<PAGE>
REMBRANDT FUNDS (R)
APRIL 30, 1996
- --------------------------------------------------------------------------------
Equity Funds Fixed Income Funds
. VALUE FUND . FIXED INCOME FUND
. GROWTH FUND . INTERMEDIATE GOVERNMENT FIXED INCOME FUND
. SMALL CAP FUND . TAX-EXEMPT FIXED INCOME FUND
. INTERNATIONAL EQUITY FUND . GLOBAL FIXED INCOME FUND
. TRANSEUROPE FUND . LIMITED VOLATILITY FIXED INCOME FUND
. ASIAN TIGERS FUND Money Market Funds
. LATIN AMERICA EQUITY FUND . TREASURY MONEY MARKET FUND
. GOVERNMENT MONEY MARKET FUND
Balanced Fund . MONEY MARKET FUND
. BALANCED FUND . TAX-EXEMPT MONEY MARKET FUND
- --------------------------------------------------------------------------------
Please read this Prospectus carefully before investing, and keep it on file for
future reference. It concisely sets forth information that can help you decide
if a Fund's investment goals match your own.
A Statement of Additional Information dated April 30, 1996 has been filed with
the Securities and Exchange Commission (the "SEC") and is available upon
request and without charge by calling 1-800-443-4725. The Statement of
Additional Information is incorporated into this Prospectus by reference.
Trust Class shares of the Rembrandt Funds(R) (the "Trust") are offered
primarily to customers of LaSalle National Trust, N.A., its affiliates and
correspondents, for the investment of their own funds or funds for which they
act in a fiduciary, agency or custodial capacity.
Investor Class shares are offered primarily to individuals and institutional
investors that meet the minimum investment requirement but for whom LaSalle
National Trust, N.A. does not act in a fiduciary, agency or custodial capacity.
Investors in the Trust Class shares and investors in the Investor Class shares
are referred to hereinafter as "Shareholders."
AN INVESTMENT IN ANY OF THE TRUST'S MONEY MARKET FUNDS IS NEITHER INSURED NOR
GUARANTEED BY THE U.S. GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT ANY MONEY
MARKET FUND WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER
SHARE.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
THE TRUST'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, INCLUDING LASALLE NATIONAL TRUST, N.A., OR
ANY OF ITS AFFILIATES OR CORRESPONDENTS, INCLUDING LASALLE NATIONAL
CORPORATION. THE TRUST'S SHARES ARE NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR
ANY OTHER GOVERNMENT AGENCY. INVESTMENT IN THE SHARES INVOLVES RISK,
INCLUDING POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
- --------------------------------------------------------------------------------
<PAGE>
......................................
TABLE OF
CONTENTS
<TABLE>
<S> <C>
Fund Highlights................ 2
Annual Operating Expenses...... 5
Financial Highlights........... 9
Your Account and Doing Business
with Us....................... 14
Investment Objective and
Policies...................... 20
General Investment Policies.... 31
Certain Risk Factors........... 33
Investment Limitations......... 34
The Advisor.................... 35
The Sub Advisor................ 37
The Administrator.............. 37
The Transfer Agent............. 38
The Distributor................ 38
Performance.................... 39
Taxes.......................... 40
Additional Information
About Doing Business with Us.. 43
General Information............ 44
Description of Permitted
Investments and Risk Factors.. 47
</TABLE>
......................................
HOW TO READ THIS PROSPECTUS ____________________________________________________
This Prospectus gives you information that you should know about the Funds
before investing. Brief descriptions are also provided throughout the
Prospectus to better explain certain key points. To find these helpful guides,
look for this symbol. [SYMBOL APPEARS HERE]
FUND HIGHLIGHTS ________________________________________________________________
The following summary provides basic information about the Trust Class and
Investor Class shares of the following Funds: Value Fund, Growth Fund, Small Cap
Fund, International Equity Fund, TransEurope Fund, Asian Tigers Fund, Latin
America Equity Fund (collectively, the "Equity Funds"), Balanced Fund ("Balanced
Fund"), Fixed Income Fund, Intermediate Government Fixed Income Fund, Tax-Exempt
Fixed Income Fund, Global Fixed Income Fund, Limited Volatility Fixed Income
Fund (collectively, the "Fixed Income Funds"), Treasury Money Market Fund,
Government Money Market Fund, Money Market Fund and Tax-Exempt Money Market Fund
(collectively, the "Money Market Funds," and together with the Equity Funds, the
Balanced Fund and the Fixed Income Funds, the "Funds"). This summary is
qualified in its entirety by reference to the more detailed information provided
elsewhere in this Prospectus and in the Statement of Additional Information.
INVESTMENT OBJECTIVE Below are the investment objectives and, some basic
AND POLICIES investment policies of each Fund. For more information,
see "Investment Objectives and Policies," "General
Investment Policies" and "Description of Permitted
Investments and Risk Factors."
EQUITY AND The Growth Fund and Small Cap Fund both seek a high level
BALANCED FUNDS of total return primarily through capital appreciation.
The Value Fund, International Equity Fund and TransEurope
Fund all seek a high level of total return through
capital appreciation and current income. The TransEurope
Fund currently is not offering its shares to the public.
The Asian Tigers Fund seeks to achieve capital
appreciation through investments within the economies of
the Far East, with the exception of Japan.
The Latin America Equity Fund seeks long-term
capital appreciation.
The Balanced Fund seeks to obtain a favorable total
rate of return through current income and capital
appreciation consistent with the preservation of capital,
derived from investing in a portfolio comprised of fixed
income and equity securities.
2
<PAGE>
FIXED INCOME The Fixed Income Fund (formerly the Taxable Fixed Income
FUNDS Fund) seeks a high level of total return relative to funds
with like investment objectives from income and, to a lesser
degree, capital appreciation derived from investing in a
portfolio consisting primarily of quality intermediate- and
long-term fixed income securities.
The Intermediate Government Fixed Income Fund (formerly
the Short/Intermediate Government Fixed Income Fund) seeks a
high level of total return relative to funds with like
investment objectives, consistent with preservation of
capital, from income and, to a lesser degree, capital
appreciation, derived from investing in a portfolio
consisting of primarily short- and intermediate-term U.S.
Government securities.
The Tax-Exempt Fixed Income Fund seeks a high level of
total return, relative to funds with like investment
objectives, consistent with preservation of capital, from
income derived from investing in a portfolio consisting
primarily of securities that are exempt from federal income
tax and not subject to taxation as a preference item for
purposes of the federal alternative minimum tax.
The Global Fixed Income Fund seeks a high level of total
return, relative to funds with like objectives, measured in
U.S. dollar terms, from income and capital appreciation
derived from investing in a portfolio consisting of quality
fixed income securities denominated in foreign currencies.
The Limited Volatility Fixed Income Fund seeks a high
level of current income, consistent with relative stability
of principal, derived from investing in a portfolio
consisting primarily of short- and intermediate-term fixed
income securities. The Limited Volatility Fund currently is
not offering its shares to the public.
MONEY MARKET The Treasury Money Market Fund seeks to preserve principal
FUNDS value and maintain a high degree of liquidity while
providing current income.
The Government Money Market Fund and the Money Market
Fund seek to provide as high a level of current income as is
consistent with preservation of capital and liquidity.
The Tax-Exempt Money Market Fund seeks to preserve
principal value and maintain a high degree of liquidity
while providing current income exempt from federal income
taxes.
UNDERSTANDING Each Fund invests in different securities. Values of equity
RISK securities may be affected by the financial markets as well
as by developments impacting specific issuers. Values of
fixed income securities tend to vary inversely with interest
rates and may be affected by other market and economic
factors as well. The International Equity, TransEurope,
Asian Tigers, Global Fixed Income, and Latin America Equity
Funds will, and certain other Funds may, invest in
securities of foreign issuers. Securities of foreign issuers
are subject to certain risks not typically associated with
domestic securities, including, among other risks, changes
in currency rates and in exchange control regulations, costs
in connection with conversions between various currencies,
limited publicly available information regarding foreign
issuers, lack of uniformity in accounting, auditing and
financial standards and
3
<PAGE>
requirements, greater securities market volatility, less
liquidity of securities, less government supervision and
regulation of securities markets, withholding taxes and
changes in taxes on income on securities, and possible
seizure, nationalization or expropriation of the foreign
issuer or foreign deposits. Investments in certain Latin
American countries also may involve additional risks of
political instability, high inflation rates, and limited
trading markets. See "General Investment Policies," "Risk
Factors" and "Description of Permitted Investments and Risk
Factors" in this prospectus, and the Statement of Additional
Information.
MANAGEMENT LaSalle Street Capital Management, Ltd. (the "Advisor")
PROFILE serves as the Advisor to the Funds. ABN AMRO-NSM
International Funds Management B.V. (the "Sub-Advisor")
serves as the investment sub-advisor to the International
Equity Fund, TransEurope Fund, Asian Tigers Fund, Latin
America Equity Fund and Global Fixed Income Fund. SEI
Financial Management Corporation (the "Administrator")
serves as the Administrator and shareholder servicing agent
of the Trust. DST Systems, Inc. ("DST") serves as transfer
agent ("Transfer Agent") and dividend disbursing agent for
the Trust. Rembrandt(R) Financial Services Company, an
affiliate of the Administrator (the "Distributor"), serves
as distributor of the Trust's shares. See "The Advisor,"
"The Sub-Advisor," "The Administrator" and "The
Distributor."
YOUR ACCOUNT You may open an Investor Class account with a minimum amount
AND DOING of $2,000 per Fund and make additional investments with as
BUSINESS WITH little as $100. A Trust Class account may be opened by
US contacting LaSalle National Trust, N.A., its affiliates and
correspondents. Redemptions of a Fund's shares are made at
net asset value per share. See "Your Account and Doing
Business With Us."
DIVIDENDS Substantially all of the net investment income (exclusive of
capital gains) of each of the Equity, Balanced and Fixed
Income Funds is distributed in the form of periodic
dividends. Substantially all of the net investment income
(exclusive of capital gains) of each of the Money Market
Funds is distributed in the form of daily dividends. Any
capital gain is distributed at least annually. Distributions
are paid in additional shares unless the shareholder elects
to take the payment in cash. See "General Information--
Dividends."
INFORMATION/ For more information, call 1-800-443-4725.
SERVICE
CONTACTS
4
<PAGE>
PORTFOLIO EXPENSES _____________________________________________________________
The purpose of the following table is to help you understand the various cost
and expenses that you, as a shareholder, will bear directly or indirectly in
connection with an investment in TRUST CLASS SHARES.
ANNUAL OPERATING EXPENSES (As a percentage of average net assets) TRUST CLASS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY/BALANCED FUNDS
---------------------
SMALL INT'L TRANS ASIAN LATIN AMERICA
VALUE GROWTH CAP EQUITY EUROPE TIGERS EQUITY BALANCED
----- ------ ----- ------ ------ ------ ------------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Advisory Fees (after fee
waivers, if applicable) .80% .80% .80% 1.00% 1.00% 1.00% 1.00% .70%
Other Expenses (after
fee waivers, if
applicable)(1)(2) .25% .22% .30% .38% .52% .52% .80% .22%
- ------------------------------------------------------------------------------------------
Total Operating Expenses
(after fee waivers, if
applicable)(3) 1.05% 1.02% 1.10% 1.38% 1.52% 1.52% 1.80% .92%
- ------------------------------------------------------------------------------------------
</TABLE>
(1) The Administrator is waiving, on a voluntary basis, a portion of its fee
from the Asian Tigers Fund. The Administrator reserves the right to
terminate its waiver at any time in its sole discretion. Absent such
waivers, Other Expenses for the Asian Tigers Fund would be 60%. See "The
Administrator."
(2) "Other Expenses" for the TransEurope and Latin America Equity Funds are
based on estimated amounts for the current fiscal year.
(3) Absent the voluntary waivers described above, Total Operating Expenses for
the Asian Tigers Fund would be 1.60%.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIXED INCOME FUNDS
------------------
INTERMEDIATE LIMITED
GOVERNMENT TAX-EXEMPT GLOBAL VOLATILITY
FIXED INCOME FIXED INCOME FIXED INCOME FIXED INCOME FIXED INCOME
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Advisory Fees
(after fee waivers, if
applicable)(1) .51% .51% .48% .80% .50%
Other Expenses (after
fee waivers, if
applicable)(2)(3) .23% .22% .27% .30% .24%
- ------------------------------------------------------------------------------------------
Total Operating Expenses
(after fee waivers, if
applicable)(4) .74% .73% .75% 1.10% .74%
- ------------------------------------------------------------------------------------------
</TABLE>
(1) The Advisor is waiving, on a voluntary basis, a portion of its fee from
each Fixed Income Fund (except the Global Fixed Income Fund). The Advisor
reserves the right to terminate its waiver at any time in its sole
discretion. Absent such waivers, Advisory Fees for the other Funds would be
as follows: Fixed Income Fund--.60%, Intermediate Government Fixed Income
Fund--.60%, Tax-Exempt Fixed Income Fund--.60%, and Limited Volatility
Fixed Income Fund--.60%. See "The Advisor."
(2) The Administrator is waiving, on a voluntary basis, a portion of its fee
from the Fixed Income, Intermediate Government Fixed Income and Global
Fixed Income Funds. The Administrator reserves the right to terminate its
waiver at any time in its sole discretion. Absent such waiver, Other
Expenses would be as follows: Fixed Income Fund--.24%, Intermediate
Government Fixed Income Fund--.23% and Global Fixed Income Fund--.36%. See
"The Administrator."
(3) "Other Expenses" for the Limited Volatility Fixed Income Fund is based on
estimated amounts for the current fiscal year.
(4) Absent the voluntary waivers described above, Total Operating Expenses for
the Funds would be as follows: Fixed Income Fund--.84%, Intermediate
Government Fixed Income Fund--.83%, Tax-Exempt Fixed Income Fund--.87%,
Global Fixed Income Fund--1.16%, and Limited volatility Fixed Income Fund--
.84%.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY MARKET FUNDS
------------------
TREASURY GOVERNMENT TAX-EXEMPT
MONEY MONEY MONEY MONEY
MARKET MARKET MARKET MARKET
-------- ---------- ------ ----------
<S> <C> <C> <C> <C>
Advisory Fees (after fee waivers, if
applicable)(1) .20% .20% .21% .20%
Other Expenses (after fee waivers, if
applicable)(2) .24% .22% .20% .21%
- ----------------------------------------------------------------------------
Total Operating Expenses (after fee
waivers, if applicable)(3) .44% .42% .41% .41%
- ----------------------------------------------------------------------------
</TABLE>
(1) The Advisor is waiving, on a voluntary basis, a portion of its fee from
each Money Market Fund (except the Government Money Market Fund). The
Advisor reserves the right to terminate its waiver at any time in its sole
discretion. Absent such waivers Advisory Fees for the Funds would be as
follows: Treasury Money Market Fund--.35%, Money Market Fund--.35% and Tax-
Exempt Money Market Fund--.35%. Additional information may be found under
"The Advisor."
(2) The Administrator is waiving, on a voluntary basis, a portion of its fee
from the Money Market Fund. The Administrator reserves the right to
terminate its waiver at any time in its sole discretion. Absent such
waiver, Other Expenses for the Money Market Fund would be .21%. See "The
Administrator."
(3) Absent the voluntary waivers described above, Total Operating Expenses for
the Funds would be as follows: Treasury Money Market Fund--.59%, Money
Market Fund--.56% and Tax-Exempt Money Market Fund--.56%.
5
<PAGE>
EXAMPLE______________________________________________________________TRUST CLASS
- --------------------------------------------------------------------------------
<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:
Value Fund $11 $33 $58 $128
Growth Fund 10 32 56 125
Small Cap Fund 11 35 61 134
International Equity Fund 14 44 76 166
TransEurope Fund 15 48 -- --
Asian Tigers Fund 15 48 83 181
Latin America Equity Fund 18 57 -- --
Balanced Fund 9 29 51 113
Fixed Income Fund 8 24 41 92
Intermediate Government Fixed Income Fund 7 23 41 91
Tax-Exempt Fixed Income Fund 8 24 42 93
Global Fixed Income Fund 11 35 61 134
Limited Volatility Fixed Income Fund 8 24 -- --
Treasury Money Market Fund 5 14 25 55
Government Money Market Fund 4 13 24 53
Money Market Fund 4 13 23 52
Tax-Exempt Money Market Fund 4 13 23 52
- ----------------------------------------------------------------------------
</TABLE>
THE EXAMPLE IS BASED UPON TOTAL OPERATING EXPENSES, EXCEPT WITH RESPECT TO THE
TRANSEUROPE FUND, LIMITED VOLATILITY FIXED INCOME FUND AND LATIN AMERICA EQUITY
FUND, FOR WHICH IT IS BASED ON ESTIMATED EXPENSES, FOR THE CURRENT FISCAL YEAR.
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. The purpose
of this table is to assist the investor in understanding the various costs and
expenses that may be directly or indirectly borne by investors in the Trust
Class shares of the Funds. A person who purchases shares through a financial
institution may be charged separate fees by the financial institution. See "The
Advisor," "The Administrator" and "The Distributor."
6
<PAGE>
PORTFOLIO EXPENSES _____________________________________________________________
The purpose of the following table is to help you understand the various cost
and expenses that you, as a shareholder, will bear directly or indirectly in
connection with an investment in INVESTOR CLASS SHARES.
SHAREHOLDER TRANSACTION EXPENSES (As a percentage of offering price)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Maximum Sales Charge Imposed on Purchases. 4.50%
Redemption Fee(*) None
- -------------------------------------------------
</TABLE>
(*) A charge, currently $10.00, is imposed on wires of redemption proceeds.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ANNUAL OPERATING EXPENSES (As a percentage of av-
erage net assets) INVESTOR CLASS
- --------------------------------------------------------------------------------
<CAPTION>
EQUITY/BALANCED FUNDS
---------------------
SMALL INT'L TRANS ASIAN LATIN AMERICA
VALUE GROWTH CAP EQUITY EUROPE TIGERS EQUITY BALANCED
----- ------ ----- ------ ------ ------ ------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Advisory Fees (after fee
waivers, if applicable) .80% .80% .80% 1.00% 1.00% 1.00% 1.00% .70%
12b-1 Fees .25% .25% .25% .25% .25% .25% .25% .25%
Other Expenses (after
fee waivers, if
applicable)(1)(2) .25% .22% .30% .38% .52% .52% .80% .22%
- ----------------------------------------------------------------------------------------------
Total Operating Expenses
(after fee waivers, if
applicable)(3) 1.30% 1.27% 1.35% 1.63% 1.77% 1.77% 2.05% 1.17%
- ----------------------------------------------------------------------------------------------
</TABLE>
(1) The Administrator is waiving, on a voluntary basis, a portion of its fee
from the Asian Tigers Fund. The Administrator reserves the right to
terminate its waiver at any time in its sole discretion. Absent such
waiver, Other Expenses for the Asian Tigers Fund would be .60%. Additional
information may be found under "The Administrator."
