BENHAM INVESTMENT TRUST, 485BPOS, 1996-04-24

BENHAM INVESTMENT TRUST
485BPOS, 1996-04-24

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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 _X__

File No. 33-65170:

Pre-Effective Amendment No.______ ____

Post-Effective Amendment No.__3__ _X__

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 _X__

File No. 811-7822:

Amendment No.__4__

BENHAM INVESTMENT TRUST
(Exact Name of Registrant as Specified in Charter)

1665 Charleston Road, Mountain View, CA 94043
(Address of Principal Executive Offices)

Registrant's Telephone Number, including Area Code: 415-965-8300

Douglas A. Paul
1665 Charleston Road, Mountain View, CA 94043
(Name and Address of Agent for Service)

Approximate Date of Proposed Public Offering: First Offered 11/17/93

It is proposed that this filing become effective:

______ immediately upon filing pursuant to paragraph (b) of Rule 485
__X___ on April 24, 1996 pursuant to paragraph (b) of Rule 485
______ 60 days after filing pursuant to paragraph (a) of Rule 485
______ on (date) pursuant to paragraph (a) of Rule 485
______ 75 days after filing pursuant to paragraph (a)(2) of Rule 485

- --------------------------------------------------------------------------------
Registrant has elected to register an indefinite number of shares of beneficial
interest under the Securities Act of 1933 pursuant to Rule 24f-2 under the
Investment Company Act of 1940. On April 8, 1996, Registrant Filed a Rule 24f-2
Notice on Form 24f-2 with respect to its fiscal year ended February 29, 1996.

<PAGE>

BENHAM INVESTMENT TRUST
BENHAM PRIME MONEY MARKET FUND

1933 Act Post-Effective Amendment No. 3
1940 Act Amendment No. 4

FORM N-1A
CROSS-REFERENCE SHEET

PART A: PROSPECTUS

ITEM PROSPECTUS CAPTION

1 Cover Page

2(a) Summary of Fund Expenses
(b),(c) Not Applicable

3(a) Financial Highlights
(b) Not Applicable
(c),(d) Performance

4(a)(i) Cover Page, About Benham Investment Trust
(a)(ii),(b) How the Fund Works, About Money Market Instruments, Other
Investment Policies and Techniques
(c) Investment Considerations

5(a) About Benham Investment Trust
(b)-(f) The Benham Group, Advisory and Service Fees, Summary of Fund
Expenses
(g) Not Applicable

5A Not Applicable

6(a) About Benham Investment Trust, How to Redeem Your Investment
(b)-(d) Not Applicable
(e) How to Invest
(f), (g) Distributions and Taxes

7(a) Cover Page, Distribution of Shares
(b) Share Price, Broker-Dealer Transactions
(c) Not Applicable
(d) How to Buy Shares, About Benham-Sponsored Retirement Plans
(e),(f) Not Applicable

8(a) How to Redeem Your Investment, How to Redeem Shares, About
Benham-Sponsored Retirement Plans
(b) Broker-Dealer Transactions
(c),(d) How to Redeem Your Investment, About Benham-Sponsored
Retirement Plans

9 Not Applicable

PART B: STATEMENT OF ADDITIONAL INFORMATION

ITEM STATEMENT OF ADDITIONAL INFORMATION CAPTION

10 Cover Page

11 Table of Contents

12 Not Applicable

13(a) Investment Policies and Techniques
(b) Investment Restrictions
(c) Investment Policies and Techniques, Investment Restrictions
(d) Not Applicable

14(a)-(b) Trustees and Officers
(c) Not Applicable

15(a) Not Applicable
(b) Additional Purchase and Redemption Information
(c) Trustees and Officers

16(a) Investment Advisory Services
(b)-(d) Investment Advisory Services, Administrative and Transfer
Agent Services, Expense Limitation Agreement
(e)-(g) Not Applicable
(h) About Benham Investment Trust
(i) Administrative and Transfer Agent Services

17(a) Portfolio Transactions
(b) Not Applicable
(c),(d) Portfolio Transactions
(e),(f) Not Applicable

18(a) About Benham Investment Trust
(b) Not Applicable

19(a) Additional Purchase and Redemption Information
(b) Valuation of Portfolio Securities
(c) Not Applicable

20 Taxes

21(a) Additional Purchase and Redemption Information
(b),(c) Not Applicable

22 Performance

23 Cover Page

<PAGE>
BENHAM PRIME
MONEY MARKET FUND

A Series of Benham Investment Trust

Prospectus * April 24, 1996

[picture of a desktop with a lamp, books, mail,
a pen, stamps, and eyeglasses]

[company logo] The Benham Group
Part of the Twentieth Century Family of Mutual Funds

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[information in left margin of page]
THE BENHAM
GROUP
1665 Charleston Rd.
Mountain View
California 94043

Fund
Information
1-800-331-8331
1-415-965-4274

Investor
Services
1-800-321-8321
1-415-965-4222

TDD Service
1-800-624-6338
1-415-965-4764

Benham Group
Representatives
are available
by telephone weekdays from
5 a.m. to 5 p.m. Pacific Time.
- -------------------

BENHAM PRIME
MONEY MARKET FUND

A Series of Benham Investment Trust

Prospectus o April 24, 1996

BENHAM PRIME MONEY MARKET FUND is a no-load, open-end mutual fund that seeks the
highest level of current income consistent with preservation of capital. The
Fund buys high-quality, U.S. dollar-denominated money market instruments and
other short-term obligations of banks, governments, and corporations.

Please read this prospectus carefully and retain it for future reference. It is
designed to help you decide whether the Fund's goals match your own. A Statement
of Additional Information (also dated April 24, 1996) has been filed with the
Securities and Exchange Commission (SEC) and is incorporated herein by
reference. For a free copy, call or write The Benham Group.

Mutual fund shares are not insured by the FDIC, the Federal Reserve Board, or
any other agency. An investment in the Fund is neither insured nor guaranteed by
the U.S. government. There is no assurance that the Fund will be able to
maintain a $1.00 share price.

AS WITH ALL MUTUAL FUNDS, 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.

SUMMARY OF FUND EXPENSES

The tables below illustrate the fees and expenses an investor in the Fund would
incur directly or indirectly. The figures shown are based on the Fund's
historical expenses, adjusted to reflect the expense limitation agreement in
effect as of April 24, 1996.

================================================================================
A. SHAREHOLDER TRANSACTION EXPENSES
- --------------------------------------------------------------------------------

Sales load imposed on purchases .............................. None
Sales load imposed on reinvested dividends ................... None
Deferred sales load .......................................... None
Exchange fee ................................................. None

================================================================================
B. ANNUAL FUND OPERATING EXPENSES
As a Percentage of Average Daily Net Assets
- --------------------------------------------------------------------------------

Investment Advisory fee
(net of expense limitation) ............................ .19%*
12b-1 fee .................................................... None
Other expenses ............................................... .31%
Total Fund operating expenses
(net of expense limitation) ............................ .50%*

* Benham Management Corporation (BMC) has agreed to limit the Fund`s total
operating expenses through May 31, 1998 to a percentage of average daily net
assets. This expense limitation effectively requires that total expenses paid by
the Fund not exceed .50% of average daily net assets. Amounts which are actually
paid by unaffiliated third parties do not apply to this expense limit. The
agreement provides that BMC may recover amounts absorbed on behalf of the Fund
during the preceding 11 months if, and to the extent that, for any given month,
the Fund`s expenses were less than the expense limit in effect at the time. In
addition to the contractual expense limitation, BMC voluntarily reimbursed the
Fund for all expenses through December 31, 1994. On January 1, 1995, the Fund
began paying expenses equal to an additional .10% of average daily net assets
and continued to do so each subsequent month until the contractual expense limit
was reached on May 1, 1995. Voluntary expense limitations are not eligible for
recovery by BMC. After May 31, 1998, the expense limitation is subject to annual
renewal in June. If this expense limitation were not in effect, the Fund`s
investment advisory fee, other expenses, and total operating expenses would be
.31%, .31%, and .62%, respectively.

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[information in right margin of page]
Please read this Prospectus carefully and retain it for future reference. It is
designed to help you decide if the Fund's goals match your own.
- -------------------

The Fund pays BMC an investment advisory fee which is based on its average daily
net assets. See page 31 for more information. Other expenses include
administrative and transfer agent fees paid to Benham Financial Services, Inc.
(BFS).

================================================================================
C. EXAMPLE OF EXPENSES
- --------------------------------------------------------------------------------

The following table illustrates the expenses a shareholder would pay on a $1,000
investment in the Fund over periods of one, three, five, and ten years based on
expenses shown in Table B assuming (i) a 5% annual return and (ii) full
redemption at the end of each time period.

ONE YEAR THREE YEARS FIVE YEARS TEN YEARS

$5 $16 $28 $63

We include this table to help you understand the various costs and expenses that
you, as a shareholder, will bear directly or indirectly. THIS EXAMPLE SHOULD NOT
BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES OR PERFORMANCE; ACTUAL
EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN, AND THE FUND MAY NOT REALIZE
THE 5% HYPOTHETICAL RATE OF RETURN REQUIRED BY THE SEC FOR THIS EXAMPLE.

FINANCIAL HIGHLIGHTS

The information presented on the following page has been audited by KPMG Peat
Marwick LLP, independent auditors. Their report on the financial statements and
financial highlights is included in the Fund's Annual Report, which is
incorporated by reference in the Fund's Statement of Additional Information.

================================================================================
BENHAM PRIME MONEY MARKET FUND
Years ended February 28 (except as noted)
- --------------------------------------------------------------------------------
February 29, February 28, February 28,
1996 1995 1994+
--------- -------- --------
PER-SHARE DATA
- --------------

NET ASSET VALUE (NAV) AT
BEGINNING OF PERIOD $1.00 1.00 1.00

Income from Investment Operations

Net Investment Income .0560 .0493 .0095

Less Distributions

Dividends From Net Investment Income (.0560) (.0493) (.0095)

NAV AT END OF PERIOD $1.00 1.00 1.00
===== ==== ====

TOTAL RETURN* 5.60% 4.93% .96%
- ------------

SUPPLEMENTAL DATA AND RATIOS
- ----------------------------

Net Assets at End of
Period (in thousands) $1,270,653 1,509,863 75,168

Ratio of Expenses to Average Daily
Net Assets++ .48% .04% 0%

Ratio of Expenses to Average Daily
Net Assets (Before Reimbursement)++ .62% .71% 1.49%**

Ratio of Net Investment Income to
Average Daily Net Assets 5.43% 5.28% 3.35%**

Ratio of Net Investment Income to Average
Daily Net Assets (Before Reimbursement) 5.29% 4.61% 1.86%**

+ Commencement of operations for the Benham Prime Money Market Fund was
November 17, 1993.

++ The ratio for the year ended February 29, 1996, includes expenses paid
through expense offset arrangements.

* Total return figures assume reinvestment of dividends and are not annualized.

** Annualized.

HOW THE FUND WORKS

INVESTMENT OBJECTIVE

The Fund's investment objective is to seek the highest level of current income
consistent with preservation of capital. As with any mutual fund, there is no
guarantee that the Fund will achieve its investment objective.

The Fund's investment objective and concentration policy are fundamental and may
not be changed without shareholder approval. Unless otherwise noted, all other
investment policies are not fundamental and may be changed by the board of
trustees.

ELIGIBLE INVESTMENTS

The Fund buys high-quality ("first-tier"), U.S. dollar-denominated money market
instruments and other short-term obligations of banks, governments, and
corporations. The table below provides a brief overview of the Fund's possible
investments. Obligations referenced in the table are described in the section
entitled "About Money Market Instruments", which begins on page 9.

================================================================================
ISSUERS TYPES OF OBLIGATIONS
- --------------------------------------------------------------------------------

Domestic and foreign finan- Negotiable certificates of deposit,
cial institutions (e.g., banks, bankers' acceptances, bank notes,
broker-dealers, insurance and commercial paper
companies, leasing and
financing corporations)

- --------------------------------------------------------------------------------
Domestic and foreign Commercial paper and short-term
nonfinancial corporations corporate debt obligations (including
fixed- and variable-rate notes and bonds)

- --------------------------------------------------------------------------------
U.S. government and its U.S. Treasury bills, notes, bonds, and
agencies and instrumentalities U.S. government agency obligations
(including floating-rate agency
securities)

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

Foreign governments and their Commercial paper and discount notes
agencies and instrumentalities

QUALITY AND MATURITY CRITERIA

BMC follows regulatory guidelines on quality and maturity for the Fund's
investments, which are designed to help maintain a stable $1.00 share price. In
particular, the Fund:

(1) Buys only U.S. dollar-denominated obligations with remaining maturities of
13 months or less (and variable- and floating-rate obligations with demand
features that effectively shorten their maturities to 13 months or less).

(2) Maintains a dollar-weighted average portfolio maturity of 90 days or less.

(3) Restricts its investments to high-quality obligations determined by BMC to
present minimal credit risks, pursuant to guidelines established by the
board of trustees.

To be considered high-quality, an obligation must be one of the following:

(1) A U.S. government obligation.

(2) Rated (or issued by an issuer rated with respect to a class of short-term
debt obligations) within the two highest rating categories for short-term
debt obligations by at least two nationally recognized statistical rating
organizations ("rating agencies") (or one if only one has rated the
obligation).

(3) An unrated obligation judged by BMC, pursuant to guidelines established by
the board of trustees, to be of comparable quality.

The Fund intends to buy only obligations which are designated as first-tier
securities as defined by the SEC; that is, securities with the highest rating.

The acquisition of securities that are unrated or rated by only one rating
agency must be approved or ratified by the board of trustees.

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[information in right margin of page]
The Fund intends to buy only obligations which are designated as first-tier
securities as defined by the SEC.
- -------------------

- -------------------
[information in left margin of page]
Typically, 25% or more of the Fund's total assets are invested in obligations of
issuers in the financial services industry.

As a money market fund seeking to maintain a $1.00 share price, the Fund is
unlikely to generate as much income as a bond fund with less stringent quality
or maturity policies.

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

DIVERSIFICATION

In order to reduce investment risks, BMC is required by law to diversify the
Fund's investment portfolio. As a general rule, BMC may not invest more than 5%
of the Fund's total assets in securities issued by a single institution. In
addition, the Fund must also limit its investments in securities subject to puts
of a single institution.

This policy does not apply to U.S. government securities, in which the Fund may
invest without limitation. See the Statement of Additional Information for a
more detailed description.

INDUSTRY CONCENTRATION

Under normal market conditions, 25% or more of the Fund's total assets are
invested in obligations of issuers in the financial services industry. This
industry concentration reflects that of the markets in which the Fund invests.
More than half of the markets` commercial paper is issued by companies or
organizations in the financial services industry.

For temporary defensive purposes, less than 25% of the Fund's total assets may
be invested in obligations of issuers in the financial services industry. BMC
will not invest more than 25% of the Fund's total assets in any other industry.

INVESTMENT CONSIDERATIONS

The Fund may be appropriate for investors who seek to (i) earn income at current
money market rates while preserving their investments; (ii) use the Fund as part
of a long-term, balanced investment portfolio consisting of money market
instruments, bonds, and stocks; or (iii) use the Fund to place investment monies
as part of a dollar-cost averaging investment program.

Because the Fund emphasizes stability, it will not generate as much income as a
bond fund. No single fund constitutes a balanced investment plan.

RISKS OF INVESTING IN U.S. DOLLAR-DENOMINATED
FOREIGN SECURITIES

The Fund invests exclusively in U.S. dollar-denominated instruments, some of
which may be issued by foreign entities as described in the table on page 6.
Consequently, the Fund may be subject to risks different than those incurred by
a fund that invests only in debt obligations of domestic issuers.

Currently, the only securities held outside the United States in which the Fund
expects to invest are EuroCDs, which are held in England. As a result, the
Fund's exposure to these foreign investment risks is expected to be lower than
Funds which invest more broadly in securities held outside the United States.
Regulatory limits specified in the section entitled "Quality and Maturity
Criteria" on page 7 apply equally to securities of foreign and domestic issuers.

ABOUT MONEY MARKET INSTRUMENTS

Corporations and governments address their short-term borrowing and cash-flow
management needs in a highly liquid, worldwide financial market called the
"money market." The following is a brief description of the types of money
market instruments the Fund may buy.

CORPORATE OBLIGATIONS

COMMERCIAL PAPER is issued by large corporations to raise cash. The maximum
maturity for commercial paper is 270 days, although most commercial paper is
issued with maturities of 60 days or less. Commercial paper is offered at a
discount with its full face value paid at maturity.

Although commercial paper rates generally fluctuate with the value of the London
Interbank Offered Rate (LIBOR), Treasury bills, bankers' acceptances, and
certificates of deposit, they are also influenced by (i) the issuer's size and
credit rating and (ii) the commercial paper maturity date.

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[information in right margin of page]
The Fund may be subject to risks different than those incurred by a fund that
invests only in debt obligations of domestic issuers.

Commercial paper is short-term debt issued by large corporations to raise cash.
- -------------------

Smaller or lower-rated corporations may tap the commercial paper market through
ASSET-BACKED COMMERCIAL PAPER PROGRAMS. In a typical program, a special purpose
corporation (a "SPC"), created and/or serviced by a bank, uses the proceeds from
an issuance of commercial paper to purchase receivables from one or more
corporations (sellers). The sellers transfer their interest in the cash flow
from the receivables to the SPC, and this cash is used to pay interest and repay
principal on the commercial paper. Letters of credit may be available to cover
the risk that the cash flow from the receivables will not be sufficient to cover
the maturing commercial paper.

The Fund may purchase CORPORATE NOTES AND BONDS with remaining maturities of 13
months or less in the secondary market provided that each of these securities
has characteristics consistent with regulatory requirements for money market
funds.

BANK OBLIGATIONS

NEGOTIABLE CERTIFICATES OF DEPOSIT ("CD"s) evidence a bank's obligation to repay
money deposited with it for a specified period of time. The table below
identifies the types of CDs the Fund may buy.

================================================================================
CD TYPE ISSUER
- --------------------------------------------------------------------------------
Domestic Domestic offices of U.S. banks

Yankee U.S. branches of foreign banks

Eurodollar Issued in London by U.S., Canadian, European, and Japanese
banks

Schedule B Canadian subsidiaries of non-Canadian banks

BANKERS' ACCEPTANCES are used to finance foreign commercial trade. Issued by a
bank with an importer's name on them, these instruments allow the importer to
back up its own pledge to pay for imported goods with a bank's obligation to
cover the transaction if the importer fails to do so.

BANK NOTES are senior unsecured promissory notes issued in the U.S. by domestic
commercial banks.

The bank obligations the Fund may buy generally are not insured by the FDIC or
any other insurer.

GOVERNMENT OBLIGATIONS

U.S. TREASURY SECURITIES differ from one another in their interest rates,
maturities, and issuance and interest payment schedules. Treasury bills have
initial maturities of one year or less; Treasury notes, two to ten years; and
Treasury bonds, more than ten years.

A number of U.S. government agencies and government-sponsored organizations
issue debt securities. These agencies generally are created by Congress to
fulfill a specific need, such as providing credit for home buyers or farmers.
Among these agencies are the Federal Home Loan Banks, the Federal Farm Credit
System, the Student Loan Marketing Association, and the Resolution Funding
Corporation.

Some obligations issued or guaranteed by U.S. government agencies or
instrumentalities are supported by the full faith and credit of the U.S.
government; others are supported by the right of the issuer to borrow from the
Treasury; others are supported by the U.S. government's discretionary authority
to purchase certain obligations of the agency or instrumentality, and others are
supported only by the credit of the issuing agency or instrumentality.

SUPRANATIONAL ORGANIZATIONS (generally, multilateral lending institutions, or
"MLI"s) are created by governments to promote economic reconstruction and
development. An MLI's creditworthiness is based not only on its own financial
performance, but on the willingness and ability of member governments to support
its lending activities.

While maintaining strict financial controls to ensure liquidity and strong
creditworthiness, MLIs finance their operations in the same manner as any other
financial institution, with a combination of short- and long-term debt
obligations. Short-term debt is usually issued in the form of short-term
discount notes and commercial paper.

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[information in left margin of page]
A portion of the Fund's assets may be invested in money market instruments that
are subject to restrictions on resale.
- -------------------

VARIABLE- AND FLOATING-RATE INSTRUMENTS

Variable- and floating-rate instruments are issued by corporations, financial
institutions, and government agencies and instrumentalities.

Floating-rate instruments have interest rates that change whenever there is a
change in a designated base rate, whereas variable-rate instruments provide for
specified periodic interest rate adjustments. The interest rate on variable- and
floating-rate instruments is ordinarily determined by reference to (or is a
percentage of) an objective standard, such as the Federal Funds effective rate,
the 90-day U.S. Treasury bill rate, or LIBOR.

Although the Fund typically limits its investments to securities with remaining
maturities of 13 months or less, it may invest in variable- and floating-rate
instruments that have nominal (or stated) maturities in excess of 13 months,
provided that such instruments (i) have demand features consistent with
regulatory requirements for money market funds, or (ii) are securities issued by
the U.S. government or a U.S. government agency that meet certain regulatory
requirements for money market funds.

RESTRICTED AND ILLIQUID SECURITIES

The Fund may invest a portion of its assets in money market instruments that are
subject to restrictions on resale ("restricted securities"). Although restricted
securities are generally considered illiquid, certain restricted securities
("Rule 144A securities" or "Section 4(2) commercial paper," for example) may be
deemed liquid pursuant to guidelines established by the board of trustees. No
more than 10% of the Fund's net assets may be invested in illiquid securities.

OTHER INVESTMENT POLICIES AND TECHNIQUES

REPURCHASE AGREEMENTS

The Fund may enter into repurchase agreements, collateralized by U.S. government
securities, with banks or broker-dealers that are deemed to present minimum
credit risk. A repurchase agreement involves the purchase of a security and a
simultaneous agreement to sell the security back to the seller at a higher
price. At the direction of the board of trustees, BMC has established procedures
to minimize potential losses due to credit risk. Delays or losses could result
if the other party to the agreement defaults or becomes bankrupt.

WHEN-ISSUED SECURITIES AND FORWARD-COMMITMENT AGREEMENTS

When-issued securities and forward-commitment agreements fix a security's price
and yield for future payment and delivery. The market value of a security may
change during this period, or a party to the agreement may fail to deliver or to
pay for the security. Either of these situations could adversely affect the
market value of the Fund's assets. As an operating policy, the Fund will not
commit more than 30% of its total assets to these agreements.

BORROWING

The Fund may borrow money only for temporary or emergency purposes. Borrowings
are not expected to exceed 5% of the Fund's total assets.

OTHER INVESTMENT MANAGEMENT TECHNIQUES

BMC may buy other types of securities or employ other portfolio management
techniques on behalf of the Fund, including reverse repurchase agreements. When
required by SEC guidelines, the Fund will set aside cash or appropriate liquid
assets in a segregated account to cover its portfolio obligations. See the
Statement of Additional Information for a more detailed discussion of the Fund's
investments and some of the risks associated with them.

- -------------------
[information in left margin of page]
Performance data and a discussion of factors that affected performance during
the Fund's most recent reporting period are included in the Fund's annual and
semiannual reports to shareholders.
- -------------------

PERFORMANCE

Mutual fund performance is commonly expressed in terms of historical yield or
total return and may be quoted in advertising and sales literature. Past
performance is no guarantee of future results.

YIELD is calculated based on the income the Fund earned on its investments over
a seven-day period and is expressed as an annual percentage rate. The Fund's
yield is calculated according to methods that are standardized for all money
market funds. EFFECTIVE YIELD is calculated similarly, although this figure will
be slightly higher than the Fund's yield because it assumes that income earned
from the Fund's investments is reinvested.

TOTAL RETURN represents the Fund's change over a specified time period, assuming
reinvestment of dividends and capital gains, if any. CUMULATIVE TOTAL RETURN
illustrates the Fund's actual performance over a stated period of time. AVERAGE
ANNUAL TOTAL RETURN is a hypothetical rate of return that illustrates the
annually compounded return that would have produced the same cumulative total
return if the Fund's performance had been constant over the entire period.
Average annual total returns smooth out variations in the Fund's performance;
they are not the same as year-by-year results.

Performance data and a discussion of factors that affected performance during
the Fund's most recent reporting period are included in the Fund's annual and
semiannual reports to shareholders. These reports are routinely delivered to the
Fund's shareholders. For a free copy, call one of the Fund Information numbers
on page 2.

SHARE PRICE

The price of your shares is the net asset value (the "NAV") for the Fund next
determined after receipt of your instruction to purchase, convert or redeem. The
NAV is determined by calculating the total value of a Fund's assets, deducting
total liabilities and dividing the result by the number of shares outstanding on
each day that the New York Stock Exchange (the "Exchange") is open at the close
of the Exchange (usually 1:00 p.m. Pacific Time).

Investments and requests to redeem shares will receive the share price next
determined after receipt by Benham of the investment or redemption request. For
example, investments and requests to redeem shares received by Benham before the
close of business of the Exchange are effective on, and will receive the price
determined on that day as of the close of the Exchange. Investment and
redemption requests received thereafter are effective on, and receive the price
determined as of the close of the Exchange on the next day the Exchange is open.

Investments are considered received only when your check or wired funds are
received by Benham. Wired funds are considered received on the day they are
deposited in Benham's bank account if they are deposited before the close of
business on the Exchange, usually 1:00 p.m. Pacific Time.

Investment and transaction instructions received by Benham on any business day
by mail prior to the close of business on the Exchange, usually 1:00 p.m.
Pacific Time, will receive that day's price. Investments and instructions
received after that time will receive the price determined on the next business
day.

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[information in right margin of page]
Shares may be purchased and redeemed without any charge, commission, redemption
fee, 12b-1 fee, or contingent deferred sales load.
- -------------------

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[information in left margin of page]
Overnight and special delivery mail (e.g., Federal Express, Express Mail,
Priority Mail) should be sent to our street address: 1665 Charleston Rd.
Mountain View, California 94043. Failure to do so may result in transaction
delays.
- -------------------

HOW TO INVEST

To open an account, you must complete and sign an application. If an application
is not enclosed with this Prospectus, you may request one by calling one of the
Fund Information numbers listed below. Separate forms are required to establish
Benham-Sponsored Retirement Plan accounts, as discussed on pages 26 and 27.

Your investment will be credited to your account at the next NAV calculated
after The Benham Group or an authorized subtransfer agent receives and accepts
your order. Payment of redemption proceeds may be delayed until we have your
completed application on file and your investment matures (i.e., clears). See
page 23 for details.

Benham Group Representatives are available at the telephone numbers listed below
weekdays from 5:00 a.m. to 5:00 p.m. Pacific Time. For your protection, Benham
records all telephone conversations with its telephone representatives.

FUND INFORMATION: for information about any Benham fund or other investment
product, call 1-800-331-8331 or 1-415-965-4274.

INVESTOR SERVICES: to open an account, to receive a Prospectus or Statement of
Additional Information for a Benham fund, or to inquire about or make
transactions in an existing account, call 1-800-321-8321 or 1-415-965-4222.

Benham shareholders may make transactions and obtain prices, yields, and total
return information for all Benham funds with TeleServ, our 24-hour automated
telephone information service. Dial 1-800-321-8321 and press 1.

HOW TO BUY SHARES (Retirement plan investors, see pages 26 and 27).

