Rule 497(c)
File Nos. 33-58004
and 811-7474
BOSTON 1784 FUNDS
Boston 1784 Florida Tax-Exempt Income Fund
Supplement to Prospectus
dated October 1st, 1997
<TABLE>
<CAPTION>
Condensed Financial Information
The following is added to the end of the section entitled "Financial
Highlights--Tax-Exempt Funds" on page 7 of the Prospectus:
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
- ------------------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND NET NET
ASSET UNREALIZED DISTRIBUTIONS DISTRIBUTIONS ASSET ASSETS RATIO
VALUE NET GAINS OR FROM NET FROM VALUE END OF EXPENSES
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT CAPITAL END TOTAL OF PERIOD TO AVERAGE
OF PERIOD INCOME INVESTMENTS INCOME GAINS OF PERIOD RETURN* (000) NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------------
BOSTON 1784 FLORIDA TAX-EXEMPT INCOME FUND
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE PERIOD ENDED
NOVEMBER 30, 1997(5) $10.00 0.20 0.20 (0.20) (0.02) $10.18 4.02%* $47,815 0.80%
- ------------------------------------------------------------------------------------------------------------------------------------
RATIO RATIO OF
RATIO OF EXPENSES NET INCOME
OF NET TO AVERAGE TO AVERAGE
INCOME NET ASSETS NET ASSETS PORTFOLIO
TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER
NET ASSETS WAIVERS) WAIVERS) RATE
- --------------------------------------------------------------------------------
BOSTON 1784 FLORIDA TAX-EXEMPT INCOME FUND
<S> <C> <C> <C> <C>
FOR THE PERIOD ENDED
NOVEMBER 30, 1997(5) 4.64% 1.19% 4.25% 2.90%
- --------------------------------------------------------------------------------
<FN>
* TOTAL RETURN IS FOR THE PERIOD INDICATED AND HAS NOT BEEN ANNUALIZED.
(5) BOSTON 1784 FLORIDA TAX-EXEMPT INCOME FUND COMMENCED OPERATIONS ON
JUNE 30, 1997. ALL RATIOS FOR THE PERIOD HAVE BEEN ANNUALIZED.
</FN>
</TABLE>
The date of this Supplement is December 31, 1997
<PAGE>
Rule 497(c)
File Nos. 33-58004
and 811-7474
BOSTON 1784 FUNDS
Boston 1784 Florida Tax-Exempt Income Fund
Supplement to Statement
of Additional Information
dated October 1st, 1997, as supplemented
November 5, 1997 and December 2, 1997
Financial Information
The section entitled "For the Institutional Prime Money Market Fund, Florida
Tax-Exempt Income Fund, Small Cap Equity Fund and Large Cap Equity Fund" on page
49 of the Statement of Additional Information is hereby deleted in its entirety
and replaced with the following text:
FOR THE INSTITUTIONAL PRIME MONEY MARKET FUND, SMALL CAP EQUITY FUND AND LARGE
CAP EQUITY FUND
Boston 1784 Institutional Prime Money Market Fund, Boston 1784 Small Cap
Equity Fund and Boston 1784 Large Cap Equity Fund are newly organized and have
not yet issued financial statements.
FOR THE FLORIDA TAX-EXEMPT INCOME FUND
See Financial Statements attached.
