59 WALL STREET FUND INC, 497, 1999-03-08

59 WALL STREET FUND INC
497, 1999-03-08

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STATEMENT OF ADDITIONAL INFORMATION
THE 59 WALL STREET INTERNATIONAL EQUITY FUND
21 Milk Street, Boston, Massachusetts 02109
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The 59 Wall Street International Equity Fund (the "Fund") is a separate
portfolio of The 59 Wall Street Fund, Inc. (the "Corporation"), a management
investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Fund is designed to enable investors to
participate in the opportunities available in equity markets outside the United
States and Canada. The investment objective of the Fund is to provide investors
with long-term maximization of total return, primarily through capital
appreciation.

The Corporation seeks to achieve the investment objective of the Fund
by investing all of the Fund's assets in the International Equity Portfolio, an
open-end investment company having the same investment objective as the Fund.
There can be no assurance that the investment objective of the Fund will be
achieved.

Brown Brothers Harriman & Co. is the investment adviser (the
"Investment Adviser") for the Portfolio. This Statement of Additional
Information is not a prospectus and should be read in conjunction with the
Prospectus dated March 1, 1999, a copy of which may be obtained from the
Corporation at the address noted above.
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Table of Contents
<S> <C> <C>
Cross-Reference
Page to Page in Prospectus

Investments
Investment Objective and Policies . . . . . 2 3-5
Investment Restrictions . . . . . . . . 8
Management
Directors, Trustees and Officers . . . . . 10
Investment Adviser . . . . . . . . . . 16 10
Administrators. . . . . . . . . . . . 17
Distributor . . . . . . . . . . . . 19
Shareholder Servicing Agent,
Financial Intermediaries and Eligible Institutions 20-21
Net Asset Value; Redemption in Kind . . . . 22 10
Computation of Performance . . . . . . . 23
Purchases and Redemptions 25
Federal Taxes . . . . . . . . . . . . 25
Description of Shares . . . . . . . . . 28
Portfolio Brokerage Transactions . . . . . . . 31
Additional Information 33
Financial Statements . . . . . . . . . 33
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The date of this Statement of Additional Information is March 1, 1999.

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INVESTMENT OBJECTIVE AND POLICIES

The following supplements the information contained in the Prospectus
concerning the investment objective, policies and techniques of the Portfolio.
In response to adverse market, economic, political and other conditions, the
Investment Adviser may make temporary investments for the Portfolio that are not
consistent with its investment objective and principal investment strategies.
Such investments may prevent the Portfolio from achieving its investment
objective.

Equity Investments

Equity investments may or may not pay dividends and may or may not carry voting
rights. Common stock occupies the most junior position in a company's capital
structure. Convertible securities entitle the holder to exchange the securities
for a specified number of shares of common stock, usually of the same company,
at specified prices within a certain period of time and to receive interest or
dividends until the holder elects to convert. The provisions of any convertible
security determine its ranking in a company's capital structure. In the case of
subordinated convertible debentures, the holder's claims on assets and earnings
are subordinated to the claims of other creditors, and are senior to the claims
of preferred and common shareholders. In the case of convertible preferred
stock, the holder's claims on assets and earnings are subordinated to the claims
of all creditors and are senior to the claims of common shareholders.

Domestic Investments

The assets of the Portfolio are not invested in domestic securities
(other than short-term instruments), except temporarily when extraordinary
circumstances prevailing at the same time in a significant number of foreign
countries render investments in such countries inadvisable.

Hedging Strategies

Options on Stock. Subject to applicable laws and regulations and solely
as a hedge against changes in the market value of portfolio securities or
securities intended to be purchased, put and call options on stocks may be
purchased for the Portfolio, although the current intention is not to do so in
such a manner that more than 5% of the Portfolio's net assets would be at risk.
A call option on a stock gives the purchaser of the option the right to buy the
underlying stock at a fixed price at any time during the option period.
Similarly, a put option gives the purchaser of the option the right to sell the
underlying stock at a fixed price at any time during the option period. To
liquidate a put or call option position, a "closing sale transaction" may be
made at any time prior to the expiration of the option which involves selling
the option previously purchased.

Covered call options may also be sold (written) on stocks, although in
each case the current intention is not to do so. A call option is "covered" if
the writer owns the underlying security.

Options on Stock Indexes. Subject to applicable laws and regulations
and solely as a hedge against changes in the market value of portfolio
securities or securities intended to be purchased, put and call options on stock
indexes may be purchased for the Portfolio, although the current intention is
not to do so in such a manner that more than 5% of the Portfolio's net assets
would be at risk. A stock index fluctuates with changes in the market values of
the stocks included in the index. Examples of stock indexes are the Standard &
Poor's 500 Stock Index (Chicago Board of Options Exchange), the New York Stock
Exchange Composite Index (New York Stock Exchange), The Financial Times-Stock
Exchange 100 (London Traded Options Market), the Nikkei 225 Stock Average (Osaka
Securities Exchange) and Tokyo Stock Price Index (Tokyo Stock Exchange).

The effectiveness of purchasing stock index options as a hedging
technique depends upon the extent to which price movements in the portion of the
securities portfolio being hedged correlate with price movements of the stock
index selected. The value of an index option depends upon future movements in
the level of the overall stock market measured by the underlying index before
the expiration of the option. Accordingly, the successful use of options on
stock indexes is subject to the Investment Adviser's ability both to select an
appropriate index and to predict future price movements over the short term in
the overall stock market. Brokerage costs are incurred in the purchase of stock
index options and the incorrect choice of an index or an incorrect assessment of
future price movements may result in poorer overall performance than if a stock
index option had not been purchased.

Options on Currencies. Subject to applicable laws and regulations and
solely as a hedge against changes in the market value of portfolio securities or
securities intended to be purchased, put and call options on currencies may be
purchased for the Portfolio, although the current intention is not to do so in
such a manner that more than 5% of the Portfolio's net assets would be at risk.
A call option on a currency gives the purchaser of the option the right to buy
the underlying currency at a fixed price, either at any time during the option
period (American style) or on the expiration date (European style). Similarly, a
put option gives the purchaser of the option the right to sell the underlying
currency at a fixed price, either at any time during the option period or on the
expiration date. To liquidate a put or call option position, a "closing sale
transaction" may be made for the Portfolio at any time prior to the expiration
of the option, such a transaction involves selling the option previously
purchased. Options on currencies are traded both on recognized exchanges (such
as the Philadelphia Options Exchange) and over-the-counter.

The value of a currency option purchased depends upon future changes in
the value of that currency before the expiration of the option. Accordingly, the
successful use of options on currencies is subject to the Investment Adviser's
ability to predict future changes in the value of currencies over the short
term. Brokerage costs are incurred in the purchase of currency options and an
incorrect assessment of future changes in the value of currencies may result in
a poorer overall performance than if such a currency had not been purchased.

Futures Contracts on Stock Indexes. Subject to applicable laws and
regulations and solely as a hedge against changes in the market value of
portfolio securities or securities intended to be purchased, futures contracts
on stock indexes may be entered into for the Portfolio. In order to assure that
a Portfolio is not deemed a "commodity pool" for purposes of the Commodity
Exchange Act, regulations of the Commodity Futures Trading Commission ("CFTC")
require that the Portfolio enter into transactions in Futures Contracts and
options on Futures Contracts only (i) for bona fide hedging purposes (as defined
in CFTC regulations), or (ii) for non-hedging purposes, provided that the
aggregate initial margin and premiums on such non-hedging positions does not
exceed 5% of the liquidation value of a Portfolio's assets.

Futures Contracts provide for the making and acceptance of a cash
settlement based upon changes in the value of an index of stocks and are used to
hedge against anticipated future changes in overall stock market prices which
otherwise might either adversely affect the value of securities held for a
Portfolio or adversely affect the prices of securities which are intended to be
purchased at a later date. A Futures Contract may also be entered into to close
out or offset an existing futures position.

In general, each transaction in Futures Contracts involves the
establishment of a position which is expected to move in a direction opposite to
that of the investment being hedged. If these hedging transactions are
successful, the futures positions taken would rise in value by an amount which
approximately offsets the decline in value of the portion of a Portfolio's
investments that is being hedged. Should general market prices move in an
unexpected manner, the full anticipated benefits of Futures Contracts may not be
achieved or a loss may be realized. There is also the risk of a potential lack
of liquidity in the secondary market.

The effectiveness of entering into Futures Contracts as a hedging technique
depends upon the extent to which price movements in the portion of the
securities portfolio being hedged correlate with price movements of the stock
index selected. The value of a Futures Contract depends upon future movements in
the level of the overall stock market measured by the underlying index before
the closing out of the Futures Contract. Accordingly, the successful use of
Futures Contracts is subject to the Investment Adviser's ability both to select
an appropriate index and to predict future price movements over the short term
in the overall stock market. The incorrect choice of an index or an incorrect
assessment of future price movements over the short term in the overall stock
market may result in poorer overall performance than if a Futures Contract had
not been purchased. Brokerage costs are incurred in entering into and
maintaining Futures Contracts.

When the Portfolio enters into a Futures Contract, it is initially required
to deposit, in a segregated account in the name of the broker performing the
transaction, an "initial margin" of cash, U.S. Government securities or other
high grade short-term obligations equal to approximately 3% of the contract
amount. Initial margin requirements are established by the exchanges on which
Futures Contracts trade and may, from time to time, change. In addition, brokers
may establish margin deposit requirements in excess of those required by the
exchanges. Initial margin in futures transactions is different from margin in
securities transactions in that initial margin does not involve the borrowing of
funds by a broker's client but is, rather, a good faith deposit on the Futures
Contract which will be returned upon the proper termination of the Futures
Contract. The margin deposits made are marked to market daily and a Portfolio
may be required to make subsequent deposits of cash or eligible securities
called "variation margin", with its futures contract clearing broker, which are
reflective of price fluctuations in the Futures Contract.

Currently, investments in Futures Contracts on non-U.S. stock indexes by
U.S. investors, such as the Portfolios, can be purchased on such non-U.S. stock
indexes as the Osaka Stock Exchange (OSE), Tokyo Stock Exchange (TSE), Hong Kong
Futures Exchange (HKFE), Singapore International Monetary Exchange (SIMEX),
London International Financial Futures and Options Exchange (LIFFE), Marche
Terme International de France (MATIF), Sydney Futures Exchange Ltd. (SFE), Meff
Sociedad Rectora de Productos Financieros Derivados de Renta Variable, S.A.
(MEFF RENTA VARIABLE), Deutsche Terminborse (DTB), Italian Stock Exchange (ISE),
Financiele Termijnmarkt Amsterdam (FTA), and London Securities and Derivatives
Exchange, Ltd. (OMLX).

Exchanges may limit the amount by which the price of a Futures Contract may
move on any day. If the price moves equal the daily limit on successive days,
then it may prove impossible to liquidate a futures position until the daily
limit moves have ceased.

Another risk which may arise in employing Futures Contracts to protect
against the price volatility of portfolio securities is that the prices of an
index subject to Futures Contracts (and thereby the Futures Contract prices) may
correlate imperfectly with the behavior of the cash prices of portfolio
securities. Another such risk is that the price of the Futures Contract may not
move in tandem with the change in overall stock market prices against which a
Portfolio seeks a hedge.

Foreign Exchange Contracts

Foreign exchange contracts are made with currency dealers, usually large
commercial banks and financial institutions. Although foreign exchange rates are
volatile, foreign exchange markets are generally liquid with the equivalent of
approximately $500 billion traded worldwide on a typical day.

While the Portfolio may enter into foreign currency exchange transactions to
reduce the risk of loss due to a decline in the value of the hedged currency,
these transactions also tend to limit the potential for gain. Forward foreign
exchange contracts do not eliminate fluctuations in the prices of the
Portfolio's securities or in foreign exchange rates, or prevent loss if the
prices of these securities should decline. The precise matching of the forward
contract amounts and the value of the securities involved is not generally
possible because the future value of such securities in foreign currencies
changes as a consequence of market movements in the value of such securities
between the date the forward contract is entered into and the date it matures.
The projection of currency market movements is extremely difficult, and the
successful execution of a hedging strategy is highly unlikely.

The Investment Adviser on behalf of the Portfolio may enter into forward
foreign exchange contracts in order to protect the dollar value of all
investments in securities denominated in foreign currencies. The precise
matching of the forward contract amounts and the value of the securities
involved is not always possible because the future value of such securities in
foreign currencies changes as a consequence of market movements in the value of
such securities between the date the forward contract is entered into and the
date it matures.

Loans of Portfolio Securities

Loans of portfolio securities up to 30% of the total value of the Portfolio
are permitted. Securities of the Portfolio may be loaned if such loans are
secured continuously by cash or equivalent collateral or by an irrevocable
letter of credit in favor of the Portfolio at least equal at all times to 100%
of the market value of the securities loaned plus accrued income. By lending
securities, the Portfolio's income can be increased by its continuing to receive
income on the loaned securities as well as by the opportunity to receive
interest on the collateral. All or any portion of interest earned on invested
collateral may be paid to the borrower. Loans are subject to termination by the
Portfolio in the normal settlement time, currently three business days after
notice, or by the borrower on one day's notice. Borrowed securities are returned
when the loan is terminated. Any appreciation or depreciation in the market
price of the borrowed securities which occurs during the term of the loan inures
to the Portfolio and its investors. Reasonable finders' and custodial fees may
be paid in connection with a loan. In addition, all facts and circumstances,
including the creditworthiness of the borrowing financial institution, are
considered before a loan is made and no loan is made in excess of one year.
There is the risk that a borrowed security may not be returned to the Portfolio.
Securities are not loaned to Brown Brothers Harriman & Co. or to any affiliate
of the Corporation, the Portfolio or Brown Brothers Harriman & Co.

Short-Term Investments

Although it is intended that the assets of the Portfolio stay invested in the
securities described above and in the Prospectus to the extent practical in
light of the Portfolio's investment objective and long-term investment
perspective, the Portfolio's assets may be invested in short-term instruments to
meet anticipated expenses or for day-to-day operating purposes and when, in the
Investment Adviser's opinion, it is advisable to adopt a temporary defensive
position because of unusual and adverse conditions affecting the equity markets.
In addition, when the Portfolio experiences large cash inflows through
additional investments by its investors or the sale of portfolio securities, and
desirable equity securities that are consistent with its investment objective
are unavailable in sufficient quantities, assets may be held in short-term
investments for a limited time pending availability of such equity securities.
Short-term instruments consist of foreign and domestic: (i) short-term
obligations of sovereign governments, their agencies, instrumentalities,
authorities or political subdivisions; (ii) other short-term debt securities
rated A or higher by Moody's Investors Service, Inc. ("Moody's") or Standard &
Poor's Corporation ("Standard & Poor's"), or if unrated are of comparable
quality in the opinion of the Investment Adviser; (iii) commercial paper; (iv)
bank obligations, including negotiable certificates of deposit, fixed time
deposits and bankers' acceptances; and (v) repurchase agreements. Time deposits
with a maturity of more than seven days are treated as not readily marketable.
At the time the Portfolio's assets are invested in commercial paper, bank
obligations or repurchase agreements, the issuer must have outstanding debt
rated A or higher by Moody's or Standard & Poor's; the issuer's parent
corporation, if any, must have outstanding commercial paper rated Prime-1 by
Moody's or A-1 by Standard & Poor's; or, if no such ratings are available, the
instrument must be of comparable quality in the opinion of the Investment
Adviser. The assets of the Portfolio may be invested in non-U.S. dollar
denominated and U.S. dollar denominated short-term instruments, including U.S.
dollar denominated repurchase agreements. Cash is held for the Portfolio in
demand deposit accounts with the Portfolio's custodian bank.

Government Securities

The assets of the Portfolio may be invested in securities issued by the U.S.
Government or sovereign foreign governments, their agencies or
instrumentalities. These securities include notes and bonds, zero coupon bonds
and stripped principal and interest securities.

Restricted Securities

Securities that have legal or contractual restrictions on their resale may be
acquired for a Portfolio. The price paid for these securities, or received upon
resale, may be lower than the price paid or received for similar securities with
a more liquid market. Accordingly, the valuation of these securities reflects
any limitation on their liquidity.

When-Issued and Delayed Delivery Securities

Securities may be purchased for a Portfolio on a when-issued or delayed
delivery basis. For example, delivery and payment may take place a month or more
after the date of the transaction. The purchase price and the interest rate
payable on the securities, if any, are fixed on the transaction date. The
securities so purchased are subject to market fluctuation and no income accrues
to a Portfolio until delivery and payment take place. At the time the commitment
to purchase securities on a when-issued or delayed delivery basis is made, the
transaction is recorded and thereafter the value of such securities is reflected
each day in determining that Portfolio's net asset value. The Portfolio
maintains with the Custodian a separate account with a segregated portfolio of
securities in an amount at least equal to these commitments. At the time of its
acquisition, a when-issued or delayed delivery security may be valued at less
than the purchase price. Commitments for such when-issued or delayed delivery
securities are made only when there is an intention of actually acquiring the
securities. On delivery dates for such transactions, such obligations are met
from maturities or sales of securities and/or from cash flow. If the right to
acquire a when-issued or delayed delivery security is disposed of prior to its
acquisition, a Portfolio could, as with the disposition of any other portfolio
obligation, incur a gain or loss due to market fluctuation. When-issued or
delayed delivery commitments for a Portfolio may not be entered into if such
commitments exceed in the aggregate 15% of the market value of its total assets,
less liabilities other than the obligations created by when-issued or delayed
delivery commitments.

Investment Company Securities

Subject to applicable statutory and regulatory limitations, the assets of the
Portfolio may be invested in shares of other investment companies. Under the
1940 Act, the assets of the Portfolio may be invested in shares of other
investment companies in connection with a merger, consolidation, acquisition or
reorganization or if immediately after such investment (i) 10% or less of the
market value of the Portfolio's total assets would be so invested, (ii) 5% or
less of the market value of the Portfolio's total assets would be invested in
the shares of any one such company, and (iii) 3% or less of the total
outstanding voting stock of any other investment company would be owned by the
Portfolio. As a shareholder of another investment company, the Portfolio would
bear, along with other shareholders, its pro rata portion of the other
investment company's expenses, including advisory fees. These expenses would be
in addition to the advisory and other expenses that a Portfolio bears directly
in connection with its own operations.

Repurchase Agreements

Repurchase agreements may be entered into for the Portfolio only with a
"primary dealer" (as designated by the Federal Reserve Bank of New York) in U.S.
Government securities. This is an agreement in which the seller (the "Lender")
of a security agrees to repurchase from a Portfolio the security sold at a
mutually agreed upon time and price. As such, it is viewed as the lending of
money to the Lender. The resale price normally is in excess of the purchase
price, reflecting an agreed upon interest rate. The rate is effective for the
period of time assets of the Portfolio are invested in the agreement and is not
related to the coupon rate on the underlying security. The period of these
repurchase agreements is usually short, from overnight to one week. The
securities which are subject to repurchase agreements, however, may have
maturity dates in excess of one week from the effective date of the repurchase
agreement. The Portfolio always receives as collateral securities which are
issued or guaranteed by the U.S. Government, its agencies or instrumentalities.
Collateral is marked to the market daily and has a market value including
accrued interest at least equal to 100% of the dollar amount invested by the
Portfolio in each agreement along with accrued interest. Payment for such
securities is made for the Portfolio only upon physical delivery or evidence of
book entry transfer to the account of State Street Bank and Trust Company (the
"Custodian"). If the Lender 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 liquidating the collateral. In
addition, if bankruptcy proceedings are commenced with respect to the Lender,
realization upon the collateral of the Portfolio may be delayed or limited in
certain circumstances.

