FINANCIAL INVESTORS TRUST, 485APOS, 1999-06-29

FINANCIAL INVESTORS TRUST
485APOS, 1999-06-29

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<PAGE>

As filed with the Securities and Exchange Commission on June 29, 1999
1933 Act Registration No. 33-72424
1940 Act Registration No. 811-8194

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 x
---
Pre-Effective Amendment No.
--- ---
Post-Effective Amendment No. 12 x
---- ---

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 x
---
Amendment No. 14 x
---- ---

(Check appropriate box or boxes.)

FINANCIAL INVESTORS TRUST
-------------------------
(Exact name of Registrant as Specified in Charter)

370 17th Street, Suite 3100
Denver, CO 80202
----------------
(Address of principal executive offices) (Zip Code)

Registrant's Telephone Number, including Area Code: (303) 623-2577
--------------

Russell C. Burk, Secretary
Financial Investors Trust
370 17th Street, Suite 3100
Denver, CO 80202
----------------
(Name and Address of Agent of Service)

Copy to:

Lester Woodward, Esq.
Davis, Graham & Stubbs LLP
370 17th Street, Suite 4700
Denver, CO 80202

Approximate Date of Proposed Public Offering: As soon as practicable after
the effective date of this
Amendment

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

immediately upon filing pursuant to paragraph (b)
- ---
on (date) pursuant to paragraph (b)
- ---
x 60 days after filing pursuant to paragraph (a) (1)
- ---
on ____________, pursuant to paragraph (a) (1)
- ---
75 days after filing pursuant to paragraph (a) (2)
- ---
on (date) pursuant to paragraph (a) (2)
- ---

If appropriate, check the following box:

This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

Title of Securities Being Registered: Shares of Beneficial Interest

Registrant registered an indefinite number of shares pursuant to regulation
24f-2 under the Investment Company Act of 1940 on July 30, 1998.

<PAGE>

F.I.T. LOGO

U.S. TREASURY MONEY MARKET FUND

Prospectus

, 1999
-----------------

The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the accuracy of this prospectus. Any representation
to the contrary is a criminal offense.

No person has been authorized to give any information or to make any
representation that is not contained in this Prospectus, or in the Statement of
Additional Information that is incorporated herein by reference, in connection
with the offering made by this Prospectus and, if given or made, such
information or representations must not be relied upon. Also, this Prospectus
does not constitute an offering by the Trust or its Distributor in any
jurisdiction where such an offering would not be lawful.

<PAGE>

U.S. TREASURY MONEY MARKET FUND

- --------------------------------------------------------------------------------
FUND FACTS

GOAL: To provide investors with a high level of current income while seeking to
preserve principal.

PRINCIPAL INVESTMENTS: INVESTMENT ADVISER (THE "ADVISER"):
- - U.S. Treasury Obligations - General Electric Investment
- - Repurchase Agreements Management, Inc. ("GEIM")

DISTRIBUTOR:
- ALPS Mutual Funds Services, Inc.
("ALPS")
- --------------------------------------------------------------------------------

INVESTMENT OBJECTIVE -- The investment objective of the U.S. Treasury Money
Market Fund (the "Fund") is to seek as high a level of current income as is
consistent with preservation of capital and liquidity.

PRINCIPAL INVESTMENT STRATEGIES -- In seeking to achieve its investment
objective, the Fund invests in direct obligations of the U.S. Treasury, such as
Treasury bills. The Fund may also invest in repurchase agreements with respect
to such obligations. In any event, however, the Fund only will invest in those
securities that the Adviser, under the direction of the Board of Trustees of
Financial Investors Trust (the "Board"), determine present minimal credit risk.

PRIMARY RISKS -- An investment in the Fund is subject to many risks, including:

- - Interest Rate Risk - Credit Risk

For more information about the risk factors identified above, please refer to
the section entitled "Principal Investments" later in this prospectus. The
Statement of Additional Information ("SAI") contains additional information
about the risks associated with investing in the Fund.

ALTHOUGH THE PORTFOLIO SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1 PER
SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE PORTFOLIO.

- --------------------------------------------------------------------------------
SHOULD I INVEST IN THE U.S. TREASURY MONEY MARKET FUND?

The Fund primarily is intended for municipal investors, including
municipalities, counties, and state agencies, as well as institutional investors
such as broker/dealers, corporations, investment advisers, credit unions, banks,
and other financial institutions. Investing in the Fund may be appropriate for
you if:

- - You are looking for an investment vehicle for daily cash sweep or liquidity
purposes.

- - You require stability of principal.

- - You are looking for an investment with a lower degree of risk during
uncertain economic times or periods of stock market volatility.

- - You are willing to accept lower returns than you might achieve by investing
in other types of mutual funds.

- - You are looking for an eligible investment under Section 107 of the Federal
Credit Union Act and Part 703 of the National Credit Union Administration
Rules and Regulations.

- - REMEMBER, NO SINGLE INVESTMENT CAN PROVIDE AN EFFECTIVE, BALANCED
INVESTMENT PLAN.
- --------------------------------------------------------------------------------

PLEASE REMEMBER THAT THERE IS NO GUARANTEE THAT THE FUND WILL ACHIEVE ITS
INVESTMENT OBJECTIVE, NOR IS AN INVESTMENT IN THE FUND INSURED, ENDORSED, OR
GUARANTEED BY THE FDIC, A BANK OR ANY AGENCY OF THE U.S. GOVERNMENT.

- 1 -
<PAGE>

PERFORMANCE

The following bar chart and table can help you evaluate the potential risks of
investing in the Fund. Both the bar chart and the table show the variability
the Fund has experienced in its performance in the past. THE PAST PERFORMANCE
OF THE FUND DOES NOT INDICATE HOW IT WILL PERFORM IN THE FUTURE AND IS INTENDED
TO BE USED FOR PURPOSES OF COMPARISON ONLY.

YEAR-BY-YEAR TOTAL RETURN

12/31/95 - 5.68%
12/31/96 - 5.17%
12/31/97 - 5.29%
12/31/98 - 5.15%

Best Quarter (quarter ended June 31, 1995) - 1.42%
Worst Quarter (quarter ended September 30, 1994) - 1.02%

The bar chart to the left illustrates the returns of the Fund since its
inception. The performance of the Fund as reflected in the bar chart reflects
the expenses associated with those shares.

<TABLE>
<CAPTION>
INCEPTION 1 YEAR SINCE DATE
DATE INCEPTION
- ---------------------------------------------------------------------
<S> <C> <C> <C>
U.S. TREASURY May 25, 1994 5.15% 5.20%
MONEY MARKET
FUND
</TABLE>

The table to the left lists the U.S. Treasury Money Market Fund's average
year-by-year return over the periods indicated. If you would like to know the
current 7 day yield of the U.S. Treasury Money Market Fund, please call ALPS at
1-800-298-3442.

ANNUAL FUND OPERATING EXPENSES
(For the year ended April 30, 1999.)

<TABLE>
<S> <C>
Management Fees 0.05%
-------------------------------------------------------
12b-1 Fees None
-------------------------------------------------------
Other Expenses 0.52%*
-------------------------------------------------------
Total Fund Operating Expenses 0.57%
-------------------------------------------------------
</TABLE>

* The amount for "Other Expenses" includes administration fees payable to ALPS.
ALPS has agreed to waive a portion of the administration fees that it is
entitled to receive, and/or assume a portion of Fund expenses, to the extent
necessary for the Fund to maintain an expense ratio of not more than 0.33% of
the average net assets of the Fund.

EXAMPLES -- The following examples are intended to help you compare the cost of
investing in the Fund to the cost of investing in other mutual funds with
similar investment objectives. The example shows the cumulative amount of Fund
expenses you would pay on a hypothetical investment of $10,000 in shares offered
by the Fund. The example assumes a 5% average annual return and that you
reinvest all of your dividends. Your actual costs may be higher or lower.

<TABLE>
<CAPTION>
ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS
- ------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. TREASURY MONEY
MARKET FUND $58 $183 $318 $713
</TABLE>

- 2 -
<PAGE>

HOW WE MANAGE THE U.S. TREASURY MONEY MARKET FUND

- --------------------------------------------------------------------------------
HOW DOES THE ADVISER TRY TO REDUCE RISK?

Consistent with the investment objective and policies of the Fund, the Adviser
uses a variety of tools to try to reduce risk and increase total return,
including:

- - Diversification of assets to reduce the impact of a single holding on the
net asset value of the Fund.

- - Thorough credit research by GEIM's analysts.

- - Adjusting the average portfolio maturity to reflect the Adviser's interest
rate outlook.
- --------------------------------------------------------------------------------

OUR INVESTMENT STRATEGY -- The Fund is managed to provide a stable share price
of $1.00. The Fund invests in high-quality, U.S. dollar-denominated money
market obligations issued by the U.S. Treasury. Consistent with the investment
objective and policies of the Fund, the Fund also may engage in repurchase
agreements.

The operations of the Fund largely are governed by Rule 2a-7 ("Rule 2a-7") under
the Investment Company Act of 1940, as amended. Rule 2a-7, among other things,
establishes standards for the credit quality and diversification of the Fund's
portfolio securities, and is intended to help minimize certain types of risks
faced by money market funds, such as the Fund, that use the amortized cost
method of valuing their portfolio securities.

PRINCIPAL INVESTMENTS -- The following table describes the securities in which
the Fund typically invests and the principal risks associated with those
securities.

- --------------------------------------------------------------------------------
SECURITIES PRINCIPAL RISKS ASSOCIATED
WITH THE SECURITY
- --------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS: U.S. INTEREST RATE RISK -- The risk of a
Treasury Obligations are debt decline in market value of an
obligations issued or guaranteed by interest bearing instrument due to
the U.S. Treasury. U.S. Treasury changes in interest rates. For
Obligations are backed by the full example, a rise in interest rates
faith and credit of the United States. typically will cause the value of a
fixed rate security to fall. On the
other hand, a decrease in interest
rates will cause the value of a fixed
rate Security to increase.
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS: An agreement CREDIT RISK -- The risk that the
between a buyer and seller of issuer of a security, or a party to a
securities in which the seller agrees contract, will default or otherwise
to buy the securities back within a not honor a financial obligation.
specified period of time at the same
price the buyer paid for them, plus an
amount equal to an agreed upon
interest rate. INTEREST RATE RISK
- --------------------------------------------------------------------------------

For more information about the securities in which the Fund invests, please
refer to the SAI.

PREPARING FOR THE YEAR 2000

The Fund, as with other financial and business organizations in the United
States and around the world, could be adversely affected if computer systems
used by the Fund's service providers, including its investment advisers, fail to
correctly interpret and process date information concerning dates occurring on
and after January 1, 2000. In addition, corporate and governmental data
processing errors may result in production problems for individual companies and
overall economic uncertainties. Earnings of individual issuers may be affected
by remediation costs. The Fund's service providers, including the Adviser, have
taken and continue to take steps to address this issue. If the Fund or the
Adviser or any of the Fund's service providers are unsuccessful in their
attempts, shareholders could experience certain disruptions in the services
provided to them by the Fund. For example, shareholders may be unable to redeem
shares or the Fund may be unable to compute its net asset value. The Fund and
the Adviser anticipate that testing of their computer systems will be completed
by the fall of 1999. However, there can be no assurance that the Fund will be
successful and shareholders will not experience any disruptions.

- 3 -
<PAGE>

WHO MANAGES THE U.S. TREASURY MONEY MARKET FUND?

The Adviser is a wholly-owned subsidiary of General Electric Company ("GE").
The principal address of the Adviser is 3003 Summer Street, Stamford, CT 06905.
Through GEIM and General Electric Investment Corporation ("GEIC"), an affiliated
company of GEIM, wholly owned by GE, and their predecessors, GE has more than 70
years of investment management experience. GEIM and GEIC collectively provide
investment management services to various institutional accounts with total
assets as of June 30, 1998 of approximately $69 billion, of which approximately
$1.7 billion was invested in money market funds.

Pursuant to the Investment Advisory Agreement, the Adviser has agreed to provide
a continuous investment program for the Fund, including investment research and
management with respect to the assets of the Fund. GEIM is entitled to receive
management fees of 0.05% on the first $500 million of average net assets of the
Fund, 0.075% on the next $500 million and 0.10% on average net assets in excess
of $1 billion but not exceeding $1.5 billion and 0.15% on average net assets in
excess of $1.5 billion. During the fiscal year ended April 30, 1999, the Fund
paid the Adviser 0.05% of average net assets of the Fund in advisory fees.

ADMINISTRATIVE SERVICES AGREEMENT

The Trustees have entered into an administrative services agreement with ALPS.
Under the administrative services agreement, ALPS provides the Fund with certain
administrative and clerical services, including, but not limited to: preparing
the Fund's semi-annual reports; coordinating the preparation of the Fund's
Federal and state tax returns; monitoring the Fund's compliance with its
investment restrictions and policies; and generally assisting in the operation
of the Fund. In addition, under the administrative services agreement ALPS
also, among other things, performs fund accounting and transfer agency services,
and pays the costs of the Fund's custodian and external auditors. Pursuant to
the administrative services agreement, ALPS receives a fee from the Fund that is
computed daily and paid monthly at the following annual rates: the greater of
$600,000 or 0.26% of average daily net assets of the Fund up to $500 million;
0.24% of average daily net assets of the Fund in excess of $500 million up to $1
billion; and 0.22% of the average daily net assets of the Fund that exceed $1
billion.

ALPS has agreed to voluntarily waive a portion of the administration fees that
it is entitled to receive from the Fund and to assume a portion of the expenses
of the Fund. More particularly, ALPS voluntarily has agreed to waive a portion
of the administration fees that it is entitled to receive under the
administrative services agreement with the Fund , and/or assume a portion of
Fund expenses, to the extent necessary for the Fund to maintain an expense ratio
that does not exceed 0.33% of the average net assets of the Fund. ALPS may
terminate this arrangement at any time.

During the fiscal year ended April 30, 1999, the Fund paid ALPS __% of average
net assets of the Fund in administration fees.]

- 4 -
<PAGE>

HOW DO I INVEST IN THE U.S. TREASURY MONEY MARKET FUND?

HOW ARE INVESTMENTS MADE?

As described below, shares of the Fund may be purchased through ALPS. Shares of
the Fund may be purchased using the Federal Reserve Wire System ("Federal
Funds") or by check or money order. Your check or money order must be payable
in U.S. dollars to the Fund and be drawn on a bank located within the U.S.

Federal Funds should be wired to:

State Street Bank & Trust Co.
ABA# 011000028
U.S. Treasury Money Market Fund
Credit DDA# 22404081
(Account Registration)
(Account Number)

Orders for the purchase of shares will be executed at the net asset value per
share next determined after an order has been received in good form. All funds
received are invested in full and fractional shares of the Fund. ALPS serves as
the Fund's Transfer Agent and ALPS maintains records of each shareholder's
holdings of Fund shares. Financial Investors Trust (the "Trust") reserves the
right to reject any purchase.

An initial investment in the Fund must be preceded or accompanied by a
completed, signed application. Your completed application should be forwarded
to:

Financial Investors Trust
370 17th Street, Suite 3100
Denver, CO 80202

Orders for the purchase of shares will be executed at the net asset value per
share (the "public offering price") next determined after an order has been
received by the Fund in the proper form. If your purchase order is received in
proper order by the Fund by 5:00 p.m. Eastern Time, your order will be executed
that day.

MINIMUM PURCHASE AND ACCOUNT BALANCE REQUIREMENTS

The minimum initial investment in the Fund is $100,000 and additional
investments may be made in any amount. The minimum purchase requirements do not
apply to reinvested dividends. If your account balance falls below $25,000 due
to redemptions or exchanges, your account may be closed. In the event that your
account is closed, the Fund will wire the proceeds to the bank account of
record, or issue a check to the shareholder of record. The Fund will notify you
when your account balance has fallen below $25,000 and you will be given 30 days
to increase your investment above that amount.

HOW TO REDEEM FUND SHARES

You may redeem all or any part of the value of your account(s) on any day the
assets of the Fund are valued (a "Business Day"). You may redeem by mail,
telephone or facsimile if you have established those options with the Fund.
Redemption orders are processed at the net asset value per share next determined
after the Fund receives your order. If the Fund receives your redemption order
before 1:00 p.m. Eastern Time on a Business Day, the Fund will generally pay for
your redeemed shares on that day. Otherwise, the Fund generally will pay for
your redeemed shares on the next Business Day. The Fund reserves the right to
pay for redeemed shares within seven days after receiving your redemption order
if, in the judgment of the Adviser, an earlier payment could adversely affect
the Fund.

REGULAR REDEMPTIONS: You may redeem shares by sending a written request to
Financial Investors Trust, 370 17th Street, Suite 3100, Denver, CO 80202. You
must sign a redemption request. Your written redemption request must:

(i) state the number of shares to be redeemed; and
(ii) identify your shareholder account number.

EACH SIGNATURE MUST BE GUARANTEED BY EITHER A BANK THAT IS A MEMBER OF THE FDIC,
A TRUST COMPANY OR A MEMBER FIRM OF A NATIONAL SECURITIES EXCHANGE OR OTHER
ELIGIBLE GUARANTOR INSTITUTION. THE FUND WILL NOT ACCEPT GUARANTEES FROM
NOTARIES PUBLIC. Guarantees must be signed by an authorized person at the
guarantor institution, and the words "Signature Guaranteed" must appear with the
signature. A redemption request will not be deemed to be properly received until
the Fund receives all required documents in proper form.

When the Fund wires your redemption proceeds, the wire must be paid to the same
bank and account as designated on the Fund's Account Application or in your
written instructions to the Fund. If your bank is not a member of the Federal
Reserve System, your redemption proceeds will be wired to a correspondent bank.
Immediate notification by the correspondent bank to your bank will be necessary
to avoid a delay in crediting the funds to your bank account.

- 5 -
<PAGE>

BY TELEPHONE AND FACSIMILE: You may redeem shares by telephone or facsimile.
Shareholders must check the appropriate box on the Account Application to
activate facsimile and/or telephone redemption privileges. Shares may be
redeemed by telephoning the Fund at (800) 298-3442 (or sending a facsimile
transmission to the Fund at (303) 825-2575 and giving the account name, account
number, Personal Identification Number (PIN#), name of Fund and amount of
redemption). Proceeds from redemptions will be wired directly to your account
at a commercial bank within the United States.

In order to arrange for facsimile and/or telephone redemptions after you have
opened your account, or to change the bank account or address designated to
receive redemption proceeds, send a written request to the Fund at the address
listed under "Regular Redemption". The request must be signed by you with the
signatures guaranteed as described above. The Trust may modify or terminate
procedures for redeeming shares by telephone but will not materially change or
terminate it without giving shareholders 60 days' written notice.

During periods of substantial economic or market change, telephone or facsimile
redemptions may be difficult to complete. If you are unable to contact the Fund
by telephone or facsimile, you may redeem your shares by mail as described above
under "REGULAR REDEMPTION".

By electing the facsimile and/or telephone redemption option, you may be giving
up a measure of security which you might have had if you were to redeem in
writing. The Trust will employ reasonable procedures to confirm that
instructions communicated by telephone or facsimile are genuine, such as
recording telephone calls, providing written confirmation of transactions, or
requiring a form of personal identification prior to acting on instructions
received by telephone or facsimile. To the extent the Trust does not employ
reasonable procedures, it and/or its service contractors may be liable for any
losses due to unauthorized or fraudulent instructions. Neither the Trust nor
ALPS will be liable for following instructions communicated by telephone or
facsimile that are reasonably believed to be genuine. Accordingly, you, as a
result of this policy, may bear the risk of fraudulent telephone or facsimile
redemption transactions.

CHECK REDEMPTION: You may write an unlimited number of checks drawn on your
account by either requesting the privilege on your account application or by
sending a written request to the Fund. In order to establish the checkwriting
option, you must manually sign a signature card that includes all authorized
individuals. Checks will be sent only to the registered owner(s) of the account
and only to the address of record. Checks may be made payable to the order of
any person. When a check is presented to the Transfer Agent for payment, the
Transfer Agent, as your agent, will cause the Fund to redeem a sufficient number
of your Fund shares to cover the amount of the check. Shares earn dividends
through the day the redemption is processed. There is no charge to you for the
use of the checks; however, the Transfer Agent will impose a charge for stopping
payment of a check upon your request, or if the Transfer Agent cannot honor a
check due to insufficient funds or other valid reasons. A request to reverse a
stop payment order must be received in writing.

Checks may not be written to redeem shares purchased by check until the date
that good funds are credited to the Fund's custodian by its correspondent bank.
If the amount of the check is greater than the value of the shares in your
account, the check will be returned marked "Insufficient Funds." Checks written
on amounts subject to the hold described above will be returned marked
"Uncollected." If your check does not clear, you will be responsible for any
loss the Fund, Custodian, or Transfer Agent may incur.

A check may not be used to close an account. Checkwriting is not available to
holders of shares in certificate form or if you are subject to Internal Revenue
Service backup withholding. It is also inadvisable for you to write a check for
an amount close to the total value of your account. The Trust reserves the
right to terminate or alter the checkwriting service at any time.

EXCHANGE OF FUND SHARES

You may sell your Fund shares and buy shares of the U.S. Government Money Market
Fund or the Prime Money Market Fund, other investment portfolios of the Trust,
in exchange by written request. There are no fees or commissions for exchanging
Fund shares. However, you must satisfy the minimum balance requirements of each
Fund that you are considering investing in. If you have established the
privilege on your Account Application, you may also initiate exchanges by
telephone or facsimile. Exchange requests should be directed to the Fund at
(800) 298-3442.

Exchange transactions must be for amounts of $1,000 or more. Exchanges may have
tax consequences, so you should consult your tax adviser for further

- 6 -
<PAGE>

information. The Fund into which you want to exchange must be registered for
sale in your state. Prior to requesting an exchange of Fund shares you should
call the Fund at (800) 298-3442 to request a current prospectus for the Fund
which you want to exchange and you should read the prospectus carefully before
investing.

During periods of significant economic or market change, telephone or facsimile
exchanges may be difficult to complete. If you are unable to contact the Fund
by telephone or facsimile, you may also mail the exchange request to the Fund at
the address listed under "Regular Redemption." Neither the Trust nor ALPS will
be responsible for the authenticity of exchange instructions received by
telephone or facsimile except as set forth under "HOW TO REDEEM SHARES -
TELEPHONE AND FACSIMILE REDEMPTION."

The Trust can provide you with information concerning certain limitations on the
exchange privilege, including those related to frequency. The Trust may modify
or terminate the exchange privilege but will not materially change or terminate
it without giving shareholders 60 days' written notice.

HOW ARE FUND SHARES VALUED?

The term "net asset value per share," or NAV, means the worth of one share. The
NAV is calculated by adding pro rata share of the value of all securities and
other assets attributable to the Fund, deducting the pro rata share of Fund
liabilities, and dividing the result by the number of shares outstanding.

The Trustees have established procedures designed to maintain a stable net asset
value of $1.00 per share, to the extent reasonably possible. More particularly,
the Trustees have approved and adopted procedures under Rule 2a-7. Under
guidelines of Rule 2a-7, the Fund uses the amortized cost method to value its
portfolio securities. The amortized cost method involves valuing a security at
its cost and amortizing any discount or premium over the period of maturity,
regardless of the impact of fluctuating interest rates on the market value of
the security.

WHAT IS THE EFFECT OF FEDERAL INCOME TAX ON THIS INVESTMENT?

While municipal investors are generally exempt from Federal income taxes, each
investor should independently ascertain its tax status. With respect to
investors who are not exempt from Federal income taxes, dividends derived from
net investment income and short term capital gains are taxable as ordinary
income distributions and are taxable when paid, whether investors receive
distributions in cash or reinvest them in additional shares, except that
distributions declared in December and paid in January are taxable as if paid on
December 31. The Fund will send to non-exempt investors an IRS Form 1099-DIV
showing their taxable distributions for the past calendar year.

The Fund has qualified and intends to continue to qualify as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended (the
"Code"). This qualification will relieve the Fund of liability for Federal
income taxes to the extent its earnings are distributed in accordance with the
Code and it meets other requirements for qualification as set forth in the Code.

The information above is only a summary of some of the federal tax consequences
generally affecting the Fund and its shareholders, and no attempt has been made
to discuss individual tax consequences. In addition to Federal taxes, investors
may be subject to state or local taxes on their investment. Investors should
consult their tax advisor to determine whether the Fund is suitable to their
particular tax situation.

When investors sign their account application, they will be asked to certify
that their social security or taxpayer identification number is correct and that
they are not subject to 31% backup withholding for failing to report income to
the IRS. If investors violate IRS regulations, the IRS can require the Fund to
withhold 31% of taxable distributions and redemptions.

The Fund declares dividends from net investment income daily and pays such
dividends monthly. The Fund intends to distribute substantially all of its net
investment income and capital gains, if any, to shareholders each calendar year
as well as on a fiscal year basis.

Since all of the Fund's net investment income is expected to be derived from
earned interest, it is anticipated that all dividends paid by the Fund will be
taxable as ordinary income to those shareholders who are not exempt from Federal
income taxes, and that no part of any distribution will be eligible for the
dividends received deduction for corporations.

