<PAGE>
Table Of Contents
<TABLE>
<C> <S>
2 Risk/Return Summary
28 Who May Want To Invest
29 Fees And Expenses
32 More About The Funds
32 Glossary
33 Principal Investment Strategies and Risks
34 Other Investment Strategies and Risks
38 Your Investment
38 How To Reach The Funds
38 Purchasing Shares
39 Exchanging Shares
39 Redeeming Shares
40 Additional Policies For Purchases, Exchanges And Redemptions
41 Shareholder Privileges
42 Distribution Arrangements
42 Share Class Selection
42 Applicable Sales Charge
44 Cdsc
45 12b-1 Fees
45 Other Information
46 Pricing Of Fund Shares
46 Distributions
47 Federal Tax Considerations
47 Taxes On Distributions
47 Taxes On Sales Or Exchanges
47 Other Considerations
48 Management
48 Investment Advisors And Sub-advisor
49 Portfolio Managers
52 Financial Highlights
</TABLE>
Back Cover For Additional Information
<PAGE>
Risk/Return Summary
--------------------------------------------------------------------------------
This Risk/Return Summary briefly describes the goals and principal investment
strategies of the Funds and the principal risks of investing in the Funds. For
further information on these and the Funds' other investment strategies and
risks, please read the section entitled "More About The Funds."
Certain terms used in this prospectus are defined in the Glossary. Unless
otherwise noted, all goals of the Funds are non-fundamental and may be changed
by the Board of Directors/Trustees without shareholder approval.
Equity Funds
Balanced Fund
Goal
The Fund's goal is to provide an attractive investment return through a
combination of growth of capital and current income.
Principal Investment Strategies
The Fund pursues its goal by allocating its assets among three asset groups:
equity securities, fixed income securities and cash equivalents.
The Fund normally will invest at least 25% of its assets in fixed income
securities and no more than 75% of its assets in equity securities. The Fund
will notify shareholders at least 30 days before changing this policy.
The advisor will allocate the Fund's assets to the three asset groups based on
its view of the following factors, among others:
. general market and economic conditions and trends;
. interest rates and inflation rates;
. fiscal and monetary developments; and
. long-term corporate earnings growth.
The advisor will try to take advantage of changing economic conditions by
adjusting the ratio of equity securities to fixed income securities or cash
equivalents. For example, if the advisor believes that rapid economic growth
will lead to better corporate earnings in the future, then it might increase
the Fund's equity securities holdings and reduce its fixed income securities
and cash equivalents holdings. Stocks are chosen on the basis of above-average
and sustainable earnings growth, financial stability, or attractive valuation
using the advisor's proprietary GARP (Growth at A Reasonable Price) style,
which focuses on both growth prospects and valuation. Bond strategy focuses on
analysis of current versus historical interest rate relationships and the
relative value of the bond market sectors.
The Fund's fixed income securities include:
. U.S. Government securities;
. obligations of foreign governments;
. corporate obligations;
. zero coupon bonds;
. variable and floating rate securities;
. mortgage and other asset-backed securities; and
. stripped securities.
The Fund's fixed income securities are rated investment grade or better. The
average dollar-weighted maturity is expected to vary between six to fifteen
years.
The Fund's cash equivalents are short-term, high-quality money market
instruments and include:
. commercial paper;
. bankers' acceptances and certificates of deposit;
. corporate obligations; and
. U.S. Government securities.
Principal Risks
All investments carry some degree of risk which will affect the value of the
Fund's portfolio investments,
2
<PAGE>
its investment performance and the price of its shares. As a result, you may
lose money if you invest in the Fund.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.
The Fund is subject to the following principal investment risks:
. Stock Market Risk. The value of the securities in which the Fund invests may
decline in response to developments affecting individual companies and/or
general economic conditions. Price changes may be temporary or last for
extended periods. For example, stock prices have historically risen and
fallen in periodic cycles. In addition, the value of the Fund's investments
may decline if the particular companies the Fund invests in do not perform
well.
. Credit (or Default) Risk. An issuer of a security may default on its payment
obligations. Also, an issuer may suffer adverse changes in its financial
condition that could lower the credit quality of a security, leading to
greater volatility in the price of the security and in shares of the Fund. A
change in the quality rating of a bond can affect the bond's liquidity and
make it more difficult for the Fund to sell.
. Interest Rate Risk. An increase in prevailing interest rates will cause fixed
income securities held by the Fund to decline in value. Longer term bonds are
generally more sensitive to interest rate changes than shorter term bonds.
Generally, the longer the average maturity of the bonds held by the Fund, the
more the Fund's share price will fluctuate in response to interest rate
changes.
3
<PAGE>
Performance
The bar chart and table below give some indication of the risk of an investment
in the Fund. The bar chart shows the Fund's performance for each calendar year
since inception. The table shows how the Fund's average annual total returns
for different calendar periods over the life of the Fund compare to those of a
broad based securities market index.
When you consider this information, please remember the Fund's performance in
past years is not necessarily an indication of how the Fund will perform in the
future.
The annual returns in the bar chart are
for the Fund's Class A Shares and do
not reflect sales loads. If sales loads
were reflected, returns would be less
than those shown.
<TABLE>
<CAPTION>
Average Annual Total Returns
(for the periods ended December 31, 1998)
--------------------------------------
Since
1 Year 5 Years Inception*
--------------------------------------
<S> <C> <C> <C> <C>
Class A 4.60% 10.05% 10.01%
Class B 5.09% N/A 13.25%
Class C 8.98% N/A 12.76%
S&P 500 Index** 28.57% 24.06% 22.63%***
60% S&P 500 Index/40%
Lehman Gov't/Corp.
Index** 20.93% 17.33% 16.53%***
Since inception of Class B+ 28.05%***
Since inception of Class C+ 27.70%***
</TABLE>
--------
* The inception dates for the Class
A, Class B and Class C shares are
4/30/93, 6/21/94 and 1/24/96,
respectively.
** Standard & Poor's Composite 500
Index is an unmanaged index of
common stock prices. The Lehman
Brothers Government/Corporate
Bond Index is a weighted
composite of (i) Lehman Brothers
Government Bond Index, which is
comprised of all publicly issued,
non-convertible debt of the U.S.
Government or any agency thereof,
quasi-federal corporations, and
corporate debt guaranteed by the
U.S. Government and (ii) Lehman
Brothers Corporate Bond Index,
which is comprised of all public
fixed-rate, non-convertible
investment-grade domestic
corporate debt, excluding
collateralized mortgage
obligations.
+ The average annual total return
since inception for the 60% S&P
500 Index 40% Lehman Gov't/Corp.
Index for Class B and Class C
shares is 20.52% and 19.55%,
respectively.
*** Index return from 4/30/93 for
Class A shares, 6/30/94 for Class
B shares and 1/31/96 for Class C
shares.
Balanced Fund Class A
Total Return
(per calendar year)
1994 -5.43%
1995 23.25%
1996 12.58%
1997 17.68%
1998 10.67%
Year-to-date through September 30, 1999: 3.86%
<TABLE>
<S> <C> <C>
Best Quarter: Q4 1998 14.55%
Worst Quarter: Q3 1998 (9.61)%
</TABLE>
The average annual total returns
reflect imposition of the maximum
front-end or contingent deferred sales
charge and conversion of Class B shares
to Class A shares after the applicable
period.
4
<PAGE>
Equity Income Fund
(formerly Growth & Income Fund)
Goal
The Fund's goal is to provide capital appreciation and current income.
Principal Investment Strategies
The Fund pursues its goal by investing primarily in dividend-paying equity
securities. Under normal circumstances, the Fund will invest at least 65% of
its assets in income-producing common stocks and convertible preferred stocks.
The Fund may also purchase fixed income securities which are convertible into
or exchangeable for common stock.
The advisor generally selects large, well-known companies that it believes have
favorable prospects for dividend growth and capital appreciation. The Fund will
seek to produce a current yield greater than the S&P 500.
The Fund focuses on dividend-paying equity securities because, over time,
dividend income has accounted for a significant portion of the total return of
the S&P 500. In addition, dividends are usually a more stable and predictable
source of return than capital appreciation. The advisor believes that stocks
which distribute a high level of current income generally have more stable
prices than those which pay below average dividends.
Principal Risks
All investments carry some degree of risk which will affect the value of the
Fund's portfolio investments, its investment performance and the price of its
shares. As a result, you may lose money if you invest in the Fund.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.
The Fund is subject to the following principal investment risks:
. Stock Market Risk. The value of the securities in which the Fund invests may
decline in response to developments affecting individual companies and/or
general economic conditions. Price changes may be temporary or last for
extended periods. For example, stock prices have historically risen and
fallen in periodic cycles. In addition, the value of the Fund's investments
may decline if the particular companies the Fund invests in do not perform
well.
. Credit (or Default) Risk. An issuer of a security may default on its payment
obligations. Also, an issuer may suffer adverse changes in its financial
condition that could lower the credit quality of a security, leading to
greater volatility in the price of the security and in shares of the Fund. A
change in the quality rating of a bond can affect the bond's liquidity and
make it more difficult for the Fund to sell.
. Interest Rate Risk. An increase in prevailing interest rates will cause fixed
income securities held by the Fund to decline in value. Longer term bonds are
generally more sensitive to interest rate changes than shorter term bonds.
Generally, the longer the average maturity of the bonds held by the Fund, the
more the Fund's share price will fluctuate in response to interest rate
changes.
5
<PAGE>
Performance
The bar chart and table below give some indication of the risk of an investment
in the Fund. The bar chart shows the Fund's performance for each calendar year
since inception.The table shows how the Fund's average annual total returns for
different calendar periods over the life of the Fund compare to those of a
broad based securities market index.
When you consider this information, please remember the Fund's performance in
past years is not necessarily an indication of how the Fund will perform in the
future.
<TABLE>
<CAPTION>
Average Annual Total Returns
(for the periods ended December
31, 1998)
----------------------
Since
1 Year Inception*
----------------------
<S> <C> <C> <C>
Class A 4.00% 18.32%
Class B 4.32% 18.75%
Class C 8.27% 18.15%
S&P 500 Index** 28.57% 27.70%***
Since inception of
Class B 27.70%***
Since inception of
Class C 28.27%***
</TABLE>
The annual returns in the bar chart
are for the Fund's Class A Shares
and do not reflect sales loads. If
sales loads were reflected, returns
would be less than those shown.
--------
*The inception dates for the
Class A, Class B and Class C
shares are 8/8/94, 8/9/94 and
12/5/95, respectively.
** Standard & Poor's Composite
500 Index is an unmanaged
index of common stock prices.
*** Index return from 7/31/94 for
Class A shares and Class B
shares and 12/31/95 for Class
C shares.
The average annual total returns
reflect imposition of the maximum
front-end or contingent deferred
sales charge and conversion of Class
B shares to Class A shares after the
applicable period.
Equity Income Fund Class A
Total Return
(per calendar year)
1995 33.88%
1996 15.81%
1997 32.10%
1998 10.04%
Year-to-date through September 30,
1999: (4.26)%
<TABLE>
<S> <C> <C>
Best Quarter: Q4 1998 13.59%
Worst Quarter: Q3 1998 (9.98)%
</TABLE>
6
<PAGE>
International Equity Fund
Goal
The Fund's goal is to provide long-term capital appreciation.
Principal Investment Strategies
The Fund pursues its goal by investing primarily in foreign securities
including American Depositary Receipts.
Under normal market conditions, at least 65% of the Fund's assets are invested
in equity securities in at least three foreign countries. The Fund mostly
invests in mature markets, but may also invest in emerging markets.
The Fund emphasizes companies with a market capitalization of at least $250
million. The Fund then invests in additional securities trading on either a
foreign or U.S. stock exchange, which are chosen through an economic modeling
process. This process seeks to identify those stocks that will have strong
relative performance in their home market.
At least once a quarter, the advisor creates a list of foreign securities and
American Depositary Receipts which the Fund may purchase based on the country
where the company is located, its competitive advantages, its past financial
record, its future prospects for growth and the market for its securities. The
advisor updates the securities list frequently (at least quarterly), adds new
securities to the list if they are eligible and sells securities not on the
updated securities list as soon as practicable.
After the advisor creates the securities list, it divides the list into two
sections. The first section is designed to provide broad coverage of
international markets. The second section increases exposure to securities that
the advisor expects will perform better than other stocks in their industry
sectors and their markets as a whole. When the advisor believes broader market
exposure will benefit the Fund, it will allocate up to 100% of the Fund's
assets in first section securities. When the advisor identifies strong
potential for specific securities to perform well, the Fund may invest up to
50% of its assets in second section securities.
Principal Risks
All investments carry some degree of risk which will affect the value of the
Fund's portfolio investments, its investment performance and the price of its
shares. As a result, you may lose money if you invest in the Fund.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.
The Fund is subject to the following principal investment risks:
. Stock Market Risk. The value of the securities in which the Fund invests may
decline in response to developments affecting individual companies and/or
general economic conditions. Price changes may be temporary or last for
extended periods. For example, stock prices have historically risen and
fallen in periodic cycles. In addition, the value of the Fund's investments
may decline if particular companies the Fund invests in do not perform well.
. Foreign Securities Risk. Investments by the Fund in foreign securities may
experience greater and more rapid change in value than investments in U.S.
securities. Foreign securities are generally more volatile and less liquid
than U.S. securities, in part because of greater political and economic risks
and because there is less public information available about foreign
companies. Issuers of foreign securities are generally not subject to the
same degree of regulation as are U.S. issuers. The reporting, accounting and
auditing standards of foreign countries may differ, in some cases
significantly, from U.S. standards.
. Currency Risk. A Fund that invests in foreign securities denominated in
foreign currencies may also be subject to currency risk. This is the risk of
loss because a decline in the value of foreign currencies relative to the
U.S. dollar will reduce the value of a Fund's portfolio securities
denominated in those currencies.
. Emerging Markets Risk. Investments by the Fund in emerging market countries
heightens the risks presented by investing in foreign securities and
currencies and may result in loss to the Fund. Numerous emerging countries
have recently experienced serious, and potentially continuing, economic and
political problems. Stock markets in many emerging countries are relatively
small and
7
<PAGE>
risky. Foreigners are often limited in their ability to invest in, and
withdraw assets from, these markets. Additional restrictions may be imposed
under emergency conditions.
. Small Company Stock Risk. The stocks of small companies may have more risks
than those of larger companies. Small companies often have narrower markets
and more limited managerial and financial resources than larger, more
established companies. As a result, they may be more sensitive to changing
economic conditions, which could increase the volatility of a Fund's
portfolio. In addition, small company stocks typically are traded in lower
volume making them difficult to sell.
8
<PAGE>
Performance
The bar chart and table below give some indication of the risk of an investment
in the Fund. The bar chart shows the Fund's performance for each calendar year
since inception. The table shows how the Fund's average annual total returns
for different calendar periods over the life of the Fund compare to those of a
broad based securities market index.
When you consider this information, please remember the Fund's performance in
past years is not necessarily an indication of how the Fund will perform in the
future.
<TABLE>
<CAPTION>
Average Annual Total Returns
(for the periods ended December 31, 1998)
------------------------------------
Since
1 Year 5 Years Inception*
------------------------------------
<S> <C> <C> <C>
Class A 6.93% 4.76% 8.87%
Class B 7.25% N/A 5.91%
Class C 11.23% N/A 7.78%
FT/S&P Actuaries World In-
dex ex U.S.** 16.17% 8.33% 11.87%***
Since inception of Class B 7.89%***
Since inception of Class C 8.39%***
</TABLE>
The annual returns in the bar chart
are for the Fund's Class A Shares
and do not reflect sales loads. If
sales loads were reflected, returns
would be less than those shown.
--------
* The inception dates for the
Class A, Class B and Class C
shares are 11/30/92, 3/9/94 and
9/29/95, respectively.
** The FT/S&P Actuaries World
Index ex U.S. is an unmanaged
index used to portray global
equity markets excluding the
U.S. The Index is weighted
based on the market
capitalization of those stocks
selected to represent each
country and includes gross
represent each country and
includes gross reinvestment of
dividends.
*** Index return from 11/30/92 for
Class A shares, 2/28/94 for
Class B shares and 9/30/95 for
Class C shares.
The average annual total returns
reflect imposition of the maximum
front-end or contingent deferred
sales charge and conversion of Class
B shares to Class A shares after the
applicable period.
International Equity Fund Class A
Total Return
(per calendar year)
1993 32.51%
1994 -8.55%
1995 13.72%
1996 10.06%
1997 3.06%
1998 13.16%
Year-to-date through September 30, 1999: 15.14%
<TABLE>
<S> <C> <C>
Best Quarter: Q4 1998 18.67%
Worst Quarter: Q3 1998 (16.82)%
</TABLE>
9
<PAGE>
Micro-Cap Equity Fund
Goal
The Fund's goal is to provide capital appreciation.
Principal Investment Strategies
The Fund pursues its goal by investing at least 65% of its assets in equity
securities of micro-capitalization companies. Micro-capitalization companies
means companies having a market capitalization within the range of the
companies included in the Wilshire Micro-Cap Index. As of the date of this
prospectus, such capitalizations do not exceed approximately $300 million,
which is considerably less than the market capitalization of S&P 500 companies.
The Fund attempts to provide investors with potentially higher returns than a
fund that invests primarily in larger, more established companies. Since micro-
capitalization companies are generally not as well known to investors and have
less of an investor following than larger companies, they may provide higher
returns due to inefficiencies in the marketplace.
The advisor will choose companies that:
. present the ability to grow significantly over the next several years;
. may benefit from changes in technology, regulations and industry sector
trends; and
. are still in the developmental stage and may have limited product lines.
There is no limit on the length of operating history for the companies in which
the Fund may invest. The Fund may also invest in equity securities of larger
capitalization companies. The Fund may invest without limit in initial public
offerings of micro-capitalization companies.
Principal Risks
All investments carry some degree of risk which will affect the value of the
Fund's portfolio investments, its investment performance and the price of its
shares. As a result, you may lose money if you invest in the Fund.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.
The Fund is subject to the following principal investment risks:
. Stock Market Risk. The value of the securities in which the Fund invests may
decline in response to developments affecting individual companies and/or
general economic conditions. Price changes may be temporary or last for
extended periods. For example, stock prices have historically risen and
fallen in periodic cycles. In addition, the value of the Fund's investments
may decline if the particular companies the Fund invests in do not perform
well.
. Small Company Stock Risk. The stocks of small companies may have more risks
than those of larger companies. Small companies often have narrower markets
and more limited managerial and financial resources than larger, more
established companies. As a result, they may be more sensitive to changing
economic conditions, which could increase the volatility of a Fund's
portfolio. In addition, small company stocks typically are traded in lower
volume making them more difficult to sell.
10
<PAGE>
Performance
The bar chart and table below give some indication of the risk of an investment
in the Fund. The bar chart shows the Fund's performance for each calendar year
since inception. The table shows how the Fund's average annual total returns
for different calendar periods over the life of the Fund compare to those of a
broad based securities market index.
When you consider this information, please remember the Fund's performance in
past years is not necessarily an indication of how the Fund will perform in the
future.
The annual returns in the bar chart are Average Annual Total Returns
for the Fund's Class A Shares and do (for the periods ended December
not reflect sales loads. If sales loads 31, 1998)
were reflected, returns would be less
than those shown.
<TABLE>
----------------------
<CAPTION>
Since
1 Year Inception*
----------------------
<S> <C> <C>
Class A (10.95)% 24.04%
Class B (11.11)% 21.05%
Class C (7.44)% 30.28%
Wilshire Micro-
Cap (7.43)% 7.23%**
Index**
Since inception
of Class B 6.45%***
Since inception
of Class C 9.63%***
</TABLE>
--------
* The inception dates for the
Class A, Class B and Class C
shares are 12/26/96, 2/24/97
and 3/31/97, respectively.
** The Wilshire Micro-Cap Index
consists of all issues in
the Wilshire 5000 Index that
rank below the 2,501st
company based on size. The
Wilshire 5000 Index contains
all publicly traded U.S.
stocks, but excludes REITS
and limited partnerships.
*** Index return from 12/31/96
for Class A shares, 2/28/97
for Class B shares and
3/31/97 for Class C shares.
The average annual total returns
reflect imposition of the maximum
front-end or contingent deferred
sales charge and conversion of
Class B shares to Class A shares
after the applicable period.
Micro-Cap Equity Fund Class A
Total Return
(per calendar year)
1997 71.30%
1998 -5.77%
Year-to-date through September 30, 1999: 18.27%
<TABLE>
<S> <C> <C>
Best Quarter: Q3 1997 40.83%
Worst Quarter: Q3 1998 (28.35)%
</TABLE>
11
<PAGE>
Multi-Season Growth Fund
Goal
The Fund's goal is to provide long-term capital appreciation. This goal is
"fundamental" and cannot be changed without shareholder approval.
Principal Investment Strategies
The Fund pursues its goal by investing at least 65% of its assets in equity
securities. The Fund generally invests in equity securities of companies with
market capitalizations over $1 billion. Its style, which focuses on both growth
prospects and valuation, is known as GARP (Growth at a Reasonable Price) and
seeks to produce attractive returns during various market environments.
The advisor chooses the Fund's investments by reviewing the earnings growth of
approximately 5,500 companies over the past five years and investing in
approximately 50 to 100 companies based on:
. superior earnings growth;
. financial stability;
. relative market value; and
. price changes compared to the S&P 500.
Principal Risks
All investments carry some degree of risk which will affect the value of the
Fund's portfolio investments, its investment performance and the price of its
shares. As a result, you may lose money if you invest in the Fund.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.
The Fund is subject to the following principal investment risk:
. Stock Market Risk. The value of the securities in which the Fund invests may
decline in response to developments affecting individual companies and/or
general economic conditions. Price changes may be temporary or last for
extended periods. For example, stock prices have historically risen and
fallen in periodic cycles. In addition, the value of the Fund's investments
may decline if the particular companies the Fund invests in do not perform
well.
12
<PAGE>
Performance
The bar chart and table below give some indication of the risks of an
investment in the Fund. The bar chart shows the Fund's performance for each
calendar year since inception. The table shows how the Fund's average annual
total returns for different calendar periods over the life of the Fund compare
to those of a broad based securities market index.
When you consider this information, please remember the Fund's performance in
past years is not necessarily an indication of how the Fund will perform in the
future.
The annual returns in the bar chart
are for the Fund's Class B Shares
and do not reflect sales loads. If
sales loads were reflected, returns
would be less than those shown.
<TABLE>
<CAPTION>
Average Annual Total Returns
(for the periods ended December 31, 1998)
---------------------------------
Since
1 Year 5 Years Inception*
---------------------------------
<S> <C> <C> <C>
Class A 8.85% 17.44% 17.09%
Class B 9.29% 17.68% 16.80%
Class C 13.34% 17.90% 17.87%
S&P 500 Index** 28.57% 24.06% 22.63%***
Since inception of Class B 22.63%***
Since inception of Class C 23.33%***
</TABLE>
--------
*The inception dates of the Class A,
Class B and Class C shares are
8/4/93, 4/29/93 and 9/20/93,
respectively.
**Standard & Poor's Composite 500
Index is an unmanaged index of
common stock prices.
***Index return from 7/31/93 for
Class A shares, 4/30/93 for Class
B shares and 9/30/93 for Class C
shares.
The average annual total returns
reflect imposition of the maximum
front-end or contingent deferred
sales charge and conversion of Class
B shares to Class A shares after the
applicable period.
[BAR CHART]
Multi-Season Growth Fund Class B
Total Return
(per calendar year)
1994 -3.21%
1995 31.19%
1996 21.42%
1997 29.20%
1998 14.29%
Year-to-date through September 30, 1999: 0.52%
<TABLE>
<S> <C> <C>
Best Quarter: Q4 1998 19.58%
Worst Quarter: Q3 1998 (14.35)%
</TABLE>
13
<PAGE>
Real Estate Equity Investment Fund
Goal
The Fund's goal is to provide both capital appreciation and current income.
This goal is "fundamental" and cannot be changed without shareholder approval.
Principal Investment Strategies
The Fund pursues its goal by investing, under normal market conditions, at
least 65% of its total assets in equity securities of U.S. companies which are
principally engaged in the real estate industry.
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. The Fund will not own real estate directly.
The advisor selects companies exhibiting steady cash flows, financial
stability, quality management and reasonable valuations.
The companies in which the Fund primarily invests include:
. equity real estate investment trusts ("REITS");
. brokers, home builders and real estate developers;
. companies with substantial real estate holdings (for example, paper and
lumber producers, hotels and entertainment companies);
. manufacturers and distributors of building supplies;
. mortgage REITS; and
. financial institutions which issue or service mortgages.
In addition, the Fund may invest in REITS only if they are traded on a
securities exchange or NASDAQ.
Principal Risks
All investments carry some degree of risk which will affect the value of the
Fund's portfolio investments, its investment performance and the price of its
shares. As a result, you may lose money if you invest in the Fund.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.
The Fund is subject to the following principal investment risks:
. Stock Market Risk. The value of the securities in which the Fund invests may
decline in response to developments affecting individual companies and/or
general economic conditions. Price changes may be temporary or last for
extended periods. For example, stock prices have historically risen and
fallen in periodic cycles. In addition, the value of the Fund's investments
may decline if particular companies the Fund invests in do not perform well.
. Sector Risk. The Fund will concentrate its investments in the real estate
industry sector. Adverse economic, business or political developments
affecting that industry sector could have a major effect on the value of the
Fund's investments.
14
<PAGE>
Performance
The bar chart and table below give some indication of the risk of an investment
in the Fund. The bar chart shows the Fund's performance for each calendar year
since inception. The table shows how the Fund's average annual total returns
for different calendar periods over the life of the Fund compare to those of a
broad based securities market index.
When you consider this information, please remember the Fund's performance in
past years is not necessarily an indication of how the Fund will perform in the
future.
Average Annual Total Returns
The annual returns in the bar chart are (for the periods ended December 31,
for the Fund's Class A Shares and do 1998)
not reflect sales loads. If sales loads
were reflected, returns would be less
than those shown.
<TABLE>
-------------
<CAPTION>
Since
1 Year Inception*
-------------
<S> <C> <C>
Class A (21.72)% 9.38%
Class B (21.55)% 9.70%
Class C (18.57)% 10.09%
NAREIT** (17.51)% 10.82%***
Since
inception of
Class B 11.99%***
Since incep-
tion of Class
C 10.00%***
</TABLE>
--------
*The inception dates for the Class
A, Class B and Class C shares are
9/30/94, 10/3/94 and 1/5/96,
respectively.
**National Association of Real
Estate Investment Trusts
("NAREIT") are equity real estate
investment trusts which are
defined as those which derive
more than 75% of their income
from equity investments in real
estate assets. The NAREIT equity
index includes all tax qualified
real estate investment trusts
listed on the New York Stock
Exchange, the American Stock
Exchange or the NASDAQ National
Market System.
***Index return from 9/30/94 for
Class A and B shares and 12/31/95
for Class C shares.
The average annual total returns
reflect imposition of the maximum
front-end or contingent deferred
sales charge and conversion of Class
B shares to Class A shares after the
applicable period.
Real Estate Equity Investment Fund
Class A
Total Return
(per calendar year)
1995 11.71%
1996 34.03%
1997 22.13%
1998 -17.17%
Year-to-date through September 30, 1999: (4.90)%
<TABLE>
<S> <C> <C>
Best Quarter: Q4 1996 17.73%
Worst Quarter: Q3 1998 (9.51)%
</TABLE>
15
<PAGE>
Small-Cap Value Fund
Goal
The Fund's goal is to provide long-term capital appreciation.
Principal Investment Strategies
The Fund pursues its goal by investing, under normal market conditions, at
least 65% of its assets in equity securities of small capitalization companies.
Small capitalization companies means companies with market capitalizations
within the range of the companies in the Russell 2000 Index. As of the date of
this prospectus, such capitalizations do not exceed approximately $1.5 billion,
which is less than the market capitalization of S&P 500 companies.
The Fund attempts to provide investors with potentially higher returns than a
fund that invests primarily in larger, more established companies. Since small
companies are generally not as well known to investors and have less of an
investor following than larger companies, they may provide higher returns due
to inefficiencies in the marketplace.
The Fund will usually invest in equity securities of companies that the advisor
believes can be purchased at a price significantly below its inherent value. A
company's equity securities may be undervalued because the company is
temporarily overlooked or out of favor due to general economic conditions, a
market decline, industry conditions or developments affecting the particular
company.
In addition to valuation, the advisor considers these factors, among others, in
choosing companies:
. a stable or improving earnings record;
. sound finances;
. above-average growth prospects;
. participation in a fast growing industry;
. strategic niche position in a specialized market; and
. adequate capitalization.
The Fund may invest in equity securities of larger capitalization companies.
Principal Risks
All investments carry some degree of risk which will affect the value of the
Fund's portfolio investments, its investment performance and the price of its
shares. As a result, you may lose money if you invest in the Fund.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.
The Fund is subject to the following principal investment risks:
. Stock Market Risk. The value of the securities in which the Fund invests may
decline in response to developments affecting individual companies and/or
general economic conditions. Price changes may be temporary or last for
extended periods. For example, stock prices have historically risen and
fallen in periodic cycles. In addition, the value of the Fund's investments
may decline if the particular companies the Fund invests in do not perform
well.
. Small Company Stock Risk. The stocks of small companies may have more risks
than those of larger companies. Small companies often have narrower markets
and more limited managerial and financial resources than larger, more
established companies. As a result, they may be more sensitive to changing
economic conditions, which could increase the volatility of a Fund's
portfolio. In addition, small company stocks typically are traded in lower
volume making them more difficult to sell.
16
<PAGE>
Performance
The bar chart and table below give some indication of the risk of an investment
in the Fund. The bar chart shows the Fund's performance for each calendar year
since inception. The table shows how the Fund's average annual total returns
for different calendar periods over the life of the Fund compare to those of a
broad based securities market index.
When you consider this information, please remember the Fund's performance in
past years is not necessarily an indication of how the Fund will perform in the
future.
The annual returns in the bar chart are Average Annual Total Returns
for the Fund's Class A Shares and do (for the periods ended December
not reflect sales loads. If sales loads 31, 1998)
were reflected, returns would be less
than those shown.
<TABLE>
-----------------------
<CAPTION>
Since
1 Year Inception*
-----------------------
<S> <C> <C>
Class A (11.82)% 12.15%
Class B (11.76)% 10.40%
Class C (8.29)% 14.67%
Russell 2000 In-
dex** (2.54)% 8.49%***
Since inception of Class B 10.36%***
Since inception of Class C 8.49%***
</TABLE>
--------
* The inception dates for Class
A, Class B and Class C shares
are 1/10/97, 2/11/97 and
1/13/97, respectively.
** The Russell 2000 Index is a
capitalization weighted total
return index which is comprised
of 2,000 of the smallest
capitalized U.S. domiciled
companies whose stock is traded
in the United States on the New
York Stock Exchange, American
Stock Exchange and the NASDAQ.
*** Index return from 12/31/96 for
Class A and Class B shares and
12/31/96 for Class C shares.
The average annual total returns
reflect imposition of the maximum
front-end or contingent deferred
sales charge and conversion of
Class B shares to Class A shares
after the applicable period.
Small-Cap Value Fund Class A
Total Return
(per calendar year)
1998 -6.70
Year-to-date through September 30, 1999: (8.81)%
<TABLE>
<S> <C> <C>
Best Quarter: Q4 1998 12.71%
Worst Quarter: Q3 1998 (19.93)%
</TABLE>
17
<PAGE>
Small Company Growth Fund
Goal
The Fund's goal is to provide long-term capital appreciation.
Principal Investment Strategies
The Fund pursues its goal by investing, under normal market conditions, at
least 65% of its assets in equity securities of small capitalization companies
with market capitalizations below $1.5 billion, which is less than the market
capitalization of S&P 500 companies.
The Fund attempts to provide investors with potentially higher returns than a
fund that invests primarily in larger, more established companies. Since
smaller capitalization companies are generally not as well-known to investors
and have less of an investor following than larger companies, they may provide
higher returns due to inefficiencies in the marketplace.
The advisor considers these factors, among others, in choosing companies:
. above-average growth prospects;
. participation in a fast-growing industry;
. strategic niche position in a specialized market; and
. adequate capitalization.
Principal Risks
All investments carry some degree of risk which will affect the value of the
Fund's portfolio investments, its investment performance and the price of its
shares. As a result, you may lose money if you invest in the Fund.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.
The Fund is subject to the following principal investment risks:
. Stock Market Risk. The value of the securities in which the Fund invests may
decline in response to developments affecting individual companies and/or
general economic conditions. Price changes may be temporary or last for
extended periods. For example, stock prices have historically risen and
fallen in periodic cycles. In addition, the value of the Fund's investments
may decline if the particular companies the Fund invests in do not perform
well.
. Small Company Stock Risk. The stocks of small companies may have more risks
than those of larger companies. Small companies often have narrower markets
and more limited managerial and financial resources than larger, more
established companies. As a result, they may be more sensitive to changing
economic conditions, which could increase the volatility of a Fund's
portfolio. In addition, small company stocks typically are traded in lower
volume making them more difficult to sell.
18
<PAGE>
Performance
The bar chart and table below give some indication of the risk of an investment
in the Fund. The bar chart shows the Fund's performance for each calendar year
since inception. The table shows how the Fund's average annual total returns
for different calendar periods over the life of the Fund compare to those of a
broad based securities market index.
When you consider this information, please remember the Fund's performance in
past years is not necessarily an indication of how the Fund will perform in the
future.
The annual returns in the bar chart are Average Annual Total Returns
for the Fund's Class A Shares and do (for the periods ended December 31,
not reflect sales loads. If sales loads 1998)
were reflected, returns would be less
than those shown.
<TABLE>
--------------------------------------
<CAPTION>
Since
1 Year 5 Years Inception*
--------------------------------------
<S> <C> <C> <C>
Class A (12.54)% 13.59% 14.06%
Class B (12.51)% N/A 16.18%
Class C (9.04)% N/A 16.21%
Russell 2000 Index** (2.54)% 11.86% 13.46%***
Since inception of Class B 13.27%***
Since inception of Class C 11.37%***
</TABLE>
--------
* The inception dates for the Class
A, Class B and Class C shares are
11/23/92, 4/28/94 and 9/26/95,
respectively.
** The Russell 2000 Index is a
capitalization weighted total
return index which is comprised
of 2,000 of the smallest
capitalized U.S. domiciled
companies whose stock is traded
in the United States on the New
York Stock Exchange, American
Stock Exchange and the NASDAQ.
*** Index return from 11/30/92 for
Class A shares, 4/30/94 for
Class B shares and 9/30/95 for
Class C shares.
The average annual total returns
reflect imposition of the maximum
front-end or contingent deferred sales
charge and conversion of Class B shares
to Class A shares after the applicable
period.
Small Company Growth Fund Class A
Total Return
(per calendar year)
1993 13.14%
1994 -2.74%
1995 29.64%
1996 36.83%
1997 25.34%
1998 -7.46%
Year-to-date through September 30, 1999: (16.41)%
<TABLE>
<S> <C> <C>
Best Quarter: Q2 1997 23.98 %
Worst Quarter: Q3 1998 (21.07)%
</TABLE>
19
<PAGE>
Framlington Emerging Markets Fund
Goal
The Fund's goal is to provide long-term capital appreciation.
Principal Investment Strategies
The Fund pursues its goal by investing at least 65% of its assets in equity
securities of companies in emerging market countries, as defined by the World
Bank, the International Finance Corporation, the United Nations or the European
Bank for Reconstruction and Development.
The sub-advisor selects companies on a "bottom-up approach." This strategy is
the search for outstanding performance of individual companies before
considering the impact of economic trends. The companies may be identified from
research reports, stock screens or personal knowledge of products and services.
A company will be considered to be in an emerging market country if:
. the company is organized under the laws of, or has a principal office in, an
emerging market country;
. the company's stock is traded primarily in an emerging market country;
. most of the company's assets are in an emerging market country; or
. most of the company's revenues or profits come from goods produced or sold,
investments made or services performed in an emerging market country.
The Fund may also invest in foreign securities of companies located in
countries with mature markets.
Principal Risks
All investments carry some degree of risk which will affect the value of the
Fund's portfolio investments, its investment performance and the price of its
shares. As a result, you may lose money if you invest in the Fund.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.
The Fund is subject to the following principal investment risks:
. Stock Market Risk. The value of the securities in which the Fund invests may
decline in response to developments affecting individual companies and/or
general economic conditions. Price changes may be temporary or last for
extended periods. For example, stock prices have historically risen and
fallen in periodic cycles. In addition, the value of the Fund's investments
may decline if the particular companies the Fund invests in do not perform
well.
. Foreign Securities Risk. Investments by the Fund in foreign securities may
experience greater and more rapid change in value than investments in U.S.
securities. Foreign securities are generally more volatile and less liquid
than U.S. securities, in part because of greater political and economic risks
and because there is less public information available about foreign
companies. Issuers of foreign securities are generally not subject to the
same degree of regulation as are U.S. issuers. The reporting, accounting and
auditing standards of foreign countries may differ, in some cases
significantly, from U.S. standards.
. Currency Risk. A Fund that invests in foreign securities denominated in
foreign currencies may also be subject to currency risk. This is the risk of
loss because a decline in the value of foreign currencies relative to the
U.S. dollar will reduce the value of a Fund's portfolio securities
denominated in those currencies.
. Emerging Markets Risk. A Fund that invests in foreign securities of issuers
in emerging market countries are subject to emerging markets risk. Investing
in emerging market countries heightens the risks presented by investing in
foreign securities and currencies and may result in loss to the Fund.
Numerous emerging countries have recently experienced serious, and
potentially continuing, economic and political problems.
20
<PAGE>
Stock markets in many emerging countries are relatively small and risky.
Foreigners are often limited in their ability to invest in, and withdraw
assets from, these markets. Additional restrictions may be imposed under
emergency conditions.
. Medium-Size Company Stock Risk. The stocks of medium-size companies may be
more susceptible to market downturns, and their prices may be more volatile
than those of larger companies.
21
<PAGE>
Performance
The bar chart and table below give some indication of the risk of an investment
in the Fund. The bar chart shows the Fund's performance for each calendar year
since inception. The table shows how the Fund's average annual total returns
for different calendar periods over the life of the Fund compare to those of a
broad based securities market index.
When you consider this information, please remember the Fund's performance in
past years is not necessarily an indication of how the Fund will perform in the
future.
Average Annual Total Returns
The annual returns in the bar chart are (for the periods ended December
for the Fund's Class A Shares and do 31, 1998)
not reflect sales loads. If sales loads
were reflected, returns would be less
than those shown.
<TABLE>
-----------------------------------
<CAPTION>
Since
1 Year Inception*
-----------------------------------
<S> <C> <C>
Class A (31.48)% (13.05)%
Class B (31.75)% (17.71)%
Class C (28.78)% (15.31)%
MSCI Emerging Markets Index** 22.17 % (21.78)%**
Since inception of Class B (24.75)%***
Since inception of Class C 11.39 %***
</TABLE>
--------
* The inception dates for Class A,
Class B and Class C shares are
1/14/97, 2/25/97 and 3/3/97,
respectively.
**Morgan Stanley (MSCI) Emerging
Market Index is an unmanaged
index used to portray the pattern
of common stock price movement in
Europe, Australia, New Zealand
and other countries in the Far
East.
***Index return from 12/31/96 for
Class A shares, 2/28/97 for Class
B shares and Class C shares.
The average annual total returns
reflect imposition of the maximum
front-end or contingent deferred
sales charge and conversion of
Class B shares to Class A shares
after the applicable period.
Framlington Emerging Markets Fund
Class A
Total Return
(per calendar year)
1998 -27.48%
Year-to-date through September 30, 1999: 31.27%
<TABLE>
<S> <C> <C>
Best Quarter: Q4 1998 12.64%
Worst Quarter: Q3 1998 (21.69)%
</TABLE>
22
<PAGE>
Framlington Healthcare Fund
Goal
The Fund's goal is to provide long-term capital appreciation.
Principal Investment Strategies
The Fund pursues its goal by investing in equity securities of companies
providing healthcare and medical services and products worldwide. Currently,
most of these companies are located in the United States.
The Fund will invest in:
. pharmaceutical producers;
. biotechnology firms;
. medical device and instrument manufacturers;
. distributors of healthcare products;
. healthcare providers and managers; and
. other healthcare service companies.
Under normal market conditions, the Fund will invest at least 65% of its assets
in healthcare companies, which are companies for which at least 50% of sales,
earnings or assets arise from or are dedicated to health services or medical
technology activities.
The sub-advisor selects companies on a "bottom-up approach." This strategy is
the search for outstanding performance of individual companies before
considering the impact of economic trends. The sub-advisor evaluates companies,
analyzing a number of factors, including the growth prospects of a healthcare
company relative to the price of its stock and companies that are at the
leading edge of new developments in the healthcare industry.
The Fund's investments may include foreign securities of companies located in
countries with mature markets.
Principal Risks
All investments carry some degree of risk which will affect the value of the
Fund's portfolio investments, its investment performance and the price of its
shares. As a result, you may lose money if you invest in the Fund.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.
The Fund is subject to the following principal investment risks:
. Stock Market Risk. The value of the securities in which the Fund invests may
decline in response to developments affecting individual companies and/or
general economic conditions. Price changes may be temporary or last for
extended periods. For example, stock prices have historically risen and
fallen in periodic cycles. In addition, the value of the Fund's investments
may decline if the particular companies the Fund invests in do not perform
well.
. Sector Risk. The Fund will concentrate its investments in the healthcare
industry. Adverse economic, business or political developments affecting that
industry sector could have a major effect on the value of the Fund's
investments.
. Medium-Size Company Stock Risk. The stocks of medium-size companies may be
more susceptible to market downturns, and their prices may be more volatile
than those of larger companies.
. Foreign Securities Risk. Investments by the Fund in foreign securities may
experience greater and more rapid change in value than investments in U.S.
securities. Foreign securities are generally more volatile and less liquid
than U.S. securities, in part because of greater political and economic risks
and because there is less public information available about foreign
companies. Issuers of foreign securities are generally not subject to the
same degree of regulation as are U.S. issuers. The reporting, accounting and
auditing standards of foreign countries may differ, in some cases
significantly, from U.S. standards.
23
<PAGE>
. Currency Risk. A Fund that invests in foreign securities denominated in
foreign currencies may also be subject to currency risk. This is the risk of
loss because a decline in the value of foreign currencies relative to the
U.S. dollar will reduce the value of a Fund's portfolio securities
denominated in those currencies.
24
<PAGE>
Performance
The bar chart and table below give some indication of the risk of an investment
in the Fund. The bar chart shows the Fund's performance for each calendar year
since inception. The table shows how the Fund's average annual total returns
for different calendar periods over the life of the Fund compare to those of a
broad based securities market index.
When you consider this information, please remember the Fund's performance in
past years is not necessarily an indication of how the Fund will perform in the
future.
Average Annual Total Returns
The annual returns in the bar chart are (for the periods ended December
for the Fund's Class C Shares and do 31, 1998)
not reflect sales loads. If sales loads
were reflected, returns would be less
than those shown.
<TABLE>
------------------
<CAPTION>
Since
1 Year Inception*
------------------
<S> <C> <C>
Class A (4.49)% (0.91)%
Class B (4.65)% 0.60%
Class C (0.67)% 5.65%
S&P Healthcare
Composite** 44.22% 38.56%***
Since inception of
Class B 38.56%***
Since inception of
Class C 38.56%***
</TABLE>
--------
*The inception dates for Class A,
Class B and Class C shares are
2/14/97, 1/31/97 and 1/13/97,
respectively.
**The S&P Healthcare Composite is a
capitalization-weighted index of
all of the stocks in the S&P 500
that are involved in the business
of health care related products
or services.
***Index return from 1/31/97 for
Class A, Class B and Class C
shares.
The average annual total returns
reflect imposition of the maximum
front-end or contingent deferred
sales charge and conversion of
Class B shares to Class A shares
after the applicable period.
Framlington Healthcare Fund Class C
Total Return
(per calendar year)
1998 0.32%
Year-to-date through September 30, 1999: (4.09)%
<TABLE>
<S> <C> <C>
Best Quarter: Q4 1998 19.82%
Worst Quarter: Q3 1998 (17.35)%
</TABLE>
25
<PAGE>
Framlington International Growth Fund
Goal
The Fund's goal is to provide long-term capital appreciation.
Principal Investment Strategies
The Fund pursues its goal by investing at least 65% of its assets in equity
securities of issuers located in at least three foreign countries.
The sub-advisor will choose companies that demonstrate:
. above-average profitability;
. high quality management; and
. the ability to grow significantly in their countries.
The sub-advisor selects companies on a "bottom-up approach." This strategy is
the search for outstanding performance of individual companies before
considering the impact of economic trends. The sub-advisor generally selects
stocks of companies that the sub-advisor believes can grow their earnings
faster than the market.
The Fund may invest in companies located in countries with mature markets and
in those with emerging markets.
Principal Risks
All investments carry some degree of risk which will affect the value of the
Fund's portfolio investments, its investment performance and the price of its
shares. As a result, you may lose money if you invest in the Fund.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.
The Fund is subject to the following principal investment risks:
. Stock Market Risk. The value of the securities in which the Fund invests may
decline in response to developments affecting individual companies and/or
general economic conditions. Price changes may be temporary or last for
extended periods. For example, stock prices have historically risen and
fallen in periodic cycles. In addition, the value of the Fund's investments
may decline if the particular companies the Fund invests in do not perform
well.
. Medium-Size Company Stock Risk. The stocks of medium-size companies may be
more susceptible to market downturns, and their prices may be more volatile
than those of larger companies.
. Foreign Securities Risk. Investments by the Fund in foreign securities may
experience greater and more rapid change in value than investments in U.S.
securities. Foreign securities are generally more volatile and less liquid
than U.S. securities, in part because of greater political and economic risks
and because there is less public information available about foreign
companies. Issuers of foreign securities are generally not subject to the
same degree of regulation as are U.S. issuers. The reporting, accounting and
auditing standards of foreign countries may differ, in some cases
significantly, from U.S. standards.
. Currency Risk. A Fund that invests in foreign securities denominated in
foreign currencies may also be subject to currency risk. This is the risk of
loss because a decline in the value of foreign currencies relative to the
U.S. dollar will reduce the value of a Fund's portfolio securities
denominated in those currencies.
. Emerging Markets Risk. A Fund that invests in foreign securities of issuers
in emerging market countries are subject to emerging markets risk. Investing
in emerging market countries heightens the risks presented by investing in
foreign securities and currencies and may result in loss to the Fund.
Numerous emerging countries have recently experienced serious, and
potentially continuing, economic and political problems. Stock markets in
many emerging countries are relatively small and risky. Foreigners are often
limited in their ability to invest in, and withdraw assets from, these
markets. Additional restrictions may be imposed under emergency conditions.
26
<PAGE>
Performance
The bar chart and table below give some indication of the risk of an investment
in the Fund. The bar chart shows the Fund's performance for each calendar year
since inception. The table shows how the Fund's average annual total returns
for different calendar periods over the life of the Fund compare to those of a
broad based securities market index.
When you consider this information, please remember the Fund's performance in
past years is not necessarily an indication of how the Fund will perform in the
future.
The annual returns in the bar chart are Average Annual Total Returns
for the Fund's Class C Shares and do (for the periods ended December 31,
not reflect sales loads. If sales loads 1998)
were reflected, returns would be less
than those shown.
