ADVISORS INNER CIRCLE FUND, 497, 1996-03-05

ADVISORS INNER CIRCLE FUND
497, 1996-03-05

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<PAGE>

THE ADVISORS' INNER CIRCLE FUND

Investment Adviser:
CLOVER CAPITAL MANAGEMENT, INC.

The Advisors' Inner Circle Fund (the "Fund") provides a convenient and
economical means of investing in professionally managed portfolios of
securities. This Prospectus offers shares of the following mutual funds (each,
a "Portfolio" and collectively "Portfolios"), each of which is a separate
series of the Fund.

. CLOVER CAPITAL EQUITY VALUE FUND
. CLOVER CAPITAL FIXED INCOME FUND
. CLOVER CAPITAL SMALL CAP VALUE FUND

This Prospectus sets forth concisely the information about the Fund and each
Portfolio that a prospective investor should know before investing. Investors
are advised to read this Prospectus and retain it for future reference. A
Statement of Additional Information dated February 28, 1996 has been filed
with the Securities and Exchange Commission and is available without charge by
calling 1-800-932-7781. The Statement of Additional Information is
incorporated into this Prospectus by reference.

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

February 28, 1996
<PAGE>

2
SUMMARY

The following summary provides basic information about the Clover Capital
Equity Value Fund (the "Equity Value Portfolio"), the Clover Capital Fixed
Income Fund (the "Fixed Income Portfolio") and The Clover Capital Small Cap
Value Fund (the "Small Cap Value Portfolio"). Each Portfolio is one of the
mutual funds comprising The Advisors' Inner Circle Fund (the "Fund"). This
summary is qualified in its entirety by reference to the more detailed
information provided elsewhere in this Prospectus and in the Statement of
Additional Information.

WHAT ARE THE INVESTMENT OBJECTIVES AND POLICIES? The Equity Value Portfolio
seeks long-term total return by investing in a diversified portfolio of equity
securities that, in the Adviser's opinion, are undervalued relative to the
market or the historic valuation of such securities. The Fixed Income Portfolio
seeks a high level of income consistent with reasonable risk to capital by
investing in a diversified portfolio of fixed income securities. There can be
no assurance that a Portfolio will achieve its investment objective. The Small
Cap Value Portfolio seeks long-term total return by investing in a diversified
portfolio of equity securities of domestic issuers with market capitalizations
of $750 million or less that, in the Adviser's opinion, are undervalued
relative to the market or the historic valuation of such securities.

WHAT ARE THE RISKS INVOLVED WITH AN INVESTMENT IN THE PORTFOLIOS? The
investment policies of the each Portfolio entail certain risks and
considerations of which investors should be aware. Each Portfolio invests in
securities that fluctuate in value, and investors should expect the Portfolio's
net asset value per share to fluctuate in value. Values of fixed income
securities and, correspondingly, of mutual funds invested in such securities,
such as the Portfolios, tend to vary inversely with interest rates and may be
affected by other market and economic factors as well.

The Equity Value Portfolio may invest up to 25% of its net assets in non-
convertible debt securities, which also may include securities of less than
investment grade ("junk bonds"); these high risk securities carry increased
risks of, among other things, default and market price volatility. The Fixed
Income Portfolio may invest in investment grade fixed income securities that
have speculative characteristics and may also invest up to 15% of its net
assets in fixed income securities that are junk bonds; these high risk
securities carry increased risks of, among other things, default and market
price volatility. The Small Cap Value Portfolio invests in equity securities of
smaller companies, which involves greater risk than is customarily associated
with equity investments in larger, more established companies.

For more information about each Portfolio, see "Investment Objectives,"
"Investment Policies," "Risk Factors" and "Description of Permitted Investments
and Risk Factors."

WHO IS THE ADVISER? Clover Capital Management, Inc. serves as the investment
adviser of each Portfolio. In addition to advising each Portfolio, Clover
Capital Management provides advisory services to pension plans, religious and
educational endowments, corporations, 401(k) plans, profit sharing plans,
individual investors and trusts and estates. See "Expense Summary" and "The
Adviser."

WHO IS THE ADMINISTRATOR? SEI Financial Management Corporation serves as the
administrator (the "Administrator") and shareholder servicing agent of each
Portfolio. See "The Administrator."

WHO IS THE TRANSFER AGENT? DST Systems, Inc. serves as the transfer agent and
dividend disbursing agent of the Fund. See "The Transfer Agent."
<PAGE>

3
WHO IS THE DISTRIBUTOR? SEI Financial Services Company acts as the distributor
of each Portfolio's shares. See "The Distributor."

IS THERE A SALES LOAD? No, shares of each Portfolio are offered on a no-load
basis.

IS THERE A MINIMUM INVESTMENT? Each Portfolio has a minimum initial investment
of $2,000, which the Distributor may waive at its discretion.

HOW DO I PURCHASE AND REDEEM SHARES? Purchases and redemptions may be made
through the Transfer Agent on a day when the New York Stock Exchange is open
for business ("Business Day"). A purchase order will be effective as of the
Business Day received by the Transfer Agent if the Transfer Agent receives an
order and payment by check or with readily available funds prior to 4:00 p.m.
Eastern time. To open an account by wire, you must first call 1-800-808-4921.
Redemption orders placed with the Transfer Agent prior to 4:00 p.m., Eastern
time on any Business Day will be effective that day. Each Portfolio also offers
both a Systematic Investment Plan and a Systematic Withdrawal Plan. The
purchase and redemption price for shares is the net asset value per share
determined as of the end of the day the order is effective. See "Purchase and
Redemption of Shares."

HOW ARE DISTRIBUTIONS PAID? Substantially all of the net investment income
(exclusive of capital gains) of the Equity Value Portfolio and Small Cap Value
Portfolios is distributed in the form of quarterly dividends. The Fixed Income
Portfolio distributes substantially all of its net investment income (exclusive
of capital gains) in the form of dividends declared daily and paid monthly. The
Fixed Income Portfolio's shares normally begin earning dividends within two
Business Days after their purchase order is effective.

Any capital gain is distributed at least annually. Distributions are paid in
additional shares unless the shareholder elects to take the payment in cash.
See "Dividends and Distributions."
<PAGE>

4
EXPENSE SUMMARY

SHAREHOLDER TRANSACTION EXPENSES EQUITY VALUE FUND
FIXED INCOME FUND
SMALL CAP VALUE FUND

<TABLE>
- --------------------------------------------------------------------------------
<S> <C>
Maximum Sales Load Imposed on Purchases.................................... None
Maximum Sales Load Imposed on Reinvested Dividends......................... None
Deferred Sales Load........................................................ None
Redemption Fees(1)......................................................... None
Exchange Fees.............................................................. None
================================================================================
</TABLE>
(1) A wire redemption charge, currently $10.00, is deducted from the amount of
a Federal Reserve wire redemption payment made at the request of a
shareholder.

ANNUAL OPERATING EXPENSES
<TABLE>
<CAPTION>
EQUITY VALUE FIXED SMALL CAP
(as a percentage of average net assets) FUND INCOME FUND VALUE FUND
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Advisory Fees (after fee waivers).......... .63% .00% .25%
12b-1 Fees................................. None None None
Other Expenses (after reimbursements)...... .47% .80% 1.15%
- --------------------------------------------------------------------------------
Total Operating Expenses (after fee waivers
and reimbursements)(2).................... 1.10% .80% 1.40%
================================================================================
</TABLE>
(2) The Adviser has, on a voluntary basis, waived a portion of its fee for each
Portfolio and agreed to reimburse certain expenses of the Fixed Income
Portfolio. The advisory fees shown reflect these voluntary waivers and
reimbursements. The Adviser reserves the right to terminate its waivers and
reimbursements at any time in its sole discretion. Absent fee waivers,
advisory fees for the Equity Value, Fixed Income and Small Cap Value
Portfolios would be .74%, .45% and .85%, respectively. Absent reimbursement
of expenses, Other Expenses for the Fixed Income Portfolio would be .95%.
Absent fee waivers and reimbursement of expenses total operating expenses
for the Equity Value, Fixed Income and Small Cap Value Portfolios would be
1.21%, 1.40% and 2.00%, respectively. Other Expenses for the Small Cap
Value Fund are based on estimated amounts for the current fiscal year. See
"The Adviser."

EXAMPLE
<TABLE>
- ------------------------------------------------------------------------------
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
An investor would pay the following expenses
on a $1,000 investment assuming (1) 5%
annual return and (2) redemption at the end
of each time period
CLOVER CAPITAL EQUITY FUND.................. $11 $35 $61 $134
CLOVER CAPITAL FIXED INCOME................. $ 8 $26 $44 $ 99
CLOVER CAPITAL SMALL CAP VALUE FUND......... $14 $44 -- --
==============================================================================
</TABLE>

THE EXAMPLE IS BASED UPON TOTAL OPERATING EXPENSES OF EACH PORTFOLIO AFTER
WAIVERS AND REIMBURSEMENTS AS SHOWN IN THE EXPENSE TABLE. THE EXAMPLE SHOULD
NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES, AND ACTUAL
EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. The purpose of the expense
table and example is to assist the investor in understanding the various costs
and expenses that may be directly or indirectly borne by shareholders of each
Portfolio. Additional information may be found under "The Adviser" and "The
Administrator."
<PAGE>

[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>

6
FINANCIAL HIGHLIGHTS

The following information has been audited by Arthur Andersen LLP, the Fund's
independent public accountants, as indicated in their report dated December 5,
1995 on the Fund's financial statements as of October 31, 1995 included in the
Fund's Statement of Additional Information under "Financial Information." This
table should be read in conjunction with the Fund's financial statements and
notes thereto.

For a Share Outstanding Throughout the Period

<TABLE>
<CAPTION>
INCOME FROM INVESTMENT LESS
OPERATIONS DISTRIBUTIONS
------------------------- ------------------
REALIZED
AND DISTRI- DISTRI-
NET ASSET NET UNREALIZED TOTAL BUTIONS BUTIONS
VALUE INVESTMENT GAINS OR FROM FROM NET FROM TOTAL
BEGINNING INCOME LOSSES ON INVESTMENT INVESTMENT CAPITAL DISRI-
OF PERIOD (LOSS) SECURITIES OPERATIONS INCOME GAINS BUTIONS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
<CAPTION>
--------------------------------
CLOVER CAPITAL EQUITY VALUE FUND
--------------------------------
11/01/94 to 10/31/95 $13.74 $0.24 $ 2.46 $ 2.70 $(0.22) $(0.93) $(1.15)
11/01/93 to 10/31/94 $11.94 $0.08 $ 2.01 $ 2.09 $(0.08) $(0.21) $(0.29)
11/01/92 to 10/31/93 $10.45 $0.10 $ 1.54 $ 1.64 $(0.10) $(0.05) $(0.15)
12/06/91(1) to 10/31/92 $10.00 $0.10 $ 0.44 $ 0.54 $(0.09) $ 0.00 $(0.09)
<CAPTION>
--------------------------------
CLOVER CAPITAL FIXED INCOME FUND
--------------------------------
11/01/94 to 10/31/95 $ 9.14 $0.58 $ 0.77 $ 1.35 $(0.58) $(0.02) $(0.60)
11/01/93 to 10/31/94 $10.85 $0.57 $(0.92) $(0.35) $(0.57) $(0.79) $(1.36)
11/01/92 to 10/31/93 $10.23 $0.61 $ 0.72 $ 1.33 $(0.61) $(0.10) $(0.71)
12/06/91(1) to 10/31/92 $10.00 $0.56 $ 0.23 $ 0.79 $(0.56) $ 0.00 $(0.56)
</TABLE>

(1) The Clover Capital Equity Value Fund and the Clover Capital Fixed Income
Fund commenced operations on December 6, 1991.

*Annualized
<PAGE>

7
THE ADVISORS' INNER CIRCLE FUND

<TABLE>
<CAPTION>
RATIOS AND SUPPLEMENTAL DATA
--------------------------------------------------------------------------
RATIO OF RATIO OF NET
EXPENSES INCOME (LOSS)
TO AVERAGE TO AVERAGE
NET ASSETS NET ASSETS
NET ASSETS RATIO OF (EXCLUDING RATIO OF NET (EXCLUDING
NET ASSET END OF EXPENSES FEE WAIVERS INCOME TO FEE WAIVERS PORTFOLIO
VALUE END TOTAL PERIOD TO AVERAGE AND AVERAGE NET AND TURNOVER
OF PERIOD RETURN (000) NET ASSETS CONTRIBUTIONS) ASSETS CONTRIBUTIONS) RATE
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$15.29 21.25 % $51,647 1.10% 1.20% 1.82% 1.72% 84.76%
$13.74 17.8 % $25,249 1.14% 1.30% 0.71% 0.55% 58.44%
$11.94 15.83 % $15,070 1.18% 1.51% 0.89% 0.56% 82.51%
$10.45 5.94 %* $ 9,005 1.20%* 2.09%* 1.15%* 0.26%* 31.00%
$ 9.89 15.27 % $14,685 0.80% 1.40% 6.13% 5.53% 35.84%
$ 9.14 (3.54)% $ 9,762 0.80% 1.46% 5.88% 5.22% 11.11%
$10.85 13.40 % $ 7,966 0.78% 1.29% 5.62% 5.11% 68.61%
$10.23 9.05 %* $ 8,982 0.80%* 1.76%* 6.28%* 5.32% 113.00%
</TABLE>
<PAGE>

8
THE FUND AND THE PORTFOLIOS

The Advisors' Inner Circle Fund (the "Fund") offers shares of a number of
diversified mutual funds, each of which is a separate series ("portfolio") of
the Fund. Each share of each mutual fund represents an undivided proportionate
interest in that mutual fund. This Prospectus offers shares of the Fund's
Clover Capital Equity Value Fund (the "Equity Value Portfolio"), Clover Capital
Fixed Income Fund (the "Fixed Income Portfolio") and Clover Capital Small Cap
Value Portfolio (the "Small Cap Value Portfolio"). Information regarding the
other mutual funds in the Fund is contained in separate prospectuses that may
be obtained by calling 1-800-932-7781.

INVESTMENT OBJECTIVES

EQUITY VALUE PORTFOLIO

The Equity Value Portfolio seeks long-term total return.

FIXED INCOME PORTFOLIO

The Fixed Income Portfolio seeks a high level of income consistent with
reasonable risk to capital.

SMALL CAP VALUE PORTFOLIO

The Small Cap Value Portfolio seeks long-term total return.

There can be no assurance that any Portfolio will be able to achieve its
investment objective.

INVESTMENT POLICIES

EQUITY VALUE PORTFOLIO

The Equity Value Portfolio will invest primarily in equity securities that
Clover Capital Management, Inc. (the "Adviser") believes to be undervalued
relative to the market or their historic valuation. The Adviser uses several
valuation criteria to determine if a security is undervalued, including price-
to-earnings ratios, price-to-cash flow ratios, price-to-sales ratios, and
price-to-book value ratios. In addition, the Adviser examines "hidden values"
that are not obvious in a company's financial reports, focusing on finding the
current asset values or current transfer values of assets held by the company.

Under normal market conditions, the Equity Value Portfolio invests at least 70%
and up to 100% of its net assets in a diversified portfolio of equity
securities, including common stocks, both debt securities and preferred stocks
convertible into common stocks, and American Depositary Receipts ("ADRs") (up
to 20% of the Equity Value Portfolio's net assets). In addition to these equity
securities, the Equity Value Portfolio may also invest up to 5% of its net
assets in each of warrants and rights to purchase common stocks, and up to 10%
of its net assets in real estate investment trusts ("REITs"). Assets of the
Equity Value Portfolio not invested in the equity securities described above
may be invested in non-convertible fixed income securities and money market
instruments as described below.

All of the equity securities (including ADRs) in which the Equity Value
Portfolio invests are traded on registered exchanges or the over-the-counter
market in the United States.
<PAGE>

9
During periods when, or under circumstances where, the Adviser believes that
the return on such securities may equal or exceed the return on equity
securities, the Equity Value Portfolio may invest up to 25% of its net assets
in non-convertible fixed income securities consisting of corporate debt
securities and obligations issued or guaranteed as to principal and interest by
the U.S. Government or its agencies or instrumentalities. The Equity Value
Portfolio may invest in such securities without regard to their term or rating
and may, from time to time, invest in corporate debt securities rated below
investment grade, i.e., rated lower than BBB by Standard & Poor's Corporation
("S&P") or Baa by Moody's Investor Service, Inc. ("Moody's") or unrated
securities of comparable quality as determined by the Adviser. In addition, the
Equity Value Portfolio may invest in securities rated D by S&P. Debt rated D is
in default, and payment of interest and/or repayment of principal is in
arrears.

Under normal circumstances up to 30% of the Equity Value Portfolio's assets may
be invested in the money market instruments described below in order to
maintain liquidity, or if the Adviser determines that securities meeting the
Equity Value Portfolio's investment objective and policies are not otherwise
reasonably available for purchase.

For temporary defensive purposes during periods when the Adviser determines
that market conditions warrant, the Equity Value Portfolio may invest up to
100% of its assets in money market instruments (including securities issued or
guaranteed by the U.S. Government, its agencies or instrumentalities;
certificates of deposit, time deposits and bankers' acceptances issued by banks
or savings and loan associations having net assets of at least $500 million as
of the end of their most recent fiscal year; commercial paper rated A-1 by S&P
or Prime-1 by Moody's; repurchase agreements involving such securities; and, to
the extent permitted by applicable law, shares of other investment companies
investing solely in money market instruments) and in cash.

FIXED INCOME PORTFOLIO

Under normal market conditions, the Fixed Income Portfolio invests at least 70%
of its net assets in the following fixed income securities: (i) obligations
issued or guaranteed as to principal and interest by the U.S. Government or its
agencies or instrumentalities ("U.S. Government securities"); (ii) corporate
bonds and debentures rated in one of the four highest rating categories; and
(iii) mortgage-backed securities that are collateralized mortgage obligations
("CMOs") or real estate mortgage investment conduits ("REMICs") rated in one of
the two highest rating categories. The Fixed Income Portfolio will invest in
such corporate bonds and debentures, CMOs or REMICs only if, at the time of
purchase, the security either has the requisite rating from S&P or Moody's or
is unrated but of comparable quality as determined by the Adviser. Governmental
private guarantees do not extend to the securities' value, which is likely to
vary inversely with fluctuations in interest rates. Corporate bonds rated B
generally lack characteristics of desirable investment, and assurance of
interest and principal payments or of maintenance of other terms of the
contract over any long period of time may be small.