- 7 -
<PAGE>

FINANCIAL HIGHLIGHTS

The Financial Highlights Table is presented to help you understand the Fund's
financial performance since its inception. All "per share" information reflects
financial results for a single Fund share. This information has been audited by
Deloitte & Touche LLP, whose report, along with the Fund's financial statements,
is included in the Fund's annual report, which is available upon request by
calling ALPS at 1-800-298-3442.

FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial
interest outstanding throughout the period indicated(1):

<TABLE>
<CAPTION>
For the Period Ended April 30,
1999 1998 1997 1996 1995(2)
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value - beginning of period $1.00 $1.00 $1.00 $1.00 $1.00
-------------------------------------------------------------------------

Income from investment operations
Net investment income 0.05 0.05 0.05 0.05 0.04
-------------------------------------------------------------------------

Dividends and distributions to shareholders
Dividends from net investment income (0.05) (0.05) (0.05) (0.05) (0.04)
-------------------------------------------------------------------------

Net asset value - end of period $1.00 $1.00 $1.00 $1.00 $1.00
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Total return 4.90% 5.30% 5.15% 5.44% 4.71%(3)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Ratios/Supplemental Data:

Net assets, end of period (000) $90,862 $138,169 $167,692 $316,364 $109,055
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Ratio of expenses to average net assets 0.33% 0.33% 0.30% 0.30% 0.50%(3)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Ratio of net investment income to
average net assets 4.83% 5.18% 5.02% 5.36% 4.87%(3)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Ratio of expenses to average net assets
without fee waivers 0.57% 0.55% 0.67% 0.71% 1.32%(3)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Ratio of net investment income to
average net assets without fee waivers 4.59% 4.96% 4.65% 4.95% 4.05%(3)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
</TABLE>

(1) The financial highlights prior to March 24, 1997 reflect the operations of
the Fund while the Fund's investment adviser was FGIC Advisors, Inc. GEIM
was approved as the Fund's investment adviser at a special meeting of
the shareholders of the Fund on March 21, 1997.
(2) Operations commenced on May 25, 1994.
(3) Annualized

<PAGE>

ADDITIONAL INFORMATION ABOUT THE FUND
- --------------------------------------------------------------------------------

If you would like more information about the Fund, the following documents are
available free upon request.

STATEMENT OF ADDITIONAL INFORMATION (SAI)

The SAI contains additional information about all aspects of the Fund. A
current SAI has been filed with the Securities and Exchange Commission and is
incorporated herein by reference. For a copy of the SAI, write or call the Fund
at the address or phone number listed below. The SEC also maintains a Web site
located at http://www.sec.gov that contains the SAI, material incorporated
herein by reference, and other information regarding the Fund.

ANNUAL AND SEMI-ANNUAL REPORTS

The Fund's annual and semi-annual reports provide additional information about
the Fund's investments.

-------------------------------------------------
-------------------------------------------------
TO OBTAIN THE SAI OR THE MOST RECENT ANNUAL OR
SEMI-ANNUAL REPORT FOR THE FUND YOU MAY WRITE
TO ALPS MUTUAL FUNDS SERVICES, INC. AT 370
17TH STREET, SUITE 3100, DENVER, COLORADO 80202
OR CALL ALPS AT 1-800-298-3442.
-------------------------------------------------
-------------------------------------------------

Investment Company Act File No. 811-

<PAGE>

F.I.T. LOGO

U.S. GOVERNMENT MONEY MARKET FUND

PROSPECTUS

, 1999
----------

The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the accuracy of this prospectus. Any representation to
the contrary is a criminal offense.

- 1 -
<PAGE>

U.S. GOVERNMENT MONEY MARKET FUND

- --------------------------------------------------------------------------------
FUND FACTS
GOAL: To provide investors with a high level of current income while
seeking to preserve principal.

PRINCIPAL INVESTMENTS: INVESTMENT ADVISER (THE "ADVISER"):
- - U.S. Government Obligations - General Electric Investment Management,
- - Mortgage Related Securities ("GEIM")
- - Repurchase Agreements DISTRIBUTOR:
- ALPS Mutual Funds Services, Inc.
- --------------------------------------------------------------------------------

INVESTMENT OBJECTIVE -- The investment objective of the U.S. Government Money
Market Fund (the "Find") is to seek as high a level of current income as is
consistent with preservation of capital and liquidity.

PRINCIPAL INVESTMENT STRATEGIES -- In seeking to achieve its investment
objective, the Fund will invest in obligations issued or guaranteed by the U.S.
Treasury or by an agency or instrumentality of the U.S. Government. The Fund may
also invest in mortgage related securities issued by various government
agencies, such as the Government National Mortgage Association, and government
related organizations, such as the Federal National Mortgage Association. While
the Fund may purchase a variety of securities, the Fund only will invest in
those securities that the Adviser, under the direction of the Board of Trustees
of Financial Investors Trust (the "Board"), determine present minimal credit
risk.

PRIMARY RISKS -- An investment in the Fund is subject to many risks, including:

- - Interest Rate Risk - Credit Risk

ALTHOUGH THE PORTFOLIO SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1 PER
SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE PORTFOLIO.
- --------------------------------------------------------------------------------
SHOULD I INVEST IN THE U.S. GOVERNMENT MONEY MARKET FUND?

- - You are looking for an investment vehicle for daily cash sweep or liquidity
purposes.
- - You require stability of principal.
- - You are looking for an investment with a lower degree of risk during
uncertain economic times or periods of stock market volatility.
- - You are willing to accept lower returns than you might achieve by investing
in other types of mutual funds.
- - You are looking for an eligible investment under Section 107 of the Federal
Credit Union Act and Part 703 of the National Credit Union Administration
Rules and Regulations.
- - REMEMBER, NO SINGLE INVESTMENT CAN PROVIDE AN EFFECTIVE, BALANCED INVESTMENT
PLAN.
- --------------------------------------------------------------------------------
PLEASE REMEMBER THAT THERE IS NO GUARANTEE THAT THE FUND WILL ACHIEVE ITS
INVESTMENT OBJECTIVE, NOR IS AN INVESTMENT IN THE FUND INSURED, ENDORSED, OR
GUARANTEED BY THE FDIC, A BANK OR ANY AGENCY OF THE U.S. GOVERNMENT.

- 1 -
<PAGE>

PERFORMANCE

The following bar chart and table can help you evaluate the potential risks of
investing in the Fund. Both the bar chart and the table show the variability the
Fund has experienced in its performance in the past. THE PAST PERFORMANCE OF THE
FUND DOES NOT INDICATE HOW IT WILL PERFORM IN THE FUTURE AND IS INTENDED TO BE
USED FOR PURPOSES OF COMPARISON ONLY.

YEAR-BY-YEAR TOTAL RETURN
<TABLE>

Best Quarter (quarter ended June 31, 1995) - 1.62%
Worst Quarter (quarter ended September 30, 1994) - 0.97%

The bar chart to the left illustrates the returns of the Fund since its
inception. The performance of the Fund as reflected in the bar chart reflects
the expenses associated with those shares.

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
INCEPTION 1 YEAR SINCE
DATE INCEPTION
- ----------------------- ---------------- ---------- ---------------
<S> <C> <C> <C>
U.S. GOVERNMENT June 7, 1994 5.39% 5.26%
MONEY MARKET
FUND
- --------------------------------------------------------------------------------
</TABLE>

The table to the left lists the U.S. Government Money Market Fund's average
year-by-year return over the periods indicated. If you would like to know the
current 7 day yield of the U.S. Government Money Market Fund, please call ALPS
at 1-800-298-3442.

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
(For the year ended April 30, 1999.)
- --------------------------------------------------------------------------------
<S> <C>
Management Fees 0.04%
- --------------------------------------------------------------------------------
12b-1 Fees None
- --------------------------------------------------------------------------------
Other Expenses 0.20%*
- --------------------------------------------------------------------------------
Total Fund Operating Expenses 0.24%
- --------------------------------------------------------------------------------
</TABLE>

<TABLE>
ONE YEAR THREE FIVE TEN
YEARS YEARS YEARS
- --------------------- -------------- ------------- -------------- --------------
<S> <C> <C> <C> <C>
U.S. GOVERNMENT $25 $77 $135 $306
MONEY MARKET FUND
</TABLE>

- 2 -
<PAGE>

HOW WE MANAGE THE U.S. GOVERNMENT MONEY MARKET FUND

OUR INVESTMENT STRATEGY -- The Fund is managed to provide a stable share price
of $1.00. The Fund invests in high-quality, U.S. dollar-denominated money market
obligations issued or guaranteed by the U.S. Treasury or by an agency or
instrumentality of the U.S. Government ("U.S. Government Securities").
Consistent with the investment objective and policies of the Fund, the Fund also
may invest in mortgage related securities and engage in repurchase agreements.

The Fund's average weighted maturity will not exceed 90 days, and its yield will
fluctuate with changes in short-term interest rates. Also, the securities held
by the Fund will, at the time of purchase, have remaining maturities of 13
months or less. In selecting securities, the Adviser examines the relationships
among yields on various types and maturities of money market securities in the
context of their outlook for interest rates. For example, mortgage related
securities often offer a yield advantage over Treasury bills. And if rates are
expected to fall, longer- maturities may be purchased, which typically have
higher yields than shorter maturities, to try to preserve the fund's income
level. Conversely, shorter maturities may be favored if rates are expected to
rise.

- --------------------------------------------------------------------------------
HOW DOES THE ADVISER TRY TO REDUCE RISK?

Consistent with the investment objective and policies of the Fund, the Adviser
uses a variety of tools to try to reduce risk and increase total return,
including:

- - Diversification of assets to reduce the impact of a single holding on the net
asset value of the Fund.
- - Thorough credit research by GEIM's analysts.
- - Adjusting the average portfolio maturity to reflect the Adviser's interest
rate outlook.
- --------------------------------------------------------------------------------

PRINCIPAL INVESTMENTS -- The following table describes the securities in which
the Fund typically invests and the principal risks associated with those
securities.

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Securities Principal Risks Associated
With the Security
- -------------------------------------------------------------------------------------------------------------------
<S> <C>
U.S. GOVERNMENT SECURITIES: U.S. government INTEREST RATE RISK -- The risk of a decline in market
securities are debt obligations issued or guaranteed by value of an interest bearing instrument due to
the U.S. Treasury or by an agency or instrumentality of changes in interest rates. For example, a rise in
the U.S. government. Not all U.S. government interest rates typically will cause the value of a fixed
securities are backed by the full faith and credit of the rate security to fall. On the other hand, a decrease in
United States. For example, obligations issued by the interest rates will cause the value of a fixed rate
Federal Farm Credit Bank or by the Federal National Security to increase. In general, shorter term
Mortgage Association are supported by the agency's securities offer greater stability and are less sensitive
right to borrow money from the U.S. Treasury under to changes in interest rates.
certain circumstances. There is no guarantee that the
government will support these types of obligations,
and, therefore, they involve more risk than other
government obligations.
- -------------------------------------------------------------------------------------------------------------------
</TABLE>

- 3 -
<PAGE>

- ----------------------------------------------------------------------------------------------------------------------------
Securities Principal Risks Associated
With the Security
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C>
MORTGAGE-RELATED SECURITIES: Mortgage related CALL RISK -- The risk that an issuer will exercise its
securities or mortgage-backed securities represent right to pay principal on an obligation held by the
direct or indirect participations in, or are collateralized by and Fund earlier than expected. This may happen when
payable from, mortgage loans secured by real property. there is a decline in interest rates. Under these
Mortgage-backed securities can be backed by either circumstances, the Fund may be unable to recoup all
fixed rate mortgage loans or adjustable rate mortgage of its initial investment and will also suffer from
loans, and may be issued by either a governmental or having to reinvest in lower yielding securities
non-governmental entity.

CREDIT RISK -- The risk that the issuer of a security,
or a party to a contract, will default or otherwise not
honor a financial obligation.

EXTENSION RISK -- The risk that an issuer will
exercise its right to pay principal on an obligation
held by the Fund later than expected. This may
happen when there is a rise in interest rates. Under
these circumstances, the value of the obligation will
decrease and the Fund will also suffer from the
inability to invest in higher yielding securities.

INTEREST RATE RISK

PREPAYMENT RISK -- The risk that a borrower will
repay the amount borrowed prior to the date the
amount is due. If a borrower chooses to prepay its
debt, the Fund may not be able to find an alternative
investment that provides for as favorable of a return
as the debt that was retired.
- ----------------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS: An agreement between a CREDIT RISK
buyer and seller of securities in which the seller agrees
to buy the securities back within a specified period of INTEREST RATE RISK
time at the same price the buyer paid for them, plus an
amount equal to an agreed upon interest rate.
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>

For more information about the securities in which the Fund invests, please
refer to the SAI.

PREPARING FOR THE YEAR 2000

The Fund, as with other financial and business organizations in the United
States and around the world, could be adversely affected if computer systems
used by the Fund's service providers, including its investment advisers, fail to
correctly interpret and process date information concerning dates occurring on
and after January 1, 2000. In addition, corporate and governmental data
processing errors may result in production problems for individual companies and
overall economic uncertainties. Earnings of individual issuers may be affected
by remediation costs. Also, it has been reported that foreign institutions have
made less progress in addressing the Year 2000 problem than major U.S. entities,
which could make certain investments of the Fund more sensitive to these risks.
The Fund's service providers, including the Adviser, have taken and continue to
take steps to address this issue. If the Fund or the Adviser or any of the
Fund's service providers are unsuccessful in their attempts, shareholders could
experience certain disruptions in the services provided to them by the Fund. For
example, shareholders may be

- 4 -
<PAGE>

unable to redeem shares or the Fund may be unable to compute its net asset
value. The Fund and the Adviser anticipate that testing of their computer
systems will be completed by the fall of 1999. However, there can be no
assurance that the Fund will be successful and shareholders will not experience
any disruptions.

WHO MANAGES THE U.S. GOVERNMENT MONEY MARKET FUND?

The Adviser is a wholly-owned subsidiary of General Electric Company ("GE"). The
principal address of the Adviser is 3003 Summer Street, Stamford, CT 06905.
Through GEIM and General Electric Investment Corporation ("GEIC"), an affiliated
company of GEIM, wholly owned by GE, and their predecessors, GE has more than 70
years of investment management experience. GEIM and GEIC collectively provide
investment management services to various institutional accounts with total
assets as of June 30, 1998 of approximately $69 billion, of which approximately
$1.7 billion was invested in money market funds.

Pursuant to the Investment Advisory Agreement, the Adviser has agreed to provide
a continuous investment program for the Fund, including investment research and
management with respect to the assets of the Fund. GEIM is entitled to receive
management fees of 0.04% on the first $500 million of average net assets of the
Fund, 0.06% on the next $500 million and 0.08% on average net assets in excess
of $1 billion. During the fiscal year ended April 30, 1999, the Fund paid the
Adviser 0.04% of average net assets of the Fund in advisory fees.

ADMINISTRATIVE SERVICES AGREEMENT

The Trustees have entered into an administrative services agreement with ALPS.
Under the administrative services agreement, ALPS provides the Fund with certain
administrative and clerical services, including, but not limited to: preparing
the Fund's semi-annual reports; coordinating the preparation of the Fund's
Federal and state tax returns; monitoring the Fund's compliance with its
investment restrictions and policies; and generally assisting in the operation
of the Fund. In addition, under the administrative services agreement ALPS also,
among other things, performs fund accounting and transfer agency services, and
pays the costs of the Fund's custodian and external auditors. Pursuant to the
administrative services agreement, ALPS receives a fee from the Fund that is
computed daily and paid monthly at the following annual rates: the greater of
$360,000 or 0.16% of average daily net assets of the Fund up to $500 million;
0.14% of average daily net assets of the Fund in excess of $500 million up to $1
billion; and 0.12% of the average daily net assets of the Fund that exceed $1
billion.

ALPS has agreed to voluntarily waive a portion of the administration fees that
it is entitled to receive from the Fund and to assume a portion of the expenses
of the Fund. More particularly, ALPS voluntarily has agreed to waive a portion
of the administration fees that it is entitled to receive under the
administrative services agreement with the Fund , and/or assume a portion of
Fund expenses, to the extent necessary for the Fund to maintain an expense ratio
that does not exceed 0.20% of the average net assets of the Fund. ALPS may
terminate this arrangement at any time.

During the fiscal year ended April 30, 1999, the Fund paid ALPS __% of the
average net assets of the Fund in administration fees.

- 5 -
<PAGE>

HOW DO I INVEST IN THE U.S. GOVERNMENT MONEY MARKET FUND?

HOW ARE INVESTMENTS MADE?

As described below, shares of the Fund may be purchased through ALPS. Shares of
the Fund may only be purchased using the Federal Reserve Wire System ("Federal
Funds"). Federal Funds should be wired to:

State Street Bank & Trust Co.
ABA# 011000028
U.S. Government Money Market Fund
Credit DDA# 22404081
(Account Registration)
(Account Number)

Orders for the purchase of shares will be executed at the net asset value per
share next determined after an order has been received in good form. All funds
received are invested in full and fractional shares of the Fund. Certificates
for shares are not issued. ALPS serves as the Fund's Transfer Agent and ALPS
maintains records of each shareholder's holdings of Fund shares. Financial
Investors Trust (the "Trust") reserves the right to reject any purchase.

An initial investment in the Fund must be preceded or accompanied by a
completed, signed application. Your completed application should be forwarded
to:

Financial Investors Trust
370 17th Street, Suite 3100
Denver, CO 80202

Orders for the purchase of shares will be executed at the net asset value per
share (the "public offering price") next determined after an order has been
received by the Fund in the proper form. If your order is accompanied by Federal
Funds or converted into Federal Funds by 5:00 p.m. Eastern Time, your order will
be executed that day.

MINIMUM PURCHASE AND ACCOUNT BALANCE REQUIREMENTS

The minimum initial investment in the Fund is $1,000,000 and additional
investments may be made in any amount. The minimum purchase requirements do not
apply to reinvested dividends. If your account balance falls below $200,000 due
to redemptions or exchanges, your account may be closed. In the event that your
account is closed, the Fund will wire the proceeds to the bank account of
record, or issue a check to the shareholder of record. The Fund will notify you
when your account balance has fallen below $200,000 and you will be given 30
days to increase your investment above that amount.

HOW TO REDEEM FUND SHARES

(i) state the number of shares to be redeemed; and
(ii) identify your shareholder account number.

BY TELEPHONE AND FACSIMILE: You may redeem shares by telephone or facsimile.
Shareholders must check the appropriate box on the Account Application to
activate facsimile and/or telephone redemption

- 6 -
<PAGE>

privileges. Shares may be redeemed by telephoning the Fund at (800) 298-3442 (or
sending a facsimile transmission to the Fund at (303) 825-2575 and giving the
account name, account number, Personal Identification Number (PIN#), name of
Fund and amount of redemption). Proceeds from redemptions will be wired directly
to your account at a commercial bank within the United States.

EXCHANGE OF FUND SHARES

You may sell your Fund shares and buy shares of the U.S. Treasury Money Market
Fund, another investment portfolio of the Trust, in exchange by written request.
There are no fees or commissions for exchanging Fund shares. However, you must
satisfy the minimum balance requirements of each Fund that you are considering
investing in. If you have established the privilege on your Account Application,
you may also initiate exchanges by telephone or facsimile. Exchange requests
should be directed to the Fund at (800) 298-3442.

Exchange transactions must be for amounts of $1,000 or more. Exchanges may have
tax consequences, so you should consult your tax adviser for further
information. The U.S. Treasury Money Market Fund or other investment portfolio
must be registered for sale in your state. Prior to requesting an exchange of
Fund shares you should call the Fund at (800) 298-3442 to request a current
prospectus for the U.S. Treasury Money Market Fund and you should read the
prospectus carefully before investing.

During periods of significant economic or market change, telephone or facsimile
exchanges may be difficult to complete. If you are unable to contact the Fund by
telephone or facsimile, you may also mail the exchange request to the Fund at
the address listed under "Regular Redemption." Neither the Trust nor ALPS will
be responsible for the authenticity of exchange instructions received by
telephone or facsimile except as set forth under "HOW TO REDEEM SHARES -
TELEPHONE AND FACSIMILE REDEMPTION."

HOW ARE FUND SHARES VALUED?

- 7 -
<PAGE>

WHAT IS THE EFFECT OF FEDERAL INCOME TAX ON THIS INVESTMENT?

- 8 -
<PAGE>

FINANCIAL HIGHLIGHTS

Selected data for a share of beneficial interest
outstanding throughout the period indicated(1):
<TABLE>
<CAPTION>
For the Period Ended April 30,
1999 1998 1997 1996 1995 (2)
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value - beginning of period $1.00 $1.00 $9.97 $9.97 $10.00
--------------------------------------------------------------

Income from investment operations
Net investment income 0.05 0.05 0.14 0.55 0.44
Net realized and unrealized gain (loss)
on investments 0.00 0.00 0.00 0.00 (0.03)
--------------------------------------------------------------
Total income from investment operations 0.05 0.05 0.14 0.55 0.41
--------------------------------------------------------------

Dividends and distributions to shareholders
Dividends from net investment income (0.05) (0.05) (0.14) (0.55) (0.44)
Stock Split (Note 3) 0.00 0.00 (8.97) 0.00 0.00
--------------------------------------------------------------
Total dividends and distributions to
shareholders (0.05) (0.05) (9.11) (0.55) (0.44)
--------------------------------------------------------------
Net asset value - end of period $1.00 $1.00 $1.00 $9.97 $9.97
--------------------------------------------------------------
--------------------------------------------------------------
Total return 5.16% 5.48% 5.23% 5.65% 4.73%(3)
--------------------------------------------------------------
--------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period (000) $352,333 $150,222 $87,416 $31,082 $41,893
--------------------------------------------------------------
--------------------------------------------------------------

Ratio of expenses to average net assets 0.20% 0.20% 0.23 0.60% 0.45%(3)
--------------------------------------------------------------
--------------------------------------------------------------

Ratio of net investment income to
average net assets 5.01% 5.35% 5.13% 5.38% 5.23%(3)
--------------------------------------------------------------
--------------------------------------------------------------

Ratio of expenses to average net assets
without fee waivers 0.24% 0.31% 0.39% 0.85% 0.65%(3)
--------------------------------------------------------------
--------------------------------------------------------------

Ratio of net investment income to
average net assets without fee waivers 4.96% 5.24% 4.97% 5.12% 5.03%(3)
--------------------------------------------------------------
--------------------------------------------------------------
</TABLE>

(1) The financial highlights prior to July 10, 1996 reflect the operations of
the Fund as the Short-Term U.S. Government Income Fund when it was not a
money market fund and had different investment policies and expenses, and a
fluctuating net asset value not maintained at $1.00 per share. The Fund
changed to a money market fund on July 10, 1996 following a Special Meeting
of the Fund's shareholders on June 27, 1996. The financial highlights prior
to March 24, 1997 also reflect the operations of the Fund while the Fund's
investment adviser was FGIC Advisors, Inc. GEIM was approved as the Fund's
investment adviser at a Special Meeting of the shareholders of the Fund on
March 21, 1997.
(2) Operations commenced on June 7, 1994.
(3) Annualized

<PAGE>

ADDITIONAL INFORMATION ABOUT THE FUND
- --------------------------------------------------------------------------------

If you would like more information about the Fund, the following documents are
available free upon request.

STATEMENT OF ADDITIONAL INFORMATION (SAI)

The SAI contains additional information about all aspects of the Fund. A current
SAI has been filed with the Securities and Exchange Commission and is
incorporated herein by reference. For a copy of the SAI, write or call the Fund
at the address or phone number listed below. The SEC also maintains a Web site
located at http://www.sec.gov that contains the SAI, material incorporated
herein by reference, and other information regarding the Fund.

ANNUAL AND SEMI-ANNUAL REPORTS

The Fund's annual and semi-annual reports provide additional information about
the Fund's investments.

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
TO OBTAIN THE SAI OR THE MOST RECENT ANNUAL OR SEMI-ANNUAL REPORT FOR THE FUND
YOU MAY WRITE TO ALPS MUTUAL FUNDS SERVICES, INC. AT 370 17TH STREET, SUITE
3100, DENVER, COLORADO 80202 OR CALL ALPS AT 1-800-298-3442.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

Investment Company Act File No. 811-

<PAGE>

F.I.T. LOGO

PRIME MONEY MARKET FUND
CLASS I

Prospectus

, 1999
--------

The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the accuracy of this prospectus. Any representation to
the contrary is a criminal offense.

- 1 -

<PAGE>

PRIME MONEY MARKET FUND

- --------------------------------------------------------------------------------
FUND FACTS

GOAL: To provide investors with a high level of current income while seeking to
preserve principal.
PRINCIPAL INVESTMENTS: INVESTMENT ADVISER (THE "ADVISER"):
- - U.S. Government Obligations - General Electric Investment Management,
- - Corporate Debt Obligations Inc. ("GEIM")
- - Commercial Paper DISTRIBUTOR:
- - Foreign Bank Obligations - ALPS Mutual Funds Services, Inc. ("ALPS")
- - Asset-Backed and Mortgage
Related Securities
- --------------------------------------------------------------------------------

INVESTMENT OBJECTIVE -- The investment objective of the Prime Money Market Fund
(the "Fund") is to seek as high a level of current income as is consistent with
preservation of capital and liquidity.

