U S GLOBAL ACCOLADE FUNDS, 485APOS, 1998-12-30

U S GLOBAL ACCOLADE FUNDS
485APOS, 1998-12-30

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Registration No. 33-61542
Registration No. 811-7662

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Pre-Effective Amendment No. / /
Post-Effective Amendment No. 14

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

Post-Effective Amendment No. 14

U.S. GLOBAL ACCOLADE FUNDS
(Exact Name of Registrant as Specified in Charter)

7900 Callaghan Road
San Antonio, Texas 78229
(Address of Principal Executive Office)

Registrant's Telephone Number, including Area Code (210) 308-1234

Frank E. Holmes, President
U.S. Global Accolade Funds
7900 Callaghan Road
San Antonio, Texas 78249-3340
(Name and Address of Agent for Service)

Approximate date of proposed public offering:

It is proposed that this filing will become effective (check appropriate box):

/ / immediately upon filing pursuant to paragraph (b) of Rule 485

/ / on (date), pursuant to paragraph (b) of Rule 485

/ / 60 days after filing pursuant to paragraph (a) of Rule 485

/X/ On March 1, 1999, pursuant to paragraph (a) of Rule 485.

Registrant hereby declares, pursuant to Rule 24f-2 under the Investment Company
Act of 1940, an indefinite number of shares of beneficial interest, no par
value, have previously been registered.

<PAGE>

................................................................................
CROSS REFERENCE SHEET
................................................................................

PART A

FORM N-1A ITEM NUMBER SECTION(S) IN PROSPECTUS
- ------------------------------------ -------------------------------------

1. Front and Back Cover Pages Same

2. Risk/Return Summary: Investments, Risk/Return Summary
Risks, and Performance Investment Objectives
Main Investment Strategies
Main Risks
Performance Information

3. Risk/Return Summary: Fee Table Fees and Expenses

4. Investment Objectives, Principal Same
Investment Strategies, and
Related Risks

5. Management's Discussion of Fund Not Applicable
Performance

6. Management, Organization, Fund Management
and Capital Structure

7. Shareholder Information How to Buy Shares
How to Sell (Redeem) Shares
Important Information about Purchases
and Redemptions
Other Information About Your Account

8. Distribution Arrangements Distribution Plan

9. Financial Highlights Information Financial Highlights

PART B

10. Cover Page and Table of Contents Same

11. Fund History General Information

12. Description of the Fund and Investment Restrictions and Risks
Its Investments Investment Strategies and Risks
Portfolio Transactions

13. Management of the Fund Same

14. Control Persons and Principal Principal Holders of Securities
Holders of Securities

15. Investment Advisory and Other Investment Advisory Services
Services General Information
Transfer Agency and Other Services
Distribution Plan

16. Brokerage Allocation and Portfolio Turnover
Other Practices Portfolio Transactions

17. Capital Stock and Other Securities General Information

18. Purchase, Redemption, Certain Purchases of Shares of
and Pricing of Shares the Fund
Additional Information on Redemptions

19. Taxation of the Fund Tax Status

20. Underwriters Underwriter/Distributor
Distribution Plan

21. Calculation of Performance Data Same

22. Financial Statements Cover Page
Financial Statements
<PAGE>

................................................................................
PART A. INFORMATION REQUIRED IN A PROSPECTUS (ITEMS 1 - 9)
................................................................................

U.S. Global Accolade Funds
BONNEL GROWTH FUND

Prospectus
March 1, 1999

These securities have not been approved or disapproved by the Securities and
Exchange Commission or any state securities commission nor has the Securities
and Exchange Commission or any state securities commission passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.

- -1-

<PAGE>

TABLE OF CONTENTS

RISK/RETURN SUMMARY............................................................3

PERFORMANCE INFORMATION........................................................4

FEES AND EXPENSES..............................................................5

INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES AND RELATED
RISKS.....................................................................6

FUND MANAGEMENT................................................................8

HOW TO BUY SHARES.............................................................10

HOW TO SELL (REDEEM) SHARES...................................................12

IMPORTANT INFORMATION ABOUT PURCHASES AND REDEMPTIONS.........................14

OTHER INFORMATION ABOUT YOUR ACCOUNT..........................................15

DISTRIBUTIONS AND TAXES.......................................................16

FINANCIAL HIGHLIGHTS..........................................................17

FUNDS IN THE U.S. GLOBAL INVESTORS FAMILY OF FUNDS............................18

OTHER FUND SERVICES...........................................................18

- -2-

<PAGE>

RISK/RETURN SUMMARY

INVESTMENT OBJECTIVE

The Bonnel Growth Fund seeks long-term growth of capital.

The Fund's trustees may change the objective without a shareholder vote and the
Fund will notify you of any changes that are material. If there is a material
change to the Fund's objective or policies, you should consider whether the Fund
remains an appropriate investment for you. There is no guarantee that the Fund
will meet its objective.

MAIN INVESTMENT STRATEGIES

The Fund invests primarily in a diversified portfolio of common stocks. In
general, the Fund's Sub-Adviser uses a growth-style process to choose companies
for investment. A growth company is one that has had superior growth,
profitability and quality relative to companies in the same industry and that is
expected to continue such performance. The Fund may invest in companies of all
sizes; however, the Sub-Adviser currently focuses on small and medium-sized
companies.

MAIN RISKS

MARKET RISK. The Fund is designed for long-term investors who can accept the
risks of investing in a portfolio with significant common stock holdings. Common
stocks tend to be more volatile than other investment choices such as bonds and
money market instruments. The value of the Fund's shares will go up and down due
to movement of the overall stock market or of the value of the individual
securities held by the Fund, and you could lose money by investing in the Fund.

PORTFOLIO MANAGEMENT. The skill of the Sub-Adviser will play a significant role
in the Fund's ability to achieve its investment objective.

SMALL COMPANY RISK. Investment in smaller companies involves greater risk than
investment in larger, more established companies. The stocks of small- and
medium-size companies often fluctuate in price to a greater degree than stocks
of larger, more mature companies. Smaller companies may have more limited
financial resources, fewer product lines and less liquid trading markets for
their stock.

- -3-

<PAGE>

PERFORMANCE INFORMATION

The bar chart below shows changes in the Fund's performance from year to year.

[GRAPHIC: Bar Chart plotted from date in table below]

CALENDAR YEAR
----------------------------------------
1995 1996 1997 1998
----- ----- ----- ----
RETURN 45.22% 27.94% 10.31% XX.XX%

Best quarter shown in the bar chart above: xx.xx% in ____ quarter 199___
Worst quarter shown in bar chart above: xx.xx% in ____ quarter 199___

The table below compares the Fund's average annual returns for the last year, as
well as for the life of the Fund, to those of unmanaged indexes.

<TABLE>
<S> <C> <C>
AVERAGE ANNUAL RETURNS PAST SINCE
(FOR THE PERIODS ENDING 1 YEAR INCEPTION,
DECEMBER 31, 1998) 10/17/94
----------------------- ------ ----------
Bonnel Growth Fund xx.xx% xx.xx%
S&P 500 Index * xx.xx% xx.xx%
Russell 2000 Index ** xx.xx% xx.xx%

<FN>
* The S&P 500 Stock Index is a widely recognized index of common
stock prices of U.S. companies
** The Russell 2000 Index consists of the 2,000 smallest companies
in the Russell 3000(R) Index, a widely-recognized small cap index.
</FN>
</TABLE>

Past performance does not guarantee future results.

- -4-

<PAGE>

FEES AND EXPENSES

SHAREHOLDER TRANSACTION EXPENSES - DIRECT FEES

There are no sales charges when you buy Fund shares. There may be a small fee
when you redeem or exchange shares. If you sell shares and request your money
by wire transfer, there is a $10 fee. Your bank may also charge a fee for
receiving wires.

<TABLE>
<S> <C>
Maximum sales charge ................................... None
Account closing fee .................................... $10
Administrative exchange fee ............................ $5
Trader's fee ........................................... 0.25%*

<FN>
* Paid if shares are exchanged or redeemed in less than one month.
</FN>
</TABLE>

ANNUAL FUND OPERATING EXPENSES - INDIRECT FEES

Fund operating expenses are paid out of the Fund's assets and are reflected in
the Fund's share price and dividends. "Other Expenses" include Fund expenses
such as custodian, accounting and transfer agent fees.

The figures below show operating expenses as a percentage of the Fund's net
assets during the fiscal year ended October 31, 1998.

<TABLE>
<S> <C>
Management Fees ..................................... 1.00%
Distribution (12b-1) Fees ........................... 0.25%
Other Expenses ...................................... 0.59%
Total Annual Fund Operating Expenses ................ 1.84%
</TABLE>

EXAMPLE OF EFFECT OF THE FUND'S OPERATING EXPENSES

This example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. The example assumes that:

o You invest $10,000
o You redeem all of your shares at the end of the periods shown
o Your investment has a 5% annual return
o The Fund's operating expenses remain the same

<TABLE>
<S> <C>
1 year ................... $197
3 years .................. $589
5 years .................. $1,005
10 years ................. $2,168
</TABLE>

- -5-

<PAGE>

INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES AND RELATED RISKS

This section takes a closer look at the investment objective of the Fund, its
principal investment strategies and certain risks of investing in the Fund.

INVESTMENT OBJECTIVE AND PRINCIPAL INVESTMENT STRATEGIES

The Fund seeks long-term growth of capital. The Fund pursues its objective by
investing primarily in a diversified portfolio of common stocks.

The Fund is not intended to be a complete investment program, and there is no
assurance that its investment objective can be achieved. The Fund's investment
objective is not a fundamental policy and may be changed by the Fund's board of
trustees without shareholder approval upon 30 days written notice.

INVESTMENT PROCESS

The Sub-Adviser for the Fund, Bonnel, Inc., initially applies a "top-down"
analysis of the markets. This means that the Sub-Adviser considers the growth
potential of the capitalization categories (i.e., small, medium and large) and
industry sectors. The Sub-Adviser chooses common stocks within those categories
that have the potential for capital appreciation. The Sub-Adviser analyzes a
company's capital appreciation potential based upon various investment criteria,
which may include earnings figures, equity ownership by management, market
leadership, strong management, price to earnings ratios, debt to equity ratios,
stock price movement, magnitude of trading volume and the general growth
prospects of the company. The Fund may invest in companies of all sizes;
however, the Sub-Adviser currently focuses on companies with market
capitalizations of less than $5 billion (mid and small capitalization) at the
time of initial purchase. The skill of the Sub-Adviser will play a significant
role in the Fund's ability to achieve its investment objective.

GENERAL PORTFOLIO POLICIES

PRINCIPAL TYPES OF INVESTMENTS AND RELATED RISKS. Under normal market
conditions, at least 80% of the Fund's total assets will be invested in equity
securities, which includes common stock, securities convertible into common
stock and preferred stock. Because the Fund may invest substantially all of its
assets in common stocks, the main risk is that the value of the stocks it holds
may decrease in response to the activities of an individual company or in
response to general market, business and economic conditions. If this occurs,
the Fund's share price may also decrease. The Fund's performance may also be
affected by risks specific to certain types of investment which are discussed
below.

The Sub-Adviser's investment focus on small- and medium-size companies involves
greater risk than a fund that invests primarily in larger, more established
companies. The stocks of smaller companies often fluctuate in price to a greater
degree than stocks of larger, more mature companies. Smaller companies may have
more limited financial resources, fewer

- -6-

<PAGE>

product lines and less liquid trading markets for their stock. The Fund's share
price may experience greater volatility when the Fund is more heavily invested
in small companies.

OTHER TYPES OF INVESTMENTS AND CONSIDERATIONS. While not principal strategies,
the Fund may invest to a limited extent in preferred stock and convertible
securities, may purchase or sell options, may invest in foreign securities and
money market instruments, may lend portfolio securities, may hold temporary
investments such as repurchase agreements, and may invest in illiquid
securities. The risks of these types of instruments and strategies are described
below and in the Statement of Additional Information.

While investment in foreign companies is not a current focus of the Fund, the
Fund may invest up to 25% of its total assets in the common stocks and other
equity securities of foreign issuers, but only if they are listed on a domestic
or foreign stock exchange, quoted on Nasdaq- AMEX or traded on the domestic or
foreign over-the-counter market. The Fund may invest in sponsored or unsponsored
American Depository Receipts (ADRs), which represent shares of foreign issuers.
As part of its foreign investments, the Fund may invest up to 5% of its total
assets in emerging markets. Investments in foreign securities involve greater
risks than investments in domestic securities. Foreign securities tend to be
more volatile than domestic securities due to a number of factors, including
fluctuations in currency exchange rates; political, social or economic
instability; and less stringent accounting, disclosure and financial reporting
requirements in a particular country. These risks are generally intensified in
emerging markets.

The Fund may purchase or sell options on individual securities and on equity
indexes. Options are generally used to hedge the portfolio against certain
market risks, but they may also be used to increase returns. Using options may
decrease returns and increase volatility.

The Fund may invest up to 15% of its net assets in illiquid securities.
Disposition of illiquid securities often takes more time than more liquid
securities, may result in higher selling expenses and may not be able to be made
at desirable prices or at the prices at which such securities have been valued
by the Fund.

For temporary defensive purposes, the Fund may invest up to 100% of its assets
in liquid, high grade money market instruments. When the Fund is in a defensive
investment position, it may not achieve its investment objective.

The Fund's portfolio turnover rate varies from year to year according to market
conditions and has historically exceeded 100%. High turnover rate increases
transaction costs and may increase your exposure to capital gains taxes.

YEAR 2000 READINESS

- -7-

<PAGE>

they have taken steps reasonably designed to address any potential Year 2000
Problem for the computer programs used by the Adviser, Sub-Adviser and the
transfer agent. In addition, management is in the process of confirming that the
third-party service providers used by the Fund, the Adviser, the Sub-Adviser
and the transfer agent are also taking steps reasonably designed to address the
Year 2000 Problem with respect to their computer systems. At this time, there
can be no assurance that these steps will be sufficient to avoid any adverse
impact to the Fund. Furthermore, there can be no assurances that the companies
in which this Fund invests will not be adversely affected by the Year 2000
Problem.

FUND MANAGEMENT

SUB-ADVISER

U.S. Global Investors, Inc., the Adviser, has retained Bonnel, Inc. as the Sub-
Adviser for the Fund. In consideration for investment management services
rendered to the Fund, the Adviser shares the management fee (net of all expense
reimbursements and waivers) with the Sub-Adviser. The Fund is not responsible
for paying any portion of the Sub-Adviser's fees.

PORTFOLIO MANAGER

Arthur Bonnel, President of Bonnel, Inc., is the Fund's portfolio manager and
has been managing money since 1970. Mr. Bonnel was previously the portfolio
manager of the MIM Stock Appreciation Fund from August 1987 through May 1994,
which had objectives, policies and strategies that were substantially similar to
those of the Bonnel Growth Fund. The table below compares the performance of the
MIM Stock Appreciation Fund to the S&P 500, a widely recognized unmanaged index
that generally represents U.S. common stocks. The table shows average annual
returns for the one-year, three-year and five-year periods ended February 28,
1994, assuming reinvestment of dividends and distributions, net of fund
expenses. Past performance does not guarantee future results.

<TABLE>
<CAPTION>
THE MIM STOCK APPRECIATION (a) S&P 500 INDEX
----------------------------- -------------
<S> <C> <C>
One Year...............21.58% 8.31%
Three Years............20.80% 11.61%
Five Years.............20.64% 13.64%

<FN>
(a) The expense ratio of the MIM Stock Appreciation Fund
from 1988 through 1993 ranged from a high of 3.05%
in 1988 to a low of 2.47% in 1993. The annualized
expense ratio of the Bonnel Growth Fund for the fiscal
period ended October 31, 1998, was 1.84%.
</FN>
</TABLE>

INVESTMENT ADVISER

U.S. Global Investors, Inc., 7900 Callaghan Road, San Antonio, Texas 78229,
furnishes investment advice and manages the trust's business affairs. The
Adviser was organized in 1968 and also serves as investment adviser to U.S.
Global Investors Funds, a family of mutual funds with approximately $1.3 billion
in assets. For the fiscal year ended October 31, 1998, the Adviser was paid a
fee of 1.00% of net assets in the Fund.

- -8-

<PAGE>

Adviser and Sub-Adviser investment personnel may invest in securities for their
own accounts according to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.

DISTRIBUTION PLAN

The Fund has adopted a 12b-1 plan that allows the Fund to pay the Adviser and
its affiliates for shareholder services and promotional expenses. Because this
fee is continually paid out of the Fund's assets, over time it will increase the
cost of your investment and may potentially cost you more than other types of
sales charges. For the fiscal year ended October 31, 1998, fees paid by the Fund
under this plan were 0.25% of Fund net assets.

- -9-

<PAGE>

HOW TO BUY SHARES

MINIMUMS
INITIAL INVESTMENT SUBSEQUENT INVESTMENT
o regular account $5000 $50
o ABC Investment Plan(R) $1000 $100
o custodial accounts for minors $1000 $50
o retirement account None None

SEND NEW ACCOUNT APPLICATIONS TO:
---------------------------------
Bonnel Growth Fund
P.O. Box 781234
San Antonio, TX 78278-1234

BY MAIL BY TELEPHONE BY AUTOMATIC INVESTMENT
------- ------------ ------------------------
[GRAPHIC: Picture of [GRAPHIC: Picture [GRAPHIC: Picture of
an Envelope] of a telephone] blocks] ABC
Investment Plan(R)

o Read this prospectus. o If you already have a o To purchase more
o Fill out the application U.S. Global Accolade shares automatically
if you are opening a Funds account, you each month, fill
new account. may purchase out the ABC Invest-
o Make out a check to additional shares by ment Plan(R)form.
the Bonnel Growth telephone order. o U.S. Global Accolade
Fund for the amount o You must pay for them Funds automatically
you want to invest. within seven business withdraws monies
o Send the application days. from your bank
and a check to the o Call 1-800-US-FUNDS account monthly.
Bonnel Growth Fund for current wire o See details on the
in the envelope instructions and a application.
provided. confirmation number.
o To add to an existing o We automatically grant
account, be sure to all shareholders
include your account telephone exchange
number on your check privileges unless they
and mail it with the decline them explicitly
investment slip found in writing.
on your confirmation o Telephone purchases
statement. are not available for
money market funds or
U.S. Global retirement
accounts.
- -10-

<PAGE>

------------------------------------------------------------
IMPORTANT Your check must be made payable to the Bonnel Growth Fund.
NOTES ABOUT
PAYING FOR You may not purchase shares by credit card or third-party
YOUR SHARES checks.

Telephone purchase orders may not exceed ten times the value
of all like-registered accounts on the date the order is
placed.

You may not exchange shares purchased by telephone until the
Fund has received and accepted payment.

Checks drawn on foreign banks will not be invested until the
collection process is complete.

The Fund will cancel unpaid telephone orders and any decline
in price of the shares will be collected from shares of any
affiliated funds you own.

If a check or ACH investment is returned unpaid due to
nonsufficient funds, stop payment or other reasons, the Fund
will charge you $20,and you will be responsible for any loss
incurred by the Fund.To recover any such loss or charge, the
Fund reserves the right to redeem shares of any affiliated
funds you own, and you could be prohibited from placing
further orders unless full payment by wire or cashiers check
accompanies the investment request.

Any expenses charged to the Fund for collection procedures
will be deducted from the amount invested.

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

EFFECTIVE An order to establish a new account and purchase shares of
TIME FOR the Fund will become effective, if accepted, at the time the
PURCHASE OR Fund next determines its net asset value (NAV) per share
REDEMPTION after the Fund's transfer agent or sub-agent has received:
ORDERS
o a completed and signed application, and
o a check or wire transfer.

If you already have a Bonnel Growth Fund account, your order
to purchase shares, if accepted, will become effective at
the time the Fund next determines NAV after the transfer
agent or sub-agent receives your written request or
telephone order.

In all cases, the shares purchased will be priced at the NAV
per share next determined after the time of effectiveness.

All purchases of shares are subject to acceptance by the
Fund and are not binding until accepted.

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

- -11-

<PAGE>

HOW TO SELL (REDEEM) SHARES

BY MAIL BY TELEPHONE
--------------------------- ------------------------------
[GRAPHIC: Picture of [GRAPHIC: Picture of
an Envelope] a telephone]

o Send a written request o Call 1-800-US-FUNDS.
showing your account number
and the dollar amount or o If you have an identically
number of shares you are registered account in a U.S.
redeeming to the address Global Investors treasury
shown under "How to Buy money market fund, with
Shares." checkwriting privileges, you
may call the Fund and direct
o Each registered shareholder an exchange of your Bonnel
must sign your request, with Growth Fund shares into your
the signature(s) appearing existing money market fund
exactly as it does on your account. You may then write a
account registration. check against your money
market fund account.
o Redemptions of more than
$15,000 require a signature o For telephone redemptions,
guarantee. see "Signature Guarantee/
Other Documentation" for
o A signature guarantee may limitations.
be required. See "Signature
Guarantee/Other o Telephone redemptions are not
Documentaion" section. available for equity funds or
shares held in retirement
accounts by the Fund.

- -12-

<PAGE>

------------------------------------------------------------------
IMPORTANT o Generally, we will send payment for your redeemed shares to you
NOTES within two business days after your redemption request has been
ABOUT received and accepted by the Fund.
REDEEMING
YOUR o You may receive payment for redeemed shares via wire. To elect
SHARES these services, send the Fund a written request giving your bank
information with signature guarantee for all registered owners.
(See "Signature Guarantee/Other Documentation".)

o You will be charged $10 for a wire transfer. International wire
charges will be higher.

o We will usually send a wire transfer the next business day after
receipt of your order.

o Proceeds from the redemption of shares purchased by check may be
delayed until full payment for the shares has been received and
cleared, which may take up to 7 days from the purchase date.

o To protect shareholders from the expense burden of excessive
trading, the Fund charges 0.25% of the value of shares redeemed
or exchanged when the shares are held less than one month.

- -13-

<PAGE>

IMPORTANT INFORMATION ABOUT PURCHASES AND REDEMPTIONS

The Fund reserves the following rights:

o To hold redemption proceeds for up to seven days.
o To waive or change investment minimums.
o To refuse any application, investment or exchange.
o To require signature guarantee or any other documentation.
o To freeze any account and suspend account services when notice is
received that there is a dispute between registered or beneficial
owners or there is reason to believe a fraudulent transaction may
occur.

EXCHANGING SHARES

When exchanging shares into other funds in the U.S. Global Investors family of
funds:

o Each account must be registered identically; each must have the same
signatures and addresses.
o You will be charged $5 by the transfer agent for each exchange out of
any fund account.
o Retirement accounts administered by the Adviser or its agents may
exchange up to three times per quarter at no charge. (Short term trading
fee may apply.)
o You may exchange by telephone or by mail.
o You are responsible for obtaining and reading the prospectus for the
fund into which you are exchanging.
o Exchanges result in the sale of one fund's shares and the purchase of
another fund's shares, which is usually a taxable event to you.
o Exchanges into any new fund are subject to that fund's initial and
subsequent investment minimums.
o Exchanges out of the Fund of shares held less than one month are
subject to the short-term trading fee.

REDEMPTIONS BY THE FUNDS OF CERTAIN ACCOUNTS

To reduce its expenses, the Fund may involuntarily redeem the shares in your
account if your balance drops below $5000 for any reason other than share value
decline. Active ABC Investment Plan(R) accounts, retirement accounts and
custodial accounts for minors are not subject to these involuntary redemption
policies. You will be given 30 days written notice before the Fund undertakes
any involuntary redemption. During that time you may buy more shares to bring
your account above the minimum.

NET ASSET VALUE (NAV) CALCULATION

The price at which you buy, sell or exchange fund shares is the NAV. The NAV of
the Fund is calculated at the close of regular trading of the New York Stock
Exchange (NYSE), which is usually 4:00 Eastern time, each day that the NYSE is
open. NAV is determined by adding the value of the Fund's investments, cash and
other assets, deducting liabilities, and dividing that value by the total number
of Fund shares outstanding.

- -14-

<PAGE>

For a purchase, redemption or exchange of Fund shares, your price is the NAV
next calculated after your request is received in good order and accepted by the
Fund, its agent or designee. To receive a specific day's price, your request
must be received before the close of the NYSE on that day.

When the Fund calculates NAV, it values the securities it holds at market value.
When market quotes are not available or do not fairly represent market value,
the securities may be valued at fair value. Fair value will be determined in
good faith using consistently applied procedures that have been approved by the
trustees. Money market instruments maturing within 60 days are valued at
amortized cost, which approximates market value. Assets and liabilities
expressed in foreign currencies are converted into U.S. dollars at the
prevailing market rates quoted by one or more banks or dealers shortly before
the close of the NYSE.

SIGNATURE GUARANTEE/OTHER DOCUMENTATION

The Fund requires signature guarantees to protect you and the Fund from
attempted fraudulent requests for redeemed shares. Your redemption request must
therefore be in writing and accompanied by a signature guarantee if:

o Your redemption request exceeds $15,000.
o You request that payment be made to a name other than the one on your
account registration.
o You request that payment be mailed to an address other than the one of
record with the Fund.
o You change or add information relating to your designated bank.
o You have changed your address of record within the last 30 days.

You may obtain a signature guarantee from most banks, credit unions,
broker/dealers, savings and loans, and other eligible institutions. You cannot
obtain a signature guarantee from a notary public.

The guarantor must use a stamp "SIGNATURE GUARANTEED" and the name of the
financial institution. An officer of the institution must sign the guarantee. If
residing outside the United States, a Consular's seal will be accepted in lieu
of a signature guarantee. Military personnel may acknowledge their signatures
before officers authorized to take acknowledgments, e.g. legal officers and
adjutants.

The signature guarantee must appear together with the signature(s) of all
registered owner(s) of the redeemed shares on the written redemption request.

Additional documents are required for redemptions by corporations, executors,
administrators, trustees, and guardians. For instructions call 1-800-873-8637.

OTHER INFORMATION ABOUT YOUR ACCOUNT

The Fund takes precautions to ensure that telephone transactions are genuine,
including recording the transactions, testing shareholder identity and sending
written confirmations to

- -15-

<PAGE>

shareholders of record. The Fund and its service providers are not liable for
acting upon instructions that they believe to be genuine if these procedures are
followed.

CONFIRMATIONS

After any transaction, you will receive written confirmation including the per
share price and the dollar amount and number of shares bought or redeemed.

PURCHASES THROUGH BROKER/DEALERS

You may buy Fund shares through financial intermediaries such as broker/dealers
or banks, who may charge you a fee or have different account minimums which are
not applicable if you buy shares directly from the Fund.

DISTRIBUTIONS AND TAXES

Unless you elect to have your distributions in cash, they will automatically be
reinvested in Fund shares. The Fund generally pays income dividends and
distributes capital gains, if any, annually.

TAXES TO YOU

You will generally owe taxes on amounts distributed to you by the Fund, whether
you reinvest the distributions in additional shares or receive them in cash.

Distributions of gains from the sale of assets held by the Fund for more than a
year generally are taxable to you at the applicable mid-term or long-term
capital gains rate, regardless of how long you have held Fund shares.
Distributions from other sources generally are taxed as ordinary income.

Each year the Fund will send you a statement that will detail the tax status of
distributions made to you for that year.

If you redeem Fund shares that have gone up in value, you will have a taxable
gain when you redeem. Exchanges are treated as a redemption and purchase for tax
purposes. Therefore, you will also have a taxable gain upon exchange if the
shares redeemed have gone up in value.

- -16-

<PAGE>

FINANCIAL HIGHLIGHTS

This table is intended to show you the Fund's financial performance for the past
five years. Some of the information reflects financial results for a single Fund
share. The total returns represent the rate that an investor would have earned
(or lost) money on an investment in the Fund. It assumes that all dividends and
capital gains have been reinvested.

PricewaterhouseCoopers LLP has audited this information. PricewaterhouseCoopers'
report and the Fund's financial statements are included in the annual report,
which is available by request.

<TABLE>
YEAR ENDED
OCTOBER 31, YEAR ENDED SEPTEMBER 30,
-------------------- ----------------------------------
1998 1997* 1997 1996 1995**
------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD $19.68 $21.86 $17.15 $14.81 $10.02
Income from investment operations
Net investment income (loss) (0.23) (0.03) (0.21) (0.14) (0.07)
Net realized and unrealized gains (losses) on securities 0.44 (2.15) 5.09 3.13 4.91
------- -------- -------- ------- -------
Total from investment operations 0.21 (2.18) 4.88 2.99 4.84
Less distributions
From net investment income -- -- -- -- (0.05)
From capital gains (3.71) -- (0.17) -- --
In excess of capital gains -- -- -- (0.65) --
------- -------- -------- ------- -------
Total distributions (3.71) -- (0.17) (0.65) (0.05)
------- -------- -------- ------- -------
NET ASSET VALUE AT END OF PERIOD $16.18 $19.68 $21.86 $17.15 $14.81
------- -------- -------- ------- -------
TOTAL RETURN (a) 0.80% (9.97)% 28.67% 21.27% 48.74%
Ratios/Supplemental data (b)
Net assets, end of period (in thousands) $87,751 $104,643 $117,891 $90,696 $24,673
Ratio of expenses to average net assets 1.84% 1.72% 1.77% 1.83% 2.50%
Ratio of net income to average net assets (1.19)% (1.43)% (1.18)% (1.32)% (1.46)%
Portfolio turnover rate 190% 52% 239% 212% 145%

<FN>
- --------------------------------------
* For the month ended October 31, 1997.
** From October 17, 1994, commencement of operations.
(a)Total returns for periods less than one year are not annualized.
(b)Ratios are annualized for periods of less than one year. Expenses reimbursed
or offset reflect reductions to total expenses, as discussed in the notes to
the financial statements. Such amounts would decrease the net investment
income ratio had such reductions not occurred.
</FN>
</TABLE>

- -17-

<PAGE>

FUNDS IN THE U.S. GLOBAL INVESTORS FAMILY OF FUNDS

Investing involves balancing potential rewards against potential risks. To
achieve higher rewards on your investment, you must be willing to take on higher
risk. If you are most concerned with safety of principal, a lower risk
investment will provide greater stability but with lower potential earnings.
Another strategy for dealing with volatile markets is to use the ABC Investment
Plan(R). The list below is a reward and risk guide to all of the mutual funds in
the U.S. Global Investors family of funds. This guide may help you decide if a
fund is suitable for your investment goals.

[Clip Art indicating Risk/Reward]

HIGH REWARD - HIGH RISK
China Region Opportunity Fund
Regent Eastern European Fund
Gold Shares Fund
World Gold Fund
Global Resources Fund
Global Blue Chip Fund
BONNEL GROWTH FUND

MODERATE REWARD - MODERATE RISK
Real Estate Fund
All American Equity Fund
MegaTrends Fund
Income Fund
Tax Free Fund
Near-Term Tax Free Fund

LOW REWARD - LOW RISK
U.S. Government Securities Savings Fund
U.S. Treasury Securities Cash Fund

If you have additional questions, one of our professional investor
representatives will personally assist you. Call 1-800-US-FUNDS.

OTHER FUND SERVICES

The Fund offers additional services to meet the unique needs of our investors,
including:

o Payroll deduction plans, including military allotments;
o Custodial accounts for minors;
o Systematic withdrawal plans;
o Retirement plans such as IRA, SEP/IRA, Roth IRA, Education IRA, Simple
IRA, 403(b)(7), 401(k), and employer-adopted defined contribution
plans.

- -18-

<PAGE>

BONNEL GROWTH FUND, A SERIES OF U.S. GLOBAL ACCOLADE FUNDS

More information on this Fund is available at no charge, upon request:

ANNUAL/SEMI-ANNUAL REPORT

This report describes the Fund's performance, lists holdings, and describes
recent market conditions, Fund strategies, and other factors that had a
significant impact on the Fund's performance during the last fiscal year.

STATEMENT OF ADDITIONAL INFORMATION (SAI)

More information about this Fund, its investment strategies and related risks is
provided in the SAI. There can be no guarantee that the Fund will achieve its
objective. The current SAI is on file with the SEC and is legally considered a
part of this prospectus.

TO REQUEST INFORMATION:

BY PHONE 1-800-873-8637

BY MAIL Bonnel Growth Fund
P.O. Box 781234
San Antonio, TX 78278-1234

BY INTERNET http://www.us-global.com.

The SEC also maintains a website at http://www.sec.gov that contains the
Statement of Additional Information, material incorporated by reference and
other information that the Fund files electronically with the SEC. You may also
visit the SEC's Public Reference Room in Washington, DC (1-800-SEC-0330) or send
a request plus a duplicating fee to the SEC, Public Reference Section,
Washington, DC 20549-6009.

BONNEL GROWTH FUND
SEC Investment Company Act File No. 811-7662

- -19-
================================================================================
================================================================================

U.S. Global Accolade Funds
MEGATRENDS FUND

Prospectus
March 1, 1999

- -1-

<PAGE>

TABLE OF CONTENTS

RISK/RETURN SUMMARY............................................................3

PERFORMANCE INFORMATION........................................................5

FEES AND EXPENSES..............................................................6

INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES AND RELATED
RISKS.....................................................................7

FUND MANAGEMENT...............................................................10

HOW TO BUY SHARES.............................................................12

HOW TO SELL (REDEEM) SHARES...................................................14

IMPORTANT INFORMATION ABOUT PURCHASES AND REDEMPTIONS.........................16

OTHER INFORMATION ABOUT YOUR ACCOUNT..........................................17

DISTRIBUTIONS AND TAXES.......................................................18

FINANCIAL HIGHLIGHTS..........................................................19

FUNDS IN THE U.S. GLOBAL INVESTORS FAMILY OF FUNDS............................20

OTHER FUND SERVICES...........................................................20

- -2-

<PAGE>

RISK/RETURN SUMMARY

INVESTMENT OBJECTIVES

The MegaTrends Fund seeks long-term capital appreciation consistent with the
preservation of capital. Earning current income from dividends, interest and
short-term capital gains is a secondary objective.

The Fund is designed for long-term investors and is not a complete investment
program. There is no guarantee that the Fund will meet its objectives.

MAIN INVESTMENT STRATEGIES

The Fund has a flexible investment strategy. The Fund may invest any portion of
its assets in the following three asset classes: stocks, bonds, or money market
instruments. Currently, the fund's portfolio holds primarily stocks in order to
pursue growth potential.

The Sub-Adviser balances the Fund's investments in stocks, bonds or money market
instruments based upon its analysis of major economic themes. The Sub-Adviser
performs statistical analyses of monetary and economic trends and evaluates the
financial markets to identify megatrends in the global economy. The
Sub-Adviser's analysis primarily focuses upon the potential for inflation or
deflation and how these trends affect the risk potential in the stock and bond
markets. The Sub-Adviser uses its megatrends analysis to balance the Fund's
assets between stocks, bonds and money market instruments. The Sub-Adviser may
significantly over-weight or under-weight the Fund's assets in one of these
asset classes.

Historically, the Sub-Adviser has invested the Fund's assets in a diversified
portfolio consisting primarily of common stocks issued by domestic companies.
The Sub-Adviser uses a "value" style of stock selection. Value investing places
an emphasis on strong balance sheets, substantial free cash flow, and a record
of rising dividends or a high dividend yield. The Sub-Adviser currently intends
to remain primarily invested in stocks unless the Sub-Adviser's megatrends
analysis causes it to determine that all or a portion of the Fund's assets
should be shifted to either bonds or money market instruments.

MAIN RISKS

From time to time, the Fund may invest all or a portion of its assets in bonds.
The value of bonds may fluctuate based upon changes in the level of interest
rates. The value of bonds generally goes up when interest rates decline and goes
down when interest rates rise. Bonds also are subject to credit risk.

- -3-

<PAGE>

PORTFOLIO MANAGEMENT. The skill of the Sub-Adviser will play a significant role
in the Fund's ability to achieve its investment objectives. The Fund's
investment results depend upon the ability of the Sub-Adviser to correctly
identify economic megatrends, especially with regard to accurately forecasting
inflationary and deflationary periods. In addition, the Fund's investment
results depend upon the Sub-Adviser's ability to shift the Fund's assets into
the asset classes at the times and in the amounts that will benefit the Fund's
performance. Historical evidence indicates that accurately balancing asset
classes based upon major economic themes has been an extremely difficult
investment strategy to implement on a consistent basis. While the Sub-Adviser
has substantial experience in applying balancing techniques, there is no
assurance that the Sub-Adviser will correctly anticipate relative asset class
performance in the future on a consistent basis.

- -4-

<PAGE>

PERFORMANCE INFORMATION

The bar chart below shows changes in the Fund's performance from year to year.

[GRAPHIC: Bar Chart plotted from date in table below]

CALENDAR YEAR
----------------------------------------
1995 1996 1997 1998
----- ----- ----- ----
RETURN 24.22% 15.40% 15.59% XX.XX%

Best quarter shown in the bar chart above: xx.xx% in ____ quarter 199___
Worst quarter shown in bar chart above: xx.xx% in ____ quarter 199___

The table below compares the Fund's average annual returns for the past one and
five year periods, as well as for the life of the Fund, to those of unmanaged
indexes.

<TABLE>
AVERAGE ANNUAL TOTAL
RETURNS PAST PAST SINCE INCEPTION,
(FOR THE PERIODS ENDING 1 YEAR 5 YEARS 10/21/91
DECEMBER 31, 1998)
----------------------- ------ ------ ---------------
<S> <C> <C> <C>
MEGATRENDS FUND xx.xx% xx.xx% xx.xx%
S&P 500 Index * xx.xx% xx.xx% xx.xx%
Lipper Flexible Portfolio xx.xx% xx.xx% xx.xx%
Funds Index **

<FN>
* The S&P 500 Stock Index is a widely recognized index of common
stock prices of U.S. Companies.
** The Lipper Flexible Portfolio Funds Index includes funds that
allocate investments across various asset classes, including
domestic common stocks, bonds, and money market instruments
with a focus on total return.
</FN>
</TABLE>

Past performance does not guarantee future results.

- -5-

<PAGE>

FEES AND EXPENSES

SHAREHOLDER TRANSACTION EXPENSES - DIRECT FEES

There are no sales charges when you buy Fund shares. There may be a small fee
when you redeem or exchange shares. If you sell shares and request your money by
wire transfer, there is a $10 fee. Your bank may also charge a fee for receiving
wires.

<TABLE>
<S> <C>
Maximum sales charge .............. None
Account closing fee ............... $10
Administrative exchange fee ....... $5
Trader's fee ...................... 0.25%*

<FN>
* Paid if shares are exchanged or redeemed
in less than one month.
</FN>
</TABLE>

ANNUAL FUND OPERATING EXPENSES - INDIRECT FEES

The figures below show operating expenses as a percentage of the Fund's net
assets during the fiscal year ended October 31, 1998.

<TABLE>
<S> <C>
Management Fees .............................. 1.00%
Distribution (12b-1) Fees .................... 0.25%
Other Expenses ............................... 0.81%
Total Annual Fund Operating Expenses ......... 2.06%
</TABLE>

EXAMPLE OF EFFECT OF THE FUND'S OPERATING EXPENSES

This example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. The example assumes that:

o You invest $10,000
o You redeem all of your shares at the end of the periods shown
o Your investment has a 5% annual return
o The Fund's operating expenses remain the same

<TABLE>
<S> <C>
1 year ............... $219
3 years .............. $656
5 years .............. $1,118
10 years ............. $2,400
</TABLE>

- -6-

<PAGE>

INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT STRATEGIES AND RELATED
RISKS

This section takes a closer look at the investment objectives of the Fund, its
principal investment strategies and certain risks of investing in the Fund.

INVESTMENT OBJECTIVES AND PRINCIPAL INVESTMENT STRATEGIES

The primary investment objective of the Fund is to seek long-term capital
appreciation consistent with the preservation of capital. Earning current income
from dividends, interest and short-term capital gains is a secondary objective.

The Fund may invest any portion of its assets in the following three asset
classes:

STOCKS: securities that represent shares of ownership in a company and
usually carry voting rights and earn dividends, including common stocks,
preferred stocks, and securities convertible into common stocks.

BONDS: securities representing money borrowed that must be repaid at a later
date. Bonds have specific maturities and usually a specific rate of interest
or an original purchase discount. Bonds include U.S. Government obligations
and corporate debt.

MONEY MARKET INSTRUMENTS: short-term debt obligations of governments and
corporations.

The Fund's assets are invested primarily based upon the Sub-Adviser's
statistical analysis of monetary and economic trends, and evaluation of the
financial markets, which assist the Sub-Adviser in identifying major economic
themes, otherwise known as megatrends. The Sub-Adviser's megatrend analysis is
based primarily upon evaluating inflationary and deflationary pressures in the
economy. In general, during inflationary periods the Sub-Adviser will invest
primarily in stocks and during deflationary periods, the Sub-Adviser will invest
primarily in bonds. Historically, the Sub-Adviser has invested the Fund's assets
in a diversified portfolio consisting primarily of common stocks issued by
domestic companies. The Sub-Adviser currently intends to remain primarily
invested in stocks unless the Sub-Adviser's megatrends analysis causes it to
determine that all or a portion of the Fund's assets should be shifted to either
bonds or money market instruments.

The Fund's investment results depend upon the ability of the Sub-Adviser to
correctly identify economic megatrends, especially with regard to accurately
forecasting inflationary and deflationary periods. In addition, the Fund's
performance will depend upon the Sub-Adviser's ability to correctly anticipate
the relative performance and risk of stocks, bonds and money market instruments.
Historical evidence indicates that correctly balancing portfolio allocations
among these asset classes has been an extremely difficult investment strategy to
implement successfully. While the Sub-Adviser has substantial experience in
applying balancing techniques, there can be no assurance that the Sub-Adviser
will correctly anticipate relative asset class performance in the future on a
consistent basis. Investment results would suffer, for example, if only a small
portion of the Fund's assets were invested in stocks during a significant stock
market advance or if a major portion were invested in stocks during a major
decline. Therefore, the skill of the Sub-Adviser will play a significant role in
the Fund's ability to

- -7-

<PAGE>

achieve its investment objectives. The Fund is not intended to be a complete
investment program, and there is no assurance that its investment objectives can
be achieved.

INVESTMENT PROCESS

The Sub-Adviser for the Fund is Money Growth Institute, Inc. The Sub-Adviser's
investment process is based primarily upon portfolio balancing techniques
developed by Dr. Stephen Leeb, President and controlling shareholder of the
Sub-Adviser, and his staff. The Sub-Adviser has developed models over the years
to assist it in assessing economic megatrends and the resulting relative risk
potential in the stock and bond markets. These models emphasize general economic
and monetary factors and, to a lesser extent, trends in the stock and bond
markets themselves.

When the Sub-Adviser's megatrends analysis supports the Fund's investment in
stocks, the Sub-Adviser selects stocks by utilizing a "value" style of
investing. Value investing places an emphasis on strong balance sheets,
substantial free cash flow, and a record of rising dividends and/or a high
dividend yield. In addition, the Fund generally will invest in large companies
which are dominant in their industry, have quality management, and display
strong, stable financial health. The common stocks of such companies generally
are traded on major stock exchanges and have a high degree of liquidity. The
Sub-Adviser does not currently intend to invest more than 5% of the Fund's
assets in stocks with market capitalizations of less than $300 million at the
time of purchase. While the Fund is diversified, the Sub-Adviser may invest a
significant portion of the Fund's assets in the stock of a single company. As a
result, a single security's increase or decrease in value may have a greater
impact on the Fund's share price and total return.

The Sub-Adviser may invest all or a portion of the Fund's assets in bonds or
money market instruments when it believes that such securities provide the
potential for better investment performance and a higher level of safety than
stocks. The Sub-Adviser has developed models that assist it in assessing risk in
the bond markets and interest rate trends. The maturities of the bonds in the
Fund's portfolio will be based in large measure upon both the Sub-Adviser's
perception of general risk levels in the bond market versus the stock market and
on the Sub-Adviser's perception of the future trend and term structure of
interest rates.

GENERAL PORTFOLIO POLICIES

PRINCIPAL TYPES OF INVESTMENTS AND RELATED RISKS. Because the Fund may invest
substantially all of its assets in common stocks of domestic companies, the main
risk is that the value of the stocks it holds may decrease in response to the
activities of an individual company or in response to general market, business
and economic conditions. If this occurs, the Fund's share price may also
decrease.

OTHER TYPES OF INVESTMENTS AND CONSIDERATIONS. While not principal strategies,
the Fund may invest in bonds and money market instruments, may lend portfolio
securities, may invest in foreign securities and convertible securities, may
hold temporary investments such as repurchase agreements and may invest in
illiquid securities. In addition, the Fund may invest in zero-coupon bonds, real
estate investment trusts (REITs) and when-issued or delayed delivery securities.
The risks of these types of instruments and strategies are described below and
in the Statement of Additional Information.

- -8-

<PAGE>

The Fund may invest all or a portion of its assets in bonds, which include
obligations issued or guaranteed as to principal and interest by the United
States Government, its agencies or instrumentalities, and corporate debt
securities. There are no limitations on the maturities of the bonds in which the
Fund may invest. The value of bonds may fluctuate based upon changes in the
level of interest rates. The value of bonds generally goes up when interest
rates decline and goes down when interest rates rise. The Fund may invest in
bonds with a credit quality rating of "B" or higher according to a rating
agency; however, the Fund does not intend to invest more than 5% of its assets
in bonds rated "BBB" or lower. The value of lower rated bonds generally is more
dependent upon credit risk, or the ability of the issuer to meet interest and
principal payments, than higher rated bonds.

The Fund may invest in money market instruments when the Sub-Adviser believes
that substantial long-term price risks exist for common stocks. In addition, the
Fund may temporarily hold, for defensive purposes, all or a portion of its
assets in money market instruments. When the Fund is in a defensive investment
position, it may not achieve its investment objectives.

The Fund may invest without limit in foreign companies through the purchase of
sponsored American Depository Receipts ("ADRs"), which represent shares of
foreign issuers, and other securities of foreign issuers that are publicly
traded in the United States. Investments in foreign securities involve greater
risks than investments in domestic securities, including fluctuations in
currency exchange rates; political, social or economic instability; and less
stringent accounting, disclosure and financial reporting requirements in a
particular country.

The Fund may invest up to 10% of its net assets in illiquid securities.
Disposition of illiquid securities often takes more time than more liquid
securities, may result in higher selling expenses and may not be able to be made
at desirable prices or at the prices at which such securities have been valued
by the Fund.

The Fund may invest in zero coupon bonds. Zero coupon securities pay no cash
income and are subject to greater market value fluctuations from changing
interest rates than other types of bonds.

The Fund may invest in REITs, which are subject to many of the same risks
related to the direct ownership of real estate, including changes in the value
of the real estate due to economic factors, taxation, and changes in zoning
laws.

The Sub-Adviser may sell the Fund's portfolio securities without regard to
holding periods if such transactions are in the best interests of the Fund.
Increased portfolio turnover may result in higher costs for brokerage
commissions, dealer mark-ups and other transaction costs and may also result in
taxable capital gains. The Fund's historical portfolio turnover rates are noted
under Financial Highlights.

YEAR 2000 READINESS

- -9-

<PAGE>

"Year 2000 Problem." The Adviser, the Sub-Adviser and the Fund's transfer agent
believe that they have taken steps reasonably designed to address any potential
Year 2000 Problem for the computer programs used by the Adviser, the Sub-Adviser
and the transfer agent. In addition, management is in the process of confirming
that the third-party service providers used by the Fund, the Adviser, the Sub-
Adviser and the transfer agent are also taking steps reasonably designed to
address the Year 2000 Problem with respect to their computer systems. At this
time, there can be no assurance that these steps will be sufficient to avoid
any adverse impact to the Fund. Furthermore, there can be no assurances that the
companies in which this Fund invests will not be adversely affected by the Year
2000 Problem.

FUND MANAGEMENT

SUB-ADVISER

The Adviser has retained Money Growth Institute, Inc. to serve as the Sub-
Adviser for the Fund. The Sub-Adviser manages the composition of the portfolio
and is responsible for day-to-day investment management of the Fund. In
consideration for such services, the Adviser pays the Sub-Adviser a fee, on an
annual basis, 0.50% of Fund assets.

PORTFOLIO MANAGER

Dr. Stephen Leeb is the Fund's portfolio manager. Dr. Leeb has been engaged in
the business of providing investment advisory and portfolio management services
since the late 1970s. Dr. Leeb is the editor of Balanced, a highly regarded and
award winning investment advisory newsletter, The Big Picture, a well-known
market timing newsletter, and the author of the acclaimed book Getting in on the
Ground Floor. He is also the author of Market Timing for the Nineties. Dr. Leeb
holds a Bachelor's Degree in Economics from The Wharton School of Business at
the University of Pennsylvania. He also received an M.A. in Psychology and Math
and a Ph.D. in Psychology from the University of Illinois. Dr. Leeb has been
quoted in numerous financial publications, and he has appeared on Wall Street
Week, Nightly Business Report, CNN and CNBC.

