ARK FUNDS/MA, 485APOS, 2000-04-13

ARK FUNDS/MA
485APOS, 2000-04-13

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON April 13, 2000.
FILE NO. 33-53690
FILE NO. 811-7310

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A

REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 /X/
PRE-EFFECTIVE AMENDMENT / /

POST-EFFECTIVE AMENDMENT NO. 25 /X/
AND
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 /X/

AMENDMENT NO. 23 /X/

ARK FUNDS
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

ONE FREEDOM VALLEY DRIVE
OAKS, PA 19456
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)

REGISTRANT'S TELEPHONE NUMBER
1-610-676-1000

LYNDA J. STRIEGEL, ESQ.
VICE PRESIDENT AND SECRETARY
ARK FUNDS
ONE FREEDOM VALLEY DRIVE
OAKS, PA 19456
(NAME AND ADDRESS OF AGENT FOR SERVICE)

COPIES TO:

PIPER MARBURY RUDNICK & WOLFE LLP

6225 SMITH AVENUE
BALTIMORE, MARYLAND 21209-3600

IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE:

/ / IMMEDIATELY UPON FILING PURSUANT TO PARAGRAPH (b)

/ / ON ____________, 2000 PURSUANT TO PARAGRAPH (b)
/X/ 60 DAYS AFTER FILING PURSUANT TO PARAGRAPH (a) (1)
/ / 75 DAYS AFTER FILING PURSUANT TO PARAGRAPH (a) (2)
/ / ON [DATE] PURSUANT TO PARAGRAPH (a) OF RULE 485

IF APPROPRIATE, CHECK THE FOLLOWING BOX:

/ / THIS POST-EFFECTIVE AMENDMENT DESIGNATES A NEW EFFECTIVE DATE FOR A
PREVIOUSLY FILED POST-EFFECTIVE AMENDMENT.
<PAGE>

ARK Funds

Corporate Class

Prospectus
April _____, 2000

U.S. Treasury Cash Management Portfolio
U.S. Government Cash Management Portfolio
Prime Cash Management Portfolio
Tax-Free Cash Management Portfolio

Investment Advisor:
Allied Investment Advisors, Inc.

The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this prospectus. Any representation
to the contrary is a criminal offense.

Page 1 of 19

<PAGE>

How to Read This Prospectus

ARK Funds is a mutual fund family that offers shares in separate investment
portfolios (Portfolios). The Portfolios have individual investment goals and
strategies. This prospectus gives you important information about the Corporate
Class Shares of the Portfolios that you should know before investing. Please
read this prospectus and keep it for future reference.

This prospectus has been arranged into different sections so that you can easily
review this important information. For more detailed information about each
Portfolio, please see:

<TABLE>
<CAPTION>
Page
<S> <C>
U.S. Treasury Cash Management Portfolio............... 4

U.S. Government Cash Management Portfolio............. 6

Prime Cash Management Portfolio....................... 8

Tax-Free Cash Management Portfolio.................... 10

Additional information about risk..................... 12

Each Portfolio's Other Investments.................... 13

Investment Advisor.................................... 13

Purchasing, Selling and Exchanging Portfolio Shares... 13

Distribution of Portfolio Shares...................... 16

Dividends and Distributions........................... 16

Taxes................................................. 17

How To Obtain More Information About ARK Funds........ Back Cover
</TABLE>

Page 2 of 19
<PAGE>

Introduction - Information Common to all Portfolios

Each Portfolio is a mutual fund. A mutual fund pools shareholders' money and,
using professional investment managers, invests it in securities.

Each Portfolio has its own investment goal and strategies for reaching that
goal. The investment advisor invests each Portfolio's assets in a way that it
believes will help each Portfolio achieve its goal. Still, investing in each
Portfolio involves risk, and there is no guarantee that a Portfolio will achieve
its goal. The investment advisor's judgments about the markets, the economy, or
companies may not anticipate actual market movements, economic conditions or
company performance, and these judgments may affect the return on your
investment. In fact, no matter how good a job the investment advisor does, you
could lose money on your investment in a Portfolio, just as you could with other
investments. A Portfolio share is not a bank deposit and it is not insured or
guaranteed by the FDIC or any government agency.

The Portfolios try to maintain a constant price per share of $1.00, but there is
no guarantee that these Portfolios will achieve this goal.

Page 3 of 19
<PAGE>

ARK U.S. TREASURY CASH MANAGEMENT PORTFOLIO

Portfolio Summary

Investment Goal Maximizing current income and providing
liquidity and security of principal

Investment Focus Short-term U.S. Treasury securities

Share Price Volatility Very low

Principal Investment Strategy Investing in U.S. Treasury obligations

Investor Profile Conservative investors seeking current income
through a low-risk, liquid investment

Investment Strategy of the U.S. Treasury Cash Management Portfolio

The U.S. Treasury Cash Management Portfolio is a money market fund that seeks
its investment goal by investing exclusively in U.S. Treasury obligations.

In selecting securities for the Portfolio, the Advisor considers factors such as
current yield, the anticipated level of interest rates, and the maturity of the
instrument relative to the maturity of the entire Portfolio. In addition, the
Portfolio may only purchase securities that meet certain SEC requirements
relating to maturity, diversification and credit quality. Under these
requirements, the Portfolio's securities must have remaining maturities of 397
days or less, and the Portfolio must have a dollar-weighted average maturity of
90 days or less.

Principal Risks of Investing in the U.S. Treasury Cash Management Portfolio

An investment in the Portfolio is subject to income risk, which is the
possibility that the Portfolio's yield will decline due to falling interest
rates. A Portfolio share is not a bank deposit and is not insured or guaranteed
by the FDIC or any government agency. In addition, although a money market fund
seeks to preserve the value of your investment at $1.00 per share, it is
possible to lose money by investing in the Portfolio.

The Portfolio's U.S. Treasury securities are not guaranteed against price
movements due to changing interest rates.

Performance Information

The Portfolio commenced operations on the date of this prospectus and does not
have a full calendar year of performance.

Page 4 of 19
<PAGE>

Portfolio Fees and Expenses

Every mutual fund has operating expenses to pay for services such as
professional advisory, shareholder, distribution, administration and custody
services and other costs of doing business. This table describes the fees and
expenses that you may pay if you buy and hold shares of the Portfolio.

Annual Portfolio Operating Expenses (expenses deducted from Portfolio assets)

<TABLE>
<CAPTION>
Corporate Class
<S> <C>

Investment Advisory Fees 0.15%
Distribution and Shareholder Service (12b-1) Fees None
Other Expenses 0.18%*
Total Annual Portfolio Operating Expenses 0.33%
Fee Waivers and Expense Reimbursements 0.09%
Net Total Operating Expenses 0.24%**
</TABLE>

* As of the date of this prospectus the Portfolio has not yet commenced
operations and Other Expenses are based on estimates for the current fiscal
year.
** The Portfolio's Advisor has agreed to contractually waive fees and
reimburse expenses in order to keep total operating expenses from exceeding
0.24% until April 30, 2001.

For more information about these fees, see "Investment Advisor" and
"Distribution of Portfolio Shares."

Example

This Example is intended to help you compare the cost of investing in the
Portfolio with the cost of investing in other mutual funds. The Example assumes
that you invest $10,000 in the Portfolio for the time periods indicated and that
you sell your shares at the end of the period.

The Example also assumes that each year your investment has a 5% return and
Portfolio expenses remain the same. Although your actual costs and returns
might be different, your approximate costs of investing $10,000 in the Portfolio
would be:

<TABLE>
<CAPTION>
1 Year 3 Years
<S> <C>
$25 $97
</TABLE>

Page 5 of 19
<PAGE>

ARK U.S. GOVERNMENT CASH MANAGEMENT PORTFOLIO

Portfolio Summary

Investment Goal Maximizing current income and providing
liquidity and security of principal

Investment Focus Short-term U.S. government securities

Share Price Volatility Very low

Principal Investment Strategy Investing in U.S. government obligations and
repurchase agreements

Investor Profile Conservative investors seeking current income
through a low-risk, liquid investment

Investment Strategy of the U.S. Government Cash Management Portfolio

The U.S. Government Cash Management Portfolio is a money market fund that seeks
its investment goal by investing exclusively in obligations issued by the U.S.
government and its agencies and instrumentalities and in repurchase agreements.

Principal Risks of Investing in the U.S. Government Cash Management Portfolio

The Portfolio's U.S. government securities are not guaranteed against price
movements due to changing interest rates. Obligations issued by some U.S.
government agencies are backed by the U.S. Treasury, while others are backed
solely by the ability of the agency to borrow from the U.S. Treasury or by the
agency's own resources.

Performance Information

The Portfolio commenced operations on the date of this prospectus and does not
have a full calendar year of performance.

Page 6 of 19
<PAGE>

Portfolio Fees and Expenses

Annual Portfolio Operating Expenses (expenses deducted from Portfolio assets)

<TABLE>
<CAPTION>
Corporate Class
<S> <C>
Investment Advisory Fees 0.15%
Distribution and Shareholder Service (12b-1) Fees None
Other Expenses 0.18%*
Total Annual Portfolio Operating Expenses 0.33%
Fee Waivers and Expense Reimbursements 0.09%
Net Total Operating Expenses 0.24%**
</TABLE>

For more information about these fees, see "Investment Advisor" and
"Distribution of Portfolio Shares."

Example

<TABLE>
<CAPTION>
1 Year 3 Years
<S> <C>
$25 $97
</TABLE>

Page 7 of 19
<PAGE>

ARK PRIME CASH MANAGEMENT PORTFOLIO

Portfolio Summary

Investment Goal Maximizing current income and providing
liquidity and security of principal

Investment Focus Short-term money market instruments

Share Price Volatility Very low

Principal Investment Strategy Investing in high-quality U.S. dollar-
denominated money market securities

Investor Profile Conservative investors seeking current income
through a low-risk, liquid investment

Investment Strategy of the Prime Cash Management Portfolio

The Prime Cash Management Portfolio is a money market fund that seeks its
investment goal by investing primarily in high-quality, short-term U.S. dollar-
denominated debt securities issued by corporations, the U.S. government and
banks, including U.S. and foreign branches of U.S. banks and U.S. branches of
foreign banks. At least 95% of such securities are rated in the highest rating
category by two or more nationally recognized statistical rating organizations.

Principal Risks of Investing in the Prime Cash Management Portfolio

The Portfolio's securities are not guaranteed against price movements due to
changing interest rates. Obligations issued by some U.S. government agencies are
backed by the U.S. Treasury, while others are backed solely by the ability of
the agency to borrow from the U.S. Treasury or by the agency's own resources.

Page 8 of 19
<PAGE>

Performance Information

The Portfolio commenced operations on the date of this prospectus and does not
have a full calendar year of performance.

Portfolio Fees and Expenses

Annual Portfolio Operating Expenses (expenses deducted from Portfolio assets)

For more information about these fees, see "Investment Advisor" and
"Distribution of Portfolio Shares."

Example

<TABLE>
<CAPTION>
1 Year 3 Years
<S> <C>
$25 $97
</TABLE>

Page 9 of 19
<PAGE>

ARK TAX-FREE CASH MANAGEMENT PORTFOLIO

Portfolio Summary

Investment Goal Maximizing current income exempt from Federal
income taxes and providing liquidity and
security of principal

Investment Focus Short-term, high-quality municipal money market
obligations

Share Price Volatility Very low

Principal Investment Strategy Investing in tax-exempt U.S. dollar-
denominated money market securities

Investor Profile Conservative investors seeking tax-exempt
income through a low-risk, liquid investment

Investment Strategy of the Tax-Free Cash Management Portfolio

The Tax-Free Cash Management Portfolio is a money market fund that seeks its
investment goal by investing substantially all of its assets in a broad range of
high quality, short-term municipal money market instruments that pay interest
that is exempt from Federal income taxes. The issuers of these securities may be
state and local governments and agencies located in any of the 50 states, the
District of Columbia, Puerto Rico and other U.S. territories and possessions.
The Portfolio is well diversified among issuers and comprised only of short-term
debt securities that are rated in the two highest categories by nationally
recognized statistical rating organizations or determined by the Advisor to be
of equal credit quality. The Portfolio will not invest in securities subject to
the alternative minimum tax or in taxable municipal securities.

Principal Risks of Investing in the Tax-Free Cash Management Portfolio

Page 10 of 19
<PAGE>

There may be economic or political changes that impact the ability of municipal
issuers to repay principal and to make interest payments on municipal
securities. Changes in the financial condition or credit rating of municipal
issuers also may adversely affect the value of the Portfolio's securities.

Performance Information

The Portfolio commenced operations on the date of this prospectus and does not
have a full calendar year of performance.

Portfolio Fees and Expenses

Annual Portfolio Operating Expenses (expenses deducted from Portfolio assets)

<TABLE>
<CAPTION>
Corporate Class
- --------------------------------------------------------------------------------
<S> <C>
Investment Advisory Fees 0.15%
Distribution and Shareholder Service (12b-1) Fees None
Other Expenses 0.18%*
Total Annual Portfolio Operating Expenses 0.33%
Fee Waivers and Expense Reimbursements 0.09%
Net Total Operating Expenses 0.24%**
</TABLE>

For more information about these fees, see "Investment Advisor" and
"Distribution of Portfolio Shares."

Example

The Example also assumes that each year your investment has a 5% return and
Portfolio expenses remain the same. Although your actual costs and returns might
be different, your approximate costs of investing $10,000 in the Portfolio would
be:

1 Year 3 Years
<S> <C>
$25 $97
</TABLE>

Page 11 of 19
<PAGE>

Additional Information About Risk

<TABLE>
<S> <C>
Risks Portfolios Affected by the Risks

Municipal Issuer Risk -- There may be economic or Tax-Free Cash Management Portfolio
political changes that impact the ability of municipal
issuers to repay principal and to make interest payments
on municipal securities. Changes to the financial
condition or credit rating of municipal issuers may also
adversely affect the value of the Portfolio's municipal
securities. Constitutional or legislative limits on
borrowing by municipal issuers may result in reduced
supplies of municipal securities. Moreover, certain
municipal securities are backed only by a
municipal issuer's ability to levy and collect taxes.

Year 2000 Risk -- The Portfolios depend on the smooth All Portfolios
functioning of computer systems in almost every aspect
of their business. Like other mutual funds, businesses
and individuals around the world, the Portfolios could
be adversely affected if the computer systems used by
their mission-critical service providers do not properly
process dates on and after January 1, 2000, and do not
distinguish between the year 2000 and the year 1900, or
are subject to other date recognition or similar systems
issues. Since January 1, 2000, the Portfolios and their
mission-critical service providers have not experienced
any material adverse consequences to the computer systems
affecting the Portfolios. The Portfolios and their
shareholders may experience losses if any computer
difficulties are experienced in the future by issuers
of portfolio securities or third parties, such as
custodians, banks, broker-dealers or others with which
the Portfolios do business.
</TABLE>

Page 12 of 19
<PAGE>

Each Portfolio's Other Investment

This prospectus describes the Portfolios' primary strategies, and each Portfolio
will invest at least 80% of its total assets in the types of securities
described in this prospectus. However, each Portfolio also may invest in other
securities, use other strategies and engage in other investment practices. These
investments and strategies, as well as those described in this prospectus, are
described in detail in our Statement of Additional Information. Of course, there
is no guarantee that any Portfolio will achieve its investment goal.

Investment Advisor

The Portfolio's Investment Advisor makes investment decisions for the Portfolios
and continuously reviews, supervises and administers the Portfolios' respective
investment programs.

The Board of Trustees of the ARK Funds supervises the Advisor and establishes
policies that the Advisor must follow in its management activities.

Allied Investment Advisors, Inc. (AIA), a wholly-owned subsidiary of Allfirst
Bank (formerly, First National Bank of Maryland) (Allfirst) serves as the
Advisor to the Portfolios. As of March 31, 2000, AIA had approximately $14.7
billion in assets under management. Under the advisory contract between ARK
Funds and AIA, AIA is entitled to receive advisory fees of:

<TABLE>
<S> <C>
U.S. Treasury Cash Management Portfolio 0.15%*
U.S. Government Cash Management Portfolio 0.15%*
Prime Cash Management Portfolio 0.15%*
Tax-Free Cash Management Portfolio 0.15%*
</TABLE>
___________________

* The Portfolios commenced operations on the date of this prospectus and have
not paid any advisory fees. The Board of Trustees has approved an investment fee
of 0.15%, however, the Portfolio's Advisor has agreed to contractually waive
fees and reimburse expenses in order to keep total operating expenses from
exceeding 0.24% until April 30, 2001. With these fee waivers, the actual
advisory fees received by AIA will be lower than 0.15%.

Portfolio Manager

James M. Hannan is a Principal of AIA and manager of each Portfolio. He is also
manager of the ARK U.S. Treasury Money Market Portfolio, the ARK U.S. Government
Money Market Portfolio, the ARK Money Market Portfolio, the ARK Tax-Free Money
Market Portfolio, the ARK Pennsylvania Tax-Free Money Market Portfolio, and the
ARK Short-Term Treasury Portfolio and is responsible for several separately
managed institutional portfolios which he has managed since 1992. Since 1987 he
has served in several capacities at Allfirst and currently is a Vice President.
Prior to 1987 he served as the Treasurer for the city of Hyattsville,
Maryland.

Purchasing, Selling and Exchanging Portfolio Shares

This section tells you how to purchase, sell (sometimes called "redeem") or
exchange Corporate Class Shares of the Portfolios.

Page 13 of 19
<PAGE>

<PAGE>

Purchases of Corporate Class Shares are subject to minimum investment
requirements, which are described below. For information call 1-888-427-5386.

How to Purchase Portfolio Shares

You may purchase Corporate Class Shares by placing orders with the Fund's
transfer agent (or its authorized agent). You may purchase shares directly by
Federal funds, wire or other funds immediately available to the Portfolios. A
Portfolio cannot accept checks, third-party checks, credit cards, credit card
checks or cash.

Investors who deal directly with a financial institution or financial
intermediary (investor representative) will have to follow the institution's or
intermediary's procedures for transacting with the Fund.

For more information about how to purchase or sell Fund shares through your
financial institution, you should contact your financial institution directly.
Investors may be charged a fee for purchase and/or redemption transactions
effectuated through certain of these broker-dealers or other financial
intermediaries.

General Information

You may purchase shares on any day that the New York Stock Exchange (NYSE) and
the Federal Reserve are open for business (a Business Day). Shares cannot be
purchased by Federal Reserve wire on days when either the NYSE or the Federal
Reserve is closed.

A Portfolio or its distributor may reject any purchase order if it is determined
that accepting the order would not be in the best interests of the Portfolio or
its shareholders.

The price per share (the offering price) will be the net asset value per share
(NAV) next determined after a Portfolio receives your purchase order. We expect
that the NAV of the Portfolios will remain constant at $1.00 per share.

Page 14 of 19
<PAGE>

before 12:00 noon Eastern time. For orders received and accepted after 12:00
noon Eastern time but before 4:00 p.m. Eastern time, you will begin earning
dividends on the next Business Day.

The Prime Cash Management Portfolio and U.S. Government Cash Management
Portfolio calculate their NAV each Business Day at 5:00 p.m. Eastern time. So,
for you to be eligible to receive dividends declared on the day you submit your
purchase order, generally the Portfolio must receive and accept your order and
receive Federal funds before 5:00 p.m. Eastern time.

When you purchase or sell Corporate Class Shares through certain financial
institutions (rather than directly from the Fund), you may have to transmit your
purchase and sale requests to your financial institution at an earlier time for
your transaction to become effective that day. This allows your financial
institution time to process your requests and transmit them to the Fund.

When the NYSE or Federal Reserve Bank of New York close early, the Portfolios
will advance the time on any such day by which purchase orders must be received.

How We Calculate NAV

NAV for one Portfolio share is the value of that share's portion of all of the
net assets in the Portfolio.

In calculating NAV for the Portfolios, we generally value a Portfolio's
investment portfolio using the amortized cost valuation method, which is
described in detail in our Statement of Additional Information. If this method
is determined to be unreliable during certain market conditions or for other
reasons, a Portfolio may value its securities at market price or fair value
prices may be determined in good faith using methods approved by the Board of
Trustees.

Minimum Purchases

To purchase shares for the first time, you must invest (through one or more
accounts) at least $10,000,000 in any Portfolio. Your subsequent investments in
any Portfolio may be made in any amount. There may be other minimums or
restrictions established by financial institutions or intermediaries when you
open your account.

How to Sell Your Portfolio Shares

Holders of Corporate Class Shares may sell shares by telephone or by mail on any
Business Day. If you have questions, call 1-888-427-5386 or your investor
representative.

By Mail. To redeem by mail, send a written request to ARK Funds, P.O. Box 8525,
Boston, MA 02266-8525, or to your correspondent bank and follow their
procedures.

By Telephone. To redeem by telephone, call 1-888-427-5386 or your investor
representative.

Receiving Your Money

Page 15 of 19
<PAGE>

<PAGE>

Normally, if we receive your redemption request by 12:00 noon Eastern time for
the U.S. Treasury Cash Management and Tax-Free Cash Management Portfolios or
1:30 p.m. Eastern time for the U.S. Government Cash Management and Prime Cash
Management Portfolios on any Business Day, we will send your sale proceeds on
that day. Your proceeds can be wired to your bank account. The Portfolios
reserve the right to charge wire fees to investors. You may not close your
account by telephone.

Suspension of Your Right to Sell Your Shares

A Portfolio may suspend your right to sell your shares if the NYSE restricts
trading, the SEC declares an emergency or for other reasons. More information
about this is in our Statement of Additional Information.

How to Exchange Your Shares

You may exchange your Corporate Class Shares on any Business Day by contacting
us directly by telephone by calling 1-888-427-5386 or your investor
representative.

When you exchange shares, you are really selling your shares and buying other
Portfolio shares. So, your sale price and purchase price will be based on the
NAV next calculated after the Portfolio receives your exchange request. The
Portfolios reserve the right to modify or suspend this exchange privilege.

An exchange between the Corporate Class and another class of any Portfolio is
generally not permitted.

If your account drops below the minimum level because of redemptions, you may be
required to sell your shares. But, we will always give you at least 30 days'
written notice to give you time to add to your account and avoid the sale of
your shares.

Telephone Transactions

Purchasing, selling and exchanging Portfolio shares over the telephone is
extremely convenient, but not without risk. Although the Fund has certain
safeguards and procedures to confirm the identity of callers and the
authenticity of instructions, the Fund is not responsible for any losses or
costs incurred by following telephone instructions we reasonably believe to be
genuine. If you or your financial institution transact with the Fund is over
the telephone, you will generally bear the risk of any loss.

Distribution of Portfolio Shares

SEI Investments Distribution Co., the distributor of ARK Funds, receives no
compensation for its distribution of Corporate Class Shares.

Dividends and Distributions

Dividends are declared daily and paid monthly. Each Portfolio makes
distributions of capital gains, if any, at least annually. If you own Portfolio
shares on a Portfolio's record date, you will be entitled to receive the
distribution.

You will receive dividends and distributions in the form of additional Portfolio
shares unless you elect to receive payment in cash. To elect cash payment, you
must notify

Page 16 of 19
<PAGE>

your financial institution or intermediary in writing prior to the date of the
distribution. Your election will be effective for dividends and distributions
paid after your notice is received. To cancel your election, simply send written
notice.

Taxes

Please consult your tax advisor regarding your specific questions about Federal,
state and local income taxes. Below we have summarized some important tax
issues that affect the Portfolios and their shareholders. This summary is based
on current tax laws, which may change.

Each Portfolio will distribute substantially all of its income and capital
gains, if any. The dividends and distributions you receive may be subject to
Federal, state and local taxation, depending upon your tax situation.
Distributions you receive from a Portfolio may be taxable whether or not you
reinvest them. Income distributions are generally taxable at ordinary income tax
rates. Capital gains distributions are generally taxable at the rates
applicable to long-term capital gains. A sale or exchange of shares is
generally a taxable event.

The Tax-Free Cash Management Portfolio intends to distribute Federally tax-
exempt income. Income exempt from Federal tax may be subject to state and local
taxes. Any capital gains distributed by the Portfolio may be taxable.

More information about taxes is in the Statement of Additional Information.

Page 17 of 19
<PAGE>

ARK Funds

Investment Advisor

Allied Investment Advisors, Inc.
100 E. Pratt Street
Baltimore, MD 21202

Distributor

SEI Investments Distribution Co.
One Freedom Valley Drive
Oaks, PA 19456

Legal Counsel

Piper Marbury Rudnick & Wolfe LLP
6225 Smith Avenue
Baltimore, MD 21209

Independent Auditors

KPMG LLP
99 High Street
Boston, MA 02110

More information about the Portfolios is available without charge through the
following:

Statement of Additional Information (SAI)

The SAI dated April _____, 2000, includes detailed information about ARK Funds.
SAI is on file with the SEC and is incorporated by reference into this
prospectus. This means that the SAI, for legal purposes, is a part of this
prospectus.

Annual and Semi-Annual Reports

These reports list each Portfolio's holdings and contain information from the
Portfolio's managers about strategies and recent market conditions and trends
and their impact on performance. The reports also contain detailed financial
information about the Portfolios.

To Obtain More Information:

By Telephone: Call 1-888-427-5386.

Page 18 of 19
<PAGE>

By Mail: Write to us at:
ARK Funds
P.O. Box 8525
Boston, MA 02266-8525

From the SEC: You can also obtain the SAI or the Annual and Semi-Annual
Reports, as well as other information about ARK Funds, from the SEC's website
(http://www.sec.gov). You may review and copy documents at the SEC Public
Reference Room in Washington, DC (for information call (202) 942-8090). You may
request documents by mail from the SEC, upon payment of a duplicating fee, by
(1) writing to: Securities and Exchange Commission, Public Reference Section,
Washington, DC 20549-6009 or (2) sending an electronic request to
[email protected]. ARK Funds' Investment Company Act registration number is
811-7310.

Page 19 of 19
<PAGE>

ARK Funds

Corporate II Class

Prospectus

April _____, 2000

U.S. Treasury Cash Management Portfolio
U.S. Government Cash Management Portfolio
Prime Cash Management Portfolio
Tax-Free Cash Management Portfolio

Investment Advisor:
Allied Investment Advisors, Inc.

The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this prospectus. Any representation
to the contrary is a criminal offense.

Page 1 of 19
<PAGE>

How to Read This Prospectus

ARK Funds is a mutual fund family that offers shares in separate investment
portfolios (Portfolios). The Portfolios have individual investment goals and
strategies. This prospectus gives you important information about the Corporate
II Class Shares of the Portfolios that you should know before investing. Please
read this prospectus and keep it for future reference.

This prospectus has been arranged into different sections so that you can easily
review this important information. For more detailed information about each
Portfolio, please see:

<TABLE>
<CAPTION>
Page
<S> <C>
U.S. Treasury Cash Management Portfolio............................. 4
U.S. Government Cash Management Portfolio........................... 6
Prime Cash Management Portfolio..................................... 8
Tax-Free Cash Management Portfolio.................................. 10
Additional information about risk................................... 12
Each Portfolio's Other Investments.................................. 13
Investment Advisor.................................................. 13
Purchasing, Selling and Exchanging Portfolio Shares................. 13
Distribution of Portfolio Shares.................................... 16
Dividends and Distributions......................................... 17
Taxes............................................................... 17
How To Obtain More Information About ARK Funds...................... Back Cover
</TABLE>

Page 2 of 19
<PAGE>

INTRODUCTION - INFORMATION COMMON TO ALL PORTFOLIOS

Each Portfolio is a mutual fund. A mutual fund pools shareholders' money and,
using professional investment managers, invests it in securities.

The Portfolios try to maintain a constant price per share of $1.00, but there is
no guarantee that these Portfolios will achieve this goal.

Page 3 of 19
<PAGE>

ARK U.S. TREASURY CASH MANAGEMENT PORTFOLIO

Portfolio Summary

Investment Goal Maximizing current income and providing
liquidity and security of principal

Investment Focus Short-term U.S. Treasury securities

Share Price Volatility Very low

Principal Investment Strategy Investing in U.S. Treasury obligations

Investor Profile Conservative investors seeking current income
through a low-risk, liquid investment

Investment Strategy of the U.S. Treasury Cash Management Portfolio

The U.S. Treasury Cash Management Portfolio is a money market fund that seeks
its investment goal by investing exclusively in U.S. Treasury obligations.

Principal Risks of Investing in the U.S. Treasury Cash Management Portfolio

The Portfolio's U.S. Treasury securities are not guaranteed against price
movements due to changing interest rates.

Performance Information

The Portfolio commenced operations on the date of this prospectus and does not
have a full calendar year of performance.