The Fixed Income Portfolio may invest its remaining assets in the following
securities: (i) the money market instruments described below; (ii) asset-backed
securities rated A or higher by S&P or Moody's; (iii) debt securities rated
below investment grade (i.e., rated lower than BBB by S&P or Baa by Moody's),
but not lower than B- by S&P or B3 by Moody's, or if unrated, determined by the
Adviser to be of comparable quality at the time of purchase (up to 15% of
<PAGE>

10
the Fixed Income Portfolio's net assets including downgraded securities); (iv)
debt securities convertible into common stocks (up to 10% of the Fixed Income
Portfolio's net assets); (v) U.S. dollar denominated fixed income securities
issued by foreign corporations or issued or guaranteed by foreign governments,
their political subdivisions, agencies or instrumentalities; and (vi) U.S.
dollar denominated obligations of supranational entities traded in the United
States. For additional information on corporate bond ratings, see the Appendix
to the Statement of Additional Information.

The relative proportions of the Fixed Income Portfolio's net assets invested in
the different types of permissible investments will vary from time to time
depending upon the Adviser's assessment of the relative market value of the
sectors in which the Fixed Income Portfolio invests. In addition, the Fixed
Income Portfolio may purchase securities that are trading at a discount from
par when the Adviser believes there is a potential for capital appreciation.
The Adviser does not seek to achieve the Fixed Income Portfolio's investment
objective by forecasting changes in the interest rate environment.

In the event any security owned by the Fixed Income Portfolio is downgraded
below the rating categories set forth above, the Adviser will review the
security and determine whether to retain or dispose of that security.

The Fixed Income Portfolio may enter into forward commitments or purchase
securities on a when-issued basis, and may invest in variable or floating rate
obligations.

For temporary defensive purposes during periods when the Adviser determines
that the market conditions warrant, the Fixed Income Portfolio may invest up to
100% of its net assets in money market instruments (including securities issued
or guaranteed by the U.S. Government, its agencies or instrumentalities;
certificates of deposit, time deposits and bankers' acceptances issued by banks
or savings & loan associations having net assets of at least $500 million as of
the end of their most recent fiscal year; commercial paper rated A-1 by S&P and
Prime-1 by Moody's; repurchase agreements involving any of the foregoing
securities; and, to the extent permitted by applicable law, shares of other
investment companies investing solely in money market instruments) and may hold
a portion of its assets in cash.

The Fixed Income Portfolio expects to maintain a dollar-weighted average
portfolio maturity of five to ten years.

SMALL CAP VALUE PORTFOLIO

Under normal market conditions, the Small Cap Value Portfolio invests at least
75% and up to 100% of its total assets in a diversified portfolio of equity
securities of U.S. issuers that have market capitalizations of $750 million or
less at the time of purchase, including common stocks, warrants and rights to
subscribe to common stocks, equity interests issued by real estate investment
trusts ("REITs") and both debt securities and preferred stocks convertible into
common stocks. The Small Cap Value Portfolio may invest in such convertible
debt securities without regard to their term or rating and may, from time to
time, invest in corporate debt securities rated below investment grade, i.e.,
rated lower than BBB by Standard & Poor's Corporation ("S&P") or Baa by Moody's
Investor Service, Inc. ("Moody's") or unrated securities of comparable quality
as determined by Clover Capital Management, Inc. (the "Adviser"). In addition,
the Small Cap Value Portfolio may invest in securities rated D by S&P. Debt
rated D is in default, and payment of interest and/or repayment of principal is
in arrears.
<PAGE>

The Adviser employs database screening techniques to search the universe of
domestic public companies for stocks trading in the bottom 20% of valuation
parameters such as stock price-to-book value, price-to-cash flow, price-to-
earnings and price-to-sales. From these stocks the Adviser selects a
diversified group of securities for investment by utilizing additional
screening and selection strategies to identify the companies that the Adviser
believes are more financially stable. In addition, the Portfolio may include
holdings in issuers that may not have been identified during the initial
screening process but that the Adviser has identified using its value oriented
fundamental research techniques. In addition, the Portfolio may invest up to
10% of its net assets in American Depositary Receipts ("ADRs").

All of the equity securities (including ADRs) in which the Portfolio invests
are traded on registered exchanges or the over-the-counter market in the
United States.

Any remaining assets may be invested in (i) the equity securities described
above of U.S. issuers that have market capitalizations exceeding $750 million
at the time of purchase, and (ii) money market instruments, including
securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities; certificates of deposit, time deposits and bankers'
acceptances issued by banks or savings and loan associations having net assets
of at least $500 million as of the end of their most recent fiscal year;
commercial paper rated A-1 by S&P or Prime-1 by Moody's; repurchase agreements
involving such securities; and, to the extent permitted by applicable law,
shares of other investment companies investing solely in money market
instruments. In addition, the Portfolio may invest up to 15% of its net assets
in illiquid securities, although it has no present intention to do so.

For temporary defensive purposes during periods when the Adviser determines
that market conditions warrant, the Portfolio may invest up to 100% of its
assets in the money market instruments described above or in cash.

RISK FACTORS

EQUITY SECURITIES--Investments in equity securities in general are subject to
market risks that may cause their prices to fluctuate over time. The value of
securities, such as warrants or convertible debt, convertible into equity
securities is also affected by prevailing interest rates, the credit quality
of the issuer and any call provision. Fluctuations in the value of equity
securities in which the Portfolio invests will cause the net asset value of
that Portfolio to fluctuate. An investment in the Equity Value Portfolio may
therefore be more suitable for long-term investors who can bear the risk of
short-term principal fluctuations.

The Small Cap Value Portfolio invests in the securities of smaller companies.
Investments in small capitalization companies involves greater risk than is
customarily associated with larger, more established companies due to the
greater business risks of small size, limited markets and financial resources,
narrow product lines and the frequent lack of depth of management. The
securities of small companies are often traded over-the-counter and may not be
traded in volumes typical on a national securities exchange. Consequently, the
securities of smaller companies may have limited market stability, may be less
liquid, and may be subject to more abrupt or erratic market movements than
securities of larger, more established growth companies or the market averages
in general. As a result, the value of the shares of the Portfolio can be
expected to fluctuate more than the value of shares of an investment company
investing solely in larger, more established companies.
<PAGE>

12
FIXED INCOME SECURITIES--The market value of the fixed income investments in
which each Portfolio may invest will change in response to interest rate
changes and other factors. During periods of falling interest rates, the values
of outstanding fixed income securities generally rise. Conversely, during
periods of rising interest rates, the values of such securities generally
decline. Changes by recognized agencies in the rating of any fixed income
security and in the ability of an issuer to make payments of interest and
principal also affect the value of these investments. Changes in the value of
these securities will not necessarily affect cash income derived from these
securities but will affect each Portfolio's net asset value. Each Portfolio may
invest in securities rated in the fourth highest category by S&P or Moody's;
such securities, while still investment grade, are considered to have
speculative characteristics.

Securities below investment grade are high risk, high yield securities known as
"junk bonds"; such securities involve greater risk of default or price declines
than investments in investment grade securities due to changes in the issuer's
creditworthiness and the outlook for economic growth. The market for these
securities may be thinner and less active, causing market price volatility and
limited liquidity in the secondary market. These factors may limit each
Portfolio's ability to sell such securities at their fair market value. In
addition, the market for these securities may also be adversely affected by
legislative and regulatory developments. Credit quality in the junk bond market
can change suddenly and unexpectedly, and even recently issued credit ratings
may not fully reflect the actual risks imposed by a particular security. For
these reasons, it is each Portfolio's policy not to rely primarily on ratings
issued by established credit rating agencies, but to utilize such ratings in
conjunction with the Adviser's own independent and ongoing review of credit
quality.

SECURITIES OF FOREIGN ISSUERS--Securities of foreign issuers are subject to
investment risks that differ that differ in some respects from those related to
investments in securities of U.S. issuers. Such risks include future adverse
political and economic developments, possible imposition of withholding taxes
on income, possible seizure, nationalization or expropriation of foreign
deposits, possible establishment of exchange controls or taxation at the source
or greater fluctuation in value due to changes in exchange rates. Foreign
issuers of securities often engage in business practices different from those
of domestic issuers of similar securities, and there may be less information
publicly available about foreign issuers. In addition, foreign issuers are,
generally speaking, subject to less government supervision and regulation and
different accounting treatment than are those in the United States.

MORTGAGE-BACKED SECURITIES--The mortgage-backed securities ("MBSs") in which
the Fixed Income Portfolio may invest are subject to prepayment of the
underlying mortgages. During periods of declining interest rates, prepayment of
mortgages underlying MBSs can be expected to accelerate. When the MBSs held by
the Fixed Income Portfolio are prepaid, the Fixed Income Portfolio must
reinvest the proceeds in securities the yield of which reflects prevailing
interest rates, which may be lower than the yield on the prepaid MBS.

REITs--The value of interests in REITs may be affected by changes in (i) the
value of the property owned, (ii) the quality of the mortgages held by the
trust, and (iii) interest rates.

GOVERNMENT SECURITIES--Any guaranty by the U.S. Government, its agencies or
instrumentalities of the securities in which the Fixed Income Portfolio invests
guarantees only the payment of principal and interest on the guaranteed
security and does not guarantee the yield or value of that security or the
yield or value of shares of the Fixed Income Portfolio.
<PAGE>

13
For a description of certain permitted investments, see "Description of
Permitted Investments and Risk Factors" and "Description of Permitted
Investments" in the Statement of Additional Information.

INVESTMENT LIMITATIONS

The investment objectives and the investment limitations set forth here and in
the Statement of Additional Information are fundamental policies of each
Portfolio. Fundamental policies cannot be changed with respect to a Portfolio
without the consent of the holders of a majority of that Portfolio's
outstanding shares.

NO PORTFOLIO MAY:

1. Purchase securities of any issuer (except securities issued or guaranteed by
the U.S. Government, its agencies or instrumentalities and repurchase
agreements involving such securities) if as a result more than 5% of the total
assets of the Portfolio would be invested in the securities of such issuer.
This restriction applies to 75% of the Portfolio's total assets.

2. Purchase any securities which would cause 25% or more of the total assets of
the Portfolio to be invested in the securities of one or more issuers
conducting their principal business activities in the same industry, provided
that this limitation does not apply to investments in obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities and
repurchase agreements involving such securities. For purposes of this
limitation, (i) utility companies will be classified according to their
services, for example, gas distribution, gas transmission, electric and
telephone will each be considered a separate industry; (ii) financial service
companies will be classified according to the end users of their services, for
example, automobile finance, bank finance and diversified finance will each be
considered a separate industry; and (iii) in the case of the Fixed Income and
Small Cap Value Portfolios, supranational entities will be considered to be a
separate industry.

3. Borrow money except for temporary or emergency purposes and then only in an
amount not exceeding 10% of the value of its total assets.

The foregoing percentages apply at the time of the purchase of a security.
Additional investment limitations are set forth in the Statement of Additional
Information.

THE ADVISER

Clover Capital Management, Inc. is a professional investment management firm
founded in 1984 by Michael Edward Jones and Geoffrey Harold Rosenberger, who
are Managing Directors of the Adviser and control all of the Adviser's
outstanding voting stock. As of December 31, 1995, the Adviser had
discretionary management authority with respect to approximately $1.497 billion
of assets. The principal business address of the Adviser is 11 Tobey Village
Office Park, Pittsford, New York 14534.

The Adviser serves as each Portfolio's investment adviser under an investment
advisory agreement (the "Advisory Agreement") with the Fund. Under the Advisory
Agreement, the Adviser makes the investment decisions for the assets of each
Portfolio and continuously reviews, supervises and administers each Portfolio's
investment program, subject to the supervision of, and policies established by,
the Trustees of the Fund. In addition to advising
<PAGE>

14
the Portfolios, the Adviser provides advisory services to pension plans,
religious and educational endowments, corporations, 401(k) plans, profit
sharing plans, individual investors and trusts and estates.

The Equity Value Portfolio has been managed by a committee led by Michael E.
Jones and Paul W. Spindler. For the past 5 years, Mr. Jones has been Managing
Director for the Adviser. For the past 5 years Mr. Spindler has been a Vice
President of Investments for the Adviser.

The Fixed Income Portfolio has been managed by a committee led by Richard J.
Huxley and Paul W. Spindler. For the past five years Richard Huxley has been
the Executive Vice President and Fixed Income Manager for the Adviser. For the
past 5 years Paul Spindler has been a Vice President of Investments for the
Adviser.

The Small Cap Value Portfolio has, since its inception, been managed by a
committee of research professionals led by Michael E. Jones, CFA, and Lawrence
Creatura. Mr. Jones is a co-founder of the Adviser and for the past five years
has been the Managing Director of the Adviser. For the past two years Mr.
Creatura has been a Vice President for Investments for the Adviser. For the
previous three years he was a Laser Systems Engineer/Researcher for Laser
Surge, Inc.

For its services, the Adviser is entitled to a fee, which is calculated daily
and paid monthly, at an annual rate of .74%, .85% and .45% of the average daily
net assets of the Equity Value, Fixed Income Portfolios, and Small Cap Value,
respectively. The Adviser has voluntarily agreed to waive all or a portion of
its fees and/or to reimburse Portfolio expenses in order to limit total
operating expenses of the Equity Value and Fixed Income Portfolios to an annual
rate of not more than 1.20% and .80%, respectively, of average daily net assets
when net assets are below $20 million and to not more than 1.10% and .75%,
respectively, when net assets are $20 million or more and to limit total
operating expenses of the Small Cap Value Fund to 1.40% of the Portfolio's
average daily net assets. The Adviser reserves the right, in its sole
discretion, to terminate its voluntary fee waiver and any reimbursement at any
time. For the fiscal year ended October 31, 1995, the Adviser received a fee
(after partial fee waivers) equal to .63% of the Equity Value Portfolio's
average daily net assets and waived all fees due it from the Fixed Income
Portfolio.

THE ADMINISTRATOR

SEI Financial Management Corporation (the "Administrator"), a wholly-owned
subsidiary of SEI Corporation ("SEI"), provides the Fund with administrative
services, including regulatory reporting and all necessary office space,
equipment, personnel and facilities.

For these administrative services, the Administrator is entitled to a fee from
each Portfolio, which is calculated daily and paid monthly, at an annual rate
of .20% of the average daily net assets of each Portfolio. However, each
Portfolio pays the Administrator a minimum annual fee of $50,000. The
administration fee rate each Portfolio pays will decline to an annual rate of
.20% of the Portfolio's average daily net assets at net asset levels of $25
million and above.

The Administrator also serves as shareholder servicing agent for each Portfolio
under a shareholder servicing agreement with the Fund.
<PAGE>

THE TRANSFER AGENT

DST Systems Inc., 210 West 10th Street, Kansas City, Missouri 64105 (the
"Transfer Agent") serves as the transfer agent and dividend disbursing agent
for the Fund under a transfer agency agreement with the Fund.

THE DISTRIBUTOR

SEI Financial Services Company (the "Distributor"), a wholly owned subsidiary
of SEI, serves as the Fund's distributor pursuant to a distribution agreement.
The Distributor does not receive compensation for distribution services for the
shares of any Portfolio.

PORTFOLIO TRANSACTIONS

The Advisory Agreement authorizes the Adviser to select broker-dealers that
will execute the purchase or sale of investment securities for each Portfolio
and directs the Adviser to seek to obtain the best net results. Certain broker-
dealers assist their clients in the purchase of shares from the Distributor and
charge a fee for this service in addition to each Portfolio's public offering
price.

The Adviser may, consistent with the interests of the Equity Value Portfolio,
select brokers on the basis of the research, statistical and pricing services
they provide to the Portfolio. A commission paid to such brokers may be higher
than that which another qualified broker would have charged for effecting the
same transaction, provided that such commissions are in compliance with the
Securities Exchange Act of 1934, as amended, and that the Adviser determines in
good faith that the commission is reasonable in terms of either the transaction
or the overall responsibility of the Adviser to the Portfolio and the Adviser's
other clients.

Each Portfolio may execute brokerage or other agency transactions through the
Distributor for which the Distributor may receive usual and customary
compensation.

Because shares of each Portfolio are not marketed through intermediary broker-
dealers, it is not each Portfolio's practice to allocate brokerage or effect
principal transactions with the broker-dealers on the basis of sales of shares
that may be made through such firms. However, the Adviser may place Portfolio
orders with qualified broker-dealers who refer clients to each Portfolio.

Some securities considered for investment by a Portfolio may also be
appropriate for other accounts and/or clients served by that Adviser. If the
purchase or sale of securities consistent with the investment policies of the
Portfolio and another of the Adviser's accounts and/or clients are considered
at or about the same time, transactions in such securities will be allocated
among the Portfolio and the other accounts and/or clients in a manner deemed
equitable by the Adviser.

PURCHASE AND REDEMPTION OF SHARES

Investors may purchase and redeem shares of either Portfolio directly through
the Transfer Agent, P.O. Box 419009, Kansas City, Missouri 64141-6009 by mail
or wire transfer. All shareholders may place orders by telephone; when market
conditions are extremely busy, it is possible that investors may experience
difficulties placing orders by telephone and may
<PAGE>

16
wish to place orders by mail. Purchases and redemptions of shares of a
Portfolio may be made on any Business Day. Shares of a Portfolio are offered
only to residents of states in which such shares are eligible for purchase.

The minimum initial investment in either of the Portfolios is $2,000, and
subsequent purchases must be at least $100. The Distributor may waive these
minimums at its discretion. No minimum applies to subsequent purchases effected
by dividend reinvestment. As described below, subsequent purchases through each
Portfolio's Systematic Investment Plan must be at least $100.

PURCHASES BY MAIL

An account may be opened by mailing a check or other negotiable bank draft
(payable to the name of the appropriate Portfolio) for $2,000 or more, together
with a completed Account Application to the Transfer Agent, P.O. Box 419009,
Kansas City, Missouri 64141-6009. Subsequent investments may also be mailed
directly to the Transfer Agent.

PURCHASES BY WIRE TRANSFER

Shareholders having an account with a commercial bank that is a member of the
Federal Reserve System may purchase shares of a Portfolio by requesting their
bank to transmit funds by wire to: United Missouri Bank of Kansas, N.A.; ABA
#10-10-00695; for Account Number 98-7052-396-5; Further Credit: (Name of the
appropriate Portfolio. The shareholder's name and account number must be
specified in the wire.)