INVESTMENT RESTRICTIONS

The Fund and the Portfolio are operated under the following investment
restrictions which are deemed fundamental policies and may be changed only with
the approval of the holders of a "majority of the outstanding voting securities"
(as defined in the 1940 Act) of the Fund or the Portfolio, as the case may be
(see "Additional Information").

Except that the Corporation may invest all of the Fund's assets in an
open-end investment company with substantially the same investment objective,
policies and restrictions as the Fund, the Portfolio and the Corporation, with
respect to the Fund, may not:

(1) borrow money or mortgage or hypothecate its assets, except that in an
amount not to exceed 1/3 of the current value of its net assets, it may borrow
money as a temporary measure for extraordinary or emergency purposes, and except
that it may pledge, mortgage or hypothecate not more than 1/3 of such assets to
secure such borrowings (it is intended that money will be borrowed only from
banks and only either to accommodate requests for the redemption of Fund shares
or the withdrawal of part or all of the Fund's interest in the Portfolio, as the
case may be, while effecting an orderly liquidation of portfolio securities or
to maintain liquidity in the event of an unanticipated failure to complete a
portfolio security transaction or other similar situations), provided that
collateral arrangements with respect to options and futures, including deposits
of initial deposit and variation margin, are not considered a pledge of assets
for purposes of this restriction and except that assets may be pledged to secure
letters of credit solely for the purpose of participating in a captive insurance
company sponsored by the Investment Company Institute;

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

(3) write, purchase or sell any put or call option or any combination
thereof, provided that this shall not prevent (i) the purchase, ownership,
holding or sale of warrants where the grantor of the warrants is the issuer of
the underlying securities, or (ii) the purchase, ownership, holding or sale of
futures and options, other than the writing of put options;

(4) underwrite securities issued by other persons except insofar as it may
technically be deemed an underwriter under the Securities Act of 1933, as
amended in selling a portfolio security;

(5) make loans to other persons except (a) through the lending of its
portfolio securities and provided that any such loans not exceed 30% of its net
assets (taken at market value), (b) through the use of repurchase agreements or
the purchase of short-term obligations and provided that not more than 10% of
its net assets is invested in repurchase agreements maturing in more than seven
days, or (c) by purchasing, subject to the limitation in paragraph (6) below, a
portion of an issue of debt securities of types commonly distributed privately
to financial institutions, for which purposes the purchase of short-term
commercial paper or a portion of an issue of debt securities which are part of
an issue to the public shall not be considered the making of a loan;

(6) knowingly invest in securities which are subject to legal or contractual
restrictions on resale (other than repurchase agreements maturing in not more
than seven days) if, as a result thereof, more than 10% of its net assets (taken
at market value) would be so invested (including repurchase agreements maturing
in more than seven days);

(7) purchase or sell real estate (including limited partnership interests but
excluding securities secured by real estate or interests therein), interests in
oil, gas or mineral leases, commodities or commodity contracts (except futures
and option contracts) in the ordinary course of business (the freedom of action
to hold and to sell real estate acquired as a result of the ownership of
securities is reserved);

(8) make short sales of securities or maintain a short position, unless at
all times when a short position is open it owns an equal amount of such
securities or securities convertible into or exchangeable, without payment of
any further consideration, for securities of the same issue as, and equal in
amount to, the securities sold short, and unless not more than 10% of its net
assets (taken at market value) is represented by such securities, or securities
convertible into or exchangeable for such securities, at any one time (it is the
present intention of management to make such sales only for the purpose of
deferring realization of gain or loss for federal income tax purposes; such
sales would not be made of securities subject to outstanding options);

(9) concentrate its investments in any particular industry, but if it is
deemed appropriate for the achievement of its investment objective, up to 25% of
its assets, at market value at the time of each investment, may be invested in
any one industry, except that positions in futures or option contracts shall not
be subject to this restriction;

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

Non-Fundamental Restrictions. The Portfolio or the Corporation, on behalf of
the Fund, may not as a matter of operating policy (except that the Corporation
may invest all of the Fund's assets in an open-end investment company with
substantially the same investment objective, policies and restrictions as the
Fund): (i) purchase securities of any investment company if such purchase at the
time thereof would cause more than 10% of its total assets (taken at the greater
of cost or market value) to be invested in the securities of such issuers or
would cause more than 3% of the outstanding voting securities of any such issuer
to be held for it; (ii) invest more than 10% of its net assets (taken at the
greater of cost or market value) in restricted securities; (iii) invest less
than 65% of the value of the total assets of the Portfolio in equity securities
of companies based in countries in which it invests. For these purposes, equity
securities are defined as common stock, securities convertible into common
stock, rights and warrants, and include securities purchased directly and in the
form of American Depository Receipts, Global Depository Receipts or other
similar securities representing common stock of foreign-based companies; (iv)
invest more than 10% of the Portfolio's assets in less developed markets; or (v)
invest more than 5% of the Portfolio's assets in any one less developed market
These policies are not fundamental and may be changed without shareholder or
investor approval.

Percentage and Rating Restrictions. If a percentage or rating restriction on
investment or utilization of assets set forth above or referred to in the
Prospectus is adhered to at the time an investment is made or assets are so
utilized, a later change in percentage resulting from changes in the value of
the portfolio securities or a later change in the rating of a portfolio security
is not considered a violation of policy. If the Fund's and the Portfolio's
respective investment restrictions relating to any particular investment
practice or policy are not consistent, the Portfolio has agreed with the
Corporation that it will adhere to the more restrictive limitation.

DIRECTORS, TRUSTEES AND OFFICERS

The Corporation's Directors, in addition to supervising the actions of the
Administrator of the Corporation and Distributor, as set forth below, decide
upon matters of general policy with respect to the Corporation. The Portfolio's
Trustees, in addition to supervising the actions of the Portfolio's Investment
Adviser and Administrator, as set forth below, decide upon matters of general
policy with respect to the Portfolio. The Corporation's Directors are not the
same individuals as the Portfolio's Trustees.

Because of the services rendered to the Portfolio by the Investment Adviser
and to the Corporation and the Portfolio by their respective Administrators, the
Corporation and the Portfolio require no employees, and their respective
officers, other than the Chairmen, receive no compensation from the Fund or
Portfolio.

The Directors of the Corporation, Trustees of the Portfolio and executive
officers of the Corporation and the Portfolio, their principal occupations
during the past five years (although their titles may have varied during the
period) and business addresses are:

DIRECTORS OF THE CORPORATION

J.V. SHIELDS, JR.* - Chairman of the Board and Director; Trustee of The 59
Wall Street Trust; Managing Director, Chairman and Chief Executive Officer of
Shields & Company; Chairman and Chief Executive Officer of Capital Management
Associates, Inc.; Director of Flowers Industries, Inc.(1) His business address
is Shields & Company, 140 Broadway, New York, NY 10005.

EUGENE P. BEARD** - Director; Trustee of The 59 Wall Street Trust; Vice
Chairman - Finance and Operations of The Interpublic Group of Companies. His
business address is The Interpublic Group of Companies, Inc., 1271 Avenue of the
Americas, New York, NY 10020.

DAVID P. FELDMAN** - Director; Trustee of The 59 Wall Street Trust; Retired;
Chairman and Chief Executive Officer of AT&T Investment Management Corporation
(prior to October 1997); Director of Dreyfus Mutual Funds, Equity Fund of Latin
America, New World Balanced Fund, India Magnum Fund, and U.S. Prime Properties
Inc.; Trustee of Corporate Property Investors. His business address is 3 Tall
Oaks Drive, Warren, NJ 07059.

ALAN G. LOWY** - Director; Trustee of The 59 Wall Street Trust; President of
Lowy Industries (since August 1998); Secretary of the Los Angeles County Board
of Investments (prior to March 1995). His business address is 4111 Clear Valley
Drive, Encino, CA 91436.

ARTHUR D. MILTENBERGER** - Director; Trustee of The 59 Wall Street Trust;
Vice President and Chief Financial Officer of Richard K. Mellon and Sons;
Treasurer of Richard King Mellon Foundation; Vought Aircraft Corporation (prior
to September 1994), Caterair International (prior to April 1994); Advisory
Committee of Carlyle Group and Pittsburgh Seed Fund and Valuation Committee of
Morgenthaler Venture Funds(2). His business address is Richard K. Mellon and
Sons, P.O. Box RKM, Ligonier, PA 15658.

TRUSTEES OF THE PORTFOLIO

RICHARD L. CARPENTER** - Trustee; Retired; Director of Internal
Investments, Public School Employees' Retirement System (prior to December
1995). His business address is 12664 Lazy Acres Court, Nevada City, CA 95959.

CLIFFORD A. CLARK** - Trustee; Retired; Director of Schmid, Inc. (prior
to July 1993); Managing Director of the Smith-Denison Foundation. His business
address is 42 Clowes Drive, Falmouth, MA 02540.

DAVID M. SEITZMAN** - Trustee; Retired; Physician with Seitzman,
Shuman, Kwart and Phillips (prior to October 1997); Director of the National
Capital Underwriting Company, Commonwealth Medical Liability Insurance Co. and
National Capital Insurance Brokerage, Limited. His business address is 7117
Nevis Road, Bethesda, MD 20817.

OFFICERS OF THE CORPORATION AND THE PORTFOLIO

PHILIP W. COOLIDGE - President; Chief Executive Officer and President
of Signature Financial Group, Inc. ("SFG"), 59 Wall Street Distributors, Inc.
("59 Wall Street Distributors") and 59 Wall Street Administrators, Inc. ("59
Wall Street Administrators").

JAMES E. HOOLAHAN - Vice President; Senior Vice President of SFG.

JOHN R. ELDER - Treasurer; Vice President of SFG (since April 1995);
Treasurer of Phoenix Family of Mutual Funds (prior to April 1995).

LINDA T. GIBSON - Secretary; Senior Vice President and Secretary, SFG;
Secretary of 59 Wall Street Distributors and 59 Wall Street Administrators.

SUSAN JAKUBOSKI*** - Assistant Treasurer and Assistant Secretary of the
Portfolio; Assistant Secretary, Assistant Treasurer and Vice President of
Signature Financial Group (Grand Cayman) Limited (since August 1994); Fund
Compliance Administrator of Concord Financial Group, Inc. (from November 1990 to
August 1994).

MOLLY S. MUGLER - Assistant Secretary; Vice President and Assistant
Secretary of SFG; Assistant Secretary of 59 Wall Street Distributors and 59 Wall
Street Administrators.

CHRISTINE A. DRAPEAU - Assistant Secretary; Vice President of SFG (since
January 1996); Paralegal and Compliance Officer, various financial companies
(July 1992 to January 1996); Graduate Student, Bentley College (prior to
December 1994).

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

*Mr. Shields is an "interested person" of the Corporation and the
Portfolio because of his affiliation with a registered broker-dealer.

**These Directors and Trustees are members of the Audit Committee of the
Corporation or the Portfolio, as the case may be.

***Ms. Jakuboski is an officer of the Portfolio but is not an officer of the
Corporation.

(1) Shields & Company, Capital Management Associates, Inc. and Flowers
Industries, Inc., with which Mr. Shields is associated, are a
registered broker-dealer and a member of the New York Stock
Exchange, a registered investment adviser, and a diversified food
company, respectively.

(2) Richard K. Mellon and Sons, Richard King Mellon Foundation, Vought
Aircraft Corporation, Caterair International, The Carlyle Group
and Morgenthaler Venture Funds, with which Mr. Miltenberger is or
has been associated, are a private foundation, a private
foundation, an aircraft manufacturer, an airline food services
company, a merchant bank, and a venture capital partnership,
respectively.

Each Director and officer of the Corporation listed above holds the
equivalent position with The 59 Wall Street Trust. The address of each officer
of the Corporation and the Portfolio is 21 Milk Street, Boston, Massachusetts
02109. Messrs. Coolidge, Hoolahan and Elder and Mss. Gibson, Jakuboski, Mugler
and Drapeau also hold similar positions with other investment companies for
which affiliates of 59 Wall Street Distributors serves as the principal
underwriter.

Except for Mr. Shields, no Director or Trustee is an "interested
person" of the Corporation or the Portfolio, respectively, as that term is
defined in the 1940 Act.

<PAGE>

Directors of the Corporation

The Directors of the Corporation receive a base annual fee of $15,000
(except the Chairman who receives a base annual fee of $20,000) which is paid
jointly by all series of the Corporation and The 59 Wall Street Trust and
allocated among the series based upon their respective net assets. In addition,
each series which has commenced operations pays an annual fee to each Director
of $1,000.
<TABLE>

Compensation
from the
Pension or Corporation
Aggregate Benefits Accrued Estimated Annual and Fund
Name of Person, Compensation as Part of Benefits upon Complex* Paid
Position from the Corp. Fund Expenses Retirement to Directors

J.V. Shields, Jr., $12,450 none none $31,000
Director

Eugene P. Beard, $11,337 none none 26,000
Director

David P. Feldman, $11,337 none none 26,000
Director

Alan G. Lowy, $11,337 none none 26,000
Director

Arthur D. Miltenberger, $11,337 none none 26,000
Director

<FN>

* The Fund Complex consists of the Corporation and The 59 Wall Street Trust which currently consists of four
series.
</FN>
</TABLE>

Portfolio Trustees

The Trustees of the Portfolio receive a base annual fee of $12,000 (except
the Chairman who receives a base annual fee of $17,000) which is paid jointly by
the U.S. Money Market Portfolio and U.S. Small Company Portfolio together with
the Portfolio (the "Portfolio") and allocated among the Portfolios based upon
their respective net assets. In addition, the Portfolio which has commenced
operations pays an annual fee to each Trustee of $1,000.

Pension or Total
Retirement Compensation
Aggregate Benefits Accrued Estimated Annual from the
Name of Person, Compensation as Part of Benefits upon Portfolio
Position from the Portfolio Portfolio Expense Retirement Complex*
Paid to Trustees

Richard L. Carpenter, $5,534 none none $17,000
Trustee

Clifford A. Clark, 5,534 none none 17,000
Trustee

David M. Seitzman, 5,534 none none 17,000
Trustee

<FN>

*The Portfolio Complex consists of the Portfolio and U.S. Money Market Portfolio and U.S. Small Company
Portfolio.
</FN>
</TABLE>

By virtue of the responsibilities assumed by Brown Brothers Harriman & Co.
under the Investment Advisory Agreement with the Portfolio and the
Administration Agreement with the Corporation, and by Brown Brothers Harriman
Trust Company of New York ("Brown Brothers Harriman Trust Company") under the
Administration Agreement with the Portfolio (see "Investment Adviser" and
"Administrators"), none of the Corporation and the Portfolio requires employees
other than its officers, and none of its officers devote full time to the
affairs of the Corporation or the Portfolio, as the case may be, or, other than
the Chairmen, receive any compensation from the Corporation or the Portfolio.

As of January 31, 1999, the Directors of the Corporation, Trustees of the
Portfolio and officers of the Corporation and the Portfolio as a group
beneficially owned less than 1% of the outstanding shares of the Corporation and
less than 1% of the aggregate beneficial interests in the Portfolio. At the
close of business on that date, no person, to the knowledge of the management,
owned beneficially more than 5% of the outstanding shares of the Fund except
that : Isabelle Farrington Living Trust owned 194,846 (6.56%) of the outstanding
shares of the Fund. As of that date, the partners of Brown Brothers Harriman &
Co. and their immediate families owned 48,740 (1.7%) shares of the Fund. Brown
Brothers Harriman & Co. and its affiliates separately are able to direct the
disposition of an additional 1,878,593 (66.5%) shares of the Fund, as to which
shares Brown Brothers Harriman & Co. disclaims beneficial ownership.

<PAGE>

INVESTMENT ADVISER

Under its Investment Advisory Agreement with the Portfolio, subject to the
general supervision of the Portfolio's Trustees and in conformance with the
stated policies of the Portfolio, Brown Brothers Harriman & Co. provides
investment advice and portfolio management services to the Portfolio. In this
regard, it is the responsibility of Brown Brothers Harriman & Co. to make the
day-to-day investment decisions for the Portfolio, to place the purchase and
sale orders for portfolio transactions and to manage, generally, the Portfolio's
investments.

The Investment Advisory Agreement between Brown Brothers Harriman & Co. and
the Portfolio is dated August 23, 1994 and remains in effect for two years from
such date and thereafter, but only so long as the agreement is specifically
approved at least annually (i) by a vote of the holders of a "majority of the
outstanding voting securities" (as defined in the 1940 Act) of the Portfolio, or
by the Portfolio's Trustees, and (ii) by a vote of a majority of the Trustees of
the Portfolio who are not parties to the Investment Advisory Agreement or
"interested persons" (as defined in the 1940 Act) of the Portfolio ("Independent
Trustees"), cast in person at a meeting called for the purpose of voting on such
approval. The Investment Advisory Agreement was most recently approved by the
Independent Trustees of the Portfolio on November 10, 1998. The Investment
Advisory Agreement terminates automatically if assigned and is terminable at any
time without penalty by a vote of a majority of the Trustees of the Portfolio or
by a vote of the holders of a "majority of the outstanding voting securities"
(as defined in the 1940 Act) of the Portfolio on 60 days' written notice to
Brown Brothers Harriman & Co. and by Brown Brothers Harriman & Co. on 90 days'
written notice to the Portfolio (see "Additional Information").

The investment advisory fee paid to the Investment Adviser from the
Portfolio is calculated daily and paid monthly at an annual rate equal to 0.65%
of the average daily net assets of the Portfolio. For the fiscal years ended
October 31, 1998, October 31, 1997 and October 31, 1996, the Portfolio incurred
$448,851, $293,880 and $226,127, respectively, for advisory fees.

The investment advisory services of Brown Brothers Harriman & Co. to
the Portfolio are not exclusive under the terms of the Investment Advisory
Agreement. Brown Brothers Harriman & Co. is free to and does render investment
advisory services to others, including other registered investment companies.

Pursuant to license agreements between Brown Brothers Harriman & Co. and each
of 59 Wall Street Administrators and 59 Wall Street Distributors (each a
"Licensee"), dated June 22, 1993 and June 8, 1990, respectively, each Licensee
may continue to use in its name "59 Wall Street", the current and historic
address of Brown Brothers Harriman & Co., only if Brown Brothers Harriman & Co.
does not terminate the respective license agreement, which would require the
Licensee to change its name to eliminate all references to "59 Wall Street".

The Glass-Steagall Act prohibits certain financial institutions from
engaging in the business of underwriting, selling or distributing securities and
from sponsoring, organizing or controlling a registered open-end investment
company continuously engaged in the issuance of its shares, such as the
Corporation. There is presently no controlling precedent prohibiting financial
institutions such as Brown Brothers Harriman & Co. from performing the
investment advisory, administrative or shareholder servicing/eligible
institution functions described above. If Brown Brothers Harriman & Co. were to
terminate its Investment Advisory Agreements with the Portfolio, or were
prohibited from acting in such capacity, it is expected that the Trustees of the
Portfolio would recommend to the investors that they approve a new investment
advisory agreement for the Portfolio with another qualified adviser. If Brown
Brothers Harriman & Co. were to terminate its Shareholder Servicing Agreement,
Eligible Institution Agreement or Administration Agreement with the Corporation
or were prohibited from acting in any such capacity, its customers would be
permitted to remain shareholders of the Fund and alternative means for providing
shareholder services or administrative services, as the case may be, would be
sought. In such event, although the operation of the Corporation might change,
it is not expected that any shareholders would suffer any adverse financial
consequences. However, an alternative means of providing shareholder services
might afford less convenience to shareholders.

ADMINISTRATORS

Brown Brothers Harriman & Co. acts as Administrator of the Corporation
and Brown Brothers Harriman Trust Company acts as Administrator of the
Portfolio. Brown Brothers Harriman Trust Company is a wholly-owned subsidiary of
Brown Brothers Harriman & Co.