<TABLE>
------------------------------
<CAPTION>
Since
1 Year Inception*
------------------------------
<S> <C> <C>
Class A 9.00% 5.30%
Class B 9.51% 7.57%
Class C 13.48% 8.22%
MSCI EAFE Index** 20.33% 13.02%***
Since inception of
Class B 13.43%***
Since inception of Class C 13.02%***
</TABLE>
--------
* The inception dates for the
Class A, Class B and Class C
shares are 2/20/97, 3/19/97 and
2/13/97, respectively.
** Morgan Stanley (MSCI) EAFE
Index is an unmanaged index
used to portray the pattern of
common stock price movement in
Europe, Australia, New Zealand
and countries in the Far East.
*** Index return from 2/28/97 for
Class A shares, 3/31/97 for
Class B shares and 1/31/97 for
Class C shares.
The average annual total returns
reflect imposition of the maximum
front-end or contingent deferred
sales charge and conversion of
Class B shares to Class A shares
after the applicable period.
Framlington International Growth Fund
Class C
Total Return
Class C
1998 14.48%
Year-to-date through September 30, 1999: 14.66%
<TABLE>
<S> <C> <C>
Best Quarter: Q4 1998 18.94%
Worst Quarter: Q3 1998 (17.79)%
</TABLE>
27
<PAGE>
Who May Want To Invest
The Funds may be appropriate for investors:
. Looking to invest over the long term.
. Able to tolerate market swings.
28
<PAGE>
Fees And Expenses
The tables below describe the fees and expenses that you may pay if you buy and
hold shares the Funds. Please note that the following information does not
include fees that institutions may charge for services they provide to you.
<TABLE>
<CAPTION>
Class A Class B Class C
Shareholder Fees (fees paid directly from your Shares Shares Shares
investment) ------- ------- -------
<S> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases (as a
% of offering price).................................. 5.5%(a) None None
Maximum Deferred Sales Charge (Load) (as a % of the
lesser of original purchase price or redemption pro-
ceeds)................................................ None(b) 5%(c) 1%(d)
Sales Charge (Load) Imposed on Reinvested Dividends.... None None None
Redemption Fees........................................ None None None
Exchange Fees.......................................... None None None
</TABLE>
Annual Fund Operating Expenses (expenses that are paid from Fund assets) And
Examples
The examples are intended to help you compare the cost of investing in each
Fund to the cost of investing in other mutual funds. The examples assume that
you invest $10,000 in the Fund for the time periods indicated. The examples
also assume that your investment has a 5% return each year, that the Fund's
operating expenses remain the same as shown in the table and that all dividends
and distributions are reinvested. Your actual costs may be higher or lower.
<TABLE>
<CAPTION>
Annual Fund Operating Expenses
as a % of net assets
------------------------------
Class A Class B Class C
Shares Shares Shares
------- ------- -------
<S> <C> <C> <C>
Balanced Fund
Management Fees........ .65% .65% .65%
Distribution and/or
Service (12b-1) Fees.. .25% 1.00% 1.00%
Other Expenses......... .32% .32% .32%
----- ----- -----
Total Annual Fund
Operating Expenses.... 1.22% 1.97% 1.97%
===== ===== =====
<CAPTION>
Class A Class B Class C
Shares Shares Shares
------- ------- -------
<S> <C> <C> <C>
Equity Income Fund
Management Fees........ .75% .75% .75%
Distribution and/or
Service (12b-1) Fees.. .25% 1.00% 1.00%
Other Expenses......... .21% .21% .21%
----- ----- -----
Total Annual Fund
Operating Expenses.... 1.21% 1.96% 1.96%
===== ===== =====
<CAPTION>
Class A Class B Class C
Shares Shares Shares
------- ------- -------
<S> <C> <C> <C>
International Equity Fund
Management Fees........ .75% .75% .75%
Distribution and/or
Service (12b-1) Fees.. .25% 1.00% 1.00%
Other Expenses......... .29% .29% .29%
----- ----- -----
Total Annual Fund
Operating Expenses.... 1.29% 2.04% 2.04%
===== ===== =====
</TABLE>
<TABLE>
<CAPTION>
Examples
--------
Class A Class B Class B Class C Class C
Shares Shares* Shares** Shares* Shares**
------- ------- -------- ------- --------
<S> <C> <C> <C> <C> <C>
1 Year......... $ 668 $ 716 $ 201 $ 304 $ 201
3 Years........ $ 917 $ 948 $ 620 $ 620 $ 620
5 Years........ $1,186 $1,298 $1,066 $1,066 $1,066
10 Years........ $1,952 $1,930*** $1,930*** $2,304 $2,304
<CAPTION>
Class A Class B Class B Class C Class C
Shares Shares* Shares** Shares* Shares**
------- ------- -------- ------- --------
<S> <C> <C> <C> <C> <C>
1 Year......... $ 668 $ 715 $ 200 $ 303 $ 200
3 Years........ $ 915 $ 945 $ 617 $ 617 $ 617
5 Years........ $1,181 $1,293 $1,060 $1,060 $1,060
10 Years........ $1,941 $1,919*** $1,919*** $2,293 $2,293
<CAPTION>
Class A Class B Class B Class C Class C
Shares Shares* Shares** Shares* Shares**
------- ------- -------- ------- --------
<S> <C> <C> <C> <C> <C>
1 Year.......... $ 675 $ 722 $ 208 $ 311 $ 208
3 Years......... $ 938 $ 969 $ 641 $ 641 $ 641
5 Years......... $1,221 $1,333 $1,101 $1,101 $1,101
10 Years........ $2,027 $2,006*** $2,006*** $2,377 $2,377
</TABLE>
29
<PAGE>
<TABLE>
<CAPTION>
Annual Fund Operating Expenses
as a % of net assets
------------------------------
Class A Class B Class C
Shares Shares Shares
------- ------- -------
<S> <C> <C> <C>
Micro-Cap Equity Fund
Management Fees........ 1.00% 1.00% 1.00%
Distribution and/or
Service (12b-1) Fees.. .25% 1.00% 1.00%
Other Expenses......... .39% .39% .39%
----- ----- -----
Total Annual Fund
Operating Expenses.... 1.64% 2.39% 2.39%
===== ===== =====
<CAPTION>
Class A Class B Class C
Shares Shares Shares
------- ------- -------
<S> <C> <C> <C>
Multi-Season Growth Fund
Management Fees(1)..... .92% .92% .92%
Distribution and/or
Service (12b-1) Fees.. .25% 1.00% 1.00%
Other Expenses......... .23% .23% .23%
----- ----- -----
Total Annual Fund
Operating Expenses(1). 1.40% 2.15% 2.15%
===== ===== =====
<CAPTION>
Class A Class B Class C
Shares Shares Shares
------- ------- -------
<S> <C> <C> <C>
Real Estate Equity Investment Fund
Management Fees........ .74% .74% .74%
Distribution and/or
Service (12b-1) Fees.. .25% 1.00% 1.00%
Other Expenses(2)...... .29% .29% .29%
----- ----- -----
Total Annual Fund
Operating Expenses.... 1.28% 2.03% 2.03%
===== ===== =====
<CAPTION>
Class A Class B Class C
Shares Shares Shares
------- ------- -------
<S> <C> <C> <C>
Small-Cap Value Fund
Management Fees........ .75% .75% .75%
Distribution and/or
Service (12b-1) Fees.. .25% 1.00% 1.00%
Other Expenses(2)...... .25% .25% .25%
----- ----- -----
Total Annual Fund
Operating Expenses.... 1.25% 2.00% 2.00%
===== ===== =====
<CAPTION>
Class A Class B Class C
Shares Shares Shares
------- ------- -------
<S> <C> <C> <C>
Small Company Growth Fund
Management Fees........ .75% .75% .75%
Distribution and/or
Service (12b-1) Fees.. .25% 1.00% 1.00%
Other Expenses......... .22% .22% .22%
----- ----- -----
Total Annual Fund
Operating Expenses.... 1.22% 1.97% 1.97%
===== ===== =====
</TABLE>
<TABLE>
<CAPTION>
Examples
--------
Class A Class B Class B Class C Class C
Shares Shares* Shares** Shares* Shares**
------- ------- -------- ------- --------
<S> <C> <C> <C> <C> <C>
1 Year.......... $ 709 $ 756 $ 242 $ 345 $ 242
3 Years......... $1,041 $1,072 $ 748 $ 748 $ 748
5 Years......... $1,396 $1,507 $1,280 $1,280 $1,280
10 Years........ $2,394 $2,377*** $2,377*** $2,736 $2,736
<CAPTION>
Class A Class B Class B Class C Class C
Shares Shares* Shares** Shares* Shares**
------- ------- -------- ------- --------
<S> <C> <C> <C> <C> <C>
1 Year.......... $ 686 $ 733 $ 219 $ 322 $ 219
3 Years......... $ 971 $1,002 $ 675 $ 675 $ 675
5 Years......... $1,276 $1,388 $1,158 $1,158 $1,158
10 Years........ $2,144 $2,124*** $2,124*** $2,491 $2,491
<CAPTION>
Class A Class B Class B Class C Class C
Shares Shares* Shares** Shares* Shares**
------- ------- -------- ------- --------
<S> <C> <C> <C> <C> <C>
1 Year.......... $ 674 $ 721 $ 206 $ 309 $ 206
3 Years......... $ 934 $ 965 $ 637 $ 637 $ 637
5 Years......... $1,215 $1,327 $1,095 $1,095 $1,095
10 Years........ $2,016 $1,994*** $1,994*** $2,365 $2,365
<CAPTION>
Class A Class B Class B Class C Class C
Shares Shares* Shares** Shares* Shares**
------- ------- -------- ------- --------
<S> <C> <C> <C> <C> <C>
1 Year.......... $ 671 $ 719 $ 204 $ 307 $ 204
3 Years......... $ 926 $ 957 $ 629 $ 629 $ 629
5 Years......... $1,201 $1,313 $1,081 $1,081 $1,081
10 Years........ $1,984 $1,963*** $1,963*** $2,335 $2,335
<CAPTION>
Class A Class B Class B Class C Class C
Shares Shares* Shares** Shares* Shares**
------- ------- -------- ------- --------
<S> <C> <C> <C> <C> <C>
1 Year.......... $ 668 $ 716 $ 201 $ 304 $ 201
3 Years......... $ 917 $ 948 $ 620 $ 620 $ 620
5 Years......... $1,186 $1,298 $1,066 $1,066 $1,066
10 Years........ $1,952 $1,930*** $1,930*** $2,304 $2,304
</TABLE>
30
<PAGE>
<TABLE>
<CAPTION>
Annual Fund Operating Expenses
as a % of net assets
------------------------------
Class A Class B Class C
Shares Shares Shares
------- ------- -------
<S> <C> <C> <C>
Framlington Emerging Markets Fund
Management Fees........ 1.25% 1.25% 1.25%
Distribution and/or
Service (12b-1) Fees.. .25% 1.00% 1.00%
Other Expenses(3)...... .62% .62% .62%
----- ----- -----
Total Annual Fund
Operating Expenses(3). 2.12% 2.87% 2.87%
===== ===== =====
</TABLE>
<TABLE>
<CAPTION>
Class A Class B Class C
Shares Shares Shares
------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Framlington Healthcare Fund
Management Fees. 1.00% 1.00% 1.00%
Distribution
and/or Service
(12b-1) Fees... .25% 1.00% 1.00%
Other
Expenses(3).... .67% .67% .67%
----- ----- -----
Total Annual
Fund Operating
Expenses(3).... 1.92% 2.67% 2.67%
===== ===== =====
<CAPTION>
Class A Class B Class C
Shares Shares Shares
------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Framlington
International Growth
Fund
Management Fees. 1.00% 1.00% 1.00%
Distribution
and/or Service
(12b-1) Fees... .25% 1.00% 1.00%
Other
Expenses(3).... .51% .51% .51%
----- ----- -----
Total Annual
Fund Operating
Expenses(3).... 1.76% 2.51% 2.51%
===== ===== =====
</TABLE>
<TABLE>
<CAPTION>
Class A Class B Class B Class C Class C
Shares Shares* Shares** Shares* Shares**
------- ------- -------- ------- --------
<S> <C> <C> <C> <C> <C>
1 Year.......... $ 736 $ 783 $ 271 $ 373 $ 271
3 Years......... $1,123 $1,154 $ 832 $ 832 $ 832
5 Years......... $1,534 $1,644 $1,420 $1,420 $1,420
10 Years........ $2,678 $2,664*** $2,664*** $3,013 $3,013
<CAPTION>
Class A Class B Class B Class C Class C
Shares Shares* Shares** Shares* Shares**
------- ------- -------- ------- --------
<S> <C> <C> <C> <C> <C>
1 Year......... $ 721 $ 767 $ 255 $ 357 $ 255
3 Years........ $1,076 $1,107 $ 784 $ 784 $ 784
5 Years........ $1,455 $1,566 $1,340 $1,340 $1,340
10 Years........ $2,517 $2,501*** $2,501*** $2,856 $2,856
</TABLE>
<TABLE>
<CAPTION>
Examples
--------
Class A Class B Class B Class C Class C
Shares Shares* Shares** Shares* Shares**
------- ------- -------- ------- --------
<S> <C> <C> <C> <C> <C>
1 Year.......... $ 755 $ 802 $ 291 $ 393 $ 291
3 Years......... $1,181 $1,212 $ 892 $ 892 $ 892
5 Years......... $1,631 $1,741 $1,519 $1,519 $1,519
10 Years........ $2,876 $2,864*** $2,864*** $3,206 $3,206
</TABLE>
-------
(a) The sales charge declines as the amount invested increases.
(b) A contingent deferred sales charge (CDSC) is a one-time fee charged at the
time of redemption. A 1% CDSC applies to redemptions of Class A shares
within one year of investment that were purchased with no initial sales
charge as part of an investment of $1,000,000 or more.
(c) The CDSC payable upon redemption of Class B shares declines over time.
(d) The CDSC applies to redemptions of Class C shares within one year of
purchase.
(1) The advisor has voluntarily agreed to waive a portion of its management
fees for the Multi-Season Growth Fund for the current fiscal year. As a
result of the fee waiver, actual management fees and total annual fund
operating expenses for the Fund are expected to be .75% for Class A, Class
B and Class C shares and 1.23%, 1.98%, 1.98%, respectively, for Class A,
Class B and Class C shares.
(2) The expenses for the Real Estate Equity Investment Fund and the Small-Cap
Value Fund have been restated for the current fiscal year to reflect an
increase in general operating expenses for the Funds.
(3) The advisor has voluntarily agreed to reimburse the Framlington Emerging
Markets Fund, the Framlington Healthcare Fund and the Framlington
International Growth Fund for certain operating expenses for the current
fiscal year. As a result of the expense reimbursement, other expenses and
total annual fund operating expenses for the Funds for the current fiscal
year, which have been restated to reflect an increase in general operating
expenses of the Funds, are expected to be: .50%, 2.00%-Class A, 2.75%-Class
B and 2.75%-Class C, respectively, for Framlington Emerging Markets Fund,
.50%, 1.75%-Class A, 2.50%-Class B, 2.50%-Class C, respectively, for
Framlington Healthcare Fund and .50%, 1.75%-Class A, 2.50%-Class B and
2.50%-Class C, respectively, for Framlington International Growth Fund. The
advisor may terminate the expense reimbursements at any time.
* Assumes you sold your shares at the end of the time period.
** Assumes you stayed in the Fund.
*** Reflects conversion of Class B shares to Class A shares (which pay lower
ongoing expenses) approximately six years after the date of original
purchase.
31
<PAGE>
More About The Funds
--------------------------------------------------------------------------------
This section further describes that the Funds' principal investment strategies
and risks that are summarized above in the section entitled Risk/Return
Summary. The Funds may also invest in other securities and are subject to
further restrictions and risks which are described in the Statement of
Additional Information. The Glossary below explains certain terms used
throughout this prospectus.
Glossary
Types Of Funds
Equity Funds are the Balanced Fund, Equity Income Fund, International Equity
Fund, Micro-Cap Equity Fund, Multi-Season Growth Fund, Real Estate Equity
Investment Fund, Small-Cap Value Fund, Small Company Growth Fund, Framlington
Emerging Markets Fund, Framlington HealthCare Fund and Framlington
International Growth Fund.
Types Of Securities
Equity securities include common stocks, preferred stocks, securities
convertible into common stocks, and rights and warrants to subscribe for the
purchase of common stocks. Equity securities may be listed on a stock exchange
or NASDAQ National Market System or unlisted. Warrants are rights to purchase
securities at a specified time at a specified price.
Fixed income securities are securities that pay interest at set times at either
fixed, floating or variable rates, or which are issued at a discount to their
principal amount instead of making periodic interest payments. Fixed income
securities include corporate bonds, debentures and other similar corporate debt
instruments, zero coupon bonds and variable amount master demand notes.
Convertible securities are bonds or preferred stocks that may be converted
(exchanged) into the common stock of the issuing company within a specified
time period for a specified number of shares. Convertible securities offer the
Funds a way 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.
U.S. Government Securities are securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities. These securities include U.S.
Treasury bills, U.S. Treasury notes, U.S. Treasury bonds and obligations of the
Federal Home Loan Corporation, Federal National Mortgage Association and
Government National Mortgage Association.
Money market instruments are high-quality, short-term instruments including
commercial paper, bankers' acceptance and negotiable certificates of deposit of
banks or savings and loan associations, short-term corporate obligations and
short-term U.S. Government securities.
Rating Agencies and Indices
Moody's is Moody's Investor Services, Inc.
Duff & Phelps is Duff & Phelps Credit Rating Co.
Fitch is Fitch IBCA, Inc.
S&P is Standard & Poor's Rating Services.
S&P 500 is S&P's 500 Composite Stock Price Index, a widely recognized unmanaged
index of stock market activity.
Other
1940 Act is the Investment Company Act of 1940, as amended.
Internal Revenue Code is the Internal Revenue Code of 1986, as amended.
NAV is the net asset value per share of a Fund. NAV is the value of a single
share of a Fund. Each Fund calculates NAV separately for each class. NAV is
calculated by (1) taking the current value of a Fund's total assets allocated
to a particular class of shares, (2) subtracting the liabilities and expenses
charged to that class (3) dividing that amount by the total number of shares of
that class outstanding.
32
<PAGE>
A diversified investment company is an investment company that may not invest
more than 5% of its total assets in any one issuer other than the U.S.
Government, its agencies or instrumentalities. This limit applies only to 75%
of a diversified Fund's assets. In addition, a diversified Fund cannot invest
more than 25% of its assets in a single issuer.
Principal Investment Strategies and Risks
Foreign Investment Risk. Foreign securities include direct investments in non-
U.S. dollar-denominated securities traded outside of the United States and
dollar-denominated securities of foreign issuers traded in the United States.
Foreign securities also include indirect investments such as American
Depository Receipts ("ADRs"), European Depository Receipts ("EDRs") and Global
Depository Receipts ("GDRs"). ADRs are U.S. dollar-denominated receipts
representing shares of foreign-based corporations. ADRs are issued by U.S.
banks or trust companies, and entitle the holder to all dividends and capital
gains that are paid out on the underlying foreign shares. EDRs and GDRs are
receipts issued by non-U.S. financial institutions that often trade on foreign
exchanges. They represent ownership in an underlying foreign or U.S. security
and are generally denominated in a foreign currency.
Investment Strategy. International Equity Fund, Framlington Healthcare Fund
and Framlington International Growth Fund will invest all or a substantial
portion of their total assets in foreign securities.
Special Risks. Foreign securities involve special risks and costs.
Investment in the securities of foreign governments involves the risk that
foreign governments may default on their obligations or may otherwise not
respect the integrity of their debt.
Investment in foreign securities may involve higher costs than investment
in U.S. securities, including higher transaction and custody costs
as well as the imposition of additional taxes by foreign governments.
Foreign investments may also involve risks associated with the level of
currency exchange rates, less complete financial information about the
issuers, less market liquidity, more market volatility and political
instability. Future political and economic developments, the possible
imposition of withholding taxes on dividend income, the possible seizure or
nationalization of foreign holdings, the possible establishment of exchange
controls or freezes on the convertibility of currency, or the adoption of
other governmental restrictions might adversely affect an investment in
foreign securities. Additionally, foreign issuers may be subject to less
stringent regulation, and to different accounting, auditing and
recordkeeping requirements.
Currency exchange rates may fluctuate significantly over short periods of
time causing a Fund's net asset value to fluctuate as well. A decline in
the value of a foreign currency relative to the U.S. dollar will reduce the
value of a foreign currency-denominated security. To the extent that a Fund
is invested in foreign securities while also maintaining currency
positions, it may be exposed to greater combined risk. The Funds'
respective net currency positions may expose them to risks independent of
their securities positions.
Additional risks are involved when investing in countries with emerging
economies or securities markets. In general, the securities markets of
these countries are less liquid, are subject to greater price volatility,
have smaller market capitalizations and have problems with securities
registration and custody. In addition, because the securities settlement
procedures are less developed in these countries, a Fund may be required to
deliver securities before receiving payment and may also be unable to
complete transactions during market disruptions. As a result of these and
other risks, investments in these countries generally present a greater
risk of loss to the Fund.
A further risk of investing in foreign securities is the risk that a Fund
may be adversely affected by the conversion of certain European currencies
into the Euro. This conversion, which is under way, is scheduled to be
completed in the year 2002. However, problems with the conversion process
and delays could increase volatility in world markets and affect European
markets in particular.
33
<PAGE>
Investments in the Healthcare Industry by Framlington Healthcare Fund. The Fund
will invest most of its assets in the healthcare industry, which is
particularly affected by rapidly changing technology and extensive government
regulation, including cost containment measures. The Fund may be riskier than a
fund investing in a broader range of industries.
Investments in the Real Estate Industry by Real Estate Equity Investment
Fund. The Fund will invest primarily in the real estate industry and may invest
more than 25% of its assets in any one sector of the real estate industry. As a
result, the Fund will be particularly vulnerable to declines in real estate
prices and new construction rates. The Fund may be riskier than a fund
investing in a broader range of industries.
Short-Term Trading. The Funds' historical portfolio turnover rates are shown in
the Financial Highlights.
Investment Strategy. Each Fund may engage in short-term trading, including,
initial public offerings.
Special Risks. A high rate of portfolio turnover (100% or more) could
produce higher trading costs and taxable distributions, which could detract
from a Fund's performance.
Defensive Investing. Each Fund may invest all or any portion of its assets in
short-term obligations as a temporary defensive measure in response to adverse
market or economic conditions.
Special Risks. A Fund may not achieve its investment objective when its
assets are invested in short-term obligations.
Other Investment Strategies and Risks
Borrowing and Reverse Repurchase Agreements. The Funds can borrow money from
banks and enter into reverse repurchase agreements with banks and other
financial institutions. Reverse repurchase agreements involve the sale of
securities held by a Fund subject to the Fund's agreement to repurchase them at
a mutually agreed upon date and price (including interest).
Investment Strategy. Each Fund may borrow money in an amount up to 5% of
its assets for temporary emergency purposes and in an amount up to 33 1/3%
of its assets to meet redemptions. This is a fundamental policy which can
be changed only by shareholders.
Special Risks. Borrowings and reverse repurchase agreements by a Fund may
involve leveraging. If the securities held by the Fund decline in value
while these transactions are outstanding, the Fund's net asset value will
decline in value by proportionately more than the decline in value of the
securities. In addition, reverse repurchase agreements involve the risks
that the interest income earned by the Fund (from the investment of the
proceeds) will be less than the interest expense of the transaction, that
the market value of the securities sold by the Fund will decline below the
price the Fund is obligated to pay to repurchase the securities, and that
the securities may not be returned to the Fund.
Derivative Risk. "Derivative" instruments are financial contracts whose value
is based on an underlying security, a currency exchange rate, an interest rate
or a market index. Many types of instruments representing a wide range of
potential risks and rewards are derivatives, including futures contracts,
options on futures contracts, options, swaps, forward currency contracts and
structured debt obligations (including collateralized mortgage obligations and
other types of asset-backed securities, "stripped" securities and various
floating rate instruments).
34
<PAGE>
Investment Strategy. Derivatives can be used for hedging (attempting to
reduce risk by offsetting one investment position with another) or
speculation (taking a position in the hope of increasing return). The Funds
may, but are not required to, use derivatives for hedging purposes or for
the purpose of remaining fully invested or maintaining liquidity. The Funds
will not use derivatives for speculative purposes.
Special Risks. The use of derivative instruments exposes a Fund to
additional risks and transaction costs. Risks of derivative instruments
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 skills needed to use these
strategies are different than those needed to select portfolio securities;
(4) 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; (5) the risk that adverse price movements in an instrument can
result in a loss substantially greater than the Fund's initial investment
in that instrument (in some cases, the potential loss is unlimited); (6)
particularly in the case of privately-negotiated instruments, the risk that
the counterparty will not perform its obligations, which could leave the
Fund worse off than if it had not entered into the position; and (7) the
inability to close out certain hedged positions to avoid adverse tax
consequences.
Foreign Investment Risk. Foreign securities include direct investments in non-
U.S. dollar-denominated securities traded outside of the United States and
dollar-denominated securities of foreign issuers traded in the United States.
Foreign securities also include indirect investments such as American
Depository Receipts ("ADRs"), European Depository Receipts ("EDRs") and Global
Depository Receipts ("GDRs"). ADRs are U.S. dollar-denominated receipts
representing shares of foreign-based corporations. ADRs are issued by U.S.
banks or trust companies, and entitle the holder to all dividends and capital
gains that are paid out on the underlying foreign shares. EDRs and GDRs are
receipts issued by non-U.S. financial institutions that often trade on foreign
exchanges. They represent ownership in an underlying foreign or U.S. security
and are generally denominated in a foreign currency.
Investment Strategy. The other Equity Funds (except Real Estate Investment
Fund), may invest up to 25% of their total assets in foreign securities.
Special Risks. Foreign securities involve special risks and costs.
Investment in the securities of foreign governments involves the risk that
foreign governments may default on their obligations or may otherwise not
respect the integrity of their debt.
Investment in foreign securities may involve higher costs than investment
in U.S. securities, including higher transaction and custody costs as well
as the imposition of additional taxes by foreign governments. Foreign
investments may also involve risks associated with the level of currency
exchange rates, less complete financial information about the issuers, less
market liquidity, more market volatility and political instability. Future
political and economic developments, the possible imposition of withholding
taxes on dividend income, the possible seizure or nationalization of
foreign holdings, the possible establishment of exchange controls or
freezes on the convertibility of currency, or the adoption of other
governmental restrictions might adversely affect an investment in foreign
securities. Additionally, foreign issuers may be subject to less stringent
regulation, and to different accounting, auditing and recordkeeping
requirements.
Currency exchange rates may fluctuate significantly over short periods of
time causing a Fund's net asset value to fluctuate as well. A decline in
the value of a foreign currency relative to the U.S. dollar will reduce the
value of a foreign currency-denominated security. To
35
<PAGE>
the extent that a Fund is invested in foreign securities while also
maintaining currency positions, it may be exposed to greater combined risk.
The Funds' respective net currency positions may expose them to risks
independent of their securities positions.
Additional risks are involved when investing in countries with emerging
economies or securities markets. In general, the securities markets of
these countries are less liquid, are subject to greater price volatility,
have smaller market capitalizations and have problems with securities
registration and custody. In addition, because the securities settlement
procedures are less developed in these countries, a Fund may be required to
deliver securities before receiving payment and may also be unable to
complete transactions during market disruptions. As a result of these and
other risks, investments in these countries generally present a greater
risk of loss to the Fund.
A further risk of investing in foreign securities is the risk that a Fund
may be adversely affected by the conversion of certain European currencies
into the Euro. This conversion, which is under way, is scheduled to be
completed in the year 2002. However, problems with the conversion process
and delays could increase volatility in world markets and affect European
markets in particular.
Forward Currency Exchange Contracts. A forward currency exchange contract is an
obligation to exchange one currency for another on a future date at a specified
exchange rate.
Investment Strategy. Forward currency exchange contracts may be used for
hedging purposes and to help reduce the risks and volatility caused by
changes in foreign currency exchange rates. Foreign currency exchange
contracts will be used at the discretion of the advisor or sub-advisor, and
no Fund is required to hedge its foreign currency positions.
Special Risks. Forward currency contracts are privately negotiated
transactions, and can have substantial price volatility. When used for
hedging purposes, they tend to limit any potential gain that may be
realized if the value of a Fund's foreign holdings increases because of
currency fluctuations.
Futures Contracts and Related Options. A futures contract is a type of
derivative instrument that obligates the holder to buy or sell an asset in the
future at an agreed upon price. 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 during the option period. When a
Fund sells an option on a futures contract, it becomes obligated to purchase or
sell a futures contract if the option is exercised.
Investment Strategy. Each Fund may invest in futures contracts and options
on futures contracts on domestic or foreign exchanges or boards of trade.
These instruments may be used for hedging purposes, to maintain liquidity
to meet potential shareholder redemptions, to invest cash balances or
dividends, or to minimize trading costs.
A Fund will not purchase or sell a futures contract unless, after the
transaction, the sum of the aggregate amount of margin deposits on its
existing futures positions and the amount of premiums paid for related
options used for non-hedging purposes is 5% or less of the Fund's total
assets.
Special Risks. Futures contracts and related options present the following
risks: imperfect correlation between the change in market value of a Fund's
securities and the price of futures contracts and options; the possible
inability to close a futures contract when desired; losses due to
unanticipated market movements, which are potentially unlimited; and the
possible inability of the advisor or sub-advisor to correctly predict the
direction of securities prices, interest rates, currency exchange rates and
other economic factors.
36
<PAGE>
Investment Grade Credit Risk. A security is considered investment grade if, at
the time of purchase, it is rated:
. BBB or higher by S&P;
. Baa or higher by Moody's;
. BBB or higher by Duff & Phelps; or
. BBB or higher by Fitch.
A security will be considered investment grade if it receives one of the above
ratings, even if it receives a lower rating from other rating organizations.
Investment Strategy. Except as stated in the next section, fixed income and
convertible securities purchased by the Funds will generally be rated at
least investment grade. The Funds may also invest in unrated securities if
the advisor or sub-advisor believes they are comparable in quality.
Special Risks. Although securities rated "BBB" by S&P, Duff & Phelps or
Fitch, or Baa by Moody's are considered investment grade, they have certain
speculative characteristics. Therefore, they may be subject to a higher
risk of default than obligations with higher ratings. Subsequent to its
purchase by a Fund, a rated security may cease to be rated or its rating
may be reduced below the minimum rating required for purchase by the Fund.
The advisor or sub-advisor will consider such an event in determining
whether the Fund should continue to hold the security.
Options. An option is a type of derivative instrument that gives the holder the
right (but not the obligation) to buy (a "call") or sell (a "put") an asset in
the future at an agreed upon price prior to the expiration date of the option.
Investment Strategy. Each Fund may write (sell) covered call options, buy
put options, buy call options and write secured put options for hedging
purposes. Options may relate to particular securities, foreign or domestic
securities indices, financial instruments or foreign currencies.
Special Risks. The value of options can be highly volatile, and their use
can result in loss if the advisor or sub-advisor is incorrect in its
expectation of price fluctuations. The successful use of options for
hedging purposes also depends in part on the ability of the advisor or sub-
advisor to predict future price fluctuations and the degree of correlation
between the options and securities markets.
Securities Lending. In order to generate additional income, each Fund may lend
securities on a short-term basis to qualified institutions. By reinvesting any
cash collateral it receives in these transactions, the Fund could realize
additional income gains or losses.
Investment Strategy. Securities lending may represent no more than 25% of
the value of a Fund's total assets (including the loan collateral).
Special Risks. The main risk when lending Fund securities is that if the
borrower fails to return the securities or the invested collateral has
declined in value, the Fund could lose money.
Variable and Floating Rate Instruments. Variable and floating rate instruments
have interest rates that are periodically adjusted either at set intervals or
that float at a margin above a generally recognized index rate. These
instruments include variable amount master demand notes.
Special Risks. Variable and floating rate instruments are subject to the
same risks as fixed income investments, particularly interest rate risk and
credit risk. Because there is no active secondary market for certain
variable and floating rate instruments, they may be more difficult to sell
if the issuer defaults on its payment obligations or during periods when a
Fund is not entitled to exercise its demand rights. As a result, the Fund
could suffer a loss with respect to these instruments.
37
<PAGE>
Your Investment
--------------------------------------------------------------------------------
This section describes how to do business with the Funds.
How To Reach The Funds
By telephone: 1-800-438-5789
Call for shareholder services.
By mail: The Munder Funds
c/o PFPC Global Fund Services
P.O. Box 60428
King of Prussia, PA 19406-0428
Purchasing Shares
Purchase Price of Shares
Class A shares of a Fund are sold at the NAV next determined after a purchase
order is received in proper form plus any applicable sales charge. Please see
"Distribution Arrangements" below for information about sales charges.
Class B and Class C shares of a Fund are sold at NAV next determined after a
purchase order is received in proper form.
Broker-dealers or financial advisors (other than the Funds' distributor) may
charge you additional fees for shares you purchase through them.
Policies for Purchasing Shares
Investment minimums
. Initial: $250
. Subsequent: $50
. Automatic Investment Plan: $50
Purchases over $250,000 must be for Class A or Class C shares.
Timing of orders
Purchase orders must be received by the Funds' distributor, transfer agent or
authorized dealer before the close of regular trading on the New York Stock
Exchange (normally, 4:00 p.m. Eastern time). Purchase orders received after
that time will be accepted as of the next business day.
Methods for Purchasing Shares
Investors may purchase shares:
. By Broker and/or Financial Advisor. Any broker or financial advisor
authorized by the Funds' distributor can sell you shares of the Funds. Please
note that brokers or financial advisors may charge you fees for their
services.
. By Mail. You may open an account by completing, signing and mailing the
attached account application form and a check or other negotiable bank draft
(payable to The Munder Funds) for $250 or more to: The Munder Funds, c/o PFPC
Global Fund Services, P.O. Box 60428, King of Prussia, Pennsylvania 19406-
0428. Be sure to specify on your account application form the class of shares
being purchased. If the class is not specified, your purchase will
automatically be invested in Class A shares. For additional investments, send
a letter stating the Fund and share class you wish to purchase, your name and
your account number with a check for $50 or more to the address listed above.
We do not accept third-party checks.
. By Wire. To open a new account, you should call the Funds at (800) 438-5789
to obtain an account number and complete wire instructions prior to wiring
any funds. Within seven days of purchase, you must send a completed account
application form containing your certified taxpayer identification number to
the Funds' transfer agent at The Munder Funds, c/o PFPC Global Fund Services,
P.O. Box 60428, King of Prussia, Pennsylvania 19406-0428. Wire instructions
must state the Fund name, share class, your registered name and your account
number. Your bank wire should be sent through the Federal Reserve Bank Wire
System to:
Boston Safe Deposit and Trust Company
Boston, MA
ABA# 011001234
DDA# 16-798-3
Account No.:
38
<PAGE>
You may make additional investments at any time using the wire procedures
described above. Note that banks may charge fees for transmitting wires.
. You may purchase shares through the Automatic Investment Plan.
. You may purchase shares through the Reinvestment Privilege.
Exchanging Shares
Policies for Exchanging Shares
. You may exchange Fund shares for shares of the same class of other Munder
Funds based on their relative net asset values.
. You may exchange Class C shares of a Fund for Class II shares of other
Munder Funds.
. Class A shares of a Munder money market fund 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 Munder Funds for which a sales charge was paid, can
be exchanged for Class A shares of a Fund.
. Class B and Class C shares will continue to age from the date of the
original purchase and will retain the same CDSC rate as they had before the
exchange.
. You must meet the minimum purchase requirements for the Munder Fund that you
purchase by exchange.
. If you are exchanging into shares of a Munder Fund with a higher sales
charge, you must pay the difference at the time of the exchange.
. A share exchange is a taxable event and, accordingly, you may realize a
taxable gain or loss.
. Before making an exchange request, read the prospectus of the Munder Fund
you wish to purchase by exchange. You can obtain a prospectus for any Munder
Fund by contacting your broker or calling the Munder Funds at (800) 438-
5789.
. Brokers or financial advisors may charge you a fee for handling exchanges.
. We may change, suspend or terminate the exchange privilege at any time. You
will be given notice of any material modifications except where notice is
not required.
Methods for Exchanging Shares
. Exchanges By Telephone. You may give exchange instructions by telephone to
the Funds at (800) 438-5789. You may not exchange shares by telephone if you
hold share certificates. We reserve the right to reject any telephone
exchange request and to place restrictions on telephone exchanges.
. Exchanges By Mail. You may send exchange requests to your broker, to your
financial advisor or you may send them directly to the Funds' transfer agent
at The Munder Funds, c/o PFPC Global Fund Services, P.O. Box 60428, King of
Prussia, Pennsylvania 19406-0428.
Redeeming Shares
Redemption Price
We will redeem shares at the NAV next determined after we receive the
redemption request in proper form. We will reduce the amount you receive by
the amount of any applicable contingent deferred sales charge (CDSC).
Please see "Distribution Arrangements" below for information about CDSCs.
Policies for Redeeming Shares
. For your protection, a medallion signature guarantee is required for the
following redemption requests: (a) redemption proceeds greater than $50,000;
(b) redemption proceeds not being made payable to the record owner of the
account; (c) redemption proceeds not being mailed to the address of record
on the account; (d) if the redemption proceeds are being transferred to
another Munder Fund account with a different registration; (e) change in
ownership or registration of the account or (f) changes to banking
information without a voided check being supplied. When a Fund requires a
signature guarantee, a medallion signature guarantee must be provided. A
medallion signature guarantee may be obtained from a domestic bank or trust
company, broker, dealer, clearing agency, savings association, or other
financial institution which is participating in a medallion program
recognized by the Securities
39
<PAGE>
Transfer Association. The three recognized medallion programs are Securities
Transfer Agents Medallion Program (STAMP), Stock Exchanges Medallion Program
(SEMP) and New York Stock Exchange, Inc. Medallion Signature Program (NYSE
MSP). Signature guarantees from financial institutions which are not
participating in one of these programs will not be accepted.
Methods for Redeeming Shares
You may redeem shares of the Funds in several ways:
. By Mail. You may mail your redemption request to: The Munder Funds, c/o PFPC
Global Fund Services, P.O. Box 60428, King of Prussia, Pennsylvania 19406-
0428. The redemption request should state the name of the Fund, share class,
account number, amount of redemption, account name and where to send the
proceeds. All account owners must sign.
. By Telephone. You can redeem your shares by contacting your broker, your
financial advisor or by calling the Funds at (800) 438-5789. There is no
minimum requirement for telephone redemptions.
If you are redeeming at least $1,000 of shares and you have authorized
expedited redemption on your account application form, simply call the Funds
prior to 4:00 p.m. (Eastern time), and request the redemption proceeds be
mailed to the commercial bank, registered broker-dealer or financial advisor
you designated on your account application form. We will send your redemption
proceeds to you on the next business day. We reserve the right at any time to
change or impose fees for this expedited redemption procedure.
During periods of unusual economic or market activity, you may experience
difficulties or delays in effecting telephone redemptions. In such cases you
should consider placing your redemption request by mail.
. You may redeem shares through the Automatic Withdrawal Plan.
Additional Policies For Purchases, Exchanges And Redemptions
. We consider orders to be in "proper form" when all required documents are
properly completed, signed and received.
. The Funds reserve the right to reject any purchase order.
. At any time, the Funds may change any of their purchase or redemption
procedures, and may suspend the sale of their shares.
. The Funds may delay sending redemption proceeds for up to seven days, or
longer if permitted by the Securities and Exchange Commission.
. We will typically send redemption amounts to you within seven business days
after you redeem shares. We may hold redemption amounts from the sale of
shares you purchased by check until the purchase check has cleared, which may
be as long as 15 days.
. To limit the Funds' expenses, we no longer issue share certificates.
. A Fund may temporarily stop redeeming shares if:
. the New York Stock Exchange is closed;
. trading on the New York Stock Exchange is restricted;
. an emergency exists and the Fund cannot sell its assets or accurately
determine the value of its assets; or
. if the Securities and Exchange Commission orders the Fund to suspend
redemptions.
. If accepted by a Fund, investors may purchase shares of the Fund (other than
the Real Estate Equity Investment Fund) with securities which the Fund may
hold. The advisor will determine if the securities are consistent with the
Fund's objectives and policies. If accepted, the securities will be valued
the same way the Fund values portfolio securities it already owns. Call the
Funds at (800) 438-5789 for more information.
40
<PAGE>
. The Funds reserve the right to make payment for redeemed shares wholly or in
part by giving the redeeming shareholder portfolio securities. The
shareholder may pay transaction costs to dispose of these securities.
. We record all telephone calls for your protection and take measures to
identify the caller. As long as the Funds' transfer agent takes reasonable
measures to authenticate telephone requests on an investor's account, neither
the Funds, the Funds' distributor nor the transfer agent will be held
responsible for any losses resulting from unauthorized transactions.
. We may redeem your account if its value falls below $250 as a result of
redemptions (but not as a result of a decline in NAV). You will be notified
in writing and allowed 60 days to increase the value of your account to the
minimum investment level.
. If you purchased shares directly from the Funds, the Funds' transfer agent
will send you confirmations of the opening of an account and of all
subsequent purchases, exchanges or redemptions in the account. If your
account has been set up by a broker or other investment professional, account
activity will be detailed in their statements to you.
. The exchange privilege is not intended as a vehicle for short-term trading.
Excessive exchange activity may interfere with portfolio management and have
an adverse effect on all shareholders. Each Fund and its distributor reserve
the right to refuse any purchase or exchange request that could adversely
affect the fund or its operations, including those from any individual or
group who, in the Fund's view, is likely to engage in excessive trading or
any order considered market-timing activity. If a Fund refuses a purchase or
exchange request and the shareholder deems it necessary to redeem their
account, any CDSC as permitted by the prospectus will be applicable.
Additionally, in no event will any Fund permit more than six exchanges into
or out of a Fund in any one-year period per account, tax identification
number, social security number or related investment group. The Munder Money
Market Funds are exempt from this policy.
Shareholder Privileges
Automatic Investment Plan (AIP). Under the AIP you may arrange for periodic
investments in a Fund through automatic deductions from a checking or savings
account. To enroll in the AIP you should complete the AIP application form or
call the Funds at (800) 438-5789. The minimum pre-authorized investment amount
is $50. You may discontinue the AIP at any time. We may discontinue the AIP on
30 days' written notice to you.
Reinvestment Privilege. For 60 days after you sell shares of a Fund, you may
reinvest your redemption proceeds in shares of the same class of the SAME Fund
at NAV. Any CDSC you paid on the amount you are reinvesting will be credited to
your account. You may use this privilege once in any given twelve-month period
with respect to your shares of a Fund. You, your broker or your financial
advisor must notify the Funds' transfer agent in writing at the time of
reinvestment in order to eliminate the sales charge on your reinvestment.
Automatic Withdrawal Plan (AWP). If you have an account value of $2,500 or more
in a Fund, you may redeem shares on a monthly, quarterly, semi-annual or annual
basis. The minimum withdrawal is $50. We usually process withdrawals on the
20th day of the month and promptly send you your redemption amount. You may
enroll in the AWP by completing the AWP application form available through the
Funds' transfer agent. To participate in the AWP you must have your dividends
automatically reinvested and may not hold share certificates. You may change or
cancel the AWP at any time upon notice to the Funds' transfer agent. You should
not buy Class A shares (and pay a sales charge) while you participate in the
AWP and you must pay any applicable CDSC when you redeem shares.
41
<PAGE>
Distribution Arrangements
--------------------------------------------------------------------------------
Share Class Selection
Each Fund offers Class A, Class B and Class C shares. Each class has its own
cost structure, allowing you to choose the one that best meets your
requirements given the amount of your purchase and the intended length of your
investment. You should consider both ongoing annual expenses and initial sales
charge or CDSC in estimating the costs of investing in a particular class of
shares.
Class A shares
. Front end sales charge. There are several ways to reduce these sale charges.
. Lower annual expenses than Class B and Class C shares.
Class B shares
. No front end sales charge. All your money goes to work for you right away.
. Higher annual expenses than Class A shares.
. A CDSC on shares you sell within six years of purchase.
. Automatic conversion to Class A shares approximately six years after
issuance, thus reducing future annual expenses.
. CDSC is waived for certain redemptions.
Class C shares
. No front end sales charge or CDSC, except for a CDSC for redemptions made
within the first year after investing. All your money goes to work for you
right away.
. Shares do not convert to another class.
. Higher annual expenses than Class A shares.
Each Fund also issues other classes of shares, which have different sales
charges, expense levels and performance. The other classes of shares are
available to limited types of investors. Call (800) 438-5789 to obtain more
information about those classes.
Applicable Sales Charge--Class A Shares
You can purchase Class A shares at NAV plus an initial sales charge. The sales
charge as a percentage of your investment decreases as the amount you invest
increases. The current sales charge rates and commissions paid to selected
dealers are as follows:
<TABLE>
<CAPTION>
Sales Charge
as a Percentage Dealer
of Reallowance
---------------- as a
Net Percentage of
Your Asset the Offering
Investment Value Price
---------- ----- -------------
<S> <C> <C> <C>
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%
$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)**
</TABLE>
--------
*No initial sales charge applies on investments of $1 million or more. However,
a CDSC of 1% is imposed on certain redemptions within one year of purchase.
**The distributor will pay a 1% commission to dealers who initiate and are
responsible for purchases of $1 million or more.
The distributor may pay the entire commission to dealers. If that occurs, the
dealer may be considered an "underwriter" under Federal securities law.
Sales Charge Waivers--General
We will waive the initial sales charge on Class A shares for the following
types of purchasers (the word "advisor" in the following refers to Munder
Capital Management, the advisor to The Munder Funds).
1. individuals with an investment account or relationship with the advisor;
2. full-time employees and retired employees of the advisor, or its affiliates,
employees of the Funds' service providers and immediate family members of such
persons;
42
<PAGE>
3. registered broker-dealers or financial advisors 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 described below;
5. individuals who reinvest a distribution from a qualified retirement plan for
which the advisor serves as investment advisor;
6. individuals who reinvest the proceeds of redemptions from Class Y Shares of
another Munder Fund, within 60 days of redemption;
7. banks and other financial institutions that have entered into agreements
with the Munder Funds to provide shareholder services for customers (including
customers of such banks and other financial institutions, and the immediate
family members of such customers);
8. fee-based financial planners or employee benefit plan consultants acting for
the accounts of their clients;
9. employer sponsored retirement plans which are administered by Universal
Pensions, Inc. (UPI Plans); and
10. employer sponsored 401(k) plans that are administered by Merrill Lynch
Group Employee Services (Merrill Lynch Plans) which meet the criteria described
below under "Sales Charge Waivers--Qualified Employer Sponsored Retirement
Plans."
Sales Charge Waivers--Qualified Employer Sponsored Retirement Plans
We will waive the initial sales charge on purchases of Class A shares by
employer sponsored retirement plans that are qualified under Section 401(a) or
Section 403(b) of the Internal Revenue Code (each, a Qualified Employee Benefit
Plan) and that (1) invest $1,000,000 or more in Class A shares offered by the
Munder Funds or (2) have at least 75 eligible plan participants.
