THE
NORTHSTAR
FUNDS
PROSPECTUS
March 1, 1999,
As supplemented October 1, 1999
This supplement supersedes all prior supplements.
[GRAPHIC OMITTED]
This prospectus contains important information about investing in the Northstar
Funds. In this prospectus, we have divided our funds into three categories:
GROWTH FUNDS: the Special Fund, Mid-Cap Growth Fund, Growth Fund, Growth + Value
Fund, International Value Fund, Emerging Markets Value Fund and Research
Enhanced Index Fund; INCOME AND GROWTH FUNDS: the Income and Growth Fund; and
INCOME FUNDS: the Government Securities Fund, High Yield Fund, High Total Return
Fund II and High Total Return Fund. Please note that your investment: is not a
bank deposit, is not insured or guaranteed by the FDIC, the Federal Reserve
Board or any other government agency, is affected by market fluctuations --
there is no guarantee that the funds will achieve their objectives. As with all
mutual funds, the Securities and Exchange Commission (SEC) has not approved or
disapproved these securities nor has the SEC judged whether the information in
this prospectus is accurate or adequate. Any representation to the contrary is a
criminal offense.
<PAGE>
WHAT'S
INSIDE
- --------------------------------------------------------------------------------
[CLIPART] OBJECTIVE These pages contain a description of each of our funds
included in this prospectus, including its objective,
[CLIPART] INVESTMENT investment strategy, risks and portfolio manager.
STRATEGY
You'll also find:
[CLIPART] WHAT What you pay to invest. A list of the fees and expenses
YOU PAY you pay -- both directly and indirectly -- when you invest
TO INVEST in A fund.
[CLIPART] RISKS
[CLIPART] HOW THE How the fund has performed. A chart that shows the fund's
FUND HAS financial performance for the past ten years (or since
PERFORMED inception, if shorter).
- --------------------------------------------------------------------------------
An introduction to the Northstar family of funds 1
Northstar Growth Funds
Special Fund 2
Mid-Cap Growth Fund 4
Growth Fund 6
Growth + Value Fund 8
International Value Fund 10
Emerging Markets Value Fund 12
Research Enhanced Index Fund 14
Northstar Income and Growth Funds
Income and Growth Fund 16
Northstar Income Funds
Government Securities Fund 18
High Yield Fund 20
High Total Return Fund II 22
High Total Return Fund 24
Meet the portfolio managers 26
Your guide to buying, selling and exchanging shares of Northstar funds 34
Mutual fund earnings and your taxes 42
Financial highlights 44
Where to go for more information 55
<PAGE>
INTRODUCTION TO
THE NORTHSTAR
FAMILY OF FUNDS
- --------------------------------------------------------------------------------
Risk is the potential that your investment will lose money or not earn as much
as you hope. All mutual funds have varying degrees of risk, depending on the
securities they invest in. Please read this prospectus carefully to be sure you
understand the principal risks and strategies associated with each of our funds.
You should consult the Statement of Additional Information (SAI) for a complete
list of the risks and strategies.
[CLIPART]
If you have any questions about the Northstar family of funds or about choosing
suitable investments, please call us at 1-800-595-7827.
- --------------------------------------------------------------------------------
Year 2000 update: Northstar, the Sub-Advisers, Administrator and other service
providers are taking steps to address any year 2000-related computer problems.
However, as with all companies that rely on computer systems to process
date-related information, there is some risk that these problems could disrupt
the funds' operations and/or the financial markets generally. There is also the
risk that a fund's performance may be adversely affected if the value of its
portfolio holdings decreases due to year 2000-related computer problems.
- --------------------------------------------------------------------------------
This prospectus is designed to help you make informed decisions about your
investments. In order to make it easy for you to find what you're looking for,
we have divided the Northstar family of funds into three categories:
GROWTH FUNDS
Our Growth Funds focus on long-term growth by investing primarily in equities.
They will suit you if you:
o are investing for the long-term - at least several years
o are willing to accept higher risk in exchange for long-term growth.
INCOME AND GROWTH FUNDS
Our Income and Growth Fund seeks income and growth of capital.
It will suit you if you:
o want both regular income and capital appreciation
o are looking for greater growth potential than that offered by the Income
Funds, but don't feel comfortable with the level of risk associated with
the Growth Funds.
INCOME FUNDS
Northstar offers both aggressive and conservative Income Funds. Both offer
regular income, but some take higher risks to attain higher returns.
They will suit you if you:
o want a regular stream of income
o want greater growth potential than a money market fund
o are willing to accept more risk than a money market fund.
1
<PAGE>
NORTHSTAR Portfolio manager
SPECIAL Mary Lisanti
FUND
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OBJECTIVE [CLIPART]
This fund seeks capital appreciation by investing primarily in a diversified
portfolio of domestic equity securities on the basis of their potential for
growth.
INVESTMENT STRATEGY [CLIPART]
The fund invests primarily in the common stock of smaller, lesser-known U.S.
companies that the portfolio manager feels have above average prospects for
growth. Smaller companies are companies with market capitalizations that fall
within the range of companies in the Russell 2000 Index. The market
capitalization range will change as the range of the companies included in the
Russell 2000 changes.
The portfolio manager uses a disciplined investment process, which includes
extensive database screening, frequent fundamental research, identification and
implementation of a thematic approach in structuring the portfolio and a sell
discipline. Themes attempt to articulate the major social, economic and
technological trends that are likely to shape the future of business and
commerce over the next three to five years, and provide a framework for
identifying the industries and companies expected to benefit most. This top down
approach is combined with rigorous fundamental research (a bottoms up approach)
to guide stock selection and portfolio structure.
In periods of unusual market conditions, the fund may temporarily invest part or
all of its assets in cash or high quality money market securities. In these
circumstances, the fund may not achieve its objective.
- --------------------------------------------------------------------------------
WHAT YOU PAY TO INVEST [CLIPART]
There are two types of fees and expenses when you invest in mutual funds: fees,
including sales charges, you pay directly when you buy or sell shares, and
operating expenses paid each year by the fund.
Fees you pay directly
Class A Class B Class C Class T
- --------------------------------------------------------------------------------
Maximum sales charge on your
investment (as a % of offering price) % 4.75 none none none
- --------------------------------------------------------------------------------
Maximum deferred sales charge
(as a % of purchase or sale price,
whichever is less) % none(1) 5.00(2) 1.00(2) 4.00(2)
- --------------------------------------------------------------------------------
Operating expenses paid each year by the fund
(as a % of average net assets)
Class A Class B Class C Class T
- --------------------------------------------------------------------------------
Management fee % 0.75 0.75 0.75 0.75
- --------------------------------------------------------------------------------
Distribution and service (12b-1) fees % 0.30 1.00 1.00 0.95
- --------------------------------------------------------------------------------
Other expenses % 0.42 0.43 0.47 0.40
- --------------------------------------------------------------------------------
Total fund operating expenses % 1.47 2.18 2.22 2.10
- --------------------------------------------------------------------------------
- ----------
(1) Except for purchases of $1 million or more, when you sell any of the
shares within 18 months of when you bought them. Please see page 36 for
details.
(2) This charge decreases over time. Please see page 36 for details.
Example
Here's an example of what you would pay in expenses if you invested $10,000,
reinvested all your dividends, the fund earned an average annual return of 5%,
and annual operating expenses remained at the current level. Keep in mind that
this is only an example - actual expenses and performance may vary.
Year 1 Year 3 Year 5 Year 10
- --------------------------------------------------------------------------------
Class A
if you sell your shares $ 617 918 1,240 2,149
- --------------------------------------------------------------------------------
Class B
if you sell your shares $ 721 982 1,369 2,321(3)
if you don't sell your shares $ 221 682 1,169 2,321(3)
- --------------------------------------------------------------------------------
Class C
if you sell your shares $ 325 694 1,190 2,554
if you don't sell your shares $ 225 694 1,190 2,554
- --------------------------------------------------------------------------------
Class T
if you sell your shares $ 613 858 1,129 2,258(4)
if you don't sell your shares $ 213 658 1,129 2,258(4)
- --------------------------------------------------------------------------------
- ----------
(3) Class B shares convert to Class A shares after year 8. This figure uses
Class A expenses for years 9 and 10.
(4) Class T shares convert to Class A shares after year 8. This figure uses
Class A expenses for years 9 and 10.
2 Northstar Special Fund
<PAGE>
NORTHSTAR
SPECIAL
FUND
- --------------------------------------------------------------------------------
RISKS [CLIPART]
All mutual funds involve risk - some more than others - and there's always the
chance that you could lose money or not earn as much as you hope.
Every fund is affected by the economy and by the investment decisions portfolio
managers make. Because it invests in equities of small and mid-sized companies,
this fund's performance may go up or down rapidly depending on market
conditions.
The fund's investments in smaller companies may be subject to more abrupt or
erratic movements in price because:
o the securities of smaller companies are traded in lower volume
o smaller companies are more likely to experience changes in earnings and
growth prospects than the securities of larger, more established companies
o the value of the securities depends on the success of products or
technologies that are in a relatively early stage of development and that
may not have been tested.
The fund trades securities actively. This may generate taxable capital gains,
and generally increases trading costs, which can lower performance.
- --------------------------------------------------------------------------------
HOW THE FUND HAS PERFORMED [CLIPART]
The bar chart below shows you how the fund's performance has varied from year to
year for the past 10 years, while the table below compares the fund's long-term
performance with the Russell 2000 Index. This information may help provide an
indication of the fund's risks and potential rewards. All figures assume
reinvestment of dividends and distributions. Looking at how a fund has performed
in the past is important - but it's no guarantee of how it will perform in the
future.
Year by year total return (%)(1)
[The following information was depicted as a bar chart in the printed material]
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
22.20 -8.83 57.27 14.54 20.16 -4.86 11.34 17.47 14.29 6.94
Best and worst quarterly performance during this period:
4th quarter 1998: up 28.63%
3rd quarter 1998: down 24.18%
- ----------
(1) These figures are as of December 31 of each year. They do not reflect
sales charges and would be lower if they did.
Average annual total return(2)
Russell
2000
Class A Class B Class C Class T Index(3)
- --------------------------------------------------------------------------------
One year, ended
December 31, 1998 % 2.50 1.84 5.81 2.94 -2.54
- --------------------------------------------------------------------------------
Five years, ended
December 31, 1998 % N/A N/A N/A 8.75 11.87
- --------------------------------------------------------------------------------
Ten years, ended
December 31, 1998 % N/A N/A N/A 13.88 12.92
- --------------------------------------------------------------------------------
Since inception(3) % 13.25 13.62 14.00 10.20 11.33
- --------------------------------------------------------------------------------
- ----------
(2) These figures reflect sales charges.
(3) The Russell 2000 Index measures the performance of securities of small
companies. The since inception return for the Index is for the Class T
time period.
(4) Classes A, B and C commenced operations on June 5, 1995. Class T commenced
operations on February 3, 1986.
[CLIPART] If you have any questions, please call 1-800-595-7827.
Northstar Special Fund 3
<PAGE>
NORTHSTAR Portfolio managers
MID-CAP Mary Lisanti
GROWTH FUND Jeffrey Bernstein
- --------------------------------------------------------------------------------
OBJECTIVE [CLIPART]
This fund seeks long-term capital appreciation by investing in a diversified
portfolio of equity securities.
INVESTMENT STRATEGY [CLIPART]
The fund invests primarily in the common stocks of mid-sized U.S. companies that
the portfolio managers feel have above average prospects for growth. Mid-sized
companies are companies with market capitalizations that fall within the range
of companies in the S&P MidCap 400 Index. The market capitalization range will
change as the range of the companies included in the S&P MidCap 400 changes.
The portfolio managers use a disciplined investment process, which includes
extensive database screening, frequent fundamental research, identification and
implementation of a thematic approach in structuring the portfolio and a sell
discipline. Themes attempt to articulate the major social, economic and
technological trends that are likely to shape the future of business and
commerce over the next three to five years, and provide a framework for
identifying the industries and companies expected to benefit most. This top down
approach is combined with rigorous fundamental research (a bottoms up approach)
to guide stock selection and portfolio structure.
In periods of unusual market conditions, the fund may temporarily invest part or
all of its assets in cash or high quality money market securities. In these
circumstances, the fund may not achieve its objective.
- --------------------------------------------------------------------------------
WHAT YOU PAY TO INVEST [CLIPART]
There are two types of fees and expenses when you invest in mutual funds: fees,
including sales charges, you pay directly when you buy or sell shares, and
operating expenses paid each year by the fund.
Fees you pay directly
Class A Class B Class C
- --------------------------------------------------------------------------------
Maximum sales charge on your
investment (as a % of offering price) % 4.75 none none
- --------------------------------------------------------------------------------
Maximum deferred sales charge
(as a % of purchase or sale price,
whichever is less) % none(1) 5.00(2) 1.00(2)
- --------------------------------------------------------------------------------
- ----------
(1) Except for purchases of $1 million or more, when you sell any of the
shares within 18 months of when you bought them. Please see page 36 for
details.
(2) This charge decreases over time. Please see page 36 for details.
Operating expenses paid each year by the fund
(as a % of average net assets)
Class A Class B Class C
- --------------------------------------------------------------------------------
Management fee(3) % 1.00 1.00 1.00
- --------------------------------------------------------------------------------
Distribution and service (12b-1) fees % 0.30 1.00 1.00
- --------------------------------------------------------------------------------
Other expenses(3) % 1.12 1.27 1.22
- --------------------------------------------------------------------------------
Total fund operating expenses(3) % 2.42 3.27 3.22
- --------------------------------------------------------------------------------
- ----------
(3) The adviser and administrator have agreed to waive or reimburse fees.
These figures are before the adviser reimbursed certain expenses. After
reimbursement other expenses would have been 0.50% for Class A, Class B
and Class C; and total fund operating expenses would have been 1.80% for
Class A, and 2.50% for Class B and Class C.
Example
Here's an example of what you would pay in expenses if you invested $10,000,
reinvested all your dividends, the fund earned an average annual return of 5%,
and annual operating expenses remained at the estimated level. Keep in mind that
this is only an example - actual expenses and performance may vary.
Year 1 Year 3 Year 5 Year 10
- --------------------------------------------------------------------------------
Class A
if you sell your shares $ 708 1,194 1,704 3,100
- --------------------------------------------------------------------------------
Class B
if you sell your shares $ 830 1,307 1,907 3,369(4)
if you don't sell your shares $ 330 1,007 1,707 3,369(4)
- --------------------------------------------------------------------------------
Class C
if you sell your shares $ 425 992 1,683 3,522
if you don't sell your shares $ 325 992 1,683 3,522
- --------------------------------------------------------------------------------
- ----------
(4) Class B shares convert to Class A shares after year 8. This figure uses
Class A expenses for years 9 and 10.
4 Northstar Mid-Cap Growth Fund
<PAGE>
NORTHSTAR
MID-CAP
GROWTH FUND
- --------------------------------------------------------------------------------
RISKS [CLIPART]
All mutual funds involve risk - some more than others - and there's always the
chance that you could lose money or not earn as much as you hope.
Every fund is affected by the economy and by the investment decisions portfolio
managers make. Because it invests in equities of small and mid-sized companies,
this fund's performance may go up or down rapidly depending on market
conditions.
The fund's investments in smaller companies may be subject to more abrupt or
erratic movements in price because:
o the securities of smaller companies are traded in lower volume
o smaller companies are more likely to experience changes in earnings and
growth prospects than the securities of larger, more established companies
o the value of the securities depends on the success of products or
technologies that are in a relatively early stage of development and that
may not have been tested.
The fund trades securities actively. This may generate taxable capital gains,
and generally increases trading costs, which can lower performance.
- --------------------------------------------------------------------------------
HOW THE FUND HAS PERFORMED [CLIPART]
This fund does not have a performance history because it was formed on August
20, 1998.
[CLIPART] If you have any questions, please call 1-800-595-7827.
Northstar Mid-Cap Growth Fund 5
<PAGE>
NORTHSTAR Portfolio manager
GROWTH Mary Lisanti
FUND
- --------------------------------------------------------------------------------
OBJECTIVE [CLIPART]
This fund seeks long-term growth of capital by investing primarily in domestic
common stocks.
INVESTMENT STRATEGY [CLIPART]
The fund invests primarily in U.S. companies that the portfolio manager feels
have above average prospects for growth.
Under normal market conditions, the fund invests at least 65% of its total
assets in securities purchased on the basis of the potential for capital
appreciation.
The portfolio manager uses a disciplined investment process, which includes
extensive database screening, frequent fundamental research, identification and
implementation of a thematic approach in structuring the portfolio and a sell
discipline. Themes attempt to articulate the major social, economic and
technological trends that are likely to shape the future of business and
commerce over the next three to five years, and provide a framework for
identifying the industries and companies expected to benefit most. This top down
approach is combined with rigorous fundamental research (a bottoms up approach)
to guide stock selection and portfolio structure.
In periods of unusual market conditions, the fund may temporarily invest part or
all of its assets in cash or high quality money market securities. In these
circumstances, the fund may not achieve its objective.
- --------------------------------------------------------------------------------
WHAT YOU PAY TO INVEST [CLIPART]
There are two types of fees and expenses when you invest in mutual funds: fees,
including sales charges, you pay directly when you buy or sell shares, and
operating expenses paid each year by the fund.
Fees you pay directly
Class A Class B Class C Class T
- --------------------------------------------------------------------------------
Maximum sales charge on your
investment (as a % of offering price) % 4.75 none none none
- --------------------------------------------------------------------------------
Maximum deferred sales charge
(as a % of purchase or sale price,
whichever is less) % none(1) 5.00(2) 1.00(2) 4.00(2)
- --------------------------------------------------------------------------------
- ----------
(1) Except for purchases of $1 million or more, when you sell any of the
shares within 18 months of when you bought them. Please see page 36 for
details.
(2) This charge decreases over time. Please see page 36 for details.
Operating expenses paid each year by the fund
(as a % of average net assets)
Class A Class B Class C Class T
- --------------------------------------------------------------------------------
Management fee % 0.75 0.75 0.75 0.75
- --------------------------------------------------------------------------------
Distribution and service (12b-1) fees % 0.30 1.00 1.00 0.95
- --------------------------------------------------------------------------------
Other expenses % 0.32 0.38 0.38 0.35
- --------------------------------------------------------------------------------
Total fund operating expenses % 1.37 2.13 2.13 2.05
- --------------------------------------------------------------------------------
Example
Here's an example of what you would pay in expenses if you invested $10,000,
reinvested all your dividends, the fund earned an average annual return of 5%,
and annual operating expenses remained at the current level. Keep in mind that
this is only an example -- actual expenses and performance may vary.
Year 1 Year 3 Year 5 Year 10
- --------------------------------------------------------------------------------
Class A
if you sell your shares $ 608 888 1,189 2,043
- --------------------------------------------------------------------------------
Class B
if you sell your shares $ 716 967 1,344 2,266(3)
if you don't sell your shares $ 216 667 1,144 2,266(3)
- --------------------------------------------------------------------------------
Class C
if you sell your shares $ 316 667 1,144 2,462
if you don't sell your shares 216 667 1,144 2,462
- --------------------------------------------------------------------------------
Class T
if you sell your shares $ 608 843 1,103 2,203(4)
if you don't sell your shares 208 643 1,103 2,203(4)
- --------------------------------------------------------------------------------
Class I
if you sell your shares $ 102 318 552 1,225
- --------------------------------------------------------------------------------
- ----------
(3) Class B shares convert to Class A shares after year 8. This figure uses
Class A expenses for years 9 and 10.
(4) Class T shares convert to Class A shares after year 8. This figure uses
Class A expenses for years 9 and 10.
6 Northstar Growth Fund
<PAGE>
NORTHSTAR
GROWTH
FUND
- --------------------------------------------------------------------------------
RISKS [CLIPART]
All mutual funds involve risk - some more than others - and there's always the
chance that you could lose money or not earn as much as you hope.
Every fund is affected by the economy and by the investment decisions portfolio
managers make. Because it invests in equities of small and mid-sized companies,
this fund's performance may go up or down rapidly depending on market
conditions.
The fund's investments in smaller companies may be subject to more abrupt or
erratic movements in price because:
o the securities of smaller companies are traded in lower volume
o smaller companies are more likely to experience changes in earnings and
growth prospects than the securities of larger, more established companies
o the value of the securities depends on the success of products or
technologies that are in a relatively early stage of development and that
may not have been tested.
The fund trades securities actively. This may generate taxable capital gains,
and generally increases trading costs, which can lower performance.
- --------------------------------------------------------------------------------
HOW THE FUND HAS PERFORMED [CLIPART]
The bar chart below shows you how the fund's performance has varied from year to
year for the past 10 years, while the table below compares the fund's long-term
performance with the S&P 500 Index. This information may help provide an
indication of the fund's risks and potential rewards. All figures assume
reinvestment of dividends and distributions. Looking at how a fund has performed
in the past is important - but it's no guarantee of how it will perform in the
future.
Year by year total return (%)(1)
[The following information was depicted as a bar chart in the printed material]
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
24.25 -5.24 38.10 8.05 10.36 -7.66 24.40 19.90 22.94 22.78
Best and worst quarterly performance during this period:
4th quarter 1998: up 31.14%
4th quarter 1987: down 21.57%
- ----------
(1) These figures are as of December 31 of each year. They do not reflect
sales charges and would be lower if they did.