<PAGE>

In its capacity as Administrator of the Corporation, Brown Brothers Harriman
& Co. administers all aspects of the Corporation's operations subject to the
supervision of the Corporation's Directors except as set forth below under
"Distributor". In connection with its responsibilities as Administrator and at
its own expense, Brown Brothers Harriman & Co. (i) provides the Corporation with
the services of persons competent to perform such supervisory, administrative
and clerical functions as are necessary in order to provide effective
administration of the Corporation, including the maintenance of certain books
and records; (ii) oversees the performance of administrative and professional
services to the Corporation by others, including the Funds' Custodian, Transfer
and Dividend Disbursing Agent; (iii) provides the Corporation with adequate
office space and communications and other facilities; and (iv) prepares and/or
arranges for the preparation, but does not pay for, the periodic updating of the
Corporation's registration statement and the Fund's prospectus, the printing of
such documents for the purpose of filings with the Securities and Exchange
Commission and state securities administrators, and the preparation of tax
returns for the Fund and reports to the Fund's shareholders and the Securities
and Exchange Commission.

Brown Brothers Harriman Trust Company, in its capacity as Administrator of
the Portfolio, administers all aspects of the Portfolio's operations subject to
the supervision of the Portfolio's Trustees except as set forth above under
"Investment Adviser". In connection with its responsibilities as Administrator
for the Portfolio and at its own expense, Brown Brothers Harriman Trust Company
(i) provides the Portfolio with the services of persons competent to perform
such supervisory, administrative and clerical functions as are necessary in
order to provide effective administration of the Portfolio, including the
maintenance of certain books and records, receiving and processing requests for
increases and decreases in the beneficial interests in the Portfolio,
notification to the Investment Adviser of available funds for investment,
reconciliation of account information and balances between the Custodian and the
Investment Adviser, and processing, investigating and responding to investor
inquiries; (ii) oversees the performance of administrative and professional
services to the Portfolio by others, including the Custodian; (iii) provides the
Portfolio with adequate office space and communications and other facilities;
and (iv) prepares and/or arranges for the preparation, but does not pay for, the
periodic updating of the Portfolio's registration statement for filing with the
Securities and Exchange Commission, and the preparation of tax returns for the
Portfolio and reports to investors and the Securities and Exchange Commission.

Prior to March 1, 1999, Brown Brothers Harriman Trust Company (Cayman)
Limited acted as administrator of the Portfolio under the same terms and
conditions as set forth herein.

For the services rendered to the Portfolio and related expenses borne by
Brown Brothers Harriman Trust Company as Administrator of the Portfolio, Brown
Brothers Harriman Trust Company receives from the Portfolio an annual fee,
computed daily and payable monthly, equal to 0.035% of that Portfolio's average
daily net assets. For the fiscal years ended October 31, 1998, October 31, 1997
and October 31, 1996, the Portfolio incurred $23,282, $15,824 and $12,176,
respectively, for administrative services.

The Administration Agreement between the Corporation and Brown Brothers
Harriman & Co. (dated November 1, 1993) will remain in effect for two years from
such date and thereafter, but only so long as such agreement is specifically
approved at least annually in the same manner as the Portfolio's Investment
Advisory Agreement (see "Investment Adviser"). The Administration Agreement
between the Portfolio and Brown Brothers Harriman Trust Company (dated March 1,
1999) will remain in effect for successive annual periods, but only so long as
such agreement is specifically approved at least annually in the same manner as
the Portfolio's Investment Advisory Agreement (see "Investment Adviser"). The
Independent Directors/Trustees most recently approved the Corporation's
Administration Agreement on November 10, 1998 and the Portfolio's Administration
Agreement on February 9, 1999. Each agreement will terminate automatically if
assigned by either party thereto and is terminable by the Corporation or the
Portfolio at any time without penalty by a vote of a majority of the Directors
of the Corporation or the Trustees of the Portfolio, as the case may be, or by a
vote of the holders of a "majority of the outstanding voting securities" (as
defined in the 1940 Act) of the Corporation or the Portfolio, as the case may be
(see "Additional Information"). The Corporation's Administration Agreement is
terminable by the Directors of the Corporation or shareholders of the
Corporation on 60 days' written notice to Brown Brothers Harriman & Co. The
Portfolio's Administration Agreement is terminable by the Trustees of the
Portfolio or by the Portfolio's corresponding Fund and other investors in the
Portfolio on 60 days' written notice to Brown Brothers Harriman Trust Company.
Each agreement is terminable by the contracting Administrator on 90 days'
written notice to the Corporation or the Portfolio, as the case may be.

The administrative fee payable to Brown Brothers Harriman & Co. from the Fund
is calculated daily and payable monthly at an annual rate equal to 0.125% of the
Fund's average daily net assets. For the period June 6, 1997 through October 31,
1997, the Fund incurred $2,739 for administrative services. For the fiscal year
ended October 31, 1998, the Fund incurred $29,548 for administrative services.

Pursuant to a Subadministrative Services Agreement with Brown Brothers
Harriman & Co., 59 Wall Street Administrators, Inc. ("59 Wall Street
Administrators") performs such subadministrative duties for the Corporation as
are from time to time agreed upon by the parties. The offices of 59 Wall Street
Administrators are located at 21 Milk Street, Boston, Massachusetts 02109. 59
Wall Street Administrators is a wholly-owned subsidiary of Signature Financial
Group, Inc. ("SFG"). SFG is not affiliated with Brown Brothers Harriman & Co. 59
Wall Street Administrators' subadministrative duties may include providing
equipment and clerical personnel necessary for maintaining the organization of
the Corporation, participation in the preparation of documents required for
compliance by the Corporation with applicable laws and regulations, preparation
of certain documents in connection with meetings of Directors and shareholders
of the Corporation, and other functions that would otherwise be performed by the
Administrator as set forth above. For performing such subadministrative
services, 59 Wall Street Administrators receives such compensation as is from
time to time agreed upon, but not in excess of the amount paid to the
Administrator from the Fund.

Pursuant to a Subadministrative Services Agreement with Brown Brothers
Harriman Trust Company, 59 Wall Street Administrators performs such
subadministrative duties for the Portfolio as are from time to time agreed upon
by the parties. The offices of 59 Wall Street Administrators are located at 21
Milk Street, Boston, MA 02109. 59 Wall Street Administrators is a wholly-owned
subsidiary of Signature Financial Group, Inc. ("SFG"). SFG is not affiliated
with Brown Brothers Harriman & Co. 59 Wall Street Administrators'
subadministrative duties may include providing equipment and clerical personnel
necessary for maintaining the organization of the Portfolio, participation in
the preparation of documents required for compliance by the Portfolio with
applicable laws and regulations, preparation of certain documents in connection
with meetings of Trustees of and investors in the Portfolio, and other functions
that would otherwise be performed by the Administrator of the Portfolio as set
forth above. For performing such subadministrative services, 59 Wall Street
Administrators receives such compensation as is from time to time agreed upon,
but not in excess of the amount paid to the Administrator from the Portfolio.

Prior to March 1, 1999, Signature Financial Group (Cayman) Limited acted as
subadministrator for the Portfolio under the same terms and conditions as set
forth herein.

DISTRIBUTOR

59 Wall Street Distributors acts as exclusive Distributor of shares of the
Fund. Its office is located at 21 Milk Street, Boston, Massachusetts 02109. 59
Wall Street Distributors is a wholly-owned subsidiary of SFG. SFG and its
affiliates currently provide administration and distribution services for other
registered investment companies. The Corporation pays for the preparation,
printing and filing of copies of the Corporation's registration statements and
the Fund's prospectus as required under federal and state securities laws.

59 Wall Street Distributors holds itself available to receive purchase orders
for Fund shares.

The Distribution Agreement (dated September 5, 1990, as amended and restated
February 12, 1991) between the Corporation and 59 Wall Street Distributors
remains in effect indefinitely, but only so long as such agreement is
specifically approved at least annually in the same manner as the Portfolio's
Investment Advisory Agreement (see "Investment Adviser"). The Distribution
Agreement was approved by the Independent Directors of the Corporation on
February 9, 1999. The agreement terminates automatically if assigned by either
party thereto and is terminable with respect to the Fund at any time without
penalty by a vote of a majority of the Directors of the Corporation or by a vote
of the holders of a "majority of the Fund's outstanding voting securities" (as
defined in the 1940 Act). (See "Additional Information"). The Distribution
Agreement is terminable with respect to the Fund by the Corporation's Directors
or shareholders of the Fund on 60 days' written notice to 59 Wall Street
Distributors. The agreement is terminable by 59 Wall Street Distributors on 90
days' written notice to the Corporation.

SHAREHOLDER SERVICING AGENT

The Corporation has entered into a shareholder servicing agreement with Brown
Brothers Harriman & Co. pursuant to which Brown Brothers Harriman & Co., as
agent for the Corporation with respect to the Fund, among other things: answers
inquiries from shareholders of and prospective investors in the Fund regarding
account status and history, the manner in which purchases and redemptions of
Fund shares may be effected and certain other matters pertaining to the Fund;
assists shareholders of and prospective investors in the Fund in designating and
changing dividend options, account designations and addresses; and provides such
other related services as the Corporation or a shareholder of or prospective
investor in the Fund may reasonably request. For these services, Brown Brothers
Harriman & Co. receives from the Fund an annual fee, computed daily and payable
monthly, equal to 0.25% of the Fund's average daily net assets represented by
shares owned during the period for which payment was being made by shareholders
who did not hold their account with an Eligible Institution.

FINANCIAL INTERMEDIARIES

From time to time, the Fund's Shareholder Servicing Agent enters into
contracts with banks, brokers and other financial intermediaries ("Financial
Intermediaries") pursuant to which a customer of the Financial Intermediary may
place purchase orders for Fund shares through that Financial Intermediary which
holds such shares in its name on behalf of that customer. Pursuant to such
contract, each Financial Intermediary as agent with respect to shareholders of
and prospective investors in the Fund who are customers of that Financial
Intermediary, among other things: provides necessary personnel and facilities to
establish and maintain certain shareholder accounts and records enabling it to
hold, as agent, its customers' shares in its name or its nominee name on the
shareholder records of the Corporation; assists in processing purchase and
redemption transactions; arranges for the wiring of funds; transmits and
receives funds in connection with customer orders to purchase or redeem shares
of the Funds; provides periodic statements showing a customer's account balance
and, to the extent practicable, integrates such information with information
concerning other customer transactions otherwise effected with or through it;
furnishes, either separately or on an integrated basis with other reports sent
to a customer, monthly and annual statements and confirmations of all purchases
and redemptions of Fund shares in a customer's account; transmits proxy
statements, annual reports, updated prospectuses and other communications from
the Corporation to its customers; and receives, tabulates and transmits to the
Corporation proxies executed by its customers with respect to meetings of
shareholders of the Fund. For these services, the Financial Intermediary
receives such fees from the Shareholder Servicing Agent as may be agreed upon
from time to time between the Shareholder Servicing Agent and such Financial
Intermediary.

ELIGIBLE INSTITUTIONS

The Corporation enters into eligible institution agreements with banks,
brokers and other financial institutions pursuant to which each financial
institution, as agent for the Corporation with respect to shareholders of and
prospective investors in the Fund who are customers with that financial
institution, among other things: provides necessary personnel and facilities to
establish and maintain certain shareholder accounts and records enabling it to
hold, as agent, its customer's shares in its name or its nominee name on the
shareholder records of the Corporation; assists in processing purchase and
redemption transactions; arranges for the wiring of funds; transmits and
receives funds in connection with customer orders to purchase or redeem shares
of the Fund; provides periodic statements showing a customer's account balance
and, to the extent practicable, integrates such information with information
concerning other customer transactions otherwise effected with or through it;
furnishes, either separately or on an integrated basis with other reports sent
to a customer, monthly and annual statements and confirmations of all purchases
and redemptions of Fund shares in a customer's account; transmits proxy
statements, annual reports, updated prospectuses and other communications from
the Corporation to its customers; and receives, tabulates and transmits to the
Corporation proxies executed by its customers with respect to meetings of
shareholders of the Fund. For these services, each financial institution
receives from the Fund an annual fee, computed daily and payable monthly, equal
to 0.25% of the Fund's average daily net assets represented by shares owned
during the period for which payment was being made by customers for whom the
financial institution was the holder or agent of record.

EXPENSE PAYMENT AGREEMENT

Under an agreement dated March 1, 1999, Brown Brothers Harriman Trust Company
pays the expenses of the Portfolio, other than fees paid to Brown Brothers
Harriman & Co. under the Portfolio's Administration Agreement and other than
expenses relating to the organization of the Portfolio. In return, Brown
Brothers Harriman Trust Company receives a fee from the Portfolio such that
after such payment the aggregate expenses of the Portfolio do not exceed an
agreed upon annual rate, currently 0.90% of the average daily net assets of the
Portfolio. Such fees are computed daily and paid monthly. Prior to March 1,
1999, Brown Brothers Harriman Trust Company (Cayman) Limited paid the expenses
of the Portfolio under the same terms and conditions as set forth herein.

CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT

State Street Bank and Trust Company ("State Street" or the "Custodian"), 225
Franklin Street, P.O. Box 351, Boston, Massachusetts 02110, is Custodian for the
Funds and the Portfolios and Transfer and Dividend Disbursing Agent for the
Funds.
As Custodian for the Fund, it is responsible for holding the Fund's assets
(i.e., cash and the Fund's interest in the Portfolio) pursuant to a custodian
agreement with the Corporation. Cash is held for the Fund in demand deposit
accounts at the Custodian. Subject to the supervision of the Administrator of
the Corporation, the Custodian maintains the accounting records for the Fund and
each day computes the net asset value per share of the Fund. As Transfer and
Dividend Disbursing Agent it is responsible for maintaining the books and
records detailing the ownership of the Fund's shares.

As Custodian for the Portfolio, it is responsible for maintaining books and
records of portfolio transactions and holding the Portfolio's securities and
cash pursuant to a custodian agreement with the Portfolio. Cash is held for the
Portfolio in demand deposit accounts at the Custodian. Subject to the
supervision of the Administrator of the Portfolio, the Custodian maintains the
accounting and portfolio transaction records for the Portfolio and each day
computes the net asset value and net income of the Portfolio.

INDEPENDENT AUDITORS

Deloitte & Touche LLP, Boston, Massachusetts are the independent auditors for
the Fund and the Portfolio.

NET ASSET VALUE; REDEMPTION IN KIND

The Fund's net asset value per share is determined once daily at 4:00 p.m.,
New York time on each day the New York Stock Exchange is open for regular
trading. (As of the date of this Statement of Additional Information, such
Exchange is so open every weekday except for the following holidays: New Year's
Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas.) The determination
of the Fund's net asset value of per share is made by subtracting from the value
of the Fund's total assets (i.e., the value of its investment in the Portfolio
and other assets) the amount of its liabilities, including expenses payable or
accrued, and dividing the difference by the number of shares of the Fund
outstanding at the time the determination is made.

The value of the Portfolio's net assets (i.e., the value of its securities
and other assets less its liabilities, including expenses payable or accrued) is
determined at the same time and on the same days as the net asset value per
share of the Fund is determined. The value of the Fund's investment in the
Portfolio is determined by multiplying the value of the Portfolio's net assets
by the percentage, effective for that day, which represents the Fund's share of
the aggregate beneficial interests in the Portfolio.

The value of investments listed on a domestic securities exchange is based on
the last sale prices as of the regular close of the New York Stock Exchange
(which is currently 4:00 P.M., New York time) or, in the absence of recorded
sales, at the average of readily available closing bid and asked prices on such
Exchange. Securities listed on a foreign exchange are valued at the last quoted
sale price available before the time at which net assets are valued.

Unlisted securities are valued at the average of the quoted bid and asked
prices in the over-the-counter market. The value of each security for which
readily available market quotations exist is based on a decision as to the
broadest and most representative market for such security. For purposes of
calculating net asset value per share, all assets and liabilities initially
expressed in foreign currencies are converted into U.S. dollars at the
prevailing market rates available at the time of valuation.

Securities or other assets for which market quotations are not readily
available are valued at fair value in accordance with procedures established by
and under the general supervision and responsibility of the Portfolio's
Trustees. Such procedures include the use of independent pricing services, which
use prices based upon yields or prices of securities of comparable quality,
coupon, maturity and type; indications as to values from dealers; and general
market conditions. Short-term investments which mature in 60 days or less are
valued at amortized cost if their original maturity was 60 days or less, or by
amortizing their value on the 61st day prior to maturity, if their original
maturity when acquired was more than 60 days, unless this is determined not to
represent fair value by the Trustees of the Portfolio.

Trading in securities on most foreign exchanges and over-the-counter markets
is normally completed before the close of the New York Stock Exchange and may
also take place on days the New York Stock Exchange is closed. If events
materially affecting the value of foreign securities occur between the time when
the exchange on which they are traded closes and the time when the Portfolio's
net asset value is calculated, such securities would be valued at fair value in
accordance with procedures established by and under the general supervision of
the Portfolio's Trustees.

Subject to the Corporation's compliance with applicable regulations, the
Corporation has reserved the right to pay the redemption price of shares of the
Fund, either totally or partially, by a distribution in kind of portfolio
securities (instead of cash). The securities so distributed would be valued at
the same amount as that assigned to them in calculating the net asset value for
the shares being sold. If a shareholder received a distribution in kind, the
shareholder could incur brokerage or other charges in converting the securities
to cash. The Corporation has elected, however, to be governed by Rule 18f-1
under the 1940 Act, as a result of which the Corporation is obligated with
respect to any one investor during any 90 day period to redeem shares of the
Fund solely in cash up to the lesser of $250,000 or 1% of that Fund's net assets
at the beginning of such 90 day period.

COMPUTATION OF PERFORMANCE

The average annual total return of the Fund is calculated for any period by
(a) dividing (i) the sum of the aggregate net asset value per share on the last
day of the period of shares purchased with a $1,000 payment on the first day of
the period and the aggregate net asset value per share on the last day of the
period of shares purchasable with dividends and capital gains distributions
declared during such period with respect to shares purchased on the first day of
such period and with respect to shares purchased with such dividends and capital
gains distributions, by (ii) $1,000, (b) raising the quotient to a power equal
to 1 divided by the number of years in the period, and (c) subtracting 1 from
the result.

The total rate of return of the Fund for any specified period is calculated
by (a) dividing (i) the sum of the aggregate net asset value per share on the
last day of the period of shares purchased with a $1,000 payment on the first
day of the period and the aggregate net asset value per share on the last day of
the period of shares purchasable with dividends and capital gains distributions
declared during such period with respect to shares purchased on the first day of
such period and with respect to shares purchased with such dividends and capital
gains distributions, by (ii) $1,000, and (b) subtracting 1 from the result.

Historical total return information for any period or portion thereof prior
to the establishment of the Fund will be that of the Portfolio, adjusted to
assume that all charges, expenses and fees of the Fund and the Portfolio which
are presently in effect were deducted during such periods, as permitted by
applicable SEC staff interpretations. The table that follows sets forth average
annual total return information for the periods indicated:

10/31/98

1 Year: 8.06%

Commencement of

Operations* to

date: 6.29%

* The Portfolio commenced operations on April 1, 1995.

Performance calculations should not be considered a representation of
the average annual or total rate of return of the Fund in the future since the
rates of return are not fixed. Actual total rates of return and average annual
rates of return depend on changes in the market value of, and dividends and
interest received from, the investments held by the Fund's Portfolio and the
Fund's and Portfolio's expenses during the period.

