CAMBRIDGE SERIES TRUST, 497, 1995-04-13

CAMBRIDGE SERIES TRUST
497, 1995-04-13

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<PAGE>
PROSPECTUS
THE MENTOR FUNDS
The Mentor Funds (the "Trust"), an open-end management investment company
(a mutual fund), offers investors interests in the six separate diversified
investment portfolios described below (collectively, the "Portfolios," and each
individually, a "Portfolio").
Mentor Capital Growth Portfolio -- a Portfolio seeking long-term
appreciation of capital by investing primarily in common stock of companies
believed to have appreciation potential. Commonwealth Advisors, Inc. acts as
investment manager to the Portfolio.
Mentor Quality Income Portfolio -- a Portfolio seeking high current income
consistent with prudent risk by investing in debt securities, including both
government and corporate obligations, and in other income-producing securities.
Commonwealth Advisors, Inc. acts as investment manager to the Portfolio.
Mentor Municipal Income Portfolio -- a Portfolio seeking to provide
investors with a high level of current income exempt from federal regular income
tax, consistent with preservation of capital, by investing, under normal market
conditions, at least 80% of its total assets in tax-exempt municipal securities
rated investment grade, or deemed by Van Kampen/American Capital Management
Inc., the Portfolio's sub-adviser, to be of comparable quality.
Mentor Income and Growth Portfolio -- a Portfolio seeking to provide a
conservative combination of income and growth of capital, consistent with
capital protection as determined by the Portfolio's sub-adviser, Wellington
Management Company.
Mentor Perpetual Global Portfolio -- a Portfolio seeking to provide growth
of capital as determined by Perpetual Portfolio Management Limited, the
Portfolio's sub-adviser, through a diversified portfolio of marketable
securities, primarily equity securities, including common stocks, preferred
stocks and debt securities convertible into common stocks.
Mentor/Cambridge Growth Portfolio -- a Portfolio seeking growth of capital
through professional management and diversification of investment securities
having potential of capital appreciation. Commonwealth Advisors, Inc. acts as
investment manager to the Portfolio. The Trustees of the Trust have approved the
combination of the Mentor/Cambridge Growth Portfolio with the Mentor Capital
Growth Portfolio. See "Investment Information -- Mentor/Cambridge Growth
Portfolio," in this Prospectus.
There can be no assurance that any Portfolio will achieve its investment
objective. Each Portfolio may also invest in certain other types of securities
as further described in the prospectus. Until April 12, 1995, the Trust was
known as Cambridge Series Trust.
THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS OF
ANY BANK, ARE NOT ENDORSED OR GUARANTEED BY ANY BANK, AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
GOVERNMENT AGENCY. INVESTMENT IN THESE SHARES INVOLVES INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
This combined prospectus contains the information you should read and know
before you invest in any of the Portfolios of the Trust. Keep this prospectus
for future reference.
The Trust has also filed a combined Statement of Additional Information for
each Portfolio, dated April 13, 1995, with the Securities and Exchange
Commission. The information contained in the combined Statement of Additional
Information is incorporated by reference in this prospectus. You may request a
copy of the combined Statement of Additional Information free of charge, obtain
other information, or make inquiries about any of the Portfolios by writing the
particular Portfolio or Portfolios or by calling 1-800-382-0016.
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.
PROSPECTUS DATED APRIL 13, 1995

<PAGE>
TABLE OF CONTENTS

SUMMARY OF PORTFOLIO EXPENSES............................................ 1
THE MENTOR FUNDS
FINANCIAL HIGHLIGHTS
CLASS A SHARES........................................................... 4
THE MENTOR FUNDS
FINANCIAL HIGHLIGHTS
CLASS B SHARES........................................................... 6
THE MENTOR FAMILY OF FUNDS............................................... 8
INVESTMENT INFORMATION................................................... 8
Investment Objectives and Policies..................................... 8
Mentor/Cambridge Growth Portfolio...................................... 8
Mentor Capital Growth Portfolio........................................ 9
Mentor Quality Income Portfolio........................................ 10
Mentor Municipal Income Portfolio...................................... 10
Mentor Income and Growth Portfolio..................................... 13
Mentor Perpetual Global Portfolio...................................... 15
Investment Practices................................................... 16
NET ASSET VALUE.......................................................... 23
HOW TO BUY SHARES........................................................ 24
Minimum Investment Required............................................ 24
What Shares Cost....................................................... 25
When Net Asset Value is Determined..................................... 26
Purchases at Net Asset Value........................................... 26
Reducing the Sales Charge for Class A Shares........................... 26
Systematic Investment Program.......................................... 27
Certificates and Confirmations......................................... 27
Dividends.............................................................. 27
Capital Gains.......................................................... 28
Retirement Plans....................................................... 28
EXCHANGE PRIVILEGE....................................................... 28
REDEEMING SHARES......................................................... 29
Contingent Deferred Sales Charge....................................... 29
Through a Financial Institution........................................ 30
Directly from the Portfolios........................................... 31
Redemptions Before Purchase Instruments Clear.......................... 32
Systematic Withdrawal Program.......................................... 32
Accounts with Low Balances............................................. 32
INFORMATION ABOUT THE MENTOR FUNDS....................................... 32
INVESTMENT MANAGEMENT OF THE TRUST....................................... 33
Investment Adviser..................................................... 33
The Sub-Advisers....................................................... 34
Sub-Advisers' Profiles................................................. 34
Distribution of Portfolio Shares....................................... 35
Administration of the Trust............................................ 36
Brokerage Transactions................................................. 36
Shareholder Servicing Plan............................................. 37
Expenses of the Portfolios and the Class A and Class B Shares.......... 37
SHAREHOLDER INFORMATION.................................................. 39
Voting Rights.......................................................... 39
Massachusetts Partnership Law.......................................... 39
TAX INFORMATION.......................................................... 39
PERFORMANCE INFORMATION.................................................. 40

<PAGE>
SUMMARY OF PORTFOLIO EXPENSES

SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<CAPTION>
CLASS A CLASS B
SHARES SHARES
<S> <C> <C>
Maximum Sales Load Imposed on Purchases (as a percentage of offering price)
Mentor/Cambridge Growth Portfolio................................................... 5.50% None
Mentor Capital Growth Portfolio..................................................... 5.50% None
Mentor Quality Income Portfolio..................................................... 4.75% None
Mentor Municipal Income Portfolio................................................... 4.75% None
Mentor Income and Growth Portfolio.................................................. 5.50% None
Mentor Perpetual Global Portfolio................................................... 5.50% None
Maximum Sales Load Imposed on Reinvested Dividends.................................... None None
Maximum Deferred Sales Load (as a percentage of original purchase price or redemption
proceeds, as applicable)............................................................ 1.00%(1) 1.00%(1)
Exchange Fee.......................................................................... None None
</TABLE>

ANNUAL PORTFOLIO OPERATING EXPENSES
(As a percentage of average net assets)
<TABLE>
<CAPTION>
MENTOR/ MENTOR MENTOR MENTOR MENTOR MENTOR
CAMBRIDGE CAPITAL QUALITY MUNICIPAL INCOME AND PERPETUAL
GROWTH GROWTH INCOME INCOME GROWTH GLOBAL
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C> <C> <C>
CLASS A SHARES
Investment Advisory Fee................................. 0.80% 0.80% 0.60% 0.60% 0.75% 0.55%(2)
12b-1 Fees.............................................. None None None None None None
Shareholder Service Plan Fees........................... 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
Total Other Expenses.................................... 0.77% 0.65% 0.54% 0.48% 0.78% 1.44%(3)
Total Portfolio Operating Expenses(4)................. 1.81% 1.70% 1.39% 1.33% 1.78% 2.24%
</TABLE>

<TABLE>
<CAPTION>
MENTOR/ MENTOR MENTOR MENTOR MENTOR
CAMBRIDGE MENTOR QUALITY MUNICIPAL INCOME AND PERPETUAL
GROWTH CAPITAL GROWTH INCOME INCOME GROWTH GLOBAL
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C> <C> <C>
CLASS B SHARES
Investment Advisory Fee........................... 0.80% 0.80% 0.60% 0.60% 0.75% 0.55%(2)
12b-1 Fees........................................ 0.75% 0.75% 0.50% 0.50% 0.75% 0.75%
Shareholder Service Plan Fees..................... 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
Total Other Expenses.............................. 0.77% 0.65% 0.54% 0.48% 0.78% 1.44%(3)
Total Portfolio Operating Expenses(4)........... 2.57% 2.45% 1.89% 1.83% 2.53% 2.99%
</TABLE>

(1) On Class A shares a contingent deferred sales charge ("CDSC") is applicable
only if shares over $1 million are purchased at NAV and redeemed within one
year. On Class B shares a CDSC is applicable only if shares purchased are
redeemed within one year of original purchase.
(2) The investment advisory fee on the Mentor Perpetual Global Portfolio
has been reduced to reflect the anticipated voluntary waiver of a
portion of the investment advisory fee by the investment advisor
through March 31, 1995. The investment adviser can terminate this
voluntary waiver of fees prior to that time in its sole discretion
as long as, absent the waiver, the total portfolio operating
expenses would not exceed those shown in the table. The maximum
investment advisory fee on the Global Portfolio is 1.10%.
(3) With respect to the Global Portfolio, the estimated total other expenses
have been reduced to reflect the anticipated voluntary waiver of certain
Portfolio expenses by the administrator. The administrator can terminate
this voluntary waiver prior to March 31, 1995 in its sole discretion as long
as, absent the waiver, the total portfolio operating expenses would not
exceed those shown in the table. Total other expenses for the Global
Portfolio are estimated based on average expenses expected to be incurred
during the period ending September 30, 1995. During the course of this
period, expenses may be more or less than the average amount shown.
(4) Commonwealth Advisors, Inc. (formerly Cambridge Investment Advisors, Inc.)
and Mentor Investment Group, Inc. (formerly Investment Management Group,
Inc.), the administrator of the Trust, may at any time waive all or a
portion of their fees in respect of a Portfolio. During the Trust's last
fiscal year, Commonwealth Advisors, Inc. waived a portion of its investment
advisory fees in respect of the Class A and Class B shares of the Mentor
Municipal Income Portfolio and the Global Portfolio. Also during the Trust's
last fiscal year, Cambridge Administrative Services, the Trust's former
administrator, waived a portion of its administrative fees in respect to the
Class A and Class B shares of the Mentor/Cambridge Growth, Quality Income,
Income and Growth and Global Portfolios. The amounts shown in the table have
been restated to show the expenses of the Portfolios in the absence of the
waivers. During the most recent fiscal year, the Municipal Income Portfolio
paid investment advisory fees, reflecting the waiver, of 0.50% for Class A
shares, and 0.50% for Class B shares. During the most recent fiscal year,
Other Expenses and Total Fund Operating Expenses, reflecting the applicable
waivers, were as follows: the Growth Portfolio -- 0.76% and 1.81%,
respectively, for Class A shares, and 0.76% and 2.56%, respectively, for
Class B shares; the Quality Income Portfolio -- 0.53% and 1.38%,
respectively, for Class A shares and 0.53% and 1.88%, respectively, for
Class B shares; the Municipal Income Portfolio -- 0.49% and 1.24%,
respectively, for Class A shares, and 0.49% and 1.74%, respectively, for
Class B shares; the Income and Growth Portfolio -- 0.75% and 1.75%,
respectively, for Class A shares, and 0.69% and 2.44%, respectively, for
Class B shares. Fee waivers, with respect to the Global Portfolio, are
anticipated for the current fiscal period. During the most recent fiscal
year, Other Expenses and Total Fund Operating Expenses, reflecting the
applicable waivers, were 1.84% and 2.09%, respectively, for Class A shares,
and 1.79% and 2.79%, respectively, for Class B shares.

THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF A PORTFOLIO WILL BEAR, EITHER
DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS OF THE VARIOUS COSTS AND
EXPENSES, SEE "HOW TO BUY SHARES," "INVESTMENT MANAGEMENT OF THE TRUST," AND
"CAMBRIDGE SERIES TRUST INFORMATION."

Long-term Class B shareholders may pay more than the economic equivalent of
the maximum front-end sales charges permitted under the rules of the National
Association of Securities Dealers, Inc.

<PAGE>
EXAMPLE
<TABLE>
<CAPTION>
MENTOR/ MENTOR MENTOR MENTOR MENTOR MENTOR
CAMBRIDGE CAPITAL QUALITY MUNICIPAL INCOME AND PERPETUAL
GROWTH GROWTH INCOME INCOME GROWTH GLOBAL
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C> <C> <C>
You would pay the following expenses on
a $1,000 investment assuming (1) 5%
annual return and (2) no redemption at
the end of each time period:
CLASS A SHARES
1 year................................ $ 73 $ 72 $ 61 $ 61 $ 73 $ 77
3 years............................... 109 106 90 88 109 122
5 years............................... 148 143 120 117 147 169
10 years.............................. 257 246 206 201 254 299
CLASS B SHARES
1 year................................ $ 26 $ 25 $ 19 $ 19 $ 26 $ 30
3 years............................... 80 76 59 58 79 92
5 years............................... 136 131 102 99 135 157
10 years.............................. 290 279 220 215 287 331
You 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:
CLASS A SHARES
1 year................................ $ 73 $ 72 $ 61 $ 61 $ 73 $ 77
3 years............................... 109 106 90 88 109 122
5 years............................... 148 143 120 117 147 169
10 years.............................. 257 246 206 201 254 299
CLASS B SHARES
1 year................................ $ 26 $ 25 $ 19 $ 19 $ 26 $ 30
3 years............................... 80 76 59 58 79 92
5 years............................... 136 131 102 99 135 157
10 years.............................. 290 279 220 215 287 331
</TABLE>

The above examples should not be considered a representation of past or
future expenses. Actual expenses may be greater or less than those shown.

<PAGE>
THE MENTOR FUNDS
FINANCIAL HIGHLIGHTS
CLASS A SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
The following table has been audited by KPMG Peat Marwick LLP, the Trust's
independent auditors. Their report dated November 11, 1994 on the Portfolios'
financial statements for the period ended September 30, 1994 is included in the
Combined Annual Report dated September 30, 1994, which is incorporated by
reference. This table should be read in conjunction with each of the Portfolio's
financial statements and notes thereto, which may be obtained free of charge
from the Trust. Until April 12, 1995, Mentor Quality Income Portfolio was known
as "Cambridge Government Income Portfolio"; until that time, the Portfolio was
required, among other things, to invest at least 65% of its assets in U.S.
government securities.

<TABLE>
<CAPTION>
MENTOR/CAMBRIDGE GROWTH MENTOR CAPITAL GROWTH PORTFOLIO
PORTFOLIO (FORMERLY CAMBRIDGE (FORMERLY CAMBRIDGE CAPITAL
GROWTH PORTFOLIO) GROWTH PORTFOLIO)
SEPTEMBER 30, SEPTEMBER 30,
1994 1993 1992* 1994 1993 1992*
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE PER SHARE, BEGINNING
OF PERIOD $ 16.69 $ 14.14 $ 14.18 $ 15.26 $ 14.21 $ 14.18
Income from investment operations
Net investment income (loss) (0.11) (0.07) 0.03 0.09 0.14 0.08
Net realized and unrealized gain
(loss) on investments (1.90) 2.65 (0.07) (0.30) 1.02 0.03
Total from investment operations (2.01) 2.58 (0.04) (0.21) 1.16 0.11
Less distributions
Dividends from income -- -- -- (0.04) (0.11) (0.08)
Distributions from capital gains -- -- -- (0.13) -- --
Distributions in excess of net
investment income -- (0.03) -- -- -- --
NET ASSET VALUE PER SHARE, END OF
PERIOD $ 14.68 $ 16.69 $ 14.14 $ 14.88 $ 15.26 $ 14.21
Total return (12.04%) 18.23% (0.28%) (1.37%) 8.21% 0.78%
Ratios to Average Net Assets(a)
Expenses 1.81% 1.66% 1.33% 1.70% 1.49% 1.14%
Net investment income (loss) (0.65%) (0.49%) 0.59% 0.53% 0.96% 1.54%
Expense adjustment(b) 0.01% 0.12% 0.39% -- 0.10% 0.29%
Supplemental Data
Net assets, end of period (000
omitted) $14,579 $19,708 $11,464 $21,181 $31,360 $20,864
Portfolio turnover rate 132% 137% 26% 149% 192% 61%
</TABLE>

* Reflects operations for the period from April 29, 1992 (date of initial
public investment) to September 30, 1992.
** Reflects operations for the period from May 24, 1993 (date of initial
public investment) to September 30, 1993.
*** Reflects operations for the period from March 29, 1994 (date of initial
public investment) to September 30, 1994.
(a) Computed on an annualized basis.
(b) Increase/decrease in above expense/income ratios due to waivers or
reimbursements of expenses.

