NORTHSTAR INVESTMENT MANAGEMENT CORPORATION
TWO PICKWICK PLAZA
GREENWICH, CONNECTICUT 06830
(203) 863-6216
Via EDGAR Transmission
August 2, 1996
Securities and Exchange Commission
450 Fifth Street
Washington, D.C. 20549
RE: Northstar Advantage Funds
Northstar Advantage Trust - No. 33-67852/811-7978
Gentlemen:
Transmitted herewith for filing pursuant to Rule 497(e) under the Securities Act
of 1933 is a supplement, dated August 2, 1996, to the combined Prospectus dated
February 29, 1996 for the above-named registrant.
The supplement filed herewith reflects name changes to the Funds, a new
sub-advisory arrangement relating to one of the Funds, identifies new portfolio
managers, and discloses an incentive program for certain registered
representatives.
Should you have any questions regarding this submission, please contact the
undersigned at (203) 863-6216.
Sincerely,
/s/
Stephanie L. Beckner
<PAGE>
THE NORTHSTAR FUNDS
Prospectus Supplement dated August 2, 1996
to Prospectus dated February 29, 1996
Effective August 1, 1996, the Funds no longer contain the term "Advantage" in
their names. In addition, Northstar Advantage Income Fund has been renamed
Northstar Balance Sheet Opportunities Fund.
THE FOLLOWING INFORMATION SUPPLEMENTS OR REPLACES THE INFORMATION CONTAINED IN
THE SECTION OF THE FUNDS' PROSPECTUS ENTITLED "MANAGEMENT OF THE FUNDS":
Effective August 1, 1996, Margaret Patel and John W. Fisher will serve as
co-portfolio managers of the Northstar Income and Growth Fund ("the Fund"). Ms.
Patel will make all determinations related to the allocation of the Fund's
assets, will direct all trades and will remain the person primarily responsible
for investments in convertible and fixed income securities. Mr. Fisher will
manage the portion of the Fund's assets allocated for Investment in common
stocks. Currently, and for the past five years, Mr. Fisher has been the
controlling principal, president and sole director of Wilson/Bennett Capital
Management, Inc. ("Wilson/Bennett").
Wilson/Bennett has been retained as subadviser to the Fund with respect to the
common stock portfolio of the Fund pursuant to a Subadvisory Agreement (the
"Agreement") between Wilson/Bennett and Northstar Investment Management
Corporation ("NIMC"). NIMC will designate the percentage of Fund assets to be
managed by Wilson/Bennett and will continue to select and communicate purchase
and sale orders to brokers and dealers who execute orders for the Fund.
The Agreement provides that NIMC, not the Fund, will pay Wilson/Bennett an
annual fee, calculated and accrued daily and paid monthly, equal to 0.20 of 1%
of the first $125 Million of average daily net assets of the Fund managed by
Wilson/Bennett, increasing to 0.25 of 1% for the next $125 million, and to 0.30
of 1% for assets managed in excess of $250 million. The Fund's annual advisory
fee will remain at 0.75 of 1% of the Fund's average daily net assets.
In addition to serving as a primary portfolio manager for Northstar Income and
Growth Fund, Ms. Patel serves as primary portfolio manager for Northstar
Government Securities Fund and Northstar Strategic Income Fund.
Thomas Ole Dial serves as primary portfolio manager for Northstar High Yield
Fund and Northstar High Total Return Fund. In addition, Mr. Dial serves as
co-manager with Peter Bakst for Northstar Capital Fund. Mr. Bakst has been
employed by Northstar since June, 1996. From November 1995 through May 1996, Mr.
Bakst served as Director-High Yield Group for CS First Boston. From March 1995
through September 1995 he was president of Presidio Capital Management and from
April 1989 through February 1995 he was a Managing Director of BT Securities
Corp.
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION CONTAINED IN THE SECTION
OF THE FUNDS' PROSPECTUS ENTITLED "HOW TO PURCHASE SHARES":
The Underwriter is sponsoring an incentive program for registered
representatives for Washington Square Securities, Inc. through August 30, 1996
in connection with the sale by its members of shares of the Fund. The
Underwriter has agreed to provide the following to members who qualify with
respect to cumulative sales of all classes of shares of the Funds reaching
designated levels: (i) gift certificates of $25 and $50 for combined total
sales, respectively of $10,000 and $50,000; (ii) merchandise valued at $100 for
total sales of $100,000; and (iii) one or two round trip airline tickets within
the continental United States for total sales, respectively, of $250,000 and
$400,000. Different awards of equal value or the cash equivalent of awards may
be substituted.
THIS SUPPLEMENT SUPERSEDES ALL PRECEDING SUPPLEMENTS