INVESTMENT ADVISER

U.S. Global Investors, Inc., 7900 Callaghan Road, San Antonio, Texas 78229,
furnishes investment advice and manages the trust's business affairs. The
Adviser was organized in 1968 and also serves as investment adviser to U.S.
Global Investors Funds, a family of mutual funds with approximately $1.3 billion
in assets. For the fiscal year ended October 31, 1998, the Fund paid the Adviser
a fee of 1.00% of net assets in the Fund.

- -10-

<PAGE>

DISTRIBUTION PLAN

The Fund has adopted a 12b-1 plan that allows the Fund to pay the Adviser and
its affiliates for shareholder services and promotional expenses. Because this
fee is continually paid out of the Fund's assets, over time it will increase the
cost of your investment and may potentially cost you more than other types of
sales charges. For the fiscal year ended October 31, 1998, the Fund paid a fee
of .25% of net assets in the Fund for this distribution plan.

- -11-

<PAGE>

HOW TO BUY SHARES

MINIMUMS
INITIAL INVESTMENT SUBSEQUENT INVESTMENT
o regular account $5000 $50
o ABC Investment Plan(R) $1000 $100
o custodial accounts for minors $1000 $50
o retirement account None None

SEND NEW ACCOUNT APPLICATIONS TO:
---------------------------------
MEGATRENDS FUND
P.O. Box 781234
San Antonio, TX 78278-1234

BY MAIL BY TELEPHONE BY AUTOMATIC INVESTMENT
------- ------------ -----------------------
[GRAPHIC: Picture of [GRAPHIC: Picture [GRAPHIC: Picture of
an Envelope] of a telephone] blocks] ABC
Investment Plan(R)

o Read this prospectus. o If you already have a o To purchase more
o Fill out the application U.S. Global Accolade shares automatically
if you are opening a Funds account, you each month, fill
new account. may purchase out the ABC Invest-
o Make out a check to additional shares by ment Plan(R)form.
the MegaTrends telephone order. o U.S. Global Accolade
Fund for the amount o You must pay for them Funds automatically
you want to invest. within seven business withdraws monies
o Send the application days. from your bank
and a check to the o Call 1-800-US-FUNDS account monthly.
MegaTrends Fund in for current wire o See details on the
the envelope provided. instructions and a application.
o To add to an existing confirmation number.
account, be sure to o We automatically grant
include your account all shareholders
number on your check telephone exchange
and mail it with the privileges unless they
investment slip found decline them explicitly
on your confirmation in writing.
statement. o Telephone purchases
are not available for
money market funds or
U.S. Global retirement
accounts.

- -12-

<PAGE>

IMPORTANT Your check must be made payable to the MegaTrends Fund
NOTES ABOUT
PAYING FOR You may not purchase shares by credit card or third-party checks.
YOUR SHARES
Telephone purchase orders may not exceed ten times the value
of all like-registered accounts on the date the order is
placed.

You may not exchange shares purchased by telephone until the
Fund has received and accepted payment.

Checks drawn on foreign banks will not be invested until the
collection process is complete.

The Fund will cancel unpaid telephone orders and any decline
in price of the shares will be collected from your account.

If a check or ACH investment is returned unpaid due to
nonsufficient funds, stop payment or other reasons, the Fund
will charge you $20, and you will be responsible for any loss
incurred by the Fund. To recover any such loss or charge, the
Fund reserves the right to redeem shares of any affiliated
funds you own, and you could be prohibited from placing
further orders unless full payment by wire or cashier's check
accompanies the investment request.

Any expenses charged to the Fund for collection procedures
will be deducted from the amount invested.

EFFECTIVE An order to establish a new account and purchase shares of the
TIME FOR Fund will become effective, if accepted, at the time the Fund
PURCHASE OR next determines its net asset value (NAV) per share after the
REDEMPTION Fund's transfer agent or sub-agent has received:
ORDERS
o a completed and signed application, and
o a check or wire transfer.

If you already have a MegaTrends Fund account, your order to
purchase shares, if accepted, will become effective at the
time the Fund next determines NAV after the transfer agent or
sub-agent receives your written request or telephone order.

In all cases, the shares purchased will be priced at the NAV
per share determined at the time of effectiveness.

All purchases of shares are subject to acceptance by the Fund
and are not binding until accepted.

- -13-

<PAGE>

HOW TO SELL (REDEEM) SHARES

BY MAIL BY TELEPHONE
--------------------------- ------------------------------
[GRAPHIC: Picture of [GRAPHIC: Picture of
an Envelope] a telephone]

- -14-

<PAGE>

IMPORTANT o Generally, we will send payment for your redeemed shares to you
NOTES within two business days after your redemption request has been
ABOUT received and accepted by the Fund.
REDEEMING
YOUR o You may receive payment for redeemed shares via wire. To elect
SHARES these services, send the Fund a written request giving your bank
information with signature guarantee for all registered owners.
(See "Signature Guarantee/Other Documentation".)

o You will be charged $10 for a wire transfer. International wire
charges will be higher.

o We will usually send a wire transfer the next business day
after receipt of your order.

o Proceeds from the redemption of shares purchased by check
may be delayed until full payment for the shares has been
received and cleared, which may take up to 7 days from the
purchase date.

o To protect shareholders from the expense burden of excessive
trading, the Fund charges 0.25% of the value of shares
redeemed or exchanged when the shares are held less than one
month.

- -15-

<PAGE>

IMPORTANT INFORMATION ABOUT PURCHASES AND REDEMPTIONS

EXCHANGING SHARES

The Fund reserves the following rights:

When exchanging shares into other Funds in the U.S. Global Investors family of
funds:

o Each account must be registered identically; each must have the
same signatures and addresses.
o You will be charged $5 by the transfer agent for each exchange out of
any fund account.
o Retirement accounts administered by the Adviser or its agents may
exchange up to three times per quarter at no charge. (Short term
trading fee may apply.)
o You may exchange by telephone or by mail.
o You are responsible for obtaining and reading the prospectus for the
fund into which you are exchanging.
o Exchanges result in the sale of one fund's shares and the purchase of
another fund's shares, which is usually a taxable event to you.
o Exchanges into any new fund are subject to that fund's initial and
subsequent investment minimums.
o Exchanges out of the fund of shares held less than one month are
subject to the short-term trading fee.

REDEMPTIONS BY THE FUNDS OF CERTAIN ACCOUNTS

NET ASSET VALUE (NAV) CALCULATION

The price at which you buy, sell or exchange Fund shares is the NAV. The NAV of
the Fund is calculated at the close of regular trading of the New York Stock
Exchange (NYSE), which is usually 4:00 Eastern time, each day that the NYSE is
open. NAV is determined by adding the value of the Fund's investments, cash and
other assets, deducting liabilities, and dividing that value by the total number
of Fund shares outstanding.

- -16-

<PAGE>

SIGNATURE GUARANTEE/OTHER DOCUMENTATION

The Funds require signature guarantees to protect you and the Funds from
attempted fraudulent requests for redeemed shares. Your redemption request must
therefore be in writing and accompanied by a signature guarantee if:

o Your redemption request exceeds $15,000.
o You request that payment be made to a name other than the one on your
account registration.
o You request that payment be mailed to an address other than the one of
record with the Funds.
o You change or add information relating to your designated bank.
o You have changed your address of record within the last 30 days.

You may obtain a signature guarantee from most banks, credit unions,
broker/dealers, savings and loans, and other eligible institutions. You cannot
obtain a signature guarantee from a notary public.

The signature guarantee must appear together with the signature(s) of all
registered owner(s) of the redeemed shares on the written redemption request.

Additional documents are required for redemptions by corporations, executors,
administrators, trustees, and guardians. For instructions call 1-800-873-8637.

OTHER INFORMATION ABOUT YOUR ACCOUNT

The Funds take precautions to ensure that telephone transactions are genuine,
including recording the transactions, testing shareholder identity and sending
written confirmations to

- -17-

<PAGE>

shareholders of record. The Funds and their service providers are not liable for
acting upon instructions that they believe to be genuine if these procedures are
followed.

CONFIRMATIONS

After any transaction, you will receive written confirmation including the per
share price and the dollar amount and number of shares bought or redeemed.

PURCHASES THROUGH BROKER/DEALERS

DISTRIBUTIONS AND TAXES

Unless you elect to have your distributions in cash, they will automatically be
reinvested in Fund shares. The Fund generally pays income dividends and
distributes capital gains, if any, annually.

TAXES TO YOU

You will generally owe taxes on amounts distributed to you by the Fund, whether
you reinvest the distributions in additional shares or receive them in cash.

Each year the Fund will send you a statement that will detail the tax status of
distributions made to you for that year.

- -18-

<PAGE>

FINANCIAL HIGHLIGHTS

PricewaterhouseCoopers LLP has audited this information. PricewaterhouseCoopers'
report and the Fund's financial statements are included in the annual report,
which is available by request.

<TABLE>
YEAR ENDED
OCTOBER 31, YEAR ENDED JUNE 30,
------------------ --------------------------------------
1998 1997* 1997** 1996 1995 1994
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD $13.90 $13.45 $11.27 $11.17 $10.29 $10.84
Income from investment operations
Net investment income (loss) (0.02) 0.01 0.01 0.17 0.28 0.19
Net realized and unrealized gains (losses) on securities (0.51) 0.44 2.39 1.72 0.95 (0.35)
-------- -------- -------- -------- -------- --------
Total from investment operations (0.53) 0.45 2.40 1.89 1.23 (0.16)
Less distributions
From net investment income -- -- (0.01) (0.17) (0.28) (0.19)
In excess of net investment income (0.01) -- -- -- -- --
From capital gains (2.01) -- (0.21) (1.61) -- (0.20)
In excess of capital gains -- -- -- (0.01) 0.07 --
-------- -------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS (2.02) -- (0.22) (1.79) (0.35) (0.39)
-------- -------- -------- -------- -------- --------
NET ASSET VALUE AT END OF PERIOD $11.35 $13.90 $13.45 $11.27 $11.17 $10.29
-------- -------- -------- -------- -------- --------
Total return (a) (4.43)% 3.34% 20.72% 17.10% 12.20% (1.50)%
Ratios/Supplemental data (b)
Net assets, end of period (in thousands) $20,740 $25,492 $25,610 $27,945 $32,976 $45,523
Ratio of expenses to average net assets 2.06% 1.76% 1.97% 2.10% 1.98% 1.81%
Ratio of net income to average net assets (0.14)% 0.23% 0.09% 1.30% 2.36% 1.65%
Portfolio turnover rate 51% 13% 62% 115% 163% 143%

- ------------------------------------
<FN>
* For the four months ended October 31, 1997.
** Effective November 16, 1996, the Fund changed to a new investment manager.
(a) Total returns for periods less than one year are not annualized.
(b) Ratios are annualized for periods of less than one year. Expenses
reimbursed or offset reflect reductions to total expenses, as discussed
in the notes to the financial statements. Such amounts would decrease the
net investment income ratio had such reductions not occurred.
</FN>
</TABLE>

- -19-

<PAGE>

FUNDS IN THE U.S. GLOBAL INVESTORS FAMILY OF FUNDS

[Clip Art indicating Risk/Reward]

High Reward - High Risk
China Region Opportunity Fund
Regent Eastern European Fund
Gold Shares Fund
World Gold Fund
Global Resources Fund
Global Blue Chip Fund
Bonnel Growth Fund

Moderate Reward - Moderate Risk
Real Estate Fund
All American Equity Fund
MEGATRENDS FUND
Income Fund
Tax Free Fund
Near-Term Tax Free Fund

Low Reward - Low Risk
U.S. Government Securities Savings Fund
U.S. Treasury Securities Cash Fund

If you have additional questions, one of our professional investor
representatives will personally assist you. Call 1-800-US-FUNDS.

OTHER FUND SERVICES

The Fund offers additional services to meet the unique needs of our investors,
including:

-20-

<PAGE>

MEGATRENDS FUND, A SERIES OF U.S. GLOBAL ACCOLADE FUNDS

More information on this Fund is available at no charge, upon request:

ANNUAL/SEMI-ANNUAL REPORT

STATEMENT OF ADDITIONAL INFORMATION (SAI)

More information about this Fund, its investment strategies and related risks is
provided in the SAI. There can be no guarantee that the Fund will achieve its
objectives. The current SAI is on file with the SEC and is legally considered a
part of this prospectus.

TO REQUEST INFORMATION:

BY PHONE 1-800-873-8637

BY MAIL MEGATRENDS FUND
P.O. Box 781234
San Antonio, TX 78278-1234

BY INTERNET http://www.us-global.com.

MEGATRENDS FUND
SEC Investment Company Act File No. 811-7662

- -21-

================================================================================
================================================================================

U.S. Global Accolade Funds
GLOBAL BLUE CHIP FUND

Prospectus
March 1, 1999

- -1-

<PAGE>

TABLE OF CONTENTS

RISK/RETURN SUMMARY............................................................3

MAIN RISKS.....................................................................3

PERFORMANCE INFORMATION........................................................4

FEES AND EXPENSES..............................................................5

PRINCIPAL STRATEGIES AND RISKS.................................................6

RELATED RISKS..................................................................6

FUND MANAGEMENT................................................................9

BUYING SHARES.................................................................11

SELLING (REDEEMING) SHARES....................................................13

DISTRIBUTIONS AND TAXES.......................................................17

FINANCIAL HIGHLIGHTS..........................................................19

FUNDS IN THE U.S. GLOBAL INVESTORS FAMILY OF FUNDS............................20

- -2-

<PAGE>

RISK/RETURN SUMMARY

INVESTMENT OBJECTIVE

The Global Blue Chip Fund seeks long-term growth of capital.

MAIN INVESTMENT STRATEGIES

The Fund invests in a diversified portfolio consisting primarily of marketable
common stocks and securities convertible into common stocks issued by companies
located throughout the world. The Fund generally invests in the common stocks of
large, well-known foreign and domestic companies, commonly referred to as "Blue
Chip" companies. While specific investment criteria vary from market to market,
Blue Chip companies are generally identified by the Adviser as having
substantial capitalization, established financial history, strong industry
position and superior management.

MAIN RISKS

PORTFOLIO MANAGEMENT. The skill of the Adviser will play a significant role in
the Fund's ability to achieve its investment objective.

FOREIGN SECURITIES. The Fund may invest a significant portion of its assets in
companies located in foreign markets. Foreign securities tend to be more
volatile than domestic securities due to a number of factors, including
fluctuations in currency exchange rates; political, social or economic
instability; and less stringent accounting, disclosure and financial reporting
requirements in a particular country. These risks are generally intensified in
emerging markets. In addition, while the foreign Blue Chip companies in which
the Fund primarily invests may be among the largest in their local markets, they
may be small by the standards of U.S. stock market capitalization. The stocks of
such companies often fluctuate in price to a greater degree than stocks of
larger companies. The Fund's share price will reflect the movements of the
different stock markets in which it is invested and the currencies in which its
investments are denominated.

- -3-

<PAGE>

PERFORMANCE INFORMATION

The bar chart below shows the Fund's performance during the period indicated.

[GRAPHIC: Bar Chart -- Only one complete calendar year, 1998. Bar chart and data
points to be submitted with 485(b) filing.]

Best quarter shown in the bar chart above: xx.xx% in ____ quarter 199___
Worst quarter shown in bar chart above: xx.xx% in ____ quarter 199___

The table below compares the Fund's average annual returns for the last year, as
well as for the life of the Fund, to those of unmanaged indexes.

<TABLE>
AVERAGE ANNUAL TOTAL
RETURNS PAST SINCE INCEPTION,
(FOR THE PERIODS ENDING 1 YEAR 2/20/97
DECEMBER 31, 1998)
------------------------ ------ ---------------
<S> <C> <C>
Global Blue Chip Fund xx.xx% xx.xx%
S&P 500 Index * xx.xx% xx.xx%
Dow Jones World Index ** xx.xx% xx.xx%

<FN>
* The S&P 500 Stock Index is a widely recognized
index of common stock prices of U.S. companies.
** The Dow Jones World Stock Index is a
capitalization-weighted index composed of companies
traded publicly in select countries throughout the
world.
</FN>
</TABLE>

Past performance does not guarantee future results.

- -4-

<PAGE>

FEES AND EXPENSES

SHAREHOLDER TRANSACTION EXPENSES - DIRECT FEES

There are no sales charges when you buy Fund shares. There may be a small fee
when you redeem or exchange shares. If you sell shares and request your money by
wire transfer, there is a $10 fee. Your bank may also charge a fee for receiving
wires.

<TABLE>
<S> <C>
Maximum sales charge .................... None
Account closing fee ..................... $10
Administrative exchange fee ............. $5
Trader's fee ............................ 1.00%*

<FN>
* Paid if shares are exchanged or redeemed in
less than one month.
</FN>
</TABLE>

ANNUAL FUND OPERATING EXPENSES - INDIRECT FEES

The figures below show operating expenses as a percentage of the Fund's net
assets during the fiscal year ended October 31, 1998.

<TABLE>
<S> <C>
Management Fees ........................ 1.25%
Distribution (12b-1) Fees .............. 0.25%
Other Expenses ......................... 7.22%
Total Annual Fund Operating Expenses ... 8.72%*

<FN>
*The Adviser has reduced fees and/or absorbed
expenses of 1.27%, which limited actual Fund
operating expenses to 7.45%. The Adviser is not
contractually obligated to limit Fund operating
expenses in the future.
</FN>
</TABLE>

EXAMPLE OF EFFECT OF THE FUND'S OPERATING EXPENSES

This example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. The example assumes that:

o You invest $10,000
o You redeem all of your shares at the end of the periods shown
o Your investment has a 5% annual return
o The Fund's operating expenses remain the same

- -5-

<PAGE>

<TABLE>
<S> <C>
1 year ................... $866
3 years .................. $2,485
5 years .................. $3,985
10 years ................. $7,273
</TABLE>

INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES AND RELATED RISKS

This section takes a closer look at the investment objective of the Fund, its
principal investment strategies and certain risks of investing in the Fund.

INVESTMENT OBJECTIVE AND PRINCIPAL INVESTMENT STRATEGIES

The Fund seeks long-term growth of capital. The Fund pursues its objective by
investing throughout the world in a diversified portfolio consisting primarily
of marketable common stocks and securities convertible into common stocks. The
Fund generally invests in the common stocks of large, well-known foreign and
domestic companies, commonly known as "Blue Chip" companies. While specific
investment criteria vary from market to market, Blue Chip companies are
generally identified by the Adviser as having substantial capitalization,
established financial history, strong industry position and superior management.
While these companies may be among the largest in their local markets, they may
be small by the standards of U.S. stock market capitalization.

The Fund is not intended to be a complete investment program, and there is no
assurance that its investment objective can be achieved. The Fund's investment
objective is not a fundamental policy and may be changed by the board of
trustees without shareholder approval upon 30 days written notice.

INVESTMENT PROCESS

The Fund's investment adviser is U.S. Global Investors, Inc. (the "Adviser"). In
selecting investments, the Adviser applies both a "top-down" approach to
macro-economic themes and a "bottom-up" approach to stock selection. In other
words, the Adviser seeks out growth stocks that fit within macro-economic
themes. The Adviser defines macro-economic themes that it believes will create
opportunities for growth companies. The Adviser then allocates the Fund's assets
among various geographic regions of the world. The Adviser focuses on countries
with the strongest economies as measured by Gross National Product. Although
there is no limitation on the regions of the world in which the Fund may invest,
the Adviser currently focuses the Fund's investments in Europe, Asia and the
United States. Following geographic allocation, the Adviser allocates the Fund's
investments to industry sectors and then identifies individual companies with
earnings growth potential within those sectors. The Adviser selects securities
when it believes the price of such securities is reasonable in relation to their
future growth prospects. The skill of the Adviser will play a significant role
in the Fund's ability to achieve its investment objective.

- -6-

<PAGE>

GENERAL PORTFOLIO POLICIES

PRINCIPAL TYPES OF INVESTMENTS AND RELATED RISKS. Under normal market
conditions, the Fund will invest at least 80% of its total assets in marketable
common stocks and securities convertible into common stocks of Blue Chip foreign
and domestic companies. Because the Fund invests substantially all of its assets
in common stocks of foreign and domestic companies, the main risk is that the
value of the stocks it holds may decrease in response to the activities of an
individual company or in response to general foreign or domestic market,
business and economic conditions. If this occurs, the Fund's share price may
also decrease. The Fund's performance may also be affected by risks specific to
certain types of investment which are discussed below. As a result, a single
security's increase or decrease in value may have a greater impact on the Fund's
share price and total return.

The Fund may invest without limit in foreign securities. The Fund may invest in
sponsored or unsponsored American Depository Receipts (ADRs), which represent
shares of foreign issuers. Investments in foreign securities involve greater
risks than investments in domestic securities. The Fund may invest up to 15% of
its assets in emerging markets, but not more than 5% of its assets may be
invested in any single emerging market country. Any company with a market
capitalization of $500 million or more is excluded from the 15% limitation
regardless of whether or not it is incorporated or primarily operates in
emerging markets. The risks of investing in foreign securities are generally
intensified in emerging markets. These risks include:

o CURRENCY RISK. The value of a foreign security will be affected by the
value of the local currency relative to the U.S. dollar. When the Fund
sells a foreign denominated security, its value may be worth less in U.S.
dollars even if the security increases in value in its home country. U.S.
dollar-denominated securities of foreign companies may also be affected by
currency risk;

o POLITICAL, SOCIAL AND ECONOMIC RISK. Foreign investments may be subject
to heightened political, social and economic risks, particularly in
emerging markets which may have relatively unstable governments, immature
economic structures, national policies restricting investments by
foreigners, different legal systems and economics based on only a few
industries. In some countries, a risk may exist that the government may
take over the assets or operations of a company or that the government may
impose taxes or limits on the removal of the Fund's assets from that
country;

o REGULATORY RISK. There may be less government supervision of foreign
markets. As a result, foreign companies may not be subject to the uniform
accounting, auditing and financial reporting standards and practices
applicable to domestic companies and there may be less publicly available
information about foreign companies;

o MARKET RISK. Foreign securities markets, particularly those of emerging
markets, may be less liquid and more volatile than domestic markets.
Certain markets may require payment for securities before delivery and
delays may be encountered in settling securities transactions. In some
foreign markets, there may not be protection against failure by other
parties to complete transactions; and

- -7-

<PAGE>

o TRANSACTION COSTS. Costs of buying, selling and holding foreign
securities, including brokerage, tax and custody costs, may be higher than
those involved in domestic transactions.

Foreign Blue Chip companies may be small as compared to large companies in the
United States. The stocks of smaller companies often fluctuate in price to a
greater degree than stocks of larger companies. Foreign Blue Chip companies may
have more limited financial resources, fewer product lines and less liquid
trading markets for their stock as compared to domestic Blue Chip companies.
However, the Adviser believes that Blue Chip companies generally exhibit less
investment risk and less price volatility, on average, than smaller, less-
seasoned companies. In addition, the large market for publicly held shares of
Blue Chip companies and the generally higher trading volume in those shares
generally result in a relatively high degree of liquidity for such investments.

OTHER TYPES OF INVESTMENTS AND CONSIDERATIONS. While not principal strategies,
the Fund may invest to a limited extent in preferred stock and convertible
securities, may engage in strategic transactions (including futures, options and
foreign forward currency transactions), may invest in money market instruments,
may lend portfolio securities, may hold temporary investments such as repurchase
agreements and may invest in illiquid securities. The risks of these types of
instruments and strategies are described below and in the Statement of
Additional Information.

The Adviser may engage in strategic transactions, which include purchasing and
selling exchange-listed and over-the-counter put and call options on securities,
equity and fixed-income indices and other financial instruments, financial
futures contracts and options thereon, and entering into various currency
transactions such as currency forward contracts, currency futures contracts, or
options on currencies or currency futures (collectively, all the above are
called "Strategic Transactions"). The Fund may engage in Strategic Transactions
for hedging, risk management, or portfolio management purposes and not for
speculation. Strategic Transactions may be used to attempt to protect against
possible changes in the market value of securities held in, or to be purchased
for, the Fund's portfolio.

For example, possible losses from changes in currency exchange rates are
primarily a risk of unhedged investing in foreign securities. While a security
may perform well in a foreign market, if the local currency declines against the
U.S. dollar, gains from the investment can disappear or become losses. The
Adviser may utilize forward foreign currency transactions in an attempt to hedge
the Fund's investments in foreign securities back to the U.S. dollar when, in
the Adviser's judgment, currency movements affecting particular investments are
likely to harm the performance of the Fund. Typically, currency fluctuations are
more extreme than stock market fluctuations. Accordingly, the strength or
weakness of the U.S. dollar against foreign currencies may account for part of
the Fund's performance even when the Adviser attempts to minimize currency risk
through hedging activities.

- -8-

<PAGE>

For temporary defensive purposes, the Fund may invest up to 100% of its assets
in liquid high grade money market instruments. When the Fund is in a defensive
investment position, it may not achieve its investment objective.

The Adviser may sell the Fund's portfolio securities without regard to holding
periods if such transactions are in the best interests of the Fund. Increased
portfolio turnover may result in higher costs for brokerage commissions, dealer
mark-ups and other transaction costs and may also result in taxable capital
gains. The Fund's historical portfolio turnover rates are noted under Financial
Highlights.

YEAR 2000 READINESS

Like other organizations around the world, the Fund could be adversely affected
if the computer systems used by the Fund or its service providers do not
properly process and calculate date-related information beginning January 1,
2000, commonly referred to as the "Year 2000 Problem." The Adviser and the
Fund's transfer agent believe that they have taken steps reasonably designed to
address any potential Year 2000 Problem for the computer programs used by the
Adviser and the transfer agent. In addition, management is in the process of
confirming that the third-party service providers used by the Fund, the Adviser
and the transfer agent are also taking steps reasonably designed to address the
Year 2000 Problem with respect to their computer systems. At this time, there
can be no assurance that these steps will be sufficient to avoid any adverse
impact to the Fund. Furthermore, there can be no assurances that the companies
in which this Fund invests will not be adversely affected by the Year 2000
Problem.

FUND MANAGEMENT

INVESTMENT ADVISER

U.S. Global Investors, Inc., 7900 Callaghan Road, San Antonio, Texas 78229,
furnishes investment advice and manages the Fund's business affairs. The Adviser
was organized in 1968 and also serves as investment adviser to U.S. Global
Investors Funds, a family of mutual funds with approximately $1.3 billion in
assets. For the fiscal year ended October 31, 1998, the Adviser was paid a fee
of 1.25% of net assets in the Fund.

Adviser investment personnel may invest in securities for their own accounts
according to a code of ethics that establishes procedures for personal investing
and restricts certain transactions.

PORTFOLIO MANAGEMENT TEAM

The Adviser uses a team approach to manage the assets of the Fund. Team member
Bin Shi, a Chartered Financial Analyst, has served as a portfolio manager of
U.S. Global Investors China Region Opportunity Fund since January 1996 and U.S.
Global Investors All American Fund since 1995. From 1994 to 1996, he served as a
research analyst on the China Region Opportunity Fund. From 1991 to 1994 Mr. Shi
earned a master's degree in finance and

- -9-

<PAGE>

accounting at Tulane University. He is also a graduate of Fudan University in
Shanghai, China.

Team member Ralph P. Aldis, a Chartered Financial Analyst, has been a portfolio
manager of various funds managed by Adviser since 1991 and the director of
research for the Adviser since April 1989. Mr. Aldis holds a master's degree in
energy and mineral economics from the University of Texas at Austin.

Team member Rahim Kassim-Lakha has been a research analyst and senior trader
with the Adviser since 1996. From 1995 to 1996 he was a research analyst with
Fidelity Investments. From 1991 to 1995, Mr. Kassim-Lakha earned a degree in
Economics from Brown University.

DISTRIBUTION PLAN

- -10-

<PAGE>

HOW TO BUY SHARES

MINIMUMS
INITIAL INVESTMENT SUBSEQUENT INVESTMENT
o regular account $5000 $50
o ABC Investment Plan(R) $1000 $100
o custodial accounts for minors $1000 $50
o retirement account None None

Send new account applications to:
---------------------------------
Global Blue Chip Fund
P.O. Box 781234
San Antonio, TX 78278-1234

BY MAIL BY TELEPHONE BY AUTOMATIC INVESTMENT
- ------- ------------ ------------------------
[GRAPHIC: Picture of [GRAPHIC: Picture [GRAPHIC: Picture of
an Envelope] of a telephone] blocks] ABC
Investment Plan(R)

o Read this prospectus. o If you already have a o To purchase more
o Fill out the application U.S. Global Accolade shares automatically
if you are opening a Funds account, you each month, fill out
new account. may purchase the ABC Investment
o Make out a check to additional shares by Plan(R) form.
the Global Blue Chip telephone order. o U.S. Global Accolade
Fund for the amount o You must pay for them Funds automatically
you want to invest. within seven business withdraws monies from
o Send the application days. your bank account
and a check to the o Call 1-800-US-FUNDS monthly.
Global Blue Chip for current wire o See details on the
Fund in the envelope instructions and a application.
provided. confirmation number.
o To add to an existing o We automatically grant
account, be sure to all shareholders
include your account telephone exchange
number on your check privileges unless they
and mail it with the decline them explicitly
investment slip found in writing.
on your confirmation o Telephone purchases
statement. are not available for
money market funds or
U.S. Global retirement
accounts.

- -11-

<PAGE>

- --------------------------------------------------------------------------------
IMPORTANT Your check must be made payable to the GLOBAL BLUE CHIP FUND
NOTES ABOUT
PAYING FOR You may not purchase shares by credit card or third-party checks.
YOUR SHARES
Telephone purchase orders may not exceed ten times the value of
all like-registered accounts on the date the order is placed.

You may not exchange shares purchased by telephone until the Fund
has received and accepted payment.

Checks drawn on foreign banks will not be invested until the
collection process is complete.

The Fund will cancel unpaid telephone orders and any decline in
price of the shares will be collected from shares of any
affiliated funds you own.

If a check or ACH investment is returned unpaid due to
nonsufficient funds, stop payment or other reasons, the Fund will
charge you $20, and you will be responsible for any loss incurred
by the Fund. To recover any such loss or charge, the Fund
reserves the right to redeem shares of any affiliated funds you
own, and you could be prohibited from placing further orders
unless full payment by wire or cashier's check accompanies the
investment request.

Any expenses charged to the Fund for collection procedures will
be deducted from the amount invested.

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

If you already have a Global Blue Chip Fund account, your order
to purchase shares, if accepted, will become effective at the
time the Fund next determines NAV after the transfer agent or
sub-agent receives your written request or telephone order.

In all cases, the shares purchased will be priced at the NAV per
share next determined after the time of effectiveness.

All purchases of shares are subject to acceptance by the Fund and
are not binding until accepted.

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

- -12-

<PAGE>

HOW TO SELL (REDEEM) SHARES

BY MAIL BY TELEPHONE
--------------------------- ------------------------------
[GRAPHIC: Picture of [GRAPHIC: Picture of
an Envelope] a telephone]

- -13-

<PAGE>

o You will be charged $10 for a wire transfer. International wire
charges will be higher.

o We will usually send a wire transfer the next business day
after receipt of your order.

o Proceeds from the redemption of shares purchased by check
may be delayed until full payment for the shares has been
received and cleared, which may take up to 7 days from the
purchase date.

o To protect shareholders from the expense burden of excessive
trading, the Fund charges 1.00% of the value of shares
redeemed or exchanged when the shares are held less than one
month.

- -14-

<PAGE>

IMPORTANT INFORMATION ABOUT PURCHASES AND REDEMPTIONS

The Fund reserves the following rights:

EXCHANGING SHARES

When exchanging shares into other funds in the U.S. Global Investors family of
funds:

o Each account must be registered identically; each must have the same
signatures and addresses.
o You will be charged $5 by the transfer agent for each exchange out of
any fund account.
o Retirement accounts administered by the Adviser or its agents may
exchange up to three times per quarter at no charge. (Short term
trading fee may apply.)
o You may exchange by telephone or by mail.
o You are responsible for obtaining and reading the prospectus for the
fund into which you are exchanging.
o Exchanges result in the sale of one fund's shares and the purchase of
another fund's shares, which is usually a taxable event to you.
o Exchanges into any new fund are subject to that fund's initial and
subsequent investment minimums.
o Exchanges out of the fund of shares held less than one month are
subject to the short-term trading fee.

REDEMPTIONS BY THE FUNDS OF CERTAIN ACCOUNTS

NET ASSET VALUE (NAV) CALCULATION

- -15-

<PAGE>

For a purchase, redemption or exchange of fund shares, your price is the NAV
next calculated after your request is received in good order and accepted by the
Fund, its agent or designee. To receive a specific day's price, your request
must be received before the close of the NYSE on that day.

SIGNATURE GUARANTEE/OTHER DOCUMENTATION

You may obtain a signature guarantee from most banks, credit unions,
broker/dealers, savings and loans, and other eligible institutions. You cannot
obtain a signature guarantee from a notary public.

The signature guarantee must appear together with the signature(s) of all
registered owner(s) of the redeemed shares on the written redemption request.

Additional documents are required for redemptions by corporations, executors,
administrators, trustees, and guardians. For instructions call 1-800-873-8637.

OTHER INFORMATION ABOUT YOUR ACCOUNT

The Fund takes precautions to ensure that telephone transactions are genuine,
including recording the transactions, testing shareholder identity and sending
written confirmations to

- -16-

<PAGE>

shareholders of record. The Fund and its service providers are not liable for
acting upon instructions that they believe to be genuine if these procedures are
followed.

CONFIRMATIONS

After any transaction, you will receive written confirmation including the per
share price and the dollar amount and number of shares bought or redeemed.

PURCHASES THROUGH BROKER/DEALERS

DISTRIBUTIONS AND TAXES

Unless you elect to have your distributions in cash, they will automatically be
reinvested in Fund shares. The Fund generally pays income dividends and
distributes capital gains, if any, annually.

TAXES TO YOU

You will generally owe taxes on amounts distributed to you by the Fund, whether
you reinvest the distributions in additional shares or receive them in cash.

Each year the Fund will send you a statement that will detail the tax status of
distributions made to you for that year.

- -17-

<PAGE>

FINANCIAL HIGHLIGHTS

PricewaterhouseCoopers LLP has audited this information. PricewaterhouseCoopers'
report and the Fund's financial statements are included in the annual report,
which is available by request.

<TABLE>
YEAR ENDED
OCTOBER 31,
------------------------
1998 1997*
------- -------
<S> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD $8.96 $10.00
Income from investment operations
Net investment income (loss) (0.48) 0.08
Net realized and unrealized gains (losses) on securities (2.27) (1.12)
------- -------
Total from investment operations (2.75) (1.04)
Less distributions
From net investment income -- --
In excess of net investment income (0.14) --
From capital gains -- --
Total distributions (0.14) --
------- -------
NET ASSET VALUE AT END OF PERIOD $6.07 $8.96
------- -------
TOTAL RETURN (a) (31.12)% (10.40)%
Ratios/Supplemental data (b)
Net assets, end of period (in thousands) $1,573 $3,426
Ratio of expenses to average net assets 8.72% 5.63%
Ratio of net income to average net assets (4.02)% 1.71%
Portfolio turnover rate 158% 13%

- ------------------------------------
<FN>
* From February 20, 1997, commencement of operations.
(a)Total returns for periods less than one year are not annualized.
(b)Ratios are annualized for periods of less than one year. Expenses reimbursed
or offset reflect reductions to total expenses, as discussed in the notes to
the financial statements. Such amounts would decrease the net investment
income ratio had such reductions not occurred.
</FN>
</TABLE>

- -18-

<PAGE>

FUNDS IN THE U.S. GLOBAL INVESTORS FAMILY OF FUNDS

[Clip Art indicating Risk/Reward]

High Reward - High Risk
China Region Opportunity Fund
Regent Eastern European Fund
Gold Shares Fund
World Gold Fund
Global Resources Fund
GLOBAL BLUE CHIP FUND
Bonnel Growth Fund

Moderate Reward - Moderate Risk
Real Estate Fund
All American Equity Fund
MegaTrends Fund
Income Fund
Tax Free Fund
Near-Term Tax Free Fund

Low Reward - Low Risk
U.S. Government Securities Savings Fund
U.S. Treasury Securities Cash Fund

If you have additional questions, one of our professional investor
representatives will personally assist you. Call 1-800-US-FUNDS.

OTHER FUND SERVICES

The Fund offers additional services to meet the unique needs of our investors,
including:

- -19-

<PAGE>

GLOBAL BLUE CHIP FUND, A SERIES OF U.S. GLOBAL ACCOLADE FUNDS

More information on this Fund is available at no charge, upon request:

ANNUAL/SEMI-ANNUAL REPORT

STATEMENT OF ADDITIONAL INFORMATION (SAI)

TO REQUEST INFORMATION:

BY PHONE 1-800-873-8637

BY MAIL Global Blue Chip Fund
P.O. Box 781234
San Antonio, TX 78278-1234

BY INTERNET http://www.us-global.com.

GLOBAL BLUE CHIP FUND
SEC Investment Company Act File No. 811-7662

- -20-

<PAGE>

================================================================================
================================================================================

U.S. GLOBAL ACCOLADE FUNDS
REGENT EASTERN EUROPEAN FUND

Prospectus
March 1, 1999

- -1-

<PAGE>

TABLE OF CONTENTS

RISK/RETURN SUMMARY............................................................3

PERFORMANCE INFORMATION........................................................5

FEES AND EXPENSES..............................................................6

FUND MANAGEMENT...............................................................15

HOW TO BUY SHARES.............................................................17

HOW TO SELL (REDEEM) SHARES...................................................19

IMPORTANT INFORMATION ABOUT PURCHASES AND REDEMPTIONS.........................21

OTHER INFORMATION ABOUT YOUR ACCOUNT..........................................22

DISTRIBUTIONS AND TAXES.......................................................23

FINANCIAL HIGHLIGHTS..........................................................25

FUNDS IN THE U.S. GLOBAL INVESTORS FAMILY OF FUNDS............................26

OTHER FUND SERVICES...........................................................27

- -2-

<PAGE>

RISK/RETURN SUMMARY

INVESTMENT OBJECTIVE

The Regent Eastern European Fund seeks long-term growth of capital.

The Fund is designed for long-term investors who can accept the special risks of
investing in Eastern European countries that are not typically associated with
investing in more established economies or securities markets. You should
carefully consider your ability to assume these risks before making an
investment in the Fund. An investment in shares of the Fund is not a complete
investment program. The Fund is speculative and is not appropriate for all
investors.

MAIN INVESTMENT STRATEGIES

The Fund invests primarily in a diversified portfolio of the common stocks of
companies located in the emerging markets of Eastern Europe. In general, Eastern
European countries are in the early stages of industrial, economic or capital
market development. Eastern European countries may include countries that were
until recently governed by communist governments or countries that, for any
other reason, have failed to achieve levels of industrial production, market
activity, or other measures of economic development typical of the developed
European countries. Although the Fund may invest in any Eastern European
country, it will focus its investment in companies located in Poland, the Czech
Republic and Hungary, and, to a lesser extent, Russia and the Slovak Republic.

While the Fund may invest in companies of any size, it will emphasize companies
that are larger capitalized companies relative to the size of their local
markets and generally have local brand-name recognition in their industry. These
companies may be small as compared to larger companies in the U.S. or Western
Europe.

MAIN RISKS

PORTFOLIO MANAGEMENT. The skill of the Sub-Adviser will play a significant role
in the Fund's ability to achieve its investment objective.

FOREIGN SECURITIES/EMERGING MARKETS. The Fund's investments in the securities of
companies in Eastern European countries may provide the potential for above-
average capital

- -3-

<PAGE>

appreciation, but are subject to special risks. The Fund's returns and share
price may be affected to a large degree by several factors, including
fluctuations in currency exchange rates; political, social or economic
instability; and less stringent accounting, disclosure and financial reporting
requirements in a particular country. These risks are generally intensified in
emerging markets, which includes those countries in which the Fund primarily
invests. Political and economic structures in Eastern European countries are in
their infancy and developing rapidly, and such countries may lack the political,
social and economic stability characteristic of more developed countries. In
addition, Eastern European securities markets are substantially smaller, less
liquid and significantly more volatile than securities markets in the U.S. or
Western Europe. The Fund's share price will reflect the movements of the
different stock markets in which it is invested and the currencies in which its
investments are denominated.

While the Sub-Adviser's investment focus is on companies in Eastern Europe which
are larger capitalized companies in their local markets, these companies may be
small by the standards of U.S. or Western European stock market capitalization.
The stocks of such companies often fluctuate in price to a greater degree than
stocks of larger companies.

GEOGRAPHIC CONCENTRATION - EASTERN EUROPE. The Fund concentrates it investments
in companies located in Eastern Europe. Because of this, companies in the Fund's
portfolio may react similarly to political, social and economic developments in
any of the Eastern European countries. For example, many companies in the same
region may be dependent upon related government fiscal policies. As a result,
changes in those policies or new and unanticipated legislative changes could
affect the value of such companies and, therefore, the Fund's share price. The
Fund's returns and share price may be more volatile than those of a less
concentrated portfolio.

- -4-

<PAGE>

PERFORMANCE INFORMATION

The bar chart below shows the Fund's performance during the period indicated.

[GRAPHIC: Bar Chart -- Only one complete calendar year, 1998. Bar chart and data
points to be submitted with 485(b) filing.]

Best quarter shown in the bar chart above: xx.xx% in ____ quarter 199___
Worst quarter shown in bar chart above: xx.xx% in ____ quarter 199___

The table below compares the Fund's average annual returns for the last calendar
year, as well as for the life of the Fund, to those of an unmanaged index.

<TABLE>

AVERAGE ANNUAL TOTAL
RETURNS PAST SINCE INCEPTION,
(FOR THE PERIODS ENDING 1 YEAR 3/31/97
DECEMBER 31, 1998)
----------------------- ------ ---------------
<S> <C> <C>
REGENT EASTERN EUROPEAN FUND xx.xx% xx.xx%

ING Barings Emerging xx.xx% xx.xx%
Markets (Europe) *

<FN>
* The ING Barings Emerging Markets (Europe) is a [to be added]
</FN>
</TABLE>

Past performance does not guarantee future results.

- -5-

<PAGE>

FEES AND EXPENSES

SHAREHOLDER TRANSACTION EXPENSES - DIRECT FEES

<TABLE>
<S> <C>
Maximum sales charge ................ None
Account closing fee ................ $10
Administrative exchange fee ......... $5
Trader's fee ........................ 2.00%*

<FN>
* Paid if shares are exchanged or redeemed
in less than six months.
</FN>
</TABLE>

ANNUAL FUND OPERATING EXPENSES - INDIRECT FEES

The figures below show operating expenses as a percentage of the Fund's net
assets during the fiscal year ended October 31, 1998.

<TABLE>
<S> <C>
Management Fees .............................. 1.25%
Distribution (12b-1) Fees .................... 0.25%
Other Expenses ............................... 3.44%
Total Annual Fund Operating Expenses ......... 4.94%*

<FN>
* The Adviser has reduced fees and/or absorbed expenses
of 0.39%, which limited actual Fund operating expenses
to 4.55%. The Adviser is not contractually
obligated to limit Fund operating expenses in the
future.
</FN>
</TABLE>

EXAMPLE OF EFFECT OF THE FUND'S OPERATING EXPENSES

This example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. The example assumes that:

o You invest $10,000
o You redeem all of your shares at the end of the periods shown
o Your investment has a 5% annual return
o The Fund's operating expenses remain the same

- -6-

<PAGE>

<TABLE>
<S> <C>
1 year ......................... $504
3 years ........................ $1,493
5 years ........................ $2,483
10 years ....................... $4,965
</TABLE>

INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES AND RELATED RISKS

This section takes a close look at the investment objective of the Fund, its
principal investment strategies and certain risks of investing in the Fund.

INVESTMENT OBJECTIVE AND PRINCIPAL INVESTMENT STRATEGIES

The Fund seeks long-term growth of capital. The Fund pursues its objective by
investing primarily in a diversified portfolio of common stocks of companies
located in the emerging markets of Eastern Europe. Although the Fund may invest
in any Eastern European country, it will focus its investment in companies
located in Poland, the Czech Republic and Hungary, and, to a lesser extent,
Russia and the Slovak Republic. In general, Eastern European countries are in
the early stages of industrial, economic or capital market development. Eastern
European countries may include countries that were until recently governed by
communist governments or countries that, for any other reason, have failed to
achieve levels of industrial production, market activity or other measures of
economic development typical of the developed European countries.

Although the Fund may invest in companies of any size, it generally invests in
companies which are larger capitalized companies and more established in their
local markets. Such companies generally have local brand-name recognition in
their industry. However, these Eastern European companies may be small as
compared to larger companies in the U.S. or Western Europe.

The Fund is not intended to be a complete investment program, and there is no
assurance that its investment objective can be achieved. The Fund's investment
objective is not a fundamental policy and may be changed by the board of
trustees without shareholder approval upon 30 days written notice.

INVESTMENT PROCESS

The Sub-Adviser for the Fund is Regent Fund Management Limited. The Sub-Adviser
uses a "top-down" approach to choose the Fund's investments, selecting the
Eastern European countries which it believes have the greatest investment
potential. Although the Sub-Adviser's decision may be based on various factors,
among the most important include the political and economic environment within
each of the Eastern European countries. The Sub-Adviser then selects industry
sectors that it believes offer growth-oriented investment opportunities within
each of those countries. In doing so, the Sub-Adviser considers such factors as
the effect that the transition from a command economy to a market economy is
likely to have on those sectors. Finally, the Sub-Adviser selects companies for
investment that it believes have the potential for growth and are available at a
reasonable price. The skill of the Sub-Adviser will play a significant role in
the Fund's ability to achieve its investment objective.

- -7-

<PAGE>

GENERAL PORTFOLIO POLICIES

PRINCIPAL TYPES OF INVESTMENTS AND RELATED RISKS. Under normal circumstances,
the Fund will invest at least 65% of its assets in equity securities (including
common stock, preferred stock and securities convertible into common or
preferred stock) of companies located in Eastern European countries. The Fund
may invest without limit in any country in Eastern Europe. Currently, the
Sub-Adviser intends to focus the Fund's investments in companies located in
Poland, the Czech Republic and Hungary. The Fund will be invested to a lesser
extent in Russia and the Slovak Republic. The Fund may invest up to 35% of its
assets in securities, including debt securities, of governments and companies
located anywhere in the world.

The Fund will consider an issuer of securities to be located in an Eastern
European country if:

(1) it is organized under the laws of any Eastern European country and has
a principal office in an Eastern European country,
(2) it derives 50% or more of its total revenues from business in Eastern
European countries, or
(3) its equity securities are traded principally on a securities exchange
in an Eastern European country. (For this purpose, investment
companies that invest principally in securities of companies located
in one or more Eastern European countries will also be considered
to be located in an Eastern European country, as will American
Depository Receipts ("ADRs") and Global Depository Receipts ("GDRs")
with respect to the securities of companies located in Eastern European
countries.)

Because the Fund may invest substantially all of its assets in common stocks and
other equity securities, the main risk is that the value of the common stocks
and other equity securities that it holds may decrease in response to the
activities of an individual company or in response to general market, business
and economic conditions. If this occurs, the Fund's share price may also
decrease. The Fund's performance may also be affected by risks specific to
certain types of investment which are discussed below.

FOREIGN SECURITIES. The Fund may invest substantially all of its assets in the
common stocks and other equity securities of foreign issuers. Investments in
foreign securities involve greater risks than investments in domestic
securities. These risks are generally intensified in emerging markets, which
includes those countries in which the Fund primarily invests. These risks
include:

- -8-

<PAGE>

based on only a few industries. In some countries, a risk may exist that
the government may take over the assets or operations of a company or that
the government may impose taxes or limits on the removal of the Fund's
assets from that country;

o TRANSACTION COSTS. Costs of buying, selling and holding foreign
securities, including brokerage, tax and custody costs, may be higher than
those involved in domestic transactions.

Although the Sub-Adviser's investment focus is on companies in Eastern Europe
which are larger capitalized companies in their local markets, these companies
may be small as compared to larger companies in the U.S. or Western Europe.
Investment in smaller companies involves greater risk than investment in larger
companies. Small companies may have limited product lines, markets, or financial
resources, and may be dependent on a limited management group. Securities issued
by small companies may trade less frequently and in smaller volume than more
widely held securities issued by large companies. Therefore, the values of
securities issued by small companies may fluctuate more sharply than those
issued by larger companies, and the Fund may experience some difficulty in
establishing or closing out positions in small company securities at prevailing
prices.

GEOGRAPHIC CONCENTRATION-EASTERN EUROPE. Political and economic structures in
many Eastern European countries are in their infancy and developing rapidly, and
such countries may lack the social, political and economic stability
characteristic of many more developed countries. In addition, unanticipated
political or social developments may affect the value of the Fund's investment
in Eastern European countries. As a result, the risks normally associated with
investing in any foreign country may be heightened in Eastern European
countries. For example, the small size and inexperience of the securities
markets in Eastern European countries and the limited volume of trading in
securities in those markets may make the Fund's investments in such countries
illiquid and more volatile than investments in more developed countries and may
make obtaining prices on portfolio securities from independent sources more
difficult than in other more developed markets. In addition, Eastern European
countries have in the past failed to recognize private property rights and have
at times nationalized or expropriated the assets of private companies. There may
also be little financial or accounting information available with respect to
companies located in certain Eastern European countries, and it may be difficult
as a result to assess the value or prospects of an investment in such companies.
These factors may make it more difficult for the Fund to calculate an accurate
net asset value on a daily basis and to respond to significant shareholder
redemptions.

