ARBOR FUND, 497, 1997-05-20

ARBOR FUND
497, 1997-05-20

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<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A POST-
EFFECTIVE AMENDMENT TO THE REGISTRATION STATEMENT RELATING TO THESE SECURITIES
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY
NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE
POST-EFFECTIVE AMENDMENT TO THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS
PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER
TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH
SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAW OF ANY SUCH STATE.

GOLDEN OAK FAMILY OF FUNDS

Investment Adviser:

CITIZENS BANK

- GOLDEN OAK GROWTH PORTFOLIO
- GOLDEN OAK VALUE PORTFOLIO
- GOLDEN OAK INTERMEDIATE-TERM INCOME PORTFOLIO
- GOLDEN OAK MICHIGAN TAX FREE BOND PORTFOLIO
- GOLDEN OAK PRIME OBLIGATION MONEY MARKET PORTFOLIO

THE GOLDEN OAK FAMILY OF FUNDS is a group of professionally managed mutual funds
that offers a convenient and economical means of investing in one or more
portfolios of securities. This Prospectus offers Class A and Class B shares of
the Golden Oak Growth Portfolio, Golden Oak Value Portfolio, Golden Oak
Intermediate-Term Income Portfolio, Golden Oak Michigan Tax Free Bond Portfolio
and Golden Oak Prime Obligation Money Market Portfolio (the "Portfolios"), an
assortment of equity, fixed income and money market portfolios.

Each Portfolio offers its Class A shares to institutional investors, including
CITIZENS BANK, its affiliates and correspondents for the investment of their own
funds or funds for which they act in a fiduciary, agency or custodial capacity.
Each Portfolio offers its Class B shares to individuals and institutional
accounts, including accounts for which Citizens Bank, its affiliates and
correspondents, act in an agency or custodial capacity.

AN INVESTMENT IN A PORTFOLIO IS NEITHER INSURED NOR GUARANTEED BY THE UNITED
STATES GOVERNMENT, AND THERE IS NO ASSURANCE THAT THE GOLDEN OAK PRIME
OBLIGATION MONEY MARKET PORTFOLIO WILL BE ABLE TO MAINTAIN A STABLE NET ASSET
VALUE OF $1.00 PER SHARE.

MUTUAL FUND SHARES

- ARE NOT INSURED BY THE FDIC, THE FEDERAL RESERVE BOARD OR ANY OTHER
GOVERNMENTAL AGENCY

- ARE NOT DEPOSITS OR OBLIGATIONS OF ANY BANK, INCLUDING CITIZENS BANK, ANY OF
ITS AFFILIATES OR CORRESPONDENTS, OR OTHER FINANCIAL INSTITUTION

- ARE NOT GUARANTEED OR ENDORSED BY ANY BANK, INCLUDING CITIZENS BANK, ANY OF
ITS AFFILIATES OR CORRESPONDENTS, OR OTHER FINANCIAL INSTITUTION

- INVOLVE INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL

This Prospectus sets forth concisely the information about the Portfolios that a
prospective investor should know before investing. Each Portfolio is a separate
series of The Arbor Fund. Investors are advised to read this Prospectus and
retain it for future reference. A Statement of Additional Information dated June
1, 1997 has been filed with the Securities and Exchange Commission and is
available without charge by calling 1-800-545-6331. The Statement of Additional
Information is incorporated into this Prospectus by reference.

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

June 1, 1997

CIT-F-006-06
<PAGE>
2

SUMMARY

THE GOLDEN OAK FAMILY OF FUNDS IS A GROUP OF OPEN-END MANAGEMENT
INVESTMENT COMPANIES PROVIDING A CONVENIENT WAY TO INVEST IN PROFESSIONALLY
MANAGED PORTFOLIOS OF SECURITIES. THE FOLLOWING SUMMARY PROVIDES BASIC
INFORMATION ABOUT THE CLASS A AND CLASS B SHARES OF THE GOLDEN OAK GROWTH
PORTFOLIO, GOLDEN OAK VALUE PORTFOLIO, GOLDEN OAK INTERMEDIATE-TERM INCOME
PORTFOLIO, GOLDEN OAK MICHIGAN TAX FREE BOND PORTFOLIO AND GOLDEN OAK PRIME
OBLIGATION MONEY MARKET PORTFOLIO (EACH, A "PORTFOLIO"). THIS SUMMARY IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE MORE DETAILED INFORMATION
INCLUDED ELSEWHERE IN THIS PROSPECTUS AND IN THE STATEMENT OF ADDITIONAL
INFORMATION.

WHAT ARE THE INVESTMENT OBJECTIVES? The GOLDEN OAK GROWTH PORTFOLIO
(the "Growth Portfolio") seeks total return. The GOLDEN OAK VALUE PORTFOLIO
(the "Value Portfolio") seeks long-term capital appreciation. The GOLDEN OAK
INTERMEDIATE-TERM INCOME PORTFOLIO (the "Intermediate-Term Income
Portfolio") seeks current income consistent with limited price volatility.
The GOLDEN OAK MICHIGAN TAX FREE BOND PORTFOLIO (the "Michigan Portfolio")
seeks current income exempt from federal and Michigan income taxes
consistent with preservation of capital. The GOLDEN OAK PRIME OBLIGATION
MONEY MARKET PORTFOLIO (the "Prime Obligation Portfolio") seeks to preserve
principal value and maintain a high degree of liquidity while providing
current income. See "Investment Objectives and Policies."

WHAT ARE THE PERMITTED INVESTMENTS? Under normal market conditions, the
GROWTH PORTFOLIO will invest at least 75% of its assets in common stocks
traded in United States markets. The VALUE PORTFOLIO will invest primarily
in common stocks, preferred stocks and securities convertible into common
stocks of domestic or foreign issuers. Under normal market conditions, the
INTERMEDIATE-TERM INCOME PORTFOLIO will invest at least 80% of its assets in
the following United States dollar denominated obligations: (i) corporate
bonds and debentures; (ii) obligations issued or guaranteed as to principal
and interest by the United States Government, its agencies or
instrumentalities; (iii) commercial paper; (iv) short-term bank obligations;
and (v) repurchase agreements involving any of the above securities. The
MICHIGAN PORTFOLIO will invest (i) primarily in obligations issued by or on
behalf of the states, territories and possessions of the United States and
the District of Columbia and their political subdivisions, agencies and
instrumentalities, the interest of which, in the opinion of counsel for the
issuer, is exempt from federal income tax (collectively, "Municipal
Securities"), (ii) under normal circumstances, at least 65% of its assets in
municipal bonds and (iii) except where acceptable securities are unavailable
as determined by the Adviser, at least 80% of the Portfolio's assets in
Municipal Securities, the interest of which, in the opinion of counsel for
the issuer, is exempt from Michigan Income Tax ("Michigan Municipal
Securities"). The PRIME OBLIGATION PORTFOLIO intends to invest exclusively
in short-term, U.S. dollar denominated money market instruments that satisfy
certain quality, maturity and diversification criteria, including criteria
set by applicable laws and regulations. The Portfolio may invest in
obligations of U.S. issuers, obligations of foreign issuers sold in the U.S.
market, obligations of U.S. and London branches of foreign banks and
obligations of supranational entities. See "Investment Objectives and
Policies" and "Description of Permitted Investments."

WHAT ARE THE RISKS? Because securities fluctuate in value, the shares
of the Portfolios, like shares of any mutual fund, will fluctuate in value.
The Growth and Value Portfolios may invest in equity securities that are
affected by market and economic factors. The Portfolios may invest in fixed
income securities that tend to vary inversely with interest rates and may be
affected by other market and economic factors as well, which may cause these
securities to fluctuate in value. Investing in securities of foreign issuers
involves special risks and considerations not typically associated with
investing in securities of domestic issuers. The Michigan Portfolio is a
non-diversified mutual fund that concentrates in Michigan Municipal
Securities, which subjects the Portfolio to special investment risks. There
is no assurance that the Portfolios will achieve their investment
objectives, or that the Prime Obligation Portfolio will be able to maintain
a net asset value of $1.00 per share on a continuous basis. See "Investment
Objectives and Policies," "Taxes--Additional Considerations for the Michigan
Portfolio" and "Description of Permitted Investments."
<PAGE>
3

WHO ARE THE ADVISER AND SUB-ADVISERS? Citizens Bank serves as the
investment adviser to the Portfolios. Wellington Management Company, LLP
serves as the investment sub-adviser to the Prime Obligation Portfolio.
Systematic Financial Management, L.P. serves as the investment sub-adviser
to the Value Portfolio. Nicholas-Applegate Capital Management serves as the
investment sub-adviser to the Growth Portfolio. See "Expense Summary," "The
Adviser" and "The Sub-Advisers."

WHO IS THE ADMINISTRATOR? SEI Fund Resources serves as the
administrator and shareholder servicing agent of the Portfolios. See
"Expense Summary" and "The Administrator."

WHO IS THE TRANSFER AGENT? DST Systems, Inc. serves as transfer agent
and dividend disbursing agent for the Portfolios. See "Expense Summary" and
"The Transfer Agent."

WHO IS THE DISTRIBUTOR? SEI Financial Services Company serves as
distributor of the Portfolios' shares. See "The Distributor."

HOW DO I PURCHASE SHARES? You may purchase CLASS A SHARES of each
Portfolio through the Transfer Agent on days on which the New York Stock
Exchange and the Federal Reserve wire system are open for business
("Business Days"). The minimum initial investment in the Class A shares is
$1,000,000. Class A shares of each Portfolio are offered at net asset value
per share.

You may purchase CLASS B SHARES of each Portfolio through the Transfer
Agent on any Business Day. The minimum initial investment in the Class B
shares is $1,000. Class B shares of each Portfolio are offered at net asset
value per share plus a maximum sales charge of 5.75% for both the Growth and
Value Portfolios or a maximum sales charge of 4.50% for both the
Intermediate-Term Income and Michigan Portfolios. There is no sales charge
imposed on Class B shares of the Prime Obligation Portfolio. See "How To
Purchase Shares."

HOW DO I REDEEM CLASS A AND CLASS B SHARES? You may redeem shares
through the Transfer Agent on any Business Day. Redemptions are made at the
net asset value per share next determined after the order is effective. See
"How To Redeem Shares."

HOW ARE DIVIDENDS PAID? Substantially all of the net investment income
(exclusive of capital gains) of the Intermediate-Term Income, Michigan and
Prime Obligation Portfolios is distributed in the form of dividends declared
daily and distributed monthly to shareholders of record. The net investment
income (exclusive of capital gains) of the Growth and Value Portfolios is
declared monthly and distributed monthly to shareholders of record. Any
realized net capital gain is distributed at least annually. Distributions
are paid in additional shares unless the shareholder elects to take the
payment in cash. See "General Information -- Dividends."
<PAGE>
4

EXPENSE SUMMARY

SHAREHOLDER TRANSACTION FEES CLASS A

(as a percentage of offering price)(1)

(1) There is a wire charge (currently $10.00) if redemption proceeds are wired
except that certain financial institutions may be exempt from this wire
charge.

ANNUAL OPERATING EXPENSES
(As a percentage of average net assets)

<TABLE>
<CAPTION>
GROWTH VALUE INTERMEDIATE-TERM MICHIGAN PRIME OBLIGATION
PORTFOLIO (4) PORTFOLIO INCOME PORTFOLIO PORTFOLIO PORTFOLIO
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Advisory Fees (after
fee waiver) (2).......... .73% .48% .35% .30% .02%
12b-1 Fees................. None None None None None
Other Expenses (2)......... .37% .62% .30% .35% .38%
- -----------------------------------------------------------------------------------------------------------------
Total Operating
Expenses (after
fee waiver) (3).......... 1.10% 1.10% .65% .65% .40%
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
</TABLE>

(2) The Adviser has agreed to waive, on a voluntary basis, a portion of its fee
for an indefinite period of time in an amount that operates to limit Total
Operating Expenses to not more than 1.10%, 1.10%, .65%, .65% and .40% of the
average daily net assets of the Class A shares of the Growth, Value,
Intermediate-Term Income, Michigan and Prime Obligation Portfolios,
respectively. The advisory fee shown reflects this voluntary waiver. The
Adviser reserves the right to terminate its waiver at any time in its sole
discretion. Absent such waivers, the advisory fees for the Growth, Value,
Intermediate-Term Income, Michigan and Prime Obligation Portfolios would be
.74%, .74%, .50%, .50% and .30%, respectively. Other Expenses for the Value
Portfolio and Michigan Portfolio are based on estimated amounts for the
current fiscal year.

(3) Absent the voluntary fee waivers described above, Total Operating Expenses
for the Class A shares of the Growth, Value, Intermediate-Term Income,
Michigan and Prime Obligation Portfolios would be 1.11%, 1.36%, .80%, .85%
and .68%, respectively.

(4) Formerly the Diversified Growth Portfolio.
<PAGE>
5

EXAMPLE

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
1 YR. 3 YRS. 5 YRS. 10 YRS.
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
An investor would pay the following expenses on
a $1,000 investment assuming (1) 5% annual
return and (2) redemption at the end of each
time period:
Growth Portfolio............................ $11 $35 $61 $134
Value Portfolio............................. $11 $35 N/A N/A
Intermediate-Term Income Portfolio.......... $ 7 $21 $36 $ 81
Michigan Portfolio.......................... $ 7 $21 N/A N/A
Prime Obligation Portfolio.................. $ 4 $13 $22 $ 51
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
</TABLE>

THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES
AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. Because the Value
and Michigan Portfolios had not commenced operations as of the date of this
Prospectus, expenses have not been projected beyond three years. The purpose of
the expense table and example is to assist the investor in understanding the
various costs and expenses that may be directly or indirectly borne by investors
in each Portfolio. A person who purchases shares through an account with a
financial institution may be charged separate fees by that financial
institution. Additional information may be found under "The Adviser," "The
Sub-Advisers" and "The Administrator."
<PAGE>
6

EXPENSE SUMMARY

SHAREHOLDER TRANSACTION FEES CLASS B

(as a percentage of offering price)(1)

(1) There is a wire charge (currently $10.00) if redemption proceeds are wired
except that certain financial institutions may be exempt from this wire
charge.