MAKE YOUR INVESTMENT CHECK PAYABLE TO THE BENHAM GROUP. Mail
the check with your completed application to:

The Benham Group
P.O. Box 7730
San Francisco, CA 94120-9853

FOR ADDITIONAL INVESTMENTS, enclose an investment slip
preprinted with the account number to which your investment
should be credited. If the payee information provided on the
check does not agree with the information preprinted on the
investment slip, we will follow the instructions preprinted
on the slip.

If you do not have a preprinted investment slip, send your
check with separate written instructions indicating the fund
name and the account number. If the payee information
provided on the check does not agree with the written
instructions, we will follow the written instructions.

You may also invest your check in person at a Benham Investor
Center. One is located at 1665 Charleston Road in Mountain
View, California; the other is located at 2000 South Colorado
Boulevard, Suite 1000, in
Denver, Colorado.

WE WILL NOT ACCEPT CASH INVESTMENTS OR THIRD-PARTY CHECKS. We
will, however, accept checks drawn on foreign banks or
foreign branches of domestic banks and checks that are not
drawn in U.S. dollars (U.S. $100 minimum). The cost of
collecting payment on such checks will be passed on to the
investor. These costs may be substantial, and settlement may
involve considerable delays.

Investors will be charged $5 for every investment check
returned unpaid.

If you wish to open an account by bank wire, please call our
Investor Services Department for more information and an
account number. Bank wire investments should be addressed as
follows:

State Street Bank and Trust Company
Boston, Massachusetts
ABA Routing Number 011000028
Beneficiary = Benham Prime Money Market Fund
Fund Account Number 0505 893 8
FBO [Your Name, Your Benham Fund Account Number]

- --------------------------------------------------------------------------------
BY EXCHANGE Minimum initial investment: $1,000
Minimum additional investment: $100

You may exchange your shares for shares of any other Benham
fund registered for sale in your state if you have received
and read the fund's prospectus. Exchanges may be made by
telephone (for identically registered accounts only), by
written request, or in person. Certain restrictions apply;
please see "Telephone Transactions" on page 19 and "Exchange
Privilege" on page 20 for details. You may open a new account
by telephone exchange, provided that you meet the minimum
initial investment requirement.

- --------------------------------------------------------------------------------
AUTOMATIC Minimum: $25
INVESTMENT
SERVICES These services are offered with respect to additional
investments only. See details on page 21.

PROCESSING YOUR PURCHASE

Shares will be purchased at the next NAV calculated after your investment is
received and accepted by The Benham Group or an authorized subtransfer agent. An
investment received and accepted before the close of business of the Exchange,
normally 1:00 p.m. Pacific Time will be included in your account balance the
same day. If the investment is received after the close of business of the
Exchange, usually 1:00 p.m. Pacific Time, it will be credited to your account
the following business day. The Fund reserves the right to refuse any
investment.

TELEPHONE TRANSACTIONS

Shareholders may order certain transactions (e.g., exchanges, wires, some types
of redemptions) by telephone. This privilege is granted to Benham fund
shareholders automatically; you need not specifically request this service, and
you may not specifically decline it. ONCE YOUR TELEPHONE ORDER HAS BEEN PLACED,
IT MAY NOT BE MODIFIED OR CANCELLED.

The Benham Group will not be liable for losses resulting from unauthorized or
fraudulent instructions if it follows procedures designed to verify the caller's
identity. BMC will request personal identification, record telephone calls, and
send confirmation statements for every telephone transaction to the
shareholder's record address. The Fund reserves the right to revise or terminate
telephone transaction privileges at any time.

CONFIRMATION AND QUARTERLY STATEMENTS

All transactions are summarized on quarterly account statements. In addition,
for every transaction that you request, a confirmation statement will be mailed
to your record address. Please review these statements carefully. If you believe
we have processed the transaction you requested incorrectly, please notify us as
soon as possible. If you fail to notify us of an error with reasonable
promptness, i.e., within 30 days of the date of your confirmation statement, we
will deem you to have ratified the transaction.

- -------------------
[information in left margin of page]
The free exchange privilege is a convenient way to buy shares in other Benham
funds when your investment goals change.

Benham Open Orders allow investors to utilize a "buy low, sell high" investment
strategy.
- -------------------

ACCOUNT SERVICES

EXCHANGE PRIVILEGE

You may exchange your shares for shares of equivalent value in any other Benham
fund registered for sale in your state. Such an exchange may generate a taxable
gain or loss. An exchange request will be processed the same day if it is
received before the funds` NAVs are calculated, which is one hour prior to the
close of the Exchange, usually 12:00 p.m. Pacific Time for Benham Target
Maturities Trust; and at the close of the Exchange, usually 1:00 p.m. Pacific
Time for all other Benham funds.

The Benham Group discourages trading in response to short-term market
fluctuations. Such activity may encumber BMC's ability to invest the funds'
assets in accordance with their respective investment objectives and policies
and may be disadvantageous to other shareholders. More than six exchanges per
calendar year out of a variable-price fund may be deemed an abuse of the
exchange privilege. For purposes of determining the number of exchanges made,
accounts under common ownership or control will be aggregated.

Each Benham fund reserves the right to modify or revoke the exchange privilege
of any shareholder or to limit or reject any exchange. Although each fund will
attempt to give shareholders prior notice whenever it is reasonably able to do
so, it may impose these restrictions at any time.

OPEN ORDER SERVICE

The Benham Group's Open Order Service allows you to designate a price at which
to buy or sell shares of a variable-price fund by exchange from or to a money
market fund. To place a "buy" order, you designate a purchase price that is
equal to or lower than the current NAV. To place a "sell" order, designate a
sale price that is equal to or higher than the current NAV. If the designated
price is met within 90 calendar days, we will automatically execute your order
at the NAV calculated that day as of the close of the Exchange. If the
designated price is not met within 90 calendar days, your Open Order to buy or
sell shares automatically expires. If you are buying shares of a variable-price
fund, we will exchange money from your money market account to purchase them. If
you are

selling shares of a variable-price fund, we will transfer the proceeds of that
sale to your money market account. If you do not have a money market account, we
will open one for you when we execute your Open Order.

If the fund you have selected deducts a distribution from its share price, your
order price will be adjusted accordingly so that the distribution does not
inadvertently trigger an Open Order transaction on your behalf. If you close or
reregister the account from which shares are to be redeemed, your Open Order
will be canceled. Because of their time-sensitive nature, Open Order
transactions may be made only by telephone or in person and are subject to the
exchange limitations described in each fund's prospectus. All orders and
cancellations received by one hour prior to the close of the Exchange, usually
12:00 p.m. Pacific Time, will be considered to be effective the same day. All
orders and cancellation of orders not received one hour prior to the close of
the Exchange, usually 12:00 p.m. Pacific Time, will be considered effective the
following business day.

AUTOMATIC INVESTMENT SERVICES (AIS)

TREASURY DIRECT allows you to deposit interest and principal payments from
Treasury securities directly into a Benham fund account.

PAYROLL DIRECT allows you to deposit any amount of your paycheck directly into a
Benham fund account.

GOVERNMENT DIRECT allows you to deposit your entire U.S. government payment
directly into a Benham fund account.

BANK DIRECT allows you to deposit a fixed amount from your bank account directly
into a Benham fund account on the 1st and/or the 15th of each month (or the next
business day).

DIRECTED DIVIDENDS allow you to invest all or part of your dividend earnings
from one Benham fund account in one or more other Benham fund accounts. You may
choose to receive a portion of your dividends in cash and to invest the
remainder in another Benham fund account.

SYSTEMATIC EXCHANGES allow you to arrange for exchanges from one Benham fund
account to another Benham fund account on the 1st and/or the 15th of each month
(or the next business day).

- -------------------
[information in right margin of page]
Automatic Investment Services enable you to benefit from a dollar-cost averaging
investment strategy.
- -------------------

For more information about any of these services, please call our Investor
Services Department at 1-800-321-8321 or 1-415-965-4222.

BROKER-DEALER TRANSACTIONS

The Benham Group charges no sales commissions, or "loads," of any kind. However,
investors who do not choose to purchase shares directly from BFS may purchase
and sell Fund shares through registered broker-dealers and other qualified
service providers, who may charge investors fees for their services. These
broker-dealers and service providers generally provide shareholder,
administrative and/or accounting services which would otherwise be provided by
BFS as the Fund's transfer agent. To accommodate these investors, BMC and its
affiliates have entered into agreements with some broker-dealers and service
providers to provide these aforementioned services. Fees for such services are
borne normally by the Fund at the rates normally paid to BFS, which would
otherwise provide the services. Any distribution expenses associated with these
arrangements are borne by BMC.

TDD SERVICE FOR THE HEARING IMPAIRED

TDD users may contact The Benham Group at 1-800-624-6338 or 1-415-965-4764.
California residents may wish to contact us through the California Relay Service
(CRS) at 1-800-735-2929. Your transaction requests via CRS will be handled on a
recorded line. The Benham Group cannot accept responsibility for instructions
miscommunicated by CRS.

EMERGENCY SERVICES

The Benham Group has established an alternate operations site from which we can
access customer accounts and the mainframe computers used by the Benham funds in
the event of an emergency. Telephone lines and terminals are currently in place.
If our regular service is interrupted, the following numbers will automatically
connect you to this site.

From within the U.S., including Alaska and Hawaii, call 1-800-321-8321.

From all foreign countries, call collect, 1-303-759-9337 or 1-510-820-1409. The
operator will request your Benham fund account number before accepting the call.

HOW TO REDEEM YOUR INVESTMENT

When you place an order to redeem shares, your shares will be redeemed at the
next NAV calculated after The Benham Group or an authorized subtransfer agent
has received and accepted your redemption request. The Fund's NAV is calculated
at the close of business of the Exchange, usually 1:00 p.m. Pacific Time. See
page 15 for details.

Barring extraordinary circumstances prescribed by law, redemption proceeds are
mailed within seven calendar days. However, The Benham Group reserves the right
to withhold the proceeds until the investment has matured (i.e., your payment
has cleared); see maturity periods below.

- --------------------------------------------------------------------------------
DRAWN FROM A MATURITY PERIOD
TYPE OF INVESTMENT CALIFORNIA BANK? (IN BUSINESS DAYS)
- --------------------------------------------------------------------------------
Checks, cashiers checks,
and bank money orders Yes 5 days
- --------------------------------------------------------------------------------
Same as above No 8 days
- --------------------------------------------------------------------------------
U.S. Treasury checks,
Traveler's checks,
U.S. Postal money orders,
Benham checks, bank wires,
and AIS Deposits* N/A 1 day
- --------------------------------------------------------------------------------
*Does not include bank direct deposits, which take 8 business days to mature.

If you hold shares in certificate form, redemption requests must be accompanied
by properly endorsed certificates.

If you want to keep your account open, please maintain a balance of shares worth
at least $1,000. If your account balance falls below $1,000 due to redemption,
your account may be closed, but not without at least 30 days' notice and an
opportunity to increase your account balance to the $1,000 minimum. Your shares
will be redeemed at the NAV calculated on the day your account is closed.
Proceeds will be mailed to the record address.

This policy applies to Benham's Individual Retirement Accounts (IRAs), excluding
SEP-IRAs, except that shareholders will receive at least 120 days' written
notice and an opportunity to increase their account balance before their
accounts are closed. Investors wishing to open a Benham-Sponsored Retirement
Plan account should see pages 26 and 27 for details.

UNCASHED CHECKS. We may reinvest at the Fund's then-current NAV any distribution
or redemption check that remains uncashed for six months. Until we receive
instructions to the contrary, subsequent distributions will be reinvested in the
original account. Uncashed redemption checks may be reinvested in an identically
registered account, if the original account is closed.

HOW TO REDEEM SHARES (Retirement investors, see pages 26 and 27.)

================================================================================
METHOD INSTRUCTIONS
- --------------------------------------------------------------------------------

BY TELEPHONE The Benham Group will accept telephone redemption requests
for any amount if the proceeds are to be sent to your
predesignated bank account. Redemptions of $25,000 or less
payable to the registered account owner(s) may also be
ordered by telephone. All other redemption requests must be
made in writing. ONCE YOUR TELEPHONE ORDER HAS BEEN PLACED,
IT MAY NOT BE MODIFIED OR CANCELLED.

- --------------------------------------------------------------------------------
IN WRITING Send a letter of instruction to:

The Benham Group
Investor Services Department
1665 Charleston Road
Mountain View, California 94043

Your letter of instruction should specify:

* Your name
* Your account number
* The name of the Fund from which you wish to redeem shares
* The dollar amount or number of shares you wish to redeem.

For your protection, written redemption requests must be
accompanied by signature guarantees under the following
circumstances:

* Redemption proceeds go to a party other than the registered
account owner(s)

* Redemption proceeds go to an account other than your
predesignated bank account

* Redemption proceeds go to the registered account owner(s),
but the amount exceeds $25,000.

If you have instructed The Benham Group to require more
than one signature on written redemption requests, each of
the required number of signers must have his or her signature
guaranteed on written redemption requests. Signature
guarantees may be provided by banks, savings and loan
associations, savings banks, credit unions, stock brokerage

================================================================================
METHOD INSTRUCTIONS
- --------------------------------------------------------------------------------
IN WRITING firms, or a Benham Investor Center. Shareholders must
(continued) appear in person with identification to obtain a signature
guarantee. Notary public certifications are not accepted in
lieu of signature guarantees.

BFS may require written consent of all account owners prior
to acting on the written instructions of any account owner.

- --------------------------------------------------------------------------------
BY CHECK Investors automatically receive a free book of checks upon
opening an account in the Fund. Checks may be drawn to the
order of any payee in any amount of $100 or more. There is no
charge for additional checks, and there are no per-check
fees.

Each check must bear the number of signatures required to act
on the account (as you specify on your account application).
Check redemptions will be charged against your account as of
the date the check is received by First Interstate Bank of
California, the collecting bank.

The check-writing option may be terminated or modified by the
board of trustees. Checks may not be used to close an
account.

- --------------------------------------------------------------------------------
BY BANK WIRE If you included bank wire information on your account
application or made subsequent arrangements to accommodate
bank wire redemptions, you may wire funds to your bank by
calling 1-800-321-8321 or 1-415-965-4222. The minimum amount
for a bank wire redemption is $1,000. Allow at least two
business days for redemption proceeds to be credited to your
bank account.

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

BY EXCHANGE See details on pages 18 and 20.

- --------------------------------------------------------------------------------
AUTOMATIC DIRECTED PAYMENTS. You may arrange for periodic redemptions
REDEMPTION from your Benham fund account to your bank account or to
SERVICES another designated payee.

SYSTEMATIC EXCHANGES. You may arrange for periodic exchange
redemptions from one Benham fund account to another Benham
fund account.

ABOUT BENHAM-SPONSORED RETIREMENT PLANS

Retirement plans offer investors a number of benefits, including the chance to
reduce current taxable income and to take advantage of tax-deferred compounding.
Retirement plan accounts require a special application; please let our Investor
Services Department know if you want to establish this type of account. We
suggest that you consult your tax advisor before establishing a retirement plan
account. The minimum account balance for all Benham Individual Retirement
Accounts (IRAs), excluding SEP-IRAs, is $1,000. If your balance falls below the
$1,000 per fund account minimum, (continued on next page)

================================================================================
PLAN TYPE AVAILABLE TO MAXIMUM ANNUAL CONTRIBUTION
PER PARTICIPANT
- --------------------------------------------------------------------------------
Contributory An employed indi- $2,000 or 100% of compensation
IRA vidual under age 70 1/2. (whichever is less).

- --------------------------------------------------------------------------------
Spousal IRA A nonworking spouse $2,250 (can be split between
(under age 70 1/2) of a Spousal and Contributory IRAs,
wage earner. provided that no IRA receives
more than a total of $2,000).

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

Rollover IRA An individual with a None, as long as total amount is
distribution from an eligible.
employer's retirement
plan or a rollover IRA.

- --------------------------------------------------------------------------------
SEP-IRA A self-employed indi- $22,500 or 15% of compensation
vidual or a business. (whichever is less).*

- --------------------------------------------------------------------------------
Money Same as for SEP-IRA. $30,000 or 25% of compensation
Purchase Plan (whichever is less). Annual
(Keogh) contribution is mandatory.*

- --------------------------------------------------------------------------------
Profit Same as for SEP-IRA. $22,500 or 15% of compensation
Sharing Plan (whichever is less). Annual
(Keogh) contribution is optional.*
- --------------------------------------------------------------------------------

* Self-employed individuals should consult IRS Publication 560 for their annual
contribution limits.

your account may be closed (see page 23 for
details). This distribution may result in a taxable event and a possible penalty
for early withdrawal. The minimum fund account balance for all other
Benham-Sponsored Retirement Plan accounts is $100. Benham charges no fees for
its IRAs but does charge low maintenance fees for its Keoghs.

YOU MUST COMPLETE SPECIFIC FORMS TO TAKE DISTRIBUTIONS (I.E., REDEEM SHARES)
FROM A BENHAM-SPONSORED RETIREMENT PLAN ACCOUNT. PLEASE CALL OUR INVESTOR
SERVICES DEPARTMENT AT 1-800-321-8321 FOR ASSISTANCE.

================================================================================
DEADLINE FOR
OPENING ACCOUNT CONTRIBUTION DEADLINES
- --------------------------------------------------------------------------------
You may open an account anytime, Annual contributions can be made but the
deadline for establishing from January 1 through April 15 of
and funding an IRA for the prior the following tax year up to the
tax year is April 15. year you turn age 70 1/2.

- --------------------------------------------------------------------------------
Same as for Contributory IRA. Same as for Contributory IRA.

- --------------------------------------------------------------------------------
You may open a Rollover IRA Eligible rollover contributions must
at anytime. be made within 60 days of receiving
your distribution. There is no
age limit on rollover contributions.

- --------------------------------------------------------------------------------
You may open an account anytime, Must be made by employer's tax
but the deadline for establishing and filing deadline (including
funding an account for the prior tax extensions).
year is the employer's tax deadline
(including extensions).

- --------------------------------------------------------------------------------
The end of the employer's plan Same as for SEP-IRA.
year, usually December 31.

- --------------------------------------------------------------------------------
For all Benham-Sponsored Retirement Plans, you may begin taking distributions at
age 59 1/2. You must begin to take required distributions by April 1 of the year
after you turn age 70 1/2. You may take distributions from your IRA or SEP-IRA
before you reach age 59 1/2; however, a penalty may apply.

- -------------------
[information in left margin of page]
Each January, you will be informed of the tax status of dividends from the
previous year.
- -------------------

DISTRIBUTIONS AND TAXES

DIVIDENDS. Dividends are declared and credited (i.e., available for redemption)
daily and distributed as of the last business day of the month.

DISTRIBUTION OPTIONS. You may choose to receive dividends in cash or to reinvest
them in additional shares. (See "Directed Dividends" on page 21 for further
information.) Please indicate your choice on your account application or contact
our Investor Services Department. See page 23 for a description of our policy
regarding uncashed distribution checks.

TAXES. The Fund intends to qualify annually and elect to be treated as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986 as amended, (the "Code"), by distributing all or substantially all of its
net investment income and net realized capital gains to shareholders each year.

The Fund's dividends and capital gain distributions are subject to federal
income tax and applicable state and local taxes whether they are received in
cash or reinvested. Distributions are generally taxable in the year they are
declared.

Dividends from net investment income (including net short-term capital gains, if
any) are taxable as ordinary income. Distributions of any net capital gains (the
excess of net long-term capital gains over net short-term capital losses), if
any, designated by the Fund as capital gain dividends are taxable as long-term
capital gains, regardless of how long you have held your shares. Distributions
will not qualify for the dividends received deduction available to corporations.

If you are subject to IRS information reporting requirements, the Fund will send
you a tax statement (Form 1099) by January 31 showing the tax status of
distributions you received in the previous year and will file a copy with the
IRS. Assuming the Fund is able to maintain its NAV at $1.00, you generally will
not realize a taxable gain or loss when you redeem (sell) or exchange shares.

BACKUP WITHHOLDING. The Fund is required by federal law to withhold 31% of
reportable dividends, capital gain distributions, or redemptions payable to
shareholders who have not complied with IRS regulations. These regulations
require you to certify on your account application or on IRS Form W-9 that your
social security or taxpayer identification number ("TIN") is correct and that
you are not subject to backup withholding from previous underreporting to the
IRS, or that you are exempt from backup withholding. Any amounts withheld may be
credited against the shareholder's federal income tax liabilities.

The Benham Group may refuse to sell shares to investors who have not complied
with this requirement, either before or at the time of purchase. Until we
receive your certified TIN, we may redeem your shares in the Fund at any time.

MANAGEMENT INFORMATION

ABOUT BENHAM INVESTMENT TRUST

Benham Investment Trust (the "Trust") is a registered open-end management
investment company that was organized as a Massachusetts business trust on June
16, 1993. Benham Prime Money Market Fund is currently the sole series of the
Trust. Additional series may be created from time to time.

A board of trustees oversees the Fund's activities and is responsible for
protecting shareholders' interests. The majority of the trustees are not
otherwise affiliated with BMC. The Trust is neither required nor expected to
hold annual meetings, although special meetings may be called for purposes such
as electing or removing trustees or amending the Fund's advisory agreement or
investment policies. The number of votes you are entitled to is based upon the
dollar value of your investment. Each Fund votes separately on matters that
pertain to it exclusively. Voting rights are not cumulative.

- -------------------
[information in right margin of page]
The Benham Group serves more than 475,000 investors.
- -------------------

- -------------------
[information in left margin of page]
Benham Management Corporation provides investment advice and portfolio
management services to the Fund.
- -------------------

THE BENHAM GROUP

BMC is investment advisor to the funds in The Benham Group and manages more than
$12 billion in assets. BMC, incorporated in California in 1971, became a wholly
owned subsidiary of Twentieth Century Companies, Inc. (TCC), a Delaware
corporation, on June 1, 1995, upon the merger of Benham Management
International, Inc., BMC's former parent, into TCC. TCC is a holding company
that owns the operating companies that provide the investment management,
transfer agency, shareholder service, and other services for the Twentieth
Century family of funds, which now includes the Benham Group. The combined
company offers 65 mutual funds and, as of April 1, 1996, has combined assets
under management in excess of $48 billion.

BMC supervises and manages the investment portfolios of The Benham Group and
directs the purchase and sale of its investment securities. BMC utilizes teams
of portfolio managers, assistant portfolio managers, and analysts to manage the
assets of the funds. The teams meet regularly to review portfolio holdings and
to discuss purchase and sale activity. The teams adjust holdings in the funds'
portfolios when deemed appropriate in pursuit of the funds' investment
objectives. Individual portfolio managers may also adjust portfolio holdings of
the funds as necessary between team meetings.

The portfolio manager team members managing the Fund described in this
prospectus and their work experience for the last five years is as follows:

AMY O'DONNELL is a Portfolio Manager for BMC. She has been primarily responsible
for the day-to-day operation of the Fund since its inception in November of
1993. Ms. O'Donnell joined Benham in 1987, and was promoted to her present
position as a portfolio manager in 1992. She has a B.S. in business
administration and an M.B.A. in Finance from California State University,
Hayward.

ROBERT V. GAHAGAN oversees the portfolio manager's operation of the Fund. He is
a Vice President and Portfolio Manager with Investors Research Corporation
(IRC), the investment advisor to the Twentieth Century funds. Mr. Gahagan has a
B.A. and M.B.A. from the

University of Missouri in Kansas City and has over 12 years of investment
experience. He joined IRC in 1983 and manages the following Twentieth Century
funds in Mountain View, California, the fixed income headquarters for the new
combined Twentieth Century/ Benham company: Cash Reserve, Premium Capital
Reserve, U.S. Government Reserve, U.S. Government Short-Term and U.S. Government
Intermediate-Term.

ADVISORY AND SERVICE FEES

For investment advice and portfolio management services, the Fund pays BMC a
monthly investment advisory fee equal to its pro rata share of the dollar amount
derived from applying the Trust's average daily net assets to an investment
advisory fee schedule. The investment advisory fee rate cannot exceed .50% of
average daily net assets and it drops to a marginal rate of .19% of average
daily net assets as Trust assets increase. Currently, however, the Fund is the
sole series of the Trust. As a result, the fee rate is effectively applied to
the fund's average daily net assets.

Investment advisory fees paid by the Fund to BMC for the fiscal year ended
February 29, 1996, were equal to .17% as a percentage of the Fund's average
daily net assets or $1.70 as a dollar amount per $1,000 of the Fund's average
daily net assets. These figures are net of expense limitations.

To avoid duplicative investment advisory fees, the Fund does not pay BMC
investment advisory fees with respect to assets invested in shares of other
funds advised by BMC.

BFS, a wholly owned subsidiary of TCC, is the Trust's agent for transfer and
administrative services. For administrative services, the Fund pays BFS a
monthly fee equal to its pro rata share of the dollar amount derived from
applying the average daily net assets of all of the funds in The Benham Group to
an administrative fee schedule. The administrative fee rate ranges from .11% to
.08% of average daily net assets, dropping as Benham Group assets increase. For
transfer agent services, the Fund pays BFS a monthly fee for each shareholder
account maintained and for each shareholder transaction executed during that
month.

- -------------------
[information in right margin of page]
Benham Financial Services, Inc. provides administrative and transfer agent
services to the Fund.
- -------------------

The Fund pays certain operating expenses directly, including, but not limited
to, custodian, audit, and legal fees; fees of the independent trustees; costs of
printing and mailing prospectuses, statements of additional information, proxy
statements, notices, and reports to shareholders; insurance expenses; and costs
of registering the Fund's shares for sale under federal and state securities
laws. See the Statement of Additional Information for a more detailed discussion
of independent trustee compensation.

EXPENSE LIMITATION AGREEMENT

The expense limitation agreement between BMC and the Fund is described on page
3.

The Fund's total operating expenses for the fiscal year ended February 29, 1996,
were equal to .48%, as a percentage of the Fund`s average daily net assets or
$4.80 as a dollar amount per $1,000 of the Fund`s average daily net assets.
These figures are net of expense limitations.

In compliance with rules set forth by the SEC, the total operating expenses
described above and on page 3 include amounts paid by third parties under
expense offset arrangements with the Fund.

DISTRIBUTION OF SHARES

Benham Distributors, Inc. (BDI) and BMC distribute and market Benham products
and services. BMC pays all expenses for promoting sales of and distributing the
Fund's shares. The Fund does not pay commissions to, or receive compensation
from, broker-dealers.

BDI is a wholly owned subsidiary of TCC.

INVESTMENT ADVISOR

BENHAM MANAGEMENT CORPORATION
1665 Charleston Road
Mountain View, California 94043

DISTRIBUTOR

BENHAM DISTRIBUTORS, INC.
1665 Charleston Road
Mountain View, California 94043

CUSTODIAN

STATE STREET BANK AND TRUST COMPANY
225 Franklin Street
Boston, Massachusetts 02101

TRANSFER AGENT

BENHAM FINANCIAL SERVICES, INC.
1665 Charleston Road
Mountain View, California 94043

INDEPENDENT AUDITORS

KPMG PEAT MARWICK LLP
3 Embarcadero Center
San Francisco, California 94111

TRUSTEES

James M. Benham
Albert A. Eisenstat
Ronald J. Gilson
Myron S. Scholes
Kenneth E. Scott
Ezra Solomon
Isaac Stein
James E. Stowers III
Jeanne D. Wohlers

THE BENHAM GROUP OF INVESTMENT COMPANIES

Capital Preservation Fund
Capital Preservation Fund II
Benham Government Agency Fund
Benham Prime Money Market Fund
Benham Short-Term Treasury and Agency Fund
Benham Treasury Note Fund
Benham Long-Term Treasury and Agency Fund
Benham Adjustable Rate Government Securities Fund
Benham GNMA Income Fund
Benham Target Maturities Trust
Benham California Tax-Free and Municipal Funds*
Benham National Tax-Free Money Market Fund
Benham National Tax-Free Intermediate-Term Fund
Benham National Tax-Free Long-Term Fund
Benham Florida Municipal Money Market Fund**
Benham Florida Municipal Intermediate-Term Fund**
Benham Arizona Municipal Intermediate-Term Fund***
Benham Global Gold Fund
Benham Income & Growth Fund
Benham Equity Growth Fund
Benham Utilities Income Fund
Benham Global Natural Resources Index Fund
Benham European Government Bond Fund
Benham Capital Manager Fund

* Available only to residents of California, Arizona, Colorado, Hawaii, Nevada,
New Mexico, Oregon, Texas, Utah, and Washington.

