BRINSON FUNDS INC, 497, 1996-10-29

BRINSON FUNDS INC
497, 1996-10-29

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[LOGO] The Brinson Funds

BRINSON GLOBAL FUND

BRINSON GLOBAL EQUITY FUND

BRINSON GLOBAL BOND FUND

209 South LaSalle Street
Chicago, IL 60604-1295

PROSPECTUS
OCTOBER 28, 1996

This Prospectus pertains only to the Brinson Global Fund, Brinson Global
Equity Fund and Brinson Global Bond Fund (each a "Fund" and collectively, the
"Funds" or "Global Funds"), which represent the Brinson Fund class shares of
the Global Fund, Global Equity Fund and Global Bond Fund Series (each a
"Series" and collectively, the "Series").

The Brinson Fund class shares have no sales charges or 12b-1 fees. The
SwissKey Fund class shares are also offered without sales charges, but impose
a 12b-1 fee. Further information relating to the SwissKey Fund class shares
may be obtained by calling 1-800-SWISSKEY.

This Prospectus sets forth concisely the information a prospective investor
should know before investing in any of the Global Funds. Investors should read
and retain this Prospectus for future reference. Additional information about
the Global Funds, and the other Series and classes of shares of the Trust is
contained in the Statement of Additional Information dated October 28, 1996,
as amended from time to time, which has been filed with the U.S. Securities
and Exchange Commission. The Statement of Additional Information is
incorporated by reference into this Prospectus and is available upon request
and without charge from the Trust, at the addresses and telephone numbers
below.

AN INVESTMENT IN THE FUNDS IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE
BOARD OR ANY OTHER AGENCY. AN INVESTMENT IN ANY OF THE FUNDS IS NOT A DEPOSIT
OR OTHER OBLIGATION OF, OR GUARANTEED OR ENDORSED BY, ANY BANK.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE U.S.
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE U.S. 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.

UNDERWRITER: ADVISOR:
FPS Broker Services, Inc. Brinson Partners, Inc.
3200 Horizon Drive 209 South LaSalle Street
P.O. Box 61503 Chicago, IL 60604-1295
King of Prussia, PA 19406-0903 (800) 448-2430
(800) 448-2430
<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Annual Fund Operating Expenses............................................. 1
Financial Highlights....................................................... 2
Description of the Global Funds............................................ 3
Investment Objectives and Policies......................................... 3
Global Fund.............................................................. 3
Global Equity Fund....................................................... 4
Global Bond Fund......................................................... 4
Investment Considerations and Risks........................................ 5
Management of the Trust.................................................... 7
Portfolio Management....................................................... 8
Administration of the Trust................................................ 8
Purchase of Shares......................................................... 9
Account Options............................................................ 10
Redemption of Shares....................................................... 11
Net Asset Value............................................................ 14
Dividends, Distributions and Taxes......................................... 15
General Information........................................................ 17
Performance Information.................................................... 18
Appendix A................................................................. 20
</TABLE>

This Prospectus is not an offering of the securities herein described in any
jurisdiction or to any person to whom it is unlawful for the Funds to make
such an offer or solicitation. No sales representative, dealer, or other
person is authorized to give any information or make any representation other
than those contained in this Prospectus.

<PAGE>

ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)

<TABLE>
<CAPTION>
TOTAL FUND
MANAGEMENT FEES OTHER EXPENSES OPERATING EXPENSES
(AFTER FEE WAIVER)/1/ (AFTER REIMBURSEMENT)/2/ (AFTER REIMBURSEMENT)
--------------------- ------------------------ --------------------
<S> <C> <C> <C>
Brinson Global Fund..... 0.80% 0.24% 1.04%
Brinson Global Equity
Fund.................... 0.03% 0.97% 1.00%
Brinson Global Bond
Fund.................... 0.00% 0.90% 0.90%
</TABLE>
- ----------
/1/The Advisor has irrevocably agreed to waive its fees and reimburse certain
expenses so that the total operating expenses of the Brinson Global Fund,
Brinson Global Equity Fund and Brinson Global Bond Fund will never exceed
1.10%, 1.00% and 0.90%, respectively. Had the Advisor not irrevocably agreed
to waive fees and reimburse expenses, the total fund operating expenses for
the fiscal year ended June 30, 1996 for the Brinson Global Equity Fund and
Brinson Global Bond Fund would have been 1.77% and 1.65%, respectively.

/2/"Other Expenses" include the fee paid to the Administrator, which is
calculated on the basis of the total net assets of all portfolios within the
Trust and is subject to an annual minimum fee of $75,000 for the initial
multiple class portfolio and $10,000 per each additional multiple class
portfolio.

EXAMPLE: Based on the level of expenses listed above after reimbursement,
the total expenses relating to an investment of $1,000 would be as follows,
assuming a 5% annual return and redemption at the end of each time period.

<TABLE>
<CAPTION>
NAME OF FUND 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------ ------ ------- ------- --------
<S> <C> <C> <C> <C>
Brinson Global Fund............................. $11 $33 $57 $127
Brinson Global Equity Fund...................... $10 $32 $55 $122
Brinson Global Bond Fund........................ $ 9 $29 $50 $111
</TABLE>

The foregoing table is designed to assist the investor in understanding the
various costs and expenses that a shareholder will bear directly or
indirectly.

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

THE EXAMPLE SHOULD NOT BE CONSIDERED REPRESENTATIVE OF PAST OR FUTURE EXPENSES
AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE INDICATED. MOREOVER,
WHILE THE EXAMPLE ASSUMES A 5% ANNUAL RETURN, A FUND'S ACTUAL PERFORMANCE WILL
VARY AND MAY RESULT IN ACTUAL RETURNS GREATER OR LESS THAN 5%.

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

1
<PAGE>

FINANCIAL HIGHLIGHTS

The selected financial information in the following table has been audited
by the Funds' independent auditors, whose unqualified report thereon appears
in the Funds' Annual Report to Shareholders dated June 30, 1996. Additional
financial data and related notes are contained in the Funds' Annual Report to
Shareholders, which is incorporated by reference into the Statement of
Additional Information and is available without charge upon request.

FINANCIAL HIGHLIGHTS--FISCAL YEARS ENDED JUNE 30

The following table presents financial data relating to a share of
beneficial interest outstanding throughout the periods presented. This
information has been derived from the Funds' financial statements.

<TABLE>
<CAPTION>
INCOME (LOSS) FROM INVESTMENT
OPERATIONS LESS DISTRIBUTIONS
------------------------------ -----------------------------
DISTRIBU-
TOTAL TIONS DISTRIBU-
INCOME FROM AND TIONS NET NET
NET (LOSS) IN EXCESS FROM AND ASSET ASSETS,
NET ASSET NET REALIZED FROM OF NET IN EXCESS VALUE- TOTAL END OF
VALUE- INVEST- AND INVEST- INVEST- OF NET TOTAL END RETURN PERIOD
BEGINNING MENT UNREALIZED MENT MENT REALIZED DISTRIBU- OF (NON- (IN
YEAR OF PERIOD INCOME GAIN (LOSS) OPERATIONS INCOME GAIN TIONS PERIOD ANNUALIZED) 000S)
- ---- --------- ------- ----------- ---------- --------- --------- --------- ------ ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BRINSON GLOBAL FUND (Commencement of Operations August 31, 1992)
1993............ $10.00 0.26 0.81 1.07 (0.20) -- (0.20) $10.87 10.76% $191,389
1994............ 10.87 0.33 (0.23) 0.10 (0.27) (0.27) (0.54) 10.43 0.77% $278,859
1995............ 10.43 0.43 0.86 1.29 (0.27) (0.10) (0.37) 11.35 12.57% $365,678
1996............ 11.35 0.44 1.37 1.81 (0.62) (0.32) (0.94) 12.22 16.38% $457,933
BRINSON GLOBAL EQUITY FUND (Commencement of Operations January 28, 1994)
1994............ $10.00 0.07 (0.54) (0.47) (0.04) -- (0.04) $ 9.49 (4.70%) $ 20,642
1995............ 9.49 0.18 0.39 0.57 (0.04) (0.09) (0.13) 9.93 6.06% $ 20,706
1996............ 9.93 0.18 2.29 2.47 (0.14) (0.69) (0.83) 11.57 25.66% $ 27,126
BRINSON GLOBAL BOND FUND (Commencement of Operations July 30, 1993)
1994............ $10.00 0.45 (0.52) (0.07) (0.28) (0.10) (0.38) $ 9.55 (0.79%) $ 36,849
1995............ 9.55 0.50 0.58 1.08 (0.24) -- (0.24) 10.39 11.34% $ 51,863
1996............ 10.39 0.84 0.31 1.15 (1.40) (0.10) (1.50) 10.04 11.50% $ 41,066
<CAPTION>

RATIOS/SUPPLEMENTAL DATA
------------------------

RATIO OF NET
RATIO OF EXPENSES INVESTMENT INCOME
TO AVERAGE NET TO AVERAGE NET
ASSETS ASSETS
--------------------- ---------------------

BEFORE AFTER BEFORE AFTER AVERAGE
EXPENSE EXPENSE EXPENSE EXPENSE PORTFOLIO COMMISSION
REIMBURSE- REIMBURSE- REIMBURSE- REIMBURSE- TURNOVER RATE PAID
YEAR MENT MENT MENT MENT RATE PER SHARE
- ---- ---------- ---------- ---------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
BRINSON GLOBAL FUND (Commencement of Operations August 31, 1992)
1993............ 1.35%/1/ 1.05%/1/ 3.26%/1/ 3.56%/1/ 149% N/A
1994............ 1.14% 1.10% 3.21% 3.25% 231% N/A
1995............ 1.09% N/A 4.27% N/A 238% N/A
1996............ 1.04% N/A 3.69% N/A 142% $0.0291
BRINSON GLOBAL EQUITY FUND (Commencement of Operations January 28, 1994)
1994............ 2.65%/1/ 1.00%/1/ 0.24%/1/ 1.89%/1/ 21% N/A
1995............ 2.06% 1.00% 0.71% 1.77% 36% N/A
1996............ 1.77% 1.00% 0.57% 1.34% 74% $0.0288
BRINSON GLOBAL BOND FUND (Commencement of Operations July 30, 1993)
1994............ 1.78%/1/ 0.90%/1/ 4.03%/1/ 4.91%/1/ 189% N/A
1995............ 1.43% 0.90% 5.53% 6.06% 199% N/A
1996............ 1.65% 0.90% 4.98% 5.73% 184% N/A
</TABLE>
- -----
/1/Annualized
N/A=Not Applicable

2
<PAGE>

DESCRIPTION OF THE GLOBAL FUNDS

The Global Fund, Global Equity Fund and Global Bond Fund each have an
investment objective to maximize total return, consisting of capital
appreciation and current income. In seeking to achieve its investment
objective, each Series attempts to control risk. These investment objectives
are fundamental and may not be changed without a vote of the holders of the
majority of the voting securities of the respective Series. Unless otherwise
stated in this Prospectus or the Statement of Additional Information, each
Series' investment policies are not fundamental and may be changed without
shareholder approval. There can be no assurance that the Series will achieve
their investment objectives.

The Series do not intend to concentrate their investments in a particular
industry. The Series do not intend to issue senior securities, as defined in
the Investment Company Act of 1940, as amended (the "Act"), except that each
Series may engage in borrowing activities as defined in Appendix A in this
Prospectus and in the Statement of Additional Information. Each Series'
investment objective and its policies concerning portfolio lending, borrowing,
the issuance of senior securities and concentration are "fundamental," which
means that they may not be changed without the affirmative vote of the holders
of a majority of the Series' outstanding voting securities (as defined in the
Act).

INVESTMENT OBJECTIVES AND POLICIES

GLOBAL FUND

INVESTMENT OBJECTIVE

The Global Fund's investment objective is to maximize total return,
consisting of capital appreciation and current income. The Fund will attempt
to control risk while seeking to achieve its investment objective. As a global
fund, at least 65% of the Series' total assets will be invested in securities
of issuers in at least three countries, one of which may be the United States.
The Series may utilize a wide range of equity, debt and money market
securities in domestic and foreign markets, and the Fund may invest in other
open-end investment companies advised by Brinson Partners, Inc. ("Brinson
Partners" or the "Advisor"). The Series may enter into repurchase agreements
and reverse repurchase agreements, and engage in futures, options and currency
transactions for hedging and other permissible purposes, as more fully
described in "Investment Considerations and Risks" and Appendix A in this
Prospectus, and in the Statement of Additional Information.

The Global Benchmark consists of eight distinct asset classes representing
the primary wealth-holding public securities markets. These asset classes are
U.S. equities, non-U.S. equities, emerging markets equities, U.S. bonds, non-
U.S. bonds, emerging markets bonds, high yield bonds and cash equivalents.
Each asset class is represented in the Global Benchmark by an index compiled
by an independent data provider. In order to compile the Global Benchmark, the
Advisor determines current relative market capitalizations in the world
markets (U.S. equities, non-U.S. equities, emerging markets equities, U.S.
bonds, non-U.S. bonds, emerging markets bonds, high yield bonds and cash) and
then weights each relevant index. Based on this weighting, the Advisor
determines the return of the relative indices, applies the index weighting and
then determines the return of the Global Benchmark. From time to time, the
Advisor may substitute an equivalent index within a given asset class when it
believes that such index more accurately reflects the relevant global market.

3
<PAGE>

Although it may invest anywhere in the world, it is expected that the
Series' assets will be primarily invested in equity markets listed in the
Morgan Stanley Capital International ("MSCI") World Equity (Free) Index. The
Series will primarily invest in fixed income markets listed in the Salomon
Brothers World Government Bond Index. The Series may invest up to 10% of its
net assets in equity and debt securities of emerging market issuers, or
securities with respect to which the return is derived from the equity or debt
securities of issuers in emerging markets.

GLOBAL EQUITY FUND

INVESTMENT OBJECTIVE

The Global Equity Fund's investment objective is to maximize total return,
consisting of capital appreciation and current income. The Fund will attempt
to control risk while seeking to achieve its investment objective. As a global
fund, at least 65% of the Series' total assets will be invested in equity
securities of issuers in at least three countries, one of which may be the
United States. The Series may utilize a wide range of equity securities that
are traded on both domestic and foreign stock exchanges or, in the case of
domestic stocks, in the over-the-counter market. The Series may enter into
repurchase agreements and reverse repurchase agreements, and engage in
futures, options and currency transactions for hedging and other permissible
purposes, as more fully described in "Investment Considerations and Risks" and
Appendix A in this Prospectus, and in the Statement of Additional Information.

The Series is a diversified portfolio that seeks to achieve its objective by
pursuing an active asset allocation strategy across global equity markets,
active management of currency exposures and active security selection within
each market. The benchmark for the Series is the MSCI World Equity (Free)
Index (the "Global Equity Benchmark"). The Global Equity Benchmark is a market
driven broad based index which includes U.S. and non-U.S. equity markets in
terms of capitalization and performance. The Global Equity Benchmark is
designed to provide a representative total return for all major stock
exchanges located inside and outside the United States. Although it may invest
anywhere in the world, it is expected that the Series' assets will primarily
be invested in equity markets listed in the Global Equity Benchmark. From time
to time, the Advisor may substitute securities in an equivalent index when it
believes that such securities in the index more accurately reflect the
relevant global market.

GLOBAL BOND FUND

INVESTMENT OBJECTIVE

The Global Bond Fund's investment objective is to maximize total return,
consisting of capital appreciation and current income. The Fund will attempt
to control risk while seeking to achieve its investment objective. As a global
fund, at least 65% of the Series' total assets will be invested in debt
securities with an initial maturity of more than one year of issuers in at
least three countries, one of which may be the United States. The Series seeks
to achieve this objective by investing primarily in debt securities that may
also provide the potential for capital appreciation. The Series may enter into
repurchase agreements and reverse repurchase agreements, and may engage in
futures, options and currency transactions for hedging and other permissible
purposes, as more fully described in "Investment Considerations and Risks" and
Appendix A in this Prospectus, and in the Statement of Additional Information.
The Series is a non-diversified portfolio.

4
<PAGE>

supranationals. Although it may invest anywhere in the world, it is expected
that the Series' assets will be primarily invested in fixed income markets
listed in the Global Bond Benchmark. From time to time, the Advisor may
substitute securities in an equivalent index when it believes that such
securities in the index more accurately reflect the relevant global fixed
income securities market.

INVESTMENT CONSIDERATIONS AND RISKS

The following provides information about the types of instruments in which
the Global Funds may invest, strategies employed by Brinson Partners in its
attempt to attain each Series' investment objective and a summary of related
risks. Shareholders should understand that all investments involve risks and
there can be no guarantee against loss resulting from an investment in the
Series, nor can there be any assurance that the Series will be able to attain
their investment objectives. A complete list of the Series' investment
restrictions and more detailed information about the Series' investments are
contained in Appendix A in this Prospectus and in the Statement of Additional
Information.

EQUITY SECURITIES (GLOBAL FUND AND GLOBAL EQUITY FUND)--Equity securities
fluctuate in value as a result of various factors, which are often unrelated
to the value of the issuer of the securities. These fluctuations may be
pronounced. The Global Fund may invest in small market capitalization
companies and in equity securities that are considered by the Advisor to be in
their post-venture capital stage. These securities may have limited
marketablilty, and therefore, may be more volatile. Fluctuations in the value
of the Global Fund's and Global Equity Fund's equity investments will affect
the value of their shares and thus the Funds' total returns to investors.

FIXED INCOME SECURITIES (GLOBAL FUND AND GLOBAL BOND FUND)--All fixed income
securities are subject to two types of risks: credit risk and interest rate
risk. The credit risk relates to the ability of the issuer to meet interest or
principal payments or both as they come due. The interest rate risk refers to
the fluctuations in the net asset value of any portfolio of fixed income
securities resulting from the inverse relationship between the price and yield
of fixed income securities; that is, when the general level of interest rates
rises, the prices of outstanding fixed income securities decline, and when
interest rates fall, prices rise.

FOREIGN SECURITIES AND CURRENCY CONSIDERATIONS (ALL GLOBAL FUNDS)--
Investments in securities of foreign issuers may involve greater risks than
those of U.S. issuers. There is generally less information available to the
public about non-U.S. companies and less government regulation and supervision
of non-U.S. stock exchanges, brokers and listed companies. Non-U.S. companies
are not subject to uniform global accounting, auditing and financial reporting
standards, practices and requirements. Securities of some non-U.S. companies
are less liquid and their prices more volatile than securities of comparable
U.S. companies. Securities trading practices abroad may offer less protection
to investors. Settlement of transactions in some non-U.S. markets may be
delayed or may be less frequent than in the United States, which could affect
the liquidity of the Series' portfolios. Additionally, in some non-U.S.
countries, there is the possibility of expropriation or confiscatory taxation,
limitations on the removal of securities, property or other assets of the
Series, political or social instability, or diplomatic developments which
could affect U.S. investments in those countries. The Series intend to
diversify broadly among countries but reserve the right to invest a
substantial portion of their assets in one or more countries if economic and
business conditions warrant such investments. Brinson Partners will take these
factors into consideration in managing the Series' investments. Because the
Series will keep their books and records in U.S. dollars, the Series will be
required, for federal income tax purposes, to account for income and losses on
all transactions involving foreign currency under Section 988 of the Internal
Revenue Code of 1986, as amended, and the applicable U.S. Treasury
regulations, so that generally any component of a gain or loss attributable to
currency fluctuations results in ordinary income or loss and not capital gain
or loss.

5
<PAGE>

The U.S. dollar market value of the Series' investments and of dividends and
interest earned by the Series may be significantly affected by changes in
currency exchange rates. Some currency prices may be volatile, and there is
the possibility of governmental controls on currency exchange or governmental
intervention in currency markets, which could adversely affect the Series.
Although the Series may attempt to manage currency exchange rate risks, there
is no assurance that the Series will do so at an appropriate time or that they
will be able to predict exchange rates accurately. For example, if the Series
increase their exposure to a currency and that currency's price subsequently
falls, such currency management may result in increased losses to the Series.
Similarly, if the Series decrease their exposure to a currency, and the
currency's price rises, the Series will lose the opportunity to participate in
the currency's appreciation. Each Series will manage currency exposures
relative to the normal currency allocation and will consider return and risk
of currency exposures relative to its respective Benchmark. In addition, if
the currency in which a security is denominated appreciates against the U.S.
dollar, the dollar value of the security will increase. Conversely, a decline
in the exchange rate of the currency would adversely affect the value of the
security expressed in dollars.

There are additional risks inherent in investing in less developed countries
which are applicable to the Global Fund. Compared to the United States and
other developed countries, emerging market countries may have relatively
unstable governments, economies based on only a few industries, and securities
markets that trade only a small number of securities and employ settlement
procedures different from those used in the United States. Prices on these
exchanges tend to be volatile and, in the past, securities in these countries
have offered greater potential for gain (as well as loss) than securities of
companies located in developed countries. Further, investments by foreign
investors are subject to a variety of restrictions in many emerging countries.

Emerging markets countries such as those in which the Global Fund may invest
have historically experienced and may continue to experience, high rates of
inflation, high interest rates, exchange rate fluctuations or currency
depreciation, large amounts of external debt, balance of payments and trade
difficulties and extreme poverty and unemployment. Additional factors which
may influence the ability or willingness to service debt include, but are not
limited to, a country's cash flow situation, the availability of sufficient
foreign exchange on the date a payment is due, the relative size of its debt
service burden to the economy as a whole, its government's policy towards the
International Monetary Fund, the World Bank and other international agencies
and the political constraints to which a government debtor may be subject.

FOREIGN CURRENCY TRANSACTIONS (ALL GLOBAL FUNDS)--To manage exposure to
currency fluctuations, the Series may alter fixed income or money market
exposures, enter into forward currency exchange contracts, buy or sell options
or futures relating to foreign currencies and may purchase securities indexed
to currency baskets. The Series will also use these currency exchange
techniques in the normal course of business to hedge against adverse changes
in exchange rates in connection with purchases and sales of securities. Some
of these strategies may require the Series to set aside liquid assets in a
segregated custodial account to cover their obligations.

FUTURES, OPTIONS AND OTHER DERIVATIVE INSTRUMENTS (ALL GLOBAL FUNDS)--The
Series may attempt to reduce the overall level of investment risk of
particular securities and attempt to protect against adverse market movements
by investing in futures, options and other derivative instruments. A
derivative instrument is commonly defined as a financial instrument whose
performance and value are derived, at least in part, from another source, such
as the performance of an underlying asset, a specific security or an index of
securities. The derivative instruments in which the Series may invest include
the purchase and writing of options on securities (including index options)
and options on foreign currencies, investing in futures contracts for the
purchase or sale of instruments based on financial indices, including interest
rate indices or indices of U.S. or foreign government securities, equity or
fixed income securities ("futures contracts"), forward contracts and swaps and
swap-related products such as equity index swaps, interest rate swaps,
currency swaps, and related caps, collars and floors.

6
<PAGE>

The investment in futures, options, forward contracts, swaps and similar
strategies by the Series will depend on Brinson Partners' judgment as to the
potential risks and rewards of different types of strategies, and it should be
recognized that the use of these instruments exposes the Series to additional
investment risks and transaction costs. If the Advisor incorrectly analyzes
the market conditions or does not employ the appropriate strategy with respect
to these instruments, the Series could be left in a less favorable position.
For example, gains and losses on investments in futures depend on the
Advisor's ability to predict correctly the direction of security prices,
interest rates and other economic factors. Additional risks inherent in the
use of futures, options and forward contracts include: adverse movements in
the prices of securities or currencies being hedged; the possible absence of a
liquid secondary market for any particular instrument at any time; and the
possible need to defer closing out certain hedge positions to avoid adverse
tax consequences. Options and futures can be volatile instruments and may not
perform as expected. A Series could experience losses if the prices of its
options and futures positions are poorly correlated with its other
investments. If a hedge is applied at an inappropriate time or price trends
are judged incorrectly, options and futures strategies may lower a Series'
return (i.e., options and futures may fail as hedging techniques in cases
where the price movements of the securities underlying the options and futures
do not follow the price movements of the portfolio securities subject to the
hedge). Options and futures traded on foreign exchanges generally are not
regulated by U.S. authorities and may offer less liquidity and less protection
to a Series in the event of default by the other party to the contract. The
loss from investing in futures transactions is potentially unlimited. A Series
does not intend to purchase put and call options that are traded on a national
stock exchange in an amount exceeding 5% of its net assets.

Each Series may invest in derivatives for hedging purposes, to maintain
liquidity, or in anticipation of changes in the composition of its portfolio
holdings. No Series will engage in derivative investments purely for
speculative purposes. A Series will invest in one or more derivatives only to
the extent that the instrument under consideration is judged by the Advisor to
be consistent with the Series' overall investment objective and policies. In
making such judgment, the potential benefits and risks will be considered in
relation to the Series' other portfolio investments.

Where not specified, investment limitations with respect to a Series'
derivative instruments will be consistent with that Series' existing
percentage limitations with respect to its overall investment policies and
restrictions. The risks and policies of various types of derivative
instruments permitted for the Series, including options, futures, forward
contracts and applicable interest rate swaps, are described in greater detail
in Appendix A in this Prospectus and in the Statement of Additional
Information.

NON-DIVERSIFIED STATUS (GLOBAL BOND FUND ONLY)--The Global Bond Fund is
classified as a "non-diversified" investment company under the Act, which
means that the proportion of the Series' assets that may be invested in the
securities of a single issuer is not limited by the Act. Since it may invest a
larger portion of its assets in the securities of a single issuer than
investment companies that are classified as diversified funds under the Act,
an investment in the Global Bond Fund may be subject to greater fluctuations
in value than an investment in a diversified fund.

MANAGEMENT OF THE TRUST

THE BOARD OF TRUSTEES

Under Delaware law, the Board of Trustees has overall responsibility for
managing the business and affairs of the Trust. The Trustees, in turn, elect
the officers of the Trust, who are responsible for administering the day-to-
day operations of the Series.

7
<PAGE>

THE ADVISOR

Brinson Partners, a Delaware corporation, is an investment management firm
managing, as of June 30, 1996, approximately $58 billion, primarily for
pension and profit sharing institutional accounts. Brinson Partners was
organized in 1989 when it acquired the institutional asset management business
of The First National Bank of Chicago and First Chicago Investment Advisors,
N.A. Brinson Partners and its predecessor entities have managed domestic and
international investment assets since 1974 and global investment assets since
1982. Brinson Partners has offices in Basel, London, Melbourne, New York,
Paris, Singapore, Sydney and Tokyo, in addition to its principal office at 209
South LaSalle Street, Chicago, IL 60604-1295. Brinson Partners is an indirect
wholly-owned subsidiary of Swiss Bank Corporation ("Swiss Bank"). Swiss Bank,
with headquarters in Basel, Switzerland, is an internationally diversified
organization with operations in many aspects of the financial services
industry. Brinson Partners also serves as the investment advisor to seven
other investment companies: Brinson Relationship Funds, which includes six
investment portfolios (Series); Enterprise Accumulation Trust; Enterprise
International Growth Portfolio; Fort Dearborn Income Securities, Inc.; Hirtle
Callaghan International Trust; John Hancock Variable Series Trust--
International Balanced Portfolio; and Pace Large Company Value Equity
Investments.

Pursuant to its investment advisory agreements with the Trust on behalf of
each Series, Brinson Partners receives a monthly fee at various annual
percentage rates of each Series' average daily net assets, as described below,
for providing investment advisory services. Brinson Partners is responsible
for paying its own expenses and has agreed to waive that portion of its
advisory fee equal to the total expenses of a Series for any fiscal year which
exceeds the permissible limits applicable to the Series in any state in which
its shares are then qualified for sale. Pursuant to its advisory agreements,
Brinson Partners is authorized, at its own expense, to obtain statistical and
other factual information and advice regarding economic factors and trends
from its foreign subsidiaries, but it does not generally receive advice or
recommendations regarding the purchase or sale of securities from such
subsidiaries.

For providing investment advisory services during the fiscal year ended June
30, 1996, the Global Fund and Global Equity Fund paid Brinson Partners a
monthly fee at the annual rate of 0.80% of each Series' respective average
daily net assets. This fee is higher than the advisory fees paid by most other
mutual funds, but is comparable to those of other mutual funds with similar
investment objectives. For the fiscal year ended June 30, 1996, the Global
Bond Fund paid a monthly fee at the annual rate of 0.75% of its average daily
net assets.

PORTFOLIO MANAGEMENT

Investment decisions for the Series are made by an investment management
team at Brinson Partners. No member of the investment management team is
primarily responsible for making recommendations for portfolio purchases.

ADMINISTRATION OF THE TRUST

THE UNDERWRITER

FPS Broker Services, Inc., 3200 Horizon Drive, King of Prussia, PA 19406-
0903, was engaged pursuant to an agreement dated November 20, 1995, for the
limited purpose of acting as underwriter to facilitate the registration of the
shares of the Trust under state securities laws and to assist in the sale of
shares. The fee for such service is borne by the Advisor.

8
<PAGE>

THE ADMINISTRATOR

The Trust, on behalf of each Series, has entered into an administrative
services agreement with FPS Services, Inc. ("FPS"), 3200 Horizon Drive, King
of Prussia, PA 19406-0903, pursuant to which the administrator receives a fee
at the annual rate of 0.15% of the average daily net assets of the Trust on
the first $75 million; 0.10% on the next $75 million; 0.075% on the next $350
million; and 0.05% on the next $500 million. Each Series pays its pro rata
portion based upon its average daily net assets, but in no event shall a
Series pay less than $75,000 for the initial multiple class portfolio and
$10,000 per year for each additional multiple class portfolio. Pursuant to the
agreement with FPS, maximum administration fees are $400,000 for the initial
multiple class portfolio and $60,000 per year for each subsequent multiple
class portfolio.

The services FPS provides to the Series include: coordinating and monitoring
of any third parties furnishing services to the Series; providing the
necessary office space, equipment and personnel to perform administrative and
clerical functions for the Series; preparing, filing and distributing proxy
materials, periodic reports to shareholders, registration statements and other
documents; and responding to shareholder inquiries.

THE CUSTODIAN, TRANSFER AGENT AND ACCOUNTING/PRICING AGENT

Bankers Trust Company, c/o BTNY Services, Inc., 34 Exchange Place, Jersey
City, NJ 07302-1107 is custodian for the securities and cash of each Series.

FPS serves as each Series' transfer agent. As transfer agent, it maintains
the records of each shareholder's account, answers shareholder inquiries
concerning accounts, processes purchases and redemptions of the Funds' shares,
acts as dividend and distribution disbursing agent and performs other
shareholder service functions. Shareholder inquiries should be made to the
transfer agent at (800) 448-2430.

FPS also performs certain accounting and pricing services for the Trust,
including the daily calculation of the Funds' respective net asset values.

PURCHASE OF SHARES

Shares of the Global Funds may be purchased directly from the Trust at the
net asset value next determined after receipt of the order in proper form by
the transfer agent. There is no sales load in connection with the purchase of
Fund shares. The Trust reserves the right to reject any purchase order and to
suspend the offering of shares of the Funds or the Series. The minimum initial
investment for Fund shares is $100,000. Subsequent investments for Fund shares
will be accepted in minimum amounts of $2,500. The Trust reserves the right to
vary the initial investment minimum and minimums for additional investments in
the Funds at any time. In addition, Brinson Partners may waive the minimum
initial investment requirement for any investor.

Purchase orders for shares of the Global Funds which are received by the
transfer agent in proper form prior to the close of regular trading hours
(currently 4:00 p.m. Eastern time) on the New York Stock Exchange (the "NYSE")
on any day that the Funds' net asset values per share are calculated, are
priced according to the net asset value determined on that day. Purchase
orders for shares of the Funds received after the close of the NYSE on a
particular day are priced as of the time the net asset value per share is next
determined.

The Trust may accept telephone orders for Fund shares from broker-dealers or
service organizations which have been previously approved by the Trust. It is
the responsibility of such broker-dealers or service organizations to promptly
forward purchase orders and payments for the same to the Fund. Shares of the
Fund may be purchased through broker-dealers, banks and bank trust departments
which may charge the investor a transaction fee or other fee for their
services at the time of purchase. Such fees would not otherwise be charged if
the shares were purchased directly from the Trust.

9
<PAGE>

PURCHASES MAY BE MADE IN ONE OF THE FOLLOWING WAYS:

<TABLE>
<CAPTION>
INITIAL INVESTMENT SUBSEQUENT INVESTMENTS
------------------------------- -------------------------------
<S> <C> <C>
MINIMUM $100,000 MINIMUM $2,500
BY MAIL . Complete and sign the Account . Make your check payable
[LOGO} Application accompanying this to "Brinson ________ Fund."
Prospectus.
. Make your check payable to . Enclose the remittance por-
"Brinson ________ Fund." tion of your account statement
and include the amount of in-
vestment, the account name and
number.
. Mail to the address indicated . Mail to the address indicated
on the Account Application. on your account statement or
enclose in the envelope pro-
vided.
BY WIRE . Call (800) 448-2430 to ar-
[LOGO] range for
a wire transaction.
. Wire federal funds within 24 . Wire federal funds to:
hours UNITED MISSOURI BANK KC NA
to: UNITED MISSOURI BANK KC NA ABA # 10-10-00695
ABA # 10-10-00695 FOR: FPS SERVICES, INC.
FOR: FPS SERVICES, INC. A/C 98-7037-071-9
A/C 98-7037-071-9 "BRINSON ________ FUND" AND
"BRINSON ________ FUND" AND INCLUDE YOUR NAME AND ACCOUNT
INCLUDE YOUR NAME AND YOUR NEW NUMBER.
ACCOUNT NUMBER.
. Complete and sign the Account
Application and mail to the
address indicated immediately
following the initial wire
transaction.
BY TELEPHONE . Call (800) 448-2430 to ar- . Call (800) 448-2430 to ar-
[LOGO] range for a telephone transac- range for a telephone transac-
tion. tion.

PURCHASING BY EXCHANGES . You may open a new account by . You may purchase additional
[LOGO] making an exchange from an shares by making an exchange
existing Brinson Fund class from an existing Brinson Fund
account of any other Series of class account of any other Se-
the Trust. Exchanges may be ries of the Trust. Exchanges
made by mail or telephone. may be made by mail or tele-
Call (800) 448-2430 for assis- phone. Call (800) 448-2430 for
tance. assistance.
AUTOMATICALLY . Please refer to "Automatic . Please refer to "Automatic
Investment Plan" under Investment Plan" under
"Account Options" or call "Account Options" or call
(800) 448-2430 for assistance. (800) 448-2430 for assistance.
</TABLE>

ACCOUNT OPTIONS

The following account options are available to shareholders. There are no
charges for the programs noted below and an investor may change or terminate
these plans at any time by written notice to the Trust. For information about
participating in these account options, call the transfer agent at (800) 448-
2430.

10
<PAGE>

<TABLE>
<CAPTION>
ACCOUNT OPTIONS INSTRUCTIONS
- --------------------- --------------------------------------------------------
<S> <C> <C>
AUTOMATIC INVESTMENT . You may have money deducted directly from your
PLAN checking, savings or bank money market accounts for
investment in the Funds each month or quarter.
. Complete the Automatic Investment Plan Application,
which is available upon request by calling (800)
448-2430, and mail it to the address indicated.
. The initial account must be opened first with the
initial $100,000 minimum investment, with
subsequent minimum investments of $500 pursuant to
the Automatic Investment Plan.
. The account designated will be debited in the
specified amount, on the date indicated, and Fund
shares will be purchased. The Trust may alter or
terminate the Automatic Investment Plan at any
time.
SYSTEMATIC WITHDRAWAL . A shareholder with a minimum account of $100,000
PLAN may direct the transfer agent to send the
shareholder (or anyone the shareholder designates)
regular, monthly, quarterly or semi-annual
payments. Each payment under a Systematic
Withdrawal Plan ("SWP") must be at least $500. Such
payments are drawn from share redemptions.
. Shareholders participating in the SWP must elect to
have their dividends and distributions
automatically reinvested in additional Fund shares.
. The Trust may terminate any SWP for an account if
the value of the account falls below $50,000 as a
result of share redemptions or an exchange of
shares of a Fund for Brinson Fund class shares of
another Series of the Trust.
INDIVIDUAL RETIREMENT . An IRA is a tax-deferred retirement savings account
ACCOUNTS that may be used by an individual under age 70 1/2
who has compensation or self-employment income and
his or her unemployed spouse, or an individual who
has received a qualified distribution from his or
her employer's retirement plan.
. The minimum purchase requirement for IRAs is
$2,000.
</TABLE>

REDEMPTION OF SHARES

Shareholders may redeem shares of the Funds without charge on any business
day that the NYSE is open. Redemptions will be effected at the net asset value
per share next determined after the receipt by the transfer agent of a
redemption request meeting the requirements described below. The Trust
normally sends redemption proceeds on the next business day but, in any event,
redemption proceeds are sent within five business days of receipt of a
redemption request in proper form. Payment also may be made by wire directly
to any bank previously designated by the shareholder in an Account
Application. There is no charge for redemptions by wire. Please note that the
shareholder's bank may impose a fee for wire service. The Trust will honor
redemption

11
<PAGE>

requests of shareholders who recently purchased shares by check, but will not
mail the proceeds until it is reasonably satisfied that the purchase check has
cleared, which may take up to fifteen days from the purchase date. The Trust
will not accept a check endorsed over by a third-party.

Except as noted below, redemption requests received in proper form by the
transfer agent prior to the close of regular trading hours on the NYSE on any
business day that the Funds' net asset values per share are calculated are
effected that day. Redemption requests received in proper form by the transfer
agent after the close of the NYSE are effected as of the time the net asset
value per share is next determined. No redemption will be processed until the
transfer agent has received a completed application with respect to the
account.

The Trust will satisfy redemption requests in cash to the fullest extent
feasible, so long as such payments would not, in the opinion of Brinson
Partners or the Board of Trustees, result in the necessity of a Series selling
assets under disadvantageous conditions and to the detriment of the remaining
shareholders of the Series. Pursuant to the Trust's Agreement and Declaration
of Trust, payment for shares redeemed may be made either in cash or in-kind,
or partly in cash and partly in-kind. However, the Trust has elected, pursuant
to Rule 18f-1 under the Act, to redeem its shares solely in cash up to the
lesser of $250,000 or 1% of the net asset value of a Series, during any 90 day
period for any one shareholder. Payments in excess of this limit will also be
made wholly in cash unless the Board of Trustees believes that economic
conditions exist which would make such a practice detrimental to the best
interests of the Series. Any portfolio securities paid or distributed in-kind
would be valued as described under "Net Asset Value." In the event that an in-
kind distribution is made, a shareholder may incur additional expenses, such
as the payment of brokerage commissions, on the sale or other disposition of
the securities received from a Series. In-kind payments need not constitute a
cross-section of a Series' portfolio. Where a shareholder has requested
redemption of all or a part of the shareholder's investment and where a Series
computes such redemption in-kind, the Series will not recognize gain or loss
for federal tax purposes on the securities used to compute the redemption, but
the shareholder will recognize gain or loss equal to the difference between
the fair market value of the securities received and the shareholder's basis
in the Fund shares redeemed.

SHARES MAY BE REDEEMED IN ONE OF THE FOLLOWING WAYS:

<TABLE>
<S> <C> <C>
BY MAIL . Submit a written request for redemption with:
[LOGO] . The Fund's name;
. Your Fund account number;
. The dollar amount or number of shares to be redeemed; and
. Signatures of all persons required to sign for transactions,
exactly as their names appear on the Account Application.
. A signature guarantee for the signature of each person in whose
name the account is registered is required on all written
redemption requests over $5,000.
. Mail to the address indicated on the Account Application.
Questions may be directed to the transfer agent at (800) 448-
2430.
BY WIRE . This service must be elected either on the initial application or
[LOGO] subsequently in writing.
. Shares may be redeemed by instructing the transfer agent by
telephone at (800) 448-2430.
. Wire redemption requests must be received by the transfer agent
before 4:00 p.m. Eastern time for money to be wired the next
business day.
</TABLE>

12
<PAGE>

<TABLE>
<S> <C> <C>
BY TELEPHONE (800) 448-2430 . This service must be elected in advance
[LOGO] either on the initial application or
subsequently arranged in writing.
. Shares may be redeemed by instructing the
transfer agent by telephone at (800) 448-2430.
. Shares will be sold at the next share price
calculated after the order is received and
accepted. Share price is normally calculated at
4:00 p.m. Eastern time.
AUTOMATICALLY . Please refer to "Systematic Withdrawal Plan"
under "Account Options" or call (800) 448-2430
for assistance.
</TABLE>
- ----------
NOTE: The Trust reserves the right to refuse a wire or telephone redemption if
it is believed advisable to do so. Procedures for redeeming shares of the
Global Funds by wire or telephone may be modified or terminated by the
Trust at any time.

Shares of the Funds may be redeemed through certain broker-dealers, banks
and bank trust departments which may charge the investor a transaction fee or
other fee for their services at the time of redemption. Such fees would not
otherwise be charged if the shares were redeemed directly from the Trust.

TELEPHONE TRANSACTIONS:

Shareholders who wish to initiate purchase, exchange or redemption
transactions by telephone must elect the option, as described above. With
respect to such telephone transactions, the Funds will ensure that reasonable
procedures are used to confirm that instructions communicated by telephone are
genuine (including verification of the shareholder's social security number or
mother's maiden name) and, if they do not, the Funds or the transfer agent may
be liable for any losses due to unauthorized or fraudulent transactions.
Written confirmation will be provided for all purchase, exchange and
redemption transactions initiated by telephone.

EXCHANGE OF SHARES:

Fund shares may be exchanged for Brinson Fund class shares of any other
Series within the Trust. Exchanges will not be permitted between the Brinson
Fund class shares and the SwissKey Fund class shares of any Series of the
Trust. Fund shares may be exchanged by written request or by telephone if the
shareholder has previously signed a telephone authorization on the Account
Application. The telephone exchange may be difficult to implement during times
of drastic economic or market changes. The Trust reserves the right to
restrict the frequency of, or otherwise modify, condition, terminate or impose
charges upon the exchange and/or telephone transfer privileges upon 60 days'
prior written notice to shareholders.

Exchanges will be made on the basis of both Series' relative net asset
values per share. Exchanges may be made only for shares of a Series and class
then offering its shares for sale in your state of residence and are subject
to the minimum initial investment requirement. For federal income tax
purposes, an exchange of shares would be treated as if the shareholder had
redeemed shares of one Series and reinvested in shares of another Series.
Gains or losses on the shares exchanged are realized by the shareholder at the
time of the exchange. Any shareholder wishing to make an exchange should first
obtain and review a prospectus of the other Series. Requests for telephone
exchanges must be received by the transfer agent by the close of regular
trading hours (currently 4:00 p.m. Eastern time) on the NYSE on any day that
the NYSE is open for regular trading.

13
<PAGE>

TRANSFER OF SECURITIES:

At the discretion of the Trust, investors may be permitted to purchase Fund
shares by transferring securities to a Series that meet the Series' investment
objective and policies. Securities transferred to a Series will be valued in
accordance with the same procedures used to determine the Fund's net asset
value at the time of the next determination of net asset value after such
acceptance. Shares issued by a Series in exchange for securities will be
issued at the net asset value per share of the Fund determined as of the same
time. All dividends, interest, subscription, or other rights pertaining to
such securities shall become the property of the Series and must be delivered
to the Series by the investor upon receipt from the issuer. Investors who are
permitted to transfer such securities will be required to recognize a gain or
loss on such transfer and pay tax thereon, if applicable, measured by the
difference between the fair market value of the securities and the investors'
basis therein. Securities will not be accepted in exchange for shares of a
Fund unless: (1) such securities are, at the time of the exchange, eligible to
be included in the Series' portfolio and current market quotations are readily
available for such securities; (2) the investor represents and warrants that
all securities offered to be exchanged are not subject to any restrictions
upon their sale by the Series under the Securities Act of 1933 or under the
laws of the country in which the principal market for such securities exists,
or otherwise; and (3) the value of any such security (except U.S. government
securities) being exchanged, together with other securities of the same issuer
owned by the Series, will not exceed 5% of the Series' net assets immediately
after the transaction.

NET ASSET VALUE

The net asset value per share for the Brinson Fund class shares and SwissKey
Fund class shares is computed by adding, with respect to each class of shares,
the value of the Series' investments, cash and other assets attributable to
that class, deducting liabilities of the class and dividing the result by the
number of shares of that class outstanding. The public offering price of the
Brinson Fund class shares and the SwissKey Fund class shares, both of which
are sold on a continuous basis, is the net asset value of that class. The
valuation of assets for determining the net asset value may be summarized as
follows:

Securities traded on securities exchanges are valued at the last
available sale price. Securities that are not traded on a particular day or
on an exchange are valued at either (a) the bid price or (b) a valuation
within a range considered best to represent value in the circumstances.
Price information on listed securities is generally taken from the closing
price on the exchange where the security is primarily traded. Valuations of
equity securities may be obtained from a pricing service and/or broker-
dealers when such prices are believed to reflect fair value of such
securities. Use of a pricing service and/or broker-dealers has been
approved by the Board of Trustees. Futures contracts are valued at their
daily quoted settlement price on the exchange on which they are traded.
Forward foreign currency contracts are valued daily using the mean between
the bid and asked forward points added to the current exchange and an
unrealized gain or loss is recorded. A Series realizes a gain or loss upon
settlement of the contracts. For valuation purposes, foreign securities
initially expressed in foreign currency values will be converted into U.S.
dollar values using WM/Reuters closing spot rates as of 4:00 p.m. London
time.

Securities with a remaining maturity of 60 days or less are valued at
amortized cost, which approximates market value. Debt securities are valued
on the basis of prices provided by a pricing service, or at the bid price
where readily available, as long as the bid price, in the opinion of the
Advisor, continues to reflect the value of the security. Redeemable
securities issued by open-end investment companies are valued using their
respective net asset values for purchase orders placed at the close of the
NYSE. Securities (including over-the-counter options) for which market
quotations are not readily available and other assets are valued at their
fair value as determined in good faith by or under the direction of the
Trustees.

14
<PAGE>

Net asset value is determined on each day that the NYSE is open, as of the
close of business of the regular session of the NYSE (currently 4:00 p.m.
Eastern time). Investments and requests to exchange or redeem shares received
by a Series in proper form before such close of business are effective, and
will receive the price determined, on that day. Investment, exchange and
redemption requests received after such close of business are effective, and
will receive the share price determined, on the next business day.

Because of time zone differences, foreign exchanges and securities markets
will usually be closed prior to the time of the closing of the NYSE and values
of foreign futures and options and foreign securities will be determined as of
the earlier closing of such exchanges and securities markets. However, events
affecting the values of such foreign securities may occasionally occur between
the earlier closings of such exchanges and securities markets and the closing
of the NYSE which will not be reflected in the computation of the net asset
value of a Series. If an event materially affecting the value of such foreign
securities occurs during such period, then such securities will be valued at
fair value as determined in good faith by or under the direction of the Board
of Trustees. Where a foreign securities market remains open at the time that a
Series values its portfolio securities, or closing prices of securities from
that market may not be retrieved because of local time differences or other
difficulties in obtaining such prices at that time, last sale prices in such
market at a point in time most practicable to timely valuation of the Series
may be used.

The Series' portfolio securities from time to time may be listed primarily
on foreign exchanges which trade on days when the NYSE is closed (such as
Saturday). As a result, the net asset value of a Fund may be significantly
affected by such trading on days when shareholders have no access to the Fund.

