growth Portfolio) for the fiscal years ended
November 30, 1996, 1995, 1994, 1993, 1992, 1991 and for the period
December 6, 1989 (commencement of operations) to November 30, 1990
(audited).

o Financial Highlights for The Crowley Income Portfolio for the fiscal
years ended November 30, 1996, 1995, 1994, 1993, 1992, 1991 and for
the period December 6, 1989 (commencement of operations) to November
30, 1990 (audited).

o Financial Highlights for The Crowley Diversified Management Portfolio
for the fiscal year ended November 30, 1996 and for the period from
April 3, 1995 (commencement of operations) through November 30, 1995
(audited).

Part B:

o Portfolio of Investments at November 30, 1996 (audited).

o Statement of Assets and Liabilities at November 30, 1996 (audited).

o Statement of Operations at November 30, 1996 (audited).

o Statement of Changes in Net Assets at November 30, 1996 (audited).

o Notes to Financial Statements at November 30, 1996 (audited).

o Report of Independent Public Accountants dated December 23, 1996.

(b)(1) Charter, as now in effect.
Registrant's Articles of Incorporation dated August 15, 1989 are
incorporated herein by reference to Exhibit No. 24(b)(1) of
Registrant's Registration Statement on Form N-1A (File Nos. 33-30975
and 811- 5875) as filed with the SEC on March 29, 1996.

(a) Articles Supplementary effective March 22, 1995 to
Registrant's Articles of Incorporation dated August 15, 1989
- --------
'The financial statements and Accountant's Report listed above are incorporated
by reference into Part B from the Registrant's Annual Report to Shareholders for
the fiscal year ended November 30, 1996.

<PAGE>

are incorporated herein by reference to Exhibit No. 24(b)(1)(a) to
Post-Effective Amendment No. 8/10 to Registrant's Registration
Statement on Form N-1A as filed with the SEC on March 29, 1996.

(b) Articles of Amendment effective March 29, 1996 to Registrant's
Articles of Incorporation dated August 15, 1989 are incorporated
herein by reference to Exhibit No. 24(b)(1)(b) to Post-Effective
Amendment No. 8/10 to Registrant's Registration Statement on Form N-1A
as filed with the SEC on March 29, 1996.

(2) By-Laws. By-Laws of Registrant are incorporated by reference to
Exhibit No. 24(b)(2) to Post-Effective Amendment No. 8/10 to
Registrant's Registration Statement on Form N-1A (File Nos. 33-30975
and 811-5875) as filed with the SEC on March 29, 1996.

(3) Voting Trust Agreements. Not applicable.

(4) Instruments Defining the Rights of Holders of the Securities Being
Registered.

(a) Specimen copy of The Crowley Growth and Income Portfolio
certificate denoting securities to be issued by the Registrant is
incorporated herein by reference to Exhibit No. 24(b)(4)(a) to
Post-Effective Amendment No. 8/10 to Registrant's Registration
Statement on Form N-1A (File Nos. 33-30975 and 811-5875)as filed
with the SEC on March 29, 1996.

(b) Specimen copy of The Crowley Income Portfolio certificate
denoting securities to be issued by the Registrant is
incorporated herein by reference to Exhibit No. 24(b)(4)(b) to
Post-Effective Amendment No. 8/10 to Registrant's Registration
Statement on Form N-1A (File Nos. 33-30975 and 811-5875) as filed
with the SEC on March 29, 1996.

(c) Specimen copy of The Crowley Diversified Management Portfolio
certificate denoting securities to be issued by the Registrant is
incorporated herein by reference to Exhibit No. 24(b)(4)(c) to
Post-Effective Amendment No. 8/10 to Registrant's Registration
Statement on Form N-1A (File Nos. 33- 30975 and 811-5875) as
filed with the SEC on March 29, 1996.

(5) (a) Management Contract dated December 6, 1989 between Crowley &
Crowley Corp. and the Registrant on behalf of The Crowley Growth
Portfolio is incorporated herein by reference to Exhibit No.
24(b)(5)(a) to Post-Effective Amendment No. 8/10 to

-2-
<PAGE>

Registrant's Registration Statement on Form N-1A (File Nos. 33-
30975 and 811-5875) as filed with the SEC on March 29, 1996.