** Available only to residents of Florida, California, Georgia, Illinois,
Michigan, New Jersey, New York, and Pennsylvania.

***Available only to residents of Arizona, California, Colorado, Nevada, Oregon,
Washington, and Texas.

NOTES:

CONTENTS

Summary of Fund Expenses ............... 3
Financial Highlights ................... 4
How the Fund Works ..................... 6
Investment Considerations .............. 8
About Money Market Instruments ......... 9
Other Investment Policies and Techniques 13
Performance ............................ 14
Share Price ............................ 15
How to Invest .......................... 16
Account Services ....................... 20
Exchange Privilege .................. 20
Open Order Service .................. 20
Automatic Investment Services ....... 21
Broker-Dealer Transactions .......... 22
TDD Service ......................... 22
Emergency Services .................. 22
How to Redeem Your Investment .......... 23
About Benham-Sponsored Retirement Plans 26
Distributions and Taxes ................ 28
Management Information ................. 29
About Benham Investment Trust ....... 29
The Benham Group .................... 30
Advisory and Service Fees ........... 31
Expense Limitation Agreement ........ 32
Distribution of Shares .............. 32

L012
<PAGE>
BENHAM PRIME MONEY MARKET FUND

A SERIES OF BENHAM INVESTMENT TRUST

THE BENHAM GROUP(R)
1665 Charleston Road
Mountain View, California 94043

Investor Services 1-800-321-8321 or 1-415-965-4222
Fund Information: 1-800-331-8331 or 1-415-965-4274

STATEMENT OF ADDITIONAL INFORMATION

APRIL 24, 1996

This Statement is not a Prospectus but should be read in conjunction with the
Fund's current Prospectus dated April 24, 1996. The Fund's Annual Report for the
fiscal year ended February 29, 1996, is incorporated herein by reference. To
obtain a copy of the Prospectus or Annual Report, call or write The Benham
Group.

TABLE OF CONTENTS

PAGE

Investment Policies and Techniques 2
Investment Restrictions 8
Portfolio Transactions 11
Valuation of Portfolio Securities 11
Performance 12
Taxes 14
About Benham Investment Trust 14
Trustees and Officers 15
Investment Advisory Services 17
Administrative and Transfer Agent Services 18
Direct Fund Expenses 19
Expense Limitation Agreement 19
Additional Purchase and Redemption Information 20
Other Information 20

INVESTMENT POLICIES AND TECHNIQUES

The following paragraphs provide a more detailed discussion of the securities
and investment practices identified in the Prospectus. Unless otherwise noted,
the policies described in this Statement of Additional Information are not
fundamental and may be changed by the Fund's board of trustees.

PORTFOLIO DIVERSIFICATION

In order to reduce investment risks, Benham Management Corporation (BMC), the
Fund's investment advisor, is required by law to broadly diversify the Fund's
investment portfolio. As a general rule, BMC may not invest more than 5% of the
Fund's total assets in securities issued by, or subject to puts of, a single
institution. However, there are three exceptions to this policy, as follows:

(1) The Fund may invest without limitation in U.S. government securities.

(2) The Fund may invest more than 5% of its total assets in the first-tier
securities of a single issuer for up to three business days, provided that
it does so with respect to just one issuer at a time.

(3) This diversification policy does not apply to unconditional puts if no more
than 10% of the Fund's total assets are invested in securities issued or
guaranteed by the issuer of the unconditional put. (An unconditional put is
a put or demand feature that can be readily exercised in the event of a
default on the underlying obligation on no more than 30 days' notice.)

COMMERCIAL PAPER

Commercial paper ("CP") is issued by utility, financial, and industrial
companies and supranational organizations. Nationally recognized statistical
rating organizations ("rating agencies") assign ratings to CP issuers indicating
the agencies' assessment of credit risk. Investment grade CP ratings assigned by
four rating agencies are provided in the following table.

MOODY'S STANDARD FITCH
INVESTORS & POOR'S DUFF & INVESTORS
SERVICE, INC. CORPORATION PHELPS, INC. SERVICE, INC.

HIGHEST RATINGS PRIME-1 A-1/A-1+ D-1/D-1+ F-1/F-1+

Prime-2 A-2 D-2 F-2
Prime-3 A-3 D-3 F-3

If an obligation has been assigned different ratings by multiple rating
agencies, at least two rating agencies must have assigned their highest rating
as indicated above in order for BMC to determine that the obligation is eligible
for purchase by the Fund or if unrated, the obligation must be determined to be
of comparable quality by the advisor.

Some examples of CP and CP issuers are provided in the following paragraphs.

DOMESTIC CP is issued by U.S. industrial and finance companies, utility
companies, "thrifts," and bank holding companies. FOREIGN CP is issued by
non-U.S. industrial and finance companies and

financial institutions. Domestic and foreign corporate issuers occasionally have
the underlying support of a well-known, highly rated commercial bank or
insurance company. Bank support is provided in the form of a letter of credit (a
"LOC") or irrevocable revolving credit commitment (an "IRC"). Insurance support
is provided in the form of a surety bond.

BANK HOLDING COMPANY CP is issued by the holding companies of many well-known
domestic banks, including Citicorp, J.P. Morgan & Company Incorporated, and
First Union National Bank. Bank holding company CP may be issued by the parent
of a money center or regional bank.

THRIFT CP is issued by major federal or state-chartered savings and loan
associations and savings banks.

SCHEDULE B BANK CP is short-term, U.S. dollar-denominated CP issued by Canadian
subsidiaries of non-Canadian banks (Schedule B banks). Whether issued as
commercial paper, a certificate of deposit, or a promissory note, each
instrument issued by a Schedule B bank ranks equally with any other deposit
obligation. Paper issued by Schedule B banks provides an investor with the
comfort and reduced risk of a direct and unconditional parental guarantee.
Schedule B instruments generally offer higher rates than the short-term
instruments of the parent bank or holding company.

REPURCHASE AGREEMENTS

In a repurchase agreement (a "repo"), the Fund buys a security at one price and
simultaneously agrees to sell it back to the seller at an agreed upon price on a
specified date (usually within seven days from the date of purchase) or on
demand. The repurchase price exceeds the purchase price by an amount that
reflects an agreed-upon rate of return and that is unrelated to the interest
rate on the underlying security. Delays or losses could result if the other
party to the agreement defaults or becomes bankrupt.

The advisor attempts to minimize the risks associated with repurchase agreements
by adhering to the following criteria:

(1) Limiting the securities acquired and held by the Fund under repurchase
agreements to U.S. government securities;

(2) Entering into repurchase agreements only with primary dealers in U.S.
government securities (including bank affiliates) that are deemed to be
creditworthy under guidelines established by a rating agency and approved
by the Fund's board of trustees;

(3) Monitoring the creditworthiness of all firms involved in repurchase
agreement transactions;

(4) Requiring the seller to establish and maintain collateral equal to 102% of
the agreed-upon resale price, provided, however, that the board of
trustees may determine that a broker-dealer's credit standing is
sufficient to allow collateral to fall to as low as 101% of the
agreed-upon resale price before the broker-dealer deposits additional
securities with the Fund's custodian or sub-custodian;

(5) Investing no more than 10% of the Fund's net assets in repurchase
agreements that mature in more than seven days; and

(6) Taking delivery of all securities subject to a repurchase agreement and
holding them in an account at the Fund's custodian or subcustodian bank.

The Fund has received permission from the Securities and Exchange Commission
(SEC) to participate in joint repurchase agreements collateralized by U.S.
government securities with other mutual funds advised by its investment advisor
BMC. Joint repos are expected to increase the income the Fund can earn from repo
transactions without increasing the risks associated with these transactions.

Under the Investment Company Act of 1940 (the "1940 Act"), repurchase agreements
are considered to be loans.

REVERSE REPURCHASE AGREEMENTS

In a reverse repurchase agreement, the Fund transfers possession of (or sells)
securities to another party, such as a bank or broker-dealer, for cash and
agrees to later repay cash plus interest for the return (or repurchase) of the
same securities. To collateralize the transaction, the value of the securities
transferred is slightly greater than the amount of cash the Fund receives in
exchange for the securities.

If the purchaser reneged on the agreement and failed to return the securities,
the Fund might suffer a loss. The Fund's loss could be even greater if the
market value of the securities transferred increased in the meantime. To protect
against these risks, the Fund will enter into reverse repurchase agreements only
with parties whose creditworthiness is determined to be satisfactory by BMC.
While a reverse repurchase agreement is outstanding, the Fund will maintain
sufficient liquid assets in a segregated custodial account to cover its
obligation under the agreement.

TAXABLE MUNICIPAL OBLIGATIONS

Taxable municipal obligations are state and local obligations whose interest
payments are subject to federal income tax because of the degree of
non-government involvement in the transaction or because federal tax code
limitations on the issuance of tax-exempt bonds that benefit private entities
have been exceeded. Some typical examples of taxable municipal obligations
include industrial revenue bonds and economic development bonds issued by state
or local governments to aid private enterprise. The interest on a taxable
municipal bond is often exempt from state taxation in the issuing state. The
Fund may purchase taxable municipal obligations although it does not currently
intend to do so.

TIME DEPOSITS

Time deposits are nonnegotiable bank deposits maintained for up to seven days at
a stated interest rate. These instruments may be withdrawn on demand, although
early withdrawals may be subject to penalties.

WHEN-ISSUED SECURITIES, FORWARD-COMMITMENTS AND ROLL TRANSACTIONS

The Fund may engage in securities transactions on a when-issued or
forward-commitment basis, in which the transaction price and yield are each
fixed at the time the commitment is made, but payment and delivery occur at a
future date (typically 1 to 7 days later).

When purchasing securities on a when-issued or forward-commitment basis, the
Fund assumes the rights and risks of ownership, including the risks of price and
yield fluctuations. While the Fund will make commitments on a when-issued or
forward-commitment basis to purchase or sell securities with the intention of
actually receiving or delivering them, it may sell the securities before the
settlement date if doing so is deemed advisable as a matter of investment
strategy.

In purchasing securities on a when-issued or forward-commitment basis, the Fund
will maintain until the settlement date a segregated account consisting of cash,
cash equivalents, or other high-quality liquid debt securities in an amount
sufficient to meet the purchase price. When the time comes to pay for
when-issued securities, the Fund will meet its obligations with available cash,
through the sale of securities, or, although it would not normally expect to do
so, by selling the when-issued securities themselves (which may have a market
value greater or less than the Fund's payment obligation). Selling securities to
meet when-issued or forward-commitment obligations may generate capital gains or
losses.

The Fund may sell a security and at the same time make a commitment to purchase
the same security at a future date and specified price. Conversely, the Fund may
purchase a security and at the same time make a commitment to sell the same
security at a future date and specified price. These types of transactions are
executed simultaneously in what are known as "dollar-rolls", "cash and carry" or
financing transactions. For example, a broker-dealer may seek to purchase a
particular security that the Fund owns. The Fund will sell that security to the
broker-dealer and simultaneously enter into an agreement to buy it back at a
future date. This type of transaction generates income for the Fund if the
dealer is willing to execute the transaction at a favorable price in order to
acquire a specific security.

There is a risk that the party with whom the Fund enters into a
forward-commitment agreement will not uphold its commitment, which could cause
the Fund to miss a favorable price or yield opportunity or to suffer a loss. To
minimize this risk, BMC limits when-issued and forward-commitment transactions
(including roll transactions) to 30% of the Fund's net assets. In addition, no
more than 10% of the Fund's net assets may be committed to transactions in which
the settlement date occurs more than 30 days after the trade date. The Fund will
establish a segregated account as described above to meet all payment
obligations arising as a result of these types of transactions.

INTEREST RATE RESETS ON VARIABLE- AND FLOATING-RATE INSTRUMENTS

The interest rate on variable- and floating-rate instruments is ordinarily
determined by reference to (or is a percentage of) an objective standard. There
are two types of indexes that provide the basis for interest rate
adjustments--those based on market rates and those based on a calculated measure
such as a cost-of-funds index. Commonly used indexes include the three-month
Treasury bill rate, the Federal Funds effective rate (the "Fed Funds rate"), or
the one-month or three-month London Interbank Offered Rate (LIBOR), each of
which is highly correlated with changes in market interest rates.

Three-month Treasury bill rates are calculated by the Federal Reserve Bank of
New York based on weekly auction averages.

LIBOR is the rate at which banks in London offer Eurodollars in trades between
banks. LIBOR has become a key rate in the U.S. domestic money market because it
is perceived to reflect the true global cost of money.

The Fed Funds rate is the overnight rate at which banks lend funds to each
other, usually as unsecured loans from regional banks to money center banks. The
Fed Funds rate is the average dollar-weighted rate of overnight funds. It is
reported with a one-day lag (Monday's rate is reported Tuesday morning) and may
be found in reports issued by various financial information services.

BMC may invest in instruments whose interest rate adjustments are based on new
indexes as these indexes become available.

Variable-rate demand instruments include master demand notes. These obligations
permit the Fund to invest amounts that may change daily without penalty under
direct arrangements between the Fund and the issuer.

The issuer normally has a corresponding right, after a given period and on a
specified number of days notice, to prepay the outstanding principal amount of
the obligation plus accrued interest. Although there is no secondary market for
master demand notes, these instruments are repayable by the borrower at par plus
accrued interest on seven days' notice.

Variable- and floating-rate demand instruments frequently are not rated. The
Fund may invest in these unrated instruments if BMC determines, at the time of
investment, that they are of a quality comparable to other obligations the Fund
buys.

LOAN PARTICIPATIONS

Although the Fund does not currently intend to do so, it may buy loan
participations, which represent interests in the cash flow generated by
commercial loans. Each loan participation requires three parties: a participant
(or investor), a lending bank, and a borrower. The investor purchases a share in
a loan originated by a lending bank, and this participation entitles the
investor to a percentage of the principal and interest payments made by the
borrower.

Loan participations are attractive because they typically offer higher yields
than other money market instruments. However, along with these higher yields
come certain risks, not least of which is the risk that the borrower will be
unable to repay the loan. Generally, since the lending bank does not guarantee
payment, the investor is directly exposed to risk of default by the borrower.
Secondly, the investor is not a direct creditor of the borrower. The
participation represents an interest in assets owned by the lending bank. If the
lending bank becomes insolvent, the investor could be considered an unsecured
creditor of the bank instead of the holder of a participating interest in a
loan. Because of these risks, BMC must carefully consider the creditworthiness
of both the borrower and the lender.

Another concern is liquidity. Because there is no established secondary market
for loan participations, the Fund's ability to sell them for cash is limited.
Some participation agreements place limitations on the investor's right to
resell the loan participation, even when a buyer can be found. To alleviate
these liquidity concerns, the Fund generally limits its investments in loan
participations to those with terms of 7 days or less, although it may invest in
loan participations with terms of up to 30 days.

SECURITIES LENDING

The Fund may lend its portfolio securities to banks and broker-dealers to earn
additional income. If a borrower defaulted on a securities loan, the Fund could
experience delays in recovering loaned securities; or if the value of the loaned
securities increased over the value of the collateral, the Fund could suffer a
loss. To minimize the risk of default on securities loans, BMC adheres to the
following guidelines prescribed by the board of trustees:

(1) TYPE AND AMOUNT OF COLLATERAL. At the time a loan is made, the Fund must
receive, from or on behalf of a borrower, collateral consisting of any
combination of cash and full faith and credit U.S. government securities
equal to not less than 102% of the market value of the securities loaned.
Cash collateral received by the Fund in connection with loans of portfolio
securities may be commingled by the Fund's custodian with other cash and
marketable securities, provided that the loan agreement expressly allows
such commingling.

(2) ADDITIONS TO COLLATERAL. Collateral must be marked to market daily, and
the borrower must agree to add collateral to the extent necessary to
maintain the 102% level specified in guideline (1) above. The borrower
must deposit additional collateral no later than the business day
following the business day on which a collateral deficiency occurs or
collateral appears to be inadequate.

(3) TERMINATION OF LOAN. The Fund must have the option to terminate any loan
of a portfolio security at any time and recover its securities (from the
borrower) within the normal settlement period for the types of securities
loaned following the receipt of the termination notice.

(4) REASONABLE RETURN ON LOAN. The borrower must agree that the Fund (i) will
receive all dividends, interest, or other distributions on loaned
securities and (ii) will be paid a reasonable return on such loans either
in the form of a loan fee or premium, or from the retention by the Fund of
part or all of the earnings and profits realized from investment of cash
collateral in full faith and credit U.S. government securities.

(5) LIMITATIONS ON PERCENTAGE OF FUND ASSETS ON LOAN. The Fund's loans may not
exceed 33-1/3% of its total assets.

(6) CREDIT ANALYSIS. As part of the regular monitoring procedures set forth by
the board of trustees that BMC follows to evaluate banks and
broker-dealers in connection with, for example, repurchase agreements and
municipal securities credit issues, BMC will analyze and monitor the
creditworthiness of all borrowers with whom portfolio lending arrangements
are proposed or made.

ILLIQUID SECURITIES

Illiquid securities are investments that cannot be sold or disposed of in the
ordinary course of business at approximately the prices at which they are
valued. Pursuant to guidelines established by the board of trustees, BMC
determines the liquidity of the Fund's investments, and through reports from
BMC, the board monitors trading activity in illiquid securities.

In determining the liquidity of the Fund's investments, BMC may consider various
factors including (i) the frequency of trades and quotations, (ii) the number of
dealers and prospective purchasers in the marketplace, (iii) dealer undertakings
to make a market, (iv) the nature of the security (including any demand or
tender features), and (v) the marketplace for trades.

In the absence of market quotations, illiquid securities are valued for purposes
of monitoring amortized cost valuation at fair market value as determined in
good faith by a committee appointed by the board of trustees. If through a
change in values, net assets, or other circumstances, more than 10% of the
Fund's net assets were invested in illiquid securities, BMC would take
appropriate steps to protect the Fund's liquidity.

RESTRICTED SECURITIES

Restricted securities generally can be sold (i) in privately negotiated
transactions, (ii) pursuant to an exemption from registration under the
Securities Act of 1933, or (iii) in a registered public offering. Where
registration is required, the Fund may be obligated to pay all or part of the
registration expense, and a considerable period may elapse between the time it
decides to seek registration and the time it is permitted to sell a security
under an effective registration statement. If during such a period adverse
market conditions were to develop, the Fund might obtain a less favorable price
than prevailed when it decided to seek registration of the security.

Rule 144A under the Securities Act permits a broader institutional trading
market for securities otherwise subject to restriction on resale to the general
public. Rule 144A establishes a "safe harbor" from the registration requirements
of the Securities Act for resales of certain securities to qualified
institutional buyers. Investing in Rule 144A securities could increase the level
of fund illiquidity to the extent that qualified institutional buyers become,
for a time, uninterested in purchasing these securities.

The Fund may also invest in CP issued in reliance on the "private placement"
exemption from registration under Section 4(2) of the Securities Act of 1933
(Section 4(2) paper). Section 4(2) paper is restricted as to disposition under
the federal securities laws and generally is sold to institutional investors
such as the Fund who agree that they are purchasing the paper for investment and
not with a view to public distribution. Any resale by the purchaser must be in
an exempt transaction. Section 4(2) paper normally is resold to other
institutional investors like the Fund through or with the assistance of the
issuer or investment dealers who make a market in the Section 4(2) paper, thus
providing liquidity. BMC may consider Section 4(2) paper that meets certain
conditions to be liquid, pursuant to procedures approved by the board of
trustees. Section 4(2) paper that is not determined to be liquid pursuant to
these procedures will be included within the 10% limitation on illiquid
securities. BMC monitors the liquidity of the Fund's investments in Section 4(2)
paper on a continuing basis.

INVESTMENT RESTRICTIONS

The Fund's investment restrictions set forth below are fundamental and may only
be changed with approval of a majority of the votes of shareholders of the Fund
as determined in accordance with the 1940 Act.

THE FUND MAY NOT:

(1) Purchase, with respect to 75% of its total assets, the securities of any
issuer (other than securities issued or guaranteed by the U.S. government
or any of its agencies or instrumentalities) if, as a result, (i) more
than 5% of the Fund's total assets would be invested in the securities of
that issuer, or (ii) the Fund would hold more than 10% of the outstanding
voting securities of that issuer.

(2) Issue senior securities except as permitted under the 1940 Act and except
to the extent that notes evidencing temporary borrowings or the purchase
of securities on a when-issued or delayed-delivery basis might be deemed
senior securities.

(3) Borrow money, except that the Fund may (i) borrow money for temporary or
emergency purposes (not for leveraging or investment) and (ii) engage in
reverse repurchase agreements and forward commitment transactions for any
purpose, provided that (i) and (ii) in combination do not exceed 33-1/3%
of the Fund's total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that exceed this
amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33-1/3% limitation.

(4) Underwrite securities issued by others, except to the extent that the Fund
may be considered an underwriter in the disposition of restricted
securities within the meaning of the Securities Act of 1933.

(5) Purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the Fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry, except that the Fund will
invest more than 25% of its total assets in the financial services
industry.

(6) Purchase or sell real estate unless acquired as a result of ownership of
securities or other instruments (but this shall not prevent the Fund from
investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business).

(7) Purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments.

(8) Lend any security or make any other loan if, as a result, more than
33-1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.

The Fund is also subject to the following restrictions that are not fundamental
and may therefore be changed by the board of trustees without shareholder
approval.

THE FUND MAY NOT:

(a) Purchase a security (other than a security issued or guaranteed by the
U.S. government or any of its agencies or instrumentalities) if, as a
result, more than 5% of its total assets would be invested in the
securities of a single issuer, provided that the Fund may invest up to 25%
of its total assets in the first-tier securities of a single issuer for up
to three business days.

(b) Sell securities short unless it owns or has the right to obtain at no
added cost securities equivalent in kind and amount to the securities sold
short and provided that transactions in futures contracts and options are
not deemed to constitute selling securities short.

(c) Purchase securities on margin, except that the Fund may obtain such
short-term credits as are necessary for the clearance of transactions, and
provided that margin payments in connection with futures contracts and
options on futures contracts will not constitute purchasing securities on
margin.

(d) Purchase any security while borrowings representing more than 5% of its
total assets are outstanding.

(e) Purchase any security or enter into a repurchase agreement if, as a
result, more than 10% of its net assets would be invested in repurchase
agreements not entitling the holder to payment of principal and interest
within seven days and in securities that are illiquid by virtue of legal
or contractual restrictions on resale or the absence of a readily
available market.

(f) Invest in securities of real estate investment trusts that are not readily
marketable or invest in securities of real estate limited partnerships
that are not listed on the New York Stock Exchange (the "Exchange") or the
American Stock Exchange or traded on the NASDAQ National Market System.

(g) Purchase securities of other investment companies except in the open
market where no commission except the ordinary broker's commission is
paid, or purchase or retain securities issued by other open-end investment
companies except as permitted pursuant to exemptive orders issued by the
SEC. These limitations do not apply to securities received as dividends,
through offers of exchange, or as a result of a reorganization,
consolidation, or merger.

(h) Purchase the securities of any issuer (other than securities issued or
guaranteed by domestic or foreign governments or political subdivisions
thereof) if, as a result, more than 5% of its total assets would be
invested in the securities of business enterprises that, including
predecessors, have a record of less than three years of continuous
operation.

(i) Purchase warrants.

(j) Invest in oil, gas, or other mineral exploration or development programs
or leases.

(k) Purchase the securities of any issuer if those officers and trustees of
the Trust and those officers and directors of BMC who individually own
more than 1/2 of 1% of the securities of such issuer together own more
than 5% of such issuer's securities.

(l) Purchase the voting securities of any issuer.

(m) Purchase or sell futures contracts or put or call options. This limitation
does not apply to options attached to, or acquired or traded together
with, their underlying securities and does not apply to securities that
incorporate features similar to options or futures contracts.

(n) Lend assets other than securities to other parties.

PORTFOLIO TRANSACTIONS

The Fund's assets are invested by BMC in a manner consistent with the Fund's
investment objective, policies, and restrictions and with any instructions the
board of trustees may issue from time to time. Within this framework, BMC is
responsible for making all determinations as to the purchase and sale of
portfolio securities and for taking all steps necessary to implement securities
transactions on behalf of the Fund. In placing orders for the purchase and sale
of portfolio securities, BMC will use its best efforts to obtain the best
possible price and execution and will otherwise place orders with broker-dealers
subject to and in accordance with any instructions the board of trustees may
issue from time to time. BMC will select broker-dealers to execute portfolio
transactions on behalf of the Fund solely on the basis of best price and
execution.

Securities in which the Fund invests generally are traded in the
over-the-counter market through broker-dealers. A broker-dealer is a securities
firm or bank that makes a market for securities by offering to buy at one price
and sell at a slightly higher price. The difference between the prices is known
as a spread. BMC transacts in round lots ($1 million to $10 million or more) on
behalf of the Fund whenever possible. Because commissions are not charged for
money market transactions, the Fund's transaction costs consist solely of
custodian charges and dealer mark-ups. The Fund may hold its portfolio
securities to maturity or may sell or swap them for other securities, depending
upon the level and slope of, and anticipated changes in, the yield curve.

The Fund acquired, during the fiscal year ended February 29, 1996, securities
issued by its regular brokers or dealers (as defined in Rule 10b-1 under the
1940 Act) and/or their parent corporations. As of February 29, 1996, the Fund
held securities issued by the following brokers or dealers in the following
aggregate amounts: Merrill Lynch, $25,000,000 and Morgan Stanley Group,
$19,000,000.

VALUATION OF PORTFOLIO SECURITIES

The Fund's net asset value per share ("NAV") is calculated by Benham Financial
Services, Inc. (BFS) at the close of business of the Exchange, usually 1:00 p.m.
Pacific Time each day the Exchange is open for business. The Exchange has
designated the following holiday closings for 1996: New Year's Day (observed),
Presidents` Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, and Christmas Day (observed). Although BFS expects the same
holiday schedule to be observed in the future, the Exchange may modify its
holiday schedule at any time.

BMC typically completes its trading on behalf of the Fund in various markets
before the Exchange closes for the day. Securities held by the Fund are valued
at amortized cost. This method involves valuing an instrument at its cost and
thereafter assuming a constant amortization to maturity of any discount or
premium paid at the time of purchase. Although this method provides certainty in
valuation, it generally disregards the effect of fluctuating interest rates on
an instrument's market value. Consequently, the instrument's amortized cost
value may be higher or lower than its market value, and this discrepancy may be
reflected in the Fund's yield. During periods of declining interest rates, for
example, the daily yield on Fund shares computed as described above may be

higher than that of a fund with identical investments priced at market value.
The converse would apply in a period of rising interest rates.