Average annual total return(2)
S&P
500
Class A Class B Class C Class T Index(3)
- --------------------------------------------------------------------------------
One year, ended
December 31, 1998 % 17.74 17.69 21.90 18.79 28.57
- --------------------------------------------------------------------------------
Five years, ended
December 31, 1998 % N/A N/A N/A 15.76 24.05
- --------------------------------------------------------------------------------
Ten years, ended
December 31, 1998 % N/A N/A N/A 14.96 19.19
- --------------------------------------------------------------------------------
Since inception(3) % 20.61 21.16 21.50 13.50 17.90
- --------------------------------------------------------------------------------
- ----------
(2) These figures reflect sales charges.
(3) The S&P 500 Index measures the performance of securities of large
companies. The since inception return for the Index is for the Class T
time period.
(4) Classes A, B and C commenced operations on June 5, 1995. Class T commenced
operations on February 3, 1986.
[CLIPART] If you have any questions, please call 1-800-595-7827.
Northstar Growth Fund 7
<PAGE>
NORTHSTAR Portfolio manager
GROWTH + Louis Navellier
VALUE FUND
- --------------------------------------------------------------------------------
OBJECTIVE [CLIPART]
This fund seeks capital appreciation by investing in a diversified portfolio of
equity securities.
INVESTMENT STRATEGY [CLIPART]
The fund invests primarily in companies the portfolio manager identifies as
either growth or value companies through quantitative analysis.
Growth companies have above average earnings or sales growth and higher price to
earnings ratios. Value companies are temporarily undervalued or out of favor,
and tend to have lower price to book ratios relative to price and higher returns
on equity. The percentage of fund assets allocated to the two different kinds of
companies varies depending on the portfolio manager's assessment of economic
conditions and investment opportunities.
Under normal market conditions, the fund invests at least 65% of its total
assets in securities purchased on the basis of the potential for capital
appreciation. The fund also holds preferred stocks and convertible securities.
In periods of unusual market conditions, the fund may temporarily invest part or
all of its assets in cash or high quality money market securities. In these
circumstances, the fund may not achieve its objective.
- --------------------------------------------------------------------------------
WHAT YOU PAY TO INVEST [CLIPART]
There are two types of fees and expenses when you invest in mutual funds: fees,
including sales charges, you pay directly when you buy or sell shares, and
operating expenses paid each year by the fund.
Fees you pay directly
Class A Class B Class C
- --------------------------------------------------------------------------------
Maximum sales charge on your
investment (as a % of offering price) % 4.75 none none
- --------------------------------------------------------------------------------
Maximum deferred sales charge
(as a % of purchase or sale price,
whichever is less) % none(1) 5.00(2) 1.00(2)
- --------------------------------------------------------------------------------
- ----------
(1) Except for purchases of $1 million or more, when you sell any of the
shares within 18 months of when you bought them. Please see page 36 for
details.
(2) This charge decreases over time. Please see page 36 for details.
Operating expenses paid each year by the fund
(as a % of average net assets)
Class A Class B Class C
- --------------------------------------------------------------------------------
Management fee % 1.00 1.00 1.00
- --------------------------------------------------------------------------------
Distribution and service (12b-1) fees % 0.30 1.00 1.00
- --------------------------------------------------------------------------------
Other expenses % 0.42 0.45 0.46
- --------------------------------------------------------------------------------
Total fund operating expenses % 1.72 2.45 2.46
- --------------------------------------------------------------------------------
Example
Here's an example of what you would pay in expenses if you invested $10,000,
reinvested all your dividends, the fund earned an average annual return of 5%,
and annual operating expenses remained at the current level. Keep in mind that
this is only an example - actual expenses and performance may vary.
Year 1 Year 3 Year 5 Year 10
- --------------------------------------------------------------------------------
Class A
if you sell your shares $ 642 991 1,364 2,409
- --------------------------------------------------------------------------------
Class B
if you sell your shares $ 748 1,064 1,506 2,603(3)
if you don't sell your shares $ 248 764 1,306 2,603(3)
- --------------------------------------------------------------------------------
Class C
if you sell your shares $ 349 767 1,311 2,796
if you don't sell your shares $ 249 767 1,311 2,796
- --------------------------------------------------------------------------------
- ----------
(3) Class B shares convert to Class A shares after year 8. This figure uses
Class A expenses for years 9 and 10.
8 Northstar Growth + Value Fund
<PAGE>
NORTHSTAR
GROWTH +
VALUE FUND
- --------------------------------------------------------------------------------
RISKS [CLIPART]
All mutual funds involve risk - some more than others - and there's always the
chance that you could lose money or not earn as much as you hope.
Every fund is affected by the economy and by the investment decisions portfolio
managers make. Because it invests in equities, this fund's performance may go up
or down rapidly depending on market conditions.
This fund's performance will also be affected if the portfolio manager makes an
inaccurate assessment of economic conditions and investment opportunities, and
chooses growth companies that do not grow as quickly as hoped, or value
companies that continue to be undervalued by the market.
Although the manager invests in value companies to decrease volatility, these
investments may also lower the fund's performance.
The fund's investments in smaller companies may be subject to more abrupt or
erratic movements in price because:
o the securities of smaller companies are traded in lower volume
o smaller companies are more likely to experience changes in earnings and
growth prospects than the securities of larger, more established companies
o the value of the securities depends on the success of products or
technologies that are in a relatively early stage of development and that
may not have been tested.
- --------------------------------------------------------------------------------
HOW THE FUND HAS PERFORMED [CLIPART]
The bar chart below shows you how the fund's performance has varied from year to
year since inception, while the table below compares the fund's long-term
performance with the Russell 2000 Index. This information may help provide an
indication of the fund's risks and potential rewards. All figures assume
reinvestment of dividends and distributions. Looking at how a fund has performed
in the past is important - but it's no guarantee of how it will perform in the
future.
Year by year total return (%)(1)
[The following information was depicted as a bar chart in the printed material]
1997 1998
---- ----
18.10 17.72
Best and worst quarterly performance during this period:
4th quarter 1998: up 29.15%
3rd quarter 1998: down 16.34%
- ----------
(1) These figures are as of December 31 of each year. They do not reflect
sales charges and would be lower if they did.
Average annual total return(2)
Russell
2000
Class A Class B Class C Index(3)
- --------------------------------------------------------------------------------
One year, ended
December 31, 1998 % 12.15 11.77 15.68 -2.54
- --------------------------------------------------------------------------------
Since inception(3) % 12.64 13.22 14.41 9.99
- --------------------------------------------------------------------------------
- ----------
(2) These figures reflect sales charges.
(3) The Russell 2000 Index is an unmanaged index that measures the performance
of securities of small companies.
(4) The fund commenced operations on November 18, 1996.
[CLIPART] If you have any questions, please call 1-800-595-7827.
Northstar Growth + Value Fund 9
<PAGE>
NORTHSTAR Portfolio managers
INTERNATIONAL Charles Brandes
VALUE FUND Jeff Busby
- --------------------------------------------------------------------------------
OBJECTIVE [CLIPART]
This fund seeks long-term capital appreciation.
INVESTMENT STRATEGY [CLIPART]
The fund invests primarily in foreign companies with market capitalizations
greater than $1 billion, but it may hold up to 25% of its assets in companies
with smaller market capitalizations.
The portfolio managers apply the technique of "value investing" by seeking
stocks that their research indicates are priced below their long-term value.
This gives the fund both a possible margin of safety against price declines and
an opportunity for profit.
The fund holds common stocks, preferred stocks, American, European and Global
depository receipts, as well as convertible securities.
Under normal circumstances, the fund will invest at least 65% of its total
assets in securities of companies located in at least three countries other than
the U.S., located in Western Europe, North and South America, Australia, Asia
and other regions. The fund may invest up to the greater of:
o 20% of its assets in any one country or industry, or,
o 150% of the weighting of the country or industry in the MSCI EAFE Index,
as long as the fund meets any industry concentration or diversification
requirements under the Investment Company Act.
In periods of unusual market conditions, the fund may temporarily invest part or
all of its assets in cash or high quality money market securities. In these
circumstances, the fund may not achieve its objective.
- --------------------------------------------------------------------------------
WHAT YOU PAY TO INVEST [CLIPART]
There are two types of fees and expenses when you invest in mutual funds: fees,
including sales charges, you pay directly when you buy or sell shares, and
operating expenses paid each year by the fund.
Fees you pay directly
Class A Class B Class C
- --------------------------------------------------------------------------------
Maximum sales charge on your
investment (as a % of offering price) % 4.75 none none
- --------------------------------------------------------------------------------
Maximum deferred sales charge
(as a % of purchase or sale price,
whichever is less) % none(1) 5.00(2) 1.00(2)
- --------------------------------------------------------------------------------
- ----------
(1) Except for purchases of $1 million or more, when you sell any of the
shares within 18 months of when you bought them. Please see page 36 for
details.
(2) This charge decreases over time. Please see page 36 for details.
Operating expenses paid each year by the fund
(as a % of average net assets)
Class A Class B Class C
- --------------------------------------------------------------------------------
Management fee % 1.00 1.00 1.00
- --------------------------------------------------------------------------------
Distribution and service (12b-1) fees % 0.30 1.00 1.00
- --------------------------------------------------------------------------------
Other expenses % 0.44 0.47 0.47
- --------------------------------------------------------------------------------
Total fund operating expenses % 1.74 2.47 2.47
- --------------------------------------------------------------------------------
Example
Here's an example of what you would pay in expenses if you invested $10,000,
reinvested all your dividends, the fund earned an average annual return of 5%,
and annual operating expenses remained at the current level. Keep in mind that
this is only an example - actual expenses and performance may vary.
Year 1 Year 3 Year 5 Year 10
- --------------------------------------------------------------------------------
Class A
if you sell your shares $ 643 997 1,374 2,429
- --------------------------------------------------------------------------------
Class B
if you sell your shares $ 750 1,070 1,516 2,623(3)
if you don't sell your shares $ 250 770 1,316 2,623(3)
- --------------------------------------------------------------------------------
Class C
if you sell your shares $ 350 770 1,316 2,806
if you don't sell your shares $ 250 770 1,316 2,806
- --------------------------------------------------------------------------------
- ----------
(3) Class B shares convert to Class A shares after year 8. This figure uses
Class A expenses for years 9 and 10.
10 Northstar International Value Fund
<PAGE>
NORTHSTAR
INTERNATIONAL
VALUE FUND
- --------------------------------------------------------------------------------
RISKS [CLIPART]
All mutual funds involve risk - some more than others - and there's always the
chance that you could lose money or not earn as much as you hope.
Every fund is affected by the economy and by the investment decisions portfolio
managers make. Because it invests in equities of foreign companies, this fund
offers international diversification, but its performance may also go up or down
rapidly depending on global or foreign market conditions.
Foreign investments can also be affected by:
o adverse political, social or economic developments in foreign countries
o unfavorable currency exchange rates
o a lack of liquidity in foreign markets
o inadequate or inaccurate information about foreign companies
o accounting, auditing and/or financial reporting standards that are
different from those in the United States.
The fund's investments in smaller companies may be subject to more abrupt or
erratic movements in price because:
o the securities of smaller companies are traded in lower volume
o smaller companies are more likely to experience changes in earnings and
growth prospects than the securities of larger, more established companies
o the value of the securities depends on the success of products or
technologies that are in a relatively early stage of development and that
may not have been tested.
The fund does not currently intend to make use of any derivatives, including
transactions in currency forwards for hedging purposes.
- --------------------------------------------------------------------------------
HOW THE FUND HAS PERFORMED [CLIPART]
The bar chart below shows you how the fund's performance has varied from year to
year since inception, while the table below compares the fund's long-term
performance with the MSCI EAFE Index. This information may help provide an
indication of the fund's risks and potential rewards. All figures assume
reinvestment of dividends and distributions. Looking at how a fund has performed
in the past is important - but it's no guarantee of how it will perform in the
future.
Year by year total return (%)(1)
[The following information was depicted as a bar chart in the printed material]
1996 1997 1998
---- ---- ----
15.23 17.86 13.46
Best and worst quarterly performance during this period:
4th quarter 1998: up 18.81%
3rd quarter 1998: down 14.73%
- ----------
(1) These figures are as of December 31 of each year. They do not reflect
sales charges and would be lower if they did.
Average annual total return(2)
MSCI
EAFE
Class A Class B Class C Index(3)
- --------------------------------------------------------------------------------
One year, ended
December 31, 1998 % 8.10 7.73 11.76 20.00
- --------------------------------------------------------------------------------
Since inception(3) % 13.92 12.04 14.70 11.24
- --------------------------------------------------------------------------------
- ----------
(2) These figures reflect sales charges.
(3) The Morgan Stanley Capital International European Australasian Far East
(MSCI EAFE) Index measures the performance of securities listed on
exchanges in markets in Europe, Australia and the Far East. The since
inception return for the Index is for the Class A time period.
(4) Classes A and C commenced operations on March 6, 1995. Class B commenced
operations on April 18, 1997.
[CLIPART] If you have any questions, please call 1-800-595-7827.
Northstar International Value Fund 11
<PAGE>
NORTHSTAR Portfolio managers
EMERGING Charles Brandes
MARKETS Ian Sunder
VALUE FUND
- --------------------------------------------------------------------------------
OBJECTIVE [CLIPART]
This fund seeks long-term capital appreciation.
INVESTMENT STRATEGY [CLIPART]
The fund invests primarily in companies located in countries with emerging
markets, including companies that may be smaller and lesser-known.
The portfolio managers apply the technique of "value investing" by seeking
stocks that their research indicates are priced below their long-term value.
This gives the fund both a possible margin of safety against price declines and
an opportunity for profit.
The fund holds primarily common stocks, preferred stocks, American, European and
Global depositary receipts, shares of closed-end investment companies, as well
as convertible securities.
Under normal market conditions, the fund will invest at least 65% of its total
assets in securities of companies located in countries with emerging markets.
Countries with emerging markets include those countries that are generally
considered to be emerging market countries by the international financial
community. The fund may invest up to the greater of:
o 20% of its assets in any one country or industry, or,
o 150% of the weighting of the country or industry in the MSCI EMF Index, as
long as the fund meets any industry concentration or diversification
requirements under the Investment Company Act.
In periods of unusual market conditions, the fund may temporarily invest part or
all of its assets in cash or high quality money market securities. In these
circumstances, the fund may not achieve its objective.
- --------------------------------------------------------------------------------
WHAT YOU PAY TO INVEST [CLIPART]
There are two types of fees and expenses when you invest in mutual funds: fees,
including sales charges, you pay directly when you buy or sell shares, and
operating expenses paid each year by the fund.
Fees you pay directly
Class A Class B Class C
- --------------------------------------------------------------------------------
Maximum sales charge on your
investment (as a % of offering price) % 4.75 none none
- --------------------------------------------------------------------------------
Maximum deferred sales charge
(as a % of purchase or sale price,
whichever is less) % none(1) 5.00(2) 1.00(2)
- --------------------------------------------------------------------------------
- ----------
(1) Except for purchases of $1 million or more, when you sell any of the
shares within 18 months of when you bought them. Please see page 36 for
details.
(2) This charge decreases over time. Please see page 36 for details.
Operating expenses paid each year by the fund
(as a % of average net assets)
Class A Class B Class C
- --------------------------------------------------------------------------------
Management fee % 1.00 1.00 1.00
- --------------------------------------------------------------------------------
Distribution and service (12b-1) fees % 0.30 1.00 1.00
- --------------------------------------------------------------------------------
Other expenses % 2.58 2.74 2.87
- --------------------------------------------------------------------------------
Total fund operating expenses % 3.88 4.74 4.87
- --------------------------------------------------------------------------------
Example
Here's an example of what you would pay in expenses if you invested $10,000,
reinvested all your dividends, the fund earned an average return of 5%, and
annual operating expenses remained at the current level. Keep in mind that this
is only an example - actual expenses and performance may vary.
Year 1 Year 3 Year 5 Year 10
- --------------------------------------------------------------------------------
Class A
if you sell your shares $ 847 1,602 2,375 4,384
- --------------------------------------------------------------------------------
Class B
if you sell your shares $ 975 1,728 2,585 4,626(3)
if you don't sell your shares $ 475 1,428 2,385 4,626(3)
- --------------------------------------------------------------------------------
Class C
if you sell your shares $ 587 1,464 2,443 4,902
if you don't sell your shares $ 487 1,464 2,443 4,902
- --------------------------------------------------------------------------------
- ----------
(3) Class B shares convert to Class A shares after year 8. This figure uses
Class A expenses for years 9 and 10.
12 Northstar Emerging Markets Value Fund
<PAGE>
NORTHSTAR
EMERGING
MARKETS
VALUE FUND
- --------------------------------------------------------------------------------
RISKS [CLIPART]
All mutual funds involve risk - some more than others - and there's always the
chance that you could lose money or not earn as much as you hope.
Every fund is affected by the economy and by the investment decisions portfolio
managers make. Because it invests in foreign companies in emerging markets, this
fund's performance may go up or down quite rapidly depending on market
conditions.
Foreign investments can also be affected by the following:
o adverse political, social or economic developments in foreign countries
o unfavorable currency exchange rates
o a lack of liquidity in foreign markets
o inadequate or inaccurate information about foreign companies
o accounting, auditing and/or financial reporting standards that are
different from those in the United States.
Investments in emerging markets are affected by additional risks:
o developing countries have less-mature economic structures and political
systems than those in developed countries
o developing countries may have high inflation and rapidly changing interest
and currency exchange rates.
The fund's investments in smaller companies may be subject to more abrupt or
erratic movements in price because:
o the securities of smaller companies are traded in lower volume
o smaller companies are more likely to experience changes in earnings and
growth prospects than the securities of larger, more established companies
o the value of the securities depends on the success of products or
technologies that are in a relatively early stage of development and that
may not have been tested.
The fund does not currently intend to make use of any derivatives, including
transactions in currency forwards for hedging purposes.
- --------------------------------------------------------------------------------
HOW THE FUND HAS PERFORMED [CLIPART]
The bar chart below shows you how the fund's performance has varied since
inception, while the table below compares the fund's performance with the MSCI
EMF Index. This information may help provide an indication of the fund's risks
and potential rewards. All figures assume reinvestment of dividends and
distributions. Looking at how a fund has performed in the past is important -
but it's no guarantee of how it will perform in the future.
Year by year total return (%)(1)
[The following information was depicted as a bar chart in the printed material]
1998
----
-22,58
- ----------
(1) These figures are as of December 31, 1998. They do not reflect sales
charges and would be lower if they did.
Best and worst quarterly performance during this period:
4th quarter 1998: up 16.95%
2nd quarter 1998: down 24.79%
Average annual total return(2)
MSCI
EMF
Class A Class B Class C Index(3)
- --------------------------------------------------------------------------------
One year, ended
December 31, 1998(3) % -26.27 -26.88 -24.02 -25.34
- --------------------------------------------------------------------------------
- ----------
(2) These figures reflect sales charges.
(3) The Morgan Stanley Capital International Emerging Markets Free (MSCI EMF)
Index measures the performance of securities listed on exchanges in
developing nations throughout the world.
(4) The fund commenced operations on January 1, 1998.
[CLIPART] If you have any questions, please call 1-800-595-7827.
Northstar Emerging Markets Value Fund 13
<PAGE>
NORTHSTAR Portfolio managers
RESEARCH ENHANCED INDEX Timothy Devlin
FUND James Wiess
- --------------------------------------------------------------------------------
OBJECTIVE [CLIPART]
The fund seeks capital appreciation.
INVESTMENT STRATEGY [CLIPART]
The fund invests primarily in companies that make up the S&P 500 Index. Based on
extensive research regarding projected company earnings and dividends, a
valuation model ranks companies in each industry group according to their
relative value. Using this valuation model, the portfolio managers select stocks
for the fund. Within each industry, the fund modestly overweights stocks that
are ranked as undervalued or fairly valued while modestly underweighting or not
holding stocks that appear overvalued. Industry by industry, the fund's assets
are invested so that the fund's industry sector allocations and market cap
weightings closely parallel those of the S&P 500.
By owning a large number of stocks within the S&P 500, with an emphasis on those
that appear undervalued or fairly valued, and by tracking the industry
weightings and other characteristics of that index, the fund seeks returns that
modestly exceed those of the S&P 500 over the long term with virtually the same
level of volatility.
Under normal market conditions, the fund invests at least 80% of its total
assets in common stocks included in the S&P 500. It may also invest in other
common stocks not included in the S&P 500. The fund may also invest in certain
higher-risk investments, including derivatives (generally these investments will
be limited to S&P 500 options).
In periods of unusual market conditions, the fund may temporarily invest part or
all of its assets in cash or high quality money market securities. In these
circumstances, the fund may not achieve its objective.
- --------------------------------------------------------------------------------
WHAT YOU PAY TO INVEST [CLIPART]
There are two types of fees and expenses when you invest in mutual funds: fees,
including sales charges, you pay directly when you buy or sell shares, and
operating expenses paid each year by the fund.
Fees you pay directly
Class A Class B Class C
- --------------------------------------------------------------------------------
Maximum sales charge on your
investment (as a % of offering price) % 4.75 none none
- --------------------------------------------------------------------------------
Maximum deferred sales charge
(as a % of purchase or sale price,
whichever is less) % none(1) 5.00(2) 1.00(2)
- --------------------------------------------------------------------------------
- ----------
(1) Except for purchases of $1 million or more, when you sell any of the
shares within 18 months of when you bought them. Please see page 36 for
details.
