MUNDER FUNDS INC, 485APOS, 1996-12-27

MUNDER FUNDS INC
485APOS, 1996-12-27

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As filed with the Securities and Exchange Commission
on December 27, 1996
Registration Nos. 33-54748
811-7348

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]

Pre-Effective Amendment No. ---- [ ]

Post-Effective Amendment No. 22 [X]
----

REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940 [X]

Amendment No. 24 [X]
----

(Check appropriate box or boxes)

The Munder Funds, Inc.
(Exact Name of Registrant as Specified in Charter)

480 Pierce Street, Birmingham, Michigan 48009
(Address of Principal Executive Offices) (Zip code)

Registrant's Telephone Number: (810) 647-9200

Paul F. Roye, Esq.
Dechert Price & Rhoads
1500 K Street, N.W., Suite 500
Washington, D.C. 20005
(Name and Address of Agent for Service)

Copies to:

Lisa Anne Rosen, Esq.
Munder Capital Management
480 Pierce Street
Birmingham, Michigan 48009

[X] It is proposed that this filing will become effective on March 12, 1997
pursuant to paragraph (a)(2) of Rule 485
The Registrant has elected to register an indefinite number of shares
under the Securities Act of 1933 pursuant to Rule 24f-2 under the Investment
Company Act of 1940. Registrant filed the notice required by Rule 24f-2 with
respect to its fiscal year ended June 30, 1996 on August 29, 1996.

<PAGE>

THE MUNDER FUNDS, INC.

CROSS-REFERENCE SHEET

Pursuant to Rule 495(a)

PART A
------

Prospectus for The Munder Asset Allocation Funds
(Class A and Class B Shares)

Item Heading
---- -------

1. Cover Page Cover Page

2. Synopsis Cover Page;
Prospectus
Summary; Expense
Table; The Funds

3. Condensed Financial Information Not Applicable

4. General Description of Registrant Cover Page;
Prospectus
Summary; The
Funds; Investment
Objectives and
Policies;
Investment
Limitations;
Description of
Shares

5. Management of the Fund Management;
Investment
Objectives and
Policies;
Investment
Limitations;
Dividends and
Distributions;
Performance

6. Capital Stock and Other Securities Management; How
to Purchase
Shares; How to
Redeem Shares;
Dividends and
Distributions;
Taxes;
Description of
Shares

<PAGE>

7. Purchase of Securities Being Offered How to Purchase
Shares; Net Asset
Value

8. Redemption or Repurchase How to Redeem
Shares

9. Pending Legal Proceedings Not Applicable

Prospectus for The Munder Asset Allocation Funds
(Class Y Shares)

Item Heading
---- -------

1. Cover Page Cover Page

2. Synopsis Cover Page;
Expense Table;
The Funds

3. Condensed Financial Information Not Applicable

4. General Description of Registrant Cover Page; The
Funds; Investment
Objectives and
Policies;
Investment
Limitations;
Description of
Shares

5. Management of the Fund Management;
Investment
Objectives and
Policies;
Investment
Limitations;
Dividends and
Distributions;
Performance

6. Capital Stock and Other Securities Management;
Purchases and
Redemptions of
Shares; Dividends
and
Distributions;
Taxes;
Description of
Shares

<PAGE>

7. Purchase of Securities Being Offered Purchases and
Redemptions of
Shares; Net Asset
Value

8. Redemption or Repurchase Purchases and
Redemptions of
Shares

9. Pending Legal Proceedings Not Applicable

PART B
------

10. Cover Page Cover Page

11. Table of Contents Table of Contents

12. General Information and History See Prospectus --
"Management;"
General;
Directors and
Officers;
Additional
Information
Concerning Shares

13. Investment Objectives and Policies Investment
Objectives and
Policies; Fund
Investments;
Investment
Limitations;
Portfolio
Transactions;
Appendix A;
Appendix B

14. Management of the Fund See Prospectus --
"Management;"
Directors and
Officers;
Investment
Advisory and
Other Service
Arrangements;
Miscellaneous

15. Control Persons and Principal See Prospectus --
Holders of Securities "Management;"
Directors and
Officers

<PAGE>

16. Investment Advisory and Other Investment
Services Advisory
Services and
Other Service
Arrangements; See
Prospectus --
"Management"

17. Brokerage Allocation and Other Portfolio
Practices Transactions

18. Capital Stock and Other Securities See Prospectus --
"Description of
Shares" and
"Management;"
Additional
Information
Concerning Shares

19. Purchase, Redemption and Pricing Purchase and
of Securities Being Offered Redemption
Information; Net
Asset Value;
Additional
Information
Concerning Shares

20. Tax Status Taxes

21. Underwriters Investment
Advisory and
Other Service
Arrangements

22. Calculation of Performance Data Performance
Information

23. Financial Statements Not Applicable

THE MUNDER FUNDS, INC.

The purpose of this Post-Effective Amendment filing is to add to the
Registration Statement prospectuses and a statement of additional information
regarding three new portfolios of the Registrant, designated the Munder All
Season Conservative Fund, the Munder All Season Moderate Fund, and the Munder
All
Season Aggressive Fund.

The prospectuses and statements of additional information of The Munder
Multi-Season Growth Fund, The Munder Money Market Fund, The Munder Real Estate
Equity Investment Fund, The Munder Mid-Cap Growth Fund, The Munder Value Fund,
The Munder International Bond Fund, The NetNet Fund, The Munder

<PAGE>

Small-Cap Value Fund, The Munder Micro-Cap Equity Fund, The

<PAGE>

Munder Equity Selection Fund and The Munder Short Term

<PAGE>

Treasury Fund are not included in this filing.

<PAGE>

THE MUNDER ASSET ALLOCATION FUNDS
480 Pierce Street
Birmingham, Michigan 48009
Telephone (800) 438-5789

PROSPECTUS

Class A and Class B Shares

The Munder All Season Conservative Fund (the "Conservative Fund"), the
Munder All Season Moderate Fund (the "Moderate Fund"), and the Munder All Season
Aggressive Fund (the "Aggressive Fund")(each a "Fund," collectively the "Funds")
are three series of shares issued by The Munder Funds, Inc. (the "Company"), an
open-end management investment company. This Prospectus relates only to the
Class A and Class B shares of the Funds. The Funds are referred to as The Asset
Allocation Funds. The Conservative Fund seeks to provide shareholders with
current income, with capital appreciation as a secondary objective. The Moderate
Fund seeks to provide shareholders with high total return through a combination
of capital appreciation and current income. The Aggressive Fund seeks to provide
shareholders with long-term capital appreciation. Each Fund seeks its investment
objective by investing in a variety of portfolios (the "Underlying Funds")
offered by the Company, The Munder Framlington Funds Trust, and The Munder Funds
Trust. There can be no assurance that a Fund's investment objective will be
achieved. The net asset value per share of the Funds will fluctuate in response
to changes in market conditions and other factors.

Munder Capital Management (the "Advisor") serves as investment advisor to
the Funds and to the Underlying Funds. Framlington Overseas Investment
Management Limited (the "Sub- Advisor") serves as sub-advisor to the Framlington
International Growth Fund, Framlington Emerging Markets Fund, and Framlington
Healthcare Fund (the "Framlington Funds"), three of the Underlying Funds.

This Prospectus sets forth concisely information that a prospective
investor should know before investing. Investors are encouraged to read this
Prospectus and retain it for future reference. A Statement of Additional
Information dated ______, 1997, as amended or supplemented from time to time,
has been filed with the Securities and Exchange Commission (the "SEC") and is
incorporated by reference into this Prospectus. It may be obtained free of
charge by calling the Funds at (800) 438-5789. In addition, the SEC maintains a
web site (http:\\www.sec.gov) that contains the Statement of Additional
Information and other information regarding the Funds.

<PAGE>

Shares of the Funds and The Underlying Funds are not deposits or
obligations of, or guaranteed or endorsed by, any bank, and are not insured or
guaranteed by the Federal Deposit Insurance Corporation, the Federal Reserve
Board, or any other agency. An investment in the Funds involves investment
risks,
including the possible loss of principal.

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

The date of this Prospectus is ____________, 1997

- 2 -

<PAGE>

TABLE OF CONTENTS

PAGE

PROSPECTUS SUMMARY................................................ 5

EXPENSE TABLE..................................................... 8

THE FUNDS......................................................... 12

INVESTMENT OBJECTIVES AND POLICIES................................ 12

INVESTMENT OBJECTIVES AND POLICIES--UNDERLYING FUNDS.............. 15

EQUITY FUNDS...................................................... 15

FIXED INCOME FUNDS................................................ 20

INVESTMENT TECHNIQUES AND RISK FACTORS--UNDERLYING FUNDS.......... 22

INVESTMENT LIMITATIONS............................................ 35

HOW TO PURCHASE SHARES............................................ 36

HOW TO REDEEM SHARES.............................................. 44

CONVERSION OF CLASS B SHARES...................................... 49

HOW TO EXCHANGE SHARES............................................ 49

DIVIDENDS AND DISTRIBUTIONS....................................... 51

NET ASSET VALUE................................................... 53

MANAGEMENT........................................................ 54

TAXES............................................................. 59

DESCRIPTION OF SHARES............................................. 60

PERFORMANCE....................................................... 61

SHAREHOLDER ACCOUNT INFORMATION................................... 63

<PAGE>

No person has been authorized to give any information, or to make any
representations not contained in this Prospectus, or in the Funds' Statement of
Additional Information incorporated herein by reference, in connection with the
offering made by this Prospectus, and, if given or made, such information or
representations must not be relied upon as having been authorized by the Funds
or Funds Distributor, Inc. (the "Distributor"). This Prospectus does not
constitute an offering by the Funds or by the Distributor in any jurisdiction in
which such offering may not lawfully be made.

<PAGE>

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information appearing in this Prospectus.

Investment Objectives

The Conservative Fund seeks to provide shareholders with current income,
with capital appreciation as a secondary objective. The Moderate Fund seeks to
provide shareholders with high total return through a combination of capital
appreciation and current income. The Aggressive Fund seeks to provide
shareholders with long-term capital appreciation.

Principal Investments

Each Fund seeks its investment objective by investing in a variety of
Underlying Funds offered by the Company, The Munder Framlington Funds Trust, and
The Munder Funds Trust. There can be no assurance that a Fund's investment
objective will be achieved.

Investment Risks and Special Considerations

The net asset value per share of the Funds will fluctuate in response to
changes in market conditions and other factors. Depending on these factors, the
net asset value of each Fund may decrease instead of increase. Certain of the
Underlying Funds may seek to achieve their investment objectives through
investments in securities of foreign issuers, including issuers in emerging
market countries (that involve risks not typically associated with U.S.
issuers), and certain options and futures strategies. Certain of the Underlying
Funds may invest in the securities of emerging growth companies, which may
involve greater price volatility and risk than those incurred by funds that do
not invest in such companies. See "Investment Techniques and Risk Factors --
Underlying Funds."

Purchase Plans

This Prospectus offers two classes, "Class A" and "Class B," respectively,
of shares to investors. Investors may select Class A shares or Class B shares,
each with different expense levels and with a public offering price that
reflects different sales charges. Purchases in excess of $250,000 must be for
Class A shares. Each Fund also offers one additional class of shares, Class Y
shares. These classes of the Funds may have different sales charges and expense
levels, which may affect performance. Investors may call the Funds at (800)
438-5789 for more information concerning Class Y shares.

<PAGE>

Class A Shares

Offered at net asset value plus a maximum initial sales
charge of 5.50%. Class A shares of each Fund pay a
shareholder servicing fee at the annual rate of .25% of the
value of average daily net assets. See "How to Purchase
Shares."

Class B Shares

Offered at net asset value per share subject to a contingent deferred
sales charge ("CDSC") imposed on certain redemptions made within six years of
the date of purchase at the maximum rate of 5.00% of the lesser of the shares'
net asset value or original purchase price. Class B shares of each Fund are
subject to shareholder servicing and distribution fees at the annual rate of
1.00% of the value of average daily net assets. Class B shares will convert
automatically to Class A shares, based on relative net asset value, at the end
of six years after the date of original purchase. See "How to Purchase Shares."

Purchasing Shares

Class A shares and Class B shares of the Fund are offered
continuously and may be purchased from the Distributor through
certain broker-dealers and other financial institutions or
through First Data Investor Services Group, Inc. (the
"Transfer Agent"). Shares are subject to the applicable sales
charge or CDSC. See "How to Purchase Shares."

Minimum Investment

$1,000 minimum investment ($50 through Automatic
Investment Plan). $50 minimum for subsequent purchases.

Exchange Privileges

Shares may be exchanged for shares of the same class of
other funds of the Company, The Munder Framlington Funds
Trust, and The Munder Funds Trust, subject to any applicable
sales charges. See "How to Exchange Shares."

Reinvestment

Automatic reinvestment of dividends and capital gains without a sales
charge or CDSC, unless a shareholder elects to receive cash.

<PAGE>

Other Features

Class A Shares Class B Shares

Automatic Investment Plan Automatic Investment Plan
Automatic Withdrawal Plan Automatic Withdrawal Plan
Retirement Plans Retirement Plans
Telephone Exchanges Telephone Exchanges
Rights of Accumulation Reinvestment Privilege
Letter of Intent
Quantity Discounts
Reinvestment Privilege

Dividends and Other Distributions

Dividends from net investment income are declared and paid at least
annually for each of the Funds; capital gains are distributed at least annually.

Net Asset Value

Determined once daily on each Business Day (as defined below).

Redeeming Shares

Class A shares of the Funds may be redeemed at net asset
value per share by mail or telephone. Certain redemptions of
Class A shares may be subject to a CDSC. Class B shares are
redeemable at net asset value less any applicable CDSC by mail
or telephone. See "How to Redeem Shares."

Investment Advisor

As investment advisor for the Funds, Munder Capital Management provides
overall investment management for each Fund, provides research and credit
analysis, oversees the purchases and sales of portfolio securities, maintains
records relating to such purchases and sales, and provides reports to the
Company's Board of Directors. Munder Capital Management also serves as
investment advisor for the Underlying Funds, and Framlington Overseas Investment
Management Limited serves as sub-adviser for the Munder Framlington Funds Trust.
See "Management."

Distributor

Funds Distributor, Inc.

<PAGE>

EXPENSE TABLE

The following table sets forth certain costs and expenses that an investor
is expected to incur as a shareholder of Class A or Class B shares of each of
the Funds based on estimated operating expenses for the current fiscal year. The
table does not include the costs and expenses of the Underlying Funds, which an
investor will also incur indirectly as a shareholder of Class A or Class B
shares of the Funds.
<TABLE>
<S> <C> <C> <C>

Class A Shares
-----------------------------------------
Conservative Moderate Aggressive
Fund Fund Fund
-----------------------------------------

Shareholder transaction expenses:
Maximum sales load on purchases *.. 5.50% 5.50% 5.50%
Maximum sales load on reinvested dividendNone None None
Maximum contingent deferred sales charge None None None
Redemption fees.................... None None None
Exchange fees...................... None None None

Annual Fund operating fees:
(as a percentage of average net assets)
Advisory fees...................... .35% .35% .35%
12b-1 fees......................... .30% .30% .30%
Other expenses (after expense limitation).20% .20% .20%
Total fund operating expenses (after expense
limitation)................... .85% .85% .85%

- ------------------
*Maximum sales load applicable to Class A shares. Reductions and waivers of
sales loads are described under "How to Purchase Shares." **A deferred sales
charge of 1.00% is assessed on certain redemptions of Class A shares of the
Funds that are purchased with no initial sales charge as part of an investment
of $1,000,000 or more.

Class B Shares
-----------------------------------------
Conservative Moderate Aggressive
Fund Fund Fund
-----------------------------------------

Shareholder transaction expenses:
Maximum sales load on purchases ... None None None
Maximum sales load on reinvested dividendNone None None
Maximum contingent deferred sales charge5.00% 5.00% 5.00%
Redemption fees.................... None None None
Exchange fees...................... None None None

Annual Fund operating fees:
(as a percentage of average net assets)
Advisory fees...................... .35% .35% .35%
12b-1 fees......................... 1.00% 1.00% 1.00%
Other expenses (after expense limitation).20% .20% .20%
Total fund operating expenses (after expense
limitation.................... 1.55% 1.55% 1.55%

- ------------------
*Maximum CDSC applicable to Class B shares. See "How to Redeem Shares--Contingent Deferred Sales Charge-
- -Class B Shares." Waivers of CDSC are described under "How to Redeem Shares."

</TABLE>

<PAGE>

Because of the Rule 12b-1 fees paid by Class B shares of the Funds as
shown in the above table, long-term shareholders may pay more than the economic
equivalent of the maximum front-end sales charge permitted by the National
Association of Securities Dealers, Inc.

The initial sales charge applicable to Class A shares set forth in the
above table is the maximum charge imposed upon the purchase of Class A shares.
Reductions and waivers from sales loads are described under "How to Purchase
Shares." The CDSC applicable to Class B shares set forth in the above table is
the maximum sales load applicable imposed upon redemption of Class B shares.
Waivers of the CDSC are described under "How to Redeem Shares."

"Other expenses" in the above tables include administrative fees,
custodial fees, legal and accounting fees, printing costs, registration fees,
the cost of regulatory compliance, the costs of maintaining each Fund's legal
existence and the costs involved in communicating with shareholders. The Advisor
has voluntarily agreed to limit each Fund's "other expenses" to .20% of its
average daily net assets until October __, 1997. If this temporary expense
limitation were not in place, each Fund's "other expenses" and "total fund
operating expenses" would be __% and __%, respectively, for Class A shares, and
__% and __%, respectively, for Class B shares, based on estimated expenses and
projected assets for the current fiscal year. See "MANAGEMENT" in this
Prospectus for a further description of the Funds' operating expenses and the
nature of the services for which the Funds are obligated to pay advisory fees.
Any fees charged by institutions directly to customer accounts for services
provided in connection with investments in shares of the Funds are in addition
to the expenses shown in the above Expense Tables and the Examples shown below.

In addition to the expenses shown above, shareholders of the Funds will
indirectly bear their pro rata share of fees and expenses incurred by the
Underlying Funds, so that the investment returns of the Funds will be net of the
expenses of the Underlying Funds. The table below sets forth total fund
operating expenses expressed as a percentage of net assets, after any applicable
expense reimbursements, for the Class Y shares of each of the Underlying Funds
for their current fiscal year. The International Bond Fund did not commence
operations until October 2, 1996, and the NetNet Fund did not commence
operations until August 19, 1996. As of the date of this prospectus, the Equity
Selection Fund, Micro-Cap Equity Fund and Small-Cap Value Fund had not commenced
operations, and as of the date of this prospectus, the Framlington Funds had not
commenced operations; therefore, the Expense Ratio set forth below is based on
estimated operating expenses for each

<PAGE>

such fund. The Expense Ratio has been restated with respect to the Multi-Season
Growth Fund, Mid-Cap Growth Fund, Real Estate Equity Investment Fund and Value
Fund to reflect anticipated fees, waivers and/or expense reimbursements. The
Funds purchase only Class Y shares of the Underlying Funds. Class Y shares are
sold without an initial or contingent deferred sales charge to the Funds, as
well as to fiduciary and discretionary accounts of institutions, institutional
investors, directors, trustees, officers and employees of the Company, The
Munder Funds Trust, The Munder Framlington Funds Trust, the Advisor, the
Distributor and the Advisor's investment advisory clients and family members of
the Advisor's employees.
<TABLE>
<S> <C>

Class A Shares

Multi-Season Growth Fund........................ 1.01%*

Mid-Cap Growth Fund............................. .95%+

Small Company Growth Fund ...................... .96%

Accelerating Growth Fund ....................... .95%

Value Fund...................................... .95%+

Small-Cap Value Fund............................ 1.00%

Micro-Cap Equity Fund........................... 1.25%

Equity Selection Fund........................... 1.00%

Growth & Income Fund............................ .96%

Real Estate Equity Investment Fund.............. 1.00%+

NetNet Fund..................................... 1.50%

International Equity Fund....................... 1.01%

Framlington International Growth Fund........... 1.30%

Framlington Emerging Markets Fund............... 1.55%

Framlington Healthcare Fund..................... 1.30%

Intermediate Bond Fund.......................... .69%

Bond Fund....................................... .70%

U.S. Government Income Fund..................... .72%

International Bond Fund......................... .85%

Cash Investment Fund ........................... .53%

Money Market Fund............................... .62%

U.S. Treasury Money Market Fund................. .54%

<PAGE>

* Reflects advisory fees after waiver. Without waiver, the Expense Ratio for The Multi-Season
Growth Fund would be 1.26%.

+ The Advisor voluntarily reimbursed the Fund for certain operating expenses. In the absence
of such expense reimbursement, the Expense Ratio would have been as follows: 1.13% for
Mid-Cap Growth Fund, 1.05% for Value Fund, and 1.27% for Real Estate Equity Investment
Fund,
</TABLE>
Based on the expenses for the Funds and the Underlying Funds shown above,
and assuming the neutral asset allocation for each Fund set forth on page 14
below, the average weighted expense ratio for each Fund, expressed as a
percentage of each Fund's average daily net assets, is estimated to be as
follows:
<TABLE>
<S> <C> <C>

Expense Ratio

Class A Shares Class B Shares

Conservative Fund............... 1.66% 2.36%

Moderate Fund................... 1.80% 2.50%

Aggressive Fund................. 1.91% 2.61%

</TABLE>
Example

The following examples demonstrate the projected dollar amount of total
cumulative expenses that would be incurred over various periods with respect to
a hypothetical investment in the Funds. These amounts are based on payment by
the Funds of operating expenses at the levels set forth in the above table, and
are also based on the following assumptions:

On the basis of these estimated expense levels, an investor would pay the
following expenses on a $1,000 investment in Class A shares (subject to the
applicable sales load), assuming (1) a hypothetical 5% annual return, and (2)
redemption at the end of the following time periods:
<TABLE>
<S> <C> <C>
Class A Shares

1 Year 3 Years
------

Conservative Fund $71 $105

Moderate Fund $72 $109

Aggressive Fund $73 $112

</TABLE>
An investor would pay the following expenses on a $1,000 investment in
Class B shares (subject to the applicable CDSC),

<PAGE>

assuming (1) a hypothetical 5% annual return and (2) redemption at the end of
the following time periods and (3) no redemption at the end of the following
periods:
<TABLE>
<S> <C> <C> <C> <C>
Class B Shares
1 Year 3 Years
------ -------
Redemption No Redemption Redemption No Redemption
Conservative Fund $74 $24 $104 $74
Moderate Fund $75 $25 $108 $78
Aggressive Fund $76 $26 $111 $81

</TABLE>
The foregoing Expense Tables and Examples are intended to assist investors
in understanding the various shareholder transaction expenses and operating
expenses of the Funds that investors bear both directly and indirectly.

THE EXAMPLES SHOWN ABOVE SHOULD NOT BE CONSIDERED A
REPRESENTATION OF FUTURE INVESTMENT RETURN OR OPERATING
EXPENSES. ACTUAL INVESTMENT RETURN AND OPERATING EXPENSES MAY
BE MORE OR LESS THAN THOSE SHOWN.

THE FUNDS

The Conservative Fund, the Moderate Fund and the Aggressive Fund are three
series of shares issued by the Company, an open-end management investment
company. The Company was organized under the laws of the State of Maryland on
November 18, 1992 and has registered under the Investment Company Act of 1940,
as amended (the "1940 Act"). The Company's principal office is located at 480
Pierce Street, Birmingham, Michigan 48009 and its telephone number is (800)
438-5789.

INVESTMENT OBJECTIVES AND POLICIES

The Conservative Fund's investment objective is to provide shareholders
with current income, with capital appreciation as a secondary objective. The
Fund seeks to achieve its objective by concentrating its investments in
Underlying Funds that invest primarily in fixed income securities. The
Conservative Fund may also invest a portion of its assets in Underlying Funds
that invest primarily in equity securities and may hold assets in cash or money
market securities. The Conservative Fund is designed for investors seeking
income with the potential for capital appreciation.

The Moderate Fund's investment objective is to provide shareholders with
high total return through a combination of capital appreciation and current
income. The Fund seeks to

<PAGE>

achieve its objective by diversifying its investments in Underlying Funds that
invest primarily in equity securities and fixed income securities. The Fund may
also hold assets in cash or money market securities. This Fund offers investors
greater potential for capital appreciation than does the Conservative Fund by
virtue of its larger investments in Underlying Funds that invest primarily in
equity securities, while also offering investors the potential for investment
income. The Moderate Fund is designed for investors who seek capital
appreciation in addition to income, and who are willing to bear the risk of loss
and share price fluctuation inherent in equity securities.

The Aggressive Fund's investment objective is to provide shareholders with
long-term capital appreciation. The Fund seeks to achieve its objective by
concentrating its investments in Underlying Funds that invest primarily in
equity securities. The Fund may also invest a portion of its assets in
Underlying Funds that invest in fixed income securities and may hold assets in
cash or money market securities. The Aggressive Fund is designed for investors
who seek long-term capital appreciation, with the potential for greater gains
but with greater risk of loss and share price fluctuation.

The Funds will invest their assets in the following
Underlying Funds, within the ranges (expressed as a percentage
of each Fund's assets) indicated below:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Conservative Fund Moderate Fund Aggressive Fund

Minimum Maximum Minimum Maximum Minimum Maximum

Equity Funds

Multi-Season Growth Fund 0% 20% 0% 30% 0% 40%

Mid-Cap Growth Fund 0% 5% 0% 10% 0% 15%

Small Company Growth Fund 0% 10% 0% 20% 0% 30%

Accelerating Growth Fund 0% 5% 0% 10% 0% 15%

Value Fund 0% 20% 0% 30% 0% 40%

Small-Cap Value Fund 0% 10% 0% 20% 0% 30%

Micro-Cap Equity Fund 0% 5% 0% 5% 0% 5%

Equity Selection Fund 0% 10% 0% 20% 0% 30%

Growth & Income Fund 0% 10% 0% 15% 0% 20%

Real Estate Equity Investment 0% 10% 0% 20% 0% 25%
Fund

<PAGE>

NetNet Fund 0% 5% 0% 5% 0% 5%

International Equity Fund 0% 5% 0% 10% 0% 15%

Framlington International 0% 5% 0% 10% 0% 15%
Growth Fund

Framlington Emerging Markets 0% 5% 0% 10% 0% 15%
Fund

Framlington Healthcare Fund 0% 5% 0% 5% 0% 10%

Fixed Income Funds

Intermediate Bond Fund 0% 80% 0% 50% 0% 30%

Bond Fund 0% 80% 0% 50% 0% 30%

U.S. Government Income Fund 0% 60% 0% 40% 0% 20%

International Bond Fund 0% 30% 0% 20% 0% 10%

Money Market Funds

Cash Investment Fund 0% 10% 0% 10% 0% 10%

Money Market Fund 0% 10% 0% 10% 0% 10%

U.S. Treasury Money Market 0% 10% 0% 10% 0% 10%
Fund

</TABLE>
For the purpose of determining each Fund's compliance with these
percentage limitations, the Company will determine the value of a Fund's assets
at the time of investment.

While the Advisor intends to invest each Fund's assets in the Underlying
Funds within the ranges set forth above, and to periodically adjust the
allocations in response to economic and market conditions, each Fund has a
"neutral mix" representing the intended typical allocations of the Fund's assets
over time.

Each Fund's neutral asset allocation is expected to be as follows:
<TABLE>
<S> <C> <C> <C>

Conservative Fund Moderate Fund Aggressive Fund

Equity Funds 25% 60% 85%

Fixed Income Funds 70% 35% 15%

Money Market Funds 5% 5% 0%
and Cash

</TABLE>

<PAGE>

Each Fund's investments are concentrated in the Underlying Funds, and the
investment performance of each Fund is directly related to the performance of
the Underlying Funds in which it invests. The Funds will invest in the Class Y
shares of the Underlying Funds, which are sold at net asset value per share with
no initial or contingent deferred sales charge. See "INVESTMENT OBJECTIVES AND
POLICIES--UNDERLYING FUNDS" for a description of the Underlying Funds.

In addition to shares of the Underlying Funds, each Fund may invest cash
balances in repurchase agreements and other money market investments to maintain
liquidity in an amount to meet expenses or for day-to-day operating purposes.
These investments are described below under "INVESTMENT TECHNIQUES AND RISK
FACTORS--UNDERLYING FUNDS - Repurchase Agreements and - Liquidity Management."

When the Advisor believes that market conditions warrant, a Fund may adopt
a temporary defensive position and may invest without limit in money market
securities denominated in U.S. dollars or in the currency of any foreign
country.

INVESTMENT OBJECTIVES AND POLICIES--UNDERLYING FUNDS

The following is a brief description of the investment objectives and
policies of the Underlying Funds. The investment objectives and policies of the
Underlying Funds are discussed further in "INVESTMENT TECHNIQUES AND RISK
FACTORS-- UNDERLYING FUNDS" and the Statement of Additional Information.

EQUITY FUNDS

Accelerating Growth Fund

The investment objective of the Accelerating Growth Fund is to provide
long-term capital appreciation, with income a secondary consideration. The fund
seeks to achieve its objective by investing primarily in equity securities and
instruments convertible or exchangeable into equity securities. The fund's
investment portfolio will consist primarily of the stocks of companies
determined by the Advisor to demonstrate accelerating earnings growth and which
are expected to continue expanding earnings at an accelerated pace, maintain a
substantial competitive advantage, have a focused management team and have a
stable balance sheet.

Equity Selection Fund

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be of high quality and that, as determined through both fundamental and
technical analysis, are undervalued compared to equity securities of other
companies in the same industry. The fund generally will invest in issuers that
have market capitalizations of at least $3 billion at the time of purchase. The
fund will be diversified by industry with proportionate weightings approximately
the same as those of the Standard & Poor's 500 Composite Stock Price Index (the
"S&P 500").

Growth & Income Fund

The investment objective of the Growth & Income Fund is to provide capital
appreciation and current income by investing primarily in dividend-paying equity
securities. The fund will invest in a diversified portfolio of dividend-paying
stocks of companies whose prospects for dividend growth and capital appreciation
are considered favorable by the Advisor. In general, the Advisor selects large,
well-known companies that it believes have above-average and secure dividends.
The fund will seek to produce a current yield greater than the S&P 500.

International Equity Fund

Micro-Cap Equity Fund

The investment objective of the Micro-Cap Equity Fund is long-term capital
appreciation. The fund seeks to achieve its objective by investing, under normal
market conditions, at least 65% of its total assets in equity securities of
micro- cap companies that generally have a market capitalization of $200 million
or less at the time of purchase. Such issuers have market capitalizations that
are less than the capitalization of companies which predominate the major market
indices, such as the S&P 500. The Advisor will generally favor companies that it
believes offer attractive opportunities due to the inefficiencies of the
micro-cap market and that the Advisor believes, through internal research, will
have the ability to grow significantly over the next several years.

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Mid-Cap Growth Fund

Multi-Season Growth Fund

The investment objective of the Multi-Season Growth Fund is to provide
shareholders with long-term capital appreciation. The fund seeks to achieve this
objective by investing primarily in a diversified portfolio of equity securities
of companies that have demonstrated superior long-term earnings growth,
financial stability, attractive valuation and relative price momentum. The fund
may invest up to 20% of the value of its total assets in equity securities of
foreign issuers, including companies domiciled in developing countries.

Real Estate Equity Investment Fund

The Real Estate Equity Investment Fund's investment objectives are to
provide shareholders with capital appreciation and current income. It seeks to
achieve these objectives by investing primarily in securities of United States
companies which are principally engaged in the real estate industry or which own
significant real estate assets. A company is "principally engaged" in the real
estate industry if at least 50% of its assets, gross income or net profits are
attributable to ownership, construction, management or sale of residential,
commercial or industrial real estate. Real estate industry companies may include
among others: equity real estate investment trusts, which pool investors' funds
for investment primarily in commercial real estate properties; mortgage real
estate investment trusts, which invest pooled funds in real estate related
loans; brokers, home builders or real estate developers; and companies with
substantial real estate holdings, such as paper and lumber producers and hotel
and entertainment companies. The fund may also invest up to 35% of its total
assets in equity securities of issuers whose products and services are related
to the real estate industry, such as manufacturers and distributors of building
supplies and financial institutions which issue or service mortgages. The fund
will not invest directly in real estate.

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Small-Cap Value Fund

The investment objective of the Small-Cap Value Fund is long-term capital
appreciation, with income as a secondary objective. The fund seeks to achieve
its objective by investing primarily in equity securities of small-cap companies
that generally have a market capitalization below $750 million at the time of
purchase. The Advisor will generally favor companies that it believes to be
undervalued at the time of purchase. Since small capitalization companies are
generally not as well known to investors and have less of an investor following
than larger companies, they may provide opportunities for greater investment
gains as a result of inefficiencies in the marketplace.

Small Company Growth Fund

The investment objective of the Small Company Growth Fund is to provide
long-term capital appreciation. The fund pursues its objective by investing
primarily in equity securities such as common stocks and instruments convertible
or exchangeable into common stocks.

Securities held by the fund will generally be issued by smaller companies.
Smaller companies will be considered those companies with market capitalizations
that are less than the capitalization of companies which predominate the major
market indices, such as the S&P 500. The market capitalization of the issuers of
securities purchased by the fund will be below $750 million at the time of
purchase. In managing the fund, the Advisor seeks smaller companies with
above-average growth prospects. Factors considered in selecting such issuers
include participation in a fast growing industry, a strategic niche position in
a specialized market, adequate capitalization and fundamental value.

Value Fund

The investment objective of the Value Fund is to provide long-term capital
appreciation, with income a secondary objective. The fund seeks to achieve its
objectives by investing primarily in equity securities of well established
companies with intermediate to large market capitalizations or capitalizations
which exceed $750 million. The Advisor will generally favor companies that it
believes to be undervalued at the time of purchase. Companies will also exhibit
a stable or improving earnings record and sound finances at the time of
purchase.

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Framlington International Growth Fund

The investment objective of the Framlington International Growth Fund is
to provide shareholders with long-term capital appreciation. The fund seeks to
achieve its objective through worldwide investment in equity securities of
companies which, in the opinion of the Sub-Advisor, show above-average
profitability, management quality and growth. Under normal market conditions, at
least 65% of the fund's total assets will be invested in the equity securities
of foreign issuers and such issuers will be located in at least three foreign
countries.

Framlington Emerging Markets Fund

The investment objective of the Framlington Emerging Markets Fund is to
provide shareholders with long-term capital appreciation. The fund seeks to
achieve this objective through investing primarily in equity securities of
issuers in emerging market countries. The fund considers countries having
emerging markets to be all countries that are generally considered to be
emerging or developing countries by the International Bank for Reconstruction
and Development (more commonly referred to as the World Bank) or the
International Finance Corporation, as well as countries that are classified by
the United Nations or otherwise regarded by their authorities as emerging.

Framlington Healthcare Fund

The investment objective of the Framlington Healthcare Fund is to provide
shareholders with long-term capital appreciation. The fund seeks to achieve this
objective through investment in companies providing healthcare and medical
services and products worldwide. The fund will invest in producers of
pharmaceuticals, biotechnology firms, medical device and instrument
manufacturers, distributors of healthcare products, care providers and managers
and other healthcare services companies. Under normal market conditions, the
fund will invest at least 65% of its total assets in healthcare companies as
described above. The Sub- Advisor considers healthcare companies to include
companies in which at least 50% of sales, earnings or assets arise from or are
dedicated to health services or medical technology activities.

NetNet Fund

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The fund will invest primarily in equity securities of companies listed on U.S.
securities exchanges or NASDAQ which are engaged in the research, design,
development, manufacturing or engaged to a significant extent in the business of
distributing products, processes or services for use with Internet and Intranet
related businesses. The Internet is a world-wide network of computers designed
to permit users to share information and transfer data quickly and easily. The
World Wide Web ("WWW") which is a means of graphically interfacing with the
Internet, is a hyper-text based publishing medium containing text, graphics,
interactive feedback mechanisms and links within WWW documents and to other WWW
documents. An Intranet is the application of WWW tools and concepts to a
company's internal documents and databases. Internet and Intranet related
businesses include companies engaged in the research, design, development,
manufacturing or distribution of servers, routers, search engines, bridges and
switches, browsers, network applications, agent software, modems, carriers,
firewall and security, e- mail, electronic commerce, video and publishing for
use on the Internet/Intranet.

FIXED INCOME FUNDS

Bond Fund, Intermediate Bond Fund and U.S. Government Income
Fund
The investment objective of the Bond Fund is to provide a high level of
current income, and secondarily, capital appreciation. The Bond Fund's
dollar-weighted average maturity will generally be between six and fifteen years
except during temporary defensive periods, and will be adjusted by the Advisor
according to market conditions. The investment objective of the Intermediate
Bond Fund is to provide a competitive rate of return which over time exceeds the
rate of inflation and the return provided by money market instruments. The
Intermediate Bond Fund's dollar-weighted average maturity will generally be
between three and eight years and will be adjusted by the Advisor according to
market conditions. The investment objective of the U.S. Government Income Fund
is to provide high current income. Under normal market conditions, the U.S.
Government Income Fund's dollar-weighted average maturity will be six to fifteen
years, and will be adjusted by the Advisor according to market conditions.

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subdivisions, asset-backed securities and various mortgage-related securities.
These funds may purchase obligations issued by or on behalf of states,
territories and possessions of the United States, the District of Columbia and
their political subdivisions, agencies, instrumentalities and authorities.

International Bond Fund

The investment objective of the International Bond Fund is to realize a
competitive total return through a combination of current income and capital
appreciation. The fund seeks to achieve its objective by investing primarily in
foreign debt obligations. Under normal market conditions, at least 65% of the
fund's assets are invested in bonds of issuers located in at least three
countries other than the United States. The fund will primarily invest in
foreign debt obligations denominated in foreign currencies, including the
European Currency Unit ("ECU"), which are issued by foreign governments and
governmental agencies, instrumentalities or political subdivisions; debt
securities issued or guaranteed by supranational organizations (e.g., European
Investment Bank, Inter-American Development Bank or the World Bank); corporate
debt securities; bank or bank holding company debt securities and other debt
securities including those convertible into foreign stock. The fund's
dollar-weighted average maturity will generally be between three and fifteen
years except during temporary defensive periods, and will be adjusted by the
Advisor according to market conditions.

MONEY MARKET FUNDS

Cash Investment Fund, Money Market Fund and U.S. Treasury
Money Market Fund

The investment objective of both the Cash Investment Fund and U.S.
Treasury Money Market Fund is to provide as high a level of current interest
income as is consistent with maintaining liquidity and stability of principal.
The investment objective of the Money Market Fund is to provide current income
consistent with the preservation of capital and liquidity. Each fund seeks to
maintain a stable net asset value of $1.00 per share, although there is no
assurance that they will be able to do so on a continuous basis. In pursuing
their respective investment objectives, the Cash Investment Fund and Money
Market Fund may invest in a broad range of short-term, high quality, U.S.
dollar-denominated instruments, such as bank, commercial and other obligations
(including Federal, state and local government obligations), that are available
in the money markets. The securities in which the Cash Investment Fund and Money
Market Fund may invest are described under "INVESTMENT TECHNIQUES AND RISK
FACTORS --

<PAGE>

UNDERLYING FUNDS" in the Prospectus and "FUND INVESTMENTS" in the Statement of
Additional Information. The U.S. Treasury Money Market Fund seeks to achieve its
objective by investing solely in short-terms bonds, bills and notes issued by
the U.S. Treasury (including "stripped" securities as described under
"INVESTMENT TECHNIQUES AND RISK FACTORS -- UNDERLYING FUNDS"), and in repurchase
agreements relating to such obligations.

INVESTMENT TECHNIQUES AND RISK FACTORS--UNDERLYING FUNDS

Each Fund's share price will fluctuate in response to changes in the share
price of one or more of the Underlying Funds, which are permitted to engage in a
wide range of investment techniques. Like any investment program, an investment
in the Funds, and correspondingly an investment in the Underlying Funds, entails
certain risks.

Investment techniques that are available to the Underlying Funds are set
forth below. The investment techniques described below under "U.S. Government
Obligations," "Repurchase Agreements," "Investment Company Securities" and
"Liquidity Management" may also be used directly by the Funds. Additional
information concerning certain of these techniques and their related risks is
contained in the Statement of Additional Information.

Equity Securities. Each Underlying Fund that has capital appreciation as
its primary objective ("Equity Fund") will invest in common stocks, and may
invest in warrants and similar rights to purchase common stock. An Equity Fund
may invest up to 5% of its net assets at the time of purchase in warrants and
similar rights to purchase common stock (other than those that have been
acquired in units or attached to other securities).

The Micro-Cap Equity Fund, Small-Cap Value Fund and the Small Company
Growth Fund each invest primarily in equity securities of smaller companies with
market capitalizations that are less than the capitalization of companies which
predominate the major market indices. Small capitalization companies typically
are subject to a greater degree of change in earnings and business prospects
than larger, more established companies. In addition, securities of small
capitalization companies are traded in lower volume than those issued by larger
companies and may be more volatile. As a result, these funds may be subject to
greater price volatility than a fund consisting of larger capitalization stocks.

In addition, each Equity Fund may invest in convertible bonds and
convertible preferred stock. A convertible security is a security that may be
converted either at a stated price

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or rate within a specified period of time into shares of common stock. By
investing in convertible securities, a fund seeks the opportunity, through the
conversion feature, to participate in the capital appreciation of the common
stock into which the securities are convertible, while earning higher current
income than is available from the common stock. An Equity Fund may acquire
convertible securities that are rated below investment grade by Standard &
Poor's Ratings Service, a division of McGraw Hill Companies Inc. ("S&P") or
Moody's Investors Service, Inc. ("Moody's").

The Growth & Income Fund may invest up to 20% of the value of its total
assets in convertible securities that are rated below investment grade by S&P or
Moody's. These high yield, high risk securities are commonly referred to as junk
bonds. To the extent a fund purchases convertibles rated below investment grade
or convertibles that are not rated, a greater risk exists as to the timely
repayment of the principal of, and the timely payment of interest or dividends
on, such securities. Particular risks include (a) the sensitivity of such
securities to interest rate and economic changes, (b) the lower degree of
protection of principal and interest payments, (c) the relatively low trading
market liquidity for the securities, (d) the impact that legislation may have on
the market for these securities (and, in turn, on a fund's net asset value) and
(e) the creditworthiness of the issuers of such securities. During an economic
downturn or substantial period of rising interest rates, highly leveraged
issuers may experience financial stress which would negatively affect their
ability to meet their principal and interest payment obligations, to meet
projected business goals and to obtain additional financing. An economic
downturn could also disrupt the market for lower-rated convertible securities
and negatively affect the value of outstanding securities and the ability of the
issuers to repay principal and interest. If the issuer of a convertible security
held by a fund defaulted, the fund could incur additional expenses to seek
recovery. Adverse publicity and investor perceptions, whether or not they are
based on fundamental analysis, could also decrease the values and liquidity of
lower-rated convertible securities held by a fund, especially in a thinly traded
market.

<PAGE>

foreign issuers than U.S. issuers; generally higher markups on foreign portfolio
transactions; the possibility of nationalization, expropriation or confiscatory
taxation; adverse changes in investment or exchange control regulations (which
may include suspension of the ability to transfer currency from a country);
political instability; less government regulation of securities markets, brokers
and issuers; possible difficulty in obtaining and enforcing judgments in foreign
courts; and imposition of restrictions on foreign investments. Additionally,
foreign securities and interest payable on those securities may be subject to
foreign taxes, including taxes withheld from payments on those securities.
Foreign securities often trade with less frequency and volume than domestic
securities and therefore may exhibit greater price volatility. Additional costs
associated with an investment in foreign securities may include higher custodial
fees than apply to U.S. custodial arrangements, and transaction costs of foreign
currency conversions. Changes in foreign exchange rates will also affect the
value of securities denominated or quoted in currencies other than the U.S.
dollar. Additionally, foreign banks and foreign branches of domestic banks may
be subject to less stringent reserve requirements, and to different accounting,
auditing and recordkeeping requirements. The Framlington Emerging Markets Fund
seeks its investment objective by investing primarily in equity securities of
issuers in emerging market countries. The considerations discussed in the
preceding paragraph generally are more of a concern in emerging market
countries, where the possibility of political instability (including revolution)
and dependence on foreign economic assistance may be greater than in developed
countries. Investments in companies domiciled in emerging market countries
therefore may be subject to potentially higher risks than investments in
developed countries.

The Equity Selection Fund, Micro-Cap Equity Fund, Mid-Cap Growth Fund,
Multi-Season Growth Fund, Small-Cap Value Fund, and Value Fund each may invest
up to 20% and each other Equity Fund (except the International Equity Fund, the
NetNet Fund and the Framlington Funds) may invest up to 10% of its total assets
in securities of foreign issuers, including companies domiciled in developing
countries. The NetNet Fund may invest up to 35% of its assets, and the
Framlington Funds may invest without limit, in securities of foreign issuers,
including companies domiciled in developing countries. Each Fixed Income Fund
(except the International Bond Fund) and the Cash Investment Fund may invest up
to 10% of its assets in foreign securities. Under normal market conditions, the
International Equity Fund, the International Bond Fund and the Framlington
International Growth Fund will each invest at least 65% of its assets in
securities of issuers located in at least three countries other than the United
States. The International

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Equity Fund may also invest in countries with emerging economies or securities
markets located in the Asia-Pacific region, Eastern Europe, Latin and South
America and Africa.

Investments in foreign securities may be in the form of ADRs, EDRs or
similar securities. These securities may not be denominated in the same currency
as the securities they represent. ADRs are receipts typically issued by a United
States bank or trust company evidencing ownership of the underlying foreign
securities. EDRs are receipts issued by a European financial institution
evidencing a similar arrangement. Generally, ADRs, in registered form, are
designed for use in United States securities markets, and EDRs, in bearer form,
are designed for use in the European securities markets. The Mid-Cap Growth Fund
and Multi-Season Growth Fund typically will only purchase foreign securities
which are represented by sponsored or unsponsored ADRs listed on a domestic
securities exchange or included in the NASDAQ National Market System. Ownership
of unsponsored ADRs may not entitle a fund to financial or other reports from
the issuer, to which it would be entitled as the owner of sponsored ADRs.
Interest or dividend payments on such securities may be subject to foreign
withholding taxes.