Initial Purchases: Before making an initial investment by wire, an investor
must first telephone 1-800-808-4921 to be assigned an account number. The
investor's name, account number, taxpayer identification number or Social
Security number, and address must be specified in the wire. In addition, an
Account Application should be promptly forwarded to: DST Systems, Inc., P.O.
Box 419009, Kansas City, Missouri 64141-6009.

Subsequent Purchases: Additional investments may be made at any time through
the wire procedures described above, which must include a shareholder's name
and account number. The investor's bank may impose a fee for investments by
wire.

GENERAL INFORMATION REGARDING PURCHASES

A purchase order will be effective as of the day received by the Transfer Agent
if the Transfer Agent receives the order and payment by check or readily
available funds before 4:00 p.m., Eastern time. The purchase price of shares of
a Portfolio is that Portfolio's net asset value per share next determined after
a purchase order is effective. Purchases will be made in full and fractional
shares of a Portfolio calculated to three decimal places. The Fund will not
issue certificates representing shares of either Portfolio.

If a check received for the purchase of shares does not clear, the purchase
will be cancelled, and the investor could be liable for any losses or fees
incurred. The Fund reserves the right to reject a purchase order when the Fund
determines that it is not in the best interest of the Portfolio or its
shareholders to accept such order.

Shares of each Portfolio may be purchased in exchange for securities to be
included in that Portfolio, subject to the Adviser's or Administrator's
determination that these securities are
<PAGE>

17
acceptable. Securities accepted in such an exchange will be valued at their
market value. All accrued interest and subscription or other rights that are
reflected in the market price of accepted securities at the time of valuation
become the property of that Portfolio and must be delivered by the shareholder
to that Portfolio upon receipt from the issuer.

The Adviser or Administrator will not accept securities in exchange for
Portfolio shares unless (1) such securities are appropriate for the Portfolio
at the time of the exchange; (2) the shareholder represents and agrees that all
securities offered to the Portfolio are not subject to any restrictions upon
their sale by the Portfolio under the Securities Act of 1933, as amended, or
otherwise; and (3) prices are available from an independent pricing service
approved by the Fund's Board of Trustees.

SYSTEMATIC INVESTMENT PLAN--A shareholder may also arrange for periodic
additional investments in a Portfolio through automatic deductions by Automated
Clearing House ("ACH") transactions from a checking or savings account by
completing the appropriate section of the Account Application form. This
Systematic Investment Plan is subject to account minimum initial purchase
amounts and a minimum pre-authorized investment amount of $100 per month. An
Account Application form may be obtained by calling 1-800-932-7781.

EXCHANGES

Shareholders of one Portfolio may exchange their shares for shares of each
other Portfolio. Exchanges are made at net asset value. An exchange is
considered a sale of shares and will result in capital gain or loss for federal
income tax purposes. The shareholder must have received a current prospectus
for the new Portfolio before any exchange will be effected, and the exchange
privilege may be exercised only in those states where shares of the new
Portfolio may legally be sold. If the Transfer Agent receives exchange
instructions in writing or by telephone (an "Exchange Request") in good order
by 4:00 p.m., Eastern time, on any Business Day, the exchange will be effected
that day. The liability of the Fund or the Transfer Agent for fraudulent or
unauthorized telephone instructions may be limited as described below. The Fund
reserves the right to modify or terminate this exchange offer on 60 days'
notice.

REDEMPTIONS

Redemption orders received by the Transfer Agent prior to 4:00 p.m., Eastern
time on any Business Day will be effective that day. The redemption price of
shares is the net asset value per share of that Portfolio next determined after
the redemption order is effective. Payment on redemption will be made as
promptly as possible and, in any event, within seven days after the redemption
order is received, provided, however, that redemption proceeds for shares
purchased by check (including certified or cashier's checks) will be forwarded
only upon collection of payment for such shares; collection of payment may take
up to 15 or more days from the date of purchase. Shareholders may not close
their accounts by telephone; redemption or exchange orders closing an account
must be sent in writing to the Transfer Agent.

Shareholders may receive redemption payments in the form of a check or by
Federal Reserve wire transfer or ACH wire transfer. There is no charge for
having a check for redemption proceeds mailed. The custodian will deduct a wire
charge, currently $10.00, from the amount
<PAGE>

18
of a Federal Reserve wire redemption payment made at the request of a
shareholder. Shareholders cannot redeem shares of a Portfolio by Federal
Reserve wire on federal holidays restricting wire transfers. The Fund does not
charge for ACH wire transfers; however, such transactions will not be posted to
a shareholder's bank account until the second Business Day following the
transaction.

SYSTEMATIC WITHDRAWAL PLAN--Each Portfolio offers a Systematic Withdrawal Plan
("SWP") for shareholders who wish to receive regular distributions from their
account. Upon commencement of the SWP, the account must have a current value of
$2,000 or more. Shareholders may elect to receive automatic payments via ACH
wire transfers of $100 or more on a monthly, quarterly, semi-annual or annual
basis. An application form for SWP may be obtained by calling 1-800-932-7781.

Shareholders should realize that if withdrawals exceed income dividends, their
invested principal in the account will be depleted. Thus, depending on the
frequency and amounts of the withdrawal payments and/or any fluctuations in the
net asset value per share, their original investment could be exhausted
entirely. To participate in the SWP, shareholders must have their dividends
automatically reinvested. Shareholders may change or cancel the SWP at any
time, upon written notice to the Transfer Agent.

Neither the Fund nor the Transfer Agent will be responsible for the
authenticity of the redemption or exchange instructions received by telephone
if it reasonably believes those instructions to be genuine. The Fund and the
Transfer Agent will each employ reasonable procedures to confirm that telephone
instructions are genuine, and may be liable for losses resulting from
unauthorized or fraudulent telephone transactions if it does not employ those
procedures. Such procedures may include taping of telephone conversations.

The right of redemption may be suspended or the date of payment of redemption
proceeds postponed during certain periods as set forth more fully in the
Statement of Additional Information.

The net asset value per share of a Portfolio is determined by dividing the
total market value of that Portfolio's investments and other assets, less any
liabilities, by the total outstanding shares of that Portfolio. Net asset value
per share is determined daily as of the close of business of the New York Stock
Exchange (normally, 4:00 p.m., Eastern time) on any Business Day. Each
Portfolio will use a pricing service to provide market quotations. The pricing
service may use a matrix system of valuation which considers factors such as
securities prices, yield features, call features, ratings and developments
relating to a specific security.

PERFORMANCE

From time to time, a Portfolio may advertise its yield and total return. These
figures will be based on historical earnings and are not intended to indicate
future performance. No representation can be made regarding actual future
yields or returns. The yield of a Portfolio refers to the annualized income
generated by an investment in the Portfolio over a specified 30-day period. The
yield is calculated by assuming that the same amount of income generated by the
investment during that period is generated in each 30-day period over one year
and is shown as a percentage of the investment.
<PAGE>

19
The total return of a Portfolio refers to the average compounded rate of
return on a hypothetical investment, for designated time periods (including
but not limited to the period from which the Portfolio commenced operations
through the specified date), assuming that the entire investment is redeemed
at the end of each period and assuming the reinvestment of all dividend and
capital gain distributions.

A Portfolio may periodically compare its performance to that of other mutual
funds tracked by mutual fund rating services (such as Lipper Analytical), or
by financial and business publications and periodicals, broad groups of
comparable mutual funds, unmanaged indices, which may assume investment of
dividends but generally do not reflect deductions for administrative and
management costs, or other investment alternatives. A Portfolio may quote
Morningstar, Inc., a service that ranks mutual funds on the basis of risk-
adjusted performance. A Portfolio may quote Ibbotson Associates of Chicago,
Illinois, which provides historical returns of the capital markets in the U.S.
A Portfolio may use long-term performance of these capital markets to
demonstrate general long-term risk versus reward scenarios and could include
the value of a hypothetical investment in any of the capital markets. A
Portfolio may also quote financial and business publications and periodicals
as they relate to fund management, investment philosophy, and investment
techniques.

A Portfolio may quote various measures of volatility and benchmark correlation
in advertising and may compare these measures to those of other funds.
Measures of volatility attempt to compare historical share price fluctuations
or total returns to a benchmark while measures of benchmark correlation
indicate how valid a comparative benchmark might be. Measures of volatility
and correlation are calculated using averages of historical data and cannot be
calculated precisely.

Additional performance information regarding each Portfolio is set forth in
the 1995 Annual Report to Shareholders, available upon request and without
charge by calling 1-800-932-7781.

TAXES

The following summary of federal income tax consequences is based on current
tax laws and regulations, which may be changed by legislative, judicial or
administrative action.

No attempt has been made to present a detailed explanation of the federal,
state or local income tax treatment of a Portfolio or its shareholders.
Accordingly, shareholders are urged to consult their tax advisers regarding
specific questions as to federal, state and local income taxes.

TAX STATUS OF THE PORTFOLIOS:

Each Portfolio is treated as a separate entity for federal income tax purposes
and is not combined with the Fund's other portfolios. Each Portfolio intends
to continue to qualify for the special tax treatment afforded regulated
investment companies as defined under Subchapter M of the Internal Revenue
Code of 1986, as amended (the "Code). So long as a Portfolio qualifies for
this special tax treatment, it will be relieved of federal income tax on that
part of its net investment income and net capital gain (the excess of net
long-term capital gain over net short-term capital loss) which it distributes
to shareholders.
<PAGE>

TAX STATUS OF DISTRIBUTIONS:

Each Portfolio will distribute all of its net investment income (including, for
this purpose, net short-term capital gain) to shareholders. Dividends from net
investment income will be taxable to shareholders as ordinary income whether
received in cash or in additional shares. Distributions from net investment
income will qualify for the dividends-received deduction for corporate
shareholders only to the extent such distributions are derived from dividends
paid by domestic corporations. Dividends of the Fixed Income Portfolio are not
expected to qualify. Any net capital gains will be distributed annually and
will be taxed to shareholders as long-term capital gains, regardless of how
long the shareholder has held shares. Each Portfolio will make annual reports
to shareholders of the federal income tax status of all distributions,
including the amount of dividends eligible for the dividends-received
deduction.

Certain securities purchased by a Portfolio (such as STRIPS, defined in
"Description of Permitted Investments and Risk Factors") are sold with original
issue discount and thus do not make periodic cash interest payments. For a
further description of such securities, see "Description of Permitted
Investments and Risk Factors" below. Each Portfolio will be required to include
as part of its current income the accrued discount on such obligations even
though the Portfolio has not received any interest payments on such obligations
during that period. Because each Portfolio distributes all of its net
investment income to its shareholders, a Portfolio may have to sell portfolio
securities to distribute such accrued income, which may occur at a time when
the Adviser would not have chosen to sell such securities and which may result
in a taxable gain or loss.

Income received on direct U.S. obligations is exempt from income tax at the
state level when received directly and may be exempt, depending on the state,
when received by a shareholder from a Portfolio provided certain state-specific
conditions are satisfied. A Portfolio will inform shareholders annually of the
percentage of income and distributions derived from direct U.S. obligations.
Shareholders should consult their tax advisers to determine whether any portion
of the income dividends received from a Portfolio is considered tax exempt in
their particular state.

Dividends declared by a Portfolio in October, November or December of any year
and payable to shareholders of record on a date in one of those months will be
deemed to have been paid by the Portfolio and received by the shareholders on
December 31 of that year, if paid by the Portfolio at any time during the
following January.

Each Portfolio intends to make sufficient distributions prior to the end of
each calendar year to avoid liability for federal excise tax.

Sale, exchange or redemption of a Portfolio's shares is a taxable event to the
shareholder.

Income derived by a Portfolio from securities of foreign issuers may be subject
to foreign withholding taxes. A Portfolio will not be able to elect to treat
shareholders as having paid their proportionate share of such foreign taxes.

GENERAL INFORMATION

THE FUND

The Fund, an open-end investment management company that offers shares of
diversified portfolios, was organized under Massachusetts law as a business
trust under a Declaration of
<PAGE>

21
Trust dated July 18, 1991. The Declaration of Trust permits the Fund to offer
separate series ("portfolios") of shares. All consideration received by the
Fund for shares of any portfolio and all assets of such portfolio belong to
that portfolio and would be subject to liabilities related thereto. The Fund
reserves the right to create and issue shares of additional portfolios.

Each Portfolio pays its (i) operating expenses, including fees of its service
providers, expenses of preparing prospectuses, proxy solicitation material and
reports to shareholders, costs of custodial services and registering its shares
under federal and state securities laws, pricing and insurance expenses,
brokerage costs, interest charges, taxes and organization expenses and (ii) pro
rata share of the Fund's other expenses, including audit and legal expenses.
Each Portfolio's expense ratios are disclosed under "Financial Highlights."

TRUSTEES OF THE FUND

The management and affairs of the Fund are supervised by the Trustees under the
laws of the Commonwealth of Massachusetts. The Trustees have approved contracts
under which, as described above, certain companies provide essential management
services to the Fund.

VOTING RIGHTS

Each share held entitles the shareholder of record to one vote. Each Portfolio
will vote separately on matters relating solely to it. As a Massachusetts
business trust, the Fund is not required to hold annual meetings of
shareholders but shareholders' approval will be sought for certain changes in
the operation of the Fund and for the election of Trustees under certain
circumstances. In addition, a Trustee may be removed by the remaining Trustees
or by shareholders at a special meeting called upon written request of
shareholders owning at least 10% of the outstanding shares of the Fund. In the
event that such a meeting is requested, the Fund will provide appropriate
assistance and information to the shareholders requesting the meeting.

REPORTING

The Fund issues unaudited financial information semiannually and audited
financial statements annually for each Portfolio. The Fund also furnishes
periodic reports and, as necessary, proxy statements to shareholders of record.

SHAREHOLDER INQUIRIES

Shareholder inquiries should be directed to The Advisors' Inner Circle Fund,
P.O. Box 419009, Kansas City, Missouri 64141-6009 or directed to 1-800-932-
7781. Purchase, redemption and exchange orders should be placed with the
Transfer Agent at the same address or by calling 1-800-808-4921.

DIVIDENDS AND DISTRIBUTIONS

Substantially all of the net investment income (excluding capital gain) of the
Equity Value Portfolio is distributed in the form of dividends to shareholders
of record on the last Business Day of each quarter. The Fixed Income Portfolio
declares dividends of substantially all of its net investment income (exclusive
of capital gain) daily and distributes such dividends on the first Business Day
of each month. Shares of the Fixed Income Portfolio purchased begin earning
dividends on the Business Day following receipt of payment by the Transfer
Agent. Normally, this will occur within two Business Days after an order is
effective. If any capital gain is realized for either Portfolio, substantially
all of it will be distributed at least annually.
<PAGE>

Shareholders automatically receive all income dividends and capital gain
distributions in additional shares, unless the shareholder has elected to take
such payment in cash. Shareholders may change their election by providing
written notice to the Transfer Agent at least 15 days prior to the
distribution. Shareholders may receive payments for cash distributions in the
form of a check or by Federal Reserve wire transfer or ACH wire transfer.

Dividends and other distributions of a Portfolio are paid on a per share basis.
The value of each share will be reduced by the amount of the payment. If shares
are purchased shortly before the record date for a dividend or the distribution
of capital gains, a shareholder will pay the full price for the shares and
receive some portion of the price back as a taxable dividend or distribution.

COUNSEL AND INDEPENDENT PUBLIC ACCOUNTANTS

Morgan, Lewis & Bockius LLP serves as counsel to the Fund. Arthur Andersen LLP
serves as the independent public accountants of the Fund.

CUSTODIAN

CoreStates Bank, N.A., Broad and Chestnut Streets, P. O. Box 7618,
Philadelphia, Pennsylvania 19101 acts as custodian (the "Custodian") of each
Portfolio. The Custodian holds cash, securities and other assets of the Fund as
required by the Investment Company Act of 1940, as amended (the "1940 Act").

DESCRIPTION OF PERMITTED INVESTMENTS AND RISK FACTORS

The following is a description of certain permitted investments and risk
factors for the Portfolios:

AMERICAN DEPOSITARY RECEIPTS ("ADRs")--ADRs are securities, typically issued by
a U.S. financial institution (a "depositary"), that evidence ownership
interests in a security or a pool of securities issued by a foreign issuer and
deposited with the depositary. ADRs may be available through "sponsored" or
"unsponsored" facilities. A sponsored facility is established jointly by the
issuer of the security underlying the receipt and a depositary, whereas, an
unsponsored facility may be established by a depositary without participation
by the issuer of the underlying security. Holders of unsponsored depositary
receipts generally bear all the costs of the unsponsored facility. The
depositary of an unsponsored facility frequently is under no obligation to
distribute shareholder communications received from the issuer of the deposited
security or to pass through, to the holders of the receipts, voting rights with
respect to the deposited securities.

ASSET-BACKED SECURITIES--Asset-backed securities are secured by non-mortgage
assets such as company receivables, truck and auto loans, leases and credit
card receivables. Such securities are generally issued as pass-through
certificates, which represent undivided fractional ownership interests in the
underlying pools of assets. Such securities also may be debt instruments, which
are also known as collateralized obligations and are generally issued as the
debt of a special purpose entity, such as a trust, organized solely for the
purpose of owning such assets and issuing such debt.

Asset-backed securities are not issued or guaranteed by the U.S. Government,
its agencies or instrumentalities; however, the payment of principal and
interest on such obligations may
<PAGE>

23
be guaranteed up to certain amounts and for a certain period by a letter of
credit issued by a financial institution (such as a bank or insurance company)
unaffiliated with the issuers of such securities. The purchase of asset-backed
securities raises risk considerations peculiar to the financing of the
instruments underlying such securities. For example, there is a risk that
another party could acquire an interest in the obligations superior to that of
the holders of the asset-backed securities. There also is the possibility that
recoveries on repossessed collateral may not, in some cases, be available to
support payments on those securities. Asset-backed securities entail prepayment
risk, which may vary depending on the type of asset, but is generally less than
the prepayment risk associated with mortgage-backed securities. In addition,
credit card receivables are unsecured obligations of the card holder.

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

CONVERTIBLE SECURITIES--Convertible securities are corporate securities that
are exchangeable for a set number of another security at a prestated price.
Convertible securities typically have characteristics similar to both fixed
income and equity securities. Because of the conversion feature, the market
value of a convertible security tends to move with the market value of the
underlying stock. The value of a convertible security is also affected by
prevailing interest rates, the credit quality of the issuer, and any call
provisions.