The date of this Supplement is December 31, 1997
<PAGE>
Boston 1784
Florida
Tax-Exempt
Income Fund
(unaudited)
<PAGE>
AS OF NOVEMBER 30, 1997
STATEMENT OF NET ASSETS (UNAUDITED)
BOSTON 1784 FLORIDA TAX-EXEMPT INCOME FUND
- ------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- ------------------------------------------------------
MUNICIPAL BONDS -- 93.2%
FLORIDA -- 93.2%
Brevard County, Health Facility
Authority RB, Holmes Regional
Medical Center, MBIA
5.625%, 10/01/14 $1,000 $1,031
Brevard County, Housing &
Finance Authority RB,
Series B, FSA
7.000%, 03/01/13 365 389
Broward County, Solid Waste
RB, MBIA
5.875%, 07/01/08 1,500 1,612
Cape Coral, Water
Improvement RB, FSA
6.375%, 06/01/09 1,500 1,635
Dade County, Aviation RB,
Series A, AMT, MBIA
5.750%, 10/01/15 1,000 1,042
Dade County, Housing Finance
Authority RB, Series D, FSA
6.950%, 12/15/12 770 826
Dade County, School District RB,
Pre-refunded @ 100, FGIC (A)
6.125%, 08/01/01 1,000 1,066
Dade County, Water & Sewer
System RB, FGIC
5.500%, 10/01/18 3,000 3,052
Escambia County, Housing
Finance Authority RB,
Series A, AMT, FHA
7.300%, 10/01/17 640 673
Florida State Board of Education
Capital Outlay GO, Series A
5.750%, 01/01/13 1,000 1,041
5.500%, 06/01/15 2,500 2,562
Florida State Board of Education
Capital Outlay GO,
Series B, MBIA
5.750%, 06/01/11 1,250 1,314
Florida State Finance Department
RB, MBIA
5.500%, 07/01/12 1,000 1,047
Florida State Finance Department
RB, Series A, AMBAC
5.700%, 07/01/09 2,000 2,115
- ------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- ------------------------------------------------------
Florida State Finance Department
RB, Series A, MBIA
6.250%, 07/01/13 $2,500 $2,681
Florida State Pollution
Control RB, Series Y,
Pre-refunded @ 101 (A)
6.400%, 07/01/02 1,000 1,093
Florida State Turnpike
Authority RB, FGIC
5.250%, 07/01/11 2,000 2,038
Fort Lauderdale GO
5.500%, 07/01/15 1,000 1,024
Gainesville, Utilities System
RB, Series B
5.500%, 10/01/13 2,000 2,048
Hillsborough County, Allegany
Health Systems RB, MBIA
6.375%, 12/01/12 1,300 1,411
Indian Trace Community, Water
Management RB, MBIA
5.500%, 05/01/07 1,000 1,071
Jacksonville, Health Facility
Authority RB,
Pre-refunded @ 102,
MBIA (A)
6.500%, 05/01/02 1,345 1,488
Naples, Community Hospital
Project RB, MBIA
5.500%, 10/01/16 1,000 1,016
North Port, Utility System
RB, FGIC
6.150%, 10/01/09 1,000 1,083
Orlando, Water & Electric
Utilities Commission RB
5.250%, 10/01/14 1,000 993
Palm Beach County, Solid Waste
Authority RB, MBIA
6.250%, 12/01/08 500 548
Polk County, Utility Systems
RB, FGIC
5.250%, 10/01/17 1,500 1,504
Port St. Lucie, Special Assessment,
District 1, MBIA
5.850%, 10/01/11 3,070 3,281
<PAGE>
- ------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- ------------------------------------------------------
FLORIDA (CONTINUED)
Reedy Creek, Improvements
GO, Series A, MBIA
5.750%, 06/01/14 $2,500 $ 2,619
Volusia County, Hospital Facilities
RB, Memorial Health Systems
Project, AMBAC
5.500%, 11/15/16 1,250 1,280
-------
44,583
-------
TOTAL MUNICIPAL BONDS
(Cost $42,821) 44,583
-------
REPURCHASE AGREEMENT -- 5.5%
Paine Webber
5.690%, dated 11/28/97,
matures 12/01/97, repurchase
price $2,631,018 (collateralized
by U.S. Treasury Instruments:
total market value $2,682,158) 2,630 2,630
-------
TOTAL REPURCHASE AGREEMENT
(Cost $2,630) 2,630
-------
TOTAL INVESTMENTS -- 98.7%
(Cost $45,451) 47,213
-------
OTHER ASSETS AND LIABILITIES,
NET-- 1.3% 602
-------
- ------------------------------------------------------
DESCRIPTION VALUE (000)
- ------------------------------------------------------
NET ASSETS:
Capital Shares (unlimited authorization --
no par value) based on 4,696,465
outstanding shares of beneficial interest $46,052
Accumulated Net Realized Gain
on Investments 1
Net Unrealized Appreciation
on Investments 1,762
-------
TOTAL NET ASSETS-- 100.0% $47,815
=======
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE $10.18
=======
(A) PRE-REFUNDED SECURITY. THE PRE-REFUNDED DATE IS SHOWN AS THE MATURITY DATE
ON THE STATEMENT OF NET ASSETS.