Page 4 of 19
<PAGE>

Portfolio Fees and Expenses

Annual Portfolio Operating Expenses (expenses deducted from Portfolio assets)

<TABLE>
<CAPTION>
Corporate II Class
<S> <C>
Investment Advisory Fees 0.15%
Distribution and Shareholder Service (12b-1) Fees 0.25%
Other Expenses 0.18%*
Total Annual Portfolio Operating Expenses 0.58%
Fee Waivers and Expense Reimbursements 0.09%
Net Total Operating Expenses 0.49%**
</TABLE>

* As of the date of this prospectus the Portfolio has not yet commenced
operations and Other Expenses are based on estimates for the current fiscal
year.
** The Portfolio's Advisor has agreed to contractually waive fees and reimburse
expenses in order to keep total operating expenses from exceeding 0.49% until
April 30, 2001.

For more information about these fees, see "Investment Advisor" and
"Distribution of Portfolio Shares."

Example

<TABLE>
<CAPTION>
1 Year 3 Years
<S> <C>
$50 $177
=== ====
</TABLE>

Page 5 of 19
<PAGE>

ARK U.S. GOVERNMENT CASH MANAGEMENT PORTFOLIO

Portfolio Summary

Investment Goal Maximizing current income and providing
liquidity and security of principal

Investment Focus Short-term U.S. government securities

Share Price Volatility Very low

Principal Investment Strategy Investing in U.S. government obligations and
repurchase agreements

Investor Profile Conservative investors seeking current income
through a low-risk, liquid investment

Investment Strategy of the U.S. Government Cash Management Portfolio

Principal Risks of Investing in the U.S. Government Cash Management Portfolio

Page 6 of 19
<PAGE>

Performance Information

The Portfolio commenced operations on the date of this prospectus and does not
have a full calendar year of performance.

Portfolio Fees and Expenses

Annual Portfolio Operating Expenses (expenses deducted from Portfolio assets)

* As of the date of this prospectus the Portfolio has not yet commenced
operations and Other Expenses are based on estimates for the current fiscal
year.
** The Portfolio's Advisor has agreed to contractually waive fees and reimburse
expenses in order to keep total operating expenses from exceeding 0.49% until
April 30, 2001.

For more information about these fees, see "Investment Advisor" and
"Distribution of Portfolio Shares."

Example

<TABLE>
<CAPTION>
1 Year 3 Years
<S> <C>
$50 $177
=== ====
</TABLE>

Page 7 of 19
<PAGE>

ARK PRIME CASH MANAGEMENT PORTFOLIO

Portfolio Summary

Investment Goal Maximizing current income and providing
liquidity and security of principal

Investment Focus Short-term money market instruments

Share Price Volatility Very low

Principal Investment Strategy Investing in high-quality U.S. dollar-
denominated money market securities

Investor Profile Conservative investors seeking current income
through a low-risk, liquid investment

Investment Strategy of the Prime Cash Management Portfolio

Principal Risks of Investing in the Prime Cash Management Portfolio

Page 8 of 19
<PAGE>

Performance Information

The Portfolio commenced operations on the date of this prospectus and does not
have a full calendar year of performance.

Portfolio Fees and Expenses

Annual Portfolio Operating Expenses (expenses deducted from Portfolio assets)

* As of the date of this prospectus the Portfolio has not yet commenced
operations and Other Expenses are based on estimates for the current fiscal
year.
** The Portfolio's Advisor has agreed to contractually waive fees and reimburse
expenses in order to keep total operating expenses from exceeding 0.49% until
April 30, 2001.

For more information about these fees, see "Investment Advisor" and
"Distribution of Portfolio Shares."

Example

<TABLE>
<CAPTION>
1 Year 3 Years
<S> <C>
$50 $177
=== ====
</TABLE>

Page 9 of 19
<PAGE>

ARK TAX-FREE CASH MANAGEMENT PORTFOLIO

Portfolio Summary

Investment Goal Maximizing current income exempt from Federal
income taxes and providing liquidity and
security of principal

Investment Focus Short-term, high-quality municipal money market
obligations

Share Price Volatility Very low

Principal Investment Strategy Investing in tax-exempt U.S. dollar-denominated
money market securities

Investor Profile Conservative investors seeking tax-exempt
income through a low-risk, liquid investment

Investment Strategy of the Tax-Free Cash Management Portfolio

The Tax-Free Cash Management Portfolio is a money market funds that seeks its
investment goal by investing substantially all of its assets in a broad range of
high quality, short-term municipal money market instruments that pay interest
that is exempt from Federal income taxes. The issuers of these securities may
be state and local governments and agencies located in any of the 50 states, the
District of Columbia, Puerto Rico and other U.S. territories and possessions.
The Portfolio is well diversified among issuers and comprised only of short-term
debt securities that are rated in the two highest categories by nationally
recognized statistical rating organizations or determined by the Advisor to be
of equal credit quality. The Portfolio will not invest in securities subject to
the alternative minimum tax or in taxable municipal securities.

Principal Risks of Investing in the Tax-Free Cash Management Portfolio

Page 10 of 19
<PAGE>

Performance Information

The Portfolio commenced operations on the date of this prospectus and does not
have a full calendar year of performance.

Portfolio Fees and Expenses

Annual Portfolio Operating Expenses (expenses deducted from Portfolio assets)

* As of the date of this prospectus the Portfolio has not yet commenced
operations and Other Expenses are based on estimates for the current fiscal
year.
** The Portfolio's Advisor has agreed to contractually waive fees and reimburse
expenses in order to keep total operating expenses from exceeding 0.49% until
April 30, 2001.

For more information about these fees, see "Investment Advisor" and
"Distribution of Portfolio Shares."

Example

<TABLE>
<CAPTION>
1 Year 3 Years
<S> <C>
$50 $177
=== ====
</TABLE>

Page 11 of 19
<PAGE>

Additional Information About Risk

<TABLE>
<S> <C>
Risks Portfolios Affected by the Risks

Municipal Issuer Risk -- There may be economic or Tax-Free Cash Management Portfolio
political changes that impact the ability of municipal
issuers to repay principal and to make interest
payments on municipal securities. Changes to the
financial condition or credit rating of municipal
issuers may also adversely affect the value of the
Portfolio's municipal securities. Constitutional or
legislative limits on borrowing by municipal issuers
may result in reduced supplies of municipal
securities. Moreover, certain municipal securities are
backed only by a municipal issuer's ability to levy
and collect taxes.

Year 2000 Risk -- The Portfolios depend on the All Portfolios
smooth functioning of computer systems in almost
every aspect of their business. Like other mutual
funds, businesses and individuals around the world,
the Portfolios could be adversely affected if the
computer systems used by their mission-critical
service providers do not properly process dates on
and after January 1, 2000, and do not distinguish
between the year 2000 and the year 1900, or are
subject to other date recognition or similar systems
issues. Since January 1, 2000, the Portfolios and
their mission-critical service providers have not
experienced any material adverse consequences to the
computer systems affecting the Portfolios. The
Portfolios and their shareholders may experience
losses if any computer difficulties are experienced in
the future by issuers of portfolio securities or third
parties, such as custodians, banks, broker-dealers or
others with which the Portfolios do business.
</TABLE>

Page 12 of 19
<PAGE>

Each Portfolio's Other Investments

This prospectus describes the Portfolios' primary strategies, and each Portfolio
will invest at least 80% of its total assets in the types of securities
described in this prospectus. However, each Portfolio also may invest in other
securities, use other strategies and engage in other investment practices.
These investments and strategies, as well as those described in this prospectus,
are described in detail in our Statement of Additional Information. Of course,
there is no guarantee that any Portfolio will achieve its investment goal.

Investment Advisor

The Portfolio's Investment Advisor makes investment decisions for the Portfolios
and continuously reviews, supervises and administers the Portfolios' respective
investment programs.

The Board of Trustees of the ARK Funds supervises the Advisor and establishes
policies that the Advisor must follow in its management activities.

___________________________

* The Portfolios commenced operations on the date of this prospectus and have
not paid any advisory fees. The Board of Directors has approved an investment
advisory fee of 0.15%, however, the Portfolio's Advisor has agreed to
contractually waive fees and reimburse expenses in order to keep total operating
expenses from exceeding 0.49% until April 30, 2001. With these fee waivers, the
actual advisory fees received by AIA will be lower than 0.15%.

Portfolio Manager

Purchasing, Selling and Exchanging Portfolio Shares

This section tells you how to purchase, sell (sometimes called "redeem") or
exchange Corporate II Class Shares of the Portfolios.

Page 13 of 19
<PAGE>

Purchases of Corporate II Class Shares are subject to minimum investment
requirements, which are described below. For information call
1-888-427-5386.

How to Purchase Portfolio Shares

You may purchase Corporate II Class Shares by placing orders with the Fund's
transfer agent (or its authorized agent). You may purchase shares directly by
Federal funds, wire or other funds immediately available to the Portfolios. A
Portfolio cannot accept checks, third-party checks, credit cards, credit card
checks or cash.

General Information

A Portfolio or its distributor may reject any purchase order if it is determined
that accepting the order would not be in the best interests of the Portfolio or
its shareholders.

Page 14 of 19
<PAGE>

before 12:00 noon Eastern time. For orders received and accepted after 12:00
noon Eastern time but before 4:00 p.m. Eastern time, you will begin earning
dividends on the next Business Day.

When you purchase or sell Corporate II Class Shares through certain financial
institutions (rather than directly from the Fund), you may have to transmit your
purchase and sale requests to your financial institution at an earlier time for
your transaction to become effective that day. This allows your financial
institution time to process your requests and transmit them to the Fund.

When the NYSE or Federal Reserve Bank of New York close early, the Portfolios
will advance the time on any such day by which purchase orders must be received.

How We Calculate NAV

NAV for one Portfolio share is the value of that share's portion of all of the
net assets in the Portfolio.

Minimum Purchases

How to Sell Your Portfolio Shares

Holders of Corporate II Class Shares may sell shares by telephone or by mail on
any Business Day. If you have questions, call 1-888-427-5386 or your investor
representative.

By Mail. To redeem by mail, send a written request to ARK Funds, P.O. Box 8526,
Boston, MA 02266-8525, or to your correspondent bank and follow their
procedures.

By Telephone. To redeem by telephone, call 1-888-427-5386 or your investor
representative.

Receiving Your Money

Page 15 of 19
<PAGE>

Suspension of Your Right to Sell Your Shares

Page 16 of 19
<PAGE>

How to Exchange Your Shares

You may exchange your Corporate II Class Shares on any Business Day by
contacting us directly by telephone by calling 1-888-427-5386 or your investor
representative.

An exchange between the Corporate II Class and another class of any Portfolio is
generally not permitted.

Telephone Transactions

Purchasing, selling and exchanging Portfolio shares over the telephone is
extremely convenient, but not without risk. Although the Fund has certain
safeguards and procedures to confirm the identity of callers and the
authenticity of instructions, the Fund is not responsible for any losses or
costs incurred by following telephone instructions we reasonably believe to be
genuine. If you or your financial institution transact with the Fund over the
telephone, you will generally bear the risk of any loss.

Distribution of Portfolio Shares

Each Portfolio has adopted a distribution plan that allows the Portfolio to pay
distribution and service fees for the sale and distribution of its shares, and
for services provided to shareholders. Because these fees are paid out of a
Portfolio's assets continuously, over time these fees will increase the cost of
your investment and may cost you more than paying other types of sales charges.

Distribution fees, as a percentage of average daily net assets of each
Portfolio, are 0.25%.

Page 17 of 19
<PAGE>

Dividends and Distributions

You will receive dividends and distributions in the form of additional Portfolio
shares unless you elect to receive payment in cash. To elect cash payment, you
must notify your financial institution or intermediary in writing prior to the
date of the distribution. Your election will be effective for dividends and
distributions paid after your notice is received. To cancel your election,
simply send written notice.

Taxes

More information about taxes is in the Statement of Additional Information.

Page 18 of 19
<PAGE>

ARK Funds

Investment Advisor

Allied Investment Advisors, Inc.
100 E. Pratt Street
Baltimore, MD 21202

Distributor

SEI Investments Distribution Co.
One Freedom Valley Drive
Oaks, PA 19456

Legal Counsel

Piper Marbury Rudnick & Wolfe LLP
6225 Smith Avenue
Baltimore, MD 21209

Independent Auditors

KPMG LLP
99 High Street
Boston, MA 02110

More information about the Portfolios is available without charge through the
following:

Statement of Additional Information (SAI)

The SAI dated April _____, 2000, includes detailed information about ARK Funds.
The SAI is on file with the SEC and is incorporated by reference into this
prospectus. This means that the SAI, for legal purposes, is a part of this
prospectus.

Annual and Semi-Annual Reports

To Obtain More Information:

By Telephone: Call 1-888-427-5386.

By Mail: Write to us at:

ARK Funds
P.O. Box 8525
Boston, MA 02266-8525

Page 19 of 19
<PAGE>

<PAGE>

ARK Funds

Corporate III Class

Prospectus

April _____, 2000

U.S. Treasury Cash Management Portfolio
U.S. Government Cash Management Portfolio
Prime Cash Management Portfolio
Tax-Free Cash Management Portfolio

Investment Advisor:
Allied Investment Advisors, Inc.

The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this prospectus. Any representation
to the contrary is a criminal offense.

Page 1 of 19
<PAGE>

How to Read This Prospectus

ARK Funds is a mutual fund family that offers shares in separate investment
portfolios (Portfolios). The Portfolios have individual investment goals and
strategies. This prospectus gives you important information about the Corporate
III Class Shares of the Portfolios that you should know before investing. Please
read this prospectus and keep it for future reference.

This prospectus has been arranged into different sections so that you can easily
review this important information. For more detailed information about each
Portfolio, please see:

<TABLE>
<CAPTION>
Page
<S> <C>
U.S. Treasury Cash Management Portfolio 4
U.S. Government Cash Management Portfolio 6
Prime Cash Management Portfolio 8
Tax-Free Cash Management Portfolio 10
Additional information about risk 12
Each Portfolio's Other Investments 13
Investment Advisor 13
Purchasing, Selling and Exchanging Portfolio Shares 13
Distribution of Portfolio Shares 16
Dividends and Distributions 17
Taxes 17
How To Obtain More Information About ARK Funds Back Cover
</TABLE>

Page 2 of 19
<PAGE>

Introduction - Information Common to all Portfolios

Each Portfolio is a mutual fund. A mutual fund pools shareholders' money and,
using professional investment managers, invests it in securities.

The Portfolios try to maintain a constant price per share of $1.00, but there is
no guarantee that these Portfolios will achieve this goal.

Page 3 of 19
<PAGE>

ARK U.S. Treasury Cash Management Portfolio

Portfolio Summary

Investment Goal Maximizing current income and providing
liquidity and security of principal

Investment Focus Short-term U.S. Treasury securities

Share Price Volatility Very low

Principal Investment Strategy Investing in U.S. Treasury obligations

Investor Profile Conservative investors seeking current income
through a low-risk, liquid investment

Investment Strategy of the U.S. Treasury Cash Management Portfolio

The U.S. Treasury Cash Management Portfolio is a money market fund that seeks
its investment goal by investing exclusively in U.S. Treasury obligations.

Principal Risks of Investing in the U.S. Treasury Cash Management Portfolio

The Portfolio's U.S. Treasury securities are not guaranteed against price
movements due to changing interest rates.

Performance Information

The Portfolio commenced operations on the date of this prospectus and does not
have a full calendar year of performance.

Page 4 of 19
<PAGE>

Portfolio Fees and Expenses

Annual Portfolio Operating Expenses (expenses deducted from Portfolio assets)

<TABLE>
<CAPTION>
Corporate III Class
- ------------------------------------------------------------------------
<S> <C>
Investment Advisory Fees 0.15%
Distribution and Shareholder Service (12b-1) Fees 0.40%
Other Expenses 0.18%*
Total Annual Portfolio Operating Expenses 0.73%
Fee Waivers and Expense Reimbursements 0.09%
Net Total Operating Expenses 0.64%**
</TABLE>

* As of the date of this prospectus, the Portfolio has not yet commenced
operations and Other Expenses are based on estimates for the current fiscal
year.
** The Portfolio's Advisor has agreed to contractually waive fees and reimburse
expenses in order to keep total operating expenses from exceeding 0.64% until
April 30, 2001.

For more information about these fees, see "Investment Advisor" and
"Distribution of Portfolio Shares."

Example

The Example also assumes that each year your investment has a 5% return and
Portfolio expenses remain the same. Although your actual costs and returns might
be different, your approximate costs of investing $10,000 in the Portfolio would
be:

<TABLE>
1 Year 3 Years
<S> <C>
$65 $224
</TABLE>

Page 5 of 19
<PAGE>

ARK U.S. Government Cash Management Portfolio

Portfolio Summary

Investment Goal Maximizing current income and providing
liquidity and security of principal

Investment Focus Short-term U.S. government securities

Share Price Volatility Very low

Principal Investment Strategy Investing in U.S. government obligations and
repurchase agreements

Investor Profile Conservative investors seeking current income
through a low-risk, liquid investment

Investment Strategy of the U.S. Government Cash Management
Portfolio

Principal Risks of Investing in the U.S. Government Cash
Management Portfolio

Page 6 of 19
<PAGE>

Performance Information

The Portfolio commenced operations on the date of this prospectus and does not
have a full calendar year of performance.

Portfolio Fees and Expenses

Annual Portfolio Operating Expenses (expenses deducted from Portfolio assets)

<TABLE>
<CAPTION>
Corporate III Class
- -----------------------------------------------------------------------
<S> <C>

Investment Advisory Fees 0.15%
Distribution and Shareholder Service (12b-1) Fees 0.40%
Other Expenses 0.18%*
Total Annual Portfolio Operating Expenses 0.73%
Fee Waivers and Expense Reimbursements 0.09%
Net Total Operating Expenses 0.64%**
</TABLE>

For more information about these fees, see "Investment Advisor" and
"Distribution of Portfolio Shares."

Example

The Example also assumes that each year your investment has a 5% return and
Portfolio expenses remain the same. Although your actual costs and returns might
be different, your approximate costs of investing $10,000 in the Portfolio would
be:

<TABLE>
1 Year 3 Years
<S> <C>
$65 $224
</TABLE>

Page 7 of 19
<PAGE>

ARK Prime Cash Management Portfolio

Portfolio Summary

Investment Goal Maximizing current income and providing
liquidity and security of principal

Investment Focus Short-term money market instruments

Share Price Volatility Very low

Principal Investment Strategy Investing in high-quality U.S. dollar-
denominated money market securities

Investor Profile Conservative investors seeking current income
through a low-risk, liquid investment

Investment Strategy of the Prime Cash Management Portfolio

The Prime Cash Management Portfolio is a money market fund that seeks its
investment goal by investing primarily in high-quality, short-term U.S. dollar-
denominated debt securities issued by corporations, the U.S. government and
banks, including U.S. and foreign branches of U.S. banks and U.S. branches of
foreign banks. At least 95% of such securities is rated in the highest rating
category by two or more nationally recognized statistical rating organizations.

Principal Risks of Investing in the Prime Cash Management
Portfolio

Page 8 of 19
<PAGE>

Performance Information

The Portfolio commenced operations on the date of this prospectus and does not
have a full calendar year of performance.

Portfolio Fees and Expenses

Annual Portfolio Operating Expenses (expenses deducted from Portfolio assets)

<TABLE>
<CAPTION>
Corporate III Class
- -----------------------------------------------------------------------
<S> <C>

* As of the date of this prospectus, the Portfolio has not yet commenced
operations and Other Expenses are based on estimates for the current fiscal
year.
**The Portfolio's Advisor has agreed to contractually waive fees and reimburse
expenses in order to keep total operating expenses from exceeding 0.64% until
April 30, 2001.

For more information about these fees, see "Investment Advisor" and
"Distribution of Portfolio Shares."

Example

1 Year 3 Years

<PAGE>

ARK Tax-Free Cash Management Portfolio

Portfolio Summary

Investment Goal Maximizing current income exempt from Federal
income taxes and providing liquidity and
security of principal

Investment Focus Short-term, high-quality municipal money
market obligations

Share Price Volatility Very low

Principal Investment Strategy Investing in tax-exempt U.S. dollar-
denominated money market securities

Investor Profile Conservative investors seeking tax-exempt
income through a low-risk, liquid investment

Investment Strategy of the Tax-Free Cash Management Portfolio

The Tax-Free Cash Management Portfolio is a money market funds that seeks its
investment goal by investing substantially all of its assets in a broad range of
high quality, short-term municipal money market instruments that pay interest
that is exempt from Federal income taxes. The issuers of these securities may be
state and local governments and agencies located in any of the 50 states, the
District of Columbia, Puerto Rico and other U.S. territories and possessions.
The Portfolio is well diversified among issuers and comprised only of short-term
debt securities that are rated in the two highest categories by nationally
recognized statistical rating organizations or determined by the Advisor to be
of equal credit quality. The Portfolio will not invest in securities subject to
the alternative minimum tax or in taxable municipal securities.

Principal Risks of Investing in the Tax-Free Cash Management
Portfolio

Page 10 of 19
<PAGE>

Performance Information

The Portfolio commenced operations on the date of this prospectus and does not
have a full calendar year of performance.

Portfolio Fees and Expenses

Annual Portfolio Operating Expenses (expenses deducted from Portfolio assets)

<TABLE>
<CAPTION>
Corporate III Class
- --------------------------------------------------------------------
<S> <C>
Investment Advisory Fees 0.15%
Distribution and Shareholder Service (12b-1) Fees 0.40%
Other Expenses 0.18%*
Total Annual Portfolio Operating Expenses 0.73%
Fee Waivers and Expense Reimbursements 0.09%
Net Total Operating Expenses 0.64%**
</TABLE>

For more information about these fees, see "Investment Advisor" and
"Distribution of Portfolio Shares."

Example

The Example also assumes that each year your investment has a 5% return and
Portfolio

<PAGE>

expenses remain the same. Although your actual costs and returns might be
different, your approximate costs of investing $10,000 in the Portfolio would
be:

<TABLE>
1 Year 3 Years
<S> <C>
$65 $224
</TABLE>

Page 11 of 19
<PAGE>

Additional Information About Risk

<TABLE>
<S> <C>
Risks Portfolios Affected by the Risks

Municipal Issuer Risk -- There may be economic or Tax-Free Cash Management Portfolio
political changes that impact the ability of municipal
issuers to repay principal and to make interest
payments on municipal securities. Changes to the
financial condition or credit rating of municipal
issuers may also adversely affect the value of the
Portfolio's municipal securities. Constitutional or
legislative limits on borrowing by municipal issuers
may result in reduced supplies of municipal
securities. Moreover, certain municipal securities are
backed only by a municipal issuer's ability to levy
and collect taxes.

Year 2000 Risk -- The Portfolios depend on the All Portfolios
smooth functioning of computer systems in almost
every aspect of their business. Like other mutual
funds, businesses and individuals around the world,
the Portfolios could be adversely affected if the
computer systems used by their mission-critical
service providers do not properly process dates on
and after January 1, 2000, and do not distinguish
between the year 2000 and the year 1900, or are
subject to other date recognition or similar systems
issues. Since January 1, 2000, the Portfolios and
their mission-critical service providers have not
experienced any material adverse consequences to
computer systems affecting the Portfolios. The
Portfolios and their shareholders may experience
losses if any computer difficulties are experienced in
the future by issuers of portfolio securities or third
parties, such as custodians, banks, broker-dealers or
others with which the Portfolios do business.
</TABLE>

Page 12 of 19
<PAGE>

Each Portfolio's Other Investments

Investment Advisor

The Portfolio's Investment Advisor makes investment decisions for the Portfolios
and continuously reviews, supervises and administers the Portfolios' respective
investment programs.

The Board of Trustees of the ARK Funds supervises the Advisor and establishes
policies that the Advisor must follow in its management activities.

U.S. Treasury Cash Management Portfolio 0.15%*
U.S. Government Cash Management Portfolio 0.15%*
Prime Cash Management Portfolio 0.15%*
Tax-Free Cash Management Portfolio 0.15%*
__________________

* The Portfolios commenced operations on the date of this prospectus and have
not paid any advisory fees. The Board of Directors has approved an investment
advisory fee of 0.15%, however, the Portfolio's Advisor has agreed to
contractually waive fees and reimburse expenses in order to keep total operating
expenses from exceeding 0.64% until April 30, 2001. With these fee waivers, the
actual advisory fees received by AIA will be lower than 0.15%.

Portfolio Manager

Page 13 of 19
<PAGE>

capacities at Allfirst and currently is a Vice President. Prior to 1987 he
served as the Treasurer for the city of Hyattsville, Maryland.

Purchasing, Selling and Exchanging Portfolio Shares

This section tells you how to purchase, sell (sometimes called "redeem") or
exchange Corporate III Class Shares of the Portfolios.

Purchases of Corporate III Class Shares are subject to minimum investment
requirements, which are described below. For information call 1-888-427-5386.

How to Purchase Portfolio Shares

You may purchase Corporate III Class Shares by placing orders with the Fund's
transfer agent (or its authorized agent). You may purchase shares directly by
Federal funds, wire or other funds immediately available to the Portfolios. A
Portfolio cannot accept checks, third-party checks, credit cards, credit card
checks or cash.

General Information

Page 14 of 19
<PAGE>

A Portfolio or its distributor may reject any purchase order if it is determined
that accepting the order would not be in the best interests of the Portfolio or
its shareholders.

The U.S. Treasury Cash Management Portfolio and Tax-Free Cash Management
Portfolio calculate their NAV each Business Day at 12:00 noon Eastern time and
4:00 p.m. Eastern time. So, for you to be eligible to receive dividends declared
on the day you submit your purchase order, generally the Portfolio must receive
and accept your order and receive Federal funds (readily available funds) before
12:00 noon Eastern time. For orders received and accepted after 12:00 noon
Eastern time but before 4:00 p.m. Eastern time, you will begin earning dividends
on the next Business Day.

When you purchase or sell Corporate III Class Shares through certain financial
institutions (rather than directly from the Fund), you may have to transmit your
purchase and sale requests to your financial institution at an earlier time for
your transaction to become effective that day. This allows your financial
institution time to process your requests and transmit them to the Fund.

When the NYSE or Federal Reserve Bank of New York close early, the Portfolios
will advance the time on any such day by which purchase orders must be received.

How We Calculate NAV

NAV for one Portfolio share is the value of that share's portion of all of the
net assets in the Portfolio.

Minimum Purchases

Page 15 of 19
<PAGE>

How to Sell Your Portfolio Shares

Holders of Corporate III Class Shares may sell shares by telephone or by mail on
any Business Day. If you have questions, call 1-888-427-5386 or your investor
representative.

By Mail. To redeem by mail, send a written request to ARK Funds, P.O. Box 8525,
Boston, MA 02266-8525, or to your correspondent bank and follow their
procedures.

By Telephone. To redeem by telephone, call 1-888-427-5386 or your investor
representative.

Receiving Your Money

Normally, if we receive your redemption request by 12:00 noon Eastern time for
the U.S. Treasury Cash Management or Tax-Free Cash Management Portfolios or
1:30 p.m. Eastern time for the U.S. Government Cash Management and Prime Cash
Management Portfolios on any Business Day, we will send your sale proceeds on
that day. Your proceeds can be wired to your bank account. The Portfolios
reserve the right to charge wire fees to investors. You may not close your
account by telephone.

Suspension of Your Right to Sell Your Shares

Page 16 of 19
<PAGE>

How to Exchange Your Shares

You may exchange your Corporate Class III Shares on any Business Day by
contacting us directly by telephone by calling 1-888-427-5386 or your investor
representative.

An exchange between the Corporate III Class and another class of any Portfolio
is generally not permitted.

Telephone Transactions

Purchasing, selling and exchanging Portfolio shares over the telephone is
extremely convenient, but not without risk. Although the Fund has certain
safeguards and procedures to confirm the identity of callers and the
authenticity of instructions, the Fund is not responsible for any losses or
costs incurred by following telephone instructions we reasonably believe to be
genuine. If you or your financial institution transact with the Fund over the
telephone, you will generally bear the risk of any loss.

Distribution of Portfolio Shares

Distribution fees, as a percentage of average daily net assets of each
Portfolio, are 0.40%.

Page 17 of 19
<PAGE>

Dividends and Distributions

Taxes

Please consult your tax advisor regarding your specific questions about Federal,
state and local income taxes. Below we have summarized some important tax issues
that affect the Portfolios and their shareholders. This summary is based on
current tax laws, which may change.

Each Portfolio will distribute substantially all of its income and capital
gains, if any. The dividends and distributions you receive may be subject to
Federal, state and local taxation, depending upon your tax situation.
Distributions you receive from a Portfolio may be taxable whether or not you
reinvest them. Income distributions are generally taxable at ordinary income tax
rates. Capital gains distributions are generally taxable at the rates applicable
to long-term capital gains. A sale or exchange of shares is generally a taxable
event.

More information about taxes is in the Statement of Additional Information.