- -9-

<PAGE>

Many of the countries in which the Fund invests experienced extremely high rates
of inflation, particularly between 1990 and 1996 when central planning was first
being replaced by the capitalist free market system. As a consequence, the
exchange rates of such countries experienced very significant depreciation
relative to the U.S. dollar. While the inflation experience of such countries
has generally improved significantly in recent times, there can be no assurance
that such improvement will be sustained. Consequently the possibility of
significant loss arising from foreign currency depreciation must be considered
as a serious risk.

In addition to the special risks common to most Eastern European countries
described above, each individual Eastern European country also necessarily
involves special risks which may be unique to that country. Following is a brief
description of special risks which may be incurred when the Fund invests in the
Czech Republic, Hungary, Poland, Russia and the Slovak Republic.

THE CZECH REPUBLIC. The Czech Republic was formerly governed by a communist
regime. In 1989, a market-oriented reform process began. The market-oriented
economy in the Czech Republic is young and still evolving. These reforms leave
many uncertainties regarding market and legal issues.

The Czech Republic has instituted substantial privatization since 1992, when the
first wave of privatization began. Information suggests that dominant or
majority shareholders now control many of the larger privatized companies, and
that further restructuring is likely. Members of management and owners of these
companies are often less experienced than managers and owners of companies in
Western European and U.S. markets. Additionally, securities markets on which the
securities of these companies are traded are in their infancy.

The legal system of the Czech Republic is still evolving. Bankruptcy laws have
been liberalized, giving creditors more power to force bankruptcies. The number
of bankruptcies, while still relatively low, is increasing each year. Laws exist
regulating direct and indirect foreign investment, as well as repatriation of
profits and income, and are subject to change at any time. Tax laws include
provisions for both value-added taxes and income taxes. Courts of law are
expected to, but may not, enforce the legal rights of private parties.

The Prague Stock Exchange opened in April 1993 with 12 monetary institutions and
five brokerage firms as its founding shareholders. The trading and information
systems are based on a central automated trading system. The market price of
securities is set in this automated system once a day. A number of the largest
stocks on the market now trade through a continuous system. Direct trades
are concluded between members, recorded in the automated trading system and
settled through the Exchange Register of Securities. Only members of the
Prague Stock Exchange can be participants in automated trades in blocks of
securities.

Another method of trading is the over-the-counter market which operates by
directly accessing the Securities Centre. The Securities Act allows for
off-exchange trading, which primarily benefits the millions of local
shareholders who hold shares as a result of the original privatization of Czech
industry.

- -10-

<PAGE>

Concluded exchange deals are cleared by Securities Register Ltd., an offshoot of
the Prague Stock Exchange. All exchange deals between members are guaranteed
clearing; a guarantee Fund covers the risks and liabilities inherent in exchange
trading.

HUNGARY. Hungary was formerly governed by a communist regime and tried
unsuccessfully to implement market-oriented reforms in 1968. Beginning in 1989,
Hungary again undertook transformation to a market-oriented economy. These
reforms are still relatively recent and leave many uncertainties regarding
economic and legal issues.

Privatization in Hungary has been substantial but is not yet complete. It is
unclear whether a consolidation of ownership has occurred or will occur as a
result of privatization.

Owners and managers of Hungarian enterprises are often less experienced with
market economies than owners and managers of companies in Western European and
U.S. markets. The securities markets on which the securities of these companies
are traded are in their infancy.

Laws governing taxation, bankruptcy, restrictions on foreign investments and
enforcement of judgments are subject to change.

The Budapest Commodity and Stock Exchange opened in 1864 and became one of the
largest markets in Central Europe. After the Second World War, the exchange was
closed down by the Communists and reopened 42 years later in June 1990. The
Budapest Stock Exchange is a two tier market consisting of listed and traded
stocks. The over-the-counter market is not regulated and any public company's
shares can be traded on it.

POLAND. Poland began market-oriented reforms in 1981. In late 1989, more
comprehensive reforms were enacted. Most small enterprise has been privatized.
Privatization of larger entities has been a slower process, delayed by disputes
regarding the compensation of fund managers and the role of investment funds
charged with privatizing industry.

Barriers to trade were significantly reduced in 1990, but many have since been
reinstituted. The banking system has been reformed to increase capitalization,
but continues to under-perform. Bank privatization has occurred at a slower pace
than expected.

A 1991 law permitted the formation of mutual funds in Poland. The Warsaw Stock
Exchange also opened in 1991 and has grown dramatically, becoming one of the
most liquid markets in Eastern Europe. However, it is a young market with a
capitalization much lower than the capitalization of markets in Western Europe
and the U.S.

Legal reforms have been instituted and laws regarding investments are published
on a routine basis. However, important court decisions are not always accessible
to practitioners. While there are currently no obstacles to foreign ownership of
securities and profits may be repatriated, these laws may be changed anytime
without notice.

The Warsaw Stock Exchange reopened in 1991. The Act establishing the Warsaw
Stock Exchange (1991) provided the basic legal framework for securities
activities. The Law on Public Trading in Securities and trust funds (1991)
regulates the public offerings of securities,

- -11-

<PAGE>

the establishment of open-ended investment funds and the operations of
securities brokers. Polish equities are held on a paperless book-entry system,
based on a computerized central depository. For listed securities it is a
requirement that trades take place through the market for the change of
ownership to take place.

RUSSIA. Russia began reforms under "perestroika" as a member of the Soviet Union
in 1985. After the collapse of the Soviet Union, Russia accelerated
market-oriented reforms. Privatization began in 1992 and economic conditions
were beginning to stabilize. The transition process suffered a major set back in
August 1998, when the Russian government defaulted on its rouble-denominated
sovereign debt. This action has reached international capital markets
unavailable to Russians borrowers and potentially severely retarded the Russian
economy. Privatization of Russian industry through voucher systems has been
substantial. The government has also instituted a controversial loan-for-share
program to raise much needed cash. Banks now control many major Russian
enterprises as a result of this program. There is also speculation that
organized crime exerts significant influence on Russian industry. Concentrated
ownership and control of Russian companies limits the ability of outsiders to
influence corporate governance. Legal reforms to protect stockholders' rights
have been implemented, but stock markets remain underdeveloped and illiquid.

Privatization of agricultural land has been unsuccessful due to disputes between
executive and legislative branches regarding property rights. To date, the
Russian government has not authorized any form of property restitution.

Russian industry is in need of restructuring to close out-dated facilities and
increase investment in technology and management. Financial institutions do not
allocate capital in an efficient manner. Bankruptcy laws are restrictive and
offer little protection to creditors. Foreign creditors must file insolvency
claims through Russian subsidiaries. Bankruptcies remain rare.

The Russian system of taxation deters investment and hinders financial stability
by concentrating on the taxation of industry with relatively little emphasis on
individual taxation. Additionally, the energy sector bears a relatively small
tax burden. Proposals for a new tax system exist, but the impact of a new tax
scheme remains uncertain.

Russia does not have a centralized stock exchange, although exchange activity
has developed regionally and shares are now traded on exchanges located
throughout the country. The majority of stocks in Russia are traded on the
over-the-counter market. It is through the over-the-counter market that foreign
investors typically participate in the Russian equity market.

The largest problem in the equity market continues to be shareholders' property
rights. In Russia the only proof of ownership of shares is an entry in the
shareholders' register. Despite a presidential decree requiring companies with
over 1,000 shareholders to have an independent body to act as its registrar, in
practice a company's register is still susceptible to manipulation by
management. To solve this and related problems, the Federal Securities
Commission was created. Also, Russian law requires banks and market
professionals to acquire a licence before handling securities.

- -12-

<PAGE>

THE SLOVAK REPUBLIC. The Slovak Republic was formerly governed by a communist
regime. In 1989, a market-oriented reform process began. The market-oriented
economy in the Slovak Republic is young and still evolving. These reforms leave
many uncertainties regarding economic and legal issues.

The Slovak Republic's path toward privatization differs from the path of the
Czech Republic. The Slovak government has issued bonds which can be held until
maturity, sold immediately, or redeemed for shares of stock in companies being
privatized. This method of privatization creates uncertainty about future
restructuring which may occur as bonds are sold and/or converted.

Owners and managers of Slovak enterprises are often less experienced with market
economies than owners and managers of companies in Western European and American
markets. The securities markets on which the securities of these companies are
traded are also in their infancy.

Laws regarding bankruptcy, taxation and foreign ownership of Slovak enterprises
are evolving and may be changed dramatically at any time. Import and export
regulations are minimal.

The Bratislava Stock Exchange and the RM-system (an over-the-counter exchange)
began operations during the first half of 1993. The RM-system trades in all
companies distributed under the voucher privatization scheme as well as newly
established companies. Foreigners are free to participate in the market for
shares; profit repatriation is subject to payment of income taxes on capital
gains.

From the beginning the Slovak Republic's markets were fragmented and have lacked
liquidity. Over 80 percent of all trades were executed outside of the Bratislava
Stock Exchange and RM-system. With the adoption of the new capital markets
legislation, more than 70 percent of all trades have been executed on the
Bratislava Stock Exchange or the RM-system. Parliament has adopted amendments to
the Securities Law which provide for the establishment of an independent
regulatory body to protect investors' rights; it centralizes trading on the
official market with the requirement that all trades be registered, published
and completed at prices posted on the Bratislava Stock Exchange, thus promoting
greater transparency. The revised law also increases the minimum capital
requirements for brokers.

OTHER TYPES OF INVESTMENTS AND CONSIDERATIONS. While not principal strategies,
the Fund may invest to a limited extent in preferred stock and convertible
securities, may engage in strategic transactions (including futures, options and
foreign forward currency transactions), may invest in money market instruments,
may lend portfolio securities, may hold temporary investments such as repurchase
agreements, may invest in illiquid securities, and may purchase securities on a
when-issued or delayed delivery basis. The risks of these types of instruments
and strategies are described below and in the Statement of Additional
Information.

The Sub-Adviser may engage in strategic transactions, which include purchasing
and selling exchange-listed and over-the-counter put and call options on
securities, equity and fixed-income indices and other financial instruments,
financial futures contracts and options thereon, and entering into various
currency transactions such as currency forward contracts,

- -13-

<PAGE>

currency futures contracts, or options on currencies or currency futures
(collectively, all the above are called "Strategic Transactions"). The Fund
may engage in Strategic Transactions for hedging, risk management, or portfolio
management purposes and not for speculation. Strategic Transactions may be used
to attempt to protect against possible changes in the market value of securities
held in, or to be purchased for, the Fund's portfolio.

For example, possible losses from changes in currency exchange rates are
primarily a risk of unhedged investing in foreign securities. While a security
may perform well in a foreign market, if the local currency declines against the
U.S. dollar, gains from the investment can disappear or become losses. The
Sub-Adviser may utilize forward foreign currency transactions in an attempt to
hedge the Fund's investments in foreign securities back to the U.S. dollar when,
in the Sub-Adviser's judgment, currency movements affecting particular
investments are likely to harm the performance of the Fund. Typically, currency
fluctuations are more extreme than stock market fluctuations. Accordingly, the
strength or weakness of the U.S. dollar against foreign currencies may account
for part of the Fund's performance even when the Sub-Adviser attempts to
minimize currency risk through hedging activities.

For temporary defensive purposes, the Fund may invest up to 100% of its assets
in (1) money market instruments, deposits or such other investment grade
short-term investments in local Eastern European country currencies as are
considered appropriate at the time; (2) U.S. Government bills, short-term
indebtedness, money market instruments, or other investment grade cash
equivalents, each denominated in U.S. dollars or any other freely convertible
currency; or (3) repurchase agreements. When the Fund is in a defensive
investment position, it may not achieve its investment objective.

YEAR 2000 READINESS

Like other organizations around the world, the Fund could be adversely affected
if the computer systems used by the Fund or its service providers do not
properly process and calculate date-related information beginning January 1,
2000, commonly referred to as the "Year 2000 Problem." The Adviser, the
Sub-Adviser and the Fund's transfer agent believe that they have taken steps
reasonably designed to address any potential Year 2000 Problem for the computer
programs used by the Adviser, the Sub-Adviser and the transfer agent. In addi-
tion, management is in the process of confirming that the third-party service
providers used by the Fund, the Adviser, the Sub-Adviser and the transfer agent
are also taking steps reasonably designed to address the Year 2000 Problem with
respect to their computer systems. At this time, there can be no assurance that
these steps will be sufficient to avoid any adverse impact to the

- -14-

<PAGE>

Fund. Furthermore, there can be no assurances that the companies in which this
Fund invest will not be adversely affected by the Year 2000 Problem.

- -15-

<PAGE>

FUND MANAGEMENT

SUB-ADVISER

Effective February 28, 1997, the Adviser and the Fund contracted with Regent
Fund Management Limited, the Sub-Adviser, International Trading Centre, Warrens,
St. Michael, Barbados to serve as Sub-Adviser for the Fund. The Sub-Adviser is
wholly owned by Regent Pacific Group Limited, which was established in 1990 and
is a holding company of a financial services group with operations in Hong Kong,
London, Moscow, Kiev, and Warsaw and with associations with financial investment
companies in certain other countries. Regent Pacific Group Limited manages and
advises in respect of assets in excess of $1.7 billion on behalf of clients.

The Sub-Adviser manages the composition of the portfolio and furnishes the Fund
advice and recommendations with respect to its investments and its investment
program and strategy. In consideration for such services, the Adviser shares the
management fee with the Sub-Adviser. The Fund is not responsible for paying any
portion of the Sub-Advisor's fees.

While the Sub-Adviser does not have previous experience managing a U.S.
registered mutual fund portfolio, it has experience, and continues to manage
offshore funds, private investment companies, and separate accounts for
institutions and high net worth individuals.

PORTFOLIO MANAGER

The portfolio management team meets regularly to review portfolio holdings and
to discuss purchase and sale activity. Dominic Bokor-Ingram is the team leader
for the Fund. Mr. Bokor-Ingram started his career in 1989 as a stockbroker at
Olliff & Partners where he was involved with investment trust and closed-end
fund research and sales. He then joined Buchanan Partners, an investment
management company, in 1992 as a founding member of Buchanan Securities where he
specialized in closed-end funds and emerging markets securities, again in a fund
research and sales capacity. From 1993 to 1995 he was a member of the emerging
markets team, where he specialized in the emerging markets of Eastern and
Southern Europe. In 1995 he left Buchanan to help establish Regent Kingpin
Capital Management where he was responsible for fund management in emerging
markets in Europe, Russia and the former Soviet Republics. Since 1997, Regent
Kingpin Capital Management is wholly owned by Regent Pacific, and Mr.
Bokor-Ingram is now employed by Regent Fund Management (UK) Ltd. He is also a
director of the Czech Value Fund. Mr. Bokor-Ingram received his BA in Economics
and Statistics from Exeter University.

INVESTMENT ADVISER

- -16-

<PAGE>

funds with approximately $1.3 billion in assets. For the fiscal year ended
October 31, 1998, the Adviser was paid a fee of 1.25% of net assets in the Fund.

DISTRIBUTION PLAN

- -17-

<PAGE>

HOW TO BUY SHARES

MINIMUMS
INITIAL INVESTMENT SUBSEQUENT INVESTMENT
o regular account $5000 $50
o ABC Investment Plan(R) $1000 $100
o custodial accounts for minors $1000 $50
o retirement account None None

SEND NEW ACCOUNT APPLICATIONS TO:
---------------------------------
REGENT EASTERN EUROPEAN FUND
P.O. Box 781234
San Antonio, TX 78278-1234

o Read this prospectus. o If you already have a o To purchase more
o Fill out the application U.S. Global Accolade shares automatically
if you are opening a Funds account, you each month, fill
new account. may purchase out the ABC Investment
o Make out a check to additional shares by Plan(R)form.
the Regent Eastern telephone order. o U.S. Global Accolade
European Fund for o You must pay for them Funds automatically
the amount you want within seven business withdraws monies from
to invest. days. your bank account
o Send the application o Call 1-800-US-FUNDS monthly.
and a check to the for current wire o See details on the
Regent Eastern instructions and a application.
European Fund in the confirmation number.
envelope provided. o We automatically grant
o To add to an existing all shareholders
account, be sure to telephone exchange
include your account privileges unless they
number on your check decline them explicitly
and mail it with the in writing.
investment slip found o Telephone purchases
on your confirmation are not available for
statement. money market funds or
U.S. Global retirement
accounts.

- -18-

<PAGE>

-----------------------------------------------------------------
IMPORTANT Your check must be made payable to the REGENT EASTERN EUROPEAN
NOTES ABOUT FUND
PAYING FOR
YOUR SHARES You may not purchase shares by credit card or third-party checks.

Telephone purchase orders may not exceed ten times the value
of all like-registered accounts on the date the order is
placed.

You may not exchange shares purchased by telephone until the
Fund has received and accepted payment.

Checks drawn on foreign banks will not be invested until the
collection process is complete.

The Fund will cancel unpaid telephone orders and any decline
in price of the shares will be collected from shares of any
affiliated funds you own.

If a check or ACH investment is returned unpaid due to
nonsufficient funds, stop payment or other reasons, the Fund
will charge you $20, and you will be responsible for any loss
incurred by the Fund. To recover any such loss or charge, the
Fund reserves the right to redeem shares of any affiliated
funds you own, and you could be prohibited from placing
further orders unless full payment by wire or cashier's check
accompanies the investment request.

Any expenses charged to the Fund for collection procedures
will be deducted from the amount invested.

-----------------------------------------------------------------
EFFECTIVE An order to establish a new account and purchase shares of the
TIME FOR Fund will become effective,if accepted, at the time the Fund next
PURCHASE OR determines its net asset value (NAV) per share after the Fund's
REDEMPTION transfer agent or sub-agent has received:
ORDERS
o a completed and signed application, and
o a check or wire transfer.

If you already have a Regent Eastern European Fund account,
your order to purchase shares, if accepted, will become
effective at the time the Fund next determines NAV after the
transfer agent or sub-agent receives your written request or
telephone order.

In all cases, the shares purchased will be priced at the NAV
per share next determined after the time of effectiveness.

All purchases of shares are subject to acceptance by the Fund
and are not binding until accepted.

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

- -19-

<PAGE>

HOW TO SELL (REDEEM) SHARES

BY MAIL BY TELEPHONE
--------------------------- ------------------------------
[GRAPHIC: Picture of [GRAPHIC: Picture of
an Envelope] a telephone]

- -20-

<PAGE>

IMPORTANT o Generally, we will send payment for your redeemed shares to
NOTES you within two business days after your redemption request
ABOUT has been received and accepted by the Fund.
REDEEMING
YOUR o You may receive payment for redeemed shares via wire. To elect
SHARES these services, send the Fund a written request giving your
bank information with signature guarantee for all registered
owners. (See "Signature Guarantee/Other Documentation".)

o You will be charged $10 for a wire transfer. International
wire charges will be higher.

o We will usually send a wire transfer the next business day
after receipt of your order.

o Proceeds from the redemption of shares purchased by check may
be delayed until full payment for the shares has been received
and cleared, which may take up to 7 days from the purchase
date.

o To protect shareholders from the expense burden of excessive
trading, the Fund charges 2.00% of the value of shares
redeemed or exchanged when the shares are held less than six
months.

- -21-

<PAGE>

IMPORTANT INFORMATION ABOUT PURCHASES AND REDEMPTIONS

EXCHANGING SHARES

The Fund reserves the following rights:

When exchanging shares into other Funds in the U.S. Global Investors family of
funds:

o Each account must be registered identically; each must have the same
signatures and addresses.
o You will be charged $5 by the transfer agent for each exchange out of
any fund account.
o Retirement accounts administered by the Adviser or its agents may
exchange up to three times per quarter at no charge.(Short term trading
fee may apply.)
o You may exchange by telephone or by mail.
o You are responsible for obtaining and reading the prospectus for the
Fund into which you are exchanging.
o Exchanges result in the sale of one fund's shares and the purchase of
another fund's shares, which is usually a taxable event to you.
o Exchanges into any new fund are subject to that fund's initial and
subsequent investment minimums.
o Exchanges out of the Fund of shares held less than six months are
subject to the short-term trading fee.

REDEMPTIONS BY THE FUNDS OF CERTAIN ACCOUNTS

NET ASSET VALUE (NAV) CALCULATION

- -22-

<PAGE>

SIGNATURE GUARANTEE/OTHER DOCUMENTATION

o Your redemption request exceeds $15,000.
o You request that payment be made to a name other than the one on your
account registration.
o You request that payment be mailed to an address other than the one of
record with the Funds.
o You change or add information relating to your designated bank.
o You have changed your address of record within the last 30 days.

You may obtain a signature guarantee from most banks, credit unions,
broker/dealers, savings and loans, and other eligible institutions. You cannot
obtain a signature guarantee from a notary public.

The signature guarantee must appear together with the signature(s) of all
registered owner(s) of the redeemed shares on the written redemption request.

Additional documents are required for redemptions by corporations, executors,
administrators, trustees, and guardians. For instructions call 1-800-873-8637.

OTHER INFORMATION ABOUT YOUR ACCOUNT

The Funds take precautions to ensure that telephone transactions are genuine,
including recording the transactions, testing shareholder identity and sending
written confirmations to

- -23-

<PAGE>

shareholders of record. The Funds and their service providers are not liable
for acting upon instructions that they believe to be genuine if these procedures
are followed.

CONFIRMATIONS

After any transaction, you will receive written confirmation including the per
share price and the dollar amount and number of shares bought or redeemed.

PURCHASES THROUGH BROKER/DEALERS

DISTRIBUTIONS AND TAXES

Unless you elect to have your distributions in cash, they will automatically be
reinvested in fund shares. The Fund generally pays income dividends and
distributes capital gains, if any, annually.

TAXES TO YOU

You will generally owe taxes on amounts distributed to you by the Fund, whether
you reinvest the distributions in additional shares or receive them in cash.

Distributions of gains from the sale of assets held by the Fund for more than a
year generally are taxable to you at the applicable mid-term or long-term
capital gains rate, regardless of how long you have held fund shares.
Distributions from other sources generally are taxed as ordinary income.

Each year the Fund will send you a statement that will detail the tax status of
distributions made to you for that year.

If you redeem fund shares that have gone up in value, you will have a taxable
gain when you redeem. Exchanges are treated as a redemption and purchase for tax
purposes. Therefore, you will also have a taxable gain upon exchange if the
shares redeemed have gone up in value.

- -24-

<PAGE>

FINANCIAL HIGHLIGHTS

This table is intended to show you the Fund's financial performance for the past
five years. Some of the information reflects financial results for a single fund
share. The total returns represent the rate that an investor would have earned
(or lost) money on an investment in the Fund. It assumes that all dividends and
capital gains have been reinvested.

PricewaterhouseCoopers LLP has audited this information. PricewaterhouseCoopers'
report and the Fund's financial statements are included in the annual report,
which is available by request.

<TABLE>
YEAR ENDED
OCTOBER 31,
---------------------
1998 1997*
------- ------
<S> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD $11.19 $10.00
Income from investment operations
Net investment income (loss) (0.27) (0.01)
Net realized and unrealized gains (losses) on securities (2.84) 1.20
------- ------
Total from investment operations (3.11) 1.19
Less distributions
From net investment income -- --
In excess of net investment income (0.01) --
From capital gains -- --
In excess of capital gains (0.05) --
------- ------
Total distributions (0.06) --
------- ------
NET ASSET VALUE AT END OF PERIOD $8.02 $11.19
------- ------
TOTAL RETURN (A) (27.96)% 11.90%
Ratios/Supplemental data (b)
Net assets, end of period (in thousands) $5,676 $8,778
Ratio of expenses to average net assets 4.94% 4.98%
Ratio of net income to average net assets (2.38)% (0.49)%
Portfolio turnover rate 97% 11%

- ------------------------------------
<FN>
* From March 31, 1997, commencement of operations.
(a) Total returns for periods less than one year are not annualized.
(b) Ratios are annualized for periods of less than one year.Expenses reimbursed
or offset reflect reductions to total expenses, as discussed in the notes
to the financial statements. Such amounts would decrease the net investment
income ratio had such reductions not occurred.
</FN>
</TABLE>

- -25-

<PAGE>

FUNDS IN THE U.S. GLOBAL INVESTORS FAMILY OF FUNDS

[Clip Art indicating Risk/Reward]

HIGH REWARD - HIGH RISK
China Region Opportunity Fund
REGENT EASTERN EUROPEAN FUND
Gold Shares Fund
World Gold Fund
Global Resources Fund
Global Blue Chip Fund
Bonnel Growth Fund

MODERATE REWARD - MODERATE RISK
Real Estate Fund
All American Equity Fund
MegaTrends Fund
Income Fund
Tax Free Fund
Near-Term Tax Free Fund

LOW REWARD - LOW RISK
U.S. Government Securities Savings Fund
U.S. Treasury Securities Cash Fund

If you have additional questions, one of our professional investor
representatives will personally assist you. Call 1-800-US-FUNDS.

OTHER FUND SERVICES

The Fund offers additional services to meet the unique needs of our investors,
including:

- -26-

<PAGE>

REGENT EASTERN EUROPEAN FUND, A SERIES OF U.S. GLOBAL ACCOLADE FUNDS

More information on this Fund is available at no charge, upon request:

ANNUAL/SEMI-ANNUAL REPORT

STATEMENT OF ADDITIONAL INFORMATION (SAI)

More information about this Fund, its investment strategies and related risks is
provided in the SAI. There can be no guarantee that the fund will achieve its
objective. The current SAI is on file with the SEC and is legally considered a
part of this prospectus.

TO REQUEST INFORMATION:

BY PHONE 1-800-873-8637

BY MAIL REGENT EASTERN EUROPEAN FUND
P.O. Box 781234
San Antonio, TX 78278-1234

BY INTERNET http://www.us-global.com.

REGENT EASTERN EUROPEAN FUND
SEC Investment Company Act File No. 811-7662

- -27-

................................................................................
PART B. INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
(ITEMS 10 - 22)
................................................................................

U.S. GLOBAL ACCOLADE FUNDS

BONNEL GROWTH FUND

STATEMENT OF ADDITIONAL INFORMATION

This Statement of Additional Information is not a prospectus, but should be read
in conjunction with the current prospectus ("Prospectus") dated March 1, 1999.
The financial statements for the Bonnel Growth Fund for the year ended October
31, 1998, and the Report of Independent Auditors thereon, are incorporated by
reference from the Fund's Annual Report dated October 31, 1998. Copies of the
Prospectus and the Fund's financial statements may be requested from U.S. Global
Investors, Inc. ("Adviser"), 7900 Callaghan Road, San Antonio, Texas 78229 or
1-800-US- FUNDS (1-800-873-8637).

The date of this Statement of Additional Information is March 1, 1999.

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

<PAGE>

TABLE OF CONTENTS

PAGE

GENERAL INFORMATION............................................................3

FUND POLICIES..................................................................3

INVESTMENT STRATEGIES AND RISKS................................................5

PUT AND CALL OPTIONS...........................................................9

PORTFOLIO TURNOVER............................................................10

PORTFOLIO TRANSACTIONS........................................................10

MANAGEMENT OF THE FUND........................................................11

PRINCIPAL HOLDERS OF SECURITIES...............................................12

INVESTMENT ADVISORY SERVICES..................................................13

TRANSFER AGENCY AND OTHER SERVICES............................................14

DISTRIBUTION PLAN.............................................................15

CERTAIN PURCHASES OF SHARES OF THE FUND.......................................15

ADDITIONAL INFORMATION ON REDEMPTIONS.........................................16

CALCULATION OF PERFORMANCE DATA...............................................16

TAX STATUS....................................................................17

CUSTODIAN, FUND ACCOUNTANT AND ADMINISTRATOR..................................18

UNDERWRITER/DISTRIBUTOR.......................................................18

INDEPENDENT ACCOUNTANTS.......................................................18

FINANCIAL STATEMENTS..........................................................19

- --------------------------------------------------------------------------------
Statement of Additional Information - Bonnel Growth Fund
Page 2

<PAGE>

GENERAL INFORMATION

U.S. Global Accolade Funds ("Trust") is an open-end management investment
company and a business trust organized April 16, 1993 under the laws of the
Commonwealth of Massachusetts. There are several series within the Trust, each
of which represents a separate diversified portfolio of securities
("portfolio"). This Statement of Additional Information ("SAI") presents
important information concerning the Bonnel Growth Fund ("Fund") and should be
read in conjunction with the prospectus. The Fund commenced operations on
October 17, 1994.

The assets received by the Trust from the issuance or sale of shares of the
Fund, and all income, earnings, profits and proceeds thereof, subject only to
the rights of creditors, are separately allocated to the Fund. They constitute
the underlying assets of the Fund, are required to be segregated on the books of
accounts, and are to be charged with the expenses with respect to the Fund. Any
general expenses of the Trust, not readily identifiable as belonging to a
particular series of the Trust, shall be allocated by or under the direction of
the Board of Trustees in such manner as the Board determines to be fair and
equitable.

Each share of the Fund represents an equal proportionate interest in the Fund
with each other share and is entitled to such dividends and distributions, out
of the income belonging to the Fund, as are declared by the Board. Upon
liquidation of the Trust, shareholders of the Fund are entitled to share pro
rata in the net assets belonging to the Fund available for distribution.

The Trust's Master Trust Agreement provides that no annual or regular meeting of
shareholders is required. However, the Trust has a staggered Board with terms
such that at least 25% of the Trustees expire every three years. The Trustees
serve in that capacity for six-year terms. Thus, there will ordinarily be no
shareholder meetings unless otherwise required by the Investment Company Act of
1940.

On any matter submitted to shareholders, the holder of each share is entitled to
one vote per share with proportionate voting for fractional shares. On matters
affecting any individual series, a separate vote of that series would be
required. Shareholders of any series are not entitled to vote on any matter that
does not affect their series.

Shares do not have cumulative voting rights, which means that in situations in
which shareholders elect Trustees, holders of more than 50% of the shares voting
for the election of Trustees can elect 100% of the Trust's Trustees, and the
holders of less than 50% of the shares voting for the election of Trustees will
not be able to elect any person as a Trustee.

Shares have no preemptive or subscription rights and are fully transferable.
There are no conversion rights.

Under Massachusetts law, the shareholders of the Trust could, under certain
circumstances, be held personally liable for the obligations of the Trust.
However, the master trust agreement disclaims shareholder liability for acts or
obligations of the Trust and requires that notice of such disclaimer be given in
each agreement, obligation or instrument entered into or executed by the Trust
or the Trustees. The master trust agreement provides for indemnification out of
the Trust's property for all losses and expenses of any shareholder held
personally liable for the obligations of the Trust. Thus, the risk of a
shareholder incurring financial loss on account of shareholder liability is
limited to circumstances in which the Trust itself would be unable to meet its
obligations.

FUND POLICIES

The following information supplements the discussion of the Fund's investment
objectives and policies discussed in the Fund's prospectus.

FUNDAMENTAL INVESTMENT RESTRICTIONS. Neither the investment objective nor the
investment policy of Bonnel Growth Fund is a fundamental policy, and they may be
changed by the Board of Trustees without shareholder approval. The shareholders
will be notified in writing at least 30 days prior to any material change to
either the Fund's investment objective or its investment policy.

- --------------------------------------------------------------------------------
Statement of Additional Information - Bonnel Growth Fund
Page 3

<PAGE>

Under normal market conditions, the Fund will have at least 80% of the value of
its total assets in common stocks and securities convertible into common stocks.
The remainder of the portfolio may be invested in money market instruments; for
temporary defensive purposes, the Fund may invest up to 100% of its assets in
money market instruments. The Fund may invest in common stocks and other equity
securities of foreign issuers but only if they are listed on a domestic or
foreign exchange, quoted on Nasdaq-AMEX or traded on the domestic or foreign
over-the-counter market. No more than 25% of the value of the Fund's total net
assets will be invested in such foreign securities.

Bonnel Growth Fund will not change any of the following investment restrictions,
without the affirmative vote of a majority of the outstanding voting securities
of the Fund, which, as used herein, means the lesser of (1) 67% of the Fund's
outstanding shares present at a meeting at which more than 50% of the
outstanding shares of the Fund are represented either in person or by proxy, or
(2) more than 50% of the Fund's outstanding shares.

The Fund may not:

1. Issue senior securities.

2. Borrow money, except that the Fund may not borrow more than 5% of its total
assets from banks as a temporary measure for extraordinary purposes, and
may borrow up to 331/3% of the amount of its total assets (reduced by the
amount of all liabilities and indebtedness other than such borrowing) when
deemed desirable or appropriate to effect redemptions, provided, however,
that the Fund will not purchase additional securities while borrowings
exceed 5% of the total assets of the Fund.

3. Underwrite the securities of other issuers.

4. Invest in real estate.

5. Engage in the purchase or sale of commodities or commodity futures
contracts, except that the Fund may invest in futures contracts and options
thereon on equity securities indexes in conformance with rules and
regulations issued by the Securities and Exchange Commission.

6. Lend its assets, except that the Fund may purchase money market debt
obligations and repurchase agreements secured by money market obligations,
and except for the purchase or acquisition of bonds, debentures or other
debt securities of a type customarily purchased by institutional investors
and except that the Fund may lend portfolio securities with an aggregate
market value of not more than one-third of the Fund's total net assets.
(Accounts receivable for shares purchased by telephone will not be deemed
loans.)

7. Purchase any security on margin, except that it may obtain such short-term
credits as are necessary for clearance of securities transactions.

8. Make short sales.

9. Invest more than 15% of its total assets in illiquid securities, including
securities that are subject to legal or contractual restrictions on resale.

10. Invest more than 25% of its total assets in securities of companies
principally engaged in any one industry. For the purposes of determining
industry concentration, the Fund relies on the Standard Industrial
Classification as complied by Standard & Poor's Compustat Services, Inc. as
in effect from time to time.

11. With respect to 75% of its total assets the Fund will not: (a) invest more
than 5% of the value of its total assets in securities of any one issuer,
except such limitation will not apply to obligations issued or guaranteed
by the United States Government, its agencies or instrumentalities, or (b)
acquire more than 10% of the voting securities of any one issuer.

- --------------------------------------------------------------------------------
Statement of Additional Information - Bonnel Growth Fund
Page 4

<PAGE>

12. Invest more than 10% of its total net assets in open-end investment
companies. To the extent that the Fund will invest in open-end investment
companies, the Fund's advisor and sub-advisor will waive a proportional
amount of their management fees.

If a percentage restriction is adhered to at the time of investment, a later
increase or decrease in percentage, resulting from a change in values of
portfolio securities or amount of net assets, will not be considered a violation
of any of the foregoing restrictions.

INVESTMENT STRATEGIES AND RISKS

The following information supplements the discussion of the Fund's investment
strategies and risks in the Fund's prospectus.

MARKET RISK. Investments in equity and debt securities are subject to inherent
market risks and fluctuations in value due to earnings, economic conditions,
quality ratings and other factors beyond the Adviser's control. Therefore, the
return and net asset value of the Funds will fluctuate.

REAL ESTATE INVESTMENT TRUSTS (REIT). The Fund may invest in real estate
investment trusts ("REIT"), which may subject the Fund to many of the same risks
related to the direct ownership of real estate. These risks may include declines
in the value of real estate, risks related to economic factors, changes in
demand for real estate, change in property taxes and property operating
expenses, casualty losses, and changes to zoning laws. REITs are also dependent
to some degree on the capabilities of the REIT manager. In addition, the failure
of a REIT to continue to qualify as a REIT for tax purposes would have an
adverse effect upon the value of a portfolio's investment in that REIT.

FOREIGN INVESTMENTS. Investing in securities issued by companies whose principal
business activities are outside the United States may involve significant risks
not present in domestic investments. For example, there is generally less
publicly available information about foreign companies, particularly those not
subject to the disclosure and reporting requirements of the United States
securities laws. Foreign issuers are generally not bound by uniform accounting,
auditing, and financial reporting requirements and standards of practice
comparable to those applicable to domestic issuers. Investments in foreign
securities also involve the risk of possible adverse changes in investment or
exchange control regulations, expropriation or confiscatory taxation, limitation
of the removal of funds or other assets of the Fund, political or financial
instability or diplomatic and other developments that could affect such
investment. In addition, economies of particular countries or areas of the world
may differ favorably or unfavorably from the economy of the United States. It is
anticipated that in most cases the best available market for foreign securities
will be on exchanges or in over-the-counter markets located outside of the
United States. Foreign stock markets, while growing in volume and
sophistication, are generally not as developed as those in the United States,
and securities of some foreign issuers (particularly those in developing
countries) may be less liquid and more volatile than securities of comparable
United States companies. In addition, foreign brokerage commissions are
generally higher than commissions on securities traded in the United States and
may be non-negotiable. In general, there is less overall governmental
supervision and regulation of foreign securities markets, broker/dealers, and
issuers than in the United States.

ADR. American Depository Receipts (ADR) represent shares of foreign issuers.
ADRs are typically issued by a U.S. bank or trust company and evidence ownership
of underlying securities issued by a foreign corporation. Generally, ADRs in
registered form are intended for use in the U.S. securities market, and ADRs in
bearer form are intended for use in securities markets outside the United
States. ADRs may not necessarily be denominated in the same currency as the
underlying securities into which they may be converted. In addition, the issuers
of the securities underlying unsponsored ADRs are not obligated to disclose
material information in the United States; therefore, there may be less
information available regarding such issuers. There may not be a correlation
between such information and the market value of the ADRs. For purposes of the
Fund's investment policies, the Fund's investment in ADRs will be deemed to be
investments in the underlying securities.

EMERGING MARKETS. The Fund may invest up to 5% of its total assets in countries
considered by the Sub-Adviser to represent emerging markets. The Adviser decides
by considering various factors, including development of securities

- --------------------------------------------------------------------------------
Statement of Additional Information - Bonnel Growth Fund
Page 5

<PAGE>

laws and market regulation, total number of issuers, total market
capitalization, and perceptions of the investment community. Currently, the
Adviser considers the following countries to be among the emerging markets:
Malaysia, Mexico, Hong Kong, Greece, Portugal, Turkey, Argentina, Brazil,
Indonesia, Philippines, Singapore, Thailand, and China.

Investing in emerging markets involves risks and special considerations not
typically associated with investing in other more established economies or
securities markets. Investors should carefully consider their ability to assume
the below listed risks before making an investment in the Fund. Investing in
emerging markets is considered speculative and involves the risk of total loss.

Risks of investing in emerging markets include:

(1) the risk that the Fund's assets may be exposed to nationalization,
expropriation, or confiscatory taxation;

(2) the fact that emerging market securities markets are substantially
smaller, less liquid and more volatile than the securities markets of
more developed nations. The relatively small market capitalization and
trading volume of emerging market securities may cause the Fund's
investments to be comparatively less liquid and subject to greater price
volatility than investments in the securities markets of developed
nations. Many emerging markets are in their infancy and have yet to be
exposed to a major correction. In the event of such an occurrence, the
absence of various market mechanisms that are inherent in the markets of
more developed nations may lead to turmoil in the market place, as well
as the inability of the Fund to liquidate its investments;

(3) greater social, economic and political uncertainty (including the risk of
war);

(4) greater price volatility, substantially less liquidity and significantly
smaller market capitalization of securities markets;

(5) currency exchange rate fluctuations and the lack of available currency
hedging instruments;

(6) higher rates of inflation;

(7) controls on foreign investment and limitations on repatriation of
invested capital and on the Fund's ability to exchange local currencies
for U.S. dollars;

(8) greater governmental involvement in and control over the economy;

(9) the fact that emerging market companies may be smaller, less seasoned and
newly organized;

(10) the difference in, or lack of, auditing and financial reporting standards
which may result in unavailability of material information about issuers;

(11) the fact that the securities of many companies may trade at prices
substantially above book value, at high price/earnings ratios, or at
prices that do not reflect traditional measures of value;

(12) the fact that statistical information regarding the economy of many
emerging market countries may be inaccurate or not comparable to
statistical information regarding the United States or other economies;

(13) less extensive regulation of the securities markets;

(14) certain considerations regarding the maintenance of Fund portfolio
securities and cash with foreign sub-custodians and securities
depositories;

(15) the risk that it may be more difficult, or impossible, to obtain and/or
enforce a judgment than in other countries;

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Statement of Additional Information - Bonnel Growth Fund
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<PAGE>

(16) the risk that the Fund may be subject to income or withholding taxes
imposed by emerging market counties or other foreign governments. The
Fund intends to elect, when eligible, to "pass through" to the Fund's
shareholders the amount of foreign income tax and similar taxes paid by
the Fund. The foreign taxes passed through to a shareholder would be
included in the shareholder's income and may be claimed as a deduction or
credit. Other taxes, such as transfer taxes, may be imposed on the Fund,
but would not give rise to a credit or be eligible to be passed through
to the shareholders;

(17) the fact that the Fund also is permitted to engage in foreign currency
hedging transactions and to enter into stock options on stock index
futures transactions, each of which may involve special risks, although
these strategies cannot at the present time be used to a significant
extent by the Fund in the markets in which the Fund will principally
invest;

(18) enterprises in which the Fund invests may be or become subject to unduly
burdensome and restrictive regulation affecting the commercial freedom of
the invested company and thereby diminishing the value of the Fund's
investment in it. Restrictive or over-regulation may, therefore, be a
form of indirect nationalization;

(19) businesses in emerging markets only have a very recent history of
operating within a market-oriented economy. Overall, relative to
companies operating in western economies, companies in emerging markets
are characterized by a lack of (i) experienced management, (ii) modern
technology and (iii) a sufficient capital base with which to develop and
expand their operations. It is unclear what will be the effect on
companies in emerging markets, if any, of attempts to move towards a more
market-oriented economy;

(20) investments in equity securities are subject to inherent market risks and
fluctuations in value due to earnings, economic conditions, quality
ratings and other factors beyond the control of the Sub-Adviser. As a
result, the return and net asset value of the Fund will fluctuate;

(21) the Sub-Adviser may engage in hedging transactions in an attempt to hedge
the Fund's foreign securities investments back to the U.S. dollar when,
in its judgment, currency movements affecting particular investments are
likely to harm the performance of the Fund. Possible losses from changes
in currency exchange rates are primarily a risk of unhedged investing in
foreign securities. While a security may perform well in a foreign
market, if the local currency declines against the U.S. dollar, gains
from the investment can disappear or become losses. Typically, currency
fluctuations are more extreme than stock market fluctuations.
Accordingly, the strength or weakness of the U.S. dollar against foreign
currencies may account for part of the Fund's performance even when the
Sub-Adviser attempts to minimize currency risk through hedging
activities. While currency hedging may reduce portfolio volatility, there
are costs associated with such hedging, including the loss of potential
profits, losses on hedging transactions, and increased transaction
expenses; and

(22) disposition of illiquid securities often takes more time than for more
liquid securities, may result in higher selling expenses and may not be
able to be made at desirable prices or at the prices at which such
securities have been valued by the Fund. As a non-fundamental policy the
Fund will not invest more than 15% of its net assets in illiquid
securities.

LOANS OF PORTFOLIO SECURITIES. The Fund may make short-term loans of its
portfolio securities to banks, brokers and dealers. Lending portfolio securities
exposes the Fund to the risk that the borrower may fail to return the loaned
securities or may not be able to provide additional collateral or that the Fund
may experience delays in recovery of the loaned securities or loss of rights in
the collateral if the borrower fails financially. To minimize these risks, the
borrower must agree to maintain collateral marked to market daily, in the form
of cash or U.S. Government obligations, with the Fund's custodian in an amount
at least equal to the market value of the loaned securities. It is the Fund's
policy, which may not be changed without the affirmative vote of a majority of
its outstanding shares, that such loans will not be made if as a result the
aggregate of all outstanding loans exceeds one-third of the value of the Fund's
total assets.

BORROWING. The Fund may have to deal with unpredictable cashflows as share-
holders purchase and redeem shares. Under adverse conditions, the Fund might
have to sell portfolio securities to raise cash to pay for redemptions at a time

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<PAGE>

when investment considerations would not favor such sales. In addition, frequent
purchases and sales of portfolio securities tend to decrease Fund performance by
increasing transaction expenses.

The Fund may deal with unpredictable cashflows by borrowing money. Through such
borrowings the Fund may avoid selling portfolio securities to raise cash to pay
for redemptions at a time when investment considerations would not favor such
sales. In addition, the Fund's performance may be improved due to a decrease in
the number of portfolio transactions. After borrowing money, if subsequent
shareholder purchases do not provide sufficient cash to repay the borrowed
monies, the Fund will liquidate portfolio securities in an orderly manner to
repay the borrowed monies.

To the extent that the Fund borrows money prior to selling securities, the Fund
would be leveraged such that the Fund's net assets may appreciate or depreciate
in value more than an unleveraged portfolio of similar securities. Since
substantially all of the Fund's assets will fluctuate in value and whereas the
interest obligations on borrowings may be fixed, the net asset value per share
of the Fund will increase more when the Fund's portfolio assets increase in
value and decrease more when the Fund's portfolio assets decrease in value than
would otherwise be the case. Moreover, interest costs on borrowings may
fluctuate with changing market rates of interest and may partially offset or
exceed the returns which the Fund earns on portfolio securities. Under adverse
conditions, the Fund might be forced to sell portfolio securities to meet
interest or principal payments at a time when market conditions would not be
conducive to favorable selling prices for the securities.

The Fund will not purchase any security while borrowings represent more than 5%
of total assets.

TEMPORARY DEFENSIVE INVESTMENT. For temporary defensive purposes during periods
that, in the Sub-Adviser's opinion, present the Fund with adverse changes in the
economic, political or securities markets, the Fund may seek to protect the
capital value of its assets by temporarily investing up to 100% of its assets
in: U.S. Government securities, short-term indebtedness, money market
instruments, or other investment grade cash equivalents, each denominated in
U.S. dollars or any other freely convertible currency; or repurchase agreements.
When the Fund is in a defensive investment position, it may not achieve its
investment objective.

REPURCHASE AGREEMENTS. The Fund may invest part of its assets in repurchase
agreements with domestic broker-dealers, banks and other financial institutions,
provided the Fund's custodian always has possession of securities serving as
collateral or has evidence of book entry receipt of such securities. In a
repurchase agreement, the Fund purchases securities subject to the seller's
agreement to repurchase such securities at a specified time (normally one day)
and price. The repurchase price reflects an agreed-upon interest rate during
the time of investment. All repurchase agreements must be collateralized by
United States Government or government agency securities, the market values of
which equal or exceed 102% of the principal amount of the repurchase obligation.
If an institution enters an insolvency proceeding, the resulting delay in
liquidation of securities serving as collateral could cause the Fund some loss
if the value of the securities declined before liquidation. To reduce the risk
of loss, the Fund will enter into repurchase agreements only with institutions
and dealers which the Board of Trustees considers creditworthy.

COMMERCIAL PAPER AND OTHER MONEY MARKET INSTRUMENTS. Commercial paper consists
of short-term (usually from one to two hundred-seventy days) unsecured
promissory notes issued by corporations in order to finance their current
operations. Certain notes may have floating or variable rates. Variable and
floating rate notes with a demand notice period exceeding seven days will be
subject to the Fund's restriction on illiquid investments unless, in the
judgment of the Sub-Adviser, such note is liquid.

The rating of Prime-1 is the highest commercial paper rating assigned by Moody's
Investors Service, Inc. Among the factors considered by Moody's in assigning
ratings are the following: valuation of the management of the issuer; economic
evaluation of the issuer's industry or industries and an appraisal of
speculative-type risks which may be inherent in certain areas; evaluation of the
issuer's products in relation to competition and customer acceptance; liquidity;
amount and quality of long-term debt; trend of earnings over a period of 10
years; financial strength of the parent company and the relationships which
exist with the issuer; and, recognition by the management of obligations which
may be present or may arise as a result of public interest questions and
preparations to meet such obligations. These factors are all considered in
determining whether the commercial paper is rated Prime-1. Commercial paper
rated A (highest quality) by Standard & Poor's Ratings Group has the following
characteristics: liquidity ratios are adequate to meet cash requirements;
long-term senior debt is rated "A" or better, although in some cases "BBB"
credits

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<PAGE>

may be allowed; the issuer has access to at least two additional channels of
borrowing; basic earnings and cash flow have an upward trend with allowance made
for unusual circumstances; typically, the issuer's industry is well established
and the issuer has a strong position within the industry; and, the reliability
and quality of management are unquestioned. The relative strength or weakness of
the above factors determines whether the issuer's commercial paper is rated A-1.

The Fund may invest in short-term bank debt instruments such as certificates of
deposit, bankers' acceptances and time deposits issued by national banks and
state banks, trust companies and mutual savings banks, or by banks or
institutions the accounts of which are insured by the Federal Deposit Insurance
Corporation or the Federal Savings and Loan Insurance Corporation. The Fund will
not invest in time deposits maturing in more than seven days if, as a result
thereof, more than 15% of the value of its net assets would be invested in such
securities and other illiquid securities.