Each of the Series' two classes of shares will bear pro rata all of the
common expenses of that Series. The net asset value of all outstanding shares
of each class of the Series will be computed on a pro rata basis for each
outstanding share based on the proportionate participation in the Series
represented by the value of shares of that class. All income earned and
expenses incurred by the Series will be borne on a pro rata basis by each
outstanding share of a class, based on each class' proportionate participation
in the Series represented by the value of the shares of such class, except
that the Brinson Fund class will not incur any of the expenses under the
SwissKey Fund class' 12b-1 Plan.

The different expenses borne by each class of shares will result in
different net asset values and dividends. The per share net asset value of the
SwissKey Fund class shares will generally be lower than that of the Brinson
Fund class shares of a Series because of the higher expenses borne by the
SwissKey Fund class shares. It is expected, however, that the net asset value
per share of the two classes will tend to converge immediately after the
payment of dividends, which will differ by approximately the amount of the
service and distribution expense differential between the classes.

DIVIDENDS, DISTRIBUTIONS AND TAXES

DIVIDENDS

The Series will distribute their net investment income semi-annually in June
and December. The Series will distribute annually in December substantially
all of their net long-term capital gains and any undistributed net short-term
capital gains realized during the one year period commencing November 1 (or
date of the creation of the Series, if later) and ending October 31, and, at
the same time, will distribute all of their net investment income earned
through the end of December and not previously distributed as ordinary (not
capital) income.

15
<PAGE>

Dividends and other distributions paid by a Series with respect to its
Brinson Fund class and SwissKey Fund class shares are calculated in the same
manner and at the same time. The per share dividends on SwissKey Fund class
shares will be lower than the per share dividends on the Brinson Fund class
shares of each Series as a result of the distribution and service fees
applicable with respect to the SwissKey Fund class shares. Both the SwissKey
Fund class and Brinson Fund class shares of a Series will share
proportionately in the investment income and expenses of that Series, except
that the per share dividends on the SwissKey Fund class shares will be lower
than the per share dividends on the Brinson Fund class shares, which will not
incur any expenses under a Rule 12b-1 Plan.

Income dividends and capital gain distributions are reinvested automatically
in additional Fund shares of a Series at net asset value, unless the
shareholder has notified the transfer agent, in writing, of the shareholder's
election to receive them in cash. Distribution options may be changed at any
time by requesting a change in writing. Any check in payment of dividends or
other distributions which cannot be delivered by the Post Office or which
remains uncashed for a period of more than one year may be reinvested in the
shareholder's account at the then current net asset value and the dividend
option may be changed from cash to reinvest. Dividends are reinvested on the
ex dividend date (the "ex date") at the net asset value determined at the
close of business on that date. Please note that shares purchased shortly
before the record date for a dividend or distribution may have the effect of
returning capital although such dividends and distributions are subject to
taxes.

TAXES

Each Series has qualified, and intends to continue to qualify, for taxation
as a "regulated investment company" under the Internal Revenue Code of 1986,
as amended ("the Code"). Such qualification relieves a Series of liability for
federal income taxes to the extent the Series' earnings are distributed in
accordance with the Code. Each Series is treated as a separate corporate
entity for federal tax purposes. Distributions of any net investment income
and of any net realized short-term capital gains are taxable to shareholders
as ordinary income. All distributions may be subject to state and local taxes.
Distributions of net capital gain (the excess of net long-term capital gain
over net short-term capital loss) are taxable to shareholders as long-term
capital gain regardless of how long a shareholder may have held shares of a
Series. The tax treatment of distributions of ordinary income or capital gains
will be the same whether the shareholder reinvests the distributions or elects
to receive them in cash. A distribution will be treated as paid on December 31
of the current calendar year if it is declared in October, November or
December with a record date in such a month and paid during January of the
following calendar year. Such distributions will be taxable to shareholders in
the calendar year in which the distributions are declared, rather than the
calendar year in which the distributions are received.

Shareholders will be advised annually of the source and tax status of all
distributions for federal income tax purposes. Further information regarding
the tax consequences of investing in the Series is included in the Statement
of Additional Information. The above discussion is intended for general
information only. Investors should consult their own tax advisors for more
specific information on the tax consequences of particular types of
distributions.

Redemptions of Series shares, and the exchange of shares between two Series
of the Trust, are taxable events and, accordingly, shareholders may realize
capital gains or losses on these transactions.

Shareholders may be subject to back-up withholding on reportable dividend
and redemption payments ("back-up withholding") if a certified taxpayer
identification number is not on file with the Series, or if, to the Series'
knowledge, an incorrect number has been furnished, or if the Series has been
notified by the Internal Revenue Service that an account is subject to back-up
withholding. An individual's taxpayer identification number is the
individual's social security number.

16
<PAGE>

If more than 50% of a Series' total assets at the close of its taxable year
consists of stock or securities in foreign corporations, the Series may elect
to "pass-through" to shareholders for foreign tax credit purposes the amount
of foreign income taxes paid by the Series with respect to its direct holdings
of securities in foreign corporations. A Series will make such an election
only if it deems such election to be in the best interests of its
shareholders. If this election is made, shareholders of the Series will be
required to include in their gross incomes their pro rata share of foreign
taxes paid by the Series. However, shareholders will be able to treat their
pro rata share of foreign taxes as either a deduction (itemized deduction in
the case of individuals) or a foreign tax credit (but not both) against U.S.
income taxes on their tax returns.

GENERAL INFORMATION

ORGANIZATION

The Brinson Funds is a Delaware business trust organized pursuant to an
Agreement and Declaration of Trust, dated December 1, 1993. The Trust was
originally organized as a Maryland corporation on April 14, 1992. On December
1, 1993, the Trust reorganized as a Delaware business trust through a merger
of the Maryland corporation into the Trust. The Trust is registered under the
Act as an open-end management investment company, commonly known as a mutual
fund, and consists of seven different investment portfolios or Series. The
Trustees of the Trust may establish additional Series or classes of shares
without the approval of shareholders. All of the Series, except the Global
Bond Fund, are diversified portfolios. The assets of each Series belong only
to that Series, and the liabilities of each Series are borne solely by that
Series and no other.

DESCRIPTION OF SHARES

Each Series is authorized to issue an unlimited number of shares of
beneficial interest with a $0.001 par value per share. The Board of Trustees
has the power to designate one or more Series or sub-Series/classes of shares
of beneficial interest and to classify or reclassify only unissued shares with
respect to such Series. Shares of each Series represent equal proportionate
interests in the assets of that Series only and have identical voting,
dividend, redemption, liquidation, and other rights, except that only shares
of each Series' SwissKey Fund class shall have voting rights with respect to
the Rule 12b-1 Plan relating to that class as described below. All shares
issued are fully paid and non-assessable, and shareholders have no preemptive
or other right to subscribe to any additional shares and no conversion rights.
Currently, the Trust offers seven Series--Global Fund, Global Equity Fund,
Global Bond Fund, U.S. Balanced Fund, U.S. Equity Fund, U.S. Bond Fund and
Non-U.S. Equity Fund. Two classes of shares are currently issued by the Trust
for each Series, the SwissKey Fund class and the Brinson Fund class.

VOTING RIGHTS

Each issued and outstanding full and fractional share of a Series is
entitled to one full and fractional vote in the Series and all shares of each
Series participate equally with regard to dividends, distributions, and
liquidations with respect to that Series. Shareholders do not have cumulative
voting rights. On any matter submitted to a vote of shareholders, shares of
each Series will vote separately except when a vote of shareholders in the
aggregate is required by law, or when the Trustees have determined that the
matter affects the interests of more than one Series, in which case the
shareholders of all such Series shall be entitled to vote thereon. Only the
SwissKey Fund class shareholders may vote on matters related to the Rule 12b-1
Plan associated with that class.

17
<PAGE>

SHAREHOLDER MEETINGS

The Trustees of the Trust do not intend to hold annual meetings of
shareholders of the Series. The U.S. Securities and Exchange Commission,
however, requires the Trustees to promptly call a meeting for the purpose of
voting upon the question of removal of any Trustee when requested to do so by
not less than 10% of the outstanding shareholders of the respective Series. In
addition, subject to certain conditions, shareholders of each Series may apply
to the other Series of the Trust to communicate with other shareholders to
request a shareholders' meeting to vote upon the removal of a Trustee or
Trustees.

PORTFOLIO TURNOVER (GLOBAL FUND AND GLOBAL BOND FUND)

As a result of the Global Fund's and Global Bond Fund's investment policies,
their portfolio turnover rates may exceed 100%. High portfolio turnover (over
100%) may involve correspondingly greater brokerage commissions and other
transaction costs, which will be borne directly by the effected Series and
ultimately, by the Series' shareholders. In addition, high portfolio turnover
may result in increased short-term capital gains, which, when distributed to
shareholders, are treated as ordinary income.

PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS

The Trust will attempt to obtain the best overall price and most favorable
execution of transactions in portfolio securities. However, subject to
policies established by the Board of Trustees of the Trust, a Series may pay a
broker-dealer a commission for effecting a portfolio transaction for the
Series in excess of the amount of commission another broker-dealer would have
charged if Brinson Partners determines in good faith that the commission paid
was reasonable in relation to the brokerage or research services provided by
such broker-dealer, viewed in terms of that particular transaction or such
firm's overall responsibilities with respect to the clients, including the
Series, as to which it exercises investment discretion. In selecting and
monitoring broker-dealers and negotiating commissions, consideration will be
given to a broker-dealer's reliability, the quality of its execution services
on a continuing basis and its financial condition.

SHAREHOLDER REPORTS AND INQUIRIES

Shareholders will receive semi-annual reports showing portfolio investments
and other information as of December 31 and annual reports audited by
independent auditors as of June 30. Shareholders with inquiries should call
the Global Funds at (800) 448-2430 or write to The Brinson Funds, 3200 Horizon
Drive, P.O. Box 61503, King of Prussia, PA 19406-0903.

PERFORMANCE INFORMATION

From time to time, performance information, such as yield or total return,
may be quoted in advertisements or in communications to present or prospective
shareholders. Performance quotations represent the Funds' past performance and
should not be considered as representative of future results. The current
yield will be calculated by dividing the net investment income earned per
share by a Fund during the period stated in the advertisement (based on the
average daily number of shares entitled to receive dividends outstanding
during the period) by the maximum net asset value per share on the last day of
the period and annualizing the result on a semi-annual compounded basis. The
Funds' total return may be calculated on an annualized and aggregate basis for
various periods (which periods will be stated in the advertisement). Average
annual return reflects the average percentage change per year in value of an
investment in a Fund. Aggregate total return reflects the total percentage
change over the stated period.

18
<PAGE>

To help investors better evaluate how an investment in the Global Funds
might satisfy their investment objectives, advertisements regarding the Funds
may discuss yield or total return as reported by various financial
publications. Advertisements may also compare yield or total return to other
investments, indices and averages. The following publications, benchmarks,
indices and averages may be used: Lipper Mutual Fund Performance Analysis;
Lipper Fixed Income Analysis; Lipper Mutual Fund Indices; Morgan Stanley
Indices; Shearson Lehman Hutton Treasury Index; Salomon Brothers Indices; Dow
Jones Composite Average or its component indices; Standard & Poor's 500 Stock
Index or its component indices; Wilshire Indices; The New York Stock Exchange
composite or component indices; CDA Mutual Fund Report; Weisenberger--Mutual
Funds Panorama and Investment Companies; Mutual Fund Values and Mutual Fund
Service Book, published by Morningstar, Inc.; comparable global portfolios
managed by the Advisor; and financial publications such as Business Week,
Kiplinger's Personal Finance, Financial World, Forbes, Fortune, Money
Magazine, The Wall Street Journal, Barron's, et al., which rate fund
performance over various time periods.

The principal value of an investment in the Funds will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their
original cost. Any fees charged by banks or other institutional investors
directly to their customer accounts in connection with investments in shares
of the Funds will not be included in the Global Funds' calculations of yield
or total return. Further information about the performance of the Funds is
included in the Funds' Annual Report dated June 30, 1996, which may be
obtained without charge by contacting the Trust at (800) 448-2430.

19
<PAGE>

APPENDIX A

INVESTMENT POLICIES AND TECHNIQUES

EQUITY SECURITIES (GLOBAL FUND AND GLOBAL EQUITY FUND): The Series may
invest in a broad range of equity securities of U.S. and non-U.S. issuers,
including common stocks of companies or closed-end investment companies,
preferred stocks, debt securities convertible into or exchangeable for common
stock, securities such as warrants or rights that are convertible into common
stock, and sponsored or unsponsored American, European and Global depository
receipts ("Depository Receipts"). The issuers of unsponsored Depository
Receipts are not obligated to disclose material information in the United
States. The Series expects their U.S. equity investments to emphasize large
and intermediate capitalization companies. The equity markets in the non-U.S.
component of the Series will typically include available shares of larger
capitalization companies, although the Global Fund may also invest in small
market capitalization equity markets. Capitalization levels are measured
relative to specific markets, thus large, intermediate and small
capitalization ranges vary country by country. The Global Fund may invest in
equity securities of companies considered by the Advisor to be in their post-
venture capital stage, or "post-venture capital companies." A post-venture
capital company is a company that has received venture capital financing
either (a) during the early stages of the company's existence or the early
stages of the development of a new product or service, or (b) as part of a
restructuring or recapitalization of the company. The Global Fund also may
invest in other open-end investment companies advised by Brinson, in equity
securities of issuers in emerging markets, and in securities with respect to
which the return is derived from the equity securities of issuers in emerging
markets.

FIXED INCOME SECURITIES (GLOBAL FUND AND GLOBAL BOND FUND): The Series may
invest in a broad range of fixed income securities of U.S. and non-U.S.
issuers, including governments and governmental entities, supranational
issuers as well as corporations and other business organizations. The Series
may purchase U.S. dollar denominated securities that reflect a broad range of
investment maturities, qualities and sectors. A majority of the fixed income
securities in which the Series will invest will possess a minimum rating of
BBB- by Standard & Poor's Ratings Group ("S&P") or Baa3 by Moody's Investors
Services, Inc. ("Moody's") or, if unrated, will be determined to be of
comparable quality by Brinson Partners. Such securities are considered to be
investment grade. While securities rated BBB- or Baa3 are regarded as having
an adequate capacity to pay principal and interest, such bonds lack
outstanding investment characteristics and, in fact, have speculative
characteristics; and changes in economic conditions or other circumstances are
more likely to lead to a weakened capacity to make principal and interest
payments than is the case with higher rated bonds. Securities rated lower than
BBB- by S&P and Baa3 by Moody's are classified as non-investment grade
securities (commonly referred to as "junk bonds") carry a higher degree of
risk and are considered to be speculative by the major credit rating agencies.
Both Series currently intend to limit their aggregate investments in non-
investment grade debt securities of their U.S. and non-U.S. dollar-denominated
fixed income assets to no more than 5% of their respective net assets. To the
extent that a security held by a Series is downgraded to below investment
grade, the Series will dispose of that or another non-investment grade
security so that no more than 5% of its assets will be invested in below
investment grade securities. Other fixed income securities in which the Series
may invest include zero coupon securities, mortgage-backed securities, asset-
backed securities and when-issued securities.

The non-U.S. fixed income component of the Series will typically be invested
in the securities of non-U.S. governments, governmental agencies and
supranational issues. A supranational entity is an entity established or
financially supported by the national governments of one or more countries to
promote reconstruction or development. Examples of supranational entities
include, among others: the World Bank, the European Economic Community, the
European Coal and Steel Community, the European Investment Bank, the Inter-
American Development Bank, the Export-Import Bank and the Asian Development
Bank.

20
<PAGE>

The Global Fund may invest in fixed income securities of emerging market
issuers, including government and government-related entities (including
participation in loans between governments and financial institutions), and of
entities organized to restructure outstanding debt securities of developing
countries' corporate issuers.

CASH AND CASH EQUIVALENTS (ALL GLOBAL FUNDS): The Series may invest a
portion of their assets in short-term debt securities (including repurchase
agreements and reverse repurchase agreements) of corporations, the U.S.
government and its agencies and instrumentalities and banks and finance
companies, which may be denominated in any currency. When unusual market
conditions warrant, a Series may make substantial temporary defensive
investments in cash equivalents up to a maximum of 100% of its net assets.
Cash equivalent holdings may be in any currency (although such holdings may
not constitute "cash or cash equivalents" for tax diversification purposes
under the Code). When a Series invests for defensive purposes, it may affect
the attainment of the Series' investment objective.

ZERO COUPON SECURITIES (GLOBAL FUND AND GLOBAL BOND FUND): Zero coupon
securities are debt obligations which do not entitle the holder to any
periodic payments of interest prior to maturity or a specified date when the
securities begin paying current interest (the "cash payment date") and,
therefore, are issued and traded at a discount from their value at maturity or
par value. Such bonds carry an additional risk in that, unlike bonds which pay
interest throughout the period to maturity, a Series investing in zero coupon
securities will realize no cash until the cash payment date and, if the issuer
defaults, a Series may obtain no return at all on its investment. The market
price of zero coupon securities generally is more volatile than the market
price of securities that pay interest periodically and are likely to be more
responsive to changes in interest rates than non-zero coupon securities having
similar maturities and credit qualities. For federal tax purposes, the Series
will be required to include in income daily portions of original issue
discount accrued and to distribute the same to shareholders annually, even if
no payment is received before the distribution date.

MORTGAGE- AND ASSET-BACKED SECURITIES (GLOBAL FUND AND GLOBAL BOND FUND):
Mortgage-backed securities represent direct or indirect participations in, or
are secured by and payable from, pools of mortgage loans secured by real
property, and include single- and multi-class pass-through securities and
collateralized mortgage obligations. These securities may be issued or
guaranteed by agencies or instrumentalities of the U.S. government. Other
mortgage-backed securities are issued by private issuers, generally
originators of and investors in mortgage loans, including savings
associations, mortgage bankers, commercial banks, investment bankers and
special purpose entities (collectively, "private lenders"). Mortgage-backed
securities issued by private lenders may be supported by pools of mortgage
loans or other mortgage-backed securities that are guaranteed, directly or
indirectly, by the U.S. government or one of its agencies or
instrumentalities, or they may be issued without any governmental guarantee of
the underlying mortgage assets but with some form of non-governmental credit
enhancement.

Asset-backed securities have structural characteristics similar to mortgage-
backed securities. However, the underlying assets are not first-lien mortgage
loans or interests therein; rather, they include assets such as motor vehicle
installment sales contracts, other installment loan contracts, home equity
loans, leases of various types of property and receivables from credit card or
other revolving credit arrangements. Payments or distributions of principal
and interest on asset-backed securities may be supported by non-governmental
credit enhancements similar to those utilized in connection with mortgage-
backed securities.

21
<PAGE>

because the underlying mortgage loans or other assets generally may be prepaid
at any time. As a result, the rate of return on these securities may be
affected by prepayments of principal on the underlying loans, which generally
increase as interest rates decline. As a result, if a Series purchases these
securities at a premium, a prepayment rate that is faster than expected will
reduce yield to maturity, while a prepayment rate that is slower than expected
will have the opposite effect of increasing yield to maturity. Conversely, if
a Series purchases these securities at a discount, a prepayment rate that is
faster than expected will increase the yield to maturity, while a prepayment
rate that is slower than expected will reduce the yield to maturity.
Accelerated prepayments on securities purchased by a Series at a premium also
impose a risk of loss of principal because the premium may not have been fully
amortized at the time the principal is prepaid in full. In addition, like
other debt securities, the values of mortgage-related securities, including
government and government-related mortgage pools, generally will fluctuate in
response to market interest rates. The market for privately-issued mortgage-
and asset-backed securities is smaller and less liquid than the market for
government sponsored mortgage-backed securities.

WHEN-ISSUED SECURITIES (GLOBAL FUND AND GLOBAL BOND FUND): The Series may
purchase securities on a "when-issued" basis for payment and delivery at a
later date. The price is generally fixed on the date of commitment to
purchase. During the period between purchase and settlement, no interest
accrues to a Series. At the time of settlement, the market value of the
security may be more or less than the purchase price. A Series will establish
a segregated account consisting of cash, U.S. government securities, equity
securities and/or investment and non-investment grade debt securities in an
amount equal to the amounts of its when-issued securities. The cash, U.S.
government securities, equity securities, investment or non-investment grade
debt securities and other assets held in any segregated account maintained by
the Series with respect to any when-issued securities, options, futures,
forward contracts or other derivative transactions shall be liquid,
unencumbered and marked-to-market daily (the assets held in a segregated
account are referred to in this Prospectus as "Segregated Assets").

FOREIGN CURRENCY TRANSACTIONS (ALL GLOBAL FUNDS): The Series may conduct
their foreign currency exchange transactions on a spot (i.e., cash) basis at
the spot rate prevailing in the foreign currency exchange market or through
entering into contracts to purchase or sell foreign currencies at a future
date (i.e., a "forward foreign currency" contract or "forward" contract). A
forward contract involves an obligation to purchase or sell a specific
currency amount 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. The Series will convert currency on a spot basis from
time to time and investors should be aware that changes in currency exchange
rates and exchange control regulations may affect the costs of currency
conversion.

The Series may enter into forward contracts for hedging purposes as well as
non-hedging purposes. For hedging purposes, a Series may enter into contracts
to deliver or receive foreign currency it will receive from or require for its
normal investment activities. It may also use contracts in a manner intended
to protect foreign currency-denominated securities from declines in value due
to unfavorable exchange rate movements. A Series may also enter into contracts
with the intent of changing the relative exposure of the Series' portfolio of
securities to different currencies to take advantage of anticipated changes in
exchange rates.

When a Series enters into forward contracts for non-hedging purposes, it
will establish a segregated account with its custodian bank in which it will
maintain Segregated Assets equal in value to its obligations with respect to
its forward contracts for non-hedging purposes.

At the maturity of a forward contract, a Series may either sell a portfolio
security and make delivery of the foreign currency, or it may retain the
security and terminate its contractual obligation to deliver the foreign
currency by purchasing an "offsetting" contract with the same currency trader,
obligating it to purchase, on the

22
<PAGE>

same maturity date, the same amount of the foreign currency. A Series may
realize a gain or loss from currency transactions.

OPTIONS ON CURRENCIES (ALL GLOBAL FUNDS): The Series also may purchase and
write put and call options on foreign currencies (traded on U.S. and foreign
exchanges or over-the-counter markets) to manage the portfolios' exposure to
changes in currency exchange rates. Call options on foreign currency written
by the Series will be "covered," which means that the Series will own an equal
amount of, or an offsetting position in, the underlying foreign currency. With
respect to our options on foreign currency written by a Series, the Series
will establish a segregated account with its custodian bank consisting of
Segregated Assets equal in value to the amount the Series would be required to
deliver upon exercise of the put.

FUTURES CONTRACTS (ALL GLOBAL FUNDS): The Series may enter into contracts
for the future purchase or sale of securities, indices or foreign currencies.
A financial futures contract is an agreement between two parties to buy or
sell a specified debt security at a set price on a future date. An index
futures contract is an agreement to take or make delivery of an amount of cash
based on the difference between the value of the index at the beginning and at
the end of the contract period. A futures contract on a foreign currency is an
agreement to buy or sell a specified amount of a currency for a set price on a
future date. A Series may enter into futures contracts to the extent that not
more than 5% of its assets are required as futures contract margin deposits
and its obligations relating to such futures transactions represent not more
than 25% of the Series' assets.

The Series will enter into such futures transactions on domestic exchanges
and, to the extent such transactions have been approved by the Commodity
Futures Trading Commission for sale to customers in the United States, on
foreign exchanges.

OPTIONS (ALL GLOBAL FUNDS): The Series may purchase and write put and call
options on foreign or U.S. securities and indices and enter into related
closing transactions. A Series may use options traded on U.S. exchanges and,
to the extent permitted by law, options traded over-the-counter and on
recognized foreign exchanges. It is the position of the U.S. Securities and
Exchange Commission that over-the-counter options are illiquid. Accordingly, a
Series will invest in such options only to the extent consistent with its 15%
limit on investment in illiquid securities.

REPURCHASE AGREEMENTS (ALL GLOBAL FUNDS): The Series may enter into
repurchase agreements with banks or broker-dealers. Repurchase agreements are
considered under the Act to be collateralized loans by a Series to the seller
secured by the securities transferred to the Series. Repurchase agreements
under the Act will be fully collateralized by securities which the Series may
invest in directly. Such collateral will be marked-to-market daily. If the
seller of the underlying security under the repurchase agreement should
default on its obligation to repurchase the underlying security, a Series may
experience delay or difficulty in recovering its cash. To the extent that, in
the meantime, the value of the security purchased had decreased, the Series
could experience a loss. No more than 15% of a Series' net assets will be
invested in illiquid securities, including repurchase agreements which have a
maturity of longer than seven days. The Series must treat each repurchase
agreement as a security for tax diversification purposes and not as cash, a
cash equivalent or as a receivable.

BORROWING (ALL GLOBAL FUNDS): Each Series is authorized, within specified
limits, to borrow money as a temporary defensive measure for extraordinary
purposes and to pledge its assets in connection with such borrowings.

LOANS OF PORTFOLIO SECURITIES (ALL GLOBAL FUNDS): Each Series may loan its
portfolio securities to broker-dealers and other institutional investors
pursuant to agreements requiring that the loans be continuously secured

23
<PAGE>

by collateral equal at all times in value to at least the market value of the
securities loaned. The major risk to which a Series would be exposed on a loan
transaction is the risk that the borrower would become bankrupt at a time when
the value of the security goes up. Therefore, a Series will only enter into
loan arrangements after a review of all pertinent factors by Brinson Partners,
subject to overall supervision by the Board of Trustees, including the
creditworthiness of the borrowing broker-dealer or institution and then only
if the consideration to be received from such loans would justify the risk.
Creditworthiness will be monitored on an ongoing basis by Brinson Partners.

RULE 144A AND ILLIQUID SECURITIES (ALL GLOBAL FUNDS): Each Series may invest
up to 15% of its net assets in illiquid securities. Illiquid securities are
those securities that are not readily marketable, including restricted
securities and repurchase obligations that mature in more than seven days.
Certain restricted securities that may be resold to institutional investors
pursuant to Rule 144A under the Securities Act of 1933 may be determined to be
liquid under guidelines adopted by the Trust's Board of Trustees.

INVESTMENT COMPANY SECURITIES (GLOBAL FUND): The Trust has received an
exemptive order (the "Exemptive Order") from the U.S. Securities and Exchange
Commission which permits each Series to invest its assets in certain
portfolios of Brinson Relationship Funds, another registered investment
company advised by Brinson Partners. Currently, only the Global Fund intends
to invest in the portfolios of Brinson Relationship Funds and only to the
extent consistent with Brinson Partners' investment process of allocating
assets to specific asset classes. The Global Fund will invest in the
portfolios of Brinson Relationship Funds to obtain exposure to the following
asset classes: (1) equity and fixed income securities of issuers located in
emerging market countries ("Emerging Market Securities"); (2) equity
securities issued by companies with relatively small overall market
capitalizations ("Small Cap Securities"); and (3) high yield securities ("High
Yield Securities"). The Global Fund will invest in corresponding portfolios of
Brinson Relationship Funds only to the extent the Advisor determines that such
investments are a more efficient means for the Global Fund to gain exposure to
the asset classes identified above than by investing directly in individual
securities. Thus, to gain exposure to Emerging Market Securities, the Global
Fund will invest in the Brinson Emerging Markets Equity Fund and the Brinson
Emerging Markets Debt Fund portfolios of Brinson Relationship Funds. To gain
exposure to Small Cap Securities and High Yield Securities, the Global Fund
will invest in the Brinson Post-Venture Fund and the Brinson High Yield Fund
portfolios, respectively, of Brinson Relationship Funds. Each portfolio of
Brinson Relationship Funds in which the Global Fund may invest is permitted to
invest in the same securities of a particular asset class in which the Global
Fund is permitted to invest directly, and with similar risks.

For more detailed descriptions of these investment policies and techniques,
please refer to the Statement of Additional Information, which is available
without charge upon request by calling (800) 448-2430.

24
<PAGE>

---------------------
The Brinson Funds

BRINSON GLOBAL FUND
BRINSON GLOBAL EQUITY FUND
BRINSON GLOBAL BOND FUND

PROSPECTUS

OCTOBER 28, 1996

[LOGO]

Global Institutional
Asset Management
------------------------
The Brinson Funds
-------------------------------------------------------

209 South LaSalle Street . Chicago, Illinois 60604-1295

Tel: (800) 448-2430
<PAGE>

The Brinson Funds
[LOGO]

BRINSON U.S. BALANCED FUND

BRINSON U.S. EQUITY FUND

BRINSON U.S. BOND FUND

209 South LaSalle Street
Chicago, IL 60604-1295

PROSPECTUS
OCTOBER 28, 1996

This Prospectus pertains only to the Brinson U.S. Balanced Fund, Brinson
U.S. Equity Fund and Brinson U.S. Bond Fund (each a "Fund" and collectively,
the "Funds" or "U.S. Funds"), which represent the Brinson Fund class shares of
the U.S. Balanced Fund, U.S. Equity Fund and U.S. Bond Fund Series (each a
"Series" and collectively, the "Series").

This Prospectus sets forth concisely the information a prospective investor
should know before investing in any of the U.S. Funds. Investors should read
and retain this Prospectus for future reference. Additional information about
the U.S. Funds, and the other Series and classes of shares of the Trust is
contained in the Statement of Additional Information dated October 28, 1996,
as amended from time to time, which has been filed with the U.S. Securities
and Exchange Commission. The Statement of Additional Information is
incorporated by reference into this Prospectus and is available upon request
and without charge from the Trust, at the addresses and telephone numbers
below.

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Annual Fund Operating Expenses............................................. 1
Financial Highlights....................................................... 2
Description of the U.S. Funds.............................................. 3
Investment Objectives and Policies......................................... 3
U.S. Balanced Fund....................................................... 3
U.S. Equity Fund......................................................... 3
U.S. Bond Fund........................................................... 4
Investment Considerations and Risks........................................ 4
Management of the Trust ................................................... 6
Portfolio Management....................................................... 7
Administration of the Trust................................................ 7
Purchase of Shares......................................................... 7
Account Options............................................................ 9
Redemption of Shares....................................................... 10
Net Asset Value............................................................ 12
Dividends, Distributions and Taxes......................................... 13
General Information........................................................ 15
Performance Information.................................................... 16
Appendix A................................................................. 18
</TABLE>

ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)

<TABLE>
<CAPTION>
TOTAL FUND
MANAGEMENT FEES OTHER EXPENSES OPERATING EXPENSES
(AFTER FEE WAIVER)/1/ (AFTER REIMBURSEMENT)/2/ (AFTER REIMBURSEMENT)
--------------------- ------------------------ ---------------------
<S> <C> <C> <C>
Brinson U.S. Balanced
Fund................... 0.49% 0.31% 0.80%
Brinson U.S. Equity
Fund................... 0.36% 0.44% 0.80%
Brinson U.S. Bond Fund.. 0.00% 0.60% 0.60%
</TABLE>
- ----------
/1/The Advisor has irrevocably agreed to waive its fees and reimburse certain
expenses so that total operating expenses of the Brinson U.S. Balanced Fund,
Brinson U.S. Equity Fund and Brinson U.S. Bond Fund will never exceed 0.80%,
0.80% and 0.60%, respectively. Had the Advisor not irrevocably agreed to
waive fees and reimburse expenses, the total fund operating expenses for the
fiscal year ended June 30, 1996 for the Brinson U.S. Balanced Fund, Brinson
U.S. Equity Fund and Brinson U.S. Bond Fund would have been 1.01%, 1.14% and
3.63%, respectively.
/2/"Other Expenses" include the fee paid to the Administrator, which is
calculated on the basis of the total net assets of all portfolios within the
Trust and is subject to an annual minimum fee of $75,000 for the initial
multiple class portfolio and $10,000 per each additional multiple class
portfolio.

EXAMPLE: Based on the level of expenses listed above after reimbursement, the
total expenses relating to an investment of $1,000 would be as follows,
assuming a 5% annual return and redemption at the end of each time period.

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Brinson U.S. Balanced Fund...................... $ 8 $26 $44 $99
Brinson U.S. Equity Fund........................ $ 8 $26 $44 $99
Brinson U.S. Bond Fund.......................... $ 6 $19 $33 $75
</TABLE>

The foregoing table is designed to assist the investor in understanding the
various costs and expenses that a shareholder will bear directly or indirectly.

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

1
<PAGE>

FINANCIAL HIGHLIGHTS

FINANCIAL HIGHLIGHTS--FISCAL YEARS ENDED JUNE 30

<TABLE>
<CAPTION>
INCOME (LOSS) FROM INVESTMENT
OPERATIONS LESS DISTRIBUTIONS
------------------------------ -----------------------------
TOTAL DISTRIBU-
INCOME DISTRIBU- TIONS NET NET
NET (LOSS) TIONS FROM AND ASSET ASSETS
NET ASSET NET REALIZED FROM FROM NET IN EXCESS VALUE- TOTAL END OF
VALUE- INVEST- AND INVEST- INVEST- OF NET TOTAL END RETURN PERIOD
BEGINNING MENT UNREALIZED MENT MENT REALIZED DISTRIBU- OF (NON- (IN
YEAR OF PERIOD INCOME GAIN (LOSS) OPERATIONS INCOME GAIN TIONS PERIOD ANNUALIZED) 000S)
- ---- --------- ------- ----------- ---------- --------- --------- --------- ------ ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BRINSON U.S. BALANCED FUND (Commencement of Operations December 30, 1994)
1995............ $10.00 0.23 1.16 1.39 (0.16) -- (0.16) $11.23 13.91% $157,724
1996............ 11.23 0.44 1.04 1.48 (0.43) (0.57) (1.00) 11.71 13.52% $227,829
BRINSON U.S. EQUITY FUND (Commencement of Operations February 22, 1994)
1994............ $10.00 0.05 (0.36) (0.31) (0.04) -- (0.04) $ 9.65 (3.10%) $ 8,200
1995............ 9.65 0.16 1.89 2.05 (0.14) (0.03) (0.17) 11.53 21.45% $ 42,573
1996............ 11.53 0.17 3.31 3.48 (0.17) (0.25) (0.42) 14.59 30.57% $126,342
BRINSON U.S. BOND FUND (Commencement of Operations August 31, 1995)
1996............ $10.00 0.50 (0.14) 0.36 (0.40) (0.03) (0.43) $ 9.93 3.60% $ 9,047
<CAPTION>

RATIOS/SUPPLEMENTAL DATA
------------------------

RATIO OF NET
RATIO OF EXPENSES INVESTMENT INCOME
TO AVERAGE NET TO AVERAGE NET
ASSETS ASSETS
--------------------- ---------------------
AVERAGE
BEFORE AFTER BEFORE AFTER COMMIS-
EXPENSE EXPENSE EXPENSE EXPENSE PORTFOLIO SION
REIMBURSE- REIMBURSE- REIMBURSE- REIMBURSE- TURNOVER RATE PAID
YEAR MENT MENT MENT MENT RATE PER SHARE
- ---- ---------- ---------- ---------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
BRINSON U.S. BALANCED FUND (Commencement of Operations December 30, 1994)
1995............ 1.06%/1/ 0.80%/1/ 4.36%/1/ 4.63%/1/ 196% N/A
1996............ 1.01% 0.80% 3.76% 3.97% 240% $0.0481
BRINSON U.S. EQUITY FUND (Commencement of Operations February 22, 1994)
1994............ 5.40%/1/ 0.80%/1/ (2.82)%/1/ 1.78%/1/ 9% N/A
1995............ 1.70% 0.80% 1.09% 1.99% 33% N/A
1996............ 1.14% 0.80% 1.13% 1.47% 36% $0.0457
BRINSON U.S. BOND FUND (Commencement of Operations August 31, 1995)
1996............ 3.63%/1/ 0.60%/1/ 3.00%/1/ 6.03%/1/ 363% N/A
</TABLE>
- -----
/1/Annualized
N/A=Not Applicable

<PAGE>

DESCRIPTION OF THE U.S. FUNDS

The U.S. Equity Fund and U.S. Bond Fund each have an investment objective to
maximize total return, consisting of capital appreciation and current income,
while controlling risk. The U.S. Balanced Fund has the investment objective to
maximize total return, consisting of capital appreciation and current income.
These investment objectives are fundamental and may not be changed without a
vote of the holders of the majority of the voting securities of the respective
Series. Unless otherwise stated in this Prospectus or in the Statement of
Additional Information, each Series' investment policies are not fundamental
and may be changed without shareholder approval. There can be no assurance
that the Series will achieve their investment objectives.

INVESTMENT OBJECTIVES AND POLICIES

U.S. BALANCED FUND

INVESTMENT OBJECTIVE

The U.S. Balanced Fund's investment objective is to maximize total return,
consisting of capital appreciation and current income. In seeking to achieve
its investment objective, the Series attempts to control risk. Under normal
circumstances, the Series will invest at least 25% of its net assets in fixed
income securities. The Series may utilize a wide range of equity, debt and
money market securities. The Series may also invest in equity securities,
including warrants, preferred stock and securities convertible into equity
securities. The Series may enter into repurchase agreements and reverse
repurchase agreements, and may engage in futures and options for hedging and
other permissible purposes, as more fully described in "Investment
Considerations and Risks" and Appendix A in this Prospectus, and in the
Statement of Additional Information. It is not the policy of the Series to
take unreasonable risks to obtain speculative or aggressively high returns.

The Series is a diversified portfolio that seeks to achieve its objective by
pursuing active asset allocation strategies across U.S. equity and fixed
income markets and active security selection within each market. These
decisions are undertaken relative to the U.S. Balanced Index (the "Balanced
Benchmark"), which is compiled by Brinson Partners, Inc. ("Brinson Partners"
or the "Advisor"). The Balanced Benchmark represents a fixed composite of 65%
Wilshire 5000 Index, 30% Salomon Brothers Broad Investment Grade Bond Index
and 5% 30-day Treasury Bill Index. From time to time, the Advisor may
substitute an equivalent index within a given asset class when the Advisor
believes that such new index more accurately reflects the relevant U.S.
market.

U.S. EQUITY FUND

INVESTMENT OBJECTIVE

3
<PAGE>

will be invested in equity securities of U.S. companies. The Series is a
diversified portfolio that seeks to achieve its objective by investing in a
wide range of equity securities of U.S. companies that are traded on major
stock exchanges as well as on the over-the-counter markets. The Series may
engage in futures and options for hedging and other permissible purposes as
more fully described in "Investment Considerations and Risks" and in Appendix
A in this Prospectus, and in the Statement of Additional Information. The
benchmark for the Series is the Wilshire 5000 Index (the "U.S. Equity
Benchmark"). The U.S. Equity Benchmark is a broad weighted index which
includes all U.S. common stocks. The U.S. Equity Benchmark is designed to
provide a representative indication of the capitalization and return for the
U.S. equity market.

U.S. BOND FUND

INVESTMENT OBJECTIVE

The U.S. Bond Fund's investment objective is to maximize total return,
consisting of capital appreciation and current income, while controlling risk.
As a matter of fundamental policy, under normal circumstances, the Series
intends to invest at least 65% of its total assets in U.S. debt securities
with an initial maturity of more than one year. The Series is a diversified
portfolio that seeks to achieve its objective by investing primarily in fixed
income securities, which may also provide the potential for capital
appreciation. The Series may also engage in futures and options transactions
for hedging and other permissible purposes as more fully described in
"Investment Considerations and Risks" and Appendix A in this Prospectus, and
in the Statement of Additional Information.

The Series may invest in a broad range of fixed income securities, including
debt securities of the U.S. government, together with its agencies and
instrumentalities and the debt securities of U.S. corporations. A majority of
the fixed income securities in which the Series will invest will possess a
minimum rating of BBB- by Standard & Poor's Ratings Group ("S&P") or Baa3 by
Moody's Investors Services, Inc. ("Moody's") or, if unrated, will be
determined to be of comparable quality by Brinson Partners. Such securities
are considered to be investment grade. Other fixed income securities in which
the Series may invest include zero coupon securities, mortgage-backed
securities, asset-backed securities and when-issued securities. The Series may
invest a portion of its assets in short-term debt securities (including
repurchase and reverse repurchase agreements) of corporations, the U.S.
government or its agencies and instrumentalities and banks and finance
companies.

The benchmark for the Series is the Salomon Brothers Broad Investment Grade
Bond Index (the "U.S. Bond Benchmark"). The U.S. Bond Benchmark is a market
driven broad based index which includes U.S. bonds with over one year to
maturity. From time to time, the Advisor may substitute securities in an
equivalent index when it believes that such securities in the index more
accurately reflect the relevant fixed income securities market.

INVESTMENT CONSIDERATIONS AND RISKS

The following provides information about the types of instruments in which
the U.S. Funds may invest, strategies employed by Brinson Partners in its
attempt to attain each Series' investment objective and a summary of related
risks. Shareholders should understand that all investments involve risks and
there can be no guarantee against loss resulting from an investment in the
Series, nor can there be any assurance that the Series will be able to attain
their investment objectives. A complete list of the Series' investment
restrictions and more detailed information about the Series' investments are
contained in Appendix A in this Prospectus, and in the Statement of Additional
Information.

4
<PAGE>

EQUITY SECURITIES (U.S. BALANCED FUND AND U.S. EQUITY FUND)--Equity
securities fluctuate in value as a result of various factors, which are often
unrelated to the value of the issuer of the securities. These fluctuations may
be pronounced. Fluctuations in the value of the U.S. Balanced Fund's and U.S.
Equity Fund's equity investments will affect the value of their shares and
thus the Funds' total returns to investors.

FIXED INCOME SECURITIES (U.S. BALANCED FUND AND U.S. BOND FUND)--All fixed
income securities are subject to two types of risks: credit risk and interest
rate risk. The credit risk relates to the ability of the issuer to meet
interest or principal payments or both as they come due. The interest rate
risk refers to the fluctuations in the net asset value of any portfolio of
fixed income securities resulting from the inverse relationship between the
price and yield of fixed income securities; that is, when the general level of
interest rates rises, the prices of outstanding fixed income securities
declines, and when interest rates fall, prices rise.

FUTURES, OPTIONS AND OTHER DERIVATIVE INSTRUMENTS (ALL U.S. FUNDS)--The
Series may attempt to reduce the overall level of investment risk of
particular securities and attempt to protect against adverse market movements
by investing in futures, options and other derivative instruments. A
derivative instrument is commonly defined as a financial instrument whose
performance and value are derived, at least in part, from another source, such
as the performance of an underlying asset, or a specific security, or an index
of securities. The derivative instruments in which the Series may invest
include the purchase and writing of options on securities (including index
options), investing in futures contracts for the purchase or sale of
instruments based on financial indices, including interest rate indices or
indices of U.S. securities, equity or fixed income securities ("futures
contracts"), forward contracts and swaps and swap-related products, such as
equity index swaps, interest rate swaps, currency swaps, and related caps,
collars and floors.

The investment in futures, options, forward contracts, swaps and similar
strategies by the Series will depend on Brinson Partners' judgment as to the
potential risks and rewards of different types of strategies, and it should be
recognized that the use of these instruments exposes the Series to additional
investment risks and transaction costs. If the Advisor incorrectly analyzes
the market conditions or does not employ the appropriate strategy with respect
to these instruments, the Series could be left in a less favorable position.
For example, gains and losses on investments in futures depend on the
Advisor's ability to predict correctly the direction of security prices,
interest rates and other economic factors. Additional risks inherent in the
use of futures, options and forward contracts include: adverse movements in
the prices of securities or currencies being hedged; the possible absence of a
liquid secondary market for any particular instrument at any time; and the
possible need to defer closing out certain hedge positions to avoid adverse
tax consequences. Options and futures can be volatile instruments and may not
perform as expected. A Series could experience losses if the prices of its
options and futures positions are poorly correlated with its other
investments. If a hedge is applied at an inappropriate time or price trends
are judged incorrectly, options and futures strategies may lower a Series'
return (i.e., options and futures may fail as hedging techniques in cases
where the price movements of the securities underlying the options and futures
do not follow the price movements of the portfolio securities subject to the
hedge). The loss from investing in futures transactions is potentially
unlimited. A Series does not intend to purchase put and call options that are
traded on a national stock exchange in an amount exceeding 5% of its net
assets.

5
<PAGE>

Where not specified, investment limitations with respect to a Series'
derivative instruments will be consistent with that Series' existing
percentage limitations with respect to its overall investment policies and
restrictions. The risks and policies of various types of derivative
investments permitted for the Series, including options, futures, forward
contracts and interest rate swaps, are described in greater detail in Appendix
A in this Prospectus, and in the Statement of Additional Information.

MANAGEMENT OF THE TRUST

THE BOARD OF TRUSTEES

THE ADVISOR

Pursuant to its investment advisory agreements with the Trust on behalf of
each Series, Brinson Partners receives a monthly fee at various annual
percentage rates of each Series' average daily net assets, as described below,
for providing investment advisory services. Brinson Partners is responsible
for paying its own expenses and has agreed to waive that portion of its
advisory fee equal to the total expenses of the Series for any fiscal year
which exceeds the permissible limits applicable to a Series in any state in
which its shares are then qualified for sale. Pursuant to its advisory
agreements, Brinson Partners is authorized, at its own expense, to obtain
statistical and other factual information and advice regarding economic
factors and trends from its foreign subsidiaries, but it does not generally
receive advice or recommendations regarding the purchase or sale of securities
from such subsidiaries.

For providing investment advisory services during the fiscal year ended June
30, 1996, the U.S. Balanced Fund, U.S. Equity Fund and U.S. Bond Fund paid
Brinson Partners a monthly fee at the annual rate of 0.70%, 0.70% and 0.50%,
respectively, of each Series' respective average daily net assets.

6
<PAGE>

PORTFOLIO MANAGEMENT

ADMINISTRATION OF THE TRUST

THE UNDERWRITER

THE ADMINISTRATOR

The Trust, on behalf of each Series, has entered into an administrative
services agreement with FPS Services, Inc. ("FPS"), 3200 Horizon Drive, King
of Prussia, PA 19406-0903, pursuant to which the administrator receives a fee
at the annual rate of 0.15% of the average daily net assets of the Trust on
the first $75 million; 0.10% on the next $75 million; 0.075% on the next $350
million; and 0.05% on the next $500 million. Each Series pays its pro rata
portion based upon its average daily net assets, but in no event shall a
Series pay less than $10,000 per year for each multiple class portfolio.
Pursuant to the agreement with FPS, maximum administration fees are $400,000
for the initial multiple class portfolio and $60,000 per year for each
subsequent multiple class portfolio.

THE CUSTODIAN, TRANSFER AGENT AND ACCOUNTING/PRICING AGENT

Bankers Trust Company, c/o BTNY Services, Inc., 34 Exchange Place, Jersey
City, NJ 07302-1107 is custodian for the securities and cash of each Series.

FPS also performs certain accounting and pricing services for the Trust,
including the daily calculation of the Funds' respective net asset values.

PURCHASE OF SHARES

Shares of the U.S. Funds may be purchased directly from the Trust at the net
asset value next determined after receipt of the order in proper form by the
transfer agent. There is no sales load in connection with the

7
<PAGE>

purchase of Fund shares. The Trust reserves the right to reject any purchase
order and to suspend the offering of shares of the Funds or the Series. The
minimum initial investment for Fund shares is $100,000. Subsequent investments
for Fund shares will be accepted in minimum amounts of $2,500. The Trust
reserves the right to vary the initial investment minimum and minimums for
additional investments in the Funds at any time. In addition, Brinson Partners
may waive the minimum initial investment requirement for any investor.

Purchase orders for shares of the U.S. Funds which are received by the
transfer agent in proper form prior to the close of regular trading hours
(currently 4:00 p.m. Eastern time) on the New York Stock Exchange (the "NYSE")
on any day that the Funds' net asset values per share are calculated, are
priced according to the net asset value determined on that day. Purchase
orders for shares of the Funds received after the close of the NYSE on a
particular day are priced as of the time the net asset value per share is next
determined.