In addition, we will waive the CDSC of 1% charged on certain redemptions within
one year of purchase for Qualified Employee Benefit Plan purchases that meet
the above criteria. A 1% commission will be paid by the distributor to dealers
and other entities (as permitted by applicable Federal and state law) who
initiate and are responsible for Qualified Employee Benefit Plan purchases that
meet the above criteria. This sales charge waiver does not apply to Simplified
Employee Pension Plans (SEPs), Individual Retirement Accounts (IRAs), UPI Plans
and Merrill Lynch Plans.
UPI Plans. We also will waive (i) the initial sales charge on Class A shares
purchased by UPI Plans for employees participating in an employer-sponsored or
administered retirement program operating under Section 408A of the Internal
Revenue Code and (ii) the CDSC of 1% imposed on certain redemptions within one
year of purchase for these accounts. The distributor will pay a 1% commission
to dealers and others (as permitted by applicable Federal and state law) who
initiate and are responsible for UPI Plan purchases.
Merrill Lynch Plans. We will waive the initial sales charge for all investments
by Merrill Lynch Plans if
(i) the Plan is recordkept on a daily valuation basis by Merrill Lynch Group
Employee Services (Merrill Lynch) and, on the date the plan sponsor signs
the Merrill Lynch Recordkeeping Service Agreement, the Plan has $3 million
or more in assets invested in broker/dealer funds not advised or managed by
Merrill Lynch Asset Management, L.P. (MLAM) that are made available
pursuant to a Services Agreement between Merrill Lynch and a Fund's
distributor and in funds advised or managed by MLAM (collectively, the
Applicable Investments); or
(ii) the Plan is recordkept on a daily valuation basis by an independent
recordkeeper whose services are provided through a contract or alliance
arrangement with Merrill Lynch, and on the date the plan sponsor signs the
Merrill Lynch Recordkeeping Service Agreement, the Plan has $3 million or
more in assets, excluding money market funds, invested in Applicable
Investments; or
(iii) the Plan has 500 or more eligible employees, as determined by the Merrill
Lynch plan conversion manager, on the date the plan sponsor signs the
Merrill Lynch Recordkeeping Service Agreement.
43
<PAGE>
For further information on sales charge waivers, call (800) 438-5789.
Sales Charge Reductions
You may qualify for reduced sales charges in the following cases:
. Letter of Intent. If you intend to purchase at least $25,000 of Class A
shares of the Funds, you may wish to complete the Letter of Intent section of
your account application form. By doing so, you agree to invest a certain
amount over a 13-month period. You would pay a sales charge on any Class A
shares you purchase during the 13 months based on the total amount to be
invested under the Letter of Intent. You can apply any investments you made
in any of the Munder Funds during the preceding 90-day period toward
fulfillment of the Letter of Intent (although there will be no refund of
sales charges you paid during the 90-day period). You should inform the
Funds' transfer agent that you have a Letter of Intent each time you make an
investment.
You are not obligated to purchase the amount specified in the Letter of
Intent. If you purchase less than the amount specified, however, you must pay
the difference between the sales charge paid and the sales charge applicable
to the purchases actually made. The Funds' custodian will hold such amount in
escrow. The Funds' custodian will pay the escrowed funds to your account at
the end of the 13 months unless you do not complete your intended investment.
. Quantity Discounts. You may combine purchases of Class A shares that are made
by you, your spouse, your children under age 21 and your IRA when calculating
the sales charge. You must notify your broker, your financial advisor or the
Funds' transfer agent to qualify.
. Right of Accumulation. You may add the value of any other Class A shares of
non-money market Munder Funds you already own to the amount of your next
Class A share investment for purposes of calculating the sales charge at the
time of the current purchase. You must notify your broker or your financial
advisor or the Funds' transfer agent to qualify.
Certain brokers or financial advisors may not offer these programs or may
impose conditions or fees to use these programs. You should consult with your
broker prior to purchasing the Funds' shares.
For further information on sales charge reductions, call (800) 438-5789.
Cdsc
You pay a CDSC when you redeem:
. Class A shares that were bought as part of an investment of at least $1
million within one year of buying them;
. Class B shares within six years of buying them;
. Class C shares within one year of buying them.
These time periods include the time you held Class B, Class C or Class II
shares of another Munder Fund which you may have exchanged for Class B or Class
C shares of the Fund you are redeeming.
The CDSC schedule for Class B shares purchased after June 27, 1995 is set forth
below. Consult the Statement of Additional Information for the CDSC schedule
for Class B shares purchased on or before June 27, 1995. The CDSC is based on
the original NAV at the time of your investment or the NAV at the time of
redemption, whichever is lower. Shares purchased through reinvestment of
distributions are not subject to CDSC.
<TABLE>
<CAPTION>
Years Since Purchase CDSC
-------------------- -----
<S> <C>
First..................................................................... 5.00%
Second.................................................................... 4.00%
Third..................................................................... 3.00%
Fourth.................................................................... 3.00%
Fifth..................................................................... 2.00%
Sixth..................................................................... 1.00%
Seventh and thereafter.................................................... 0.00%
</TABLE>
If you sell some but not all of your shares, certain shares not subject to CDSC
(i.e., shares purchased with reinvested dividends) will be redeemed first,
followed by shares subject to the lowest CDSC (typically shares held for the
longest time).
For example, assume an investor purchased 1,000 shares at $10 s share (for a
total cost of $10,000). Three years later, the shares have a net asset value of
$12 per share and during that time, the investor acquired 100 additional shares
through dividend reinvestment. If the investor then makes one redemption of 500
shares (resulting in proceeds of $6,000, 500 shares X $12 per share), the first
100 shares redeemed will not be subject to the CDSC because they were acquired
through reinvestment of dividends. With respect to the remaining 400 shares
44
<PAGE>
redeemed, the CDSC is charged at $10 per share (because the original purchase
price of $10 per share is lower than the current net asset value of $12 per
share). Therefore, only $4,000 of the $6,000 such investor received from
selling his or her shares will be subject to the CDSC, at a rate of 3.00% (the
applicable rate in the third year after purchase).
At the time of purchase of Class B shares, the Funds' distributor pays sales
commissions of 4.00% of the purchase price to brokers that initiate and are
responsible for purchases of such Class B shares.
CDSC Waivers
We will waive the CDSC payable upon redemptions of shares which you purchased
after June 27, 1995 (or acquired through an exchange of shares of another
Munder Fund purchased after June 27, 1995) for:
. redemptions made within one year after the death of a shareholder or
registered joint owner;
. minimum required distributions made from an IRA or other retirement plan
account after you reach age 70 1/2;
. involuntary redemptions made by the Fund;
. redemptions limited to 10% per year of an account's net asset value of part
of a systematic withdrawal system ("SWP"). For example, if your balance on
December 31st is $10,000, you can redeem up to $1,000 that following year
free of charge through SWP.
We will waive the CDSC payable upon redemptions of shares which you purchased
after December 1, 1998 (or acquired through an exchange of shares of another
Munder Fund purchased after December 1, 1998) for:
. redemptions made from an IRA or other individual retirement plan account
established through Comerica Securities, Inc. after you reach age 59 1/2 and
after the eighteen month anniversary of the purchase of Fund shares.
Consult the Statement of Additional Information for Class B CDSC waivers which
apply when you redeem shares purchased on or before June 27, 1995 (or acquired
through an exchange of shares of another Munder Fund purchased on or before
June 27, 1995).
We will waive the CDSC for Class B shares for all redemptions by Merrill Lynch
Plans if:
(i) the Plan is recordkept on a daily valuation basis by Merrill Lynch; or
(ii) the Plan is recordkept on a daily valuation basis by an independent
recordkeeper whose services are provided through a contract or alliance
arrangement with Merrill Lynch; or
(iii) the Plan has less than 500 eligible employees, as determined by the
Merrill Lynch plan conversion manager, on the date the plan sponsor signs
the Merrill Lynch Recordkeeping Service Agreement.
12b-1 Fees
The Funds have adopted Rule 12b-1 plans with respect to their Class A, Class B
and Class C shares that allow each Fund to pay distribution and other fees for
the sale of its shares and for services provided to shareholders. Under the
plans, the Funds may pay up to .25% of the daily net assets of Class A, Class B
and Class C shares to pay for certain shareholder services provided by
institutions that have agreements with the Funds' distributor to provide such
services. The Funds may also pay up to .75% of the daily net assets of the
Class B and Class C shares to finance activities relating to the distribution
of its shares.
Because the fees are paid out of each Fund's assets on an on-going basis, over
time these fees will increase the cost of an investment in a Fund and may cost
a shareholder more than paying other types of sales charges.
Other Information
The advisor may, from time to time, make payments to banks, broker-dealers,
financial advisors or other financial institutions for certain services to the
Funds and/or its shareholders, including sub- administration, sub-transfer
agency and shareholder servicing. The advisor may make such payments out of its
own resources and there are no additional costs to the Fund or its
shareholders.
Please note that Comerica Bank, an affiliate of the advisor, receives a fee
from the Funds for providing shareholder services to its customers who own
shares of the Funds.
45
<PAGE>
Pricing Of Fund Shares
--------------------------------------------------------------------------------
Each Fund's NAV is calculated on each day the New York Stock Exchange is open.
The Funds calculate NAV as of the close of business on the New York Stock
Exchange, normally 4:00 p.m. (Eastern time).
If the New York Stock Exchange closes early, the Funds will accelerate their
calculation of NAV and transaction deadlines to that time.
The NAV of each Fund is generally based on the market value of the securities
held in the Fund. If market values are not available, the fair value of
securities is determined in good faith by, or using procedures approved by, the
Boards of Directors/Trustees of the Funds.
Trading in foreign securities may be completed at times that vary from the
closing of the New York Stock Exchange. A Fund values foreign securities at the
latest closing price on the exchange on which they are traded immediately prior
to the closing of the New York Stock Exchange. Certain foreign currency
exchange rates may also be determined at the latest rate prior to the closing
of the New York Stock Exchange. Foreign securities quoted in foreign currencies
are translated into U.S. dollars at current rates. Occasionally, events that
affect these values and exchange rates may occur between the times at which
they are determined and the closing of the New York Stock Exchange. If the
advisor believes that such events materially affect the value of portfolio
securities, these securities may be valued at their fair market value as
determined in good faith by, or using procedures approved by, the Funds' Boards
of Directors/Trustees.
Foreign securities may trade in their primary markets on weekends or other days
when a Fund does not price its shares. Therefore, the value of a Fund's
portfolio may change on days when shareholders will not be able to buy or sell
their shares.
Distributions
--------------------------------------------------------------------------------
As a shareholder, you are entitled to your share of a Fund's net income and
gains on its investments. The Funds pass substantially all of its earnings
along to its shareholders as distributions. When the Funds earn dividends from
stocks and interest from debt securities and distributes these earnings to
shareholders, it is called a dividend distribution. A Fund realizes capital
gains when it sells securities for a higher price than it paid. When these
gains are distributed to shareholders, it is called a capital gain
distribution.
Balanced Fund, Equity Income Fund And Small Company Growth Fund
These Funds pay dividends, if any, quarterly.
Real Estate Equity Investment Fund
This Fund pays dividends, if any, monthly.
International Equity Fund, Micro-Cap Equity Fund, Multi-Season Growth Fund,
Small-Cap Value Fund, Framlington Emerging Markets Fund, Framlington Healthcare
Fund and Framlington International Growth Fund
These Funds pay dividends, if any, annually.
All Funds
All Funds distribute their net realized capital gains, if any, at least
annually.
It is possible that a Fund may make a distribution in excess of the Fund's
earnings and profits. You will treat such a distribution as a return of capital
which is applied against and reduces your basis in your shares. You will treat
the excess of any such distribution over your basis in your shares as gain from
a sale or exchange of the shares.
Each Fund will pay distributions in additional shares of that Fund. If you wish
to receive distributions in cash, either indicate this request on your account
application form or notify the Funds by calling (800) 438-5789.
46
<PAGE>
Federal Tax Considerations
--------------------------------------------------------------------------------
Investments in a Fund may have tax consequences that you should consider. This
section briefly describes some of the more common federal tax consequences. A
more detailed discussion about the tax treatment of distributions from the
Funds and about other potential tax liabilities, including backup withholding
for certain taxpayers and about tax aspects of dispositions of shares of the
Funds, is contained in the Statement of Additional Information. You should
consult your tax adviser about your own particular tax situation.
Taxes On Distributions
You will generally have to pay federal income tax on all Fund distributions.
Distributions will be taxed in the same manner whether you receive the
distributions in cash or in additional shares of the Fund. Shareholders not
subject to tax on their income, generally will not be required to pay any tax
on distributions.
Distributions that are derived from net long-term capital gains generally will
be taxed as long-term capital gains. Dividend distributions and short-term
capital gains generally will be taxed as ordinary income. The tax you pay on a
given capital gains distribution generally depends on how long the Fund held
the portfolio securities it sold. It does not depend on how long you held your
Fund shares.
Distributions are generally taxable to you in the tax year in which they are
paid, with one exception: distributions declared in October, November or
December, but not paid until January of the following year, are taxed as though
they were paid on December 31 in the year in which they were declared.
Shareholders generally are required to report all Fund distributions on their
federal income tax returns. Each year the Funds will send you information
detailing the amount of ordinary income and capital gains paid to you for the
previous year.
Taxes On Sales Or Exchanges
If you sell shares of a Fund or exchange them for shares of another Munder
Fund, you generally will be subject to tax on any taxable gain. Your taxable
gain is computed by subtracting your tax basis in the shares from the
redemption proceeds (in the case of a sale) or the value of the shares received
(in the case of an exchange). Because your tax basis depends on the original
purchase price and on the price at which any dividends may have been
reinvested, you should be sure to keep account statements so that you or your
tax preparer will be able to determine whether a sale will result in a taxable
gain.
Other Considerations
If you buy shares of a Fund just before the Fund makes any distribution, you
will pay the full price for the shares and then receive back a portion of the
money you have just invested in the form of a taxable distribution.
If you have not provided complete, correct taxpayer information, by law, the
Funds must withhold a portion of your distributions and redemption proceeds to
pay federal income taxes.
47
<PAGE>
Management
--------------------------------------------------------------------------------
Investment Advisors AndSub-Advisor
Munder Capital Management ("MCM"), 480 Pierce Street, Birmingham, Michigan
48009 is the investment advisor of each Fund other than the International
Equity Fund. World Asset Management, ("World"), 255 East Brown Street,
Birmingham, Michigan 48009, is the investment advisor of the International
Equity Fund. World is a wholly-owned subsidiary of MCM. As of March 31, 2000,
MCM and its affiliates had approximately $62 billion in assets under
management, of which $39 billion were invested in equity securities, $7 billion
were invested in money market or other short-term instruments, $6 billion were
invested in other fixed income securities, $3 billion were invested in balanced
investments and $7 billion in non-discretionary assets. As of March 31, 2000,
World had approximately $22.7 billion in assets under management, of which
$17.6 billion were invested in domestic equity securities, $4.5 billion were
invested in international equity securities and $600 million were invested in
other fixed income securities.
Framlington Overseas Investment Management Limited ("Framlington"), an
affiliate of MCM, is the sub-advisor of the Framlington Funds.
The advisors provide overall investment management for their respective Funds.
Except for the Framlington Funds, they also provide all research and credit
analysis and are responsible for all purchases and sales of portfolio
securities.
Framlington provides research and credit analysis for each of the Framlington
Funds and is responsible for making all purchases and sales of portfolio
securities for each of the Framlington Funds.
During the fiscal year ended June 30, 1999, each Fund paid an advisory fee at
an annual rate based on the average daily net assets of the Fund (after
waivers, if any) as follows:
<TABLE>
<S> <C>
Balanced Fund............................................................. 0.65%
Equity Income Fund........................................................ 0.75%
International Equity Fund................................................. 0.75%
Micro-Cap Equity Fund..................................................... 1.00%
Multi-Season Growth Fund.................................................. 0.75%
Real Estate Equity Investment Fund........................................ 0.74%
Small-Cap Value Fund...................................................... 0.75%
Small Company Growth Fund................................................. 0.75%
Framlington Emerging Markets Fund......................................... 1.25%
Framlington Healthcare Fund............................................... 1.00%
Framlington International Growth Fund..................................... 1.00%
</TABLE>
Because MCM voluntarily agreed to waive a portion of its fees for the Multi-
Season Growth Fund the payment shown above for that Fund is less than the
contractual advisory fees of 1.00% of the first $500 million of the Multi-
Season Growth Fund's average daily net assets and .75% of the Fund's average
daily net assets over $500 million.
Performance of Framlington Account Managed by the Sub-Advisor. The table below
contains certain performance information provided by the sub-advisor relating
to an account managed by the sub-advisor has investment objectives, policies
and strategies substantially similar to the Framlington Healthcare Fund. In the
case of the Healthcare portfolio performance, the data relates to a unit trust
organized under the laws of the United Kingdom managed by the same personnel of
the sub-advisor with substantially similar investment objectives, policies and
strategies to the Framlington Healthcare Fund.
The trust account performance is provided by Standard & Poor's Micropal, an
independent research organization that is a recognized source of performance
data in the UK unit trust industry. The data is U.S. dollar adjusted on the
basis of exchange rates provided by Datastream using WM/Reuters closing rates.
The performance figures are net of brokerage commissions, actual investment
advisory fees and initial sales charges. The data assumes the reinvestment of
net income and capital gain distributions. The trust account returns are
calculated using beginning offer and ending bid prices for periods ended
December 31, 1998.
48
<PAGE>
You should not rely on the following performance data of the sub-advisor's
client accounts as an indication of future performance of the Framlington
Healthcare Fund. It should be noted that the management of the Fund will be
affected by regulatory requirements under the 1940 Act and requirements of the
Internal Revenue Code to qualify as a regulated investment company which if
applied to the accounts may have lowered the accounts performance.
<TABLE>
<CAPTION>
U.K. S&P Healthcare
Health Composite Index
Period Ended Dec. 31, 1998 Portfolio Capital Change
-------------------------- --------- ---------------
<S> <C> <C>
1 Year................................................ 10.85% 3.65%
3 Years............................................... (0.44)% (6.90)%
5 Years............................................... 117.99% 103.85%
10 years.............................................. 409.12% 376.08%
Inception on April 30, 1987........................... 411.08% 239.64%
</TABLE>
Performance for the Health trust account is calculated on an offer-bid basis;
US dollar adjusted total return net of all management fees but not reflective
of U.K. tax, which differs from the SEC method total return calculation.
Source: Standard & Poor's Micropal.
S&P Healthcare Composite Index performance shows capital change in U.S. dollars
but does not reflect the deduction of fees, expenses, and taxes. Source:
Datastream.
The S&P Healthcare Composite Index is the composite Healthcare section of the
S&P 500 Index as defined and tracked by S&P. This index covers securities
listed in the United States only.
Portfolio Managers
Balanced Fund, Small-Cap Value Fund And Small Company Growth Fund
A committee of professional portfolio managers employed by MCM makes investment
decisions for the Funds.
Equity Income Fund
Otto Hinzmann, Jr. and Geoffrey A. Wilson jointly manage the Fund. Mr.
Hinzmann, Vice President and Director of Equity Management of MCM or of Old
MCM, Inc., the predecessor to MCM, since January 1987, has been the Fund's
portfolio manager since February 1995. Mr. Wilson, Senior Portfolio Manager of
MCM, has managed the Fund since August 1999. Mr. Wilson has managed individual,
foundation and endowment portfolios in MCM's Private Management Group since
1985.
International Equity Fund
Todd B. Johnson and Theodore Miller jointly manage the Fund. Mr. Johnson,
President and Chief Investment Officer of World, and Mr. Miller, senior
portfolio manager of the Fund, have managed the Fund since July 1992 and
October 1996, respectively. Mr. Miller previously worked as the primary analyst
for the Fund (1996) and for Interacciones Global Inc. (1993-1995).
Micro-Cap Equity Fund
Carl Wilk and Jeffrey Schwartz jointly manage the Fund. Mr. Wilk, Senior
Portfolio Manager of MCM, has been the Fund's portfolio manager since its
inception. He is also on the management committee for the Small Company Growth
Fund. Prior to joining MCM in 1995, he was a Senior Equity Research Analyst at
Woodbridge Capital Management. Mr. Schwartz, Senior Portfolio Manager of MCM,
has been the Fund's portfolio manager since April 1998. He is also on the
management committee of the Small Company Growth Fund. Mr. Schwartz joined MCM
in 1992.
49
<PAGE>
Multi-Season Growth Fund
Leonard J. Barr II and John Richardson jointly manage the Fund. Mr. Barr,
Senior Vice President and Director of Research of MCM, has been the Fund's
portfolio manager since the Fund's inception in April 1993. Mr. Richardson has
managed the Fund since August 1999. Mr. Richardson, Senior Partner & Director
of Equity Portfolio Management, has managed equity and balanced portfolios
since joining MCM in 1985.
Real Estate Equity Investment Fund
Robert E. Crosby is manager of the Real Estate Equity Investment Fund. Mr.
Crosby has managed the Fund since March 1998 and was the Fund's primary analyst
from 1996-1998. Mr. Crosby serves as portfolio manager for separately managed
institutional accounts, and has been with MCM since 1993.
Framlington Emerging Markets Fund
A committee of professional portfolio managers employed by Framlington makes
investment decisions for the Fund. William Calvert heads the committee. Mr.
Calvert has been employed by Framlington since 1997. Prior to that he was
employed by Edmond de Rothchild Securities.
Framlington Healthcare Fund
Antony Milford, head of the Specialist Desk for Framlington, has been the
Fund's primary portfolio manager since the Fund's inception. Mr. Milford has
managed funds for Framlington since 1971.
Framlington International Growth Fund
A committee of professional portfolio managers employed by Framlington makes
investment decisions for the Fund. Simon Key, Chief Investment Officer of
Framlington, heads the committee. Mr. Key has managed the Fund for Framlington
since 1989.
50
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
51
<PAGE>
Financial Highlights
--------------------------------------------------------------------------------
The financial highlights table is intended to help shareholders understand each
Fund's financial performance for the past 5 years (or, if shorter, the period
of the Fund's operations). Certain information reflects financial results for a
single Fund share. The total returns in the table represent the rate that an
investor would have earned (or lost) on an investment in a particular class of
the Fund (assuming reinvestment of all dividends and distributions). Because
Class A, Class B and Class C Shares of Equity Selection Fund, Growth
Opportunities Fund and Framlington Global Financial Services Fund had not
commenced operations on June 30, 1999, financial highlights are not presented
for those Funds. The information has been audited by Ernst & Young LLP,
independent auditors, except that, for periods ended prior to June 30, 1995 for
the Multi-Season Growth Fund, such financial highlights were audited by another
independent auditor. The independent auditor's report, along with each Fund's
financial statements, are included in the annual reports of the Funds, and are
incorporated by reference into the Statement of Additional Information. You may
obtain the annual reports without charge by calling (800) 438-5789.
<TABLE>
<CAPTION>
Balanced Fund(a)
---------------------------------------------------------------
Year Year Year Year Period Year
Ended Ended Ended Ended Ended Ended
6/30/99 6/30/98 6/30/97(f) 6/30/96(f) 6/30/95(d) 2/28/95(e)
Class A Class A Class A Class A Class A Class A
------- ------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $13.48 $13.01 $12.35 $10.77 $ 9.95 $10.35
------ ------ ------ ------ ------ ------
Income from investment
operations:
Net investment income... 0.21 0.30 0.29 0.27 0.09 0.19
Net realized and
unrealized gain/(loss)
on investments......... 1.02 1.66 1.30 1.55 0.85 (0.41)
------ ------ ------ ------ ------ ------
Total from investment
operations............. 1.23 1.96 1.59 1.82 0.94 (0.22)
------ ------ ------ ------ ------ ------
Less distributions:
Dividends from net
investment income...... (0.23) (0.32) (0.27) (0.24) (0.12) (0.18)
Distributions from net
realized gains......... (1.52) (1.17) (0.66) - - -
------ ------ ------ ------ ------ ------
Total distributions..... (1.75) (1.49) (0.93) (0.24) (0.12) (0.18)
------ ------ ------ ------ ------ ------
Net asset value, end of
period................. $12.96 $13.48 $13.01 $12.35 $10.77 $ 9.95
====== ====== ====== ====== ====== ======
Total return (b) ....... 10.76% 15.93% 13.63% 17.06% 9.44% (2.07)%
====== ====== ====== ====== ====== ======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's)...... $1,572 $ 844 $ 382 $ 375 $ 314 $ 286
Ratio of operating
expenses to average net
assets................. 1.22% 1.17% 1.22% 1.15% 1.16%(c) 1.22%
Ratio of net investment
income to average net
assets................. 1.73% 2.41% 2.30% 2.29% 2.51%(c) 1.89%
Portfolio turnover rate. 116% 79% 125% 197% 52% 116%
Ratio of operating
expenses to average net
assets without waivers. 1.22% 1.17% 1.22% 1.26% 1.51%(c) 1.57%
</TABLE>
--------
(a) The Munder Balanced Fund Class A Shares, Class B Shares and Class C Shares
commenced operations on April 30, 1993, June 21, 1994 and January 24, 1996,
respectively.
(b) Total return represents aggregate total return for the period indicated and
does not reflect any applicable sales charges.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(f) Per share numbers have been calculated using the average shares method.
52
<PAGE>
<TABLE>
<CAPTION>
Balanced Fund(a)
------------------------------------------------------------------------------------------------------------
Year Year Year Year Period Period Year Year Year Period
Ended Ended Ended Ended Ended Ended Ended Ended Ended Ended
6/30/99 6/30/98 6/30/97(f) 6/30/96(f) 6/30/95(d) 2/28/95(e) 6/30/99 6/30/98 6/30/97(f) 6/30/96(f)
Class B Class B Class B Class B Class B Class B Class C Class C Class C Class C
------- ------- ---------- ---------- ---------- ---------- ------- ------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$13.44 $12.97 $12.33 $10.76 $ 9.93 $9.56 $13.45 $12.99 $12.35 $11.67
------ ------ ------ ------ ------ ----- ------ ------ ------ ------
0.12 0.21 0.19 0.18 0.06 0.07 0.12 0.22 0.18 0.05
1.01 1.64 1.30 1.56 0.84 0.37 1.03 1.62 1.32 0.67
------ ------ ------ ------ ------ ----- ------ ------ ------ ------
1.13 1.85 1.49 1.74 0.90 0.44 1.15 1.84 1.50 0.72
------ ------ ------ ------ ------ ----- ------ ------ ------ ------
(0.13) (0.21) (0.19) (0.17) (0.07) (0.07) (0.13) (0.21) (0.20) (0.04)
(1.52) (1.17) (0.66) - - - (1.52) (1.17) (0.66) -
------ ------ ------ ------ ------ ----- ------ ------ ------ ------
(1.65) (1.38) (0.85) (0.17) (0.07) (0.07) (1.65) (1.38) (0.86) (0.04)
------ ------ ------ ------ ------ ----- ------ ------ ------ ------
$12.92 $13.44 $12.97 $12.33 $10.76 $9.93 $12.95 $13.45 $12.99 $12.35
====== ====== ====== ====== ====== ===== ====== ====== ====== ======
9.96% 15.11% 12.73% 16.24% 9.11% 4.65% 10.11% 15.00% 12.84% 6.20%
====== ====== ====== ====== ====== ===== ====== ====== ====== ======
$1,829 $ 647 $ 199 $ 75 $ 15 $ 19 $ 360 $ 115 $ 73 $ 3
1.97% 1.92% 1.97% 1.90% 1.91%(c) 1.85%(c) 1.97% 1.92% 1.97% 1.90%(c)
0.94% 1.66% 1.55% 1.54% 1.76%(c) 1.26%(c) 0.94% 1.66% 1.55% 1.54%(c)
116% 79% 125% 197% 52% 116% 116% 79% 125% 197%
1.97% 1.92% 1.97% 2.01% 2.26%(c) 2.20%(c) 1.97% 1.92% 1.97% 2.01%(c)
</TABLE>
53
<PAGE>
<TABLE>
<CAPTION>
Equity Income Fund(a)
---------------------------------------------------------------
Year Year Year Year Period Period
Ended Ended Ended Ended Ended Ended
6/30/99 6/30/98 6/30/97(g) 6/30/96(g) 6/30/95(d) 2/28/95(g)
Class A Class A Class A Class A Class A Class A
------- ------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $15.62 $15.21 $13.04 $11.14 $10.42 $10.10
------ ------ ------ ------ ------ ------
Income from investment
operations:
Net investment income... 0.20 0.29 0.31 0.32 0.10 0.23
Net realized and
unrealized gain on
investments............ 0.73 2.96 3.14 1.98 0.80 0.24
------ ------ ------ ------ ------ ------
Total from investment
operations............. 0.93 3.25 3.45 2.30 0.90 0.47
------ ------ ------ ------ ------ ------
Less distributions:
Dividends from net
investment income...... (0.18) (0.28) (0.32) (0.31) (0.18) (0.15)
Distributions from net
realized gains......... (1.39) (2.56) (0.96) (0.09) -- (0.00)(f)
------ ------ ------ ------ ------ ------
Total distributions..... (1.57) (2.84) (1.28) (0.40) (0.18) (0.15)
------ ------ ------ ------ ------ ------
Net asset value, end of
period................. $14.98 $15.62 $15.21 $13.04 $11.14 $10.42
====== ====== ====== ====== ====== ======
Total return (b)........ 6.96% 23.03% 28.10% 20.90% 8.69% 4.79%
====== ====== ====== ====== ====== ======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's)...... $5,578 $9,545 $3,662 $1,025 $ 226 $ 128
Ratio of operating
expenses to average net
assets................. 1.21% 1.19% 1.20% 1.21% 1.09%(c) 0.53%(c)
Ratio of net investment
income to average net
assets................. 1.44% 1.78% 2.28% 2.56% 3.33%(c) 4.72%(c)
Portfolio turnover rate. 50% 73% 62% 37% 13% 12%
Ratio of operating
expenses to average net
assets without waivers. 1.21% 1.19% 1.20% 1.28% 15.51%(c) 1.53%(c)
</TABLE>
--------
(a) The Munder Equity Income Fund Class A Shares, Class B Shares and Class C
Shares commenced operations on August 8, 1994, August 9, 1994 and December
5, 1995, respectively.
(b) Total return represents aggregate total return for the period indicated and
does not reflect any applicable sales charges.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(f) Amount represents less than $0.01 per share.
(g) Per share numbers have been calculated using the average shares method.
54
<PAGE>
<TABLE>
<CAPTION>
Equity Income Fund(a)
---------------------------------------------------------------------------------------------------------
Year Year Year Year Period Period Year Year Year Year
Ended Ended Ended Ended Ended Ended Ended Ended Ended Ended
6/30/99 6/30/98 6/30/97(g) 6/30/96(g) 6/30/95(d) 2/28/95(e) 6/30/99 6/30/98 6/30/97(g) 6/30/96(g)
Class B Class B Class B Class B Class B Class B Class C Class C Class C Class C
------- ------- ---------- ---------- ---------- ---------- ------- ------- ---------- ----------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <S>
$15.57 $15.17 $13.02 $11.13 $10.41 $10.10 $15.55 $15.16 $13.01 $12.60
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
.10 0.17 0.21 0.23 0.09 0.19 0.09 0.16 0.19 0.14
0.72 2.95 3.13 1.99 0.77 0.25 0.73 2.95 3.15 0.55
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
0.82 3.12 3.34 2.22 0.86 0.44 0.82 3.11 3.34 0.69
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
(0.07) (0.16) (0.23) (0.24) (0.14) (0.13) (0.07) (0.16) (0.23) (0.19)
(1.39) (2.56) (0.96) (0.09) -- (0.00)(f) (1.39) (2.56) (0.96) (0.09)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
(1.46) (2.72) (1.19) (0.33) (0.14) (0.13) (1.46) (2.72) (1.19) (0.28)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
$14.93 $15.57 $15.17 $13.02 $11.13 $10.41 $14.91 $15.55 $15.16 $13.01
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
6.18% 22.09% 27.16% 20.09% 8.30% 4.47% 6.18% 22.05% 27.17% 5.57%
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
$3,700 $1,694 $ 641 $ 228 $ 57 $ 51 $1,366 $1,776 $ 766 $ 31
1.97% 1.94% 1.95% 1.96% 1.84%(c) 1.27%(c) 1.97% 1.94% 1.95% 1.96%(c)
0.69% 1.03% 1.53% 1.81% 2.58%(c) 3.96%(c) 0.69% 1.03% 1.53% 1.81%(c)
50% 73% 62% 37% 13% 12% 50% 73% 62% 37%
1.97% 1.94% 1.95% 2.03% 2.26%(c) 2.27%(c) 1.97% 1.94% 1.95% 2.03%(c)
</TABLE>
55
<PAGE>
<TABLE>
<CAPTION>
International Equity Fund(a)
-------------------------------------------------------------------
Year Period
Year Ended Ended Year Ended Year Ended Ended Year Ended
6/30/99(f) 6/30/98 6/30/97(f) 6/30/96(f) 6/30/95(d) 2/28/95(e,f)
Class A Class A Class A Class A Class A Class A
---------- ------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 15.03 $15.73 $15.09 $13.42 $12.29 $13.68
------- ------ ------ ------ ------ ------
Income from investment
operations:
Net investment income... 0.20 0.15 0.14 0.15 0.12 0.17
Net realized and
unrealized gain on
investments............ 1.38 0.34 2.30 1.64 1.01 (1.48)
------- ------ ------ ------ ------ ------
Total from investment
operations............. 1.58 0.49 2.44 1.79 1.13 (1.31)
------- ------ ------ ------ ------ ------
Less distributions:
Dividends from net
investment income...... (0.17) (0.19) (0.21) (0.12) - (0.02)
Distributions from net
realized gains......... (0.23) (1.00) (1.59) - - -
Distributions from
capital................ - - - - - (0.06)
------- ------ ------ ------ ------ ------
Total distributions..... (0.40) (1.19) (1.80) (0.12) - (0.08)
------- ------ ------ ------ ------ ------
Net asset value, end of
period................. $ 16.21 $15.03 $15.73 $15.09 $13.42 $12.29
======= ====== ====== ====== ====== ======
Total return (b)........ 10.80% 4.30% 17.98% 13.37% 9.28% (9.67)%
======= ====== ====== ====== ====== ======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's)...... $16,024 $6,264 $6,710 $4,767 $1,400 $1,339
Ratio of operating
expenses to average net
assets................. 1.29% 1.25% 1.26% 1.26% 1.21%(c) 1.18%
Ratio of net investment
income to average net
assets................. 1.33% 1.03% 0.98% 1.07% 2.57%(c) 1.31%
Portfolio turnover rate. 23% 41% 46% 75% 14% 20%
Ratio of operating
expenses to average net
assets without waivers. 1.29% 1.25% 1.26% 1.33% 1.46%(c) 1.43%
</TABLE>
--------
(a) The Munder International Equity Fund Class A Shares, Class B Shares and
Class C Shares commenced operations on November 30, 1992, March 9, 1994 and
September 29, 1995, respectively.
(b) Total return represents aggregate total return for the period indicated and
does not reflect any applicable sales charges.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(f) Per share numbers have been calculated using the average shares method.
(g) Amount represents less than $0.01 per share.
56
<PAGE>
<TABLE>
<CAPTION>
International Equity Fund (a)
--------------------------------------------------------------------------------------------------------------
Year Period Year Period
Year Ended Ended Year Ended Year Ended Ended Period Ended Year Ended Ended Year Ended Ended
6/30/99(f) 6/30/98 6/30/97(f) 6/30/96(f) 6/30/95(d) 2/28/95(e,f) 6/30/99(f) 6/30/98 6/30/97(f) 6/30/96(f)
Class B Class B Class B Class B Class B Class B Class C Class C Class C Class C
---------- ------- ---------- ---------- ---------- ------------ ---------- ------- ---------- ----------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <S>
$14.83 $15.57 $14.91 $13.35 $12.26 $13.45 $14.95 $15.68 $15.02 $14.13
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
0.05 0.05 0.03 0.05 0.08 0.08 0.05 0.04 0.03 0.04
1.42 0.32 2.28 1.62 1.01 (1.21) 1.42 0.34 2.30 0.95
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
1.47 0.37 2.31 1.67 1.09 (1.13) 1.47 0.38 2.33 0.99
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
(0.10) (0.11) (0.06) (0.11) - (0.00)(g) (0.10) (0.11) (0.08) (0.10)
(0.23) (1.00) (1.59) - - - (0.23) (1.00) (1.59) -
- - - - - (0.06) - - - -
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
(0.33) (1.11) (1.65) (0.11) - (0.06) (0.33) (1.11) (1.67) (0.10)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
$15.97 $14.83 $15.57 $14.91 $13.35 $12.26 $16.09 $14.95 $15.68 $15.02
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
10.08% 3.54% 17.18% 12.53% 8.89% (8.38)% 10.07% 3.50% 17.18% 7.06%
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
$1,104 $1,121 $1,151 $ 957 $ 128 $ 118 $2,111 $1,911 $2,259 $1,584
2.04% 2.00% 2.01% 2.01% 1.96%(c) 1.88%(c) 2.04% 2.00% 2.01% 2.01%(c)
0.36% 0.28% 0.23% 0.32% 1.82%(c) 0.61%(c) 0.36% 0.28% 0.23% 0.32%(c)
23% 41% 46% 75% 14% 20% 23% 41% 46% 75%
2.04% 2.00% 2.01% 2.08% 2.21%(c) 2.13%(c) 2.04% 2.00% 2.01% 2.08%(c)
</TABLE>
57
<PAGE>
<TABLE>
<CAPTION>
Micro-Cap Equity Fund(a)
--------------------------------------------------------------------
Period Year Period
Year Ended Year Ended Year Ended Ended Ended Ended
6/30/99(f) 6/30/98(f) 6/30/97(f) 6/30/99(f) 6/30/98 6/30/97(f)
Class A Class A Class A Class B Class B Class B
---------- ---------- ---------- ---------- ------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $17.00 $ 12.81 $10.00 $ 16.83 $ 12.79 $11.00
------ ------- ------ ------- ------- ------
Income from investment
operations:
Net investment
income/(loss).......... (0.18) (0.17) (0.05) (0.28) (0.29) (0.05)
Net realized and
unrealized gain/(loss)
on investments......... 1.64 5.00 2.86 1.59 4.97 1.84
------ ------- ------ ------- ------- ------
Total from investment
operations............. 1.46 4.83 2.81 1.31 4.68 1.79
------ ------- ------ ------- ------- ------
Less distributions:
Dividends from net
investment income...... - - - - - -
Distributions from net
realized gains......... (0.30) (0.64) - (0.30) (0.64) -
------ ------- ------ ------- ------- ------
Total distributions..... (0.30) (0.64) - (0.30) (0.64) -
------ ------- ------ ------- ------- ------
Net asset value, end of
period................. $18.16 $ 17.00 $12.81 $ 17.84 $ 16.83 $12.79
====== ======= ====== ======= ======= ======
Total return (b)........ 9.10% 38.01% 28.10% 8.29% 36.87% 16.27%
====== ======= ====== ======= ======= ======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's)...... $9,844 $10,821 $ 184 $13,811 $15,965 $ 442
Ratio of operating
expenses to average net
assets................. 1.53% 1.53% 1.50%(c) 2.28% 2.28% 2.25%(c)
Ratio of net investment
income/(loss) to
average net assets..... (1.21)% (0.97)% (0.88)%(c) (1.96)% (1.72)% (1.63)%(c)
Portfolio turnover rate. 184% 172% 68% 184% 172% 68%
Ratio of operating
expenses to average net
assets without waivers
and/or expenses
reimbursed............. 1.64% 1.78% 7.90%(c) 2.39% 2.53% 8.65%(c)
</TABLE>
--------
(a) The Munder Micro-Cap Equity Fund Class A Shares, Class B Shares and Class C
Shares commenced operations on December 26, 1996, February 24, 1997 and
March 31, 1997, respectively. The Munder Multi-Season Growth Fund Class A
Shares, Class B Shares and Class C Shares commenced operations on August 4,
1993, April 29, 1993 and September 20, 1993, respectively.
(b) Total return represents aggregate total return for the period indicated and
does not reflect any applicable sales charges.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
December 31.
(e) On February 1, 1995, Munder Capital Management replaced Munder Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(f) Per share numbers have been calculated using the average shares method.
(g) Amount represents less than 0.01 per share.
58
<PAGE>
<TABLE>
<CAPTION>
Micro-Cap Equity Fund(a) Multi-Season Growth Fund(a)
-------------------------------- -------------------------------------------------------------------
Period Year Year
Year Ended Year Ended Ended Ended Year Ended Year Ended Year Ended Period Ended Ended
6/30/99(f) 6/30/98(f) 6/30/97(f) 6/30/99 6/30/98(f) 6/30/97(f) 6/30/96(f) 6/30/95(d,e) 12/31/94
Class C Class C Class C Class A Class A Class A Class A Class A Class A
---------- ---------- ---------- ------- ---------- ---------- ---------- ------------ --------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <S>
$16.84 $12.79 $10.13 $ 21.46 $ 18.02 $ 14.83 $12.02 $10.38 $10.68
------ ------ ------ ------- ------- ------- ------ ------ ------
(0.28) (0.29) (0.03) (0.03) 0.00(g) 0.04 0.06 0.01 0.01
1.59 4.98 2.69 2.20 4.37 3.90 3.20 1.63 (0.27)
------ ------ ------ ------- ------- ------- ------ ------ ------
1.31 4.69 2.66 2.17 4.37 3.94 3.26 1.64 (0.26)
------ ------ ------ ------- ------- ------- ------ ------ ------
- - - - (0.01) - (0.05) - -
(0.30) (0.64) - (1.58) (0.92) (0.75) (0.40) - (0.04)
------ ------ ------ ------- ------- ------- ------ ------ ------
(0.30) (0.64) - (1.58) (0.93) (0.75) (0.45) - (0.04)
------ ------ ------ ------- ------- ------- ------ ------ ------
$17.85 $16.84 $12.79 $ 22.05 $ 21.46 $ 18.02 $14.83 $12.02 $10.38
====== ====== ====== ======= ======= ======= ====== ====== ======
8.29% 36.95% 26.26% 11.34% 25.02% 27.57% 27.56% 15.80% (2.45)%
====== ====== ====== ======= ======= ======= ====== ====== ======
$6,333 $7,441 $ 111 $49,602 $32,311 $16,693 $9,544 $9,409 $2,829
2.28% 2.28% 2.25%(c) 1.22% 1.21% 1.25% 1.26% 1.65%(c) 1.75%
(1.96)% (1.72)% (1.63)%(c) (0.14)% 0.00% 0.25% 0.44% 0.28%(c) 0.04%
184% 172% 68% 53% 34% 33% 54% 27% 48%
2.39% 2.53% 8.65%(c) 1.38% 1.39% 1.50% 1.51% 1.97%(c) 3.05%
</TABLE>
59
<PAGE>
<TABLE>
<CAPTION>
Multi-Season Growth Fund(a)
--------------------------------------------------------------------
Year Year
Ended Year Ended Year Ended Year Ended Period Ended Ended
6/30/99 6/30/98(f) 6/30/97(f) 6/30/96(f) 6/30/95(d,e) 12/31/94
Class B Class B Class B Class B Class B Class B
------- ---------- ---------- ---------- ------------ --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 20.70 $ 17.54 $ 14.56 $ 11.85 $ 10.27 $ 10.65
------- -------- ------- ------- ------- -------
Income from investment
operations:
Net investment
income/(loss).......... (0.18) (0.14) (0.08) (0.04) (0.03) (0.07)
Net realized and
unrealized gain/(loss)
on investments......... 2.15 4.22 3.81 3.15 1.61 (0.27)
------- -------- ------- ------- ------- -------
Total from investment
operations............. 1.97 4.08 3.73 3.11 1.58 (0.34)
------- -------- ------- ------- ------- -------
Less distributions:
Dividends from net
investment income...... -- -- -- -- -- --
Distributions from net
realized gains......... (1.58) (0.92) (0.75) (0.40) -- (0.04)
------- -------- ------- ------- ------- -------
Total distributions..... (1.58) (0.92) (0.75) (0.40) -- (0.04)
------- -------- ------- ------- ------- -------
Net asset value, end of
period................. $ 21.09 $ 20.70 $ 17.54 $ 14.56 $ 11.85 $ 10.27
======= ======== ======= ======= ======= =======
Total return (b)........ 10.66% 24.12% 26.61% 26.66% 15.38% (3.21)%
======= ======== ======= ======= ======= =======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's)...... $99,696 $102,700 $84,865 $66,630 $54,349 $46,549
Ratio of operating
expenses to average net
assets................. 1.97% 1.96% 2.00% 2.01% 2.40%(c) 2.50%
Ratio of net investment
income to average net
assets................. (0.83)% (0.75)% (0.50)% (0.31)% (0.47)%(c) (0.71)%
Portfolio turnover rate. 53% 34% 33% 54% 27% 48%
Ratio of operating
expenses to average net
assets without waivers. 2.14% 2.14% 2.25% 2.26% 2.72%(c) 2.89%
</TABLE>
--------
(a) The Munder Multi-Season Growth Fund Class B Shares and Class C Shares
commenced operations on April 29, 1993 and September 20, 1993,
respectively.
(b) Total return represents aggregate total return for the period indicated and
does not reflect any applicable sales charges.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
December 31.
(e) On February 1, 1995, Munder Capital Management replaced Munder Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(f) Per share numbers have been calculated using the average shares method.