CONVERTIBLE SECURITIES. The Fund may invest in convertible securities, that is,
bonds, notes, debentures, preferred stocks and other securities that are
convertible into or exchangeable for another security, usually common stock.
Convertible debt securities and convertible preferred stocks, until converted,
have general characteristics similar to both debt and equity securities.
Although to a lesser extent than with debt securities generally, the market
value of convertible securities tends to decline as interest rates increase and,
conversely, tends to increase as interest rates decline. In addition, because of
the conversion or exchange feature, the market value of convertible securities
typically increases or declines as the market value of the underlying common
stock increases or declines, although usually not to the same extent.
Convertible securities generally offer lower yields than non-convertible fixed
income securities of similar quality because of their conversion or exchange
features. Convertible bonds and convertible preferred stock typically have lower
credit ratings than similar non-convertible securities because they are
generally subordinated to other similar but non-convertible fixed income
securities of the same issuer.

RESTRICTED AND ILLIQUID SECURITIES. The Fund may invest up to 15% of its total
assets in illiquid securities. Securities may be illiquid because they are
unlisted, subject to legal restrictions on resale or due to other factors which,
in the Sub- Adviser's opinion, raise questions concerning the Fund's ability to
liquidate the securities in a timely and orderly way without substantial loss.
While such purchases may be made at an advantageous price and offer attractive
opportunities for investment not otherwise available on the open market, the
Fund may not have the same freedom to dispose of such securities as in the case
of the purchase of securities in the open market or in a public distribution.
These securities may often be resold in a liquid dealer or institutional trading
market, but the Fund may experience delays in its attempts to dispose of such
securities. If adverse market conditions develop, the Fund may not be able to
obtain as favorable a price as that prevailing at the time the decision is made
to sell. In any case, where a thin market exists for a particular security,
public knowledge of a proposed sale of a large block may depress the market
price of such securities.

PUT AND CALL OPTIONS

SELLING (OR WRITING) COVERED CALL OPTIONS. The Fund may sell (or write) covered
call options on portfolio securities to hedge against adverse movements in the
prices of these securities. A call option gives the buyer of the option, upon
payment of a premium, the right to call upon the writer to deliver a security on
or before a fixed date at a predetermined price, called the strike price. If the
price of the hedged security falls or remains below the strike price, the Fund
will not be asked to deliver the security; and the Fund will retain the premium
received for the option as additional income, offsetting all or part of any
decline in the value of the security. The hedge provided by writing covered call
options is limited to a price decline in the security of no more than the option
premium received by the Fund for writing the option. If the security owned by
the Fund appreciates above the options strike price, the Fund will generally be
called upon to deliver the security, which will prevent the Fund from receiving
the benefit of any price appreciation above the strike price.

BUYING CALL OPTIONS. The Fund may establish an anticipatory hedge by purchasing
call options on securities that the Fund intends to purchase to take advantage
of anticipated positive movements in the prices of these securities. When
establishing an anticipatory hedge, the Fund will deposit cash or cash
equivalents into a segregated account equal to the call option's exercise price.
The Fund will realize a gain from the exercise of a call option if, during the
option period, the price of the underlying security to be purchased increases by
more than the amount of the premium paid. A fund will realize a loss equal to
all or a part of the premium paid for the option if the price of the underlying
security decreases or does not increase by more than the premium.

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<PAGE>

PUT OPTIONS. The Fund may purchase put options on portfolio securities to hedge
against adverse movements in the prices of these securities. A put option gives
the buyer of the option, upon payment of a premium, the right to sell a security
to the writer of the option on or before a fixed date at a predetermined price.
The Fund will realize a gain from the exercise of a put option if, during the
option period, the price of the security declines by an amount greater than the
premium paid. The Fund will realize a loss equal to all or a part of the premium
paid for the option if the price of the security increases or does not decrease
by more than the premium.

CLOSING TRANSACTIONS. The Fund may dispose of an option written by the Fund by
entering into a "closing purchase transaction" for an identical option and may
dispose of an option purchased by the Fund by entering into a "closing sale
transaction" for an identical option. In each case, the closing transaction will
terminate the rights of the option holder and the obligations of the option
purchaser and will result in a gain or loss to the Fund based upon the relative
amount of the premiums paid or received for the original option and the closing
transaction. The Fund may sell (or write) put options solely for the purpose of
entering into closing sale transactions.

INDEX OPTIONS. The Fund may purchase and sell call options and purchase put
options on stock indices to manage cash flow, reduce equity exposure, or to
remain fully invested in equity securities. Options on securities indices are
similar to options on a security except that, upon the exercise of an option on
a securities index, settlement is made in cash rather than in specific
securities.

LIMITATIONS. The Fund will purchase and sell only options listed on a securities
exchange. The Fund will not purchase any option if, immediately afterwards, the
aggregate market value of all outstanding options purchased and written by the
Fund would exceed 5% of the Fund's total assets. The Fund will not write any
call options if, immediately afterwards, the aggregate value of the Fund's
securities subject to outstanding call options would exceed 25% of the value of
the Fund's total assets.

PORTFOLIO TURNOVER

The Fund's management buys and sell securities for the Fund to accomplish
investment objectives. The Fund's investment policy may lead to frequent changes
in investments, particularly in periods of rapidly changing markets. The Fund's
investments may also be traded to take advantage of perceived short-term
disparities in market values.

A change in the securities held by the Fund is known as "portfolio turnover."
For the fiscal year ended October 31, 1998, the Fund's portfolio turnover was
190%. For the period beginning October 1, 1997 and ending October 31, 1997,
turnover was 52%. For the fiscal years ended June 30, 1997 and 1996, the
turnover was 239% and 212%, respectively. A high portfolio turnover rate may
cause the Fund to pay higher transaction expenses, including more commissions
and markups, and also result in quicker recognition of capital gains, resulting
in more capital gain distributions that may be taxable to shareholders. Any
short term gain realized on securities will be taxed to shareholders as ordinary
income. See Tax Status.

PORTFOLIO TRANSACTIONS

For the fiscal periods shown below, the Fund paid brokerage fees as follows:

BROKERAGE
FISCAL PERIOD FEES
------------- ---------
November 1, 1997 to October 31, 1998 $651,369
October 1 through October 31, 1997 $169,743
Year ended September 30, 1997 $778,403
Year ended September 30, 1996 $613,522
October 17, 1994 (initial public offering)
through September 30, 1995 $99,587

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<PAGE>

market in the security, the price of the security, the financial condition and
execution capability of the broker or dealer (for a specified transaction and on
a continuing basis), the reasonableness of the commission, if any, and the
brokerage and research services provided. Under the Advisory and Sub-Advisory
agreements, the Adviser and Sub-Adviser are permitted, in certain circumstances,
to pay a higher commission than might otherwise be paid in order to acquire
brokerage and research services. The Adviser and Sub-Adviser must determine in
good faith, however, that such commission is reasonable in relation to the value
of the brokerage and research services provided -- viewed in terms of that
particular transaction or in terms of all the accounts over which investment
discretion is exercised. In such cases, the Board of Trustees will review the
commissions paid by the Fund to determine if the commissions paid over
representative periods are reasonable in relation to the benefits obtained. The
advisory fee of the Adviser would not be reduced because of its receipt of such
brokerage and research services. To the extent that any research services of
value are provided by broker dealers through or with whom the Fund places
portfolio transactions, the Adviser or Sub-Adviser may be relieved of expenses
which they might otherwise bear.

The Fund executes most of its transactions through a small group of broker-
dealers selected for their ability to provide brokerage and research services.
The Fund may occasionally purchase securities that are not listed on a national
securities exchange or quoted on Nasdaq-AMEX, but are instead traded in the
over-the-counter market. With respect to transactions executed in the
over-the-counter market, the Fund will usually deal through its selected
broker-dealers and pay a commission on such transactions. The Fund believes that
the execution and brokerage services it receives justify use of broker-dealers
in these over-the-counter transactions.

MANAGEMENT OF THE FUND

The Trust's Board of Trustees manages the business affairs of the Trust. The
Trustees establish policies and review and approve contracts and their
continuance. Trustees also elect the officers and select the Trustees to serve
as executive and audit committee members. The Trustees and Officers of the Trust
and their principal occupations during the past five years are set forth below.
Except as otherwise indicated, the business address of each is 7900 Callaghan
Road, San Antonio, Texas 78229.

TRUST
NAME AND ADDRESS POSITION AGE PRINCIPAL OCCUPATION
- ---------------- -------- --- -----------------------------------------

J. Michael Belz (1) Trustee 45 President and Chief Executive Officer of
1635 NE Loop 410 Catholic Life Insurance 1984 to present.
San Antonio, TX
78209

Richard E. Hughs Trustee Professor at the School of Business of
11 Dennin Drive the State University of New York at
Menands, NY Albany from 1990 to present; Dean, School
12204 of Business 1990-1994; Director of the
Institute for the Advancement of Health
Care Management, 1994-present. Corporate
Vice President, Sierra Pacific Resources,
Reno, NV, 1985-1990. Dean and Professor,
College of Business Administration,
University of Nevada, Reno, 1977-1985.
Associate Dean, Stern School of Business,
New York University, New York City,
1970-1977.

Clark R. Mandigo Trustee Business consultant since 1991. From 1985
1250 N.E. Loop 410 to 1991, President, Chief Executive
Suite 900 Officer, and Director of Intelogic Trace,
San Antonio, TX Inc., a nationwide company which sells,
78209 leases and maintains computers and tele-
communications systems and equipment.
Prior to 1985, President of BHP Petroleum
(Americas), Ltd., an oil and gas explora-
tion and development company. Director of
Palmer Wireless, Inc., Lone Star Steak
house & Saloon, Inc. and Physician
Corporation of America. Formerly a
Director of Datapoint Corporation.
Trustee for Pauze/Swanson United Services
Funds from November 1993 to February
1996.

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TRUST
NAME AND ADDRESS POSITION AGE PRINCIPAL OCCUPATION
- ---------------- -------- --- -----------------------------------------

Frank E. Holmes (2) Trustee, 43 Chairman of the Board of Directors and
President, Chief Executive Officer of the Adviser.
Chief Since October 1989 Mr. Holmes has served
Executive and continues to serve in various
Officer positions with the Adviser, its sub-
sidiaries and the investment companies it
sponsors. Director of Franc-Or Resource
Corp from November 1994 to November 1996.
Director of Adventure Capital Limited
from January 1996 to July 1997 and
Director of Vedron Gold, Inc. from August
1996 to March 1997. Director of 71316
Ontario, Inc. since April 1987 and of
F. E. Holmes Organization, Inc. since
July 1978. Director of Marleau, Lemire
Inc. from January 1995 to January 1996.
Director of United Services Canada, Inc.
since February 1995 and Chief Executive
Officer from February to August 1995.

Susan B. McGee Executive 39 Executive Vice President, Corporate
Vice Secretary and General Counsel of the
President, Adviser. Since September 1992 Ms. McGee
Secretary, has served and continues to serve in
General various positions with the Adviser, its
Counsel subsidiaries, and the investment
companies it sponsors.

David J. Clark Treasurer 37 Chief Financial Officer, Chief Operating
Officer of the Adviser. Chief Financial
Officer of U.S. Global Brokerage, Inc.,
the principal underwriter. Since May
1997 Mr. Clark has served and continues
to serve in various positions with the
Adviser and the investment companies it
sponsors. Foreign Service Officer with
U.S. Agency for International Development
in the U.S. Embassy, Bonn, West Germany
from May 1992 to May 1997. Audit
Supervisor for University of Texas Health
Science Center from April 1991 to April
1992. Auditor-in-Charge for Texaco, Inc.
from August 1987 to June 1990.

COMPENSATION TABLE

TOTAL COMPENSATION FROM U.S. GLOBAL
NAME FUND COMPLEX(1) TO BOARD MEMBERS
---- ------------------------------
Richard Hughs $16,000
Clark R. Mandigo $20,200
Frank E. Holmes $0

---------------------------
(1) Total compensation paid by U.S. Global Fund Complex for period ended
October 31, 1998. As of this date there were fifteen funds in the
complex. Messrs. Holmes and Mandigo serve on all fifteen funds.

PRINCIPAL HOLDERS OF SECURITIES

As of January ___, 1999, the officers and Trustees of the Trust, as a group,
owned less than 1% of the outstanding shares of the Fund. The Fund is aware of
the following person(s) owning of record, or beneficially, more than 5% of the
outstanding shares of the Fund as of January ___, 1999.

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Page 12

<PAGE>

NAME & ADDRESS OF OWNER % OWNED TYPE OF OWNERSHIP
----------------------- ------- -----------------
[BROKER NAME/ADDRESS] _____ Record(1)

(1) [BROKER NAME], broker-dealer, has advised that no individual client owns
more than 5% of the Fund.

INVESTMENT ADVISORY SERVICES

The investment adviser to the Funds is U.S. Global Investors, Inc., a Texas
corporation, pursuant to an advisory agreement dated September 21, 1994. Frank
E. Holmes, Chief Executive Officer and a Director of the Adviser, and Trustee,
President and Chief Executive Officer of the Trust, beneficially owns more than
25% of the outstanding voting stock of the Adviser and may be deemed to be a
controlling person of the Adviser.

In addition to the services described in the Fund's prospectus, the Adviser will
provide the Trust with office space, facilities and simple business equipment,
and will provide the services of executive and clerical personnel for
administering the affairs of the Trust. It will compensate all personnel,
officers, and Trustees of the Trust, if such persons are employees of the
Adviser or its affiliates, except that the Trust will reimburse the Adviser for
a part of the compensation of the Adviser's employees who perform certain legal
services for the Trust, including state securities law regulatory compliance
work, based upon the time spent on such matters for the Trust. The Trust paid
the Adviser $1,017,148 for the fiscal year ended October 31, 1998.

The Trust pays all other expenses for its operations and activities. The Fund
pays its allocable portion of these expenses. The expenses borne by the Trust
include the charges and expenses of any transfer agents and dividend disbursing
agents, custodian fees, legal and auditing expenses, bookkeeping and accounting
expenses, brokerage commissions for portfolio transactions, taxes, if any, the
advisory fee, extraordinary expenses, expenses of issuing and redeeming shares,
expenses of shareholder and Trustee meetings, expenses of preparing, printing
and mailing proxy statements, reports and other communications to shareholders,
expenses of registering and qualifying shares for sale, fees of Trustees who are
not "interested persons" of the Adviser, expenses of attendance by officers and
Trustees at professional meetings of the Investment Company Institute, the
No-Load Mutual Fund Association or similar organizations, and membership or
organization dues of such organizations, expenses of preparing, typesetting and
mailing prospectuses and periodic reports to current shareholders, fidelity bond
premiums, cost of maintaining the books and records of the Trust, and any other
charges and fees not specified.

The Trust and the Adviser, in connection with the Fund, have entered into a
sub-advisory agreement with Bonnel, Inc. ("Sub-Adviser"). In connection with
such services, the Adviser pays the Sub-Adviser a minimum sub-advisory fee of
$150,000 per year. When the Fund's assets exceed $30 million, the Adviser and
the Sub-Adviser will share the management fee equally; except that the
Sub-Adviser's fee will be subject to downward adjustments for: 1) the Adviser's
incurred costs and expenses of marketing the Fund that exceed the 0.25% 12b-1
fee charged to the Fund for such marketing purposes; 2) for any monies
previously received as a result of the minimum sub-advisory fee set forth above
and paid by the Adviser or the Trust before the Securities and Exchange
Commission ("SEC") declared the Fund's registration statement effective; 3) the
unrecovered costs of organizing the Fund up to $40,000 (the Adviser will be
responsible for bearing costs of organization of the Fund greater than $40,000);
and (4) if a decision is made with respect to placing a cap on expenses, to the
extent that actual expenses of the Fund exceed the cap, and the Adviser is
required to pay or absorb any of the excess expenses, by the amount of the
excess expenses paid or absorbed by the Adviser through such downward
adjustments. The Fund is not responsible for the Sub-Adviser's fee. The
management fee paid to the Sub-Adviser is paid by the Adviser out of its
management fee and does not increase the expenses of the Fund.

The Adviser may, out of profits derived from its management fee, pay certain
financial institutions (which may include banks, securities dealers, and other
industry professionals) a "servicing fee" for performing certain administrative
servicing functions for Fund shareholders to the extent these institutions are
allowed to do so by applicable statute, rule or regulation. These fees will be
paid periodically and will generally be based on a percentage of the value of
the institutions' client Fund shares. The Glass-Steagall Act prohibits banks
from engaging in the business of underwriting,

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<PAGE>

selling or distributing securities. However, in the Adviser's opinion, such laws
should not preclude a bank from performing shareholder administrative and
servicing functions as contemplated herein.

The Advisory Agreement was approved by the Board of Trustees of the Trust
(including a majority of the "disinterested Trustees") with respect to the Fund
and will be submitted for approval by shareholders of the Fund at the initial
meeting of shareholders. The Advisory Agreement provides that it will continue
initially for two years, and from year to year thereafter, with respect to each
fund, as long as it is approved at least annually by (i) a vote of a majority of
the outstanding voting securities of such fund (as defined in the Investment
Company Act of 1940 ["Act"]) or by the Board of Trustees of the Trust, and (ii)
a vote of a majority of the Trustees who are not parties to the Advisory
Agreement or "interested persons" of any party thereto cast in person at a
meeting called for the purpose of voting on such approval. The Advisory
Agreement may be terminated on 60-day written notice by either party and will
terminate automatically if it is assigned.

The Adviser provides investment advice to a variety of clients, including other
mutual funds. Investment decisions for each client are made with a view to
achieving their respective investment objectives. Investment decisions are the
product of many factors in addition to basic suitability for the particular
client involved. Thus, a particular security may be bought or sold for certain
clients even though it could have been bought or sold for other clients at the
same time. Likewise, a particular security may be bought for one or more clients
when one or more other clients are selling the security. In some instances, one
client may sell a particular security to another client. It also sometimes
happens that two or more clients simultaneously purchase or sell the same
security, in which event each day's transactions in such security are, as far as
possible, averaged as to price and allocated between such clients in a way that
in the Adviser's opinion is equitable to each and in accordance with the amount
being purchased or sold by each. There may be circumstances when purchases or
sales of portfolio securities for one or more clients will have an adverse
effect on other clients. The Adviser employs professional staffs of portfolio
managers who draw upon a variety of resources, for research information for the
clients.

In addition to advising client accounts, the Adviser invests in securities for
its own account. The Adviser has adopted policies and procedures intended to
minimize or avoid potential conflicts with its clients when trading for its own
account. The Adviser's investment objective and strategies are different from
those of its clients, emphasizing venture capital investing, private placement
arbitrage, and speculative short-term trading. The Adviser uses a diversified
approach to venture capital investing. Investments typically involve early-stage
businesses seeking initial financing as well as more mature businesses in need
of capital for expansion, acquisitions, management buyouts, or
recapitalizations. In general, the Adviser invests in start-up companies in the
natural resources or technology fields.

TRANSFER AGENCY AND OTHER SERVICES

The Transfer Agency Agreement with the Trust provides for each Fund to pay
United Shareholder Services, Inc. ("USSI") an annual fee of $23.00 per account
(1/12 of $23.00 monthly). In connection with obtaining and/or providing
administrative services to the beneficial owners of Trust shares through
broker-dealers, banks, trust companies and similar institutions which provide
such services and maintain an omnibus account with the Transfer Agent, each Fund
shall pay to the Transfer Agent a monthly fee equal to one-twelfth (1/12) of
12.5 basis points (.00125) of the value of the shares of the Funds held in
accounts at the institutions, which payment shall not exceed $1.92 multiplied by
the average daily number of accounts holding Trust shares at the institution.
These fees cover the usual transfer agency functions. In addition, the Funds
bear certain other Transfer Agent expenses such as the costs of record retention
and postage, plus the telephone and line charges (including the toll-free 800
service) used by shareholders to contact the Transfer Agent. For the fiscal year
ended October 31, 1998 the Fund paid USSI a total of $188,529 for transfer
agency, lockbox, and printing fees. For the year ended September 30, 1997, and
the period from October 1 through October 31, 1997, the Fund paid USSI a total
of $222,592 and $20,624, respectively, for transfer agency, lockbox, and
printing fees.

USSI maintained the books and records of the Trust and of each fund of the Trust
until November 1, 1997, at which time Brown Brothers Harriman and Co. assumed
such responsibility. For the year ended September 30, 1997, and the period from
October 1 through October 31, 1997, the Fund paid USSI a total of $59,632 and
$6,011, respectively, for portfolio accounting services.

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<PAGE>

A&B Mailers, Inc., a corporation wholly owned by the Adviser, provides the Trust
with certain mail handling services. The charges for such services have been
negotiated by the Audit Committee and A&B Mailers, Inc. Each service is priced
separately.

DISTRIBUTION PLAN

In September 1994, the Fund adopted a Distribution Plan pursuant to Rule 12b-1
of the 1940 Act ("Distribution Plan"). The Distribution Plan allows the Fund to
pay for or reimburse expenditures in connection with sales and promotional
services related to the distribution of Fund shares, including personal services
provided to prospective and existing Fund shareholders, which includes the costs
of: printing and distribution of prospectuses and promotional materials, making
slides and charts for presentations, assisting shareholders and prospective
investors in understanding and dealing with the Fund, and travel and
out-of-pocket expenses (e.g., copy and long distance telephone charges) related
thereto.

The total amount expended pursuant to the Distribution Plan may not exceed 0.25%
of the Fund's net assets annually. For the fiscal year ended October 31, 1998,
the Fund paid a total of $254,288 in distribution fees. Distribution expenses
paid by the Adviser or other third parties in prior periods that exceeded 0.25%
of net assets may be paid by the Fund with distribution expenses accrued
pursuant to the 12b-1 Distribution Plan in the current or future periods if the
0.25% limitation is never exceeded.

Expenses that the Fund incurs pursuant to the Distribution Plan are reviewed
quarterly by the Board of Trustees. The Distribution Plan is reviewed annually
by the Board of Trustees as a whole, and the Trustees who are not "interested
persons" as that term is defined in the 1940 Act and who have no direct or
indirect financial interest in the operation of the Distribution Plan
("Qualified Trustees"). In their review of the Distribution Plan the Board of
Trustees, as a whole, and the Qualified Trustees determine whether, in their
reasonable business judgment and considering their fiduciary duties under state
law and under Section 36(a) and (b) of the 1940 Act, there is reasonable
likelihood that the Distribution Plan will benefit the Fund and its
shareholders. The Distribution Plan may be terminated anytime by a majority vote
of the Qualified Trustees, or by a majority vote of the outstanding voting
securities of the Fund.

The Fund is unaware of any Trustee or any interested person of the Fund who had
a direct or indirect financial interest in the operations of the Distribution
Plan.

The Fund expects that the Distribution Plan will be used primarily to pay a
"service fee" to persons who provide personal services to prospective and
existing Fund shareholders. Shareholders of the Fund will benefit from these
personal services, and the Fund expects to benefit from economies of scale as it
attracts more shareholders.

Beginning September 3, 1998, U.S. Global Brokerage, Inc., a subsidiary of the
Adviser, commenced marketing the Fund and distributing shares through selling
brokers, financial planners and other financial representatives.

CERTAIN PURCHASES OF SHARES OF THE FUND

The following information supplements the discussion of how to buy Fund shares
as discussed in the Fund's prospectus.

Shares of the Fund are continuously offered by the Trust at their net asset
value next determined after an order is accepted. The methods available for
purchasing shares of the Fund are described in the Prospectus. In addition,
shares of the Fund may be purchased using stock, so long as the securities
delivered to the Trust meet the investment objectives and concentration policies
of the Fund and are otherwise acceptable to the Adviser, which reserves the
right to reject all or any part of the securities offered in exchange for shares
of the Fund. On any such "in kind" purchase, the following conditions will
apply:

1. the securities offered by the investor in exchange for shares of the Fund
must not be restricted in any way as to resale or be otherwise illiquid;

2. securities of the same issuer must already exist in the Fund's portfolio;

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Statement of Additional Information - Bonnel Growth Fund
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<PAGE>

3. the securities must have a value that is readily ascertainable (and not
established only by evaluation procedures) as evidenced by a listing on the
NYSE, or Nasdaq-AMEX;

4. any securities so acquired by the Fund will not comprise more than 5% of
the Fund's net assets at the time of such exchange;

5. no over-the-counter securities will be accepted unless the principal
over-the-counter market is in the United States; and

6. the securities are acquired for investment and not for resale.

The Trust believes that this ability to purchase shares of the Fund using
securities provides a means by which holders of certain securities may obtain
diversification and continuous professional management of their investments
without the expense of selling those securities in the public market.

An investor who wishes to make an "in kind" purchase should furnish (either in
writing or by telephone) a list to the Trust with a full and exact description
of all of the securities he or she proposes to deliver. The Trust will advise
him or her as to those securities it is prepared to accept and will provide the
investor with the necessary forms to be completed and signed by the investor.
The investor should then send the securities, in proper form for transfer, with
the necessary forms to the Trust and certify that there are no legal or
contractual restrictions on the free transfer and sale of the securities. The
securities will be valued as of the close of business on the day of receipt by
the Trust in the same manner as portfolio securities of the Fund are valued. See
the section entitled Net Asset Value the prospectus. The number of shares of the
Fund, having a net asset value as of the close of business on the day of receipt
equal to the value of the securities delivered by the investor, will be issued
to the investor, less applicable stock transfer taxes, if any.

The exchange of securities by the investor pursuant to this offer is a taxable
transaction and may result in a gain or loss for federal income tax purposes.
Each investor should consult his or her tax adviser to determine the tax
consequences under Federal and state law of making such an "in kind" purchase.

ADDITIONAL INFORMATION ON REDEMPTIONS

The following information supplements the discussion of how to redeem Fund
shares as discussed in the Fund's prospectus.

SUSPENSION OF REDEMPTION PRIVILEGES. The Trust may suspend redemption privileges
or postpone the date of payment for up to seven days, but cannot do so for more
than seven days after the redemption order is received except during any period
(1) when the NYSE is closed, other than customary weekend and holiday closings,
or trading on the Exchange is restricted as determined by the SEC; (2) when an
emergency exists, as defined by the SEC, which makes it not practicable for the
Trust to dispose of securities owned by it or to determine fairly the value of
its assets; or (3) as the SEC may otherwise permit.

CALCULATION OF PERFORMANCE DATA

TOTAL RETURN. The Fund may advertise performance in terms of average annual
total return for 1-, 5- and 10-year periods, or for such lesser periods as the
Fund has been in existence. Average annual total return is computed by finding
the average annual compounded rates of return over the periods that would equate
the initial amount invested to the ending redeemable value, according to the
following formula:

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<PAGE>

P(1+T) SUP n = ERV

Where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical
$1,000 payment made at the beginning of the
1-, 5- or 10-year periods at the end of the
year or period.

The calculation assumes that (a) all charges are deducted from the initial
$1,000 payment, (b) all dividends and distributions by the Fund are reinvested
at the price stated in the prospectus on the reinvestment dates during the
period and (c) all recurring fees charged to all shareholder accounts are
included.

The annual total return for the Fund follows:

AVERAGE ANNUAL TOTAL
FISCAL PERIOD RETURN
------------- --------------------
November 1, 1997 through October 31, 1998 0.80%
October 1 through October 31, 1997 (09.97)%
Year ended September 30, 1997 28.67%
Year ended September 30, 1996 21.27%
October 17, 1994 (initial public offering)
through September 30, 1995 48.74% *

-------------
* Not annualized

NONSTANDARDIZED TOTAL RETURN. The Fund may provide the above described standard
total return results for a period that ends not earlier than the most recent
calendar quarter end and begins either twelve months before or at the time of
commencement of the Fund's operations. In addition, the Fund may provide
nonstandardized total return results for differing periods, such as for the most
recent six months. Such nonstandardized total return is computed as otherwise
described under Total Return except that no annualization is made.

EFFECT OF FEE WAIVER AND EXPENSE REIMBURSEMENT. From October 17, 1994 (initial
public offering), through September 30, 1995, the Fund's expense ratio was
2.48%. If the Adviser had not subsidized the Fund's expenses, the expense ratio
subject to the most restrictive state limitation would have been 2.50%. Because
its expenses were subsidized, the Fund's investment performance, including
annual compound rate of return, was improved. The Adviser is not obligated to
continue subsidizing the Fund's expenses in the future.

TAX STATUS

TAXATION OF THE FUND--IN GENERAL. As stated in its Prospectus, the Fund intends
to qualify as a "regulated investment company" under Subchapter M of the
Internal Revenue Code of 1986, as amended ("Code"). Accordingly, the Fund will
not be liable for Federal income taxes on its taxable net investment income and
capital gain net income distributed to shareholders if the Fund distributes at
least 90% of its net investment income and net short-term capital gain for the
taxable year.

To qualify as a regulated investment company, the Fund must, among other things,
(a) derive in each taxable year at least 90% of its gross income from dividends,
interest, payments with respect to securities loans, gains from the sale or
other disposition of stock, securities or foreign currencies, or other income
derived with respect to its business of investing in such stock, securities or
currencies ("90% test"); and (b) satisfy certain diversification requirements at
the close of each quarter of the Fund's taxable year.

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<PAGE>

(3) any portion (not taxable to the Fund) of the respective balance from the
preceding calendar year. The Fund intends to make such distributions as are
necessary to avoid imposition of this excise tax.

TAXATION OF THE FUND'S INVESTMENTS. The Fund's ability to make certain
investments may be limited by provisions of the Code that require inclusion of
certain unrealized gains or losses in the Fund's income for purposes of the 90%
test and the distribution requirements of the Code, and by provisions of the
Code that characterize certain income or loss as ordinary income or loss rather
than capital gain or loss. Such recognition, characterization and timing rules
generally apply to investments in certain forward currency contracts, foreign
currencies and debt securities denominated in foreign currencies.

TAXATION OF THE SHAREHOLDER. Taxable distributions generally are included in a
shareholder's gross income for the taxable year in which they are received.
However, dividends declared in October, November, or December and paid to
shareholders of record in such a month, will be deemed to have been received
December 31, if the Fund pays the dividends during the following January.

Distributions by the Fund will result in a reduction in the fair market value of
the Fund's shares. Should a distribution reduce the fair market value below a
shareholder's cost basis, such distribution nevertheless would be taxable to the
shareholder as ordinary income or long-term capital gain, even though, from an
investment standpoint, it may constitute a partial return of capital. In
particular, investors should be careful to consider the tax implications of
buying shares of the Fund just before a distribution. The price of shares
purchased then includes the amount of any forthcoming distribution. Investors
purchasing the Fund's shares immediately before a distribution may receive a
return of investment upon distribution that will nevertheless be taxable to
them.

A shareholder of the Fund should be aware that a redemption of shares (including
any exchange into other funds offered, affiliated or administered by U.S. Global
Investors, Inc.) is a taxable event and, accordingly, a capital gain or loss may
be recognized. If a shareholder of the Fund receives a distribution taxable as
long-term capital gain with respect to shares of the Fund and redeems or
exchanges shares before he has held them for more than six months, any loss on
the redemption or exchange (not otherwise disallowed as attributable to an
exempt-interest dividend) will be treated as long-term capital loss to the
extent of the long-term capital gain recognized.

CUSTODIAN, FUND ACCOUNTANT AND ADMINISTRATOR

Beginning November 1997 Brown Brothers Harriman & Co. began serving as
custodian, fund accountant and administrator for all funds of the Trust. With
respect to the Funds owning foreign securities, Brown Brothers Harriman & Co.
may hold securities outside the United States pursuant to sub-custody
arrangements separately approved by the Trust. Prior to November, Bankers Trust
Company provided custody services and USSI provided fund accounting and
administrative services. Services with respect to retirement accounts will be
provided by Security Trust and Financial Company of San Antonio, Texas, a wholly
owned subsidiary of the Adviser.

UNDERWRITER/DISTRIBUTOR

U.S. Global Brokerage, Inc., 7900 Callaghan Road, San Antonio, Texas 78229, is
the principal underwriter and exclusive agent for distribution of shares of the
Fund. The distributor is obligated to sell the shares of the Funds on a
best-efforts basis only against purchase orders for the shares. Shares of the
Fund are offered on a continuous basis. David J. Clark is the Chief Financial
Officer of the underwriter and Treasurer of the Trust. Elias Suarez is Vice
President of both the underwriter and the Trust.

INDEPENDENT ACCOUNTANTS

PricewaterhouseCoopers LLP, 160 Federal Street, Boston, Massachusetts 02110 is
the independent accountant for the Trust.

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<PAGE>

FINANCIAL STATEMENTS

The financial statements for the fiscal year ended October 31, 1998 are hereby
incorporated by reference from the U.S. Global Accolade Funds 1998 Annual Report
to Shareholders of that date that accompanies this Statement of Additional
Information. If not included, the Trust will promptly provide a copy, free of
charge, upon request to: U.S. Global Investors, Inc., P.O. Box 29467, San
Antonio, Texas 78229-0467, 1-800-873-8637 or (210) 308-1234.

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Statement of Additional Information - Bonnel Growth Fund
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================================================================================
================================================================================

U.S. GLOBAL ACCOLADE FUNDS

MegaTrends Fund

Statement of Additional Information

This Statement of Additional Information is not a prospectus, but should be read
in conjunction with the current prospectus ("Prospectus") dated March 1, 1999.
The financial statements for the MegaTrends Fund for the year ended October 31,
1998, and the Report of Independent Auditors thereon, are incorporated by
reference from the Fund's Annual Report dated October 31, 1998. Copies of the
Prospectus and the Fund's financial statements may be requested from U.S. Global
Investors, Inc. ("Adviser"), 7900 Callaghan Road, San Antonio, Texas 78229 or
1-800-US-FUNDS (1-800-873-8637).

The date of this Statement of Additional Information is March 1, 1999.

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<PAGE>

TABLE OF CONTENTS
PAGE

GENERAL INFORMATION............................................................3

FUND POLICIES..................................................................3

INVESTMENT STRATEGIES AND RISKS................................................5

PORTFOLIO TURNOVER............................................................10

PORTFOLIO TRANSACTIONS........................................................11

MANAGEMENT OF THE FUND........................................................12

PRINCIPAL HOLDERS OF SECURITIES...............................................14

INVESTMENT ADVISER............................................................14

TRANSFER AGENCY AND OTHER SERVICES............................................16

DISTRIBUTION PLAN.............................................................16

CERTAIN PURCHASES OF SHARES OF THE FUND.......................................17

ADDITIONAL INFORMATION ON REDEMPTIONS.........................................18

CALCULATION OF PERFORMANCE DATA...............................................18

TAX STATUS....................................................................19

CUSTODIAN, FUND ACCOUNTANT AND ADMINISTRATOR..................................20

UNDERWRITER/DISTRIBUTOR.......................................................20

FINANCIAL STATEMENTS..........................................................20

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Statement of Additional Information - MegaTrends Fund
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<PAGE>

GENERAL INFORMATION

U.S. Global Accolade Funds ("Trust") is an open-end management investment
company and a business trust organized April 16, 1993, under the laws of the
Commonwealth of Massachusetts. The MegaTrends Fund ("Fund") is a series of the
Trust and represents a separate, diversified portfolio of securities
("Portfolio"). The Fund commenced operations on October 21, 1991, and became a
series of the Trust on November 16, 1996, pursuant to a plan of reorganization.

The Trust's Master Trust Agreement provides that no annual or regular meeting of
shareholders is required. Thus, there will ordinarily be no shareholder meetings
unless otherwise required by the Investment Company Act of 1940. The trustees
serve for six-year terms.

Shares have no preemptive or subscription rights and are fully transferable.
There are no conversion rights.

FUND POLICIES

The following information supplements the discussion of the Fund's investment
objectives and policies discussed in the Fund's prospectus.

The MegaTrends Fund may not change any of the following investment restrictions
without the affirmative vote of a majority of the outstanding voting securities
of the Fund which, as used here, means the lesser of (1) 67% of the Fund's
outstanding shares present at a meeting at which more than 50% of the
outstanding shares of the Fund are represented either in person or by proxy or
(2) more than 50% of the Fund's outstanding shares.

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<PAGE>

The Fund may not:

1. Invest in securities of any one issuer if immediately after and as a result
of such investment more than 5% of the total assets of the Fund, at market
value, would be invested in the securities of such issuer. This restriction
does not apply to investments in securities of the United States
Government, its agencies or instrumentalities.

2. Purchase more than 10% of the outstanding voting securities, or any class
of securities, of any one issuer. This restriction does not apply to
investments in securities of the United States Government, its agencies or
instrumentalities.

3. Invest more than 25% of its total assets in the securities of issuers in
any particular industry. This restriction does not apply to investments in
securities of the United States Government, its agencies or
instrumentalities.

4. Purchase securities of other investment companies, except in connection
with a merger, consolidation, acquisition or reorganization.

5. Purchase or sell commodities or real estate. However, the Fund may invest
in publicly traded securities secured by real estate or issued by companies
which invest in real estate or real estate interests.

6. Purchase securities on margin, make short sales of securities or maintain a
short position, except that the Fund may obtain such short-term credit as
may be necessary for the clearance of purchases and sales of portfolio
securities. This restriction on short sales does not apply to short sales
"against the box" (i.e., when the Fund owns or is long on the securities
sold short).

7. Lend money, except by engaging in repurchase agreements or by purchasing
publicly distributed or privately placed debt obligations in which the Fund
may invest consistent with its investment objectives and policies. The Fund
may make loans of its portfolio securities in an aggregate amount not
exceeding 25% of its total assets, provided that such loans are
collateralized by cash or cash equivalents or U.S. Government obligations
in an amount equal to the market value of the securities loaned, marked to
market on a daily basis.

8. Borrow money, except for (i) temporary bank borrowings not in excess of 5%
of the value of the Fund's total assets for emergency or extraordinary
purposes, or (ii) short-term credits not in excess of 5% of the value of
the Fund's total assets as may be necessary for the clearance of securities
transactions.

9. Issue senior securities as defined in the Investment Company Act of 1940,
as amended, or mortgage, pledge, hypothecate or in any way transfer as
security for indebtedness any securities owned or held by the Fund except
as may be necessary in connection with borrowings described in (8) above,
and then not exceeding 10% of the Fund's total assets, taken at the lesser
of cost or market value.

10. Underwrite securities of other issuers except to the extent the Fund may be
deemed an underwriter under the Securities Act of 1933, as amended, in
selling portfolio securities.

11. Invest more than 10% of its net assets in securities which are illiquid.

12. Invest in oil, gas or other mineral leases.

13. Invest more than 5% of its net assets in warrants and will not invest more
than 2% of its net assets in warrants which are not listed on the New York
or American Stock Exchange. This restriction does not apply to investment
in warrants acquired in units or attached to securities.

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<PAGE>

The following investment restrictions may be changed by the Board of Trustees
without a shareholder vote.

The Fund may not:

1. Pledge, mortgage or hypothecate the assets of the Fund.

2. Engage in short sales of securities except for "against the box" as
described in investment limitation 6.

3. Loan its portfolio securities.

INVESTMENT STRATEGIES AND RISKS

The following information supplements the discussion of the Fund's investment
strategies and risks in the Fund's prospectus.

MARKET RISK. Investments in equity and debt securities are subject to inherent
market risks and fluctuations in value due to earnings, economic conditions,
quality ratings and other factors beyond the Sub-Adviser's control. Therefore,
the return and net asset value of the Funds will fluctuate.

REAL ESTATE INVESTMENT TRUSTS. The Fund may invest in real estate investment
trusts ("REIT"), which may subject the Fund to many of the same risks related to
the direct ownership of real estate. These risks may include declines in the
value of real estate, risks related to economic factors, changes in demand for
real estate, change in property taxes and property operating expenses, casualty
losses, and changes to zoning laws. REITs are also dependent to some degree on
the capabilities of the REIT manager. In addition, the failure of a REIT to
continue to qualify as a REIT for tax purposes would have an adverse effect upon
the value of a portfolio's investment in that REIT.

FOREIGN INVESTMENTS. Subject to the Fund's investment policies and quality
standards, the Fund may invest in securities of foreign issuers. Investing in
securities issued companies whose principal business activities are outside the
United States may involve significant risks not present in domestic investments.
For example, there is generally less publicly available information about
foreign companies, particularly those not subject to the disclosure and
reporting requirements of the United States securities laws. Foreign issuers are
generally not bound by uniform accounting, auditing, and financial reporting
requirements and standards of practice comparable to those applicable to
domestic issuers. Investments in foreign securities also involve the risk of
possible adverse changes in investment or exchange control regulations,
expropriation or confiscatory taxation, limitation of the removal of funds or
the assets of the Fund, political or financial instability or diplomatic and
other developments that could affect such investment. Further, economies of
particular countries or areas of the world may differ favorably or unfavorably
from the economy of the United States. It is anticipated that in most cases the
best available market for foreign securities will be on exchanges or in
over-the-counter markets located outside of the United States. Foreign stock
markets, while growing in volume and sophistication, are generally not as
developed as those in the United States, and securities of some foreign issuers
(particularly those located in developing countries) may be less liquid and more
volatile than securities of comparable United States companies. In addition,
foreign brokerage commissions are generally higher than commissions on
securities traded in the United States and may be non-negotiable. In general,
there is less overall governmental supervision and regulation of foreign
securities markets, broker/dealers, and issuers than in the United States.

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<PAGE>

unsponsored ADRs are not obligated to disclose material information in the
United States; therefore, there may be less information available regarding such
issuers. There may not be a correlation between such information and the market
value of the ADRs. For purposes of the Fund's investment policies, the Fund's
investment in ADRs will be deemed to be investments in the underlying
securities.

WARRANTS AND RIGHTS. Warrants are options to purchase equity securities at a
specified price and are valid for a specific time period. Rights are similar to
warrants, but normally have a short duration and are distributed by the issuer
to its shareholders. The Fund may realize a loss equal to all or a portion of
the price paid for the warrants or rights if the price of the underlying
security decreases or does not increase by more than the amount paid for the
warrants or rights. The Fund may purchase warrants and rights, provided that the
Fund does not invest more than 5% of its net assets at the time of purchase in
warrants and rights other than those that have been acquired in units or
attached to other securities. Of such 5%, no more than 2% of the Fund's assets
at the time of purchase may be invested in warrants which are not listed on
either the New York Stock Exchange("NYSE") or the Nasdaq-American Stock Exchange
("Nasdaq-AMEX").

GOVERNMENT AND CORPORATE DEBT. U.S. Government obligations include securities
which are issued or guaranteed by the United States Treasury, by various
agencies of the United States Government, and by various instrumentalities
which have been established or sponsored by the United States Government.
U.S. Treasury obligations are backed by the "full faith and credit" of the U.S.
Government. U.S. Treasury obligations include Treasury bills, Treasury notes and
Treasury bonds. Agencies or instrumentalities established by the United States
Government include the Federal Home Loan Bank, the Federal Land Bank, the
Government National Mortgage Association, the Federal National Mortgage
Association, the Federal Home Loan Mortgage Corporation, and the Student Loan
Marketing Association.

Also included are the Bank for Cooperatives, the Federal Intermediate Credit
Bank, the Federal Financing Bank, the Federal Farm Credit Bank, the Federal
Agricultural Mortgage Corporation, the Resolution Funding Corporation, the
Financing Corporation of America and the Tennessee Valley Authority. Some of
these securities are supported by the full faith and credit of the United States
Government while others are supported only by the credit of the agency or
instrumentality, which may include the right of the issuer to borrow from the
United States Treasury.

QUALITY RATINGS OF CORPORATE BONDS. The ratings of Moody's Investors Service,
Inc. and Standard & Poor's Ratings Group for corporate bonds in which the Fund
may invest are as follows:

MOODY'S INVESTORS SERVICE, INC. Aaa - Bonds which are rated Aaa are
judged to be of the best quality. They carry the smallest degree of
investment risk and are generally referred to as "gilt edge." Interest
payments are protected by a large or an exceptionally stable margin,
and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely
to impair the fundamentally strong position of such issues.

Aa - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what is generally
known as high grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities
or fluctuation of protective elements may be of greater amplitude or
there may be other elements present which make the long-term risks
appear somewhat larger than in Aaa securities.

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<PAGE>

A - Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper medium grade obligations.
Factors giving security to principal and interest are considered
adequate but elements may be present which suggest a susceptibility to
impairment sometime in the future.

Baa - Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly
secured. Interest payments and principal security appear adequate for
the present but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such bonds
lack outstanding investment characteristics and in fact have
speculative characteristics as well.

Ba - Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection
of interest and principal payments may be very moderate and thereby not
well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.

B - Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or
of maintenance of other terms of the contract over any long period of
time may be small.

STANDARD & POOR'S RATINGS GROUP. AAA - Bonds rated AAA have the highest
rating assigned by Standard & Poor's to a debt obligation. Capacity to
pay interest and repay principal is extremely strong.

AA - Bonds rated AA have a very strong capacity to pay interest and
repay principal and differ from the highest rated issues only in small
degree.

A - Bonds rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than bonds
in higher rated categories.

BBB - Bonds rated BBB are regarded as having an adequate capacity to
pay interest and repay principal. Whereas they normally exhibit
adequate protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for bonds in this category than for bonds
in higher rated categories.

BB and B - Bonds rated BB and B are regarded, on balance, as
predominantly speculative with respect to capacity to pay interest and
repay principal in accordance with the terms of the obligation. BB
indicates the lowest degree of speculation and B the higher degree of
speculation. While such bonds will likely have some quality and
protective characteristics, these are outweighed by large uncertainties
or major risk exposures to adverse conditions.

RISK FACTORS OF LOWER-RATED SECURITIES. Lower-rated debt securities (commonly
called "junk bonds") may be subject to certain risk factors to which other
securities are not subject to the same degree. An economic downturn tends to
disrupt the market for lower-rated bonds and adversely affect their values. Such
an economic downturn may be expected to result in increased price volatility of
lower-rated bonds and of the value of the Fund's shares, and an increase in
issuers' defaults on such bonds.

Also, many issuers of lower-rated bonds are substantially leveraged, which may
impair their ability to meet their obligations. In some cases, the securities in
which the Fund invests are subordinated to the prior payment of senior
indebtedness, thus potentially limiting the Fund's ability to recover full
principal or to receive payments when senior securities are in default.

The credit rating of a security does not necessarily address its market value
risk. Also, ratings may, from time to time, be changed to reflect developments
in the issuer's financial condition. Lower-rated securities held by the Fund
have speculative characteristics which are apt to increase in number and
significance with each lower rating category.

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<PAGE>

When the secondary market for lower-rated bonds becomes increasingly illiquid,
or in the absence of readily available market quotations for lower-rated bonds,
the relative lack of reliable, objective data makes the responsibility of the
Trustees to value such securities more difficult, and judgment plays a greater
role in the valuation of portfolio securities. Also, increased illiquidity of
the market for lower-rated bonds may affect the Fund's ability to dispose of
portfolio securities at a desirable price.

In addition, if the Fund experiences unexpected net redemptions, it could be
forced to sell all or a portion of its lower- rated bonds without regard to
their investment merits, thereby decreasing the asset base upon which the Fund's
expenses can be spread and possibly reducing the Fund's rate of return. Also,
prices of lower-rated bonds have been found to be less sensitive to interest
rate changes and more sensitive to adverse economic changes and individual
corporate developments than more highly rated investments. Certain laws or
regulations may have a material effect on the Fund's investments in lower-rated
bonds.

COMMERCIAL PAPER AND OTHER MONEY MARKET INSTRUMENTS. Commercial paper consists
of short-term (usually from one to two hundred-seventy days) unsecured
promissory notes issued by corporations in order to finance their current
operations. The Fund will only invest in commercial paper rated A-1 by Standard
& Poor's Ratings Group or Prime-1 by Moody's Investors Service, Inc. or unrated
paper of issuers who have outstanding unsecured debt rated AA or better by
Standard & Poor's or Aa or better by Moody's. Certain notes may have floating or
variable rates. Variable and floating rate notes with a demand notice period
exceeding seven days will be subject to the Fund's restriction on illiquid
investments (see Investment Limitations) unless, in the judgment of the Adviser,
such note is liquid.

The Fund may invest in short-term bank debt instruments such as certificates of
deposit, bankers' acceptances and time deposits issued by national banks and
state banks, trust companies and mutual savings banks, or by banks or
institutions the accounts of which are insured by the Federal Deposit Insurance
Corporation or the Federal Savings and Loan Insurance Corporation. The Fund will
only invest in bankers' acceptances of banks having a short-term rating of A-1
by Standard & Poor's Ratings Group or Prime-1 by Moody's Investors Service, Inc.
The Fund will not invest in time deposits maturing in more than seven days if,
as a result thereof, more than 10% of the value of its net assets would be
invested in such securities and other illiquid securities.