(b) Management Contract dated December 6, 1989 between Crowley &
Crowley Corp. and the Registrant on behalf of The Crowley Income
Portfolio is incorporated herein by reference to Exhibit No.
24(b)(5)(b) to Post-Effective Amendment No. 8/10 to Registrant's
Registration Statement on Form N-1A (File Nos. 33- 30975 and
811-5875) as filed with the SEC on March 29, 1996.

(c) Management Contract dated March 31, 1995 between Crowley &
Crowley Corp. and the Registrant on behalf of The Crowley
Diversified Management Portfolio is incorporated herein by
reference to Exhibit No. 24(b)(5)(c) to Post-Effective Amendment
No. 8/10 to Registrant's Registration Statement on Form N-1A
(File Nos. 33-30975 and 811-5875) as filed with the SEC on March
29, 1996.

(6) (a) Underwriting or Distribution Contract Between the Registrant
and a Principal Underwriter.

(1) Underwriting Agreement dated December 6, 1989 between Crowley
Securities and the Registrant on behalf of The Crowley Growth
Portfolio is incorporated herein by reference to Exhibit No.
24(b)(6)(a)(1) to Post-Effective Amendment No. 8/10 to
Registrant's Registration Statement on Form N-1A (File Nos. 33-
30975 and 811-5875) as filed with the SEC on March 29, 1996.

(2) Underwriting Agreement dated December 6, 1989 between Crowley
Securities and the Registrant on behalf of The Crowley Income
Portfolio is incorporated herein by reference to Exhibit No.
24(b)(6)(a)(2) to Post-Effective Amendment No. 8/10 to
Registrant's Registration Statement on Form N-1A (File Nos. 33-
30975 and 811-5875) as filed with the SEC on March 29, 1996.

(3) Underwriting Agreement dated March 31, 1995 between Crowley
Securities and the Registrant on behalf of The Crowley
Diversified Management Portfolio is incorporated herein by
reference to Exhibit No. 24(b)(6)(a)(3) to Post-Effective
Amendment No. 8/10 to Registrant's Registration Statement on Form
N- 1A (File Nos. 33-30975 and 811-5875) as filed with the SEC on
March 29, 1996.

-3-
<PAGE>

(b) Specimens or Copies of All Agreements Between Principal Underwriters
and Dealers.

(1) Form of Dealer Selling Agreement is incorporated herein by
reference to Exhibit No. 24(b)(6)(b) to Post- Effective Amendment
No. 8/10 to Registrant's Registration Statement on Form N-1A
(File Nos. 33- 30975 and 811-5875) as filed with the SEC on March
29, 1996. . (7) Bonus, Profit Sharing, Pension or Other Similar
Contracts or Arrangements Wholly or Partly for the Benefit of
Directors or Officers of the Registrant. Not Applicable.

(8) Custodian Agreements.

(a) Custodian Agreement dated November 29, 1989 between the
Registrant and Wilmington Trust Company on behalf of The Crowley
Growth Portfolio is incorporated herein by reference to Exhibit
No. 24(b)(8)(a) to Post-Effective Amendment No. 8/10 to
Registrant's Registration Statement on Form N-1A (File Nos.
33-30975 and 811-5875) as filed with the SEC on March 29, 1996.

(b) Custodian Agreement dated November 29, 1989 between the
Registrant and Wilmington Trust Company on behalf of The Crowley
Income Portfolio is incorporated herein by reference to Exhibit
No. 24(b)(8)(b) to Post-Effective Amendment No. 8/10 to
Registrant's Registration Statement on Form N-1A (File Nos.
33-30975 and 811-5875) as filed with the SEC on March 29, 1996.

(c) Custodian Agreement dated March 31, 1995 between the Registrant
and Wilmington Trust Company on behalf of The Crowley Diversified
Management Portfolio is incorporated herein by reference to
Exhibit No. 24(b)(8)(c) to Post-Effective Amendment No. 8/10 to
Registrant's Registration Statement on Form N-1A (File Nos.
33-30975 and 811-5875) as filed with the SEC on March 29, 1996.

(9) Other Material Contracts.