(2) "Other Expenses" for the TransEurope and Latin America Equity Funds are
based on estimated amounts for the current fiscal year.
(3) Absent the voluntary waivers described above, Total Operating Expenses for
the Asian Tigers Fund would be 1.85%.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIXED INCOME FUNDS
------------------
INTERMEDIATE GLOBAL LIMITED
FIXED GOVERNMENT TAX-EXEMPT FIXED VOLATILITY
INCOME FIXED INCOME FIXED INCOME INCOME FIXED INCOME
------ ------------ ------------ ------ ------------
<S> <C> <C> <C> <C> <C>
Advisory Fees (after fee
waivers, if
applicable)(1) .51% .51% .48% .80% .50%
12b-1 Fees .25% .25% .25% .25% .25%
Other Expenses (after fee
waivers if
applicable)(2) .23% .22% .27% .30% .24%
- -------------------------------------------------------------------------------
Total Operating Expenses
(after fee waivers, if
applicable)(4) .99% .98% 1.00% 1.35% .99%
- -------------------------------------------------------------------------------
</TABLE>
(1) The Advisor is waiving on a voluntary basis a portion of its fee from each
Fixed Income Fund (except the Global Fixed Income Fund). The Advisor
reserves the right to terminate its waiver at any time in its sole
discretion. Absent such waiver, Advisory Fees for the Funds would be as
follows: Fixed Income Fund--.60%, Intermediate Government Fixed Income
Fund--.60%, Tax-Exempt Fixed Income Fund-- .60% and Limited Volatility
Fixed Income Fund-- .60%. See "The Advisor".
(2) The Administrator is waiving, on a voluntary basis, a portion of its fee
from the Fixed Income, Intermediate Government Fixed Income and Global
Fixed Income Funds. The Administrator reserves the right to terminate its
waiver at any time in its sole discretion. Absent such waiver, Other
Expenses would be as follows: Fixed Income Fund--.24%, Intermediate
Government Fixed Income Fund--.23% and Global Fixed Income Fund--.36%. See
"The Administrator."
(3) "Other Expenses" for the Limited Volatility Fixed Income Fund is based on
estimated amounts for the current fiscal year.
(4) Absent the voluntary waivers described above, Total Operating Expenses for
the Funds would be as follows: Fixed Income Fund--1.09%, Intermediate
Government Fixed Income Fund--1.08%, Tax-Exempt Fixed Income Fund--1.12%,
Global Fixed Income Fund--1.41% and Limited Volatility Fixed Income Fund--
1.09%.
7
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
MONEY MARKET FUNDS
------------------
TREASURY GOVERNMENT TAX-EXEMPT
MONEY MONEY MONEY MONEY
MARKET MARKET MARKET MARKET
-------- ---------- ------ ----------
<S> <C> <C> <C> <C>
Advisory Fees (after fee waivers, if
applicable)(1) .20% .20% .21% .20%
12b-1 Fees .25% .25% .25% .25%
Other Expenses (after fee waivers, if
applicable)(2) .24% .22% .20% .21%
- ----------------------------------------------------------------------------
Total Operating Expenses (after fee
waivers, if applicable)(3) .69% .67% .66% .66%
- ----------------------------------------------------------------------------
</TABLE>
(1) The Advisor has waived, on a voluntary basis, a portion of its fees from
each Fund (except the Government Money Market Fund). The Advisor reserves
the right to terminate its waiver at any time in its sole discretion.
Absent such waivers Advisory Fees would be as follows: Treasury Money
Market Fund--.35%, Money Market Fund--.35% and Tax-Exempt Money Market
Fund--.35%.
(2) The Administrator has waived, on a voluntary basis, a portion of its fee
from the Money Market Fund. The Administrator reserves the right to
terminate its waiver at any time in its sole discretion. Absent such
waivers, Other Expenses for the Money Market Fund would be .21%. See "The
Administrator."
(3) Absent the voluntary waivers described above, Total Operating Expenses for
the Funds would as follows: Treasury Money Market Fund--.84%, Money Market
Fund--.81% and Tax-Exempt Money Market Fund--.81%.
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 charge; (2) 5% annual return
and
(3) redemption at the end of each time period:
Value Fund $58 $84 $113 $195
Growth Fund 57 83 112 191
Small Cap Fund 58 86 116 200
International Equity Fund 61 94 130 230
TransEurope Fund 62 98 -- --
Asian Tigers Fund 62 98 137 244
Latin America Equity Fund 65 106 -- --
Balanced Fund 56 80 106 181
Fixed Income Fund 55 75 97 161
Intermediate Government Fixed Income Fund 55 75 97 160
Tax-Exempt Fixed Income Fund 55 75 98 162
Global Fixed Income Fund 58 86 116 200
Limited Volatility Fixed Income Fund 55 75 -- --
Treasury Money Market Fund 7 22 38 86
Government Money Market Fund 7 21 37 83
Money Market Fund 7 21 37 82
Tax-Exempt Money Market Fund 7 21 37 82
- ----------------------------------------------------------------------------
</TABLE>
THE EXAMPLE IS BASED ON TOTAL OPERATING EXPENSES, EXCEPT FOR THE TRANSEUROPE
FUND, LIMITED VOLATILITY FIXED INCOME FUND AND LATIN AMERICA EQUITY FUND, FOR
WHICH IT IS BASED ON ESTIMATED EXPENSES FOR THE CURRENT FISCAL YEAR. THE
EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES.
ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. The purpose of this
table is to assist the investor in understanding the various costs and expenses
that may be directly or indirectly borne by investors in the Investor Class
shares of the Funds. A person who purchases shares through a financial
institution may be charged separate fees by the financial institution. See "The
Advisor," "The Administrator" and "The Distributor."
The rules of the Securities and Exchange Commission require that the maximum
sales charge be reflected in the above table. However, certain investors may
qualify for reduced sales charges. See "Purchase of Shares," "Redemption of
Shares" and "Eligibility For Reduced Sales Charge."
Long-term Shareholders in the Investor Class shares of the Funds (other than
the Money Market Funds) may eventually pay more than the economic equivalent of
the maximum front-end sales charge otherwise permitted by the Rules of Fair
Practice of the National Association of Securities Dealers, Inc.
8
<PAGE>
FINANCIAL HIGHLIGHTS ___________________________________________________________
The following information has been audited by Ernst & Young LLP, the Trust's
independent auditors, as indicated in their report dated January 26, 1996 on
the Trust's financial statements as of December 31, 1995 included in the
Trust's Statement of Additional Information under "Financial Information." This
table should be read in conjunction with the Trust's financial statements and
related notes thereto. As of December 31, 1995, the TransEurope Fund, Limited
Volatility Fixed Income Fund and Latin America Equity Fund had not yet
commenced operations. Additional performance information is set forth in the
Trust's 1996 Annual Report to Shareholders and is available upon request and
without charge by calling 1-800-443-4725.
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
Ratio of Ratio of
Net Net Expenses
Realized Distri- Net Ratio of Investment to
Net Net and butions Asset Net Expenses Income/ Average
Asset Invest- Unrealized Dividends from Value Assets to (Loss) to Net
Value ment Gains from Net Realized End End of Average Average Assets
Beginning Income/ (Losses )on Investment Capital of Total Period Net Net (Excluding
of Period (Loss) Securities Income Gains Period Return (000) Assets Assets Waivers)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
VALUE FUND
----------
TRUST CLASS
Year Ended
12/31/95 $ 9.79 $ 0.34 $ 2.74 $(0.35) $(0.26) $12.26 32.02 % $131,243 1.05% 3.07 % 1.05%
12/31/94 $10.30 $ 0.35 $(0.35) $(0.34) $(0.17) $ 9.79 0.00 % $ 61,557 1.06% 3.45 % 1.06%
12/31/93(1) $10.00 $ 0.28 $ 0.38 $(0.28) $(0.08) $10.30 6.73 % $ 54,340 1.10% 2.85 % 1.10%
INVESTOR CLASS
Year Ended
12/31/95 $ 9.80 $ 0.32 $ 2.74 $(0.32) $(0.26) $12.28 31.72 %* $ 1,497 1.33% 2.79 % 1.33%
12/31/94 $10.30 $ 0.31 $(0.33) $(0.31) $(0.17) $ 9.80 (0.21)%* $ 731 1.37% 3.13 % 1.37%
12/31/93(2) $10.41 $ 0.21 $(0.03) $(0.21) $(0.08) $10.30 1.95 %* $ 435 1.48% 2.51 % 8.99%
GROWTH FUND
-----------
TRUST CLASS
Year Ended
12/31/95 $ 9.73 $ 0.16 $ 2.88 $(0.16) $(1.00) $11.61 31.60 % $ 78,216 1.02% 1.37 % 1.02%
12/31/94 $10.21 $ 0.16 $(0.36) $(0.16) $(0.12) $ 9.73 (2.05)% $ 82,710 1.02% 1.58 % 1.03%
12/31/93(1) $10.00 $ 0.17 $ 0.33 $(0.17) $(0.12) $10.21 5.07 % $ 98,581 1.06% 1.70 % 1.07%
INVESTOR CLASS
Year Ended
12/31/95 $ 9.74 $ 0.12 $ 2.89 $(0.13) $(1.00) $11.62 31.29 %* $ 2,681 1.31% 1.10 % 1.31%
12/31/94 $10.23 $ 0.13 $(0.37) $(0.13) $(0.12) $ 9.74 (2.42)%* $ 1,530 1.33% 1.30 % 1.33%
12/31/93(3) $10.44 $ 0.10 $(0.08) $(0.11) $(0.12) $10.23 (0.23)%* $ 840 1.43% 1.24 % 6.55%
SMALL CAP FUND
--------------
TRUST CLASS
Year Ended
12/31/95 $ 9.57 $ 0.02 $ 3.05 $(0.02) $(0.16) $12.46 32.13 % $ 23,844 1.10% 0.18 % 1.10%
12/31/94 $10.24 $ 0.03 $(0.67) $(0.03) $ 0.00 $ 9.57 (6.27)% $ 31,527 1.06% 0.27 % 1.06%
12/31/93(1) $10.00 $ 0.04 $ 0.24 $(0.04) $ 0.00 $10.24 2.82 % $ 53,357 1.09% 0.40 % 1.10%
INVESTOR CLASS
Year Ended
12/31/95 $ 9.58 $(0.01) $ 3.05 $ 0.00 $(0.16) $12.46 31.73 %* $ 553 1.39% (0.08)% 1.39%
12/31/94 $10.25 $ 0.00 $(0.67) $ 0.00 $ 0.00 $ 9.58 (6.54)%* $ 294 1.38% 0.02 % 1.38%
12/31/93(4) $ 9.51 $ 0.00 $ 0.75 $(0.01) $ 0.00 $10.25 10.55 %* $ 124 1.57% (0.10)% 33.84%
<CAPTION>
Ratio of
Net
Investment
Income/
(Loss) to
Average
Net Assets Portfolio
(Excluding Turnover
Waivers) Rate
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
VALUE FUND
----------
TRUST CLASS
Year Ended
12/31/95 3.07 % 37%
12/31/94 3.45 % 38%
12/31/93(1) 2.85 % 40%
INVESTOR CLASS
Year Ended
12/31/95 2.79 % 37%
12/31/94 3.13 % 38%
12/31/93(2) (5.00)% 40%
GROWTH FUND
-----------
TRUST CLASS
Year Ended
12/31/95 1.37 % 71%
12/31/94 1.57 % 68%
12/31/93(1) 1.69 % 82%
INVESTOR CLASS
Year Ended
12/31/95 1.10 % 71%
12/31/94 1.30 % 68%
12/31/93(3) (3.88)% 82%
SMALL CAP FUND
--------------
TRUST CLASS
Year Ended
12/31/95 0.18 % 142%
12/31/94 0.27 % 43%
12/31/93(1) 0.39 % 27%
INVESTOR CLASS
Year Ended
12/31/95 (0.08)% 142%
12/31/94 0.02 % 43%
12/31/93(4) (32.37)% 27%
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. Commenced operations on January 4, 1993. All ratios and total returns for
the period have been annualized.
2. Commenced operations on March 26, 1993. All ratios and total returns for the
period have been annualized.
3. Commenced operations on March 8, 1993. All ratios and total returns for the
period have been annualized.
4. Commenced operations on April 12, 1993. All ratios and total returns for the
period have been annualized.
* Sales load is not included in total return.
9
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED) _______________________________________________
<TABLE>
<CAPTION>
Net Ratio of Ratio of
Realized Net Expenses
and Distri- Net Ratio of Investment to
Net Net Unrealized butions Asset Net Expenses Income/ Average
Asset Invest- Gains Dividends from Value Assets to (Loss) to Net
Value ment (Losses) from Net Realized End End of Average Average Assets
Beginning Income/ on Investment Capital of Total Period Net Net (Excluding
of Period (Loss) Securities Income Gains Period Return (000) Assets Assets Waivers)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INTERNATIONAL EQUITY FUND
-------------------------
TRUST CLASS
Year Ended
12/31/95 $13.00 $ 0.07 $ 1.75 $(0.06) $(0.20) $14.56 14.03 % $77,519 1.38% 0.70 % 1.38%
12/31/94 $12.59 $ 0.02 $ 0.40 $ 0.00 $(0.01) $13.00 3.32 % $41,324 1.43% 0.21 % 1.46%
12/31/93(1) $10.00 $ 0.00 $ 2.63 $ 0.00 $(0.04) $12.59 26.55 % $23,457 1.64% 0.03 % 1.64%
INVESTOR CLASS
Year Ended
12/31/95 $12.96 $ 0.05 $ 1.73 $(0.02) $(0.20) $14.52 13.79 %* $ 1,686 1.68% 0.42 % 1.68%
12/31/94 $12.58 $ 0.02 $ 0.37 $ 0.00 $(0.01) $12.96 3.08 %* $ 1,179 1.73% 0.03 % 2.22%
12/31/93(2) $10.93 $(0.01) $ 1.70 $ 0.00 $(0.04) $12.58 23.52 %* $ 321 1.92% (0.38)% 20.12%
ASIAN TIGERS FUND
-----------------
TRUST CLASS
Year Ended
12/31/95 $ 9.47 $ 0.12 $ 0.98 $(0.12) $ 0.00 $10.45 11.61 % $23,145 1.52% 1.38 % 1.60%
12/31/94(3) $10.00 $ 0.03 $(0.53) $(0.02) $(0.01) $ 9.47 (5.07)% $17,860 1.60% 0.45 % 1.71%
INVESTOR CLASS
Year Ended
12/31/95 $ 9.47 $ 0.11 $ 0.95 $(0.09) $ 0.00 $10.44 11.18 %* $ 733 1.81% 1.05 % 1.88%
12/31/94(4) $10.00 $ 0.01 $(0.53) $ 0.00 $(0.01) $ 9.47 (5.37)%* $ 705 1.90% 0.15 % 2.75%
BALANCED FUND
-------------
TRUST CLASS
Year Ended
12/31/95 $ 9.53 $ 0.39 $ 1.65 $(0.39) $(0.43) $10.75 21.85 % $49,899 0.92% 3.74 % 0.92%
12/31/94 $10.04 $ 0.30 $(0.50) $(0.30) $(0.01) $ 9.53 (2.11)% $72,086 0.94% 3.11 % 0.94%
12/31/93(1) $10.00 $ 0.29 $ 0.39 $(0.29) $(0.35) $10.04 7.09 % $58,510 0.97% 2.88 % 0.97%
INVESTOR CLASS
Year Ended
12/31/95 $ 9.53 $ 0.34 $ 1.67 $(0.36) $(0.43) $10.75 21.52 %* $ 3,949 1.22% 3.36 % 1.22%
12/31/94 $10.03 $ 0.27 $(0.49) $(0.27) $(0.01) $ 9.53 (2.29)%* $ 2,894 1.24% 2.86 % 1.34%
12/31/93(5) $10.28 $ 0.20 $ 0.12 $(0.22) $(0.35) $10.03 4.07 %* $ 1,265 1.30% 2.30 % 5.06%
<CAPTION>
Ratio of
Net
Investment
Income/
(Loss) to
Average
Net
Assets Portfolio
(Excluding Turnover
Waivers) Rate
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INTERNATIONAL EQUITY FUND
-------------------------
TRUST CLASS
Year Ended
12/31/95 0.70 % 11%
12/31/94 0.18 % 6%
12/31/93(1) 0.03 % 13%
INVESTOR CLASS
Year Ended
12/31/95 0.42 % 11%
12/31/94 (0.46)% 6%
12/31/93(2) (18.58)% 13%
ASIAN TIGERS FUND
-----------------
TRUST CLASS
Year Ended
12/31/95 1.30 % 28%
12/31/94(3) 0.34 % 13%
INVESTOR CLASS
Year Ended
12/31/95 0.98 % 28%
12/31/94(4) (0.70)% 13%
BALANCED FUND
-------------
TRUST CLASS
Year Ended
12/31/95 3.74 % 85%
12/31/94 3.11 % 85%
12/31/93(1) 2.88 % 126%
INVESTOR CLASS
Year Ended
12/31/95 3.36 % 85%
12/31/94 2.76 % 85%
12/31/93(5) (1.46)% 126%
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. Commenced operations on January 4, 1993. All ratios and total returns for
the period have been annualized.
2. Commenced operations on April 12, 1993. All ratios and total returns for the
period have been annualized.
3. Commenced operations on January 3, 1994. All ratios and total returns for
the period have been annualized.
4. Commenced operations on January 12, 1994. All ratios and total returns for
the period have been annualized.
5. Commenced operations on March 9, 1993. All ratios and total returns for the
period have been annualized.
* Sales load is not included in total return.