MONEY MARKET INSTRUMENTS--

Bankers' Acceptances--Bankers' acceptances are bills of exchange or time drafts
drawn on and accepted by a commercial bank. Bankers' acceptances are used by
corporations to finance the shipment and storage of goods. Maturities are
generally six months or less.

Certificates of Deposit--Certificates of deposit are interest bearing
instruments with a specific maturity. They are issued by banks and savings and
loan institutions in exchange for the deposit of funds and normally can be
traded in the secondary market prior to maturity. Certificates of deposit with
penalties for early withdrawal will be considered illiquid.

Commercial Paper--Commercial paper is a term used to describe unsecured short-
term promissory notes issued by banks, municipalities, corporations and other
entities. Maturities on these issues vary from a few to 270 days.

Investment Companies--The Portfolios may purchase shares of other investment
companies that invest solely in money market instruments as permitted by the
1940 Act and the rules and regulations thereunder. Under these rules and
regulations, the Portfolios are prohibited from acquiring the securities of
other investment companies if, as a result of such acquisition, a Portfolio
owns more than 3% of the total voting stock of the company; securities issued
by any one investment company represent more than 5% of the total Portfolio's
assets; or securities (other than treasury stock) issued by all investment
companies represent more than 10% of the total assets of the Portfolio. These
investment companies typically incur fees that are separate from those fees
incurred directly by the investing Portfolio. A Portfolio's purchase of such
investment company securities results in the layering of expenses, such that
shareholders would indirectly bear a proportionate share of the operating
expenses of such investment companies, including advisory fees.

Repurchase Agreements--Repurchase agreements are agreements by which the
Portfolio obtains a security and simultaneously commits to return the security
to the seller at an agreed
<PAGE>

24
upon price on an agreed upon date within a number of days from the date of
purchase. The Custodian will hold the security as collateral for the repurchase
agreement. Each Portfolio bears a risk of loss in the event the other party
defaults on its obligations and the Portfolio is delayed or prevented from
exercising its right to dispose of the collateral or if the Portfolio realizes
a loss on the sale of the collateral. Each Portfolio will enter into repurchase
agreements only with financial institutions deemed to present minimal risk of
bankruptcy during the term of the agreement based on established guidelines.
Repurchase agreements are considered loans under the 1940 Act.

Time Deposits--Time deposits are non-negotiable receipts issued by a bank in
exchange for the deposit of funds. Like a certificate of deposit, it earns a
specified rate of interest over a definite period of time; however, it cannot
be traded in the secondary market. Time deposits are considered to be illiquid
securities.

U.S. Government Agencies--Obligations issued or guaranteed by agencies of the
U.S. Government, including, among others, the Federal Farm Credit Bank, the
Federal Housing Administration and the Small Business Administration, and
obligations issued or guaranteed by instrumentalities of the U.S. Government,
including, among others, the Federal Home Loan Mortgage Corporation, the
Federal Land Banks and the U.S. Postal Service. Some of these securities are
supported by the full faith and credit of the U.S. Treasury (e.g., Government
National Mortgage Association), others are supported by the right of the issuer
to borrow from the Treasury (e.g., Federal Farm Credit Bank), while still
others are supported only by the credit of the instrumentality (e.g., Federal
National Mortgage Association). Guarantees of principal by agencies or
instrumentalities of the U.S. Government may be a guarantee of payment at the
maturity of the obligation so that in the event of a default prior to maturity
there might not be a market and thus no means of realizing on the obligation
prior to maturity. Guarantees as to the timely payment of principal and
interest do not extend to the value or yield of these securities nor to the
value of the Portfolio's shares.

U.S. Treasury Obligations--U.S. Treasury obligations consist of bills, notes
and bonds issued by the U.S. Treasury and separately traded interest and
principal component parts of such obligations that are transferable through the
Federal book-entry system known as Separately Traded Registered Interest and
Principal Securities ("STRIPS").

MORTGAGE BACKED SECURITIES--Mortgage-backed securities are instruments that
entitle the holder to a share of all interest and principal payments from
mortgages underlying the security. The mortgages backing these securities
include conventional thirty-year fixed rate mortgages, graduated payment
mortgages, and adjustable rate mortgages. During periods of declining interest
rates, prepayment of mortgages underlying mortgage-backed securities can be
expected to accelerate. Prepayment of mortgages which underlie securities
purchased at a premium often results in capital losses, while prepayment of
mortgages purchased at a discount often results in capital gains. Because of
these unpredictable prepayment characteristics, it is often not possible to
predict accurately the average life or realized yield of a particular issue.

Government Pass-Through Securities: These are securities that are issued or
guaranteed by a U.S. Government agency representing an interest in a pool of
mortgage loans. The primary issuers or guarantors of these mortgage-backed
securities are the Government National Mortgage Association ("GNMA"), the
Federal National Mortgage Association ("FNMA") and
<PAGE>

25
the Federal Home Loan Mortgage Corporation ("FHLMC"). FNMA and FHLMC
obligations are not backed by the full faith and credit of the U.S. Government
as GNMA certificates are, but FNMA and FHLMC securities are supported by the
instrumentalities' right to borrow from the U.S. Treasury. GNMA, FNMA and FHLMC
each guarantee timely distributions of interest to certificate holders. GNMA
and FNMA also each guarantee timely distributions of scheduled principal. FHLMC
has in the past guaranteed only the ultimate collection of principal of the
underlying mortgage loan; however, FHLMC now issues mortgage-backed securities
(FHLMC Gold PCs) which also guarantee timely payment of monthly principal
reductions. Government and private guarantees do not extend to the securities'
value, which is likely to vary inversely with fluctuations in interest rates.

Private Pass-Through Securities: These are mortgage-backed securities issued by
a non-governmental entity, such as a trust. These securities include CMOs and
REMICs that are rated in one of the top two rating categories. While they are
generally structured with one or more types of credit enhancement, private
pass-through securities typically lack a guarantee by an entity having the
credit status of a governmental agency or instrumentality.

CMOs: CMOs are debt obligations of multiclass pass-through certificates issued
by agencies or instrumentalities of the U.S. Government or by private
originators or investors in mortgage loans. In a CMO, series of bonds or
certificates are usually issued in multiple classes. Principal and interest
paid on the underlying mortgage assets may be allocated among the several
classes of a series of a CMO in a variety of ways. Each class of a CMO, often
referred to as a "tranche," is issued with a specific fixed or floating coupon
rate and has a stated maturity or final distribution date. Principal payments
on the underlying mortgage assets may cause CMOs to be retired substantially
earlier than their stated maturities or final distribution dates, resulting in
a loss of all or part of any premium paid.

REMICs: A REMIC is a CMO that qualifies for special tax treatment under the
Code and invests in certain mortgages principally secured by interests in real
property. Investors may purchase beneficial interests in REMICs, which are
known as "regular" interests, or "residual" interests. Guaranteed REMIC pass-
through certificates ("REMIC Certificates") issued by FNMA or FHLMC represent
beneficial ownership interests in a REMIC trust consisting principally of
mortgage loans or FNMA, FHLMC or GNMA-guaranteed mortgage pass-through
certificates. For FHLMC REMIC Certificates, FHLMC guarantees the timely payment
of interest, and also guarantees the payment of principal as payments are
required to be made on the underlying mortgage participation certificates. FNMA
REMIC Certificates are issued and guaranteed as to timely distribution of
principal and interest by FNMA.

Parallel Pay Securities; PAC Bonds: Parallel pay CMOs and REMICs are structured
to provide payments of principal on each payment date to more than one class.
These simultaneous payments are taken into account in calculating the stated
maturity date or final distribution date of each class, which must be retired
by its stated maturity date or final distribution date, but may be retired
earlier. Planned Amortization Class CMOs ("PAC Bonds") generally require
payments of a specified amount of principal on each payment date. PAC Bonds are
always parallel pay CMOs with the required principal payment on such securities
having the highest priority after interest has been paid to all classes.

Stripped Mortgage-Backed Securities ("SMBs"): SMBs are usually structured with
two classes that receive specified proportions of the monthly interest and
principal payments from
<PAGE>

26
a pool of mortgage securities. One class may receive all of the interest
payments and is thus termed an interest-only class ("IO"), while the other
class may receive all of the principal payments and is thus termed the
principal-only class ("PO"). The value of IOs tends to increase as rates rise
and decrease as rates fall; the opposite is true of POs. SMBs are extremely
sensitive to changes in interest rates because of the impact thereon of
prepayment of principal on the underlying mortgage securities. The market for
SMBs is not as fully developed as other markets; SMBs therefore may be
illiquid.

Risk Factors: Due to the possibility of prepayments of the underlying mortgage
instruments, mortgage-backed securities generally do not have a known maturity.
In the absence of a known maturity, market participants generally refer to an
estimated average life. An average life estimate is a function of an assumption
regarding anticipated prepayment patterns, based upon current interest rates,
current conditions in the relevant housing markets and other factors. The
assumption is necessarily subjective, and thus different market participants
can produce different average life estimates with regard to the same security.
There can be no assurance that estimated average life will be a security's
actual average life.

REITs--REITs pool investors' funds for investment primarily in income producing
real estate or real estate related loans or interests. A REIT is not taxed on
income distributed to its shareholders or unitholders if it complies with
regulatory requirements. Equity REITs invest the majority of their assets
directly in real property and derive their income primarily from rents and
capital gains from appreciation realized through property sales. A shareholder
in the Portfolio should realize that by investing in REITs indirectly through
the Portfolio, he or she will bear not only his or her proportionate share of
the expenses of the Portfolio, but also indirectly, similar expenses of
underlying REITs. REITs may be affected by changes in the value of their
underlying properties and by defaults by borrowers or tenants.

SECURITIES OF FOREIGN ISSUERS--There are certain risks connected with investing
in foreign securities. These include risks of adverse political and economic
developments (including possible governmental seizure or nationalization of
assets), the possible imposition of exchange controls or other governmental
restrictions, less uniformity in accounting and reporting requirements, the
possibility that there will be less information on such securities and their
issuers available to the public, the difficulty of obtaining or enforcing court
judgments abroad, restrictions on foreign investments in other jurisdictions,
difficulties in effecting repatriation of capital invested abroad, and
difficulties in transaction settlements and the effect of delay on shareholder
equity. Foreign securities may be subject to foreign taxes, and may be less
marketable than comparable U.S. securities. The value of a Portfolio's
investments denominated in foreign currencies will depend on the relative
strengths of those currencies and the U.S. dollar, and a Portfolio may be
affected favorably or unfavorably by changes in the exchange rates or exchange
control regulations between foreign currencies and the U.S. dollar. Changes in
foreign currency exchange rates also may affect the value of dividends and
interest earned, gains and losses realized on the sale of securities and net
investment income and gains, if any, to be distributed to shareholders by a
Portfolio.

U.S. GOVERNMENT AGENCIES--Obligations issued or guaranteed by agencies of the
U.S. Government, including, among others, the Federal Farm Credit Bank, the
Federal Housing Administration and the Small Business Administration, and
obligations issued or guaranteed by instrumentalities of the U.S. Government,
including, among others, the FHLMC, the Federal Land Banks and the U.S. Postal
Service. Some of these securities are supported by
<PAGE>

27
the full faith and credit of the U.S. Treasury (e.g., GNMA), others are
supported by the right of the issuer to borrow from the Treasury (e.g., Federal
Farm Credit Bank), while still others are supported only by the credit of the
instrumentality (e.g., FNMA). Guarantees of principal by agencies or
instrumentalities of the U.S. Government may be a guarantee of payment at the
maturity of the obligation so that in the event of a default prior to maturity
there might not be a market and thus no means of realizing on the obligation
prior to maturity. Guarantees as to the timely payment of principal and
interest do not extend to the value or yield of these securities nor to the
value of the Portfolio's shares.

U.S. TREASURY OBLIGATIONS--U.S. Treasury obligations consist of bills, notes
and bonds issued by the U.S. Treasury and separately traded interest and
principal component parts of such obligations that are transferable through the
Federal book-entry system known as Separately Traded Registered Interest and
Principal Securities ("STRIPS").

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Summary.................................................................... 2
Expense Summary............................................................ 4
Financial Highlights....................................................... 6
The Fund and the Portfolios................................................ 8
Investment Objectives...................................................... 8
Investment Policies........................................................ 8
Risk Factors............................................................... 11
Investment Limitations..................................................... 13
The Adviser................................................................ 13
The Administrator.......................................................... 14
The Transfer Agent......................................................... 15
The Distributor............................................................ 15
Portfolio Transactions..................................................... 15
Purchase and Redemption of Shares.......................................... 15
Performance................................................................ 18
Taxes...................................................................... 19
General Information........................................................ 20
Description of Permitted Investments and Risk Factors...................... 22
</TABLE>
<PAGE>

FUND:
THE ADVISORS' INNER CIRCLE FUND

PORTFOLIOS:
CLOVER CAPITAL EQUITY VALUE FUND
CLOVER CAPITAL FIXED INCOME FUND
CLOVER CAPITAL SMALL CAP VALUE FUND

ADVISER:
CLOVER CAPITAL MANAGEMENT, INC.

DISTRIBUTOR:
SEI FINANCIAL SERVICES COMPANY

ADMINISTRATOR:
SEI FINANCIAL MANAGEMENT CORPORATION

LEGAL COUNSEL:
MORGAN, LEWIS & BOCKIUS LLP

INDEPENDENT PUBLIC ACCOUNTANTS:
ARTHUR ANDERSEN LLP

FEBRUARY 28, 1996

<PAGE>

Fund:
THE ADVISORS' INNER CIRCLE FUND

Portfolios:
CLOVER CAPITAL EQUITY VALUE FUND
CLOVER CAPITAL FIXED INCOME FUND
CLOVER CAPITAL SMALL CAP VALUE FUND

Investment Adviser:
CLOVER CAPITAL MANAGEMENT, INC.

This Statement of Additional Information is not a prospectus and relates only to
the Clover Capital Equity Value Fund (the "Equity Value Portfolio"), Clover
Capital Small Cap Value Fund (the "Small Cap Value Fund") and Clover Capital
Fixed Income Fund (the "Fixed Income Portfolio") (each a "Portfolio" and
collectively, the "Portfolios"). It is intended to provide additional
information regarding the activities and operations of The Advisor's Inner
Circle Fund (the "Fund") and the Portfolios and should be read in conjunction
with the Portfolios' prospectus dated February 28, 1996. Prospectuses for the
Portfolios may be obtained by calling 1-800-932-7781.

TABLE OF CONTENTS

THE FUND............................................................ S - 2
DESCRIPTION OF PERMITTED INVESTMENTS................................ S - 2
INVESTMENT LIMITATIONS.............................................. S - 6
THE ADVISER......................................................... S - 10
THE ADMINISTRATOR................................................... S - 11
THE DISTRIBUTOR..................................................... S - 12
TRUSTEES AND OFFICERS OF THE FUND................................... S - 12
COMPUTATION OF YIELD AND TOTAL RETURN............................... S - 15
PURCHASE AND REDEMPTION OF SHARES................................... S - 16
DETERMINATION OF NET ASSET VALUE.................................... S - 16
TAXES............................................................... S - 17
PORTFOLIO TRANSACTIONS.............................................. S - 18
DESCRIPTION OF SHARES............................................... S - 21
SHAREHOLDER LIABILITY............................................... S - 21
LIMITATION OF TRUSTEES' LIABILITY................................... S - 21
5% SHAREHOLDERS..................................................... S - 22
EXPERTS............................................................. S - 22
FINANCIAL STATEMENTS................................................ S - 22
APPENDIX............................................................ A - 1

February 28, 1996
<PAGE>

THE FUND

This Statement of Additional Information relates only to the Clover Capital
Equity Value Fund (the "Equity Value Portfolio"), Clover Capital Small Cap Value
Fund (the "Small Cap Value Portfolio") and Clover Capital Fixed Income Fund (the
"Fixed Income Portfolio") (each a "Portfolio"). Each Portfolio is a separate
series of The Advisors' Inner Circle Fund (the "Fund"), an open-end investment
management company that offers shares of diversified portfolios, established
under Massachusetts law as a Massachusetts business trust under a Declaration of
Trust dated July 18, 1991. The Declaration of Trust permits the Fund to offer
separate series ("portfolios") of shares of beneficial interest ("shares").
Each portfolio is a separate mutual fund, and each share of each portfolio
represents an equal proportionate interest in that portfolio. See "Description
of Shares." No investment in shares of a portfolio should be made without first
reading that portfolio's prospectus. Capitalized terms not defined herein are
defined in the Prospectus offering shares of the Portfolios.

DESCRIPTION OF PERMITTED INVESTMENTS

The Fixed Income Portfolio may invest in securities issued by the Government
National Mortgage Association ("GNMA"), a wholly-owned U.S. Government
corporation which guarantees the timely payment of principal and interest. The
market value and interest yield of these instruments can vary due to market
interest rate fluctuations and early prepayments of underlying mortgages. These
securities represent ownership in a pool of federally insured mortgage loans.
GNMA certificates consist of underlying mortgages with a maximum maturity of 30
years. However, due to scheduled and unscheduled principal payments, GNMA
certificates have a shorter average maturity and, therefore, less principal
volatility than a comparable 30-year bond. Since prepayment rates vary widely,
it is not possible to accurately predict the average maturity of a particular
GNMA pool. The scheduled monthly interest and principal payments relating to
mortgages in the pool will be "passed through" to investors. GNMA securities
differ from conventional bonds in that principal is paid back to the certificate
holders over the life of the loan rather than at maturity. As a result, there
will be monthly scheduled payments of principal and interest. In addition,
there may be unscheduled principal payments representing prepayments on the
underlying mortgages. Although GNMA certificates may offer yields higher than
those available from other types of U.S. Government securities, GNMA
certificates may be less effective than other types of securities as a means of
"locking in" attractive long-term rates because of the prepayment feature. For
instance, when interest rates decline, the value of a GNMA certificate likely
will not rise as much as comparable debt securities due to the prepayment
feature. In addition, these prepayments can cause the price of a GNMA
certificate originally purchased at a premium to decline in price to its par
value, which may result in a loss.

The Fixed Income Portfolio may invest in mortgage-backed securities and asset-
backed securities. Two principal types of mortgage-backed securities are
collateralized

S - 2
<PAGE>

mortgage obligations ("CMOs") and real estate mortgage investment conduits
("REMICs"), which are rated in one of the top two categories by Standard &
Poor's Corporation ("S&P") or Moody's Investors Services, Inc. ("Moody's").
CMOs are securities collateralized by mortgages, mortgage pass-throughs,
mortgage pay-through bonds (bonds representing an interest in a pool of
mortgages where the cash flow generated from the mortgage collateral pool is
dedicated to bond repayment), and mortgage-backed bonds (general obligations of
the issuers payable out of the issuers' general funds and additionally secured
by a first lien on a pool of single family detached properties). Many CMOs are
issued with a number of classes or series which have different maturities and
are retired in sequence.