The Trust may accept telephone orders for Fund shares from broker-dealers or
service organizations which have been previously approved by the Trust. It is
the responsibility of such broker-dealers or service organizations to promptly
forward purchase orders and payments for the same to the Funds. Shares of the
Funds may be purchased through broker-dealers, banks and bank trust
departments which may charge the investor a transaction fee or other fee for
their services at the time of purchase. Such fees would not otherwise be
charged if the shares were purchased directly from the Trust.

PURCHASES MAY BE MADE IN ONE OF THE FOLLOWING WAYS:

<TABLE>
<CAPTION>
INITIAL INVESTMENT SUBSEQUENT INVESTMENTS
------------------------------- -------------------------------
<S> <C> <C>
MINIMUM $100,000 MINIMUM $2,500
BY MAIL . Complete and sign the Account . Make your check payable
[LOGO] Application accompanying this to "Brinson ________ Fund."
Prospectus.
. Make your check payable to . Enclose the remittance
"Brinson ________ Fund." portion of your account
statement and include the
amount of investment, the
account name and number.
. Mail to the address indicated . Mail to the address indicated
on the Account Application. on your account statement or
enclose in the envelope
provided.
BY WIRE . Call (800) 448-2430 to
[LOGO] arrange for a wire
transaction.
. Wire federal funds within 24 . Wire federal funds to:
hours to: UNITED MISSOURI BANK KC NA
UNITED MISSOURI BANK KC NA ABA # 10-10-00695
ABA # 10-10-00695 FOR: FPS SERVICES, INC.
FOR: FPS SERVICES, INC. A/C 98-7037-071-9
A/C 98-7037-071-9 "BRINSON ________ FUND" AND
"BRINSON ________ FUND" AND INCLUDE YOUR NAME AND ACCOUNT
INCLUDE YOUR NAME AND NEW NUMBER.
ACCOUNT NUMBER.
. Complete and sign the Account
Application and mail to the
address indicated immediately
following the initial wire
transaction.
</TABLE>

8
<PAGE>

<TABLE>
<CAPTION>
INITIAL INVESTMENT SUBSEQUENT INVESTMENTS
------------------------------- -------------------------------
<S> <C> <C>
BY TELEPHONE . Call (800) 448-2430 to . Call (800) 448-2430 to
[LOGO] arrange for a telephone arrange for a telephone
transaction. transaction.
PURCHASING BY EXCHANGES . You may open a new account by . You may purchase additional
[LOGO] making an exchange from an shares by making an exchange
existing Brinson Fund class from an existing Brinson Fund
account of any other Series of class account of any other
the Trust. Exchanges may be Series of the Trust. Exchanges
made by mail or telephone. may be made by mail or
Call (800) 448-2430 for telephone. Call (800) 448-2430
assistance. for assistance.
AUTOMATICALLY . Please refer to "Automatic . Please refer to "Automatic
Investment Plan" under Investment Plan" under
"Account Options" or call "Account Options" or call
(800) 448-2430 for assistance. (800) 448-2430 for assistance.
</TABLE>

ACCOUNT OPTIONS

<TABLE>
<CAPTION>
ACCOUNT OPTIONS INSTRUCTIONS
-------------------------- ---------------------------------------------------
<C> <S>
AUTOMATIC INVESTMENT PLAN . You may have money deducted directly from
your checking, savings or bank money market
accounts for investment in the Funds each
month or quarter.
. Complete the Automatic Investment Plan
Application, which is available upon
request by calling (800) 448-2430, and mail
it to the address indicated.
. The initial account must be opened first
with the initial $100,000 minimum
investment, with subsequent minimum
investments of $500 pursuant to the
Automatic Investment Plan.
. The account designated will be debited in
the specified amount, on the date
indicated, and Fund shares will be
purchased. The Trust may alter or terminate
the Automatic Investment Plan at any time.
SYSTEMATIC WITHDRAWAL PLAN . A shareholder with a minimum account of
$100,000 may direct the transfer agent to
send the shareholder (or anyone the
shareholder designates) regular, monthly,
quarterly or semi-annual payments. Each
payment under a Systematic Withdrawal Plan
("SWP") must be at least $500. Such
payments are drawn from share redemptions.
. Shareholders participating in the SWP must
elect to have their dividends and
distributions automatically reinvested in
additional Fund shares.
. The Trust may terminate any SWP for an
account if the value of the account falls
below $50,000 as a result of share
redemptions or an exchange of shares of a
Fund for Brinson Fund class shares of
another Series of the Trust.
</TABLE>

9
<PAGE>

<TABLE>
<CAPTION>
ACCOUNT OPTIONS INSTRUCTIONS
------------------------------ ----------------------------------------------
<C> <S>
INDIVIDUAL RETIREMENT ACCOUNTS . An IRA is a tax-deferred retirement
savings account that may be used by an
individual under age 70 1/2 who has
compensation or self-employment income
and his or her unemployed spouse, or
an individual who has received a
qualified distribution from his or her
employer's retirement plan.
. The minimum purchase requirement for
IRAs is $2,000.
</TABLE>

REDEMPTION OF SHARES

Shareholders may redeem their shares of the Funds without charge on any
business day that the NYSE is open. Redemptions will be effected at the net
asset value per share next determined after the receipt by the transfer agent
of a redemption request meeting the requirements described below. The Trust
normally sends redemption proceeds on the next business day but, in any event,
redemption proceeds are sent within five business days of receipt of a
redemption request in proper form. Payment also may be made by wire directly
to any bank previously designated by the shareholder in an Account
Application. There is no charge for redemptions by wire. Please note that the
shareholder's bank may impose a fee for wire service. The Trust will honor
redemption requests of shareholders who recently purchased shares by check,
but will not mail the proceeds until it is reasonably satisfied that the
purchase check has cleared, which may take up to fifteen days from the
purchase date. The Trust will not accept a check endorsed over by a third-
party.

10
<PAGE>

SHARES MAY BE REDEEMED IN ONE OF THE FOLLOWING WAYS:

<TABLE>
<C> <S>
BY MAIL . Submit a written request for redemption with:
[LOGO] . The Fund's name;
. Your Fund account number;
. The dollar amount or number of shares to be
redeemed; and
. Signatures of all persons required to sign for
transactions, exactly as their names appear on
the Account Application.
. A signature guarantee for the signature of each
person in whose name the account is registered
is required on all written redemption requests
over $5,000.
. Mail to the address indicated on the Account
Application. Questions may be directed to the
transfer agent at (800) 448-2430.
BY WIRE . This service must be elected either on the
[LOGO] initial application or subsequently arranged in
writing.
. Shares may be redeemed by instructing the
transfer agent by telephone at (800) 448-2430.
. Wire redemption requests must be received by the
transfer agent before 4:00 p.m. Eastern time for
money to be wired the next business day.
BY TELEPHONE (800) 448-2430 . This service must be elected either on the
[LOGO] initial application or subsequently arranged in
writing.
. Shares may be redeemed by instructing the
transfer agent by telephone at (800) 448-2430.
. Shares will be sold at the next share price
calculated after the order is received and
accepted. Share price is normally calculated at
4:00 p.m. Eastern time.
AUTOMATICALLY . Please refer to "Systematic Withdrawal Plan"
under "Account Options" or call (800) 448-2430
for assistance.
</TABLE>
- ----------
NOTE: The Trust reserves the right to refuse a wire or telephone redemption if
it is believed advisable to do so. Procedures for redeeming shares of the
U.S. Funds by wire or telephone may be modified or terminated by the
Trust at any time.

TELEPHONE TRANSACTIONS:

11
<PAGE>

EXCHANGE OF SHARES:

TRANSFER OF SECURITIES:

At the discretion of the Trust, investors may be permitted to purchase Fund
shares by transferring securities to the Series that meet the Series'
investment objective and policies. Securities transferred to the Series will
be valued in accordance with the same procedures used to determine the Fund's
net asset value at the time of the next determination of net asset value after
such acceptance. Shares issued by a Series in exchange for securities will be
issued at the net asset value per share of the Fund determined as of the same
time. All dividends, interest, subscription, or other rights pertaining to
such securities shall become the property of the Series and must be delivered
to the Series by the investor upon receipt from the issuer. Investors who are
permitted to transfer such securities will be required to recognize a gain or
loss on such transfer and pay tax thereon, if applicable, measured by the
difference between the fair market value of the securities and the investors'
basis therein. Securities will not be accepted in exchange for shares of a
Fund unless: (1) such securities are, at the time of the exchange, eligible to
be included in the Series' portfolio and current market quotations are readily
available for such securities; (2) the investor represents and warrants that
all securities offered to be exchanged are not subject to any restrictions
upon their sale by the Series under the Securities Act of 1933 or under the
laws of the country in which the principal market for such securities exists,
or otherwise; and (3) the value of any such security (except U.S. government
securities) being exchanged, together with other securities of the same issuer
owned by the Series, will not exceed 5% of the Series' net assets immediately
after the transaction.

NET ASSET VALUE

12
<PAGE>

within the range considered best to represent value in the circumstances.
Price information on listed securities is generally taken from the closing
price on the exchange where the security is primarily traded. Valuations of
equity securities may be obtained from a pricing service and/or broker-
dealers when such prices are believed to reflect fair value of such
securities. Use of a pricing service and/or broker-dealers has been
approved by the Board of Trustees. Futures contracts are valued at their
daily quoted settlement price on the exchange on which they are traded.

Securities with a remaining maturity of 60 days or less are valued at
amortized cost, which approximates market value. Fixed income securities
having a remaining maturity of over 60 days are valued at market price.
Debt securities are valued on the basis of prices provided by a pricing
service, or at the bid price where readily available, as long as the bid
price, in the opinion of the Advisor, continues to reflect the value of the
security. Redeemable securities issued by open-end investment companies are
valued using their respective net asset values for purchase orders placed
at the close of the NYSE. Securities (including over-the-counter options)
for which market quotations are not readily available and other assets are
valued at their fair value as determined in good faith by or under the
direction of the Trustees.

Each of the Series' two classes of shares will bear pro rata all of the
common expenses of that Series. The net asset value of all outstanding shares
of each class of the Series will be computed on a pro rata basis for each
outstanding share based on the proportionate participation in the Series
represented by the value of shares of that class. All income earned and
expenses incurred by the Series will be borne on a pro rata basis by each
outstanding share of a class, based on each class' proportionate participation
in the Series represented by the value of share of such class, except that the
Brinson Fund class will not incur any of the expenses under the SwissKey Fund
class' 12b-1 Plan.

DIVIDENDS, DISTRIBUTIONS AND TAXES

DIVIDENDS

13
<PAGE>

TAXES

Redemptions of Series shares, and the exchange of shares between two Series
of the Trust, are taxable events and, accordingly, shareholders may realize
capital gains or losses on these transactions.

14
<PAGE>

Revenue Service that an account is subject to back-up withholding. An
individual's taxpayer identification number is the individual's social
security number.

GENERAL INFORMATION

ORGANIZATION

The Brinson Funds is a Delaware business trust organized pursuant to an
Agreement and Declaration of Trust, dated December 1, 1993. The Trust was
originally organized as a Maryland corporation on April 14, 1992. On December
1, 1993, the Trust reorganized as a Delaware business trust through a merger
of the Maryland corporation into the Trust. The Trust is registered under the
Act as an open-end management investment company, commonly known as a mutual
fund, and consists of seven different investment portfolios or Series. The
Trustees of the Trust may establish additional Series or classes of shares
without the approval of shareholders. The U.S. Balanced Fund, U.S. Equity Fund
and U.S. Bond Fund are each diversified portfolios. The assets of each Series
belong only to that Series, and the liabilities of each Series are borne
solely by that Series and no other.

DESCRIPTION OF SHARES

Each Series is authorized to issue an unlimited number of shares of
beneficial interest with a $0.001 par value per share. The Board of Trustees
has the power to designate one or more Series or sub-Series/classes of shares
of beneficial interest and to classify or reclassify only unissued shares with
respect to such Series. Shares of each Series represent equal proportionate
interests in the assets of that Series only and have identical voting,
dividend, redemption, liquidation, and other rights, except that only shares
of each Series' SwissKey Fund class shall have voting rights with respect to
the Rule 12b-1 Plan relating to that class as described below. All shares
issued are fully paid and non-assessable, and shareholders have no preemptive
or other right to subscribe to any additional shares and no conversion rights.
Currently, the Trust offers seven investment portfolios or Series--Global
Fund, Global Equity Fund, Global Bond Fund, U.S. Balanced Fund, U.S. Equity
Fund, U.S. Bond Fund and Non-U.S. Equity Fund. Two classes of shares are
currently issued by the Trust for each Series, the SwissKey Fund class and the
Brinson Fund class.

VOTING RIGHTS

15
<PAGE>

more than one Series, in which case the shareholders of all such Series shall
be entitled to vote thereon. Only the SwissKey Fund class shareholders may
vote on matters related to the Rule 12b-1 Plan associated with that class.

SHAREHOLDER MEETINGS

The Trustees of the Trust do not intend to hold annual meetings of
shareholders of the Series. The U.S. Securities and Exchange Commission,
however, requires the Trustees to promptly call a meeting for the purpose of
voting upon the question of removal of any Trustee when requested to do so by
not less than 10% of the outstanding shareholders of the respective Series. In
addition, subject to certain conditions, shareholders of each Series may apply
to other Series of the Trust to communicate with other shareholders to request
a shareholders' meeting to vote upon the removal of a Trustee or Trustees.

PORTFOLIO TURNOVER (U.S. BALANCED FUND AND U.S. BOND FUND)

As a result of the U.S. Balanced Fund's and U.S. Bond Fund's investment
policies, their portfolio turnover rates may exceed 100%. High portfolio
turnover (over 100%) may involve correspondingly greater brokerage commissions
and other transaction costs, which will be borne directly by the effected
Series and ultimately, by the Series' shareholders. In addition, high
portfolio turnover may result in increased short-term capital gains, which,
when distributed to shareholders, are treated as ordinary income.

PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS

SHAREHOLDER REPORTS AND INQUIRIES

Shareholders will receive semi-annual reports showing portfolio investments
and other information as of December 31 and annual reports audited by
independent auditors as of June 30. Shareholders with inquiries should call
the U.S. Funds at (800) 448-2430 or write to The Brinson Funds, 3200 Horizon
Drive, P.O. Box 61503, King of Prussia, PA 19406-0903.

PERFORMANCE INFORMATION

16
<PAGE>

(based on the average daily number of shares entitled to receive dividends
outstanding during the period) by the maximum net asset value per share on the
last day of the period and annualizing the result on a semi-annual compounded
basis. The Funds' total return may be calculated on an annualized and
aggregate basis for various periods (which periods will be stated in the
advertisement). Average annual return reflects the average percentage change
per year in value of an investment in a Fund. Aggregate total return reflects
the total percentage change over the stated period.

To help investors better evaluate how an investment in the U.S. Funds might
satisfy their investment objectives, advertisements regarding the Funds may
discuss yield or total return as reported by various financial publications.
Advertisements may also compare yield or total return to other investments,
indices and averages. The following publications, benchmarks, indices and
averages may be used: Lipper Mutual Fund Performance Analysis; Lipper Fixed
Income Analysis; Lipper Mutual Fund Indices; Morgan Stanley Indices; Shearson
Lehman Hutton Treasury Index; Salomon Brothers Indices; Dow Jones Composite
Average or its component indices; Standard & Poor's 500 Stock Index or its
component indices; Wilshire Indices; The New York Stock Exchange composite or
component indices; CDA Mutual Fund Report; Weisenberger -- Mutual Funds
Panorama and Investment Companies; Mutual Fund Values and Mutual Fund Service
Book, published by Morningstar, Inc.; comparable portfolios managed by the
Advisor; and financial publications, such as Business Week, Kiplinger's
Personal Finance, Financial World, Forbes, Fortune, Money Magazine, The Wall
Street Journal, Barron's, et al., which rate fund performance over various
time periods.

The principal value of an investment in the Funds will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their
original cost. Any fees charged by banks or other institutional investors
directly to their customer accounts in connection with investments in shares
of the Funds will not be included in the U.S. Funds' calculations of yield or
total return. Further information about the performance of the Funds is
included in the Funds' Annual Report dated June 30, 1996, which may be
obtained without charge by contacting the Trust at (800) 448-2430.

17
<PAGE>

APPENDIX A

INVESTMENT POLICIES AND TECHNIQUES

EQUITY SECURITIES (U.S. BALANCED FUND AND U.S. EQUITY FUND): The Series may
invest in a broad range of equity securities of U.S. issuers, including common
and preferred stocks, debt securities convertible into or exchangeable for
common stock and securities such as warrants or rights that are convertible
into common stock. The Series expects their U.S. equity investments to
emphasize large and intermediate capitalization companies.

FIXED INCOME SECURITIES (U.S. BALANCED FUND AND U.S. BOND FUND): The Series
may invest in a broad range of fixed income securities of U.S. issuers,
including governments and governmental entities, supranational issuers as well
as corporations and other business organizations. The Series may purchase U.S.
dollar denominated securities that reflect a broad range of investment
maturities, qualities and sectors. A majority of the fixed income securities
in which the Series will invest will meet a minimum rating of BBB- by S&P or
Baa3 by Moody's or, if unrated, will be determined to be of comparable quality
by Brinson Partners. Such securities are considered to be investment grade.
While securities rated BBB- or Baa3 are regarded as having an adequate
capacity to pay principal and interest, such bonds lack outstanding investment
characteristics and, in fact, have speculative characteristics; and changes in
economic conditions or other circumstances are more likely to lead to a
weakened capacity to make principal and interest payments than is the case
with higher rated bonds. Securities rated lower than BBB- by S&P and Baa3 by
Moody's are classified as non-investment grade securities (commonly referred
to as "junk bonds"), carry a higher degree of risk and are considered to be
speculative by the major credit rating agencies. Each Series currently intends
to limit its aggregate investment in non-investment grade debt securities of
its U.S. dollar denominated fixed income assets to no more than 5% of its net
assets. To the extent that a security held by a Series is downgraded to below
investment grade, the Series will dispose of that or another non-investment
grade security so that no more than 5% of its assets will be invested in below
investment grade securities. Other fixed income securities in which the Series
may invest include zero coupon securities, mortgage-backed securities, asset-
backed securities and when-issued securities.

CASH AND CASH EQUIVALENTS (ALL U.S. FUNDS): The Series may invest a portion
of their assets in short-term debt securities (including repurchase and
reverse repurchase agreements) of corporations, the U.S. government and its
agencies and instrumentalities and banks and finance companies. When unusual
market conditions warrant, a Series may make substantial temporary defensive
investments in cash equivalents up to a maximum of 100% of its net assets.
Cash equivalent holdings may be in any currency (although such holdings may
not constitute "cash or cash equivalents" for tax diversification purposes
under the Code). When a Series invests for defensive purposes, it may affect
the attainment of the Series' investment objective.

ZERO COUPON SECURITIES (U.S. BALANCED FUND AND U.S. BOND FUND): Zero coupon
securities are debt obligations which do not entitle the holder to any
periodic payments of interest prior to maturity or a specified date when the
securities begin paying current interest (the "cash payment date") and
therefore are issued and traded at a discount from their value at maturity or
par value. Such bonds carry an additional risk in that, unlike bonds which pay
interest throughout the period to maturity, a Series investing in zero coupon
securities will realize no cash until the cash payment date and, if the issuer
defaults, a Series may obtain no return at all on its investment. The market
price of zero coupon securities generally is more volatile than the market
price of securities that pay interest periodically and are likely to be more
responsive to changes in interest rates than non-zero coupon securities having
similar maturities and credit qualities. For federal tax purposes, the Series
will be required to include in income daily portions of original issue
discount accrued and to distribute the same to shareholders annually, even if
no payment is received before the distribution date.

18
<PAGE>

MORTGAGE AND ASSET-BACKED SECURITIES (U.S. BALANCED FUND AND U.S. BOND
FUND): Mortgage-backed securities represent direct or indirect participations
in, or are secured by and payable from, pools of mortgage loans secured by
real property, and include single- and multi-class pass-through securities and
collateralized mortgage obligations. These securities may be issued or
guaranteed by agencies or instrumentalities of the U.S. government. Other
mortgage-backed securities are issued by private issuers, generally
originators of and investors in mortgage loans, including savings
associations, mortgage bankers, commercial banks, investment bankers and
special purpose entities (collectively, "private lenders"). Mortgage-backed
securities issued by private lenders may be supported by pools of mortgage
loans or other mortgage-backed securities that are guaranteed, directly or
indirectly, by the U.S. government or one of its agencies or
instrumentalities, or they may be issued without any governmental guarantee of
the underlying mortgage assets but with some form of non-governmental credit
enhancement.

The yield characteristics of mortgage- and asset-backed securities differ
from those of traditional debt obligations. Among the principal differences
are that interest and principal payments are made more frequently on mortgage-
and asset-backed securities, usually monthly, and that principal may be
prepaid at any time because the underlying mortgage loans or other assets
generally may be prepaid at any time. As a result, the rate of return on these
securities may be affected by prepayments of principal on the underlying
loans, which generally increase as interest rates decline. As a result, if a
Series purchases these securities at a premium, a prepayment rate that is
faster than expected will reduce yield to maturity, while a prepayment rate
that is slower than expected will have the opposite effect of increasing yield
to maturity. Conversely, if a Series purchases these securities at a discount,
a prepayment rate that is faster than expected will increase the yield to
maturity, while a prepayment rate that is slower than expected will reduce the
yield to maturity. Accelerated prepayments on securities purchased by a Series
at a premium also impose a risk of loss of principal because the premium may
not have been fully amortized at the time the principal is prepaid in full. In
addition, like other debt securities, the values of mortgage-related
securities, including government and government-related mortgage pools,
generally will fluctuate in response to market interest rates. The market for
privately-issued mortgage and asset-backed securities is smaller and less
liquid than the market for government sponsored mortgage-backed securities.

WHEN-ISSUED SECURITIES (U.S. BALANCED FUND AND U.S. BOND FUND): The Series
may purchase securities on a "when-issued" basis for payment and delivery at a
later date. The price is generally fixed on the date of commitment to
purchase. During the period between purchase and settlement, no interest
accrues to the Series. At the time of settlement, the market value of the
security may be more or less than the purchase price. The Series will
establish a segregated account consisting of cash, U.S. government securities,
equity securities and/or investment and non-investment grade debt securities
in an amount equal to the amounts of their when-issued securities. The cash,
U.S. government securities, equity securities, investment or non-investment
grade debt securities and other assets held in any segregated account
maintained by the Series with respect to any when-issued securities, options,
futures, forward contracts or other derivative transactions shall be liquid,
unencumbered and marked-to-market daily (the assets held in a segregated
account are referred to in this Prospectus as "Segregated Assets").

19
<PAGE>

FUTURES CONTRACTS (ALL U.S. FUNDS): The Series may enter into contracts for
the future purchase or sale of securities or indices. A financial futures
contract is an agreement between two parties to buy or sell a specified debt
security at a set price on a future date. An index futures contract is an
agreement to take or make delivery of an amount of cash based on the
difference between the value of the index at the beginning and at the end of
the contract period. A Series may enter into futures contracts to the extent
that not more than 5% of its assets are required as futures contract margin
deposits and its obligations relating to such futures transactions represent
not more than 25% of the Series' assets.

OPTIONS (ALL U.S. FUNDS): The Series may purchase and write put and call
options on U.S. securities and indices and enter into related closing
transactions. A Series may use options traded on U.S. exchanges and, to the
extent permitted by law, options traded over-the-counter. It is the position
of the U.S. Securities and Exchange Commission that over-the-counter options
are illiquid. Accordingly, a Series will invest in such options only to the
extent consistent with its 15% limit on investment in illiquid securities.

REPURCHASE AGREEMENTS (ALL U.S. FUNDS): The Series may enter into repurchase
agreements with banks or broker-dealers. Repurchase agreements are considered
under the Act to be collateralized loans by a Series to the seller secured by
the securities transferred to the Series. Repurchase agreements under the Act
will be fully collateralized by securities which the Series may invest in
directly. Such collateral will be marked-to-market daily. If the seller of the
underlying security under the repurchase agreement should default on its
obligation to repurchase the underlying security, the Series may experience
delay or difficulty in recovering its cash. To the extent that, in the
meantime, the value of the security purchased had decreased, the Series could
experience a loss. No more than 15% of a Series' net assets will be invested
in illiquid securities, including repurchase agreements which have a maturity
of longer than seven days. The Series must treat each repurchase agreement as
a security for tax diversification purposes and not as cash, a cash equivalent
or as a receivable.

BORROWING (ALL U.S. FUNDS): Each Series is authorized, within specified
limits, to borrow money as a temporary defensive measure for extraordinary
purposes and to pledge its assets in connection with such borrowings.

LOANS OF PORTFOLIO SECURITIES (ALL U.S. FUNDS): Each Series may loan its
portfolio securities to broker-dealers and other institutional investors
pursuant to agreements requiring that the loans be continuously secured by
collateral equal at all times in value to at least the market value of the
securities loaned. The major risk to which the Series would be exposed on a
loan transaction is the risk that the borrower would become bankrupt at a time
when the value of the security goes up. Therefore, a Series will only enter
into loan arrangements after a review of all pertinent factors by Brinson
Partners, subject to overall supervision by the Board of Trustees, including
the creditworthiness of the borrowing broker-dealer or institution and then
only if the consideration to be received from such loans would justify the
risk. Creditworthiness will be monitored on an ongoing basis by Brinson
Partners.

RULE 144A AND ILLIQUID SECURITIES (ALL U.S. FUNDS): Each Series may invest
up to 15% of its net assets in illiquid securities. Illiquid securities are
those securities that are not readily marketable, including restricted
securities and repurchase obligations that mature in more than seven days.
Certain restricted securities that may be resold to institutional investors
pursuant to Rule 144A under the Securities Act of 1933 may be determined to be
liquid under guidelines adopted by the Trust's Board of Trustees.

20
<PAGE>

---------------------
The Brinson Funds

BRINSON U.S. BALANCED FUND
BRINSON U.S. EQUITY FUND
BRINSON U.S. BOND FUND

PROSPECTUS

OCTOBER 28, 1996

[LOGO]

Global Institutional
Asset Management
------------------------
The Brinson Funds
-----------------------------------------------------------
209 South LaSalle Street . Chicago, Illinois 60604-1295

Tel: (800) 448-2430
<PAGE>

[LOGO] The Brinson Funds

BRINSON NON-U.S. EQUITY FUND

209 South LaSalle Street
Chicago, IL 60604-1295

PROSPECTUS
OCTOBER 28, 1996

THE BRINSON FUNDS (the "Trust") is a no-load, open-end management investment
company which currently offers seven distinct investment portfolios or "
Series." Each Series offers two classes of shares: the Brinson Fund class and
SwissKey Fund class. This Prospectus pertains only to the Brinson Non-U.S.
Equity Fund (the "Fund"), which represents the Brinson Fund class shares of
the Non-U.S. Equity Fund Series (the "Series").

This Prospectus sets forth concisely the information a prospective investor
should know before investing in the Brinson Non-U.S. Equity Fund. Investors
should read and retain this Prospectus for future reference. Additional
information about the Non-U.S. Equity Fund, and the other Series and classes
of shares of the Trust is contained in the Statement of Additional Information
dated October 28, 1996, as amended from time to time, which has been filed
with the U.S. Securities and Exchange Commission. The Statement of Additional
Information is incorporated by reference into this Prospectus and is available
upon request and without charge from the Trust, at the addresses and telephone
numbers below.

AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE
BOARD OR ANY OTHER AGENCY. AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OR OTHER
OBLIGATION OF, OR GUARANTEED OR ENDORSED BY, ANY BANK.

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Annual Fund Operating Expenses............................................. 1
Financial Highlights....................................................... 2
Investment Objective and Policies.......................................... 3
Investment Considerations and Risks........................................ 3
Management of the Trust.................................................... 5
Portfolio Management....................................................... 6
Administration of the Trust................................................ 6
Purchase of Shares......................................................... 7
Account Options............................................................ 9
Redemption of Shares....................................................... 10
Net Asset Value............................................................ 12
Dividends, Distributions and Taxes......................................... 14
General Information........................................................ 15
Performance Information.................................................... 16
Appendix A................................................................. 18
</TABLE>

This Prospectus is not an offering of the securities herein described in any
jurisdiction or to any person to whom it is unlawful for the Fund to make such
an offer or solicitation. No sales representative, dealer, or other person is
authorized to give any information or make any representation other than those
contained in this Prospectus.
<PAGE>

ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)

<TABLE>
<S> <C>
Management Fees (after fee waiver)/1/..................................... 0.60%
Other Expenses (after reimbursement)/2/................................... 0.40%
-----
Total Fund Operating Expenses (after reimbursement)....................... 1.00%
=====
</TABLE>
- ----------
/1/The Advisor has irrevocably agreed to waive its fees and reimburse certain
expenses so that the Fund's total operating expenses will never exceed
1.00%. Had the Advisor not irrevocably agreed to waive fees and reimburse
expenses, the total fund operating expenses for the fiscal year ended June
30, 1996 for the Brinson Non-U.S. Equity Fund would have been 1.20%.

<TABLE>
<CAPTION>
NAME OF FUND 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------ ------ ------- ------- --------
<S> <C> <C> <C> <C>
Brinson Non-U.S. Equity Fund.................... $10 $32 $55 $122
</TABLE>

The foregoing table is designed to assist the investor in understanding the
various costs and expenses that a shareholder will bear directly or
indirectly.

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

THE EXAMPLE SHOULD NOT BE CONSIDERED REPRESENTATIVE OF PAST OR FUTURE EXPENSES
AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE INDICATED. MOREOVER,
WHILE THE EXAMPLE ASSUMES A 5% ANNUAL RETURN, THE FUND'S ACTUAL PERFORMANCE
WILL VARY AND MAY RESULT IN ACTUAL RETURNS GREATER OR LESS THAN 5%.

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

1
<PAGE>

FINANCIAL HIGHLIGHTS

The selected financial information in the following table has been audited
by the Fund's independent auditors, whose unqualified report thereon appears
in the Fund's Annual Report to Shareholders dated June 30, 1996. Additional
financial data and related notes are contained in the Fund's Annual Report to
Shareholders, which is incorporated by reference into the Statement of
Additional Information and is available without charge upon request.

The following table sets forth financial data for a share of beneficial
interest of the Fund outstanding throughout the periods presented.

<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR FOR THE YEAR AUGUST 31, 1993/1/
ENDED ENDED TO
JUNE 30, 1996 JUNE 30, 1995 JUNE 30, 1994
------------- ------------- ------------------
<S> <C> <C> <C>
Net asset value, beginning of
period......................... $ 9.68 $ 9.69 $ 10.00
Income from investment opera-
tions:
Net investment income......... 0.18 0.15 0.10
Net realized and unrealized
gain (loss).................. 2.05 (0.16) (0.34)
-------- -------- -------
Total income (loss) from in-
vestment operations ....... 2.23 (0.01) (0.24)
-------- -------- -------
Less distributions:
Distributions from net invest-
ment income.................. (0.18) -- (0.07)
Distributions from and in ex-
cess of net realized gain.... (0.56) -- --
-------- -------- -------
Total distributions......... (0.74) -- (0.07)
-------- -------- -------
Net asset value, end of peri-
od........................... $ 11.17 $ 9.68 $ 9.69
======== ======== =======
Total Return (non-annualized). 23.64% (0.10%) (2.45%)
Ratios/Supplemental Data
Net assets, end of period (in
000's)....................... $212,366 $148,319 $71,544
Ratio of expenses to average
net assets:
Before expense reimburse-
ment....................... 1.20% 1.23% 1.60%/2/
After expense reimbursement. 1.00% 1.00% 1.00%/2/
Ratio of net investment income
to average net assets:
Before expense reimburse-
ment....................... 1.67% 1.93% 1.28%/2/
After expense reimbursement. 1.87% 2.16% 1.88%/2/
Portfolio Turnover Rate......... 20% 14% 12%
Average commission rate paid per
share $ 0.0219 N/A N/A
</TABLE>
- ----------
/1/Commencement of investment operations.
/2/Annualized.
N/A--Not Applicable

2
<PAGE>

INVESTMENT OBJECTIVE AND POLICIES

INVESTMENT OBJECTIVE

The Non-U.S. Equity Fund's investment objective is to maximize total return,
consisting of capital appreciation and current income by investing primarily
in the equity securities of non-U.S. issuers. The investment objective is
fundamental and may not be changed without a vote of the holders of the
majority of the voting securities of the Series. Under normal conditions, at
least 65% of the Series' total assets will be invested in equity securities of
issuers in at least three countries other than the United States. In seeking
to achieve its investment objective while controlling risk, the Series may
invest in a wide range of equity securities, including: American, European and
Global Depository Receipts; common and preferred stock; debt securities
convertible into or exchangeable for common stock; and securities such as
warrants or rights that are convertible into common stock. Unless otherwise
stated in this Prospectus or in the Statement of Additional Information, the
Series' investment policies are not fundamental and may be changed without
shareholder approval. There can be no assurance that the Series will achieve
its investment objective. The Series may engage in futures, options and
currency transactions for hedging and other permissible purposes, as more
fully described in "Investment Considerations and Risks" and Appendix A in
this Prospectus, and in the Statement of Additional Information.

The Series is a diversified portfolio that seeks to achieve its objective by
investing primarily in the equity securities of non-U.S. issuers. The
benchmark for the Series is the Morgan Stanley Capital International ("MSCI")
Non-U.S. Equity (Free) Index (the "Benchmark"). The Benchmark is a market
driven broad based index which includes non-U.S. equity markets in terms of
capitalization and performance. From time to time, Brinson Partners, Inc.
("Brinson Partners" or the "Advisor") may substitute securities in an
equivalent index when it believes that such securities in the index more
accurately reflect the relevant international market. Although it may invest
anywhere in the world, it is expected that the Series' assets will be
primarily invested in the equity markets included in the MSCI Non-U.S. Equity
(Free) Index.

The Series does not intend to concentrate its investments in a particular
industry. The Series does not intend to issue senior securities, as defined in
the Investment Company Act of 1940, as amended (the "Act"), except that the
Series may engage in borrowing activities as defined in Appendix A in this
Prospectus and in the Statement of Additional Information. The Series'
investment objective and policies concerning portfolio lending, borrowing, the
issuance of senior securities and concentration are "fundamental," which means
that they may not be changed without the affirmative vote of the holders of a
majority of the Series' outstanding voting securities (as defined in the Act).

INVESTMENT CONSIDERATIONS AND RISKS

The following provides information about the types of instruments in which
the Non-U.S. Equity Fund may invest, strategies employed by Brinson Partners
in its attempt to attain the Series' investment objective and a summary of
related risks. Shareholders should understand that all investments involve
risks and there can be no guarantee against loss resulting from an investment
in the Series, nor can there be any assurance that the Series will be able to
attain its investment objective. A complete list of the Series' investment
restrictions and more detailed information about the Series' investments are
contained in Appendix A to this Prospectus and in the Statement of Additional
Information.

EQUITY SECURITIES--Equity securities fluctuate in value as a result of
various factors, which are often unrelated to the value of the issuer of the
securities. These fluctuations may be pronounced. Fluctuations in the value of
the Non-U.S. Equity Fund's equity investments will affect the value of its
shares and thus the Fund's total return to investors.

3
<PAGE>

FOREIGN SECURITIES AND CURRENCY CONSIDERATIONS--Investments in securities of
foreign issuers may involve greater risks than those of U.S. issuers. There is
generally less information available to the public about non-U.S. companies
and less government regulation and supervision of non-U.S. stock exchanges,
brokers and listed companies. Non-U.S. companies are not subject to uniform
global accounting, auditing and financial reporting standards, practices and
requirements. Securities of some non-U.S. companies are less liquid and their
prices more volatile than securities of comparable U.S. companies. Securities
trading practices abroad may offer less protection to investors. Settlement of
transactions in some non-U.S. markets may be delayed or may be less frequent
than in the United States, which could affect the liquidity of the Series'
portfolio. Additionally, in some non-U.S. countries, there is the possibility
of expropriation or confiscatory taxation, limitations on the removal of
securities, property or other assets of the Series, political or social
instability, or diplomatic developments which could affect U.S. investments in
those countries. Investments will be made primarily in the equity securities
of companies domiciled in developed countries. The Series intends to diversify
broadly among countries but reserves the right to invest a substantial portion
of its assets in one or more countries if economic and business conditions
warrant such investments. Brinson Partners will take these factors into
consideration in managing the Series' investments. Because the Series will
keep its books and records in U.S. dollars, the Series will be required, for
federal income tax purposes, to account for income and losses on all
transactions involving foreign currency under Section 988 of the Internal
Revenue Code of 1986, as amended, and the applicable U.S. Treasury
regulations, so that generally any component of a gain or loss attributable to
currency fluctuations results in ordinary income or loss and not capital gain
or loss.

The U.S. dollar market value of the Series' investments and of dividends and
interest earned by the Series may be significantly effected by changes in
currency exchange rates. Some currency prices may be volatile and there is the
possibility of governmental controls on currency exchange or governmental
intervention in currency markets, which could adversely affect the Series.
Although the Series may attempt to manage currency exchange rate risk, there
is no assurance that the Series will do so at an appropriate time or that it
will be able to predict exchange rates accurately. For example, if the Series
increases its exposure to a currency and that currency's price subsequently
falls, such currency management may result in increased losses to the Series.
Similarly, if the Series decreases its exposure to a currency and the
currency's price rises, the Series will lose the opportunity to participate in
the currency's appreciation. The Series will manage currency exposures
relative to the normal currency allocation and will consider return and risks
of currency exposures relative to the Benchmark.

FOREIGN CURRENCY TRANSACTIONS--To manage exposure to currency fluctuations,
the Series may alter fixed income or money market exposures, enter into
forward currency exchange contracts, buy or sell options, futures or options
on futures relating to foreign currencies and may purchase securities indexed
to currency baskets. The Series will also use these currency exchange
techniques in the normal course of business to hedge against adverse changes
in exchange rates in connection with purchases and sales of securities. Some
of these strategies may require the Series to set aside liquid assets in a
segregated custodial account to cover its obligations.

FUTURES, OPTIONS AND OTHER DERIVATIVE INSTRUMENTS--The Series may attempt to
reduce the overall level of investment risk of particular securities and
attempt to protect against adverse market movements by investing in futures,
options and other derivative instruments. A derivative instrument is commonly
defined as a financial instrument whose performance and value are derived, at
least in part, from another source, such as the performance of an underlying
asset, a specific security or an index of securities. The derivative
instruments in which the Series may invest include the purchase and writing of
options on securities (including index options) and options on foreign
currencies, investing in futures contracts for the purchase or sale of
instruments based on financial indices, including interest rate indices or
indices of U.S. or foreign government securities or equity securities
("futures contracts"), forward contracts, swaps and swap related products such
as equity index swaps, interest rate swaps, currency swaps, and related caps,
collars and floors.

4
<PAGE>

The investment in futures, options, forward contracts, swaps and similar
strategies by the Series will depend on Brinson Partners' judgment as to the
potential risks and rewards of different types of strategies, and it should be
recognized that the use of these instruments exposes the Series to additional
investment risks and transaction costs. If the Advisor incorrectly analyzes
the market conditions or does not employ the appropriate strategy with respect
to these instruments, the Series could be left in a less favorable position.
For example, gains and losses on investments in futures depend on the
Advisor's ability to predict correctly the direction of security prices,
interest rates and other economic factors. Additional risks inherent in the
use of futures, options and forward contracts include: adverse movements in
the prices of securities or currencies being hedged; the possible absence of a
liquid secondary market for any particular instrument at any time; and the
possible need to defer closing out certain hedge positions to avoid adverse
tax consequences. Options and futures can be volatile instruments and may not
perform as expected. The Series could experience losses if the prices of its
options and futures positions are poorly correlated with its other
investments. If a hedge is applied at an inappropriate time or price trends
are judged incorrectly, options and futures strategies may lower the Series'
return (i.e., options and futures may fail as hedging techniques in cases
where the price movements of the securities underlying the options and futures
do not follow the price movements of the portfolio securities subject to the
hedge). Options and futures traded on foreign exchanges generally are not
regulated by U.S. authorities and may offer less liquidity and less protection
to the Series in the event of default by the other party to the contract. The
loss from investing in futures transactions is potentially unlimited. The
Series does not intend to purchase put and call options that are traded on a
national stock exchange in an amount exceeding 5% of its net assets.

The Series may invest in derivatives for hedging purposes, to maintain
liquidity, or in anticipation of changes in the composition of its portfolio
holdings. The Series will not engage in derivative investments purely for
speculative purposes. The Series will invest in one or more derivatives only
to the extent that the instrument under consideration is judged by the Advisor
to be consistent with the Series' overall investment objective and policies.
In making such judgment, the potential benefits and risks will be considered
in relation to the Series' other portfolio investments.

Where not specified, investment limitations with respect to the Series'
derivative instruments will be consistent with the Series' existing percentage
limitations with respect to its overall investment policies and restrictions.
The risks and policies of various types of derivative investments permitted
for the Series, including options, futures and forward contracts, are
described in greater detail in Appendix A in this Prospectus, and in the
Statement of Additional Information.

MANAGEMENT OF THE TRUST

THE BOARD OF TRUSTEES

THE ADVISOR

5
<PAGE>

domestic and international investment assets since 1974 and global investment
assets since 1982. Brinson Partners has offices in Basel, London, Melbourne,
New York, Paris, Singapore, Sydney and Tokyo, in addition to its principal
office at 209 South LaSalle Street, Chicago, IL 60604-1295. Brinson Partners
is an indirect wholly-owned subsidiary of Swiss Bank Corporation ("Swiss
Bank"). Swiss Bank, with headquarters in Basel, Switzerland, is an
internationally diversified organization with operations in many aspects of
the financial services industry. Brinson Partners also serves as the
investment advisor to seven other investment companies: Brinson Relationship
Funds, which includes six investment portfolios (Series); Enterprise
Accumulation Trust; Enterprise International Growth Portfolio; Fort Dearborn
Income Securities, Inc.; Hirtle Callaghan International Trust; John Hancock
Variable Series Trust--International Balanced Portfolio; and Pace Large
Company Value Equity Investments.

Pursuant to its investment advisory agreement with the Trust on behalf of
the Series, Brinson Partners receives a monthly fee at the annual percentage
rate of the Series' average daily net assets, as described below, for
providing investment advisory services. Brinson Partners is responsible for
paying its own expenses, and has agreed to waive that portion of its advisory
fee equal to the total expenses of the Series for any fiscal year which
exceeds the permissible limits applicable to the Series in any state in which
its shares are then qualified for sale. Pursuant to its advisory agreement,
Brinson Partners is authorized, at its own expense, to obtain statistical and
other factual information and advice regarding economic factors and trends
from its foreign subsidiaries, but it does not generally receive advice or
recommendations regarding the purchase or sale of securities from such
subsidiaries.

For providing investment advisory services during the fiscal year ended June
30, 1996, the Non-U.S. Equity Fund paid Brinson Partners a monthly fee at the
annual rate of 0.80% of the Series' average daily net assets. This fee is
higher than the advisory fees paid by most other mutual funds, but is
comparable to those of other mutual funds with similar investment objectives.

PORTFOLIO MANAGEMENT

ADMINISTRATION OF THE TRUST

THE UNDERWRITER

THE ADMINISTRATOR

The Trust, on behalf of the Series, has entered into an administrative
services agreement with FPS Services, Inc. ("FPS"), 3200 Horizon Drive, King
of Prussia, PA 19406-0903, pursuant to which the administrator receives a fee
at the annual rate of 0.15% of the average daily net assets of the Trust on
the first $75 million; 0.10% on the next $75 million; 0.075% on the next $350
million; and 0.05% on the next $500 million. The Series pays

6
<PAGE>

its pro rata portion based upon its average daily net assets, but in no event
shall the Series pay less than $10,000 per year for each multiple class
portfolio. Pursuant to the agreement with FPS, maximum administration fees are
$400,000 for the initial multiple class portfolio and $60,000 per year for
each subsequent multiple class portfolio.

THE CUSTODIAN, TRANSFER AGENT AND ACCOUNTING/PRICING AGENT

Bankers Trust Company, c/o BTNY Services, Inc., 34 Exchange Place, Jersey
City, NJ 07302-1107 is custodian for the securities and cash of the Series.

FPS serves as the Series' transfer agent. As transfer agent, it maintains
the records of each shareholder's account, answers shareholder inquiries
concerning accounts, processes purchases and redemptions of the Fund's shares,
acts as dividend and distribution disbursing agent and performs other
shareholder service functions. Shareholder inquiries should be addressed to
the transfer agent at (800) 448-2430.

FPS also performs certain accounting and pricing services for the Trust,
including the daily calculation of the Fund's net asset value.

PURCHASE OF SHARES

Shares of the Non-U.S. Equity Fund may be purchased directly from the Trust
at the net asset value next determined after receipt of the order in proper
form by the transfer agent. There is no sales load in connection with the
purchase of Fund shares. The Trust reserves the right to reject any purchase
order and to suspend the offering of shares of the Fund or the Series. The
minimum initial investment for Fund shares is $100,000. Subsequent investments
for Fund shares will be accepted in minimum amounts of $2,500. The Trust
reserves the right to vary the initial investment minimum and minimums for
additional investments in the Fund at any time. In addition, Brinson Partners
may waive the minimum initial investment requirement for any investor.

Purchase orders for shares of the Non-U.S. Equity Fund which are received by
the transfer agent in proper form prior to the close of regular trading hours
(currently 4:00 p.m. Eastern time) on the New York Stock Exchange (the "NYSE")
on any day that the Fund's net asset value per share is calculated, are priced
according to the net asset value determined on that day. Purchase orders for
shares of the Fund received after the close of the NYSE on a particular day
are priced as of the time the net asset value per share is next determined.

7
<PAGE>

PURCHASES MAY BE MADE IN ONE OF THE FOLLOWING WAYS:

<TABLE>
<CAPTION>
INITIAL INVESTMENT SUBSEQUENT INVESTMENTS
------------------------------- -------------------------------
<S> <C> <C>
MINIMUM $100,000 MINIMUM $2,500
BY MAIL . Complete and sign the Account . Make your check payable
[LOGO] Application accompanying this to "Brinson Non-U.S. Equity
Prospectus. Fund."
. Make your check payable to . Enclose the remittance por-
"Brinson Non-U.S. Equity tion of your account statement
Fund." and include the amount of in-
vestment, the account name and
number.
. Mail to the address indicated . Mail to the address indicated
on on your account statement or
the Account Application. enclose in the envelope pro-
vided.
BY WIRE . Call (800) 448-2430 to ar-
[LOGO] range for a wire transaction.
. Wire federal funds within 24 . Wire federal funds to:
hours to: UNITED MISSOURI BANK KC NA
UNITED MISSOURI BANK KC NA ABA # 10-10-00695
ABA # 10-10-00695 FOR: FPS SERVICES, INC.
FOR: FPS SERVICES, INC. A/C 98-7037-071-9
A/C 98-7037-071-9 "BRINSON NON-U.S. EQUITY FUND"
"BRINSON NON-U.S. EQUITY FUND" AND INCLUDE YOUR NAME AND
AND INCLUDE YOUR NAME AND NEW ACCOUNT NUMBER.
ACCOUNT NUMBER.
. Complete and sign the Account
Application and mail to the
address
indicated immediately follow-
ing the
initial wire transaction.
BY TELEPHONE . Call (800) 448-2430 to ar- . Call (800) 448-2430 to ar-
[LOGO] range for a telephone transac- range for a telephone transac-
tion. tion.