10
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED) _______________________________________________
<TABLE>
<CAPTION>
Net Ratio of Ratio of
Realized Net Expenses
and Distri- Net Ratio of Investment to
Unrealized butions Asset Net Expenses Income Average
Net Asset Net Gains Dividends from Value Assets to to Net
Value Invest- (Losses) from Net Realized End End of Average Average Assets
Beginning ment on Investment Capital of Total Period Net Net (Excluding
of Period Income Securities Income Gains Period Return (000) Assets Assets Waivers)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FIXED INCOME FUND
-----------------
TRUST CLASS
Year Ended
12/31/95 $ 9.30 $0.59 $ 1.02 $(0.59) $ 0.00 $10.32 17.75 % $125,563 0.74% 5.97% 0.84%
12/31/94 $10.23 $0.54 $(0.93) $(0.54) $ 0.00 $ 9.30 (3.82)% $ 92,402 0.72% 5.45% 0.82%
12/31/93(1) $10.00 $0.47 $ 0.50 $(0.47) $(0.27) $10.23 9.92 % $131,002 0.77% 4.60% 0.87%
INVESTOR CLASS
Year Ended
12/31/95 $ 9.32 $0.55 $ 1.04 $(0.56) $ 0.00 $10.35 17.40 %* $ 646 0.99% 5.72% 1.09%
12/31/94 $10.24 $0.50 $(0.90) $(0.52) $ 0.00 $ 9.32 (3.97)%* $ 442 0.98% 5.38% 1.08%
12/31/93(2) $10.30 $0.35 $ 0.23 $(0.37) $(0.27) $10.24 7.44 %* $ 86 1.06% 4.08% 42.44%
INTERMEDIATE GOVERNMENT FIXED INCOME FUND
-----------------------------------------
TRUST CLASS
Year Ended
12/31/95 $ 9.33 $0.54 $ 0.73 $(0.54) $ 0.00 $10.06 13.86 % $ 73,466 0.73% 5.48% 0.83%
12/31/94 $10.08 $0.47 $(0.75) $(0.47) $ 0.00 $ 9.33 (2.78)% $ 91,002 0.74% 4.88% 0.84%
12/31/93(1) $10.00 $0.41 $ 0.18 $(0.41) $(0.10) $10.08 6.04 % $104,826 0.76% 4.15% 0.86%
INVESTOR CLASS
Year Ended
12/31/95 $ 9.32 $0.49 $ 0.76 $(0.52) $ 0.00 $10.05 13.59 %* $ 2,946 0.98% 5.18% 1.08%
12/31/94 $10.07 $0.43 $(0.73) $(0.45) $ 0.00 $ 9.32 (3.03)%* $ 1,133 1.02% 5.05% 1.12%
12/31/93(3) $10.21 $0.28 $(0.02) $(0.30) $(0.10) $10.07 3.42 %* $ 46 1.04% 3.85% 77.08%
TAX-EXEMPT FIXED INCOME FUND
----------------------------
TRUST CLASS
Year Ended
12/31/95 $ 9.26 $0.48 $ 0.94 $(0.48) $ 0.00 $10.20 15.67 % $ 50,079 0.75% 4.84% 0.87%
12/31/94 $10.23 $0.44 $(0.94) $(0.44) $(0.03) $ 9.26 (4.93)% $ 53,588 0.71% 4.54% 0.84%
12/31/93(1) $10.00 $0.42 $ 0.42 $(0.42) $(0.19) $10.23 8.64 % $ 67,162 0.75% 4.17% 0.85%
INVESTOR CLASS
Year Ended
12/31/95 $ 9.24 $0.43 $ 0.97 $(0.46) $ 0.00 $10.18 15.43 %* $ 1,131 1.00% 4.59% 1.12%
12/31/94 $10.22 $0.40 $(0.93) $(0.42) $(0.03) $ 9.24 (5.27)%* $ 1,059 0.97% 4.35% 1.10%
12/31/93(4) $10.29 $0.32 $ 0.14 $(0.34) $(0.19) $10.22 5.73 %* $ 428 1.05% 3.88% 11.86%
<CAPTION>
Ratio of
Net
Investment
Income/
(Loss) to
Average
Net
Assets Portfolio
(Excluding Turnover
Waivers) Rate
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FIXED INCOME FUND
-----------------
TRUST CLASS
Year Ended
12/31/95 5.87 % 59%
12/31/94 5.35 % 126%
12/31/93(1) 4.50 % 163%
INVESTOR CLASS
Year Ended
12/31/95 5.62 % 59%
12/31/94 5.28 % 126%
12/31/93(2) (37.30)% 163%
INTERMEDIATE GOVERNMENT FIXED INCOME FUND
-----------------------------------------
TRUST CLASS
Year Ended
12/31/95 5.38 % 115%
12/31/94 4.78 % 124%
12/31/93(1) 4.05 % 81%
INVESTOR CLASS
Year Ended
12/31/95 5.08 % 115%
12/31/94 4.95 % 124%
12/31/93(3) (72.19)% 81%
TAX-EXEMPT FIXED INCOME FUND
----------------------------
TRUST CLASS
Year Ended
12/31/95 4.72 % 129%
12/31/94 4.41 % 146%
12/31/93(1) 4.07 % 149%
INVESTOR CLASS
Year Ended
12/31/95 4.47 % 129%
12/31/94 4.22 % 146%
12/31/93(4) (6.93)% 149%
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. Commenced operations on January 4, 1993. All ratios and total returns for
the period have been annualized.
2. Commenced operations on March 12, 1993. All ratios and total returns for the
period have been annualized.
3. Commenced operations on April 12, 1993. All ratios and total returns for the
period have been annualized.
4. Commenced operations on March 9, 1993. All ratios and total returns for the
period have been annualized.
* Sales load is not included in total return.
11
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED) _______________________________________________
<TABLE>
<CAPTION>
Net Ratio of Ratio of
Realized Net Expenses
and Distri- Net Ratio of Investment to
Net Unrealized butions Asset Net Expenses Income Average
Asset Net Gains Dividends from Value Assets to to Net
Value Invest- (Losses) from Net Realized End End of Average Average Assets
Beginning ment on Investment Capital of Total Period Net Net (Excluding
of Period Income Securities Income Gains Period Return (000) Assets Assets Waivers)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
GLOBAL FIXED INCOME FUND
------------------------
TRUST CLASS
Year Ended
12/31/95 $ 9.54 $0.62 $ 1.38 $(0.96) $ 0.00 $10.58 20.99 % $ 17,433 1.10% 5.86% 1.16%
12/31/94 $10.43 $0.56 $(0.72) $(0.55) $(0.18) $ 9.54 (1.47)% $ 15,021 1.16% 5.09% 1.22%
12/31/93(1) $10.00 $0.54 $ 0.94 $(0.64) $(0.41) $10.43 16.33 % $ 16,488 1.21% 5.95% 1.21%
INVESTOR CLASS
Year Ended
12/31/95 $ 9.53 $0.52 $ 1.45 $(0.94) $ 0.00 $10.56 20.68 %* $ 125 1.35% 5.57% 1.41%
12/31/94 $10.42 $0.46 $(0.64) $(0.53) $(0.18) $ 9.53 (1.71)%* $ 87 1.41% 5.03% 7.54%
12/31/93(2) $10.88 $0.40 $ 0.12 $(0.57) $(0.41) $10.42 6.61 %* $ 17 1.56% 5.85% 319.45%
TREASURY MONEY MARKET FUND
--------------------------
TRUST CLASS
Year Ended
12/31/95 $ 1.00 $0.05 $ 0.00 $(0.05) $ 0.00 $ 1.00 5.28 % $110,475 0.44% 5.16% 0.59%
12/31/94 $ 1.00 $0.04 $ 0.00 $(0.04) $ 0.00 $ 1.00 3.58 % $111,545 0.45% 3.50% 0.61%
12/31/93(3) $ 1.00 $0.03 $ 0.00 $(0.03) $ 0.00 $ 1.00 2.56 % $108,495 0.47% 2.53% 0.62%
INVESTOR CLASS
Year Ended
12/31/95 $ 1.00 $0.05 $ 0.00 $(0.05) $ 0.00 $ 1.00 5.02 % $ 7,931 0.69% 4.89% 0.84%
12/31/94 $ 1.00 $0.03 $ 0.00 $(0.03) $ 0.00 $ 1.00 3.32 % $ 3,231 0.70% 3.52% 0.86%
12/31/93(4) $ 1.00 $0.02 $ 0.00 $(0.02) $ 0.00 $ 1.00 2.29 % $ 1,347 0.75% 2.28% 5.23%
GOVERNMENT MONEY MARKET FUND
----------------------------
TRUST CLASS
Year Ended
12/31/95 $ 1.00 $0.05 $ 0.00 $(0.05) $ 0.00 $ 1.00 5.59 % $207,615 0.42% 5.45% 0.42%
12/31/94 $ 1.00 $0.04 $ 0.00 $(0.04) $ 0.00 $ 1.00 3.89 % $157,140 0.42% 3.81% 0.42%
12/31/93(3) $ 1.00 $0.03 $ 0.00 $(0.03) $ 0.00 $ 1.00 3.00 % $159,401 0.45% 2.92% 0.45%
INVESTOR CLASS
Year Ended
12/31/95 $ 1.00 $0.05 $ 0.00 $(0.05) $ 0.00 $ 1.00 5.33 % $ 3,002 0.67% 5.18% 0.67%
12/31/94 $ 1.00 $0.04 $ 0.00 $(0.04) $ 0.00 $ 1.00 3.63 % $ 2,739 0.67% 3.62% 0.67%
12/31/93(5) $ 1.00 $0.02 $ 0.00 $(0.02) $ 0.00 $ 1.00 2.78 % $ 1,814 0.72% 2.69% 2.37%
<CAPTION>
Ratio of
Net
Investment
Income/
(Loss)
to
Average
Net
Assets Portfolio
(Excluding Turnover
Waivers) Rate
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
GLOBAL FIXED INCOME FUND
------------------------
TRUST CLASS
Year Ended
12/31/95 5.80 % 105%
12/31/94 5.03 % 138%
12/31/93(1) 5.95 % 146%
INVESTOR CLASS
Year Ended
12/31/95 5.51 % 105%
12/31/94 (1.10)% 138%
12/31/93(2) (312.04)% 146%
TREASURY MONEY MARKET FUND
--------------------------
TRUST CLASS
Year Ended
12/31/95 5.01 % N/A
12/31/94 3.34 % N/A
12/31/93(3) 2.38 % N/A
INVESTOR CLASS
Year Ended
12/31/95 4.74 % N/A
12/31/94 3.36 % N/A
12/31/93(4) (2.20)% N/A
GOVERNMENT MONEY MARKET FUND
----------------------------
TRUST CLASS
Year Ended
12/31/95 5.45 % N/A
12/31/94 3.81 % N/A
12/31/93(3) 2.92 % N/A
INVESTOR CLASS
Year Ended
12/31/95 5.18 % N/A
12/31/94 3.62 % N/A
12/31/93(5) 1.04 % N/A
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. Commenced operations on February 7, 1993. All ratios and total returns for
the period have been annualized.
2. Commenced operations on April 26, 1993. All ratios and total returns for the
period have been annualized.
3. Commenced operations on January 4, 1993. All ratios and total returns for
the period have been annualized.
4. Commenced operations on March 25, 1993. All ratios and total returns for the
period have been annualized.
5. Commenced operations on April 22, 1993. All ratios and total returns for the
period have been annualized.
* Sales load is not included in total return.
12
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED) _______________________________________________
<TABLE>
<CAPTION>
Ratio of
Net
Investment
Net Ratio of Ratio of Income/
Realized Net Expenses (Loss)
and Distri- Net Ratio of Investment to to
Net Unrealized butions Asset Net Expenses Income Average Average
Asset Net Gains Dividends from Value Assets to to Net Net
Value Invest- (Losses) from Net Realized End End of Average Average Assets Assets
Beginning ment on Investment Capital of Total Period Net Net (Excluding (Excluding
of Period Income Securities Income Gains Period Return (000) Assets Assets Waivers) Waivers)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MONEY MARKET FUND
-----------------
TRUST CLASS
Year Ended
12/31/95 $1.00 $0.06 $0.00 $(0.06) $0.00 $1.00 5.64% $475,688 0.41% 5.50% 0.56% 5.35 %
12/31/94 $1.00 $0.04 $0.00 $(0.04) $0.00 $1.00 3.97% $460,583 0.41% 3.93% 0.56% 3.78 %
12/31/93(1) $1.00 $0.03 $0.00 $(0.03) $0.00 $1.00 3.01% $367,110 0.46% 2.92% 0.61% 2.77 %
INVESTOR CLASS
Year Ended
12/31/95 $1.00 $0.05 $0.00 $(0.05) $0.00 $1.00 5.38% $ 1,358 0.66% 5.22% 0.81% 5.07 %
12/31/94 $1.00 $0.04 $0.00 $(0.04) $0.00 $1.00 3.71% $ 605 0.66% 4.13% 0.81% 3.98 %
12/31/93(2) $1.00 $0.02 $0.00 $(0.02) $0.00 $1.00 2.76% $ 118 0.72% 2.69% 10.48% (7.09)%
TAX-EXEMPT MONEY MARKET FUND
----------------------------
TRUST CLASS
Year Ended
12/31/95 $1.00 $0.03 $0.00 $(0.03) $0.00 $1.00 3.49% $167,945 0.41% 3.44% 0.56% 3.29 %
12/31/94 $1.00 $0.02 $0.00 $(0.02) $0.00 $1.00 2.50% $161,054 0.43% 2.52% 0.59% 2.36 %
12/31/93(1) $1.00 $0.02 $0.00 $(0.02) $0.00 $1.00 1.98% $116,000 0.45% 1.97% 0.60% 1.82 %
INVESTOR CLASS
Year Ended
12/31/95 $1.00 $0.03 $0.00 $(0.03) $0.00 $1.00 3.24% $ 3,244 0.66% 3.19% 0.81% 3.04 %
12/31/94 $1.00 $0.02 $0.00 $(0.02) $0.00 $1.00 2.24% $ 4,204 0.68% 2.31% 0.84% 2.15 %
12/31/93(3) $1.00 $0.01 $0.00 $(0.01) $0.00 $1.00 1.65% $ 1,394 0.74% 1.81% 4.88% (2.33)%
<CAPTION>
Portfolio
Turnover
Rate
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C>
MONEY MARKET FUND
-----------------
TRUST CLASS
Year Ended
12/31/95 N/A
12/31/94 N/A
12/31/93(1) N/A
INVESTOR CLASS
Year Ended
12/31/95 N/A
12/31/94 N/A
12/31/93(2) N/A
TAX-EXEMPT MONEY MARKET FUND
----------------------------
TRUST CLASS
Year Ended
12/31/95 N/A
12/31/94 N/A
12/31/93(1) N/A
INVESTOR CLASS
Year Ended
12/31/95 N/A
12/31/94 N/A
12/31/93(3) N/A
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. Commenced operations on January 4, 1993. All ratios and total returns for
the period have been annualized.
2. Commenced operations on March 31, 1993. All ratios and total returns for the
period have been annualized.
3. Commenced operations on April 13, 1993. All ratios and total returns for the
period have been annualized.
13
<PAGE>
..........................................
[SYMBOL WHAT IS AN
APPEARS INTERMEDIARY?
HERE]
Any entity, such as a bank, broker-
dealer, other financial institution,
association or organization which has
entered into an arrangement with the
Distributor to sell Investor Class
shares to its customers.
..........................................
YOUR ACCOUNT AND DOING BUSINESS
WITH US
Trust Class and Investor Class shares of a Fund are sold on a continuous basis
and may be purchased directly from the Trust's Transfer Agent, DST Systems,
Inc., 210 W. Tenth Street, Kansas City, Missouri 64105, either by mail,
telephone or by wire. Shares may also be purchased through financial
institutions or broker-dealers which have established a dealer agreement with
the Distributor ("Intermediaries"). Shares of each Fund are offered only to
residents of states in which the shares are eligible for purchase. For more
information about the following topics, see "Additional Information About Doing
Business with Us."
- --------------------------------------------------------------------------------
HOW TO BUY, Trust Class shares of the Funds may be purchased through
SELL AND accounts established with LaSalle National Trust, N.A.,
EXCHANGE ("LaSalle"), its affiliates and correspondents.
SHARES THROUGH
INTERMEDIARIES Investor Class shares of the Funds may be purchased
through Intermediaries (including LaSalle) which provide
various services to their customers ("Customers"). Contact your
Intermediary for information about the services available to
you and for specific instructions on how to buy, sell and
exchange shares. To allow for processing and transmittal of
orders to the Transfer Agent on the same day, Intermediaries
may impose earlier cut-off times for receipt of purchase
orders. Certain Intermediaries may charge account fees.
Information concerning shareholder services and any charges
will be provided to the customer by the Intermediary. Certain
of these Intermediaries may be required to register as broker-
dealers under state law.
The shares you purchase through an Intermediary may be
held "of record" by that Intermediary. If you want to
transfer the registration of shares beneficially owned by
you, but held "of record" by an Intermediary, you should call
the Intermediary to request this change.
HOW TO BUY
INVESTOR CLASS
SHARES FROM
THE TRANSFER
AGENT
Opening an Investors may purchase Investor Class shares of any Fund by
Account completing and signing an Account Application form and
mailing it, along with a check (or other negotiable bank
By Mail instrument or money order) payable to "Rembrandt Funds (R),
[Fund Name]," to the Transfer Agent, 210 W. Tenth Street,
Kansas City, Missouri 64141-6402. 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.
All purchases made by check should be in U.S. dollars and
made payable to the Rembrandt Funds(R). Third party checks,
credit cards, credit card checks and cash will not be
accepted. When purchases are made by check, redemptions will
not be allowed until the investment being redeemed has been
in the account for 15 business days.
Account Application forms can be obtained by calling
1-800-443-4725.
14
<PAGE>
By Telephone If an Account Application has been previously received, an
investor may also purchase shares by telephone by calling 1-
800-443-4725. With respect to the Investor Class shares,
orders by telephone will not be executed until payment has
been received. If a check received for purchase of Investor
Class shares does not clear, the purchase will be canceled
and the investor could be liable for any losses or fees
incurred.
By Wire Shareholders having an account with a commercial bank that
is a member of the Federal Reserve System may purchase
shares of any Fund by requesting their bank to transmit
funds by wire to: United Missouri Bank of Kansas, N.A.; ABA
#10-10-00695; for Account Number 98-7052-349-3; Further
Credit: [Name of Fund]. 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 1-800-443-4725 to be
assigned an account number. The investor's name, account
number, taxpayer identification number or Social Security
number, and address must be specified in the wire. In
addition, an Account Application should be promptly
forwarded to: DST Systems, Inc., 210 W. Tenth Street, Kansas
City, Missouri 64141-6402.