60
<PAGE>
<TABLE>
<CAPTION>
Multi-Season Growth Fund(a)
-------------------------------------------------------------------
Year Year Year Year Period Year
Ended Ended Ended Ended Ended Ended
6/30/99 6/30/98(f) 6/30/97(f) 6/30/96(f) 6/30/95(d,e) 12/31/94
Class C Class C Class C Class C Class C Class C
------- ---------- ---------- ---------- ------------ --------
<C> <C> <C> <C> <C> <C> <S>
$ 20.73 $ 17.56 $14.57 $11.86 $10.28 $10.66
------- ------- ------ ------ ------ ------
(0.19) (0.14) (0.08) (0.04) (0.02) (0.07)
2.16 4.23 3.82 3.15 1.60 (0.27)
------- ------- ------ ------ ------ ------
1.97 4.09 3.74 3.11 1.58 (0.34)
------- ------- ------ ------ ------ ------
-- -- -- -- -- --
(1.58) (0.92) (0.75) (0.40) -- (0.04)
------- ------- ------ ------ ------ ------
(1.58) (0.92) (0.75) (0.40) -- (0.04)
------- ------- ------ ------ ------ ------
$ 21.12 $ 20.73 $17.56 $14.57 $11.86 $10.28
======= ======= ====== ====== ====== ======
10.70% 24.09% 26.66% 26.64% 15.37% (3.21)%
======= ======= ====== ====== ====== ======
$13,076 $14,411 $9,253 $5,605 $3,207 $2,071
1.97% 1.96% 2.00% 2.01% 2.40%(c) 2.50%
(0.83)% (0.75)% (0.50)% (0.31)% (0.47)%(c) (0.65)%
53% 34% 33% 54% 27% 48%
2.13% 2.14% 2.25% 2.26% 2.72%(c) 4.57%
</TABLE>
61
<PAGE>
<TABLE>
<CAPTION>
Real Estate Equity Investment Fund(a)
----------------------------------------------------
Year Year Year Year Period
Ended Ended Ended Ended Ended
6/30/99(e) 6/30/98(e) 6/30/97 6/30/96(e) 6/30/95(d)
Class A Class A Class A Class A Class A
---------- ---------- ------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period................ $14.94 $14.40 $11.22 $10.09 $10.00
------ ------ ------ ------ ------
Income from investment
operations:
Net investment
income/(loss)............ 0.57 0.64 0.44 0.45 0.36
Net realized and
unrealized gain on
investments.............. (1.63) 0.66 3.26 1.12 0.07
------ ------ ------ ------ ------
Total from investment
operations............... (1.06) 1.30 3.70 1.57 0.43
------ ------ ------ ------ ------
Less distributions:
Dividends from net
investment income (0.60) (0.62) (0.48) (0.44) (0.34)
Distributions in excess of
net investment income.... - - (0.01) - -
Distributions from net
realized gains........... (0.39) (0.14) - - -
Distributions from paid-in
capital.................. (0.11) - (0.03) - -
------ ------ ------ ------ ------
Total distributions....... (1.10) (0.76) (0.52) (0.44) (0.34)
------ ------ ------ ------ ------
Net asset value, end of
period................... $12.78 $14.94 $14.40 $11.22 $10.09
====== ====== ====== ====== ======
Total return (b).......... (6.66)% 8.93% 33.51% 15.92% 4.45%
====== ====== ====== ====== ======
Ratios to average net
assets/supplemental data:
Net assets, end of period
(in 000's)............... $3,530 $4,099 $1,426 $ 267 $ 223
Ratio of operating
expenses to average net
assets................... 1.27% 1.28% 1.35% 1.25% 1.50%(c)
Ratio of net investment
income/(loss) to average
net assets............... 4.40% 4.15% 3.80% 4.25% 5.03%(c)
Portfolio turnover rate... 22% 15% 15% 17% 3%
Ratio of operating
expenses to average net
assets without waivers... 1.27% 1.28% 1.38% 1.52% 7.23%(c)
</TABLE>
--------
(a) The Munder Real Estate Equity Investment Fund Class A Shares, Class B
Shares and Class C Shares commenced operations on September 30, 1994,
October 3, 1994 and January 5, 1996, respectively.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) On February 1, 1995, Munder Capital Management replaced Munder Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(e) Per share numbers have been calculated using the average shares method.
62
<PAGE>
<TABLE>
<CAPTION>
Real Estate Equity Investment Fund(a)
-------------------------------------------------------------------------------------------------
Year Year Year Year Period Year Year Year Period
Ended Ended Ended Ended Ended Ended Ended Ended Ended
6/30/99(e) 6/30/98(e) 6/30/97 6/30/96(e) 6/30/95(d) 6/30/99(e) 6/30/98(e) 6/30/97 6/30/96(e)
Class B Class B Class B Class B Class B Class C Class C Class C Class C
---------- ---------- ------- ---------- ---------- ---------- ---------- ------- ----------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <S>
$14.93 $14.40 $11.22 $10.09 $10.00 $ 14.98 $14.44 $11.25 $10.76
------ ------ ------ ------ ------ ------- ------ ------ ------
0.47 0.53 0.36 0.38 0.30 0.48 0.53 0.36 0.18
(1.63) 0.65 3.24 1.11 0.07 (1.64) 0.66 3.26 0.47
------ ------ ------ ------ ------ ------- ------ ------ ------
(1.16) 1.18 3.60 1.49 0.37 (1.16) 1.19 3.62 0.65
------ ------ ------ ------ ------ ------- ------ ------ ------
(0.51) (0.51) (0.38) (0.36) (0.28) (0.51) (0.51) (0.39) (0.16)
- - (0.01) - - - - (0.01) -
(0.39) (0.14) - - - (0.39) (0.14) - -
(0.10) - (0.03) - - (0.10) - (0.03) -
------ ------ ------ ------ ------ ------- ------ ------ ------
(1.00) (0.65) (0.42) (0.36) (0.28) (1.00) (0.65) (0.43) (0.16)
------ ------ ------ ------ ------ ------- ------ ------ ------
$12.77 $14.93 $14.40 $11.22 $10.09 $ 12.82 $14.98 $14.44 $11.25
====== ====== ====== ====== ====== ======= ====== ====== ======
(7.37)% 8.12% 32.52% 15.05% 3.87% (7.34)% 8.17% 32.57% 6.08%
====== ====== ====== ====== ====== ======= ====== ====== ======
$5,337 $6,956 $4,606 $1,707 $1,496 $1,251 $1,513 $537 $4
2.02% 2.03% 2.10% 2.00% 2.25%(c) 2.02% 2.03% 2.10% 2.00%
3.70% 3.40% 3.05% 3.50% 4.28%(c) 3.73% 3.40% 3.05% 3.50%
22% 15% 15% 17% 3% 22% 15% 15% 17%
2.02% 2.03% 2.13% 2.27% 7.98%(c) 2.02% 2.03% 2.13% 2.27%
</TABLE>
63
<PAGE>
<TABLE>
<CAPTION>
Small-Cap Value Fund (a)
----------------------------------------------------------
Year Year Period Year Year
Ended Ended Ended Ended Ended
6/30/99(e) 6/30/98(e) 6/30/97(e) 6/30/99(e) 6/30/98(e)
Class A Class A Class A Class B Class B
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $14.24 $12.04 $10.22 $14.19 $12.03
------ ------ ------ ------ ------
Income from investment
operations:
Net investment
income/(loss).......... 0.06 0.08 0.09 (0.03) (0.03)
Net realized and
unrealized gain on
investments............ (0.86) 2.82 1.77 (0.84) 2.83
------ ------ ------ ------ ------
Total from investment
operations............. (0.80) 2.90 1.86 (0.87) 2.80
------ ------ ------ ------ ------
Less distributions:
Dividends from net
investment income...... (0.05) (0.06) (0.04) (0.00)(f) -
Dividends in excess of
net investment income.. (0.02) - - (0.02) -
Distributions from net
realized gains......... (0.27) (0.64) - (0.27) (0.64)
------ ------ ------ ------ ------
Total distributions..... (0.34) (0.70) (0.04) (0.29) (0.64)
------ ------ ------ ------ ------
Net asset value, end of
period................. $13.10 $14.24 $12.04 $13.03 $14.19
====== ====== ====== ====== ======
Total return (b)........ (5.19)% 24.36% 18.20% (5.85)% 23.58%
====== ====== ====== ====== ======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's)...... $6,015 $6,474 $1,164 $3,287 $3,237
Ratio of operating
expenses to average net
assets................. 1.23% 1.27% 1.38%(c) 1.98% 2.02%
Ratio of net investment
income/(loss) to
average net assets..... 0.49% 0.56% 1.93%(c) (0.27)% (0.19)%
Portfolio turnover rate. 69% 53% 73% 69% 53%
Ratio of operating
expenses to average net
assets without waivers 1.23% 1.27% 1.51%(c) 1.98% 2.02%
</TABLE>
--------
(a) The Munder Small-Cap Value Fund Class A Shares, Class B Shares and Class C
Shares commenced operations on January 10, 1997, February 11, 1997 and
January 13, 1997, respectively.
(b) Total return represents aggregate total return for the period indicated and
does not reflect any applicable sales charges.
(c)Annualized.
(d) On February 1, 1995, Munder Capital Management replaced Munder Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(e) Per share numbers have been calculated using the average shares method.
(f) Amount represents less than $0.01 per share.
64
<PAGE>
<TABLE>
<CAPTION>
Small-Cap Value Fund (a)
-------------------------------------------------------------------------------------------------
Period Year Year Period
Ended Ended Ended Ended
6/30/97(e) 6/30/99(e) 6/30/98(e) 6/30/97(e)
Class B Class C Class C Class C
---------- ---------- ---------- ----------
<S> <C> <C> <C>
$10.76 $14.18 $12.02 $10.22
------ ------ ------ ------
0.05 (0.03) (0.03) 0.05
1.24 (0.86) 2.83 1.78
------ ------ ------ ------
1.29 (0.89) 2.80 1.83
------ ------ ------ ------
(0.02) (0.00)(f) - (0.03)
- (0.02) - -
- (0.27) (0.64) -
------ ------ ------ ------
(0.02) (0.29) (0.64) (0.03)
------ ------ ------ ------
$12.03 $13.00 $14.18 $12.02
====== ====== ====== ======
12.03% (6.00)% 23.60% 17.92%
====== ====== ====== ======
$ 373 $1,845 $1,932 $ 197
2.13%(c) 1.98% 2.02% 2.13%
1.18%(c) (0.27)% (0.19)% 1.18%
73% 69% 53% 73%
2.26%(c) 1.98% 2.02% 2.26%
</TABLE>
65
<PAGE>
<TABLE>
<CAPTION>
Small Company Growth Fund (a)
-----------------------------------------------------------------------
Year Year Year Year Period Year
Ended Ended Ended Ended Ended Ended
6/30/99(f) 6/30/98(f) 6/30/97(f) 6/30/96(f) 6/30/95(e) 2/28/95(d)
Class A Class A Class A Class A Class A Class A
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 19.96 $ 21.61 $ 21.08 $15.28 $13.89 $14.37
------- ------- ------- ------ ------ ------
Income from investment
operations:
Net investment income... (0.07) (0.13) (0.12) (0.12) (0.02) (0.07)
Net realized and
unrealized gain/(loss)
on investments......... (2.15) 2.59 3.64 7.16 1.41 (0.39)
------- ------- ------- ------ ------ ------
Total from investment
operations............. (2.22) 2.46 3.52 7.04 1.39 (0.46)
------- ------- ------- ------ ------ ------
Less distributions:
Distributions from net
realized capital gains. (1.21) (4.11) (2.99) (1.24) - (0.02)
------- ------- ------- ------ ------ ------
Total distributions..... (1.21) (4.11) (2.99) (1.24) - (0.02)
------- ------- ------- ------ ------ ------
Net asset value, end of
period................. $ 16.53 $ 19.96 $ 21.61 $21.08 $15.28 $13.89
======= ======= ======= ====== ====== ======
Total return (b)........ (10.92)% 12.41% 18.88% 48.28% 10.01% (3.21)%
======= ======= ======= ====== ====== ======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's)...... $25,729 $20,909 $11,646 $4,832 $2,871 $2,697
Ratio of operating
expenses to average net
assets................. 1.22% 1.20% 1.22% 1.21% 1.21%(c) 1.23%
Ratio of net investment
loss to average net
assets................. (0.44)% (0.57)% (0.62)% (0.66)% (0.41)%(c) (0.40)%
Portfolio turnover rate. 108% 123% 98% 98% 39% 45%
Ratio of operating
expenses to average net
assets without waivers. 1.22% 1.20% 1.22% 1.28% 1.46%(c) 1.48%
</TABLE>
--------
(a) The Munder Small Company Growth Fund Class A Shares, Class B Shares and
Class C Shares commenced operations on November 23, 1992, April 28, 1994
and September 26, 1995, respectively.
(b) Total return represents aggregate total return for the period indicated and
does not reflect any applicable sales charges.
(c) Annualized.
(d) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(e) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(f) Per share numbers have been calculated using the average shares method.
66
<PAGE>
<TABLE>
<CAPTION>
Small Company Growth Fund (a)
---------------------------------------------------------------------------------------------------------------------
Period Period Period
Year Ended Year Ended Year Ended Year Ended Ended Ended Year Ended Year Ended Year Ended Ended
6/30/99(f) 6/30/98(f) 6/30/97(f) 6/30/96(f) 6/30/95(e) 2/28/95(d) 6/30/99(f) 6/30/98(f) 6/30/97(f) 6/30/96(f)
Class B Class B Class B Class B Class B Class B Class C Class C Class C Class C
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$19.16 $ 21.05 $20.74 $15.15 $13.81 $13.54 $19.46 $21.32 $20.93 $17.05
------ ------- ------ ------ ------ ------ ------ ------ ------ ------
(0.19) (0.28) (0.25) (0.26) (0.05) (0.05) (0.19) (0.28) (0.25) (0.21)
(2.05) 2.50 3.55 7.09 1.39 0.34 (2.09) 2.53 3.63 5.33
------ ------- ------ ------ ------ ------ ------ ------ ------ ------
(2.24) 2.22 3.30 6.83 1.34 0.29 (2.28) 2.25 3.38 5.12
------ ------- ------ ------ ------ ------ ------ ------ ------ ------
(1.21) (4.11) (2.99) (1.24) - (0.02) (1.21) (4.11) (2.99) (1.24)
------ ------- ------ ------ ------ ------ ------ ------ ------ ------
(1.21) (4.11) (2.99) (1.24) - (0.02) (1.21) (4.11) (2.99) (1.24)
------ ------- ------ ------ ------ ------ ------ ------ ------ ------
$15.71 $ 19.16 $21.05 $20.74 $15.15 $13.81 $15.97 $19.46 $21.32 $20.93
====== ======= ====== ====== ====== ====== ====== ====== ====== ======
(11.55)% 11.51% 18.06% 47.26% 9.70% 2.13% (11.58)% 11.50% 18.26% 31.97%
====== ======= ====== ====== ====== ====== ====== ====== ====== ======
$8,745 $14,013 $5,735 $ 990 $ 46 $ 39 $3,839 $6,319 $2,271 $ 76
1.97% 1.95% 1.97% 1.96% 1.96%(c) 1.85%(c) 1.97% 1.95% 1.97% 1.96%(c)
(1.19)% (1.32)% (1.37)% (1.41)% (1.16)%(c) (1.02)%(c) (1.19)% (1.32)% (1.37)% (1.41)%(c)
108% 123% 98% 98% 39% 45% 108% 123% 98% 98%
1.97% 1.95% 1.97% 2.03% 2.21%(c) 2.10%(c) 1.97% 1.95% 1.97% 2.03%(c)
</TABLE>
67
<PAGE>
<TABLE>
<CAPTION>
Framlington Emerging Markets Fund(a)
------------------------------------------------------------------------------------
Year Year Period Year Year Period Year
Ended Ended Ended Ended Ended Ended Ended
6/30/99(d) 6/30/98(d) 6/30/97(d) 6/30/99(d) 6/30/98(d) 6/30/97(d) 6/30/99(d)
Class A Class A Class A Class B Class B Class B Class C
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 8.99 $ 12.92 $10.18 $ 8.95 $ 12.91 $11.13 $ 8.96
------ ------- ------ ------ ------- ------ ------
Income from investment
operations:
Net investment income... 0.03 0.11 0.05 (0.03) 0.02 0.01 (0.03)
Net realized and
unrealized gain/(loss)
on investments......... 2.67 (3.73) 2.71 2.55 (3.71) 1.79 2.54
------ ------- ------ ------ ------- ------ ------
Total from investment
operations............. 2.70 (3.62) 2.76 2.52 (3.69) 1.80 2.51
------ ------- ------ ------ ------- ------ ------
Less distributions:
Dividends from net
investment income...... - (0.04) (0.02) - (0.00)(e) (0.02) -
Distributions from net
realized gains......... - (0.05) - - (0.05) - -
Distributions in excess
of net realized gains.. - (0.22) - - (0.22) - -
------ ------- ------ ------ ------- ------ ------
Total distributions..... - (0.31) (0.02) - (0.27) (0.02) -
------ ------- ------ ------ ------- ------ ------
Net asset value, end of
period................. $11.69 $ 8.99 $12.92 $11.47 $ 8.95 $12.91 $11.47
====== ======= ====== ====== ======= ====== ======
Total return(b)......... 30.03% (28.34)% 27.16% 28.16% (28.90)% 16.21% 28.01%
====== ======= ====== ====== ======= ====== ======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's)...... $ 961 $ 632 $ 532 $1,121 $ 511 $ 134 $ 497
Ratio of operating
expenses to average net
assets................. 1.85% 1.89% 1.79%(c) 2.60% 2.64% 2.54%(c) 2.60%
Ratio of net investment
income/(loss) to
average net assets..... 0.39% 0.93% 1.14%(c) (0.36)% 0.18% 0.39%(c) (0.36)%
Portfolio turnover rate. 159% 94% 46% 159% 94% 46% 159%
Ratio of operating
expenses to average net
assets without expenses
reimbursed............. 2.12% 2.14% 5.43%(c) 2.87% 2.89% 6.18%(c) 2.87%
</TABLE>
--------
(a) The Munder Framlington Emerging Markets Fund Class A Shares, Class B Shares
and Class C Shares commenced operations on January 14, 1997, February 25,
1997 and March 3, 1997, respectively. The Munder Framlington Healthcare
Fund Class A Shares, Class B Shares and Class C Shares commenced operations
on February 14, 1997, January 31, 1997 and January 13, 1997, respectively.
(b) Total return represents aggregate total return for the period indicated and
does not reflect any applicable sales charges.
(c) Annualized.
(d) Per share numbers have been calculated using the average shares method.
(e) Amount represents less than $0.01 per share.
(f) Average commission rate paid per share of securities purchased and sold by
the Fund.
68
<PAGE>
<TABLE>
<CAPTION>
Framlington Emerging
Markets Fund(a)
------------------------
Year Period
Ended Ended
6/30/98(d) 6/30/97(d)
Class C Class C
---------- ----------
<C> <C>
$ 12.92 $10.95
------- ------
0.02 0.01
(3.71) 1.96
------- ------
(3.69) 1.97
------- ------
(0.00)(e) (0.00)(e)
(0.05) -
(0.22) -
------- ------
(0.27) (0.00)(e)
------- ------
$ 8.96 $12.92
======= ======
(28.88)% 18.03%
======= ======
$ 132 $ 24
2.64% 2.54%(c)
0.18% 0.39%(c)
94% 46%
2.89% 6.18%(c)
<CAPTION>
Framlington Healthcare Fund(a)
--------------------------------------------------------------------------------------------------------
Year Year Period Year Year Period Year Year Period
Ended Ended Ended Ended Ended Ended Ended Ended Ended
6/30/99(d) 6/30/98(d) 6/30/97 6/30/99(d) 6/30/98(d) 6/30/97 6/30/99(d) 6/30/98(d) 6/30/97
Class A Class A Class A Class B Class B Class B Class C Class C Class C
--------------------- ------------ ---------- ---------- ------------ ---------- ---------- ------------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <S>
$11.82 $10.89 $11.30 $11.69 $10.85 $11.02 $11.69 $10.86 $10.40
--------------------- ------------ ---------- ---------- ------------ ---------- ------------
(0.13) (0.15) (0.01) (0.21) (0.23) (0.02) (0.21) (0.23) (0.01)
(1.13) 1.08 (0.40) (1.11) 1.07 (0.15) (1.11) 1.06 0.47
--------------------- ------------ ---------- ---------- ------------ ---------- ------------
(1.26) 0.93 (0.41) (1.32) 0.84 (0.17) (1.32) 0.83 0.46
--------------------- ------------ ---------- ---------- ------------ ---------- ------------
- - - - - - - - -
(0.08) - - (0.08) - - (0.08) - -
(0.22) - - (0.02) - - (0.02) - -
--------------------- ------------ ---------- ---------- ------------ ---------- ---------- ------------
(0.10) - - (0.10) - - (0.10) - -
--------------------- ------------ ---------- ---------- ------------ ---------- ---------- ------------
$10.46 $11.82 $10.89 $10.27 $11.69 $10.85 $10.27 $11.69 $10.86
===================== ============ ========== ========== ============ ========== ========== ============
(10.69)% 8.54% (3.63)% (11.40)% 7.83% (1.54)% (11.40)% 7.73% 4.42%
===================== ============ ========== ========== ============ ========== ========== ============
$3,382 $4,984 $ 664 $6,682 $8,664 $1,063 $1,652 $3,378 $ 164
1.61% 1.62% 1.55%(c) 2.36% 2.37% 2.30%(c) 2.36% 2.37% 2.30%(c)
(1.27)% (1.20)% (0.95)%(c) (2.02)% (1.95)% (1.70)%(c) (2.02)% (1.95)% (1.70)%(c)
49% 47% 14% 49% 47% 14% 49% 47% 14%
1.92% 2.40% 7.33%(c) 2.67% 3.15% 8.08%(c) 2.67% 3.15% 8.08%(c)
</TABLE>
69
<PAGE>
<TABLE>
<CAPTION>
Framlington International Growth Fund (a)
-------------------------------------------------------------------
Year Year Period Year Year Period
Ended Ended Ended Ended Ended Ended
6/30/99(d) 6/30/98(d) 6/30/97(d) 6/30/99(d) 6/30/98(d) 6/30/97(d)
Class A Class A Class A Class B Class B Class B
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $11.92 $11.35 $10.10 $11.83 $11.32 $ 9.85
------ ------ ------ ------ ------ ------
Income from investment
operations:
Net investment
income/(loss).......... (0.02) 0.02 0.05 (0.10) (0.06) 0.01
Net realized and
unrealized gain on
investments............ 0.90 0.61 1.20 0.84 0.61 1.46
------ ------ ------ ------ ------ ------
Total from investment
operations............. 0.88 0.63 1.25 0.74 0.55 1.47
------ ------ ------ ------ ------ ------
Less distributions:
Dividends from net
investment income...... - (0.02) - - - -
Distributions from net
realized gains......... (0.01) (0.03) - (0.01) (0.03) -
Distributions in excess
of net realized gains.. - (0.01) - - (0.01) -
------ ------ ------ ------ ------ ------
Total distributions..... (0.01) (0.06) - (0.01) (0.04) -
------ ------ ------ ------ ------ ------
Net asset value, end of
period................. $12.79 $11.92 $11.35 $12.56 $11.83 $11.32
====== ====== ====== ====== ====== ======
Total return (b)........ 7.36% 5.60% 12.38% 6.23% 4.88% 14.92%
====== ====== ====== ====== ====== ======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's)...... $2,869 $1,601 $1,103 $ 546 $ 591 $ 128
Ratio of operating
expenses to average net
assets................. 1.60% 1.62% 1.55%(c) 2.36% 2.37% 2.30%(c)
Ratio of net investment
income/(loss) to
average net assets..... (0.16)% 0.21% 1.01%(c) (0.92)% (0.54)% 0.26%(c)
Portfolio turnover rate. 66% 38% 15% 66% 38% 15%
Ratio of operating
expenses to average net
assets without expenses
reimbursed............. 1.75% 1.82% 2.56%(c) 2.51% 2.57% 3.31%(c)
</TABLE>
--------
(a) The Munder Framlington International Growth Fund Class A Shares, Class B
Shares and Class C Shares commenced operations on February 20, 1997, March
19, 1997 and February 13, 1997, respectively.
(b) Total return represents aggregate total return for the period indicated and
does not reflect any applicable sales charges.
(c) Annualized.
(d) Per share numbers have been calculated using the average shares method.
70
<PAGE>
<TABLE>
<CAPTION>
Framlington International Growth Fund (a)
-----------------------------------------------------------------------
Year Period Period
Ended Ended Ended
6/30/99 6/30/98(d) 6/30/97(d)
Class C Class C Class C
------- ---------- ----------
<S> <C> <C> <C>
$11.86 $11.33 $10.03
------ ------ ------
(0.10) (0.06) 0.01
0.83 0.63 1.29
------ ------ ------
0.73 0.57 1.30
------ ------ ------
- - -
(0.01) (0.03) -
- (0.01) -
------ ------ ------
(0.01) (0.04) -
------ ------ ------
$12.58 $11.86 $11.33
====== ====== ======
6.13% 5.05% 12.96%
====== ====== ======
$ 172 $ 196 $ 62
2.36% 2.37% 2.30%(c)
0.92% (0.54)% 0.26%(c)
66% 38% 15%
2.51% 2.58% 3.31%(c)
</TABLE>
71
<PAGE>
Table Of Contents
<TABLE>
<C> <S>
2 Risk/Return Summary
.Equity Funds
.Income Funds
.Tax-Free Funds
.Money Market Funds
54 Who May Want To Invest
55 Fees and Expenses
59 More About The Funds
59 Glossary
60 Principal Investment Strategies And Risks
62 Other Investment Strategies And Risks
67 Your Investment
67 How To Reach The Funds
67 Purchasing Shares
68 Exchanging Shares
68 Redeeming Shares
68 Additional Policies For Purchases, Exchanges And Redemptions
69 Shareholder Privileges
70 Pricing of Fund Shares
71 Distributions
72 Federal Tax Considerations
72 Taxes On Distributions
72 Taxes On Sales Or Exchanges
72 Other Considerations
73 Management
73 Investment Advisors And Sub-Advisor
76 Portfolio Managers
78 Financial Highlights
</TABLE>
Back Cover For Additional Information
<PAGE>
Risk/Return Summary
--------------------------------------------------------------------------------
This Risk/Return Summary briefly describes the goals and principal investment
strategies of the Funds and the principal risks of investing in the Funds. For
further information on these and the Funds' other investment strategies and
risks, please read the section entitled "More About The Funds."
Certain terms used in this prospectus are defined in the Glossary. Unless
otherwise noted, all goals of the Funds are non-fundamental and may be changed
by the Board of Directors/Trustees without shareholder approval.
Equity Funds
Balanced Fund
Goal
The Fund's goal is to provide an attractive investment return through a
combination of growth of capital and current income.
Principal Investment Strategies
The Fund pursues its goal by allocating its assets among three asset groups:
equity securities, fixed income securities and cash equivalents.
The Fund normally will invest at least 25% of its assets in fixed income
securities and no more than 75% of its assets in equity securities. The Fund
will notify shareholders at least 30 days before changing this policy.
The advisor will allocate the Fund's assets to the three asset groups based on
its view of the following factors, among others:
. general market and economic conditions and trends;
. interest rates and inflation rates;
. fiscal and monetary developments; and
. long-term corporate earnings growth.
The advisor will try to take advantage of changing economic conditions by
adjusting the ratio of equity securities to fixed income securities or cash
equivalents. For example, if the advisor believes that rapid economic growth
will lead to better corporate earnings in the future, then it might increase
the Fund's equity securities holdings and reduce its fixed income securities
and cash equivalents holdings. Stocks are chosen on the basis of above-average
and sustainable earnings growth, financial stability or attractive valuation
using the advisor's proprietary GARP (Growth at a Reasonable Price) style,
which focuses on both growth prospects and valuation. Bond strategy focuses on
analysis of current versus historical interest rate relationships and the
relative value of the bond market sectors.
The Fund's fixed income securities include:
. U.S. Government securities;
. obligations of foreign governments;
. corporate obligations;
. zero coupon bonds;
. variable and floating rate securities;
. mortgage and other asset-backed securities; and
. stripped securities.
The Fund's fixed income securities are rated investment grade or better. The
average dollar-weighted maturity is expected to vary between six to fifteen
years.
The Fund's cash equivalents are short-term, high-quality money market
instruments and include:
. commercial paper;
. bankers' acceptances and certificates of deposit;
. corporate obligations; and
. U.S. Government securities.
Principal Risks
All investments carry some degree of risk which will affect the value of the
Fund's portfolio investments, its investment performance and the price of its
shares. As a result, you may lose money if you invest in the Fund.
2
<PAGE>
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.
The Fund is subject to the following principal investment risks:
. Stock Market Risk. The value of the securities in which the Fund invests may
decline in response to developments affecting individual companies and/or
general economic conditions. Price changes may be temporary or last for
extended periods. For example, stock prices have historically risen and
fallen in periodic cycles. In addition, the value of the Fund's investments
may decline if the particular companies the Fund invests in do not perform
well.
. Credit (or Default) Risk. An issuer of a security may default on its payment
obligations. Also, an issuer may suffer adverse changes in its financial
condition that could lower the credit quality of a security, leading to
greater volatility in the price of the security and in shares of the Fund. A
change in the quality rating of a bond can affect the bond's liquidity and
make it more difficult for the Fund to sell.
. Interest Rate Risk. An increase in prevailing interest rates will cause fixed
income securities held by the Fund to decline in value. Longer term bonds are
generally more sensitive to interest rate changes than shorter term bonds.
Generally, the longer the average maturity of the bonds held by the Fund, the
more the Fund's share price will fluctuate in response to interest rate
changes.
3
<PAGE>
Performance
The bar chart and table below give some indication of the risk of an investment
in the Fund. The bar chart shows the Fund's performance for each calender year
since inception. The table shows how the Fund's average annual total returns
for different calendar periods over the life of the Fund compare to those of a
broad based securities market index.
When you consider this information, please remember the Fund's performance in
past years is not necessarily an indication of how the Fund will perform in the
future.
<TABLE>
<CAPTION>
Average Annual Total Return
(for the periods ended December 31, 1998)
--------------------------------------
Since
Inception
1 Year 5 Years (4/13/93)
--------------------------------------
<S> <C> <C> <C>
Class Y 10.95% 11.59% 10.97%
S&P 500 Index* 28.57% 24.06% 22.63%**
60% S&P 500/
40% Lehman
Gov't Corp.
Index* 20.93% 17.33% 16.53%**
</TABLE>
--------
*Standard & Poor's Composite 500
Index is an unmanaged index of
common stock prices. The Lehman
Brothers Government/Corporate
Bond Index is a weighted
composite of (i) Lehman Brothers
Government Bond Index, which is
comprised of all publicly issued,
non-convertible debt of the U.S.
Government or any agency thereof,
quasi-federal corporations, and
corporate debt guaranteed by the
U.S. Government and (ii) Lehman
Brothers Corporate Bond Index,
which is comprised of all public
fixed-rate, non-convertible
investment-grade domestic
corporate debt, excluding
collateralized mortgage
obligations.
**Index returns from 3/31/93 for
S&P 500 and 60% S&P 500/40%
Lehman Gov't Corp.
Balanced Fund Class Y
Total Return
(per calendar year)
1994 -5.19%
1995 23.55%
1996 12.86%
1997 17.98%
1998 10.95%
Year-to-date through September 30, 1999: 4.22%
<TABLE>
<S> <C> <C>
Best Quarter: Q4 1998 14.61%
Worst Quarter: Q3 1998 (9.55%)
</TABLE>
4
<PAGE>
Equity Income Fund
(formerly Growth & Income Fund)
Goal
The Fund's goal is to provide capital appreciation and current income.
Principal Investment Strategies
The Fund pursues its goal by investing primarily in dividend-paying equity
securities. Under normal circumstances, the Fund will invest at least 65% of
its assets in income-producing common stocks and convertible preferred stocks.
The Fund may also purchase fixed income securities which are convertible into
or exchangeable for common stock.
The advisor generally selects large, well-known companies that it believes have
favorable prospects for dividend growth and capital appreciation. The Fund will
seek to produce a current yield greater than the S&P 500.
The Fund focuses on dividend-paying equity securities because, over time,
dividend income has accounted for a significant portion of the total return of
the S&P 500. In addition, dividends are usually a more stable and predictable
source of return than capital appreciation. The advisor believes that stocks
which distribute a high level of current income generally have more stable
prices than those which pay below average dividends.
Principal Risks
All investments carry some degree of risk which will affect the value of the
Fund's portfolio investments, its investment performance and the price of its
shares. As a result, you may lose money if you invest in the Fund.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.
The Fund is subject to the following principal investment risks:
. Stock Market Risk. The value of the securities in which the Fund invests may
decline in response to developments affecting individual companies and/or
general economic conditions. Price changes may be temporary or last for
extended periods. For example, stock prices have historically risen and
fallen in periodic cycles. In addition, the value of the Fund's investments
may decline if the particular companies the Fund invests in do not perform
well.
. Credit (or Default) Risk. An issuer of a security may default on its payment
obligations. Also, an issuer may suffer adverse changes in its financial
condition that could lower the credit quality of a security, leading to
greater volatility in the price of the security and in shares of the Fund. A
change in the quality rating of a bond can affect the bond's liquidity and
make it more difficult for the Fund to sell.
. Interest Rate Risk. An increase in prevailing interest rates will cause fixed
income securities held by the Fund to decline in value. Longer term bonds are
generally more sensitive to interest rate changes than shorter term bonds.
Generally, the longer the average maturity of the bonds held by the Fund, the
more the Fund's share price will fluctuate in response to interest rate
changes.
5
<PAGE>
Performance
The bar chart and table below give some indication of the risk of an investment
in the Fund. The bar chart shows the Fund's performance for each calendar year
since inception. The table shows how the Fund's average annual total returns
for different calendar periods over the life of the Fund compare to those of a
broad based securities market index.
When you consider this information, please remember the Fund's performance in
past years is not necessarily an indication of how the Fund will perform in the
future.
Average Annual Total Return
(for the periods ended December 31,
1998)
<TABLE>
----------------------------------------------
<CAPTION>
Since
Inception
1 Year (7/5/94)
----------------------------------------------
<S> <C> <C>
Class Y 10.31% 19.96%
S&P 500 Index* 28.57% 21.50%**
</TABLE>
--------
*Standard & Poor's Composite 500
Index is an unmanaged index of
common stock prices.
**Index return from 6/30/94.
Equity Income Fund Class Y
Total Return
(per calendar year)
1995 34.27%
1996 16.14%
1997 32.35%
1998 10.31%
Year-to-date through September 30, 1999: (4.21)%
<TABLE>
<S> <C> <C>
Best Quarter: Q4 1998 13.72%
Worst Quarter: Q3 1998 (9.97)%
</TABLE>
6
<PAGE>
Focus Growth Fund
(formerly Equity Selection Fund)
Goal
The Fund's goal is to provide long-term capital appreciation.
Principal Investment Strategies
The Fund pursues its goal by investing at least 65% of its assets in equity
securities.
The Fund invests in equity securities which the advisor believes are
undervalued compared to stocks of other companies in the same industry.
The Fund generally invests in companies with market capitalizations of at least
$1 billion.
The Fund diversifies its assets by industry in approximately the same
weightings as those of the Russell 1000 Growth Index.
The Fund may also invest in foreign securities.
Principal Risks
All investments carry some degree of risk which will affect the value of the
Fund's portfolio investments, its investment performance and the price of its
shares. As a result, you may lose money if you invest in the Fund.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.
The Fund is subject to the following principal investment risks:
. Stock Market Risk. The value of the securities in which the Fund invests may
decline in response to developments affecting individual companies and/or
general economic conditions. Price changes may be temporary or last for
extended periods. For example, stock prices have historically risen and
fallen in periodic cycles. In addition, the value of the Fund's investments
may decline if the particular companies the Fund invests in do not perform
well.
. Medium-Size Company Stock Risk. The stocks of medium-size companies may be
more susceptible to market downturns, and their prices may be more volatile
than those of larger companies.
. Foreign Securities Risk. Investments by the Fund in foreign securities may
experience greater and more rapid change in value than investments in U.S.
securities. Foreign securities are generally more volatile and less liquid
than U.S. securities, in part because of greater political and economic risks
and because there is less public information available about foreign
companies. Issuers of foreign securities are generally not subject to the
same degree of regulation as are U.S. issuers. The reporting, accounting and
auditing standards of foreign countries may differ, in some cases
significantly, from U.S. standards.
Performance
As of the date of this prospectus, the Fund has not completed a full calendar
year of operations. For this reason, a bar chart and performance table showing
performance information and information on the Fund's best and worst calendar
quarters is not provided in this prospectus.
7
<PAGE>
Future Technology Fund
Goal
The Fund's goal is to provide capital appreciation.
Principal Investment Strategies
The Fund pursues its goal by investing at least 65% of its assets in common
stocks of technology-related companies. Technology-related companies are
companies that develop, manufacture, or distribute technology, communications
and Internet-related products and services. The Fund may also invest in the
stocks of companies that should benefit commercially from technological
advances. The Fund invests in both established companies and in new or
unseasoned companies, including companies making initial public offerings.
The products and services provided by technology-related companies may include:
computer hardware and software, communications hardware and software,
semiconductors, business services, media and information services, and
Internet-related services.
In selecting stocks, the advisor will first identify attractive sectors within
the technology industry. The advisor will then focus on companies that it
believes are current industry leaders or leading companies in developing
sectors. Using fundamental analysis, the advisor will look for companies with:
. strong market share within their sector; and/or
. technologically superior products or services; and
. stable or improving revenue growth, earnings growth or order trends.
The Fund is "non-diversified" under the 1940 Act and may invest more of its
assets in fewer issuers than a "diversified" investment company.
Principal Risks
All investments carry some degree of risk which will affect the value of the
Fund's portfolio investments, its investment performance and the price of its
shares. As a result, you may lose money if you invest in the Fund.
The Fund is subject to the following principal investment risks:
. Stock Market Risk. The value of the securities in which the Fund invests may
decline in response to developments affecting individual companies and/or
general economic conditions. Price changes may be temporary or last for
extended periods. For example, stock prices have historically risen and
fallen in periodic cycles. In addition, the value of the Fund's investments
may decline if the particular companies the Fund invests in do not perform
well.
. Sector Risk. The Fund will concentrate its investments in the technology
industry. Market or economic factors impacting that industry could have a
major effect on the value of the Fund's investments. The value of stocks of
technology companies is particularly vulnerable to rapid changes in
technology product cycles, government regulation and competition. Technology
stocks, especially those of smaller, less-seasoned companies, tend to be more
volatile than the overall market.
. Non-Diversified Risk. The Fund may invest more of its assets in fewer issuers
than many other funds do, may be more susceptible to adverse developments
affecting any single issuer, and may be more susceptible to greater losses
because of these developments.
. Smaller Company Stock Risk. The stocks of small or medium size companies may
be more susceptible to market downturns, and their prices may be more
volatile than those of larger companies. Small company stocks typically are
traded in lower volume, and their issuers are subject to greater degrees of
changes in their earnings and prospects.
Performance
As of the date of this prospectus, the Fund has not completed a full calendar
year of operations. For this reason, a bar chart and performance table showing
performance information and information on the Fund's best and worst calendar
quarters is not provided in this prospectus.
8
<PAGE>
Growth Opportunities Fund
Goal
The Fund's goal is to provide long-term capital appreciation.
Principal Investment Strategies
The Fund pursues its goal by investing at least 65% of its assets in the equity
securities of companies with market capitalizations between $500 million and
$10 billion.
Its style, which focuses on both growth prospects and valuation, is known as
GARP (Growth at a Reasonable Price) and seeks to produce attractive returns
during various market environments.
The advisor chooses the Fund's investments by reviewing the earnings growth of
approximately 10,000 companies over the past three years and investing in
approximately 50 to 100 companies based on:
. superior earnings growth;
. financial stability;
. relative market value; and
. price changes compared to the S&Ps MidCap 400 Index.
Principal Risks
All investments carry some degree of risk which will affect the value of the
Fund's portfolio investments, its investment performance and the price of its
shares. As a result, you may lose money if you invest in the Fund.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.
The Fund is subject to the following principal investment risks:
. Stock Market Risk. The value of the securities in which the Fund invests may
decline in response to developments affecting individual companies and/or
general economic conditions. Price changes may be temporary or last for
extended periods. For example, stock prices have historically risen and
fallen in periodic cycles. In addition, the value of the Fund's investments
may decline if the particular companies the Fund invests in do not perform
well.
. Smaller Company Stock Risk. The stocks of small or medium-size companies may
be more susceptible to market downturns, and their prices may be more
volatile than those of larger companies. Small companies' stocks typically
are traded in a lower volume, and their issuers are subject to greater
degrees of changes in their earnings and prospects.
Performance
As of the date of this prospectus, the Fund has not completed a full calendar
year of operations. For this reason, a bar chart and performance table showing
performance information and information on the Fund's best and worst calendar
quarters is not provided in this prospectus.
9
<PAGE>
International Equity Fund
Goal
The Fund's goal is to provide long-term capital appreciation.
Principal Investment Strategies
The Fund pursues its goal by investing primarily in foreign securities
including American Depositary Receipts.
Under normal market conditions, at least 65% of the Fund's assets are invested
in equity securities in at least three foreign countries. The Fund mostly
invests in mature markets, but may also invest in emerging markets.
The Fund emphasizes companies with a market capitalization of at least $250
million. The Fund then invests in additional securities trading on either a
foreign or U.S. stock exchange, which are chosen through an economic modeling
process. This process seeks to identify those stocks that will have strong
relative performance in their home market.
At least once a quarter, the advisor creates a list of foreign securities and
American Depositary Receipts which the Fund may purchase based on the country
where the company is located, its competitive advantages, its past financial
record, its future prospects for growth and the market for its securities. The
advisor updates the securities list frequently (at least quarterly), adds new
securities to the list if they are eligible and sells securities not on the
updated securities list as soon as practicable.
After the advisor creates the securities list, it divides the list into two
sections. The first section is designed to provide broad coverage of
international markets. The second section increases exposure to securities that
the advisor expects will perform better than other stocks in their industry
sectors and their markets as a whole. When the advisor believes broader market
exposure will benefit the Fund, it will allocate up to 100% of the Fund's
assets in first section securities. When the advisor identifies strong
potential for specific securities to perform well, the Fund may invest up to
50% of its assets in second section securities.
Principal Risks
All investments carry some degree of risk which will affect the value of the
Fund's portfolio investments, its investment performance and the price of its
shares. As a result, you may lose money if you invest in the Fund.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.
The Fund is subject to the following principal investment risks:
. Stock Market Risk. The value of the securities in which the Fund invests may
decline in response to developments affecting individual companies and/or
general economic conditions. Price changes may be temporary or last for
extended periods. For example, stock prices have historically risen and
fallen in periodic cycles. In addition, the value of the Fund's investments
may decline if particular companies the Fund invests in do not perform well.
. Foreign Securities Risk. Investments by the Fund in foreign securities may
experience greater and more rapid change in value than investments in U.S.
securities. Foreign securities are generally more volatile and less liquid
than U.S. securities, in part because of greater political and economic risks
and because there is less public information available about foreign
companies. Issuers of foreign securities are generally not subject to the
same degree of regulation as are U.S. issuers. The reporting, accounting and
auditing standards of foreign countries may differ, in some cases
significantly, from U.S. standards.
. Currency Risk. A Fund that invests in foreign securities denominated in
foreign currencies may also be subject to currency risk. This is the risk of
loss because a decline in the value of foreign currencies relative to the
U.S. dollar will reduce the value of a Fund's portfolio securities
denominated in those currencies.
10
<PAGE>
Performance
The bar chart and table below give some indication of the risk of an investment
in the Fund. The bar chart shows the Fund's performance for each calendar year
since inception. The table shows how the Fund's average annual total returns
for different calendar periods over the life of the Fund compare to those of a
broad based securities market index.
When you consider this information, please remember the Fund's performance in
past years is not necessarily an indication of how the Fund will perform in the
future.
<TABLE>
<CAPTION>
Average Annual Total Return
(for the periods ended December 31, 1998)
----------------------------------
Since
5 Inception
1 Year Years (12/1/91)
----------------------------------
<S> <C> <C> <C>
Class Y 13.37% 6.22% 9.56%
FT/S&P Actuaries
World Index
ex U.S.* 16.17% 8.33% 8.01%**
</TABLE>
--------
* The FT/S&P Actuaries World
Index ex U.S. is an unmanaged
index used to portray global
equity markets excluding the
U.S. The Index is weighted
based on the market
capitalization of those stocks
selected to represent each
country and includes gross
represent each country and
includes gross reinvestment of
dividends.
** Index return from 11/30/91.
International Equity Fund Class Y
Total Return
(per calendar year)
1992 1.29%
1993 32.51%
1994 -8.35%
1995 14.03%
1996 10.41%
1997 3.37%
1998 13.37%
Year-to-date through September 30, 1999: 15.28%
<TABLE>
<S> <C> <C>
Best Quarter: Q4 1998 18.63%
Worst Quarter: Q3 1998 (16.69)%
</TABLE>
. Emerging Markets Risk. Investments by the Fund in emerging market countries
heightens the risks presented by investing in foreign securities and
currencies and may result in loss to the Fund. Numerous emerging countries
have recently experienced serious, and potentially continuing, economic and
political problems. Stock markets in many emerging countries are relatively
small and risky. Foreigners are often limited in their ability to invest in,
and withdraw assets from, these markets. Additional restrictions may be
imposed under emergency conditions.
. Small Company Stock Risk. The stocks of small companies may have more risks
than those of larger companies. Small companies often have narrower markets
and more limited managerial and financial resources than larger, more
established companies. As a result, they may be more sensitive to changing
economic conditions, which could increase the volatility of a Fund's
portfolio. In addition, small company stocks typically are traded in lower
volume making them more difficult to sell.
11
<PAGE>
Micro-Cap Equity Fund
Goal
The Fund's goal is to provide capital appreciation.
Principal Investment Strategies
The Fund pursues its goal by investing at least 65% of its assets in equity
securities of micro-capitalization companies. Micro-capitalization companies
means companies having market capitalizations within the range of the companies
in the Wilshire Micro-Cap Index. As of the date of this prospectus, such
capitalizations do not exceed approximately $300 million, which is considerably
less than the market capitalization of S&P 500 companies.
The Fund attempts to provide investors with potentially higher returns than a
fund that invests primarily in larger, more established companies. Since micro-
capitalization companies are generally not as well known to investors and have
less of an investor following than larger companies, they may provide higher
returns due to inefficiencies in the marketplace.
The advisor will choose companies that:
. present the ability to grow significantly over the next several years;
. may benefit from changes in technology, regulations and industry sector
trends; and
. are still in the developmental stage and may have limited product lines.
There is no limit on the length of operating history for the companies in which
the Fund may invest. The Fund may also invest in equity securities of larger
capitalization companies. The Fund may invest without limit in initial public
offerings of micro-capitalization companies.
Principal Risks
All investments carry some degree of risk which will affect the value of the
Fund's portfolio investments, its investment performance and the price of its
shares. As a result, you may lose money if you invest in the Fund.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.
The Fund is subject to the following principal investment risks:
. Stock Market Risk. The value of the securities in which the Fund invests may
decline in response to developments affecting individual companies and/or
general economic conditions. Price changes may be temporary or last for
extended periods. For example, stock prices have historically risen and
fallen in periodic cycles. In addition, the value of the Fund's investments
may decline if the particular companies the Fund invests in do not perform
well.
. Small Company Stock Risk. The stocks of small companies may have more risks
than those of larger companies. Small companies often have narrower markets
and more limited managerial and financial resources than larger, more
established companies. As a result, they may be more sensitive to changing
economic conditions, which could increase the volatility of a Fund's
portfolio. In addition, small company stocks typically are traded in lower
volume making them more difficult to sell.
12
<PAGE>
Performance
The bar chart and table below give some indication of the risk of an investment
in the Fund. The bar chart shows the Fund's performance for each calendar year
since inception. The table shows how the Fund's average annual total returns
for different calendar periods over the life of the Fund compare to those of a
broad based securities market index.
When you consider this information, please remember the Fund's performance in
past years is not necessarily an indication of how the Fund will perform in the
future.
Average Annual Total Return
(for the periods ended December 31,
1998)
<TABLE>
------------------------
<CAPTION>
Since Inception
1 Year (12/26/96)
------------------------
<S> <C> <C>
Class Y (5.58)% 27.79%
Wilshire Micro-
Cap Index* (7.43)% 7.23%**
</TABLE>
--------
* The Wilshire Micro-Cap Index
consists of all issues in the
Wilshire 5000 Index that rank
below the 2,501st company based
on size. The Wilshire 5000 Index
contains all publicly traded
U.S. stocks, but excludes REITS
and limited partnerships.
** Index return from 12/31/96.
Micro-Cap Equity Fund Class Y
Total Return
(per calendar year)
1997 71.60%
1998 -5.58%
Year-to-date through September 30, 1999: 18.33%
<TABLE>
<S> <C> <C>
Best Quarter: Q3 1997 40.76%
Worst Quarter: Q3 1998 (28.33)%
</TABLE>
13
<PAGE>
Multi-Season Growth Fund
Goal
The Fund's goal is to provide long-term capital appreciation. This goal is
"fundamental" and cannot be changed without shareholder approval.