PURCHASING BY EXCHANGES . You may open a new account by . You may purchase additional
[LOGO] making an exchange from an ex- shares by making an exchange
isting Brinson Fund class ac- from an existing Brinson Fund
count of any other Series of class account of any other Se-
the Trust. Exchanges may be ries of the Trust. Exchanges
made by mail or telephone. may be made by mail or tele-
Call (800) 448-2430 for assis- phone. Call (800) 448-2430 for
tance. assistance.
AUTOMATICALLY . Please refer to "Automatic . Please refer to "Automatic
Investment Plan" under "Ac- Investment Plan" under "Ac-
count Options" or call (800) count Options" or call (800)
448-2430 for assistance. 448-2430 for assistance.
</TABLE>

8
<PAGE>

ACCOUNT OPTIONS

<TABLE>
<CAPTION>
ACCOUNT OPTIONS INSTRUCTIONS
- --------------- --------------------------------------------------------
<S> <C> <C>
AUTOMATIC INVESTMENT . You may have money deducted directly from your
PLAN checking, savings or bank money market accounts for
investment in the Fund each month or quarter.
. Complete the Automatic Investment Plan Application,
which is available upon request by calling (800)
448-2430, and mail it to the address indicated.
. The initial account must be opened first with the
initial $100,000 minimum investment, with
subsequent minimum investments of $500 pursuant to
the Automatic Investment Plan.
. The account designated will be debited in the
specified amount, on the date indicated, and Fund
shares will be purchased. The Trust may alter or
terminate the Automatic Investment Plan at any
time.
SYSTEMATIC WITHDRAWAL . A shareholder with a minimum account of $100,000
PLAN may direct the transfer agent to send the
shareholder (or anyone the shareholder designates)
regular, monthly, quarterly or semi-annual
payments. Each payment under a Systematic
Withdrawal Plan ("SWP") must be at least $500. Such
payments are drawn from share redemptions.
. Shareholders participating in the SWP must elect to
have their dividends and distributions
automatically reinvested in additional Fund shares.
. The Trust may terminate any SWP for an account if
the value of the account falls below $50,000 as a
result of share redemptions or an exchange of
shares of a Fund for Brinson Fund class shares of
another Series of the Trust.
INDIVIDUAL RETIREMENT . An IRA is a tax-deferred retirement savings account
ACCOUNTS that may be used by an individual under age 70 1/2
who has compensation or self-employment income and
his or her unemployed spouse, or an individual who
has received a qualified distribution from his or
her employer's retirement plan.
. The minimum purchase requirement for IRAs is
$2,000.
</TABLE>

9
<PAGE>

REDEMPTION OF SHARES

Shareholders may redeem their shares of the Non-U.S. Equity Fund without
charge on any business day that the NYSE is open. Redemptions will be effected
at the net asset value per share next determined after the receipt by the
transfer agent of a redemption request meeting the requirements described
below. The Trust normally sends redemption proceeds on the next business day
but, in any event, redemption proceeds are sent within five business days of
receipt of a redemption request in proper form. Payment also may be made by
wire directly to any bank previously designated by the shareholder in an
Account Application. There is no charge for redemptions by wire. Please note
that the shareholder's bank may impose a fee for wire service. The Trust will
honor redemption requests of shareholders who recently purchased shares by
check, but will not mail the proceeds until it is reasonably satisfied that
the purchase check has cleared, which may take up to fifteen days from the
purchase date. The Trust will not accept a check endorsed over by a third-
party.

Except as noted below, redemption requests received in proper form by the
transfer agent prior to the close of regular trading hours on the NYSE on any
business day that the Non-U.S. Equity Fund's net asset value per share is
calculated are effected that day. Redemption requests received in proper form
by the transfer agent after the close of the NYSE are effected as of the time
the net asset value per share is next determined. No redemption will be
processed until the transfer agent has received a completed application with
respect to the account.

The Trust will satisfy redemption requests in cash to the fullest extent
feasible, so long as such payments would not, in the opinion of Brinson
Partners or the Board of Trustees, result in the necessity of the Series
selling assets under disadvantageous conditions and to the detriment of the
remaining shareholders of the Series. Pursuant to the Trust's Agreement and
Declaration of Trust, payment for shares redeemed may be made either in cash
or in-kind, or partly in cash and partly in-kind. However, the Trust has
elected, pursuant to Rule 18f-1 under the Act, to redeem its shares solely in
cash up to the lesser of $250,000 or 1% of the net asset value of the Series,
during any 90 day period for any one shareholder. Payments in excess of this
limit will also be made wholly in cash unless the Board of Trustees believes
that economic conditions exist which would make such a practice detrimental to
the best interests of the Series. Any portfolio securities paid or distributed
in-kind would be valued as described under "Net Asset Value." In the event
that an in-kind distribution is made, a shareholder may incur additional
expenses, such as the payment of brokerage commissions, on the sale or other
disposition of the securities received from the Series. In-kind payments need
not constitute a cross-section of the Series' portfolio. Where a shareholder
has requested redemption of all or a part of the shareholder's investment and
where the Series computes such redemption in-kind, the Series will not
recognize gain or loss for federal tax purposes on the securities used to
compute the redemption, but the shareholder will recognize gain or loss equal
to the difference between the fair market value of the securities received and
the shareholder's basis in the Fund shares redeemed.

10
<PAGE>

SHARES MAY BE REDEEMED IN ONE OF THE FOLLOWING WAYS:

<TABLE>
<S> <C>
BY MAIL . Submit a written request for redemption with:
[LOGO] . The Fund's name;
. Your Fund account number;
. The dollar amount or number of shares to be
redeemed; and
. Signatures of all persons required to sign
for transactions, exactly as their names
appear on the Account Application.
. A signature guarantee for the signature of each
person in whose name the account is registered is
required on all written redemption requests over
$5,000.
. Mail to the address indicated on the Account
Application. Questions may be directed to the
transfer agent at (800) 448-2430.
BY WIRE . This service must be elected either on the initial
[LOGO] application or subsequently arranged in writing.
. Shares may be redeemed by instructing the transfer
agent by telephone at (800) 448-2430.
. Wire redemption requests must be received by the
transfer agent before 4:00 p.m. Eastern time for
money to be wired the next business day.
BY TELEPHONE . This service must be elected either on the initial
(800) 448-2430 application or subsequently arranged in writing.
[LOGO] . Shares may be redeemed by instructing the transfer
agent by telephone at (800) 448-2430.
. Shares will be sold at the next share price
calculated after the order is received and
accepted. Share price is normally calculated at
4:00 p.m. Eastern time.
AUTOMATICALLY . Please refer to "Systematic Withdrawal Plan" under
"Account Options" or call (800) 448-2430 for
assistance.
</TABLE>
- ----------
NOTE: The Trust reserves the right to refuse a wire or telephone redemption if
it is believed advisable to do so. Procedures for redeeming shares of the
Fund by wire or telephone may be modified or terminated by the Trust at
any time.

Shares of the Fund may be redeemed through certain broker-dealers, banks and
bank trust departments which may charge the investor a transaction fee or
other fee for their services at the time of redemption. Such fees would not
otherwise be charged if the shares were redeemed directly from the Trust.

TELEPHONE TRANSACTIONS:

Shareholders who wish to initiate purchase, exchange or redemption
transactions by telephone must elect the option, as described above. With
respect to such telephone transactions, the Fund will ensure that reasonable
procedures are used to confirm that instructions communicated by telephone are
genuine (including verification of the shareholder's social security number or
mother's maiden name) and, if it does not, the Fund or the transfer agent may
be liable for any losses due to unauthorized or fraudulent transactions.
Written confirmation will be provided for all purchase, exchange and
redemption transactions initiated by telephone.

EXCHANGE OF SHARES:

11
<PAGE>

any Series of the Trust. Fund shares may be exchanged by written request or by
telephone if the shareholder has previously signed a telephone authorization
on the Account Application. The telephone exchange may be difficult to
implement during times of drastic economic or market changes. The Trust
reserves the right to restrict the frequency of, or otherwise modify,
condition, terminate or impose charges upon the exchange and/or telephone
transfer privileges upon 60 days' prior written notice to shareholders.

TRANSFER OF SECURITIES:

At the discretion of the Trust, investors may be permitted to purchase Fund
shares by transferring securities to a Series that meet the Series' investment
objective and policies. Securities transferred to the Series will be valued in
accordance with the same procedures used to determine the Fund's net asset
value at the time of the next determination of net asset value after such
acceptance. Shares issued by a Series in exchange for securities will be
issued at the net asset value per share of the Fund determined as of the same
time. All dividends, interest, subscription, or other rights pertaining to
such securities shall become the property of the Series and must be delivered
to the Series by the investor upon receipt from the issuer. Investors who are
permitted to transfer such securities will be required to recognize a gain or
loss on such transfer and pay tax thereon, if applicable, measured by the
difference between the fair market value of the securities and the investors'
basis therein. Securities will not be accepted in exchange for shares of the
Fund unless: (1) such securities are, at the time of the exchange, eligible to
be included in the Series' portfolio and current market quotations are readily
available for such securities; (2) the investor represents and warrants that
all securities offered to be exchanged are not subject to any restrictions
upon their sale by the Series under the Securities Act of 1933 or under the
laws of the country in which the principal market for such securities exists,
or otherwise; and (3) the value of any such security (except U.S. government
securities) being exchanged, together with other securities of the same issuer
owned by the Series, will not exceed 5% of the Series' net assets immediately
after the transaction.

NET ASSET VALUE

12
<PAGE>

been approved by the Board of Trustees. Futures contracts are valued at
their daily quoted settlement price on the exchange on which they are
traded. Forward foreign currency contracts are valued daily using the mean
between the bid and asked forward points added to the current exchange rate
and an unrealized gain or loss is recorded. The Series realizes a gain or
loss upon settlement of the contracts. For valuation purposes, foreign
securities initially expressed in foreign currency values will be converted
into U.S. dollar values using WM/Reuters closing spot rates as of 4:00 p.m.
London time.

Securities with a remaining maturity of 60 days or less are valued at
amortized cost, which approximates market value. Redeemable securities
issued by open-end investment companies are valued using their respective
net asset values for purchase orders placed at the close of the NYSE.
Securities (including over-the-counter options) for which market quotations
are not readily-available and other assets are valued at their fair value
as determined in good faith by or under the direction of the Trustees.

Net asset value is determined on each day that the NYSE is open, as of
the close of business of the regular session of the NYSE (currently 4:00
p.m. Eastern time). Investments and requests to exchange or redeem shares
received by the Series in proper form before such close of business are
effective, and will receive the price determined, on that day. Investment,
exchange and redemption requests received after such close of business are
effective, and will receive the share price determined, on the next
business day.

Because of time zone differences, foreign exchanges and securities markets
will usually be closed prior to the time of the closing of the NYSE and values
of foreign futures and options and foreign securities will be determined as of
the earlier closing of such exchanges and securities markets. However, events
affecting the values of such foreign securities may occasionally occur between
the earlier closings of such exchanges and securities markets and the closing
of the NYSE which will not be reflected in the computation of the net asset
value of the Series. If an event materially affecting the value of such
foreign securities occurs during such period, then such securities will be
valued at fair value as determined in good faith by or under the direction of
the Board of Trustees. Where a foreign securities market remains open at the
time that the Series values its portfolio securities, or closing prices of
securities from that market may not be retrieved because of local time
differences or other difficulties in obtaining such prices at that time, last
sale prices in such market at a point in time most practicable to timely
valuation of the Series may be used.

The Series' portfolio securities from time to time may be listed primarily
on foreign exchanges which trade on days when the NYSE is closed (such as
Saturday). As a result, the net asset value of the Fund may be significantly
affected by such trading on days when shareholders have no access to the Fund.

Each of the Series' two classes of shares will bear pro rata all of the
common expenses of the Series. The net asset value of all outstanding shares
of each class of the Series will be computed on a pro rata basis for each
outstanding share based on the proportionate participation in the Series
represented by the value of shares of that class. All income earned and
expenses incurred by the Series will be borne on a pro rata basis by each
outstanding share of a class, based on each class' proportionate participation
in the Series represented by the value of shares of such class, except that
the Brinson Fund class will not incur any of the expenses under the SwissKey
Fund class' 12b-1 Plan.

The different expenses borne by each class of shares will result in
different net asset values and dividends. The per share net asset value of the
SwissKey Fund class shares will generally be lower than that of the Brinson
Fund class shares of the Series because of the higher expenses borne by the
SwissKey Fund class shares. It is expected, however, that the net asset value
per share of the two classes will tend to converge immediately after the
payment of dividends, which will differ by approximately the amount of the
service and distribution expense differential between the classes.

13
<PAGE>

DIVIDENDS, DISTRIBUTIONS AND TAXES

DIVIDENDS

The Series will distribute its net investment income semi-annually in June
and December. The Series will distribute annually in December substantially
all of its net long-term capital gains and any undistributed net short-term
capital gains realized during the one year period commencing November 1 (or
date of the creation of the Series, if later) and ending October 31, and, at
the same time, will distribute all of its net investment income earned through
the end of December and not previously distributed as ordinary (not capital)
income.

Dividends and other distributions paid by the Series with respect to its
Brinson Fund class and SwissKey Fund class shares are calculated in the same
manner and at the same time. The per share dividends on SwissKey Fund class
shares will be lower than the per share dividends on the Brinson Fund class
shares of the Series as a result of the distribution and service fees
applicable with respect to the SwissKey Fund class shares. Both the SwissKey
Fund class and Brinson Fund class shares of the Series will share
proportionately in the investment income and expenses of the Series, except
that the per share dividends on the SwissKey Fund class shares will be lower
than the per share dividends on the Brinson Fund class shares, which will not
incur any expenses under a Rule 12b-1 Plan.

Income dividends and capital gain distributions are reinvested automatically
in additional Fund shares of the Series at net asset value, unless the
shareholder has notified the transfer agent, in writing, of the shareholder's
election to receive them in cash. Distribution options may be changed at any
time by requesting a change in writing. Any check in payment of dividends or
other distributions which cannot be delivered by the Post Office or which
remains uncashed for a period of more than one year may be reinvested in the
shareholder's account at the then current net asset value and the dividend
option may be changed from cash to reinvest. Dividends are reinvested on the
ex dividend date (the "ex date") at the net asset value determined at the
close of business on that date. Please note that shares purchased shortly
before the record date for a dividend or distribution may have the effect of
returning capital although such dividends and distributions are subject to
taxes.

TAXES

The Series has qualified, and intends to continue to qualify, for taxation
as a "regulated investment company" under the Internal Revenue Code of 1986,
as amended ("the Code"). Such qualification relieves the Series of liability
for federal income taxes to the extent the Series' earnings are distributed in
accordance with the Code. The Series is treated as a separate corporate entity
for federal tax purposes. Distributions of any net investment income and of
any net realized short-term capital gains are taxable to shareholders as
ordinary income, whether received in cash or additional shares. All
distributions may be subject to state and local taxes. Distributions of net
capital gain (the excess of net long-term capital gain over net short-term
capital loss) are taxable to shareholders as long-term capital gain regardless
of how long a shareholder may have held shares of the Series. The tax
treatment of distributions of ordinary income or capital gains will be the
same whether the shareholder reinvests the distributions or elects to receive
them in cash. A distribution will be treated as paid on December 31 of the
current calendar year if it is declared in October, November or December with
a record date in such a month and paid during January of the following
calendar year. Such distributions will be taxable to shareholders in the
calendar year in which the distributions are declared, rather than the
calendar year in which the distributions are received.

14
<PAGE>

Statement of Additional Information. The above discussion is intended for
general information only. Investors should consult their own tax advisors for
more specific information on the tax consequences of particular types of
distributions.

Redemptions of Series shares, and the exchange of shares between two Series
of the Trust, are taxable events and, accordingly, shareholders may realize
capital gains or losses on these transactions.

If more than 50% of the Series' total assets at the close of its taxable
year consists of stock or securities in foreign corporations, the Series may
elect to "pass-through" to shareholders for foreign tax credit purposes the
amount of foreign income taxes paid by the Series with respect to its direct
holdings of securities in foreign corporations. The Series will make such an
election only if it deems such election to be in the best interests of its
shareholders. If this election is made, shareholders of the Series will be
required to include in their gross incomes their pro rata share of foreign
taxes paid by the Series. However, shareholders will be able to treat their
pro rata share of foreign taxes as either a deduction (itemized deduction in
the case of individuals) or a foreign tax credit (but not both) against U.S.
income taxes on their tax returns.

GENERAL INFORMATION

ORGANIZATION

The Brinson Funds is a Delaware business trust organized pursuant to an
Agreement and Declaration of Trust, dated December 1, 1993. The Trust was
originally organized as a Maryland corporation on April 14, 1992. On December
1, 1993, the Trust reorganized as a Delaware business trust through a merger
of the Maryland corporation into the Trust. The Trust is registered under the
Act as an open-end management investment company, commonly known as a mutual
fund and consists of seven different investment portfolios or Series. The
Trustees of the Trust may establish additional Series or classes of shares
without the approval of shareholders. The Non-U.S. Equity Fund is a
diversified portfolio. The assets of the Series belong only to the Series, and
the liabilities of the Series are borne solely by the Series and no other.

DESCRIPTION OF SHARES

The Series is authorized to issue an unlimited number of shares of
beneficial interest with a $0.001 par value per share. The Board of Trustees
has the power to designate one or more Series or sub-Series/classes of shares
of beneficial interest and to classify or reclassify only unissued shares with
respect to such Series. Shares of the Series represent equal proportionate
interests in the assets of the Series only and have identical voting,
dividend, redemption, liquidation, and other rights, except that only shares
of the Series' SwissKey Fund class shall have voting rights with respect to
the Rule 12b-1 Plan relating to that class as described below. All shares
issued are fully paid and non-assessable, and shareholders have no preemptive
or other right to subscribe to any additional shares and no conversion rights.
Currently, the Trust offers seven investment portfolios or Series--Global
Fund, Global Equity Fund, Global Bond Fund, U.S. Balanced Fund, U.S. Equity
Fund, U.S. Bond Fund and Non-U.S. Equity Fund. Two classes of shares are
currently issued by the Trust for each Series, the SwissKey Fund class and the
Brinson Fund class.

15
<PAGE>

VOTING RIGHTS

Each issued and outstanding full and fractional share of the Series is
entitled to one full and fractional vote in the Series and all shares of the
Series participate equally in regard to dividends, distributions, and
liquidations with respect to the Series. Shareholders do not have cumulative
voting rights. On any matter submitted to a vote of shareholders, shares of
the Series will vote separately except when a vote of shareholders in the
aggregate is required by law, or when the Trustees have determined that the
matter affects the interests of more than one Series, in which case the
shareholders of all such Series shall be entitled to vote thereon. Only the
SwissKey Fund class shareholders may vote on matters related to the Rule 12b-1
Plan associated with that class.

SHAREHOLDER MEETINGS

The Trustees of the Trust do not intend to hold annual meetings of
shareholders of the Series. The U.S. Securities and Exchange Commission,
however, requires the Trustees to promptly call a meeting for the purpose of
voting upon the question of removal of any Trustee when requested to do so by
not less than 10% of the outstanding shareholders of the Series. In addition,
subject to certain conditions, shareholders of the Series may apply to other
Series of the Trust to communicate with other shareholders to request a
shareholders' meeting to vote upon the removal of a Trustee or Trustees.

PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS

The Trust will attempt to obtain the best overall price and most favorable
execution of transactions in portfolio securities. However, subject to
policies established by the Board of Trustees of the Trust, the Series may pay
a broker-dealer a commission for effecting a portfolio transaction for the
Series in excess of the amount of commission another broker-dealer would have
charged if Brinson Partners determines in good faith that the commission paid
was reasonable in relation to the brokerage or research services provided by
such broker-dealer, viewed in terms of that particular transaction or such
firm's overall responsibilities with respect to the clients, including the
Series, as to which it exercises investment discretion. In selecting and
monitoring broker-dealers and negotiating commissions, consideration will be
given to a broker-dealer's reliability, the quality of its execution services
on a continuing basis and its financial condition.

SHAREHOLDER REPORTS AND INQUIRIES

Shareholders will receive semi-annual reports showing portfolio investments
and other information as of December 31 and annual reports audited by
independent auditors as of June 30. Shareholders with inquiries should call
the Non-U.S. Equity Fund at (800) 448-2430 or write to The Brinson Funds, 3200
Horizon Drive, P.O. Box 61503, King of Prussia, PA 19406-0903.

PERFORMANCE INFORMATION

From time to time, performance information, such as yield or total return,
may be quoted in advertisements or in communications to present or prospective
shareholders. Performance quotations represent the Fund's past performance and
should not be considered as representative of future results. The current
yield will be calculated by dividing the net investment income earned per
share by the Fund during the period stated in the advertisement (based on the
average daily number of shares entitled to receive dividends outstanding
during the period) by the maximum net asset value per share on the last day of
the period and annualizing the result on a semi-annual compounded basis. The
Fund's total return may be calculated on an annualized and aggregate basis for
various periods (which periods will be stated in the advertisement). Average
annual return reflects the average percentage change per year in value of an
investment in the Fund. Aggregate total return reflects the total percentage
change over the stated period.

16
<PAGE>

To help investors better evaluate how an investment in the Fund might
satisfy their investment objective, advertisements regarding the Fund may
discuss yield or total return as reported by various financial publications.
Advertisements may also compare yield or total return to other investments,
indices and averages. The following publications, benchmarks, indices and
averages may be used: Lipper Mutual Fund Performance Analysis; Lipper Fixed
Income Analysis; Lipper Mutual Fund Indices; Morgan Stanley Indices; Shearson
Lehman Hutton Treasury Index; Salomon Brothers Indices; Dow Jones Composite
Average or its component indices; Standard & Poor's 500 Stock Index or its
component indices; Wilshire Indices; The New York Stock Exchange composite or
component indices; CDA Mutual Fund Report; Weisenberger--Mutual Funds Panorama
and Investment Companies; Mutual Fund Values and Mutual Fund Service Book,
published by Morningstar, Inc.; comparable portfolios managed by the Advisor;
and financial publications such as Business Week, Kiplinger's Personal
Finance, Financial World, Forbes, Fortune, Money Magazine, The Wall Street
Journal, Barron's, et al., which rate fund performance over various time
periods.

The principal value of an investment in the Fund will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their
original cost. Any fees charged by banks or other institutional investors
directly to their customer accounts in connection with investments in shares
of the Fund will not be included in the Non-U.S. Equity Fund's calculations of
yield or total return. Further information about the performance of the Fund
is included in the Fund's Annual Report dated June 30, 1996, which may be
obtained without charge by contacting the Trust at (800) 448-2430.

17
<PAGE>

APPENDIX A

INVESTMENT POLICIES AND TECHNIQUES

EQUITY SECURITIES: The Series may invest in a broad range of equity
securities of non-U.S. issuers, including common and preferred stocks,
securities such as warrants or rights that are convertible into common stock
and sponsored or unsponsored American, European and Global depository receipts
("Depository Receipts"). The issuers of unsponsored Depository Receipts are
not obligated to disclose material information in the United States. The
Series will typically invest in equity securities listed on recognized foreign
exchanges, but may also invest in securities traded in over-the-counter
markets. The Series expects its investments to emphasize large and
intermediate capitalization companies. Capitalization levels are measured
relative to specific markets, thus large and intermediate capitalization
ranges will vary country by country.

CASH AND CASH EQUIVALENTS: The Series may invest a portion of its assets in
short-term debt securities (including repurchase agreements and reverse
repurchase agreements) which may be denominated in U.S. or non-U.S.
currencies, including U.S. Treasury bills and other securities of the U.S.
government and its agencies and instrumentalities, bankers' acceptances and
certificates of deposit. The Series may also hold foreign currency, time
deposits in U.S. and foreign banks, obligations of foreign sovereignties and
companies, and Eurodollars. When unusual market conditions warrant, the Series
may make substantial temporary defensive investments in cash equivalents up to
a maximum of 100% of its net assets. Cash equivalent holdings may be
denominated in any currency (although such holdings may not constitute "cash
or cash equivalents" for tax diversification purposes). When the Series
invests for defensive purposes, it may affect the attainment of the Series'
investment objective.

FOREIGN CURRENCY TRANSACTIONS: The Series may conduct its foreign currency
exchange transactions on a spot (i.e., cash) basis at the spot rate prevailing
in the foreign currency exchange market or through entering into contracts to
purchase or sell foreign currencies at a future date (i.e., a "forward foreign
currency" contract or "forward" contract). A forward contract involves an
obligation to purchase or sell a specific currency amount 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. The Series
will convert currency on a spot basis from time to time and investors should
be aware that changes in currency exchange rates and exchange control
regulations may affect the costs of currency conversion.

The Series may enter into forward contracts for hedging purposes as well as
non-hedging purposes. For hedging purposes, the Series may enter into
contracts to deliver or receive foreign currency it will receive from or
require for its normal investment activities. It may also use contracts in a
manner intended to protect foreign currency-denominated securities from
declines in value due to unfavorable exchange rate movements. The Series may
also enter into contracts with the intent of changing the relative exposure of
the Series' portfolio of securities to different currencies to take advantage
of anticipated changes in exchange rates.

When the Series enters into forward contracts for non-hedging purposes, it
will establish a segregated account with its custodian bank in which it will
maintain cash, U.S. government securities, equity securities and/or investment
and non-investment grade debt securities equal in value to its obligations
with respect to its forward contracts for non-hedging purposes. Any assets
held in any segregated account maintained by the Series with respect to any
options, futures or forward contracts shall be liquid, unencumbered and
marked-to-market daily (any such assets held in a segregated account are
referred to in this Prospectus as "Segregated Assets").

At the maturity of a forward contract, the Series may either sell a
portfolio security and make delivery of the foreign currency, or it may retain
the security and terminate its contractual obligation to deliver the foreign

18
<PAGE>

currency by purchasing an "offsetting" contract with the same currency trader
obligating it to purchase, on the same maturity date, the same amount of the
foreign currency. The Series may realize a gain or loss from currency
transactions.

OPTIONS ON CURRENCIES: The Series also may purchase and write put and call
options on foreign currencies (traded on U.S. and foreign exchanges or over-
the-counter markets) to manage the portfolio's exposure to changes in currency
exchange rates. Call options on foreign currency written by the Series will be
"covered," which means that the Series will own an equal amount of, or an
offsetting position in, the underlying foreign currency. With respect to put
options on foreign currency written by the Series, the Series will establish a
segregated account with its custodian bank consisting of Segregated Assets
equal in value to the amount the Series would be required to deliver upon
exercise of the put.

FUTURES CONTRACTS: The Series may enter into contracts for the future
purchase or sale of securities, indices or foreign currencies. A financial
futures contract is an agreement between two parties to buy or sell a
specified debt security at a set price on a future date. An index futures
contract is an agreement to take or make delivery of an amount of cash based
on the difference between the value of the index at the beginning and at the
end of the contract period. A futures contract on a foreign currency is an
agreement to buy or sell a specified amount of a currency for a set price on a
future date. The Series may enter into futures contracts to the extent that
not more than 5% of its assets are required as futures contract margin
deposits and premiums on options and may engage in such transactions to the
extent that obligations relating to such futures transactions represent not
more than 25% of its assets.

OPTIONS: The Series may purchase and write put and call options on foreign
or U.S. securities and indices and enter into related closing transactions.
The Series may use options traded on U.S. exchanges and to the extent
permitted by law, options traded over-the-counter and on recognized foreign
exchanges. It is the position of the U.S. Securities and Exchange Commission
that over-the-counter options are illiquid. Accordingly, the Series will
invest in such options only to the extent consistent with its 15% limitation
on investments in illiquid securities.

REPURCHASE AGREEMENTS: The Series may enter into repurchase agreements with
banks or broker-dealers. Repurchase agreements are considered under the Act to
be collateralized loans by the Series to the seller secured by the securities
transferred to the Series. Repurchase agreements under the Act will be fully
collateralized by securities which the Series may invest in directly. Such
collateral will be marked-to-market daily. If the seller of the underlying
security under the repurchase agreement should default on its obligation to
repurchase the underlying security, the Series may experience delay or
difficulty in recovering its cash. To the extent that, in the meantime, the
value of the security purchased had decreased, the Series could experience a
loss. No more than 15% of the Series' net assets will be invested in illiquid
securities, including repurchase agreements which have a maturity of longer
than seven days. The Series must treat each repurchase agreement as a security
for tax diversification purposes and not as cash, a cash equivalent or as a
receivable.

BORROWING: The Series is authorized, within specified limits, to borrow
money as a temporary defensive measure for extraordinary purposes and to
pledge its assets in connection with such borrowings.

19
<PAGE>

LOANS OF PORTFOLIO SECURITIES: The Series may loan its portfolio securities
to broker-dealers and other institutional investors pursuant to agreements
requiring that the loans be continuously secured by collateral equal at all
times in value to at least the market value of the securities loaned. The
major risk to which the Series would be exposed on a loan transaction is the
risk that the borrower would become bankrupt at a time when the value of the
security goes up. Therefore, the Series will only enter into loan arrangements
after a review of all pertinent factors by Brinson Partners, subject to
overall supervision by the Board of Trustees, including the creditworthiness
of the borrowing broker-dealer or institution and then only if the
consideration to be received from such loans would justify the risk.
Creditworthiness will be monitored on an ongoing basis by Brinson Partners.

RULE 144A AND ILLIQUID SECURITIES: The Series may invest up to 15% of its
net assets in illiquid securities. Illiquid securities are those securities
that are not readily marketable, including restricted securities and
repurchase obligations that mature in more than seven days. Certain restricted
securities that may be resold to institutional investors pursuant to Rule 144A
under the Securities Act of 1933 may be determined to be liquid under
guidelines adopted by the Trust's Board of Trustees.

20
<PAGE>

---------------------
The Brinson Funds

BRINSON NON-U.S. EQUITY FUND

PROSPECTUS

OCTOBER 28, 1996

[LOGO]

Global Institutional
Asset Management
------------------------
The Brinson Funds
-------------------------------------------------------

209 South LaSalle Street . Chicago, Illinois 60604-1295

Tel: (800) 448-2430
<PAGE>

LOGO

209 South LaSalle Street
Chicago, IL 60604-1295

PROSPECTUS
OCTOBER 28, 1996

This Prospectus describes the SWISSKEY FUND CLASS of the investment
portfolios offered by The Brinson Funds (the "Trust"). The Trust is an open-
end management investment company advised by Brinson Partners, Inc., which
currently offers seven distinct investment portfolios: Global Fund, Global
Equity Fund, Global Bond Fund, U.S. Balanced Fund, U.S. Equity Fund, U.S. Bond
Fund and Non-U.S. Equity Fund (each a "Series" and collectively, the
"Series"). Each Series offers two separate classes of shares--the SwissKey
Fund class and the Brinson Fund class. The SwissKey Fund classes of the Series
are referred to as the: SwissKey Global Fund, SwissKey Global Equity Fund,
SwissKey Global Bond Fund, SwissKey U.S. Balanced Fund, SwissKey U.S. Equity
Fund, SwissKey U.S. Bond Fund and SwissKey Non-U.S. Equity Fund (each a "Fund"
and collectively, the "SwissKey Funds" or "Funds"). This prospectus pertains
only to the SwissKey Fund class shares, which do not have a sales load, but
are subject to annual 12b-1 plan expenses. The Brinson Fund class shares,
which are designed primarily for institutional investors, do not have a sales
load and are not subject to annual 12b-1 plan expenses. Further information
relating to the Brinson Fund class shares may be obtained by calling (800)
448-2430.

This Prospectus sets forth concisely the information a prospective investor
should know before investing in any of the SwissKey Funds. Investors should
read and retain this Prospectus for future reference. Additional information
about the Funds and the other class of shares of the Trust's investment
portfolios is contained in the Statement of Additional Information dated
October 28, 1996, as amended from time to time, which has been filed with the
U.S. Securities and Exchange Commission and is available upon request and
without charge from the Trust at the addresses and telephone numbers below.
The Statement of Additional Information is incorporated by reference into this
Prospectus.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE U.S.
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE U.S. SECURITIES 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.

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Annual Fund Operating Expenses............................................. 3
Financial Highlights....................................................... 5
Description of the Funds................................................... 6
Investment Objectives and Policies......................................... 6
Global Fund.............................................................. 6
Global Equity Fund....................................................... 7
Global Bond Fund......................................................... 7
U.S. Balanced Fund....................................................... 8
U.S. Equity Fund......................................................... 8
U.S. Bond Fund........................................................... 8
Non-U.S. Equity Fund..................................................... 9
Investment Considerations and Risks........................................ 9
Management of the Trust.................................................... 12
Portfolio Management....................................................... 13
Administration of the Trust................................................ 13
Purchase of Shares......................................................... 14
Account Options............................................................ 16
Redemption of Shares....................................................... 17
Net Asset Value............................................................ 20
Distribution Plan.......................................................... 21
Dividends, Distributions and Taxes......................................... 22
General Information........................................................ 23
Performance Information.................................................... 25
Appendix A................................................................. 26
</TABLE>

THIS PROSPECTUS IS NOT AN OFFERING OF THE SECURITIES HEREIN DESCRIBED IN ANY
JURISDICTION OR TO ANY PERSON TO WHOM IT IS UNLAWFUL FOR THE FUNDS TO MAKE
SUCH AN OFFER OR SOLICITATION. NO SALES REPRESENTATIVE, DEALER, OR OTHER
PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION OTHER
THAN THOSE CONTAINED IN THIS PROSPECTUS.
<PAGE>

ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)

<TABLE>
<CAPTION>
TOTAL FUND
OPERATING EXPENSES
MANAGEMENT FEES 12B-1 OTHER EXPENSES (AFTER FEE WAIVER AND/OR
(AFTER FEE WAIVER)/1/ EXPENSES/2/ (AFTER REIMBURSEMENT) EXPENSE REIMBURSEMENT)
--------------------- ----------- --------------------- ------------------------
<S> <C> <C> <C> <C>
SwissKey Global Fund.... 0.80% 0.65% 0.24% 1.69%
SwissKey Global Equity
Fund................... 0.03% 0.76% 0.97% 1.76%
SwissKey Global Bond
Fund................... 0.00% 0.49% 0.90% 1.39%
SwissKey U.S. Balanced
Fund................... 0.49% 0.50% 0.31% 1.30%
SwissKey U.S. Equity
Fund................... 0.36% 0.52% 0.44% 1.32%
SwissKey U.S. Bond Fund. 0.00% 0.47% 0.60% 1.07%
SwissKey Non-U.S. Equity
Fund................... 0.60% 0.84% 0.40% 1.84%
</TABLE>
- ----------
/1/Pursuant to the terms of the Investment Advisory Agreements between the
Trust on behalf of each Series and the Advisor, the Advisor is to receive a
monthly fee at the following annual rates for each of the Global Fund,
Global Equity Fund, Global Bond Fund, U.S. Balanced Fund, U.S. Equity Fund,
U.S. Bond Fund and Non-U.S. Equity Fund: 0.80%, 0.80%, 0.75%, 0.70%, 0.70%,
0.50% and 0.80%, respectively. Brinson Partners has agreed irrevocably to
waive its fees and reimburse certain expenses so that total operating
expenses, with the exception of 12b-1 expenses, of the SwissKey Global Fund,
SwissKey Global Equity Fund, SwissKey Global Bond Fund, SwissKey U.S.
Balanced Fund, SwissKey U.S. Equity Fund, SwissKey U.S. Bond Fund and
SwissKey Non-U.S. Equity Fund will never exceed 1.10%, 1.00%, 0.90%, 0.80%,
0.80%, 0.60% and 1.00%, respectively. Absent these fee waivers and expense
reimbursements, the total operating expenses for the SwissKey Fund class
shares of the Series for the fiscal year ended June 30, 1996 would have been
1.69%--Global Fund, 2.53%--Global Equity Fund, 2.14%--Global Bond Fund,
1.51%--U.S. Balanced Fund, 1.66%--U.S. Equity Fund, 4.10%--U.S. Bond Fund
and 2.04%--Non-U.S. Equity Fund.
/2/For purposes of this Table, "12b-1 Expenses" is comprised of an asset-based
sales charge of up to 0.65% of average daily net assets and a service fee of
0.25% of average daily net assets for SwissKey Fund class shares of each
Series. See "Distribution Plan." Although the Distribution Plan relating to
the SwissKey Funds (the "Plan") provides that the Trust may pay up to an
annual rate of 0.65% of the average daily net assets of the SwissKey Fund
class shares, plus a 0.25% service fee for each SwissKey Fund class
("distribution fees"), the Trust and the Underwriter have agreed to limit
aggregate distribution fees with respect to SwissKey Fund class shares so as
not to exceed 0.65%, 0.76%, 0.49%, 0.50%, 0.52%, 0.47% and 0.84% of the
average daily net assets of the SwissKey Global Fund, SwissKey Global Equity
Fund, SwissKey Global Bond Fund, SwissKey U.S. Balanced Fund, SwissKey U.S.
Equity Fund, SwissKey U.S. Bond Fund and SwissKey Non-U.S. Equity Fund,
respectively.

Pursuant to rules of the National Association of Securities Dealers, Inc.
("NASD"), the aggregate initial sales charges, deferred sales charges and
asset-based sales charges on shares of the Funds may not exceed 6.25% of total
gross sales, subject to certain exclusions. This 6.25% limitation is imposed
on the Fund rather than on a per shareholder basis. Therefore, long-term
shareholders of the SwissKey Funds may pay more than the economic equivalent
of the maximum front-end sales charges permitted by the NASD. This amount also
includes service fees.

3
<PAGE>

EXAMPLE: Based on the level of expenses listed above after fee waivers and
reimbursements, the total expenses relating to an investment of $1,000 would
be as follows assuming a 5% annual return and redemption at the end of each
time period.

<TABLE>
<CAPTION>
NAME OF FUND 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------ ------ ------- ------- --------
<S> <C> <C> <C> <C>
SwissKey Global Fund............................ $17 $53 $ 92 $200
SwissKey Global Equity Fund..................... $18 $55 $ 95 $207
SwissKey Global Bond Fund....................... $14 $44 $ 76 $167
SwissKey U.S. Balanced Fund..................... $13 $41 $ 71 $157
SwissKey U.S. Equity Fund....................... $13 $42 $ 72 $159
SwissKey U.S. Bond Fund......................... $11 $34 $ 59 $131
SwissKey Non-U.S. Equity Fund................... $19 $58 $100 $216
</TABLE>

The foregoing table is designed to assist the investor in understanding the
various costs and expenses that a shareholder will bear directly or
indirectly.

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

THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE INDICATED.
MOREOVER, WHILE THE EXAMPLE ASSUMES A 5% ANNUAL RETURN, A FUND'S ACTUAL
PERFORMANCE WILL VARY AND MAY RESULT IN ACTUAL RETURNS GREATER OR LESS THAN
5%.

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

THE TRUST ISSUES TWO CLASSES OF SHARES THAT INVEST IN THE SAME PORTFOLIOS OF
SECURITIES. ALTHOUGH SHAREHOLDERS OF BOTH THE SWISSKEY FUND CLASS SHARES AND
BRINSON FUND CLASS SHARES DO NOT PAY SALES CHARGES, SHAREHOLDERS OF SWISSKEY
FUND CLASS SHARES ARE SUBJECT TO DISTRIBUTION EXPENSES. THEREFORE, EXPENSES,
AND ULTIMATELY, PERFORMANCE WILL VARY BETWEEN THE CLASSES. FURTHER INFORMATION
ABOUT THE BRINSON FUND CLASS SHARES OF THE TRUST MAY BE OBTAINED BY CALLING
(800) 448-2430.

4
<PAGE>

FINANCIAL HIGHLIGHTS

The selected financial information in the following table has been audited by
the Funds' independent auditors, whose unqualified report thereon appears in
the Funds' Annual Report to Shareholders dated June 30, 1996. Additional
financial data and related notes are contained in the Funds' Annual Report to
Shareholders, which is incorporated by reference into the Statement of
Additional Information and is available without charge upon request.

FINANCIAL HIGHLIGHTS--PERIODS ENDED JUNE 30

The following table presents financial data relating to a share of beneficial
interest outstanding throughout the period presented. This information has been
derived from the Funds' financial statements.

<TABLE>
<CAPTION>
INCOME (LOSS) FROM INVESTMENT
OPERATIONS LESS DISTRIBUTIONS
------------------------------ -----------------------------
DISTRIBU-
TIONS DISTRIBU-
TOTAL FROM AND TIONS NET NET
NET NET INCOME IN EXCESS FROM AND ASSET ASSETS
NET ASSET INVEST- REALIZED FROM OF NET IN EXCESS VALUE- TOTAL END OF
VALUE- MENT AND INVEST- INVEST- OF NET TOTAL END RETURN PERIOD
BEGINNING INCOME UNREALIZED MENT MENT REALIZED DISTRIBU- OF (NON- (IN
YEAR OF PERIOD (LOSS) GAIN (LOSS) OPERATIONS INCOME GAIN TIONS PERIOD ANNUALIZED) 000S)
- ---- --------- ------- ----------- ---------- --------- --------- --------- ------ ----------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SWISSKEY GLOBAL FUND (Commencement of Operations July 31, 1995)
1996............ $11.60 0.39 1.10 1.49 (0.59) (0.32) (0.91) $12.18 13.24% $14,030
SWISSKEY GLOBAL EQUITY FUND (Commencement of Operations July 31, 1995)
1996............ $10.35 (0.01) 1.93 1.92 (0.01) (0.69) (0.70) $11.57 19.25% $33,012
SWISSKEY GLOBAL BOND FUND (Commencement of Operations July 31, 1995)
1996............ $10.56 0.78 0.15 0.93 (1.37) (0.10) (1.47) $10.02 9.17% $ 3,653
SWISSKEY U.S. BALANCED FUND (Commencement of Operations July 31, 1995)
1996............ $11.38 0.42 0.86 1.28 (0.42) (0.57) (0.99) $11.67 11.54% $ 779
SWISSKEY U.S. EQUITY FUND (Commencement of Operations July 31, 1995)
1996............ $11.94 0.10 2.92 3.02 (0.13) (0.25) (0.38) $14.58 25.70% $ 5,387
SWISSKEY U.S. BOND FUND (Commencement of Operations August 31, 1995)
1996............ $10.00 0.46 (0.13) 0.33 (0.38) (0.03) (0.41) $ 9.92 3.24% $ 636
SWISSKEY NON-U.S. EQUITY FUND (Commencement of Operations July 31, 1995)
1996............ $10.26 0.12 1.45 1.57 (0.15) (0.56) (0.71) $11.12 15.78% $ 1,262
<CAPTION>
RATIOS/SUPPLEMENTAL DATA
-------------------------------------------
RATIO OF NET
RATIO OF EXPENSES INVESTMENT INCOME
TO AVERAGE NET TO AVERAGE NET
ASSETS ASSETS
--------------------- ---------------------
AVERAGE
BEFORE AFTER BEFORE AFTER COMMISS-
EXPENSE EXPENSE EXPENSE EXPENSE PORTFOLIO ION
REIMBURSE- REIMBURSE- REIMBURSE- REIMBURSE- TURNOVER RATE PAID
YEAR MENT MENT MENT MENT RATE PER SHARE
- ---- ---------- ---------- ---------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
SWISSKEY GLOBAL FUND (Commencement of Operations July 31, 1995)
1996............ 1.69%/1/ N/A 3.04%/1/ N/A 142% $0.0291
SWISSKEY GLOBAL EQUITY FUND (Commencement of Operations July 31, 1995)
1996............ 2.53%/1/ 1.76%/1/ (0.19)%/1/ 0.58%/1/ 74% $0.0288
SWISSKEY GLOBAL BOND FUND (Commencement of Operations July 31, 1995)
1996............ 2.14%/1/ 1.39%/1/ 4.49%/1/ 5.24%/1/ 184% N/A
SWISSKEY U.S. BALANCED FUND (Commencement of Operations July 31, 1995)
1996............ 1.51%/1/ 1.30%/1/ 3.26%/1/ 3.47%/1/ 240% $0.0481
SWISSKEY U.S. EQUITY FUND (Commencement of Operations July 31, 1995)
1996............ 1.66%/1/ 1.32%/1/ 0.61%/1/ 0.95%/1/ 36% $0.0457
SWISSKEY U.S. BOND FUND (Commencement of Operations August 31, 1995)
1996............ 4.10%/1/ 1.07%/1/ 2.53%/1/ 5.56%/1/ 363% N/A
SWISSKEY NON-U.S. EQUITY FUND (Commencement of Operations July 31, 1995)
1996............ 2.04%/1/ 1.84%/1/ 0.83%/1/ 1.03%/1/ 20% $0.0219
</TABLE>
- --------
/1/Annualized
N/A=Not Applicable

5
<PAGE>

DESCRIPTION OF THE FUNDS

The investment objective of each Series is fundamental and may not be
changed without a vote of the holders of the majority of the voting securities
of the Series. Unless otherwise stated in this Prospectus or the Statement of
Additional Information, each Series' investment policies are not fundamental
and may be changed without shareholder approval. There can be no assurance
that the Series will achieve their investment objectives.

The Series do not intend to concentrate their investments in a particular
industry. The Series do not intend to issue senior securities as defined in
the Investment Company Act of 1940, as amended (the "Act"), except that each
Series may engage in borrowing activities as defined in Appendix A and in the
Statement of Additional Information. Each Series' investment objective and its
policies concerning portfolio lending, borrowing, the issuance of senior
securities and concentration are "fundamental," which means that they may not
be changed without the affirmative vote of the holders of a majority of the
Series' outstanding voting securities (as defined in the Act).

INVESTMENT OBJECTIVES AND POLICIES

GLOBAL FUND

INVESTMENT OBJECTIVE

The Global Fund's investment objective is to maximize total return,
consisting of capital appreciation and current income. The Series will attempt
to control risk while seeking to achieve its investment objective. As a global
fund, at least 65% of the Series' total assets will be invested in securities
of issuers in at least three countries, one of which may be the United States.
The Series may utilize a wide range of equity, debt and money market
securities in domestic and foreign markets, and the Series may invest in other
open-end investment companies advised by Brinson Partners, Inc. ("Brinson
Partners" or the "Advisor"). The Series may enter into repurchase agreements
and reverse repurchase agreements, and engage in futures, options and currency
transactions for hedging and other permissible purposes, as more fully
described in "Investment Consideration and Risks" and Appendix A in this
Prospectus, and in the Statement of Additional Information.

The Series is a diversified portfolio that seeks to achieve its objective by
pursuing active asset allocation strategies across global equity and fixed
income markets and active security selection within each market. These
decisions are undertaken relative to the Global Securities Markets Index (the
"Global Benchmark"), which is compiled by Brinson Partners. The Global
Benchmark consists of eight distinct asset classes representing the primary
wealth-holding public securities markets. These asset classes are U.S.
equities, non-U.S. equities, emerging markets equities, U.S. bonds, non-U.S.
bonds, emerging markets bonds, high yield bonds and cash equivalents. Each
asset class is represented in the Global Benchmark by an index compiled by an
independent data provider. In order to compile the Global Benchmark, the
Advisor determines current relative market capitalizations in the world
markets (U.S. equities, non-U.S. equities, emerging markets equities, U.S.
bonds, non-U.S. bonds, emerging markets bonds, high yield bonds and cash) and
then weights each relevant index. Based on this weighting, the Advisor
determines the return of the relative indices, applies the index weighting and
then determines the return of the Global Benchmark. From time to time, the
Advisor may substitute an equivalent index within a given asset class when it
believes that such index more accurately reflects the relevant global market.