Subsequent Purchases: Additional investments may be made
at any time through the wire procedures described above,
which must include a Shareholder's name and account number.
The investor's bank may impose a fee for investments by
wire.
Other Other Shareholders who desire to transfer the registration
Information of their shares should contact the Administrator.
Regarding
Purchases Purchases of Investor Class shares may be made by direct
deposit or Automated Clearing House ("ACH") transactions.
No certificates representing shares will be issued.
SALES CHARGES The following table shows the regular sales charge on
Investor Class shares of the Equity, Balanced and Fixed
Income Funds payable by a "single purchaser" (defined below)
together with the sales charge reallowed to certain
financial institutions (the "reallowance").
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
SALES CHARGE AS SALES CHARGE AS REALLOWANCE AS
A PERCENTAGE OF A PERCENTAGE OF PERCENTAGE OF
AMOUNT OF OFFERING PRICE NET AMOUNT OFFERING PRICE
PURCHASE PER SHARE INVESTED PER SHARE
------------------------------------------------------------------------------------
<S> <C> <C> <C>
Less than $100,000 4.50% 4.71% 4.05%
$100,000 but less than $250,000 3.50% 3.63% 3.15%
$250,000 but less than $500,000 3.00% 3.09% 2.70%
$500,000 and above 1.00% 1.01% 0.90%
------------------------------------------------------------------------------------
</TABLE>
The sales charge shown in the table is the maximum sales
charge that applies to sales of Investor Class shares. Under
certain circumstances, reallowances of up to the entire
amount of the sales charge may be paid to certain financial
institutions, who might then be deemed to be "underwriters"
under the Securities Act of 1933.
15
<PAGE>
The Distributor may, from time to time in its sole
discretion, institute one or more promotional incentive
programs for dealers, which will be paid for by the
Distributor from the sales charge it receives or from any
other source available to it. Under any such program, the
Distributor may provide incentives, in the form of cash or
other compensation, including merchandise, airline vouchers,
trips and vacation packages, to dealers selling shares of
the Funds.
ELIGIBILITY FOR Investors in Investor Class shares of the Equity and Fixed
REDUCED SALES Income Funds will be entitled to lower, graduated sales
CHARGE charges if the investors' total investment in a Fund exceeds
certain thresholds. In calculating the sales charge rates
Rights of applicable to current purchases of Investor Class shares of
Accumulation the Equity, Balanced and Fixed Income Funds, a "single
purchaser" is entitled to cumulate current purchases with
the current market value of previously purchased shares of
the Fund and the other eligible Funds of the Trust which are
sold subject to a comparable sales charge (the "Eligible
Funds").
The term "single purchaser" refers to (i) an individual,
(ii) an individual and spouse purchasing shares 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 (or the Intermediary)
must ask the Transfer Agent for such reduction at the time
of purchase and provide the account number(s) of the
investor, and, as applicable, the investor and spouse,
and/or their minor children. The Funds may amend or
terminate this right of accumulation at any time as to
purchases made thereafter.
Letter of By submitting a Letter of Intent (the "Letter") to the
Intent Transfer Agent, a "single purchaser" may purchase Investor
Class shares of the Fund and the other Eligible Funds during
a 13-month period at the sales charge rates applicable to
the aggregate amount of the intended purchases stated in the
Letter. The Letter may apply to purchases made up to 90 days
before the date of the Letter. To receive credit for such
prior purchases, the Shareholder must notify the Transfer
Agent at the time the Letter is submitted that there are
prior purchases that may apply, and, at the time of later
purchases, notify the Transfer Agent that such purchases are
applicable under the Letter.
Other No sales charge is imposed on Investor Class shares of the
Circumstances Funds: (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 brokers that
have a sales agreement with the Distributor, for their own
account or for retirement plans for their employees; (iii)
sold to employees (and their spouses) of dealers or brokers
that certify to the Transfer Agent at the time of purchase
that such purchase is for their own account (or for the
benefit of such employees' minor children); (iv) in
aggregate purchases of $1 million or more by tax
16
<PAGE>
...................................
[SYMBOL HOW DOES AN
APPEARS EXCHANGE TAKE
HERE] PLACE?
When making an exchange, you
authorize the sale of your
shares of one or more Funds in
order to purchase the shares
of another Fund. In other
words, you are executing a
sell order and then a buy
order. This sale of your shares
is a taxable event which could
result in a taxable gain or loss.
...................................
exempt organizations enumerated in Section 501(c) of the
Code, or employee benefit plans created under Sections 401 or
457 of the Code; (v) sold to employees (and immediate family
members) of the Advisor and its affiliates or sold to retired
employees (and immediate family members) of ABN AMRO Holding
N.V. and its affiliates and subsidiaries; (vi) which are
purchased with the proceeds of trust or employee benefit plan
distributions for which the Advisor and its affiliates act in
a fiduciary capacity (vii) which are purchased with the
proceeds of any distribution made by a qualified employee
benefit plan (including a 401(k) Plan), or rollovers from
individual Retirement Accounts ("IRAs"); (viii) which are
sold to the participants in a 401(k) Plan that is a
shareholder of any Fund; (ix) acquired in any exchange of
Trust Class shares for Investor Class shares of the same
Fund; or (x) which are sold through broker-dealers who
provide mutual fund transaction services, and who have
entered into an arrangement with the Distributor relating to
waivers of sales charges (for more information, please see
the Statement of Additional Information). Certain broker-
dealers who provide such mutual fund transaction services may
charge a fee for this service.
Automatic You may systematically buy Investor Class shares through
Investment deductions from your checking account, provided these
Plan ("AIP") accounts are maintained through banks which are part of the
Automated Clearing House ("ACH") system. Upon notice, the
amount you commit to the AIP may be changed or canceled at
any time. The minimum pre-authorized investment amount is $50
per month.You may obtain an AIP application form by calling
1-800-443-4725.
EXCHANGING
SHARES
When Can You Once payment for your shares has been received and accepted
Exchange (i.e., an account has been established), you may exchange
Shares? some or all of your Investor Class or Trust Class shares for
Investor Class or Trust Class shares of other Funds within the
Trust. Exchanges are made at net asset value plus any
applicable sales charge. Any Shareholder or Customer who wishes
to make an exchange must have received a current prospectus of
the Fund in which he or she wishes to invest before the
exchange will be effected. For an established account,
exchanges will be made only after instructions in writing or by
telephone (an "Exchange Request") are received by the Transfer
Agent. The exchange privilege may be exercised only in those
states where the class of shares of such other Funds of the
Trust may legally be sold.
When Do Sales Funds that are not Money Market Funds currently impose a sales
Charges Apply charge on Investor Class shares. If you exchange your Investor
to an Class shares into one of
Exchange?
17
<PAGE>
.....................................
[SYMBOL WHAT IS A
APPEARS SIGNATURE
HERE] GUARANTEE?
A signature guarantee verifies the
authenticity of your signature and
may be obtained from any of the
following: banks, brokers, dealers,
certain credit unions, securities
exchange or association, clearing
agency or savings association. A
notary public cannot provide a
signature guarantee.
.....................................
these Funds, you will have to pay a sales charge on any
portion of your exchanged Investor Class shares for which you
have not previously paid a sales charge.
If you buy Investor Class shares of a "non-money market"
fund and you receive a sales charge waiver, you will be
deemed to have paid the sales charge for purposes of this
exchange privilege.
The Trust reserves the right to change the terms and
conditions of the exchange privilege discussed herein, or to
terminate the exchange privilege, upon 60 days' notice.
Requesting an To request an exchange, you must provide proper written
Exchange of instructions to the Transfer Agent. Telephone exchanges will
Shares also be accepted if you previously elected this option on
your account application.
To exchange shares held of record by an Intermediary, or
where applicable, LaSalle, but beneficially owned by a
Customer, the Customer should contact the Intermediary, or
where applicable, LaSalle, 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.
REDEMPTION OF Shareholders may redeem their shares on any Business Day.
SHARES Redemption requests may be made directly to the Customer's
Intermediary. Shareholders may also their shares by mail or
by telephone. Proceeds of redemptions of Money Market Fund
shares may not be transmitted by Federal Reserve wire on
federal holidays restricting wire transfers. Redemption
orders for the Equity, Balanced and Fixed Income Funds must
be received by 4:00 p.m., Eastern time. Redemption orders for
the Money Market Funds must be received by 1:00 p.m., Eastern
time.
By Mail A written request for redemption must be received by the
Transfer Agent in order to constitute a valid request for
redemption. The Transfer Agent may require that the signature
on the written request be guaranteed by a bank which is a
member of the Federal Deposit Insurance Corporation, a trust
company, broker, dealer, credit union (if authorized under
state law), securities exchange or association, clearing agency
or savings association. The signature guarantee requirement
will be waived if all of the following conditions apply: (1)
the redemption is for $5,000 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 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.
18
<PAGE>
By Telephone Shares may be redeemed by telephone if the Shareholder
elects that option on the Account Application. 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. Wire transfer redemption requests may be made by
the Shareholder by calling the Transfer Agent at 1-800-443-
4725, who will deduct a wire charge of $10.00 from the
amount of the redemption. Trust Class Shareholders may have
proceeds of redemptions wired without payment of the wire
charge.
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. Shareholders may not close their
accounts by telephone.
Other All redemption orders are effected at the net asset value
Information per share next determined after receipt of a valid request
Regarding for redemption, as described above. Payment to Shareholders
Redemptions for shares redeemed will be made within seven days after
receipt by the Transfer Agent of the valid request for
redemption.
At various times, a Fund may be requested to redeem
shares for which it has not yet received good payment. In
such circumstances, the forwarding of proceeds may be
delayed for 10 or more days until payment has been collected
for the purchase of such shares. The Funds intend to pay
cash for all shares redeemed, but under conditions which
make payment in cash unwise, payment may be made wholly or
partly in portfolio securities with a market value equal to
the redemption price. In such cases, a Shareholder may incur
brokerage costs in converting such securities to cash.
See "Purchase and Redemption of Shares" in the Statement
of Additional Information for examples of when the right of
redemption may be suspended.
Systematic The Funds offer a Systematic Withdrawal Plan ("SWP") which
Withdrawal Plan may be utilized by Investor Class Shareholders who wish to
receive regular distributions from their account. Upon
commencement of the SWP, the account must have a current
value of $5,000 or more. Shareholders may elect to receive
automatic payments via check or ACH of $50 or more on a
monthly, quarterly, semi-annual or annual basis. A SWP
Application Form may be obtained by calling 1-800-443-4725.
Shareholders should realize that if withdrawals exceed
income dividends, their invested principal in the account
will be depleted. Thus, depending on the frequency and
19
<PAGE>
................................................................................
[SYMBOL WHAT ARE
APPEARS INVESTMENT
HERE] OBJECTIVES AND
POLICIES?
Each Fund's investment objective is
a statement of what it seeks to
achieve. It is important to make sure
that the investment objective matches
your own financial needs and
circumstances. The investment policies
section spells out the types of
securities in which each Fund invests.
................................................................................
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.
CHECKWRITING Checkwriting is offered free of charge to Investor Class
SERVICE Shareholders in the Money Market Funds. An Investor Class
Shareholder in any Money Market Fund may redeem shares by
(Money Market writing checks on his or her account for $500 or more. Once a
Funds) Shareholder has signed and returned a signature card, he or
she will receive a supply of checks. A check may be made
payable to any person, and the Shareholder's account will
continue to earn dividends until the check clears.
Because of the difficulty of determining in advance the
exact value of a Fund account, a Shareholder may not use a
check to close his or her account. The checks are free, but a
Shareholder's account will be charged a fee for stopping
payment of a check upon a Shareholder's request or if the
check cannot be honored because of insufficient funds or
other valid reasons.
INVESTMENT
OBJECTIVE AND
POLICIES _______________________________________________________________________
VALUE FUND The Value Fund seeks a high level of total return through
capital appreciation and current income.
The Value Fund will invest at least 65% of its assets in
U.S. common stocks that the Advisor believes are undervalued
and present the opportunity to increase shareholder value. The
Value Fund will invest in common stocks that are traded on a
national securities exchange or are actively traded in the
over-the-counter market and that: (i) are priced below their
intrinsic value as determined by the Advisor's dividend
discount model; (ii) have consistently paid dividends; and
(iii) are issued by companies that the Advisor believes are
financially sound.
Any remaining assets of the Fund may be invested in: (i)
warrants to purchase common stocks; (ii) debt securities
convertible into common stocks rated in the highest four
rating categories by a nationally recognized statistical
rating organization ("NRSRO") or determined by the Advisor to
be of comparable quality at the time of purchase; (iii)
preferred stock convertible into common stocks; and (iv) U.S.
dollar denominated equity securities of foreign issuers
(including sponsored American Depositary Receipts ("ADRs")).
20
<PAGE>
The Fund will invest in securities of foreign issuers only
if they are listed on national securities exchanges or
actively traded in the over-the-counter market. The Fund
will invest in options and futures for hedging purposes
only.
GROWTH FUND The Growth Fund seeks a high level of total return primarily
through capital appreciation.
The Growth Fund will invest at least 65% of its assets in
the common stock of corporations of any size that, in the
Advisor's opinion, have strong prospects for appreciation
through growth in earnings. The Growth Fund invests
primarily in common stocks that: (i) are traded on a
national securities exchange or are actively traded in the
over-the-counter market and have an average trading volume
of more than $1 million per day; (ii) have sales and
earnings growth rates that exceed the growth rate of the
Gross Domestic Product; and (iii) maintain a positive return
on equity and total assets.
Any remaining Fund assets may be invested in: (i)
warrants to purchase common stocks; (ii) debt securities
convertible into common stocks; (iii) preferred stock
convertible into common stocks; and (iv) U.S. dollar
denominated equity securities of foreign issuers (including
sponsored ADRs). The Fund will invest in securities of
foreign issuers only if they are listed on national
securities exchanges or actively traded in the over-the-
counter market. The Fund will invest in options and futures
for hedging purposes only.
SMALL CAP FUND The Small Cap Fund seeks a high level of total return
primarily through capital appreciation.
The Small Cap Fund will invest at least 65% of its assets
in the common stocks of corporations with smaller
capitalization levels that the Advisor believes have strong
prospects for appreciation through growth in earnings. The
Advisor's emphasis will be on a diversified portfolio of
common stocks of companies with aggregate market
capitalization of less than $1 billion. In selecting stocks
for the Fund, factors reviewed will include sales and
earnings growth rates and the strength of the issuer's
balance sheet.
Because the Fund invests primarily in common stocks of
smaller capitalization companies, the Fund's shares may
fluctuate significantly in value, and thus may be more
suitable for long-term investors who can bear the risk of
short-term fluctuations.
Any remaining Fund assets may be invested in: (i)
warrants to purchase common stocks; (ii) debt securities
convertible into common stocks; (iii) preferred stock
convertible into common stocks; and (iv) U.S. dollar
denominated equity securities of foreign issuers (including
sponsored ADRs). The Fund will invest in equity securities
of foreign issuers that satisfy in substance the criteria
for investing in smaller capitalization stocks set forth
above. The Fund will invest in equity securities of foreign
issuers only if they are listed on national securities
exchanges or actively traded in the over-the-counter market.
The Fund will invest in options and futures for hedging
purposes only.
INTERNATIONAL The International Equity Fund seeks a high level of total
EQUITY FUND return through capital appreciation and current income.
21
<PAGE>
The International Equity Fund will invest at least 65% of
its assets in equity securities of issuers in at least three
countries other than the U.S.
While the Fund will not necessarily spread its
investments among more than three countries other than the
U.S., the Advisor intends to diversify its investments among
countries to reduce currency risk. Investments will be made
primarily in common stocks of companies domiciled in
developed countries, but may be made in the securities of
companies domiciled in developing countries as well.
Although the Fund will invest primarily in securities listed
on national stock exchanges, it will also invest in
securities actively traded in over-the-counter markets.
Securities of companies in developing countries may pose
liquidity risks.
Any remaining Fund assets will be invested in common
stocks of closed-end management investment companies that
invest primarily in international common stocks, stocks of
U.S. issuers listed on national securities exchanges or
actively traded in the over-the-counter market, convertible
securities of U.S. issuers (whether or not they are listed
on national securities exchanges) and money market
instruments. The Fund will invest in options and futures for
hedging purposes only.
TRANSEUROPE The TransEurope Fund seeks a high level of total return
FUND through capital appreciation and current income.
The TransEurope Fund will invest as fully as feasible
(and at least 65% of its assets) in equity securities of
European issuers located in Germany, France, Switzerland,
Belgium, Italy, Spain, the Netherlands, Finland, Sweden,
Denmark, Norway and the United Kingdom. Investments may also
be made in the equity securities of issuers located in the
smaller and emerging markets of Europe. The Fund may also
invest in the equity securities of issuers in the following
Eastern European countries: Poland, Hungary, the Czech
Republic and Slovakia. Emerging markets are subject to
special risks not associated with domestic markets. See
"Certain Risk Factors."
The Fund's remaining assets will be invested in money
market instruments of European issuers. The Fund will invest
in options and futures for hedging purposes only.
ASIAN TIGERS The Asian Tigers Fund seeks to achieve capital appreciation.
FUND
The Asian Tigers Fund will invest primarily in equity
securities that are traded on recognized stock exchanges of
the countries of Asia and in equity securities of companies
organized under the laws of an Asian country. The Fund may
also invest in sponsored ADRs of Asian issuers that are
traded on stock exchanges in the United States. The Fund
does not intend to invest in securities which are
principally traded in markets in Japan or in companies
organized under the laws of Japan.
Under normal circumstances, at least 65% of the total
assets of the Fund will be invested in equity securities of
issuers located in some or all of the following Asian
countries: China, Hong Kong, Singapore, Malaysia, Thailand,
the Philippines and Indonesia. The Fund may also invest in
common stocks traded on markets in Taiwan, South Korea,
22
<PAGE>
India, Pakistan and Sri Lanka, and may invest up to 5% of
its assets in other developing markets. The Fund has no set
policy for allocating investments among the several Asian
countries. Allocation of investments among the various
countries will depend on the relative attractiveness of the
stocks of issuers in the respective countries. Government
regulation and restrictions in many of the countries of
interest may limit the amount, mode, and extent of
investment in companies of such countries.