AMT--ALTERNATIVE MINIMUM TAX
GO--GENERAL OBLIGATION
RB--REVENUE BOND
THE FOLLOWING ORGANIZATIONS HAVE PROVIDED UNDERLYING CREDIT
SUPPORT FOR THE SECURITIES AS DEFINED IN THE STATEMENT OF NET ASSETS.
AMBAC--AMERICAN MUNICIPAL BOND ASSURANCE CORPORATION
FGIC--FINANCIAL GUARANTY INSURANCE CORPORATION
FHA--FEDERAL HOUSING ADMINISTRATION
FSA--FINANCIAL SECURITY ASSURANCE
MBIA--MUNICIPAL BOND INSURANCE ASSOCIATION
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
STATEMENT OF OPERATIONS (000) (UNAUDITED)
- --------------------------------------------------------------------------------
FOR THE PERIOD ENDED NOVEMBER 30, 1997
BOSTON
1784
FLORIDA
TAX-EXEMPT
INCOME
FUND
==========
INCOME:
INTEREST INCOME $ 1,054
-------
TOTAL INCOME 1,054
-------
EXPENSES:
INVESTMENT ADVISORY FEES 142
LESS: WAIVER OF INVESTMENT
ADVISORY FEES (27)
ADMINISTRATOR FEES 14
12B-1 FEES 48
LESS: WAIVER OF 12B-1 FEES (48)
TRANSFER AGENT FEES & EXPENSES 7
REGISTRATION FEES 7
PRINTING 1
AMORTIZATION OF DEFERRED
ORGANIZATIONAL COSTS 1
PROFESSIONAL FEES 1
CUSTODIAN FEES 6
OTHER EXPENSES 1
-------
TOTAL EXPENSES, NET OF WAIVERS 153
-------
NET INVESTMENT INCOME 901
-------
NET REALIZED GAIN ON INVESTMENTS 87
NET CHANGE IN UNREALIZED
APPRECIATION ON INVESTMENTS 767
-------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS AND
FOREIGN CURRENCY 854
-------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 1,755
=======
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (000) (UNAUDITED)
- ----------------------------------------------------
BOSTON
1784
FLORIDA
TAX-EXEMPT
INCOME
FUND
==========
6/30/97 (1)
TO
11/30/97
----------
INVESTMENT ACTIVITIES:
NET INVESTMENT INCOME $ 901
NET REALIZED GAIN ON INVESTMENTS 87
NET UNREALIZED APPRECIATION
ON INVESTMENTS 767
-------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS 1,755
-------
DISTRIBUTIONS TO
SHAREHOLDERS:
NET INVESTMENT INCOME (901)
REALIZED CAPITAL GAINS (86)
--------
TOTAL DISTRIBUTIONS (987)
--------
SHARE TRANSACTIONS:
VALUE FROM SHARES ISSUED IN
CONNECTION WITH ACQUISITION
OF COMMON TRUST FUND ASSETS 41,223
PROCEEDS FROM SHARES ISSUED 7,231
REINVESTMENT OF CASH DISTRIBUTIONS 86
COST OF SHARES REDEEMED (1,493)
--------
INCREASE IN NET ASSETS FROM
SHARE TRANSACTIONS 47,047
--------
TOTAL INCREASE IN NET ASSETS 47,815
NET ASSETS:
BEGINNING OF PERIOD --
--------
NET ASSETS:
END OF PERIOD $47,815
=======
CAPITAL SHARE TRANSACTIONS:
SHARES ISSUED IN CONNECTION
WITH ACQUISITION OF
COMMON TRUST FUND ASSETS 4,122
SHARES ISSUED 713
SHARES ISSUED IN LIEU OF
CASH DISTRIBUTIONS 8
SHARES REDEEMED (147)
-------
NET INCREASE IN CAPITAL SHARES 4,696
=======
UNDISTRIBUTED/OVERDISTRIBUTION
NET INVESTMENT INCOME --
=======
(1) THE BOSTON 1784 FLORIDA TAX-EXEMPT INCOME FUND COMMENCED
OPERATIONS ON JUNE 30, 1997.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
1. ORGANIZATION
Boston 1784 Florida Tax-Exempt Income, is a portfolio offered by Boston 1784
Funds (the "Trust"), an open-end investment company registered under the
Investment Company Act of 1940, as amended. The Trust is offering shares in 17
separate portfolios (the "Funds") as of November 30, 1997:
On June 30, 1997, BankBoston's Florida Tax-Exempt Bond Common Trust Fund
was converted into Boston 1784 Florida Tax-Exempt Income Fund. The assets which
consisted of securities and related receivables, were converted on a tax-free
basis. The net assets, unrealized appreciation of the Common Trust Fund
immediately before the conversion, and the number of shares issued were
$41,223,322, $994,489 and 4,122,332 respectively.