Forward Foreign Currency Exchange Contracts. Each Equity and Fixed Income
Fund (except the Real Estate Equity Investment Fund) may enter into forward
foreign currency exchange contracts ("forward contracts") in an effort to reduce
the level of volatility caused by changes in foreign currency exchange rates. A
fund may not enter into forward contracts for speculative purposes. A forward
contract is an obligation to purchase or sell a specific currency at a future
date, at a price set at the time of contract. Forward contracts involve the risk
that anticipated currency movements will not be accurately predicted and the
fund's total return will be adversely affected as a result. Open positions in
forward contracts are covered by the segregation with a fund's custodian of
cash, U.S. Government securities or other high grade debt obligations which are
marked to market daily.

Futures Contracts and Options. Each Equity and Fixed Income Fund may
invest in futures contracts and options on futures contracts for hedging
purposes or to maintain liquidity. However, a fund may not purchase or sell a
futures contract unless immediately after any such transaction the sum of the
aggregate amount of margin deposits on its existing futures positions and the
amount of premiums paid for related options is 5% or less of its total assets.
Futures contracts obligate a fund, at maturity, to take or make delivery of
certain securities or in the case of index futures, the cash value of a bond or
securities index.

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The Equity and Fixed Income Funds may purchase and sell exchange traded
call and put options on futures contracts. When a fund purchases an option on a
futures contract, it has the right to assume a position as a purchaser or seller
of a futures contract at a specified exercise price at any time during the
option period. When the fund sells an option on a futures contract, it becomes
obligated to purchase or sell a futures contract if the option is exercised. In
anticipation of a market advance, a fund may purchase call options on futures
contracts as a substitute for the purchase of futures contracts to hedge against
a possible increase in the price of securities which the fund intends to
purchase. Similarly, if the value of a fund's portfolio securities is expected
to decline, the fund might purchase put options or sell call options on futures
contracts rather than sell futures contracts. In connection with a fund's
position in a futures contract or option thereon, the fund will create a
segregated account of liquid assets or will otherwise cover its position in
accordance with applicable requirements of the SEC.

In addition, each Equity and Fixed Income Fund may write covered call
options, buy put options, buy call options and write secured put options on
particular securities or indices. Options trading is a highly specialized
activity which entails greater than ordinary investment risks. A call option for
a particular security gives the purchaser of the option the right to buy, and a
writer the obligation to sell, the underlying security at the stated exercise
price at any time prior to the expiration of the option, regardless of the
market price of the security. A put option for a particular security gives the
purchaser the right to sell the underlying security at the stated exercise price
at any time prior to the expiration date of the option, regardless of the market
price of the security. In contrast to an option on a particular security, an
option on a stock index provides the holder with the right to make or receive a
cash settlement upon exercise of the option.

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make it difficult or impossible to close out a position when desired; (6)
leverage risk, that is, the risk that adverse price movements in an instrument
can result in a loss substantially greater than a fund's initial investment in
that instrument (in some cases, the potential loss is unlimited); and (7)
particularly in the case of privately-negotiated instruments, the risk that the
counterparty will fail to perform its obligations, which could leave a fund
worse off than if it had not entered into the position.

Corporate Obligations. Each Fixed Income Fund and the Cash Investment Fund
may purchase corporate bonds and commercial paper that meet the respective
fund's quality and maturity limitations. These investments may include
obligations issued by foreign corporations and foreign counterparts of U.S.
corporations and europaper, which is U.S. dollar-denominated commercial paper of
a foreign issuer. Each Fixed Income Fund will purchase only those securities
which are considered to be investment grade or better (within the four highest
rating categories of S&P or Moody's) or, if unrated, of comparable quality.
After purchase by a fund, a security may cease to be rated or its rating may be
reduced below the minimum required for purchase by a fund. Neither event will
require the fund to sell such security. However, the Advisor will reassess
promptly whether the security presents minimal credit risks and determine
whether continuing to hold the security is in the best interests of the fund.
Descriptions of each rating category are included as Appendix A to the Statement
of Additional Information.

Bank Obligations Each Equity Fund, each Fixed Income Fund, the Cash
Investment Fund and the Money Market Fund may purchase U.S. dollar-denominated
bank obligations, such as certificates of deposit, bankers' acceptances and
interest-bearing savings and time deposits, issued by U.S. or foreign banks or
savings institutions having total assets at the time of purchase in excess of $1
billion. The International Bond Fund may purchase debt obligations issued or
guaranteed by supranational organizations such as the World Bank, Asian
Development Bank, European Investment Bank and European Union; debt obligations
of U.S. and foreign banks and bank holding companies and U.S. dollar-denominated
bank obligations. See "Foreign Securities" for a discussion of the risks
associated with investments in obligations of foreign banks and foreign branches
of domestic banks. Foreign bank obligations include Eurodollar Certificates of
Deposit ("ECDs"), Eurodollar Time Deposits ("ETDs"), Canadian Time Deposits
("CTDs"), Schedule Bs, Yankee Certificates of Deposit ("Yankee CDs") and Yankee
Bankers' Acceptances ("Yankee BAs"). A discussion of these obligations appears
in the Statement of Additional Information under "Additional Information on
Portfolio Investments--Non- Domestic Bank Obligations."

<PAGE>

Asset-Backed Securities. Subject to applicable credit criteria, each Fixed
Income Fund and the Cash Investment Fund may purchase asset-backed securities
(i.e., securities backed by mortgages, installment sales contracts, credit card
receivables or other assets). The average life of asset- backed securities
varies with the maturities of the underlying instruments. The average life of a
mortgage-backed instrument, in particular, is likely to be substantially less
than the original maturity of the mortgage pools underlying the securities as
the result of unscheduled principal payments and mortgage prepayments. The rate
of such mortgage prepayments, and hence the life of the certificates, will be
primarily a function of current market rates and current conditions in the
relevant housing markets. Because of these and other reasons, an asset-backed
security's total return may be difficult to predict precisely. To the extent
that a fund purchases mortgage-related or mortgage-backed securities at a
premium, mortgage prepayments (which may be made at any time without penalty)
may result in some loss of the fund's principal investment to the extent of
premium paid.

Interest Rate and Currency Swaps. For hedging purposes, the International
Bond Fund may enter into interest rate and currency swap transactions and
purchase or sell interest rate caps and floors. The International Bond Fund
expects to enter into these transactions primarily to preserve a return or
spread on a particular investment or portion of its portfolio, to protect
against currency fluctuations as a technique for managing the portfolio's
duration (i.e., the price sensitivity to changes in interest rates) or to
protect against any increase in the price of securities the fund anticipates
purchasing at a later date. An interest rate or currency swap is a derivative
instrument which involves an agreement between the fund and another party to
exchange payments calculated as if they were interest on a fictitious
("notional") principal amount (e.g., an exchange of floating rate payments by
one party for fixed rate payments by the other). An interest rate cap or floor
is a derivative instrument which entitles the purchaser, in exchange for a
premium, to receive payments of interest on a notional principal amount from the
seller of the cap or floor, to the extent that a specified reference rate
exceeds or falls below a predetermined level.

<PAGE>

forecasts were correct, a swap position may correlate imperfectly with the asset
or liability being hedged. In addition, in the event of a default by the other
party to the transaction, the International Bond Fund might incur a loss.

U.S. Government Obligations. Each Underlying Fund may purchase obligations
issued or guaranteed by the U.S. Government and, except in the case of the U.S.
Treasury Money Market Fund, U.S. Government agencies and instrumentalities. The
Conservative Fund, the Moderate Fund and the Aggressive Fund may also invest
directly in these obligations. Obligations of certain agencies and
instrumentalities of the U.S. Government, such as those of the Government
National Mortgage Association, are supported by the full faith and credit of the
U.S. Treasury. Others, such as those of the Export-Import Bank of the United
States, are supported by the right of the issuer to borrow from the U.S.
Treasury; and still others, such as those of the Student Loan Marketing
Association, are supported only by the credit of the agency or instrumentality
issuing the obligation. No assurance can be given that the U.S. Government would
provide financial support to U.S. Government-sponsored instrumentalities if it
is not obligated to do so by law.

Stripped Securities. Each Fixed Income Fund, the Cash Investment Fund and
the Money Market Fund may purchase participations in trusts that hold U.S.
Treasury and agency securities (such as TIGRs and CATS) and also may purchase
Treasury receipts and other stripped securities, which represent beneficial
ownership interests in either future interest payments or the future principal
payments on U.S. Government obligations. These instruments are issued at a
discount to their "face value" and may (particularly in the case of stripped
mortgage-backed securities) exhibit greater price volatility than ordinary debt
securities because of the manner in which their principal and interest are
returned to investors. The U.S. Treasury Money Market Fund may purchase only
U.S. Treasury-issued stripped securities. Stripped securities will normally be
considered illiquid investments and will be acquired subject to a fund's
limitation on illiquid investments unless determined to be liquid under
guidelines established by the fund's Board of Trustees/Directors.

<PAGE>

securities held subject to a repurchase agreement may have stated maturities
exceeding 397 days, provided the repurchase agreement itself matures in 397 days
or less. The financial institutions with which a fund may enter into repurchase
agreements include member banks of the Federal Reserve System, any foreign bank
or any domestic or foreign broker/dealer which is recognized as a reporting
government securities dealer. The Advisor (the Sub-Advisor with respect to the
Framlington Funds) will review and continuously monitor the creditworthiness of
the seller under a repurchase agreement, and will require the seller to maintain
liquid assets in a segregated account in an amount that is greater than the
repurchase price. Default by or bankruptcy of the seller would, however, expose
a fund to possible loss because of adverse market action or delays in connection
with the disposition of the underlying obligations.

Reverse Repurchase Agreements. Each Underlying Fund (except the
Multi-Season Growth Fund and the Money Market Fund) may borrow funds for
temporary purposes by selling portfolio securities to financial institutions
such as banks and broker/dealers and agreeing to repurchase them at a mutually
specified date and price ("reverse repurchase agreements"). Reverse repurchase
agreements involve the risk that the market value of the securities sold by a
fund may decline below the repurchase price. A fund would pay interest on
amounts obtained pursuant to a reverse repurchase agreement.

Variable and Floating Rate Securities. Each Underlying Fund (except the
Framlington Funds, the NetNet Fund, and the U.S. Treasury Money Market Fund) may
purchase variable and floating rate securities, which may have stated maturities
in excess of the fund's maturity limitations, but which are deemed to have
shorter maturities because the fund can demand payment of the principal of the
security at least once within such periods on not more than thirty days' notice
(this demand feature is not required if the security is guaranteed by the U.S.
Government or an agency or instrumentality thereof). These securities may
include variable amount master demand notes that permit the indebtedness to vary
in addition to providing for periodic adjustments in the interest rate. The
absence of an active secondary market could make it difficult to dispose of
these securities, and a fund could suffer a loss if the issuer defaulted or
during periods that the fund is not entitled to exercise its demand rights.
Variable and floating rate securities held by a fund are subject to the fund's
limitation on illiquid investments when the fund may not demand payment of the
principal amount within seven days absent a reliable trading market.

<PAGE>

When-Issued Purchases and Forward Commitments. Each Underlying Fund
(except the Framlington Funds and the NetNet Fund) may purchase securities on a
"when-issued" basis and may purchase or sell securities on a "forward
commitment" basis. These transactions, which involve a commitment by a fund to
purchase or sell particular securities with payment and delivery taking place at
a future date, permit the fund to lock-in a price or yield on a security,
regardless of future changes in interest rates. When-issued and forward
commitment transactions involve the risk that the price or yield obtained may be
less favorable than the price or yield available when the delivery takes place.
Each fund will establish a segregated account consisting of cash, U.S.
Government securities or other portfolio securities in an amount equal to the
amount of its when-issued purchases and forward commitments. The funds do not
intend to engage in when-issued purchases and forward commitments for
speculative purposes but only in furtherance of their investment objectives.

Fixed Income Securities. Generally, the market value of fixed income
securities can be expected to vary inversely to changes in prevailing interest
rates. Investors should also recognize that, in periods of declining interest
rates, the yields of investment portfolios composed primarily of fixed income
securities will tend to be higher than prevailing market rates and, in periods
of rising interest rates, yields will tend to be somewhat lower. Changes in the
financial strengths of an issuer or changes in the ratings of a particular
security may affect the value of those investments. Fluctuations in the market
value of fixed income securities subsequent to their acquisitions will not
affect cash income from such securities, but will be reflected in a fund's net
asset value.

Guaranteed Investment Contracts. Each Fixed Income Fund and the Cash
Investment Fund may make limited investments in guaranteed investment contracts
("GICs") issued by U.S. insurance companies. Pursuant to such contracts a fund
makes cash contributions to a deposit fund of the insurance company's general
account. The insurance company then credits to the fund on a monthly basis
interest which is based on an index (in most cases this index is expected to be
the Salomon Brothers CD Index), but is guaranteed not to be less than a certain
minimum rate. A GIC is normally a general obligation of the issuing insurance
company and not funded by a separate account. The purchase price paid for a GIC
becomes part of the general assets of the insurance company, and the contract is
paid from the company's general assets. A fund will only purchase GICs from
insurance companies which, at the time of purchase, have assets of $1 billion or
more and meet quality and credit standards established by the Advisor pursuant
to guidelines approved by the Board of Trustees/Directors.

<PAGE>

Generally, GICs are not assignable or transferable without the permission of the
issuing insurance companies, and an active secondary market in GICs does not
currently exist. Therefore, GICs will normally be considered illiquid
investments, and will be acquired subject to a fund's limitation on illiquid
investments.

Investment Company Securities. The Conservative Fund, the Moderate Fund
and the Aggressive Fund each invests primarily in shares of the Underlying
Funds. In addition, in connection with the management of their daily cash
positions, each Underlying Fund may invest in securities issued by other
investment companies which invest in short-term debt securities and which seek
to maintain a $1.00 net asset value per share (i.e., "money market funds"). The
International Equity Fund, Framlington International Growth Fund, and
Framlington Emerging Markets Fund may purchase shares of investment companies
investing primarily in foreign securities, including so called "country funds."
Securities of other investment companies will be acquired within limits
prescribed by the 1940 Act. These limitations, among other matters, restrict
investments in securities of other investment companies to no more than 10% of
the value of a fund's total assets, with no more than 5% invested in the
securities of any one investment company. As a shareholder of another investment
company, an Underlying Fund would bear, along with other shareholders, its pro
rata portion of the other investment company's expenses, including advisory
fees. These expenses would be in addition to the expenses each Underlying Fund
bears directly in connection with its own operations.

Liquidity Management. Pending investment, to meet anticipated redemption
requests, or as a temporary defensive measure if the Advisor (the Sub-Advisor
with respect to the Framlington Funds) determines that market conditions
warrant, each of the Equity Funds may invest without limitation in short-term
U.S. Government obligations, high quality money market instruments, variable and
floating rate instruments and repurchase agreements as described above. The
Conservative Fund, the Moderate Fund and the Aggressive Fund may also invest
directly in these instruments.

High quality money market instruments may include commercial paper, and
Europaper, which is U.S. dollar-denominated commercial paper of a foreign
issuer. The Equity Funds may also purchase U.S. dollar-denominated bank
obligations, as described above under "Bank Obligations." Short-term obligations
purchased by the Equity Funds will either have short-term debt ratings at the
time of purchase in the top two categories by one or more unaffiliated
nationally recognized statistical rating organizations ("NRSROs") or be

<PAGE>

issued by issuers with such ratings. Unrated instruments purchased by a fund
will be of comparable quality as determined by the Advisor (the Sub-Advisor with
respect to the Framlington Funds).

Diversification. The Underlying Funds, other than the International Bond
Fund are each classified as a diversified investment company under the 1940 Act;
the International Bond Fund is classified as non-diversified. Investment return
on a non-diversified portfolio typically is dependent upon the performance of a
smaller number of securities relative to the number held in a diversified
portfolio. Consequently, the change in value of any one security may affect the
overall value of a non-diversified portfolio more than it would a diversified
portfolio, and thereby subject the market-based net asset value per share of the
non-diversified portfolio to greater fluctuations. In addition, a
non-diversified portfolio may be more susceptible to economic, political and
regulatory developments than a diversified investment portfolio with similar
objectives. All Underlying Funds, including the International Bond Fund, will,
however, comply with the diversification requirements imposed by the Internal
Revenue Code of 1986, as amended (the "Code").

Illiquid Securities. Each Equity and Fixed Income Fund may invest up to
15% of the value of its net assets in securities which are illiquid. Each of the
Money Market Funds may invest up to 10% of its net assets in securities which
are illiquid. Illiquid securities generally include repurchase agreements and
time deposits with notice/termination dates in excess of seven days, and certain
securities which are subject to trading restrictions because they are not
registered under the Securities Act of 1933, as amended. If, after the time of
acquisition, events cause this limit to be exceeded, a fund will take steps to
reduce the aggregate amount of illiquid securities as soon as reasonably
practicable in accordance with the policies of the SEC.

Lending of Portfolio Securities. To enhance the return of its portfolio,
each Underlying Fund may lend securities in its portfolio representing up to 25%
of its total assets (one-third of its total assets in the case of the Money
Market Fund) taken at market value, to securities firms and financial
institutions, provided that each loan is secured continuously by collateral in
the form of cash, high quality money market instruments or short-term U.S.
Government securities adjusted daily to have a market value at least equal to
the current market value of the securities loaned. The risk in lending portfolio
securities, as with other extensions of credit, consists of possible delay in
the recovery of the securities or possible loss of rights in the collateral
should the borrower fail financially.

<PAGE>

Borrowing. Each of the Underlying Funds is authorized to borrow money in
amounts up to 5% of the value of its total assets at the time of such borrowing
for temporary purposes. However, a fund is authorized to borrow money in amounts
up to one-third of its assets, as permitted by the 1940 Act, for the purpose of
meeting redemption requests. Borrowing by a fund creates an opportunity for
greater total return but, at the same time, increases exposure to capital risk.
Leveraging by means of borrowing may exaggerate the effect of any increase or
decrease in the value of portfolio securities on the fund's net asset value. In
addition, borrowed funds are subject to interest costs that may offset or exceed
the return earned on the borrowed funds. However, a fund will not purchase
portfolio securities while borrowings exceed 5% of the fund's total assets.

Portfolio Transactions and Turnover. All orders for the purchase or sale
of securities on behalf of an Underlying Fund are placed with broker/dealers
that the Advisor (Sub-Advisor with respect to the Framlington Funds) selects. A
high portfolio turnover rate involves larger brokerage commission expenses or
transaction costs which must be borne directly by a fund, and may result in the
realization of short-term capital gains which are taxable to shareholders as
ordinary income. The Advisor (Sub-Advisor) will not consider portfolio turnover
rate a limiting factor in making investment decisions consistent with the funds'
respective objectives and policies.

Industry Concentration. Because the Real Estate Equity Investment Fund
invests primarily in the real estate industry, it could conceivably own real
estate directly as result of a default on debt securities it owns. The fund,
therefore, may be subject to certain risks associated with the direct ownership,
as well as indirect ownership, of real estate. These risks include: declines in
the value of real estate, risks related to general and local economic
conditions, overbuilding and increased competition, increases in property taxes
and operating expenses, changes in zoning laws, casualty or condemnation losses,
variations in rental income, changes in neighborhood values, the appeal of
properties to tenants and increase in interest rates. If the fund has rental
income or income from the disposition of real property, the receipt of such
income may adversely affect its ability to retain its tax status as a regulated
investment company. See "Taxes" in the Statement of Additional Information.
Because the fund may invest more than 25% of its total assets in any one sector
of the real estate or real estate related industries, it may be subject to
greater risk and market fluctuations than a portfolio representing a broader
range of industries.

<PAGE>

The Framlington Healthcare Fund generally intends to invest at least 65%
of its total assets in securities of companies in the healthcare industries.
These industries are characterized by rapidly changing technology and extensive
government regulation. In particular, technological advances can render existing
products obsolete, and obtaining governmental approval for new products from
regulatory authorities can be lengthy, expensive and uncertain as to outcome.
Healthcare companies also can be highly dependent on the strength of patents for
maintenance of profit margins and market exclusivity. Moreover, cost containment
measures implemented by governmental authorities have adversely affected certain
healthcare industries.

The NetNet Fund generally invests at least 65% of its total assets in
securities of issuers in internet and intranet-related businesses. Because the
NetNet Fund concentrates its investments in these securities, its shares do not
represent a complete investment program and their value may fluctuate more than
shares of a portfolio invested in a broader range of industries. The value of
fund shares will also be especially susceptible to factors affecting companies
engaged in Internet and Internet-related activities. Such companies are
generally subject to the rate of change in technology that is higher than in
other industries. Changes in governmental policies, such as telephone and cable
regulations, freedom of speech and anti-trust regulations, may have a material
effect on the demand for Internet services. Many of the products and services of
companies engaged in Internet and Intranet-related activities are also subject
to relatively high risks of rapid obsolescence caused by progressive scientific
and technological advances.

INVESTMENT LIMITATIONS

Each Funds' investment objective and policies may be changed by the
Company's Board of Directors without shareholder approval. No assurance can be
given that the Funds will achieve their respective investment objectives.

The Funds have also adopted certain fundamental investment limitations
that may be changed only with the approval of a "majority of the outstanding
shares" of the respective Fund (as defined in the Statement of Additional
Information). These limitations are set forth in the Statement of Additional
Information.

<PAGE>

HOW TO PURCHASE SHARES

Each of the Funds offers individual investors two methods of purchasing
shares, thus enabling investors to choose the class that best suits their needs
given the amount of purchase and intended duration of investment.

Shares of each Fund are sold on a continuous basis and may be purchased on
any day the New York Stock Exchange is open for business through authorized
investment dealers or directly from the Distributor or the Transfer Agent. Only
the Distributor and investment dealers which have a sales agreement with the
Distributor are authorized to sell shares of the Funds. The Distributor is a
registered broker/dealer with principal offices at 60 State Street, Boston,
Massachusetts 02109.

Shares will be credited to a shareholder's account at the public offering
price next computed after an order is received by the Distributor or a dealer,
less any applicable initial sales charges. The issuance of shares is recorded on
the books of the Funds, and share certificates are not issued unless expressly
requested in writing. The Funds' management reserves the right to reject any
purchase order if in its opinion, it is in the Funds' best interest to do so and
to suspend the offering of shares of any class for any period of time.

The minimum initial investment for Class A or Class B shares is $1,000 and
subsequent investments must be at least $50. Purchases in excess of $250,000
must be for Class A shares.

Differences Among the Classes

The primary distinctions among the classes of a Fund's shares are in their
sales charge structures and ongoing expenses, as summarized in the table below.
Each class has distinct advantages and disadvantages for different investors,
and investors may choose the class that best suits their circumstances and
objectives.

<PAGE>

ANNUAL 12B-1
FEES (AS A % OF
AVERAGE DAILY OTHER
SALES CHARGE NET ASSETS) INFORMATION

CLASS A Maximum initial Service fee of Initial sales
sales charge of 0.25% charge waived
5.50% of the or reduced for
public offering certain
price. purchases.

CLASS B Maximum CDSC of Service fee of CDSC waived for
5% of 0.25%; certain
redemption distribution redemptions;
proceeds; fee of 0.75% shares convert
declines to to Class A
zero after six shares
years. approximately
six years after
issuance,
subject to
receipt of
certain tax
rulings or
opinions.

</TABLE>
Factors to Consider in Choosing a Class of Shares

In deciding which class of shares to purchase, investors should consider
the cost of sales charges together with the cost of the ongoing annual expenses
described below, as well as any other relevant facts and circumstances.

Sales Charges

Class A shares are sold at net asset value plus an initial sales charge of
up to 5.50% of the public offering price. Because of this initial sales charge,
not all of a Class A shareholder's purchase price is invested in the Fund. Class
A shares sold pursuant to a complete waiver of the initial sales charge
applicable to large purchase are subject to a 1% CDSC if redeemed within one
year of the date of purchase.

Class B shares are sold with no initial sales charge, but
a CDSC of up to 5% of the redemption proceeds applies to
redemptions made within six years of purchase. See "How to

<PAGE>

Redeem Shares -- Contingent Deferred Sales Charge -- Class B Shares." Class B
shares are subject to higher ongoing expenses than Class A shares, but
automatically convert to Class A shares approximately six years after issuance
subject to receipt of certain tax rulings or opinions.

Waiver and Reductions of Class A Sales Charges

Class A share purchases of $25,000 or more may be made at a reduced sales
charge. In considering the combined cost of sales charges and ongoing annual
expenses, investors should take into account any applicable reduced sales
charges on Class A shares. In addition, the entire initial sales charge on Class
A shares is waived for certain eligible purchasers. See "Initial Sales Charge -
Class A shares." Because Class A shares bear lower ongoing annual expenses than
Class B shares, investors eligible for complete initial sales charge waivers
should purchase Class A shares.

Ongoing Annual Expenses

Classes A and B shares pay an annual 12b-1 service fee of 0.25% of average
daily net assets. Class B shares also pay an annual 12b-1 distribution fee of
0.75% of average daily net assets. An investor should consider both ongoing
annual expenses and initial or contingent deferred sales charges in estimating
the costs of investing in the respective classes of Fund shares over various
time periods.

An investor who qualifies for a reduction or waiver of the initial sales
charge on Class A Shares may pay lower cumulative expenses by purchasing Class A
Shares than by purchasing Class B Shares. An investor should consider, among
other variables, the cost or benefit of bearing sales charges or distribution
fees at the time of purchase, upon redemption. Expenses borne by classes may
differ slightly because of the allocation of other class-specific expenses, such
as transfer agency fees, printing and postage expenses related to shareholder
reports, prospectuses and proxies, and securities registration fees. The
examples set forth above under "Expense Table" show the cumulative expenses an
investor would pay over periods of one and three years on a hypothetical
investment in each class of Fund shares, assuming an annual return of 5%.

Other Information

Dealers may receive different levels of compensation for selling one
particular class of Fund shares rather than another. Investors should understand
that distribution fees and initial and contingent deferred sales charges all are

<PAGE>

intended to compensate the Distributor for distribution
services.

An account may be opened by mailing a check or other negotiable bank draft
(payable to The Munder Funds, Inc.) for $1,000 or more for Class A or Class B
shares with a completed and signed Account Application Form to The Munder Funds,
Inc. c/o First Data Investor Services Group, Inc., P.O. Box 5130, Westborough,
Massachusetts 01581-5130. An Account Application Form may be obtained by calling
(800) 438-5789. All such investments are made at the public offering price of
Fund shares next computed following receipt of payment by the Transfer Agent.
The public offering price for the shares is the per share net asset value (see
"Net Asset Value") next determined after receipt of the order by the dealer,
plus any applicable initial sales charge for Class A shares. Confirmations of
the opening of an account and of all subsequent transactions in the account are
forwarded by the Transfer Agent to the shareholder's address of record. When
placing purchase orders, investors should specify the class of shares being
purchased. All share purchase orders that fail to specify a class will
automatically be invested in Class A shares.

The completed investment application must indicate a certified valid
taxpayer identification number. Failure to provide a certified taxpayer
identification number may result in backup withholding at the rate of 31%.
Additionally, investors may be subject to penalties if they falsify information
with respect to their taxpayer identification numbers.

In addition, investors having an account with a commercial bank that is a
member of the Federal Reserve System may purchase shares of a Fund by requesting
their bank to transmit funds by wire to Boston Safe Deposit and Trust Company,
Boston, MA, ABA #011001234, DDA #16-798-3, Fund Name, Shareholder Account
Number, Account of (Registered Shareholder). Before wiring any funds, an
investor must contact the Fund by calling (800) 438-5789 to confirm the wire
instructions. The investor's name, account number, taxpayer identification or
social security number, and address must be specified in the wire. In addition
an Account Application Form containing the investor's taxpayer identification
number should be forwarded within seven days of purchase to The Munder Funds,
Inc. c/o First Data Investor Services Group, Inc., P.O. Box 5130, Westborough,
Massachusetts 01581-5130.

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

<PAGE>

Automatic Investment Plan ("AIP")

An investor in shares of any Fund may arrange for periodic investments in
that Fund through automatic deductions from a checking or savings account by
completing the AIP Application Form or by calling the Fund at (800) 438-5789.
The minimum pre-authorized investment amount is $50. Such a plan is voluntary
and may be discontinued by the shareholder at any time or by the Company on 30
days' written notice to the shareholder.

See the Statement of Additional Information for further information
regarding purchase of the Funds' shares.

Reinvestment Privilege

Upon redemption of Class A or Class B shares of a Fund (or Class A or
Class B shares of another non-money market fund of the Company, The Munder
Framlington Funds Trust or The Munder Funds Trust), a shareholder has an annual
right, to be exercised within 60 days, to reinvest the redemption proceeds in
shares of the same class of the same fund without any sales charges. The
Transfer Agent must be notified in writing by the purchaser, or by his or her
broker, at the time the purchase is made of the reinvestment in order to
eliminate a sales charge.

See the Statement of Additional Information for further information
regarding purchases of the Funds' shares.

Initial Sales Charge - Class A Shares

The public offering price of Class A shares is the next determined net
asset value plus any applicable sales charge, which will vary with the size of
the purchase as shown in the following table:
<TABLE>
<S> <C> <C> <C>
INITIAL SALES CHARGE SCHEDULE - CLASS A SHARES

Sales Charge as a Percentage of

Discount to
Net Amount Selected Dealers
Invested (Net as a Percentage of
Amount of Purchase Offering Price Asset Value) Offering Price

Less than $25,000 5.50% 5.82% 5.00%

$25,000 but less than $50,000 5.25% 5.54% 4.75%

$50,000 but less than $100,000 4.50% 4.71% 4.00%

<PAGE>

$100,000 but less than $250,000 3.50% 3.63% 3.25%

$250,000 but less than $500,000 2.50% 2.56% 2.25%

$500,000 but less than $1,000,000 1.50% 1.52% 1.25%

$1,000,000 or more None* None* (see below)**

* No initial sales charge applies on investments of $1 million or more, but a CDSC of 1% is
imposed on certain redemptions within one year of the purchase. See "How to Redeem Shares --
Contingent Deferred Sales Charge -- Class A Shares."

** A 1% commission will be paid by the Distributor to dealers who initiate
and are responsible for purchases of $1 million or more.

</TABLE>
The Distributor will pay the appropriate Dealers' Reallowance to brokers
purchasing Class A shares. From time to time, the Distributor may reallow to
brokers the full amount of the sales charge on Class A shares. To the extent the
Distributor reallows more than 90% of the sales charge to brokers, such brokers
may be deemed to be underwriters under the Act. In addition to the Dealers'
Reallowance, the Distributor will, from time to time, at its expense or as an
expense for which it may be reimbursed under the Class B Plan described below,
pay a bonus or other consideration or incentive (which may be in the form of
merchandise or trips) to brokers or institutions which sell a minimum dollar
amount of shares of a Fund during a specified period of time. Dealers may
receive compensation from the Distributor on sales made without a sales charge.

Sales Charge Waivers - Class A Shares

Upon notice to the Transfer Agent at the time of purchase, the initial
sales charge will be waived on sales of Class A shares to the following types of
purchasers: (1) individuals with an investment account or relationship with the
Advisor; (2) full-time employees and retired employees of the Advisor, employees
of the Funds' administrator, distributor and custodian, and immediate family
members of such persons; (3) registered broker-dealers that have entered into
selling agreements with the Distributor, for their own accounts or for
retirement plans for their employees or sold to registered representatives for
full-time employees (and their families) that certify to the Distributor at the
time of purchase that such purchase is for their own account (or for the benefit
of their families); (4) certain qualified employee benefit plans as defined
below; and (5) financial institutions, financial planners or employee benefit
plan consultants acting for the accounts of their clients.

Qualified Employer Sponsored Retirement Plans

<PAGE>

Upon notice to the Transfer Agent at the time of purchase, the initial
sales charge will be waived on purchases by employer sponsored retirement plans
which are qualified under Section 401(a) of the Code, including: 401(k) plans,
defined benefit pension plans, profit-sharing pension plans, money-purchase
pension plans and Section 457 deferred compensation plans and Section 403(b)
plans (each, a "Qualified Employee Benefit Plan") that (1) invest $1,000,000 or
more in Class A shares of investment portfolios offered by the Company, The
Munder Framlington Funds Trust or The Munder Funds Trust (other than the Munder
Index 500 Fund) or (2) have at least 75 eligible plan participants. In addition,
the CDSC of 1% imposed on certain redemptions within one year of purchase will
be waived for Qualified Employee Benefit Plan purchases that meet the above
criteria. A 1% commission will be paid by the Distributor to dealers who
initiate and are responsible for Qualified Employee Benefit Plan purchases that
meet the above criteria. For purposes of the foregoing sales charge waiver,
Simplified Employee Pension Plans ("SEPs") and Individual Retirement Accounts
("IRAs") are not considered to be Qualified Employee Benefit Plans.

Sales charges will be waived for individuals who purchase Class A shares
with the proceeds of distributions from qualified retirement plans for which the
Advisor serves as investment advisor. Sales charges will be waived for
individuals who purchase Class A shares with the proceeds of redemptions of
Class Y shares of the Funds or other funds of the Company, The Munder
Framlington Funds Trust or The Munder Funds Trust if the proceeds are invested
within 60 days of redemption. See "Other Information -- Description of Shares."

If an investor intends to purchase over the next 13 months at least
$25,000 of Class A shares, the sales charge may be reduced by completing the
Letter of Intent portion of the Account Application Form or the applicable form
from the investor's broker. The Letter of Intent includes a provision for a
sales charge adjustment depending on the amount actually purchased within the
13-month period. In addition, pursuant to a Letter of Intent, the Custodian will
hold in escrow the difference between the sales charge applicable to the amount
initially purchased and the sales charge paid at the time of the investment
which is based on the amount covered by the Letter of Intent. The amount held in
escrow will be applied to the investor's account at the end of the 13-month
period unless the amount specified in the Letter of Intent is not purchased.

The Letter of Intent will not obligate the investor to purchase shares,
but if he or she does, each purchase made during the period will be at the sales
charge applicable to the total amount intended to be purchased. The letter may
be

<PAGE>

dated as of a prior date to include any purchase made within the past 90 days.
The Letter of Intent will apply only to Class A shares of the Funds or other
non-money market funds of the Company, The Munder Framlington Funds Trust or The
Munder Funds Trust. The value of Class B shares of any Fund or other fund of the
Company, The Munder Framlington Funds Trust or The Munder Funds Trust will not
be counted toward the fulfillment of a Letter of Intent.

As shown in the table under "Initial Sales Charge -- Class A Shares,"
larger purchases may reduce the sales charge paid. Upon notice to the investor's
broker or the Transfer Agent, purchases of Class A shares that are made by the
investor, his or her spouse, his or her children under age 21 and his or her IRA
will be combined when calculating the sales charge. The value of Class B shares
of any Fund or other fund of the Company, The Munder Framlington Funds Trust or
The Munder Funds Trust will not be counted toward the foregoing Quantity
Discounts.

An investor who has previously purchased Class A shares of any of the
Funds or other non-money market funds of the Company, The Munder Framlington
Funds Trust or The Munder Funds Trust upon which a sales charge has already been
paid may, upon request, aggregate investments in such shares with current
purchases to determine the applicable sales charge for current purchases. An
investor's aggregate investment is the total value (based upon the greater of
current net asset value or the public offering price originally paid if provided
at the time of purchase) of: (a) current purchases, and (b) shares that are
beneficially owned by the investor for which a sales charge has already been
paid. Similarly, with respect to each subsequent investment, all Class A shares
of any of the Funds or other non-money market funds of the Company, The Munder
Framlington Funds Trust or The Munder Funds Trust upon which a sales charge has
already been paid that are beneficially owned by the investor at the time of
investment may be combined to determine the applicable sales charge.

Some or all of the services and privileges described herein may not be
available to certain customers of a broker, and a broker may impose conditions
on its customers which are different from those described in this Prospectus.
Investors should consult their brokers in this regard.

Pursuant to the Funds' variable pricing system, each Fund issues Class Y
shares in addition to the classes described in this Prospectus. Class Y shares
have different sales charges and expense levels, which will affect performance.
Investors may call (800) 438-5789 to obtain more information concerning Class Y
shares. When placing purchase orders, investors should specify the class of
shares being purchased. All share

<PAGE>

purchase orders that fail to specify a class will automatically be invested in
Class A shares.

HOW TO REDEEM SHARES

Generally, shareholders may require a Fund to redeem
their shares by sending a written request, signed by the
record owner(s), to The Munder Funds, Inc. c/o First Data
Investor Services Group, Inc., P.O. Box 5130, Westborough,
Massachusetts 01581-5130.

Signature Guarantee

If the proceeds of the redemption are greater than $50,000, or are to be
paid to someone other than the registered holder, or to other than the
shareholder's address of record, or if the shares are to be transferred, the
owner's signature must be guaranteed by a commercial bank, trust company,
savings association or credit union as defined by the Federal Deposit Insurance
Act, or by a securities firm having membership on a recognized national
securities exchange. If the proceeds of the redemption are less than $50,000, no
signature guarantees are required for shares for which certificates have not
been issued when an application is on file with the Transfer Agent and payment
is to be made to the shareholder of record at the shareholder's address of
record. The redemption price shall be the net asset value per share next
computed after receipt of the redemption request in proper order. See "Net Asset
Value." Redemption proceeds will be reduced by the amount of any CDSC (see
below).

Expedited Redemption

In addition, a shareholder redeeming at least $1,000 of shares and who has
authorized expedited redemption on the application form filed with the Transfer
Agent may, at the time of such redemption, request that funds be mailed to the
commercial bank or registered broker-dealer previously designated on the
application form by telephoning the Company at (800) 438-5789 prior to 4:00 p.m.
New York City time. Redemption proceeds will be sent on the next business day
following receipt of the telephone redemption request. If a shareholder seeks to
use an expedited method of redemption of shares recently purchased by check, a
Fund may withhold the redemption proceeds until it is reasonably assured of the
collection of the check representing the purchase, which may take up to 15 days.

The Company, the Distributor and the Transfer Agent reserve the right at
any time to suspend or terminate the expedited redemption procedure or to impose
a fee for this service. During periods of unusual economic or market

<PAGE>

changes, shareholders may experience difficulties or delays in effecting
telephone redemptions. The Transfer Agent has instituted procedures that it
believes are reasonably designed to insure that redemption instructions
communicated by telephone are genuine, and could be liable for losses caused by
unauthorized or fraudulent instructions in the absence of such procedures. The
procedures currently include a recorded verification of the shareholder's name,
social security number and account number, followed by the mailing of a
statement confirming the transaction, which is sent to the address of record. If
these procedures are followed, neither the Company, the Distributor nor the
Transfer Agent will be responsible for any loss, damages, expense or cost
arising out of any telephone redemptions effected upon instructions believed by
them to be genuine. Redemption proceeds will be mailed only according to the
previously established instructions.

The Funds ordinarily will make payment for all shares redeemed within
seven business days after the receipt by the Transfer Agent in proper form;
however, the right of redemption and payment of redemption proceeds are subject
to suspension for any period during which the New York Stock Exchange is closed,
or when trading on the New York Stock Exchange is restricted as determined by
the SEC; during any period when an emergency as defined by the rules and
regulations of the SEC exists; or during any period when the SEC has by order
permitted such suspension. The Funds will not mail redemption proceeds until
checks (including certified checks or cashier's checks) received for the shares
purchased have cleared, which can take as long as 15 days.

There is no minimum for telephone redemptions paid by check. However, the
Transfer Agent may deduct its current wire fee from the principal in the
shareholder's account for wire redemptions under $5,000. As of the date of this
prospectus, this fee was $7.50 for each wire redemption. There is no charge for
wire redemptions of $5,000 or more.

The value of shares on repurchase may be more or less than the investor's
cost depending upon the market value of the relevant Fund's portfolio securities
at the time of redemption. No redemption fee is charged for the redemption of
shares, but a CDSC is imposed on certain redemptions of Class A and Class B
shares as described below.

Involuntary Redemption

<PAGE>

investor may be notified that the value of the investor's account is less than
$500, in which case the investor would be allowed 60 days to make an additional
investment before the redemption is processed.

Automatic Withdrawal Plan ("AWP")

The Funds offer an Automatic Withdrawal Plan which may be used by holders
of Class A and Class B shares who wish to receive regular distributions from
their accounts. Upon commencement of the AWP, the account must have a current
value of $2,500 or more in a Fund. Shareholders may elect to receive automatic
cash payments of $50 or more on a monthly, quarterly, semi-annual, or annual
basis. Automatic withdrawals are normally processed on the 20th day of the
applicable month or, if such day is not a day on which the New York Stock
Exchange is open for business, on the next business day, and are paid promptly
thereafter. An investor may utilize the AWP by completing the AWP Application
Form available through the Transfer Agent.

Shareholders should realize that if withdrawals exceed capital
appreciation and/or income dividends their invested principal in the account
will be depleted. Thus, depending upon the frequency and amounts of the
withdrawal payments and/or any fluctuations in the net asset value per share,
their original investment could be exhausted entirely. To participate in the
AWP, shareholders must have their dividends automatically reinvested and may not
hold share certificates. Shareholders may change or cancel the AWP at any time,
upon written notice to the Transfer Agent. Purchases of additional Class A
shares of the Funds concurrently with withdrawals may be disadvantageous to
investors because of the sales charges involved, and, therefore, are
discouraged. Class B shares, if any, that are redeemed in connection with the
AWP are still subject to the applicable CDSC.

Contingent Deferred Sales Charge - Class B Shares

Class B shares that are redeemed within six years of purchase will be
subject to a CDSC as set forth below. A CDSC payable to the Distributor is
imposed on any redemption of shares that causes the current value of a
shareholder's account to fall below the dollar amount of all payments by the
shareholder for the purchase of shares during the preceding six years.

The CDSC will be waived for certain exchanges as described below. In
addition, Class B shares that are redeemed will not be subject to a CDSC to the
extent that the value of such shares represents (1) reinvestment of dividends or
capital gain distributions, (2) shares held more than six

<PAGE>

years, or (3) capital appreciation of shares redeemed. In determining the
applicability and rate of any CDSC, it will be assumed that a redemption of
Class B shares is made first of shares representing reinvestment of dividends
and capital gains distributions, then any appreciation on shares redeemed, and
then of remaining shares held by the shareholders for the longest period of
time. The purchase payment from which a redemption is made is assumed to be the
earliest purchase payment from which a full redemption has not already been
effected. The holding period of Class B shares of a Fund acquired through an
exchange of Class B shares of The Munder Money Market Fund (which are available
only by exchange of Class B shares of the Funds or other funds of the Company,
The Munder Framlington Funds Trust or the Munder Funds Trust) will be calculated
from the date that the Class B shares were initially purchased.

The amount of any applicable CDSC will be calculated by multiplying the
net asset value of shares subject to the charge at the time of redemption or at
the time of purchase, whichever is lower, by the applicable percentage shown in
the table below:

CONTINGENT DEFERRED
SALES CHARGE AS
A PERCENTAGE OF
YEAR SINCE DOLLAR AMOUNT
PURCHASE SUBJECT TO CHARGE

First 5.00%
Second 4.00%
Third 3.00%
Fourth 3.00%
Fifth 2.00%
Sixth 1.00%
Seventh 0.00%

For Federal income tax purposes, the amount of the CDSC will reduce the
gain or increase the loss, as the case may be, on the amount recognized on the
redemption of shares. The amount of any CDSC will be paid to the Distributor.

The Distributor will pay a commission of 4.0% of the net asset value of
Class B shares to brokers that initiate and are responsible for purchases of
Class B shares of the Funds.

The CDSC will be waived for certain exchanges, as described below. In
addition, the CDSC payable with respect to Class B shares will be waived in the
following circumstances: (1) total or partial redemptions made within one year
following the death of a shareholder or registered joint owner; (2) minimum
required distributions made in connection with an IRA or other retirement plan
following

<PAGE>

attainment of age 70 1/2; and (3) redemptions pursuant to a Fund's right to
liquidate a shareholder's account involuntarily.

Contingent Deferred Sales Charge - Class A Shares

In order to recover commissions paid to dealers on investments of $1
million or more in Class A shares, a CDSC of 1% applies to certain redemptions
of Class A shares made within the first year after investing.

No charge is imposed to the extent that the net asset value of the shares
redeemed does not exceed (a) the current net asset value of shares purchased
through reinvestment of dividends or capital gain distributions plus (b) the
current net asset value of shares purchased more than one year prior to the
redemption, plus (c) increases in the net asset value of the shareholder's
shares above the purchase payments made during the preceding one year. The same
waivers as are available with respect to the CDSC on Class B shares also apply
to the CDSC on Class A shares.

The holding period of Class A shares of a Fund acquired through an
exchange of the corresponding class of shares of The Munder Money Market Fund
(which are available only by exchange of Class A shares of the Funds or other
funds of the Company, The Munder Framlington Funds Trust or the Munder Funds
Trust) and the Funds and other non-money market funds of the Company, The Munder
Framlington Funds Trust and The Munder Funds Trust will be calculated from the
date that the Class A shares were initially purchased.

See the Statement of Additional Information for further information
regarding redemption of Fund shares.

Class A shares purchased for at least $1,000,000 without a sales charge
may be exchanged for Class A shares of another fund of the Company, The Munder
Framlington Funds Trust or The Munder Funds Trust without the imposition of a
CDSC, although the CDSC described above will apply to the redemption of the
shares acquired through an exchange.

In determining whether a CDSC is applicable to a redemption, the
calculation will be made in a manner that results in the lowest possible rate.
It will be assumed that the redemption is made first of amounts representing all
Class A shares on which a front-end sales charge has been assessed; then of
shares acquired pursuant to the reinvestment of dividends and distributions; and
then of amounts representing the cost of shares purchased one year or more prior
to the redemption. For Federal income tax purposes, the amount of the CDSC will
reduce the gain or increase the loss, as the

<PAGE>

case may be, on the amount realized on redemption. The amount
of any CDSC will be paid to the Distributor.

CONVERSION OF CLASS B SHARES

A shareholder's Class B shares will automatically convert to Class A
shares in a Fund on the sixth anniversary of the issuance of the Class B shares,
together with a pro rata portion of all Class B shares representing dividends
and other distributions paid in additional Class B shares. The Class B shares so
converted will no longer be subject to the higher expenses borne by Class B
shares. The conversion will be effected at the relative net asset values per
share of the two classes. If a shareholder effects one or more exchanges among
Class B shares of a Fund or other non-money market funds of the Company, The
Munder Framlington Funds Trust or The Munder Funds Trust during the six-year
period, the holding periods for the shares so exchanged will be counted toward
the six-year period. Because the per share net asset value of the Class A shares
may be higher than that of the Class B shares at the time of conversion, a
shareholder may receive fewer Class A shares than the number of Class B shares
converted, although the dollar value will be the same. See "Net Asset Value."