Any of the Fund's remaining assets will be invested in
common stocks of closed-end management investment companies
that invest primarily in common stocks of Asian countries or
money market instruments of Asian and European issuers.
In selecting industries and particular issuers, the
Advisor will evaluate costs of labor and raw materials,
access to technology, export of products and government
regulation. Although the Fund seeks to invest in larger
companies, it may invest in medium and small companies that,
in the Advisor's opinion, have potential for growth.
While the Fund intends to invest primarily in securities
listed on stock exchanges, it may also invest in securities
traded in over-the-counter markets, which may pose liquidity
risks. No more than 5% of the Fund's assets will be invested
in unlisted securities.
The Fund will invest in options and futures for hedging
purposes only.
LATIN AMERICA The Latin America Equity Fund seeks long-term capital
EQUITY FUND appreciation.
The Fund will invest primarily in equity securities of
(i) companies organized in or for which the principal
securities trading market is in Latin America, and (ii)
companies, wherever organized, that, in one of the last two
fiscal years derived more than 50% of their annual revenues
or profits from goods produced, sales made or services
performed in Latin America ("Latin American issuers"). Under
normal circumstances, at least 65% of the Fund's total
assets will be invested in equity securities of Latin
American issuers.
The Fund seeks to benefit from economic and other
developments in Latin America. The Advisor and Sub-Advisor
believe that investment opportunities may be present in
Latin America as a result of an evolving long-term
international trend encouraging greater market orientation
and diminishing governmental intervention in economic
affairs. This trend may be facilitated by local or
international political, economic or financial developments
that could benefit the capital markets of certain Latin
American countries. For the purpose of this prospectus,
Latin America includes Argentina, Bolivia, Brazil, Chile,
Colombia, Costa Rica, the Dominican Republic, Ecuador, El
Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama,
Paraguay, Peru, Uruguay, Venezuela, and the Spanish-speaking
island nations of the Caribbean (not including Cuba and
Haiti). Although the Fund has no set policy for allocating
investments among Latin American countries, it is currently
contemplated that the Fund will emphasize investments in
issuers located in Argentina, Brazil, Chile, Colombia,
Mexico, Peru and Venezuela. The Fund may be precluded from
investing in certain of the remaining eleven countries and
certain Spanish-speaking islands until such time as adequate
custodial arrangements can be established. Government
23
<PAGE>
regulation and restrictions may limit the amount, mode and
extent of investment in companies in such countries.
Equity securities are common stocks and common stock
equivalents consisting of securities convertible into common
stocks and securities having common stock characteristics
(i.e., rights and warrants to purchase common stocks,
sponsored and unsponsored ADRs of Latin American issuers and
equity securities of closed-end investment companies that
invest primarily in securities of Latin American issuers).
Although the Fund intends to invest primarily in equity
securities listed on stock exchanges, it may also invest in
securities traded in over-the-counter markets and in
securities for which there is no organized market.
The Fund may invest in investment grade debt securities,
including debt securities issued or guaranteed by a Latin
American government or governmental entity ("Sovereign
Debt"), obligations of supranational entities, Brady Bonds
and money market instruments.
For hedging purposes only, the Fund may also enter into
options, futures, interest rate swaps, currency
transactions, caps, collars and floors. The Fund may also
write (i.e., sell) covered call options on the securities in
which it may invest.
The Fund is non-diversified for purposes of the
Investment Company Act of 1940, as amended (the "1940 Act"),
which means that is not limited by the 1940 Act in the
proportion of its assets that it may invest in the
obligations of a single issuer. The Fund may be more
susceptible to any single economic, political or regulatory
occurrence than a diversified investment company. The
investment of a large percentage of the Fund's assets in the
securities of a small number of issuers may cause the Fund's
share price to fluctuate more than that of a diversified
investment company.
BALANCED FUND The Balanced Fund seeks a favorable total rate of return
through current income and capital appreciation consistent
with preservation of capital, derived from investing in a
portfolio comprised of fixed income and equity securities.
The Balanced Fund will invest at least 80% of its net
assets in fixed income and equity securities, with at least
25% of its assets in fixed income senior securities.
Permissible investments for the Fund include: (i) corporate
bonds and debentures of U.S. or foreign issuers rated in the
highest four rating categories by an NRSRO or determined by
the Advisor to be of comparable quality at the time of
purchase; (ii) securities denominated in U.S. dollars or in
foreign currencies, issued or guaranteed as to principal and
interest by the U.S. Government, its agencies and
instrumentalities or issued or guaranteed by foreign
governments, their political subdivisions, agencies or
instrumentalities; (iii) short-term commercial paper of U.S.
or foreign issuers rated in the highest two rating
categories by an NRSRO or determined by the Advisor to be of
comparable quality at the time of investment; (iv) short-
term bank obligations consisting of
24
<PAGE>
certificates of deposit, time deposits and bankers'
acceptances of U.S. or foreign commercial banks or savings
and loan institutions with assets as of the end of their
most recent fiscal year of at least $500 million, or its
equivalent in appropriate foreign currency measured using
currency exchange rates in effect at the time of investment;
(v) obligations denominated in U.S. dollars or foreign
currencies of supranational entities rated in the highest
three rating categories by an NRSRO; (vi) mortgage-backed
securities rated in the highest two rating categories by an
NRSRO; (vii) asset-backed securities rated in the highest
three rating categories by an NRSRO; (viii) STRIPS and
receipts; (ix) repurchase agreements involving such
securities; (x) loan participations, in which the Fund will
not invest more than 5% of its total assets; (xi) guaranteed
investment contracts ("GICs") and bank investment contracts
("BICs") deemed by the Advisor to be of investment grade;
(xii) swaps; (xiii) municipal notes rated in the highest two
rating categories by an NRSRO or, if unrated, determined by
the Advisor to be of comparable quality; and (xiv) municipal
bonds rated in the highest three rating categories by an
NRSRO or, if unrated, determined by the Advisor to be of
comparable quality. The Balanced Fund may invest up to 15%
of its assets in fixed income securities that are either
denominated in foreign currencies or issued by foreign
issuers, provided that assets invested in such securities
will not constitute more than 50% of the assets of the
Balanced Fund invested in fixed income securities.
The remainder of the Fund's assets will be invested in:
(i) common stocks; (ii) warrants to purchase common stocks;
(iii) debt securities convertible into common stocks; (iv)
preferred stocks convertible into common stocks; (v) U.S.
dollar denominated equity securities of foreign issuers
(including sponsored ADRs); (vi) foreign securities; and
(vii) equity options. The equity securities in which the
Fund will invest are listed on national securities exchanges
or actively traded in the over-the-counter market. The Fund
will invest, based on dividend paying characteristics and
growth potential, in equity securities of companies of all
sizes. There are no minimum rating criteria applicable to
convertible securities.
The Balanced Fund may enter into dollar roll transactions
with selected banks and broker-dealers.
The Balanced Fund is not subject to maturity
restrictions.
The Balanced Fund is also permitted to invest in options
and futures (for hedging purposes only), engage in
securities lending, acquire floating and variable rate
securities and purchase securities on a when-issued basis
where the purchase is for investment in the securities, not
for leveraging, and subject to the investment restrictions
described above.
FIXED INCOME The Fixed Income Fund seeks a high level of total return
FUND relative to funds with like investment objectives, from
income and, to a lesser degree, capital appreciation derived
from investing in a portfolio consisting primarily of
quality intermediate- and long-term fixed income securities.
25
<PAGE>
The Fixed Income Fund will invest as fully as feasible
(and at least 65% of its assets) in the following fixed
income securities: (i) corporate bonds and debentures rated
in the highest four rating categories by an NRSRO or, if
unrated, determined by the Advisor to be of comparable
quality at the time of purchase; (ii) obligations issued or
guaranteed as to principal and interest by the U.S.
Government and its agencies and instrumentalities; (iii)
short-term commercial paper rated in the highest two rating
categories by an NRSRO or, if unrated, determined by the
Advisor to be of comparable quality at the time of
investment; (iv) short-term bank obligations rated in the
highest two rating categories by an NRSRO, including
certificates of deposit, time deposits, and bankers'
acceptances of U.S. commercial banks or savings and loan
institutions with assets of at least $500 million as of the
end of their most recent fiscal year; (v) U.S. dollar
denominated securities issued or guaranteed by foreign
governments, their political subdivisions, agencies or
instrumentalities; (vi) U.S. dollar denominated obligations
of supranational entities rated in the highest three rating
categories by an NRSRO; (vii) mortgage-backed securities
rated in the highest two rating categories by an NRSRO;
(viii) asset-backed securities rated in the highest three
rating categories of an NRSRO; (ix) STRIPS and receipts
evidencing separately traded interest and principal
component parts of U.S. Government obligations ("Receipts");
(x) repurchase agreements involving such securities; (xi)
loan participations, in which the Fund will not invest more
than 5% of its total assets; (xii) GICs; (xiii) BICs; (xiv)
swaps; (xv) municipal notes rated in the highest two rating
categories by an NRSRO or, if unrated, determined by the
Advisor to be of comparable quality; and (xvi) municipal
bonds rated in the highest three rating categories by an
NRSRO or, if unrated, determined by the Advisor to be of
comparable quality.
There are no restrictions on the average maturity of the
Fund or on the maturity of any single instrument. Maturities
may vary widely depending on the Advisor's assessment of
interest rate trends and other economic and market factors.
The estimated dollar-weighted average portfolio maturity of
the Fund is approximately eight years.
Any remaining assets of the Fund may be invested in
variable and floating rate obligations, dollar rolls,
forward commitments, when-issued securities, and securities
of foreign issuers. In addition, the Fund may lend the
securities in which it is invested. The Fund may invest in
options and futures for hedging purposes only.
INTERMEDIATE The Intermediate Government Fixed Income Fund seeks a high
GOVERNMENT level of total return relative to funds with like investment
FIXED INCOME objectives, consistent with preservation of capital from
FUND income and, to a lesser degree, capital appreciation,
derived from investing in a portfolio consisting of short-
and intermediate-term U.S. Government securities.
The Intermediate Government Fixed Income Fund will invest
100% of its total assets in government securities, which
include obligations issued or guaranteed as to principal and
interest by the U.S. Government and its agencies and
instrumentalities.
26
<PAGE>
Normally, the Fund will maintain an average weighted
maturity of 3 to 10 years; under certain circumstances,
however, the average weighted maturity may fall below 3
years. The Fund may invest in options and futures for
hedging purposes only.
TAX-EXEMPT The Tax-Exempt Fixed Income Fund seeks a high level of total
FIXED INCOME return, relative to funds with like investment objectives,
FUND consistent with preservation of capital, from income derived
from investing in a portfolio consisting primarily of
securities that are exempt from federal income tax and not
subject to taxation as a preference item for purposes of the
federal alternative minimum tax.
The Tax-Exempt Fixed Income Fund will invest as fully as
feasible (at least 65% of the value of its total assets) in
fixed income securities 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, rated in the highest four
rating categories by an NRSRO or, if unrated, determined by
the Advisor to be of comparable quality, and will invest at
least 80% of its net assets in comparably-rated fixed income
securities the interest on which is exempt from federal
income tax and which are not subject to taxation as a
preference item for purposes of the federal alternative
minimum tax.
The remainder of the Fund's assets may be invested in:
(i) short-term, tax-exempt commercial paper rated in the
highest two rating categories by an NRSRO or, if unrated,
determined by the Advisor to be of comparable quality at the
time of investment; (ii) municipal notes rated in the
highest two rating categories by an NRSRO or, if unrated,
determined by the Advisor to be of comparable quality; (iii)
fixed income options and futures; (iv) asset-backed
securities; (v) Receipts; (vi) securities issued or
guaranteed by the U.S. Government or its agencies; and (vii)
corporate bonds rated in one of the three highest categories
by an NRSRO.
The Fund will not invest more than 10% of its total
assets in restricted securities.
There are no restrictions on the average maturity of the
Fund or the maturity of any single instrument. Maturities
may vary widely depending on the Advisor's assessment of
interest rate trends and other economic and market factors.
The Fund may invest in options and futures for hedging
purposes only.
GLOBAL FIXED The Global Fixed Income Fund seeks a high level of total
INCOME FUND return relative to funds with like investment objectives,
measured in U.S. dollar terms, from income and capital
appreciation derived from investing in a portfolio
consisting of investment quality fixed income securities
denominated in foreign currencies.
The Global Fixed Income Fund will invest as fully as
feasible (at least 65% of its assets) in investment quality
fixed income securities of issuers in at least three of the
following countries: Austria, Australia, Belgium, Canada,
Switzerland, Germany, Denmark, Spain, Finland, United
Kingdom, Italy, Ireland, Japan, Luxembourg, The Netherlands,
Sweden, New Zealand, France, Norway, and the United States.
27
<PAGE>
The Fund strives to take maximum advantage of financial
and economic developments and currency fluctuations. All
investments will be in high quality securities denominated
in various currencies, including the European Currency Unit,
and listed on stock exchanges of major industrialized
countries. At least 50% of investments will be made in
government bonds or in bonds issued by government-backed
institutions (but no more than 25% of the Fund's assets will
be invested in securities of governmental issuers in any one
country). Investments in non-government bonds will be rated
in one of the highest four rating categories by an NRSRO.
Fixed income securities consist of: (i) corporate bonds
and debentures rated in the highest four rating categories
by an NRSRO or, if unrated, determined by the Advisor to be
of comparable quality at the time of purchase; (ii) short-
term commercial paper rated in the highest two rating
categories by an NRSRO or, if unrated, determined by the
Advisor to be of comparable quality at the time of
investment; (iii) securities issued or guaranteed by foreign
governments, their political subdivisions, agencies or
instrumentalities; (iv) obligations of supranational
entities; (v) repurchase agreements involving such
securities; (vi) loan participations, in which the Fund will
not invest more than 5% of its total assets; and (vii)
swaps, fixed income options and futures.
Any remaining Fund assets will be invested in: (i)
securities denominated in U.S. dollars or foreign currencies
comparable in quality to the fixed income instruments
described above; (ii) obligations issued or guaranteed as to
principal and interest by the U.S. Government or its
agencies and instrumentalities; (iii) short-term bank
obligations, including certificates of deposit, time
deposits, and bankers' acceptances of U.S. or foreign
commercial banks or savings and loans institutions with
assets as of the end of their most recent fiscal year of at
least $500 million or its equivalent in appropriate foreign
currency measured using currency exchange rates in effect at
the time of investment; (iv) mortgage-backed securities
rated in the highest two rating categories by an NRSRO; (v)
asset-backed securities rated in the highest three rating
categories by an NRSRO; (vi) Receipts; (vii) GICs; and
(viii) BICs.
There are no restrictions on the average maturity of the
Fund or on the maturity of any single instrument. Maturities
may vary widely depending on the Advisor's assessment of
interest rate trends and other economic and market factors.
The Fund may invest in options and futures for hedging
purposes only.
LIMITED The Limited Volatility Fixed Income Fund seeks a high level
VOLATILITY of current income, consistent with relative stability of
FIXED INCOME principal, derived from investing in a portfolio consisting
FUND primarily of short- and intermediate-term fixed income
securities.
The Limited Volatility Fixed Income Fund will invest as
fully as feasible (at least 65% of its assets) in the
following short- and intermediate-term taxable fixed income
obligations: (i) corporate bonds and debentures rated in the
highest four rating categories by an NRSRO or, if unrated,
determined by the Advisor to be of comparable quality at the
28
<PAGE>
time of purchase; (ii) obligations issued or guaranteed as
to principal and interest by the U.S. Government and its
agencies and instrumentalities; (iii) short-term commercial
paper rated in the highest two rating categories by an NRSRO
or, if unrated, determined by the Advisor to be of
comparable quality at the time of purchase; (iv) short-term
bank obligations: certificates of deposit, time deposits,
and bankers' acceptances of U.S. commercial banks or savings
and loans institutions with assets of at least $500 million
as of the end of their most recent fiscal year; (v) U.S.
dollar denominated securities issued or guaranteed by
foreign governments, their political subdivisions, agencies
or instrumentalities; (vi) U.S. dollar denominated
obligations of supranational entities rated in the highest
three rating categories by an NRSRO; (vii) mortgage-backed
securities rated in the highest two rating categories by an
NRSRO; (viii) asset-backed securities rated in the highest
three rating categories by an NRSRO; (ix) Receipts; (x)
repurchase agreements involving such securities; (xi) swaps;
(xii) municipal notes rated in the highest two rating
categories by an NRSRO or, if unrated, determined by the
Advisor to be of comparable quality; and (xiii) municipal
bonds rated in the highest three rating categories by an
NRSRO or, if unrated, determined by the Advisor to be of
comparable quality. The Fund will also invest in fixed
income options and futures for hedging purposes only.
The Fund may also invest in dollar roll transactions,
variable and floating rate obligations, forward commitments,
when-issued securities, and securities of foreign issuers.
In addition, the Fund may lend the securities in which it is
invested under certain conditions.
The Advisor considers short- and intermediate-term
obligations to be obligations having maturities of more than
two years but less than five years. The dollar-weighted
average maturity of the Fund will be less than six years.
The Advisor may shorten the average maturity substantially,
as a temporary defensive position, in anticipation of a
change in the interest rate environment.
TREASURY MONEY The Treasury Money Market Fund seeks to preserve principal
MARKET FUND value and maintain a high degree of liquidity while
providing current income by investing exclusively in U.S.
Treasury obligations.
The Treasury Money Market Fund invests in bills, notes,
and bonds issued by the U.S. Treasury and separately traded
interest and principal component parts of such obligations
that are transferable through the Federal Book Entry System
(such component parts of obligations are commonly known as
"STRIPS" and all of the foregoing obligations are referred
to herein collectively as "U.S. Treasury Obligations").
The Fund's investments in STRIPS will be limited to
components with maturities of less than 397 days. Investing
in these securities entails certain risks, including that
interest components may be more volatile in value than
comparable maturity Treasury bills, as further described in
"Description of Permitted Investments and Risk Factors." The
Fund will invest primarily in U.S. Treasury Obligations
other than STRIPS.
29
<PAGE>
GOVERNMENT The Government Money Market Fund seeks to provide as high a
MONEY MARKET level of current income as is consistent with preservation
FUND of capital and liquidity by investing in obligations of the
U.S. Government and its agencies and instrumentalities.