(a) Shareholder Services Agreement dated August 1, 1993 between the
Registrant and The Crowley Financial Group, Inc. (the
"Agreement") is incorporated herein by reference to Exhibit No.
24(b)(9) to Post-Effective Amendment No. 8/10 to Registrant's
Registration Statement on Form N-1A (File Nos. 33-30975 and
811-5875) as filed with the SEC on March 29, 1996.

-4-

<PAGE>

(1) Amendment I dated March 31, 1995 to the Agreement is incorporated herein by
reference to Exhibit No. 24(b)(9)(a) to Post-Effective Amendment No. 8/10
to Registrant's Registration Statement on Form N-1A (File Nos. 33-30975 and
811-5875) as filed with the SEC on March 29, 1996. . (10) Opinion and
Consent of Counsel. Opinion is herein incorporated by reference to
Registrant's Rule 24f-2 Notice for the fiscal year ended November 30, 1996
(File Nos. 33-30975 and 811-5875) as filed with the SEC's EDGAR system on
January 29, 1997.

(11) Other Opinions and Consents.

(a) Consent of Tait, Weller & Baker, Independent Public Accountants
dated March 27, 1997.

(b) Representation of Stradley, Ronon, Stevens and Young, LLP
relating to availability of use of Rule 485(b) dated March 27,
1997.

(12) Financial Statements Omitted form Item 23. Not applicable.

(13) Agreements or Understandings Made in Consideration for Providing
Initial Capital. Letter dated from contributors of initial capital to
the Registrant is incorporated herein by reference to Exhibit No.
24(b)(13) to Post-Effective Amendment No. 8/10 to Registrant's
Registration Statement on Form N-1A (File Nos. 33-30975 and 811-5875)
as filed with the SEC on March 29, 1996.

(14) Model Plans Used in Establishment of Any Retirement Plan. Not
Applicable.

(15) 12b-1 Plans. Not Applicable.

(16) Schedules for Computation of Performance Quotations.

(a) On behalf of The Crowley Growth and Income Portfolio is attached
hereto as EX-16.1.

(b) On behalf of The Crowley Income Portfolio is attached hereto as
EX-16.2.

-5-

<PAGE>

(17) Financial Data Schedules for the Fiscal Year ended November 30, 1996.

(a) On behalf of the Crowley Growth and Income Portfolio is attached
hereto as EX-27.1.

(b) On behalf of the Crowley Income Portfolio is attached hereto as
EX-27.2.

(18) Multiple Class Plans Under Rule 18f-3. Not Applicable.

Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL OF THE
REGISTRANT.
None.

Item 26. NUMBER OF HOLDERS OF SECURITIES.
The number of record holders of each class of securities of the
Registrant as of February 28, 1997, is as follows:

(1) (2)
Title of Class Number of Record Holders
The Crowley Growth and Income Portfolio 169
The Crowley Income Portfolio 161
The Crowley Diversified Management 75
Portfolio

Item 27. INDEMNIFICATION.
Under the terms of the Maryland General Corporation Law and the
Registrant's Articles of Incorporation, the Registrant shall
indemnify any person who was or is a director, officer or employee
of the Registrant to the maximum extent permitted by the Maryland
General Corporation Law; provided however, that any such
indemnification (unless ordered by a court) shall be made by the
Registrant only as authorized in the specific case upon a
determination that indemnification of such persons is proper in
the circumstances.
Such determination shall be made:

(i) by the Board of Directors by a majority vote of a
quorum which consists of the directors who are
neither "interested persons" of the Registrant as
defined in Section 2(a)(19) of the 1940 Act, nor
parties to the proceedings; or

(ii) if the required quorum is not obtainable or if a
quorum of such Directors so directs, by independent
legal counsel in a written opinion.

-6-

<PAGE>

No indemnification will be provided by the Registrant
to any Director or officer of the Registrant for any
liability to the Registrant or shareholders to which
he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless
disregard of duty.

As permitted by Article EIGHTH of the Registrant's Articles of
Incorporation:

(a) To the fullest extent that limitations on the liability of
directors and officers are permitted by the Maryland General
Corporation Law, no director or officer of the Corporation
shall have any liability to the Corporation or its
stockholders for money damages. This limitation on liability
applies to events occurring at the time a person serves as a
director or officer of the Corporation whether or not such
person is a director or officer at the time of any proceeding
in which liability is asserted.