Other

HOW TO EXCHANGE SHARES

General

Class A and Class B shares of each Fund may be exchanged for shares of the
same class of other funds of the Company, The Munder Framlington Funds Trust or
The Munder Funds Trust, based on their respective net asset values, subject to
any applicable sales charge differential.

Class A shares of a money market fund of the Company, The Munder
Framlington Funds Trust or The Munder Funds Trust that were (1) acquired through
the use of the exchange privilege and (2) can be traced back to a purchase of
shares in one or more investment portfolios of the Company, The Munder
Framlington Funds Trust or The Munder Funds Trust for which a sales charge was
paid, can be exchanged for Class A shares of a Fund or other fund of the
Company, The Munder Framlington

<PAGE>

Funds Trust or The Munder Funds Trust subject to payment of differential sales
charges as applicable.

Class K Shares of a fund of the Company, The Munder Framlington Funds
Trust or the Munder Funds Trust may be exchanged for Class A Shares of any of
the Funds subject to payment of differential sales charges as applicable.

The exchange of Class B shares of one fund of the Company, The Munder
Framlington Funds Trust or The Munder Funds Trust for Class B shares of another
fund of the Company, The Munder Framlington Funds Trust or The Munder Funds
Trust will not be subject to a CDSC. For purposes of computing the applicable
CDSC, the length of time of ownership of the Class B shares will be measured
from the date of the original purchase and will not be affected by such
exchanges.

Any share exchange must satisfy the requirements relating to the minimum
initial investment in a fund of the Company, The Munder Framlington Funds Trust
or The Munder Funds Trust, and the shares involved must be legally available for
sale in the state of the investor's residence. For Federal income tax purposes,
a share exchange is a taxable event and, accordingly, a capital gain or loss may
be realized. Before making an exchange request, shareholders should consult a
tax or other financial advisor and should consider the investment objective,
policies and restrictions of the fund into which the shareholder is making an
exchange, as set forth in the applicable prospectus. An investor who is
considering an exchange may obtain a copy of the prospectus for any investment
portfolio of the Company, The Munder Framlington Funds Trust or The Munder Funds
Company by contacting his or her broker or the Company at (800) 438-5789.
Certain brokers may charge a fee for handling exchanges.

The Company reserves the right to modify or terminate the exchange
privilege at any time. Notice will be given to shareholders of any material
modifications except where notice is not required.

Exchange by Telephone

A shareholder may give exchange instructions to the shareholder's broker
or by telephone to the Funds at (800) 438-5789. Telephone exchange privileges
are not available to shareholders who have custody of their share certificates.
The Company reserves the right to reject any telephone exchange request.
Telephone exchanges may be subject to limitations as to amount or frequency, and
to other restrictions that may be established from time to time to ensure that
exchanges do not operate to the disadvantage of any Fund or its shareholders.

<PAGE>

Exchange by Mail

Exchange orders may be sent by mail to the shareholder's broker or to the
Transfer Agent at the address set forth in "Shareholder Account Information."

DIVIDENDS AND DISTRIBUTIONS

The Funds expect to pay dividends and distributions from the net income
and capital gains, if any, earned on investments held by the Funds. The net
income of each Fund, if any, is declared as a dividend and paid at least
annually. Dividends and other distributions paid by each Fund with respect to
the Class A and Class B shares are calculated at the same time.

The Funds' net realized capital gains (including net short-term capital
gains), if any, will be distributed at least annually. Dividends and capital
gains are paid in the form of additional shares of the same class of a Fund
unless a shareholder requests that dividends and capital gains be paid in cash.
In the absence of this request on the Account Application Form or in a
subsequent request, each purchase of shares is made on the understanding that
the Funds' Transfer Agent is automatically appointed to receive the dividends
upon all shares in the shareholder's account and to reinvest them in full and
fractional shares of the same class of the appropriate Fund at the net asset
value in effect at the close of business on the reinvestment date. Dividends are
automatically paid in cash (along with any redemption proceeds) not later than
seven business days after a shareholder closes an account with a Fund.

The per share dividends on Class B shares of a Fund generally will be
lower than the per share dividends on Class A shares of that Fund as a result of
the higher annual service and distribution fees applicable with respect to Class
B shares.

Each Fund's expenses are deducted from the income of the Fund before
dividends are declared and paid. These expenses include, but are not limited to,
fees paid to the Advisor, Administrator, Custodian and Transfer Agent; fees and
expenses of officers and Trustees; taxes; interest; legal and auditing fees;
brokerage fees and commissions; certain fees and expenses in registering and
qualifying the Funds and their shares for distribution under Federal and state
securities laws; expenses of preparing prospectuses and statements of additional
information and of printing and distributing prospectuses and statements of
additional information to existing shareholders; the expense of reports to
shareholders, shareholders' meetings and proxy solicitations; fidelity bond

<PAGE>

and Trustees' and officers' liability insurance premiums; the expense of using
independent pricing services; and other expenses which are not assumed by the
Administrator. Any general expenses of the Trust that are not readily
identifiable as belonging to a particular fund of the Trust are allocated among
all funds of the Trust by or under the direction of the Board of Trustees in a
manner that the Board determines to be fair and equitable. Except as noted in
this Prospectus and the Statement of Additional Information, the Funds' service
contractors bear expenses in connection with the performance of their services,
and each Fund bears the expenses incurred in its operations. The Advisor,
Administrator, Custodian and Transfer Agent may voluntarily waive all or a
portion of their respective fees from time to time.

Each Fund's expenses are deducted from the income of that Fund before
dividends are declared and paid. These expenses include, but are not limited to,
fees paid to the Advisor, Administrator, Custodian and Transfer Agent; fees and
expenses of officers and Directors; taxes; interest; legal and auditing fees;
brokerage fees and commissions; certain fees and expenses in registering and
qualifying the Fund and its shares for distribution under Federal and state
securities laws; expenses of preparing prospectuses and statements of additional
information and of printing and distributing prospectuses and statements of
additional information to existing shareholders; the expense of reports to
shareholders, shareholders' meetings and proxy solicitations; fidelity bond and
Directors' and officers' liability insurance premiums; the expense of using
independent pricing services; and other expenses which are not assumed by the
Administrator. Any general expenses of the Company that are not readily
identifiable as belonging to a particular fund of the Company are allocated
among all funds of the Company by or under the direction of the Board of
Directors in a manner that the Board determines to be fair and equitable. Except
as noted in this Prospectus and the Statement of Additional Information, the
Funds' service contractors bear expenses in connection with the performance of
their services, and the Funds bear the expenses incurred in their respective
operations. The Advisor, Administrator, Custodian and Transfer Agent may
voluntarily waive all or a portion of their respective fees from time to time.

Each Fund's net investment income available for distribution to the
holders of shares will be reduced by the amount of service and distribution fees
payable under the Class A Plan and the Class B Plan described below.

<PAGE>

NET ASSET VALUE

Net asset value for a particular class of shares in a Fund is calculated
by dividing the value of all securities and other assets belonging to the Fund
allocable to that class, less the liabilities charged to that class, by the
number of outstanding shares of that class.

The net asset value per share of a Fund for the purpose of pricing
purchase and redemption orders is determined as of the close of regular trading
hours on the New York Stock Exchange (currently 4:00 p.m., New York time) on
each business day. The Underlying Funds are valued at their respective net asset
values as of 4:00 p.m., New York time, on each business day. The Underlying
Funds value their portfolio securities as follows: Securities traded on a
national securities exchange or on the NASDAQ National Market System are valued
at the last sale price on such exchange or market as of the close of business on
the date of valuation. Securities traded on a national securities exchange or on
the NASDAQ National Market System for which there were no sales on the date of
valuation and securities traded on other over-the-counter markets, including
listed securities for which the primary market is believed to be
over-the-counter, are valued at the mean between the most recently quoted bid
and asked prices. Restricted securities and securities and assets for which
market quotations are not readily available are valued at fair value by the
Advisor under the supervision of the Board of Directors. Debt securities with
remaining maturities of 60 days or less are valued at amortized cost, unless the
Board of Directors determines that such valuation does not constitute fair value
at that time. Under this method, such securities are valued initially at cost on
the date of purchase (or the 61st day before maturity).

The Company does not accept purchase and redemption orders on days on
which the New York Stock Exchange is closed. The New York Stock Exchange is
currently scheduled to be closed on New Year's Day, Presidents' Day, Good
Friday, Memorial Day (observed), Independence Day, Labor Day, Thanksgiving and
Christmas, and on the preceding Friday or subsequent Monday when one of these
holidays falls on a Saturday or Sunday, respectively.

The different expenses borne by each Class of shares will result in
different net asset values and dividends. The per share net asset value of the
Class B shares of a Fund generally will be lower than that of the Class A shares
of that Fund because of the higher expenses borne by the Class B shares.

<PAGE>

MANAGEMENT

Board of Directors

The Company is managed under the direction of its Board of Directors. The
Statement of Additional Information contains the name and background information
of each Director.

Investment Advisor

Munder Capital Management, a Delaware general partnership with its
principal offices at 480 Pierce Street, Birmingham, Michigan 48009, serves as
the Fund's investment advisor. The Advisor was formed in December, 1994. The
principal partners of the Advisor are Old MCM, Inc. ("MCM"), Munder Group LLC,
Woodbridge Capital Management, Inc. ("Woodbridge") and WAM Holdings, Inc.
("WAM"). MCM was founded in February, 1985 as a Delaware corporation and was a
registered investment advisor. Woodbridge and WAM are indirect, wholly-owned
subsidiaries of Comerica Incorporated. Mr. Lee P. Munder, the Advisor's chief
executive officer, indirectly owns or controls a majority of the partnership
interests in the Advisor. As of September 30, 1996, the Advisor and its
affiliates had approximately $36 billion in assets under active management, of
which $18 billion were invested in equity securities, $8 billion were invested
in money market or other short-term instruments, and $10 billion were invested
in other fixed income securities.

Subject to the supervision of the Board of Directors of the Company, the
Advisor provides overall investment management for the Funds, provides research
and credit analysis, is responsible for all purchases and sales of portfolio
securities, maintains books and records with respect to the Funds' securities
transactions and provides periodic and special reports to the Board of Directors
as requested.

For the advisory services provided and expenses assumed by it, the Advisor
has agreed to a fee from the Funds, computed daily and payable monthly, at an
annual rate of .25% of each Fund's average daily net assets.

Munder Capital Management also serves as investment advisor for each of
the Underlying Funds, and receives investment advisory fees for such service
from those Funds. For the advisory services provided and expenses assumed by it,
the Advisor has agreed to a fee from each Underlying Fund, computed daily and
payable monthly on a separate Fund-by-Fund basis, at an annual rate of 1.25% of
the average daily net assets of the Framlington Emerging Market Fund; 1.00% of
the first $500 million of average daily net assets and .75% of average daily net
assets in excess of $500 million of the

<PAGE>

Multi-Season Growth Fund; 1.00% of average daily net assets up to $250 million
and .75% of average daily net assets in excess of $250 million for the
Framlington International Growth Fund and the Framlington Healthcare Fund; 1.00%
of average daily net assets of the Micro-Cap Equity Fund and NetNet Fund; .75%
of average daily net assets of each of the Accelerating Growth Fund, Equity
Selection Fund, Growth & Income Fund, International Equity Fund, Small-Cap Value
Fund and Small Company Growth Fund; .74% of average daily net assets of each of
the Mid-Cap Growth Fund, Real Estate Equity Investment Fund and Value Fund; .50%
of average daily net assets of each of the Bond Fund, Intermediate Bond Fund,
International Bond Fund and U.S. Government Income Fund; .40% of average daily
net assets of the Money Market Fund; and .35% of average daily net assets of
each of the Cash Investment Fund, and U.S. Treasury Money Market Fund.

Each Fund, as a shareholder in an Underlying Fund, will indirectly bear
its proportionate share of any investment advisory fees and other expenses paid
by an Underlying Fund. Information regarding the expense ratios of the
Underlying Funds is included in this Prospectus under the heading "Expense
Table." See "Investment Advisory and Other Service Arrangements" in the
Statement of Additional Information for information regarding the amounts paid
the Adviser by the Underlying Funds during their most recent fiscal period.

The Advisor expects to voluntarily waive a portion of the fees payable to
it with respect to the Multi-Season Growth Fund during the current fiscal year.
However, the Advisor may discontinue such fee waivers at any time, in its sole
discretion. The Advisor expects to receive, after waivers, an advisory fee at
the annual rate of .75% of the average daily net assets of the Multi-Season
Growth Fund during the Company's current fiscal year.

The Advisor may, from time to time, make payments to banks, broker-dealers
or other financial institutions for certain services to the Fund and/or its
shareholders, including sub-administration, sub-transfer agency and shareholder
servicing. Such payments are made out of the Advisor's own resources and do not
involve additional costs to the Fund or its shareholders.

Sub-Advisor

<PAGE>

Funds. The Sub-Advisor is also responsible for arranging the execution of all
portfolio management decisions, including the selection of brokers to execute
trades and the negotiation of brokerage commissions in connection therewith. For
its services with regard to the Framlington International Fund and the
Framlington Healthcare Fund, the Advisor pays the Sub- Advisor a monthly fee
equal on an annual basis to 0.50% of each Fund's average daily net assets up to
$250 million, reduced to .375% of each Fund's average daily net assets in excess
of $250 million. For its services with regard to the Framlington Emerging
Markets Fund, the Advisor pays the Sub- Advisor a monthly fee equal on an annual
basis to .625% of the Fund's average daily net assets.

The Sub-Advisor is a subsidiary of Framlington Group plc, a public limited
company incorporated in England and Wales which, through its subsidiaries,
provides a wide range of investment services. The Sub-Advisor and its affiliates
serve as investment manager to various investment trusts organized in the United
Kingdom, and provides fund management services to pension funds and charities.
Framlington Group plc is a wholly owned subsidiary of Framlington Holdings
Limited which is, in turn, owned 49% by the Advisor and 51% by Credit Commercial
de France S.A., a French banking corporation listed on the Societe des Bourses
Francaises.

Portfolio Managers -- The Funds

The portfolio manager for the Funds is Gerald Seizert, CFA, CIC, who is
Executive Vice President and Chief Investment Officer of all equity management
of the Advisor. Prior to joining the Advisor in 1995, Mr. Seizert served as
Director and Managing Partner of the Detroit office of Loomis, Sayles & Company,
L.P. Before his 1984 affiliation with Loomis, he served as Vice President, Trust
Investments for First of America Bank. Earlier, 1977-1979, Mr. Seizert served as
a Credit Analyst at Bank One of Columbus, N.A. Mr. Seizert received his B.B.A.
degree and an M.B.A from The University of Toledo and is a Chartered Financial
Analyst and Chartered Investment Counselor.

For a description of the portfolio managers primarily responsible for the
management of the Underlying Funds, see "INVESTMENT ADVISORY AND OTHER SERVICE
ARRANGEMENTS--PORTFOLIO MANAGERS--THE UNDERLYING FUNDS" in the Statement of
Additional Information.

Administrator, Custodian and Transfer Agent

First Data Investor Services Group, Inc. ("First Data"),
whose principal business address is 53 State Street, Boston,
Massachusetts 02109, serves as administrator for the Company.

<PAGE>

First Data is a wholly-owned subsidiary of First Data Corporation. The
Administrator generally assists the Company in all aspects of its administration
and operations, including the maintenance of financial records and fund
accounting.

First Data also serves as the Company's transfer agent and dividend
disbursing agent. Shareholder inquiries may be directed to First Data at P.O.
Box 5130, Westborough, Massachusetts 01581-5130.

As compensation for these services, the Administrator is entitled to
receive an annual fee of $30,000 per Fund. The Transfer Agent is entitled to
receive fees, based on the aggregate average daily net assets of the Funds,
computed daily and payable monthly, at the rate of [.02% of the first $2.8
billion of net assets, plus .015% of the next $2.2 billion of net assets, plus
.01% of all net assets in excess of $5 billion.] The Administrator and Transfer
Agent are also entitled to reimbursement for out-of-pocket expenses. The
Administrator has entered into a Sub-Administration Agreement with the
Distributor under which the Distributor provides certain administrative services
with respect to the Funds. The Administrator pays the Distributor a fee for
these services out of its own resources at no cost to the Funds.

Comerica Bank (the "Custodian"), whose principal business address is One
Detroit Center, 500 Woodward Avenue, Detroit, Michigan 48226, provides custodial
services to the Funds. As compensation for its services, the Custodian is
entitled to receive fees, based on the aggregate average daily net assets of the
Funds and certain other investment portfolios that are advised by the Advisor,
including the Underlying Funds, for which the custodian provides services,
computed daily and payable monthly at an annual rate of [.03% of the first $100
million of average daily net assets, .02% of the next $500 million of net assets
and .01% of net assets in excess of $600 million.] The Custodian also receives
certain transaction based fees.

For an additional description of the services performed by the
Administrator, Transfer Agent and Custodian, see the Statement of Additional
Information.

Distribution Services Arrangement

The Company has adopted Distribution and Service Plans with respect to
Class A and Class B shares of each Fund, pursuant to which each Fund uses its
assets to finance activities relating to the distribution of its shares to
investors and the provision of certain shareholder services (collectively, the
"Plans"). Under the Class A Plan, the Distributor is paid a service fee at an
annual rate of 0.25%

<PAGE>

of the value of average daily net assets of the Class A shares. Under the Class
B Plan, the Distributor is paid a service fee at an annual rate of 0.25%, and a
distribution fee at an annual rate of 0.75%, of the value of average daily net
assets of the Class B shares.

Under the Plans, the Distributor uses the service fees primarily to pay
ongoing trail commissions to securities dealers (which may include the
Distributor itself) and Service Organizations who provide shareholder services
for the Funds. These services include, among other things, processing new
shareholder account applications, preparing and transmitting to the Funds'
Transfer Agent computer processable tapes of all transactions by customers and
serving as the primary source of information to customers in answering questions
concerning the Funds and their transactions with the Funds.

The Class B Plan permits payments to be made by the Funds to the
Distributor for expenditures incurred by it in connection with the distribution
of Fund shares to investors and the provision of certain shareholder services,
including but not limited to the payment of compensation, including incentive
compensation, to Service Organizations to obtain various distribution related
services for the Funds. The Distributor is also authorized to engage in
advertising, the preparation and distribution of sales literature and other
promotional activities on behalf of the Funds. In addition, the Class B Plan
authorizes payments by the Funds of the cost of preparing, printing and
distributing Fund prospectuses and statements of additional information to
prospective investors and of implementing and operating the Plan. Distribution
expenses also include an allocation of overhead of the Distributor and accruals
for interest on the amount of distribution expenses that exceed distribution
fees and CDSCs received by the Distributor.

The Distributor expects to pay or arrange for payment of sales commissions
to dealers authorized to sell Class B shares, all or a part of which may be paid
at the time of sale. The Distributor will use its own funds (which may be
borrowed) to pay such commissions pending reimbursement pursuant to the Class B
Plan. Because the payment of distribution and service fees with respect to Class
B shares is subject to the 1.00% limitation described above and will therefore
be spread over a number of years, it may take the Distributor a number of years
to recoup sales commissions paid by it to dealers and other distribution and
service related expenses from the payments received by it from the Funds
pursuant to the Plan.

<PAGE>

The Plans may be terminated at any time. The Plans provide that amounts
paid as prescribed by the Plans at any time may not cause the limitation on such
payments established by the Plans to be exceeded. The amount of daily
compensation payable to the Distributor with respect to each day will be accrued
each day as a liability of the Funds and will accordingly reduce each Fund's net
assets upon such accrual.

Payments under the Plans are not tied exclusively to the distribution
and/or shareholder service expenses actually incurred by the Distributor and the
payments may exceed distribution and/or service expenses actually incurred. The
Company's Board of Directors evaluates the appropriateness of the Plans and
their payment terms on a continuous basis and in so doing will consider all
relevant factors, including expenses incurred by the Distributor and the amount
received under the Plans and the proceeds of the CDSCs with respect to the Class
B shares.

TAXES

Each Fund intends to qualify as a regulated investment company under
Subchapter M of the Code. Such qualification relieves the Fund of liability for
Federal income taxes to the extent its earnings are distributed in accordance
with the Code.

Qualification as a regulated investment company under the Code for any
taxable year requires, among other things, that each Fund distribute to its
shareholders an amount equal to at least 90% of its investment company taxable
income and 90% of its net tax-exempt interest income for such year. In general
each Fund's investment company income will be its taxable income (including
dividends, interest, and short-term capital gains) subject to certain
adjustments and excluding the excess of any net long-term capital gain for the
taxable year over the net short-term capital loss, if any, for such year. Each
Fund intends to distribute substantially all of its investment company taxable
income each taxable year. Such distributions will be taxable as ordinary income
to each Fund's shareholders who are not currently exempt from Federal income
taxes, whether such income is received in cash or reinvested in additional
shares. (Federal income taxes for distributions to an IRA or qualified
retirement plan are deferred under the Code if applicable requirements are met.)

Substantially all of each Fund's net realized long-term capital gains, if
any, will be distributed at least annually. The Funds will generally have no
Federal income tax liability with respect to such gains, and the distributions
will be taxable to shareholders who are not currently exempt from

<PAGE>

Federal income taxes as long-term capital gains, no matter how long the
shareholders have held their shares.

A taxable gain or loss may also be realized by a holder of shares in Fund
upon the redemption or transfer of shares depending upon the tax basis of the
shares and their price at the time of the transaction.

Dividends declared in October, November, or December of any year payable
to shareholders of record on a specified date in such months will be deemed to
have been received by shareholders and paid by the respective Fund on December
31 of such year if such dividends are actually paid during January of the
following year.

Before purchasing shares in the Funds, the impact of dividends or
distributions which are expected to be declared or have been declared, but not
paid, should be carefully considered. Any dividend or distribution declared
shortly after a purchase of such shares prior to the record date will have the
effect of reducing the per share net asset value by the per share amount of the
dividend or distribution. All or a portion of such dividend or distribution,
although in effect a return of capital, may be subject to tax.

On an annual basis, the Company will send written notices to record owners
of shares regarding the Federal tax status of distributions made by the Funds.
Since this is not an exhaustive discussion of applicable tax consequences and
since state and local taxes may be different from the Federal taxes described
above, investors may wish to contact their tax advisors concerning investments
in the Funds.

Since this is not an exhaustive discussion of applicable tax consequences,
investors may wish to contact their tax advisors concerning investments in the
Funds.

DESCRIPTION OF SHARES

The Funds operate as three series of the Company. The Company was
organized as a Maryland corporation on November 18, 1992 and is also registered
under the 1940 Act as an open-end management investment company. The Company's
Articles of Incorporation authorize the Directors to classify and reclassify any
unissued shares into one or more classes of shares. Pursuant to such authority
the Directors have authorized the issuance of shares of common stock
representing interests in the Equity Selection Fund, the Micro-Cap Equity Fund,
the Mid-Cap Growth Fund, the Multi-Season Growth Fund, the Real Estate Equity
Investment Fund, the Small-Cap Value Fund, the Value Fund, the NetNet Fund, the
International Bond Fund, the Short Term Treasury Fund, and the Money Market
Fund.

<PAGE>

The shares of the Funds are offered in three classes of common stock,
Class A, Class B and Class Y, $.001 par value per share. All shares of a Fund
represent interests in the same assets of the Fund and are identical in all
respects except that each class bears different service and distribution
expenses and may bear various class-specific expenses, and each class has
exclusive voting rights with respect to its service and/or distribution plan, if
any. Shares of the Funds issued are fully paid, non-assessable, fully
transferable and redeemable at the option of the holder. Investors may call the
Company at (800) 438-5789 for more information concerning other classes of
shares of the Funds. This Prospectus relates only to the Class A and Class B
shares of the Funds.

The Company's shareholders are entitled to one vote for each full share
held and proportionate fractional votes for fractional shares held, and will
vote in the aggregate and not by Fund, except where otherwise required by law or
when the Directors determine that the matter to be voted upon affects only the
interests of the shareholders of a particular Fund. In addition, shareholders of
a Fund will vote in the aggregate and not by class, except as otherwise
expressly required by law or when the Directors determine that the matter to be
voted upon affects only the interests of the holders of a particular class of
shares. The Company is not required and does not currently intend to hold annual
meetings of shareholders for the election of Board members except as required
under the 1940 Act. A meeting of shareholders will be called upon the written
request of at least 10% of the outstanding shares of the Company. To the extent
required by law, the Company will assist in shareholder communications in
connection with such a meeting. For further discussion of the voting rights of
shareholders, see "Additional Information Concerning Shares" in the Statement of
Additional Information.

Reports to Shareholders

The Funds will seek to eliminate duplicate mailings of prospectuses and
shareholders reports to accounts which have the same primary record owner, and
with respect to joint tenant accounts or tenant in common accounts, accounts
which have the same address. Additional copies of prospectuses and reports to
shareholders are available upon request by calling the Funds at (800) 438-5789.

PERFORMANCE

From time to time, the Funds may quote performance and yield data in
advertisements or in communications to shareholders. The total return of a class
of shares of a Fund may be calculated on an average annual total return basis,
and

<PAGE>

may also be calculated on an aggregate total return basis, for various periods.
Average annual total return reflects the average percentage change in value of
an investment in a class of shares in a Fund from the beginning date of the
measuring period to the end of the measuring period. Aggregate total return
reflects the total percentage change in value over the measuring period. Both
methods of calculating total return assume that dividends and capital gains
distributions made during the period are reinvested in the same class of shares.

Performance quotations for each class of shares will be calculated
separately. Quotations for total return for Class A shares will reflect the
maximum sales charge charged by a Fund with respect to Class A shares and
quotations of total return for Class B shares will reflect any applicable CDSC,
except that the Funds may also provide, in conjunction with such quotations,
additional quotations that do not reflect the maximum sales charge when the
quotations are being provided to investors who are subject to waived or reduced
sales charges as described in this Prospectus. Because these additional
quotations will not reflect the maximum sales charge payable by non-exempt
investors, these quotations will be higher than the performance quotation
otherwise computed.

Quotations of total return for shares will reflect the fees for certain
distribution and shareholder services as described in this prospectus.

The yield of a Fund is computed based on the net income of a Fund during a
30-day (or one month) period (which period will be identified in connection with
the particular yield quotation). More specifically, the Fund's yield is computed
by dividing the per share net income for the Fund during a 30- day (or
one-month) period by the maximum offering price per share on the last day of the
period and annualizing the result on a semi-annual basis.

Each Fund may compare the performance of its shares to the performance of
other mutual funds with similar investment objectives and to other relevant
indices or to rankings prepared by independent services or other financial or
industry publications that monitor the performance of mutual funds, including,
for example, Lipper Analytical Services, Inc., the Lehman Brothers
Government/Corporate Bond Index, a recognized unmanaged index of government and
corporate bonds, the S&P 500, an unmanaged index of a group of common stocks,
the Consumer Price Index, or the Dow Jones Industrial Average, an unmanaged
index of common stocks of 30 industrial companies listed on the New York Stock
Exchange. Performance and yield data as reported in national financial
publications such as Morningstar, Inc., Money Magazine, Forbes, Barron's, The
Wall Street Journal and The New York Times, or in publications of a

<PAGE>

local or regional nature, may also be used in comparing the
performance of a Fund.

Performance will fluctuate and any quotation of performance should not be
considered as representative of future performance of a Fund. Shareholders
should remember that performance is generally a function of the kind and quality
of the instruments held in a Fund, portfolio maturity, operating expenses, and
market conditions. Any fees charged by institutions directly to their customers'
accounts in connection with investments in a Fund will not be included in
calculations of yield and performance.

SHAREHOLDER ACCOUNT INFORMATION

Shareholders are encouraged to place purchase, exchange and redemption
orders through their brokers. Shareholders may also place such orders directly
through the Transfer Agent. See "How to Purchase Shares," "How to Redeem Shares"
and "How to Exchange Shares" for more information. The Transfer Agent for the
Funds is First Data Investor Services Group, Inc.

Investment by Mail

Send the completed Account Application Form (if initial purchase) or
letter stating Fund name, share class, shareholder's registered name and account
number (if subsequent purchase) with a check to:

First Data Investor Services Group, Inc.
The Munder Funds
P.O. Box 5130
Westborough, Massachusetts 01581-5130

Investment by Bank Wire

An investor opening a new account by bank wire should call the Fund at
(800) 438-5789 to obtain an account number. Within seven days of purchase such
an investor must send a completed Account Application Form containing the
investor's certified taxpayer identification number to First Data Investor
Services Group, Inc. at the address provided above under "Investment by Mail."
Wire instructions must state the Fund name, share class, the shareholder's
registered name and the shareholder account number. Bank wires should be sent
through the Federal Reserve Bank Wire System to:

<PAGE>

Boston Safe Deposit and Trust Company
Boston, MA
ABA#: 011001234
DDA#: 16-798-3
Account No.

(State Fund name, share class, shareholder's registered
name and shareholder account number)

Before writing any funds an investor must call the Fund at (800) 438-5789
to confirm the wire instructions.

Exchange by Telephone

Call your broker or the Fund at (800) 438-5789.

Class A and Class B shares may be exchanged only for shares of the same
class of another fund of the Company, The Munder Framlington Funds Trust or The
Munder Funds Trust, subject to any applicable sales charge.

Redemptions by Telephone

Call your broker or the Fund at (800) 438-5789.

Redemptions by Mail

Send complete instructions, including name of Fund, share class, amount of
redemption, shareholder's registered name, account number, and, if a certificate
has been issued, an endorsed share certificate, to:

First Data Investor Services Group, Inc.
The Munder Funds
P.O. Box 5130
Westborough, Massachusetts 01581-5130

Additional Questions

Shareholders with additional questions regarding purchase, exchange and
redemption procedures may call the Company at (800) 438-5789.

<PAGE>

THE MUNDER ASSET ALLOCATION FUNDS
480 Pierce Street
Birmingham, Michigan 48009
Telephone (800) 438-5789

PROSPECTUS

Class Y Shares

The Munder All Season Conservative Fund (the "Conservative Fund"), the
Munder All Season Moderate Fund (the "Moderate Fund"), and the Munder All Season
Aggressive Fund (the "Aggressive Fund") (each a "Fund," collectively the
"Funds") are three series of shares issued by The Munder Funds, Inc. (the
"Company"), an open-end management investment company. This Prospectus relates
only to Class Y shares of the Funds. The Funds are referred to as The Munder
Asset Allocation Funds. The Conservative Fund seeks to provide shareholders with
current income, with capital appreciation as a secondary objective. The Moderate
Fund seeks to provide shareholders with high total return through a combination
of capital appreciation and current income. The Aggressive Fund seeks to provide
shareholders with long-term capital appreciation. Each Fund seeks its investment
objective by investing in a variety of portfolios (the "Underlying Funds")
offered by the Company, The Munder Framlington Funds Trust, and The Munder Funds
Trust. There can be no assurance that a Fund's investment objective will be
achieved. The net asset value per share of the Funds will fluctuate in response
to changes in market conditions and other factors.

<PAGE>

- 2 -

<PAGE>

The date of this Prospectus is ____________, 1997

- 3 -

<PAGE>

TABLE OF CONTENTS

PAGE

EXPENSE TABLE..................................................... 5

THE FUNDS......................................................... 9

INVESTMENT OBJECTIVES AND POLICIES................................ 9

INVESTMENT OBJECTIVES AND POLICIES--UNDERLYING FUNDS.............. 12

EQUITY FUNDS...................................................... 12

FIXED INCOME FUNDS................................................ 17

INVESTMENT TECHNIQUES AND RISK
FACTORS--UNDERLYING FUNDS......................................... 18

INVESTMENT LIMITATIONS............................................ 32

PURCHASE AND REDEMPTION OF SHARES................................. 32

DIVIDENDS AND DISTRIBUTIONS....................................... 35

NET ASSET VALUE................................................... 36

MANAGEMENT........................................................ 37

TAXES............................................................. 41

DESCRIPTION OF SHARES............................................. 42

PERFORMANCE....................................................... 43

<PAGE>

EXPENSE TABLE

The following table sets forth certain costs and expenses that an investor
is expected to incur as a shareholder of Class Y shares of each of the Funds
based on estimated operating expenses for the current fiscal year. The table
does not include the costs and expenses of the Underlying Funds, which an
investor will also incur indirectly as a shareholder of Class Y shares of the
Funds.
<TABLE>
<S> <C> <C> <C>

Conservative Moderate Aggressive
Fund Fund Fund

Annual operating expenses
(as a percentage of average net assets)

Advisory Fees ...................... .35% .35% .35%

Other Expenses (after expense limitation) .20% .20% .20%

Total Fund Operating Expenses
(after expense limitation)........ .55% .55% .55%

</TABLE>

"Other expenses" in the above table include administrative fees, custodial
fees, legal and accounting fees, printing costs, registration fees, the cost of
regulatory compliance, the costs of maintaining each Fund's legal existence and
the costs involved in communicating with shareholders. The Advisor has
voluntarily agreed to limit each Fund's "other expenses" to .20% of its average
daily net assets until October __, 1997. If this temporary expense limitation
were not in place, each Fund's "other expenses" and "total fund operating
expenses" would be __% and __%, respectively, for Class A shares, and __% and
__%, respectively, for Class B shares, based on estimated expenses and projected
assets for the current fiscal year. See "MANAGEMENT" in this Prospectus for a
further description of the Funds' operating expenses and the nature of the
services for which the Funds are obligated to pay advisory fees. Any fees
charged by institutions directly to customer accounts for services provided in
connection with investments in shares of the Funds are in addition to the
expenses shown in the above Expense Table and the Example shown below.

<PAGE>

after any applicable expense reimbursements, for the Class Y shares of each of
the Underlying Funds for their respective current fiscal years. The
International Bond Fund did not commence operations until October 2, 1996, and
the NetNet Fund did not commence operations until August 19, 1996. As of the
date of this prospectus, the Equity Selection Fund, Micro-Cap Equity Fund and
Small-Cap Value Fund had not commenced operations, and as of the date of this
prospectus, the Framlington Funds had not commenced operations; therefore, the
Expense Ratio set forth below is based on estimated operating expenses for each
such fund. The Expense Ratio has been restated with respect to the Multi-Season
Growth Fund, Mid-Cap Growth Fund, Real Estate Equity Investment Fund and Value
Fund to reflect anticipated fees, waivers and/or expense reimbursements. The
Funds purchase only Class Y shares of the Underlying Funds. Class Y shares are
sold without an initial or contingent deferred sales charge to the Funds, as
well as to fiduciary and discretionary accounts of institutions, institutional
investors, directors, trustees, officers and employees of the Company, The
Munder Funds Trust, The Munder Framlington Funds Trust, the Advisor, the
Distributor and the Advisor's investment advisory clients and family members of
the Advisor's employees.
<TABLE>
<S> <C>

Expense Ratio

Multi-Season Growth Fund........................ 1.01%*

Mid-Cap Growth Fund............................. .95%+

Small Company Growth Fund ...................... .96%

Accelerating Growth Fund ....................... .95%

Value Fund...................................... .95%+

Small-Cap Value Fund............................ 1.00%

Micro-Cap Equity Fund........................... 1.25%

Equity Selection Fund........................... 1.00%

Growth & Income Fund............................ .96%

Real Estate Equity Investment Fund.............. 1.00%+

NetNet Fund..................................... 1.50%

International Equity Fund....................... 1.01%

Framlington International Growth Fund........... 1.30%

Framlington Emerging Markets Fund............... 1.55%

Framlington Healthcare Fund..................... 1.30%

<PAGE>

Intermediate Bond Fund.......................... .69%

Bond Fund....................................... .70%

U.S. Government Income Fund..................... .72%

International Bond Fund......................... .85%

Cash Investment Fund ........................... .53%

Money Market Fund............................... .62%

U.S. Treasury Money Market Fund................. .54%

* Reflects advisory fees after waiver. Without waiver, the Expense Ratio for The Multi-Season
Growth Fund would be 1.26%.

Based on the expenses for the Funds and the Underlying Funds shown above,
and assuming the neutral asset allocation for each Fund as set forth on page 10
below, the average weighted expense ratio for each Fund, expressed as a
percentage of each Fund's average daily net assets, is estimated to be as
follows:
<TABLE>
<S> <C>

Expense Ratio

Conservative Fund............................... 1.36%

Moderate Fund................................... 1.50%

Aggressive Fund................................. 1.61%

</TABLE>
Example

The following example demonstrates the projected dollar amount of total
cumulative expenses that would be incurred over various periods with respect to
a hypothetical investment in the Funds. These amounts are based on payment by
the Funds of operating expenses at the levels set forth in the above table, and
are also based on the following assumptions:

On the basis of these estimated expense levels, an investor would pay the
following expenses on a $1,000 investment, assuming (1) a hypothetical 5% annual
return, and 2) redemption at the end of the following time periods:

<PAGE>

Conservative Fund Moderate Fund Aggressive Fund

1 Year............... $14 $15 $16

3 Years.............. $43 $47 $51

</TABLE>

The foregoing Expense Table and Example are intended to assist investors
in understanding the various shareholder transaction expenses and operating
expenses of the Funds that investors bear both directly and indirectly.

THE EXAMPLE SHOWN ABOVE SHOULD NOT BE CONSIDERED A
REPRESENTATION OF FUTURE INVESTMENT RETURN OR OPERATING
EXPENSES. ACTUAL INVESTMENT RETURN AND OPERATING EXPENSES MAY
BE MORE OR LESS THAN THOSE SHOWN.

<PAGE>

THE FUNDS

INVESTMENT OBJECTIVES AND POLICIES

The Moderate Fund's investment objective is to provide shareholders with
high total return through a combination of capital appreciation and current
income. The Fund seeks to achieve its objective by diversifying its investments
in Underlying Funds that invest primarily in equity securities and fixed income
securities. The Fund may also hold assets in cash or money market securities.
This Fund offers investors greater potential for capital appreciation than does
the Conservative Fund by virtue of its larger investments in Underlying Funds
that invest primarily in equity securities, while also offering investors the
potential for investment income. The Moderate Fund is designed for investors who
seek capital appreciation in addition to income, and who are willing to bear the
risk of loss and share price fluctuation inherent in equity securities.

<PAGE>

The Funds will invest their assets in the following
Underlying Funds, within the ranges (expressed as a percentage
of each Fund's assets) indicated below:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>

Conservative Fund Moderate Fund Aggressive Fund

Minimum Maximum Minimum Maximum Minimum Maximum

Equity Funds

Multi-Season Growth Fund 0% 20% 0% 30% 0% 40%

Mid-Cap Growth Fund 0% 5% 0% 10% 0% 15%

Small Company Growth Fund 0% 10% 0% 20% 0% 30%

Accelerating Growth Fund 0% 5% 0% 10% 0% 15%

Value Fund 0% 20% 0% 30% 0% 40%

Small-Cap Value Fund 0% 10% 0% 20% 0% 30%

Micro-Cap Equity Fund 0% 5% 0% 5% 0% 5%

Equity Selection Fund 0% 10% 0% 20% 0% 30%

Growth & Income Fund 0% 10% 0% 15% 0% 20%

Real Estate Equity Investment 0% 10% 0% 20% 0% 25%
Fund

NetNet Fund 0% 5% 0% 5% 0% 5%

International Equity Fund 0% 5% 0% 10% 0% 15%

Framlington International 0% 5% 0% 10% 0% 15%
Growth Fund

Framlington Emerging Markets 0% 5% 0% 10% 0% 15%
Fund

Framlington Healthcare Fund 0% 5% 0% 5% 0% 10%

Fixed Income Funds

Intermediate Bond Fund 0% 80% 0% 50% 0% 30%

Bond Fund 0% 80% 0% 50% 0% 30%

U.S. Government Income Fund 0% 60% 0% 40% 0% 20%

International Bond Fund 0% 30% 0% 20% 0% 10%

Money Market Funds

Cash Investment Fund 0% 10% 0% 10% 0% 10%

<PAGE>

Money Market Fund 0% 10% 0% 10% 0% 10%

U.S. Treasury Money Market 0% 10% 0% 10% 0% 10%
Fund

</TABLE>

For the purpose of determining each Fund's compliance with these
percentage limitations, the Company will determine the value of a Fund's assets
at the time of investment.

Each Fund's neutral asset allocation is expected to be as follows:
<TABLE>
<S> <C> <C> <C>

Conservative Fund Moderate Fund Aggressive Fund

Equity Funds 25% 60% 85%

Fixed Income Funds 70% 35% 15%

Money Market Funds 5% 5% 0%
and Cash

</TABLE>

<PAGE>

INVESTMENT OBJECTIVES AND POLICIES--UNDERLYING FUNDS

EQUITY FUNDS

Accelerating Growth Fund

Equity Selection Fund

The investment objective of the Equity Selection Fund is to provide
shareholders with long-term capital appreciation. The fund seeks to achieve this
objective by investing in equity securities that a dedicated research team
believes to be of high quality and that, as determined through both fundamental
and technical analysis, are undervalued compared to equity securities of other
companies in the same industry. The fund generally will invest in issuers that
have market capitalizations of at least $3 billion at the time of purchase. The
fund will be diversified by industry with proportionate weightings approximately
the same as those of the Standard & Poor's 500 Composite Stock Price Index (the
"S&P 500").

Growth & Income Fund

<PAGE>

capital appreciation are considered favorable by the Advisor. In general, the
Advisor selects large, well-known companies that it believes have above-average
and secure dividends. The fund will seek to produce a current yield greater than
the S&P 500.

International Equity Fund

Micro-Cap Equity Fund

Mid-Cap Growth Fund

Multi-Season Growth Fund

<PAGE>

valuation and relative price momentum. The fund may invest up to 20% of the
value of its total assets in equity securities of foreign issuers, including
companies domiciled in developing countries.

Real Estate Equity Investment Fund

Small-Cap Value Fund

Small Company Growth Fund

The investment objective of the Small Company Growth Fund is to provide
long-term capital appreciation. The fund pursues its objective by investing
primarily in equity

<PAGE>

securities such as common stocks and instruments convertible or exchangeable
into common stocks.

Value Fund

Framlington International Growth Fund

Framlington Emerging Markets Fund

<PAGE>

commonly referred to as the World Bank) or the International Finance
Corporation, as well as countries that are classified by the United Nations or
otherwise regarded by their authorities as emerging.

Framlington Healthcare Fund

NetNet Fund

The investment objective of the NetNet Fund is to provide shareholders
with long term capital appreciation. The fund seeks to achieve this objective by
investing primarily in companies engaged in Internet and Intranet related
businesses. The fund will invest primarily in equity securities of companies
listed on U.S. securities exchanges or NASDAQ which are engaged in the research,
design, development, manufacturing or engaged to a significant extent in the
business of distributing products, processes or services for use with Internet
and Intranet related businesses. The Internet is a world-wide network of
computers designed to permit users to share information and transfer data
quickly and easily. The World Wide Web ("WWW") which is a means of graphically
interfacing with the Internet, is a hyper-text based publishing medium
containing text, graphics, interactive feedback mechanisms and links within WWW
documents and to other WWW documents. An Intranet is the application of WWW
tools and concepts to a company's internal documents and databases. Internet and
Intranet related businesses include companies engaged in the research, design,
development, manufacturing or distribution of servers, routers, search engines,
bridges and switches, browsers, network applications, agent software, modems,
carriers, firewall and security, e- mail, electronic commerce, video and
publishing for use on the Internet/Intranet.

<PAGE>

FIXED INCOME FUNDS

Each of the Bond Fund, Intermediate Bond Fund, and U.S. Government Income
Fund invests substantially all of its assets in debt obligations such as bonds
and debentures, obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities ("U.S. Government obligations"), debt obligations
of domestic and foreign corporations, debt obligations of foreign governments
and their political subdivisions, asset-backed securities and various
mortgage-related securities. These funds may purchase obligations issued by or
on behalf of states, territories and possessions of the United States, the
District of Columbia and their political subdivisions, agencies,
instrumentalities and authorities.

International Bond Fund

<PAGE>

Inter-American Development Bank or the World Bank); corporate debt securities;
bank or bank holding company debt securities and other debt securities including
those convertible into foreign stock. The fund's dollar-weighted average
maturity will generally be between three and fifteen years except during
temporary defensive periods, and will be adjusted by the Advisor according to
market conditions.

MONEY MARKET FUNDS

Cash Investment Fund, Money Market Fund and U.S. Treasury
Money Market Fund

INVESTMENT TECHNIQUES AND RISK
FACTORS--UNDERLYING FUNDS

<PAGE>

In addition, each Equity Fund may invest in convertible bonds and
convertible preferred stock. A convertible security is a security that may be
converted either at a stated price or rate within a specified period of time
into shares of common stock. By investing in convertible securities, a fund
seeks the opportunity, through the conversion feature, to participate in the
capital appreciation of the common stock into which the securities are
convertible, while earning higher current income than is available from the
common stock. An Equity Fund may acquire convertible securities that are rated
below investment grade by Standard & Poor's Ratings Service, a division of
McGraw Hill Companies Inc. ("S&P") or Moody's Investors Service, Inc.
("Moody's").

<PAGE>

on, such securities. Particular risks include (a) the sensitivity of such
securities to interest rate and economic changes, (b) the lower degree of
protection of principal and interest payments, (c) the relatively low trading
market liquidity for the securities, (d) the impact that legislation may have on
the market for these securities (and, in turn, on a fund's net asset value) and
(e) the creditworthiness of the issuers of such securities. During an economic
downturn or substantial period of rising interest rates, highly leveraged
issuers may experience financial stress which would negatively affect their
ability to meet their principal and interest payment obligations, to meet
projected business goals and to obtain additional financing. An economic
downturn could also disrupt the market for lower-rated convertible securities
and negatively affect the value of outstanding securities and the ability of the
issuers to repay principal and interest. If the issuer of a convertible security
held by a fund defaulted, the fund could incur additional expenses to seek
recovery. Adverse publicity and investor perceptions, whether or not they are
based on fundamental analysis, could also decrease the values and liquidity of
lower-rated convertible securities held by a fund, especially in a thinly traded
market.