The amortized cost valuation method is permitted in accordance with Rule 2a-7
under the 1940 Act. Under the Rule, a fund holding itself out as a money market
fund must adhere to certain quality and maturity criteria, which are described
in the Prospectus.

The trustees have established procedures designed to stabilize the Fund's NAV at
$1.00 per share to the extent reasonably possible. These procedures require the
Trust's chief financial officer to notify the trustees immediately if, at any
time, the Fund's weighted average maturity exceeds 90 days, or its NAV, as
determined by using available market quotations, deviates from its amortized
cost per share by .25% or more. If such deviation exceeds .40%, a meeting of the
board of trustees' audit committee will be called to consider what actions, if
any, should be taken. If such deviation exceeds .50%, the Trust's chief
financial officer is instructed to adjust daily dividend distributions
immediately to the extent necessary to reduce the deviation to .50% or lower and
to call a meeting of the board of trustees to consider further action.

Actions the board may consider under these circumstances include but are not
limited to (i) selling portfolio securities prior to maturity, (ii) withholding
dividends or distributions from capital, (iii) authorizing a one-time dividend
adjustment, (iv) discounting share purchases and initiating redemptions in kind,
or (v) valuing portfolio securities at market value for purposes of calculating
NAV. Actions which BMC may consider in the event that a negative deviation
exceeds .50% include (i) waiving current or past investment advisory or transfer
agent fees and (ii) contributing capital sufficient to raise the Fund's
market-based net asset value per share to $0.995 or higher.

PERFORMANCE

The Fund's yield and total return may be quoted in advertising and sales
literature. Yield and total return will vary. Past performance should not be
considered an indication of future results.

Yield quotations for the Fund are based on the change in the value of a
hypothetical investment (excluding realized gains and losses from the sale of
securities and unrealized appreciation and depreciation of securities) over a
seven-day period (base period) and stated as a percentage of the investment at
the start of the base period (base-period return). The base-period return is
then annualized by multiplying it by 365/7 with the resulting yield figure
carried to at least the nearest hundredth of one percent.

Calculations of effective yield begin with the same base-period return used to
calculate yield, but the return is then annualized to reflect weekly compounding
according to the following formula:
365/7
Effective Yield = [(Base-Period Return + 1) ] - 1

For the seven-day period ended February 29, 1996, the Fund's yield was 4.97%,
and its effective yield was 5.09%.

Total returns quoted in advertising and sales literature reflect all aspects of
the Fund's return, including the effect of reinvesting dividends and capital
gain distributions (if any) and any change in the Fund's NAV during the period.

Average annual total returns are calculated by determining the growth or decline
in value of a hypothetical historical investment in the Fund during a stated
period and then calculating the annually compounded percentage rate that would
have produced the same result if the rate of growth or decline in value had been
constant throughout the period. For example, a cumulative total return of 100%
over 10 years would produce an average annual return of 7.18%, which is the
steady annual rate that would equal 100% growth on a compounded basis in 10
years. While average annual total returns are a convenient means of comparing
investment alternatives, investors should realize that the Fund's performance is
not constant over time, but changes from year to year, and that average annual
total returns represent averaged figures as opposed to actual year-to-year
performance.

Average annual total returns for periods of less than one year are calculated by
determining the Fund's total return for the period, extending that return for a
full year (assuming that performance remains constant throughout the year), and
quoting the result as an annual return. Because the Fund's return may not remain
constant over the course of a year, these performance figures should be viewed
as strictly hypothetical.

In addition to average annual total returns, the Fund may quote unaveraged or
cumulative total returns reflecting the simple change in value of an investment
over a stated period. Average annual and cumulative total returns may be quoted
as percentages or as dollar amounts and may be calculated for a single
investment, a series of investments, or a series of redemptions over any time
period. Performance information may be quoted numerically or in a table, graph,
or similar illustration.

The Fund's performance may be compared with the performance of other mutual
funds tracked by mutual fund rating services or with other indexes of market
performance. This may include comparisons with funds that, unlike Benham funds,
are sold with a sales charge or deferred sales charge. Sources of economic data
that may be considered in making such comparisons may include, but are not
limited to, U.S. Treasury bill, note, and bond yields, money market fund yields,
U.S. government debt and percentage held by foreigners, the U.S. money supply,
net free reserves, and yields on current-coupon GNMAs (source: Board of
Governors of the Federal Reserve System); the federal funds and discount rates
(source: Federal Reserve Bank of New York); yield curves for U.S. Treasury
securities and AA/AAA-rated corporate securities (source: Bloomberg Financial
Markets); yield curves for AAA-rated tax-free municipal securities (source:
Telerate); yield curves for foreign government securities (sources: Bloomberg
Financial Markets and Data Resources, Inc.); total returns on foreign bonds
(source: J.P. Morgan Securities Inc.); various U.S. and foreign government
reports; the junk bond market (source: Data Resources, Inc.); the CRB Futures
Index (source: Commodity Index Report); the price of gold (sources: London
a.m./p.m. fixing and New York Comex Spot Price); rankings of any mutual fund or
mutual fund category tracked by Lipper Analytical Services, Inc. or Morningstar,
Inc.; mutual fund rankings published in major nationally distributed
periodicals; data provided by the Investment Company Institute; Ibbotson
Associates, Stocks, Bonds, Bills, and Inflation; major indexes of stock market
performance; and indexes and historical data supplied by major securities
brokerage or investment advisory firms.

The Fund's shares are sold without a sales charge (or "load"). No-load funds
offer an advantage to investors when compared to load funds with comparable
investment objectives and strategies. For example, if you invest $10,000 in a
no-load fund, 100% of your investment is used to buy shares. If you invest
$10,000 in a fund with a 5.5% load, only $9,450 ($10,000 minus $550) is used to
buy

shares. Over time, this difference can have a significant effect on total
return. Assuming a compounded annual growth rate of 10% for both investments,
the no-load fund investment would be worth $25,937 after 10 years, whereas the
load fund investment would be worth only $24,511.

BMC may obtain Fund ratings from one or more rating agencies and may publish
these ratings in advertisements and sales literature.

TAXES

The Fund intends to qualify each year as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended, (the "Code" ). To
qualify as a regulated investment company and avoid being subject to federal and
California taxes at the Fund level, the Fund must distribute within each
calendar year as well as each fiscal year substantially all of its net
investment income and net realized capital gains (if any) to shareholders. In
addition to federal income taxes, shareholders may be subject to state and local
taxes on their distributions from the Fund.

The information above is only a summary of some of the tax considerations
generally affecting the Fund and its shareholders; no attempt has been made to
discuss individual tax consequences. An investor considering an investment in
the Fund should consult with his or her tax advisors to determine whether the
Fund is a suitable investment.

ABOUT BENHAM INVESTMENT TRUST

Benham Investment Trust (BIT) was organized as a Massachusetts business trust on
June 16, 1993. Currently Benham Prime Money Market Fund is the only series of
the Trust, although the trustees are authorized to create additional series at
their discretion.

The Declaration of Trust permits the trustees to issue an unlimited number of
full and fractional shares of beneficial interest without par value, which may
be issued in series (or funds). Shares issued are fully paid and nonassessable
and have no preemptive, conversion, or similar rights.

If additional series were created by the board of trustees, each series would
vote separately on matters affecting that series exclusively. Voting rights are
not cumulative, so that investors holding more than 50% of the Trust's (i.e.,
all series') outstanding shares would be able to elect a board of trustees. The
Trust instituted dollar-based voting, meaning that the number of votes you are
entitled to is based upon the dollar amount of your investment. The election of
trustees would be determined by the votes received from all Trust shareholders
without regard to whether a majority of shares of any one series voted in favor
of a particular nominee or all nominees as a group.

Each shareholder of the existing series has rights proportionate to his or her
share ownership interest in the series as to dividends and distributions
declared by the series and to the net assets of such series upon its liquidation
or dissolution.

The shareholders of a Massachusetts business trust could, under certain
circumstances, be held personally liable for its obligations. However, the
Declaration of Trust contains an express disclaimer of shareholder liability for
acts or obligations of the Trust. The Declaration of Trust also provides for
indemnification and reimbursement of expenses of any shareholder held personally
liable for obligations of the Trust. The Declaration of Trust provides that the
Trust will, upon request, assume the defense of any claim made against any
shareholder for any act or obligation of the Trust

and satisfy any judgment thereon. The Declaration of Trust further provides that
the Trust may maintain appropriate insurance (for example, fidelity, bonding,
and errors and omissions insurance) for the protection of the Trust, its
shareholders, trustees, officers, employees, and agents to cover possible tort
and other liabilities. Thus, the risk of a shareholder incurring financial loss
as a result of shareholder liability is limited to circumstances in which both
inadequate insurance exists and the Trust is unable to meet its obligations.

CUSTODIAN BANK: State Street Bank and Trust Company, 225 Franklin Street,
Boston, Massachusetts 02101, is custodian of the Fund's assets. Services
provided by the custodian bank include (i) settling portfolio purchases and
sales, (ii) reporting failed trades, (iii) identifying and collecting portfolio
income, and (iv) providing safekeeping of securities. The custodian takes no
part in determining the Fund's investment policies or in determining which
securities are sold or purchased by the Fund.

INDEPENDENT AUDITORS: KPMG Peat Marwick LLP, 3 Embarcadero Center, San
Francisco, California 94111, serves as the Trust's independent auditors and
provides services including (i) audit of annual financial statements and (ii)
preparation of annual federal income tax returns filed on behalf of the Fund.

TRUSTEES AND OFFICERS

The Trust's activities are overseen by a board of trustees, including seven
independent trustees. The individuals listed below whose names are marked by an
asterisk (*) are "interested persons" of the Trust (as defined in the 1940 Act)
by virtue of, among other considerations, their affiliation with either the
Trust; the Trust's investment advisor, BMC; the Trust's agent for transfer and
administrative services, BFS; the Trust's distribution agent, Benham
Distributors, Inc. (BDI); the parent corporation, Twentieth Century Companies,
Inc. (TCC) or TCC`s subsidiaries; or other funds advised by BMC. Each trustee
listed below serves as a trustee or director of other funds in The Benham Group.
Unless otherwise noted, dates in parentheses indicate the dates the trustee or
officer began his or her service in a particular capacity. The trustees' and
officers' address with the exception of Mr. Stowers III and Ms. Roepke is 1665
Charleston Road, Mountain View, California 94043. The address of Mr. Stowers
IIIand Ms. Roepke is 4500 Main Street, Kansas City, Missouri 64141-0274.

TRUSTEES

*JAMES M. BENHAM, chairman of the board of trustees (1993), president and chief
executive officer (1996). Mr. Benham is also chairman of the boards of BFS
(1985), BMC (1971), and BDI (1988); president of BMC (1971), and BDI (1988); and
a member of the board of governors of the Investment Company Institute (1988).
Mr. Benham has been in the securities business since 1963, and he frequently
comments through the media on economic conditions, investment strategies, and
the securities markets.

ALBERT A. EISENSTAT, independent trustee (1995). Mr. Eisenstat is an independent
director of each of Commercial Metals Co. (1982), Sungard Data Systems (1991)
and Business Objects S/A (1994). Previously, he served as vice president of
corporate development and corporate secretary of Apple Computer and served on
its Board of Directors (1985 to 1993).

RONALD J. GILSON, independent trustee (1995). Mr. Gilson is the Charles J.
Meyers Professor of Law and Business at Stanford Law School (1979) and the Mark
and Eva Stern Professor of Law and Business at Columbia University School of Law
(1992). He is counsel to Marron, Ried & Sheehy (a San Francisco law firm, 1984).

MYRON S. SCHOLES, independent trustee (1993). Mr. Scholes, a principal of
Long-Term Capital Management (1993), is also Frank E. Buck Professor of Finance
at the Stanford Graduate School of Business (1983), and a director of
Dimensional Fund Advisors (1982) and the Smith Breeden Family of Funds (1992).
From August 1991 to June 1993, Mr. Scholes was a managing director of Salomon
Brothers Inc. (securities brokerage).

KENNETH E. SCOTT, independent trustee (1993). Mr. Scott is Ralph M. Parsons
Professor of Law and Business at Stanford Law School (1972) and a director of
RCM Capital Management (June 1994).

EZRA SOLOMON, independent trustee (1993). Mr. Solomon is Dean Witter Professor
of Finance Emeritus at the Stanford Graduate School of Business, where he served
as Dean Witter Professor of Finance from 1965 to 1990, and a director of
Encyclopedia Britannica.

ISAAC STEIN, independent trustee (1993). Mr. Stein is former chairman of the
board (1990 to 1992) and chief executive officer (1991 to 1992) of Esprit de
Corp. (clothing manufacturer). He is a member of the board of Raychem
Corporation (electrical equipment, 1993), president of Waverley Associates, Inc.
(private investment firm, 1983), and a director of ALZA Corporation
(pharmaceuticals, 1987). He is also a trustee of Stanford University (1994) and
chairman of Stanford Health Services (hospital, 1994).

*JAMES E. STOWERS III, trustee (1995). Mr. Stowers is the president and director
of Twentieth Century Investors, Inc., TCI Portfolios, Inc., Twentieth Century
World Investors, Inc., Twentieth Century Premium Reserves, Inc., Twentieth
Century Capital Portfolios, Inc., Twentieth Century Institutional Portfolios,
Inc., Twentieth Century Companies, Inc., Investors Research Corporation and
Twentieth Century Services, Inc.

JEANNE D. WOHLERS, independent trustee (1993). Ms. Wohlers is a private investor
and an independent director and partner of Windy Hill Productions, LP.
Previously, she served as vice president and chief financial officer of Sybase,
Inc. (software company, 1988 to 1992).

OFFICERS

*JAMES M. BENHAM, president and chief executive officer (1996).

*DOUGLAS A. PAUL, secretary (1993), vice president (1993), and general counsel
(1993); secretary, vice president and general counsel of BMC, BFS, BDI and all
of the funds in the Benham Group.

*ANN N. McCOID, controller (1993); controller of BFS and all of the funds in the
Benham Group.

*MARYANNE ROEPKE, CPA, chief financial officer and treasurer (1995); vice
president, treasurer and principal accounting officer, Twentieth Century
Strategic Asset Allocations; vice president and treasurer, Twentieth Century
Investors, Inc., Twentieth Century World Investors, Inc., Twentieth Century
Capital Portfolios, Inc., Twentieth Century Premium Reserves, Inc. and TCI
Portfolios, Inc.; vice president, Twentieth Century Services, Inc.

The table on the following page summarizes the compensation that the trustees of
Benham Investment Trust received from the Fund for the Fund's fiscal year ended
February 29, 1996, as well as the compensation received for serving as a
director or trustee of all other Benham funds.

TRUSTEE COMPENSATION FOR THE FISCAL YEAR ENDED
FEBRUARY 29, 1996

- -----------------------------------------------------------------------------------------------------------------
NAME OF AGGREGATE PENSION OR ESTIMATED TOTAL
TRUSTEE* COMPENSATION RETIREMENT BENEFITS ANNUAL BENEFITS COMPENSATION
FROM FUND ACCRUED AS PART OF UPON RETIREMENT FROM FUND AND
FUND EXPENSES FUND COMPLEX**
PAID TO TRUSTEES
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------
Albert A. Eisenstat $ 428 Not Applicable Not Applicable $20,000
- -----------------------------------------------------------------------------------------------------------------
Ronald J. Gilson $6,579 Not Applicable Not Applicable $69,583
- -----------------------------------------------------------------------------------------------------------------
Myron S. Scholes $9,122 Not Applicable Not Applicable $68,625
- -----------------------------------------------------------------------------------------------------------------
Kenneth E. Scott $9,150 Not Applicable Not Applicable $75,898
- -----------------------------------------------------------------------------------------------------------------
Ezra Solomon $8,764 Not Applicable Not Applicable $68,875
- -----------------------------------------------------------------------------------------------------------------
Isaac Stein $9,198 Not Applicable Not Applicable $69,625
- -----------------------------------------------------------------------------------------------------------------
Jeanne D. Wohlers $9,103 Not Applicable Not Applicable $71,125
- -----------------------------------------------------------------------------------------------------------------
* Interested trustees receive no compensation for their services as such.
** The Benham Group Fund Complex currently consists of 10 registered investment companies.
</TABLE>

As of March 31, 1996, the Fund's trustees and officers, as a group, owned less
than 1% of the Fund's total shares outstanding.

INVESTMENT ADVISORY SERVICES

The Fund has an investment advisory agreement with BMC dated June 1, 1995, that
was approved by the Fund's shareholders on May 31, 1995.

BMC is a California corporation and a wholly owned subsidiary of TCC, a Delaware
corporation. BMC, as well as BFS and BDI, became wholly owned subsidiaries of
TCC on June 1, 1995, upon the merger of Benham Management International (BMI),
the former parent of BFS and BDI, into TCC. BMC has served as investment advisor
to the Fund since the Fund`s inception. TCC is a holding company that owns all
of the stock of the operating companies that provide the investment management,
transfer agency, shareholder service, and other services for the Twentieth
Century funds. James E. Stowers, Jr. controls TCC by virtue of his ownership of
a majority of its common stock. BMC has been registered investment advisor since
1971 and is investment advisor to the other funds in The Benham Group.

The Fund`s agreement with BMC continues for an initial period of two years and
thereafter from year-to-year provided that, after the initial two year period,
it is approved at least annually by vote of a majority of the votes of
shareholders of the Fund`s or by a vote of a majority of the Fund`s trustees,
including a majority of those trustees who are neither parties to the agreement
nor interested persons of any such party, cast in person at a meeting called for
the purpose of voting on such approval.

The investment advisory agreement is terminable on 60 days' written notice,
either by the Fund or by BMC, to the other party and terminates automatically in
the event of its assignment.

Pursuant to the investment advisory agreement, BMC provides the Fund with
investment advice and portfolio management services in accordance with the
Fund's investment objective, policies, and restrictions. The agreement also
provides that BMC will determine what securities will be purchased and sold by
the Fund and assist the Trust's officers in carrying out decisions made by the
board of trustees.

For these services, the Fund pays BMC a monthly investment advisory fee equal to
its pro rata share of the dollar amount derived from applying the Trust's
average daily net assets to the following investment advisory fee schedule:

.50% of the first $100 million
.45% of the next $100 million
.40% of the next $100 million
.35% of the next $100 million
.30% of the next $100 million
.25% of the next $1 billion
.24% of the next $1 billion
.23% of the next $1 billion
.22% of the next $1 billion
.21% of the next $1 billion
.20% of the next $1 billion
.19% of average daily net assets over $6.5 billion

The Fund paid $2,316,045 net of the fee waiver in investment advisory fees for
the fiscal year ended February 29, 1996. The fee paid to BMC for investment
advisory services was reduced by a fee waiver of $1,839,833.

As a result of the expense limitation agreement and a voluntary fee waiver, BMC
waived investment advisory fees of $2,708,338 for the fiscal year ended February
28, 1995, and $55,479 for the period from November 17, 1993 (commencement of
operations), through February 28, 1994.

ADMINISTRATIVE AND TRANSFER AGENT SERVICES

GROUP ASSETS ADMINISTRATIVE FEE RATE

up to $4.5 billion .11%
up to $6.0 billion .10
up to $9.0 billion .09
over $9.0 billion .08

For transfer agent services, the Fund pays BFS a monthly fee of $1.3958 for each
shareholder account maintained and $1.35 for each shareholder transaction
executed during the month.

The Fund paid $1,975,550 in transfer agent fees and $1,319,915 in administrative
fees for the fiscal year ended February 29, 1996.

Due to the expense limitation agreements described below, the Fund paid no
transfer agent or administrative fees to BFS for the fiscal year ended February
28, 1995, and for the period from November 17, 1993 (commencement of
operations), through February 28, 1994.

DIRECT FUND EXPENSES

The Fund pays certain operating expenses that are not assumed by BMC or BFS.
These include fees and expenses of the independent trustees; custodian, audit,
tax preparation, and pricing fees; fees of outside counsel and counsel employed
directly by the Trust; costs of printing and mailing prospectuses, statements of
additional information, proxy statements, notices, confirmations, and reports to
shareholders; fees for registering the Fund's shares under federal and state
securities laws; brokerage fees and commissions (if any); trade association
dues; costs of fidelity and liability insurance policies covering the Fund;
costs for incoming WATS lines maintained to receive and handle shareholder
inquiries; and organizational costs.

EXPENSE LIMITATION AGREEMENT

CONTRACTUAL EXPENSE LIMITATION AGREEMENT. Under an Expense Reimbursement
Agreement between the Fund and BMC, BMC is obligated to limit the Fund's
expenses to .50% of average daily net assets through May 31, 1998. After May 31,
1998, the expense limit will be subject to annual renewal in June.

The Expense Limitation Agreement provides that BMC may recover amounts
(representing expenses in excess of the contractual limit) reimbursed to the
Fund during the preceding 11 months if, and to the extent that, for any given
month, the Fund's expenses were less than the lower of the contractual or
voluntary expense limitation in effect at that time.

BMC absorbed $1,839,833 of the Fund's expenses for the fiscal year ended
February 29, 1996.

VOLUNTARY EXPENSE REIMBURSEMENT AGREEMENT. As a supplement to the contractual
Expense Reimbursement Agreement, BMC voluntarily reimbursed the Fund for all
expenses through December 31, 1994. On January 1, 1995, the Fund began paying
expenses equal to an additional .10% of average daily net assets and continued
to do so each subsequent month until the contractual expense limit was reached
on May 1, 1995. Voluntary expense limitations are not eligible for recovery by
BMC.

For the fiscal year ended February 28, 1995, and for the period November 17,
1993 (commencement of operations), through February 28, 1994, BMC reimbursed the
Fund for $5,451,506 and $164,816 of the Fund's expenses, respectively.

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION

The Fund's shares are continuously offered at NAV. Share certificates are issued
(without charge) only when requested in writing. Certificates are not issued for
fractional shares. Dividend and voting rights are not affected by the issuance
of certificates.

As of March 29, 1996, to the Fund`s knowledge, no shareholder was the record
holder or beneficial owner of 5% or more of the Fund`s total shares outstanding.

The Benham Group may reject or limit the amount of an investment to prevent any
one shareholder or affiliated group from controlling the Trust or its series; to
avoid jeopardizing a series' tax status; or whenever, in management's opinion,
such rejection or limitation is in the Trust's or a series' best interest.

The Benham Group charges neither fees nor commissions on the purchase and sale
of Benham fund shares. BFS may, however, charge fees for special services
requested by a shareholder or necessitated by acts or omissions of a
shareholder. For example, BFS may charge a fee for processing dishonored
investment checks or stop-payment requests. BFS charges $10 per hour for account
research. This charge will be assessed, for example, when a shareholder request
requires more than one hour of research on historical account records. The fees
charged are based on the estimated costs of performing shareholder-requested
services and are not intended to increase income to BFS.

When it is in the best interest of the Fund and its shareholders (for example,
to deter abusive market timing transactions), the Fund may honor redemption
requests in kind, normally by delivering portfolio securities in lieu of cash.
Securities delivered as redemptions in kind will be valued by the same method
used to value securities in determining the Fund's NAV. Shareholders who receive
securities may realize a capital gain or loss for tax purposes, incur costs in
handling or disposing of the securities, or encounter other inconveniences.

Share purchases and redemptions are governed by California law.

OTHER INFORMATION

BMC has been continuously registered with the SEC under the Investment Advisers
Act of 1940 since December 14, 1971. The Trust has filed a registration
statement under the Securities Act of 1933 and the 1940 Act with respect to the
shares offered. These registrations do not imply approval or supervision of the
Trust or the advisor by the SEC.

For further information, please refer to the registration statement and exhibits
on file with the SEC in Washington, D.C. These documents are available upon
payment of a reproduction fee. Statements in the Prospectus and in this
Statement of Additional Information concerning the contents of contracts or
other documents, copies of which are filed as exhibits to the registration
statement, are qualified by reference to such contracts or documents.

20
<PAGE>
BENHAM INVESTMENT TRUST
Benham Prime Money Market Fund

1933 Act Post-Effective Amendment No. 3
1940 Act Amendment No. 4

PART C OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) FINANCIAL STATEMENTS. Audited financial statements for Benham Prime
Money Market Fund for the fiscal year ended February 29, 1996, are
filed herein as included in the Fund's Statement of Additional
Information by reference to the Annual Report dated February 29, 1996,
filed on April 19, 1996, Accession #908406-96-000003.

(b) EXHIBITS.

(1) Amended and Restated Declaration of Trust, dated June 16, 1993
and amended May 31, 1995, is included herein.

(2) Amended and Restated Bylaws, dated May 17, 1995, are included
herein.

(3) Not applicable.

(4) Specimen copy of Benham Prime Money Market Fund's share
certificate is incorporated herein by reference to Exhibit 4 of
the Trust's Registration Statement filed on June 28, 1993.

(5) Investment Advisory Agreement between Benham Investment Trust and
Benham Management Corporation, dated June 1, 1995, is included
herein.

(6) Distribution Agreement between Benham Investment Trust and Benham
Distributors, Inc., dated June 1, 1995, is incorporated herein by
reference to EX-99.B6 of Post-Effective Amendment No. 6 for
Benham International Funds, filed on February 29, 1996, Accession
#880268-96-000007.

(7) Not applicable.

(8) Custodian Agreement between Benham Investment Trust and State
Street Bank and Trust Company, dated August 10, 1993, is
incorporated herein by reference to Exhibit 8 of Pre-Effective
Amendment No. 1 filed on October 6, 1993.

(9) Administrative Services and Transfer Agency Agreement between
Benham Investment Trust and Benham Financial Services, Inc.,
dated June 1, 1995, is incorporated herein by reference to
EX-99.B9 of Post-Effective Amendment No. 6 for Benham
International Funds, filed on February 29, 1996, Accession
#880268-96-000007.

(10) Opinion and consent of counsel as to the legality of the
securities being registered is incorporated herein by reference
to Rule 24f-2 Notice filed on April 8, 1996, Accession
#908409-96-000002.

(11) Consent of KPMG Peat Marwick LLP, independent auditors, is
` included herein.

(12) Not applicable.

(13) Letter of Understanding relating to initial capital, dated
October 4, 1993 is incorporated herein by reference to Exhibit 13
of Pre-Effective Amendment No. 1 filed on October 6, 1993.

(14) (a)Benham Individual Retirement Account Plan, including all
instructions and other relevant documents, dated February
1992, is incorporated herein by reference to Exhibit 14(a) of
the Trust's Registration Statement filed on June 28, 1993.

(b)Benham Pension/Profit Sharing Plan, including all instructions
and other relevant documents, dated February, 1992, is
incorporated herein by reference to Exhibit 14(b) of the
Trust's Registration Statement filed on June 28, 1993.

(15) Not applicable.

(16) Schedule for computation of each performance quotation provided
in response to Item 22 is included herein.

(17) Power of Attorney dated March 4, 1996, is included herein.

Item 25. Persons Controlled by or Under Common Control with Registrant.

Not applicable.

Item 26. Number of Holders of Securities.

As of March 29, 1996, Benham Prime Money Market Fund (the sole
operating series of Benham Investment Trust) had 53,647
shareholders of record.

Item 27. Indemnification.

As stated in Article VII, Section 3 of the Declaration of
Trust, incorporated herein by reference to Exhibit 1 to the
Registration Statement, "The Trustees shall be entitled and
empowered to the fullest extent permitted by law to purchase
insurance for and to provide by resolution or in the Bylaws
for indemnification out of Trust assets for liability and for
all expenses reasonably incurred or paid or expected to be
paid by a Trustee or officer in connection with any claim,
action, suit, or proceeding in which he or she becomes
involved by virtue of his or her capacity or former capacity
with the Trust. The provisions, including any exceptions and
limitations concerning indemnification, may be set forth in
detail in the Bylaws or in a resolution adopted by the Board
of Trustees."