(b) The Corporation shall indemnify and advance expenses to its
currently acting and its former directors to the fullest
extent that indemnification of directors is permitted by the
Maryland General Corporation Law. The Corporation shall
indemnify and advance expenses to its officers to the same
extent as its directors and to such further extent as is
consistent with law. The Board of Directors may by By-Law,
resolution or agreement make further provisions for
indemnification of directors, officers, employees and agents
to the fullest extent permitted by the Maryland General
Corporation Law.

(c) No provision of this Articles shall be effective to protect or
purport to protect any director or officer of the Corporation
against any liability to the Corporation or its security
holders to which he would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office.

Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
The principal business of Crowley & Crowley Corp. is to provide
investment counsel and advice to individual investors.

Item 29. PRINCIPAL UNDERWRITERS.
(a) Crowley Securities, Inc., the only principal underwriter of
the Registrant, does not act as principal underwriter,
depositor or investment advisor to any other investment
company.

(b) Herewith is the information required by the following table
with respect to each director, officer or partner of the only
underwriter named in answer to Item 21 of Part B:

Position and Position and
Name and Principal Offices with Offices with
Business Address Underwriter Registrant
Robert A. Crowley General Partner President
1813 Marsh Road

-7-

<PAGE>

Suite H
Wilmington, DE 19810

Frederick J. Crowley, Jr. General Partner Vice President
1813 Marsh Road
Suite H
Wilmington, DE 19810

Item 30. LOCATION OF ACCOUNTS AND RECORDS.
All records described in Section 31(a) of the Investment Company
Act of 1940, as amended, and the Rules [17 CFR 270.31a-1 to 31a-3]
promulgated thereunder, are maintained by the Registrant's
Investment Advisor, Crowley & Crowley Corp., 1813 Marsh Rd., Suite
H, Wilmington, DE 19810, except for those maintained by the
Registrant's custodian, Wilmington Trust Company, Rodney Square
North, Wilmington, DE 19890, and the Registrant's administrator,
transfer, redemption, dividend disbursing and accounting agent,
The Crowley Financial Group, Inc., 1813 Marsh Rd., Suite H,
Wilmington, DE 19810.

Item 31. MANAGEMENT SERVICES.
All management services are covered in the management agreement
between the Registrant and Crowley & Crowley Corp., as discussed
in Parts A and B.

Item 32. UNDERTAKINGS.
(1) Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to Directors, officers
and controlling persons of the Registrant, the Registrant has
been advised that in the opinion of the U.S. Securities and
Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a Director, officer
or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such
Director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it
is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.

(2) Registrant hereby undertakes, if requested to do so by the
holders of at least 10% of the Registrant's outstanding
shares, to call a meeting of shareholders for the purpose of
voting upon the question of removal of a trustee or trustees
and to assist in communication with other shareholders, as
directed by Section 16(c) of the Investment Company Act of
1940.

-8-

<PAGE>

(3) The Registrant hereby undertakes to furnish each person to
whom a prospectus is delivered with a copy of the Registrant's
latest Annual Report to Shareholders, upon request and without
change.

-9-

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that this amendment meets all of
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933, and has duly caused this amendment
to its Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Wilmington and State of Delaware on
the 26th day of March, 1997.

THE CROWLEY PORTFOLIO GROUP, INC.
(Registrant)

By:
Robert A. Crowley, President
(Signature and Title)

Pursuant to the requirements of the Securities Act of 1933, this amendment to
the Registrant's Registration Statement has been signed below by the following
persons in the capacities and on the date indicated.

Signature Title Date

President, Treasurer March 26, 1997
Robert A. Crowley and Director

Vice President, Secretary March 26, 1997
Frederick J. Crowley, Jr. and Director

Director March 26, 1997
William O. Cregar

Director March 26, 1997
Bruce A. Humphries

Director March 26, 1997
Daniel J. Piscitello

Director March 26, 1997
Peter Veenema

-10-

<PAGE>

EXHIBIT INDEX

Item 24(b) Document
11(a) Consent of Tait, Weller & Baker is attached hereto as EX-11.