PRINCIPAL INVESTMENT STRATEGIES -- In seeking to achieve its investment
objective, the Fund's investments include, but are not limited to, the following
U.S. dollar denominated, short-term money market instruments: (1) U.S.
Government Obligations, including stripped U.S. Government Obligations; (2) debt
obligations of corporations, banks, savings and loan institutions, insurance
companies and mortgage bankers; (3) commercial paper, including those with
floating or variable rates of interest; (4) foreign bank obligations; (5)
repurchase agreements; and (6) asset-backed or mortgage-related securities. In
any event, however, the Fund only will invest in those securities that the
Adviser, under the direction of the Board of Trustees of Financial Investors
Trust (the "Board"), determine present minimal credit risk and that the Advisers
determines are "eligible securities." Eligible securities are those securities
that are rated in one of the two highest categories by a National Recognized
Statistical Rating Organization ("NRSRO") or, if the security is unrated, the
Adviser has determined that the security is comparable to similarly rated
securities.

PRIMARY RISKS -- An investment in the Fund is subject to many risks, including:

- - Interest Rate Risk - Credit Risk

ALTHOUGH THE PORTFOLIO SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1 PER
SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE PORTFOLIO.

- --------------------------------------------------------------------------------
SHOULD I INVEST IN THE PRIME MONEY MARKET FUND?

The Class I shares of the Fund primarily are intended for municipal investors,
including municipalities, counties, and state agencies, as well as institutional
investors such as broker/dealers, corporations, investment advisers, credit
unions, banks, and other financial institutions. Certain high net worth
individuals that can meet the $1,000,000 minimum investment threshold also may
invest in the Fund. Investing in the Fund may be appropriate for you if:

- - You are looking for an investment vehicle for daily cash sweep or liquidity
purposes.

- - You require stability of principal.

- - You are looking for an investment with a lower degree of risk during
uncertain economic times or periods of stock market volatility.

- - You are willing to accept lower returns than you might achieve by investing
in other types of mutual funds.

- - REMEMBER, NO SINGLE INVESTMENT CAN PROVIDE AN EFFECTIVE, BALANCED INVESTMENT
PLAN.
- --------------------------------------------------------------------------------

- 2 -

<PAGE>

PERFORMANCE

Because the Fund commenced operations in December of 1998, historical
performance is not yet presented for the Fund. Performance history will be
presented for the Fund after it has been in operation for one calendar year.

<TABLE>
<CAPTION>
-------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
(For the period ended April 30, 1999.)
-------------------------------------------------
<S> <C>
Management Fees 0.04%
-------------------------------------------------
12b-1 Fees None
-------------------------------------------------
Other Expenses 0.62%*
-------------------------------------------------
Total Fund Operating Expenses 0.66%
-------------------------------------------------
</TABLE>

ONE YEAR THREE
YEARS
- --------------------------------------------------------------------------------
<S> <C> <C>
PRIME MONEY MARKET $67 $211
FUND
</TABLE>

- 3 -

<PAGE>

HOW WE MANAGE THE PRIME MONEY MARKET FUND HOW DOES THE ADVISER TRY TO REDUCE
RISK?

OUR INVESTMENT STRATEGY -- The Fund invests in the high-quality, U.S. Dollar
denominated securities that are described below and is managed to provide a
stable share price of $1.00. In selecting securities for the Fund, the Adviser
examines the yields on various types and maturities of money market securities
against the Adviser's outlook for interest rates. For example, mortgage related
securities often offer a yield advantage over Treasury bills. And if rates are
expected to fall, longer-maturities may be purchased, which typically have
higher yields than shorter maturities, to try to preserve the Fund's income
level. Conversely, shorter maturities may be favored if rates are expected to
rise. The Fund's average weighted maturity will not exceed 90 days, and its
yield will fluctuate with changes in short-term interest rates. Also, the
securities held by the Fund will, at the time of purchase, have remaining
maturities of 13 months or less.

- --------------------------------------------------------------------------------
HOW DOES THE ADVISOR TRY TO REDUCE RISK?
Consistent with the investment objective and policies of the Fund, the Adviser
uses a variety of tools to try to reduce risk and increase total return,
including:

- - Diversification of assets to reduce the impact of a single holding on the net
asset value of the Fund.

- - Thorough credit research by GEIM's analysts.

- - Adjusting the average portfolio maturity to reflect the Adviser's interest
rate outlook.
- --------------------------------------------------------------------------------

PRINCIPAL INVESTMENTS -- The following table describes the securities in which
the Fund typically invests and the principal risks associated with those
securities.

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Securities Principal Risks Associated
With the Security
- -----------------------------------------------------------------------------------------------------------------------
<S> <C>
U.S. GOVERNMENT OBLIGATIONS: U.S. government INTEREST RATE RISK -- The risk of a decline in market
obligations are debt obligations issued or guaranteed value of an interest bearing instrument due to
by the U.S. Treasury or by an agency or changes in interest rates. For example, a rise in
instrumentality of the U.S. government. Not all U.S. interest rates typically will cause the value of a fixed
government obligations are backed by the full faith and rate security to fall. On the other hand, a decrease in
credit of the United States. For example, obligations interest rates will cause the value of a fixed rate
issued by the Federal Farm Credit Bank or by the Security to increase. In general, shorter term
Federal National Mortgage Association are supported securities offer greater stability and are less sensitive
by the agency's right to borrow money from the U.S. to changes in interest rates.
Treasury under certain circumstances. There is no
guarantee that the government will support these
obligations if it is not required to do so, and, therefore,
they involve more risk than other government
obligations.
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>

- 4 -

<PAGE>

CREDIT RISK-- The risk that the issuer of a security,
or a party to a contract, will default or otherwise not
honor a financial obligation.

LIQUIDITY RISK -- The risk that certain securities or
other investments may be difficult or impossible to
sell at the time a Portfolio would like to sell them or
it may be difficult for a Portfolio to sell the
investment for the value the Portfolio has placed on
it.
- -----------------------------------------------------------------------------------------------------------------------
CORPORATE DEBT OBLIGATIONS: Corporate debt CALL RISK
obligations include bonds, notes, debentures, and other
obligations of corporate entities to pay interest and CREDIT RISK
repay principal.
EXTENSION RISK RISK -- The risk that an issuer will
exercise its right to pay principal on an obligation
held by the Fund later than expected. This may
happen when there is a rise in interest rates. Under
these circumstances, the value of the obligation will
decrease and the Fund will also suffer from the
inability to invest in higher yielding securities.

INTEREST RATE RISK

LIQUIDITY RISK
- -----------------------------------------------------------------------------------------------------------------------
COMMERCIAL PAPER: Unsecured promissory notes that CREDIT RISK
corporations typically issue to finance current
operations and other expenditures. INTEREST RATE RISK

LIQUIDITY RISK
- -----------------------------------------------------------------------------------------------------------------------
ASSET-BACKED SECURITIES: Asset-backed securities are CREDIT RISK
securities whose principal and interest payments are
collateralized by pools of assets such as auto loans, EXTENSION RISK
credit card receivables, leases, installment contracts
and personal property. Such asset pools are securitized INTEREST RATE RISK
through the use of special purpose trusts or
corporations. Principal and interest payments may be LIQUIDITY RISK
credit enhanced by a letter of credit, a pool insurance
policy or a senior/subordinated structure. PREPAYMENT RISK -- The risk that a borrower will
repay the amount borrowed prior to the date the
amount is due. If a borrower chooses to prepay its
debt, the Fund may not be able to find an alternative
investment that provides for as favorable of a return
as the debt that was retired.
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>

- 5 -

<PAGE>

- -----------------------------------------------------------------------------------------------------------------------
Securities Principal Risks Associated
With the Security
- -----------------------------------------------------------------------------------------------------------------------
<S> <C>
MORTGAGE-RELATED SECURITIES: Mortgage related CALL RISK
securities or mortgage-backed securities represent direct
or indirect participations in, or are collateralized by and CREDIT RISK
payable from, mortgage loans secured by real property.
Mortgage-backed securities can be backed by either EXTENSION RISK
fixed rate mortgage loans or adjustable rate mortgage
loans, and may be issued by either a governmental or INTEREST RATE RISK
non-governmental entity. Typically, mortgage-backed
securities issued by private entities do not have the LIQUIDITY RISK
same credit standing as mortgage-backed securities
issued or guaranteed by the U.S. Government. PREPAYMENT RISK
- -----------------------------------------------------------------------------------------------------------------------
FOREIGN BANK OBLIGATIONS: U.S. Dollar CREDIT RISK
denominated obligations of United States branches of
foreign banks which at the time of investment (i) have
more than $10 billion, or the equivalent in other INTEREST RATE RISK
currencies, in total assets; and (ii) in the opinion of the
Adviser are of comparable quality to similar LIQUIDITY RISK
obligations of U.S. banks.
- -----------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS: An agreement between a CREDIT RISK
buyer and seller of securities in which the seller agrees
to buy the securities back within a specified period of INTEREST RATE RISK
time at the same price the buyer paid for them, plus an
amount equal to an agreed upon interest rate.
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>

For more information about the securities in which the Fund invests, please
refer to the Appendix to this Prospectus and the SAI.

LENDING SECURITIES. The Fund may temporarily lend up to 30% of its Fund
securities to broker-dealers and institutions, but only when the loans are
collateralized fully.

PREPARING FOR THE YEAR 2000

The Fund, as with other financial and business organizations in the United
States and around the world, could be adversely affected if computer systems
used by the Fund's service providers, including its investment advisers, fail to
correctly interpret and process date information concerning dates occurring on
and after January 1, 2000. In addition, corporate and governmental data
processing errors may result in production problems for individual companies and
overall economic uncertainties. Earnings of individual issuers may be affected
by remediation costs. Also, it has been reported that foreign institutions have
made less progress in addressing the Year 2000 problem than major U.S. entities,
which could make certain investments of the Fund more sensitive to these risks.
The Fund's service providers, including the Adviser, have taken and continue to
take steps to address this issue. If the Fund or the Adviser or any of the
Fund's service providers are unsuccessful in their attempts, shareholders could
experience certain disruptions in the services provided to them by the Fund. For
example, shareholders may be unable to redeem shares or the Fund may be unable
to compute its net asset value. The Fund and the Adviser anticipate that testing
of their computer systems will be completed by the fall of 1999. However, there
can be no assurance that the Fund will be successful and shareholders will not
experience any disruptions.

- 6 -

<PAGE>

WHO MANAGES THE PRIME MONEY MARKET FUND?

The Adviser is a wholly-owned subsidiary of General Electric Company ("GE"). The
principal address of the Adviser is 3003 Summer Street, Stamford, CT 06905.
Through GEIM and General Electric Investment Corporation ("GEIC"), an affiliated
company of GEIM, wholly owned by GE, and their predecessors, GE has more than 70
years of investment management experience. GEIM and GEIC collectively provide
investment management services to various institutional accounts with total
assets as of June 30, 1998 of approximately $69 billion, of which approximately
$1.7 billion was invested in money market funds.

Pursuant to the Investment Advisory Agreement, the Adviser has agreed to provide
a continuous investment program for the Fund, including investment research and
management with respect to the assets of the Fund. GEIM is entitled to receive
management fees of 0.04% on the first $500 million of average net assets of the
Fund, 0.06% on the next $500 million and 0.08% on average net assets in excess
of $1 billion. During the fiscal year ended April 30, 1999, the Fund paid the
Adviser 0.04% of the average net assets of the Fund in advisory fees.

ADMINISTRATIVE SERVICES AGREEMENT

The Trustees have entered into an administrative services agreement with ALPS.
Under the administrative services agreement, ALPS provides the Fund with certain
administrative and clerical services, including, but not limited to: preparing
the Fund's semi-annual reports; coordinating the preparation of the Fund's
Federal and state tax returns; monitoring the Fund's compliance with its
investment restrictions and policies; and generally assisting in the operation
of the Fund. In addition, under the administrative services agreement, ALPS
also, among other things, performs fund accounting and transfer agency services,
and pays the costs of the Fund's custodian and external auditors. Pursuant to
the administrative services agreement, ALPS receives a fee from the Fund that is
computed daily and paid monthly at the following annual rates: the greater of
$360,000 or 0.16% of average daily net assets of the Fund up to $500 million;
0.14% of average daily net assets of the Fund in excess of $500 million up to $1
billion; and 0.12% of the average daily net assets of the Fund that exceed $1
billion.

ALPS has agreed to voluntarily waive a portion of the administration fees that
it is entitled to receive from the Fund and to assume a portion of the expenses
of the Fund. More particularly, ALPS voluntarily has agreed to waive a portion
of the administration fees that it is entitled to receive under the
administrative services agreement with the Fund , and/or assume a portion of
Fund expenses, to the extent necessary for the Fund to maintain an expense ratio
that does not exceed 0.45% of the average net assets of the Fund. ALPS may
terminate this arrangement at any time. During the fiscal year ended April 30,
1999, the Fund paid ALPS __% of the average net assets of the Fund in
administration fees.

- 7 -

<PAGE>

HOW DO I INVEST IN THE PRIME MONEY MARKET FUND?

While the Fund offers two classes of it shares, only the Class I shares are
offered in the prospectus. For information about the Class II shares, call ALPS
at (800) 298-3442.

HOW ARE INVESTMENTS MADE?

As described below, shares of the Fund may be purchased through ALPS. Shares of
the Fund may be purchased using the Federal Reserve Wire System ("Federal
Funds"). Federal Funds should be wired to:

State Street Bank & Trust Co.
ABA# 011000028
Prime Money Market Fund
Credit DDA# 22404081
(Account Registration)
(Account Number)

An initial investment in the Fund must be preceded or accompanied by a
completed, signed application. Your completed application should be forwarded
to:

Financial Investors Trust
370 17th Street, Suite 3100
Denver, CO 80202

MINIMUM PURCHASE AND ACCOUNT BALANCE REQUIREMENTS

HOW TO REDEEM FUND SHARES

(i) state the number of shares to be redeemed; and
(ii) identify your shareholder account number.

- 8 -

<PAGE>

In order to arrange for facsimile and/or telephone redemptions after you have
opened your account, or to change the bank account or address designated to
receive redemption proceeds, send a written request to the Fund at the address
listed under "Regular Redemption". The request must be signed by you the
signatures guaranteed as described above. The Trust may modify or terminate
procedures for redeeming shares by telephone but will not materially change or
terminate it without giving shareholders 60 days' written notice.

EXCHANGE OF FUND SHARES

You may sell your Fund shares and buy shares of the U.S. Treasury Money Market
Fund or the U.S. Government Money Market Fund, another investment portfolio of
the Trust, in exchange by written request. There are no fees or commissions for
exchanging Fund shares. However, you must satisfy the minimum balance
requirements of each Fund that you are considering investing in. If you have
established the privilege on your Account Application, you may also initiate
exchanges by telephone or facsimile. Exchange requests should be directed to the
Fund at (800) 298-3442.

Exchange transactions must be for amounts of $1,000 or more. Exchanges may have
tax consequences, so you should consult your tax adviser for further
information. The U.S. Government Money Market Fund, the U.S. Treasury Fund, or
other investment portfolio must be registered for sale in your state. Prior to
requesting an exchange of Fund shares you should call the Fund at (800) 298-3442
to request a current prospectus for the Fund you are considering investing in
and you should read the prospectus carefully before investing.

During periods of significant economic or market change, telephone or facsimile
exchanges may be difficult to complete. If you are unable to contact the Fund by
telephone or facsimile, you may also mail the exchange request to the Fund at
the address listed under "Regular Redemption." Neither the Trust nor ALPS will
be responsible for the authenticity of exchange instructions received by
telephone or facsimile except as set forth under "HOW TO REDEEM SHARES -
TELEPHONE AND FACSIMILE REDEMPTION."

HOW ARE FUND SHARES VALUED?

- 9 -

<PAGE>

any discount or premium over the period of maturity, regardless of the impact of
fluctuating interest rates on the market value of the security.

WHAT IS THE EFFECT OF FEDERAL INCOME TAX ON THIS INVESTMENT?

- 10 -

<PAGE>

FINANCIAL HIGHLIGHTS

FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest
outstanding throughout the period indicated(1):

For the Period
December 10, 1998 to April 30, 1999
--------------------------------------------
Class I
--------------------------------------------
<S> <C>
Net asset value - beginning of period $1.00
--------------------------------------------
Income from investment operations
Net investment income 0.02
--------------------------------------------

Dividends and distributions to shareholders
Dividends from net investment income (0.02)
--------------------------------------------
Net asset value - end of period $1.00
--------------------------------------------
--------------------------------------------
Total return 4.82%(2)

Ratios/Supplemental Data:
Net assets, end of period (000) $167,257
--------------------------------------------
--------------------------------------------
Ratio of expenses to average net assets 0.20%(2)
--------------------------------------------
Ratio of net investment income to
average net assets 4.71%(2)
--------------------------------------------
--------------------------------------------
Ratio of expenses to average net assets
without fee waivers 0.66%(2)
--------------------------------------------
--------------------------------------------
Ratio of net investment income to
average net assets without fee waivers 4.25%(2)
--------------------------------------------
--------------------------------------------
</TABLE>

(1) Class I commenced operations on December 10, 1998.
(2) Annualized.

<PAGE>

APPENDIX

ADDITIONAL INFORMATION ABOUT THE FUND'S INVESTMENTS

The following information provides brief description of the securities in which
the Fund may invest and the transactions it may make. The Fund is not limited by
this discussion, however, and may purchase other types of securities and may
enter into other types of transactions if they are consistent with the Fund's
investment objective and policies.

DELAYED-DELIVERY AND WHEN-ISSUED TRANSACTIONS. The Fund may buy and sell
obligations on an when-issued or delayed delivery basis, with payment and
delivery taking place at a future date. The market value of obligations
purchased in this way may change before the delivery date, which could increase
fluctuations in the Fund's share price, yield, and return. Ordinarily, the Fund
will not earn interest on obligations until they are delivered.

DEMAND FEATURES AND STAND-BY COMMITMENTS. A demand features is a put that
entitles the security holder to repayment of the principal amount of the
underlying security at any time or at specified intervals. A standby commitment
is a put that entitles the security holder to same-day settlement at amortized
cost plus accrued interest.

ILLIQUID INVESTMENTS. Under guidelines established by the Trustees, The Adviser
determines the liquidity of the Fund's investments. The absence of a trading
market can make it difficult to ascertain a market value for illiquid
investments. Disposing of illiquid investments may involve time-consuming
negotiation and legal expense, and it may be difficult or impossible for the
Fund to sell them promptly at an acceptable price. The Fund may invest up to 10%
of its assets in illiquid investments and private placement.

REFUNDING CONTRACTS. The Fund may purchase securities on a when-issued basis in
connection with the refinancing of an issuer's outstanding indebtedness.
Refunding contracts require the issuer to sell and the Fund to buy refunded
municipal obligations at a stated price and yield on a settlement date that may
be several months or several years in the future. Although the Fund may sell its
rights under a refunding contract, these contracts are relatively new and the
secondary market for them may be less liquid than the secondary market for other
types of municipal securities.

STRIPPED U.S. GOVERNMENT OBLIGATIONS. Stripped securities are created by
separating the income and principal components of a debt instrument and selling
them separately. The Fund may purchase U.S. Treasury STRIPS (Separate Trading of
Registered Interest and Principal of Securities) that are created when the
coupon payments and the principal payment are stripped from an outstanding
Treasury bond by the Federal Reserve Bank. Bonds issued by the Resolution
Funding Corporation (REFCORP) can also be stripped in this fashion. REFCORP
STRIPS are eligible investments for the Fund.

The Fund also may purchase privately stripped government securities, which are
created when a dealer deposits a Treasury security or federal agency security
with a custodian for safekeeping and then sells the coupon payments and
principal payments that will be generated by this security. Proprietary
receipts, such as Certificates of Accrual on Treasury Securities (CATS),
Treasury Investment Growth Receipts (TIGRs), and generic Treasury Receipts
(TRs), are stripped U.S. Treasury securities that are separated into their
component parts through trusts created by their broker sponsors. Bonds issued by
the Financing Corporation (FICO) can also be stripped in this fashion.

U.S. TREASURY OBLIGATIONS. U.S. Treasury obligations are obligations issued by
the United States and backed by its full faith and credit.

VARIABLE AND FLOATING RATE INSTRUMENTS. Variable and floating rate instruments,
including certain participation interests in municipal obligations, have
interest rate adjustment formulas that help to stabilize their market values.
Many variable or floating rate instruments also carry demand features that
permit the Fund to sell them at par value plus accrued interest on short notice.

ZERO COUPON BOND. The Fund may invest in zero coupon securities. Zero coupon
bonds purchased by the Fund do not make regular interest payments; instead they
are sold at a deep discount from their face value and are redeemed at face value
when they mature. Because zero coupon bonds do not pay current income, their
prices can be very volatile when interest rates change. In calculating its daily
dividend, the Fund takes into account as income a

<PAGE>

portion of the difference between a zero coupon bond's purchase price and its
face value. The market prices of zero coupon securities generally are more
volatile than the market prices of securities that pay interest periodically and
are more sensitive to changes in interest rates than non-zero coupon securities
having similar maturities and credit qualities.

<PAGE>

ADDITIONAL INFORMATION ABOUT THE FUND
- --------------------------------------------------------------------------------

If you would like more information about the Fund, the following documents are
available free upon request.

STATEMENT OF ADDITIONAL INFORMATION (SAI)

The SAI contains additional information about all aspects of the Fund. A current
SAI has been filed with the Securities and Exchange Commission and is
incorporated herein by reference. For a copy of the SAI, write or call the Fund
at the address or phone number listed below. The SEC also maintains a Web site
located at http://www.sec.gov that contains the SAI, material incorporated
herein by reference, and other information regarding the Fund.

ANNUAL AND SEMI-ANNUAL REPORTS

The Fund's annual and semi-annual reports provide additional information about
the Fund's investments.

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
TO OBTAIN THE SAI OR THE MOST RECENT ANNUAL OR SEMI-ANNUAL REPORT FOR
THE FUND YOU MAY WRITE TO ALPS MUTUAL FUNDS SERVICES, INC. AT 370 17TH
STREET, SUITE 3100, DENVER, COLORADO 80202 OR CALL ALPS AT
1-800-298-3442.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

Investment Company Act File No. 811-

<PAGE>

F.I.T. LOGO

PRIME MONEY MARKET FUND
CLASS II

Prospectus

, 1999
---------

The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the accuracy of this prospectus. Any representation to
the contrary is a criminal offense.

- 1 -

<PAGE>

PRIME MONEY MARKET FUND

- --------------------------------------------------------------------------------
FUND FACTS
GOAL: To provide investors with a high level of current income while seeking to
preserve principal.

PRINCIPAL INVESTMENTS: INVESTMENT ADVISER (THE "ADVISER"):
- - U.S. Government Obligations - General Electric Investment Management,
- - Corporate Debt Obligations Inc. ("GEIM")
- - Commercial Paper DISTRIBUTOR:
- - Foreign Bank Obligations - ALPS Mutual Funds Services, Inc.("ALPS")
- - Asset-Backed and Mortgage
Related Securities
- --------------------------------------------------------------------------------

INVESTMENT OBJECTIVE -- The investment objective of the Prime Money Market Fund
(the "Fund") is to seek as high a level of current income as is consistent with
preservation of capital and liquidity.

PRIMARY RISKS -- An investment in the Fund is subject to many risks, including:

- - Interest Rate Risk - Credit Risk

ALTHOUGH THE PORTFOLIO SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1 PER
SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE PORTFOLIO.

- --------------------------------------------------------------------------------
SHOULD I INVEST IN THE PRIME MONEY MARKET FUND?
The Class II shares of the Fund are intended for institutional investors such as
broker/dealers, corporations, investment advisers, credit unions, banks, and
other financial institutions and certain individuals that can meet the minimum
investment threshold of the Fund. Investing in the Fund may be appropriate for
you if:

- - You are looking for an investment vehicle for daily cash sweep or liquidity
purposes.

- - You require stability of principal.

- - You are looking for an investment with a lower degree of risk during
uncertain economic times or periods of stock market volatility.

- - You are willing to accept lower returns than you might achieve by investing
in other types of mutual funds.

- - REMEMBER, NO SINGLE INVESTMENT CAN PROVIDE AN EFFECTIVE, BALANCED
INVESTMENT PLAN.
- --------------------------------------------------------------------------------

- 2 -

<PAGE>

PERFORMANCE

ANNUAL FUND OPERATING EXPENSES are deducted from the Fund's assets before it
pays dividends and before its net asset value and total return are calculated.
We do not charge you separately for these expenses.
<TABLE>
<CAPTION>
---------------------------------------------
ANNUAL FUND OPERATING EXPENSES
(For the year ended April 30, 1999.)
---------------------------------------------
<S> <C>
Management Fees 0.04%
---------------------------------------------
12b-1 Fees 0.25%
---------------------------------------------
Other Expenses 1.20%*
---------------------------------------------
Total Fund Operating Expenses 1.24%
---------------------------------------------
</TABLE>

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

ONE THREE
YEAR YEARS
- --------------------------------------------------------------------------------
<S> <C> <C>
PRIME MONEY MARKET $126 $393
FUND
</TABLE>

- 3 -

<PAGE>

HOW WE MANAGE THE PRIME MONEY MARKET FUND

- --------------------------------------------------------------------------------
HOW DOES THE ADVISER TRY TO REDUCE RISK?