Principal Investment Strategies
The Fund pursues its goal by investing at least 65% of its assets in equity
securities. The Fund generally invests in equity securities of companies with
market capitalizations over $1 billion. Its style, which focuses on both growth
prospects and valuation, is known as GARP (Growth at a Reasonable Price) and
seeks to produce attractive returns during various market environments.
The advisor chooses the Fund's investments by reviewing the earnings growth of
approximately 5,500 companies over the past five years and investing in
approximately 50 to 100 companies based on:
. superior earnings growth;
. financial stability;
. relative market value; and
. price changes compared to the S&P 500.
Principal Risks
All investments carry some degree of risk which will affect the value of the
Fund's portfolio investments, its investment performance and the price of its
shares. As a result, you may lose money if you invest in the Fund.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.
The Fund is subject to the following principal investment risk:
. Stock Market Risk. The value of the securities in which the Fund invests may
decline in response to developments affecting individual companies and/or
general economic conditions. Price changes may be temporary or last for
extended periods. For example, stock prices have historically risen and
fallen in periodic cycles. In addition, the value of the Fund's investments
may decline if the particular companies the Fund invests in do not perform
well.
14
<PAGE>
Performance
The bar chart and table below give some indication of the risk of an investment
in the Fund. The bar chart shows the Fund's performance for each calendar year
since inception. The table shows how the Fund's average annual total returns
for different calendar periods over the life of the Fund compare to those of a
broad based securities market index.
When you consider this information, please remember the Fund's performance in
past years is not necessarily an indication of how the Fund will perform in the
future.
Average Annual Total Return
(for the periods ended December 31,
1998)
<TABLE>
-----------------------------------------
<CAPTION>
Since
Inception
1 Year 5 Years (8/16/93)
-----------------------------------------
<S> <C> <C> <C>
Class Y 15.37% 19.07% 18.67%
S&P 500 Index* 28.57% 24.06% 22.75%**
</TABLE>
--------
* Standard & Poor's Composite 500
Index is an unmanaged index of
common stock prices.
** Index return from 8/31/93.
Multi-Season Growth Fund Class Y
Total Return
(per calendar year)
1994 -2.17%
1995 32.59%
1996 22.58%
1997 30.49%
1998 15.37%
Year-to-date through September 30, 1999: 1.22%
<TABLE>
<S> <C> <C>
Best Quarter: Q4 1998 19.83%
Worst Quarter: Q3 1998 (14.13)%
</TABLE>
15
<PAGE>
NetNet Fund
Goal
The Fund's goal is to provide long-term capital appreciation.
Principal Investment Strategies
The Fund pursues its goal by investing primarily in companies engaged in the
Internet and Intranet related business.
Under normal market conditions, the Fund will invest at least 65% of its total
assets in equity securities of companies that 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 the
Internet or 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.
There is no limit on the market capitalization of the companies the Fund may
invest in, or in the length of operating history for the companies. The Fund
may invest without limit in initial public offerings.
The Fund may also invest in foreign securities and purchase and sell options.
Principal Risks
All investments carry some degree of risk which will affect the value of the
Fund's portfolio investments, its investment performance and the price of its
shares. As a result, you may lose money if you invest in the Fund.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.
The Fund is subject to the following principal investment risks:
. Stock Market Risk. The value of the securities in which the Fund invests may
decline in response to developments affecting individual companies and/or
general economic conditions. Price changes may be temporary or last for
extended periods. For example, stock prices have historically risen and
fallen in periodic cycles. In addition, the value of the Fund's investments
may decline if the particular companies the Fund invests in do not perform
well.
. Sector Risk. The Fund will invest primarily in companies engaged in Internet
and Intranet related activities. The value of such companies is particularly
vulnerable to rapidly changing technology, extensive government regulation
and relatively high risks of obsolescence caused by scientific and
technological advances. The value of the Fund's shares may fluctuate more
than shares of a fund investing in a broader range of industries.
. Smaller Company Stock Risk. The stocks of small or medium-size companies may
be more susceptible to market downturns, and their prices may be more
volatile than those of larger companies. Small companies often have narrower
markets and more limited managerial and financial resources than larger, more
established companies. In addition, small company stocks typically are traded
in lower volume, and their issuers are subject to greater degrees of changes
in their earnings and prospects.
. Derivatives Risk. The Fund may suffer a loss from its use of options, which
are forms of derivatives. The primary risk with many derivatives is that they
can amplify a gain or loss, potentially earning or losing substantially more
money than the actual cost of the derivative instrument.
. Foreign Securities Risk. Investments by the Fund in foreign securities
present risks of loss in
16
<PAGE>
addition to those presented by
investments in U.S. securities.
Foreign securities are generally
more volatile and less liquid than
U.S. securities, in part because of
greater political and economic
risks and because there is less
public information available about
foreign companies. Issuers of
foreign securities are generally
not subject to the same degree of
regulation as are U.S. issuers. The
reporting, accounting and auditing
standards of foreign countries may
differ, in some cases
significantly, from U.S. standards.
Performance
The bar chart and table below give some indication of the risk of an investment
in the Fund. The bar chart shows the Fund's performance for each calendar year
since inception. The table shows how the Fund's average annual total returns
for different calendar periods over the life of the Fund compare to those of a
broad based securities market index.
When you consider this information, please remember the Fund's performance in
past years is not necessarily an indication of how the Fund will perform in the
future.
<TABLE>
<CAPTION>
Average Annual Total Return
(for the periods ended December 31, 1998)
----------------------------------------
Since
Inception
1 Year (6/1/98)
----------------------------------------
<S> <C> <C>
Class Y 98.48% 66.66%
Russell 2000 Index* (2.54)% 12.03%**
</TABLE>
--------
*The Russell 2000 Index is a
capitalization weighted total
return index which is comprised
of 2,000 of the smallest
capitalized U.S. domiciled
companies whose stock is traded
in the United States on the New
York Stock Exchange, American
Stock Exchange and the NASDAQ.
**Index return from 5/31/98.
NetNet Fund Class Y
Total Return
(per calendar year)
1997 30.43%
1998 98.48%
Year-to-date through September 30, 1999: 53.82%
<TABLE>
<S> <C> <C>
Best Quarter: Q4 1998 58.87%
Worst Quarter: Q1 1997 (19.15)%
</TABLE>
17
<PAGE>
Real Estate Equity Investment Fund
Goal
The Fund's goal is to provide both capital appreciation and current income.
This goal is "fundamental" and cannot be changed without shareholder approval.
Principal Investment Strategies
The Fund pursues its goal by investing, under normal market conditions, at
least 65% of its total assets in equity securities of U.S. companies which are
principally engaged in the real estate industry.
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. The Fund will not own real estate directly.
The advisor selects companies exhibiting steady cash flows, financial
stability, quality management and reasonable valuations.
The companies in which the Fund primarily invests include:
. equity real estate investment trusts ("REITS");
. brokers, home builders and real estate developers;
. companies with substantial real estate holdings (for example, paper and
lumber producers, hotels and entertainment companies);
. manufacturers and distributors of building supplies;
. mortgage REITS; and
. financial institutions which issue or service mortgages.
In addition, the Fund may invest in REITS only if they are traded on a
securities exchange or NASDAQ.
Principal Risks
All investments carry some degree of risk which will affect the value of the
Fund's portfolio investments, its investment performance and the price of its
shares. As a result, you may lose money if you invest in the Fund.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.
The Fund is subject to the following principal investment risks:
. Stock Market Risk. The value of the securities in which the Fund invests may
decline in response to developments affecting individual companies and/or
general economic conditions. Price changes may be temporary or last for
extended periods. For example, stock prices have historically risen and
fallen in periodic cycles. In addition, the value of the Fund's investments
may decline if particular companies the Fund invests in do not perform well.
. Sector Risk. The Fund will concentrate its investments in the real estate
industry sector. Adverse economic, business or political developments
affecting that industry sector could have a major effect on the value of the
Fund's investments.
18
<PAGE>
Performance
The bar chart and table below give some indication of the risk of an investment
in the Fund. The bar chart shows the Fund's performance for each calendar year
since inception. The table shows how the Fund's average annual total returns
for different calendar periods over the life of the Fund compare to those of a
broad based securities market index.
When you consider this information, please remember the Fund's performance in
past years is not necessarily an indication of how the Fund will perform in the
future.
Average Annual Total Return
(for the periods ended December 31,
1998)
<TABLE>
----------------
<CAPTION>
Since Inception
1 Year (10/3/94)
----------------
<S> <C> <C>
Class Y (16.91)% 11.16%
NAREIT* (17.51)% 11.99%**
</TABLE>
--------
*National Association of Real Estate
Investment Trusts ("NAREIT") are
equity real estate investment
trusts which are defined as those
which derive more than 75% of
their income from equity
investments in real estate
assets. The NAREIT equity index
includes all tax qualified real
estate investment trusts listed
on the New York Stock Exchange,
the American Stock Exchange or
the NASDAQ National Market
System.
**Index return from 9/30/94.
Real Estate Equity Investment Fund
Class Y
Total Return
(per calendar year)
1995 11.98%
1996 34.43%
1997 22.40%
1998 -16.91%
Year-to-date through September 30,
1999: (4.71)%
<TABLE>
<S> <C> <C>
Best Quarter: Q4 1996 17.88%
Worst Quarter: Q3 1998 (9.38)%
</TABLE>
19
<PAGE>
Small-Cap Value Fund
Goal
The Fund's goal is to provide long-term capital appreciation.
Principal Investment Strategies
The Fund pursues its goal by investing, under normal market conditions, at
least 65% of its assets in equity securities of small capitalization companies.
Small capitalization companies means companies with market capitalizations
within the range of the companies in the Russell 2000 Index. As of the date of
this prospectus, such capitalizations do not exceed approximately $1.5 billion,
which is less than the market capitalization of S&P 500 companies.
The Fund attempts to provide investors with potentially higher returns than a
fund that invests primarily in larger, more established companies. Since small
companies are generally not as well known to investors and have less of an
investor following than larger companies, they may provide higher returns due
to inefficiencies in the marketplace.
The Fund will usually invest in equity securities of companies that the advisor
believes can be purchased at a price significantly below its inherent value. A
company's equity securities may be undervalued because the company is
temporarily overlooked or out of favor due to general economic conditions, a
market decline, industry conditions or developments affecting the particular
company.
In addition to valuation, the advisor considers these factors, among others, in
choosing companies:
. a stable or improving earnings record;
. sound finances;
. above-average growth prospects;
. participation in a fast growing industry;
. strategic niche position in a specialized market; and
. adequate capitalization.
The Fund may invest in equity securities of larger capitalization companies.
Principal Risks
All investments carry some degree of risk which will affect the value of the
Fund's portfolio investments, its investment performance and the price of its
shares. As a result, you may lose money if you invest in the Fund.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.
The Fund is subject to the following principal investment risks:
. Stock Market Risk. The value of the securities in which the Fund invests may
decline in response to developments affecting individual companies and/or
general economic conditions. Price changes may be temporary or last for
extended periods. For example, stock prices have historically risen and
fallen in periodic cycles. In addition, the value of the Fund's investments
may decline if the particular companies the Fund invests in do not perform
well.
. Small Company Stock Risk. The stocks of small companies may have more risks
than those of larger companies. Small companies often have narrower markets
and more limited managerial and financial resources than larger, more
established companies. As a result, they may be more sensitive to changing
economic conditions, which could increase the volatility of a Fund's
portfolio. In addition, small company stocks typically are traded in lower
volume making them more difficult to sell.
20
<PAGE>
Performance
The bar chart and table below give some indication of the risk of an investment
in the Fund. The bar chart shows the Fund's performance for each calendar year
since inception. The table shows how the Fund's average annual total returns
for different calendar periods over the life of the Fund compare to those of a
broad based securities market index.
When you consider this information, please remember the Fund's performance in
past years is not necessarily an indication of how the Fund will perform in the
future.
<TABLE>
<CAPTION>
Average Annual Total Return
(for the periods ended December 31,
1998)
-----------------------
Since
Inception
1 Year (12/26/96)
-----------------------
<S> <C> <C>
Class Y (6.46)% 16.57%
Russell 2000 Index* (2.54)% 9.20%**
</TABLE>
--------
* The Russell 2000 Index is a
capitalization weighted total
return index which is comprised
of 2,000 of the smallest
capitalized U.S. domiciled
companies whose stock is traded
in the United States on the New
York Stock Exchange, American
Stock Exchange and the NASDAQ.
** Index return from 12/31/96.
Small-Cap Value Fund Class Y
Total Return
(per calendar year)
1997 44.49%
1998 -6.46%
Year-to-date through September 30, 1999: (8.77)%
<TABLE>
<S> <C> <C>
Best Quarter: Q3 1997 22.59%
Worst Quarter: Q3 1998 (19.92)%
</TABLE>
21
<PAGE>
Small Company Growth Fund
Goal
The Fund's goal is to provide long-term capital appreciation.
Principal Investment Strategies
The Fund pursues its goal by investing, under normal market conditions, at
least 65% of its assets in equity securities of small capitalization companies
with market capitalizations below $1.5 billion, which is less than the market
capitalization of S&P 500 companies.
The Fund attempts to provide investors with potentially higher returns than a
fund that invests primarily in larger, more established companies. Since
smaller capitalization companies are generally not as well-known to investors
and have less of an investor following than larger companies, they may provide
higher returns due to inefficiencies in the marketplace.
The advisor considers these factors, among others, in choosing companies:
. above-average growth prospects;
. participation in a fast-growing industry;
. strategic niche position in a specialized market; and
. adequate capitalization.
Principal Risks
All investments carry some degree of risk which will affect the value of the
Fund's portfolio investments, its investment performance and the price of its
shares. As a result, you may lose money if you invest in the Fund.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.
The Fund is subject to the following principal investment risks:
. Stock Market Risk. The value of the securities in which the Fund invests may
decline in response to developments affecting individual companies and/or
general economic conditions. Price changes may be temporary or last for
extended periods. For example, stock prices have historically risen and
fallen in periodic cycles. In addition, the value of the Fund's investments
may decline if the particular companies the Fund invests in do not perform
well.
. Small Company Stock Risk. The stocks of small companies may have more risks
than those of larger companies. Small companies often have narrower markets
and more limited managerial and financial resources than larger, more
established companies. As a result, they may be more sensitive to changing
economic conditions, which could increase the volatility of a Fund's
portfolio. In addition, small company stocks typically are traded in lower
volume making them more difficult to sell.
22
<PAGE>
Performance
The bar chart and table below give some indication of the risk of an investment
in the Fund. The bar chart shows the Fund's performance for each calendar year
since inception. The table shows how the Fund's average annual total returns
for different calendar periods over the life of the Fund compare to those of a
broad based securities market index.
When you consider this information, please remember the Fund's performance in
past years is not necessarily an indication of how the Fund will perform in the
future.
<TABLE>
<CAPTION>
Average Annual Total Return
(for the periods ended December 31, 1998)
----------------------------------
Since
Inception
1 Year 5 Years (12/1/91)
----------------------------------
<S> <C> <C> <C>
Class Y (7.23)% 15.15% 16.55%
Russell 2000 Index* (2.54)% 11.86% 13.76%**
</TABLE>
--------
* The Russell 2000 Index is a
capitalization weighted total
return index which is comprised
of 2,000 of the smallest
capitalized U.S. domiciled
companies whose stock is traded
in the United States on the New
York Stock Exchange, American
Stock Exchange and the NASDAQ.
** Index return from 11/30/91.
Small Company Growth Fund Class Y
Total Return
(per calendar year)
1992 17.80%
1993 13.14%
1994 -2.53%
1995 30.01%
1996 37.17%
1997 25.55%
1998 -7.23%
Year-to-date through September 30, 1999: (16.16)%
<TABLE>
<S> <C> <C>
Best Quarter: Q2 1997 24.09%
Worst Quarter: Q3 1998 (21.02)%
</TABLE>
23
<PAGE>
Framlington Emerging Markets Fund
Goal
The Fund's goal is to provide long-term capital appreciation.
Principal Investment Strategies
The Fund pursues its goal by investing at least 65% of its assets in equity
securities of companies in emerging market countries, as defined by the World
Bank, the International Finance Corporation, the United Nations or the European
Bank for Reconstruction and Development.
The sub-advisor selects companies on a "bottom-up approach." This strategy is
the search for outstanding performance of individual companies before
considering the impact of economic trends. The companies may be identified from
research reports, stock screens or personal knowledge of products and services.
A company will be considered to be in an emerging market country if:
. the company is organized under the laws of, or has a principal office in, an
emerging market country;
. the company's stock is traded primarily in an emerging market country;
. most of the company's assets are in an emerging market country; or
. most of the company's revenues or profits come from goods produced or sold,
investments made or services performed in an emerging market country.
The Fund may also invest in foreign securities of companies located in
countries with mature markets.
Principal Risks
All investments carry some degree of risk which will affect the value of the
Fund's portfolio investments, its investment performance and the price of its
shares. As a result, you may lose money if you invest in the Fund.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.
The Fund is subject to the following principal investment risks:
. Stock Market Risk. The value of the securities in which the Fund invests may
decline in response to developments affecting individual companies and/or
general economic conditions. Price changes may be temporary or last for
extended periods. For example, stock prices have historically risen and
fallen in periodic cycles. In addition, the value of the Fund's investments
may decline if the particular companies the Fund invests in do not perform
well.
. Foreign Securities Risk. Investments by the Fund in foreign securities may
experience greater and more rapid change in value than investments in U.S.
securities. Foreign securities are generally more volatile and less liquid
than U.S. securities, in part because of greater political and economic risks
and because there is less public information available about foreign
companies. Issuers of foreign securities are generally not subject to the
same degree of regulation as are U.S. issuers. The reporting, accounting and
auditing standards of foreign countries may differ, in some cases
significantly, from U.S. standards.
. Currency Risk. A Fund that invests in foreign securities denominated in
foreign currencies may also be subject to currency risk. This is the risk of
loss because a decline in the value of foreign currencies relative to the
U.S. dollar will reduce the value of a Fund's portfolio securities
denominated in those currencies.
. Emerging Markets Risk. A Fund that invests in foreign securities of issuers
in emerging market countries are subject to emerging markets risk. Investing
in emerging market countries heightens the risks presented by investing in
foreign securities and currencies and may result in loss to the Fund.
Numerous emerging countries have recently experienced serious, and
potentially continuing, economic and political problems.
24
<PAGE>
Stock markets in many emerging countries are relatively small and risky.
Foreigners are often limited in their ability to invest in, and withdraw
assets from, these markets. Additional restrictions may be imposed under
emergency conditions.
. Medium-Size Company Stock Risk. The stocks of medium-size companies may be
more susceptible to market downturns, and their prices may be more volatile
than those of larger companies.
Performance
The bar chart and table below give some indication of the risk of an investment
in the Fund. The bar chart shows the Fund's performance for each calender year
since inception. The table shows how the Fund's average annual total returns
for different calendar periods over the life of the Fund compare to those of a
broad based securities market index.
When you consider this information, please remember the Fund's performance in
past years is not necessarily an indication of how the Fund will perform in the
future.
<TABLE>
<CAPTION>
Average Annual Total Return
(for the periods ended December 31,
1998)
-------------------------
Since Inception
1 Year (12/31/96)
-------------------------
<S> <C> <C>
Class Y (27.27)% (9.31)%
MSCI Emerging
Markets Index* (25.34)% (18.75)%**
</TABLE>
--------
* Morgan Stanley (MSCI) Emerging
Market Index is an unmanaged
index used to portray the
pattern of common stock price
movement in Europe, Australia,
new Zealand and other countries
in the Far East.
** Index return from 12/31/96.
Framlington Emerging Markets Fund
Class Y
Total Return
(per calendar year)
1997 13.06%
1998 -27.27%
Year-to-date through September 30, 1999: 30.19%
<TABLE>
<S> <C> <C>
Best Quarter: Q2 1997 17.01%
Worst Quarter: Q3 1998 (21.56)%
</TABLE>
25
<PAGE>
Framlington Global Financial Services Fund
Goal
The Fund's goal is to provide long-term capital appreciation.
Principal Investment Strategies
The Fund pursues its goal by investing at least 65% of its assets in equity
securities of U.S. and foreign companies which are principally engaged in the
financial services industries and companies providing services primarily within
the financial services industries. The Fund focuses specifically on companies
which are likely to benefit from growth or consolidation in the financial
services industries.
Examples of companies in the financial services industry are:
. commercial, industrial and investment banks;
. savings and loan associations;
. brokerage companies;
. consumer and industrial finance companies;
. real estate and leasing companies;
. insurance companies; and
. holding companies for each of the above.
A company is "principally engaged" in the financial services industry if at
least 50% of its gross income, net sales or net profits comes from activities
in the financial services industry or if the company dedicates more than 50% of
its assets to the production of revenues from the financial services industry.
The companies are selected by the "bottom-up approach." This strategy is the
search for outstanding performance of individual companies before considering
the impact of economic trends. The sub-advisor evaluates companies, analyzing a
number of factors, including the growth prospects of a financial services
company relative to the price of its stock.
The sub-advisor allocates assets among countries based on:
. its analysis of the trends in the financial services industry in particular
regions;
. the relative valuation of financial services companies in different regions;
and
. its assessment of the prospects for a particular equity market and its
currency.
Under normal market conditions, the Fund invests at least 65% of its assets in
at least three different countries, including the United States. The Fund may
invest in companies located in countries with mature markets and in those with
emerging markets.
The Fund may also enter into forward currency exchange contracts.
Principal Risks
All investments carry some degree of risk which will affect the value of the
Fund's portfolio investments, its investment performance and the price of its
shares. As a result, you may lose money if you invest in the Fund.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.
The Fund is subject to the following principal investment risks:
. Stock Market Risk. The value of the securities in which the Fund invests may
decline in response to developments affecting individual companies and/or
general economic conditions. Price changes may be temporary or last for
extended periods. For example, stock prices have historically risen and
fallen in periodic cycles. In addition, the value of the Fund's investments
may decline if the particular companies the Fund invests in do not perform
well.
. Sector Risk. The Fund will concentrate its investments in the financial
services industries. Adverse economic, business or political developments
affecting that industry sector could have a major effect on the value of the
Fund's investments.
. Medium-Size Company Stock Risk. The stocks of medium-size companies may be
more susceptible to market downturns, and their prices may be more volatile
than those of larger companies.
26
<PAGE>
. Foreign Securities Risk. Investments by the Fund in foreign securities may
experience greater and more rapid change in value than investments in U.S.
securities. Foreign securities are generally more volatile and less liquid
than U.S. securities, in part because of greater political and economic risks
and because there is less public information available about foreign
companies. Issuers of foreign securities are generally not subject to the
same degree of regulation as are U.S. issuers. The reporting, accounting and
auditing standards of foreign countries may differ, in some cases
significantly, from U.S. standards.
. Currency Risk. A Fund that invests in foreign securities denominated in
foreign currencies may also be subject to currency risk. This is the risk of
loss because a decline in the value of foreign currencies relative to the
U.S. dollar will reduce the value of a Fund's portfolio securities
denominated in those currencies.
. Derivatives Risk. The Fund may suffer a loss from the Fund's use of forward
currency exchange contracts and other forms of derivative instruments. The
primary risk with many derivatives is that they can amplify a gain or loss,
potentially earning or losing substantially more money than the actual cost
of the derivative instrument.
Performance
As of the date of this prospectus, the Fund has not completed a full calendar
year of operations. For this reason, a bar chart and performance table showing
performance information and information on the Fund's best and worst calendar
quarters is not provided in this prospectus.
27
<PAGE>
Framlington Healthcare Fund
Goal
The Fund's goal is to provide long-term capital appreciation.
Principal Investment Strategies
The Fund pursues its goal by investing in equity securities of companies
providing healthcare and medical services and products worldwide. Currently,
most of these companies are located in the United States.
The Fund will invest in:
. pharmaceutical producers;
. biotechnology firms;
. medical device and instrument manufacturers;
. distributors of healthcare products;
. healthcare providers and managers; and
. other healthcare service companies.
Under normal market conditions, the Fund will invest at least 65% of its assets
in healthcare companies, which are companies for which at least 50% of sales,
earnings or assets arise from or are dedicated to health services or medical
technology activities.
The sub-advisor selects companies on a "bottom-up approach." This strategy is
the search for outstanding performance of individual companies before
considering the impact of economic trends. The sub-advisor evaluates companies,
analyzing a number of factors, including the growth prospects of a healthcare
company relative to the price of its stock and companies that are at the
leading edge of new developments in the healthcare industry.
The Fund's investments may include foreign securities of companies located in
countries with mature markets.
Principal Risks
All investments carry some degree of risk which will affect the value of the
Fund's portfolio investments, its investment performance and the price of its
shares. As a result, you may lose money if you invest in the Fund.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.
The Fund is subject to the following principal investment risks:
. Stock Market Risk. The value of the securities in which the Fund invests may
decline in response to developments affecting individual companies and/or
general economic conditions. Price changes may be temporary or last for
extended periods. For example, stock prices have historically risen and
fallen in periodic cycles. In addition, the value of the Fund's investments
may decline if the particular companies the Fund invests in do not perform
well.
. Sector Risk. The Fund will concentrate its investments in the healthcare
industry. Adverse economic, business or political developments affecting that
industry sector could have a major effect on the value of the Fund's
investments.
. Medium-Size Company Stock Risk. The stocks of medium-size companies may be
more susceptible to market downturns, and their prices may be more volatile
than those of larger companies.
. Foreign Securities Risk. Investments by the Fund in foreign securities may
experience greater and more rapid change in value than investments in U.S.
securities. Foreign securities are generally more volatile and less liquid
than U.S. securities, in part because of greater political and economic risks
and because there is less public information available about foreign
companies. Issuers of foreign securities are generally not subject to the
same degree of regulation as are U.S. issuers. The reporting, accounting and
auditing standards of foreign countries may differ, in some cases
significantly, from U.S. standards.
. Currency Risk. A Fund that invests in foreign securities denominated in
foreign currencies may also be subject to currency risk. This is the risk of
loss because a decline in the value of foreign currencies relative to the
U.S. dollar will reduce the value of a Fund's portfolio securities
denominated in those currencies.
28
<PAGE>
Performance
The bar chart and table below give some indication of the risk of an investment
in the Fund. The bar chart shows the Fund's performance for each calendar year
since inception. The table shows how the Fund's average annual total returns
for different calendar periods over the life of the Fund compare to those of a
broad based securities market index.
When you consider this information, please remember the Fund's performance in
past years is not necessarily an indication of how the Fund will perform in the
future.
Average Annual Total Return
(for the periods ended December
31, 1998)
<TABLE>
---------------------------------
<CAPTION>
Since Inception
1 Year (12/31/96)
---------------------------------
<S> <C> <C>
Class Y 1.26% 8.56%
S&P Healthcare Composite* 44.22% 43.97%**
</TABLE>
--------
* The S&P Healthcare Composite is
a capitalization-weighted index
of all of the stocks in the S&P
500 that are involved in the
business of health care related
products or services.
** Index return from 12/31/96.
Framlington Healthcare Fund Class Y
Total Return
(per calendar year)
1997 16.40%
1998 1.26%
Year-to-date through September 30, 1999: (3.34)%
<TABLE>
<S> <C> <C>
Best Quarter: Q4 1998 20.15%
Worst Quarter: Q3 1998 (17.15)%
</TABLE>
29
<PAGE>
Framlington International
Growth Fund
Goal
The Fund's goal is to provide long-term capital appreciation.
Principal Investment Strategies
The Fund pursues its goal by investing at least 65% of its assets in equity
securities of issuers located in at least three foreign countries.
The sub-advisor will choose companies that demonstrate:
. above-average profitability;
. high quality management; and
. the ability to grow significantly in their countries.
The sub-advisor selects companies on a "bottom-up approach." This strategy is
the search for outstanding performance of individual companies before
considering the impact of economic trends. The sub-advisor generally selects
stocks of companies that the sub-advisor believes can grow their earnings
faster than the market.
The Fund may invest in companies located in countries with mature markets and
in those with emerging markets.
Principal Risks
All investments carry some degree of risk which will affect the value of the
Fund's portfolio investments, its investment performance and the price of its
shares. As a result, you may lose money if you invest in the Fund.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.
The Fund is subject to the following principal investment risks:
. Stock Market Risk. The value of the securities in which the Fund invests may
decline in response to developments affecting individual companies and/or
general economic conditions. Price changes may be temporary or last for
extended periods. For example, stock prices have historically risen and
fallen in periodic cycles. In addition, the value of the Fund's investments
may decline if the particular companies the Fund invests in do not perform
well.
. Medium-Size Company Stock Risk. The stocks of medium-size companies may be
more susceptible to market downturns, and their prices may be more volatile
than those of larger companies.
. Foreign Securities Risk. Investments by the Fund in foreign securities may
experience greater and more rapid change in value than investments in U.S.
securities. Foreign securities are generally more volatile and less liquid
than U.S. securities, in part because of greater political and economic
risks and because there is less public information available about foreign
companies. Issuers of foreign securities are generally not subject to the
same degree of regulation as are U.S. issuers. The reporting, accounting and
auditing standards of foreign countries may differ, in some cases
significantly, from U.S. standards.
. Currency Risk. A Fund that invests in foreign securities denominated in
foreign currencies may also be subject to currency risk. This is the risk of
loss because a decline in the value of foreign currencies relative to the
U.S. dollar will reduce the value of a Fund's portfolio securities
denominated in those currencies.
. Emerging Markets Risk. A Fund that invests in foreign securities of issuers
in emerging market countries are subject to emerging markets risk. Investing
in emerging market countries heightens the risks presented by investing in
foreign securities and currencies and may result in loss to the Fund.
Numerous emerging countries have recently experienced serious, and
potentially continuing, economic and political problems. Stock markets in
many emerging countries are relatively small and risky. Foreigners are often
limited in their ability to invest in, and withdraw assets from, these
markets. Additional restrictions may be imposed under emergency conditions.
30
<PAGE>
Performance
The bar chart and table below give some indication of the risk of an investment
in the Fund. The bar chart shows the Fund's performance for each calendar year
since inception. The table shows the Fund's average annual total returns for
different calendar periods over the life of the Fund compare to those of a
broad based securities market index.
When you consider this information, please remember the Fund's performance in
past years is not necessarily an indication of how the Fund will perform in the
future.
Average Annual Total Return
(for the periods ended December
31, 1998)
<TABLE>
------------------
<CAPTION>
Since
Inception
1 Year (12/31/96)
------------------
<S> <C> <C>
Class Y 15.64% 8.71%
MSCI EAFE Index* 20.33% 10.82%**
</TABLE>
--------
* Morgan Stanley (MSCI) EAFE
Index is an unmanaged index
used to portray the pattern of
common stock price movement in
Europe, Australia, New Zealand
and countries in the Far East.
** Index return from 12/31/96.
Framlington International Growth Fund
Class Y
Total Return
(per calendar year)
1997 2.22%
1998 15.64%
Year-to-date through September 30, 1999: 15.41%
<TABLE>
<S> <C> <C>
Best Quarter: Q4 1998 19.25%
Worst Quarter: Q3 1998 (17.50)%
</TABLE>
31
<PAGE>
Income Funds
Bond Fund
Goal
The Fund's primary goal is to provide a high level of current income. Its
secondary goal is capital appreciation.
Principal Investment Strategies
The Fund pursues its goals by investing, under normal market conditions, at
least 65% of its total assets in a broad range of bonds and other fixed income
securities. These may include:
. U.S. Government securities and repurchase agreements collateralized by such
securities;
. obligations of state, local and foreign governments;
. obligations of domestic and foreign banks;
. obligations of domestic and foreign corporations;
. zero coupon bonds, debentures and convertible debentures;
. mortgage and other asset-backed securities; and
. stripped securities.
The Fund's strategy focuses on areas where the advisor believes value can be
added. These include credit analysis and analysis of such factors as interest
rate relationships, the relative attractiveness of bond market sectors and the
characteristics of individual issuers. The advisor invests in all bond market
sectors and actively trades the portfolio across issuers and sectors.
The Fund's dollar-weighted average maturity will generally range between six
and fifteen years.
The Fund will purchase only fixed income securities that are rated investment
grade or better, or if unrated, are of comparable quality.
Principal Risks
All investments carry some degree of risk which will affect the value of the
Fund's portfolio investments, its investment performance and the price of its
shares. As a result, you may lose money if you invest in the Fund.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.
The Fund is subject to the following principal investment risks:
. Credit (or Default) Risk. An issuer of a security may default on its
payment obligations. Also, an issuer may suffer adverse changes in its
financial condition that could lower the credit quality of a security,
leading to greater volatility in the price of the security and in shares of
the Fund. A change in the quality rating of a bond can affect the bond's
liquidity and make it more difficult for the Fund to sell.
. Interest Rate Risk. An increase in prevailing interest rates will cause
fixed income securities held by the Fund to decline in value. Longer term
bonds are generally more sensitive to interest rate changes than shorter
term bonds. Generally, the longer the average maturity of the bonds held by
the Fund, the more the Fund's share price will fluctuate in response to
interest rate changes.
. Prepayment Risk. The Fund may experience losses when an issuer exercises its
right to pay principal on an obligation held by the Fund (such as a
mortgage-backed security) earlier than expected. This may happen during a
period of declining interest rates. Under these circumstances, the Fund may
be unable to recoup all of its initial investment and will suffer from
having to reinvest in lower yielding securities. The loss of higher yielding
securities and the reinvestment at lower interest rates can reduce the
Fund's income, total return and share price.
. Foreign Securities Risk. Investments by the Fund in foreign securities may
experience greater and more rapid change in value than investments in U.S.
securities. Foreign securities are generally more volatile and less liquid
than U.S. securities, in part because of greater political and economic
risks and because there is less public information
32
<PAGE>
available about foreign companies.
Issuers of foreign securities are
generally not subject to the same
degree of regulation as are U.S.
issuers. The reporting, accounting
and auditing standards of foreign
countries may differ, in some cases
significantly, from U.S. standards.
Performance
The bar chart and table below give some indication of the risk of an investment
in the Fund. The bar chart shows the Fund's performance for each calendar year
since inception. The table shows how the Fund's average annual total returns
for different calendar periods over the life of the Fund compare to those of a
broad based securities market index.
When you consider this information, please remember the Fund's performance in
past years is not necessarily an indication of how the Fund will perform in the
future.
<TABLE>
<CAPTION>
Average Annual Total Return
(for the periods ended December 31, 1998)
---------------------------
Since
Inception
1 Year 5 Years (12/1/91)
---------------------------
<S> <C> <C> <C>
Class Y 8.90% 6.58% 6.93%
Lehman Gov't/
Corp. Bond Index* 9.47% 7.30% 7.87%**
</TABLE>
--------
*The Lehman Brothers
Government/Corporate Bond Index
is a weighted composite of (i)
Lehman Brothers Government Bond
Index, which is comprised of all
publicly issued, non-convertible
debt of the U.S. Government or
any agency thereof, quasi-federal
corporations, and corporate debt
guaranteed by the U.S. Government
and (ii) Lehman Brothers
Corporate Bond Index, which is
comprised of all public fixed-
rate, non-convertible investment-
grade domestic corporate debt,
excluding collateralized mortgage
obligations.
**Index return from 11/30/91.
Bond Fund Class Y
Total Return
(per calendar year)
1992 1.14%
1993 11.17%
1994 -4.09%
1995 17.74%
1996 2.72%
1997 8.85%
1998 8.90%
Year-to-date through September 30, 1999: (2.24)%
<TABLE>
<S> <C> <C>
Best Quarter: Q2 1995 5.88%
Worst Quarter: Q1 1994 (3.34)%
</TABLE>
33
<PAGE>
Intermediate Bond Fund
Goal
The Fund's goal is to provide a competitive rate of return which, over time,
exceeds the rate of inflation and the return provided by money market
instruments.
Principal Investment Strategies
The Fund pursues its goals by investing, under normal market conditions, at
least 65% of its total assets in a broad range of bonds and other fixed income
securities. These may include:
. U.S. Government securities and repurchase agreements collateralized by such
securities;
. obligations of state, local and foreign governments;
. obligations of domestic and foreign banks;
. obligations of domestic and foreign corporations;
. zero coupon bonds, debentures and convertible debentures;
. mortgage and other asset-backed securities; and
. stripped securities.
The Fund's strategy focuses on areas where the advisor believes value can be
added. These include credit analysis and analysis of such factors as interest
rate relationships, the relative attractiveness of bond market sectors and the
characteristics of individual issues.
The Fund's dollar-weighted average maturity will generally range between three
and eight years.
The Fund will purchase only fixed income securities that are rated investment
grade or better, or if unrated, are of comparable quality.
Principal Risks
All investments carry some degree of risk which will affect the value of the
Fund's portfolio investments, its investment performance and the price of its
shares. As a result, you may lose money if you invest in the Fund.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.
The Fund is subject to the following principal investment risks:
. Credit (or Default) Risk. An issuer of a security may default on its payment
obligations. Also, an issuer may suffer adverse changes in its financial
condition that could lower the credit quality of a security, leading to
greater volatility in the price of the security and in shares of the Fund. A
change in the quality rating of a bond can affect the bond's liquidity and
make it more difficult for the Fund to sell.
. Interest Rate Risk. An increase in prevailing interest rates will cause fixed
income securities held by the Fund to decline in value. Longer term bonds are
generally more sensitive to interest rate changes than shorter term bonds.
Generally, the longer the average maturity of the bonds held by the Fund, the
more the Fund's share price will fluctuate in response to interest rate
changes.
. Prepayment Risk. The Fund may experience losses when an issuer exercises its
right to pay principal on an obligation held by the Fund (such as a mortgage-
backed security) earlier than expected. This may happen during a period of
declining interest rates. Under these circumstances, the Fund may be unable
to recoup all of its initial investment and will suffer from having to
reinvest in lower yielding securities. The loss of higher yielding securities
and the reinvestment at lower interest rates can reduce the Fund's income,
total return and share price.
. Foreign Securities Risk. Investments by the Fund in foreign securities may
experience greater and more rapid change in value than investments in U.S.
securities. Foreign securities are generally more volatile and less liquid
than U.S. securities, in part because of greater political and economic risks
and because there is less public information available about foreign
companies. Issuers of foreign securities are generally not subject to the
same degree of regulation as are U.S. issuers. The reporting, accounting and
auditing standards of foreign countries may differ, in some cases
significantly, from U.S. standards.
34
<PAGE>
Performance
The bar chart and table below give some indication of the risk of an investment
in the Fund. The bar chart shows the Fund's performance for each calendar year
since inception. The table shows how the Fund's average annual total returns
for different calendar periods over the life of the Fund compare to those of a
broad based securities market index.
When you consider this information, please remember the Fund's performance in
past years is not necessarily an indication of how the Fund will perform in the
future.
<TABLE>
<CAPTION>
Average Annual Total Return
(for the periods ended December 31, 1998)
----------------------------------------
Since
Inception
1 Year 5 Years (12/1/91)
----------------------------------------
<S> <C> <C> <C>
Class Y 7.21% 5.55% 6.27%
Lehman Int.
Gov't/Corp.
Bond Index* 8.44% 6.60% 7.90%**
</TABLE>
--------
* The Lehman Brothers Intermediate
Government/Corporate Bond Index is
a weighted composite of (i) Lehman
Brothers Intermediate Government
Bond Index, which is comprised of
all publicly issued, non-
convertible debt of the U.S.
Government or any agency thereof,
quasi-federal corporations and
corporate debt guaranteed by the
U.S. Government with a maturity
between one and ten years and (ii)
Lehman Brothers Corporate Bond
Index, which is comprised of all
public fixed-rate, non-convertible
investment-grade domestic
corporate debt, excluding
collaterized mortgage obligations.
** Index return from 11/30/91.
Intermediate Bond Fund Class Y
Total Return
(per calendar year)
1992 6.79%
1993 8.05%
1994 -3.08%
1995 14.01%
1996 3.13%
1997 7.21%
1998 7.21%
Year-to-date through September 30, 1999: 0.14%
<TABLE>
<S> <C> <C>
Best Quarter: Q2 1995 4.55%
Worst Quarter: Q1 1994 (2.58)%
</TABLE>
35
<PAGE>
International Bond Fund
Goal
The Fund's goal is to realize a competitive total return through a combination
of current income and capital appreciation.
Principal Investment Strategies
The Fund pursues its goal by investing, under normal market conditions, at
least 65% of its total assets in a broad range of bonds and other fixed income
securities of foreign issuers. These may include:
. obligations issued by foreign governments, their agencies, instrumentalities
or political subdivisions;
. obligations issued or guaranteed by supranational organizations (such as the
World Bank);
. obligations of foreign banks or bank holding companies; and
. obligations of foreign corporations.
The Fund will invest in the securities of issuers in at least three foreign
countries.
The Fund's strategy focuses on analysis of bond yield relationships and
specifically focuses on making allocation decisions based on yield
relationships between countries, pricing inefficiencies in the marketplace and
yield curve analysis.
The Fund will purchase fixed income securities rated investment grade or better
and the portfolio's dollar-weighted average maturity will generally range
between three and fifteen years.
The Fund may invest a portion of its assets in domestic obligations, including
U.S. Government securities and obligations of domestic banks and corporations.
The Fund is "non-diversified" under the 1940 Act and may invest more of its
assets in fewer issuers than a "diversified" investment company.
Principal Risks
All investments carry some degree of risk which will affect the value of the
Fund's portfolio investments, its investment performance and the price of its
shares. As a result, you may lose money if you invest in the Fund.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.
The Fund is subject to the following principal investment risks:
. Credit (or Default) Risk. An issuer of a security may default on its payment
obligations. Also, an issuer may suffer adverse changes in its financial
condition that could lower the credit quality of a security, leading to
greater volatility in the price of the security and in shares of the Fund. A
change in the quality rating of a bond can affect the bond's liquidity and
make it more difficult for the Fund to sell.
. Foreign Securities Risk. Investments by the Fund in foreign securities may
experience greater and more rapid change in value than investments in U.S.
securities. Foreign securities are generally more volatile and less liquid
than U.S. securities, in part because of greater political and economic risks
and because there is less public information available about foreign
companies. Issuers of foreign securities are generally not subject to the
same degree of regulation as are U.S. issuers. The reporting, accounting and
auditing standards of foreign countries may differ, in some cases
significantly, from U.S. standards.
36
<PAGE>
. Currency Risk. A Fund that invests in foreign securities denominated in
foreign currencies may also be subject to currency risk. This is the risk of
loss because a decline in the value of foreign currencies relative to the
U.S. dollar will reduce the value of a Fund's portfolio securities
denominated in those currencies.
. Interest Rate Risk. An increase in prevailing interest rates will cause
fixed income securities held by the Fund to decline in value. Longer term
bonds are generally more sensitive to interest rate changes than shorter
term bonds. Generally, the longer the average maturity of the bonds held by
the Fund, the more the Fund's share price will fluctuate in response to
interest rate changes.
. Non-Diversified Risk. The Fund may invest more of its assets in fewer
issuers than many other funds do, may be more susceptible to adverse
developments affecting any single issuer, and may be more susceptible to
greater losses because of these developments.
Performance
The bar chart and table below give some indication of the risk of an
investment in the Fund. The bar chart shows the Fund's performance for each
calendar year since inception. The table shows how the Fund's average annual
total returns for different calendar periods over the life of the Fund compare
to those of a broad based securities market index.
When you consider this information, please remember the Fund's performance in
past years is not necessarily an indication of how the Fund will perform in
the future.
<TABLE>
<CAPTION>
Average Annual Total Return
(for the periods ended December 31, 1998)
-----------------------------------------
Since Inception
1 Year (10/2/96)
-----------------------------------------
<S> <C> <C>
Class Y 17.64% 6.26%
Salomon Bros.
Non-U.S. World
Gov't Bond
Index* 17.79% 5.91%**
</TABLE>
--------
* The Salomon Brothers Non-U.S.
World Government Bond Index is
a market-weighted index that
includes the government bond
markets that are freely open to
investors (excluding the United
States) and have a total market
capitalization of at least $20
billion, Dm 30 billion and Y2.5
trillion.
** Index return from 9/30/96.
International Bond Fund Class Y
Total Return
(per calendar year)
1997 1998
------ ------
-4.87% 17.64%
Year-to-date through September 30, 1999: (4.67)%
<TABLE>
<S> <C> <C>
Best Quarter: Q3 1998 9.51%
Worst Quarter: Q1 1997 (5.51)%
</TABLE>
37
<PAGE>
U.S. Government Income Fund
Goal
The Fund's goal is to provide high current income.
Principal Investment Strategies
The Fund pursues its goal by investing, under normal market conditions, at
least 65% of its total assets in a broad range of U.S. Government securities
and repurchase agreements relating to such securities.
The Fund's strategy focuses on areas where the advisor believes value can be
added. These include credit analysis and an analysis of such factors as
interest rate relationships, the relative attractiveness of the government-
related sectors of the market and the characteristics of individual issues.
The Fund's dollar-weighted average maturity generally will range between six
and fifteen years.
The Fund may also invest in other fixed income securities that are rated Single
A or better, or if unrated, are of comparable quality.
Principal Risks
All investments carry some degree of risk which will affect the value of the
Fund's portfolio investments, its investment performance and the price of its
shares. As a result, you may lose money if you invest in the Fund.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.
The Fund is subject to the following principal investment risk:
Interest Rate Risk. An increase in prevailing interest rates will cause fixed
income securities held by the Fund to decline in value. Longer term bonds are
generally more sensitive to interest rate changes than shorter term bonds.
Generally, the longer the average maturity of the bonds held by the Fund, the
more the Fund's share price will fluctuate in response to interest rate
changes.
38
<PAGE>
Performance
The bar chart and table below give some indication of the risk of an investment
in the Fund. The bar chart shows the Fund's performance for each calendar year
since inception. The table shows how the Fund's average annual total returns
for different calendar periods over the life of the Fund compare to those of a
broad based securities market index.
When you consider this information, please remember the Fund's performance in
past years is not necessarily an indication of how the Fund will perform in the
future.
<TABLE>
<CAPTION>
Average Annual Total Return
(for the periods ended December 31,
1998)
--------------------
Since
Inception
1 Year (7/5/94)
--------------------
<S> <C> <C>
Class Y 7.50% 8.12%
Lehman Gov't/Corp.
Bond Index* 9.47% 8.91%**
</TABLE>
--------
* The Lehman Brothers
Government/Corporate Bond Index
is a weighted composite of (i)
Lehman Brothers Government Bond
Index, which is comprised of all
publicly issued, non-convertible
debt of the U.S. Government or
any agency thereof, quasi-
federal corporations, and
corporate debt guaranteed by the
U.S. Government and (ii) Lehman
Brothers Corporate Bond Index,
which is comprised of all public
fixed-rate, non-convertible
investment-grade domestic
corporate debt, excluding
collateralized mortgage
obligations.
** Index return from 6/30/94.
U.S. Government Income Fund Class Y
Total Return
(per calendar year)
1995 17.49%
1996 3.13%
1997 8.99%
1998 7.50%
Year-to-date through September 30, 1999: (0.70)%
<TABLE>
<S> <C> <C>
Best Quarter: Q2 1995 5.97%
Worst Quarter: Q1 1996 (2.08)%
</TABLE>
39
<PAGE>
Tax-Free Funds
Michigan Tax-Free Bond Fund
(Offered only in the State of Michigan)
Goal
The Fund's goal is to provide as high a level of current interest income exempt
from regular Federal income taxes and Michigan state income tax as is
consistent with prudent investment management and preservation of capital.