The Government Money Market Fund invests exclusively in
high quality money market instruments denominated in U.S.
dollars consisting of (i) U.S. Treasury Obligations; (ii)
securities issued or guaranteed by the U.S. Government or
its agencies and instrumentalities (e.g., Government
National Mortgage Association, Federal National Mortgage
Association, Federal Home Loan Mortgage Corporation, Federal
Land Bank); and (iii) repurchase agreements involving such
obligations.
MONEY MARKET The Money Market Fund (formerly known as the Taxable Money
FUND Market Fund) seeks to provide as high a level of current
income as is consistent with the preservation of capital and
liquidity by investing exclusively in high quality money
market instruments.
The Money Market Fund invests exclusively in the
following: (i) U.S. Treasury Obligations; (ii) obligations
issued or guaranteed as to principal and interest by the
U.S. Government or its agencies and instrumentalities; (iii)
commercial paper of U.S. and foreign issuers rated in the
two highest short-term rating categories of an NRSRO at the
time of investment or, if unrated, determined by the Advisor
to be of comparable quality; (iv) obligations (certificates
of deposit, time deposits, and bankers' acceptances) 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 $500 million or more as shown on their last
published financial statements at the time of investment;
(v) short-term corporate obligations of U.S. and foreign
issuers whose commercial paper the Fund may purchase; (vi)
repurchase agreements involving such obligations; (vii)
obligations of supranational entities; (viii) loan
participations; (ix) receipts evidencing separately traded
interest and principal component parts of U.S. Government
obligations; (x) standby commitments; and (xi) municipal
securities. The Fund 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.
TAX-EXEMPT The Tax-Exempt Money Market Fund seeks to preserve principal
MONEY MARKET value and maintain a high degree of liquidity while
FUND providing current income exempt from federal income tax and
not included as a preference item under the alternative
minimum tax.
The Tax-Exempt Money Market Fund invests at least 80% of
its total assets in eligible securities 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 bond counsel for the
issuer, is exempt from federal income tax (collectively,
"Municipal Securities"). The Fund will purchase municipal
bonds, municipal notes and tax-exempt commercial paper rated
in the two highest short-term rating categories by an NRSRO
in accordance with SEC regulations
30
<PAGE>
at the time of investment or, if unrated, determined by the
Advisor to be of comparable quality.
The Advisor has discretion to invest up to 20% of the
Fund's assets in the aggregate in taxable money market
instruments (including repurchase agreements) and securities
subject to the alternative minimum tax.
GENERAL
INVESTMENT
POLICIES _______________________________________________________________________
THE EQUITY AND Each Fund will invest in equity securities only if they are
BALANCED FUNDS listed on national securities exchanges or actively traded
in the over-the-counter market. Each Fund may invest in
convertible securities whether or not they are listed on
national securities exchanges.
Each Fund will invest not more than 10% of its total
assets in restricted securities. A Fund may invest up to 5%
of its assets in restricted securities that the Advisor
determines are liquid. Each Fund will not invest more than
15% of its total assets in illiquid securities.
A Fund may enter into futures contracts transactions only
to the extent that obligations under such contracts
represent less than 20% of the Fund's assets. The aggregate
value of option positions may not exceed 10% of a Fund's net
assets as of the time such options are entered into by a
Fund.
The Funds may temporarily reduce their equity holdings
for defensive purposes in response to adverse market
conditions and invest in domestic, Eurodollar and foreign
and short-term money market instruments.
THE FIXED Each Fund may purchase mortgage-backed securities issued or
INCOME AND guaranteed as to payment of principal and interest by the
BALANCED FUNDS U.S. Government or its agencies or instrumentalities and
mortgage-backed securities issued by non-governmental
issuers that are rated in the highest two rating categories
of an NRSRO.
The Fixed Income Fund, Intermediate Government Fixed
Income Fund, Limited Volatility Fixed Income Fund and
Balanced Fund may enter into dollar roll transactions with
selected banks and broker-dealers.
The quality standards of debt securities and other
obligations as described for the Funds must be satisfied at
the time an investment is made. In the event that an
investment held by a Fund is assigned a lower rating or
ceases to be rated, the Advisor will promptly reassess
whether such security presents suitable credit risks and
whether the Fund should continue to hold the security or
obligation in its portfolio. If a portfolio security or
obligation no longer presents suitable credit risks or is in
default, the Fund will dispose of the security or obligation
as soon as reasonably practicable unless the Trustees of the
Trust determine that to do so is not in the best interest of
the Fund.
31
<PAGE>
In addition, a Fund may enter into futures contracts
transactions only to the extent that obligations under such
contracts represent less than 20% of the Fund's assets. The
aggregate value of option positions may not exceed 10% of a
Fund's net assets as of the time such options are entered
into by a Fund. No more than 15% of a Fund's net assets will
be invested in illiquid securities.
THE MONEY Each Money Market Fund intends to comply with regulations of
MARKET FUNDS the SEC applicable to funds using the amortized cost method
for calculating net asset value found in Rule 2a-7 under the
1940 Act. These regulations impose certain quality, maturity
and diversification restraints on investments by the Funds.
Under these regulations, the Funds will invest only in U.S.
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. These
constraints effectively preclude the Funds from investing in
securities with interest rates as high as those of
securities that may be acquired by Funds that are permitted
to buy lower rated or longer term securities. For a further
discussion of these rules, see the "Description of Permitted
Investments and Risk Factors--Restraints on Investments by
Money Market Funds".
Each Money Market Fund will not invest more than 10% of
its assets in illiquid securities.
ALL FUNDS All Funds may invest in variable and floating rate
obligations and may purchase securities on a when-issued
basis. A Fund (except the Money Market Funds) may enter into
futures contracts and options on futures for bona fide
hedging purposes only.
In addition, each Fund (with the exception of the
Treasury Money Market Fund) reserves the right to engage in
securities lending.
There will be no limit to the percentage of portfolio
securities that a Fund may purchase subject to a standby
commitment, but the amount paid directly or indirectly for a
standby commitment held by the Fund will not exceed 1/2 of
1% of the value of the total assets of the Fund.
For temporary defensive purposes when the Advisor
determines that market conditions warrant, the Equity Funds,
Fixed Income Funds and Balanced Fund may invest up to 100%
of its assets in money market instruments. To the extent a
Fund is investing for temporary defensive purposes, the Fund
will not be pursuing its investment objective.
RATINGS NRSROs provide ratings for certain instruments in which the
Funds may invest. For example, bonds rated in the fourth
highest rating category have an adequate capacity to pay
principal and interest but may have speculative
characteristics as well.
For a description of ratings, see the Statement of
Additional Information.
32
<PAGE>
CERTAIN RISK FACTORS ___________________________________________________________
The investment policies of each Fund entail certain risks
and considerations of which an investor should be aware.
Foreign The International Equity, TransEurope, Latin America Equity,
Securities Asian Tigers and Global Fixed Income Funds will, and certain
other Funds may, invest in securities of foreign issuers.
Securities of foreign issuers are subject to certain risks
not typically associated with domestic securities,
including, among other risks, changes in currency rates and
in exchange control regulations, costs in connection with
conversions between various currencies, limited publicly
available information regarding foreign issuers, lack of
uniformity in accounting, auditing and financial standards
and requirements, greater securities market volatility, less
liquidity of securities, less government supervision and
regulations of securities markets, withholding taxes and
changes in taxes on income on securities, and possible
seizure, nationalization or expropriation of the foreign
issuer or foreign deposits.
Certain Latin American countries are among the largest
debtors to commercial banks and foreign governments. Trading
in Sovereign Debt involves a high degree of risk, since the
governmental entity that controls the repayment of Sovereign
Debt may not be willing or able to repay the principal
and/or interest of such debt obligations when it becomes
due, due to factors such as debt service burden, political
constraints, cash flow situation and other national economic
factors. As a result, Latin American governments may default
on their Sovereign Debt, which may require holders of such
Sovereign Debt to participate in debt rescheduling or
additional lending to defaulting governments. There is no
bankruptcy proceeding by which defaulted Sovereign Debt may
be collected in whole or in part.
Investments in securities of foreign issuers are
frequently denominated in foreign currencies and the value
of the Fund's assets measured in U.S. dollars may be
affected favorably or unfavorably by changes in currency
rates and in exchange control regulations, and the Fund may
incur costs in connection with conversions between various
currencies. The Fund may enter into forward foreign currency
contracts as a hedge against possible variations in foreign
exchange rates or to hedge a specific security transaction
or portfolio position. Currently, only a limited market, if
any, exists for hedging transactions relating to currencies
in most Latin American markets. This may limit a Fund's
ability to effectively hedge its investments in Latin
American markets.
33
<PAGE>
INVESTMENT
LIMITATIONS ____________________________________________________________________
No Equity, Fixed Income or Balanced Fund may:
1. Purchase securities of any issuer (except securities
issued or guaranteed by the United States, its agencies
or instrumentalities and repurchase agreements involving
such securities) if as a result more than 5% of the total
assets of the Fund would be invested in the securities of
such issuer or more than 10% of the outstanding voting
securities of such issuer would be owned by the Fund.
This restriction applies to 75% of the Fund's assets, and
does not apply to the Latin America Equity or Global
Fixed Income Funds.
2. Purchase any securities which would cause more than 25%
of the total assets of the Fund to be invested in the
securities of one or more issuers conducting their
principal business activities in the same industry,
provided that this limitation does not apply to
investments in the obligations issued or guaranteed by
the U.S. Government or its agencies and instrumentalities
and repurchase agreements involving such securities. 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; and (iii) supranational entities will
be considered to be a separate industry.
3. Make loans, except that a Fund 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.
No Money Market Fund may:
1. Purchase securities of any issuer (except securities
issued or guaranteed by the United States, its agencies
or instrumentalities and repurchase agreements involving
such securities) if, as a result, more than 5% of the
total assets of the Fund would be invested in the
securities of such issuer or more than 10% of the
outstanding voting securities of such issuer would be
owned by the Fund. Each Money Market Fund, except the
Tax-Exempt Money Market Fund, may invest up to 25% of its
assets in securities of a single issuer for a period of
up to three business days if such securities qualify as
"first tier securities" under applicable SEC Rules.
2. Purchase any securities which would cause more than 25%
of the total assets of the Fund to be invested in the
securities of one or more issuers conducting their
principal business activities in the same industry or
securities the interest upon which is paid from revenue
of similar type industrial development projects, provided
that this limitation does not apply to (i) investments in
obligations issued or guaranteed by the U.S. Government
or its agencies and instrumentalities and in repurchase
agreements involving such securities; and (ii)
obligations issued by domestic branches of U.S. banks or
U.S.
34
<PAGE>
.....................................
[SYMBOL INVESTMENT
APPEARS ADVISOR
HERE]
A Fund's investment advisor manages
the investment activities and is
responsible for the performance of
the Fund. The advisor conducts
investment research, executes
investment strategies based on an
assessment of economic and market
conditions, and determines which
securities to buy, hold or sell.
.....................................
branches of foreign banks subject to the same regulations as
U.S. banks; or (iii) tax-exempt securities issued by
governments or political subdivisions of governments. For
purposes of this limitation, (i) loan participations are
considered to be issued by both the issuing bank and the
underlying corporate borrower; (ii) utility companies will
be divided according to their services, for example, gas,
gas transmission, electric and telephone will each be
considered a separate industry; (iii) financial service
companies will be classified according to the end users of
their services, for example, automobile finance, bank
finance and diversified finance will each be considered a
separate industry; and (iv) supranational entities will be
considered to be a separate industry.
3. Make loans, except that a Fund 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.
The foregoing percentages will apply at the time of the
purchase of a security. Additional fundamental and non-
fundamental investment limitations are set forth in the
Statement of Additional Information.
THE ADVISOR ____________________________________________________________________
The Trust and LaSalle Street Capital Management, Ltd. (the
"Advisor"), 10 South LaSalle Street, Suite 3701, Chicago,
Illinois 60603 have entered into an advisory agreement (the
"Advisory Agreement"). Under the Advisory Agreement, the
Advisor makes the investment decisions for the assets of the
Funds and continuously reviews, supervises and administers the
Funds' investment programs, subject to the supervision of, and
policies established by, the Trustees of the Trust.
The Advisor is entitled to a fee, which is calculated daily
and paid monthly, at an annual rate of .80% of the average
daily net assets of the Value, Growth, Small Cap and Global
Fixed Income Funds; 1.00% of the average daily net assets of
the International Equity, TransEurope, Latin America Equity
and Asian Tigers Funds; .70% of the average daily net assets
of the Balanced Fund; .60% of the average daily net assets of
the Fixed Income, Intermediate Government Fixed Income, Tax-
Exempt Fixed Income and Limited Volatility Fixed Income Funds;
.35% of the average daily net assets of the Treasury Money
Market, Money Market and Tax-Exempt Money Market Funds; and
.20% of the average daily net assets of the Government Money
Market Fund. The Advisor may voluntarily waive a portion of
its fee in order to limit the total operating expenses of the
Funds. The Advisor reserves the right, in its sole discretion,
to terminate this voluntary fee waiver at any time. The
advisory fee for the Value, Growth, Small Cap, International
Equity, TransEurope, Latin America Equity, Asian Tigers and
35
<PAGE>
Global Fixed Income Funds is higher than those paid by most
mutual funds, but is consistent with those paid by most
mutual funds with similar objectives and policies.
For the fiscal year ended December 31, 1995, the Advisor
received an advisory fee of .80% for the Value Fund, .80%
for the Growth Fund, .80% for the Small Cap Fund, .70% for
the Balanced Fund, 1.00% for the International Equity Fund,
1.00% for the Asian Tigers Fund, .51% for the Fixed Income
Fund, .51% for the Intermediate Government Fixed Income
Fund, .48% for the Tax-Exempt Fixed Income Fund, .80% for
the Global Fixed Income Fund, .20% for the Tax-Exempt Money
Market Fund, .20% for the Treasury Money Market Fund, .20%
for the Government Money Market Fund and .21% for the Money
Market Fund. The TransEurope Fund, Latin America Equity Fund
and Limited Volatility Fixed Income Fund had not commenced
operations at fiscal year end.
LaSalle Street Capital Management, Ltd. was organized in
March, 1991, under the laws of the state of Delaware. The
Advisor manages assets for common and collective trusts,
corporations, unions, governments, insurance companies and
charitable organizations, and provides investment advisory
services to LaSalle National Trust, N.A. As of December 31,
1995, total assets under management by the Advisor and
LaSalle National Trust, N.A. were approximately $7.1
billion.
The Advisor is a wholly-owned subsidiary of LaSalle
National Trust, N.A., LaSalle National Trust, N.A.
administers $21.7 billion in assets. LaSalle National Trust,
N.A. is a subsidiary of LaSalle National Corporation, a bank
holding company. The Advisor is an indirect wholly-owned
subsidiary of ABN AMRO Holding N.V., a Netherlands company.
Jac A. Cerney, Vice President of the Advisor, has served
as portfolio manager for the Value and Balanced Funds since
their inception. Mr. Cerney has been associated with the
Advisor and its predecessor since April, 1990.
Keith Dibble, Senior Vice President of the Advisor, has
served as portfolio manager for the Growth Fund since its
inception. Mr. Dibble has been associated with the Advisor
and its predecessor since 1987.
John F. Bonetti, Vice President of the Advisor, has
served as portfolio manager for the Small Cap Fund since
February, 1995. Mr. Bonetti has been associated with the
Advisor and its predecessor since 1989.
T. Brian Gidley, Vice President of the Advisor, has
served as portfolio manager for the Intermediate Government
Fixed Income Fund, Limited Volatility Fixed Income Fund,
Tax-Exempt Fixed Income Fund and Balanced Fund since their
inception. Mr. Gidley has been associated with the Advisor
since May, 1991.
Charles H. Self, III, Senior Vice President of the
Advisor, has served as portfolio manager for the Fixed
Income Fund since October, 1995. Mr. Self joined the Advisor
in October, 1995. He served as a Vice President with CSI
Asset Management from December, 1988 to July, 1995.
36
<PAGE>
THE SUB-ADVISOR ________________________________________________________________
ABN AMRO-NSM International Funds Management B.V. ("AANIFM"
or the "Sub-Advisor"), Foppingadreef 22, P.O. Box 246, 1000
EA Amsterdam, The Netherlands, serves as the investment sub-
advisor of the International Equity Fund, TransEurope Fund,
Asian Tigers Fund, Global Fixed Income Fund and Latin
America Equity Fund pursuant to a Sub-Advisory Agreement
with the Advisor. AANIFM is a holding company affiliate of
the Advisor. Under the Sub-Advisory Agreement, AANIFM
manages the Funds, selects investments and places all orders
for purchases and sales of the Funds' securities, subject to
the general supervision of the Trustees of the Trust and the
Advisor. AANIFM has approximately $618 million under
management, and manages two non-U.S. investment companies.
Gijs Dorresteijn, fund manager with the Sub-Advisor, has
served as portfolio manager for the International Equity
Fund since its inception. Mr. Dorresteijn has been
associated with the Sub-Advisor and/or its parent since
1979.
Alex Ng has served as portfolio manager for the Asian
Tigers Fund since July, 1995. Mr. Ng has been associated
with the Sub-Advisor and/or its parent since 1988. Mr. Ng
also serves as the Far East Director of Asset Management for
a Hong Kong-based affiliate of the Advisor.
Wypke Postma, portfolio manager for the TransEurope Fund
and Director of the Sub-Advisor, has been associated with
the Sub-Advisor and/or its parent since 1984.
Roy Scheepe serves as portfolio manager for the Global
Fixed Income Fund, and has worked with the Sub-Advisor since
October, 1993. Mr. Scheepe served as a portfolio manager
with ABN AMRO Bank Asia from 1989 to October, 1991 and as
director of ABN AMRO Bank Asset Management (Curacao) N.V.
from October, 1991 to October, 1993.
Mr. Jan-Wim Derks, an officer of the Sub-Advisor, has
served as portfolio manager for the Latin America Equity
Fund since its inception. Mr. Derks has served as a
Portfolio Manager within the ABN AMRO network since 1989.
For services provided and expenses incurred pursuant to
the Sub-Advisory Agreement, AANIFM is entitled to receive
from the Advisor a fee, which is computed daily and paid
quarterly, at the annual rate of .50% of the average daily
net assets of each of the International Equity Fund,
TransEurope Fund, Latin America Equity Fund and Asian Tigers
Fund, and .40% of the average daily net assets of the Global
Fixed Income Fund. The Sub-Advisor received fees from the
Advisor of .50% for the Asian Tigers Fund and International
Equity Fund and .40% for the Global Fixed Income Fund for
the fiscal year ended December 31, 1995.