Consistent with the investment objective and policies of the Fund, the Adviser
uses a variety of tools to try to reduce risk and increase total return,
including:

- - Diversification of assets to reduce the impact of a single holding on the net
asset value of the Fund.

- - Thorough credit research by GEIM's analysts.

- - Adjusting the average portfolio maturity to reflect the Adviser's interest
rate outlook.
- --------------------------------------------------------------------------------

PRINCIPAL INVESTMENTS -- The following table describes the securities in which
the Fund typically invests and the principal risks associated with those
securities.

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Securities Principal Risks Associated
With the Security
- ----------------------------------------------------------------------------------------------------------------------
<S> <C>
U.S. GOVERNMENT OBLIGATIONS: U.S. government INTEREST RATE RISK -- The risk of a decline in market
obligations are debt obligations issued or guaranteed value of an interest bearing instrument due to
by the U.S. Treasury or by an agency or changes in interest rates. For example, a rise in
instrumentality of the U.S. government. Not all U.S. interest rates typically will cause the value of a fixed
government obligations are backed by the full faith and rate security to fall. On the other hand, a decrease in
credit of the United States. For example, obligations interest rates will cause the value of a fixed rate
issued by the Federal Farm Credit Bank or by the Security to increase. In general, shorter term
Federal National Mortgage Association are supported securities offer greater stability and are less sensitive
by the agency's right to borrow money from the U.S. to changes in interest rates.
Treasury under certain circumstances. There is no
guarantee that the government will support these
obligations if it is not required to do so, and, therefore,
they involve more risk than other government obligations.
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>

- 4 -

<PAGE>

CREDIT RISK-- The risk that the issuer of a security,
or a party to a contract, will default or otherwise not
honor a financial obligation.

LIQUIDITY RISK -- The risk that certain securities or
other investments may be difficult or impossible to
sell at the time a Portfolio would like to sell them or
it may be difficult for a Portfolio to sell the
investment for the value the Portfolio has placed on it.
- ----------------------------------------------------------------------------------------------------------------------
CORPORATE DEBT OBLIGATIONS: Corporate debt CALL RISK
obligations include bonds, notes, debentures, and other
obligations of corporate entities to pay interest and CREDIT RISK
repay principal.
EXTENSION RISK -- Therisk that an issuer will
exercise its right to pay principal on an obligation
held by the Fund later than expected. This may
happen when there is a rise in interest rates. Under
these circumstances, the value of the obligation will
decrease and the Fund will also suffer from the
inability to invest in higher yielding securities.

INTEREST RATE RISK

LIQUIDITY RISK
- ----------------------------------------------------------------------------------------------------------------------
COMMERCIAL PAPER: Unsecured promissory notes that CREDIT RISK
corporations typically issue to finance current
operations and other expenditures. INTEREST RATE RISK

LIQUIDITY RISK
- ----------------------------------------------------------------------------------------------------------------------
ASSET-BACKED SECURITIES: Asset-backed securities are CREDIT RISK
securities whose principal and interest payments are
collateralized by pools of assets such as auto loans, EXTENSION RISK
credit card receivables, leases, installment contracts
and personal property. Such asset pools are securitized INTEREST RATE RISK
through the use of special purpose trusts or
corporations. Principal and interest payments may be LIQUIDITY RISK
credit enhanced by a letter of credit, a pool insurance
policy or a senior/subordinated structure. PREPAYMENT RISK -- The risk that a borrower will
repay the amount borrowed prior to the date the
amount is due. If a borrower chooses to prepay its
debt, the Fund may not be able to find an alternative
investment that provides for as favorable of a return
as the debt that was retired.
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>

- 5 -

<PAGE>

- ----------------------------------------------------------------------------------------------------------------------
Securities Principal Risks Associated
With the Security
- ----------------------------------------------------------------------------------------------------------------------
<S> <C>
MORTGAGE-RELATED SECURITIES: Mortgage related CALL RISK
securities or mortgage-backed securities represent direct
or indirect participations in, or are collateralized by and CREDIT RISK
payable from, mortgage loans secured by real property.
Mortgage-backed securities can be backed by either EXTENSION RISK
fixed rate mortgage loans or adjustable rate mortgage
loans, and may be issued by either a governmental or INTEREST RATE RISK
non-governmental entity. Typically, mortgage-backed
securities issued by private entities do not have the LIQUIDITY RISK
same credit standing as mortgage-backed securities
issued or guaranteed by the U.S. Government. PREPAYMENT RISK
- ----------------------------------------------------------------------------------------------------------------------
FOREIGN BANK OBLIGATIONS: U.S. Dollar CREDIT RISK
denominated obligations of United States branches of
foreign banks which at the time of investment (i) have
more than $10 billion, or the equivalent in other INTEREST RATE RISK
currencies, in total assets; and (ii) in the opinion of the
Adviser are of comparable quality to similar LIQUIDITY RISK
obligations of U.S. banks.
- ----------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS: An agreement between a CREDIT RISK
buyer and seller of securities in which the seller agrees
to buy the securities back within a specified period of INTEREST RATE RISK
time at the same price the buyer paid for them, plus an
amount equal to an agreed upon interest rate.
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>

For more information about the securities in which the Fund invests, please
refer to the Appendix to this Prospectus and the SAI.

LENDING SECURITIES. The Fund may temporarily lend up to 30% of its Fund
securities to broker-dealers and institutions, but only when the loans are
collateralized fully.

PREPARING FOR THE YEAR 2000

The Fund, as with other financial and business organizations in the United
States and around the world, could be adversely affected if computer systems
used by the Fund's service providers, including its investment advisers, fail to
correctly interpret and process date information concerning dates occurring on
and after January 1, 2000. In addition, corporate and governmental data
processing errors may result in production problems for individual companies and
overall economic uncertainties. Earnings of individual issuers may be affected
by remediation costs. Also, it has been reported that foreign institutions have
made less progress in addressing the Year 2000 problem than major U.S. entities,
which could make certain investments of the Fund more sensitive to these risks.
The Fund's service providers, including the Adviser, have taken and continue to
take steps to address this issue. If the Fund or the Adviser or any of the
Fund's service providers are unsuccessful in their attempts, shareholders could
experience certain disruptions in the services provided to them by the Fund. For
example, shareholders may be unable to redeem shares or the Fund may be unable
to compute its net asset value. The Fund and the Adviser anticipate that testing
of their computer systems will be completed by the fall of 1999. However, there
can be no assurance that the Fund will be successful and shareholders will not
experience any disruptions.

- 6 -

<PAGE>

WHO MANAGES THE PRIME MONEY MARKET FUND?

The Adviser is a wholly-owned subsidiary of General Electric Company ("GE"). The
principal address of the Adviser is 3003 Summer Street, Stamford, CT 06905.
Through GEIM and General Electric Investment Corporation ("GEIC"), an affiliated
company of GEIM, wholly owned by GE, and their predecessors, GE has more than 70
years of investment management experience. GEIM and GEIC collectively provide
investment management services to various institutional accounts with total
assets as of June 30, 1998 of approximately $69 billion, of which approximately
$1.7 billion was invested in money market funds.

Pursuant to the Investment Advisory Agreement, the Adviser has agreed to provide
a continuous investment program for the Fund, including investment research and
management with respect to the assets of the Fund. GEIM is entitled to receive
management fees of 0.04% on the first $500 million of average net assets of the
Fund, 0.06% on the next $500 million and 0.08% on average net assets in excess
of $1 billion. During the fiscal year ended April 30, 1999, the Fund paid the
Adviser 0.04% of the average net assets of the Fund in advisory fees.

ADMINISTRATIVE SERVICES AGREEMENT

The Trustees have entered into an administrative services agreement with ALPS.
Under the administrative services agreement, ALPS provides the Fund with certain
administrative and clerical services, including, but not limited to: preparing
the Fund's semi-annual reports; coordinating the preparation of the Fund's
Federal and state tax returns; monitoring the Fund's compliance with its
investment restrictions and policies; and generally assisting in the operation
of the Fund. In addition, under the administrative services agreement, ALPS
also, among other things, performs fund accounting and transfer agency services,
and pays the costs of the Fund's custodian and external auditors. Pursuant to
the administrative services agreement, ALPS receives a fee from the Fund that is
computed daily and paid monthly at the following annual rates: the greater of
$360,000 or 0.16% of average daily net assets of the Fund up to $500 million;
0.14% of average daily net assets of the Fund in excess of $500 million up to $1
billion; and 0.12% of the average daily net assets of the Fund that exceed $1
billion.

ALPS has agreed to voluntarily waive a portion of the administration fees that
it is entitled to receive from the Fund and to assume a portion of the expenses
of the Fund. More particularly, ALPS voluntarily has agreed to waive a portion
of the administration fees that it is entitled to receive under the
administrative services agreement with the Fund , and/or assume a portion of
Fund expenses, to the extent necessary for the Fund to maintain an expense ratio
that does not exceed 0.45% of the average net assets of the Fund. ALPS may
terminate this arrangement at any time.

During the fiscal year ended April 30, 1999, the Fund paid ALPS __% of the
average net assets of the Fund in administration fees.

PLAN OF DISTRIBUTION

The Trustees have adopted a plan of distribution pursuant to Rule 12b-1 under
the 1940 Act for the Class II shares of the Fund (the "Distribution Plan"). The
Distribution Plan permits the use of Fund assets to compensate ALPS for its
services and costs in distributing the Class II shares and servicing shareholder
accounts. Under the Distribution Plan, ALPS receives an amount equal to .25% of
the average net assets of the Fund that are attributable to the Class II shares.

- 7 -

<PAGE>

HOW DO I INVEST IN THE PRIME MONEY MARKET FUND?

While the Fund offers two classes of it shares, only the Class II shares are
offered in the prospectus. For information about the Class I shares, call ALPS
at (800) 298-3442.

HOW ARE INVESTMENTS MADE?

As described below, shares of the Fund may be purchased through ALPS. Shares of
the Fund may be purchased using the Federal Reserve Wire System ("Federal
Funds"). Federal Funds should be wired to:

State Street Bank & Trust Co.
ABA# 011000028
Prime Money Market Fund
Credit DDA# 22404081
(Account Registration)
(Account Number)

An initial investment in the Fund must be preceded or accompanied by a
completed, signed application. Your completed application should be forwarded
to:

Financial Investors Trust
370 17th Street, Suite 3100
Denver, CO 80202

MINIMUM PURCHASE AND ACCOUNT BALANCE REQUIREMENTS

The minimum initial investment in the Fund is $25,000 and additional investments
may be made in any amount. The minimum purchase requirements do not apply to
reinvested dividends. If your account balance falls below $5,000 due to
redemptions or exchanges, your account may be closed. In the event that your
account is closed, the Fund will wire the proceeds to the bank account of
record, or issue a check to the shareholder of record. The Fund will notify you
when your account balance has fallen below $5,000 and you will be given 30 days
to increase your investment above that amount.

HOW TO REDEEM FUND SHARES

(i) state the number of shares to be redeemed; and
(ii) identify your shareholder account number.

- 8 -

<PAGE>

EXCHANGE OF FUND SHARES

During periods of significant economic or market change, telephone or facsimile
exchanges may be difficult to complete. If you are unable to contact the Fund by
telephone or facsimile, you may also mail the exchange request to the Fund at
the address listed under "Regular Redemption." Neither the Trust nor ALPS will
be responsible for the authenticity of exchange instructions received by
telephone or facsimile except as set forth under "HOW TO REDEEM SHARES -
TELEPHONE AND FACSIMILE REDEMPTION."

HOW ARE FUND SHARES VALUED?

- 9 -

<PAGE>

any discount or premium over the period of maturity, regardless of the impact
of fluctuating interest rates on the market value of the security.

WHAT IS THE EFFECT OF FEDERAL INCOME TAX ON THIS INVESTMENT?

- 10 -

<PAGE>

FINANCIAL HIGHLIGHTS

Selected data for a share of beneficial interest
outstanding throughout the period indicated(1):

For the Period
December 10, 1998 to April 30, 1999
---------------------------------------------
Class II
---------------------------------------------
<S> <C>
Net asset value - beginning of period $1.00
---------------------------------------------

Income from investment operations
Net investment income 0.02
---------------------------------------------

Dividends and distributions to shareholders
Dividends from net investment income (0.02)
---------------------------------------------
Net asset value - end of period $1.00
---------------------------------------------
---------------------------------------------
Total return 4.55%(2)

Ratios/Supplemental Data:
Net assets, end of period (000) $2
---------------------------------------------
---------------------------------------------
Ratio of expenses to average net assets 0.45%(2)
---------------------------------------------
---------------------------------------------
Ratio of net investment income to
average net assets 4.53%(2)
---------------------------------------------
---------------------------------------------
Ratio of expenses to average net assets
without fee waivers 1.24%(2)
---------------------------------------------
---------------------------------------------
Ratio of net investment income to
average net assets without fee waivers 3.74%(2)
---------------------------------------------
---------------------------------------------
</TABLE>

(1) Class II commenced operations on December 23, 1998.
(2) Annualized.

<PAGE>

APPENDIX

ADDITIONAL INFORMATION ABOUT THE FUND'S INVESTMENTS

The Fund may also purchase privately stripped government securities, which are
created when a dealer deposits a Treasury security or federal agency security
with a custodian for safekeeping and then sells the coupon payments and
principal payments that will be generated by this security. Proprietary
receipts, such as Certificates of Accrual on Treasury Securities (CATS),
Treasury Investment Growth Receipts (TIGRs), and generic Treasury Receipts
(TRs), are stripped U.S. Treasury securities that are separated into their
component parts through trusts created by their broker sponsors. Bonds issued by
the Financing Corporation (FICO) can also be stripped in this fashion.

U.S. TREASURY OBLIGATIONS. U.S. Treasury obligations are obligations issued by
the United States and backed by its full faith and credit.

<PAGE>

ADDITIONAL INFORMATION ABOUT THE FUND
- --------------------------------------------------------------------------------

If you would like more information about the Fund, the following documents are
available free upon request.

STATEMENT OF ADDITIONAL INFORMATION (SAI)

The SAI contains additional information about all aspects of the Fund. A current
SAI has been filed with the Securities and Exchange Commission and is
incorporated herein by reference. For a copy of the SAI, write or call the Fund
at the address or phone number listed below. The SEC also maintains a Web site
located at http://www.sec.gov that contains the SAI, material incorporated
herein by reference, and other information regarding the Fund.

ANNUAL AND SEMI-ANNUAL REPORTS

The Fund's annual and semi-annual reports provide additional information about
the Fund's investments.

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
TO OBTAIN THE SAI OR THE MOST RECENT ANNUAL OR SEMI-ANNUAL REPORT FOR
THE FUND YOU MAY WRITE TO ALPS MUTUAL FUNDS SERVICES, INC. AT 370 17TH
STREET, SUITE 3100, DENVER, COLORADO 80202 OR CALL ALPS AT
1-800-298-3442.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

Investment Company Act File No. 811-

<PAGE>

[ARISTATA LOGO]

ARISTATA EQUITY FUND

Prospectus

________, 1999

As with all other mutual fund securities, the Securities and Exchange Commission
has not approved or disapproved these securities or determined whether the
information in this prospectus is adequate or accurate. Anyone who tells you
otherwise is committing a crime.

-1-

<PAGE>

ARISTATA EQUITY FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FUND FACTS

GOAL: To provide investors with long-term growth of capital and dividend income

PRINCIPAL INVESTMENTS: INVESTMENT ADVISER (the "Adviser"):
- - Common Stocks - Tempest, Isenhart, Chafee, Lansdowne & Assoc., Inc.
- - Convertible Securities
- - Fixed-Income Securities DISTRIBUTOR:
- ALPS Mutual Funds Services, Inc. ("ALPS")
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

INVESTMENT OBJECTIVE -- The objective of the Aristata Equity Fund (the "Fund")
is to seek to provide investors with long-term growth of capital and dividend
income by investing primarily in common stocks and securities convertible into,
or with rights to purchase, common stocks.

PRINCIPAL INVESTMENT STRATEGIES -- Under normal market conditions, the Adviser
currently intends to invest 80% of the Fund's assets in common stocks, preferred
stocks, and other securities that are convertible into common stock.
Additionally, the Fund may invest in investment grade fixed-income securities,
cash, and short-term fixed-income securities that are considered to be cash
equivalents. The Fund may also invest up to 10% of its total assets in
securities of foreign issuers, including sponsored and unsponsored American
Depository Receipts ("ADRs").

PRIMARY RISKS -- An investment in the Fund is subject to many risks, including:

- - Market Risk - Interest Rate Risk
- - Credit Risk - Valuation Risk

- --------------------------------------------------------------------------------
SHOULD I INVEST IN THE ARISTATA EQUITY FUND?

The Fund may be appropriate for you if:

- - You are seeking an investment that seeks to provide capital appreciation
over the long term.

- - You can tolerate the price fluctuations and volatility that are inherent
in investing in a broad-based stock mutual fund.

- - You wish to add a common stock fund to your existing investment portfolio.
(REMEMBER, NO SINGLE INVESTMENT CAN PROVIDE AN EFFECTIVE, BALANCED
INVESTMENT PLAN.)
- --------------------------------------------------------------------------------

THE VALUE OF THE FUND'S SHARES, LIKE STOCK PRICES GENERALLY, WILL FLUCTUATE
WITHIN A WIDE RANGE, SO AN INVESTOR IN THE FUND COULD LOSE MONEY OVER SHORT OR
EVEN LONG PERIODS.

-2-

<PAGE>

PERFORMANCE

Because the Fund commenced operations in March of 1998, historical performance
is not yet presented for the Fund. Performance history will be presented for the
Fund after it has been in operation for one calendar year.

ANNUAL FUND OPERATING EXPENSES are deducted from the Fund's assets before it
pays dividends and before its net asset value and total return is calculated. We
do not charge you separately for these expenses.

----------------------------------------------
ANNUAL FUND OPERATING EXPENSES
(For the year ended April 30, 1999.)
----------------------------------- ----------
<S> <C>
Management Fees 0.85%
----------------------------------- ----------
12b-1 Fees None
----------------------------------- ----------
Other Expenses 0.26%
----------------------------------- ----------
Total Fund Operating Expenses 1.11%*
----------------------------------- ----------
</TABLE>

* The Adviser has agreed to waive that portion of its fee to the extent
necessary for the Fund to maintain an expense ratio of not more than 1.05% of
average net assets of the Fund.

ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ARISTATA EQUITY FUND $113 $353 $611 $1,350
</TABLE>

-3-

<PAGE>

HOW WE MANAGE THE ARISTATA EQUITY FUND

OUR INVESTMENT STRATEGY -- In selecting investments for the Fund, the Adviser
follows an investment approach commonly referred to as a "value investment"
approach. Under the value investment approach, investors seek to invest in
companies whose stock prices are low in relation to their real worth or future
prospects. By identifying companies whose stocks are currently out of favor or
misunderstood, investors following the value investment approach hope to realize
significant appreciation as other investors recognize a stock's intrinsic value
and the price rises accordingly.

The Fund may pursue its investment objective by investing in securities of
companies of any size. Investing in smaller companies involves risks that are
not normally associated with larger, more established companies.

Finding undervalued stocks requires considerable research to identify a
particular company, analyze its underlying financial condition and prospects,
and assess the likelihood that the stock's underlying value ultimately will be
recognized by the market and reflected in its price. Stocks may not appreciate
as quickly or significantly as the Adviser may have anticipated.

PRINCIPAL INVESTMENTS -- The following table describes the securities in which
the Fund typically invests and the principal risks associated with those
securities.

- --------------------------------------------------------------------------------
HOW DOES THE ADVISER IDENTIFY UNDERVALUED STOCKS?

The Adviser employs a variety of analytical approaches to determine if a stock
is undervalued. Some of the principal measures used to identify such stocks are:

PRICE/EARNINGS RATIO -- Dividing a stock's price by its earnings per share
generates a price/earnings or P/E ratio. A stock with a P/E that is below that
of its peers, the market as a whole, or its own historical norm may represent an
attractive opportunity.

PRICE/BOOK VALUE RATIO -- Dividing a stock's price by its book value per share
indicates how a stock is priced relative to the accounting (i.e., book) value of
the company's assets. A ratio below the market, that of its competitors, or its
own historic norm could indicate an undervalued situation.

DIVIDEND YIELD -- A stock's dividend yield is found by dividing its annual
dividend by its share price. A yield above a stock's own historic norm or that
of its peers may suggest an attractive investment opportunity.
- -------------------------------------------------------------------------------

-4-

<PAGE>

LIQUIDITY RISK -- The risk that certain securities
or other investments may be difficult or impossible
to sell at the time the Fund would like to sell
them or it may be difficult for the Fund to sell
the investment for the value the Fund has placed on
it.
- ----------------------------------------------------------- -----------------------------------------------------
AMERICAN DEPOSITARY RECEIPTS: Certificates issued by a FOREIGN RISK -- The risk that foreign securities
U.S. bank which represent a stated number of shares of a may be adversely affected by political instability
foreign corporation that the bank holds in its vault. An of the issuer's country, changes in currency
ADR entitles the holder to all dividends and capital exchange rates, foreign economic conditions, or
gains earned by the underlying foreign shares. While regulatory and reporting standards that are less
ADRs represent a stated number of shares of a foreign stringent than those of the United States.
corporation, ADRs are traded on domestic securities
exchanges. MARKET RISK

VALUATION RISK -- The risk is that a fund has valued
certain securities at a higher price than it can sell
them for. This risk is common where the security is
from a relatively new issuer with little or no
previous market history and a mutual fund's
management it called upon to assign a value to the
security.
- ----------------------------------------------------------- -----------------------------------------------------
SMALL COMPANY STOCKS: Common stocks issued by companies LIQUIDITY RISK
with a stock market capitalization of $1 billion or less.
MARKET RISK

SMALL COMPANY STOCK RISK -- Small capitalization
stocks involve greater risk than those associated
with larger, more established companies. Small
company stocks may be subject to abrupt or erratic
price movements.

VALUATION RISK
- ----------------------------------------------------------- -----------------------------------------------------
</TABLE>

-5-

<PAGE>

CREDIT RISK -- The risk that the issuer of a
security, or a party to a contract, will default
or otherwise not honor a financial obligation.

EXTENSION RISK -- The risk that an issuer will
exercise its right to pay principal on an
obligation held by the Fund (such as a
Mortgage-Backed Security) later than expected.
This may happen when there is a rise in interest
rates. Under these circumstances, the value of the
obligation will decrease and the Fund will also
suffer from the inability to invest in higher
yielding securities.

INTEREST RATE RISK -- The risk that changes in
interest rates will adversely affect the value of
an investors securities. When interest rates rise,
the value of fixed-income securities will
generally fall. Conversely, a drop in interest
rates will generally cause an increase in the
value of fixed-income securities. Longer-term
securities are subject to greater interest rate
risk.

LIQUIDITY RISK
- ----------------------------------------------------------- -----------------------------------------------------
CONVERTIBLE SECURITIES: Convertible securities are CREDIT RISK
preferred stock or debt obligations that are convertible
into common stock. Convertible securities have both INTEREST RATE RISK
equity and debt or fixed-income risk characteristics.
MARKET RISK
- ----------------------------------------------------------- -----------------------------------------------------
REPURCHASE AGREEMENTS AND REVERSE REPURCHASE AGREEMENTS: CREDIT RISK
An agreement between a buyer and seller of securities in
which the seller agrees to buy the securities back within
a specified period of time at the same price the buyer
paid for them, plus an amount equal to an agreed upon
interest rate.
- ----------------------------------------------------------- -----------------------------------------------------
</TABLE>

In addition to the securities identified above, the Fund may, from time to time,
engage in the following investment practices or techniques:

BORROWING FROM BANKS. The Fund may borrow money from banks (up to 30% of the
Fund's total assets) for temporary or emergency purposes.

LENDING SECURITIES. The Fund may temporarily lend up to 30% of its Fund
securities to broker-dealers and institutions, but only when the loans are
collateralized fully.

-6-

<PAGE>

commercial paper, and certificates of deposit. This strategy is inconsistent
with the investment objective and principal investment strategies of the Fund,
and if employed, could result in the Fund achieving a lower return than it might
have achieved under normal market conditions.

For more information about the securities in which the Fund invests, please
refer to the Appendix to this Prospectus and the SAI.

YEAR 2000 AND EURO READINESS

Mutual funds and businesses around the world could be adversely affected if
computers do not properly process date-related information with respect to the
Year 2000. Similar adverse affects could result if computers do not properly
process information based on the conversion to the Euro, the new currency of the
European Union which took effect on January 1, 1999. The Fund's advisers are
addressing these issues for their computers and are getting reasonable
assurances from the Fund's other major service providers that they too are
addressing these issues to preserve smooth functioning of the Fund's trading,
pricing, shareholder accounting, custodial and other operations. There can be no
assurances, however, that all problems will be avoided.

