Rule 497(c)
File Nos. 33-58004 and 811-7474
THE STATEMENT OF ADDITIONAL INFORMATION INCLUDES ADDITIONAL INFORMATION ABOUT
THE FUNDS.
ADDITIONAL INFORMATION ABOUT THE FUNDS' INVESTMENTS IS AVAILABLE IN THE FUNDS'
ANNUAL AND SEMI-ANNUAL REPORTS TO SHAREHOLDERS. IN THE FUNDS' ANNUAL REPORT, YOU
WILL FIND A DISCUSSION OF THE MARKET CONDITIONS AND INVESTMENT STRATEGIES THAT
SIGNIFICANTLY AFFECTED THE FUNDS' PERFORMANCE DURING THE LAST FISCAL YEAR.
YOU CAN OBTAIN A FREE COPY OF THE FUNDS' STATEMENT OF ADDITIONAL INFORMATION
AND/OR FREE COPIES OF THE FUNDS' MOST RECENT ANNUAL OR SEMI-ANNUAL REPORT BY
CALLING 1-800-BKB-1784. THE MATERIAL YOU REQUEST WILL BE SENT BY FIRST-CLASS
MAIL, OR OTHER MEANS DESIGNED TO ENSURE EQUALLY PROMPT DELIVERY, WITHIN THREE
BUSINESS DAYS OF RECEIPT OF THE REQUEST.
YOU MAY ALSO CALL 1-800-BKB-1784 TO REQUEST OTHER INFORMATION ABOUT THE FUNDS OR
TO MAKE SHAREHOLDER INQUIRIES.
THE STATEMENT OF ADDITIONAL INFORMATION HAS BEEN FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION AND IS INCORPORATED INTO THIS PROSPECTUS BY REFERENCE.
INFORMATION ABOUT THE FUNDS (INCLUDING THE STATEMENT OF ADDITIONAL INFORMATION)
CAN BE REVIEWED AND COPIED AT THE SECURITIES AND EXCHANGE COMMISSION'S PUBLIC
REFERENCE ROOM IN WASHINGTON, D.C. INFORMATION ON THE OPERATION OF THE PUBLIC
REFERENCE ROOM MAY BE OBTAINED BY CALLING THE COMMISSION AT 1-800-SEC-0330.
COPIES OF THIS INFORMATION MAY BE OBTAINED, UPON PAYMENT OF A DUPLICATING FEE,
BY WRITING THE PUBLIC REFERENCE SECTION OF THE COMMISSION, WASHINGTON, D.C.
20549-6009.
REPORTS AND OTHER INFORMATION ABOUT THE FUNDS ARE ALSO AVAILABLE ON THE
COMMISSION'S INTERNET SITE AT HTTP://WWW.SEC.GOV.
[BOSTON 1784 FUNDS LOGO OMITTED]
BOSTON 1784 FUNDS[SERVICE MARK]
P.O. BOX 8524
BOSTON, MA 02266-8524
1-800-BKB-1784
WWW.BOSTON1784FUNDS.COM
FILE NO. 811-7474
<PAGE>
Prospectus
BOSTON 1784 MONEY MARKET FUNDS
[BOSTON 1784 FUNDS LOGO OMITTED]
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 PRIME MONEY MARKET FUND
BOSTON 1784 INSTITUTIONAL PRIME MONEY MARKET FUND
NEITHER THE SECURITIES AND EXCHANGE COMMISSION
NOR ANY STATE SECURITIES COMMISSION HAS APPROVED
OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON
THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
September 15, 1998
<PAGE>
TABLE OF CONTENTS
================================================================================
BOSTON 1784 MONEY MARKET FUNDS..............................................1
SHAREHOLDER SERVICES........................................................8
HOW TO REACH THE FUNDS........................................8
TYPES OF ACCOUNTS.............................................8
HOW TO OPEN AN ACCOUNT........................................8
HOW TO PURCHASE SHARES........................................9
HOW TO SELL SHARES...........................................10
SHAREHOLDER SERVICES AND POLICIES............................12
PRICING OF FUND SHARES.....................................................14
DISTRIBUTIONS..............................................................14
FEDERAL TAX CONSIDERATIONS.................................................15
MORE ABOUT BOSTON 1784 MONEY MARKET FUNDS..................................16
MANAGEMENT.................................................................19
DISTRIBUTION ARRANGEMENTS..................................................20
FINANCIAL HIGHLIGHTS.......................................................21
PROSPECTUS
<PAGE>
BOSTON 1784 MONEY MARKET FUNDS
================================================================================
TAX-FREE MONEY MARKET FUND
U.S. TREASURY MONEY MARKET FUND
INSTITUTIONAL U.S. TREASURY MONEY MARKET FUND
PRIME MONEY MARKET FUND
INSTITUTIONAL PRIME MONEY MARKET FUND
THIS RISK/RETURN SUMMARY BRIEFLY DESCRIBES EACH BOSTON 1784 MONEY MARKET FUND
AND THE PRINCIPAL RISKS OF INVESTING IN THE FUNDS. FOR FURTHER INFORMATION ON
THESE FUNDS, PLEASE READ THE SECTION ENTITLED MORE ABOUT BOSTON 1784 MONEY
MARKET FUNDS.
[GRAPHIC OF COMPASS OMITTED]
WHAT ARE THE FUNDS' GOALS?
TAX-FREE MONEY MARKET FUND
The Tax-Free Money Market Fund's goals are to preserve the principal value of a
shareholder's investment and maintain a high degree of liquidity while providing
current income that is exempt from federal income tax.
U.S. TREASURY MONEY MARKET FUND
INSTITUTIONAL U.S. TREASURY
MONEY MARKET FUND
PRIME MONEY MARKET FUND
INSTITUTIONAL PRIME
MONEY MARKET FUND
The Funds' goals are to preserve the principal value of a shareholder's
investment and to maintain a high degree of liquidity while providing current
income.
- --------------------------------------------------------------------------------
WHAT IS A MONEY MARKET FUND?
A MONEY MARKET FUND is a type of mutual fund that tries to maintain a share
price of $1.00 while paying income to its shareholders. A stable share price
protects your investment from loss ("PRESERVATION OF PRINCIPAL"). If you need
to sell your shares at any time, you should receive your initial investment
plus any income that you have earned (thereby providing "LIQUIDITY").
However, a money market fund does not guarantee that you will receive your
money back.
A money market fund must follow strict rules as to the investment quality,
maturity, diversification and other features of the securities it purchases
and the average remaining maturity of the securities cannot be greater than
90 days. The remaining maturity of a security is the period of time until the
principal amount must be repaid.
- --------------------------------------------------------------------------------
PROSPECTUS
1
<PAGE>
BOSTON 1784 MONEY MARKET FUNDS (CONTINUED)
================================================================================
[GRAPHIC OF CHESS PIECE OMITTED]
WHAT ARE THE FUNDS' MAIN INVESTMENT STRATEGIES?
TAX-FREE MONEY MARKET FUND
The Tax-Free Money Market Fund invests primarily in short-term municipal
securities, which are debt securities issued by states, cities and towns and
other political or public entities or agencies. The interest paid on these debt
securities is free from federal income tax.
The Fund may also enter into repurchase agreements and invest in limited amounts
in securities paying interest that is not free from federal taxes.
U.S. TREASURY MONEY MARKET FUND
The U.S. Treasury Money Market Fund invests primarily in short-term U.S.
government obligations, including Treasury securities, U.S. government agency
securities and repurchase agreements secured by U.S. government securities.