Registrant hereby incorporates by reference, as though set
forth fully herein, Article VI of the Registrant's Bylaws,
amended on May 17, 1995, appearing as Exhibit 2 in this
Post-Effective Amendment.

Item 28. Business and Other Connections of Investment Advisor.

The Registrant's investment advisor, Benham Management
Corporation, is also investment advisor to Capital
Preservation Fund, Inc., Capital Preservation Fund II, Inc.,
Benham California Tax-Free and Municipal Funds, Benham
Municipal Trust, Benham Target Maturities Trust, Benham
Government Income Trust, Benham Equity Funds, Benham
International Funds, and Benham Manager Funds.

Item 29. Principal Underwriters.

The Registrant's distribution agent, Benham Distributors,
Inc., is also distribution agent to Capital Preservation Fund,
Inc., Capital Preservation Fund II, Inc., Benham California
Tax-Free and Municipal Funds, Benham Municipal Trust, Benham
Target Maturities Trust, Benham Government Income Trust,
Benham Equity Funds, Benham International Funds, and Benham
Manager Funds. The information required with respect to each
director, officer or partner of Benham Distributors, Inc. is
incorporated herein by reference to Benham Distributors' Form
B-D filed on January 19, 1996 (SEC File No.8-36938; Firm CRD
No. 18784).

Item 30. Location of Accounts and Records.

The Registrant, its investment advisor, Benham Management
Corporation, and its agent for transfer and administrative
services, Benham Financial Services, Inc., maintain, at the
Fund's principal office located at 1665 Charleston Road,
Mountain View, CA 94043, physical possession of each account,
book, or other document, and shareholder record as required by
ss.31(a) of the 1940 Act and rules thereunder. The computer
and database for shareholder records are located at Central
Computer Facility, 401 North Broad Street, Sixth Floor,
Philadelphia, PA 19108.

Item 31. Management Services.

Not applicable.

Item 32. Undertakings.

Registrant undertakes to furnish each person to whom a
Prospectus is delivered with a copy of the Registrant's latest
report to shareholders, upon request and without charge.

<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this Post-Effective
Amendment No. 3/Amendment No. 4 to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Mountain View, and State of
California, on the 19th day of April, 1996. I hereby certify that this Amendment
meets the requirements for immediate effectiveness pursuant to Rule 485(b).

BENHAM INVESTMENT TRUST

By: /s/ Douglas A. Paul
Douglas A. Paul
Vice President, Secretary, and General Counsel

Pursuant to the requirements of the Securities Act of 1933, this Post-Effective
Amendment No. 3/Amendment No. 4 has been signed below by the following persons
in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
Date
<S> <C> <C>
/s/ James M. Benham Chairman of the Board of Trustees, April 19, 1996
James M. Benham* President, and Chief Executive Officer

/s/ Albert A. Eisenstat Trustee April 19, 1996
Albert A. Eisenstat*

/s/ Ronald J. Gilson Trustee April 19, 1996
Ronald J. Gilson*

/s/ Myron S. Scholes Trustee April 19, 1996
Myron S. Scholes*

/s/ Kenneth E. Scott Trustee April 19, 1996
Kenneth E. Scott*

/s/ Ezra Solomon Trustee April 19, 1996
Ezra Solomon*

/s/ Isaac Stein Trustee April 19, 1996
Isaac Stein*

/s/ James E. Stowers III Trustee April 19, 1996
James E. Stowers III*

/s/ Jeanne D. Wohlers Trustee April 19, 1996
Jeanne D. Wohlers*

/s/ Maryanne Roepke Chief Financial Officer, April 19, 1996
Maryanne Roepke* Treasurer

/s/ Douglas A. Paul
*Douglas A. Paul, Attorney in Fact
(pursuant to a Power of Attorney
dated March 4,1996).
</TABLE>

BENHAM INVESTMENT TRUST
Benham Prime Money Market Fund

1933 Act Post-Effective Amendment No. 3
1940 Act Amendment No. 4

EXHIBIT INDEX

EXHIBIT DESCRIPTION

EX-99.B1 Amended and Restated Declaration of Trust, dated June 16, 1993
and amended May 31, 1995

EX-99.B2 Amended and Restated Bylaws, dated May 17, 1995

EX-99.B4 Specimen copy of Benham Prime Money Market Fund's share
certificate is incorported herein by reference to the Trust's
Registration Statement filed on June 28, 1993.

EX-99.B5 Investment Advisory Agreement between Benham Investment Trust and
Benham Management Corporation, dated June 1, 1995

EX-99.B6 Distribution Agreement between Benham Investment Trust and Benham
Distributors, Inc., dated June 1, 1995, is incorporated herein by
reference to Post-Effective Amendment No. 6 for Benham
International Funds, filed on February 29, 1996, Accession
#880268-96-000007

EX-99.B8 Custodian Agreement between Benham Investment Trust and State
Street Bank and Trust company, dated August 10, 1993, is
incorporated herein by reference to Pre-Effective Amendment No. 1
filed on October 6, 1993

EX-99.B9 Administrative Services and Transfer Agency Agreement between
Benham Investment Trust and Benham Financial Services, Inc.,
dated June 1, 1995, is incorporated herein by reference to
Post-Effective Amendment No. 6 for Benham International Funds,
filed on February 29, 1996, Accession #880268-96-000007

EX-99.B10 Opinion and Consent of Counsel dated April 8, 1996, is
incorporated herein by reference to Rule 24f-2 Notice filed on
April 8, 1996, Accession #908409-96-000002

EX-99.B11 Consent of KPMG Peat Marwick LLP, independent auditors

EX-99.B13 Letter of Understanding relating to initial capital, dated
October 4, 1993, is incorported herein by reference to
Pre-Effective Amendment No. 1 filed on October 6, 1993

EX-99.B14a Benham Individual Retirement Account Plan dated February 1992, is
incorporated herein by reference to the Trust's Registration
Statement filed on June 28, 1993

EX-99.B14b Benham Pension/Profit Sharing Plan dated February 1992, is
incorporated herein by reference to the Trust's Registration
Statement filed on June 28, 1993

EX-99.B16 Schedule for computation of each performance quotation provided
in response to Item 22

EX-99.B17 Power of Attorney Dated March 4, 1996

TABLE OF CONTENTS

BENHAM INVESTMENT TRUST
AGREEMENT AND DECLARATION OF TRUST
(AMENDED MAY 31, 1995)

ARTICLE I Name and Definitions

1. Name
2. Definitions
(a) Trust
(b) Trustees
(c) Shares
(d) Shareholder
(e) 1940 Act
(f) Commission
(g) Declaration of Trust
(h) Bylaws
(i) Series Company
(j) Series

ARTICLE II Purpose of Trust

ARTICLE III Shares

1. Division of Beneficial Interest
2. Ownership of Shares
3. Investments in the Trust
4. Status of Shares and Limitation of Personal Liability
5. Power of Trustees to Change Provisions Relating to Shares
6. Establishment and Designation of Series
(a) Assets Belonging to Series
(b) Liabilities Belonging to Series
(c) Income, Distributions, and Redemptions
(d) Voting
(e) Equality
(f) Fractions
(g) Exchange Privilege
(h) Combination of Series
(i) Elimination of Series
7. Class Designation
8. Indemnification of Shareholders

ARTICLE IV The Trustees

1. Number, Election and Tenure
2. Effect of Death, Resignation, Etc. of a Trustee
3. Powers
4. Payment of Expenses by the Trust
5. Payment of Expenses by Shareholders
6. Ownership of Assets of the Trust
7. Service Contracts

ARTICLE V Shareholders' Voting Powers and Shareholder Meetings

1. Voting Powers
2. Shareholder Meetings
3. Quorum and Required Vote
4. Action by Written Consent
5. Record Dates
6. Additional Provisions

ARTICLE VI Net Asset Value, Distributions, and Redemptions

1. Determination of Net Asset Value, Net Income and Distributions
2. Redemptions and Repurchases
3. Redemptions at the Option of the Trust

ARTICLE VII Compensation and Limitation of Liability of Trustees

1. Compensation
2. Limitation of Liability
3. Indemnification

ARTICLE VIII Miscellaneous

1. Trustees and Shareholders Not Personally Liable; Notice
2. Trustees Good Faith Action; Expert Advice; No Bond or Surety
3. Liability of Third Persons Dealing with Trustees
4. Termination of Trust or Series
5. Merger and Consolidation
6. Filing of Copies; References; Headings
7. Applicable Law
8. Amendments
9. Trust Only
10. Use of the Name "Benham"
11. Provisions in Conflict with Law or Regulations

<PAGE>

AGREEMENT AND DECLARATION OF TRUST

BENHAM INVESTMENT TRUST

AGREEMENT AND DECLARATION OF TRUST made at Boston, Massachusetts, this 16th day
of June, 1993, by the Trustees hereunder.

WHEREAS the Trustees desire and have agreed to manage all property
coming into their hands as trustees of a Massachusetts business trust in
accordance with the provisions hereinafter set forth,

NOW, THEREFORE, the Trustees hereby direct that this Agreement and
Declaration of Trust be filed with the Secretary of The Commonwealth of
Massachusetts and do hereby declare that they will hold all cash, securities and
other assets, which they may from time to time acquire in any manner as Trustees
hereunder, IN TRUST, and manage and dispose of the same upon the following terms
and conditions for the pro rata benefit of the holders of Shares in this Trust.

ARTICLE I

NAME AND DEFINITIONS

Section 1. NAME. This Trust shall be known as BENHAM INVESTMENT TRUST
and the Trustees shall conduct the business of the Trust under that name or any
other name as they may from time to time determine.

Section 2. DEFINITIONS. Whenever used herein, unless otherwise
required by the context or specifically provided:

(a) The "Trust" refers to the Massachusetts business trust established
by this Agreement and Declaration of Trust, as amended from time to time;

(b) "Trustees" refers to the Trustees of the Trust named in Article IV
hereof or elected or appointed in accordance with such Article;

(c) "Shares" means the equal proportionate units of interest into which
the beneficial interest in the Trust property belonging to any and all Series
and Classes of the Trust (as the context may require) shall be divided from time
to time;

(d) "Shareholder" means a record owner of Shares;

(e) The "1940 Act" refers to the Investment Company Act of 1940 and the
Rules and Regulations thereunder, all as amended from time to time;

(f) The term "Commission" shall mean the United States Securities and
Exchange Commission;

(g) "Declaration of Trust" shall mean this Agreement and Declaration
of Trust, as amended or restated from time to time;

(h) "Bylaws" shall mean the Bylaws of the Trust as amended from time
to time;
(i) "Series Company" refers to the form of registered open-end
investment company described in Section 18(f)(2) of the 1940 Act or in any
successor statutory provision; and

(j) "Series" refers to each Series of Shares established and designated
under or in accordance with the provisions of Article III. Present and future
separate "Series" of the Trust may be referred to as "Portfolios" or "Funds" and
these terms may be used alternatively in publications and communications with
investors. Unless the context otherwise requires, the term "Series" shall
include Classes into which shares of the Trust, or of a Series, may be divided
from time to time.

(k) "Class" means the two or more Classes as may be established and
designated from time to time pursuant to Section 7 hereof.

ARTICLE II

PURPOSE OF TRUST

The purpose of the Trust is to provide investors a managed investment
company registered under the 1940 Act consisting of one or more Series that
invest primarily in debt or equity securities.

ARTICLE III

Section 1. DIVISION OF BENEFICIAL INTEREST. The beneficial interest in
the Trust shall at all times be divided into an unlimited number of Shares,
without par value. Subject to the provisions of Sections 6 and 7 of this Article
III, each Share shall have voting rights as provided in Article V hereof, and
holders of the Shares of any Series shall be entitled to receive dividends, when
and as declared with respect thereto in the manner provided in Article VI,
Section 1 hereof. No Shares shall have any priority or preference over any other
Share of the same Series with respect to dividends or distributions upon
termination of the Trust or of such Series made pursuant to Article VIII,
Section 4 hereof. All dividends and distributions shall be made ratably among
all Shareholders of a particular Series from the assets belonging to such Series
according to the number of Shares of such Series held of record by each
Shareholder on the record date established for any dividend or on the date of
termination, as the case my be. Shareholders shall have no preemptive or other
right to subscribe to any additional Shares or other securities issued by the
Trust or any Series. The Trustees may from time to time divide or combine the
Shares of any particular Series into a greater or lesser number of Shares of
that Series without thereby changing the proportionate beneficial interest of
the Shares of that Series in the assets belonging to that Series or in any way
affecting the rights of Shares of any other Series.

Section 2. OWNERSHIP OF SHARES. The ownership of Shares shall be
recorded on the books of the Trust or a transfer or similar agent for the Trust,
which books shall be maintained separately for the Shares of each Series. No
certificates certifying the ownership of Shares shall be issued except as the
Trustees may otherwise determine from time to time. The Trustees may make such
rules as they consider appropriate for the transfer of Shares of each Series and
similar matters. The record books of the Trust as kept by the Trust or any
transfer or similar agent, as the case may be, shall be conclusive as to who are
the Shareholders of each Series and as to the number of Shares of each Series
held from time to time by each shareholder.

Section 3. INVESTMENTS IN THE TRUST. The Trustees may accept
investments in the Trust from such persons, at such times, on such terms, and
for such consideration as they from time to time authorize.

Section 4. STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY.
Shares shall be deemed to be personal property giving only the rights provided
in this Declaration of Trust. Each Shareholder, by virtue of having become a
Shareholder, shall be held to have expressly assented and agreed to the terms
hereof and to have become a party hereto. The death of a Shareholder during the
existence of the Trust shall neither operate to terminate the Trust, nor entitle
the representative of any deceased Shareholder to an accounting or to take any
action in court or elsewhere against the Trust or the Trustees, but entitles
such representative only to the rights of said deceased Shareholder under this
Trust. Ownership of Shares shall not entitle the Shareholder to any title in or
to the whole or any part of the Trust property, other than as specified in this
Declaration of Trust, or right to call for a partition or division of the same,
or for an accounting; nor shall the ownership of Shares constitute the
Shareholders as partners. Neither the Trust nor the Trustees, nor any officer,
employee or agent of the Trust shall have any power to bind personally any
Shareholders, nor, except as specifically provided herein, to call upon any
Shareholder for the payment of any sum of money or assessment whatsoever other
than that which the Shareholder may at any time personally agree to pay.

Section 5. POWER OF TRUSTEES TO CHANGE PROVISIONS RELATING TO SHARES.
Notwithstanding any other provision of this Declaration of Trust and without
limiting the power of the Trustees to amend the Declaration of Trust as provided
elsewhere herein, the Trustees shall have the power to amend this Declaration of
Trust, at any time and from time to time, in such manner as the Trustees may
determine in their sole discretion, without Shareholder approval, to add to,
delete, replace, or otherwise modify any provisions relating to the Shares
issued pursuant to this Declaration of Trust, provided that before adopting any
such amendment without Shareholder approval, the Trustees shall determine that
it is consistent with the fair and equitable treatment of all Shareholders or
that Shareholder approval is not otherwise required by the 1940 Act or other
applicable law.

Without limiting the generality of the foregoing, the Trustees may, for
the above-stated purposes, amend this Declaration of Trust to:

(a) create one or more Series of Shares (in addition to any Series
already existing or otherwise) with such rights and preferences and such
eligibility requirements for investment as the Trustees shall determine, and
reclassify any or all outstanding Shares as shares of particular Series in
accordance with such eligibility requirements;

(b) amend any of the provisions set forth in paragraphs (a) through (i)
of Section 6 and paragraphs (a) through (d) of Section 7 of this Article III;

(c) combine one or more Series of Shares into a single Series on such
terms and conditions as the Trustees shall determine;

(d) change or eliminate any eligibility requirements for investment in
Shares of any Series, including without limitation, to provide for the issue of
Shares of any Series in connection with any merger or consolidation of the Trust
with another trust or company or any acquisition by the Trust of part or all of
the assets of another trust or investment company;

(e) change the designation of any Series of Shares;

(f) change the method of allocating dividends among the various Series
of Shares;

(g) allocate any specific assets or liabilities of the Trust or any
specific items of income or expense of the Trust to one or more Series of
Shares;

(h) specifically allocate assets to any or all Series of Shares or
create one or more additional Series of Shares which are preferred over all
other Series of Shares in respect of assets specifically allocated thereto or
any dividends paid by the Trust with respect to any net income, however
determined, earned from the investment and reinvestment of any assets so
allocated or otherwise and provide for any special voting or other rights with
respect to such Series.

Section 6. ESTABLISHMENT AND DESIGNATION OF SERIES. The establishment
and designation of any Series of Shares shall be effective upon the resolution
by a majority of the Trustees, setting forth such establishment and designation
and the relative rights and preferences of such Series, or as otherwise provided
in such resolution.

Shares of each Series established pursuant to this Section 6, unless
otherwise provided in the resolution establishing such Series, shall have the
following relative rights and preferences:

(a) ASSETS BELONGING TO SERIES. All consideration received by the Trust
for the issue or sale of Shares of a particular Series, together with all assets
in which such consideration is invested or reinvested, all income, earnings,
profits, and proceeds thereof from whatever source derived, including, without
limitation, any proceeds derived from the sale, exchange, or liquidation of such
assets, and any funds or payments derived from any reinvestment of such proceeds
in whatever form the same may be, shall irrevocably belong to that Series for
all purposes, subject only to the rights of creditors, shall be so recorded upon
the books of account of the Trust, and are herein referred to as "assets
belonging to" that Series. In the event that there are any assets, income,
earnings, profits and proceeds thereof, funds, or payments that are not readily
identifiable as belonging to any particular Series (collectively "General
Assets"), the Trustees shall allocate such General Assets to, between, or among
any one or more of, the Series in such manner and on such basis as they, in
their sole discretion, deem fair and equitable, and any General Assets so
allocated to a particular Series shall belong to that Series. Each such
allocation by the Trustees shall be conclusive and binding upon the Shareholders
of all Series for all purposes.

(b) LIABILITIES BELONGING TO SERIES. The assets belonging to each
particular Series shall be charged with the liabilities of the Trust with
respect to that Series and all expenses, costs, charges, and reserves
attributable to that Series. Any general liabilities of the Trust which are not
readily identifiable as belonging to any particular Series shall be allocated
and charged by the Trustees to and among any one or more of the Series in such
manner and on such basis as the Trustees in their sole discretion deem fair and
equitable. The liabilities, expenses, costs, charges, and reserves so charged to
a Series are herein referred to as "liabilities belonging to" that Series. Each
allocation of liabilities, expenses, costs, charges and reserves by the Trustee
shall be conclusive and binding upon the holders of all Series for all purposes.
Under no circumstances shall the assets allocated or belonging to any particular
Series be charged with liabilities attributable to any other Series. All persons
who have extended credit which has been allocated to particular Series, or who
have a claim or contract which has been allocated to any particular Series,
shall look only to the assets of that particular Series for payment of such
credit, claim, or contract.

(c) INCOME, DISTRIBUTIONS, AND REDEMPTIONS. The Trustees shall have
full discretion, to the extent consistent with the 1940 Act, to determine which
items shall be treated as income and which items as capital; and each such
determination and allocation shall be conclusive and binding upon the
Shareholders. Notwithstanding any other provision of this Declaration of Trust,
including, without limitation, Article VI, no dividend or distribution
(including, without limitation, any distribution paid upon termination of the
Trust or of any Series) with respect to, nor any redemption or repurchase of,
the Shares of any Series shall be effected by the Trust other than from the
assets belonging to such Series. Except as specifically provided in Section 7 of
this Article III, no Shareholder of any particular Series shall otherwise have
any right or claim against the assets belonging to any other Series except to
the extent that such Shareholder has such a right or claim hereunder as a
Shareholder of such other Series.

(d) The Trustees may from time to time establish conditions according
to which the several Series shall have separate voting rights. If any Series
would not, in the Trustees' sole judgment, be materially affected by a proposal,
the Trustees may determine that such Series shall have no rights to vote on such
proposal. Until Shares are issued, the Trustees may exercise all rights of
Shareholders and may take any action required by law, this Declaration of Trust,
or the Bylaws, to be taken by Shareholders. The Bylaws may include further
provisions regarding Shareholder voting, meetings, and related matters.

(e) EQUALITY. All the Shares of each particular Series shall represent
an equal proportionate interest in the assets belonging to that Series (subject
to the liabilities belonging to that Series), and each Share of any particular
Series shall be equal to each other Share of that Series.

(f) FRACTIONS. Any fractional Share of a Series shall carry all the
rights and obligations of a whole share of that Series, including rights with
respect to voting, receipt of dividends and distributions, redemption of Shares
and termination of the Trust proportionate to its value in relation to a whose
share of that Series.

(g) EXCHANGE PRIVILEGE. The Trustees shall have the authority to
provide that the holders of Shares of any Series shall have the right to
exchange said Shares for Shares of one or more other Series of Shares in
accordance with such requirements and procedures as may be established by the
Trustees.

(h) COMBINATION OF SERIES. The Trustees shall have the authority,
without the approval of the Shareholders of any Series unless otherwise required
by applicable law, to combine the assets and liabilities belonging to any two or
more Series into assets and liabilities belonging to a single Series.

(i) ELIMINATION OF SERIES. If at any time there are no Shares
outstanding of any particular Series previously established and designated, the
Trustees may eliminate such Series in their sole discretion.

Section 7. CLASS DESIGNATION. The Trustees, in their discretion, may
authorize the division of the Shares of the Trust, or, if any Series be
established, the Shares of any Series, into two or more Classes, and the
different Classes shall be established and designated, and the variations in the
relative rights and preferences as between the different Classes shall be fixed
and determined, by the Trustees; provided, that all Shares of the Trust or of
any Series shall be identical to all other Shares of the Trust or the same
Series, as the case may be, except that there may be variations between
different Classes as to allocation of expenses, right of redemption, special and
relative rights as to dividends and on liquidation, conversion rights, and
conditions under which the several Classes shall have separate voting rights.
All references to Shares in this Declaration of Trust shall be deemed to be
Shares of any or all Classes as the context may require.

If the Trustees shall divide the Shares of the Trust or any Series into
two or more Classes, the following provisions shall be applicable:

(a) All provisions herein relating to the Trust, or any Series of the
Trust, shall apply equally to each Class of Shares of the Trust or of any Series
of the Trust, except as the context requires otherwise.

(b) The number of Shares of each Class that may be issued shall be
unlimited. The trustees may classify or reclassify any unissued Shares of the
Trust or any Series or any Shares previously issued and reacquired of any Class
of the Trust or of any Series into one or more Classes that may be established
and designated from time to time. The Trustees may hold as treasury Shares (of
the same or some other Class), reissue for such consideration and on such terms
as they may determine, or cancel any Shares of any Class reacquired by the Trust
at their discretion from time to time.

(c) Liabilities, expenses, costs, charges, and reserves related to the
distribution of, and other identified expenses that should properly be allocated
to, the Shares of a particular Class may be charged to and borne solely by such
Class and the bearing of expenses solely by a Class of Shares may be
appropriately reflected (in a manner determined by the Trustees) and cause
differences in the net asset value attributable to, and the dividend,
redemption, and liquidation rights of, the Shares of different Classes. Each
allocation of liabilities, expenses, costs, charges, and reserves by the
Trustees shall be conclusive and binding upon the Shareholders of all Classes
for all purposes.

(d) The establishment and designation of any Class of Shares shall be
effective upon the execution of a majority of the Trustees of an instrument
setting forth such establishment and designation and the relative rights and
preferences of such Class, or as otherwise provided in such instrument. The
Trustees may, by an instrument executed by a majority of their number, abolish
any Class and the establishment and designation thereof. Each instrument
referred to in this paragraph shall have the status of an amendment to this
Declaration of Trust.

Section 8. INDEMNIFICATION OF SHAREHOLDERS. If any Shareholder or
former Shareholder shall be held personally liable solely by reason of his or
her being or having been a Shareholder and not because of his or her acts or
omissions or for some other reasons, the Shareholder or former Shareholder (or
his or her heirs, executors, administrators, or other legal representatives or,
in the case of a corporation or other entity, its corporate or other general
successor) shall be entitled out of the assets of the Series of which he or she
is (or was) a Shareholder, to be held harmless from and indemnified against all
loss and expense arising from such liability.

ARTICLE IV

THE TRUSTEES

Section 1. NUMBER, ELECTION, AND TENURE. The number of Trustees shall
be such number as shall be fixed from time to time by a written instrument
signed by a majority of the Trustees, provided, however, that the number of
Trustees shall in no event be less than two nor more than fifteen. The initial
Trustees shall be John T. Kataoka and Douglas A. Paul. The Trustees may, by vote
of a majority of the remaining Trustees, fill vacancies on the Board of Trustees
or remove Trustees with or without cause, by vote of a majority of the Trustees
who are not "interested persons" (as defined in the 1940 Act) if the Trustee to
be removed is not an "interested" Trustee, or by vote of the Trustees who are
"interested persons," if the Trustee to be removed is an "interested" Trustee.
Each Trustee shall serve during the lifetime of the Trust until he dies,
resigns, or is removed, or, if sooner, until the next meeting of Shareholders
called for the purpose of electing Trustees and until the election and
qualification of his successor, except, that Trustees who are not "interested
persons" or employees of The Benham Group of companies shall retire at the end
of the calendar year in which they shall have reached the age of seventy-five
(75) years. Any Trustee may resign at any time by written instrument signed by
him and delivered to any officer of the Trust or to a meeting of the Trustees.
Such resignation shall be effective upon receipt unless otherwise specified in
such written instrument. Except to the extent expressly provided in a written
agreement with the Trust, no Trustee resigning and no Trustee removed shall have
any right to any compensation for any period following his resignation or
removal, or any right to damages on account of such removal. The Shareholders
may fix the number of Trustees and elect Trustees at any meeting of Shareholders
called by the Trustees for that purpose.

Section 2. EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE. The death,
declination, resignation, retirement, removal, or incapacity of the Trustees, or
any of them, shall not operate to annul the Trust or to revoke any existing
agency created pursuant to the terms of this Declaration of Trust. Whenever a
vacancy on the Board of Trustees shall occur, until such vacancy is filled as
provided in Article IV, Section 1, the Trustees in office, regardless of their
number, shall have all of the powers granted to the Trustees and shall discharge
all the duties imposed upon the Trustees by this Declaration of Trust. A written
instrument certifying the existence of such vacancy signed by a majority of the
Trustees shall be conclusive evidence of such vacancy. In the event of the
death, declination, resignation, retirement, removal, or incapacity of all of
the Trustees within a short period of time and without the opportunity for at
least one Trustee to appoint additional Trustees to fill vacancies, the Trust's
investment advisor or investment advisors jointly, if there is more than one,
are empowered to appoint new Trustees.