THE ADMINISTRATOR ______________________________________________________________
SEI Financial Management Corporation (the "Administrator"),
680 East Swedesford Road, Wayne, Pennsylvania, 19087, a
wholly-owned subsidiary of SEI Corporation ("SEI"), and the
Trust are parties to an administration agreement (the
"Administration Agreement"). Under the terms of the
Administration Agreement, the Administrator provides the
Trust
37
<PAGE>
with administrative services, other than investment advisory
services, including all regulatory reporting, necessary
office space, equipment, personnel, and facilities. The
Administrator also serves as shareholder servicing agent for
the Trust.
The Administrator is entitled to a fee, which is
calculated daily and paid monthly, at an annual rate of .15%
of the average daily net assets of the Funds.
The Administrator has voluntarily agreed to waive a
portion of its fee from the International Equity, Latin
America Equity, Asian Tigers, Global Fixed Income, Fixed
Income, Intermediate Fixed Income and Money Market Funds in
order to limit the total operating expenses of these Funds.
The Administrator reserves the right, in its sole
discretion, to terminate this waiver at any time.
THE TRANSFERAGENT ______________________________________________________________
DST Systems, Inc., 210 W. Tenth Street, Kansas City,
Missouri 64105, serves as the transfer agent, and dividend
disbursing agent for the Trust. Compensation for these
services is paid under a transfer agency agreement with the
Trust.
THE DISTRIBUTOR ________________________________________________________________
Rembrandt(R) Financial Services Company (the "Distributor"),
680 East Swedesford Road, Wayne, Pennsylvania 19087-1658, a
subsidiary of SEI Financial Services Company, and the Trust
are parties to a distribution agreement (the "Distribution
Agreement"). The Investor Class shares of the Trust have a
distribution plan dated December 31, 1992 (the "Investor
Class Plan"). As provided in the Investor Class Plan, the
Trust pays a fee of .25% of the average daily net assets of
the Investor Class shares of the Funds 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 LaSalle National
Trust, N.A.), savings and loan associations, insurance
companies, and 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 Investor Class Plan
is characterized as a compensation plan since the
distribution fee is paid to the Distributor without regard
to the distribution or shareholder service expenses incurred
by the Distributor or the amount of payments made to
financial institutions and intermediaries. The Funds may
also execute brokerage or other agency transactions through
an affiliate of the Advisor or through the Distributor for
which the affiliate or the Distributor receives
compensation.
It is possible that a financial institution may offer
different classes of shares of the Funds to its customers
and the shares of such customers may be assessed for
different distribution expenses with respect to different
classes of shares.
38
<PAGE>
PERFORMANCE ____________________________________________________________________
THE EQUITY, From time to time, the Funds may advertise yield and total
BALANCED AND return. These figures will be based on historical earnings,
FIXED INCOME and are not intended to indicate future performance. The
FUNDS yield of a Fund refers to the annualized income generated by
an investment in the Fund over a specified 30-day period.
The yield is calculated by assuming that the same amount of
income generated by the investment during that period is
generated in each 30-day period over one year, and is shown
as a percentage of the investment.
The total return of a Fund refers to the average
compounded rate of return on a hypothetical investment, net
of any sales charge imposed on Investor Class shares, for
designated time periods (including, but not limited to, the
period from which the Fund commenced operations through the
specified date), assuming that the entire investment is
redeemed at the end of each period and assuming the
reinvestment of all dividend and capital gain distributions.
The total return of a Fund may also be quoted as a dollar
amount or on an aggregate basis, an actual basis, without
inclusion of any sales charge, or with a reduced sales
charge in advertisements distributed to investors entitled
to a reduced sales charge.
THE MONEY From time to time a Fund may advertise its "current yield"
MARKET FUNDS and "effective compound yield". Both yield figures are based
on historical earnings and are not intended to indicate
future performance. The "current yield" of a Fund refers to
the income generated by an investment in the Fund over a
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 compound yield" is calculated similarly, but when
annualized, the income earned by an investment in a Fund is
assumed to be reinvested. The "effective compound yield"
will be slightly higher than the "current yield" because of
the compounding effect of this assumed reinvestment. The
Tax-Exempt Money Market Fund may also advertise a "tax-
equivalent yield", which is calculated by determining the
rate of return that would have to be achieved on a fully
taxable investment to produce the after-tax equivalent of
the Tax-Exempt Money Market Fund's yield, assuming certain
tax brackets for a Shareholder.
ALL FUNDS A Fund may periodically compare its performance to that of
other mutual funds tracked by mutual fund rating services
(such as Lipper Analytical Securities Corp.) or by financial
and business publications and periodicals, broad groups of
comparable mutual funds or unmanaged indices which may
assume investment of dividends but generally do not reflect
deductions for administrative and management costs. A Fund
may quote services such as Morningstar, Inc., a service that
ranks mutual funds on the basis of risk-adjusted
performance, and Ibbotson Associates of Chicago, Illinois,
which provides historical returns of the capital markets in
the U.S. A Fund may use long-term performance of these
capital markets to demonstrate general long-term risk versus
reward scenarios and could include
39
<PAGE>
..........................
[SYMBOL TAXES
APPEARS
HERE]
You must pay
taxes on your
Fund's earnings,
whether you take
your payments in
cash or addi-
tional shares.
..........................
the value of a hypothetical investment in any of the capital
markets. A Fund may also quote financial and business
publications and periodicals as they relate to fund
management, investment philosophy, and investment techniques.
A Fund 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 the validity of a comparative benchmark.
Measures of volatility and correlation are calculated using
averages of historical data and cannot be precisely
calculated.
The performance of Trust Class shares will normally be
higher than for Investor Class shares because the Trust Class
is not subject to distribution expenses charged to the
Investor Class shares.
Additional performance information is set forth in the
1995 Annual Report to Shareholders, and is available upon
request and without charge by calling 1-800-443-4725.
The portfolio turnover rates for the Small Cap, Tax-Exempt
Fixed Income, Intermediate Government Fixed Income and Global
Fixed Income Funds for the fiscal year ended December 31,
1995 were 142%, 129%, 115% and 105%, respectively. A high
turnover rate will result in higher transaction costs and may
result in additional tax consequences for shareholders.
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 Fund
or its Shareholders. Accordingly, Shareholders are urged to
consult their tax advisors regarding specific questions as to
federal, state, and local income taxes. State and local tax
consequences on an investment in a Fund may differ from the
federal income tax consequences described below. Additional
information concerning taxes is set forth in the Statement of
Additional Information.
Tax Status of Each Fund is treated as a separate entity for federal income
the Funds tax purposes and is not combined with the Trust's other Funds.
Each Fund 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.
As long as each Fund qualifies for this special tax treatment,
it will be relieved of federal income tax on that part of its
net investment income and net capital gains (the
40
<PAGE>
..........................
[SYMBOL DISTRIBUTIONS
APPEARS
HERE]
The Fund distributes income
dividends and capital gains.
Income dividends represent the
earnings from the Fund's
investments; capital gains
distributions occur when
investments in the Fund are
sold for more than the
original purchase price.
..........................
excess of net long-term capital gain over net short-term
capital loss) which is distributed to Shareholders.
Tax Status of Each Fund will distribute all of its net investment income
Distributions (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 gains will be
distributed annually and will be taxed to Shareholders as long-
term capital gains, regardless of how long the Shareholder has
held shares and regardless of whether the distributions are
received in cash or in additional shares. Each Fund will make
annual reports to Shareholders of the federal income tax status
of all distributions.
Certain securities purchased by a Fund (such as STRIPS,
TRs, TIGRs and CATS, defined in "Description of Permitted
Investments and Risk Factors"), are sold at original issue
discount, and thus do not make periodic cash interest
payments. Each Fund will be required to include as part of
its current income the imputed interest on such obligations
even though the Fund has not received any interest payments
on such obligations during that period. Because each Fund
distributes all of its net investment income to its
Shareholders, a Fund may have to sell portfolio securities to
distribute such imputed income, which may occur at a time
when the Advisor would not have chosen to sell such
securities and which may result in a taxable gain or loss.
Income received on U.S. obligations is exempt from tax at
the state level when received directly by a Fund and may be
exempt, depending on the state, when received by a
Shareholder as income dividends from the Fund, provided
certain State-specific conditions are satisfied. Each Fund
will inform Shareholders annually of the percentage of income
and distributions derived from U.S. obligations. Shareholders
should consult their tax advisor to determine whether any
portion of the income dividends received from a Fund is
considered tax exempt in their particular state.
Dividends declared by a Fund 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
Fund and received by the Shareholder on December 31 of that
year, if paid by the Fund at any time during the following
January.
Each Fund intends to make sufficient distributions prior
to the end of each calendar year to avoid liability for the
federal excise tax applicable to regulated investment
companies.
Investment income received by a Fund from sources within
foreign countries may be subject to foreign income taxes
withheld at the source. The International Equity Fund,
TransEurope Fund, Latin America Equity Fund, Asian Tigers
Fund and Global Fixed Income
41
<PAGE>
Fund expect to be able to elect to treat Shareholders as
having paid their proportionate share of such foreign taxes.
As a general rule, dividends (not capital gain
distributions) paid by a Fund, to the extent derived from
dividends received from domestic corporations, will,
provided certain conditions are met, qualify for the
dividends received deduction for corporate Shareholders.
Dividends and distributions of capital gains paid by the
Fixed Income Funds and distributions of capital gains paid
by the Balanced Fund will not qualify for the dividends
received deduction for corporate Shareholders.
Each of the Tax-Exempt Fixed Income Fund and Tax-Exempt
Money Market Fund intends to qualify to pay "exempt interest
dividends" by satisfying the Code's requirement that at the
close of each quarter of its taxable year at least 50
percent of the value of its total assets consists of
obligations, the interest on which is exempt from federal
income tax. So long as this and certain other requirements
are met, dividends consisting of such Funds' net tax-exempt
interest income will be exempt interest dividends, which are
exempt from federal income tax in the hands of the
Shareholders of the Fund, but may have alternative minimum
tax consequences. See the Statement of Additional
Information.
Current federal income tax laws limit 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 Tax-Exempt Fixed Income Fund and the Tax-
Exempt Money Market Fund to purchase sufficient amounts of
tax-exempt securities to satisfy the Code's requirements for
the payment of "exempt interest dividends." Current federal
tax law also makes interest on certain tax-exempt bonds a
tax preference item for purposes of the individual and
corporate alternative minimum tax. Accordingly, municipal
funds may not be an appropriate investment for persons
(including corporations and other business entities) who are
"substantial users" of facilities financed by private
activity bonds or certain industrial development bonds.
"Substantial user" is defined generally as including a "non-
exempt person" who regularly uses in a trade or business a
part of a facility financed from the proceeds of industrial
development bonds.
Interest on indebtedness incurred by Shareholders to
purchase or carry shares of the Tax-Exempt Fixed Income Fund
and the Tax-Exempt Money Market Fund is generally not
deductible for federal income tax purposes.
Each sale, exchange, or redemption of Fund shares is a
taxable event to the Shareholder.
42
<PAGE>
....................................
[SYMBOL BUY, EXCHANGE AND
APPEARS SELL REQUESTS ARE IN
HERE] "GOOD ORDER" WHEN:
. The account number and Fund
name are shown
. The amount of the transaction
is specified in dollars or
shares
. Signatures of all owners
appear exactly as they are
registered on the account
. Any required signature
guarantees (if applicable)
are included
. Other supporting legal
documents (as necessary) are
present
....................................
ADDITIONAL
INFORMATION ABOUT
DOING BUSINESS
WITH US ________________________________________________________________________
Business Days You may buy, sell or exchange shares on days on which the New
York Stock Exchange is open for business (a "Business Day").
However, shares of a Money Market Fund cannot be purchased by
Federal Reserve wire on federal holidays restricting wire
transfers.
A purchase order for Trust Class shares of the Equity,
Balanced and Fixed Income Funds will be effective as of the day
received by the Transfer Agent if the Transfer Agent receives
the order before 4:00 p.m., Eastern time. The purchase price of
Trust Class shares of the Fund is the net asset value next
determined after a purchase order is effective. An investor in
Trust Class shares of a Fund may not purchase shares by check.
A purchase order for Investor Class shares of the Equity,
Balanced and Fixed Income Funds will be effective as of the
Business Day received by the Transfer Agent if the Transfer
Agent receives the order and payment before 4:00 p.m., Eastern
time. However, an order may be cancelled if the Custodian does
not receive federal funds before 4:00 p.m., Eastern time on the
next Business Day, and the investor could be liable for any
fees or expenses incurred by the Trust. The purchase price of
Investor Class shares of a Fund is the net asset value next
determined after a purchase order is effective plus a sales
load.
A purchase order for Trust Class shares or Investor Class
shares of the Money Market Funds will be effective as of the
day received by the Transfer Agent and eligible to receive
dividends declared the same day if the Transfer Agent
receives the order and the Custodian receives federal funds
payment before 1:00 p.m., Eastern time on such day.
Otherwise, the purchase order will be effective the next
Business Day.
Minimum The minimum initial investment in the Investor Class shares
Investment is $2,000; however, the minimum investment may be waived at
the Distributor's discretion. All subsequent purchases must
be at least $100 . The Trust reserves the right to reject a
purchase order for Trust Class shares or Investor Class
shares when the Trust or the Transfer Agent determines that
it is not in the best interest of the Trust or its
shareholders to accept such order.
Maintaining a Due to the relatively high cost of handling small
Minimum investments, each Fund reserves the right to redeem, at net
Account asset value, the shares of any Shareholder if, because of
Balance redemptions of
43
<PAGE>
shares by or on behalf of any Shareholder, the account of
such Shareholder in any Fund has a value of less than
$1,000, the minimum initial purchase amount. Accordingly, an
investor purchasing shares of any Fund in only the minimum
investment amount may be subject to such involuntary
redemption if he or she thereafter redeems any of these
shares. Before any Fund 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 such Fund in an amount that will increase the value of
the account to at least $1,000. See "Purchase and Redemption
of Shares" in the Statement of Additional Information for
examples of when the right of redemption may be suspended.
Net Asset Value The purchase price of a share of the Funds is the net asset
value per share next computed after the order is received
and accepted by the Trust, plus any applicable sales charge.
The selling price of a share of the Funds is the net asset
value per share next determined after receipt of the request
for redemption in good order. The net asset value per share
of the Money Market Funds is calculated as of 1:00 p.m.,
Eastern time, each Business Day. The net asset value of the
Equity, Balanced and Fixed Income Funds is determined as of
the close of business of the New York Stock Exchange
(currently 4:00 p.m. Eastern time) each Business Day.
How the Net The net asset value per share of a Fund is determined by
Asset Value is dividing the total market value of the Fund's investments
Determined and other assets, less any liabilities, by the total number
of outstanding shares of the Fund. The Equity, Balanced and
Fixed Income Funds value their portfolio securities at the
last quoted sales price for such securities, or, if there is
no such reported sales price on the valuation date, at the
most recent quoted bid price. The investments of the Money
Market Funds will be valued using the amortized cost method
described in the Statement of Additional Information.
Pursuant to guidelines adopted and monitored by the Trustees
of the Trust, the Funds may use a pricing service to provide
market quotations. A pricing service may use a matrix system
of valuation to value fixed income securities which
considers factors such as securities prices, call features,
ratings, and developments related to a specific security.
Although the methodology and procedures for determining
net asset value are identical for both classes of a Fund,
the net asset value per share of such classes may differ
because of the distribution expenses charged to Investor
Class shares.
GENERAL INFORMATION ____________________________________________________________
The Trust The Trust was organized as a Massachusetts business trust
under a Declaration of Trust dated September 17, 1992, and
amended September 28, 1992 and October 20, 1992. The
Declaration of Trust permits the Trust to offer shares of
separate funds and different classes of each fund. The Trust
consists of the following funds: Money Market Fund,
44
<PAGE>
Government Money Market Fund, Treasury Money Market Fund,
Tax-Exempt Money Market Fund, Fixed Income Fund,
Intermediate Government Fixed Income Fund, Tax-Exempt Fixed
Income Fund, Global Fixed Income Fund, Limited Volatility
Fixed Income Fund, Latin America Equity Fund, Value Fund,
Growth Fund, Small Cap Fund, International Equity Fund,
TransEurope Fund, Asian Tigers Fund and Balanced Fund. All
consideration received by the Trust for shares of any fund
and all assets of such fund belong to that fund, and would
be subject to liabilities related thereto. The Trust
reserves the right to create and issue shares of additional
funds. As of December 31, 1995, the Latin America Equity,
Limited Volatility Fixed Income and TransEurope Funds had
not commenced operations.
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. See "Financial Highlights"
for more information regarding the Trust's expenses.
Trustees of the The management and affairs of the Trust are supervised by
Trust the Trustees under the laws governing business trusts in the
Commonwealth of Massachusetts. The Trustees have approved
contracts under which, as described above, certain companies
provide essential management, administrative and Shareholder
services to the Trust.
Voting Rights Each share held entitles the Shareholder of record to one
vote. Shareholders of each Fund or class will vote
separately on matters relating solely to that Fund or class.
As a Massachusetts business trust, the Trust is not required
to hold annual meetings of Shareholders, but meetings of
Shareholders will be held from time to time to seek approval
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 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 semi-
annually and audited financial statements annually. The
Trust furnishes periodic reports to Shareholders of record,
and, as necessary, proxy statements for Shareholder
meetings.
Shareholder Shareholder inquiries should be directed to the
Inquiries Administrator, 680 East Swedesford Road, Wayne,
Pennsylvania, 19087-1658, at 1-800-443-4725.
Dividends Substantially all of the net investment income (not
including capital gains) of the Value, Growth, Small Cap,
Balanced, Fixed Income, Intermediate Government Fixed
Income, Tax-Exempt Fixed Income and Limited Volatility Fixed
Income Funds is distributed in the form of monthly
dividends, and that of the International Equity, Latin
America Equity, TransEurope,
45
<PAGE>
Asian Tigers and Global Fixed Income Funds is distributed in
the form of dividends at least annually. Shareholders who
own shares at the close of business on the record date will
be entitled to receive the dividend. Currently, capital
gains of the Funds, if any, will be distributed at least
annually.