Page 18 of 19
<PAGE>

ARK Funds

Investment Advisor

Allied Investment Advisors, Inc.
100 E. Pratt Street
Baltimore, MD 21202

Distributor

SEI Investments Distribution Co.
One Freedom Valley Drive
Oaks, PA 19456

Legal Counsel

Piper Marbury Rudnick & Wolfe LLP
6225 Smith Avenue
Baltimore, MD 21209

Independent Auditors

KPMG LLP
99 High Street
Boston, MA 02110

More information about the Portfolios is available without charge through the
following:

Statement of Additional Information (SAI)

Annual and Semi-Annual Reports

To Obtain More Information:

By Telephone: Call 1-888-427-5386.
<PAGE>

By Mail: Write to us at:

ARK Funds
P.O. Box 8525
Boston, MA 02266-8525

From the SEC: You can also obtain the SAI or the Annual and Semi-Annual Reports,
as well as other information about ARK Funds, from the SEC's website
(http://www.sec.gov). You may review and copy documents at the SEC Public
Reference Room in Washington, DC (for information call (202) 942-8090). You may
request documents by mail from the SEC, upon payment of a duplicating fee, by
(1) writing to: Securities and Exchange Commission, Public Reference Section,
Washington, DC 20549-6009 or (2) sending an electronic request to
[email protected]. ARK Funds' Investment Company Act registration number is
811-7310.

Page 19 of 19
<PAGE>

ARK FUNDS
STATEMENT OF ADDITIONAL INFORMATION
CORPORATE CLASS - CORPORATE II CLASS - CORPORATE III CLASS
April ___, 2000

This Statement of Additional Information is not a prospectus but should be
read in conjunction with the current prospectuses dated April __, 2000, for
Corporate Class, Corporate II Class and Corporate III Class shares of ARK Funds
(the "Fund"). Please retain this document for future reference. Capitalized
terms used by not defined herein have the meanings given them in the
prospectuses. To obtain additional copies of the prospectuses or this Statement
of Additional Information, please call 1-888-427-5386.

Table of Contents Page
- ----------------- ----
<S> <C>
INVESTMENT GOALS AND STRATEGIES........................................... 1

INVESTMENT POLICIES AND LIMITATIONS....................................... 3

INVESTMENT PRACTICES...................................................... 7

PORTFOLIO TRANSACTIONS.................................................... 17

VALUATION OF PORTFOLIO SECURITIES......................................... 18

PORTFOLIO PERFORMANCE..................................................... 19

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION............................ 19

TAXES..................................................................... 21

TRUSTEES AND OFFICERS..................................................... 25

CODE OF ETHICS............................................................ 28

INVESTMENT ADVISOR........................................................ 29

ADMINISTRATOR AND DISTRIBUTOR............................................. 30

TRANSFER AGENT............................................................ 33

DESCRIPTION OF THE FUND................................................... 33

CUSTODIAN................................................................. 35

INDEPENDENT AUDITORS...................................................... 36

APPENDIX A - 2000 TAX RATES............................................... A-1
</TABLE>
<PAGE>

INVESTMENT GOALS AND STRATEGIES

The Fund consists of separate investment portfolios with a variety of
investment objectives and policies. A Portfolio's investment advisor is
responsible for providing a continuous investment program in accordance with its
investment objective and policies. Except for its investment objective and
those policies identified as fundamental, the investment policies of the
Portfolios are not fundamental and may be changed by the Board of Trustees of
the Fund without shareholder approval. The investment objectives and policies
of the Portfolios are set forth below. Additional information regarding the
types of securities in which the Portfolios may invest and certain investment
transactions is provided in the Fund's prospectuses and elsewhere in this
Statement of Additional Information. See "Investment Policies and Limitations."

The U.S. Treasury Cash Management Portfolio, U.S. Government Cash
Management Portfolio, Prime Cash Management Portfolio, and Tax-Free Cash
Management Portfolio (the "Portfolios") invest in high-quality, short-term, U.S.
dollar-denominated instruments determined by the adviser to present minimal
credit risks in accordance with guidelines adopted by the Board of Trustees.
The Portfolios seek to maintain a net asset value per share of $1.00, limit
their investments to securities with remaining maturities of 397 days or less,
and maintain a dollar-weighted average maturity of 90 days or less. Estimates
may be used in determining a security's maturity for purposes of calculating
average maturity. An estimated maturity can be substantially shorter than a
stated final maturity. Although the Portfolios' policies are designed to help
maintain a stable $1.00 share price, all money market instruments can change in
value when interest rates or issuers' creditworthiness change, or if an issuer
or guarantor of a security fails to pay interest or principal when due. If
these changes in value are large enough, a Portfolio's share price could fall
below $1.00. In general, securities with longer maturities are more vulnerable
to price changes, although they may provide higher yields.

The investment goal of the U.S. Treasury Cash Management Portfolio is to
maximize current income and provide liquidity and security of principal by
investing in instruments which are issued or guaranteed as to principal and
interest by the U.S. government and thus constitute direct obligations of the
United States. As a non-fundamental operating policy, the Portfolio invests
100% of its total assets in U.S. Treasury bills, notes and bonds, and limits its
investments to U.S. Treasury obligations that pay interest which is specifically
exempt from state and local taxes under Federal law.

The investment goal of the U.S. Government Cash Management Portfolio is to
maximize current income and provide liquidity and security of principal by
investing in instruments which are issued or guaranteed as to principal and
interest by the U.S. government or any of its agencies or instrumentalities
("U.S. Government Securities"), or in repurchase agreements backed by such
instruments. As a non-fundamental policy, the Portfolio invests

1
<PAGE>

100% of its assets in U.S. Government Securities and in repurchase agreements
backed by such instruments. The Portfolio normally may not invest more than 5%
of its total assets in the securities of any single issuer (other than the U.S.
government). Under certain conditions, however, the Portfolio may invest up to
25% of its total assets in first-tier securities of a single issuer for up to
three days.

The investment goal of the Prime Cash Management Portfolio is to maximize
current income and provide liquidity and security of principal by investing in
abroad range of short-term, high-quality U.S. dollar-denominated debt securities
("Money Market Instruments"). At least 95% of the assets of the Portfolio will
be invested in securities that have received the highest rating assigned by any
two nationally recognized statistical rating organizations ("NRSROs") or, if
only one such rating organization has assigned a rating, such single
organization. Up to 5% of the Portfolio's assets may be invested in securities
that have received ratings in the second highest category by any two NRSROs or,
if only one such rating organization has assigned a rating, such single
organization. The Portfolio may also acquire unrated securities determined by
the advisor to be comparable in quality to rated securities in accordance with
guidelines adopted by the Board of Trustees. The Portfolio may invest in U.S.
dollar-denominated obligations of U.S. banks and foreign branches of U.S. banks
("Eurodollars"), U.S. branches and agencies of foreign banks ("Yankee dollars"),
and foreign branches of foreign banks. The Portfolio may also invest more than
25% of its total assets in certain obligations of domestic banks and normally
may not invest more than 5% of its total assets in the securities of any single
issuer (other than the U.S. government). Under certain conditions, however, the
Portfolio may invest up to 25% of its total assets in first-tier securities of a
single issuer for up to three days.

The investment goal of the Tax-Free Cash Management Portfolio is to provide
a high level of interest income by investing primarily in high-quality municipal
obligations that are exempt from Federal income taxes. The Portfolio attempts to
invest 100% of its assets in securities exempt from Federal income tax (not
including the alternative minimum tax), and maintains a fundamental policy that
at least 80% of its income will, under normal market conditions, be exempt from
Federal income tax, including the Federal alternative minimum tax. The Portfolio
invests in high-quality, short-term municipal securities but may also invest in
high-quality, long-term fixed, variable, or floating rate instruments (including
tender option bonds) which have demand features or interest rate adjustment
features that result in interest rates, maturities, and prices similar to short-
term instruments. The Portfolio's investments in municipal securities may
include tax, revenue, or bond anticipation notes; tax-exempt commercial paper;
general obligation or revenue bonds (including municipal lease obligations and
resource recovery bonds); and zero coupon bonds. At least 95% of the assets of
the Portfolio will be invested in securities that have received the highest
rating assigned by any two NRSROs or, if only one such rating organization has
assigned a rating, such single

2
<PAGE>

organization. The Portfolio may also acquire unrated securities determined by
the advisor to be of comparable quality in accordance with guidelines adopted by
the Board of Trustees.

The Portfolios' advisor anticipates that the Tax-Free Cash Management
Portfolio will be as fully invested as is practicable in municipal obligations.
However, the Portfolio reserves the right for temporary defensive purposes to
invest without limitation in taxable Money Market Instruments. There may be
occasions when, as a result of maturities of portfolio securities or sales of
portfolio shares, or in order to meet anticipated redemption requests, the
Portfolios may hold cash which is not earning income.

The Tax-Free Cash Management Portfolio may invest up to 25% of its net
assets in a single issuer's securities. The Portfolio may invest any portion of
its assets in industrial revenue bonds ("IRBs") backed by private companies, and
may invest up to 25% of its total assets in IRBs related to a single industry.
The Portfolio also may invest 25% or more of its total assets in tax-exempt
securities whose revenue sources are from similar types of projects (e.g.,
education, electric utilities, health care, housing, transportation, water,
sewer, and gas utilities). There may be economic, business or political
developments or changes that affect all securities of a similar type.
Therefore, developments affecting a single issuer or industry, or securities
financing similar types of projects, could have a significant effect on the
Portfolios' performance.

INVESTMENT POLICIES AND LIMITATIONS

The following policies and limitations supplement those set forth in the
prospectuses. Unless otherwise expressly noted, whenever an investment policy
or limitation states a maximum percentage of a Portfolio's assets that may be
invested in any security or other asset, or sets forth a policy regarding
quality standards, such percentage or standard will be determined immediately
after and as a result of the Portfolio's acquisition of such security or other
asset. Accordingly, any subsequent change in value, net assets, or other
circumstances will not be considered when determining whether the investment
complies with the Portfolio's investment policies and limitations.

3
<PAGE>

The Portfolios' investment limitations are listed in the following tables.
Fundamental investment policies and limitations cannot be changed without
approval by a "majority of the outstanding voting securities" (as defined in the
1940 Act) of a Portfolio.

<TABLE>
<CAPTION>
Fundamental Policies: Portfolios to which the
Policy Applies:

<S> <C>
The Portfolio may not issue senior securities, except as All Portfolios
permitted under the 1940 Act.

The Portfolio may not borrow money, except that the Portfolio All Portfolios
may (i) borrow money from a bank for temporary or emergency
purposes (not for leveraging or investment) and (ii) engage in
reverse repurchase agreements for any purpose; provided that
(i) and (ii) in combination do not exceed 33 1/3% of the value
of the Portfolio's total assets (including the amount
borrowed) less liabilities (other than borrowings) Any
borrowings that come to exceed this amount will be reduced
within three business days to the extent necessary to comply
with the 33 1/3% limitation.

The Portfolio may not with respect to 75% of its total assets, All Portfolios
purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its
agencies or instrumentalities) if, as a result, (a) more than
5% of the Portfolio's total assets would be invested in the
securities of that issuer, or (b) the Portfolio would hold
more than 10% of the outstanding voting securities of that
issuer.
</TABLE>

4
<PAGE>

<TABLE>
<CAPTION>
Fundamental Policies: Portfolios to which the
Policy Applies:

<S> <C>
The Portfolio may not underwrite securities issued by others, All Portfolios
except to the extent that the Portfolio may be considered an
underwriter within the meaning of the Securities Act of 1933
in the disposition of portfolio securities.

The Portfolios may not purchase the securities of any issuer U.S. Treasury Cash
(other than securities issued or guaranteed by the U.S. Management Portfolio and
government or any of its agencies or instrumentalities) if, as U.S. Government Cash
a result, more than 25% of the Portfolio's total assets would Management Portfolio
be invested in the securities of companies whose principal
business activities are in the same industry.

The Portfolio may not purchase the securities of any issuer Prime Cash Management
(other than securities issued or guaranteed by the U.S. Portfolio
government or any of its agencies or instrumentalities) if, as
a result, more than 25% of the Portfolio's total assets would
be invested in the securities of companies whose principal
business activities are in the same industry, except that the
Portfolio may invest 25% or more of its assets in obligations
of domestic banks.

The Portfolios may not purchase or sell real estate unless All Portfolios
acquired as a result of ownership of securities or other
instruments (but this shall not prevent the Portfolios from
investing in securities or other instruments backed by real
estate or securities of companies engaged in the real estate
business).

The Portfolios may not purchase or sell commodities unless All Portfolios
acquired as a result of ownership of securities or other
instruments.

The Portfolio may not lend any security or make any other loan All Portfolios
if, as a result, more than 33 1/3% of its total assets would
be lent to other parties, but this limitation does not apply
to purchases of debt securities or to repurchase agreements.
</TABLE>

5
<PAGE>

The Following Investment Limitations Are Not Fundamental and May be Changed
Without Shareholder Approval:

<TABLE>
<CAPTION>
Non-Fundamental Policies: Portfolios to which the
Policy Applies:
<S> <C>
The Portfolio does not currently intend to sell securities All Portfolios
short, unless it owns or has the right to obtain securities
equivalent in kind and amount to the securities sold short,
and provided that transactions in futures contracts and
options are not deemed to constitute selling securities short.

The Portfolio does not currently intend to purchase a security U.S. Government Cash
(other than a security issued or guaranteed by the U.S. Management Portfolio and
government or any of its agencies or instrumentalities) if, as Prime Cash Management
a result, more than 5% of a Portfolio's total assets would be Portfolio
invested in the securities of a single issuer; provided that
the Portfolio may invest up to 25% of its total assets in the
first tier securities of a single issuer for up to three
business days.

The Portfolio will not purchase any security while borrowings All Portfolios
(including reverse repurchase agreements) representing more
than 5% of its total assets are outstanding.

The Portfolio does not currently intend to purchase securities All Portfolios
on margin, except that the Portfolio may obtain such
short-term credits as are necessary for the clearance of
transactions, and provided that margin payments in connection
with futures contracts and options shall not constitute
purchasing securities on margin.

The Portfolio does not currently intend to engage in repurchase U.S. Treasury Cash
agreements or make loans, but this limitation does not apply Management Portfolio and
to purchases of debt securities. Tax-Free Cash
Management Portfolio

The Portfolio does not currently intend to purchase securities All Portfolios
of other investment companies, except to the extent permitted
by the 1940 Act.
</TABLE>

6
<PAGE>

Non-Fundamental Policies: Portfolios to which the
Policy Applies:
<S> <C>
The Portfolio does not currently intend to purchase any All Portfolios
security if, as a result, more than 10% of its net assets
would be invested in securities that are deemed to be illiquid
because they are subject to legal or contractual restrictions
on resale or because they cannot be sold or disposed of in the
ordinary course of business at approximately the prices at
which they are valued.
</TABLE>

INVESTMENT PRACTICES

The Portfolios may engage in the following investment practices consistent
with their investment objectives, policies and restrictions. Please refer to
the current prospectuses and the section "Investment Policies and Limitations"
contained in this Statement of Additional Information for a further description
of each Portfolio's investment objectives, policies and restrictions.

Delayed Delivery Transactions

Buying securities on a delayed-delivery or when-issued basis and sell
securities on a delayed-delivery basis involve a commitment by the Portfolio to
purchase or sell specific securities at a predetermined price and/or yield, with
payment and delivery taking place after the customary settlement period for that
type of security (and more than seven days in the future). Typically, no
interest accrues to the purchaser until the security is delivered. The
Portfolio may receive fees for entering into delayed-delivery transactions.

When purchasing securities on a delayed-delivery or when-issued basis, the
Portfolio assumes the rights and risks of ownership, including the risk of price
and yield fluctuations. Because the Portfolio is not required to pay for
securities until the delivery date, these risks are in addition to the risks
associated with the Portfolio's other investments. If the Portfolio remains
substantially fully invested at a time when delayed-delivery or when-issued
purchases are outstanding, such purchases may result in a form of leverage.
When delayed-delivery or when-issued purchases are outstanding, the Portfolio
will set aside appropriate liquid assets in a segregated custodial account to
cover its purchase obligations. When the Portfolio has sold a security on a
delayed-delivery basis, the Portfolio does not participate in further gains or
losses with respect to the security. If the other party to a delayed-delivery
transaction fails to

7
<PAGE>

deliver or pay for the securities, the Portfolio could miss a favorable price or
yield opportunity, or could suffer a loss.

The Portfolio may renegotiate delayed-delivery or when-issued transactions
after they are entered into, and may sell underlying securities before they are
delivered, which may result in capital gains or losses.

Federally Taxable Obligations

The Tax-Free Cash Management Portfolio generally does not intend to invest
in securities whose interest is taxable; however, from time to time the
Portfolio may invest on a temporary basis in fixed-income obligations whose
interest is subject to Federal income tax. For example, the Portfolio may
invest in obligations whose interest is taxable pending the investment or
reinvestment in municipal securities of proceeds from the sale of its shares or
sales of portfolio securities.

Should the Portfolio invest in taxable obligations, it would purchase
securities that, in the advisor's judgment, are of high quality. This would
include obligations issued or guaranteed by the U.S. government, its agencies or
instrumentalities, obligations of domestic banks and repurchase agreements. The
Portfolios' standards for high-quality taxable obligations are essentially the
same as those described by Moody's in rating corporate obligations within its
two highest ratings of Prime-1 and Prime-2, and those described by S&P in rating
corporate obligations within its two highest ratings of A-1 and A-2. The
Portfolios may also acquire unrated securities determined by the advisor to be
of comparable quality in accordance with guidelines adopted by the Board of
Trustees.

The Supreme Court of the United States has held that Congress may subject
the interest on municipal obligations to Federal income tax. Proposals to
restrict or eliminate the Federal income tax exemption for interest on municipal
obligations are introduced before Congress from time to time. Proposals may
also be introduced before state legislatures that would affect the state tax
treatment of the Portfolios' distributions. If such proposals were enacted, the
availability of municipal obligations and the value of the Portfolios' holdings
would be affected and the Board of Trustees would reevaluate the Portfolios'
investment objectives and policies.

The Tax-Free Cash Management Portfolio anticipates being as fully invested
in municipal securities as is practicable; however, there may be occasions when
as a result of maturities of portfolio securities, or sales of portfolio shares,
or in order to meet redemption requests, the Portfolio may hold cash that is not
earning income. In addition, there may be occasions when, in order to raise
cash to meet redemptions or to preserve credit quality, the Portfolio may be
required to sell securities at a loss.

8
<PAGE>

Illiquid Investments

Illiquid investments cannot be sold or disposed of in the ordinary course
of business at approximately the prices at which they are valued. Under the
supervision of the Board of Trustees, the Portfolios' advisor determines the
liquidity of the Portfolio's investments and, through reports from the advisor,
the Board monitors investment in illiquid instruments. In determining the
liquidity of the Portfolios' investments, the advisor may consider various
factors including (1) the frequency of trades and quotations, (2) the number of
dealers and prospective purchasers in the marketplace, (3) dealer undertakings
to make a market, (4) the nature of the security (including any demand or tender
features), (5) the nature of the marketplace for trades (including the ability
to assign or offset the Portfolio's rights and obligations relating to the
investment), and (6) general credit quality. Investments currently considered
by the Portfolios to be illiquid include repurchase agreements not entitling the
holder to payment of principal and interest within seven days, non-government
stripped fixed-rate mortgage-backed securities and government stripped fixed-
rate mortgage-backed securities, loans and other direct debt instruments, over-
the-counter options and swap agreements. Although restricted securities and
municipal lease obligations are sometimes considered illiquid, the Portfolios'
advisor may determine certain restricted securities and municipal lease
obligations to be liquid. In the absence of market quotations, illiquid
investments are valued for purposes of monitoring amortized cost valuation at
fair value as determined in good faith by a committee appointed by the Board of
Trustees. If, as a result of a change in values, net assets or other
circumstances, the Portfolio were in a position where more than 10% of its
assets were invested in illiquid securities, it would seek to take appropriate
steps to protect liquidity.

Loans and Other Direct Debt Instruments

Direct debt instruments are interests in amounts owed by a corporate,
governmental or other borrower to lenders or lending syndicates (loans and loan
participations), to suppliers of goods or services (trade claims or other
receivables), or to other parties. Direct debt instruments are subject to the
Portfolio's policies regarding the quality of debt securities.

Purchasers of loans and other forms of direct indebtedness depend primarily
upon the creditworthiness of the borrower for payment of principal and interest.
Direct debt instruments may not be rated by any NRSRO. If the Portfolio does
not receive scheduled interest or principal payments on such indebtedness, its
share price and yield could be adversely affected. Loans that are fully secured
offer the Portfolio more protections than an unsecured loan in the event of non-
payment of scheduled interest or principal. However, there is no assurance that
the liquidation of collateral from a secured loan would satisfy the borrower's
obligation, or that the collateral can be liquidated. Indebtedness of borrowers
whose creditworthiness is poor involves substantially greater risks, and may be
highly speculative. Borrowers that are in bankruptcy or restructuring may never
pay off their

9
<PAGE>

indebtedness, or may pay only a small fraction of the amount owed. Direct
indebtedness of developing countries also will involve a risk that the
governmental entities responsible for the repayment of the debt may be unable,
or unwilling, to pay interest and repay principal when due.

Investments in loans through direct assignment of a financial institution's
interests with respect to a loan may involve additional risks to the Portfolio.
For example, if a loan is foreclosed, the Portfolio could become part owner of
any collateral, and would bear the costs and liabilities associated with owning
and disposing of the collateral. In addition, it is conceivable that under
emerging legal theories of lender liability, the Portfolio could be held liable
as a co-lender. Direct debt instruments also may involve a risk of insolvency
of the lending bank or other intermediary. Direct debt instruments that are not
in the form of securities may offer less legal protection to the Portfolio in
the event of fraud or misrepresentation. In the absence of definitive regulatory
guidance, the Portfolio's advisor will conduct research and analysis in an
attempt to avoid situations where fraud or misrepresentation could adversely
affect the Portfolio.

A loan is often administered by a bank or other financial institution which
acts as agent for all holders. The agent administers the terms of the loan, as
specified in the loan agreement. Unless, under the terms of the loan or other
indebtedness, the Portfolio has direct recourse against the borrower, it may
have to rely on the agent to apply appropriate credit remedies against the
borrower. If assets held by the agent for the benefit of the Portfolio were
determined to be subject to the claims of the agent's general creditors, the
Portfolio might incur certain costs and delays in realizing payment on the loan
or loan participation and could suffer a loss of principal or interest.

The Portfolios limit the amount of total assets that they will invest in
any one issuer or in issuers within the same industry (see fundamental
limitations for the Portfolios). For purposes of these limitations, the
Portfolio generally will treat the borrower as the "issuer" of indebtedness held
by the Portfolio. In the case of loan participations where a bank or other
lending institution serves as financial intermediary between the Portfolio and
the borrower, if the participation does not shift to the Portfolio the direct
debtor-creditor relationship with the borrower, SEC interpretations require the
Portfolio, in appropriate circumstances, to treat both the lending bank or other
lending institution and the borrower as "issuers" for the purposes of
determining whether the Portfolio has invested more than 5% of its total assets
in a single issuer. Treating a financial intermediary as an issuer of
indebtedness may restrict the Portfolio's ability to invest in indebtedness
related to a single financial intermediary, or a group of intermediaries engaged
in the same industry, even if the underlying borrowers represent many different
companies and industries.

10
<PAGE>

Market Disruption Risk

The value of municipal securities may be affected by uncertainties in the
municipal market related to legislation or litigation involving the taxation of
municipal securities or the rights of municipal securities holders in the event
of a bankruptcy. Municipal bankruptcies are relatively rare, and certain
provisions of the U.S. Bankruptcy Code governing such bankruptcies are unclear
and remain untested. Further, the application of state law to municipal issuers
could produce varying results among the states or among municipal securities
issuers within a state. These legal uncertainties could affect the municipal
securities market generally, certain specific segments of the market, or the
relative credit quality of particular securities.

Any of these effects could have a significant impact on the prices of some
or all of the municipal securities held by the Portfolio. Investing in these
securities may make it more difficult to maintain a stable net asset value per
share.

Municipal Lease Obligations

Municipal leases and participation interests therein, which may take the
form of a lease, an installment purchase, or a conditional sale contract, are
issued by state and local governments and authorities to acquire land and a wide
variety of equipment and facilities, such as fire and sanitation vehicles,
telecommunications equipment, and other capital assets. Generally, the
Portfolios will not hold such obligations directly as a lessor of the property,
but will purchase a participation interest in a municipal obligation from a bank
or other third party. A participation interest gives the Portfolio a specified,
undivided interest in the obligation in proportion to its purchased interest in
the total amount of the obligation.

Municipal leases frequently have risks distinct from those associated with
general obligation or revenue bonds. State constitutions and statutes set forth
requirements that states or municipalities must meet to incur debt. These may
include voter referenda, interest rate limits, or public sale requirements.
Leases, installment purchases, or conditional sale contracts (which normally
provide for title to the leased asset to pass to the governmental issuer) have
evolved as a means for governmental issuers to acquire property and equipment
without meeting their constitutional and statutory requirements for the issuance
of debt. Many leases and contracts include "non-appropriation" clauses
providing that the governmental issuer has no obligation to make future payments
under the lease or contract unless money is appropriated for such purpose by the
appropriate legislative body on a yearly or other periodic basis. Non-
appropriation clauses free the issuer from debt issuance obligations.

In determining the liquidity of a municipal lease obligation, the
Portfolio's advisor will differentiate between direct municipal leases and
municipal lease-backed securities, the latter of which may take the form of a
lease-backed revenue bond, a tax-exempt asset-backed

11
<PAGE>

security, or any other investment structure using a municipal lease-purchase
agreement as its base. While the former may present liquidity issues, the latter
are based on a well-established method of securing payment of a municipal lease
obligation.

Refunding Contracts

Refunding obligations require the issuer to sell and the Portfolio to buy
refunded municipal obligations at a stated price and yield on a settlement date
that may be several months or years in the future. The Portfolio generally will
not be obligated to pay the full purchase price if it fails to perform under a
refunding contract. Instead, refunding contracts generally provide for payment
of liquidated damages to the issuer (currently 15% to 20% of the purchase
price). The Portfolio may secure its obligations under a refunding contract by
depositing collateral or a letter of credit equal to the liquidated damages
provisions of the refunding contract. When required by SEC guidelines, the
Portfolio will place liquid assets in a segregated custodial account equal in
amount to its obligations under refunding contracts.

Repurchase Agreements

In a repurchase agreement, the Portfolio purchases a security and
simultaneously commits to resell it to the seller at an agreed upon price on an
agreed upon date. The resale price reflects the purchase price plus an agreed-
upon incremental amount which is unrelated to the coupon rate or maturity of the
purchased security. A repurchase agreement involves the obligation of the
seller to pay the agreed-upon price, which obligation is in effect secured by
the value (at least equal to the amount of the agreed-upon resale price and
marked to market daily) of the underlying security. The risk associated with
repurchase agreements is that a Portfolio may be unable to sell the collateral
at its full value in the event of the seller's default. While it does not
presently appear possible to eliminate all risks from these transactions
(particularly the possibility of a decline in the market value of the underlying
securities, as well as delays and costs to the Portfolio in connection with
bankruptcy proceedings), it is each Portfolio's current policy to limit
repurchase agreements to those parties whose creditworthiness has been reviewed
and found satisfactory by its advisor.

Restricted Securities

Restricted securities are securities that generally can only be sold in
privately negotiated transactions, pursuant to an exemption from registration
under the Securities Act of 1933, or in a registered public offering. Where
registration is required, the Portfolio may be obligated to pay all or part of
the registration expense and a considerable period may elapse between the time
it decides to seek registration and the time it may be permitted to sell a
security under an effective registration statement. If, during such a period,
adverse market conditions were to develop, the Portfolio might obtain a less
favorable price than prevailed when it decided to seek registration of the
security.

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Reverse Repurchase Agreements

In a reverse repurchase agreement, the Portfolio sells a portfolio
instrument to another party, such as a bank or broker-dealer, in return for cash
and agrees to repurchase the instrument at a particular price and time. While a
reverse repurchase agreement is outstanding, the Portfolio will maintain
appropriate liquid assets in a segregated custodial account to cover its
obligation under the agreement. The Portfolio will enter into reverse
repurchase agreements only with parties whose creditworthiness has been found
satisfactory by its advisor. These transactions may increase fluctuations in
the market value of the Portfolio's assets and may be viewed as a form of
leverage.

Sovereign Debt Obligations

Sovereign debt instruments are securities issued or guaranteed by foreign
governments or their agencies, including debt of Latin American nations or other
developing countries. Sovereign debt may be in the form of conventional
securities or other types of debt instruments, such as loans or loan
participations. Sovereign debt of developing countries may involve a high
degree of risk, and may be in default or present the risk of default.
Governmental entities responsible for repayment of the debt may be unable or
unwilling to repay principal and interest when due, and may require negotiations
or rescheduling of debt payments. In addition, prospects for repayment of
principal and interest may depend on political as well as economic factors.
Although some sovereign debt, such as Brady Bonds, is collateralized by U.S.
government securities, repayment of principal and interest is not guaranteed by
the U.S. government.

Standby Commitments

The Tax-Free Cash Management Portfolio may invest in standby commitments.
These obligations are puts that entitle holders to same day settlement at an
exercise price equal to the amortized cost of the underlying security plus
accrued interest, if any, at the time of exercise. The Portfolio may acquire
standby commitments to enhance the liquidity of portfolio securities when the
issuers of the commitments present minimal risk of default.