Section 3. POWERS. Subject to the provisions of this Declaration of
Trust, the business of the Trust shall be managed by the Trustees, and they
shall have all powers necessary or convenient to carry out that responsibility,
including the power to engage in securities transactions of all kinds on behalf
of the Trust. Without limiting the foregoing, the Trustees may adopt Bylaws not
inconsistent with this Declaration of Trust providing for the regulation and
management of the affairs of the Trust and may amend and repeal such Bylaws to
the extent that any amendments do not result in reserving the right to amend
this Declaration of Trust and do not reserve that right to the Shareholders;
they may fill vacancies in or reduce the number of Trustees, and may elect and
remove such officers and appoint and terminate such agents as they consider
appropriate. They may appoint from their own number and establish and terminate
one or more committees consisting of two or more Trustees which may exercise the
powers and authority of the Trustees to the extent that the Trustees determine.
They may employ one or more custodians of the assets of the Trust and may
authorize such custodians to employ subcustodians and to deposit all or any part
of such assets in a system or systems for the central handling of securities or
with a Federal Reserve Bank. They may retain a transfer or shareholder servicing
agent, or both, provide for the distribution of Shares by the Trust, through one
or more principal underwriters or otherwise, set record dates for the
determination of eligible Shareholders with respect to various matters, and, in
general, to delegate such authority as they consider desirable to any officer of
the Trust, to any committee of the Trustees, and to any agent or employee of the
Trust or to any such custodian, transfer or Shareholder servicing agent, or
principal underwriter. Any determination as to what is in the best interest of
the Trust made by the Trustees in good faith shall be conclusive. In construing
the provisions of this Declaration of Trust, the presumption shall be in favor
of a grant of power to the Trustees.

Without limiting the foregoing, the Trustees shall have power and
authority:

(a) To invest and reinvest cash, to hold cast uninvested, and to
subscribe for, invest in, reinvest in, purchase or otherwise acquire, own, hold,
pledge, sell, assign, transfer, exchange, distribute, lend or otherwise deal in
or dispose of contracts for the future acquisition or delivery of fixed income
securities or certificates of deposit or indebtedness, commercial paper,
repurchase agreements, bankers acceptances, and other securities of any kind,
issued, created, guaranteed, or sponsored by any and all persons, including,
without limitation, states, territories, and possessions of the United States
and the District of Columbia and any political subdivision, agency, or
instrumentality of the U.S. Government, any foreign government or any political
subdivision of the U.S. Government or any foreign government, or any
international or supranational instrumentality, or by any bank or savings
institution, or by any corporation or organization organized under the laws of
the United States or of any state, territory, or possession thereof, or by any
corporation or organization organized under any foreign law, or in "when issued"
contracts for any such securities; to change the investments of the assets of
any Series of the Trust; and to exercise any and all rights, powers and
privileges of ownership or interest in respect of any and all such investments
of every kind and description, including, without limitation, the right to
consent and otherwise act with respect thereto, and with power to designate one
or more persons, firms, associations, or corporations to exercise any of said
rights, powers, and privileges in respect of any of said instruments;

(b) To sell, exchange, lend, pledge, mortgage, hypothecate, lease, or
write options with respect to or otherwise deal in any property rights relating
to any or all of the assets of the Trust;

(c) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property, and to execute and deliver
proxies or powers of attorney to such person or persons as the Trustees shall
deem proper, granting to such person or persons such power and discretion with
relation to securities or property as the Trustees shall deem proper;

(d) To exercise powers and rights of subscription or otherwise which in
any manner arise out of ownership of securities;

(e) To hold any security or property, whether in bearer, unregistered,
or any other negotiable form, or in its own name or in the name of a custodian
or subcustodian or a nominee or nominees or otherwise;

(f) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or issuer of any security which is
held in the Trust; to consent to any contract, lease, mortgage, purchase or sale
of property by such corporation or issuer; and to pay calls or subscriptions
with respect to any security held in the Trust;

(g) To join with other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection to deposit any
security with, or transfer any security to, any such committee, depositary or
trustee, and to delegate to them such power and authority with relation to any
security (whether or not so deposited or transferred) as the Trustees shall deem
proper, and to agree to pay, and to pay, such portion of the expenses and
compensation of such committee, depositary or trustee as the Trustees shall deem
proper;

(h) To compromise, arbitrate or otherwise adjust claims in favor of or
against the Trust or any matter in controversy, including but not limited to
claims for taxes;

(i) To enter into joint ventures, general or limited partnerships and
any other combinations or associations;

(j) To borrow funds or other property;

(k) To endorse or guarantee the payment of any notes or other
obligations of any person; to make contracts of guaranty or suretyship, or
otherwise assume liability for payment thereof;

(l) To purchase and pay for entirely out of Trust property such
insurance as they may deem necessary or appropriate for the conduct of the
Trust's business, including, without limitation, insurance policies insuring the
assets of the Trust or payment of distributions and principal on its portfolio
investments, and insurance policies insuring the Shareholders, Trustees,
officers, employees, agents, investment advisors, principal underwriters, or
independent contractors of the Trust, individually against all claims and
liabilities of every nature arising by reason of holding, being, or having held
any such office or position, or by reason of any action alleged to have been
taken or omitted by any such person as Trustee, officer, employee, agent,
investment advisor, principal underwriter, or independent contractor, including
any action taken or omitted that may be determined to constitute negligence,
whether or not the Trust would have the power to indemnify such person against
liability; and

(m) to pay pensions as deemed appropriate by the Trustees and to adopt,
establish and carry out pension, profit-sharing, share bonus, share purchase,
savings, thrift and other retirement, incentive and benefit plans, trusts and
provisions, including the purchasing of life insurance and annuity contracts as
a means of providing such retirement and other benefits, for any or all of the
Trustees, officers, employees, and agents of the Trust.

The Trustees shall not be limited to investing in obligations maturing
before the possible termination of the Trust. The Trustees shall not in any way
be bound or limited by any present or future law or custom in regard to
investment by fiduciaries. The Trustees shall not be required to obtain any
court order to deal with any assets of the Trust or take any other action
hereunder.

Section 4. PAYMENT OF EXPENSES BY THE TRUST. The Trustees are
authorized to pay or cause to be paid out of the principal or income of the
Trust, or partly out of the principal and partly out of income, as they deem
fair, all expenses, fees, charges, taxes, and liabilities incurred or arising in
connection with the Trust, or in connection with the management thereof,
including, but not limited to, the Trustees' compensation, and such expenses and
charges for the services of the Trust's officers, employees, investment advisor
or manager, principal underwriter, auditors, counsel, custodian, transfer agent,
shareholder servicing agent, and such other agents or independent contractors
and such other expenses and charges as the Trustees may deem necessary or proper
to incur.

Section 5. PAYMENT OF EXPENSES BY SHAREHOLDERS. The Trustees shall have
the power, as frequently as they may determine, to cause each Shareholder, or
each Shareholder of any particular Series, to pay directly, in advance or
arrears, for charges of the Trust's custodian or transfer, shareholder servicing
or similar agent, an amount fixed from time to time by the Trustees, by setting
off such charges due from such Shareholder from declared but unpaid dividends
owed such Shareholder and/or by reducing the number of shares in the account of
such Shareholder by that number of full and/or fractional Shares which
represents the outstanding amount of such charges due from such Shareholder.

Section 6. OWNERSHIP OF ASSETS OF THE TRUST. Title to all of the
assets of the Trust shall at all times be considered as vested in the Trustees.

Section 7. SERVICE CONTRACTS.

(a) Subject to such requirements and restrictions as may be set forth
in the Bylaws, the Trustees may, at any time and from time to time, contract for
exclusive or nonexclusive advisory and/or management services for the Trust or
for any Series with Benham Management Corporation or any other corporation,
trust, association, or other organization (the "Advisor"); and any such contract
may contain such other terms as the Trustees may determine, including without
limitation, authority for the Advisor to determine from time to time without
prior consultation with the Trustees what investments shall be purchased, held,
sold, or exchanged and what portion, if any, of the assets of the Trust shall be
held uninvested, and to make changes in the Trust's investments.

(b) The Trustees may also, at any time and from time to time, contract
with any corporation, trust, association, or other organization, appointing it
exclusive or nonexclusive distributor or principal underwriter for the Shares of
any, some, or all of the Series. Every such contract shall comply with such
requirements and restrictions as may be set forth in the Bylaws; and any such
contract may contain such other terms as the Trustees may determine.

(c) The Trustees are also empowered, at any time and from time to time,
to contract with any corporations, trust, associations, or other organizations,
appointing it or them the transfer agent(s) and/or shareholders servicing
agent(s) of the Trust or one or more of the Series. Specifically, the Trustees
are empowered to contract or join with other investment companies managed by the
Trust's Investment Advisor to have transfer agency and/or shareholder servicing
activities performed jointly by such transfer agents or shareholder servicing
agents and their employees with an appropriate allocation between the investment
companies of the costs and expenses of providing such services. Each such
contract shall comply with such requirements and restrictions as may be set
forth in the Bylaws or stipulated by resolution of the Trustees.

(d) The fact that:

(i) any of the Shareholders, Trustees, or officers of the Trust is
a shareholder, director, officer, partner, trustee, employee,
manager, advisor, principal underwriter, distributor or affiliate
or agent of or for any corporation, trust, association, or other
organization, or for any parent or affiliate of any organization
with which an advisory or management contract, or principal
underwriter's or distributor's contract, or transfer, shareholder
servicing or other agency contract may have been or may hereafter
be made, or that any such organization, or any parent or affiliate
thereof, is a Shareholder or has an interest in the Trust, or that

(ii) any corporation, trust, association or other organization with
which an advisory or management contract or principal underwriter's
or distributor's contract, or transfer, shareholder servicing or
other agency contract may have been or may hereafter be made also
has an advisory or management contract, or principal underwriter's
or distributor's contract, or transfer, shareholder servicing or
other agency contract with one or more other corporations, trusts,
associations, or other organizations, or has other business or
interests,

shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee, or officer of the Trust from voting upon or executing the
same or create any liability or accountability to the Trust or its Shareholders.

ARTICLE V

SHAREHOLDERS' VOTING POWERS AND SHAREHOLDER MEETINGS

Section 1. VOTING POWERS. Subject to the provisions of Article III,
Section 6(d), the Shareholders shall have power to vote only (i) for the
election of Trustees as provided in Article IV, Section 1, (ii) to the same
extent as the stockholders of a California business corporation as to whether or
not a court action, proceeding, or claim should or should not be brought or
maintained derivatively or as a class action on behalf of the Trust or the
Shareholders, (iii) with respect to the termination of the Trust or any Series
to the extent as provided in Article VIII, Section 4, and (iv) with respect to
such additional matters relating to the Trust as may be required by this
Declaration of Trust, the Bylaws or any registration of the Trust with the
Commission (or any successor agency) or any state, or as the Trustees may
consider necessary or desirable. A Shareholder of each Series shall be entitled
to one vote for each dollar of net asset value per Share of such Series, on any
matter on which such Shareholder is entitled to vote and each fractional dollar
amount shall be entitled to a proportionate fractional vote. All references in
this Declaration of Trust or the Bylaws to a vote of or the holders of a
percentage of Shares shall mean a vote of, or the holders of, that percentage of
total votes representing dollars of net asset value of a Series or of the Trust,
as the case may be. (amended 5/31/95 s/h mtg.) There shall be no cumulative
voting in the election of Trustees. Shares may be voted in person or by proxy. A
proxy with respect to Shares held in the name of two or more persons shall be
valid if executed by any one of them unless at or prior to exercise of the proxy
the Trust receives a specific written notice to the contrary from any one of
them. A proxy purporting to be executed by or on behalf of a Shareholder shall
be deemed valid unless challenged at or prior to its exercise, and the burden of
proving invalidity shall rest on the challenger. At any time when no Shares of a
Series are outstanding, the Trustees may exercise all rights of Shareholders of
that Series with respect to matters affecting that Series, and may take any
action required by law, this Declaration of Trust or the Bylaws to be taken by
the Shareholders.

Section 2. SHAREHOLDER MEETINGS. Shareholder meetings may be called by
the Trustees for the purpose of electing Trustees as provided in Article IV,
Section 1, and for such other purposes as may be prescribed by law, by this
Declaration of Trust, or by the Bylaws. Shareholder meetings may also be called
by the Trustees from time to time for the purpose of taking action upon any
other matter deemed by the Trustees to be necessary or desirable. A meeting of
Shareholders may be held at any place designated by the Trustees. Written notice
of any meeting of Shareholders shall be given or caused to be given by the
Trustees by mailing such notice at least seven days before such meeting, postage
prepaid, stating the time and place of the meeting, to each Shareholder at the
Shareholder's address as it appears on the records of the Trust. Whenever notice
of a meeting is required to be given to a Shareholder under this Declaration of
Trust or the Bylaws, a written waiver thereof, executed before or after the
meeting by such Shareholder or by his attorney thereunto authorized, and filed
with the records of the meeting, shall be deemed equivalent to such notice.

Section 3. QUORUM AND REQUIRED VOTE. Except when a larger quorum is
required by applicable law, by the Bylaws, or by this Declaration of Trust,
forty percent (40%) of the Shares entitled to vote shall constitute a quorum at
a Shareholders' meeting. When any one or more Series is to vote as a single
Class separate from other Shares which are to vote on the same matters, forty
percent (40%) of the Shares of each such Series entitled to vote shall
constitute a quorum at a Shareholder meeting of that Series. Any Shareholder
meeting may be adjourned from time to time by a majority of the votes properly
cast upon the question, whether or not a quorum is present, and the meeting may
be held as adjourned within a reasonable time after the date set for the
original meeting without further notice. Subject to the provisions of Article
III, Section 6(d), when a quorum is present at any meeting, a majority of the
Shares voted shall decide any questions, and a plurality shall elect a Trustee,
except when a larger vote is required by any provision of this Declaration of
Trust, the Bylaws, or applicable law.

Section 4. ACTION BY WRITTEN CONSENT. Any action permitted to be taken
by Shareholders may be taken without a meeting if Shareholders holding a
majority of the Shares entitled to vote on the matter (or such larger proportion
thereof as shall be required by any express provision of this Declaration of
Trust or by the Bylaws) consent to the action in writing, and such written
consents are filed with the records of the Trust. Such consent shall be treated
for all purposes as a vote taken at a meeting of Shareholders.

Section 5. RECORD DATES. For the purpose of determining the
Shareholders of any Series who are entitled to vote or act at any meeting or any
adjournment thereof, the Trustees may from time to time fix a time, which shall
be not more than 75 days before the date of any meeting of Shareholders, as the
record date for determining the Shareholders of such Series having the right to
notice of and to vote at such meeting and any adjournment thereof. In such case,
only Shareholders of record on such record date shall have such right,
notwithstanding any transfer of shares on the books of the Trust after the
record date. For the purpose of determining the Shareholders of any Series who
are entitled to receive payment of any dividend or of any other distribution,
the Trustees may from time to time fix a date, which shall be before the date
for the payment of such dividend or such other payment, as the record date for
determining the Shareholders of such Series having the right to receive such
dividend or distribution. Without fixing a record date the Trustees may for
voting and/or distribution purposes close the register or transfer books for one
or more Series for all or any part of the period between a record date and a
meeting of Shareholders or the payment of a distribution. Nothing in this
section shall be construed as precluding the Trustees from setting different
record dates for different Series.

Section 6. ADDITIONAL PROVISIONS. The Bylaws may include further
provisions concerning Shareholder voting, Shareholder meetings, and related
matters.

ARTICLE VI

NET ASSET VALUE, DISTRIBUTIONS, AND REDEMPTIONS

Section 1. DETERMINATION OF NET ASSET VALUE, NET INCOME, AND
DISTRIBUTIONS. Subject to Article III, Sections 6 and 7 hereof, the Trustees, in
their absolute discretion, as they may deem necessary or desirable, may
prescribe and shall set forth in the Bylaws or in a duly adopted resolution the
manner of determining the net income attributable to the Shares of any Series or
of any Class, and the declaration and payment of dividends and distributions on
the Shares of any Series or Class.

Section 2. REDEMPTIONS AND REPURCHASES. The Trust shall purchase such
Shares as are offered by any Shareholder for redemption, upon the presentation
of a proper instrument of transfer together with a request directed to the Trust
or a person designated by the Trust that the Trust purchase such Shares or in
accordance with such other procedures for redemption as the Trustees may from
time to time authorize; and the Trust will pay therefor the net asset value
thereof, as determined in accordance with the 1940 Act, and with any other
applicable provisions of law or of the Bylaws. Payment for said Shares shall be
made by the Trust to the Shareholder within seven days after the date on which
the request is made in proper form. The obligation set forth in this Section 2
may be suspended or postponed by the Trustees in the event that any time the New
York Stock Exchange is closed for other than weekends or holidays, or if
permitted by the rules of the Commission, during periods when trading on the
Exchange is restricted or during any emergency which makes it impracticable for
the Trust to dispose of the investments of the applicable Series or to determine
fairly the value of the net assets belonging to such Series, or during any other
period permitted by order of the Commission for the protection of investors.

Section 3. REDEMPTIONS AT THE OPTION OF THE TRUST. The Trust shall have
the right at its option and at any time to redeem Shares of any Shareholder at
the net asset value thereof as described in Section 1 of this Article VI: (i) if
at such time such Shareholder owns Shares of any Series having an aggregate net
asset value of less than an amount determined from time to time by the Trustees;
or (ii) to the extent that such Shareholder owns Shares equal to or in excess of
a percentage of the outstanding Shares of the Trust or of any Series, as such
percentage may be determined from time to time by the Trustees.

ARTICLE VII

COMPENSATION AND LIMITATION OF LIABILITY OF TRUSTEES

Section 1. COMPENSATION. The Trustees shall be entitled to reasonable
compensation from the Trust, and they may fix the amount of such compensation.
Nothing herein shall in any way prevent the employment of any Trustee for
advisory, management, legal, accounting, investment banking or other services
and payment for the same by the Trust.

Section 2. LIMITATION OF LIABILITY. The Trustees shall not be
responsible or liable in any event for any neglect or wrongdoing of any officer,
agent, employee, manager, or principal underwriter of the Trust, nor shall any
Trustee be responsible for the acts or omissions of any other Trustee, but
nothing herein contained shall protect any Trustee against any liability to
which he would otherwise be subject by reason of wilful misfeasance, bad faith,
gross negligence, or reckless disregard of the duties involved in the conduct of
his office.

Every note, bond, contract, instrument, certificate or undertaking and
every other act or thing whatsoever issued, executed, or done by or on behalf of
the Trust or the Trustees or any of them in connection with the Trust shall be
conclusively deemed to have been issued, executed, or done only in or with
respect to their or his or her capacity as Trustees or Trustee, and such
Trustees or Trustee shall not be personally liable thereon.

Section 3. INDEMNIFICATION. The Trustees shall be entitled and
empowered to the fullest extent permitted by law to purchase insurance for and
to provide by resolution or in the Bylaws for indemnification out of Trust
assets for liability and for all expenses reasonably incurred or paid or
expected to be paid by a Trustee or officer in connection with any claim,
action, suit, or proceeding in which he or she becomes involved by virtue of his
or her capacity or former capacity with the Trust. The provisions, including any
exceptions and limitations concerning indemnification, may be set forth in
detail in the Bylaws or in a resolution adopted by the Board of Trustees.

ARTICLE VIII

MISCELLANEOUS

Section 1. TRUSTEES AND SHAREHOLDERS NOT PERSONALLY LIABLE; NOTICE. All
persons extending credit to, contracting with, or having any claim against the
Trust or any Series shall look only to the assets of the Trust, or, to the
extent that the liability of the Trust may have been expressly limited by
contract to the assets of a particular Series, only to the assets belonging to
the relevant Series, for payment under such credit, contract or claim; and
neither the Shareholders nor the Trustees, nor any of the Trust's officers,
employees or agents, whether past, present or future, shall be personally liable
therefor. Nothing in this Declaration of Trust shall protect any Trustee against
any liability to which such Trustee would otherwise be subject by reason of
wilful misfeasance, bad faith, gross negligence, or reckless disregard of the
duties involved in the conduct of the office of Trustee.

Every note, bond, contract, instrument, certificate, or undertaking
made or issued on behalf of the Trust by the Trustees, by an officer or officers
or otherwise may include a notice that this Declaration of Trust is on file with
the Secretary of the Commonwealth of Massachusetts and may recite that the note,
bond, contract, instrument, certificate, or undertaking was executed or made by
or on behalf of the Trust or by them as Trustee or Trustees or as officer or
officers or otherwise and not individually and that the obligations of such
instrument are not binding upon any of them or the Shareholders individually but
are binding only upon the assets and property of the Trust or upon the assets
belonging to the Series for the benefit of which the Trustees have caused the
note, bond, contract instrument, certificate, or undertaking to be made or
issued, and may contain such further recital as he or they may deem appropriate,
but the omission of any such recital shall not operate to bind any Trustee or
Trustees or officer or officers or Shareholders or any other person
individually.

Section 2. TRUSTEE'S GOOD FAITH ACTION; EXPERT ADVICE; NO BOND OR
SURETY. The exercise by the Trustees of their powers and discretions hereunder
shall be binding upon everyone interested. A Trustee shall be liable for his own
wilful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the office of Trustee, and for nothing else,
and shall not be liable for errors of judgment or mistakes of fact or law. The
Trustees may take advice of counsel or other experts with respect to the meaning
and operation of this Declaration of Trust, and shall be under no liability for
any act or omission in accordance with such advice or for failing to follow such
advice. The Trustees shall not be required to give any bond as such, nor any
surety if a bond is required.

Section 3. LIABILITY OF THIRD PERSONS DEALING WITH TRUSTEES. No person
dealing with the Trustees shall be bound to make any inquiry concerning the
validity of any transaction made or to be made by the Trustees or to see to the
application of any payments made or property transferred to the Trust or upon
its order.

Section 4. TERMINATION OF TRUST OR SERIES. Unless terminated as
provided herein, the Trust shall continue indefinitely. The Trust may be
terminated at any time by vote of at least two-thirds (66-2/3%) of the Shares of
each Series entitled to vote, voting separately by Series, or by the Trustees by
written notice to the Shareholders. Any Series may be terminated at any time by
vote of at least two-thirds (66-2/3%) of the Shares of that Series or by the
Trustees by written notice to the Shareholders of that Series.

Upon termination of the Trust (or any Series, as the case may be),
after paying or otherwise providing for all charges, taxes, expenses, and
liabilities belonging, severally, to each Series (or to the applicable Series,
as the case may be), whether due or accrued or anticipated as may be determined
by the Trustees, the Trust shall, in accordance with such procedures as the
Trustees consider appropriate, reduce the remaining assets belonging, severally,
to each Series (or the applicable Series, as the case may be), to distributable
form in cash or shares or other securities, or any combination thereof, and
distribute the proceeds belonging to each Series or the applicable Series, as
the case may be), to the Shareholders of that Series, as a Series, ratably
according to the number of Shares of that Series held by each Shareholder on the
date of termination.

Section 5. MERGER AND CONSOLIDATION. The Trustees may cause the Trust
or one or more of its Series to be merged into or consolidated with another
Trust or company or the Shares exchanged under or pursuant to any state or
federal statute, if any, or otherwise to the extent permitted by law. Such
merger or consolidation or share exchange must be authorized by vote of a
majority of the outstanding Shares of the Trust as a whole or any affected
Series, as applicable; provided that in all respects not governed by statute or
applicable law, the Trustees shall have power to prescribe the procedure
necessary or appropriate to accomplish an exchange, sale of assets, merger or
consolidation.

Section 6. FILING OF COPIES; REFERENCES; HEADINGS. The original or a
copy of this Declaration of Trust and of each amendment hereto shall be kept at
the office of the Trust where it may be inspected by any Shareholder. A copy of
this instrument and of each amendment hereto shall be filed by the Trust with
the Secretary of the Commonwealth of Massachusetts and with any other
governmental office where such filing may from time to time be required. Anyone
dealing with the Trust may rely on a certificate by an officer of the Trust as
to whether or not any such amendments have been made and as to any matters in
connection with the Trust hereunder; and, with the same effect as if it were the
original, may rely on a copy certified by an officer of the Trust to be a copy
of this Declaration of Trust, or of any such amendments. In this Declaration of
Trust and in any such amendment, references to this Declaration of Trust, and
all expressions like "herein," "hereof" and "hereunder," shall be deemed to
refer to this Declaration of Trust as amended or affected by any such
amendments. Headings are placed herein for convenience of reference only and
shall not be taken as a part hereof or control or affect the meaning,
construction or effect of this Declaration of Trust. This Declaration of Trust
may be executed in any number of counterparts each of which shall be deemed an
original.

Section 7. APPLICABLE LAW. This Declaration of Trust is created under
and is to be governed by and construed and administered according to the laws of
the Commonwealth of Massachusetts. The Trust shall be of the type commonly
called a Massachusetts business trust, and without limiting the provisions
hereof, the Trust may exercise all powers which are ordinarily exercised by such
a trust.

Section 8. AMENDMENTS. This Declaration of Trust may be amended at any
time by an instrument in writing signed by a majority of the Trustees.

Section 9. TRUST ONLY. It is the intention of the Trustees to create
only the relationship of trustee and beneficiary between the Trustees and each
Shareholder from time to time. It is not the intention of the Trustees to create
a general partnership, limited partnership, joint stock association,
corporation, bailment, or any form of legal relationship other than a trust.
Nothing in this Declaration of Trust shall be construed to make the
Shareholders, either by themselves or with the Trustees, partners or members of
a joint stock association.

Section 10. USE OF THE NAME "BENHAM". Benham Management Corporation
("BMC") has consented to the Trust's use of the identifying word or name
"Benham" in the Trust's name. Such consent is conditioned upon the employment of
BMC, its successors or any affiliate thereof, as the Advisor of the Trust. As
between the Trust and itself, BMC controls the use of the Trust's name insofar
as such name contains the name and identifying word "Benham," which may be used
from time to time in other connections and for other purposes by BMC or
affiliated entities. BMC may require the Trust to cease using "Benham" in the
Trust's name if the Trust ceases for any reason to employ BMC, an affiliate, or
any successor as the Trust's Advisor.

Section 11. PROVISIONS IN CONFLICT WITH LAW OR REGULATIONS. (a) The
provisions of this Declaration of Trust are severable. If the Trustees shall
determine, with the advice of counsel, that any of such provisions conflicts
with the 1940 Act, the regulated investment company provisions of the Internal
Revenue Code, or with other applicable laws and regulations, the conflicting
provision shall be deemed never to have constituted a part of this Declaration
of Trust; provided, however, that such determination shall not affect any of the
remaining provisions of this Declaration of Trust or render invalid or improper
any action taken or omitted prior to such determination.

(b) If any provision of this Declaration of Trust shall be held invalid
or unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction and shall not in any manner
affect such provisions in any other jurisdiction or any provision of this
Declaration of Trust in any jurisdiction.

IN WITNESS WHEREOF, the initial Trustees as aforesaid do hereto set
their hands this 16th day of June, 1993.

/s/ John T. Kataoka
John T. Kataoka, as Initial Trustee and not
individually

/s/ Douglas A. Paul
Douglas A. Paul, as Initial Trustee and not
individually

STATE OF CALIFORNIA )
)
COUNTY OF SANTA CLARA ) June 16, 1993

Then personally appeared before me the above-named John T.
Kataoka and Douglas A. Paul, known to me to be the persons whose names
are subscribed to the within instrument, and acknowledged that they
executed the same.