<PAGE>

<TABLE>
<CAPTION>
MENTOR
PERPETUAL
GLOBAL
MENTOR INCOME AND PORTFOLIO
GROWTH PORTFOLIO (FORMERLY
MENTOR QUALITY INCOME PORTFOLIO MENTOR MUNICIPAL INCOME (FORMERLY CAMBRIDGE CAMBRIDGE
(FORMERLY CAMBRIDGE GOVERNMENT PORTFOLIO (FORMERLY CAMBRIDGE INCOME AND GROWTH GLOBAL
INCOME PORTFOLIO) MUNICIPAL INCOME PORTFOLIO) PORTFOLIO) PORTFOLIO)
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
1994 1993 1992* 1994 1993 1992* 1994 1993** 1994***
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 14.04 $ 14.39 $ 14.30 $ 16.05 $ 14.76 $ 14.29 $ 14.88 $ 14.14 $ 14.18
0.84 1.06 0.44 0.82 0.92 0.32 0.31 0.09 (0.01)
(1.30) (0.31) 0.09 (1.54) 1.32 0.47 0.64 0.73 0.06
(0.46) 0.75 0.53 (0.72) 2.24 0.79 0.95 0.82 0.05
(0.83) (1.06) (0.44) (0.81) (0.92) (0.32) (0.30) (0.08) --
-- -- -- (0.10) -- -- (0.26) -- --
-- (0.04) -- -- (0.03) -- -- -- --
$ 12.75 $ 14.04 $ 14.39 $ 14.42 $ 16.05 $ 14.76 $ 15.27 $ 14.88 $ 14.23
(3.39%) 5.41% 3.37% (4.83%) 16.00% 5.34% 6.54% 5.54% 0.35%
1.38% 1.04% 0.36% 1.24% 0.71% 0.00% 1.75% 1.56% 2.09%
6.33% 7.31% 8.00% 5.43% 5.92% 6.21% 2.20% 2.35% (0.10%)
0.01% 0.18% 0.85% 0.09% 0.68% 1.26% -- 0.38% 1.09%
$30,142 $47,780 $36,740 $25,056 $29,245 $18,801 $17,773 $ 9,849 $ 8,882
455% 102% 9% 87% 88% 0% 78% 13% 2%
</TABLE>

<PAGE>

THE MENTOR FUNDS
FINANCIAL HIGHLIGHTS
CLASS B SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
The following table has been audited by KPMG Peat Marwick LLP, the Trust's
independent auditors. Their report dated November 11, 1994 on the Portfolios'
financial statements for the period ended September 30, 1994 is included in the
Combined Annual Report dated September 30, 1994, which is incorporated by
reference. This table should be read in conjunction with each of the Portfolio's
financial statements and notes thereto, which may be obtained free of charge
from the Trust. Until April 12, 1995, Mentor Quality Income Portfolio was known
as "Cambridge Government Income Portfolio"; until that time, the Portfolio was
required, among other things, to invest at least 65% of its assets in U.S.
government securities.

<TABLE>
<CAPTION>
MENTOR/CAMBRIDGE PORTFOLIO MENTOR CAPITAL GROWTH PORTFOLIO
(FORMERLY CAMBRIDGE GROWTH (FORMERLY CAMBRIDGE CAPITAL
PORTFOLIO) GROWTH PORTFOLIO)
SEPTEMBER 30, SEPTEMBER 30,
1994 1993 1992* 1994 1993 1992*
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE PER SHARE, BEGINNING
OF PERIOD $ 16.59 $ 14.14 $ 14.18 $ 15.23 $ 14.22 $ 14.18
Income from investment operations
Net investment income (loss) (0.25) (0.14) (0.01) (0.04) 0.05 0.46
Net realized and unrealized gain
(loss) on investments (1.81) 2.59 (0.03) (0.26) 1.02 0.04
Total from investment operations (2.06) 2.45 (0.04) (0.30) 1.07 0.50
Less distributions
Dividends from income -- -- -- -- (0.05) (0.46)
Distributions from capital gains -- -- -- (0.13) -- --
Distributions in excess of net
investment income -- -- -- -- (0.01) --
NET ASSET VALUE PER SHARE, END OF
PERIOD $ 14.53 $ 16.59 $ 14.14 $ 14.80 $ 15.23 $ 14.22
Total return (12.48%) 17.33% (0.28%) (2.00%) 7.52% 0.61%
Ratios to Average Net Assets(a)
Expenses 2.56% 2.41% 2.07% 2.46% 2.24% 1.86%
Net investment income (loss) (1.40%) (1.24%) (0.17%) (0.22%) 0.21% 0.83%
Expense adjustment(b) 0.02% 0.12% 0.40% -- 0.10% 0.30%
Supplemental Data
Net assets, end of period (000
omitted) $28,678 $35,069 $13,828 $41,106 $57,030 $25,468
Portfolio turnover rate 132% 137% 26% 149% 192% 61%
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
MENTOR
PERPETUAL
GLOBAL
MENTOR INCOME AND PORTFOLIO
GROWTH PORTFOLIO (FORMERLY
MENTOR QUALITY INCOME PORTFOLIO MENTOR MUNICIPAL INCOME (FORMERLY CAMBRIDGE CAMBRIDGE
(FORMERLY CAMBRIDGE GOVERNMENT PORTFOLIO (FORMERLY CAMBRIDGE INCOME AND GROWTH GLOBAL
INCOME PORTFOLIO) MUNICIPAL INCOME PORTFOLIO) PORTFOLIO) PORTFOLIO)
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
1994 1993 1992* 1994 1993 1992* 1994 1993** 1994***
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 14.06 $ 14.40 $ 14.30 $ 16.06 $ 14.78 $ 14.29 $ 14.91 $14.14 $ 14.18
0.82 0.99 0.41 0.74 0.82 0.29 0.21 0.05 (0.04)
(1.37) (0.31) 0.10 (1.54) 1.32 0.49 0.61 0.77 0.01
(0.55) 0.68 0.51 (0.80) 2.14 0.78 0.82 0.82 (0.03)
(0.75) (0.99) (0.41) (0.73) (0.82) (0.29) (0.19) (0.05 ) --
-- -- -- (0.10) -- -- (0.26) -- --
-- (0.03) -- -- (0.04) -- -- -- --
$ 12.76 $ 14.06 $ 14.40 $ 14.43 $ 16.06 $ 14.78 $ 15.28 $14.91 $ 14.15
(3.97%) 4.86% 3.24% (5.34%) 15.27% 5.28% 5.66% 5.54% (0.21%)
1.88% 1.54% 0.83% 1.74% 1.21% 0.50% 2.44% 2.31% 2.79%
6.21% 6.81% 7.53% 4.93% 5.42% 5.80% 1.51% 1.60% (0.82%)
0.02% 0.18% 0.84% 0.12% 0.68% 1.26% -- 0.38% 1.14%
$77,888 $127,346 $65,661 $46,157 $50,976 $24,265 $43,219 $18,127 $ 7,987
455% 102% 9% 87% 88% 0% 78% 13% 2%
</TABLE>

<PAGE>

THE MENTOR FUNDS
The Mentor Funds is managed by Commonwealth Advisors, Inc. ("Commonwealth
Advisors" or the "Investment Adviser,") (formerly "Cambridge Investment
Advisors, Inc.") which in turn has entered into sub-advisory agreements for
certain of the Portfolios. Van Kampen/American Capital Management Inc. serves as
the Sub-Adviser for the Mentor Municipal Income Portfolio; Wellington Management
Company serves as the Sub-Adviser for the Mentor Income and Growth Portfolio;
and Perpetual Portfolio Management Limited serves as the Sub-Adviser to the
Mentor Perpetual Global Portfolio. The Mentor Funds provides flexibility and
diversification for an investor's investment planning needs. It enables an
investor to meet the challenges of changing market conditions by offering
convenient exchange privileges which give an investor access to as many as seven
investment vehicles.
The Mentor Funds may be utilized in connection with advisory accounts of
investment advisers registered under the Investment Advisers Act of 1940.
Information on The Mentor Funds may be obtained by calling 1-800-382-0016.

INVESTMENT INFORMATION

INVESTMENT OBJECTIVES AND POLICIES
Set forth below is a description of the investment objectives and policies
of each Portfolio. The investment objectives of each Portfolio, along with those
investment policies which are identified as being fundamental, may not be
changed without the affirmative vote of a majority of the applicable Portfolio's
outstanding voting securities. All other investment policies of a Portfolio may
be changed by the Board of Trustees of the Trust without shareholder approval.
Shareholders will be notified before any material change in these policies
becomes effective. There can be no assurance that any Portfolio will achieve its
investment objective. For additional information concerning investment
techniques utilized by the Portfolios, see " -- Investment Practices."

MENTOR/CAMBRIDGE GROWTH PORTFOLIO
The investment objective of the Mentor/Cambridge Growth Portfolio is growth
of capital through professional management and diversification of investments in
securities it believes to have potential of capital appreciation. The Portfolio
will be invested primarily in securities which Commonwealth Advisors, the
Portfolio's Investment Adviser, believes offer the potential for capital
appreciation. The Portfolio invests primarily in common stocks but can invest in
any securities with potential for capital growth.
In seeking to obtain capital appreciation, the Portfolio may trade to some
degree in securities for the short term. To this extent, the Portfolio will be
engaged in trading operations based on short-term market considerations as
distinct from long-term investment based upon fundamental valuation of
securities. However, the Portfolio will emphasize fundamental research in
attempting to identify under-valued situations which are anticipated will
appreciate over the longer term.
In seeking to achieve its objective, it will be the Portfolio's
policy to invest primarily in securities which it believes will offer
the potential for increasing the Portfolio's total asset value. While it
is anticipated that most investments will be in common stocks of
companies with above-average growth prospects, investments may also be
made to a limited degree in other common stocks and in convertible
securities, such as bonds and preferred stocks. There may be times when
a significant portion of the Portfolio's assets may be held temporarily
in cash or defensive-type securities, depending upon Commonwealth
Advisors' analysis of business and economic conditions and the outlook
for security prices. For these purposes, defensive-type securities
include high-grade debt securities (rated "A" or above); securities
issued by the U.S. government, its agencies or instrumentalities; and
high-quality money market instruments, including repurchase agreements.
Some of the factors Commonwealth Advisors will consider in making
investments for the Portfolio are patterns of increasing growth in sales
and earnings, the development of new or improved products or services,
favorable outlooks for growth in the industry, the probability of
increased operating efficiencies, emphasis on research and development,
cyclical conditions, or other signs that a company is expected to show
greater than average capital appreciation and earnings growth.
THE TRUSTEES HAVE APPROVED THE COMBINATION OF THE MENTOR/CAMBRIDGE GROWTH
PORTFOLIO WITH THE MENTOR CAPITAL GROWTH PORTFOLIO. IN THE COMBINATION,
SHAREHOLDERS OF THE MENTOR/CAMBRIDGE GROWTH PORTFOLIO WOULD RECEIVE SHARES OF
THE MENTOR CAPITAL GROWTH PORTFOLIO WITH A VALUE EQUAL AT THE TIME TO THE VALUE
OF THEIR SHARES IN THE MENTOR/CAMBRIDGE GROWTH PORTFOLIO, AND THE
MENTOR/CAMBRIDGE GROWTH PORTFOLIO WOULD BE DISSOLVED. THE COMBINATION, WHICH IS
SUBJECT TO SHAREHOLDER APPROVAL, IS EXPECTED TO OCCUR IN JUNE-JULY, 1995.

MENTOR CAPITAL GROWTH PORTFOLIO (FORMERLY CAMBRIDGE CAPITAL GROWTH PORTFOLIO)
The investment objective of the Mentor Capital Growth Portfolio is to
provide long-term appreciation of capital. Since income is not an objective, any
income generated by the investment of the Portfolio's assets will be incidental
to its objective. Commonwealth Advisors, the Portfolio's Investment Adviser,
intends to invest primarily in the common stock of companies believed by
management to have appreciation potential. However, since no one class or type
of security at all times necessarily affords the greatest promise for capital
appreciation, the Portfolio may invest any amount or proportion of its assets in
any class or type of security believed by Commonwealth Advisors to offer
potential for capital appreciation over both the intermediate and long term. The
Portfolio may also invest in preferred stocks, investment-grade bonds,
convertible preferred stocks, and convertible debentures if, in the judgment of
Commonwealth Advisors, the investment would further its investment objective.
Historically, investment in bonds during a period of high interest rates will
subsequently lead to capital gains if such bonds are sold when interest rates
fall, which usually causes the value of the bonds to increase. Each security
held will be monitored to determine whether it is contributing to the basic
objective of long-term appreciation of capital.
Commonwealth Advisors believes that a portfolio of such securities provides
the most effective way to obtain capital appreciation, but when, for temporary
defensive purposes (as when market conditions for equity securities are
adverse), other types of investments appear advantageous on the basis of
combined considerations of risk and the protection of capital values,
investments may be made in fixed income securities with or without warrants or
conversion features. In an effort to protect its assets against major market
declines, or for other temporary defensive purposes, the Portfolio may actively
pursue a policy of retaining cash or investing part or all of its assets in
high-quality money market instruments and repurchase agreements.
Diversification is an important consideration in selecting investments for
the Portfolio. However, greater emphasis will be placed upon careful selection
of securities believed to have good potential for appreciation than upon wide
diversification.

<PAGE>
MENTOR QUALITY INCOME PORTFOLIO (FORMERLY CAMBRIDGE GOVERNMENT INCOME PORTFOLIO)
The Mentor Quality Income Portfolio's investment objective is to seek high
current income consistent with what Commonwealth Advisors believes to be prudent
risk. The Portfolio may invest in debt securities, including both government and
corporate obligations, and in other income-producing securities, including
preferred stocks and dividend-paying common stocks. The Portfolio may also hold
a portion of its assets in cash or money market instruments. There can, of
course, be no assurance that the Portfolio will achieve its investment
objective.
The Portfolio will invest in U.S. government securities and in debt
securities and preferred stocks rated investment grade (or, if unrated,
considered by Commonwealth Advisors to be of comparable quality). A security
will be deemed to be of "investment grade" if, at the time of investment by the
Portfolio, it is rated at least Baa3 by Moody's Investor Services ("Moody's") or
BBB- by Standard & Poor's Corporation ("S&P") or at a comparable rating by
another nationally recognized rating organization, or, if unrated, determined by
Commonwealth Advisors to be of comparable quality. Securities rated Baa or BBB
lack outstanding investment characteristics and have speculative characteristics
and are subject to greater credit and market risks than higher rated securities.
The Portfolio will normally invest at least 80% of its assets in U.S. government
securities and in other securities rated at least A by Moody's or S&P or at a
comparable rating by another nationally recognized rating organization, or, if
unrated, determined by Commonwealth Advisors to be of comparable quality.
Commonwealth Advisors may take full advantage of the entire range of
maturities of the securities in which the Portfolio may invest and may adjust
the average maturity of the Portfolio's securities from time to time, depending
on its assessment of relative yields on securities of different maturities and
expectations of future changes in interest rates. The Portfolio may invest in
mortgage-backed certificates and other securities representing ownership
interests in mortgage pools, including collateralized mortgage obligations and
certain stripped mortgage-backed securities (including certain "residual"
interests). See "Investment Practices -- Mortgage-Related Securities" below.