Total and average annual rate of return information may be useful for
reviewing the performance of the Fund and for providing a basis for comparison
with other investment alternatives. However, unlike bank deposits or other
investments which pay a fixed yield for a stated period of time, the Fund's
total rate of return fluctuates, and this should be considered when reviewing
performance or making comparisons.

The Fund's performance may be used from time to time in shareholder reports
or other communications to shareholders or prospective investors. Performance
figures are based on historical earnings and are not intended to indicate future
performance. Performance information may include the Fund's investment results
and/or comparisons of its investment results to various unmanaged indexes (such
as the MSCI-EAFE Index) and to investments for which reliable performance data
is available. Performance information may also include comparisons to averages,
performance rankings or other information prepared by recognized mutual fund
statistical services. To the extent that unmanaged indexes are so included, the
same indexes are used on a consistent basis. The Fund's investment results as
used in such communications are calculated on a total rate of return basis in
the manner set forth below.

Period and average annualized "total rates of return" may be provided in such
communications. The "total rate of return" refers to the change in the value of
an investment in the Fund over a stated period based on any change in net asset
value per share and including the value of any shares purchasable with any
dividends or capital gains distributions during such period. Period total rates
of return may be annualized. An annualized total rate of return is a compounded
total rate of return which assumes that the period total rate of return is
generated over a one year period, and that all dividends and capital gains
distributions are reinvested. An annualized total rate of return is slightly
higher than a period total rate of return if the period is shorter than one
year, because of the assumed reinvestment.

Historical performance information for any period or portion thereof prior to
the establishment of the Fund will be that of the Portfolio, adjusted to assume
that all charges, expenses and fees of the Fund and the Portfolio which are
presently in effect were deducted during such periods, as permitted by
applicable SEC staff interpretations.

PURCHASES AND REDEMPTIONS

A confirmation of each purchase and redemption transaction is issued as
on execution of that transaction.

The Corporation reserves the right to discontinue, alter or limit the
automatic reinvestment privilege at any time, but will provide shareholders
prior written notice of any such discontinuance, alteration or limitation.

A shareholder's right to receive payment with respect to any redemption
may be suspended or the payment of the redemption proceeds postponed: (i) during
periods when the New York Stock Exchange is closed for other than weekends and
holidays or when regular trading on such Exchange is registered as determined by
the Securities and Exchange Commission by rule or regulation, (ii) during
periods in which an emergency exists which causes disposal of, or evaluation of
the net asset value of, portfolio securities to be unreasonable or
impracticable, or (iii) for such other periods as the Securities and Exchange
Commission may permit.

An investor should be aware that redemptions from the Fund may not be
processed if a completed account application with a certified taxpayer
identification number has not been received.

In the event a shareholder redeems all shares held in the Fund, future
purchases of shares of the Fund by such shareholder would be subject to the
Fund's minimum initial purchase requirements.

FEDERAL TAXES

Each year, the Corporation intends to continue to qualify the Fund and elect
that the Fund be treated as a separate "regulated investment company" of the
Internal Revenue Code of 1986, as amended (the "Code"). Accordingly, the Fund is
not subject to federal income taxes on its Net Income and realized net long-term
capital gains in excess of net short-term capital losses that are distributed to
their shareholders. A 4% non-deductible excise tax is imposed on the Fund to the
extent that certain distribution requirements for the Fund for each calendar
year are not met. The Corporation intends to continue to meet such requirements.
The Portfolio are also not required to pay any federal income or excise taxes.
Under Subchapter M of the Code, the Fund is not subject to federal income taxes
on amounts distributed to shareholders.

Qualification as a regulated investment company under the Code requires,
among other things, that (a) at least 90% of the Fund's annual gross income,
without offset for losses from the sale or other disposition of securities, be
derived from interest, payments with respect to securities loans, dividends and
gains from the sale or other disposition of securities, foreign currencies or
other income derived with respect to its business of investing in such
securities; (b) less than 30% of the Fund's annual gross income be derived from
gains (without offset for losses) from the sale or other disposition of
securities held for less than three months; and (c) the holdings of the Fund be
diversified so that, at the end of each quarter of its fiscal year, (i) at least
50% of the market value of the Fund's assets be represented by cash, U.S.
Government securities and other securities limited in respect of any one issuer
to an amount not greater than 5% of the Fund's assets and 10% of the outstanding
voting securities of such issuer, and (ii) not more than 25% of the value of the
Fund's assets be represented by investments in the securities of any one issuer
(other than U.S. Government securities and securities of other investment
companies). Foreign currency gains that are not directly related to the
Portfolio's business of investing in stock or securities is included in the
income that counts toward the 30% gross income requirement described above but
may be excluded by Treasury Regulations from income that counts toward the 90%
of gross income requirement described above. In addition, in order not to be
subject to federal income tax, at least 90% of the Fund's net investment income
and net short-term capital gains earned in each year must be distributed to the
Fund's shareholders.

Under the Code, gains or losses attributable to foreign currency contracts,
or to fluctuations in exchange rates between the time the Portfolio accrues
income or receivables or expenses or other liabilities denominated in a foreign
currency and the time it actually collects such income or pays such liabilities,
are treated as ordinary income or ordinary loss. Similarly, the Fund's share of
gains or losses on the disposition of debt securities held by the Portfolio, if
any, denominated in foreign currency, to the extent attributable to fluctuations
in exchange rates between the acquisition and disposition dates are also treated
as ordinary income or loss.

Dividends paid from the Fund are not eligible for the dividends-received
deduction allowed to corporate shareholders because the net income of the
Portfolio does not consist of dividends paid by domestic corporations.

Gains or losses on sales of securities are treated as long-term capital gains
or losses if the securities have been held for more than one year except in
certain cases where a put has been acquired or a call has been written thereon.
Other gains or losses on the sale of securities are treated as short-term
capital gains or losses. Gains and losses on the sale, lapse or other
termination of options on securities are generally treated as gains and losses
from the sale of securities. If an option written for the Portfolio lapses or is
terminated through a closing transaction, such as a repurchase of the option
from its holder, the Portfolio may realize a short-term capital gain or loss,
depending on whether the premium income is greater or less than the amount paid
in the closing transaction. If securities are sold pursuant to the exercise of a
call option written for them, the premium received would be added to the sale
price of the securities delivered in determining the amount of gain or loss on
the sale. The requirement that less than 30% of the Fund's gross income be
derived from gains from the sale of securities held for less than three months
may limit the Portfolio's ability to write options and engage in transactions
involving stock index futures.

Certain options contracts held for the Portfolio at the end of each fiscal
year are required to be "marked to market" for federal income tax purposes; that
is, treated as having been sold at market value. Sixty percent of any gain or
loss recognized on these deemed sales and on actual dispositions are treated as
long-term capital gain or loss, and the remainder are treated as short-term
capital gain or loss regardless of how long the Portfolio has held such options.
The Portfolio may be required to defer the recognition of losses on stock or
securities to the extent of any unrecognized gain on offsetting positions held
for it.

If shares are purchased by the Portfolio in certain foreign investment
entities, referred to as "passive foreign investment companies", the Fund may be
subject to U.S. federal income tax, and an additional charge in the nature of
interest, on the Fund's portion of any "excess distribution" from such company
or gain from the disposition of such shares, even if the distribution or gain is
paid by the Fund as a dividend to its shareholders. If the Fund were able and
elected to treat a passive foreign investment company as a "qualified electing
fund", in lieu of the treatment described above, the Fund would be required each
year to include in income, and distribute to shareholders, in accordance with
the distribution requirements set forth above, the Fund's pro rata share of the
ordinary earnings and net capital gains of the company, whether or not
distributed to the Fund.

Redemption of Shares. Any gain or loss realized on the redemption of Fund
shares by a shareholder who is not a dealer in securities is treated as
long-term capital gain or loss if the shares have been held for more than one
year, and otherwise as short-term capital gain or loss. However, any loss
realized by a shareholder upon the redemption of Fund shares held one year or
less is treated as a long-term capital loss to the extent of any long-term
capital gains distributions received by the shareholder with respect to such
shares. Additionally, any loss realized on a redemption or exchange of Fund
shares is disallowed to the extent the shares disposed of are replaced within a
period of 61 days beginning 30 days before such disposition, such as pursuant to
reinvestment of a dividend or capital gains distribution in Fund shares.

Foreign Taxes. The Fund may be subject to foreign withholding taxes and if
more than 50% of the value of the Fund's share of the Portfolio's total assets
at the close of any fiscal year consists of stock or securities of foreign
corporations, at the election of the Corporation any such foreign income taxes
paid by the Fund may be treated as paid directly by its shareholders. The
Corporation makes such an election only if it deems it to be in the best
interest of the Fund's shareholders and notifies shareholders in writing each
year if it makes the election and of the amount of foreign income taxes, if any,
to be treated as paid by the shareholders. If the Corporation elects to treat
foreign income taxes paid from the Fund as paid directly by the Fund's
shareholders, the Fund's shareholders would be required to include in income
such shareholder's proportionate share of the amount of foreign income taxes
paid by the Fund and would be entitled to claim either a credit or deduction in
such amount. (No deduction is permitted in computing alternative minimum tax
liability). Shareholders who choose to utilize a credit (rather than a
deduction) for foreign taxes are subject to the limitation that the credit may
not exceed the shareholder's U.S. tax (determined without regard to the
availability of the credit) attributable to that shareholder's total foreign
source taxable income. For this purpose, the portion of dividends and capital
gains distributions paid from the Fund from its foreign source income is treated
as foreign source income. The Fund's gains and losses from the sale of
securities are generally treated as derived from U.S. sources, however, and
certain foreign currency gains and losses likewise are treated as derived from
U.S. sources. The limitation of the foreign tax credit is applied separately to
foreign source "passive income", such as the portion of dividends received from
the Fund which qualifies as foreign source income. In addition, the foreign tax
credit is allowed to offset only 90% of the alternative minimum tax imposed on
corporations and individuals. Because of these limitations, a shareholder may be
unable to claim a credit for the full amount of such shareholder's proportionate
share of the foreign income taxes paid from the Fund.

Certain entities, including corporations formed as part of corporate pension
or profit-sharing plans and certain charitable and other organizations described
in Section 501 (c) of the Internal Revenue Code, as amended, that are generally
exempt from federal income taxes may not receive any benefit from the election
by the Corporation to "pass through" foreign income taxes to the Fund's
shareholders.
In certain circumstances foreign taxes imposed with respect to the Fund's
income may not be treated as income taxes imposed on the Fund. Any such taxes
would not be included in the Fund's income, would not be eligible to be "passed
through" to Fund shareholders, and would not be eligible to be claimed as a
foreign tax credit or deduction by Fund shareholders. In particular, in certain
circumstances it may not be clear whether certain amounts of taxes deducted from
gross dividends paid to the Fund would, for U.S. federal income tax purposes, be
treated as imposed on the issuing corporation rather than the Fund.

Other Taxes. The Fund is subject to state or local taxes in jurisdictions in
which it is deemed to be doing business. In addition, the treatment of the Fund
and its shareholders in those states which have income tax laws might differ
from treatment under the federal income tax laws. Distributions to shareholders
may be subject to additional state and local taxes. Shareholders should consult
their own tax advisors with respect to any state or local taxes.
Other Information. Annual notification as to the tax status of capital gains
distributions, if any, is provided to shareholders shortly after October 31, the
end of the Fund's fiscal year. Additional tax information is mailed to
shareholders in January.
Under U.S. Treasury regulations, the Corporation and each Eligible
Institution are required to withhold and remit to the U.S. Treasury a portion
(31%) of dividends and capital gains distributions on the accounts of those
shareholders who fail to provide a correct taxpayer identification number
(Social Security Number for individuals) or to make required certifications, or
who have been notified by the Internal Revenue Service that they are subject to
such withholdings. Prospective investors should submit an IRS Form W-9 to avoid
such withholding.

This tax discussion is based on the tax laws and regulations in effect on the
date of this Prospectus, however such laws and regulations are subject to
change. Shareholders and prospective investors are urged to consult their tax
advisors regarding specific questions relevant to their particular
circumstances.

DESCRIPTION OF SHARES

The Corporation is an open-end management investment company organized as a
Maryland corporation on July 16, 1990. Its offices are located at 21 Milk
Street, Boston, Massachusetts 02109; its telephone number is (617) 423-0800. The
Articles of Incorporation currently permit the Corporation to issue
2,500,000,000 shares of common stock, par value $0.001 per share, of which
25,000,000 shares have been classified as shares of The 59 Wall Street
International Equity Fund. The Board of Directors of the Corporation also has
the power to designate one or more series of shares of common stock and to
classify and reclassify any unissued shares with respect to such series.
Currently there are six such series in addition to the Fund.

Each share of the Fund represents an equal proportional interest in the Fund
with each other share. Upon liquidation of the Fund, shareholders are entitled
to share pro rata in the net assets of the Fund available for distribution to
shareholders.

Shareholders are entitled to a full vote for each full share held and to a
fractional vote for fractional shares. Shareholders in the Corporation do not
have cumulative voting rights, and shareholders owning more than 50% of the
outstanding shares of the Corporation may elect all of the Directors of the
Corporation if they choose to do so and in such event the other shareholders in
the Corporation would not be able to elect any Director. The Corporation is not
required and has no current intention to hold meetings of shareholders annually
but the Corporation will hold special meetings of shareholders when in the
judgment of the Corporation's Directors it is necessary or desirable to submit
matters for a shareholder vote as may be required by the 1940 Act or as may be
permitted by the Articles of Incorporation or By-laws. Shareholders have under
certain circumstances (e.g., upon application and submission of certain
specified documents to the Directors by a specified number of shareholders) the
right to communicate with other shareholders in connection with requesting a
meeting of shareholders for the purpose of removing one or more Directors.
Shareholders also have the right to remove one or more Directors without a
meeting by a declaration in writing by a specified number of shareholders.
Shares have no preemptive or conversion rights. The rights of redemption are
described in the Prospectus. Shares are fully paid and non-assessable by the
Corporation.

The By-laws of the Corporation provide that the presence in person or by
proxy of the holders of record of one third of the shares of a Fund outstanding
and entitled to vote thereat shall constitute a quorum at all meetings of
shareholders of the Fund, except as otherwise required by applicable law. The
By-laws further provide that all questions shall be decided by a majority of the
votes cast at any such meeting at which a quorum is present, except as otherwise
required by applicable law.

The Corporation's Articles of Incorporation provide that, at any meeting of
shareholders of the Fund, each Eligible Institution may vote any shares as to
which that Eligible Institution is the agent of record and which are otherwise
not represented in person or by proxy at the meeting, proportionately in
accordance with the votes cast by holders of all shares otherwise represented at
the meeting in person or by proxy as to which that Eligible Institution is the
agent of record. Any shares so voted by an Eligible Institution are deemed
represented at the meeting for purposes of quorum requirements.

The Portfolio is organized as a trust under the law of the State of New York.
The Portfolio's Declaration of Trust provides that the Fund and other entities
investing in the Portfolio (e.g., other investment companies, insurance company
separate accounts and common and commingled trust funds) are liable for all
obligations of the Portfolio. However, the risk of the Fund incurring financial
loss on account of such liability is limited to circumstances in which both
inadequate insurance existed and the Portfolio itself was unable to meet its
obligations. Accordingly, the Directors of the Corporation believe that neither
the Fund nor its shareholders will be adversely affected by reason of the
investment of all of the Fund's assets in the Portfolio.

Each investor in the Portfolio, including the Fund, may add to or reduce its
investment in the Portfolio on each day the New York Stock Exchange is open for
regular trading. At 4:00 P.M., New York time on each such business day, the
value of each investor's beneficial interest in a Portfolio is determined by
multiplying the net asset value of the Portfolio by the percentage, effective
for that day, which represents that investor's share of the aggregate beneficial
interests in the Portfolio. Any additions or withdrawals, which are to be
effected on that day, are then effected. The investor's percentage of the
aggregate beneficial interests in the Portfolio is then recomputed as the
percentage equal to the fraction (i) the numerator of which is the value of such
investor's investment in the Portfolio as of 4:00 P.M., New York time on such
day plus or minus, as the case may be, the amount of any additions to or
withdrawals from the investor's investment in the Portfolio effected on such
day, and (ii) the denominator of which is the aggregate net asset value of the
Portfolio as of 4:00 P.M., New York time on such day plus or minus, as the case
may be, the amount of the net additions to or withdrawals from the aggregate
investments in the Portfolio by all investors in the Portfolio. The percentage
so determined is then applied to determine the value of the investor's interest
in the Portfolio as of 4:00 P.M., New York time on the following business day of
the Portfolio.

Whenever the Corporation is requested to vote on a matter pertaining to the
Portfolio, the Corporation will vote its shares without a meeting of
shareholders of the Fund if the proposal is one, if which made with respect to
the Fund, would not require the vote of shareholders of the Fund, as long as
such action is permissible under applicable statutory and regulatory
requirements. For all other matters requiring a vote, the Corporation will hold
a meeting of shareholders of the Fund and, at the meeting of investors in the
Portfolio, the Corporation will cast all of its votes in the same proportion as
the votes of the Fund's shareholders even if all Fund shareholders did not vote.
Even if the Corporation votes all its shares at the Portfolio meeting, other
investors with a greater pro rata ownership in the Portfolio could have
effective voting control of the operations of the Portfolio.

Stock certificates are not issued by the Corporation.

The Articles of Incorporation of the Corporation contain a provision
permitted under Maryland Corporation Law which under certain circumstances
eliminates the personal liability of the Corporation's Directors to the
Corporation or its shareholders.

The Articles of Incorporation and the By-Laws of the Corporation provide that
the Corporation indemnify the Directors and officers of the Corporation to the
full extent permitted by the Maryland Corporation Law, which permits
indemnification of such persons against liabilities and expenses incurred in
connection with litigation in which they may be involved because of their
offices with the Corporation. However, nothing in the Articles of Incorporation
or the By-Laws of the Corporation protects or indemnifies a Director or officer
of the Corporation against any liability to the Corporation or its shareholders
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.

Interests in the Portfolio have no preference, preemptive, conversion or
similar rights, and are fully paid and non-assessable. Neither Portfolio is
required to hold annual meetings of investors, but will hold special meetings of
investors when, in the judgment of its Trustees, it is necessary or desirable to
submit matters for an investor vote. Each investor is entitled to a vote in
proportion to the share of its investment in the Portfolio.

PORTFOLIO BROKERAGE TRANSACTIONS

The Portfolio is managed actively in pursuit of its investment objective.
Securities are not traded for short-term profits but, when circumstances
warrant, securities are sold without regard to the length of time held. A 100%
turnover would occur, for example, if all portfolio securities (excluding
short-term obligations) were replaced once in a period of one year. For the
fiscal years ended October 31, 1997 and 1998, the portfolio turnover rate of the
Portfolio was 85% and 89% respectively. The amount of brokerage commissions and
taxes on realized capital gains to be borne by the shareholders of the Fund
tends to increase as the level of portfolio activity increases.

In effecting securities transactions the Investment Adviser seeks to obtain
the best price and execution of orders. All of the transactions for the
Portfolio are executed through qualified brokers other than Brown Brothers
Harriman & Co. In selecting such brokers, the Investment Adviser considers a
number of factors including: the broker's ability to execute orders without
disturbing the market price; the broker's reliability for prompt, accurate
confirmations and on-time delivery of securities; the broker's financial
condition and responsibility; the research and other information provided by the
broker; and the commissions charged. Accordingly, the commissions charged by any
such broker may be greater than the amount another firm might charge if the
Investment Adviser determines in good faith that the amount of such commissions
is reasonable in relation to the value of the brokerage services and research
information provided by such broker.