/s/ signature on file

My commission expires:

Principal Office: 1665 Charleston Road
Mountain View, CA 94043

Resident Agent: CT Corporation System
2 Oliver Street
Boston, MA 02109

TABLE OF CONTENTS

BENHAM INVESTMENT TRUST
BYLAWS
(AMENDED MAY 17, 1995)

ARTICLE I OFFICES

1. Principal Office
2. Other Offices

ARTICLE II SHAREHOLDER MEETINGS

1. Location of Meetings
2. Call of Meeting
3. Notice of Shareholder Meeting
4. Manner of Giving Notice; Affidavit of Notice
5. Adjourned Meeting; Notice
7. Waiver of Notice of Consent by Absent Shareholders
8. Shareholder Action by Written Consent without a Meeting
9. Record Date for Shareholder Notice; Voting; Giving
Consents
10. Proxies
11. Inspectors of Election

ARTICLE III TRUSTEES

1. Powers
2. Number and Qualification of Trustees
3. Vacancies
4. Location of Meetings; Meetings by Telephone
5. Regular Meetings
6. Special Meetings
7. Quorum
8. Waiver of Notice
9. Adjournment
10. Notice of Adjournment
11. Action Without a Meeting
12. Fees and Compensation of Trustees

ARTICLE IV COMMITTEES

1. Committees of Trustees
2. Meetings and Actions of Committees

ARTICLE V OFFICERS

1. Officers
2. Election of Officers
3. Subordinate Officers
4. Removal and Resignation of Officers
5. Vacancies
6. Chairman of the Board
7. President
8. Vice President
9. Secretary
10. Chief Financial Officer

ARTICLE VI INDEMNIFICATION OF TRUSTEES, OFFICERS, EMPLOYEES AND OTHER AGENTS

1. Agents, Proceedings and Expenses
2. Actions Other than by the Trust
3. Actions by the Trust
4. Exclusion and Indemnification
5. Successful Defense by Agent
6. Required Approval
7. Advance of Expenses
8. Other Contractual Rights
9. Limitations
10. Insurance
11. Fiduciaries of Corporate Employee Benefit Plan

ARTICLE VII RECORDS AND REPORTS

1. Maintenance and Inspection of Share Register
2. Maintenance and Inspection of Bylaws
3. Maintenance and Inspection of Other Records
4. Inspection by Trustees
5. Financial Statements

ARTICLE VIII GENERAL MATTERS

1. Checks, Drafts, Evidence of Indebtedness
2. Contracts and Instruments; How Executed
3. Certificate of Shares
4. Lost Certificates
5. Representation of Shares of Other Entities

ARTICLE IX CUSTODY OF SECURITIES

1. Employment of a Custodian
2. Action Upon Termination of Custodian Agreement
3. Central Certificate System
4. Acceptance of Receipts in Lieu of Certificates

ARTICLE X AMENDMENTS

1. Amendment by Shareholders
2. Amendment by Trustees

BYLAWS
OF
BENHAM INVESTMENT TRUST
A Massachusetts Business Trust
(last amended 5/17/95)

ARTICLE I
OFFICES

Section 1. PRINCIPAL OFFICE. The Board of Trustees shall fix the location
of the principal executive office of the Trust at any place within or outside
the Commonwealth of Massachusetts.

Section 2. OTHER OFFICES. The Board of Trustees may at any time establish
branch or subordinate offices at any place or places where the Trust intends to
do business.

ARTICLE II
SHAREHOLDER MEETINGS

Section 1. LOCATION OF MEETINGS. Shareholder meetings shall be held at any
place within or outside the Commonwealth of Massachusetts designated by the
Board of Trustees. In the absence of any such designation, shareholders'
meetings shall be held at the principal executive office of the Trust.

Section 2. CALL OF MEETING. A meeting of the shareholders may be called at
any time by the Board of Trustees, the Chairman of the Board, or the President.

Section 3. NOTICE OF SHAREHOLDER MEETING. Notices of any shareholder
meetings shall be sent or otherwise given in accordance with Section 4 of this
Article II not less than ten (10) nor more than seventy-five (75) days before
the date of the meeting. The notice shall specify (i) the location, date, and
hour of the meeting, and (ii) the general nature of the business to be
conducted. The notice of any shareholder meeting at which Trustees are to be
elected also shall include the name of any nominee or nominees whom at the time
of the notice are intended to be presented for election.

If action is proposed to be taken at any meeting for approval of (i) a
contract or transaction in which a Trustee or Trustee nominee has a direct or
indirect financial interest, (ii) an amendment to the Declaration of Trust,
(iii) a reorganization of the Trust, or (iv) a voluntary dissolution of the
Trust, the notice shall state the general nature of that proposal.

Section 4. MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE. Notice of any
meeting of shareholders shall be given either personally, or by United States
mail, or telegraphic, or other written communication, charges prepaid, addressed
to the shareholder at the address of that shareholder appearing on the books of
the Trust or its transfer agent or given by the shareholder to the Trust for the
purpose of receiving notice of shareholder meetings. If no such address appears
on the Trust's books or is given, notice shall be deemed to have been given if
sent to that shareholder by United States mail or telegraphic or other written
communication to the Trust's principal executive office, or if said notice is
published at least once in a newspaper of general circulation in the county
where the Trust's principal office is located. Notice shall be deemed to have
been given at the time when delivered personally or deposited in the mail or
sent by telegram or other means of written communication.

If any notice addressed to a shareholder at the address of that shareholder
appearing on the books of the Trust is returned to the Trust by the United
States Postal Service marked to indicate that the Postal Service is unable to
deliver the notice to the shareholder at the address, all future notices or
reports shall be deemed to have been duly given without further mailing if these
shall be available to the shareholder on written demand of the shareholder at
the principal executive office of the Trust for a period of one year from the
date of giving notice.

An affidavit of the mailing or other means of giving any notice of any
shareholder meeting shall be executed by the secretary, assistant secretary, or
any transfer agent of the Trust giving the notice, and shall be filed and
maintained in the minute book of the Trust.

Section 5. ADJOURNED MEETING; NOTICE. Any shareholder's meeting, whether or
not a quorum is present, may be adjourned from time to time by vote of a
majority of the shares represented at that meeting, either in person or by
proxy.

When any meeting of shareholders is adjourned to another time or place,
notice need not be given of the adjourned meeting at which the adjournment is
taken, unless a new record date of the adjourned meeting is fixed or unless the
adjournment is for more than sixty (60) days from the date set for the original
meeting, in which case the Board of Trustees shall set a new record date. Where
required, notice of any such adjournment shall be given to each shareholder of
record entitled to vote at the adjourned meeting in accordance with the
provisions of Section 3 and 4 of this Article II. At any adjourned meeting, the
Trust may conduct any business which might have been conducted at the original
meeting.

Section 6. VOTING. The shareholders entitled to vote at any meeting of
shareholders shall be determined in accordance with the provisions of the
Declaration of Trust, as in effect at such time. The shareholders' vote may be
by voice vote or by ballot, provided, however, that any election of Trustees
must be by ballot if any shareholder demands a ballot vote before the voting has
begun. On any matter other than election of Trustees, a shareholder may vote a
portion of his shares in favor of the proposal and refrain from voting the
remaining shares or vote them against the proposal, but if the shareholder fails
to specify the number of shares which he is voting affirmatively, it will be
conclusively presumed that the shareholder's affirmative vote is with respect to
the total shares that the shareholder is entitled to vote on such proposal.

Section 7. WAIVER OF NOTICE BY CONSENT OF ABSENT SHAREHOLDERS. The
transactions of the meeting of shareholders, however called and noticed and
wherever held, shall be as valid as though such transaction had occurred at a
meeting duly held after regular call and notice, if a quorum be present either
in person or by proxy, and if, either before or after the meeting, each person
entitled to vote who was not present in person or by proxy signs a written
waiver of notice or a consent to holding the meeting or an approval of the
minutes. The waiver of notice or consent need not specify either the business to
be conducted or the purpose of any shareholder meeting.

Attendance by a shareholder at a meeting shall also constitute a waiver of
notice of that meeting, except when the shareholder objects at the beginning of
the meeting to the transaction of any business because the meeting was not
lawfully called or convened, and provided that attendance at a meeting is not a
waiver of any right to object to the consideration of matters not included in
the notice of the meeting if that objection is expressly made at the beginning
of the meeting.

Section 8. SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING. Any
action which may be taken at any meeting of shareholders may be taken without a
meeting and without prior notice if a consent in writing setting forth the
action so taken is signed by the holders of outstanding shares having not less
than the minimum number of votes that would be necessary to authorize or take
that action at a meeting at which all shares entitled to vote on that action
were present and voted. All such consents shall be filed with the Secretary of
the Trust and shall be maintained in the Trust's records. Any shareholder giving
a written consent or the shareholder's proxy, or a transferee of the shares, or
a personal representative of the shareholder or their respective proxy may
revoke the consent to action without a meeting by written notice received by the
Secretary of the Trust before written consents of the number of shares required
to authorize the proposed action have been filed with the Secretary.

If the consents of all shareholders entitled to vote have not been
solicited in writing and if the unanimous written consent of all such
shareholders shall not have been received, the Secretary shall give prompt
notice of the action approved by the shareholders without a meeting. This notice
shall be given in the manner specified in Section 4 of this Article II. In the
case of approval of (i) contracts or transactions in which a Trustee has a
direct or indirect financial interest, (ii) indemnification of agents of the
Trust, or (iii) a reorganization of the Trust, the notice shall be given at
least ten (10) days before the consummation of any action authorized by that
approval.

Section 9. RECORD DATE FOR SHAREHOLDER NOTICE; VOTING; GIVING CONSENTS. For
purposes of determining the shareholders entitled to notice of any meeting, or
to vote at such meeting, or entitled to give consent to action without a
meeting, the Board of Trustees may fix in advance a record date which shall not
be more than seventy-five (75) days nor less than ten (10) days before the date
of any such meeting as provided in the Declaration of Trust.

If the Board of Trustees does not so fix a record date:

(a) The record date for determining the shareholders entitled to notice of
or to vote at a meeting of shareholders shall be at the close of business on the
business day next preceding the day on which notice is given, or if notice is
waived, at the close of business on the business day next preceding the day on
which the meeting is held.

(b) The record date for determining the shareholders entitled to give
consent to action in writing without a meeting (i) when no prior action by the
Board of Trustees has been taken, shall be the day on which the first written
consent is given, or (ii) when prior action of the Board of Trustees has been
taken, shall be at the close of business on the day on which the Board of
Trustees adopt the resolution relating to that action or the seventy-fifth day
before the date of such other action, whichever is later.

Section 10. PROXIES. Every shareholder entitled to vote for Trustees, or on
any other matter, shall have the right to do so either in person or by one or
more agents authorized by a written proxy signed by the shareholder and filed
with the Secretary of the Trust. A proxy shall be deemed signed if the
shareholder's name is placed on the proxy (whether by manual signature,
typewriting, telegraphic transmission or otherwise) by the shareholder or the
shareholder's attorney-in-fact. A validly executed proxy which does not state
that it is irrevocable shall continue in full force and effect unless (i)
revoked by the person executing it, before the vote pursuant to that proxy, by a
writing delivered to the Trust stating that the proxy is revoked, or by a
subsequent proxy executed by, or attendance at the meeting and voting in person
by, the person executing that proxy; or (ii) written notice of the death or
incapacity of the maker of that proxy is received by the Trust before the vote
pursuant to that proxy is counted; provided however, that no proxy shall be
valid after the expiration of eleven (11) months from the date of the proxy
unless otherwise provided in the proxy. The revocability of a proxy that states
on its face that it is irrevocable shall be governed by the provisions of the
California General Corporation Law.

Section 11. INSPECTORS OF ELECTION. Before any meeting of shareholders, the
Board of Trustees may appoint any persons other than nominees for office to act
as inspectors of election at the meeting or its adjournment. If no inspectors of
election are so appointed, the chairman of the meeting may and on the request of
any shareholder or a shareholder's proxy shall, appoint inspectors of election
at the meeting. The number of inspectors shall be either one (1) or three (3).
If inspectors are appointed at a meeting on the request of one or more
shareholders or proxies, the holders of a majority of shares or their proxies
present at the meeting shall determine whether one (1) or three (3) inspectors
are to be appointed. If any person appointed as inspector fails to appear or
fails or refuses to act, the chairman of the meeting may and on the request of
any shareholder or a shareholder's proxy, shall appoint a person to fill the
vacancy.

Inspectors of Election shall:

(a) Determine the number of shares outstanding and the voting power of
each, the shares represented at the meeting, the existence of a quorum and the
authenticity, validity, and effect of proxies;

(b) Receive votes, ballots, or consents;

(d) Count and tabulate all votes or consents;

(e) Determine when the polls shall close;

(f) Determine the result; and

(g) Perform any other acts that may be proper to conduct the election or
vote with fairness to all shareholders.

ARTICLE III
TRUSTEES

Section 1. POWERS. Subject to the applicable provisions of the Declaration
of Trust and these Bylaws relating to actions required to be approved by the
shareholders or by the outstanding shares, the business and affairs of the Trust
shall be managed, and all powers shall be exercised by or under the direction
of, the Board of Trustees.

Section 2. NUMBER AND QUALIFICATION OF TRUSTEES. The authorized number of
Trustees shall be not less than 7 nor more than 11 until changed by a duly
adopted amendment to the Bylaws or by resolution of the Trustees. The selection
and nomination of disinterested directors is committed solely to the discretion
of a Nominating Committee consisting of all sitting disinterested directors
except where the remaining director or directors are interested persons.

Section 3. VACANCIES. Vacancies on the Board of Trustees may be filled by a
majority of the remaining Trustees, though less than a quorum, or by a sole
remaining Trustee, unless the Board of Trustees calls a meeting of shareholders
for the purpose of electing Trustees. In the event that at any time less than a
majority of the Trustees holding office at that time were so elected by the
holders of the outstanding voting securities of the Trust, the Board of Trustees
shall forthwith cause to be held as promptly as possible, and in any event
within sixty (60) days, a meeting of such holders for the purpose of electing
Trustees to fill any existing vacancies in the Board of Trustees, unless such
period is extended by order of the United States Securities and Exchange
Commission.

Section 4. LOCATION OF MEETING; MEETINGS BY TELEPHONE. All meetings of the
Board of Trustees may be held at any location within or outside the Commonwealth
of Massachusetts. Any meeting, regular or special, may be held by conference
telephone or similar communication equipment, so long as all Trustees
participating in the meeting can hear one another, and all such Trustees shall
be deemed to be present in person at the meeting; provided that, in accordance
with the provisions of the Investment Company Act of 1940, the Board may not
transact by such a meeting any business which involves the entering into, or the
approval, performance, or renewal of any contract or agreement, whereby a person
undertakes regularly to serve or act as the Fund's investment advisor or
principal underwriter.

Section 5. REGULAR MEETINGS. Regular meetings of the Board of Trustees
shall be held at such time as shall from time to time be fixed by the Board of
Trustees. Such regular meetings may be held without notice.

Section 6. SPECIAL MEETINGS. Special meetings of the Board of Trustees for
any purpose may be called at any time by the Chairman of the Board or the
President or any Vice President or the Secretary or any two (2) Trustees.

Notice of the time and place of special meetings shall be delivered
personally or by telephone to each Trustee or sent by first-class mail or
telegram, charges prepaid, addressed to each Trustee at that Trustee's address
as it is shown on the records of the Trust. In case the notice is mailed, it
shall be deposited in the United States mail at least four (4) days before the
meeting is to be held. In case the notice is delivered personally or by
telephone or telegraph, it shall be given at least forty-eight (48) hours before
the time the meeting is to be held. Any oral notice given personally or by
telephone may be communicated either to a Trustee or to a person at the office
of the Trustee who the person giving the notice has reason to believe will
promptly communicate it to the Trustee. The notice need not specify the purpose
of the meeting or the place f the meeting is to be held at the principal
executive office of the Trust.

Section 7. QUORUM. A majority of the authorized number of Trustees shall
constitute a quorum, except to adjourn as provided in Section 10 of this Article
III. Every act or decision done or made by a majority of the Trustees present at
a meeting duly held, at which a quorum is present, shall be regarded as the act
or decision of the Board of Trustees, subject to the provisions of the
Declaration of Trust. A meeting at which a quorum is initially present may
continue to transact business notwithstanding the withdrawal of one or more
Trustees if any action taken is approved by at least a majority of the required
quorum for that meeting.

Section 8. WAIVER OF NOTICE. Notice of any meeting need not be given to any
Trustee who, either before or after the meeting, signs a written waiver of
notice, a consent to holding the meeting, or an approval of the minutes. The
waiver of notice or consent need not specify the purpose of the meeting. All
such waivers, consents, and approvals shall be filed with the records of the
Trust or made a part of the minutes of the meeting. Notice of a meeting shall
also be deemed given to any Trustee who attends the meeting without protesting
before or at its commencement the lack of notice to that Trustee.

Section 9. ADJOURNMENT. A majority of the Trustees present, whether or not
constituting a quorum, may adjourn any meeting to another time and location.

Section 10. NOTICE OF ADJOURNMENT. Notice of the time and location of an
adjourned meeting need not be given unless the meeting is adjourned for more
than forty-eight (48) hours. In such a case notice of the time and location
shall be given before the time of the adjourned meeting, in the manner specified
in Section 6 of this Article III, to the Trustees who were present at the time
of the adjournment.

Section 11. ACTION WITHOUT A MEETING. Any action required or permitted to
be taken by the Board of Trustees may be taken without a meeting, if a majority
of the members of the Board of Trustees shall individually or collectively
consent in writing to that action; provided that, in accordance with the
Investment Company Act of 1940, such written consent does not approve the
entering into, or the renewal, or performance, of any contract or agreement,
whereby a person undertakes regularly to serve or act as the Trust's investment
advisor or principal underwriter. Any other action by written consent shall have
the same force and effect as a majority vote of the Board of Trustees. Written
consents shall be filed with the minutes of the proceedings of the Board of
Trustees.

Section 12. FEES AND COMPENSATION OF TRUSTEES. Trustees and members of
committees may receive such compensation, if any, for their services and such
reimbursement of expenses as may be fixed or determined by resolution of the
Board of Trustees. This Section 12 shall not be construed to preclude any
Trustee from serving the Trust in any other capacity as an officer, agent,
employee, or otherwise, and receiving compensation for those services.

ARTICLE IV
COMMITTEES

Section 1. COMMITTEES OF TRUSTEES. The Board of Trustees may by resolution
adopted by a majority of the authorized number of Trustees designate one or more
committees, each consisting of two (2) or more Trustees, to serve at the
pleasure of the Board. The Board may designate one or more Trustees as alternate
members of any committee who may replace any absent member at any meeting of the
committee. Any committee, to the extent provided in the resolution of the Board,
shall have the authority of the Board, except with respect to:

(a) the approval of any action which under applicable law also requires
shareholders' approval or approval of the outstanding shares, or requires
approval by a majority of the entire Board or certain members of said Board;

(b) the filling of vacancies on the Board of Trustees or on any committee;

(d) the amendment or repeal of the Declaration of Trust or of the Bylaws
or the adoption of new Bylaws;

(e) the amendment or repeal of any resolution of the Board of Trustees
which by its express terms is not so amendable or repealable;

(f) a distribution to the shareholders of the Trust, except at a rate or
in a periodic amount or within a designated range determined by the Board of
Trustees; or

(g) the appointment of any other committees of the Board of Trustees or
the members of these committees.

Section 2. MEETINGS AND ACTIONS OF COMMITTEES. Meetings and actions of
committees shall be governed by, and held and taken in accordance with, the
provisions of Article III of these Bylaws, with such changes in the context
thereof as are necessary to substitute the committee and its members for the
Board of Trustees and its members, except that the time of regular meetings of
committees may be determined either by resolution of the Board of Trustees or by
resolution of the committee. Special meetings of committees may also be called
by resolution of the Board of Trustees, and notice of special meetings of
committees shall also be given to all alternate members who shall have the right
to attend all meetings of the committee. The Board of Trustees may adopt rules
for the government of any committee consistent with the provisions of these
Bylaws.

ARTICLE V
OFFICERS

Section 1. OFFICERS. The officers of the Trust shall be a President, a
Secretary, and a Treasurer. The Trust may also have, at the discretion of the
Board of Trustees, a Chairman of the Board, one or more Vice Presidents, one or
more Assistant Secretaries, one or more Assistant Treasurers, and such other
officers as may be appointed in accordance with the provisions of Section 3 of
this Article V. Any number of offices may be held by the same person.

Section 2. ELECTION OF OFFICERS. The officers of the Trust, except such
officers as may be appointed in accordance with the provisions of Section 3 or
Section 5 of this Article V, shall be chosen by the Board of Trustees, and each
shall serve at the pleasure of the Board of Trustees, subject to the rights, if
any, of an officer under any contract of employment.

Section 3. SUBORDINATE OFFICERS. The Board of Trustees may appoint, and may
empower the President to appoint, such other officers as the business of the
Trust may require, each of whom shall hold office for such period, have such
authority, and perform such duties from time to time, as are provided in these
Bylaws or as the Board of Trustees may from time to time determine.

Section 4. REMOVAL AND RESIGNATION OF OFFICERS. Subject to the rights, if
any, of an officer under any contract of employment, any officer may be removed,
either with or without cause, by the Board of Trustees at any regular or special
meeting of the Board if Trustees or, except in the case of an officer chosen by
the Board of Trustees, by any officer upon such power of removal may be
conferred by the Board of Trustees.

Any officer may resign at any time by giving written notice to the Trust.
Any resignation shall take effect at the date of the receipt of that notice or
at any later time specified in that notice; and unless otherwise specified in
that notice, the acceptance of the resignation shall not be necessary to make it
effective. Any resignation is without prejudice to the rights, if any, of the
Trust under any contract to which the officer is a party.

Section 5. VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification, or other cause shall be filled in the
manner prescribed in these Bylaws for regular appointment to that office.

Section 6. CHAIRMAN OF THE BOARD. The Chairman of the Board, if such an
officer is elected, shall if present preside at meetings of the Board of
Trustees, and exercise and perform such other powers and duties as may be from
time to time assigned to him by the Board of Trustees or prescribed by the
Bylaws.

Section 7. PRESIDENT. Subject to such supervisory powers, if any, as may be
given by the Board of Trustees to the Chairman of the Board, if there be such an
officer, the President shall be the principal executive officer and the
principal operating officer of the Trust and shall, subject to the control of
the Board of Trustees, have general supervision, direction and control of the
business and the officers of the Trust. He shall preside at all shareholder
meetings and, in the absence of the Chairman of the Board or if there be none,
at all meetings of the Board of Trustees. He shall have the general powers and
duties of management usually vested in the office of President of a corporation
and shall have such other powers and duties as may be prescribed by the Board of
Trustees or these Bylaws.

Section 8. VICE PRESIDENTS. In the absence or disability of the President,
the Vice Presidents, if any, in order of their rank as fixed by the Board of
Trustees or, if not ranked, a Vice President designated by the Board of
Trustees, shall perform all the duties of the President, and when so acting,
shall have all powers of and be subject to all the restrictions upon the
President. The Vice Presidents shall have such other powers and perform such
other duties as from time to time may be prescribed for them respectively by the
Board of Trustees or by these Bylaws, and by the President or the Chairman of
the Board.

Section 9. SECRETARY. The Secretary shall keep or cause to be kept at the
principal executive office of the Trust, or such other place as the Board of
Trustees may direct, a book of minutes of all meetings and actions of Trustees,
committees of Trustees, and shareholders with the time and location, whether
regular or special, and, if special, how authorized; the notice given; the names
of those present at Trustees' meetings or committee meetings, the number of
shares present or represented at shareholders' meetings and the proceedings of
all such meetings.

The Secretary shall keep or cause to be kept at the principal executive
office of the Trust or at the office of the Trust's transfer agent or registrar,
as determined by resolution of the Board of Trustees, a share register or a
duplicate share register showing the names of all shareholders and their
addresses; the number, series, and classes of shares held by each; the number
and date of certificates issued for the same; and the number and date of
cancellation of every certificate surrendered for cancellation.

The Secretary shall give, or cause to be given, notice of all meetings of
the shareholders and the Board of Trustees required by these Bylaws, or by
applicable law, to be given, and shall have such other powers and perform such
other duties as may be prescribed by the Board of Trustees or by these Bylaws.

Section 10. CHIEF FINANCIAL OFFICER. The Chief Financial Officer shall be
the principal financial and accounting officer of the Trust, and shall keep and
maintain, or cause to be kept and maintained, adequate and correct books and
records of accounts of the property and business transactions of the Trust,
including accounts of its assets, liabilities, receipts, disbursements, gains,
losses, capital, retained earnings and shares. The books of account shall at all
reasonable times be open to inspection by any Trustee.

The Chief Financial Officer shall deposit all monies and other valuables in
the name and to the credit of the Trust with such depositories as may be
designated by the Board of Trustees. He shall disburse the funds of the Trust as
may be ordered by the Board of Trustees; shall render to the President and
Trustees, whenever they request it, an account of all of his transactions as
Chief Financial Officer and of the financial condition of the Trust; and shall
have other powers and perform such other duties as may be prescribed by the
Board of Trustees or these Bylaws.

ARTICLE VI
INDEMNIFICATION OF TRUSTEES, OFFICERS,
EMPLOYEES AND OTHER AGENTS

Section 1. AGENTS, PROCEEDINGS AND EXPENSES. For the purpose of this
Article, "agent" means any person who is or was a Trustee, officer, employee, or
other agent of this Trust, or is or was serving at the request of this Trust as
a Trustee, director, officer, employee, or agent of another foreign or domestic
corporation, partnership, joint venture, Trust or other enterprise, or was a
Trustee, director, officer, employee or agent of a foreign or domestic
corporation which was a predecessor of another enterprise at the request of such
predecessor entity; "proceeding" means any threatened, pending or completed
action or proceeding, whether civil, criminal, administrative or investigative;
and "expenses" includes without limitation attorneys' fees and any expenses of
establishing a right to indemnification under this Article.

Section 2. ACTIONS OTHER THAN BY THE TRUST: This Trust shall indemnify any
person who was or is a party, or is threatened to be made a party, to any
proceeding (other than an action by or in the right of this Trust) by reason of
the fact that such person is or was an agent of this Trust, against expenses,
judgments, fines, settlements and other amounts actually and reasonably incurred
in connection with such proceeding, if that person acted in good faith and in a
manner that person reasonably believed to be in the best interests of this Trust
and, in the case of a criminal proceeding, had no reasonable cause to believe
the conduct of that person was unlawful. The termination of any proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not of itself create a presumption that the person did not
act in good faith and in a manner which the person reasonably believed to be in
the best interests of this Trust, or that the person had reasonable cause to
believe that the person's conduct was unlawful.

Section 3. ACTIONS BY THE TRUST. This Trust shall indemnify any person who
was or is a party, or is threatened to be made a party, to any threatened,
pending, or completed action by or in the right of this Trust to procure a
judgment in its favor by reason of the fact that person is or was an agent of
this Trust, against expenses actually and reasonably incurred by that person in
connection with the defense or settlement of that action, if that person acted
in good faith, in a manner that person believed to be in the best interests of
this Trust and with such care, including reasonable inquiry, as an ordinarily
prudent person in a like position would use under similar circumstances.

Section 4. EXCLUSION OF INDEMNIFICATION. Notwithstanding any provision to
the contrary contained herein, there shall be no right to indemnification for
any liability arising by reason of willful misfeasance, bad faith, gross
negligence, or the reckless disregard of the duties involved in the conduct of
the agent's office with this Trust.

No indemnification shall be made under Sections 2 or 3 of this Article:

(a) In respect of any claim, issue or matter as to which that person shall
have been adjudged to be liable in the performance of his duties to the Trust,
unless and only to the extent that the court in which that action was brought
shall determine, upon application, that in view of all the circumstances of the
case, the person was not liable by reason of the disabling conduct set forth in
the preceding paragraph and is fairly and reasonably entitled to indemnity for
the expenses which the court shall determine; or

(b) Of amounts paid in settling or otherwise disposing of a threatened or
pending action, with or without court approval, or of expenses incurred in
defending a threatened or pending action which is settled or otherwise disposed
of without court approval, unless the required approval set forth in Section 6
of this Article is obtained.