Foreign Securities. Each Equity Fund (except the Real Estate Equity
Investment Fund), each Fixed Income Fund (i.e., Intermediate Bond Fund, Bond
Fund, U.S. Government Income Fund and International Bond Fund), and the Cash
Investment Fund may invest in the securities of foreign issuers. There are
certain risks and costs involved in investing in securities of companies and
governments of foreign nations, which are in addition to the usual risks
inherent in U.S. investments. These include differences in accounting, auditing
and financial reporting standards; different disclosure laws, which may result
in less publicly available information about foreign issuers than U.S. issuers;
generally higher markups on foreign portfolio transactions; the possibility of
nationalization, expropriation or confiscatory taxation; adverse changes in
investment or exchange control regulations (which may include suspension of the
ability to transfer currency from a country); political instability; less
government regulation of securities markets, brokers and issuers; possible
difficulty in obtaining and enforcing judgments in foreign courts; and
imposition of restrictions on foreign investments. Additionally, foreign
securities and interest payable on those securities may be subject to foreign
taxes, including taxes withheld from payments on those securities. Foreign
securities often trade with less frequency and volume than domestic securities
and therefore may exhibit greater price volatility. Additional costs associated
with an investment in foreign securities may include higher custodial fees than
apply to U.S. custodial arrangements, and transaction costs of foreign currency

<PAGE>

conversions. Changes in foreign exchange rates will also affect the value of
securities denominated or quoted in currencies other than the U.S. dollar.
Additionally, foreign banks and foreign branches of domestic banks may be
subject to less stringent reserve requirements, and to different accounting,
auditing and recordkeeping requirements.

The Framlington Emerging Markets Fund seeks its investment objective by
investing primarily in equity securities of issuers in emerging market
countries. The considerations discussed in the preceding paragraph generally are
more of a concern in emerging market countries, where the possibility of
political instability (including revolution) and dependence on foreign economic
assistance may be greater than in developed countries. Investments in companies
domiciled in emerging market countries therefore may be subject to potentially
higher risks than investments in developed countries.

Investments in foreign securities may be in the form of ADRs, EDRs, or
similar securities. These securities may not be denominated in the same currency
as the securities they represent. ADRs are receipts typically issued by a United
States bank or trust company evidencing ownership of the underlying foreign
securities. EDRs are receipts issued by a European financial institution
evidencing a similar arrangement. Generally, ADRs, in registered form, are
designed for use in United States securities markets, and EDRs, in bearer form,
are designed for use in the European securities markets. The Mid-Cap Growth Fund
and Multi-Season Growth Fund typically will only purchase foreign securities

<PAGE>

which are represented by sponsored or unsponsored ADRs listed on a domestic
securities exchange or included in the NASDAQ National Market System. Ownership
of unsponsored ADRs may not entitle a fund to financial or other reports from
the issuer, to which it would be entitled as the owner of sponsored ADRs.
Interest or dividend payments on such securities may be subject to foreign
withholding taxes.

<PAGE>

contract or option thereon, the fund will create a segregated account of liquid
assets or will otherwise cover its position in accordance with applicable
requirements of the SEC.

The use of these derivative instruments exposes a fund to additional risks
and transaction costs. Risks inherent in the use of futures and options
transactions include: (1) the risk that interest rates, securities prices and
currency markets will not move in the direction that a portfolio manager
anticipates; (2) imperfect correlation between the price of derivative
instruments and movements in the prices of the securities, interest rates or
currencies being hedged; (3) the fact that the skills needed to use these
strategies are different than those needed to select portfolio securities; (4)
inability to close out certain hedged positions to avoid adverse tax
consequences; (5) the possible absence of a liquid secondary market for any
particular instrument and possible exchange-imposed price fluctuation limits,
either of which may make it difficult or impossible to close out a position when
desired; (6) leverage risk, that is, the risk that adverse price movements in an
instrument can result in a loss substantially greater than a fund's initial
investment in that instrument (in some cases, the potential loss is unlimited);
and (7) particularly in the case of privately-negotiated instruments, the risk
that the counterparty will fail to perform its obligations, which could leave a
fund worse off than if it had not entered into the position.

<PAGE>

dollar-denominated commercial paper of a foreign issuer. Each Fixed Income Fund
will purchase only those securities which are considered to be investment grade
or better (within the four highest rating categories of S&P or Moody's) or, if
unrated, of comparable quality. After purchase by a fund, a security may cease
to be rated or its rating may be reduced below the minimum required for purchase
by a fund. Neither event will require the fund to sell such security. However,
the Advisor will reassess promptly whether the security presents minimal credit
risks and determine whether continuing to hold the security is in the best
interests of the fund. Descriptions of each rating category are included as
Appendix A to the Statement of Additional Information.

<PAGE>

be difficult to predict precisely. To the extent that a fund purchases
mortgage-related or mortgage-backed securities at a premium, mortgage
prepayments (which may be made at any time without penalty) may result in some
loss of the fund's principal investment to the extent of premium paid.

The use of swaps, caps and floors is a highly specialized activity which
involves investment techniques and risks different from those associated with
ordinary portfolio securities transactions. If the Advisor's forecast of market
values, interest rates, currency rates of exchange and other applicable factors
is incorrect, the investment performance of the International Bond Fund will
diminish compared with the performance that could have been achieved if these
investment techniques were not used. Moreover, even if the Advisor's forecasts
were correct, a swap position may correlate imperfectly with the asset or
liability being hedged. In addition, in the event of a default by the other
party to the transaction, the International Bond Fund might incur a loss.

<PAGE>

Export-Import Bank of the United States, are supported by the right of the
issuer to borrow from the U.S. Treasury; and still others, such as those of the
Student Loan Marketing Association, are supported only by the credit of the
agency or instrumentality issuing the obligation. No assurance can be given that
the U.S. Government would provide financial support to U.S. Government-sponsored
instrumentalities if it is not obligated to do so by law.

Repurchase Agreements. Each Underlying Fund may agree to purchase
securities from financial institutions subject to the seller's agreement to
repurchase them at an agreed-upon time and price ("repurchase agreements"). The
Conservative Fund, the Moderate Fund and the Aggressive Fund may also invest
directly in Repurchase Agreements. With respect to the Cash Investment Fund,
Money Market Fund and U.S. Treasury Money Market Fund (collectively, the "Money
Market Funds"), the securities held subject to a repurchase agreement may have
stated maturities exceeding 397 days, provided the repurchase agreement itself
matures in 397 days or less. The financial institutions with which a fund may
enter into repurchase agreements include member banks of the Federal Reserve
System, any foreign bank or any domestic or foreign broker/dealer which is
recognized as a reporting government securities dealer. The Advisor (the
Sub-Advisor with respect to the Framlington Funds) will review and continuously
monitor the creditworthiness of the seller under a repurchase agreement, and
will require the seller to maintain liquid assets in a segregated account in an
amount that is greater than the repurchase price. Default by or bankruptcy of
the seller would, however, expose a fund to possible loss because of

<PAGE>

adverse market action or delays in connection with the
disposition of the underlying obligations.

<PAGE>

commitments. The funds do not intend to engage in when-issued purchases and
forward commitments for speculative purposes but only in furtherance of their
investment objectives.

<PAGE>

Equity Fund, Framlington International Growth Fund, and Framlington Emerging
Markets Fund may purchase shares of investment companies investing primarily in
foreign securities, including so called "country funds." Securities of other
investment companies will be acquired within limits prescribed by the 1940 Act.
These limitations, among other matters, restrict investments in securities of
other investment companies to no more than 10% of the value of a fund's total
assets, with no more than 5% invested in the securities of any one investment
company. As a shareholder of another investment company, an Underlying Fund
would bear, along with other shareholders, its pro rata portion of the other
investment company's expenses, including advisory fees. These expenses would be
in addition to the expenses each Underlying Fund bears directly in connection
with its own operations.

Diversification. The Underlying Funds, other than the International Bond
Fund, are each classified as a diversified investment company under the 1940
Act; the International Bond Fund is classified as non-diversified. Investment
return on a non-diversified portfolio typically is dependent upon the
performance of a smaller number of securities relative to the number held in a
diversified portfolio. Consequently, the change in value of any one security may
affect the overall value of a non-diversified portfolio more than it would a
diversified portfolio, and thereby subject the market-based

<PAGE>

net asset value per share of the non-diversified portfolio to greater
fluctuations. In addition, a non-diversified portfolio may be more susceptible
to economic, political and regulatory developments than a diversified investment
portfolio with similar objectives. All Underlying Funds, including the
International Bond Fund, will, however, comply with the diversification
requirements imposed by the Internal Revenue Code of 1986, as amended (the
"Code").

<PAGE>

portfolio securities while borrowings exceed 5% of the fund's
total assets.

<PAGE>

INVESTMENT LIMITATIONS

Each Fund's investment objective and policies may be changed by the
Company's Board of Directors without shareholder approval. No assurance can be
given that the Funds will achieve their respective investment objectives.

PURCHASE AND REDEMPTION OF SHARES

Shares of the Funds are sold on a continuous basis for the Funds by the
Distributor. The Distributor is a registered broker/dealer with principal
offices at 60 State Street, Boston, Massachusetts 02109.

Purchase of Shares

Class Y shares of the Funds are sold without an initial or contingent
deferred sales charge to fiduciary and discretionary accounts of institutions,
"institutional investors," directors, trustees, officers and employees of the
Company, The Munder Funds Trust, The Munder Framlington Funds Trust, the
Advisor, the Distributor and the Advisor's investment advisory clients and
family members of the Advisor's employees. "Institutional investors" may include
financial institutions (such as banks, savings institutions and credit unions);
pension and profit sharing and employee

<PAGE>

benefit plans and trusts; insurance companies; investment companies; investment
advisers; and broker-dealers acting for their own accounts or for the accounts
of such institutional investors. A minimum initial investment of $500,000 for
Class Y shares of a Fund is required for fiduciary and discretionary accounts of
institutions and institutional investors.

Shares of the Funds are sold at net asset value per share next determined
on that day after receipt of a purchase order. Purchase orders by an institution
for shares must be received by the Distributor or the Funds' Transfer Agent
before the close of regular trading hours (currently 4:00 p.m. New York City
time) on the New York Stock Exchange (the "Exchange"), on any Business Day (as
defined below). Payment for such shares must be made by institutions in Federal
funds or other funds immediately available to the Custodian no later than 4:00
p.m. (New York City time) on the next Business Day following the receipt of the
purchase order.

It is the responsibility of the institution to transmit orders for
purchases by their customers and to deliver required funds on a timely basis. If
funds are not received within the periods described above, the order will be
canceled, notice thereof will be given, and the institution will be responsible
for any loss to the Fund or its shareholders. Institutions may charge certain
account fees depending on the type of account the investor has established with
the institution. In addition, an institution may receive fees from the Funds
with respect to the investments of its customers as described below under
"Management."

Purchases may be effected on days the Exchange is open for business (a
"Business Day"). The Company reserves the right to reject any purchase order.
Payment for orders which are not received or accepted will be returned after
prompt inquiry. The issuance of shares is recorded on the books of the Funds,
and share certificates are not issued unless expressly requested in writing.
Certificates are not issued for fractional shares.

Neither the Company, the Distributor nor the Transfer Agent will be
responsible for the authenticity of telephone instructions for the purchase or
redemption of shares where such instructions are reasonably believed to be
genuine. Accordingly, the Institution will bear the risk of loss. The Company
will attempt to confirm that telephone instructions are genuine and will use
such procedures as are considered reasonable. To the extent that the Company
fails to use reasonable procedures to verify the genuineness of telephone
instructions, it or its service providers may be liable for such instructions
that prove to be fraudulent or unauthorized.

<PAGE>

Automatic Investment Plan ("AIP")

An investor in Class Y shares of a Fund may arrange for periodic
investments in a Fund through automatic deductions from a checking or savings
account by completing the AIP Application Form. The minimum pre-authorized
investment is $50.

Redemption of Shares

Redemption orders are effected at the net asset value per share next
determined after receipt of the order by the Transfer Agent. Shares held by an
institution on behalf of its customers must be redeemed in accordance with
instructions and limitations pertaining to the account at the institution. The
Funds intend to pay cash for all shares redeemed, but in unusual circumstances
may make payment wholly or partly in portfolio securities at their then market
value equal to the redemption price. In such cases, an investor may incur
brokerage costs in converting such securities to cash.

Share balances may be redeemed pursuant to arrangements between
institutions and investors. It is the responsibility of an institution to
transmit redemption orders to the Funds' Transfer Agent and to credit its
Customers' accounts with the redemption proceeds on a timely basis. If the
Transfer Agent receives a redemption order prior to 4:00 p.m. (New York City
time), the redemption proceeds for shares of a Fund are normally wired to the
redeeming institution the following Business Day. The Funds reserve the right to
delay the wiring of redemption proceeds for up to seven days after they receive
a redemption order if, in the judgment of the Advisor, an earlier payment could
adversely affect the Fund.

Exchanges

Class Y shares of a Fund may be exchanged for Class Y shares of other
funds of the Company, The Munder Funds Trust, or the Munder Framlington Funds
Trust based on their respective net asset values, without the imposition of any
sales charges.

Any shares involved in an exchange must satisfy the requirements relating
to the minimum initial investment in an investment portfolio of the Company, The
Munder Funds Trust, or the Munder Framlington Funds Trust and the shares
involved must be legally available for sale in the state of the investor's
residence. For Federal income tax purposes, a share exchange is a taxable event
and, accordingly, a capital gain or loss may be realized. Before making an
exchange request, shareholders should consult a tax or other financial advisor
and should consider the investment objective, policies

<PAGE>

and restrictions of the investment portfolio into which the shareholder is
making an exchange, as set forth in the applicable prospectus. An investor who
is considering an exchange may obtain a copy of the prospectus for any
investment portfolio of the Company, The Munder Funds Trust, or the Munder
Framlington Funds Trust by contacting his or her broker or a Fund at (800)
438-5789. Certain brokers may charge a fee for handling exchanges.

The Company reserves the right to modify or terminate the exchange
privilege at any time. Notice will be given to shareholders of any material
modification or termination except where notice is not required.

DIVIDENDS AND DISTRIBUTIONS

The Funds expect to pay dividends and distributions from the net income
and capital gains, if any, earned on investments held by the Funds. The net
income of each Fund is declared as a dividend and paid at least annually.

The Funds' net realized capital gains (including net short-term capital
gains), if any, will be distributed at least annually. Dividends and capital
gains are paid in the form of additional shares of the Funds unless a
shareholder requests that dividends and capital gains be paid in cash. In the
absence of this request on the Account Application Form or in a subsequent
request, each purchase of shares is made on the understanding that the Funds'
Transfer Agent is automatically appointed to receive the dividends upon all
shares in the shareholder's account and to reinvest them in full and fractional
shares of the same class of the appropriate Fund at the net asset value in
effect at the close of business on the reinvestment date. Dividends are
automatically paid in cash (along with any redemption proceeds) not later than
seven business days after a shareholder closes an account with a Fund.

<PAGE>

expense of using independent pricing services; and other expenses which are not
assumed by the Administrator. Any general expenses of the Company that are not
readily identifiable as belonging to a particular fund of the Company are
allocated among all funds of the Company by or under the direction of the Board
of Directors in a manner that the Board determines to be fair and equitable.
Except as noted in this Prospectus and the Statement of Additional Information,
the Funds' service contractors bear expenses in connection with the performance
of their services, and the Funds bear the expenses incurred in their respective
operations. The Advisor, Administrator, Custodian and Transfer Agent may
voluntarily waive all or a portion of their respective fees from time to time.

NET ASSET VALUE

Net asset value for Class Y shares of a Fund is calculated by dividing the
value of all securities and other assets belonging to the Fund allocable to that
class, less the liabilities charged to that class, by the number of outstanding
shares of that class.

The Company does not accept purchase and redemption orders on days on
which the New York Stock Exchange is closed.

<PAGE>

The New York Stock Exchange is currently scheduled to be closed on New Year's
Day, Presidents' Day, Good Friday, Memorial Day (observed), Independence Day,
Labor Day, Thanksgiving and Christmas, and on the preceding Friday or subsequent
Monday when one of these holidays falls on a Saturday or Sunday, respectively.

MANAGEMENT

Board of Directors

The Company is managed under the direction of its Board of Directors. The
Statement of Additional Information contains the name and background information
of each Director.

Investment Advisor

Munder Capital Management also serves as investment advisor for each of
the Underlying Funds, and receives investment advisory fees for such service
from those Funds.

<PAGE>

For the advisory services provided and expenses assumed by it, the Advisor has
agreed to a fee from each Underlying Fund, computed daily and payable monthly on
a separate Fund-by-Fund basis, at an annual rate of 1.25% of the average daily
net assets of the Framlington Emerging Market Fund; 1.00% of the first $500
million of average daily net assets and .75% of average daily net assets in
excess of $500 million of the Multi-Season Growth Fund; 1.00% of average daily
net assets up to $250 million and .75% of average daily net assets in excess of
$250 million for the Framlington International Growth Fund and the Framlington
Healthcare Fund; 1.00% of average daily net assets of the Micro-Cap Equity Fund
and NetNet Fund; .75% of average daily net assets of each of the Accelerating
Growth Fund, Equity Selection Fund, Growth & Income Fund, International Equity
Fund, Small-Cap Value Fund and Small Company Growth Fund; .74% of average daily
net assets of each of the Mid-Cap Growth Fund, Real Estate Equity Investment
Fund and Value Fund; .50% of average daily net assets of each of the Bond Fund,
Intermediate Bond Fund, International Bond Fund and U.S. Government Income Fund;
.40% of average daily net assets of the Money Market Fund; and .35% of average
daily net assets of each of the Cash Investment Fund and U.S. Treasury Money
Market Fund.

Each Fund, as a shareholder in an Underlying Fund, will indirectly bear
its proportionate share of any investment advisory fees and other expenses paid
by an Underlying Fund. Information regarding the expense ratios of the
Underlying Funds is included in this Prospectus under the heading "Expense
Table." See "Investment Advisory and Other Service Arrangements" in the
Statement of Additional Information for information regarding the amounts paid
to the Advisor by the Underlying Funds during their most recent fiscal periods.

<PAGE>

Sub-Advisor

Pursuant to a sub-advisory agreement with the Advisor, the Sub-Advisor
provides sub-advisory services to the Framlington Funds. Subject to the
supervision of the Advisor, the Sub-Advisor is responsible for the management of
each Framlington Fund's portfolio, including all decisions regarding purchases
and sales of portfolio securities by the Funds. The Sub-Advisor is also
responsible for arranging the execution of all portfolio management decisions,
including the selection of brokers to execute trades and the negotiation of
brokerage commissions in connection therewith. For its services with regard to
the Framlington International Fund and the Framlington Healthcare Fund, the
Advisor pays the Sub- Advisor a monthly fee equal on an annual basis to 0.50% of
each Fund's average daily net assets up to $250 million, reduced to .375% of
each Fund's average daily net assets in excess of $250 million. For its services
with regard to the Framlington Emerging Markets Fund, the Advisor pays the Sub-
Advisor a monthly fee equal on an annual basis to .625% of the Fund's average
daily net assets.

Portfolio Managers -- The Funds

For a description of the portfolio managers primarily responsible for the
management of the Underlying Funds, see "INVESTMENT ADVISORY AND OTHER SERVICE
ARRANGEMENTS-PORTFOLIO

<PAGE>

MANAGERS-THE UNDERLYING FUNDS" in the Statement of Additional Information.

Administrator, Custodian and Transfer Agent

First Data Investor Services Group, Inc. ("First Data"), whose principal
business address is 53 State Street, Boston, Massachusetts 02109, serves as
administrator for the Company. First Data is a wholly-owned subsidiary of First
Data Corporation. The Administrator generally assists the Company in all aspects
of its administration and operations, including the maintenance of financial
records and fund accounting.

First Data also serves as the Company's transfer agent and dividend
disbursing agent. Shareholder inquiries may be directed to First Data at P.O.
Box 5130, Westborough, Massachusetts 01581-5130.

For an additional description of the services performed by the
Administrator, Transfer Agent and Custodian, see the Statement of Additional
Information.

<PAGE>

TAXES

<PAGE>

have the effect of reducing the per share net asset value by the per share
amount of the dividend or distribution. All or a portion of such dividend or
distribution, although in effect a return of capital, may be subject to tax.

Since this is not an exhaustive discussion of applicable tax consequences,
investors may wish to contact their tax advisors concerning investments in the
Funds.

DESCRIPTION OF SHARES

<PAGE>

only the interests of the shareholders of a particular Fund. In addition,
shareholders of a Fund will vote in the aggregate and not by class, except as
otherwise expressly required by law or when the Directors determine that the
matter to be voted upon affects only the interests of the holders of a
particular class of shares. The Company is not required and does not currently
intend to hold annual meetings of shareholders for the election of Board members
except as required under the 1940 Act. A meeting of shareholders will be called
upon the written request of at least 10% of the outstanding shares of the
Company. To the extent required by law, the Company will assist in shareholder
communications in connection with such a meeting. For further discussion of the
voting rights of shareholders, see "Additional Information Concerning Shares" in
the Statement of Additional Information.

Reports to Shareholders

PERFORMANCE

From time to time, the Funds may quote performance and yield data in
advertisements or in communications to shareholders. The total return of Class Y
shares of a Fund may be calculated on an average annual total return basis, and
may also be calculated on an aggregate total return basis, for various periods.
Average annual total return reflects the average percentage change in value of
an investment in a class of shares in a Fund from the beginning date of the
measuring period to the end of the measuring period. Aggregate total return
reflects the total percentage change in value over the measuring period. Both
methods of calculating total return assume that dividends and capital gains
distributions made during the period are reinvested. Performance quotations for
each class of shares will be calculated separately.

The yield of Class Y shares of a Fund is computed based on the net income
of the Fund during a 30-day (or one month) period (which period will be
identified in connection with the particular yield quotation). More
specifically, the Fund's yield is computed by dividing the per share net income
for the Fund during a 30-day (or one-month) period by the maximum offering price
per share on the last day of the period and annualizing the result on a
semi-annual basis.

<PAGE>

Each Fund may compare the performance of its shares to the performance of
other mutual funds with similar investment objectives and to other relevant
indices or to rankings prepared by independent services or other financial or
industry publications that monitor the performance of mutual funds, including,
for example, Lipper Analytical Services, Inc., the Lehman Brothers
Government/Corporate Bond Index, a recognized unmanaged index of government and
corporate bonds, the S&P 500 Index, an unmanaged index of a group of common
stocks, the Consumer Price Index, or the Dow Jones Industrial Average, an
unmanaged index of common stocks of 30 industrial companies listed on the New
York Stock Exchange. Performance and yield data as reported in national
financial publications such as Morningstar, Inc., Money Magazine, Forbes,
Barron's, The Wall Street Journal and The New York Times, or in publications of
a local or regional nature, may also be used in comparing the performance of a
Fund.

<PAGE>

THE MUNDER ASSET ALLOCATION FUNDS
480 Pierce Street
Birmingham, Michigan 48009
Telephone (800) 438-5789

STATEMENT OF ADDITIONAL INFORMATION

This Statement of Additional Information, which has been filed with the
Securities and Exchange Commission (the "SEC"), provides supplementary
information pertaining to the Class A, Class B, and Class Y shares representing
interests in the Munder All Season Conservative Fund (the "Conservative Fund"),
the Munder All Season Moderate Fund (the "Moderate Fund"), and the Munder All
Season Aggressive Fund (the "Aggressive Fund") (each a "Fund," collectively the
"Funds"). The Funds are three series of shares issued by The Munder Funds, Inc.
(the "Company"), an open-end management investment company. This Statement of
Additional Information relates only to the Funds, which are referred to as The
Munder Asset Allocation Funds. Each Fund seeks its investment objective by
investing in a portfolio of mutual funds (the "Underlying Funds") offered by the
Company, The Munder Framlington Funds Trust ("Framlington"), and The Munder
Funds Trust (the "Trust"). This Statement of Additional Information is not a
prospectus, and should be read only in conjunction with the Funds' Prospectus
dated __________ __, 1997. The contents of this Statement of Additional
Information are incorporated by reference in the Prospectus in their entirety. A
copy of the Prospectus may be obtained through Funds Distributor, Inc. (the
"Distributor"), or by calling (800) 438-5789. This Statement of Additional
Information is dated _______ __, 1997.

Shares of the Funds and The Underlying Funds are not deposits or obligations of,
or guaranteed or endorsed by any bank, and are not insured or guaranteed by the
Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other
agency. An investment in the Funds involves investment risks, including the
possible loss of principal.

<PAGE>

TABLE OF CONTENTS
Page

GENERAL................................................................. 3

INVESTMENT OBJECTIVES AND POLICIES...................................... 3

FUND INVESTMENTS........................................................ 24

INVESTMENT LIMITATIONS.................................................. 53

DIRECTORS AND OFFICERS.................................................. 54

INVESTMENT ADVISORY AND OTHER SERVICE ARRANGEMENTS...................... 60

PORTFOLIO TRANSACTIONS.................................................. 69

PURCHASE AND REDEMPTION INFORMATION..................................... 72

NET ASSET VALUE......................................................... 75

PERFORMANCE INFORMATION................................................. 75

TAXES................................................................... 78

ADDITIONAL INFORMATION CONCERNING SHARES................................ 84

MISCELLANEOUS........................................................... 85

REGISTRATION STATEMENT.................................................. 87

Appendix A...................................................A-1

Appendix B...................................................B-1

No person has been authorized to give any information or to make any
representations not contained in this Statement of Additional Information or in
the Prospectus in connection with the offering made by the Prospectus and, if
given or made, such information or representations must not be relied upon as
having been authorized by the Funds or the Distributor. The Prospectus does not
constitute an offering by the Funds or by the Distributor in any jurisdiction in
which such offering may not lawfully be made.

- 2 -

<PAGE>

GENERAL

The Company was organized as a Maryland corporation on November 18, 1992
and is registered under the Investment Company Act of 1940 as an open-end
management investment company. The Funds operate as three series of shares
issued by the Company. The Company's principal office is located at 480 Pierce
Street, Birmingham, Michigan 48009 and its telephone number is (800) 438-5789.

As stated in the Prospectus, the investment advisor of each Fund, and each
of the Underlying Funds, is Munder Capital Management (the "Advisor"). The
principal partners of the Advisor are Old MCM, Inc., Munder Group LLC,
Woodbridge Capital Management, Inc. and WAM Holdings, Inc. ("WAM"). Mr. Lee P.
Munder, the Advisor's Chief Executive Officer, indirectly owns or controls a
majority of the partnership interests of the Advisor. Framlington Overseas
Investment Management Limited serves as sub-advisor ("Sub-Advisor") to the
Framlington International Growth Fund, the Framlington Emerging Markets Fund,
and the Framlington Healthcare Fund (collectively, the "Framlington Funds"),
which are three series of Framlington. Capitalized terms used herein and not
otherwise defined have the same meanings as are given to them in the Prospectus.

Assets of the Funds will be allocated among the Underlying Funds within
the ranges set forth in the Prospectus. In addition, each Fund may hold cash,
and may invest cash balances in repurchase agreements and other money market
instruments in an amount to meet expenses or for day-to-day operating expenses.

The investment objectives and policies of the Funds and the Underlying
Funds are set forth in the Prospectus.

INVESTMENT OBJECTIVES AND POLICIES

The Munder All Season Conservative Fund's investment objective is to
provide shareholders with current income, with capital appreciation as a
secondary objective. The Fund seeks to achieve its objective by concentrating
its investments in Underlying Funds that invest primarily in fixed income
securities.

The Munder All Season Moderate Fund's investment objective is to provide
shareholders with high total return through a combination of capital
appreciation and current income. The Fund seeks to achieve its objective by
diversifying its investments in Underlying Funds that invest primarily in equity
securities and fixed income securities.

- 3 -

<PAGE>

The Munder All Season Aggressive Fund's investment objective is to provide
shareholders with long-term capital appreciation. The Fund seeks its objective
by concentrating its investments in Underlying Funds that invest primarily in
equity securities.

The following is a description of the investment objectives and policies
of the Underlying Funds.

EQUITY FUNDS

Accelerating Growth Fund

The investment objective of the Accelerating Growth Fund is to provide
long-term capital appreciation, with income a secondary consideration. The Fund
seeks to achieve its objective by investing primarily in equity securities and
instruments convertible or exchangeable into equity securities. The Fund's
investment portfolio will consist primarily of the stocks of companies
determined by the Advisor to demonstrate accelerating earnings growth and which
are expected to continue expanding earnings at an accelerated pace, maintain a
substantial competitive advantage, have a focused management team and have a
stable balance sheet.

Under normal market conditions, at least 65% of the Fund's total assets
will be invested in equity securities. In addition to investing in equity
securities, the Fund is authorized to invest in high quality short-term fixed
income securities as cash reserves or for temporary defensive purposes. See
"INVESTMENT TECHNIQUES AND RISK FACTORS-- UNDERLYING FUNDS" in the Prospectus
and "FUND INVESTMENTS" in this Statement of Additional Information for a
description of investment practices of the Fund, including limited investments
in warrants, foreign securities and stock index futures and options.

Equity Selection Fund

The investment objective of the Equity Selection Fund is to provide
shareholders with long-term capital appreciation. The Fund seeks to achieve this
objective by investing in equity securities that a dedicated research team
believes to be of high quality and that, as determined through both fundamental
and technical analysis, are undervalued compared to equity securities of other
companies in the same industry. The Fund generally will invest in issuers that
have market capitalizations of at least $3 billion at the time of purchase. The
Fund will be diversified by industry with proportionate weightings approximately
the same as those of

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<PAGE>

the Standard & Poor's Composite Stock Price 500 Index (the "S&P 500").

The Fund seeks long-term capital appreciation by investing primarily in
common stocks. Under normal market conditions, the Fund will invest at least 65%
of its total assets in equity securities. In addition to investing in equity
securities, the Fund is also authorized to invest in high quality short-term
fixed income securities as cash reserves or for temporary defensive purposes.
See "INVESTMENT TECHNIQUES AND RISK FACTORS--UNDERLYING FUNDS" and "FUND
INVESTMENTS" in this Statement of Additional Information for a description of
investment practices of the Fund, including limited investments in warrants,
foreign securities and stock index futures and options.

Growth & Income Fund

The investment objective of the Growth & Income Fund is to provide capital
appreciation and current income by investing primarily in dividend-paying equity
securities. The Fund is designed for investors seeking current income and
capital appreciation through the equity markets. The Fund will seek to achieve
its objectives principally by investing in a broadly diversified portfolio of
dividend-paying stocks of companies whose prospects for dividend growth and
capital appreciation are considered favorable by the Advisor. In general, the
Advisor selects large, well-known companies that it believes have above-average
and secure dividends. The Fund will seek to produce a current yield greater than
the S&P 500.

The Fund's investment philosophy is founded on the Advisor's belief that
over time, dividend income can account for a significant component of the total
return from equity investments. Over time, reinvested dividend income has
accounted for approximately one-half of the total return of the S&P 500. Second,
dividends are normally a more stable and predictable source of return than
capital appreciation. While the price of a company's stock generally increases
or decreases in response to short-term earnings and market fluctuations, its
dividends are generally less volatile. Finally, the Advisor believes that stocks
which distribute a high level of current income tend to have less price
volatility than those which pay below average dividends.

To achieve its objective, the Fund will invest under normal circumstances
at least 65% of its assets in income-producing common stocks and convertible
preferred stocks. The Fund also may invest in convertible bonds which are debt
securities convertible into or ultimately exchangeable for common stock. The
Fund may invest up to 20% of the value of

- 5 -

<PAGE>

its total assets in securities that are rated below investment grade by Standard
& Poor's Ratings Service ("S&P"), a division of McGraw-Hill Companies, Inc., or
Moody's Investor Services, Inc. ("Moody's"). In addition to investing in common
stocks and convertible securities, the Fund is authorized to invest in high
quality short-term fixed income securities as cash reserves or for temporary
defensive purposes. See "INVESTMENT TECHNIQUES AND RISK FACTORS--UNDERLYING
FUNDS" in the Prospectus and "FUND INVESTMENTS" in this Statement of Additional
Information for a description of these and other investment practices of the
Fund, including investments in warrants, foreign securities and in stock index
futures and options.

International Equity Fund

The investment objective of the International Equity Fund is to provide
long-term capital appreciation by investing primarily in the equity securities
of foreign issuers. These securities will be held directly or in the form of
American Depositary Receipts ("ADRs") or European Depositary Receipts ("EDRs").
ADRs are receipts typically issued by a United States bank or trust company
evidencing ownership of the underlying foreign securities. EDRs are receipts
issued by a European financial institution evidencing a similar arrangement. The
Fund will emphasize companies with a market capitalization of at least $100
million. In selecting issuers, the Advisor may consider, among other factors,
the location of the issuer, its competitive stature, the issuer's past record
and future prospects for growth, and the marketability of its securities.

On a continuing basis, but at least quarterly, the Advisor creates a list
of securities eligible for purchase by the Fund. The Advisor then calculates the
adjusted market capitalization of all the equity securities, ADRs and EDRs
considered to be eligible for purchase. Market capitalization for equity
securities is calculated by multiplying the market price of the security by the
number of shares outstanding, adjusted for control blocks. A control block is
defined as a block of securities owned by another corporation. The primary
sources of information regarding the existence and size of control blocks are
the S&P Stock reports and the Morgan Stanley Capital International Perspective.
Control blocks will be updated each time the eligible list of securities is
created or a company is added to the eligible universe.

Following calculation of the adjusted market capitalization, the list of
eligible securities is then sorted in descending order of adjusted market
capitalization. Securities with market capitalizations greater than $100

- 6 -

<PAGE>

million are considered for purchase by the Fund. On a regular basis, securities
will be added to the eligible universe as new ADR and EDR facilities and
exchange listings occur, subject to meeting other eligibility requirements. Each
time the list of eligible securities is created, any security held by the Fund
that does not appear on the updated eligibility list will be sold as soon as
practicable.

Equity securities on the eligible securities list are continuously
evaluated on the basis of total return in relation to their respective local,
regional and global markets. From the list of eligible securities a portfolio is
constructed that is composed of two major sections. The first section is
designed to provide broad coverage of international markets. Securities
representation generally covers all major markets and industry sectors. The
second section is designed to complement the first section by increasing
exposure to securities that are expected to outperform their markets and
industry sectors on a relative basis. The blending of the two sections is
designed to provide an international portfolio that provides a broad market
exposure to stock markets and has the capability to enhance the value of the
portfolio by adjusting allocations to stocks that are expected to outperform
their respective markets on a relative basis.

The Fund will increase its exposure to the second section when the Advisor
identifies securities that are expected to outperform their markets and the Fund
will conversely increase its exposure to the first section when the Advisor
believes a broader market exposure is required. When the Advisor believes
broader market exposure will benefit the Fund, the Fund may allocate up to 80%
of its assets for investment in the first section securities. When the Advisor
identifies strong potential for specific securities to outperform their relative
benchmarks, the Fund may invest up to 50% of its total assets in the second
section securities.

The Advisor will determine the second section allocation by examining the
relationship each security has with the economic environment of its respective
industry, country market and geographic region. A stock's economic environment
is analyzed by identifying relevant key economic factor relationships with each
stock, sector and market and then determining the level of influence the factors
have in influencing the stock price.

The Fund may invest in the securities of issuers located
in countries which include, but are not limited to, the
following: Argentina, Australia, Belgium, Brazil, Canada,
Chile, Denmark, Finland, France, Germany, Hong Kong, Ireland,
Italy, Japan, Korea, Luxembourg, Malaysia, Mexico, The

- 7 -

<PAGE>

Netherlands, New Zealand, Norway, Peru, The Philippines, Portugal, Singapore,
Spain, Sweden, Switzerland, Taiwan, Turkey and The United Kingdom. It is
expected that these securities will be traded in the principal trading market in
such countries.

Under normal market conditions, at least 65% of the Fund's total assets
will be invested in the equity securities of foreign issuers and such issuers
will be located in at least three foreign countries. In addition to investing in
stocks, the Fund may, for the purpose of hedging its portfolio, purchase and
write put and call options on foreign stock indices listed on foreign and
domestic stock exchanges. The Fund may also invest in convertible securities,
stock index futures, and, to a limited extent, warrants. The Fund is also
authorized to invest in high quality short-term fixed income securities as cash
reserves or for temporary defensive purposes. See "INVESTMENT TECHNIQUES AND
RISK FACTORS-- Foreign Securities" in the Prospectus and "FUND INVESTMENTS--
Foreign Securities" in this Statement of Additional Information.

Micro-Cap Equity Fund

The investment objective of the Micro-Cap Equity Fund is long-term capital
appreciation. The Fund seeks to achieve its objective by investing, under normal
market conditions, at least 65% of its total assets in equity securities of
micro- cap companies that generally have a market capitalization of $200 million
or less at the time of purchase. Such issuers have market capitalizations that
are less than the capitalization of companies which predominate the major market
indices, such as the S&P 500.

The Advisor will generally favor companies that it believes offer
attractive opportunities due to the inefficiencies of the micro-cap market and
that the Advisor believes, through internal research, will have the ability to
grow significantly over the next several years. The Fund will typically invest
in small-sized, emerging growth companies that are positioned to benefit from
changes in technologies, regulations and/or secular trends. These companies may
still be in the developmental stage and may have limited product lines.

The Fund will attempt to provide investors with potentially greater
long-term rewards than those provided by an investment in a fund that seeks
capital appreciation from equity securities of larger, more established
companies. Since smaller capitalization companies are generally not as well
known to investors and have less of an investor following

- 8 -

<PAGE>

than larger companies, they may provide opportunities for greater investment
gains as a result of inefficiencies in the marketplace.

Smaller capitalization companies typically are subject to a greater degree
of change in earnings and business prospects than larger, more established
companies. In addition, securities of smaller capitalization companies are
traded in lower volume than those issued by larger companies and may be more
volatile. As a result, the Fund may be subject to greater price volatility than
a fund consisting of larger capitalization stocks. By maintaining a broadly
diversified portfolio, the Advisor will attempt to reduce this volatility.

Under normal market conditions, the Fund will invest at least 65% of its
total assets in equity securities. No more than 25% of the assets of the Fund
will be invested in one industry group. In addition to investing in equity
securities, the Fund is also authorized to invest in high quality short-term
fixed income securities as cash reserves or for temporary defensive purposes.
See "INVESTMENT TECHNIQUES AND RISK FACTORS" in the Prospectus and "FUND
INVESTMENTS" in this Statement of Additional Information for a description of
investment practices of the Fund, including limited investments in warrants,
foreign securities and stock index futures and options.

Mid-Cap Growth Fund

The investment objective of the Mid-Cap Growth Fund is to provide
shareholders with long-term capital appreciation. It seeks to achieve this
objective by investing primarily in a diversified portfolio of equity securities
of companies that have market capitalizations between $100 million and $5
billion and have demonstrated superior earnings growth, financial stability,
attractive valuation and relative price momentum. Income is not a primary
consideration in the selection of investments. This style which incorporates
both growth investing and value constraints has been nationally recognized as
GARP (Growth at a Reasonable Price) and seeks to produce attractive returns
during various market environments.

The Advisor believes that superior investment returns are derived from
securities of financially stable companies that reward shareholders with
superior earnings growth, are attractively priced and enjoy relative price
momentum. Specifically, the Advisor will examine the earnings growth
characteristics of approximately 10,000 companies for each of the last three
years to determine earnings strength, consistency and momentum. Companies which
have demonstrated superior earnings growth will be further reviewed for

- 9 -

<PAGE>

financial stability. Corporate balance sheets will be scrutinized to select
those companies which reinvest a significant portion of profits, demonstrate a
high return on equity and carry a relatively low debt load. Companies that meet
these earnings growth and financial stability criteria are further judged for
their value relative to these criteria and the market. Once determined to be
attractive values, those securities exhibiting relative price momentum to the
Standard & Poor's Mid-Cap Index generally will be favored by the Advisor for the
Fund. Within these parameters, the Advisor typically will establish equity
positions in approximately 50 to 100 companies. Equity securities generally will
be sold from the Fund's portfolio when they consistently fail to achieve any two
or more of the four criteria stated above.

The Fund invests substantially all, and at least 65%, of its total assets
in equity securities of companies with market capitalizations that range between
$100 million and $5 billion. Equity securities include common and preferred
stocks and securities convertible into or exchangeable for common stocks, such
as convertible preferred stocks, convertible debentures or warrants.

The Fund may also invest in short-term money market securities. Under
normal market conditions, short-term money market securities could comprise up
to 35% of the Fund's total assets. The Fund could invest a higher percentage of
its assets in money market securities for temporary defensive purposes.

Multi-Season Growth Fund

The investment objective of the Multi-Season Growth Fund is to provide
shareholders with long-term capital appreciation. The Fund seeks to achieve this
objective by investing primarily in a diversified portfolio of equity securities
of companies that have demonstrated superior long-term earnings growth,
financial stability, attractive valuation and relative price momentum. Income is
not a primary consideration in the selection of investments. This style which
incorporates both growth investing and value constraints has been nationally
recognized as GARP (Growth at a Reasonable Price) and seeks to produce
attractive returns during various market environments.

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<PAGE>

the last five years to determine earnings strength, consistency and momentum.
Companies which have demonstrated superior earnings growth will be further
reviewed for financial stability. Corporate balance sheets will be scrutinized
to select those companies which reinvest a significant portion of profits,
demonstrate a high return on equity and carry a relatively low debt load.
Companies that meet these earnings growth and financial stability criteria are
further judged for their value relative to these criteria and the market.
Historically, the median valuation of the portfolios managed by the Advisor has
been no more than a moderate premium to that of the S&P 500. Once determined to
be attractive values, those securities exhibiting the strongest relative price
momentum to the S&P 500 normally will be chosen by the Advisor for the Fund.
Within these parameters, the Advisor typically will establish equity positions
in approximately 50 to 100 companies. Equity securities generally will be sold
from the Fund's portfolio when they consistently fail to achieve any two or more
of the four criteria stated above.

The Fund invests substantially all, and at least 65%, of its assets in
equity securities. Equity securities include common and preferred stocks and
securities convertible into or exchangeable for common stocks, such as
convertible preferred stocks, convertible debentures or warrants. No more than
25% of the assets of the Fund will be invested in one industry group. In
addition, the Fund will not own more than 10% of the outstanding voting
securities of a single issuer. The Fund may also invest up to 20% of the value
of its total assets in equity securities of foreign issuers, including companies
domiciled in developing countries.

The Fund may invest in short-term money market instruments. Under normal
market conditions, short-term money market instruments could comprise up to 35%
of the Fund's total assets. The Fund could invest a higher percentage of its
assets in money market instruments for temporary defensive purposes.

The Fund's investment objective is a fundamental policy and may not be
changed without the authorization of the holders of a majority of the Fund's
outstanding shares.

Real Estate Equity Investment Fund

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<PAGE>

estate industry or which own significant real estate assets.
It will not invest directly in real estate.

Under normal conditions, the Fund will invest at least 65% of its total
assets in equity securities of companies listed on U.S. securities exchanges or
NASDAQ which are principally engaged in the real estate industry. Equity
securities include common stock, preferred stock and securities convertible into
common stock. A company is "principally engaged" in the real estate industry if
at least 50% of its assets, gross income or net profits are attributable to
ownership, construction, management or sale of residential, commercial or
industrial real estate. Real estate industry companies may include among others:
equity real estate investment trusts, which pool investors' funds for investment
primarily in commercial real estate properties; mortgage real estate investment
trusts, which invest pooled funds in real estate related loans; brokers, home
builders or real estate developers; and companies with substantial real estate
holdings, such as paper and lumber producers and hotel and entertainment
companies. The Fund will invest in real estate investment trusts only if they
are traded on major U.S. exchanges or NASDAQ. The Fund will not invest more than
15% of its total assets in equity real estate investment trusts, excluding
self-managed and/or self-administered trusts. The specific risks of investing in
real estate industry companies are summarized under "INVESTMENT TECHNIQUES AND
RISK FACTORS" in the Prospectus and "FUND INVESTMENTS" in this Statement of
Additional Information.

The Fund may also invest up to 35% of its total assets in equity
securities of issuers whose products and services are related to the real estate
industry, such as manufacturers and distributors of building supplies and
financial institutions which issue or service mortgages. The Fund will invest
more than 25% of its total assets in the real estate and real estate related
industries. In addition to these securities, the Fund may invest up to 35% of
its total assets in securities of companies outside the real estate and real
estate related industries believed by the Advisor to be undervalued and to have
capital appreciation potential. Moreover, consistent with its objective of
current income, the Fund may invest in nonconvertible debt securities of
companies outside the real estate and real estate related industries. The debt
securities purchased (except for those described below) will be of investment
grade or better quality (e.g., rated no lower than Baa by Moody's or BBB by S&P
or if not so rated, believed by the Advisor to be of comparable quality). From
time to time, the Fund may invest up to 5% of its total assets in securities
rated below investment grade and in unrated debt securities of issuers which are
secured by real

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<PAGE>

estate assets where the Advisor believes that the securities are trading at a
discount and that the underlying collateral is sufficient to ensure repayment of
principal. In such situations, it is conceivable that the Fund could, in the
event of default, end up holding the underlying real estate directly.

The Fund's investment objective is fundamental and may not be changed
without the authorization of the holders of a majority of the Fund's outstanding
shares. Unless otherwise noted, all other investment policies of the Fund are
non- fundamental and may be changed by the Board of Directors without
shareholder approval.

Small-Cap Value Fund

The investment objective of the Small-Cap Value Fund is long-term capital
appreciation, with income as a secondary objective. The Fund seeks to achieve
its objective by investing at least 65% of its total assets in equity securities
of small-cap companies that generally have a market capitalization below $750
million at the time of purchase. Such issuers have market capitalizations that
are less than the capitalization of companies which predominate the major market
indices, such as the S&P 500.

The Advisor will generally favor companies that it believes to be
undervalued at the time of purchase. Companies will also exhibit a stable or
improving earnings record and sound finances at the time of purchase. Factors
considered in selecting such issuers include participation in a fast growing
industry, a strategic niche position in a specialized market, adequate
capitalization and fundamental value.

Securities may become undervalued generally because they are temporarily
overlooked or out of favor due to economic conditions, a market decline,
industry conditions or actual or anticipated developments affecting the company.
The Fund may be considered "contrarian" in nature because its investments may be
considered out of favor with general investors.

The Fund will attempt to provide investors with potentially greater
long-term rewards than those provided by an investment in a fund that seeks
capital appreciation from

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<PAGE>

equity securities of larger, more established companies. Since small
capitalization companies are generally not as well known to investors and have
less of an investor following than larger companies, they may provide
opportunities for greater investment gains as a result of inefficiencies in the
marketplace.