MENTOR MUNICIPAL INCOME PORTFOLIO (FORMERLY CAMBRIDGE MUNICIPAL INCOME
PORTFOLIO)
The investment objective of the Mentor Municipal Income Portfolio is to
provide investors with a high level of current income exempt from federal
regular income tax, consistent with preservation of capital. Van Kampen/American
Capital Management Inc. ("VK/AC Management"), serves as the Sub-Adviser to the
Portfolio. Under normal market conditions, the Portfolio will invest at least
80% of its total assets in tax-exempt municipal securities rated investment
grade, or deemed by VK/AC Management to be of comparable quality, at the time of
investment.
Investment-grade securities are securities rated BBB or higher by S&P or
Baa or higher by Moody's, in the case of long-term obligations, or which have
equivalent ratings in the case of short-term obligations. Securities rated BBB
by S&P are regarded by S&P as having an adequate capacity to pay interest and
repay principal. Whereas such securities normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest or repay principal for
debt in this category than in higher rated categories. Securities rated Baa by
Moody's are considered by Moody's as medium-grade obligations. Such securities
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.
They lack outstanding investment characteristics and, in fact, have speculative
characteristics as well.
Up to 20% of the Portfolio's total assets may be invested in
tax-exempt municipal securities rated between BB and B-(inclusive) by
S&P or between Ba and B3 (inclusive) by Moody's (or equivalently rated
short-term obligations) and unrated tax-exempt securities that VK/AC
Management considers to be of comparable quality. These securities are
below investment grade and are regarded by S&P, on balance, as
predominantly speculative with respect to the capacity to pay interest
and repay principal in accordance with the terms of the obligation.
While such securities will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major
risk exposures to adverse conditions. These securities are regarded by
Moody's as generally lacking characteristics of a desirable investment.
Assurance of interest and principal payments or of maintenance of other
terms of the securities' contract over any long period of time may be
small. Debt securities rated below investment grade are commonly
referred to as "junk bonds." The Portfolio will not invest in securities
rated below B-by S&P or below B3 by Moody's at the time of purchase. For
a description of S&P and Moody's ratings, see the Appendix to the
combined Statement of Additional Information.
From time to time, the Portfolio temporarily may also invest up to 10% of
its assets in tax-exempt money market funds, subject to the restrictions of
Section 12(d)(1)(A) of the Investment Company Act of 1940. Such instruments will
be treated as investments in municipal securities.
The Portfolio may invest a substantial portion of its assets in municipal
securities that pay interest that is subject to the federal alternative minimum
tax. The Portfolio may not be a suitable investment for investors who are
already subject to the federal alternative minimum tax or who would become
subject to the federal alternative minimum tax as a result of an investment in
the Portfolio.
MUNICIPAL SECURITIES. Tax-exempt municipal securities are debt obligations
issued by or on behalf of the governments of states, territories, or possessions
of the United States; the District of Columbia; their political subdivisions,
agencies, and instrumentalities; and certain interstate agencies, the interest
on which, in the opinion of bond counsel or other counsel to the issuer of such
securities, is exempt from federal regular income tax. Under normal market
conditions, up to 100%, but not less than 80%, of the Portfolio's assets will be
invested in such municipal securities. The foregoing is a fundamental policy of
the Portfolio and cannot be changed without approval of the shareholders of the
Portfolio.
The two principal classifications of municipal securities are "general
obligation" and "revenue" bonds. General obligation bonds are secured by the
issuer's pledge of its faith, credit, and taxing power for the payment of
principal and interest. Revenue bonds are usually payable only from the revenues
derived from a particular facility or class of facilities or, in some cases,
from the proceeds of a special excise tax or other specific revenue source.
Industrial development bonds are usually revenue bonds, the credit quality of
which is normally directly related to the credit standing of the industrial user
involved.
There are, in addition, a variety of hybrid and special types of municipal
securities, including variable rate securities, municipal notes, and municipal
leases. Variable rate securities bear rates of interest that are adjusted
periodically according to formulae intended to minimize fluctuation in values of
the instruments. Municipal notes include tax, revenue, and bond anticipation
notes of short maturity, generally less than three years, which are issued to
obtain temporary funds for various public purposes. Municipal leases are
obligations issued by state and local governments or authorities to finance the
acquisition of equipment and facilities and may be considered not to be liquid.
They may take the form of a lease, an installment purchase contract, a
conditional sales contract, or a participation certificate on any of the above.
No more than 5% of the net assets of the Portfolio will be invested in municipal
leases. A more detailed description of the types of municipal securities in
which the Portfolio may invest is included in the Statement of Additional
Information.
From time to time, proposals have been introduced before Congress that
would have the effect of reducing or eliminating the federal tax exemption on
municipal securities. If such a proposal were enacted, the ability of the
Portfolio to pay tax-exempt interest dividends might be adversely affected.

<PAGE>
RISKS OF LOWER-GRADE MUNICIPAL SECURITIES. The Portfolio may invest up to
20% of its total assets in lower-grade tax-exempt municipal securities or in
unrated municipal securities considered by VK/AC Management to be of comparable
quality. Lower-grade municipal securities are rated between BB and B-by S&P or
between Ba and B3 by Moody's, in each case inclusive of such rating categories.
Higher yields are generally available from municipal securities of such grade.
With respect to such 20% of the Portfolio's total assets, the Portfolio has not
established any limit on the percentage of its portfolio which may be invested
in securities in any one rating category.
Investment in lower-grade municipal securities involves special risks as
compared with investment in higher-grade municipal securities. The market for
lower-grade municipal securities is considered to be less liquid than the market
for investment-grade municipal securities, which may adversely affect the
ability of the Portfolio to dispose of such securities in a timely manner at a
price which reflects the value of such securities. The market price for less
liquid securities tends to be more volatile than the market price for more
liquid securities. Illiquid securities and the absence of readily available
market quotations with respect thereto may make the valuation of such securities
more difficult, and the judgment of the Trust's officers and Trustees may play a
greater role in the valuation of the Portfolio's securities. Lower-grade
municipal securities generally involve greater credit risk than higher-grade
municipal securities and are more sensitive to adverse economic changes,
significant increases in interest rates, and individual issuer developments.
Because issuers of lower-grade municipal securities frequently choose not to
seek a rating of their municipal securities, the Portfolio will rely more
heavily on VK/AC Management's ability to determine the relative investment
quality of such securities than if the Portfolio invested exclusively in
higher-grade municipal securities. The Portfolio may, if deemed appropriate by
VK/AC Management, retain a security whose rating has been downgraded below B-by
S&P or below B3 by Moody's, or whose rating has been withdrawn. More detailed
information concerning the risks associated with instruments in lower-grade
municipal securities is included in the Statement of Additional Information.
VK/AC Management seeks to minimize the risks involved in investing in
lower-grade municipal securities through diversification and careful investment
analysis. To the extent that there is no established retail market for some of
the lower-grade municipal securities in which the Portfolio may invest, trading
in such securities may be relatively inactive. During periods of reduced market
liquidity and in the absence of readily available market quotations for
lower-grade municipal securities held in the Portfolio, the ability to value the
Portfolio's securities becomes more difficult and the use of judgment may play a
greater role in the valuation of the Portfolio's securities due to the reduced
availability of reliable objective data. The effects of adverse publicity and
investor perceptions may be more pronounced for securities for which no
established market exists as compared with the effects on securities for which
such a market does exist. Further, the Portfolio may have more difficulty
selling such securities in a timely manner and at their stated value than would
be the case for securities for which an established market does exist.
Investors should carefully consider the risks of owning shares of an
investment company which invests in lower-grade municipal securities before
making an investment in the Portfolio. The higher yield on certain securities
held by the Portfolio reflects a greater possibility that the financial
condition of the issuer, or adverse changes in general economic conditions, or
both, may impair the ability of the issuer to make payments of income and
principal.
CONCENTRATION. The Portfolio generally will not invest more than
25% of its total assets in any industry, nor will the Portfolio
generally invest more than 5% of its assets in the securities of any
single issuer. Governmental issuers of municipal securities are not
considered part of any "industry." However, municipal securities backed
only by the assets and revenues of nongovernmental users may for this
purpose be deemed to be issued by such nongovernmental users, and the
25% limitation would apply to such obligations. It is nonetheless
possible that the Portfolio may invest more than 25% of its assets in a
broader segment of the municipal securities market, such as revenue
obligations of hospitals and other health care facilities, housing
agency revenue obligations, or airport revenue obligations if VK/AC
Management determines that the yields available from obligations in a
particular segment of the market justify the additional risks associated
with a large investment in such segment. Although such obligations could
be supported by the credit of governmental users, or by the credit of
nongovernmental users engaged in a number of industries, economic,
business, political, and other developments generally affecting the
revenues of such users (for example, proposed legislation or pending
court decisions affecting the financing of such projects and market
factors affecting the demand for their services or products) may have a
general adverse effect on all municipal securities in such a market
segment. The Portfolio reserves the right of investing more than 25% of
its assets in industrial development bonds or in issuers located in any
individual state, although VK/AC Management has no present intention to
invest more than 25% of the Portfolio's assets in issuers located in the
same state. If the Portfolio were to invest more than 25% of its assets
in issuers located in one individual state, it would be more susceptible
to adverse economic, business, or regulatory conditions in that state.

MENTOR INCOME AND GROWTH PORTFOLIO (FORMERLY CAMBRIDGE INCOME AND GROWTH
PORTFOLIO)
The investment objective of the Mentor Income and Growth Portfolio is to
provide a conservative combination of income and growth of capital, consistent
with capital protection. To achieve the Portfolio's objective, Wellington
Management Company ("WMC"), the Portfolio's Sub-Adviser, will invest the
Portfolio's assets in a diversified portfolio of equity securities of companies
that it believes exhibit sound fundamental characteristics and investment-grade
fixed-income securities, as well as U.S. government securities, as described
below. The Portfolio's holdings in common stocks provide long-term appreciation
potential and dividend growth, while diversification into bonds provides current
income and reduces the overall volatility of returns. The Portfolio will
typically exhibit less investment risk than a portfolio consisting entirely of
common stocks.
WMC will manage the allocation of assets among asset classes based upon its
judgment of the projected investment environment for financial assets, relative
fundamental values and attractiveness of each asset class, and expected future
returns of each asset class. WMC will base its asset allocation decisions on
fundamental analysis and will not attempt to make short-term market timing
decisions among asset classes. As a result, changes in allocation to stocks and
bonds are expected to be gradual, and the Portfolio will normally have some
portion of its assets invested in each asset class at all times. The Portfolio
does not have percentage limitations on the amount allocated to each asset
class.
Within the equity asset class, the Portfolio seeks to achieve long-term
appreciation of capital and a moderate income level by selecting investments in
out-of-favor companies with sound fundamentals. Accordingly, the Portfolio's
equity investments will generally be focused on stocks of companies which WMC
believes have the potential to provide above-average potential total returns and
which sell at below-average price/earnings multiples. These equity investment
decisions are based primarily on WMC's fundamental research and security
valuations.
Within the fixed income asset class, the Portfolio seeks to provide as high
a level of current income as is consistent with prudent investment risk.
Investment management of the fixed income asset class will focus on relative
value and yield spreads among security types and among quality, issues, and
industry sectors, call protection, and credit research. Credit research on
corporate bonds is based on both quantitative and qualitative criteria
established by WMC, such as an issuer's industry, operating and financial
profiles, business strategy, management quality, and projected financial and
business conditions.

<PAGE>
The Portfolio will contain a broadly diversified mix of investments
including the following acceptable investments:
EQUITY SECURITIES. The Portfolio may invest in common stocks and other
equity securities, such as preferred stocks and debt securities with conversion
privileges or warrants. The Portfolio may also invest in equity securities,
including convertible debt securities, of real estate related companies and real
estate investment trusts. The Portfolio will limit its investment in real estate
investment trusts to 10% of its total assets. All real estate securities will be
publicly traded, primarily on an exchange.
REAL ESTATE SECURITIES. Although the Portfolio's investments in real estate
will be limited to publicly traded securities secured by real estate or
interests therein or issued by companies which invest in real estate or
interests therein, the Portfolio may be subject to risks associated with direct
ownership of real estate. These include declines in the value of real estate,
risks related to general and local economic conditions and increases in interest
rates.
Other risks associated with real estate investments include the fact that
equity and mortgage real estate investment trusts are dependent upon management
skill, are not diversified, and are, therefore, subject to the risk of financing
single projects or a limited number of projects. They are also subject to heavy
cash flow dependency, defaults by borrowers, and self-liquidation.
Additionally, equity real estate investment trusts may be affected by any
changes in the value of the underlying property owned by the trust, and mortgage
real estate investment trusts may be affected by the quality of any credit
extended.
FIXED INCOME SECURITIES. The debt securities in which the Portfolio
invests, including zero-coupon securities, will be rated at the time of purchase
within the four highest bond ratings by Moody's or S&P or, if unrated, deemed to
be of equivalent quality by WMC. While bonds carrying the fourth highest quality
rating ("Baa" by Moody's or "BBB" by S&P) are considered as investment grade and
are viewed to have adequate capacity for payment of principal and interest,
investments in such securities involve a higher degree of risk than that
associated with investments in debt securities in the higher rating categories,
and such bonds lack outstanding investment characteristics and have speculative
characteristics as well. For example, changes in economic conditions or other
circumstances are more likely to lead to a weakened capacity to make principal
and interest payments than is the case with higher grade bonds. If a security's
rating is reduced below the required minimum after the Portfolio has purchased
it, the Portfolio is not required to sell the security, but may consider doing
so. A description of the rating categories is contained in the Appendix to the
combined Statement of Additional Information.
U.S. GOVERNMENT SECURITIES. The Portfolio may invest in securities issued
or guaranteed as to principal or interest by the U.S. government or its agencies
or instrumentalities, including mortgage-related securities. These U.S.
government securities include:
(Bullet) direct obligations of the U.S. Treasury, such as U.S. Treasury
bills, notes, and bonds; and
(Bullet) obligations of U.S. government agencies or instrumentalities, such
as Federal Home Loan Banks, Federal Farm Credit Banks, Federal
National Mortgage Association, Government National Mortgage
Association, and Federal Home Loan Mortgage Corporation.
The obligations of the U.S. government agencies or instrumentalities which
the Portfolio may buy are backed by:
(Bullet) the full faith and credit of the U.S. Treasury;
(Bullet) the issuer's right to borrow from the U.S. Treasury;
(Bullet) the discretionary authority of the U.S. government to purchase
certain obligations of the agency or instrumentality; or
(Bullet) the credit of the agency or instrumentality issuing the
obligations.
Examples of agencies and instrumentalities whose obligations are
permissible investments but may not always receive financial support from the
U.S. government are: Federal Land Banks; Central Bank for Cooperatives; Federal
Intermediate Credit Banks; Federal Home Loan Banks; and Federal National
Mortgage Association. See "Investment Practices" for additional information
regarding mortgage-related securities, stripped mortgage securities, and dollar
roll transactions.

MENTOR PERPETUAL GLOBAL PORTFOLIO (FORMERLY CAMBRIDGE GLOBAL PORTFOLIO)
The investment objective of the Mentor Perpetual Global Portfolio is to
seek long-term growth of capital through a diversified portfolio of marketable
securities, primarily equity securities, including common stocks, preferred
stocks and debt securities convertible into common stocks, and warrants. To
achieve the Portfolio's objective, Perpetual Portfolio Management Ltd.
("Perpetual"), the Portfolio's Sub-Adviser, will invest the Portfolio's assets
on a worldwide basis in equity securities of companies which are incorporated in
the United States or in foreign countries. It also may invest in the debt
securities of U.S. and foreign issuers. Income is an incidental consideration.
The Portfolio will invest in companies Perpetual believes will benefit from
global economic trends, promising technologies or products and specific country
opportunities resulting from changing geopolitical, currency, or economic
relationships. It is expected that investments will be spread broadly around the
world. Under normal circumstances, the Portfolio will invest at least 65% of the
value of its total assets in securities of at least three countries, one of
which may be the United States. The Portfolio may be invested 100% in non-U.S.
issues, and for temporary defensive purposes may be invested 100% in U.S.
issues, although under normal circumstances it is expected that both foreign and
U.S. investments will be represented in the Portfolio. It is expected that
investments will include companies of varying size as measured by assets, sales,
or capitalization.
The Portfolio is designed for investors seeking worldwide equity
opportunities in developed, newly industrialized and developing countries (some
of these developing countries are located in Latin America and Africa). The
management of the Portfolio believes that there is substantial opportunity for
long-term capital growth from a professionally managed portfolio of securities
selected from the U.S. and foreign equity markets. The Portfolio affords the
investor access to opportunities wherever they arise, without being constrained
by the location of a company's headquarters or the trading market for its
shares. Because the Portfolio invests globally, it provides the potential to
augment returns available from the U.S. stock market. In addition, since U.S.
and foreign markets do not always move in step with each other, a global
portfolio will be more diversified than one invested solely in U.S. securities.
Investing directly in foreign securities is impractical for many investors
due to the difficulty of arranging for purchases and sales, obtaining current
information, holding securities in safekeeping and converting the value of their
investments from foreign currencies into dollars. The Portfolio manages these
problems for the investor. With an investment in the Portfolio the investor has
a diversified worldwide investment portfolio which is managed actively by
experienced professionals.