INSTITUTIONAL U.S. TREASURY
MONEY MARKET FUND
The Institutional U.S. Treasury Money Market Fund invests primarily in
short-term U.S. government obligations, including Treasury securities, U.S.
government agency securities and repurchase agreements secured by U.S.
government securities.
PRIME MONEY MARKET FUND
The Prime Money Market Fund invests primarily in high quality short-term debt
obligations, including commercial paper, asset-backed commercial paper,
corporate bonds, U.S. government agency obligations, taxable municipal
securities and repurchase agreements.
INSTITUTIONAL PRIME
MONEY MARKET FUND
The Institutional Prime Money Market Fund invests primarily in high quality
short-term debt obligations, including commercial paper, asset-backed commercial
paper, corporate bonds, U.S. government agency obligations, taxable municipal
securities and repurchase agreements.
- --------------------------------------------------------------------------------
WHAT ARE U.S. GOVERNMENT OBLIGATIONS?
U.S. GOVERNMENT OBLIGATIONS or securities are bonds or other debt
obligations issued by, or whose principal and interest are guaranteed by,
the U.S. government or one of its agencies or instrumentalities. U.S.
Treasury securities and some obligations of U.S. government agencies and
instrumentalities are supported by the "full faith and credit" of the United
States. Some U.S. government obligations are backed by the right of the
issuer to borrow from the U.S. Treasury, and others only by the credit of
the issuing agency or instrumentality. U.S. government obligations generally
have less credit risk than other debt obligations.
- --------------------------------------------------------------------------------
PROSPECTUS
2
<PAGE>
================================================================================
[GRAPHIC OF FLAG MAN OMITTED]
WHAT ARE THE MAIN RISKS OF INVESTING IN BOSTON 1784 MONEY MARKET FUNDS?
The principal risks of investing in the Money Market Funds and the circumstances
reasonably likely, in the opinion of the Adviser, to adversely affect your
investment are described below. Please note that there are many other factors
which could adversely affect your investment, and that could prevent a Fund from
achieving its objectives, which are not described here. The principal risks are:
[BULLET] The rate of income will vary from day to day depending on short-term
interest rates.
[BULLET] It is possible that a major change in interest rates or a default on a
security or a repurchase agreement held by a Fund could cause the
value of your investment to decline.
[BULLET] Each Money Market Fund may invest up to 5% of its total assets in zero
coupon securities called STRIPS, which are the separately traded
interest and principal component parts of U.S. Treasury securities.
The interest-only component is extremely sensitive to the rate of
principal payments on the underlying obligation. The market value of
the principal-only component generally is unusually volatile in
response to changes in interest rates.
[BULLET] An investment in a Fund is not a deposit of BankBoston and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other governmental agency.
[BULLET] Although the Funds seek to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in the
Funds.
PROSPECTUS
3
<PAGE>
BOSTON 1784 MONEY MARKET FUNDS (CONTINUED)
================================================================================
================================================================================
WHO MAY WANT TO INVEST?
================================================================================
TAX-FREE MONEY MARKET FUND
THIS MONEY MARKET FUND MAY BE APPROPRIATE FOR INVESTORS WHO:
[BULLET] are investing for a short period of time or as part of a
savings plan;
[BULLET] are uncomfortable with an investment that will go up and down
in value;
[BULLET] want to earn income exempt from federal taxes.
It is not an appropriate investment for tax-sheltered accounts such as
IRAs.
U.S. TREASURY MONEY MARKET FUND
THIS MONEY MARKET FUND MAY BE APPROPRIATE FOR INVESTORS WHO:
[BULLET] are investing for a short period of time or as part of a
savings plan;
[BULLET] are uncomfortable with an investment that will go up and down
in value;
[BULLET] want the added safety of U.S. government securities.
INSTITUTIONAL U.S. TREASURY MONEY MARKET FUND
THIS MONEY MARKET FUND MAY BE APPROPRIATE FOR INSTITUTIONAL INVESTORS
WHO:
[BULLET] are investing for a short period of time;
[BULLET] want the added safety of U.S. government securities.
PRIME MONEY MARKET FUND
THIS MONEY MARKET FUND MAY BE APPROPRIATE FOR INVESTORS WHO:
[BULLET] are investing for a short period of time or as part of a
savings plan;
[BULLET] are uncomfortable with an investment that will go up and down
in value;
[BULLET] are looking for higher returns than are usually available from
Treasury money market funds.
INSTITUTIONAL PRIME MONEY MARKET FUND
THIS MONEY MARKET FUND MAY BE APPROPRIATE FOR INSTITUTIONAL INVESTORS
WHO:
[BULLET] are investing for a short period of time;
[BULLET] are looking for higher returns than are
usually available from Treasury money market funds.
None of the Money Market Funds alone provides a balanced investment
plan.
PROSPECTUS
4
<PAGE>
================================================================================
[GRAPHIC OF FLAGS OMITTED]
HOW HAVE THE FUNDS PERFORMED?
The charts and tables below give an indication of the Funds' risks
and performance. The charts show changes in the Funds' performance
from year to year. The tables show how the Funds' average annual
returns for the periods indicated compare to those of a broad
measure of market performance.
WHEN YOU CONSIDER THIS INFORMATION, PLEASE REMEMBER THAT A FUND'S
PERFORMANCE IN PAST YEARS IS NOT NECESSARILY AN INDICATION OF HOW A
FUND WILL DO IN THE FUTURE.
- --------------------------------------------------------------------------------
TAX-FREE MONEY MARKET FUND
- --------------------------------------------------------------------------------
TOTAL RETURN
(per calendar year)
[BAR CHART OMITTED]
PLOT POINTS TO FOLLOW:
1994 2.71%
1995 3.75%
1996 3.25%
1997 3.33%
The total return for the six months ended June 30, 1998 was 1.59%.
- --------------------------------------------------------------------------------
HIGHEST AND LOWEST RETURN
(Quarterly 1994-1997)
- --------------------------------------------------------------------------------
QUARTER ENDING
Highest 0.96% June 30, 1995
Lowest 0.58% March 31, 1994
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
(through December 31, 1997)
- --------------------------------------------------------------------------------
1 YEAR LIFE OF FUND
(SINCE 6/14/93)
Tax-Free Money Market Fund 3.33% 3.16%
IBC/Financial Data Stockbroker 3.08% 3.09%*
and General Purpose
Tax-Free Average
- --------------------------------------------------------------------------------
*(SINCE 5/31/93)
- --------------------------------------------------------------------------------
U.S. TREASURY MONEY MARKET FUND
- --------------------------------------------------------------------------------
TOTAL RETURN
(per calendar year)
[BAR CHART OMITTED]
PLOT POINTS TO FOLLOW:
1994 3.72%
1995 5.43%
1996 4.82%
1997 4.96%
The total return for the six months ended June 30, 1998 was 2.46%.
- --------------------------------------------------------------------------------
HIGHEST AND LOWEST RETURN
(Quarterly 1994-1997)
- --------------------------------------------------------------------------------
QUARTER ENDING
Highest 1.38% June 30, 1995
Lowest 0.64% March 31, 1994
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
(through December 31, 1997)
- --------------------------------------------------------------------------------
1 YEAR LIFE OF FUND
(SINCE 6/7/93)
U.S. Treasury Money Market Fund 4.96% 4.46%
IBC/Financial Data U.S. 4.94% 4.76%*
Government & Agencies Average
- --------------------------------------------------------------------------------
*(SINCE 5/31/93)
FOR UP-TO-DATE YIELD INFORMATION, PLEASE CALL 1-800-BKB-1784.