Small capitalization companies typically are subject to a greater degree
of change in earnings and business prospects than larger, more established
companies. In addition, securities of small capitalization companies are traded
in lower volume than those issued by larger companies and may be more volatile.
As a result, the Fund may be subject to greater price volatility than a fund
consisting of larger capitalization stocks. By maintaining a broadly diversified
portfolio, the Advisor will attempt to reduce this volatility.

Under normal market conditions, the Fund will invest at least 65% of its
total assets in equity securities. The Fund will typically invest in companies
with lower price/earnings ratios, lower price/cash flow ratios and/or lower
price/book values than the equity markets in general, as measured by the Russell
2000 Index of small stocks. In addition, a company's valuation level will be
compared to its own historical valuation. The dividend yield of portfolio
companies is expected to approximate that of the general equity market. No more
than 25% of the assets of the Fund will be invested in one industry group.

It is the Advisor's intention to invest primarily in domestic equity
securities. In addition to investing in domestic common stocks, the Fund may
invest in other equity securities and equity equivalents. Other equity
securities and equity equivalents include securities that permit the Fund to
receive an equity interest in an issuer, the opportunity to acquire an equity
interest in an issuer, or the opportunity to receive a return on its investment
that permits the Fund to benefit from the growth over time in the equity of an
issuer. Examples of equity securities and equity equivalents include ADRs,
preferred stock, convertible preferred stock and convertible debt securities.
Equity equivalents may also include securities whose value or return is derived
from the value or return of a different security. An example of the type of
derivative security in which the Fund might invest includes depositary receipts.

In addition to investing in equity securities, the Fund is also authorized
to invest in high quality short-term fixed income securities as cash reserves or
for temporary defensive purposes. See "INVESTMENT TECHNIQUES AND RISK FACTORS"
in the Prospectus and "FUND INVESTMENTS" in this Statement of

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<PAGE>

Additional Information for a description of investment practices of the Fund,
including limited investments in warrants, foreign securities and stock index
futures and options.

Small Company Growth Fund

The investment objective of the Small Company Growth Fund is to provide
long-term capital appreciation. The Fund pursues its objective by investing
primarily in equity securities such as common stocks and instruments convertible
or exchangeable into common stocks.

Securities held by the Fund will generally be issued by smaller companies.
Smaller companies will be considered those companies with market capitalizations
that are less than the capitalization of companies which predominate the major
market indices, such as the S&P 500. The market capitalization of the issuers of
securities purchased by the Fund will be below $750 million at the time of
purchase. In managing the Fund, the Advisor seeks smaller companies with
above-average growth prospects. Factors considered in selecting such issuers
include participation in a fast growing industry, a strategic niche position in
a specialized market, adequate capitalization and fundamental value.

The Fund has been designed to provide investors with potentially greater
long-term rewards than those provided by an investment in a fund that seeks
capital appreciation from equity securities of larger, more established
companies. Since small capitalization companies are generally not as well known
to investors and have less of an investor following than larger companies, they
may provide opportunities for greater investment gains as a result of
inefficiencies in the marketplace.

Under normal market conditions, at least 65% of the Fund's total assets
will be invested in small company equity securities. In addition to investing in
equity securities, the Fund is also authorized to invest in high quality
short-term fixed income securities as cash reserves or for temporary

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<PAGE>

defensive purposes. See "INVESTMENT TECHNIQUES AND RISK FACTORS" in the
Prospectus and "FUND INVESTMENTS" in this Statement of Additional Information
for a description of investment practices of the Fund, including limited
investments in warrants, foreign securities and stock index futures and options.

Value Fund

The investment objective of the Value Fund is to provide long-term capital
appreciation, with income a secondary objective. The Fund seeks to achieve its
objective by investing primarily in equity securities of well established
companies with intermediate to large market capitalizations or capitalizations
which exceed $750 million. The Advisor will generally favor companies that it
believes to be undervalued at the time of purchase. Companies will also exhibit
a stable or improving earnings record and sound finances at the time of
purchase.

Securities may become undervalued generally because they are temporarily
out of favor due to economic conditions, a market decline, industry conditions
or actual or anticipated developments affecting the company. The Fund may be
considered "contrarian" in nature because its investments may be considered out
of favor with general investors. Generally, the Fund will invest at least 65% of
its total assets in equity securities. The Fund will typically invest in
companies with lower price/earnings ratios, lower price/cash flow ratios and/or
lower price/book values than the equity markets in general, as measured by the
S&P 500. In addition, a company's valuation level will be compared to its own
historical valuation. The dividend yield of portfolio companies is expected to
approximate that of the general equity market.

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<PAGE>

includes depositary receipts. The Value Fund may also invest
in short-term money market instruments.

The Fund will limit its purchase of convertible debt securities that, at
the time of purchase, are rated below investment grade by S&P or Moody's, or if
not rated by S&P or Moody's, are of equivalent investment quality as determined
by the Advisor, to 5% of the value of the Fund's total assets. For more detailed
information with respect to such securities and the risks associated with such
investments see "FUND INVESTMENTS--Lower Rated Debt Securities" in this
Statement of Additional Information.

Framlington International Growth Fund

The investment objective of the Framlington International Growth Fund is
to provide shareholders with long-term capital appreciation. The Fund seeks to
achieve its objective through worldwide investment in equity securities of
companies which, in the opinion of the Sub-Advisor, show above-average
profitability, management quality and growth.

The Fund may invest in the securities of issuers located in countries
which include, but are not limited to, the following: Argentina, Australia,
Austria, Belgium, Brazil, Canada, Chile, China, Czech Republic, Denmark, Egypt,
Finland, France, Germany, Hong Kong, India, Ireland, Italy, Japan, Korea,
Luxembourg, Malaysia, Mexico, The Netherlands, New Zealand, Norway, Peru, The
Philippines, Poland, Portugal, Russia, Singapore, South Africa, Spain, Sweden,
Switzerland, Taiwan, Thailand, Turkey and The United Kingdom.

The Fund may also lend its portfolio securities and borrow money for
investment purposes (i.e., "leverage" its portfolio). In addition, the Fund may
enter into transactions in options on securities, securities indices and foreign
currencies, forward foreign currency contracts, and futures contracts and
related options. When deemed appropriate by the Sub-Advisor, the Fund may invest
cash balances in repurchase agreements and other money market investments to
maintain liquidity in an amount to meet expenses or for day-to-day operating
purposes.

When the Sub-Advisor believes that market conditions warrant, the Fund may
adopt a temporary defensive position and may invest without limit in money
market securities

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<PAGE>

denominated in U.S. dollars or in the currency of any foreign
country. See "INVESTMENT TECHNIQUES AND RISK FACTORS" in the
Prospectus and "FUND INVESTMENTS" in this Statement of
Additional Information.

Framlington Emerging Markets Fund

The investment objective of the Framlington Emerging Markets Fund is to
provide shareholders with long-term capital appreciation. The Fund seeks to
achieve this objective through investing primarily in equity securities (as
defined below) of issuers in emerging market countries. The Fund considers
countries having emerging markets to be all countries that are generally
considered to be emerging or developing countries by the International Bank for
Reconstruction and Development (more commonly referred to as the World Bank) or
the International Finance Corporation, as well as countries that are classified
by the United Nations or otherwise regarded by their authorities as emerging.
Currently, the countries not in this category include Ireland, Spain, New
Zealand, Australia, the United Kingdom, Italy, the Netherlands, Belgium,
Austria, France, Canada, Germany, Denmark, the United States, Sweden, Finland,
Norway, Japan, Iceland, Luxembourg and Switzerland. A company will be deemed to
be in an emerging market country if (i) the company is organized under the laws
of, and has a principal office in, an emerging market country; (ii) the
principal trading market for the company's equity securities is in an emerging
market country; or (iii) the company derives at least 50% of its revenues or
profits from goods produced or sold, investments made, or services performed, in
an emerging market country, or has at least 50% of its assets situated in an
emerging market country. Under normal market conditions, the Fund will invest at
least 65% of its total assets in equity securities of issuers in emerging market
countries. Determinations as to eligibility will be made by the Sub-Advisor
based on publicly available information and inquiries made to the companies.

When the Sub-Advisor believes that market conditions warrant, the Fund may
adopt a temporary defensive position and

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<PAGE>

may invest without limit in money market securities
denominated in U.S. dollars or in the currency of any foreign
country. See "INVESTMENT TECHNIQUES AND RISK FACTORS" in the
Prospectus and "FUND INVESTMENTS" in this Statement of
Additional Information

Framlington Healthcare Fund

The investment objective of the Framlington Healthcare Fund is to provide
shareholders with long-term capital appreciation. The Fund seeks to achieve this
objective through investment in companies providing healthcare and medical
services and products worldwide. The Fund will invest in producers of
pharmaceuticals, biotechnology firms, medical device and instrument
manufacturers, distributors of healthcare products, care providers and managers
and other healthcare services companies. Under normal market conditions, the
Fund will invest at least 65% of its total assets in healthcare companies as
described above. The Sub- Advisor considers healthcare companies to include
companies in which at least 50% of sales, earnings or assets arise from or are
dedicated to health services or medical technology activities.

When the Sub-Advisor believes that market conditions warrant, the Fund may
adopt a temporary defensive position and may invest without limit in money
market securities denominated in U.S. dollars or in the currency of any foreign
country. See "INVESTMENT TECHNIQUES AND RISK FACTORS" in the Prospectus and
"FUND INVESTMENTS" in this Statement of Additional Information

NetNet Fund

The investment objective of the NetNet Fund is to provide shareholders
with long term capital appreciation. The Fund seeks to achieve this objective by
investing primarily in companies engaged in Internet and Intranet related
businesses. Income is not a primary consideration in the selection of
investments.

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<PAGE>

Under normal conditions, the Fund will invest at least 65% of its total
assets in equity securities of companies listed on U.S. securities exchanges or
NASDAQ which are engaged in the research, design, development, manufacturing or
engaged to a significant extent in the business of distributing products,
processes or services for use with Internet and Intranet related businesses.
Equity securities include common stock, preferred stock and securities
convertible into common stock. The specific risks of investing in
Internet-related securities are summarized under "INVESTMENT TECHNIQUES AND RISK
FACTORS" in the Prospectus.

The Fund's investment objective and all other investment policies, unless
otherwise noted, are non-fundamental and may be changed by the Company's Board
of Directors without shareholder approval.

The Internet is a world-wide network of computers designed to permit users
to share information and transfer data quickly and easily. The World Wide Web
("WWW") which is a means of graphically interfacing with the Internet, is a
hyper-text based publishing medium containing text, graphics, interactive
feedback mechanisms and links within WWW documents and to other WWW documents.
An Intranet is the application of WWW tools and concepts to a company's internal
documents and databases. The Advisor believes that the Internet and the Intranet
are together the emerging frontier interlinking computers, telecommunications
and broadcast. Consequently, there are opportunities for continued growth in
demand for components, products, media, services, and systems to assist,
facilitate, enhance, store, process, record, reproduce, retrieve and distribute
information, products and services for use by businesses, institutions and
consumers. Companies engaged in these efforts are the central focus of the Fund.
Internet and Intranet related businesses include companies engaged in the
research, design, development, manufacturing or distribution of servers,
routers, search engines, bridges and switches, browsers, network applications,
agent software, modems, carriers, firewall and security, e-mail, electronic
commerce, video and publishing for use on the Internet/Intranet.

The value of Fund shares may be susceptible to factors
affecting the industries described above. These industries

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<PAGE>

may be subject to greater governmental regulation than many other industries and
changes in governmental policies and the need for regulatory approvals may have
a material effect on the products and services of these industries. In addition,
because of its narrow industry focus, the Fund's performance is closely tied to,
and affected by, these industries. Companies in an industry are often faced with
the same obstacles, issues or regulatory burdens, and their securities may react
similarly and move in unison to these and other market conditions.

Finally, competitive pressures and changing demand may have a significant
effect on the financial condition of companies in these industries. Such
companies spend heavily on research and development and are especially sensitive
to the risk of product obsolescence.

Although securities of large and well-established companies in the
information technology industries will be held in the Fund's portfolio, the Fund
also will invest in medium, small and/or newly-public companies which may be
subject to greater share price fluctuations and declining growth, particularly
in the event of rapid changes in technology and/or increased competition.
Securities of those smaller and/or less seasoned companies may, therefore,
expose shareholders of the Fund to above-average risk.

FIXED INCOME FUNDS

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<PAGE>

Each of the Bond Fund, Intermediate Bond Fund, and U.S. Government Income
Fund invests substantially all of its assets in debt obligations such as bonds
and debentures, obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities ("U.S. Government obligations"), debt obligations
of domestic and foreign corporations, debt obligations of foreign governments
and their political subdivisions, asset-backed securities and various
mortgage-related securities. These Funds may purchase obligations issued by or
on behalf of states, territories and possessions of the United States, the
District of Columbia and their political subdivisions, agencies,
instrumentalities and authorities. For purposes of the 65% limitation with
respect to the Bond Fund and the Intermediate Bond Fund described below, the
securities described in this paragraph are considered "bonds."

Pending investment, to meet anticipated redemption requests, or as a
temporary defensive measure if the Advisor determines that market conditions
warrant, the Bond Funds may invest without limitation in short-term U.S.
Government obligations, high quality money market instruments and repurchase
agreements. Such obligations may include those issued by foreign banks and
foreign branches of U.S. banks.

The Bond Fund, Intermediate Bond Fund, and U.S. Government Income Fund may
also invest in futures contracts and options and enter into interest rate swap
transactions. See "INVESTMENT TECHNIQUES AND RISK FACTORS" in the Prospectus and
"FUND INVESTMENTS" in this Statement of Additional Information for a discussion
of the risks associated with the use of derivative instruments. During normal
market conditions at least 65% of each of the Bond Fund's and the Intermediate
Bond Fund's total assets will be invested in bonds. During normal market
conditions at least 65% of the U.S. Government Income Fund's total assets will
be invested in U.S. Government obligations. A further description of the types
of obligations and the various investment techniques used by the Bond Funds is
provided below under "Portfolio Instruments and Practices and Associated Risk
Factors."

International Bond Fund

The investment objective of the International Bond Fund is to realize a
competitive total return through a combination of current income and capital
appreciation. The Fund seeks to achieve its objective by investing primarily in
foreign debt obligations. As an international fund, the Fund may invest in
securities of any issuer and in any currency. Under normal market conditions, at
least 65% of the Fund's assets are invested in bonds of issuers located in at
least three

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<PAGE>

countries other than the United States. The Fund will primarily invest in
foreign debt obligations denominated in foreign currencies, including the
European Currency Unit ("ECU"), which are issued by foreign governments and
governmental agencies, instrumentalities or political subdivisions; debt
securities issued or guaranteed by supranational organizations (e.g., European
Investment Bank, Inter-American Development Bank or the World Bank); corporate
debt securities; bank or bank holding company debt securities and other debt
securities including those convertible into foreign stock. For the purposes of
the 65% limitation with respect to the Fund's designation as an international
bond fund, the securities described in this paragraph are considered
"international bonds." There can be no assurance that the Fund will achieve its
investment objective. Purchasing shares of the Fund should not be considered a
complete investment program, but an important segment of a well-diversified
investment program.

The Fund's dollar-weighted average maturity will generally be between
three and fifteen years except during temporary defensive periods, and will be
adjusted by the Advisor according to market conditions. Pending investment, to
meet anticipated redemption requests, or as a temporary defensive measure if the
Advisor determines that market conditions warrant, the Fund may invest without
limitation in short-term U.S. Government obligations, high quality money market
instruments and repurchase agreements. Such obligations may include those issued
by foreign banks and foreign branches of U.S. banks. The Fund may also invest in
futures contracts and options and enter into interest rate swap transactions. A
further description of the types of obligations and the various investment
techniques used by the Fund, including a description of the risks associated
with the use of derivative instruments, is provided below under "INVESTMENT
TECHNIQUES AND RISK FACTORS" in the Prospectus and "FUND INVESTMENTS" in this
Statement of Additional Information

MONEY MARKET FUNDS

Cash Investment Fund, Money Market Fund and U.S. Treasury
Money Market Fund

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<PAGE>

they will be able to do so on a continuous basis. In pursuing their respective
investment objectives, the Cash Investment Fund and Money Market Fund may invest
in a broad range of short-term, high quality, U.S. dollar-denominated
instruments, such as bank, commercial and other obligations (including Federal,
state and local government obligations), that are available in the money
markets. The securities in which the Cash Investment Fund and Money Market Fund
may invest are described under "INVESTMENT TECHNIQUES AND RISK FACTORS" in the
Prospectus and "FUND INVESTMENTS" in this Statement of Additional Information.
The U.S. Treasury Money Market Fund seeks to achieve its objective by investing
solely in short- terms bonds, bills and notes issued by the U.S. Treasury
(including "stripped" securities as described under "Portfolio Instruments and
Practices and Associated Risk Factors"), and in repurchase agreements relating
to such obligations.

Securities acquired by the Cash Investment Fund, Money Market Fund and
U.S. Treasury Money Market Fund will be "Eligible Securities" as defined by the
SEC. Eligible Securities consist of securities that are determined by the
Advisor, under guidelines established by the Boards of Trustees/Directors, to
present minimal credit risks. Appendix A to the Statement of Additional
Information includes a description of applicable ratings.

Assets of the Cash Investment Fund, Money Market Fund and U.S. Treasury
Money Market Fund will be invested solely in U.S. dollar-denominated debt
securities with remaining maturities of 397 days or less as defined by the SEC
(although securities subject to repurchase agreements, variable and floating
rate securities and certain other securities may bear longer maturities), and
the dollar-weighted average portfolio maturity of each Fund will not exceed 90
days.

Although the Cash Investment Fund, Money Market Fund and U.S. Treasury
Money Market Fund expect under normal market conditions to be as fully invested
as possible, each Fund may hold uninvested cash pending investment of late
payments for purchase orders (or other payments) or during temporary defensive
periods. Uninvested cash will not earn income. In general, investments in the
Funds will not earn as high a level of current income as longer-term or
lower-quality securities. Such securities, however, generally have less
liquidity, greater market risk and more fluctuation in market value.

FUND INVESTMENTS

The following supplements the information contained in
the Prospectus concerning the investment objectives and

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<PAGE>

policies of the Underlying Funds. With the exception of Munder Multi-Season
Growth Fund and Munder Real Estate Equity Investment Fund, each Underlying
Fund's investment objective is a non-fundamental policy and may be changed
without authorization of the holders of a majority of such Underlying Fund's
outstanding shares. A description of applicable credit ratings is set forth in
Appendix A hereto. For purposes of this Statement of Additional Information, the
Munder Accelerating Growth Fund, Equity Selection Fund, Growth & Income Fund,
International Equity Fund, Micro-Cap Equity Fund, Mid-Cap Growth Fund (the
"Mid-Cap Fund"), Multi-Season Growth Fund (the "Multi-Season Fund"), Real Estate
Equity Investment Fund (the "Real Estate Fund"), Small-Cap Value Fund , Small
Company Growth Fund, Value Fund, the Framlington Funds and the NetNet Fund are
referred to as the "Equity Funds." The Munder Bond Fund, Intermediate Bond Fund,
International Bond Fund and U.S. Government Income Fund are referred to as the
"Fixed Income Funds." The Munder Cash Investment Fund, Money Market Fund, and
U.S. Treasury Money Market Fund are referred to as the "Money Market Funds." If
you require more detailed information about an Underlying Fund, please call the
Distributor at (800) 438-5789 to obtain the complete prospectus and statement of
additional information for that fund.

Borrowing. The Underlying Funds are authorized to borrow money in amounts
up to 5% of the value of their total assets at the time of such borrowings for
temporary purposes, and are authorized to borrow money in excess of the 5% limit
as permitted by the Investment Company Act of 1940, as amended (the "1940 Act"),
to meet redemption requests. This borrowing may be unsecured. The 1940 Act
requires the Underlying Funds to maintain continuous asset coverage of 300% of
the amount borrowed. If the 300% asset coverage should decline as a result of
market fluctuations or other reasons, the Underlying Funds may be required to
sell some of their portfolio holdings within three days to reduce the debt and
restore the 300% asset coverage, even though it may be disadvantageous from an
investment standpoint to sell securities at that time. Borrowing may exaggerate
the effect on net asset value of any increase or decrease in the market value of
the portfolio securities. Money borrowed will be subject to interest costs which
may or may not be recovered by an appreciation of the securities purchased. The
Underlying Funds may also be required to maintain minimum average balances in
connection with such borrowing or to pay a commitment or other fees to maintain
a line of credit; either of these requirements would increase the cost of
borrowing over the stated interest rate. The Underlying Funds may, in connection
with permissible borrowings, transfer as collateral, securities owned by the
funds.

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<PAGE>

Additionally, each Underlying Fund (except the Multi- Season Fund and
Money Market Fund) may borrow funds for temporary or emergency purposes by
selling portfolio securities to financial institutions such as banks and
broker/dealers and agreeing to repurchase them at a mutually specified date and
price ("reverse repurchase agreements"). Reverse repurchase agreements involve
the risk that the market value of the securities sold by an Underlying Fund may
decline below the repurchase price. An Underlying Fund will pay interest on
amounts obtained pursuant to a reverse repurchase agreement. While reverse
repurchase agreements are outstanding, an Underlying Fund will maintain in a
segregated account, cash, U.S. Government securities or other liquid portfolio
securities of an amount at least equal to the market value of the securities,
plus accrued interest, subject to the agreement.

Foreign Securities. Each Equity Fund (except the Real Estate Fund), each
Fixed Income Fund, and the Cash Investment Fund may invest in the securities of
foreign issuers. The Mid-Cap Fund and the Multi-Season Fund typically will only
purchase foreign securities which are represented by ADRs listed on a domestic
securities exchange or included in the NASDAQ National Market System, or foreign
securities listed directly on a domestic securities exchange or included in the
NASDAQ National Market System. ADRs are receipts typically issued by a United
States bank or trust company evidencing ownership of the underlying foreign
securities. Certain such institutions issuing ADRs may not be sponsored by the
issuer. A non-sponsored depositary may not provide the same shareholder
information that a sponsored depositary is required to provide under its
contractual arrangements with the issuer.

Income and gains on such securities may be subject to foreign withholding
taxes. Investors should consider carefully the substantial risks involved in
securities of companies and governments of foreign nations, which are in
addition to the usual risks inherent in domestic investments.

There may be less publicly available information about foreign companies
comparable to the reports and ratings published about companies in the United
States. Foreign companies are not generally subject to uniform accounting,
auditing and financial reporting standards, and auditing practices and
requirements may not be comparable to those applicable to United States
companies. Foreign markets have substantially less volume than the New York
Stock Exchange and securities of some foreign companies are less liquid and more
volatile than securities of comparable United States companies. Commission rates
in foreign countries, which are

- 26 -

<PAGE>

generally fixed rather than subject to negotiation as in the United States, are
likely to be higher. In many foreign countries there is less government
supervision and regulation of stock exchanges, brokers, and listed companies
than in the United States.

Under normal market conditions, at least 65% of the International Bond
Fund's assets are invested in bonds of issuers located in at least three
countries other than the United States. The International Bond Fund will
primarily invest in foreign debt obligations denominated in foreign currencies,
including the European Currency Unit, which are issued by foreign governments
and governmental agencies, instrumentalities or political subdivisions; debt
securities issued or guaranteed by supranational organizations (as defined
below); corporate debt securities; bank or bank holding company debt securities
and other debt securities including those convertible into foreign stock. For
the purposes of the 65% limitation with respect to the International Bond Fund's
designation as an international bond fund, the securities described in this
paragraph are considered "international bonds."

Investors should consider carefully the substantial risks involved in
securities of companies and governments of foreign nations, which are in
addition to the usual risks inherent in domestic investments. There may be less
publicly available information about foreign companies comparable to the reports
and ratings published about companies in the United States. Foreign companies
are not generally subject to uniform accounting, auditing and financial
reporting standards, and auditing practices and requirements may not be
comparable to those applicable to United States companies. Foreign markets have
substantially less volume than the New York Stock Exchange and securities of
some foreign companies are less liquid and more volatile than securities of
comparable United States companies. Commission rates in foreign countries, which
are generally fixed rather than subject to negotiation as in the United States,
are likely to be higher. In many foreign countries there is less government
supervision and regulation of stock exchanges, brokers, and listed companies
than in the United States.

Investments in companies domiciled in developing countries may be subject
to potentially higher risks than investments in developed countries. These risks
include (i) less social, political and economic stability; (ii) the small
current size of the markets for such securities and the currently low or
nonexistent volume of trading, which result in a lack of liquidity and in
greater price volatility; (iii) certain national policies which may restrict an
Underlying

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<PAGE>

Fund's investment opportunities, including restrictions on investment in issuers
or industries deemed sensitive to national interest; (iv) foreign taxation; (v)
the absence of developed legal structures governing private or foreign
investment or allowing for judicial redress for injury to private property; (vi)
the absence, until recently in certain Eastern European countries, of a capital
market structure or market-oriented economy; and (vii) the possibility that
recent favorable economic developments in Eastern Europe may be slowed or
reversed by unanticipated political or social events in such countries.

Investments in Eastern European countries may involve risks of
nationalization, expropriation and confiscatory taxation. The Communist
governments of a number of Eastern European countries expropriated large amounts
of private property in the past, in many cases without adequate compensation,
and there can be no assurance that such expropriation will not occur in the
future. In the event of such expropriation, an Underlying Fund could lose a
substantial portion of any investments it has made in the affected countries.
Further, no accounting standards exist in Eastern European countries. Finally,
even though certain Eastern European currencies may be convertible into United
States dollars, the conversion rates may be artificial to the actual market
values and may be adverse to Fund shareholders.

The Advisor (Sub-Advisor with respect to the Framlington Funds) endeavors
to buy and sell foreign currencies on as favorable a basis as practicable. Some
price spread on currency exchange (to cover service charges) may be incurred,
particularly when an Underlying Fund changes investments from one country to
another or when proceeds of the sale of fund shares in U.S. dollars are used for
the purchase of securities in foreign countries. Also, some countries may adopt
policies which would prevent an Underlying Fund from transferring cash out of
the country or withhold portions of interest and dividends at the source. There
is the possibility of expropriation, nationalization or confiscatory taxation,
withholding and other foreign taxes on income or other amounts, foreign exchange
controls (which may include suspension of the ability to transfer currency from
a given country), default in foreign government securities, political or social
instability or diplomatic developments that could affect investments in
securities of issuers in foreign nations.

Foreign securities markets have different clearance and settlement
procedures, and in certain markets there have been times when settlements have
been unable to keep pace with the volume of securities transactions, making it
difficult to

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<PAGE>

conduct such transactions. Delays in settlement could result in temporary
periods when assets of an Underlying Fund are uninvested and no return is earned
thereon. The inability of an Underlying Fund to make intended security purchases
due to settlement problems could cause the fund to miss attractive investment
opportunities. Inability to dispose of portfolio securities due to settlement
problems could result either in losses to an Underlying Fund due to subsequent
declines in value of the portfolio security or, if the fund has entered into a
contract to sell the security, could result in possible liability to the
purchaser.

Repatriation of investment income, capital and proceeds of sales by
foreign investors may require governmental registrations and/or approval in some
emerging market countries. An Underlying Fund could be adversely affected by
delays in or a refusal to grant any required governmental registrations or
approval for such repatriation.

Further, the economies of emerging market countries generally are heavily
dependent upon international trade and, accordingly, have been and may continue
to be adversely affected by trade barriers, exchange controls, managed
adjustments in relative currency values and other protectionist measures imposed
by the counties with which they trade.

In many emerging market countries, there is less government supervision
and regulation of business and industry practices, stock exchanges, brokers and
listed companies than in the United States. There is an increased risk,
therefore, of uninsured loss due to lost, stolen, or counterfeit stock
certificates. In addition, the foreign securities markets of many of the
countries in which the Underlying Funds may invest may also be smaller, less
liquid, and subject to greater price volatility than those in the United States.

An Underlying Fund may be affected either unfavorably or favorably by
fluctuations in the relative rates of exchange between the currencies of
different nations, by exchange control regulations and by indigenous economic
and political developments. Changes in foreign currency exchange rates will
influence values within an Underlying Fund from the perspective of U.S.
investors, and may also affect the value of dividends and interest earned, gains
and losses realized on the sale of securities, and net investment income and
gains, if any, to be distributed to shareholders by a fund. The rate of exchange
between the U.S. dollar and other currencies is determined by the forces of
supply and demand in the foreign exchange markets. These forces are affected by
the international balance of payments and other economic and

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<PAGE>

financial conditions, government intervention, speculation and other factors.
The Advisor will attempt to avoid unfavorable consequences and to take advantage
of favorable developments in particular nations where, from time to time, it
places a fund's investments.

The exercise of this flexible policy may include decisions to purchase
securities with substantial risk characteristics and other decisions such as
changing the emphasis on investments from one nation to another and from one
type of security to another. Some of these decisions may later prove profitable
and others may not. No assurance can be given that profits, if any, will exceed
losses.

Forward Foreign Currency Transactions. In order to protect against a
possible loss on investments resulting from a decline or appreciation in the
value of a particular foreign currency against the U.S. dollar or another
foreign currency, the Equity Funds (excluding the Real Estate Fund), and the
Fixed Income Funds are authorized to enter into forward foreign currency
exchange contracts ("forward currency contracts"). These contracts involve an
obligation to purchase or sell a specified currency at a future date at a price
set at the time of the contract. Forward currency contracts do not eliminate
fluctuations in the values of portfolio securities but rather allow an
Underlying Fund to establish a rate of exchange for a future point in time.

When entering into a contract for the purchase or sale of a security, an
Underlying Fund may enter into a forward foreign currency exchange contract for
the amount of the purchase or sale price to protect against variations, between
the date the security is purchased or sold and the date on which payment is made
or received, in the value of the foreign currency relative to the U.S. dollar or
other foreign currency.

When the Advisor (Sub-Advisor with respect to the Framlington Funds)
anticipates that a particular foreign currency may decline substantially
relative to the U.S. dollar or other leading currencies, in order to reduce
risk, an Underlying Fund may enter into a forward contract to sell, for a fixed
amount, the amount of foreign currency approximating the value of some or all of
the Underlying Fund's securities denominated in such foreign currency.
Similarly, when the obligations held by an Underlying Fund create a short
position in a foreign currency, the fund may enter into a forward contract to
buy, for a fixed amount, an amount of foreign currency approximating the short
position. With respect to any forward foreign currency contract, it will not
generally be possible to match precisely the amount covered by that

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<PAGE>

contract and the value of the securities involved due to the changes in the
values of such securities resulting from market movements between the date the
forward contract is entered into and the date it matures. In addition, while
forward contracts may offer protection from losses resulting from declines or
appreciation in the value of a particular foreign currency, they also limit
potential gains which might result from changes in the value of such currency.
An Underlying Fund will also incur costs in connection with forward foreign
currency exchange contracts and conversions of foreign currencies and U.S.
dollars.

A separate account consisting of cash or liquid securities equal to the
amount of an Underlying Fund's assets that could be required to consummate
forward contracts will be established with the Underlying Funds' Custodian
except to the extent the contracts are otherwise "covered." For the purpose of
determining the adequacy of the securities in the account, the deposited
securities will be valued at market or fair value. If the market or fair value
of such securities declines, additional cash or securities will be placed in the
account daily so that the value of the account will equal the amount of such
commitments by the Underlying Fund. A forward contract to sell a foreign
currency is "covered" if an Underlying Fund owns the currency (or securities
denominated in the currency) underlying the contract, or holds a forward
contract (or call option) permitting the fund to buy the same currency at a
price no higher than the fund's price to sell the currency. A forward contract
to buy a foreign currency is "covered" if an Underlying Fund holds a forward
contract (or call option) permitting the fund to sell the same currency at a
price as high as or higher than the fund's price to buy the currency.

Futures Contracts and Related Options. The Equity and Fixed Income Funds
currently expect that they may purchase and sell futures contracts on
interest-bearing securities or securities or bond indices, and may purchase and
sell call and put options on futures contracts. For a detailed description of
futures contracts and related options, see Appendix B to this Statement of
Additional Information.

Interest Rate Swap Transactions. Each of the Fixed Income Funds may enter
into interest rate swap agreements for purposes of attempting to obtain a
particular desired return at a lower cost to those Underlying Funds than if the
Underlying Funds had invested directly in an instrument that yielded that
desired return. Interest rate swap transactions involve the exchange by a
Underlying Fund with another party of its commitments to pay or receive
interest, such as an exchange of fixed rate payments for floating rate payments.

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<PAGE>

Typically, the parties with which the Underlying Funds will enter into interest
rate swap transactions will be brokers, dealers or other financial institutions
known as "counterparties." Certain Federal income tax requirements may, however,
limit the Underlying Funds' ability to engage in certain interest rate
transactions. Gains from transaction in interest rate swaps distributed to
shareholders of the Underlying Funds will be taxable as ordinary income or, in
certain circumstances, as long-term capital gains to the shareholders.

Each of the Underlying Funds' obligations (or rights) under a swap
agreement will generally be equal only to the net amount to be paid or received
under the agreement based on the relative values of the positions held by each
party to the agreement (the "net amount"). Each of the Fixed Income Funds'
obligations under a swap agreement will be accrued daily (offset against any
amounts owed to the Underlying Fund). Accrued but unpaid net amounts owed to a
swap counterparty will be covered by the maintenance of a segregated account
consisting of cash, U.S. Government securities or other high-grade debt
securities, to avoid any potential leveraging of each of the Underlying Funds'
portfolio.

The Underlying Funds will not enter into any interest rate swap
transaction unless the credit quality of the unsecured senior debt or the
claims-paying ability of the other party to the transaction is rated in one of
the highest four rating categories by at least one nationally-recognized
statistical rating organization ("NRSRO") or is believed by the Advisor to be
equivalent to that rating. If the other party to a transaction defaults, the
Underlying Funds will have contractual remedies pursuant to the agreements
related to the transactions.

The use of interest rate swaps is a highly specialized activity that
involves investment techniques and risks different from those associated with
ordinary portfolio securities transactions. If the Advisor is incorrect in its
forecasts of market values, interest rates and other applicable factors, the
investment performance of each of the Underlying Funds would be lower than it
would have been if interest rate swaps were not used. The swaps market has grown
substantially in recent years with a large number of banks and investment
banking firms acting both as principals and as agents utilizing standardized
swap documentation. As a result, the swaps market has become relatively liquid
in comparison with other similar instruments traded in the interbank market. The
swaps market is a relatively new market and is largely unregulated. It is
possible that developments in the swaps market, including potential government

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<PAGE>

regulation, could adversely affect the Fixed Income Funds' ability to terminate
existing swap agreements or to realize amounts to be received under such
agreements.

Lending of Portfolio Securities. To enhance the return on its portfolio,
each of the Underlying Funds may lend securities in its portfolio (subject to a
limit of 25% of each Fund's (other than the Money Market Fund's) total asset;
and one-third of the Money Market Fund's total assets) to securities firms and
financial institutions, provided that each loan is secured continuously by
collateral in the form of cash, high quality money market instruments or
short-term U.S. Government securities adjusted daily to have a market value at
least equal to the current market value of the securities loaned. These loans
are terminable at any time, and the Underlying Funds will receive any interest
or dividends paid on the loaned securities. In addition, it is anticipated that
an Underlying Fund may share with the borrower some of the income received on
the collateral for the loan or the fund will be paid a premium for the loan. The
risk in lending portfolio securities, as with other extensions of credit,
consists of possible delay in recovery of the securities or possible loss of
rights in the collateral should the borrower fail financially. In determining
whether the Underlying Funds will lend securities, the Advisor (Sub-Advisor with
respect to the Framlington Funds) will consider all relevant facts and
circumstances. The Underlying Funds will only enter into loan arrangements with
broker-dealers, banks or other institutions which the Advisor (Sub-Advisor) has
determined are creditworthy under guidelines established by the Boards of
Directors or Trustees, as applicable.

Lower-Rated Debt Securities. The Growth & Income Fund may invest up to 20%
of the value of its total assets and each of the Real Estate Fund and Value Fund
may invest up to 5% of the value of its total assets in securities that are
rated below investment grade by Standard & Poor's or Moody's. Such securities
are also known as junk bonds. The yields on lower- rated debt and comparable
unrated securities generally are higher than the yields available on
higher-rated securities. However, investments in lower-rated debt and comparable
unrated securities generally involve greater volatility of price and risk of
loss of income and principal, including the possibility of default by or
bankruptcy of the issuers of such securities. Lower-rated debt and comparable
unrated securities (a) will likely have some quality and protective
characteristics that, in the judgment of the rating organization, are outweighed
by large uncertainties or major risk exposures to adverse conditions and (b) are
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with the terms of

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<PAGE>

the obligation. Accordingly, it is possible that these types of factors could,
in certain instances, reduce the value of securities held in each Underlying
Fund's portfolio, with a commensurate effect on the value of each of the fund's
shares. Therefore, an investment in the Growth & Income, Real Estate or Value
Funds should not be considered as a complete investment program and may not be
appropriate for all investors.

While the market values of lower-rated debt and comparable unrated
securities tend to react more to fluctuations in interest rate levels than the
market values of higher-rated securities, the market values of certain lower
rated debt and comparable unrated securities also tend to be more sensitive to
individual corporate developments and changes in economic conditions than
higher-rated securities. In addition, lower-rated debt securities and comparable
unrated securities generally present a higher degree of credit risk. Issuers of
lower-rated debt and comparable unrated securities often are highly leveraged
and may not have more traditional methods of financing available to them so that
their ability to service their debt obligations during an economic downturn or
during sustained periods of rising interest rates may be impaired. The risk of
loss due to default by such issuers is significantly greater because lower-rated
debt and comparable unrated securities generally are unsecured and frequently
are subordinated to the prior payment of senior indebtedness. The Underlying
Funds may incur additional expenses to the extent that they are required to seek
recovery upon a default in the payment of principal or interest on their
portfolio holdings. The existence of limited markets for lower-rated debt and
comparable unrated securities may diminish each of the Underlying Fund's ability
to (a) obtain accurate market quotations for purposes of valuing such securities
and calculating its net asset value and (b) sell the securities at fair value
either to meet redemption requests or to respond to changes in the economy or in
financial markets.

Lower-rated debt securities and comparable unrated securities may have
call or buy-back features that permit their issuers to call or repurchase the
securities from their holders. If an issuer exercises these rights during
periods of declining interest rates, the Underlying Funds may have to replace
the security with a lower yielding security, thus resulting in a decreased
return to the funds.

Money Market Instruments. As described in the
Prospectus, the Funds and the Underlying Funds may invest from
time to time in "money market instruments," a term that
includes, among other things, bank obligations, commercial

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paper, variable amount master demand notes and corporate bonds with remaining
maturities of 397 days or less.

Bank obligations include bankers' acceptances, negotiable certificates of
deposit and non-negotiable time deposits, including U.S. dollar-denominated
instruments issued or supported by the credit of U.S. or foreign banks or
savings institutions. Although the Funds and the Underlying Funds will invest in
obligations of foreign banks or foreign branches of U.S. banks only where the
Advisor (Sub-Advisor with respect to the Framlington Funds) deems the instrument
to present minimal credit risks, such investments may nevertheless entail risks
that are different from those of investments in domestic obligations of U.S.
banks due to differences in political, regulatory and economic systems and
conditions. All investments in bank obligations are limited to the obligations
of financial institutions having more than $1 billion in total assets at the
time of purchase, and investments by a fund in the obligations of foreign banks
and foreign branches of U.S. banks will not exceed 25% of such Fund's total
assets at the time of purchase.

Investments by a Fund or an Underlying Fund in commercial paper will
consist of issues rated at the time A-1 and/or P-1 by S&P or Moody's Investor
Services, Inc. ("Moody's"). In addition, the Funds and the Underlying Funds may
acquire unrated commercial paper and corporate bonds that are determined by the
Advisor (Sub-Advisor) at the time of purchase to be of comparable quality to
rated instruments that may be acquired by such Fund as previously described.

The Funds and the Underlying Funds may also purchase variable amount
master demand notes which are unsecured instruments that permit the indebtedness
thereunder to vary and provide for periodic adjustments in the interest rate.
Although the notes are not normally traded and there may be no secondary market
in the notes, an investor may demand payment of the principal of the instrument
at any time. The notes are not typically rated by credit rating agencies, but
issuers of variable amount master demand notes must satisfy the same criteria as
set forth above for issuers of commercial paper. If an issuer of a variable
amount master demand note defaulted on its payment obligation, an investor might
be unable to dispose of the note because of the absence of a secondary market
and might, for this or other reasons, suffer a loss to the extent of the
default. The Funds and the Underlying Funds invest in variable amount master
notes only when the Advisor (Sub-Advisor) deems the investment to involve
minimal credit risk.

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Mortgage-Related Securities. Subject to applicable credit criteria, each
Fixed Income Fund and the Cash Investment Fund may purchase asset-backed
securities (i.e., securities backed by mortgages, installment sales contracts,
credit card receivables or other assets). There are a number of important
differences among the agencies and instrumentalities of the U.S. Government that
issue mortgage-related securities and among the securities that they issue.
Mortgage-related securities guaranteed by the Government National Mortgage
Association ("GNMA") include GNMA Mortgage Pass-Through Certificates (also known
as "Ginnie Maes") which are guaranteed as to the timely payment of principal and
interest by GNMA and such guarantee is backed by the full faith and credit of
the United States. GNMA is a wholly-owned U.S. Government corporation within the
Department of Housing and Urban Development. GNMA certificates also are
supported by the authority of GNMA to borrow funds from the U.S. Treasury to
make payments under its guarantee. Mortgage- related securities issued by the
Federal National Mortgage Association ("FNMA") include FNMA Guaranteed Mortgage
Pass- Through Certificates (also known as "Fannie Maes") which are solely the
obligations of the FNMA and are not backed by or entitled to the full faith and
credit of the United States, but are supported by the right of the issuer to
borrow from the Treasury. FNMA is a government-sponsored organization owned
entirely by private stockholders. Fannie Maes are guaranteed as to timely
payment of the principal and interest by FNMA. Mortgage-related securities
issued by the Federal Home Loan Mortgage Corporation ("FHLMC") include FHLMC
Mortgage Participation Certificates (also known as "Freddie Macs" or "PCs").
FHLMC is a corporate instrumentality of the United States, created pursuant to
an Act of Congress, which is owned entirely by Federal Home Loan Banks. Freddie
Macs are not guaranteed by the United States or by any Federal Home Loan Banks
and do not constitute a debt or obligation of the United States or of any
Federal Home Loan Bank. Freddie Macs entitle the holder to timely payment of
interest, which is guaranteed by the FHLMC. FHLMC guarantees either ultimate
collection or timely payment of all principal payments on the underlying
mortgage loans. When FHLMC does not guarantee timely payment of principal, FHLMC
may remit the amount due on account of its guarantee of ultimate payment of
principal at any time after default on an underlying mortgage, but in no event
later than one year after it becomes payable.

Municipal Obligations. The Cash Investment Fund may, when deemed
appropriate by the Advisor in light of the Underlying Fund's investment
objective, invest in high quality municipal obligations issued by state and
local governmental issuers, the interest on which may be taxable or tax-exempt
for Federal income tax purposes, provided that such

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obligations carry yields that are competitive with those of other types of money
market instruments of comparable quality. The Cash Investment Fund does not
expect to invest more than 5% of its net assets in such municipal obligations
during its current fiscal year.

Non-Domestic Bank Obligations. Non-domestic bank obligations include
Eurodollar Certificates of Deposit, which are U.S. dollar-denominated
certificates of deposit issued by offices of foreign and domestic banks located
outside the United States; Eurodollar Time Deposits, which are U.S.
dollar-denominated deposits in a foreign branch of a U.S. bank or a foreign
bank; Canadian Time Deposits, which are essentially the same as ETDs except they
are issued by Canadian offices of major Canadian banks; Schedule Bs which are
obligations issued by Canadian branches of foreign or domestic banks; Yankee
Certificates of Deposit, which are U.S. dollar-denominated certificates of
deposit issued by a U.S. branch of a foreign bank and held in the United States;
and Yankee Bankers' Acceptances, which are U.S. dollar-denominated bankers'
acceptances issued by a U.S. branch of a foreign bank and held in the United
States.

Options. The Underlying Funds may write covered call options, buy put
options, buy call options and write secured put options in an amount not
exceeding 5% of their net assets. Such options may relate to particular
securities and may or may not be listed on a national securities exchange and
issued by the Options Clearing Corporation. Options trading is a highly
specialized activity which entails greater than ordinary investment risk.
Options on particular securities may be more volatile than the underlying
securities, and therefore, on a percentage basis, an investment in options may
be subject to greater fluctuation than an investment in the underlying
securities themselves. For risks associated with options on foreign currencies,
see Appendix B to this Statement of Additional Information.

A call option for a particular security gives the purchaser of the option
the right to buy, and a writer the obligation to sell, the underlying security
at the stated exercise price at any time prior to the expiration of the option,
regardless of the market price of the security. The premium paid to the writer
is in consideration for undertaking the obligations under the option contract. A
put option for a particular security gives the purchaser the right to sell the
underlying security at the stated exercise price at any time prior to the
expiration date of the option, regardless of the market price of the security.

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<PAGE>

The writer of an option that wished to terminate its obligation may effect
a "closing purchase transaction." This is accomplished by buying an option of
the same series as the option previously written. The effect of the purchase is
that the writer's position will be canceled by the clearing corporation.
However, a writer may not effect a closing purchase transaction after being
notified of the exercise of an option. Likewise, an investor who is the holder
of an option may liquidate its position by effecting a "closing sale
transaction." The cost of such a closing purchase plus transaction costs may be
greater than the premium received upon the original option, in which event the
relevant Underlying Fund will have incurred a loss in the transaction. There is
no guarantee that either a closing purchase or a closing sale transaction can be
effected.

Effecting a closing transaction in the case of a written call option will
permit the Underlying Funds to write another call option on the underlying
security with either a different exercise price or expiration date or both, or
in the case of a written put option, will permit the funds to write another put
option to the extent that the exercise price thereof is secured by deposited
cash or short-term securities. Also, effecting a closing transaction will permit
the cash or proceeds from the concurrent sale of any securities subject to the
option to be used for other Underlying Fund investments. If an Underlying Fund
desires to sell a particular security from its portfolio on which it has written
a call option, it will effect a closing transaction prior to or concurrent with
the sale of the security.