ANNUAL OPERATING EXPENSES
(As a percentage of average net assets)

<TABLE>
<CAPTION>
GROWTH VALUE INTERMEDIATE-TERM MICHIGAN PRIME OBLIGATION
PORTFOLIO (4) PORTFOLIO INCOME PORTFOLIO PORTFOLIO PORTFOLIO
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Advisory Fees (after
fee waiver) (2).......... .73% .48% .35% .30% .02%
12b-1 Fees................. .25% .25% .25% .25% .25%
Other Expenses (2)......... .37% .62% .30% .35% .38%
- ------------------------------------------------------------------------------------------------------------------------------
Total Operating
Expenses (after
fee waiver) (3).......... 1.35% 1.35% .90% .90% .65%
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(2) The Adviser has agreed to waive, on a voluntary basis, a portion of its fee
for an indefinite period of time in an amount that operates to limit Total
Operating Expenses (exclusive of distribution expenses) to not more than
1.35%, 1.35%, .90%, .90% and .65% of the average daily net assets of the
Class B shares of the Growth, Value, Intermediate-Term Income, Michigan and
Prime Obligation Portfolios, respectively. The advisory fee shown reflects
this voluntary waiver. The Adviser reserves the right to terminate its
waiver at any time in its sole discretion. Absent such waiver, the advisory
fees for the Growth, Value, Intermediate-Term Income, Michigan and Prime
Obligation Portfolios would be .74%, .74%, .50%, .50% and .30%,
respectively. Other Expenses for the Value Portfolio and the Michigan
Portfolio are based on estimated amounts for the current fiscal year.

(3) Absent the voluntary fee waivers described above, Total Operating Expenses
for the Class B shares of the Growth, Value, Intermediate-Term Income,
Michigan and Prime Obligation Portfolios would be 1.36%, 1.61%, 1.05%, 1.10%
and .93%, respectively.

(4) Formerly the Diversified Growth Portfolio.
<PAGE>
7

EXAMPLE

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
1 YR. 3 YRS. 5 YRS. 10 YRS.
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
An investor would pay the following expenses on
a $1,000 investment assuming (1) imposition of
the maximum sales load, (2) 5% annual return
and (3) redemption at the end of each time
period:
Growth Portfolio............................ $70 $98 $127 $211
Value Portfolio............................. $70 $98 N/A N/A
Intermediate-Term Income Portfolio.......... $54 $72 $ 93 $151
Michigan Portfolio.......................... $54 $72 N/A N/A
Prime Obligation Portfolio.................. $ 7 $21 $ 36 $ 81
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
</TABLE>

Long-term Class B shareholders may eventually pay more than the economic
equivalent of the maximum front-end sales charges otherwise permitted by the
Conduct Rules (the "Rules") of the National Association of Securities Dealers,
Inc. ("NASD").
<PAGE>
8

FINANCIAL HIGHLIGHTS GOLDEN OAK FAMILY OF FUNDS

The following information has been audited by Price Waterhouse LLP, the
independent accountants for the Arbor Fund (the "Trust"), as indicated in their
report dated March 14, 1997 on the Trust's financial statements as of January
31, 1997 included in the Trust's Statement of Additional Information under
"Financial Statements." Additional performance information is in the 1997 Annual
Report to Shareholders and is available upon request without charge by calling
1-800-545-6331. This table should be read in conjunction with the Trust's
financial statements and notes thereto.

For a Share Outstanding Throughout
the Periods Ended January 31,
<TABLE>
<CAPTION>
REALIZED
AND
UNREALIZED DISTRIBUTIONS NET
NET ASSET GAINS ---------------------- ASSETS
VALUE NET (LOSSES) NET NET NET ASSET END OF
BEGINNING INVESTMENT ON INVESTMENT REALIZED VALUE END TOTAL PERIOD
OF PERIOD INCOME INVESTMENTS INCOME GAIN OF PERIOD RETURN (000)
- ---------------------------------------------------------------------------------------------------------------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PRIME OBLIGATION MONEY MARKET PORTFOLIO CLASS A
- ---------------------------------------------------------------------------------------------------------------------- ---------
1997................................... $ 1.00 0.05 -- (0.05) -- $ 1.00 5.21 % $ 94,508
1996................................... 1.00 0.06 -- (0.06) -- 1.00 5.74 107,409
1995................................... 1.00 0.04 -- (0.04) -- 1.00 4.21 109,076
1994(1)................................ 1.00 0.03 -- (0.03) -- 1.00 2.87 117,188
- ---------------------------------------------------------------------------------------------------------------------- ---------
PRIME OBLIGATION MONEY MARKET PORTFOLIO CLASS B+
- ---------------------------------------------------------------------------------------------------------------------- ---------
1997................................... $ 1.00 0.05 -- (0.05) -- $ 1.00 4.95 % $ 71,686
1996................................... 1.00 0.05 -- (0.05) -- 1.00 5.47 75,293
1995................................... 1.00 0.04 -- (0.04) -- 1.00 3.95 21,018
1994(2)................................ 1.00 -- -- -- -- 1.00 2.90 * 104
- ---------------------------------------------------------------------------------------------------------------------- ---------
INTERMEDIATE-TERM INCOME PORTFOLIO CLASS A
- ---------------------------------------------------------------------------------------------------------------------- ---------
1997................................... $10.15 0.54 (0.32) (0.54) -- $ 9.83 2.31 % $116,689
1996................................... 9.52 0.56 0.63 (0.56) -- 10.15 12.83 104,270
1995................................... 10.19 0.50 (0.67) (0.50) -- 9.52 (1.61) 80,064
1994(1)................................ 10.00 0.46 0.23 (0.46) (0.04) 10.19 6.99 64.329
- ---------------------------------------------------------------------------------------------------------------------- ---------
INTERMEDIATE-TERM INCOME PORTFOLIO CLASS B+
- ---------------------------------------------------------------------------------------------------------------------- ---------
1997................................... $10.15 0.52 (0.32) (0.52) -- $ 9.83 2.05 % 84
1996................................... 9.52 0.54 0.63 (0.54) -- 10.15 12.54 210
1995................................... 10.19 0.48 (0.67) (0.48) -- 9.52 (1.85) 314
1994(3)................................ 10.12 0.31 0.11 (0.31) (0.04) 10.19 6.72 * 365
- ---------------------------------------------------------------------------------------------------------------------- ---------
GROWTH PORTFOLIO CLASS A**
- ---------------------------------------------------------------------------------------------------------------------- ---------
1997................................... $10.26 -- 2.44 (0.01) (0.03) $12.66 23.79 % $ 32,973
1996................................... 10.00 0.07 1.74 (0.07) (1.48) 10.26 18.81 24,775
1995................................... 10.82 0.08 (0.64) (0.08) (0.18) 10.00 (5.24) 32,931
1994(1)................................ 10.00 0.08 0.82 (0.08) -- 10.82 9.08 24,955
- ---------------------------------------------------------------------------------------------------------------------- ---------
GROWTH PORTFOLIO CLASS B+**
- ---------------------------------------------------------------------------------------------------------------------- ---------
1997................................... $10.20 (0.03) 2.43 -- $(0.03) $12.57 23.56 % $ 226
1996................................... 9.96 0.04 1.72 (0.04) (1.48) 10.20 18.43 193
1995................................... 10.81 0.05 (0.67) (0.05) (0.18) 9.96 (5.76) 125
1994(3)................................ 9.54 0.02 1.27 (0.02) -- 10.81 22.00 * 173
- ---------------------------------------------------------------------------------------------------------------------- ---------

RATIO OF RATIO OF RATIO OF RATIO OF
EXPENSES NET EXPENSES NET INCOME
TO INCOME TO AVERAGE TO AVERAGE
AVERAGE TO NET ASSETS NET ASSETS PORTFOLIO AVERAGE
NET AVERAGE (EXCLUDING (EXCLUDING TURNOVER COMMISSION
ASSETS NET ASSETS WAIVERS) WAIVERS) RATE RATE ++
- ---------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PRIME OBLIGATION MONEY MARKET PORTFOLIO
- ---------------------------------------
1997................................... 0.40% 5.08% 0.68% 4.80% N/A N/A
1996................................... 0.40 5.60 0.70 5.30 N/A N/A
1995................................... 0.40 4.20 0.68 3.92 N/A N/A
1994(1)................................ 0.40 2.83 0.67 2.56 N/A N/A
- ---------------------------------------
PRIME OBLIGATION MONEY MARKET PORTFOLIO
- ---------------------------------------
1997................................... 0.65% 4.83% 0.93% 4.55% N/A N/A
1996................................... 0.65 5.31 0.95 5.01 N/A N/A
1995................................... 0.65 3.95 0.93 3.67 N/A N/A
1994(2)................................ 0.65* 2.68* 0.93* 2.40* N/A N/A
- ---------------------------------------
INTERMEDIATE-TERM INCOME PORTFOLIO CLAS
- ---------------------------------------
1997................................... 0.65% 5.48% 0.80% 5.33% 34.67% N/A
1996................................... 0.65 5.68 0.84 5.49 121.47 N/A
1995................................... 0.65 5.21 0.86 5.00 141.51 N/A
1994(1)................................ 0.65 4.47 0.83 4.29 71.73 N/A
- ---------------------------------------
INTERMEDIATE-TERM INCOME PORTFOLIO CLAS
- ---------------------------------------
1997................................... 0.90% 5.20% 1.05% 5.05% 34.67% N/A
1996................................... 0.90 5.49 1.09 5.30 121.47 N/A
1995................................... 0.90 4.96 1.11 4.75 141.51 N/A
1994(3)................................ 0.90* 4.27* 1.08* 4.09* 71.73 N/A
- ---------------------------------------
GROWTH PORTFOLIO CLASS A**
- ---------------------------------------
1997................................... 1.10% 0.04% 1.11% 0.03% 130.69% $ 0.0600
1996................................... 1.10 0.62 1.17 0.55 189.48 N/A
1995................................... 1.10 0.74 1.24 0.60 84.00 N/A
1994(1)................................ 1.10 0.77 1.21 0.66 68.91 N/A
- ---------------------------------------
GROWTH PORTFOLIO CLASS B+**
- ---------------------------------------
1997................................... 1.35% (0.20)% 1.36% (0.21)% 130.69% $ 0.0600
1996................................... 1.35 0.30 1.42 0.23 189.48 N/A
1995................................... 1.35 0.49 1.49 0.35 84.00 N/A
1994(3)................................ 1.35* 0.33* 1.45* 0.23* 68.91 N/A
- ---------------------------------------
</TABLE>

* Annualized.
** Formerly the Diversified Growth Portfolio.
+ Total return does not reflect the sales charge.
++ Average commission rate paid per share for security purchases and sales
during the period. Presentation of the rate is only required for fiscal
years beginning after September 1, 1995.
(1) Commenced operations February 1, 1993.
(2) Commenced operations January 20, 1994.
(3) Commenced operations June 18, 1993.
<PAGE>
9

THE PORTFOLIO AND THE TRUST

The Golden Oak Family of Funds (the "Golden Oak Family") is a group of open-end
management investment companies (each a "portfolio") that are offered together
in order to provide investors with a number of investment alternatives. Each of
the portfolios is a separate series of shares of The Arbor Fund (the "Trust"),
an open-end management investment company. Shareholders may purchase units of
beneficial interest ("shares") in the portfolios through two separate classes,
Class A and Class B, which provide for variations in distribution costs and
dividends. Except for these differences between classes, each share of each
portfolio represents an undivided, proportionate interest in that portfolio.
This Prospectus offers only the Class A and Class B shares of the Golden Oak
Growth Portfolio (formerly the Golden Oak Diversified Growth Portfolio), Golden
Oak Value Portfolio, Golden Oak Intermediate-Term Income Portfolio, Golden Oak
Michigan Tax Free Bond Portfolio and Golden Oak Prime Obligation Money Market
Portfolio (each, a "Portfolio"; collectively, the "Portfolios"). For ease of
reference, the words "Golden Oak" are omitted from the Portfolios' names
throughout this Prospectus. Each of the Portfolios is a diversified mutual fund
except for the Michigan Portfolio, which is a non-diversified mutual fund.
Information regarding the Trust's other portfolios is contained in separate
prospectuses that may be obtained by calling 1-800-545-6331.

INVESTMENT OBJECTIVES AND POLICIES

THE GROWTH PORTFOLIO -- The investment objective of the Growth Portfolio is to
provide total return. There is no assurance that the Portfolio will achieve its
investment objective.

Under normal conditions, the Portfolio expects to be fully invested in common
stocks (and will be at least 75% invested in common stocks) listed on registered
exchanges in the United States or actively traded in the over-the-counter market
as further described below. In addition to investing in common stocks, the
Portfolio may invest in warrants and rights to purchase common stocks, United
States dollar denominated securities of foreign issuers traded in the United
States (including sponsored American Depositary Receipts traded on registered
exchanges or listed on NASDAQ), repurchase agreements, covered call options and
money market instruments of the type described below. The Portfolio may invest
up to 10% of its net assets in American Depositary Receipts, including American
Depositary Shares and New York Shares. The Portfolio may also write covered call
options and engage in related closing purchase transactions provided that the
aggregate value of such options does not exceed 10% of the Portfolio's net
assets as of the time such options are entered into by the Portfolio.
Nicholas-Applegate Capital Management (the "Sub-Adviser") will engage in such
transactions only as hedging transactions and not for speculative purposes.