(2) This charge decreases over time. Please see page 36 for details.
Operating expenses paid each year by the fund
(as a % of average net assets)
Class A Class B Class C
- --------------------------------------------------------------------------------
Management fee % 0.70 0.70 0.70
- --------------------------------------------------------------------------------
Distribution and service (12b-1) fees % 0.30 1.00 1.00
- --------------------------------------------------------------------------------
Other expenses % 0.25 0.25 0.25
- --------------------------------------------------------------------------------
Total fund operating expenses % 1.25 1.95 1.95
- --------------------------------------------------------------------------------
Example
Here's an example of what you would pay in expenses if you invested $10,000,
reinvested all your dividends, the fund earned an average annual return of 5%,
and annual operating expenses remained at the estimated level. Keep in mind that
this is only an example - actual expenses and performance may vary.
Year 1 Year 3 Year 5 Year 10
- --------------------------------------------------------------------------------
Class A
if you sell your shares $ 596 853 1,129 1,915
- --------------------------------------------------------------------------------
Class B
if you sell your shares $ 698 912 1,252 2,091(3)
if you don't sell your shares $ 198 612 1,052 2,091(3)
- --------------------------------------------------------------------------------
Class C
if you sell your shares $ 298 612 1,052 2,275
if you don't sell your shares $ 198 612 1,052 2,275
- --------------------------------------------------------------------------------
- ----------
(3) Class B shares convert to Class A shares after year 8. This figure uses
Class A expenses for years 9 and 10.
14 Northstar Research Enhanced Index Fund
<PAGE>
NORTHSTAR
RESEARCH ENHANCED INDEX
FUND
- --------------------------------------------------------------------------------
RISKS [CLIPART]
All mutual funds involve risk -- some more than others -- and there's always the
chance that you could lose money or not earn as much as you hope.
Every fund is affected by the economy and by the investment decisions portfolio
managers make. Because it invests in equities, this fund's performance may go up
or down rapidly depending on market conditions.
The portfolio managers try to remain fully invested in companies included in the
S&P 500, and generally do not change this strategy even temporarily, which could
make the fund more susceptible to poor market conditions. In addition, the
portfolio managers' use of derivative instruments may not be successful, and may
lower fund performance, prevent the fund from earning higher returns or increase
the fund's volatility.
- --------------------------------------------------------------------------------
HOW THE FUND HAS PERFORMED [CLIPART]
This fund does not have a performance history because it was formed on December
30, 1998.
[CLIPART] If you have any questions, please call 1-800-595-7827.
Northstar Research Enhanced Index Fund 15
<PAGE>
NORTHSTAR Portfolio manager
INCOME AND This fund is managed by a team
GROWTH FUND of portfolio manager
- --------------------------------------------------------------------------------
OBJECTIVE [CLIPART]
This fund seeks current income balanced with capital appreciation primarily by
investing in dividend paying equity securities, convertible securities, and
investment grade debt securities.
INVESTMENT STRATEGY [CLIPART]
The fund invests in a mix of equity and investment grade debt securities
designed to provide both current income and long-term growth of capital.
Under normal market conditions, the fund invests at least 65% of its total
assets in income-producing securities. It generally holds no more than 30% of
its assets in convertible securities.
In periods of unusual market conditions, the fund may temporarily invest part or
all of its assets in cash or high quality money market securities. In these
circumstances, the fund may not achieve its objective.
- --------------------------------------------------------------------------------
WHAT YOU PAY TO INVEST [CLIPART]
There are two types of fees and expenses when you invest in mutual funds: fees,
including sales charges, you pay directly when you buy or sell shares, and
operating expenses paid each year by the fund.
Fees you pay directly
Class A Class B Class C
- --------------------------------------------------------------------------------
Maximum sales charge on your
investment (as a % of offering price) % 4.75 none none
- --------------------------------------------------------------------------------
Maximum deferred sales charge
(as a % of purchase or sale price,
whichever is less) % none(1) 5.00(2) 1.00(2)
- --------------------------------------------------------------------------------
- ----------
(1) Except for purchases of $1 million or more, when you sell any of the
shares within 18 months of when you bought them. Please see page 36 for
details.
(2) This charge decreases over time. Please see page 36 for details.
Operating expenses paid each year by the fund
(as a % of average net assets)
Class A Class B Class C
- --------------------------------------------------------------------------------
Management fee(3) % 0.75 0.75 0.75
- --------------------------------------------------------------------------------
Distribution and service (12b-1) fees % 0.30 1.00 1.00
- --------------------------------------------------------------------------------
Other expenses % 0.35 0.37 0.34
- --------------------------------------------------------------------------------
Total fund operating expenses % 1.40 2.12 2.09
- --------------------------------------------------------------------------------
- ----------
(3) This is the maximum management fee. The actual fee charged reduces with
asset size: 0.75% on the first $250 million, 0.70% on the next $250
million, 0.65% on the next $250 million, 0.60% on the next $250 million
and 0.55% on assets over $1 billion.
Example
Here's an example of what you would pay in expenses if you invested $10,000,
reinvested all your dividends, the fund earned an average annual return of 5%,
and annual operating expenses remained at the current level. Keep in mind that
this is only an example - actual expenses and performance may vary.
Year 1 Year 3 Year 5 Year 10
- --------------------------------------------------------------------------------
Class A
if you sell your shares $ 611 897 1,204 2,075
- --------------------------------------------------------------------------------
Class B
if you sell your shares $ 715 964 1,339 2,266(4)
if you don't sell your shares $ 215 664 1,139 2,266(4)
- --------------------------------------------------------------------------------
Class C
if you sell your shares $ 312 655 1,124 2,421
if you don't sell your shares $ 212 655 1,124 2,421
- --------------------------------------------------------------------------------
- ----------
(4) Class B shares convert to Class A shares after year 8. This figure uses
Class A expenses for years 9 and 10.
16 Northstar Income and Growth Fund
<PAGE>
NORTHSTAR
INCOME AND
GROWTH FUND
- --------------------------------------------------------------------------------
RISKS [CLIPART]
All mutual funds involve risk - some more than others - and there's always the
chance that you could lose money or not earn as much as you hope.
Every fund is affected by the economy and by the investment decisions portfolio
managers make. Because it invests in equities, this fund's performance may go up
or down rapidly depending on market conditions.
The fund also invests in debt securities, which means its performance will also
be affected by changes in interest rates. When interest rates increase, the
value of the fund's debt securities particularly those with longer durations -
will go down. In addition, convertible securities may reduce performance and
increase volatility if the issuers stop making interest and principal payments.
Although the fund's investment team invests in a mix of equity and debt
securities, the mix the team chooses may also lower the fund's performance. This
fund's performance will also be affected if the equity and debt markets don't
move as forecasted.
- --------------------------------------------------------------------------------
HOW THE FUND HAS PERFORMED [CLIPART]
The bar chart below shows you how the fund's performance has varied from year to
year since inception, while the table below compares the fund's long-term
performance with the Lipper Balanced Fund Index. This information may help
provide an indication of the fund's risks and potential rewards. All figures
assume reinvestment of dividends and distributions. Looking at how a fund has
performed in the past is important - but it's no guarantee of how it will
perform in the future.
Year by year total return (%)(1)
[The following information was depicted as a bar chart in the printed material]
1994 1995 1996 1997 1998
---- ---- ---- ---- ----
-3.56 21.33 15.23 15.56 5.76
Best and worst quarterly performance during this period:
4th quarter 1998: up 12.28%
3rd quarter 1998: down 9.21%
- ----------
(1) These figures are as of December 31 of each year. They do not reflect
sales charges and would be lower if they did.
Average annual total return(2)
Lipper
Balanced
Fund
Class A Class B Class C Index(3)
- --------------------------------------------------------------------------------
One year, ended
December 31, 1998 % 0.76 0.28 4.06 15.09
- --------------------------------------------------------------------------------
Five years, ended
December 31, 1998 % 9.44 N/A N/A 13.87
- --------------------------------------------------------------------------------
Since inception(3) % 9.76 8.93 10.05 13.45
- --------------------------------------------------------------------------------
- ----------
(2) These figures reflect sales charges.
(3) The Lipper Balanced Fund Index measures the performance of balanced funds
(funds that seek current income balanced with capital appreciation). The
since inception return for the Index is for the Class A time period.
(4) Class A commenced operations on November 8, 1993. Class B commenced
operations on February 9, 1994. Class C commenced operations on March 31,
1994.
[CLIPART] If you have any questions, please call 1-800-595-7827.
Northstar Income and Growth Fund 17
<PAGE>
NORTHSTAR Portfolio manager
GOVERNMENT James Mahnke
SECURITIES
FUND
- --------------------------------------------------------------------------------
OBJECTIVE [CLIPART]
This fund seeks high current income and conservation of principal by investing
primarily in debt obligations issued or guaranteed by the U.S. government or its
agencies and instrumentalities.
INVESTMENT STRATEGY [CLIPART]
Depending on interest rates and market opportunities, the portfolio manager
selects U.S. government securities that generally have short and intermediate
terms to maturity. The average duration of the fund will generally be three to
four years.
Under normal conditions, the fund holds at least 65% of its total assets in
securities supported by the full faith and credit of the U.S. government. No
more than 20% of its assets may be in securities issued by a single
instrumentality or agency not supported by the full faith and credit of the U.S.
government. It may also invest in mortgage-backed, zero coupon and other
securities, including derivatives.
In periods of unusual market conditions, the fund may temporarily invest part or
all of its assets in cash or high quality money market securities. In these
circumstances, the fund may not achieve its objective.
- --------------------------------------------------------------------------------
WHAT YOU PAY TO INVEST [CLIPART]
There are two types of fees and expenses when you invest in mutual funds: fees,
including sales charges, you pay directly when you buy or sell shares, and
operating expenses paid each year by the fund.
Fees you pay directly
Class A Class B Class C Class T
- --------------------------------------------------------------------------------
Maximum sales charge on your
investment (as a % of offering price) % 4.75 none none none
- --------------------------------------------------------------------------------
Maximum deferred sales charge
(as a % of purchase or sale price,
whichever is less) % none(1) 5.00(2) 1.00(2) 4.00(2)
- --------------------------------------------------------------------------------
- ----------
(1) Except for purchases of $1 million or more, when you sell any of the
shares within 18 months of when you bought them. Please see page 36 for
details.
(2) This charge decreases over time. Please see page 36 for details.
Operating expenses paid each year by the fund
(as a % of average net assets)
Class A Class B Class C Class T
- --------------------------------------------------------------------------------
Management fee(3) % 0.65 0.65 0.65 0.65
- --------------------------------------------------------------------------------
Distribution and service (12b-1) fees % 0.30 1.00 1.00 0.65(4)
- --------------------------------------------------------------------------------
Other expenses % 0.37 0.40 0.40 0.40
- --------------------------------------------------------------------------------
Total fund operating expenses(3) % 1.32 2.05 2.05 1.70
- --------------------------------------------------------------------------------
- ----------
(3) These figures are before a management fee waiver of 0.15% effective June
2, 1997. After the waiver, the management fee would be 0.50% and the total
fund operating expenses would be 1.17% for Class A, 1.90% for Class B,
1.90% for Class C and 1.55% for Class T.
(4) The Class T 12b-1 plan provides for payment up to 0.95%.
Example
Here's an example of what you would pay in expenses if you invested $10,000,
reinvested all your dividends, the fund earned an average annual return of 5%,
and annual operating expenses remained at the current level. Keep in mind that
this is only an example - actual expenses and performance may vary.
Year 1 Year 3 Year 5 Year 10
- --------------------------------------------------------------------------------
Class A
if you sell your shares $ 603 873 1,164 1,990
- --------------------------------------------------------------------------------
Class B
if you sell your shares $ 708 943 1,303 2,190(5)
if you don't sell your shares $ 208 643 1,103 2,190(5)
- --------------------------------------------------------------------------------
Class C
if you sell your shares $ 308 643 1,103 2,379
if you don't sell your shares $ 208 643 1,103 2,379
- --------------------------------------------------------------------------------
Class T
if you sell your shares $ 573 736 923 1,907(6)
if you don't sell your shares $ 173 536 923 1,907(6)
- --------------------------------------------------------------------------------
- ----------
(5) Class B shares convert to Class A shares after year 8. This figure uses
Class A expenses for years 9 and 10.
(6) Class T shares convert to Class A shares after year 8. This figure uses
Class A expenses for years 9 and 10.
18 Northstar Government Securities Fund
<PAGE>
NORTHSTAR
GOVERNMENT
SECURITIES
FUND
- --------------------------------------------------------------------------------
RISKS [CLIPART]
All mutual funds involve risk - some more than others - and there's always the
chance that you could lose money or not earn as much as you hope.
Every fund is affected by the economy and by the investment decisions portfolio
managers make. Because it invests in government securities, this fund's
performance may go up or down depending on market conditions.
The fund's performance is significantly affected by changes in interest rates.
When interest rates increase, the value of the fund's debt securities
particularly those with longer durations - will go down. The value of the fund's
mortgage-backed investments - and the fund's yield - could be reduced if the
underlying mortgage-holders pay off their mortgages earlier than expected.
This fund's performance will also be affected if the portfolio manager makes an
inaccurate assessment of economic conditions and projected changes in interest
rates. In addition, the portfolio manager's use of derivative instruments may
not be successful, and may lower fund performance or prevent the fund from
earning higher returns. Some holdings, such as zero coupon bonds, may be more
volatile and adversely affect the value of the fund's shares.
Shares of this fund are not insured or guaranteed by the U.S. government or its
agencies or instrumentalities.
- --------------------------------------------------------------------------------
HOW THE FUND HAS PERFORMED [CLIPART]
The bar chart below shows you how the fund's performance has varied from year to
year for the past 10 years, while the table below compares the fund's long-term
performance with the Lehman Intermediate U.S. Government Index. This information
may help provide an indication of the fund's risks and potential rewards. All
figures assume reinvestment of dividends and distributions. Looking at how a
fund has performed in the past is important - but it's no guarantee of how it
will perform in the future.
Year by year total return (%)(1)
[The following information was depicted as a bar chart in the printed material]
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
11.73 8.57 14.73 9.77 18.48 -9.82 22.90 0.32 7.38 4.84
Best and worst quarterly performance during this period:
4th quarter 1995: up 8.54%
1st quarter 1994: down 8.47%
- ----------
(1) These figures are as of December 31 of each year. They do not reflect
sales charges and would be lower if they did.
Average annual total return(2)
Lehman
Intermediate
U.S.
Government
Class A Class B Class C Class T Index(3)
- --------------------------------------------------------------------------------
One year, ended
December 31, 1998 % 0.22 -0.44 3.37 0.90 8.49
- --------------------------------------------------------------------------------
Five years, ended
December 31, 1998 % N/A N/A N/A 4.59 6.45
- --------------------------------------------------------------------------------
Ten years, ended
December 31, 1998 % N/A N/A N/A 8.52 8.34
- --------------------------------------------------------------------------------
Since inception(3) % 5.11 5.36 5.78 7.06 8.17
- --------------------------------------------------------------------------------
- ----------
(2) These figures reflect sales charges.
(3) The Lehman Brothers Intermediate U.S. Government Index measures the
performance of U.S. Treasury bonds and U.S. government agency bonds. The
since inception return for the Index is for the Class T time period.
(4) Classes A, B and C commenced operations on June 5, 1995. Class T commenced
operations on February 3, 1986.
[CLIPART] If you have any questions, please call 1-800-595-7827.
Northstar Government Securities Fund 19
<PAGE>
NORTHSTAR Portfolio manager
HIGH YIELD Jeffrey Aurigemma
FUND
- --------------------------------------------------------------------------------
OBJECTIVE [CLIPART]
This fund seeks high current income by investing primarily in long-term and
intermediate-term fixed income securities, with emphasis on high-yield,
lower-rated corporate debt instruments of domestic and foreign issuers.
INVESTMENT STRATEGY [CLIPART]
The fund invests mostly in high-yield bonds (junk bonds) to achieve high current
income.
Under normal market conditions, the fund invests at least 65% of its total
assets in high-yield bonds rated below investment grade. It can hold up to 100%
of its assets in debt securities rated as low as Ca by Moody's or CC by S&P or
in securities that aren't rated but that Northstar considers to be of equivalent
quality, and up to 1% of its assets in bonds in the lowest rating categories. It
may invest up to 35% of its net assets in foreign issuers, but only 10% can be
in securities that are not listed on a U.S. securities exchange. The fund may
also hold up to 25% of its assets in equity or equity-related instruments, such
as preferred stocks, convertible securities and rights and warrants associated
with debt instruments.
In periods of unusual market conditions, the fund may temporarily invest part or
all of its assets in cash or high quality money market securities. In these
circumstances, the fund may not achieve its objective.
- --------------------------------------------------------------------------------
WHAT YOU PAY TO INVEST [CLIPART]
There are two types of fees and expenses when you invest in mutual funds: fees,
including sales charges, you pay directly when you buy or sell shares, and
operating expenses paid each year by the fund.
Fees you pay directly
Class A Class B Class C Class T
- --------------------------------------------------------------------------------
Maximum sales charge on your
investment (as a % of offering price) % 4.75 none none none
- --------------------------------------------------------------------------------
Maximum deferred sales charge
(as a % of purchase or sale price,
whichever is less) % none(1) 5.00(2) 1.00(2) 4.00(2)
- --------------------------------------------------------------------------------
- ----------
(1) Except for purchases of $1 million or more, when you sell any of the
shares within 18 months of when you bought them. Please see page 36 for
details.
(2) This charge decreases over time. Please see page 36 for details.
Operating expenses paid each year by the fund
(as a % of average net assets)
Class A Class B Class C Class T
- --------------------------------------------------------------------------------
Management fee % 0.60 0.60 0.60 0.60
- --------------------------------------------------------------------------------
Distribution and service (12b-1) fees % 0.30 1.00 1.00 0.65(3)
- --------------------------------------------------------------------------------
Other expenses % 0.36 0.37 0.38 0.35
- --------------------------------------------------------------------------------
Total fund operating expenses % 1.26 1.97 1.98 1.60
- --------------------------------------------------------------------------------
- ----------
(3) The Class T 12b-1 Plan provides for payments up to 0.95%.
Example
Here's an example of what you would pay in expenses if you invested $10,000,
reinvested all your dividends, the fund earned an average annual return of 5%,
and annual operating expenses remained at the current level. Keep in mind that
this is only an example - actual expenses and performance may vary.
Year 1 Year 3 Year 5 Year 10
- --------------------------------------------------------------------------------
Class A
if you sell your shares $ 597 856 1,134 1,925
- --------------------------------------------------------------------------------
Class B
if you sell your shares $ 700 918 1,262 2,094(4)
if you don't sell your shares $ 200 618 1,062 2,094(4)
- --------------------------------------------------------------------------------
Class C
if you sell your shares $ 301 621 1,068 2,306
if you don't sell your shares $ 201 621 1,068 2,306
- --------------------------------------------------------------------------------
Class T
if you sell your shares $ 563 705 871 1,792(5)
if you don't sell your shares $ 163 505 871 1,792(5)
- --------------------------------------------------------------------------------
- ----------
(4) Class B shares convert to Class A shares after year 8. This figure uses
Class A expenses for years 9 and 10.
(5) Class T shares convert to Class A shares after year 8. This figure uses
Class A expenses for years 9 and 10.
20 Northstar High Yield Fund
<PAGE>
NORTHSTAR
HIGH YIELD
FUND
- --------------------------------------------------------------------------------
RISKS [CLIPART]
All mutual funds involve risk - some more than others - and there's always the
chance that you could lose money or not earn as much as you hope.
Every fund is affected by the economy and by the investment decisions portfolio
managers make. Because it invests in high yield securities, this fund's
performance may go up or down depending on market conditions.
This fund's performance is significantly affected by changes in interest rates
or adverse market or economic developments. When interest rates increase, the
value of the fund's debt securities - particularly those with longer durations -
will go down. The value of the fund's high-yield securities are particularly
sensitive to changes in interest rates. There is also a higher risk that the
company issuing the security may not be able to meet its financial obligations,
or that there won't be a market to sell the security at a reasonable price.
This fund's performance will also be affected if the portfolio manager makes an
inaccurate assessment of economic conditions and investment opportunities, and
chooses a company that, for example, declares bankruptcy and is no longer able
to make interest or principal payments.
Foreign investments can also be affected by the following:
o adverse political, social or economic developments in foreign countries
o unfavorable currency exchange rates
o a lack of liquidity in foreign markets
o inadequate or inaccurate information about foreign companies
o accounting, auditing and/or financial reporting standards that are
different from those in the United States.
Investments in emerging markets are affected by additional risks:
o developing countries have less mature economic structures and political
systems than those in developed countries
o they may have high inflation and rapidly changing interest and currency
exchange rates.
- --------------------------------------------------------------------------------
HOW THE FUND HAS PERFORMED [CLIPART]
The bar chart below shows you how the fund's performance has varied from year to
year for the past 10 years, while the table below compares the fund's long-term
performance with the Lehman High Yield Bond Index. This information may help
provide an indication of the fund's risks and potential rewards. All figures
assume reinvestment of dividends and distributions. Looking at how a fund has
performed in the past is important - but it's no guarantee of how it will
perform in the future.