6
<PAGE>

Series will primarily invest in fixed income markets listed in the Salomon
Brothers World Government Bond Index. The Series may invest up to 10% of its
net assets in equity and debt securities of emerging market issuers, or
securities with respect to which the return is derived from the equity or debt
securities of issuers in emerging markets.

GLOBAL EQUITY FUND

INVESTMENT OBJECTIVE

The Global Equity Fund's investment objective is to maximize total return,
consisting of capital appreciation and current income. The Series will attempt
to control risk while seeking to achieve its investment objective. As a global
fund, at least 65% of the Series' total assets will be invested in equity
securities of issuers in at least three countries, one of which may be the
United States. The Series may utilize a wide range of equity securities that
are traded on both domestic and foreign stock exchanges or, in the case of
domestic stocks, in the over-the-counter market. The Series may enter into
repurchase agreements and reverse repurchase agreements, and engage in
futures, options and currency transactions for hedging and other permissible
purposes, as more fully described in "Investment Considerations and Risks" and
Appendix A in this Prospectus, and in the Statement of Additional Information.

GLOBAL BOND FUND

INVESTMENT OBJECTIVE

The Global Bond Fund's investment objective is to maximize total return,
consisting of capital appreciation and current income. The Series will attempt
to control risk while seeking to achieve its investment objective. As a global
fund, at least 65% of the Series' total assets will be invested in debt
securities with an initial maturity of more than one year of issuers in at
least three countries, one of which may be the United States. The Series seeks
to achieve this objective by investing primarily in debt securities that may
also provide the potential for capital appreciation. The Series may enter into
repurchase agreements and reverse repurchase agreements, and may engage in
futures, options and currency transactions for hedging and other permissible
purposes, as more fully described in "Investment Considerations and Risks" and
Appendix A in this Prospectus, and in the Statement of Additional Information.
The Series is a non-diversified portfolio.

The benchmark for the Series is the Salomon Brothers World Government Bond
Index (the "Global Bond Benchmark"). The Global Bond Benchmark is a market
driven index which measures the broad global fixed income markets invested in
debt issues of U.S. and non-U.S. governments, governmental entities and
supranationals. Although it may invest anywhere in the world, it is expected
that the Series' assets will be primarily invested in fixed income markets
listed in the Global Bond Benchmark. From time to time, the Advisor

7
<PAGE>

may substitute securities in an equivalent index when it believes that such
securities in the index more accurately reflect the relevant global fixed
income securities market.

U.S. BALANCED FUND

INVESTMENT OBJECTIVE

The U.S. Balanced Fund's investment objective is to maximize total return,
consisting of capital appreciation and current income. The Series will attempt
to control risk while seeking to achieve its investment objective. Under
normal circumstances, the Series will invest at least 25% of its net assets in
fixed income securities. The Series may utilize a wide range of equity, debt
and money market securities. The Series may also invest in equity securities,
including warrants, preferred stock and securities convertible into equity
securities. The Series may enter into repurchase agreements and reverse
repurchase agreements, and may engage in futures and options for hedging and
other permissible purposes, as more fully described in "Investment
Considerations and Risks" and Appendix A in this Prospectus, and in the
Statement of Additional Information. It is not the policy of the Series to
take unreasonable risks to obtain speculative or aggressively high returns.

The Series is a diversified portfolio that seeks to achieve its objective by
pursuing active asset allocation strategies across U.S. equity and fixed
income markets and active security selection within each market. These
decisions are undertaken relative to the U.S. Balanced Index (the "U.S.
Balanced Benchmark"), which is compiled by Brinson Partners. The U.S. Balanced
Benchmark represents a fixed composite of 65% Wilshire 5000 Index, 30% Salomon
Brothers Broad Investment Grade Bond Index and 5% 30-day Treasury Bill Index.
From time to time, the Advisor may substitute an equivalent index within a
given asset class when the Advisor believes that such new index more
accurately reflects the relevant U.S. market.

U.S. EQUITY FUND

INVESTMENT OBJECTIVE

The U.S. Equity Fund's investment objective is to maximize total return,
consisting of capital appreciation and current income, while controlling risk.
Under normal circumstances, at least 65% of the Series' total assets will be
invested in equity securities of U.S. companies. The Series is a diversified
portfolio that seeks to achieve its objective by investing in a wide range of
equity securities of U.S. companies that are traded on major stock exchanges
as well as in the over-the-counter market. The Series may engage in futures
and options for hedging and other permissible purposes, as more fully
described in "Investment Considerations and Risks" and Appendix A in this
Prospectus, and in the Statement of Additional Information. The benchmark for
the Series is the Wilshire 5000 Index (the "U.S. Equity Benchmark"). The U.S.
Equity Benchmark is a broad weighted index which includes all U.S. common
stocks. The U.S. Equity Benchmark is designed to provide a representative
indication of the capitalization and return for the U.S. equity market.

U.S. BOND FUND

INVESTMENT OBJECTIVE

8
<PAGE>

futures and options transactions for hedging and other permissible purposes,
as more fully described in "Investment Considerations and Risks" and Appendix
A in this Prospectus, and in the Statement of Additional Information.

The Series may invest in a broad range of fixed income securities, including
debt securities of the U.S. government, together with its agencies and
instrumentalities and the debt securities of U.S. corporations. A majority of
the fixed income securities in which the Series will invest will possess a
minimum rating of BBB- by Standard & Poor's Ratings Group ("S&P") or Baa3 by
Moody's Investors Services, Inc. ("Moody's") or, if unrated, will be
determined to be of comparable quality by Brinson Partners. Such securities
are considered to be investment grade. Other fixed income securities in which
the Series may invest include zero coupon securities, mortgage-backed
securities, asset-backed securities and when-issued securities. The Series may
invest a portion of its assets in short-term debt securities (including
repurchase and reverse repurchase agreements) of corporations, the U.S.
government or its agencies or instrumentalities, and banks and finance
companies.

NON-U.S. EQUITY FUND

INVESTMENT OBJECTIVE

The Non-U.S. Equity Fund's investment objective is to maximize total return,
consisting of capital appreciation and current income, by investing primarily
in the equity securities of non-U.S. issuers. Under normal conditions, at
least 65% of the Series' total assets will be invested in equity securities of
issuers in at least three countries other than the United States. In seeking
to achieve its investment objective while also controlling risk, the Series
may invest in a wide range of equity securities, including: American, European
and Global Depository Receipts, common and preferred stock; debt securities
convertible into or exchangeable for common stock; and securities such as
warrants or rights that are convertible into common stock. The Series may
engage in futures, options and currency transactions for hedging and other
permissible purposes, as more fully described in "Investment Considerations
and Risks" and Appendix A in this Prospectus, and in the Statement of
Additional Information.

The Series is a diversified portfolio that seeks to achieve its objective by
investing primarily in the equity securities of non-U.S. issuers. The
benchmark for the Series is the MSCI Non-U.S. Equity (Free) Index (the "Non-
U.S. Equity Benchmark"). The Non-U.S. Equity Benchmark is a market driven
broad based index which includes non-U.S. equity markets in terms of
capitalization and performance. From time to time, the Advisor may substitute
securities in an equivalent index when it believes that such securities in the
index more accurately reflect the relevant international market. Although it
may invest anywhere in the world, it is expected that the Series' assets will
be primarily invested in the equity markets included in the MSCI Non-U.S.
Equity (Free) Index.

INVESTMENT CONSIDERATIONS AND RISKS

The following provides information about the types of instruments in which
the Funds may invest, strategies employed by Brinson Partners in its attempt
to attain each Series' investment objective and a summary of related risks.
Shareholders should understand that all investments involve risks and there
can be no guarantee against loss resulting from an investment in the Series,
nor can there be any assurance that the Series will be able to

9
<PAGE>

attain their investment objectives. A complete list of the Series' investment
restrictions and more detailed information about the Series' investments are
contained in Appendix A in this Prospectus, and in the Statement of Additional
Information.

EQUITY SECURITIES (GLOBAL FUND, GLOBAL EQUITY FUND, U. S. BALANCED FUND,
U.S. EQUITY FUND AND NON-U.S. EQUITY FUND)--Equity securities fluctuate in
value as a result of various factors, which are often unrelated to the value
of the issuer of the securities. These fluctuations may be pronounced. The
Global Fund may invest in small market capitalization companies and in equity
securities that are considered by the Advisor to be in their post-venture
capital stage. These securities may have limited marketability, and therefore,
may be more volatile. Fluctuations in the value of the Series' equity
investments will affect the value of their shares and thus the Funds' total
returns to investors.

FIXED INCOME SECURITIES (GLOBAL FUND, GLOBAL BOND FUND, U.S. BALANCED FUND
AND U.S. BOND FUND)--All fixed income securities are subject to two types of
risks: credit risk and interest rate risk. The credit risk relates to the
ability of the issuer to meet interest or principal payments or both as they
come due. The interest rate risk refers to the fluctuations in the net asset
value of any portfolio of fixed income securities resulting from the inverse
relationship between the price and yield of fixed income securities; that is,
when the general level of interest rates rises, the prices of outstanding
fixed income securities decline, and when interest rates fall, prices rise.

FOREIGN SECURITIES AND CURRENCY CONSIDERATIONS (GLOBAL FUND, GLOBAL EQUITY
FUND, GLOBAL BOND FUND AND NON-U.S. EQUITY FUND)--Investments in securities of
foreign issuers may involve greater risks than those of U.S. issuers. There is
generally less information available to the public about non-U.S. companies
and less government regulation and supervision of non-U.S. stock exchanges,
brokers and listed companies. Non-U.S. companies are not subject to uniform
global accounting, auditing and financial reporting standards, practices and
requirements. Securities of some non-U.S. companies are less liquid and their
prices more volatile than securities of comparable U.S. companies. Securities
trading practices abroad may offer less protection to investors. Settlement of
transactions in some non-U.S. markets may be delayed or may be less frequent
than in the United States, which could affect the liquidity of the Series'
portfolios. Additionally, in some non-U.S. countries, there is the possibility
of expropriation or confiscatory taxation, limitations on the removal of
securities, property or other assets of the Series, political or social
instability, or diplomatic developments which could affect U.S. investments in
those countries. The Series intend to diversify broadly among countries, but
reserve the right to invest a substantial portion of their assets in one or
more countries if economic and business conditions warrant such investments.
Brinson Partners will take these factors into consideration in managing the
Series' investments. Because the Series will keep their books and records in
U.S. dollars, the Series will be required, for federal income tax purposes, to
account for income and losses on all transactions involving foreign currency
under Section 988 of the Internal Revenue Code of 1986, as amended, and the
applicable U.S. Treasury Regulations, so that generally any component of a
gain or loss attributable to currency fluctuations results in ordinary income
or loss and not capital gain or loss.

10
<PAGE>

Similarly, if the Series decrease their exposure to a currency, and the
currency's price rises, the Series will lose the opportunity to participate in
the currency's appreciation. Each Series will manage currency exposures
relative to the normal currency allocation and will consider return and risk
of currency exposures relative to its respective Benchmark. In addition, if
the currency in which a security is denominated appreciates against the U.S.
dollar, the dollar value of the security will increase. Conversely, a decline
in the exchange rate of the currency would adversely affect the value of the
security expressed in dollars.

FOREIGN CURRENCY TRANSACTIONS (GLOBAL FUND, GLOBAL EQUITY FUND, GLOBAL BOND
FUND AND NON-U.S. EQUITY FUND)--To manage exposure to currency fluctuations,
the Series may alter fixed income or money market exposures, enter into
forward currency exchange contracts, buy or sell options or futures relating
to foreign currencies and may purchase securities indexed to currency baskets.
The Series will also use these currency exchange techniques in the normal
course of business to hedge against adverse changes in exchange rates in
connection with purchases and sales of securities. Some of these strategies
may require the Series to set aside liquid assets in a segregated custodial
account to cover their obligations.

FUTURES, OPTIONS AND OTHER DERIVATIVE INSTRUMENTS (ALL SERIES)--The Series
may attempt to reduce the overall level of investment risk of particular
securities and attempt to protect against adverse market movements by
investing in futures, options and other derivative instruments. A derivative
instrument is commonly defined as a financial instrument whose performance and
value are derived, at least in part, from another source, such as the
performance of an underlying asset, a specific security or an index of
securities. The derivative instruments in which the Series may invest include
the purchase and writing of options on securities (including index options)
and options on foreign currencies, investing in futures contracts for the
purchase or sale of instruments based on financial indices, including interest
rate indices or indices of U.S. or foreign government securities, equity or
fixed income securities ("futures contracts"), forward contracts and swaps and
swap-related products such as equity index swaps, interest rate swaps,
currency swaps, and related caps, collars and floors.

11
<PAGE>

on investments in futures depend on the Advisor's ability to predict correctly
the direction of security prices, interest rates and other economic factors.
Additional risks inherent in the use of futures, options and forward contracts
include: adverse movements in the prices of securities or currencies being
hedged; the possible absence of a liquid secondary market for any particular
instrument at any time; and the possible need to defer closing out certain
hedge positions to avoid adverse tax consequences. Options and futures can be
volatile instruments and may not perform as expected. A Series could
experience losses if the prices of its options and futures positions are
poorly correlated with its other investments. If a hedge is applied at an
inappropriate time or price trends are judged incorrectly, options and futures
strategies may lower a Series' return (i.e., options and futures may fail as
hedging techniques in cases where the price movements of the securities
underlying the options and futures do not follow the price movements of the
portfolio securities subject to the hedge). Options and futures traded on
foreign exchanges generally are not regulated by U.S. authorities and may
offer less liquidity and less protection to a Series in the event of default
by the other party to the contract. The loss from investing in futures
transactions is potentially unlimited. A Series does not intend to purchase
put and call options that are traded on a national stock exchange in an amount
exceeding 5% of its net assets.

MANAGEMENT OF THE TRUST

THE BOARD OF TRUSTEES

THE ADVISOR

12
<PAGE>

Chicago and First Chicago Investment Advisors, N.A. Brinson Partners and its
predecessor entities have managed domestic and international investment assets
since 1974 and global investment assets since 1982. Brinson Partners has
offices in Basel, London, Melbourne, New York, Paris, Singapore, Sydney and
Tokyo, in addition to its principal office at 209 South LaSalle Street,
Chicago, IL 60604-1295. Brinson Partners is an indirect wholly-owned subsidiary
of Swiss Bank Corporation ("Swiss Bank"). Swiss Bank, with headquarters in
Basel, Switzerland, is an internationally diversified organization with
operations in many aspects of the financial services industry. Brinson Partners
also serves as the investment advisor to seven other investment companies:
Brinson Relationship Funds, which includes six investment portfolios (series);
Enterprise Accumulation Trust; Enterprise International Growth Portfolio; Fort
Dearborn Income Securities, Inc.; Hirtle Callaghan International Trust; John
Hancock Variable Series Trust--International Balanced Portfolio; and Pace Large
Company Value Equity Investments.

Pursuant to its investment advisory agreements with the Trust on behalf of
each Series, Brinson Partners receives a monthly fee at various annual
percentage rates of each Series' average daily net assets, as described below,
for providing investment advisory services. Brinson Partners is responsible for
paying its own expenses and has agreed to waive that portion of its advisory
fee equal to the total expenses of a Series for any fiscal year which exceeds
the permissible limits applicable to the Series in any state in which its
shares are then qualified for sale. Pursuant to its advisory agreements,
Brinson Partners is authorized, at its own expense, to obtain statistical and
other factual information and advice regarding economic factors and trends from
its foreign subsidiaries, but it does not generally receive advice or
recommendations regarding the purchase or sale of securities from such
subsidiaries.

For providing investment advisory services during the fiscal year ended June
30, 1996, the Global Fund, Global Equity Fund and Non-U.S. Equity Fund paid
Brinson Partners a monthly fee at the annual rate of 0.80% of each Series'
respective average daily net assets. This fee is higher than the advisory fees
paid by most other mutual funds, but is comparable to those of other mutual
funds with similar investment objectives. For the fiscal year ended June 30,
1996, the Global Bond Fund paid a monthly fee at the annual rate of 0.75%, the
U.S. Balanced Fund and U.S. Equity Fund paid a monthly fee at the annual rate
of 0.70%, and the U.S. Bond Fund paid a monthly fee at the annual rate of
0.50%, respectively, of their average daily net assets.

PORTFOLIO MANAGEMENT

Investment decisions for the Series are made by an investment management team
at Brinson Partners. No member of the investment management team is primarily
responsible for making recommendations for portfolio purchases.

ADMINISTRATION OF THE TRUST

THE UNDERWRITER

FPS Broker Services, Inc. ("FPSB"), 3200 Horizon Drive, King of Prussia, PA
19406-0903, was engaged pursuant to an agreement dated November 20, 1995, for
the limited purpose of acting as underwriter to facilitate the registration of
the shares of the Trust under state securities laws and to assist in the sale
of shares. The fee for such service is borne by the Advisor.

13
<PAGE>

THE ADMINISTRATOR

THE CUSTODIAN, TRANSFER AGENT AND ACCOUNTING/PRICING AGENT

Bankers Trust Company, c/o BTNY Services, Inc., 34 Exchange Place, Jersey
City, NJ 07302-1107 is custodian for the securities and cash of each Series.

FPS also performs certain accounting and pricing services for the Trust,
including the daily calculation of the Funds' respective net asset values.

PURCHASE OF SHARES

Shares of the Funds may be purchased directly from the Trust at the net
asset value next determined after receipt of the order in proper form by the
transfer agent. There is no sales load in connection with the purchase of Fund
shares. The Trust reserves the right to reject any purchase order and to
suspend the offering of shares of the SwissKey Fund class or the Series. The
minimum initial investment for Fund shares is $1,000. Subsequent investments
for Fund shares will be accepted in minimum amounts of $50. The Trust reserves
the right to vary the initial investment minimum and minimums for additional
investments in the Funds at any time. In addition, Brinson Partners may waive
the minimum initial investment requirement for any investor.

The SwissKey Funds will be marketed directly through the offices of Swiss
Bank. Swiss Bank has been providing investment advisory services since its
formation in 1872. Through its branches and subsidiaries, Swiss Bank conducts
securities research, provides investment advisory services and manages mutual
funds in major cities throughout the world, including Amsterdam, Basel,
Geneva, Frankfurt, Hong Kong, London, Luxembourg, Monte Carlo, New York,
Paris, Singapore, Sydney, Tokyo, Toronto and Zurich.

The SwissKey Funds may be purchased through broker-dealers having sales
agreements with FPSB, or through financial institutions having agency
agreements with FPSB. There is no sales load or charge in connection with the
purchase of shares. The SwissKey Fund class shares, however, are subject to
annual 12b-1 Plan expenses of up to a maximum of 0.90% (0.25% of which are
service fees to be paid by the Funds to FPSB, dealers or others for providing
personal service and/or maintaining shareholder accounts) of the Funds'
average daily net assets of such shares.

14
<PAGE>

Purchase orders for shares of the Funds which are received by the transfer
agent in proper form prior to the close of regular trading hours (currently
4:00 p.m. Eastern time) on the New York Stock Exchange (the "NYSE") on any day
that the Funds' net asset values per share are calculated, are priced
according to the net asset value determined on that day. Purchase orders for
shares of the Funds received after the close of the NYSE on a particular day
are priced as of the time the net asset value per share is next determined.

The Trust may accept telephone orders for Fund shares from broker-dealers or
service organizations which have been previously approved by the Trust. It is
the responsibility of such broker-dealers or service organizations to promptly
forward purchase orders and payments for the same to the Fund. Shares of the
Funds may be purchased through broker-dealers, banks and bank trust
departments which may charge the investor a transaction fee or other fee for
their services at the time of purchase. Such fees would not otherwise be
charged if the shares were purchased directly from the Trust.

The Trust reserves the right to reject any purchase order and to suspend the
offering of shares of any Fund. The minimum initial investment is $1,000.
Subsequent investments will be accepted in minimum amounts of $50. The minimum
initial investment for IRAs is $1,000 and subsequent investments will be
accepted in minimum amounts of $50 for each Fund. The Trust reserves the right
to vary the initial and additional investment minimums for each Fund.

PURCHASES MAY BE MADE IN ONE OF THE FOLLOWING WAYS:

<TABLE>
<CAPTION>
INITIAL INVESTMENT SUBSEQUENT INVESTMENTS
------------------------------- -------------------------------
<S> <C> <C>
MINIMUM $1,000 MINIMUM $50
BY MAIL . Complete and sign the Account . Make your check payable
[LOGO] Application accompanying this to "SwissKey ________ Fund."
Prospectus.
. Make your check payable to . Enclose the remittance portion of
"SwissKey ________ Fund." your account statement and
include the amount of investment, the
account name and number.
. Mail to the address indicated . Mail to the address indicated
on the Account Application. on your account statement or
enclose in the envelope provided.
BY WIRE . Call 1-800-SWISSKEY to
[LOGO] arrange for a wire
transaction.
. Wire federal funds within 24 . Wire federal funds to:
hours to: UNITED MISSOURI BANK KC NA
UNITED MISSOURI BANK KC NA ABA # 10-10-00695
ABA # 10-10-00695 FOR: FPS SERVICES, INC.
FOR: FPS SERVICES, INC. A/C 98-7037-071-9
A/C 98-7037-071-9 FBO "SWISSKEY ________ FUND"
FBO "SWISSKEY ________ FUND" AND INCLUDE YOUR NAME AND
AND INCLUDE YOUR NAME AND NEW ACCOUNT NUMBER.
ACCOUNT NUMBER.
. Complete and sign the Account
Application and mail to the
address indicated on the Account
Application immediately
following the initial wire
transaction.
</TABLE>

15
<PAGE>

<TABLE>
<CAPTION>
INITIAL INVESTMENT SUBSEQUENT INVESTMENTS
------------------------------- -------------------------------
<S> <C> <C>
BY TELEPHONE . Call 1-800-SWISSKEY to . Call 1-800-SWISSKEY to
[LOGO] arrange for a telephone arrange for a telephone
transaction. transaction.
PURCHASING BY EXCHANGES . You may open a new account by . You may purchase additional
[LOGO] making an exchange from an shares by making an exchange
existing SwissKey Fund class from an existing SwissKey Fund
account of any other Series of class account of any other
the Trust. Exchanges may be Series of the Trust. Exchanges
made by mail or telephone. may be made by mail or
Call 1-800-SWISSKEY for telephone. Call 1-800-SWISSKEY
assistance. for assistance.
AUTOMATICALLY . Please refer to "Automatic . Please refer to "Automatic
Investment Plan" under Investment Plan" under
"Account Options" or call 1- "Account Options" or call 1-
800-SWISSKEY for assistance. 800-SWISSKEY for assistance.
</TABLE>

ACCOUNT OPTIONS

<TABLE>
<CAPTION>
ACCOUNT OPTIONS INSTRUCTIONS
-------------------------- ---------------------------------------------------
<C> <S>
AUTOMATIC INVESTMENT PLAN . You may have money deducted directly from
your checking, savings or bank money market
accounts for investment in the Funds each
month or quarter.
. Complete the Automatic Investment Plan
section on the Account Application
accompanying this Prospectus and mail it to
the address indicated.
. The account must be opened first with the
initial $1,000 minimum investment with
subsequent minimum investments of $50
pursuant to the Automatic Investment Plan.
. The account designated will be debited in
the specified amount, on the date
indicated, and Fund shares will be
purchased. The Trust may alter or terminate
the Automatic Investment Plan at any time.
SYSTEMATIC WITHDRAWAL PLAN . A shareholder with a minimum account of
$10,000 may direct the transfer agent to
send the shareholder (or anyone the
shareholder designates) regular, monthly,
quarterly or semi-annual payments. Each
payment under a Systematic Withdrawal Plan
("SWP") must be at least $100. Such
payments are drawn from share redemptions.
. Shareholders participating in the SWP must
elect to have their dividends and
distributions automatically reinvested in
additional Fund shares.
. The Trust may terminate any SWP for an
account if the value of the account falls
below $5,000 as a result of share
redemptions or an exchange of shares of a
Fund for SwissKey Fund class shares of
another Series of the Trust.
</TABLE>

16
<PAGE>

REDEMPTION OF SHARES

Shares of the Funds may be redeemed without charge on any business day that
the NYSE is open. Redemptions will be effected at the net asset value per
share next determined after the receipt by the transfer agent of a redemption
request meeting the requirements described below. The Trust normally sends
redemption proceeds on the next business day but, in any event, redemption
proceeds are sent within five business days of receipt of a redemption request
in proper form. Payment also may be made by wire directly to any bank
previously designated by the shareholder in an Account Application. There is a
$9 charge for redemptions by wire. Please note that the shareholder's bank may
impose a fee for wire service. The Trust will honor redemption requests of
shareholders who recently purchased shares by check, but will not mail the
proceeds until it is reasonably satisfied that the purchase check has cleared,
which may take up to fifteen days from the purchase date. The Trust will not
accept a check endorsed over by a third-party.

Shares of the Funds may be redeemed through certain broker-dealers, banks
and bank trust departments who may charge the investor a transaction fee or
other fee for their services at the time of redemption. Such fees would not
otherwise be charged if the shares were redeemed directly from the Trust.

17
<PAGE>

MINIMUM BALANCES

Due to the relatively high cost of maintaining smaller accounts, the Trust
reserves the right to involuntarily redeem shares in any Fund account for
their then current net asset value (which will be promptly paid to the
shareholder) if at any time the total investment does not have a value of at
least $1,000 as a result of redemptions and not due to changes in the asset
value of the Series. The shareholder will be notified that the value of his or
her Fund account is less than the required minimum and will be allowed at
least 60 days to bring the value of the account up to the minimum before the
redemption is processed.

SHARES MAY BE REDEEMED IN ONE OF THE FOLLOWING WAYS:

<TABLE>
<C> <S>
BY MAIL . Submit a written request for redemption with:
[LOGO] . The Fund's name;
. Your Fund account number;
. The dollar amount or number of shares to be
redeemed; and
. Signatures of all persons required to sign for
transactions, exactly as their names appear on
the Account Application.
. A signature guarantee for the signature of each
person in whose name the account is registered
is required on all written redemption requests
over $5,000.
. Mail to the address indicated on the Account
Application. Questions may be directed to the
transfer agent at 1-800-SWISSKEY.
BY WIRE . This service must be elected either on the
[LOGO] initial application or subsequently arranged in
writing.
. Shares may be redeemed by instructing the
transfer agent by telephone at 1-800-SWISSKEY.
. Wire redemption requests must be received by the
transfer agent before 4:00 p.m. Eastern time for
money to be wired the next business day.
BY TELEPHONE 1-800-SWISSKEY . This service must be elected either on the
[LOGO] initial application or subsequently arranged in
writing.
. Shares may be redeemed by instructing the
transfer agent by telephone at 1-800-SWISSKEY.
. Shares will be sold at the next share price
calculated after the order is received and
accepted. Share price is normally calculated at
4:00 p.m. Eastern time.
AUTOMATICALLY . Please refer to "Systematic Withdrawal Plan"
under "Account Options" or call 1-800-SWISSKEY
for assistance.
</TABLE>
- ----------
NOTE: The Trust reserves the right to refuse a wire or telephone redemption if
it is believed advisable to do so. Procedures for redeeming shares of the
SwissKey Funds by wire or telephone may be modified or terminated at any
time by the Trust.

TELEPHONE TRANSACTIONS:

18
<PAGE>

reasonable procedures are used to confirm that instructions communicated by
telephone are genuine (including verification of the shareholder's social
security number or mother's maiden name) and, if they do not, the Funds or the
transfer agent may be liable for any losses due to unauthorized or fraudulent
transactions. Written confirmation will be provided for all purchase, exchange
and redemption transactions initiated by telephone.

EXCHANGE OF SHARES:

Fund shares may be exchanged for SwissKey Fund class shares of any other
Series within the Trust. Exchanges will not be permitted between the SwissKey
Fund class shares and the Brinson Fund class shares of a Series of the Trust.

Fund shares may be exchanged by written request or by telephone if the
shareholder has previously signed a telephone authorization on the Account
Application. The telephone exchange may be difficult to implement during times
of drastic economic or market changes. The Trust reserves the right to
restrict the frequency of, or otherwise modify, condition, terminate or impose
charges upon the exchange and/or telephone transfer privileges upon 60 days'
prior written notice to shareholders.

Exchanges will be made on the basis of both Funds' relative net asset values
per share. Exchanges may be made only for shares of a Series and class then
offering its shares for sale in your state of residence and are subject to the
minimum initial investment requirement. For federal income tax purposes, an
exchange of shares would be treated as if the shareholder had redeemed shares
of one Series and reinvested in shares of another Series. Gains or losses on
the shares exchanged are realized by the shareholder at the time of the
exchange. Any shareholder wishing to make an exchange should first obtain and
review a prospectus of the other Series. Requests for telephone exchanges must
be received by the transfer agent by the close of regular trading hours
(currently 4:00 p.m. Eastern time) on the NYSE on any day that the NYSE is
open for regular trading.

TRANSFER OF SECURITIES:

At the discretion of the Trust, investors may be permitted to purchase Fund
shares by transferring securities to a Series that meet the Series' investment
objective and policies. Securities transferred to a Series will be valued in
accordance with the same procedures used to determine the Fund's net asset
value at the time of the next determination of net asset value after such
acceptance. Shares issued by a Series in exchange for securities will be
issued at net asset value per share of the Fund determined as of the same
time. All dividends, interest, subscription, or other rights pertaining to
such securities shall become the property of the Series and must be delivered
to the Series by the investor upon receipt from the issuer. Investors who are
permitted to transfer such securities will be required to recognize a gain or
loss on such transfer and pay tax thereon, if applicable, measured by the
difference between the fair market value of the securities and the investors'
basis therein. Securities will not be accepted in exchange for shares of a
Fund unless: (1) such securities are, at the time of the exchange, eligible to
be included in the Series' portfolio and current market quotations are readily
available for such securities; (2) the investor represents and warrants that
all securities offered to be exchanged are not subject to any restrictions
upon their sale by the Series under the Securities Act of 1933 or under the
laws of the country in which the principal market for such securities exists,
or otherwise; and (3) the value of any such security (except U.S. government
securities) being exchanged, together with other securities of the same issuer
owned by the Series, will not exceed 5% of the Series' net assets immediately
after the transaction.

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NET ASSET VALUE

The net asset value per share for the SwissKey Fund class shares and Brinson
Fund class shares is computed by adding, with respect to each class of shares,
the value of a Series' investments, cash and other assets attributable to that
class, deducting liabilities of the class and dividing the result by the
number of shares of that class outstanding. The public offering price of the
SwissKey Fund class shares and the Brinson Fund class shares, both of which
are sold on a continuous basis, is the net asset value of that class. The
valuation of assets for determining the net asset value may be summarized as
follows:

Securities traded on securities exchanges are valued at the last
available sale price. Securities that are not traded on a particular day or
on an exchange are valued at either (a) the bid price or (b) a valuation
within the range considered best to represent value in the circumstances.
Price information on listed securities is generally taken from the closing
price on the exchange where the security is primarily traded. Valuations of
equity securities may be obtained from a pricing service and/or broker-
dealers when such prices are believed to reflect fair value of such
securities. Use of a pricing service and/or broker-dealers has been
approved by the Board of Trustees. Futures contracts are valued at their
daily quoted settlement price on the exchange on which they are traded.
Forward foreign currency contracts are valued daily using the mean between
the bid and asked forward points added to the current exchange rate and an
unrealized gain or loss is recorded. The Series realizes a gain or loss
upon settlement of the contracts. For valuation purposes, foreign
securities initially expressed in foreign currency values will be converted
into U.S. dollar values using WM/Reuters closing spot rates as of 4:00 p.m.
London time.

Net asset value is determined on each day that the NYSE is open, as of the
close of business of the regular session of the NYSE (currently 4:00 p.m.
Eastern time). Investments and requests to exchange or redeem shares received
by the Series in proper form before such close of business are effective, and
will receive the price determined, on that day. Investment, exchange and
redemption requests received after such close of business are effective, and
will receive the share price determined, on the next business day.

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Each of the Series' two classes of shares will bear pro rata all of the
common expenses of that Series. The net asset value of all outstanding shares
of each class of the Series will be computed on a pro rata basis for each
outstanding share based on the proportionate participation in the Series
represented by the value of shares of that class. All income earned and
expenses incurred by the Series will be borne on a pro rata basis by each
outstanding share of a class, based on each class' proportionate participation
in the Series represented by the value of shares of such class, except that
the Brinson Fund class will not incur any of the expenses under the SwissKey
Fund class' 12b-1 Plan.

DISTRIBUTION PLAN

The Board of Trustees of the Trust has adopted a distribution plan (the
"Plan") pursuant to Rule 12b-1 under the Act for the SwissKey Fund class
shares. The Plan permits each Series to reimburse FPSB, Brinson Partners and
others from the assets of the SwissKey Fund class shares a quarterly fee for
services and expenses incurred in distributing and promoting sales of the
SwissKey Fund class shares. These expenses include, but are not limited to,
preparing and distributing advertisements and sales literature, printing
prospectuses and reports used for sales purposes, and paying distribution and
maintenance fees to brokers, dealers and others in accordance with a selling
agreement with the Trust on behalf of the SwissKey Fund class shares or FPSB.
In addition, each Series may make payments directly to FPSB for payment to
dealers or others, or directly to others, such as banks, who assist in the
distribution of the SwissKey Funds or provide services with respect to the
SwissKey Funds.

Swiss Bank, or one of its affiliates, pursuant to a selected dealer
agreement, may provide additional compensation to securities dealers from its
own resources in connection with sales of the SwissKey Fund class of shares of
the Series.

The aggregate distribution fees paid by the Series from the assets of the
respective SwissKey Fund class shares to FPSB and others under the Plan may
not exceed 0.90% of a Fund's average daily net assets in any year (0.25% of
which are service fees to be paid by the Series to FPSB, dealers and others,
for providing personal service and/or maintaining shareholder accounts) of a
Fund's average daily net assets. The Plan provides, however, that the
aggregate distribution fees for each respective Fund shall not exceed the
following maximum amounts for the 1997 fiscal year: SwissKey Global Fund--
0.65%, SwissKey Global Equity Fund--0.76%, SwissKey Global Bond Fund--0.49%,
SwissKey U.S. Balanced Fund--0.50%, SwissKey U.S. Equity Fund--0.52%, SwissKey
U.S. Bond Fund--0.47% and SwissKey Non-U.S. Equity Fund--0.84%.

The Plan does not apply to the Brinson Fund class shares of each Series.
Those shares are not included in calculating the Plan's fees and the Plan is
not used to assist in the distribution and marketing of each Series' Brinson
Fund class shares.

The quarterly fees paid to FPSB under the Plan are subject to the review and
approval by the Trust's unaffiliated Trustees who may reduce the fees or
terminate the Plan at any time.

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All such payments made by a Series pursuant to the Plan shall be made for the
purpose of selling shares issued by the Series. Distribution expenses which are
attributable to a particular Fund will be charged against that Fund's assets.
Distribution expenses which are attributable to more than one Series will be
allocated among the Series, and, consequently, the Funds, in proportion to
their relative net assets.

DIVIDENDS, DISTRIBUTIONS AND TAXES

DIVIDENDS

The Series will distribute their net investment income semi-annually in June
and December. The Series will distribute annually in December substantially all
of their net long-term capital gains and any undistributed net short-term
capital gains realized during the one year period commencing November 1 (or
date of the creation of the Series, if later) and ending October 31, and, at
the same time, will distribute all of their net investment income earned
through the end of December and not previously distributed as ordinary (not
capital) income.

Dividends and other distributions paid by a Series with respect to its
SwissKey Fund class and Brinson Fund class shares are calculated in the same
manner and at the same time. The per share dividends on SwissKey Fund class
shares will be lower than the per share dividends on the Brinson Fund class
shares of each Series as a result of the distribution and service fees
applicable with respect to the SwissKey Fund class shares. Both the SwissKey
Fund class and Brinson Fund class shares of a Series will share proportionately
in the investment income and expenses of that Series, except that the per share
dividends on the SwissKey Fund class shares will be lower than the per share
dividends on the Brinson Fund class shares, which will not incur any expenses
under the Plan.

Income dividends and capital gain distributions are reinvested automatically
in additional Fund shares of the Series at net asset value, unless the
shareholder has notified the transfer agent, in writing, of the shareholder's
election to receive them in cash. Distribution options may be changed at any
time by requesting a change in writing. Any check in payment of dividends or
other distributions which cannot be delivered by the Post Office or which
remains uncashed for a period of more than one year may be reinvested in the
shareholder's account at the then current net asset value and the dividend
option may be changed from cash to reinvest. Dividends are reinvested on the ex
dividend date (the "ex date") at the net asset value determined at the close of
business on that date. Please note that shares purchased shortly before the
record date for a dividend or distribution may have the effect of returning
capital although such dividends and distributions are subject to taxes.

TAXES

Distributions of net capital gain (the excess of net long-term capital gain
over net short-term capital loss) are taxable to shareholders as long-term
capital gain regardless of how long a shareholder may have held shares of a
Series. The tax treatment of distributions of ordinary income or capital gains
will be the same whether the shareholder reinvests the distributions or elects
to receive them in cash. A distribution will be treated as paid on December 31
of the current calendar year if it is declared in October, November or December
with a record date in such a month and paid during January of the following
calendar year. Such distributions will be taxable to shareholders in the
calendar year in which the distributions are declared, rather than the calendar
year in which the distributions are received.

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Redemptions of Series shares, and the exchange of shares between two Series
of the Trust, are taxable events and, accordingly, shareholders may realize
capital gains or losses on these transactions.

GENERAL INFORMATION

ORGANIZATION

The Brinson Funds is a Delaware business trust organized pursuant to an
Agreement and Declaration of Trust, dated December 1, 1993. The Trust was
originally organized as a Maryland corporation on April 14, 1992. On December
1, 1993, the Trust reorganized as a Delaware business trust through a merger
of the Maryland corporation into the Trust. The Trust is registered under the
Act as an open-end management investment company, commonly known as a mutual
fund and consists of seven different Series. The Trustees of the Trust may
establish additional series or classes of shares without the approval of
shareholders. All of the Series, except the Global Bond Fund, are diversified
portfolios. The assets of each Series belong only to that Series, and the
liabilities of each Series are borne solely by that Series and no other.

DESCRIPTION OF SHARES

Each Series is authorized to issue an unlimited number of shares of
beneficial interest with a $0.001 par value per share. The Board of Trustees
has the power to designate one or more series or sub-series/classes of shares
of beneficial interest and to classify or reclassify only unissued shares with
respect to such series. Shares of each series represent equal proportionate
interests in the assets of that series only and have identical voting,
dividend, redemption, liquidation, and other rights, except that only shares
of each Series' SwissKey Fund class shall have voting rights with respect to
the Plan relating to that class as described below. All shares issued are
fully paid and non-assessable, and shareholders have no preemptive or other
right to subscribe to any additional shares and no conversion rights.
Currently, the Trust offers seven investment portfolios or series--Global
Fund, Global Equity Fund, Global Bond Fund, U.S. Balanced Fund, U.S. Equity
Fund, U.S. Bond Fund and Non-U.S. Equity Fund. Two classes of shares are
currently issued by the Trust for each Series, the SwissKey Fund class and the
Brinson Fund class.

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VOTING RIGHTS

Each issued and outstanding full and fractional share of a Series is entitled
to one full and fractional vote in the Series and all shares of each Series
participate equally with regard to dividends, distributions, and liquidations
with respect to that Series. Shareholders do not have cumulative voting rights.
On any matter submitted to a vote of shareholders, shares of each Series will
vote separately except when a vote of shareholders in the aggregate is required
by law, or when the Trustees have determined that the matter affects the
interests of more than one Series, in which case the shareholders of all such
Series shall be entitled to vote thereon. Only the SwissKey Fund class
shareholders may vote on matters related to the Plan associated with that
class.

SHAREHOLDER MEETINGS

The Trustees of the Trust do not intend to hold annual meetings of
shareholders of the Series. The U.S. Securities and Exchange Commission,
however, requires the Trustees to promptly call a meeting for the purpose of
voting upon the question of removal of any Trustee when requested to do so by
not less than 10% of the outstanding shareholders of the respective Series. In
addition, subject to certain conditions, shareholders of each Series may apply
to the Series to communicate with other shareholders to request a shareholders'
meeting to vote upon the removal of a Trustee or Trustees.

PORTFOLIO TURNOVER (GLOBAL FUND, GLOBAL BOND FUND, U.S. BALANCED FUND AND U.S.
BOND FUND)

As a result of the investment policies of the Global Fund, Global Bond Fund,
U.S. Balanced Fund and U.S. Bond Fund, their portfolio turnover rates may
exceed 100%. High portfolio turnover (over 100%) may involve correspondingly
greater brokerage commissions and other transaction costs, which will be borne
directly by the Series and ultimately by the Series' shareholders. In addition,
high portfolio turnover may result in increased short-term capital gains,
which, when distributed to shareholders, are treated as ordinary income.

PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS

The Trust will attempt to obtain the best overall price and most favorable
execution of transactions in portfolio securities. However, subject to policies
established by the Board of Trustees of the Trust, a Series may pay a broker-
dealer a commission for effecting a portfolio transaction for the Series in
excess of the amount of commission another broker-dealer would have charged if
Brinson Partners determines in good faith that the commission paid was
reasonable in relation to the brokerage or research services provided by such
broker-dealer, viewed in terms of that particular transaction or such firm's
overall responsibilities with respect to the clients, including the Series, as
to which it exercises investment discretion. In selecting and monitoring
broker-dealers and negotiating commissions, consideration will be given to a
broker-dealer's reliability, the quality of its execution services on a
continuing basis and its financial condition.

SHAREHOLDER REPORTS AND INQUIRIES

Shareholders will receive semi-annual reports showing portfolio investments
and other information as of December 31 and annual reports audited by
independent auditors as of June 30. Shareholders with inquiries should call the
SwissKey Funds at 1-800-SWISSKEY or write to The SwissKey Funds, 3200 Horizon
Drive, P.O. Box 61503, King of Prussia, PA 19406-0903.

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PERFORMANCE INFORMATION

To help investors better evaluate how an investment in the SwissKey Funds
might satisfy their investment objectives, advertisements regarding the Funds
may discuss yield or total return as reported by various financial
publications. Advertisements may also compare yield or total return to other
investments, indices and averages. The following publications, benchmarks,
indices and averages may be used: Lipper Mutual Fund Performance Analysis;
Lipper Fixed Income Analysis; Lipper Mutual Fund Indices; Morgan Stanley
Indices; Shearson Lehman Hutton Treasury Index; Salomon Brothers Indices; Dow
Jones Composite Average or its component indices; Standard & Poor's 500 Stock
Index or its component indices; Wilshire Indices; The New York Stock Exchange
composite or component indices; CDA Mutual Fund Report; Weisenberger--Mutual
Funds Panorama and Investment Companies; Mutual Fund Values and Mutual Fund
Service Book, published by Morningstar, Inc.; comparable portfolios managed by
the Advisor; and financial publications, such as Business Week, Kiplinger's
Personal Finance, Financial World, Forbes, Fortune, Money Magazine, The Wall
Street Journal, Barron's, et al., which rate fund performance over various
time periods.

The principal value of an investment in the Funds will fluctuate, so that an
investor's shares, when redeemed, may be worth more or less than their
original cost. Any fees charged by banks or other institutional investors
directly to their customer accounts in connection with investments in shares
of the Funds will not be included in the SwissKey Funds' calculations of yield
or total return. Further information about the performance of the Funds is
included in the Funds' Annual Report dated June 30, 1996, which may be
obtained without charge by contacting the Trust at 1-800-SWISSKEY.

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APPENDIX A

INVESTMENT POLICIES AND TECHNIQUES

EQUITY SECURITIES (GLOBAL FUND, GLOBAL EQUITY FUND, U.S. BALANCED FUND, U.S.
EQUITY FUND AND NON-U.S. EQUITY FUND): The Series may invest in a broad range
of equity securities of U.S. and non-U.S. issuers, including common stocks of
companies or closed-end investment companies, preferred stocks, debt
securities convertible into or exchangeable for common stock, securities such
as warrants or rights that are convertible into common stock and sponsored or
unsponsored American, European and Global depository receipts ("Depository
Receipts"). The issuers of unsponsored Depository Receipts are not obligated
to disclose material information in the United States. The Series expect their
U.S. equity investments to emphasize large and intermediate capitalization
companies, although the Global Fund may also invest in small capitalization
equity markets. The equity markets in the non-U.S. component of the Series
will typically include available shares of larger capitalization companies.
Capitalization levels are measured relative to specific markets, thus large,
intermediate and small capitalization ranges vary country by country. The
Global Fund may invest in equity securities of companies considered by the
Advisor to be in their post-venture capital stage, or "post-venture capital
companies." A post-venture capital company is a company that has received
venture capital financing either (a) during the early stages of the company's
existence or the early stages of the development of a new product or service,
or (b) as part of a restructuring or recapitalization of the company. The
Global Fund also may invest in open-end investment companies advised by
Brinson Partners, in equity securities of issuers in emerging markets and in
securities with respect to which the return is derived from the equity
securities of issuers in emerging markets.

FIXED INCOME SECURITIES (GLOBAL FUND, GLOBAL BOND FUND, U.S. BALANCED FUND
AND U.S. BOND FUND): The Series may invest in a broad range of fixed income
securities of U.S. and non-U.S. issuers, including governments and
governmental entities, supranational issuers as well as corporations and other
business organizations. The Series may purchase U.S. dollar denominated
securities that reflect a broad range of investment maturities, qualities and
sectors. A majority of the fixed income securities in which the Series will
invest will possess a minimum rating of BBB- by S&P or Baa3 by Moody's or, if
unrated, will be determined to be of comparable quality by Brinson Partners.
Such securities are considered to be investment grade. While securities rated
BBB- or Baa3 are regarded as having an adequate capacity to pay principal and
interest, such bonds lack outstanding investment characteristics and, in fact,
have speculative characteristics; and changes in economic conditions or other
circumstances are more likely to lead to a weakened capacity to make principal
and interest payments than is the case with higher rated bonds. Securities
rated lower than BBB- by S&P and Baa3 by Moody's are classified as non-
investment grade securities (commonly referred to as "junk bonds"), carry a
higher degree of risk and are considered to be speculative by the major credit
rating agencies. Each Series currently intends to limit its aggregate
investment in non-investment grade debt securities of its U.S. and non-U.S.
dollar denominated fixed income assets to no more than 5% of its net assets.
To the extent that a security held by a Series is downgraded to below
investment grade, the Series will dispose of that or another non-investment
grade security so that no more than 5% of its assets will be invested in below
investment grade securities. Other fixed income securities in which the Series
may invest include zero coupon securities, mortgage-backed securities, asset-
backed securities and when-issued securities.

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Economic Community, the European Coal and Steel Community, the European
Investment Bank, the Inter-American Development Bank, the Export-Import Bank
and the Asian Development Bank.

CASH AND CASH EQUIVALENTS (ALL SERIES): The Series may invest a portion of
their assets in short-term debt securities (including repurchase agreements
and reverse repurchase agreements) of corporations, the U.S. government and
its agencies and instrumentalities and banks and finance companies, which may
be denominated in any currency. When unusual market conditions warrant, a
Series may make substantial temporary defensive investments in cash
equivalents up to a maximum of 100% of its net assets. Cash equivalent
holdings may be in any currency (although such holdings may not constitute
"cash or cash equivalents" for tax diversification purposes under the Code).
When a Series invests for defensive purposes, it may affect the attainment of
the Series' investment objective.