Research services provided by brokers to which Brown Brothers Harriman & Co.
has allocated brokerage business in the past include economic statistics and
forecasting services, industry and company analyses, portfolio strategy
services, quantitative data, and consulting services from economists and
political analysts. Research services furnished by brokers are used for the
benefit of all the Investment Adviser's clients and not solely or necessarily
for the benefit of the Portfolio. The Investment Adviser believes that the value
of research services received is not determinable nor does such research
significantly reduce its expenses. The Portfolio does not reduce the fee paid to
the Investment Adviser by any amount that might be attributable to the value of
such services.

Portfolio securities are not purchased from or sold to the Administrator,
Distributor or Investment Adviser or any "affiliated person" (as defined in the
1940 Act) of the Administrator, Distributor or Investment Adviser when such
entities are acting as principals, except to the extent permitted by law.

A committee, comprised of officers and partners of Brown Brothers Harriman &
Co. who are portfolio managers of some of Brown Brothers Harriman & Co.'s
managed accounts (the "Managed Accounts"), evaluates semi-annually the nature
and quality of the brokerage and research services provided by brokers, and,
based on this evaluation, establishes a list and projected ranking of preferred
brokers for use in determining the relative amounts of commissions to be
allocated to such brokers. However, in any semi-annual period, brokers not on
the list may be used, and the relative amounts of brokerage commissions paid to
the brokers on the list may vary substantially from the projected rankings.

The Trustees of the Portfolio review regularly the reasonableness of
commissions and other transaction costs incurred for the Portfolio in light of
facts and circumstances deemed relevant from time to time and, in that
connection, receive reports from the Investment Adviser and published data
concerning transaction costs incurred by institutional investors generally.

Over-the-counter purchases and sales are transacted directly with principal
market makers, except in those circumstances in which, in the judgment of the
Investment Adviser, better prices and execution of orders can otherwise be
obtained. If the Portfolio effects a closing transaction with respect to a
futures or option contract, such transaction normally would be executed by the
same broker-dealer who executed the opening transaction. The writing of options
by the Portfolio may be subject to limitations established by each of the
exchanges governing the maximum number of options in each class which may be
written by a single investor or group of investors acting in concert, regardless
of whether the options are written on the same or different exchanges or are
held or written in one or more accounts or through one or more brokers. The
number of options which the Portfolio may write may be affected by options
written by the Investment Adviser for other investment advisory clients. An
exchange may order the liquidation of positions found to be in excess of these
limits, and it may impose certain other sanctions.

The Investment Adviser may direct a portion of the Portfolio's securities
transactions to certain unaffiliated brokers which in turn use a portion of the
commissions they receive from the Portfolio to pay other unaffiliated service
providers on behalf of the Portfolio for services provided for which the
Portfolio would otherwise be obligated to pay. Such commissions paid by the
Portfolio are at the same rate paid to other brokers for effecting similar
transactions in listed equity securities.

On those occasions when Brown Brothers Harriman & Co. deems the purchase or
sale of a security to be in the best interests of the Portfolio as well as other
customers, Brown Brothers Harriman & Co., to the extent permitted by applicable
laws and regulations, may, but is not obligated to, aggregate the securities to
be sold or purchased for the Portfolio with those to be sold or purchased for
other customers in order to obtain best execution, including lower brokerage
commissions, if appropriate. In such event, allocation of the securities so
purchased or sold as well as any expenses incurred in the transaction are made
by Brown Brothers Harriman & Co. in the manner it considers to be most equitable
and consistent with its fiduciary obligations to its customers, including the
Portfolio. In some instances, this procedure might adversely affect the
Portfolio.

ADDITIONAL INFORMATION

As used in this Statement of Additional Information and the Prospectus, the
term "majority of the outstanding voting securities" (as defined in the 1940
Act) currently means the vote of (i) 67% or more of the outstanding voting
securities present at a meeting, if the holders of more than 50% of the
outstanding voting securities are present in person or represented by proxy; or
(ii) more than 50% of the outstanding voting securities, whichever is less.

Fund shareholders receive semi-annual reports containing unaudited financial
statements and annual reports containing financial statements audited by
independent auditors.

Other mutual funds or institutional investors may invest in the Portfolio on
the same terms and conditions as the Fund. However, these other investors may
have different sales commissions and other operating expenses which may generate
different aggregate performance results. Information concerning other investors
in the Portfolio is available from Brown Brothers Harriman & Co.

The Corporation may withdraw the Fund's investment in the Portfolio as a
result of certain changes in the Portfolio's investment objective, policies or
restrictions or if the Board of Directors of the Corporation determines that it
is otherwise in the best interests of the Fund to do so. Upon any such
withdrawal, the Board of Directors of the Corporation would consider what action
might be taken, including the investment of all of the assets of the Fund in
another pooled investment entity or the retaining of an investment adviser to
manage the Fund's assets in accordance with the Fund's investment policies. In
the event the Directors of the Corporation were unable to accomplish either, the
Directors will determine the best course of action.

With respect to the securities offered by the Prospectus, this Statement of
Additional Information and the Prospectus do not contain all the information
included in the Registration Statement filed with the Securities and Exchange
Commission under the Securities Act of 1933. Pursuant to the rules and
regulations of the Securities and Exchange Commission, certain portions have
been omitted. The Registration Statement including the exhibits filed therewith
may be examined at the office of the Securities and Exchange Commission in
Washington, D.C.

Statements contained in this Statement of Additional Information and the
Prospectus concerning the contents of any contract or other document are not
necessarily complete, and in each instance, reference is made to the copy of
such contract or other document filed as an exhibit to the Registration
Statement. Each such statement is qualified in all respects by such reference.

FINANCIAL STATEMENTS

The Annual Report of the Fund dated October 31, 1998 has been filed with the
Securities and Exchange Commission pursuant to Section 30(b) of the 1940 Act and
Rule 30b2-1 thereunder and is hereby incorporated herein by reference. A copy of
the Annual Report which also contains performance information of the Fund will
be provided without charge to each person receiving this Statement of Additional
Information.

WS5486F
<PAGE>
- -------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
THE 59 WALL STREET EUROPEAN EQUITY FUND
THE 59 WALL STREET PACIFIC BASIN EQUITY FUND
21 Milk Street, Boston, Massachusetts 02109
- -------------------------------------------------------------------

The 59 Wall Street European Equity Fund (the "European Equity Fund")
and The 59 Wall Street Pacific Basin Equity Fund (the "Pacific Basin Equity
Fund") (each a "Fund" and collectively the "Funds") are separate portfolios of
The 59 Wall Street Fund, Inc. (the "Corporation"), a management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"). Each Fund is designed to enable investors to participate in the
opportunities available in foreign equity markets. The investment objective of
each Fund is to provide investors with long-term maximization of total return,
primarily through capital appreciation. There can be no assurance that a Fund's
investment objective will be achieved.

Brown Brothers Harriman & Co. is each Fund's investment adviser (the
"Investment Adviser"). This Statement of Additional Information is not a
prospectus and should be read in conjunction with the Prospectus dated March 1,
1999, a copy of which may be obtained from the Corporation at the address noted
above.
<TABLE>
<CAPTION>

Table of Contents
<S> <C> <C>

Cross-Reference
Page to Page in Prospectus

Investments
Investment Objective and Policies . . . . . 3 3-5
Investment Restrictions . . . . . . . . 9
Management
Directors and Officers . . . . . . . . . 12
Investment Adviser . . . . . . . . . . 17 10
Administrator . . . . . . . . . . . . 18
Distributor . . . . . . . . . . . . 20
Shareholder Servicing Agent,
Financial Intermediaries and Eligible Institutions 20-22
Custodian, Transfer and Dividend Disbursing Agent 22
Independent Auditors 22
Net Asset Value; Redemption in Kind . . . . 22 10
Computation of Performance . . . . . . . 24
Purchases and Redemptions 25

</TABLE>

<PAGE>

Table of Contents

Page

Federal Taxes . . . . . . . . . . . . 26
Description of Shares . . . . . . . . . 29
Portfolio Brokerage Transactions . . . . . . 31
Financial Statements . . . . . . . . . 34
Appendix 34

The date of this Statement of Additional Information is
March 1, 1999.

<PAGE>

INVESTMENT OBJECTIVE AND POLICIES
- -----------------------------------------------------------------

The following supplements the information contained in the Prospectus
concerning the investment objective, policies and techniques of each Fund. In
response to adverse market, economic, political or other conditions, the
Investment Adviser may make temporary investments for the Funds that are not
consistent with its investment objective and principal investment strategies.
Such investments may prevent the Funds from achieving their investment
objective.

Equity Investments

Domestic Investments

The assets of the Funds are not invested in domestic securities (other than
short-term instruments), except temporarily when extraordinary circumstances
prevailing at the same time in a significant number of foreign countries render
investments in such countries inadvisable.

Options Contracts

Options on Stock. Subject to applicable laws and regulations and solely as a
hedge against changes in the market value of portfolio securities or securities
intended to be purchased, put and call options on stocks may be purchased for a
Fund, although in each case the current intention is not to do so in such a
manner that more than 5% of a Fund's net assets would be at risk. A call option
on a stock gives the purchaser of the option the right to buy the underlying
stock at a fixed price at any time during the option period. Similarly, a put
option gives the purchaser of the option the right to sell the underlying stock
at a fixed price at any time during the option period. To liquidate a put or
call option position, a "closing sale transaction" may be made for a Fund at any
time prior to the expiration of the option which involves selling the option
previously purchased.

Covered call options may also be sold (written) on stocks for a Fund, although
in each case the current intention is not to do so. A call option is "covered"
if the writer owns the underlying security.

Options on Stock Indexes. Subject to applicable laws and regulations and solely
as a hedge against changes in the market value of portfolio securities or
securities intended to be purchased, put and call options on stock indexes may
be purchased for a Fund, although the current intention is not to do so in a
manner that more than 5% of a Fund=s net assets would be at risk. A stock index
fluctuates with changes in the market values of the stocks included in the
index. Examples of stock indexes are the Standard & Poor's 500 Stock Index
(Chicago Board of Options Exchange), the New York Stock Exchange Composite Index
(New York Stock Exchange), The Financial Times-Stock Exchange 100 (London Traded
Options Market), the Nikkei 225 Stock Average (Osaka Securities Exchange) and
Tokyo Stock Price Index (Tokyo Stock Exchange).

Options on stock indexes are generally similar to options on stock except that
the delivery requirements are different. Instead of giving the right to take or
make delivery of stock at a fixed price ("strike price"), an option on a stock
index gives the holder the right to receive a cash "exercise settlement amount"
equal to (a) the amount, if any, by which the strike price of the option exceeds
(in the case of a put) or is less than (in the case of a call) the closing value
of the underlying index on the date of exercise, multiplied by (b) a fixed
"index multiplier". Receipt of this cash amount depends upon the closing level
of the stock index upon which the option is based being greater than, in the
case of a call, or less than, in the case of a put, the price of the option. The
amount of cash received is equal to such difference between the closing price of
the index and the strike price of the option expressed in U.S. dollars or a
foreign currency, as the case may be, times a specified multiple. The
effectiveness of purchasing stock index options as a hedging technique depends
upon the extent to which price movements in the portion of the securities
portfolio of a Fund being hedged correlate with price movements of the stock
index selected. The value of an index option depends upon future movements in
the level of the overall stock market measured by the underlying index before
the expiration of the option. Accordingly, the successful use of options on
stock indexes for a Fund is subject to the Investment Adviser's ability both to
select an appropriate index and to predict future price movements over the short
term in the overall stock market. Brokerage costs are incurred in the purchase
of stock index options and the incorrect choice of an index or an incorrect
assessment of future price movements may result in poorer overall performance
than if a stock index option had not been purchased.

Options on Currencies. Subject toapplicable laws and regulations and solely as
a hedge against changes in the market value of portfolio securities or
securities intended to be purchased, put and call options on currencies may be
purchased for a Fund, although the current intention is not to do so in a manner
that more than 5% of a Fund=s net assets would be at risk. A call option on a
currency gives the purchaser of the option the right to buy the underlying
currency at a fixed price, either at any time during the option period (American
style) or on the expiration date (European style). Similarly, a put option gives
the purchaser of the option the right to sell the underlying currency at a fixed
price, either at any time during the option period or on the expiration date. To
liquidate a put or call option position, a "closing sale transaction" may be
made for a Fund at any time prior to the expiration of the option, such a
transaction involves selling the option previously purchased. Options on
currencies are traded both on recognized exchanges (such as the Philadelphia
Options Exchange) and over-the counter.

The value of a currency option purchased for a Fund depends upon future
changes in the value of that currency before the expiration of the option.
Accordingly, the successful use of options on currencies for a Fund is subject
to the Investments Adviser's ability to predict future changes in the value of
currencies over the short term. Brokerage costs are incurred in the purchase of
currency options and an incorrect assessment of future changes in the value of
currencies may result in a poorer overall performance than if such a currency
had not been purchased.

Futures Contracts

Futures Contracts on Stock Indexes. Subject to applicable laws and
regulations and solely as a hedge against changes in the market value of
portfolio securities or securities intended to be purchased, futures contracts
on stock indexes ("Futures Contracts") may be entered into for a Fund. Futures
contracts on foreign currencies may also be entered into for each Fund, although
in each case the current intention is not to do so.

In order to assure that a Fund is not deemed a "commodity pool" for
purposes of the Commodity Exchange Act, regulations of the Commodity Futures
Trading Commission ("CFTC") require that each Fund enter into transactions in
futures contracts and options on futures contracts only (i) for bona fide
hedging purposes (as defined in CFTC regulations), or (ii) for non-hedging
purposes, provided that the aggregate initial margin and premiums on such
non-hedging positions does not exceed 5% of the liquidation value of a Fund's
assets.

Futures Contracts provided for the making and acceptance of a cash
settlement based upon changes in the value of an index of stocks and are used to
hedge against anticipated future changes in overall stock market prices which
otherwise might either adversely affect the value of securities held for a Fund
or adversely affect the prices of securities which are intended to be purchased
at a later date for a Fund. A Futures Contract may also be entered into to close
out or offset an existing futures position.

In general, each transaction in Futures Contracts involves the
establishment of a position which is expected to move in a direction opposite to
that of the investment being hedged. If these hedging transactions are
successful, the futures position taken for a Fund would rise in value by an
amount which approximately offsets the decline in value of the portion of that
Fund's investments that is being hedged. Should general market prices move in an
unexpected manner, the full anticipated benefits of Futures Contracts may not be
achieved or a loss may be realized. There is also the risk of a potential lack
of liquidity in the secondary market.

The effectiveness of entering into Futures Contracts as a hedging
technique depends upon the extent to which price movements in the portion of the
securities portfolio of a Fund being hedged correlate with price movements of
the stock index selected. The value of a Futures Contract depends upon future
movements in the level of the overall stock market measured by the underlying
index before the closing out of the Futures Contract. Accordingly, the
successful use of Futures Contracts for a Fund is subject to the Investment
Adviser's ability both to select an appropriate index and to predict future
price movements over the short term in the overall stock market. The incorrect
choice of an index or an incorrect assessment of future price movements over the
shore term in the overall stock market may result in poorer overall performance
than if a Futures Contract had not been purchased.
Brokerage costs are incurred in entering into and maintaining Futures Contracts.

When a Fund enters into a Futures Contract, it may be initially required
to deposit with that Fund's custodian, in a segregated account in the name of
the broker performing the transaction, an "initial margin" of cash, U.S.
Government securities or other high grade short-term obligations equal to
approximately 3% of the contract amount. Initially margin requirements are
established by the exchanges on which Futures Contracts trade and may, from time
to time, change. In addition, brokers may establish margin deposit requirements
in excess of those required by the exchanges. Initial margin in futures
transactions is different from margin in securities transactions in that initial
margin does not involve the borrowing of funds by a broker's client but is,
rather, a good faith deposit on the Futures Contract which will be returned upon
the proper termination of the Futures Contract. The margin deposits made are
marked to market daily and a Fund may be required to make subsequent deposits of
cash or eligible securities called "variation margin", with that Fund's futures
contract clearing broker, which are reflective of price fluctuations in the
Futures Contract.

Currently, investments in Futures Contracts on non-U.S. stock indexes by
U.S. investors, such as the Funds, can be purchased on such non-U.S. stock
indexes as the Osaka Stock Exchange (OSE), Tokyo Stock Exchange (TSE), Hong Kong
Futures Exchange (HKFE), Singapore International Monetary Exchange (SIMEX),
London International Financial Futures and Options Exchange (LIFFE), Marche a
Terme International de France (MATIF), Sydney Futures Exchange Ltd. (SFE), Meff
Sociedad Rectora de Productos Financieros Derivados de Renta Variable, S.A.
(MEFF RENTA VARIABLE), Deutsche Terminbsrse (DTB), Italian Stock Exchange (ISE),
The Amsterdam Exchange (AE), and London Securities and Derivatives Exchange,
Ltd. (OMLX).

Exchanges may limit the amount by which the price of a Futures Contract
may move on any day. If the price moves equal the daily limit on successive
days, then it may prove impossible to liquidate a futures position until the
daily limit moves have ceased.

Another risk which may arise in employing Futures Contracts to protect
against the price volatility of portfolio securities is that the prices of an
index subject to Futures Contracts (and thereby the Futures Contract prices) may
correlate imperfectly with the behavior of the cash prices of a Fund's portfolio
securities. Another such risk is that the price of the Futures Contract may not
move in tandem with the change in overall stock market prices against which that
Fund seeks a hedge.

Loans of Portfolio Securities

Loans up to 30% of the total value of the securities of a Fund are
permitted. Securities of a Fund may be loaned if such loans are secured
continuously by cash or equivalent liquid short term securities as collateral or
by an irrevocable letter of credit in favor of a Fund at least equal at all
times to 100% of the market value of the securities loaned plus accrued income.
By lending the securites of a Fund, that Fund=s income can be increased by that
Fund=s continuing to receive income on the loaned securities as well as by the
opportunity for that Fund to receive income on the collateral. All or any
portion of interest earned on invested collateral may be paid to the borrower.
Loans are subject to termination by the Corporation in the normal settlement
time, currently three business days after notice, or by the borrower on one
day's notice. Borrowed securities are returned when the loan is terminated. Any
appreciation or depreciation in the market price of the borrowed securities
which occurs during the term of the loan inures to the Fund and its
shareholders. Reasonable finders' and custodial fees may be paid in connection
with a loan. In addition, all facts and circumstances, including the
creditworthiness of the borrowing financial institution, are considered before a
loan is made and no loan is made in excess of one year. There is the risk that a
borrowed security may not be returned to a Fund. Securities of a Fund are not
loaned to Brown Brothers Harriman & Co. or to any affiliate of the Corporation
or Brown Brothers Harriman & Co.

Short-Term Investments

Although it is intended that the assets of each Fund stay invested in
the securities described above and in the Prospectus to the extent practical in
light of that Fund's investment objective and long-term investment perspective,
a Fund's assets may be invested in short-term instruments to meet anticipated
expenses or for day-to-day operating purposes and when, in the Investment
Adviser's opinion, it is advisable to adopt a temporary defensive position
because of unusual and adverse conditions affecting the equity markets. In
addition, when a Fund experiences large cash inflows through issuance of new
shares or the sale of portfolio securities, and desirable equity securities that
are consistent with that Fund's investment objective are unavailable in
sufficient quantities, assets of that Fund may be held in short-term investments
for a limited time pending availability of such equity securities. Short-term
instruments consist of foreign and domestic: (i) short-term obligations of
sovereign governments, their agencies, instrumentalities, authorities or
political subdivisions; (ii) other short-term debt securities rated A or higher
by Moody's Investors Service, Inc. ("Moody's") or Standard & Poor's Corporation
("Standard & Poor's"), or if unrated are of comparable quality in the opinion of
the Investment Adviser; (iii) commercial paper; (iv) bank obligations, including
negotiable certificates of deposit, time deposits and bankers' acceptances; and
(v) repurchase agreements. Time deposits with a maturity of more than seven days
are treated as not readily marketable. At the time a Fund's assets are invested
in commercial paper, bank obligations or repurchase agreements, the issuer must
have outstanding debt rated A or higher by Moody's or Standard & Poor's; the
issuer's parent corporation, if any, must have outstanding commercial paper
rated Prime-1 by Moody's or A-1 by Standard & Poor's; or, if no such ratings are
available, the instrument must be of comparable quality in the opinion of the
Investment Adviser. The assets may be invested in non-U.S. dollar denominated
and U.S. dollar denominated bank deposits and short-term instruments, including
U.S. dollar denominated repurchase agreements. Cash is held for each Fund in
demand deposit accounts with the Funds= custodian bank.