Year by year total return (%)(1)
[The following information was depicted as a bar chart in the printed material]
1990 1991 1992 1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ---- ---- ---- ----
-14.59 46.69 27.58 18.89 -2.18 13.71 14.49 10.87 1.79
Best and worst quarterly performance during this period:
1st quarter 1991: up 16.09%
3rd quarter 1990: down 11.71%
- ----------
(1) These figures are as of December 31 of each year. They do not reflect
sales charges and would be lower if they did.
Average annual total return(2)
Lehman
High Yield
Bond
Class A Class B Class C Class T Index(3)
- --------------------------------------------------------------------------------
One year, ended
December 31, 1998 % -2.65 -3.37 0.46 -1.93 1.87
- --------------------------------------------------------------------------------
Five years, ended
December 31, 1998 % N/A N/A N/A 7.52 8.57
- --------------------------------------------------------------------------------
Since inception(3) % 7.47 7.67 8.15 9.97 10.62
- --------------------------------------------------------------------------------
- ----------
(2) These figures reflect sales charges.
(3) The Lehman Brothers High Yield Bond Index measures the performance of
fixed-income securities that are similar, but not identical, to those in
the fund's portfolio. The since inception return for the Index is for the
Class T time period.
(4) Classes A, B and C commenced operations on June 5, 1995. Class T commenced
operations on May 30, 1989.
[CLIPART] If you have any questions, please call 1-800-595-7827.
Northstar High Yield Fund 21
<PAGE>
NORTHSTAR Portfolio manager
HIGH TOTAL Jeffrey Aurigemma
RETURN FUND II
- --------------------------------------------------------------------------------
OBJECTIVE [CLIPART]
This fund seeks high income and capital appreciation.
INVESTMENT STRATEGY [CLIPART]
The fund invests primarily in higher-yielding, lower-rated bonds (junk bonds) to
achieve high current income with potential for capital growth.
Under normal market conditions, the fund invests at least 65% of its total
assets in high-yielding, lower-rated U.S. dollar-denominated debt securities of
U.S. and foreign issuers. It may also invest up to 35% of its total assets in
securities denominated in foreign currencies. No more than 50% of its assets can
be in securities of foreign issuers, including 35% in emerging market debt. Most
of the debt securities the fund invests in are lower-rated and considered
speculative, including bonds in the lowest rating categories and unrated bonds.
It can invest up to 10%, and can hold up to 25%, of its assets in securities
rated below Caa by Moody's or CCC by S&P. It also holds debt securities that pay
fixed, floating or adjustable interest rates and may hold pay-in-kind securities
and discount obligations, including zero coupon securities.
The fund may also invest in equity or equity-related securities, such as common
stock, preferred stock, convertible securities and rights and warrants attached
to debt instruments.
In periods of unusual market conditions, the fund may temporarily invest part or
all of its assets in cash or high quality money market securities. In these
circumstances, the fund may not achieve its objective.
- --------------------------------------------------------------------------------
WHAT YOU PAY TO INVEST [CLIPART]
There are two types of fees and expenses when you invest in mutual funds: fees,
including sales charges, you pay directly when you buy or sell shares, and
operating expenses paid each year by the fund.
Fees you pay directly
Class A Class B Class C
- --------------------------------------------------------------------------------
Maximum sales charge on your
investment (as a % of offering price) % 4.75 none none
- --------------------------------------------------------------------------------
Maximum deferred sales charge
(as a % of purchase or sale price,
whichever is less) % none(1) 5.00(2) 1.00(2)
- --------------------------------------------------------------------------------
- ----------
(1) Except for purchases of $1 million or more, when you sell any of the
shares within 18 months of when you bought them. Please see page 36 for
details.
(2) This charge decreases over time. Please see page 36 for details.
Operating expenses paid each year by the fund
(as a % of average net assets)
Class A Class B Class C
- --------------------------------------------------------------------------------
Management fee % 0.75 0.75 0.75
- --------------------------------------------------------------------------------
Distribution and service (12b-1) fees % 0.30 1.00 1.00
- --------------------------------------------------------------------------------
Other expenses % 0.40 0.44 0.43
- --------------------------------------------------------------------------------
Total fund operating expenses % 1.45 2.19 2.18
- --------------------------------------------------------------------------------
Example
Here's an example of what you would pay in expenses if you invested $10,000,
reinvested all your dividends, the fund earned an average annual return of 5%,
and annual operating expenses remained at the current level. Keep in mind that
this is only an example - actual expenses and performance may vary.
Year 1 Year 3 Year 5 Year 10
- --------------------------------------------------------------------------------
Class A
if you sell your shares $ 616 912 1,230 2,128
- --------------------------------------------------------------------------------
Class B
if you sell your shares $ 722 985 1,375 2,334(3)
if you don't sell your shares $ 222 685 1,175 2,334(3)
- --------------------------------------------------------------------------------
Class C
if you sell your shares $ 321 682 1,169 2,513
if you don't sell your shares $ 221 682 1,169 2,513
- --------------------------------------------------------------------------------
- ----------
(3) Class B shares convert to Class A shares after year 8. This figure uses
Class A expenses for years 9 and 10.
22 Northstar High Total Return Fund II
<PAGE>
NORTHSTAR
HIGH TOTAL
RETURN FUND II
- --------------------------------------------------------------------------------
RISKS [CLIPART]
All mutual funds involve risk - some more than others - and there's always the
chance that you could lose money or not earn as much as you hope.
Every fund is affected by the economy and by the investment decisions portfolio
managers make. Because it invests in high-yield securities, this fund's
performance may go up or down depending on market conditions.
This fund's performance is significantly affected by changes in interest rates.
When interest rates increase, the value of the fund's debt securities -
particularly those with longer durations - will go down. The value of the fund's
high-yield securities are particularly sensitive to changes in interest rates,
and there is a higher risk that the company that issued the security may not be
able to meet its financial obligations, or that there won't a market to sell the
security at a reasonable price.
This fund's performance will also be affected if the portfolio manager makes an
inaccurate assessment of economic conditions and investment opportunities, and
chooses a company that, for example, declares bankruptcy and is no longer able
to make interest or principal payments.
Foreign investments can also be affected by the following:
o adverse political, social or economic developments in foreign countries
o unfavorable currency exchange rates
o a lack of liquidity in foreign markets
o inadequate or inaccurate information about foreign companies
o accounting, auditing and/or financial reporting standards that are
different from those in the United States.
Investments in emerging markets are affected by additional risks:
o developing countries have less mature economic structures and political
systems than those in developed countries
o they may have high inflation and rapidly changing interest and currency
exchange rates.
- --------------------------------------------------------------------------------
HOW THE FUND HAS PERFORMED [CLIPART]
The bar chart below shows you how the fund's performance has varied from year to
year since inception, while the table below compares the fund's long-term
performance with the Lehman High Yield Bond Index. This information may help
provide an indication of the fund's risks and potential rewards. All figures
assume reinvestment of dividends and distributions. Looking at how a fund has
performed in the past is important - but it's no guarantee of how it will
perform in the future.
Year by year total return (%)(1)
[The following information was depicted as a bar chart in the printed material]
1998
----
-2.93
Best and worst quarterly performance during this period:
2nd quarter 1997: up 8.89%
3rd quarter 1998: down 8.44%
- ----------
(1) These figures are as of December 31, 1998. They do not reflect sales
charges and would be lower if they did.
Average annual total return(2)
Lehman
High Yield
Bond
Class A Class B Class C Index(3)
- --------------------------------------------------------------------------------
One year, ended
December 31, 1998 % -7.61 -8.04 -4.49 1.87
- --------------------------------------------------------------------------------
Since inception(3) % 5.18 5.20 7.24 6.96
- --------------------------------------------------------------------------------
- ----------
(2) These figures reflect sales charges.
(3) The Lehman Brothers High Yield Bond Index measures the performance of
fixed-income securities that are similar, but not identical, to those in
the fund's portfolio.
(4) The fund commenced operations on January 31, 1997.
[CLIPART] If you have any questions, please call 1-800-595-7827.
Northstar High Total Return Fund II 23
<PAGE>
NORTHSTAR Portfolio manager
HIGH TOTAL Jeffrey Aurigemma
RETURN FUND
- --------------------------------------------------------------------------------
OBJECTIVE [CLIPART]
This fund seeks high income and capital appreciation.
INVESTMENT STRATEGY [CLIPART]
The fund invests primarily in higher-yielding, lower-rated bonds (junk bonds) to
achieve high current income with potential for capital growth.
Under normal market conditions, the fund invests at least 65% of its total
assets in high-yielding, lower-rated U.S. dollar-denominated debt securities of
U.S. and foreign issuers. It may also invest up to 35% of its total assets in
securities denominated in foreign currencies. No more than 50% of its assets can
be in securities of foreign issuers, including 35% in emerging market debt. Most
of the debt securities the fund invests in are lower-rated and considered
speculative, including bonds in the lowest rating categories and unrated bonds.
It can invest up to 10%, and can hold up to 25% of its assets in securities
rated below Caa by Moody's or CCC by S&P. It also holds debt securities that pay
fixed, floating or adjustable interest rates and may hold pay-in-kind securities
and discount obligations, including zero coupon securities.
The fund may also invest in equity or equity-related securities, such as common
stock, preferred stock, convertible securities and rights and warrants attached
to debt instruments.
In periods of unusual market conditions, the fund may temporarily invest part or
all of its assets in cash or high quality money market securities. In these
circumstances, the fund may not achieve its objective.
- --------------------------------------------------------------------------------
WHAT YOU PAY TO INVEST [CLIPART]
There are two types of fees and expenses when you invest in mutual funds: fees,
including sales charges, you pay directly when you buy or sell shares, and
operating expenses paid each year by the fund.
Fees you pay directly
Class A Class B Class C
- --------------------------------------------------------------------------------
Maximum sales charge on your
investment (as a % of offering price) % 4.75 none none
- --------------------------------------------------------------------------------
Maximum deferred sales charge
(as a % of purchase or sale price,
whichever is less) % none(1) 5.00(2) 1.00(2)
- --------------------------------------------------------------------------------
- ----------
(1) Except for purchases of $1 million or more, when you sell any of the
shares within 18 months of when you bought them. Please see page 36 for
details.
(2) This charge decreases over time. Please see page 36 for details.
Operating expenses paid each year by the fund
(as a % of average net assets)
Class A Class B Class C
- --------------------------------------------------------------------------------
Management fee(3) % 0.69 0.69 0.69
- --------------------------------------------------------------------------------
Distribution and service (12b-1) fees % 0.30 1.00 1.00
- --------------------------------------------------------------------------------
Other expenses % 0.31 0.33 0.34
- --------------------------------------------------------------------------------
Total fund operating expenses % 1.30 2.02 2.03
- --------------------------------------------------------------------------------
- ----------
(3) The management fee charged reduces with asset size: 0.75% on the first
$250 million, 0.70% on the next $250 million, 0.65% on the next $250
million, 0.60% on the next $250 million, and 0.55% on assets over $1
billion.
Example
Here's an example of what you would pay in expenses if you invested $10,000,
reinvested all your dividends, the fund earned an average annual return of 5%,
and annual operating expenses remained at the current level. Keep in mind that
this is only an example - actual expenses and performance may vary.
Year 1 Year 3 Year 5 Year 10
- --------------------------------------------------------------------------------
Class A
if you sell your shares $ 601 868 1,154 1,968
- --------------------------------------------------------------------------------
Class B
if you sell your shares $ 705 934 1,288 2,160(4)
if you don't sell your shares $ 205 634 1,088 2,160(4)
- --------------------------------------------------------------------------------
Class C
if you sell your shares $ 306 637 1,093 2,358
if you don't sell your shares $ 206 637 1,093 2,358
- --------------------------------------------------------------------------------
- ----------
(4) Class B shares convert to Class A shares after year 8. This figure uses
Class A expenses for years 9 and 10.
24 Northstar High Total Return Fund
<PAGE>
NORTHSTAR
HIGH TOTAL
RETURN FUND
- --------------------------------------------------------------------------------
RISKS [CLIPART]
All mutual funds involve risk - some more than others - and there's always the
chance that you could lose money or not earn as much as you hope.
Every fund is affected by the economy and by the investment decisions portfolio
managers make. Because it invests in high-yield securities, this fund's
performance may go up or down depending on market conditions.
This fund's performance is significantly affected by changes in interest rates.
When interest rates increase, the value of the fund's debt securities -
particularly those with longer durations - will go down. The value of the fund's
high-yield securities are particularly sensitive to changes in interest rates,
and there is a higher risk that the company that issued the security may not be
able to meet its financial obligations, or that there won't a market to sell the
security at a reasonable price.
This fund's performance will also be affected if the portfolio managers make an
inaccurate assessment of economic conditions and investment opportunities, and
chooses a company that, for example, declares bankruptcy and is no longer able
to make interest or principal payments.
Foreign investments can also be affected by the following:
o adverse political, social or economic developments in foreign countries
o unfavorable currency exchange rates
o a lack of liquidity in foreign markets
o inadequate or inaccurate information about foreign companies
o accounting, auditing and/or financial reporting standards that are
different from those in the United States.
Investments in emerging markets are affected by additional risks:
o developing countries have less mature economic structures and political
systems than those developed countries
o they may have high inflation and rapidly changing interest and currency
exchange rates.
- --------------------------------------------------------------------------------
HOW THE FUND HAS PERFORMED [CLIPART]
The bar chart below shows you how the fund's performance has varied from year to
year since inception, while the table below compares the fund's long-term
performance with the Lehman High Yield Bond Index. This information may help
provide an indication of the fund's risks and potential rewards. All figures
assume reinvestment of dividends and distributions. Looking at how a fund has
performed in the past is important - but it's no guarantee of how it will
perform in the future.
Year by year total return (%)(1)
[The following information was depicted as a bar chart in the printed material]
1994 1995 1996 1997 1998
---- ---- ---- ---- ----
-8.57 21.17 15.70 11.44 -7.96
Best and worst quarterly performance during this period:
3rd quarter 1997: up 7.40%
3rd quarter 1998: down 13.76%
- ----------
(1) These figures are as of December 31 of each year. They do not reflect
sales charges and would be lower if they did.
Average annual total return(2)
Lehman
High Yield
Bond
Class A Class B Class C Index(3)
- --------------------------------------------------------------------------------
One year, ended
December 31, 1998 % -12.26 -12.77 -9.38 1.87
- --------------------------------------------------------------------------------
Five years, ended
December 31, 1998 % 4.62 N/A N/A 8.57
- --------------------------------------------------------------------------------
Since inception(3) % 5.03 4.05 4.90 8.65
- --------------------------------------------------------------------------------
- ----------
(2) These figures reflect sales charges.
(3) The Lehman Brothers High Yield Bond Index measures the performance of
fixed-income securities that are similar, but not identical, to those in
the fund's portfolio. The since inception return for the Index is for the
Class A time period.
(4) Class A commenced operations on November 8, 1993. Classes B and C
commenced operations on February 9, 1994 and March 21, 1994, respectively.
[CLIPART] If you have any questions, please call 1-800-595-7827.
Northstar High Total Return Fund 25
<PAGE>
MEET THE
PORTFOLIO
MANAGERS
- --------------------------------------------------------------------------------
Jeffrey Aurigemma
Jeffrey Aurigemma has managed the Northstar High Yield Fund since May 1997 and
has managed the Northstar High Total Return Fund II and the Northstar High Total
Return Fund since July 1999. He joined Northstar in October 1993.
Mr. Aurigemma has over nine years of experience in the management of high-yield
fixed-income investments. From October 1993 through May 1997 he was a Senior
Credit Analyst for the Northstar High Total Return Fund. Before joining
Northstar, he was a Senior Analyst - Fixed Income for National Securities &
Research Corporation.
Jeffrey Bernstein
Jeffrey Bernstein has co-managed the Northstar Mid-Cap Growth Fund since the
fund was formed in August 1998. He joined Northstar in May 1998.
Mr. Bernstein has over 10 years of experience in small and mid-cap investments.
Before joining Northstar, Mr. Bernstein was a Portfolio Manager at Strong
Capital Management where he co-managed the Strong Mid Cap Fund. From November
1995 to February 1997, Mr. Bernstein was a Portfolio Manager with Berkeley
Capital. From September 1993 to November 1995, Mr. Bernstein was an Assistant
Portfolio Manager at Bankers Trust Corp. Prior to Bankers Trust, Mr. Bernstein
was an Analyst for Cowen & Co.
Charles Brandes
Charles Brandes has co-managed the Northstar International Value Fund and the
Northstar Emerging Markets Value Fund since the funds were formed in March 1995
and January 1998, respectively. Mr. Brandes has over 31 years of investment
management experience. He founded the general partner of Brandes Investment
Partners, L.P. in 1974 and owns a controlling interest in it. At Brandes
Investment Partners, L.P., he serves as a Managing Partner. He is a Chartered
Financial Analyst and a Member of the Association for Investment Management and
Research.
Charles Brandes and Jeff Busby structure the portfolio of the Northstar
International Value Fund from a buy list determined by an investment committee
of Brandes.
Jeff Busby
Jeff Busby has co-managed of the Northstar International Value Fund since the
fund was formed in March 1995. Mr. Busby has over 13 years of investment
management experience. At Brandes Investment Partners, L.P., he serves as a
Managing Partner. He is also responsible for overseeing all trading activities
for the firm. He is a Chartered Financial Analyst, and a Member of the
Association for Investment Management and Research and the Financial Analysts
Society.
Timothy Devlin
Timothy Devlin has co-managed the Northstar Research Enhanced Index Fund since
the fund was formed in December 1998. At J.P. Morgan Investment Management Inc.,
he serves as a Portfolio Manager and Member of the Structured Equity Group.
Mr. Devlin has over 12 years of investment management experience. Before joining
J.P. Morgan Investment Management Inc. in 1996, Mr. Devlin was a Portfolio
Manager for nine years at Mitchell Hutchins Asset Management, Inc. where he
managed quantitatively-driven portfolios for institutional and retail investors.
26
<PAGE>
MEET THE
PORTFOLIO
MANAGERS
- --------------------------------------------------------------------------------
Mary Lisanti
Mary Lisanti has managed the Northstar Special Fund since July 1998, has
co-managed the Northstar Mid-Cap Growth Fund since the fund was formed in August
1998 and has managed the Northstar Growth Fund since August 1998. She joined
Northstar in May 1998.
Ms. Lisanti has over 20 years of experience in small and mid-cap investments.
Before joining Northstar, Ms. Lisanti was a Portfolio Manager at Strong Capital
Management where she managed the Strong Small Cap Fund and co-managed the Strong
Mid Cap Fund. From 1993 to 1996, Ms. Lisanti was a Managing Director and Head of
Small and Mid-Capitalization Equity Strategies at Bankers Trust Corp. where she
managed the BT Small Cap Fund and the BT Capital Appreciation Fund. Prior to
Bankers Trust, Ms. Lisanti was a Portfolio Manager with the Evergreen Funds. She
began her career as an Analyst specializing in emerging growth stocks with
Donaldson, Lufkin & Jenrette and Shearson Lehman Hutton, and was ranked the
number one Institutional Investor Emerging Growth Stock Analyst in 1989. She is
a Chartered Financial Analyst, and a member of the New York Society of Security
Analysts and the Financial Analyst Federation.
James Mahnke
Jim Mahnke has managed the Northstar Government Securities Fund since May 1998.
Mr. Mahnke has over 14 years of investment management experience. At ReliaStar
Investment Research, an affiliate of Northstar, he serves as a Senior Vice
President and Portfolio Manager. Prior to joining ReliaStar, Mr. Mahnke was a
Vice President and Portfolio Manager of Alliance Capital Management.
Louis Navellier
Louis Navellier has managed the Northstar Growth + Value Fund since the fund was
formed in November 1996. Mr. Navellier has over 19 years of investment
management experience and is the sole owner of Navellier & Associates, Inc., a
registered investment adviser that manages investments for institutions, pension
funds and high net worth individuals. Mr. Navellier's investment newsletter, MPT
Review, has been published for over 19 years and is widely renowned throughout
the investment community.
Ian Sunder
Ian Sunder has co-managed the Northstar Emerging Markets Value Fund since the
fund was formed in January 1998. Mr. Sunder has over nine years of investment
management experience. At Brandes Investment Partners, L.P., he serves as a
Portfolio Manager. He is a Chartered Financial Analyst, and a Member of the
Association for Investment Management and Research and the Financial Analysts
Society.
Charles Brandes and Ian Sunder structure the portfolio of the Northstar Emerging
Markets Value Fund from a buy list determined by an investment committee of
Brandes.
James Wiess
James Wiess has co-managed the Northstar Research Enhanced Index Fund since the
fund was formed in December 1998. At J.P. Morgan Investment Management Inc., he
serves as a Portfolio Manager and Member of the Structured Equity Group with the
responsibility of portfolio rebalancing and research and development of
structured equities strategies.
Mr. Wiess has over 16 years of investment management experience. Before joining
J.P. Morgan Investment Management Inc. in 1992, Mr. Wiess was a Stock Index
Arbitrager for seven years at Oppenheimer & Co. and a Consultant for Data
Resources. He is a Chartered Financial Analyst.
[CLIPART] If you have any questions, please call 1-800-595-7827.