The common stocks and other equity securities purchased by the Portfolio will be
those of companies which, in the Sub-Adviser's opinion, are well managed, have
an above average rate of return on equity, above average projected five year
earnings and dividend growth rates, a consistent record of dividend and earnings
increases and below average financial leverage. However, there is no assurance
that the Sub-Adviser will be able to accurately predict the stages of a business
cycle. In addition, the Portfolio invests primarily in equity securities that
fluctuate in value; therefore, the Portfolio's shares will fluctuate in value.

For temporary defensive purposes during periods when the Portfolio's Sub-Adviser
determines that market conditions warrant, the Portfolio may invest up to 100%
of its assets in money market instruments (consisting of securities issued or
guaranteed as to principal and interest by the United States government, its
agencies or instrumentalities, repurchase agreements collateralized by United
States Government securities and entered into with financial institutions the
Sub-Adviser deems creditworthy, certificates of deposit, time deposits and
bankers' acceptances issued by banks or savings and loan associations having net
assets of at least $1.0 billion as shown on their most recent public financial
statements, and deemed by the Sub-Adviser to present minimal credit risk, and
commercial paper rated in the two highest short-term rating categories), and may
hold a portion of its assets in cash. To the extent the Portfolio is engaged in
temporary defensive investment, the Portfolio will not be pursuing its
investment objective.
<PAGE>
10

The Portfolio reserves the right to engage in securities lending but has no
present intention to do so.

For the fiscal year ended January 31, 1997, the Portfolio's annual turnover rate
was approximately 131%. Such a turnover rate may result in higher transaction
costs and may result in additional taxes for shareholders.

THE VALUE PORTFOLIO -- The investment objective of the Value Portfolio is to
seek long-term capital appreciation. There is no assurance that the Portfolio
will achieve its investment objective.

The Portfolio attempts to achieve its investment objective by investing
primarily in common stocks, warrants, rights to purchase common stocks,
preferred stocks and securities convertible into common stocks (together,
"equity securities"). The Portfolio will be as fully invested as practicable in
equity securities and will focus on equity securities which are undervalued
relative to a company's earnings. Systematic Financial Management, L.P. (the
"Sub-Adviser") will invest in equity securities of companies based on an
analysis of various fundamental characteristics, including balance sheet items,
underlying sales and expense trends, earnings estimates, market position of the
company and industry outlook. The Portfolio may also invest in American
Depositary Receipts and enter into repurchase agreements. Although it has no
present intention to do so, the Portfolio reserves the ability to write and
purchase options for hedging purposes. Although the Portfolio intends to be as
fully invested as practicable in equity securities, the Portfolio may invest in
up to 15% of its assets in the money market instruments described below.

The Portfolio may invest up to 15% of its net assets in illiquid securities,
including restricted securities other than Section 4(2) commercial paper.
Restricted securities, including Rule 144A securities and Section 4(2)
commercial paper, that meet the criteria established by the Board of Trustees of
the Trust will be considered liquid.

For temporary defensive purposes during periods when the Portfolio's Sub-Adviser
determines that market conditions warrant, the Portfolio may invest up to 100%
of its assets in money market instruments (consisting of securities issued or
guaranteed by the United States Government, its agencies or instrumentalities,
repurchase agreements collateralized by United States Government securities and
entered into with financial institutions the Sub-Adviser deems creditworthy,
certificates of deposit, time deposits and bankers' acceptances issued by banks
or savings and loan associations having net assets of at least $1.0 billion as
shown on their most recent financial statements, and commercial paper rated in
one of the two highest short-term rating categories), and may hold a portion of
its assets in cash for liquidity purposes. To the extent the Portfolio is
engaged in temporary defensive investing, the Portfolio will not be pursuing its
investment objective.

THE INTERMEDIATE-TERM INCOME PORTFOLIO -- The investment objective of the
Intermediate-Term Income Portfolio is current income consistent with limited
price volatility. The Portfolio will seek to limit price volatility by
maintaining an average weighted maturity of three to ten years. There is no
assurance that the Portfolio will achieve its investment objective.

Under normal circumstances, at least 80% of the Portfolio's assets will be
invested in the following United States dollar denominated obligations: (i)
corporate bonds and debentures rated A or better by Standard & Poor's
Corporation ("S&P") or A or better by Moody's Investors Service ("Moody's") or
of comparable quality at the time of purchase as determined by the Adviser; (ii)
obligations issued or guaranteed as to principal and interest by the United
States Government, its agencies or instrumentalities; (iii) commercial paper
rated A-1 or better by Moody's or P-1 or better by S&P or of comparable quality
at the time of purchase as determined by the Adviser; (iv) short-term bank
obligations consisting of certificates of deposit, time deposits, and bankers'
acceptances of U.S. commercial banks or savings and loan institutions with
assets of at least $1.0 billion as shown on their most recent public financial
statements, that the Adviser deems to be comparable in quality to corporate
obligations in which the Portfolio may invest; and (v) repurchase agreements
involving any of the above securities.

The remaining 20% of the Portfolio's assets may be invested in (i) debt
securities issued or guaranteed by the government of Canada or its provincial or
local governments; (ii) debt securities issued or guaranteed by foreign
governments, their political
<PAGE>
11

subdivisions, agencies or instrumentalities and debt securities of supranational
entities; (iii) mortgage-backed securities and asset-backed securities rated in
one of the top two categories by S&P or Moody's; (iv) receipts evidencing
separately traded interest and principal component parts of United States
Government obligations ("STRIPS"); (v) taxable municipal securities; and (vi)
repurchase agreements involving such securities. The Portfolio may invest in
futures and options for hedging purposes, and will limit the outstanding
obligations to purchase securities under futures contracts to not more than 20%
of the Portfolio's total assets.

In the event a security owned by the Portfolio is downgraded below these ratings
categories, the Adviser will review the quality and credit-worthiness of such
security and take action, if any, that it deems appropriate.

The Portfolio expects to maintain an average weighted remaining maturity of
three to ten years and does not expect to purchase any single security with a
maturity of more than twenty years.

For temporary defensive purposes when the Adviser determines that market
conditions warrant, the Portfolio may invest up to 100% of its assets in the
money market instruments listed above, may hold a portion of its assets in cash
for liquidity purposes and may shorten the average maturity substantially. To
the extent the Portfolio is engaged in temporary defensive investing, the
Portfolio will not be pursuing its investment objective.

The Portfolio may enter into forward commitments or purchase securities on a
when-issued basis where such purchases are for investment and not for
speculative purposes. In addition, the Portfolio may engage in securities
lending.

THE MICHIGAN PORTFOLIO -- The investment objective of the Michigan Portfolio is
current income exempt from federal and Michigan income taxes consistent with
preservation of capital. There is no assurance that the Portfolio will achieve
its investment objective.

The Portfolio will invest primarily in obligations issued by or on behalf of the
states, territories or possessions of the United States or the District of
Columbia or their political subdivisions, agencies or instrumentalities, the
interest of which, in the opinion of counsel for the issuer, is exempt from
federal income tax (collectively, "Municipal Securities"). It is a fundamental
policy of the Portfolio that at least 80% of its net assets will be invested in
municipal securities the interest on which is exempt from federal income tax and
not subject to taxation as a preference item for purposes of the alternative
minimum tax. Under normal circumstances, at least 65% of the Portfolio will be
invested in municipal bonds and, except where acceptable securities are
unavailable as determined by the Adviser, at least 80% of the Portfolio's assets
will be invested in Municipal Securities, the interest of which, in the opinion
of bond counsel to the issuer, is exempt from Michigan income tax ("Michigan
Municipal Securities"). The Adviser expects to be fully invested in Municipal
Securities. The Portfolio will purchase Municipal Securities which are comprised
of (i) municipal bonds rated in one of the three highest rating categories; (ii)
municipal notes rated in one of the two highest rating categories; (iii)
commercial paper rated in one of the two highest short term rating categories;
or (iv) any of the foregoing that are not rated but are determined by the
Adviser to be of comparable quality at the time of investment. The Portfolio may
also invest up to 5% of its net assets in securities of closed-end investment
companies traded on a national securities exchange.

The Portfolio expects to maintain an average weighted remaining maturity of
three to ten years. The maximum maturity for any individual security is thirty
years.

The Portfolio is a non-diversified investment company which means that more than
5% of its assets may be invested in one or more issuers, although the Adviser
does not intend to invest more than 10% of the Portfolio's assets in any one
issuer. Since a relatively high percentage of assets of the Portfolio may be
invested in the obligations of a limited number of issuers, the value of shares
of the Portfolio may be more susceptible to any single economic, political or
regulatory occurrence than the shares of a diversified investment company would
be. The Portfolio intends to satisfy the diversification requirements necessary
to qualify as a regulated investment company under the Internal Revenue Code of
1986, as amended (the "Code").

For temporary defensive purposes, when the Adviser determines that market
conditions warrant, the Portfolio may invest up to 100% of its assets in
<PAGE>
12

taxable money market instruments (including repurchase agreements) and
securities subject to the alternative minimum tax and it may hold a portion of
its assets in cash for liquidity purposes. To the extent the Portfolio is
engaged in temporary defensive investing, the Portfolio will not be pursuing its
investment objective.

THE PRIME OBLIGATION PORTFOLIO -- The investment objective of the Prime
Obligation Portfolio is to preserve principal value and maintain a high degree
of liquidity while providing current income. It is also a fundamental policy of
the Portfolio to use its best efforts to maintain a constant net asset value of
$1.00 per share. There is no assurance that the Portfolio will achieve its
investment objective or that it will be able to maintain a constant net asset
value of $1.00 per share on a continuous basis.

The Portfolio intends to comply with regulations of the Securities and Exchange
Commission applicable to money market funds using the amortized cost method for
calculating net asset value. These regulations impose certain quality, maturity
and diversification restraints on Portfolio investments. Under these
regulations, the Portfolio will invest in only United States dollar denominated
securities, will maintain an average maturity on a dollar-weighted basis of 90
days or less, and will acquire only "eligible securities" that present minimal
credit risks and have a maturity of 397 days or less. For a further discussion
of these rules, see "Description of Permitted Investments."

The Portfolio intends to invest exclusively in (i) bills, notes, receipts and
bonds issued by the United States Treasury and STRIPs of such obligations that
are transferable through the Federal Book-Entry System ("U.S. Treasury
Obligations"); (ii) obligations issued or guaranteed as to principal and
interest by the agencies or instrumentalities of the United States Government;
(iii) commercial paper of United States or foreign issuers rated in the two
highest short-term rating categories at the time of investment or, if not rated,
as determined by Wellington Management Company, LLP (the "Sub-Adviser") to be of
comparable quality; (iv) obligations (certificates of deposit, bank notes, time
deposits, bankers' acceptances, European certificates of deposit, European time
deposits, Canadian time deposits, Eurodollar obligations and Yankee Bank
obligations) of U.S. commercial banks, U.S. savings and loan institutions and
U.S. and London branches of foreign banks that have total assets of $1 billion
or more as shown on their most recently published financial statements (the
Portfolio may not invest more than 25% of its total assets in obligations issued
by foreign branches of U.S. banks and London branches of foreign banks); (v)
U.S. dollar denominated obligations of foreign governments including Canadian
and Provincial Government and Crown Agency obligations; (vi) short-term
corporate obligations of United States and foreign issuers with commercial paper
of comparable quality and security that meet the above ratings or, if not rated,
determined by the Sub-Adviser to be of comparable quality; (vii) repurchase
agreements involving any of the foregoing obligations; (viii) short-term
obligations issued by state and local governmental issuers, which are rated, at
the time of investment, by at least two nationally recognized statistical
ratings organizations ("NRSROs") in one of the two highest municipal bond rating
categories, and carry yields that are competitive with those of other types of
money market instruments of comparable quality and security that meet the above
ratings or, if not rated, determined by the Sub-Adviser to be of comparable
quality; (ix) obligations of supranational entities satisfying the credit
standards described above or, if not rated, determined by the Portfolio's
Sub-Adviser to be of comparable quality; and (x) to the extent permitted by
applicable law, shares of other investment companies.

The Portfolio may invest up to 10% of its net assets in illiquid securities,
including restricted securities other than Section 4(2) commercial paper.
Restricted securities, including Rule 144A securities and Section 4(2)
commercial paper, that meet the criteria established by the Board of Trustees of
the Trust will be considered liquid.

The Portfolio reserves the right to engage in securities lending but has no
present intention to do so. The Portfolio may also engage in forward commitments
or purchase securities on a when-issued basis.
<PAGE>
13

For additional information regarding the permitted investments of the Portfolios
see "Investment Objectives and Policies -- Risk Factors" and "Description of
Permitted Investments" in the Prospectus and "Description of Permitted
Investments" in the Statement of Additional Information.

RISK FACTORS

The market value of the Intermediate-Term Income and Michigan Portfolios' fixed
income investments will change in response to interest rate changes and other
factors and the impact of such changes will depend, in part, upon the ratings
and maturities of a Portfolio's investments. During periods of falling interest
rates, the values of outstanding fixed income securities generally rise.
Conversely, during periods of rising interest rates, the values of such
securities generally decline. Moreover, while securities with longer maturity
tend to produce higher yields, the price of longer maturity securities are also
subject to greater market fluctuations as a result of changes in interest rates.
Bonds rated A by S&P or Moody's possess many favorable investment attributes and
are to be considered as upper-medium grade obligations. Such debt rated A has a
strong capacity to pay interest and repay principal although it is somewhat more
susceptible to the adverse effects of changes in circumstances and economic
conditions than debt in higher rated categories.