PROSPECTUS
5
<PAGE>
BOSTON 1784 MONEY MARKET FUNDS (CONTINUED)
================================================================================
- --------------------------------------------------------------------------------
INSTITUTIONAL U.S. TREASURY MONEY MARKET FUND
- --------------------------------------------------------------------------------
TOTAL RETURN
(per calendar year)
[BAR CHART OMITTED]
PLOT POINTS TO FOLLOW:
1994 4.04%
1995 5.69%
1996 5.14%
1997 5.30%
The total return for the six months ended June 30, 1998 was 2.62%.
- --------------------------------------------------------------------------------
HIGHEST AND LOWEST RETURN
(Quarterly 1994-1997)
- --------------------------------------------------------------------------------
QUARTER ENDING
Highest 1.43% June 30, 1995
Lowest 0.76% March 31, 1994
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
(through December 31, 1997)
- --------------------------------------------------------------------------------
1 YEAR LIFE OF FUND
(SINCE 6/14/93)
Institutional U.S. Treasury 5.30% 4.79%
Money Market Fund
IBC/Financial Data Government- 5.21% 5.08%*
Only Institutional-Only Average
- --------------------------------------------------------------------------------
*(SINCE 5/30/93)
- --------------------------------------------------------------------------------
PRIME MONEY MARKET FUND
- --------------------------------------------------------------------------------
TOTAL RETURN
(per calendar year)
[BAR CHART OMITTED]
PLOT POINTS TO FOLLOW:
1992 3.48%
1993 2.72%
1994 3.75%
1995 5.49%
1996 5.02%
1997 5.14%
The total return for the six months ended June 30, 1998 was 2.52%.
- --------------------------------------------------------------------------------
HIGHEST AND LOWEST RETURN
(Quarterly 1992-1997)
- --------------------------------------------------------------------------------
QUARTER ENDING
Highest 1.39% June 30, 1995
Lowest 0.66% March 31, 1994
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
(through December 31, 1997)
- --------------------------------------------------------------------------------
1 YEAR 5 YEARS LIFE OF FUND
(SINCE 6/6/91)
Prime Money 5.14% 4.36% 4.36%
Market Fund
IBC/Financial Data 5.01% 4.32% 4.89%*
First Tier Money
Market Average
- --------------------------------------------------------------------------------
*(SINCE 5/31/91)
- --------------------------------------------------------------------------------
INSTITUTIONAL PRIME MONEY MARKET FUND
- --------------------------------------------------------------------------------
The Fund began operations during 1997 and does not have a full calendar year of
investment returns at the date of this Prospectus. The Fund's total return for
the fiscal year ended May 31, 1998 is provided in the "Financial Highlights"
section of this Prospectus.
FOR UP-TO-DATE YIELD INFORMATION, PLEASE CALL 1-800-BKB-1784.
PROSPECTUS
6
<PAGE>
================================================================================
[GRAPHIC OF CALCULATOR OMITTED]
WHAT ARE THE FEES AND EXPENSES OF THE FUNDS?
THE TABLES BELOW DESCRIBE THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND
HOLD SHARES OF BOSTON 1784 MONEY MARKET FUNDS
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
SHAREHOLDER FEES
(fees paid directly from your investment)
- ----------------------------------------------------------------------------------------------------------------------------------
TAX-FREE U.S. TREASURY INSTITUTIONAL U.S. PRIME INSTITUTIONAL
MONEY MONEY TREASURY MONEY MONEY PRIME MONEY
MARKET FUND MARKET FUND MARKET FUND MARKET FUND MARKET FUND
<S> <C> <C> <C> <C> <C>
Maximum Sales Charge (Load) None None None None None
Imposed on Purchases
Maximum Deferred Sales Charge (Load) None None None None None
Maximum Sales Charge (Load) None None None None None
Imposed on Reinvested Dividends
Redemption Fee None None None None None
Exchange Fee None None None None None
- ----------------------------------------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from Fund assets) as a % of average net assets
- ----------------------------------------------------------------------------------------------------------------------------------
Management Fees .40% .40% .20% .40% .20%
Distribution (12b-1) Fees None None None None None
Other Expenses .13% .30% .13% .30% .22
Total Annual Fund Operating Expenses .53% .70%* .33% .70%* .42*
- ----------------------------------------------------------------------------------------------------------------------------------
*Each of these Funds' actual total annual fund operating expenses for the most
recent fiscal year were less than the amount shown above because of a fee waiver
by the Funds' Adviser. The Adviser waives a portion of its management fees in
order to keep each Fund's total operating expenses at a specified level. The
Adviser may eliminate all or a part of the fee waiver at any time. With the fee
waiver, the Funds' actual total annual fund operating expenses were as follows:
U.S. TREASURY MONEY MARKET FUND .65%
PRIME MONEY MARKET FUND .65%
INSTITUTIONAL PRIME MONEY MARKET .27%
- ----------------------------------------------------------------------------------------------------------------------------------
EXAMPLE
- ----------------------------------------------------------------------------------------------------------------------------------
THIS EXAMPLE IS INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN BOSTON
1784 MONEY MARKET FUNDS TO THE COST OF INVESTING IN OTHER MUTUAL FUNDS. THE
EXAMPLE ASSUMES THAT YOU INVEST $10,000 IN A FUND FOR THE TIME PERIODS INDICATED
AND THEN SELL ALL OF YOUR SHARES AT THE END OF THOSE PERIODS. THE EXAMPLE ALSO
ASSUMES THAT YOUR INVESTMENT HAS A 5% RETURN EACH YEAR AND THAT THE FUND'S
OPERATING EXPENSES REMAIN THE SAME AS SHOWN IN THE TABLE ABOVE. ALTHOUGH YOUR
ACTUAL COSTS AND THE RETURN ON YOUR INVESTMENT MAY BE HIGHER OR LOWER, BASED ON
THESE ASSUMPTIONS YOUR COSTS WOULD BE:
- ----------------------------------------------------------------------------------------------------------------------------------
TAX-FREE U.S. TREASURY INSTITUTIONAL U.S. TREASURY PRIME MONEY INSTITUTIONAL PRIME
MONEY MARKET FUND MONEY MARKET FUND MONEY MARKET FUND MARKET FUND MONEY MARKET FUND
- ----------------------------------------------------------------------------------------------------------------------------------
1 year $ 54 $ 72 $ 34 $ 72 $ 43
3 years 170 224 106 224 135
5 years 296 390 185 390 235
10 years 665 871 418 871 530
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
SHAREHOLDER SERVICES
================================================================================
This section describes how to do business with the Funds and the services that
are available to shareholders.
HOW TO REACH THE FUNDS
BY TELEPHONE 1-800-BKB-1784
Call for account or Fund information
Monday through Friday 8 a.m. to 8 p.m.
or Saturday and Sunday 9 a.m.
to 4 p.m. (Eastern time).
BY REGULAR MAIL Boston 1784 Funds
P.O. Box 8524
Boston, MA 02266-8524
BY OVERNIGHT Boston 1784 Funds
COURIER c/o Boston Financial Data Services
2 Heritage Drive
North Quincy, MA 02171
TYPES OF ACCOUNTS
If you are investing in the Funds for the first time, you will need to establish
an account. You may establish the following types of accounts by completing an
account application. To obtain an application, call 1-800-BKB-1784.