27
<PAGE>
MEET THE
PORTFOLIO
MANAGERS
- --------------------------------------------------------------------------------
INVESTMENT ADVISER NORTHSTAR INVESTMENT MANAGEMENT CORPORATION
Northstar Investment Management Corporation (Northstar) provides advice and
recommendations about investments made by all of the funds and oversees the
investment management of the funds by the Sub-Advisers. Northstar is a
registered investment adviser that currently manages over $4 billion in mutual
funds and institutional accounts. Northstar's principal address is 300 First
Stamford Place, Stamford, Connecticut 06902.
Northstar receives a monthly fee for its services based on the average daily net
assets of each of the funds it manages. The fee is paid by each of the funds at
the management fee rate noted for each fund beginning on page 2.
SUB-ADVISERS BRANDES INVESTMENT PARTNERS, L.P.
A registered investment adviser, Brandes Investment Partners, L.P. (Brandes)
serves as Sub-Adviser to the Northstar International Value Fund and the
Northstar Emerging Markets Value Fund. The company was formed in May 1996 as the
successor to its general partner, Brandes Investment Partners, Inc. which has
been providing investment advisory services (through various predecessor
entities) since 1974. Brandes currently manages over $25 billion in
international portfolios. Brandes' principal address is 12750 High Bluff Drive,
San Diego, California 92130.
Brandes receives a monthly fee for its services based on the average daily net
assets of each of the funds it manages. The fee for each fund is paid by
Northstar and not by either of the funds, at a rate of 50% of the management fee
that each of the funds pays Northstar.
J.P. MORGAN INVESTMENT MANAGEMENT INC.
A registered investment adviser, J.P. Morgan Investment Management Inc. (J.P.
Morgan) serves as Sub-Adviser to the Northstar Research Enhanced Index Fund. The
firm was formed in 1984. The firm evolved from the Trust and Investment Division
of Morgan Guaranty Trust Company which acquired its first tax-exempt client in
1913 and its first pension account in 1940. J.P. Morgan currently manages
approximately $316 billion for institutions and pension funds. The company is a
wholly owned subsidiary of J.P. Morgan & Co. J.P. Morgan's principal address is
522 Fifth Avenue, New York, New York 10036.
J.P. Morgan receives a monthly fee for its services based on the average daily
net assets of the Northstar Research Enhanced Index Fund. The fee for the fund
is paid by Northstar, and not by the fund, at a rate of 0.20%.
NAVELLIER FUND MANAGEMENT, INC.
A registered investment adviser, Navellier Fund Management Inc. (Navellier)
serves as Sub-Adviser to the Northstar Growth + Value Fund. Navellier and its
affiliate, Navellier & Associates, Inc., manage over $2 billion for
institutions, pension funds and high net worth individuals. Navellier is wholly
owned by Louis Navellier. Navellier's principal address is 1 East Liberty, Third
Floor, Reno, Nevada 89501.
Navellier receives a monthly fee for its services based on the average daily net
assets of the Northstar Growth + Value Fund. The fee for the fund is paid by
Northstar, and not by the fund, at a rate of 0.50%.
28
<PAGE>
MEET THE
PORTFOLIO
MANAGERS
- --------------------------------------------------------------------------------
PERFORMANCE PROFILE:
Brandes Investment Partners
The charts below show the average annual total returns for the Northstar
International Value Fund. The fund commenced operations on March 6, 1995 as the
Brandes International Fund, a series of the Brandes Investment Trust. It was
reorganized on April 21, 1997 as the Northstar International Value Fund, a
series of the Northstar Trust.
These figures reflect changes in the share prices and reinvestment of dividends
and distributions, and are net of all fees and expenses. Included for comparison
are performance figures of the MSCI EAFE Index, an unmanaged index of securities
listed on exchanges in Europe, Australia and the Far East. It has been adjusted
to reflect reinvestment of dividends. The results shown below may not be the
same as the rate of return you receive on an investment in the fund, because
returns depend on when you make your investment and on how your investment is
taxed.
Northstar
International MSCI
Value EAFE
Fund (%) Index (%)
- --------------------------------------------------------------------------------
One year, ended
December 31, 1998 13.46 20.00
- --------------------------------------------------------------------------------
Three years, ended
December 31, 1998 15.50 9.00
- --------------------------------------------------------------------------------
Total return since
March 6, 1995 15.39 11.24
- --------------------------------------------------------------------------------
[The following information was depicted as a line chart in the printed material]
<TABLE>
<CAPTION>
1995 1996 1997 1998
---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Northstar International
Value Fund 1.02 1.06 1.09 1.12 1.13 1.18 1.19 1.29 1.38 1.53 1.61 1.52 1.78 1.45 1.73
MSCI EAFE Index 1.06 1.07 1.11 1.16 1.19 1.21 1.21 1.23 1.21 1.37 1.36 1.25 1.44 1.25 1.50
</TABLE>
[CLIPART] If you have any questions, please call 1-800-595-7827.
29
<PAGE>
MEET THE
PORTFOLIO
MANAGERS
- --------------------------------------------------------------------------------
PERFORMANCE PROFILE:
Brandes Investment Partners
These figures demonstrate the historical track record of Brandes Investment
Partners. The figures have been provided by Brandes Investment Partners and have
not been verified or audited by Northstar. They do not indicate how the
Northstar International Value Fund or Brandes Investment Partners will perform
in the future.
(a) The annual returns presented (right) were calculated on a time-weighted and
asset-weighted, total return basis, including reinvestments of all dividends,
interest and income, realized and unrealized gain or losses and are net of
applicable investment advisory fees, brokerage commissions and execution costs,
custodial fees and any applicable foreign withholding taxes, without provision
for federal and state income taxes, if any. This total return method differs
from the SEC method of calculating total return. The Brandes composite results
include all actual, fee- paying, fully discretionary international equity
accounts under management for at least one month beginning July 1, 1990 having
substantially similar investment objectives, strategies and restrictions to
those of the Northstar International Value Fund. The weighted-average management
fee during the period from July 1, 1990 through December 31, 1997 was 0.91% per
year. If the fund's expenses had been deducted, they would have reduced
performance. Securities transactions are accounted for on the trade date and
cash accounting is utilized. Cash and cash equivalents are included in
performance results. Net annual returns for the composite for calendar year 1991
have been attested by an independent accounting firm. Starting with calendar
year 1992 through calendar year 1997, the composite has been examined by a Big
Five accounting firm in accordance with AIMR Level II verification standards.
The examination for calendar year 1998 has not been completed as of the date of
this prospectus. Copies of the reports of independent accountants and a complete
list and description of Brandes' composites are available on request. Brandes
has prepared the performance data in compliance with the Performance
Presentation Standards of the Association for Investment Management and Research
(AIMR-PPS(TM)). AIMR did not prepare or review this data. The fund agrees to
conform the performance presentation to any changes in the SEC staff position
relating to prior performance presentations.
The charts below show the past performance of Brandes Investment Partners in
managing all accounts with investment objectives, strategies and restrictions
substantially similar, but not necessarily identical, to those of the Northstar
International Value Fund. The charts show average annual total returns for a
composite of the actual performance of all international equity accounts managed
by Brandes Investment Partners from July 1990 until the present.
The accounts were not subject to the same types of expenses as the fund or the
requirements of the Investment Company Act of 1940 or the Internal Revenue Code,
the limitations of which might have adversely affected performance results.
Included for comparison purposes are performance figures of the MSCI EAFE Index.
The results shown below may not be the same as the rate of return of any
particular account, because returns depend on when you make your investment and
how your investment is taxed.
MSCI
Brandes International EAFE
Equity Composite (%)(a) Index(%)
- --------------------------------------------------------------------------------
One year, ended
December 31, 1998 14.76 20.00
- --------------------------------------------------------------------------------
Three years, ended
December 31, 1998 17.03 9.00
- --------------------------------------------------------------------------------
Five years, ended
December 31, 1998 12.08 9.19
- --------------------------------------------------------------------------------
Total return since
July 1, 1990 16.48 6.90
- --------------------------------------------------------------------------------
[The following information was depicted as a line chart in the printed material]
Brandes MSCI
International EAFE
Equity Composite Index
---------------- -----
1990 1.00 1.00
0.98 0.79
0.99 0.87
1991 1.10 0.94
1.13 0.88
1.26 0.96
1.38 0.98
1992 1.43 0.86
1.52 0.88
1.47 0.89
1.47 0.86
1993 1.58 0.96
1.65 1.06
1.82 1.13
2.07 1.14
1994 2.01 1.18
1.96 1.24
2.11 1.24
2.01 1.23
1995 2.01 1.25
2.13 1.26
2.20 1.31
2.29 1.36
1996 2.31 1.40
2.41 1.42
2.44 1.42
2.66 1.45
1997 2.82 1.42
3.16 1.61
3.34 1.60
3.19 1.47
1998 3.75 1.69
3.60 1.71
3.07 1.46
3.66 1.76
30
<PAGE>
MEET THE
PORTFOLIO
MANAGERS
- --------------------------------------------------------------------------------
PERFORMANCE PROFILE:
J.P. Morgan Investment Management
These figures demonstrate the historical track record of J.P. Morgan Investment
Management. The figures have been provided by J.P. Morgan Investment Management
and have not been verified or audited by Northstar. They do not indicate how the
Northstar Research Enhanced Index Fund or J.P. Morgan Investment Management will
perform in the future.
(a) Results are net of fees and include reinvestment of earnings. This total
return method differs from the SEC method of calculating total return. If the
fund's expenses had been deducted, they would have reduced performance. J.P.
Morgan has prepared the performance data in compliance with the Performance
Presentation Standards of the Association for Investment Management and Research
(AIMR-PPS(TM)). AIMR did not prepare or review this data. The fund agrees to
conform the performance presentation to any changes in the SEC staff position
relating to prior performance presentations.
The charts presented here show J.P. Morgan Investment Management's past
performance in managing accounts with investment objectives, strategies and
restrictions substantially similar but not necessarily identical, to those of
the Northstar Research Enhanced Index Fund.
The charts show average annual total returns for a composite of the actual
performance of all accounts managed by J.P. Morgan following its research
enhanced equity strategy from December 1988 until the present.
The accounts were not subject to the same types of expenses as the fund or the
requirements of the Investment Company Act of 1940 or the Internal Revenue Code,
the limitations of which might have adversely affected performance results.
Included for comparison purposes are performance figures of the S&P 500 Index.
The results shown here may not be the same as the rate of return of any
particular account, because returns depend on when you make your investment and
on how your investment is taxed.
J.P. Morgan
Investment
Management S&P 500
Composite(%)(a) Index(%)
- --------------------------------------------------------------------------------
1989 30.43 31.64
- --------------------------------------------------------------------------------
1990 -2.28 -3.10
- --------------------------------------------------------------------------------
1991 29.95 30.41
- --------------------------------------------------------------------------------
1992 10.10 7.61
- --------------------------------------------------------------------------------
1993 10.60 10.06
- --------------------------------------------------------------------------------
1994 2.42 1.32
- --------------------------------------------------------------------------------
1995 38.58 37.54
- --------------------------------------------------------------------------------
1996 23.90 22.95
- --------------------------------------------------------------------------------
1997 34.17 33.35
- --------------------------------------------------------------------------------
1998 31.83 28.58
- --------------------------------------------------------------------------------
Three years, ended December 31, 1998 29.89 28.23
- --------------------------------------------------------------------------------
Five years, ended December 31, 1998 25.48 24.06
- --------------------------------------------------------------------------------
Ten years, ended December 31, 1998 20.16 19.21
- --------------------------------------------------------------------------------
[The following information was depicted as a line chart in the printed material]
J.P. Morgan
Investment
Management S&P 500
Composite Index
--------- -----
1.00 1.00
1989 1.07 1.07
1.16 1.17
1.28 1.29
1.30 1.32
1990 1.28 1.28
1.36 1.36
1.17 1.17
1.27 1.28
1991 1.48 1.46
1.48 1.46
1.55 1.54
1.66 1.66
1992 1.65 1.62
1.69 1.65
1.73 1.71
1.82 1.79
1993 1.90 1.87
1.91 1.88
1.95 1.93
2.02 1.97
1994 1.95 1.90
1.97 1.91
2.06 2.00
2.07 2.00
1995 2.27 2.19
2.49 2.40
2.68 2.59
2.86 2.75
1996 3.04 2.90
3.16 3.03
3.26 3.12
3.55 3.38
1997 3.64 3.47
4.30 4.08
4.64 4.38
4.76 4.51
1998 5.46 5.14
5.70 5.31
5.14 4.78
6.27 5.80
[CLIPART] If you have any questions, please call 1-800-595-7827.
31
<PAGE>
MEET THE
PORTFOLIO
MANAGERS
- --------------------------------------------------------------------------------
PERFORMANCE PROFILE:
Louis Navellier
The charts presented here show average annual total returns for the Northstar
Growth + Value Fund.
Northstar Russell
Growth + Value 2000
Fund (%) Index (%)
- --------------------------------------------------------------------------------
One year, ended
December 31, 1998 17.72 -2.54
- --------------------------------------------------------------------------------
Total return since
November 18, 1996 15.26 9.99
- --------------------------------------------------------------------------------
[The following information was depicted as a line chart in the printed material]
Northstar Russell
Growth + Value 2000
Fund Index
-------------- -----
1996 1.00 1.00
1.03 0.97
1997 0.97 0.92
1.13 1.08
1.30 1.30
1.26 1.15
1998 1.38 1.28
1.32 1.25
1.05 1.05
1.22 1.35
In addition to owning Navellier Fund Management, Inc., Louis Navellier is the
sole owner of Navellier & Associates, Inc., a registered investment adviser that
has been managing large pools of private assets since 1985.
Mr. Navellier and his staff use a computer-based system he developed to analyze
over 9,000 stocks as a basis for making buying and selling decisions.
The charts on page 33 show his past performance in managing accounts with
investment objectives, strategies and restrictions substantially similar, but
not necessarily identical, to those of the Northstar Growth + Value Fund.
The charts show average annual total returns for a composite of the actual
performance of all equity accounts managed by Navellier & Associates from 1985
to present, calculated according to AIMR standards. This total return method
differs from the SEC method of calculating total return. Navellier has prepared
the performance data in compliance with the Performance Presentation Standards
of the Association for Investment Management and Research (AIMR-PPS(a)). AIMR
did not prepare or review this data. The fund agrees to conform the performance
presentation to any changes in the SEC staff position relating to prior
performance presentations.
The accounts were not subject to the requirements of the Investment Company Act
of 1940 or the Internal Revenue Code, the limitations of which might have
adversely affected performance results.
32
<PAGE>
MEET THE
PORTFOLIO
MANAGERS
- --------------------------------------------------------------------------------
PERFORMANCE PROFILE:
Louis Navellier
These figures demonstrate the historical track record of Navellier & Associates.
The figures have been provided by Navellier & Associates and have not been
verified or audited by Northstar. They do not indicate how the Northstar Growth
+ Value Fund or Navellier & Associates will perform in the future.
(a) Results are net of fees and expenses. Prior to January 1, 1993, any account
expenses not deducted from the accounts, such as management fees paid outside
the accounts, are not reflected in the performance results. If these fees had
been deducted from the accounts, they would have reduced performance. Fees were
not materially different from the Northstar Growth + Value Fund's expense ratio,
but were generally higher than the expense ratio for Class A shares and lower
than the expense ratios for Class B and Class C shares.
Navellier & Russell
Associates 2000
Composite (%)(a) Index (%)
- --------------------------------------------------------------------------------
1985 49.95 31.04
- --------------------------------------------------------------------------------
1986 31.20 5.68
- --------------------------------------------------------------------------------
1987 8.05 -8.80
- --------------------------------------------------------------------------------
1988 11.40 25.02
- --------------------------------------------------------------------------------
1989 22.20 16.26
- --------------------------------------------------------------------------------
1990 12.51 -19.48
- --------------------------------------------------------------------------------
1991 66.41 46.04
- --------------------------------------------------------------------------------
1992 3.12 18.41
- --------------------------------------------------------------------------------
1993 16.83 18.88
- --------------------------------------------------------------------------------
1994 1.53 -1.82
- --------------------------------------------------------------------------------
1995 43.80 28.44
- --------------------------------------------------------------------------------
1996 10.68 16.49
- --------------------------------------------------------------------------------
1997 13.05 22.36
- --------------------------------------------------------------------------------
1998 15.14 -2.54
- --------------------------------------------------------------------------------
Three years, ended December 31, 1998 12.94 11.58
- --------------------------------------------------------------------------------
Five years, ended December 31, 1998 16.03 11.86
- --------------------------------------------------------------------------------
Ten years, ended December 31, 1998 19.21 12.92
- --------------------------------------------------------------------------------
Total return since January 1, 1985 20.58 12.69
- --------------------------------------------------------------------------------
[The following information was depicted as a line chart in the printed material]
Navellier & Russell
Associates 2000
Composite Index
--------- -----
1.00 1.00
1985 1.50 1.31
1986 1.97 1.38
1987 2.13 1.26
1988 2.37 1.58
1989 2.89 1.84
1990 3.26 1.48
1991 5.42 2.16
1992 5.59 2.56
1993 6.53 3.04
1994 6.63 2.98
1995 9.53 3.83
1996 10.55 4.46
1997 11.92 5.46
1998 13.73 5.32
[CLIPART] If you have any questions, please call 1-800-595-7827.
33
<PAGE>
YOUR GUIDE TO BUYING,
SELLING AND EXCHANGING SHARES
OF NORTHSTAR FUNDS
- --------------------------------------------------------------------------------
THERE ARE THREE STEPS TO TAKE WHEN
YOU WANT TO BUY, SELL OR EXCHANGE SHARES OF OUR FUNDS:
o first, choose a share class
o second, open a Northstar account and make your first investment
o third, choose one of several ways to buy, sell or exchange shares.
- --------------------------------------------------------------------------------
CHOOSING A SHARE CLASS
All Northstar funds are available in Class A, Class B and Class C shares.
The chart below summarizes the differences between the share classes - your
choice of share class will depend on how much you are investing and for how
long. Large investments qualify for a reduced Class A sales charge and Class A
shares avoid the higher distribution fees of classes B and C. Investments in
Class B and Class C shares don't have a front-end sales charge but there is a
restriction on the amount you can invest at one time. Your financial consultant
can help you, or feel free to call us for more information.
Some of our funds also have Class T shares. You can no longer buy Class T shares
unless you are reinvesting income earned on Class T shares, or exchanging Class
T shares you already own, including Class T shares of the Cash Management Fund
of Salomon Brothers Investment Series (a money market fund that's available
through Northstar, but isn't one of the Northstar funds).
In addition to Class A, Class B and Class C shares, the Northstar Special Fund,
Northstar Mid-Cap Growth Fund, Northstar Growth Fund and Northstar Research
Enhanced Index Fund each offer Class I shares. Class I shares are only available
to certain defined benefit plans, insurance companies and foundations investing
for their own account. Class I shares may have different sales charges and other
expenses, which may affect performance. You can obtain additional information
concerning Class I shares by calling us at 1-800-595-7827.
We've listed actual expenses charged to the funds beginning on page 2.
- --------------------------------------------------------------------------------
Maximum Class A no limit
amount you Class B $500,000
can buy Class C $1,000,000
Class T can only be purchased by reinvesting income or
exchanging other Class T shares
- --------------------------------------------------------------------------------
Front-end Class A yes, varies by size of investment
sales charge Class B none
Class C none
Class T none
- --------------------------------------------------------------------------------
Deferred Class A only on investments of $1 million or more if
you sell within 18 months sales charge
Class B yes, if you sell within 5 years
Class C yes, if you sell within 1 year
Class T yes, if you sell within 4 years
- --------------------------------------------------------------------------------
Distribution Class A 0.05% per year
fee(1) Class B 0.75% per year
Class C 0.75% per year
Class T from 0.40% to 0.75% per year (varies by fund)
- --------------------------------------------------------------------------------
Service fee(1) Class A 0.25% per year
Class B 0.25% per year
Class C 0.25% per year
Class T 0.25% per year
- --------------------------------------------------------------------------------
Conversion Class B Class B shares convert to Class A shares after 8 years
Class T Class T shares convert to Class A shares after 8 years
- --------------------------------------------------------------------------------
- ----------
(1) Because distribution and service (12b-1) fees are paid on an ongoing
basis, Class B, C and T shareholders could end up paying more expenses
over the long-term than if they had paid a sales charge.
34
<PAGE>
YOUR GUIDE TO BUYING,
SELLING AND EXCHANGING SHARES
OF NORTHSTAR FUNDS
- --------------------------------------------------------------------------------
FRONT-END SALES CHARGES
(Class A shares only)
Amount
retained
Your investment Front-end sales charge by dealers
- --------------------------------------------------------------------------------
(as a % of your (as a % of (as a % of
net investment) offering price) offering price)
- --------------------------------------------------------------------------------
up to $99,999 4.99 4.75 4.00
- --------------------------------------------------------------------------------
$100,000 to $249,999 3.90 3.75 3.10
- --------------------------------------------------------------------------------
$250,000 to $499,999 2.83 2.75 2.30
- --------------------------------------------------------------------------------
$500,000 to $999,999 2.04 2.00 1.70
- --------------------------------------------------------------------------------
$1,000,000 and over -- -- --
- --------------------------------------------------------------------------------
WAYS TO REDUCE OR ELIMINATE SALES CHARGES
There are three ways you can reduce your front-end sales charges.