11(b) Letter from Stradley, Ronon, Stevens & Young LLP is attached
hereto as EX-99.

16(a) Schedule of Performance Calculations for The Crowley Growth and
Income Portfolio is attached hereto as EX-16.1.

16(b) Schedule of Performance Calculations for The Crowley Income
Portfolio is attached hereto as EX-16.2.

16(c) Schedule of Performance Calculations for The Crowley Diversified
Management Portfolio is attached hereto as EX-16.3.

17(a) Financial Data Schedule on behalf of The Crowley Growth and
Income Portfolio is attached hereto as EX-27.1.

17(b) Financial Data Schedule on behalf of The Crowley Income Portfolio
is attached hereto as EX-27.2.

17(c) Financial Data Schedule on behalf of The Crowley Diversified
Management Portfolio is attached hereto as EX-27.3.

-11-

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We consent to the reference to our firm in the Registration Statement, (Form
N-1A), and related Statement of Additional Information of The Crowley Portfolio
Group, Inc. and to the inclusion of our report dated December 23, 1996 to the
Shareholders and Board of Directors of The Crowley Portfolio Group, Inc.

Tait, Weller & Baker
TAIT, WELLER & BAKER

Philadelphia, Pennsylvania
March 27, 1997

Exhibit 16

THE CROWLEY PORTFOLIO GROUP

The Crowley Income Portfolio
YIELD: Yield = 2 [ (a-b) + 1)6
-----
cd

a = $52,771
b = $10,467
c = $878,031
d = $10.90

Yield = 5.36%

TOTAL RETURN: P (1 + T)n = ERV

Inception to November 30, 1996

P = $10,000
T = 7.03%
n = 7
ERV = $16,089

One Year ended November 30, 1996

P = $10,000
T = 4.16%
n = 1
ERV = $10,416

Five Year ended November 30, 1996

P = $10,000
T = 6.86%
n = 5
ERV = $13,501

<PAGE>

The Crowley Growth and Income Portfolio
TOTAL RETURN: P (1 + T)n = ERV

Inception to November 30, 1996

P = $1,000
T = 6.67%
n = 7
ERV = $15,718

One Year ended November 30, 1996

P = $1,000
T = 5.55%
n = 1
ERV = $10,555

Five Year ended November 30, 1996

P = $1,000
T = 6.47%
n = 5
ERV = $13,685

<PAGE>

The Crowley Diversified Management Portfolio

TOTAL RETURN: P (1 + T)n = ERV

Inception to November 30, 1996

P = $1,000
T = 10.45%
n = 2
ERV = $12,195

One Year ended November 30, 1996

P = $1,000
T = 13.87%
n = 1
ERV = $11,387

<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information for The Crowley Growth
Portfolio for the November 30, 1996 Annual Report.
</LEGEND>
<SERIES>
<NUMBER> 1
<NAME> THE CROWLEY GROWTH AND INCOME PORTFOLIO

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> NOV-30-1996
<PERIOD-END> NOV-30-1996
<INVESTMENTS-AT-COST> 6,636,554
<INVESTMENTS-AT-VALUE> 6,886,645
<RECEIVABLES> 68,432
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 6,955,077
<PAYABLE-FOR-SECURITIES> 198,000
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 12,701
<TOTAL-LIABILITIES> 210,701
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 6,180,327
<SHARES-COMMON-STOCK> 605,470
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 125,320
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 188,638
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 250,091
<NET-ASSETS> 6,744,376
<DIVIDEND-INCOME> 83,477
<INTEREST-INCOME> 183,452
<OTHER-INCOME> 1,117
<EXPENSES-NET> 130,393
<NET-INVESTMENT-INCOME> 137,653
<REALIZED-GAINS-CURRENT> 191,740
<APPREC-INCREASE-CURRENT> 21,978
<NET-CHANGE-FROM-OPS> 351,371
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (183,435)
<DISTRIBUTIONS-OF-GAINS> (286,617)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 34,760
<NUMBER-OF-SHARES-REDEEMED> 49,012
<SHARES-REINVESTED> 44,303
<NET-CHANGE-IN-ASSETS> 199,451
<ACCUMULATED-NII-PRIOR> 171,102
<ACCUMULATED-GAINS-PRIOR> 283,515
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 66,981
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 130,393
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 11.37
<PER-SHARE-NII> .23
<PER-SHARE-GAIN-APPREC> .36
<PER-SHARE-DIVIDEND> (.32)
<PER-SHARE-DISTRIBUTIONS> (.50)
<RETURNS-OF-CAPITAL> .00
<PER-SHARE-NAV-END> 11.14
<EXPENSE-RATIO> 1.95
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information for The Crowley
Income Portfolio for the November 30, 1996 annual report.
</LEGEND>
<SERIES>
<NUMBER> 2
<NAME> THE CROWLEY INCOME PORTFOLIO