These computer problems could also adversely affect the Funds' investments.
Improperly functioning computers may disrupt securities markets generally or
result in overall economic uncertainty. Individual companies may also be
adversely affected by the cost of fixing their computers, which could be
substantial. The Fund's investment managers consider these issues when
evaluating investments for the Funds.

WHO MANAGES THE ARISTATA EQUITY FUND?

Tempest, Isenhart, Chafee, Lansdowne & Assoc., Inc., acts as the investment
adviser to the Fund under the supervision of the Trust's Board of Trustees. The
Adviser's address is 1380 Lawrence Street, Suite 1050, Denver, Colorado 80204.
The Adviser manages the investment and reinvestment of the assets of the Fund
and continuously reviews, supervises and administers the Fund's investments. The
Adviser is responsible for placing orders for the purchase and sale of the
Fund's investments directly with brokers and dealers selected by it in its
discretion.

The Adviser utilizes a team management system for the Fund. The Adviser's
investment professional team has an average of more than 25 years of investment
research and portfolio management experience. These individuals bring a broad
base of experience, ideas, knowledge, and expertise to the Fund's management.

The team of analysts and portfolio managers provides management of the Fund.
The Adviser's investment team is led by H. David Lansdowne, CFA, President
and Chief Executive Officer of Tempest, Isenhart, and its Chief Investment
Officer since 1988. The Fund's other key investment management team include:
Robert J. Alder, CFA, J. Jeffrey Dohse, Barbara Grummel and Greg H. Thompson,
CFA.

Mr. Lansdowne earned both his B.S. (1969) and his M.B.A. from the University of
Denver in 1972. He was awarded the Chartered Financial Analyst (CFA) designation
in 1977. Mr. Lansdowne joined Tempest, Isenhart in 1983 as Director of Research.
He began his career as an Investment Officer with Colorado National Bank in
Denver. He joined United Capital Management, a subsidiary of United Bank of
Denver, where he was Vice President and Portfolio Manager, overseeing pension
plans of Fortune 500 Companies. Immediately prior to joining the Adviser, he was
Senior Vice President and Director of Research for Financial Programs Mutual
Funds and for their subsidiary for privately-managed accounts, Financial Trust
Company.

Mr. Alder earned his B.S. from the University of Colorado in 1969. He was
awarded the Chartered Financial Analyst (CFA) designation in 1977. His
investment management career began in 1969 as a portfolio manager and analyst
with the Trust Investment Division of the First National Bank of Denver. In
1977, he joined the Trust Investment Division of Colorado National Bank and
became head of the department in 1982. In 1987, he was instrumental in creating
Colorado National Bank's wholly-owned registered investment advisory subsidiary,
Colorado Capital Advisors and was President of that subsidiary until 1993, when
he joined the Adviser in his current capacity as Executive Vice President.

-7-

<PAGE>

trainee involved in all facets of bank and trust investments. He then
joined the United Bank of Denver as Investment Officer, managing trust
portfolios. Prior to joining the Adviser, Mr. Dohse was a Vice President and
Portfolio Manager at IntraWest Bank of Denver, with responsibility for various
investment management portfolios. Mr. Dohse is the lead portfolio manager for
the Aristata Equity Fund.

Ms. Grummel earned her B.S. from the University of Colorado in 1979. She worked
for the National Association of Securities Dealers, N. Donald and Company and
the underwriting and asset management divisions of Merrill Lynch. Prior to
joining the Adviser she was Executive Vice President with Lord Abbett and
Company, the New York based mutual fund group, where her responsibilities
included state-specific municipal bond fund management, individual fixed income
portfolio management and new business development.

Mr. Thompson earned his B.S. from the University of Wyoming in 1967 and his
M.B.A. from the University of Denver in 1972. He was awarded the Chartered
Financial Analyst designation in 1988. He joined the Adviser in 1987. His
previous positions include three years as a Financial Analyst with Standard &
Poor's Compustat Services, Inc. in Englewood, Colorado and twelve years with
Page T. Jenkins, a Denver proprietorship. He was an Investment Manager and
Security Analyst with Jenkins, conducting research and managing securities and
mineral portfolios for the firm.

For the advisory services it provides to the Funds, Tempest, Isenhart receives
from the Fund a monthly fee, based on average daily net assets, at the annual
rate of 0.85%.

ADVISER'S EQUITY PERFORMANCE. Although the Adviser did not manage a registered
investment company prior to March 2, 1998 (the date the Fund commenced
operations), the Adviser has been providing investment advisory services to
certain clients since 1976. In fact, substantially all of the initial investors
in the Fund previously were investors in certain unregistered, commingled
investment pools advised by the Adviser (the "Pools") that were converted into
the Fund.

The performance information presented below represents the performance of those
Pools with investment objectives, policies, and strategies substantially similar
to those of the Fund. However, the Pools were not subject to certain limitations
imposed on registered investment companies by the 1940 Act and the Internal
Revenue Code (the "Code"). If the Pools were subject to the limitations of the
1940 Act and the Code, the performance of the Pools may have been reduced. THE
PAST PERFORMANCE INFORMATION PRESENTED BELOW DOES NOT INDICATE HOW THE FUND WILL
PERFORM IN THE FUTURE AND IS INTENDED TO BE USED FOR PURPOSES OF COMPARISON
ONLY.

Assets Included in S&P
Adviser's Equity Adviser's Equity 500 Index
Year(1) Performance Performance(2) Return(3)
------- ----------- -------------- ---------
<S> <C> <C> <C> <C>
1976(4) $1,518,789 8.65% 8.63% 5.90%
1977 $2,065,101 -1.05% -0.99% -7.40%
1978 $2,761,815 8.04% 8.11% 6.50%
1979 $4,296,091 32.10% 32.18% 18.50%
1980 $8,555,330 53.72% 53.81% 32.40%
1981 $8,576,467 -3.94% -3.88% -5.00%
1982 $9,303,758 22.76% 22.84% 21.60%
1983 $11,429,058 16.89% 16.96% 22.60%
1984 $12,488,443 4.01% 4.07% 6.40%
1985 $17,084,735 36.63% 36.71% 31.90%
1986 $21,918,621 16.26% 16.33% 18.80%
1987 $21,331,298 -0.01% -19.64% 5.20%
1988 $23,289,415 20.06% 20.13% 16.50%
1989 $29,968,045 23.07% 23.14% 31.70%
1990 $29,015,064 -9.18% -9.13% -3.20%
1991 $42,041,677 18.95% 19.02% 30.50%
1992 $49,730,021 10.90% 10.98% 7.60%
1993 $60,287,572 15.65% 15.72% 10.10%
1994 $62,698,066 -4.57% -4.52% 1.20%
1995 $77,240,261 26.69% 26.76% 37.40%
1996 $89,294,058 15.96% 16.03% 22.94%
</TABLE>

-8-

<PAGE>

<TABLE>
<S> <C> <C> <C> <C>
1997 $96,455,061 26.46% 26.53% 33.29%
1998 $98,552,907 10.15% 10.23% 28.57%

For 5 Years Ended 1998 (1) 14.32% 14.39% 23.98%
For 10 Years Ended 1998 (1) 12.78% 12.85% 19.16%
Since Inception (August 31, 1976) 14.72% 13.67% 15.97%
</TABLE>

(1) All periods are ended December 31.
(2) The annual total returns achieved by the Pools as presented above reflects
the annual operating expenses of the Fund and is calculated in accordance
with SEC guidelines. The performance information in the first column
reflects the weighted average of the performance of the Pools and has been
restated to reflect a total expense ratio of 1.11% which is the gross
expense ratio that the Fund experienced for the fiscal period ended April
30, 1999 and which reflects a management fee of .85% of average net
assets. The performance information in the second column has been restated
to reflect a total expense ratio of 1.05% which reflects certain voluntary
fee waivers and/or expense reimbursements. These waivers and/or
reimbursements may be modified or terminated at any time.
(3) The S&P 500 Index is an unmanaged index tracking the performance of 500
publicly traded U.S. Stocks and is often used to indicate the performance
of the overall domestic stock market. The S&P 500 is not a mutual fund,
and you cannot invest in it directly. Also, the performance of the S&P 500
does not reflect the costs associated with operating a mutual fund, such
as buying, selling, and holding securities.
(4) Data for the period August 31, 1976 through December 31, 1976.

HOW DO I INVEST IN THE ARISTATA EQUITY FUND?

HOW ARE INVESTMENTS MADE?

As described below, you may purchase shares of the Fund through an authorized
broker, service organization or investment adviser, or directly from the Fund.
Your orders for the purchase of shares will be executed at the net asset value
per share next determined after an order has been received in good form. Your
payment will be invested in full and fractional shares of the Fund. Your orders
transmitted to the Fund in proper form prior to 4:00 p.m., Eastern Time will be
executed that day. You will not receive certificates for shares that you
purchase. ALPS serves as the Fund's Transfer Agent and ALPS maintains records of
each shareholder's holdings of Fund shares. The Fund reserves the right to
reject any purchase. Your initial investment in the Fund must be preceded or
accompanied by a completed, signed application.

MINIMUM PURCHASE REQUIREMENTS

The minimum initial investment in the Fund is $2,000, including IRA investments.
Any subsequent investments must be at least $50, including IRA investments. All
initial investments should be accompanied by a completed Purchase Application. A
Purchase Application accompanies this Prospectus. You may obtain additional
copies of the Purchase Application by calling the Fund at 1-800-644-8595. In
order to establish an IRA, you must complete a separate application that you can
obtain by calling the Fund. The Fund reserves the right to reject any purchase
order.

INVESTING THROUGH YOUR BROKER, INVESTMENT ADVISER, OR A SERVICE ORGANIZATION

Shares are available to new and existing shareholders through authorized
brokers, investment advisers and service organizations. To make an investment
using this method, simply complete a Purchase Application and contact your
broker, investment adviser or service organization with instructions as to the
amount you wish to invest. Your broker will then contact the Fund to place the
order on your behalf. Authorized brokers, investment advisers and service
organizations may impose additional requirements and charges for the services
rendered.

Your orders received by the Fund prior to the close of its trading (which is
currently 4:00 p.m., Eastern time), will become effective that day. Brokers who
receive your orders are obligated to transmit them promptly. You will receive
written confirmation of your order within a few days of receipt of instructions
from your broker.

CAN I INVEST IN THE FUND DIRECTLY?

You can invest in the Fund directly by using any of the methods described below.

-9-

<PAGE>

BY MAIL. Make your check payable to the Aristata Equity Fund and mail it, along
with the Purchase Application (if your purchase is an initial investment), to
the address indicated on the Purchase Application. Purchases made by check are
not permitted to be redeemed until payment of the purchase has been collected,
which may take up to fifteen calendar days. Third party and foreign checks will
not be accepted. Please include the Fund name and your account number on all
checks.

BY BANK TRANSFER. After you have established an account with the Fund, a bank
transfer will allow you to transfer money from your bank account via the
Automated Clearing House (ACH) network to your Fund account. To use this
service, you must indicate your desire to have this option on your Purchase
Application. You also will need access to an account with a bank that provides
bank transfer services. (Your bank may charge you a fee for this service.) Once
you have established this option, a deposit account must be opened at a bank
providing bank transfer services and you must arrange for this service to be
provided. Once you have completed this process, you can initiate a bank transfer
by contacting a representative from your bank, providing the required
information for the bank, and authorizing the transfer to take place. Please
allow two or three days after the authorization for the transfer to occur.

BY WIRE. To initiate your wire transaction, call your depository institution.
Federal funds (monies transferred from one bank to another through the Federal
Reserve System with same-day availability) should be wired to:

State Street Bank & Trust Co.
ABA# 011000028
Aristata Equity Fund
Credit DDA# 22404081
(Account Registration)
(Account Number)

AUTOMATIC INVESTMENT PROGRAM. The Automatic Investment Program offers a simple
way to establish and maintain a consistent investment program. You may arrange
automatic transfers (minimum $50 per transaction) from your bank account to your
Fund account on a periodic basis by simply completing the Automatic Investment
Plan section of your Purchase Application. When you participate in this program,
the minimum initial investment in each Fund is $250. You may change the amount
of your automatic investment, skip an investment, or stop the Automatic
Investment Program by calling the Fund at (800) 644-8595 at least three business
days prior to your next scheduled investment date.

The Fund may in its discretion discontinue, suspend or change the practice of
accepting orders by any of the methods described above. Orders for the
purchase of shares are subject to acceptance by the Fund. The Fund reserves
the right to suspend the sale of shares, or to reject any purchase order,
including orders in connection with exchanges, for any reason.

HOW DO I REDEEM FUND SHARES?

Shareholders may redeem their shares, in whole or in part, on each day the Fund
is valued (see the section entitled "Fund Share Valuation" later in this
Prospectus). Shares will be redeemed at the net asset value next determined
after a redemption request has been received by the Fund in good form.

A redemption may be a taxable transaction on which gain or loss may be
recognized. See the section entitled "Dividends, Distributions And Federal
Income Tax" later in this Prospectus for more information.

Where the shares to be redeemed have been purchased by check, the payment of
redemption proceeds may be delayed until the purchasing check has cleared, which
may take up to 15 calendar days. Shareholders may avoid this delay by investing
through wire transfers of Federal funds. During the period prior to the time the
shares are redeemed, dividends on the shares will continue to accrue and be
payable and the shareholder will be entitled to exercise all other beneficial
rights of ownership.

Once the shares are redeemed, the Fund will ordinarily send the proceeds by
check to the shareholder at the address of record on the next business day. The
Fund may, however, take up to seven days to make payment. Also, if the New York
Stock Exchange is closed (or when trading is restricted) for any reason other
than customary weekend or holiday closings or if an emergency condition, as
determined by the SEC merits such action, the Fund may suspend redemptions or
postpone payment dates beyond the normal seven day redemption period.

To ensure acceptance of your redemption request, it is important to follow the
procedures described below. Although the Fund has no present intention to do so,
the Fund reserves the right to refuse or to limit the frequency of any
telephone, wire or bank transfer redemptions. Of course, it may be difficult to
place orders by telephone during periods of severe market or economic change,
and a shareholder should consider alternative methods of communications during
such times.

-10-

<PAGE>

The Fund may modify or terminate its services and provisions at any time. If the
Fund terminates any particular service, it will do so only after giving written
notice to shareholders. Redemption by mail will always be available to
shareholders.

You can redeem your shares directly from the Fund using any of the methods
described below.

REDEEMING YOUR SHARES USING AN AUTHORIZED BROKER, SERVICE ORGANIZATION OR
INVESTMENT ADVISER

You may redeem your shares by contacting your authorized broker, service
organization or investment adviser and instructing him or her to redeem your
shares. He or she will then contact ALPS and place a redemption order on your
behalf.

REDEEMING YOUR SHARES DIRECTLY FROM THE FUND

BY MAIL. You may redeem your shares by sending a letter directly to the Fund. To
be accepted, a letter requesting redemption must include: (i) the Fund name and
account registration from which you are redeeming shares; (ii) your account
number; (iii) the amount to be redeemed; (iv) the signatures of all registered
owners; and (v) for redemptions exceeding $10,000, a signature guarantee by any
eligible guarantor institution, including a member of a national securities
exchange, or a commercial bank or trust company, broker-dealer, credit union or
savings association. Corporations, partnerships, trusts or other legal entities
will be required to submit additional documentation.

BY TELEPHONE. If you have established the telephone redemption privilege on your
Purchase Application, you may redeem your shares by calling the Fund at
1-800-644-8595. You should be prepared to give the telephone representative the
following information: (i) your account number, social security number and
account registration; (ii) the Fund name from which you are redeeming shares;
and (iii) the amount to be redeemed. The conversation may be recorded to protect
you and the Fund. The Fund employs reasonable procedures to confirm that
instructions communicated to its representatives by telephone are genuine. If
the Fund fails to employ such reasonable procedures, it may be liable for any
loss, damage or expense arising out of any telephone transactions purporting to
be on a shareholder's behalf. However, if the Fund acts on instructions it
reasonably believes to be genuine, you will bear the loss. For your protection,
telephone redemptions will be suspended for a period of 10 days following an
address change given over the telephone.

You may instruct the Fund to send your redemption proceeds via federal wire
($1,000 minimum per transaction) or bank transfer to your personal bank. Your
instructions should include: (i) your account number, social security number and
account registration; (ii) the Fund name from which you are redeeming shares;
and (iii) the amount to be redeemed. Wire and bank transfer redemptions can be
made only if the privilege has been established on your Purchase Application and
you have attached a copy of a voided check or a letter summarizing the wiring
instructions of the account where proceeds are to be wired. Your bank may charge
you a fee for receiving a wire payment on your behalf.

You cannot redeem shares held in IRAs using the telephone.

SYSTEMATIC WITHDRAWAL PLAN. If your Fund account balance is $10,000 or more, you
may elect to have periodic redemptions made from your account on a monthly,
quarterly, semi-annual or annual basis by completing the Systematic Withdrawal
Plan section of the Purchase Application. The minimum periodic withdrawal is
$100 and the transaction normally will be executed on the fifth or twentieth day
of the selected month(s). Depending on the size of the payment requested and
fluctuation in the net asset value, if any, of the shares redeemed, redemptions
for the purpose of making such payments may reduce or even exhaust your account.
You also may request that these payments be sent to a predesignated bank account
or other designated party. If a shareholder participates in the Systematic
Withdrawal Plan, all dividends will automatically be reinvested [unless the
shareholder directs otherwise].

EXCHANGE OF FUND SHARES

The Fund offers two convenient ways to exchange shares in one Fund for shares in
another Fund in the Trust. Before engaging in an exchange transaction, a
shareholder should read carefully the Prospectus describing the Fund into which
the exchange will occur. A prospectus for any fund offered by the Trust can be
obtained without charge by writing to the Fund at the address listed on the
cover of this Prospectus. A shareholder may not exchange shares of one Fund for
shares of another Fund if the new Fund is not qualified for sale in the state of
the shareholder's residence. Please call the Fund at (800) 644-8595 to see if
the fund you are interested in is available in your state. The minimum amount
for an initial and subsequent exchange is $50. The Trust may terminate or amend
the terms of the exchange privilege at any time upon at least 60 days prior
written notice to shareholders of any modification or termination of the
exchange privilege.

-11-

<PAGE>

A new account opened by exchange must be established with the same name(s),
address and social security number as the existing account. All exchanges will
be made based on the net asset value next determined following receipt of the
request by a Fund in good order.

An exchange is taxable as a sale of a security on which a gain or loss may be
recognized. See the section entitled "Dividends, Distributions And Federal
Income Tax" later in this Prospectus for more information. Shareholders will
receive written confirmation of the exchange following completion of the
transaction.

EXCHANGE BY MAIL. To exchange Fund shares by mail, simply send a letter of
instruction to the Fund. The letter of instruction must include: (i) your
account number; (ii) the Fund from and the Fund into which you wish to exchange
your investment; (iii) the dollar or share amount you wish to exchange; and (iv)
the signatures of all registered owners or authorized parties; (v) for exchanges
exceeding $10,000, a signature guarantee by an eligible guarantor institution,
including a member of a national securities exchange, or by a commercial bank or
trust company, broker/dealer, credit union or savings association.

EXCHANGE BY TELEPHONE. If you have established the telephone exchange privilege
on your Purchase Application, you may exchange Fund shares by telephone by
simply calling the Fund at (800) 644-8595. You should be prepared to give the
telephone representative the following information: (i) your account number,
social security or tax identification number and account registration; (ii) the
name of the Fund from and the Fund into which you wish to transfer your
investment; and (iii) the dollar or share amount you wish to exchange. The
conversation may be recorded to protect you and the Funds. Telephone exchanges
will be suspended for a period of ten days following a telephone address change.
See the section entitled "Redemption Of Fund Shares - By Telephone" later in
this Prospectus for a discussion of telephone transactions generally.

INDIVIDUAL RETIREMENT ACCOUNTS

The Fund may be used as a funding medium for traditional and Roth IRAs. In
addition, a traditional or Roth IRA may be established through a custodial
account with the Fund. Completion of a special application is required in order
to create such an account, and the minimum initial investment for an IRA is
$2,000. Contributions to IRAs are subject to the limits and conditions
established by the Internal Revenue Service. For more information, call the Fund
at 1-800-644-8595 or your tax advisor.

Additional account level fees are imposed for IRA accounts.

HOW ARE FUND SHARES VALUED?

WHAT IS THE EFFECT OF FEDERAL INCOME TAX ON THIS INVESTMENT?

The Fund intends to distribute substantially all of its net investment income
and capital gains, if any, to shareholders within each calendar year as well as
on a fiscal year basis. Any net capital gains realized are normally distributed
in December. Income dividends for the Fund, if any, are declared and paid
quarterly.

FEDERAL TAXES. Distributions of gains from the sale of assets held by the Fund
for more than one year generally are taxable to shareholders at the applicable
long-term capital gains rate, regardless of how long they have owned their Fund
shares. Distributions from other sources generally are taxed as ordinary income.
A portion of the Fund's dividends may qualify for the dividends-received
deduction for corporations. Distributions are taxable when they are paid,
whether taken in cash or reinvested in additional shares, except that
distributions declared in October, November or December and paid in January are
taxable as if paid on December 31. The Fund will send each shareholder an IRS
Form 1099-DIV by January 31.

"BUYING A DIVIDEND." On the record date for a distribution of income or capital
gains, the Fund's share price is reduced by the amount of the distribution. If
shares are bought just before the record date ("buying a dividend"), the full
price for the shares will by paid, and a portion of the price will be received
back as a taxable distribution.

-12-

<PAGE>

the Fund after a transfer ("new shareholders"). As a result, the Fund may have
acquired some securities that have appreciated in value or depreciated in value
from the date they were acquired originally. If appreciated securities are sold
after the transfer, the amount of the gain would be taxable to new shareholders
as well as to reorganizing shareholders. New shareholders would therefore incur
a tax liability on distributions of capital gains realized by the Fund even
though the value of their investment in the Fund may not have increased. The
effect on shareholders who transferred into the Fund would be to reduce their
potential liability for tax on capital gains by spreading it over a larger asset
base. The opposite may occur if the Fund acquires securities having an
unrealized capital loss. In that case, shareholders who transferred into the
Fund will be unable to utilize the loss to offset gains, but, because the
transfer will not result in any gains, the inability of shareholders who
transferred into the Fund to utilize unrealized losses will have no immediate
tax effect. For new shareholders, to the extent that unrealized losses are
realized by the Fund, new shareholders may benefit by any reduction in net tax
liability attributable to the losses.

OTHER TAX INFORMATION. The information above is only a summary of some of the
Federal tax consequences generally affecting the Fund and its shareholders, and
no attempt has been made to discuss individual tax consequences generally
affecting the Fund and its shareholders, and no attempt has been made to discuss
individual tax consequences. In addition to Federal tax, distributions may be
subject to state or local taxes. Shareholders should consult their tax advisers
for details and up-to-date information on the tax laws in your state to
determine whether the Fund is suitable given your particular tax situation.

When you sign your account application, you will be asked to certify that your
taxpayer identification number is correct and that you are not subject to backup
withholding for failing to report income to the IRS. If you do not comply with
IRS regulations, the IRS can require the Fund to withhold 31% of taxable
distributions from your account.

-13-

<PAGE>

FINANCIAL HIGHLIGHTS

FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout the
period indicated:

Equity Fund
For the For the Period
Year Ended March 2, 1998
April 30, 1999 to April 30, 1998
-----------------------------------------------------
<S> <C> <C>

Selected Per-Share Data:
Net asset value - beginning of period $10.44 $10.00
-----------------------------------------------------
Income from investment operations:
Net investment income 0.14 0.01
Net realized and unrealized gain on investments 0.81 0.44
-----------------------------------------------------
Total income from investment operations 0.95 0.45
-----------------------------------------------------
Distributions:
From net investment income (0.14) (0.01)
From net realized gain (0.14) -
-----------------------------------------------------
Total distributions (0.28) (0.01)
-----------------------------------------------------
Net asset value - end of period $11.11 $10.44
-----------------------------------------------------
-----------------------------------------------------
Total Return 9.39% 4.54%
-----------------------------------------------------
-----------------------------------------------------
Ratios and Supplemental Data:
Net assets, end of period (000) $94,373 $101,614
-----------------------------------------------------
-----------------------------------------------------
Ratio of expenses to average net assets 0.95% 0.95%(1)
-----------------------------------------------------
-----------------------------------------------------
Ratio of net investment income to
average net assets 1.41% 0.84%(1)
-----------------------------------------------------
-----------------------------------------------------
Ratio of expenses to average net
assets without fee waivers 1.11% 1.17%(1)
-----------------------------------------------------
-----------------------------------------------------
Ratio of net investment income to
average net assets without fee waivers 1.25% 0.62%(1)
-----------------------------------------------------
-----------------------------------------------------
Portfolio turnover rate 25.26% 14.20%(1)
-----------------------------------------------------
-----------------------------------------------------
</TABLE>

(1) Annualized

-14-

<PAGE>

ADDITIONAL INFORMATION ABOUT THE FUND
- --------------------------------------------------------------------------------

If you would like more information about the Fund, the following documents are
available free upon request.