REPURCHASE AGREEMENTS. The Fund may invest part of its assets in repurchase
agreements with domestic broker-dealers, banks and other financial institutions,
provided the Fund's custodian always has possession of securities serving
as collateral or has evidence of book entry receipt of such securities. In a
repurchase agreement, the Fund purchases securities subject to the seller's
agreement to repurchase such securities at a specified time (normally one day)
and price. The repurchase price reflects an agreed-upon interest rate during
the time of investment. All repurchase agreements must be collateralized by
United States Government or government agency securities, the market values of
which equal or exceed 102% of the principal amount of the repurchase obligation.
If an institution enters an insolvency proceeding, the resulting delay in
liquidation of securities serving as collateral could cause the Fund some loss
if the value of the securities declined before liquidation. To reduce the
risk of loss, the Fund will enter into repurchase agreements only with institu-
tions and dealers which the Board of Trustees considers creditworthy.

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<PAGE>

WHEN-ISSUED SECURITIES. The Fund will only make commitments to purchase
securities on a when-issued basis with the intention of actually acquiring the
securities. In addition, the Fund may purchase securities on a when-issued basis
only if delivery and payment for the securities take place within 120 days after
the date of the transaction. In connection with these investments, the Fund will
direct the custodian to place cash, U.S. Government obligations or high-grade
debt instruments in a segregated account in an amount sufficient to make payment
for the securities to be purchased. When a segregated account is maintained
because the Fund purchases securities on a when-issued basis, the assets
deposited in the segregated account will be valued daily at market for the
purpose of determining the adequacy of the securities in the account. If the
market value of such securities declines, additional cash or securities will be
placed in the account on a daily basis so that the market value of the account
will equal the amount of the Fund's commitments to purchase securities on a
when-issued basis. To the extent funds are in a segregated account, they will
not be available for new investment or to meet redemptions. Securities purchased
on a when-issued basis and the securities held in the Fund's portfolio are
subject to changes in market value based upon changes in the level of interest
rates (which will generally result in all of those securities changing in value
in the same way; i.e., all those securities experiencing appreciation when
interest rates decline and depreciation when interest rates rise). Therefore, if
in order to achieve higher returns, the Fund remains substantially fully
invested at the same time that it has purchased securities on a when-issued
basis, there will be a possibility that the market value of the Fund's assets
will experience greater fluctuation. The purchase of securities on a when-issued
basis may involve a risk of loss if the broker-dealer selling the securities
fails to deliver after the value of the securities has risen.

When the time comes for the Fund to make payment for securities purchased on a
when-issued basis, the Fund will do so by using then available cash flow, by
sale of the securities held in the segregated account, by sale of other
securities or, although it would not normally expect to do so, by directing the
sale of the securities purchased on a when-issued basis themselves (which may
have a market value greater or less than the Fund's payment obligation).
Although the Fund will only make commitments to purchase securities on a
when-issued basis with the intention of actually acquiring the securities, the
Fund may sell these securities before the settlement date if it is deemed
advisable by the Adviser or Sub-Adviser as a matter of investment strategy.

ZERO COUPON SECURITIES. The Fund may invest in zero coupon securities that pay
no cash income and are sold at substantial discounts from their value at
maturity. When held from issuance to maturity, their entire income, consisting
of accretion of discount, comes from the difference between the issue price and
their value at maturity. Zero coupon securities are subject to greater market
value fluctuations from changing interest rates than debt obligations of
comparable maturities that make current cash distributions of interest.

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<PAGE>

borrower must agree to maintain collateral marked to market daily, in the form
of cash or U.S. Government obligations, with the Fund's custodian in an amount
at least equal to the market value of the loaned securities. It is the Fund's
policy, which may not be changed without the affirmative vote of a majority of
its outstanding shares, that such loans will not be made if as a result the
aggregate of all outstanding loans exceeds 25% of the value of the Fund's total
assets.

Under applicable regulatory requirements (which are subject to change), the loan
collateral must, on each business day, at least equal the value of the loaned
securities. To be acceptable as collateral, letters of credit must obligate a
bank to pay amounts demanded by the Fund if the demand meets the terms of the
letter. Such terms and the issuing bank must be satisfactory to the Fund. The
Fund receives amounts equal to the dividends or interest on loaned securities
and also receives one or more of (a) negotiated loan fees, (b) interest on
securities used as collateral, or (c) interest on short-term debt securities
purchased with such collateral; either type of interest may be shared with the
borrower. The Fund may also pay fees to placing brokers as well as custodian and
administrative fees in connection with loans. Fees may only be paid to a placing
broker provided that the Trustees determine that the fee paid to the placing
broker is reasonable and based solely upon services rendered, that the Trustees
separately consider the propriety of any fee shared by the placing broker with
the borrower, and that the fees are not used to compensate the Adviser or any
affiliated person of the Fund or an affiliated person of the Adviser or other
affiliated person. The terms of the Fund's loans must meet applicable tests
under the Internal Revenue Code and permit the Fund to reacquire loaned
securities on five days' notice or in time to vote on any important matter.

BORROWING. The Fund may have to deal with unpredictable cashflows as
shareholders purchase and redeem shares. Under adverse conditions, the Fund
might have to sell portfolio securities to raise cash to pay for redemptions at
a time when investment considerations would not favor such sales. In addition,
frequent purchases and sales of portfolio securities tend to decrease Fund
performance by increasing transaction expenses.

The Fund will not purchase any security while borrowings represent more than 5%
of total assets.

PORTFOLIO TURNOVER

The Fund does not intend to use short-term trading as a primary means of
achieving its investment objectives. However, the Fund's rate of portfolio
turnover will depend on market and other conditions, and it will not be a
limiting factor when portfolio changes are deemed necessary or appropriate by
the Sub-Adviser. For the fiscal years ended October 31, 1998, October 31, 1997,
and June 30, 1997, the Fund's portfolio turnover was 51%, 13%, and 62%,
respectively. Although the annual portfolio turnover rate of the Fund cannot be
accurately predicted, it will likely be between 75% and 150%, but may be either
higher or lower. High turnover involves correspondingly greater commission
expenses and transaction costs and increases the possibility that the Fund would
not qualify as a regulated investment company under Subchapter M of the Internal
Revenue Code. High turnover may result in the Fund recognizing greater amounts
of income and capital gains, which would increase the amount of income and
capital gains

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<PAGE>

that the Fund must distribute to its shareholders in order to maintain its
status as a regulated investment company and to avoid the imposition of federal
income and excise taxes (see "Taxes").

PORTFOLIO TRANSACTIONS

Decisions to buy and sell securities for the Fund and the placing of the Fund's
securities transactions and negotiation of commission rates, where applicable,
are made by Money Growth Institute, Inc. ("Sub-Adviser") and are subject to
review by the Fund's Adviser and Board of Trustees of the Fund. In the purchase
and sale of portfolio securities, the Sub-Adviser seeks best execution for the
Fund, taking into account such factors as price (including the applicable
brokerage commission or dealer spread), the execution capability, financial
responsibility and responsiveness of the broker or dealer and the brokerage and
research services provided by the broker or dealer. The Sub-Adviser generally
seeks favorable prices and commission rates that are reasonable in relation to
the benefits received.

For the fiscal periods shown below, the Fund paid brokerage fees as follows:

FISCAL PERIOD BROKERAGE FEES
------------- --------------
Year ended October 31, 1998 $31,943
July 1 through October 31, 1997 $18,872
Year ended June 30, 1997 $97,945
Year ended June 30, 1996 $120,408
Year ended June 30, 1995 $94,361

The Fund has no obligation to deal with any broker or dealer in the execution of
securities transactions. Affiliates of the Fund or of the Sub-Adviser may effect
securities transactions which are executed on a national securities exchange or
transactions in the over-the-counter market conducted on an agency basis. The
Sub-Adviser owns a limited partnership interest in Brimberg & Co., L.P.
("Brimberg"), a registered broker-dealer.

During the fiscal periods shown below, the Fund paid Brimberg Brokerage
commissions as follows:

FISCAL PERIOD BROKERAGE FEES PERCENTAGE
------------- -------------- ----------
Year ended October 31, 1998 $4,910 15%
July 1 through October 31, 1997 $16,152 86%
Year ended June 30, 1997 $97,945 100%
Year ended June 30, 1996 $120,408 100%
Year ended June 30, 1995 $94,361 100%

Because commissions received from the Fund are excluded when calculating the
Sub-Adviser's profits as a Brimberg limited partner, the Sub-Adviser does not
receive material benefits from Brimberg's brokerage services to the Fund. The
Fund will not effect any brokerage transactions in its portfolio securities with
an affiliated broker if such transactions would be unfair or unreasonable to its
shareholders.

Generally, the Fund attempts to deal directly with the dealers who make a market
in the securities involved unless better prices and execution are available
elsewhere. Such dealers usually act as principals for their own account. On
occasion, portfolio securities for the Fund may be purchased directly from the
issuer.

The Adviser and Sub-Adviser are specifically authorized to select brokers who
also provide brokerage and research services to the Fund and/or other accounts
over which the Adviser or Sub-Adviser exercises investment discretion and to pay
such brokers a commission in excess of the commission another broker would
charge if the Adviser or Sub-Adviser determines in good faith that the
commission is reasonable in relation to the value of the brokerage and research
services provided. The determination may be viewed in terms of a particular
transaction or the Adviser's or Sub-Adviser's overall responsibilities with
respect to the Fund and to accounts over which they exercise investment
discretion.

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<PAGE>

Research services include securities and economic analyses, reports on issuers'
financial conditions and future business prospects, newsletters and opinions
relating to interest trends, general advice on the relative merits of possible
investment securities for the Fund and statistical services and information with
respect to the availability of securities or purchasers or sellers of
securities. Although this information is useful to the Fund and the Adviser or
Sub-Adviser, it is not possible to place a dollar value on it. Research services
furnished by brokers through whom the Fund effects securities transactions may
be used by the Adviser or Sub-Adviser in servicing all of its accounts and not
all such services may be used by the Adviser or Sub-Adviser in connection with
the Fund.

MANAGEMENT OF THE FUND

TRUST
NAME AND ADDRESS POSITION AGE PRINCIPAL OCCUPATION
- ---------------- -------- --- -----------------------------------------

J. Michael Belz (1) Trustee 45 President and Chief Executive Officer of
1635 NE Loop 410 Catholic Life Insurance 1984 to present.
San Antonio, TX
78209

- ------------------------------------
(1) This Trustee commenced service on November 1, 1998.
(2) This Trustee may be deemed an "interested person" of the Trust as defined
in the Investment Company Act of 1940.
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<PAGE>

COMPENSATION TABLE

TOTAL COMPENSATION FROM U.S. GLOBAL
NAME FUND COMPLEX(1) TO BOARD MEMBERS
---- ------------------------------
Richard Hughs $16,000
Clark R. Mandigo $20,200
Frank E. Holmes $0

SUB-ADVISER DISCIPLINARY HISTORY. Dr. Leeb and the Sub-Adviser have recently
consented to, without admitting or denying any of the charges, two SEC orders.
The order dated January 16, 1996, related to certain advertisements for a
newsletter edited by Dr. Leeb. Dr. Leeb was neither the owner nor the publisher
of the newsletter. The order dated July 4, 1995, related to certain record
keeping requirements and requirements governing client solicitations. Considered
jointly, the orders allege that Dr. Leeb and other respondents wilfully violated
or aided and abetted violations of various provisions of the Securities Act of
1933, the Securities Exchange Act of 1934, the Investment Company Act

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<PAGE>

of 1940, and the Advisers Act of 1940. Dr. Leeb and the other respondents agreed
to certain remedial sanctions including censure, cease and desist orders,
payment of civil money penalties, and the implementation of certain procedures
to ensure their compliance with the federal securities laws. Neither the
MegaTrends Fund nor the predecessor fund was a party to either proceeding.

Three states issued orders against the Sub-Adviser for conducting advisory
business in their states without prior registration as an investment adviser.
The Sub-Adviser agreed to cease and desist such practice, paid fines, and
registered in each state.

PRINCIPAL HOLDERS OF SECURITIES

NAME & ADDRESS OF OWNER % OWNED TYPE OF OWNERSHIP
----------------------- ------- -----------------
[BROKER NAME/ADDRESS] _____ Record(1)

(1) [BROKER NAME], broker-dealer, has advised that no individual client owns
more than 5% of the Fund.

INVESTMENT ADVISER

The investment adviser to U.S. Global Accolade Funds is U.S. Global Investors,
Inc., a Texas corporation, pursuant to an advisory agreement dated September 21,
1994, and amended November 15, 1996. Frank E. Holmes, Chief Executive Officer
and a Director of the Adviser, and Trustee, President and Chief Executive
Officer of the Trust, beneficially owns more than 25% of the outstanding voting
stock of the Adviser and may be deemed to be a controlling person of the
Adviser.

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<PAGE>

incurred costs and expenses of marketing the Fund that exceed the 0.25% 12b-1
fee charged to the Fund for such marketing purposes; 2) for any monies
previously received as a result of the minimum sub-advisory fee set forth above
and paid by the Adviser or the Trust before the Securities and Exchange
Commission ("SEC") declared the Fund's registration statement effective; 3) the
unrecovered costs of organizing the Fund up to $40,000 (the Adviser will be
responsible for bearing costs of organization of the Fund greater than $40,000);
and (4) if a decision is made with respect to placing a cap on expenses, to the
extent that actual expenses of the Fund exceed the cap, and the Adviser is
required to pay or absorb any of the excess expenses, by the amount of the
excess expenses paid or absorbed by the Adviser through such downward
adjustments. The Fund is not responsible for the Sub-Adviser's fee. The
management fee paid to the Sub-Adviser is paid by the Adviser out of its
management fee and does not increase the expenses of the Fund.

The advisory agreement was approved by the Board of Trustees of the Trust
(including a majority of the "disinterested Trustees") with respect to the Fund
and will be submitted for approval by shareholders of the Fund at the initial
meeting of shareholders. The Advisory Agreement provides that it will continue
initially for two years, and from year to year thereafter, with respect to each
fund, as long as it is approved at least annually by (i) a vote of a majority of
the outstanding voting securities of such fund (as defined in the Investment
Company Act of 1940 ["Act"]) or by the Board of Trustees of the Trust, and (ii)
a vote of a majority of the Trustees who are not parties to the Advisory
Agreement or "interested persons" of any party thereto cast in person at a
meeting called for the purpose of voting on such approval. The Advisory
Agreement may be terminated on 60-day written notice by either party and will
terminate automatically if it is assigned.

The Adviser and the Sub-Adviser provide investment advice to a variety of
clients, including other mutual funds. Investment decisions for each client are
made with a view to achieving their respective investment objectives. Investment
decisions are the product of many factors in addition to basic suitability for
the particular client involved. Thus, a particular security may be bought or
sold for certain clients even though it could have been bought or sold for other
clients at the same time. Likewise, a particular security may be bought for one
or more clients when one or more other clients are selling the security. In some
instances, one client may sell a particular security to another client. It also
sometimes happens that two or more clients simultaneously purchase or sell the
same security, in which event each day's transactions in such security are, as
far as possible, averaged as to price and allocated between such clients in a
way that in the Adviser's opinion is equitable to each and in accordance with
the amount being purchased or sold by each. There may be circumstances when
purchases or sales of portfolio securities for one or more clients will have an
adverse effect on other clients. The Adviser employs professional staffs of
portfolio managers who draw upon a variety of resources, for research
information for the clients.

The Fund pays the adviser a management fee based on varying percentages of
average net assets. For the fiscal periods shown below, the Fund paid the
Adviser the following advisory fees (net of expenses paid by the adviser or
voluntary fee waivers):

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<PAGE>

FISCAL PERIOD MANAGEMENT FEE FEES WAIVED
------------- -------------- -----------
Year ended October 31, 1998 $240,829 0
July 1 through October 31, 1997 $88,031 0
Year ended June 30, 1997 * $232,398 ($20,988)
Year ended June 30, 1996 * $127,519 ($177,359)
Year ended June 30, 1995 * $204,936 ($190,271)

* Prior to November 16, 1996, the Fund was advised by another investment
adviser. The prior adviser waived fees as noted in the table. The
current adviser has not waived management fees.

TRANSFER AGENCY AND OTHER SERVICES

The Transfer Agency Agreement with the Trust provides for each Fund to pay
United Shareholder Services, Inc. ("USSI") an annual fee of $23.00 per account
(1/12 of $23.00 monthly). In connection with obtaining and/or providing
administrative services to the beneficial owners of Trust shares through
broker-dealers, banks, trust companies and similar institutions which provide
such services and maintain an omnibus account with the Transfer Agent, each Fund
shall pay to the Transfer Agent a monthly fee equal to one-twelfth (1/12) of
12.5 basis points (.00125) of the value of the shares of the Funds held in
accounts at the institutions, which payment shall not exceed $1.92 multiplied by
the average daily number of accounts holding Trust shares at the institution.
These fees cover the usual transfer agency functions. In addition, the Funds
bear certain other Transfer Agent expenses such as the costs of record retention
and postage, plus the telephone and line charges (including the toll-free 800
service) used by shareholders to contact the Transfer Agent. For the fiscal year
ended October 31, 1998, the Fund paid USSI a total of $42,611 for transfer
agency, lockbox, and printing fees. For the year ended June 30, 1997, and the
period from July 1 through October 31, 1997, the Fund paid USSI a total of
$49,994 and $18,074, respectively, for transfer agency, lockbox, and printing
fees.

USSI maintained the books and records of the Trust and of each fund of the Trust
until November 1, 1997, at which time Brown Brothers Harriman and Co. assumed
such responsibility. For the fiscal year ended June 30, 1997, and the period
from July 1 through October 31, 1997, the Fund paid USSI a total of $18,657 and
$11,667, respectively, for portfolio accounting services.

DISTRIBUTION PLAN

In 1996, the Fund adopted a Distribution Plan pursuant to Rule 12b-1 of the 1940
Act ("Distribution Plan"). The Distribution Plan allows the Fund to pay for or
reimburse expenditures in connection with sales and promotional services related
to the distribution of Fund shares, including personal services provided to
prospective and existing Fund shareholders, which includes the costs of:
printing and distribution of prospectuses and promotional materials, making
slides and charts for presentations, assisting shareholders and prospective
investors in understanding and dealing with the Fund, and travel and
out-of-pocket expenses (e.g., copy and long distance telephone charges) related
thereto.

The total amount expended pursuant to the Distribution Plan may not exceed 0.25%
of the Fund's net assets annually. For the fiscal year ended October 31, 1998,
the Fund paid a total of $60,206 in distribution fees. Distribution expenses
paid by the Adviser or other third parties in prior periods that exceeded 0.25%
of net assets may be paid by the Fund with distribution expenses accrued
pursuant to the 12b-1 Distribution Plan in the current or future periods if the
0.25% limitation is never exceeded.

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<PAGE>

The Fund is unaware of any Trustee or any interested person of the Fund who had
a direct or indirect financial interest in the operations of the Distribution
Plan.

CERTAIN PURCHASES OF SHARES OF THE FUND

The following information supplements the discussion of how to buy Fund shares
as discussed in the Fund's prospectus.

1. the securities offered by the investor in exchange for shares of the Fund
must not be restricted in any way as to resale or be otherwise illiquid;

2. securities of the same issuer must already exist in the Fund's portfolio;

3. the securities must have a value that is readily ascertainable (and not
established only by evaluation procedures) as evidenced by a listing on the
NYSE, or Nasdaq-AMEX;

4. any securities so acquired by the Fund will not comprise more than 5% of
the Fund's net assets at the time of such exchange;

5. no over-the-counter securities will be accepted unless the principal
over-the-counter market is in the United States; and

6. the securities are acquired for investment and not for resale.

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<PAGE>

the necessary forms to the Trust and certify that there are no legal or
contractual restrictions on the free transfer and sale of the securities. The
securities will be valued as of the close of business on the day of receipt by
the Trust in the same manner as portfolio securities of the Fund are valued. See
the section entitled Net Asset Value the prospectus. The number of shares of the
Fund, having a net asset value as of the close of business on the day of receipt
equal to the value of the securities delivered by the investor, will be issued
to the investor, less applicable stock transfer taxes, if any.

ADDITIONAL INFORMATION ON REDEMPTIONS

The following information supplements the discussion of how to redeem Fund
shares as discussed in the Fund's prospectus.

CALCULATION OF PERFORMANCE DATA

The performance quotations described below are based on historical earnings and
are not intended to indicate future performance.

P(1+T) SUP n = ERV

The average annual total return for the Fund for the periods ended October 31,
1998, are as follows:

1 year..............................................(4.43)%
5 years..............................................9.01%
Since inception (October 21, 1991)...................8.29%

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<PAGE>

TAX STATUS

The Code imposes a non-deductible 4% excise tax on a regulated investment
company that fails to distribute during each calendar year an amount equal to
the sum of (1) at least 98% of its ordinary income for the calendar year, (2) at
least 98% of its capital gain net income for the twelve-month period ending
October 31 of the calendar year, and (3) any portion (not taxable to the Fund)
of the respective balance from the preceding calendar year. The Fund intends to
make such distributions as are necessary to avoid imposition of this excise tax.

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<PAGE>

CUSTODIAN, FUND ACCOUNTANT AND ADMINISTRATOR

UNDERWRITER/DISTRIBUTOR

INDEPENDENT ACCOUNTANTS

PricewaterhouseCoopers LLP, 160 Federal Street, Boston, Massachusetts 02110 is
the independent accountant for the Trust.

FINANCIAL STATEMENTS

The financial statements for the fiscal year ended October 31, 1998, are hereby
incorporated by reference from the U.S. Global Accolade Funds 1998 Annual Report
to Shareholders of that date that accompanies this Statement of Additional
Information. If not included, the Trust will promptly provide a copy, free of
charge, upon request to: U.S. Global Investors, Inc., P.O. Box 29467, San
Antonio, Texas 78229-0467, 1-800-873-8637 or (210) 308-1234. The financial
highlights for the fiscal periods ended June 30, 1992 through 1996, have been
audited by Arthur Andersen LLP. The related financial statements and report of
independent accountants for 1996 and prior periods are included in the Fund's
1996 Annual Report to Shareholders and are incorporated by reference into the
Statement of Additional Information.

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<PAGE>

================================================================================
================================================================================

U.S. GLOBAL ACCOLADE FUNDS

GLOBAL BLUE CHIP FUND

Statement Of Additional Information

This Statement of Additional Information is not a prospectus, but should be read
in conjunction with the current prospectus ("Prospectus") dated March 1, 1999.
The financial statements for the Global Blue Chip Fund for the year ended
October 31, 1998, and the Report of Independent Auditors thereon, are
incorporated by reference from the Fund's Annual Report dated October 31, 1998.
Copies of the Prospectus and the Fund's financial statements may be requested
from U.S. Global Investors, Inc. ("Adviser"), 7900 Callaghan Road, San Antonio,
Texas 78229 or 1-800-US- FUNDS (1-800-873-8637).

The date of this Statement of Additional Information is March 1, 1999.

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

<PAGE>

TABLE OF CONTENTS

PAGE

GENERAL INFORMATION............................................................3

FUND POLICIES..................................................................3

INVESTMENT STRATEGIES AND RISKS................................................4

PORTFOLIO TURNOVER............................................................14

PORTFOLIO TRANSACTIONS........................................................14

MANAGEMENT OF THE FUND........................................................15

PRINCIPAL HOLDERS OF SECURITIES...............................................16

INVESTMENT ADVISORY SERVICES..................................................16

TRANSFER AGENCY AND OTHER SERVICES............................................18

DISTRIBUTION PLAN.............................................................18

CERTAIN PURCHASES OF SHARES OF THE FUND.......................................19

ADDITIONAL INFORMATION ON REDEMPTIONS.........................................20

CALCULATION OF PERFORMANCE DATA...............................................20

TAX STATUS....................................................................20

CUSTODIAN, FUND ACCOUNTANT AND ADMINISTRATOR..................................21

UNDERWRITER/DISTRIBUTOR.......................................................22

INDEPENDENT ACCOUNTANTS.......................................................22

FINANCIAL STATEMENTS..........................................................22

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GENERAL INFORMATION

U.S. Global Accolade Funds ("Trust") is an open-end management investment
company and is a business trust organized April 16, 1993 under the laws of the
Commonwealth of Massachusetts. There are several series within the Trust, each
of which represents a separate diversified portfolio of securities
("Portfolio"). This Statement of Additional Information ("SAI") presents
important information concerning the Global Blue Chip Fund ("Fund") and should
be read in conjunction with the prospectus. The Fund commenced operations on
February 20, 1997.

The Trust's master trust agreement provides that no annual or regular meeting of
shareholders is required. Thus, there will ordinarily be no shareholder meetings
unless otherwise required by the Investment Company Act of 1940. The Trustees
serve for six-year terms.

Shares have no preemptive or subscription rights and are fully transferable.
There are no conversion rights.

FUND POLICIES

The following information supplements the discussion of the Fund's investment
objectives and policies discussed in the Fund's prospectus.

INVESTMENT RESTRICTIONS. If a percentage investment restriction is adhered to at
the time of investment, a later increase or decrease in percentage, resulting
from a change in values of portfolio securities or amount of net assets, will
not be considered a violation of any of the foregoing restrictions.

FUNDAMENTAL INVESTMENT RESTRICTIONS. The Fund will not change any of the
following investment restrictions, without the affirmative vote of a majority of
the outstanding voting securities of the Fund, which, as used herein, means the

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lesser of (1) 67% of that Fund's outstanding shares present at a meeting at
which more than 50% of the outstanding shares of that Fund are represented
either in person or by proxy, or (2) more than 50% of that Fund's outstanding
shares.

The Fund may not:

(1) Issue senior securities.

(2) Borrow money, except that the Fund may borrow not in excess of 5% of its
total assets from banks as a temporary measure for extraordinary purposes,
may borrow up to 331/3% of the amount of its total assets (reduced by the
amount of all liabilities and indebtedness other than such borrowing) when
deemed desirable or appropriate to effect redemptions, provided, however,
that the Fund will not purchase additional securities while borrowings
exceed 5% of the total assets of the Fund.

(3) Underwrite the securities of other issuers.

(4) Invest in real estate.

(5) Engage in the purchase or sale of commodities or commodity futures
contracts, except that the Fund may invest in futures contracts, forward
contracts, options, and other derivative investments in conformance with
policies disclosed in the Fund's then current prospectus and/or Statement
of Additional Information.

(6) Lend its assets, except that the Fund may purchase money market debt
obligations and repurchase agreements secured by money market obligations,
and except for the purchase or acquisition of bonds, debentures or other
debt securities of a type customarily purchased by institutional investors
and except that any Fund may lend portfolio securities with an aggregate
market value of not more than one-third of such Fund's total net assets.
(Accounts receivable for shares purchased by telephone shall not be deemed
loans.)

(7) Purchase any security on margin, except that it may obtain such short-term
credits as are necessary for clearance of securities transactions.

(8) Sell short more than 5% of its total assets.

(9) Invest more than 25% of its total assets in securities of companies
principally engaged in any one industry. For the purposes of determining
industry concentration, the Fund relies on the Standard Industrial
Classification as complied by Standard & Poor's Compustat Services, Inc.
as in effect from time to time.

(10) With respect to 75% of its total assets the Fund will not: (a) Invest more
than 5% of the value of its total assets in securities of any one issuer,
except such limitation shall not apply to obligations issued or guaranteed
by the United States ("U.S.") Government, its agencies or
instrumentalities, or (b) acquire more than 10% of the voting securities
of any one issuer.

(11) Invest more than 10% of its total net assets in open-end investment
companies. To the extent that the Fund shall invest in open-end investment
companies, the Fund's Adviser shall waive a proportional amount of their
management fee.

INVESTMENT STRATEGIES AND RISKS

The following information supplements the discussion of the Fund's investment
strategies and risks factors discussed in the Fund's prospectus.

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Debt securities are subject to price fluctuations based on changes in interest
rates, which will generally result in these securities changing in price in the
opposite direction. That is, the value of these securities will increase when
interest rates decline and will decrease when interest rates rise.

ADR. American Depository Receipts ("ADR") represent shares of foreign issuers.
ADRs are typically issued by a U.S. bank or trust company and evidence ownership
of underlying securities issued by a foreign corporation. Generally, ADRs in
registered form are intended for use in the U.S. securities market, and ADRs in
bearer form are intended for use in securities markets outside the United
States. ADRs may not necessarily be denominated in the same currency as the
underlying securities into which they may be converted. In addition, the issuers
of the securities underlying unsponsored ADRs are not obligated to disclose
material information in the United States; therefore, there may be less
information available regarding such issuers. There may not be a correlation
between such information and the market value of the ADRs. For purposes of the
Fund's investment policies, the Fund's investment in ADRs will be deemed to be
investments in the underlying securities.

EMERGING MARKETS. The Fund may invest up to 15% of its total assets in countries
considered by the Adviser to represent emerging markets. However, the Fund may
not invest more than 5% of its total assets in any single emerging market
country. The Adviser determines which countries are emerging market countries by
considering various factors, including development of securities laws and market
regulation, total number of issuers, total market capitalization, and
perceptions of the investment community. Generally, emerging markets are those
other than North America, Western Europe, and Japan. For example, the Adviser
currently considers the following countries to be among the emerging markets in
which it might invest: Argentina, Brazil, China, Columbia, Czech Republic,
Indonesia, Peru, Philippines, Thailand, Turkey and Zimbabwe.

Risks of investing in emerging markets include:

(1) the risk that the Fund's assets may be exposed to nationalization,
expropriation, or confiscatory taxation;

(2) the fact that emerging market securities markets are substantially
smaller, less liquid and more volatile than the securities markets of more
developed nations. The relatively small market capitalization and trading
volume of emerging market securities may cause the Fund's investments to
be comparatively less liquid and subject to greater price volatility than
investments in the securities markets of developed nations. Many emerging
markets are in their infancy and have yet to be exposed to a major
correction. In the event of such an occurrence, the

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absence of various market mechanisms that are inherent in the markets of
more developed nations may lead to turmoil in the market place, as well as
the inability of the Fund to liquidate its investments;

(3) greater social, economic and political uncertainty (including the risk of
war);

(4) greater price volatility, substantially less liquidity and significantly
smaller market capitalization of securities markets;

(5) currency exchange rate fluctuations and the lack of available currency
hedging instruments;

(6) higher rates of inflation;

(7) controls on foreign investment and limitations on repatriation of invested
capital and on the Fund's ability to exchange local currencies for U.S.
dollars;

(8) greater governmental involvement in and control over the economy;

(9) the fact that emerging market companies may be smaller, less seasoned and
newly organized;

(10) the difference in, or lack of, auditing and financial reporting standards
which may result in unavailability of material information about issuers;

(11) the fact that the securities of many companies may trade at prices
substantially above book value, at high price/earnings ratios, or at
prices that do not reflect traditional measures of value;

(13) less extensive regulation of the securities markets;

(14) certain considerations regarding the maintenance of Fund portfolio
securities and cash with foreign sub-custodians and securities
depositories;

(15) the risk that it may be more difficult, or impossible, to obtain and/or
enforce a judgment than in other countries;

(16) the risk that the Fund may be subject to income or withholding taxes
imposed by emerging market counties or other foreign governments. The Fund
intends to elect, when eligible, to "pass through" to the Fund's
shareholders the amount of foreign income tax and similar taxes paid by
the Fund. The foreign taxes passed through to a shareholder would be
included in the shareholder's income and may be claimed as a deduction or
credit. Other taxes, such as transfer taxes, may be imposed on the Fund,
but would not give rise to a credit or be eligible to be passed through to
the shareholders;

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to develop and expand their operations. It is unclear what will be the
effect on companies in emerging markets, if any, of attempts to move
towards a more market-oriented economy;

(20) investments in equity securities are subject to inherent market risks and
fluctuations in value due to earnings, economic conditions, quality
ratings and other factors beyond the control of the Adviser. As a result,
the return and net asset value of the Fund will fluctuate;

(21) the Adviser may engage in hedging transactions in an attempt to hedge the
Fund's foreign securities investments back to the U.S. dollar when, in its
judgment, currency movements affecting particular investments are likely to
harm the performance of the Fund. Possible losses from changes in currency
exchange rates are primarily a risk of unhedged investing in foreign
securities. While a security may perform well in a foreign market, if the
local currency declines against the U.S. dollar, gains from the investment
can disappear or become losses. Typically, currency fluctuations are more
extreme than stock market fluctuations. Accordingly, the strength or
weakness of the U.S. dollar against foreign currencies may account for part
of the Fund's performance even when the Adviser attempts to minimize
currency risk through hedging activities. While currency hedging may reduce
portfolio volatility, there are costs associated with such hedging,
including the loss of potential profits, losses on hedging transactions,
and increased transaction expenses; and

BORROWING. The Fund may have to deal with unpredictable cashflows as
shareholders purchase and redeem shares. Under adverse conditions, the Fund
might have to sell portfolio securities to raise cash to pay for redemptions at
a time when investment considerations would not favor such sales. In addition,
frequent purchases and sales of portfolio securities tend to decrease fund
performance by increasing transaction expenses.

The Fund may deal with unpredictable cashflows by borrowing money. Through such
borrowings the fund may avoid selling portfolio securities to raise cash to pay
for redemptions at a time when investment considerations would not favor such
sales. In addition, the Fund's performance may be improved due to a decrease in
the number of portfolio transactions. After borrowing money, if subsequent
shareholder purchases do not provide sufficient cash to repay the borrowed
monies, the fund will liquidate portfolio securities in an orderly manner to
repay the borrowed monies.

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interest costs on borrowings may fluctuate with changing market rates of
interest and may partially offset or exceed the returns which the Fund earns on
portfolio securities. Under adverse conditions, the Fund might be forced to sell
portfolio securities to meet interest or principal payments at a time when
market conditions would not be conducive to favorable selling prices for the
securities.

The Fund will not purchase any security while borrowings represent more than 5%
of total assets.

TEMPORARY DEFENSIVE INVESTMENT. For temporary defensive purposes during periods
that, in the Adviser's opinion, present the Fund with adverse changes in the
economic, political or securities markets, the Fund may seek to protect the
capital value of its assets by temporarily investing up to 100% of its assets
in: U.S. Government securities, short-term indebtedness, money market
instruments, or other investment grade cash equivalents, each denominated in
U.S. dollars or any other freely convertible currency; or repurchase agreements.
When the Fund is in a temporary defensive position, it may not achieve its
investment objective. When the Fund is in a defensive investment position, it
may not achieve its investment objective.

GOVERNMENT AND CORPORATE DEBT. U.S. Government obligations include securities
which are issued or guaranteed by the United States Treasury, by various
agencies of the United States Government, and by various instrumentalities
which have been established or sponsored by the United States Government. U.S.
Treasury obligations are backed by the "full faith and credit" of the U.S.
Government. U.S. Treasury obligations include Treasury bills, Treasury notes and
Treasury bonds. Agencies or instrumentalities established by the United States
Government include the Federal Home Loan Bank, the Federal Land Bank, the
Government National Mortgage Association, the Federal National Mortgage
Association, the Federal Home Loan Mortgage Corporation, and the Student Loan
Marketing Association.

QUALITY RATINGS OF CORPORATE BONDS. The ratings of Moody's Investors Service,
Inc. and Standard & Poor's Ratings Group for corporate bonds in which the Fund
may invest are as follows:

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STANDARD & POOR'S RATINGS GROUP. AAA - Bonds rated AAA have the highest
rating assigned by Standard & Poor's to a debt obligation. Capacity to
pay interest and repay principal is extremely strong.

AA - Bonds rated AA have a very strong capacity to pay interest and
repay principal and differ from the highest rated issues only in small
degree.

RESTRICTED AND ILLIQUID SECURITIES. The Fund may invest up to 15% of its total
assets in illiquid securities. Securities may be illiquid because they are
unlisted, subject to legal restrictions on resale or due to other factors which,
in the Adviser's opinion, raise questions concerning a fund's ability to
liquidate the securities in a timely and orderly way without substantial loss.
While such purchases may be made at an advantageous price and offer attractive
opportunities for investment not otherwise available on the open market, the
Fund may not have the same freedom to dispose of such securities as in the case
of the purchase of securities in the open market or in a public distribution.
These securities may often be resold in a liquid dealer or institutional trading
market, but the Fund may experience delays in its attempts to dispose of such
securities. If adverse market conditions develop, the Fund may not be able to
obtain as favorable a price as that prevailing at the time the decision is made
to sell. In any case, where a thin market exists for a particular security,
public knowledge of a proposed sale of a large block may depress the market
price of such securities.

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period exceeding seven days will be subject to the Fund's restriction on
illiquid investments unless, in the judgment of the Adviser, such note is
liquid.

OTHER RIGHTS TO ACQUIRE SECURITIES. The Fund may also invest in other rights to
acquire securities, such as options and warrants. These securities represent the
right to acquire a fixed or variable amount of a particular issue of securities
at a fixed or formula price either during specified periods or only immediately
before termination. These securities are generally exercisable at premiums above
the value of the underlying securities at the time the right is issued. These
rights are more volatile than the underlying stock and will result in a total
loss of the Fund's investment if they expire without being exercised because the
value of the underlying security does not exceed the exercise price of the
right.

STRATEGIC TRANSACTIONS. The Fund may purchase and sell exchange-listed and
over-the-counter put and call options on securities, equity and fixed-income
indices and other financial instruments, purchase and sell financial futures
contracts and options thereon, and enter into various currency transactions such
as currency forward contracts, currency futures contracts, options on currencies
or currency futures (collectively, all the above are called "Strategic
Transactions"). The Fund may engage in Strategic Transactions for hedging, risk
management, or portfolio management purposes, but not for speculation, and it
will comply with applicable regulatory requirements when implementing these
strategies, techniques and instruments.

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of such securities for investment purposes, (4) to manage the effective maturity
or duration of the Fund's portfolio, or (5) to establish a position in the
derivatives markets as a temporary substitute for purchasing or selling
particular securities. The Fund's ability to successfully use these Strategic
Transactions will depend upon the Adviser's ability to predict pertinent market
movements, and cannot be assured. Engaging in Strategic Transactions will
increase transaction expenses and may result in a loss that exceeds the
principal invested in the transactions.

Strategic Transactions have risk associated with them including possible default
by the other party to the transaction, illiquidity and, to the extent the
Adviser's view as to certain market movements is incorrect, the risk that the
use of such Strategic Transactions could result in losses greater than if they
had not been used. Use of put and call options may result in losses to the Fund.
For example, selling call options may force the sale of portfolio securities at
inopportune times or for lower prices than current market values. Selling call
options may also limit the amount of appreciation the Fund can realize on its
investments or cause the Fund to hold a security it might otherwise sell. The
use of currency transactions can result in the Fund incurring losses as a result
of a number of factors including the imposition of exchange controls, suspension
of settlements, or the inability to deliver or receive a specified currency. The
use of options and futures transactions entails certain other risks. In
particular, the variable degree of correlation between price movements of
futures contracts and price movements in the related portfolio position of the
Fund creates the possibility that losses on the hedging instrument may be
greater than gains in the value of the Fund's position. In addition, futures and
option markets may not be liquid in all circumstances and certain
over-the-counter options may have no markets. As a result, in certain markets,
the Fund might not be able to close out a transaction, and substantial losses
might be incurred. However, the use of futures and options transactions for
hedging should tend to minimize the risk of loss due to a decline in the value
of a hedged position. At the same time they tend to limit any potential gain
that might result from an increase in value of such position. Finally, the daily
variation margin requirement for futures contracts would create a greater on
going potential financial risk than would purchases of options, where the
exposure is limited to the cost of the initial premium. Losses resulting from
the use of Strategic Transactions would reduce net asset value, and possibly
income, and such losses can be greater than if the Strategic Transactions had
not been used.

The Fund's activities involving Strategic Transactions may be limited by the
requirements of Subchapter M of the Internal Revenue Code for qualification as a
regulated investment company.

PUT AND CALL OPTIONS. The Fund may purchase and sell (issue) both put and call
options. The Fund may also enter into transactions to close out its investment
in any put or call options.

A put option gives the purchaser of the option, upon payment of a premium, the
right to sell, and the issuer of the option the obligation to buy the underlying
security, commodity, index, currency or other instrument at the exercise price.
For instance, the Fund's purchase of a put option on a security might be
designed to protect its holdings in the underlying instrument (or, in some
cases, a similar instrument) against a substantial decline in the market value
by giving the Fund the right to sell such instrument at the option exercise
price. A call option, upon payment of a premium, gives the purchaser of the
option the right to buy, and the issuer the obligation to sell, the underlying
instrument at the exercise price. The Fund's purchase of a call option on a
security, financial future, index currency or other instrument might be intended
to protect the Fund against an increase in the price of the underlying
instrument that it intends to purchase in the future by fixing the price at
which it may purchase such instrument. An "American style" put or call option
may be exercised at any time during the option period while a "European style"
put or call option may be exercised only upon expiration or during a fixed
period prior thereto.

The Fund is authorized to purchase and sell both exchange listed options and
over-the-counter options ("OTC options"). Exchange listed options are issued by
a regulated intermediary such as the Options Clearing Corporation ("OCC"), which
guarantees the performance of the obligations of the parties to such options.
OTC options are purchased from or sold to securities dealers, financial
institutions or other parties ["Counterparty(ies)"] through direct bilateral
agreement with the Counterparty. In contrast to exchange listed options, which
generally have standardized terms and performance mechanics, all the terms of an
OTC option are set by negotiation of the parties. Unless the parties provide for
it, there is no central clearing or guaranty function in an OTC option.

The Fund's ability to close out its position as a purchaser or seller of a put
or call option is dependent, in part, upon the liquidity of the market for that
particular option. Exchange listed options, because they are standardized and
not subject to Counterparty credit risk, are generally more liquid than OTC
options. There can be no guarantee that the

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Fund will be able to close out an option position, whether in exchange listed
options or OTC options, when desired. An inability to close out its options
positions may reduce the Fund's anticipated profits or increase its losses.

If the Counterparty to an OTC option fails to make or take delivery of the
security, currency or other instrument underlying an OTC option it has entered
into with the Fund, or fails to make a cash settlement payment due in accordance
with the terms of that option, the Fund may lose any premium it paid for the
option as well as any anticipated benefit of the transaction. Accordingly, the
Adviser must assess the creditworthiness of each such Counterparty or any
guarantor or credit enhancement of the Counterparty's credit to determine the
likelihood that the terms of the OTC option will be satisfied.

The Fund will realize a loss equal to all or a part of the premium paid for an
option if the price of the underlying security, commodity, index, currency or
other instrument security decreases or does not increase by more than the
premium (in the case of a call option), or if the price of the underlying
security, commodity, index, currency or other instrument increases or does not
decrease by more than the premium (in the case of a put option). The Fund will
not purchase any option if, immediately thereafter, the aggregate market value
of all outstanding options purchased by the Fund would exceed 5% of the Fund's
total assets.

If the Fund sells (i.e., issues) a call option, the premium that it receives may
serve as a partial hedge, to the extent of the option premium, against a
decrease in the value of the underlying securities or instruments in its
portfolio, or may increase the Fund's income. If the Fund sells (i.e., issues) a
put option, the premium that it receives may serve to reduce the cost of
purchasing the underlying security, to the extent of the option premium, or may
increase the Fund's capital gains. All options sold by the Fund must be
"covered" (i.e., the Fund must either be long (when selling a call option) or
short (when selling a put option), the securities or futures contract subject to
the calls or must meet the asset segregation requirements described below as
long as the option is outstanding. Even though the Fund will receive the option
premium to help protect it against loss or reduce its cost basis, an option sold
by the Fund exposes the Fund during the term of the option to possible loss.
When selling a call, the Fund is exposed to the loss of opportunity to realize
appreciation in the market price of the underlying security or instrument, and
the transaction may require the Fund to hold a security or instrument that it
might otherwise have sold. When selling a put, the Fund is exposed to the
possibility of being required to pay greater than current market value to
purchase the underlying security, and the transaction may require the Fund to
maintain a short position in a security or instrument it might otherwise not
have maintained. The Fund will not write any call or put options if, immediately
afterwards, the aggregate value of the Fund's securities subject to outstanding
call or put options would exceed 25% of the value of the Fund's total assets.

FUTURES CONTRACTS. The Fund may enter into financial futures contracts or
purchase or sell put and call options on such futures as a hedge against
anticipated interest rate, currency or equity market changes, for duration
management and for risk management purposes. Futures are generally bought and
sold on the commodities exchange where they are listed with payment of an
initial variation margin as described below. The sale of a futures contract
creates a firm obligation by the Fund, as seller, to deliver to the buyer the
specific type of financial instrument called for in the contract at a specific
future time for a specified price (or, with respect to index futures and
Eurodollar instruments, the net cash amount). Options on futures contracts are
similar to options on securities except that an option on a futures contract
gives the purchaser the right in return for the premium paid to assume a
position in a futures contract and obligates the seller to deliver such
position.

The Fund's use of financial futures and options thereon will in all cases be
consistent with applicable regulatory requirements and in particular the rules
and regulations of the CFTC and will be entered into only for bonafide hedging,
risk management (including duration management) or other portfolio management
purposes. Typically, maintaining a futures contract or selling an option thereon
requires the Fund to deposit with a financial intermediary as security for its
obligations an amount of cash or other specified assets (initial margin) that
initially is typically 1% to 10% of the face amount of the contract (but may be
higher in some circumstances). Additional cash or assets (variation margin) may
be required to be deposited thereafter on a daily basis as the marked-to-market
value of the contract fluctuates. The purchase of an option on financial futures
involves payment of a premium for the option without any further obligation on
the part of the purchaser. If the Fund exercises an option on a futures
contract, it will be obligated to post initial margin (and potentially
subsequent variation margin) for the resulting futures position just as it would
for any futures position. Futures contracts and options thereon are generally
settled by entering into an

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offsetting transaction, but there can be no assurance that the position can be
offset, before settlement, at an advantageous price, nor that delivery will
occur.

The Fund will not enter into a futures contract or related option (except for
closing transactions) if, immediately afterwards, the sum of the amount of its
initial margin and premiums on open futures contracts and options thereon would
exceed 5% of the Fund's total assets (taken at current value). However, in the
case of an option that is in-the-money at the time of the purchase, the
in-the-money amount may be excluded in calculating the 5% limitation. The
segregation requirements with respect to futures contracts and options thereon
are described below.

FOREIGN CURRENCY TRANSACTIONS. The Fund may engage in currency transactions with
Counterparties in an attempt to hedge an investment in an issuer incorporated or
operating in a foreign country or in a security denominated in the currency of a
foreign country against a devaluation of that country's currency. Currency
transactions include forward currency contracts, exchange listed currency
futures, and exchange listed and OTC options on currencies. The Fund's dealing
in forward currency contracts and other currency transactions such as futures,
options, and options on futures generally will be limited to hedging involving
either specific transactions or portfolio positions. Transaction hedging is
entering into a currency transaction with respect to specific assets or
liabilities of the Fund, which will generally arise in connection with the
purchase or sale of its portfolio securities or the receipt of income therefrom.
Position hedging is entering into a currency transaction with respect to
portfolio security positions denominated or generally quoted in that currency.

The Fund may cross-hedge currencies by entering into transactions to purchase or
sell one or more currencies that are expected to decline in value relative to
other currencies in which the Fund has (or expects to have) portfolio exposure.

To reduce the effect of currency fluctuations on the value of existing or
anticipated holdings or portfolio securities, the Fund may engage in proxy
hedging. Proxy hedging may be used when the currency to which the Fund's
portfolio is exposed is difficult to hedge. Proxy hedging entails entering into
a forward contract to sell a currency whose changes in value are generally
considered to be linked to a currency in which some or all of the Fund's
portfolio securities are, or are expected to be denominated, and to buy U.S.
dollars.

To hedge against a devaluation of a foreign currency, the Fund may enter into a
forward market contract to sell to banks a set amount of such currency at a
fixed price and at a fixed time in the future. If, in foreign currency
transactions, the foreign currency sold forward by the Fund is devalued below
the price of the forward market contract and more than any devaluation of the
U.S. dollar during the period of the contract, the Fund will realize a gain as a
result of the currency transaction. In this way, the Fund might reduce the
impact of any decline in the market value of its foreign investments
attributable to devaluation of foreign currencies.

The Fund may sell foreign currency forward only as a means of protecting its
foreign investments or to hedge in connection with the purchase and sale of
foreign securities, and may not otherwise trade in the currencies of foreign
countries. Accordingly, the Fund may not sell forward the currency of a
particular country to an extent greater than the aggregate market value (at the
time of making such sale) of the securities held in its portfolio denominated in
that particular foreign currency (or issued by companies incorporated or
operating in that particular foreign country) plus an amount equal to the value
of securities it anticipates purchasing less the value of securities it
anticipates selling, denominated in that particular currency.

As a result of hedging through selling foreign currencies forward, in the event
of a devaluation, it is possible that the value of the Fund's portfolio would
not depreciate as much as the portfolio of a fund holding similar investments
that did not sell foreign currencies forward. Even so, the forward market
contract is not a perfect hedge against devaluation because the value of the
Fund's portfolio securities may decrease more than the amount realized by reason
of the foreign currency transaction. To the extent that the Fund sells forward
currencies that are thereafter revalued upward, the value of the Fund's
portfolio would appreciate to a lesser extent than the comparable portfolio of a
fund that did not sell those foreign currencies forward. If, in anticipation of
a devaluation of a foreign currency, the Fund sells the currency forward at a
price lower than the price of that currency on the expiration date of the
contract, the Fund will suffer a loss on the contract if the currency is not
devalued, during the contract period, below the contract price. Moreover, it
will not be possible for the Fund to hedge against a devaluation that is so
generally anticipated that the Fund is not able to contract to sell the currency
in the future at a price above the devaluation level it anticipates. It is

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possible that, under certain circumstances, the Fund may have to limit its
currency transactions to permit the Fund to qualify as a "regulated investment
company" under the Internal Revenue Code of 1986, as amended ("Code"). Foreign
currency transactions would involve a cost to the Fund, which would vary with
such factors as the currency involved, the length of the contact period and the
market conditions then prevailing.