Principal Investment Strategies
The Fund pursues its goal by investing, under normal market conditions, at
least 80% of the Fund's net assets in municipal obligations issued by the State
of Michigan and its political subdivisions. The interest on these obligations
is exempt from Federal income taxes and Michigan state income tax.
The Fund will invest primarily in Michigan municipal obligations that have
remaining maturities of between three and thirty years. The Fund's dollar-
weighted average maturity will generally range between ten and twenty years.
The Fund is "non-diversified" under the 1940 Act and may invest more of its
assets in fewer issuers than a "diversified" investment company.
The Fund may also invest in other fixed income securities that are rated Single
A or better, or if unrated, of comparable quality.
Principal Risks
All investments carry some degree of risk which will affect the value of the
Fund's portfolio investments, its investment performance and the price of its
shares. As a result, you may lose money if you invest in the Fund.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.
The Fund is subject to the following principal investment risks:
. Credit (or Default) Risk. An issuer of a security may default on its payment
obligations. Also, an issuer may suffer adverse changes in its financial
condition that could lower the credit quality of a security, leading to
greater volatility in the price of the security and in shares of the Fund. A
change in the quality rating of a bond can affect the bond's liquidity and
make it more difficult for the Fund to sell.
. Interest Rate Risk. An increase in prevailing interest rates will cause fixed
income securities held by the Fund to decline in value. Longer term bonds are
generally more sensitive to interest rate changes than shorter term bonds.
Generally, the longer the average maturity of the bonds held by the Fund, the
more the Fund's share price will fluctuate in response to interest rate
changes.
. Non-Diversified Risk. The Fund may invest more of its assets in fewer issuers
than many other funds do, may be more susceptible to adverse developments
affecting any single issuer, and may be more susceptible to greater losses
because of these developments.
. Municipal Securities Risk. The yields of municipal securities may move
differently and adversely compared to yields of the overall debt securities
markets. There could be changes in applicable tax laws or tax treatments that
reduce or eliminate the current federal income tax exemption on municipal
securities or otherwise adversely affect the current federal or state tax
status of municipal securities.
. State-Specific Risk. Because the Fund invests primarily in a portfolio of
Michigan municipal securities, the Fund is more susceptible to political,
economic, regulatory or other factors affecting issuers of Michigan municipal
securities than a fund that does not limit its investments to such issuers.
40
<PAGE>
Performance
The bar chart and table below give some indication of the risk of an investment
in the Fund. The bar chart shows the Fund's performance for each calendar year
since inception. The table shows how the Fund's average annual total returns
for different calendar periods over the life of the Fund compare to those of a
broad based securities market index.
When you consider this information, please remember the Fund's performance in
past years is not necessarily an indication of how the Fund will perform in the
future.
Average Annual Total Returns
(for the periods ended December
31, 1998)
<TABLE>
--------------------
<CAPTION>
Since
Inception
1 Year (1/3/94)
--------------------
<S> <C> <C>
Class Y 5.90% 5.34%
Lehman Muni Bond 20
Year Index 6.82% 6.59%**
</TABLE>
--------
* The Lehman Brothers 20-year
Municipal Bond Index is a
performance benchmark for the
long-term investment grade tax-
exempt bond market.
** Index return from 12/31/93.
Michigan Tax-Free Bond Fund Class Y
Total Return
(per calendar year)
1995 17.05%
1996 3.28%
1997 9.76%
1998 5.90%
Year-to-date through September 30,
1999: (2.99)%
<TABLE>
<S> <C> <C>
Best Quarter: Q1 1995 6.78%
Worst Quarter: Q1 1996 (2.49)%
</TABLE>
41
<PAGE>
Tax-Free Bond Fund
Goal
The Fund's goals are to provide a high level of current interest income exempt
from Federal income taxes and to generate as competitive a long-term rate of
return as is consistent with prudent investment management and preservation of
capital.
Principal Investment Strategies
The Fund pursues its goals by investing, under normal market conditions, at
least 65% of its total assets in municipal obligations.
Under normal market conditions, at least 80% of the Fund's net assets will be
invested in municipal obligations whose interest is exempt from regular Federal
income tax. This fundamental policy may only be changed with shareholder
approval.
In selecting securities for the Fund, the advisor places a premium on value and
diversifies the Fund's portfolio holdings across maturities, industries and
geographic locations.
The Fund invests primarily in intermediate-term and long-term municipal
obligations that have remaining maturities of between three and thirty years.
The Fund's dollar-weighted average maturity will generally range between ten
and twenty years.
The Fund may also invest in other fixed income securities that are rated Single
A or better, or if unrated, are of comparable quality.
Principal Risks
All investments carry some degree of risk which will affect the value of the
Fund's portfolio investments, its investment performance and the price of its
shares. As a result, you may lose money if you invest in the Fund.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.
The Fund is subject to the following principal investment risks:
. Credit (or Default) Risk. An issuer of a security may default on its payment
obligations. Also, an issuer may suffer adverse changes in its financial
condition that could lower the credit quality of a security, leading to
greater volatility in the price of the security and in shares of the Fund. A
change in the quality rating of a bond can affect the bond's liquidity and
make it more difficult for the Fund to sell.
. Interest Rate Risk. An increase in prevailing interest rates will cause fixed
income securities held by the Fund to decline in value. Longer term bonds are
generally more sensitive to interest rate changes than shorter term bonds.
Generally, the longer the average maturity of the bonds held by the Fund, the
more the Fund's share price will fluctuate in response to interest rate
changes.
42
<PAGE>
Performance
The bar chart and table below give some indication of the risk of an investment
in the Fund. The bar chart shows the Fund's performance for each calendar year
since inception. The table shows how the Fund's average annual total returns
for different calendar periods over the life of the Fund compare to those of a
broad based securities market index.
When you consider this information, please remember the Fund's performance in
past years is not necessarily an indication of how the Fund will perform in the
future.
Average Annual Total Return
(for the periods ended December
31, 1998)
<TABLE>
--------------------------------------------
<CAPTION>
Since
Inception
1 Year (7/21/94)
--------------------------------------------
<S> <C> <C>
Class Y 5.58% 7.34%
Lehman Muni Bond
20-year Index* 6.82% 8.63%**
</TABLE>
--------
* The Lehman Brothers 20-year
Municipal Bond Index is a
performance benchmark for the
long-term investment grade tax-
exempt bond market.
** Index return from 7/31/94.
Tax-Free Bond Fund Class Y
Total Return
(per calendar year)
1995 16.07%
1996 2.38%
1997 10.13%
1998 5.58%
Year-to-date through September 30, 1999: (3.06)%
<TABLE>
<S> <C> <C>
Best Quarter: Q1 1995 6.10%
Worst Quarter: Q1 1996 (1.94)%
</TABLE>
43
<PAGE>
Tax-Free Short-Intermediate
Bond Fund
Goal
The Fund's goals are to provide a competitive level of current interest income
exempt from regular Federal income taxes and a total return which, over time,
exceeds the rate of inflation and the return provided by tax-free money market
instruments.
Principal Investment Strategies
The Fund pursues its goals by investing, under normal market conditions, at
least 65% of its total assets in municipal obligations.
Under normal market conditions, at least 80% of the Fund's net assets will be
invested in municipal obligations whose interest is exempt from regular Federal
income tax.
The Fund generally buys obligations with remaining maturities of five years or
less. The Fund's dollar-weighted average maturity will generally range between
two and five years.
The Fund may invest more than 25% of its assets in municipal obligations issued
by the State of Michigan and its political subdivisions.
The Fund is "non-diversified" under the 1940 Act and may invest more of its
assets in fewer issuers than a "diversified" investment company.
The Fund may also invest in other fixed income securities that are rated Single
A or better, or if unrated, are of comparable quality.
Principal Risks
All investments carry some degree of risk which will affect the value of the
Fund's portfolio investments, its investment performance and the price of its
shares. As a result, you may lose money if you invest in the Fund.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.
The Fund is subject to the following principal investment risks:
. Credit (or Default) Risk. An issuer of a security may default on its payment
obligations. Also, an issuer may suffer adverse changes in its financial
condition that could lower the credit quality of a security, leading to
greater volatility in the price of the security and in shares of the Fund. A
change in the quality rating of a bond can affect the bond's liquidity and
make it more difficult for the Fund to sell.
. Interest Rate Risk. An increase in prevailing interest rates will cause fixed
income securities held by the Fund to decline in value. Longer term bonds are
generally more sensitive to interest rate changes than shorter term bonds.
Generally, the longer the average maturity of the bonds held by the Fund, the
more the Fund's share price will fluctuate in response to interest rate
changes.
. Non-Diversified Risk. The Fund may invest more of its assets in fewer issuers
than many other funds do, may be more susceptible to adverse developments
affecting any single issuer, and may be more susceptible to greater losses
because of these developments.
44
<PAGE>
Performance
The bar chart and table below give some indication of the risk of an investment
in the Fund. The bar chart shows the Fund's performance for each calendar year
since inception. The table shows how the Fund's average annual total returns
for different calendar periods over the life of the Fund compare to those of a
broad based securities market index.
When you consider this information, please remember the Fund's performance in
past years is not necessarily an indication of how the Fund will perform in the
future.
<TABLE>
<CAPTION>
Average Annual Total Return
(for the periods ended December 31, 1998)
-------------------------------------
Since
Inception
1 Year 5 Years (12/17/92)
-------------------------------------
<S> <C> <C> <C>
Class Y 4.94% 4.54% 4.99%
Lehman Muni Bond 5 Year G/O
Index* 5.84% 5.28% 5.85%**
Lehman Mutual Fund Int.
Short Muni Index* 5.78% 5.42% N/A***
</TABLE>
--------
* Lehman Brothers Municipal Bond
5-year Government/Obligation
Index is an unmanaged index
that includes state and local
government bonds secured by the
taxing power of the issuer with
four to six-year maturities.
The Lehman Mutual Fund
Intermediate Short Muni Index
is an unmanaged index that
covers multiple sectors of the
municipal bond universe with
maturities between one and 10
years.
** Index returns from 12/31/92.
*** The index did not exist until
1993.
Tax-Free Short-Intermediate Bond Fund Class Y
Total Return
(per calendar year)
1993 7.05%
1994 -2.49%
1995 11.71%
1996 3.18%
1997 5.88%
1998 4.94%
Year-to-date through September 30, 1999: 0.16%
<TABLE>
<S> <C> <C>
Best Quarter: Q1 1995 4.68%
Worst Quarter: Q1 1994 (3.22)%
</TABLE>
45
<PAGE>
Money Market Funds
Cash Investment Fund
Goal
The Fund's primary goal is to provide as high a level of current interest
income as is consistent with maintaining liquidity and stability of principal.
Principal Investment Strategies
The Fund pursues its goal by investing in a broad range of U.S. dollar-
denominated money market instruments.
The Fund invests solely in U.S. dollar-denominated debt securities with
remaining maturities of 13 months or less and maintains an average dollar-
weighted portfolio maturity of 90 days or less.
The Fund's investments may include fixed and variable rate securities.
Principal Risks
Although the Fund seeks to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the Fund.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.
The principal risks of investing in the Fund are:
. Credit (or Default) Risk. An issuer of a security may default on its payment
obligations. Also, an issuer may suffer adverse changes in its financial
condition that could lower the credit quality of a security, leading to
greater volatility in the price of the security and in shares of the Fund. A
change in the quality rating of a bond can affect the bond's liquidity and
make it more difficult for the Fund to sell.
. Interest Rate Risk. An increase in prevailing interest rates will cause fixed
income securities held by the Fund to decline in value. Longer term bonds are
generally more sensitive to interest rate changes than shorter term bonds.
Generally, the longer the average maturity of the bonds held by the Fund, the
more the Fund's share price will fluctuate in response to interest rate
changes.
. Prepayment Risk. The Fund may experience losses when an issuer exercises its
right to pay principal on an obligation held by the Fund (such as a mortgage-
backed security) earlier than expected. This may happen during a period of
declining interest rates. Under these circumstances, the Fund may be unable
to recoup all of its initial investment and will suffer from having to
reinvest in lower yielding securities. The loss of higher yielding securities
and the reinvestment at lower interest rates can reduce the Fund's income,
total return and share price.
46
<PAGE>
Performance
The bar chart and table below give some indication of the risk of an investment
in the Fund. The bar chart shows the Fund's performance for each calendar year
since inception. The table shows the Fund's average annual total returns for
different calendar periods over the life of the Fund.
When you consider this information, please remember the Fund's performance in
past years is not necessarily an indication of how the Fund will perform in the
future.
<TABLE>
<CAPTION>
Average Annual Total Return
(for the periods ended December 31, 1998)
-----------------------------------------------
Since
Inception
1 Year 5 Years (3/14/90)
-----------------------------------------------
<S> <C> <C> <C>
Class Y 5.19% 4.96% 4.88%
</TABLE>
You may call 1-800-438-5789 to
obtain the Fund's current 7-day
yield.
Cash Investment Fund Class Y
Total Return
(per calendar year)
1991 5.77%
1992 3.34%
1993 2.72%
1994 3.78%
1995 5.58%
1996 5.02%
1997 5.19%
1998 5.19%
Year-to-date through September 30, 1999: 3.48%
<TABLE>
<S> <C> <C>
Best Quarter: Q1 1991 1.62%
Worst Quarter: Q2 1993 0.66%
</TABLE>
47
<PAGE>
Money Market Fund
Goal
The Fund's primary goal is to provide as high a level of current interest
income as is consistent with maintaining liquidity and stability of principal.
The Fund's goal is "fundamental" and cannot be changed without a shareholder
vote.
Principal Investment Strategies
The Fund pursues its goal by investing in a broad range of U.S. dollar-
denominated money market instruments.
The Fund invests solely in U.S. dollar-denominated debt securities with
remaining maturities of 13 months or less and maintains an average dollar-
weighted portfolio maturity of 90 days or less.
The Fund's investments may include fixed and variable rate securities.
The Fund may also invest in foreign securities.
Principal Risks
Although the Fund seeks to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the Fund.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.
The principal risks of investing in the Fund are:
. Credit (or Default) Risk. An issuer of a security may default on its payment
obligations. Also, an issuer may suffer adverse changes in its financial
condition that could lower the credit quality of a security, leading to
greater volatility in the price of the security and in shares of the Fund. A
change in the quality rating of a bond can affect the bond's liquidity and
make it more difficult for the Fund to sell.
. Interest Rate Risk. An increase in prevailing interest rates will cause
fixed income securities held by the Fund to decline in value. Longer term
bonds are generally more sensitive to interest rate changes than shorter
term bonds. Generally, the longer the average maturity of the bonds held by
the Fund, the more the Fund's share price will fluctuate in response to
interest rate changes.
. Foreign Securities Risk. Investments by the Fund in foreign securities
presents risks of loss in addition to those presented by investments in U.S.
securities. Foreign securities are generally more volatile and less liquid
than U.S. securities, in part because of greater political and economic
risks and because there is less public information available about foreign
companies. Issuers of foreign securities are generally not subject to the
same degree of regulation as are U.S. issuers. The reporting, accounting and
auditing standards of foreign countries may differ, in some cases
significantly, from U.S. standards.
. Prepayment Risk. The Fund may experience losses when an issuer exercises its
right to pay principal on an obligation held by the Fund (such as a
mortgage-backed security) earlier than expected. This may happen during a
period of declining interest rates. Under these circumstances, the Fund may
be unable to recoup all of its initial investment and will suffer from
having to reinvest in lower yielding securities. The loss of higher yielding
securities and the reinvestment at lower interest rates can reduce the
Fund's income, total return and share price.
48
<PAGE>
Performance
The bar chart and table below give some indication of the risk of an investment
in the Fund. The bar chart shows the Fund's performance for each calendar year
since inception. The table shows the Fund's average annual total returns for
different calendar periods over the life of the Fund.
When you consider this information, please remember the Fund's performance in
past years is not necessarily an indication of how the Fund will perform in the
future.
<TABLE>
<CAPTION>
Average Annual Total Return
(for the periods ended December 31, 1998)
------------------------------------------
Since Inception
1 Year 5 Years (8/18/93)
------------------------------------------
<S> <C> <C> <C>
Class Y 5.04% 4.79% 4.63%
</TABLE>
--------
You may call 1-800-438-5789 to
obtain the Fund's current 7-day
yield.
Money Market Fund Class Y
Total Return
(per calendar year)
1994 1995 1996 1997 1998
----- ----- ----- ----- -----
3.68% 5.20% 4.94% 5.05% 5.04%
Year-to-date through September 30, 1999: 3.36%
<TABLE>
<S> <C> <C>
Best Quarter: Q3 1995 1.35%
Worst Quarter: Q1 1994 0.61%
</TABLE>
49
<PAGE>
Tax-Free Money Market Fund
Goal
The Fund's goal is to provide as high a level of current interest income exempt
from Federal income taxes as is consistent with maintaining liquidity and
stability of principal.
Principal Investment Strategies
The Fund pursues its goal by investing substantially all of its assets in
short-term, U.S. dollar-denominated municipal obligations, the interest on
which is exempt from regular Federal income tax.
Under normal market conditions, the Fund will invest at least 80% of its net
assets in municipal obligations.
The Fund invests solely in U.S. dollar-denominated debt securities with
remaining maturities of 13 months or less and maintains an average dollar-
weighted portfolio maturity of 90 days or less.
Principal Risks
Although the Fund seeks to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the Fund.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.
The principal risks of investing in the Fund are:
. Credit (or Default) Risk. An issuer of a security may default on its payment
obligations. Also, an issuer may suffer adverse changes in its financial
condition that could lower the credit quality of a security, leading to
greater volatility in the price of the security and in shares of the Fund. A
change in the quality rating of a bond can affect the bond's liquidity and
make it more difficult for the Fund to sell.
. Interest Rate Risk. An increase in prevailing interest rates will cause fixed
income securities held by the Fund to decline in value. Longer term bonds are
generally more sensitive to interest rate changes than shorter term bonds.
Generally, the longer the average maturity of the bonds held by the Fund, the
more the Fund's share price will fluctuate in response to interest rate
changes.
50
<PAGE>
Performance
The bar chart and table below give some indication of the risk of an investment
in the Fund. The bar chart shows the Fund's performance for each calendar year
since inception. The table shows the Fund's average annual total returns for
different calendar periods over the life of the Fund.
When you consider this information, please remember the Fund's performance in
past years is not necessarily an indication of how the Fund will perform in the
future.
<TABLE>
<CAPTION>
Average Annual Total Return
(for the periods ended December 31, 1998)
------------------------------------
Since
Inception
1 Year 5 Years (3/14/90)
------------------------------------
<S> <C> <C> <C>
Class Y 2.98% 2.97% 3.22%
</TABLE>
--------
You may call 1-800-438-5789 to
obtain the Fund's current 7-day
yield.
Tax-Free Money Market Fund Class Y
Total Return
(per calendar year)
1991 1992 1993 1994 1995 1996 1997 1998
----- ----- ----- ----- ----- ----- ----- -----
4.23% 2.66% 2.06% 2.37% 2.38% 2.99% 3.14% 2.98%
Year-to-date through September 30, 1999: 1.98%
<TABLE>
<S> <C> <C>
Best Quarter: Q1 1991 1.09%
Worst Quarter: Q1 1994 0.45%
</TABLE>
51
<PAGE>
U.S. Treasury Money Market Fund
Goal
The Fund's goal is to provide as high a level of current interest income as is
consistent with maintaining liquidity and stability of principal.
Principal Investment Strategies
The Fund pursues its goal by investing its assets solely in short-term bonds,
bills and notes, issued by the U.S. Treasury (including "stripped" securities)
and in repurchase agreements relating to such obligations.
The Fund invests solely in U.S. dollar-denominated debt securities with
remaining maturities of 13 months or less and maintains an average dollar-
weighted portfolio maturity of 90 days or less.
Principal Risks
Although the Fund seeks to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the Fund.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.
The principal risk of investing in the Fund is:
. Interest Rate Risk. An increase in prevailing interest rates will cause fixed
income securities held by the Fund to decline in value. Longer term bonds are
generally more sensitive to interest rate changes than shorter term bonds.
Generally, the longer the average maturity of the bonds held by the Fund, the
more the Fund's share price will fluctuate in response to interest rate
changes.
52
<PAGE>
Performance
The bar chart and table below give some indication of the risk of an investment
in the Fund. The bar chart shows the Fund's performance for each calendar year
since inception. The table shows the Fund's average annual total returns for
different calendar periods over the life of the Fund
When you consider this information, please remember the Fund's performance in
past years is not necessarily an indication of how the Fund will perform in the
future.
<TABLE>
<CAPTION>
Average Annual Total Return
(for the periods ended December 31, 1998)
----------------------------------------------
Since
Inception
1 Year 5 Years (3/14/90)
----------------------------------------------
<S> <C> <C> <C>
Class Y 4.86% 4.72% 4.63%
</TABLE>
You may call 1-800-438-5789 to
obtain the Fund's current 7-day
yield.
U.S. Treasury Money Market Fund Class Y
Total Return
(per calendar year)
1991 1992 1993 1994 1995 1996 1997 1998
----- ----- ----- ----- ----- ----- ----- -----
5.44% 3.29% 2.60% 3.59% 5.33% 4.83% 4.97% 4.86%
Year-to-date through September 30, 1999: 3.21%
<TABLE>
<S> <C> <C>
Best Quarter: Q1 1991 1.51%
Worst Quarter: Q2 1993 0.63%
</TABLE>
53
<PAGE>
Who May Want To Invest
The Equity Funds may be appropriate for investors:
. Looking to invest over the long term.
. Able to ride out market swings.
The Income Funds may be appropriate for investors:
. Looking for current income.
The Tax-Free Funds may be appropriate for investors:
. Looking primarily for tax-exempt income.
. Comfortable with the risks involved with fixed income investments.
The Money Market Funds may be appropriate for investors:
. Looking for as high a level of income as is consistent with liquidity and
stability of principal.
54
<PAGE>
Fees And Expenses
The tables below describe the fees and expenses that you may pay if you buy and
hold Class Y shares the Funds. Please note that the following information does
not include fees that institutions may charge for services they provide to you.
<TABLE>
<CAPTION>
Shareholder Fees (fees paid directly from your investment)
<S> <C>
Maximum Sales Charge (Load) Imposed on Purchases .......................... None
Maximum Deferred Sales Charge (Load)....................................... None
Sales Charge (Load) Imposed on Reinvested Dividends........................ None
Redemption Fees............................................................ None
Exchange Fees.............................................................. None
</TABLE>
Annual Fund Operating Expenses (expenses that are paid from Fund assets) And
Examples
The examples are intended to help you compare the cost of investing in each
Fund to the cost of investing in other mutual funds. The examples assume that
you invest $10,000 in the Fund for the time periods indicated. The examples
also assume that your investment has a 5% return each year, that the Fund's
operating expenses remain the same as shown in the table and that all dividends
and distributions are reinvested. Your actual costs may be higher or lower.
<TABLE>
<CAPTION>
Annual Fund Operating Expenses
as a % of net assets
--------------------------------------------------------
<S> <C>
Balanced Fund
Management Fees................................... .65%
Other Expenses.................................... .32%
-----
Total Annual Fund Operating Expenses.............. .97%
=====
</TABLE>
<TABLE>
<CAPTION>
Examples
-----------------------
<S> <C>
1 Year.......... $ 99
3 Years......... $ 310
5 Years......... $ 538
10 Years........ $1,194
</TABLE>
<TABLE>
<S> <C>
Equity Income Fund
Management Fees................................... .75%
Other Expenses.................................... .21%
-----
Total Annual Fund Operating Expenses.............. .96%
=====
</TABLE>
<TABLE>
<S> <C>
1 Year.......... $ 98
3 Years......... $ 306
5 Years......... $ 532
10 Years........ $1,183
</TABLE>
<TABLE>
<S> <C>
Focus Growth Fund
Management Fees....................... .75%
Other Expenses........................ .37%
-----
Total Annual Fund Operating Expenses.. 1.12%
=====
</TABLE>
<TABLE>
<S> <C>
1 Year.......... $ 114
3 Years......... $ 357
5 Years......... $ 618
10 Years........ $1,368
</TABLE>
<TABLE>
<S> <C>
Future Technology Fund
Management Fees................................... 1.00%
Other Expenses(1)................................. .50%
-----
Total Annual Fund Operating Expenses(1)........... 1.50%
=====
</TABLE>
<TABLE>
<S> <C>
1 Year.......... $ 138
3 Years......... $ 429
</TABLE>
<TABLE>
<S> <C>
Growth Opportunities Fund
Management Fees................................... .75%
Other Expenses(2)................................. .91%
-----
Total Annual Fund Operating Expenses(2)........... 1.66%
=====
</TABLE>
<TABLE>
<S> <C>
1 Year.......... $ 169
3 Years......... $ 525
5 Years......... $ 905
10 Years........ $1,972
</TABLE>
55
<PAGE>
<TABLE>
<CAPTION>
Annual Fund Operating Expenses
as a % of net assets
---------------------------------------------
<S> <C>
International Equity Fund
Management Fees....................... .75%
Other Expenses........................ .29%
------
Total Annual Fund Operating Expenses.. 1.04%
======
</TABLE>
<TABLE>
<CAPTION>
Examples
-----------------------
<S> <C>
1 Year.......... $ 106
3 Years......... $ 332
5 Years......... $ 575
10 Years........ $1,276
</TABLE>
<TABLE>
<S> <C>
Micro-Cap Equity Fund
Management Fees................................... 1.00%
Other Expenses.................................... .39%
-----
Total Annual Fund Operating Expenses.............. 1.39%
=====
</TABLE>
<TABLE>
<S> <C>
1 Year.......... $ 142
3 Years......... $ 441
5 Years......... $ 763
10 Years........ $1,675
</TABLE>
<TABLE>
<S> <C>
Multi-Season Growth Fund
Management Fees(3)................................ .92%
Other Expenses.................................... .23%
-----
Total Annual Fund Operating Expenses(3)........... 1.15%
=====
</TABLE>
<TABLE>
<S> <C>
1 Year.......... $ 117
3 Years......... $ 336
5 Years......... $ 635
10 Years........ $1,403
</TABLE>
<TABLE>
<S> <C>
NetNet Fund
Management Fees................................... 1.00%
Other Expenses(4)................................. .40%
-----
Total Annual Fund Operating Expenses.............. 1.40%
=====
</TABLE>
<TABLE>
<S> <C>
1 Year.......... $ 144
3 Years......... $ 446
5 Years......... $ 771
10 Years........ $1,689
</TABLE>
<TABLE>
<S> <C>
Real Estate Equity Investment Fund
Management Fees................................... .74%
Other Expenses(4)................................. .29%
-----
Total Annual Fund Operating Expenses.............. 1.03%
=====
</TABLE>
<TABLE>
<S> <C>
1 Year.......... $ 105
3 Years......... $ 328
5 Years......... $ 570
10 Years........ $1,264
</TABLE>
<TABLE>
<S> <C>
Small-Cap Value Fund
Management Fees................................... .75%
Other Expenses(4)................................. .25%
-----
Total Annual Fund Operating Expenses.............. 1.00%
=====
</TABLE>
<TABLE>
<S> <C>
1 Year.......... $ 102
3 Years......... $ 319
5 Years......... $ 554
10 years........ $1,229
</TABLE>
<TABLE>
<S> <C>
Small Company Growth Fund
Management Fees................................... .75%
Other Expenses.................................... .22%
-----
Total Annual Fund Operating Expenses.............. .97%
=====
</TABLE>
<TABLE>
<S> <C>
1 Year.......... $ 99
3 Years......... $ 310
5 Years......... $ 538
10 Years........ $1,194
</TABLE>
<TABLE>
<S> <C>
Framlington Emerging Markets Fund
Management Fees................................... 1.25%
Other Expenses(2)................................. .62%
-----
Total Annual Fund Operating Expenses(2)........... 1.87%
=====
</TABLE>
<TABLE>
<S> <C>
1 Year.......... $ 190
3 Years......... $ 589
5 Years......... $1,104
10 Years........ $2,198
</TABLE>
<TABLE>
<S> <C>
Framlington Global Financial Services Fund
Management Fees................................... .75%
Other Expenses(2)................................. 1.70%
-----
Total Annual Fund Operating Expenses(2)........... 2.45%
=====
</TABLE>
<TABLE>
<S> <C>
1 Year.......... $ 249
3 Years......... $ 766
5 Years......... $1,310
10 Years........ $2,796
</TABLE>
56
<PAGE>
<TABLE>
<CAPTION>
Annual Fund Operating Expenses
as a % of Net Assets
------------------------------
Examples
----------
<S> <C>
Framlington Healthcare Fund
Management Fees.......................... 1.00%
Other Expenses(2)........................ .67%
-----
Total Annual Fund Operating Expenses(2).. 1.67%
=====
</TABLE>
<TABLE>
<S> <C>
1 Year.................. $ 170
3 Years................. $ 528
5 Years................. $ 910
10 Years................ $1,983
</TABLE>
<TABLE>
<S> <C>
Framlington International Growth Fund
Management Fees.......................... 1.00%
Other Expenses(2)........................ .51%
-----
Total Annual Fund Operating Expenses(2).. 1.51%
=====
</TABLE>
<TABLE>
<S> <C>
1 Year.................. $ 154
3 Years................. $ 478
5 Years................. $ 826
10 Years................ $1,808
</TABLE>
<TABLE>
<S> <C>
Bond Fund
Management Fees....................... .50%
Other Expenses........................ .22%
-----
Total Annual Fund Operating Expenses.. .72%
=====
</TABLE>
<TABLE>
<S> <C>
1 Year.................. $ 74
3 Years................. $ 231
5 Years................. $ 401
10 Years................ $ 898
</TABLE>
<TABLE>
<S> <C>
Intermediate Bond Fund
Management Fees....................... .50%
Other Expenses........................ .20%
-----
Total Annual Fund Operating Expenses.. .70%
=====
</TABLE>
<TABLE>
<S> <C>
1 Year.................. $ 72
3 Years................. $ 224
5 Years................. $ 391
10 Years................ $ 874
</TABLE>
<TABLE>
<S> <C>
International Bond Fund
Management Fees....................... .50%
Other Expenses........................ .39%
-----
Total Annual Fund Operating Expenses.. .89%
=====
</TABLE>
<TABLE>
<S> <C>
1 Year.................. $ 91
3 Years................. $ 284
5 Years................. $ 494
10 Years................ $1,100
</TABLE>
<TABLE>
<S> <C>
U.S. Government Income Fund
Management Fees....................... .50%
Other Expenses........................ .21%
-----
Total Annual Fund Operating Expenses.. .71%
=====
</TABLE>
<TABLE>
<S> <C>
1 Year.................. $ 73
3 Years................. $ 227
5 Years................. $ 396
10 Years................ $ 896
</TABLE>
<TABLE>
<S> <C>
Michigan Tax-Free Bond Fund
Management Fees....................... .50%
Other Expenses........................ .25%
-----
Total Annual Fund Operating Expenses.. .75%
=====
</TABLE>
<TABLE>
<S> <C>
1 Year.................. $ 77
3 Years................. $ 240
5 Years................. $ 418
10 Years................ $ 934
</TABLE>
<TABLE>
<S> <C>
Tax-Free Bond Fund
Management Fees....................... .50%
Other Expenses........................ .23%
----
Total Annual Fund Operating Expenses.. .73%
====
</TABLE>
<TABLE>
<S> <C>
1 Year.................. $ 75
3 Years................. $234
5 Years................. $407
10 Years................ $910
</TABLE>
<TABLE>
<S> <C>
Tax-Free Short-Intermediate Bond Fund
Management Fees....................... .50%
Other Expenses........................ .21%
----
Total Annual Fund Operating Expenses.. .71%
====
</TABLE>
<TABLE>
<S> <C>
1 Year.................. $ 73
3 Years................. $227
5 Years................. $396
10 Years................ $886
</TABLE>
57
<PAGE>
<TABLE>
<CAPTION>
Annual Fund Operating Expenses
as a % of Net Assets
------------------------------
Examples
----------
<S> <C>
Cash Investment Fund
Management Fees....................... .35%
Other Expenses........................ .18%
----
Total Annual Fund Operating Expenses.. .53%
====
</TABLE>
<TABLE>
<S> <C>
1 Year.................. $ 54
3 Years................. $170
5 Years................. $297
10 Years................ $668
</TABLE>
<TABLE>
<S> <C>
Money Market Fund
Management Fees....................... .40%
Other Expenses........................ .22%
----
Total Annual Fund Operating Expenses.. .62%
====
</TABLE>
<TABLE>
<S> <C>
1 Year.................. $ 63
3 Years................. $199
5 Years................. $347
10 Years................ $778
</TABLE>
<TABLE>
<S> <C>
Tax-Free Money Market Fund
Management Fees....................... .35%
Other Expenses........................ .20%
----
Total Annual Fund Operating Expenses.. .55%
====
</TABLE>
<TABLE>
<S> <C>
1 Year.................. $ 56
3 Years................. $177
5 Years................. $308
10 Years................ $693
</TABLE>
<TABLE>
<S> <C>
U.S. Treasury Money Market Fund
Management Fees....................... .35%
Other Expenses........................ .23%
----
Total Annual Fund Operating Expenses.. .58%
====
</TABLE>
<TABLE>
<S> <C>
1 Year.................. $ 59
3 Years................. $186
5 Years................. $325
10 Years................ $729
</TABLE>
--------
(1) Other expenses are based on estimated amounts for the current fiscal year.
The advisor has voluntarily agreed to reimburse certain operating expenses
to keep the Fund's other expenses at a specified level. As a result, it is
estimated that the Fund's other expenses and total annual fund operating
expenses for the current fiscal year will be .35% and 1.35%, respectively.
The advisor may eliminate all or part of the expense reimbursement at any
time.
(2) The advisor has voluntarily agreed to reimburse the Growth Opportunities
Fund, the Framlington Emerging Markets Fund, the Framlington Global
Financial Services Fund, the Framlington Healthcare Fund and the
Framlington International Growth Fund for the current fiscal year for
certain operating expenses. As a result of the expense reimbursement,
actual other expenses and total annual fund operating expenses for the
Funds for the current fiscal year, which have been restated to reflect an
increase in general operating expenses of the Funds, are expected to be:
.40% and 1.15%, respectively, for Growth Opportunities Fund; .50% and
1.75%, respectively, for Framlington Emerging Markets Fund; .50% and 1.25%,
respectively, for Framlington Global Financial Services Fund; and .50% and
1.50%, respectively, for Framlington Healthcare Fund and for Framlington
International Growth Fund. The advisor may eliminate all or part of the
expense reimbursement at any time.
(3) The advisor has voluntarily agreed to waive a portion of its management
fees for the current fiscal year for the Multi-Season Growth Fund. As a
result of the fee waiver, actual management fees and total annual fund
operating expenses for the Fund would be .75% and .98%, respectively. The
advisor may eliminate all or part of the fee waiver at any time.
(4) The expenses for the NetNet Fund, the Real Estate Equity Investment Fund
and the Small-Cap Value Fund have been restated for the current fiscal year
to reflect an increase in general operating expenses.
58
<PAGE>
More About The Funds
--------------------------------------------------------------------------------
This section further describes the Funds' principal investment strategies and
risks that are summarized in the Risk/Return Summary. The Funds may also invest
in other securities and are subject to further restrictions and risks which are
described in the Statement of Additional Information. The Glossary below
explains certain terms used throughout this prospectus.
Glossary
Types Of Funds
Equity Funds are the Balanced Fund, Focus Growth Fund, Future Technology Fund,
Equity Income Fund, Growth Opportunities Fund, International Equity Fund,
Micro-Cap Equity Fund, Multi-Season Growth Fund, NetNet Fund, Real Estate
Equity Investment Fund, Small-Cap Value Fund, Small Company Growth Fund,
Framlington Emerging Markets Fund, Framlington Global Financial Services Fund,
Framlington Health Care Fund and Framlington International Growth Fund.
Income Funds are the Bond Fund, Intermediate Bond Fund, International Bond Fund
and U.S. Government Income Fund.
Tax-Free Funds are the Michigan Tax-Free Bond Fund, Tax-Free Bond Fund and Tax-
Free Short-Intermediate Bond Fund.
Money Market Funds are the Cash Investment Fund, Money Market, Tax-Free Money
Market Fund and U.S. Treasury Money Market Fund.
Types Of Securities
Equity securities include common stocks, preferred stocks, securities
convertible into common stocks, and rights and warrants to subscribe for the
purchase of common stocks. Equity securities may be listed on a stock exchange
or NASDAQ National Market System or unlisted. Warrants are rights to purchase
securities at a specified time at a specified price.
Fixed income securities are securities that pay interest at set times at either
fixed, floating or variable rates, or which are issued at a discount to their
principal amount instead of making periodic interest payments. Fixed income
securities include corporate bonds, debentures and other similar corporate debt
instruments, zero coupon bonds and variable amount master demand notes.
Convertible securities are bonds or preferred stocks that may be converted
(exchanged) into the common stock of the issuing company within a specified
time period for a specified number of shares. Convertible securities offer the
Funds a way 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.
U.S. Government securities are securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities. These securities include U.S.
Treasury bills, U.S. Treasury notes, U.S. Treasury bonds and obligations of the
Federal Home Loan Corporation, Federal National Mortgage Association and
Government National Mortgage Association.
Money market instruments are high-quality, short-term instruments including
commercial paper, bankers' acceptances and negotiable certificates of deposit
of banks or savings and loan associations, short-term corporate obligations and
short-term U.S. Government securities.
Municipal obligations are obligations of states, territories and possessions of
the United States and the District of Columbia, and their political
subdivisions, agencies, instrumentalities and authorities. They may be payable
from the issuer's general revenue, the revenue of a specific project, current
revenues or a reserve fund.
Rating Agencies And Indices
Moody's is Moody's Investor Services, Inc.
Duff & Phelps is Duff & Phelps Credit Rating Co.
Fitch is Fitch IBCA, Inc.
S&P is Standard & Poor's Rating Services.
59
<PAGE>
S&P 500 is S&P's 500 Composite Stock Price Index, a widely recognized unmanaged
index U.S. stock market activity.
Other
1940 Act is the Investment Company Act of 1940, as amended.
Internal Revenue Code is the Internal Revenue Code of 1986, as amended.
NAV is the net asset value per share of a Fund. NAV is the value of a single
share of a Fund. NAV for Class Y shares is calculated by (1) taking the current
value of a Fund's total assets allocated to that class of shares, (2)
subtracting the liabilities and expenses charged to that class (3) dividing
that amount by the total number of shares of that class outstanding.
A diversified investment company is an investment company that may not invest
more than 5% of its total assets in any one issuer other than the U.S.
Government, its agencies or instrumentalities. This limit applies only to 75%
of a diversified Fund's assets. In addition, a diversified Fund cannot invest
more than 25% of its assets in a single issuer. These limitations do not apply
to the non-diversified Funds.
Principal Investment Strategies and Risks
Foreign Investment Risk. Foreign securities include direct investments in non-
U.S. dollar-denominated securities traded outside of the United States and
dollar-denominated securities of foreign issuers traded in the United States.
Foreign securities also include indirect investments such as American
Depository Receipts ("ADRs"), European Depository Receipts ("EDRs") and Global
Depository Receipts ("GDRs"). ADRs are U.S. dollar-denominated receipts
representing shares of foreign-based corporations. ADRs are issued by U.S.
banks or trust companies, and entitle the holder to all dividends and capital
gains that are paid out on the underlying foreign shares. EDRs and GDRs are
receipts issued by non-U.S. financial institutions that often trade on foreign
exchanges. They represent ownership in an underlying foreign or U.S. security
and are generally denominated in a foreign currency.
Investment Strategy. International Equity Fund, International Growth Fund,
Framlington Global Financial Services Fund, Framlington Healthcare Fund
Framlington International Growth Fund and International Bond Fund will
invest all or a substantial portion of their total assets in foreign
securities.
Special Risks. Foreign securities involve special risks and costs.
Investment in the securities of foreign governments involves the risk that
foreign governments may default on their obligations or may otherwise not
respect the integrity of their debt.
Investment in foreign securities may involve higher costs than investment
in U.S. securities, including higher transaction and custody costs as well
as the imposition of additional taxes by foreign governments. Foreign
investments may also involve risks associated with the level of currency
exchange rates, less complete financial information about the issuers, less
market liquidity, more market volatility and political instability. Future
political and economic developments, the possible imposition of withholding
taxes on dividend income, the possible seizure or nationalization of
foreign holdings, the possible establishment of exchange controls or
freezes on the convertibility of currency, or the adoption of other
governmental restrictions might adversely affect an investment in foreign
securities. Additionally, foreign issuers may be subject to less stringent
regulation, and to different accounting, auditing and recordkeeping
requirements.
Currency exchange rates may fluctuate significantly over short periods of
time causing a Fund's net asset value to fluctuate as well. A decline in
the value of a foreign currency relative to the U.S. dollar will reduce the
value of a foreign currency-denominated security. To the extent that a Fund
is invested in foreign securities while also maintaining currency
positions, it may be exposed to greater combined risk. The Funds'
respective net currency positions may expose them to risks independent of
their securities positions.
60
<PAGE>
Additional risks are involved when investing in countries with emerging
economies or securities markets. In general, the securities markets of
these countries are less liquid, are subject to greater price volatility,
have smaller market capitalizations and may have problems with securities
registration and custody. In addition, because the securities settlement
procedures are less developed in these countries, a Fund may be required to
deliver securities before receiving payment and may also be unable to
complete transactions during market disruptions. As a result of these and
other risks, investments in these countries generally present a greater
risk of loss to the Fund.
A further risk of investing in foreign securities is the risk that a Fund
may be adversely affected by the conversion of certain European currencies
into the Euro. This conversion, which is under way, is scheduled to be
completed in the year 2002. However, problems with the conversion process
and delays could increase volatility in world markets and affect European
markets in particular.
Investment Grade Credit Risk. A security is considered investment grade if, at
the time of purchase, it is rated:
. BBB or higher by S&P;
. Baa or higher by Moody's;
. BBB or higher by Duff & Phelps; or
. BBB or higher by Fitch.
A security will be considered investment grade if it receives one of the above
ratings, even if it receives a lower rating from other rating organizations.
Investment Strategy. Except as stated in the next section, fixed income and
convertible securities purchased by the Funds will generally be rated at
least investment grade. The Funds may also invest in unrated securities if
the advisor or sub-advisor believes they are comparable in quality.
Special Risks. Although securities rated "BBB" by S&P, Duff & Phelps or
Fitch, or Baa by Moody's are considered investment grade, they have certain
speculative characteristics. Therefore, they may be subject to a higher
risk of default than obligations with higher ratings. Subsequent to its
purchase by a Fund, a rated security may cease to be rated or its rating
may be reduced below the minimum rating required for purchase by the Fund.
The advisor or sub-advisor will consider such an event in determining
whether the Fund should continue to hold the security.
Credit Quality of the Tax-Free Funds. The Tax-Free Funds will invest in long-
term instruments only if they are rated "A" or better by Moody's or S&P or, if
unrated, are of comparable quality. These Funds will invest in short-term
instruments only if they (i) have short-term debt ratings in the top two
categories by at least one nationally recognized statistical rating
organization, (ii) are issued by an issuer with such ratings or (iii) if
unrated, are of comparable quality.
Investments in Financial Services Companies by Framlington Global Financial
Services Fund. Financial services companies are subject to extensive
governmental regulation which may limit the financial commitments they can
make, and the interest rates and fees they can charge. Insurance companies may
be subject to severe price competition. The Fund may be riskier than a fund
investing in a broader range of industries.
Investments in the Healthcare Industry by Framlington Healthcare Fund. The Fund
will invest most of its assets in the healthcare industry, which is
particularly affected by rapidly changing technology and extensive government
regulation, including cost containment measures. The Fund may be riskier than a
fund investing in a broader range of industries.
Investments in the Real Estate Industry by Real Estate Equity Investment
Fund. The Fund will invest primarily in the real estate industry and may invest
more than 25% of its assets in any one sector of the real estate industry. As a
result, the Fund will be particularly vulnerable to declines in real estate
prices and new construction rates. The Fund may be riskier than a fund
investing in a broader range of industries.
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Short-Term Trading. The Funds' historical portfolio turnover rates are shown in
the Financial Highlights.
Investment Strategy. Some Funds may engage in short-term trading,
including, in the case of the Equity Funds, initial public offerings.
Special Risks. A high rate of portfolio turnover (100% or more) could
produce higher trading costs and taxable distributions, which could detract
from a Fund's performance.
Defensive Investing. Each Fund may invest all or any portion of its assets in
short-term obligations as a temporary defensive measure in response to adverse
market or economic conditions.
Special Risks. A Fund may not achieve its investment objective when its
assets are invested in short-term obligations.
Other Investment Strategies and Risks
Asset-Backed Securities. Asset-backed securities are debt securities backed by
mortgages, installment sales contract and credit card receivables. The
securities are sponsored by entities such as government agencies, banks,
financial companies and commercial or industrial companies. In effect, these
securities "pass through" the monthly payments that individual borrowers make
on their mortgage or other assets net of any fees paid to the issuers. Examples
of these include guaranteed mortgage pass-through certificates, collateralized
mortgage obligations ("CMOs") and real estate mortgage investment conduits
("REMICs").
Investment Strategy. All Income Funds, Balanced Fund, Framlington Global
Financial Services Fund, Money Market Fund and Cash Investment Fund may
invest a portion of its assets in Asset-Backed Securities.
Special Risks. In addition to credit and stock market risk, asset-backed
securities involve repayment risk because the underlying assets (loans) may
be prepaid at any time. The value of these securities may also change
because of actual or perceived changes in the creditworthiness of the
originator, the servicing agent, the financial institution providing the
credit support, or the counterparty. Like other fixed income securities,
when interest rates rise the value of an asset-backed security generally
will decline. However, when interest rates decline, the value of an asset-
backed security with prepayment features may not increase as much as that
of other fixed income securities. In addition, non-mortgage asset-backed
securities involve certain risks not presented by mortgage-backed
securities. Primarily, these securities do not have the benefit of the same
security interest in the underlying collateral.
Borrowing and Reverse Repurchase Agreements. The Funds can borrow money from
banks and enter into reverse repurchase agreements with banks and other
financial institutions. Reverse repurchase agreements involve the sale of
securities held by a Fund subject to the Fund's agreement to repurchase them at
a mutually agreed upon date and price (including interest).
Investment Strategy. Each Fund may borrow money in an amount up to 5% of
its assets for temporary emergency purposes and in an amount up to 33 1/3%
of its assets to meet redemptions. This is a fundamental policy which can
be changed only by shareholders.
Special Risks. Borrowings and reverse repurchase agreements by a Fund may
involve leveraging. If the securities held by the Fund decline in value
while these transactions are outstanding, the Fund's net asset value will
decline in value by proportionately more than the decline in value of the
securities. In addition, reverse repurchase agreements involve the risks
that the interest income earned by the Fund (from the investment of the
proceeds) will be less than the interest expense of the transaction, that
the market value of the securities sold by the Fund will decline below the
price the Fund is obligated to pay to repurchase the securities, and that
the securities may not be returned to the Fund.