Ordinarily a Portfolio will not transfer a standby commitment to a third
party, although it could sell the underlying municipal security to a third party
at any time. The Portfolio may purchase standby commitments separate from or in
conjunction with the purchase of securities subject to such commitments. In the
latter case, a Portfolio would pay a higher price for the securities acquired,
thus reducing their yield to maturity. Standby commitments will not affect the
dollar-weighted average maturity of the Portfolio, or the valuation of the
securities underlying the commitments.

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Standby commitments are subject to certain risks, including the ability of
issuers of standby commitments to pay for securities at the time the commitments
are exercised; the fact that standby commitments are not marketable by the
Portfolio and the possibility that the maturities of the underlying securities
may be different from those of the commitments.

Swap Agreements

Swap agreements can be individually negotiated and structured to include
exposure to a variety of different types of investments or market factors.
Depending on their structure, swap agreements may increase or decrease the
Portfolio's exposure to long- or short-term interest rates (in the United States
or abroad), foreign currency values, mortgage securities, corporate borrowing
rates, or other factors such as security prices or inflation rates. Swap
agreements can take many different forms and are known by a variety of names. A
Portfolio is not limited to any particular form of swap agreement if its advisor
determines it is consistent with the Portfolio's investment objective and
policies.

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

Swap agreements will tend to shift the Portfolio's investment exposure from
one type of investment to another. For example, if the Portfolio agreed to
exchange payments in dollars for payments in foreign currency, the swap
agreement would tend to decrease the Portfolio's exposure to U.S. interest rates
and increase its exposure to foreign currency and interest rates. Caps and
floors have an effect similar to buying or writing options. Depending on how
they are used, swap agreements may increase or decrease the overall volatility a
Portfolio's investments and its share price and yield.

The most significant factor in the performance of swap agreements is the
change in the specific interest rate, currency, or other factors that determine
the amounts of payments due to and from a Portfolio. If a swap agreement calls
for payments by a Portfolio, the Portfolio must be prepared to make such
payments when due. In addition, if the counterparty's creditworthiness
declined, the value of a swap agreement would be likely to decline, potentially
resulting in losses. The Portfolios expect to be able to reduce their exposure
under swap agreements either by assignment or other disposition, or by entering
into an offsetting swap agreement with the same party or a similarly
creditworthy party.

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The Portfolio will maintain appropriate liquid assets in segregated
custodial accounts to cover its current obligations under swap agreements. If a
Portfolio enters into a swap agreement on a net basis, it will segregate assets
with a daily value at least equal to the excess, if any, of the Portfolio's
accrued obligations under the swap agreement over the accrued amount the
Portfolio is entitled to receive under the agreement. If a Portfolio enters
into a swap agreement on other than a net basis, it will segregate assets with a
value equal to the full amount of the Portfolio's accrued obligations under the
agreement.

Tender Option Bonds

The Tax-Free Cash Management Portfolio may invest in tender option bonds.
These bonds are created by coupling an intermediate- or long-term fixed-rate
tax-exempt bond (generally held pursuant to a custodial agreement) with a tender
agreement that gives the holder the option to tender the bond at its face value.
As consideration for providing the tender option, the sponsor (usually a bank,
broker-dealer, or other financial institution) receives periodic fees equal to
the difference between the bond's fixed coupon rate and the rate (determined by
a remarketing or similar agent) that would cause the bond, coupled with the
tender option to trade at par on the date of such determination. After payment
of the tender option fee, the Portfolio effectively holds a demand obligation
that bears interest at the prevailing short-term tax-exempt rate. Subject to
applicable regulatory requirements, the Tax-Free Cash Management Portfolio may
buy tender option bonds if the agreement gives the Portfolio the right to tender
the bond to its sponsor no less frequently than once every 397 days. In
selecting tender option bonds for a Portfolio, the advisor will, pursuant to
procedures established by the Board of Trustees, consider the creditworthiness
of the issuer of the underlying bond, the custodian, and the third-party
provider of the tender option. In certain instances, a sponsor may terminate a
tender option if, for example, the issuer of the underlying bond defaults on
interest payments.

Variable or Floating Rate Demand Obligations

The Prime Cash Management Portfolio and Tax-Free Cash Management Portfolio
may invest in variable or floating rate demand obligations (VRDOs/FRDOs). These
obligations are tax-exempt obligations that bear variable or floating interest
rates and carry rights that permit holders to demand payment of the unpaid
principal balance plus accrued interest from the issuers or certain financial
intermediaries. Floating rate obligations have interest rates that change
whenever there is a change in a designated base rate while variable rate
obligations provide for a specified periodic adjustment in the interest rate.
These formulas are designed to result in a market value for the VRDO or FRDO
that approximates its par value.

A demand obligation with a conditional demand feature must have received
both a short-term and a long-term high quality rating from a NRSRO or, if
unrated, have been determined by the Portfolio's advisor to be of comparable
quality pursuant to procedures

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adopted by the Board of Trustees. A demand obligation with an unconditional
demand feature may be acquired solely in reliance upon a short-term high quality
rating or, if unrated, upon finding of comparable short-term quality pursuant to
procedures adopted by the Board.

A Portfolio may invest in fixed-rate bonds that are subject to third party
puts and in participation interests in such bonds held by a bank in trust or
otherwise. These bonds and participation interests have tender options or
demand features that permit a Portfolio to tender (or put) the bonds to an
institution at periodic intervals of up to one year and to receive the principal
amount thereof. A Portfolio considers variable rate obligations structured in
this way (participating VRDOs) to be essentially equivalent to other VRDOs that
it may purchase. The Internal Revenue Service (the "IRS") has not ruled whether
or not the interest on participating VRDOs is tax-exempt and, accordingly, the
Portfolios intend to purchase these obligations based on opinions of bond
counsel.

A variable rate instrument that matures in 397 or fewer days may be deemed
to have a maturity equal to the period remaining until the next readjustment of
the interest rate. A variable rate obligation that matures in more than 397
days but that is subject to a demand feature that is 397 days or fewer may be
deemed to have a maturity equal to the longer of the period remaining until the
next readjustment of the interest rate or the period remaining until the
principal amount can be recovered through demand. A floating rate obligation
that is subject to a demand feature may be deemed to have a maturity equal to
the period remaining until the principal amount may be recovered through demand.
The Portfolios may purchase a demand obligation with a remaining final maturity
in excess of 397 days only if the demand feature can be exercised on no more
than 30 days' notice (a) at any time or (b) at specific intervals not exceeding
397 days.

Variable or Floating Rate Instruments

The Portfolios may invest in variable or floating rate instruments that
ultimately mature in more than 397 days, if the Portfolio acquires a right to
sell the securities that meet certain requirements set forth in Rule 2a-7 under
the 1940 Act. Variable rate instruments (including instruments subject to a
demand feature) that mature in 397 days or less may be deemed to have maturities
equal to the period remaining until the next readjustment of the interest rate.
Other variable rate instruments with demand features may be deemed to have a
maturity equal to the longer of the period remaining until the next readjustment
of the interest rate or the period remaining until the principal amount can be
recovered through demand. A floating rate instrument subject to a demand
feature may be deemed to have a maturity equal to the period remaining until the
principal amount can be recovered through demand.

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Transportation

Transportation debt may be issued to finance the construction of airports,
toll roads, and highways. Airport bonds are dependent on the general stability
of the airline industry and stability of a specific carrier which uses the
airport as a hub. Air traffic generally follows broader economic trends and is
also affected by the price and availability of fuel. Toll-road bonds are also
affected by the cost and availability of fuel as well as toll levels, the
presence of competing roads and the general economic health of an area. Fuel
costs and availability also affect other transportation-related services, as do
the presence of alternate forms of transportation, such as public
transportation.

PORTFOLIO TRANSACTIONS

The Portfolios' advisor seeks the most favorable execution result with
respect to transactions. In seeking the most favorable execution, the advisor,
having in mind a Portfolio's best interest, considers all factors it deems
relevant, including, by way of illustration: price; the size of the
transaction; the nature of the market for the security; the amount of the
commission; the timing of the transaction, taking into account market process
and trends; the reputation, experience and financial stability of the broker-
dealer involved; and the quality of service rendered by the broker-dealer in
other transactions. For additional information about the Portfolios' advisor,
see "Investment Advisor" below.

Certain investments may be appropriate for a Portfolio and for other
clients advised by the advisor. Investment decisions for a Portfolio and other
clients are made with a view to achieving their respective investment objectives
and after consideration of such factors as their current holdings, availability
of cash for investment, and the size of their investments generally. A
particular security may be bought or sold for only one client or in different
amounts and at different times for more than one but fewer than all clients.
Likewise, a particular security may be bought for one or more clients when one
or more other clients are selling the security. In addition, purchases or sales
of the same security may be made for two or more clients of the advisor on the
same day. In each of these situations, the transactions will be allocated among
the clients in a manner considered by the advisor to be equitable to each. In
some cases, this procedure could have an adverse effect on the price or amount
of the securities purchased or sold by a Portfolio. Purchase and sale orders
for a Portfolio may be combined with those of other clients in the interest of
achieving the most favorable execution for the Portfolio.

As of the date of this Statement of Additional Information, the Portfolios
have not yet commenced operations and have not paid any brokerage
commissions.

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The Fund is required to identify any securities of its "regular brokers or
dealers" (as such term is defined in the 1940 Act) which the Fund has acquired
during its most recent fiscal year. As of the date of this Statement of
Additional Information, the Portfolios had not yet commenced operations and had
not acquired any securities of its "regular brokers or dealers."

VALUATION OF PORTFOLIO SECURITIES

Each Portfolio values its investments on the basis of amortized cost. This
method involves valuing an instrument at its cost as adjusted for amortization
of premium or accretion of discount rather than its value based on current
market quotations or appropriate substitutes which reflect current market
conditions. The amortized cost value of an instrument may be higher or lower
than the price the Portfolio would receive if it sold the instrument.

Valuing a Portfolio's instruments on the basis of amortized cost and use of
the term "money market portfolio" are permitted by Rule 2a-7 under the 1940 Act.
Each Portfolio must adhere to certain conditions under Rule 2a-7.

The Board of Trustees oversees the advisor's adherence to SEC rules
concerning money market funds, and has established procedures designed to
stabilize each Portfolio's net asset value per share ("NAV") at $1.00. At such
intervals as they deem appropriate, the trustees consider the extent to which
NAV calculated by using market valuations would deviate from $1.00 per share.
If the trustees believe that a deviation from the Portfolio's amortized cost per
share may result in material dilution or other unfair results to shareholders,
the trustees will take such corrective action, if any, as they deem appropriate
to eliminate or reduce, to the extent reasonably practicable, such dilution or
other unfair result. Such corrective action could include selling portfolio
instruments prior to maturity to realize capital gains or losses or to shorten
average portfolio maturity; withholding dividends; redeeming shares in kind;
establishing NAV by using available market quotations; and such other measures
as the trustees may deem appropriate.

During periods of declining interest rates, a Portfolio's yield based on
amortized cost may be higher than the yield based on market valuations. Under
these circumstances, a shareholder in the Portfolio would be able to obtain a
somewhat higher yield than would result if the Portfolio utilized market
valuations to determine its NAV. The converse would apply in a period of rising
interest rates.

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PORTFOLIO PERFORMANCE

Yield Calculations

In computing the yield of shares of a Portfolio for a period, the net
change in value of a hypothetical account containing one share reflects the
value of additional shares purchased with dividends from the one original share
and dividends declared on both the original share and any additional shares.
The net change is then divided by the value of the account at the beginning of
the period to obtain a base period return. This base period return is
annualized to obtain a current annualized yield. A Portfolio may also calculate
a compounded effective yield for its shares by compounding the base period
return over a one-year period. In addition to the current yield, the Portfolios
may quote yields in advertising based on any historical seven-day period.
Yields for the shares of the Portfolios are calculated on the same basis as
other money market funds, as required by regulation.

Income calculated for the purposes of determining yield differs from income
as determined for other accounting purposes. Because of the different
accounting methods used, and because of the compounding of income assumed in
yield calculations, a Portfolio's yield may not equal its distribution rate, the
income paid to your account, or income reported in the Portfolio's financial
statements.

For the Tax-Free Cash Management Portfolio, a tax-equivalent yield is the
rate an investor would have to earn from a fully taxable investment before taxes
to equal the Portfolio's tax-free yield. Tax-equivalent yields are calculated
by dividing a Portfolio's yield by the result of one minus a stated Federal or
combined Federal, state and city tax rate. (If only a portion of a Portfolio's
yield was tax-exempt, only that portion is included in the calculation.) If any
portion of a Portfolio's income is derived from obligations subject to state or
Federal income taxes, its tax-equivalent yield will generally be lower.

See Appendix A for tables showing the effect of a shareholder's tax status
on effective yield under the Federal income tax laws for 2000.

As of the date of this Statement of Additional Information, the Portfolios
have not yet commenced operations and no calculations of yield are
available.

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION

Each Portfolio is open for business and its NAV is calculated each day that
the Federal Reserve Bank of New York ("FRB") and the New York Stock Exchange
("NYSE") are open for trading (a "Business Day").

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<PAGE>

The calculation of the NAV, dividends and distributions of a Portfolio's
Corporate Class, Corporate II Class and Corporate III Class shares recognizes
two types of expenses. General expenses that do not pertain specifically to any
class are allocated pro rata to the shares of each class, based on the
percentage of the net assets of such class to the Portfolio's total assets, and
then equally to each outstanding share within a given class. Such general
expenses include (i) management fees, (ii) legal, bookkeeping and audit fees,
(iii) printing and mailing costs of shareholder reports, prospectuses,
statements of additional information and other materials for current
shareholders, (iv) fees to independent trustees, (v) custodian expenses, (vi)
share issuance costs, (vii) organization and start-up costs, (viii) interest,
taxes and brokerage commissions, and (ix) non-recurring expenses, such as
litigation costs. Other expenses that are directly attributable to a class are
allocated equally to each outstanding share within that class. Such expenses
include (i) distribution and/or other fees, (ii) transfer and shareholder
servicing agent fees and expenses, (iii) registration fees and (iv) shareholder
meeting expenses, to the extent that such expenses pertain to a specific class
rather than to a Portfolio as a whole.

The NAV of the U.S. Treasury Cash Management Portfolio and Tax-Free Cash
Management Portfolio are determined at 12:00 noon, Eastern Time, and as of the
close of regular trading on the NYSE, normally 4:00 p.m. The NAV of the U.S.
Government Cash Management Portfolio and Prime Cash Money Market Portfolio are
determined at 5:00 p.m., Eastern Time.

The following holiday closings have been scheduled for 2000 and the Fund
expects the schedule to be the same in the future: New Year's Day, Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day and Christmas Day.
The NYSE or FRB may also close on other days. When the NYSE or the FRB is
closed, or when trading is restricted for any reason other than its customary
weekend or holiday closings, or under emergency circumstances as determined by
the SEC to merit such action, each Portfolio will determine its NAV at the close
of business, the time of which will coincide with the closing of the NYSE. To
the extent that securities held by a Portfolio are traded in other markets on
days the NYSE or FRB is closed (when investors do not have access to the
Portfolio to purchase or redeem shares), the Portfolio's NAV may be
significantly affected.

If, in the opinion of the Board of Trustees, conditions exist which make
cash payment undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are valued in
computing the NAV of the Portfolio. Shareholders receiving securities or other
property on redemption may realize a gain or loss for tax purposes and will
incur any costs of sale as well as the associated inconveniences.

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TAXES

The following is only a summary of certain additional Federal income tax
considerations generally affecting the Portfolios and their shareholders that
are not described in the prospectuses. No attempt is made to present a detailed
explanation of the Federal, state or local tax treatment of the Portfolios or
their shareholders, and the discussion here and in the prospectuses is not
intended as a substitute for careful tax planning.

The following discussion of Federal income tax consequences is based on the
Internal Revenue Code of 1986, as amended (the "Code"), and the regulations
issued thereunder as in effect on the date of this Statement of Additional
Information. New legislation, as well as administrative changes or court
decisions, may significantly change the conclusions expressed herein, and may
have a retroactive effect with respect to the transactions contemplated herein.

Each Portfolio calculates dividend and capital gain distributions
separately, and is treated as a separate entity in all respects for tax
purposes.

Taxation of The Portfolios

Each Portfolio intends to qualify as a regulated investment company ("RIC")
under Subchapter M of the Code. In order to qualify as a RIC for any taxable
year, a Portfolio must derive at least 90% of its gross income from dividends,
interest, certain payments with respect to securities loans and gains from the
sale or other disposition of stock, securities or foreign currencies and other
income (including, but not limited to gains from options, futures or forward
contracts) derived with respect to its business of investing in such stock,
securities or currencies (the "Income Requirement"). In addition, at the close
of each quarter of the Portfolio's taxable year, (1) at least 50% of the value
of its assets must consist of cash and cash items, U.S. government securities,
securities of other RICs, and securities of other issuers (as to which the
Portfolio has not invested more than 5% of the value of its total assets in
securities of any one such issuer and as to which the Portfolio does not hold
more than 10% of the outstanding voting securities of any one such issuer), and
(2) no more than 25% of the value of its total assets may be invested in the
securities of any one issuer (other than U.S. government securities and
securities of other RICs), or in two or more issuers that the Portfolio controls
and that are engaged in the same or similar trades or businesses or related
trades or businesses (the "Asset Diversification Test"). Generally, a Portfolio
will not lose its status as a RIC if it fails to meet the Asset Diversification
Test solely as a result of a fluctuation in value of Portfolio assets not
attributable to a purchase.

Under Subchapter M of the Code, a Portfolio is not subject to Federal
income tax on the portion of its taxable net investment income and net capital
gains that it distributes to shareholders, provided generally that it
distributes at least 90% of its investment company taxable income (net
investment income and the excess of net short-term capital gains over net

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<PAGE>

long-term capital loss) for the year and at least 90% of the excess of its tax-
exempt interest income over related expenses (the "Distribution Requirement")
and complies with the other requirements of the Code described above. The
Distribution Requirement for any year may be waived if a RIC establishes to the
satisfaction of the Internal Revenue Service that it is unable to satisfy the
Distribution Requirement by reason of distributions previously made for the
purpose of avoiding liability for Federal excise tax (discussed below).

If for any taxable year a Portfolio does not qualify as a RIC, all of its
taxable income will be subject to tax at regular corporate rates without any
deduction for distributions to shareholders, and such distributions generally
will be taxable as ordinary dividends to the extent of the Portfolio's current
and accumulated earnings and profits. However, in the case of corporate
shareholders, such distributions generally will be eligible for the 70%
dividends received deduction for "qualifying dividends."

The Code imposes a nondeductible 4% excise tax on RICs that do not
distribute in each calendar year an amount equal to 98% of their ordinary income
for the calendar year plus 98% of their capital gains net income for the one-
year period ending on October 31 of such calendar year. The balance of such
income must be distributed during the next calendar year. For the foregoing
purposes, a RIC will include in the amount distributed any amount taxed to the
RIC as investment company taxable income or capital gains for any taxable year
ending in such calendar year. Each Portfolio intends to make sufficient
distributions of its ordinary income and capital gains net income prior to the
end of each calendar year to avoid liability for excise tax. However, a
Portfolio may in certain circumstances be required to liquidate portfolio
investments in order to make sufficient distributions to avoid excise tax
liability.

Taxation of Shareholders

Distributions from each Portfolio's taxable net investment income and
short-term capital gain are taxed as dividends. Distributions that are (i)
designated by a Portfolio as capital gains dividends and (ii) made out of the
"net capital gain" (the excess of net long-term capital gain over net short-term
capital loss), if any, of a Portfolio will be taxed to shareholders as net
capital gain, regardless of the length of time a shareholder has held shares,
whether such gain was reflected in the price paid for the shares, or whether
such gain was attributable to bonds bearing tax-exempt interest. Net capital
gain of a noncorporate taxpayer is generally taxed at a rate of 20%.
Distributions that are not net capital gain dividends or exempt-interest
dividends will generally be taxed at a maximum marginal rate of 39.6% in the
case of non-corporate taxpayers. Corporate taxpayers are currently taxed at the
same maximum marginal rates on both ordinary income and capital gains. The
Portfolios' distributions are taxable when they are paid, whether taken in cash
or reinvested in additional shares, except that distributions declared in
October, November or December and payable to shareholders of record in such
month, if paid in January of the following year, will be taxed as though paid on
December 31. The Portfolios will send non-corporate shareholders a tax

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statement by January 31 showing the tax status of the distributions received in
the prior year. Shareholders also will be notified as to the portion of
distributions from the Tax-Free Cash Management Portfolio that are exempt from
Federal income taxes. It is suggested that shareholders keep all statements
received to assist in personal record keeping.

Shareholders may realize a capital gain or loss when they redeem (sell) or
exchange shares of the Portfolios. For most types of accounts, the Portfolios
will report the proceeds of a shareholder's redemptions to the shareholder and
the IRS annually. However, because the tax treatment also depends on the
purchase price and the shareholder's personal tax position, shareholders should
keep their regular account statements for use in determining their tax. If a
shareholder receives a long-term capital gain distribution on shares of the
Portfolios, and such shares are held six months or less and are sold at a loss,
the portion of the loss equal to the amount of the long-term capital gain
distribution will be considered a long-term loss for tax purposes. Short-term
capital gains distributed by the Portfolios are taxable to shareholders as
dividends, not as capital gains.

Any gain or loss recognized on a sale or redemption of shares of a
Portfolio by a shareholder who is not a dealer in securities generally will be
treated as a long-term capital gain or loss if the shares have been held for
more than twelve months and otherwise generally will be treated as a short-term
capital gain or loss. Any resultant net capital gain will be subject to the 20%
rate.

Tax-Free Cash Management Portfolio

Dividends (i) designated by this Portfolio as exempt-interest dividends and
(ii) paid to shareholders out of tax-exempt interest income earned by the
Portfolio (exempt-interest dividends) generally will not be subject to Federal
income tax by the Portfolio's shareholders. However, persons who are
"substantial users" or "related persons" of facilities financed by private
activity bonds held by the Portfolio may be subject to tax on their pro-rata
share of the interest income from such bonds and should consult their tax
advisors before purchasing shares of the Portfolio. Realized market discount on
tax-exempt obligations purchased after April 30, 1993 is treated as ordinary
income and not as a capital gain. Dividends paid by a Portfolio out of its
taxable net investment income (including realized net short-term capital gains,
if any) are taxable to shareholders as ordinary income notwithstanding that such
dividends are reinvested in additional shares of the Portfolio. The "exempt
interest dividend" portion of a distribution is determined by the ratio of the
net tax-exempt income realized by a Portfolio for the entire year to the
aggregate amount of distributions for such year and, thus, is an annual average,
rather than a day-to-day determination for each shareholder. Distributions of
long-term capital gains, if any, are taxable as long-term capital gains to the
shareholder receiving them regardless of the length of time he or she may have
held his or her shares. Under current tax law (1) interest on certain private
activity bonds is treated as an item of tax preference for purposes of the
Federal Alternative Minimum Tax imposed on individuals and corporations,

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although for regular Federal income tax purposes such interest remains fully
tax-exempt, and (2) interest on all tax-exempt obligations is included in
"adjusted current earnings" of corporations for Federal Alternative Minimum Tax
purposes. Because the Portfolio expects to purchase private activity bonds, a
portion (not expected to exceed 20%) of the Portfolio's exempt-interest
dividends may constitute an item of tax preference for those shareholders
subject to the Federal Alternative Minimum Tax.

Interest on indebtedness incurred by shareholders to purchase or carry
shares of Portfolio generating exempt-interest dividends generally is not
deductible for Federal income tax purposes. Under IRS rules for determining
when borrowed funds are used for purchasing or carrying particular assets,
shares of the Portfolio may be considered to have been purchased or carried with
borrowed funds even though those funds are not directly linked to the shares.

The exemption for Federal income tax purposes of dividends derived from
interest on municipal securities does not necessarily result in an exemption
under the income or other tax laws of any state or local taxing authority.
Shareholders of a Portfolio may be exempt from state and local taxes on
distributions of tax-exempt interest income derived from obligations of the
state and/or municipalities of the state in which they reside but may be subject
to tax on income derived from the municipal securities of other jurisdictions.
Shareholders are advised to consult with their tax advisors concerning the
application of state and local taxes to investments in the Portfolio which may
differ from the Federal income tax consequences described above.

Receipt of tax-exempt income may result in collateral tax consequences to
certain taxpayers, including, without limitation, financial institutions,
property and casualty insurance companies, certain foreign corporations doing
business in the United States, certain S corporations with excess passive
income, individual recipients of social security or railroad retirement benefits
and individuals otherwise eligible for the earned income credit. For example,
shareholders who receive social security benefits may be subject to Federal
income tax on up to 85% of such benefits to the extent that their income,
including tax-exempt income, exceeds certain base amounts. Prospective
purchasers of Portfolio shares should consult their own tax advisors as to the
applicability of any such collateral consequences.

The Portfolio purchases municipal obligations based on opinions of bond
counsel regarding the Federal income tax status of the obligations. These
opinions generally will be based upon covenants by the issuers regarding
continuing compliance with Federal tax requirements. If the issuer of an
obligation fails to comply with its covenant at any time, interest on the
obligation could become Federally taxable retroactive to the date the obligation
was issued.

24
<PAGE>

Corporate investors should note that the corporate Alternative Minimum Tax
base is increased by 75% of the amount by which adjusted current earnings (which
includes tax-exempt interest not already included as a specified item of tax
preference) exceeds the alternative minimum taxable income of the corporation
(computed without regard to such increase and net operating loss deductions).

If a shareholder receives an exempt-interest dividend and sells shares at a
loss after holding them for a period of six months or less, the loss will be
disallowed to the extent of the amount of exempt-interest dividend.

Shares of the Tax-Free Cash Management Portfolio would not be suitable for
tax-exempt institutions and may not be suitable for retirement plans qualified
under Section 401 of the Code, H.R. 10 plans and Individual Retirement Accounts,
because such plans and accounts are generally tax-exempt. Therefore, such plans
and accounts would not gain any additional benefit from the tax-exempt status of
the Portfolio's dividends and, moreover, such dividends would be taxable when
distributed to the beneficiary.

Other Tax Information

In addition to Federal taxes, shareholders may be subject to state or local
taxes on their investment, depending on state law.

The Fund will be required in certain cases to withhold and remit to the
U.S. Treasury 31% of distributions payable to any shareholder who (1) has
provided the Fund either an incorrect tax identification number or no number at
all, (2) is subject to backup withholding by the Internal Revenue Service for
failure to properly report payments of interest or dividends, or (3) has failed
to certify to the Fund that such shareholder is not subject to backup
withholding.

TRUSTEES AND OFFICERS

The trustees and officers of the Fund and their principal occupations
during the past five years are set forth below. Each trustee who is an
"interested person" of the Fund (as defined in the 1940 Act) is indicated by an
asterisk (*). Unless otherwise indicated the business address of each is One
Freedom Valley Drive, Oaks, PA 19456.

William H. Cowie, Jr., 1408 Ruxton Road, Baltimore, MD 21204. Date of
Birth: 1/24/31. Trustee since 1993. Prior to retirement, Mr. Cowie was Chief
Financial Officer (1991-1995) of Pencor, Inc. (developers of environmental
projects). Prior to 1991, Mr. Cowie was Vice Chairman of Signet Banking
Corporation.

25
<PAGE>

Charlotte R. Kerr, American City Building, 10227 Wincopin Circle, Suite
108, Columbia, MD 21044. Date of Birth: 9/26/46. Trustee since 1993. Ms. Kerr
is Practitioner and faculty member at the Traditional Acupuncture Institute.

*David D. Downes, 210 Allegheny Ave., Towson, MD 21204. Date of Birth:
7/16/35. President and Trustee since 1995. Mr. Downes is an attorney in
private practice (since October 1996). Prior thereto he was a partner (1989-
1995) and of counsel (1995-Sept. 1996) of Venable, Baetjer & Howard (law firm).

Thomas Schweizer, 6 Betty Bush Lane, Baltimore, MD 21212. Date of Birth:
8/21/22. Trustee since 1993. Prior to his retirement in 1987, Mr. Schweizer
was self-employed. He currently is a board member of various charity
organizations and hospitals.

Richard B. Seidel, 770 Hedges Lane, Wayne, Pennsylvania 19087. Date of
Birth: 4/20/41. Trustee since 1998. Mr. Seidel is a Director and President
(since 1994) of Girard Partners, Ltd. (a registered broker-dealer). Prior to
1994, Mr. Seidel was a Director and President of Fairfield Group, Inc.

James F. Volk. Date of Birth: 8/28/62. Controller, Treasurer and Chief
Financial Officer since March 1997. Mr. Volk is Director of Investment
Accounting Operations. He joined SEI Investments Mutual Fund Services in
February 1996 and is co-director of the International Fund Accounting Group.
From December 1993 to January 1996, Mr. Volk was Assistant Chief Accountant of
the Securities and Exchange Commission's Division of Investment Management.
Prior to December 1993, Mr. Volk spent nine years with Coopers & Lybrand L.L.P.,
most recently as a senior manager.