Changes by recognized agencies in the rating of any fixed income security and in
the ability of an issuer to make payments of interest and principal also affect
the value of these investments. Changes in the value of portfolio securities
will not affect cash income derived from these securities but will affect a
Portfolio's net asset value. Zero coupon securities may be more subject to price
volatility than securities that pay coupon interest.

In general, mortgage-backed securities are subject to prepayment of the
underlying mortgages. During periods of a decline in interest rates, prepayment
of mortgages underlying these securities can be expected to accelerate. When the
mortgage-backed securities held by a Portfolio are prepaid, the Portfolio may
reinvest the proceeds in securities, the yield of which reflects prevailing
interest rates. Thus, mortgage-backed securities may not be an effective means
of locking in long-term interest rates for a Portfolio.

Investments in securities of foreign issuers may subject a Portfolio to
different risks than those attendant to investments in securities of United
States issuers, such as differences in accounting, auditing and financial
reporting standards, the possibility of expropriation or confiscatory taxation,
and political instability. There may be less publicly available information with
regard to foreign issuers, than domestic issuers.

The Michigan Portfolio currently contemplates that it will not invest more than
25% of its total assets (at market value at the time of purchase) in Municipal
Securities, the interest of which is paid from venues or projects with similar
characteristics. See also "Description of Permitted Investments -- Special
Factors Relating to Michigan Municipal Securities" in the Statement of
Additional Information.

INVESTMENT LIMITATIONS AND
FUNDAMENTAL POLICIES

The investment objective and the following investment limitations are
fundamental policies of the Portfolios. Fundamental policies cannot be changed
with respect to a Portfolio without the consent of the holders of a majority of
the Portfolio's outstanding shares.

A Portfolio may not:

1. Purchase securities of any issuer (except securities issued or guaranteed by
the United States Government, its agencies or instrumentalities and repurchase
agreements involving such securities) if, as a result, more than 5% of the total
assets of the Portfolio would be invested in the securities of such issuer. This
restriction applies to 75% of a Portfolio's assets. This limitation does not
apply to the Michigan Portfolio. As a money market fund, the Prime Obligation
Portfolio is subject to additional diversification requirements. See
"Description of Permitted Investments -- Restraints on Investments by Money
Market Funds."

2. Purchase any securities which would cause more than 25% of the total assets
of the Portfolio to be invested in the securities of one or more issuers
conducting their principal business activities in the same industry, provided
that this limitation does not apply to (a) investments in the obligations issued
or
<PAGE>
14

guaranteed by the United States Government, its agencies or instrumentalities
and repurchase agreements involving such securities, (b) investments in
tax-exempt securities issued by governments or political subdivisions of
government or (c) obligations issued by domestic branches of United States banks
or United States branches of foreign banks subject to the same regulations as
United States banks. For purposes of this limitation (i) utility companies will
be divided according to their services, for example, gas, gas transmission,
electric and telephone will each be considered a separate industry; (ii)
financial service companies will be classified according to the end users of
their services, for example, automobile finance, bank finance and diversified
finance will each be considered a separate industry; (iii) supranational
entities will be considered to be a separate industry; and (iv) loan
participations are considered to be issued by both the issuing bank and the
underlying corporate borrower.

3. Make loans, except that a Portfolio may (i) purchase or hold debt
instruments in accordance with its investment objective and policies; (ii) enter
into repurchase agreements; and (iii) engage in securities lending as described
in this Prospectus and in the Statement of Additional Information.

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

THE ADVISER

Citizens Bank (the "Adviser") serves as investment adviser to the Portfolios
pursuant to an investment advisory agreement (the "Advisory Agreement") with the
Trust. Under the Advisory Agreement, the Adviser is responsible for the
investment decisions for each Portfolio, and continuously reviews, supervises
and administers each Portfolio's investment program. The Trust and the Adviser
have employed Wellington Management Company, LLP as the investment sub-adviser
to manage the Prime Obligation Portfolio, Systematic Financial Management, L.P.
as the investment sub-adviser to the Value Portfolio and Nicholas-Applegate
Capital Management as the investment sub-adviser to the Growth Portfolio, in
each case subject to the supervision of the Adviser and the Trustees, on a
day-to-day basis. In conjunction with the Adviser, each investment sub-adviser
makes the investment decisions for the assets of the Portfolio and continuously
reviews, supervises and administers the Portfolio's investment program. See "The
Sub-Advisers."

The Adviser is independent of SEI Fund Resources (the "Administrator") and
discharges its responsibilities subject to the supervision of, and policies
established by, the Trustees of the Trust.

The Adviser, 328 S. Saginaw Street, Flint, Michigan 48502, was incorporated in
1871 in the state of Michigan. Citizens Bank is a wholly-owned subsidiary of
Citizens Banking Corporation. Citizens Banking Corporation is an interstate bank
holding company with over $3.5 billion in assets and 92 banking offices in
Michigan and Illinois. As of January 31, 1997, the Adviser's total assets under
management were $1.7 billion. The Adviser has managed bank common funds, pension
plan assets and personal trust assets since 1927. The Adviser's sole experience
as an investment adviser to investment companies is as investment adviser to the
Trust.

Pascal M. Romano, Assistant Vice-President and Trust Officer of the Adviser
began managing the Michigan Portfolio in July, 1996. He has managed fixed income
portfolios since 1983.

Christopher W. Wheeler, Assistant Vice-President and Trust Officer of the
Adviser, has managed the Intermediate-Term Income Portfolio since February,
1996. He has managed the Adviser's fixed income portfolios and trust accounts
since 1993.

For its services, the Adviser is entitled to a fee, which is calculated daily
and paid monthly, at an annual rate based on the average daily net assets of
each Portfolio as follows: Growth Portfolio, .74%; Value Portfolio, .74%;
Intermediate-Term Income Portfolio, .50%; Michigan Portfolio, .50%; and Prime
Obligation Portfolio, .30%. From this fee, the Adviser pays the fees of certain
of the Sub-Advisers. See "The Sub-Advisers" below. The Adviser has voluntarily
agreed to waive a portion of its fees in order to limit the total operating
expenses of Class A and Class B shares of the Growth, Value, Intermediate-Term
Income, Michigan and Prime Obligation Portfolios (exclusive of distribution
expenses charged to Class B shares) to not more than 1.10%, 1.10%, .65%, .65%
and .40%, respectively, of each Portfolio's average daily net
<PAGE>
15

assets. The Adviser reserves the right, in its sole discretion, to terminate
this voluntary fee waiver at any time. For the fiscal year ended January 31,
1997, the Growth, Intermediate-Term Income and Prime Obligation Portfolios paid
the Adviser an advisory fee of .73%, .35% and .02% respectively, of each
Portfolio's average daily net assets. The Michigan and Value Portfolios were not
in operation during the fiscal year ended January 31, 1997. The Portfolios may
also execute brokerage or other agency transactions through an affiliate of the
Adviser. See "The Distributor" below regarding such transactions.

The Glass-Steagall Act restricts the securities activities of banks such as the
Adviser, but federal regulatory authorities permit such banks to provide
investment advisory and other services to mutual funds. Should this position be
challenged successfully in court or reversed by legislation, the Trust might
have to make other investment advisory arrangements.

THE SUB-ADVISERS

Wellington Management Company, LLP (a "Sub-Adviser" or "WMC") serves as the
investment sub-adviser for the Prime Obligation Portfolio, Systematic Financial
Management, L.P. (a "Sub-Adviser" or "Systematic Financial") serves as
investment sub-adviser for the Value Portfolio and Nicholas-Applegate Capital
Management (a "Sub-Adviser" or "Nicholas-Applegate") serves as investment sub-
adviser for the Growth Portfolio pursuant to sub-advisory agreements (each, a
"Sub-Advisory Agreement") with the Trust and/or the Adviser. Under each
Sub-Advisory Agreement, the Sub-Adviser manages the investments of the
appropriate Portfolio, selects investments, and places all orders for purchases
and sales of the Portfolio's securities, subject to the general supervision of
the Trustees of the Trust and the Adviser.

WMC is a professional investment counseling firm which provides investment
services to investment companies, employee benefit plans, endowments,
foundations, and other institutions and individuals. As of January 31, 1997, WMC
had discretionary management authority with respect to approximately $133
billion of assets. WMC and its predecessor organizations have provided
investment advisory services to investment companies since 1933 and to
investment counseling clients since 1960. Wellington Management Company, LLP, 75
State Street, Boston, MA 02109, is a Massachusetts limited liability
partnership, of which the following persons are managing partners: Robert W.
Doran, Duncan M. McFarland and John R. Ryan.

For the services provided and expenses incurred pursuant to the Sub-Advisory
Agreement, WMC is entitled to receive from the Portfolio a fee, computed daily
and paid monthly, at the annual rate of .075% of the average daily net assets of
the Portfolio. For the fiscal year ended January 31, 1997, the Portfolio paid
the Sub-Adviser an advisory fee of .075% of its average daily net assets.

Systematic Financial serves as the investment sub-adviser for the Value
Portfolio. Systematic was established in 1982 and has managed portfolios on a
discretionary basis since inception. Systematic's clients include foundations,
pension funds, public retirement systems and Taft-Hartley plans as well as other
institutional investors and individuals. Systematic Financial's value strategy,
which was originally developed by our Chief Investment Officer, has been
employed since the early 1980's. Systematic is a Delaware limited partnership.
The principal business address of Systematic Financial Management, L.P. is Two
Executive Drive, Fort Lee, NJ 07024.

For the services provided and the expenses incurred pursuant to the Sub-Advisory
Agreement, Systematic Financial is entitled to receive from the Adviser a fee,
calculated daily and paid quarterly, at an annual rate of .45% of the first $50
million, .35% of the next $50 million and .40% of any amount above $100 million
of the average daily net assets of the Portfolio.

Gyanendra Kumar Joshi, Senior Managing Director of Systematic Financial, manages
the Value Portfolio. Mr. Joshi joined Systematic Financial in June, 1996. Prior
to that time, Mr. Joshi was Managing Director of Mitchell Hutchins Institutional
Investors. Mr. Joshi has been involved in the investment industry for 26 years.

Nicholas-Applegate serves as the investment sub-adviser for the Growth
Portfolio. Nicholas-Applegate has operated as a registered investment adviser
providing investment advisory services for a wide variety of clients including
employee benefit plans, university endowments, foundations, public retirement
systems and unions, other institutional investors and individuals since 1984
and, since
<PAGE>
16

April 20, 1987, investment companies. As of January 31, 1997, Nicholas-Applegate
had discretionary management authority with respect to approximately $31.4
billion of assets. Nicholas-Applegate, pursuant to a partnership agreement, is
controlled by its general partner Nicholas-Applegate Capital Management
Holdings, L.P., a California limited partnership controlled by Arthur E.
Nicholas. The principal business address of Nicholas-Applegate is 600 West
Broadway, 29th Floor, San Diego, California 92101.

The Growth Portfolio is managed by Nicholas-Applegate's systems-driven portfolio
management team headed by Catherine Somhegyi, Chief Investment Officer--Global
Investments and Lawrence J. Speidell, CFA, since March, 1996. Mr. Speidell had
been sole manager since August 31, 1995. Ms. Somhegyi has managed similar
institutional accounts for Nicholas-Applegate since 1992.

Mr. Speidell joined Nicholas-Applegate in 1994. Prior to that time, Mr. Speidell
was an institutional portfolio manager with Batterymarch Financial Management
where he was involved in the development of domestic and international portfolio
strategies and portfolio optimization. Mr. Speidell has been involved in the
investment industry for over 25 years.

For the services provided and the expenses incurred pursuant to the Sub-Advisory
Agreement, Nicholas-Applegate is entitled to receive from the Adviser a fee,
calculated daily and paid quarterly, at an annual rate of .40% of the average
daily net assets of the Portfolio. For the fiscal year ended January 31, 1997,
the Portfolio paid the Sub-Adviser an advisory fee of .40% of its average daily
net assets.

THE ADMINISTRATOR

SEI Fund Resources (the "Administrator"), Oaks, Pennsylvania 19456, provides the
Portfolios with administrative services, other than investment advisory
services, including all regulatory reporting, necessary office space, equipment,
personnel and facilities, pursuant to an administration agreement (the
"Administration Agreement") with the Trust. The Administrator also serves as the
shareholder servicing agent of the Trust under the terms of the Administration
Agreement.

For its services, the Administrator is entitled to a fee, which is calculated
daily and paid monthly, at an annual rate of .20% of the average daily net
assets of the Growth, Value, Intermediate-Term Income, Michigan and Prime
Obligation Portfolios. The Value Portfolio and the Michigan Portfolio are also
subject to a minimum fee of $100,000.

For the fiscal year ended January 31, 1997, the Portfolios paid the
Administrator the following administration fees (shown as a percentage of
average daily net assets): Growth, .20%; Intermediate-Term Income, .20%; and
Prime Obligation, .20%. The Value and Michigan Portfolios had not commenced
operations as of January 31, 1997.

THE TRANSFER AGENT

DST Systems, Inc., 1004 Baltimore Street, Kansas City, Missouri 64105 (the
"Transfer Agent"), serves as the transfer agent and dividend disbursing agent
for the Portfolios under a transfer agency agreement with the Trust.

THE DISTRIBUTOR

SEI Financial Services Company (the "Distributor"), Oaks, Pennsylvania 19456, a
wholly-owned subsidiary of SEI Investments Company and an affiliate of the
administrator, serves as the Portfolios' distributor pursuant to a distribution
agreement ("Distribution Agreement") with the Trust which applies to Class A and
Class B shares of the Portfolio.