Derivative Risk. "Derivative" instruments are financial contracts whose value
is based on an underlying security, a currency exchange rate, an interest rate
or a market index. Many types of
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instruments representing a wide range of potential risks and rewards are
derivatives, including futures contracts, options on futures contracts,
options, swaps, forward currency contracts and structured debt obligations
(including collateralized mortgage obligations and other types of asset-backed
securities, "stripped" securities and various floating rate instruments).
Investment Strategy. All Funds (except the U.S. Treasury Money Market Fund)
may use derivative instruments. Derivatives can be used for hedging
(attempting to reduce risk by offsetting one investment position with
another) or speculation (taking a position in the hope of increasing
return). The Funds may, but are not required to, use derivatives for
hedging purposes or for the purpose of remaining fully invested or
maintaining liquidity. The Funds will not use derivatives for speculative
purposes.
Special Risks. The use of derivative instruments exposes a Fund to
additional risks and transaction costs. Risks of derivative instruments
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 skills needed to use these
strategies are different than those needed to select portfolio securities;
(4) 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; (5) the risk that adverse price movements in an instrument can
result in a loss substantially greater than the Fund's initial investment
in that instrument (in some cases, the potential loss is unlimited); (6)
particularly in the case of privately-negotiated instruments, the risk that
the counterparty will not perform its obligations, which could leave the
Fund worse off than if it had not entered into the position; and (7) the
inability to close out certain hedged positions to avoid adverse tax
consequences.
Foreign Investment Risk. Foreign securities include direct investments in non-
U.S. dollar-denominated securities traded outside of the United States and
dollar-denominated securities of foreign issuers traded in the United States.
Foreign securities also include indirect investments such as American
Depository Receipts ("ADRs"), European Depository Receipts ("EDRs") and Global
Depository Receipts ("GDRs"). ADRs are U.S. dollar-denominated receipts
representing shares of foreign-based corporations. ADRs are issued by U.S.
banks or trust companies, and entitle the holders to all dividends and capital
gains that are paid out on the underlying foreign shares. EDRs and GDRs are
receipts issued by non-U.S. financial institutions that often trade on foreign
exchanges. They represent ownership in an underlying foreign or U.S. security
and are generally denominated in a foreign currency.
Investment Strategy. The Other Equity Funds (except Real Estate Investment
Fund), the Income Funds, Cash Investment Fund and Money Market Fund may
invest up to 25% of their total assets in foreign securities. The Tax-Free
Funds may invest up to 10% of their total assets in foreign securities.
Special Risks. Foreign securities involve special risks and costs.
Investment in the securities of foreign governments involves the risk that
foreign governments may default on their obligations or may otherwise not
respect the integrity of their debt.
Investment in foreign securities may involve higher costs than investment
in U.S. securities, including higher transaction and custody costs as well
as the imposition of additional taxes by foreign governments. Foreign
investments may also involve risks associated with the level of currency
exchange rates, less complete financial information about the issuers, less
market liquidity, more market volatility and political instability. Future
political and economic developments, the possible imposition of withholding
taxes on dividend income, the possible seizure or nationalization of
foreign holdings, the possible establishment of exchange controls or
freezes on the convertibility of currency, or the adoption of other
governmental restrictions might adversely affect
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an investment in foreign securities. Additionally, foreign issuers may be
subject to less stringent regulation, and to different accounting, auditing
and recordkeeping requirements.
Currency exchange rates may fluctuate significantly over short periods of
time causing a Fund's net asset value to fluctuate as well. A decline in
the value of a foreign currency relative to the U.S. dollar will reduce the
value of a foreign currency-denominated security. To the extent that a Fund
is invested in foreign securities while also maintaining currency
positions, it may be exposed to greater combined risk. The Funds'
respective net currency positions may expose them to risks independent of
their securities positions.
Additional risks are involved when investing in countries with emerging
economies or securities markets. In general, the securities markets of
these countries are less liquid, are subject to greater price volatility,
have smaller market capitalizations and have problems with securities
registration and custody. In addition, because the securities settlement
procedures are less developed in these countries, a Fund may be required to
deliver securities before receiving payment and may also be unable to
complete transactions during market disruptions. As a result of these and
other risks, investments in these countries generally present a greater
risk of loss to the Fund.
A further risk of investing in foreign securities is the risk that a Fund
may be adversely affected by the conversion of certain European currencies
into the Euro. This conversion, which is under way, is scheduled to be
completed in the year 2002. However, problems with the conversion process
and delays could increase volatility in world markets and affect European
markets in particular.
Forward Currency Exchange Contracts. A forward currency exchange contract is an
obligation to exchange one currency for another on a future date at a specified
exchange rate.
Investment Strategy. Forward currency exchange contracts may be used for
hedging purposes and to help reduce the risks and volatility caused by
changes in foreign currency exchange rates. Foreign currency exchange
contracts will be used at the discretion of the advisor or sub-advisor, and
no Fund is required to hedge its foreign currency positions.
Special Risks. Forward currency contracts are privately negotiated
transactions, and can have substantial price volatility. When used for
hedging purposes, they tend to limit any potential gain that may be
realized if the value of a Fund's foreign holdings increases because of
currency fluctuations.
Futures Contracts and Related Options. A futures contract is a type of
derivative instrument that obligates the holder to buy or sell an asset in the
future at an agreed upon price. 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 during the option period. When a
Fund sells an option on a futures contract, it becomes obligated to purchase or
sell a futures contract if the option is exercised.
Investment Strategy. The Equity Funds, the Income Funds and the Tax-Free
Funds may invest in futures contracts and options on futures contracts on
domestic or foreign exchanges or boards of trade. These instruments may be
used for hedging purposes, to maintain liquidity to meet potential
shareholder redemptions, to invest cash balances or dividends, or to
minimize trading costs.
A Fund will not purchase or sell a futures contract unless, after the
transaction, the sum of the aggregate amount of margin deposits on its
existing futures positions and the amount of premiums paid for related
options used for non-hedging purposes is 5% or less of the Fund's total
assets.
Special Risks. Futures contracts and related options present the following
risks: imperfect correlation between the change in market value of a Fund's
securities and the price of futures contracts and options; the possible
inability to close a futures contract when desired; losses due to
unanticipated market movements, which are
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potentially unlimited; and the possible inability of the advisor or sub-
advisor to correctly predict the direction of securities prices, interest
rates, currency exchange rates and other economic factors.
Guaranteed Investment Contracts. Guaranteed investment contracts are agreements
by a Fund to make payments to an insurance company's general account in
exchange for a minimum level of interest based on an index.
Investment Strategy. The Income Funds, Cash Investment Fund and Money
Market Fund may invest in guaranteed investment contracts.
Special Risks. Guaranteed investment contracts are considered illiquid
investments and are acquired subject to a Fund's limitation on illiquid
investments.
Illiquid Securities. Illiquid securities include private placements or other
securities that are subject to legal or contractual restrictions on resale or
for which there is no readily available market.
Investment Strategy. Each Fund may invest up to 15% (10% in the case of a
Money Market Fund) of its net assets in securities that are illiquid.
Special Risks. To the extent that a Fund invests in illiquid securities,
the Fund risks not being able to sell the securities at the time and the
price that it would like. The Fund may have to lower the price, sell
substitute securities or forego an investment opportunity, each of which
may cause a loss to the Fund.
Municipal Obligations. Municipal obligations may include: (i) general
obligation bonds issued for various public purposes and supported by the
municipal issuer's credit and taxing power; and (ii) revenue bonds whose
principal and interest is payable only from the revenues of a particular
project or facility.
Investment Strategy. The Tax-Free Funds and Tax-Free Money Market Fund will
normally invest at least 80% of their net assets in municipal obligations.
Special Risks. Industrial revenue bonds depend on the credit standing of a
private issuer and may be subject to the federal alternative minimum tax
(AMT). Although Tax-Free Money Market Fund may invest more than 25% of its
net assets in municipal revenue obligations, it does not intend to do so on
a regular basis. If it does, it will be riskier than a fund which does not
concentrate to such an extent on similar projects.
Options. An option is a type of derivative instrument that gives the holder the
right (but not the obligation) to buy (a "call") or sell (a "put") an asset in
the future at an agreed upon price prior to the expiration date of the option.
Investment Strategy. The Equity Funds, Income Funds, Tax-Free Free Bond
Fund and Michigan Tax-Free Bond Fund may write (sell) covered call options,
buy put options, buy call options and write secured put options for hedging
purposes. Options may relate to particular securities, foreign or domestic
securities indices, financial instruments or foreign currencies.
Special Risks. The value of options can be highly volatile, and their use
can result in loss if the advisor or sub-advisor is incorrect in its
expectation of price fluctuations. The successful use of options for
hedging purposes also depends in part on the ability of the advisor or sub-
advisor to predict future price fluctuations and the degree of correlation
between the options and securities markets.
Repurchase Agreements. Repurchase agreements involve the purchase of securities
by a Fund subject to the seller's agreement to repurchase them at a mutually
agreed upon date and price.
Investment Strategy. Each Fund may enter into repurchase agreements with
banks and broker-dealers that are deemed to be creditworthy by the advisor
or sub-advisor.
Special Risks. If the seller defaults or declares bankruptcy, a Fund may
suffer if the proceeds from the sale of the underlying securities and other
collateral are less than the repurchase price or if there are delays in
selling the underlying securities or collateral.
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Securities Lending. In order to generate additional income, each Fund may lend
securities on a short-term basis to qualified institutions. By reinvesting any
cash collateral it receives in these transactions, the Fund could realize
additional income gains or losses.
Investment Strategy. Securities lending may represent no more than 25% of
the value of a Fund's total assets (including the loan collateral).
Special Risks. The main risk when lending Fund securities is that if the
borrower fails to return the securities or the invested collateral has
declined in value, the Fund could lose money.
Stripped Securities. These securities are issued by the U.S. Government (or
agency or instrumentality), foreign governments or banks and other financial
institutions. They entitle the holder to receive either interest payments or
principal payments that have been "stripped" from a debt obligation. These
obligations include participations in trusts that hold U.S. Treasury or agency
securities.
Special Risks. Stripped securities are very sensitive to changes in
interest rates and to the rate of principal repayments. A rapid or
unexpected increase in mortgage prepayments could severely depress the
price of certain stripped mortgage-backed securities and adversely affect a
Fund's total returns.
Temporary Investments. Short-term obligations refer to U.S. Government
securities, high-quality money market instruments and repurchase agreements
with maturities of 13 months or less. Generally, these obligations are
purchased to provide stability and liquidity to a Fund.
Investment Strategy. Each Fund may invest a portion of its assets in short-
term obligations pending investment or to meet anticipated redemption
requests. The Tax-Free Funds and Tax-Free Money Market Fund may hold
uninvested cash if, in the advisor's opinion, suitable tax-exempt
securities are not available. Each Tax-Free Fund may also invest a portion
of its assets in short-term money market instruments, the income from which
is subject to Federal income tax.
Special Risks. A Fund may not achieve its investment objective when its
asset are invested in short-term obligations.
Variable and Floating Rate Instruments. Variable and floating rate instruments
have interest rates that are periodically adjusted either at set intervals or
that float at a margin above a generally recognized index rate. These
instruments include variable amount master demand notes.
Special Risks. Variable and floating rate instruments are subject to the
same risks as fixed income investments, particularly interest rate risk and
credit risk. Because there is no active secondary market for certain
variable and floating rate instruments, they may be more difficult to sell
if the issuer defaults on its payment obligations or during periods when a
Fund is not entitled to exercise its demand rights. As a result, the Fund
could suffer a loss with respect to these instruments.
Zero Coupon Bonds. These are securities issued at a discount from their face
value because interest payments are typically postponed until maturity.
Special Risks. The market prices of zero coupon bonds generally are more
volatile than the market prices of interest-bearing securities and are
likely to respond to a greater degree to changes in interest rates than
interest-bearing securities having similar maturities and credit quality. A
Fund's investments in zero coupon bonds may require the Fund to sell some
of its portfolio securities to generate sufficient cash to satisfy certain
income distribution requirements.
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Your Investment
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This section describes how to do business with the Funds.
How To Reach The Funds
By telephone: 1-800-438-5789
Call for shareholder services.
By mail: The Munder Funds
c/o PFPC Global Fund Services
P.O. Box 60428
King of Prussia, PA 19406-0428
Purchasing Shares
Who May Purchase Shares
The following persons may purchase shares of the Funds:
. fiduciary and discretionary accounts of institutions;
. institutional investors (including: banks; savings institutions; credit
unions and other financial institutions; pension, profit sharing and employee
benefit plans and trusts; insurance companies; investment companies;
investment advisers and broker-dealers acting for their own accounts or for
the accounts of their clients);
. directors, trustees, officers and employees of the Munder Funds, the advisor
and the Funds' distributor;
. the advisor's investment advisory clients; and
. family members of employees of the advisor.
Each Fund also issues other classes of shares, which have different sales
charges, expense levels and performance. Call (800) 438-5789 to obtain more
information about the Funds' other classes of shares.
Purchase Price of Shares
Class Y shares of the Funds are sold at the NAV next determined after a
purchase order is received in proper form.
Broker-dealers or financial advisors (other than the Funds' distributor) may
charge you a fee for shares you purchase through them.
Policies for Purchasing Shares
Minimum initial investment
The minimum initial investment by fiduciary and discretionary accounts of
institutions and by institutional investors is $500,000 ($250,000 for the Real
Estate Equity Investment Fund). Other investors are not subject to any minimum.
There is no minimum for subsequent investments.
Timing of orders
Purchase orders must be received by the Funds' distributor, transfer agent or
authorized dealer before the close of regular trading on the New York Stock
Exchange (normally, 4:00 p.m. Eastern time).
Methods for Purchasing Shares
You can purchase Class Y shares through the Fund's transfer agent or through
the Fund's distributor through arrangements with a broker-dealer, financial
advisor or financial institution.
. Through a Financial Institution. You may purchase shares through a financial
institution through procedures established with that institution.
Confirmations of share purchases will be sent to the institution.
. By Mail. You may open an account directly through the Fund's transfer agent
by completing, signing and mailing an account application form and a check or
other negotiable bank draft (payable to The Munder Funds) to: The Munder
Funds, c/o PFPC Global Fund Services, P.O. Box 60428, King of Prussia,
Pennsylvania 19406-0428. You can obtain an account application form by
calling (800) 438-5789. For additional investments, send a letter stating the
Fund and share class you wish to purchase, your name and your account number
with a check for $50 or more to the address listed above. We do not generally
accept third-party checks.
. By Wire. You may make additional investments in the Funds by wire. Wire
instructions must state the Fund name, share class, your registered name
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and your account number. Your bank wire should be sent through the Federal
Reserve Bank Wire System to:
Boston Safe Deposit and Trust Company
Boston, MA
ABA# 011001234
DDA# 16-798-3
Account No.:
Note that banks may charge fees for transmitting wires.
. You may purchase shares through the Automatic Investment Plan.
Exchanging Shares
Policies for Exchanging Shares
. You may exchange your Fund shares for Class Y shares of other Munder Funds
based on their relative net asset values.
. You must meet the minimum purchase requirements for the Munder Fund that you
purchase by exchange.
. A share exchange may be a taxable event and, accordingly, you may realize a
taxable gain or loss.
. Before making an exchange request, read the prospectus of the Munder Fund you
wish to purchase by exchange. You can obtain a prospectus for any Munder Fund
by contacting your broker or the Munder Funds at (800) 438-5789.
. Brokers or financial advisors may charge you a fee for handling exchanges.
. We may modify or terminate the exchange privilege at any time. You will be
given notice of any material modifications except where notice is not
required.
Redeeming Shares
Redemption Price
We will redeem shares at the NAV next determined after we receive the
redemption request in proper form.
Methods for Redeeming Shares
. You may redeem shares of all Funds through your broker-dealer, financial
advisor or financial institution.
. You can redeem a portion of your shares of the Income Funds (other than the
International Bond Fund), the Tax-Free Funds and the Money Market Funds
through the free checkwriting privilege.
Policies for Redeeming Shares
. Shares held by an institution on behalf of its customers must be redeemed in
accordance with instructions and limitations pertaining to the account at
that institution.
. If we receive a redemption order for a Fund (other than a Money Market Fund)
before 4:00 p.m. (Eastern time), we will normally wire payment to the
redeeming institution on the next business day. If we receive a redemption
order for a Money Market Fund before 12:00 noon (Eastern time), we will
normally wire payment to the redeeming institution on the same business day.
If an order for a Money Market Fund is received between 12:00 noon and 4:00
p.m. (Eastern time), we will normally wire redemption proceeds the next
business day.
Additional Policies For Purchases, Exchanges And Redemptions
. We consider requests to be in "proper form" when all required documents are
properly completed, signed and received.
. If your purchase order and payment for the Cash Investment Fund and U.S.
Treasury Money Market Fund is received in proper form after 2:45 p.m.
(Eastern time), you will receive dividends for that day. If your redemption
order is received before 2:45 p.m. (Eastern time), you will not receive
dividends for that day.
If your purchase order and payment for the Money Market Fund and Tax-Free
Money Market Fund is received in proper form after 12:00 p.m. (Eastern time),
you will receive dividends for that day. If your redemption order is received
before 12:00 p.m. (Eastern time), you will not receive dividends for that
day.
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. The Funds reserve the right to reject any purchase order.
. At any time, the Funds may change any of their purchase, redemption or
exchange practices, and may suspend the sale of their shares.
. The Funds may delay sending redemption proceeds for up to seven days, or
longer if permitted by the Securities and Exchange Commission.
. To limit the Funds' expenses, we no longer issue share certificates.
. We will typically send redemption amounts to you within seven business days
after you redeem shares. We may hold redemption amounts from the sale of
shares you purchased by check until the purchase check has cleared, which may
be as long as 15 days.
. A Fund may temporarily stop redeeming shares if:
. the New York Stock Exchange is closed;
. trading on the New York Stock Exchange is restricted;
. an emergency exists and the Fund cannot sell its assets or accurately
determine the value of its assets; or
. the Securities and Exchange Commission orders the Fund to suspend
redemptions.
. If accepted by a Fund, investors may purchase shares of the Fund (other than
the Real Estate Equity Investment Fund) with securities which the Fund may
hold. The advisor will determine if the securities are consistent with the
Funds objectives and policies. If accepted, the securities will be valued the
same way the Fund values portfolio securities it already owns. Call the Funds
at (800) 438-5789 for more information.
. The Funds reserve the right to make payment for redeemed shares wholly or in
part by giving the redeeming shareholder portfolio securities. The
shareholder may pay transaction costs to dispose of these securities.
. We record all telephone calls for your protection and take measures to
identify the caller. As long as the Fund's transfer agent takes reasonable
measures to authenticate telephone requests on an investor's account, neither
the Funds, the Fund's distributor nor the transfer agent will be held
responsible for any losses resulting from unauthorized transactions.
. We may redeem your account if its value falls below $250 as a result of
redemptions (but not as a result of a decline in net asset value). You will
be notified in writing and allowed 60 days to increase the value of your
account to the minimum investment level.
. If you purchased shares directly through the Funds' transfer agent, the
transfer agent will send you confirmations of the opening of an account and
of all subsequent purchases, exchanges or redemptions in the account.
Confirmations of transactions effected through an institution will be sent to
the institution.
. Financial institutions are responsible for transmitting orders and payments
for their customers on a timely basis.
Shareholder Privileges
Automatic Investment Plan (AIP). Under the AIP you may arrange for periodic
investments in a Fund through automatic deductions from a checking or savings
account. To enroll in the AIP you should complete the AIP application form or
call the Funds at (800) 438-5789. The minimum pre-authorized investment amount
is $50. You may discontinue the AIP at any time. We may discontinue the AIP on
30 days' written notice to you.
Free Checkwriting. Free checkwriting is available to holders of Class Y shares
of the Income Funds (other than the International Bond Fund and the Short Term
Treasury Fund), Tax-Free Funds and Money Market Funds who complete the
signature card section of the account application form. You may write checks in
the amount of $500 or more but you may not close a Fund account by writing a
check. We may change or terminate this program on 30 days' notice to you.
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Pricing Of Fund Shares
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Each Fund's NAV is calculated on each day the New York Stock Exchange is open.
The Funds calculate NAV as of the close of business on the New York Stock
Exchange, normally 4:00 p.m. (Eastern time).
If the New York Stock Exchange closes early, the Funds will accelerate their
calculation of NAV and transaction deadlines to that time.
The NAV of each Fund (other than the Money Market Funds) is generally based on
the market value of the securities held in the Fund. If market values are not
available, the fair value of securities is determined in good faith by, or
using procedures approved by, the Boards of Directors/Trustees of the Funds.
In determining each Money Market Fund's NAV, securities are valued at amortized
cost, which is approximately equal to market value.
Trading in foreign securities may be completed at times that vary from the
closing of the New York Stock Exchange. A Fund values foreign securities at the
latest closing price on the exchange on which they are traded immediately prior
to the closing of the New York Stock Exchange. Certain foreign currency
exchange rates may also be determined at the latest rate prior to the closing
of the New York Stock Exchange. Foreign securities quoted in foreign currencies
are translated into U.S. dollars at current rates. Occasionally, events that
affect these values and exchange rates may occur between the times at which
they are determined and the closing of the New York Stock Exchange. If the
advisor believes that such events materially affect the value of portfolio
securities, these securities may be valued at their fair market value as
determined in good faith by, or using procedures approved by, the Funds' Boards
of Directors/Trustees.
Foreign securities may trade in their primary markets on weekends or other days
when a Fund does not price its shares. Therefore, the value of a Fund's
portfolio may change on days when shareholders will not be able to buy or sell
their shares.
70
<PAGE>
Distributions
--------------------------------------------------------------------------------
As a shareholder you are entitled to your share of a Fund's net income and
gains on its investments. The Funds pass substantially all of its earnings
along to its shareholders as distributions. When the Funds earns dividends from
stocks and interest from debt securities and distributes these earnings to
shareholders, it is called a dividend distribution. A Fund realizes capital
gains when it sells securities for a higher price than it paid. When these
gains are distributed to shareholders, it is called a capital gain
distribution.
Balanced Fund, Equity Income Fund, Small Company Growth Fund and International
Bond Fund
These Funds pay dividends, if any, quarterly.
Focus Growth Fund, Future Technology Fund, Growth Opportunities Fund, NetNet
Fund, Framlington Emerging Markets Fund, Framlington Global Financial Services
Fund, Framlington Healthcare Fund, Framlington International Growth Fund,
International Equity Fund, Micro-Cap Equity Fund, Multi-Season Growth Fund and
Small-Cap Value Fund
These Funds pay dividends, if any, at least annually.
Bond Fund, Intermediate Bond Fund, U.S. Government Income Fund, Michigan Tax-
Free Bond Fund, Tax-Free Bond Fund, Tax-Free Short-Intermediate Bond Fund and
Real Estate Equity Investment Fund
These Funds pay dividends, if any, monthly.
Cash Investment Fund, Tax-Free Money Market Fund, Money Market Fund and U.S.
Treasury Money Market Fund
Dividend distributions are declared daily and paid monthly.
All Funds
All Funds distribute their net realized capital gains, if any, at least
annually.
It is possible that a Fund may make a distribution in excess of the Fund's
earnings and profits. You will treat such a distribution as a return of capital
which is applied against and reduces your basis in your shares. You will treat
the excess of any such distribution over your basis in your shares as gain from
a sale or exchange of the shares.
Each Fund will pay distributions in additional shares of that Fund. If you wish
to receive distributions in cash, either indicate this request on your account
application form or notify the Funds by calling (800) 438-5789.
71
<PAGE>
Federal Tax Considerations
--------------------------------------------------------------------------------
Investments in a Fund may have tax consequences that you should consider. This
section briefly describes some of the more common federal tax consequences. A
more detailed discussion about the tax treatment of distributions from the
Funds and about other potential tax liabilities, including backup withholding
for certain taxpayers and about tax aspects of dispositions of shares of the
Funds, is contained in the Statement of Additional Information. You should
consult your tax adviser about your own particular tax situation.
Taxes On Distributions
You will generally have to pay federal income tax on all Fund distributions.
Distributions will be taxed in the same manner whether you receive the
distributions in cash or in additional shares of the Fund. The Tax-Free Funds
and the Tax-Free Money Market Fund expect that a portion of their dividend
distributions will be exempt from federal income tax. Shareholders not subject
to tax on their income, generally will not be required to pay any tax on
distributions.
Distributions that are derived from net long-term capital gains generally will
be taxed as long-term capital gains. Dividend distributions and short-term
capital gains generally will be taxed as ordinary income. The tax you pay on a
given capital gains distribution generally depends on how long the Fund held
the portfolio securities it sold. It does not depend on how long you held your
Fund shares.
Distributions are generally taxable to you in the tax year in which they are
paid, with one exception: distributions declared in October, November or
December, but not paid until January of the following year, are taxed as though
they were paid on December 31 in the year in which they were declared.
Shareholders generally are required to report all Fund distributions on their
federal income tax returns. Each year the Funds will send you information
detailing the amount of ordinary income and capital gains paid to you for the
previous year.
Taxes On Sales
If you sell shares of a Fund or exchange them for shares of another Fund, you
generally will be subject to tax on any taxable gain. Your taxable gain is
computed by subtracting your tax basis in the shares from the redemption
proceeds (in the case of a sale) or the value of the shares received (in the
case of an exchange). Because your tax basis depends on the original purchase
price and on the price at which any dividends may have been reinvested, you
should be sure to keep account statements so that you or your tax preparer will
be able to determine whether a sale or an exchange will result in a taxable
gain.
Other Considerations
If you buy shares of a Fund just before the Fund makes any distribution, you
will pay the full price for the shares and then receive back a portion of the
money you have just invested in the form of a taxable distribution.
If you have not provided complete, correct taxpayer information, by law, the
Funds must withhold a portion of your distributions and redemption proceeds to
pay federal income taxes.
72
<PAGE>
Management
--------------------------------------------------------------------------------
Investment Advisors And Sub-Advisor
Munder Capital Management ("MCM"), 480 Pierce Street, Birmingham, Michigan
48009 is the investment advisor of each Fund other than International Equity
Fund. World Asset Management ("World"), 255 East Brown Street, Birmingham,
Michigan 48009, is the investment advisor of the International Equity Fund.
World is a wholly-owned subsidiary of MCM. As of March 31, 2000, MCM and its
affiliates had approximately $62 billion in assets under management, of which
$39 billion were invested in equity securities, $7 billion were invested in
money market or other short-term instruments, $6 billion were invested in other
fixed income securities, $3 billion were invested in balanced investments and
$7 billion in non-discretionary assets. As of March 31, 2000, World had
approximately $22.7 billion in assets under management, of which $17.6 billion
were invested in domestic equity securities, $4.5 billion were invested in
international equity securities and $600 million were invested in other fixed
income securities.
Framlington Overseas Investment Management Limited ("Framlington"), an
affiliate of MCM, is the sub-advisor of the Framlington Funds.
The advisors provide overall investment management for their respective Funds.
Except for the Framlington Funds, the advisors provide all research and credit
analysis and are responsible for all purchases and sales of portfolio
securities.
Framlington provides research and credit analysis for each of the Framlington
Funds and is responsible for making all purchases and sales of portfolio
securities for each of the Framlington Funds other than the Framlington Global
Financial Services Fund. MCM and Framlington each manage a portion of the
assets of the Framlington Global Financial Services Fund. MCM is responsible
for all purchases and sales of domestic securities held by the Framlington
Global Financial Services Fund. Framlington is responsible for the allocation
of the Fund's assets among countries and for making all purchases and sales of
foreign securities held by the Fund.
During the fiscal year ended June 30, 1999, each Fund paid an advisory fee at
an annual rate based on the average daily net assets of the Fund (after
waivers, if any) as follows:
<TABLE>
<S> <C>
Balanced Fund....................... 0.65%
Equity Income Fund.................. 0.75%
Focus Growth Fund................... 0.75%
Growth Opportunities Fund........... 0.75%
International Equity Fund........... 0.75%
Micro-Cap Equity Fund............... 1.00%
Multi-Season Growth Fund............ 0.75%
NetNet Fund......................... 1.00%
Real Estate Equity Investment Fund.. 0.74%
Small-Cap Value Fund................ 0.75%
Small Company Growth Fund........... 0.75%
Framlington Emerging Markets Fund... 1.25%
Framlington Global Financial Serv-
ices Fund.......................... 0.75%
Framlington Healthcare Fund......... 1.00%
Framlington International Growth
Fund............................... 1.00%
Bond Fund........................... 0.50%
Intermediate Bond Fund.............. 0.50%
International Bond Fund............. 0.50%
U.S. Government Income Fund......... 0.50%
Michigan Tax-Free Bond Fund......... 0.50%
Tax-Free Bond Fund.................. 0.50%
Tax-Free Short-Intermediate Bond
Fund............................... 0.50%
Cash Investment Fund................ 0.35%
Money Market Fund................... 0.40%
Tax-Free Money Market Fund.......... 0.35%
U.S. Treasury Money Market Fund..... 0.35%
</TABLE>
Because MCM voluntarily agreed to waive a portion of its fees for the Multi-
Season Growth Fund, the payment shown above for that Fund is less than the
contractual advisory fees of 1.00% of the first $500 million of the Multi-
Season Growth Fund's average daily net assets and .75% of the Fund's average
daily net assets over $500 million.
The advisor is entitled to receive a fee equal to 1.00% annually of the average
daily net assets of the Future Technology Fund.
MCM may, from time to time, make payments to banks, broker-dealers, financial
advisors or other financial institutions for certain services to the Funds
and/or their shareholders, including sub-administration, sub-transfer agency
and shareholder servicing. MCM may make such payments out of its own resources
and there are no additional costs to the Funds or their shareholders.
73
<PAGE>
Please note that Comerica Bank, an affiliate of the advisor, receives a fee
from the Funds for providing shareholder services to its customers who own
shares of the Funds.
Performance Information. The tables below contain performance information for
certain Funds created through the conversion of a common or collective trust
fund which had investment objectives and policies materially similar to those
of the corresponding Funds. Immediately before and after the conversion, the
same person managed both the common or collective trust fund and the
corresponding Fund.
The table for each Fund:
. includes the average annual total returns of the common or collective trust
fund and the average annual total returns of the corresponding Fund linked
together;
. assumes that net investment income and dividends have been reinvested;
. assumes that the common or collective trust fund paid the same levels of fees
and expenses as the corresponding Fund currently pays;
. does not reflect any potential negative impact on the common and collective
trust funds' performance if they had been subjected to the same regulatory
restrictions (the 1940 Act and the Internal Revenue Code) as the
corresponding Fund; and
. indicates past performance only and does not predict future results.
<TABLE>
<CAPTION>
Munder
Small
Company
Growth Russell
Period Ended Fund 2000
June 30, 1999 (Class Y)* Index**
------------- ---------- -------
<S> <C> <C>
1 Year................ (10.62)% 1.50%
3 Years............... 6.26 % 11.21%
5 Years............... 16.92 % 15.40%
10 Years.............. 15.59 % 12.39%
</TABLE>
--------
* Converted from collective trust fund to mutual fund on December 1, 1991.
** Russell 2000 Index performance shows total return in U.S. dollars but does
not reflect the deduction of fees, expenses and taxes. Source: Lipper
Analytical Services, Inc.
<TABLE>
<CAPTION>
FT/S&P
Munder Actuaries
International World
Period Ended Equity Fund Index ex.
June 30, 1999 (Class Y)* U.S.**
------------- ------------- ---------
<S> <C> <C>
1 Year........... 11.30% 8.78%
3 Years.......... 11.23% 8.09%
5 Years.......... 11.12% 7.74%
Inception on
September 30,
1990............ 10.76% 9.99%
</TABLE>
--------
* Converted from collective trust fund to mutual fund on December 1, 1991.
** FT/S&P Actuaries World Index ex. U.S. performance shows total return in
U.S. dollars but does not reflect the deduction of fees, expenses and
taxes. Source: Ibbotson Associates, Inc.
<TABLE>
<CAPTION>
Lehman
Brothers
Munder Gov't/Corp.
Period Ended Bond Fund Bond
June 30, 1999 (Class Y)* Index**
------------- ---------- -----------
<S> <C> <C>
1 Year............ 1.97% 2.70%
3 Years........... 6.54% 7.19%
5 Years........... 6.99% 7.76%
10 Years.......... 7.18% 8.12%
</TABLE>
--------
* Converted from collective trust fund to mutual fund on December 1, 1991.
** Lehman Brothers Government/Corporate Bond Index performance shows total
return in U.S. dollars but does not reflect the deduction of fees,
expenses and taxes. Source: Lipper Analytical Services, Inc.
<TABLE>
<CAPTION>
Munder
U.S. Lehman
Government Brothers
Income Gov't/Corp.
Period Ended Fund Bond
June 30, 1999 (Class Y)* Index**
------------- ---------- -----------
<S> <C> <C>
1 Year............ 2.37% 2.70%
3 Years........... 6.65% 7.19%
5 Years........... 7.03% 7.76%
10 Years.......... 7.48% 8.12%
</TABLE>
--------
* Converted from collective trust fund to mutual fund on July 5, 1994.
** Lehman Brothers Government/Corporate Bond Index performance shows total
return in U.S. dollars but does not reflect the deduction of fees,
expenses and taxes. Source: Lipper Analytical Services, Inc.
74
<PAGE>
<TABLE>
<CAPTION>
Lehman
Munder Brothers
Intermediate Intermediate
Period Ended Bond Fund Gov't/Bond
June 30, 1999 (Class Y)* Index**
------------- ------------ ------------
<S> <C> <C>
1 Year................................................ 3.08% 4.19%
3 Years............................................... 5.87% 6.63%
5 Years............................................... 6.16% 7.04%
10 Years.............................................. 6.83% 7.64%
</TABLE>
--------
*Converted from collective trust fund to mutual fund on December 1, 1991.
**Lehman Brothers Intermediate Government/Corporate Bond Index performance
shows total return in U.S. dollars but does not reflect the deduction of
fees, expenses and taxes. Source: Lipper Analytical Services, Inc.
<TABLE>
<CAPTION>
Munder
Tax-Free Lehman
Bond Fund 20-Year
Period Ended (Class Muni Bond
June 30, 1999 Y)* Index**
------------- --------- ---------
<S> <C> <C>
1 Year...................................................... 1.08% 2.54%
3 Years..................................................... 5.67% 7.01%
5 Years..................................................... 6.09% 7.47%
10 Years.................................................... 6.62% N/A
</TABLE>
--------
*Converted from common trust fund to mutual fund on July 21, 1994.
**Lehman 20-Year Municipal Bond Index performance shows total return in U.S.
dollars but does not reflect the deduction of fees, expenses and taxes.
Source: Lipper Analytical Services, Inc.
Indices
The Russell 2000 Index is a capitalization weighted total return index which is
comprised of 2,000 of the smallest capitalized U.S. domiciled companies whose
stock is traded in the United States on the New York Stock Exchange, American
Stock Exchange and the NASDAQ.
The FT/S&P Actuaries World Index ex. U.S. is an unmanaged index used to portray
the global equity market excluding the U.S. The Index is weighted based on the
market capitalization of those stocks selected to represent each country and
includes gross reinvestment of dividends.
The Lehman Brothers Government/Corporate Bond Index is a weighted composite of
(i) Lehman Brothers Government Bond Index, which is comprised of all publicly
issued, non-convertible debt of the U.S. Government or any agency thereof,
quasi-Federal corporations, and corporate debt guaranteed by the U.S.
Government and (ii) Lehman Brothers Corporate Bond Index, which is comprised of
all public fixed-rate, non-convertible investment-grade domestic corporate
debt, excluding collateralized mortgage obligations.
The Lehman Brothers Intermediate Government/Corporate Bond Index is a weighted
composite of (i) Lehman Brothers Intermediate Government Bond Index, which is
comprised of all publicly issued, non-convertible debt of the U.S. Government
or any agency thereof, quasi-Federal corporations and corporate debt guaranteed
by the U.S. Government with a maturity of between one and ten years and (ii)
Lehman Brothers Corporate Bond Index.
The Lehman Brothers 20-Year Municipal Bond Index is a performance benchmark for
the long-term investment-grade tax-exempt bond market.
Performance of Framlington Account Managed by the Sub-Advisor. The table below
contains certain performance information provided by the sub-advisor relating
to an account managed by the sub-advisor which has investment objectives,
policies and strategies substantially similar to the Framlington Healthcare
Fund. In the case of the Healthcare portfolio performance, the data relates to
a unit trust organized under the laws of the United Kingdom managed by the same
personnel of the sub-advisor with substantially similar investment objectives,
policies and strategies to the Framlington Healthcare Fund.
The trust account performance is provided by Standard & Poor's Micropal, an
independent research organization that is a recognized source of performance
data in the UK unit trust industry. The data is U.S. dollar adjusted on the
basis of exchange rates provided by Datastream using WM/Reuters closing rates.
The performance figures are net of brokerage commissions, actual investment
advisory fees and initial sales charges. The data assumes the reinvestment of
net income and capital gain distributions. The trust account returns are
calculated using beginning offer and ending bid prices for periods ended
December 31, 1998.
You should not rely on the following performance data of the sub-advisor's
client accounts as an indication of future performance of the Framlington
75
<PAGE>
Healthcare Fund. It should be noted that the management of the Fund will be
affected by regulatory requirements under the 1940 Act and requirements of the
Internal Revenue Code to qualify as a regulated investment company which if
applied to the accounts may have lowered the account's performance.
<TABLE>
<CAPTION>
S&P
Healthcare
U.K. Composite
Period Ended Health Index Capital
December 31, 1998 Portfolio Change
----------------- --------- -------------
<S> <C> <C>
1 Year.................................................. 10.85 % 3.65 %
3 Years................................................. (0.44)% (6.90)%
5 Years................................................. 117.99 % 103.85 %
10 Years................................................ 409.12 % 376.08 %
Inception on April 30, 1987............................. 411.08 % 239.64 %
</TABLE>
Performance for the Health trust account is calculated on an offer-bid basis;
U.S. dollar adjusted total return net of all management fees but not reflective
of U.K. tax, which differs from the SEC method total return calculation.
Source: Standard & Poor's Micropal.
S&P Healthcare Composite Index performance shows capital change in U.S. dollars
but does not reflect the deduction of fees, expenses and taxes. Source:
Datastream.
The S&P Healthcare Composite Index is the composite Healthcare section of the
S&P 500 Index as defined and tracked by S&P. This index covers securities
listed in the United States only.
Portfolio Managers
Balanced Fund, Focus Growth Fund, Growth Opportunities Fund, NetNet Fund,
Small-Cap Value Fund And Small Company Growth Fund
A committee of professional portfolio managers employed by MCM makes investment
decisions for the Funds.
Equity Income Fund
Otto Hinzmann, Jr. and Geoffrey A. Wilson jointly manage the Fund. Mr.
Hinzmann, Vice President and Director of Equity Management of MCM or of Old
MCM, Inc. ("Old MCM"), the predecessor to MCM, since January 1987, has been the
Fund's portfolio manager since February 1995. Mr. Wilson, Senior Portfolio
Manager of MCM, has managed the Fund since August 1999. Mr. Wilson has managed
individual, foundation and endowment portfolios in MCM's Private Management
Group since 1985.
Future Technology Fund
A team of professional portfolio managers employed by MCM makes investment
decisions for the Fund.
International Equity Fund
Todd B. Johnson and Theodore Miller jointly manage the Fund. Mr. Johnson,
President and Chief Investment Officer of World, and Mr. Miller, senior
portfolio manager of the Fund, have managed the Fund since July 1992 and
October 1996, respectively. Mr. Miller previously worked as the primary analyst
for the Fund (1996) and for Interacciones Global Inc. (1993-1995).
Micro-Cap Equity Fund
Carl Wilk and Jeffrey Schwartz jointly manage the Fund. Mr. Wilk, Senior
Portfolio Manager of MCM, has been the Fund's portfolio manager since its
inception. He is also on the management committee for the Small Company Growth
Fund. Prior to joining MCM in 1995, he was a Senior Equity Research Analyst at
Woodbridge Capital Management. Mr. Schwartz, Senior Portfolio Manager of MCM,
has been the Fund's portfolio manager since April 1998. He is also on the
management committee of the Small Company Growth Fund. Mr. Schwartz joined MCM
in 1992.
Multi-Season Growth Fund
Leonard J. Barr II and John Richardson jointly manage the Fund. Mr. Barr,
Senior Vice President and Director of Research of MCM, has been the Fund's
portfolio manager since the Fund's inception in April 1993. Mr. Richardson has
managed the Fund since August 1999. Mr. Richardson, Senior Partner & Director
of Equity Portfolio Management, has managed equity and balanced portfolios
since joining MCM in 1985.
76
<PAGE>
Real Estate Equity Investment Fund
Robert E. Crosby is manager of the Real Estate Equity Investment Fund. Mr.
Crosby has managed the Fund since March 1998 and was the Fund's primary analyst
from 1996-1998. Mr. Crosby serves as portfolio manager for separately managed
institutional accounts, and has been with MCM since 1993.
Framlington Emerging Markets Fund
A committee of professional portfolio managers employed by Framlington makes
investment decisions for the Fund. William Calvert heads the committee. Mr.
Calvert has been employed by Framlington since 1997. Prior to that he was
employed by Edmond de Rothschild Securities.
Framlington Global Financial Services Fund
A committee of professional managers employed by MCM or Framlington makes
decisions for the Fund.
Framlington Healthcare Fund
Antony Milford, head of the Specialist Desk for Framlington, has been the
Fund's primary portfolio manager since the Fund's inception. Mr. Milford has
managed funds for Framlington since 1971.
Framlington International Growth Fund
A committee of professional portfolio managers employed by Framlington makes
investment decisions for the Fund. Simon Key, Chief Investment Officer of
Framlington, heads the committee. Mr. Key has managed funds for Framlington
since 1989.
Bond Fund, Intermediate Bond Fund and U.S. Government Income Fund
Anne K. Kennedy and Peter G. Root jointly manage the Bond Fund, the
Intermediate Bond Fund and U.S. Government Income Fund. Ms. Kennedy, Vice
President and Director of Portfolio Management of MCM or of Old MCM, the
predecessor to MCM since 1991, has managed the Bond Fund and the U.S.
Government Income Fund since January 2000 and the Intermediate Bond Fund since
March 1995. Mr. Root, Vice President and Chief Investment Officer of Fixed
Income of MCM since March 1995, has managed the Bond Fund and Intermediate Bond
Fund since January 2000 and the U.S. Government Income Fund since March 1995.
Mr. Root joined Old MCM in 1991.
International Bond Fund
Sharon E. Fayolle and Peter G. Root jointly manage the International Bond Fund.
Ms. Fayolle, Vice President and Director of Money Market Trading for MCM or Old
MCM, has managed the Fund since 1996. Prior to that she managed an
international portfolio for Ford Motor Company. Mr. Root, Vice President and
Chief Investment Officer of Fixed Income of MCM since March 1995, has managed
the Fund since January 2000. Mr. Root joined Old MCM in 1991.
Michigan Tax-Free Bond Fund, Tax-Free Bond Fund And Tax-Free Short-Intermediate
Bond Fund
Talmadge D. Gunn and Roger A. Soderstrom jointly manage the Tax-Free Funds. Mr.
Gunn, Vice President and Director of Tax-Exempt Trading of MCM since 1993, has
managed the Funds since their inception. Mr. Soderstrom, a Senior Portfolio
Manager with MCM since 1997, has managed the Funds since August 1999. Prior to
joining MCM in 1997, Mr. Soderstrom managed the core fixed income portfolio at
Foremost Corporation of America (1987-1997).
77
<PAGE>
Financial Highlights
--------------------------------------------------------------------------------
The financial highlights table is intended to help shareholders understand each
Fund's financial performance for the past 5 years (or, if shorter, the period
of the Funds' operations). Certain information reflects financial results for a
single Fund share. The total returns in the table represent the rate that an
investor would have earned (or lost) on an investment in the Fund (assuming
reinvestment of all dividends and distributions). The information has been
audited by Ernst & Young LLP, independent auditors, except that, for periods
ended June 30, 1995 for the Multi-Season Growth Fund and the Money Market Fund,
such financial highlights were audited by another independent auditor. The
Future Technology Class Y shares had not yet commenced operations on June 30,
1999. The independent auditor's report along with each Fund's financial
statements, are included in the annual reports of the Funds, and are
incorporated by reference into the Statement of Additional Information. You may
obtain the annual reports without charge by calling (800) 438-5789.
<TABLE>
<CAPTION>
Balanced Fund(a)
------------------------------------------------------------------
Year Year Year Year Period Year
Ended Ended Ended Ended Ended Ended
6/30/99(f) 6/30/98 6/30/97(f) 6/30/96(f) 6/30/95(d) 2/28/95(e)
---------- ------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 13.48 $ 13.01 $ 12.35 $ 10.77 $ 9.95 $ 10.36
------- ------- ------- ------- ------- -------
Income from investment
operations:
Net investment income... 0.26 0.37 0.31 0.30 0.10 0.21
Net realized and
unrealized gain/(loss)
on investments......... 1.02 1.62 1.31 1.55 0.85 (0.42)
------- ------- ------- ------- ------- -------
Total from investment
operations............. 1.28 1.99 1.62 1.85 0.95 (0.21)
------- ------- ------- ------- ------- -------
Less distributions:
Dividends from net
investment income...... (0.26) (0.35) (0.30) (0.27) (0.13) (0.20)
Distributions from net
realized gains......... (1.52) (1.17) (0.66) - - -
------- ------- ------- ------- ------- -------
Total distributions..... (1.78) (1.52) (0.96) (0.27) (0.13) (0.20)
------- ------- ------- ------- ------- -------
Net asset value, end of
period................. $ 12.98 $ 13.48 $ 13.01 $ 12.35 $ 10.77 $ 9.95
======= ======= ======= ======= ======= =======
Total return (b)........ 11.21% 16.23% 13.91% 17.35% 9.57% (1.91)%
======= ======= ======= ======= ======= =======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's)...... $15,816 $47,215 $70,314 $57,637 $48,844 $45,610
Ratio of operating
expenses to average net
assets................. 0.97% 0.92% 0.97% 0.90% 0.91%(c) 0.97%
Ratio of net investment
income to average net
assets................. 2.09% 2.66% 2.55% 2.54% 2.76%(c) 2.14%
Portfolio turnover rate. 116% 79% 125% 197% 52% 116%
Ratio of operating
expenses to average net
assets without waivers. 0.97% 0.92% 0.97% 1.01% 1.26%(c) 1.32%
</TABLE>
--------
(a) The Munder Balanced Fund Class Y Shares commenced operations on April 13,
1993.
(b) Total return represents aggregate total return for the period indicated and
does not reflect any applicable sales charges.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(f) Per share numbers have been calculated using the average shares method.