Lynda J. Striegel. Date of Birth: 10/30/48. Vice President and Secretary
since June 1998. Ms. Striegel is Vice President and Assistance Secretary of SEI
Investments, since 1998. Prior to 1998, Ms. Striegel was Senior Assets
Management Counsel, Barnet Banks from 1997 to 1998; Partners, Groom and
Nordberg, Chartered from 1996 to 1997; Associate General Counsel, Riggs Bank,
N.A. from 1991 to 1995.

Lydia A. Gavalis. Date of Birth: 6/5/64. Vice President and Assistant
Secretary since 1998. Vice President and Assistant Secretary of SEI Investments
Company since 1998. Assistant General Counsel and Director of Arbitration,
Philadelphia Stock Exchange from 1989 to 1998.

Kathy Heilig. Date of Birth: 12/21/58. Vice President and Assistant
Secretary since 1998. Treasurer of SEI Investments Company since 1997.
Assistant Controller of SEI Investments Company since 1995; Vice President of
SEI Investments Company since 1991; Director of Taxes of SEI Investments Company
from 1987 to 1991; Tax Manager - Arthur Anderson LLP prior to 1987.

26
<PAGE>

Kevin P. Robins. Date of Birth: 4/15/61. Vice President and Assistant
Secretary since November 1995. Mr. Robins is Senior Vice President, General
Counsel and Secretary of SEI Investments since 1994. Prior to 1994, Mr. Robins
was Vice President and Assistant Secretary of SEI Investments. Prior to 1992,
Mr. Robins was an Associate with Morgan Lewis & Bockius (law firm) since 1988.

Todd Cipperman. Date of Birth: 2/14/66. Vice President and Assistant
Secretary since November 1995. Mr. Cipperman is Vice President and Assistant
Secretary of SEI Investments since 1995. From 1994 to May 1995, Mr. Cipperman
was an Associate with Dewey Ballantine (law firm). Prior to 1994, Mr. Cipperman
was an Associate with Winston & Strawn (law firm) since 1991.

James R. Foggo. Date of Birth: 6/30/64. Vice President and Assistant
Secretary since 1998. Mr. Foggo is Vice President and Assistant Secretary of
the Administrator and the Distributor since 1998. In 1998, Mr. Foggo was an
Associate with Paul Weiss, Rifkind, Wharton & Garrison. From 1995 to 1998, Mr.
Foggo was an Associate with Baker & McKenzie. From 1993 to 1995, Mr. Foggo was
an Associate with Battle Fowler L.L.P. Prior to 1990, Mr. Foggo was Operations
Manager with The Shareholder Services Group, Inc. since 1986.

The following table sets forth information describing the compensation of
each current trustee of the Fund for his or her services as trustee for the
fiscal year ended April 30, 1999.

Trustee Compensation Table

<TABLE>
<CAPTION>
Pension or Estimated
Retirement Annual Total
Aggregate Benefits Accrued Retirement Compensation
Compensation from the Fund from the Fund from the Fund
Name of Trustee from the Fund Complex* Complex* Complex*
--------------- ------------- -------- -------- --------
<S> <C> <C> <C> <C>
William H. Cowie, Jr. $16,000 -- -- $16,000
David D. Downes 13,500 -- -- 13,500
Charlotte R. Kerr 13,500 -- -- 13,500
Thomas Schweizer 13,500 -- -- 13,500
Richard B. Seidel 11,750 -- -- 11,750
</TABLE>

*The Fund's trustees do not receive any pension or retirement benefits from
the Fund as compensation for their services as trustees of the Fund. The Fund,
a Massachusetts business trust, is the sole investment company in the fund
complex.

27
<PAGE>

CODE OF ETHICS

The Board of Trustees of the Fund has adopted a Code of Ethics pursuant to
Rule 17j-1 under the 1940 Act. The Code of Ethics applies to the personal
investing activities of all trustees and officers of the Fund, as well as to
designated officers, directors and employees of AIA and the Distributor. As
described below, the Code of Ethics imposes significant restrictions on AIA's
investment personnel, including the portfolio managers and employees who execute
or help execute a portfolio manager's decisions or who obtain contemporaneous
information regarding the purchase or sale of a security by the Portfolios.

The Code of Ethics requires that covered employees of AIA and trustees who
are "interested persons", preclear personal securities investments (with certain
exceptions, such as non-volitional purchases, purchases that are part of an
automatic dividend reinvestment plan or purchases of securities that are not
eligible for purchase by the Portfolios). The preclearance requirement and
associated procedures are designed to identify any substantive prohibition or
limitation applicable to the proposed investment. The substantive restrictions
applicable to investment personnel include a ban on acquiring any securities in
an initial public offering, a prohibition from profiting on short-term trading
in securities and special preclearance of the acquisition of securities in
private placements. Furthermore, the Code of Ethics provides for trading
"blackout periods" that prohibit trading by investment personnel and certain
other employees within periods of trading by the Portfolios in the same
security. Officers, directors and employees of AIA and the Distributor may
comply with codes instituted by those entities so long as they contain similar
requirements and restrictions.

28
<PAGE>

INVESTMENT ADVISOR

The investment advisor of the Fund is Allied Investment Advisors, Inc.
("AIA"). AIA provides the Portfolios with day-to-day management services and
makes investment decisions on the Portfolios' behalf in accordance with each
Portfolio's investment policies.

Corporate, Corporate II and Corporate III Class shares of the Fund are
available for individuals, financial institutions, corporations and other
entities that have established trust relationships with Allfirst or its
affiliates or correspondent banks. Allfirst Trust Company, N.A. ("Allfirst
Trust"). Allfirst Trust, an affiliate of Allfirst, also provides custodial and
administrative services to the Fund. AIA and Allfirst Trust are wholly-owned
subsidiaries of Allfirst Bank, a Maryland-chartered Federal Reserve member bank
based in Baltimore, Maryland. Allfirst Bank is a wholly-owned subsidiary of
Allfirst Financial Inc., which is owned by Allied Irish Banks, p.l.c., an
international financial services organization based in Dublin, Ireland. SEI
Investments Distribution Co., the distributor of the Fund, is not affiliated
with Allied Irish Banks, p.l.c. or its affiliates.

Pursuant to an investment advisory agreement with the Fund dated as of
February 12, 1998, AIA furnishes, at its own expense, all services, facilities
and personnel necessary to manage each applicable Portfolio's investments and
effect portfolio transactions on its behalf.

The advisory contract has been approved by the Board of Trustees and will
continue in effect with respect to a Portfolio only if such continuance is
specifically approved at least annually by the Board or by vote of the
shareholders of the Portfolio, and in either case by a majority of the trustees
who are not parties to the advisory contract or interested persons of any such
party, at a meeting called for the purpose of voting on the advisory contract.
The advisory contract is terminable with respect to a Portfolio without penalty
on 60 days' written notice when authorized either by vote of the shareholders of
the Portfolio or by a vote of a majority of the trustees, or by AIA, on 60 days'
written notice, and will automatically terminate in the event of its assignment.

The advisory contract provides that, with respect to each Portfolio,
neither AIA nor its personnel shall be liable for any error of judgment or
mistake of law or for any act or omission in the performance of its duties to a
Portfolio, except for willful misfeasance, bad faith or gross negligence in the
performance by AIA of its duties or by reason of reckless disregard of its
obligations and duties under the advisory contract. The advisory contract
provides that AIA may render services to others.

As of the date of this Statement of Additional Information, the Portfolios
have not yet commenced operations and have not paid any advisory fees.

29
<PAGE>

In addition to receiving its advisory fee, AIA may also act and be
compensated as investment manager for clients with respect to assets which are
invested in a Portfolio. In some instances AIA may elect to credit against any
investment management fee received from a client who is also a shareholder in a
Portfolio an amount equal to all or a portion of the fee received by AIA, or its
affiliates, from a Portfolio with respect to the client's assets invested in the
Portfolio.

Each Portfolio has, under its advisory contract, confirmed its obligation
to pay all expenses, including interest charges, taxes, brokerage fees and
commissions; certain insurance premiums; fees, interest charges and expenses of
the custodian, transfer agent and dividend disbursing agent; telecommunications
expenses; auditing, legal and compliance expenses; organization costs and costs
of maintaining existence; costs of preparing and printing the Portfolios'
prospectuses, statements of additional information and shareholder reports and
delivering them to existing and prospective shareholders; costs of maintaining
books of original entry for portfolio accounting and other required books and
accounts of calculating the NAV of shares of the Portfolios; costs of
reproduction, stationery and supplies; compensation of trustees and officers of
the Fund and costs of other personnel performing services for the Fund who are
not officers of the Administrator or Distributor, or their respective
affiliates; costs of shareholder meetings; SEC registration fees and related
expenses; state securities laws registration fees and related expenses; fees
payable under the advisory contracts and under the administration agreement, and
all other fees and expenses paid by the Portfolios.

ADMINISTRATOR AND DISTRIBUTOR

Administrator and Sub-administrator

SEI Investments Mutual Funds Services serves as administrator (the
"Administrator") to the Fund. The Administrator assists in supervising all
operations of the Portfolios, except those performed by AIA under the advisory
contracts, by the Distributor under the distribution agreement and by Allfirst
Trust under the sub-administration and custodian agreements.

Under its administration agreement with the Fund, the Administrator has
agreed to maintain office facilities for the Fund. The Administrator prepares
annual and semi-annual reports to the SEC, prepares Federal and state tax
returns, prepares filings with state securities commissions, and generally
assists in all aspects of the Fund's operations other than those discussed
above. Under the administration agreement, the Administrator also provides fund
accounting and related accounting services. The Administrator may delegate its
responsibilities under the administration agreement with the Fund's written
approval.

The Administrator, a Delaware business trust, has its principal business
offices at 1 Freedom Valley Drive, Oaks, PA 19456. SEI Investments Management
Corporation, a wholly-owned subsidiary of SEI Investments Company ("SEI"), is
the owner of all beneficial

30
<PAGE>

interest in the Administrator. SEI and its subsidiaries and affiliates are
leading providers of funds evaluation services, trust accounting systems, and
brokerage and information services to financial institutions, institutional
investors and money managers. The Administrator also serves as administrator or
sub-administrator to the following mutual funds: SEI Daily Income Trust, SEI
Liquid Asset Trust, SEI Tax Exempt Trust, SEI Index Funds, SEI Institutional
Managed Trust, SEI Institutional International Trust, The Advisors' Inner Circle
Fund, The Pillar Funds, CUFUND, STI Classic Funds, First American Funds, Inc.,
First American Investment Funds, Inc., The Arbor Fund, Boston 1784 Funds, The
PBHG Funds, Inc., Morgan Grenfell Investment Trust, The Achievement Funds Trust,
Bishop Street Funds, CrestFunds, Inc., STI Classic Variable Trust, Huntington
Funds, SEI Asset Allocation Trust, TIP Funds, SEI Institutional Investments
Trust, First American Strategy Funds, Inc., HighMark Funds, PBHG Insurance
Series Fund, Inc., Expedition Funds, Alpha Select Funds, Oak Associates Funds,
The Nevis Fund, Inc., The Parkstone Group of Funds, CNI Charter Funds and The
Parkstone Advantage Fund.

As of the date of this Statement of Additional Information, the Portfolios
have not yet commenced operations and have not paid any administration fees.

The administration agreement permits the Administrator to subcontract its
services thereunder, provided that the Administrator will not be relieved of its
obligations under the agreement by the appointment of a subcontractor and the
Administrator shall be responsible to the Fund for all acts of the subcontractor
as if such acts were its own, except for losses suffered by any Portfolio
resulting from willful misfeasance, bad faith or gross negligence by the
subcontractor in the performance of its duties or for reckless disregard by it
of its obligations and duties. Pursuant to a sub-administration agreement
between the Administrator and Allfirst Trust, Allfirst Trust performs services
which may include clerical, bookkeeping, accounting, stenographic, and
administrative services, for which it receives a fee, paid by the Administrator,
at the annual rate of up to 0.0275% of aggregate average net assets.

As of the date of this Statement of Additional Information, the Portfolios
have not yet commenced operations and have not paid any sub-administration fees.

Distributor

SEI Investments Distribution Co. (formerly SEI Financial Services Company)
serves as the distributor (the "Distributor") of the Fund. The Distributor
offers shares continuously and has agreed to use its best efforts to solicit
purchase orders.

Distribution Plans

The Board of Trustees has adopted distribution and service plans (the
"Plans") pursuant to Rule 12b-1 under the 1940 Act (the "Rule") on behalf of the
Corporate II Class and

31
<PAGE>

Corporate III Class shares. The Plans allow the Portfolios to pay the
Distributor a distribution fee at the annual rate of up to 0.25% and 0.40% of
the average net assets of the Corporate II Class and Corporate III Class,
respectively, or such lesser amount as approved from time to time by the Board.
These fees may be used to pay expenses associated with the promotion and
administration of activities primarily intended to result in the sale of shares
of the Portfolios, including, but not limited to: advertising the availability
of services and products; designing material to send to customers and developing
methods of making such materials accessible to customers; providing information
about the product needs of customers; providing facilities to solicit sales and
to answer questions from prospective and existing investors about the
Portfolios; receiving and answering correspondence from prospective investors,
including requests for sales literature, prospectuses and statements of
additional information; displaying and making sales literature and prospectuses
available; acting as liaison between shareholders and the Portfolios, including
obtaining information from the Portfolios regarding the Portfolios and providing
performance and other information about the Portfolios; and providing additional
distribution-related services.

The Plans have been approved by the Board of Trustees, including the
majority of disinterested trustees, and where approved by the initial sole
shareholder of the classes. As required by the Rule, the Board considered all
pertinent factors relating to the implementation of each of the Plans prior to
its approval, and the trustees have determined that there is a reasonable
likelihood that the Plans will benefit the classes and their respective
shareholders. To the extent that the Plans provide greater flexibility in
connection with the distribution of shares of the Portfolios, additional sales
may result. The Board has approved distribution fees of 0.25% and 0.40% of the
average net assets of the Corporate II Class and Corporate III Class,
respectively.

As of the date of this Statement of Additional Information, the Portfolios
have not yet commenced operations and have not paid any distribution fees.

As of the date of this Statement of Additional Information, all
distribution fees received by the Distributor under the Plans are paid to
qualified securities brokers or financial institutions or other investment
professionals in respect of their share accounts. The Plans are a compensation
plan because the Distributor is paid a fixed fee and is given discretion
concerning what expenses are payable under the Plans. The Distributor may spend
more for marketing and distribution than it receives in fees. However, to the
extent fees received exceed expenses, including indirect expenses such as
overhead, the Distributor could be said to have received a profit. For example,
if the Distributor pays $1 for distribution-related expenses and receives $2
under the Plan, the $1 difference could be said to be a profit for the
Distributor. If, after payments by the Distributor for marketing and
distribution, there are any remaining fees which have been paid under the Plan,
they may be used as the Distributor may elect. Since the amounts payable under
the Plan are commingled with the Distributor's general funds, including the
revenues it receives in the conduct of its business, it is possible

32
<PAGE>

that certain of the Distributor's overhead expenses will be paid out of
distribution fees and that these expenses may include the costs of leases,
depreciation, communications, salaries, training and supplies.

TRANSFER AGENT

The Fund has a Transfer Agency and Services Agreement dated November 1,
1995, with SEI Investments Management Corporation. SEI Investments Management
Corporation has subcontracted transfer agency services to State Street Bank and
Trust Company ("State Street Bank"). State Street Bank maintains an account for
each shareholder, provides tax reporting for each Portfolio, performs other
transfer agency functions and acts as dividend disbursing agent for each
Portfolio.

DESCRIPTION OF THE FUND

Trust Organization

The Portfolios are series of ARK Funds, an open-end management investment
company organized as a Massachusetts business trust by a Declaration of Trust
dated October 22, 1992, and amended and restated on March 19, 1993. A
supplement to the Declaration of Trust was executed and filed on March 23, 1993.
The Declaration of Trust permits the Board to create additional series and
classes of shares. The Fund has the following additional series: U.S. Treasury
Money Market Portfolio, U.S. Government Money Market Portfolio, Money Market
Portfolio, Tax-Free Money Market Portfolio, Pennsylvania Tax-Free Money Market
Portfolio, U.S. Treasury Cash Management Portfolio, U.S. Government Cash
Management Portfolio, Prime Cash Management Portfolio, Tax-Free Cash Management
Portfolio, Short-Term Treasury Portfolio, Short-Term Bond Portfolio, Maryland
Tax-Free Portfolio, Pennsylvania Tax-Free Portfolio, Intermediate Fixed Income
Portfolio, U.S. Government Bond Portfolio, Income Portfolio, Balanced Portfolio,
Equity Income Portfolio, Value Equity Portfolio, Equity Index Portfolio, Blue
Chip Equity Portfolio, Capital Growth Portfolio, Mid-Cap Equity Portfolio,
Small-Cap Equity Portfolio and International Equity Selection Portfolio.

In the event that an affiliate of Allied Irish Banks, p.l.c. ceases to be
the investment advisor to the Portfolios, the right of the Fund and Portfolio to
use the identifying name "ARK" may be withdrawn.

The assets of the Fund received for the issue or sale of shares of a
Portfolio and all income, earnings, profits and proceeds thereof are allocated
to the Portfolio and constitute the underlying assets thereof. The underlying
assets of a Portfolio are segregated on the books of account and are charged
with the liabilities with respect to the Portfolio and with a share of the
general expenses of the Fund. General expenses of the Fund are allocated in
proportion to the

33
<PAGE>

asset value of the respective Portfolios, except where allocations of direct
expense can otherwise fairly be made. The officers of the Fund, subject to the
general supervision of the Board of Trustees, have the power to determine which
expenses are allocable to a given Portfolio, or which are general or allocable
to all of the Portfolios. In the event of the dissolution or liquidation of the
Fund, shareholders of a Portfolio are entitled to receive as a class the
underlying assets of the Portfolio available for distribution.

Banking Law Matters

Banking laws and regulations generally permit a bank or bank affiliate to
act as an investment advisor and to purchase shares of an investment company as
agent for and upon the order of a customer. However, banking laws and
regulations, including the Glass-Steagall Act as currently interpreted by the
Board of Governors of the Federal Reserve System, prohibit a bank holding
company registered under the Bank Holding Company Act of 1956 or any affiliate
thereof from sponsoring, organizing, controlling or distributing the shares of a
registered, open-end investment company continuously engaged in the issuance of
its shares, and prohibit banks generally from issuing, underwriting, selling or
distributing securities. Upon advice of legal counsel, AIA believes that it may
perform the advisory services described in the prospectuses or this Statement of
Additional Information for the Fund and its shareholders without violating
applicable Federal banking laws or regulations.

Judicial or administrative decisions or interpretations of, as well as
changes in, either Federal or state statutes or regulations relating to the
activities of banks and their affiliates could prevent a bank or bank affiliate
from continuing to perform all or a part of the activities contemplated by the
prospectuses or this Statement of Additional Information. If banks or bank
affiliates were prohibited from so acting, changes in the operating of the Fund
might occur. It is not anticipated, however, that any such change would affect
the net asset value of the shares of any Portfolio or result in any financial
loss to any shareholder.

Shareholder and Trustee Liability

The Fund is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders of such a business trust
may, under certain circumstances, be held personally liable for the obligations
of the trust. The Declaration of Trust provides that the Fund shall not have
any claim against shareholders, except for the payment of the purchase price of
shares, and requires that each agreement, obligation or instrument entered into
or executed by the Fund or the trustees shall include a provision limiting the
obligations created thereby to the Fund and its assets. The Declaration of
Trust provides for indemnification out of a Portfolio's property of any
shareholders of the Portfolio held personally liable for the obligations of the
Portfolio. The Declaration of Trust also provides that a Portfolio shall, upon
request, assume the defense of any claim made against any shareholder for any
act or obligation of the Portfolio and satisfy any judgment thereon.

34
<PAGE>

Thus, the risk of a shareholder incurring financial loss because of shareholder
liability is limited to circumstances in which the Portfolio itself would be
unable to meet its obligations. In view of the above, the risk of personal
liability to shareholders is remote.

The Declaration of Trust further provides that the trustees, if they have
exercised reasonable care, will not be liable for any neglect or wrongdoing, but
nothing in the Declaration of Trust protects a trustee against any liability to
which he or she would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence, or reckless disregard of the duties involved in the
conduct of his or her office.

Shares of a Portfolio of any class are fully paid and non-assessable,
except as set forth under the heading "Shareholder and Trustee Liability" above.
Shareholders may, as set forth in the Declaration of Trust, call meetings for
any purpose related to the Fund, a Portfolio or a class, respectively, including
in the case of a meeting of the entire Fund, the purpose of voting on removal of
one or more trustees. The Fund or any Portfolio may be terminated upon the sale
of its assets to another open-end management investment company, or upon
liquidation and distribution of its assets, if approved by vote of the holders
of a majority of the outstanding shares of the Fund or the Portfolio. If not so
terminated, the Fund and the Portfolios will continue indefinitely.

Share Ownership

As of April __, 2000, the officers and trustees of the Fund owned less than
1% of the outstanding shares of any Portfolio and no person owned beneficially
more than 5% of the outstanding shares of the Portfolios.

A shareholder owning beneficially more than 25% of a particular Portfolio's
shares may be considered to be a "controlling person" of that Portfolio.
Accordingly, its vote could have a more significant effect on matters presented
at shareholder meetings than the votes of the Portfolio's other shareholders.
Allfirst Bank or its affiliates, however, may receive voting instructions from
certain underlying customer accounts and will vote the shares in accordance with
those instructions. In the absence of such instructions, Allfirst Bank or its
affiliates will vote those shares in the same proportion as it votes the shares
for which it has received instructions from its customers and fiduciary
accounts.

CUSTODIAN

Allfirst Trust, 25 South Charles Street, Baltimore, Maryland 21201, serves
as custodian for the Portfolios. Under the custody agreement with the Fund,
Allfirst Trust holds the Fund's portfolio securities in safekeeping and keeps
all necessary records and documents

35
<PAGE>

relating to its duties. For the services provided to the Fund pursuant to the
custody agreement, the Fund pays Allfirst Trust a monthly fee at the annual rate
of 0.015% of the average net assets of the Portfolios. Allfirst Trust also
charges the Fund transaction handling fees ranging from $5 to $75 per
transaction and receives reimbursement for out-of-pocket expenses.

INDEPENDENT AUDITORS

KPMG LLP, located at 99 High Street, Boston, Massachusetts 02110, are the
Fund's independent auditors, providing audit services and consultation in
connection with the review of various Securities and Exchange Commission
filings.

36
<PAGE>

APPENDIX A

2000 TAX RATES

The following tables show the effect of a shareholder's tax status on
effective yield under the Federal income tax laws for 2000. The second table
shows the approximate yield a taxable security must provide at various income
brackets to produce after-tax yields equivalent to those of hypothetical tax-
exempt obligations yielding from 3% to 7%. Of course, no assurance can be given
that a Portfolio will achieve any specific tax-exempt yield. While the
Portfolios invest principally in obligations whose interest is exempt from
Federal income tax other income received by a Portfolio may be taxable.

Use the first table to find your approximate Federal effective tax bracket
for 2000.

Federal
Single Return Joint Return Income Tax
Taxable Income* Taxable Income* Bracket**

26,251 63,550 43,851 105,950 28.00%
63,551 132,600 105,951 161,450 31.00%
132,601 288,350 161,451 288,350 36.00%
288,351 288,351 39.60%

* Net amount subject to Federal income tax after deductions and exemptions.
Assumes ordinary income only.

** Excludes the impact of the phaseout of personal exemptions, limitations on
itemized deductions, and other credits, exclusions, and adjustments which
may increase a taxpayer's marginal tax rate. An increase in a shareholder's
marginal tax rate would increase that shareholder's tax-equivalent yield.

*** Excludes the impact of state income taxes. It is likely that your exempt-
interest dividends from the Fund will be subject to state and local income
taxes, if any, imposed by your state of residence.

Having determined your effective tax bracket above, use the following table to
determine the tax equivalent yield for a given tax-free yield.

28.00% 31.00% 36.00% 39.60%

A-1
<PAGE>

To match these tax free rates: Your taxable investment would have to earn the
following yield:

3.00% 4.17% 4.35% 4.69% 4.97%
4.00% 5.56% 5.80% 6.25% 6.62%
5.00% 6.94% 7.25% 7.81% 8.28%
6.00% 8.33% 8.70% 9.38% 9.93%
7.00% 9.72% 10.14% 10.94% 11.59%

Yield information may be useful in reviewing a Portfolio's performance and in
providing a basis for comparison with other investment alternatives. However,
each Portfolio's yield fluctuates, unlike investments that pay a fixed interest
rate over a stated period of time. When comparing investment alternatives,
investors should also note the quality and maturity of the portfolio securities
of the respective investment companies that they have chosen to consider.

Investors should recognize that in periods of declining interest rates a
Portfolio's yield will tend to be somewhat higher than prevailing market rates,
and in periods of rising interest rates a Portfolio's yield will tend to be
somewhat lower. Also, when interest rates are falling, the inflow of net new
money to a Portfolio from the continuous sale of its shares will likely be
invested in instruments producing lower yields than the balance of the
Portfolio's holdings, thereby reducing the Portfolio's current yield. In
periods of rising interest rates, the opposite can be expected to occur. The
yields of the Corporate Class, Corporate II Class or Corporate III Class of a
Portfolio are each calculated separately.

A-2
<PAGE>

Part C - Other Information Item

Item 23. Exhibits

(a) (1) Declaration of Trust dated October 22, 1992 is incorporated by
reference to Exhibit 1 to the Registration Statement.

(2) Amended and Restated Declaration of Trust dated March 19, 1993 is
incorporated by reference to Exhibit 1(b) to Pre-Effective Amendment
No. 2.

(3) Supplement dated March 23, 1993 to the Amended and Restated
Declaration of Trust dated March 19, 1993 is incorporated by
reference to Exhibit 1(c) to Pre-Effective Amendment No. 2.

(b) By-Laws of the Registrant are incorporated by reference to Exhibit
1(d) to Pre-Effective Amendment No. 2.

(d) Investment Advisory Agreement dated February 12, 1998, between the
Registrant and Allied Investment Advisors, Inc. is incorporated
herein by reference to Exhibit 5(b) to Post-Effective Amendment No.
17.

(e) (1) Distribution Agreement dated November 1, 1995, between the
Registrant and SEI Investments Distribution Co. is incorporated
herein by reference to Exhibit 6(a) to Post-Effective Amendment No.
6.

(2) Administration Agreement dated November 1, 1995, between the
Registrant and SEI Investments Mutual Fund Services is incorporated
herein by reference to Exhibit 6(b) to Post-Effective Amendment No.
6.

(f) Not applicable.

(g) Custody Agreement dated April 1, 1997, between the Registrant and
Allfirst Trust Company, National Association, is incorporated herein
by reference to Exhibit 8(a) to Post-Effective Amendment No. 17.

(h) (1) Transfer Agency and Service Agreement dated November 1, 1995,
between the Registrant and SEI Investments Mutual Fund Services is
incorporated herein by reference to Exhibit 9 to Post-Effective
Amendment No. 6.

(2) Sub-Administration Agreement dated January 1, 1998, between SEI
Investments Management Corporation and Allfirst Trust Company,
National Association, is incorporated herein by reference to Exhibit
9(b) to Post-Effective Amendment No. 17.

(i) Opinion and consent of legal counsel.**

(j) Consent of independent auditors.**
<PAGE>

(k) Not applicable.

(l) Written assurance dated May 27, 1993 that purchase representing
initial capital was made for investment purposes without any present
intention of redeeming or reselling is incorporated herein by reference to
Exhibit 13 to Pre-Effective Amendment No. 3.

(m) (1) Distribution and Service Plan with respect to Corporate II Class
Shares.**

(2) Distribution and Service Plan with respect to Corporate III Class
Shares.**

(n) Not applicable.

(o) Amended and Restated Rule 18f-3 Plan.**

(p) (1) Fund Code of Ethics.**

(2) SEI Investments Code of Ethics and Insider Trading Policy.**

____________________

*To be filed by amendment.

**Filed herewith.

Item 24. Persons Controlled by or Under Common Control with Registrant

None.

Item 25. Indemnification

Article XI, Section 2 of the Declaration of Trust sets forth the reasonable
and fair means for determining whether indemnification shall be provided to any
past or present trustee or officer. It states that the Registrant shall
indemnify any present or past trustee or officer to the fullest extent permitted
by law against liability and all expenses reasonably incurred by him in
connection with any claim, action, suit or proceeding in which he is involved by
virtue of his service as a trustee, an officer, or both. Additionally, amounts
paid or incurred in settlement of such matters are covered by this
indemnification. Indemnification will not be provided in certain circumstances,
however. These include instances of willful misfeasance, bad faith, gross
negligence, and reckless disregard of the duties involved in the conduct of the
particular office involved. Insofar as indemnification for liability arising
under the Securities Act of 1933 may be permitted to trustees, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.