1. Take advantage of purchases you've already made
Rights of accumulation let you combine the value of all the Class A shares
you already own with your current investment to calculate your sales
charge.
2. Take advantage of purchases you intend to make
By signing a non-binding letter of intent, you can combine investments you
plan to make over a 13-month period to calculate the sales charge you'll
pay on each investment.
3. Buy as part of a group of investors
You can combine your investments with others in a recognized group when
calculating your sales charge. The following is a general list of the
groups Northstar recognizes for this benefit:
o you, your spouse and your children under the age of 21
o a trustee or fiduciary for a single trust, estate or fiduciary
account (including qualifying pension, profit sharing and other
employee benefit trusts)
o any other organized group that has been in existence for at least
six months, and wasn't formed solely for the purpose of investing at
a discount.
You may not have to pay front-end sales charges or a CDSC if you are:
o an active or retired trustee, director, officer, partner or employee
(including immediate family) of
- Northstar or of any of its affiliated companies
- any Northstar affiliated investment company
- a dealer that has a sales agreement with the distributor
o a trustee or custodian of any qualified retirement plan or IRA
established for the benefit of anyone in the point above
o a dealer, broker or registered investment adviser who has entered
into an agreement with the distributor providing for the use of
shares of the funds in particular investment products such as "wrap
accounts" or other similar managed accounts for the benefit of your
clients
o a service provider for Northstar, any Northstar affiliated company,
or any Northstar affiliated investment company
o a Brandes employee, officer or partner
o an owner, participant or beneficiary of life insurance and/or
annuity contracts with ReliaStar Life Insurance Company (ReliaStar)
or any ReliaStar affiliated life insurance company to the extent
they invest payments made to them under the contracts in one or more
of the funds within sixty days of payment under the contracts.
Pension, profit sharing and other benefit plans created pursuant to a plan
qualified under Section 401 of the Code or plans under Section 456 of the Code
don't pay a front-end sales charge or a CDSC, as long as the shares are
purchased by an employer-sponsored plan with at least 50 eligible employees.
Investment advisors or financial planners who charge a management, consulting or
other fee for their service, don't pay a front-end sales charge or a CDSC when
they place trades for their own accounts or the accounts of their clients, or
when their clients place trades for their own accounts, as long as the accounts
are linked to the master account of the investment advisor or financial planner
on the books and records of the broker or agent.
Please call us or consult the SAI to find out if you are eligible to reduce your
sales charges using any of these methods.
[CLIPART] If you have any questions, please call 1-800-595-7827.
35
<PAGE>
YOUR GUIDE TO BUYING,
SELLING AND EXCHANGING SHARES
OF NORTHSTAR FUNDS
- --------------------------------------------------------------------------------
DEFERRED SALES CHARGES
(Classes A, B, C & T)
We deduct a contingent deferred sales charge (CDSC) from the proceeds when you
sell shares as indicated below. A CDSC is charged on the current market value of
the shares, or on the price you paid for them, whichever is less. You aren't
charged a CDSC on shares you acquired by reinvesting your dividends, or on
amounts representing appreciation.
When you ask us to sell shares, we will sell those that are exempt from the CDSC
first, and then sell the shares you have held the longest. This helps keep your
CDSC as low as possible.
CLASS A SHARES
There is generally no CDSC on Class A shares, except for purchases of $1 million
or more, when you sell them within 18 months of when you bought them.
CDSC on shares
Your investment being sold
- --------------------------------------------------------------------------------
First $1,000,000 to $2,499,999 1.00%
- --------------------------------------------------------------------------------
$2,500,000 to $4,999,999 0.50%
- --------------------------------------------------------------------------------
$5,000,000 and over 0.25%
- --------------------------------------------------------------------------------
CLASS B, C & T SHARES
Years after you bought the shares Class B Class C Class T
- --------------------------------------------------------------------------------
1st year 5.00% 1.00% 4.00%
- --------------------------------------------------------------------------------
2nd year 4.00% -- 3.00%
- --------------------------------------------------------------------------------
3rd year 3.00% -- 2.00%
- --------------------------------------------------------------------------------
4th year 2.00% -- 1.00%
- --------------------------------------------------------------------------------
5th year 2.00% -- --
- --------------------------------------------------------------------------------
after 5 years -- -- --
- --------------------------------------------------------------------------------
WHEN THE CDSC MIGHT BE WAIVED
We may waive the CDSC for Class B and Class C shares if:
o the shareholder dies or becomes disabled
o you're selling your shares through our systematic withdrawal program
o you're selling shares of a retirement plan and you are over 70-1/2 years
old
o you're exchanging Class B, C or T shares for the same class of shares of
another Northstar fund
o you fall into any of the waiver categories listed on page 35.
Please call us or consult the SAI to find out if you are eligible for a CDSC
waiver.
36
<PAGE>
YOUR GUIDE TO BUYING,
SELLING AND EXCHANGING SHARES
OF NORTHSTAR FUNDS
- --------------------------------------------------------------------------------
HOW DEALERS ARE COMPENSATED
Dealers are paid in three ways for selling shares of Northstar funds:
THEY RECEIVE A COMMISSION WHEN YOU BUY SHARES
The amount of the commission depends on the amount you invest and the share
class you buy. Sales commissions are detailed in the chart below.
o Class A investments
(% of offering price)
Commission Amount
received by dealers paid
out of sales charges by the
you pay distributor
- --------------------------------------------------------------------------------
up to $99,999 4.00 --
- --------------------------------------------------------------------------------
$100,000 to $249,999 3.10 --
- --------------------------------------------------------------------------------
$250,000 to $499,999 2.30 --
- --------------------------------------------------------------------------------
$500,000 to $999,999 1.70 --
- --------------------------------------------------------------------------------
$1,000,000 to $2,499,999 -- 1.00
- --------------------------------------------------------------------------------
$2,500,000 to $4,999,999 -- 0.50
- --------------------------------------------------------------------------------
$5,000,000 and over -- 0.25
- --------------------------------------------------------------------------------
o Class B investments
Receives 4% of the sale price from the distributor
o Class C investments
Receives 1% of the sale price from the distributor
THEY ARE PAID A FEE BY THE DISTRIBUTOR FOR SERVICING YOUR ACCOUNT
They receive a service fee depending on the average net asset value of the class
of shares their clients hold in Northstar funds. These fees are paid from the
12b-1 fee deducted from each fund class. In addition to covering the cost of
commissions and service fees, the 12b-1 fee is used to pay for other expenses
such as sales literature, prospectus printing and distribution and compensation
to the distributor and its wholesalers. You'll find the 12b-1 fees listed in the
fund information beginning on page 2. Service and distribution fee percentages
appear on page 34.
THEY MAY RECEIVE ADDITIONAL BENEFITS AND REWARDS
Selling shares of Northstar funds may make dealers eligible for awards or to
participate in sales programs sponsored by Northstar. The costs of these
benefits and rewards are not deducted from the assets of the funds -- they are
paid from the distributor's own resources.
Currently, the distributor is sponsoring a sales program for registered
representatives of PrimeVest Financial Services, Inc. and Washington Square
Securities, Inc. through December 31, 1999 in connection with the sale by their
members of shares of the Northstar Mid-Cap Growth Fund. The distributor has
agreed to provide such registered representatives with an additional 0.15% in
sales commissions with respect to sales of all classes of the Northstar Mid-Cap
Growth Fund that exceed $50,000.
The distributor may also pay additional compensation to dealers including
Advest, Inc. out of its own resources for marketing and other services to
shareholders. All payments it receives for Class T shares are paid to Advest,
Inc.
[CLIPART] If you have any questions, please call 1-800-595-7827.
37
<PAGE>
YOUR GUIDE TO BUYING,
SELLING AND EXCHANGING SHARES
OF NORTHSTAR FUNDS
- --------------------------------------------------------------------------------
OPENING A NORTHSTAR ACCOUNT
Once you've chosen the funds you would like to invest in and the share class you
prefer, you're ready to open an account.
First, determine how much money you want to invest. The minimum initial
investment for Northstar funds is:
o $2,500 for non-retirement accounts (we reserve the right to accept smaller
amounts)
o $250 for retirement accounts
o $25 if you are investing using our automatic investment plan (see page
40).
Next, open an account in one of two ways:
o give a check to your financial consultant, who will open an account for
you, or
o complete an application and mail it to us, along with your check made
payable to Northstar Funds.
TAX-SHELTERED RETIREMENT PLANS
Call or write to us about opening your Northstar account as any one of the
following retirement plans:
o Roth IRAs
o IRAs
o SEP-IRAs
o Simple IRAs.
- --------------------------------------------------------------------------------
BUYING, SELLING AND EXCHANGING
Once you've opened an account and made your first investment, you can choose one
of three ways to buy, sell or exchange shares of Northstar funds:
o through your financial consultant
o directly, by mail or over the telephone
o using one of our automatic plans.
We'll send you a confirmation statement every time you make a transaction that
affects your account balance, except when we pay distributions. Some
broker-dealers or agents might charge you a fee if you buy, sell or exchange
shares through them.
Instructions for each option appear in the chart on page 40, but here are a few
things you should know before you begin.
- --------------------------------------------------------------------------------
HOW SHARES ARE PRICED
The price you pay when you buy and the price you receive when you sell or
exchange shares is determined by the net asset value (NAV) per share of the
share class. NAV is calculated each business day at the close of regular trading
on the New York Stock Exchange (usually 4:00 p.m. Eastern time) by dividing the
net assets of each fund class by the number of shares outstanding. To calculate
NAV, we determine the market value of the fund's portfolio securities using the
method described in the SAI. Please note that foreign securities may trade in
their primary markets on weekends or other days when the funds do not price
their shares. Therefore the value of a fund's portfolio that holds foreign
securities may change on days when you will not be able to buy, sell or exchange
your shares.
When you're buying shares, you'll pay the NAV that is next calculated after we
receive your order in proper form, plus any sales charges that apply. When
you're selling shares, you'll receive the NAV that is next calculated after we
receive your order in proper form, less any deferred sales charges that apply.
- --------------------------------------------------------------------------------
SOME RULES FOR BUYING
o The minimum amount of each investment after your first one is:
- $100 for non-retirement accounts
- $25 for retirement accounts
- $25 if you are investing using our automatic investment plan (see
page 40).
o We record most shares on our books electronically. We will issue a
certificate if you ask us in writing, however most of our shareholders
prefer not to have their shares in certificate form because certificated
shares can't be sold or exchanged by telephone or by using the systematic
withdrawal program.
o We have the right to refuse a request to buy shares.
38
<PAGE>
YOUR GUIDE TO BUYING,
SELLING AND EXCHANGING SHARES
OF NORTHSTAR FUNDS
- --------------------------------------------------------------------------------
SOME RULES FOR SELLING
o Selling your shares may result in a deferred sales charge. Please refer to
the table on page 36.
o We'll pay you within three days from the time we receive your request to
sell, unless you're selling shares you recently paid for by check. In that
case, we'll pay you when your check has cleared, which may take up to 15
days.
o If you are a corporation, partnership, executor, administrator, trustee,
custodian, guardian or if you are selling shares of a retirement plan,
you'll need to complete special documentation and give us your request in
writing. Please call us for information.
o You can reinvest part or all of the proceeds of any shares you sell
without paying a sales charge. You must let us know in writing within 30
days from the day you sold the shares, and you must buy the same class of
shares as you sold. We will reimburse you for any CDSC you paid. Please
see page 43 for information about how this can affect your taxes.
o If selling shares results in the value of your account falling below $500,
we have the right to close your account, so long as your account has been
open for at least a year. We'll let you know 60 days in advance, and if
you don't bring the account balance above $500, we'll sell your shares,
mail the proceeds to you and close your account. We may also close your
account if you give us an incorrect social security number or taxpayer
identification number.
o In unusual circumstances, we may temporarily suspend the processing of
requests to sell.
- --------------------------------------------------------------------------------
SOME RULES FOR EXCHANGING
o When you exchange shares, you are selling shares of one fund and using the
proceeds to buy shares of another fund. Please see page 43 for information
about how this can affect your taxes.
o Before you make an exchange, be sure to read the prospectus that discusses
the shares you're exchanging in to.
o You can exchange shares of any fund for the same class of shares of any
other fund, or for shares of the Cash Management Fund without a sales
charge. You will, however, pay a sales charge if you buy shares of the
Cash Management Fund, and then exchange them for Class A shares of any of
the other funds.
o For the purposes of calculating CDSC, shares you exchange will continue to
age from the day you first purchased them, even if you're exchanging into
the Cash Management Fund.
o We'll let you know 60 days in advance if we want to make any changes to
these rules.
[CLIPART] If you have any questions, please call 1-800-595-7827.
39
<PAGE>
YOUR GUIDE TO BUYING,
SELLING AND EXCHANGING SHARES
OF NORTHSTAR FUNDS
- --------------------------------------------------------------------------------
WAYS TO BUY, SELL OR EXCHANGE WHEN TO USE THIS OPTION
- ---------------------------------------- ----------------------------------
Through your financial consultant o buy
o sell
o exchange
- ---------------------------------------- ----------------------------------
By mail
Please call us if you have any questions o buy
- -- we can't process your request until o sell
we have all of the documents we need. o exchange
- ---------------------------------------- ----------------------------------
By telephone
To sign up for this service, complete o sell
section 9 of the application or call us o exchange
at 1-800-595-7827.
- ---------------------------------------- ----------------------------------
Automatic investment plan
To sign up for this service, complete o buy
section 7 of the application or call us
at 1-800-595-7827.
- ---------------------------------------- ----------------------------------
Systematic withdrawal program
To sign up for this service, complete o sell
section 8 of the application or call us
at 1-800-595-7827.
40
<PAGE>
YOUR GUIDE TO BUYING,
SELLING AND EXCHANGING SHARES
OF NORTHSTAR FUNDS
- --------------------------------------------------------------------------------
HOW TO USE IT
- --------------------------------------------------------------------------------
If you're buying shares, make your check payable to Northstar Funds and give it
to your financial consultant, who will forward it to us.
When you're selling or exchanging shares, give your written request to your
financial consultant, who may charge you a fee for this service.
Send your request to buy, sell or exchange in writing to:
Northstar Funds
c/o First Data Investor Services Group, Inc.
P.O. Box 5131
Westborough MA 01581-5131
Your letter should tell us:
o your account number
o your social security number or taxpayer identification number
o the name the account is registered in
o the fund name and share class you're buying or selling, and, for exchanges,
the fund name and share class you're exchanging in to
o the dollar value or number of shares you want to buy, sell or exchange.
If you're buying, include a check payable to Northstar Funds with your request.
If you're selling or exchanging, your request must be signed by all registered
owners of the account.
We'll ask you to guarantee the signatures if:
o you are selling more than $50,000 worth of shares
o your address of record has changed in the past 30 days
o you want us to send the payment to someone other than the registered owner,
to an address other than the address of record, or in any form other than by
check.
Signatures can be guaranteed by a bank, a member of a national stock exchange or
another eligible institution.
- --------------------------------------------------------------------------------
You can sell or exchange up to $50,000 of your shares by telephone.
Call us at 1-800-595-7827 between 8:30 a.m. and 4:00 p.m. Eastern time.
When you're calling with your request, we'll ask you for your name, social
security number, broker of record or other identification. If we don't ask for
these things and we process an unauthorized telephone transaction, we are
responsible for any losses to your account. Otherwise you are responsible for
any unauthorized use of the telephone transaction service.
We'll mail the proceeds of the sale to the address of record or wire $1,000 or
more to any commercial bank in the U.S. that is a member of the Federal Reserve
System. Northstar does not charge a fee for this service, but your bank may
charge you a fee for receiving a wire transfer.
- --------------------------------------------------------------------------------
You can authorize us to automatically withdraw a minimum of $25 each month from
your bank account and use it to buy shares in Northstar funds.
There's no charge for this service, but your bank may charge you a small set-up
or transaction fee. You can cancel the program at any time.
- --------------------------------------------------------------------------------
You can ask us to automatically transfer money from your Northstar account into
your bank account.
We will sell shares or share fractions on your behalf monthly, quarterly or
annually and automatically deposit the proceeds into your bank account. There
may be a sales charge on shares we sell on your behalf.
You must have at least $5,000 worth of shares in your account to participate in
this program. The minimum transfer amount is $25.
It isn't to your advantage to buy and sell shares of the same fund at the same
time, so you can't set up a systematic withdrawal program and an automatic
investment plan on the same account.
[CLIPART] If you have any questions, please call 1-800-595-7827.
41
<PAGE>
MUTUAL FUND
EARNINGS AND
YOUR TAXES
- --------------------------------------------------------------------------------
HOW THE FUNDS PAY DISTRIBUTIONS
Each Northstar fund distributes virtually all of its net investment income and
net capital gains to shareholders at least annually in the form of dividends.
The funds pay dividends as follows:
- --------------------------------------------------------------------------------
Growth Funds annually
- --------------------------------------------------------------------------------
Income and Growth Funds quarterly
- --------------------------------------------------------------------------------
Income Funds monthly
- --------------------------------------------------------------------------------
As a shareholder, you are entitled to a share of the income and capital gains a
fund distributes. The amount you receive is based on the number of shares you
own.
DISTRIBUTION OPTIONS
You can take your distributions as cash or reinvest them in the same class of
shares of any of our funds. You specify your preference when you open your
account. Distribution options vary by share class, as follows.
CLASS A, B & C SHARES
o reinvest both income dividends and capital gain distributions to buy
additional Class A, B or C shares of any fund you choose
o receive income dividends in cash and reinvest capital gain distributions to
buy additional Class A, B or C shares of any fund you choose
o receive both income dividends and capital gain distributions in cash.
If you want your distributions sent to an address other than the one we have on
record, please request so in writing.
If you don't specify how you would like to receive your distributions, we'll
automatically reinvest both income dividends and capital gain distributions in
additional shares of the same fund.
CLASS T SHARES
You can choose to receive your distributions in cash or by reinvesting them in
additional Class T shares of the same fund or any other fund that offers Class T
shares.
42
<PAGE>
MUTUAL FUND
EARNINGS AND
YOUR TAXES
- --------------------------------------------------------------------------------
HOW YOUR DISTRIBUTIONS ARE TAXED
Each Northstar fund intends to meet the requirements for being a tax-qualified
regulated investment company, which means they generally do not pay federal
income tax on the earnings they distribute to shareholders.
As a result, you'll generally have to pay taxes on any distributions you
receive. Income distributions, whether you take them as cash or reinvest them,
are taxable as ordinary income. Capital gain distributions are taxable as
long-term capital gains, regardless of how long you've held the shares.
Distributions may also be subject to state, local or foreign taxes.
If income distributed to you includes dividends paid by U.S. corporations, part
of the dividends the fund pays may be eligible for the corporate
dividends-received deduction.
TIMING YOUR PURCHASE
If you buy shares of a fund just before it makes a distribution, you will pay
the full price but part of your investment will come back to you as a taxable
distribution. Unless you are investing in a tax-deferred account, such as an
IRA, this is not to your advantage because you'll pay tax on the dividend but
will not have shared in the increase in the net asset value of the fund.
WHEN DISTRIBUTIONS ARE DECLARED
For tax purposes, distributions declared by the fund in October, November or
December and paid to you in January are taxable in the calendar year in which
they were declared.
BACKUP WITHHOLDING TAX
We'll notify you each year of the tax status of dividends and distributions. If
we don't have your tax identification number, or if you have been told by the
IRS that you are subject to backup withholding tax, we may be required to
withhold U.S. federal income tax on any distributions at the rate of 31%.
WHEN YOU SELL YOUR SHARES
When you sell or exchange shares you will realize a capital gain or loss,
depending on the difference between what your shares cost you and what you
receive for them. A capital gain or loss will be long-term or short-term,
depending on the length of time you held the shares.
In your federal income tax return you report a capital gain as income and a
capital loss as a deduction.
CONSULT YOUR TAX ADVISER
The information above is general in nature. You should consult your tax adviser
to discuss how investing in Northstar funds affects your personal tax situation.
[CLIPART] If you have any questions, please call 1-800-595-7827.
43
<PAGE>
FINANCIAL HIGHLIGHTS NORTHSTAR
SPECIAL FUND
The following chart shows the fund's financial performance by share class. The
1998, 1997, 1996 and 1995 figures have been audited by PricewaterhouseCoopers
LLP, whose report, along with the fund's financial statements, are included in
the annual report, which is available upon request.
The figures prior to 1995 were audited by other independent accountants.