MONEY MARKET FUNDS:
BOSTON 1784 TAX-FREE MONEY MARKET FUND
BOSTON 1784 U.S. TREASURY MONEY MARKET FUND
BOSTON 1784 INSTITUTIONAL U.S. TREASURY
MONEY MARKET FUND
BOSTON 1784 INSTITUTIONAL PRIME MONEY MARKET FUND
BOSTON 1784 PRIME MONEY MARKET FUND
BOND FUNDS:
BOSTON 1784 SHORT-TERM INCOME FUND
BOSTON 1784 INCOME FUND
BOSTON 1784 U.S. GOVERNMENT MEDIUM-TERM
INCOME FUND
TAX-EXEMPT INCOME FUNDS:
BOSTON 1784 TAX-EXEMPT MEDIUM-TERM INCOME FUND
BOSTON 1784 CONNECTICUT TAX-EXEMPT INCOME FUND
BOSTON 1784 FLORIDA TAX-EXEMPT INCOME FUND
BOSTON 1784 MASSACHUSETTS TAX-EXEMPT INCOME FUND
BOSTON 1784 RHODE ISLAND TAX-EXEMPT INCOME FUND
STOCK FUNDS:
BOSTON 1784 ASSET ALLOCATION FUND
BOSTON 1784 GROWTH AND INCOME FUND
BOSTON 1784 GROWTH FUND
BOSTON 1784 INTERNATIONAL EQUITY FUND
The Funds' prospectuses provide a description of each Fund's investment
objectives, policies and strategies. The financial statements of Boston 1784
Florida Tax-Exempt Income Fund are included herein. The assets of each Fund are
segregated, and a shareholder's interest is limited to the Fund in which shares
are held. The financial statements have been prepared in accordance with
generally accepted accounting principles which require the use of management's
estimates. Actual results could differ from these estimates.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Funds.
SECURITY VALUATION --
Investment securities of the Fund are valued on the basis of valuations
furnished by a pricing service, use of which has been approved by the Board of
Trustees of the Trust. Valuations supplied by the pricing service are subject to
review by the Adviser and, if adjusted pursuant to Adviser review, by the Board
of Trustees. Securities for which market quotations are not readily available,
whether or not listed, will be valued at their fair value as determined in good
faith by the Board of Trustees of the Trust, or pursuant to procedures adopted
by the Board subject to review by the Board of the resulting valuations.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
SECURITY TRANSACTIONS AND INVESTMENT INCOME --
Security transactions are accounted for on the trade date of the security
purchase or sale. Costs used in determining net realized capital gains and
losses on the sale of securities are those of the specific securities sold,
adjusted for the accretion and amortization of the purchase discounts and
premiums during the respective holding period. Interest income is recorded on
the accrual basis.
REPURCHASE AGREEMENTS --
The Fund invests in Tri-Party Repurchase Agreements. Securities pledged as
collateral for Tri-Party Repurchase Agreements are maintained in a segregated
account by the broker's custodian bank until maturity of the Repurchase
Agreements. Provisions of the Agreements and procedures adopted by the Adviser
ensure that the market value of the collateral, including accrued interest
thereon, is sufficient in the event of default by the counterparty. If the
counterparty defaults and the value of the collateral declines or if the
counterparty enters into insolvency proceedings, realization on the collateral
by the Fund may be delayed or limited.