ZERO COUPON SECURITIES (GLOBAL FUND, GLOBAL BOND FUND, U.S. BALANCED FUND
AND U.S. BOND FUND): Zero coupon securities are debt obligations which do not
entitle the holder to any periodic payments of interest prior to maturity or a
specified date when the securities begin paying current interest (the "cash
payment date") and, therefore, are issued and traded at a discount from their
value at maturity or par value. Such bonds carry an additional risk in that,
unlike bonds which pay interest throughout the period to maturity, a Series
investing in zero coupon securities will realize no cash until the cash
payment date and, if the issuer defaults, a Series may obtain no return at all
on its investment. The market price of zero coupon securities generally is
more volatile than the market price of securities that pay interest
periodically and are likely to be more responsive to changes in interest rates
than non-zero coupon securities having similar maturities and credit
qualities. For federal tax purposes, the Series will be required to include in
income daily portions of original issue discount accrued and to distribute the
same to shareholders annually, even if no payment is received before the
distribution date.

MORTGAGE- AND ASSET-BACKED SECURITIES (GLOBAL FUND, GLOBAL BOND FUND, U.S.
BALANCED AND U.S. BOND FUND): Mortgage-backed securities represent direct or
indirect participations in, or are secured by and payable from, pools of
mortgage loans secured by real property, and include single- and multi-class
pass-through securities and collateralized mortgage obligations. These
securities may be issued or guaranteed by agencies or instrumentalities of the
U.S. government. Other mortgage-backed securities are issued by private
issuers, generally originators of and investors in mortgage loans, including
savings associations, mortgage bankers, commercial banks, investment bankers
and special purpose entities (collectively, "private lenders"). Mortgage-
backed securities issued by private lenders may be supported by pools of
mortgage loans or other mortgage-backed securities that are guaranteed,
directly or indirectly, by the U.S. government or one of its agencies or
instrumentalities, or they may be issued without any governmental guarantee of
the underlying mortgage assets but with some form of non-governmental credit
enhancement.

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The yield characteristics of mortgage- and asset-backed securities differ
from those of traditional debt obligations. Among the principal differences
are that interest and principal payments are made more frequently on mortgage-
and asset-backed securities, usually monthly, and that principal may be
prepaid at any time because the underlying mortgage loans or other assets
generally may be prepaid at any time. As a result, the rate of return on these
securities may be affected by prepayments of principal on the underlying
loans, which generally increase as interest rates decline. As a result, if a
Series purchases these securities at a premium, a prepayment rate that is
faster than expected will reduce yield to maturity, while a prepayment rate
that is slower than expected will have the opposite effect of increasing yield
to maturity. Conversely, if a Series purchases these securities at a discount,
a prepayment rate that is faster than expected will increase yield to
maturity, while a prepayment rate that is slower than expected will reduce
yield to maturity. Accelerated prepayments on securities purchased by a Series
at a premium also impose a risk of loss of principal because the premium may
not have been fully amortized at the time the principal is prepaid in full. In
addition, like other debt securities, the values of mortgage-related
securities, including government and government-related mortgage pools,
generally will fluctuate in response to market interest rates. The market for
privately issued mortgage- and asset-backed securities is smaller and less
liquid than the market for government sponsored mortgage-backed securities.

WHEN-ISSUED SECURITIES (GLOBAL FUND, GLOBAL BOND FUND, U.S. BALANCED AND
U.S. BOND FUND): The Series may purchase securities on a "when-issued" basis
for payment and delivery at a later date. The price is generally fixed on the
date of commitment to purchase. During the period between purchase and
settlement, no interest accrues to a Series. At the time of settlement, the
market value of the security may be more or less than the purchase price. The
Series will establish a segregated account consisting of cash, U.S. government
securities, equity securities and/or investment and non-investment grade debt
securities in an amount equal to the amounts of their when-issued securities.
The cash, U.S. government securities, equity securities, investment or non-
investment grade debt securities and other assets held in any segregated
account maintained by the Series with respect to any when-issued securities,
options, futures, forward contracts or other derivative transactions shall be
liquid, unencumbered and marked-to-market daily (the assets held in a
segregated account are referred to in this Prospectus as "Segregated Assets").

FOREIGN CURRENCY TRANSACTIONS (GLOBAL FUND, GLOBAL EQUITY FUND, GLOBAL BOND
FUND AND NON-U.S. EQUITY FUND): The Series may conduct their foreign currency
exchange transactions on a spot (i.e., cash) basis at the spot rate prevailing
in the foreign currency exchange market or through entering into contracts to
purchase or sell foreign currencies at a future date (i.e., a "forward foreign
currency" contract or "forward" contract). A forward contract involves an
obligation to purchase or sell a specific currency amount 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. The Series
will convert currency on a spot basis from time to time and investors should
be aware that changes in currency exchange rates and exchange control
regulations may affect the costs of currency conversion.

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OPTIONS ON CURRENCIES (GLOBAL FUND, GLOBAL EQUITY FUND, GLOBAL BOND FUND AND
NON-U.S. EQUITY FUND): The Series also may purchase and write put and call
options on foreign currencies (traded on U.S. and foreign exchanges or over-
the-counter markets) to manage the respective portfolio's exposure to changes
in currency exchange rates. Call options on foreign currency written by a
Series will be "covered," which means that the Series will own an equal amount
of, or an offsetting position in, the underlying foreign currency. With respect
to put options on foreign currency written by a Series, the Series will
establish a segregated account with its custodian bank consisting of Segregated
Assets equal in value to the amount the Series would be required to deliver
upon exercise of the put.

FUTURES CONTRACTS (ALL SERIES): The Series may enter into contracts for the
future purchase or sale of securities and indices. The Global Funds and the
Non-U.S. Equity Fund also may enter into contracts for the future purchase or
sale of foreign currencies. A financial futures contract is an agreement
between two parties to buy or sell a specified debt security at a set price on
a future date. An index futures contract is an agreement to take or make
delivery of an amount of cash based on the difference between the value of the
index at the beginning and at the end of the contract period. A futures
contract on a foreign currency is an agreement to buy or sell a specified
amount of a currency for a set price on a future date. A Series may enter into
a futures contract to the extent that not more than 5% of its assets are
required as futures contract margin deposits and its obligations relating to
such futures transactions represent not more than 25% of the Series' assets.

The Global Fund, Global Equity Fund, Global Bond Fund and Non-U.S. Equity
Fund will enter into such futures transactions on domestic exchanges and, to
the extent such transactions have been approved by the Commodity Futures
Trading Commission for sale to customers in the United States, on foreign
exchanges.

OPTIONS (ALL SERIES): The Series may purchase and write put and call options
on foreign or U.S. securities and indices and enter into related closing
transactions. A Series' may use options traded on U.S. exchanges and, to the
extent permitted by law, options traded over-the-counter and recognized foreign
exchanges. It is the position of the U.S. Securities and Exchange Commission
that over-the-counter options are illiquid. Accordingly, a Series will invest
in such options only to the extent consistent with its 15% limit on investment
in illiquid securities.

REPURCHASE AGREEMENTS (ALL SERIES): The Series may enter into repurchase
agreements with banks or broker-dealers. Repurchase agreements are considered
under the Act to be collateralized loans by a Series to the seller secured by
the securities transferred to the Series. Repurchase agreements under the Act
will be fully collateralized by securities which the Series may invest in
directly. Such collateral will be marked-to-market daily. If the seller of the
underlying security under the repurchase agreement should default on its
obligation to repurchase the underlying security, the Series may experience
delay or difficulty in recovering its cash. To the extent that, in the
meantime, the value of the security purchased had decreased, the Series could
experience a loss. No more than 15% of a Series' net assets will be invested in
illiquid securities, including repurchase agreements which have a maturity of
longer than seven days. The Series must treat each repurchase agreement as a
security for tax diversification purposes and not as cash, a cash equivalent or
as a receivable.

BORROWING (ALL SERIES): Each Series is authorized, within specified limits,
to borrow money as a temporary defensive measure for extraordinary purposes and
to pledge its assets in connection with such borrowings.

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LOANS OF PORTFOLIO SECURITIES (ALL SERIES): Each Series may loan its
portfolio securities to broker-dealers and other institutional investors
pursuant to agreements requiring that the loans be continuously secured by
collateral equal at all times in value to at least the market value of the
securities loaned. The major risk to which a Series would be exposed on a loan
transaction is the risk that the borrower would become bankrupt at a time when
the value of the security goes up. Therefore, a Series will only enter into
loan arrangements after a review of all pertinent factors by Brinson Partners,
subject to overall supervision by the Board of Trustees, including the
creditworthiness of the borrowing broker-dealer or institution and then only
if the consideration to be received from such loans would justify the risk.
Creditworthiness will be monitored on an ongoing basis by Brinson Partners.

RULE 144A AND ILLIQUID SECURITIES (ALL SERIES): Each Series may invest up to
15% of its net assets in illiquid securities. Illiquid securities are those
securities that are not readily marketable, including restricted securities
and repurchase obligations that mature in more than seven days. Certain
restricted securities that may be resold to institutional investors pursuant
to Rule 144A under the Securities Act of 1933 may be determined to be liquid
under guidelines adopted by the Trust's Board of Trustees.

30
<PAGE>

[LOGO]

PROSPECTUS
OCTOBER 28, 1996

SWISSKEY GLOBAL FUND
SWISSKEY GLOBAL EQUITY FUND
SWISSKEY GLOBAL BOND FUND
SWISSKEY U.S. BALANCED FUND
SWISSKEY U.S. EQUITY FUND
SWISSKEY U.S. BOND FUND
SWISSKEY NON-U.S. EQUITY FUND

[LOGO]

For Additional Information about
SwissKey Funds, call:
1-800-SWISSKEY
<PAGE>

THE BRINSON FUNDS

[LOGO OF BRINSON FUNDS]

GLOBAL FUND U.S. EQUITY FUND
GLOBAL EQUITY FUND U.S. BOND FUND
GLOBAL BOND FUND NON-U.S. EQUITY FUND
U.S. BALANCED FUND

STATEMENT OF ADDITIONAL INFORMATION

October 28, 1996

The Brinson Funds (the "Trust") currently offers seven separate series, each
with its own investment objective and policies. The Trust also offers two
classes of shares for each series - the Brinson Fund class and the SwissKey Fund
class. Information concerning the Brinson Fund class of each series is provided
in the following three separate Prospectuses: the Brinson Global Fund, Brinson
Global Equity Fund and Brinson Global Bond Fund Prospectus; the Brinson U.S.
Balanced Fund, Brinson U.S. Equity Fund and Brinson U.S. Bond Fund Prospectus;
and the Brinson Non-U.S. Equity Fund Prospectus, each dated October 28, 1996.
Information concerning the SwissKey Fund class of each series is included in a
separate Prospectus for the SwissKey Funds dated October 28, 1996. This
Statement of Additional Information is not a Prospectus, but should be read in
conjunction with the current Prospectuses of the Trust. Much of the information
contained herein expands upon subjects discussed in the Prospectuses. No
investment in shares should be made without first reading the applicable
Prospectus. A copy of each Prospectus may be obtained without charge from the
Trust at the addresses and telephone numbers below.

UNDERWRITER: ADVISOR:

FPS Broker Services, Inc. Brinson Partners, Inc.
3200 Horizon Drive 209 South LaSalle Street
P.O. Box 61503 Chicago, IL 60604-1295
King of Prussia, PA 19406-0903 (800) 448-2430 (Brinson Fund class)
(800) 448-2430 (Brinson Fund class) 1-800-SWISSKEY (SwissKey Fund class)
1-800-SWISSKEY (SwissKey Fund class)
<PAGE>

TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
THE BRINSON FUNDS..................................................................................
INVESTMENT STRATEGIES..............................................................................
INVESTMENTS RELATING TO ALL FUNDS.................................................................
Repurchase Agreements...........................................................................
Reverse Repurchase Agreements..................................................................
Borrowing......................................................................................
Loans of Portfolio Securities..................................................................
Swaps..........................................................................................
Futures........................................................................................
Options........................................................................................
Index Options..................................................................................
Special Risks of Options on Indices............................................................
Rule 144A Securities...........................................................................
Other Investments..............................................................................
INVESTMENTS RELATING TO THE GLOBAL FUNDS AND THE NON-U.S. EQUITY FUND..............................
Foreign Securities.............................................................................
Forward Foreign Currency Contracts.............................................................
Options on Foreign Currencies..................................................................
INVESTMENTS RELATING TO THE GLOBAL FUND, GLOBAL BOND FUND, U.S. BALANCED FUND AND U.S. BOND FUND...
Lower Grade Debt Securities...................................................................
Convertible Securities........................................................................
When-Issued Securities........................................................................
Mortgage-Backed Securities and Mortgage Pass-Through Securities...............................
Collateralized Mortgage Obligations ("CMOs") and Real Estate Mortgage.........................
Investment Conduits ("REMICs")...........................................................
Other Mortgage-Backed Securities..............................................................
Asset-Backed Securities.......................................................................
Zero Coupon Securities........................................................................
INVESTMENTS RELATING TO THE GLOBAL FUND............................................................
Emerging Markets Investments..................................................................
Risks of Investing in Emerging Markets........................................................
Investments in Affiliated Investment Companies...............................................
INVESTMENT RESTRICTIONS............................................................................
MANAGEMENT OF THE TRUST............................................................................
Trustees and Officers.........................................................................
Compensation Table............................................................................
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES................................................
INVESTMENT ADVISORY AND OTHER SERVICES.............................................................
Advisor........................................................................................
Administrator...................................................................................
Underwriter.....................................................................................
Distribution Plan...............................................................................
Code of Ethics..................................................................................
PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS...................................................
Portfolio Turnover..............................................................................
SHARES OF BENEFICIAL INTEREST......................................................................
PURCHASES..........................................................................................
Exchanges of Shares.............................................................................
Net Asset Value.................................................................................
REDEMPTIONS........................................................................................
Taxation........................................................................................
</TABLE>
<PAGE>

<TABLE>
<S> <C>
PERFORMANCE CALCULATIONS.....................................................................
Total Return..............................................................................
Yield.....................................................................................
FINANCIAL STATEMENTS.........................................................................
CORPORATE DEBT RATINGS --- APPENDIX A........................................................
</TABLE>
<PAGE>

THE BRINSON FUNDS

The Brinson Funds (the "Trust"), 209 South LaSalle Street, Chicago, Illinois
60604-1295, is an open-end management investment company which currently offers
shares of seven series representing separate portfolios of investments: Global
Fund, Global Equity Fund, Global Bond Fund, U.S. Balanced Fund, U.S. Equity
Fund, U.S. Bond Fund and Non-U.S. Equity Fund (collectively referred to as the
"Series," or individually as a "Series"). The Global Fund, Global Equity Fund
and Global Bond Fund are referred to herein collectively as the "Global Funds"
or individually as the "Global Fund;" the U.S. Balanced Fund, U.S. Equity Fund
and U.S. Bond Fund are referred to herein as the "U.S. Funds;" and the Non-U.S.
Equity Fund is referred to herein as the "Non-U.S. Equity Fund." The Trust
currently offers two classes of shares for each Series. The Brinson Fund class
shares of the Series are as follows: Brinson Global Fund, Brinson Global Equity
Fund, Brinson Global Bond Fund, Brinson U.S. Balanced Fund, Brinson U.S. Equity
Fund, Brinson U.S. Bond Fund, and Brinson Non-U.S. Equity Fund. The SwissKey
Fund class shares of the Series are as follows: SwissKey Global Fund, SwissKey
Global Equity Fund, SwissKey Global Bond Fund, SwissKey U.S. Balanced Fund,
SwissKey U.S. Equity Fund, SwissKey U.S. Bond Fund and SwissKey Non-U.S.
Equity Fund. The Brinson Fund class shares of each Series have no sales charges
and are not subject to annual 12b-1 plan expenses. The SwissKey Fund class
shares of each Series have no sales charges but are subject to annual 12b-1
expenses to a maximum of 0.90% for the respective Series.

INVESTMENT STRATEGIES

The following discussion of investment techniques and instruments supplements
and should be read in conjunction with the investment objectives and policies
set forth in the Prospectuses of the Funds. The investment practices described
below, except for the discussion of portfolio loan transactions and borrowing,
are not fundamental and may be changed by the Board of Trustees without the
approval of the shareholders.

INVESTMENTS RELATING TO ALL FUNDS

The following discussion applies to all Series.

REPURCHASE AGREEMENTS
- ---------------------

When a Series enters into a repurchase agreement, it purchases securities from a
bank or broker-dealer which simultaneously agrees to repurchase the securities
at a mutually agreed upon time and price, thereby determining the yield during
the term of the agreement. As a result, a repurchase agreement provides a fixed
rate of return insulated from market fluctuations during the term of the
agreement. The term of a repurchase agreement generally is short, possibly
overnight or for a few days, although it may extend over a number of months (up
to one year) from the date of delivery. Repurchase agreements will be fully
collateralized and the collateral will be marked-to-market daily. A Series may
not enter into a repurchase agreement having more than seven days remaining to
maturity or invest in any other illiquid securities if, as a result, such
agreements, together with any other illiquid securities, would exceed 15% of the
value of the net assets of the Series.

In the event of bankruptcy or other default by the seller of the security under
a repurchase agreement, a Series may suffer time delays and incur costs or
possible losses in connection with the disposition of the collateral. In such
event, instead of the contractual fixed rate of return, the rate of return to a
Series would be dependent upon intervening fluctuations of the market value of
the underlying security and the accrued interest on the security. Although a
Series would have rights against the seller for breach of contract with respect
to any losses arising from market fluctuations following the failure of the
seller to perform, the ability of a Series to recover damages from a seller in
bankruptcy or otherwise in default would be reduced.

Repurchase agreements are securities for purposes of the tax diversification
requirements that must be met for pass-through treatment under Subchapter M of
the Internal Revenue Code of 1986, as amended (the "Code"). Accordingly, each
Series will limit the value of its repurchase agreements on each of the
quarterly testing dates to ensure compliance with Subchapter M of the Code.

4
<PAGE>

REVERSE REPURCHASE AGREEMENTS
- -----------------------------

Reverse repurchase agreements involve sales of portfolio securities of a Series
to member banks of the Federal Reserve System or securities dealers believed
creditworthy, concurrently with an agreement by the Series to repurchase the
same securities at a later date at a fixed price which is generally equal to the
original sales price plus interest. A Series retains record ownership and the
right to receive interest and principal payments on the portfolio securities
involved. In connection with each reverse repurchase transaction, a Series will
direct its custodian bank to place cash, U.S. government securities, equity
securities and/or investment and non-investment grade debt securities in a
segregated account of the Series in an amount equal to the repurchase price.
Any assets held in any segregated accounts maintained by a Series with respect
to any reverse repurchase agreements, when-issued securities, options, futures,
forward contracts or other derivative transactions shall be liquid, unencumbered
and marked-to-market daily (any such assets held in a segregated account are
referred to in this Statement of Additional Information as "Segregated Assets").

A reverse repurchase agreement involves the risk that the market value of the
securities retained by a Series may decline below the price of the securities
the Series has sold but is obligated to repurchase under the agreement. In the
event the buyer of securities under a reverse repurchase agreement files for
bankruptcy or becomes insolvent, the Series' use of the proceeds of the
agreement may be restricted pending a determination by the other party, or its
trustee or receiver, whether to enforce the Series' obligation to repurchase the
securities. Reverse repurchase agreements are considered borrowings by the
Series and as such, are subject to the same investment limitations.

BORROWING
- ---------

The Series may borrow money as a temporary measure for extraordinary purposes or
to facilitate redemptions. A Series will not borrow money in excess of 33 1/3%
of the value of its total assets. A Series has no intention of increasing its
net income through borrowing. Any borrowing will be done from a bank with the
required asset coverage of at least 300%. In the event that such asset coverage
shall at any time fall below 300%, a Series shall, within three days thereafter
(not including Sundays or holidays), or such longer period as the U.S.
Securities and Exchange Commission (the "SEC") may prescribe by rules and
regulations, reduce the amount of its borrowings to such an extent that the
asset coverage of such borrowings shall be at least 300%. A Series will not
pledge more than 10% of its net assets, or issue senior securities as defined in
the Investment Company Act of 1940, as amended (the "Act"), except for notes to
banks and reverse repurchase agreements. Investment securities will not be
purchased while a Series has an outstanding borrowing that exceeds 5% of a
Series' net assets.

LOANS OF PORTFOLIO SECURITIES
- -----------------------------

The Series may lend portfolio securities to qualified broker-dealers and
financial institutions provided: (1) the loan is secured continuously by
collateral marked-to-market daily and maintained in an amount at least equal to
the current market value of the securities loaned; (2) a Series may call the
loan at any time and receive the securities loaned; (3) a Series will receive
any interest or dividends paid on the loaned securities; and (4) the aggregate
market value of securities loaned will not at any time exceed 33 1/3% of the
total assets of the Global Fund, Global Equity Fund, Global Bond Fund, U.S.
Balanced Fund, U.S. Equity Fund, U.S. Bond Fund and Non-U.S. Equity Fund,
respectively.

Collateral will consist of U.S. and non-U.S. securities, cash equivalents or
irrevocable letters of credit. Loans of securities involve a risk that the
borrower may fail to return the securities or may fail to maintain the proper
amount of collateral. Therefore, a Series will only enter into portfolio loans
after a review of all pertinent factors by Brinson Partners, Inc. ("Brinson
Partners" or the "Advisor") under the supervision of the Board of Trustees,
including the creditworthiness of the borrower. Creditworthiness will be
monitored on an ongoing basis by the Advisor.

SWAPS
- -----

The Series (except for the Global Equity Fund, U.S. Equity Fund and Non-U.S.
Equity Fund) may engage in swaps, including but not limited to interest rate,
currency and index swaps and the purchase or sale of related caps, floors,
collars and other derivative instruments. The Series expect to enter into these
transactions primarily to preserve a return or spread on a particular investment
or portion of the portfolio's duration, to protect against any increase in the
price of securities the Series anticipates purchasing at a later date, or to
gain exposure to certain markets in the most economical way possible.

5
<PAGE>

The use of swaps involves investment techniques and risks different from those
associated with ordinary portfolio security transactions. If Brinson Partners
is incorrect in its forecast of market values, interest rates and other
applicable factors, the investment performance of the Series will be less
favorable than it would have been if this investment technique was never used.
Thus, if the other party to a swap defaults, a Series' risk of loss consists of
the net amount of interest payments that the Series is contractually entitled to
receive. Under Internal Revenue Service rules, any lump sum payment received or
due under the notional principal contract must be amortized over the life of the
contract.

FUTURES
- -------

The Series may enter into contracts for the purchase or sale for future delivery
of securities. The Global Funds and the Non-U.S. Equity Fund may also enter
into contracts for the purchase or sale for future delivery of foreign
currencies.

A purchase of a futures contract means the acquisition of a contractual right to
obtain delivery to a Series of the securities or foreign currency called for by
the contract at a specified price during a specified future month. When a
futures contract is sold, a Series incurs a contractual obligation to deliver
the securities or foreign currency underlying the contract at a specified price
on a specified date during a specified future month. A Series may enter into
futures contracts and engage in options transactions related thereto to the
extent that not more than 5% of the Series' assets are required as futures
contract margin deposits and premiums on options, and may engage in such
transactions to the extent that obligations relating to such futures and related
options on futures transactions represent not more than 25% of a Series' assets.

When a Series enters into a futures transaction, it must deliver to the futures
commission merchant selected by a Series an amount referred to as "initial
margin." This amount is maintained by the futures commission merchant in a
segregated account at the custodian bank. Thereafter, a "variation margin" may
be paid by the Series to, or drawn by the Series from, such account in
accordance with controls set for such accounts, depending upon changes in the
price of the underlying securities subject to the futures contract.

The Series will enter into futures transactions on domestic exchanges and, to
the extent such transactions have been approved by the Commodity Futures Trading
Commission for sale to customers in the United States, on foreign exchanges. In
addition, all of the Series except the Global Bond Fund and U.S. Bond Fund may
sell stock index futures in anticipation of or during a market decline to
attempt to offset the decrease in market value of their common stocks that might
otherwise result; and they may purchase such contracts in order to offset
increases in the cost of common stocks that they intend to purchase. Unlike
other futures contracts, a stock index futures contract specifies that no
delivery of the actual stocks making up the index will take place. Instead,
settlement in cash must occur upon the termination of the contract.

While futures contracts provide for the delivery of securities, deliveries
usually do not occur. Contracts are generally terminated by entering into
offsetting transactions.

The Series may enter into futures contracts to protect against the adverse
affects of fluctuations in security prices, interest or foreign exchange rates
without actually buying or selling the securities or foreign currency. For
example, if interest rates are expected to increase, a Series might enter into
futures contracts for the sale of debt securities. Such a sale would have much
the same effect as selling an equivalent value of the debt securities owned by
the Series. If interest rates did increase, the value of the debt securities in
the portfolio would decline, but the value of the futures contracts to the
Series would increase at approximately the same rate, thereby keeping the net
asset value of the Series from declining as much as it otherwise would have.
Similarly, when it is expected that interest rates may decline, futures
contracts may be purchased to hedge in anticipation of subsequent purchases of
securities at higher prices. Since the fluctuations in the value of futures
contracts should be similar to those of debt securities, the Series could take
advantage of the anticipated rise in value of debt securities without actually
buying them until the market had stabilized. At that time, the futures
contracts could be liquidated and the Series could then buy debt securities on
the cash market.

To the extent that market prices move in an unexpected direction, a Series may
not achieve the anticipated benefits of futures contracts or may realize a
loss. For example, if a Series is hedged against the possibility of an
increase in interest rates which would adversely affect the price of securities
held in its portfolio and interest rates decrease instead, the Series would lose
part or all of the benefit of the increased value which it has because it would
have offsetting losses

6
<PAGE>

in its futures position. In addition, in such situations, if the Series had
insufficient cash, it may be required to sell securities from its portfolio to
meet daily variation margin requirements. Such sales of securities may, but
will not necessarily, be at increased prices which reflect the rising market. A
Series may be required to sell securities at a time when it may be
disadvantageous to do so.

OPTIONS
- -------

The Series may purchase and write call or put options on securities but will
only engage in option strategies for non-speculative purposes.

The U.S. Funds may invest in options that are listed on U.S. exchanges or traded
over-the-counter and the Global Funds and the Non-U.S. Equity Fund may invest in
options that are either listed on U.S. or recognized foreign exchanges or traded
over-the-counter. Certain over-the-counter options may be illiquid. Thus, it
may not be possible to close options positions and this may have an adverse
impact on a Series' ability to effectively hedge its securities. The Series
have been notified by the SEC that it considers over-the-counter options to be
illiquid. Accordingly, a Series will only invest in such options to the extent
consistent with its 15% limit on investments in illiquid securities.

PURCHASING CALL OPTIONS - The Series may purchase call options on securities to
the extent that premiums paid by a Series do not aggregate more than 20% of the
Series' total assets. When a Series purchases a call option, in return for a
premium paid by the Series to the writer of the option, the Series obtains the
right to buy the security underlying the option at a specified exercise price at
any time during the term of the option. The writer of the call option, who
receives the premium upon writing the option, has the obligation, upon exercise
of the option, to deliver the underlying security against payment of the
exercise price. The advantage of purchasing call options is that a Series may
alter portfolio characteristics and modify portfolio maturities without
incurring the cost associated with transactions.

A Series may, following the purchase of a call option, liquidate its position by
effecting a closing sale transaction. This is accomplished by selling an option
of the same series as the option previously purchased. The Series will realize
a profit from a closing sale transaction if the price received on the
transaction is more than the premium paid to purchase the original call option;
the Series will realize a loss from a closing sale transaction if the price
received on the transaction is less than the premium paid to purchase the
original call option.

Although the Series will generally purchase only those call options for which
there appears to be an active secondary market, there is no assurance that a
liquid secondary market on an exchange will exist for any particular option, or
at any particular time, and for some options no secondary market on an exchange
may exist. In such event, it may not be possible to effect closing transactions
in particular options, with the result that a Series would have to exercise its
options in order to realize any profit and would incur brokerage commissions
upon the exercise of such options and upon the subsequent disposition of the
underlying securities acquired through the exercise of such options. Further,
unless the price of the underlying security changes sufficiently, a call option
purchased by a Series may expire without any value to the Series, in which event
the Series would realize a capital loss which will be short-term unless the
option was held for more than one year.

COVERED CALL WRITING - A Series may write covered call options from time to
time on such portions of its portfolio, without limit, as Brinson Partners
determines is appropriate in seeking to achieve the Series' investment
objective. The advantage to a Series of writing covered calls is that the
Series receives a premium which is additional income. However, if the security
rises in value, the Series may not fully participate in the market appreciation.

During the option period, a covered call option the writer may be assigned an
exercise notice by the broker-dealer through whom such call option was sold,
requiring the writer to deliver the underlying security against payment of the
exercise price. This obligation is terminated upon the expiration of the option
or upon entering a closing purchase transaction. A closing purchase
transaction, in which a Series, as writer of an option, terminates its
obligation by purchasing an option of the same series as the option previously
written, cannot be effected with respect to an option once the option writer has
received an exercise notice for such option.

Closing purchase transactions will ordinarily be effected to realize a profit on
an outstanding call option, to prevent an underlying security from being called,
to permit the sale of the underlying security or to enable a Series to write
another

7
<PAGE>

call option on the underlying security with either a different exercise price or
expiration date or both. A Series may realize a net gain or loss from a closing
purchase transaction depending upon whether the net amount of the original
premium received on the call option is more or less than the cost of effecting
the closing purchase transaction. Any loss incurred in a closing purchase
transaction may be partially or entirely offset by the premium received from a
sale of a different call option on the same underlying security. Such a loss
may also be wholly or partially offset by unrealized appreciation in the market
value of the underlying security. Conversely, a gain resulting from a closing
purchase transaction could be offset in whole or in part by a decline in the
market value of the underlying security.

If a call option expires unexercised, the Series will realize a short-term
capital gain in the amount of the premium on the option less the commission
paid. Such a gain, however, may be offset by depreciation in the market value
of the underlying security during the option period. If a call option is
exercised, a Series will realize a gain or loss from the sale of the underlying
security equal to the difference between the cost of the underlying security and
the proceeds of the sale of the security plus the amount of the premium on the
option less the commission paid.

The Series will write call options only on a covered basis, which means that a
Series will own the underlying security subject to a call option at all times
during the option period. Unless a closing purchase transaction is effected, a
Series would be required to continue to hold a security which it might otherwise
wish to sell or deliver a security it would want to hold. The exercise price of
a call option may be below, equal to or above the current market value of the
underlying security at the time the option is written.

PURCHASING PUT OPTIONS - The Series may only purchase put options to the extent
that the premiums on all outstanding put options do not exceed 20% of a Series'
total assets. A Series will, at all times during which it holds a put option,
own the security covered by such option. With regard to the writing of put
options, each Series will limit the aggregate value of the obligations
underlying such put options to 50% of its total net assets. The purchase of the
put on substantially identical securities held will constitute a short sale for
tax purposes, the effect of which is to create short-term capital gain on the
sale of the security and to suspend running of its holding period (and treat it
as commencing on the date of the closing of the short sale) or that of a
security acquired to cover the same if, at the time the put was acquired, the
security had not been held for more than one year.

A put option purchased by a Series gives it the right to sell one of its
securities for an agreed price up to an agreed date. The Series intend to
purchase put options in order to protect against a decline in the market value
of the underlying security below the exercise price less the premium paid for
the option ("protective puts"). The ability to purchase put options will allow
the Series to protect unrealized gains in an appreciated security in their
portfolios without actually selling the security. If the security does not drop
in value, a Series will lose the value of the premium paid. A Series may sell a
put option which it has previously purchased prior to the sale of the securities
underlying such option. Such sale will result in a net gain or loss depending
on whether the amount received on the sale is more or less than the premium and
other transaction costs paid on the put option which is sold.

The Series may sell a put option purchased on individual portfolio securities.
Additionally, the Series may enter into closing sale transactions. A closing
sale transaction is one in which a Series, when it is the holder of an
outstanding option, liquidates its position by selling an option of the same
series as the option previously purchased.

WRITING PUT OPTIONS - The Series may also write put options on a secured basis
which means that a Series will maintain in a segregated account with its
custodian Segregated Assets in an amount not less than the exercise price of the
option at all times during the option period. The amount of Segregated Assets
held in the segregated account will be adjusted on a daily basis to reflect
changes in the market value of the securities covered by the put option written
by the Series. Secured put options will generally be written in circumstances
where Brinson Partners wishes to purchase the underlying security for a Series'
portfolio at a price lower than the current market price of the security. In
such event, a Series would write a secured put option at an exercise price
which, reduced by the premium received on the option, reflects the lower price
it is willing to pay.

8
<PAGE>

Following the writing of a put option, a Series may wish to terminate the
obligation to buy the security underlying the option by effecting a closing
purchase transaction. This is accomplished by buying an option of the same
series as the option previously written. The Series may not, however, effect
such a closing transaction after it has been notified of the exercise of the
option.

INDEX OPTIONS
- -------------

The Series may purchase exchange-listed call options on stock and fixed income
indices depending upon whether a Series is an equity or bond series and sell
such options in closing sale transactions for hedging purposes. A Series may
purchase call options on broad market indices to temporarily achieve market
exposure when the Series is not fully invested. A Series may also purchase
exchange-listed call options on particular market segment indices to achieve
temporary exposure to a specific industry.

In addition, the Series may purchase put options on stock and fixed income
indices and sell such options in closing sale transactions for hedging purposes.
A Series may purchase put options on broad market indices in order to protect
its fully invested portfolio from a general market decline. Put options on
market segments may be bought to protect a Series from a decline in value of
heavily weighted industries in the Series' portfolio. Put options on stock and
fixed income indices may also be used to protect a Series' investments in the
case of a major redemption.

The Series may also write (sell) put and call options on stock and fixed income
indices. While the option is open, a Series will maintain a segregated account
with its custodian in an amount equal to the market value of the option.

Options on indices are similar to regular options except that an option on an
index gives the holder the right, upon exercise, to receive an amount of cash if
the closing level of the index upon which the option is based is greater than
(in the case of a call) or lesser than (in the case of a put) the exercise price
of the option. This amount of cash is equal to the difference between the
closing price of the index and the exercise price of the option expressed in
dollars times a specified multiple (the "multiplier"). The indices on which
options are traded include both U.S. and non-U.S. markets.

SPECIAL RISKS OF OPTIONS ON INDICES
- -----------------------------------

The Series' purchases of options on indices will subject them to the risks
described below.

Because the value of an index option depends upon movements in the level of the
index rather than the price of a particular security, whether a Series will
realize gain or loss on the purchase of an option on an index depends upon
movements in the level of prices in the market generally or in an industry or
market segment rather than movements in the price of a particular security.
Accordingly, successful use by a Series of options on indices is subject to
Brinson Partners' ability to predict correctly the direction of movements in the
market generally or in a particular industry. This requires different skills
and techniques than predicting changes in the prices of individual securities.

Index prices may be distorted if trading of a substantial number of securities
included in the index is interrupted causing the trading of options on that
index to be halted. If a trading halt occurred, a Series would not be able to
close out options which it had purchased and the Series may incur losses if the
underlying index moved adversely before trading resumed. If a trading halt
occurred and restrictions prohibiting the exercise of options were imposed
through the close of trading on the last day before expiration, exercises on
that day would be settled on the basis of a closing index value that may not
reflect current price information for securities representing a substantial
portion of the value of the index.

If a Series holds an index option and exercises it before final determination of
the closing index value for that day, it runs the risk that the level of the
underlying index may change before closing. If such a change causes the
exercised option to fall "out-of-the-money," the Series will be required to pay
the difference between the closing index value and the exercise price of the
option (times the applicable multiplier) to the assigned writer. Although a
Series may be able to minimize this risk by withholding exercise instructions
until just before the daily cutoff time or by selling rather than exercising the
option when the index level is close to the exercise price, it may not be
possible to eliminate this risk entirely because the cutoff times for index
options may be earlier than those fixed for other types of options and may occur
before definitive closing index values are announced.

9
<PAGE>

RULE 144A SECURITIES
- --------------------

The Series may invest in securities that are exempt under Rule 144A from the
registration requirements of the Securities Act of 1933. Those securities
purchased under Rule 144A are traded among qualified institutional investors.

The Board of Trustees of the Trust has instructed Brinson Partners to consider
the following factors in determining the liquidity of a security purchased under
Rule 144A: (i) the frequency of trades and trading volume for the security; (ii)
whether at least three dealers are willing to purchase or sell the security and
the number of potential purchasers; (iii) whether at least two dealers are
making a market in the security; and (iv) the nature of the security and the
nature of the marketplace trades (e.g., the time needed to dispose of the
security, the method of soliciting offers and the mechanics of transfer).
Although having delegated the day-to-day functions, the Board of Trustees will
continue to monitor and periodically review the Advisor's selection of Rule 144A
securities, as well as the Advisor's determinations as to their liquidity.
Investing in securities under Rule 144A could have the effect of increasing the
level of a Series' illiquidity to the extent that qualified institutional buyers
become, for a time, uninterested in purchasing these securities. After the
purchase of a security under Rule 144A, however, the Board of Trustees and
Brinson Partners will continue to monitor the liquidity of that security to
ensure that each Series has no more than 15% of its total assets in illiquid
securities.

The Series will limit investments in securities of issuers which the Series are
restricted from selling to the public without registration under the Securities
Act of 1933 to no more than 15% of the Series' total assets, excluding
restricted securities eligible for resale pursuant to Rule 144A that have been
determined to be liquid by the Trust's Board of Trustees.

If Brinson Partners determines that a security purchased in reliance on Rule
144A which was previously determined to be liquid, is no longer liquid and, as a
result, the Series' holdings of illiquid securities exceed the Series' 15% limit
on investment in such securities, Brinson Partners will determine what action
shall be taken to ensure that the Series continue to adhere to such limitation,
including disposing of illiquid assets which may include such Rule 144A
securities.

OTHER INVESTMENTS
- -----------------

The Board of Trustees may, in the future, authorize a Series to invest in
securities other than those listed in this Statement of Additional Information
and in the Prospectuses, provided such investment would be consistent with that
Series' investment objective and that it would not violate any fundamental
investment policies or restrictions applicable to that Series.

INVESTMENTS RELATING TO THE GLOBAL FUNDS AND THE NON-U.S. EQUITY FUND

The following discussion of strategies, techniques and policies applies only to
the Global Fund, Global Equity Fund, Global Bond Fund and the Non-U.S. Equity
Fund.

FOREIGN SECURITIES
- ------------------

Investors should recognize that investing in foreign issuers involves certain
considerations, including those set forth in the Series' Prospectuses, which are
not typically associated with investing in U.S. issuers. Since the stocks of
foreign companies are frequently denominated in foreign currencies, and since
the Series may temporarily hold uninvested reserves in bank deposits in foreign
currencies, the Series will be affected favorably or unfavorably by changes in
currency rates and in exchange control regulations and may incur costs in
connection with conversions between various currencies. The investment policies
of the Series permit them to enter into forward foreign currency exchange
contracts, futures, options and interest rate swaps (in the case of the Global
Funds) in order to hedge portfolio holdings and commitments against changes in
the level of future currency rates.

There has been in the past, and there may be again in the future, an interest
equalization tax levied by the United States in connection with the purchase of
foreign securities such as those purchased by the Series. Payment of an
interest equalization tax, if imposed, would reduce the Series' rates of return
on investment. Dividends paid by foreign issuers may be subject to withholding
and other foreign taxes which may decrease the net return on such investments as
compared to dividends paid to the Series by U.S. corporations. The Series'
ability to "pass through" the foreign taxes paid for tax credit or deduction
purposes will be determined by the composition of the Series' portfolios. More
than 50%

10
<PAGE>

of a Series must be invested in stock or securities of foreign corporations for
"pass through" to be possible in the first instance. Special rules govern the
federal income tax treatment of certain transactions denominated in terms of a
currency other than the U.S. dollar or determined by reference to the value of
one or more currencies other than the U.S. dollar. The types of transactions
covered by the special rules generally include the following: (i) the
acquisition of, or becoming the obligor under, a bond or other debt instrument
(including, to the extent provided in the Treasury Regulations, preferred
stock); (ii) the accruing of certain trade receivables and payables; and (iii)
the entering into or acquisition of any forward contract, futures contract and
similar financial instruments other than any "regulated futures contract" or
"non-equity option" which would be marked-to-market under the rules of Section
1256 of the Code if held at the end of the tax year. The disposition of a
currency other than the U.S. dollar by a U.S. taxpayer is also treated as a
transaction subject to the special currency rules. However, foreign currency-
related regulated futures contracts and non-equity options are generally not
subject to these special currency rules. If subject, they are or would be
treated as sold for their fair market value at year-end under the marked-to-
market rules applicable to other futures contracts, unless an election is made
to have such currency rules apply. With respect to transactions covered by the
special rules, foreign currency gain or loss is calculated separately from any
gain or loss on the underlying transaction and is normally taxable gain or loss.
A taxpayer may elect to treat as capital gain or loss foreign currency gain or
loss arising from certain identified forward contracts, futures contracts and
options that are capital assets in the hands of the taxpayer and which are not
part of a straddle. Certain transactions subject to the special currency rules
that are part of a "section 988 hedging transaction" (as defined in the Code and
the Treasury Regulations) will be integrated and treated as a single transaction
or otherwise treated consistently for purposes of the Code. The income tax
effects of integrating and treating a transaction as a single transaction are
generally to create a synthetic debt instrument that is subject to the original
discount provisions. It is anticipated that some of the non-U.S. dollar
denominated investments and foreign currency contracts the Series may make or
enter into will be subject to the special currency rules described above.

FORWARD FOREIGN CURRENCY CONTRACTS
- ----------------------------------

The Series may purchase or sell currencies and/or engage in forward foreign
currency transactions in order to expedite settlement of portfolio transactions
and to manage currency risk.

Forward foreign currency contracts are traded in the inter-bank market conducted
directly between currency traders (usually large commercial banks) and their
customers. A forward contract generally has no deposit requirement and no
commissions are charged at any stage for trades. The Series will account for
forward contracts by marking-to-market each day at current forward contract
values.

A Series will only enter into forward contracts to sell, for a fixed amount of
U.S. dollars or other appropriate currency, an amount of foreign currency, to
the extent that the value of the short forward contract is covered by the
underlying value of securities denominated in the currency being sold.
Alternatively, when a Series enters into a forward contract to sell an amount of
foreign currency, the Series' custodian or sub-custodian will place Segregated
Assets in a segregated account of the Series in an amount not less than the
value of the Series' total assets committed to the consummation of such forward
contracts. If the additional Segregated Assets placed in the segregated account
decline, additional cash or securities will be placed in the account on a daily
basis so that the value of the account will equal the amount of the Series'
commitments with respect to such contracts.

OPTIONS ON FOREIGN CURRENCIES
- -----------------------------

The Series also may purchase and write put and call options on foreign
currencies (traded on U.S. and foreign exchanges or over-the-counter markets) to
manage the Series' exposure to changes in currency exchange rates. The Series
may purchase and write options on foreign currencies for hedging purposes in a
manner similar to that in which futures contracts on foreign currencies, or
forward contracts, will be utilized. For example, a decline in the dollar value
of a foreign currency in which portfolio securities are denominated will reduce
the dollar value of such securities, even if their value in the foreign currency
remains constant. In order to protect against such diminutions in the value of
portfolio securities, the Series may purchase put options on the foreign
currency. If the dollar price of the currency does decline, a Series will have
the right to sell such currency for a fixed amount in dollars and will thereby
offset, in whole or in part, the adverse effect on its portfolio which otherwise
would have resulted.

Conversely, where a rise in the dollar value of a currency in which securities
to be acquired are denominated is projected, thereby increasing the dollar price
of such securities, the Series may purchase call options on such currency.

11
<PAGE>

The purchase of such options could offset, at least partially, the effects of
the adverse movement in exchange rates. As in the case of other types of
options, however, the benefit to the Series to be derived from purchases of
foreign currency options will be reduced by the amount of the premium and
related transaction costs. In addition, where currency exchange rates do not
move in the direction or to the extent anticipated, a Series could sustain
losses on transactions in foreign currency options which would require it to
forego a portion or all of the benefits of advantageous changes in such rates.

The Series may write options on foreign currencies for the same types of hedging
purposes. For example, where a Series anticipates a decline in the dollar value
of foreign currency denominated securities due to adverse fluctuations in
exchange rates, it could, instead of purchasing a put option, write a call
option on the relevant currency. If the expected decline occurs, the option
will most likely not be exercised, and the diminution in the value of portfolio
securities will be offset by the amount of the premium received.

Similarly, instead of purchasing a call option to hedge against an anticipated
increase in the dollar cost of securities to be acquired, a Series could write a
put option on the relevant currency which, if rates move in the manner
projected, will expire unexercised and allow the Series to hedge such increased
cost up to the amount of the premium. As in the case of other types of options,
however, the writing of a foreign currency option will constitute only a partial
hedge up to the amount of the premium, and only if rates move in the expected
direction. If this does not occur, the option may be exercised and the Series
would be required to purchase or sell the underlying currency at a loss which
may not be offset by the amount of the premium. Through the writing of options
on foreign currencies, a Series also may be required to forego all or a portion
of the benefit which might otherwise have been obtained from favorable movements
in exchange rates.

The Series may write covered call options on foreign currencies. A call option
written on a foreign currency by a Series is "covered" if the Series owns the
underlying foreign currency covered by the call or has an absolute and immediate
right to acquire that foreign currency without additional cash consideration (or
for additional cash consideration held in a segregated account by the custodian
bank) upon conversion or exchange of other foreign currency held in its
portfolio. A call option is also covered if a Series has a call on the same
foreign currency and in the same principal amount as the call written where the
exercise price of the call held (a) is equal to or less than the exercise price
of the call written, or (b) is greater than the exercise price of the call
written if the difference is maintained by the Series in Segregated Assets in a
segregated account with its custodian bank.

With respect to writing put options, at the time the put is written, a Series
will establish a segregated account with its custodian bank consisting of
Segregated Assets in an amount equal in value to the amount the Series will be
required to pay upon exercise of the put. The account will be maintained until
the put is exercised, has expired, or the Series has purchased a closing put of
the same series as the one previously written.

INVESTMENTS RELATING TO THE GLOBAL FUND, GLOBAL BOND FUND, U.S. BALANCED FUND
AND U.S. BOND FUND

The following discussion applies to the Global Fund, Global Bond Fund, U.S.
Balanced Fund and U.S. Bond Fund.

LOWER GRADE DEBT SECURITIES
- ----------------------------

Fixed income securities rated lower than Baa3 by Moody's Investors Services,
Inc. or BBB- by Standard & Poor's Ratings Group are considered to be of poor
standing and predominantly speculative. Such securities are commonly referred
to as "junk bonds" and are subject to a substantial degree of credit risk.
Medium and low-grade bonds held by the Series, which are those that are rated
below Baa3 or BBB-, may be issued as a consequence of corporate restructurings,
such as leveraged buy-outs, mergers, acquisitions, debt recapitalizations or
similar events. Also, high yield bonds are often issued by smaller, less
creditworthy companies or by highly leveraged (indebted) firms, which are
generally less able than more financially stable firms to make scheduled
payments of interest and principal. The risks posed by bonds issued under such
circumstances are substantial.

In the past, the high yields from low-grade bonds have more than compensated for
the higher default rates on such securities. However, there can be no assurance
that diversification will protect the Series from widespread bond defaults

12
<PAGE>

brought about by a sustained economic downturn, or that yields will continue to
offset default rates on high yield bonds in the future. Issuers of these
securities are often highly leveraged, so that their ability to service their
debt obligations during an economic downturn or during sustained periods of
rising interest rates may be impaired. In addition, such issuers may not have
more traditional methods of financing available to them and may be unable to
repay debt at maturity by refinancing. Further, an economic recession may
result in default levels with respect to such securities in excess of historic
averages.