<PAGE>

Item 26. Business and Other Connections of Investment Adviser

Allied Investment Advisors, Inc. ("AIA") serves as investment adviser to
all Portfolios of the Registrant. A description of the directors and officers of
AIA and other required information is included in the Form ADV and schedules
thereto of AIA, as amended, on file with the Securities and Exchange Commission
(File No. 801-50883) and is incorporated herein by reference.

Item 27. Principal Underwriters

(a) SEI Investments Distribution Co. (the "Distributor") acts as
distributor for the Registrant. The Distributor also acts as distributor for:

SEI Daily Income Trust July 15, 1982
SEI Liquid Asset Trust November 29, 1982
SEI Tax Exempt Trust December 3, 1982
SEI Index Funds July 10, 1985
SEI Institutional Managed Trust January 22, 1987
SEI Institutional International Trust August 30, 1988
The Advisors' Inner Circle Fund November 14, 1991
The Pillar Funds February 28, 1992
CUFUND May 1, 1992
STI Classic Funds May 29, 1992
First American Funds, Inc. November 1, 1992
First American Investment Funds, Inc. November 1, 1992
The Arbor Fund January 28, 1993
Boston 1784 Funds June 1, 1993
The PBHG Funds, Inc. July 16, 1993
Morgan Grenfell Investment Trust January 3, 1994
The Achievement Funds Trust December 27, 1994
Bishop Street Funds January 27, 1995
STI Classic Variable Trust August 18, 1995
Huntington Funds January 11, 1996
SEI Asset Allocation Trust April 1, 1996
TIP Funds April 28, 1996
SEI Institutional Investments Trust June 14, 1996
First American Strategy Funds, Inc. October 1, 1996
HighMark Funds February 15, 1997
Armada Funds March 8, 1997
PBHG Insurance Series Fund, Inc. April 1, 1997
The Expedition Funds June 9, 1997
TIP Institutional Funds January 1, 1998
Oak Associates Funds February 27, 1998
The Nevis Fund, Inc. June 29, 1998
The Parkstone Group of Funds September 14, 1998
CNI Charter Funds April 1, 1999
The Parkstone Advantage Fund May 1, 1999
Amerindo Funds, Inc. July 13, 1999
<PAGE>

The Distributor provides numerous financial services to investment managers,
pension plan sponsors and bank trust departments. These services include
portfolio evaluation, performance measurement and consulting services ("Funds
Evaluation") and automated execution, clearing and settlement of securities
transactions ("MarketLink").

(b) Directors, officers and partners of SEI Investments Distribution Co.
are as follows:

<TABLE>
<CAPTION>
Name and Principal Business Positions and Offices with Positions and Offices with
--------
Address * Underwriter Registrant
--------- ----------- ----------
<S> <C> <C>

Alfred P. West, Jr. Director, Chairman of the Board
of Directors
Richard B. Lieb Director and Executive Vice
President
Carmen V. Romeo Director
Mark J. Held President and Chief Operating
Officer
Gilbert L. Beebower Executive Vice President
Dennis J. McGonigle Executive Vice President
Robert M. Silvestri Chief Financial Officer and
Treasurer
Leo J. Dolan, Jr. Senior Vice President
Carl A. Guarino Senior Vice President
Larry Hutchinson Senior Vice President
Jack May Senior Vice President
Hartland J. McKeown Senior Vice President
Kevin P. Robins Senior Vice President and General Vice President and
Counsel Assistant Secretary
Patrick K. Walsh Senior Vice President
Robert Crudup Vice President and Managing
Director
Barbara Doyne Vice President
Vic Galef Vice President and Managing
Director
Kim Kirk Vice President and Managing
Director
John Krzeminski Vice President and Managing
Director
Carolyn McLaurin Vice President and Managing
Director
Lori White Vice President and Assistant
Secretary
Wayne M. Withrow Vice President and Managing
Director
Robert Aller Vice President
Gordon W. Carpenter Vice President
Todd Cipperman Vice President
S. Courtney E. Collier Vice President and Assistant
Secretary
</TABLE>
<PAGE>

<TABLE>
<S> <C> <C>
Richard A. Deak Vice President and Assistant
Secretary
Jeff Drennen Vice President
James R. Foggo Vice President and Assistant
Secretary
Lydia A. Gavalis Vice President and Assistant Vice President and Assistant
Secretary Secretary
Greg Gettinger Vice President and Assistant
Secretary
Kathy Heilig Vice President
Jeff Jacobs Vice President
Samuel King Vice President
W. Kelso Morrill Vice President
Mark Nagle Vice President
Joanne Nelson Vice President
Cynthia M. Parrish Vice President and Secretary
Kim Rainey Vice President
Robert Redican Vice President
Maria Rinehart Vice President
Steve Smith Vice President
Kathryn L. Stanton Vice President
Lynda J. Striegel Vice President and Assistant Vice President and
Secretary Secretary
Daniel Spaventa Vice President
</TABLE>

- ----------------------
* 1 Freedom Valley Drive, Oaks, PA 19456

Item 28. Location of Accounts and Records

The Registrant maintains the records required by Section 31(a) of the Investment
Company Act of 1940 and Rules 31a-1 to 31a-3 inclusive thereunder at its
principal office located at One Freedom Valley Drive, Oaks, PA 19456. Certain
records, including records relating to the Registrant's shareholders, may be
maintained pursuant to Rule 31a-3 at the offices of the Registrant's investment
adviser, Allied Investment Advisors, Inc., located at 100 E. Pratt Street,
Baltimore, MD 21202; and its transfer agent, SEI Investments Mutual Fund
Services, located at One Freedom Valley Drive, Oaks, PA. 19456. Certain records
relating to the physical possession of the Registrant's securities may be
maintained at the offices of the Registrant's custodian, Allfirst Trust Company,
N.A., located at 25 S. Charles Street, Baltimore, MD 21201.

Item 29. Management Services Not applicable.

Item 30. Undertakings

(a) Not applicable.
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant duly caused this Post-Effective
Amendment No. 25 to be signed on its behalf by the undersigned, hereunto duly
authorized, in the City of Baltimore, and State of Maryland, on the 12/th/ day
of April, 2000.

ARK FUNDS

By: /s/ David D. Downes
------------------------------------
David D. Downes
President

Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment No. 25 to the Registration Statement has been signed below
by the following persons in the capacities and on the date indicated.

<TABLE>
<S> <C> <C>
/s/ David D. Downes President (principal executive April 12, 2000
- --------------------------------- officer) and Trustee
David D. Downes

/s/ James F. Volk Treasurer, Controller and Chief April 12, 2000
- --------------------------------- Financial Officer
James F. Volk

* Trustee
- ---------------------------------
William H. Cowie

* Trustee
- ---------------------------------
Charlotte Kerr

* Trustee
- ---------------------------------
Thomas Schweizer

* Trustee
- ---------------------------------
Richard B. Seidel

* By: /s/ Alan C. Porter April 12, 2000
------------------------------------
Alan C. Porter
Attorney-in-Fact
</TABLE>

An original power-of-attorney authorizing Alan C. Porter to execute
amendments to this Registration Statement for each trustee of the Registrant on
whose behalf this amendment to the Registration Statement is filed has been
executed and filed with the Securities and Exchange Commission.

<PAGE>

EXHIBIT 99(i)

KIRKPATRICK & LOCKHART LLP
75 State Street
Boston, MA 02109

Telephone (617) 951-9000
Facsimile (617) 951-9151
www.kl.com

April 7, 2000

ARK Funds
One Freedom Valley Drive
Oaks, PA 19456

Re: Registration Statement on Form N-1A

Ladies and Gentlemen:

We have acted as Massachusetts counsel for ARK Funds, a Massachusetts business
trust (the "Trust"), in connection with the filing with the Securities and
Exchange Commission of Post-Effective Amendment No. 25 to the Trust's
Registration Statement on Form N-1A (File No. 33-53690; 811-7310) (the "Post-
Effective Amendment"), registering an indefinite number of shares of the Trust's
Prime Cash Management Portfolio, U.S. Government Cash Management Portfolio, U.S
Treasury Cash Management Portfolio and Tax-Free Cash Management Portfolio series
(the "Cash Management Portfolios") under the Securities Act of 1933, as amended
(the "1933 Act").

In our capacity as Massachusetts counsel for the Trust, we have examined the
Trust's Declaration of Trust as Amended and Restated March 19, 1993, and as
further amended (the "Declaration of Trust") and By-Laws, the Post-Effective
Amendment, the corporate action of the Trust which provides for the issuance of
the shares of the Cash Management Portfolios, and such other documents and
matters as we have deemed necessary or appropriate for purposes of this opinion.
We have assumed the genuineness of all signatures, the authenticity of all
documents submitted to us, the conformity to original documents of all documents
presented to us as copies thereof and the authenticity of the original documents
from which any such copies were made, which assumptions we have not
independently verified. As to various matters of fact material to this opinion,
we have relied upon statements and certificates of officers of the Trust.

Based upon and subject to the foregoing, we are of the opinion that, except as
described herein, the shares to be issued pursuant to the Post-Effective
Amendment have been duly authorized for issuance and, when issued and paid for
upon the terms provided in the Post-Effective Amendment, subject to compliance
with the 1933 Act, the Investment Company Act of 1940, as amended, and
applicable state law regulating the offer and sale of securities, will be
<PAGE>

ARK Funds
April 7, 2000
Page 2

legally issued, fully paid, and non-assessable.

In connection with our opinion expressed above that the shares will be non-
assessable, we note that the Trust is an entity of the type commonly known as a
"Massachusetts business trust." Under Massachusetts law, shareholders could,
under certain circumstances, be held personally liable for the obligations of
the Trust. The Declaration of Trust states that all persons extending credit to,
contracting with or having any claim against the Trust or the Trustees shall
look only to the assets of the appropriate series for payment under such credit,
contract or claim; and neither the shareholders nor the Trustees, nor any of
their agents, whether past, present or future, shall be personally liable
therefor. The Declaration of Trust also requires that every note, bond, contract
or other undertaking issued by or on behalf of the Trust or the Trustees
relating to the Trust shall include a recitation limiting the obligation
represented thereby to the Trust, or series, and its assets (but the omission of
such recitation shall not operate to bind any shareholder). The Declaration of
Trust further provides: (1) for indemnification from the assets of the
applicable series for all loss and expense of any shareholder or former
shareholder held personally liable solely by reason of his being or having been
a shareholder; and (2) for a series to assume, upon request by the shareholder,
the defense of any claim made against the shareholder for any act or obligation
of the series and satisfy any judgment thereon. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is limited to
circumstances in which the Trust or series would be unable to meet its
obligations.

We hereby consent to the filing of this opinion as an exhibit to the Trust's
Registration Statement and to the reference to our firm and the opinions set
forth herein in the Registration Statement. In giving our consent we do not
thereby admit that we are in the category of persons whose consent in required
under Section 7 of the 1933 Act or the rules and regulations of the Securities
and Exchange Commission thereunder.

Very truly yours,

/s/ Kirkpatrick & Lockhart LLP
------------------------------
Kirkpatrick & Lockhart LLP

<PAGE>

EXHIBIT 99(m)(1)

DISTRIBUTION AND SERVICE PLAN
The ARK Funds: CORPORATE II CLASS

THIS Distribution and Service Plan (the Distribution Plan), made as of April __,
2000 is the plan of ARK Funds (the Trust), a business trust organized and
existing under the laws of the Commonwealth of Massachusetts, on behalf of the
Prime Cash Management Portfolio, U.S. Government Cash Management Portfolio, U.S.
Treasury Cash Management Portfolio, and Tax Free Cash Management Portfolio (each
a "Cash Management Portfolio") and any future Cash Management portfolios created
in the future.

1. This Distribution Plan, when effective in accordance with its terms, shall
be the written plan contemplated by Securities and Exchange Commission Rule 12b-
1 under the Investment Company Act of 1940, as amended (the 1940 Act) for shares
of beneficial interest of Corporate Class II Class of the Cash Management
Portfolios of the Trust.

2. The Trust has entered into a Distribution Agreement on behalf of each
Portfolio with SEI Investment Distribution Co. (the "Distributor") under which
the Distributor uses all reasonable efforts, consistent with its other business,
to secure purchasers of each Portfolio's shares including the Corporate II
Shares. Such efforts may include, but neither are required to include nor are
limited to, the following:

(1) formulation and implementation of marketing and promotional
activities, such as mail promotions and television, radio, newspaper,
magazine and other mass media advertising,
(2) preparation, printing and distribution of sales literature;
(3) preparation, printing and distribution of prospectuses of each
Portfolio and reports to recipients other than existing shareholders
of each Portfolio,
(4) obtaining such information, analyses and reports with respect to
marketing and promotional activities as the Distributor may from time
to time, deem advisable;
(5) making payments to securities dealers and others engaged in the sales
of Corporate II Shares; and
(6) providing training, marketing and support to such dealers and others
with respect to the sale of Corporate II Shares.

3. In consideration for -the services provided and the expenses incurred by
the Distributor pursuant to the Distribution Agreement, Corporate II Class of
each Cash Management Portfolio shall pay to the Distributor a fee at the annual
rate of up to (and including) .25% of such Class' average daily net assets
throughout the month, or such lesser amount as may be established from time to
time by the Trustees of the Trust, as specified in this paragraph; provided
that, for any period during which the total of such fee and all other expenses
of a Portfolio holding itself out as a money market fund under Rule 2a-7 under
the 1940 Act or of the Corporate II Class of such a Portfolio, would exceed the
gross income of that Portfolio (or of the Corporate II Class thereof), such fee
shall be reduced by such excess. Such fee shall be computed daily and paid
monthly. The determination of daily net assets shall be made at the close of
business each day throughout the month and computed in the manner specified in
each Portfolio's then current Prospectus for the determination of the net asset
value of Corporate Class II Shares, but shall exclude assets attributable to any
other Class of each Cash Management Portfolio. The Distributor may use all or
any portion of the fee received pursuant to the Corporate Class II Plan to
compensate securities dealers or other persons who have engaged in the sale of
Corporate Class II Shares pursuant to agreements with the Distributor, or to pay
any of the expenses associated with other activities authorized under paragraph
2 hereof.

4. This Distribution Plan shall become effective with respect to the Corporate
Class II Shares of the Cash Management Portfolios on April __, 2000, this
Distribution Plan having been approved (1) by a vote of a majority of the
Trustees of the Trust. including a majority of Trustees who are not "interested
persons" of the Trust (as defined in the 1940 Act) and who have no direct or
indirect financial interest in the
<PAGE>

operation of this Distribution Plan or in any agreement related to the
Distribution Plan (the Independent Trustees), cast in person at a meeting called
for the purpose of voting on Distribution Plan; and (2) by a vote of a majority
of the outstanding voting securities (as such term is defined in Section
2(a)(42) of the 1940 Act) of the Corporate II Class of the affected Portfolio.

5. During the existence of this Distribution Plan, the Trust will commit the
selection and nomination of those Trustees who are not interested persons of the
Trust to the discretion of such Independent Trustees.

6. This Distribution Plan shall, unless terminated as hereinafter provided,
remain in effect until [December 31, 2000] and from year to year thereafter;
provided, however, that such continuance is subject to approval annually by a
vote of a majority of the Trustees of the trust, including a majority of the
Independent Trustees, cast in person at a meeting called for the purpose of
voting on this Distribution Plan.

7. This Distribution Plan may be amended with respect to the Corporate II
Class of a Cash Management Portfolio, at any time by the Board of Trustees,
provided that (a) any amendment to increase materially the maximum fee provided
for in paragraph 3 hereof must be approved by a vote of a majority of the
outstanding voting, securities (as such term is defined in Section 2(a)(42) of
the 1940 Act) of the Corporate II Class of the affected Portfolio, and (b) any
material amendment of this Distribution Plan must be approved in the manner
provided in paragraph 4(l) above.

8. This Distribution Plan may be terminated with respect to the Corporate II
Class of a Portfolio at any time, without the payment of any penalty, by vote of
a majority of the Independent Trustees or by a vote of a majority of the
outstanding voting securities (as such term is defined in Section 2(a)(42) of
the 1940 Act) of the Corporate II Class of the affected Portfolio.

9. During the existence of this Distribution Plan, the Trust shall require the
Distributor to provide the Trust, for review by the Trust's Trustees, and the
Trustees shall review, at least quarterly, a written report of the amounts
expended in connection with financing any activity primarily intended to result
in the sale of Corporate II Shares (making estimates of such costs where
necessary or desirable) and the purposes for which such expenditures were made.

10. This Distribution Plan does not require the Distributor to perform any
specific type or level of distribution activities or to incur any specific level
of expenses for activities primarily intended to result in the sale of shares of
Corporate II Class.

11. In the event that Rule 2830 of the NASD Rules of Conduct precludes any
Portfolio of the Trust (or any NASD member) from imposing a sales charge(as
defined in that Section) or any portion thereof then the Distributor shall not
make payments hereunder from the date that the Portfolio discontinues or is
required to discontinue imposition of some or all of its sales charges. If the
Portfolio resumes imposition of some or all of its sales charge, the Distributor
will receive payments hereunder.

12. Consistent with the limitation of shareholder and Trustee liability as set
forth in the Trust's Declaration of Trust, any obligations assumed by the Trust,
a Portfolio or Corporate II Class thereof pursuant to this Plan and any
agreements related to this Plan shall be limited in all cases to the
proportionate ownership of Corporate II Class of the affected Portfolio and its
assets, and shall not constitute obligations of any shareholder of any other
Class of the affected Portfolio or other Portfolios of the Trust or of any
Trustee.

13. If any provision of the Distribution Plan shall be held or made invalid by
a court decision, statute, rule or otherwise, the remainder of the Distribution
Plan shall not be affected thereby.

-2-

<PAGE>

EXHIBIT 99(m)(2)

DISTRIBUTION AND SERVICE PLAN
The ARK Funds: CORPORATE III CLASS

1. This Distribution Plan, when effective in accordance with its terms,
shall be the written plan contemplated by Securities and Exchange Commission
Rule 12b-1 under the Investment Company Act of 1940, as amended (the 1940 Act)
for shares of beneficial interest of Corporate Class III Class of the Cash
Management Portfolios of the Trust.

2. The Trust has entered into a Distribution Agreement on behalf of each
Portfolio with SEI Investment Distribution Co. (the "Distributor") under which
the Distributor uses all reasonable efforts, consistent with its other business,
to secure purchasers of each Portfolio's shares including the Corporate III
Shares. Such efforts may include, but neither are required to include nor are
limited to, the following:

(1) formulation and implementation of marketing and promotional
activities, such as mail promotions and television, radio,
newspaper, magazine and other mass media advertising,
(2) preparation, printing and distribution of sales literature;
(3) preparation, printing and distribution of prospectuses of each
Portfolio and reports to recipients other than existing
shareholders of each Portfolio,
(4) obtaining such information, analyses and reports with respect to
marketing and promotional activities as the Distributor may from
time to time, deem advisable;
(5) making payments to securities dealers and others engaged in the
sales of Corporate III Shares; and
(6) providing training, marketing and support to such dealers and
others with respect to the sale of Corporate III Shares.

3. In consideration for -the services provided and the expenses incurred
by the Distributor pursuant to the Distribution Agreement, Corporate III Class
of each Cash Management Portfolio shall pay to the Distributor a fee at the
annual rate of up to (and including) .40% of such Class' average daily net
assets throughout the month, or such lesser amount as may be established from
time to time by the Trustees of the Trust, as specified in this paragraph;
provided that, for any period during which the total of such fee and all other
expenses of a Portfolio holding itself out as a money market fund under Rule 2a-
7 under the 1940 Act or of the Corporate III Class of such a Portfolio, would
exceed the gross income of that Portfolio (or of the Corporate III Class
thereof), such fee shall be reduced by such excess. Such fee shall be computed
daily and paid monthly. The determination of daily net assets shall be made at
the close of business each day throughout the month and computed in the manner
specified in each Portfolio's then current Prospectus for the determination of
the net asset value of Corporate Class III Shares, but shall exclude assets
attributable to any other Class of each Cash Management Portfolio. The
Distributor may use all or any portion of the fee received pursuant to the
Corporate Class III Plan to compensate securities dealers or other persons who
have engaged in the sale of Corporate Class III Shares pursuant to agreements
with the Distributor, or to pay any of the expenses associated with other
activities authorized under paragraph 2 hereof.

4. This Distribution Plan shall become effective with respect to the
Corporate Class III Shares of the Cash Management Portfolios on April __, 2000,
this Distribution Plan having been approved (1) by a vote of a majority of the
Trustees of the Trust. including a majority of Trustees who are not "interested
persons"
<PAGE>

of the Trust (as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Distribution Plan or in any
agreement related to the Distribution Plan (the Independent Trustees), cast in
person at a meeting called for the purpose of voting on Distribution Plan; and
(2) by a vote of a majority of the outstanding voting securities (as such term
is defined in Section 2(a)(42) of the 1940 Act) of the Corporate III Class of
the affected Portfolio.

5. During the existence of this Distribution Plan, the Trust will commit
the selection and nomination of those Trustees who are not interested persons of
the Trust to the discretion of such Independent Trustees.

6. This Distribution Plan shall, unless terminated as hereinafter
provided, remain in effect until [December 31, 2000] and from year to year
thereafter; provided, however, that such continuance is subject to approval
annually by a vote of a majority of the Trustees of the trust, including a
majority of the Independent Trustees, cast in person at a meeting called for the
purpose of voting on this Distribution Plan.

7. This Distribution Plan may be amended with respect to the Corporate III
Class of a Cash Management Portfolio, at any time by the Board of Trustees,
provided that (a) any amendment to increase materially the maximum fee provided
for in paragraph 3 hereof must be approved by a vote of a majority of the
outstanding voting, securities (as such term is defined in Section 2(a)(42) of
the 1940 Act) of the Corporate III Class of the affected Portfolio, and (b) any
material amendment of this Distribution Plan must be approved in the manner
provided in paragraph 4(l) above.

8. This Distribution Plan may be terminated with respect to the Corporate
III Class of a Portfolio at any time, without the payment of any penalty, by
vote of a majority of the Independent Trustees or by a vote of a majority of the
outstanding voting securities (as such term is defined in Section 2(a)(42) of
the 1940 Act) of the Corporate III Class of the affected Portfolio.

9. During the existence of this Distribution Plan, the Trust shall require
the Distributor to provide the Trust, for review by the Trust's Trustees, and
the Trustees shall review, at least quarterly, a written report of the amounts
expended in connection with financing any activity primarily intended to result
in the sale of Corporate III Shares (making estimates of such costs where
necessary or desirable) and the purposes for which such expenditures were made.

12. Consistent with the limitation of shareholder and Trustee liability as
set forth in the Trust's Declaration of Trust, any obligations assumed by the
Trust, a Portfolio or Corporate III Class thereof pursuant to this Plan and any
agreements related to this Plan shall be limited in all cases to the
proportionate ownership of Corporate III Class of the affected Portfolio and its
assets, and shall not constitute obligations of any shareholder of any other
Class of the affected Portfolio or other Portfolios of the Trust or of any
Trustee.

13. If any provision of the Distribution Plan shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the
Distribution Plan shall not be affected thereby.

-2-

<PAGE>

EXHIBIT 99(o)

Multiple Class of Shares Plan
for
ARK Funds
Dated June 22, 1995
Amended and Restated December 10, 1999

This Multiple Class Plan (the "Plan"), when effective in accordance with
its provisions, shall be the written plan contemplated by Rule 18f-3 under the
Investment Company Act of 1940, as amended (the "1940 Act"), for the investment
portfolios (each a "Portfolio") of ARK Funds, a Massachusetts business trust
(the "Fund").

1. Classes Offered. Each Portfolio may offer up to seven classes of its
----------------
shares: Class A, Class B Institutional Class, Institutional II Class, Corporate
Class, Corporate Class, and Corporate III Class (each, a "Class").

2. Distribution and Shareholder Service Fees. Distribution fees shall be
------------------------------------------
calculated and paid in accordance with the terms of the then-effective plan
pursuant to Rule 12b-1 under the 1940 Act for the applicable Class. Shareholder
service fees shall be calculated and paid in accordance with the terms of the
then-effective shareholder servicing plan for the applicable Class.
Distribution and shareholder service fees currently authorized are as set forth
in Exhibit I to this Plan.

3. Exchange Privileges.
--------------------

Class A: Class A shares of a Portfolio may be exchanged for Class A shares
-------
of another Portfolio. An exchange between Class A and another Class of any
Portfolio generally is not permitted; provided, however, that exchanges will be
permitted in the event a Class A shareholder becomes eligible to purchase such
other Class.

Class B: Class B shares of a Portfolio may be exchanged for Class B shares
-------
of another Portfolio. An exchange between Class B and another Class of any
Portfolio generally is not permitted; provided, however, that exchanges will be
permitted in the event a Class B shareholder becomes eligible to purchase such
other Class.

Institutional Class: Institutional Class shares of a Portfolio may be
-------------------
exchanged for Institutional Class shares of another Portfolio. An exchange
between the Institutional Class and another Class of any Portfolio generally is
not permitted; provided, however, that an exchange to Class A will occur
automatically should an Institutional Class shareholder become ineligible to
purchase additional Institutional Class shares (except in the case of a
Portfolio that does not have Class A, in which case, the Institutional Class
shares shall be redeemed). The Fund will provide thirty days notice of any such
exchange.

Institutional II Class: Institutional II Class shares of a Portfolio may
----------------------
be exchanged for Institutional II Class shares of another Portfolio. An
exchange between the Institutional II Class and another Class of any Portfolio
generally is not permitted; provided, however, that exchanges between Classes
will be permitted in the event an Institutional II Class shareholder becomes
<PAGE>

eligible to purchase additional Institutional Class shares; and provided
further, that an exchange to Class A will occur automatically should an
Institutional II Class shareholder become ineligible to purchase additional
Institutional II Class shares (except in the case of a Portfolio that does not
have Class A, in which case, the Institutional II Class shares shall be
redeemed). The Fund will provide thirty days notice of any such exchange.

Corporate Class: Corporate Class shares of a Portfolio may be exchanged
---------------
for Corporate Class shares of another Portfolio. An exchange between the
Corporate Class and another Class of any Portfolio generally is not permitted;
provided, however, that an exchange to Class A will occur automatically should a
Corporate Class shareholder become ineligible to purchase additional Corporate
Class shares (except in the case of a Portfolio that does not have Class A, in
which case, the Corporate Class shares shall be redeemed). The Fund will
provide thirty days notice of any such exchange.

Corporate II Class: Corporate II Class shares of a Portfolio may be
------------------
exchanged for Corporate II Class shares of another Portfolio. An exchange
between the Corporate II Class and another Class of any Portfolio generally is
not permitted; provided, however, that exchanges between Classes will be
permitted in the event a Corporate II Class shareholder becomes eligible to
purchase additional Corporate Class shares; and provided further, that an
exchange to Class A will occur automatically should a Corporate II Class
shareholder become ineligible to purchase additional Corporate II Class shares
(except in the case of a Portfolio that does not have Class A, in which case,
the Corporate II Class shares shall be redeemed). The Fund will provide thirty
days notice of any such exchange.

Corporate III Class: Corporate II Class shares of a Portfolio may be
-------------------
exchanged for Corporate II Class shares of another Portfolio. An exchange
between the Corporate III Class and another Class of any Portfolio generally is
not permitted; provided, however, that exchanges between Classes will be
permitted in the event a Corporate II Class shareholder becomes eligible to
purchase additional Corporate Class shares; and provided further, that an
exchange to Class A will occur automatically should a Corporate III Class
shareholder become ineligible to purchase additional Corporate III Class shares
(except in the case of a Portfolio that does not have Class A, in which case,
the Corporate III Class shares shall be redeemed). The Fund will provide thirty
days notice of any such exchange.

General: Exchanges will take place at NAV, without imposition of a sales
--------
load (if any), fee or other charge. After an exchange, the exchanged shares
will be subject to all fees applicable to the Class for which they were
exchanged. If the shareholder does not meet the requirements for investing in a
Class and declines to accept an automatic exchange, the Fund reserves the right
to redeem the shares upon expiration of the thirty-day notice period. The Fund
may require shareholders to complete an application or other documentation in
connection with an exchange.

-2-
<PAGE>

4. Expense Allocations. Expenses shall be allocated under this Plan as
-------------------
follows:

A. Class expenses: The following expenses may be allocated exclusively to
--------------
the applicable specific Class of shares: (i) distribution and shareholder
service fees and (ii) transfer agent fees.

B. Portfolio expenses: Expenses not allocated to specific Classes as
------------------
specified above shall be charged to the Portfolio and allocated daily to each
Class on the basis of the net asset value of that Class in relation to the net
asset value of the Portfolio.

5. Voting Rights. Each Class of shares governed by this Plan (i) shall have
-------------
exclusive voting rights on any matter submitted to shareholders that relates
solely to its arrangement; and (ii) shall have separate voting rights on any
matter submitted to shareholders in which the interests of one Class differ from
the interests of any other Class.