The fund's performance is also reported in national newspapers under these
trading symbols: SpeclA, SpeclB, SpeclC or SpeclT.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Class A Class B
Year ended December 31, 1998 1997 1996 1995(1) 1998 1997
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Operating performance
Net asset value at the beginning of the
period $ 27.77 24.72 20.92 19.56 27.27 24.46
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment loss $ (0.27) (0.02) (0.04) (0.09) (0.48) (0.19)
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on
investments $ 2.23 3.68 3.84 2.48 2.20 3.61
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $ 1.96 3.66 3.80 2.39 1.72 3.42
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends from net realized gain on
investments sold $ (0.73) (0.61) -- (1.03) (0.73) (0.61)
- -----------------------------------------------------------------------------------------------------------------------------------
Total distributions $ (0.73) (0.61) -- (1.03) (0.73) (0.61)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value at the end of the period $ 29.00 27.77 24.72 20.92 28.26 27.27
- -----------------------------------------------------------------------------------------------------------------------------------
Total investment return(2) % 7.59 14.92 18.16 12.20 6.84 14.10
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of the period
(000s) $ 45,461 78,160 65,660 2,335 124,065 169,516
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets % 1.47 1.43 1.46 1.50(3) 2.18 2.15
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of expense reimbursement to
average net assets % -- -- 0.01 -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average
net assets % (0.70) (0.07) (0.30) (0.91)(3) (1.43) (0.78)
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate % 257 175 140 71 257 175
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Class B Class C
Year ended December 31, 1996 1995(1) 1998 1997 1996 1995(1)
- -----------------------------------------------------------------------------------------------------------------------------------
Operating performance
Net asset value at the beginning of the
period $ 20.84 19.56 27.26 24.46 20.84 19.56
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment loss $ (0.12) (0.12) (0.55) (0.20) (0.13) (0.15)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on
investments $ 3.74 2.43 2.26 3.61 3.75 2.46
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $ 3.62 2.31 1.71 3.41 3.62 2.31
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net realized gain on
investments sold $ -- (1.03) (0.73) (0.61) -- (1.03)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions $ -- (1.03) (0.73) (0.61) -- (1.03)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value at the end of the period $ 24.46 20.84 28.24 27.26 24.46 20.84
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment return(2) % 17.37 11.79 6.81 14.06 17.37 11.79
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of the period
(000s) $126,859 1,491 29,746 51,460 37,342 62
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets % 2.17 2.20(3) 2.22 2.18 2.20 2.20(3)
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expense reimbursement to
average net assets % 0.01 0.01 -- -- 0.01 0.03
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average
net assets % (1.01) (1.64)(3) (1.45) (0.82) (1.03) (1.60)(3)
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate % 140 71 257 175 140 71
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
CLASS T
Year ended December 31, 1998 1997 1996 1995 1994
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Operating performance
- ----------------------------------------------------------------------------------------------------------
Net asset value at the beginning of the
period $ 27.34 24.48 20.84 19.64 20.79
- -----------------------------------------------------------------------------------------------------------
Net investment loss $ (0.51) (0.18) (0.21) (0.34) (0.25)
- -----------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments $ 2.26 3.65 3.85 2.57 (0.76)
- -----------------------------------------------------------------------------------------------------------
Total from investment operations $ 1.75 3.47 3.64 2.23 (1.01)
- -----------------------------------------------------------------------------------------------------------
Dividends from net realized gain on
investments sold $ (0.73) (0.61) -- (1.03) (0.14)
- -----------------------------------------------------------------------------------------------------------
Total distributions $ (0.73) (0.61) -- (1.03) (0.14)
- -----------------------------------------------------------------------------------------------------------
Net asset value at the end of the period $ 28.36 27.34 24.48 20.84 19.64
- -----------------------------------------------------------------------------------------------------------
Total investment return(2) % 6.94 14.29 17.47 11.34 (4.86)
- -----------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- -----------------------------------------------------------------------------------------------------------
Net assets at the end of the period
(000s) $ 18,203 32,800 35,670 33,557 38,848
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets % 2.10 1.99 2.07 2.16 2.16
- -----------------------------------------------------------------------------------------------------------
Ratio of expense reimbursement to
average net assets % -- -- 0.04 -- --
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average
net assets % (1.33) (0.62) (0.89) (1.50) (1.25)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate % 257 175 140 71 39
- ----------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
(1) Classes A, B & C commenced operations on June 5, 1995.
(2) Assumes dividends have been reinvested and does not reflect the effect of
sales charges.
(3) Annualized.
44
<PAGE>
NORTHSTAR FINANCIAL
MID-CAP HIGHLIGHTS
GROWTH FUND
- --------------------------------------------------------------------------------
The following chart shows the fund's financial performance by share class. These
figures have been audited by PricewaterhouseCoopers LLP, whose report, along
with the fund's financial statements, are included in the annual report, which
is available upon request.
The fund's performance is also reported in national newspapers under this
trading symbol: MidCapGrI.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A(1) Class B(1) Class C(1)
Year ended December 31, 1998 1998 1998
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating performance
- ----------------------------------------------------------------------------------------------
Net asset value at the beginning of the period $ 10.00 10.00 10.00
- ----------------------------------------------------------------------------------------------
Net investment loss $ (0.03) (0.03) (0.04)
- ----------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments $ 2.99 3.00 3.00
- ----------------------------------------------------------------------------------------------
Total from investment operations $ 2.96 2.97 2.96
- ----------------------------------------------------------------------------------------------
Net asset value at the end of the period $ 12.96 12.97 12.96
- ----------------------------------------------------------------------------------------------
Total investment return(2) % 29.60 29.70 29.60
- ----------------------------------------------------------------------------------------------
Ratios and supplemental data
- ----------------------------------------------------------------------------------------------
Net assets at the end of the period (000s) $ 610 140 87
- ----------------------------------------------------------------------------------------------
Ratio of expenses to average net assets(3) % 1.80 2.50 2.50
- ----------------------------------------------------------------------------------------------
Ratio of expense reimbursement to average net assets(3) % 0.62 0.77 0.72
- ----------------------------------------------------------------------------------------------
Ratio of net investment loss to average net assets(3) % (1.10) (2.05) (2.04)
- ----------------------------------------------------------------------------------------------
Portfolio turnover rate % 61 61 61
- ----------------------------------------------------------------------------------------------
</TABLE>
- ----------
(1) Class A, B and C commenced operations on August 20, 1998.
(2) Assumes dividends have been reinvested and does not reflect the effect of
sales charges.
(3) Annualized.
[CLIPART] If you have any questions, please call 1-800-595-7827.
45
<PAGE>
FINANCIAL NORTHSTAR
HIGHLIGHTS GROWTH
FUND
The following chart shows the fund's financial performance by share class. The
1998, 1997, 1996 and 1995 figures have been audited by PricewaterhouseCoopers
LLP, whose report, along with the fund's financial statements, are included in
the annual report, which is available upon request. The figures prior to 1995
were audited by other independent accountants.
The fund's performance is also reported in national newspapers under these
trading symbols: GrwthA, GrwthB or GrwthT.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A Class B
Year ended December 31, 1998 1997 1996 1995(1) 1998 1997
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Operating performance
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value at the beginning of the period $ 21.26 17.92 15.53 17.59 20.93 17.76
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) $ (0.08) 0.03 0.02 0.08 (0.23) (0.15)
- -------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments $ 5.09 4.16 3.18 1.95 4.97 4.17
- -------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $ 5.01 4.19 3.20 2.03 4.74 4.02
- -------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income $ -- -- -- (0.10) -- --
- -------------------------------------------------------------------------------------------------------------------------------
Dividends from net realized gain on investments
sold $ (0.21) (0.85) (0.81) (3.99) (0.21) (0.85)
- -------------------------------------------------------------------------------------------------------------------------------
Total distributions $ (0.21) (0.85) (0.81) (4.09) (0.21) (0.85)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value at the end of the period $ 26.06 21.26 17.92 15.53 25.46 20.93
- -------------------------------------------------------------------------------------------------------------------------------
Total investment return(2) % 23.61 23.59 20.54 11.55 22.69 22.84
- -------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- -------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of the period (000s) $29,358 9,334 4,750 1,355 15,480 8,815
- -------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets % 1.37 1.37 150 1.42(3) 2.13 2.14
- -------------------------------------------------------------------------------------------------------------------------------
Ratio of expense reimbursement to average
net assets % -- 0.03 0.06 -- -- --
- -------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss) to
average net assets % (0.47) 0.04 0.11 0.63(3) (1.26) (0.95)
- -------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate % 98 32 62 134 98 32
- -------------------------------------------------------------------------------------------------------------------------------
Class B Class C
Year ended December 31, 1996 1995(1) 1998 1997 1996 1995(1)
- -------------------------------------------------------------------------------------------------------------------------------
Operating performance
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value at the beginning of the period $ 15.50 17.59 20.91 17.76 15.50 17.59
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) $ (0.06) 0.06 (0.27) (0.13) (0.05) 0.04
- -------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments $ 3.13 1.92 5.05 4.13 3.12 1.92
- -------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $ 3.07 1.98 4.78 4.00 3.07 1.96
- -------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income $ -- (0.08) -- -- -- (0.06)
- -------------------------------------------------------------------------------------------------------------------------------
Dividends from net realized gain on investments
sold $ (0.81) (3.99) (0.21) (0.85) (0.81) (3.99)
- -------------------------------------------------------------------------------------------------------------------------------
Total distributions $ (0.81) (4.07) (0.21) (0.85) (0.81) (4.05)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value at the end of the period $ 17.76 15.50 25.48 20.91 17.76 15.50
- -------------------------------------------------------------------------------------------------------------------------------
Total investment return(2) % 19.74 11.27 22.90 22.73 19.74 11.17
- -------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- -------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of the period (000s) $ 4,444 1,987 1,625 1,152 365 69
- -------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets % 2.20 2.07(3) 2.13 2.17 2.20 2.11(3)
- -------------------------------------------------------------------------------------------------------------------------------
Ratio of expense reimbursement to average
net assets % 0.04 -- -- -- 0.15 --
- -------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss) to
average net assets % (0.55) 0.06(3) (1.24) (1.00) (0.57) 0.02(3)
- -------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate % 62 134 98 32 62 134
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Class T
Year ended December 31, 1998 1997 1996 1995 1994
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Operating performance
- --------------------------------------------------------------------------------------------------------------------
Net asset value at the beginning of the period $ 21.01 17.82 15.53 15.75 17.33
- --------------------------------------------------------------------------------------------------------------------
Net investment income (loss) $ (0.36) (0.17) (0.06) 0.07 0.08
- --------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on
investments $ 5.14 4.22 3.16 3.77 (1.41)
- --------------------------------------------------------------------------------------------------------------------
Total from investment operations $ 4.78 4.05 3.10 3.84 (1.33)
- --------------------------------------------------------------------------------------------------------------------
Dividends from net investment income $ -- -- -- (0.07) (0.08)
- --------------------------------------------------------------------------------------------------------------------
Dividends from net realized gain on investments sold $ (0.21) (0.85) (0.81) (3.99) (0.15)
- --------------------------------------------------------------------------------------------------------------------
Distributions from capital $ -- -- -- -- (0.02)
- --------------------------------------------------------------------------------------------------------------------
Total distributions $ (0.21) (0.85) (0.81) (4.06) (0.25)
- --------------------------------------------------------------------------------------------------------------------
Net asset value at the end of the period $ 25.59 21.02 17.82 15.53 15.75
- --------------------------------------------------------------------------------------------------------------------
Total investment return(2) % 22.79 22.94 19.90 24.40 (7.66)
- --------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- --------------------------------------------------------------------------------------------------------------------
Net assets at the end of the period (000s) $ 52,023 73,674 70,406 76,343 76,391
- --------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets % 2.05 2.03 2.00 2.00 2.00
- --------------------------------------------------------------------------------------------------------------------
Ratio of expense reimbursement to average net assets % -- -- 0.04 -- --
- --------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss) to average
net assets % (1.19) (0.81) (3.05) 0.37 0.49
- --------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate % 98 32 62 134 54
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
(1) Classes A, B & C commenced operations on June 5, 1995.
(2) Assumes dividends have been reinvested and does not reflect the effect of
sales charges.
(3) Annualized.
46
<PAGE>
NORTHSTAR FINANCIAL
GROWTH + VALUE HIGHLIGHTS
FUND
The following chart shows the fund's financial performance by share class. These
figures have been audited by PricewaterhouseCoopers LLP, whose report, along
with the fund's financial statements, are included in the annual report, which
is available upon request.
The fund's performance is also reported in national newspapers under these
trading symbols: Gr+ValA, Gr+ValB or Gr+ValC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A(1) Class B(1) Class C(1)
Year ended October 31, 1998 1997 1998 1997 1998 1997
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Operating performance
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value at the beginning of the period $ 12.15 10.00 12.08 10.00 12.08 10.00
- ----------------------------------------------------------------------------------------------------------------------------
Net investment loss $ (0.11) (0.05) (0.16) (0.08) (0.16) (0.08)
- ----------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments $ (1.42) 2.20 (1.45) 2.16 (1.45) 2.16
- ----------------------------------------------------------------------------------------------------------------------------
Total from investment operations $ (1.53) 2.15 (1.61) 2.08 (1.61) 2.08
- ----------------------------------------------------------------------------------------------------------------------------
Dividends from net realized gain (loss) on
investments sold $ (0.18) -- (0.18) -- (0.18) --
- ----------------------------------------------------------------------------------------------------------------------------
Total distributions
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value at the end of the period $ 10.44 12.15 10.29 12.08 10.29 12.08
- ----------------------------------------------------------------------------------------------------------------------------
Total investment return(2) % (12.63) 21.50 (13.38) 20.80 (13.38) 20.80
- ----------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ----------------------------------------------------------------------------------------------------------------------------
Net assets at the end of the period (000s) $ 33,425 34,346 105,991 76,608 37,456 26,962
- ----------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets(3) $ 1.72 1.84 2.45 2.55 2.46 2.56
- ----------------------------------------------------------------------------------------------------------------------------
Ratio of expense reimbursement to average
net assets(3) $ -- 0.02 -- 0.02 -- 0.02
- ----------------------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average
net assets(3) $ (0.92) (0.94) (1.67) (1.68) (1.69) (1.70)
- ----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate % 162 144 162 144 162 144
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
(1) Class A, B and C commenced operations on November 18, 1996.
(2) Assumes dividends have been reinvested and does not reflect the effect of
sales charges.
(3) Annualized.
[CLIPART] If you have any questions, please call 1-800-595-7827.
47
<PAGE>
FINANCIAL NORTHSTAR
HIGHLIGHTS INTERNATIONAL
VALUE FUND
The following chart shows the fund's financial performance by share class.(1)
The 1998 and 1997 figures have been audited by PricewaterhouseCoopers LLP, whose
report, along with the fund's financial statements, are included in the annual
report, which is available upon request.
The figures prior to 1997 were audited by other independent accountants.
The fund's performance is also reported in national newspapers under these
trading symbols: IntValA, IntValB or IntValC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A Class B
Year ended October 31, 1998 1997 1996 1995(1) 1998
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Operating performance
- --------------------------------------------------------------------------------------------------------------------------
Net asset value at the beginning of the period $ 10.90 9.05 8.10 7.64 10.87
- --------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) $ 0.11 (0.09) 0.14 0.09 0.07
- --------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments $ 0.96 2.30 0.85 0.37 0.91
- --------------------------------------------------------------------------------------------------------------------------
Total from investment operations $ 1.07 2.21 0.99 0.46 0.98
- --------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income $ -- (0.14) (0.04) -- --
- --------------------------------------------------------------------------------------------------------------------------
Dividends from net realized gain on investments
sold $ (0.09) (0.22) -- -- (0.09)
- --------------------------------------------------------------------------------------------------------------------------
Total distributions $ (0.09) (0.36) (0.04) -- (0.09)
- --------------------------------------------------------------------------------------------------------------------------
Net asset value at the end of the period $ 11.88 10.90 9.05 8.10 11.76
- --------------------------------------------------------------------------------------------------------------------------
Total investment return(3) % 9.86 27.59 12.15 9.39(4) 9.16
- --------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- --------------------------------------------------------------------------------------------------------------------------
Net assets at the end of the period (000s) $211,018 60,539 16,777 5,188 145,976
- --------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets % 1.74 1.80(4) 1.85 1.85(4) 2.47
- --------------------------------------------------------------------------------------------------------------------------
Ratio of expense reimbursement to average
net assets % -- 0.27(4) 0.97 6.08(4) --
- --------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income to average
net assets % 1.62 0.46(4) 1.52 1.67(4) 0.69
- --------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate % 32 26 74 -- 32
- --------------------------------------------------------------------------------------------------------------------------
Class B Class C
Year ended October 31, 1997(2) 1998 1997 1996 1995(1)
- --------------------------------------------------------------------------------------------------------------------------
Operating performance
- --------------------------------------------------------------------------------------------------------------------------
Net asset value at the beginning of the period $ 10.00 10.86 8.93 8.05 7.61
- --------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) $ (0.02) 0.06 (0.06) 0.05 0.06
- --------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments $ 0.89 0.92 2.20 0.86 0.38
- --------------------------------------------------------------------------------------------------------------------------
Total from investment operations $ 0.87 0.98 2.14 0.91 0.44
- --------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income $ -- -- (0.04) (0.03) --
- --------------------------------------------------------------------------------------------------------------------------
Dividends from net realized gain on investments
sold $ -- (0.09) (0.17) -- --
- --------------------------------------------------------------------------------------------------------------------------
Total distributions $ -- (0.09) (0.21) (0.03) --
- --------------------------------------------------------------------------------------------------------------------------
Net asset value at the end of the period $ 10.87 11.75 10.86 8.93 8.05
- --------------------------------------------------------------------------------------------------------------------------
Total investment return(3) % 8.70 9.07 25.92 11.39 8.89(4)
- --------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- --------------------------------------------------------------------------------------------------------------------------
Net assets at the end of the period (000s) $ 59,185 137,651 62,103 14,530 5,749
- --------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets % 2.50(4) 2.47 2.50(4) 2.50 2.50(4)
- --------------------------------------------------------------------------------------------------------------------------
Ratio of expense reimbursement to average
net assets % 0.08(4) -- 0.24(4) 1.21 6.08(4)
- --------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income to average
net assets % (0.71)(4) 0.68 (0.23)(4) 0.62 1.13(4)
- --------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate % 26 32 26 74 --
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
(1) The mutual fund commenced operations on March 6, 1995 as the Brandes
International Fund, a series of the Brandes Investment Trust. At the close
of business on April 18, 1997 (the "Closing "), the Northstar
International Value Fund ("International Value Fund") acquired the net
assets of the Brandes International Fund, pursuant to an Agreement of
Reorganization dated February 4, 1997. On April 21, 1997, the Brandes
International Fund was reorganized as the Northstar International Value
Fund.
(2) Class B commenced operations on April 18, 1997.
<PAGE>
(3) Assumes dividends have been reinvested and does not reflect the effect of
sales charges.
(4) Annualized.
48
<PAGE>
NORTHSTAR FINANCIAL
EMERGING MARKETS HIGHLIGHTS
VALUE FUND
The following chart shows the fund's financial performance by share class. These
figures have been audited by PricewaterhouseCoopers LLP, whose report, along
with the fund's financial statements, are included in the annual report, which
is available upon request.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A(1) Class B(1) Class C(1)
Year ended October 31, 1998 1998 1998
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating performance
- ----------------------------------------------------------------------------------------------------
Net asset value at the beginning of the period $ 10.00 10.00 10.00
- ----------------------------------------------------------------------------------------------------
Net investment gain $ 0.12 0.09 0.09
- ----------------------------------------------------------------------------------------------------
Net realized and unrealized loss on investments $ (2.43) (2.44) (2.46)
- ----------------------------------------------------------------------------------------------------
Total from investment operations $ (2.31) (2.35) (2.37)
- ----------------------------------------------------------------------------------------------------
Net asset value at the end of the period $ 7.69 7.65 7.63
- ----------------------------------------------------------------------------------------------------
Total investment return(2) % (23.10) (23.50) (23.70)
- ----------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ----------------------------------------------------------------------------------------------------
Net assets at the end of the period (000s) $ 3,815 3,583 2,304
- ----------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets(3) % 1.80 2.50 2.50
- ----------------------------------------------------------------------------------------------------
Ratio of expense reimbursement to average
net assets(3) % 2.08 2.24 2.37
- ----------------------------------------------------------------------------------------------------
Ratio of net investment loss to average
net assets(3) % 3.38 2.55 2.60
- ----------------------------------------------------------------------------------------------------
Portfolio turnover rate % -- -- --
- ----------------------------------------------------------------------------------------------------
</TABLE>
- ----------
(1) Class A, B and C commenced operations on January 1, 1998.
(2) Assumes dividends have been reinvested and does not reflect the effect of
sales charges.
(3) Annualized.
[CLIPART] If you have any questions, please call 1-800-595-7827.
49
<PAGE>
FINANCIAL NORTHSTAR
HIGHLIGHTS INCOME AND
GROWTH FUND
The following chart shows the fund's financial performance by share class. These
figures have been audited by PricewaterhouseCoopers LLP, whose report, along
with the fund's financial statements, are included in the annual report, which
is available upon request.