Investors purchasing such CMOs in the shortest maturities receive or are
credited with their pro rata portion of the scheduled payments of interest and
principal on the underlying mortgages plus all unscheduled prepayments of
principal up to a predetermined portion of the total CMO obligation. Until that
portion of such CMO obligation is repaid, investors in the longer maturities
receive interest only. Accordingly, the CMOs in the longer maturity series are
less likely than other mortgage pass-throughs to be prepaid prior to their
stated maturity. Although some of the mortgages underlying CMOs may be
supported by various types of insurance, and some CMOs may be backed by GNMA
certificates or other mortgage pass-throughs issued or guaranteed by U.S.
Government agencies or instrumentalities, the CMOs themselves are not generally
guaranteed.

REMICs, which were authorized under the Tax Reform Act of 1986, are private
entities formed for the purpose of holding a fixed pool of mortgages secured by
an interest in real property. REMICs are similar to CMOs in that they issue
multiple classes of securities.

In addition to mortgage-backed securities, the Fixed Income Portfolio may invest
in securities secured by asset-backed securities including company receivables,
truck and auto loans, leases, and credit card receivables. These issues may be
traded over-the-counter and typically have a short-intermediate maturity
structure depending on the paydown characteristics of the underlying financial
assets which are passed through to the security holder.

The Fixed Income and Small Cap Value Portfolios may also invest in real estate
investment trusts ("REITs"), which pool investors' funds for investment in
income producing commercial real estate or real estate related loans or
interests.

A REIT is not taxed on income distributed to its shareholders or unitholders if
it complies with regulatory requirements relating to its organization,
ownership, assets and income, and with a regulatory requirement that it
distribute to its shareholders or unitholders at least 95% of its taxable income
for each taxable year. Generally, REITs can be classified as Equity REITs,
Mortgage REITs and Hybrid REITs. Equity REITs invest the majority of their
assets directly in real property and derive their income primarily from rents
and

S - 3
<PAGE>

capital gains from appreciation realized through property sales. Mortgage REITs
invest the majority of their assets in real estate mortgages and derive their
income primarily from interest payments. Hybrid REITs combine the
characteristics of both Equity and Mortgage REITs. A shareholder in the
Portfolio should realize that by investing in REITs indirectly through the
Portfolio, he or she will bear not only his or her proportionate share of the
expenses of the Portfolio, but also indirectly, similar expenses of underlying
REITs.

A Portfolio may be subject to certain risks associated with the direct
investments of the REITs. REITs may be affected by changes in the value of
their underlying properties and by defaults by borrowers or tenants. Mortgage
REITs may be affected by the quality of the credit extended. Furthermore, REITs
are dependent on specialized management skills. Some REITs may have limited
diversification and may be subject to risks inherent in financing a limited
number of properties. REITs depend generally on their ability to generate cash
flow to make distributions to shareholders or unitholders, and may be subject to
defaults by borrowers and to self-liquidations. In addition, the performance of
a REIT may be affected by its failure to qualify for tax-free pass-through of
income under the Code or its failure to maintain exemption from registration
under the 1940 Act.

Certain of the investments of the Portfolios may include U.S. Government agency
securities. Agencies of the United States Government which issue obligations
consist of, among others, the Export Import Bank of the United States, Farmers
Home Administration, Federal Farm Credit Bank, Federal Housing Administration,
GNMA, Maritime Administration, Small Business Administration and the Tennessee
Valley Authority. Obligations of instrumentalities of the U.S. Government
include securities issued by, among others, Federal Home Loan Banks, Federal
Home Loan Mortgage Corporation, Federal Intermediate Credit Banks, Federal Land
Banks, Federal National Mortgage Association ("FNMA") and the United States
Postal Service. Some of these securities are supported by the full faith and
credit of the U.S. Treasury (e.g., GNMA), others are supported by the right of
the issuer to borrow from the Treasury and still others are supported only by
the credit of the instrumentality (e.g., FNMA). Guarantees of principal by
agencies or instrumentalities of the U.S. Government may be a guarantee of
payment at the maturity of the obligation so that in the event of a default
prior to maturity, there might not be a market and thus no means of realizing
the value of the obligation prior to maturity.

Certain of the investments of the Portfolios may include bankers' acceptances
which are bills of exchange or time drafts drawn on and accepted by a commercial
bank. They are used by corporations to finance the shipment and storage of
goods and to furnish dollar exchange. Maturities are generally six months or
less.

Certain of the investments of the Portfolios may include certificates of deposit
which are negotiable interest bearing instruments with a specific maturity.
Certificates of deposit are issued by banks and savings and loan institutions in
exchange for the deposit of funds and normally can be traded in the secondary
market, prior to maturity.

S - 4
<PAGE>

Certain of the investments of the Portfolios may include time deposits which are
non-negotiable receipts issued by a bank in exchange for the deposit of funds.
Like certificates of deposit, they earn a specified rate of interest over a
definite period of time; however, it cannot be traded in the secondary market.

Certain of the investments of the Portfolios may include commercial paper
instruments which are unsecured short-term promissory notes issued by
corporations and other entities. Maturities on these issues vary generally from
a few days to nine months.

The Fixed Income Portfolio may invest in variable or floating rate instruments
which may involve a demand feature and may include variable amount master demand
notes which may or may not be backed by bank letters of credit. The holder of
an instrument with a demand feature may tender the instrument back to the issuer
at par prior to maturity. A variable amount master demand note is issued
pursuant to a written agreement between the issuer and the holder, its amount
may be increased by the holder or decreased by the holder or issuer, it is
payable on demand, and the rate of interest varies based upon an agreed formula.
The quality of the underlying credit must, in the opinion of the Adviser, be
equivalent to the long-term bond or commercial paper ratings applicable to
permitted investments for the Fixed Income Portfolio. The Adviser will monitor
on an ongoing basis the earnings power, cash flow and liquidity ratios of the
issuers of such instruments and will similarly monitor the ability of an issuer
of a demand instrument to pay principal and interest on demand.

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

Repurchase agreements are considered to be loans by the Portfolio for purposes
of its investment limitations. The repurchase agreements entered into by the
Portfolios will provide that the underlying security at all times shall have a
value at least equal to 102% of the resale price stated in the agreement (the
Adviser monitors compliance with this requirement). Under all repurchase
agreements entered into by the Portfolios, the custodian or its agent must take
possession of the underlying collateral. However, if the seller defaults, the
Portfolios could realize a loss on the sale of the underlying security to the
extent that the proceeds of sale, including accrued interest, are less than the
resale price provided in the agreement including interest. In addition, even
though the Bankruptcy Code provides protection for most repurchase agreements,
if the seller should

S - 5
<PAGE>

be involved in bankruptcy or insolvency proceedings, the Portfolios may incur
delay and costs in selling the underlying security or may suffer a loss of
principal and interest if the Portfolios are treated as an unsecured creditor
and are required to return the underlying security to the seller's estate.

The Fixed Income Portfolio may invest in U.S. dollar denominated fixed income
securities of foreign issuers which are traded in the United States. In
addition, the Equity Value Portfolio may invest in American Depositary Receipts.
These instruments may subject the Portfolio to investment risks that differ in
some respects from those related to investments in obligations of U.S. domestic
issuers. Such risks include future adverse political and economic developments,
the possible imposition of withholding taxes on interest or other income,
possible seizure, nationalization, or expropriation of foreign deposits, the
possible establishment of exchange controls or taxation at the source, greater
fluctuations in value due to changes in exchange rates, or the adoption of other
foreign governmental restrictions which might adversely affect the payment of
principal and interest on such obligations. Foreign issuers of securities or
obligations are often subject to accounting treatment and engage in business
practices different from those respecting domestic issuers of similar securities
or obligations. Foreign branches of U.S. banks and foreign banks may be subject
to less stringent reserve requirements than those applicable to domestic
branches of U.S. banks.

The Fixed Income Portfolio may purchase obligations of supranational agencies.
Currently, the Portfolio only intends to invest in obligations issued or
guaranteed by the Asian Development Bank, Inter-American Development Bank,
International Bank for Reconstruction and Development (World Bank), African
Development Bank, European Coal and Steel Community, European Economic
Community, European Investment Bank and Nordic Investment Bank.

INVESTMENT LIMITATIONS

Fundamental Policies

The following investment limitations are fundamental policies of each Portfolio
which cannot be changed with respect to a Portfolio without the consent of the
holders of a majority of that Portfolio's outstanding shares. The term
"majority of the outstanding shares" means the vote of (i) 67% or more of
Portfolio's shares present at a meeting, if more than 50% of the outstanding
shares of a Portfolio are present or represented by proxy, or (ii) more than 50%
of a Portfolio's outstanding shares, whichever is less.

Each Portfolio may not:

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

S - 6
<PAGE>

2. Make loans, except that a Portfolio may purchase or hold debt instruments
in accordance with its investment objective and policies, and a Portfolio
may enter into repurchase agreements, as described in the Prospectus and in
this Statement of Additional Information.

3. Make short sales of securities, maintain a short position or purchase
securities on margin, except that a Portfolio may obtain short-term credits
as necessary for the clearance of security transactions.

4. Act as an underwriter of securities of other issuers except as it may be
deemed an underwriter in selling a portfolio security.

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

6. Invest in interests in oil, gas or other mineral exploration or development
programs and oil, gas or mineral leases.

The Equity Value and Fixed Income Funds may not:

1. Acquire more than 10% of the voting securities of any one issuer.

2. Borrow money except for temporary or emergency purposes and then only in an
amount not exceeding 10% of the value of total assets. Any borrowing will
be done from a bank and, to the extent that such borrowing exceeds 5% of
the value of the Portfolio's assets, asset coverage of at least 300% is
required. In the event that such asset coverage shall at any time fall
below 300%, the Portfolio shall, within three days thereafter or such
longer period as the SEC may prescribe by rules and regulations, reduce the
amount of its borrowings to such an extent that the asset coverage of such
borrowings shall be at least 300%. This borrowing provision is included
solely for temporary liquidity or emergency purposes. All borrowings will
be repaid before making investments and any interest paid on such
borrowings will reduce income.

3. Pledge, mortgage or hypothecate assets except to secure temporary
borrowings permitted by (3) above in aggregate amounts not to exceed 10% of
total assets taken at current value at the time of the incurrence of such
loan.

4. Purchase or sell real estate, real estate limited partnership interests,
futures contracts, commodities or commodities contracts, provided that this
shall not prevent a Portfolio from investing in readily marketable
securities of issuers that can invest in real estate or commodities,
institutions that issue mortgages, real estate investment trusts that deal
in real estate or interests therein pursuant to a Portfolio's investment
objective and policies.

S - 7
<PAGE>

5. Issue senior securities (as defined in the 1940 Act) except in connection
with permitted borrowings as described above or as permitted by rule,
regulation or order of the SEC.

6. Purchase or retain securities of an issuer if, to the knowledge of the
Fund, an officer, trustee, partner or director of the Fund or any
investment adviser of the Fund owns beneficially more than 1/2 of 1% of the
shares or securities of such issuer and all such officers, trustees,
partners and directors owning more than 1/2 of 1% of such shares or
securities together own more than 5% of such shares or securities.

The Small Cap Value Fund may not:

1. With respect to 75% of its assets, acquire more than 10% of the voting
securities of any one issuer.

2. Borrow money except for temporary or emergency purposes and then only in an
amount not exceeding 10% of the value of total assets. To the extent that
such borrowing exceeds 5% of the value of the Portfolio's assets, asset
coverage of at least 300% is required. In the event that such asset
coverage shall at any time fall below 300%, the Portfolio shall, within
three days thereafter or such longer period as the SEC may prescribe by
rules and regulations, reduce the amount of its borrowings to such an
extent that the asset coverage of such borrowings shall be at least 300%
All borrowings will be repaid before making investments and any interest
paid on such borrowings will reduce income.

3. Pledge, mortgage or hypothecate assets except to secure temporary
borrowings permitted by (3) above.

4. Purchase or sell real estate, real estate limited partnership interests,
commodities or commodities contracts, provided that this shall not prevent
a Portfolio from investing in readily marketable securities of issuers that
can invest in real estate or commodities, institutions that issue mortgages
and real estate investment trusts pursuant to a Portfolio's investment
objective and policies.

5. Issue senior securities (as defined in the 1940 Act) except as permitted by
rule, regulation or order of the SEC.

Non-Fundamental Policies

In addition to the non-fundamental investment policies described elsewhere in
the Prospectus and Statement of Additional Information, the following investment
limitations are non-fundamental and may be changed by the Fund's Board of
Trustees without shareholder approval.

S - 8
<PAGE>

The Equity Value and Fixed Income Funds

1. No Portfolio may write or purchase puts, calls, options or combinations
thereof.

2. No Portfolio may invest in warrants except that the Equity Value Portfolio
may invest in warrants and other rights to purchase common stocks in an
amount not exceeding 5% of the Portfolio's net assets as valued at the
lower of cost or market value. Included in that amount, but not to exceed
2% of the Portfolio's net assets, may be warrants not listed on the New
York Stock Exchange or American Stock Exchange.

3. No Portfolio may invest in illiquid securities in an amount exceeding, in
the aggregate, 10% of a portfolio's assets. An illiquid security is a
security which cannot be disposed of promptly (within seven days), and in
the usual course of business without a loss, and includes repurchase
agreements maturing in excess of seven days, time deposits with a
withdrawal penalty, non-negotiable instruments and instruments for which no
market exists.

4. No Portfolio may invest more than 10% of the total assets in securities of
issuers which together with any predecessors have a record of less than
three years continuous operation.

5. To the extent a Portfolio is registered in the state of California and
purchases securities of other investment companies, such purchases shall be
limited to shares of money market open-end investment companies and the
investment adviser will waive its fee on that portion of the Portfolio's
assets placed in such money market open-end investment companies.

The foregoing percentages will apply at the time of the purchase of a security
and shall not be considered violated unless an excess occurs or exists
immediately after and as a result of a purchase of such security.

The Small Cap Value Fund

1. The Portfolio may invest in warrants and other rights to purchase common
stocks in an amount not exceeding 5% of the Portfolio's net assets as
valued at the lower of cost or market value. Included in that amount, but
not to exceed 2% of the Portfolio's net assets, may be warrants not listed
on the New York Stock Exchange or American Stock Exchange.

2. The Portfolio may not invest in illiquid securities in an amount exceeding,
in the aggregate, 15% of its net assets. An illiquid security is a
security which cannot be disposed of promptly (within seven days), and in
the usual course of business without a loss, and includes repurchase
agreements maturing in excess of seven

S - 9
<PAGE>

days, time deposits with a withdrawal penalty, non-negotiable instruments
and instruments for which no market exists.

3. To the extent the Portfolio is registered in the state of California and
purchases securities of other investment companies, such purchases shall be
limited to shares of money market open-end investment companies and the
investment adviser will waive its fee on that portion of the Portfolio's
assets placed in such money market open-end investment companies.

4. Purchase or retain securities of an issuer if, to the knowledge of the
Fund, an officer, trustee, partner or director of the Fund or any
investment adviser of the Fund owns beneficially more than 1/2 of 1% of the
shares or securities of such issuer and all such officers, trustees,
partners and directors owning more than 1/2 of 1% of such shares or
securities together own more than 5% of such shares or securities.

Except for non-fundamental policy number 2, the foregoing percentages will apply
at the time of the purchase of a security and shall not be considered violated
unless an excess occurs or exists immediately after and as a result of a
purchase of such security.

THE ADVISER

The Fund and Clover Capital Management, Inc. have entered into an advisory
agreement dated November 14, 1991 (the "Advisory Agreement"). The Advisory
Agreement provides that the Adviser shall not be protected against any liability
to the Fund or its shareholders by reason of willful misfeasance, bad faith or
gross negligence on its part in the performance of its duties or from reckless
disregard of its obligations or duties thereunder.

The Advisory Agreement provides that if, for any fiscal year, the ratio of
expenses of any Portfolio (including amounts payable to the Adviser but
excluding interest, taxes, brokerage, litigation, and other extraordinary
expenses) exceeds limitations established by any state in which the shares of
the Portfolio are registered, the Adviser will bear the amount of such excess.
The Adviser will not be required to bear expenses of any Portfolio to an extent
which would result in the Portfolio's inability to qualify as a regulated
investment company under provisions of the Internal Revenue Code of 1986, as
amended (the "Code"). For the fiscal period ended October 31, 1995, for the
Equity Value Portfolio the Adviser was paid $238,624 and waived fees of $39,599
and for the Fixed Income Portfolio the Adviser was paid $0, waived fees of
$68,168 and reimbursed expenses of $16,812. For the fiscal period ended October
31, 1994, for the Equity Value Portfolio the Adviser was paid $110,578 and
waived fees of $30,260 and for the Fixed Income Portfolio the Adviser was paid
$0, waived fees of $38,976 and reimbursed expenses of $17,918. For the fiscal
period ended October 31, 1993, the Adviser was paid $50,664 and waived fees of
$40,566 in respect of the Equity Value Portfolio and received $0, waived $47,308

S - 10
<PAGE>

in fees due it under the Advisory Agreement and reimbursed Portfolio expenses of
$7,653 in respect of the Fixed income Portfolio.

The continuance of the Advisory Agreement after the first two years must be
specifically approved at least annually (i) by the vote of the Trustees or by a
vote of the shareholders of the Portfolio, and (ii) by the vote of a majority of
the Trustees who are not parties to the Advisory Agreement or "interested
persons" of any party thereto, cast in person at a meeting called for the
purpose of voting on such approval. The Advisory Agreement will terminate
automatically in the event of its assignment, and is terminable at any time
without penalty by the Trustees of the Fund or, with respect to any Portfolio,
by a majority of the outstanding shares of that Portfolio, on not less than 30
days' nor more than 60 days' written notice to the Adviser, or by the Adviser on
90 days' written notice to the Fund.