[BULLET] INDIVIDUAL OR JOINT OWNERSHIP. Individual accounts are owned by one
person. Joint accounts have two or more owners. The Funds will treat
any individual owner of a joint account as authorized to give
instructions on purchases, sales and exchanges of shares of a Fund
without notice to the other owners, except that for any transaction
requiring a signature guarantee, the signature guarantee of each
account owner is required.
[BULLET] GIFT OR TRANSFER TO MINOR (UGMA OR UTMA). A UGMA (Uniform Gifts to
Minors Act) or UTMA (Uniform Transfers to Minors Act) account is
maintained by a custodian for the benefit of a minor. To open a UGMA
or UTMA account, you must include the minor's social security number
on the application.
[BULLET] TRUST. A trust can open an account. The name of each trustee, the name
of the trust and the date of the trust agreement must be included on
the application.
[BULLET] CORPORATIONS, PARTNERSHIPS AND OTHER LEGAL ENTITIES. Corporations,
partnerships and other legal entities may also open an account. The
application and resolution form must be signed by a general partner of
the partnership or an authorized officer of the corporation or other
legal entity.
[BULLET] RETIREMENT. If you are eligible, you may set up your account under a
tax-sheltered retirement plan, such as an Individual Retirement
Account. BankBoston offers a number of retirement plans through which
Fund shares may be purchased. Call 1-800-BKB-1784 for more
information.
HOW TO OPEN AN ACCOUNT
Complete and sign the appropriate account application. Please be sure to provide
your social security or taxpayer identification number on the application. Make
your check payable to Boston 1784 Funds. Send all items to one of the following
addresses:
BY REGULAR MAIL Boston 1784 Funds
P.O. Box 8524
Boston, MA 02266-8524
PROSPECTUS
8
<PAGE>
================================================================================
BY OVERNIGHT Boston 1784 Funds
COURIER c/o Boston Financial Data Services
2 Heritage Drive
North Quincy, MA 02171
You may also purchase shares through certain financial institutions, including
BankBoston. These institutions may have their own procedures for buying and
selling shares, and may charge fees. Contact your financial institution for more
information.
HOW TO PURCHASE SHARES
Shares of the Funds are sold on a continuous basis and may be purchased from the
Distributor or a broker-dealer or financial institution that has an agreement
with the Distributor. Purchases may be made Monday through Friday, except on
certain holidays.
Each Fund's share price, called net asset value per share, is calculated every
business day. Each Fund's shares are sold without a sales charge. Shares are
purchased at net asset value the next time it is calculated after your
investment is received and accepted by the Distributor. For information on how
shares are priced, please see "Pricing of Fund Shares" below.
For the U.S. Treasury Money Market Fund, Institutional U.S. Treasury Money
Market Fund and Institutional Prime Money Market Fund, the Distributor must
receive payment by wire transfer or other immediately available Funds by the
close of business on the day your order is received and accepted. For the other
Money Market Funds, your investment is considered received when your check is
converted into immediately available funds. This normally happens within two
business days. On days when the financial markets close early, such as
the day after Thanksgiving and Christmas Eve, purchase orders for the U.S.
Treasury Money Market Fund, Institutional U.S. Treasury Money Market Fund and
Institutional Prime Money Market Fund must be received by 12 noon.
NEW PURCHASES. If you are new to the Funds, complete and sign an account
application and mail it along with your check. To establish the telephone
purchase option on your new account, complete the "Telephone Privilege
Authorization" section on the application and attach a check or savings
withdrawal slip from your bank account which you have "voided" by writing the
word "VOID" across the front.
If you wish to open an account by debiting your checking or savings account,
please attach a "voided" check or savings withdrawal slip, and complete the
"Electronic Transfer and Bank Wire" section of the application.
If you are investing through a tax-sheltered retirement plan for the first time,
you will need a special application. Retirement investing also involves its own
investment procedures. Call 1-800-BKB-1784 for more information.
ADDITIONAL PURCHASES. If you already have money invested in a Fund, you can
invest additional money in that Fund in the following ways:
BY MAIL. Complete the remittance slip attached to the bottom of your
confirmation statement. If your investment is in a retirement account, please
indicate whether the purchase is a rollover or a current or prior year
contribution. Send your check and remittance slip or written instructions to
one of the addresses listed above under "How To Open An Account."
BY TELEPHONE. This service allows you to purchase additional shares quickly
and conveniently through an electronic transfer of money. When you make an
additional purchase by telephone, the Funds will automatically deduct money
from your
PROSPECTUS
9
<PAGE>
SHAREHOLDER SERVICES (CONTINUED)
================================================================================
predesignated bank account for the desired amount. If you have not
established the telephone purchase option, call 1-800-BKB-1784 to request the
appropriate form.
BY WIRE. Purchases may also be made by wiring money from your bank account to
your Boston 1784 Fund account. Each time you wish to send a wire, you must
call 1-800-BKB-1784 to receive wiring instructions before you send money.
AUTOMATIC INVESTMENT PROGRAM. Automatic investing is an easy way to add to your
account on a regular basis. Boston 1784 Funds offer an automatic investment plan
to help you achieve your financial goals as simply and conveniently as possible.
Please note that minimum purchase amounts apply. Call 1-800-BKB-1784 for
information.
PAYING FOR SHARES. Please note the following:
[BULLET] Purchases may be made by check, wire transfer and electronic transfer.
[BULLET] All purchases must be made in U.S. dollars.
[BULLET] Checks must be drawn on U.S. banks and must be payable to Boston 1784
Funds. Checks that are not made payable directly to Boston 1784 Funds
("third party checks") are not accepted.
[BULLET] Cash and credit card checks are not accepted.
[BULLET] If a check does not clear your bank, the Funds reserve the right to
cancel the purchase.
[BULLET] If the Funds are unable to debit your predesignated bank account on
the day you purchase shares, they may make additional attempts or
cancel the purchase.
If your purchase is canceled, you will be responsible for any losses or fees
imposed by your bank and losses that may be incurred as a result of any decline
in the value of the canceled purchase. The Funds have the authority to redeem
shares in your account(s) to cover any losses due to changes in share price. The
Funds reserve the right to reject any specific purchase request.
MINIMUM INVESTMENTS. The following minimums apply unless they are waived by the
Distributor.
To open an account $1,000.00*
For tax-sheltered retirement plans 250.00
To add to an account 250.00**
Through automatic investment plans 50.00
Minimum account balance 1,000.00*
For tax-sheltered retirement plans 250.00
* $100,000 for the Institutional U.S. Treasury Money Market Fund and the
Institutional Prime Money Market Fund
**$5,000 for the Institutional U.S. Treasury Money Market Fund and the
Institutional Prime Money Market Fund
HOW TO SELL SHARES
Selling your shares in a Fund is called a "redemption" because the Fund buys
back its shares. On any business day, you may sell (redeem) all or a portion of
your shares. If your redemption request is over $100,000, you will need a
signature guarantee (see below). If the shares being sold were recently
purchased by check, telephone or through an automatic investment program, the
Funds may delay the mailing of your redemption check for up to 10 business days
after purchase to allow the purchase to clear.
Your transaction will be processed at net asset value the next time it is
calculated after the Funds receive your redemption request in good order. You
may gain or lose money when you redeem your shares.
PROSPECTUS
10
<PAGE>
================================================================================
BY MAIL. To redeem all or part of your shares by mail, please send your request
in writing to one of the addresses listed above under "How To Open An Account"
and include the following information:
[BULLET] the name of the Fund(s),
[BULLET] the account number(s),
[BULLET] the amount of money or number of shares being redeemed,
[BULLET] the name(s) on the account,
[BULLET] the signature of a registered account owner, and
[BULLET] your daytime telephone number.