<PAGE>
The Portfolio generally will invest in equity securities of established
companies listed on U.S. or foreign securities exchanges, but also may invest in
securities traded over-the-counter. It also may invest in debt securities
convertible into common stock, and convertible and non-convertible preferred
stock, and fixed income securities of governments, government agencies,
supranational agencies and companies when Perpetual believes the potential for
appreciation will equal or exceed that available from investments in equity
securities. These debt and fixed income securities will be predominantly
investment-grade securities or those of equivalent quality as determined by
Perpetual. The Portfolio may not invest more than 5% of its total assets in debt
securities rated Baa or below by Moody's, or BBB or below by S&P or deemed by
Perpetual to be of comparable quality. The Portfolio may invest in closed-end
investment companies holding foreign securities.
RISK FACTORS. The Portfolio is designed for long-term investors who can
accept international investment risk. Since the Portfolio normally will be
invested in both U.S. and foreign securities markets, changes in the Portfolio's
share price may have a low correlation with movements in the U.S. markets. The
Portfolio's share price will reflect the movements of both the different stock
and bond markets in which it is invested and the currencies in which the
investments are denominated; the strength or weakness of the U.S. dollar against
foreign currencies may account for part of the Portfolio's investment
performance. Because of the Portfolio's global investment policies and the
investment considerations discussed above, investment in shares of the Portfolio
should not be considered a complete investment program. See "Investment
Practices -- Foreign Securities" below.
The Portfolio will invest no more than 5% of its total assets in debt
securities rated BBB or Baa or below or in unrated securities. Securities rated
BB or Ba and below are commonly referred to as "junk bonds." The lower the
quality of such debt securities, the greater their risks render them like equity
securities. The Portfolio may invest in securities which are rated as low as C
by Moody's or D by S&P at the time of purchase. Securities rated D may be in
default with respect to payment of principal or interest.
CURRENCY RISKS. The Portfolio may engage in currency transactions with
counterparties in order to hedge the value of portfolio holdings denominated in
particular currencies against fluctuations in relative value. Currency
transactions include forward currency contracts, exchange listed currency
futures, exchange listed and OTC options on currencies, and currency swaps. The
Portfolio dealings in forward currency contracts and other currency transactions
such as futures, options, options on futures and swaps will be limited to
hedging involving either specific transactions or portfolio positions.
Transaction hedging is entering into a currency transaction with respect to
specific assets or liabilities of the Portfolio, which will generally arise in
connection with the purchase or sale of its portfolio securities or the receipt
of income therefrom. Position hedging is entering into a currency transaction
with respect to portfolio security positions denominated or generally quoted in
that currency. The use of currency transactions can result in the Portfolio
incurring losses as a result of a number of factors including the imposition of
exchange controls, suspension of settlements, or the inability to deliver or
receive a specified currency.

INVESTMENT PRACTICES
Except as noted otherwise below, each of the Portfolios may engage in one
or more of the following investment practices or may purchase one or more of the
following investments.
MORTGAGE-RELATED SECURITIES. The mortgage-related securities in
which the Income and Growth Portfolio and the Quality Income Portfolio
may invest are generally issued by Government National Mortgage
Association ("GNMA"), Federal National Mortgage Association ("FNMA"),
and Federal Home Loan Mortgage Corporation ("FHLMC"), or are privately
issued (such as collateralized mortgage obligations described below),
and are actively traded. The underlying mortgages which collateralize
mortgage-related securities issued by GNMA are fully guaranteed by the
Federal Housing Administration ("FHA") or Veterans Administration
("VA"), while those collateralizing mortgage-related securities issued
by FHLMC or FNMA are typically conventional residential mortgages
conforming to strict underwriting size and maturity constraints.
Mortgage-related securities provide for a periodic payment consisting of
both interest and principal. The interest portion of these payments will
be distributed by the Portfolios as income, and the capital portion will
be reinvested.
Unlike conventional bonds, mortgage-related securities pay back principal
over the life of the mortgage-related securities rather than at maturity. At the
time that a holder of a mortgage-related security reinvests the payments and any
unscheduled prepayment of principal that it receives, the holder may receive a
rate of interest which is actually lower than the rate of interest paid on the
existing mortgage-related securities. As a consequence, mortgage-related
securities may be a less effective means of "locking-in" long-term interest
rates than other types of U.S. government securities.
The Portfolios may also invest in certain collateralized mortgage
obligations ("CMOs") which are rated AAA by a nationally recognized statistical
rating organization and which are issued by private entities such as investment
banking firms and companies related to the construction industry. The CMOs in
which the Portfolios may invest may be: (i) privately issued securities which
are collateralized by pools of mortgages in which each mortgage is guaranteed as
to payment of principal and interest by an agency or instrumentality of the U.S.
government; (ii) privately issued securities which are collateralized by pools
of mortgages in which payment of principal and interest are guaranteed by the
issuer and such guarantee is collateralized by U.S. government securities; or
(iii) other privately issued securities in which the proceeds of the issuance
are invested in mortgage-backed securities, and payment of the principal and
interest are supported by the credit of any agency or instrumentality of the
U.S. government.
While mortgage-related securities generally entail less risk of a decline
during periods of rapidly rising interest rates, mortgage-related securities may
also have less potential for capital appreciation than other similar investments
(e.g., investments with comparable maturities) because, as interest rates
decline, the likelihood increases that mortgages will be prepaid. Furthermore,
if mortgage-related securities are purchased at a premium, mortgage foreclosures
and unscheduled principal payments may result in some loss of a holder's
principal investment to the extent of the premium paid. Conversely, if
mortgage-related securities are purchased at a discount, both a scheduled
payment of principal and an unscheduled prepayment of principal would increase
current and total returns and would accelerate the recognition of income, which
would be taxed as ordinary income when distributed to shareholders.
STRIPPED MORTGAGE SECURITIES. The Portfolios may invest in stripped
mortgage securities. Stripped mortgage securities are derivative multiclass
securities which may be issued by agencies or instrumentalities of the U.S.
government, or by private originators of, or investors in, mortgage loans, such
as savings and loan associations, mortgage banks, commercial banks, investment
banks, and special purpose subsidiaries of the foregoing organizations. The
market volatility of stripped mortgage securities tends to be greater than the
market volatility of the other types of mortgage-related securities in which the
Portfolios invest. Stripped mortgage-backed securities are usually structured
with two classes that receive different portions of the interest and principal
distributions on a pool of mortgage assets. A Portfolio may invest in both the
interest-only -- or "IO" -- class and the principal-only -- or "PO" -- class.
The yield to maturity and price of an IO class is extremely sensitive to the
rate of principal payments (including prepayments) on the related underlying
mortgage assets, and a rapid rate of principal payments may have a material
adverse effect on a Portolio's yield to maturity and net asset value. This would
typically be the case in an environment of falling interest rates. If the
underlying mortgage assets experience greater than anticipated prepayments of
principal, a Portfolio may under some circumstances fail to fully recoup
its initial investment in these securities. Conversely, POs tend to increase in
value if prepayments are greater than anticipated and decline if prepayments are
slower than anticipated. A Portfolio may also purchase interests representing
the right to any excess cash flow remaining after all other payments are made
among the various tranches of interests received by structured mortgage-backed
vehicles. The value of such securities are especially sensitive to changes in
interest rates and in prepayment rates on the underlying mortgages.
The Quality Income Portfolio may invest in securities representing
interests in other types of financial assets, such as automobile-finance
receivables or credit-card receivables. Such securities may be secured by the
receivables themselves or may be unsecured obligations of their issuers.
ZERO-COUPON SECURITIES. The Quality Income Portolio and the Global
Portfolio may invest in zero coupon securities which pay no cash income and are
sold at substantial discounts from their value at maturity. When held to
maturity, their entire income, which consists of accretion of discount, comes
from the difference between the issue price and their value at maturity.
Zero-coupon securities may include U.S. Treasury bills issued directly by the
U.S. Treasury or other short-term debt obligations, and longer-term bonds or
notes and their unmatured interest coupons which have been separated by their
holder, typically a custodian bank or investment brokerage firm. A number of
securities firms and banks have stripped the interest coupons from the
underlying principal of U.S. Treasury securities and resold them in custodial
receipt programs with a number of different names, including Treasury Income
Growth Receipts ("TIGRS") and Certificates of Accrual on Treasuries ("CATS").
The U.S. Treasury has facilitated transfers of zero coupon securities through
the "Separate Trading of Registered Interest and Principal of Securities"
("STRIPS") program by accounting separately for the beneficial ownership of
interest coupons and principal payments. Zero coupon securities are subject to
greater market value fluctuations from changing interest rates than debt
obligations of comparable maturities which make current cash distributions of
interest. Fixed income securities also may be held for temporary defensive
purposes when the Investment Advisor or Sub-Adviser, as the case may be,
believes market conditions so warrant and for temporary investment. Similarly,
either Portfolio may invest in cash equivalents (including foreign money market
instruments, such as bankers' acceptances, certificates of deposit, commercial
paper rated P-1 or above by Moody's or A-1 or above by S&P or those of
equivalent quality as determined by its Investment Adviser or Sub-Adviser,
short-term government obligations, and short-term corporate obligations rated A
or above by Moody's or S&P or those of equivalent quality as determined by its
Investment Adviser or Sub-Adviser) for temporary defensive purposes.
DOLLAR ROLL TRANSACTIONS. In order to enhance portfolio returns and manage
prepayment risks, the Quality Income, Income and Growth, and Global Portfolios
may engage in dollar roll transactions with respect to mortgage-related
securities issued by GNMA, FNMA, and FHLMC. In a dollar roll transaction, a
Portfolio sells a mortgage-related security to a financial institution, such as
a bank or broker/dealer, and simultaneously agrees to repurchase a substantially
similar (i.e., same type, coupon, and maturity) security from the institution at
a later date at an agreed upon price. The mortgage-related securities that are
repurchased will bear the same interest rate as those sold, but generally will
be collateralized by different pools of mortgages with different prepayment
histories. During the period between the sale and repurchase, the Portfolios
will not be entitled to receive interest and principal payments on the
securities sold. Proceeds of the sale will be invested in short-term
instruments, and the income from these investments, together with any additional
fee income received on the sale, will generate income for the Portfolios
exceeding the yield. When a Portfolio enters into a dollar roll transaction,
liquid assets of the Portfolio, in a dollar amount sufficient to make payment
for the obligations to be repurchased, are segregated at the trade date. These
securities are marked to market daily and are maintained until the transaction
is settled.
MONEY MARKET INSTRUMENTS. In order to invest cash which is awaiting
long-term investment, to maintain liquidity, or for temporary defensive
purposes, each of the Portfolios may purchase money market instruments.
To the extent that investments in money market instruments are not for defensive
purposes, each of the Portfolios, except the Municipal Income Portfolio, agrees
to limit its investment in these securities to 35% of its total assets. To the
extent the Municipal Income Portfolio invests in money market instruments for
other than defensive purposes, it will limit its investment in these securities
to 20% of its total assets. For these purposes, money market instruments will be
limited to short-term obligations of the U.S. government or its agencies or
instrumentalities; certificates of deposit, time deposits, and bankers'
acceptances issued by banks or savings and loan associations having assets of at
least $500 million as of the end of their most recent fiscal year; short-term
corporate debt securities; and high-quality commercial paper. Each of the
Portfolios may also invest up to 10% of its assets in shares of money market
funds whose investments are limited to money market instruments which each
Portfolio could purchase directly.
REPURCHASE AGREEMENTS. Each Portfolio, other than the Municipal Income
Portfolio, may engage in repurchase agreements. Repurchase agreements are
arrangements in which banks, broker/dealers, and other recognized financial
institutions sell U.S. government securities or other securities to the
Portfolio and agree at the time of sale to repurchase them at a mutually agreed
upon time and price. To the extent that the original seller does not repurchase
the securities from the Portfolio, the Portfolio could receive less than the
repurchase price on any sale of such securities.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. Each Portfolio may purchase
securities on a when-issued or delayed delivery basis. In when-issued and
delayed delivery transactions, the Portfolio relies on the seller to complete
the transaction. The seller's failure to complete the transaction may cause the
Portfolio to miss a price or yield considered to be advantageous.
LENDING OF PORTFOLIO SECURITIES. In order to generate additional income,
each Portfolio, other than the Municipal Income Portfolio, may lend portfolio
securities up to one-third of the value of its total assets to broker/dealers,
banks, or other institutional borrowers of securities on a short-term basis. A
Portfolio will only enter into loan arrangements with broker/dealers, banks, or
other institutions which the Investment Adviser or Sub-Adviser, as the case may
be, has determined are creditworthy under guidelines established by the Trust's
Board of Trustees and will receive collateral in the form of cash or U.S.
government securities equal to at least 100% of the value of the securities
loaned.
BORROWING. Each of the Portfolios may, under certain circumstances, borrow
money directly or through reverse repurchase agreements (arrangements in which
the Portfolio sells a money market instrument for a percentage of its cash value
with an agreement to buy it back on a set date) or pledge securities. The
Municipal Income Portfolio may borrow directly or through reverse repurchase
agreements up to 5% of its total assets and may pledge up to 10% of the value of
those assets to secure such borrowings. Under certain circumstances, each
remaining Portfolio may borrow directly or through reverse repurchase agreements
up to one-third of the value of its net assets and pledge up to 10% of the value
of those assets to secure such borrowings.
PUT AND CALL OPTIONS. Each of the Portfolios, except the Municipal
Income Portfolio and the Income and Growth Portfolio, may purchase put
and call options on its portfolio securities. However, the Growth
Portfolio will only invest in options that are traded on securities
exchanges and for which it pays a premium (cost of option). Put and call
options will be used as a hedge to attempt to protect securities which
the particular Portfolio holds, or will be purchasing, against decreases
or increases in value. Each of the Portfolios, except the Growth
Portfolio and Income and Growth Portfolio, may also write (sell) put and
call options on all or any portion of its portfolio to generate income
or enhance potential gain. The Portfolios will write call options on
securities either held in their portfolios or for which they have the
right to obtain without payment of further consideration or for which
they have segregated cash in the amount of any additional consideration.
In the case of put options written by the Portfolios, the Trust's
custodian will segregate cash, U.S. Treasury obligations, or high
quality debt securities with a value equal to or greater than the
exercise price of the underlying securities.
The Global Portfolio also may purchase and write call and put options on
securities indices and other financial indices and on currencies.
Each of the Portfolios, except the Growth Portfolio and the Income and
Growth Portfolio, may generally purchase and write over-the-counter options on
portfolio securities in negotiated transactions with the buyers or writers of
the options since options on the portfolio securities held by the Portfolios are
not traded on an exchange. The Portfolios purchase and write options only with
investment dealers and other financial institutions (such as commercial banks or
savings and loan associations) deemed creditworthy by the particular Portfolio's
Investment Adviser or Sub-Adviser.
Over-the-counter options are two-party contracts with price and terms
negotiated between buyer and seller. In contrast, exchange-traded options are
third-party contracts with standardized strike prices and expiration dates and
are purchased from a clearing corporation. Exchange-traded options have a
continuous liquid market while over-the-counter options may not.
The Portfolios that may use put and call options (1) will limit the
aggregate value of the assets underlying covered call options or put options
written by a Portfolio to not more than 25% of such Portfolios net assets and
(2) will limit the premiums paid for options purchased by a Portfolio to 5% of
its net assets.
FINANCIAL FUTURES AND OPTIONS ON FUTURES. Each Portfolio may purchase and
sell financial futures contracts to hedge all or a portion of its portfolio
against changes in interest rates or securities prices. Futures contracts on
securities call for the delivery of particular debt instruments issued or
guaranteed by the U.S. Treasury or by specified agencies or instrumentalities of
the U.S. government at a certain time in the future. The seller of the contract
agrees to make delivery of the type of instrument called for in the contract,
and the buyer agrees to take delivery of the instrument at the specified future
time. A futures contract on a securities index does not involve the actual
delivery of securities, but merely requires the payment of a cash settlement
based on changes in the securities index.
The Portfolios (except the Income and Growth Portfolio) may write call
options and purchase put options on financial futures contracts as a hedge to
attempt to protect securities in each portfolio against decreases in value
resulting from anticipated increases in market interest rates or broad declines
in securities prices. When a Portfolio writes a call option on a futures
contract, it is undertaking the obligation of selling the futures contract at a
fixed price at any time during a specified period if the option is exercised.
Conversely, as purchaser of a put option on a futures contract, a Portfolio is
entitled (but not obligated) to sell a futures contract at the fixed price
during the life of the option.
The Portfolios (except the Income and Growth Portfolio) may also write put
options and purchase call options on financial futures contracts as a hedge
against rising purchase prices of portfolio securities resulting from
anticipated decreases in market interest rates or broad ascents in securities
prices. The Portfolios will use these transactions to attempt to protect their
ability to purchase portfolio securities in the future at price levels existing
at the time it enters into the transactions. When a Portfolio writes a put
option on a futures contract, it is undertaking to buy a particular futures
contract at a fixed price at any time during a specified period if the option is
exercised. As a purchaser of a call option on a futures contract, the Portfolio
is entitled (but not obligated) to purchase a futures contract at a fixed price
at any time during the life of the option.
A Portfolio may not purchase or sell futures contracts or related options
if immediately thereafter the sum of the amount of margin deposits on the
Portfolio's existing futures positions and premiums paid for related options
would exceed 5% of the market value of the Portfolio's total assets. When a
Portfolio purchases futures contracts, an amount of cash and cash equivalents,
equal to the underlying commodity value of the futures contracts (less any
related margin deposits), will be deposited in a segregated account with the
Trust's custodian to collateralize the position and thereby insure that the use
of such futures contracts is unleveraged.
When a Portfolio uses financial futures and options on financial futures as
hedging devices, there is a risk that the prices of the securities subject to
the futures contracts may not correlate perfectly with the prices of the
securities in that Portfolio. This may cause the futures contract and any
related options to react differently than the portfolio securities to market
changes. In addition, the Investment Adviser or Sub-Adviser, as the case may be,
could be incorrect in its expectations about the direction or extent of market
factors, such as interest rate or securities price movements. In these events,
the Portfolio may lose money on the futures contract or option. It is not
certain that a secondary market for positions in futures contracts or for
options will exist at all times. Although the Investment Adviser or Sub-Adviser
will consider liquidity before entering into options transactions, there is no
assurance that a liquid secondary market on an exchange will exist for any
particular futures contract or option at any particular time. A Portfolio's
ability to establish and close out futures and options positions depends on this
secondary market.
FOREIGN SECURITIES. The Growth, Capital Growth, Quality Income, Income and
Growth and Global Portfolios may invest in foreign securities. The Growth,
Capital Growth, and Income and Growth Portfolios will limit investments in
foreign securities not publicly traded in the United States to less than 10%,
15% and 10% of their total assets, respectively.
Investments in foreign securities involve special risks that differ from
those associated with investments in domestic securities. The risks associated
with investments in foreign securities relate to political and economic
developments abroad, as well as those that result from the differences between
the regulation of domestic securities and issuers and foreign securities and
issuers. These risks may include, but are not limited to, expropriation,
confiscatory taxation, currency fluctuations, withholding taxes on interest,
limitations on the use or transfer of Portfolio assets, political or social
instability, ability to obtain or enforce court judgments abroad, and adverse
diplomatic developments. Moreover, individual foreign economies may differ
favorably or unfavorably from the domestic economy in such respects as growth of
gross national product, the rate of inflation, capital reinvestment, resource
self-sufficiency, and balance of payments position.
Additional differences exist between investing in foreign and domestic
securities. Examples of such differences include: less publicly available
information about foreign issuers; credit risks associated with certain foreign
governments; the lack of uniform financial accounting standards applicable to
foreign issuers; less readily available market quotations on foreign issues; the
likelihood that securities of foreign issuers may be less liquid or more
volatile; generally higher foreign brokerage commissions; and unreliable mail
service between countries.
CURRENCY RISKS. Foreign securities are denominated in foreign currencies.
Therefore, the value in U.S. dollars of the Portfolios' assets and income may be
affected by changes in exchange rates and regulations. Although the Portfolios
value their assets daily in U.S. dollars, they will not convert their holdings
of foreign currencies to U.S. dollars daily. When a Portfolio converts its
holdings to another currency, it may incur conversion costs. Foreign exchange
dealers realize a profit on the difference between the prices at which they buy
and sell currencies.
The Growth, Capital Growth, Quality Income, Income and Growth and Global
Portfolios will engage in foreign currency exchange transactions in connection
with their investments in foreign securities. These Portfolios will conduct
their foreign currency exchange transactions either on a spot (i.e., cash) basis
at the spot rate prevailing in the foreign currency exchange market or through
forward contracts to purchase or sell foreign currencies.