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> NOV-30-1996
<PERIOD-END> NOV-30-1996
<INVESTMENTS-AT-COST> 9,610,533
<INVESTMENTS-AT-VALUE> 9,619,244
<RECEIVABLES> 147,293
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 9,766,537
<PAYABLE-FOR-SECURITIES> 198,000
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 39,772
<TOTAL-LIABILITIES> 237,772
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 9,234,970
<SHARES-COMMON-STOCK> 874,008
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 492,825
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (207,721)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 8,691
<NET-ASSETS> 9,528,765
<DIVIDEND-INCOME> 28,506
<INTEREST-INCOME> 631,147
<OTHER-INCOME> 0
<EXPENSES-NET> 129,337
<NET-INVESTMENT-INCOME> 530,316
<REALIZED-GAINS-CURRENT> (143,224)
<APPREC-INCREASE-CURRENT> (1,524)
<NET-CHANGE-FROM-OPS> 385,568
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (502,187)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 124,539
<NUMBER-OF-SHARES-REDEEMED> 105,211
<SHARES-REINVESTED> 47,646
<NET-CHANGE-IN-ASSETS> 588,307
<ACCUMULATED-NII-PRIOR> 464,696
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 64,499
<GROSS-ADVISORY-FEES> 55,642
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 129,337
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 11.08
<PER-SHARE-NII> .59
<PER-SHARE-GAIN-APPREC> (.15)
<PER-SHARE-DIVIDEND> (.62)
<PER-SHARE-DISTRIBUTIONS> .00
<RETURNS-OF-CAPITAL> .00
<PER-SHARE-NAV-END> 10.90
<EXPENSE-RATIO> 1.39
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information for The Crowley
Diversified Management Portfolio for the November 30, 1996 annual report.
</LEGEND>
<SERIES>
<NUMBER> 3
<NAME> THE CROWLEY DIVERSIFIED MANAGEMENT PORTFOLIO

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> NOV-30-1996
<PERIOD-END> NOV-30-1996
<INVESTMENTS-AT-COST> 1,318,058
<INVESTMENTS-AT-VALUE> 1,462,523
<RECEIVABLES> 0
<ASSETS-OTHER> 38,744
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,501,267
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,062
<TOTAL-LIABILITIES> 1,062
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,297,396
<SHARES-COMMON-STOCK> 123,523
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 1,638
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 56,706
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 144,465
<NET-ASSETS> 1,500,205
<DIVIDEND-INCOME> 30,605
<INTEREST-INCOME> 1,434
<OTHER-INCOME> 258
<EXPENSES-NET> 26,752
<NET-INVESTMENT-INCOME> 5,545
<REALIZED-GAINS-CURRENT> 56,548
<APPREC-INCREASE-CURRENT> 95,517
<NET-CHANGE-FROM-OPS> 157,610
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 3,511
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 39,599
<NUMBER-OF-SHARES-REDEEMED> 6,260
<SHARES-REINVESTED> 325
<NET-CHANGE-IN-ASSETS> 538,067
<ACCUMULATED-NII-PRIOR> (396)
<ACCUMULATED-GAINS-PRIOR> 159
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 12,059
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 26,752
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 10.71
<PER-SHARE-NII> .05
<PER-SHARE-GAIN-APPREC> 1.43
<PER-SHARE-DIVIDEND> (.04)
<PER-SHARE-DISTRIBUTIONS> .00
<RETURNS-OF-CAPITAL> .00
<PER-SHARE-NAV-END> 12.15
<EXPENSE-RATIO> 2.22
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>