Signature requirements vary based on the type of account you have:
[BULLET] INDIVIDUAL, JOINT TENANTS, TENANTS IN COMMON: Written instructions
must be signed by an individual shareholder, or in the case of joint
accounts, one of the shareholders (except where a signature guarantee
is required, in which case the signature guarantee of each account
owner is required), exactly as the name(s) appears on the account.
[BULLET] UGMA OR UTMA: Written instructions must be signed by the custodian as
it appears on the account.
[BULLET] SOLE PROPRIETOR, GENERAL PARTNER: Written instructions must be signed
by an authorized individual as it appears on the account.
[BULLET] CORPORATION, ASSOCIATION: Written instructions must be signed by the
person(s) authorized to act on the account. A resolution form,
authorizing the signer to act, must accompany the request if not on
file with the Funds.
[BULLET] TRUST: Written instructions must be signed by the trustee(s). If the
name of the current trustee(s) does not appear on the account, a
certified certificate of incumbency dated within 60 days must also be
submitted.
[BULLET] RETIREMENT: Written instructions must be signed by the account owner.
Call 1-800-BKB-1784 for more information.
BY TELEPHONE. If you selected this option on your account application, you may
make redemptions from your account by calling 1-800-BKB-1784. The Funds require
that requests for redemptions over $100,000 be in writing with signatures
guaranteed (see below). You may not close your account by telephone. If you
would like to establish this option on an existing account, please call
1-800-BKB-1784. See "Telephone transactions" below.
SYSTEMATIC WITHDRAWAL PLAN. Under this plan, you may redeem a specific dollar
amount from your account on a regular basis. For more information or to sign up
for this service, please call 1-800-BKB-1784.
PAYMENT OF REDEMPTION PROCEEDS. Payments may be made by check, wire transfer or
electronic transfer.
BY CHECK Redemption proceeds will be sent to the shareholder(s) on
our records at the address on our records within seven days
after receipt of a valid redemption request.
BY WIRE If you have selected this option on your application, your
redemption proceeds will be wired directly into your
designated bank account, normally on the business day that
your redemption request is received. There is no
limitation on redemptions by wire.
PROSPECTUS
11
<PAGE>
SHAREHOLDER SERVICES (CONTINUED)
================================================================================
However, there is a $12 fee for each wire and your bank
may charge an additional fee to receive the wire. If you
would like to establish this option on an existing
account, please call 1-800-BKB-1784 to sign up for this
service. Wire redemptions are not available for retirement
accounts.
BY ELECTRONIC If you have established this option, your redemption
TRANSFER proceeds will be transferred electronically to your
predesignated bank account. To establish this option on an
existing account, please call 1-800-BKB-1784 to request the
appropriate form.
SIGNATURE GUARANTEES. In addition to the signature requirements described above,
a signature guarantee is required if:
[BULLET] You would like the check made payable to anyone other than the
shareholder(s) on our records.
[BULLET] You would like the check mailed to an address other than the address
on our records.
[BULLET] You would like the check mailed to an address on our records that has
changed in the past 30 days.
[BULLET] Your redemption request is over $100,000.
The Funds may also require signature guarantees for other redemptions. A
signature guarantee assures that a signature is genuine and protects
shareholders from unauthorized account transfers. Banks, savings and loan
associations, trust companies, credit unions, broker-dealers and member firms of
a national securities exchange may guarantee signatures. Call your financial
institution to determine if it has this capability.
SHAREHOLDER SERVICES AND POLICIES
EXCHANGES. On any business day, you may exchange all or a portion of your shares
into any other Fund in the Boston 1784 Funds family. To make exchanges, please
follow the procedures under "How To Sell Shares." Exchanges are processed at the
net asset value next calculated after an exchange request in good order is
received and approved. Please read the prospectus for the Fund into which you
are exchanging. The Funds reserve the right to reject any exchange request or to
change or terminate the exchange privilege at any time. An exchange is the sale
of shares of one Fund and purchase of shares of another, and could result in
taxable gain or loss in a non-tax-sheltered account.
REDEMPTION PROCEEDS. The Funds' policy is to pay redemption proceeds in cash,
but the Funds reserve the right to change this policy and to pay in kind in
certain cases by delivering to you investment securities equal to the redemption
price. In these cases, you might have to pay brokerage costs when converting the
securities to cash. The right of any shareholder to receive redemption proceeds
may be suspended, or payment may be postponed, in certain circumstances. These
circumstances include any period the New York Stock Exchange is closed (other
than weekends or holidays) or trading on the Exchange is restricted, any period
when an emergency exists and any time the Securities and Exchange Commission
allows mutual funds to delay payments for the protection of investors.
TAXPAYER IDENTIFICATION NUMBER. On the account application or other appropriate
form, you will be asked to certify that your social security or taxpayer
identification number is correct and that you are not subject to backup
withholding for failing to report income to the IRS. If you are subject to
backup withholding or you did not certify your taxpayer identification number,
the IRS requires the Funds to
PROSPECTUS
12
<PAGE>
================================================================================
withhold 31% of any dividends and redemption or exchange proceeds. The Funds
reserve the right to reject any application that does not include a certified
social security or taxpayer identification number.
SHARE OWNERSHIP. The Funds keep a record of the ownership of their shares and
share certificates are not issued.
INVOLUNTARY REDEMPTIONS. If your account balance falls below the minimum
required investment as a result of selling or exchanging shares, you will be
given 60 days to re-establish the minimum balance. If you do not, your account
may be closed and the proceeds sent to you.
TELEPHONE TRANSACTIONS. You may buy, sell or exchange shares by telephone if you
selected this option on your account application or have completed the
appropriate form. The Funds and their agents will not be responsible for any
losses that may result from acting on wire or telephone instructions that it
reasonably believes to be genuine. The Funds and their agents will each follow
reasonable procedures to confirm that instructions received by telephone are
genuine, which may include taping telephone conversations. It may be difficult
to reach the Funds by telephone during periods of unusual market activity.
ADDRESS CHANGES. A change in address on your account must be made in writing and
be signed by all account owners. Include the name of your Fund(s), the account
numbers(s), the name(s) on the account and both the old and new addresses. Call
1-800-BKB-1784 if you need more information.
NAME/ACCOUNT OWNERSHIP CHANGES. To change the name on an account, the shares are
generally transferred to a new account. A signature guarantee must be provided
and, in some cases, certain legal documents may be required. For more
information, call 1-800-BKB-1784. If your shares are held by a financial
institution, contact that financial institution for ownership changes.
STATEMENTS AND REPORTS. The Funds will send you a confirmation statement after
every transaction that affects your account balance or registration. If you are
enrolled in an automatic investment program and invest on a monthly basis, you
will receive quarterly confirmations. Information about the tax status of income
dividends and capital gains distributions will be mailed to shareholders early
each year.
Financial reports for the Funds, which include a list of the Funds' portfolio
holdings, will be mailed twice each year to all shareholders.
CHECKWRITING. Checkwriting privileges are available on the following Funds:
Boston 1784 Tax-Free Money Market Fund, Boston 1784 U.S. Treasury Money Market
Fund and Boston 1784 Prime Money Market Fund. Checks may be written for a
minimum of $250 each check. Call 1-800-BKB-1784 for more information.
Please note that you may not use a check to close your account.