THE ADMINISTRATOR

The Fund and SEI Financial Management Corporation (the "Administrator") have
entered into an administration agreement dated November 14, 1991 (the
"Administration Agreement"). The Administration Agreement provides that the
Administrator shall not be liable for any error of judgment or mistake of law or
for any loss suffered by the Fund in connection with the matters to which the
Administration Agreement relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of the Administrator in
the performance of its duties or from reckless disregard by it of its duties and
obligations thereunder. The Administration Agreement shall remain in effect for
a period of five years after the effective date of the agreement and shall
continue in effect for successive periods of two years unless terminated by
either party on not less than 90 days' prior written notice to the other party.
For the fiscal periods ended October 31, 1995, 1994 and 1993, the Administrator
received fees of $73,770, $50,000 and $50,000 for the Equity Value Portfolio and
$49,962, $50,000 and $50,000 for the Fixed Income Portfolio, respectively.

The Fund and the Administrator have also entered into a shareholder servicing
agreement pursuant to which the Administrator provides certain shareholder
services in addition to those set forth in the Administration Agreement.

The Administrator, a wholly owned subsidiary of SEI Corporation ("SEI"), was
organized as a Delaware corporation in 1969 and has its principal business
offices at 680 East Swedesford Road, Wayne, Pennsylvania 19087-1658. Alfred P.
West, Jr., Henry H. Greer and Carmen V. Romeo constitute the Board of Directors
of the Administrator. Mr. West is the Chairman of the Board and Chief Executive
Officer of the Administrator and of SEI. Mr. Greer is the President and Chief
Operating Officer of the Administrator and of SEI. SEI and its subsidiaries are
leading providers of funds evaluation services, trust accounting systems, and
brokerage and information services to financial institutions, institutional
investors and money managers. The Administrator also serves as

S - 11
<PAGE>

administrator to the following other mutual funds: The Achievement Funds Trust,
The Arbor Fund, ARK Funds, Bishop Street Funds, The Compass Capital Group,
Conestoga Family of Funds, CoreFunds, Inc., CrestFunds, Inc., CUFUND, FFB
Lexicon Funds, First American Investment Funds, Inc., First American Funds,
Inc., Insurance Investment Products Trust, Inventor Funds, Inc., Marquis
Funds(R), Morgan Grenfell Investment Trust, The PBHG Funds, Inc., The Pillar
Funds, Rembrandt Funds(R), 1784 Funds, SEI Daily Income Trust, SEI Index Funds,
SEI Institutional Managed Trust, SEI International Trust, SEI Liquid Asset
Trust, SEI Tax Exempt Trust, Stepstone Funds, STI Classic Funds and STI Classic
Variable Trust.

THE DISTRIBUTOR

SEI Financial Services Company (the "Distributor"), a wholly owned subsidiary of
SEI, and the Fund are parties to a distribution agreement dated November 14,
1991 (the "Distribution Agreement"). The Distributor will receive no
compensation for distribution of shares of any Portfolio.

The Distribution Agreement shall remain in effect for a period of two years
after the effective date of the agreement and is renewable annually. The
Distribution Agreement may be terminated by the Distributor, by a majority vote
of the Trustees who are not interested persons and have no financial interest in
the Distribution Agreement or by a majority vote of the outstanding securities
of the Fund upon not more than 60 days' written notice by either party or upon
assignment by the Distributor.

TRUSTEES AND OFFICERS OF THE FUND

The management and affairs of the Fund are supervised by the Trustees under the
laws of the Commonwealth of Massachusetts. The Trustees and executive officers
of the Fund and their principal occupations for the last five years are set
forth below. Each may have held other positions with the named companies during
that period. Unless otherwise noted, the business address of each Trustee and
executive officer is SEI Financial Management Corporation, 680 E. Swedesford
Road, Wayne, Pennsylvania 19087-1658. Certain officers of the Fund also serve
as Trustees and/or officers of The Achievement Funds Trust, The Arbor Fund, ARK
Funds, Bishop Street Funds, The Compass Capital Group, Conestoga Family of
Funds, CoreFunds, Inc., CrestFunds, Inc., CUFUND, FFB Lexicon Funds, First
American Investment Funds, Inc., First American Funds, Inc., Insurance
Investment Products Trust, Inventor Funds, Inc., Marquis Funds(R), Morgan
Grenfell Investment Trust, The PBHG Funds, Inc., The Pillar Funds, Rembrandt
Funds(R), 1784 Funds, SEI Daily Income Trust, SEI Index Funds, SEI Institutional
Managed Trust, SEI International Trust, SEI Liquid Asset Trust, SEI Tax Exempt
Trust, Stepstone Funds, STI Classic Funds and STI Classic Variable Trust.

ROBERT A. NESHER (DOB 08/17/46) - Trustee* - 8 South Street, Kennebunkport, ME
04046. Retired since 1994. Director, Executive Vice President of SEI
Corporation, 1986-

S - 12
<PAGE>

1994. Director and Executive Vice President of the Administrator and
Distributor, September, 1981-1994.

JOHN T. COONEY (DOB 01/20/27) - Trustee** - 569 N. Post Oak Lane, Houston, TX
77024. Retired since 1992. Formerly Vice Chairman of Ameritrust Texas N.A.,
1989-1992, and MTrust Corp., 1985-1989.

WILLIAM M. DORAN (DOB 05/26/40) - Trustee* - 2000 One Logan Square,
Philadelphia, PA 19103. Partner of Morgan, Lewis & Bockius LLP, Counsel to SEI,
the Fund, the Administrator and Distributor, for the past five years. Director
and Secretary of SEI.

FRANK E. MORRIS (DOB 12/30/23) - Trustee** - 105 Walpole Street, Dover, MA
02030. Peter Drucker Professor of Management, Boston College since 1989.
President, Federal Reserve Bank of Boston, 1968-1988.

ROBERT A. PATTERSON (DOB 11/05/17) - Trustee** - 208 Old Main, University Park,
PA 16802. Pennsylvania State University, Senior Vice President, Treasurer
(Emeritus). Financial and Investment Consultant, Professor of Transportation
(1984-present). Vice President-Investments, Treasurer, Senior Vice President
(Emeritus) (1982-1984). Director, Pennsylvania Research Corp.; Member and
Treasurer, Board of Trustees of Grove City College.

GENE PETERS (DOB 06/03/20) - Trustee** - 943 Oblong Road, Williamstown, MA
01267. Private investor from 1987 to present. Vice President and Chief
Financial Officer, Western Company of North America (petroleum service company)
(1980-1986). President of Gene Peters and Associates (import company) (1978-
1980). President and Chief Executive Officer of Jos. Schlitz Brewing Company
before 1978.

JAMES M. STOREY (DOB 04/12/31) - Trustee** - Ten Post Office Square South,
Boston, MA 02109. Retired since 1993. Formerly, Partner of Dechert Price &
Rhoads (law firm).

DAVID G. LEE (DOB 04/16/52) - President, Chief Executive Officer - Senior Vice
President of the Administrator and Distributor since 1993. Vice President of
the Administrator and Distributor (1991-1993). President, GW Sierra Trust Funds
before 1991.

SANDRA K. ORLOW (DOB 10/18/53) - Vice President, Assistant Secretary - Vice
President and Assistant Secretary of SEI, the Administrator and the Distributor
since 1983.

KEVIN P. ROBINS (DOB 04/15/61) - Vice President, Assistant Secretary - Senior
Vice President and General Counsel of SEI, the Administrator and the Distributor
since 1994. Secretary of the Administrator and the Distributor since 1994.
Vice President and Assistant Secretary of SEI, the Administrator and the
Distributor (1992-1994). Associate, Morgan, Lewis & Bockius LLP (law firm)
prior to 1992.

S - 13
<PAGE>

JEFFREY A. COHEN, CPA (DOB 04/22/61) - Controller, Assistant Secretary -
Director, International and Domestic Funds Accounting, SEI Corporation since
1991. Audit Manager, Price Waterhouse prior to 1991.

ROBERT B. CARROLL (DOB 02/26/60) - Vice President, Assistant Secretary - Vice
President and Assistant Secretary of SEI, the Administrator and Distributor
since 1994. United States SEC, Division of Investment Management, (1990-1994).
Associate, McGuire, Woods, Battle & Boothe (law firm) before 1990.

KATHRYN L. STANTON (DOB 11/19/58) - Vice President, Assistant Secretary - Vice
President and Assistant Secretary of SEI, the Administrator and the Distributor
since 1994. Associate, Morgan, Lewis & Bockius LLP (law firm) (1989-1994).

JOSEPH M. LYDON (DOB 09/27/59) - Vice President, Assistant Secretary - Director
of Business Administration of Fund Resources, SEI Corporation since 1995. Vice
President of Fund Group and Vice President of the Adviser, Dreman Value
Management and President of Dreman Financial Services, Inc. prior to 1995.

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

RICHARD W. GRANT (DOB 10/25/45) - Secretary - 2000 One Logan Square,
Philadelphia, PA 19103, Partner of Morgan, Lewis & Bockius LLP (law firm),
Counsel to SEI, the Fund, the Administrator and the Distributor for the past
five years.

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

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

The Trustees and officers of the Fund own less than 1% of the outstanding shares
of the Fund. The Fund pays the fees, including compensation and reimbursement
for expenses for unaffiliated Trustees.

The following table exhibits Trustee compensation for the fiscal year ended
October 31, 1995.

S - 14
<PAGE>

<TABLE>
<CAPTION>
Total
Compensation
From Registrant
and Fund
Aggregate Compensation Pension or Complex (R) Paid to
From Registrant for the Retirement Benefits Estimated Trustees for the
Fiscal Year Ended Accrued as Part of Annual Benefits Fiscal Year Ended
Name of Person, Position October 31, 1995 Fund Expenses Upon Retirement October 31, 1995
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
John T. Cooney $9,429.84 N/A N/A $9,429.84 for
services on
1 board
- -----------------------------------------------------------------------------------------------------------------------------
Frank E. Morris $9,429.84 N/A N/A $9,429.84 for
services on
1 board
- -----------------------------------------------------------------------------------------------------------------------------
Robert Patterson $9,429.84 N/A N/A $9,429.84 for
services on
1 board
- -----------------------------------------------------------------------------------------------------------------------------
Eugene B. Peters $9,429.84 N/A N/A $9,429.84 for
services on
1 board
- -----------------------------------------------------------------------------------------------------------------------------
James M. Storey, Esq. $9,429.84 N/A N/A $9,429.94 for
services on
1 board
- -----------------------------------------------------------------------------------------------------------------------------
William M. Doran, Esq $0 N/A N/A $0 for
services on
1 board
- -----------------------------------------------------------------------------------------------------------------------------
Robert A. Nesher $0 N/A N/A $0 for
services on
1 board
=============================================================================================================================
</TABLE>
COMPUTATION OF YIELD AND TOTAL RETURN

From time to time the Fund may advertise yield and total return of the
Portfolios. These figures will be based on historical earnings and are not
intended to indicate future performance. No representation can be made
concerning actual future yields or returns. The yield of a Portfolio refers to
the annualized income generated by an investment in that Portfolio over a
specified 30-day period. The yield is calculated by assuming that the income
generated by the investment during that 30-day period is generated in each
period over one year and is shown as a percentage of the investment. In
particular, yield will be calculated according to the following formula:

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

For the 30-day period ended October 31, 1995, yields were 1.50% for the Equity
Value Portfolio, and 5.89% for the Fixed Income Portfolio, respectively.

S - 15
<PAGE>

The total return of a Portfolio refers to the average compounded rate of return
to a hypothetical investment for designated time periods (including but not
limited to, the period from which that Portfolio commenced operations through
the specified date), assuming that the entire investment is redeemed at the end
of each period. In particular, total return will be calculated according to the
following formula: P (1 + T)/n/ = ERV, where P = a hypothetical initial payment
of $1,000; T = average annual total return; n = number of years; and ERV =
ending redeemable value, as of the end of the designated time period, of a
hypothetical $1,000 payment made at the beginning of the designated time period.

For the fiscal year ended October 31, 1995 and for the period from December 6,
1991 (commencement of operations) through October 31, 1995, the total return was
21.25% and 15.29% for the Equity Value Portfolio and 15.27% and 8.28% for the
Fixed Income Portfolio, respectively.

PURCHASE AND REDEMPTION OF SHARES

Purchases and redemptions may be made through the Transfer Agent on days when
the New York Stock Exchange is open for business. Shares of each Portfolio are
offered on a continuous basis.

It is currently the Fund's policy to pay all redemptions in cash. The Fund
retains the right, however, to alter this policy to provide for redemptions in
whole or in part by a distribution in-kind of securities held by a Portfolio in
lieu of cash. Shareholders may incur brokerage charges on the sale of any such
securities so received in payment of redemptions.

The Fund reserves the right to suspend the right of redemption and/or to
postpone the date of payment upon redemption for any period on which trading on
the New York Stock Exchange is restricted, or during the existence of an
emergency (as determined by the SEC by rule or regulation) as a result of which
disposal or valuation of a Portfolio's securities is not reasonably practicable,
or for such other periods as the SEC has by order permitted. The Fund also
reserves the right to suspend sales of shares of any Portfolio for any period
during which the New York Stock Exchange, the Adviser, the Administrator, the
Transfer Agent and/or the custodian are not open for business.

DETERMINATION OF NET ASSET VALUE

The securities of each Portfolio are valued by the Administrator. The
Administrator will use an independent pricing service to obtain valuations of
securities. The pricing service relies primarily on prices of actual market
transactions as well as trader quotations. However, the service may also use a
matrix system to determine valuations, which system considers such factors as
security prices, yields, maturities, call features, ratings and developments
relating to specific securities in arriving at valuations. The procedures of

S - 16
<PAGE>

the pricing service and its valuations are reviewed by the officers of the Fund
under the general supervision of the Trustees.

TAXES

The following is only a summary of certain tax considerations generally
affecting the Portfolios and their shareholders, and is not intended as a
substitute for careful tax planning. Shareholders are urged to consult their
tax advisers with specific reference to their own tax situations, including
their state and local tax liabilities.

Federal Income Tax

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

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

In order to qualify for treatment as a RIC under the Code, each Portfolio must
distribute annually to its shareholders at least the sum of 90% of its net
interest income excludable from gross income plus 90% of its investment company
taxable income (generally, net investment income plus net short-term capital
gain) ("Distribution Requirement") and also must meet several additional
requirements. Among these requirements are the following: (i) at least 90% of
the Portfolio's gross income each taxable year must be derived from dividends,
interest, payments with respect to securities loans, and gains from the sale or
other disposition of stock or securities, or certain other income; (ii) the
Portfolio must derive less than 30% of its gross income each taxable year from
the sale or other disposition of stocks or securities held for less than three
months; (iii) at the close of each quarter of the Portfolio's taxable year, at
least 50% of the value of its total assets must be represented by cash and cash
items, U.S. Government securities, securities of other RICs and other
securities, with such other securities limited, in respect to any one issuer, to
an amount that does not exceed 5% of the value of the Portfolio's assets and
that does not represent more than 10% of the outstanding voting securities of
such issuer; and (iv) at the close of each quarter of the Portfolio's taxable
year, not more than 25% of the value of its assets may be invested in securities
(other than U.S. Government securities or the securities of other RICs) of any
one issuer or of two or more issuers which the Portfolio controls or which are
engaged in the same, similar or related trades or business.

Notwithstanding the Distribution Requirement described above, which requires
only that a Portfolio distribute at least 90% of its annual investment company
taxable income and

S - 17
<PAGE>

does not require any minimum distribution of net capital gain (the excess of net
long-term capital gain over net short-term capital loss), each Portfolio will be
subject to a nondeductible 4% federal excise tax to the extent it fails to
distribute by the end of any calendar year 98% of its ordinary income for that
year and 98% of its capital gain net income (the excess of short- and long-term
capital gains over short- and long-term capital losses) for the one-year period
ending on October 31 of that year, plus certain other amounts.

Any gain or loss recognized on a sale or redemption of shares of a Portfolio by
a non-exempt shareholder who is not a dealer in securities generally will be
treated as a long-term capital gain or loss if the shares have been held for
more than twelve months and otherwise generally will be treated as a short-term
capital gain or loss. If shares of a Portfolio on which a net capital gain
distribution has been received are subsequently sold or redeemed and such shares
have been held for six months or less, any loss recognized will be treated as a
long-term capital loss to the extent of the long-term capital gain distribution.

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

If any Portfolio fails to qualify as a RIC for any taxable year, it will be
taxable at regular corporate rates. In such an event, all distributions
(including capital gains distributions) will be taxable as ordinary dividends to
the extent of the Portfolio's current and accumulated earnings and profits, and
such distributions will generally be eligible for the corporate dividends-
received deduction.

State Taxes

No Portfolio is liable for any income or franchise tax in Massachusetts if it
qualifies as a RIC for federal income tax purposes. Distributions by any
Portfolio to shareholders and the ownership of shares may be subject to state
and local taxes.

PORTFOLIO TRANSACTIONS

The Portfolios have no obligation to deal with any broker-dealer or group of
broker-dealers in the execution of transactions in portfolio securities.
Subject to policies established by the Trustees of the Fund, the Adviser is
responsible for placing the orders to execute transactions for the Portfolios.
In placing orders, it is the policy of the Fund to seek to obtain the best net
results taking into account such factors as price (including the applicable
dealer spread), the size, type and difficulty of the transaction involved, the
firm's general execution and operational facilities and the firm's risk in
positioning the

S - 18
<PAGE>

securities involved. While the Adviser generally seeks reasonably competitive
spreads or commissions, the Portfolios will not necessarily be paying the lowest
spread or commission available.

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

The Adviser may, consistent with the interests of a Portfolio, select brokers on
the basis of the research services they provide to the Adviser. Such services
may include analyses of the business or prospects of a company, industry or
economic sector, or statistical and pricing services. Information so received
by the Adviser will be in addition to and not in lieu of the services required
to be performed by the Adviser under the Advisory Agreement. If, in the
judgment of the Adviser, a Portfolio or other accounts managed by the Adviser
will be benefitted by supplemental research services, the Adviser is authorized
to pay brokerage commissions to a broker furnishing such services which are in
excess of commissions which another broker may have charged for effecting the
same transaction. These research services include advice, either directly or
through publications or writings, as to the value of securities, the
advisability of investing in, purchasing or selling securities, and the
availability of securities or purchasers or sellers of securities; furnishing of
analyses and reports concerning issuers, securities or industries; providing
information on economic factors and trends; assisting in determining portfolio
strategy; providing computer software used in security analyses; and providing
portfolio performance evaluation and technical market analyses. The expenses of
the Adviser will not necessarily be reduced as a result of the receipt of such
supplemental information, such services may not be used exclusively, or at all,
with respect to the Portfolio or account generating the brokerage, and there can
be no guarantee that the Adviser will find all of such services of value in
advising that Portfolio. For the fiscal year ended October 31, 1995, the Equity
Value and Fixed Income Portfolios directed no transactions to broker-dealers for
research services. For the fiscal year ended October 31, 1994 the Equity Value
Portfolio directed transactions amounting to $13,466,242 to broker-dealers for
research services, and paid commissions of $40,782 on those transactions. For
the fiscal year ended October 31, 1994, the Fixed Income Portfolio directed no
transactions to broker-dealers for research services.