Section 5. SUCCESSFUL DEFENSE BY AGENT. To the extent that an agent of this
Trust has been successful on the merits in defense of any proceeding referred to
in Sections 2 or 3 of this Article, or in defense of any claim, issue, or matter
therein, before the court or other body before whom the proceeding was brought,
the agent shall be indemnified against expenses actually and reasonably incurred
by the agent in connection therewith, provided that the Board of Trustees,
including a majority who are not party to the proceeding and who are not
interested persons of the Trust (as defined in the Investment Company Act of
1940), also determines that based upon a review of the facts, the agent was not
liable by reason of the disabling conduct referred to in Section 4 of this
Article.

Section 6. REQUIRED APPROVAL. Except as provided in Section 5 of this
Article, any indemnification under this Article shall be made by the Trust only
if authorized in each specific case. No indemnification shall be made without a
determination that indemnification of the agent is proper in the circumstances
because the agent has met the applicable standard of conduct set forth in
Sections 2 or 3 of this Article and that such agent is not prohibited from
indemnification because of the disabling conduct set forth in Section 4 of this
Article,

Such determination shall be evidenced by:

(a) A majority vote of a quorum consisting of Trustees who are not parties
to the proceeding and who are not interested persons of the Trust (as defined in
the Investment Company Act of 1940); or

(b) A written opinion of independent legal counsel.

Section 7. ADVANCE OF EXPENSES. Expenses incurred in defending any
proceeding may be advanced by this Trust before the final disposition of the
proceeding on receipt of an undertaking by or on behalf of the agent to repay
the amount of the advance unless it shall be determined ultimately that the
agent is entitled to be indemnified as authorized in this Article, provided the
agent provides a security for his undertaking, or a majority of a quorum of the
disinterested, non-party Trustees, or an independent legal counsel in a written
opinion, determine that based on a review of readily available facts, there is
reason to believe that said agent ultimately will be found entitled to
indemnification.

Section 8. OTHER CONTRACTUAL RIGHTS. Nothing contained in this Article
shall affect any right to indemnification to which persons other than Trustees
and officers of this Trust or any subsidiary hereof may be entitled by contract
or otherwise.

Section 9. LIMITATIONS. No indemnification or advance shall be made under
this Article, except as provided in Sections 5 or 6, in any circumstances where
it appears that:

(a) It would be inconsistent with a provision of the Declaration of Trust,
a resolution of the shareholders, or an agreement in effect at the time the
alleged cause of action asserted in the proceeding in which the expenses were
incurred or other amounts were paid which prohibits or otherwise limits
indemnification; or

(b) It would be inconsistent with any condition expressly imposed by a
court in approving a settlement.

Section 10. INSURANCE. Upon and in the event of a determination by the
Board of Trustees of this Trust to purchase such insurance, this Trust shall
purchase and maintain insurance on behalf of any agent of this Trust against any
liability asserted against or incurred by the agent in such capacity or arising
out of the agent's status as such, but only to the extent that this Trust would
have the power to indemnify the agent against that liability under the
provisions of this Article.

Section 11. FIDUCIARIES OF EMPLOYEE BENEFIT PLAN. This Article does not
apply to any proceeding against any Trustee, investment manager, or other
fiduciary of an employee benefit plan in that person's capacity as such, even
though that person may also be an agent of this Trust as defined in Section 1 of
this Article. Nothing contained in this Article shall limit any right to
indemnification to which such a Trustee, investment manager, or other fiduciary
may be entitled by contract or otherwise which shall be enforceable to the
extent permitted by applicable law other than this Article.

ARTICLE VII
RECORDS AND REPORTS

Section 1. MAINTENANCE AND INSPECTION OF SHARE REGISTER. This Trust shall
keep at its principal executive office or at the office of its transfer agent or
registrar, if either be appointed and as determined by resolution of the Board
of Trustees, a record of its shareholders, giving the names and addresses of all
shareholders and the number and series and classes of shares held by each
shareholder.

Section 2. MAINTENANCE AND INSPECTION OF BYLAWS. The Trust shall keep at
its principal executive office the original or a copy of these Bylaws as amended
to date, which shall be open to inspection by shareholders at all reasonable
times during office hours.

Section 3. MAINTENANCE AND INSPECTION OF OTHER RECORDS. The accounting
books and records and minutes of proceedings of the shareholders and the Board
of Trustees and any committee or committees of the Board of Trustees shall be
kept at such location or locations designated by the Board of Trustees, or in
the absence of such designation, at the principal executive office of the Trust.
The minutes shall be kept in written form, and the accounting books and records
shall be kept either in written form or in any other form capable of being
converted into written form. The minutes and accounting books and records shall
be open to inspection upon the written demand of any shareholder or holder of a
voting Trust certificate at any reasonable time during usual business hours for
a purpose reasonably related to the holder's interests as a shareholder or as
the holder of a voting Trust certificate. The inspection may be made in person
or by an agent or attorney and shall include the right to copy and make
extracts.

Section 4. INSPECTION BY TRUSTEES. Every Trustee shall have the absolute
right at any reasonable time to inspect all books, records, and documents of
every kind and the physical property of the Trust. This inspection by a Trustee
may be made in person or by an agent or attorney and the right of inspection
includes the right to copy and make extracts of documents.

Section 5. FINANCIAL STATEMENTS. A copy of any financial statements and any
income statement of the Trust for each quarterly period of each fiscal year and
accompanying balance sheet of the Trust as of the end of each such period that
has been prepared by the Trust shall be kept on file in the principal executive
office of the Trust for at least twelve (12) months and each such statement
shall be made available at all reasonable times to any shareholder demanding an
examination of any such statement or a copy shall be mailed to any such
shareholder.

The quarterly income statements and balance sheets referred to in this
section shall be accompanied by the report, if any, of any independent
accountants engaged by the Trust or the certificate of an authorized officer of
the Trust that the financial statements were prepared without audit from the
books and records of the Trust.

ARTICLE VIII
GENERAL MATTERS

Section 1. CHECKS, DRAFTS, EVIDENCE OF INDEBTEDNESS. All checks, drafts, or
other orders for payment of money, notes or other evidences of indebtedness
issued in the name of or payable to the Trust shall be signed or endorsed by
such person or persons and in such manner as from time to time shall be
determined by resolution of the Board of Trustees.

Section 2. CONTRACTS AND INSTRUMENTS; HOW EXECUTED. The Board of Trustees,
except as otherwise provided in these Bylaws, may authorize any officer or
officers, agent or agents, to enter into any contract or execute any instrument
in the name of and on behalf of the Trust and this authority may be general or
confined to specific instances; and unless so authorized or ratified by the
Board of Trustees or within the agency power of an officer, no officer, agent,
or employee shall have any power or authority to bind the Trust by any contract
or engagement or to pledge its credit or to render it liable for any purpose or
for any amount.

Section 3. CERTIFICATES FOR SHARES. A certificate or certificates for
shares of beneficial interest in any series of the Trust shall be issued to each
shareholder provided that the shares are fully paid. All certificates for shares
shall be signed in the name of the Trust by the Chairman of the Board, the
President or any Vice President and by the Chief Financial Officer, Controller,
Assistant Controller, or the Secretary or Assistant Secretary, certifying the
number of shares and the name of the series of which the shareholder owns
shares. Any or all of the signatures on the certificate may be facsimile. In
case any officer, transfer agent, or registrar who has signed, or whose
facsimile signature has been placed on a certificate, shall have ceased to be
that officer, transfer agent, or registrar before that certificate is issued,
the certificate may be issued by the Trust with the same effect as if that
person were an officer, transfer agent, or registrar at the date of issue.
Notwithstanding the foregoing, the Trust may adopt and use a system of issuance,
recordation, and transfer of its shares by electronic or other means.

Section 4. LOST CERTIFICATES. Except as provided in this Section 4, no new
certificates for shares shall be issued to replace an old certificate unless the
latter is surrendered to the Trust and cancelled at the same time. The Board of
Trustees may share certificate or certificate for any other security is lost,
stolen, or destroyed, authorize the issuance of a replacement certificate on
such terms and conditions as the Board of Trustees may require, including a
provision for indemnification of the Trust secured by a bond or other adequate
security sufficient to protect the Trust against any claim that may be made
against it, including any expense or liability on account of the alleged loss,
theft, or destruction of the certificate or the issuance of the replacement
certificate.

Section 5. REPRESENTATION OF SHARES OF OTHER ENTITIES. The Chairman of the
Board, the President, any Vice President or any other person authorized by
resolution of the Board of Trustees or by any of the foregoing designated
officers, is authorized to vote on behalf of the Trust any and all shares of any
corporations, partnerships, Trusts, or other entities, foreign or domestic, held
in the name of the Trust. The authority granted to these officers to vote, or to
represent on behalf of the Trust any and all shares held by the Trust in any
form of entity may be exercised by any of these officers in person or by any
person authorized to do so by a proxy duly executed by any of these officers.

ARTICLE IX
CUSTODY OF SECURITIES

Section 1. EMPLOYMENT OF A CUSTODIAN. The Trust shall place and at all
times maintain in the custody of a custodian (including any sub-custodian for
the custodian) all funds, securities and similar investments included in the
Trust property. The custodian (and any sub-custodian) shall be a bank having not
less than $2,000,000 aggregate capital, surplus and undivided profits and shall
be appointed from time to time by the Trustees, who shall fix its remuneration.

Section 2. ACTION UPON TERMINATION OF CUSTODIAN AGREEMENT. Upon termination
of a custodian agreement or the inability of the custodian to continue to serve,
the Trustees shall promptly appoint a successor custodian. In the event that no
successor custodian can be found who has the required qualifications and is
willing to serve, the Trustees shall call as promptly as possible a special
meeting of the Shareholders to determine whether the Trust shall function
without a custodian or shall be liquidated. If so directed by vote of the
holders of a majority of the outstanding voting securities of the Trust, the
custodian shall deliver and pay over all Trust property held by it as specified
in such vote.

Section 3. CENTRAL CERTIFICATE SYSTEM. Subject to such rules, regulations
and orders as the Securities and Exchange Commission (the "Commission") may
adopt, the Trustees may direct the custodian to deposit all or any part of the
securities owned by the Trust in a system for the central handling of securities
established by a national securities exchange association registered with the
Commission under the Securities Exchange Act of 1934, or such other person as
may be permitted by the Commission, or otherwise in accordance with the 1940
Act, pursuant to which system all securities of any particular class or series
of any issuer deposited within the system are tested as fungible and may be
transferred or pledged by bookkeeping entry without physical delivery of such
securities, provided that all such deposits shall be subject to withdrawal only
upon the order of the Trust or its custodian.

Section 4. ACCEPTANCE OF RECEIPTS IN LIEU OF CERTIFICATES. Subject to such
rules, regulations and orders as the Commission may adopt, the Trustees may
direct the Custodian to accept written receipts or other written evidences
indicating purchases of securities held in book-entry form in the Federal
Reserve System in accordance with regulations promulgated by the Board of
Governors of the Federal Reserve System and the local Federal Reserve Banks in
lieu of receipt of certificates representing such securities.

ARTICLE X
AMENDMENTS

Section 1. AMENDMENT BY SHAREHOLDERS. The Bylaws may be amended or repealed
by the affirmative vote or written consent of a majority of the outstanding
shares of the Trust entitled to vote, except as otherwise provided by applicable
law or by the Declaration of Trust or these Bylaws.

Section 2. AMENDMENT BY TRUSTEES. Subject to the right of shareholders
as provided in Section 1 of this Article to adopt, amend, or repeal Bylaws, and
except as otherwise provided by applicable law or by the Declaration of Trust,
these Bylaws may be amended, or repealed by the Board of Trustees.

INVESTMENT ADVISORY AGREEMENT

BENHAM INVESTMENT TRUST

Agreement, effective this 1st day of June, 1995, between BENHAM INVESTMENT
TRUST, a registered open-end management investment company organized as a
business trust in the Commonwealth of Massachusetts (the "Trust"), and BENHAM
MANAGEMENT CORPORATION, a registered investment advisor incorporated in the
State of California (the "Advisor").

Whereas, the Trust is authorized to issue shares of beneficial interest in
one or more series with each such series representing interests in a separate
portfolio of securities and other assets; and

Whereas, the Trust currently offers its shares in one series designated as
the Benham Prime Money Market Fund (the "Initial Series"), (such Initial Series
together with all other series subsequently established by the Trust with
respect to which the Trust desires to retain the Advisor to render investment
advisory services hereunder and with respect to which the Advisor is willing to
do so being herein collectively referred to as the "Series"). In the event the
Trust establishes one or more series other than the Initial Series with respect
to which it desires to retain the Advisor to render management and investment
advisory services hereunder, it shall notify the Advisor in writing, whereupon
such series shall become a Series hereunder.

I. DESCRIPTION OF SERVICES TO BE PROVIDED. In consideration for the
compensation hereinafter described, the Advisor agrees to provide the following
services to the Trust and to the Series:

A. Investment Advice and Portfolio Management. The Advisor shall
manage the investment and reinvestment of the Series' assets in accordance with
the investment objectives and policies of the Series as set forth in the Trust's
registration statement with the Securities and Exchange Commission as amended
from time to time and such instructions as the Trust's board of trustees may
issue. Consistent with the foregoing, the Advisor shall make all determinations
as to the investment of the Series' assets and the purchase and sale of its
portfolio securities and take all steps necessary to implement the same. Such
determinations and services shall also include determining the manner in which
voting rights, rights to consent to corporate actions and other rights
pertaining to the Series' portfolio securities shall be exercised. In placing
orders for the execution of the Series' portfolio transactions, the Advisor
shall use its best efforts to obtain the best possible price and execution and
shall otherwise place such orders subject to and in accordance with any
directions which the Trust's board of trustees may issue from time to time with
respect thereto. The Advisor shall select brokers and dealers for the execution
of portfolio transactions in accordance with the provisions of Section I.B. of
this agreement.

B. Brokerage. In executing transactions for the Series and selecting
brokers or dealers, the Advisor will use its best efforts to seek the best price
and execution available and shall execute or direct the execution of all such
transactions in a manner both permitted by law and that suits the best interest
of the Series and its shareholders. In assessing the best price and execution
available for any Series transaction, the Advisor will consider all factors it
deems relevant including, but not limited to, breadth of the market in the
security, the price of the security, the financial condition and execution
capability of the broker or dealer and the reasonableness of any commission for
the specific transaction and on a continuing basis. Consistent with the
obligation to obtain best execution, the Advisor may cause a Series to pay a
broker which provides brokerage and research services to the Advisor a
commission for effecting a securities transaction in excess of the amount
another broker might have charged. Such higher commissions may not be paid
unless the Advisor determines in good faith that the amount paid is reasonable
in relation to the services received in terms of the particular transaction or
the Advisor's overall responsibilities to the Series and any other of the
Advisor's clients.

On occasions when the Advisor deems the purchase or sale of a security to
be in the best interest of the Series as permitted by applicable law, the
Advisor may aggregate the securities to be sold or purchased with purchases of
sales of other funds in order to obtain the best execution of the order or lower
brokerage commissions, if any. The Advisor may also on occasion purchase or sell
a particular security for one or more clients in different amounts. On either
occasion, and to the extent permitted by applicable law and regulations,
allocation of the securities so purchased or sold, as well as the expenses
incurred in the transaction, will be made by the Advisor in the manner it
considers to be the most equitable and consistent with its fiduciary obligations
to the Trust and to such other customers.

C. Reports and Information. The Advisor shall render regular reports to the
Trust at quarterly meetings of the board of trustees and at such other times as
may reasonably be requested by the Trust's board of (i) the decisions it has
made with respect to the Series' assets and the purchase and sale of its
portfolio securities, (ii) the reasons for such decisions and related actions
and, (iii) the extent to which those decisions have been implemented. In
addition, the Advisor will provide the Trust with such accounting and
statistical data as it requires for the preparation of registration statements,
reports and other documents required by federal and state securities, tax and
other applicable laws and regulations and such additional documents and
information as the Trust may reasonably request for the management of its
affairs.

D. Promotion and Distribution. The Advisor shall promote the sale and
distribution of the Series' shares to the general public in such a manner and at
such times and places as the Advisor shall, in the exercise of reasonable
discretion, determine; and otherwise as the Advisor and the Trust's board of
trustees may from time to time agree.

II. COMPENSATION FOR SERVICES.

(a) Amount of Compensation As compensation for the services rendered
and duties assumed by the Advisor, the Trust, on behalf of the Series,
shall, within ten (10) days after the last day of each calendar month, pay the
Advisor an advisory fee equal to the amount determined using the following
formula: (A) a Trust Fee plus an Individual Fund Fee (if any), minus (B) the
amount by which the Series' Expenses exceed the Expense Guarantee Rate as
defined below, minus (C) any further amount by which the Advisor publicly
announces it will reduce the Series' Expenses, plus (D) the amount of any
recoupment as described below.

The Advisor's compensation shall be computed and accrued daily.

Upon termination of this agreement before the end of any calendar
month, the fee for the period from the end of the calendar month preceding the
month of termination to the date of termination shall be prorated according to
the proportion which the number of calendar days in the month prior to the date
of termination bears to the number of calendar days in the month of termination,
and shall be payable within ten (10) days after the date of termination. For
this purpose, the value of the Series' net assets shall be computed by the same
method at the end of each business day as the Series uses to compute the value
of its net assets in connection with the determination of the net asset value of
Series shares, all as more fully set forth in the Series' prospectus. To the
extent that Expenses of the Series in excess of the Series' Expense Guarantee
Rate exceed the total of the Trust Fee and Individual Fund Fee (if any), plus
any recoupment due, the Advisor will reimburse the Series for such excess.

(b) Determination of Trust Fee. The Trust Fee for each Series shall be
equal to that Series' pro-rata share of the value of the aggregated average
daily net assets of the Trust, determined for each calendar day, pursuant to the
following schedule of annualized rates:

0.50% of the first $100 million;
0.45% of the next $100 million;
0.40% of the next $100 million;
0.35% of the next $100 million;
0.30% of the next $100 million;
0.25% of the next $1 billion;
0.24% of the next $1 billion;
0.23% of the next $1 billion;
0.22% of the next $1 billion;
0.21% of the next $1 billion;
0.20% of the next $1 billion;
and 0.19% of the net assets over $6.5 billion.

1. The Expense Guarantee Rate for each Series is set
forth on Schedule A, attached hereto, as such
schedule may be amended from time to time by the
Trust's board of trustees.

2. The term "Expenses" as used in Section II of this agreement
shall mean:

A. The Trust Fee plus the Individual Fund Fee (if any).

B. Compensation for administrative and transfer agent
services as specified in Section I.B and II.B of The
Administrative Services Agreement, as such agreement
may be amended from time to time by the Trust's board
of trustees or shareholders (the "Administrative
Services Agreement").

C. Direct expenses as specified in Section III.B of the
Administrative Services Agreement.

D. Extraordinary Expenses, as specified in Section III.C
of the Administrative Services Agreement, are excluded
from the definition of Expenses as set forth herein.

3. The Advisor will be legally bound by any public announcement
that it will reduce, in accordance with the terms of its
announcement, the Series' Expenses below the Expense
Guarantee Rate.

(d) Recoupment. The Advisor may recover amounts (representing
Expenses in excess of the Expense Guarantee Rate) which reduced the Advisor's
compensation or that it reimbursed to a Series during the preceding 11 months
if, and to the extent that, for any given month, the Series' expense ratio (net
of reimbursements) was lower than the Expense Guarantee Rate in effect at the
time, but not during any period, during which the Advisor has agreed, pursuant
to paragraph (c)3 above, to limit the Series' Expenses to an amount less than
the Expense Guarantee Rate.

III. EXPENSES. Except as hereinafter provided, the Advisor shall pay all
of its expenses incurred in the performance of this agreement, including but not
limited to salaries and other compensation of its officers and employees and all
other costs of providing such advice, portfolio management and information and
reports to the Trust and the Series as are required hereunder, and all expenses
associated with any activity primarily intended to result in the sale of Series'
shares, such as advertising, printing and mailing of prospectuses to other than
current shareholders, printing and mailing of sales literature and compensation
of sales personnel.

IV. ACTIVITIES OF THE ADVISOR. The services of the Advisor to the Series
hereunder are not to be deemed exclusive, and the Advisor shall be free to
render similar services to others. Subject to and in accordance with the
Declaration of Trust and the Bylaws of the Trust and to Section 10(a) of the
Investment Company Act of 1940, it is understood that trustees, officers, agents
and shareholders of the Trust are or may be interested in the Advisor as
directors, officers or shareholders of the Advisor, that directors, officers,
agents or shareholders of the Advisor are or may be interested in the Trust as
trustees, officers, shareholders or otherwise, that the Advisor is or may be
interested in the Trust as a shareholder or otherwise, and that the effect of
any such interest shall be governed by the Trust's Declaration of Trust, its
Bylaws and the Investment Company Act of 1940.

V. LIABILITY OF THE ADVISOR. In the absence of willful misfeasance, bad
faith, gross negligence, or reckless disregard of its obligations and duties
hereunder, the Advisor shall not be subject to liability to the Series or to any
shareholder of the Series for any act or omission in the course of, or connected
with, rendering advice or services hereunder or for any losses that may be
sustained in the purchase, retention or sale of any security. No provision of
this agreement shall be construed to protect any director or officer of the
Trust or any director or officer of the Advisor from liability in violation of
Sections 17(h) and (i) of the Investment Company Act of 1940.

VI. LIMITATION OF TRUST'S LIABILITY. The Advisor acknowledges that it has
received notice of and accepts the limitations of the Trust's liability as set
forth in its Declaration of Trust. The Advisor agrees that the Trust's
obligations hereunder shall be limited to the Series and to its assets and that
the Advisor shall not seek satisfaction of any such obligation from the
shareholders of the Series nor from any trustee, officer, employee or agent of
the Trust.

VII. RENEWAL, TERMINATION AND AMENDMENT. The term of this agreement shall
be from the date first written above, and shall continue in effect , unless
sooner terminated as provided herein, for two years from such date, and shall
continue in effect with respect to a Series from year to year thereafter only so
long as such continuance is specifically approved at least annually by the vote
of either a majority of the outstanding voting securities of that Series or a
majority of the Trust's trustees, and the vote of a majority of the Trust's
trustees who are neither parties to the agreement nor interested persons of any
such party, cast in person at a meeting called for the purpose of voting on such
approval. "Approved at least annually" shall mean approval occurring, with
respect to the first continuance of the agreement, during the 90 days prior to
and including the date of its termination in the absence of such approval, and
with respect to any subsequent continuance, during the 90 days prior to and
including the first anniversary of the date upon which the most recent previous
annual continuance of this agreement became effective. This agreement may be
terminated at any time without payment of any penalty, by the board of trustees
of the Trust or, with respect to a Series, by a vote of the majority of the
outstanding voting securities of such Series, upon 60 days' written notice to
the Advisor, and by the Advisor upon 60 days' written notice to the Trust. This
agreement shall terminate automatically in the event of its assignment. The
terms "assignment" and "vote of a majority of the outstanding voting securities"
shall have the meanings set forth for such terms in the Investment Company Act
of 1940 and Rule 18f-2 thereunder.

VIII. SEVERABILITY. If any provision of this agreement shall be held or
made invalid by a court decision, statute, rule or similar authority, the
remainder of this agreement shall not be affected thereby.

IX. APPLICABLE LAW. This agreement shall be construed in accordance with
the laws of the State of California.

In witness whereof, the parties hereto have caused this instrument to be
executed by their officers designated below on the day and year first written
above.

BENHAM INVESTMENT TRUST

By /s/John T. Kataoka
John T. Kataoka, President

BENHAM MANAGEMENT CORPORATION

By /s/James M. Benham
James M. Benham, President

Consent Of Independent Auditors

The Board of Trustees and Shareholders
Benham Investment Trust:

We consent to the inclusion in Benham Investment Trust Post-Effective Amendment
No. 3 to the Registration Statement No. 33-65170 on Form N-1A under the
Securities Act of 1933 and Amendment No. 4 to the Registration Statement No.
811-7822 filed on Form N-1A under the Investment Company Act of 1940 of our
report dated April 4, 1996 on the financial statements and financial highlights
of Benham Investment Trust for the periods indicated therein, which reports have
been incorporated by reference into the Statements of Additional Information of
Benham Investment Trust. We also consent to the reference to our firm under the
heading "Financial Highlights" in the Prospectus of the Benham Investment Trust
and under the heading "About Benham Investment Trust" in the Statements of
Additional Information which are incorporated by reference in the Prospectuses.

/s/ KPMG Peat Marwick LLP

San Francisco, California
April 19, 1996

BENHAM PRIME MONEY MARKET FUND
YIELD CALCULATION
FEBRUARY 29, 1996

365/7
Effective Yield: = [(Base Period Return + 1) ] - 1

7 Day Yield = 4.97%

7 Day Effective Yield = 5.09%

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned, BENHAM INVESTMENT
TRUST, hereinafter called the "Trust" and certain trustees and officers of the
Trust, do hereby constitute and appoint James M. Benham, James E. Stowers, III,
William M. Lyons, Douglas A. Paul, and Patrick A. Looby, and each of them
individually, their true and lawful attorneys and agents to take any and all
action and execute any and all instruments which said attorneys and agents may
deem necessary or advisable to enable the Trust to comply with the Securities
Act of 1933 and/or the Investment Company Act of 1940, as amended, and any rules
regulations, orders, or other requirements of the United States Securities and
Exchange Commission thereunder, in connection with the registration under the
Securities Act of 1933 and/or the Investment Company Act of 1940, as amended,
including specifically, but without limitation of the foregoing, power and
authority to sign the name of the Trust in its behalf and to affix its seal, and
to sign the names of each of such trustees and officers in their capacities as
indicated, to any amendment or supplement to the Registration Statement filed
with the Securities and Exchange Commission under the Securities Act of 1933
and/or the Investment Company Act of 1940, as amended, and to any instruments or
documents filed or to be filed as a part of or in connection with such
Registration Statement; and each of the undersigned hereby ratifies and confirms
all that said attorneys and agents shall do or cause to be done by virtue
hereof.

IN WITNESS WHEREOF, the Trust has caused this Power to be executed by
its duly authorized officers on this the 4th day of March, 1996

BENHAM INVESTMENT TRUST
(A Massachusetts Business Trust)

By: /s/ James M. Benham
James M. Benham, President

SIGNATURE AND TITLE

/s/ James M. Benham /s/ Ezra Solomon
James M. Benham Ezra Solomon
Chairman Director

/s/ Albert A. Eisenstat /s/ Isaac Stein
Albert A. Eisenstat Isaac Stein
Director Director

/s/ Ronald J. Gilson /s/ Jeanne D. Wohlers
Ronald J. Gilson Jeanne D. Wohlers
Director Director

/s/ Myron S. Scholes /s/James E. Stowers III
Myron S. Scholes James E. Stowers, III
Director Director

/s/Kenneth E. Scott /s/ Maryanne Roepke
Kenneth E. Scott Maryanne Roepke
Director Treasurer

Attest:

By: /s/ Douglas A. Paul
Douglas A. Paul, Secretary

<ARTICLE> 6
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<NUMBER> 1
<NAME> BENHAM PRIME MONEY MARKET FUND

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<PER-SHARE-NII> 0.056
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0.056
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1
<EXPENSE-RATIO> 0.48
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>