PROSPECTUS
13
<PAGE>
PRICING OF FUND SHARES
================================================================================
Each Funds' net asset value per share or NAV is calculated on each day the New
York Stock Exchange is open, except for Columbus Day and Veteran's Day. The NAV
is the value of a single share of a Fund.
The U.S. Treasury Money Market Fund, Institutional U.S. Treasury Money Market
Fund and Institutional Prime Money Market Fund calculate NAV at 3:00 p.m.
Eastern time (12 noon on days when the financial markets close early). The
Tax-Free Money Market Fund and Prime Money Market Fund calculate NAV at 12 noon.
In determining each Money Market Fund's NAV, securities are valued at amortized
cost, which is approximately equal to market value.
DISTRIBUTIONS
================================================================================
As a Fund shareholder, you are entitled to your share of a Fund's net income and
gains on its investments. Each Fund passes substantially all of its earnings
along to its investors as distributions. When a Fund earns interest from money
market instruments and other 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.
Your distributions are declared each day, starting on the day you purchase your
shares. They are paid to your account on the first business day of each month
that you are a shareholder. You will not receive a distribution for the day on
which you sell shares.
You will receive distributions from a Fund in additional shares of that Fund
unless you choose to receive your distributions in cash. If you wish to change
the way in which you receive distributions, you should call 1-800-BKB-1784 for
instructions.
If you have elected to receive distributions in cash, and the postal or other
delivery service returns your check to the Funds as undeliverable, you will not
receive interest on amounts represented by the uncashed checks.
PROSPECTUS
14
<PAGE>
FEDERAL TAX CONSIDERATIONS
================================================================================
Your investment in a Fund will have tax consequences that you should consider.
Some of the more common federal tax consequences are described here, but you
should consult your tax adviser about your own particular situation.
TAXES ON DISTRIBUTIONS
You will generally have to pay federal income tax on all Fund distributions
except for certain dividend distributions from the Tax-Free Money Market Fund.
Your distributions will be taxed in the same manner whether you receive the
distributions in cash or additional shares of the Fund. Distributions that are
derived from net long-term capital gains generally will be taxed as long-term
capital gains. The rate of tax will generally depend on how long the Fund held
the securities on which it realized the gains. All other distributions,
including short-term capital gains, generally will be taxed as ordinary income.
The Money Market Funds (other than the Tax-Free Money Market Fund) expect that
their distributions will consist primarily of ordinary income.
The Tax-Free Money Market Fund may make distributions called "exempt-interest
dividends" that are exempt from federal income tax. Exempt-interest dividends
will not necessarily be exempt from state and local income taxes. This Fund
may also make taxable distributions (including all capital gains distributions).
You generally are required to report all Fund distributions, including
exempt-interest dividends, on your federal income tax return.
TAXES ON SALES OR EXCHANGES
Generally, a sale of shares of a Fund or an exchange for shares of another Fund
is a taxable event. However, because the Money Market Funds strive to maintain a
$1.00 share price, you generally should not be taxed on a sale or exchange.
LOAN INTEREST. If you borrow money to purchase or hold shares of the Tax-Free
Money Market Fund, interest on your loan will not be deductible.
TAX WITHHOLDING. If you are not a U.S. citizen or resident, or if you are
subject to "backup withholding," the Funds may be required to withhold a portion
of your distributions and, in some cases, redemption proceeds, as a payment of
federal income tax.
PROSPECTUS
15
<PAGE>
MORE ABOUT BOSTON 1784 MONEY MARKET FUNDS
================================================================================
Boston 1784 Funds currently offer five Money Market Funds:
[BULLET] BOSTON 1784 TAX-FREE MONEY MARKET FUND
[BULLET] BOSTON 1784 U.S. TREASURY MONEY MARKET FUND
[BULLET] BOSTON 1784 INSTITUTIONAL U.S. TREASURY MONEY MARKET FUND
[BULLET] BOSTON 1784 PRIME MONEY MARKET FUND
[BULLET] BOSTON 1784 INSTITUTIONAL PRIME MONEY MARKET FUND
PRINCIPAL INVESTMENT STRATEGIES
The principal investment strategies of the Money Market Funds are described
below. These are the strategies that, in the opinion of the Adviser, are most
likely to be important in trying to achieve each Fund's investment objective. Of
course, there can be no assurance that any Fund will achieve its investment
objective. Please note that each Fund may also use strategies and invest in
securities that are not described below but which are described in the Statement
of Additional Information.
-----------------------------------------------------------------------------
WHAT ARE MONEY MARKET INSTRUMENTS?
A MONEY MARKET INSTRUMENT is a short-term IOU issued by banks or other U.S.
corporations, or the U.S. government or state or local governments. Money
market instruments have maturity dates of 13 months or less. Money market
instruments may include certificates of deposit, bankers' acceptances,
variable rate demand notes, fixed-term obligations, commercial paper,
asset-backed commercial paper and repurchase agreements.
-----------------------------------------------------------------------------
Each Money Market Fund has specific investment policies and procedures designed
to maintain a constant net asset value of $1.00 per share. Each Fund complies
with industry regulations that apply to money market funds. These regulations
require that each Fund's investments mature or be deemed to mature within 397
days from the date purchased and that the average maturity of each Fund's
investments (on a dollar-weighted basis) be 90 days or less. In addition, all of
the Funds' investments must be in U.S. dollar-denominated high quality
securities which have been determined by the Adviser to present minimal credit
risks. Investments in high quality, short-term securities such as money market
instruments may, in many circumstances, result in a lower yield than would be
available from investments in securities with a lower quality or a longer term.
Each Money Market Fund may invest more than 25% of its assets in money market
instruments issued by banks, including foreign branches of U.S. banks and U.S.
branches of foreign banks, and in U.S. government obligations. The Tax-Free
Money Market Fund may also invest more than 25% of its assets in tax-exempt
securities issued by governments or political subdivisions of governments.
TAX-FREE MONEY MARKET FUND
The TAX-FREE MONEY MARKET FUND invests primarily in short-term municipal money
market instruments that are issued by states, territories and possessions of the
United States (including the District of Columbia) and their political
subdivisions, agencies and instrumentalities. These securities pay interest that
is exempt from federal income tax, including the alternative minimum tax.
The Fund attempts to generate a relatively high tax-exempt yield by investing in
municipal money market
PROSPECTUS
16
<PAGE>
================================================================================
instruments that are issued in states that have little or no income tax. The
Fund invests in both "general obligation" securities, which are backed by the
full faith, credit and taxing power of the issuer and in "revenue" securities,
which are payable only from revenues from a specific project or another specific
revenue source. Normally, at least 80% of the Fund's net assets are invested in
these municipal money market instruments.
The Fund may also invest in taxable money market instruments, particularly if
the after-tax return on those securities is greater than the return on municipal
money market instruments. Under normal circumstances, not more than 20% of the
Fund's assets are invested in taxable instruments.
U.S. TREASURY MONEY MARKET FUND
AND INSTITUTIONAL U.S. TREASURY
MONEY MARKET FUND
The U.S. TREASURY MONEY MARKET FUND and INSTITUTIONAL U.S. TREASURY MONEY MARKET
FUND invest primarily in money market instruments issued by the U.S. Treasury,
including bills, notes and bonds, and repurchase agreements secured by U.S.
Treasury securities. Under normal circumstances, at least 65% of the Funds'
assets are invested in these securities. The Funds invest the rest of their
assets in U.S. government obligations issued by agencies or instrumentalities,
including mortgage-backed securities.