Government Securities

The assets of each Fund may be invested in securities issued by the
U.S. Government or sovereign foreign governments, their agencies or
instrumentalities. These securities include notes and bonds, zero coupon bonds
and stripped principal and interest securities.

Restricted Securities

Securities that have legal or contractual restrictions on their resale
may be acquired for a Fund. The price paid for these securities, or received
upon resale, may be lower than the price paid or received for similar securities
with a more liquid market. Accordingly, the valuation of these securities for a
Fund reflects any limitation on their liquidity.

Repurchase Agreements

Repurchase agreements may be entered into for a Fund only with a
"primary dealer" (as designated by the Federal Reserve Bank of New York) in U.S.
Government securities. This is an agreement in which the seller (the "Lender")
of a security agrees to repurchase from a Fund the security sold at a mutually
agreed upon time and price. As such, it is viewed as the lending of money to the
Lender. The resale price normally is in excess of the purchase price, reflecting
an agreed upon interest rate. The rate is effective for the period of time
assets of a Fund are invested in the agreement and is not related to the coupon
rate on the underlying security. The period of these repurchase agreements is
usually short, from overnight to one week. The securities which are subject to
repurchase agreements, however, may have maturity dates in excess of one week
from the effective date of the repurchase agreement. A Fund always receives as
collateral securities which are issued or guaranteed by the U.S. Government, its
agencies or instrumentalities. Collateral is marked to the market daily and has
a market value, including accrued interest, at least equal to 100% of the dollar
amount invested on behalf of that Fund in each agreement along with accrued
interest. Payment for such securities is made for that Fund only upon physical
delivery or evidence of book entry transfer to the account of State Street Bank
and Trust Company (the "Custodian"). If the Lender defaults, a Fund might incur
a loss if the value of the collateral securing the repurchase agreement declines
and might incur disposition costs in connection with liquidating the collateral.
In addition, if bankruptcy proceedings are commenced with respect to the Lender,
realization upon the collateral on behalf of a Fund may be delayed or limited in
certain circumstances.

When-Issued and Delayed Delivery Securities

Securities may be purchased for a Fund on a when-issued or delayed
delivery basis. For example, delivery and payment may take place a month or more
after the date of the transaction. The purchase price and the interest rate
payable on the securities, if any, are fixed on the transaction date. The
securities so purchased are subject to market fluctuation and no income accrues
to a Fund until delivery and payment take place. At the time the commitment to
purchase securities for a Fund on a when-issued or delayed delivery basis is
made, the transaction is recorded and thereafter the value of such securities is
reflected each day in determining that Fund's net asset value. At the time of
its acquisition, a when-issued or delayed delivery security may be valued at
less than the purchase price. Commitments for such when-issued or delayed
delivery securities are made only when there is an intention of actually
acquiring the securities. On delivery dates for such transactions, such
obligations are met from maturities or sales of securities and/or from cash
flow. If the right to acquire a when-issued or delayed delivery security is
disposed of prior to its acquisition, a Fund could, as with the disposition of
any other portfolio obligation, incur a gain or loss due to market fluctuation.
When-issued or delayed delivery commitments for a Fund may not be entered into
if such commitments exceed in the aggregate 15% of the market value of that
Fund's total assets, less liabilities other than the obligations created by
when-issued or delayed delivery commitments.

Investment Company Securities

Subject to applicable statutory and regulatory limitations, the assets
of each Fund may be invested in shares of other investment companies. Under the
1940 Act, assets of either Fund may be invested in shares of other investment
companies in connection with a merger, consolidation, acquisition or
reorganization or if immediately after such investment (i) 10% or less of the
market value of that Fund's total assets would be so invested, (ii) 5% or less
of the market value of that Fund's total assets would be invested in the shares
of any one such company, and (iii) 3% or less of the total outstanding voting
stock of any other investment company would be owned by that Fund. As a
shareholder of another investment company, the Fund would bear, along with other
shareholders, its pro rata portion of the other investment company's expenses,
including advisory fees. These expenses would be in addition to the advisory and
other expenses that the Fund bears directly in connection with its own
operations.

INVESTMENT RESTRICTIONS
- -------------------------------------------------------------------

Each Fund is operated under the following investment restrictions which
are deemed fundamental policies and may be changed only with the approval of the
holders of a "majority of that Fund's outstanding voting securities" (as defined
in the 1940 Act). (See "Additional Information".)

Except that the Corporation may invest all of each Fund's assets in an
open-end investment company with substantially the same investment objective,
policies and restrictions as the Fund, the Corporation, with respect to the
Funds, may not:

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

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

(3) write, purchase or sell any put or call option or any combination thereof,
provided that this shall not prevent (i) the purchase, ownership, holding or
sale of warrants where the grantor of the warrants is the issuer of the
underlying securities, or (ii) the purchase, ownership, holding or sale of
futures and options, other than the writing of put options;

(4) underwrite securities issued by other persons except insofar as it may
technically be deemed an underwriter under the Securities Act of 1933, as
amended, in selling a portfolio security;

(5) make loans to other persons except (a) through the lending of its portfolio
securities and provided that any such loans not exceed 30% of its net assets
(taken at market value), (b) through the use of repurchase agreements or the
purchase of short-term obligations and provided that not more than 10% of its
net assets is invested in repurchase agreements maturing in more than seven
days, or (c) by purchasing, subject to the limitation in paragraph (6) below, a
portion of an issue of debt securities of types commonly distributed privately
to financial institutions, for which purposes the purchase of short-term
commercial paper or a portion of an issue of debt securities which are part of
an issue to the public shall not be considered the making of a loan;

(8) make short sales of securities or maintain a short position, unless at all
times when a short position is open it owns an equal amount of such securities
or securities convertible into or exchangeable, without payment of any further
consideration, for securities of the same issue as, and equal in amount to, the
securities sold short, and unless not more than 10% of its net assets (taken at
market value) is represented by such securities, or securities convertible into
or exchangeable for such securities, at any one time (it is the present
intention of management to make such sales only for the purpose of deferring
realization of gain or loss for federal income tax purposes; such sales would
not be made of securities subject to outstanding options);

(9) concentrate its investments in any particular industry, but if it is deemed
appropriate for the achievement of its investment objective, up to 25% of its
assets, at market value at the time of each investment, may be invested in any
one industry, except that positions in futures or option contracts shall not be
subject to this restriction;

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

(11) invest more than 5% of its total assets in the securities or obligations of
any one issuer (other than U.S. Government obligations) or more than 10% of its
total assets in the outstanding voting securities of any one issuer; provided,
however, that up to 25% of its total assets may be invested without regard to
this restriction, and provided further, that neither Fund shall be subject to
this restriction.

Non-Fundamental Restrictions. The Corporation, on behalf of each Fund,
may not as a matter of operating policy (except that the Corporation may invest
all of each Fund's assets in an open-end investment company with substantially
the same investment objective, policies and restrictions as the Fund): (i)
purchase securities of any investment company if such purchase at the time
thereof would cause more than 10% of its total assets (taken at the greater of
cost or market value) to be invested in the securities of such issuers or would
cause more than 3% of the outstanding voting securities of any such issuer to be
held for it; (ii) invest more than 10% of its net assets (taken at the greater
of cost or market value) in restricted securities; or (iii) invest less than 65%
of the value of the total assets of each Fund in equity securities of companies
based in countries in which that Fund may invest. For these purposes, equity
securities are defined as common stock, securities convertible into common
stock, rights and warrants, and include securities purchased directly and in the
form of American Depository Receipts, Global Depository Receipts or other
similar securities representing common stock of foreign-based companies. These
policies are not fundamental and may be changed for a Fund without shareholder
approval.

DIRECTORS AND OFFICERS

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

The Directors, in addition to supervising the actions of the
Administrator, Investment Adviser and Distributor of each Fund, as set forth
below, decide upon matters of general policy. Because of the services rendered
to the Corporation by the Investment Adviser and the Administrator, the
Corporation itself requires no employees other than its officers, none of whom,
other than the Chairman, receive compensation from the Funds and all of whom,
other than the Chairman, are employed by 59 Wall Street Administrators.

The Directors and executive officers of the Corporation, their
principal occupations during the past five years (although their titles may have
varied during the period) and business addresses are:

DIRECTORS OF THE CORPORATION

J.V. SHIELDS, JR.* -- Chairman of the Board and Director; Trustee of
The 59 Wall Street Trust; Managing Director, Chairman and Chief Executive
Officer of Shields & Company; Chairman and Chief Executive Officer of Capital
Management Associates, Inc.; Director of Flowers Industries, Inc.(1) His
business address is Shields & Company, 140 Broadway, New York, NY 10005.

EUGENE P. BEARD** -- Director; Trustee of The 59 Wall Street Trust;
Vice Chairman - Finance and Operations of The Interpublic Group of Companies.
His business address is The Interpublic Group of Companies, Inc., 1271 Avenue of
the Americas, New York, NY 10020.

DAVID P. FELDMAN** -- Director; Trustee of The 59 Wall Street Trust;
Retired; Chairman and Chief Executive Officer - AT&T Investment Management
Corporation (prior to October 1997); Director of Dreyfus Mutual Funds, Equity
Fund of Latin America, New World Balanced Fund, India Magnum Fund, and U.S.
Prime Properties Inc.; Trustee of Corporate Property Investors. His business
address is 3 Tall Oaks Drive, Warren, NJ 07059.

ALAN G. LOWY** -- Director; Trustee of The 59 Wall Street Trust;
President of Lowy Industries (since August 1998); Secretary of the Los Angeles
County Board of Investments (prior to March 1995). His business address is 4111
Clear Valley Drive, Encino, CA 91436.

ARTHUR D. MILTENBERGER** -- Director; Trustee of The 59 Wall Street
Trust; Vice President and Chief Financial Officer of Richard K. Mellon and Sons;
Treasurer of Richard King Mellon Foundation; Director of Vought Aircraft
Corporation (prior to September 1994), Caterair International (prior to April
1994); Member of Advisory Committee of Carlyle Group and Pittsburgh Seed Fund
and Valuation Committee of Morgenthaler Venture Funds(2). His business address
is Richard K. Mellon and Sons, P.O. Box RKM, Ligonier, PA 15658.

OFFICERS OF THE CORPORATION

PHILIP W. COOLIDGE -- President; Chief Executive Officer and President
of Signature Financial Group, Inc. ("SFG"), 59 Wall Street Distributors, Inc.
("59 Wall Street Distributors") and 59 Wall Street Administrators, Inc. ("59
Wall Street Administrators").

JAMES E. HOOLAHAN -- Vice President; Senior Vice President of SFG.

JOHN R. ELDER -- Treasurer; Vice President of SFG (since April 1995);
Treasurer of Phoenix Family of Mutual Funds (prior to April 1995).

LINDA T. GIBSON -- Secretary; Senior Vice President and Secretary of
SFG; Secretary of 59 Wall Street Distributors and 59 Wall Street Administrators.

MOLLY S. MUGLER -- Assistant Secretary; Legal Counsel and Assistant
Secretary of SFG; Assistant Secretary of 59 Wall Street Distributors and 59 Wall
Street Administrators.

CHRISTINE A. DRAPEAU - Assistant Secretary; Vice President of SFG
(since January 1996); Paralegal and Compliance Officer, various financial
companies (July 1992 to January 1996); Graduate Student, Bentley College (prior
to December 1994).

* Mr. Shields is an "interested person" of the Corporation because of
his affiliation with a registered broker-dealer.

** These Directors are members of the Audit Committee of the Corporation

(1)Shields & Company, Capital Management Associates, Inc. and Flowers
Industries, Inc, with which Mr. Shields is associated, are a registered
broker-dealer and a member of the New York Stock Exchange, a registered
investment adviser, and a diversified food company, respectively.

(2)Richard K. Mellon and Sons, Richard King Mellon Foundation, Vought
Aircraft Corporation, Caterair International, The Carlyle Group and Morgenthaler
Venture Funds, with which Mr. Miltenberger is or has been associated, are a
private foundation, a private foundation, a business development firm, an
aircraft manufacturer, an airline food services company, a merchant bank, and a
venture capital partnership, respectively.

<PAGE>

Each Director and officer listed above holds the equivalent position
with The 59 Wall Street Trust. The address of each officer is 21 Milk Street,
Boston, Massachusetts 02109. Messrs. Coolidge, Hoolahan and Elder and Mss.
Gibson, Mugler and Drapeau also hold similar positions with other investment
companies for which affiliates of 59 Wall Street Distributors serve as the
principal underwriter.

Except for Mr. Shields, no Director is an "interested person" of the
Corporation as that term is defined in the 1940 Act.

Directors of the Corporation

<PAGE>

<TABLE>

J.V. Shields, Jr., $12,450 none none $31,000
Director

Eugene P. Beard, $11,337 none none 26,000
Director

David P. Feldman, $11,337 none none 26,000
Director

Alan G. Lowy, $11,337 none none 26,000
Director

Arthur D. Miltenberger, $11,337 none none 26,000
Director

<FN>

* The Fund Complex consists of the Corporation and The 59 Wall Street Trust which currently consists of four
series.
</FN>
</TABLE>

By virtue of the responsibilities assumed by Brown Brothers Harriman &
Co. under the Investment Advisory Agreement and the Administration Agreement
(see "Investment Adviser" and "Administrator"), the Corporation itself requires
no employees other than its officers, and none of its officers devote full time
to the affairs of the Corporation or, other than the Chairman, receive any
compensation from a Fund.

As of January 31, 1999, the Corporation's Directors and officers as a
group beneficially owned less than 1% of the outstanding shares of the
Corporation. At the close of business on that date, no person, to the knowledge
of the management, owned beneficially more than 5% of the outstanding shares of
a Fund except that Moose International owned 102,734 (6.28%) shares of the
Pacific Basin Equity Fund. However, as of that date, partners of Brown Brothers
Harriman & Co. and their immediate families owned 85,872 (2.2%) and 42,855
(2.3%)shares, respectively, of the European Equity Fund and the Pacific Basin
Equity Fund. Also, Brown Brothers Harriman & Co. Employee Pension Plan on that
date held 30,297 (0.8%) shares of the European Equity Fund. Brown Brothers
Harriman & Co. and its affiliates separately are able to direct the disposition
of an additional 2,199,279 (55.3%) and 1,032,064 (54.2%) shares, respectively,
of the European Equity Fund and the Pacific Basin Equity Fund, as to which
shares Brown Brothers Harriman & Co. disclaims beneficial ownership.

INVESTMENT ADVISER

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

Under its Investment Advisory Agreement with the Corporation, subject
to the general supervision of the Corporation's Directors and in conformance
with the stated policies of each Fund, Brown Brothers Harriman & Co. provides
investment advice and portfolio management services to each Fund. In this
regard, it is the responsibility of Brown Brothers Harriman & Co. to make the
day-to-day investment decisions for each Fund, to place the purchase and sale
orders for the portfolio transactions of each Fund and to manage, generally,
each Fund's investments.

The Investment Advisory Agreement between Brown Brothers Harriman & Co.
and the Corporation is dated September 5, 1990 as amended and restated November
1, 1993. The agreement remains in effect for two years from its date and
thereafter, but only so long as such agreement is specifically approved with
respect to each Fund at least annually (i) by a vote of the holders of a
"majority of that Fund's outstanding voting securities" (as defined in the 1940
Act) or by the Corporation's Directors, and (ii) by a vote of a majority of the
Directors of the Corporation who are not parties to that Investment Advisory
Agreement or "interested persons" (as defined in the 1940 Act) of the
Corporation ("Independent Directors"), cast in person at a meeting called for
the purpose of voting on such approval. The Investment Advisory Agreement was
most recently approved by the Independent Directors on November 10, 1998. The
Investment Advisory Agreement terminates automatically if assigned and is
terminable with respect to each Fund at any time without penalty by a vote of a
majority of the Directors of the Corporation or by a vote of the holders of a
"majority of that Fund's outstanding voting securities" (as defined in the 1940
Act) on 60 days' written notice to Brown Brothers Harriman & Co. and by Brown
Brothers Harriman & Co. on 90 days' written notice to the Corporation. (See
"Additional Information".)

With respect to the European Equity Fund, the investment advisory fee
paid to the Investment Adviser is calculated daily and paid monthly at an annual
rate equal to 0.65% of that Fund's average daily net assets. For the fiscal
years ended October 31, 1996, 1997 and 1998, the Fund incurred $847,451,
$1,012,388 and $1,045,922, respectively, for advisory services.

With respect to the Pacific Basin Equity Fund, the investment advisory
fee paid to the Investment Adviser is calculated daily and paid monthly at an
annual rate equal to 0.65% of that Fund's average daily net assets. For the
fiscal years ended October 31, 1996, 1997 and 1998, the Fund incurred $924,243,
$931,879 and $281,852, respectively, for advisory services.

The investment advisory services of Brown Brothers Harriman & Co. to
each Fund are not exclusive under the terms of the Investment Advisory
Agreements. Brown Brothers Harriman & Co. is free to and does render investment
advisory services to others, including other registered investment companies.

Pursuant to a license agreement between the Corporation and Brown
Brothers Harriman & Co. dated September 5, 1990, as amended as of December 15,
1993, the Corporation may continue to use in its name "59 Wall Street", the
current and historic address of Brown Brothers Harriman & Co. The agreement may
be terminated by Brown Brothers Harriman & Co. at any time upon written notice
to the Corporation upon the expiration or earlier termination of any investment
advisory agreement between the Corporation or any investment company in which a
series of the Corporation invests all of its assets and Brown Brothers Harriman
& Co. Termination of the agreement would require the Corporation to change its
name and the name of each Fund to eliminate all reference to "59 Wall Street".
Pursuant to license agreements between Brown Brothers Harriman & Co. and each of
59 Wall Street Administrators and 59 Wall Street Distributors (each a
"Licensee"), dated June 22, 1993 and June 8, 1990, respectively, each Licensee
may continue to use in its name "59 Wall Street", the current and historic
address of Brown Brothers Harriman & Co., only if Brown Brothers Harriman & Co.
does not terminate the respective license agreement, which would require the
Licensee to change its name to eliminate all reference to "59 Wall Street".

The Glass-Steagall Act prohibits certain financial institutions from
engaging in the business of underwriting, selling or distributing securities and
from sponsoring, organizing or controlling a registered open-end investment
company continuously engaged in the issuance of its shares, such as the Funds.
There is presently no controlling precedent prohibiting financial institutions
such as Brown Brothers Harriman & Co. from performing investment advisory,
administrative or shareholder servicing/eligible institution functions. If Brown
Brothers Harriman & Co. were to terminate its Investment Advisory Agreement with
the Corporation or were prohibited from acting in such capacity, it is expected
that the Directors would recommend to the shareholders that they approve a new
investment advisory agreement for each Fund with another qualified adviser. If
Brown Brothers Harriman & Co. were to terminate its Eligible Institution
Agreement or Administration Agreement with the Corporation or were prohibited
from acting in any such capacity, its customers would be permitted to remain
shareholders of the Corporation and alternative means for providing shareholder
services or administrative services, as the case may be, would be sought. In
such event, although the operation of the Corporation might change, it is not
expected that any shareholders would suffer any adverse financial consequences.
However, an alternative means of providing shareholder services might afford
less convenience to shareholders.