The Class B shares of the Portfolio have a distribution plan (the "Class B
Plan") pursuant to Rule 12b-1 under the Investment Company Act of 1940, as
amended (the "1940 Act"). As provided in the Distribution Agreement and the
Class B Plan, the Trust will pay an annual fee of .25% of the Class B
Portfolios' average daily net assets to the Distributor as compensation for its
services. From this amount the Distributor may make payments to financial
institutions and intermediaries such as banks (including Citizens Bank), savings
and loan associations, insurance companies, investment counselors,
broker-dealers, and the Distributor's affiliates and subsidiaries as
compensation for services, reimbursement of expenses incurred in connection with
distribution assistance or provision of shareholder services. The Class B Plan
is characterized as a compensation plan since the distribution fee will be paid
to the Distributor without regard to the distribution or shareholder service
<PAGE>
17

expenses incurred by the Distributor or the amount of payments made to financial
institutions and intermediaries. The Trust intends to operate the Class B Plan
in accordance with its terms and with the NASD rules concerning sales charges.
The Portfolio may also execute brokerage or other agency transactions through an
affiliate of the Adviser or through the Distributor for which the affiliate or
the Distributor may receive "usual and customary" compensation. The Adviser will
use its best efforts to obtain the best available price and most favorable
execution with respect to all transactions for the Portfolios.

The Class A shares of each Portfolio are offered without distribution fees to
institutional investors, including Citizens Bank, its affiliates and
correspondent banks, for the investment of funds for which they act in a
fiduciary, agency or custodial capacity. It is possible that an institution may
offer different classes of shares to its customers and thus receive different
compensation with respect to different classes of shares. These financial
institutions may also charge separate fees to their customers.

Certain financial institutions offering shares to their customers may be
required to register as dealers pursuant to state laws.

The Distributor may, from time to time and at its own expense, provide
promotional incentives in the form of cash or other compensation to certain
financial institutions and intermediaries whose registered representatives have
sold or are expected to sell significant amounts of the shares of each
Portfolio. Such other compensation may take the form of payments for travel
expenses, including lodging, incurred in connection with trips taken by
qualifying registered representatives to places within or outside of the United
States.

HOW TO PURCHASE SHARES

Shares of each Portfolio are sold on a continuous basis and may be purchased
directly from the Transfer Agent, by mail or by wire transfer. Shares may also
be purchased through a broker-dealer which has established a dealer agreement
with the Distributor or through a financial institution.

Shares of each Portfolio are offered only to residents of states in which the
shares are eligible for purchase.

Purchases of shares of a Portfolio may be made on days on which the New York
Stock Exchange and the Federal Reserve wire system are open for business
("Business Days"). However, shares of the Portfolios cannot be purchased by
Federal Reserve wire on federal holidays restricting wire transfers. The minimum
initial investment in the Class A shares is $1,000,000 and the minimum initial
investment in the Class B Shares is $1,000 ($500 minimum for an IRA account);
however, the minimum investment may be waived at the Distributor's discretion.
All subsequent purchases of Class B shares must be at least $50.

A purchase order for Class A or Class B shares will be effective as of the
Business Day received by the Transfer Agent if the Transfer Agent receives an
order and payment for the shares (by wire transfer or check) prior to 4:00 p.m.,
Eastern time, or at the close of business of the New York Stock Exchange, except
that for the Prime Obligation Portfolio an order and payment for the shares must
be received by the Transfer Agent prior to 12:00 noon, Eastern time.

The Trust reserves the right to reject a purchase order when the Distributor or
Transfer Agent determines that it is not in the best interest of the Trust
and/or its shareholders to accept such order.

BY MAIL (CLASS B ONLY)

Investors in the Class B shares may purchase shares of a Portfolio by completing
and signing an Account Application form and mailing it, along with a check (or
other negotiable bank instrument or money order) payable to "The Arbor
Fund-Golden Oak (Name of Portfolio)," to the Transfer Agent. Third party checks,
credit cards, credit card checks and cash will not be accepted. When purchases
are made by check, redemption proceeds will not be forwarded until the
investment being redeemed has been in the account for 10 business days.
Subsequent purchases of shares may be made at any time by mailing a check (or
other negotiable bank draft or money order) to the Transfer Agent. An investor
in Class A shares of a Portfolio may not purchase shares by check. If a check
received does not clear, the purchase will be cancelled and the investor could
be liable for any losses or fees incurred.
<PAGE>
18

Account Application forms can be obtained by calling 1-800-545-6331.

BY WIRE TRANSFER

Shareholders having an account with a commercial bank that is a member of the
Federal Reserve System may purchase shares of the Portfolio by requesting their
bank to transmit funds by wire to: United Missouri Bank, N.A.; ABA #10-10-00695;
for Account Number 98-7052-398-1; Further Credit: Golden Oak (Name of
Portfolio). The Shareholder's name and account number must be specified in the
wire.

INITIAL PURCHASES: Before making an initial investment by wire, an investor
must first telephone 1-800-808-4920 to be assigned an account number. The
investor's name, account number, taxpayer identification number or Social
Security number, and address must be specified in the wire. In addition, an
Account Application should be promptly forwarded to: Golden Oak Family of Funds,
c/o The Arbor Fund, P.O. Box 419947, Kansas City, MO 64141-6947.

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

SYSTEMATIC INVESTMENT PLAN
("SIP") (CLASS B ONLY)

Class B Shareholders may also arrange for periodic additional investments in any
Portfolio through automatic deductions by Automated Clearing House ("ACH") from
a checking account by completing the appropriate section of the Account
Application form. The SIP is subject to account minimum initial purchase amounts
and minimum maintained balance requirements. The minimum pre-authorized
investment amount is $50 per month. An Account Application form may be obtained
by calling 1-800-545-6331.

OTHER INFORMATION REGARDING PURCHASES

Class A and Class B Shares may also be purchased through financial institutions,
including Citizens Bank or its affiliates, that provide distribution assistance
or shareholder services to a Portfolio. Shares purchased by persons
("Customers") through financial institutions may be held of record by the
financial institution. Financial institutions may impose an earlier cut-off time
for receipt of purchase orders directed through them to allow for processing and
transmittal of these orders to the Transfer Agent for effectiveness the same
day. Customers should contact their financial institution for information as to
the institution's procedures for transmitting purchase, exchange or redemption
orders to the Trust.

Customers who desire to transfer the registration of shares beneficially owned
by them but held of record by a financial institution should contact the
institution to accomplish such change. Other shareholders who desire to transfer
the registration of their shares should contact the Transfer Agent to accomplish
such change.

Purchases may be made by direct deposit or ACH transactions.

Depending upon the terms of a particular Customer account, a financial
institution may charge Customer account fees, that is, fees in addition to the
fees described herein. Information concerning these services and any charges
will be provided to the Customer by the financial institution.

A purchase order for shares will be executed at a per share price equal to the
net asset value next determined after the purchase order is effective plus any
applicable sales charge (the "offering price"). Net asset value per share of
each Portfolio is determined as of the close of business of the New York Stock
Exchange (currently 4:00 p.m., Eastern time) other than the Prime Obligation
Portfolio. The Prime Obligation Portfolio determines its net asset value as of
12:00 noon, Eastern time. No certificates representing shares will be issued.
For each Portfolio except the Prime Obligation Portfolio, the net asset value
per share is determined by dividing the total market value of the Portfolio's
investments and other assets, less any liabilities, by the total number of
outstanding shares of the Portfolio. For the Prime Obligation Portfolio the net
asset value per share is determined using amortized cost method described in the
Statement of Additional Information. Pursuant to guidelines adopted and
monitored by the Trustees, a Portfolio may use a pricing service to provide
market quotations or fair
<PAGE>
19

market valuations. A pricing service may derive such valuations through the use
of a matrix system to value fixed income securities which considers factors such
as securities prices, yield features, ratings, and developments related to a
specific security. Purchases will be made in full and fractional shares of a
Portfolio calculated to three decimal places. Although the methodology and
procedures are identical, the net asset value per share of classes within a
Portfolio may differ because of the distribution expenses paid by Class B
shares.

The following table shows the regular sales charge on Class B shares of the
Growth and Value Portfolios to a "single purchaser" (defined below) together
with the sales load reallowed to certain financial institutions (the
"commission"):

<TABLE>
<CAPTION>
SALES CHARGE SALES CHARGE DEALER AND
AS A AS A BROKERAGE
PERCENTAGE OF PERCENTAGE OF COMMISSION AS A
OFFERING NET AMOUNT PERCENTAGE OF
AMOUNT OF PURCHASE PRICE INVESTED OFFERING PRICE
- ----------------------- ------------- ------------- ---------------
<S> <C> <C> <C>
Less than $50,000...... 5.75% 6.10% 5.15%
$50,000-$99,999........ 4.50% 4.71% 4.00%
$100,000-$249,999...... 3.50% 3.63% 3.10%
$250,000-$499,999...... 2.60% 2.67% 2.30%
$500,000-$999,999...... 2.00% 2.04% 1.80%
$1,000,000 and above... NAV 0 0
</TABLE>

The following table shows the regular sales charge on Class B shares of the
Intermediate-Term Income and Michigan Portfolios to a "single purchaser"
together with the commission:

<TABLE>
<CAPTION>
SALES CHARGE SALES CHARGE DEALER AND
AS A AS A BROKERAGE
PERCENTAGE OF PERCENTAGE OF COMMISSION AS A
OFFERING NET AMOUNT PERCENTAGE OF
AMOUNT OF PURCHASE PRICE INVESTED OFFERING PRICE
- ----------------------- ------------- ------------- ---------------
<S> <C> <C> <C>
Less than $100,000..... 4.50% 4.71% 4.00%
$100,000-$249,999...... 3.50% 3.63% 3.10%
$250,000-$499,999...... 2.60% 2.67% 2.30%
$500,000-$999,999...... 2.00% 2.04% 1.80%
$1,000,000 and above... NAV 0 0
</TABLE>

There is no sales charge imposed on Class B shares of the Prime Obligation
Portfolio.

The commissions shown in the tables apply to sales made through financial
institutions. Under certain circumstances, commissions up to the amount of the
entire sales charge may be reallowed to certain financial institutions, who
might then be deemed to be "underwriters" under the Securities Act of 1933.

RIGHT OF ACCUMULATION

In calculating the sales charge rates applicable to current purchases of Class B
shares of the Portfolio, a "single purchaser" is entitled to cumulate current
purchases with the current market value of previously purchased Class B shares
of (i) the Growth and Value Portfolios, and (ii) the Intermediate-Term Income
and Michigan Portfolios (the "Eligible Portfolios") which were purchased subject
to a comparable sales charge.

The term "single purchaser" refers to (i) an individual, (ii) an individual and
spouse purchasing shares of a Portfolio for their own account or for trust or
custodial accounts for their minor children, or (iii) a fiduciary purchasing for
any one trust, estate or fiduciary account, including employee benefit plans
created under Sections 401 or 457 of the Internal Revenue Code of 1986, as
amended (the "Code"), including related plans of the same employer. To be
entitled to a reduced sales charge based upon shares already owned, the investor
must ask the Transfer Agent for such reduction at the time of purchase and
provide the account number(s) of the investor, the investor and spouse, and
their minor children. A Portfolio may amend or terminate this right of
accumulation at any time as to subsequent purchases.

LETTER OF INTENT

By submitting a Letter of Intent (the "Letter") to the Transfer Agent, a single
purchaser may purchase shares of a Portfolio and the other Eligible Portfolios
during a 13-month period at the reduced sales charge rates applying to the
aggregate amount of the intended purchases stated in the Letter. The Letter may
apply retroactively to purchases made up to 90 days before the date of the
Letter. It is the responsibility of the shareholder to notify the Transfer Agent
at the time the Letter is submitted that there are prior purchases that may
apply.

OTHER CIRCUMSTANCES

No sales charge is imposed on shares of a Portfolio: (i) issued in plans of
reorganization, such as mergers, asset acquisitions and exchange offers, to
which the Trust is a party; (ii) sold to dealers or
<PAGE>
20

brokers that have a sales agreement with the Distributor, for their own account
or for retirement plans for their employees or sold to employees (and their
spouses) of dealers or brokers that certify to the Distributor at the time of
purchase that such purchase is for their own account (or for the benefit of such
employees' minor children); (iii) purchased in aggregate amounts of $1 million
or more by tax exempt organizations enumerated in Section 501(c) of the Code or
employee benefit plans created under Sections 401 or 457 of the Code; (iv) sold
to Trustees and officers of the Trust and employees of the Adviser and its
affiliates; or (v) sold to agency, custody and fiduciary accounts of the Adviser
and its affiliates.

A description of the above and other plans and privileges by which a sales
charge may be reduced is set forth in the "Purchase and Redemption of Shares"
section of the Statement of Additional Information.

HOW TO EXCHANGE SHARES

Some or all of the shares of a Portfolio for which payment has been received
(i.e., an established account) may be exchanged for shares, at their net asset
value, of other Eligible Portfolios with similar or lower sales loads or for
shares of the Prime Obligation Portfolio which does not have a sales load.
Exchanges will be made only after instructions in writing or by telephone (an
"Exchange Request") are received for an established account by the Transfer
Agent. Exchange instructions by telephone may only be accepted if previously
elected on the account application.

In the case of shares held of record by Citizens Bank or another financial
institution but beneficially owned by a Customer, to exchange such shares the
Customer should contact Citizens Bank or the financial institution who will
contact the Transfer Agent and effect the exchange on behalf of the Customer. If
an exchange request in good order is received by the Transfer Agent by 4:00
p.m., Eastern time, on any Business Day, the exchange usually will occur on that
day. Any shareholder or Customer who wishes to make an exchange must have
received a current prospectus of the Portfolio in which he or she wishes to
invest before the exchange will be effected.