The fund's performance is also reported in national newspapers under these
trading symbols: IncGrA, IncGrB or IncGrC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A Class B
Year ended October 31, 1998 1997 1996 1995 1994(1) 1998 1997
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Operating performance
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value at the beginning
of the period $ 12.47 12.16 10.86 10.00 10.00 12.44 12.13
- ---------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.37 0.38 0.32 0.35 0.30 0.29 0.27
- ---------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain
(loss) on investments $ (0.22) 1.53 1.29 0.84 (0.05) (0.22) 1.55
- ---------------------------------------------------------------------------------------------------------------------------
Total from investment operations $ 0.15 1.91 1.61 1.19 0.25 0.07 1.82
- ---------------------------------------------------------------------------------------------------------------------------
Dividends from net investment
income $ (0.39) (0.34) (0.31) (0.33) (0.25) (0.30) (0.25)
- ---------------------------------------------------------------------------------------------------------------------------
Dividends from net realized gain
on investments sold $ (0.53) (1.26) -- -- -- (0.53) (1.26)
- ---------------------------------------------------------------------------------------------------------------------------
Total distributions $ (0.92) (1.60) (0.31) (0.33) (0.25) (0.83) (1.51)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value at the end of the
period $ 11.70 12.47 12.16 10.86 10.00 11.68 12.44
- ---------------------------------------------------------------------------------------------------------------------------
Total investment return(2) % 1.12 17.02 14.48 13.19 2.48 0.44 15.06
- ---------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ---------------------------------------------------------------------------------------------------------------------------
Net assets at the end of the
period (000s) $ 47,378 53,805 85,250 76,031 72,223 55,873 73,829
- ---------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net
assets % 1.40 1.47 1.52 1.51 1.50(3) 2.12 2.18
- ---------------------------------------------------------------------------------------------------------------------------
Ratio of expense reimbursement
to average net assets % -- -- -- -- 0.47(3) -- --
- ---------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets % 2.99 2.90 2.78 3.39 3.73(3) 2.28 2.18
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate % 102 56 147 91 26 102 56
- ---------------------------------------------------------------------------------------------------------------------------
Class B Class C
Year ended October 31, 1996 1995 1994(1) 1998 1997 1996 1995 1994(1)
- ------------------------------------------------------------------------------------------------------------------------------------
Operating performance
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value at the beginning
of the period $ 10.84 9.99 10.64 12.42 12.12 10.83 9.99 10.37
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.24 0.27 0.20 0.31 0.28 0.24 0.27 0.20
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain
(loss) on investments $ 1.28 0.85 (0.65) (0.24) 1.54 1.28 0.85 (0.38)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $ 1.52 1.12 (0.45) 0.07 1.82 1.52 1.12 (0.18)
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment
income $ (0.23) (0.27) (0.20) (0.30) (0.26) (0.23) (0.28) (0.20)
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net realized gain
on investments sold $ -- -- -- (0.53) (1.26) -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions $ (0.23) (0.27) (0.20) (0.83) (1.52) (0.23) (0.28) (0.20)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value at the end of the
period $ 12.13 10.84 9.99 11.66 12.42 12.12 10.83 9.99
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment return(2) % 13.60 12.31 (4.20) 0.51 15.04 13.68 12.33 (1.75)
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of the
period (000s) $ 71,123 60,347 37,767 41,186 69,494 60,458 53,661 4,823
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net
assets % 2.26 2.23 2.20(3) 2.09 2.15 2.20 2.22 2.20(3)
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expense reimbursement
to average net assets % -- -- 0.16(3) -- -- -- -- 0.06(3)
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets % 2.04 2.66 3.00(3) 2.32 2.21 2.10 2.67 2.87(3)
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate % 147 91 26 102 56 147 91 26
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- ----------
(1) Class A commenced operations on November 8, 1993. Class B commenced
operations on February 9, 1994. Class C commenced operations on March 31,
1994.
(2) Assumes dividends have been reinvested and does not reflect the effect of
sales charges.
(3) Annualized.
50
<PAGE>
NORTHSTAR FINANCIAL
GOVERNMENT HIGHLIGHTS
SECURITIES
FUND
The following chart shows the fund's financial performance by share class. The
1998, 1997, 1996 and 1995 figures have been audited by PricewaterhouseCoopers
LLP, whose report, along with the fund's financial statements, are included in
the annual report, which is available upon request.
The figures prior to 1995 were audited by other independent accountants.
The fund's performance is also reported in national newspapers under this
trading symbol: GovtA, GovtB or GovtT.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A Class B
Year ended December 31, 1998 1997 1996 1995(1) 1998 1997
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Operating performance
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value at the beginning of the period $ 9.53 9.48 10.07 9.51 9.55 9.48
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.49 0.68 0.63 0.34 0.51 0.52
- -------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on
investments $ -- -- (0.60) 0.59 (0.09) 0.11
- -------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $ 0.49 0.68 0.03 0.93 0.42 0.63
- -------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income $ (0.64) (0.63) (0.62) (0.37) (0.57) (0.56)
- -------------------------------------------------------------------------------------------------------------------------------
Total distributions $ (0.64) (0.63) (0.62) (0.37) (0.57) (0.56)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value at the end of the period $ 9.38 9.53 9.48 10.07 9.40 9.55
- -------------------------------------------------------------------------------------------------------------------------------
Total investment return(2) % 5.27 7.46 0.57 10.04 4.49 6.93
- -------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- -------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of the period (000s) $ 31,181 1,744 14,185 3,235 27,250 13,503
- -------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets % 1.17 1.15 1.09 1.20(3) 1.90 1.89
- -------------------------------------------------------------------------------------------------------------------------------
Ratio of expense reimbursement to average net
assets % 0.15 0.17 0.20 0.20(3) 0.15 0.17
- -------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income to average net
assets % 6.18 6.44 6.85 6.01(3) 5.55 5.50
- -------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate % 304 129 101 295 304 129
- -------------------------------------------------------------------------------------------------------------------------------
Class B Class C
Year ended December 31, 1996 1995(1) 1998 1997 1996 1995(1)
- -------------------------------------------------------------------------------------------------------------------------------
Operating performance
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value at the beginning of the period $ 10.07 9.51 9.54 9.47 10.07 9.51
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.57 0.30 0.45 0.59 0.58 0.30
- -------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on
investments $ (0.60) 0.59 (0.05) 0.04 (0.62) 0.59
- -------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $ (0.03) 0.89 0.40 0.63 (0.04) 0.89
- -------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income $ (0.56) (0.33) (0.56) (0.56) (0.56) (0.33)
- -------------------------------------------------------------------------------------------------------------------------------
Total distributions $ (0.56) (0.33) (0.56) (0.56) (0.56) (0.33)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value at the end of the period $ 9.48 10.07 9.38 9.54 9.47 10.07
- -------------------------------------------------------------------------------------------------------------------------------
Total investment return(2) % (0.15) 9.61 4.35 6.93 (0.21) 9.61
- -------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- -------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of the period (000s) $ 9,135 2,790 2,652 542 1,147 8
- -------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets % 1.80 1.70(3) 1.90 1.85 1.80 1.68(3)
- -------------------------------------------------------------------------------------------------------------------------------
Ratio of expense reimbursement to average net
assets % 0.20 0.20(3) 0.15 0.17 0.21 0.20(3)
- -------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income to average net
assets % 6.05 5.20(3) 5.44 5.67 6.22 5.28(3)
- -------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate % 101 295 304 129 101 295
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Class T
Year ended December 31, 1998 1997 1996 1995 1994
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Operating performance
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value at the beginning of the period $ 9.55 9.48 10.07 8.74 10.32
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.58 0.57 0.60 0.58 0.56
- -------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on
investments $ (0.14) 0.10 (0.59) 1.35 (1.56)
- -------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $ 0.44 0.67 0.01 1.93 (1.00)
- -------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income $ (0.60) (0.60) (0.60) (0.60) (0.57)
- -------------------------------------------------------------------------------------------------------------------------------
Distributions from capital $ -- -- -- -- (0.01)
- -------------------------------------------------------------------------------------------------------------------------------
Total distributions $ (0.60) (0.60) (0.60) (0.60) (0.58)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value at the end of the period $ 9.39 9.55 9.48 10.07 8.74
- -------------------------------------------------------------------------------------------------------------------------------
Total investment return(2) % 4.84 7.38 0.32 22.90 (9.82)
- -------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- -------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of the period (000s) $ 49,713 89,939 112,126 150,951 152,608
- -------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets % 1.55 1.45 1.30 1.30 1.29
- -------------------------------------------------------------------------------------------------------------------------------
Ratio of expense reimbursement and waiver to
average net assets % 0.15 0.20 0.21 0.20 0.20
- -------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss) to
average net assets % 5.97 5.99 6.37 6.23 6.00
- -------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate % 304 129 101 295 315
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
(1) Classes A, B & C commenced operations on June 5, 1995.
(2) Assumes dividends have been reinvested and does not reflect the effect of
sales charges.
(3) Annualized.
[CLIPART] If you have any questions, please call 1-800-595-7827.
51
<PAGE>
FINANCIAL NORTHSTAR
HIGHLIGHTS HIGH YIELD
FUND
The following chart shows the fund's financial performance by share class. The
1998, 1997, 1996 and 1995 figures have been audited by PricewaterhouseCoopers
LLP, whose report, along with the fund's financial statements, are included in
the annual report, which is available upon request.
The figures prior to 1995 were audited by other independent accountants.
The fund's performance is also reported in national newspapers under these
trading symbols: HiYldA, HiYldB or HiYldT.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A Class B
Year ended December 31, 1998 1997 1996 1995(1) 1998
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Operating performance
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value at the beginning of the period $ 9.14 8.94 8.56 8.68 9.15
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.75 0.73 0.76 0.48 0.68
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments $ (0.55) 0.23 0.44 (0.10) (0.56)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $ 0.20 0.96 1.20 0.38 0.12
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income $ (0.75) (0.76) (0.75) (0.50) (0.69)
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net realized gain $ (0.06) -- -- -- (0.06)
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from capital $ -- -- (0.07) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions $ (0.81) (0.76) (0.82) (0.50) (0.75)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value at the end of the period $ 8.53 9.14 8.94 8.56 8.52
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment return(2) % 2.25 11.18 14.74 4.48 1.28
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of the period (000s) $ 31,134 16,213 13,146 7,466 139,711
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets % 1.26 1.20 1.11 1.02(3) 1.97
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income to average net assets % 8.27 8.06 8.60 9.83(3) 7.50
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate % 135 134 128 103 135
- ------------------------------------------------------------------------------------------------------------------------------------
Class B Class C
Year ended December 31, 1997 1996 1995(1) 1998 1997 1996 1995(1)
- ------------------------------------------------------------------------------------------------------------------------------------
Operating performance
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value at the beginning of the period $ 8.95 8.57 8.68 9.15 8.95 8.57 8.68
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.67 0.71 0.44 0.67 0.67 0.72 0.44
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments $ 0.23 0.43 (0.09) (0.54) 0.23 0.42 (0.09)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $ 0.90 1.14 0.35 0.13 0.90 1.14 0.35
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income $ (0.70) (0.69) (0.46) (0.69) (0.70) (0.69) (0.46)
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net realized gain $ -- -- -- (0.06) -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from capital $ -- (0.07) -- -- -- (0.07) --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions $ (0.70) (0.76) (0.46) (0.75) (0.70) (0.76) (0.46)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value at the end of the period $ 9.15 8.95 8.57 8.53 9.15 8.95 8.57
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment return(2) % 10.38 13.94 4.17 1.39 10.37 13.93 4.17
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of the period (000s) $ 108,469 79,199 29,063 23,559 21,393 14,275 3,410
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets % 1.91 1.81 1.71(3) 1.98 1.92 1.82 1.72(3)
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income to average net assets % 7.35 7.88 9.18(3) 7.48 7.35 7.85 9.29(3)
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate % 134 128 103 135 134 128 103
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Class T
Year ended December 31, 1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Operating performance
- ---------------------------------------------------------------------------------------------------------------
Net asset value at the beginning of the
period $ 9.14 8.94 8.56 8.29 9.31
- ---------------------------------------------------------------------------------------------------------------
Net investment income $ 0.71 0.71 0.73 0.84 0.81
- ---------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments $ (0.54) 0.23 0.45 0.26 (0.99)
- ---------------------------------------------------------------------------------------------------------------
Total from investment operations $ 0.17 0.94 1.18 1.10 (0.18)
<PAGE>
- ---------------------------------------------------------------------------------------------------------------
Dividends from net investment income $ (0.73) (0.74) (0.73) (0.83) (0.83)
- ---------------------------------------------------------------------------------------------------------------
Dividends from net realized gain $ -- -- -- -- (0.01)
- ---------------------------------------------------------------------------------------------------------------
Distributions from capital $ (0.06) -- (0.07) -- --
- ---------------------------------------------------------------------------------------------------------------
Total distributions $ (0.79) (0.74) (0.80) (0.83) (0.84)
- ---------------------------------------------------------------------------------------------------------------
Net asset value at the end of the period $ 8.52 9.14 8.94 8.56 8.29
- ---------------------------------------------------------------------------------------------------------------
Total investment return(2) % 1.79 10.86 14.49 13.71 (2.18)
- ---------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ---------------------------------------------------------------------------------------------------------------
Net assets at the end of the period (000s) $ 89,116 109,320 124,431 139,711 136,426
- ---------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets % 1.60 1.47 1.31 1.33 1.34
- ---------------------------------------------------------------------------------------------------------------
Ratio of expense reimbursement to average
net assets % -- -- -- -- --
- ---------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss) to
average net assets % 7.83 7.77 8.43 9.69 9.08
- ---------------------------------------------------------------------------------------------------------------
Portfolio turnover rate % 135 134 128 103 86
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
(1) Classes A, B & C commenced operations on June 5, 1995.
(2) Assumes dividends have been reinvested and does not reflect the effect of
sales charges.
(3) Annualized.
52
<PAGE>
NORTHSTAR FINANCIAL
HIGH TOTAL HIGHLIGHTS
RETURN FUND II
The following chart shows the fund's financial performance by share class. These
figures have been audited by PricewaterhouseCoopers LLP, whose report, along
with the fund's financial statements, are included in the annual report, which
is available upon request.
The fund's performance is also reported in national newspapers under these
trading symbols: HTR 2 A, HTR 2 B or HTR 2 C.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A(1) Class B(1) Class C(1)
Year ended October 31, 1998 1997 1998 1997 1998 1997
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Operating performance
- --------------------------------------------------------------------------------------------------------------------------
Net asset value at the beginning of the period $ 5.49 5.00 5.49 5.00 5.50 5.00
- --------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.50 0.28 0.47 0.25 0.47 0.25
- --------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized loss on investments $ (0.70) 0.53 (0.70) 0.53 (0.71) 0.54
- --------------------------------------------------------------------------------------------------------------------------
Total from investment operations $ (0.20) 0.81 (0.23) 0.78 (0.24) 0.79
- --------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income $ (0.48) (0.28) (0.44) (0.25) (0.44) (0.25)
- --------------------------------------------------------------------------------------------------------------------------
Distributions declared from capital $ (0.03) (0.04) (0.03) (0.04) (0.03) (0.04)
- --------------------------------------------------------------------------------------------------------------------------
Total distributions $ (0.51) (0.32) (0.47) (0.29) (0.47) (0.29)
- --------------------------------------------------------------------------------------------------------------------------
Net asset value at the end of the period $ 4.78 5.49 4.79 5.49 4.79 5.50
- --------------------------------------------------------------------------------------------------------------------------
Total investment return(2) % (4.23) 16.53 (4.90) 15.91 (4.90) 16.12
- --------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- --------------------------------------------------------------------------------------------------------------------------
Net assets at the end of the period (000s) $ 40,924 8,548 168,859 38,076 53,703 12,334
- --------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets(3) % 1.44 1.26 2.17 1.95 2.17 1.95
- --------------------------------------------------------------------------------------------------------------------------
Ratio of expense reimbursement to average
net assets(3) % 0.01 3.36 0.02 0.75 0.01 0.78
- --------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income to average
net assets(3) % 8.90 5.89 8.17 5.20 8.16 5.17
- --------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate % 150 164 150 164 150 164
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
(1) Classes A, B & C commenced operations on January 31, 1997.
(2) Assumes dividends have been reinvested and does not reflect the effect of
sales charges.
(3) Annualized.
[CLIPART] If you have any questions, please call 1-800-595-7827.
53
<PAGE>
FINANCIAL NORTHSTAR
HIGHLIGHTS HIGH TOTAL
RETURN FUND
The following chart shows the fund's financial performance by share class. These
figures have been audited by PricewaterhouseCoopers LLP, whose report, along
with the fund's financial statements, are included in the annual report, which
is available upon request.
The fund's performance is also reported in national newspapers under these
trading symbols: HiTRA, HiTRB or HiTRC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A Class B
Year ended October 31, 1998 1997 1996 1995 1994(1) 1998 1997
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Operating performance
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value at the beginning
of the period $ 5.00 4.78 4.48 4.41 5.00 5.00 4.77
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.46 0.48 0.46 0.48 0.41 0.43 0.44
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain
on investments $ (1.07) 0.20 0.32 0.07 (0.60) (1.07) 0.22
- ---------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $ (0.61) 0.68 0.78 0.55 (0.19) (0.64) 0.66
- ---------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment
income $ (0.47) (0.46) (0.48) (0.48) (0.40) (0.44) (0.43)
- ---------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment
gain on investments sold $ (0.15) -- -- -- -- (0.15) --
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions $ (0.62) (0.46) (0.48) (0.48) (0.40) (0.59) (0.43)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value at the end of the
period $ 3.77 5.00 4.78 4.48 4.41 3.77 5.00
- ---------------------------------------------------------------------------------------------------------------------------------
Total investment return(2) %(13.65) 15.03 18.14 13.02 (4.11) (14.28) 14.46
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of the
period (000s) $148,650 215,361 167,698 88,552 50,797 428,903 577,351
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net
assets % 1.30 1.42 1.52 1.55 1.50(3) 2.02 2.12
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of expense reimbursement
to average net assets % -- -- -- -- 0.99(3) -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets(3) % 9.93 9.88 9.86 10.90 10.09(3) 9.20 9.18
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate % 123 183 158 145 163 123 183
- ---------------------------------------------------------------------------------------------------------------------------------
Class B Class C
Year ended October 31, 1996 1995 1994(1) 1998 1997 1996 1995 1994(1)
- ------------------------------------------------------------------------------------------------------------------------------------
Operating performance
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value at the beginning
of the period $ 4.47 4.41 5.20 5.02 4.79 4.49 4.41 5.06
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.43 0.45 0.33 0.43 0.44 0.43 0.44 0.26
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain
on investments $ 0.32 0.06 (0.80) (1.08) 0.22 0.32 0.09 (0.65)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $ 0.75 0.51 (0.47) (0.65) 0.66 0.75 0.53 (0.39)
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment
income $ (0.45) (0.45) (0.32) (0.44) (0.43) (0.45) (0.45) (0.26)
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment
gain on investments sold $ -- -- -- (0.15) -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions $ (0.45) (0.45) (0.32) (0.59) (0.43) (0.45) (0.45) (0.26)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value at the end of the
period $ 4.77 4.47 4.41 3.78 5.02 4.79 4.49 4.41
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment return(2) % 17.08 11.97 (9.30) (14.41) 14.42 17.28 12.44 (7.21)
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of the
period (000s) $346,919 96,362 25,880 64,141 97,457 54,382 11,011 2,330
- --------------------------------
- ----------------------------------------------------------------------------------------------------
Ratio of expenses to average net
assets % 2.23 2.25 2.20(3) 2.03 2.13 2.23 2.27 2.20(3)
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expense reimbursement
to average net assets % -- -- 0.20(3) -- -- -- -- 0.11(3)
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets(3) % 9.14 10.20 9.72(3) 9.19 9.18 9.14 10.18 9.46(3)
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate % 158 145 163 123 183 158 145 163
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
(1) Class A commenced operations on November 8,1993. Class B commenced
operations on February 9, 1994. Class C commenced operations on March 31,
1994.
(2) Assumes dividends have been reinvested and does not reflect the effect of
sales charges.
(3) Annualized.
54
<PAGE>
WHERE TO GO
FOR MORE
INFORMATION
- --------------------------------------------------------------------------------
You'll find more information about the Northstar family of funds in our:
ANNUAL/SEMIANNUAL REPORTS
Include a discussion of recent market conditions and investment strategies that
significantly affected performance, the financial statements and the auditor's
reports (in annual report only).
STATEMENT OF ADDITIONAL INFORMATION
The SAI contains more detailed information about the Northstar funds. The SAI is
legally part of this prospectus (it is incorporated by reference). A copy has
been filed with the Securities and Exchange Commission (SEC).
Please write or call for a free copy of the current Annual/semiannual reports,
the SAI or other fund information, or to make shareholder inquiries:
The Northstar Funds
300 First Stamford Place
Stamford, CT 06902
1-800-595-7827
This information may also be reviewed or obtained from the SEC. In order to
review the information in person, you will need to visit the SEC's Public
Reference Room in Washington, D.C. Otherwise, you may obtain the information for
a fee by contacting the SEC:
Securities and Exchange Commission
Public Reference Section
Washington, D.C. 20549-6009
1-800-SEC-0330
Or obtain the information at no cost by visiting the SEC's Internet website at
http://www.sec.gov.
When contacting the SEC, you will want to refer to the fund's SEC file number.
The file numbers are as follows:
Northstar Special Fund 811-4434
Northstar Mid-Cap Growth Fund 811-8817
Northstar Growth Fund 811-4431
Northstar Growth + Value Fund 811-7978
Northstar International Value Fund 811-7978
Northstar Emerging Markets Value Fund 811-7978
Northstar Research Enhanced Index Fund 811-7978
Northstar Income and Growth Fund 811-7978
Northstar Government Securities Fund 811-4423
Northstar High Yield Fund 811-5496
Northstar High Total Return Fund II 811-7978
Northstar High Total Return Fund 811-7978
[CLIPART] If you have any questions, please call 1-800-595-7827.
55
<PAGE>
NCUP 1099