ADMINISTRATOR
- -------------------------------------------------------------------
Brown Brothers Harriman & Co. acts as Administrator for the Corporation.

In its capacity as Administrator, Brown Brothers Harriman & Co. administers
all aspects of the Corporation's operations subject to the supervision of the
Corporation's Directors except as set forth below under "Distributor". In
connection with its responsibilities as Administrator and at its own expense,
Brown Brothers Harriman & Co. (i) provides the Corporation with the services of
persons competent to perform such supervisory, administrative and clerical
functions as are necessary in order to provide effective administration of the
Corporation, including the maintenance of certain books and records; (ii)
oversees the performance of administrative and professional services to the
Corporation by others, including the Funds' Custodian, Transfer and Dividend
Disbursing Agent; (iii) provides the Corporation with adequate office space and
communications and other facilities; and (iv) prepares and/or arranges for the
preparation, but does not pay for, the periodic updating of the Corporation's
registration statement and each Fund's prospectus, the printing of such
documents for the purpose of filings with the Securities and Exchange Commission
and state securities administrators, and the preparation of tax returns for each
Fund and reports to each Fund's shareholders and the Securities and Exchange
Commission.
The Administration Agreement between the Corporation and Brown Brothers
Harriman & Co. (dated November 1, 1993) will remain in effect for two years from
such date and thereafter, but only so long as such agreement is specifically
approved at least annually in the same manner as the Investment Advisory
Agreement. The Independent Directors most recently approved the Corporation's
Administration Agreement on November 10, 1998. The agreement will terminate
automatically if assigned by either party thereto and is terminable with respect
to each Fund at any time without penalty by a vote of a majority of the
Directors of the Corporation or by a vote of the holders of a "majority of the
Corporation's outstanding voting securities" (as defined in the 1940 Act). (See
"Additional Information".) The Administration Agreement is terminable by the
Corporation's Directors or shareholders of the Corporation on 60 days' written
notice to Brown Brothers Harriman & Co. and by Brown Brothers Harriman & Co. on
90 days' written notice to the Corporation.

The administrative fee payable to Brown Brothers Harriman & Co. from each
Fund is calculated daily and payable monthly at an annual rate equal to 0.15% of
each Fund's average daily net assets. Prior to November 1, 1993, 59 Wall Street
Distributors served as administrator for the Corporation and was paid monthly at
an annual rate equal to 0.05% of each Fund's average daily net assets. For the
fiscal years ended October 31, 1996, 1997 and 1998 the European Equity Fund
incurred $195,566, $233,628 and $241,367, respectively, for administrative
services. For the fiscal years ended October 31, 1996, 1997 and 1998, the
Pacific Basin Equity Fund incurred $213,287, $215,035 and $65,043, respectively,
for administrative services.
Pursuant to a Subadministrative Services Agreement with Brown Brothers
Harriman & Co., 59 Wall Street Administrators performs such subadministrative
duties for the Corporation as are from time to time agreed upon by the parties.
The offices of 59 Wall Street Administrators are located at 21 Milk Street,
Boston, Massachusetts 02109. 59 Wall Street Administrators is a wholly-owned
subsidiary of Signature Financial Group, Inc. ("SFG"). SFG is not affiliated
with Brown Brothers Harriman & Co. 59 Wall Street Administrators'
subadministrative duties may include providing equipment and clerical personnel
necessary for maintaining the organization of the Corporation, participation in
the preparation of documents required for compliance by the Corporation with
applicable laws and regulations, preparation of certain documents in connection
with meetings of Directors and shareholders of the Corporation, and other
functions that would otherwise be performed by the Administrator as set forth
above. For performing such subadministrative services, 59 Wall Street
Administrators receives such compensation as is from time to time agreed upon
but not in excess of the amount paid to the Administrator from the Funds.

DISTRIBUTOR
- -------------------------------------------------------------------
59 Wall Street Distributors acts as exclusive Distributor of shares of the
Fund. Its office is located at 21 Milk Street, Boston, Massachusetts 02109. 59
Wall Street Distributors is a wholly-owned subsidiary of SFG. SFG and its
affiliates currently provide administration and distribution services for other
registered investment companies. The Corporation pays for the preparation,
printing and filing of copies of the Corporation's registration statements and
each Fund's prospectus as required under federal and state securities laws.
59 Wall Street Distributors holds itself available to receive purchase
orders for Fund shares.

The Distribution Agreement (dated September 5, 1990, as amended and
restated February 12, 1991) between the Corporation and 59 Wall Street
Distributors remains in effect indefinitely, but only so long as such agreement
is specifically approved at least annually in the same manner as the Investment
Advisory Agreement. The Distribution Agreement was most recently approved by the
Independent Directors of the Corporation on February 9, 1999. The agreement
terminates automatically if assigned by either party thereto and is terminable
with respect to each Fund at any time without penalty by a vote of a majority of
the Directors of the Corporation or by a vote of the holders of a "majority of
each Fund's outstanding voting securities" (as defined in the 1940 Act). (See
"Additional Information".) The Distribution Agreement is terminable with respect
to each Fund by the Corporation's Directors or shareholders of the Fund on 60
days' written notice to 59 Wall Street Distributors. The agreement is terminable
by 59 Wall Street Distributors on 90 days' written notice to the Corporation.

SHAREHOLDER SERVICING AGENT
- -------------------------------------------------------------------
The Corporation has entered into a shareholder servicing agreement with
Brown Brothers Harriman & Co. pursuant to which Brown Brothers Harriman & Co.,
as agent for the Funds, among other things: answers inquiries from shareholders
of and prospective investors in the Funds regarding account status and history,
the manner in which purchases and redemptions of Fund shares may be effected and
certain other matters pertaining to the Funds; assists shareholders of and
prospective investors in the Funds in designating and changing dividend options,
account designations and addresses; and provides such other related services as
the Corporation or a shareholder of or prospective investor in a Fund may
reasonably request. For these services, Brown Brothers Harriman & Co. receives
from each Fund an annual fee, computed daily and payable monthly, equal to 0.25%
of that Fund's average daily net assets represented by shares owned during the
period for which payment was being made by shareholders who did not hold their
shares with an Eligible Institution.

FINANCIAL INTERMEDIARIES
- -------------------------------------------------------------------
From time to time, the Funds' Shareholder Servicing Agent enters into
contracts with banks, brokers and other financial intermediaries ("Financial
Intermediaries") pursuant to which a customer of the Financial Intermediary may
place purchase orders for Fund shares through that Financial Intermediary which
holds such shares in its name on behalf of that customer. Pursuant to such
contract, each Financial Intermediary as agent with respect to shareholders of
and prospective investors in the Funds who are customers of that Financial
Intermediary, among other things: provides necessary personnel and facilities to
establish and maintain certain shareholder accounts and records enabling it to
hold, as agent, its customers' shares in its name or its nominee name on the
shareholder records of the Corporation; assists in processing purchase and
redemption transactions; arranges for the wiring of funds; transmits and
receives funds in connection with customer orders to purchase or redeem shares
of the Funds; provides periodic statements showing a customer's account balance
and, to the extent practicable, integrates such information with information
concerning other customer transactions otherwise effected with or through it;
furnishes, either separately or on an integrated basis with other reports sent
to a customer, monthly and annual statements and confirmations of all purchases
and redemptions of Fund shares in a customer's account; transmits proxy
statements, annual reports, updated prospectuses and other communications from
the Corporation to its customers; and receives, tabulates and transmits to the
Corporation proxies executed by its customers with respect to meetings of
shareholders of the Funds. For these services, the Financial Intermediary
receives such fees from the Shareholder Servicing Agent as may be agreed upon
from time to time between the Shareholder Servicing Agent and such Financial
Intermediary.

ELIGIBLE INSTITUTIONS
- -------------------------------------------------------------------
The Corporation enters into eligible institution agreements with banks,
brokers and other financial institutions pursuant to which each financial
institution, as agent for the Corporation with respect to shareholders of and
prospective investors in the Funds who are customers with that financial
institution, among other things: provides necessary personnel and facilities to
establish and maintain certain shareholder accounts and records enabling it to
hold, as agent, its customers' shares in its name or its nominee name on the
shareholder records of the Corporation; assists in processing purchase and
redemption transactions; arranges for the wiring of funds; transmits and
receives funds in connection with customer orders to purchase or redeem shares
of the Funds; provides periodic statements showing a customer's account balance
and, to the extent practicable, integrates such information with information
concerning other customer transactions otherwise effected with or through it;
furnishes, either separately or on an integrated basis with other reports sent
to a customer, monthly and annual statements and confirmations of all purchases
and redemptions of Fund shares in a customer's account; transmits proxy
statements, annual reports, updated prospectuses and other communications from
the Corporation to its customers; and receives, tabulates and transmits to the
Corporation proxies executed by its customers with respect to meetings of
shareholders of the Funds. For these services, each financial institution
receives from each Fund an annual fee, computed daily and payable monthly, equal
to 0.25% of that Funds average daily net assets represented by shares owned
during the period for which payment was being made by customers for whom the
financial institution was the holder or agent of record.

CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT
- -------------------------------------------------------------------
State Street Bank and Trust Company ("State Street" or the "Custodian"),
225 Franklin Street, P.O. Box 351, Boston, Massachusetts 02110, is Custodian,
Transfer and Dividend Disbursing Agent for each Fund.

As Custodian, it is responsible for maintaining books and records of each
Fund's portfolio transactions and holding each Fund's portfolio securities and
cash pursuant to a custodian agreement with the Corporation. Cash is held for
each Fund in demand deposit accounts at the Custodian. State Street employs
subcustodians, each of which has been approved by the Board of Directors in
accordance with the regulations of the Securities and Exchange Commission, for
the purpose of providing custodial services for foreign assets held outside the
United States for each Fund. The Board of Directors monitors the activities of
the Custodian and each subcustodian. Subject to the supervision of the
Administrator, the Custodian maintains each Fund's accounting and portfolio
transaction records and for each day computes each Fund's net asset value. As
Transfer and Dividend Disbursing Agent it is responsible for maintaining the
books and records detailing the ownership of each Fund's shares.

INDEPENDENT AUDITORS
- -------------------------------------------------------------------
Deloitte & Touche LLP are the independent auditors for the Funds.

NET ASSET VALUE; REDEMPTION IN KIND
- -------------------------------------------------------------------

The net asset value of each of a Fund's shares is determined each day
the New York Stock Exchange is open for regular trading and New York banks are
open for business. (As of the date of this Statement of Additional Information,
such Exchange and banks are so open every weekday except for the following
holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas.) This determination of net asset value of each share of a Fund is
made once during each such day as of the close of regular trading on such
Exchange by subtracting from the value of the total assets of a Fund the amount
of its liabilities and dividing the difference by the number of shares of that
Fund outstanding at the time the determination is made.

The value of investments listed on a domestic securities exchange is
based on the last sale prices as of the regular close of the New York Stock
Exchange (which is currently 4:00 P.M., New York time) or, in the absence of
recorded sales, at the average of readily available closing bid and asked prices
on such Exchange. Securities listed on a foreign exchange are valued at the last
quoted sale price available before the time at which net assets are valued.

Unlisted securities are valued at the average of the quoted bid and
asked prices in the over-the-counter market. The value of each security for
which readily available market quotations exist is based on a decision as to the
broadest and most representative market for such security. For purposes of
calculating net asset value per share, all assets and liabilities initially
expressed in foreign currencies are converted into U.S. dollars at the
prevailing market rates available at the time of valuation.

Securities or other assets for which market quotations are not readily
available are valued at fair value in accordance with procedures established by
and under the general supervision and responsibility of the Corporation's
Directors. Such procedures include the use of independent pricing services,
which use prices based upon yields or prices of securities of comparable
quality, coupon, maturity and type; indications as to values from dealers; and
general market conditions. Short-term investments which mature in 60 days or
less are valued at amortized cost if their original maturity was 60 days or
less, or by amortizing their value on the 61st day prior to maturity, if their
original maturity when acquired for a Fund was more than 60 days, unless this is
determined not to represent fair value by the Directors.

Trading in securities on most foreign exchanges and over-the-counter
markets is normally completed before the close of the New York Stock Exchange
and may also take place on days the New York Stock Exchange is closed. If events
materially affecting the value of foreign securities occur between the time when
the exchange on which they are traded closes and the time when a Fund's net
asset value is calculated, such securities would be valued at fair value in
accordance with procedures established by and under the general supervision of
the Corporation's Directors.

Subject to the Corporation's compliance with applicable regulations,
the Corporation has reserved the right to pay the redemption price of shares of
a Fund, either totally or partially, by a distribution in kind of portfolio
securities (instead of cash). The securities so distributed would be valued at
the same amount as that assigned to them in calculating the net asset value for
the shares being sold. If a shareholder received a distribution in kind, the
shareholder could incur brokerage or other charges in converting the securities
to cash. The Corporation has elected, however, to be governed by Rule 18f-1
under the 1940 Act, as a result of which the Corporation is obligated with
respect to any one investor during any 90 day period to redeem shares of a Fund
solely in cash up to the lesser of $250,000 or 1% of that Fund's net assets at
the beginning of such 90 day period.

COMPUTATION OF PERFORMANCE
- -------------------------------------------------------------------

The average annual total return of a Fund is calculated for any period
by (a) dividing (i) the sum of the aggregate net asset value per share on the
last day of the period of shares purchased with a $1,000 payment on the first
day of the period and the aggregate net asset value per share on the last day of
the period of shares purchasable with dividends and capital gains distributions
declared during such period with respect to shares purchased on the first day of
such period and with respect to shares purchased with such dividends and capital
gains distributions, by (ii) $1,000, (b) raising the quotient to a power equal
to 1 divided by the number of years in the period, and (c) subtracting 1 from
the result.

The total rate of return of a Fund for any specified period is
calculated by (a) dividing (i) the sum of the aggregate net asset value per
share on the last day of the period of shares purchased with a $1,000 payment on
the first day of the period and the aggregate net asset value per share on the
last day of the period of shares purchasable with dividends and capital gains
distributions declared during such period with respect to shares purchased on
the first day of such period and with respect to shares purchased with such
dividends and capital gains distributions, by (ii) $1,000, and (b) subtracting 1
from the result.

The annualized average rate of return for the European Equity Fund and
the Pacific Basin Equity Fund for the period November 1, 1990 (commencement of
operations) to October 31, 1998 was 12.57% and 2.68%, respectively. The average
annual rate of return for the European Equity Fund and the Pacific Basin Equity
Fund for the fiscal year ended October 31, 1998 was 19.34% and -10.78%,
respectively. The average annual rate of return for the European Equity Fund and
the Pacific Basin Equity Fund for the five-year period ended October 31, 1998
was 13.50% and -6.04%, respectively.

Performance calculations should not be considered a representation of
the average annual or total rate of return of a Fund in the future since the
rates of return are not fixed. Actual total rates of return and average annual
rates of return depend on changes in the market value of, and dividends and
interest received from, the investments held by a Fund and that Fund's expenses
during the period.
Total and average annual rate of return information may be useful for
reviewing the performance of a Fund and for providing a basis for comparison
with other investment alternatives. However, unlike bank deposits or other
investments which pay a fixed yield for a stated period of time, a Fund's total
rate of return fluctuates, and this should be considered when reviewing
performance or making comparisons.
Each Fund's performance may be used from time to time in shareholder
reports or other communications to shareholders or prospective investors.
Performance figures are based on historical earnings and are not intended to
indicate future performance. Performance information may include a Fund's
investment results and/or comparisons of its investment results to various
unmanaged indexes (such as the MSCI-Europe and MSCI-Pacific) and to investments
for which reliable performance data is available. Performance information may
also include comparisons to averages, performance rankings or other information
prepared by recognized mutual fund statistical services. To the extent that
unmanaged indexes are so included, the same indexes are used on a consistent
basis. A Fund's investment results as used in such communications are calculated
on a total rate of return basis in the manner set forth below. From time to
time, fund rankings from various sources, such as Micropal, may be quoted.

Period and average annualized "total rates of return" may be provided in
such communications. The "total rate of return" refers to the change in the
value of an investment in a Fund over a stated period based on any change in net
asset value per share and including the value of any shares purchasable with any
dividends or capital gains distributions during such period. Period total rates
of return may be annualized. An annualized total rate of return is a compounded
total rate of return which assumes that the period total rate of return is
generated over a one year period, and that all dividends and capital gains
distributions are reinvested. An annualized total rate of return is slightly
higher than a period total rate of return if the period is shorter than one
year, because of the assumed reinvestment.

PURCHASES AND REDEMPTIONS

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

A confirmation of each purchase and redemption transaction is issued on
execution of that transaction.

The Corporation reserves the right to discontinue, alter or limit the
automatic reinvestment privilege at any time.

A shareholder's right to receive payment with respect to any redemption may
be suspended or the payment of the redemption proceeds postponed: (i) during
periods when the New York Stock Exchange is closed for other than weekends and
holidays or when regular trading on such Exchange is restricted as determined by
the Securities and Exchange Commission by rule or regulation, (ii) during
periods in which an emergency exists which causes disposal of, or evaluation of
the net asset value of, a Fund's portfolio securities to be unreasonable or
impracticable, or (iii) for such other periods as the Securities and Exchange
Commission may permit.

In the event a shareholder redeems all shares held in the Fund, future
purchases of shares of the Fund by such shareholder would be subject to the
Fund=s minimum initial purchase requirements.

An investor should be aware that redemptions from the Fund may not be
processed if a completed account application with a certified taxpayer
identification number has not been received.

The value of shares redeemed may be more or less than the shareholder's
cost depending on Fund performance during the period the shareholder owned such
shares.

FEDERAL TAXES

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

Each year, the Corporation intends to continue to qualify each Fund and
elect that each Fund be treated as a separate "regulated investment company"of
the Internal Revenue Code of 1986, as amended (the "Code"). Accordingly, the
Funds are not subject to federal income taxes on its net income and realized net
long-term capital gains in excess of net short-term capital losses that are
distributed to its shareholders. A 4% non-deductible excise tax is imposed on a
Fund to the extent that certain distribution requirements for that Fund for each
calendar year are not met. The Corporation intends to continue to meet such
requirements.

Qualification as a regulated investment company under the Code
requires, among other things, that (a) at least 90% of a Fund's annual gross
income, without offset for losses from the sale or other disposition of
securities, be derived from interest, payments with respect to securities loans,
dividends and gains from the sale or other disposition of securities, foreign
currencies or other income derived with respect to its business of investing in
such securities; (b) less than 30% of a Fund's annual gross income be derived
from gains (without offset for losses) from the sale or other disposition of
securities held for less than three months; and (c) the holdings of a Fund be
diversified so that, at the end of each quarter of its fiscal year, (i) at least
50% of the market value of a Fund's assets be represented by cash, U.S.
Government securities and other securities limited in respect of any one issuer
to an amount not greater than 5% of that Fund's assets and 10% of the
outstanding voting securities of such issuer, and (ii) not more than 25% of the
value of a Fund's assets be invested in the securities of any one issuer (other
than U.S. Government securities). Foreign currency gains that are not directly
related to a Fund's business of investing in stock or securities is included in
the income that counts toward the 30% gross income requirement described above
but may be excluded by Treasury Regulations from income that counts toward the
90% of gross income requirement described above. In addition, in order not to be
subject to federal income tax, at least 90% of a Fund's net investment income
and net short-term capital gains earned in each year must be distributed to that
Fund's shareholders.