6. Effective Date of Plan. This Plan shall become effective upon the first
----------------------
business day of the month following approval by a vote of at least a majority of
the Trustees of the Fund, and a majority of the Trustees of the Fund who are not
"interested persons" of the Fund, which vote shall have found that this Plan as
proposed to be adopted, including the expense allocation, is in the best
interests of each Class and Portfolio individually and of the Fund as a whole;
or upon such other date as the Trustees shall determine. Any material amendment
to this Plan shall become effective upon the first business day of the month
following approval by a vote of at least a majority of the Trustees of the Fund,
and a majority of the Trustees of the Fund who are not "interested persons" of
the Fund, which vote shall have found that this Plan as proposed to be amended,
including the expense allocation, is in the best interests of each Class and
Portfolio individually and of the Fund as a whole; or upon such other date as
the Trustees shall determine.

7. Severability. If any provision of this Plan shall be held or made invalid
------------
by a court decision, statute, rule or otherwise, the remainder of the Plan shall
not be affected thereby.

8. Limitation of Liability. Consistent with the limitation of shareholder
-----------------------
liability as set forth in the Fund's Declaration of Trust, any obligations
assumed by any Portfolio or Class thereof, and any agreements related to this
Plan, shall be limited in all cases to the relevant Portfolio and its assets, or
Class and its assets, as the case may be, and shall not constitute obligations
of any other Portfolio or Class. All persons having any claim against a
Portfolio, or any Class thereof, arising in connection with this Plan, are
expressly put on notice of such limitation, and agree that any such claim shall
be limited in all cases to the relevant Portfolio and its assets, or Class and
its assets, as the case may be, and such person shall not seek satisfaction of
any such obligation from any other Portfolio or Class, or from the shareholders
or any shareholder of the Fund, of any Class or Portfolio; nor shall such person
seek satisfaction of any such obligation from the Trustees or any individual
Trustee of the Fund.

-3-
<PAGE>

EXHIBIT I TO MULTIPLE CLASS OF SHARES PLAN FOR ARK FUNDS

<TABLE>
<CAPTION>
DISTRIBUTION SHAREHOLDER
PORTFOLIO/CLASS SALES CHARGE ------------ SERVICE FEE*
--------------- ------------ FEE* -------------
---- (as a percentage of
(as a percentage of average net assets)
average net assets)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. Treasury Money Market Portfolio:
Institutional Class none none 0.15
Class A none 0.75 0.15
Institution II Class none 0.75 none
- -------------------------------------------------------------------------------------------------------------------
U.S. Gov't Money Market Portfolio:
Institutional Class none none 0.15
Class A none 0.75 0.15
Institutional II Class none 0.75 none
- -------------------------------------------------------------------------------------------------------------------
Money Market Portfolio:
Institutional Class none none 0.15
Class A none 0.75 0.15
Class B deferred 0.75 0.25
Institutional II Class none 0.75 none
- -------------------------------------------------------------------------------------------------------------------
PA Tax-Free Money Market Portfolio:
Institutional Class none none 0.25
Class A none 0.25 0.15
Institutional II Class none 0.15 0.20
- -------------------------------------------------------------------------------------------------------------------
Tax-Free Money Market Portfolio:
Institutional Class none none 0.15
Class A none 0.75 0.15
Institutional II Class none 0.75 none
- -------------------------------------------------------------------------------------------------------------------
Income Portfolio:
Institutional Class none none 0.15
Class A front-end 0.75 0.15
Class B deferred 0.75 0.25
- -------------------------------------------------------------------------------------------------------------------
Balanced Portfolio (formerly Growth
and Income Portfolio):
Institutional Class none none 0.15
Class A front-end 0.75 0.15
Class B deferred 0.75 0.25
- -------------------------------------------------------------------------------------------------------------------
Capital Growth Portfolio:
Institutional Class none none 0.15
Class A front-end 0.75 0.15
Class B deferred 0.75 0.25
- -------------------------------------------------------------------------------------------------------------------
Small-Cap Equity Portfolio (formerly
Special Equity Portfolio):
Institutional Class none none 0.15
Class A front-end 0.75 0.15
Class B deferred 0.75 0.25
- -------------------------------------------------------------------------------------------------------------------
Maryland Tax-Free Portfolio:
Institutional Class none none 0.15
Class A front-end 0.75 0.15
- -------------------------------------------------------------------------------------------------------------------
</TABLE>

-4-
<PAGE>

<TABLE>
<CAPTION>
DISTRIBUTION SHAREHOLDER
PORTFOLIO/CLASS SALES CHARGE ------------ SERVICE FEE*
--------------- ------------ FEE* -------------
---- (as a percentage of
(as a percentage of average net assets)
average net assets)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Blue Chip Equity Portfolio:
Institutional Class none none 0.15
Class A front-end 0.75 0.15
Class B deferred 0.75 0.25
- -------------------------------------------------------------------------------------------------------------------
Short-Term Treasury Portfolio:
Institutional Class none none 0.15
Class A front-end 0.75 0.15
- -------------------------------------------------------------------------------------------------------------------
Intermediate Fixed Income Portfolio:
Institutional Class none none 0.15
Class A front-end 0.75 0.15
- -------------------------------------------------------------------------------------------------------------------
Pennsylvania Tax-Free Portfolio:
Institutional Class none none 0.15
Class A front-end 0.75 0.15
- -------------------------------------------------------------------------------------------------------------------
Equity Income Portfolio:
Institutional Class none none 0.15
Class A front-end 0.75 0.15
- -------------------------------------------------------------------------------------------------------------------
Mid-Cap Equity Portfolio:
Institutional Class none none 0.15
Class A front-end 0.75 0.15
- -------------------------------------------------------------------------------------------------------------------
Equity Index Portfolio
Institutional Class none none 0.15
Class A front-end 0.75 0.15
- -------------------------------------------------------------------------------------------------------------------
Value Equity Portfolio
Institutional Class none none 0.15
Class A front-end 0.75 0.15
Class B deferred 0.75 0.25
- -------------------------------------------------------------------------------------------------------------------
U.S. Government Bond Portfolio
Institutional Class none none 0.15
Class A front-end 0.75 0.15
- -------------------------------------------------------------------------------------------------------------------
Short-Term Bond Portfolio
Institutional Class none none 0.15
Class A front-end 0.75 0.15
- -------------------------------------------------------------------------------------------------------------------
International Equity Selection
Portfolio none none 0.15
Institutional Class front-end 0.75 0.15
Class A
- -------------------------------------------------------------------------------------------------------------------
Prime Cash Management Portfolio:
Corporate Class none none none
Corporate II Class none 0.25 none
Corporate III Class none 0.40 none
- -------------------------------------------------------------------------------------------------------------------
U.S. Government Cash Management
Portfolio: none none none
Corporate Class none 0.25 none
Corporate II Class none 0.40 none
Corporate III Class
- -------------------------------------------------------------------------------------------------------------------
U.S. Treasury Cash Management
Portfolio: none none none
Corporate Class none 0.25 none
</TABLE>

-5-
<PAGE>

* The fees stated above are the contractual fees stated in the various
Distribution and Shareholder Services Plans (the "Plans") adopted for the Class
A, Class B, Institutional Class, Institutional II Class, Corporate Class,
Corporate Class II and Corporate Class III shares and approved by the Board of
Trustees. From time to time, the Board sets the rates to be paid pursuant to
the Plans, which may be lower than the maximum authorized under the Plans.

-6-

<PAGE>

EXHIBIT 99(p)(1)

ARK FUNDS

CODE OF ETHICS

Adopted Pursuant to Rule 17j-1 under the
Investment Company Act of 1940
------------------------------

I. INTRODUCTION
------------

ARK Funds (the "Fund") has adopted this Code of Ethics (the "Code")
pursuant to Rule 17j-1 under the Investment Company Act of 1940, as amended (the
"Investment Company Act"). In adopting this Code, the Fund acknowledges that it
and all persons subject to this Code must: (1) at all times place the interests
of Fund shareholders first; (2) conduct personal securities transactions in a
manner consistent with this Code and avoid any actual or potential conflict of
interest or any abuse of a position of trust and responsibility; and (3) adhere
to the fundamental standard that personnel associated with the Fund should not
take inappropriate advantage of their positions.

This Code applies to Access Persons (as defined below). The Fund's
Distributor has adopted a code of ethics pursuant to Rule 17j-1. Except as
otherwise provided in this Code, Access Persons who are officers or employees of
the Distributor or its affiliates are not subject to this Code.

II. DEFINITIONS
-----------

(a) "Access Person" means any trustee, officer or advisory person of the
Fund provided, however, that any Access Person who is an officer or employee of
the Distributor or its affiliates, or an "interested person" (within the meaning
of Section 2(a)(19) of the Investment Company Act) of the Distributor, shall not
be subject to this Code, except to the extent provided in Section V(d). An
"advisory person" of the Fund means (i) any employee of the Adviser (or of any
company in a control relationship with the Adviser) who, in connection with his
or her regular functions or duties, makes, participates in or normally obtains
information regarding the current purchases or sales of a Security by a
Portfolio, or whose functions relate to the making of any recommendations with
respect to such purchases and sales, and (ii) any natural person in a control
relationship to the Fund or the Adviser who normally obtains information
concerning current recommendations made to a Portfolio with regard to purchases
or sales of a Security.

(b) "Adviser" means Allied Investment Advisors, Inc., or any other
investment adviser or subadviser of a Portfolio.
<PAGE>

(c) "Beneficial Ownership" shall be interpreted in a manner consistent
with Rule 16a-1(a)(2) under the Securities Exchange Act of 1934, except that the
determination of direct or indirect beneficial ownership shall apply to all
Securities which a person subject to this Code has or acquires. (For a further
explanation of Beneficial Ownership, see Appendix A.)

(d) "Board" means the Board of Trustees of the Fund.

(e) "Compliance Officer" means the individual (or his or her designee)
acting pursuant to delegated authority from the Board; provided, however, that
if such individual shall engage in any conduct or transaction subject to this
Code requiring approval or other action by the Compliance Officer, such approval
shall be granted or such other action shall be taken by his or her immediate
supervisor, or such other individual as the Board shall approve.

(f) "Control" shall have the meaning set forth in Section 2(a)(9) of the
Investment Company Act.

(g) "Distributor" means SEI Investments Distribution Co.

(h) "Independent Trustee" means a trustee of the Fund who is not an
"interested person" of the Fund within the meaning of Section 2(a)(19) of the
Investment Company Act.

(i) "Investment Personnel" means any Access Person who occupies the
position of Portfolio Manager, any Access Person who provides or supplies
information and/or advice to any Portfolio Manager, and any Access Person who
executes or helps execute any Portfolio Manager's investment decisions for a
Portfolio.

(j) "Portfolio" means a separate investment portfolio of the Fund.

(k) "Portfolio Manager" means any employee of the Adviser whose assigned
duties are to manage a Portfolio and who is vested with direct responsibility
and authority to make investment decisions on behalf of the Portfolio.

(l) "Security" shall have the meaning set forth in Section 2(a)(36) of
the Investment Company Act and shall include equity and debt securities, options
on and warrants to purchase equity and debt securities, shares of closed-end
investment companies, and instruments and securities which are related to, but
not the same as, a Security; provided, however, that the term "Security" shall
not include securities issued or guaranteed by the U.S. government or its
agencies or instrumentalities, bankers' acceptances, bank certificates of
deposit, commercial paper and repurchase agreements covering any of the
foregoing, index options, shares of registered open-end investment companies,
securities which are not eligible for purchase or sale by any Portfolio, and
such other instruments as the Board may specify from time to time. For purposes
of Section III and Section IV of this Code, a trade in a put or call option, any
<PAGE>

security that is convertible into or exchangeable for a security, or any other
derivative instrument, shall be deemed to be a trade in the underlying security.

(m) "Security Held or to be Acquired" by a Portfolio means any Security
which, within the most recent 15 days, (i) is or has been held by a Portfolio,
or (ii) is being or has been considered by a Fund or the Adviser for purchase by
a Portfolio.

III. PRECLEARANCE AND BLACKOUT PERIODS
---------------------------------

(a) Securities Transactions. No Access Person shall purchase or sell,
-----------------------
directly or indirectly, any Security in which he or she has, or by reason of
such transaction acquires, any direct or indirect Beneficial Ownership, unless
such purchase or sale has been submitted for preclearance and has been approved
by the Compliance Officer; provided, however, that this prohibition shall not
apply to:

(1) purchases or sales effected in any account over which neither the
Access Person nor any household member of the Access Person has
direct or indirect influence or control;

(2) purchases that are part of an automatic dividend reinvestment plan;

(3) purchases effected upon the exercise of rights issued pro rata to all
holders of a class of securities and sales of such rights so
acquired; and

(4) an Access Person who is subject to this Code solely by reason of
being a trustee of the Fund and who does not know, or in the course
of fulfilling his or her official duties as a trustee of the Fund
have reason to know, that during the 15-day period immediately
preceding or after the date of the transaction in a Security by the
trustee, such Security is or was purchased or sold by a Portfolio or
such purchase or sale by a Portfolio is or was considered by the
Adviser.

The Compliance Officer shall implement appropriate procedures to monitor
personal investment activity by Access Persons after preclearance has been
granted.

(b) Blackout Periods. (1) No Access Person (other than a trustee of the
----------------
Fund who is not an employee of the Adviser) shall execute a transaction in a
Security on a day during which any Portfolio has a pending "buy" or "sell" order
in that same Security until that order is executed or withdrawn; (2) a Portfolio
Manager may not buy or sell a Security within seven calendar days before or on
the day that the Portfolio for which such person serves as Portfolio Manager
trades in that Security; and (3) a Portfolio Manager may not buy or sell a
Security within seven days after the day the Portfolio for which such person
serves as Portfolio Manager trades in that Security, unless (A) the Portfolio
Manager's trade and the Portfolio's trade are parallel transactions (i.e., both
transactions are purchases or both are sales) or (B)
<PAGE>

the Security is an equity security which has had an average daily trading volume
over 150,000 shares during the last 50 trading days, as reported by Bloomberg,
or other similar reporting service, and the total amount of such Portfolio
Manager's trade does not exceed more than one percent of the preceding day's
trading volume for such Security. Any profits realized on trades within the
proscribed periods shall be required to be disgorged as directed by the
Compliance Officer.

(c) Exceptions. The Compliance Officer may grant exceptions to the
----------
prohibitions set forth in this Section III and in Section IV, paragraphs (b)
through (e) below, in whole or in part, upon such conditions as the Compliance
Officer may impose if the Compliance Officer determines that no harm resulted to
a Portfolio or, with respect to paragraph (b) of this Section, and that to
require disgorgement would be inequitable or result in undue hardship to the
individual who entered into the transaction.

IV. PROHIBITED CONDUCT AND TRANSACTIONS
-----------------------------------

(a) Fraudulent Purchase or Sale. No Access Person shall, in connection
---------------------------
with the purchase or sale, directly or indirectly, by such person of a Security
Held or to be Acquired by a Portfolio:

(1) employ any device, scheme or artifice to defraud the Fund;

(2) make to the Fund any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements made,
in light of the circumstances under which they are made, not
misleading;

(3) engage in any act, practice or course of business which would operate
as a fraud or deceit upon the Fund; or

(4) engage in any manipulative practice with respect to the Fund.

(b) Initial Public Offerings. No Investment Personnel shall acquire any
------------------------
Security in an initial public offering.

(c) Private Placements. No Investment Personnel shall acquire Securities
------------------
in a private placement without prior approval of the Compliance Officer. This
prior approval shall take into account, among other factors, whether the
investment opportunity should be reserved for the Fund and its shareholders, and
whether the opportunity is being offered to an individual by virtue of his or
her position with the Fund. Investment Personnel who have been authorized to
acquire Securities in a private placement are required to disclose that
investment when they play a part in a Portfolio's subsequent consideration of an
investment in the issuer. In such circumstances, the decision to purchase
securities of the issuer should be subject to an independent review by
Investment Personnel with no personal interest in the issuer.
<PAGE>

(d) Short-Term Trading Profits. No Investment Personnel shall profit in
--------------------------
the purchase and sale, or sale and purchase, within 30 days of a Security. Any
profits realized on such short-term trades shall be required to be disgorged as
directed by the Compliance Officer.

(e) Gifts. No Investment Personnel shall accept a gift of more than de
-----
minimis value from any person or entity that does business with or on behalf of
the Fund.

(f) Service as a Director/Trustee. No Investment Personnel shall serve on
-----------------------------
the board of directors/trustees of a publicly traded company, absent prior
authorization based upon a determination by the Compliance Officer that the
board service would be consistent with the interests of the Fund and its
shareholders. In the event board service is authorized, Investment Personnel
serving as directors/trustees shall be isolated, through "Chinese Wall" or other
procedures, from those making investment decisions about securities of any
issuer for which any such Investment Personnel act as director/trustee.

V. REPORTING AND CERTIFICATION
---------------------------

(a) Quarterly Personal Transaction Reports. (1) All Access Persons shall
--------------------------------------
report to the Compliance Officer the information described in paragraph (2)
below with respect to transactions in any Security in which the Access Person
has, or by reason of such transaction acquires, any direct or indirect
Beneficial Ownership; provided, however, that an Access Person shall not be
required to make a report with respect to transactions effected for any account
over which such person does not have any direct or indirect influence or
control. If no transaction occurs within the calendar quarter, the Access
Person shall file a "no action" report. Every report shall be made no later
than ten calendar days after the end of the calendar quarter.

(2) Reports filed pursuant to paragraph (1) above shall contain the
following information:

(A) the trade date of the transaction;

(B) the title and number of shares or principal amount;

(D) the price;

(E) the name of the broker, dealer, bank or company through which
such transaction was effected; and
<PAGE>

(F) if the Access Person establishes a securities account during
the quarterly period, the name of the broker, dealer or bank
with whom the account is established and the date the account
is established.

Any report hereunder may contain a statement that the report shall not be
construed as an admission by the person making such report that he or she has
any direct or indirect Beneficial Ownership in the Security to which the report
relates.

(3) Notwithstanding paragraph (1) above, an Independent Trustee
who would be required to make a report solely by reason of being a trustee of
the Fund shall not be required to make a report unless he or she knows or, in
the course of fulfilling his or her official duties as a trustee of the Fund,
should know that, during the 15-day period immediately preceding or after the
date of the transaction in a Security by the Independent Trustee, such Security
is or was purchased or sold by a Portfolio or such purchase or sale by a
Portfolio is or was considered by the Adviser.

(4) All Access Persons (other than a trustee or officer of the
Fund who is not an employee of the Adviser or it affiliates) shall direct their
brokers to supply to the Compliance Officer, on a timely basis, duplicate copies
of confirmations of all personal transactions in Securities effected for any
account in which such Access Person has any direct or indirect Beneficial
Ownership interest and periodic statements relating to any such account.

(b) Initial and Annual Holdings Report. In addition to the reporting
----------------------------------
requirements provided for elsewhere herein, all Access Persons shall disclose to
the Compliance Officer in writing, within ten days of becoming an Access Person
and on an annual basis thereafter, the name, number of shares and principal
amount of all securities holdings (including holdings of individuals in his or
her household) upon commencement of employment and thereafter on an annual
basis.

(c) Annual Certifications. All Access Persons shall certify in
---------------------
writing to the Compliance Officer annually that they have read and understand
this Code and recognize that they are to it. Further, Access Persons shall
certify in writing to the Compliance Officer annually that they will comply with
the requirements of this Code and will disclose or report all personal
securities transactions required to be disclosed or reported pursuant to the
requirement of this Code.

(d) Reports to Board. The Compliance Officer shall report to the
----------------
Board any material deviations from or violations of this Code or of any
requirement imposed as a condition to preclearing a Securities transaction. The
Distributor shall promptly report to the Compliance Officer all violations of
its code of ethics. Any material deviations from or violations of the
Distributor's code of ethics relating to the Fund shall be reported to the
Board.
<PAGE>

VI. SANCTIONS
---------

Upon learning of a violation of this Code, the Board may impose such
sanctions as it deems appropriate. In addition, the Board may recommend that the
Adviser, the Distributor or their affiliates impose sanctions on any person
employed by them, including, among other things, a letter of censure or
suspension, or termination of the employment of the violator.

VII. BOARD REVIEW
------------

The Compliance Officer shall prepare an annual report to the Board
that (1) summarizes existing procedures concerning personal investing and any
changes in the procedures made during the past year; (2) identifies any
violations requiring significant remedial action during the past year; and (3)
identifies any recommended changes in existing restrictions or procedures based
upon the experience under this Code, evolving industry practices, or
developments in applicable laws or regulations.

As adopted on December 10, 1999.
<PAGE>

Appendix A - Beneficial Ownership

As used in the Code of Ethics, Beneficial Ownership will be
interpreted in the same manner as it would be in determining whether a person is
subject to Section 16 of the Securities Exchange Act of 1934 (the "Exchange
Act"), except that the determination of such ownership will apply to all
Securities. For the purposes of the Exchange Act, Beneficial Ownership
includes:

a. the receipt of benefits substantially equivalent to those of
ownership through relationship, understanding, agreement, contract
or other arrangements; or

b. the power to vest or revest such ownership in oneself at once, or
at some future time.

Using the above described definition as a broad guideline, the ultimate
determination of Beneficial Ownership will be made in light of the facts of the
particular case. Key factors are the degree of the individual's ability to
exercise discretion to invest in, sell or exercise voting rights of the
Security, and the ability of the individual to benefit from the proceeds of the
Security.

1. Securities Held by Family Members
---------------------------------

As a general rule, a person is regarded as the Beneficial Owner of a
Security held in the name of his or her spouse and their minor children. In the
absence of special circumstances, these family relationships ordinarily confer
benefits substantially equivalent to ownership.

In addition, absent countervailing facts, it is expected that a
Security held by a relative who shares the same household as the reporting
person will be reported as beneficially owned by such person.

2. Securities Held by a Company
----------------------------

Generally, ownership of a Security of a company does not constitute
Beneficial Ownership with respect to the holdings of the company in the
Securities of another issuer. However, an owner of Securities in a holding
company will be deemed to have Beneficial Ownership in the holdings of the
holding company where:

(a) the company is merely a medium through which one or several persons
in a small group invest or trade in Securities; and

(b) the company has no other substantial business.
<PAGE>

In such cases, the persons who are in a position of control of the
holding company are deemed to have beneficial interest in the Securities of the
holding company.

3. Securities Held in Trust
------------------------

Beneficial Ownership of Securities in a private trust includes:

(a) the ownership of Securities as a trustee where either the trustee
or members of his or her immediate family have a vested interest in
the income or corpus of the trust;

(b) the ownership of a vested beneficial interest in a trust; and

(c) the ownership of Securities as a settlor of a trust in which the
settlor has the power to revoke the trust without obtaining the
consent of all the beneficiaries.

As used in this section, the "immediate family" of a trustee means:

(a) a son or daughter of the trustee or a descendent of either;

(b) a stepson or stepdaughter of the trustee;

(d) a stepfather or stepmother of the trustee; and

(e) a spouse of the trustee.

For the purposes of determining whether any of the foregoing relations
exists, a legally adopted child of a person shall be considered a child of such
person by blood.

4. Miscellaneous Issues
--------------------

Beneficial Ownership does not include, however, a person's
interest in portfolio securities held by:

(a) any holding company registered under the Public Utility Holding
Company Act;

(b) any investment company registered under the Investment Company Act;

(c) a pension or retirement plan holding securities of an issuer whose
employees generally are the beneficiaries of the plan; and

A-9
<PAGE>

(d) a business trust with over 25 beneficiaries.

Participation in a pension or retirement plan will result in
Beneficial Ownership of the portfolio securities if plan participants can
withdraw and trade the securities without withdrawing from the plan.

A-10

<PAGE>

EXHIBIT 99(p)(2)

SEI INVESTMENTS COMPANY
CODE OF ETHICS AND
INSIDER TRADING POLICY

January, 2000
<PAGE>

SEI INVESTMENTS COMPANY
CODE OF ETHICS AND INSIDER TRADING POLICY
TABLE OF CONTENTS

I. General Policy

II. Code of Ethics

A. Purpose of Code
B. Employee Categories
C. Restrictions on Personal Securities Transactions
D. Pre-clearance of Personal Securities Transactions
E. Reporting Requirements
F. Detection and Reporting of Code Violations
G. Violations of the Code of Ethics
H. Confidential Treatment
I. Definitions Applicable to the Code of Ethics

III. Insider Trading Policy

A. What is "Material" Information?
B. What is "Nonpublic Information"?
C. Who is an Insider?
D. What is Misappropriation?
E. What is Tipping?
F. Identifying Inside Information?
G. Trading in SEI Investments Company Securities
H. Violations of the Insider Trading Policy
<PAGE>

I. GENERAL POLICY

SEI Investments Company, through various subsidiaries (jointly "SEI"), is an
investment adviser, administrator, distributor, and/or trustee of investment
companies, collective investment trusts, investment partnerships, and asset
management accounts (jointly "Investment Vehicles"). As an investment adviser,
SEI is subject to various U.S. securities laws and regulations governing the use
of confidential information and personal securities transactions. This Code of
Ethics and Insider Trading Policy (jointly "Policy") was developed based on
those laws and regulations, and sets forth the procedures and restrictions
governing the personal securities transactions of all SEI employees.

SEI has a highly ethical business culture and expects that all employees will
conduct any personal securities transactions consistent with this Policy and in
such a manner as to avoid any actual or potential conflict of interest or abuse
of a position of trust and responsibility. When an employee invests for his or
her own account, conflicts of interest may arise between a client's and the
employee's interest. Such conflicts may include using an employee's advisory
position to take advantage of available investment opportunities, taking an
investment opportunity from a client for an employee's own portfolio, or
frontrunning, which occurs when an employee trades in his or her personal
account before making client transactions. As a fiduciary, SEI owes a duty of
loyalty to clients which requires that an employee must always place the
interests of clients first and foremost and shall not take inappropriate
advantage of his or her position. Thus, SEI employees must conduct themselves
and their personal securities transactions in a manner that does not create
conflicts of interest with the firm's clients.

Pursuant to this Policy, employees will be subject to various pre-clearance and
reporting standards, based on their responsibilities within SEI. As a result,
it is important that all employees pay special attention to the employee
category section within this Policy to determine what provisions of the Policy
applies to them, as well as to the sections on restrictions, pre-clearance, and
reporting of personal securities transactions.

Employees outside the United States are subject to this Policy and the
applicable laws of the jurisdictions in which they are located. These laws may
differ substantially from U.S. law and may subject employees to additional
requirements. To the extent any particular portion of the Policy is
inconsistent with foreign law not included herein or within the firm's
Compliance Manual, employees should consult their designated Compliance Officer
or the Compliance Department at SEI's Oaks facility.

Each employee subject to this Policy must read and retain a copy and agree to
abide by its terms. Failure to comply with the provisions of this Policy may
result in the imposition of serious sanctions, including, but not limited to
disgorgement of profits, dismissal, substantial personal liability and/or
referral to regulatory or law enforcement agencies.
<PAGE>

Any questions regarding SEI's policy or procedures should be referred to the
Compliance Department, which currently includes Cyndi Parrish, the Compliance
Director. (x2807).

II. CODE OF ETHICS

A. Purpose of Code

This Code of Ethics ("Code") was adopted pursuant to the provisions of Section
17(j) of the Investment Company Act of 1940, as amended, and Rule 17j-1
thereunder, as amended. Those provisions of the U.S. securities laws were
adopted to prevent persons who are actively engaged in the management, portfolio
selection or underwriting of registered investment companies from participating
in fraudulent, deceptive or manipulative acts, practices or courses of conduct
in connection with the purchase or sale of securities held or to be acquired by
such companies. Employees (including contract employees) will be subject to
various pre-clearance and reporting standards based on their responsibilities
within SEI and accessibility to certain information. Those functions are set
forth in the categories listed below.

B. Employee Categories

1. Access Person - any director, officer or employee of SEI Investments Mutual
Fund Services who, in connection with his or her regular functions or
duties, makes, participates in, or obtains prior or contemporaneous
information regarding the purchase or sale of an Investment Vehicle's
portfolio securities for which SEI acts as distributor and/or
administrator.

2. Investment Person - any director, officer or employee of the Asset
Management Group who (1) directly oversees the performance of one or more
sub-advisers for any Investment Vehicle for which SEI acts as investment
adviser, (2) executes or helps execute portfolio transactions for any such
Investment Vehicle, or (3) obtains or is able to obtain prior or
contemporaneous information regarding the purchase or sale of an Investment
Vehicle's portfolio securities.

3. Portfolio Persons - any director, officer or employee entrusted with direct
responsibility and authority to make investment decisions affecting one or
more client portfolios.

4. Registered Representative - any director, officer or employee who is
registered with the National Association of Securities Dealers as a
registered representative (Series 6, 7 or 63), a registered principal
(Series 24 or 26) or an investment representative (Series 65), regardless
of job title or responsibilities.