<PAGE>
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. A forward foreign currency
exchange contract involves an obligation to purchase or sell a specific currency
at a future date, which may be any fixed number of days from the date of the
contract agreed upon by the parties, at a price set at the time of the contract.
These contracts are traded directly between currency traders (usually large
commercial banks) and their customers. When a Portfolio enters into a contract
for the purchase or sale of a security denominated in a foreign currency, it may
want to establish the U.S. dollar cost or proceeds, as the case may be. By
entering into a forward contract in U.S. dollars for the purchase or sale of the
amount of foreign currency involved in an underlying security transaction, a
Portfolio is able to protect itself against a possible loss between trade and
settlement dates resulting from an adverse change in the relationship between
the U.S. dollar and such foreign currency. However, this tends to limit
potential gains which might result from a positive change in such currency
relationships.
There is no limitation on the Portfolio's ability to invest in forward
foreign currency exchange contracts in the aggregate; however, a Portfolio will
not enter into forward foreign currency exchange contracts or maintain a net
exposure in such contracts where the Portfolio would be obligated to deliver an
amount of foreign currency in excess of the value of the Portfolio's securities
or other assets denominated in that currency or denominated in a currency or
currencies that the Portfolio's Investment Adviser or Sub-Adviser, as the case
may be, believes will reflect a high degree of correlation with the currency
with regard to price movements. The Portfolio's exposure to a particular
currency through such contracts will vary from time to time depending on the
Portfolio's investment in securities denominated in that currency. The
Portfolios generally do not enter into forward foreign currency exchange
contracts with a term longer than one year.
SWAPS, CAPS, FLOORS AND COLLARS. The Quality Income Portfolio and the
Global Portfolio may enter into interest rate, currency and index swaps and
purchase or sell related caps, floors and collars. The Portfolios expect to
enter into these transactions primarily to preserve a return or spread on a
particular investment or portion of its portfolio, to protect against currency
fluctuations, as a duration management technique or to protect against any
increase in the price of securities the Portfolio anticipates purchasing at a
later date. Each Portfolio intends to use these transactions as hedges and not
as speculative investments and will not sell interest rate caps or floors where
it does not own securities or other instruments providing the income stream the
Portfolio may be obligated to pay. Each Portfolio will limit the aggregate value
of the assets underlying interest rate and index swaps, caps, floors and collars
to not more than 20% of its net assets. There is no limitation on either
Portfolio's ability to engage in currency swaps and related caps, floors and
collars, except that each Portfolio will not maintain an exposure to a currency
through such transactions in excess of the value of the Portfolio's investments
in securities denominated in that currency.
INDEXED SECURITIES. The Global Portfolio may invest in indexed securities,
the value of which is linked to currencies, interest rates, commodities, indices
or other financial indicators. Investment in indexed securities involves certain
risks. In addition to the credit risk of the securities issuer and normal risks
of price changes in response to changes in interest rates, the principal amount
of indexed securities may decrease as a result of changes in the value of the
reference instruments. Also, in the case of certain indexed securities in which
the interest rate is linked to a reference instrument, the interest rate may be
reduced to zero and any further declines in the value of the security may then
reduce the principal amount payable on maturity. Further, indexed securities may
be more volatile than the reference instruments underlying indexed securities.
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES. The Portfolios will
limit their respective investments in other investment companies to no more than
3% of the total outstanding voting stock of any investment company, invest no
more than 5% of total assets in any one investment company, and invest more than
10% of total assets in investment companies in general. The Portfolios will
purchase securities of closed-end investment companies only in open market
transactions involving only customary broker's commissions. However, these
limitations are not applicable if the securities are acquired in a merger,
consolidation, reorganization, or acquisition of assets. It should be noted that
investment companies incur certain expenses such as management fees, and
therefore any investment by a Portfolio in shares of another investment company
would be subject to duplicative expenses.
RESTRICTED AND ILLIQUID SECURITIES. The Portfolios (other than the Quality
Income Portfolio) may invest up to 10% of their net assets in restricted
securities; the Quality Income Portfolio may invest up to 15% of its net assets
in restricted securities. Restricted securities are any securities in which the
Portfolios may otherwise invest pursuant to its investment objective and
policies but which are subject to restrictions on resale under federal
securities laws. The Portfolios will limit investments in illiquid securities,
including over-the-counter options and certain municipal leases and certain
restricted securities not determined by the Board of Trustees to be liquid under
guidelines adopted by the Board of Trustees pursuant to Securities Act Rule
144A, to 15% of their net assets.
PORTFOLIO TURNOVER. The annual turnover rate of the Portfolios may vary
from year to year and may also be affected by cash requirements for redemptions
and repurchase of Portfolio shares and by the necessity of maintaining the
Portfolios as regulated investment companies under the Internal Revenue Code, as
amended, in order to receive certain favorable tax treatment. Higher portfolio
turnover involves correspondingly greater brokerage commissions and other
transaction costs.
For additional information concerning the Portfolios' investment policies
and limitations, see the combined Statement of Additional Information.

NET ASSET VALUE
Each Portfolio's net asset value per share fluctuates. The net asset value
per share for Class A shares of each Portfolio is determined by dividing the net
assets attributable to the Class A shares by the total number of Class A shares
outstanding. Likewise, the net asset value per share for Class B shares of each
Portfolio is determined by dividing the net assets attributable to the Class B
shares by the total number of Class B shares outstanding. The net asset value
for Class A shares will, from time to time, differ from that of Class B shares
due to the variance in daily net income realized by and dividends paid on each
class of shares.

HOW TO BUY SHARES
Class A and Class B shares of the Portfolios are sold on days on which the
New York Stock Exchange is open for business. Class A and Class B shares of each
Portfolio may be purchased through a financial institution which has a sales
agreement with Mentor Distributors, Inc. (formerly Cambridge Distributors, Inc.)
(the "Distributor"). Each Portfolio reserves the right to reject any purchase
request.
ALTERNATIVE PURCHASE ARRANGEMENTS. Each Portfolio offers two
classes of shares, Class A and Class B shares. The Class A shares of
each Portfolio are sold at net asset value plus an applicable sales
charge, except under the circumstances described in the section entitled
"What Shares Cost," and generally are redeemed at net asset value.
However, a CDSC may be imposed on the redemption of the Class A shares
of each Portfolio under the circumstances described in the section
entitled "Contingent Deferred Sales Charge." The Class B shares of each
Portfolio are sold at net asset value and are redeemed at net asset
value. However, a CDSC may be imposed on the redemption of Class B
shares of each Portfolio under the circumstances described in the
section entitled "Contingent Deferred Sales Charge." Class A and Class B
shares represent identical interests in the Portfolios and have the same
rights and are identical in all respects, except that Class B shares of
each Portfolio will pay a distribution fee, which will cause the net
income attributable to Class B shares and the dividends payable on the
Class B shares to be reduced by the amount of the distribution fee and
incremental expenses associated with the distribution fee. As a result,
the net asset value of Class B shares of each Portfolio will be reduced
by such amount to the extent that the particular Portfolio has
undistributed net income. Sales personnel may receive different
compensation for selling Class A and Class B shares of the Portfolios.
THROUGH A FINANCIAL INSTITUTION. An investor may call his financial
institution (such as a broker/dealer or bank) to place an order to purchase
shares of a particular Portfolio. Orders through a financial institution are
considered received when the Distributor is notified of the purchase order.
Purchase orders through a registered broker/dealer must be received by the
broker/dealer before 4:00 p.m. (Eastern time) and must be transmitted by the
broker/dealer to the Distributor before 5:00 p.m. (Eastern time) in order for
shares to be purchased at that day's price. Purchase orders through other types
of financial institutions must be received by the financial institution and
transmitted to the particular Portfolio before 4:00 p.m. (Eastern time) in order
for shares to be purchased at that day's price. It is the financial
institution's responsibility to transmit orders promptly.
Investors who have previously opened an account with the Trust through a
financial institution may purchase additional shares by mail or by Federal
Reserve wire. To make such purchases, an investor should contact his financial
institution for instructions.
State securities laws governing the ability of depository institutions to
act as underwriters or distributors of securities may differ from
interpretations given to the Glass-Steagall Act and, therefore, banks and other
financial institutions may be required to register as dealers pursuant to state
law.

MINIMUM INVESTMENT REQUIRED
The minimum initial investment in Class A and Class B shares of each
Portfolio is $1,000, unless the investment is in a retirement plan, in which
case the minimum initial investment is $250. The minimum initial investment may
be waived for shareholders purchasing shares pursuant to the Systematic
Investment Program. Subsequent investments must be in amounts of at least $100,
except for retirement plans, which must be in amounts of $50. The minimum
initial investment may be waived for Trustees, emeritus trustees, employees and
retired employees of the Trust, or directors, emeritus directors, employees and
retired employees of the Distributor or affiliates thereof.

WHAT SHARES COST
CLASS A SHARES. Class A shares of the Growth, Capital Growth, Income and
Growth and Global Portfolios are sold at their net asset value next determined
after an order is received plus a sales charge as follows:

<TABLE>
<CAPTION>
SALES CHARGE
AS SALES CHARGE
A PERCENTAGE OF AS
PUBLIC A PERCENTAGE OF
OFFERING NET AMOUNT
PRICE INVESTED DEALER COMMISSION
<S> <C> <C> <C>
Less than $50,000............................................. 5.50% 5.82% 4.75%
$50,000 but less than $100,000................................ 4.75% 4.99% 4.00%
$100,000 but less than $250,000............................... 3.75% 3.90% 3.00%
$250,000 but less than $500,000............................... 3.00% 3.09% 2.50%
$500,000 but less than $1 million............................. 2.00% 2.04% 1.75%
$1 million or more............................................ 0% 0% (see below)
</TABLE>

Commissions will be paid to dealers who initiate and are responsible for
purchases as set forth in the Statement of Additional Information. Class A
shares of the Quality Income Portfolio and the Municipal Income Portfolio are
sold at their net asset value next determined after an order is received plus a
sales charge as follows:

<TABLE>
<CAPTION>
SALES CHARGE
AS SALES CHARGE
A PERCENTAGE OF AS
PUBLIC A PERCENTAGE OF
OFFERING NET AMOUNT
PRICE INVESTED DEALER COMMISSION
<S> <C> <C> <C>
Less than $100,000............................................ 4.75% 4.99% 4.00%
$100,000 but less than $250,000............................... 4.00% 4.17% 3.25%
$250,000 but less than $500,000............................... 3.00% 3.09% 2.50%
$500,000 but less than $1 million............................. 2.00% 2.04% 1.75%
$1 million or more............................................ 0% 0% (see below)
</TABLE>

Commissions will be paid to dealers who initiate and are responsible for
purchases as set forth in the Statement of Additional Information.
Under certain circumstances described under the section entitled "Redeeming
Shares," shareholders may be charged a CDSC by the Distributor at the time Class
A shares are redeemed.
The Distributor, the Investment Adviser, or certain Sub-Advisers, or
affiliates thereof, at their own expense and out of their own assets, may also
provide other compensation to dealers in connection with sales of shares of the
Portfolios. Compensation may also include, but is not limited to, financial
assistance to dealers in connection with conferences, sales, or training
programs for their employees, seminars for the public, advertising or sales
campaigns, or other dealer-sponsored special events. In some instances, this
compensation may be made available only to certain dealers whose representatives
have sold or are expected to sell significant amounts of shares. Dealers may not
use sales of the Trust's shares to qualify for this compensation to the extent
such may be prohibited by the laws of any state or any self-regulatory agency,
such as the National Association of Securities Dealers, Inc. None of the
aforementioned other compensation shall be paid for by the Trust or its
shareholders.
CLASS B SHARES. Class B shares of each Portfolio may be purchased at their
net asset value next determined after an order is received, without the
imposition of a sales charge. Class B shares will be subject to ongoing
distribution fees as described in the section entitled "Distribution Plan."
Under certain circumstances described under the section entitled "Redeeming
Shares," shareholders may be charged a CDSC by the Distributor at the time Class
B shares are redeemed.