The Multi-Season, Real Estate, NetNet, Framlington and International Bond
Funds may write options in connection with buy-and-write transactions; that is,
the Underlying Funds may purchase a security and then write a call option
against that security. The exercise price of the call the Underlying Funds
determine to write will depend upon the expected price movement of the
underlying security. The exercise price of a call option may be below
("in-the-money"), equal to ("at-the- money") or above ("out-of-the-money") the
current value of the underlying security at the time the option is written. Buy-
and-write transactions using in-the-money call options may be used when it is
expected that the price of the underlying security will remain flat or decline
moderately during the option period. Buy-and-write transactions using
out-of-the- money call options may be used when it is expected that the premiums
received from writing the call option plus the appreciation in the market price
of the underlying security up to the exercise price will be greater than the
appreciation in the price of the underlying security alone. If the call options
are exercised in such transactions, the maximum gain

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to the relevant Underlying Fund will be the premium received by it for writing
the option, adjusted upwards or downwards by the difference between the fund's
purchase price of the security and the exercise price. If the options are not
exercised and the price of the underlying security declines, the amount of such
decline will be offset in part, or entirely, by the premium received.

The Underlying Funds (excluding the Mid-Cap, Multi- Season, Real Estate,
Value, and International Bond Funds) will write call options only if they are
"covered." In the case of a call option on a security, the option is "covered"
if an Underlying Fund owns the security underlying the call or has an absolute
and immediate right to acquire that security without additional cash
consideration (or, if additional cash consideration is required, cash or cash
equivalents in such amount as are held in a segregated account by its custodian)
upon conversion or exchange of other securities held by it. For a call option on
an index, the option is covered if an Underlying Fund maintains with its
Custodian cash or cash equivalents equal to the contract value. A call option is
also covered if an Underlying Fund holds a call on the same security or index as
the call written where the exercise price of the call held is (i) equal to or
less than the exercise price of the call written, or (ii) greater than the
exercise price of the call written provided the difference is maintained by the
portfolio in cash or cash equivalents in a segregated account with its
custodian. The Mid-Cap, Multi- Season, Real Estate and Value Funds may write
call options that are not covered for cross-hedging purposes. Each of the
Mid-Cap, Multi-Season, Real Estate and Value Funds will limit its investment in
uncovered put and call options purchased or written by the Fund to 5% of the
Fund's total assets. The International Bond Fund will limit its investment in
uncovered put and call options purchased or written by the Fund to 25% of the
Fund's total assets. The Underlying Funds will write put options only if they
are "secured" by cash or cash equivalents maintained in a segregated account by
the funds' custodian in an amount not less than the exercise price of the option
at all times during the option period.

The writing of covered put options is similar in terms of risk/return
characteristics to buy-and-write transactions. If the market price of the
underlying security rises or otherwise is above the exercise price, the put
option will expire worthless and the relevant Underlying Fund's gain will be
limited to the premium received. If the market price of the underlying security
declines or otherwise is below the exercise price, the Underlying Fund may elect
to close the position or take delivery of the security at the exercise price and
the fund's return will be the premium received from

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<PAGE>

the put option minus the amount by which the market price of the security is
below the exercise price.

Each of the Underlying Funds may purchase put options to hedge against a
decline in the value of its portfolio. By using put options in this way, an
Underlying Fund will reduce any profit it might otherwise have realized in the
underlying security by the amount of the premium paid for the put option and by
transaction costs. Each of the Underlying Funds may purchase call options to
hedge against an increase in the price of securities that it anticipates
purchasing in the future. The premium paid for the call option plus any
transaction costs will reduce the benefit, if any, realized by the relevant
Underlying Fund upon exercise of the option, and, unless the price of the
underlying security rises sufficiently, the option may expire worthless to the
fund.

When an Underlying Fund purchases an option, the premium paid by it is
recorded as an asset of the fund. When the Underlying Fund writes an option, an
amount equal to the net premium (the premium less the commission) received by
the fund is included in the liability section of the fund's statement of assets
and liabilities as a deferred credit. The amount of this asset or deferred
credit will be subsequently marked-to- market to reflect the current value of
the option purchased or written. The current value of the traded option is the
last sale price or, in the absence of a sale, the average of the closing bid and
asked prices. If an option purchased by the Underlying Fund expires unexercised
the fund realizes a loss equal to the premium paid. If the Underlying Fund
enters into a closing sale transaction on an option purchased by it, the
Underlying Fund will realize a gain if the premium received by the fund on the
closing transaction is more than the premium paid to purchase the option, or a
loss if it is less. If an option written by the Underlying Fund expires on the
stipulated expiration date or if the fund enters into a closing purchase
transaction, it will realize a gain (or loss if the cost of a closing purchase
transaction exceeds the net premium received when the option is sold) and the
deferred credit related to such option will be eliminated. If an option written
by the Underlying Fund is exercised, the proceeds of the sale will be increased
by the net premium originally received and the fund will realize a gain or loss.

There are several risks associated with transactions in options on
securities and indices. For example, there are significant differences between
the securities and options markets that could result in an imperfect correlation
between these markets, causing a given transaction not to achieve its
objectives. An option writer, unable to effect a closing purchase transaction,
will not be able to sell the underlying

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<PAGE>

security (in the case of a covered call option) or liquidate the segregated
account (in the case of a secured put option) until the option expires or the
optioned security is delivered upon exercise with the result that the writer in
such circumstances will be subject to the risk of market decline or appreciation
in the security during such period.

There is no assurance that an Underlying Fund will be able to close an
unlisted option position. Furthermore, unlisted options are not subject to the
protections afforded purchasers of listed options by the Options Clearing
Corporation, which performs the obligations of its members who fail to do so in
connection with the purchase or sale of options.

In addition, a liquid secondary market for particular options, whether
traded over-the-counter or on a national securities exchange ("Exchange") may be
absent for reasons which include the following: there may be insufficient
trading interest in certain options; restrictions may be imposed by an Exchange
on opening transactions or closing transactions or both; trading halts,
suspensions or other restrictions may be imposed with respect to particular
classes or series of options or underlying securities; unusual or unforeseen
circumstances may interrupt normal operations on an Exchange; the facilities of
an Exchange or the Options Clearing Corporation may not at all times be adequate
to handle current trading value; or one or more Exchanges could, for economic or
other reasons, decide or be compelled at some future date to discontinue the
trading of options (or a particular class or series of options), in which event
the secondary market on that Exchange (or in that class or series of options)
would cease to exist, although outstanding options that had been issued by the
Options Clearing Corporation as a result of trades on that Exchange would
continue to be exercisable in accordance with their terms.

Currency transactions, including options on currencies and currency
futures, are subject to risks different from those of other portfolio
transactions. Because currency control is of great importance to the issuing
governments and influences economic planning and policy, purchases and sales of
currency and related instruments can be negatively affected by government
exchange controls, blockages, and manipulations or exchange restrictions imposed
by governments. These can result in losses to the Underlying Fund if it is
unable to deliver or receive currency or funds in settlement of obligations and
could also cause hedges it has entered into to be rendered useless, resulting in
full currency exposure as well as the incurring of transaction costs. Buyers and
sellers of currency futures are subject to the same risks that

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<PAGE>

apply to the use of futures generally. Further, settlement of a currency futures
contract for the purchase of most currencies must occur at a bank based in the
issuing nation. Trading options on currency futures is relatively new, and the
ability to establish and close out positions on such options is subject to the
maintenance of a liquid market which may not always be available. Currency
exchange rates may fluctuate based on factors extrinsic to that country's
economy.

The Mid-Cap Fund and Value Fund will not purchase put or call options if
aggregate premiums paid for such options would exceed 25% of the Underlying
Fund's total assets. The Multi- Season Fund will not purchase put or call
options if aggregate premiums paid for such options would exceed 20% of the
Underlying Fund's total assets. The Real Estate Fund will not hedge more than
30% of its total assets and will not write covered call options against more
than 15% of the value of the equity securities held in its portfolio. The
Framlington Funds and the NetNet Fund will not write covered call options
against more than 30% of the value of the equity securities held in its
portfolio.

Real Estate Securities. The Real Estate Fund may invest without limit in
shares of real estate investment trusts ("REITs"). REITs pool investors' funds
for investment primarily in income producing real estate or real estate loans or
interests. A REIT is not taxed on income distributed to shareholders if it
complies with several requirements relating to its organization, ownership,
assets, and income and a requirement that it distribute to its shareholders at
least 95% of it taxable income (other than net capital gains) for each taxable
year. REITs can generally be classified as Equity REITs, Mortgage REITs and
Hybrid REITs. Equity REITs, which invest the majority of their assets directly
in real property, derive their income primarily from rents. Equity REITs can
also realize capital gains by selling properties that have appreciated in value.
Mortgage REITs, which invest the majority of their assets in real estate
mortgages, derive their income primarily from interest payments. Hybrid REITs
combine the characteristics of both Equity REITs and Mortgage REITs. The Real
Estate Fund will not invest in real estate directly, but only in securities
issued by real estate companies. However, the Real Estate Fund may be subject to
risks similar to those associated with the direct ownership of real estate (in
addition to securities markets risks) because of its policy of concentration in
the securities of companies in the real estate industry. These include declines
in the value of real estate, risks related to general and local economic
conditions, dependency on management skill, heavy cash flow dependency, possible
lack of availability of mortgage funds, overbuilding, extended vacancies of

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properties, increased competition, increases in property taxes and operating
expenses, changes in zoning laws, losses due to costs resulting from the
clean-up of environmental problems, liability to third parties for damages
resulting from environmental problems, casualty or condemnation losses,
limitations on rents, changes in neighborhood values and the appeal of
properties to tenants and changes in interest rates.

In addition to these risks, Equity REITs may be affected by changes in the
value of the underlying property owned by the trusts, while Mortgage REITs may
be affected by the quality of any credit extended. Further, Equity and Mortgage
REITs are dependent upon management skills and generally may not be diversified.
Equity and Mortgage REITs are also subject to heavy cash flow dependency,
defaults by borrowers and self-liquidation. In addition, Equity and Mortgage
REITs could possibly fail to qualify for the beneficial tax treatment available
to real estate investment trusts under the Internal Revenue Code of 1986, as
amended (the "Code"), or to maintain their exemptions from registration under
the 1940 Act. The above factors may also adversely affect a borrower's or a
lessee's ability to meet its obligations to the REIT. In the event of a default
by a borrower or lessee, the REIT may experience delays in enforcing its rights
as a mortgagee or lessor and may incur substantial costs associated with
protecting investments.

Repurchase Agreements. The Funds and the Underlying Funds may agree to
enter into repurchase agreements with financial institutions such as member
banks of the Federal Reserve System, any foreign bank or any domestic or foreign
broker/dealer that is recognized as a reporting government securities dealer,
subject to the seller's agreement to repurchase them at an agreed-upon time and
price ("repurchase agreements"). The Advisor (Sub-Advisor with respect to the
Framlington Funds) will review and continuously monitor the creditworthiness of
the seller under a repurchase agreement, and will require the seller to maintain
liquid assets in a segregated account in an amount that is greater than the
repurchase price. Default by, or bankruptcy of the seller would, however, expose
a Fund to possible loss because of adverse market action or delays in connection
with the disposition of underlying obligations except with respect to repurchase
agreements secured by U.S. Government securities. With respect to the Money
Market Funds, the securities held subject to a repurchase agreement may have
stated maturities exceeding thirteen months, provided the repurchase agreement
itself matures in 397 days.

The repurchase price under the repurchase agreements described in each
Prospectus generally equals the price paid

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by a fund plus interest negotiated on the basis of current short-term rates
(which may be more or less than the rate on the securities underlying the
repurchase agreement).

Securities subject to repurchase agreements will be held, as applicable,
by the Trust's, Framlington's or the Company's custodian (or sub-custodian) in
the Federal Reserve/Treasury book-entry system or by another authorized
securities depositary. Repurchase agreements are considered to be loans by a
Fund or Underlying Fund under the 1940 Act.

Rights and Warrants. As stated in the Prospectus, the Equity Funds may
purchase warrants, which are privileges issued by corporations enabling the
owners to subscribe to and purchase a specified number of shares of the
corporation at a specified price during a specified period of time. Subscription
rights normally have a short life span to expiration. The purchase of warrants
involves the risk that an Underlying Fund could lose the purchase value of a
warrant if the right to subscribe to additional shares is not exercised prior to
the warrant's expiration. Also, the purchase of warrants involves the risk that
the effective price paid for the warrant added to the subscription price of the
related security may exceed the value of the subscribed security's market price
such as when there is no movement in the level of the underlying security. Each
Underlying Fund will not invest more than 5% of its total assets, taken at
market value, in warrants, or more than 2% of its total assets, taken at market
value, in warrants not listed on the New York or American Stock Exchanges.
Warrants acquired by an Underlying Fund in units or attached to other securities
are not subject to this restriction.

Stand-by Commitments. The Cash Investment Fund may enter into stand-by
commitments with respect to municipal obligations held by it. Under a stand-by
commitment, a dealer agrees to purchase at the Underlying Fund's option a
specified municipal obligation at its amortized cost value to the fund plus
accrued interest, if any. Stand-by commitments may be exercisable by an
Underlying Fund at any time before the maturity of the underlying municipal
obligations and may be sold, transferred or assigned only with the instruments
involved.

The Company expects that stand-by commitments will generally be available
without the payment of any direct or indirect consideration. However, if
necessary or advisable, the Cash Investment Fund may pay for a stand-by
commitment either separately in cash or by paying a higher price for municipal
obligations which are acquired subject to the commitment (thus reducing the
yield to maturity otherwise

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available for the same securities). The total amount paid in either manner for
outstanding stand-by commitments held by the Underlying Fund will not exceed 1/2
of 1% of the value of the Underlying Fund's total assets calculated immediately
after each stand-by commitment is acquired.

Stock Index Futures, Options on Stock and Bond Indices and Options on
Stock and Bond Index Futures Contracts. The Equity and Fixed Income Funds
(except the International Bond Fund) may purchase and sell stock index futures,
options on stock and bond indices and options on stock index futures contracts
as a hedge against movements in the equity and bond markets. The International
Bond Fund may purchase and sell options on bond index futures contracts as a
hedge against movements in the bond markets.

A stock index futures contract is an agreement in which one party agrees
to deliver to the other an amount of cash equal to a specific dollar amount
times the difference between the value of a specific stock index at the close of
the last trading day of the contract and the price at which the agreement is
made. No physical delivery of securities is made.

Options on stock and bond indices are similar to options on specific
securities, described above, except that, rather than the right to take or make
delivery of the specific security at a specific price, an option on a stock or
bond index gives the holder the right to receive, upon exercise of the option,
an amount of cash if the closing level of that stock or bond index is greater
than, in the case of a call option, or less than, in the case of a put option,
the exercise price of the option. This amount of cash is equal to such
difference between the closing price of the index and the exercise price of the
option expressed in dollars times a specified multiple. The writer of the option
is obligated, in return for the premium received, to make delivery of this
amount. Unlike options on specific securities, all settlements of options on
stock or bond indices are in cash, and gain or loss depends on general movements
in the stocks included in the index rather than price movements in particular
stocks.

If the Advisor (Sub-Advisor with respect to the Framlington Funds) expects
general stock or bond market prices to rise, it might purchase a stock index
futures contract, or a call option on that index, as a hedge against an increase
in prices of particular securities it ultimately wants to buy. If in fact the
index does rise, the price of the particular securities intended to be purchased
may also increase, but that increase would be offset in part by the increase in
the value of the Underlying Funds' futures contract or index

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option resulting from the increase in the index. If, on the other hand, the
Advisor (Sub-Advisor) expects general stock or bond market prices to decline, it
might sell a futures contract, or purchase a put option, on the index. If that
index does in fact decline, the value of some or all of the securities in the
Underlying Funds' portfolio may also be expected to decline, but that decrease
would be offset in part by the increase in the value of the Underlying Funds'
position in such futures contract or put option.

The Underlying Funds (except the International Bond Fund) may purchase and
write call and put options on stock index futures contracts and each such
Underlying Fund and the International Bond Fund may purchase and write call and
put options on bond index futures contracts. Each such Underlying Fund may use
such options on futures contracts in connection with its hedging strategies in
lieu of purchasing and selling the underlying futures or purchasing and writing
options directly on the underlying securities or indices. For example, such
Underlying Funds may purchase put options or write call options on stock and
bond index futures (only bond index futures in the case of the International
Bond Fund), rather than selling futures contracts, in anticipation of a decline
in general stock or bond market prices or purchase call options or write put
options on stock or bond index futures, rather than purchasing such futures, to
hedge against possible increases in the price of securities which such
Underlying Funds intend to purchase.

In connection with transactions in stock or bond index futures, stock or
bond index options and options on stock index or bond futures, such Underlying
Funds will be required to deposit as "initial margin" an amount of cash and
short-- term U.S. Government securities equal to from 5% to 8% of the contract
amount. Thereafter, subsequent payments (referred to as "variation margin") are
made to and from the broker to reflect changes in the value of the option or
futures contract. No such Underlying Fund may at any time commit more than 5% of
its total assets to initial margin deposits on futures contracts, index options
and options on futures contracts.

Stripped Securities. The Fixed Income and Money Market Funds may acquire
U.S. Government obligations and their unmatured interest coupons that have been
separated ("stripped") by their holder, typically a custodian bank or investment
brokerage firm. Having separated the interest coupons from the underlying
principal of the U.S. Government obligations, the holder will resell the
stripped securities in custodial receipt programs with a number of different
names, including "Treasury Income Growth Receipts" ("TIGRs") and

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"Certificate of Accrual on Treasury Securities" ("CATS"). The stripped coupons
are sold separately from the underlying principal, which is usually sold at a
deep discount because the buyer receives only the right to receive a future
fixed payment on the security and does not receive any rights to periodic
interest (cash) payments. The underlying U.S. Treasury bonds and notes
themselves are held in book-entry form at the Federal Reserve Bank or, in the
case of bearer securities (i.e., unregistered securities which are ostensibly
owned by the bearer or holder), in trust on behalf of the owners. Counsel to the
underwriters of these certificates or other evidences of ownership of U.S.
Treasury securities have stated that, in their opinion, purchasers of the
stripped securities most likely will be deemed the beneficial holders of the
underlying U.S. Government obligations for federal tax and securities purposes.
The Trust is not aware of any binding legislative, judicial or administrative
authority on this issue.

Only instruments which are stripped by the issuing agency will be
considered U.S. Government obligations. Securities such as CATS and TIGRs which
are stripped by their holder do not qualify as U.S. Government obligations.

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

In addition, the Fixed Income Funds may invest in stripped mortgage-backed
securities ("SMBS"), which represent beneficial ownership interests in the
principal distributions and/or the interest distributions on mortgage assets.
SMBS are usually structured with two classes that receive different proportions
of the interest and principal distributions on a pool of mortgage assets. One
type of SMBS will have one class receiving some of the interest and most of the
principal from the mortgage assets, while the other class will receive most of
the interest and the remainder of the principal. In the most common case, one
class of SMBS will receive all of the interest (the interest-only or "IO"
class), while the other

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<PAGE>

class will receive all of the principal (the principal-only or
"PO" class). SMBS may be issued by FNMA or FHLMC.

The original principal amount, if any, of each SMBS class represents the
amount payable to the holder thereof over the life of such SMBS class from
principal distributions of the underlying mortgage assets, which will be zero in
the case of an IO class. Interest distributions allocable to a class of SMBS, if
any, consist of interest at a specified rate on its principal amount, if any, or
its notional principal amount in the case of an IO class. The notional principal
amount is used solely for purposes of the determination of interest
distributions and certain other rights of holders of such IO class and does not
represent an interest in principal distributions of the mortgage assets.

Yields on SMBS will be extremely sensitive to the prepayment experience on
the underlying mortgage loans, and there are other associated risks. For IO
classes of SMBS and SMBS that were purchased at prices exceeding their principal
amounts there is a risk that an Underlying Fund may not fully recover its
initial investment.

The determination of whether a particular government- issued IO or PO
backed by fixed-rate mortgages is liquid may be made under guidelines and
standards established by the Board of Trustees. Such securities may be deemed
liquid if they can be disposed of promptly in the ordinary course of business at
a value reasonably close to that used in the calculation of an Underlying Fund's
net asset value per share.

Supranational Bank Obligations. Supranational banks are international
banking institutions designed or supported by national governments to promote
economic reconstruction, development or trade between nations (e.g., The World
Bank). Obligations of supranational banks may be supported by appropriated but
unpaid commitments of their member countries and there is no assurance these
commitments will be undertaken or met in the future.

U.S. Government Obligations. The Funds and the
Underlying Funds may purchase obligations issued or guaranteed
by the U.S. Government and, except in the case of the U.S.
Treasury Money Market Fund, U.S. Government agencies and
instrumentalities. Obligations of certain agencies and
instrumentalities of the U.S. Government, such as those of the
GNMA, are supported by the full faith and credit of the U.S.
Treasury. Others, such as those of the Export-Import Bank of
the United States, are supported by the right of the issuer to
borrow from the U.S. Treasury; and still others, such as those
of the Student Loan Marketing Association, are supported only

- 48 -

<PAGE>

by the credit of the agency or instrumentality issuing the obligation. No
assurance can be given that the U.S. Government would provide financial support
to U.S. government- sponsored instrumentalities if it is not obligated to do so
by law. Examples of the types of U.S. Government obligations that may be
acquired by the Funds include U.S. Treasury Bills, Treasury Notes and Treasury
Bonds and the obligations of Federal Home Loan Banks, Federal Farm Credit Banks,
Federal Land Banks, the Federal Housing Administration, Farmers Home
Administration, Export-Import Bank of the United States, Small Business
Administration, FNMA, Government National Mortgage Association, General Services
Administration, Student Loan Marketing Association, Central Bank for
Cooperatives, FHLMC, Federal Intermediate Credit Banks and Maritime
Administration.

Variable and Floating Rate Instruments. Debt instruments may be structured
to have variable or floating interest rates. Variable and floating rate
obligations purchased by an Underlying Fund may have stated maturities in excess
of an Underlying Fund's maturity limitation if the Underlying Fund can demand
payment of the principal of the instrument at least once during such period on
not more than thirty days' notice (this demand feature is not required if the
instrument is guaranteed by the U.S. Government or an agency thereof). These
instruments may include variable amount master demand notes that permit the
indebtedness to vary in addition to providing for periodic adjustments in the
interest rates. The Advisor (Sub-Advisor with respect to the Framlington Funds)
will consider the earning power, cash flows and other liquidity ratios of the
issuers and guarantors of such instruments and, if the instrument is subject to
a demand feature, will continuously monitor their financial ability to meet
payment on demand. Where necessary to ensure that a variable or floating rate
instrument is equivalent to the quality standards applicable to an Underlying
Fund, the issuer's obligation to pay the principal of the instrument will be
backed by an unconditional bank letter or line of credit, guarantee or
commitment to lend. The Money Market Funds will invest in variable and floating
rate instruments only when the Advisor deems the investment to involve minimal
credit risk.

In determining average weighted portfolio maturity of the Underlying
Funds, an instrument will usually be deemed to have a maturity equal to the
longer of the period remaining until the next interest rate adjustment or the
time the Underlying Fund involved can recover payment of principal as specified
in the instrument. Variable rate U.S. Government obligations held by the
Underlying Funds, however, will be deemed to have maturities equal to the period
remaining until the next interest rate adjustment.

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<PAGE>

The absence of an active secondary market for certain variable and
floating rate notes could make it difficult to dispose of the instruments, and
an Underlying Fund could suffer a loss if the issuer defaulted or during periods
that an Underlying Fund is not entitled to exercise its demand rights.

Variable and floating rate instruments held by an Underlying Fund will be
subject to the fund's limitation on illiquid investments when the fund may not
demand payment of the principal amount within seven days absent a reliable
trading market.

Guaranteed Investment Contracts. The Fixed Income Funds and the Cash
Investment Fund may make limited investments in guaranteed investment contracts
("GICs") issued by U.S. insurance companies. Pursuant to such contracts, an
Underlying Fund makes cash contributions to a deposit fund of the insurance
company's general account. The insurance company then credits to the Underlying
Fund on a monthly basis interest which is based on an index (in most cases this
index is expected to be the Salomon Brothers CD Index), but is guaranteed not to
be less than a certain minimum rate. A GIC is normally a general obligation of
the issuing insurance company and not funded by a separate account. The purchase
price paid for a GIC becomes part of the general assets of the insurance
company, and the contract is paid from the company's general assets. An
Underlying Fund will only purchase GICs from insurance companies which, at the
time of purchase, have assets of $1 billion or more and meet quality and credit
standards established by the Advisor pursuant to guidelines approved by the
Board of Trustees. Generally, GICs are not assignable or transferable without
the permission of the issuing insurance companies, and an active secondary
market in GICs does not currently exist. Therefore, GICs will normally be
considered illiquid investments, and will be acquired subject to the limitation
on illiquid investments.

When-Issued Purchases and Forward Commitments (Delayed- Delivery
Transactions). When-issued purchases and forward commitments (delayed-delivery
transactions) are commitments by an Underlying Fund to purchase or sell
particular securities with payment and delivery to occur at a future date
(perhaps one or two months later). These transactions permit the Underlying Fund
to lock-in a price or yield on a security, regardless of future changes in
interest rates.

When an Underlying Fund agrees to purchase securities on a when-issued or
forward commitment basis, the Custodian will set aside cash or liquid portfolio
securities equal to the amount of the commitment in a separate account.
Normally, the

- 50 -

<PAGE>

Custodian will set aside portfolio securities to satisfy a purchase commitment,
and in such a case the Underlying Fund may be required subsequently to place
additional assets in the separate account in order to ensure that the value of
the account remains equal to the amount of the Underlying Fund's commitments. It
may be expected that the market value of the Underlying Fund's net assets will
fluctuate to a greater degree when it sets aside portfolio securities to cover
such purchase commitments than when it sets aside cash. Because an Underlying
Fund's liquidity and ability to manage its portfolio might be affected when it
sets aside cash or portfolio securities to cover such purchase commitments, the
Advisor expects that its commitments to purchase when-issued securities and
forward commitments will not exceed 25% of the value of an Underlying Fund's
total assets absent unusual market conditions.

An Underlying Fund will purchase securities on a when- issued or forward
commitment basis only with the intention of completing the transaction and
actually purchasing the securities. If deemed advisable as a matter of
investment strategy, however, an Underlying Fund may dispose of or renegotiate a
commitment after it is entered into, and may sell securities it has committed to
purchase before those securities are delivered to the Underlying Fund on the
settlement date. In these cases the Underlying Fund may realize a taxable
capital gain or loss.

When an Underlying Fund engages in when-issued and forward commitment
transactions, it relies on the other party to consummate the trade. Failure of
such party to do so may result in the Underlying Fund's incurring a loss or
missing an opportunity to obtain a price considered to be advantageous.

The market value of the securities underlying a when- issued purchase or a
forward commitment to purchase securities, and any subsequent fluctuations in
their market value, are taken into account when determining the market value of
an Underlying Fund starting on the day the fund agrees to purchase the
securities. The Underlying Fund does not earn interest on the securities it has
committed to purchase until they are paid for and delivered on the settlement
date.

Yields and Ratings. The yields on certain obligations, including the money
market instruments in which each Fund and Underlying Fund may invest (such as
commercial paper and bank obligations), are dependent on a variety of factors,
including general money market conditions, conditions in the particular market
for the obligation, the financial condition of the issuer, the size of the
offering, the maturity of the

- 51 -

<PAGE>

obligation and the ratings of the issue. The ratings of S&P, Moody's, Duff &
Phelps Credit Rating Co., Thomson Bank Watch, Inc., and other nationally
recognized statistical NRSROs represent their respective opinions as to the
quality of the obligations they undertake to rate. Ratings, however, are general
and are not absolute standards of quality. Consequently, obligations with the
same rating, maturity and interest rate may have different market prices.

With respect to each of the Money Market Funds, securities (other than
U.S. Government securities) must be rated (generally, by at least two NRSROs)
within the two highest rating categories assigned to short-term debt securities.
In addition, each of the Cash Investment Fund and the Money Market Fund (a) will
not invest more than 5% of its total assets in securities rated in the second
highest rating category by such NRSROs and will not invest more than 1% of its
total assets in such securities of any one issuer, and (b) intends to limit
investments in the securities of any single issuer (other than securities issued
or guaranteed by the U.S. Government, its agencies or instrumentalities) to not
more than 5% of the Underlying Fund's total assets at the time of purchase,
provided that the Underlying Fund may invest up to 25% of its total assets in
the securities of any one issuer for a period of up to three business days.
Unrated and certain single rated securities (other than U.S. Government
securities) may be purchased by the Money Market Funds, but are subject to a
determination by the Advisor, in accordance with procedures established by the
Boards of Trustees and Directors, that the unrated and single rated securities
are of comparable quality to the appropriate rated securities.

Other. Subsequent to its purchase by an Underlying Fund, a rated security
may cease to be rated or its rating may be reduced below the minimum rating
required for purchase by the Underlying Fund. The Boards of Trustees and
Directors, as applicable, or the Advisor (Sub-Advisor with respect to the
Framlington Funds), pursuant to guidelines established by the Boards, will
consider such an event in determining whether the Underlying Fund involved
should continue to hold the security in accordance with the interests of the
fund and applicable regulations of the SEC.

It is possible that unregistered securities purchased by an Underlying
Fund in reliance upon Rule 144A under the Securities Act of 1933, as amended,
could have the effect of increasing the level of the Underlying Fund's
illiquidity to the extent that qualified institutional buyers become, for a
period, uninterested in purchasing these securities.

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<PAGE>

INVESTMENT LIMITATIONS

Each Fund is subject to the investment limitations enumerated in this
section which may be changed with respect to a particular Fund only by a vote of
the holders of a majority of such Fund's outstanding shares (as defined under
"Miscellaneous -- Shareholder Approvals").

No Fund may:

1. Invest more than 25% of its total assets in any one industry
(securities issued or guaranteed by the United States
Government, its agencies or instrumentalities are not
considered to represent industries); this limitation does not
apply to investment by the Funds in investment companies;

2. With respect to 75% of the Fund's assets invest
more than 5% of the Fund's assets (taken at
market value at the time of purchase) in the
outstanding securities of any single issuer or
own more than 10% of the outstanding voting
securities of any one issuer, in each case
other than securities issued by other
investment companies or issued or guaranteed by
the United States Government, its agencies or
instrumentalities;

3. Borrow money or enter into reverse repurchase
repurchase agreements except that the Funds may
(i) borrow money or enter into reverse
repurchase agreements for temporary purposes in
amounts not exceeding 5% of its total assets
and (ii) borrow money to meet redemption
requests, in amounts (when aggregated with
amounts borrowed under clause (i)) not
exceeding 33 1/3% of its total assets;

4. Issue any senior security (as defined in Section 18(f) of the
1940 Act) except as permitted under the 1940 Act.

5. Make loans of securities to other persons in excess of 25% of
a Fund's total assets; provided the Funds may invest without
limitation in short-term debt obligations (including
repurchase agreements) and publicly distributed debt
obligations;

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<PAGE>

6. Underwrite securities of other issuers, except
insofar as a Fund may be deemed an underwriter
under the Securities Act of 1933, as amended,
in selling portfolio securities;

7. Purchase or sell real estate or any interest therein,
including interests in real estate limited partnerships,
except securities issued by companies (including real estate
investment trusts) that invest in real estate or interests
therein.

Additional investment restrictions adopted by each Fund, which may be
changed by the Board of Directors of the Company without shareholder vote,
provide that a Fund may not invest more than 15% of its net assets (taken at
market value at the time of purchase) in securities which cannot be readily
resold because of legal or contractual restrictions and which are not otherwise
marketable.

If a percentage limitation is satisfied at the time of investment, a later
increase or decrease in such percentage resulting from a change in the value of
a Fund's investments will not constitute a violation of such limitation, except
that any borrowing by a Fund that exceeds the fundamental investment limitations
stated above must be reduced to meet such limitations within the period required
by the 1940 Act (currently three days). Otherwise, a Fund may continue to hold a
security even though it causes the Fund to exceed a percentage limitation
because of fluctuation in the value of the Fund's assets.

DIRECTORS AND OFFICERS

The trustees, directors and executive officers of the Company, and their
business addresses and principal occupations during the past five years, are:

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<PAGE>

<TABLE>
<S> <C> <C>
Principal Occupation
Name, Address and Age Position with Company During Last Five Years

Charles W. Elliott 1 Chairman of the Board of Senior Advisor to the President - Western
3338 Bronson Boulevard Directors Michigan University since July 1995;
Kalamazoo, MI 49008 Executive Vice President -
Age: 64 Administration & Chief Financial Officer,
Kellogg Company from January 1987
through June 1995; before that Price
Waterhouse. Board of Directors,
Steelcase Financial Corporation

John Rakolta, Jr. Director and Vice Chairman, Walbridge Aldinger
1876 Rathmor Chairman of the Board of Company
Bloomfield Hills, MI 48304 and Directors
Age: 49

Thomas B. Bender Director Investment Advisor, Financial &
7 Wood Ridge Road Investment Management Group
Glen Arbor, MI 49636 (since April, 1991); Vice President
Age: 63 Institutional Sales, Kidder, Peabody & Co.
(Retired April, 1991).

David J. Brophy Director Professor, University of Michigan;
1025 Martin Place Director, River Place Financial
Ann Arbor, MI 48104 Corp.; Trustee, Renaissance Assets
Age: 60 Trust.

Dr. Joseph E. Champagne Director Corporate and Executive Consultant since
319 Snell Road September 1995; prior to that Chancellor,
Rochester, MI 48306 Lamar University from September 1994
Age: 58 until September 1995; before that
Consultant to Management, Lamar
University; President and Chief
Executive Officer, Crittenton
Corporation, Crittenton
Development Corporation until
August 1993; before that
President, Oakland University of
Rochester, MI, until August 1991;
Member, Board of Directors, Ross
Operating Valve of Troy, MI.

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

1 Director is an "interested person" of the Company as defined in the 1940 Act.

- 55 -

<PAGE>

Principal Occupation
Name, Address and Age Position with Company During Last Five Years

Thomas D. Eckert Director President and COO, Mid-Atlantic
10726 Falls Pointe Drive Group of Pulte Home Corporation
Great Falls, VA 22066
Age: 49

Jack L. Otto Director Retired; Director of Standard
6532 W. Beech Tree Road Federal Bank; Executive Director,
Glen Arbor, MI 49636 McGregor Fund (a private
Age: 70 philanthropic foundation) 1981-1985;
Managing Partner, Detroit office
of Ernst & Young, until 1981.

Arthur DeRoy Rodecker Director President, Rodecker & Company,
4000 Town Center Investment Brokers, Inc. since
Suite 101 November 1976; President, RAC
Southfield, MI 48075 Advisors, Inc., Registered Investment
Age: 69 Advisor since February 1979; President
and Trustee, Helen L. DeRoy Foundation,
a charitable foundation; Vice President
and Trustee, DeRoy Testamentary
Foundation, a charitable foundation;
Trustee, Providence Hospital Foundation.

Lee P. Munder President President and CEO of the Advisor;
480 Pierce Street Chief Executive Officer and President of
Suite 300 Old MCM; Chief
Birmingham, MI 48009 Executive Officer of
Age: 51 World Asset Management; and Director,
LPM Investment Services, Inc. ("LPM").

Terry H. Gardner Vice President, Vice President and Chief Financial
480 Pierce Street Chief Financial Officer Officer of the Advisor and World Asset
Suite 300 and Treasurer Management; Vice President and Chief
Birmingham, MI 48009 Financial Officer of Old MCM; Audit
Age: 36 Manager of Arthur Andersen & Co. (1991
to February 1993); Secretary of LPM.

Paul Tobias Vice President Executive Vice President and Chief
480 Pierce Street Operating Officer of the
Suite 300 Advisor (since April 1995) and
Birmingham, MI 48009 Executive Vice President of
Age: 45 Comerica, Inc.

- 56 -

<PAGE>

Principal Occupation
Name, Address and Age Position with Company During Last Five Years

Gerald Seizert Vice President Executive Vice President and Chief
480 Pierce Street Investment Officer/Equities of the
Suite 300 Advisor (since April 1995);
Birmingham, MI 48009 Managing Director (1991-1995),
Age: 44 Director (1992-1995) and Vice President
(1984-1991) of Loomis, Sayles and
Company, L.P.

Elyse G. Essick Vice President Vice President and Director of
480 Pierce Street Marketing for the Advisor;
Suite 300 Vice President and Director of
Birmingham, MI 48009 Client Services of Old MCM
Age: 38 (August 1988 to December 1994).

James C. Robinson Vice President Vice President and Chief Investment
480 Pierce Street Officer/Fixed Income for the Advisor;
Suite 300 Vice President and Director of Fixed
Birmingham, MI 48009 Income of Old MCM (1987-1994).
Age: 35

Leonard J. Barr, II Vice President Vice President and Director of Core
480 Pierce Street Equity Research of the Advisor;
Suite 300 Director and Senior Vice President
Birmingham, MI 48009 of Old MCM (since 1988);
Age: 52 Director of LPM.

Ann F. Putallaz Vice President Vice President and Director of
480 Pierce Street Fiduciary Services of the Advisor
Suite 300 (since January 1995); Director of
Birmingham, MI 48009 Client and Marketing Services of
Age: 51 Woodbridge.

Richard H. Rose Assistant Treasurer Senior Vice President, First Data
First Data Investor Services Investor Services Group, Inc.
Group, Inc. (since May 6, 1994). Formerly,
One Exchange Place Senior Vice President, The Boston
8th Floor Company Advisors, Inc. since
Boston, MA 02109 November 1989.
Age: 41

- 57 -

<PAGE>

Lisa A. Rosen Secretary, Assistant General Counsel of the Advisor since
480 Pierce Street Treasurer May, 1996; Formerly, Counsel, First
Suite 300 Data Investor Services Group, Inc.;
Birmingham, MI 48009 Assistant Vice President and Counsel
Age: 29 with The Boston Company Advisors, Inc;
Associate with Hutchins, Wheeler &
Dittmar.

Teresa M.R. Hamlin Assistant Secretary Counsel, First Data Investor Services
First Data Investor Services Group, Inc. Formerly Paralegal
Group, Inc. Manager, The Boston Company
One Exchange Place Advisors, Inc.
8th Floor
Boston, MA 02109
Age: 33

</TABLE>
Directors of the Company and Trustees of the Trust receive an
aggregate fee from the Company, the Trust, Framlington and St. Clair
Funds, Inc. ("St. Clair") for service on those organizations'
respective Boards of Directors and Trustees comprised of an annual
retainer fee, and a fee for each Board meeting attended; and are
reimbursed for all out-of-pocket expenses relating to attendance at
meetings.

The following table summarizes the compensation paid by the Trust and the
Company to their respective Directors/Trustees for the fiscal year ended June
30, 1996. Neither Framlington nor St. Clair had operations during the fiscal
year ended June 30, 1996.
<TABLE>
<S> <C> <C> <C> <C>
Pension Estimated
Aggregate Com- Retirement Annual
pensation from Benefits Accrued Benefits Total
Name of Person the Trust and as Part of upon from the
Position the Company Fund Expenses Retirement Fund Complex

Charles W. Elliott $14,000.00 None None $14,000.00
Chairman

John Rakolta, Jr. $14,000.00 None None $14,000.00
Vice Chairman

Thomas B. Bender $14,000.00 None None $14,000.00

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<PAGE>

David J. Brophy $14,000.00 None None $14,000.00
Trustee and Director

Dr. Joseph E. Champagne $14,000.00 None None $14,000.00
Trustee and Director

Thomas D. Eckert $14,000.00 None None $14,000.00
Trustee and Director

Jack L. Otto $14,000.00 None None $14,000.00
Trustee and Director

Arthur DeRoy Rodecker $14,000.00 None None $14,000.00
Trustee and Director
</TABLE>

No officer, director or employee of the Advisor, Comerica Incorporated
("Comerica"), the Distributor, the Administrator or the Transfer Agent currently
receives any compensation from
the Company.

The Company will not employ Rodecker & Company,
Investment Brokers, Inc. to effect brokerage transactions for
the Funds.

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<PAGE>

INVESTMENT ADVISORY AND OTHER SERVICE ARRANGEMENTS

Investment Advisor. The Advisor of each Fund is Munder Capital Management,
a Delaware general partnership. The Advisor replaced Munder Capital Management,
Inc. as investment advisor to the investment portfolios of the Company on
January 31, 1995, upon the closing of an agreement (the "Joint Venture
Agreement") among Old MCM, Inc., Comerica, Woodbridge and WAM, pursuant to which
Old MCM, Inc. contributed its investment advisory business and Comerica
contributed the investment advisory businesses of its indirect subsidiaries,
Woodbridge and World Asset Management, to the Advisor. The general partners of
the Advisor are Woodbridge, WAM, Old MCM, and Munder Group, LLC. Woodbridge and
WAM are wholly-owned subsidiaries of Comerica Bank -- Ann Arbor, which in turn
is a wholly-owned subsidiary of Comerica Incorporated, a publicly-held bank
holding company.

The Investment Advisory Agreement ("Advisory Agreement") between the
Advisor and the Company on behalf of each Fund was approved by the Board of
Directors of the Company on ________ __, 199_ and will continue in effect until
______________, and from year to year thereafter only if its continuance is
specifically approved annually by (a) the vote of a majority of the Board of
Directors who are not parties to the Advisory Agreement or interested persons
(as defined in the 1940 Act), cast in person at a meeting called for the purpose
of voting on approval, and (b) either (i) the vote of a majority of the
outstanding voting securities of each Fund, or (ii) the vote of a majority of
the Board of Directors. The Advisory Agreement is terminable with respect to a
Fund by vote of the Board of Directors, or by the holders of a majority of the
outstanding voting securities of the Fund, at any time without penalty, on 60
days' written notice to the Advisor. The Advisor may also terminate its advisory
relationship with respect to a Fund without penalty on 90 days' written notice
to the Company. The Advisory Agreement terminates automatically in the event of
its assignment (as defined in the 1940 Act).

Under the terms of the Advisory Agreement, the Advisor furnishes
continuing investment supervision to the Funds and is responsible for the
management of the Funds' portfolios. The responsibility for making decisions to
buy, sell or hold a particular security rests with the Advisor, subject to
review by the Company's Boards of Directors. For the advisory services provided
to the Funds and expenses assumed by it, the Advisor has agreed to a fee from
each Fund, computed daily and payable monthly on a separate Fund-by-Fund basis,
at an annual rate of .35% of each Funds' average daily net assets.

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<PAGE>

The Advisor serves as investment advisor to each of the Underlying Funds,
and for the advisory services provided and expenses assumed by it, the Advisor
has agreed to a fee from each Underlying Fund. The Advisor expects to
voluntarily reimburse expenses during the Trust's and the Company's current
fiscal year with respect to the Mid-Cap Growth Fund, Real Estate Equity
Investment Fund and Value Fund. The Advisor may discontinue such fee waivers
and/or expense reimbursements at any time, in its sole discretion. See
"MANAGEMENT--Investment Advisor" in the Prospectus for a description of the
advisory fees received by the Advisor from the Underlying Funds.

Pursuant to a sub-advisory agreement with the Advisor, Framlington
Overseas Investment Management Limited provides sub-advisory services to the
Framlington Funds, and receives a fee from the Advisor for such sub-advisory
services. See "MANAGEMENT--Sub-Advisor" in the Prospectus for a description of
the sub-advisory services and fees received by the Sub- Advisor.

For the period July 1, 1995 to October 27, 1995, the Advisor received
fees, after waivers, if any, at an effective rate of .75% of the average daily
net assets of each of the Accelerating Growth Fund, Growth & Income Fund,
International Equity Fund, and Small Company Growth Fund; .50% of the average
daily net assets of each of the Bond Fund, Intermediate Bond Fund, and U.S.
Government Income Fund; and .35% of the average daily net assets of the Cash
Investment Fund and the U.S. Treasury Money Market Fund.

For the period October 28, 1995 to June 30, 1996, the Advisor received
fees, after waivers, if any, at an effective rate of .75% of the average daily
net assets of each of the Accelerating Growth Fund, Growth & Income Fund,
International Equity Fund, and Small Company Growth Fund; and .50% of the
average daily net assets of each of the Bond Fund, Intermediate Bond Fund, and
U.S. Government Income Fund; and .35% of the average daily net assets of the
Cash Investment Fund and the U.S. Treasury Money Market Fund.

For the fiscal year ended June 30, 1996 (and for the Mid- Cap Growth Fund
and Value Fund for the period of commencement of operations to June 30, 1996)
the Advisor received fees, after waivers, if any, at an effective rate of .75%
of average daily net assets of the Multi-Season Growth Fund; .68% of average
daily net assets of the Real Estate Equity Investment Fund; .73% of average
daily net assets of the Value Fund; .71% of average daily net assets of the
Mid-Cap Growth Fund; and .40% of average daily net assets of the Money Market
Fund.

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<PAGE>

The International Bond Fund did not commence operations until October 2,
1996, and the NetNet Fund did not commence operation until August 19, 1996. The
Equity Selection, Micro- Cap Equity, Small-Cap Value, Framlington International
Growth, Framlington Emerging Markets, and Framlington Healthcare Fund Funds had
not commenced operations as of the date of this Statement of Additional
Information.

Portfolio Managers -- The Underlying Funds. The Portfolio Managers
primarily responsible for the management of the investment selections of the
portfolios of the Underlying Funds, together with information as to their
principal business occupations during the past five years, are shown below.

Leonard J. Barr II, CFA, Senior Vice President and Director of Research of
the Advisor, has co-managed the Multi- Season Growth Fund since its inception in
April, 1993. From April, 1988 to February, 1995, he was Vice President and
Director of Research for MCM.

Ann J. Conrad, CFA, Vice President and Director of Specialty Equity
Products of the Advisor or Woodbridge since June, 1992, has managed the
Accelerating Growth Fund since the Fund's inception in December. From December,
1965 to June, 1992, she was Director of Equity Strategy for Comerica Capital
Management, Inc.

Arnold Kent Douville, Senior Portfolio Manager of the
Advisor, began his investment career as an associate in the
Capital Markets group of the investment banking firm, Drexel
Burnham Lambert. Mr. Douville joined MCM in 1989 and
specializes in managing mid-cap growth portfolios for
institutional clients. Mr. Douville has co-managed the Mid-Cap
Growth Fund since its inception in August, 1995. Prior to
beginning his investment career, Mr. Douville worked as a cost
analyst for The Analytic Sciences Corporation (TASC). Mr.
Douville earned his B.S. degree in economics from the United
States Air Force Academy and his M.B.A. from the University of
Chicago Graduate School of Business.