The value of lower-rated debt securities will be influenced not only by changing
interest rates, but also by the bond market's perception of credit quality and
the outlook for economic growth. When economic conditions appear to be
deteriorating, low and medium-rated bonds may decline in market value due to
investors' heightened concern over credit quality, regardless of prevailing
interest rates.

Especially at such times, trading in the secondary market for high yield bonds
may become thin and market liquidity may be significantly reduced. Even under
normal conditions, the market for high yield bonds may be less liquid than the
market for investment grade corporate bonds. There are fewer securities dealers
in the high yield market and purchasers of high yield bonds are concentrated
among a smaller group of securities dealers and institutional investors. In
periods of reduced market liquidity, high yield bond prices may become more
volatile.

Besides credit and liquidity concerns, prices for high yield bonds may be
affected by legislative and regulatory developments. For example, from time to
time, Congress has considered legislation to restrict or eliminate the corporate
tax deduction for interest payments or to regulate corporate restructurings such
as takeovers or mergers. Such legislation may significantly depress the prices
of outstanding high yield bonds. A description of various corporate debt
ratings appears in Appendix A to this Statement of Additional Information.

CONVERTIBLE SECURITIES
- ----------------------

The Series may invest in convertible securities which generally offer lower
interest or dividend yields than non-convertible debt securities of similar
quality. The value of convertible securities may reflect changes in the value
of the underlying common stock. Convertible securities entail less credit risk
than the issuer's common stock because they rank senior to common stock.
Convertible securities entitle the holder to exchange the securities for a
specified number of shares of common stock, usually of the same company, at
specified prices within a certain period of time and to receive interest or
dividends until the holder elects to convert. The provisions of any convertible
security determine its ranking in a company's capital structure. In the case of
subordinated convertible debentures, the holder's claims on assets and earnings
are subordinated to the claims of other creditors and are senior to the claims
of preferred and common shareholders. In the case of preferred stock and
convertible preferred stock, the holder's claim on assets and earnings are
subordinated to the claims of all creditors but are senior to the claims of
common shareholders.

WHEN-ISSUED SECURITIES
- ----------------------

The Series may purchase securities offered on a "when-issued" or "forward
delivery" basis. When so offered, the price, which is generally expressed in
yield terms, is fixed at the time the commitment to purchase is made, but
delivery and payment for the when-issued or forward delivery securities take
place at a later date. During the period between purchase and settlement, no
payment is made by the purchaser to the issuer and no interest on the when-
issued or forward delivery security accrues to the purchaser. While when-issued
or forward delivery securities may be sold prior to the settlement date, it is
intended that a Series will purchase such securities with the purpose of
actually acquiring them unless a sale appears desirable for investment reasons.
At the time a Series makes the commitment to purchase a security on a when-
issued or forward delivery basis, it will record the transaction and reflect the
value of the security in determining its net asset value. The market value of
when-issued or forward delivery securities may be more or less than the purchase
price. The Advisor does not believe that a Series' net asset value or income
will be adversely affected by its purchase of securities on a when-issued or
forward delivery basis. The Series will establish a segregated account in which
it will maintain Segregated Assets equal in value to commitments for when-
issued or forward delivery securities.

MORTGAGE-BACKED SECURITIES AND MORTGAGE PASS-THROUGH SECURITIES
- ---------------------------------------------------------------

The Series may also invest in mortgage-backed securities, which are interests in
pools of mortgage loans, including mortgage loans made by savings and loan
institutions, mortgage bankers, commercial banks and others. Pools of

13
<PAGE>

mortgage loans are assembled as securities for sale to investors by various
governmental, government-related and private organizations as further described
below. The Series may also invest in debt securities which are secured with
collateral consisting of mortgage-backed securities (see "Collateralized
Mortgage Obligations") and in other types of mortgage-related securities.

The timely payment of principal and interest on mortgage-backed securities
issued or guaranteed by the Government National Mortgage Association ("GNMA") is
backed by GNMA and the full faith and credit of the U.S. government. These
guarantees, however, do not apply to the market value of Series shares. Also,
securities issued by GNMA and other mortgage-backed securities may be purchased
at a premium over the maturity value of the underlying mortgages. This premium
is not guaranteed and would be lost if prepayment occurs. Mortgage-backed
securities issued by U.S. government agencies or instrumentalities other than
GNMA are not "full faith and credit" obligations. Certain obligations, such as
those issued by the Federal Home Loan Bank are supported by the issuer's right
to borrow from the U.S. Treasury, while others such as those issued by the
Federal National Mortgage Association ("FNMA"), are supported only by the credit
of the issuer. Unscheduled or early payments on the underlying mortgages may
shorten the securities' effective maturities and reduce returns. The Series may
agree to purchase or sell these securities with payment and delivery taking
place at a future date. A decline in interest rates may lead to a faster rate
of repayment of the underlying mortgages and expose the Series to a lower rate
of return upon reinvestment. To the extent that such mortgage-backed securities
are held by a Series, the prepayment right of mortgagors may limit the increase
in net asset value of the Series because the value of the mortgage-backed
securities held by the Series may not appreciate as rapidly as the price of
noncallable debt securities.

A decline in interest rates may lead to a faster rate of repayment of the
underlying mortgages and expose a Series to a lower rate of return upon
reinvestment. To the extent that such mortgage-backed securities are held by a
Series, the prepayment right will tend to limit to some degree the increase in
net asset value of the Series because the value of the mortgage-backed
securities held by the Series may not appreciate as rapidly as the price of
noncallable debt securities.

For federal tax purposes other than diversification under Subchapter M,
mortgage-backed securities are not considered to be separate securities but
rather "grantor trusts" conveying to the holder an individual interest in each
of the mortgages constituting the pool.

Interests in pools of mortgage-backed securities differ from other forms of debt
securities, which normally provide for periodic payment of interest in fixed
amounts with principal payments at maturity or specified call dates. Instead,
these securities provide a monthly payment which consists of both interest and
principal payments. In effect, these payments are a "pass-through" of the
monthly payments made by the individual borrowers on their mortgage loans, net
of any fees paid to the issuer or guarantor of such securities. Additional
payments are caused by repayments of principal resulting from the sale of the
underlying property, refinancing or foreclosure, net of fees or costs which may
be incurred. Some mortgage-backed securities (such as securities issued by the
GNMA) are described as "modified pass-through." These securities entitle the
holder to receive all interest and principal payments owed on the mortgage pool,
net of certain fees, at the scheduled payments dates regardless of whether or
not the mortgagor actually makes the payment.

Any discount enjoyed on the purchases of a pass-through type mortgage-backed
security will likely constitute market discount. As a Series receives
principal payments, it will be required to treat as ordinary income an amount
equal to the lesser of the amount of the payment or the "accrued market
discount." Market discount is to be accrued either under a constant rate method
or a proportional method. Pass-through type mortgage-backed securities
purchased at a premium to face will be subject to a similar rule requiring
recognition of an offset to ordinary interest income, an amount of premium
attributable to the receipt of principal. The amount of premium recovered is to
be determined using a method similar to that in place for market discount. A
Series may elect to accrue market discount or amortize premium notwithstanding
the amount of principal received but such election will apply to all bonds held
and thereafter acquired unless permission is granted by the Commissioner of the
Internal Revenue Service to change such method.

The principal governmental guarantor of mortgage-related securities is GAMA,
which is a wholly-owned U. S. government corporation within the Department of
Housing and Urban Development. GNMA is authorized to guarantee, with the full
faith and credit of the U.S. government, the timely payment of principal and
interest on securities issued by institutions approved by GNMA (such as savings
and loan institutions, commercial banks and mortgage bankers)

14
<PAGE>

and backed by pools of mortgages which are insured by the Federal Housing
Authority or guaranteed by the Veterans Administration. These guarantees,
however, do not apply to the market value or yield of mortgage-backed securities
or to the value of Series shares. Also, GNMA securities often are purchased at
a premium over the maturity value of the underlying mortgages. This premium is
not guaranteed and should be viewed as an economic offset to interest to be
earned. If prepayments occur, less interest will be earned and the value of the
premium paid will be lost.

Government-related guarantors (i.e., not backed by the full faith and credit of
the U.S. government) include FNMA and the Federal Home Loan Mortgage Corporation
("FHLMC"). FNMA is a government-sponsored corporation owned entirely by private
stockholders. It is subject to general regulation of the Secretary of Housing
and Urban Development. FNMA purchases conventional (i.e., not insured or
guaranteed by any government agency) mortgages from a list of approved
seller/servicers which include state and federally chartered savings and loan
associations, mutual savings banks, commercial banks and credit unions and
mortgage bankers. Pass-through securities issued by FNMA are guaranteed as to
timely payment of principal and interest by FNMA but are not backed by the full
faith and credit of the U.S. government.

FHLMC is a corporate instrumentality of the U.S. government and was created by
Congress in 1970 for the purpose of increasing the availability of mortgage
credit for residential housing. Its stock is owned by the twelve Federal Home
Loan Banks. FHLMC issues Participation Certificates ("PCs") which represent
interests in conventional mortgages from FHLMC's national portfolio. FHLMC
guarantees the timely payment of interest and ultimate collection of principal,
but PCs are not backed by the full faith and credit of the U.S. government.

Commercial banks, savings and loan institutions, private mortgage insurance
companies, mortgage bankers and other secondary market issuers also create pass-
through pools of conventional mortgage loans. Such issuers may, in addition, be
the originators and/or servicers of the underlying mortgage loans as well as the
guarantors of the mortgage-related securities. Pools created by such non-
governmental issuers generally offer a higher rate of interest than government
and government-related pools because there are no direct or indirect government
or agency guarantees of payments. However, timely payment of interest and
principal of these pools may be supported by various forms of insurance or
guarantees, including individual loan, title, pool and hazard insurance and
letters of credit. The insurance guarantees are issued by governmental
entities, private insurers and the mortgage poolers. Such insurance and
guarantees and the creditworthiness of the issuers thereof will be considered in
determining whether a mortgage-related security meets a Series' investment
quality standards. There can be no assurance that the private insurers or
guarantors can meet their obligations under the insurance policies or guarantee
or guarantees, even if through an examination of the loan experience and
practices of the originators/servicers and poolers, the Advisor determines that
the securities meet the Series' quality standards. Although the market for such
securities is becoming increasingly liquid, securities issued by certain private
organizations may not be readily marketable.

COLLATERALIZED MORTGAGE OBLIGATIONS ("CMOS") AND REAL ESTATE MORTGAGE INVESTMENT
- --------------------------------------------------------------------------------
CONDUITS ("REMICS")
- -------------------

A CMO is a debt security on which interest and prepaid principal are paid, in
most cases, semi-annually. CMOs may be collateralized by whole mortgage loans
but are more typically collateralized by portfolios of mortgage pass-through
securities guaranteed by GNMA, FHLMC, or FNMA and their income streams.
Privately-issued CMOs tend to be more sensitive to interest rates than
Government-issued CMOs.

CMOs are structured into multiple classes, each bearing a different stated
maturity. Actual maturity and average life will depend upon the prepayment
experience of the collateral. CMOs provide for a modified form of call
protection through a de facto breakdown of the underlying pool of mortgages
according to how quickly the loans are repaid. Monthly payments of principal
received from the pool of underlying mortgages, including prepayments, is first
returned to investors holding the shortest maturity class. Investors holding
the longer maturity classes receive principal only after the first class has
been retired. An investor is partially guarded against a sooner than desired
return of principal because of the sequential payments.

In a typical CMO transaction, a corporation issues multiple series (e.g., A, B,
C, Z) of CMO bonds ("Bonds"). Proceeds of the Bond offering are used to
purchase mortgages or mortgage pass-through certificates ("Collateral"). The
Collateral is pledged to a third party trustee as security for the Bonds.
Principal and interest payments from the Collateral are used to pay principal on
the Bonds in the order A, B, C, Z. The Series A, B and C Bonds all bear
current interest. Interest

15
<PAGE>

on the Series Z Bond is accrued and added to principal and a like amount is paid
as principal on the Series A, B, or C Bond currently being paid off. When the
Series A, B and C Bonds are paid in full, interest and principal on the Series
Z Bond begins to be paid currently. With some CMOs, the issuer serves as a
conduit to allow loan originators (primarily builders or savings and loan
associations) to borrow against their loan portfolios. REMICs are private
entities formed for the purpose of holding a fixed pool of mortgages secured by
an interest in real property. REMICs are similar to CMOs in that they issue
multiple classes of securities.

Most if not all newly-issued debt securities backed by pools of real estate
mortgages will be issued as regular and residual interests in REMICs because, as
of January 1, 1992, new CMOs which do not make REMIC elections will be treated
as "taxable mortgage pools," a wholly undesirable tax result. Under certain
transition rules, CMOs in existence on December 31, 1991 are unaffected by this
change. The Series will purchase only regular interests in REMICs. REMIC
regular interests are treated as debt of the REMIC and income/discount thereon
must be accounted for on the "catch-up method," using a reasonable prepayment
assumption under the original issue discount rules of the Code.

CMOs and REMICs issued by private entities are not government securities and are
not directly guaranteed by any government agency. They are secured by the
underlying collateral of the private issuer. Yields on privately-issued CMOs,
as described above, have been historically higher than yields on CMOs issued or
guaranteed by U.S. government agencies. However, the risk of loss due to default
on such instruments is higher since they are not guaranteed by the U.S.
government. Such instruments also tend to be more sensitive to interest rates
than U.S. government-issued CMOs. The Series will not invest in subordinated
privately-issued CMOs. For federal income tax purposes, the Series will be
required to accrue income on CMOs and REMIC regular interests using the "catch-
up" method, with an aggregate prepayment assumption.

OTHER MORTGAGE-BACKED SECURITIES
- --------------------------------

The Advisor expects that governmental, government-related or private entities
may create mortgage loan pools and other mortgage-related securities offering
mortgage pass-through and mortgage-collateralized investments in addition to
those described above. The mortgages underlying these securities may include
alternative mortgage instruments, that is, mortgage instruments whose principal
or interest payments may vary or whose terms to maturity may differ from
customary long-term fixed rate mortgages. As new types of mortgage-related
securities are developed and offered to investors, the Advisor will, consistent
with a Series' investment objective, policies and quality standards, consider
making investments in such new types of mortgage-related securities. The
Advisor will not purchase any such other mortgage-backed securities until the
Series' Prospectuses and this Statement of Additional Information have been
supplemented.

ASSET-BACKED SECURITIES
- -----------------------

The Series may invest a portion of its assets in debt obligations known as
"asset-backed securities." Asset-backed securities are securities that represent
a participation in, or are secured by and payable from, a stream of payments
generated by particular assets, most often a pool or pools of similar assets
(e.g., receivables on home equity and credit loans and receivables regarding
automobile, credit card, mobile home and recreational vehicle loans, wholesale
dealer floor plans and leases).

Such receivables are securitized in either a pass-through or a pay-through
structure. Pass-through securities provide investors with an income stream
consisting of both principal and interest payments in respect of the receivables
in the underlying pool. Pay-through asset-backed securities are debt
obligations issued usually by a special purpose entity, which are collateralized
by the various receivables and in which the payments on the underlying
receivables provide that the Series pay the debt service on the debt obligations
issued. The Series may invest in these and other types of asset-backed
securities that may be developed in the future.

The credit quality of these securities depends primarily upon the quality of the
underlying assets and the level of credit support and/or enhancement provided.
Such asset-backed securities are subject to the same prepayment risks as
mortgage-backed securities. For federal income tax purposes, the Series will be
required to accrue income on pay-through asset-backed securities using the
"catch-up" method, with an aggregate prepayment assumption.

16
<PAGE>

The credit quality of most asset-backed securities depends primarily on the
credit quality of the assets underlying such securities, how well the entity
issuing the security is insulated from the credit risk of the originator or any
other affiliated entities, and the amount and quality of any credit support
provided to the securities. The rate of principal payment on asset-backed
securities generally depends on the rate of principal payments received on the
underlying assets which in turn may be affected by a variety of economic and
other factors. As a result, the yield on any asset-backed security is difficult
to predict with precision and actual yield to maturity may be more or less than
the anticipated yield to maturity. Asset-backed securities may be classified as
"pass-through certificates" or "collateralized obligations."

Asset-backed securities are often backed by a pool of assets representing the
obligations of a number of different parties. To lessen the effect of failures
by obligors on underlying assets to make payment, such securities may contain
elements of credit support. Such credit support falls into two categories: (i)
liquidity protection; and (ii) protection against losses resulting from ultimate
default by an obligor on the underlying assets. Liquidity protection refers to
the provision of advances, generally by the entity administering the pool of
assets, to ensure that the receipt of payments due on the underlying pool is
timely. Protection against losses resulting from ultimate default enhances the
likelihood of payments of the obligations on at least some of the assets in the
pool. Such protection may be provided through guarantees, insurance policies or
letters of credit obtained by the issuer or sponsor from third parties, through
various means of structuring the transaction or through a combination of such
approaches. The Series will not pay any additional fees for such credit
support, although the existence of credit support may increase the price of a
security.

Due to the shorter maturity of the collateral backing such securities, there is
less of a risk of substantial prepayment than with mortgage-backed securities.
Such asset-backed securities do, however, involve certain risks not associated
with mortgage-backed securities, including the risk that security interests
cannot be adequately, or in many cases, ever, established. In addition, with
respect to credit card receivables, a number of state and federal consumer
credit laws give debtors the right to set off certain amounts owed on the credit
cards, thereby reducing the outstanding balance. In the case of automobile
receivables, there is a risk that the holders may not have either a proper or
first security interest in all of the obligations backing such receivables due
to the large number of vehicles involved in a typical issuance and technical
requirements under state laws. Therefore, recoveries on repossessed collateral
may not always be available to support payments on the securities.

Examples of credit support arising out of the structure of the transaction
include "senior-subordinated securities" (multiple class securities with one or
more classes subordinate to other classes as to the payment of principal thereof
and interest thereon, with the result that defaults on the underlying assets are
borne first by the holders of the subordinated class), creation of "reserve
funds" (where cash or investments, sometimes funded from a portion of the
payments on the underlying assets, are held in reserve against future losses)
and "over collateralization" (where the scheduled payments on, or the principal
amount of, the underlying assets exceeds that required to make payments of the
securities and pay any servicing or other fees). The degree of credit support
provided for each issue is generally based on historical information respecting
the level of credit information respecting the level of credit risk associated
with the underlying assets. Delinquencies or losses in excess of those
anticipated could adversely affect the return on an investment in such issue.

ZERO COUPON SECURITIES
- ----------------------

The Series 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 purchase price and their value at maturity. The
discount varies depending on the time remaining until maturity or cash payment
date, prevailing interest rates, liquidity of the security and the perceived
credit quality of the issuer. The discount, in the absence of financial
difficulties of the issuer, decreases as the final maturity or cash payment date
of the security approaches. The market prices of zero coupon and delayed
interest securities are generally more volatile and more likely to respond to
changes in interest rates than the market prices of securities having similar
maturities and credit qualities that pay interest periodically. Current federal
income tax law requires that a holder of a zero coupon security report as income
each year the portion of the original issue discount on such security (other
than tax-exempt original issue discount from a zero coupon security) that
accrues that year, even though the holder receives no cash payments of interest
during the year. The Series will be required to distribute such income to
shareholders to comply with Subchapter M of the Code and avoid excise taxes,
even though the Series have not received any cash from the issue.

17
<PAGE>

Zero coupon securities are subject to greater market value fluctuations from
changing interest rates than debt obligations of comparable maturities which
make current distributions of interest (cash). Zero coupon convertible
securities offer the opportunity for capital appreciation as increases (or
decreases) in market value of such securities closely follow the movements in
the market value of the underlying common stock. Zero coupon convertible
securities generally are expected to be less volatile than the underlying common
stocks as they usually are issued with short maturities (15 years or less) and
are issued with options and/or redemption features exercisable by the holder of
the obligation entitling the holder to redeem the obligation and receive a
defined cash payment.

Zero coupon securities include securities issued directly by the U.S. Treasury,
and U.S. Treasury bonds or notes and their unmatured interest coupons and
receipts for their underlying principal ("coupons") which have been separated by
their holder, typically a custodian bank or investment brokerage firm. A holder
will separate the interest coupons from the underlying principal (the "corpus")
of the U.S. Treasury security. A number of securities firms and banks have
stripped the interest coupons and receipts and then resold them in custodial
receipt programs with a number of different names, including "Treasury Income
Growth Receipts" ("TIGRS") and Certificate of Accrual on Treasuries ("CATS").
The underlying U.S. Treasury bonds and notes themselves are held in book-entry
form at the Federal Reserve Bank or, in the case of bearer securities (i.e.,
unregistered securities which are owned ostensibly by the bearer or holder
thereof), in trust on behalf of the owners thereof. Counsel to the underwriters
of these certificates or other evidences of ownership of the U.S. Treasury
securities has stated that for federal tax and securities purposes, in its
opinion, purchasers of such certificates, such as the Series, most likely will
be deemed the beneficial holder of the underlying U.S. government securities.
The Series understand that the staff of the SEC no longer considers such
privately stripped obligations to be U.S. government securities, as defined in
the Act; therefore, the Series intends to adhere to this staff position and
will not treat such privately stripped obligations to be U.S. government
securities for the purpose of determining if the Series is "diversified," or for
any other purpose, under the Act.

The U.S. Treasury has facilitated transfers of ownership of zero coupon
securities by accounting separately for the beneficial ownership of particular
interest coupon and corpus payments on Treasury securities through the Federal
Reserve book-entry record-keeping system. The Federal Reserve program as
established by the U.S. Treasury Department is known as "STRIPS" or "Separate
Trading of Registered Interest and Principal of Securities." Under the STRIPS
program, a Series will be able to have its beneficial ownership of zero coupon
securities recorded directly in the book-entry record-keeping system in lieu of
having to hold certificates or other evidences of ownership of the underlying
U.S. Treasury securities.

When U.S. Treasury obligations have been stripped of their unmatured interest
coupons by the holder, the principal or corpus is sold at a deep discount
because the buyer receives only the right to receive a future fixed payment on
the security and does not receive any rights to periodic interest (cash)
payments. Once stripped or separated, the corpus and coupons may be sold
separately. Typically, the coupons are sold separately or grouped with other
coupons with like maturity dates and sold in such bundled form. Purchasers of
stripped obligations acquire, in effect, discount obligations that are
economically identical to the zero coupon securities that the U.S. Treasury
sells itself. These stripped securities are also treated as zero coupon
securities with original issue discount for tax purposes.

INVESTMENTS RELATING TO THE GLOBAL FUND

EMERGING MARKETS INVESTMENTS (Global Fund only).
- ----------------------------

The Series may invest up to 10% of its assets in equity and debt securities of
emerging market issuers, or securities with respect to which the return is
derived from the equity or debt securities of issuers in emerging markets. The
Series may invest in equity securities of issuers in emerging markets, or
securities with respect to which the return is derived from the equity
securities of issuers in emerging markets. The Series also may invest in fixed
income securities of emerging market issuers, including government and
government-related entities (including participation in loans between
governments and financial institutions), and of entities organized to
restructure outstanding debt of such issuers. The Series also may invest in
debt securities of corporate issuers in developing countries.

The Series' investments in emerging market government and government-related
securities may consist of (i) debt securities or obligations issued or
guaranteed by governments, governmental agencies or instrumentalities and
political subdivisions located in emerging countries (including participation in
loans between governments and financial

18
<PAGE>

institutions), (ii) debt securities or obligations issued by government owned,
controlled or sponsored entities located in emerging countries and (iii)
interests in issuers organized and operated for the purpose of restructuring the
investment characteristics of instruments issued by any of the entities
described above.

The Series' investments in the fixed income securities of emerging market
issuers may include investments in Brady Bonds, Structured Securities, Loan
Participation and Assignments (as such capitalized terms are defined below), and
certain non-publicly traded securities.

Brady Bonds are securities created through the exchange of existing commercial
bank loans to public and private entities in certain emerging markets for new
bonds in connection with debt restructurings under a debt restructuring plan
introduced by former U.S. Secretary of the Treasury, Nicholas F. Brady (the
"Brady Plan"). Brady Bonds may be collateralized or uncollateralized, are issued
in various currencies (but primarily the U.S. dollar), and are actively traded
in over-the-counter secondary markets. Dollar-denominated, collateralized Brady
Bonds, which may be fixed-rate bonds or floating-rate bonds, are generally
collateralized in full as to principal by U.S. Treasury zero coupon bonds having
the same maturity as the bonds.

Structured Securities are issued by entities organized and operated solely for
the purpose of restructuring the investment characteristics of sovereign debt
obligations. This type of restructuring involves the deposit with, or purchase
by, an entity, such as a corporation or trust, of specified instruments (such as
commercial bank loans or Brady Bonds) and the issuance by that entity of one or
more classes of securities ("Structured Securities") backed by, or representing
interests in, the underlying instruments.

The Series may invest in fixed rate and floating rate loans ("Loans") arranged
through private negotiations between an issuer of sovereign debt obligations and
one or more financial institutions ("Lenders"). The Series' investments in
Loans are expected in most instances to be in the form of a participation in
loans ("Participation") and assignments of all or a portion of Loans
("Assignments") from third parties. The Series will have the right to receive
payments of principal, interest and any fees to which they are entitled only
from the Lender selling the Participation and only upon receipt by the Lender of
the payments from the borrower. In the event of the insolvency of the Lender
selling a Participation, the Series may be treated as a general creditor of the
Lender and may not benefit from any set-off between the Lender and the borrower.

When a Series purchases Assignments from Lenders, it will acquire direct rights
against the borrower on the Loan. However, because Assignments are arranged
through private negotiations between potential assignees and potential
assignors, the rights and obligations acquired by the Series as the purchaser of
an Assignment may differ from, and be more limited than, those held by the
assigning Lender.

The Series also may invest in securities that are neither listed on a stock
exchange nor traded over-the-counter, including privately placed securities and
limited partnerships. Investing in such unlisted emerging market equity
securities, including investments in new and early stage companies, may involve
a high degree of business and financial risk that can result in substantial
losses. As a result of the absence of a public trading market for these
securities, they may be less liquid than publicly traded securities.

The Series' investments in emerging market securities will at all times be
limited by the Series' prohibition on investing more than 15% of its net assets
in illiquid securities.

RISKS OF INVESTING IN EMERGING MARKETS
- --------------------------------------

Compared to the United States and other developed countries, emerging countries
may have relatively unstable governments, economies based on only a few
industries, and securities markets that trade only a small number of securities
and employ settlement procedures different from those used in the United States.
Prices on these exchanges tend to be volatile and, in the past, securities in
these countries have offered greater potential for gain (as well as loss) than
securities of companies located in developed countries. Further, investments by
foreign investors are subject to a variety of restrictions in many emerging
countries. Countries such as those in which the Series may invest have
historically experienced and may continue to experience, high rates of
inflation, high interest rates, exchange rate fluctuations or currency
depreciation, large amounts of external debt, balance of payments and trade
difficulties and

19
<PAGE>

extreme poverty and unemployment. Additional factors which may influence the
ability or willingness to service debt include, but are not limited to, a
country's cash flow situation, the availability of sufficient foreign exchange
on the date a payment is due, the relative size of its debt service burden to
the economy as a whole, its government's policy towards the International
Monetary Fund, the World Bank and other international agencies and the political
constraints to which a government debtor may be subject.

The ability of a foreign government or government-related issuer to make timely
and ultimate payments on its external debt obligations will be strongly
influenced by the issuer's balance of payments, including export performance,
its access to international credits and investments, fluctuations in interest
rates and the extent of its foreign reserves. A country whose exports are
concentrated in a few commodities or whose economy depends on certain strategic
imports could be vulnerable to fluctuations in international prices of these
commodities or imports. To the extent that a country receives payment for its
exports in currencies other than dollars, its ability to make debt payments
denominated in dollars could be adversely affected. If a foreign government or
government-related issuer cannot generate sufficient earnings from foreign trade
to service its external debt, it may need to depend on continuing loans and aid
from foreign governments, commercial banks, and multilateral organizations, and
inflows of foreign investment. The commitment on the part of these foreign
governments, multilateral organizations and others to make such disbursements
may be conditioned on the government's implementation of economic reforms and/or
economic performance and the timely service of its obligations. Failure to
implement such reforms, achieve such levels of economic performance or repay
principal or interest when due may curtail the willingness of such third parties
to lend funds, which may further impair the issuer's ability or willingness to
service its debts in a timely manner. The cost of servicing external debt will
also generally be adversely affected by rising international interest rates,
because many external debt obligations bear interest at rates which are adjusted
based upon international interest rates. The ability to service external debt
will also depend on the level of the relevant government's international
currency reserves and its access to foreign exchange. Currency devaluations may
affect the ability of a governmental issuer to obtain sufficient foreign
exchange to service its external debt.

As a result of the foregoing, a governmental issuer may default on its
obligations. If such a default occurs, the Series may have limited effective
legal recourse against the issuer and/or guarantor. Remedies must, in some
cases, be pursued in the courts of the defaulting country itself, and the
ability of the holder of foreign government and government-related debt
securities to obtain recourse may be subject to the political climate in the
relevant country. In addition, no assurance can be given that the holders of
commercial bank debt will not contest payments to the holders of other foreign
government and government-related debt obligations in the event of default under
their commercial bank loan agreements.

The issuers of the government and government-related debt securities in which
the Series expects to invest have in the past experienced substantial
difficulties in servicing their external debt obligations, which has led to
defaults on certain obligations and the restructuring of certain indebtedness.
Restructuring arrangements have included, among other things, reducing and
rescheduling interest and principal payments by negotiating new or amended
credit agreements or converting outstanding principal and unpaid interest to
Brady Bonds, and obtaining new credit to finance interest payments. Holders of
certain foreign government and government-related debt securities may be
requested to participate in the restructuring of such obligations and to extend
further loans to their issuers. There can be no assurance that the Brady Bonds
and other foreign government and government-related debt securities in which the
Series may invest will not be subject to similar defaults or restructuring
arrangements which may adversely affect the value of such investments.
Furthermore, certain participants in the secondary market for such debt may be
directly involved in negotiating the terms of these arrangements and may
therefore have access to information not available to other market participants.

Payments to holders of the high yield, high risk, foreign debt securities in
which the Series may invest may be subject to foreign withholding and other
taxes. Although the holders of foreign government and government-related debt
securities may be entitled to tax gross-up payments from the issuers of such
instruments, there is no assurance that such payments will be made.

INVESTMENTS IN AFFILIATED INVESTMENT COMPANIES
- ----------------------------------------------

The Series may invest in securities issued by other registered investment
companies advised by Brinson Partners

20
<PAGE>

pursuant to exemptive relief granted by the SEC. Currently, the Global Fund is
the only Series of the Trust that intends to invest in portfolios of Brinson
Relationship Funds, another investment company which is advised by Brinson
Partners, and only to the extent consistent with the Advisor's investment
process of allocating assets to specific asset classes. The Global Fund will
invest in corresponding portfolios of Brinson Relationship Funds only to the
extent that the Advisor determines that such investments are a more efficient
means for the Global Fund to gain exposure to the asset classes referred to
below than by investing directly in individual securities.

To gain exposure to equity and fixed income securities of issuers located in
emerging market countries, the Global Fund may invest that portion of its
assets allocated to emerging markets investments in the Brinson Emerging Markets
Equity Fund portfolio and the Brinson Emerging Markets Debt Fund portfolio of
Brinson Relationship Funds. The investment objective of the Brinson Emerging
Markets Equity Fund and the Brinson Emerging Markets Debt Fund is to maximize
total U.S. dollar return, consisting of capital appreciation and current income,
while controlling risk. Under normal circumstances, at least 65% of the total
assets of the Brinson Emerging Markets Equity Fund is invested in the equity
securities of issuers in emerging markets or securities with respect to which
the return is derived from the equity securities of issuers in emerging markets.
At least 65% of the total assets of the Brinson Emerging Markets Debt Fund is
invested in the debt securities issued by governments, government-related
entities (including participations in loans between governments and financial
institutions), corporations and entities organized to restructure outstanding
debt of issuers in emerging markets, or debt securities the return on which is
derived primarily from other emerging markets instruments. The Brinson Emerging
Markets Equity Fund and Brinson Emerging Markets Debt Fund are permitted to
invest in the same types of securities as the Global Fund may invest in
directly.

In lieu of investing directly in certain high yield, higher risk securities, the
Global Fund may invest a portion of its assets in the Brinson High Yield Fund
portfolio (the "High Yield Fund") of Brinson Relationship Funds. The investment
objective of the High Yield Fund is to maximize total U.S. dollar return,
consisting of capital appreciation and current income, while controlling risk.
The High Yield Fund maintains a high yield portfolio and as such, at least 65%
of its assets are invested in high yield securities. The Global Fund currently
intends to limit its investment in non-investment grade debt securities to no
more than 5% of its net assets. Any investment in the High Yield Fund will be
considered within this limitation.

In lieu of investing directly in equity securities issued by companies with
relatively small overall market capitalizations, the Global Fund may invest a
portion of its assets in the Brinson Post-Venture Fund (the "Post-Venture Fund")
portfolio of Brinson Relationship Funds. The investment objective of the Post-
Venture Fund is to maximize total U.S. dollar return, consisting of capital
appreciation and current income, while controlling risk. The Post-Venture Fund
invests primarily in publicly- traded companies representing the lower 5% of the
Wilshire 5000 Index, and, as such, at least 65% of its assets are invested in
small capitalization equity securities.

Each portfolio of Brinson Relationship Funds in which the Global Fund may invest
is permitted to invest in the same securities of a particular asset class in
which the Global Fund is permitted to invest directly, and with similar risks.
Pursuant to undertakings with the SEC, the Global Fund will not be subject to
the imposition of double management or administration fees with respect to its
investments in Brinson Relationship Funds.

INVESTMENT RESTRICTIONS

The investment restrictions set forth below are fundamental policies and may not
be changed as to a Series, without the approval of a majority of the outstanding
voting securities (as defined in the Act) of the Series. Unless otherwise
indicated, all percentage limitations listed below apply to the Series only at
the time of the transaction. Accordingly, if a percentage restriction is
adhered to at the time of investment, a later increase or decrease in the
percentage which results from a relative change in values or from a change in a
Series' total assets will not be considered a violation.

Except as set forth under "Investment Objectives and Policies" and "Investment
Considerations and Risks" in each Prospectus, or "Investment Strategies" in
this Statement of Additional Information, each Series may not:

(i) As to 75% of the total assets of each Series, purchase the
securities of any one issuer, other than securities issued by the
U.S. government or its agencies or instrumentalities, if

21
<PAGE>

immediately after such purchase more than 5% of the value of the
total assets of a Series would be invested in securities of such
issuer (this does not apply to the Global Bond Fund);

(ii) Invest in real estate or interests in real estate (This will not
prevent a Series from investing in publicly-held real estate
investment trusts or marketable securities of companies which may
represent indirect interests in real estate.), interests in oil, gas
and/or mineral exploration or development programs or leases;

(iii) Purchase or sell commodities or commodity contracts, but may enter
into futures contracts and options thereon in accordance with its
Prospectus. Additionally, each Series may engage in forward foreign
currency contracts for hedging and non-hedging purposes;

(iv) Make investments in securities for the purpose of exercising
control over or management of the issuer;

(v) Purchase the securities of any one issuer if, immediately after such
purchase, a Series would own more than 10% of the outstanding voting
securities of such issuer;

(vi) Sell securities short or purchase securities on margin, except such
short-term credits as are necessary for the clearance of
transactions. For this purpose, the deposit or payment by a Series
for initial or maintenance margin in connection with futures
contracts is not considered to be the purchase or sale of a security
on margin;

(vii) Make loans, except that this restriction shall not prohibit (a) the
purchase and holding of a portion of an issue of publicly
distributed or privately placed debt securities, (b) the lending of
portfolio securities, or (c) entry into repurchase agreements with
banks or broker-dealers;

(viii) Borrow money in excess of 33 1/3% of the value of its assets except
as a temporary measure for extraordinary or emergency purposes to
facilitate redemptions or issue senior securities. All borrowings
will be done from a bank and to the extent that such borrowing
exceeds 5% of the value of a Series' assets, asset coverage of at
least 300% is required. A Series will not purchase securities when
borrowings exceed 5% of that Series' total assets;

(ix) Purchase the securities of issuers conducting their principal
business activities in the same industry, other than obligations
issued or guaranteed by the U.S. government, its agencies or
instrumentalities, if immediately after such purchase, the value of
a Series' investments in such industry would exceed 25% of the value
of the total assets of the Series across several countries;

(x) Act as an underwriter of securities, except that, in connection with
the disposition of a security, a Series may be deemed to be an
"underwriter" as that term is defined in the Securities Act of 1933;

(xi) Invest in securities of any open-end investment company, except that
(i) a Series may purchase securities of money market mutual funds,
(ii) the Global Fund and Global Equity Fund may each invest in the
securities of closed-end investment companies at customary brokerage
commission rates in accordance with the limitations imposed by the
Act and the rules thereunder, and (iii) in accordance with any
exemptive order obtained from the SEC which permits investment by a
Series in other Series or other investment companies or series
thereof advised by the Advisor. In addition, each Series may acquire
securities of other investment companies if the securities are
acquired pursuant to a merger, consolidation, acquisition, plan of
reorganization or a SEC approved offer of exchange;

(xii) Invest in puts, calls, straddles or combinations thereof except to
the extent disclosed in a Series' Prospectus; and

22
<PAGE>

(xiii) Invest more than 5% of its total assets in securities of companies
less than three years old. Such three year periods shall include the
operation of any predecessor company or companies.

Although not considered fundamental, in order to comply with certain state "blue
sky" restrictions, each Series will not invest: (1) more than 5% of its
respective net assets in warrants, including within that amount no more than 2%
in warrants which are not listed on the New York or American Stock Exchanges,
except warrants acquired as a result of its holdings of common stocks; and (2)
purchase or retain the securities of any issuer if, to the knowledge of the
Series, any officer or Trustee of the Trust or of its Advisor owns beneficially
more than 1/2 of 1% of the outstanding securities of such issuer, and such
officers and Trustees of the Trust or of its Advisor who own more than 1/2 of
1%, own in the aggregate, more than 5% of the outstanding securities of such
issuer.

MANAGEMENT OF THE TRUST

TRUSTEES AND OFFICERS
<TABLE>
<CAPTION>
POSITION
WITH
NAME AND ADDRESS AGE THE TRUST PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS
- ---------------- --- --------- -------------------------------------------
<S> <C> <C> <C>
Walter E. Auch 75 Trustee Retired; formerly Chairman and CEO of Chicago Board of
6001 N. 62nd Place Options Exchange (1979-1986); Trustee of the Trust since
Paradise Valley, AZ May, 1994; Trustee, Brinson Relationship Funds since
85253 December, 1994; Director, Thomsen Asset Management
Corp. since 1987; Director, Fort Dearborn Income
Securities, Inc. since 1987; Director, Geotek Industries,
Inc. since 1989; Director, Smith Barney VIP Fund since
1991; Director, SB Advisers since 1992; Director, SB
Trak since 1992; Director, Banyan Realty Trust since 1987;
Director, Banyan Land Fund II since 1988; Director,
Banyan Mortgage Investment Fund since 1989; and
Director, Express America Holdings Corp. since 1992.

Frank K. Reilly 60 Chairman and Professor, University of Notre Dame since 1981; Trustee
College of Business Trustee of the Trust since December, 1993; Trustee, Brinson
Administration Relationship Funds since September, 1994; Director of The
University of Brinson Funds, Inc. 1992-1993; Trustee, Brinson Trust
Notre Dame Company, 1992-July, 1993; Director, Fort Dearborn
208 Hurley Building Income Securities, Inc. since 1993; Director, First Interstate
Notre Dame, IN 46556 Bank of Wisconsin from January, 1989 through March,
1990; Director, Discover Financing Corp., from 1990 to
1991; and Director, Greenwood Trust Company since
1993.

Edward M. Roob 61 Trustee Retired; prior thereto, Senior Vice President, Daiwa
841 Woodbine Lane Securities America Inc. (1986-1993); Trustee of the Trust
Northbrook, IL 60002 since January, 1995; Trustee, Brinson Relationship Funds
since January 1995; Director, Fort Dearborn Income
Securities, Inc. since 1993; Director, Brinson Trust
Company since 1993; Committee Member, Chicago Stock
Exchange since 1993; Member of Board of Governors,
Midwest Stock Exchange (1987-1991).
</TABLE>

23
<PAGE>

OTHER OFFICERS
<TABLE>
<CAPTION>
POSITION
WITH THE OFFICER
NAME AGE TRUST SINCE PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS
- ---- --- -------- ------- -----------------------------------------------------
<S> <C> <C> <C> <C>
E. Thomas McFarlan 52 President 1993 Managing Partner, Brinson Partners, Inc. since 1991;
and President and Director of The Brinson Funds, Inc. 1992-
Treasurer 1993; Trustee, Brinson Trust Company since 1991; prior
thereto, Executive Vice President of Washington Mutual
Savings Bank.

Bruce G. Leto 34 Secretary 1995 Partner, Stradley, Ronon, Stevens & Young, LLP since
1994; prior thereto, Senior Associate.

Thomas J. Digenan 32 Assistant 1993 Partner, Brinson Partners, Inc. since 1993; Assistant
Treasurer Secretary The Brinson Funds, Inc. 1993 - 1994; prior
thereto, Senior Manager, KPMG Peat Marwick.

Debra L. Nichols 30 Assistant 1993 Partner, Brinson Partners, Inc. since 1995; Associate,
Secretary Brinson Partners, Inc. since 1991; Assistant Secretary, The
Brinson Funds, Inc. 1992-1993; prior thereto, private
investor.

Catherine E. Macrae 38 Assistant 1995 Associate, Brinson Partners, Inc. since 1992; prior thereto,
Secretary Economic Analyst, Chicago Mercantile Exchange.

Carolyn M. Burke 29 Assistant 1995 Associate, Brinson Partners, Inc, since 1995; prior thereto,
Secretary Financial Analyst, Van Kampen American Capital
Investment Advisory Corp. 1992-1995; Senior Accountant,
KPMG Peat Marwick 1989-1992.
</TABLE>

COMPENSATION TABLE

TRUSTEES AND OFFICERS
<TABLE>
<CAPTION>
AGGREGATE COMPENSATION TOTAL COMPENSATION FROM
FROM TRUST FOR FISCAL YEAR TRUST AND FUND COMPLEX
NAME AND POSITION HELD ENDED JUNE 30, 1996 PAID TO TRUSTEES/1/
- ---------------------- -------------------------- -----------------------
<S> <C> <C>
Walter E. Auch, Trustee $12,600 $26,200
6001 N. 62nd Place
Paradise Valley, AZ 85253

Frank K. Reilly, Trustee $12,600 $23,700
College of Business Administration
University of Notre Dame
208 Hurley Building
Notre Dame, IN 46556

Edward M. Roob, Trustee $12,600 $26,200
841 Woodbine Lane
Northbrook, IL 60002
</TABLE>

/1/ This amount represents the aggregate amount of compensation paid to the
Trustees for (a) service on the Board of Trustees for the Trust's most
recently completed fiscal year; and (b) service on the Board of Directors
of two other investment companies managed by Brinson Partners for the
calendar year ending December 31, 1995.

24
<PAGE>

No officer or Trustee of the Trust who is also an officer or employee of Brinson
Partners receives any compensation from the Trust for services to the Trust. The
Trust pays each Trustee who is not affiliated with Brinson Partners a fee of
$6,000 per year, plus $300 per Series per meeting, and reimburses each Trustee
and officer for out-of-pocket expenses in connection with travel and attendance
at Board meetings.

The Board of Trustees has an Audit Committee which has the responsibility, among
other things, to (i) recommend the selection of the Trust's independent
auditors, (ii) review and approve the scope of the independent auditors' audit
activity, (iii) review the financial statements which are the subject of the
independent auditors' certification, and (iv) review with such independent
auditors the adequacy of the Series' basic accounting system and the
effectiveness of the Series' internal accounting controls. The Audit Committee
met once during the fiscal year ended June 30, 1996. There is no separate
nominating or investment committee. Items pertaining to these committees are
submitted to the full Board of Trustees.

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

As of August 1, 1996, the officers and Trustees, as a group, owned beneficially
96,998.987 outstanding voting shares of the Global Fund, 3,801.710 shares of the
Global Bond Fund and 58.181 shares of the U.S. Equity Fund, which in the
aggregate amount to 100,858.87 shares of the Trust.

As of August 1,1996, the following persons owned of record or beneficially more
than 5% of the outstanding voting shares of the Brinson Fund class, SwissKey
Fund class or the Series, as applicable:

GLOBAL FUND

<TABLE>
<CAPTION>
Percentage of Percentage of
Name & Address of Beneficial Owners Class Series
- ----------------------------------- ------------- -------------
BRINSON FUND CLASS
- ------------------
<S> <C> <C>

First Alabama Bank 12.19% 11.82%
Mobile, AL

Polk Bros. Foundation 8.72% 8.45%
Evanston, IL

Medical College of Virginia Foundation 8.59% 8.33%
Richmond, VA

NationsBank of Georgia NA Trustee 7.60% 7.37%
Dallas, TX

Northern Trust Company 5.72% 5.55%
Chicago, IL

SWISSKEY FUND CLASS
- -------------------

Swiss Bank Corporation* 74.19% -----
New York, NY

Hans Frisch and Alfred Frisch JT TEN COMM 7.48% -----
Jacksonville, FL

Semper Trust Co. C/F/ IRA 5.85% -----
R/O of William J. Casey
St. Helena, CA
</TABLE>

25
<PAGE>

GLOBAL EQUITY FUND

United States Japan Foundation*+ 88.55% 39.64%
New York, NY

SWISSKEY FUND CLASS
- -------------------

Swiss Bank Corporation*+ 51.03% 28.18%
New York, NY

Fox & Co.
New York, NY 5.19% -----

GLOBAL BOND FUND
BRINSON FUND CLASS
- ------------------

Baptist Health Systems, Inc.*+ 28.3% 26.06%
Birmingham, AL

Munson Williams Proctor Institute* 25.08% 23.08%
Utica, NY

Abell Foundation, Inc. 19.17% 17.64%
Baltimore, MD

First National Bank of Chicago
Chicago, IL 9.30% 8.56%

Ripon College 9.00% 8.28%
Ripon, WI

SWISSKEY FUND CLASS
- -------------------

Swiss Bank Corporation* 69.55% 5.56%
New York, NY

U.S. BALANCED FUND
BRINSON FUND CLASS
- ------------------

State Street Bank & Trust Co.*+ 71.82% 71.57%
Boston, MA

MAC & Co. 12.26% 12.22%
Pittsburgh, PA

Mitra & Co 6.69% 6.67%
Milwaukee, WI

SWISSKEY FUND CLASS
- -------------------

Blush & Co.*
New York, NY 62.10% -----
</TABLE>

26
<PAGE>

<TABLE>
<CAPTION>
Percentage of Percentage of
Name & Address of Beneficial Owners Class Series
- ----------------------------------- ------------- -------------

SWISSKEY FUND CLASS (CON'T)
- -------------------
<S> <C> <C>

Swiss Bank Corporation* 33.18% -----
New York, NY

U.S. EQUITY FUND

BRINSON FUND CLASS
- ------------------

Swiss Bank Corporation*+ 38.96% 37.31%
Chicago, IL

Wachovia Bank of North Carolina 14.47% 13.85%
Winston Salem, NC

American Institute of Physics 8.37% 8.01%
College Park, MD

Emma & Co.
Springdale, AR 6.36% 6.09%

SWISSKEY FUND CLASS
- -------------------

Blush & Co.
New York, NY* 62.10% -----

Swiss Bank Corporation* 31.29% -----
New York, NY

U.S. BOND FUND

BRINSON FUND CLASS
- ------------------

Swiss Bank Corporation*+ 99.32% 92.70%
Chicago, IL

SWISSKEY FUND CLASS
- -------------------

Swiss Bank Corporation* 96.93% -----
New York, NY

NON-U.S. EQUITY FUND

BRINSON FUND CLASS
- ------------------

Edna McConnell Clark Foundation 7.76% 7.73%
New York, NY

Northern Trust Company 7.46% 7.43%
Chicago, IL

Society National Bank 7.14% 7.10%
Cleveland, OH
</TABLE>

27
<PAGE>

NON-U.S. EQUITY FUND
<TABLE>
<CAPTION>
Percentage of Percentage of
Name & Address of Beneficial Owners Class Series
- ----------------------------------- ------------- -------------

BRINSON FUND CLASS (CON'T)
- ------------------
<S> <C> <C>
McConnell Foundation 6.84% 6.81%
Redding, CA

MAC & Co.
FBO Sisters of Charity, Inc. 6.28% 6.25%
Pittsburgh, PA

Fifth Third Bank 5.53% 5.50%
Cincinnati, OH

MAC & Co. 5.41% 5.38%
Pittsburgh, PA

Bentley College 5.34% 5.31%
Waltham, MA

SWISSKEY FUND CLASS
- -------------------

Swiss Bank Corporation* 41.14% -----
New York, NY

Blush & Co.* 29.10% -----
New York, NY

Schweizerischer Bankverein 7.83% -----
Zurich, Switzwerland

Fox & Co. 6.76% -----
New York, NY
</TABLE>

* Person deemed to control the class within the meaning of the Act. Note that
such persons possess the ability to control the outcome of matters submitted
for the vote of shareholders of that class.