<PAGE>
WHEN NET ASSET VALUE IS DETERMINED
The net asset value of Class A and Class B shares of each Portfolio is
determined as of 4:00 p.m. (Eastern time), Monday through Friday, except on: (i)
days on which there are not sufficient changes in the value of a Portfolio's
securities that its net asset value might be materially affected; (ii) days
during which no shares are tendered for redemption and no orders to purchase
shares are received; and (iii) days on which the New York Stock Exchange is
closed.

PURCHASES AT NET ASSET VALUE
Class A shares of the Portfolios may be purchased at their net asset value
with no sales charge by advisory accounts through investment advisers registered
under the Investment Advisers Act of 1940 or by bank trust departments
purchasing on behalf of their clients. Trustees, emeritus trustees, employees,
and retired employees of the Trust, or directors, emeritus directors, employees,
or retired employees of the Distributor or affiliates thereof, or any financial
institution who has a sales agreement with the Distributor with regard to the
Trust, and their spouses and children under age 21 may also buy Class A shares
at net asset value with no sales charge. Class A shares of the Portfolios also
may be purchased at their net asset value with no sales charge by defined
contribution retirement plans qualified under Internal Revenue Code section
401(a), that have 200 or more eligible employees.

REDUCING THE SALES CHARGE FOR CLASS A SHARES
The sales charge imposed on purchases of Class A shares of the Portfolios
can be reduced through:
-- quantity discounts and accumulated purchases;
-- signing a 13-month letter of intent;
-- using the reinvestment privilege; or
-- concurrent purchases.
QUANTITY DISCOUNTS AND ACCUMULATED PURCHASES. As shown in the sales charge
tables, larger purchases reduce the sales charge paid. The Distributor will
combine purchases of Class A shares made on the same day by the investor, his
spouse, and his children under age 21 when the sales charge is calculated.
If an additional purchase of Class A shares of a Portfolio is made, the
Distributor will consider the previous purchases still invested in the
Portfolios. For example, if a shareholder already owns Class A shares of one or
more of the Portfolios having a current value of $40,000 and he purchases
$10,000 or more of Class A shares of the Capital Growth Portfolio at the current
offering price, the sales charge on the additional purchase of Class A shares
according to the schedule now in effect would be 4.75%, not 5.50%.
To receive the sales charge reduction, the Distributor must be notified by
the shareholder in writing, or by his financial institution at the time that the
purchase is made, that Class A shares of one or more of the Portfolios are
already owned or that purchases are being combined. The particular Portfolio
will reduce the sales charge after it confirms the purchases.
LETTER OF INTENT. If an investor intends to purchase at least $50,000 of
Class A shares of one or more Portfolios within a 13-month period, the sales
charge may be reduced by signing a letter of intent to that effect. The size of
the reduction will depend upon the sales schedule applicable to the particular
Portfolios. This letter of intent includes a provision for a sales charge
adjustment, depending upon the amount actually purchased within the 13-
month period, and a provision for the custodian to hold 5.50% or 4.75%, as the
case may be, of the total amount intended to be purchased in escrow (in Class A
shares) until such purchase is completed.
The amount held in escrow will be applied to the shareholder's account at
the end of the 13-month period unless the amount specified in the letter of
intent is not purchased. In this event, an appropriate number of escrowed Class
A shares may be redeemed in order to realize the difference in the sales charge.
This letter of intent will not obligate the shareholder to purchase Class A
shares, but if he does, each purchase during the period will be at the sales
charge applicable to the total amount intended to be purchased. The letter of
intent may be dated as of a prior date to include any purchases made within the
past 90 days.
REINVESTMENT PRIVILEGE. If Class A shares of any of the Portfolios have
been redeemed, the shareholder has a one-time right, within 60 days, to reinvest
the redemption proceeds at the next-determined net asset value without any sales
charge. The Distributor must be notified by the shareholder in writing or by his
financial institution of the reinvestment in order to eliminate a sales charge.
If the shareholder redeems his shares in any of the Portfolios, there may be tax
consequences.
CONCURRENT PURCHASES. For purposes of qualifying for a sales charge
reduction, a shareholder has the privilege of combining concurrent purchases of
Class A shares of two or more Portfolios, the purchase price of which includes a
sales charge. For example, if a shareholder concurrently invested $70,000 in
Class A shares of the Quality Income Portfolio and $40,000 in Class A shares of
the Capital Growth Portfolio, the sales charge imposed upon the purchase of
Class A shares of both Portfolios would be reduced in accordance with those
schedules now in effect; that is, the shareholder would pay a sales charge of
4.00% on the purchase of the Quality Income Portfolio shares and 3.75% on the
purchase of Capital Growth Portfolio shares.
To receive this reduction on the sales charge, the Distributor must be
notified by the shareholder in writing or by his financial institution at the
time the concurrent purchases are made. The particular Portfolio or Portfolios
will reduce the sales charge after it confirms the purchases.

SYSTEMATIC INVESTMENT PROGRAM
Once an account with a Portfolio has been opened, shareholders may add to
their investment in that Portfolio on a regular basis in a minimum amount of
$100. Under the program, funds may be automatically withdrawn periodically from
the shareholder's checking account and invested in additional shares of the
particular Portfolio at the net asset value next determined after an order is
received by the Distributor, plus the applicable sales charge imposed upon
purchases of Class A shares. A shareholder may apply for participation in this
program through his financial institution. However, a shareholder may purchase
only the same class of shares under this program as that held in the existing
account. Thus, for example, a shareholder who has an account in Class A shares
of a Portfolio may only purchase Class A shares of that Portfolio under this
program.

CERTIFICATES AND CONFIRMATIONS
As transfer agent for the Portfolios, The Shareholder Services Group, Inc.
("TSSG"), maintains a share account for each shareholder. Share certificates are
not issued unless requested in writing to TSSG.
Detailed confirmations of each purchase, redemption, and distribution are
sent to each shareholder.

DIVIDENDS

Dividends, if any, are declared daily and paid monthly to all
shareholders invested in the Quality Income Portfolio and the Municipal
Income Portfolio on the record date. Any dividends for the Income and
Growth Portfolio are declared and paid quarterly to all shareholders
invested in the Income and Growth Portfolio on the record date.
Dividends, if any, are declared and paid semi-annually to all
shareholders invested in the Capital Growth Portfolio on the record
date, and dividends, if any, are declared and paid annually to all
shareholders invested in the Growth Portfolio and the Global Portfolio
on the record date. Dividends will be reinvested in additional shares of
the same class and Portfolio on payment dates at the ex-dividend date
net asset value without a sales charge unless cash payments are
requested by shareholders in writing to the Trust.

CAPITAL GAINS
Capital gains realized by each Portfolio, if any, will be distributed at
least once every 12 months.

RETIREMENT PLANS
Class A and Class B shares of the Portfolios can be purchased as an
investment for retirement plans or for IRA accounts. For further details,
including prototype retirement plans, contact the Portfolios and consult a tax
adviser.

EXCHANGE PRIVILEGE
Class A shares in each Portfolio may be exchanged for Class A shares in the
other Portfolios at net asset value without a sales charge or a CDSC. Class B
shares in each Portfolio may be exchanged for Class B shares in the other
Portfolios at net asset value without a sales charge or a CDSC. Shares of the
the Cash Resource U.S. Government Money Market Fund (the "Cash Fund") may be
exchanged for Class A shares in each Portfolio at net asset value without a
sales charge or CDSC, so long as the transferred shares have previously paid a
sales charge with respect to Class A shares of the Portfolios (unless not
applicable under the circumstances), and shares of the Cash Fund may be
exchanged for Class B shares in each Portfolio at net value without a CDSC. In
addition, Class A and Class B shares of the Portfolios may be exchanged into
shares of the Cash Fund at net asset value without a sales charge or CDSC.
If a shareholder making such an exchange qualifies for an elimination of
the sales charge with respect to Class A shares of the Portfolios, the
Distributor must be notified in writing by the shareholder or his financial
institution.
REQUIREMENTS FOR EXCHANGE. Shareholders using this privilege must exchange
shares having a net asset value of at least $1,000. Before the exchange, the
shareholder must receive a prospectus of the Portfolio for which the exchange is
being made.
This privilege is available to shareholders resident in any state in which
Class A or Class B shares of the Portfolio being acquired may be sold. Upon
receipt of proper instructions and required supporting documents, shares
submitted for exchange are redeemed and the proceeds invested in shares of the
other Portfolio. The exchange privilege may be modified or terminated at any
time. Shareholders will be notified of the modification or termination of the
exchange privilege.
Further information on the exchange privilege is available and the
prospectus for the Cash Fund may be obtained by calling 1-800-382-0016.
TAX CONSEQUENCES. An exercise of the exchange privilege is treated as a
sale for federal income tax purposes. Depending on the circumstances, a
short-term or long-term capital gain or loss may be realized.

<PAGE>
MAKING AN EXCHANGE. Instructions for exchanges may be given in writing or
by telephone. Written instructions require a signature guarantee. Shareholders
may have difficulty in making exchanges by telephone through brokers and other
financial institutions during times of drastic economic or market changes. If a
shareholder cannot contact his broker or other financial institution by
telephone, it is recommended that an exchange request be made in writing and
sent by overnight mail to The Mentor Funds, c/o TSSG, One American Express
Plaza, Providence, Rhode Island 02903.
TELEPHONE INSTRUCTIONS. Telephone instructions made by the investor may be
carried out only if a telephone authorization form is completed by the investor
and is on file with TSSG. If the instructions are given by a broker, a telephone
authorization form completed by the broker must be on file with TSSG. Shares may
be exchanged between two Portfolios by telephone only if both Portfolios have
identical shareholder registrations.
Any shares held in certificate form cannot be exchanged by telephone but
must be forwarded to TSSG and deposited to the shareholder's account before
being exchanged. Telephone exchange instructions may be recorded. Such
instructions will be processed as of 4:00 p.m. (Eastern time) and must be
received by the Distributor before that time for shares to be exchanged the same
day. Shareholders exchanging into a Portfolio will not receive any dividend that
is payable to shareholders of record on that date. This privilege may be
modified or terminated at any time.
If reasonable procedures are not followed by the Portfolios, they may be
liable for losses due to unauthorized or fraudulent telephone instructions.

REDEEMING SHARES
Each Portfolio redeems Class A and Class B shares at their net asset value
next determined, less the applicable CDSC as described below, after TSSG
receives the redemption request. Redemptions will be made on days on which each
Portfolio computes its net asset value. Redemptions can be made through a
financial institution or directly from each Portfolio. Redemption requests must
be received in proper form.

CONTINGENT DEFERRED SALES CHARGE
CLASS A SHARES. As of the date of this prospectus, shareholders who
purchase or who have purchased $1 million or more of the Class A shares of any
Portfolio at net asset value, without a sales charge, will be subject to a CDSC
by the Distributor of 1.00% for redemptions of such Class A shares made within
one year from the date of purchase. (For those shareholders who purchased $1
million or more of the Class A shares of any Portfolio at net asset value,
without a sales charge, prior to the date of this prospectus, the previous
four-year redemption period will be waived and such shareholders will now only
be subject to the one-year redemption period.) The CDSC will be calculated based
upon the lesser of the original purchase price of the Class A shares being
redeemed or the net asset value of those shares when redeemed.
The CDSC will not be imposed on Class A shares acquired through
reinvestment of dividends or distributions of long-term capital gains.
Redemptions are deemed to have occurred in the following order: (1) Class A
shares acquired through the reinvestment of dividends and long-term capital
gains; (2) purchases of Class A shares occurring more than four years before the
date of redemption; (3) purchases of $1 million or more of Class A shares
occurring more than one year before the date of redemption; (4) purchases of
Class A shares within the previous four years without the use of redemption
proceeds as described above; (5) purchases of Class A shares within the previous
one year through the use of redemption proceeds as described above; and (6)
purchases of $1 million or more of Class A shares within the previous year
without a sales charge.

<PAGE>
No CDSC will be imposed when a redemption results from a total or partial
distribution from a qualified retirement plan, IRA, Keogh Plan, or a custodial
account following retirement, attainment of age 59 1/2, separation from service
(except for an IRA), or results from the death or permanent and total disability
of the beneficial owner. Also, no CDSC will be imposed in connection with
involuntary redemptions by the Portfolios of accounts with low balances (see
" -- Accounts with Low Balances" below) or with respect to Class A shares
purchased under the circumstances described in the section entitled "Purchases
at Net Asset Value."
CLASS B SHARES. Shareholders who purchased Class B shares will be charged a
CDSC by the Distributor of 1.00% for redemptions of Class B shares made within
one year from the date of purchase. The CDSC will be calculated based upon the
lesser of the original purchase price of the Class B shares or the net asset
value of the Class B shares when redeemed.
The CDSC will not be imposed on Class B shares acquired through
reinvestment of dividends or distributions of long-term capital gains.
Redemptions are deemed to have occurred in the following order: (1) Class B
shares acquired through the reinvestment of dividends and long-term capital
gains; (2) purchases of Class B shares occurring more than one year before the
date of redemption; and (3) purchases of Class B shares within the previous
year.
No CDSC will be imposed when a redemption results from the total or partial
distribution from a qualified retirement plan, IRA, Keogh Plan, or a custodial
account following retirement, attainment of age 59 1/2, separation from service
(except for an IRA), or the death or permanent and total disability of the
beneficial owner. Additionally, no CDSC will be charged in connection with
redemptions by the Portfolios of accounts with low balances (see " -- Accounts
with Low Balances" below).
Any period during which Class A shares and Class B shares are invested in
the Cash Fund is not taken into account when determining whether a CDSC is
imposed upon redemption.
REINVESTMENT PRIVILEGE. If the Class B shares of any of the Portfolios have
been redeemed, the shareholder has a one-time right, within 60 days, to reinvest
the redemption proceeds plus the amount of contingent deferred sales charge paid
by the shareholder at the next-determined net asset value. The Distributor must
be notified by the shareholder in writing or by his financial institution of the
reinvestment in order to recover the CDSC. If the shareholder redeems his shares
in any of the Portfolios, there may be tax consequences.

THROUGH A FINANCIAL INSTITUTION
A shareholder may redeem Class A or Class B shares of the Portfolios by
calling his financial institution (such as a broker/dealer or a bank) to request
the redemption. Class A and Class B shares of the Portfolios will be redeemed at
the net asset value next determined, less the applicable CDSC, after the
particular Portfolio receives the redemption request from the financial
institution. The financial institution is responsible for promptly submitting
redemption requests and providing proper written redemption instructions to the
particular Portfolio. The financial institution may charge customary fees and
commissions for this service. Redemption requests through a registered
broker/dealer must be received by the broker/dealer before 4:00 p.m. (Eastern
time) and must be transmitted by the broker/dealer to the particular Portfolio
before 5:00 p.m. (Eastern time) in order for Class A and Class B shares to be
redeemed at that day's net asset value. Redemption requests through other
financial institutions must be received by the financial institution and
transmitted to the particular Portfolio before 4:00 p.m. (Eastern time) in order
for Class A and Class B shares to be redeemed at that day's net asset value.