EXPENSES --
Expenses that are directly related to one of the Funds are charged directly to
that Fund. Other operating expenses of the Trust are prorated to the Funds on
the basis of relative net assets.
DISTRIBUTIONS TO SHAREHOLDERS --
Distributions from net investment income are declared on a daily basis and are
payable on the first business day of the following month. Any net realized
capital gains on sales of securities for the Fund are distributed to its
shareholders at least annually.
FEDERAL INCOME TAXES --
The Fund's policy is to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income to its shareholders. Accordingly, no provision for Federal income
taxes is required in the financial statements.
ORGANIZATION COSTS --
Organization costs have been deferred by the Fund and are being amortized on a
straight line basis over a period of sixty months commencing with operations. In
the event any of the initial shares of the Fund are redeemed by any holder
thereof during the period that the Fund is amortizing its organizational costs,
the redemption proceeds payable to the holders thereof by the Fund will be
reduced by the unamortized organizational costs in the same ratio as the number
of shares redeemed bears to the initial shares outstanding at the time of
redemption.
3. INVESTMENT ADVISORY AND CUSTODIAL SERVICES
Pursuant to an investment advisory agreement dated June 1, 1993, investment
advisory services are provided to the Fund by Bank-Boston, N.A. (the "Adviser").
The Adviser is entitled to receive an annual fee of 0.74% of the average daily
net assets of the Fund. BankBoston has voluntarily agreed to waive a portion of
its fee as necessary to assist the Fund in maintaining a competitive expense
ratio.
The Fund and BankBoston, N.A. (the "Custodian") are parties to a custodial
agreement dated June 1, 1993 under which the
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
Custodian holds cash, securities and other assets of the Fund as required by the
Investment Company Act of 1940, as amended. The Custodian is entitled to receive
an annual fee, to be paid monthly, of 0.01% for the first $100 million in
average daily net assets, 0.0075% for the next $100 million in average daily net
assets and 0.0050% for the average daily net assets over $200 million. In its
capacity as custodian to the Fund, the Custodian plays no role in determining
the investment policies of the Fund or which securities are to be purchased or
sold by the Fund.
4. ADMINISTRATIVE AND DISTRIBUTION SERVICES
Pursuant to an administration agreement dated December 1, 1996, SEI Fund
Resources acts as the Trust's Administrator, and is entitled to receive an
annual fee of 0.085% of the Trust's first $5 billion of average daily net assets
and 0.045% of the Trust's average daily net assets over $5 billion. Such fee is
computed daily and paid monthly.
SEI Investments Distribution Co. ("SEI Investments"), a wholly owned
subsidiary of SEI Investments Company, became the Fund's Distributor pursuant to
a distribution agreement dated June 1, 1993 as amended and restated October 27,
1995. The Trust has adopted a distribution plan with respect to the Fund
pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended
(collectively, the "Plan"). The Distribution Agreement and the Plan provide that
the Trust will pay the Distributor a fee, calculated daily and paid monthly, at
an annual rate of 0.25% of the average daily net assets of the Fund. The
Distributor agreed to waive all of its 12b-1 distribution fee for the period
ended November 30, 1997.
Certain officers of the Fund are also officers of the Administrator. Such
officers are paid no fees by the Fund.
The Fund has paid legal fees to a law firm with which the Secretary of the
Trust is associated.
5. INVESTMENT TRANSACTIONS
The cost of security purchases and the proceeds from the sale of securities,
other than temporary cash investments, for the period ended November 30, 1997,
was $6,466 and $1,240 respectively (000).
At November 30, 1997 the total cost of securities and the net realized
gains or losses on securities sold for Federal income tax purposes was not
materially different from amounts reported for financial purposes.
At November 30, 1997, the net unrealized appreciation on investment
securities held by the Fund aggregated to $1,762 of which $1,764 related to
appreciated securities and $2 related to depreciated securities (000).
6. CONCENTRATION OF CREDIT RISK
The Fund invests in debt instruments of municipal issuers. The issuers' ability
to meet their obligations may be affected by economic developments in a specific
state or region. The Fund invests primarily in obligations located in Florida.