Edward Eberle, Value Portfolio Manager of the Advisor, has been co-manager
of the Value Fund since October, 1996. Prior to being appointed co-manager, Mr.
Eberle acted as the primary analyst for the Fund, assisting the manager with
portfolio decisions. He is also a member of the Advisor's asset allocation team.
Prior to joining the Advisor in 1995, Mr. Eberle served as Executive Vice
President and Portfolio Manager for Westpointe Financial Corporation and as a
member of the Board of Directors for Westpointe Capital Management

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and Dart Investors Bermuda Limited. Mr. Eberle received a B.A.
in Finance from Michigan State University.

Sharon E. Fayolle, Vice President and Director of Money Market Trading for
the Advisor or MCM, is responsible for overseeing the management of cash
portfolios, money market funds and foreign currency trading since May, 1996. She
has co-managed the International Bond Fund since October, 1996. Prior to joining
MCM in 1996, she was employed in the investment area of Ford Motor Company as
European Portfolio Manager responsible for investment and cash management for
Ford's European operations (August, 1981 to April, 1996).

Otto Hinzmann, Jr., Vice President and Director of Equity Portfolio
Management of the Advisor or MCM since January, 1987, has managed the Growth &
Income Fund since February, 1995. Prior to 1987, he was Director of Equity
Strategy for Comerica Bank.

Peter K. Hoglund, CFA, Portfolio Manager/Strategic
Projects of the Advisor, has been manager of the Real Estate
Equity Investment Fund since October, 1996. Prior to being
appointed as manager, Mr. Hoglund acted as the primary analyst
for this Fund, assisting the former manager with portfolio
decisions. Prior to joining MCM in May, 1993, Mr. Hoglund was
in the Investment Banking Division of Morgan Stanley & Co.,
Inc. (July, 1988 to July, 1990) where he was a financial
analyst. Mr. Hoglund received both his B.A. and M.B.A. from
the University of Michigan and is a Chartered Financial
Analyst.

Todd B. Johnson, Chief Investment Officer of the Advisor,
is currently the co-manager of the International Equity Fund
(previously, from January, 1996 to October, 1996, was the
portfolio manager). Mr. Johnson previously served as a
portfolio manager at Woodbridge (June, 1991 to December, 1994)
and Manufacturers Bank (June, 1986 to June, 1992). Mr. Johnson
received a B.A. in Finance from Michigan State University and
an M.B.A. from Wayne State University.

Anne K. Kennedy, Vice President and Director of Corporate Bond Trading of
the Advisor or MCM, has managed the Intermediate Bond Fund since March, 1995. In
addition to managing the corporate bond trading function, Ms. Kennedy is
responsible for managing institutional fixed income portfolios. From June, 1987
to September, 1991, she was involved in several investment related areas for
Ford Motor Company.

Simon Key, Chief Investment Officer of the Sub-Advisor,
is the primary portfolio manager for the Framlington Emerging

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Markets Fund. Mr. Key heads the asset allocation committee of the Sub-Advisor,
and is responsible for overall asset allocation strategy. Prior to joining
Framlington in 1989, Mr. Key was with the Bank of England as economist and
deputy head of the European team. He graduated from the University of East
Anglia with a BA in economics and philosophy, and went on to complete a MSc in
economics at the University of London.

Antony Milford, Head of the Specialist Desk for the Sub- Advisor, is the
primary portfolio manager for the Framlington Healthcare Fund. Mr. Milford is a
member of the Sub-Advisor's asset allocation committee and has been managing
funds for Framlington since 1971, covering most geographic regions. Mr. Milford
has managed a healthcare portfolio for the Sub-Advisor since 1989. He graduated
from Oxford with a Classics degree.

Theodore Miller, Senior Portfolio Manager of the Advisor,
has been co-manager of the International Equity Fund since
October, 1996. Prior to being appointed co-manager, Mr. Miller
acted as the primary analyst for the Fund, assisting the
manager with portfolio decisions. Prior to joining the
Advisor, Mr. Miller worked in Derivatives Marketing for
Interacciones Global Inc (1993--1995), in Equity Sales/Trader
for McDonald & Co. Securities Inc. (1991--1993) and started his
career in 1986 and was a derivative and equity transaction
execution specialist with various New York investment banks.
Mr. Miller received his B.S. from the University of Pittsburgh
and his M.B.A. from Indiana University.

Lee P. Munder, CFA, President and Chief Executive Officer
of the Advisor or MCM since MCM's inception in 1985. Mr.
Munder has co-managed the Multi-Season Growth Fund since its
inception in April, 1993 and managed the Real Estate Equity
Investment Fund since its inception to October, 1996. Mr.
Munder began his investment career in 1969 as Chief Trust
Investment Officer for Security Bank and Trust of Southgate,
Michigan. From 1973 to 1985 he served as portfolio manager at
Loomis Sayles & Co., Inc. serving in later years as Vice
President and Senior Partner. In 1985, Mr. Munder left Loomis
Sayles & Co., Inc. and founded MCM.

Gregory A. Prost, CFA, Senior Fixed Income Portfolio Manager of the
Advisor or MCM, has co-managed the Bond Fund since May, 1995 and the
International Bond Fund since October, 1996. Prior to joining MCM in 1995, he
was a Vice President and Senior Fund Manager for First of America Investment
Corp.
(May, 1987 to May, 1995).

James C. Robinson, Vice President and Chief Investment Officer--Fixed
Income of the Advisor or MCM since 1987, has co-managed the Bond Fund,
Intermediate Bond Fund and U.S.

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Government Income Fund since March, 1995. In his position, Mr. Robinson oversees
the Advisor's fixed income strategy and manages institutional portfolios. Prior
to his joining MCM in 1987, he was a Senior Fixed Income Portfolio Manager for
the National Bank of Detroit Trust Investment Department.

Peter G. Root, Vice President and Director of Government
Securities Trading of the Advisor, has managed the U.S.
Government Income Fund since March, 1995. Mr. Root joined MCM
in 1991 and as a Senior Portfolio Manager has been responsible
for fixed income portfolios. From August, 1988 to February,
1991 he was an Investment Manager for Society National Bank.

Gerald Seizert, CFA, CIC, is Executive Vice President and Chief Investment
Officer of all equity management of the Advisor and has managed the Value Fund
since its inception in August, 1995 and the Small-Cap Value Fund upon
commencement of operations. Prior to joining the Advisor in 1995, Mr. Seizert
served as Director and Managing Partner of the Detroit office of Loomis, Sayles
& Company, L.P. Before his 1984 affiliation with Loomis, he served as Vice
President, Trust Investments for First of America Bank. Earlier, 1977-1979, Mr.
Seizert served as a Credit Analyst at Bank One of Columbus, N.A. Mr. Seizert
received his B.B.A. degree and an M.B.A from The University of Toledo and is a
Chartered Financial Analyst and Chartered Investment Counselor.

Kurt R. Stalzer, Senior Portfolio Manager of the Advisor or Woodbridge
since June, 1992, has managed the Small Company Growth Fund since April, 1992.
Prior to June, 1992, he was a Portfolio Manager for the Trust Investment
Department of Manufacturers Bank, N.A. (January, 1981 to June, 1992).

Carl Wilk, Senior Portfolio Manager of the Advisor, has
been co-manager of the Small Company Growth Fund since
October, 1996. Prior to being appointed co-manager, Mr. Wilk
acted as the primary analyst for the Fund assisting the
manager with portfolio decisions. Prior to joining the Advisor
in 1995, Mr. Wilk was a Senior Equity Research Analyst at
Woodbridge. Prior responsibilities include experience as an
Investment Analyst at Manufacturers Bank, N.A. from 1986 to
1992 for their core growth equity investment process. In
addition, Mr. Wilk performed various financial positions in
the banking and brokerage industry from 1984 to 1986. Mr. Wilk
received a B.S. in Finance, M.B.A. from Wayne State University
and is a Certified Financial Planner.

Jeffrey A. Wrona, CFA, Senior Portfolio Manager of the
Advisor, began his investment career as a Fixed Income
Research Analyst for the investment banking firm, Drexel
Burnham Lambert. Mr. Wrona joined MCM in 1990 and specializes

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in managing mid-cap growth portfolios for institutional
clients. Mr. Wrona has co-managed the Mid-Cap Growth Fund
since its inception in August, 1995. Prior to beginning his
investment career, Mr. Wrona worked as a product design
engineer for Ford Motor Company (September, 1987 to August,
1988). Mr. Wrona earned his B.S. degree in engineering from
the University of Michigan and his M.B.A. from the University
of Michigan Graduate School of Business.

Investment decisions for the Equity Selection Fund, Micro-Cap Equity Fund
and NetNet Fund will be made by a committee of portfolio managers employed by
the Advisor. Investment decisions for the Framlington International Growth Fund
will be made by a committee of portfolio managers
employed by the Sub-Advisor.

Distribution Agreement. The Company has entered into a distribution
agreement under which the Distributor, as agent, sells shares of each Fund on a
continuous basis. The Distributor has agreed to use appropriate efforts to
solicit orders for the purchase of shares of each Fund, although it is not
obligated to sell any particular amount of shares. The Distributor pays the cost
of printing and distributing prospectuses to persons who are not holders of
shares of the Funds (excluding preparation and printing expenses necessary for
the continued registration of the shares) and of printing and distributing all
sales literature. The Distributor's principal offices are located at 60 State
Street, Boston, Massachusetts 02109.

Distribution Services Arrangements. Each Fund has adopted a Service Plan
with respect to its Class A shares pursuant to which it uses its assets to
finance activities relating to the provision of certain services to holders of
Class A shares. Under the Service Plans, the Distributor is paid an annual
service fee at the rate of 0.25% of the value of average daily net assets of the
Class A shares of the Fund. Each Fund has adopted a Service and Distribution
Plan with respect to its Class B shares, pursuant to which it uses its assets to
finance activities relating to the distribution of Class B shares to investors
and the provision of certain services to the holders of Class B shares. Under
the Service and Distribution Plans, the Distributor is paid an annual service
fee of 0.25% of the value of average daily net assets of the Class B shares of
each Fund and an annual distribution fee at the rate of 0.75% of the value of
average daily net assets of the Class B shares of each Fund.

Under the terms of the Service Plan and Service and Distribution Plan
(collectively, the "Plans"), each Plan continues from year to year, provided
such continuance is

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approved annually by vote of the Board of Directors, including a majority of the
Board of Directors who are not interested persons of the Company, as applicable,
and who have no direct or indirect financial interest in the operation of that
Plan (the "Non-Interested Plan Directors"). The Plans may not be amended to
increase the amount to be spent for the services provided by the Distributor
without shareholder approval, and all amendments of the Plans also must be
approved by the Directors in the manner described above. Each Plan may be
terminated at any time, without penalty, by vote of a majority of the
Non-Interested Plan Directors or, with respect to a Fund, by a vote of a
majority of the outstanding voting securities of the relevant class of that Fund
(as defined in the 1940 Act) upon not more than 30 days' written notice to any
other party to the Plan. Pursuant to each Plan, the Distributor will provide the
Board of Directors periodic reports of amounts expended under the Plan and the
purposes for which such expenditures were made.

The Directors have determined that the Plans will benefit the Company,
each Fund, and their shareholders by (i) providing an incentive for broker or
bank personnel to provide continuous shareholder servicing after the time of
sale; (ii) facilitating portfolio management flexibility through cash flow into
the Funds; and (iii) maintaining a competitive sales structure in the mutual
fund industry.

With respect to Class B shares of each Fund, the Distributor expects to
pay sales commissions to dealers authorized to sell the Fund's Class B shares at
the time of sale. The Distributor will use its own funds (which may be borrowed)
to pay such commissions pending reimbursement pursuant to the Service and
Distribution Plan. In addition, the Advisor may use its own resources to make
payments to the Distributor or dealers authorized to sell the Fund's shares to
support their sales efforts.

Administration Agreement. First Data Investor Services Group, Inc. ("First
Data"), located at 53 State Street, Boston, Massachusetts 02109, serves as
administrator for the Company pursuant to an administration agreement (the
"Administration Agreement"). First Data has agreed to maintain office facilities
for the Company; provide accounting and bookkeeping services for the Funds,
including the computation of each Fund's net asset value, net income and
realized capital gains, if any; furnish statistical and research data, clerical
services, and stationery and office supplies; prepare and file various reports
with the appropriate regulatory agencies; and prepare various materials required
by the SEC or any state securities commission having jurisdiction over the
Company.

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<PAGE>

The Administration Agreement provides that the Administrator performing
services thereunder shall not be liable under the Agreement except for its
willful misfeasance, bad faith or gross negligence in the performance of its
duties or from the reckless disregard by it of its duties and obligations
thereunder.

Custodian and Transfer Agency Agreements. Comerica Bank (the "Custodian"),
whose principal business address is One Detroit Center, 500 Woodward Avenue,
Detroit, MI 48226, maintains custody of the Funds' assets pursuant to a
custodian agreement (the "Custody Agreement") with the Company. Under the
Custody Agreement, the Custodian (i) maintains a separate account in the name of
each Fund, (ii) holds and transfers portfolio securities on account of each
Fund, (iii) accepts receipts and makes disbursements of money on behalf of each
Fund, (iv) collects and receives all income and other payments and distributions
on account of each Fund's securities and (v) makes periodic reports to the
Boards of Directors concerning each Fund's operations. The Custodian is
authorized to select one or more domestic or foreign banks or trust companies to
serve as sub-custodian on behalf of the Company.

First Data also serves as the transfer and dividend disbursing agent for
the Funds pursuant to a transfer agency agreement (the "Transfer Agency
Agreement") with the Company, under which First Data (i) issues and redeems
shares of each Fund, (ii) addresses and mails all communications by each Fund to
its record owners, including reports to shareholders, dividend and distribution
notices and proxy materials for its meetings of shareholders, (iii) maintains
shareholder accounts, (iv) responds to correspondence by shareholders of the
Funds and (v) makes periodic reports to the Boards of Directors concerning the
operations of each Fund.

Other Information Pertaining to Distribution, Administration, Custodian
and Transfer Agency Agreements. As stated in the Prospectus, the Administrator
and Transfer Agent each receive, as compensation for its services, fees from the
Funds based on the aggregate average daily net assets of the Funds and other
investment portfolios advised by the Advisor. The Custodian receives a separate
fee for its services. In approving the Administration Agreement and Transfer
Agency Agreement, the Board of Directors did consider the services that are to
be provided under the respective agreements, the experience and qualifications
of the respective service contractors, the reasonableness of the fees payable by
the Company in comparison to the charges of competing vendors, the impact of the
fees on the estimated total ordinary operating expense ratio of each Fund and
the fact that neither the Administrator nor the Transfer Agent is affiliated
with either

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<PAGE>

the Company or the Advisor. The Board also considered its
responsibilities under federal and state law in approving
these agreements.

Comerica Bank provides custodial services to the Funds. As compensation
for its services, Comerica Bank is entitled to receive fees, based on the
aggregate average daily net assets of the Funds and certain other investment
portfolios for which Comerica Bank provides services, computed daily and payable
monthly at an annual rate of 0.03% of the first $100 million of average daily
net assets, plus 0.02% of the next $500 million of net assets, plus 0.01% of all
net assets in excess of $600 million. Comerica Bank also receives certain
transaction based fees.

PORTFOLIO TRANSACTIONS

Subject to the general supervision of the Directors, the Advisor makes
decisions with respect to and places orders for all purchases and sales of
portfolio securities for each Fund. The Funds purchase only Class Y shares of
the Underlying Funds, which are sold without an initial or contingent deferred
sales charge to the Funds.

Over-the-counter issues, including corporate debt and government
securities, are normally traded on a "net" basis (i.e., without commission)
through dealers, or otherwise involve transactions directly with the issuer of
an instrument. With respect to over-the-counter transactions, the Advisor will
normally deal directly with dealers who make a market in the instruments
involved except in those circumstances where more favorable prices and execution
are available elsewhere. The cost of securities purchased from underwriters
includes an underwriting commission or concession, and the prices at which
securities are purchased from and sold to dealers include a dealer's mark-up or
markdown.

The portfolio turnover rate of a Fund and an Underlying Fund is calculated
by dividing the lesser of such Fund's annual sales or purchases of portfolio
securities (exclusive of purchases or sales of securities whose maturities at
the time of acquisition were one year or less) by the monthly average value of
the securities held by the fund during the year. Purchases and sales are made
for each Fund and Underlying Fund whenever necessary, in management's opinion,
to meet such fund's investment objective. Each Fund expects to have an annual
portfolio turnover rate not exceeding 50% for its initial fiscal year. The
Underlying Funds may engage in short-term trading to achieve their investment
objectives.

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<PAGE>

Portfolio turnover may vary greatly from year to year as well as within a
particular year.

In the Advisory Agreement, the Advisor agrees to select broker-dealers in
accordance with guidelines established by the Board of Directors from time to
time and in accordance with applicable law. In assessing the terms available for
any transaction, the Advisor shall consider all factors it deems relevant,
including the breadth of the market in the security, the price of the security,
the financial condition and execution capability of the broker-dealer, and the
reasonableness of the commission, if any, both for the specific transaction and
on a continuing basis. In addition, the Advisory Agreement authorizes the
Advisor, subject to the prior approval of the Company's Board of Directors, to
cause the Funds to pay a broker-dealer which furnishes brokerage and research
services a higher commission than that which might be charged by another
broker-dealer for effecting the same transaction, provided that the Advisor
determines in good faith that such commission is reasonable in relation to the
value of the brokerage and research services provided by such broker-dealer,
viewed in terms of either the particular transaction or the overall
responsibilities of the Advisor to the Funds. Such brokerage and research
services might consist of reports and statistics on specific companies or
industries, general summaries of groups of bonds and their comparative earnings
and yields, or broad overviews of the securities markets and the economy.

Supplementary research information so received is in addition to, and not
in lieu of, services required to be performed by the Advisor and does not reduce
the advisory fees payable to the Advisor by the Funds. It is possible that
certain of the supplementary research or other services received will primarily
benefit one or more other investment companies or other accounts for which
investment discretion is exercised. Conversely, a Fund may be the primary
beneficiary of the research or services received as a result of portfolio
transactions effected for such other account or investment company.

Portfolio securities will not be purchased from or sold to the Advisor,
the Distributor or any affiliated person (as defined in the 1940 Act) of the
foregoing entities except to the extent permitted by SEC exemptive order or by
applicable law.

Investment decisions for each Fund, the Underlying Funds, and for other
investment accounts managed by the Advisor (Sub- Advisor with respect to the
Framlington Funds) are made independently of each other in the light of
differing

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conditions. However, the same investment decision may be made for two or more of
such accounts. In such cases, simultaneous transactions are inevitable.
Purchases or sales are then averaged as to price and allocated as to amount in a
manner deemed equitable to each such account. While in some cases this practice
could have a detrimental effect on the price or value of the security as far as
a Fund or Underlying Fund is concerned, in other cases it is believed to be
beneficial to a Fund or Underlying Fund. To the extent permitted by law, the
Advisor may aggregate the securities to be sold or purchased for a Fund or
Underlying Fund with those to be sold or purchased for other investment
companies or accounts in executing transactions.

A Fund will not purchase securities during the existence of any
underwriting or selling group relating to such securities of which the Advisor
or any affiliated person (as defined in the 1940 Act) thereof is a member except
pursuant to procedures adopted by the Company's Board of Directors in accordance
with Rule 10f-3 under the 1940 Act.

The Funds are required to identify the securities of their regular brokers
or dealers (as defined in Rule 10b-1 under the 1940) Act or their parents held
by them as of the close of their most recent fiscal year. As of June 30, 1996
the Funds held no such securities.

Except as noted in the Prospectus and this Statement of Additional
Information the Funds' service contractors bear all expenses in connection with
the performance of their services and the Funds bear the expenses incurred in
their operations. These expenses include, but are not limited to, fees paid to
the Advisor, Administrator, Custodian and Transfer Agent; fees and expenses of
officers and Board of Directors; taxes; interest; legal and auditing fees;
brokerage fees and commissions; certain fees and expenses in registering and
qualifying each Fund and its shares for distribution under Federal and state
securities laws; expenses of preparing prospectuses and statements of additional
information and of printing and distributing prospectuses and statements of
additional information to existing shareholders; the expense of reports to
shareholders, shareholders' meetings and proxy solicitations; fidelity bond and
directors' and officers' liability insurance premiums; the expense of using
independent pricing services; and other expenses which are not assumed by the
Administrators. Any general expenses of the Company that are not readily
identifiable as belonging to a particular investment portfolio of the Company
are allocated among all investment portfolios of the Company by or under the
direction of the Board of Directors in a manner that the Board of Directors
determines to be fair and equitable. The Advisor,

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Administrator, Custodian and Transfer Agent may voluntarily waive all or a
portion of their respective fees from time to time.

PURCHASE AND REDEMPTION INFORMATION

Purchases and redemptions are discussed in the Funds' Prospectus and such
information is incorporated herein by reference.

Purchases. In addition to the methods of purchasing shares described in
the Prospectus, the Funds also offer a pre-authorized checking plan by which
investors may accumulate shares of the Funds regularly each month by means of
automatic debits to their checking accounts. There is a $50 minimum on each
automatic debit. Shareholders may choose this option by checking the appropriate
part of the application form or by calling the Funds at (800) 438-5789. Such a
plan is voluntary and may be discontinued by the shareholder at any time or by
the Trust on 30 days' written notice to the shareholder.

Letter of Intent. Purchasers who intend to invest $100,000 or more in
Class A shares of a Fund within 13 months (whether in one lump sum or in
installments, the first of which may not be less than 5% of the total intended
amount and each subsequent installment not less than $100, including automatic
investment and payroll deduction plans), and to beneficially hold the total
amount of such shares fully paid for and outstanding simultaneously for at least
one full business day before the expiration of that period, should complete the
Letter of Intent ("LOI") section in the Application. Payment for not less than
5% of the total intended amount must accompany the executed LOI. Those shares
purchased with the first 5% of the intended amount stated in the LOI will be
held as "escrowed shares" for as long as the LOI remains unfulfilled. Although
the escrowed shares are registered in the investor's name, his full ownership of
them is conditional upon fulfillment of the LOI. No escrowed shares can be
redeemed by the investor for any purpose until the LOI is fulfilled or
terminated. If the LOI is terminated for any reason other than fulfillment, the
Transfer Agent will redeem that portion of the escrowed shares required and
apply the proceeds to pay any adjustment that may be appropriate to the sales
commission on all shares (including the escrowed shares) already purchased under
the LOI and apply any unused balance to the investor's account. The LOI is not a
binding obligation to purchase any amount of shares, but its execution will
result in the purchaser paying a lower sales charge at the appropriate quantity
purchase level. A purchase not originally made pursuant to an LOI may be
included under a subsequent LOI executed within 90 days of such purchase. In

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this case, an adjustment will be made at the end of 13 months from the effective
date of the LOI at the net asset value per share then in effect, unless the
investor makes an earlier written request to the Funds' Distributor upon
fulfilling the purchase of shares under the LOI. In addition, the aggregate
value of any shares purchased prior to the 90-day period referred to above may
be applied to purchases under a current LOI in fulfilling the total intended
purchases under the LOI. However, no adjustment of sales charge previously paid
on purchases prior to the 90-day period will be made. Shares acquired through
reinvestment of dividends and capital gain distributions are considered in
connection with an investor's fulfillment of the LOI.

Retirement Plans. Shares of any of the Funds may be purchased in
connection with various types of tax deferred retirement plans, including
individual retirement accounts ("IRAs"), qualified plans, deferred compensation
for public schools and charitable organizations (403(b) plans) and simplified
employee pension IRAs. An individual or organization considering the
establishment of a retirement plan should consult with an attorney and/or an
accountant with respect to the terms and tax aspects of the plan. A $10.00
annual custodial fee is also charged on IRAs. This custodial fee is due by
December 15 of each year and may be paid by check or shares liquidated from a
shareholder's account.

Redemptions

Systematic Withdrawals. In addition to the methods of redemption described
in the Funds' Prospectus, a systematic withdrawal plan is available in which a
shareholder of the Funds may elect to receive a fixed amount ($50 minimum),
monthly, quarterly, semi-annually, or annually, for accounts with a value of
$2,500 or more. Checks are mailed on or about the 10th of each designated month.
All certified shares must be placed on deposit under the plan and dividends and
capital gain distributions, if any, are automatically reinvested at net asset
value for shareholders participating in the plan. If the checks received by a
shareholder through the systematic withdrawal plan exceed the dividends and
capital appreciation of the shareholder's account, the systematic withdrawal
plan will have the effect of reducing the value of the account. Any gains and/or
losses realized from redemptions through the systematic withdrawal plan are
considered a taxable event by the Internal Revenue Service and must be reported
on the shareholders' income tax return. Shareholders should consult with a tax
advisor for information on their specific financial situations. At the time of
initial investment, a shareholder may request that the check for the systematic
withdrawal be sent to an address other than the address of record. The

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address to which the payment is mailed may be changed by submitting a written
request, signed by all registered owners, with their signatures guaranteed.
Shareholders may add this option after the account is already established,
change the amount on an existing account by calling the Funds at (800) 438-5789.
The Funds may terminate the plan on 30 days' written notice to the shareholder.

Redemption proceeds are normally paid in cash; however, each Fund may pay
the redemption price in whole or part by a distribution in kind of securities
from the portfolio of the particular Fund, in lieu of cash, in conformity with
applicable rules of the SEC. If shares are redeemed in kind, the redeeming
shareholder might incur transaction costs in converting the assets into cash.
The Funds are obligated to redeem shares solely in cash up to the lesser of
$250,000 or 1% of its net assets during any 90-day period for any one
shareholder.

Other Information. The Funds reserve the right to suspend or postpone
redemptions during any period when: (i) trading on the New York Stock Exchange
is restricted, as determined by the SEC, or the New York Stock Exchange is
closed for other than customary weekend and holiday closings; (ii) the SEC has
by order permitted such suspension or postponement for the protection of
shareholders; or (iii) an emergency, as determined by the SEC, exists, making
disposal of portfolio securities or valuation of net assets of the fund not
reasonably practicable.

The Funds may involuntarily redeem an investor's shares if the net asset
value of such shares is less than $500; provided that involuntary redemptions
will not result from fluctuations in the value of an investor's shares. A notice
of redemption, sent by first-class mail to the investor's address of record,
will fix a date not less than 30 days after the mailing date, and shares will be
redeemed at the net asset value at the close of business on that date unless
sufficient additional shares are purchased to bring the aggregate account value
up to $500 or more. A check for the redemption proceeds payable to the investor
will be mailed to the investor at the address of record.

Exchanges. In addition to the method of exchanging
shares described in the Funds' Prospectus, a shareholder
exchanging at least $1,000 of shares (for which certificates
have not been issued) and who has authorized expedited
exchanges on the application form filed with the Transfer
Agent may exchange shares by telephoning the Funds at (800)
438-5789. Telephone exchange instructions must be received by
the Transfer Agent by 4:00 p.m., New York City time. The

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Funds, Distributor and Transfer Agent reserve the right at any time to suspend
or terminate the expedited exchange procedure or to impose a fee for this
service. During periods of unusual economic or market changes, shareholders may
experience difficulties or delays in effecting telephone exchanges. Neither the
Funds nor the Transfer Agent will be responsible for any loss, damages, expense
or cost arising out of any telephone exchanges effected upon instructions
believed by them to be genuine. The Transfer Agent has instituted procedures
that it believes are reasonably designed to insure that exchange instructions
communicated by telephone are genuine, and could be liable for losses caused by
unauthorized or fraudulent instructions in the absence of such procedures. The
procedures currently include a recorded verification of the shareholder's name,
social security number and account number, followed by the mailing of a
statement confirming the transaction, which is sent to the address of record.

NET ASSET VALUE

In determining the approximate market value of portfolio investments, the
Company may employ outside organizations, which may use matrix or formula
methods that take into consideration market indices, matrices, yield curves and
other specific adjustments. This may result in the securities being valued at a
price different from the price that would have been determined had the matrix or
formula methods not been used. All cash, receivables and current payables are
carried on the Company's books at their face value. Other assets, if any, are
valued at fair value as determined in good faith under the supervision of the
Board Members.

PERFORMANCE INFORMATION

Yield and Performance of the Funds

The Funds' 30-day (or one month) standard yield described in the Prospectus is
calculated for each Fund in accordance with the method prescribed by the SEC for
mutual funds:

YIELD = 2[( a - b +1)6 -1]
cd
Where: a = dividends and interest earned by a Fund during
the period;

b = expenses accrued for the period (net of
reimbursements);

c = average daily number of shares outstanding
during the period entitled to receive
dividends; and

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<PAGE>

d = maximum offering price per share on the last
day of the period.

For the purpose of determining interest earned on debt obligations
purchased by a Fund at a discount or premium (variable "a" in the formula), each
Fund computes the yield to maturity of such instrument based on the market value
of the obligation (including actual accrued interest) at the close of business
on the last business day of each month, or, with respect to obligations
purchased during the month, the purchase price (plus actual accrued interest).
Such yield is then divided by 360 and the quotient is multiplied by the market
value of the obligation (including actual accrued interest) in order to
determine the interest income on the obligation for each day of the subsequent
month that the obligation is in the portfolio. It is assumed in the above
calculation that each month contains 30 days. The maturity of a debt obligation
with a call provision is deemed to be the next call date on which the obligation
reasonably may be expected to be called or, if none, the maturity date. For the
purpose of computing yield on equity securities held by a Fund, dividend income
is recognized by accruing 1/360 of the stated dividend rate of the security for
each day that the security is held by the Fund.

Interest earned on tax-exempt obligations that are issued without original
issue discount and have a current market discount is calculated by using the
coupon rate of interest instead of the yield to maturity. In the case of
tax-exempt obligations that are issued with original issue discount but which
have discounts based on current market value that exceed the then-remaining
portion of the original issue discount (market discount), the yield to maturity
is the imputed rate based on the original issue discount calculation. On the
other hand, in the case of tax-exempt obligations that are issued with original
issue discount but which have the discounts based on current market value that
are less than the then-remaining portion of the original issue discount (market
premium), the yield to maturity is based on the market value.

With respect to mortgage or other receivables-backed debt obligations
purchased at a discount or premium, the formula generally calls for amortization
of the discount or premium. The amortization schedule will be adjusted monthly
to reflect changes in the market value of such debt obligations. Expenses
accrued for the period (variable "b" in the formula) include all recurring fees
charged by a Fund to all shareholder accounts in proportion to the length of the
base period and the Fund's mean (or median) account size.

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<PAGE>

Undeclared earned income will be subtracted from the offering price per share
(variable "d" in the formula).

Total Return of the Funds

Each Fund that advertises its "average annual total return" computes such
return by determining the average annual compounded rate of return during
specified periods that equates the initial amount invested to the ending
redeemable value of such investment according to the following formula:

T = (ERV)1/n -1
P

Where: T = average annual total return;

ERV = ending redeemable value of a hypothetical $1,000
payment made at the beginning of the 1, 5 or 10
year (or other) periods at the end of the
applicable period (or a fractional portion
thereof);

P = hypothetical initial payment of
$1,000; and

n = period covered by the computation,
expressed in years.

Each Fund that advertises its "aggregate total return" computes such
returns by determining the aggregate compounded rates of return during specified
periods that likewise equate the initial amount invested to the ending
redeemable value of such investment. The formula for calculating aggregate total
return is as follows:

(ERV) - 1
Aggregate Total Return = P

The calculations are made assuming that (1) all dividends and capital gain
distributions are reinvested on the reinvestment dates at the price per share
existing on the reinvestment date, (2) all recurring fees charged to all
shareholder accounts are included, and (3) for any account fees that vary with
the size of the account, a mean (or median) account size in the Fund during the
periods is reflected. The ending redeemable value (variable "ERV" in the
formula) is determined by assuming complete redemption of the hypothetical
investment after deduction of all non-recurring charges at the end of the
measuring period.

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<PAGE>

The performance of any investment is generally a function of portfolio
quality and maturity, type of investment and operating expenses.

From time to time, in advertisements or in reports to shareholders, a
Fund's yields or total returns may be quoted and compared to those of other
mutual funds with similar investment objectives and to stock or other relevant
indices. For example, a Fund's yield may be compared to the IBC/Donoghue's Money
Fund Average, which is an average compiled by Donoghue's MONEY FUND REPORT of
Holliston, MA 01746, a widely recognized independent publication that monitors
the performance of money market funds, or to the data prepared by Lipper
Analytical Services, Inc., a widely recognized independent service that monitors
the performance of mutual funds. Hypothetical examples showing the difference
between a taxable and a tax-free investment may also be provided to
shareholders.

TAXES

The following summarizes certain additional tax considerations generally
affecting the Funds and their shareholders that are not described in the Funds'
Prospectus. No attempt is made to present a detailed explanation of the tax
treatment of the Funds or their shareholders, and the discussion here and in the
applicable Prospectus is not intended as a substitute for careful tax planning.
Potential investors should consult their tax advisors with specific reference to
their own tax situations.

General. Each Fund intends to elect and qualify to be taxed separately as
a regulated investment company under the Internal Revenue Code of 1986, as
amended (the "Code"). As a regulated investment company, each Fund generally is
exempt from Federal income tax on its net investment income and realized capital
gains which it distributes to shareholders, provided that it distributes an
amount equal to the sum of (a) at least 90% of its investment company taxable
income (net investment income and the excess of net short-term capital gain over
net long-term capital loss), if any, for the year and (b) at least 90% of its
net tax-exempt interest income, if any, for the year (the "Distribution
Requirement") and satisfies certain other requirements of the Code that are
described below. Distributions of investment company taxable income and net
tax-exempt interest income made during the taxable year or, under specified
circumstances, within twelve months after the close of the taxable year will
satisfy the Distribution Requirement.

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<PAGE>

In addition to satisfaction of the Distribution Requirement, each Fund
must derive with respect to a taxable year 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 or securities or foreign currencies,
or from other income derived with respect to its business of investing in such
stock, securities, or currencies (the "Income Requirement") and derive less than
30% of its gross income from the sale or other disposition of securities and
certain other investments held for less than three months (the "Short-Short
Test").

In addition to the foregoing requirements, at the close of each quarter of
its taxable year, at least 50% of the value of each Fund's assets must consist
of cash and cash items, U.S. Government securities, securities of other
regulated investment companies, and securities of other issuers (as to which a
Fund has not invested more than 5% of the value of its total assets in
securities of such issuer and as to which a Fund does not hold more than 10% of
the outstanding voting securities of such issuer) and no more than 25% of the
value of each Fund's total assets may be invested in the securities of any one
issuer (other than U.S. Government securities and securities of other regulated
investment companies), or in two or more issuers which such Fund controls and
which are engaged in the same or similar trades or businesses.

Distributions of net investment income received by a Fund from investments
in debt securities and any net realized short-term capital gains distributed by
a Fund will be taxable to shareholders as ordinary income and will not be
eligible for the dividends received deduction for corporations.

Each Fund intends to distribute to shareholders any excess of net
long-term capital gain over net short-term capital loss ("net capital gain") for
each taxable year. Such gain is distributed as a capital gain dividend and is
taxable to shareholders as long-term capital gain, regardless of the length of
time the shareholder has held the shares. In addition, investors should be aware
that any loss realized upon the sale, exchange or redemption of shares held for
six months or less will be treated as a long-term capital loss to the extent any
capital gain dividends have been paid with respect to such shares. Capital gains
dividends are not eligible for the dividends received deduction for
corporations.

In the case of corporate shareholders, distributions of a Fund for any
taxable year generally qualify for the dividends received deduction to the
extent of the gross amount of "qualifying dividends" received by such Fund for
the year and

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<PAGE>

if certain holding period requirements are met. Generally, a dividend will be
treated as a "qualifying dividend" if it has been received from a domestic
corporation.

If for any taxable year any Fund does not qualify as a regulated
investment company, all of its taxable income will be subject to tax at regular
corporate rates without any deduction for distributions to shareholders. In such
event, all distributions (whether or not derived from exempt-interest income)
would be taxable as ordinary income and would be eligible for the dividends
received deduction in the case of corporate shareholders to the extent of such
Fund's current and accumulated earnings and profits.

Shareholders will be advised annually as to the Federal income tax
consequences of distributions made by the Funds each year.

The Code imposes a non-deductible 4% excise tax on regulated investment
companies that fail to currently distribute an amount equal to specified
percentages of their ordinary taxable income and capital gain net income (excess
of capital gains over capital losses). Each Fund intends to make sufficient
distributions or deemed distributions of its ordinary taxable income and capital
gain net income each calendar year to avoid liability for this excise tax.

The Company will be required in certain cases to withhold and remit to the
United States Treasury 31% of taxable distributions, including gross proceeds
realized upon sale or other dispositions paid to any shareholder (i) who has
provided either an uncertified or incorrect tax identification number or no
number at all, (ii) who is subject to backup withholding by the Internal Revenue
Service for failure to report the receipt of taxable interest or dividend income
properly, or (iii) who has failed to certify to the Trust that he is not subject
to backup withholding or that he is an "exempt recipient."

If an Underlying Fund derives dividends from domestic corporations, a
portion of the income distributions of a Fund which invests in that Underlying
Fund may be eligible for the 70% deduction for dividends received by
corporations. Shareholders will be informed of the portion of dividends which so
qualify. The dividends-received deduction is reduced to the extent the shares
held by the Underlying Fund with respect to which the dividends are received are
treated as debt-financed under federal income tax law and is eliminated if
either those shares or the shares of the Underlying Fund or the Fund are deemed
to have been held by the Underlying Fund,

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<PAGE>

the Fund or the shareholders, as the case may be, for less
than 46 days.

Income received by an Underlying Fund from sources within a foreign
country may be subject to withholding and other taxes imposed by that country.
If more than 50% of the value of an Underlying Fund's total assets at the close
of its taxable year consists of stock or securities of foreign corporations, the
Underlying Fund will be eligible and may elect to "pass-through" to its
shareholders, including a Fund, the amount of foreign income and similar taxes
paid by the Underlying Fund. Pursuant to this election, the Fund would be
required to include in gross income (in addition to taxable dividends actually
received), its pro rata share of foreign income and similar taxes in computing
its taxable income or to use it as a foreign tax credit against its U.S. federal
income taxes, subject to limitations. A Fund, would not, however, be eligible to
elect to "pass-through" to its shareholders the ability to claim a deduction or
credit with respect to foreign income and similar taxes paid by the Underlying
Fund.

Disposition of Shares. Upon a redemption, sale or exchange of his or her
shares, a shareholder will realize a taxable gain or loss depending upon his or
her basis in the shares. Such gain or loss will be treated as capital gain or
loss if the shares are capital assets in the shareholder's hands and will be
long-term or short-term, generally, depending upon the shareholder's holding
period for the shares. Any loss realized on a redemption, sale or exchange will
be disallowed to the extent the shares disposed of are replaced (including
through reinvestment of dividends) within a period of 61 days beginning 30 days
before and ending 30 days after the shares are disposed of. In such a case, the
basis of the shares acquired will be adjusted to reflect the disallowed loss.
Any loss realized by a shareholder on the sale of Fund shares held by the
shareholder for six months or less will be treated as a long-term capital loss
to the extent of any distributions of net capital gains received or treated as
having been received by the shareholder with respect to such shares.
Furthermore, a loss realized by a shareholder on the redemption, sale or
exchange of shares of a Fund with respect to which exempt-interest dividends
have been paid will, to the extent of such exempt-interest dividends have been
paid will, to the extent of such exempt-interest dividends, be disallowed if
such shares have been held by the shareholder for less than six months.

In some cases, shareholders will not be permitted to take sales charges
into account for purposes of determining the amount of gain or loss realized on
the disposition of their stock. This prohibition generally applies where (1) the

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<PAGE>

shareholder incurs a sales charge in acquiring the stock of a Fund, (2) the
stock is disposed of before the 91st day after the date on which it was
acquired, and (3) the shareholder subsequently acquires the stock of the same or
another fund and the otherwise applicable sales charge is reduced under a
"reinvestment right" received upon the initial purchase of regulated investment
company shares. The term "reinvestment right" means any right to acquire stock
of one or more funds without the payment of a sales charge or with the payment
of a reduced sales charge. Sales charges affected by this rule are treated as if
they were incurred with respect to the stock acquired under the reinvestment
right. This provision may be applied to successive acquisitions of Fund shares.

Although each Fund expects to qualify as a "regulated investment company"
and to be relieved of all or substantially all Federal income taxes, depending
upon the extent of its activities in states and localities in which its offices
are maintained, in which its agents or independent contractors are located or in
which it is otherwise deemed to be conducting business, each Fund may be subject
to the tax laws of such states or localities.

Taxation of the Underlying Funds. Each Underlying Fund intends to elect
and qualify to be taxed as a regulated investment company under the Code. In any
year in which an Underlying Fund qualifies as a regulated investment company and
timely distributes all of its taxable income, the Underlying Fund generally will
not pay any federal income or excise tax.

Distributions of an Underlying Fund's investment company taxable income
are taxable as ordinary income to a Fund which invests in the Underlying Fund.
Distributions of the excess of an Underlying Fund's net long-term capital gain
over its net short-term capital loss, which are properly designated as "capital
gain dividends," are taxable as long-term capital gain to a Fund which invests
in the Underlying Fund, regardless of how long the Fund held the Underlying
Fund's shares, and are not eligible for the corporate dividends-received
deduction. Upon the sale or other disposition by a Fund of shares of an
Underlying Fund, the Fund generally will realize a capital gain or loss which
will be long-term or short-term, generally depending upon the holding period for
the shares.

Certain of the bonds purchased by a Fund may be treated as bonds that were
originally issued at a discount. Original issue discount represents interest for
federal income tax purposes and can generally be defined as the difference
between the price at which a security was issued and its

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<PAGE>

stated redemption price at maturity. Original issue discount is treated for
federal income tax purposes as income earned by a Fund even though the Fund
doesn't actually receive any cash, and therefore is subject to the distribution
requirements of the Code. The amount of income earned by the Fund generally is
determined on the basis of a constant yield to maturity which takes into account
the semi-annual compounding of accrued interest.

If a Fund invests in certain high yield original issue discount
obligations issued by corporations, a portion of the original issue discount
accruing on the obligation may be eligible for the deduction for dividends
received by corporations. In such event, dividends of investment company taxable
income received from the Fund by its corporate shareholders, to the extent
attributable to such portion of accrued original issue discount, may be eligible
for this deduction for dividends received by corporations if so designated by
the Fund in a written notice to shareholders.

In addition, some of the bonds may be purchased by a Fund at a discount
which exceeds the original issue discount on such bonds, if any. This additional
discount represents market discount for federal income tax purposes. The gain
realized on the disposition of any bond having market discount will be treated
as ordinary income to the extent it does not exceed the accrued market discount
on such bond (unless the Fund elects for all its debt securities acquired after
the first day of the first taxable year to which the election applies having a
fixed maturity date of more than one year from the date of issue to include
market discount in income in tax years to which it is attributable). Generally,
market discount accrues on a daily basis for each day the bond is held by a Fund
at a constant rate over the time remaining to the bond's maturity.

Other Taxation

The foregoing discussion relates only to U.S. Federal income tax law as
applicable to U.S. persons (i.e., U.S. citizens and residents and domestic
corporations, partnerships, trusts and estates). Distributions by the Fund also
may be subject to state and local taxes, and their treatment under state and
local income tax laws may differ from the U.S. Federal income tax treatment.
Shareholders should consult their tax advisers with respect to particular
questions of U.S. Federal, state and local taxation. Shareholders who are not
U.S. persons should consult their tax advisers regarding U.S. and foreign tax
consequences of ownership of shares of the Fund, including the likelihood that
distributions to them would be subject to withholding of U.S.

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<PAGE>

Federal income tax at a rate of 30% (or at a lower rate under a tax treaty).

ADDITIONAL INFORMATION CONCERNING SHARES

The Company is a Maryland corporation. The Company's Articles of
Incorporation authorize the Board of Directors to classify or reclassify any
unissued shares of the Company into one or more classes by setting or changing,
in any one or more respects, their respective designations, preferences,
conversion or other rights, voting powers, restrictions, limitations,
qualifications and terms and conditions of redemption. Pursuant to the authority
of the Company's Articles of Incorporation, the Directors have authorized the
issuance of shares of common stock representing interests in the Equity
Selection Fund, Micro-Cap Equity Fund, Mid-Cap Fund, Multi-Season Fund, Real
Estate Fund, Small-Cap Value Fund, Value Fund, International Bond Fund, Money
Market Fund, NetNet Fund, Conservative Fund, Moderate Fund and Aggressive Fund,
respectively. The Munder Asset Allocation Funds are offered in three separate
classes: Class A, Class B and Class Y shares.

At a board meeting on , the Directors adopted a plan pursuant to Rule
18f-3 under the 1940 Act ("Multi-Class Plan") on behalf of each Fund. The
Multi-Class Plan provides that shares of each class of a Fund are identical,
except for one or more expense variables, certain related rights, exchange
privileges, class designation and sales loads assessed due to differing
distribution methods.

In the event of a liquidation or dissolution of each of the Company or an
individual portfolio of the Company, shareholders of a particular portfolio
would be entitled to receive the assets available for distribution belonging to
such portfolio, and a proportionate distribution, based upon the relative net
asset values of the Company's respective portfolios, of any general assets not
belonging to any particular portfolio which are available for distribution.
Shareholders of a portfolio are entitled to participate in the net distributable
assets of the particular portfolio involved on liquidation, based on the number
of shares of the portfolio that are held by each shareholder.

Holders of all outstanding shares of a particular Fund will vote together
in the aggregate and not by class on all matters, except that only Class A
shares of a Fund will be entitled to vote on matters submitted to a vote of
shareholders pertaining to the Fund's Class A Plan, and only Class B shares will
be entitled to vote on matters submitted to a vote of shareholders pertaining to
the Fund's Class B

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<PAGE>

Plan. Further, shareholders of all of the funds of the Company, as well as those
of any other fund now or hereafter offered by the Company, will vote together in
the aggregate and not separately on a portfolio-by-portfolio basis, except as
required by law or when permitted by the Board of Directors. Rule 18f-2 under
the 1940 Act provides that any matter required to be submitted to the holders of
the outstanding voting securities of an investment company such as the Company
shall not be deemed to have been effectively acted upon unless approved by the
holders of a majority of the outstanding shares of each portfolio affected by
the matter. A portfolio is affected by a matter unless it is clear that the
interests of each portfolio in the matter are substantially identical or that
the matter does not affect any interest of the portfolio. Under the Rule, the
approval of an investment advisory agreement or any change in a fundamental
investment policy would be effectively acted upon with respect to a Fund only if
approved by a majority of the outstanding shares of such portfolio. However, the
Rule also provides that the ratification of the appointment of independent
auditors, the approval of principal underwriting contracts and the election of
directors may be effectively acted upon by shareholders of the Company voting
together in the aggregate without regard to a particular portfolio.