<PAGE>
DIRECTLY FROM THE PORTFOLIOS
BY TELEPHONE. Shareholders may redeem their Class A and Class B shares of
the Portfolios by calling 1-800-382-0016. The proceeds will be mailed to the
shareholder's address of record or wire transferred to the shareholder's account
at a domestic commercial bank that is a member of the Federal Reserve System,
normally within one business day, but in no event longer than seven days after
receipt of the request. The minimum amount for a wire transfer is $1,000. Each
wire transfer may be subject to a fee of $10; additional fees may be charged by
the recipient's financial institution or bank. If at any time the Trust shall
determine it is necessary to terminate or modify this method of redemption,
shareholders will be promptly notified.
An authorization form permitting TSSG to accept telephone requests must
first be completed. Authorization forms and information on this service are
available from the Distributor. Telephone redemption instructions may be
recorded.
In the event of drastic economic or market changes, a shareholder may
experience difficulty in redeeming by telephone. If such a case should occur,
another method of redemption, such as redeeming by mail, should be considered.
If reasonable procedures are not followed by the Portfolios, they may be
liable for losses due to unauthorized or fraudulent telephone instructions.
BY MAIL. Any shareholder may redeem Class A or Class B shares of the
Portfolios by sending a written request to The Mentor Funds, c/o TSSG, One
American Express Plaza, Providence, Rhode Island 02903. The written request
should include the shareholder's name, the name of the particular Portfolio from
which Class A or Class B shares are being redeemed, the account number, and the
share or dollar amount requested.
If Class A or Class B share certificates have been issued, they must be
properly endorsed and should be sent by registered or certified mail with the
written request. Shareholders should call 1-800-382-0016 for assistance in
redeeming by mail.
Shareholders requesting a redemption of $50,000 or more, a redemption of
any amount to be sent to an address other than that on record with the
particular Portfolio, or a redemption payable other than to the shareholder of
record must have signatures on written redemption requests guaranteed by:
-- a trust company or commercial bank whose deposits are insured by the
Bank Insurance Fund ("BIF"), which is administered by the Federal
Deposit Insurance Corporation ("FDIC");
-- a member of the New York, American, Boston, Midwest, or Pacific Stock
Exchange;
-- a savings bank or savings and loan association whose deposits are
insured by the Savings Association Insurance Fund ("SAIF"), which is
administered by the FDIC; or
-- any other "eligible guarantor institution," as defined in the
Securities Exchange Act of 1934.
The Portfolios do not accept signatures guaranteed by a notary public.
The Trust and its transfer agent have adopted standards for accepting
signature guarantees from the above institutions. The Trust may elect in the
future to limit eligible signature guarantors to institutions that are members
of a signature guarantee program. The Trust and its transfer agent reserve the
right to amend these standards at any time without notice.
Normally, a check for the proceeds is mailed within one business day, but
in no event more than seven days, after receipt of a proper written redemption
request, except as described in the paragraph below.

<PAGE>
REDEMPTIONS BEFORE PURCHASE INSTRUMENTS CLEAR
When Class A or Class B shares are purchased by check or through the
Pre-Authorized Check ("PAC"), the proceeds from the redemption of those shares
are not available, and those shares may not be exchanged, until TSSG is
reasonably certain that the purchase check has cleared, which could take up to
ten calendar days.

SYSTEMATIC WITHDRAWAL PROGRAM
Shareholders who desire to receive payments of a predetermined amount not
less than $100 may take advantage of the Systematic Withdrawal Program. Under
this program, Class A and Class B shares of the Portfolios are redeemed to
provide for periodic withdrawal payments in an amount directed by the
shareholder. However, the aggregate withdrawals of Class B shares in any year
are not subject to a CDSC and are generally limited to 10% of the value of the
shareholder's account at the time of the establishment of the Systematic
Withdrawal Program. Depending upon the amount of the withdrawal payments, the
amount of dividends paid and capital gains distributions with respect to Class A
or Class B shares of the Portfolios, and the fluctuation of the net asset value
of Class A or Class B shares redeemed under this program, redemptions may
reduce, and eventually deplete, the shareholder's investment in the particular
Portfolio. For this reason, payments under the program should not be considered
as yield or income on the shareholder's investment in the particular Portfolio.
To be eligible to participate in this program, a shareholder must have an
initial account value in the particular Portfolio of at least $10,000.
A shareholder may apply for participation in this program through the
Distributor. Due to the fact that Class A shares are normally sold with a sales
charge, it may not be advisable for shareholders to be purchasing Class A shares
while participating in the program.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the
Portfolios may redeem Class A and Class B shares in any account, except for
retirement plans, and pay the proceeds to the shareholder if the account balance
falls below the required minimum value of $1,000. This requirement does not
apply, however, if the balance falls below $1,000 because of changes in any
particular Portfolio's net asset value. Before Class A or Class B shares are
redeemed to close an account, the shareholder is notified in writing and allowed
30 days to purchase additional Class A or Class B shares, as the case may be, to
meet the required minimum value of $1,000.

INFORMATION ABOUT THE MENTOR FUNDS
GENERAL INFORMATION. The Mentor Funds (formerly Cambridge Series Trust), an
open-end, management investment company, was established as a Massachusetts
business trust on January 20, 1992. The Trust's Declaration of Trust permits the
Trust to offer separate series of shares of beneficial interest representing
interests in separate Portfolios. The shares in any one Portfolio may be offered
in separate classes. As of the date of the prospectus, the Board of Trustees of
the Trust has established six Portfolios, each with two classes of shares, Class
A and Class B shares.
BOARD OF TRUSTEES. The Trust is managed by a Board of Trustees. The
Trustees are responsible for managing the Trust's business affairs and for
exercising all the Trust's powers, except those reserved for the shareholders.
The Executive Committee of the Board of Trustees handles the Board's
responsibilities between meetings of the Board.

<PAGE>
INVESTMENT MANAGEMENT OF THE TRUST

INVESTMENT ADVISER
The Trust is managed by Commonwealth Advisors, Inc. ("Commonwealth
Advisors") (formerly Cambridge Investment Advisors, Inc.), pursuant to an
investment advisory agreement (the "Investment Advisory Agreement") with the
Trust. As Investment Adviser, Commonwealth Advisors advises and assists the
officers of the Trust in taking such steps as are necessary or appropriate to
carry out the decisions of the Trustees. The Investment Adviser, in turn, has
entered into a sub-advisory agreement (the "Sub-Advisory Agreement") with sub-
advisers selected for certain of the Portfolios (the "Sub-Adviser" or
"Sub-Advisers"). Subject to such policies as the Trustees may determine,
Commonwealth Advisors or the Sub-Adviser, as the case may be, furnishes a
continuous investment program for a Portfolio and makes investment decisions on
a Portfolio's behalf.
INVESTMENT ADVISORY FEES. The Investment Adviser receives an annual
investment advisory fee from each Portfolio. For performing its
responsibilities, the Investment Adviser receives an annual investment advisory
fee not to exceed the following percentages of the average daily net assets of
the particular Portfolio: Growth Portfolio, 0.80%; Capital Growth Portfolio,
0.80%; Quality Income Portfolio, 0.60%; Municipal Income Portfolio, 0.60%; and
Income and Growth Portfolio, 0.75%. The annual investment advisory fee for the
Global Portfolio is equal to 1.10% of the average daily net assets of the
Portfolio up to and including $75 million and 1.00% of the average daily net
assets of the Portfolio in excess of $75 million. The advisory fee for the
Growth, Capital Growth, Income and Growth and Global Portfolios, while higher
than the advisory fee paid by other mutual funds in general, is comparable to
the advisory fees paid by many mutual funds with similar objectives and
policies. Under the Investment Advisory Agreement, the Investment Adviser may,
from time to time, voluntarily waive some or all of its investment advisory fee
and may terminate any such voluntary waiver of some or all of its investment
advisory fee at any time in its sole discretion. The Investment Adviser has
undertaken to reimburse the respective Portfolios for a portion of the
Portfolios' operating expenses in excess of limitations established by certain
states.
INVESTMENT ADVISER'S PROFILE. Commonwealth Advisors, Inc., located
at 901 East Byrd Street, Richmond, Virginia 23219, serves as the Trust's
Investment Adviser. It is a wholly-owned subsidiary of Mentor Investment
Group, Inc. (formerly Investment Management Group, Inc.), which, in
turn, is a wholly-owned subsidiary of Wheat First Butch Singer, Inc., a
diversified financial services holding company. The Investment Adviser
was incorporated under the laws of Virginia in 1991 as Cambridge
Investment Advisors, Inc. Until April 12, 1995, each of the Portfolios
which the Investment Adviser serves as investment manager and to which
the Investment Adviser now furnishes a continuous investment program was
managed by an independent Sub-Adviser. All of the investment advisory
personnel of the Investment Adviser have substantial experience in the
investment advisory field and provide advisory services to other mutual
funds in the Mentor family of funds. P. Michael Jones, Charles W. Grant
and Stephen Henderson, portfolio managers at Commonwealth Advisors, are
primarily responsible for the day-to-day management of the Mentor
Quality Income Portfolio. Mr. John G. Davenport, a portfolio manager at
Commonwealth Advisors, is primarily responsible for the day-to-day
management of the Mentor Capital Growth Portfolio and the
Mentor/Cambridge Growth Portfolio. Mr. Jones currently serves as Senior
Vice President and Director of Fixed Income Research at Commonwealth
Investment Counsel, Inc. ("Commonwealth Investment Counsel"), Mr. Jones
has eight years of investment management experience. He served
previously as Senior Vice President of Ryland Capital Management, Inc.
and as Vice President of Alliance Capital Management. Mr. Henderson, who
is Associate Vice President and Portfolio Manager at Commonwealth
Investment Counsel, has six years of investment management experience.
Mr. Grant, a Managing Director at Commonwealth Investment Counsel, has
fourteen years of investment management experience. He served previously
as President and Chief Investment Officer of Ryland Capital Management,
Inc. Mr. Davenport, a Managing Director of Commonwealth Investment
Counsel, has eleven years of investment management experience. He served
previously as Director of Equity Research at Lowe, Brockenbrough,
Tierney & Tattersall. Commonwealth Investment Counsel currently has
assets under management an excess of $3.2 billion, and serves as
investment adviser to Cash Resource Trust and IMG Institutional Trust,
both open-end investment companies, and Mentor Income Fund, Inc., a
closed-end investment company.

THE SUB-ADVISERS
As discussed below under the section entitled "Sub-Advisers' Profiles,"
certain of the Portfolios are managed by separate Sub-Advisers. Each Sub-Adviser
has complete discretion to purchase, manage, and sell portfolio securities for
the Portfolio to which it serves as Sub-Adviser within the particular
Portfolio's investment objectives, restrictions, and policies.
SUB-ADVISORY FEES. VK/AC Management receives an annual fee from
Commonwealth Advisors not to exceed 0.30% of the Municipal Income Portfolio's
assets. WMC receives an annual fee from Commonwealth Advisors expressed as a
percentage of the Income and Growth Portfolio's assets as follows: 0.325% on the
first $50 million in Portfolio assets, 0.275% on the next $150 million in
assets, 0.225% on the next $300 million in assets, and 0.200% on assets over
$500 million. Perpetual receives an annual fee from Commonwealth Advisors
expressed as a percentage of the Global Portfolio's assets as follows: 0.55% on
the first $75 million in Portfolio assets, and 0.50% on assets over $75 million.
No performance or incentive fees are paid to the Sub-Advisers. Under certain
Sub-Advisory Agreements, the particular Sub-Adviser may, from time to time,
voluntarily waive some or all of its sub-advisory fee charged to Commonwealth
Advisors and may terminate any such voluntary waiver at any time in its sole
discretion.

SUB-ADVISERS' PROFILES
MENTOR MUNICIPAL INCOME PORTFOLIO. Under the terms of a Sub-Advisory
Agreement between Van Kampen/American Capital Management Inc. ("VK/AC
Management") and Commonwealth Advisors, VK/AC Management serves as the
Sub-Adviser to the Municipal Income Portfolio. VK/AC Management, located at One
Parkview Plaza, Oakbrook Terrace, Illinois 60181, was incorporated in 1990 and
commenced operations in 1992. VK/AC Management currently provides investment
advice to a wide variety of individual, institutional, and investment company
clients. VK/AC Management is a wholly-owned subsidiary of Van Kampen/American
Capital, Inc., which, in turn, is a wholly-owned subsidiary of VK/AC Holding,
Inc. VK/AC Holding, Inc. is indirectly controlled by Clayton & Dubilier
Associates IV Limited Partnership, the general partners of which are Joseph L.
Rice, III, B. Charles Ames, Alberto Cribiore, Donald J. Gogel, and Hubbard C.
Howe, each of whom is a principal of Clayton, Dubilier & Rice, Inc., a New
York-based private investment firm.
The current Sub-Advisory Agreement between VK/AC Management and
Commonwealth Advisors was approved by shareholders of the Portfolio on February
5, 1993. On February 17, 1993, the Sub-Advisory Agreement between the
Portfolios' previous sub-adviser, Van Kampen/American Capital Investment
Advisory Corp. ("Advisory Corp."), and Commonwealth Advisors terminated. The
rate of the sub-advisory fee to be paid to VK/AC Management under the current
Sub-Advisory Agreement is identical to that paid to Advisory Corp. under the
former Sub-Advisory Agreement, and the terms of the two contracts are
substantially identical. VK/AC Management is staffed by personnel formerly
employed by Advisory Corp. and continues to use the resources of Advisory Corp.
in managing client accounts. As of December 31, 1994, VK/AC Management, together
with its affiliates, managed or supervised approximately $49.6 billion of
assets.

<PAGE>
David C. Johnson has been co-manager of the Municipal Income Portfolio
since 1992. Mr. Johnson joined Van Kampen/American Capital in 1989, and is
currently First Vice President of the firm. He has served as portfolio manager
of the Municipal Income Portfolio since 1989 and is responsible for the
municipal fund desk. He was previously associated with The Chicago Corporation,
where he marketed financial futures and options. Mr. Johnson received his M.B.A.
from Loyola University.
William V. Grady has been co-manager of the Municipal Income Portfolio
since 1992. Mr. Grady is Vice President of Van Kampen/American Capital, which he
joined in 1992. He is portfolio manager for several national and specialty state
funds. He was previously associated with Municipal Bond Investors Assurance
Corporation where he structured insured tax-exempt financings for two years, and
was employed by CIGNA Investments Inc. from 1984-1990 as a portfolio manager and
research analyst. Mr. Grady is a Chartered Financial Analyst and received his
B.B.A. in Finance from the University of Notre Dame.
MENTOR INCOME AND GROWTH PORTFOLIO. Commonwealth Advisors employs
Wellington Management Company ("WMC") to manage the investment and reinvestment
of the assets of the Income and Growth Portfolio and to continuously review,
supervise, and administer the Portfolio's investment program. WMC, located at 75
State Street, Boston, Massachusetts 02109, is a professional investment
counseling firm which provides investment services to investment companies,
employee benefit plans, endowments, foundations, and other institutions and
individuals. As of September 30, 1994, WMC had discretionary investment
management authority with respect to approximately $82.0 billion in assets. WMC
and its predecessor organizations have provided investment advisory services to
investment companies since 1933 and to investment counseling clients since 1960.
Paul D. Kaplan, Senior Vice President of WMC, and Arnold C. Schneider III,
Senior Vice President of WMC, have served as portfolio managers to the Portfolio
since its inception in May 1993, when WMC became Sub-Adviser to the Portfolio.
Mr. Kaplan manages the fixed-income and U.S. government securities portion of
the Portfolio, and Mr. Schneider manages the equity securities portion of the
Portfolio. Mr. Kaplan has been a portfolio manager with WMC since 1982 and Mr.
Schneider has been a portfolio manager with WMC since 1987.
MENTOR PERPETUAL GLOBAL PORTFOLIO. Perpetual Portfolio Management Ltd.
("Perpetual") serves as Sub-Adviser to the Global Portfolio. Perpetual manages
portfolios of Perpetual Unit Trust and of private individuals, charities,
pension plans, and life assurance companies. Scott McGlashan, a Director of
Perpetual, is primarily responsible for the day-to-day management of Perpetual
Global Portfolio. He has over twelve years of experience in specialist
international funds management. Until April 12, 1995, Scudder, Stevens & Clark
served as sub-adviser to the Global Portfolio, and received fees from the
Investment Adviser at the same rate as Perpetual now receives such fees.
THE TRUSTEES HAVE APPROVED AN INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
WITH MENTOR PERPETUAL INVESTMENT ADVISORS, L.C. ("MENTOR PERPETUAL"), A VIRGINIA
CORPORATION. IF THE AGREEMENT IS APPROVED BY SHAREHOLDERS, MENTOR PERPETUAL
WOULD BECOME THE INVESTMENT ADVISER TO THE PORTFOLIO AND THE PORTFOLIO'S
ADVISORY ARRANGEMENTS WITH COMMONWEALTH ADVISORS AND PERPETUAL WOULD BE
TERMINATED. MENTOR PERPETUAL IS OWNED EQUALLY BY PERPETUAL PLC, THE PARENT
COMPANY OF PERPETUAL, AND MIG, THE PARENT COMPANY OF COMMONWEALTH ADVISORS. ALL
OF THE INVESTMENT ADVISORY PERSONNEL OF MENTOR PERPETUAL, INCLUDING MR.
MCGLASHAN, ARE EMPLOYEES OF PERPETUAL, AND MR. MCGLASHAN WOULD CONTINUE TO BE
PRIMARILY RESPONSIBLE FOR THE DAY-TO-DAY MANAGEMENT OF THE GLOBAL PORTFOLIO. THE
PORTFOLIO WOULD PAY FEES TO MENTOR PERPETUAL AT THE SAME RATE IT CURRENTLY PAYS
TO COMMONWEALTH ADVISORS.