It is expected that the Portfolios may execute brokerage or other agency
transactions through the Distributor, which is a registered broker-dealer, for a
commission in

S - 19
<PAGE>

conformity with the 1940 Act, the Securities Exchange Act of 1934 and rules
promulgated by the SEC. Under these provisions, the Distributor is permitted to
receive and retain compensation for effecting portfolio transactions for the
Portfolios on an exchange if a written contract is in effect between the
Distributor and the Fund expressly permitting the Distributor to receive and
retain such compensation. These rules further require that commissions paid to
the Distributor by the Portfolios for exchange transactions not exceed "usual
and customary" brokerage commissions. The rules define "usual and customary"
commissions to include amounts which are "reasonable and fair compared to the
commission, fee or other remuneration received or to be received by other
brokers in connection with comparable transactions involving similar securities
being purchased or sold on a securities exchange during a comparable period of
time." The Trustees, including those who are not "interested persons" of the
Fund, have adopted procedures for evaluating the reasonableness of commissions
paid to the Distributor and will review these procedures periodically. For the
fiscal years October 31, 1993, 1994 and 1995, the Equity Value Fund paid the
Distributor brokerage commissions in the aggregate amount of $1,134, $0 and
$2,512. For the fiscal year ended October 31, 1995, the commission the Equity
Value Fund paid to the Distributor represented 2% of the aggregate brokerage
commissions which were paid on transactions that represented 55% of the
aggregate dollar amount of transactions that incurred commissions paid by that
Portfolio during such period. Aggregate brokerage commissions paid by the
Equity Value Fund for the fiscal years ended October 31, 1993, 1994 and 1995
were $41,664, $46,917 and $136,995, respectively. For the fiscal years ended
October 31, 1993, 1994 and 1995, the Fixed Income Fund paid the Distributor
brokerage commissions in the aggregate amount of $0, $0 and $411. For the
fiscal year ended October 31, 1995, the commission the Fixed Income Fund paid to
the Distributor represented 100% of the aggregate brokerage commissions which
were paid on transactions that represented 42% of the aggregate dollar amount of
transactions that incurred commissions paid by that Portfolio during such
period. Aggregate brokerage commissions paid by the Fixed Income Fund for the
fiscal years ended October 31, 1993, 1994 and 1995 were $0, $0 and $411,
respectively.

Since the Fund does not market its shares through intermediary brokers or
dealers, it is not the Fund's practice to allocate brokerage or principal
business on the basis of sales of its shares which may be made through such
firms. However, the Adviser may place portfolio orders with qualified broker-
dealers who recommend the Portfolios' shares to clients, and may, when a number
of brokers and dealers can provide best net results on a particular transaction,
consider such recommendations by a broker or dealer in selecting among broker-
dealers.

For the fiscal years ended October 31, 1994 and 1995, the portfolio turnover
rate for each of the Portfolios was as follows:

S - 20
<PAGE>

===========================================================================
TURNOVER RATE
--------------------------------
PORTFOLIO 1994 1995
- ---------------------------------------------------------------------------
<S> <C> <C>
Equity Value Portfolio 58.44% 84.76%
- ---------------------------------------------------------------------------
Fixed Income Portfolio 11.11% 35.84%
===========================================================================
</TABLE>
DESCRIPTION OF SHARES

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

SHAREHOLDER LIABILITY

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

LIMITATION OF TRUSTEES' LIABILITY

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

S - 21
<PAGE>

5% SHAREHOLDERS

As of February 5, 1996, the following persons were the only persons who were
record owners (or to the knowledge of the Fund, beneficial owners) of 5% or more
of the shares of the Portfolios.

Clover Capital Fixed Income Fund.

Shareholder Number of Shares %

Clover Capital Management Inc. 119,745.002 7.39%
Employee 401(k) Savings and
Deferred Profit Sharing Plan
11 Tobey Village Office Park
Pittsford, NY 14534

The Fund believes that most of the shares referred to above were held by the
persons indicated in accounts for their fiduciary, agency or custodial
customers.

EXPERTS

The financial statements in this Statement of Additional Information have been
audited by Arthur Andersen LLP, independent public accountants, as indicated in
their report, with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said report.

FINANCIAL STATEMENTS

S - 22
<PAGE>

APPENDIX

DESCRIPTION OF CORPORATE BOND RATINGS

The following descriptions of corporate bond ratings have been published by
Standard & Poor's Corporation ("S&P") and Moody's Investors Service, Inc.
("Moody's"), respectively.

Debt rated AAA has the highest rating S&P assigns to a debt obligation. Such a
rating indicates an extremely strong capacity to pay principal and interest.
Debt rated AA also qualities as high-quality debt. Capacity to pay principal
and interest is very strong, and differs from AAA issues only in small degree.
Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.

Debt rated BBB is regarded as having an adequate capacity to pay interest and
repay principal. Whereas it normally exhibits adequate protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay interest and repay principal for debt in this
category than in higher rated categories.

Debt rated BB, B, CCC, CC and C is regarded as having predominately speculative
characteristics with respect to capacity to pay interest and repay principal in
accordance with the terms of the obligation. BB indicates the least degree of
speculation and C the highest degree of speculation. While such debt will
likely have some quality and protective characteristics, these are outweighed by
large uncertainties of major risk exposures to adverse conditions.

The rating CI is reserved for income bonds on which no interest is being paid.

Debt rated D is in default, and payment of interest and/or repayment of
principal is in arrears.

Bonds which are rated Aaa by Moody's are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edged." Interest payments are protected by a large, or an exceptionally
stable, margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues. Bonds rated Aa by
Moody's are judged by Moody's to be of high quality by all standards. Together
with bonds rated Aaa, they comprise what are generally known as high-grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risk appear somewhat larger than in Aaa securities.

A - 1
<PAGE>

Bonds which are rated A possess many favorable investment attributes and are to
be considered as upper-medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.

Bonds rated Baa are considered as medium grade obligations (i.e., they are
neither highly protected nor poorly secured). Interest payments and principal
security appear adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.

Bonds which are rated Ba are judged to have speculative elements; their future
cannot be considered as well-assured. Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded during
both good and bad times over the future. Uncertainty of position characterizes
bonds in this class.

Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.

Bonds which are rated Caa are of poor standing. Such issues may be in default
or there may be present elements of danger with respect to principal or
interest.

Bonds which are rated Ca represent obligations which are speculative in a high
degree. Such issues are often in default or have other marked shortcomings.

Bonds which are rated C are the lowest rated class of bonds and issues so rated
can be regarded as having extremely poor prospects of ever attaining any real
investment standing.

DESCRIPTION OF COMMERCIAL PAPER RATINGS

The following descriptions of commercial paper ratings have been published by
S&P and Moody's, respectively.

Commercial paper rated A-1 by S&P is regarded by S&P as having the greatest
capacity for timely payment. Ratings are further refined by the use of a plus
sign to indicate the relative degree of safety. Issues rated A-1+ are those
with "extremely strong safety characteristics." Those rated A-1 reflect a
"strong" degree of safety regarding timely payment.

Commercial paper issues rated Prime-1 or Prime-2 by Moody's are judged by
Moody's to be of "superior" quality and "strong" quality respectively on the
basis of relative repayment capacity.

A - 2
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Shareholders and Trustees of
Clover Capital Equity Value Fund and
Clover Capital Fixed Income Fund of
The Advisors' Inner Circle Fund:

We have audited the accompanying statements of net assets of Clover Capital
Equity Value Fund and Clover Capital Fixed Income Fund (two of the funds
constituting The Advisors' Inner Circle Fund) as of October 31, 1995, and the
related statements of operations, changes in net assets and financial
highlights for the periods presented. These financial statements and financial
highlights are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1995, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Clover Capital Equity Value Fund and Clover Capital Fixed Income Fund of The
Advisors' Inner Circle Fund as of October 31, 1995, the results of their
operations, changes in their net assets, and financial highlights for the
periods presented, in conformity with generally accepted accounting principles.

ARTHUR ANDERSEN LLP

Philadelphia, PA
December 5, 1995
<PAGE>

STATEMENT OF NET ASSETS THE ADVISORS' INNER CIRCLE FUND

October 31, 1995
<TABLE>
<CAPTION>
Market
Value
CLOVER CAPITAL EQUITY VALUE FUND Shares (000)
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK -- 73.7%
AIR TRANSPORTATION -- 3.2%
United Air Lines Par $0.01*................................... 9,400 $ 1,653
-------
BAKERY PRODUCTS -- 5.4%
Interstate Bakeries........................................... 50,000 1,069
United Biscuits Holdings ADR.................................. 400,000 1,724
-------
2,793
-------
CHEMICALS -- 2.6%
Fuller H.B.................................................... 5,000 158
OM Group...................................................... 40,000 1,160
-------
1,318
-------
COMMUNICATIONS EQUIPMENT -- 2.8%
California Microwave*......................................... 65,000 1,430
-------
COMPUTERS & SERVICES -- 11.8%
Gtech Holdings*............................................... 50,000 1,225
Marcam*....................................................... 135,100 2,026
Policy Management Systems*.................................... 19,000 895
Sungard Data Systems*......................................... 70,600 1,942
-------
6,088
-------
ELECTRICAL SERVICES -- 3.4%
Sierra Pacific Resources...................................... 75,000 1,753
-------
ENTERTAINMENT -- 5.7%
King World Productions*....................................... 85,000 2,964
-------
MACHINERY -- 0.7%
Binks Manufacturing........................................... 15,104 372
-------
MEDICAL PRODUCTS & SERVICES -- 12.4%
Caremark International........................................ 155,000 3,197
Horizon/CMS Healthcare*....................................... 53,970 1,094
Salick Health Care*........................................... 27,500 1,000
Tenet Healthcare*............................................. 61,000 1,090
-------
6,381
-------
MISCELLANEOUS BUSINESS SERVICES -- 1.7%
Advo Systems.................................................. 16,400 418
Ideon Group................................................... 50,000 444
-------
862
-------
PHARMACEUTICALS -- 1.0%
Mallinckrodt Group............................................ 15,000 521
-------
</TABLE>
<PAGE>

STATEMENT OF NET ASSETS THE ADVISORS' INNER CIRCLE FUND

October 31, 1995
<TABLE>
<CAPTION>
Shares/Face Market
Amount Value
CLOVER CAPITAL EQUITY VALUE FUND (Continued) (000) (000)
- ---------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (Concluded)
PRINTING & PUBLISHING -- 1.8%
American Greetings......................................... 30,000 $ 945
-------
RETAIL -- 13.9%
Cash America International................................. 125,000 641
Kroger*.................................................... 50,000 1,669
Melville................................................... 60,000 1,918
Pier 1 Imports............................................. 89,250 859
Service Merchandise*....................................... 200,000 1,075
TJX........................................................ 75,000 1,013
-------
7,175
-------
RUBBER & PLASTIC -- 3.2%
Hanna (M.A.)............................................... 65,000 1,666
-------
SEMI-CONDUCTORS/INSTRUMENTS -- 4.1%
Amphenol*.................................................. 75,000 1,622
IEC Electronics*........................................... 54,500 497
-------
2,119
-------
TOTAL COMMON STOCK (Cost $34,051,501)........................ 38,040
-------
U. S. GOVERNMENT FLOATING RATE AGENCIES -- 6.7%
FHLB
4.373%, 02/14/97 (coupon indexed to the one month 11th Dis-
trict COFI minus .76%) (A)................................ $ 1,000 975
5.740%, 02/14/97 (coupon indexed to the three month T-bill
plus .15%) (A)............................................ 1,000 998
FNMA
5.55%, 06/02/99 (A)........................................ 1,500 1,485
-------
TOTAL U. S. GOVERNMENT FLOATING RATE AGENCIES
(Cost $3,466,408)........................................... 3,458
-------
REAL ESTATE INVESTMENT TRUST -- 4.3%
Manufactured Home Communities............................... 75 1,238
Meditrust................................................... 9 312
Storage Equities Pfd Convertible to 1.6835 shares........... 22 670
-------
TOTAL REAL ESTATE INVESTMENT TRUST (Cost $2,045,000)......... 2,220
-------
CORPORATE OBLIGATIONS -- 2.8%
Canandiagua Wine
8.750%, 12/15/03........................................... 500 498
Service Merchandise Callable 12/15/97 @ 104.50
9.000%, 12/15/04........................................... 1,163 947
-------
TOTAL CORPORATE OBLIGATIONS (Cost $1,449,174)................ 1,445
-------
</TABLE>
<PAGE>

STATEMENT OF NET ASSETS THE ADVISORS' INNER CIRCLE FUND

October 31, 1995
<TABLE>
<CAPTION>
Face Market
Amount Value
CLOVER CAPITAL EQUITY VALUE FUND (Concluded) (000) (000)
- -------------------------------------------------------------------------------
<S> <C> <C>
CONVERTIBLE BONDS -- 2.1%
Meditrust Convertible to 27.6396 Shares per 1,000
7.500%, 03/01/01............................................ $ 600 $ 608
Pier 1 Imports Convertible to 87.4891 Shares per 1,000
6.875%, 04/01/02............................................ 463 472
-------
TOTAL CONVERTIBLE BONDS (Cost $1,008,777)..................... 1,080
-------
U. S. TREASURY OBLIGATIONS -- 1.9%
U. S. Treasury Bill
11/24/95.................................................... 1,000 997
-------
TOTAL U. S. TREASURY OBLIGATIONS
(Cost $996,576).............................................. 997
-------
REPURCHASE AGREEMENT -- 11.0%
Lehman Securities 5.54%, dated 10/31/95, matures 11/01/95,
repurchase price $5,691,288.33 (collateralized by U.S.
Treasury Note, par value $5,630,395, 7.50%, matures
01/31/97: market value $5,860,888.72)....................... 5,691
-------
TOTAL REPURCHASE AGREEMENT (Cost $5,691,288).................. 5,691
-------
TOTAL INVESTMENTS -- 102.5% (Cost $48,708,724)................ 52,931
-------
OTHER ASSETS AND LIABILITIES -- (2.5%)
Other Assets and Liabilities, Net............................ (1,284)
-------
NET ASSETS:
Portfolio shares (unlimited authorization--no par value)
based on 3,377,737 outstanding shares of beneficial
interest.................................................... 43,080
Undistributed net investment income.......................... 97
Accumulated net realized gain on investments................. 4,248
Net unrealized appreciation on investments................... 4,222
-------
TOTAL NET ASSETS: -- 100.0%................................... $51,647
=======
Net Asset Value, Offering Price and Redemption Price Per
Share....................................................... $ 15.29
=======
</TABLE>

*Non-income producing security
ADR--American Depository Receipt
FHLB--Federal Home Loan Bank
FNMA--Federal National Mortgage Association
(A) Variable rate security -- The rate reflected on the Statement of Net Assets
is the rate in effect at October 31, 1995.

The accompanying notes are an integral part of the financial statments.
<PAGE>

STATEMENT OF NET ASSETS THE ADVISORS' INNER CIRCLE FUND

October 31, 1995
<TABLE>
<CAPTION>
Face Market
Amount Value
CLOVER CAPITAL FIXED INCOME FUND (000) (000)
- -------------------------------------------------------------------------------
<S> <C> <C>
CORPORATE OBLIGATIONS -- 38.3%
Bass America
6.750%, 08/01/99.............................................. $450 $ 457
Canandiagua Wine
8.750%, 12/15/03.............................................. 600 599
Commonwealth Edison
5.750%, 11/01/96.............................................. 400 399
CSX
8.400%, 08/01/96.............................................. 250 254
Dayton Hudson
7.500%, 03/01/99.............................................. 500 516
Florida Power & Light
5.500%, 07/01/99.............................................. 500 492
General Motors Acceptance
7.750%, 01/15/99.............................................. 400 417
Grand Metro Investment
6.500%, 09/15/99.............................................. 250 253
Masco
9.000%, 04/15/96.............................................. 300 304
6.125%, 09/15/03.............................................. 200 192
Mattel
6.750%, 05/15/00.............................................. 350 354
Northern Illinois Gas
5.875%, 05/01/00.............................................. 400 393
Private Export Funding
6.620%, 10/01/05.............................................. 250 254
Service Merchandise
9.000%, 12/15/04 callable 12/15/97 @ 104.50................... 600 488
Union Electric
5.500%, 03/01/97.............................................. 250 248
-------
TOTAL CORPORATE OBLIGATIONS (Cost $5,565,520)................... 5,620
-------
U. S. TREASURY OBLIGATIONS -- 29.4%
U. S. Treasury Bonds
9.375%, 02/15/06.............................................. 400 500
7.500%, 11/15/16.............................................. 550 619
8.000%, 11/15/21.............................................. 250 299
U. S. Treasury Notes
6.875%, 07/31/99.............................................. 500 518
7.500%, 10/31/99.............................................. 250 265
7.500%, 11/15/01.............................................. 500 541
7.500%, 05/15/02.............................................. 500 543
7.250%, 05/15/04.............................................. 650 703
7.500%, 02/15/05.............................................. 300 331
-------
TOTAL U. S. TREASURY OBLIGATIONS (Cost $4,061,639).............. 4,319
-------
</TABLE>
<PAGE>