The Fund will not attempt to hedge all its foreign investments by selling
foreign currencies forward and will do so only to the extent deemed appropriate
by the Adviser.

USE OF SEGREGATED AND OTHER SPECIAL ACCOUNTS. Many Strategic Transactions, in
addition to other requirements, require that the Fund segregate with its
custodian cash or liquid securities (regardless of type) having an aggregate
value, measured on a daily basis, at least equal to the amount of the
obligations requiring segregation to the extent that the obligations are not
otherwise covered through ownership of the underlying security, financial
instrument or currency. In general, the full amount of any obligation of the
Fund to pay or deliver securities or assets must be covered at all times by (1)
the securities, instruments or currency required to be delivered, or (2) subject
to any regulatory restrictions, an amount of cash or liquid securities at least
equal to the current amount of the obligation must either be identified as
restricted in the Fund's accounting records or be physically segregated in a
separate account at the Fund's custodian. The segregated assets cannot be sold
or transferred unless equivalent assets are substituted in their place or it is
no longer necessary to segregate them. For determining the adequacy of the
liquid securities that have been restricted, the securities will be valued at
market or fair value. If the market or fair value of such securities declines,
additional cash or liquid securities will be restricted on a daily basis so that
the value of the restricted cash or liquid securities, when added to the amount
deposited with the broker as margin, equals the amount of such commitments by
the Fund.

PORTFOLIO TURNOVER

A change in the securities held by the Fund is known as "portfolio turnover."
For the fiscal year ended October 31, 1998, the Fund's portfolio turnover was
158%. For the period of February 20, 1997 (commencement of operations) through
October 31, 1997 the Fund's portfolio turnover was 13%. A high portfolio
turnover rate may cause the Fund to pay higher transaction expenses, including
more commissions and markups, and also result in quicker recognition of capital
gains, resulting in more capital gain distributions that may be taxable to
shareholders. Any short term gain realized on securities will be taxed to
shareholders as ordinary income. See Tax Status.

PORTFOLIO TRANSACTIONS

For the fiscal periods shown below, the Fund paid brokerage fees as follows:

FISCAL PERIOD BROKERAGE FEES
------------------------- -------------------
November 1, 1997 through October 31, 1998 $29,130
February 20, 1997 (commencement of operations) $17,110
through October 31, 1997

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Statement of Additional Information - Global Blue Chip Fund
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<PAGE>

by the Fund to determine if the commissions paid over representative periods are
reasonable in relation to the benefits obtained. The advisory fee of the Adviser
would not be reduced because of its receipt of such brokerage and research
services. To the extent that any research services of value are provided by
broker dealers through or with whom the Fund places portfolio transactions, the
Adviser may be relieved of expenses which it might otherwise bear.

MANAGEMENT OF THE FUND

TRUST
NAME AND ADDRESS POSITION AGE PRINCIPAL OCCUPATION
- ---------------- -------- --- -----------------------------------------

J. Michael Belz (1) Trustee 45 President and Chief Executive Officer of
1635 NE Loop 410 Catholic Life Insurance 1984 to present.
San Antonio, TX
78209

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<PAGE>

TRUST
NAME AND ADDRESS POSITION AGE PRINCIPAL OCCUPATION
- ---------------- -------- --- -----------------------------------------

COMPENSATION TABLE

Total Compensation From U.S. Global
Name Fund Complex1 to Board Members
---- ------------------------------

Richard Hughs $16,000
Clark R. Mandigo $20,200
Frank E. Holmes $0

- ---------------------------
1 Total compensation paid by U.S. Global Fund Complex for period ended October
31, 1998. As of this date there were fifteen funds in the complex. Messrs.
Holmes and Mandigo serve on all fifteen funds.

PRINCIPAL HOLDERS OF SECURITIES

As of ______, 1999, the officers and Trustees of the Fund, as a group, owned
less than 1% of the outstanding shares of the Fund. The Fund is aware of the
following persons who owned of record, or beneficially, more than 5% of the
outstanding shares of the Fund at _______, 1999:

NAME AND ADDRESS OF OWNER % OWNED TYPE OF OWNERSHIP
------------------------- ------- -----------------
[NAME ADDRESS] __% Beneficial
__% Record
__% Record

INVESTMENT ADVISORY SERVICES

U. S. Global Investors, Inc., a Texas corporation, serves as investment adviser
to the Fund pursuant to an advisory agreement dated September 21, 1994. Frank E.
Holmes, President and a Director of the Adviser, as well as a Trustee, President
and Chief Executive Officer of the Trust, beneficially owns more than 25% of the
outstanding voting stock of the Adviser and may be deemed to be a controlling
person of the Adviser.

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<PAGE>

In addition to the services described in the Fund's prospectus, the Adviser
provides the Trust with office space, facilities and simple business equipment,
and provides the services of executive and clerical personnel for administering
the affairs of the Trust. It compensates all personnel, officers and trustees of
the Trust, if such persons are employees of the Adviser or its affiliates,
except that the Trust reimburses the Adviser for part of the compensation of the
Adviser's employees who perform certain legal services for the Trust. The Trust
also pays for state securities law regulatory compliance. The Trust paid the
Adviser $0 for the fiscal year ended October 31, 1998. This amount reflects
fee waivers which reduced advisory fees by $34,337.

The Trust pays all other expenses for its operations and activities. Each of the
Funds of the Trust pays its allocable portion of these expenses. The expenses
borne by the Trust include the charges and expenses of any transfer agents and
dividend disbursing agents, custodian fees, legal and auditing expenses,
bookkeeping and accounting expenses, brokerage commissions for portfolio
transactions, taxes, if any, the advisory fee, extraordinary expenses, expenses
of issuing and redeeming shares, expenses of shareholder and trustee meetings,
expenses of preparing, printing, and mailing proxy statements, reports and other
communications to shareholders, expenses of registering and qualifying shares
for sale, fees of Trustees who are not "interested persons" of the Adviser,
expenses of attendance by officers and trustees at professional meetings of the
Investment Company Institute, the No-Load Mutual Fund Association or similar
organizations, and membership or organization dues of such organizations,
expenses of preparing, typesetting and mailing prospectuses and periodic reports
to current shareholders, fidelity bond premiums, cost of maintaining the books
and records of the Trust, and any other charges and fees not specifically
enumerated.

The advisory agreement was approved by the Board of Trustees of the Trust
(including a majority of the "disinterested Trustees") with respect to the Fund
and will be submitted for approval by shareholders of the Fund at the initial
meeting of shareholders. The advisory agreement provides that it will continue
initially for two years, and from year to year thereafter, with respect to each
fund, as long as it is approved at least annually by (i) a vote of a majority of
the outstanding voting securities of such fund [as defined in the Investment
Company Act of 1940 ("Act")] or the Board of Trustees of the Trust, and (ii) a
vote of a majority of the Trustees who are not parties to the advisory agreement
or "interested persons" of any party thereto cast in person at a meeting called
for the purpose of voting on such approval. The advisory agreement may be
terminated on 60-day written notice by either party and will terminate
automatically if it is assigned.

The Adviser provides investment advice to a variety of clients (the Adviser also
provides investment advice to other mutual funds). Investment decisions for each
client are made with a view to achieving their respective investment objectives.
Investment decisions are the product of many factors in addition to basic
suitability for the particular client involved. Thus, a particular security may
be bought or sold for certain clients even though it could have been bought or
sold for other clients at the same time. Likewise, a particular security may be
bought for one or more clients when one or more other clients are selling the
security. In some instances, one client may sell a particular security to
another client. It also sometimes happens that two or more clients
simultaneously purchase or sell the same security, in which event each day's
transactions in such security are, as far as possible, averaged as to price and
allocated between such clients in a manner which, in the Adviser's opinion, is
equitable to each and in accordance with the amount being purchased or sold by
each. There may be circumstances when purchases or sales of portfolio securities
for one or more clients will have an adverse effect on other clients. The
Adviser employs professional staffs of portfolio managers who draw upon a
variety of resources for research information for the clients.

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<PAGE>

approach to venture capital investing. Investments typically involve early-stage
businesses seeking initial financing as well as more mature businesses in need
of capital for expansion, acquisitions, management buyouts, or recapitalization.
Overall, the Adviser invests in start-up companies in the natural resources or
technology fields.

TRANSFER AGENCY AND OTHER SERVICES

The Transfer Agency Agreement with the Trust provides for each Fund to pay
United Shareholder Services, Inc. ("USSI") an annual fee of $23.00 per account
(1/12 of $23.00 monthly). In connection with obtaining and/or providing
administrative services to the beneficial owners of Trust shares through
broker-dealers, banks, trust companies and similar institutions which provide
such services and maintain an omnibus account with the Transfer Agent, each Fund
shall pay to the Transfer Agent a monthly fee equal to one-twelfth (1/12) of
12.5 basis points (.00125) of the value of the shares of the Funds held in
accounts at the institutions, which payment shall not exceed $1.92 multiplied by
the average daily number of accounts holding Trust shares at the institution.
These fees cover the usual transfer agency functions. In addition, the Funds
bear certain other Transfer Agent expenses such as the costs of record retention
and postage, plus the telephone and line charges (including the toll-free 800
service) used by shareholders to contact the Transfer Agent. For the fiscal year
ended October 31, 1998 the Fund paid USSI a total of $10,346 for transfer
agency, lockbox, and printing fees. From February 20, 1997, commencement of
operations, through October 31, 1997, the Fund paid USSI a total of $0 for
transfer agency, lockbox, and printing fees.

USSI maintained the books and records of the Trust and of each Fund of the Trust
until November 1, 1997, at which time Brown Brothers Harriman and Co. assumed
such responsibility. From February 20, 1997, commencement of operations, through
October 31, 1997, the Fund paid USSI a total of $0 for portfolio accounting
services net of fee waivers.

A & B Mailers, Inc., a corporation wholly owned by the Adviser, provides the
Trust with certain mail handling services. The charges for such services have
been negotiated by the Audit Committee of the Trust and A & B Mailers, Inc. Each
service is priced separately.

DISTRIBUTION PLAN

The Fund has adopted a distribution plan pursuant to Rule 12b-1 of the 1940 Act
("Distribution Plan"). The distribution plan allows the Fund to pay for or
reimburse expenditures in connection with sales and promotional services related
to the distribution of Fund shares, including personal services provided to
prospective and existing Fund shareholders, and includes the costs of: printing
and distribution of prospectuses and promotional materials, making slides and
charts for presentations, assisting shareholders and prospective investors in
understanding and dealing with the Fund, and travel and out-of-pocket expenses
(e.g., copy and long distance telephone charges) related thereto.

The total amount expended pursuant to the distribution plan may not exceed 0.25%
of the Fund's net assets annually. For the fiscal year ended October 31, 1998,
the Fund incurred a total of $6,870 in distribution fees. The majority of these
fees were used to pay for printing and mailing of prospectuses. Distribution
expenses paid by the Adviser or other third parties in prior periods that
exceeded 0.25% of net assets may be paid by the Fund with distribution expenses
accrued pursuant to the 12b-1 plan in the current or future periods, so long as
the 0.25% limitation is never exceeded.

Expenses the Fund incurs pursuant to the distribution plan are reviewed
quarterly by the Board of Trustees. The distribution plan is reviewed annually
by the Board of Trustees as a whole, and the Trustees who are not "interested
persons" as that term is defined in the 1940 Act and who have no direct or
indirect financial interest in the operation of the distribution plan
("Qualified Trustees"). In their review of the distribution plan, the Board as a
whole and the Qualified Trustees separately determine whether, in their
reasonable business judgment and considering their fiduciary duties under state
law and Section 36(a) and (b) of the 1940 Act, there is a reasonable likelihood
that the distribution plan will benefit the Fund and its shareholders. The
distribution plan may be terminated at any time by vote of a majority of the
Qualified Trustees or by vote of a majority of the outstanding voting securities
of the Fund.

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<PAGE>

The Fund is unaware of any Trustee or any interested person of the Fund who had
a direct or indirect financial interest in the operations of the distribution
plan.

The Fund expects that the distribution plan will be used primarily to pay a
"service fee" to persons who provide personal services to prospective and
existing Fund shareholders. Shareholders of the Fund will benefit from these
personal services, and the Fund expects to benefit from economies of scale as it
attracts more shareholders.

CERTAIN PURCHASES OF SHARES OF THE FUND

The following information supplements the discussion of how to buy Fund shares
as discussed in the Fund's prospectus.

Shares of the Fund are continuously offered by the Trust at their net asset
value next determined after an order is accepted. The methods available for
purchasing shares of the Fund are described in the Prospectus. In addition,
shares of the Fund may be purchased using stock, so long as the securities
delivered to the Trust meet the investment objectives and concentration policies
of the Fund, and are otherwise acceptable to the Adviser, which reserves the
right to reject all or any part of the securities offered in exchange for shares
of the Fund. On any such "in kind" purchase, the following conditions will
apply:

(1) the securities offered by the investor in exchange for shares of the Fund
must not be in any way restricted as to resale or otherwise be illiquid;

(2) securities of the same issuer must already exist in the Fund's portfolio;

(3) the securities must have a value that is readily ascertainable (and not
established only by evaluation procedures) as evidenced by a listing on
the NYSE, or Nasdaq-AMEX;

(4) any securities so acquired by any fund shall not comprise over 5% of that
fund's net assets at the time of such exchange;

(5) no over-the-counter securities will be accepted unless the principal
over-the-counter market is in the United States; and,

(6) the securities are acquired for investment and not for resale.

An investor who wishes to make an "in kind" purchase should furnish a list
(either in writing or by telephone) to the Trust with a full and exact
description of all of the securities he or she proposes to deliver. The Trust
will advise him or her as to those securities it is prepared to accept and will
provide the investor with the necessary forms to be completed and signed by the
investor. The investor should then send the securities, in proper form for
transfer, with the necessary forms to the Trust and certify that there are no
legal or contractual restrictions on the free transfer and sale of the
securities. The securities will be valued as of the close of business on the day
of receipt by the Trust in the same manner as portfolio securities of the Fund
are valued. See the section entitled Net Asset Value in the prospectus. The
number of shares of the Fund, having a net asset value as of the close of
business on the day of receipt equal to the value of the securities delivered by
the investor, will be issued to the investor, less applicable stock transfer
taxes, if any.

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<PAGE>

The exchange of securities by the investor pursuant to this offer is a taxable
transaction and may result in a gain or loss for Federal income tax purposes.
Each investor should consult his or her tax adviser to determine the tax
consequences under Federal and state law of making such an "in kind" purchase.

ADDITIONAL INFORMATION ON REDEMPTIONS

The following information supplements the discussion of how to redeem Fund
shares as discussed in the Fund's prospectus.

SUSPENSION OF REDEMPTION PRIVILEGES. The Trust may suspend redemption privileges
or postpone the date of payment for up to seven days, but cannot do so for more
than seven days after the redemption order is received except during any period
(1) when the NYSE is closed, other than customary weekend and holiday closings,
or trading on the Exchange is restricted as determined by the Securities and
Exchange Commission ("SEC"); (2) when an emergency exists, as defined by the
SEC, which makes it not practicable for the Trust to dispose of securities owned
by it or to determine fairly the value of its assets; or (3) as the SEC may
otherwise permit.

REDEMPTION IN KIND. The Trust reserves the right to redeem shares of the Fund in
cash or in kind. However, the Trust has elected to be governed by Rule 18f-1
under the Investment Company Act of 1940, pursuant to which the Trust is
obligated to redeem shares of the Fund solely in cash up to the lesser of
$250,000 or one percent of the net asset value of the Fund during any 90-day
period for any one shareholder. Any shareholder of the Fund receiving a
redemption in kind would then have to pay brokerage fees to convert his Fund
investment into cash. All redemptions in kind will be made in marketable
securities of the Fund.

CALCULATION OF PERFORMANCE DATA

P(1+T) SUP n = ERV

The calculation assumes that (1) all charges are deducted from the initial
$1,000 payment, (2) all dividends and distributions by the Fund are reinvested
at the price stated in the prospectus on the reinvestment dates during the
period and (3) all recurring fees charged to all shareholder accounts are
included.

The annual total return for the Fund for the fiscal year ended October 31, 1998,
was (31.12)%. This number has not been annualized.

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<PAGE>

TAX STATUS

The Code imposes a non-deductible 4% excise tax on a regulated investment
company that fails to distribute during each calendar year an amount equal to
the sum of (1) at least 98% of its ordinary income for the calendar year, (2) at
least 98% of its capital gain net income for the twelve-month period ending on
October 31 of the calendar year, and (3) any part (not taxable to the Fund) of
the respective balance from the preceding calendar year. The Fund intends to
make such distributions as are necessary to avoid imposition of this excise tax.

TAXATION OF THE SHAREHOLDER. Taxable distributions generally are included in a
shareholder's gross income for the taxable year in which they are received.
However, dividends declared in October, November or December and paid to
shareholders of record in such a month, will be deemed to have been received on
December 31 if a Fund pays the dividends during the following January.

Distributions by the Fund will result in a reduction in the fair market value of
the Fund's shares. Should a distribution reduce the fair market value below a
shareholder's cost basis, such distribution nevertheless would be taxable to the
shareholder as ordinary income or long-term capital gain, even though, from an
investment standpoint, it may constitute a partial return of capital. In
particular, investors should be careful to consider the tax implications of
buying shares of the Fund just prior to a distribution. The price of such shares
purchased then includes the amount of any forthcoming distribution. Those
investors purchasing the Fund's shares immediately before a distribution may
receive a return of investment upon distribution, which will nevertheless be
taxable to them.

A shareholder of the Fund should be aware that a redemption of shares (including
any exchange into other funds offered, affiliated or administered by U. S.
Global Investors, Inc.) is a taxable event and, accordingly, a capital gain or
loss may be recognized. If a shareholder of the Fund receives a distribution
taxable as long-term capital gain with respect to shares of the Fund and redeems
or exchanges shares before he has held them for more than six months, any loss
on the redemption or exchange (not otherwise disallowed as attributable to an
exempt-interest dividend) will be treated as long-term capital loss to the
extent of the long-term capital gain recognized.

CUSTODIAN, FUND ACCOUNTANT AND ADMINISTRATOR

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<PAGE>

administrative services. Services with respect to retirement accounts will be
provided by Security Trust and Financial Company of San Antonio, Texas, a wholly
owned subsidiary of the Adviser.

UNDERWRITER/DISTRIBUTOR

INDEPENDENT ACCOUNTANTS

PricewaterhouseCoopers LLP, 160 Federal Street, Boston, Massachusetts 02110 is
the independent accountant for the Trust.

FINANCIAL STATEMENTS

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Statement of Additional Information - Global Blue Chip Fund
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================================================================================

U.S. GLOBAL ACCOLADE FUNDS

REGENT EASTERN EUROPEAN FUND

Statement Of Additional Information

This Statement of Additional Information is not a prospectus, but should be read
in conjunction with the current prospectus ("Prospectus") dated March 1, 1999.
The financial statements for the Regent Eastern European Fund for the year ended
October 31, 1998, and the Report of Independent Auditors thereon, are
incorporated by reference from the Fund's Annual Report dated October 31, 1998.
Copies of the Prospectus and the Fund's financial statements may be requested
from U.S. Global Investors, Inc. ("Adviser"), 7900 Callaghan Road, San Antonio,
Texas 78229 or 1-800- US-FUNDS (1-800-873-8637).

The date of this Statement of Additional Information is March 1, 1999.

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

<PAGE>

TABLE OF CONTENTS
PAGE

GENERAL INFORMATION............................................................3

FUND POLICIES..................................................................3

INVESTMENT STRATEGIES AND RISKS................................................4

STRATEGIC TRANSACTIONS........................................................11

PORTFOLIO TURNOVER............................................................16

PORTFOLIO TRANSACTIONS........................................................16

MANAGEMENT OF THE FUND........................................................16

PRINCIPAL HOLDERS OF SECURITIES...............................................18

INVESTMENT ADVISORY SERVICES..................................................18

TRANSFER AGENCY AND OTHER SERVICES............................................20

DISTRIBUTION PLAN.............................................................20

CERTAIN PURCHASES OF SHARES OF THE FUND.......................................21

ADDITIONAL INFORMATION ON REDEMPTIONS.........................................22

CALCULATION OF PERFORMANCE DATA...............................................22

TAX STATUS....................................................................22

CUSTODIAN, FUND ACCOUNTANT AND ADMINISTRATOR..................................23

UNDERWRITER/DISTRIBUTOR.......................................................24

INDEPENDENT ACCOUNTANTS.......................................................24

FINANCIAL STATEMENTS..........................................................24

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Statement of Additional Information - Regent Eastern European Fund
Page 2

<PAGE>

GENERAL INFORMATION

U.S. Global Accolade Funds ("Trust") is an open-end management investment
company and is a business trust organized April 16, 1993 under the laws of the
Commonwealth of Massachusetts. There are several series within the Trust, each
of which represents a separate diversified portfolio of securities
("Portfolio"). This Statement of Additional Information ("SAI") presents
important information concerning the Regent Eastern European Fund ("Fund") and
should be read in conjunction with the Prospectus. The Fund commenced operations
on March 31, 1997.

The Trust's Master Trust Agreement provides that no annual or regular meeting of
shareholders is required. The Trustees serve for six-year terms. Thus, there
will ordinarily be no shareholder meetings unless otherwise required by the
Investment Company Act of 1940.

Shares have no preemptive or subscription rights and are fully transferable.
There are no conversion rights.

FUND POLICIES

The following information supplements the discussion of the Fund's investment
objectives and policies discussed in the Fund's Prospectus.

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Statement of Additional Information - Regent Eastern European Fund
Page 3

<PAGE>

FUNDAMENTAL INVESTMENT RESTRICTIONS. The Fund will not change any of the
following investment restrictions without the affirmative vote of a majority of
the outstanding voting securities of the Fund, which, as used herein, means the
lesser of: (1) 67% of that Fund's outstanding shares present at a meeting at
which more than 50% of the outstanding shares of that Fund are represented
either in person or by proxy, or (2) more than 50% of that Fund's outstanding
shares.

The Fund may not:

(1) Issue senior securities.

(2) Borrow money, except that the Fund may borrow not in excess of 5% of its
total assets from banks as a temporary measure for extraordinary purposes,
may borrow up to 331/3% of the amount of its total assets (reduced by the
amount of all liabilities and indebtedness other than such borrowing) when
deemed desirable or appropriate to effect redemptions provided, however,
that the Fund will not purchase additional securities while borrowings
exceed 5% of the total assets of the Fund.

(3) Underwrite the securities of other issuers.

(4) Invest in real estate.

(5) Engage in the purchase or sale of commodities or commodity futures
contracts, except that the Fund may invest in futures contracts, forward
contracts, options, and other derivative investments in conformance with
policies disclosed in the Fund's then current Prospectus and/or Statement
of Additional Information.

(7) Purchase any security on margin, except that it may obtain such short-term
credits as are necessary for clearance of securities transactions.

(8) Sell short more than 5% of its total assets.

(10) With respect to 75% of its total assets, the Fund will not: (a) invest
more than 5% of the value of its total assets in securities of any one
issuer, except such limitation shall not apply to obligations issued or
guaranteed by the United States ("U.S.") Government, its agencies or
instrumentalities; or (b) acquire more than 10% of the voting securities
of any one issuer.

(11) Invest more than 10% of its total net assets in investment companies. To
the extent that the Fund shall invest in open-end investment companies,
the Fund's Adviser and Sub-Adviser shall waive a proportional amount of
their management fee.

INVESTMENT STRATEGIES AND RISKS

The following information supplements the discussion of the Fund's investment
strategies and risks in the Fund's Prospectus.

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Statement of Additional Information - Regent Eastern European Fund
Page 4

<PAGE>

MARKET RISK. Investments in equity and debt securities are subject to inherent
market risks and fluctuations in value due to earnings, economic conditions,
quality ratings and other factors beyond the adviser's control. Therefore, the
return and net asset value of the Fund will fluctuate.

LENDING OF PORTFOLIO SECURITIES. The Fund may lend securities to broker-dealers
or institutional investors for their use in connection with short sales,
arbitrages and other securities transactions. This is a fundamental policy which
cannot be changed without a vote by shareholders. The Fund will not lend
portfolio securities unless the loan is secured by collateral (consisting of any
combination of cash, United States Government securities or irrevocable letters
of credit) in an amount at least equal (on a daily marked-to-market basis) to
the current market value of the securities loaned. In the event of a bankruptcy
or breach of agreement by the borrower of the securities, the Fund could
experience delays and costs in recovering the securities loaned. The Fund will
not enter into securities lending agreements unless its custodian bank/lending
agent will fully indemnify the Fund against loss due to borrower default. The
Fund may not lend securities with an aggregate market value of more than
one-third of the Fund's total net assets.

BORROWING. The Fund may have to deal with unpredictable cashflows as
shareholders purchase and redeem shares. Under adverse conditions, the Fund
might have to sell portfolio securities to raise cash to pay for redemptions at
a time when investment considerations would not favor such sales. In addition,
frequent purchases and sales of portfolio securities tend to decrease fund
performance by increasing transaction expenses.

The Fund will not purchase any security while borrowings represent more than 5%
of total assets.

COMMERCIAL PAPER AND OTHER MONEY MARKET INSTRUMENTS. Commercial paper consists
of short-term (usually from one to two hundred-seventy days) unsecured
promissory notes issued by corporations in order to finance their current
operations. Certain notes may have floating or variable rates. Variable and
floating rate notes with a demand notice period exceeding seven days will be
subject to the Fund's restriction on illiquid investments unless, in the
judgment of the Sub-Adviser, such note is liquid.

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Statement of Additional Information - Regent Eastern European Fund
Page 5

<PAGE>

parent company and the relationships which exist with the issuer; and,
recognition by the management of obligations which may be present or may arise
as a result of public interest questions and preparations to meet such
obligations. These factors are all considered in determining whether the
commercial paper is rated Prime-1. Commercial paper rated A (highest quality) by
Standard & Poor's Ratings Group has the following characteristics: liquidity
ratios are adequate to meet cash requirements; long-term senior debt is rated
"A" or better, although in some cases "BBB" credits may be allowed; the issuer
has access to at least two additional channels of borrowing; basic earnings and
cash flow have an upward trend with allowance made for unusual circumstances;
typically, the issuer's industry is well established and the issuer has a strong
position within the industry; and, the reliability and quality of management are
unquestioned. The relative strength or weakness of the above factors determines
whether the issuer's commercial paper is rated A-1.

The Fund may invest in short-term bank debt instruments such as certificates of
deposit, bankers' acceptances and time deposits issued by national banks and
state banks, trust companies and mutual savings banks, or by banks or
institutions the accounts of which are insured by the Federal Deposit Insurance
Corporation or the Federal Savings and Loan Insurance Corporation. The Fund will
only invest in bankers' acceptances of banks having a short-term rating of A-1
by Standard & Poor's Ratings Group or Prime-1 by Moody's Investors Service, Inc.
The Fund will not invest in time deposits maturing in more than seven days if,
as a result thereof, more than 15% of the value of its net assets would be
invested in such securities and other illiquid securities.

FOREIGN INVESTMENTS. Investing in securities issued by companies whose principal
business activities are outside the United States may involve significant risks
not present in domestic investments. For example, there is generally less
publicly available information about foreign companies, particularly those not
subject to the disclosure and reporting requirements of the United States
securities laws. Foreign issuers are generally not bound by uniform accounting,
auditing, and financial reporting requirements and standards of practice
comparable to those applicable to domestic issuers. Investments in foreign
securities also involve the risk of possible adverse changes in investment or
exchange control regulations, foreign exchange rates, expropriation or
confiscatory taxation, limitation of the removal of funds or other assets of the
Fund, political or financial instability or diplomatic and other developments
that could affect such investment. In addition, economies of particular
countries or areas of the world may differ favorably or unfavorably from the
economy of the United States. It is anticipated that in most cases the best
available market for foreign securities will be on exchanges or in
over-the-counter markets located outside of the United States. Foreign stock
markets, while growing in volume and sophistication, are generally not as
developed as those in the United States, and securities of some foreign issuers
(particularly those located in developing countries) may be less liquid and more
volatile than securities of comparable United States companies. In addition,
foreign brokerage commissions are generally higher than commissions on
securities traded in the United States and may be non-negotiable. In general,
there is less overall governmental supervision and regulation of foreign
securities markets, broker-dealers, and issuers than in the United States.

ADRS AND GDRS. The Fund may invest in sponsored or unsponsored American
Depository Receipts ("ADRs") or Global Depository Receipts ("GDRs") representing
shares of companies located in the Eastern Europe region. ADRs are depository
receipts typically issued by a U.S. bank or trust company that evidence
ownership of underlying securities issued by a foreign corporation. GDRs are
typically issued by foreign banks or trust companies, although they also may be
issued by U.S. banks or trust companies, and evidence ownership of underlying
securities issued by either a foreign or a United States corporation. Generally,
depository receipts in registered form are designed for use in the U.S.
securities market, and depository receipts in bearer form are designed for use
in securities markets outside the United States. Depository receipts may not
necessarily be denominated in the same currency as the underlying securities
into which they may be converted. In addition, the issuers of the securities
underlying unsponsored depository receipts are not obligated to disclose
material information in the United States; and, therefore, there may be less
information available regarding such issuers and there may not be a correlation
between such information and the market value of the depository receipts. For
purposes of the Fund's investment policies, the Fund's investments in depository
receipts will be deemed to be investments in the underlying securities.

EMERGING MARKETS. Investing in emerging markets involves risks and special
considerations not typically associated with investing in other more established
economies or securities markets. Investors should carefully consider their
ability to assume the risks listed below before making an investment in the
Fund. Investing in emerging markets is considered speculative and involves the
risk of total loss. Because the Fund's investments will be subject to the market

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fluctuations and risks inherent in all investments, there can be no assurance
that the Fund's stated objective will be realized. The Fund's Adviser and
Sub-Adviser will seek to minimize these risks through professional management
and investment diversification. As with any long-term investment, the value of
shares when sold may be higher or lower than when purchased.

Risks of investing in emerging markets include:

(1) the risk that the Fund's assets may be exposed to nationalization,
expropriation, or confiscatory taxation;

(2) the fact that emerging market securities markets are substantially smaller,
less liquid and more volatile than the securities markets of more developed
nations The relatively small market capitalization and trading volume of
emerging market securities may cause the Fund's investments to be compara-
tively less liquid and subject to greater price volatility than investments
in the securities markets of developed nations. Many emerging markets are
in their infancy and have yet to be exposed to a major correction. In the
event of such an occurrence, the absence of various market mechanisms,
which are inherent in the markets of more developed nations, may lead
to turmoil in the market place, as well as the inability of the Fund to
liquidate its investments;

(3) greater social, economic and political uncertainty (including the risk of
war);

(4) greater price volatility, substantially less liquidity and significantly
smaller market capitalization of securities markets;

(5) currency exchange rate fluctuations and the lack of available currency
hedging instruments;

(6) higher rates of inflation;

(7) controls on foreign investment and limitations on repatriation of
invested capital and on the Fund's ability to exchange local currencies
for U.S. dollars;

(8) greater governmental involvement in and control over the economy;

(9) the fact that emerging market companies may be smaller, less seasoned and
newly organized;

(10) the difference in, or lack of, auditing and financial reporting standards
that may result in unavailability of material information about issuers;

(11) the fact that the securities of many companies may trade at prices
substantially above book value, at high price/earnings ratios, or at
prices that do not reflect traditional measures of value;

(13) less extensive regulation of the securities markets;

(14) certain considerations regarding the maintenance of Fund portfolio
securities and cash with foreign sub-custodians and securities
depositories;

(15) the risk that it may be more difficult, or impossible, to obtain and/or
enforce a judgment than in other countries;

(16) the risk that the Fund may be subject to income, capital gains or
withholding taxes imposed by emerging market countries or other foreign
governments. The Fund intends to elect, when eligible, to "pass through"
to the Fund's shareholders the amount of foreign income tax and similar
taxes paid by the Fund. The foreign taxes passed through to a shareholder
would be included in the shareholder's income and may be claimed as a
deduction or credit. Other taxes, such as transfer taxes, may be imposed
on the Fund, but would not give rise to a credit or be eligible to be
passed through to the shareholders;

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(18) the risk that enterprises in which the Fund invests may be or become
subject to unduly burdensome and restrictive regulation affecting the
commercial freedom of the invested company and thereby diminishing the
value of the Fund's investment in it. Restrictive or over regulation may
therefore be a form of indirect nationalization;

(19) the risk that businesses in emerging markets have only a very recent
history of operating within a market-oriented economy. In general,
relative to companies operating in western economies, companies in
emerging markets are characterized by a lack of (i) experienced
management, (ii) modern technology and (iii) sufficient capital base with
which to develop and expand their operations. It is unclear what will be
the effect on companies in emerging markets, if any, of attempts to move
towards a more market-oriented economy;

(20) the fact that investments in equity securities are subject to inherent
market risks and fluctuations in value due to earnings, economic
conditions, quality ratings and other factors beyond the control of the
Adviser or Sub- Adviser. As a result, the return and net asset value of
the Fund will fluctuate;

(21) the fact that the Sub-Adviser may engage in hedging transactions in an
attempt to hedge the Fund's foreign securities investments back to the U.S.
dollar when, in its judgment, currency movements affecting particular
investments are likely to harm the performance of the Fund. Possible losses
from changes in currency exchange rates are primarily a risk of unhedged
investing in foreign securities. While a security may perform well in a
foreign market, if the local currency declines against the U.S. dollar,
gains from the investment can disappear or become losses. Typically,
currency fluctuations are more extreme than stock market fluctuations.
Accordingly, the strength or weakness of the U.S. dollar against foreign
currencies may account for part of the Fund's performance even when the
Sub-Adviser attempts to minimize currency risk through hedging activities.
While currency hedging may reduce portfolio volatility, there are costs
associated with such hedging, including the loss of potential profits,
losses on hedging transactions, and increased transaction expenses; and

WHEN-ISSUED OR DELAYED DELIVERY SECURITIES. The Fund may purchase securities on
a when-issued or delayed delivery basis. Securities purchased on a when-issued
or delayed delivery basis are purchased for delivery beyond the normal
settlement date at a stated price and yield. No income accrues to the purchaser
of a security on a when-issued or delayed delivery basis prior to delivery. Such
securities are recorded as an asset and are subject to changes in value based on
changes in the general level of interest rates. Purchasing a security on a
when-issued or delayed delivery basis can involve a risk that the market price
at the time of delivery may be lower than the agreed upon purchase price, in
which case there could be an unrealized loss at the time of delivery. The Fund
will only make commitments to purchase securities on a when-issued or delayed
delivery basis with the intention of actually acquiring the securities, but may
sell them before the settlement date if it is deemed advisable. The Fund will
restrict liquid securities in an amount at least equal in value to the Fund's
commitments to purchase securities on a when-issued or delayed delivery basis.
If the value of these restricted assets declines, the Fund will place additional
liquid assets in the account on a daily basis so that the value of the assets in
the account is equal to the amount of such commitments.

LOWER-RATED AND UNRATED DEBT SECURITIES. The Fund may invest up to 5% of its
total assets in debt rated less than investment grade (or unrated) by Standard &
Poor's Corporation (Chicago), Moody's Investors Service (New York), Duff &
Phelps (Chicago), Fitch Investors Service (New York), Thomson Bankwatch (New
York), Canadian Bond Rating Service (Montreal), Dominion Bond Rating Service
(Toronto), IBCA (London), The Japan Bond Research Institute (Tokyo), Japan
Credit Rating Agency (Tokyo), Nippon Investors Service (Tokyo), or S&P-ADEF
(Paris). In calculating the 5% limitation, a debt security will be considered
investment grade if any one of the above listed credit rating agencies rates the
security as investment grade.

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Overall, the market for lower-rated or unrated bonds may be thinner and less
active, such bonds may be less liquid and their market prices may fluctuate more
than those of higher-rated bonds, particularly in times of economic change and
market stress. In addition, because the market for lower-rated or unrated
corporate debt securities has in recent years experienced a dramatic increase in
the large-scale use of such securities to fund highly leveraged corporate
acquisitions and restructuring, past experience may not provide an accurate
indication of the future performance of that market or of the frequency of
default, especially during periods of economic recession. Reliable objective
pricing data for lower- rated or unrated bonds may tend to be more limited; in
that event, valuation of such securities in the Fund's portfolio may be more
difficult and will require greater reliance on judgment.

Since the risk of default is generally higher among lower-rated or unrated
bonds, the Sub-Adviser's research and analysis are especially important in the
selection of such bonds, which are often described as "high yield bonds" because
of their generally higher yields and referred to figuratively as "junk bonds"
because of their greater risks.

In selecting lower-rated bonds for investment by the Fund, the Sub-Adviser does
not rely exclusively on ratings, which in any event evaluate only the safety of
principal and interest, not market value risk, and which furthermore, may not
accurately reflect an issuer's current financial condition. The Fund does not
have any minimum rating criteria for its investments in bonds. Through portfolio
diversification, good credit analysis and attention to current developments and
trends in interest rates and economic conditions, investment risk can be
reduced, although there is no assurance that losses will not occur.

RESTRICTED SECURITIES. The Fund may, from time to time, purchase securities that
are subject to restrictions on resale. While such purchases may be made at an
advantageous price and offer attractive opportunities for investment not
otherwise available on the open market, the Fund may not have the same freedom
to dispose of such securities as in the case of the purchase of securities in
the open market or in a public distribution. These securities may often be
resold in a liquid dealer or institutional trading market, but the Fund may
experience delays in its attempts to dispose of such securities. If adverse
market conditions develop, the Fund may not be able to obtain as favorable a
price as that prevailing at the time the decision is made to sell. In any case,
where a thin market exists for a particular security, public knowledge of a
proposed sale of a large block may have the effect of depressing the market
price of such securities.

REPURCHASE AGREEMENTS. The Fund may invest a portion of its assets in repurchase
agreements with United States broker-dealers, banks and other financial
institutions, provided the Fund's custodian always has possession of securities
serving as collateral or has evidence of book entry receipt of such securities.

In a repurchase agreement, the Fund purchases securities subject to the seller's
agreement to repurchase such securities at a specified time (normally one day)
and price. The repurchase price reflects an agreed upon interest rate during the
time of investment. All repurchase agreements must be collateralized by United
States Government or government agency securities, the market values of which
equal or exceed 102% of the principal amount of the repurchase obligation. If an
institution enters an insolvency proceeding, the resulting delay in liquidation
of securities serving as collateral could cause the Fund some loss if the value
of the securities declined prior to liquidation. To minimize the risk of loss,
the Fund will enter into repurchase agreements only with institutions and
dealers which the Board of Trustees considers creditworthy.

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GOVERNMENT AND CORPORATE DEBT. U.S. Government obligations include securities
which are issued or guaranteed by the United States Treasury, by various
agencies of the United States Government, and by various instrumentalities
which have been established or sponsored by the United States Government.
U.S. Treasury obligations are backed by the "full faith and credit" of the
U.S. Government. U.S. Treasury obligations include Treasury bills, Treasury
notes and Treasury bonds. Agencies or instrumentalities established by the
United States Government include the Federal Home Loan Bank, the Federal Land
Bank, the Government National Mortgage Association, the Federal National
Mortgage Association, the Federal Home Loan Mortgage Corporation, and the
Student Loan Marketing Association.

QUALITY RATINGS OF CORPORATE BONDS. The ratings of Moody's Investors Service,
Inc. and Standard & Poor's Ratings Group for corporate bonds in which the Fund
may invest are as follows:

STANDARD & POOR'S RATINGS GROUP. AAA - Bonds rated AAA have the highest
rating assigned by Standard & Poor's to a debt obligation. Capacity to
pay interest and repay principal is extremely strong.

AA - Bonds rated AA have a very strong capacity to pay interest and
repay principal and differ from the highest rated issues only in small
degree.

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STRATEGIC TRANSACTIONS

The Fund may purchase and sell exchange-listed and over-the-counter put and call
options on securities, equity and fixed-income indices and other financial
instruments, purchase and sell financial futures contracts and options thereon,
and enter into various currency transactions such as currency forward contracts,
currency futures contracts, options on currencies or currency futures
(collectively, all the above are called "Strategic Transactions"). The Fund may
engage in Strategic Transactions for hedging, risk management, or portfolio
management purposes, but not for speculation, and it will comply with applicable
regulatory requirements when implementing these strategies, techniques and
instruments.

Strategic Transactions may be used to attempt (1) to protect against possible
changes in the market value of securities held in or to be purchased for the
Fund's portfolio resulting from securities markets or currency exchange rate
fluctuations, (2) to protect the Fund's unrealized gains in the value of its
portfolio securities, (3) to facilitate the sale of such securities for
investment purposes, (4) to manage the effective maturity or duration of the
Fund's portfolio, or (5) to establish a position in the derivatives markets as a
temporary substitute for purchasing or selling particular securities. The Fund's
ability to successfully use these Strategic Transactions will depend upon the
Sub-Adviser's ability to predict pertinent market movements, and cannot be
assured. Engaging in Strategic Transactions will increase transaction expenses
and may result in a loss that exceeds the principal invested in the
transactions.

Strategic Transactions have risk associated with them including possible default
by the other party to the transaction, illiquidity and, to the extent the
Sub-Adviser's view as to certain market movements is incorrect, the risk that
the use of such Strategic Transactions could result in losses greater than if
they had not been used. Use of put and call options may result in losses to the
Fund. For example, selling call options may force the sale of portfolio
securities at inopportune times or for lower prices than current market values.
Selling call options may also limit the amount of appreciation the Fund can
realize on its investments or cause the Fund to hold a security it might
otherwise sell. The use of currency transactions can result in the Fund
incurring losses as a result of a number of factors including the imposition of
exchange controls, suspension of settlements, or the inability to deliver or
receive a specified currency. The use of options and futures transactions
entails certain other risks. In particular, the variable degree of correlation
between price movements of futures contracts and price movements in the related
portfolio position of the Fund creates the possibility that losses on the
hedging instrument may be greater than gains in the value of the Fund's
position. In addition, futures and option markets may not be liquid in all
circumstances and certain over-the-counter options may

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have no markets. As a result, in certain markets, the Fund might not be able to
close out a transaction, and substantial losses might be incurred. However, the
use of futures and options transactions for hedging should tend to minimize the
risk of loss due to a decline in the value of a hedged position. At the same
time they tend to limit any potential gain that might result from an increase in
value of such position. Finally, the daily variation margin requirement for
futures contracts would create a greater on going potential financial risk than
would purchases of options, where the exposure is limited to the cost of the
initial premium. Losses resulting from the use of Strategic Transactions would
reduce net asset value, and possibly income, and such losses can be greater than
if the Strategic Transactions had not been used.

The Fund's activities involving Strategic Transactions may be limited by the
requirements of Subchapter M of the Internal Revenue Code for qualification as a
regulated investment company.

FUTURES CONTRACTS. The Fund may sell futures contracts to hedge against a
decline in the market price of securities it owns or to defend the portfolio
against currency fluctuations. When the Fund establishes a short position by
selling a futures contract, the Fund will be required to deposit with the broker
an amount of cash or U.S. Treasury bills equal to approximately 5% of the
contract amount ("initial margin"). The nature of initial margin in futures
transactions is different from that of margin in securities transactions in that
futures contract margin does not involve the borrowing of funds by the customer
to finance the transactions. Rather, initial margin is in the nature of a
performance bond or good faith deposit on the contract is returned to the Fund
upon termination of the futures contract assuming all the Fund's contractual
obligations have been satisfied. Subsequent payments, called variation margin,
to and from the broker will be made on a daily basis as the price of the
underlying currency or stock index fluctuates making a short position in the
futures contract more or less valuable, a process known as "marking-to-market."
For example, when the Fund has sold a currency futures contract and the prices
of the stocks included in the underlying currency has fallen, that position will
have increased in value and the Fund will receive from the broker a variation
margin payment equal to that increase in value. Conversely, when the Fund has
sold a currency futures contract and the prices of the underlying currency has
risen, the position would be less valuable and the Fund would be required to
make a variation margin payment to the broker. At any time before expiration of
the futures contract, the Fund may elect to close the position by taking an
opposite position, which will operate to terminate the Fund's position in the
futures contract. A final determination of variation margin is then made,
additional cash is required to be paid by or released to the Fund, and it
realizes a loss or a gain.

There is a risk that futures contract price movements will not correlate
perfectly with movements in the value of the underlying stock index. For a
number of reasons the price of the stock index future may move more than or less
than the price of the securities that make up the index. First, all participants
in the futures market are subject to margin deposit and maintenance
requirements. Rather than meeting additional margin deposit requirements,
investors may close futures contracts through offsetting transactions that could
distort the normal relationship between the index and futures markets. Secondly,
from the point of view of speculators, the deposit requirements in the futures
market are less onerous than margin requirements in the stock market. Therefore,
increased participation by speculators in the futures market may also cause
temporary price distortions.

There is an additional risk that a liquid secondary trading market may not exist
at all times for these futures contracts, in which event the Fund might be
unable to terminate a futures position at a desired time. Positions in stock
index futures may be closed out only on an exchange or board of trade that
provides a secondary market for such futures. Although the Fund intends to
purchase futures only on exchanges or boards of trade where there appears to be
an active secondary market, there is no assurance that a liquid secondary market
on an exchange or board of trade will exist for any particular contract or at
any particular time. If there is not a liquid secondary market at a particular
time, it may not be possible to close a futures position at such time, and in
the event of adverse price movements, the Fund would continue to be required to
make daily cash payments of variation margin.

OPTIONS. The Fund may sell call options or purchase put options on futures
contracts to hedge against a decline in the market price of securities that it
owns or to defend the portfolio against currency fluctuations. Options on
futures contracts differ from options on individual securities in that the
exercise of an option on a futures contract does not involve delivery of an
actual underlying security. Options on futures contracts are settled in cash
only. The purchaser of an option receives a cash settlement amount and the
writer of an option is required, in return for the premium received, to make
delivery of a certain amount if the option is exercised. A position in an option
on a futures contract

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may be offset by either the purchaser or writer by entering into a closing
transaction, or the purchaser may terminate the option by exercising it or
allowing it to expire.

The risks associated with the purchase and sale of options on futures contracts
are generally the same as those relating to options on individual securities.
However, the value of an option on a futures contract depends primarily on
movements in the value of the currency or the stock index underlying the futures
contract rather than in the price of a single security. Accordingly, the Fund
will realize a gain or loss from purchasing or writing an option on a futures
contract as a result of movements in the related currency or in the stock market
generally rather than changes in the price for a particular security. Therefore,
successful use of options on futures contracts by the Fund will depend on the
Adviser's ability to predict movements in the direction of the currency or stock
market underlying the futures contract. The ability to predict these movements
requires different skills and techniques than predicting changes in the value of
individual securities.

Because index options are settled in cash, the Fund cannot be assured of
covering its potential settlement obligations under call options it writes on
futures contracts by acquiring and holding the underlying securities. Unless the
Fund has cash on hand that is sufficient to cover the cash settlement amount, it
would be required to sell securities owned in order to satisfy the exercise of
the option.

As a non-fundamental policy the Fund will not invest more than 5% of its total
net assets in options.

SEGREGATED ASSETS AND COVERED POSITIONS. When purchasing a stock index futures
contract, selling an uncovered call option, or purchasing securities on a
when-issued or delayed delivery basis, the Fund will restrict cash that may be
invested in repurchase obligations or liquid securities. When purchasing a stock
index futures contract, the amount of restricted cash or liquid securities, when
added to the amount deposited with the broker as margin, will be at least equal
to the market value of the futures contract and not less than the market price
at which the futures contract was established. When selling an uncovered call
option, the amount of restricted cash or liquid securities, when added to the
amount deposited with the broker as margin, will be at least equal to the value
of securities underlying the call option and not less than the strike price of
the call option. When purchasing securities on a when-issued or delayed delivery
basis, the amount of restricted cash or liquid securities will be at least equal
to the Fund's when-issued or delayed delivery commitments.

The restricted cash or liquid securities will either be identified as being
restricted in the Fund's accounting records or physically segregated in a
separate account at Brown Brothers Harriman & Co., the Fund's custodian. For the
purpose of determining the adequacy of the liquid securities that have been
restricted, the securities will be valued at market or fair value. If the market
or fair value of such securities declines, additional cash or liquid securities
will be restricted on a daily basis so that the value of the restricted cash or
liquid securities, when added to the amount deposited with the broker as margin,
equals the amount of such commitments by the Fund.