The net investment income (exclusive of capital gains) of
each of the Money Market Funds is distributed in the form of
dividends, which are declared daily and distributed monthly
to Shareholders. Currently, capital gains of the Funds, if
any, will be distributed at least annually.
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 Funds 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 Trust Class shares will typically be higher than
the dividends payable on the Investor Class shares because
of the distribution expenses charged to Investor Class
shares.
The Trust believes that as of February 15, 1996, LaSalle
National Trust, N.A. and its affiliates owned of record or
beneficially, substantially all of the Trust Class shares of
the Value, Growth, Small Cap, International Equity, Asian
Tigers, Balanced, Fixed Income, Intermediate Government
Fixed Income, Tax-Exempt Fixed Income, Global Fixed Income,
Treasury Money Market, Government Money Market, Money Market
and Tax-Exempt Money Market Funds. As a consequence, LaSalle
National Trust, N.A. may be deemed to "control" these Funds
within the meaning of the Investment Company Act.
Counsel and Morgan, Lewis & Bockius LLP serves as counsel to the Trust.
Auditors Ernst & Young LLP serves as the independent auditors of the
Trust.
Custodians CoreStates Bank, N.A., Broad and Chestnut Streets, P.O. Box
7618, Philadelphia, Pennsylvania 19101, acts as Custodian of
the Trust. Barclays Bank PLC, 75 Wall Street, New York, New
York 10265, serves as foreign Custodian of the Trust. The
Custodians hold cash, securities and other assets of the
Trust as required by the 1940 Act.
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DESCRIPTION OF
PERMITTED
INVESTMENTS AND
RISK FACTORS ___________________________________________________________________
The following is a description of certain of the permitted
investments and risk factors for the Funds:
American ADRs are securities, typically issued by a U.S. financial
Depositary institution (a "depositary"), that evidence ownership
Receipts interests in a security or a pool of securities issued by a
("ADRs") foreign issuer and deposited with the depositary. ADRs may
be available through "sponsored" or "unsponsored"
facilities. A sponsored facility is established jointly by
the issuer of the security underlying the receipt and a
depositary, whereas an unsponsored facility may be
established by a depositary without participation by the
issuer of the underlying security. Holders of unsponsored
depositary receipts generally bear all the costs of the
unsponsored facility. The depositary of an unsponsored
facility frequently is under no obligation to distribute
shareholder communications received from the issuer of the
deposited security or to pass through, to the holders of the
receipts, voting rights with respect to the deposited
securities.
Asset-Backed Asset-backed securities consist of securities secured by
Securities company receivables, truck and auto loans, leases and credit
(Non-mortgage) 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 purpose of owning such
assets and issuing such debt. A Fund may invest in other
asset-backed securities that may be created in the future if
the Advisor determines they are suitable.
Bankers' Bankers' acceptances are bills of exchange or time drafts
Acceptances 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.
Bank Investment BICs are contracts issued by U.S. banks and savings and loan
Contracts ("BICs")institutions. Pursuant to such contracts, a Fund makes cash
contributions to a deposit fund of the general account of
the bank or savings and loan institution. The bank or
savings and loan institution then credits to the Fund on a
monthly basis guaranteed interest at either a fixed,
variable or floating rate. Generally, BICs are not
assignable or transferable without the permission of the
issuing bank or savings and loan institution. For this
reason, BICs are considered to be illiquid investments.
Certificates of Certificates of deposit are interest bearing instrument with
Deposit a specific maturity. Certificates of deposit are issued by
banks and savings and loan institutions in exchange for the
deposit of funds and normally can be traded in the secondary
market prior to maturity. Certificates of deposit with
penalties for early withdrawal will be considered illiquid.
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Commercial Commercial paper is a term used to describe unsecured short-
Paper term promissory notes issued by banks, municipalities,
corporations and other entities. Maturities on these issues
vary from a few to 270 days.
Convertible Convertible securities are corporate securities that are
Securities exchangeable for a set number of shares of another security
at a prestated price. Convertible securities have
characteristics similar to both fixed income and equity
securities. Because of the conversion feature, the market
value of convertible securities tends to move together with
the market value of the underlying stock. The value of
convertible securities is also affected by prevailing
interest rates, the credit quality of the issuer, and any
call provisions.
Dollar Rolls Dollar roll transactions consist of the sale of mortgage-
backed securities to a bank or broker-dealer, together with
a commitment to purchase similar, but not necessarily
identical, securities at a future date. Any difference
between the sale price and the purchase price is netted
against the interest income foregone on the securities to
arrive at an implied borrowing (reverse repurchase) rate.
Alternatively, the sale and purchase transactions which
constitute the dollar roll can be executed at the same
price, with the Fund being paid a fee as consideration for
entering into the commitment to purchase. Dollar rolls may
be renewed after cash settlement and initially may involve
only a firm commitment agreement by the Fund to buy a
security.
If the broker-dealer to whom the Fund sells the security
becomes insolvent, the Fund's right to purchase or
repurchase the security may be restricted. Also, the value
of the security may change adversely over the term of the
dollar roll, such that the security that the Fund is
required to repurchase may be worth less than the security
that the Fund originally held.
Equity Investments in common stocks are subject to market risks
Securities 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
not affect a Fund's net asset value.
Fixed Income The market value of fixed income investments will change in
Securities 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 securities with longer maturities are also subject
to greater market fluctuations as a result of changes in
interest rates. Changes by NRSROs 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.
Forward Foreign A forward contract involves an obligation to purchase or
Currency sell a specific currency amount at a future date, agreed
Contracts upon by the parties, at a price set at the time of the
contract.
At the maturity of a forward contract, a Fund may either
sell a portfolio security and make delivery of the foreign
currency, or it may retain the security and terminate its
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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 Fund may
realize a gain or loss from currency transactions.
Futures Futures contracts provide for the future sale by one party
Contracts and and purchase by another party of a specified amount of a
Options on specific security at a specified future time and at a
Futures specified price. An option on a futures contract gives the
Contracts 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 Fund may use futures
contracts and related options for bona fide hedging
purposes, to offset 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 Fund 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. In addition, a Fund will only
sell covered futures contracts and options on futures
contracts.
Stock and bond index futures are futures contracts for
various stock and bond indices that are traded on registered
securities exchanges. Stock and bond index futures contracts
obligate 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 or bond
index at the close of the last trading day of the contract
and the price at which the agreement is made.
Eurodollar futures are U.S. dollar-denominated futures
contracts or options thereon which are linked to the London
Interbank Offered Rate ("LIBOR"), although foreign currency
denominated instruments are available from time to time.
Eurodollar futures contracts enable purchasers to obtain a
fixed rate for the lending of the funds and sellers to
obtain a fixed rate for borrowings.
No price is paid upon entering into futures contracts.
Instead, a Fund is required to deposit an amount of cash or
U.S. Treasury securities known as "initial margin."
Subsequent payments, called "variation margin," to and from
the broker, are made on a daily basis as the value of the
futures position varies (a process known as "marking to
market"). The margin is in the nature of a performance bond
or good-faith deposit on a futures contract.
In order to avoid leveraging and related risks, when a
Fund purchases futures contracts, it will collateralize its
position by depositing an amount of cash or cash
equivalents, equal to the market value of the futures
positions held, less margin deposits, in a segregated
account with the Trust's custodian. Collateral equal to the
current market value of the futures position will be marked
to market on a daily basis.
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
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may be an imperfect or no correlation between the changes in
market value of the securities held by a Fund 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.
Guaranteed GICs are contracts issued by U.S. insurance companies.
Investment Pursuant to such contracts, the Fund makes cash
Contracts contributions to a deposit fund of the insurance company's
("GICs") general account. The insurance company then credits to the
Fund on a monthly basis guaranteed interest at either a
fixed, variable or floating rate. Generally, GICs are not
assignable or transferable without the permission of the
issuing insurance companies. For this reason, GICs are
considered by a Fund to be illiquid investments.
Illiquid Illiquid securities are securities that cannot be disposed
Securities of within 7 business days at approximately the price at
which they are being carried on a Fund's books. An illiquid
security includes a demand instrument with a demand notice
period exceeding 7 days, if there is no secondary market for
such security, and repurchase agreements with durations (or
maturities) over 7 days in length.
Loan Loan participations are interests in loans to U.S.
Participations corporations which are administered by the lending bank or
agent for a syndicate of lending banks, and sold by the
lending bank or syndicate member ("intermediary bank"). In a
loan participation, the borrower corporation will be deemed
to be the issuer of the participation interest except to the
extent the Fund derives its rights from the intermediary
bank. Because the intermediary bank does not guarantee a
loan participation in any way, a loan participation is
subject to the credit risks generally associated with the
underlying corporate borrower. In the event of the
bankruptcy or insolvency of the corporate borrower, a loan
participation may be subject to certain defenses that can be
asserted by such borrower as a result of improper conduct by
the intermediary bank. In addition, in the event the
underlying corporate borrower fails to pay principal and
interest when due, the Fund may be subject to delays,
expenses and risks that are greater than those that would
have been involved if the Fund had purchased a direct
obligation of such borrower. Under the terms of a loan
participation, the Fund may be regarded as a creditor of the
intermediary bank, (rather than of the underlying corporate
borrower), so that the Fund may also be subject to the risk
that the intermediary bank may become insolvent. The
secondary market, if any, for these loan participations is
limited.
Mortgage-Backed Mortgage-backed securities are instruments that entitle the
Securities 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, balloon
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
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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 GNMA, FNMA and FHLMC. GNMA, FNMA and FHLMC
guarantee timely distributions of interest to certificate
holders. GNMA and FNMA also guarantee timely distributions
of scheduled principal. 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.
Private Pass-Through Securities: These are mortgage-
backed securities issued by a non-governmental entity, such
as a trust or corporation. These securities include
collateralized mortgage obligations ("CMOs") and real estate
mortgage investment conduits ("REMICs"). 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.
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.
Principal payments on the underlying mortgage assets may
cause CMOs to be retired substantially earlier then their
stated maturities or final distribution dates, resulting in
a loss of all or part of any premium paid.
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.
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
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of POs. SMBs are extremely sensitive to changes in interest
rates because of the impact thereon of prepayment of
principal on the underlying mortgage securities.
Municipal Municipal securities consist of (i) debt obligations issued
Securities 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 toll bridge for example. The payment of principal and
interest on private activity and industrial development
bonds generally is dependent solely on the ability of the
facility's user to meet its financial obligations and the
pledge, if any, of real and personal property so financed 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. Municipal bonds
include general obligation bonds, revenue or special
obligation bonds, private activity and industrial
development bonds.
Obligations of Supranational entities are entities established through the
Supranational joint participation of several governments, and include the
Entities Asian Development Bank, Inter-American Development Bank,
International Bank for Reconstruction and Development (World
Bank), African Development Bank, European Economic
Community, European Investment Bank and Nordic Investment
Bank. The governmental members, or "stockholders," usually
make initial capital contributions to the supranational
entity and in many cases are committed to make additional
capital contributions if the supranational entity is unable
to repay its borrowings.
Options A put option gives the purchaser the right to sell, and the
writer the obligation to buy, the underlying security at any
time during the option period. A call option gives the
purchaser the right to buy, and the writer the obligation to
sell, the underlying security at any time during the option
period. The premium paid to the writer is the consideration
for undertaking the obligations under the option contract.
A Fund 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 increase in the cost
of securities that the Fund may seek to purchase in the
future. A Fund 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 the Fund, loss of the premium paid may be
offset by an increase in the value of the Fund's securities
or by a decrease in the cost of acquisition of securities by
the Fund.
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A Fund may write covered put and 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 Fund 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 the Fund will realize as profit the
premium received for such option. When a call option of
which a Fund is the writer is exercised, the Fund 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 Fund is the writer is
exercised, the Fund 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 Fund 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 Fund 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 Fund
will be "covered," which means that the Fund will own an
equal amount of the underlying foreign currency. With
respect to put options on foreign currency written by a
Fund, the Fund will establish a segregated account with its
custodian bank consisting of cash or liquid, high grade debt
securities in an amount equal to the amount the Fund would
be required to pay upon exercise of the put.
A Fund 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. All options written on
indices must be covered. When a Fund writes an option on an
index, it will establish a segregated account containing
cash or liquid high grade debt securities with its custodian
in an amount at least
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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 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 Fund 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. A Fund may choose to terminate an
option position by entering into a closing transaction. The
ability of a Fund to enter into closing transactions depends
upon the existence of a liquid secondary market for such
transactions.
Receipts Receipts are interests in separately traded interest and
principal component parts of U.S. Treasury obligations that
are issued by banks and brokerage firms and are created by
depositing U.S. Treasury obligations into a special account
at a custodian bank. The custodian holds the interest and
principal payments for the benefit of the registered owners
of the certificates or receipts. The custodian arranges for
the issuance of the certificates or receipts evidencing
ownership and maintains the register. 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 amortized over the life of the
security, and such amortization will constitute the income
earned on the security for both accounting and tax purposes.
Because of these features, receipts may be subject to
greater price volatility than interest paying U.S. Treasury
obligations. See also "Taxes".
Repurchase Repurchase agreements are agreements by which a Fund obtains
Agreements 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. The Fund
or its agent will have actual or constructive possession of
the securities held as collateral for the repurchase
agreement. Collateral must be maintained at a value at least
equal to 100% of the purchase price. The Fund bears a risk
of loss in the event the other party defaults on its
obligations and the Fund is delayed or prevented from
exercising its right to dispose of the collateral securities
or if the Fund realizes a loss on the sale of the collateral
securities. A Fund will enter into repurchase agreements
only with financial institutions deemed to present minimal
risk of bankruptcy during the term of the agreement based on
established guidelines. Repurchase agreements are considered
loans under the 1940 Act, as well as for federal and state
income tax purposes.
Restraints on Investments by each Money Market Fund are subject to
Investments by limitations imposed under regulations adopted by the SEC.
Money Market Under these regulations, money market funds may acquire only
Funds 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
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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 short-term rating category or, if unrated,
determined to be of comparable quality ("second tier
security"). A security is not considered to be unrated if
its issuer has outstanding obligations of comparable
priority and security that have a short-term rating. The
Advisor will determine that an obligation presents minimal
credit risks or that unrated instruments are of comparable
quality in accordance with guidelines established by the
Trustees. In addition, in the case of taxable money market
funds, investments in second tier securities are subject to
the further constraints that (i) no more than 5% of a Fund's
assets may be invested in such securities in the aggregate,
and (ii) any investment in such securities of one issuer is
limited to the greater of 1% of the Fund's total assets or
$1 million. A taxable money market fund may hold up to 25%
its assets in first tier securities of a single issuer for
three Business Days.
Restricted Restricted securities are securities that may not be sold
Securities freely to the public absent registration under the
Securities Act of 1933 or an exemption from registration.
Securities In order to generate additional income, a Fund may lend the
Lending securities in which it is invested 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 at all times to 100% of the
market value plus accrued interest of the loaned securities.
Collateral is marked to market daily. A Fund continues to
receive interest on the loaned securities while
simultaneously earning interest on the investment of cash
collateral in U.S. Government securities. 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.
Standby Securities subject to standby commitments or puts permit the
Commitments holder thereof to sell the securities at a fixed price prior
and Puts to maturity. Securities subject to a standby commitment or
put may be sold at any time at the current market price.
However, unless the standby commitment or put was an
integral part of the security as originally issued, it may
not be marketable or assignable; therefore, the standby
commitment or put would only have value to the Fund owning
the security to which it relates. In certain cases, a
premium may be paid for a standby commitment or put, which
premium will have the effect of reducing the yield otherwise
payable on the underlying security.
Swaps, Caps, Interest rate swaps, mortgage swaps, currency swaps and
Floors and other types of swap agreements such as caps, floors and
Collars 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 the Fund 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. Swaps may also depend on other
prices or rates, such as the value of an index or mortgage
prepayment rates.
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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.
Swap agreements will tend to shift the Fund's investment
exposure from one type of investment to another. Depending
on how they are used, swap agreements may increase or
decrease the overall volatility of the Fund's investment and
their share price and yield.
Time Deposits Time deposits are non-negotiable receipts issued by a bank
in exchange for the deposit of funds. Time deposits with a
withdrawal penalty are considered to be illiquid.
U.S. Government Obligations issued or guaranteed by agencies of the U.S.
Agency Government, including, among others, the Federal Farm Credit
Obligations Bank, the Federal Housing Administration and the Small
Business Administration, and obligations issued or
guaranteed by instrumentalities of the U.S. Government,
including, among others, the Federal Home Loan Mortgage
Corporation, the Federal Land Banks and the U.S. Postal
Service. Some of these securities are supported by the full
faith and credit of the U.S. Treasury (e.g., Government
National Mortgage Association securities), others are
supported by the right of the issuer to borrow from the
Treasury (e.g., Federal Farm Credit Bank securities), while
still others are supported only by the credit of the
instrumentality (e.g., Federal National Mortgage Association
securities). Guarantees of principal by agencies or
instrumentalities of the U.S. Government may be a guarantee
of payment at the maturity of the obligation so that in the
event of a default prior to maturity there might not be a
market and thus no means of realizing on the obligation
prior to maturity. Guarantees as to the timely payment of
principal and interest do not extend to the value or yield
of these securities nor to the value of the Fund's shares.
U.S. Treasury U.S. Treasury obligations consist of bills, notes and bonds
Obligations issued by the U.S. Treasury.
Variable and Certain obligations may carry variable or floating rates of
Floating Rate interest, and may involve conditional or unconditional
Instruments demand features. 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.
Warrants Warrants are instruments giving holders the right, but not
the obligation, to buy shares of a company at a given price
during a specified period.
When-Issued and When-issued or delayed delivery basis transactions involve
Delayed the purchase of an instrument with payment and delivery
Delivery taking place in the future. Delivery of and payment for
Securities these securities may occur a month or more after the date of
the purchase commitment. A Fund will maintain with the
Custodian a separate account with liquid, high grade debt
securities or cash 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
the Fund before
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settlement. These securities are subject to market
fluctuations 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 Fund
generally purchases securities on a when-issued or forward
commitment basis with the intention of actually acquiring
securities for its portfolio, a Fund may dispose of a when-
issued security or forward commitment prior to settlement if
it deems appropriate. When investing in when-issued
securities, a Fund will not accrue income until delivery of
the securities and will invest in such securities only for
purposes of actually acquiring the securities and not for
the purpose of leveraging.
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