STATEMENT OF ADDITIONAL INFORMATION (SAI)

The SAI contains additional information about all aspects of the Fund. A current
SAI has been filed with the Securities and Exchange Commission and is
incorporated herein by reference. For a copy of the SAI, write or call the Fund
at the address or phone number listed below. The SEC also maintains a Web site
located at http://www.sec.gov that contains the SAI, material incorporated
herein by reference, and other information regarding the Fund.

ANNUAL AND SEMI-ANNUAL REPORTS

The Fund's annual and semi-annual reports provide additional information about
the Fund's investments. The annual report contains a discussion of the market
conditions and investment strategies that significantly affected the Fund's
performance during the last fiscal year.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TO OBTAIN THE SAI OR THE MOST RECENT ANNUAL OR SEMI-ANNUAL REPORT FOR THE
FUND YOU MAY WRITE TO THE ARISTATA EQUITY FUND, C/O ALPS MUTUAL FUNDS SERVICES,
INC. AT 370 17TH STREET, SUITE 3100, DENVER, COLORADO 80202 OR CALL
THE FUND AT 1-800-644-8595.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Investment Company Act File No. 811-

<PAGE>

FINANCIAL INVESTORS TRUST

U.S. TREASURY MONEY MARKET FUND
U.S. GOVERNMENT MONEY MARKET FUND
PRIME MONEY MARKET FUND (CLASSES I AND II)

370 Seventeenth Street, Suite 3100
Denver, Colorado 80202

____________, 1999

General Information: (800) 298-3442

STATEMENT OF ADDITIONAL INFORMATION

This Statement of Additional Information ("SAI") is not a prospectus and is only
authorized for distribution when preceded or accompanied by the prospectus for
shares of the U.S. Treasury Money Market Fund (the "Treasury Fund"), the U.S.
Government Money Market Fund (the "Government Fund"), or the Prime Money Market
Fund (the "Prime Fund") (collectively, the "Funds"), dated ___________, 1999
(the "Prospectus"). This SAI contains additional and more detailed information
than that set forth in each Prospectus and should be read in conjunction with
the Prospectus. The Funds' most recent Annual Report is incorporated herein by
reference. A free copy of the Annual Report and additional copies of the
Prospectus can be obtained by calling the toll-free number printed above.

<PAGE>

TABLE OF CONTENTS
<TABLE>
<CAPTION>

Page No.

<S> <C>
Investment Restrictions ..............................................3

Investment Instruments ...............................................4

Management ...........................................................8

Calculation of Yields and Performance Information ...................11

Determination of Net Asset Value ....................................13

Portfolio Transactions ..............................................14

Exchange Privilege ..................................................14

Redemptions .........................................................15

Federal Income Taxes.................................................15

Shares of Beneficial Interest .......................................16

Distribution Plan ...................................................18

Other Information ...................................................19

Custodian and Sub-Custodian .........................................19

Experts .............................................................19

Financial Statements.................................................19
</TABLE>

-i-

<PAGE>

INVESTMENT POLICIES AND RISKS

Financial Investors Trust (the "Trust") is an open-end, diversified
management investment company with multiple investment portfolios. The Trust is
a Delaware business trust established under a Declaration of Trust dated
November 30, 1993. Three of its investment portfolios are discussed in this SAI.

THE TREASURY FUND seeks to provide investors with as high a level of
current income as is consistent with preservation of capital and liquidity by
investing exclusively in U.S. Treasury bills, notes and other direct obligations
of the U.S. Treasury and repurchase agreements fully collateralized by direct
U.S. Treasury obligations. The Fund is required to maintain a dollar-weighted
average portfolio maturity of 90 days or less and seeks to maintain its net
asset value per share at $1.00 for purposes of purchases and redemptions.

THE GOVERNMENT FUND seeks to provide investors with as high a level of
current income as is consistent with the preservation of capital and liquidity
by investing exclusively in obligations of the U.S. Government, its agencies and
instrumentalities and repurchase agreements fully collateralized by such
obligations. The Fund is required to maintain a dollar-weighted average
portfolio maturity of 90 days or less and seeks to maintain its net asset value
per share at $1.00 for purposes of purchases and redemptions.

THE PRIME FUND seeks to provide investors with as high a level of current
income as is consistent with the preservation of capital and liquidity by
investing in a defined group of short-term, U.S. dollar denominated money market
instruments. The Fund is required to maintain a dollar-weighted average
portfolio maturity of 90 days or less and seeks to maintain its net asset value
per share at $1.00 for purposes of purchases and redemptions.

Shares of the Funds are offered for sale by ALPS Mutual Funds Services,
Inc., the Sponsor and Distributor, as an investment vehicle for institutional
and high net worth investors.

The Prospectus discusses the investment objectives of the Funds and the
policies to be employed to achieve those objectives. This section contains
supplemental information concerning certain types of securities and other
instruments in which the Funds may invest, the investment policies and portfolio
strategies that the Funds may utilize, and certain risks attendant to such
investments, policies and strategies.

The following information supplements the discussion of the investment
objectives and policies of the Funds in each Fund's Prospectus.

U.S. TREASURY OBLIGATIONS. Each Fund may invest, and the Treasury Fund
invests exclusively, in direct obligations of the United States Treasury which
have remaining maturities of 13 months or less and related repurchase
agreements. The United States Treasury issues various types of marketable
securities consisting of bills, notes, bonds and other debt securities. They are
direct obligations of the United States Government and differ primarily in the
length of their maturity. Treasury bills, the most frequently issued marketable
United States Government security, have a maturity of up to one year and are
issued on a discount basis.

U.S. GOVERNMENT AGENCIES. The Government Fund and the Prime Fund may
invest in obligations issued or guaranteed by the United States Government or
its agencies or instrumentalities which have remaining maturities not exceeding
thirteen months. Agencies and instrumentalities which issue or guarantee debt
securities and which have been established or sponsored by the United States
Government include the Banks for Cooperatives, the Export-Import Bank, the
Federal Farm Credit System, the Federal Home Loan Banks, the Federal Home Loan
Mortgage Corporation, the Federal Intermediate Credit Banks, the Federal Land
Banks, the Federal National Mortgage Association and the Student Loan Marketing
Association. United States Government agency and instrumentality obligations
include master notes issued by these entities but do not include obligations of
the World Bank, The Inter-American Development Bank or the Asian Development
Bank.

-1-

<PAGE>

ASSET-BACKED SECURITIES (Prime Fund). Asset-backed securities purchased by
the Fund may include pools of mortgages, loans, receivables or other assets.
Payment of principal and interest may be largely dependent upon the cash flows
generated by the assets backing the securities. Asset-backed securities involve
certain risks that are not posed by mortgage-related securities, resulting
mainly from the fact that asset-backed securities do not usually contain the
complete benefit of a security interest in the related collateral. For example,
credit card receivables generally are unsecured and the debtors are entitled to
the protection of a number of state and Federal consumer credit laws, some of
which may reduce the ability to obtain full payment. In the case of automobile
receivables, due to various legal and economic factors, proceeds from
repossessed collateral may not always be sufficient to support payments on these
securities. The risks associated with asset-backed securities are often reduced
by the addition of credit enhancements such as a letter of credit from a bank,
excess collateral or a third-party guarantee. However, the extent of the credit
enhancement may differ amongst securities and generally only applies to a
fraction of the securities' value. With respect to asset-backed securities
arising from secured debt (such as automobile receivables), there is a risk that
parties other than the originator and servicer of the loan may acquire a
security interest superior to that of the securities holders.

BANK OBLIGATIONS (Prime Fund). These obligations include negotiable
certificates of deposit, bankers' acceptances and fixed time deposits and other
obligations issued or supported by banks. The Funds' policy on concentration in
bank obligations and a description of the banks the obligations of which the
Fund may purchase are set forth in the Fund's prospectus. A certificate of
deposit is a short-term, interest-bearing negotiable certificate issued by a
commercial bank against funds deposited in the bank. A bankers' acceptance is a
short-term draft drawn on a commercial bank by a borrower, usually in connection
with an international commercial transaction. The borrower is liable for payment
as is the bank, which unconditionally guarantees to pay the draft at its face
amount on the maturity date. Fixed time deposits are obligations of foreign
branches of United States banks or foreign banks which are payable on a stated
maturity date and bear a fixed rate of interest. Although fixed time deposits do
not have a market, there are no contractual restrictions on the right to
transfer a beneficial interest in the deposit to a third party.

COMMERCIAL PAPER (Prime Fund). Commercial paper includes short-term
unsecured promissory notes, variable rate demand notes and variable rate master
demand notes issued by domestic and foreign bank holding companies,
corporations, financial institutions and government agencies and
instrumentalities (but only in the case of taxable securities). All commercial
paper purchased by the Fund is, at the time of investment, required to be rated
(or issued by an issuer with a similar security rated) in the highest short-term
rating category by two or more Nationally Recognized Statistical Ratings
Organizations ("NRSROs"), or the only NRSRO rating the security, or if unrated,
determined to be of comparable credit quality by the Adviser. Because variable
rate master demand notes are direct lending arrangements between the lender and
the borrower, it is not generally contemplated that they will be traded. There
is no secondary market for variable rate master demand notes, although they are
redeemable, and thus immediately repayable by the borrower, at principal amount,
plus accrued interest, at any time.

CORPORATE DEBT SECURITIES (Prime Fund). Investments in these securities
are limited to non-convertible corporate debt securities such as bonds and
debentures which have thirteen months or less remaining to maturity and which
are rated "A" or better by Standard & Poor's and "A" or better by Moody's and of
comparable high quality ratings by other NRSROs that have rated such securities.

The rating "P-1" is the highest commercial paper rating assigned by
Moody's and the ratings "A-1" and "A-1+" are the highest commercial paper
ratings assigned by Standard & Poor's. Debt securities rated "Aa" or better by
Moody's or "AA" or better by Standard & Poor's are generally regarded as
high-grade obligations. Those rated "Aaa" by Moody's or "AAA" by Standard &
Poor's are judged to be of the highest quality and exhibit an extremely strong
ability to pay interest and repay principal. Those rated "Aa" by Moody's or "AA"
by Standard & Poor's are judged to be of high quality by all standards and
differ from higher rated issues only in a small degree with respect to their
ability to pay interest and repay principal. Those rated "A" by Moody's and
Standard & Poor's possess many favorable attributes and are to be considered as
upper medium grade obligations, although they may be more susceptible to the
adverse effects of changes in circumstances and economic conditions than debt in
higher rated categories.

-2-

<PAGE>

After purchase by the Fund, a security may cease to be rated or its rating
may be reduced below the minimum required for purchase by the Fund. Neither
event will require a sale of such security by the Fund. However, if the security
is downgraded to a level below that permitted for money market funds under Rule
2a-7 of the Investment Company Act of 1940, as amended (the "1940 Act"), the
Fund's adviser must report such event to the Board of Trustees as soon as
possible to permit the Board to reassess the security promptly to determine
whether it may be retained as an eligible investment for the Fund. To the
extent-the ratings given by a NRSRO may change as a result of changes in such
organizations or their rating systems, the Fund will attempt to use comparable
ratings as standards for investments in accordance with the investment policies
contained in the Fund's Prospectus and in this SAI.

LOANS OF PORTFOLIO SECURITIES (Prime Fund). The Fund may lend its
portfolio securities to brokers, dealers and financial institutions, provided:
(1) the loan is secured continuously by collateral consisting of U.S. Government
securities or cash or letters of credit maintained on a daily mark-to-market
basis in an amount at least equal to the current market value of the securities
loaned; (2) the Fund may at any time call the loan and obtain the return of the
securities loaned within five business days; (3) the Fund will receive any
interest or dividends paid on the loaned securities; and (4) the aggregate
market value of securities loaned will not at any time exceed 30% of the total
assets of the Fund.

The Fund will earn income for lending its securities because cash
collateral pursuant to these loans will be invested in short-term money market
instruments. In connection with lending securities, the Fund may pay reasonable
finders, administrative and custodial fees. Loans of securities involve a risk
that the borrower may fail to return the securities or may fail to provide
additional collateral.

MORTGAGE-RELATED SECURITIES. The Government Fund and the Prime Fund may,
consistent with their respective investment objective and policies, invest in
mortgage-related securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities.

Mortgage-related securities, for purposes of the Fund's Prospectus and
this SAI, represent pools of mortgage loans assembled for sale to investors by
various governmental agencies such as the Government National Mortgage
Association and government-related organizations such as the Federal National
Mortgage Association and the Federal Home Loan Mortgage Corporation, as well as
by nongovernmental issuers such as commercial banks, savings and loan
institutions, mortgage bankers, and private mortgage insurance companies.
Although certain mortgage-related securities are guaranteed by a third party or
otherwise similarly secured, the market value of the security, which may
fluctuate, is not so secured. If the Fund purchases a mortgage-related security
at a premium, that portion may be lost if there is a decline in the market value
of the security whether resulting from changes in interest rates or prepayments
in the underlying mortgage collateral. To an even greater extent than other
interest-bearing securities, the prices of such securities may be extremely
sensitive to, and inversely affected by, changes in interest rates. However,
though the value of a mortgage-related security may decline when interest rates
rise, the converse is not necessarily true since in periods of declining
interest rates the mortgages underlying the securities are prone to prepayment.
For this and other reasons, a mortgage-related security's stated maturity may be
shortened by unscheduled prepayments on the underlying mortgages and, therefore,
it is not possible to predict accurately the security's return to the Fund.
Lower than estimated prepayments from an increase in interest rates might alter
the expected average life of such securities and increase volatility. In
addition, regular payments received in respect of mortgage-related securities
include both interest and principal. No assurance can be given as to the return
a Fund will receive when these amounts are reinvested.

There are a number of important differences among the agencies and
instrumentalities of the U.S. Government that issue mortgage-related securities
and among the securities that they issue. Mortgage-related securities created by
the Government National Mortgage Association ("GNMA") include GNMA Mortgage
Pass-Through Certificates (also known as "Ginnie Maes") which are guaranteed as
to the timely payment of principal and interest and such guarantee is backed by
the full faith and credit of the United States. GNMA is a wholly-owned U.S.
Government corporation within the Department of Housing and Urban Development.
GNMA certificates also are supported by the authority of GNMA to borrow funds
from the U.S. Government to make payments under its guarantee. Mortgage-related
securities issued by the Federal National Mortgage Association ("FNMA") include
FNMA Guaranteed Mortgage Pass-Through Certificates (also known as "Fannie

-3-

<PAGE>

Maes") which are solely the obligations of the FNMA and are not backed by or
entitled to the full faith and credit of the United States. The FNMA is a
government-sponsored organization owned entirely by private stockholders. Fannie
Maes are guaranteed as to timely payment of the principal and interest by FNMA.
Mortgage-related securities issued by the Federal Home Loan Mortgage Corporation
("FHLMC") include FHLMC Mortgage Participation Certificates (also known as
("Freddie Macs" or "PCs"). The FHLMC is a corporate instrumentality of the
United States, created pursuant to an Act of Congress, which is owned entirely
by Federal Home Loan Banks. Freddie Macs are not guaranteed by the United States
or by any Federal Home Loan Banks and do not constitute a debt or obligation of
the United States or of any Federal Home Loan Bank. Freddie Macs entitle the
holder to timely payment of interest, which is guaranteed by the FHLMC. The
FHLMC currently guarantees timely payment of interest and either timely payment
of principal or eventual payment of principal, depending upon the date of issue.
When the FHLMC does not guarantee timely payment of principal, FHLMC may remit
the amount due on account of its guarantee of ultimate payment of principal at
any time after default on an underlying mortgage, but in no event later than one
year after it becomes payable.

REPURCHASE AGREEMENTS. Each Fund may invest in securities pursuant to
repurchase agreements, whereby the seller agrees to repurchase such securities
at the Fund's cost plus interest within a specified time (generally one day).
The securities underlying the repurchase agreements will consist exclusively of
U.S. Government obligations in which the Funds are otherwise permitted to
invest. While repurchase agreements involve certain risks not associated with
direct investments in the underlying securities, the Funds will follow
procedures designed to minimize such risks. These procedures include effecting
repurchase transactions only with large, well-capitalized banks and registered
broker-dealers having creditworthiness determined by the Adviser to be
substantially equivalent to that of issuers of debt securities rated investment
grade. In addition, the Funds' repurchase agreements will provide that the value
of the collateral underlying the repurchase agreement will always be at least
equal to the repurchase price, including any accrued interest earned on the
repurchase agreement, and that the Funds' custodian will take possession of such
collateral. In the event of a default or bankruptcy by the seller, the Funds
will seek to liquidate such collateral. However, the exercise of the Funds'
right to liquidate such collateral could involve certain costs or delays and, to
the extent that proceeds from any sale upon a default of the obligation to
repurchase were less than the repurchase price, a Fund could suffer a loss.
Repurchase agreements are considered to be loans by an investment company under
the Investment Company Act of 1940 (the "1940 Act"). There is no limit on the
amount of the Funds' net assets that may be subject to repurchase agreements
having a maturity of, or a liquidation feature permitting termination within a
period of, seven days or less. The Funds do not presently intend to enter into
repurchase agreements which will cause more than 10% of a Fund's net assets to
be subject to repurchase agreements having a maturity beyond seven days.

REVERSE REPURCHASE AGREEMENTS (Prime Fund). The Fund may borrow funds by
selling portfolio securities to financial institutions such as banks and
broker/dealers and agreeing to repurchase them at a mutually specified date and
price ("reverse repurchase agreements"). Reverse repurchase agreements involve
the risk that the market value of the securities sold by the Fund may decline
below the repurchase price. The Fund will pay interest on amounts obtained
pursuant to a reverse repurchase agreement. While reverse repurchase agreements
are outstanding, the Fund will maintain in a segregated account cash, or other
liquid assets (as determined by the Board) of an amount at least equal to the
market value of the securities, plus accrued interest, subject to the agreement.

STRIPPED GOVERNMENT SECURITIES. Stripped securities are created by
separating the income and principal components of a debt instrument and selling
them separately. The Fund may purchase U.S. Treasury STRIPS (Separate Trading of
Registered Interest and Principal of Securities) that are created when the
coupon payments and the principal payment are stripped from an outstanding
Treasury bond by the Federal Reserve Bank. Bonds issued by the Resolution
Funding Corporation (REFCORP) can also be stripped in this fashion. REFCORP
STRIPS are eligible investments for the Fund.

-4-

<PAGE>

generic Treasury Receipts (TRs), are stripped U.S. Treasury securities that are
separated into their component parts through trusts created by their broker
sponsors. Bonds issued by the Financing Corporation (FICO) can also be stripped
in this fashion.

Because of the SEC's views on privately stripped government securities,
the Fund must evaluate them as it would non-government securities pursuant to
regulatory guidelines applicable to all money market funds. Accordingly, the
Fund currently intends to purchase only those privately stripped government
securities that have either received the highest rating from two NRSROs (or one,
if only one has rated the security), or, if unrated, been judged to be of
equivalent quality by GEIM.

VARIABLE AND FLOATING RATE DEMAND OBLIGATIONS (VRDOs/FRDOs) are
obligations that bear variable or floating interest rates and carry rights that
permit holders to demand payment of the unpaid principal balance plus accrued
interest from the issuers or certain financial intermediaries. Floating rate
securities have interest rates that change whenever there is a change in a
designated base rate while variable rate instruments provide for a specified
periodic adjustment in the interest rate. These formulas are designed to result
in a market value for the VRDO or FRDO that approximates its par value.

A demand instrument with a conditional demand feature must have received
both a short-term and a long-term high quality rating, or, if unrated, have been
determined to be of comparable quality pursuant to procedures adopted by the
Trustees. A demand instrument with an unconditional demand feature may be
acquired solely in reliance upon a short-term high quality rating or, if
unrated, upon a finding of comparable short-term quality pursuant to procedures
to be adopted by the Trustees.

The Prime Fund may invest in fixed-rate bonds that are subject to third
party puts and in participation interests in such bonds held by a bank in trust
or otherwise. These bonds and participation interests have tender options or
demand features that permit the Fund to tender (or put) its bonds to an
institution at periodic intervals and to receive the principal amount thereof.
The Fund considers variable rate instruments structured in this way
(Participating VRDOs) to be essentially equivalent to other VRDOs it purchases.

The Prime Fund may invest in variable or floating rate instruments that
ultimately mature in more than 397 days, if the Fund acquires a right to sell
the instruments that meets certain requirements set forth in Rule 2a-7. A
variable rate instrument (including instruments subject to a demand feature)
that matures in 397 days or less may be deemed to have a maturity equal to the
earlier of the period remaining until the next readjustment of the interest rate
or the date on which principal can be recovered on demand. A variable rate
instrument that matures in greater than 397 days but that is subject to a demand
feature that is 397 days or less may be deemed to have a maturity equal to the
longer of the period remaining until the next readjustment of the interest rate
or the period remaining until the principal amount can be recovered through
demand. A floating rate instrument that matures in more than 397 days but that
is subject to a demand feature may be deemed to have a maturity equal to the
period remaining until the principal amount may be recovered through demand. A
floating rate instrument that matures in 397 days or less shall be deemed to
have a maturity of one day.

The Government Fund and the Prime Fund may invest in variable and floating
rate instruments of the U.S. Government, and its agencies and instrumentalities,
with remaining maturities of 397 days or more provided that they are deemed to
have a maturity of less than 397 days as defined in accordance with the rules of
the SEC. A variable rate instrument that matures in 397 days or more may be
deemed to have a maturity equal to the period remaining until the next
readjustment of the interest rate.

WHEN-ISSUED AND DELAYED-DELIVERY SECURITIES (Prime Fund). The Fund may
purchase securities on a when issued or delayed-delivery basis. For example,
delivery of and payment for these securities can take place a month or more
after the date of the transaction. The securities so purchased are subject to
market fluctuation during this period and no income accrues to the Fund until
settlement takes place. To facilitate such acquisitions, the Fund will maintain
with the custodian a separate account with a segregated portfolio of liquid
securities in an amount at least equal to such commitments. On the delivery
dates for such transactions, the Fund will meet its obligations from maturities
or sales of the securities held in the separate account and/or from cash flow.
While the Fund normally enters into these transactions with the intention of
actually

-5-

<PAGE>

receiving or delivering the securities, it may sell these securities before the
settlement date or enter into new commitments to extend the delivery date into
the future, if the Adviser considers such action advisable as a matter of
investment strategy. Such securities have the effect of leverage on a Fund and
may contribute to volatility of the Fund's net asset value.

ZERO COUPON SECURITIES. The Funds may invest in zero coupon securities.
Zero Coupon Bonds purchased by the Fund do not make regular interest payments;
instead they are sold at a deep discount from their face value and are redeemed
at face value when they mature. Because zero coupon bonds do not pay current
income, their prices can be very volatile when interest rates change. In
calculating its daily dividend, the Fund takes into account as income a portion
of the difference between a zero coupon bond's purchase price and its face
value. The market prices of zero coupon securities generally are more volatile
than the market prices of securities that pay interest periodically and are more
sensitive to changes in interest rates than non-zero coupon securities having
similar maturities and credit qualities.

INVESTMENT RESTRICTIONS

The Funds observe the following fundamental investment restrictions which
can be changed only when permitted by law and approved by a majority of a Fund's
outstanding voting securities. A "majority of a Fund's outstanding voting
securities" means the lesser of (i) 67% of the shares represented at a meeting
at which more than 50% of the outstanding shares are represented in person or by
proxies or (ii) more than 50% of the outstanding shares.

The Funds may not:

(1) purchase securities on margin or purchase real estate or interests
therein, commodities or commodity contracts, or make loans, and except that the
Funds may purchase or hold short-term debt securities and enter into repurchase
agreements with respect to its portfolio securities as described in the
Prospectus. For this purpose, repurchase agreements are considered loans;

(2) invest more than 5% of the current value of the total assets of a Fund
in the securities of any one issuer, other than obligations of the United States
Government or its agencies or instrumentalities, and repurchase agreements fully
collateralized by direct obligations of the U.S. Government;

(3) purchase the securities of issuers conducting their principal business
activity in the same industry if, immediately after the purchase and as a result
thereof, the value of the investments of a Fund in that industry would exceed
25% of the current value of the total assets of the Fund, except that there is
no limitation with respect to investments in obligations of the United States
Government, its agencies or instrumentalities and that the Prime Fund may invest
more than 25% of the value of its total assets in securities issued b-y domestic
banks;

(4) engage in the underwriting of securities of other issuers, except to
the extent that a Fund may be deemed to be an underwriter in selling, as part of
an offering registered under the Securities Act of 1933, as amended, securities
which it has acquired; or participate on a joint or joint-and-several basis in
any securities trading account. The "bunching" of orders with other accounts
under the management of the Adviser to save commissions or to average prices
among them is not deemed to result in a securities trading account;

(5) effect a short sale of any security, or issue senior securities except
as permitted in paragraph (6). For purpose of this restriction, the purchase and
sale of financial futures contracts and related options does not constitute the
issuance of a senior security;

(6) issue senior securities or otherwise borrow money, except that each
Fund may borrow from banks as a temporary measure for emergency purposes where
such borrowings would not exceed 10% (33 1/3% for the Prime Fund) of a Fund's
total assets (including the amount borrowed) taken at market value; or pledge,
mortgage or hypothecate its assets, except to secure indebtedness permitted by
this paragraph and then only if

-6-

<PAGE>

such pledging, mortgaging or hypothecating does not exceed 10% (33 1/3% for the
Prime Fund) of the Fund's total assets taken at market value:

(7) invest more than 10% of the total assets of a Fund in the securities
of other investment companies, subject to the limitations of Section 12(d)(1) of
the 1940 Act;

(8) invest in any security, including repurchase agreements maturing in
over seven days without a liquidation feature or other illiquid investments
which are subject to legal or contractual delays on resale or which are not
readily marketable, if as a result more than 10% of the market value of a Fund's
assets would be so invested;

(9) purchase interests in oil, gas, or other mineral exploration programs
of real estate and real estate mortgage loans except as provided in the
Prospectus;

(10) have dealings on behalf of a Fund with Officers and Trustees of the
Fund, except for the purchase or sale of securities on an agency or commission
basis, or make loans to any officers, directors or employees of the Fund; and

(11) purchase equity securities or other securities convertible into equity
securities.