-2-
<PAGE>

5. Associate - any director, officer or employee who does not fall within
definitions 1, 2, 3 or 4 above.

C. Restrictions on Personal Securities Transactions

When buying or selling securities, SEI employees may not employ any device,
scheme or artifice to defraud, mislead, or manipulate any fund or investment
client. The following restrictions are applicable to an employee's personal
securities transactions.

1. Access Persons:

. may not purchase or sell, directly or indirectly, any Security within
24 hours before or after the time that the same (or a related)
Security is being purchased or sold by any Investment Vehicle for
which SEI acts as advisor, distributor and/or administrator.

. may not acquire Securities as part of an Initial Public
Offering ("IPO") without obtaining the written approval of the
designated Compliance Officer at Mutual Fund Services before directly
or indirectly acquiring a beneficial ownership in such securities.

. may not acquire a beneficial ownership interest in Securities issued
in a private placement transaction without obtaining prior written
approval from the designated Compliance Officer at Mutual Fund
Services.

2. Investment Persons:

. may not profit from the purchase and sale or sale and purchase of a
Security within 60 days of acquiring or disposing of Beneficial
Ownership of that Security. This prohibition does not apply to
transactions resulting in a loss, or to futures or options on futures
on broad-based securities indexes or U.S. government securities.

. may not acquire Securities as part of an Initial Public Offering
without obtaining the written approval of the Compliance Department
before directly or indirectly acquiring a beneficial ownership in
such securities.

-3-
<PAGE>

. may not acquire a beneficial ownership interest in Securities issued
in a private placement transaction without obtaining prior written
approval from the Compliance Department.

. may not receive any gift of more than de minimus value (currently
$100.00 per year) from any person or entity that does business with
or on behalf of any Investment Vehicle.

. may not serve on the board of directors of any publicly traded
company.

3. Portfolio Persons:

. may not purchase or sell, directly or indirectly, any Security within
7 days before or after a client portfolio has executed a trade in
that same (or an equivalent) Security, unless the order is withdrawn.

. may not acquire Securities as part of an Initial Public Offering
without obtaining the written approval of the designated Compliance
Officer before directly or indirectly acquiring a beneficial
ownership in such securities.

. may not acquire a beneficial ownership interest in Securities issued
in a private placement transaction without obtaining prior written
approval from the Compliance Department.

. may not receive any gift of more than de minimus value (currently
$100.00 per year) from any person or entity that does business with
or on behalf of any Investment Vehicle.

. may not serve on the board of directors of any publicly traded
company.

4. Registered Representatives:

. may not acquire Securities as part of an Initial Public Offering.

D. Pre-clearance of Personal Securities Transactions

1. Access, Investment and Portfolio Persons:

-4-
<PAGE>

. must pre-clear each proposed securities transaction with the
Compliance Department or the designated Compliance Officer for
Accounts held in their names or in the names of others in which they
hold a Beneficial Ownership interest. No transaction in Securities
may be effected without the prior written approval of the Compliance
Department or the designated Compliance Officer, except as set forth
below in Section D.4 which sets forth the securities transactions
that do not require pre-clearance.

. the Compliance Department or the designated Compliance Officer will
keep a record of the approvals, and the rationale supporting,
investments in IPO and private placement transactions.

2. Registered Representatives/Associates:

. must pre-clear transactions with the Compliance Department or
designated Compliance Officer only if the Registered Representative
-------
or Associate knew or should have known at the time of the transaction
that, during the 24 hour period immediately preceding or following
the transaction, the Security was purchased or sold or was being
considered for purchase or sale by any Investment Vehicle.

3. Transactions that do not have to be pre-cleared:
------

. Purchases or sales over which the employee pre-clearing the
transaction ( the "Pre-clearing Person") has no direct or indirect
influence or control;

. Purchases, sales or other acquisitions of Securities which are non-
volitional on the part of the Pre-clearing Person or any Investment
Vehicle, such as purchases or sales upon exercise of puts or calls
written by the Pre-clearing Person, sales from a margin account
pursuant to a bona fide margin call, stock dividends, stock splits,
---------
mergers, consolidations, spin-offs, or other similar corporate
reorganizations or distributions;

. Purchases which are part of an automatic dividend reinvestment plan
or automatic employee stock purchase plans;

. Purchases effected upon the exercise of rights issued by an issuer
pro rata to all holders of a class of its Securities, to the extent
--------
such rights were acquired from such issuer;

. Acquisitions of Securities through gifts or bequests; and

. Transactions in open-end mutual funds.
--------

-5-
<PAGE>

4. Pre-clearance procedures:

. All requests for pre-clearance of securities transactions must be
submitted to the Compliance Department or the designated Compliance
Officer by completing a Pre-clearance Request Form (attached as
Exhibit 1). SEI Employees located in the U.S. with access to the I
drive may also complete an electronic version of the form located at
I:\register\preform.doc.

. The following information must be provided on the Form:
----

a. Name, date, extension, title;

b. Transaction detail, i.e., whether the transaction is a
buy or sell; the security name and security type; number
of shares; price; date acquired if a sale; and whether
the security is held in a portfolio or Investment
Vehicle, part of an initial public offering, or part of a
private placement transaction; and

c. Signature and date; if electronically submitted, initial
and date.

. The Compliance Department or the designated Compliance Officer will
notify the employee whether the request is approved or denied by
telephone or email, and by sending a copy of the signed form to the
employee. An employee is not officially notified that the transaction
has been pre-cleared until he or she receives a copy of the signed
form. Employees should retain copies of the signed form .

. Employees may not submit a Pre-clearance Request Form for a
transaction that he or she does not intend to execute.

. Pre-clearance authorization is valid for 3 business days only.
Transactions, which are not completed within this period, must be
resubmitted with an explanation why the previous pre-cleared
transaction was not completed.

. Investment persons must submit to the Compliance Department or the
designated Compliance Officer transaction reports showing the
transactions in all the Investment Vehicles for which SEI or a sub-
adviser serves as an investment adviser for the 24 hour period before
and after the date on which their securities transactions were
effected. Transaction reports need only be submitted for the
portfolios that hold or are eligible to purchase and sell the types
of securities proposed to be bought or sold by the Investment Person.
For example, if the Investment Person seeks to obtain approval for a
proposed equity trade, only the transaction reports for the
portfolios effecting transactions in equity securities are required.

-6-
<PAGE>

. The Compliance Department or the designated Compliance Officer will
maintain pre-clearance records for 5 years.

E. Reporting Requirements

1. Duplicate Brokerage Statements [All Employees]
-------------

. All SEI Employees are required to instruct their brokers/dealers to
file duplicate brokerage statements with the Compliance Department at
SEI Oaks. Employees in SEI's global offices are required to have
their duplicate statements sent to the offices in which they are
located. Statements must be filed for all Accounts (including those
in which employees have a Beneficial Ownership interest), except
those that trade exclusively in open-end mutual funds, government
securities, or SEI stock through the employee stock/stock option
plan. Failure of a broker-dealer to send duplicate statements will
not excuse an Employee's violation of this Section, unless the
Employee demonstrates that he or she took every reasonable step to
monitor the broker's or dealer's compliance.

. Sample letters instructing the brokers/dealers to send the statements
to SEI are attached as Exhibit 2, and may be found at
I:\register\407pers.doc and I:\register\permltr.doc. If the broker or
dealer requires a letter authorizing a SEI employee to open an
account, the permission letter may used and may be found at
I:\register\permltr.doc. Please complete the necessary information in
the letter and forward a signature ready copy to the Compliance
Department.

. If no such duplicate statement can be supplied, the Employee should
contact the Compliance Department or the designated Compliance
Officer.

2. Initial Holdings Report [Access, Investment and Portfolio Persons]
----------------------------------------

. Access, Investment and Portfolio Persons must submit an Initial
Holdings Report to the Compliance Department or designated Compliance
Officer disclosing every security beneficially owned directly or
indirectly by such person within 10 days of becoming an Access,
Investment or Portfolio Person.

. The Initial Holdings Report must include the following information:
(1) the title of the security; (2) the number of shares held; (3) the
principal amount of the security; and (4) the name of the broker,
dealer or bank where the security is held. The information disclosed
in the report must be current as of a date no more than 30 days
before the report is submitted.

-7-
<PAGE>

. The Initial Holdings Report is attached as Exhibit 3 to this Code and
can be found on the I drive at I:register\inhold.doc.

3. Quarterly Report of Securities Transactions [Access, Investment and
----------------------
Portfolio Persons]
-----------------

. Access, Investment and Portfolio Persons must submit quarterly
transaction reports of the purchases and/or sales of securities in
which such persons have a direct or indirect Beneficial Ownership
interest (See Exhibit 4-Quarterly Transaction Report). The report
---
will be provided to all Investment Persons before the end of each
quarter by the Compliance Department or the designated Compliance
Officer and must be completed and returned no later than 10 days
---------------------
after the end of each calendar quarter. Quarterly Transaction Reports
that are not returned by the date they are due will be considered
----
late and will be reported as violations of the Code of Ethics.
Investment and Portfolio Persons who repeatedly return the reports
late (5 late filings) will be subject to a monetary fine for their
Code of Ethics violations.

. The following information must be provided on the report:

a. The date of the transaction, the description and number
of shares, and the principal amount of each security
involved;

b. Whether the transaction is a purchase, sale or other
acquisition or disposition;

c. The transaction price; and

d. The name of the broker, dealer or bank through whom the
transaction was effected.

4. Annual Report of Securities Holdings [Access, Investment and
----------------------
Portfolio Persons]
-----------------

. On an annual basis, Investment and Portfolio Persons must submit to
the Compliance Department or the designated Compliance Officer an
Annual Report of Securities Holdings that contains a list of all
securities subject to this Code in which they have any direct or
indirect Beneficial Ownership interest (See Exhibit 5 - Annual
---
Securities Holdings Report). The information disclosed in the report
must be current as of a date no more than 30 days before the report
is submitted.

-8-
<PAGE>

. Annual reports must be returned to the Compliance Department or the
designated Compliance Officer within 30 days after the end of the
calendar year-end.

4. Annual Certification of Compliance [All Employees]
-------------

. All employees will be required to certify annually that they:

- have read the Code of Ethics;
- understand the Code of Ethics; and
- have complied with the provisions of the Code of Ethics.

. The Compliance Department or the designated Compliance Officer will
send out annual forms (attached as Exhibit 6) to all employees that
must be completed and returned no later than 30 days after the end of
-------------
the calendar year.

F. Detection and Reporting of Code Violations

The Compliance Department or the designated Compliance Officer will :

. review the trading activity reports or duplicate statements
filed by Employees, focusing on patterns of personal trading;

. review the trading activity of Investment Vehicles;

. review the holdings reports submitted by Access, Investment and
Portfolio Persons;

. prepare an Annual Issues and Certification Report to the Board
of Trustees or Directors of the Investment Vehicles that, (1)
describes the issues that arose during the year under this
Code, including, but not limited to, material violations of and
sanctions under the Code, and (2) certifies that SEI has
adopted procedures reasonably necessary to prevent its access,
investment and portfolio personnel from violating this Code;
and

. prepare a written report to SEI management personnel outlining
any violations of the Code together with recommendations for
the appropriate penalties.

-9-
<PAGE>

G. Violations of the Code of Ethics

1. Penalties:

. Employees who violate the Code of Ethics may be subject to
serious penalties which may include:
- written warning;
- reversal of securities transaction;
- restriction on trading privileges;
- disgorgement of trading profits;
- fine;
- suspension or termination of employment; and/or
- referral to regulatory or law enforcement agencies.

2. Penalty Factors:

. Factors which may be considered in determining an appropriate
penalty include, but are not limited to:
- the harm to clients;
- the frequency of occurrence;
- the degree of personal benefit to the employee;
- the degree of conflict of interest;
- the extent of unjust enrichment;
- evidence of fraud, violation of law, or reckless
disregard of a regulatory requirement; and/or
- the level of accurate, honest and timely cooperation from
the employee.

H. Confidential Treatment

. The Compliance Department or the designated Compliance Officer
will use their best efforts to assure that all requests for
pre-clearance, all personal securities transaction reports and
all reports for securities holding are treated as "Personal and
Confidential." However, such documents will be available for
inspection by appropriate regulatory agencies and other parties
within and outside SEI as are necessary to evaluate compliance
with or sanctions under this Code.

I. Definitions Applicable to the Code of Ethics

1. Account - a securities trading account held by an Employee and by any such
person's spouse, minor children and adults residing in his or her household
(each such person, an "immediate family member"); any trust for which the person
is a trustee or from which the

-10-
<PAGE>

Employee benefits directly or indirectly; any partnership (general, limited or
otherwise) of which the Employee is a general partner or a principal of the
general partner; and any other account over which the Employee exercises
investment discretion.

2. Beneficial Ownership - Security ownership in which a person has a direct or
indirect financial interest. Generally, an employee will be regarded as a
beneficial owner of Securities that are held in the name of:

a. a spouse or domestic partner;
b. a minor child;
c. a relative who resides in the employee's household; or
d. any other person IF: (a) the employee obtains from the
securities benefits substantially similar to those of ownership
(for example, income from securities that are held by a
spouse); or (b) the employee can obtain title to the securities
now or in the future.

3. Initial Public Offering - an offering of securities for which a
registration statement has not been previously filed with the U.S. SEC and for
which there is no active public market in the shares.

4. Purchase or sale of a Security - includes the writing of an option to
purchase or sell a security.

5. Security - includes notes, bonds, stocks (including closed-end funds),
convertibles, preferred stock, options on securities, futures on broad-based
market indices, warrants and rights. A "Security" does not include direct
----------------
obligations of the U.S. Government ; bankers' acceptances, bank certificates of
deposit, commercial paper and high quality short-term debt instruments,
including repurchase agreements; and, shares issued by open-end mutual funds.

III. INSIDER TRADING POLICY

All Employees are required to refrain from investing in Securities based on
material nonpublic inside information. This policy is based on the U.S. federal
securities laws that prohibit any person from:

1. trading on the basis of material, nonpublic information;
2. tipping such information to others;
3. recommending the purchase or sale of securities on the basis of such
information;
4. assisting someone who is engaged in any of the above activities; and
5. trading a security, which is the subject of an actual or impending tender
offer when in possession of material nonpublic information relating to the
offer.

-11-
<PAGE>

This includes any confidential information that may be obtained by Access,
Investment and Portfolio Persons regarding the advisability of purchasing or
selling specific securities for any Investment Vehicles or on behalf of clients.
Additionally, this policy includes any confidential information that may be
obtained about SEI Investments Company or any of its affiliated entities. This
Section outlines basic definitions and provides guidance to Employees with
respect to this Policy.

A. What is "Material" Information?
-------------------------------

Information is material when there is a substantial likelihood that a reasonable
investor would consider it important in making his or her investment decisions.
Generally, if disclosing certain information will have a substantial effect on
the price of a company's securities, or on the perceived value of the company or
of a controlling interest in the company, the information is material, but
information may be material even if it does not have any immediate direct effect
on price or value. There is no simple "bright line" test to determine when
information is material; assessments of materiality involve a highly fact-
specific inquiry. For this reason, any question as to whether information is
material should be directed to the Compliance Department.

B. What is "Nonpublic" Information?
--------------------------------

Information about a publicly traded security or issuer is "public" when it has
been disseminated broadly to investors in the marketplace. Tangible evidence of
such dissemination is the best indication that the information is public. For
example, information is public after it has become available to the general
public through a public filing with the SEC or some other governmental agency,
the Dow Jones "tape" or the Wall Street Journal or some other publication of
general circulation, and after sufficient time has passed so that the
information has been disseminated widely.

Information about securities that are not publicly traded, or about the issuers
of such securities, is not ordinarily disseminated broadly to the public.
However, for purposes of this Policy, such private information may be considered
"public" private information to the extent that the information has been
disclosed generally to the issuer's security holders and creditors. For
example, information contained in a private placement memorandum to potential
investors may be considered "public" private information with respect to the
class of persons who received the memorandum, but may still be considered
---------------------------
"nonpublic" information with respect to creditors who were not entitled to
- --------------------------------------------------------------------------
receive the memorandum. As another example, a controlling shareholder may have
- ----------------------
access to internal projections that are not disclosed to minority shareholders;
such information would be considered "nonpublic" information.

-12-
<PAGE>

C. Who Is an Insider?
------------------

Unlawful insider trading occurs when a person, who is considered an insider,
with a duty not to take advantage of material nonpublic information violates
that duty. Whether a duty exists is a complex legal question. This portion of
the Policy is intended to provide an overview only, and should not be read as an
exhaustive discussion of ways in which persons may become subject to insider
trading prohibitions.

Insiders of a company include its officers, directors (or partners), and
employees, and may also include a controlling shareholder or other controlling
person. A person who has access to information about the company because of
some special position of trust or has some other confidential relationship with
a company is considered a temporary insider of that company. Investment
advisers, lawyers, auditors, financial institutions, and certain consultants and
all of their officers, directors or partners, and employees are all likely to be
temporary insiders of their clients.

Officers, directors or partners, and employees of a controlling shareholder may
be temporary insiders of the controlled company, or may otherwise be subject to
a duty not to take advantage of inside information.

D. What is Misappropriation?
-------------------------

Misappropriation usually occurs when a person acquires inside information about
Company A in violation of a duty owed to Company B. For example, an employee of
Company B may know that Company B is negotiating a merger with Company A; the
employee has material nonpublic information about Company A and must not trade
in Company A's shares.

For another example, Employees who, because of their association with SEI,
receive inside information as to the identity of the companies being considered
for investment by SEI Investment Vehicles or by other clients, have a duty not
to take advantage of that information and must refrain from trading in the
securities of those companies.

E. What is Tipping?
----------------

Tipping is passing along inside information; the recipient of a tip (the
"tippee") becomes subject to a duty not to trade while in possession of that
information. A tip occurs when an insider or misappropriator (the "tipper")
discloses inside information to another person, who knows or should know that
the tipper was breaching a duty by disclosing the information and that the
tipper was providing the information for an improper purpose. Both tippees and
tippers are subject to liability for insider trading.

-13-
<PAGE>

F. Identifying Inside Information
------------------------------

Before executing any securities transaction for your personal account or for
others, you must consider and determine whether you have access to material,
nonpublic information. If you think that you might have access to material,
-----
nonpublic information, you must take the following steps:
----

1. Report the information and proposed trade immediately to the Compliance
Department or designated Compliance Officer;
2. Do not purchase or sell the securities on behalf of yourself or others; and
3. Do not communicate the information inside or outside SEI, other than to the
Compliance Department or designated Compliance Officer.

These prohibitions remain in effect until the information becomes public.

Employees managing the work of consultants and temporary employees who have
access to material nonpublic information are responsible for ensuring that
consultants and temporary employees are aware of this Policy and the
consequences of non-compliance.

G. Trading in SEI Investments Company Securities
---------------------------------------------

This Policy applies to all employees with respect to trading in the securities
-------------
of SEI Investments Company, including shares held directly or indirectly in the
Company's 401(k) plan. Employees, particularly "officers" (as defined in Rule
16(a)-1(f) in the Securities Exchange Act of 1934, as amended), of the company
should be aware of their fiduciary duties to SEI and should be sensitive to the
appearance of impropriety with respect to any of their personal transactions in
SEI's publicly traded securities. Thus, the following restrictions apply to all
transactions in SEI's publicly traded securities occurring in an employee's
Account and in all other accounts in which the employee benefits directly or
indirectly, or over which the employee exercises investment discretion.

. Blackout Period - Directors and Officers are prohibited from buying or
selling SEI's publicly traded securities during the blackout period. The
blackout periods are as follows:

. for the first, second and third quarterly financial reports - begins
at the close of the prior quarter and ends after SEI publicly
announces the financial results for that quarter.

. for the annual and fourth quarter financial reports - begins on the
6th business day of the first month following the end of the calendar
year-end and ends after SEI publicly announces its financial results.

All securities trading during this period may only be conducted with the
approval of SEI's General Counsel or the Compliance Director. In no event
may securities trading i n SEI's stock be conducted while an Director or
Officer of the company is in

-14-
<PAGE>

possession of material nonpublic information regarding SEI.

. Major Events - Employees who have knowledge of any SEI events or
developments that may have a "material" impact on SEI's stock that have not
been publicly announced are prohibited from buying or selling SEI's
publicly traded securities before such announcements. (See definition of
---
"material information" contained in III. A. above.)

. Short Selling and Derivatives Trading Prohibition - All employees are
prohibited from engaging in short sales and options trading of SEI's common
stock.

Section 16(a) directors and officers are subject to the following additional
trading restriction.

. Short Swing Profits - Directors and Officers may not profit from the
purchase and sale or sale and purchase of SEI's securities within 6 months
of acquiring or disposing of Beneficial Ownership of that Security.

H. Violations of the Insider Trading Policy
----------------------------------------

Unlawful trading of securities while in possession of material nonpublic
information, or improperly communicating that information to others, is a
violation of the federal securities laws and may expose violators to stringent
penalties. Criminal sanctions may include a fine of up to $1,000,000 and/or ten
years imprisonment. The SEC can recover the profits gained or losses avoided
through the violative trading, a penalty of up to three times the illicit
windfall or loss avoided, and an order permanently enjoining violators from such
activities. Violators may be sued by investors seeking to recover damages for
insider trading violations. In addition, violations by an employee of SEI may
expose SEI to liability. SEI views seriously any violation of this Policy, even
if the conduct does not, by itself, constitute a violation of the federal
securities laws. Violations of this Policy constitute grounds for disciplinary
sanctions, including dismissal.

-15-
<PAGE>

SEI INVESTMENTS COMPANY
CODE OF ETHICS AND INSIDER TRADING POLICY

EXHIBITS

Exhibit 1 Pre-clearance Request Form

Exhibit 2 Account Opening Letters to Brokers/Dealers

Exhibit 3 Initial Holdings Report

Exhibit 4 Quarterly Transaction Report

Exhibit 5 Annual Securities Holdings Report

Exhibit 6 Annual Compliance Certification

-16-
<PAGE>

EXHIBIT 1

-17-
<PAGE>

<TABLE>
<S> <C> <C>
- ----------------------------------------------------------------------------------------
PRECLEARANCE REQUEST FORM
- ----------------------------------------------------------------------------------------
Name: Date:

Ext #: Title/Position:

- ---------------------------------------------------------------------------------------
Transaction Detail: I request prior written approval to execute the following trade:
- ----------------------------------------------------------------------------------------

Buy: [_] Sell: [_] Security Name: Security type:

No. of Shares: Price: If sale, date acquired:

Held in an SEI Portfolio: Yes [_] No [_] If yes, provide: (a) the Portfolio's name:

(b) the date Portfolio bought or sold the security:

Initial Public Offering: Private Placement:
[_] Yes [_] No [_] Yes [_] No
- ----------------------------------------------------------------------------------------
Disclosure Statements
- ----------------------------------------------------------------------------------------
I hereby represent that, to the best of my knowledge, neither I nor the registered
account holder: (1) have knowledge of a possible or pending purchase or sale of the
above security in any of the portfolios for which SEI acts as an investment adviser,
distributor, administrator, or for which SEI oversees the performance of one or more
it sub-advisers; (2) is in possession of any material nonpublic information
concerning the security to which this request relates; and (3) is engaging in any
manipulative or deceptive trading activity.

I acknowledge that if the Compliance Officer to whom I submit this written request
determines that the above trade would contravene SEI Investments Company's Code of
Ethics and Insider Trading Policy ("the Policy"), the Compliance Officer in his or
her sole discretion has the right not to approve the trade, and I undertake to abide
by his or her decision.

I acknowledge that this authorization is valid for a period of three (3) business days.

- ----------------------------------------------------------------------------------------
Signature: Date:

- ----------------------------------------------------------------------------------------
Compliance Officer's Use Only
- ----------------------------------------------------------------------------------------
Approved: [_] Disapproved: [_] Date:

By: Comments:

Transaction Report Received: Yes [_] No [_]
- ----------------------------------------------------------------------------------------
</TABLE>

-18-
<PAGE>

Note: This preclearance will lapse at the end of the day on , 20 . If
you decide not to effect the trade, please notify the Compliance Department or
designated Compliance Officer immediately.

-19-
<PAGE>

EXHIBIT 2

-20-
<PAGE>

Date:

Your Broker
street address
city, state zip code

Re: Your Name
your S.S. number or account number

Dear Sir or Madam:

Please be advised that I am an employee of SEI Investments Distribution, Co., a
registered broker/dealer an/or SEI Investments Management Corporation, a
registered investment adviser. Please send duplicate statements only of this
brokerage account to the attention of:

SEI Investments Company
Attn: The Compliance Department
One Freedom Valley Drive
Oaks, PA 19456

This request is made pursuant to SEI's Code of Ethics and Insider Trading Policy
and Rule 3050 of the NASD's Code of Conduct.

Thank you for your cooperation.

Sincerely,

Your name

-21-
<PAGE>

Date:

[Address]

Re: Employee Name
Account #
SS#

Dear Sir or Madam:

Please be advised that the above referenced person is an employee of SEI
Investments Distribution, Co., a registered broker/dealer and/or SEI Investments
Management Corporation, a registered investment adviser. We grant permission
for him/her to open a brokerage account with your firm and request that you send
duplicate statements only of this employee's brokerage account to:

SEI Investments Company
Attn: The Compliance Department
One Freedom Valley Drive
Oaks, PA 19456

This request is made pursuant to SEI's Code of Ethics and Insider Trading Policy
and Rule 3050 of the NASD's Code of Conduct.

Thank you for your cooperation.

Sincerely,

Cynthia M. Parrish
Compliance Director

-22-
<PAGE>

EXHIBIT 3

<PAGE>

SEI INVESTMENTS MANAGEMENT CORPORATION
INITIAL HOLDINGS REPORT

Name:
----------------------------------------

Signature:
--------------------

Submission Date:

Number of Name of Broker, Dealer or
Title of Security Shares Held Principal Amount Bank Where Security
is Held
==============================================================================

==============================================================================

This report must be submitted within 10 days of becoming an Access, Investment
or Portfolio Person under SEI Investments Company's Code of Ethics. All
securities holdings must be reported on this form.

I confirm that the above list is an accurate and complete listing of all
securities in which I have a direct or indirect beneficial interest.

- --------------------
Signature

- --------------------
Date

- --------------------
Received by:
<PAGE>

EXHIBIT 4

-25-
<PAGE>

SEI INVESTMENTS MANAGEMENT CORPORATION
QUARTERLY TRANSACTION REPORT
Transaction Record of Securities Directly or Indirectly Beneficially Owned
, 2000 to , 2000
---------------- ------------
Name:
--------------------------------------------------------------------------

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

Signature:
---------------------------------------------------------------------

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

Submission
Date:
--------------------------------------------------------------------------

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

Number of Broker/
Shares and Dealer Issuer &
Principal Type of or Title of
Date Amount Transaction Bank Security Price
================================================================================

================================================================================

This report is required of all officers, directors and certain other persons
under Section 204 of the Investment Advisers Act of 1940 and Rule 17j-1 of the
Investment Company Act of 1940 and is subject to examination. Transactions in
direct obligations of the U.S. Government need not be reported. In addition,
persons need not report transactions in bankers' acceptances, certificates of
deposit, commercial paper or open-end investment companies. The report must be
returned within 10 days of the applicable calendar quarter end. The reporting
of transactions on this record shall not be construed as an admission that the
reporting person has any direct or indirect beneficial ownership in the security
listed.

By signing this document, I represent that all reported transactions were pre-
cleared through the Compliance Department or the designated Compliance Officer
in compliance with the SEI Investments Company Code of Ethics and Insider
Trading Policy.

-27-
<PAGE>

EXHIBIT 5

-28-
<PAGE>

SEI INVESTMENTS
ANNUAL SECURITIES HOLDINGS REPORT

As of December 31, 19
--

Employee Name:
--------------------

<TABLE>
<S> <C> <C> <C>
0 Security 1 Number of Type of Ownership (direct Account Number and
- ----------- ------------------- or indirect) Name of Brokerage Firm
Shares Where Securities are Held
------
- ---------------------------------------------------------------------------------------------------------

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

- ---------------------------------------------------------------------------------------------------------
</TABLE>

I confirm that the above list is an accurate and complete listing of all
securities in which I have a direct or indirect beneficial interest.

- ------------------------------ ------------------------------
Name Received by

- --------------------
Date

Note: Do not report holdings of U.S. Government securities, bankers'
------
acceptances, certificates of deposit, commercial paper and mutual funds.

-29-
<PAGE>

EXHIBIT 6
<PAGE>

SEI INVESTMENTS
CODE OF ETHICS
ANNUAL COMPLIANCE CERTIFICATION

TO: Compliance Department

FROM:

DATE:

1. I hereby acknowledge receipt of a copy of the Code of Ethics and Insider
Trading Policy.

2. I have read and understand the Code of Ethics and Insider Trading Policy
and recognize that I am subject thereto.

3. I hereby declare that I have complied with the terms of the Code of Ethics
and Insider Trading Policy.

Signature:
--------------------

Date:
----------

Received by:
------------------

-31-