Shares of the Company have noncumulative voting rights and, accordingly,
the holders of more than 50% of each of the Company's outstanding shares
(irrespective of class) may elect all of the directors. Shares have no
preemptive rights and only such conversion and exchange rights as the Board may
grant in its discretion. When issued for payment as described in the Prospectus,
shares will be fully paid and non-assessable by the Company.

Shareholder meetings to elect directors will not be held unless and until
such time as required by law. At that time, the directors then in office will
call a shareholders' meeting to elect trustees. Except as set forth above, the
directors will continue to hold office and may appoint successor directors.
Meetings of the shareholders of the Company shall be called by the directors
upon the written request of shareholders owning at least 10% of the outstanding
shares entitled to vote.

MISCELLANEOUS

Counsel. The law firm of Dechert Price & Rhoads, 1500 K Street, N.W.,
Washington, DC 20005, has passed upon certain legal matters in connection with
the shares offered by the Funds and serves as counsel to the Company.

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<PAGE>

Independent Auditors. Ernst & Young LLP, serves as the
Company's independent auditors.

Banking Laws. Banking laws and regulations currently prohibit a bank
holding company registered under the Federal Bank Holding Company Act of 1956 or
any bank or non-bank 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 underwriting securities, but such banking laws and regulations do not
prohibit such a holding company or affiliate or banks generally from acting as
investment advisor, administrator, transfer agent or custodian to such an
investment company, or from purchasing shares of such a company as agent for and
upon the order of customers. The Advisor and the Custodian are subject to such
banking laws and regulations.

The Advisor and the Custodian believe they may perform the services for
the Company contemplated by their respective agreements with the Company without
violation of applicable banking laws or regulations. It should be noted,
however, that there have been no cases deciding whether bank and non-bank
subsidiaries of a registered bank holding company may perform services
comparable to those that are to be performed by these companies, and future
changes in either Federal or state statutes and regulations relating to
permissible activities of banks and their subsidiaries or affiliates, as well as
future judicial or administrative decisions or interpretations of current and
future statutes and regulations, could prevent these companies from continuing
to perform such service for the Company.

Should future legislative, judicial or administrative action prohibit or
restrict the activities of such companies in connection with the provision of
services on behalf of the Company, the Company might be required to alter
materially or discontinue its arrangements with such companies and change its
method of operations. It is not anticipated, however, that any change in the
Company's method of operations would affect the net asset value per share of any
Fund or result in a financial loss to any shareholder of a Fund.

Shareholder Approvals. As used in this Statement of Additional Information
in the Prospectus, a "majority of the outstanding shares" of a Fund or
investment portfolio means the lesser of (a) 67% of the shares of the particular
Fund or portfolio represented at a meeting at which the holders of more than 50%
of the outstanding shares of such Fund or portfolio are present in person or by
proxy, or (b) more than 50% of the outstanding shares of such Fund or portfolio.

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REGISTRATION STATEMENT

This Statement of Additional Information and the Funds' Prospectus do not
contain all the information included in the Funds' registration statement filed
with the SEC under the 1933 Act with respect to the securities offered hereby,
certain portions of which have been omitted pursuant to the rules and
regulations of the SEC. The registration statement, including the exhibits filed
therewith, may be examined at the offices of the SEC in Washington, D.C.

Statements contained herein and in the Funds' Prospectus as to the
contents of any contract of other documents referred to are not necessarily
complete, and, in such instance, reference is made to the copy of such contract
or other documents filed as an exhibit to the Funds' registration statement,
each such statement being qualified in all respects by such reference.

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APPENDIX A

- - Rated Investments -

Corporate Bonds

Excerpts from Moody's Investors Services, Inc. ("Moody's")
description of its bond ratings:

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

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

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

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

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

A-1

<PAGE>

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

"Caa": Bonds that are rated "Caa" are of poor standing.
These issues may be in default or present elements of danger
may exist with respect to principal or interest.

Moody's applies numerical modifiers (1, 2 and 3) with respect to bonds
rated "Aa" through "B". The modifier 1 indicates that the bond being rated ranks
in the higher end of its generic rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates that the bond ranks in the lower
end of its generic rating category.

Excerpts from Standard & Poor's Corporation ("S&P") description of its
bond ratings:

"AAA": Debt rated "AAA" has the highest rating assigned
by S&P. Capacity to pay interest and repay principal is
extremely strong.

"AA": Debt rated "AA" has a very strong capacity to pay
interest and repay principal and differs from "AAA" issues by
a small degree.

"A": Debt rated "A" has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in higher rated
categories.

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

"BB", "B" and "CCC": Bonds rated "BB" and "B" are regarded, on balance, as
predominantly speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligations. "BB" represents a
lower degree of speculation than "B" and "CCC" the highest degree of
speculation. While such bonds will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions.

A-2

<PAGE>

To provide more detailed indications of credit quality, the "AA" or "A"
ratings may be modified by the addition of a plus or minus sign to show relative
standing within these major rating categories.

Commercial Paper

The rating "Prime-1" is the highest commercial paper rating assigned by
Moody's. These issues (or related supporting institutions) are considered to
have a superior capacity for repayment of short-term promissory obligations.
Issues rated "Prime-2" (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will normally
be evidenced by many of the characteristics of "Prime-1" rated issues, but to a
lesser degree. Earnings trends and coverage ratios, while sound, will be more
subject to variation. Capitalization characteristics, while still appropriate,
may be more affected by external conditions. Ample alternate liquidity is
maintained.

Commercial paper ratings of S&P are current assessments of the likelihood
of timely payment of debt having original maturities of no more than 365 days.
Commercial paper rated "A-1" by S&P indicates that the degree of safety
regarding timely payment is either overwhelming or very strong. Those issues
determined to possess overwhelming safety characteristics are denoted "A-1+."
Commercial paper rated "A-2" by S&P indicates that capacity for timely payment
is strong. However, the relative degree of safety is not as high as for issues
designated "A-1."

A-3

<PAGE>

APPENDIX A

- - Rated Investments -

Commercial Paper

Rated commercial paper purchased by a Fund or an Underlying Fund must have
(at the time of purchase) the highest quality rating assigned to short-term debt
securities or, if not rated, or rated by only one agency, are determined to be
of comparative quality pursuant to guidelines approved by a Fund's or Underlying
Fund's Boards of Trustees and Directors. Highest quality ratings for commercial
paper for Moody's and S&P are as follows:

Moody's: The rating "Prime-1" is the highest commercial paper rating
category assigned by Moody's. These issues (or related supporting institutions)
are considered to have a superior capacity for repayment of short-term
promissory obligations.

S&P: Commercial paper ratings of S&P are current assessments of the
likelihood of timely payment of debts having original maturities of no more than
365 days. Commercial paper rated in the "A-1" category by S&P indicates that the
degree of safety regarding timely payment is either overwhelming or very strong.
Those issues determined to possess overwhelming safety characteristics are
denoted "A- 1+".

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APPENDIX B

As stated in the Prospectus, the Underlying Funds may enter into certain futures
transactions and options for hedging purposes. Such transactions are described
in this Appendix.

I. Interest Rate Futures Contracts

Use of Interest Rate Futures Contracts. Bond prices are established in both the
cash market and the futures market. In the cash market, bonds are purchased and
sold with payment for the full purchase price of the bond being made in cash,
generally within five business days after the trade. In the futures market, only
a contract is made to purchase or sell a bond in the future for a set price on a
certain date. Historically, the prices for bonds established in the futures
markets have tended to move generally in the aggregate in concert with the cash
market prices and have maintained fairly predictable relationships. Accordingly,
the Funds may use interest rate futures contracts as a defense, or hedge,
against anticipated interest rate changes and not for speculation. As described
below, this would include the use of futures contract sales to protect against
expected increases in interest rates and futures contract purchases to offset
the impact of interest rate declines.

The Funds presently could accomplish a similar result to that which it hopes to
achieve through the use of futures contracts by selling bonds with long
maturities and investing in bonds with short maturities when interest rates are
expected to increase, or conversely, selling short-term bonds and investing in
long-term bonds when interest rates are expected to decline. However, because of
the liquidity that is often available in the futures market, the protection is
more likely to be achieved, perhaps at a lower cost and without changing the
rate of interest being earned by the Funds, through using futures contracts.

Description of Interest Rate Futures Contracts. An interest rate futures
contract sale would create an obligation by a Fund, as seller, to deliver the
specific type of financial instrument called for in the contract at a specific
future time for a specified price. A futures contract purchase would create an
obligation by the Fund, as purchaser, to take delivery of the specific type of
financial instrument at a specific future time at a specific price. The specific
securities delivered or taken, respectively, at settlement date, would not be
determined until or at near that date. The determination would be in accordance
with the rules of the

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exchange on which the futures contract sale or purchase was
made.

Although interest rate futures contracts by their terms call for actual delivery
or acceptance of securities, in most cases the contracts are closed out before
the settlement date without making or taking of delivery of securities. Closing
out a futures contract sale is effected by the Fund's entering into a futures
contract purchase for the same aggregate amount of the specific type of
financial instrument and the same delivery date. If the price of the sale
exceeds the price of the offsetting purchase, the Fund is immediately paid the
difference and thus realizes a gain. If the offsetting purchase price exceeds
the sale price, the Fund pays the difference and realizes a loss. Similarly, the
closing out of a futures contract purchase is effected by the Fund entering into
a futures contract sale. If the offsetting sale price exceeds the purchase
price, the Fund realizes a gain, and if the purchase price exceeds the
offsetting sale price, the Fund realizes a loss.

Interest rate futures contracts are traded in an auction environment on the
floors of several exchanges -- principally, the Chicago Board of Trade, the
Chicago Mercantile Exchange and the New York Futures Exchange. The Funds would
deal only in standardized contracts on recognized exchanges. Each exchange
guarantees performance under contract provisions through a clearing corporation,
a nonprofit organization managed by the exchange membership.

A public market now exists in futures contracts covering various financial
instruments including long-term United States Treasury Bonds and Notes;
Government National Mortgage Association (GNMA) modified pass-through mortgage
backed securities; three-month United States Treasury Bills; and ninety-day
commercial paper. The Funds may trade in any interest rate futures contracts for
which there exists a public market, including, without limitation, the foregoing
instruments.

Example of Futures Contract Sale. The Funds would engage in an interest rate
futures contract sale to maintain the income advantage from continued holding of
a long-term bond while endeavoring to avoid part or all of the loss in market
value that would otherwise accompany a decline in long-term securities prices.
Assume that the market value of a certain security held by a particular Fund
tends to move in concert with the futures market prices of long-term United
States Treasury bonds ("Treasury Bonds"). The adviser wishes to fix the current
market value of the portfolio security until some point in the future. Assume
the portfolio security has a

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market value of 100, and the adviser believes that, because of an anticipated
rise in interest rates, the value will decline to 95. The fund might enter into
futures contract sales of Treasury bonds for an equivalent of 98. If the market
value of the portfolio security does indeed decline from 100 to 95, the
equivalent futures market price for the Treasury bonds might also decline from
98 to 93.

In that case, the five point loss in the market value of the portfolio security
would be offset by the five point gain realized by closing out the futures
contract sale. Of course, the futures market price of Treasury bonds might well
decline to more than 93 or to less than 93 because of the imperfect correlation
between cash and futures prices mentioned below.

The adviser could be wrong in its forecast of interest rates and the
equivalent futures market price could rise above 98. In this case, the market
value of the portfolio securities, including the portfolio security being
protected, would increase. The benefit of this increase would be reduced by the
loss realized on closing out the futures contract sale.

If interest rate levels did not change, the Fund in the above example might
incur a loss of 2 points (which might be reduced by an offsetting transaction
prior to the settlement date). In each transaction, transaction expenses would
also be incurred.

Example of Futures Contract Purchase. The Funds would engage in an interest
rate futures contract purchase when they are not fully invested in long-term
bonds but wish to defer for a time the purchase of long-term bonds in light of
the availability of advantageous interim investments, e.g., shorter term
securities whose yields are greater than those available on long-term bonds. A
Fund's basic motivation would be to maintain for a time the income advantage
from investing in the short-term securities; the Fund would be endeavoring at
the same time to eliminate the effect of all or part of an expected increase in
market price of the long-term bonds that the Fund may purchase.

For example, assume that the market price of a long-term bond that the Fund
may purchase, currently yielding 10% , tends to move in concert with futures
market prices of Treasury bonds. The adviser wishes to fix the current market
price (and thus 10% yield) of the long-term bond until the time (four months
away in this example) when it may purchase the bond. Assume the long-term bond
has a market price of 100, and the adviser believes that, because of an
anticipated fall in interest rates, the price will have risen to 105 (and the
yield will have dropped to about 91/2%) in four months.

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The Fund might enter into futures contracts purchases of Treasury bonds for an
equivalent price of 98. At the same time, the Fund would assign a pool of
investments in short-term securities that are either maturing in four months or
earmarked for sale in four months, for purchase of the long-term bond at an
assumed market price of 100. Assume these short-term securities are yielding
15%. If the market price of the long-term bond does indeed rise from 100 to 105,
the equivalent futures market price for Treasury bonds might also rise from 98
to 103. In that case, the 5 point increase in the price that the Fund pays for
the long-term bond would be offset by the 5 point gain realized by closing out
the futures contract purchase.

The adviser could be wrong in its forecast of interest rates; long-term
interest rates might rise to above 10%; and the equivalent futures market price
could fall below 98. If short-term rates at the same time fall to 10% or below,
it is possible that the Fund would continue with its purchase program for
long-term bonds. The market price of available long-term bonds would have
decreased. The benefit of this price decrease, and thus yield increase, will be
reduced by the loss realized on closing out the futures contract purchase.

If, however, short-term rates remained above available long-term rated, it
is possible that the Fund would discontinue its purchase program for long-term
bonds. The yield on short-term securities in the portfolio, including those
originally in the pool assigned to the particular long-term bond, would remain
higher than yields on long-term bonds. The benefit of this continued incremental
income will be reduced by the loss realized on closing out the futures contract
purchase. In each transaction, expenses would also be incurred.

II. Index Futures Contracts

General. A bond index assigns relative values of the bonds included in the
index bind the index fluctuates with changes in the market values of the bonds
included. The Chicago Board of Trade has designed a futures contract based on
the Bond Buyer Municipal Bond Index. This Index is composed of 40 term revenue
and general obligation bonds and its composition is updated regularly as new
bonds meeting the criteria of the Index are issued and existing bonds mature.
The Index is intended to provide an accurate indicator of trends and changes in
the municipal bond market. Each bond in the Index is independently priced by six
dealer-to-dealer municipal bond brokers daily. The 40 prices then are averaged
and multiplied by a coefficient. The coefficient is used to

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maintain the continuity of the Index when its composition
changes.

A stock index assigns relative values to the stocks included in the index
and the index fluctuates with changes in the market values of the stocks
included. Some stock index futures contracts are based on broad market indexed,
such as the Standard & Poor's 500 or the New York Stock Exchange Composite
Index. In contrast, certain exchanges offer futures contracts on narrower market
indexes, such as the Standard & Poor's 100 or indexes based on an industry or
market segment, such as oil and gas stocks.

Futures contracts are traded on organized exchanges regulated by the
Commodity Futures Trading Commission. Transactions on such exchanges are cleared
through a clearing corporation , which guarantees the performance of the parties
to each contract.

A Fund will sell index futures contracts in order to offset a decrease in
market value of its portfolio securities that might otherwise result from a
market decline. A Fund will purchase index futures contracts in anticipation of
purchases of securities. In a substantial majority of these transactions, a Fund
will purchase such securities upon termination of the long futures position, but
a long futures position may be terminated without a corresponding purchase of
securities.

In addition, a Fund may utilize index futures contracts in anticipation of
changes in the composition of its portfolio holdings. For example, in the event
that a Fund expects to narrow the range of industry groups represented in its
holdings it may, prior to making purchases of the actual securities, establish a
long futures position based on a more restricted index, such as an index
comprised of securities of a particular industry group. A Fund may also sell
futures contracts in connection with this strategy, in order to protect against
the possibility that the value of the securities to be sold as part of the
restructuring of the portfolio will decline prior to the time of sale.

Examples of Stock Index Futures Transactions. The
following are examples of transactions in stock index futures
(net of commissions and premiums, if any).

ANTICIPATORY PURCHASE HEDGE: Buy the Future
Hedge Objective: Protect Against Increasing Price

Portfolio Futures

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-Day Hedge is Placed-

Anticipate buying $62,500 in Buying 1 Index Futures at 125
Equity Securities Value of Futures =
$62,500/Contract

-Day Hedge is Lifted-

Buy Equity Securities with Actual Sell 1 Index Futures at 130 Cost = $65,000
Value of Futures = Increase in Purchase Price = $65,000/Contract $2,500 Gain on
Futures = $2,500

HEDGING A STOCK PORTFOLIO: Sell the Future
Hedge Objective: Protect Against Declining
Value of the Portfolio

Factors:

Value of Stock Portfolio = $1,000,000 Value of Futures Contract - 125 X $500 =
$62,500 Portfolio Beta Relative to the Index = 1.0

Portfolio Futures

-Day Hedge is Placed-

Anticipate Selling $1,000,000 in Sell 16 Index Futures at 125
Equity Securities Value of Futures = $1,000,000

-Day Hedge is Lifted-

Equity Securities - Own Stock Buy 16 Index Futures at 120 with Value = $960,000
Value of Futures = $960,000
Loss in Portfolio Value = $40,000 Gain on Futures = $40,000

III. Margin Payments

Unlike purchase or sales of portfolio securities, no price is paid or
received by a Fund upon the purchase or sale of a futures contract. Initially,
the Fund will be required to deposit with the broker or in a segregated account
with the Custodian an amount of cash or cash equivalents, known as initial
margin, based on the value of the contract. The nature of initial margin in
futures transactions is different from that of margin in security transactions
in that futures contract margin does not involve the borrowing of funds by the
customer to finance the transactions. Rather, the initial margin is in the
nature of a performance bond or good faith deposit on the contract which is
returned to the Fund upon termination of the futures contract assuming all
contractual

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obligations have been satisfied. Subsequent payments, called variation margin,
to and from the broker, will be made on a daily basis as the price of the
underlying instruments fluctuates making the long and short positions in the
futures contract more or less valuable, a process known as marking-to-
the-market. For example, when a particular Fund has purchased a futures contract
and the price of the contract has risen in response to a rise in the underlying
instruments, that position will have increased in value and the Fund will be
entitled to receive from the broker a variation margin payment equal to that
increase in value. Conversely, where the Fund has purchased a futures contract
and the price of the futures contract has declined in response to a decrease in
the underlying instruments, the position would be less valuable and the Fund
would be required to make a variation margin payment to the broker. At any time
prior to expiration of the futures contract, the adviser may elect to close the
position by taking an opposite position, subject to the availability of a
secondary market, which will operate to terminate the Fund's position in the
futures contract. A final determination of variation margin is then made,
additional cash is required to be paid by or released to the Fund, and the Fund
realizes a loss or gain.

IV. Risks of Transactions in Futures Contracts

There are several risks in connection with the use of futures by the
Underlying Funds as hedging devices. One risk arises because of the imperfect
correlation between movements in the price of the futures and movements in the
price of the instruments which are the subject of the hedge. The price of the
future may move more than or less than the price of the instruments being
hedged. If the price of the futures moves less than the price of the instruments
which are the subject of the hedge, the hedge will not be fully effective but,
if the price of the instruments being hedged has moved in an unfavorable
direction, the Fund would be in a better position than if it had not hedged at
all. If the price of the instruments being hedged has moved in a favorable
direction, this advantage will be partially offset by the loss on the futures.
If the price of the futures moves more than the price of the hedged instruments,
the Fund involved will experience either a loss or gain on the futures which
will not be completely offset by movements in the price of the instruments which
are the subject of the hedge. To compensate for the imperfect correlation of
movements in the price of instruments being hedged and movements in the price of
futures contracts, the Fund may buy or sell futures contracts in a greater
dollar amount than the dollar amount of instruments being hedged if the
volatility over a particular time period of the prices of such instruments has
been greater than the

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<PAGE>

volatility over such time period of the futures, or if otherwise deemed to be
appropriate by the Adviser. Conversely, the Funds may buy or sell fewer futures
contracts if the volatility over a particular time period of the prices of the
instruments being hedged is less than the volatility over such time period of
the futures contract being used, or if otherwise deemed to be appropriate by the
Adviser. It is also possible that, when the Fund had sold futures to hedge its
portfolio against a decline in the market, the market may advance and the value
of instruments held in the Fund may decline. If this occurred, the Fund would
lose money on the futures and also experience a decline in value in its
portfolio securities.

Where futures are purchased to hedge against a possible increase in the
price of securities before a Fund is able to invest its cash (or cash
equivalents) in an orderly fashion, it is possible that the market may decline
instead; if the Fund then concludes not to invest its cash at that time because
of concern as to possible further market decline or for other reasons, the Funds
will realize a loss on the futures contract that is not offset by a reduction in
the price of the instruments that were to be purchased.

In instances involving the purchase of futures contracts by the Funds, an
amount of cash and cash equivalents, equal to the market value of the futures
contracts, will be deposited in a segregated account with the Custodian and/or
in a margin account with a broker to collateralize the position and thereby
insure that the use of such futures is unleveraged.

In addition to the possibility that there may be an imperfect correlation,
or no correlation at all, between movements in the futures and the instruments
being hedged, the price of futures may not correlate perfectly with movement in
the cash market due to certain market distortions. Rather than meeting
additional margin deposit requirements, investors may close futures contracts
through off-setting transactions which could distort the normal relationship
between the cash and futures markets. Second, with respect to financial futures
contracts, the liquidity of the futures market depends on participants entering
into off-setting transactions rather than making or taking delivery. To the
extent participants decide to make or take delivery, liquidity in the futures
market could be reduced thus producing distortions. Third, from the point of
view of speculators, the deposit requirements in the futures market are less
onerous than margin requirements in the securities market. Therefore, increased
participation by speculators in the futures market may also cause temporary
price distortions. Due to the possibility of price distortion in the futures
market, and

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because of the imperfect correlation between the movements in the cash market
and movements in the price of futures, a correct forecast of general market
trends or interest rate movements by the adviser may still not result in a
successful hedging transaction over a short time frame.

Positions in futures may be closed out only on an exchange or board of
trade which provides a secondary market for such futures. Although the Funds
intend to purchase or sell futures only on exchanges or boards of trade where
there appear to be active secondary markets, there is no assurance that a liquid
secondary market on any exchange or board of trade will exist for any particular
contract or at any particular time. In such event, it may not be possible to
close a futures investment position, and in the event of adverse price
movements, the Funds would continue to be required to make daily cash payments
of variation margin. However, in the event futures contracts have been used to
hedge portfolio securities, such securities will not be sold until the futures
contract can be terminated. In such circumstances, an increase in the price of
the securities, if any, may partially or completely offset losses on the futures
contract. However, as described above, there is no guarantee that the price of
the securities will in fact correlate with the price movements in the futures
contract and thus provide an offset on a futures contract.

Further, it should be noted that the liquidity of a secondary market in a
futures contract may be adversely affected by "daily price fluctuation limits"
established by commodity exchanges which limit the amount of fluctuation in a
futures contract price during a single trading day. Once the daily limit has
been reached in the contract, no trades may be entered into at a price beyond
the limit, thus preventing the liquidation of open futures positions. The
trading of futures contracts is also subject to the risk of trading halts,
suspensions, exchange or clearing house equipment failures, government
intervention, insolvency of a brokerage firm or clearing house or other
disruptions of normal activity, which could at times make it difficult or
impossible to liquidate existing positions or to recover excess variation margin
payments.

Successful use of futures by the Funds is also subject to the adviser's
ability to predict correctly movements in the direction of the market. For
example, if a particular Fund has hedged against the possibility of a decline in
the market adversely affecting securities held by it and securities prices
increase instead, the Fund will lose part or all of the benefit to the increased
value of its securities which it has hedged because it will have offsetting
losses in its futures

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positions. In addition, in such situations, if the Fund has insufficient cash,
it may have to sell securities to meet daily variation margin requirements. Such
sales of securities may be, but will not necessarily be, at increased prices
which reflect the rising market. The Funds may have to sell securities at a time
when they may be disadvantageous to do so.

V. Options on Futures Contracts

The Underlying Funds may purchase and write options on the futures
contracts described above. A futures option gives the holder, in return for the
premium paid, the right to buy (call) from or sell (put) to the writer of the
option a futures contract at a specified price at any time during the period of
the option. Upon exercise, the writer of, the option is obligated to pay the
difference between the cash value of the futures contract and the exercise
price. Like the buyer or seller of a futures contract, the holder, or writer, of
an option has the right to terminate its position prior to the scheduled
expiration of the option by selling, or purchasing an option of the same series,
at which time the person entering into the closing transaction will realize a
gain or loss. A Fund will be required to deposit initial margin and variation
margin with respect to put and call options on futures contracts written by it
pursuant to brokers' requirements similar to those described above. Net option
premiums received will be included as initial margin deposits.

Investments in futures options involve some of the same considerations that
are involved in connection with investments in future contracts (for example,
the existence of a liquid secondary market). In addition, the purchase or sale
of an option also entails the risk that changes in the value of the underlying
futures contract will not correspond to changes in the value of the option
purchased. Depending on the pricing of the option compared to either the futures
contract upon which it is based, or upon the price of the securities being
hedged, an option may or may not be less risky than ownership of the futures
contract or such securities. In general, the market prices of options can be
expected to be more volatile than the market prices on underlying futures
contract. Compared to the purchase or sale of futures contracts, however, the
purchase of call or put options on futures contracts may frequently involve less
potential risk to the Fund because the maximum amount at risk is the premium
paid for the options (plus transaction costs). The writing of an option on a
futures contract involves risks similar to those risks relating to the sale of
futures contracts.

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VI. Currency Transactions

The Fund may engage in currency transactions in order to hedge the value of
portfolio holdings denominated in particular currencies against fluctuations in
relative value. Currency transactions include forward currency contracts,
currency futures, options on currencies, and currency swaps. A forward currency
contract involves a privately negotiated obligation to purchase or sell (with
delivery generally required) a specific currency at a future date, which may be
any fixed number of days from the date of the contract agreed upon by the
parties, at a price set at the time of the contract. A currency swap is an
agreement to exchange cash flows based on the notional difference among two or
more currencies and operates similarly to an interest rate swap as described in
the Statement of Additional Information. The Fund may enter into currency
transactions with counterparties which have received (or the guarantors of the
obligations which have received) a credit rating of A-1 or P-1 by S&P or
Moody's, respectively, or that have an equivalent rating from a NRSRO or are
determined to be of equivalent credit quality by the Advisor.

The Fund's dealings in forward currency contracts and other currency
transactions such as futures, options, options on futures and swaps will be
limited to hedging involving either specific transactions or portfolio
positions. Transaction hedging is entering into a currency transaction with
respect to specific assets or liabilities of the Fund, which will generally
arise in connection with the purchase or sale of its portfolio securities or the
receipt of income therefrom. Position hedging is entering into a currency
transaction with respect to portfolio security positions denominated or
generally quoted in that currency.

The Fund will not enter into a transaction to hedge currency exposure to an
extent greater after netting all transactions intended wholly or partially to
offset other transactions, than the aggregate market value (at the time of
entering into the transaction) of the securities held in its portfolio that are
denominated or generally quoted in or currently convertible into such currency,
other than with respect to proxy hedging as described below.

The Fund may also cross-hedge currencies by entering into transactions to
purchase or sell one or more currencies that are expected to decline in value
relative to other currencies to which the Fund has or in which the Fund expects
to have portfolio exposure.

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To reduce the effect of currency fluctuations on the value of existing or
anticipated holdings of portfolio securities, the Fund may also engage proxy
hedging. Proxy hedging is often used when the currency to which the Fund's
portfolio is exposed is difficult to hedge or to hedge against the dollar. Proxy
hedging entails entering into a commitment or option to sell a currency whose
changes in value are generally considered to be correlated to a currency or
currencies in which some or all of the Fund's portfolio securities are or are
expected to be denominated, in exchange for U.S. dollars. The amount of the
commitment or option would not exceed the value of the Fund's securities
denominated in correlated currencies. For example, if the Advisor considers that
the Austrian schilling is correlated to the German deutschemark (the "D-mark"),
the Fund holds securities denominated in shillings and the Advisor believes that
the value of the schillings will decline against the U.S. dollar, the Advisor
may enter into a commitment or option to sell D-marks and buy dollars. Currency
hedging involves some of the same risks and considerations as other transactions
with similar instruments. Currency transactions can result in losses to the Fund
if the currency being hedged fluctuates in value to a degree or in a direction
that is not anticipated. Further, there is the risk that the perceived
correlation between various currencies may not be present or may not be present
during the particular time that the Fund is engaging in proxy hedging. If a Fund
enters into a currency hedging transaction, the Fund will comply with the asset
segregation requirements. Under such requirements, the Fund will segregate
liquid, high grade assets with the custodian to the extent the Fund's
obligations are not otherwise "covered" through ownership of the underlying
currency.

Currency transactions are subject to risks different from those of other
portfolio transactions. Because currency control is of great importance to the
issuing governments and influences economic planning and policy, purchases and
sales of currency and related instruments can be negatively affected by
government exchange controls, blockages, and manipulations or exchange
restrictions imposed by governments. These can result in losses to the Fund if
it is unable to deliver or receive currency or funds in settlement of
obligations and could also cause hedges it has entered into to be rendered
useless, resulting in full currency exposure as well as incurring transaction
costs. Buyers and sellers of currency futures are subject to the same risks that
apply to the use of futures generally. Further, settlement of a currency futures
contract for the purchase of most currencies must occur at a bank based in the
issuing nation. Trading options on currency futures is relatively new, and the
ability to establish and close to positions on such options is subject to the

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maintenance of a liquid market which may not always be available. Currency
exchange rates may fluctuate based on factors extrinsic to that country's
economy.

VII. Other Matters

Accounting for futures contracts will be in accordance with generally
accepted accounting principles.

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PART C. OTHER INFORMATION

Item 24. Financial Statements and Exhibits.
---------------------------------

(a) Not Applicable

(b) Exhibits (the number of each exhibit relates to the exhibit
designation in Form N-1A):

(1) (a) Articles of Incorporation14

(b) Articles of Amendment14

(d) Articles Supplementary for The Munder
Small-Cap Value Fund, The Munder Equity
Selection Fund, The Munder Micro-Cap
Equity Fund, and The NetNet Funds15

(e) Articles Supplementary for The Munder
Short Term Treasury Fund16

(f) Articles Supplementary for The Munder
Asset Allocation Funds (to be filed by
Amendment).

(2) By-Laws1

(3) Not Applicable

(4) (a) Specimen security for The Munder Multi-
Season Growth Fund2

(b) By-Laws1

(5) (a) Form of Investment Advisory Agreement for
The Munder Multi-Season Growth Fund7

(b) Form of Investment Advisory Agreement for
The Munder Money Market Fund7

(d) Form of Investment Advisory Agreement for
The Munder Value Fund12

<PAGE>

(e) Form of Investment Advisory Agreement for
The Munder Mid-Cap Growth Fund12

(f) Form of Investment Advisory Agreement for
The Munder International Bond Fund14

(g) Form of Investment Advisory Agreement for
The NetNet Fund13

(h) Form of Investment Advisory Agreement for
The Munder Small-Cap Value Fund14

(i) Form of Investment Advisory Agreement for
The Munder Micro-Cap Equity Fund14

(j) Form of Investment Advisory Agreement for
The Munder Equity Selection Fund14

(k) Form of Investment Advisory Agreement for
The Munder Short Term Treasury Fund16

(l) Form of Investment Advisory Agreement for
The Munder Asset Allocation Funds (to be
filed by Amendment).

(6) (a) Form of Underwriting Agreement12

(b) Notice to Underwriting Agreement with
respect to The Munder Value Fund and The
Munder Mid-Cap Growth Fund12

(d) Notice to Underwriting Agreement with
respect to The Munder Small-Cap Value
Fund, The Munder Equity Selection Fund,
The Munder Micro-Cap Equity Fund and The
NetNet Fund14

(e) Notice to Underwriting Agreement with
respect to The Munder Short Term Treasury
Fund16

(f) Notice to Underwriting Agreement with respect to The
Munder Asset Allocation Funds (to be filed by
Amendment).

(7) Not Applicable

(8) (a) Form of Custodian Contract12

<PAGE>

(b) Notice to Custodian Contract with respect
to The Munder Value Fund and The Munder
Mid-Cap Growth Fund12

(d) Notice to Custodian Contract with respect
to The Munder Small-Cap Value Fund, The
Munder Equity Selection Fund, The Munder
Micro-Cap Equity Fund and The NetNet
Fund14

(e) Notice to Custodian Contract with respect
to The Munder Short Term Treasury Fund16

(f) Notice to Custodian Contract with respect to The Munder
Asset Allocation Funds (to be filed by Amendment).

(g) Form of Subcustodian Agreement15

(9) (a) Transfer Agency and Service Agreement12

(b) Notice to Transfer Agency and Service
Agreement with respect to The Munder
Value Fund and The Munder Mid-Cap Growth
Fund12

(d) Notice to Transfer Agency and Service
Agreement with respect to The Munder
Small-Cap Value Fund, The Munder Equity
Selection Fund, The Munder Micro-Cap
Equity Fund and The NetNet Fund14

(e) Notice to Transfer Agency and Service
Agreement with respect to The Munder Short
Term Treasury Fund15

(f) Notice to Transfer Agency and Service
Agreement with respect to The Munder Asset
Allocation Funds (to be filed by
Amendment).

(g) Administration Agreement12

(h) Notice to Administration Agreement with
respect to The Munder Value and The Munder
Mid-Cap Growth Fund12

<PAGE>

(i) Notice to Administration Agreement with
respect to The Munder International Bond
Fund12

(j) Notice to Administration Agreement with
respect to The Munder Small-Cap Value
Fund, The Munder Equity Selection Fund,
The Munder Micro-Cap Equity Fund and The
NetNet Fund14

(k) Notice to Administration Agreement with
respect to The Munder Short Term Treasury
Fund15

(l) Notice to Administration Agreement with respect to The
Munder Asset Allocation Funds (to be filed by
Amendment).

(10) (a) Opinion and Consent of Counsel with
respect to The Munder Multi-Season Growth
Fund2

(b) Opinion and Consent of Counsel with
respect to The Munder Money Market Fund5

(d) Opinion and Consent of Counsel with
respect to The Munder Value Fund and The
Munder Mid-Cap Growth Fund12

(e) Opinion and Consent of Counsel with
respect to The Munder International Bond
Fund12

(f) Opinion and Consent of Counsel with
respect to The NetNet Fund 13

(g) Opinion and Consent of Counsel with
respect to The Munder Small-Cap Value
Fund, the Munder Equity Selection Fund and
The Munder Micro-Cap Equity Fund15

(h) Opinion and Consent of Counsel with
respect to The Munder Short Term Treasury
Fund16

(i) Opinion and Consent of Counsel with respect to The
Munder Asset Allocation Funds (to be filed by
Amendment).

<PAGE>

(11) (a) Consent of Dechert Price & Rhoads (included with
exhibits 10(a)-(i)).

(b) Consent of Ernst & Young LLP15

(d) Letter of Arthur Andersen LLP regarding
change in independent auditor required by
Item 304 of Regulation S-K.11

(e) Powers of Attorney13

(12) Not Applicable

(13) Initial Capital Agreement2

(14) Not Applicable

(15) (a) Service Plan for The Munder Multi-Season
Growth Fund Class A Shares7

(b) Service and Distribution Plan for The
Munder Multi-Season Growth Fund Class B
Shares7

(d) Service Plan for The Munder Money Market
Fund Class A Shares7

(e) Service and Distribution Plan for The
Munder Money Market Fund Class B Shares7

(f) Service and Distribution Plan for The
Munder Money Market Fund Class D Shares7

(g) Service Plan for The Munder Real Estate
Equity Investment Fund Class A Shares7

(h) Service and Distribution Plan for The
Munder Real Estate Equity Investment Fund
Class B Shares7

(i) Service and Distribution Plan for The
Munder Real Estate Equity Investment Fund
Class D Shares7

(j) Form of Service Plan for The Munder Multi-
Season Growth Fund Investor Shares8

<PAGE>

(k) Form of Service Plan for Class K Shares of
The Munder Funds, Inc.14

(l) Form of Service Plan for Class A Shares of
The Munder Funds, Inc.14

(m) Form of Distribution and Service Plan for
Class B Shares of The Munder Funds, Inc.14

(n) Form of Distribution and Service Plan for
Class C Shares of The Munder Funds, Inc.14

(o) Form of Distribution and Service Plan for
The NetNet Fund13

(16) Schedule for Computation of Performance
Quotations6

(17) Not Applicable

(18) Multi-Class Plan8

- --------------------------------
* To be filed by Amendment
- --------------------------------

1. Filed in Registrant's initial Registration Statement on
November 18, 1992 and incorporated by reference herein.

2. Filed in Pre-Effective Amendment No. 2 to the
Registrant's Registration Statement on February 26, 1993
and incorporated by reference herein.

3. Filed in Post-Effective Amendment No. 3 to the
Registrant's Registration Statement on July 28, 1993 and
incorporated by reference herein.

4. Filed in Post-Effective Amendment No. 7 to the
Registrant's Registration Statement on August 26, 1994
and incorporated by reference herein.

5. Filed in Post-Effective Amendment No. 2 to the
Registrant's Registration Statement on July 9, 1993 and
incorporated by reference herein.

6. Filed in Post-Effective Amendment No. 5 to the
Registrant's Registration Statement on March 28, 1994 and
incorporated by reference herein.

7. Filed in Post-Effective Amendment No. 8 to the
Registrant's Registration Statement on February 28, 1995
and incorporated by reference herein.

<PAGE>

8. Filed in Post-Effective Amendment No. 9 to the
Registrant's Registration Statement on April 13, 1995 and
incorporated by reference herein.

9. Filed in Post-Effective Amendment No. 10 to the
Registrant's Registration Statement on May 2, 1995 and
incorporated by reference herein.

10. Filed in Post-Effective Amendment No. 11 to the
Registrant's Registration Statement on May 31, 1995 and
incorporated by reference herein.

11. Filed in Post-Effective Amendment No. 12 to the
Registrant's Registration Statement on August 29, 1995
and incorporated by reference herein.

12. Filed in Post-Effective Amendment No. 16 to the
Registrant's Registration Statement on June 25, 1996 and
incorporated by reference herein.

13. Filed in Post-Effective Amendment No. 17 to the
Registrant's Registration Statement on August 9, 1996 and
incorporated by reference herein.

14. Filed in Post-Effective Amendment No. 18 to the
Registrant's Registration Statement on August 14, 1996
and incorporated by reference herein.

15. Filed in Post-Effective Amendment No. 20 to the
Registrant's Registration Statement on October 28, 1996
and incorporated by reference herein.

16. Filed in Post-Effective Amendment No. 21 to the
Registrant's Registration Statement on December 13, 1996
and incorporated by reference herein.

Item 25. Persons Controlled by or Under Common Control with
Registrant.
--------------------------------------------------

Not Applicable.

Item 26. Number of Holders of Securities.
-------------------------------

As of October 1, 1996, the number of shareholders of record of each
Class of shares of each Series of the Registrant that was offered as of that
date was as follows:

<TABLE>
<S> <C> <C> <C> <C> <C>
Class A Class B Class C Class K Class Y
------------------------------------------------------

The Munder Multi-Season Growth Fund 384 1620 18 141 101

<PAGE>

The Munder Money Market Fund 6 8 1 0 67
The Munder Real Estate Equity 14 9 4 1 28
Investment Fund
The Munder Mid-Cap Growth Fund 8 17 3 1 23
The Munder Value Fund 5 16 1 2 27
The Munder International Bond Fund 1 1 1 1 1
The NetNet Fund - as of October 1, 1995, the NetNet Fund had 28 accounts open

</TABLE>

Item 27. Indemnification.
---------------

Reference is made to Article 7.6 in the Registrant's Articles of
Incorporation, which are incorporated by reference herein.

Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to directors, officers and
controlling persons of the Registrant by the Registrant pursuant to the Fund's
Articles of Incorporation, its By-Laws or otherwise, the Registrant is aware
that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and, therefore,
is 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 directors, officers or controlling persons of the Registrant in
connection with the successful defense of any act, suit or proceeding) is
asserted by such directors, officers or controlling persons in connection with
shares 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 issues.

Item 28. Business and Other Connections of Investment
Adviser.
----------------------------------------------------

Munder Capital Management
-------------------------

Position
Name with Adviser
- ---- ------------

Old MCM, Inc. Partner

<PAGE>

Munder Group LLC Partner

WAM Holdings, Inc. Partner

Woodbridge Capital Management, Inc. Partner

Lee P. Munder President and Chief
Executive Officer

Leonard J. Barr, II Senior Vice President
and Director of
Research

Ann J. Conrad Vice President and
Director of Special
Equity Products

Terry H. Gardner Vice President and
Chief Financial
Officer

Elyse G. Essick Vice President and
Director of Client
Services

Sharon E. Fayolle Vice President and
Director of Money
Market Trading

Otto G. Hinzmann Vice President and
Director of Equity
Portfolio Management

Anne K. Kennedy Vice President and
Director of Corporate
Bond Trading

Ann F. Putallaz Vice President and
Director of Fiduciary
Services
Peter G. Root Vice President and
Director of Government
Securities Trading

Lisa A. Rosen General Counsel and
Director of Mutual
Fund Operations

James C. Robinson Vice President and
Chief Investment
Officer/Fixed Income

Gerald L. Seizert Executive Vice

<PAGE>

President and Chief
Investment
Officer/Equity

Paul D. Tobias Executive Vice
President and Chief
Operating Officer

For further information relating to the Investment Adviser's officers, reference
is made to Form ADV filed under the Investment Advisers Act of 1940 by Munder
Capital Management.
SEC File No. 801-32415

Item 29. Principal Underwriters.
----------------------

(a) Funds Distributor, Inc. ("FDI") serves as
Distributor of shares of the Registrant. FDI also
serves as principal underwriter of the following
investment companies other than the Registrant:

HT Insight Funds, d/b/a Harris Insight Funds
Harris Insight Funds Trust
The Munder Funds Trust
St. Clair Funds, Inc.
BJB Investment Funds
Waterhouse Investors Cash Management Fund, Inc.
Skyline Funds
Foreign Fund, Inc.
PanAgora Funds
Fremont Mutual Funds
RCM Capital Funds, Inc.
RCM Equity Funds, Inc.
LKCM Fund
Pierpont Funds
JPM Advisor Funds
JPM Institutional Funds
Insight Funds

(b) The information required by this Item 29(b) with respect to each
director, officer or partner of FDI is incorporated by reference to
Schedule A of Form BD filed by FDI with the Securities and Exchange
Commission pursuant to the Securities Exchange Act
of 1934 (SEC file No. 8-20518).

Item 30. Location of Accounts and Records.
--------------------------------

The account books and other documents required to be

<PAGE>

maintained by Registrant pursuant to Section 31(a) of the Investment Company Act
of 1940 and the Rules thereunder will be maintained at the offices of:

(1) Munder Capital Management, 480 Pierce Street or 255
East Brown Street, Birmingham, Michigan 48009
(records relating to its function as investment
advisor).

(2) First Data Investor Services Group, Inc., 53 State Street, Exchange
Place, Boston, Massachusetts 02109 or 4400 Computer Drive,
Westborough, Massachusetts 01581 (records relating to its functions
as administrator and transfer agent).

(3) Funds Distributor, Inc., 60 State Street, Boston, Massachusetts
02109 (records relating to its function as distributor).

(4) Comerica Bank, 1 Detroit Center, 500 Woodward
Avenue, Detroit, Michigan 48226 (records relating to
its function as custodian).

Item 31. Management Services.
-------------------

Not Applicable

Item 32. Undertakings.
------------

(a) Not Applicable.

(b) Registrant undertakes to call a meeting of
Shareholders for the purpose of voting upon the
question of removal of a Director or Directors when
requested to do so by the holders of at least 10% of
the Registrant's outstanding shares of beneficial
interest and in connection with such meeting to
comply with the shareholders' communications
provisions of Section 16(c) of the Investment
Company Act of 1940.

(c) Registrant undertakes to furnish to each person to whom a prospectus
is delivered a copy of the Registrant's latest annual report to
shareholders upon request and without charge.

(d) Registrant undertakes to file a Post-Effective Amendment relating to
The Munder Asset Allocation Funds, using reasonably current
financial statements which need not be certified, within four to six
months from the effective date of the Registration Statement with
respect to The Munder Asset Allocation Fund.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended,
and the Investment Company Act of 1940, as amended, Registrant has duly caused
this Post-Effective Amendment No. 22 to the Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Washington, D.C. on this 27th day of December, 1996.

The Munder Funds, Inc.

By: *_______________________
Lee P. Munder

* By: /s/ Paul F. Roye
------------------------
Paul F. Roye
as Attorney-in-Fact

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Post-Effective Amendment No. 22 to the Registration Statement on Form N-1A
has been signed below by the following persons on behalf of The Munder Funds,
Inc. in the capacities and on the date indicated:

Signatures Title Date

*_______________________ President and Chief December 27, 1996
Lee P. Munder Executive Officer

*_______________________ Director December 27, 1996
Charles W. Elliott

*_______________________ Director December 27, 1996
Joseph E. Champagne

*_______________________ Director December 27, 1996
Arthur DeRoy Rodecker

*_______________________ Director December 27, 1996
Jack L. Otto

<PAGE>

*_______________________ Director December 27, 1996
Thomas B. Bender

*_______________________ Director December 27, 1996
Thomas D. Eckert

*_______________________ Director December 27, 1996
John Rakolta, Jr.

*_______________________ Director December 27, 1996
David J. Brophy

*_______________________ Vice President, December 27, 1996
Terry H. Gardner Treasurer and
Chief Financial
Officer

* By: /s/ Paul F. Roye
------------------------
Paul F. Roye
as Attorney-in-Fact

62796.11J

<PAGE>