There will be no violation of any investment restriction if that
restriction is complied with at the time the relevant action is taken
notwithstanding a later change in the market value of an investment, in the net
or total assets of a Fund, in the securities rating of the investment, or any
other later change.

MANAGEMENT

TRUSTEES AND OFFICERS

The Trust's Board of Trustees oversees the overall management of the Funds
and elects the officers of the Trust. The principal occupations for the past
five years of the Trustees and executive officers of the Trust are listed below.
The address of each, unless otherwise indicated, is 370 Seventeenth Street,
Suite 3100, Denver, Colorado 80202. Trustees deemed to be "interested persons"
of the Trust for purposes of the Investment Company Act of 1940, as amended, are
indicated by an asterisk. All of the Trustees were elected at a Special Meeting
of shareholders held March 21, 1997. [UPDATE]

NAME (AGE) POSITION(S) HELD WITH FUNDS PRINCIPAL OCCUPATION DURING PAST 5 YEARS**
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
W. Robert Alexander* (71) Trustee, Chairman and Mr. Alexander, a member of the Board of Trustees since
President December 1993, is the Chief Executive Officer of ALPS Mutual
Funds Services, Inc. which provides administration and
distribution services for proprietary mutual fund complexes.
Prior to co-founding ALPS, Mr. Alexander was Vice Chairman of
First Interstate Bank of Denver, responsible for Trust,
Private Banking, Retail Banking, Cash Management Services and
Marketing. Mr. Alexander is currently a member of the Board
of Trustees of the Colorado Trust, Colorado's largest
foundation as well as a Trustee of the Hunter and Hughes
Trusts. Because of his affiliation with ALPS, Mr. Alexander
is considered an "interested" Trustee of Financial Investors
Trust.
</TABLE>

-7-

<PAGE>

<TABLE>
<S> <C> <C>
Mary K. Anstine (58) Trustee President/Chief Executive Officer, HealthONE, Denver, CO;
Former Executive Vice President, First Interstate Bank of
Denver. Ms. Anstine is currently a Director of the Trust Bank
of Colorado, Trustee of the Denver Area Council of the Boy
Scouts of America, a Director of the Junior Achievement Board
and the Colorado Uplift Board, and a member of the Advisory
Boards for the Girl Scouts Mile Hi Council and the Hospice of
Metro Denver. Formerly, Ms. Anstine served as a Director of
ALPS from October 1995 to December 1996; Director of
HealthONE; a member of the American Bankers Association Trust
Executive Committee; and Director of the Center for Dispute
Resolution.

Edwin B. Crowder (68) Trustee Mr. Crowder currently operates a marketing concern with
operations in the U.S. and Latin America. He has previously
engaged in business pursuits in the restaurant, oil and gas
drilling, and real estate development industries. Mr. Crowder
is a former Director of Athletics and head football coach at
the University of Colorado.

Robert E. Lee Trustee Mr. Lee has been a Director of Storage Technology Corporation
since 1989 and of Equitable of Iowa since 1981. Mr. Lee was
the Executive of The Denver Foundation from 1989 to 1996, and
is currently the Executive Director of Emeritus. Mr. Lee is
also a Director of Meredith Capital Corporation and Source
Capital Corporation.

John R. Moran, Jr. (69) Trustee Mr. Moran is President of The Colorado Trust, a private
foundation serving the health and hospital community in the
State of Colorado. An attorney, Mr. Moran was formerly a
partner with the firm of Kutak Rock & Campbell in Denver,
Colorado and a member of the Colorado House of
representatives. Currently, Mr. Moran is a member of the
Board of Directors and Treasurer of Grantmakers in Health; a
Director of the Conference of Southwest Foundations; a member
of the Treasurer's Office Investment Advisory Committee for
the University of Colorado; a Trustee of the Robert J. Kutak
Foundation; Director of the Colorado Wildlife Heritage
Foundation; and a member of the Alumni Council of the
University of Denver College of Law.

H. David Lansdowne (52) Vice President President and CEO of Tempest, Isenhart, Chafee, Lansdowne and
Associates since January 1998. [PROVIDE EMPLOYMENT HISTORY
SINCE 1994.]
</TABLE>

-8-

<PAGE>

<TABLE>
<S> <C> <C>
Robert Alder (57) Vice President Executive Vice President of Tempest, Isenhart, Chafee,
Lansdowne and Associates since January 1998. [PROVIDE
EMPLOYMENT HISTORY SINCE 1994.]

William Paston (43) Vice President and Product Development Manager of ALPS Mutual Funds Services,
Treasurer Inc. since February 1994. Prior to joining ALPS, Mr. Paston
was an associate with Lipper Analytical Services, coordinating
that firm's marketing effort in the banking industry.

Russell C. Burk (40) Secretary Mr. Burk has been General Counsel of ALPS Mutual Funds
Services, Inc., the Administrator and Distributor, since
February 1999. Prior to joining ALPS, Mr. Burk served as
Securities Counsel for Security Life of Denver, A subsidiary
of ING Group. Prior to joining Security Life, Mr. Burk served
as General Counsel for RAF Financial Corporation, member NASD.

Jeremy May (29) Assistant Treasurer Mr. May is Director of Mutual Fund Operations at ALPS Mutual
Funds Services, Inc., the Administrator and Distributor, since
October 1997. Prior to joining ALPS, Mr. May was an auditor
with Deloitte & Touche LLP in their Denver office.
</TABLE>

**Except as otherwise indicated, each individual has held the office shown or
other offices in the same company for the last five years.

Effective after the April 21, 1998 meeting of the Board, non-interested
Trustees of the Trust receive from the Trust an annual fee in the amount of
$4,000 and $500 for attending each Board meeting. Prior to this meeting, the
noninterested Trustees received no annual fee and $1,000 for attending each
Board meeting. The Trustees are reimbursed for all reasonable out-of-pocket
expenses relating to attendance at meetings.

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
PENSION OR AGGREGATE
RETIREMENT ESTIMATED COMPENSATION
AGGREGATE BENEFITS ANNUAL FROM THE TRUST
COMPENSATION ACCRUED AS BENEFITS AND FUND
FROM THE PART OF FUND UPON COMPLEX PAID
TRUST EXPENSES RETIREMENT TO TRUSTEES
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mary K. Anstine,
Trustee $4,000(1) $0 $0 $4,000
- --------------------------------------------------------------------------
Edwin B. Crowder,
Trustee $4,000(1) $0 $0 $4,000
- --------------------------------------------------------------------------
John R. Moran, Jr.
Trustee $4,000(1) $0 $0 $4,000
- --------------------------------------------------------------------------
</TABLE>

(1) Member of the Audit Committee.

As of the date of this Statement of Additional Information the Trustees
and officers of the Trust as a group owned less than 1% of the outstanding
shares of the Trust. [CONFIRM.]

-9-

<PAGE>

INVESTMENT ADVISER. The Trust retains GE Investment Management
Incorporated, (the "Adviser") as investment adviser for each Fund. GEIM is a
wholly owned subsidiary of General Electric Company ("GE").

Through GEIM and General Electric Investment Corporation ("GEIC"), an
affiliated company of GEIM, wholly owned by GE, and their predecessors, GE has
more than 70 years of investment management experience. GEIM and GEIC
collectively provide investment management services to various institutional
accounts with total assets as of March 31, 1999 in excess of $______ billion, of
which more than $_____ billion was invested in mutual funds.

Each Advisory Contract provides that the Adviser will manage the portfolio
of each Fund and will furnish to each Fund investment guidance and policy
direction in connection therewith. The Adviser has agreed to provide to the
Trust, among other things, information relating to money market portfolio
composition, credit conditions and average maturity of the portfolio of each
Fund. Pursuant to each Advisory Contract, the Adviser also furnishes to the
Trust's Board of Trustees periodic reports on the investment performance of the
Funds.

SPONSOR AND DISTRIBUTOR. Shares of the Funds are offered on a continuous
basis through ALPS Mutual Funds Services, Inc., 370 17th Street, Suite 3100,
Denver, CO 80202 ("ALPS"), the Distributor, pursuant to the Distribution
Contract. The Distributor is not obligated to sell any specific amount of
shares.

ADMINISTRATOR. Pursuant to the Administrative Services Contract, ALPS: (i)
provides administrative services reasonably necessary for the operation of the
Funds (other than those services which are provided by the Adviser pursuant to
each Advisory Contract); (ii) provides the Funds with office space and office
facilities reasonably necessary for the operation of the Funds; and (iii)
employs or associates with itself such persons as it believes appropriate to
assist it in performing its obligations under the Administrative Services
Contract. ALPS also serves as the Funds' transfer agent, and as their
Bookkeeping and Pricing Agent.

FEES AND EXPENSES

As compensation for advisory, management and administrative services, the
Adviser and ALPS (the "Administrator") are paid a monthly fee at the following
annual rates:
<TABLE>
<CAPTION>

TREASURY FUND:

PORTION OF AVERAGE DAILY ADVISORY ADMINISTRATIVE(1) TOTAL
VALUE OF NET ASSETS OF THE
FUND
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
Not exceeding $500 million 0.05% 0.26% 0.31%
- ---------------------------------------------------------------------------
In excess of $500 million 0.075% 0.24% 0.315%
but not exceeding $1 billion
- ---------------------------------------------------------------------------
In excess of $1 billion but 0.10% 0.22% 0.32%
not exceeding $1.5 billion
- ---------------------------------------------------------------------------
In excess of $1.5 billion 0.15% 0.22% 0.37%
- ---------------------------------------------------------------------------
<CAPTION>

GOVERNMENT AND PRIME FUNDS:

PORTION OF AVERAGE DAILY ADVISORY ADMINISTRATIVE(1) TOTAL
VALUE OF NET ASSETS OF THE
FUND
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
Not exceeding $500 million 0.04% 0.16% 0.20%
- ---------------------------------------------------------------------------
In excess of $500 million 0.06% 0.14% 0.20%
but not exceeding $1 billion
- ---------------------------------------------------------------------------
In excess of $1 billion 0.08% 0.12% 0.20%
- ---------------------------------------------------------------------------
</TABLE>

(1) Subject to a minimum monthly fee of $50,000 for the Treasury Fund and
$30,000 for the Government and Prime Funds.

-10-

<PAGE>

At a meeting held on January 20, 1997, the Trustees approved new Advisory
Contracts with the Adviser on behalf of the Treasury and Government Funds. The
new Advisory Contracts were submitted to shareholders of each respective Fund
for their consideration pursuant to a Proxy Statement dated March 3, 1997, and
subsequently approved by a majority of the shareholders of each respective Fund
at a Special Meeting held on March 21, 1997. Effective March 24, 1997, the
Adviser assumed the role of Adviser to each Fund. During the period March 24,
1997 through April 30, 1997, the Adviser earned $8,799 and $3,542 in advisory
fees from the Treasury and Government Funds, respectively. During the fiscal
year ended April 30, 1998, the Adviser earned $78,117 and $52,818 in advisory
fees from the Treasury and Government Funds, respectively. During the fiscal
year ended April 30, 1999, the Adviser earned $66,847, $82,280 and $10,306 in
advisory fees from the Treasury, Government and Prime Funds, respectively.

From the inception of each Fund through March 23, 1997, FGIC Advisors,
Inc. ("FGIC") served as the Investment Adviser to the Treasury and Government
Funds. During the period May 1, 1996 to March 23, 1997, FGIC earned the
following advisory fees (the Prime Fund had not commenced operations as of March
23, 1997):
<TABLE>
<CAPTION>

- --------------------------------------------------
U.S. TREASURY MONEY MARKET FUND
- --------------------------------------------------
<S> <C>
Advisory fees earned $739,988
- --------------------------------------------------
Advisory fees waived $(739,988)
- --------------------------------------------------
U.S. GOVERNMENT MONEY MARKET FUND
- --------------------------------------------------
Advisory fees earned $110,066
- --------------------------------------------------
Advisory fees waived $(110,066)
- --------------------------------------------------
</TABLE>

The Administrative fees earned by the Administrator under the
Administrative Services Agreement for the last three fiscal periods were as
follows (the Prime Fund commenced operations on December 10, 1998):

FISCAL PERIOD ENDED APRIL 30,
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
U.S. TREASURY MONEY MARKET
FUND
- ---------------------------------------------------------------------------
Administrative fees earned $142,027 $665,343 $750,000
- ---------------------------------------------------------------------------
Administrative fees waived $(118,340) $(349,614) $(75,890)
- ---------------------------------------------------------------------------
U.S. GOVERNMENT MONEY
MARKET FUND
- ---------------------------------------------------------------------------
Administrative fees earned $367,491 $294,083 $92,781
- ---------------------------------------------------------------------------
Administrative fees waived $(88,651) $(143,513) $(3,949)
- ---------------------------------------------------------------------------
PRIME MONEY MARKET FUND
CLASS I
- ---------------------------------------------------------------------------
Administrative fees earned $142,027
- ---------------------------------------------------------------------------
Administrative fees waived $(118,340)
- ---------------------------------------------------------------------------
</TABLE>

The Administrator has stated that it will voluntarily waive a portion of
the administrative fees otherwise payable by each Fund, as well as voluntarily
assume a portion of each Fund's expenses, to the extent necessary to maintain a
total expense ratio of not more than .33%, .20%, .20% and .45% of the average
net assets of the Treasury Fund, Government Fund, Prime Fund Class I and Prime
Fund Class II, respectively. The Administrator reserves the right to modify or
terminate the fee waiver and assumption of expenses at any time.

Except for the expenses paid by the Adviser under the Advisory Contract
and the Administrator under the Administrative Services Contract, each Fund
bears all costs of its operations. Expenses attributable to the Funds are
charged against the assets of each Fund, respectively.

The Advisory Contract, Distribution Contract and Administrative Services
Contract will continue in effect with respect to each Fund from year to year
provided such continuance is approved annually (i) by the

-11-

<PAGE>

holders of a majority of the outstanding voting securities of a Fund or by the
Trust's Trustees; and (ii) by a majority of the Trustees who are not parties to
such contracts or "interested persons" (as defined under the 1940 Act) of any
such party. Each contract may be terminated with respect to a Fund at any time,
without payment of any penalty, by a vote of a majority of the outstanding
voting securities of the Fund (as defined in the Investment Company Act of 1940)
or by a vote of a majority of the Trustees. The Advisory Contract,
Administrative Services Contract and the Distribution Contract shall terminate
automatically in the event of their assignment (as defined in the 1940 Act).

The Trust incurs administration expenses based on the terms of the
Administrative Services Agreement. In the absence of certain fee waivers and
reimbursements, administration fees borne by the Funds might not be in
proportion to relative Fund assets.

CALCULATION OF YIELDS AND PERFORMANCE INFORMATION

From time to time, each class of the Fund may quote its "yield" and "total
return" in advertisements or in communications to shareholders. BOTH PERFORMANCE
FIGURES ARE BASED ON HISTORICAL EARNINGS AND ARE NOT INTENDED TO INDICATE FUTURE
PERFORMANCE.

Current yield (or "SEC Seven Day Yield") for each Fund will be based on
the change in the value of a hypothetical investment (exclusive of capital
changes) over a particular 7-day period, less a pro-rata share of a Fund's
expenses accrued over that period (the "base period"), and stated as a
percentage of the investment at the start of the base period (the "base
period return"). The base period return is then annualized by multiplying by
365/7, with the resulting yield figure carried to at least the nearest
hundredth of one percent. "Effective yield" for the Funds assumes that all
dividends received during an annual period have been reinvested. Calculation
of "effective yield" begins with the same "base period return" used in the
calculation of yield, which is then annualized to reflect weekly compounding
pursuant to the following formula: Effective Yield = [(Base Period Return + 1)
TO THE POWER OF 365/7] - 1. The "effective yield" will be slightly higher than
the "yield" because of the compounding effect of the assumed reinvestment.

As of April 30, 1999, the Seven Day Effective Yield and the SEC Seven Day
Yield for the Treasury Fund was _____% and _____%, respectively. As of April 30,
1999, the Seven Day Effective Yield and the SEC Seven Day Yield for the
Government Fund was _____% and _____%, respectively.

Each Fund may, from time to time, include its average annual total returns
in advertisements or reports to shareholders or prospective investors.

Quotations of average annual total return will be expressed in terms of
the average annual compounded rate of return of a hypothetical investment in the
Fund over periods of 1, 5 and -10 years (up to the life of the Fund), calculated
pursuant to the following formulas:

n
P(l+T) = ERV

1/n
T = [C (ERV) -1]
P

All total return figures will reflect a proportional share of Fund
expenses (net of certain reimbursed expenses) on an annual basis, and will
assume that all dividends and distributions are reinvested when paid. Quotations
of total return will reflect only the performance of a hypothetical investment
in the Funds during the particular time period shown. Total return for the Fund
will vary based on changes in the market conditions and the level of a Fund's
expenses, and no reported performance figure should be considered an indication
of performance, which may be expected in the future.

-12-

<PAGE>

The yield and total return for each Class of the Prime Fund are calculated
separately due to separate expense structures. The yield and total return of
Class II will be lower than that of Class I.

In connection with communicating its total return to current or
prospective shareholders, each Fund also may compare these figures to the
performance of other mutual funds tracked by mutual fund rating or ranking
services or to other unmanaged indices which may assume reinvestment of
dividends but generally do not reflect deductions for administrative and
management costs. For example, the Fund's yields may be compared to the
IBC/DONOGHUE'S MONEY FUND AVERAGE, which is an average compiled by
IBC/DONOGHUE'S MONEY FUND REPORT. In addition, yields may be compared to the
average yields reported by the Bank Rate Monitor for money market deposit
accounts offered by the 50 leading banks and thrift institutions in the top five
standard metropolitan statistical areas.

Since yields fluctuate, you cannot necessarily use yield data to compare
an investment in the Fund's shares with bank deposits, savings accounts and
similar investment alternatives which often provide an agreed or guaranteed
fixed yield for a stated period of time. Yield is generally a function of the
kind and quality of the instruments held in a portfolio, portfolio maturity,
operating expenses and market conditions. Any fees charged by service
institutions directly to their customer accounts in connection with investments
in shares of the Fund will not be included in the Fund's calculations of yield
or total return.

From time to time, in marketing pieces and other Fund literature, the
Funds' total performance may be compared to the performance of broad groups of
comparable funds or unmanaged indices of comparable securities. Evaluations of
Fund performance made by independent sources may also be used in advertisements
concerning the Funds. Sources for Fund performance information may include, but
are not limited to, the following:

Barron's, a Dow Jones and Company, Inc. business and financial weekly that
periodically reviews mutual fund performance data.

Business Week, a national business weekly that periodically reports the
performance rankings and ratings of a variety of mutual funds investing abroad.

Changing Times, The Kiplinger Magazine, a monthly investment advisory
publication that periodically features the performance of a variety of
securities.

Donoghue's Money Fund Report, a weekly publication of the Donoghue Organization,
Inc., of Holliston, Massachusetts, reporting on the performance of the nation's
money market funds, summarizing money market fund activity, and including
certain averages as performance benchmarks, specifically "Donoghue's Money Fund
Average," and "Donoghue's Government Money Fund Average."

Financial Times, Europe's business newspaper, which features from time to time
articles on international or country-specific funds.

Forbes, a national business publication that from time to time reports the
performance of specific investment companies in the mutual fund industry.

Fortune, a national business publication that periodically rates the performance
of a variety of mutual funds.

Global Investor, a European publication that periodically reviews the
performance of U.S. mutual funds investing internationally.

Lipper Analytical Services, Inc.'s Mutual Fund Performance Analysis, a weekly
publication of industry-wide mutual fund averages by type of fund.

Money, a monthly magazine that from time to time features both specific funds
and the mutual fund industry as a whole.

-13-

<PAGE>

New York Times, a nationally distributed newspaper which regularly covers
financial news.

Personal Investor, a monthly investment advisory publication that includes a
"Mutual Funds Outlook" section reporting on mutual fund performance measures,
yields, indices and portfolio holdings.

Sylvia Porter's Personal Finance, a monthly magazine focusing on personal money
management that periodically rates and ranks mutual funds by performance. Wall
Street Journal, a Dow Jones and Company, Inc. newspaper which regularly covers
financial news.

Wall Street Journal, a Dow Jones and Company, Inc. newspaper which regularly
covers financial news.

Wiesenberger Investment Companies Services, an annual compendium of information
about mutual funds and other investment companies, including comparative data on
funds' backgrounds, management policies, salient features, management results,
income and dividend records, and price ranges.

FUND RATINGS. Although it is not an investment objective of the Funds,
consistent with the Funds' investment objectives and restrictions, each Fund may
seek and receive the highest rating from certain nationally recognized
statistical rating organizations (NRSROs), for example, "AAAm" from Standard &
Poor's Ratings Group, a Division of McGraw Hill, Inc., or "AAA/V-1+" from Fitch
Investor Services, Inc. An NRSRO rating is subject to change and neither insures
nor guarantees that the Fund will pay interest or repay principal. NRSRO ratings
represent the opinion of the NRSRO based on the investment adviser, quality of
the Fund's portfolio holdings, and other criteria. If an NRSRO rating is
obtained, the Fund may use the information in advertising or reports to
shareholders or prospective investors.

DETERMINATION OF NET ASSET VALUE

The value of the Fund's shares is referred to as "net asset value." The
Funds' net asset value per share for purposes of pricing purchases and
redemptions is determined by dividing the total current market value of the
assets of a Fund, less liabilities, by the total number of shares outstanding at
the time of determination. For the Prime Fund, calculations are performed
separately for each Class, according to each Class' proportion of assets and
liabilities. Within each Class, the expenses are allocated proportionately based
on the net assets of each Class, except class-specific expenses which are
allocated directly to the respective Class. All expenses, including the advisory
and administrative fees, are accrued daily and taken into account for the
purpose of determining the net asset value.

The Board of Trustees has established procedures designed to maintain a
stable net asset value of $1.00 per share, to the extent reasonably possible.
The Board of Trustees has approved and adopted procedures under Rule 2a-7 under
the Investment Company Act of 1940, as amended, which was enacted by the SEC
with the intent of stabilizing money market funds at $1.00 per share. Under the
guidelines of Rule 2a-7, the Fund uses the amortized cost method to value its
portfolio securities. The amortized cost method involves valuing a security at
its cost and amortizing any discount or premium over the period of maturity,
regardless of the impact of fluctuating interest rates on the market value of
the security. Rule 2a-7 also provides that the Fund must also do a
"mark-to-market" analysis, where it is determined the degree to which any
variations may exist between the amortized pricing method and the actual market
price of the securities in the Fund. In the event the Board determines that a
deviation exists which may result in material dilution or other unfair results
to investors or existing shareholders, the Board will take such corrective
action as it regards as necessary and appropriate, including the sale of
portfolio instruments prior to maturity to realize capital gains or losses or to
shorten average portfolio maturity.

While the amortized cost method provides certainty in valuation, it may
result in periods during which the value, as determined by amortized cost, is
higher or lower than the price which the Fund would receive if the security were
sold. During these periods the yield to a shareholder may differ somewhat from
that which could be obtained from a similar fund which utilizes a method of
valuation based upon market prices. Thus, during periods of declining interest
rates, if the use of the amortized cost method resulted in a lower value of the
Fund's portfolio on a particular day, a prospective investor in the Fund would
be able to obtain a somewhat higher yield than would result from an investment
in a fund utilizing solely market values, and existing Fund

-14-

<PAGE>

shareholders would receive correspondingly less income. The converse would apply
during periods of rising interest rates.

Rule 2a-7 provides that in order to value its portfolio using the amortized
cost method, the Funds must maintain a dollar-weighted average portfolio
maturity of 90 days or less, purchase securities having remaining maturities of
thirteen months or less and invest only in securities determined by the Trust's
Board of Trustees to be "eligible securities" as defined by Rule 2a-7 and to
present minimal credit risks. Pursuant to Rule 2a-7, the Board is required to
establish procedures designed to stabilize, to the extent reasonably possible,
the price per share of the Funds, as computed for the purpose of sales and
redemptions, at $1.00. Such procedures include review of the Funds' portfolio
holdings by the Board of Trustees or its delegate, at monthly and at regularly
scheduled quarterly Board of Trustees meetings, to determine whether the net
asset value of the Fund calculated by using available market quotations deviates
from $1.00 per share based on amortized cost. The extent of any deviation will
be examined by the Board of Trustees. If such deviation exceeds 1/2 of 1%, the
Board will promptly consider what action, if any, will be initiated. In the
event the Board determines that a deviation exists which may result in material
dilution or other unfair results to investors or existing shareholders, the
Board will take such corrective action as it regards as necessary and
appropriate, including the sale of portfolio instruments prior to maturity to
realize capital gains or losses or to shorten average portfolio maturity,
withholding dividends or establishing a net asset value per share by using
available market quotations. There can be no assurance that at all times the
$1.00 price per share can be maintained.