<PAGE>
DISTRIBUTION OF PORTFOLIO SHARES
Mentor Distributors, Inc. (formerly Cambridge Distributors, Inc.), having
its principal office at 901 East Byrd Street, Richmond, Virginia 23219, is the
principal distributor for Class A and Class B shares of the Portfolios. Mentor
Distributors, Inc. is a Virginia corporation organized on December 24, 1991 and
is an affiliate of the Investment Adviser.
DISTRIBUTION PLAN. Pursuant to the provisions of a distribution plan
adopted in accordance with Rule 12b-1 under the Investment Company Act of 1940
(the "Plan"), Class B shares of the Commonwealth Growth, Capital Growth, Income
and Growth and Global Portfolios will pay an amount computed at an annual rate
of 0.75% of the average daily net asset value of Class B shares of the
particular Portfolio to finance any activity which is principally intended to
result in the sale of those Class B shares. The Class B shares of the Quality
Income Portfolio and the Municipal Income Portfolio will pay an amount computed
at an annual rate of 0.50% of the average daily net asset value of Class B
shares of the particular Portfolio to finance any activity which is principally
intended to result in the sale of those Class B shares.
The Distributor may, from time to time and for such periods as it deems
appropriate, voluntarily reduce its compensation under the Plan by notice to the
Class B shareholders of a particular Portfolio.
The Distributor may select financial institutions (such as a broker/dealer
or bank) to provide sales support services as agents for their clients or
customers who beneficially own Class B shares of the Portfolios. Financial
institutions will receive fees from the Distributor based upon Class B shares
owned by their clients or customers. The schedules of such fees and the basis
upon which such fees will be paid will be determined from time to time by the
Distributor.
The Plan is a compensation type plan. As such, the Portfolios make no
payments to the Distributor except as described above. Therefore, the Portfolios
do not pay for unreimbursed expenses of the Distributor, including amounts
expended by the Distributor in excess of amounts received by it from the
Portfolios, interest, carrying, or other financing charges in connection with
excess amounts expended, or the Distributor's overhead expenses. However, the
Distributor may be able to recover such amounts or may earn a profit from future
payments made by the Portfolios under the Plan.

ADMINISTRATION OF THE TRUST
ADMINISTRATIVE SERVICES. Mentor Investment Group, Inc. (the
"Administrator"), located at 901 East Byrd Street, Richmond, Virginia 23219,
provides each Portfolio with certain administrative personnel and services
necessary to operate each Portfolio, such as legal and accounting services. The
Administrator provides these services at an annual rate of 0.125% on the first
$1.5 billion of the average aggregate daily net assets of the Trust and 0.120%
on assets in excess of $1.5 billion. The Administrator may voluntarily reimburse
a portion of its administrative fee. The Administrator is the parent of the
Investment Adviser.
CUSTODIAN, TRANSFER AGENT, AND DIVIDEND DISBURSING AGENT. Investors
Fiduciary Trust Company, 127 West 10th Street, Kansas City, Missouri 64105, is
custodian for the securities and cash of each Portfolio (except the Global
Portfolio). State Street Bank & Trust Company, P.O. Box 8602, Boston,
Massachusetts 02266 is custodian for the securities and cash of the Global
Portfolio. The Shareholder Services Group, Inc., P.O. Box 9653, Providence,
Rhode Island 02940-9653, is transfer agent for Class A and Class B shares of the
Portfolios and dividend disbursing agent for the Portfolios.
INDEPENDENT AUDITORS. The independent auditors for the Portfolios are KPMG
Peat Marwick LLP, One Boston Place, Boston, Massachusetts 02108.

<PAGE>
BROKERAGE TRANSACTIONS
When selecting brokers and dealers to handle the purchase and sale of
portfolio instruments, the Investment Adviser or the Sub-Adviser, if any, looks
for prompt execution of the order at the best overall terms available. In
working with dealers, the Investment Adviser or the Sub-Adviser will generally
use those who are recognized dealers in specific portfolio instruments, except
when a better price and execution of the order can be obtained elsewhere. In
selecting among firms believed to meet these criteria, the Investment Adviser or
the Sub-Adviser may give consideration to those firms which have sold or are
willing to sell shares of the Portfolios. The Investment Adviser or the
Sub-Adviser makes decisions on portfolio transactions and selects brokers and
dealers subject to review by the Board of Trustees.
Notwithstanding the foregoing, to the extent consistent with applicable
provisions of the Investment Company Act of 1940, Rule 17e-1, and other rules
and exemptions adopted by the Securities and Exchange Commission ("SEC") under
that Act, the Board of Trustees of the Trust has determined that transactions
for the Portfolios may be executed by affiliated brokers if, in the judgment of
the Investment Adviser or the Sub-Adviser, as the case may be, the use of an
affiliated broker is likely to result in price and execution at least as
favorable as those of other qualified brokers. Under rules adopted by the SEC,
an affiliated broker may not execute transactions for a Portfolio on the floor
of any national securities exchange, but may effect transactions by transmitting
orders for execution, providing for clearance and settlement and arranging for
the performance of the execution function by members of the exchange not
associated with the affiliated broker. The broker will be required to pay fees
charged by those persons performing the floor brokerage elements out of the
brokerage compensation that it receives from a Portfolio.

SHAREHOLDER SERVICING PLAN
The Trust has adopted a Shareholder Servicing Plan (the "Service Plan")
with respect to Class A and Class B shares of each Portfolio. Under the Service
Plan, financial institutions will enter into shareholder service agreements with
the Portfolios to provide administrative support services to their customers who
from time to time may be owners of record or beneficial owners of Class A or
Class B shares of one or more Portfolios. In return for providing these support
services, a financial institution may receive payments from one or more
Portfolios at a rate not exceeding 0.25% of the average daily net assets of the
Class A or Class B shares of the particular Portfolio or Portfolios beneficially
owned by the financial institution's customers for whom it is holder of record
or with whom it has a servicing relationship. These administrative services may
include, but are not limited to, the following functions: providing office
space, equipment, telephone facilities, and various personnel, including
clerical, supervisory, and computer, as necessary or beneficial to establish and
maintain shareholder accounts and records; processing purchase and redemption
transactions and automatic investments of client account cash balances;
answering routine client inquiries regarding the Portfolios; assisting clients
in changing dividend options, account designations, and addresses; and providing
such other services as the Portfolios reasonably request.
In addition to receiving payments under the Service Plan, financial
institutions may be compensated by the Investment Adviser, the Sub-Adviser, if
any, and/or the Administrator, or affiliates thereof, for providing
administrative support services to holders of Class A or Class B shares of the
Portfolios. These payments will be made directly by the Investment Adviser,
Sub-Adviser, and/or Administrator and will not be made from the assets of any of
the Portfolios.

EXPENSES OF THE PORTFOLIOS AND THE CLASS A AND CLASS B SHARES
The holders of each class of shares pay their allocable portion of their
respective Portfolio's expenses and the expenses of the Trust.

<PAGE>
The expenses of the Trust for which holders of Class A shares and Class B
shares each pay their allocable portion include, but are not limited to: the
cost of organizing the Trust and continuing its existence; registering the
Trust; Trustees' fees; auditors' fees; the cost of meetings of the Trust; legal
fees of the Trust; association membership dues; and such non-recurring and
extraordinary items as may arise from time to time.
Each Portfolio's expenses for which holders of Class A shares and Class B
shares each pay their allocable portion include, but are not limited to:
registering the Portfolio and Class A and Class B shares of the Portfolio;
investment advisory services; taxes and commissions; custodian fees; insurance
provisions; auditors' fees; transfer agent fees; accounting and investor
servicing fees; and such non-recurring and extraordinary items as may arise from
time to time.
At present, the only expenses which are allocated specifically to Class A
shares as a class are expenses under the Trust's Shareholder Servicing Plan, and
the only expenses which are allocated specifically to Class B shares as a class
are expenses under the Trust's Shareholder Servicing Plan and Rule 12b-1 Plan.
However, the Board of Trustees reserves the right to allocate certain expenses
to holders of Class A shares and Class B shares as it deems appropriate ("Class
Expenses"). In any case, Class Expenses would be limited to: distribution fees;
transfer agent fees as identified by the transfer agent as attributable to
holders of Class A shares or Class B shares; fees under the Trust's Shareholder
Servicing Plan; printing and postage expenses related to preparing and
distributing materials such as shareholder reports, prospectuses, and proxies to
current shareholders; registration fees paid to the SEC and to state securities
commissions; expenses related to administrative personnel and services as
required to support holders of Class A shares or Class B shares; legal fees
relating solely to Class A shares or Class B shares; and Trustees' fees incurred
as a result of issues relating solely to Class A shares or Class B shares.

SHAREHOLDER INFORMATION

VOTING RIGHTS
Each Class A share and each Class B share of a Portfolio gives the
shareholder one vote in Trustee elections and other matters submitted to
shareholders of the Trust for vote. All shares of all classes of each Portfolio
have equal voting rights, except that in matters affecting only a particular
Portfolio or class, only shares of that Portfolio or class are entitled to vote.
As a Massachusetts business trust, the Trust is not required to hold annual
shareholder meetings. Shareholder approval will be sought only for certain
changes in the Trust's or a Portfolio's operation and for the election of
Trustees under certain circumstances.
Trustees may be removed by a two-thirds vote of the number of Trustees
prior to such removal or by a two-thirds vote of the shareholders at a special
meeting. A special meeting of shareholders shall be called by the Trustees upon
the written request of shareholders owning at least 10% of the Trust's
outstanding shares of all series entitled to vote.

MASSACHUSETTS PARTNERSHIP LAW
Under certain circumstances, shareholders may be held personally liable
under Massachusetts law for acts or obligations of the Trust on behalf of the
Trust. To protect shareholders of the Portfolios, the Trust has filed legal
documents with the state of Massachusetts that expressly disclaim the liability
of shareholders of the Portfolios for such acts or obligations of the Trust.
These documents require notice of this disclaimer to be given in each agreement,
obligation, or instrument the Trust or its Trustees enter into or sign on behalf
of the Portfolios.

<PAGE>
In the unlikely event a shareholder is held personally liable for the
Trust's obligations, the Trust is required by the Declaration of Trust to use
the property of the Trust to protect or compensate the shareholder. On request,
the Trust will defend any claim made and pay any judgment against a shareholder
for any act or obligation of the Trust. Therefore, financial loss resulting from
liability as a shareholder will occur only if the Trust cannot meet its
obligations to indemnify shareholders and pay judgments against them from its
assets.

TAX INFORMATION
GENERAL. The Portfolios do not anticipate having to pay federal income tax
because each Portfolio expects to meet the requirements of the Internal Revenue
Code, as amended, applicable to regulated investment companies and to receive
the special tax treatment afforded to such companies.
Each Portfolio will be treated as a single, separate entity for federal
income tax purposes so that income and losses (including capital gains and
losses) realized by a Portfolio will not be combined for tax purposes with
income and losses realized by any of the other Portfolios.
Unless otherwise exempt, shareholders of the Portfolios, other than the
Municipal Income Portfolio, which is discussed below, are required to pay
federal income tax on any dividends and other distributions, including capital
gains distributions, received. This applies whether dividends and distributions
are received in cash or as additional shares. Distributions representing
long-term capital gains, if any, will be taxable to shareholders as long-term
capital gains irrespective of how long the shareholders have held the particular
shares. No federal income tax is due on any dividends or any capital gain
distributions earned in an IRA or qualified retirement plan or custodial account
until distributed.
MENTOR MUNICIPAL INCOME PORTFOLIO. With respect to the Municipal Income
Portfolio, shareholders are not required to pay the federal regular income tax
on any dividends received from the Portfolio that represent net interest on
tax-exempt municipal bonds. However, under the Tax Reform Act of 1986, dividends
representing net interest earned on some municipal bonds may be included in
calculating the federal individual alternative minimum tax or the federal
alternative minimum tax for corporations.
The alternative minimum tax, equal to up to 28% of alternative minimum
taxable income for individuals and 20% for corporations, applies when it exceeds
the regular tax for the taxable year. Alternative minimum taxable income is
equal to the regular taxable income of the taxpayer increased by certain "tax
preference" items not included in regular taxable income and reduced by only a
portion of the deductions allowed in the calculation of the regular tax.
The Tax Reform Act of 1986 treats interest on certain "private activity"
bonds issued after August 7, 1986, as a tax preference item. Unlike traditional
governmental purpose municipal bonds, which finance roads, schools, libraries,
prisons and other public facilities, private activity bonds provide benefits to
private parties. The Portfolio may purchase all types of municipal bonds,
including private activity bonds.
In addition, in the case of a corporate shareholder, dividends of the
Portfolio which represent interest on municipal bonds may be subject to the 20%
corporate alternative minimum tax because the dividends are included in a
corporation's "adjusted current earnings." The corporate alternative minimum tax
treats 75% of the excess of a taxpayer's pre-tax "adjusted current earnings"
over the taxpayer's alternative minimum taxable income as a tax preference item.
"Adjusted current earnings" is based upon the concept of a corporation's
"earnings and profits." Since "earnings and profits" generally includes the full
amount of any Portfolio dividend, and alternative minimum taxable income does
not include the portion of the Portfolio's dividend attributable to
<PAGE>
municipal bonds which are not private activity bonds, the difference will be
included in the calculation of the corporation's alternative minimum tax.
Dividends of the Portfolio representing net interest income earned on some
temporary investments and any realized net short-term gains are taxed as
ordinary income.
Information on the tax status of dividends and distributions is provided
annually.

PERFORMANCE INFORMATION
From time to time, each Portfolio advertises its total return, yield, and,
as applicable, tax-equivalent yield.
Total return represents the change, over a specified period of time, in the
value of an investment in a particular Portfolio after reinvesting all income
and capital gains distributions. It is calculated by dividing that change by the
initial investment and is expressed as a percentage.
The yield of Class A and Class B shares of each Portfolio is calculated by
dividing the net investment income per share (as defined by the SEC) earned by
the particular Portfolio over a thirty-day period by the maximum offering price
per Class A and Class B share of that Portfolio on the last day of the period.
This number is then annualized using semi-annual compounding. With respect to
the Municipal Income Portfolio, the tax-equivalent yield of the Portfolio is
calculated similarly to the yield but is adjusted to reflect the taxable yield
that the Portfolio would have had to earn to equal its actual yield, assuming a
specific tax rate. The yield and tax-equivalent yield do not necessarily reflect
income actually earned by each Portfolio and, therefore, may not correlate to
the dividends or other distributions paid to shareholders.
The performance information reflects the effect of the maximum sales load,
in the case of Class A shares of each Portfolio, and other non-recurring
charges, such as the CDSC, in the case of Class A and Class B shares of each
Portfolio, which, if excluded, would increase the total return, yield and, as
applicable, tax-equivalent yield. Each Portfolio will include the performance
information for both Class A and Class B shares in any advertisement or
information that includes the performance data of the particular Portfolio.
From time to time, the Trust may advertise its performance using certain
reporting services and/or compare its performance to certain indices.

<PAGE>
THE MENTOR FUNDS
PROSPECTUS
AN OPEN-END MANAGEMENT
INVESTMENT COMPANY
(Bullet) Mentor/Cambridge Growth Portfolio
(Bullet) Mentor Capital Growth Portfolio
(Bullet) Mentor Quality Income Portfolio
(Bullet) Mentor Municipal Income Portfolio
(Bullet) Mentor Income and Growth Portfolio
(Bullet) Mentor Perpetual Global Portfolio
April 13, 1995
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