An exchange from the Class A shares to the Class B shares of a Portfolio will
occur automatically when a Class A shareholder's account falls below the
$1,000,000 minimum balance. The Trust will provide thirty days' notice of any
such exchange. The exchange will take place at net asset value, without the
imposition of a sales load, fee or other charge. After the exchange, the
exchanged shares will be subject to all fees applicable to Class B shares. In
the event that a shareholder declines to accept an automatic exchange, and if
the shareholder does not meet the requirements for investing in Class A shares,
the Trust reserves the right to redeem the shares upon expiration of the
thirty-day period. Each Portfolio reserves the right to require shareholders to
complete an application or other documentation in connection with the exchange.

HOW TO REDEEM SHARES

Shareholders may redeem their shares without charge on any Business Day and
shares may ordinarily be redeemed by mail, by telephone or by wire transfer. A
wire redemption fee (currently $10.00) is charged for wire redemptions except
that certain financial institutions may be exempt from this wire charge.

BY MAIL

A written request for redemption must be received by the Transfer Agent in good
form in order to constitute a valid request for redemption. Valid written
redemption requests will be effective on receipt. All shareholders of record
must sign the redemption request. The Transfer Agent may require that the
signature on the written request be guaranteed. The signature guarantee
requirement will be waived if all of the following conditions apply: (1) the
redemption is for $50,000 worth of shares or less, (2) the redemption check is
payable to the shareholder(s) of record, and (3) the redemption check is mailed
to the shareholder(s) at the address of record. The Trust and the Transfer Agent
reserve the right to amend these requirements without notice.

A signature guarantee is a widely accepted way to protect shareholders by
verifying the signature on certain redemption requests. The Trust requires
signature guarantees to be provided in the following circumstances: (1) written
requests for redemptions
<PAGE>
21

in excess of $50,000; (2) all written requests to wire redemption proceeds to a
bank other than the bank previously designated on the Account Application; and
(3) redemption requests that provide that the redemption proceeds should be sent
to an address other than the address of record or to a person other than the
registered shareholder(s) for the account. Signature guarantees can be obtained
from any of the following institutions: a national or state bank, a trust
company, a federal savings and loan association, or a broker-dealer that is a
member of a national securities exchange. The Trust does not accept guarantees
from notaries public or from organizations that do not provide reimbursement in
the case of fraud.

For information about the proper form of redemption requests, call
1-800-808-4920. The shareholder may also have the proceeds mailed to a
commercial bank account previously designated on the Account Application or by
written instruction to the Transfer Agent. There is no charge for having
redemption requests mailed to a designated bank account.

BY TELEPHONE

Shares may be redeemed by telephone if the shareholder elects that option on the
Account Application. Telephone redemption orders may be made by the shareholder
by calling the Transfer Agent at 1-800-808-4920. Wire redemption requests may be
made to the Transfer Agent, who will add a wire redemption charge (presently
$10.00, except that certain financial institutions may be exempt from this wire
charge) to the amount of the redemption. Telephone redemption orders must be
placed with the Transfer Agent prior to 4:00 p.m., Eastern time for each
Portfolio except the Prime Obligation Portfolio and as of 12:00 noon, Eastern
time for the Prime Obligation Portfolio on any Business Day in order to be
effective on such day. The shareholder may have the proceeds mailed to his or
her address or mailed or wired to a commercial bank account previously
designated on the Account Application. Under most circumstances, payments will
be transmitted on the next Business Day following receipt of a valid request for
redemption. Shareholders may not close their accounts by telephone.

Neither the Trust nor the Transfer Agent will be responsible for any loss,
liability, cost or expense for acting upon wire instructions or upon telephone
instructions that it reasonably believes to be genuine. The Trust and the
Transfer Agent will each employ reasonable procedures to confirm that
instructions communicated by telephone are genuine, including requiring a form
of personal identification prior to acting upon instructions received by
telephone and recording telephone instructions. If market conditions are
extraordinarily active, or other extraordinary circumstances exist, and a
shareholder experiences difficulties placing redemption orders by telephone, the
shareholder may wish to consider placing the order by other means, such as mail
or overnight delivery.

CHECK WRITING SERVICE

Class B shareholders of the Prime Obligation Portfolio may redeem shares by
writing checks on his or her account for $500 or more. Once a shareholder has
signed and returned a signature card, he or she will receive a supply of checks.
The check may be made payable to any person, and the shareholder's account will
continue to earn dividends until the check clears. These checks are free, but
the shareholder's account will be charged a fee (currently $15) for stopping
payment of a check upon the shareholder's request, or if the check cannot be
honored because of insufficient funds or other valid reasons.

Because of the difficulty of determining in advance the exact value of a
Portfolio account, a shareholder may not use a check to close his or her
account.

OTHER INFORMATION REGARDING REDEMPTIONS

The redemption price for the Class A and Class B shares is the net asset value
per share next determined after the request for redemption is effective. Payment
to shareholders for shares redeemed will generally be made within seven days
after receipt by the Transfer Agent of the redemption request in good order.

At various times, a Portfolio may be requested to redeem shares for which it has
not yet received good payment. In such circumstances, redemption proceeds will
not be forwarded until the investment being redeemed has been in the account for
10 business days. A Portfolio intends to pay cash for all shares redeemed, but
under abnormal conditions that make payment in cash unwise, payment may be made
wholly or partly in portfolio securities with
<PAGE>
22

a market value equal to the redemption price. In such cases, an investor may
incur brokerage costs in converting such securities to cash.

Due to the relatively high costs of handling small investments, a Portfolio
reserves the right to redeem, at net asset value, the shares of any shareholder
if, because of redemptions of shares by or on behalf of the shareholder, the
account of such shareholder decreases in value below the minimum initial
purchase amount for the applicable class of shares. Accordingly, an investor
purchasing shares of a Portfolio in only the minimum investment amount may be
subject to such involuntary redemption if he or she thereafter redeems any of
these shares. Before the Portfolio exercises its right to redeem such shares and
to send the proceeds to the shareholder, the shareholder will be given notice
that the value of the shares in his or her account is less than the minimum
amount and will be allowed 60 days to make an additional investment in the
Portfolio in an amount that will increase the value of the account to at least
the minimum initial purchase amount.

See "Purchase and Redemption of Shares" in the Statement of Additional
Information for examples of when the right of redemption may be suspended.

SYSTEMATIC WITHDRAWAL PLAN
(SWP) (CLASS B SHARES ONLY)

The Portfolios offer a Systematic Withdrawal Plan which may be utilized by Class
B shareholders who wish to receive regular distributions from their account.
Upon commencement of the SWP, the account must have a current value of $10,000
or more. Class B shareholders may elect to receive automatic payments via check
or ACH of $50 or more on a monthly, quarterly, semi-annual or annual basis. An
Account Application Form may be obtained by calling 1-800-545-6331.

Shareholders should realize that if withdrawals exceed income dividends, their
invested principal in the account will be depleted. Thus, depending on the
frequency and amounts of the withdrawal payments and/or any fluctuations in the
net asset value per share, their original investment could be exhausted
entirely. To participate in the SWP, shareholders must have their dividends
automatically reinvested. Shareholders may change or cancel the SWP at any time,
upon written notice to the Transfer Agent. It is generally not in the best
interest of shareholders in the SWP to acquire additional shares if they would
have to pay a sales load in connection with such purchases.

PERFORMANCE

From time to time the Prime Obligation Portfolio may advertise its "current
yield" and "effective compound yield." Both yield figures are based on
historical earnings and are not intended to indicate future performance. No
representation can be made concerning actual future yields. The "current yield"
of the Portfolio refers to the income generated by an investment in a Portfolio
over a stated seven-day period (which period will be stated in the
advertisement). This income is then "annualized." That is, the amount of income
generated by the investment during that week is assumed to be generated each
week over a 52-week period and is shown as a percentage of the investment. The
"effective yield" (also called "effective compound yield") is calculated
similarly but, when annualized, the income earned by an investment in a
Portfolio is assumed to be reinvested. The "effective yield" will be slightly
higher than the "current yield" because of the compounding effect of this
assumed reinvestment.

From time to time, the Growth, Intermediate-Term Income, Michigan and Value
Portfolios may also advertise yield and total return. These figures will be
based on historical earnings and are not intended to indicate future
performance. No representation can be made concerning actual future yields or
returns. The yield of a Portfolio refers to the income generated by a
hypothetical investment, net of any sales charge in the case of some of the
Class B shares, in a Portfolio over a specified thirty day period. This income
is then "annualized," i.e., the income over thirty days is assumed to be
generated over one year and is shown as a percentage of the investment.

The total return of a Portfolio refers to the average compounded rate of return
on a hypothetical investment, net of any sales charge, for designated time
periods, assuming that the entire investment is redeemed at the end of each
period and assuming the reinvestment of all dividend and capital gain
distributions.
<PAGE>
23

The performance on Class A shares will normally be higher than that on Class B
shares because of the distribution expenses charged to the Class B shares.

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

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

PERFORMANCE INFORMATION FOR PREDECESSOR COMMON TRUST FUNDS

The Michigan Portfolio is a successor to the [ ] (the "Michigan
Fund") managed by [ ]. The Value Portfolio is a successor to the
[ ] (the " Value Fund") managed by [Systematic]. A substantial
portion of the assets of the Michigan Fund and the Value Fund (together, the
"Funds") was transferred to the Michigan Portfolio and the Value Portfolio,
respectively, in connection with each Portfolio's commencement of operations.
Set forth below is certain performance data for the Funds, which is deemed
relevant because each respective Fund was managed using virtually the same
investment objective, policies and restrictions as those used by the Michigan
Portfolio and the Value Portfolio. The performance data, however, is not
necessarily indicative of the future performance of the Michigan Portfolio or
the Value Portfolio. Further, the predecessor Funds were not subject to certain
investment limitations and restrictions imposed by the 1940 Act and the Code,
which, if applicable, may have adversely affected the performance results of the
Fund.

The predecessor Funds did not incur expenses that correspond to the advisory,
administrative, and other fees to which the Michigan Portfolio and the Value
Portfolio are subject. Accordingly, the following performance information has
been adjusted by applying the total expense ratio and sales charges for each
class of the Michigan Portfolio and the Value Portfolio, as disclosed under
"Expense Summary" above, which reduced the actual performance of the Funds.

The data set forth below under the heading "Return With Sales Charge" is
adjusted to reflect the total operating expenses applicable to each class, and,
with respect to Class B shares, to take into account a maximum 4.50% sales
charge applicable to purchases of the Michigan Portfolio and a 5.75% sales
charge applicable to purchases of the Value Portfolio. The data set forth below
under the heading "Return Without Sales Charge" is not adjusted to take into
account such sales charge.
<PAGE>
24

TOTAL RETURNS FOR THE
COMMON TRUST FUNDS
AND
THE INDEX
FOR THE PERIOD ENDING
<TABLE>
<CAPTION>
RETURN WITH SALES SINCE
CHARGE 1 YEAR 5 YEARS 10 YEARS INCEPTION(1)
- -------------------- --------- --------- --------- -----------
<S> <C> <C> <C> <C>
[ ]
Common Trust Fund
Class A (0.00%)
Class B (4.50%)
[ ]
Common Trust Fund
Class A (0.00%)
Class B (5.75%)
Index

RETURN WITHOUT SALES
CHARGE
- --------------------
<S> <C> <C> <C> <C>
[ ]
Common Trust Fund
Class A
Class B
[ ]
Common Trust Fund
Class A
Class B
</TABLE>

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

(1) Commenced Operations on [date].

The past performance of the Funds is no guarantee of the future performance of
the Portfolios. Additional performance information regarding the Michigan
Portfolio and the Value Portfolio will be set forth in the Trust's Annual Report
to Shareholders, which, when available, may be obtained on request and without
charge by calling [number].

TAXES

The following summary of federal income tax consequences is based on current tax
laws and regulations, which may be changed by legislative, judicial or
administrative action. No attempt has been made to present a detailed
explanation of the federal, state or local income tax treatment of a Portfolio
or its shareholders. Accordingly, shareholders are urged to consult their tax
advisers regarding specific questions as to federal, state and local income
taxes.

TAX STATUS OF THE PORTFOLIO

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

TAX STATUS OF DISTRIBUTIONS

Each Portfolio will distribute all of its net investment income (including, for
this purpose, net short-term capital gain) to shareholders. Dividends from net
investment income will be taxable to shareholders as ordinary income whether
received in cash or in additional shares. Any net capital gain will be
distributed at least annually and will be taxed to shareholders as long-term
capital gain, regardless of how long the shareholders have held their shares.
Corporate shareholders should note that distributions of the Intermediate-Term,
Michigan Tax Free and Prime Obligation Portfolios are not expected to qualify
for the dividends-received deduction that is generally available to corporate
taxpayers. Dividends paid by the Growth and Value Portfolios to corporate
shareholders are expected to qualify for this deduction to the extent these
Portfolios' dividends derive from dividends the Portfolios received from
domestic corporations. The full amount of these dividends, however, may be
subject to the federal alternative minimum tax. Distributions of net capital
gain will not qualify for this deduction. Each Portfolio will make annual
reports to shareholders of the federal income tax status of all distributions.

Interest received on U.S. Treasury obligations is exempt from income tax at the
state level when received directly and may be exempt, depending on the state,
when received by a shareholder from a Portfolio provided certain conditions are
satisfied. Interest received on repurchase agreements collateralized by U.S.
Treasury obligations normally is not exempt from state taxation. Each Portfolio
will inform shareholders annually of the percentage of income and distributions
derived from U.S. Treasury obligations. Shareholders should consult their tax
<PAGE>
25

advisers to determine whether any portion of the income dividends received from
a Portfolio is considered tax exempt in their particular states.

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

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

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

A sale, exchange or redemption of Portfolio shares is a taxable event to the
shareholder.

Income derived by a Portfolio from obligations of foreign issuers may be subject
to foreign withholding taxes. No Portfolio will be able to elect to treat
shareholders as having paid their proportionate share of such foreign taxes.