Many strategic transactions, such as futures contracts and options, in addition
to other requirements, require that the Fund segregate with its custodian cash
or liquid securities (regardless of type) having an aggregate value, measured on
a daily basis, at least equal to the amount of the obligations requiring
segregation to the extent that the obligations are not otherwise covered through
ownership of the underlying security, financial instrument or currency. In
general, the full amount of any obligation of the Fund to pay or deliver
securities or assets must be covered at all times by (1) the securities,
instruments or currency required to be delivered, or (2) subject to any
regulatory restrictions, an amount of cash or liquid securities at least equal
to the current amount of the obligation must either be identified as restricted
in the Fund's accounting records or be physically segregated in a separate
account at the Fund's custodian. The segregated assets cannot be sold or
transferred unless equivalent assets are substituted in their place or it is no
longer necessary to segregate them. For determining the adequacy of the liquid
securities that have been restricted, the securities will be valued at market or
fair value. If the market or fair value of such securities declines, additional
cash or liquid securities will be restricted on a daily basis so that the value
of the restricted cash or liquid securities, when added to the amount deposited
with the broker as margin, equals the amount of such commitments by the Fund.

The Fund could cover a call option that it has sold by holding the same currency
or security (or, in the case of a stock index, a portfolio of stock
substantially replicating the movement of the index) underlying the call option.
The Fund may also cover by holding a separate call option of the same security
or stock index with a strike price no higher than

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the strike price of the call option sold by the Fund. The Fund could cover a
call option that it has sold on a futures contract by entering into a long
position in the same futures contract at a price no higher than the strike price
of the call option or by owning the securities or currency underlying the
futures contract. The Fund could also cover a call option that it has sold by
holding a separate call option permitting it to purchase the same futures
contract at a price no higher than the strike price of the call option sold by
the Fund.

FOREIGN CURRENCY TRANSACTIONS. Investments in foreign companies usually involve
use of currencies of foreign countries. The Fund also may hold cash and
cash-equivalent investments in foreign currencies. The value of the Fund's
assets as measured in U.S. dollars will be affected by changes in currency
exchange rates and exchange control regulations. The Fund may, as appropriate
markets are developed, but is not required to, engage in currency transactions
including cash market purchases at the spot rates, forward currency contracts,
exchange listed currency futures, exchange listed and over-the-counter options
on currencies, and currency swaps for two purposes. One purpose is to settle
investment transactions. The other purpose is to try to minimize currency risks.

All currency transactions involve a cost. Although foreign exchange dealers
generally do not charge a fee, they do realize a profit based on the difference
(spread) between the prices at which they are buying and selling various
currencies. Commissions are paid on futures options and swaps transactions, and
options require the payment of a premium to the seller.

A forward contract involves a privately negotiated obligation to purchase or
sell at a price set at the time of the contract with delivery of the currency
generally required at an established future date. A futures contract is a
standardized contract for delivery of foreign currency traded on an organized
exchange that is generally settled in cash. An option gives the right to enter
into a contract. A swap is an agreement based on a nominal amount of money to
exchange the differences between currencies.

The Fund will generally use spot rates or forward contracts to settle a security
transaction or handle dividend and interest collection. When the Fund enters
into a contract for the purchase or sale of a security denominated in a foreign
currency or has been notified of a dividend or interest payment, it may desire
to lock in the price of the security or the amount of the payment in dollars. By
entering into a spot rate or forward contract, the Fund will be able to protect
itself against a possible loss resulting from an adverse change in the
relationship between different currencies from the date the security is
purchased or sold to the date on which payment is made or received or when the
dividend or interest is actually received.

The Fund may use forward or futures contracts, options, or swaps when the
investment manager believes the currency of a particular foreign country may
suffer a substantial decline against another currency. For example, it may enter
into a currency transaction to sell, for a fixed amount of dollars, the amount
of foreign currency approximating the value of some or all of the Fund's
portfolio securities denominated in such foreign currency. The precise matching
of the securities transactions and the value of securities involved generally
will not be possible. The projection of short-term currency market movements is
extremely difficult and successful execution of a short-term strategy is highly
uncertain.

The Fund may engage in proxy hedging. Proxy hedging is often used when the
currency to which a fund's portfolio is exposed is difficult to hedge. Proxy
hedging entails entering into a forward contract to sell a currency whose
changes in value are generally considered to be linked to a currency or
currencies in which some or all of the Fund's portfolio securities are or are
expected to be denominated, and simultaneously buy U.S. dollars. The amount of
the contract would not exceed the value of the Fund's securities denominated in
linked securities.

The Fund will not enter into a currency transaction or maintain an exposure as a
result of the transaction when it would obligate the Fund to deliver an amount
of foreign currency in excess of the value of the Fund's portfolio securities or
other assets denominated in that currency. The Fund will designate cash or
securities in an amount equal to the value of the Fund's total assets committed
to consummating the transaction. If the value of the securities declines,
additional cash or securities will be designated on a daily basis so that the
value of the cash or securities will equal the amount of the Fund's commitment.

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On the settlement date of the currency transaction, the Fund may either sell
portfolio securities and make delivery of the foreign currency or retain the
securities and terminate its contractual obligation to deliver the foreign
currency by purchasing an offsetting position. It is impossible to forecast what
the market value of portfolio securities will be on the settlement date of a
currency transaction. Accordingly, it may be necessary for the Fund to buy
additional foreign currency on the spot market (and bear the expense of such
purchase) if the market value of the securities are less than the amount of
foreign currency the Fund is obligated to deliver and a decision is made to sell
the securities and make delivery of the foreign currency. Conversely, it may be
necessary to sell on the spot market some of the foreign currency received on
the sale of the portfolio securities if its market value exceeds the amount of
foreign currency the Fund is obligated to deliver. The Fund will realize gains
or losses on currency transactions.

The Fund may also buy put options and write covered call options on foreign
currencies to try to minimize currency risks. The risk of buying an option is
the loss of premium. The risk of selling (writing) an option is that the
currency option will minimize the currency risk only up to the amount of the
premium, and then only if rates move in the expected direction. If this does not
occur, the option may be exercised and the Fund would be required to buy the
underlying currency at the loss that may not be offset by the amount of the
premium. Through the writing of options on foreign currencies, the Fund may also
be required to forego all or part of the benefits that might otherwise have been
obtained from favorable movements on exchange rates. All options written on
foreign currencies will be covered; that is, the Fund will own securities
denominated in the foreign currency, hold cash equal to its obligations or have
contracts that offset the options.

The Fund may construct a synthetic foreign currency investment, sometimes called
a structured note, by (a) purchasing a money market instrument that is a note
denominated in one currency, generally U.S. dollars, and (b) concurrently
entering into a forward contract to deliver a corresponding amount of that
currency in exchange for a different currency on a future date and at a
specified rate of exchange. Because the availability of a variety of highly
liquid short-term U.S. dollar market instruments, or notes, a synthetic money
market position utilizing such U.S. dollar instruments may offer greater
liquidity than direct investment in foreign currency.

CURRENCY FLUCTUATIONS--"SECTION 988" GAINS OR LOSSES. Under the Code, gains or
losses attributable to fluctuations in exchange rates which occur between the
time the Fund accrues interest or other receivables, or accrues expenses or
other liabilities denominated in a foreign currency and the time the Fund
actually collects such receivables or pays such liabilities are treated as
ordinary income or ordinary loss. Similarly, gains or losses from the
disposition of foreign currencies or from the disposition of debt securities
denominated in a foreign currency attributable to fluctuations in the value of
the foreign currency between the date of acquisition of the currency or security
and the date of disposition also are treated as ordinary gain or loss. These
gains or losses, referred to under the Code as "section 988" gains or losses,
increase or decrease the amount of the Fund's net investment income (which
includes, among other things, dividends, interest and net short-term capital
gains in excess of net long-term capital losses, net of expenses) available to
be distributed to its shareholders as ordinary income, rather than increasing or
decreasing the amount of the Fund's net capital gain. If section 988 losses
exceed such other net investment income during a taxable year, any distributions
made by the Fund could be recharacterized as a return of capital to
shareholders, rather than as an ordinary dividend, reducing each shareholder's
basis in his Fund shares. To the extent that such distributions exceed such
shareholder's basis, they will be treated as a gain from the sale of shares. As
discussed below, certain gains or losses with respect to forward foreign
currency contracts, over-the-counter options or foreign currencies and certain
options graded on foreign exchanges will also be treated as section 988 gains or
losses.

Forward currency contracts and certain options entered into by the Fund may
create "straddles" for U.S. Federal income tax purposes and this may affect the
character of gains or losses realized by the Fund on forward currency contracts
or on the underlying securities and cause losses to be deferred. The Fund may
also be required to "mark-to-market" certain positions in its portfolio (i.e.,
treat them as if they were sold at year end). This could cause the Fund to
recognize income without having the cash to meet the distribution requirements.

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<PAGE>

PORTFOLIO TURNOVER

A change in the securities held by the Fund is known as "portfolio turnover."
For the period ended October 31, 1998, the Fund's portfolio turnover was 97%.
For the period March 31, 1997 (commencement of operations) to October 31, 1997,
the Fund's portfolio turnover was 11%. A high portfolio turnover rate may cause
the Fund to pay higher transaction expenses, including more commissions and
markups, and also result in quicker recognition of capital gains, resulting in
more capital gain distributions that may be taxable to shareholders. Any short
term gain realized on securities will be taxed to shareholders as ordinary
income. See Tax Status.

PORTFOLIO TRANSACTIONS

The Sub-Adviser may use research services provided by and place agency
transactions with Regent European Securities, an affiliated broker-dealer of the
Sub-Adviser, if the commissions are fair, reasonable and comparable to
commissions charged by non-affiliated, qualified brokerage firms for similar
services. Regent European Securities was established in 1995 as a specialist
broker-dealer in the Russian securities market and has since developed into a
significant participant in the growing Russian market. For the period from March
31, 1997, commencement of operations, through October 31, 1997, the Fund paid no
commissions to Regent European Securities out of total commissions of $22,365.
For the fiscal year ended October 31, 1998, the Fund paid commissions of $0 to
Regent European Securities out of total commissions of $13,661.

In executing portfolio transactions and selecting brokers or dealers, the Fund
seeks the best overall terms available. In assessing the terms of a transaction,
consideration may be given to various factors, including the breadth of the
market in the security, the price of the security, the financial condition and
execution capability of the broker or dealer (for a specified transaction and on
a continuing basis), the reasonableness of the commission, if any, and the
brokerage and research services provided. Under the Advisory and Sub-Advisory
agreements, the Adviser and Sub-Adviser are permitted, in certain circumstances,
to pay a higher commission than might otherwise be paid in order to acquire
brokerage and research services. The Adviser and Sub-Adviser must determine in
good faith, however, that such commission is reasonable in relation to the value
of the brokerage and research services provided -- viewed in terms of that
particular transaction or in terms of all the accounts over which investment
discretion is exercised. In such cases, the Board of Trustees will review the
commissions paid by the Fund to determine if the commissions paid over
representative periods are reasonable in relation to the benefits obtained. The
advisory fee of the Adviser would not be reduced because of its receipt of such
brokerage and research services. To the extent that any research services of
value are provided by broker dealers through or with whom the Fund places
portfolio transactions, the Adviser or Sub-Adviser may be relieved of expenses
which they might otherwise bear.

MANAGEMENT OF THE FUND

TRUST
NAME AND ADDRESS POSITION AGE PRINCIPAL OCCUPATION
- ---------------- -------- --- -----------------------------------------

J. Michael Belz (1) Trustee 45 President and Chief Executive Officer of
1635 NE Loop 410 Catholic Life Insurance 1984 to present.
San Antonio, TX
78209

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<PAGE>

TRUST
NAME AND ADDRESS POSITION AGE PRINCIPAL OCCUPATION
- ---------------- -------- --- -----------------------------------------

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<PAGE>

COMPENSATION TABLE

TOTAL COMPENSATION FROM U.S. GLOBAL
NAME FUND COMPLEX1 TO BOARD MEMBERS
---- ------------------------------
Richard Hughs $16,000
Clark R. Mandigo $20,200
Frank E. Holmes $0

PRINCIPAL HOLDERS OF SECURITIES

As of ______, 1999, the officers and trustees of the Fund, as a group, owned
less than 1% of the outstanding shares of the Fund. The Fund is aware of the
following persons who owned of record, or beneficially, more than 5% of the
outstanding shares of the Fund at ______, 1999:

NAME & ADDRESS OF OWNER % OWNED TYPE OF OWNERSHIP
----------------------- ------- -----------------
[BROKER NAME] ____% Record(1)
____% Record(1)

---------------------
(1)[BROKER NAME], broker-dealers, have advised that no individual client
owns more than 5% of the Fund.

INVESTMENT ADVISORY SERVICES

The investment adviser to the Fund is U. S. Global Investors, Inc., a Texas
corporation, pursuant to an advisory agreement dated September 21, 1994. Frank
E. Holmes, Chief Executive Officer and a Director of the Adviser, as well as a
Trustee, President and Chief Executive Officer of the Trust, beneficially owns
more than 25% of the outstanding voting stock of the Adviser and may be deemed
to be a controlling person of the Adviser.

In addition to the services described in the Fund's Prospectus, the Adviser will
provide the Trust with office space, facilities and simple business equipment,
and will provide the services of executive and clerical personnel for
administering the affairs of the Trust. It will compensate all personnel,
officers, and trustees of the Trust, if such persons are employees of the
Adviser or its affiliates, except that the Trust will reimburse the Adviser for
part of the compensation of the Adviser's employees who perform certain legal
services for the Trust, including state securities law regulatory compliance
work, based upon the time spent on such matters for the Trust.

The Trust and the Adviser, in connection with the Fund, have entered into a
sub-advisory agreement with another firm as discussed in the Prospectus. The
Adviser pays the Sub-Adviser a sub-advisory fee equal to one-half of the
management fee. The Fund will not be responsible for the Sub-Adviser's fee.

The Trust pays all other expenses for its operations and activities. Each of the
funds of the Trust pays its allocable portion of these expenses. The expenses
borne by the Trust include the charges and expenses of any transfer agents and
dividend disbursing agents, custodian fees, legal and auditing expenses,
bookkeeping and accounting expenses, brokerage commissions for portfolio
transactions, taxes, if any, the advisory fee, extraordinary expenses, expenses
of issuing and redeeming shares, expenses of shareholder and trustee meetings,
and of preparing, printing and mailing proxy statements, reports and other
communications to shareholders, expenses of registering and qualifying shares
for sale, fees of Trustees who are not "interested persons" of the Adviser,
expenses of attendance by officers and Trustees at professional meetings of the
Investment Company Institute, the No-Load Mutual Fund Association or similar
organizations, and membership or organization dues of such organizations,
expenses of preparing, typesetting and

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<PAGE>

mailing prospectuses and periodic reports to current shareholders, fidelity bond
premiums, cost of maintaining the books and records of the Trust, and any other
charges and fees not specifically enumerated.

The Sub-Adviser's compensation is set forth in the Prospectus and is paid by the
Adviser.

The Adviser may, out of profits derived from its management fee, pay certain
financial institutions (which may include banks, securities dealers, and other
industry professionals) a "servicing fee" for performing certain administrative
servicing functions for Fund shareholders to the extent these institutions are
allowed to do so by applicable statute, rule or regulation. These fees will be
paid periodically and will generally be based on a percentage of the value of
the institutions' client Fund shares. The Glass-Steagall Act limits banks in
engaging in the business of underwriting, selling or distributing securities.
However, in the Adviser's opinion, such laws should not preclude a bank from
performing shareholder administrative and servicing functions as contemplated
herein.

The advisory agreement was approved by the Board of Trustees of the Trust
(including a majority of the "disinterested Trustees") with respect to the Fund
and was approved by shareholders of the Fund at the initial meeting of
shareholders. The advisory agreement provides that it will continue initially
for two years, and from year to year thereafter, with respect to each fund, as
long as it is approved at least annually both (i) by a vote of a majority of the
outstanding voting securities of such fund [as defined in the Investment Company
Act of 1940 ("Act")] or by the Board of Trustees of the Trust, and (ii) by a
vote of a majority of the Trustees who are not parties to the advisory agreement
or "interested persons" of any party thereto cast in person at a meeting called
for the purpose of voting on such approval. The advisory agreement may be
terminated on 60 days' written notice by either party and will terminate
automatically if it is assigned.

Both the Adviser and Sub-Adviser provide investment advice to a variety of
clients . Both the Adviser and the Sub- Adviser also provide investment advice
to other mutual funds. Investment decisions for each client are made with a view
to achieving their respective investment objectives. Investment decisions are
the product of many factors in addition to basic suitability for the particular
client involved. Thus, a particular security may be bought or sold for certain
clients even though it could have been bought or sold for other clients at the
same time. Likewise, a particular security may be bought for one or more clients
when one or more other clients are selling the security. In some instances, one
client may sell a particular security to another client. It also sometimes
happens that two or more clients simultaneously purchase or sell the same
security, in which event each day's transactions in such security are, as far as
possible, averaged as to price and allocated between such clients in a manner
which, in the Adviser's or Sub- Adviser's opinion, is equitable to each and in
accordance with the amount being purchased or sold by each. There may be
circumstances when purchases or sales of portfolio securities for one or more
clients will have an adverse effect on other clients. The Adviser and
Sub-Adviser employ professional staffs of portfolio managers who draw upon a
variety of resources for research information for the clients.

In addition to advising client accounts, the Adviser and Sub-Adviser invest in
securities for their own accounts. The Adviser and Sub-Adviser have adopted
policies and procedures intended to minimize or avoid potential conflicts with
their clients when trading for their own accounts. The investment objectives and
strategies of the Adviser and Sub- Adviser are different from those of their
clients, emphasizing venture capital investing, private placement arbitrage and
speculative short-term trading. The Adviser uses a diversified approach to
venture capital investing. Investments typically involve early-stage businesses
seeking initial financing as well as more mature businesses in need of capital
for expansion, acquisitions, management buyouts, or recapitalization. Overall,
the Adviser invests in start-up companies in the natural resources or technology
fields.

The Fund pays the Adviser a management fee based on varying percentages of
average net assets. For the period from March 31, 1997, commencement of
operations, through October 31, 1997, the Fund paid $0 in management fees, and
for the period from November 1, 1997 through October 31, 1998, the Fund paid
$69,575 in management fees, reflecting fee waivers of $30,985.

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<PAGE>

TRANSFER AGENCY AND OTHER SERVICES

The Transfer Agency Agreement with the Trust provides for each Fund to pay
United Shareholder Services, Inc. ("USSI") an annual fee of $23.00 per account
(1/12 of $23.00 monthly). In connection with obtaining and/or providing
administrative services to the beneficial owners of Trust shares through
broker-dealers, banks, trust companies and similar institutions which provide
such services and maintain an omnibus account with the Transfer Agent, each Fund
shall pay to the Transfer Agent a monthly fee equal to one-twelfth (1/12) of
12.5 basis points (.00125) of the value of the shares of the Funds held in
accounts at the institutions, which payment shall not exceed $1.92 multiplied by
the average daily number of accounts holding Trust shares at the institution.
These fees cover the usual transfer agency functions. In addition, the Funds
bear certain other Transfer Agent expenses such as the costs of record retention
and postage, plus the telephone and line charges (including the toll-free 800
service) used by shareholders to contact the Transfer Agent. For the fiscal year
ended October 31, 1998 the Fund paid USSI a total of $30,790 for transfer
agency, lockbox, and printing fees. From February 20, 1997, commencement of
operations, through October 31, 1997, the Fund paid USSI a total of $0 for
transfer agency, lockbox, and printing fees.

A & B Mailers, Inc., a corporation wholly owned by the Adviser, provides the
Trust with certain mail handling services. The charges for such services have
been negotiated by the Audit Committee of the Trust and A & B Mailers, Inc. Each
service is priced separately.

DISTRIBUTION PLAN

The Fund has adopted a Distribution Plan pursuant to Rule 12b-1 of the 1940 Act
("Distribution Plan"). The Distribution Plan allows the Fund to pay for or
reimburse expenditures in connection with sales and promotional services related
to the distribution of Fund shares, including personal services provided to
prospective and existing Fund shareholders, and includes the costs of: printing
and distribution of prospectuses and promotional materials, making slides and
charts for presentations, assisting shareholders and prospective investors in
understanding and dealing with the Fund, and travel and out-of-pocket expenses
(e.g., copy and long distance telephone charges) related thereto.

The total amount expended pursuant to the Distribution Plan may not exceed 0.25%
of the Fund's net assets on an annual basis. For the period ended October 31,
1998, the Fund paid a total of $20,112 in distribution fees. The majority of
these fees were used to pay for printing and mailing of prospectuses.
Distribution expenses paid by the Adviser or other third parties in prior
periods that exceeded 0.25% of net assets may be paid by the Fund with
distribution expenses accrued pursuant to the 12b-1 plan in the current or
future periods, so long as the 0.25% limitation is never exceeded.

Expenses that the Fund incurs pursuant to the distribution plan are reviewed
quarterly by the Board of Trustees. The distribution plan is reviewed annually
by the Board of Trustees as a whole, and the Trustees who are not "interested
persons" as that term is defined in the 1940 Act and who have no direct or
indirect financial interest in the operation of the Distribution plan
("Qualified Trustees"). In their review of the Distribution plan the Board of
Trustees, as a whole, and the Qualified Trustees determine whether, in their
reasonable business judgment and considering their fiduciary duties under state
law and under Section 36(a) and (b) of the 1940 Act there is a reasonable
likelihood that the Distribution plan will benefit the Fund and its
shareholders. The Distribution plan may be terminated at any time by vote of a
majority of the Qualified Trustees, or by a majority vote of the outstanding
voting securities of the Fund.

The Fund is unaware of any Trustee or any interested person of the Fund who had
a direct or indirect financial interest in the operations of the Distribution
plan.

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<PAGE>

The Fund expects that the Distribution plan will be used primarily to pay a
"service fee" to persons who provide personal services to prospective and
existing Fund shareholders. Shareholders of the Fund will benefit from these
personal services and the Fund expects to benefit from economies of scale as it
attracts more shareholders.

Beginning September 3, 1998, U.S. Global Brokerage, Inc., a subsidiary of the
adviser, commenced marketing the Fund and distributing shares through selling
brokers, financial planners and other financial representatives.

CERTAIN PURCHASES OF SHARES OF THE FUND

The following information supplements the discussion of how to buy Fund shares
as discussed in the Fund's prospectus.

Shares of the Fund are continuously offered by the Trust at their net asset
value next determined after an order is accepted. The methods available for
purchasing shares of the Fund are described in the Prospectus. In addition,
shares of the Fund may be purchased using stock, so long as the securities
delivered to the Trust meet the investment objectives and concentration policies
of the Fund, and are otherwise acceptable to the Adviser, which reserves the
right to reject all or any part of the securities offered in exchange for shares
of the Fund. On any such "in kind" purchase, the following conditions will
apply:

(1) the securities offered by the investor in exchange for shares of the Fund
must not be in any way restricted as to resale or otherwise be illiquid;

(2) securities of the same issuer must already exist in the Fund's portfolio;

(3) the securities must have a value that is readily ascertainable (and not
established only by evaluation procedures) as evidenced by a listing on
the NYSE, or Nasdaq-AMEX;

(4) any securities so acquired by the Fund shall not comprise over 5% of the
Fund's net assets at the time of such exchange;

(5) no over-the-counter securities will be accepted unless the principal
over-the-counter market is in the United States; and,

(6) the securities are acquired for investment and not for resale.

An investor who wishes to make an "in kind" purchase should furnish a list
(either in writing or by telephone) to the Trust with a full and exact
description of all of the securities he or she proposes to deliver. The Trust
will advise him or her as to those securities it is prepared to accept and will
provide the investor with the necessary forms to be completed and signed by the
investor. The investor should then send the securities, in proper form for
transfer, with the necessary forms to the Trust and certify that there are no
legal or contractual restrictions on the free transfer and sale of the
securities. The securities will be valued as of the close of business on the day
of receipt by the Trust in the same manner as portfolio securities of the Fund
are valued. See the section entitled Net Asset Value in the Prospectus. The
number of shares of the Fund, having a net asset value as of the close of
business on the day of receipt equal to the value of the securities delivered by
the investor, will be issued to the investor, less applicable stock transfer
costs or taxes, if any.

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<PAGE>

ADDITIONAL INFORMATION ON REDEMPTIONS

The following information supplements the discussion of how to redeem Fund
shares as discussed in the Fund's prospectus.

SUSPENSION OF REDEMPTION PRIVILEGES. The Trust may suspend redemption privileges
or postpone the date of payment for up to seven days, but cannot do so for more
than seven days after the redemption order is received except during any period
(1) when the NYSE is closed, other than customary weekend and holiday closings,
or trading on the Exchange is restricted as determined by the Securities and
Exchange Commission ("SEC"); (2) when an emergency exists, as defined by the
SEC, that makes it not practicable for the Trust to dispose of securities owned
by it or to determine fairly the value of its assets; or (3) as the SEC may
otherwise permit.

REDEMPTION IN KIND. The Trust reserves the right to redeem shares of the Fund in
cash or in kind. However, the Trust has elected to be governed by Rule 18f-1
under the Investment Company Act of 1940, pursuant to which the Trust is
obligated to redeem shares of the Fund solely in cash up to the lesser of
$250,000 or one percent of the net asset value of the Fund during any 90-day
period for any one shareholder. Any shareholder of the Fund receiving a
redemption in kind would then have to pay brokerage fees in order to convert his
Fund investment into cash. All redemptions in kind will be made in marketable
securities of the Fund.

CALCULATION OF PERFORMANCE DATA

P(1+T) SUP n = ERV

The calculation assumes that (1) all charges are deducted from the initial
$1,000 payment, (2) all dividends and distributions by the Fund are reinvested
at the price stated in the prospectus on the reinvestment dates during the
period, and (3) all recurring fees charged to all shareholder accounts are
included.

The annual total return for the Fund for the period from March 31, 1997
(commencement of operations), through October 31, 1997, was 11.90%, and for the
period from November 1, 1997 through October 31, 1998 the annual total return
was (27.96)%. This number has not been annualized.

TAX STATUS

TAXATION OF THE FUND--IN GENERAL. As stated in its prospectus, the Fund intends
to qualify as a "regulated investment company" under Subchapter M of the
Internal Revenue Code of 1986, as amended ("Code"). Accordingly, the Fund

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<PAGE>

will not be liable for Federal income taxes on its taxable net investment income
and capital gain net income distributed to shareholders if the Fund distributes
at least 90% of its net investment income and net short-term capital gain for
the taxable year.

To qualify as a regulated investment company, the Fund must, among other things:
(1) derive in each taxable year at least 90% of its gross income from dividends,
interest, payments with respect to securities loans, gains from the sale or
other disposition of stock, securities or foreign currencies, or other income
derived with respect to its business of investing in such stock, securities or
currencies ("90% test"); and (2) satisfy certain diversification requirements at
the close of each quarter of the Fund's taxable year.

The Code imposes a non-deductible 4% excise tax on a regulated investment
company that fails to distribute during each calendar year an amount equal to
the sum of: (1) at least 98% of its ordinary income for the calendar year; (2)
at least 98% of its capital gain net income for the twelve-month period ending
on October 31 of the calendar year; and (3) any portion (not taxable to the
Fund) of the respective balance from the preceding calendar year. The Fund
intends to make such distributions as are necessary to avoid imposition of this
excise tax.

TAXATION OF THE SHAREHOLDER. Taxable distributions generally are included in a
shareholder's gross income for the taxable year in which they are received.
However, dividends declared in October, November or December and paid to
shareholders of record in such a month, will be deemed to have been received on
December 31 if the Fund pays the dividends during the following January.

Distributions by the Fund will result in a reduction in the fair market value of
the Fund's shares. Should a distribution reduce the fair market value below a
shareholder's cost basis, such distribution nevertheless would be taxable to the
shareholder as ordinary income or long-term capital gain even though, from an
investment standpoint, it may constitute a partial return of capital. In
particular, investors should be careful to consider the tax implications of
buying shares of the Fund just before a distribution. The price of such shares
purchased then includes the amount of any forthcoming distribution. Investors
purchasing the Fund's shares immediately before a distribution may receive a
return of investment upon distribution that will nevertheless be taxable to
them.

A shareholder of the Fund should be aware that a redemption of shares (including
any exchange into other funds offered, affiliated or administered by U. S.
Global Investors, Inc.) is a taxable event and, accordingly, a capital gain or
loss may be recognized. If a shareholder of the Fund receives a distribution
taxable as long-term capital gain with respect to shares of the Fund and redeems
or exchanges shares before he has held them for more than six months, any loss
on the redemption or exchange (not otherwise disallowed as attributable to an
exempt-interest dividend) will be treated as long-term capital loss to the
extent of the long-term capital gain recognized.

CUSTODIAN, FUND ACCOUNTANT AND ADMINISTRATOR

Beginning November 1997 Brown Brothers Harriman & Co. began serving as
custodian, fund accountant and administrator for all funds of the Trust. With
respect to the funds owning foreign securities, Brown Brothers Harriman & Co.
may hold securities outside the United States pursuant to sub-custody
arrangements separately approved by the Trust. Prior to November, Bankers Trust
Company provided custody services and USSI provided fund accounting and
administrative services. Services with respect to retirement accounts will be
provided by Security Trust and Financial Company of San Antonio, Texas, a wholly
owned subsidiary of the Adviser.

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<PAGE>

UNDERWRITER/DISTRIBUTOR

U.S. Global Brokerage, Inc., 7900 Callaghan Road, San Antonio, Texas 78229, is
the principal underwriter and exclusive agent for distribution of shares of the
Fund. The distributor is obligated to sell the shares of the Fund on a
best-efforts basis only against purchase orders for the shares. Shares of the
Fund are offered on a continuous basis. David J. Clark is the Chief Financial
Officer of the underwriter and Treasurer of the Trust. Elias Suarez is Vice
President of both the underwriter and the Trust.

INDEPENDENT ACCOUNTANTS

PricewaterhouseCoopers LLP, 160 Federal Street, Boston, Massachusetts 02110 is
the independent accountant for the Trust.

FINANCIAL STATEMENTS

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<PAGE>

ITEM 22. FINANCIAL STATEMENTS AND EXHIBITS

(a) The Financial Statements for the period ended October 31, 1998, of U.S.
Global Accolade Funds are incorporated by reference from the U.S. Global
Accolade Funds Annual Report, dated October 31, 1998.

<PAGE>
................................................................................
PART C. OTHER INFORMATION (ITEMS 23 - 30)
................................................................................

ITEM 23. EXHIBITS

EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- -------- ----------------------------------------------------------------------

(a) (i) First Amended and Restated Master Trust Agreement, dated May 22, 1996,
incorporated by reference to Post-Effective Amendment No. 5 dated May
28, 1996 (EDGAR Accession No. 0000902042-96-000046).

(ii) Amendment No. 1, dated November 20, 1996, to the First Amended and
Restated Master Trust Agreement, dated May 22, 1996, incorporated by
reference to Post-Effective Amendment No. 11 dated August 22, 1997
(EDGAR Accession No. 0000902042-97- 000051).

(iii)Amendment No. 2, dated February 21, 1997, to the First Amended and
Restated Master Trust Agreement, dated May 22, 1996, incorporated by
reference to Post-Effective Amendment No. 11 dated August 22, 1997
(EDGAR Accession No. 0000902042-97- 000051).

(iv) Amendment No. 3, dated April 10, 1997, to the First Amended and
Restated Master Trust Agreement, dated May 22, 1996, incorporated by
reference to Post-Effective Amendment No. 11 dated August 22, 1997
(EDGAR Accession No. 0000902042-97-000051).

(v)* Amendment No. 4, dated September 30, 1998, to the First Amended and
Restated Master Trust Agreement, dated May 22, 1996.

(b) By-laws of U.S. Global Accolade Funds, incorporated by reference to initial
registration dated April 15, 1993 (EDGAR Accession No.
0000902042-98-000006).

(d) (i) Advisory Agreement between U.S. Global Investors, Inc. and U.S. Global
Accolade Funds dated September 21, 1994, incorporated by reference to
Post-Effective Amendment No. 5 dated May 28, 1996 (EDGAR Accession
No.0000902042-96-000046).

(ii) Amendment dated May 22, 1996, to Advisory Agreement between U.S.
Global Accolade Funds and U.S. Global Investors, Inc. to add
MegaTrends Fund incorporated by reference to Post-Effective Amendment
No. 5 dated May 28, 1996 (EDGAR Accession No.0000902042-96-000046).

(iii)Amendment dated February 19, 1997, to Advisory Agreement between U.S.
Global Accolade Funds and U.S. Global Investors, Inc. to add Adrian
Day Global Opportunity Fund (renamed Global Blue Chip Fund)
incorporated by reference to Post-Effective Amendment No. 8 dated
December 6, 1996 (EDGAR Accession No. 0000902042-96- 000082).

<PAGE>

EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- -------- ----------------------------------------------------------------------

(iv) Amendment dated February 28, 1997, to Advisory Agreement between U.S.
Global Accolade Funds and U.S. Global Investors, Inc. to add Regent
Eastern European Fund incorporated by reference to Post-Effective
Amendment No. 9 dated December 24, 1996 (EDGAR Accession No.
0000902042-96-000083).

(v) Sub-Advisory Agreement among U.S. Global Accolade Funds, U.S. Global
Investors, Inc. and Bonnel, Inc. dated September 21, 1994,
incorporated by reference to Pre-Effective Amendment No. 3 dated
October 17, 1994 (EDGAR Accession No. 754811-95-000002).

(vi) Sub-Advisory Agreement among U.S. Global Accolade Funds, U.S. Global
Investors, Inc. and Money Growth Institute, Inc. incorporated by
reference to Post-Effective Amendment No. 5 dated May 28, 1996 (EDGAR
Accession No. 0000902042-96-000046).

(vii)Sub-Advisory Agreement dated February 28, 1997, among U.S. Global
Accolade Funds, U.S. Global Investors, Inc. and Regent Fund Management
Limited incorporated by reference to Post-Effective Amendment No. 9
dated December 24, 1996 (EDGAR Accession No. 0000902042-96-000083).

(e) (i)* Distribution Agreement September 3, 1998, between U.S. Global Accolade
Funds and U.S. Global Brokerage, Inc.

(ii)*Selling Agreement dated November 16, 1998, between U.S. Global
Brokerage, Inc. and First Southwest Company.

(iii)* Selling Agreement dated August 31, 1998, between U.S. Global
Brokerage, Inc. and Fiserv Correspondent Services, Inc.

(iv)*Selling Agreement dated September 10, 1998, between U.S. Global
Brokerage, Inc. and Barron Chase Securities.

(v)* Selling Agreement dated September 24, 1998, between U.S. Global
Brokerage, Inc. and Southwest Securities.

(vi)*Selling Agreement dated December 11, 1998, between U.S. Global
Brokerage, Inc. and E*Trade Securities.

(vii)* Selling Agreement dated December 11, 1998, between U.S. Global
Brokerage, Inc. and Freeman Welwood.

(viii)* Selling Agreement dated b December 11, 1998, between U.S. Global
Brokerage, Inc. and Bank of New York Clearing Services, LLC.

(ix)*Selling Agreement dated September 25, 1998, between U.S. Global
Brokerage, Inc. and Banc One Securities, Inc.

(f) Not applicable

(g) Custodian Agreement dated November 1, 1998, between U.S. Global Accolade
Funds and Brown Brothers Harriman & Co. of Massachusetts incorporated by
reference to Post- Effective Amendment No. 13 dated January 29, 1998 (EDGAR
Accession No. 0000902042-98-000006).

<PAGE>

EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- -------- ----------------------------------------------------------------------

(h) (i) Transfer Agent Agreement between United Shareholder Services, Inc. and
U.S. Global Accolade Funds dated September 21, 1994, incorporated by
reference to Pre-Effective Amendment No. 3 dated October 17, 1994
(EDGAR Accession No. 754811-95-000002).

(ii) Amendment dated May 22, 1996, to Transfer Agent Agreement between
United Shareholder Services, Inc. and U.S. Global Accolade Funds to
add MegaTrends Fund to the Agreement, incorporated by reference to
Post-Effective Amendment No. 5 dated May 28, 1996 (EDGAR Accession No.
0000902042-96-000046).

(iii)Amendment dated February 18, 1997, to the Transfer Agent Agreement
between United Shareholder Services, Inc. and U.S. Global Accolade
Funds to add Adrian Day Global Opportunity Fund (renamed Global Blue
Chip Fund) incorporated by reference to Post- Effective Amendment No.
8 dated December 6, 1996 (EDGAR Accession No. 0000902042- 96-000082).

(iv) Amendment dated February 28, 1997, to the Transfer Agent Agreement
between United Shareholder Services, Inc. and U.S. Global Accolade
Funds to add Regent Eastern European Fund to the Agreement
incorporated by reference to Post-Effective Amendment No. 9 dated
December 24, 1996 (EDGAR Accession No. 0000902042-96-000083).

(i)* Opinion and consent of Susan B. McGee, Esq., counsel to the registrant,
dated January 23, 1998.

(j) (i) Consent of independent accountant, Arthur Andersen LLP, dated
_____________, 1999, with respect to MegaTrends Fund (to be submitted
with 485(b) filing).

(ii) Consent of independent accountant, PricewaterhouseCoopers LLP, dated
____________________, 1999, with respect to Bonnel Growth Fund,
MegaTrends Fund, Global Blue Chip Fund and Regent Eastern European
Fund (to be submitted with 485(b) filing).

(iii)* Power of Attorney dated December 18, 1998.

(k) Not applicable

(l) Not applicable

(m) (i) U.S. Global Accolade Funds/Bonnel Growth Fund Distribution Plan
pursuant to Rule 12b-1 approved September 21, 1994, incorporated by
reference to Pre-Effective Amendment No. 2 dated May 11, 1994 (EDGAR
Accession No. 0000902042-98-000006).

(ii) U.S. Global Accolade Funds/MegaTrends Fund Distribution Plan pursuant
to Rule 12b-1 approved May 22, 1996, incorporated by reference to
Post-Effective Amendment No. 5 dated May 28, 1996 (EDGAR Accession No.
0000902042-96-000046).

(iii)U.S. Global Accolade Funds/Adrian Day Global Opportunity Fund
(renamed Global Blue Chip Fund) Distribution Plan pursuant to Rule
12b-1 approved December 18, 1996, incorporated by reference to
Post-Effective Amendment No. 8 dated December 6, 1996 (EDGAR Accession
No. 0000902042-96-000082).

<PAGE>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- -------- ----------------------------------------------------------------------

(iv) U.S. Global Accolade Funds/Regent Eastern European Fund Distribution
Plan pursuant to Rule 12b-1 approved February 28, 1997, incorporated
by reference to Post-Effective Amendment No. 9 dated December 24, 1996
(EDGAR Accession No. 0000902042-96- 000083).

(n)* Financial Data Schedules

(o) Not applicable.

* Included herein.

ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUNDS

Information pertaining to persons controlled by or under common control with
registrant is incorporated by reference to the Statement of Additional
Information contained in Part B of this Registration Statement at the section
entitled "Principal Holders of Securities."

ITEM 25. INDEMNIFICATION

Under Article VI of the registrant's Master Trust Agreement, each of its
Trustees and officers or person serving in such capacity with another entity at
the request of the registrant (a "Covered Person") shall be indemnified (from
the assets of the Sub-Trust or Sub-Trusts in question) against all liabilities,
including, but not limited to, amounts paid in satisfaction of judgments, in
compromises or as fines or penalties, and expenses, including reasonable legal
and accounting fees, incurred by the Covered Person in connection with the
defense or disposition of any action, suit or other proceeding, whether civil or
criminal before any court or administrative or legislative body, in which such
Covered Person may be or may have been involved as a party or otherwise or with
which such person may be or may have been threatened, while in office or
thereafter, by reason of being or having been such a Trustee or officer,
director or trustee, except with respect to any matter as to which it has been
determined that such Covered Person (i) did not act in good faith in the
reasonable belief that such Covered Person's action was in or not opposed to the
best interests of the Trust or (ii) had acted with wilful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of such Covered Person's office (either and both of the conduct
described in (i) and (ii) being referred to hereafter as "Disabling Conduct"). A
determination that the Covered Person is not entitled to indemnification may be
made by (i) a final decision on the merits by a court or other body before whom
the proceeding was brought that the person to be indemnified was not liable by
reason of Disabling Conduct, (ii) dismissal of a court action or an
administrative proceeding against a Covered Person for insufficiency of evidence
of Disabling Conduct, or (iii) a reasonable determination, based upon a review
of the facts, that the indemnitee was not liable by reason of Disabling Conduct
by (a) a vote of the majority of a quorum of Trustees who are neither
"interested persons" of the Trust as defined in Section 1(a)(19) of the 1940 Act
nor parties to the proceeding, or (b) as independent legal counsel in a written
opinion.

ITEM 26. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER

Information pertaining to business and other connections of registrant's
investment adviser is incorporated by reference to the Prospectus and Statement
of Additional Information contained in Parts A and B of this Registration
Statement at the sections entitled "Management of the Funds" in the Prospectus
and "Investment Advisory Services" in the Statement of Additional Information.

<PAGE>

ITEM 27. PRINCIPAL UNDERWRITERS

(a) U.S. Global Brokerage, Inc., a wholly owned subsidiary of U.S. Global
Investors, Inc., is registered as a limited-purpose broker/dealer for the
purpose of distributing U.S. Global Investors Funds and U.S. Global
Accolade Funds shares, effective September 3, 1998.

(b) The following table lists, for each director and officer of U.S. Global
Accolade Funds, the information indicated.

NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT
--------------------- --------------------- ---------------------
Creston A. King, III Director None
7900 Callaghan Road President
San Antonio, TX 78229

Anthony A. Rabago Director None
7900 Callaghan Road Vice President
San Antonio, TX 78229 Secretary

David J. Clark Chief Financial Officer Treasurer
7900 Callaghan Road
San Antonio, TX 78229

Elias Suarez Vice President Vice President,
7900 Callaghan Road Institutional Sales
San Antonio, TX 78229

ITEM 28. LOCATION OF ACCOUNTS AND RECORDS

All accounts and records maintained by the registrant are kept at the
registrant's office located at 7900 Callaghan Road, San Antonio, Texas. All
accounts and records maintained by Brown Brothers Harriman & Co. as custodian,
fund accountant and administrator for U.S. Global Accolade Funds are maintained
at 40 Water Street, Boston, Massachusetts 02109.

ITEM 29. MANAGEMENT SERVICES

Not applicable.

ITEM 30. UNDERTAKINGS

Not applicable

<PAGE>

................................................................................
SIGNATURES
................................................................................

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the registrant certifies that it meets all of the
requirements for effectiveness of this Post-Effective Amendment to its
Registration Statement filed under Rule 485(a) of the Securities Act of 1933 and
it has duly caused this Amendment to the Registration Statement on Form N-1A to
be signed on its behalf by the undersigned, duly authorized, in the city of San
Antonio, State of Texas, on this 30th day of December, 1998.

U.S. GLOBAL ACCOLADE FUNDS

By: **
---------------------------------------------------
Frank E. Holmes, President, Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this Post-Effective
Amendment to the Registration Statement on Form N1-A has been signed below by
the following persons in the capacities and on the dates indicated:

SIGNATURE TITLE DATE
- -------------------- ----------------------- ------------------

President
Chief Executive Officer
** Trustee December 30, 1998
- --------------------
FRANK E. HOLMES

** Trustee December 30, 1998
- --------------------
J. MICHAEL BELZ

** Trustee December 30, 1998
- --------------------
RICHARD E. HUGHS

** Trustee December 30, 1998
- --------------------
CLARK R. MANDIGO

Executive Vice President December 30, 1998
/s/ Susan B. McGee Secretary
- --------------------
SUSAN B. MC GEE

** By:/s/ Susan B. McGee
---------------------------------------------------------------
Susan B. McGee
Attorney-in-Fact under Power of Attorney dated December 18, 1998

U.S. GLOBAL ACCOLADE FUNDS

AMENDMENT NO. 4 TO THE
FIRST AMENDED AND RESTATED MASTER TRUST AGREEMENT

AMENDMENT NO.4 to the First Amended and Restated Master Trust Agreement of U.S.
Global Accolade Funds dated May 22, 1996, made at San Antonio, Texas this 30th
day of September, 1998, by the Trustees hereunder.

WITNESSETH:

WHEREAS, Section 7.3 of the Amended and Restated Master Trust Agreement dated
May 22, 1996, (the "Agreement") of U.S. Global Accolade Funds (the "Trust")
provides that the Agreement may be amended at any time, so long as such
amendment does not adversely affect the rights of any shareholder with respect
to which such amendment is or purports to be applicable and so long as such
amendment is not in contravention of applicable law, including the Investment
Company Act of 1940, by an instrument in writing, signed by an officer of the
Trust pursuant to a vote of a majority of the Trustees of the Trust; and

WHEREAS, the Trustees desire to change the name of the Adrian Day Global
Opportunity Fund to the Global Blue Chip Fund;

NOW, THEREFORE, the undersigned Frank E. Holmes, the duly elected and serving
president of the Trust, pursuant to the authorization described above, hereby
amends Section 4.2 of the Master Trust Agreement, as heretofore in effect to
read as follows:

Section 4.2. Establishment and Designation of Sub-Trusts. Without limiting
the authority of the Trustees set forth in Section 4.1 to establish and
designate any further Sub-Trusts, the Trustees hereby establish and
designate five Sub-Trusts: Bonnel Growth Fund; MegaTrends Fund, Global Blue
Chip Fund, Regent Eastern European Fund and Regent Korean Fund.

WITNESS my hand and seal this 30th day of September, 1998.

/s/ Frank E. Holmes
----------------------------------------------
Frank E. Holmes
President, Chief Executive Officer and Trustee
S E A L

STATE OF TEXAS )
)ss
COUNTY OF BEXAR )

Then personally appeared the above named Frank E. Holmes and acknowledged this
instrument to be his act and deed this 30th day of September, 1998.

/s/ June L. Falks
----------------------------------------------
June L. Falks
Notary Public, State of Texas
My commission expires February 14, 2000

U.S. GLOBAL ACCOLADE FUNDS
DISTRIBUTION AGREEMENT

AGREEMENT made as of the 3rd day of September 1998, between U.S. Global
Accolade Funds, a Massachusetts business trust (the "Trust"), having its
principal place of business in San Antonio, Texas, and U.S. Global Brokerage,
Inc. a corporation organized under the laws of the State of Texas (the
"Distributor"), having its principal place of business in San Antonio, Texas.

WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open-end management investment company and is
authorized (i) to issue shares of beneficial interest in separate series, with
the shares of each such series representing the interests in a separate
portfolio of securities and other assets, and (ii) to divide such shares of
beneficial interest of each such series into two or more classes; and

WHEREAS, the Trust wishes to employ the services of the Distributor with
respect to the distribution of shares of beneficial interest of the Trust
("Shares") and classes thereof representing interests in each portfolio series
thereof identified from time to time on Schedule A hereto (each such portfolio
series being referred to herein as a "Fund"); and

WHEREAS, the Distributor wishes to provide distribution services to the
Trust with respect to the Shares.

NOW, THEREFORE, in consideration of the mutual promises and undertakings
herein contained, the parties agree as follows:

1. Sale of Shares by the Distributor. The Trust grants to the Distributor
the right to sell Shares during the term of this Agreement and subject to the
registration requirements of the Securities Act of 1933, as amended (the "1933
Act"), under the following terms and conditions: (i) the Distributor, as agent
for the Trust, shall sell Shares authorized for issue and registered under the
1933 Act; and (ii) the Distributor shall sell such Shares only in compliance
with the terms set forth in the Trust's currently effective registration
statement, as may be in effect from time to time, and any further limitations
the Trustees of the Trust may impose. The Distributor may enter into selling
agreements with selected dealers and others for the sale of Shares and will act
only on its behalf as principal in entering into such selling agreements.

2. Sale of Shares by the Trust. The Trust reserves the right to issue
Shares in connection with (i) the merger or consolidation of the assets of, or
acquisition by the Trust through purchase or otherwise, with any other
investment company, trust or personal holding company; (ii) a pro rata
distribution directly to the holders of Shares in the nature of a stock dividend
or split-up; and (iii) as otherwise may be provided in the then current
registration statement of the Trust.

3. Shares Covered by this Agreement. This Agreement shall apply to issued
Shares, Shares held in its treasury in the event that in the discretion of the
Trust treasury Shares shall be sold, and Shares repurchased for resale.

4. Public Offering Price. Except as otherwise noted in the Trust's
prospectus for any Fund (the "Prospectus") or Statement of Additional
Information for any Fund (the "SAI"), as amended or supplemented from time to
time, all Shares sold by the Distributor or the Trust will be sold at the public
offering price plus any applicable sales charge described therein. The public
offering price for all accepted subscriptions will be the net asset value per
share, determined in the manner described in the Trust's then current Prospectus
and SAI with respect to the applicable Fund. The Trust shall in all cases
receive the net asset value per Share on

<PAGE>

U.S. Global Accolade Funds
Distribution Agreement
Page 2 of 7

all sales and the Distributor shall be entitled to retain the applicable sales
charges, if any, subject to any reallowance obligations of the Distributor as
set forth in any selling agreements with selected dealers and others for the
sale of Shares and/or as set forth in the Prospectus and/or SAI of the Trust
with respect to Shares.