Under the Code, gains or losses attributable to foreign currency
contracts, or to fluctuations in exchange rates between the time a Fund accrues
income or receivables or expenses or other liabilities denominated in a foreign
currency and the time that Fund actually collects such income or pays such
liabilities, are treated as ordinary income or ordinary loss. Similarly, gains
or losses on the disposition of debt securities held by a Fund, if any,
denominated in foreign currency, to the extent attributable to fluctuations in
exchange rates between the acquisition and disposition dates are also treated as
ordinary income or loss.

Dividends paid from the Funds are not eligible for the
dividends-received deduction allowed to corporate shareholders because the
income of the Funds does not consist of dividends paid by domestic corporations.

Gains or losses on sales of securities for a Fund are treated as
long-term capital gains or losses if the securities have been held by it for
more than one year except in certain cases where a put has been acquired or a
call has been written thereon for that Fund. Other gains or losses on the sale
of securities are treated as short-term capital gains or losses. Gains and
losses on the sale, lapse or other termination of options on securities are
generally treated as gains and losses from the sale of securities. If an option
written for a Fund lapses or is terminated through a closing transaction, such
as a repurchase for that Fund of the option from its holder, that Fund may
realize a short-term capital gain or loss, depending on whether the premium
income is greater or less than the amount paid in the closing transaction. If
securities are sold for a Fund pursuant to the exercise of a call option written
for it, the premium received would be added to the sale price of the securities
delivered in determining the amount of gain or loss on the sale. The requirement
that less than 30% of a Fund's gross income be derived from gains from the sale
of securities held for less than three months may limit the ability to write
options and engage in transactions involving stock index futures for a Fund.

Certain options contracts held for a Fund at the end of each fiscal
year are required to be "marked to market" for federal income tax purposes; that
is, treated as having been sold at market value. Sixty percent of any gain or
loss recognized on these deemed sales and on actual dispositions are treated as
long-term capital gain or loss, and the remainder are treated as short-term
capital gain or loss regardless of how long that Fund has held such options. A
Fund may be required to defer the recognition of losses on stock or securities
to the extent of any unrecognized gain on offsetting positions held for it.

If shares are purchased for a Fund in certain foreign investment
entities, referred to as "passive foreign investment companies", that Fund
itself may be subject to U.S. federal income tax, and an additional charge in
the nature of interest, on a portion of any "excess distribution" from such
company or gain from the disposition of such shares, even if the distribution or
gain is paid by that Fund as a dividend to its shareholders. If a Fund were able
and elected to treat a passive foreign investment company as a "qualified
electing fund", in lieu of the treatment described above, that Fund would be
required each year to include in income, and distribute to shareholders in
accordance with the distribution requirements set forth above, that Fund's pro
rata share of the ordinary earnings and net capital gains of the company,
whether or not distributed to that Fund.

Return of Capital. Any dividend or capital gains distribution has the
effect of reducing the net asset value of Fund shares held by a shareholder by
the same amount as the dividend or capital gains distribution. If the net asset
value of shares is reduced below a shareholder's cost as a result of a dividend
or capital gains distribution by a Fund, such dividend or capital gains
distribution would be taxable even though it represents a return of invested
capital.
Redemption of Shares. Any gain or loss realized on the redemption of
Fund shares by a shareholder who is not a dealer in securities would be treated
as long-term capital gain or loss if the shares have been held for more than one
year, and otherwise as short-term capital gain or loss. However, any loss
realized by a shareholder upon the redemption of Fund shares held one year or
less is treated as a long-term capital loss to the extent of any long-term
capital gains distributions received by the shareholder with respect to such
shares. Additionally, any loss realized on a redemption or exchange of Fund
shares is disallowed to the extent the shares disposed of are replaced within a
period of 61 days beginning 30 days before such disposition, such as pursuant to
reinvestment of a dividend or capital gains distribution in Fund shares.

Foreign Taxes. The Funds may be subject to foreign withholding taxes
with respect to income received from sources within foreign countries. So long
as more than 50% in value of a Fund's total assets at the close of any fiscal
year consists of stock or securities of foreign corporations, at the election of
the Corporation any such foreign income taxes paid by a Fund may be treated as
paid directly by its shareholders. The Corporation makes such an election only
if it deems it to be in the best interest of that Fund's shareholders and
notifies shareholders in writing each year if it makes the election and of the
amount of foreign income taxes, if any, to be treated as paid by the
shareholders. If the Corporation elects to treat foreign income taxes paid from
a Fund as paid directly by that Fund's shareholders, each Fund shareholder would
be required to include in income such shareholder's proportionate share of the
amount of foreign income taxes paid by that Fund and would be entitled to claim
either a credit or a deduction in such amount. (No deduction is permitted in
computing alternative minimum tax liability). Shareholders who choose to utilize
a credit (rather than a deduction) for foreign taxes are subject to the
limitation that the credit may not exceed the shareholder's U.S. tax (determined
without regard to the availability of the credit) attributable to that
shareholder's total foreign source taxable income. For this purpose, the portion
of dividends and capital gains distributions paid from a Fund from its foreign
source income is treated as foreign source income. A Fund's gains and losses
from the sale of securities are generally treated as derived from U.S. sources,
however, and certain foreign currency gains and losses likewise are treated as
derived from U.S. sources. The limitation on the foreign tax credit is applied
separately to foreign source "passive income", such as the portion of dividends
received from a Fund which qualifies as foreign source income. In addition, the
foreign tax credit is allowed to offset only 90% of the alternative minimum tax
imposed on corporations and individuals. Because of these limitations, a
shareholder may be unable to claim a credit for the full amount of such
shareholder's proportionate share of the foreign income taxes paid from a Fund.

Certain entities, including Corporations formed as part of corporate
pension or profit-sharing plans and certain charitable and other organizations
described in Section 501 (c) of the Code, that are generally exempt from federal
income taxes may not receive any benefit from the election by the Corporation to
"pass through" foreign income taxes to a Fund's shareholders.

In certain circumstances foreign taxes imposed with respect to a Fund's
income may not be treated as income taxes imposed on that Fund. Any such taxes
would not be included in that Fund's income, would not be eligible to be "passed
through" to Fund shareholders, and would not be eligible to be claimed as a
foreign tax credit or deduction by Fund shareholders. In particular, in certain
circumstances it may not be clear whether certain amounts of taxes deducted from
gross dividends paid to a Fund would, for U.S. federal income tax purposes, be
treated as imposed on the issuing corporation rather than that Fund.

Other Taxes. A Fund may be subject to state or local taxes in
jurisdictions in which it is deemed to be doing business. In addition, the
treatment of a Fund and its shareholders in those states which have income tax
laws might differ from treatment under the federal income tax laws.
Distributions to shareholders may be subject to additional state and local
taxes. Shareholders should consult their own tax advisors with respect to any
state or local taxes.

Other Information. Annual notification as to the tax status of capital
gains distributions, if any, is provided to shareholders shortly after October
31, the end of each Fund's fiscal year. Additional tax information is mailed to
shareholders in January.

Under U.S. Treasury regulations, the Corporation and each Eligible
Institution are required to withhold and remit to the U.S. Treasury a portion
(31%) of dividends and capital gains distributions on the accounts of those
shareholders who fail to provide a correct taxpayer identification number
(Social Security Number for individuals) or to make required certifications, or
who have been notified by the Internal Revenue Service that they are subject to
such withholdings. Prospective investors should submit an IRS Form W-9 to avoid
such withholding.

This tax discussion is based on the tax laws and regulations in effect
on the date of the Prospectus, however such laws and regulations are subject to
change. Shareholders and prospective investors are urged to consult their tax
advisors regarding specific questions relevant to their particular
circumstances.

DESCRIPTION OF SHARES
- ----------------------------------------------------------------------------
The Corporation is an open-end management investment company organized as a
Maryland corporation on July 16, 1990. Its offices are located at 21 Milk
Street, Boston, Massachusetts 02109; its telephone number is (617) 423-0800. The
Articles of Incorporation currently permit the Corporation to issue
2,500,000,000 shares of common stock, par value $0.001 per share, of which
25,000,000 shares have been classified as shares of the European Equity Fund and
25,000,000 as shares of Pacific Basin Equity Fund. The Board of Directors may
increase the number of shares the Corporation is authorized to issue without the
approval of shareholders. The Board of Directors also has the power to designate
one or more series of shares of common stock and to classify and reclassify any
unissued shares with respect to such series. Currently there are four such
series in addition to the Funds.

Each share of the Fund represents an equal proportional interest in the
Fund with each other share. Upon liquidation of the Fund, shareholders are
entitled to share pro rata in the net assets of the Fund available for
distribution to shareholders.

Shareholders of each Fund are entitled to a full vote for each full
share held and to a fractional vote for fractional shares. Shareholders in the
Corporation do not have cumulative voting rights, and shareholders owning more
than 50% of the outstanding shares of the Corporation may elect all of the
Directors of the Corporation if they choose to do so and in such event the other
shareholders in the Corporation would not be able to elect any Director. The
Corporation is not required and has no current intention to hold meetings of
shareholders annually but the Corporation will hold special meetings of
shareholders when in the judgment of the Corporation's Directors it is necessary
or desirable to submit matters for a shareholder vote as may be required by the
1940 Act or as may be permitted by the Articles of Incorporation or By-laws.
Shareholders have under certain circumstances (e.g., upon application and
submission of certain specified documents to the Directors by a specified number
of shareholders) the right to communicate with other shareholders in connection
with requesting a meeting of shareholders for the purpose of removing one or
more Directors. Shareholders also have the right to remove one or more Directors
without a meeting by a declaration in writing by a specified number of
shareholders. Shares have no preemptive or conversion rights. The rights of
redemption are described in the Prospectus. Shares, when issued, are fully paid
and non-assessable by the Corporation.

Stock certificates are not issued by the Corporation.

The By-laws of the Corporation provide that the presence in person or by
proxy of the holders of record of one third of the shares of a Fund outstanding
and entitled to vote thereat shall constitute a quorum at all meetings of
shareholders of that Fund, except as otherwise required by applicable law. The
By-laws further provide that all questions shall be decided by a majority of the
votes cast at any such meeting at which a quorum is present, except as otherwise
required by applicable law.

The Corporation's Articles of Incorporation provide that, at any
meeting of shareholders of a Fund, each Eligible Institution may vote any shares
as to which that Eligible Institution is the agent of record and which are
otherwise not represented in person or by proxy at the meeting, proportionately
in accordance with the votes cast by holders of all shares otherwise represented
at the meeting in person or by proxy as to which that Eligible Institution is
the agent of record. Any shares so voted by an Eligible Institution are deemed
represented at the meeting for purposes of quorum requirements.

The Articles of Incorporation and the By-Laws of the Corporation provide
that the Corporation indemnify the Directors and officers of the Corporation to
the full extent permitted by the Maryland Corporation Law, which permits
indemnification of such persons against liabilities and expenses incurred in
connection with litigation in which they may be involved because of their
offices with the Corporation. However, nothing in the Articles of Incorporation
or the By-Laws of the Corporation protects or indemnifies a Director or officer
of the Corporation against any liability to the Corporation or its shareholders
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.

The Corporation may, in the future, seek to achieve each Fund's investment
objective by investing all of the Fund's investable assets in a no-load,
open-end management investment company having substantially the same investment
objective as a Fund. Shareholders will receive 30 days prior written notice with
respect to any such investment. In such event, the Fund would no longer directly
require investment advisory services and therefore would pay no investment
advisory fees. Further, the administrative services fee paid from the Fund would
be reduced. At a shareholder's meeting held on September 23, 1993, each Fund's
shareholders approved changes to the investment restrictions to authorize such
an investment. Such an investment would be made only if the Directors believe
that the aggregate per share expenses of each Fund and such other investment
company would be less than or approximately equal to the expenses which the Fund
would incur if the Corporation were to continue to retain the services of an
investment adviser for the Fund and the assets of the Fund were to continue to
be invested directly in portfolio securities.

It is expected that the investment in another investment company will
have no preference, preemptive, conversion or similar rights, and will be fully
paid and non-assessable. It is expected that the investment company will not be
required to hold annual meetings of investors, but will hold special meetings of
investors when, in the judgment of its trustees, it is necessary or desirable to
submit matters for an investor vote. It is expected that each investor will be
entitled to a vote in proportion to the share of its investment in such
investment company. Except as described below, whenever the Corporation is
requested to vote on matters pertaining to the investment company, the
Corporation would hold a meeting of each Fund's shareholders and would cast its
votes on each matter at a meeting of investors in the investment company
proportionately as instructed by the Fund's shareholders.

PORTFOLIO BROKERAGE TRANSACTIONS

The portfolio of each of the Funds is managed actively in pursuit of
its investment objective. Securities are not traded for short-term profits but,
when circumstances warrant, securities are sold without regard to the length of
time held. A 100% annual turnover rate would occur, for example, if all
securities in a Fund's portfolio (excluding short-term obligations) were
replaced once in a period of one year. The portfolio turnover rate for the
European Equity Fund was 82% and 56% for the fiscal years ended October 31, 1997
and 1998, respectively. For the same time periods, the portfolio turnover rate
for the Pacific Basin Equity Fund was 63% and 91%, respectively. The amount of
brokerage commissions and taxes on realized capital gains to be borne by the
shareholders of a Fund tend to increase as the level of portfolio activity
increases.

In effecting securities transactions for a Fund, the Investment Adviser
seeks to obtain the best price and execution of orders. In selecting a broker,
the Investment Adviser considers a number of factors including: the broker's
ability to execute orders without disturbing the market price; the broker's
reliability for prompt, accurate confirmations and on-time delivery of
securities; the broker=s financial condition and responsibility; the research
and other investment information provided by the broker; and the commissions
charge. Accordingly, the commissions charged by any such broker may be greater
than the amount another firm might charge if the Investment Adviser determines
in good faith that the amount of such commissions is reasonable in relation to
the value of the brokerage services and research information provided by such
broker.

The Investment Adviser may direct a portion of a Fund's securities
transactions to certain unaffiliated brokers which in turn use a portion of the
commissions they receive from that Fund to pay other unaffiliated service
providers on behalf of that Fund for services provided for which that Fund would
otherwise be obligated to pay. Such commissions paid by a Fund are at the same
rate paid to other brokers for effecting similar transactions in listed equity
securities.

On those occasions when Brown Brothers Harriman & Co. deems the
purchase or sale of a security to be in the best interests of a Fund as well as
other customers, Brown Brothers Harriman & Co., to the extent permitted by
applicable laws and regulations, may, but is not obligated to, aggregate the
securities to be sold or purchased for that Fund with those to be sold or
purchased for other customers in order to obtain best execution, including lower
brokerage commissions, if appropriate. In such event, allocation of the
securities so purchased or sold as well as any expenses incurred in the
transaction are made by Brown Brothers Harriman & Co. in the manner it considers
to be most equitable and consistent with its fiduciary obligations to its
customers, including the Funds. In some instances, this procedure might
adversely affect a Fund.

For the fiscal year ended October 31, 1996, the aggregate commissions
paid by the European Equity Fund and the Pacific Basin Equity Fund were $262,804
and $542,629, respectively. For the fiscal year ended October 31, 1997, the
aggregate commissions paid by the European Equity Fund and the Pacific Basin
Equity Fund were $625,439 and $669,481, respectively. For the fiscal year ended
October 31, 1998, the aggregate commissions paid by the European Equity Fund and
the Pacific Basin Equity Fund were $460,433 and $362,267, respectively.

Portfolio securities are not purchased from or sold to the
Administrator, Distributor or Investment Adviser or any "affiliated person" (as
defined in the 1940 Act) of the Administrator, Distributor or Investment Adviser
when such entities are acting as principals, except to the extent permitted by
law.

All of the transactions for the Funds are executed through qualified
brokers other than Brown Brothers Harriman & Co. In selecting such brokers, the
Investment Adviser may consider the research and other investment information
provided by such brokers. Research services provided by brokers to which Brown
Brothers Harriman & Co. has allocated brokerage business in the past include
economic statistics and forecasting services, industry and company analyses,
portfolio strategy services, quantitative data, and consulting services from
economists and political analysts. Research services furnished by brokers are
used for the benefit of all the Investment Adviser's clients and not solely or
necessarily for the benefit of the Funds. The Investment Adviser believes that
the value of research services received is not determinable nor does such
research significantly reduce its expenses. The Corporation does not reduce the
fee paid by a Fund to the Investment Adviser by any amount that might be
attributable to the value of such services.

A committee, comprised of officers and partners of Brown Brothers
Harriman & Co. who are portfolio managers of some of Brown Brothers Harriman &
Co.'s managed accounts (the "Managed Accounts"), evaluates semi-annually the
nature and quality of the brokerage and research services provided by brokers,
and, based on this evaluation, establishes a list and projected ranking of
preferred brokers for use in determining the relative amounts of commissions to
be allocated to such brokers. However, in any semi-annual period, brokers not on
the list may be used, and the relative amounts of brokerage commissions paid to
the brokers on the list may vary substantially from the projected rankings.

The Directors of the Corporation review regularly the reasonableness of
commissions and other transaction costs incurred for the Funds in light of facts
and circumstances deemed relevant from time to time and, in that connection,
receive reports from the Investment Adviser and published data concerning
transaction costs incurred by institutional investors generally.

Over-the-counter purchases and sales are transacted directly with
principal market makers, except in those circumstances in which, in the judgment
of the Investment Adviser, better prices and execution of orders can otherwise
be obtained. If the Corporation effects a closing transaction with respect to a
futures or option contract, such transaction normally would be executed by the
same broker-dealer who executed the opening transaction. The writing of options
by the Corporation may be subject to limitations established by each of the
exchanges governing the maximum number of options in each class which may be
written by a single investor or group of investors acting in concert, regardless
of whether the options are written on the same or different exchanges or are
held or written in one or more accounts or through one or more brokers. The
number of options which the Corporation may write may be affected by options
written by the Investment Adviser for other investment advisory clients. An
exchange may order the liquidation of positions found to be in excess of these
limits, and it may impose certain other sanctions.

ADDITIONAL INFORMATION
- -------------------------------------------------------------------

As used in this Statement of Additional Information and the Prospectus,
the term "majority of a Fund's outstanding voting securities" (as defined in the
1940 Act) currently means the vote of (i) 67% or more of that Fund's shares
present at a meeting, if the holders of more than 50% of the outstanding voting
securities of that Fund are present in person or represented by proxy; or (ii)
more than 50% of that Fund's outstanding voting securities, whichever is less.

Fund shareholders receive semi-annual reports containing unaudited
financial statements and annual reports containing financial statements audited
by independent auditors.

With respect to the securities offered by the Prospectus, this
Statement of Additional Information and the Prospectus do not contain all the
information included in the Registration Statement filed with the Securities and
Exchange Commission under the Securities Act of 1933. Pursuant to the rules and
regulations of the Securities and Exchange Commission, certain portions have
been omitted. The Registration Statement including the exhibits filed therewith
may be examined at the office of the Securities and Exchange Commission in
Washington, D.C.

Statements contained in this Statement of Additional Information and
the Prospectus concerning the contents of any contract or other document are not
necessarily complete, and in each instance, reference is made to the copy of
such contract or other document filed as an exhibit to the Registration
Statement. Each such statement is qualified in all respects by such reference.

FINANCIAL STATEMENTS
- -------------------------------------------------------------------

The Annual Report of the Funds dated October 31, 1998 has been filed
with the Securities and Exchange Commission pursuant to Section 30(b) of the
1940 Act and Rule 30b2-1 thereunder and is hereby incorporated herein by
reference. A copy of the Annual Report which also contains performance
information will be provided, without charge, to each person receiving this
Statement of Additional Information.

WS5306F