ADDITIONAL CONSIDERATIONS FOR THE MICHIGAN
PORTFOLIO

The Michigan Portfolio will distribute all of its net investment income
(including net short-term capital gain) to its shareholders. If, at the close of
each quarter of its taxable year, at least 50% of the value of the Portfolio's
assets consist of obligations the interest on which is excludable from gross
income, the Portfolio may pay "exempt-interest dividends" to its shareholders.
Those dividends constitute the portion of the aggregate dividends as designated
by the Portfolio, equal to the excess of the excludable interest over certain
amounts disallowed as deductions. Exempt-interest dividends are excludable from
a shareholder's gross income for federal income tax purposes, but may have
alternative minimum tax and other collateral consequences. See the Statement of
Additional Information.

Current Federal law limits the types and volume of bonds qualifying for the
federal income tax exemption of interest, which may have an effect on the
ability of the Portfolio to purchase sufficient amounts of tax-exempt securities
to satisfy the Code's requirements for the payment of "exempt-interest
dividends."

Interest on indebtedness incurred or continued by a shareholder in order to
purchase or carry shares of the Michigan Portfolio is not deductible for federal
income tax purposes. Furthermore, the Portfolio may not be an appropriate
investment for persons (including corporations and other business entities) who
are "substantial users" (or persons related to "substantial users") of
facilities financed by industrial development private activity bonds. Such
persons should consult their tax advisers before purchasing shares. A
"substantial user" is defined generally to include "certain persons" who
regularly use in their trade or business a part of a facility financed from the
proceeds of such bonds.

MICHIGAN TAX CONSIDERATIONS

Under the laws of the State of Michigan, dividends paid by the Michigan
Portfolio representing interest payments on municipal obligations issued by the
State of Michigan or a political subdivision thereof (or interest on obligations
of United States territories or possessions to the extent exempt from taxation
by the states pursuant to federal law) will be exempt from Michigan income tax
(as will be the case with respect to such dividends from the Portfolio). Also,
that portion of a shareholder's shares in the Portfolio representing Municipal
Obligations issued by the State of Michigan or a political subdivision thereof
(or obligations of the United States territories or possessions to the extent
exempt from taxation by the states pursuant to federal law) and dividends paid
by the Portfolio representing interest payments on such obligations will be
exempt from Michigan intangibles tax. Accordingly, shareholders of the Portfolio
who are residents of the State of Michigan will not be subject to Michigan
income tax or
<PAGE>
26

intangibles tax on dividends paid by the Portfolio to the extent such dividends
are derived from interest on municipal obligations which would be tax-exempt if
directly received by such shareholder, whether such dividends are taken in cash
or reinvested in additional shares of the Portfolio. Also, shareholders of the
Portfolio who are residents of the State of Michigan will not be subject to
Michigan intangibles tax on that portion of their shares in the Portfolio
attributable to municipal obligations which would be tax-exempt if directly
owned by such shareholder. The Intangible Tax is being phased out, with
reductions of twenty-five percent (25%) in 1994 and 1995, fifty percent (50%) in
1996, and seventy-five percent (75%) in 1997, with total repeal effective
January 1, 1998. Under the laws of the State of Michigan, corporations,
partnerships and other entities doing business in Michigan pay the Single
Business Tax. All dividend and interest income, other than interest from
municipal obligations issued other than by the State of Michigan or its
political subdivisions, is excluded from the Single Business Tax base. Thus,
dividends from the Portfolio derived from interest on municipal obligations
issued by the State of Michigan or a political subdivision thereof (or
obligations of the United States territories or possessions to the extent exempt
from taxation by the states pursuant to federal law) will be exempt from the
Michigan Single Business Tax.

Certain municipalities in Michigan also impose an income tax on individuals and
corporations. However, to the extent that the dividends from the Portfolio are
exempt from federal income taxes or relate to certain U.S. obligations, such
dividends also will be exempt from Michigan municipal income taxes.

OTHER STATE AND LOCAL TAXES

Income from the Michigan Portfolio is not necessarily free from state income
taxes in states other than Michigan or from personal property taxes. State laws
differ on this issue, and shareholders are urged to consult their own tax
advisers regarding the status of their accounts under state and local tax laws.

Additional information concerning taxes is set forth in the Statement of
Additional Information.

GENERAL INFORMATION

THE TRUST

The Trust is an open-end management investment company that has diversified and
non-diversified portfolios. The Trust is organized as a Massachusetts business
trust under a Declaration of Trust dated July 24, 1992. The Declaration of Trust
permits the Trust to offer separate portfolios of shares and different classes
of shares within each portfolio.

All consideration received by the Trust for shares of a Portfolio and all assets
of such Portfolio belong to the Portfolio and are subject to liabilities related
thereto.

The Trust pays its expenses, including fees of its service providers, audit and
legal expenses, expenses of preparing prospectuses, proxy solicitation material
and reports to shareholders, costs of custodial services and registering the
shares under federal and state securities laws, pricing, insurance expenses,
litigation and other extraordinary expenses, brokerage costs, interest charges,
taxes and organization expenses.

Please refer to "Financial Highlights" in this Prospectus for more information
regarding the Trust's expenses.

TRUSTEES OF THE TRUST

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

VOTING RIGHTS

Each share held entitles the shareholder of record to one vote. Each portfolio
or class will vote separately on matters relating solely to that portfolio or
class. As a Massachusetts business trust, the Trust is not required to hold
annual meetings of shareholders but approval will be sought for certain changes
in the operation of the Trust and for the election of Trustees under certain
circumstances. In addition, a Trustee may be removed by the remaining Trustees
or by shareholders at a special meeting called upon written request of
shareholders
<PAGE>
27

owning at least 10% of the outstanding shares of the Trust. In the event that
such a meeting is requested, the Trust will provide appropriate assistance and
information to the shareholders requesting the meeting.

REPORTING

The Trust issues unaudited financial information semiannually and audited
financial statements annually. The Trust furnishes proxy statements and other
reports to shareholders of record.

SHAREHOLDER INQUIRIES

Shareholder inquiries should be directed to The Golden Oak Family of Funds, c/o
The Arbor Trust, P.O. Box 419947, Kansas City, Missouri 64141-6947 or by calling
1-800-545-6331. Purchase, redemption and exchange transactions should be made
through the Transfer Agent by calling 1-800-808-4920.

DIVIDENDS

Substantially all of the net investment income (exclusive of capital gains) of
the Intermediate-Term Income, Michigan and Prime Obligation Portfolios is
declared daily and distributed monthly to shareholders in the form of periodic
dividends on the first Business Day of each month to shareholders of record for
such dividend. The net investment income (exclusive of capital gains) of the
Growth Portfolio is declared monthly and distributed monthly to shareholders in
the form of dividends on the first Business Day of each month to shareholders of
record for such dividend. The net investment income (exclusive of capital gains)
of the Value Portfolio is declared and distributed annually. Currently, capital
gains of a Portfolio, if any, will be distributed at least annually.
Shareholders are eligible to begin earning dividends that are declared on the
day after the purchase order is effective and continue to be eligible for
dividends through and including the day before the redemption order is
effective.

Shareholders automatically receive all income dividends and capital gain
distributions in additional shares at the net asset value next determined
following the record date, unless the shareholder has elected to take such
payment in cash. Shareholders may change their election by providing written
notice to the Transfer Agent at least 15 days prior to the distribution.

Dividends and distributions of the Growth, Intermediate-Term Income, Michigan
and Value Portfolios are paid on a per-share basis. The value of each share will
be reduced by the amount of the payment. If shares are purchased shortly before
the record date for a dividend or the distribution of capital gains, a
shareholder will pay the full price for the shares and receive some portion of
the price back as a taxable dividend or distribution. The amount of dividends
payable on Class A shares will be more than the dividends payable on the Class B
shares because of the distribution expenses charged to Class B shares.

COUNSEL AND INDEPENDENT ACCOUNTANTS

Morgan, Lewis & Bockius LLP serves as counsel to the Trust. Miller, Canfield,
Paddock and Stone, P.L.C. serves as counsel to the Trust with respect to
Michigan state issues. Price Waterhouse LLP serves as the independent
accountants of the Trust.

CUSTODIAN

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

DESCRIPTION OF PERMITTED INVESTMENTS

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

AMERICAN DEPOSITARY RECEIPTS ("ADRs") -- ADRs are securities, typically issued
by a U.S. financial institution (a "depositary"), that evidence ownership
interests in a security or a pool of securities issued by a foreign issuer and
deposited with the depositary. ADRs may be available through "sponsored" or
"unsponsored" facilities. A sponsored facility is established jointly by the
issuer of the security underlying the receipt and a depositary, whereas an
unsponsored facility may be established by a depositary without participation by
the issuer of the underlying security. Holders of unsponsored depositary
receipts generally bear all the costs of the unsponsored facility. The
depositary of an unsponsored facility frequently is under no
<PAGE>
28

obligation to distribute shareholder communications received from the issuer of
the deposited security or to pass through, to the holders of the receipts,
voting rights with respect to the deposited securities.

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

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

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

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

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

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

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

EQUITY SECURITIES -- Investments in common stocks are subject to market risks
which may cause their prices to fluctuate over time. Changes in the value of
portfolio securities will not necessarily affect cash income derived from these
securities but will affect a Portfolio's net asset value.

FIXED INCOME SECURITIES -- Fixed income securities are debt obligations issued
by corporations, municipalities and other borrowers. The market value of fixed
income investments will change in response to interest rate changes and other
factors. During periods of falling interest rates, the values of outstanding
fixed income securities generally rise. Conversely, during periods of rising
interest rates, the values of such securities generally decline. Moreover, while
securities with longer maturities tend to produce higher yields, the prices of
longer maturity securities are also subject to greater market fluctuations as a
result of changes in interest rates. Changes by recognized agencies in the
rating of any fixed income security and in the ability of an issuer to make
payments of interest and principal will also affect the value of these
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29

investments. Changes in the value of portfolio securities will not affect cash
income derived from these securities but will affect a Portfolio's net asset
value.

FORWARD FOREIGN CURRENCY CONTRACTS -- A forward contract involves an obligation
to purchase or sell a specific currency amount at a future date, agreed upon by
the parties, at a price set at the time of the contract. A Portfolio may also
enter into a contract to sell, for a fixed amount of U.S. dollars or other
appropriate currency, the amount of foreign currency approximating the value of
some or all of a Portfolio's securities denominated in such foreign currency.

At the maturity of a forward contract, a Portfolio 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 same maturity date, the same amount of the
foreign currency. A Portfolio may realize a gain or loss from currency
transactions.

FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS -- Futures contracts provide
for the future sale by one party and purchase by another party of a specified
amount of a specific security at a specified future time and at a specified
price. An option on a futures contract gives the purchaser the right, in
exchange for a premium, to assume a position in a futures contract at a
specified exercise price during the term of the option. A Portfolio may use
futures contracts and related options for BONA FIDE hedging purposes, to offset
unfavorable changes in the value of securities held or expected to be acquired
or be disposed of, to minimize fluctuations in foreign currencies, or to gain
exposure to a particular market or instrument. A Portfolio will minimize the
risk that it will be unable to close out a futures contract by only entering
into futures contracts which are traded on national futures exchanges.

Stock index futures are futures contracts for various stock indices that are
traded on registered securities exchanges. A stock index futures contract
obligates the seller to deliver (and the purchaser to take) an amount of cash
equal to a specific dollar amount times the difference between the value of a
specific stock index at the close of the last trading day of the contract and
the price at which the agreement is made.

There are risks associated with these activities, including the following: (1)
the success of a hedging strategy may depend on an ability to predict movements
in the prices of individual securities, fluctuations in markets and movements in
interest rates, (2) there may be an imperfect or no correlation between the
changes in market value of the securities held by a Portfolio and the prices of
futures and options on futures, (3) there may not be a liquid secondary market
for a futures contract or option, (4) trading restrictions or limitations may be
imposed by an exchange, and (5) government regulations may restrict trading in
futures contracts and futures options.

ILLIQUID SECURITIES -- Illiquid securities are securities that cannot be
disposed of within seven business days at approximately the value at which they
are being carried on a Portfolio's books. An illiquid security includes a demand
instrument with a demand notice period exceeding seven days, where there is no
secondary market for such security, and repurchase agreements with durations
over seven days in length.

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

GOVERNMENT PASS-THROUGH SECURITIES: These are securities that are issued or
guaranteed by a U.S. Government agency representing an interest in a pool of
mortgage loans. The primary issuers or guarantors of these mortgage-backed
securities are the Government National Mortgage Association
<PAGE>
30

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

PRIVATE PASS-THROUGH SECURITIES: These are mortgage-backed securities issued by
a non-governmental entity, such as a trust. These securities include
collateralized mortgage obligations ("CMOs") and real estate mortgage investment
conduits ("REMICs") that are rated in one of the top two rating categories.
While they are generally structured with one or more types of credit
enhancement, private pass-through securities typically lack a guarantee by an
entity having the credit status of a governmental agency or instrumentality.

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

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

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

REITS: REITs are trusts that invest primarily in commercial real estate or real
estate-related loans. The value of interests in REITs may be affected by the
value of the property owned or the quality of the mortgages held by the trust.

STRIPPED MORTGAGE-BACKED SECURITIES ("SMBS"): SMBs are usually structured with
two classes that receive specified proportions of the monthly interest and
principal payments from a pool of mortgage securities. One class may receive all
of the interest payments and is thus termed an interest-only class ("IO"), while
the other class may receive all of the principal payments and is thus termed the
principal-only class ("PO"). The value of IOs tends to increase as rates rise
and decrease as rates fall; the opposite is true of POs. SMBs are extremely
sensitive to changes in interest rates because of the
<PAGE>
31

impact thereon of prepayment of principal on the underlying mortgage securities.
The market for SMBs is not as fully developed as other markets; SMBs therefore
may be illiquid.