+ Person deemed to control the Series within the meaning of the Act. Note that
such persons possess the ability to control the outcome of matters submitted
for the vote of shareholders of that Series.

As of August 1, 1996, the following persons owned of record or beneficially more
than 5% of the outstanding voting shares of the Trust:

Name & Address of Beneficial Owners Percentage of Trust
- ----------------------------------- -------------------

State Street Bank & Trust Co. 14.04%
Boston, MA

INVESTMENT ADVISORY AND OTHER SERVICES

ADVISOR
- -------
Brinson Partners, a Delaware corporation, is an investment management firm
managing, as of June 30, 1996, approximately $58 billion, primarily for
institutional pension and profit sharing funds. Brinson Partners was organized
in 1989 when it acquired the institutional asset management business of The
First National Bank of Chicago and First

28
<PAGE>

Chicago Investment Advisors, N.A. Brinson Partners and its predecessor entities
have managed domestic and international investment assets since 1974 and global
investment assets since 1982. Brinson Partners has offices in Basel, London,
Melbourne, New York, Paris, Singapore, Sydney and Tokyo, in addition to its
principal office at 209 South LaSalle Street, Chicago, IL 60604-1295. Brinson
Partners is an indirect wholly-owned subsidiary of Swiss Bank Corporation
("Swiss Bank"). Swiss Bank, with headquarters in Basel, Switzerland, is an
internationally diversified organization with operations in many aspects of the
financial services industry. Brinson Partners also serves as the investment
advisor to seven other investment companies: Brinson Relationship Funds, which
includes six investment portfolios (series); Enterprise Accumulation Trust;
Enterprise International Growth Portfolio; Fort Dearborn Income Securities,
Inc.; Hirtle Callaghan International Trust; John Hancock Variable Series Trust -
International Balanced Portfolio; and Pace Large Company Value Equity
Investments.

Pursuant to its investment advisory agreements (the "Agreements") with the
Trust, on behalf of each Series, Brinson Partners receives from each Series a
monthly fee at an annual rate (as described in each Series' Prospectus and
below) multiplied by the average daily net assets of that Series for providing
investment advisory services. Brinson Partners is responsible for paying its
expenses. Under the Agreements, each Series pays the following expenses: (1) the
fees and expenses of the Trust's disinterested Trustees; (2) the salaries and
expenses of any of the Trust's officers or employees who are not affiliated with
Brinson Partners; (3) interest expenses; (4) taxes and governmental fees; (5)
brokerage commissions and other expenses incurred in acquiring or disposing of
portfolio securities; (6) the expenses of registering and qualifying shares for
sale with the SEC and with various state securities commissions; (7) auditing
and legal costs; (8) insurance premiums; (9) fees and expenses of the Trust's
custodian, administrative and transfer agent and any related services; (10)
expenses of obtaining quotations of the Series' portfolio securities and of
pricing the Series' shares; (11) expenses of maintaining the Trust's legal
existence and of shareholders' meetings; (12) expenses of preparation and
distribution to existing shareholders of reports, proxies and prospectuses; and
(13) fees and expenses of membership in industry organizations.

The Series pay the Advisor a monthly fee of the respective Series' average daily
net assets as follows: annual rates of 0.80% for the Global Fund, Global Equity
Fund and Non-U.S. Equity Fund; 0.75% for the Global Bond Fund; 0.70% for the
U.S. Balanced Fund and U.S. Equity Fund; and 0.50% for the U.S. Bond Fund. The
Advisor has agreed irrevocably to waive its fees and reimburse expenses to the
extent that total operating expenses exceed the following rates of the
respective Series' average daily net assets as follows, without regard to Rule
12b-1 Plan expenses for the SwissKey Fund classes of each Series: 1.10% for the
Global Fund; 1.00% for the Global Equity Fund and the Non-U.S. Equity Fund;
0.90% for the Global Bond Fund; 0.80% for the U.S. Balanced Fund and the U.S.
Equity Fund; and 0.60% for the U.S. Bond Fund.

Advisory fees accrued to Brinson Partners were as follows:

A. FISCAL YEAR ENDED JUNE 30, 1994*
- -------------------------------------------------------------------------------------------
SERIES GROSS ADVISORY FEES NET ADVISORY FEES PAID FUND EXPENSES PAID
EARNED BY ADVISOR AFTER FEE WAIVER BY ADVISOR
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
GLOBAL FUND $1,951,309 $1,860,397 $ 30,946
- -------------------------------------------------------------------------------------------
GLOBAL EQUITY FUND $ 68,151 $ 0.00 $ 82,834
- -------------------------------------------------------------------------------------------
GLOBAL BOND FUND $ 189,136 $ 0.00 $149,667
- -------------------------------------------------------------------------------------------
U.S. BALANCED FUND NA NA NA
- -------------------------------------------------------------------------------------------
U.S. EQUITY FUND $ 14,819 $ 0.00 $ 63,834
- -------------------------------------------------------------------------------------------
U.S. BOND FUND NA NA NA
- -------------------------------------------------------------------------------------------
NON-U.S. EQUITY FUND $ 300,928 $ 74,698 $136,835
- -------------------------------------------------------------------------------------------
</TABLE>

* The Global Equity Fund commenced investment operations on January 28, 1994;
Global Bond Fund commenced investment operations on July 30, 1993; U.S.
Balanced Fund commenced investment operations on December 30, 1994; U.S.
Equity Fund commenced investment operations on February 22, 1994; U.S. Bond
Fund commenced

29
<PAGE>

investment operations on August 31, 1995; and Non-U.S. Equity Fund commenced
investment operations on August 31, 1993.

B. FISCAL YEAR ENDED JUNE 30, 1995
- -------------------------------------------------------------------------------------------
SERIES GROSS ADVISORY FEES NET ADVISORY FEES PAID FUND EXPENSES PAID
EARNED BY ADVISOR AFTER FEE WAIVER BY ADVISOR
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
GLOBAL FUND $2,681,392 $2,681,392 $ 0.00
- -------------------------------------------------------------------------------------------
GLOBAL EQUITY FUND $ 163,038 $ 0.00 $216,658
- -------------------------------------------------------------------------------------------
GLOBAL BOND FUND $ 329,156 $ 95,216 $233,940
- -------------------------------------------------------------------------------------------
U.S. BALANCED FUND $ 441,419 $ 275,707 $165,712
- -------------------------------------------------------------------------------------------
U.S. EQUITY FUND $ 154,258 $ 0.00 $199,708
- -------------------------------------------------------------------------------------------
U.S. BOND FUND NA NA NA
- -------------------------------------------------------------------------------------------
NON-U.S. EQUITY FUND $ 933,521 $ 666,061 $267,460
- -------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
C. FISCAL YEAR ENDED JUNE 30, 1996
- -------------------------------------------------------------------------------------------
SERIES GROSS ADVISORY FEES NET ADVISORY FEES PAID FUND EXPENSES PAID
EARNED BY ADVISOR AFTER FEE WAIVER BY ADVISOR
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
GLOBAL FUND $3,415,057 $3,415,057 $ 0.00
- -------------------------------------------------------------------------------------------
GLOBAL EQUITY FUND $ 390,824 $ 12,198 $378,626
- -------------------------------------------------------------------------------------------
GLOBAL BOND FUND $ 310,066 $ 158 $309,908
- -------------------------------------------------------------------------------------------
U.S. BALANCED FUND $1,465,283 $1,015,531 $449,752
- -------------------------------------------------------------------------------------------
U.S. EQUITY FUND $ 638,063 $ 326,322 $311,741
- -------------------------------------------------------------------------------------------
U.S. BOND FUND $ 37,868 $ 0.00 $230,216
- -------------------------------------------------------------------------------------------
NON-U.S. EQUITY FUND $1,403,109 $1,050,199 $352,910
- -------------------------------------------------------------------------------------------
</TABLE>

General expenses of the Trust (such as costs of maintaining corporate existence,
legal fees, insurances, etc.) will be allocated among the Series in proportion
to their relative net assets. Expenses which relate exclusively to a particular
Series, such as certain registration fees, brokerage commissions and other
portfolio expenses, will be borne directly by that Series.

Brinson Partners has agreed to waive its advisory fee in an amount equal to the
total expenses of a Series for any fiscal year which exceeds the permissible
limits applicable to that Series in any state in which its shares are then
qualified for sale. At the present time, the most restrictive state expense
limitation limits a fund's annual expenses (excluding interest, taxes,
distribution expense, brokerage commissions and extraordinary expenses and other
expenses subject to approval by state securities administrators) to 2.5% of the
first $30 million of its average daily net assets, 2.0% of the next $70 million
of its average daily net assets and 1.5% of its average daily net assets in
excess of $100 million.

ADMINISTRATOR
- -------------

FPS Services, Inc., 3200 Horizon Drive, King of Prussia, PA 19406-0903
(the "Administrator"), provides certain administrative services to the Trust
pursuant to an administration agreement (the "Administration Agreement").

Under the Administration Agreement, the Administrator: (1) coordinates with the
custodian and transfer agent and monitors the services they provide to the
Series; (2) coordinates with and monitors any other third parties furnishing

30
<PAGE>

services to the Series; (3) provides the Series with necessary office space,
telephones and other communications facilities and personnel competent to
perform administrative and clerical functions; (4) supervises the maintenance by
third parties of such books and records of the Series as may be required by
applicable federal or state law; (5) prepares or supervises the preparation by
third parties of all federal, state and local tax returns and reports of the
Series required by applicable law; (6) prepares and, after approval by the
Series, files and arranges for the distribution of proxy materials and periodic
reports to shareholders of the Series as required by applicable law; (7)
prepares and, after approval by the Series, arranges for the filing of such
registration statements and other documents with the SEC and other federal and
state regulatory authorities as may be required by applicable law; (8) reviews
and submits to the officers of the Trust for their approval invoices or other
requests for payment of the Series' expenses and instructs the custodian to
issue checks in payment thereof; and (9) takes such other action with respect to
the Trust or the Series as may be necessary in the opinion of the Administrator
to perform its duties under the Administration Agreement.

As compensation for services performed under the Administration Agreement, the
Administrator receives a fee payable monthly at an annual rate (as described in
each Series' Prospectus) multiplied by the average daily net assets of the
Trust.

Administration fees paid to FPS Services, Inc. were as follows:

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
SERIES FISCAL YEAR ENDED FISCAL YEAR ENDED FISCAL YEAR ENDED
JUNE 30, 1994 JUNE 30, 1995 JUNE 30, 1996
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
GLOBAL FUND $186,897 $211,243 $293,601
- -------------------------------------------------------------------------------
GLOBAL EQUITY FUND $ 6,064 $ 15,062 $ 32,468
- -------------------------------------------------------------------------------
GLOBAL BOND FUND $ 19,968 $ 28,889 $ 29,216
- -------------------------------------------------------------------------------
U.S. BALANCED FUND NA $ 39,523 $140,841
- -------------------------------------------------------------------------------
U.S. EQUITY FUND $ 3,482 $ 15,362 $ 58,286
- -------------------------------------------------------------------------------
U.S. BOND FUND NA NA $ 58,286
- -------------------------------------------------------------------------------
NON-U.S. EQUITY FUND $ 23,597 $ 72,350 $119,433
- -------------------------------------------------------------------------------
</TABLE>

UNDERWRITER
- -----------

FPS Broker Services, Inc. ("FPSB"), 3200 Horizon Drive, King of Prussia,
PA 19406-0903, acts as an underwriter of the Series' continuous offer of shares
for the purpose of facilitating the registration of the shares of the Series
under state securities laws and to assist in sales of shares pursuant to an
underwriting agreement (the "Underwriting Agreement") approved by the Board of
Trustees. In this regard, FPSB has agreed at its own expense to qualify as a
broker-dealer under all applicable federal or state laws in those states which
the Trust shall from time to time identify to FPBS as states in which it wishes
to offer the Series' shares for sale, in order that state registrations may be
maintained for the Series.

FPSB is a broker-dealer registered with the SEC and a member in good standing of
the National Association of Securities Dealers, Inc.

For the services to be provided to the Trust under the Underwriting Agreement,
FPSB is entitled to receive an annual fixed fee of $7,500 for one Series, plus
$2,500 for each additional operational Series or class, payable in advance.
These fees are fixed for a one (1) year period from the date of the Underwriting
Agreement and may be increased or decreased in future years by an amendment
signed by both the Trust and FPSB. The fees for such services are borne entirely
by the Advisor. The Trust does not impose any sales loads or redemption fees.
Each Series shall continue to bear the expense of all filing or registration
fees incurred in connection with the registration of shares under state
securities laws.

The Underwriting Agreement may be terminated by either party upon sixty (60)
days' prior written notice to the other party, and if so terminated, the pro
rata portion of the unearned fee will be returned to the Trust.

31
<PAGE>

DISTRIBUTION PLAN
- -----------------

The Board of Trustees of the Trust has adopted a distribution plan (the "Plan")
pursuant to Rule 12b-1 under the Act, for each Series' SwissKey Fund class
shares. The Plan permits each Series to reimburse FPBS, Brinson Partners and
others from the assets of the SwissKey Fund class shares a quarterly fee for
services and expenses incurred in distributing and promoting sales of SwissKey
Fund class shares. The aggregate fees paid by the SwissKey Fund class shares to
FPBS and others under the Plan may not exceed 0.90% of a SwissKey Fund classes'
average daily net assets in any year.

The Plan does not apply to the Brinson Fund class shares of each Series and
those shares are not included in calculating the Plan's fees. Amounts spent on
behalf of each SwissKey Fund class pursuant to the Plan during the fiscal year
ended June 30, 1996 are set forth below.

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
FUND PRINTING DISTRIBUTION COMPENSATION COMPENSATION COMPENSATION TO ADVERTISING OTHER
SERVICES TO TO SWISS BANK SALES
UNDERWRITERS DEALERS PERSONNEL
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
SwissKey Global $ 554.54 $857.14 $714.29 $0.00 $ 9,160.75 $685.45 $357.98
Fund
- ------------------------------------------------------------------------------------------------------------------------------------
SwissKey Global $8,010.38 $857.14 $714.29 $0.00 $92,602.80 $685.45 $357.98
Equity Fund
- ------------------------------------------------------------------------------------------------------------------------------------
SwissKey Global $ 530.12 $857.14 $714.29 $0.00 $ 3,074.92 $685.45 $357.98
Bond Fund
- ------------------------------------------------------------------------------------------------------------------------------------
SwissKey U.S. $ 52.56 $857.14 $714.29 $0.00 $ 319.48 $685.45 $357.98
Balanced Fund
- ------------------------------------------------------------------------------------------------------------------------------------
SwissKey U.S. $ 66.50 $857.14 $714.29 $0.00 $ 1,498.85 $685.45 $357.98
Equity Fund
- ------------------------------------------------------------------------------------------------------------------------------------
SwissKey U.S. $ 41.80 $857.14 $714.29 $0.00 $ 380.59 $685.45 $357.98
Bond Fund
- ------------------------------------------------------------------------------------------------------------------------------------
SwissKey Non- $ 88.10 $857.14 $714.29 $0.00 $ 1,399.14 $685.45 $357.98
U.S. Equity Fund
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

CODE OF ETHICS
- --------------

The Trust has adopted a Code of Ethics which establishes standards by which
certain access persons of the Trust, which include officers of the Advisor and
officers and Trustees of the Trust, must abide relating to personal securities
trading conduct.

Under the Code of Ethics, access persons are prohibited from engaging in certain
conduct, including, but not limited to: 1) investing in companies in which the
Series invest unless the securities have a broad public market and are
registered on a national securities exchange or are traded in the over-the-
counter markets; 2) making or maintaining an investment in any corporation or
business with which the Series have business relationships if the investment
might create, or give the appearance of creating, a conflict of interest; 3)
participating in an initial public offering; 4) entering into a securities
transaction when the access person knows or should know that such activity will
anticipate, parallel or counter any securities transaction of a Series; 5)
entering into any securities transaction, without prior approval, in connection
with any security which has been designated as restricted; 6) entering into a
net short position with respect to any security held by a Series; 7) entering
into any derivative transaction when a direct transaction in the underlying
security would be a violation; and 8) engaging in self-dealing or other
transactions benefiting the access person at the expense of the Series or its
shareholders.

In addition, access persons are required to receive advance approval prior to
purchasing or selling a restricted security, and may not buy or sell certain
prohibited securities. The Advisor will identify for access persons prohibited
securities, which include securities that are being considered for purchase or
sale by any account or fund managed by the Advisor,

32
<PAGE>

and provide a list of such securities to all access persons. Access persons are
required to file quarterly reports of security investment transactions. Trustees
or officers who are not "interested persons" of the Trust, as defined in the
1940 Act, need only report a transaction in a security if such Trustee or
officer, at the time of the transaction, knew or should have known, in the
ordinary course of fulfilling his or her official duties as a Trustee or
officer, that, during the 15-day period immediately preceding or after the date
of the transaction by the Trustee or officer, such security was purchased or
sold by a Series, or was being considered for purchase by a Series.

PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS

Brinson Partners is responsible for decisions to buy and sell securities for the
Series and for the placement of the Series' portfolio business and the
negotiation of commissions, if any, paid on such transactions. Fixed income
securities in which the Series invest are traded in the over-the-counter market.
These securities are generally traded on a net basis with dealers acting as
principal for their own accounts without a stated commission, although the
bid/ask spread quoted on securities includes an implicit profit to the dealers.
In over-the-counter transactions, orders are placed directly with a principal
market-maker unless a better price and execution can be obtained by using a
broker. Brokerage commissions are paid on transactions in listed securities,
futures contracts and options thereon. Brinson Partners is responsible for
effecting portfolio transactions and will do so in a manner deemed fair and
reasonable to the Series. Under its advisory agreements with the Global Funds
and the Non-U.S. Equity Fund, Brinson Partners is authorized to utilize the
trading desk of its foreign subsidiaries to execute foreign securities
transactions, but monitors the selection by such subsidiaries of brokers and
dealers used to execute transactions for those Series. The primary consideration
in all portfolio transactions will be prompt execution of orders in an efficient
manner at the most favorable price. In selecting and monitoring broker-dealers
and negotiating commissions, Brinson Partners considers the firm's reliability,
the quality of its execution services on a continuing basis and its financial
condition. When more than one firm is believed to meet these criteria,
preference may be given to brokers who provide research or statistical material
or other services to the Series or to Brinson Partners. Such services include
advice, both directly and in writing, as to the value of the securities; the
advisability of investing in, purchasing or selling securities; and the
availability of securities, or purchasers or sellers of securities, as well as
analyses and reports concerning issues, industries, securities, economic factors
and trends, portfolio strategy and the performance of accounts. This allows
Brinson Partners to supplement its own investment research activities and obtain
the views and information of others prior to making investment decisions.
Brinson Partners is of the opinion that, because this material must be analyzed
and reviewed by its staff, its receipt and use does not tend to reduce expenses
but may benefit the Series by supplementing the Advisor's research.

Brinson Partners effects portfolio transactions for other investment companies
and advisory accounts. Research services furnished by dealers through whom the
Series effect its securities transactions may be used by Brinson Partners in
servicing all of its accounts; not all such services may be used in connection
with the Series. In the opinion of Brinson Partners, it is not possible to
measure separately the benefits from research services to each of the accounts
(including the Series). Brinson Partners will attempt to equitably allocate
portfolio transactions among the Series and others whenever concurrent decisions
are made to purchase or sell securities by the Series and another. In making
such allocations between the Series and others, the main factors to be
considered are the respective investment objectives, the relative size of
portfolio holdings of the same or comparable securities, the availability of
cash for investment, the size of investment commitments generally held and the
opinions of the persons responsible for recommending investments to the Series
and the others. In some cases, this procedure could have an adverse effect on
the Series. In the opinion of Brinson Partners, however, the results of such
procedures will, on the whole, be in the best interest of each of the clients.

The Series incurred brokerage commissions as follows:

33
<PAGE>

For the fiscal year ended June 30, 1996 the Trust and the Advisor had no
agreements or understandings with a broker or otherwise causing brokerage
transactions or commissions for research services.

PORTFOLIO TURNOVER
- ------------------

The Series are free to dispose of their portfolio securities at any time,
subject to complying with the Code and the Act, when changes in circumstances or
conditions make such a move desirable in light of the respective investment
objective. The Series will not attempt to achieve or be limited to a
predetermined rate of portfolio turnover, such a turnover always being
incidental to transactions undertaken with a view to achieving that Series'
investment objective.

The Series do not intend to use short-term trading as a primary means of
achieving their investment objectives. The rate of portfolio turnover shall be
calculated by dividing (a) the lesser of purchases and sales of portfolio
securities for the particular fiscal year by (b) the monthly average of the
value of the portfolio securities owned by that Series during the particular
fiscal year. Such monthly average shall be calculated by totaling the values of
the portfolio securities as of the beginning and end of the first month of the
particular fiscal year and as of the end of each of the succeeding eleven months
and dividing the sum by 13.

Under normal circumstances, the portfolio turnover rate for the Global Equity
Fund, U.S. Equity Fund, and Non-U.S. Equity Fund is not expected to exceed 100%.
The portfolio turnover rates for the Global Fund, Global Bond Fund, U.S.
Balanced Fund and U.S. Bond Fund, however, may exceed 100%. High portfolio
turnover rates (over 100%) may involve correspondingly greater brokerage
commissions and other transaction costs, which will be borne directly by the
Series and ultimately by that Series' shareholders. In addition, high portfolio
turnover may result in increased short-term capital gains, which, when
distributed to shareholders, are treated as ordinary income.

With respect to the Global Fund, for the fiscal years ended June 30, 1994, June
30, 1995 and June 30, 1996, respectively, the portfolio turnover rate of the
Series was 149%, 231%, 238% and 142%, respectively. With respect to the Global
Bond Fund, for the period July 30, 1993 (commencement of operations) to June 30,
1994 and the fiscal years ended June 30, 1995 and June 30, 1996 the portfolio
turnover rate of the Series was 189%, 199%, and 184%, respectively. With respect
to the U.S. Balanced Fund, for the fiscal year ended June 30, 1996, the
portfolio turnover rate of the Series was 240%. With respect to the U.S. Bond
Fund, for the period from August 31, 1995 (commencement of operations) to June
30, 1996, the portfolio turnover rate of the Series was 363%. The significant
variation in portfolio turnover rates over such periods was due to an increase
in the assets of the Series which caused the Series, to reposition their
portfolio holdings in order to meet their investment objectives and policies.

SHARES OF BENEFICIAL INTEREST

The Trust presently offers seven Series of shares of beneficial interest, each
of which offers two classes of shares. Each share of beneficial interest
represents an equal proportionate interest in the assets and liabilities of the
applicable Series and has the same voting and other rights and preferences as
the other class of that Series, except that shares of the Brinson Fund class may
not vote on any matter affecting only the SwissKey Fund classes' Distribution
Plan under Rule 12b-1 and neither class may vote on matters that affect only the
other class. Under Delaware law, the Trust does not normally hold annual
meetings of shareholders. Shareholders' meetings may be held from time to time
to consider certain matters including changes to a Series' fundamental
investment objective and fundamental investment policies, changes to the Trust's
investment advisory agreement and the election of Trustees when required by the
Act. When matters are submitted to shareholders for a vote, shareholders are
entitled to one vote per share with proportionate voting

34
<PAGE>

for fractional shares. The shares of the Series do not have cumulative voting
rights or any preemptive or conversion rights, and the Trustees have authority
from time to time to divide or combine the shares of the Series into a greater
or lesser number of shares so affected. In the case of a liquidation of a
Series, each shareholder of the Series will be entitled to share, based upon the
shareholder's percentage share ownership, in the distribution out of assets, net
of liabilities, of the Series. No shareholder is liable for further calls or
assessment by the Series.

On any matters affecting only one Series or class, only the shareholders of that
Series or class are entitled to vote. On matters relating to the Trust but
affecting the Series differently, separate votes by the Series or class are
required. With respect to the submission to shareholder vote of a matter
requiring separate voting by a Series, the matter shall have been effectively
acted upon with respect to any Series or class if a majority of the outstanding
voting securities of that Series votes for the approval of the matter,
notwithstanding that: (1) the matter has not been approved by a majority of the
outstanding voting securities of any other Series; and (2) the matter has not
been approved by a majority of the outstanding voting securities of the Trust.

PURCHASES

Shares of the Brinson Fund class and the SwissKey Fund class of each Series are
sold at the net asset value next determined after the receipt of a purchase
application in proper form by the transfer agent. The minimum for initial
investments with respect to the Brinson Fund class for each Series is $100,000;
subsequent investment minimums are $2,500. The minimum for initial investments
with respect to the SwissKey Fund class for each Series is $1,000; subsequent
investment minimums are $50. A more detailed description of methods of purchase
is included in the Prospectuses.

Certificates representing shares purchased are not issued. However, such
purchases are confirmed to the investor and credited to the shareholder's
account on the books maintained by the transfer agent. The investor will have
the same rights of ownership with respect to such shares as if certificates had
been issued.

EXCHANGES OF SHARES
- -------------------

Shares of the Brinson Fund class of a Series may only be exchanged for any other
Brinson Fund class of another Series in the Trust. The SwissKey Fund class of a
Series may be exchanged for any other SwissKey Fund class of another Series in
the Trust. Exchanges will not be permitted between the Brinson Fund class and
the SwissKey Fund class.

Each qualifying exchange will be made on the basis of both Funds' relative net
asset values per share next computed following receipt of the order in proper
form by the transfer agent. Exchanges may be made by telephone if the
shareholder's Account Application Form includes specific authorization for
telephone exchanges. The telephone exchange privilege may be difficult to
implement during times of drastic economic or market changes.

The transactions described above will result in a taxable gain or loss for
federal income tax purposes. Generally, any such taxable gain or loss will be a
capital gain or loss (long-term or short-term, depending on the holding period
of the shares) in the amount of the difference between the net asset value of
the shares surrendered and the shareholder's tax basis for those shares. Each
investor should consult his or her tax adviser regarding the tax consequences of
an exchange transaction.

Any shareholder who wishes to make an exchange should first obtain and review
the Prospectus of the Series to be acquired in the exchange. Requests for
telephone exchanges must be received prior to the close of regular trading on
the New York Stock Exchange ("NYSE") on any day on which the NYSE is open for
regular trading.

At the discretion of the Trust, this exchange privilege may be terminated or
modified at any time for any of the participating Series upon 60 days' prior
written notice to shareholders. Contact the transfer agent for details about a
particular exchange.

NET ASSET VALUE
- ---------------

The net asset value per share is calculated separately for each class of each
Series. The net asset value per share of a Series is computed by dividing the
value of the assets of the Series, less its liabilities, by the number of shares
of the Series outstanding.

35
<PAGE>

Each class of a Series will bear pro rata all of the common expenses of that
Series. The net asset values of all outstanding shares of each class of a Series
will be computed on a pro rata basis for each outstanding share based on the
proportionate participation in the Series represented by the value of shares of
that Series. All income earned and expenses incurred by a Series will be borne
on a pro rata basis by each outstanding share of a class, based on each class'
percentage in the Series represented by the value of such shares of such
classes, except that the Brinson Fund class will not incur any of the expenses
under the SwissKey Fund classes' 12b-1 Plan.

Portfolio securities are valued and net asset value per share is determined as
of the close of regular trading on the NYSE which currently is 4:00 p.m. Eastern
time on each day the NYSE is open for trading. The NYSE is open for trading on
every day except Saturdays, Sundays and the following holidays: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas.

Portfolio securities listed on a national or foreign securities exchange are
valued on the basis of the last sale on the date the valuation is made.
Securities that are not traded on a particular day or an exchange, are valued at
either (a) the bid price or (b) a valuation within the range considered best to
represent value in the circumstances. Price information on listed securities is
generally taken from the closing price on the exchange where the security is
primarily traded. Other portfolio securities which are traded in the over-the-
counter market are valued at the bid price as long as the bid price, in the
opinion of the Advisor, continues to reflect the value of the security.
Valuations of fixed income and equity securities may be obtained from a pricing
service and/or broker-dealers when such prices are believed to reflect the fair
value of such securities. Use of a pricing service and/or broker-dealers has
been approved by the Board of Trustees.

Futures contracts are valued at their daily quoted settlement price on the
exchange on which they are traded. Forward foreign currency contracts are
valued daily using the mean between the bid and asked forward points added to
the current exchange rate and an unrealized gain or loss is recorded. A Series
realizes a gain or loss upon settlement of the contracts. Swaps will be priced
at fair value based on (1) swap prices provided by broker-dealers; (2) values,
or estimates of values, of the applicable equity indices and foreign rates
underlying the contracts; and (3) consideration of other relevant factors. A
Series' obligation under a swap agreement will be accrued daily (offset by any
amounts owing to the portfolio) and any accrued but unpaid net amounts owed to
a swap counterparty will be covered by the maintenance of a segregated account
consisting of Segregated Assets. For valuation purposes, foreign securities
initially expressed in foreign currency values will be converted into U.S.
dollar values using WM/Reuters closing spot rates as of 4:00 p.m. London time.
Securities with a remaining maturity of 60 days or less are valued at amortized
cost, which approximates market value. Fixed income securities having a
remaining maturity of over 60 days are valued at market price. Debt securities
are valued on the basis of prices provided by a pricing service, or at the bid
price where readily available, as long as the bid price, in the opinion of FPS
and the Advisor, continues to reflect the value of the security. Redeemable
securities issued by open-end investment companies are valued using their
respective net asset values for purchase orders placed at the close of the
NYSE. Securities (including over-the-counter options) for which market
quotations are not readily available and other assets are valued at their fair
value as determined in good faith by or under the direction of the Trustees.

Because of time zone differences, foreign exchanges and securities markets will
usually be closed prior to the time of the closing of the NYSE and values of
foreign futures and options and foreign securities will be determined as of the
earlier closing of such exchanges and securities markets. However, events
affecting the values of such foreign securities may occasionally occur between
the earlier closings of such exchanges and securities markets and the closing of
the NYSE which will not be reflected in the computation of the net asset value
of a Series. If an event materially affecting the value of such foreign
securities occurs during such period, then such securities will be valued at
fair value as determined in good faith by or under the direction of the Board of
Trustees. Where a foreign securities market remains open at the time that a
Series values its portfolio securities, or closing prices of securities from
that market may not be retrieved because of local time differences or other
difficulties in obtaining such prices at that time, last sale prices in such
market at a point in time most practicable to timely valuation of the Series may
be used.

REDEMPTIONS

Under normal circumstances shareholders may redeem their shares at any time
without a fee. The redemption price will be based upon the net asset value per
share next determined after receipt of the redemption request, provided it has
been submitted in the manner described below. The redemption price may be more
or less than the original cost, depending upon the net asset value per share at
the time of redemption.

Payment for shares tendered for redemption is made by check within five business
days after tender in proper form, except that the Trust reserves the right to
suspend the right of redemption, or to postpone the date of payment upon
redemption beyond five business days, (i) for any period during which the NYSE
is closed (other than customary weekend and holiday closings) or during which
trading on the NYSE is restricted, (ii) for any period during which an emergency
exists as determined by the SEC as a result of which disposal of securities
owned by a Series is not reasonably practicable or it is not reasonably
practicable for the Series fairly to determine the value of its net assets or

36
<PAGE>

(iii) for such other periods as the SEC may by order permit for the protection
of shareholders of the Series.

Under unusual circumstances, when the Board of Trustees deems it in the best
interest of the Series' shareholders, the Trust may make payment for shares
repurchased or redeemed in whole or in part in securities of the Series taken at
current values. With respect to such redemptions in kind, the Trust has made an
election pursuant to Rule 18f-1 under the Act. This will require the Trust to
redeem in cash at a shareholder's election in any case where the redemption
involves less than $250,000 (or 1% of the Series' net asset value at the
beginning of each 90 day period during which such redemptions are in effect, if
that amount is less than $250,000). Should payment be made in securities, the
redeeming shareholder may incur brokerage costs in converting such securities to
cash.

TAXATION
- --------

Each of the Series has qualified, and intends to continue to qualify each year,
as a regulated investment company under Subchapter M of the Code. In order to so
qualify, a mutual fund must, among other things, (i) derive at least 90% of its
gross income from dividends, interest, payments with respect to certain
securities loans, gains from the sale of securities or foreign currencies, or
other income (including but not limited to gains from options, futures or
forward contracts) derived with respect to its business of investing in such
stock, securities or currencies; (ii) derive less than 30% of its gross income
from the sale or other disposition of stock or securities or certain futures and
options thereon held for less than three months ("short-short gains"); (iii)
distribute at least 90% of its dividend, interest and certain other taxable
income each year; and (iv) at the end of each fiscal quarter maintain at least
50% of the value of its total assets in cash, government securities, securities
of other regulated investment companies and other securities of issuers which
represent, with respect to each issuer, no more than 5% of the value of a fund's
total assets and 10% of the outstanding voting securities of such issuer, and
with no more than 25% of its assets invested in the securities (other than those
of the government or other regulated investment companies) of any one issuer or
of two or more issuers which the fund controls and which are engaged in the
same, similar or related trades and businesses.

To the extent each of the Series qualifies for treatment as a regulated
investment company, they will not be subject to federal income tax on income and
net capital gains paid to shareholders in the form of dividends or capital gains
distributions.

An excise tax at the rate of 4% will be imposed on the excess, if any, of each
Series' "required distributions" over actual distributions in any calendar year.
Generally, the "required distribution" is 98% of a Series' ordinary income for
the calendar year plus 98% of its capital gain net income recognized during the
one-year period ending on October 31 plus undistributed amounts from prior
years. The Series intend to make distributions sufficient to avoid imposition of
the excise tax. Distributions declared by the Series during October, November or
December to shareholders of record during such month and paid by January 31 of
the following year will be taxable to shareholders in the calendar year in which
they are declared, rather than the calendar year in which they are received.

Gains or losses attributable to fluctuations in exchange rates which occur
between the time a Series accrues interest or other receivables or accrues
expenses or liabilities denominated in a foreign currency and the time the
Series actually collects such receivables, or pays such liabilities, are
generally treated as ordinary income or loss. Similarly, a portion of the gains
or losses realized on disposition of debt securities denominated in a foreign
currency may also be treated as ordinary gain or loss. These gains, referred to
under the Code as "Section 988" gains or losses, may increase or decrease the
amount of a Series' investment company taxable income to be distributed to its
shareholders, rather than increasing or decreasing the amount of the Series'
capital gains or losses.

When a Series writes a call, or purchases a put option, an amount equal to the
premium received or paid by it is included in the Series' assets and liabilities
as an asset and as an equivalent liability.

In writing a call, the amount of the liability is subsequently "marked-to-
market" to reflect the current market value of the option written. The current
market value of a written option is the last sale price on the principal
Exchange on which such option is traded or, in the absence of a sale, the mean
between the last bid and asked prices. If an option which a Series has written
expires on its stipulated expiration date, the Series recognizes a short-term
capital gain. If a Series enters into a closing purchase transaction with
respect to an option which the Series has written, the Series realizes a short-
term gain (or loss if the cost of the closing transaction exceeds the premium
received when the option was sold) without regard to any unrealized gain or loss
on the underlying security, and the liability related to such option is
extinguished. If a call option which a Series has written is exercised, the
Series realizes a capital gain or loss from the

37
<PAGE>

sale of the underlying security and the proceeds from such sale are increased by
the premium originally received.

The premium paid by a Series for the purchase of a put option is recorded in the
Series' assets and liabilities as an investment and subsequently adjusted daily
to the current market value of the option. For example, if the current market
value of the option exceeds the premium paid, the excess would be unrealized
appreciation and, conversely, if the premium exceeds the current market value,
such excess would be unrealized depreciation. The current market value of a
purchased option is the last sale price on the principal Exchange on which such
option is traded or, in the absence of a sale, the mean between the last bid and
asked prices. If an option which a Series has purchased expires on the
stipulated expiration date, the Series realizes a short-term or long-term
capital loss for Federal income tax purposes in the amount of the cost of the
option. If a Series exercises a put option, it realizes a capital gain or loss
(long-term or short-term, depending on the holding period of the underlying
security) from the sale which will be decreased by the premium originally paid.

Accounting for options on certain stock indices will be in accordance with
generally accepted accounting principles. The amount of any realized gain or
loss on closing out such a position will result in a realized gain or loss for
tax purposes. Such options held by a Series at the end of each fiscal year on a
broad-based stock index will be required to be "marked-to-market" for Federal
income tax purposes. Sixty percent of any net gain or loss recognized on such
deemed sales or on any actual sales will be treated as long-term capital gain or
loss and the remainder will be treated as short-term capital gain or loss.
Certain options, futures contracts and options on futures contracts utilized by
the Series are "Section 1256 contracts." Any gains or losses on Section 1256
contracts held by a Series at the end of each taxable year (and on October 31 of
each year for purposes of the 4% excise tax) are "marked-to-market" with the
result that unrealized gains or losses are treated as though they were realized
and the resulting gain or loss is treated as a 60/40 gain or loss. Shareholders
will be subject to federal income taxes on distributions made by the Series
whether received in cash or additional shares of the Series. Distributions of
net investment income and net short-term capital gains, if any, will be taxable
to shareholders as ordinary income. Distributions of net long-term capital
gains, if any, will be taxable to shareholders as long-term capital gains,
without regard to how long a shareholder has held shares of the Series. A loss
on the sale of shares held for twelve months or less will be treated as a long-
term capital loss to the extent of any long-term capital gain dividend paid to
the shareholder with respect to such shares. Dividends eligible for designation
under the dividends received deduction and paid by a Series may qualify in part
for the 70% dividends received deduction for corporations provided, however,
that those shares have been held for at least 45 days. The Series will notify
shareholders each year of the amount of dividends and distributions, including
the amount of any distribution of long-term capital gains and the portion of its
dividends which may qualify for the 70% deduction.

Each class of shares of a Series will share proportionately in the investment
income and expenses of that Series, except that the respective SwissKey Fund
class for each Series alone will incur distribution fees under their respective
12b-1 Plan.

It is expected that certain dividends and interest received by the Global Funds
and the Non-U.S. Equity Fund will be subject to foreign withholding taxes. If
more than 50% in value of the total assets of a fund at the close of any taxable
year consists of stocks or securities of foreign corporations, such fund may
elect to treat any foreign taxes paid by it as if paid by its shareholders.
These Series will notify shareholders in writing each year whether it has made
the election and the amount of foreign taxes it has elected to have treated as
paid by the shareholders. If a Series makes the election, its shareholders will
be required to include in gross income their proportionate share of the amount
of foreign taxes paid by the Series and will be entitled to claim either a
credit or deduction for their share of the taxes in computing their U.S. federal
income tax subject to certain limitations. No deduction for foreign taxes may be
claimed by shareholders who do not itemize deductions.

Generally, a credit for foreign taxes is subject to the limitation that it may
not exceed the shareholder's U.S. tax attributable to his or her total foreign
source taxable income. For this purpose, the source of each Series' income flows
through to its shareholders. Gains from the sale of securities will be treated
as derived from U.S. sources and certain currency fluctuation gains, including
fluctuation gains from foreign currency denominated debt securities, receivables
and payables, will be treated income derived from U.S. sources. The limitation
on the foreign tax credit is applied separately to foreign source passive income
(as defined for purposes of foreign tax credit), such as foreign source passive
income received from the respective Series. Because of changes made by the Code,
shareholders may be unable to claim a credit for the full amount of their
proportionate share of the foreign taxes paid by the Series.

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<PAGE>

The foregoing is a general and abbreviated summary of the applicable provisions
of the Code and Treasury Regulations currently in effect. For the complete
provisions, reference should be made to the pertinent Code sections and
Regulations. The Code and Regulations are subject to change by legislative or
administrative action at any time and retroactively.

Dividends and distributions also may be subject to state and local taxes.

Shareholders are urged to consult their tax advisers regarding specific
questions as to federal, state and local taxes as well as the application of the
foreign tax credit.

The foregoing discussion relates solely to U.S. federal income tax law. Non-U.S.
investors should consult their tax advisers concerning the tax consequences of
ownership of shares of the Series, including the possibility that distributions
may be subject to a 30% U.S. withholding tax (or a reduced rate of withholding
provided by treaty).

PERFORMANCE CALCULATIONS

Performance information for the SwissKey Fund class and Brinson Fund class
shares of each Series will vary due to the effect of expense ratios on the
performance calculations.

TOTAL RETURN
- ------------

Current yield and total return quotations used by the Series (and both classes
of shares) are based on standardized methods of computing performance mandated
by rules adopted by the SEC. As the following formula indicates, the average
annual total return is determined by multiplying a hypothetical initial purchase
order of $1,000 by the average annual compound rate of return (including capital
appreciation/depreciation and dividends and distributions paid and reinvested)
for the stated period less any fees charged to all shareholder accounts and
annualizing the result. The calculation assumes that all dividends and
distributions are reinvested at the net asset value on the reinvestment dates
during the period. The quotation assumes the account was completely redeemed at
the end of each period and deduction of all applicable charges and fees.
According to the SEC formula:

P(1+T)/n/=ERV
where:
P = a hypothetical initial payment of $1,000,
T = average annual total return,
n = number of years,
ERV = ending redeemable value of a hypothetical $1,000 payment made
at the beginning of the 1, 5 or 10 year periods at the end of
the 1, 5 or 10 year periods (or fractional portion thereof).

Based upon the foregoing calculations, the average annual total return for the
Brinson Fund class shares of: (i) the Global Fund for the one and three year
periods ended June 30, 1996 and the period August 31, 1992 (commencement of
operations) through June 30, 1996 was 16.38%, 9.69% and 10.42%, respectively;
(ii) the Global Equity Fund for the one year period ended June 30, 1996 and the
period January 28,1994 (commencement of operations) through June 30, 1996 was
25.66% and 10.42%, respectively; (iii) the Global Bond Fund for the one year
period ended June 30, 1996 and the period July 30, 1993 (commencement of
operations) through June 30, 1996 was 11.50% and 7.40%, respectively; (iv) the
U.S. Balanced Fund for the one year period ended June 30, 1996 and the period
December 30, 1994 (commencement of operations) through June 30, 1996 was 13.52%
and 18.71%, respectively; (v) the U.S. Equity Fund for the one year period ended
June 30, 1996 and the period February 22, 1994 (commencement of operations)
through June 30, 1996 was 30.57% and 20.23%, respectively; (vi) the U.S. Bond
Fund for the period August 31, 1995 (commencement of operations) through June
30, 1996 was 3.60%; (vii); and the Non-U.S. Equity Fund for the one year period
ended June 30, 1996 and the period August 31, 1993 (commencement of operations)
through June 30, 1996 was 23.64% and 6.80%, respectively.

Based upon the foregoing calculations, the average annual total return for the
SwissKey Fund class shares of: the Global Fund, Global Equity Fund, Global Bond
Fund, U.S. Balanced Fund, U.S. Equity Fund and Non U.S. Equity Fund for the
period July 31, 1995 (commencement of operations) through June 30, 1996 was
13.24%, 19.25%, 9.17%, 11.54%, 25.70% and 15.78%, respectively; and the U.S.
Bond Fund for the period August 31, 1995 (commencement of operations) through
June 30, 1996 was 3.24%.

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<PAGE>

YIELD
- -----

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

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

The yield of a Series may be calculated by dividing the net investment income
per share earned by the particular Series during a 30-day (or one month) period
by the net asset value per share on the last day of the period and annualizing
the result on a semi-annual basis. A Series' net investment income per share
earned during the period is based on the average daily number of shares
outstanding during the period entitled to receive dividends and includes
dividends and interest earned during the period minus expenses accrued for the
period, net of reimbursements.

FINANCIAL STATEMENTS

The Financial Statements contained in the Series' Annual Report dated June 30,
1996 are incorporated herein by reference.

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<PAGE>

CORPORATE DEBT RATINGS APPENDIX A

Moody's Investors Service, Inc. describes classifications of corporate bonds as
follows:

Aaa - Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt-edged". Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues.

Aa - Bonds which are rated Aa are judged to be of high-quality by all
standards. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other
elements present which make the long-term risks appear somewhat larger than
in Aaa securities.

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

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

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

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

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

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

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

Moody's also supplies numerical indicators 1, 2, and 3 to rating categories. The
modifier 1 indicates the security is in the higher end of its rating category;
the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a
ranking toward the lower end of the category.

Standard & Poor's Ratings Group describes classifications of corporate bonds as
follows:

AAA - This is the highest rating assigned by Standard & Poor's Ratings
Group to a debt obligation and indicates an extremely strong capacity to
pay principal and interest.

AA - Bonds rated AA also qualify as high-quality debt obligations. Capacity
to pay principal and interest is very strong and in the majority of
instances they differ from the AAA issues only in small degree.

A - Bonds rated A have a strong capacity to pay principal and interest,
although they are somewhat more

41
<PAGE>

susceptible to the adverse effects of changes in circumstances and economic
conditions.

BBB - Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay principal and interest for
bonds in this category than for bonds in the A category.

BB - Debt rated BB has less near-term vulnerability to default than other
speculative grade debt. However, it faces major ongoing uncertainties or
exposure to adverse business, financial or economic conditions which could
lend to inadequate capacity to meet timely interest and principal payments.

B - Debt rated B has a greater vulnerability to default but presently has
the capacity to meet interest payments and principal repayments. Adverse
business, financial or economic conditions would likely impair capacity or
willingness to pay interest and repay principal.

CCC - Debt rated CCC has a current identifiable vulnerability to default,
and is dependent upon favorable business, financial and economic conditions
to meet timely payments of interest and repayment of principal. In the
event of adverse business, financial or economic conditions, it is not
likely to have the capacity to pay interest or repay principal.

CC - The rating CC is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC rating.

C - The rating C is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC rating.

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

D - Debt rated D is in default, or is expected to default upon maturity or
payment date.

Plus (+) or minus (-): The ratings from AA to CCC may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.