When selecting securities for these Funds, the portfolio managers use a
"top-down" approach, looking first at general economic factors and market
conditions, then at individual securities. The portfolio managers look for value
while adhering to the credit and other restrictions on money market funds.
ALTHOUGH THE FUNDS INVEST IN U.S. GOVERNMENT OBLIGATIONS, AN INVESTMENT IN THE
FUNDS IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
PRIME MONEY MARKET FUND AND INSTITUTIONAL PRIME MONEY MARKET FUND
The PRIME MONEY MARKET FUND and INSTITUTIONAL PRIME MONEY MARKET FUND invest
primarily in a variety of high quality money market instruments.
The portfolio managers employ a "top-down" approach when selecting securities
for these Funds, looking for value while adhering to the quality and other
restrictions on money market funds.
-----------------------------------------------------------------------------
WHAT IS A "TOP-DOWN" APPROACH?
Managers of mutual funds use different styles when selecting securities to
purchase. When using a "TOP-DOWN" approach, the portfolio manager looks first
at broad market factors, and on the basis of those market factors, chooses
certain sectors or industries within the overall market. The manager then
looks at individual companies within those sectors or industries.
-----------------------------------------------------------------------------
PROSPECTUS
17
<PAGE>
MORE ABOUT BOSTON 1784 FUNDS (CONTINUED)
================================================================================
PORTFOLIO MANAGERS OF BOSTON 1784 MONEY MARKET FUNDS
DAVID H. THOMPSON, Director of Fund Management, has been the manager of the
Tax-Free Money Market Fund since 1998. Mr. Thompson, who has more than 27 years
of experience in investment management, research analysis and securities
trading, has been Director of Fund Management at BankBoston since 1985.
EMMETT M. WRIGHT, Senior Fund Manager, has been the manager of the U.S. Treasury
Money Market Fund and manager of the Institutional U.S. Treasury Money Market
Fund since they began operations. Mr. Wright, who has more than six years of
investment management and research analysis experience, was an associate Fund
Manager at BankBoston from 1993 to 1994 and has been a Fund Manager at
BankBoston since 1994.
LISA W. LEBOEUF, Fund Manager, has been a co-manager of the U.S. Treasury Money
Market Fund and the Institutional U.S. Treasury Money Market Fund since January
1997. Ms. LeBoeuf, who has seven years experience in investment management, has
been with BankBoston since 1978.
MARY K. WERLER, Senior Fund Manager, and LISA W. LEBOEUF, Fund Manager, have
been co-managers of the Prime Money Market Fund since December 1996 and
co-managers of the Institutional Prime Money Market Fund since it began
operations in November 1997. Ms. Werler, who has more than eleven years of
investment management experience, has been a Fund Manager at BankBoston since
1993. From 1987 to 1993, Ms. Werler was an Associate Portfolio Manager with
Keystone Investment Co. Ms. LeBoeuf's investment experience is described above.
PROSPECTUS
18
<PAGE>
MANAGEMENT
================================================================================
INVESTMENT ADVISER
BankBoston is the investment adviser of each Fund and, subject to policies set
by the Trustees, makes investment decisions. BankBoston is the successor to a
bank chartered in 1784 and offers a wide range of banking and investment
services to customers throughout the world. BankBoston has been providing asset
management services since 1890. The Private Bank Division of BankBoston is the
investment management group within BankBoston that advises the Funds. As of July
31, 1998, BankBoston's Private Bank was responsible for the investment
management of approximately $24 billion of individual, institutional, endowment
and corporate assets, including $8.9 billion in assets of the Funds, in money
market, equity, and fixed income securities. BankBoston's Private Bank has
earned national recognition and respect as an investment manager. BankBoston's
legal name is BankBoston, National Association and its address is 100 Federal
Street, Boston, Massachusetts 02110.
MANAGEMENT FEES
The following chart shows the investment management fees paid by each Fund
during the last fiscal year. The Institutional Prime Money Market Fund began
operations during the past fiscal year and the fees shown are those currently in
effect.
- --------------------------------------------------------------------------------
MANAGEMENT FEES PAID
(expressed as a percentage of average net assets)
- --------------------------------------------------------------------------------
Tax-Free Money Market Fund .40%
U.S. Treasury Money Market Fund .35
Institutional U.S. Treasury Money Market Fund .20
Prime Money Market Fund .35
Institutional Prime Money Market Fund .05
BankBoston waives its investment management fees, if necessary, to limit the
total operating expenses of a Fund to a specified level. BankBoston also may
contribute to the Funds from time to time to help them maintain competitive
expense ratios. These arrangements are voluntary and may be terminated at any
time. The fees without waivers are shown in the fee table in the Risk/Return
Summary.
YEAR 2000
The "Year 2000" issue stems from the use of a two-digit format to define the
year in certain date-sensitive application systems rather than the use of a
four-digit format. As a result, date-sensitive software programs could recognize
a date using "00" as the year 1900 rather than the year 2000. This could result
in major systems or process failures or the generation of erroneous data, which
would lead to disruptions in the Funds' business operations.
The Funds have no application systems of their own and are entirely dependent on
their service providers' systems and software. The Funds are working with their
service providers (including their investment advisers, administrator, transfer
agent and custodian) to identify and remedy any Year 2000 issues. However, the
Funds cannot guarantee that all Year 2000 issues will be identified and
remedied, and the failure to successfully identify and remedy all Year 2000
issues could result in an adverse impact on the Funds.
PROSPECTUS
19
<PAGE>
DISTRIBUTION ARRANGEMENTS
================================================================================
Boston 1784 Money Market Funds do not charge any sales loads, deferred sales
loads or other fees in connection with the purchase of shares and do not have a
Rule 12b-1 plan.
PROSPECTUS
20
<PAGE>
FINANCIAL HIGHLIGHTS
================================================================================
THE FINANCIAL HIGHLIGHTS TABLE IS INTENDED TO HELP YOU UNDERSTAND A 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 EACH FUND (ASSUMING
REINVESTMENT OF ALL DISTRIBUTIONS). THIS INFORMATION HAS BEEN AUDITED BY
PRICEWATERHOUSECOOPERS LLP, INDEPENDENT ACCOUNTANTS, WHOSE REPORT, ALONG WITH
THE FUNDS' FINANCIAL STATEMENTS, ARE INCLUDED IN THE FUNDS' ANNUAL REPORTS,
WHICH ARE AVAILABLE UPON REQUEST.