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

MUNICIPAL SECURITIES -- Municipal securities consist of (i) debt obligations
issued by or on behalf of public authorities to obtain funds to be used for
various public facilities, for refunding outstanding obligations, for general
operating expenses and for lending such funds to other public institutions and
facilities, and (ii) certain private activity and industrial development bonds
issued by or on behalf of public authorities to obtain funds to provide for the
construction, equipment, repair or improvement of privately operated facilities.

General obligation bonds are backed by the taxing power of the issuing
municipality. Revenue bonds are backed by the revenues of a project or facility
(tolls from a bridge, for example). Certificates of participation represent an
interest in an underlying obligation or commitment, such as an obligation issued
in connection with a leasing arrangement. The payment of principal and interest
on private activity and industrial development bonds generally is dependent
solely on the ability of a facility's user to meet its financial obligations and
the pledge, if any, of real and personal property as security for such payment.

Municipal securities include both municipal notes and municipal bonds. Municipal
notes include general obligation notes, tax anticipation notes, revenue
anticipation notes, bond anticipation notes, certificates of indebtedness,
demand notes and construction loan notes and participation interests in
municipal notes. Municipal bonds include general obligation bonds, revenue or
special obligation bonds, private activity and industrial development bonds and
participation interests in municipal bonds.

OPTIONS -- A put option gives the purchaser of the option the right to sell, and
the writer of the option the obligation to buy, the underlying security at the
exercise price at any time during the option period. A call option gives the
purchaser of the option the right to buy, and the writer of the option the
obligation to sell, the underlying security at the exercise price at any time
during the option period. The premium paid to the writer is the consideration
for undertaking the obligations under the option contract. The initial purchase
(sale) of an option contract is an "opening transaction." In order to close out
an option position, a Portfolio may enter into a "closing transaction," which is
simply the sale (purchase) of an option contract on the same security with the
same exercise price and expiration date as the option contract originally
opened.

A Portfolio may purchase put and call options to protect against a decline in
the market value of the securities in its portfolio or to protect against an
anticipated increase in the cost of securities that a Portfolio may seek to
purchase in the future. A Portfolio purchasing put and call options pays a
premium therefor. If price movements in the underlying securities are such that
exercise of the options would not be profitable for a Portfolio, loss of the
premium paid may be offset by an increase in the value of a Portfolio's
securities or by a decrease in the cost of acquisition of securities by a
Portfolio.

A Portfolio may write covered call options as a means of increasing the yield on
its portfolio and as a means of providing limited protection against decreases
in its market value. When a Portfolio sells an option, if the underlying
securities do not increase or decrease to a price level that would make the
exercise of the option profitable to the holder thereof, the option generally
will expire without being exercised and a Portfolio will realize as profit the
premium received for such option. When a call option of which a Portfolio is the
writer is exercised, a Portfolio will be required to sell the underlying
securities to the option holder at the strike price, and will not participate in
any increase in the price of such securities above the strike price. When a put
option of which a Portfolio is the writer
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32

is exercised, a Portfolio will be required to purchase the underlying securities
at the strike price, which may be in excess of the market value of such
securities.

A Portfolio may purchase and write options on an exchange or over-the-counter.
Over-the-counter options ("OTC options") differ from exchange-traded options in
several respects. They are transacted directly with dealers and not with a
clearing corporation, and therefore entail the risk of non-performance by the
dealer. OTC options are available for a greater variety of securities and for a
wider range of expiration dates and exercise prices than are available for
exchange-traded options. Because OTC options are not traded on an exchange,
pricing is done normally by reference to information from a market maker. It is
the position of the Securities and Exchange Commission that OTC options are
illiquid.

A Portfolio 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 its
exposure to exchange rates. Call options on foreign currency written by a
Portfolio will be "covered," which means that a Portfolio will own an equal
amount of the underlying foreign currency. With respect to put options on
foreign currency written by a Portfolio, a Portfolio will establish a segregated
account with its custodian bank consisting of liquid assets in an amount equal
to the amount a Portfolio would be required to pay upon exercise of the put.

A Portfolio may purchase and write put and call options on indices and enter
into related closing transactions. Put and call options on indices are similar
to options on securities except that options on an index give the holder the
right to receive, upon exercise of the option, an amount of cash if the closing
level of the underlying index is greater than (or less than, in the case of
puts) 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 multiplied by a specified number. Thus, unlike
options on individual securities, all settlements are in cash, and gain or loss
depends on price movements in the particular market represented by the index
generally, rather than the price movements in individual securities. A Portfolio
may choose to terminate an option position by entering into a closing
transaction. The ability of a Portfolio to enter into closing transactions
depends upon the existence of a liquid secondary market for such transactions.

All options written on indices must be covered. When a Portfolio writes an
option on an index, it will establish a segregated account containing liquid
assets with its custodian in an amount at least equal to the market value of the
option and will maintain the account while the option is open or will otherwise
cover the transaction.

RISK FACTORS. Risks associated with options transactions include: (1) the
success of a hedging strategy may depend on an ability to accurately predict
movements in the prices of individual securities, fluctuations in markets and
movements in interest rates; (2) there may be an imperfect correlation between
the movement in prices of options and the securities underlying them; (3) there
may not be a liquid secondary market for options; and (4) while a Portfolio will
receive a premium when it writes covered call options, it may not participate
fully in a rise in the market value of the underlying security.

RECEIPTS -- Receipts are sold as zero coupon securities which means that they
are sold at a substantial discount and redeemed at face value at their maturity
date without interim cash payments of interest or principal. This discount is
accreted over the life of the security, and such accretion will constitute the
income earned on the security for both accounting and tax purposes. Because of
these features, such securities may be subject to greater interest rate
volatility than interest paying investments.

REPURCHASE AGREEMENTS -- Repurchase agreements are arrangements by which a
Portfolio obtains a security and simultaneously commits to return the security
to the seller at an agreed upon price on an agreed upon date within a number of
days from the date of purchase. A Portfolio will have actual or constructive
possession of the security as collateral for the repurchase agreement.
Collateral must be maintained at a value at least equal to 102% of the purchase
price. A Portfolio bears a risk of loss in the event the other party defaults on
its obligations and a Portfolio is delayed or prevented from exercising its
right to dispose of the collateral securities or if a Portfolio realizes a loss
on the sale
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33

of the collateral. A Portfolio will enter into repurchase agreements on behalf
of a Portfolio only with financial institutions deemed to present minimal risk
of bankruptcy during the term of the agreement based on established guidelines.
Repurchase agreements are considered loans under the 1940 Act.

RESTRAINTS ON INVESTMENTS BY MONEY MARKET FUNDS -- Investments by a money market
fund are subject to limitations imposed under regulations adopted by the SEC.
Under these regulations, money market funds may only acquire obligations that
present minimal credit risks and that are "eligible securities," which means
they are (i) rated, at the time of investment, by at least two NRSROs (one if it
is the only organization rating such obligation) in the highest short-term
rating category or, if unrated, determined to be of comparable quality (a "first
tier security"), or (ii) rated according to the foregoing criteria in the second
highest rating category or, if unrated, determined to be of comparable quality
("second tier security"). In the case of taxable money market funds, investments
in second tier securities are subject to the further constraints in that (i) no
more than 5% of a Portfolio's assets may be invested in second tier securities
and (ii) any investment in securities of any one such issuer is limited to the
greater of 1% of the Portfolio's total assets or $1 million. A taxable money
market portfolio may hold more than 5% of its assets in first tier securities of
a single issuer for three Business Days.

RESTRICTED SECURITIES -- Restricted securities are securities that may not be
sold freely to the public absent registration under the Securities Act of 1933,
as amended, or an exemption from registration.

SECURITIES LENDING -- In order to generate additional income, a Portfolio may
lend securities which it owns pursuant to agreements requiring that the loan be
continuously secured by collateral consisting of cash, securities of the U.S.
Government or its agencies equal to at least 102% of the market value of the
securities lent. A Portfolio continues to receive interest on the securities
lent while simultaneously earning interest on the investment of cash collateral.
Collateral is marked to market daily. There may be risks of delay in recovery of
the securities or even loss of rights in the collateral should the borrower of
the securities fail financially or become insolvent.

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

SWAPS, CAPS, FLOORS AND COLLARS -- Interest rate swaps, mortgage swaps, currency
swaps and other types of swap agreements such as caps, floors and collars are
designed to permit the purchaser to preserve a return or spread on a particular
investment or portion of its portfolio, and to protect against any increase in
the price of securities a Portfolio anticipates purchasing at a later date. In a
typical interest rate swap, one party agrees to make regular payments equal to a
floating interest rate times a "notional principal amount," in return for
payments equal to a fixed rate times the same amount, for a specific period of
time. If a swap agreement provides for payment in different currencies, the
parties might agree to exchange the notional principal amount as well. Swaps may
also depend on other prices or rates, such as the value of an index or mortgage
prepayment rates.
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34

In a typical cap or floor agreement, one party agrees to make payments only
under specified circumstances, usually in return for payment of a fee by the
other party. For example, the buyer of an interest rate cap obtains the right to
receive payments to the extent that a specific interest rate exceeds an
agreed-upon level, while the seller of an interest rate floor is obligated to
make payments to the extent that a specified interest rate falls below an
agreed-upon level. An interest rate collar combines elements of buying a cap and
selling a floor.

Swap agreements are sophisticated hedging instruments that typically involve a
small investment of cash relative to the magnitude of risk assumed. As a result,
swaps can be highly volatile and have a considerable impact on a Portfolio's
performance. Swap agreements are subject to risks related to the counterparty's
ability to perform, and may decline in value if the counterparty's
creditworthiness deteriorates. A Portfolio may also suffer losses if it is
unable to terminate outstanding swap agreements or reduce its exposure through
offsetting transactions. Any obligation a Portfolio may have under these types
of arrangements will be covered by setting aside liquid high grade securities in
a segregated account. A Portfolio will enter into swaps only with counterparties
believed to be creditworthy.

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

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

U.S. TREASURY OBLIGATIONS -- U.S. Treasury obligations consist of bills, notes
and bonds issued by the U.S. Treasury and separately traded interest and
principal component parts of such obligations that are transferable through the
Federal book-entry Principal Securities ("STRIPS"). The Prime Obligation
Portfolio may not actively trade STRIPs and may not invest more than 20% of its
assets in STRIPs.

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

WARRANTS -- Warrants are instruments giving holders the right, but not the
obligation, to buy equity or fixed income securities of a company at a given
price during a specified period.

WHEN-ISSUED AND DELAYED DELIVERY SECURITIES -- When-issued or delayed delivery
basis transactions involve the purchase of an instrument with payment and
delivery taking place in the future. Delivery of and payment for these
securities may occur a month or more after the date of the purchase commitment.
A Portfolio will maintain with the Custodian a separate account with liquid
assets in an amount at least equal to these commitments. The interest rate
realized on these securities is fixed as of the purchase date and no interest
accrues to a Portfolio before settlement.
<PAGE>
35

These securities are subject to market fluctuation due to changes in market
interest rates and it is possible that the market value at the time of
settlement could be higher or lower than the purchase price if the general level
of interest rates has changed. Although a Portfolio generally purchases
securities on a when-issued or forward commitment basis with the intention of
actually acquiring securities for its portfolio, a Portfolio may dispose of a
when-issued security or forward commitment prior to settlement if it deems
appropriate.

ZERO COUPON, PAY-IN-KIND AND DEFERRED PAYMENT SECURITIES -- Zero coupon
securities are securities that are sold at a discount to par value and
securities on which interest payments are not made during the life of the
security. Upon maturity, the holder is entitled to receive the par value of the
security. While interest payments are not made on such securities, holders of
such securities are deemed to have received "phantom income" annually. Because a
Portfolio will distribute its "phantom income" to shareholders, to the extent
that shareholders elect to receive dividends in cash rather than reinvesting
such dividends in additional shares, a Portfolio will have fewer assets with
which to purchase income producing securities. Alternatively, shareholders may
have to redeem shares to pay tax on this "phantom income." In either case, a
Portfolio may have to dispose of its fund securities under disadvantageous
circumstances to generate cash, or may have to leverage itself by borrowing cash
to satisfy distribution requirements. A Portfolio accrues income with respect to
the securities prior to the receipt of cash payments. Pay-in-kind securities are
securities that have interest payable by delivery of additional securities. Upon
maturity, the holder is entitled to receive the aggregate par value of the
securities. Deferred payment securities are securities that remain zero coupon
securities until a predetermined date, at which time the stated coupon rate
becomes effective and interest becomes payable at regular intervals. Zero
coupon, pay-in-kind and deferred payment securities may be subject to greater
fluctuation in value and lesser liquidity in the event of adverse market
conditions than comparably rated securities paying cash interest at regular
interest payment periods.
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36

TABLE OF CONTENTS
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<TABLE>
<S> <C>
SUMMARY...................................... 2
EXPENSE SUMMARY.............................. 4
FINANCIAL HIGHLIGHTS......................... 8
THE PORTFOLIO AND THE TRUST.................. 9
INVESTMENT OBJECTIVES AND POLICIES........... 9
INVESTMENT LIMITATIONS AND FUNDAMENTAL
POLICIES................................... 13
THE ADVISER.................................. 14
THE SUB-ADVISERS............................. 15
THE ADMINISTRATOR............................ 16

THE TRANSFER AGENT........................... 16
THE DISTRIBUTOR.............................. 16
HOW TO PURCHASE SHARES....................... 17
HOW TO EXCHANGE SHARES....................... 20
HOW TO REDEEM SHARES......................... 20
PERFORMANCE.................................. 22
TAXES........................................ 24
GENERAL INFORMATION.......................... 26
DESCRIPTION OF PERMITTED INVESTMENTS......... 27
</TABLE>