STATEMENT OF NET ASSETS THE ADVISORS' INNER CIRCLE FUND

October 31, 1995
<TABLE>
<CAPTION>
Face Market
Amount Value
CLOVER CAPITAL FIXED INCOME FUND (Continued) (000) (000)
- -------------------------------------------------------------------------------
<S> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 20.0%
FHLB
4.373%, 02/14/97 (coupon indexed to the one month 11th
District COFI minus .76%) (A)................................ $250 $ 244
FHLMC CMO Pool #1546-H
7.000%, 12/15/22.............................................. 390 387
FHLMC Pool #252641
8.000%, 07/01/07.............................................. 115 117
FHLMC Pool #277449
8.500%, 09/01/09.............................................. 108 112
FNMA CMO-Remic 1993-95 Pe
6.500%, 10/25/07.............................................. 750 750
FNMA MTN
6.250%, 01/14/04.............................................. 250 243
FNMA Pool #G93-21-Remic
6.600%, 11/25/07.............................................. 184 181
GNMA Pool #013125
8.000%, 10/15/06.............................................. 43 45
GNMA Pool #187899
8.000%, 05/15/17.............................................. 293 302
GNMA Pool #196477
10.000%, 04/15/10............................................. 141 151
GNMA Pool #202886
8.000%, 03/15/17.............................................. 293 302
GNMA Pool #221235
8.500%, 07/15/17.............................................. 103 107
-------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (Cost $2,932,775)...... 2,941
-------
CONVERTIBLE BONDS -- 6.0%
Meditrust Convertible to 27.6396 Shares
7.500%, 03/01/01.............................................. 570 577
Pier 1 Imports Convertible to 83.33 Shares
6.875%, 04/01/02.............................................. 300 306
-------
TOTAL CONVERTIBLE BONDS (Cost $870,725)......................... 883
-------
REPURCHASE AGREEMENT -- 5.5%
Lehman Brothers Securities 5.54% dated 10/31/95, matures
11/01/95, repurchase price $810,309.12 (collateralized by U.S.
Treasury Note, par value $818,927.31, 6.625%, matures
03/31/97: market value $834,456.33)........................... 810
-------
TOTAL REPURCHASE AGREEMENT (Cost $810,309)...................... 810
-------
TOTAL INVESTMENTS -- 99.2% (Cost $14,240,968)................... 14,573
-------
OTHER ASSETS AND LIABILITIES -- 0.8%
Other Assets and Liabilities, Net.............................. 112
-------
</TABLE>
<PAGE>

STATEMENT OF NET ASSETS THE ADVISORS' INNER CIRCLE FUND

October 31, 1995
<TABLE>
<CAPTION>
Face Market
Amount Value
CLOVER CAPITAL FIXED INCOME FUND (Concluded) (000) (000)
- -------------------------------------------------------------------------------
<S> <C> <C>
NET ASSETS:
Portfolio shares (unlimited authorization -- no par value)
based on 1,484,660 outstanding shares of beneficial interest.. $14,277
Accumulated net realized gain on investments................... 76
Net unrealized appreciation on investments..................... 332
-------
TOTAL NET ASSETS: (100.0%)...................................... $14,685
-------
Net Asset Value, Offering Price and Redemption Price Per
Share......................................................... $ 9.89
=======
</TABLE>

CMO -- Collateralized Mortgage Obligation
FHLB -- Federal Home Loan Bank
FHLMC -- Federal Home Loan Mortgage Corporation
FNMA -- Federal National Mortgage Association
GNMA -- Government National Mortgage Association
MTN -- Medium Term Note
REMIC -- Real Estate Mortgage Investment Conduit
(A) Variable rate securities -- The rate reflected on the Statement of Net
Assets is the rate in effect as of October 31, 1995.

The accompanying notes are an integral part of the financial statements.
<PAGE>

STATEMENT OF OPERATIONS THE ADVISORS' INNER CIRCLE FUND

For the year ending October 31, 1995

<TABLE>
<CAPTION>
CLOVER CAPITAL CLOVER CAPITAL
EQUITY VALUE FIXED INCOME
FUND FUND
-------------- --------------
11/01/94 11/01/94
TO 10/31/95 TO 10/31/95
(000) (000)
- --------------------------------------------------------------------------------
<S> <C> <C>
Investment Income:
Dividend Income................................. $ 459 $ --
Interest Income................................. 641 791
- --------------------------------------------------------------------------------
Total Investment Income........................ 1,100 791
- --------------------------------------------------------------------------------
Expenses:
Administrator Fees.............................. 74 50
Investment Advisory Fees........................ 278 51
Investment Advisory Fee Waiver.................. (40) (51)
Contributions by Adviser........................ -- (17)
Custodian Fees.................................. 6 5
Transfer Agent Fees............................. 42 18
Professional Fees............................... 23 17
Trustee Fees.................................... 4 3
Registration Fees............................... 12 6
Printing Fees................................... 7 5
Pricing Fees.................................... 2 1
Insurance and Other Fees........................ 2 1
Amortization of Deferred Organizational Costs... 4 3
- --------------------------------------------------------------------------------
Total Expenses................................. 414 92
- --------------------------------------------------------------------------------
Net Investment Income......................... 686 699
- --------------------------------------------------------------------------------
Net Realized Gain from Securities Sold.......... 4,206 76
Net Unrealized Appreciation of Investment Secu-
rities......................................... 1,800 823
- --------------------------------------------------------------------------------
Net Realized and Unrealized Gain on Invest-
ments......................................... 6,006 899
- --------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Opera-
tions.......................................... $6,692 $1,598
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.
<PAGE>

STATEMENT OF CHANGES IN NET ASSETS THE ADVISORS' INNER CIRCLE FUND

For the year ending October 31, 1995

<TABLE>
<CAPTION>
CLOVER CAPITAL CLOVER CAPITAL
EQUITY VALUE FIXED INCOME
FUND FUND
----------------------- -----------------------
11/01/94 11/01/93 11/01/94 11/01/93
TO 10/31/95 TO 10/31/94 TO 10/31/95 TO 10/31/94
(000) (000) (000) (000)
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Activities:
Net Investment Income......... $ 686 $ 135 $ 699 $ 509
Net Realized Gain on
Securities Sold.............. 4,206 1,834 76 13
Net Unrealized Appreciation
(Depreciation) of Investment
Securities................... 1,800 1,199 823 (824)
- -------------------------------------------------------------------------------
Net Increase (Decrease) in
Net Assets Resulting from
Operations.................. 6,692 3,168 1,598 (302)
- -------------------------------------------------------------------------------
Distributions to Shareholders:
Net Investment Income......... (602) (127) (696) (513)
Capital Gains................. (1,755) (266) (24) (568)
- -------------------------------------------------------------------------------
Total Distributions.......... (2,357) (393) (720) (1,081)
- -------------------------------------------------------------------------------
Capital Share Transactions:
Shares Issued................. 23,522 8,392 5,633 4,034
Shares Issued in Lieu of Cash
Distributions................ 2,339 393 588 1,010
Shares Redeemed............... (3,798) (1,381) (2,176) (1,865)
- -------------------------------------------------------------------------------
Increase in Net Assets Derived
from Capital Share
Transactions................. 22,063 7,404 4,045 3,179
- -------------------------------------------------------------------------------
Total Increase in Net As-
sets........................ 26,398 10,179 4,923 1,796
- -------------------------------------------------------------------------------
Net Assets:
Beginning of Period........... 25,249 15,070 9,762 7,966
- -------------------------------------------------------------------------------
End of Period................. $51,647 $25,249 $14,685 $ 9,762
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Shares Issued and Redeemed:
Shares Issued................ 1,618 653 583 419
Issued in Lieu of Cash
Distributions............... 179 32 62 104
Redeemed..................... (257) (109) (228) (189)
- -------------------------------------------------------------------------------
Net Increase in Share
Transactions................. 1,540 576 417 334
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.
<PAGE>

FINANCIAL HIGHLIGHTS

For a Share Outstanding Throughout the Period

<TABLE>
<CAPTION>
NET NET
ASSET REALIZED AND DISTRIBUTIONS DISTRIBUTIONS ASSET
VALUE NET UNREALIZED FROM NET FROM VALUE
BEGINNING INVESTMENT GAINS OR LOSSES INVESTMENT CAPITAL END
OF PERIOD INCOME ON SECURITIES INCOME GAINS OF PERIOD
- -----------------------------------------------------------------------------------
CLOVER CAPITAL EQUITY VALUE FUND
- --------------------------------
<S> <C> <C> <C> <C> <C> <C>
1995 $13.74 0.24 2.46 (0.22) (0.93) $15.29
1994 $11.94 0.08 2.01 (0.08) (0.21) $13.74
1993 $10.45 0.10 1.54 (0.10) (0.05) $11.94
1992(1) $10.00 0.10 0.44 (0.09) -- $10.45
<CAPTION>
CLOVER CAPITAL FIXED INCOME FUND
- --------------------------------
<S> <C> <C> <C> <C> <C> <C>
1995 $ 9.14 0.58 0.77 (0.58) (0.02) $ 9.89
1994 $10.85 0.57 (0.92) (0.57) (0.79) $ 9.14
1993 $10.23 0.61 0.72 (0.61) (0.10) $10.85
1992(1) $10.00 0.56 0.23 (0.56) -- $10.23
</TABLE>
<PAGE>

THE ADVISORS' INNER CIRCLE FUND

<TABLE>
<CAPTION>
RATIO
RATIO OF NET
OF EXPENSES INCOME (LOSS)
NET RATIO TO AVERAGE TO AVERAGE
ASSETS RATIO OF NET NET ASSETS NET ASSETS
END OF EXPENSES INCOME (EXCLUDING (EXCLUDING PORTFOLIO
TOTAL OF PERIOD TO AVERAGE TO AVERAGE WAIVERS AND WAIVERS AND TURNOVER
RETURN (000) NET ASSETS NET ASSETS CONTRIBUTIONS) CONTRIBUTIONS) RATE
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
21.25 % $51,647 1.10% 1.82% 1.20% 1.72% 84.76%
17.80 % 25,249 1.14% 0.71% 1.30% 0.55% 58.44%
15.83 % 15,070 1.18% 0.89% 1.51% 0.56% 82.51%
5.94 %* 9,005 1.20%* 1.15%* 2.09%* 0.26%* 31.00%
15.27 % $14,685 0.80% 6.13% 1.40% 5.53% 35.84%
(3.54)% 9,762 0.80% 5.88% 1.46% 5.22% 11.11%
13.40 % 7,966 0.78% 5.62% 1.29% 5.11% 68.61%
9.05 %* 8,982 0.80%* 6.28%* 1.76%* 5.32%* 113.00%
</TABLE>

(1) The Clover Capital Fixed Income Fund and the Clover Capital Equity Value
Fund commenced operations on December 6, 1991.
* Annualized

The accompanying notes are an integral part of the financial statements.
<PAGE>

NOTES TO FINANCIAL STATEMENTS THE ADVISORS' INNER CIRCLE FUND

October 31, 1995
1. Organization:

THE ADVISORS' INNER CIRCLE FUND (the "Trust") is organized as a Massachusetts
business trust under a Declaration of Trust dated July 18, 1991. The Trust is
registered under the Investment Company Act of 1940, as amended, as a
diversified open-end management investment company with eleven portfolios. The
financial statements included herein present those of the Clover Capital Equity
Value Fund and the Clover Capital Fixed Income Fund (the "Funds"). The
financial statements of the remaining portfolios are presented separately. The
assets of each portfolio are segregated, and a Shareholder's interest is
limited to the portfolio in which shares are held.

2. Significant Accounting Policies:

The following is a summary of the significant accounting policies followed by
the Funds.

Security Valuation -- Investments in equity securities which are traded on
a national exchange (or reported on the NASDAQ national market system) are
stated at the last quoted sales price if readily available for such equity
securities on each business day; other equity securities traded in the
over-the-counter market and listed equity securities for which no sale was
reported on that date are stated at the last quoted bid price. Debt
obligations exceeding sixty days to maturity for which market quotations
are readily available are valued at the most recently quoted bid price.
Debt obligations with sixty days or less remaining until maturity may be
valued at their amortized cost, which approximates market value.

Federal Income Taxes -- It is each Fund's intention to qualify as a
regulated investment company by complying with the appropriate provisions
of the Internal Revenue Code of 1986, as amended. Accordingly, no
provisions for Federal income taxes are required.

Security Transactions and Related Income -- Security transactions are
accounted for on the date the security is purchased or sold (trade date).
Dividend income is recognized on the ex-dividend date, and interest income
is recognized on the accrual basis. Costs used in determining realized
gains and losses on the sales of investment securities are those of the
specific securities sold adjusted for the accretion and amortization of
purchase discounts and premiums during the respective holding period.
Purchase discounts and premiums on securities held by the Funds are
accreted and amortized to maturity using the scientific interest method,
which approximates the effective interest method.

Repurchase Agreements -- Securities pledged as collateral for repurchase
agreements are held by the custodian bank until the respective agreements
mature. Provisions of the repurchase agreements ensure that the market
value of the collateral, including accrued interest thereon, is sufficient
in the event of the default of the counterparty. If the counterparty
defaults and the value of the collateral declines or if the counterparty
enters an insolvency proceeding, realization of the collateral by the Funds
may be delayed or limited.

Net Asset Value Per Share -- The net asset value per share of each Fund is
calculated on each business day, by dividing the total value of each Fund's
assets, less liabilities, by the number of shares outstanding.
<PAGE>

NOTES TO FINANCIAL STATEMENTS (CONTINUED) THE ADVISORS' INNER CIRCLE FUND

October 31, 1995

Other -- Expenses that are directly related to one of the Funds are charged
to that Fund. Other operating expenses of the Trust are prorated to the
Funds on the basis of relative daily net assets.

Distributions from net investment income are declared quarterly and paid to
Shareholders on a quarterly basis for the Equity Value Fund and declared
daily and paid monthly for the Fixed Income Fund. Any net realized capital
gains on sales of securities are distributed to Shareholders at least
annually.

Distributions from net investment income and net realized capital gains are
determined in accordance with the U.S. Federal income tax regulations,
which may differ from those amounts determined under generally accepted
accounting principles. These book/tax differences are either temporary or
permanent in nature. To the extent these differences are permanent, they
are charged or credited to paid-in-capital in the period that the
differences arise. These reclassifications have no effect on net assets or
net asset value.

3. Organization Costs and Transactions with Affiliates:

The Clover Capital Equity Value Fund and the Clover Capital Fixed Income Fund
incurred organization costs of approximately $15,000 and $14,000 respectively.
These costs have been capitalized by the funds and are being amortized over
sixty months commencing with operations. In the event of the initial shares of
the fund redeemed by any holder thereof during the period that the fund is
amortizing its organizational costs, the redemption proceeds payable to the
holder thereof by the fund will be reduced by the unamortized organizational
costs in the same ratio as the number of initial shares being redeemed bears to
the number of initial shares outstanding at the time of redemption. These costs
include legal fees of approximately $7,000 per fund for organizational work
performed by a law firm of which an officer of the fund is a partner.

Certain officers and trustees of the Trust are also officers of the
Administrator and/or SENGI Financial Services Company (the "Distributor"). Such
officers and trustees are paid no fees by the Trust for serving as officers and
trustees of the Trust.

4. Administration, Shareholder Servicing and Distribution Agreements:

The Trust and the Administrator are parties to an Administration Agreement,
under which the Administrator provides management and administrative services
for an annual fee of .20% of the average daily net assets of each of the Funds.
There is a minimum annual fee of $50,000 per Fund payable to the Administrator
for services rendered to the Funds under the Administration Agreement.

DST Systems, Inc., (the "Transfer Agent") serves as the transfer agent and
dividend distributing agent for the Funds under a transfer agency agreement
with the Trust.

The Trust and the Distributor are parties to a Distribution Agreement. The
Distributor receives no fees for its distribution services under this
agreement.
<PAGE>

NOTES TO FINANCIAL STATEMENTS (CONTINUED) THE ADVISORS' INNER CIRCLE FUND

October 31, 1995
5. Investment Advisory and Custodian Agreements:

The Trust and Clover Capital Management, Inc. (the "Adviser") are parties to an
Investment Advisory Agreement under which the Adviser receives an annual fee
equal to .74% of the average daily net assets of the Equity Value Fund and .45%
of the average daily net assets of the Fixed Income Fund. The Adviser has
voluntarily agreed for an indefinite period of time, to waive all or a portion
of its fees (and to reimburse the expenses of the Funds) in order to limit
operating expenses to not more than 1.20% of the average daily net assets for
net assets below $20 million and to not more than 1.10% for net assets of $20
million or more for the Equity Value Fund. Operating expenses for the Fixed
Income Fund are limited to not more than .80% of the average daily net assets
for net assets below $20 million and to not more than .75% for net assets of
$20 million or more. Fee waivers and expense reimbursements are voluntary and
may be terminated at any time.

CoreStates Bank, N.A. acts as custodian (the "Custodian") for the Funds. Fees
of the Custodian are being paid on the basis of the net assets of the Funds.
The Custodian plays no role in determining the investment policies of the Trust
or which securities are to be purchased or sold in the Funds.

6. Investment Transactions:

The cost of security purchases and the proceeds from security sales, other than
short-term investments, for the year ended October 31, 1995, are as follows:

<TABLE>
<CAPTION>
EQUITY VALUE FIXED INCOME
FUND FUND
(000) (000)
------------ ------------
<S> <C> <C>
Purchases
Government........................................... $ 997 $2,818
Other................................................ 40,001 3,808
Sales
Government........................................... $ 0 $ 625
Other................................................ 24,985 3,045
</TABLE>

At October 31, 1995, the total cost of securities and the net realized gains or
losses on securities sold for Federal income tax purposes was not materially
different from amounts reported for financial reporting purposes. The aggregate
gross unrealized appreciation and depreciation for securities held by the Funds
at October 31, 1995, is as follows:

<TABLE>
<CAPTION>
EQUITY VALUE FIXED INCOME
FUND FUND
(000) (000)
------------ ------------
<S> <C> <C>
Aggregate gross unrealized appreciation............... $ 5,671 $382
Aggregate gross unrealized depreciation............... (1,449) (50)
------- ----
Net unrealized appreciation........................... $ 4,222 $332
======= ====
</TABLE>
<PAGE>

NOTES TO FINANCIAL STATEMENTS (CONCLUDED) THE ADVISORS' INNER CIRCLE FUND

October 31, 1995

7. Concentration of Credit Risk:

The Fixed Income Fund invests primarily in fixed income securities which are
rated in the top four rating categories by either Moody's Investors Services,
Inc. ("Moody's) or Standard & Poor's Corporation ("S&P"), or if not rated,
determined by the Adviser to be of comparable quality. The ability of the
issuers of the securities held by the Fund to meet their obligations may be
affected by economic developments in a specific industry, state or region.

The summary of credit quality rating for securities held by the Fund at October
31, 1995 is as follows:

<TABLE>
<CAPTION>
S&P MOODY'S
------------------- ---------------------
<S> <C> <C> <C> <C>
Bonds: AAA 55.7% Aaa 57.4%
AA 7.8% Aa 2.7%
A 13.8% A 18.2%
BBB 11.9% Baa 12.6%
B 9.6% B 9.1%
NR 1.2%
------ ------
100.0% 100.0%
</TABLE>