5. Suspension of Sales. If and whenever the determination of net asset
value is suspended and until such suspension is terminated, no further orders
for Shares shall be processed by the Distributor, except such unconditional
orders placed with the Distributor before it had knowledge of the suspension. In
addition, the Trust reserves the right to suspend sales of Shares and the
Distributor's authority to sell Shares if, in the judgment of the Trust, it is
in the best interest of the Trust to do so. Suspension will continue for such
period as may be determined by the Trust. In addition, the Trust and Distributor
reserve the right to reject any purchase order.

6. Solicitation of Sales. In consideration of these rights granted to the
Distributor, the Distributor agrees to use all reasonable efforts, consistent
with its other business, to secure purchasers for Shares of the Trust. This
shall not prevent the Distributor from entering into like arrangements
(including arrangements involving the payment of underwriting commissions) with
other issuers. Distributor agrees to use all reasonable efforts to ensure that
taxpayer identification numbers provided for holders of Shares of the Trust are
correct. In addition, Distributor (in coordination with investment advisers
retained by the Trust) will be responsible for the production of marketing and
advertising materials for the sale of Shares of the Trust and the review thereof
for compliance with applicable regulatory requirements, entering into other
agreements with broker-dealers, if any, to sell Shares of the Trust and
monitoring their financial strength and contractual compliance.

7. Authorized Representations. The Distributor is not authorized by the
Trust to give any information or to make any representations other than those
contained in the appropriate registration statements, Prospectuses or SAIs filed
with the Securities and Exchange Commission under the 1933 Act (as those
registration statements, Prospectuses and SAIs may be amended from time to
time), or contained in shareholder reports or other material that may be
prepared by or on behalf of the Trust for the Distributor's use. This shall not
be construed to prevent the Distributor from preparing and distributing, in
compliance with applicable laws and regulations, sales literature or other
material as it may deem appropriate. Distributor will furnish or cause to be
furnished copies of such sales literature or other material to the Trust.
Distributor agrees to take appropriate action to cease using such sales
literature or other material to which the Trust reasonably objects as promptly
as practicable after receipt of the objection. Distributor further agrees that,
in connection with the offer and sale of Shares, Distributor shall comply with
all applicable securities laws of the United States and each state thereof in
which Shares are offered and/or sold (including without limitation, the
maintenance of effective federal and state broker-dealer registrations, as
required).

8. Registration of Shares. The Trust agrees that it will use its best
efforts to register Shares under the 1933 Act (subject to the necessary
approval, if any, of its shareholders) and to qualify and maintain the
registration and qualification of an appropriate number of shares under the 1933
Act so that there will be available for sale the number of Sales the Distributor
may reasonably be expected to sell. Distributor shall furnish such information
and other materials relating to its affairs and activities as shall be required
by the Trust in connection with such registration and qualification. The
Distributor agrees that it will not offer or sell Shares in any jurisdiction
unless the offer or sale of Shares has been so qualified or registered or is
otherwise exempt from such registration or qualification. The Trust shall
furnish to the Distributor copies of all information, financial statements and
other papers which the Distributor may reasonably request for use in connection
with the distribution of Shares of each series of the Trust.

<PAGE>
U.S. Global Accolade Funds
Distribution Agreement
Page 3 of 7

9. Expenses, Compensation and Reimbursement.

(a) The Trust shall pay all fees and expenses:

(i) in connection with the preparation, setting in type and
filing of any registration statement, Prospectus and SAI under the
1933 Act, and any amendments thereto, for the issue of its Shares;

(ii) in connection with the registration and qualification of
Shares for sale in states in which the Board of Trustees (the
"Trustees") of the Trust shall determine it advisable to qualify such
Shares for sale (including registering the Trust as a broker or dealer
or any officer of the Trust as agent or salesperson in any such
location);

(iii) of preparing, setting in type, printing and mailing any
report or other communication to holders of Shares of the Trust in
their capacity as such; and

(iv) of preparing, setting in type, printing and mailing
Prospectuses, SAIs, and any supplements thereto, sent to existing
holders of Shares.

(b) The Distributor shall pay cost of:

(i) printing and distributing Prospectuses, SAIs and reports
prepared for its use in connection with the offering of the Shares for
sale to the public;

(ii) any other literature used in connection with such offering;

(iii) advertising in connection with such offering including, but
not limited to the following: public relations services, sales
presentations, media charges, preparation, printing and mailing of
advertising and sales literature, data processing necessary to
distribution effort, printing and mailing of prospectuses; and

(iv) any additional out-of-pocket expenses incurred in connection
with these costs.

10. Indemnification.

(a) The Trust agrees to indemnify and hold harmless the Distributor
and each of its directors and officers and each person, if any, who
controls the Distributor within the meaning of Section 15 of the 1933 Act
against any loss, liability, claim, damage or expense (including the
reasonable cost of investigating or defending any alleged loss, liability,
claim, damage or expense and reasonable counsel fees incurred in connection
therewith) arising out of or based upon: (i) any violation of the Trust's
representations or covenants herein contained; (ii) any wrongful act of the
Trust or any of its representatives (other than the Distributor or any of
its employees or representatives (regardless of the capacity in which such
employee or representative is acting) or any other person for whose acts
the Distributor is responsible or is alleged to be responsible (including
any selected dealer or person through whom sales are made pursuant to an
agreement with the Distributor)); (iii) any untrue statement of a material
fact contained in a registration statement, Prospectus, SAI or shareholder
report of any Fund or any omission to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading, except to the extent the statement or omission

<PAGE>

U.S. Global Accolade Funds
Distribution Agreement
Page 4 of 7

was made in reliance upon, and in conformity with, information furnished in
writing to the Trust by or on behalf of the Distributor; or (iv) any untrue
statement of a material fact contained in any advertising material of a
Fund or any omission to state a material fact required to be stated therein
or necessary in order to make the statements therein not misleading, to the
extent that such statement or omission was made in reliance upon, and in
conformity with, information furnished to the Distributor by the Trust. In
no case (x) is the indemnity by the Trust in favor of the Distributor or
any person indemnified to be deemed to protect the Distributor or any
person against any liability to the Trust or its security holders to which
the Distributor or such person would otherwise be subject by reason of
willful misfeasance, bad faith or ordinary negligence in the performance of
its duties or by reason of its reckless disregard of its obligations and
duties under this agreement, or (y) is the Trust to be liable under its
indemnity agreements contained in the Section 10(a) with respect to any
claim made against the Distributor or any person indemnified unless the
Distributor or person, as the case may be, shall have notified the Trust in
writing of the claim within a reasonable time after the summons or other
first written notification giving information of the nature of the claim
shall have been served upon the Distributor or any such person or after the
Distributor or such person shall have received notice of service on any
designated agent. However, except to the extent the Trust is harmed
thereby, failure to notify the Trust of any claim shall not relieve the
Trust from any liability which it may have to the Distributor or any person
against whom such action is brought other than on account of its indemnity
agreement contained in this Section 10(a). The Trust shall be entitled to
participate at its own expense in the defense, or, if it so elects, to
assume the defense of any suit brought to enforce any claims, but if the
Trust elects to assume the defense, the defense shall be conducted by
counsel chosen by it and satisfactory to the Distributor, or person or
persons, defendant or defendants in the suit. In the event the Trust elects
to assume the defense of any suit and retain counsel, the Distributor,
officers or directors or controlling person(s) or defendant(s) in the suit,
shall bear the fees and expenses of any additional counsel retained by,
them. If the Trust does not elect to assume the defense of any suit, it
will reimburse the Distributor, officers or directors or controlling
person(s) or defendant(s) in the suit, for the reasonable fees and expenses
of any counsel retained by them. The Trust agrees to notify the Distributor
promptly of the commencement of any litigation or proceedings against it or
any of its officers or Trustees in connection with the issuance or sale of
any of the Shares.

(b) The Distributor agrees to indemnify and hold harmless the Trust
and each of its Trustees and officers and each person, if any, who controls
the Trust within the meaning of Section 15 of the 1933 Act, against any
loss, liability, claim, damage or expense (including the reasonable cost of
investigating or defending any alleged loss, liability, claim, damage or
expense and reasonable counsel fees incurred in connection therewith)
arising out of or based upon: (i) any violation of the Distributor's
representations or covenants herein contained; (ii) any wrongful act of the
Distributor or any of its employees or representatives or any other person
for whose acts the Distributor is responsible or is alleged to be
responsible (including any selected dealer or person through whom sales are
made pursuant to an agreement with the Distributor); (iii) any untrue
statement of a material fact contained in a registration statement,
Prospectus, SAI or shareholder report of any Fund or any omission to state
a material fact required to be stated therein or necessary in order to make
the statements therein not misleading, to the extent the statement or
omission was made in reliance upon, and in conformity with, information
furnished in writing to the Trust by or on behalf of the Distributor; or
(iv) any untrue statement of a material fact contained in any advertising
material of a Fund or any omission to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading, except to the extent that such statement or omission was made
in reliance upon, and in conformity with, information furnished to the
Distributor by the Trust. In no case (x) is the indemnity by the
Distributor in favor of the Trust or any person indemnified to be deemed to
protect the Trust or any person against any liability to the Distributor or
its security holders to which the Trust or such person would otherwise be
subject by reason of

<PAGE>

U.S. Global Accolade Funds
Distribution Agreement
Page 5 of 7

willful misfeasance, bad faith or ordinary negligence in the performance of
its duties or by reason of its reckless disregard of its obligations and
duties under this agreement, or (y) is the Distributor to be liable under
its indemnity agreements contained in the Section 10(b) with respect to any
claim made against the Trust or any person indemnified unless the Trust or
person, as the case may be, shall have notified the Distributor in writing
of the claim within a reasonable time after the summons or other first
written notification giving information of the nature of the claim shall
have been served upon the Distributor or any such person or after the
Distributor or such person shall have received notice of service on any
designated agent. However, except to the extent the Distributor is harmed
thereby, failure to notify the Distributor of any claim shall not relieve
the Distributor from any liability which it may have to the Trust or any
person against whom such action is brought other than on account of its
indemnity agreement contained in this Section 10(b). The Distributor shall
be entitled to participate at its own expense in the defense, or, if it so
elects, to assume the defense of any suit brought to enforce any claims,
but if the Distributor elects to assume the defense, the defense shall be
conducted by counsel chosen by it and satisfactory to the Trust, or person
or persons, defendant or defendants in the suit. In the event the
Distributor elects to assume the defense of any suit and retain counsel,
the Trust, officers or Trustees or controlling person(s) or defendant(s) in
the suit, shall bear the fees and expenses of any additional counsel
retained by, them. If the Distributor does not elect to assume the defense
of any suit, it will reimburse the Trust, officers or Trustees or
controlling person(s) or defendant(s) in the suit, for the reasonable fees
and expenses of any counsel retained by them. The Distributor agrees to
notify the Trust promptly of the commencement of any litigation or
proceedings against it or any of its officers or directors in connection
with the issuance or sale of any of the Shares.

11. Effectiveness, Termination, etc. This Agreement shall become effective
as follows: (i) with respect to the Shares of each Fund (or class thereof)
identified on Schedule A hereto on the date hereof, as of the date hereof, and
(ii) with respect to the Shares of any Fund (or class thereof) added to Schedule
A hereto, subsequent hereto, as of the date Schedule A is amended to add such
Fund or class of Shares. Unless terminated as provided herein, the Agreement
shall continue in force for two (2) years from the date of its execution and
thereafter from year to year, provided continuance is approved at least annually
by either (i) the vote of a majority of the Trustees of the Trust, or by the
vote of a majority of the outstanding voting securities of the Trust, and (ii)
the vote of a majority of those Trustees of the Trust who are not interested
persons of the Trust and who are not parties to this Agreement or interested
persons of any party, cast in person at a meeting called for the purpose of
voting on the approval. This Agreement shall automatically terminate in the
event of its assignment. In addition to termination by failure to approve
continuance or by assignment, this Agreement may at any time be terminated
without the payment of any penalty with respect to any Fund or class of Shares
thereof by vote of a majority of the Trustees of the Trust who are not
interested persons of the Trust, or by vote of a majority of the outstanding
voting securities of the Trust, on not more than sixty (60) days written notice
by the Trust. This Agreement may be terminated by the Distributor upon not less
than sixty (60) days prior written notice to the Trust. As used in this Section
11, the terms "vote of a majority of the outstanding voting securities,"
"assignment" and "interested person" shall have the respective meanings
specified in the 1940 Act and the rules enacted thereunder as now in effect or
as hereafter amended.

12. Notice. Any notice under this Agreement shall be given in writing
addressed and hand delivered or sent by registered or certified mail, postage
prepaid, to the other party to this Agreement at its principal place of
business.

<PAGE>

U.S. Global Accolade Funds
Distribution Agreement
Page 6 of 7

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

14. Governing Law. To the extent that state law has not been preempted by
the provisions of any law of the United States heretofore or hereafter enacted,
as the same may be amended from time to time, this Agreement shall be
administered, construed and enforced according to the laws of the State of
Texas.

15. Limitation of Liability. The Distributor acknowledges that it has
received notice of and accepts the limitations set forth in the Trust's Amended
and Restated Master Trust Agreement. The Distributor agrees that the Trust's
obligations hereunder shall be limited to the Trust, and that the Distributor
shall have recourse solely against the assets of the Fund with respect to which
the Trust's obligations hereunder relate and shall have no recourse against the
assets of any other Fund or against any shareholder, Trustee, officer, employee
or agent of the Trust.

16. Miscellaneous. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof. The captions in this Agreement are included for convenience of reference
only and in no way define or delimit any of the provisions hereof or otherwise
affect their construction or effect. This Agreement may be executed in two
counterparts, each of which taken together shall constitute one and the same
instrument.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.

U.S. GLOBAL ACCOLADE FUNDS U.S. GLOBAL BROKERAGE, INC.

By: /s/ Frank E. Holmes By: /s/ Creston A. King, III
----------------------------- By: ---------------------------------
Frank E. Holmes Creston A. King, III
President President
Chief Executive Officer

<PAGE>

U.S. Global Accolade Funds
Distribution Agreement
Page 7 of 7

SCHEDULE A

U.S. Global Accolade Funds

Portfolios and Fee Schedule

Portfolios covered by Distribution Agreement:

Bonnel Growth Fund
MegaTrends Fund
Adrian Day Global Opportunity Fund
Regent Eastern European Fund

Fees for distribution and distribution support services on behalf of the
Portfolios:

Annual Fee: $24,000

This fee shall be paid in monthly installments of $2,000.00 each.

September 3, 1998

U.S. GLOBAL ACCOLADE FUNDS U.S. GLOBAL BROKERAGE, INC.

U.S. GLOBAL BROKERAGE, INC.
DISTRIBUTOR OF U.S. GLOBAL INVESTORS FUNDS
AND U.S. GLOBAL ACCOLADE FUNDS SHARES

- --------------------------------------------------------------------------------
SELLING GROUP AGREEMENT
- --------------------------------------------------------------------------------

U.S. Global Brokerage, Inc. is the principal underwriter for the shares of
U.S. Global Investors Funds and U.S. Global Accolade Funds (hereinafter the
"Trust" or "Trusts"), Massachusetts business trusts registered as open-end
management investment companies under the Investment Company Act of 1940 (the
"Act"). The Trusts are series funds presently authorized to issue the series of
shares listed on Attachment A. The intent of the Trusts is to issue additional
series, and each of the current and planned series may offer multiple classes of
shares (hereinafter "Fund" or "Funds"). The shares of additional series of the
Trusts may become available for sale in the future, in which event, the terms
and conditions of this Agreement will be fully applicable thereto.

We are pleased to invite you to participate in the distribution of the
shares of the series of the Trusts under the terms and conditions hereinafter
set forth.

1. As principal underwriter, we have the exclusive right to coordinate
distribution of Trust shares. We are not the agent of any dealer or
any other purchaser of shares of the Trusts, and all sales of the
shares of the Trusts made under this Agreement are made by application
to the Trusts. You are not authorized to act as our agent or as agent
of the Trusts for any purpose. Our obligations to you under this
agreement are subject to all of the provisions of the Distribution
Agreements between us and the Trusts.

2. The prices at which Trust shares may be offered by you to your
customers are the public offering prices described in the then-current
prospectus of the several series.

3. All orders are subject to acceptance or rejection by the Trusts at the
San Antonio, Texas office, in their sole discretion, and all orders
which are accepted by the Trusts will be deemed to be accepted at the
office in Texas. Orders accepted will be confirmed at the applicable
public offering price determined in the manner described in the
then-current prospectus of the appropriate Trust series. No
conditional order will be accepted on any basis other than as
specified in the then-current prospectus of the appropriate Trust
series. The procedure for

<PAGE>

handling orders will be subject to regulations which we, the Trusts,
NSCC or DST, shall issue, from time to time, to dealers.

4. By accepting this offer, you agree:

(a) that you will offer and sell Trust shares only to those persons
who are eligible to purchase such shares;

(b) that you will offer Trust shares only in those jurisdictions in
which the shares may lawfully be offered for sale, as to which we
may advise you, from time to time;

(c) that you will not purchase any shares from your customers at a
price lower than the appropriate redemption price currently
established by the Trust for its shares. Nothing herein
contained, however, shall prevent you from selling any of such
shares for the account of your customers to the Trust, at the
redemption price currently established with respect to such
shares and, at your option, charging your customers a fee for
handling the transaction;

(d) that you will sell shares to your customers only at the public
per share offering price then in effect;

(e) that you will not withhold placing with us customers' orders for
shares so as to benefit yourself as a result of such withholding;

(f) that you will use your best efforts to develop and promote sales
of the shares, that you will be responsible for the proper
instruction and training of all sales personnel employed by you
in order that Trust shares will be offered hereunder in
accordance with the terms and conditions of this Agreement and
all applicable laws, rules and regulations, and that you will
indemnify and hold us harmless in the event that you, or any of
your sales representatives, should violate any such law, rule or
regulation, or any provision of this Agreement which may result
in liability to us, including payment of reasonable attorneys'
fees; and (g) that you will bear all expenses incurred in
connection with your performance of the terms of this Agreement.

5. Payment for shares must be made in accordance with the then-current
prospectus of the appropriate Trust series.

<PAGE>

6. We (directly or in conjunction with a Trust or Trusts) reserve the
right, in our discretion, upon reasonable notice, to suspend sales or
withdraw the offering of shares entirely, to change the price, or to
cancel this Agreement.

7. No member of your organization is authorized by us or by the Trust to
give any information or make any representation concerning the shares
of the Trust, except those contained in the then-current statutory
prospectus relating to such shares and reports to shareholders, and in
such other printed material as we shall, from time to time supply.

8. In accordance with the terms of a Rule 12b-1 Distribution Plan that
has been duly adopted by the Board of Trustees and approved by
shareholders with respect to particular Trust series, the Trust,
subject to authorization by the Board of Trustees, may make payments
to brokers engaged in the distribution of Fund shares and who
administer the accounts of shareholders.

9. Your acceptance of this Agreement constitutes your representation to
us that you are a properly registered or licensed broker-dealer under
federal and appropriate state securities laws and regulations, and
that you are a member of the National Association of Securities
Dealers, Inc. Any provision of this Agreement to the contrary
notwithstanding, in the event that you are expelled from the National
Association of Securities Dealers, Inc., this Agreement will terminate
automatically without notice.

10. All communications to us relating to matters covered by this Agreement
should be sent to our Texas office. Notice to you shall be duly given
if mailed or telegraphed to you at the address specified by you below.

11. This Agreement shall become effective as of the date when it is
executed and dated by you below. This Agreement is terminable by you
or by us, in each case effective upon receipt by the non-terminating
party of notice sent by the terminating party. This Agreement and all
of the rights and obligations of the parties hereunder shall be
governed by and construed in accordance with the laws of the State of
Texas. This agreement shall not be assigned or transferred; provided,
however, that we may assign or transfer this Agreement to any
successor firm or corporation which becomes the principal underwriter
or distributor of the Trusts.

<PAGE>

U.S. GLOBAL BROKERAGE, INC.
7900 CALLAGHAN ROAD
SAN ANTONIO, TX 78229
(210) 308-1258 (210) 308-1274 FAX

Dated: 9/22/98

By: /s/ Eli Suarez
Name: Eli Suarez

Title: Vice President

We have read the foregoing Agreement and we hereby accept and agree to the terms
and conditions therein set forth.

Dated: 9/24/98

Firm Name: Southwest Securities

Authorized Signature By: /s/ Rod Hall

Title: Vice President

Address: 1201 Elm Street, Suite 3500
Dallas, TX 75270

Telephone Number: (214) 658-9131

Fax Number: (214) 749-1820

PLEASE RETURN ONE EXECUTED COPY OF THIS AGREEMENT TO U.S. GLOBAL BROKERAGE, INC.
THE SECOND COPY IS FOR YOUR RECORDS.

<PAGE>

EXHIBIT A

LIST OF FUNDS SUBJECT TO
SELLING GROUP AGREEMENT

FUND NAME CUSIP NO'S
--------------------------------------------------------------
U.S. GLOBAL INVESTORS FUNDS
--------------------------------------------------------------

Gold Shares Fund 911478105
All American Equity Fund 911476604
Global Resources Fund 911476208
Tax Free Fund 911476505
Income Fund 911476406
World Gold Fund 911476802
Real Estate Fund 911476877
Near-Term Tax Free Fund 911476851
China Region Opportunity Fund 911476828

U.S. GLOBAL ACCOLADE FUNDS
--------------------------------------------------------------

Bonnel Growth Fund 90330L105
MegaTrends Fund 90330L204
Adrian Day Global Opportunity Fund 90330L303
Regent Eastern European Fund 90330L402

U.S. GLOBAL BROKERAGE, INC.
DISTRIBUTOR OF U.S. GLOBAL INVESTORS FUNDS
AND U.S. GLOBAL ACCOLADE FUNDS SHARES

- --------------------------------------------------------------------------------
SELLING GROUP AGREEMENT
- --------------------------------------------------------------------------------

We are pleased to invite you to participate in the distribution of the
shares of the series of the Trusts under the terms and conditions hereinafter
set forth.

2. The prices at which Trust shares may be offered by you to your
customers are the public offering prices described in the then-current
prospectus of the several series.

<PAGE>

handling orders will be subject to regulations which we, the Trusts,
NSCC or DST, shall issue, from time to time, to dealers.

4. By accepting this offer, you agree:

(a) that you will offer and sell Trust shares only to those persons
who are eligible to purchase such shares;

(b) that you will offer Trust shares only in those jurisdictions in
which the shares may lawfully be offered for sale, as to which we
may advise you, from time to time;

(d) that you will sell shares to your customers only at the public
per share offering price then in effect;

(e) that you will not withhold placing with us customers' orders for
shares so as to benefit yourself as a result of such withholding;

5. Payment for shares must be made in accordance with the then-current
prospectus of the appropriate Trust series.

<PAGE>

11. This Agreement shall become effective as of the date when it is
executed and dated by you below. This Agreement is terminable by you
or by us, in each case effective within 30 days upon receipt by the
non-terminating party of notice sent by the terminating party. This
Agreement and all of the rights and obligations of the parties
hereunder shall be governed by and construed in accordance with the
laws of the State of Texas. This agreement shall not be assigned or
transferred; provided, however, that we may assign or transfer this
Agreement to any successor firm or corporation which becomes the
principal underwriter or distributor of the Trusts.

<PAGE>

U.S. GLOBAL BROKERAGE, INC.
7900 CALLAGHAN ROAD
SAN ANTONIO, TX 78229
(210) 308-1258 (210) 308-1274 FAX

Dated: 8-27-98

By: /s/ Eli Suarez
Name: Eli Suarez
Title: Vice President

We have read the foregoing Agreement and we hereby accept and agree to the terms
and conditions therein set forth.

Dated: 8-31-98

Firm Name: Fiserv Correspondent Services, Inc.

Authorized Signature By: /s/ Michael P. Saraues

Title: Executive Vice President

Address: P.O. Box 5000
Denver, CO 80217

Telephone Number: (303) 291-5480

Fax Number: (303) 291-5592

PLEASE RETURN ONE EXECUTED COPY OF THIS AGREEMENT TO U.S. GLOBAL BROKERAGE, INC.
THE SECOND COPY IS FOR YOUR RECORDS.

<PAGE>

EXHIBIT A

LIST OF FUNDS SUBJECT TO
SELLING GROUP AGREEMENT

FUND NAME CUSIP NO'S
--------------------------------------------------------------
U.S. GLOBAL INVESTORS FUNDS
--------------------------------------------------------------

U.S. GLOBAL ACCOLADE FUNDS
--------------------------------------------------------------

Bonnel Growth Fund 90330L105
MegaTrends Fund 90330L204
Adrian Day Global Opportunity Fund 90330L303
Regent Eastern European Fund 90330L402

U.S. GLOBAL BROKERAGE, INC.
DISTRIBUTOR OF U.S. GLOBAL INVESTORS FUNDS
AND U.S. GLOBAL ACCOLADE FUNDS SHARES

- --------------------------------------------------------------------------------
SELLING GROUP AGREEMENT
- --------------------------------------------------------------------------------

We are pleased to invite you to participate in the distribution of the
shares of the series of the Trusts under the terms and conditions hereinafter
set forth.

2. The prices at which Trust shares may be offered by you to your
customers are the public offering prices described in the then-current
prospectus of the several series.

<PAGE>

handling orders will be subject to regulations which we, the Trusts,
NSCC or DST, shall issue, from time to time, to dealers.

4. By accepting this offer, you agree:

(a) that you will offer and sell Trust shares only to those persons
who are eligible to purchase such shares;

(b) that you will offer Trust shares only in those jurisdictions in
which the shares may lawfully be offered for sale, as to which we
may advise you, from time to time;

(d) that you will sell shares to your customers only at the public
per share offering price then in effect;

(e) that you will not withhold placing with us customers' orders for
shares so as to benefit yourself as a result of such withholding;

5. Payment for shares must be made in accordance with the then-current
prospectus of the appropriate Trust series.

<PAGE>

U.S. GLOBAL BROKERAGE, INC.
7900 CALLAGHAN ROAD
SAN ANTONIO, TX 78229
(210) 308-1258 (210) 308-1274 FAX

Dated: 8-27-98

By: /s/ Eli Suarez
Name: Eli Suarez
Title: Vice President

We have read the foregoing Agreement and we hereby accept and agree to the terms
and conditions therein set forth.

Dated: 9-10-98

Firm Name: Barron Chase Securities

Authorized Signature By: /s/ John J. East

Title: Vice President

Address: 7700 W. Camino Real
Boca Raton, FL 33433

Telephone Number: (561) 347-1200

Fax Number: (561) 750-3592

PLEASE RETURN ONE EXECUTED COPY OF THIS AGREEMENT TO U.S. GLOBAL BROKERAGE, INC.
THE SECOND COPY IS FOR YOUR RECORDS.

<PAGE>

EXHIBIT A

LIST OF FUNDS SUBJECT TO
SELLING GROUP AGREEMENT

FUND NAME CUSIP NO'S
--------------------------------------------------------------
U.S. GLOBAL INVESTORS FUNDS
--------------------------------------------------------------

U.S. GLOBAL ACCOLADE FUNDS
--------------------------------------------------------------

Bonnel Growth Fund 90330L105
MegaTrends Fund 90330L204
Adrian Day Global Opportunity Fund 90330L303
Regent Eastern European Fund 90330L402

U.S. GLOBAL BROKERAGE, INC.
DISTRIBUTOR OF U.S. GLOBAL INVESTORS FUNDS
AND U.S. GLOBAL ACCOLADE FUNDS SHARES

- --------------------------------------------------------------------------------
SELLING GROUP AGREEMENT
- --------------------------------------------------------------------------------

We are pleased to invite you to participate in the distribution of the
shares of the series of the Trusts under the terms and conditions hereinafter
set forth.

2. The prices at which Trust shares may be offered by you to your
customers are the public offering prices described in the then-current
prospectus of the several series.

<PAGE>

handling orders will be subject to regulations which we, the Trusts,
NSCC or DST, shall issue, from time to time, to dealers.

4. By accepting this offer, you agree:

(a) that you will offer and sell Trust shares only to those persons
who are eligible to purchase such shares;

(b) that you will offer Trust shares only in those jurisdictions in
which the shares may lawfully be offered for sale, as to which we
may advise you, from time to time;

(d) that you will sell shares to your customers only at the public
per share offering price then in effect;

(e) that you will not withhold placing with us customers' orders for
shares so as to benefit yourself as a result of such withholding;

5. Payment for shares must be made in accordance with the then-current
prospectus of the appropriate Trust series.

<PAGE>

U.S. GLOBAL BROKERAGE, INC.
7900 CALLAGHAN ROAD
SAN ANTONIO, TX 78229
(210) 308-1258 (210) 308-1274 FAX

Dated: 11-16-98

By: /s/ Eli Suarez
Name: Eli Suarez
Title: Vice President

We have read the foregoing Agreement and we hereby accept and agree to the terms
and conditions therein set forth.

Dated: 10-30-98

Firm Name: First Southwest Company

Authorized Signature By: /s/ Terry Kitchen

Title: Manager, Mutual Fund Ops.

Address: 1700 Pacific Avenue, Ste. 500
Dallas, Texas 75201-4652

Telephone Number: (214) 953-4159

Fax Number: (214) 953-4120

PLEASE RETURN ONE EXECUTED COPY OF THIS AGREEMENT TO U.S. GLOBAL BROKERAGE, INC.
THE SECOND COPY IS FOR YOUR RECORDS.

<PAGE>

EXHIBIT A

LIST OF FUNDS SUBJECT TO
SELLING GROUP AGREEMENT

FUND NAME CUSIP NO'S
--------------------------------------------------------------
U.S. GLOBAL INVESTORS FUNDS
--------------------------------------------------------------

U.S. GLOBAL ACCOLADE FUNDS
--------------------------------------------------------------

Bonnel Growth Fund 90330L105
MegaTrends Fund 90330L204
Global Blue Chip Fund 90330L303
Regent Eastern European Fund 90330L402

U.S. GLOBAL BROKERAGE, INC.
DISTRIBUTOR OF U.S. GLOBAL INVESTORS FUNDS
AND U.S. GLOBAL ACCOLADE FUNDS SHARES

- --------------------------------------------------------------------------------
SELLING GROUP AGREEMENT
- --------------------------------------------------------------------------------

We are pleased to invite you to participate in the distribution of the
shares of the series of the Trusts under the terms and conditions hereinafter
set forth.

2. The prices at which Trust shares may be offered by you to your
customers are the public offering prices described in the then-current
prospectus of the several series.

<PAGE>

handling orders will be subject to regulations which we, the Trusts,
NSCC or DST, shall issue, from time to time, to dealers.

4. By accepting this offer, you agree:

(a) that you will offer and sell Trust shares only to those persons
who are eligible to purchase such shares;

(b) that you will offer Trust shares only in those jurisdictions in
which the shares may lawfully be offered for sale, as to which we
may advise you, from time to time;

(d) that you will sell shares to your customers only at the public
per share offering price then in effect;

(e) that you will not withhold placing with us customers' orders for
shares so as to benefit yourself as a result of such withholding;

5. Payment for shares must be made in accordance with the then-current
prospectus of the appropriate Trust series.

<PAGE>

U.S. GLOBAL BROKERAGE, INC.
7900 CALLAGHAN ROAD
SAN ANTONIO, TX 78229
(210) 308-1258 (210) 308-1274 FAX

Dated: 12-9-98

By: /s/ Eli Suarez
Name: Eli Suarez
Title: Vice President

We have read the foregoing Agreement and we hereby accept and agree to the terms
and conditions therein set forth.

Dated: 12-11-98

Firm Name: E*Trade Securities

Authorized Signature By: /s/ J. C. Marrilleaux

Title: Operations Manager

Address: 2400 Beng Rd. 4 Embarcadero Place
Palo Alto, CA 94303

Telephone Number: (916) 858-8863

Fax Number: (916) 858-8841

PLEASE RETURN ONE EXECUTED COPY OF THIS AGREEMENT TO U.S. GLOBAL BROKERAGE, INC.
THE SECOND COPY IS FOR YOUR RECORDS.

<PAGE>

EXHIBIT A

LIST OF FUNDS SUBJECT TO
SELLING GROUP AGREEMENT

FUND NAME CUSIP NO'S
--------------------------------------------------------------
U.S. GLOBAL INVESTORS FUNDS
--------------------------------------------------------------

U.S. GLOBAL ACCOLADE FUNDS
--------------------------------------------------------------

Bonnel Growth Fund 90330L105
MegaTrends Fund 90330L204
Global Blue Chip Fund 90330L303
Regent Eastern European Fund 90330L402

U.S. GLOBAL BROKERAGE, INC.
DISTRIBUTOR OF U.S. GLOBAL INVESTORS FUNDS
AND U.S. GLOBAL ACCOLADE FUNDS SHARES

- --------------------------------------------------------------------------------
SELLING GROUP AGREEMENT
- --------------------------------------------------------------------------------

We are pleased to invite you to participate in the distribution of the
shares of the series of the Trusts under the terms and conditions hereinafter
set forth.

2. The prices at which Trust shares may be offered by you to your
customers are the public offering prices described in the then-current
prospectus of the several series.

<PAGE>

handling orders will be subject to regulations which we, the Trusts,
NSCC or DST, shall issue, from time to time, to dealers.

4. By accepting this offer, you agree:

(a) that you will offer and sell Trust shares only to those persons
who are eligible to purchase such shares;

(b) that you will offer Trust shares only in those jurisdictions in
which the shares may lawfully be offered for sale, as to which we
may advise you, from time to time;

(d) that you will sell shares to your customers only at the public
per share offering price then in effect;

(e) that you will not withhold placing with us customers' orders for
shares so as to benefit yourself as a result of such withholding;

5. Payment for shares must be made in accordance with the then-current
prospectus of the appropriate Trust series.

<PAGE>

U.S. GLOBAL BROKERAGE, INC.
7900 CALLAGHAN ROAD
SAN ANTONIO, TX 78229
(210) 308-1258 (210) 308-1274 FAX

Dated: 12-10-98

By: /s/ Eli Suarez
Name: Eli Suarez
Title: Vice President

We have read the foregoing Agreement and we hereby accept and agree to the terms
and conditions therein set forth.

Dated: 12-11-98

Firm Name: Freeman Welwood & Co., Inc.

Authorized Signature By: /s/ John Lowry

Title: Manager, Mutual Funds Dept.

Address: 1501 4th Avenue, #1700
Seattle, WA 98101

Telephone Number: (206) 382-5399

Fax Number: (206) 382-5364

PLEASE RETURN ONE EXECUTED COPY OF THIS AGREEMENT TO U.S. GLOBAL BROKERAGE, INC.
THE SECOND COPY IS FOR YOUR RECORDS.

<PAGE>

EXHIBIT A

LIST OF FUNDS SUBJECT TO
SELLING GROUP AGREEMENT

FUND NAME CUSIP NO'S
--------------------------------------------------------------
U.S. GLOBAL INVESTORS FUNDS
--------------------------------------------------------------

U.S. GLOBAL ACCOLADE FUNDS
--------------------------------------------------------------

Bonnel Growth Fund 90330L105
MegaTrends Fund 90330L204
Global Blue Chip Fund 90330L303
Regent Eastern European Fund 90330L402

U.S. GLOBAL BROKERAGE, INC.
DISTRIBUTOR OF U.S. GLOBAL INVESTORS FUNDS
AND U.S. GLOBAL ACCOLADE FUNDS SHARES

- --------------------------------------------------------------------------------
SELLING GROUP AGREEMENT
- --------------------------------------------------------------------------------

We are pleased to invite you to participate in the distribution of the
shares of the series of the Trusts under the terms and conditions hereinafter
set forth.

2. The prices at which Trust shares may be offered by you to your
customers are the public offering prices described in the then-current
prospectus of the several series.

<PAGE>

handling orders will be subject to regulations which we, the Trusts,
NSCC or DST, shall issue, from time to time, to dealers.

4. By accepting this offer, you agree:

(a) that you will offer and sell Trust shares only to those persons
who are eligible to purchase such shares;

(b) that you will offer Trust shares only in those jurisdictions in
which the shares may lawfully be offered for sale, as to which we
may advise you, from time to time;

(d) that you will sell shares to your customers only at the public
per share offering price then in effect;

(e) that you will not withhold placing with us customers' orders for
shares so as to benefit yourself as a result of such withholding;

5. Payment for shares must be made in accordance with the then-current
prospectus of the appropriate Trust series.

<PAGE>

U.S. GLOBAL BROKERAGE, INC.
7900 CALLAGHAN ROAD
SAN ANTONIO, TX 78229
(210) 308-1258 (210) 308-1274 FAX

Dated: 12-9-98

By: /s/ Eli Suarez
Name: Eli Suarez
Title: Vice President

We have read the foregoing Agreement and we hereby accept and agree to the terms
and conditions therein set forth.

Dated: 12-11-98

Firm Name: Bank of New York Clearing Services, LLC

Authorized Signature By: /s/ Roberta J. Protz

Title: Assistant Vice President

Address: 111 E. Kilbourn
Milwaukee, WI 53202

Telephone Number: (414) 225-4266

Fax Number: (414) 347-1950

PLEASE RETURN ONE EXECUTED COPY OF THIS AGREEMENT TO U.S. GLOBAL BROKERAGE, INC.
THE SECOND COPY IS FOR YOUR RECORDS.

<PAGE>

EXHIBIT A

LIST OF FUNDS SUBJECT TO
SELLING GROUP AGREEMENT

FUND NAME CUSIP NO'S
--------------------------------------------------------------
U.S. GLOBAL INVESTORS FUNDS
--------------------------------------------------------------

U.S. GLOBAL ACCOLADE FUNDS
--------------------------------------------------------------

Bonnel Growth Fund 90330L105
MegaTrends Fund 90330L204
Global Blue Chip Fund 90330L303
Regent Eastern European Fund 90330L402

U.S. GLOBAL BROKERAGE, INC.
DISTRIBUTOR OF U.S. GLOBAL INVESTORS FUNDS
AND U.S. GLOBAL ACCOLADE FUNDS SHARES

- --------------------------------------------------------------------------------
SELLING GROUP AGREEMENT
- --------------------------------------------------------------------------------

We are pleased to invite you to participate in the distribution of the
shares of the series of the Trusts under the terms and conditions hereinafter
set forth.

2. The prices at which Trust shares may be offered by you to your
customers are the public offering prices described in the then-current
prospectus of the several series.

<PAGE>

handling orders will be subject to regulations which we, the Trusts,
NSCC or DST, shall issue, from time to time, to dealers.

4. By accepting this offer, you agree:

(a) that you will offer and sell Trust shares only to those persons
who are eligible to purchase such shares;

(b) that you will offer Trust shares only in those jurisdictions in
which the shares may lawfully be offered for sale, as to which we
may advise you, from time to time;

(d) that you will sell shares to your customers only at the public
per share offering price then in effect;

(e) that you will not withhold placing with us customers' orders for
shares so as to benefit yourself as a result of such withholding;

5. Payment for shares must be made in accordance with the then-current
prospectus of the appropriate Trust series.

<PAGE>

U.S. GLOBAL BROKERAGE, INC.
7900 CALLAGHAN ROAD
SAN ANTONIO, TX 78229
(210) 308-1258 (210) 308-1274 FAX

Dated: August 25, 1998

By: /s/ Mark Brown

We have read the foregoing Agreement and we hereby accept and agree to the terms
and conditions therein set forth.

Dated: 9/25/98

Firm Name: Bank One Securities, Inc.

Authorized Signature By: /s/ J

Title: COO

Address: 733 Greencrest Drive
Westerville, Ohio 43081

Telephone Number: (614) 248-5119

Fax Number: (614) 248-2317

PLEASE RETURN ONE EXECUTED COPY OF THIS AGREEMENT TO U.S. GLOBAL BROKERAGE, INC.
THE SECOND COPY IS FOR YOUR RECORDS.

<PAGE>

EXHIBIT A

LIST OF FUNDS SUBJECT TO
SELLING GROUP AGREEMENT

FUND NAME CUSIP NO'S
--------------------------------------------------------------
U.S. GLOBAL INVESTORS FUNDS
--------------------------------------------------------------

U.S. GLOBAL ACCOLADE FUNDS
--------------------------------------------------------------

Bonnel Growth Fund 90330L105
MegaTrends Fund 90330L204
Adrian Day Global Opportunity Fund 90330L303
Regent Eastern European Fund 90330L402

[U.S. GLOBAL INVESTORS, INC. LOGO]

December 28, 1998

U.S. Global Accolade Funds
7900 Callaghan Road
San Antonio, Texas 78229

Ladies and Gentlemen:

I hereby consent to the incorporation by reference in Post-Effective Amendment
No. 14 ("Amendment") to Registration Statement 2-35439 on Form N-1A
("Registration Statement") of U.S. Global Accolade Funds ("Trust") of my opinion
with respect to the legality of the shares of the Trust representing interests
in the Bonnel Growth Fund, MegaTrends Fund, Global Blue Chip Fund and Regent
Eastern European Fund, assuming that all of the shares are sold, issued and paid
for in accordance with the terms of the Trusts' prospectuses and Statements of
Additional Information as contained in this Registration Statement on Form N1-A.

I am licensed to practice law in the State of Texas and not in any other
jurisdic tion. I do not claim special expertise in the laws of any other
jurisdiction.

I hereby consent to the use of this opinion as an exhibit to this Registration
Statement filed under Part C. I further consent to reference in the prospectus
of the Trust to the fact that this opinion concerning the legality of the issue
has been rendered by me.

Sincerely,

/s/ Susan B. McGee

Susan B. McGee
Executive Vice President, Secretary

SBM:kle

7900 Callaghan Road
........................
MAIL ADDRESS:
P.O. Box 781234
San Antonio, Texas
78278-1234
........................
Tel 210-308-1234
........................
1-800-US-FUNDS
........................
Fax 210-308-1223
........................
email [email protected]

POWER OF ATTORNEY

We the undersigned officers and trustees of U.S. Global Accolade Funds
(Trust), do hereby severally constitute and appoint Frank E. Holmes and Susan B.
McGee, and each of them acting singularly, as our true and lawful attorneys,
with full powers to them and each of them to sign for us, in our names in the
capacities indicated below, any Post-Effective Amendment to the Registration
Statement of the Trust on Form N-1A to be filed with the Securities and Exchange
Commission and to take such further action in respect thereto as they, in their
sole discretion, deem necessary to enable the Trust to comply with the
provisions of the Securities Act of 1933, as amended, and the Investment Company
Act of 1940, as amended, and all requirements and regulations of the Securities
and Exchange Commission, hereby ratifying and confirming our signatures as they
may be signed by our said attorneys to any and all documents related to said
Amendment to the Registration Statement.

IN WITNESS WHEREOF, we have hereunto set our hands on the dates indicated
below.

Signature Title Date

/s/ Frank E. Holmes
- --------------------
Frank E. Holmes Trustee December 18, 1998
President

/s/ J. Michael Belz
- --------------------
J. Michael Belz Trustee December 18, 1998

/s/ Richard E. Hughs
- --------------------
Richard E. Hughs Trustee December 18, 1998

/s/ Clark R. Mandigo
- --------------------
Clark R. Mandigo Trustee December 18, 1998

/s/ Susan B. McGee
- --------------------
Susan B. McGee Executive Vice President, December 18, 1998
Secretary, General Counsel

<ARTICLE> 6
<LEGEND>
This financial data schedule contains summary financial information extracted
from the annual report filed on form N-SAR and is qualified in its entirety by
refernce to such annual report on form N-SAR.
</LEGEND>
<SERIES>
<NUMBER> 1
<NAME> BONNEL GROWTH FUND
<MULTIPLIER> 1

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> Oct-31-1998
<PERIOD-START> Nov-01-1997
<PERIOD-END> Oct-31-1998
<INVESTMENTS-AT-COST> 81100789
<INVESTMENTS-AT-VALUE> 87851250
<RECEIVABLES> 1787416
<ASSETS-OTHER> 21802
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 89660468
<PAYABLE-FOR-SECURITIES> 29106
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<SHARES-COMMON-STOCK> 5424122
<SHARES-COMMON-PRIOR> 5315916
<ACCUMULATED-NII-CURRENT> 0
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<ACCUMULATED-NET-GAINS> 1151551
<OVERDISTRIBUTION-GAINS> 0
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<NET-ASSETS> 87750976
<DIVIDEND-INCOME> 440631
<INTEREST-INCOME> 215398
<OTHER-INCOME> 0
<EXPENSES-NET> (1870928)
<NET-INVESTMENT-INCOME> (1214899)
<REALIZED-GAINS-CURRENT> 2500611
<APPREC-INCREASE-CURRENT> 557231
<NET-CHANGE-FROM-OPS> 1842943
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (19869076)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 41217687
<NUMBER-OF-SHARES-REDEEMED> (59113926)
<SHARES-REINVESTED> 19029963
<NET-CHANGE-IN-ASSETS> (16892409)
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<PER-SHARE-NAV-BEGIN> 19.68
<PER-SHARE-NII> (0.23)
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<PER-SHARE-DISTRIBUTIONS> (3.71)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 16.18
<EXPENSE-RATIO> 1.84
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00

</TABLE>

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> Oct-31-1998
<PERIOD-START> Nov-01-1997
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<INVESTMENTS-AT-COST> 20311870
<INVESTMENTS-AT-VALUE> 20777905
<RECEIVABLES> 1326871
<ASSETS-OTHER> 6230
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<TOTAL-ASSETS> 22111006
<PAYABLE-FOR-SECURITIES> 1297260
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<TOTAL-LIABILITIES> 1371473
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<SHARES-COMMON-STOCK> 1827918
<SHARES-COMMON-PRIOR> 1834011
<ACCUMULATED-NII-CURRENT> 0
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<DIVIDEND-INCOME> 323292
<INTEREST-INCOME> 140824
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<EXPENSES-NET> (497157)
<NET-INVESTMENT-INCOME> (33041)
<REALIZED-GAINS-CURRENT> 3311828
<APPREC-INCREASE-CURRENT> (4265251)
<NET-CHANGE-FROM-OPS> (986464)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (19609)
<DISTRIBUTIONS-OF-GAINS> (3583127)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2370297
<NUMBER-OF-SHARES-REDEEMED> (6030092)
<SHARES-REINVESTED> 3496527
<NET-CHANGE-IN-ASSETS> (4752468)
<ACCUMULATED-NII-PRIOR> 20079
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<GROSS-EXPENSE> 497157
<AVERAGE-NET-ASSETS> 24163069
<PER-SHARE-NAV-BEGIN> 13.90
<PER-SHARE-NII> (0.02)
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<PER-SHARE-DIVIDEND> (0.01)
<PER-SHARE-DISTRIBUTIONS> (2.01)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 11.35
<EXPENSE-RATIO> 2.06
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00

</TABLE>

<S> <C>
<PERIOD-TYPE> YEAR
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<INVESTMENTS-AT-VALUE> 1657134
<RECEIVABLES> 78587
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<TOTAL-ASSETS> 1752153
<PAYABLE-FOR-SECURITIES> 137625
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 41365
<TOTAL-LIABILITIES> 178990
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<ACCUMULATED-NII-CURRENT> 1499
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<ACCUMULATED-NET-GAINS> (1149990)
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<ACCUM-APPREC-OR-DEPREC> (96393)
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<DIVIDEND-INCOME> 40116
<INTEREST-INCOME> 54458
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<EXPENSES-NET> (205832)
<NET-INVESTMENT-INCOME> (111258)
<REALIZED-GAINS-CURRENT> (1166647)
<APPREC-INCREASE-CURRENT> 245438
<NET-CHANGE-FROM-OPS> (1032467)
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<DISTRIBUTIONS-OF-INCOME> (50314)
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<NUMBER-OF-SHARES-REDEEMED> (1605513)
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<GROSS-EXPENSE> 205832
<AVERAGE-NET-ASSETS> 2754260
<PER-SHARE-NAV-BEGIN> 8.96
<PER-SHARE-NII> (.48)
<PER-SHARE-GAIN-APPREC> (2.27)
<PER-SHARE-DIVIDEND> .00
<PER-SHARE-DISTRIBUTIONS> (.14)
<RETURNS-OF-CAPITAL> .00
<PER-SHARE-NAV-END> 6.07
<EXPENSE-RATIO> 7.45
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> .00

</TABLE>

<S> <C>
<PERIOD-TYPE> YEAR
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<PERIOD-START> Nov-01-1997
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<INVESTMENTS-AT-COST> 8137716
<INVESTMENTS-AT-VALUE> 5718936
<RECEIVABLES> 3860
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<TOTAL-LIABILITIES> 67132
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<PAID-IN-CAPITAL-COMMON> 8469753
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<SHARES-COMMON-PRIOR> 784294
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<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (374861)
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<ACCUM-APPREC-OR-DEPREC> (2418769)
<NET-ASSETS> 5676123
<DIVIDEND-INCOME> 48664
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<EXPENSES-NET> (361142)
<NET-INVESTMENT-INCOME> (188763)
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</TABLE>