<TABLE>
<CAPTION>
NET NET NET RATIO
ASSET DISTRIBUTIONS ASSET ASSETS RATIO OF NET
VALUE NET FROM NET VALUE END OF EXPENSES INCOME
BEGINNING INVESTMENT INVESTMENT END TOTAL OF PERIOD TO AVERAGE TO AVERAGE
OF PERIOD INCOME INCOME OF PERIOD RETURN (000) NET ASSETS NET ASSETS
- -------------------------------------------------------------------------------------------------------------------------------
BOSTON 1784 TAX-FREE MONEY MARKET FUND
<S> <C> <C> <C> <C> <C> <C> <C> <C>
For the year ended May 31, 1998 $1.00 0.03 (0.03) $1.00 3.33% $1,007,724 0.53% 3.28%
For the year ended May 31, 1997 $1.00 0.03 (0.03) $1.00 3.22% $ 845,612 0.54% 3.17%
For the year ended May 31, 1996 $1.00 0.03 (0.03) $1.00 3.55% $ 549,628 0.54% 3.49%
For the year ended May 31, 1995 $1.00 0.03 (0.03) $1.00 3.29% $ 539,412 0.50% 3.28%
For the period ended May 31, 1994 (1) $1.00 0.02 (0.02) $1.00 2.31%* $ 407,448 0.27% 2.39%
- -------------------------------------------------------------------------------------------------------------------------------
BOSTON 1784 U.S. TREASURY MONEY MARKET FUND
For the year ended May 31, 1998 $1.00 0.05 (0.05) $1.00 5.02% $ 372,657 0.65% 4.91%
For the year ended May 31, 1997 $1.00 0.05 (0.05) $1.00 4.86% $ 390,294 0.64% 4.76%
For the year ended May 31, 1996 $1.00 0.05 (0.05) $1.00 5.16% $ 78,999 0.64% 5.02%
For the year ended May 31, 1995 $1.00 0.05 (0.05) $1.00 4.81% $ 55,068 0.60% 5.13%
For the period ended May 31, 1994 (2) $1.00 0.03 (0.03) $1.00 2.64%* $ 5,593 0.65% 2.91%
- -------------------------------------------------------------------------------------------------------------------------------
BOSTON 1784 INSTITUTIONAL U.S. TREASURY MONEY MARKET FUND
For the year ended May 31, 1998 $1.00 0.05 (0.05) $1.00 5.36% $4,285,801 0.33% 5.24%
For the year ended May 31, 1997 $1.00 0.05 (0.05) $1.00 5.16% $2,591,487 0.33% 5.05%
For the year ended May 31, 1996 $1.00 0.05 (0.05) $1.00 5.45% $ 644,733 0.32% 5.29%
For the year ended May 31, 1995 $1.00 0.05 (0.05) $1.00 5.05% $ 395,585 0.30% 5.12%
For the period ended May 31, 1994 (3) $1.00 0.03 (0.03) $1.00 2.99%* $ 181,568 0.22% 3.16%
- -------------------------------------------------------------------------------------------------------------------------------
BOSTON 1784 PRIME MONEY MARKET FUND
For the year ended May 31, 1998 $1.00 0.05 (0.05) $1.00 5.16% $ 127,588 0.65% 5.05%
For the period ended May 31, 1997 (4) $1.00 0.02 (0.02) $1.00 2.07%* $ 123,099 0.65% 4.98%
For the year ended December 31, 1996 (5) $1.00 0.05 (0.05) $1.00 5.02% $ 93,229 0.66% 4.85%
For the year ended December 31, 1995 $1.00 0.05 (0.05) $1.00 5.49% $ 156,532 0.62% 5.40%
For the year ended December 31, 1994 $1.00 0.04 (0.04) $1.00 3.75% $ 136,923 0.65% 3.64%
For the year ended December 31, 1993 $1.00 0.03 (0.03) $1.00 2.72% $ 168,909 0.59% 2.68%
For the period ended December 31, 1992 (6) $1.00 0.02 (0.02) $1.00 2.13%* $ 242,935 0.59% 3.13%
For the period ended April 30, 1992 (7) $1.00 0.03 (0.03) $1.00 3.55% $ 280,931 0.48% 4.61%
- -------------------------------------------------------------------------------------------------------------------------------
BOSTON 1784 INSTITUTIONAL PRIME MONEY MARKET FUND
For the period ended May 31, 1998 (8) $1.00 0.03 (0.03) $1.00 5.55% $ 302,338 0.27% 5.36%
- -------------------------------------------------------------------------------------------------------------------------------
RATIO OF RATIO OF NET
EXPENSES TO INCOME TO
AVERAGE NET AVERAGE NET
ASSETS (EXCLUDING ASSETS (EXCLUDING
WAIVERS) WAIVERS)
- ------------------------------------------------------------------------
BOSTON 1784 TAX-FREE MONEY MARKET FUND
For the year ended May 31, 1998 0.53% 3.28%
For the year ended May 31, 1997 0.56% 3.15%
For the year ended May 31, 1996 0.60% 3.43%
For the year ended May 31, 1995 0.61% 3.17%
For the period ended May 31, 1994 (1) 0.71% 1.95%
- ------------------------------------------------------------------------
BOSTON 1784 U.S. TREASURY MONEY MARKET FUND
For the year ended May 31, 1998 0.70% 4.86%
For the year ended May 31, 1997 0.72% 4.68%
For the year ended May 31, 1996 0.75% 4.91%
For the year ended May 31, 1995 0.92% 4.81%
For the period ended May 31, 1994 (2) 6.42% (2.86)%
- ------------------------------------------------------------------------
BOSTON 1784 INSTITUTIONAL U.S. TREASURY MONEY MARKET FUND
For the year ended May 31, 1998 0.33% 5.24%
For the year ended May 31, 1997 0.34% 5.04%
For the year ended May 31, 1996 0.39% 5.22%
For the year ended May 31, 1995 0.41% 5.01%
For the period ended May 31, 1994 (3) 0.55% 2.83%
- ------------------------------------------------------------------------
BOSTON 1784 PRIME MONEY MARKET FUND
For the year ended May 31, 1998 0.70% 5.00%
For the period ended May 31, 1997 (4) 0.75% 4.88%
For the year ended December 31, 1996 (5) 0.66% 4.85%
For the year ended December 31, 1995 0.62% 5.40%
For the year ended December 31, 1994 0.69% 3.60%
For the year ended December 31, 1993 0.70% 2.57%
For the period ended December 31, 1992 (6) 0.64% 3.08%
For the period ended April 30, 1992 (7) 0.63% 4.46%
- ------------------------------------------------------------------------
BOSTON 1784 INSTITUTIONAL PRIME MONEY MARKET FUND
For the period ended May 31, 1998 (8) 0.42% 5.21%
- ------------------------------------------------------------------------
<FN>
* Returns are for the period indicated and have not been annualized.
(1) The Tax-Free Money Market Fund commenced operations on June 14, 1993. All
ratios for the period have been annualized.
(2) The U.S. Treasury Money Market Fund commenced operations on June 7, 1993.
All ratios for the period have been annualized.
(3) The Institutional U.S. Treasury Money Market Fund commenced operations on
June 14, 1993. All ratios for the period have been annualized.
(4) The Prime Money Market Fund changed its fiscal year from December 31 to May
31. Reflects operations for the period from January 1, 1997 to May 31,
1997. All ratios for the period have been annualized.
(5) Until December 9, 1996, the Prime Money Market Fund was known as the
BayFunds Money Market Portfolio and was a portfolio of BayFunds, an
open-end investment company registered under the Investment Company Act of
1940, as amended. Shares of the BayFunds Money Market Portfolio were
divided into two classes, known as Investment Shares and Trust Shares. The
Prime Money Market Fund has only a single class of outstanding shares. For
periods prior to December 9, 1996, Ernst & Young LLP were the auditors of
the BayFunds Money Market Portfolio.
(6) The Prime Money Market Fund changed its fiscal year from April 30 to
December 31. Reflects operations for the period from May 1, 1992 to
December 31, 1992. All ratios for the period have been annualized.
(7) Reflects operations for the period from August 1, 1991 (date of initial
public investment) to April 30, 1992. During the period from May 16, 1991
(start of business) to August 1, 1991, net investment income aggregating to
$0.01 per share ($1,101) was distributed to Federated Administrative
Services. All ratios for the period have been annualized.
(8) The Institutional Prime Money Market Fund commenced operations on November
5, 1997. All ratios for the period have been annualized.
</FN>
</TABLE>
PROSPECTUS
21
<PAGE>
NOTES
================================================================================
PROSPECTUS
22