78
<PAGE>
<TABLE>
<CAPTION>
Focus
Growth Fund (a)
---------------
Period
Ended
6/30/99
---------------
<S> <C>
Net asset value, beginning of period........................... $ 10.00
-------
Income from investment operations:
Net investment loss............................................ (0.02)
Net realized and unrealized gain on investments................ 2.47
-------
Total from investment operations............................... 2.45
-------
Less distributions:
Distributions in excess of net investment income............... (0.02)
-------
Total distributions............................................ (0.02)
-------
Net asset value, end of period................................. $ 12.43
=======
Total return (b)............................................... 24.50%
=======
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's)........................... $13,011
Ratio of operating expenses to average net assets.............. 1.65%(c)
Ratio of net investment income to average net assets........... (0.33)%(c)
Portfolio turnover rate........................................ 107%
Ratio of operating expenses to average net assets without
expenses reimbursed........................................... N/A
</TABLE>
--------
(a) The Munder Focus Growth Fund commenced operations on November 11, 1998.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
79
<PAGE>
<TABLE>
<CAPTION>
Growth
Opportunities
Equity Income Fund(a) Fund(a)
-------------------------------------------------- -------------------
Year Year Year Year Period Year Period
Ended Ended Ended Ended Ended Ended Ended
6/30/99 6/30/98 6/30/97(g) 6/30/96(g) 6/30/95(d) 6/30/99 6/30/98
------- ------- ---------- ---------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 15.64 $ 15.23 $ 13.05 $ 11.14 $10.43 $ 10.02 $ 10.00
------- ------- ------- ------- ------ ------- -------
Income from investment
operations:
Net investment income... 0.25 0.32 0.35 0.35 0.11 (0.02) 0.01
Net realized and/or
unrealized gain on
investments............ 0.72 2.97 3.14 1.98 0.79 0.85 0.01
------- ------- ------- ------- ------ ------- -------
Total from investment
operations............. 0.97 3.29 3.49 2.33 0.90 0.83 0.02
------- ------- ------- ------- ------ ------- -------
Less distributions:
Dividends from net
investment income...... (0.22) (0.32) (0.35) (0.33) (0.19) (0.00)(f) --
Distributions from net
realized gains......... (1.39) (2.56) (0.96) (0.09) -- -- --
------- ------- ------- ------- ------ ------- -------
Total distributions..... (1.61) (2.88) (1.31) (0.42) (0.19) (0.00)(f) --
------- ------- ------- ------- ------ ------- -------
Net asset value, end of
period................. $ 15.00 $ 15.64 $ 15.23 $ 13.05 $11.14 $ 10.85 $ 10.02
======= ======= ======= ======= ====== ======= =======
Total return (b)........ 7.22% 23.32% 28.43% 21.26% 8.69% 8.44% 0.20%
======= ======= ======= ======= ====== ======= =======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's)...... $39,368 $34,840 $29,674 $20,464 $7,860 $ 3,434 $ 1,573
Ratio of operating
expenses to average net
assets................. 0.96% 0.94% 0.95% 0.96% 0.84%(c) 1.18% 1.15%(c)
Ratio of net investment
income to average net
assets................. 1.69% 2.03% 2.53% 2.81% 3.58%(c) (0.28)% 3.18%(c)
Portfolio turnover rate. 50% 73% 62% 37% 13% 122% 0%
Ratio of operating
expenses to average net
assets without waivers
and/or expenses
reimbursed............. 0.96% 0.94% 0.95% 1.03% 1.26%(c) 1.66% 1.16%(c)
</TABLE>
--------
(a) The Munder Equity Income Fund Class Y Shares commenced operations on July
5, 1994. The Munder Growth Opportunities Fund commenced operations on June
24, 1998.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(f) Amount represents less than $0.01 per share.
(g) Per share numbers have been calculated using the average shares method.
80
<PAGE>
<TABLE>
<CAPTION>
International Equity Fund(a)
---------------------------------------------------------------------
Year Year Year Year Period Year
Ended Ended Ended Ended Ended Ended
6/30/99(f) 6/30/98 6/30/97(f) 6/30/96(f) 6/30/95(d) 2/28/95(e,f)
---------- -------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 15.10 $ 15.80 $ 15.15 $ 13.45 $ 12.30 $ 13.68
------- -------- -------- ------- ------- -------
Income from investment
operations:
Net investment income... 0.19 0.19 0.18 0.19 0.12 0.20
Net realized and
unrealized gain/(loss)
on investments......... 1.46 0.33 2.32 1.64 1.03 (1.47)
------- -------- -------- ------- ------- -------
Total from investment
operations............. 1.65 0.52 2.50 1.83 1.15 (1.27)
------- -------- -------- ------- ------- -------
Less distributions:
Dividends from net
investment income...... (0.20) (0.22) (0.26) (0.13) -- (0.05)
Distributions from net
realized gains......... (0.23) (1.00) (1.59) -- -- --
Distributions from
capital................ -- -- -- -- -- (0.06)
------- -------- -------- ------- ------- -------
Total distributions..... (0.43) (1.22) (1.85) (0.13) -- (0.11)
------- -------- -------- ------- ------- -------
Net asset value, end of
period................. $ 16.32 $ 15.10 $ 15.80 $ 15.15 $ 13.45 $ 12.30
======= ======== ======== ======= ======= =======
Total return (b)........ 11.30% 4.48% 18.35% 13.63% 9.35% (9.33)%
======= ======== ======== ======= ======= =======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's)...... $98,681 $102,081 $107,831 $89,435 $75,000 $68,263
Ratio of operating
expenses to average net
assets................. 1.04% 1.00% 1.01% 1.01% 0.96%(c) 0.93%
Ratio of net investment
income to average net
assets................. 1.32% 1.28% 1.23% 1.32% 2.82%(c) 1.56%
Portfolio turnover rate. 23% 41% 46% 75% 14% 20%
Ratio of operating
expenses to average net
assets without waivers. 1.04% 1.00% 1.01% 1.08% 1.21%(c) 1.18%
</TABLE>
--------
(a) The Munder International Equity Fund Class Y Shares commenced operations on
December 1, 1991.
(b) Total return represents aggregate total return for the period indicated and
does not reflect any applicable sales charges.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(f) Per share numbers have been calculated using the average shares method.
81
<PAGE>
<TABLE>
<CAPTION>
Micro-Cap Equity Fund(a)
----------------------------------
Year Year Period
Ended Ended Ended
6/30/99(d) 6/30/98(d) 6/30/97(d)
---------- ---------- ----------
<S> <C> <C> <C>
Net asset value, beginning of period....... $ 17.05 $ 12.83 $10.00
------- ------- ------
Income from investment operations:
Net investment income/(loss)............... (0.14) (0.13) (0.03)
Net realized and unrealized gain on
investments............................... 1.66 4.99 2.86
------- ------- ------
Total from investment operations........... 1.52 4.86 2.83
------- ------- ------
Less distributions:
Distributions from net realized gains...... (0.30) (0.64) --
------- ------- ------
Total distributions........................ (0.30) (0.64) --
------- ------- ------
Net asset value, end of period............. $ 18.27 $ 17.05 $12.83
======= ======= ======
Total return(b)............................ 9.43% 38.19% 28.30%
======= ======= ======
Ratios to average net assets/supplemental
data:
Net assets, end of period (in 000's)....... $17,543 $15,337 $2,279
Ratio of operating expenses to average net
assets.................................... 1.28% 1.28% 1.25%(c)
Ratio of net investment income to average
net assets................................ (0.94)% (0.72)% (0.63)%(c)
Portfolio turnover rate.................... 184% 172% 68%
Ratio of operating expenses to average net
assets without waivers and/or expenses
reimbursed................................ 1.39% 1.53% 7.65%(c)
</TABLE>
--------
(a) The Munder Micro-Cap Equity Fund Class Y Shares commenced operations on
December 26, 1996.
(b) Total return represents aggregate total return for the period indicated and
does not reflect any applicable sales charges.
(c) Annualized.
(d)Per share numbers have been calculated using the average shares method.
82
<PAGE>
<TABLE>
<CAPTION>
Multi-Season Growth Fund(a)
-------------------------------------------------------------------
Year Year Year Year Period Year
Ended Ended Ended Ended Ended Ended
6/30/99 6/30/98(f) 6/30/97(f) 6/30/96(f) 6/30/95(d,e,h) 12/31/94
-------- ---------- ---------- ---------- -------------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 21.66 $ 18.17 $ 14.94 $ 12.10 $ 10.43 $10.70
-------- -------- -------- -------- ------- ------
Income from investment
operations:
Net investment
income/(loss).......... 0.04 0.05 0.08 0.09 0.00(g) 0.04
Net realized and
unrealized gain/(loss)
on investments......... 2.25 4.38 3.94 3.22 1.67 (0.27)
-------- -------- -------- -------- ------- ------
Total from investment
operations............. 2.29 4.43 4.02 3.31 1.67 (0.23)
-------- -------- -------- -------- ------- ------
Less distributions:
Dividends from net
investment income...... (0.03) (0.02) (0.04) (0.07) -- --
Distributions from net
realized gains......... (1.58) (0.92) (0.75) (0.40) -- (0.04)
-------- -------- -------- -------- ------- ------
Total distributions..... (1.61) (0.94) (0.79) (0.47) -- (0.04)
-------- -------- -------- -------- ------- ------
Net asset value at end
of period.............. $ 22.34 $ 21.66 $ 18.17 $ 14.94 $ 12.10 $10.43
======== ======== ======== ======== ======= ======
Total return (b)........ 11.70% 25.28% 27.96% 27.85% 16.01% (2.17)%
======== ======== ======== ======== ======= ======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's)...... $314,558 $332,156 $176,027 $130,129 $87,604 $3,244
Ratio of operating
expenses to average net
assets................. 0.97% 0.96% 1.00% 1.01% 1.40%(c) 1.50%
Ratio of net investment
income/(loss) to
average net assets..... 0.17% 0.25% 0.50% 0.69% 0.53%(c) 0.29%
Portfolio turnover rate. 53% 34% 33% 54% 27% 48%
Ratio of operating
expenses to average net
assets without waivers
and/or expenses
reimbursed............. 1.14% 1.14% 1.25% 1.26% 1.72%(c) 2.53%
</TABLE>
--------
(a) The Munder Multi-Season Growth Fund Class Y Shares commenced operations on
August 16, 1993.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
December 31.
(e) On February 1, 1995, the Munder Capital Management replaced Munder Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(f) Per share numbers have been calculated using the average shares method.
(g) Amount represents less than $0.01 per share.
(h) On June 23, 1995, the Munder Multi-Season Growth Fund acquired the assets
and certain liabilities of the Ambassador Established Company Growth Fund.
83
<PAGE>
<TABLE>
<CAPTION>
NetNet Fund(a)
-------------------
Year Period
Ended Ended
6/30/99(d) 6/30/98
---------- -------
<S> <C> <C>
Net asset value, beginning of period.................... $ 20.69 $17.07
------- ------
Income from investment operations:
Net investment loss..................................... (0.20) (0.01)
Net realized and unrealized gain/(loss) on investments.. 24.27 3.63
------- ------
Total from investment operations........................ 24.07 3.62
------- ------
Less distributions:
Distributions from net realized gains................... (0.19) --
------- ------
Total distributions..................................... (0.19) --
------- ------
Net asset value at end of period........................ $ 44.57 $20.69
======= ======
Total return (b)........................................ 117.49% 20.97%
======= ======
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's).................... $12,672 $5,240
Ratio of operating expenses to average net assets....... 1.34% 1.30%(c)
Ratio of net investment income/(loss) to average net
assets................................................. (0.70)% (0.38)%(c)
Portfolio turnover rate................................. 22% 165%
Ratio of operating expenses to average net assets
without waivers and/or expenses reimbursed............. 1.34% 1.62%(c)
</TABLE>
--------
(a) The Munder NetNet Fund Class Y Shares commenced operations on June 1, 1998.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Per share numbers have been calculated using the average shares method.
84
<PAGE>
<TABLE>
<CAPTION>
Real Estate Equity Investment Fund(a)
-----------------------------------------------------
Year Year Year Period
Ended Ended Ended Year Ended Ended
6/30/99(e) 6/30/98(e) 6/30/97 6/30/96(e) 6/30/95(d)
---------- ---------- ------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 14.95 $ 14.40 $ 11.22 $ 10.09 $10.00
------- ------- ------- ------- ------
Income from investment
operations:
Net investment
income/(loss).......... 0.60 0.68 0.51 0.47 0.37
Net realized and
unrealized gain on
investments............ (1.62) 0.66 3.22 1.13 0.08
------- ------- ------- ------- ------
Total from investment
operations............. (1.02) 1.34 3.73 1.60 0.45
------- ------- ------- ------- ------
Less distributions:
Dividends from net
investment income...... (0.64) (0.65) (0.51) (0.47) (0.36)
Distributions in excess
of net investment
income................. -- -- (0.01) -- --
Distributions from net
realized gains......... (0.39) (0.14) -- -- --
Distributions from
capital................ (0.10) -- (0.03) -- --
------- ------- ------- ------- ------
Total distributions..... (1.13) (0.79) (0.55) (0.47) (0.36)
------- ------- ------- ------- ------
Net asset value, end of
period................. $ 12.80 $ 14.95 $ 14.40 $ 11.22 $10.09
======= ======= ======= ======= ======
Total return (b)........ (6.35)% 9.24% 33.79% 16.20% 4.64%
======= ======= ======= ======= ======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's)...... $68,856 $82,611 $48,206 $19,125 $4,989
Ratio of operating
expenses to average net
assets................. 1.02% 1.03% 1.10% 1.00% 1.25%(c)
Ratio of net investment
income to average net
assets................. 4.73% 4.40% 4.05% 4.50% 5.28%(c)
Portfolio turnover rate. 22% 15% 15% 17% 3%
Ratio of operating
expenses to average net
assets without waivers. 1.02% 1.03% 1.13% 1.27% 6.98%(c)
</TABLE>
--------
(a) The Munder Real Estate Equity Investment Fund Class Y Shares commenced
operations on October 3, 1994.
(b) Total return represents aggregate total return for the period indicated and
does not reflect any applicable sales charges.
(c) Annualized.
(d) On February 1, 1995, Munder Capital Management replaced Munder Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(e) Per share numbers have been calculated using the average shares method.
85
<PAGE>
<TABLE>
<CAPTION>
Small-Cap Value Fund (a)
---------------------------------
Year Year Period
Ended Ended Ended
6/30/99(d) 6/30/98(d) 6/30/97(e)
---------- ---------- ----------
<S> <C> <C> <C>
Net asset value, beginning of period........ $ 14.25 $ 12.04 $ 10.00
------- ------- -------
Income from investment operations:
Net investment income/(loss)................ 0.09 0.11 0.12
Net realized and unrealized gain on
investments ............................... (0.85) 2.84 1.96
------- ------- -------
Total from investment operations............ (0.76) 2.95 2.08
------- ------- -------
Less distributions:
Dividends from net investment income........ (0.09) (0.10) (0.04)
Dividends in excess of net investment
income..................................... -- -- --
Distributions from net realized gains....... (0.27) (0.64) --
------- ------- -------
Total distributions......................... (0.36) (0.74) (0.04)
------- ------- -------
Net asset value, end of period.............. $ 13.13 $ 14.25 $ 12.04
======= ======= =======
Total return(b)............................. (5.01)% 24.84% 20.86%
======= ======= =======
Ratios to average net assets/supplemental
data:
Net assets, end of period (in 000's)........ $59,432 $71,251 $18,271
Ratio of operating expenses to average net
assets .................................... 0.98% 1.02% 1.13%(c)
Ratio of net investment income/(loss) to
average net assets ........................ 0.72% 0.81% 2.18%(c)
Portfolio turnover rate .................... 69% 53% 73%
Ratio of operating expenses to average net
assets without waivers..................... 0.98% 1.02% 1.26%(c)
</TABLE>
--------
(a) The Munder Small-Cap Value Fund Class Y Shares commenced operations on
December 26, 1996.
(b) Total return represents aggregate total return for the period indicated and
does not reflect any applicable sales charges.
(c) Annualized.
(d) Per share numbers have been calculated using the average shares method.
86
<PAGE>
<TABLE>
<CAPTION>
Small Company Growth Fund(a)
-------------------------------------------------------------------------
Year Year Year Year Period Year
Ended Ended Ended Ended Ended Ended
6/30/99(f) 6/30/98(f) 6/30/97(f) 6/30/96(f) 6/30/95(e) 2/28/95(d)
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 20.26 $ 21.84 $ 21.21 $ 15.33 $ 13.93 $ 14.38
-------- -------- -------- -------- ------- -------
Income from investment
operations:
Net investment loss..... (0.03) (0.07) (0.07) (0.07) (0.01) (0.02)
Net realized and
unrealized gain/(loss)
on investments......... (2.17) 2.60 3.69 7.19 1.41 (0.41)
-------- -------- -------- -------- ------- -------
Total from investment
operations............. (2.20) 2.53 3.62 7.12 1.40 (0.43)
-------- -------- -------- -------- ------- -------
Less distributions:
Dividends in excess of
net investment income.. (0.02) -- -- -- -- --
Distributions from net
realized gains......... (1.21) (4.11) (2.99) (1.24) -- (0.02)
-------- -------- -------- -------- ------- -------
Total distributions..... (1.23) (4.11) (2.99) (1.24) -- (0.02)
-------- -------- -------- -------- ------- -------
Net asset value, end of
period................. $ 16.83 $ 20.26 $ 21.84 $ 21.21 $ 15.33 $ 13.93
======== ======== ======== ======== ======= =======
Total return (b)........ (10.62)% 12.57% 19.26% 48.65% 10.05% (3.00)%
======== ======== ======== ======== ======= =======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's)...... $163,827 $209,081 $152,772 $107,492 $79,968 $72,207
Ratio of operating
expenses to average net
assets................. 0.97% 0.95% 0.97% 0.96% 0.96%(c) 0.98%
Ratio of net investment
loss to average net
assets................. (0.19)% (0.32)% (0.37)% (0.41)% (0.16)%(c) (0.15)%
Portfolio turnover rate. 108% 123% 98% 98% 39% 45%
Ratio of operating
expenses to average net
assets without waivers. 0.97% 0.95% 0.97% 1.03% 1.21%(c) 1.23%
</TABLE>
--------
(a) The Munder Small Company Growth Fund Class Y Shares commenced operations on
December 1, 1991.
(b) Total return represents aggregate total return for the period indicated and
does not reflect any applicable sales charges.
(c) Annualized.
(d) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(e) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(f) Per share numbers have been calculated using the average shares method.
87
<PAGE>
<TABLE>
<CAPTION>
Framlington
Global
Financial
Framlington Services
Emerging Markets Fund(a) Fund(a)
--------------------------------- -------------------
Year Year Period Year Period
Ended Ended Ended Ended Ended
6/30/99(d) 6/30/98(d) 6/30/97(d) 6/30/99 6/30/98
---------- ---------- ---------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 9.00 $ 12.92 $ 10.00 $10.19 $10.00
------- ------- ------- ------ ------
Income from investment
operations:
Net investment
income/(loss).......... 0.05 0.13 0.07 0.10 0.01
Net realized and
unrealized gain/(loss)
on investments......... 2.59 (3.72) 2.88 (0.23)(e) 0.18
------- ------- ------- ------ ------
Total from investment
operations............. 2.64 (3.59) 2.95 (0.13) 0.19
------- ------- ------- ------ ------
Less distributions:
Dividends from net
investment income...... -- (0.06) (0.03) (0.04) --
Distributions from net
realized gains......... -- (0.05) -- -- --
Distributions in excess
of net realized gains.. -- (0.22) -- -- --
------- ------- ------- ------ ------
Total distributions..... -- (0.33) (0.03) (0.04) --
------- ------- ------- ------ ------
Net asset value, end of
period................. $ 11.64 $ 9.00 $ 12.92 $10.02 $10.19
======= ======= ======= ====== ======
Total return(b)......... 29.33% (28.12)% 29.51% (1.29)% 1.90%
======= ======= ======= ====== ======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's)...... $17,857 $14,332 $ 4,826 $2,947 $1,834
Ratio of operating
expenses to average net
assets................. 1.60% 1.64% 1.54%(c) 1.18% 1.14%(c)
Ratio of net investment
income/(loss) to
average net assets..... 0.64% 1.18% 1.39%(c) 1.16% 3.60%(c)
Portfolio turnover rate. 159% 94% 46% 75% 0%
Ratio of operating
expenses to average net
assets without expenses
reimbursed............. 1.87% 1.89% 5.18%(c) 2.45% 1.14%(c)
</TABLE>
--------
(a) The Munder Framlington Emerging Markets Fund, commenced operations on
December 31, 1996. The Munder Framlington Global Financial Services Fund
commenced operations on June 24, 1998.
(b) Total return represents aggregate total return for the period indicated and
does not reflect any applicable sales charges.
(c) Annualized.
(d) Per share numbers have been calculated using the average shares method.
(e) The amount shown at this caption for each share outstanding throughout the
period may not accord with the change in aggregate gains and losses in the
portfolio securities for the period because of the timing of purchases and
withdrawal of shares in relation to the fluctuating market values of the
portfolio.
88
<PAGE>
<TABLE>
<CAPTION>
Framlington Healthcare Framlington International Growth
Fund(a) Fund(a)
----------------------------- --------------------------------
Year Year Period Year Year Period
Ended Ended Ended Ended Ended Ended
6/30/99(d) 6/30/98(d) 6/30/97 6/30/99(d) 6/30/98(d) 6/30/97(d)
---------- ---------- ------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $11.84 $10.89 $10.00 $ 11.94 $ 11.35 $ 10.00
------ ------ ------ ------- ------- -------
Income from investment
operations:
Net investment
income/(loss).......... (0.11) (0.11) (0.03) 0.01 0.05 0.07
Net realized and
unrealized gain/(loss)
on investments......... (1.13) 1.06 0.92 0.87 0.61 1.28
------ ------ ------ ------- ------- -------
Total from investment
operations............. (1.24) 0.95 0.89 0.88 0.66 1.35
------ ------ ------ ------- ------- -------
Less distributions:
Dividends from net
investment income...... -- -- -- -- (0.03) --
Distributions from net
realized gains......... (0.08) -- -- (0.01) (0.03) --
Distributions in excess
of net realized gains.. (0.02) -- -- -- (0.01) --
------ ------ ------ ------- ------- -------
Total distributions..... (0.10) -- -- (0.01) (0.07) --
------ ------ ------ ------- ------- -------
Net asset value, end of
period................. $10.50 $11.84 $10.89 $ 12.81 $ 11.94 $ 11.35
====== ====== ====== ======= ======= =======
Total return(b)......... (10.42)% 8.72% 8.90% 7.35% 5.86% 13.50%
====== ====== ====== ======= ======= =======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's)...... $5,303 $5,458 $2,086 $60,940 $64,643 $23,831
Ratio of operating
expenses to average net
assets................. 1.36% 1.37% 1.30%(c) 1.36% 1.37% 1.30%(c)
Ratio of net investment
income/(loss) to
average net assets..... (1.03)% (0.95)% (0.70)%(c) 0.08% 0.46% 1.26%(c)
Portfolio turnover rate. 49% 47% 14% 66% 38% 15%
Ratio of operating
expenses to average net
assets without expenses
reimbursed............. 1.67% 2.15% 7.08%(c) 1.51% 1.57% 2.31%(c)
</TABLE>
--------
(a) The Munder Framlington Healthcare Fund and The Munder Framlington
International Growth Fund Class Y Shares both commenced operations on
December 31, 1996.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Per share numbers have been calculated using the average shares method.
89
<PAGE>
<TABLE>
<CAPTION>
Bond Fund(a)
--------------------------------------------------------------------
Year Year Year Year Period Year
Ended Ended Ended Ended Ended Ended
6/30/99(e) 6/30/98(e) 6/30/97 6/30/96 6/30/95(d) 2/28/95(e,f)
---------- ---------- -------- -------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 9.99 $ 9.58 $ 9.53 $ 9.70 $ 9.31 $ 9.91
-------- -------- -------- -------- -------- --------
Income from investment
operations:
Net investment income... 0.60 0.61 0.63 0.64 0.21 0.64
Net realized and
unrealized gain/(loss)
on investments......... (0.40) 0.39 0.03 (0.21) 0.39 (0.64)
-------- -------- -------- -------- -------- --------
Total from investment
operations............. 0.20 1.00 0.66 0.43 0.60 --
-------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net
investment income...... (0.57) (0.59) (0.61) (0.60) (0.21) (0.60)
Total distributions..... (0.57) (0.59) (0.61) (0.60) (0.21) (0.60)
-------- -------- -------- -------- -------- --------
Net asset value, end of
period................. $ 9.62 $ 9.99 $ 9.58 $ 9.53 $ 9.70 $ 9.31
======== ======== ======== ======== ======== ========
Total return(b)......... 1.97% 10.72% 7.09% 4.50% 6.48% 0.70%
======== ======== ======== ======== ======== ========
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's)...... $200,753 $221,427 $113,493 $113,020 $146,741 $141,704
Ratio of operating
expenses to average net
assets................. 0.72% 0.72% 0.71% 0.70% 0.70%(c) 0.67%
Ratio of net investment
income to average net
assets................. 6.02% 6.18% 6.59% 6.51% 6.72%(c) 6.82%
Portfolio turnover rate. 142% 222% 279% 507% 99% 165%
Ratio of operating
expenses to average net
assets without waivers. 0.72% 0.72% 0.71% 0.79% 0.94%(c) 0.91%
</TABLE>
--------
(a) The Munder Bond Fund Class Y Shares commenced operations on December 1,
1991.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) Per share numbers have been calculated using the average shares method.
(f) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
90
<PAGE>
<TABLE>
<CAPTION>
Intermediate Bond Fund(a)
-------------------------------------------------------------------
Year Year Year Year Period Year
Ended Ended Ended Ended Ended Ended
6/30/99(f) 6/30/98(f) 6/30/97(f) 6/30/96 6/30/95(d) 2/28/95(e)
---------- ---------- ---------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 9.50 $ 9.33 $ 9.31 $ 9.51 $ 9.27 $ 9.91
-------- -------- -------- -------- -------- --------
Income from investment
operations:
Net investment income... 0.54 0.57 0.57 0.60 0.23 0.60
Net realized and
unrealized gain/(loss)
on investments......... (0.25) 0.16 0.03 (0.20) 0.24 (0.59)
-------- -------- -------- -------- -------- --------
Total from investment
operations............. 0.29 0.73 0.60 0.40 0.47 0.01
-------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net
investment income...... (0.53) (0.56) (0.58) (0.60) (0.23) (0.64)
Distributions from net
realized gains......... -- -- -- -- -- (0.01)
-------- -------- -------- -------- -------- --------
Total distributions..... (0.53) (0.56) (0.58) (0.60) (0.23) (0.65)
-------- -------- -------- -------- -------- --------
Net asset value, end of
period................. $ 9.26 $ 9.50 $ 9.33 $ 9.31 $ 9.51 $ 9.27
======== ======== ======== ======== ======== ========
Total return (b)........ 3.08% 7.99% 6.60% 4.29% 5.12% 0.78%
======== ======== ======== ======== ======== ========
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's)...... $193,396 $226,856 $161,606 $182,937 $157,484 $162,185
Ratio of operating
expenses to average net
assets................. 0.70% 0.68% 0.68% 0.69% 0.70%(c) 0.68%
Ratio of net investment
income to average net
assets................. 5.63% 6.02% 6.16% 6.33% 7.37%(c) 6.96%
Portfolio turnover rate. 128% 194% 825% 494% 84% 80%
Ratio of operating
expenses to average net
assets without waivers. 0.70% 0.68% 0.68% 0.77% 0.94%(c) 0.93%
</TABLE>
--------
(a) The Munder Intermediate Bond Fund Class Y Shares commenced operations on
December 1, 1991.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(f) Per share numbers have been calculated using the average shares method.
91
<PAGE>
<TABLE>
<CAPTION>
International Bond Fund(a)
---------------------------
Year Year Period
Ended Ended Ended
6/30/99(d) 6/30/98 6/30/97
---------- ------- -------
<S> <C> <C> <C>
Net asset value, beginning of period .......... $ 9.68 $ 9.83 $ 10.00
------- ------- -------
Income from investment operations:
Net investment income.......................... 0.34 0.22 0.25
Net realized and unrealized gain/(loss) on
investments................................... 0.10 (0.11) (0.34)
------- ------- -------
Total from investment operations............... 0.44 0.11 (0.09)
------- ------- -------
Less distributions:
Dividends from net investment income........... (0.20) (0.24) (0.08)
Distributions from net realized gains.......... (0.15) (0.02) --
------- ------- -------
Total distributions ........................... (0.35) (0.26) (0.08)
------- ------- -------
Net asset value, end of period................. $ 9.77 $ 9.68 $ 9.83
======= ======= =======
Total return(b)................................ 4.21% 1.12% (0.90)%
======= ======= =======
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's)........... $51,193 $49,834 $51,679
Ratio of operating expenses to average net
assets........................................ 0.89% 0.86% 0.89%(c)
Ratio of net investment income to average net
assets ....................................... 3.26% 3.78% 3.86%(c)
Portfolio turnover rate ....................... 59% 81% 75%
Ratio of operating expenses to average net
assets without waivers........................ 0.89% 0.86% 0.93%(c)
</TABLE>
--------
(a) The Munder International Bond Fund Class Y Shares commenced operations on
October 2, 1996.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Per share numbers have been calculated using the average shares method.
92
<PAGE>
<TABLE>
<CAPTION>
U.S. Government Income Fund(a)
-----------------------------------------------------------------
Year Year Year Year Period Period
Ended Ended Ended Ended Ended Ended
6/30/99 6/30/98 6/30/97 6/30/96(f) 6/30/95(d) 2/28/95(e)
------- ------- ------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ... $ 10.38 $ 10.09 $ 9.98 $ 10.30 $ 9.89 $ 10.00
------- ------- ------- ------- ------- -------
Income from investment
operations:
Net investment income... 0.62 0.62 0.68 0.74 0.24 0.44
Net realized and
unrealized gain/(loss)
on investments......... (0.37) 0.36 0.07 (0.27) 0.41 (0.07)
------- ------- ------- ------- ------- -------
Total from investment
operations............. 0.25 0.98 0.75 0.47 0.65 0.37
------- ------- ------- ------- ------- -------
Less distributions:
Dividends from net
investment income...... (0.58) (0.63) (0.64) (0.71) (0.24) (0.48)
Distributions from net
realized gains......... (0.01) (0.06) (0.00)(g) (0.08) -- --
Distributions in excess
of net realized gains.. (0.01) -- -- -- -- --
------- ------- ------- ------- ------- -------
Total distributions .... (0.60) (0.69) (0.64) (0.79) (0.24) (0.48)
------- ------- ------- ------- ------- -------
Net asset value, end of
period................. $ 10.03 $ 10.38 $ 10.09 $ 9.98 $ 10.30 $ 9.89
======= ======= ======= ======= ======= =======
Total return (b) ....... 2.37% 9.97% 7.75% 4.58% 6.64% 3.85%
======= ======= ======= ======= ======= =======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's)...... $73,308 $70,842 $55,098 $46,695 $12,862 $11,647
Ratio of operating
expenses to average net
assets................. 0.71% 0.69% 0.71% 0.72% 0.72%(c) 0.70%(c)
Ratio of net investment
income to average net
assets................. 5.99% 6.25% 6.76% 7.17% 7.21%(c) 7.27%(c)
Portfolio turnover rate
....................... 23% 85% 130% 133% 42% 143%
Ratio of operating
expenses to average net
assets without waivers
....................... 0.71% 0.69% 0.71% 0.79% 0.96%(c) 0.94%
</TABLE>
--------
(a) The Munder U.S. Government Income Fund Class Y Shares commenced operations
on July 5, 1994.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(f) Per share numbers have been calculated using the average shares method.
(g) Amount represents less than $0.01 per share.
93
<PAGE>
<TABLE>
<CAPTION>
Michigan Tax-Free Bond Fund(a)
----------------------------------------------------------------------
Year Year Year Year Period Year
Ended Ended Ended Ended Ended Ended
6/30/99(e) 6/30/98 6/30/97(e) 6/30/96(e) 6/30/95(d,e) 2/28/95(e,f)
---------- ------- ---------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $10.06 $ 9.65 $ 9.35 $ 9.34 $ 9.24 $ 9.73
------ ------ ------ ------ ------ ------
Income from investment
operations:
Net investment income... 0.42 0.40 0.46 0.44 0.17 0.50
Net realized and
unrealized gain/(loss)
on investments......... (0.28) 0.47 0.29 0.07 0.10 (0.54)
------ ------ ------ ------ ------ ------
Total from investment
operations............. 0.14 0.87 0.75 0.51 0.27 (0.04)
------ ------ ------ ------ ------ ------
Less distributions:
Dividends from net
investment income...... (0.42) (0.44) (0.45) (0.50) (0.17) (0.45)
Distributions from net
realized gains......... (0.16) (0.02) (0.00)(g) -- -- --
------ ------ ------ ------ ------ ------
Total distributions..... (0.58) (0.46) (0.45) (0.50) (0.17) (0.45)
------ ------ ------ ------ ------ ------
Net asset value, end of
period................. $ 9.62 $10.06 $ 9.65 $ 9.35 $ 9.34 $ 9.24
------ ------ ------ ------ ------ ------
Total return (b)........ 1.24% 9.17% 8.26% 5.51% 2.92% 0.10%
====== ====== ====== ====== ====== ======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's)...... $1,513 $1,011 $ 652 $ 204 $ 771 $ 604
Ratio of operating
expenses to average net
assets................. 0.75% 0.73% 0.63% 0.26% 0.27%(c) 0.31%
Ratio of net investment
income to average net
assets................. 4.14% 4.54% 4.82% 5.26% 5.31%(c) 5.06%
Portfolio turnover rate. 33% 34% 19% 31% 8% 53%
Ratio of operating
expenses to average net
assets
without waivers........ 0.75% 0.73% 0.77% 0.84% 1.01%(c) 1.05%
</TABLE>
--------
(a) The Munder Michigan Tax-Free Bond Fund Class Y Shares commenced operations
on January 3, 1994.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) Per share numbers have been calculated using the average shares method.
(f) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(g) Amount represents less than $0.01 per share.
94
<PAGE>
<TABLE>
<CAPTION>
Tax-Free Bond Fund(a)
----------------------------------------------------------------
Year Year Year Year Period Period
Ended Ended Ended Ended Ended Ended
6/30/99 6/30/98 6/30/97(e) 6/30/96(e) 6/30/95(d,e) 2/28/95(f)
------- ------- ---------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $10.73 $10.51 $10.34 $10.29 $10.13 $10.06
------ ------ ------ ------ ------ ------
Income from investment
operations:
Net investment income... 0.45 0.52 0.50 0.49 0.16 0.30
Net realized and
unrealized gain/(loss)
on investments......... (0.32) 0.37 0.25 0.06 0.16 0.10
------ ------ ------ ------ ------ ------
Total from investment
operations............. 0.13 0.89 0.75 0.55 0.32 0.40
------ ------ ------ ------ ------ ------
Less distributions:
Dividends from net
investment income...... (0.45) (0.51) (0.50) (0.49) (0.16) (0.33)
Distributions from net
realized gains......... (0.39) (0.16) (0.08) (0.01) -- --
------ ------ ------ ------ ------ ------
Total distributions..... (0.84) (0.67) (0.58) (0.50) (0.16) (0.33)
------ ------ ------ ------ ------ ------
Net asset value, end of
period................. $10.02 $10.73 $10.51 $10.34 $10.29 $10.13
====== ====== ====== ====== ====== ======
Total return (b)........ 1.08% 8.70% 7.40% 5.38% 3.17% 4.08%
====== ====== ====== ====== ====== ======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's)...... $2,827 $4,123 $3,946 $1,929 $1,498 $ 953
Ratio of operating
expenses to average net
assets................. 0.73% 0.68% 0.70% 0.73% 0.77%(c) 0.68%(c)
Ratio of net investment
income to average net
assets................. 4.19% 4.85% 4.77% 4.67% 4.63%(c) 4.94%(c)
Portfolio turnover rate. 32% 61% 45% 15% 12% 50%
Ratio of operating
expenses to average net
assets without waivers. 0.73% 0.68% 0.70% 0.81% 1.01%(c) 0.92%(c)
</TABLE>
--------
(a) The Munder Tax-Free Bond Fund Class Y Shares commenced operations on July
21, 1994.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) Per share numbers have been calculated using the average shares method.
(f) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
95
<PAGE>
<TABLE>
<CAPTION>
Tax-Free Short-Intermediate Bond Fund(a)
------------------------------------------------------------------
Year Year Year Year Period Year
Ended Ended Ended Ended Ended Ended
6/30/99(f) 6/30/98 6/30/97(f) 6/30/96(f) 6/30/95(d) 2/28/95(e)
---------- ------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ... $10.47 $10.42 $10.34 $10.37 $ 10.17 $ 10.44
------ ------ ------ ------ ------- -------
Income from investment
operations:
Net investment income .. 0.41 0.45 0.44 0.45 0.15 0.42
Net realized and
unrealized gain/(loss)
on investments ........ (0.15) 0.14 0.11 (0.04) 0.20 (0.23)
------ ------ ------ ------ ------- -------
Total from investment
operations............. 0.26 0.59 0.55 0.41 0.35 0.19
------ ------ ------ ------ ------- -------
Less distributions:
Dividends from net
investment income...... (0.41) (0.45) (0.44) (0.44) (0.15) (0.44)
Distributions from net
realized gains......... (0.10) (0.09) (0.03) -- -- (0.02)
------ ------ ------ ------ ------- -------
Total distributions .... (0.51) (0.54) (0.47) (0.44) (0.15) (0.46)
------ ------ ------ ------ ------- -------
Net asset value, end of
period................. $10.22 $10.47 $10.42 $10.34 $ 10.37 $ 10.17
====== ====== ====== ====== ======= =======
Total return (b) ....... 2.42% 5.70% 5.40% 3.95% 3.43% 2.34%
====== ====== ====== ====== ======= =======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's)...... $7,095 $9,419 $7,511 $5,285 $11,100 $10,709
Ratio of operating
expenses to average net
assets................. 0.71% 0.69% 0.68% 0.71% 0.73%(c) 0.70%
Ratio of net investment
income to average net
assets................. 3.88% 4.32% 4.21% 4.16% 4.27%(c) 4.44%
Portfolio turnover rate
....................... 25% 27% 31% 20% 5% 52%
Ratio of operating
expenses to average net
assets without waivers
....................... 0.71% 0.69% 0.68% 0.79% 0.97%(c) 0.94%
</TABLE>
--------
(a) The Munder Tax-Free Short-Intermediate Bond Fund Class Y Shares commenced
operations on December 17, 1992.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(f) Per share numbers have been calculated using the average shares method.
96
<PAGE>
<TABLE>
<CAPTION>
Cash Investment Fund(a)
----------------------------------------------------------------
Year Year Year Year Period Year
Ended Ended Ended Ended Ended Ended
6/30/99 6/30/98 6/30/97 6/30/96 6/30/95(d) 2/28/95(e)
-------- -------- -------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- --------
Income from investment
operations:
Net investment income... 0.047 0.051 0.050 0.051 0.019 0.042
-------- -------- -------- -------- -------- --------
Total from investment
operations............. 0.047 0.051 0.050 0.051 0.019 0.042
-------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net
investment income...... (0.047) (0.051) (0.050) (0.051) (0.019) (0.042)
-------- -------- -------- -------- -------- --------
Total distributions..... (0.047) (0.051) (0.050) (0.051) (0.019) (0.042)
-------- -------- -------- -------- -------- --------
Net asset value, end of
period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ========
Total return (b)........ 4.84% 5.30% 5.07% 5.27% 1.87% 4.23%
======== ======== ======== ======== ======== ========
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's)...... $358,125 $327,417 $279,427 $317,825 $340,394 $324,793
Ratio of operating
expenses to average net
assets................. 0.53% 0.51% 0.55% 0.53% 0.52%(c) 0.55%
Ratio of net investment
income to average net
assets................. 4.72% 5.17% 4.96% 5.13% 5.64%(c) 4.27%
Ratio of operating
expenses to average net
assets without waivers. 0.53% 0.51% 0.55% 0.53% 0.54%(c) 0.58%
</TABLE>
--------
(a) The Munder Cash Investment Fund Class Y Shares commenced operations on
March 14, 1990.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
97
<PAGE>
<TABLE>
<CAPTION>
Money Market Fund(a)
--------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Period Ended Ended
6/30/99 6/30/98 6/30/97 6/30/96 6/30/95(d,e) 12/31/94
-------- ------- -------- -------- ------------ --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- ------- -------- -------- -------- --------
Income from investment
operations:
Net investment income... 0.046 0.050 0.049 0.051 0.024 0.040
-------- ------- -------- -------- -------- --------
Total from investment
operations............. 0.046 0.050 0.049 0.051 0.024 0.040
-------- ------- -------- -------- -------- --------
Less distributions:
Dividends from net
investment income...... (0.046) (0.050) (0.049) (0.051) (0.024) (0.040)
-------- ------- -------- -------- -------- --------
Total distributions..... (0.046) (0.050) (0.049) (0.051) (0.024) (0.040)
-------- ------- -------- -------- -------- --------
Net asset value, end of
period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======= ======== ======== ======== ========
Total return (b)........ 4.71% 5.14% 4.97% 5.17% 2.44% 3.88%
======== ======= ======== ======== ======== ========
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's)...... $139,388 $68,689 $124,621 $223,396 $263,513 $145,685
Ratio of operating
expenses to average net
assets................. 0.62% 0.64% 0.64% 0.62% 0.60%(c) 0.60%
Ratio of net investment
income to average net
assets................. 4.55% 5.03% 4.86% 5.09% 5.46%(c) 3.81%
Ratio of operating
expenses to average net
assets without waivers. 0.62% 0.64% 0.64% 0.62% 0.66%(c) 0.74%
</TABLE>
--------
(a) The Munder Money Market Fund Class Y Shares commenced operations on August
18, 1993.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
December 31.
(e) On February 1, 1995, Munder Capital Management replaced Munder Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
98
<PAGE>
<TABLE>
<CAPTION>
Tax-Free Money Market Fund(a)
------------------------------------------------------------
Year Year Year Year Period Year
Ended Ended Ended Ended Ended Ended
6/30/99 6/30/98 6/30/97 6/30/96 6/30/95(d) 2/28/95(e)
------- ------- ------- ------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- ------- -------
Income from investment
operations:
Net investment income... 0.027 0.031 0.030 0.031 0.012 0.026
------- ------- ------- ------- ------- -------
Total from investment
operations............. 0.027 0.031 0.030 0.031 0.012 0.026
------- ------- ------- ------- ------- -------
Less distributions:
Dividends from net
investment income...... (0.027) (0.031) (0.030) (0.031) (0.012) (0.026)
------- ------- ------- ------- ------- -------
Total distributions..... (0.027) (0.031) (0.030) (0.031) (0.012) (0.026)
------- ------- ------- ------- ------- -------
Net asset value, end of
period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= ======= =======
Total return (b)........ 2.76% 3.13% 3.04% 3.16% 1.19% 2.59%
======= ======= ======= ======= ======= =======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's)...... $21,791 $20,397 $22,951 $25,594 $23,430 $30,884
Ratio of operating
expenses to average net
assets................. 0.55% 0.54% 0.53% 0.53% 0.54%(c) 0.55%
Ratio of net investment
income to average net
assets................. 2.73% 3.08% 3.01% 3.14% 3.51%(c) 2.54%
Ratio of operating
expenses to average net
assets without waivers. 0.55% 0.54% 0.53% 0.55% 0.59%(c) 0.60%
</TABLE>
--------
(a) The Munder Tax-Free Money Market Fund Class Y Shares commenced operations
on March 14, 1990.
(b) Total return represents aggregate total return for period indicated.
(c) Annualized.
(d) Fiscal year changed to June 30. Prior to this, the fiscal year end was the
last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
99
<PAGE>
<TABLE>
<CAPTION>
U.S. Treasury Money Market Fund(a)
------------------------------------------------------------------
Year Year Year Period
Year Ended Ended Ended Ended Ended Year Ended
6/30/99(f) 6/30/98 6/30/97 6/30/96 6/30/95(d) 2/28/95(e)
---------- ------- -------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- -------- --------- --------- ---------
Income from investment
operations:
Net investment income... 0.044 0.049 0.048 0.049 0.018 0.039
------- ------- -------- --------- --------- ---------
Total from investment
operations............. 0.044 0.049 0.048 0.049 0.018 0.039
------- ------- -------- --------- --------- ---------
Less distributions:
Dividends from net
investment income...... (0.044) (0.049) (0.048) (0.049) (0.018) (0.039)
------- ------- -------- --------- --------- ---------
Total distributions..... (0.044) (0.049) (0.048) (0.049) (0.018) (0.039)
------- ------- -------- --------- --------- ---------
Net asset value, end of
period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======== ========= ========= =========
Total return (b)........ 4.33% 5.00% 4.91% 5.02% 1.80% 4.01%
======= ======= ======== ========= ========= =========
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's)...... $33,967 $37,437 $233,549 $ 309,873 $ 231,055 $ 240,590
Ratio of operating
expenses to average net
assets................. 0.58% 0.57% 0.54% 0.54% 0.55%(c) 0.55%
Ratio of net investment
income to average net
assets................. 4.40% 4.92% 4.79% 4.89% 5.38%(c) 3.88%
Ratio of operating
expenses to average net
assets without waivers. 0.58% 0.57% 0.54% 0.56% 0.60%(c) 0.60%
</TABLE>
--------
(a) The Munder U.S. Treasury Money Market Fund Class Y Shares commenced
operations on March 14, 1990.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(f) Per share numbers have been calculated using the average shares method.
100
<PAGE>
THIS SUPPLEMENT SUPERCEDES ALL PRIOR SUPPLEMENTS
The Munder Funds
Supplement Dated June 16, 2000
to Prospectus Dated October 26, 1999
as supplemented June 16, 2000
Class Y Shares of:
Munder Balanced Fund, Munder Focus Growth Fund (formerly Munder Equity
Selection Fund), Munder Equity Income Fund (formerly Munder Growth & Income
Fund), Munder Future Technology Fund, Munder Growth Opportunities Fund, Munder
International Equity Fund, Munder Micro-Cap Equity Fund, Munder Multi-Season
Growth Fund, Munder NetNet Fund, Munder Real Estate Equity Investment Fund,
Munder Small-Cap Value Fund, Munder Small Company Growth Fund, Munder
Framlington Emerging Markets Fund, Munder Framlington Global Financial
Services Fund, Munder Framlington Healthcare Fund, Munder Framlington
International Growth Fund, Munder Bond Fund, Munder Intermediate Bond Fund,
Munder International Bond Fund, Munder U.S. Government Income Fund, Munder
Michigan Tax-Free Bond Fund, Munder Tax-Free Bond Fund, Munder Tax-Free Short-
Intermediate Bond Fund, Munder Cash Investment Fund, Munder Money Market Fund,
Munder Tax-Free Money Market Fund and Munder U.S. Treasury Money Market Fund
CLOSING OF NETNET FUND
The Board of Directors of the NetNet Fund has determined that it is in the
best interest of shareholders to close the Fund to new accounts. Accordingly,
as of April 17, 2000, the NetNet Fund will only accept orders for the
additional purchase of Fund shares by shareholders into accounts with existing
NetNet Fund positions.
AVAILABILITY OF SHARES
The Class Y Shares of all the Funds except the Cash Investment Fund, Multi-
Season Growth Fund and the Money Market Fund are not currently available for
purchase in the State of Nebraska. The Class Y Shares of the Future Technology
Fund, Framlington Global Financial Services Fund and Growth Opportunities Fund
are not currently available for purchase in the State of New Hampshire. The
Class Y Shares of Framlington Global Financial Services Fund and Growth
Opportunities Fund are not currently available for purchase in the State of
Montana.
SUPPROY600