Net asset value is determined as of 5:00 p.m. Eastern Time on each day the
New York Federal Reserve and the New York Stock Exchange are open for business
and as of 12:00 noon Eastern Time on any day the Public Securities Association
("PSA") recommends an early close (each such day referred to as a "Half Day").
Currently, either the New York Federal Reserve or the New York Stock Exchange is
closed on New Years Day, Martin Luther King Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans' Day,
Thanksgiving Day and Christmas Day. An early close is currently recommended by
the PSA on the Business Day before each day that either the New York Federal
Reserve or the New York Stock Exchange observes a holiday, except for Good
Friday. Additionally, the PSA recommends an early close on the Business Day
following Independence Day and Thanksgiving Day. A "Business Day" is any day on
which the New York Federal Reserve and the New York Stock Exchange are open for
business.

PORTFOLIO TRANSACTIONS

The Trust has no obligation to deal with any dealer or group of dealers in
the execution of transactions in portfolio securities. Subject to policy
established by the Trustees, the Adviser is primarily responsible for portfolio
decisions and the placing of portfolio transactions. In placing orders, it is
the policy of the Fund to obtain the best results taking into account the
dealer's general execution and operational facilities, the type of transaction
involved and other factors such as the dealer's risk in positioning the
securities involved. While the Adviser generally seeks reasonably competitive
spreads or commissions, the Funds will not necessarily be paying the lowest
spread or commission available.

Purchases and sales of securities will often be principal transactions in
the case of debt securities traded otherwise than on an exchange. Debt
securities normally will be purchased or sold from or to issuers directly or to
dealers serving as market makers for the securities at a net price. Generally,
money market securities are traded on a net basis and do not involve brokerage
commissions. Under the 1940 Act, persons affiliated with the Adviser, the Funds
or the Distributor are prohibited from dealing with the Funds as a principal in
the purchase and sale of securities except in accordance with regulations
adopted by the Securities and Exchange Commission. Under the 1940 Act, persons
affiliated with the Adviser, the Funds or the Distributor may act as a broker
for the Funds. In order for such persons to effect any portfolio transactions
for the Funds, the commissions, fees or other remuneration received by such
persons must be reasonable and fair compared to the commissions, fees or other
remunerations paid to other brokers in connection with comparable transactions
involving similar securities being purchased or sold on an exchange during a
comparable period of time. This standard would allow the affiliate to receive no
more than the remuneration which would be expected to be

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<PAGE>

received by an unaffiliated broker in a commensurate arms-length transaction.
The Trustees of the Trust will regularly review the commissions paid by the
Funds to affiliated brokers.

[INSERT INFORMATION]

EXCHANGE PRIVILEGE

Shareholders who have held all or part of their shares in one of the Funds
for at least seven days may exchange those shares for shares of the other Fund
if such Fund is available for sale in their state and meets the investment
criteria of the investor.

Before effecting an exchange, shareholders should review the Prospectus of
the other Fund. Exercise of the exchange privilege is treated as a redemption
for income tax purposes and, depending on the circumstances, a gain or loss may
be recognized.

The exchange privilege may be modified or terminated upon sixty (60) days'
written notice to shareholders. Although initially there will be no limit on the
number of times a shareholder may exercise the exchange privilege, the Funds
reserve the right to impose such a limitation. Call or write the Funds for
further details.

REDEMPTIONS

In the event that a Fund does not maintain a constant net asset value per
share, the proceeds of a redemption may be more or less than the amount invested
and, therefore, a redemption may result in a gain or loss for Federal and state
and local income tax purposes. Any loss realized on the redemption of Fund
shares held, or treated as held, for six months or less will be treated as a
long-term capital loss to the extent of any long-term capital gain dividends
received on the redeemed shares.

A shareholder's account with the Funds remains open for at least one year
following complete redemption and all costs during the period will be borne by
the Funds. This permits an investor to resume investments in the Fund during the
period in an amount of $25,000 or more.

To be in a position to eliminate excessive shareholder expense burdens,
the Funds reserve the right to adopt a policy pursuant to which a Fund may
redeem, upon not less than 30 days' notice, shares of the Fund in an account
which has a value below the designated amount set forth in each Fund's
prospectus. However, any shareholder affected by the exercise of this right will
be allowed to make additional investments prior to the date fixed for redemption
to avoid liquidation of the account. Shareholder accounts which have a value
below the designated amount due to changes in the market value in portfolio
securities will not be redeemed.

The Funds may suspend the right of redemption during any period when (i)
trading on the New York Stock Exchange is restricted or that Exchange is closed,
other than customary weekend and holiday closings, (ii) the Securities and
Exchange Commission has by order permitted such suspension or (iii) an emergency
exists making disposal of portfolio securities or determination of the value of
the net assets of the Fund not reasonably practicable.

Although it would not normally do so, the Trust has the right to pay the
redemption price in whole or in part in securities of a Fund's portfolio as
prescribed by the Trustees. When a shareholder sells portfolio securities
received in this fashion he would incur a brokerage charge. The Trust has,
however, elected to be governed by Rule 18f-1 under the 1940 Act, as amended.
Under that rule, the Trust must redeem its shares for cash except to the extent
that the redemption payments to any shareholder during any 90-day period would
exceed the lesser of $250,000 or 1% of a Fund's net asset value at the beginning
of such period.

FEDERAL INCOME TAXES

The Treasury Fund and the Government Fund have each elected to be treated
as a regulated investment company and qualified as such in 1997. The Prime Fund
will elect to be treated as a regulated investment

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<PAGE>

company and intends to qualify as such. The Funds intend to continue to so
qualify by complying with the provisions of the Internal Revenue Code of 1986,
as amended (the "Code") applicable to regulated investment companies so that the
Funds will not be liable for Federal income tax with respect to amounts
distributed to shareholders in accordance with the timing requirements of the
Code.

In order to qualify as a regulated investment company for a taxable year,
each Fund must, among other things, (a) derive at least 90% of its gross income
from dividends, interest, payments with respect to securities loans and gains
from the sale or other disposition of stock or securities or foreign currency
gains related to investments in stock or securities or other income (including
but not limited to gains from options, futures or forward contracts) derived
with respect to its business of investing in stock, securities or currency; (b)
diversify its holdings so that, at the end of each quarter of its taxable year,
(i) at least 50% of the market value of the Fund's assets is represented by
cash, cash items, U.S. Government securities, securities of other regulated
investment companies and certain other securities in respect of any one issuer
to an amount not greater in value than 5% of its assets and 10% of the
outstanding voting securities of the issuer, and (ii) not more than 25% of the
value of its total assets is invested in the securities of any one issuer (other
than U.S. Government securities or securities of other regulated investment
companies). As such, and by complying with the applicable provisions of the
Code, the Funds will not be subject to Federal income tax on taxable income
(including realized capital gains) which is distributed to shareholders in
accordance with the timing requirements of the Code.

The amount of capital gains, if any, realized in any given year will
result from sales of securities made with a view to the maintenance of a
portfolio believed by Fund management to be most likely to attain a Fund's
investment objective. Such sales and any resulting gains or losses, may
therefore vary considerably from year to year. Since at the time of an
investor's purchase of shares, a portion of the per share net asset value by
which the purchase price is determined may be represented by realized or
unrealized appreciation in a Fund's portfolio or undistributed income of the
Fund, subsequent distributions (or portions thereof) on such shares may be
taxable to such investor even if the net asset value of his shares is, as a
result of the distributions, reduced below his cost for such shares and the
distributions (or portions thereof) represent a return of a portion of his
investment.

The Funds are required to report to the Internal Revenue Service (the
"IRS") all distributions of taxable dividends and of capital gains, as well as
the gross proceeds of share redemptions. The Funds may be required to withhold
Federal income tax at a rate of 31% ("backup withholding") from taxable
dividends (including capital gain dividends) and the proceeds of redemptions of
shares paid to non-corporate shareholders who have not furnished the Fund with a
correct taxpayer identification number and made certain required certifications
or who have been notified by the IRS that they are subject to backup
withholding. The Funds may also be required to withhold Federal income tax at a
rate of 31% if they are notified by the IRS or a broker that the taxpayer
identification number is incorrect or that backup withholding applies because of
underreporting of interest or dividend income.

Distributions of taxable net investment income and net realized capital
gains will be taxable whether made in shares or in cash. In determining amounts
of net realized capital gains to be distributed, any capital loss carryovers
from prior years will be applied against realized capital gains. Shareholders
receiving distributions in the form of additional shares will have a cost basis
for Federal income tax purposes in each share so received equal to the net asset
value of a share of the Fund on the reinvestment date. Fund distributions will
also be included in individual and corporate shareholders' income on which the
alternative minimum tax may be imposed.

Any loss realized upon the redemption of shares held (or treated as held)
for six months or less will be treated as a long-term capital loss to the extent
of any long-term capital gain dividend received on the redeemed shares. Any loss
realized upon the redemption of shares within six months after receipt of an
exempt-interest dividend will be disallowed. All or a portion of a loss realized
upon the redemption of shares may be disallowed to the extent shares are
purchased (including shares acquired by means of reinvested dividends) within 30
days before or after such redemption. Exchanges are treated as redemptions for
Federal tax purposes.

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<PAGE>

Different tax treatment is accorded to accounts maintained as IRAs,
including a penalty on early distributions. Shareholders should consult their
tax advisers for MORE information.

Each Fund will be separate for investment and accounting purposes and will
be treated as a separate taxable entity for Federal income tax purposes.

Each Fund is subject to a 4% nondeductible excise tax to the extent that
it fails to distribute to its shareholders during each calendar year an amount
equal to (a) at least 98% of its ordinary income (excluding any capital gain or
losses) for the calendar year; plus (b) at least 98% of the excess of its
capital gains over capital losses (adjusted for ordinary losses) for the one
year period ending on October 31 of such calendar year; plus (c) any ordinary
income or capital gain net income (adjusted for certain ordinary losses) from
the preceding calendar years which was neither distributed to shareholders nor
taxed to the Fund during such year. The Funds intend to distribute to
shareholders each year an amount sufficient to avoid the imposition of such
excise tax.

It is important to note that for tax years beginning after August 5, 1997,
the Taxpayer Relief Act of 1997 repealed Section 851(b)(3) which required that a
RIC must derive less than 30 percent of its gross income from the sales or
disposition of stocks or securities held for less than three months.

SHARES OF BENEFICIAL INTEREST

The Trust consists of multiple separate portfolios or Funds. When certain
matters affect one Fund but not another, the shareholders would vote as a Fund
regarding such matters. Subject to the foregoing, on any matter submitted to a
vote of shareholders, all shares then entitled to vote will be voted separately
by the Fund unless otherwise required by the 1940 Act, in which case all shares
will be voted in the aggregate. For example, a change in a Fund's fundamental
investment policies would be voted upon only by shareholders of the Fund.
Additionally, approval of the Advisory Contract is a matter to be determined
separately by each Fund. Approval by the shareholders of one Fund is effective
as to that Fund whether or not sufficient votes are received from the
shareholders of the other Fund to approve the proposal as to that Fund. As used
in the Prospectuses and in this Statement of Additional Information, the term
"majority," when referring to approvals to be obtained from shareholders of a
Fund means the vote of the lesser of (i) 67% of the shares of the Fund or class
represented at a meeting if the holder of more than 50% of the outstanding
shares of the Fund or class are present in person or by proxy, or (ii) more than
50% of the outstanding shares of the Fund. The term "majority," when referring
to the approvals to be obtained from shareholders of the Trust as a whole means
the vote of the lesser of (i) 67% of the Trust's shares represented at a meeting
if the holders of more than 50% of the Trust's outstanding shares are present in
person or proxy, or (ii) more than 50% of the Trust's outstanding shares.
Shareholders are entitled to one vote for each full share held and fractional
votes for fractional shares held.

The Trust is not required to hold regular annual meetings of the Fund's
shareholders and does not intend to do so. However, the Trust undertakes to hold
a special meeting of its shareholders if the purpose of voting on the question
of removal of a director or trustees is requested in writing by the holders of
at least 10% of the Trust's outstanding voting securities, and to assist in
communicating with other shareholders as required by Section 16(c) of the 1940
Act. The Trust Instrument provides that the holders of not less than two-thirds
of the outstanding shares of the Trust may remove a person serving as Trustee
either by declaration in writing or at a meeting called for such purpose.

Each share of a Fund represents an equal proportional interest in the Fund
with each other share and is entitled to such dividends and distributions out of
the income earned on the assets belonging to the Fund as are declared in the
discretion of the Trustees. In the event of the liquidation or dissolution of
the Trust, shareholders of each Fund are entitled to receive the assets
attributable to such Fund that are available for distribution, and a
distribution of any general assets of the Trust not attributable to a particular
Fund that are available for distribution in such manner and on such basis as the
Trustees in their sole discretion may determine.

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<PAGE>

Shareholders are not entitled to any preemptive rights. All shares, when
issued, will be fully paid and nonassessable by the Trust.

As of __________, 1999, the following shareholders owned 5% or more of the
outstanding shares of the Funds as listed below:

[TO BE UPDATED BY AMENDMENT]
<TABLE>
<CAPTION>

FUND PERCENTAGE INTEREST
- ------------------------------------------------------------------
<S> <C>
U.S. TREASURY MONEY MARKET FUND
City of Cranston 15.55%
869 Park Avenue
Cranston, RI 02910

City of Bridgeport 11.63%
Attn: Sharon D. Lemdon
45 Lyons Terrace
Bridgeport, CT 06604

Union Labor Life Insurance Co. 9.69%
111 Massachusetts Avenue, N.W.
Washington, DC 20001

Metropolitan District 7.88%
555 Main Street
P.O. Box 800
Hartford CT 06142-0800

Riverside County Transportation Commission 5.64%
3560 University Place
Riverside, CA 92501

U.S. GOVERNMENT MONEY MARKET FUND

Diplomat Properties LTD Partnership 22.95%
901 Massachusetts Avenue, N.W.
Washington, DC 20001

City of Hartford 11.42%
City Treasurer's Office
Denise Nappier
550 Main Street
Hartford. CT 06103

City of Quincy 8.81%
1305 Hancock Street
Quincy, MA 02169

County of Rock Island 7.71%
1504 Third Avenue
Rock Island, IL 61201-8684
</TABLE>

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<PAGE>

DISTRIBUTION PLAN

The Trustees of the Trust have adopted a Distribution Plan on behalf of
Class II of the Prime Fund (the "Plan") pursuant to Rule 12b-1 (the "Rule")
under the 1940 Act. The Rule provides in substance that a mutual fund may not
engage directly or indirectly in financing any activity that is intended
primarily to result in the sale of shares of the fund except pursuant to a plan
adopted by the fund under the Rule. The Trustees have adopted the Plan to allow
the Prime Fund and ALPS to incur distribution expenses. The Plan provides for
payment of a distribution fee (12b-1 fee) of up to 0.25% of the average net
assets of Class II of the Prime Fund (these fees are in addition to the fees
paid to ALPS under the Administration Agreement). The Trust or ALPS, on behalf
of Class II of the Prime Fund, may enter into servicing agreements (Service
Agreements) with banks, broker/dealers or other institutions (Agency
Institutions). The Plan provides that ALPS may use its fees and other resources
to make payments to Agency Institutions for performance of distribution-related
services, including those enumerated below. The Service Agreements further
provide for compensation to broker/dealers for their efforts to sell Class II
shares of the Prime Fund. The distribution-related services include, but are not
limited to, the following: formulation and implementation of marketing and
promotional activities, such as mail promotions and television, radio,
newspaper, magazine and other mass media advertising; preparation, printing and
distribution of sales literature; preparation, printing and distribution of
prospectuses of the Prime Fund and reports to recipients other than existing
shareholders of the Prime Fund; obtaining such information, analyses and reports
with respect to marketing and promotional activities as ALPS may, from time to
time, deem advisable; making payments to securities dealers and others engaged
in the sales of Class II Shares of the Prime Fund; and providing training,
marketing and support to such dealers and others with respect to the sale of
Class II Shares of the Prime Fund. The Plan recognizes ALPS may use its fees and
other resources to pay expenses associated with the promotion and administration
of activities primarily intended to result in the sale of shares.

The Plan has been approved by the Trustees, including the majority of
disinterested Trustees. As required by the Rule, the Trustees carefully
considered all pertinent factors relating to the implementation of the Plan
prior to its approval, and have determined that there is a reasonable likelihood
that the Plan will benefit the Prime Fund and its shareholders. To the extent
that the Plan gives ALPS greater flexibility in connection with the distribution
of shares of the class, additional sales of shares may result.

The Plan could be construed as compensation because ALPS is paid a fixed
fee and is given discretion concerning what expenses are payable under the Plan.
ALPS may spend more for marketing and distribution than it receives in fees and
reimbursements from the Prime Fund. However, to the extent fees received exceed
expenses, including indirect expenses such as overhead, ALPS could be said to
have received a profit. For example, if ALPS pays $1 for distribution-related
expenses for Class II of the Prime Fund and receives $2 under the Plan, the $1
difference could be said to be a profit for ALPS. (Because ALPS is reimbursed
for its out-of-pocket direct promotional expenses, the Plan also could be
construed as a reimbursement plan. Until the issue is resolved by the SEC,
unreimbursed expenses incurred in one year will not be carried over to a
subsequent year.) If after payment by ALPS for marketing and distribution there
are any remaining fees attributable to the Plan, these may be used as ALPS may
elect. Since the amount payable under the Plan will be commingled with ALPS'
general funds, including the revenues it receives in the conduct of its
business, it is possible that certain of ALPS' overhead expenses will be paid
out of Plan fees and that these expenses may include items such as the costs of
leases, depreciation, communications, salaries, training and supplies. The Prime
Fund believes that such expenses, if paid, will be paid only indirectly out of
the fees being paid under the Plan.

OTHER INFORMATION

The Trust's Registration Statement, including the Prospectuses, the
Statement of Additional Information and the exhibits filed therewith, may be
examined at the office of the SEC in Washington, D.C. Statements contained in
the Prospectuses or the Statement of Additional Information as to the contents
of any contract or other document referred to herein or in the Prospectuses are
not necessarily complete, and, in each instance, reference is made to the copy
of such contract or other document filed as an exhibit to the Registration
Statement, each such statement being qualified in all respects by such
reference.

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<PAGE>

CAPITALIZATION

The Trust was organized as a Delaware Business Trust on November 30, 1993
and consists of six separate portfolios or series, three of which are discussed
in this SAI. The Board of Trustees may establish additional series in the
future. The capitalization of the Trust consists solely of an unlimited number
of shares of beneficial interest with a par value of $0.001 each.

Class I shares of the Prime Fund are sold generally to municipal
investors, including municipalities, counties and state agencies, as well as
other institutional investors such as broker/dealers, corporations, investment
advisers, credit unions, banks, insurance companies and other financial
institutions and high net worth individuals that meet the $1,000,000 minimum
investment threshold for this class of shares. When issued, shares of the Trust
are fully paid and non-assessable. Class II shares of the Prime Fund are
designed for individuals and other investors who seek mutual fund investment
convenience plus a lower investment minimum. Class I and Class II are identical
in all respects with the exception that Class I shares have a higher investment
minimum and do not impose any 12b-1 fees.

Under Delaware law, shareholders could, under certain circumstances, be
held personally liable for the obligations of a series of the Trust but only to
the extent of the shareholder's investment in such series. However, the Trust
Instrument disclaims liability of the shareholders, Trustees or Officers of the
Trust for acts or obligations of the Trust, which are binding only on the assets
and property of each series of the Trust and requires that notice of the
disclaimer be given in each contract or obligations entered into or executed by
the Trust or the Trustees. The risk of a shareholder incurring financial loss on
account of shareholder liability is limited to circumstances in which the Trust
itself would be unable to meet its obligations and should be considered remote
and is limited to the amount of the shareholder's investment in the Fund.

CUSTODIAN AND SUB-CUSTODIAN

State Street Bank & Trust Company of Connecticut, N.A. acts as Custodian
for the Trust. The Custodian, among other things, maintains a custody account or
accounts in the name of the Funds; receives and delivers all assets for the
Funds upon purchase and upon sale or maturity; collects and receives all income
and other payments and distributions on account of the assets of the Funds and
pays all expenses of the Funds. For its services as Custodian, State Street
receives an asset-based fee and transaction charges. State Street Bank and Trust
Company serves as Sub-Custodian for the Trust. The Administrative Services
Agreement between ALPS Mutual Fund Services and the Trust currently provides
that the asset-based fee and transaction costs of the Trust's Custodian and
Sub-Custodian be paid by ALPS Mutual Fund Services.

EXPERTS

Deloitte & Touche LLP has been selected as the independent accountants for
the Trust. Deloitte & Touche provides audit services, tax return preparation and
assistance and consultation in connection with review of certain SEC filings.
Deloitte & Touche's address is 555 Seventeenth Street, Suite 3600, Denver,
Colorado 80202.

FINANCIAL STATEMENTS

The Funds' financial statements and financial highlights for the fiscal
year ended April 30, 1999 are included in the Trust's Annual Report which is a
separate report supplied independent of this Statement of Additional
Information. The Treasury and Government Funds' financial statements and
financial highlights are incorporated herein by reference.

<PAGE>

[ARISTATA LOGO]

ARISTATA QUALITY BOND FUND

Prospectus

__________, 1999

-1-

<PAGE>

ARISTATA QUALITY BOND FUND

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FUND FACTS

GOAL: To provide investors with a high level of current income while seeking to
preserve principal.

PRINCIPAL INVESTMENTS: INVESTMENT ADVISER (THE "ADVISER"):

- - U.S. Government obligations - Tempest, Isenhart, Chafee, Lansdowne &
- - Corporate Debt Obligations Assoc., Inc.
DISTRIBUTOR:
- ALPS Mutual Funds Services, Inc. ("ALPS")
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

INVESTMENT OBJECTIVE -- The investment objective of the Aristata Quality Bond
Fund ("the Fund") is to seek to provide investors with as high a level of
current income as is consistent with the preservation of capital.

PRINCIPAL INVESTMENT STRATEGIES -- Under normal market conditions, the Adviser
currently intends to invest at least 65% of the Fund's assets in U.S. Government
obligations, corporate debt obligations, and mortgage-backed and asset-backed
securities that are rated A or better by a nationally recognized statistical
rating organization ("NRSRO") or securities that the Adviser determines are of
comparable quality. Unrated securities deemed to be of comparable quality to the
rated securities listed above will not exceed 10% of the value of the total
assets of the Fund.

PRIMARY RISKS -- An investment in the Fund is subject to many risks, including:

- - Interest Rate Risk - Liquidity Risk
- - Credit Risk

For more information about the risk factors identified above, please refer to
the section entitled "Principal Investments" later in this prospectus. The
Statement of Additional Information ("SAI") contains additional
information about the risks associated with investing in the Fund.

- --------------------------------------------------------------------------------
SHOULD I INVEST IN THE ARISTATA QUALITY BOND FUND?

The Fund may be appropriate for you if:

- - You are seeking a high level of current income as is consistent with the
preservation of capital.

- - You are seeking higher potential returns than money market funds and you
can tolerate the risks associated with investing in fixed income
securities.

- - You have a longer term investment perspective and are prepared to maintain
your investment in the Fund for several years. (THE FUND IS NOT INTENDED
FOR SHORT-TERM INVESTORS.)

- - (REMEMBER, NO SINGLE INVESTMENT CAN PROVIDE AN EFFECTIVE, BALANCED
INVESTMENT PLAN.)

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

THE VALUE OF THE FUND'S SHARES WILL FLUCTUATE WITHIN A WIDE RANGE, SO AN
INVESTOR IN THE FUND COULD LOSE MONEY OVER SHORT OR EVEN LONG PERIODS.

-2-

<PAGE>

PERFORMANCE

----------------------------------------------
ANNUAL FUND OPERATING EXPENSES
(For the year ended April 30, 1999.)
----------------------------------- ----------
<S> <C>
Management Fees 0.50%
----------------------------------- ----------
12b-1 Fees None
----------------------------------- ----------
Other Expenses 0.26%
----------------------------------- ----------
Total Fund Operating Expenses 0.76%*
----------------------------------- ----------
</TABLE>

* The Adviser has agreed to waive that portion of its fee to the extent
necessary for the Fund to maintain an expense ratio of not more than 0.70% of
average net assets of the Fund..

ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS
- ------------------------------------------------------------------
<S> <C> <C> <C> <C>
ARISTATA QUALITY BOND FUND $78 $243 $422 $942
</TABLE>

HOW WE MANAGE THE ARISTATA QUALITY BOND FUND

OUR INVESTMENT STRATEGY -- The Adviser seeks to maximize current income as is
consistent with preservation of capital by assembling a portfolio of "Quality"
income producing obligations that the Adviser believes is best positioned to
achieve the investment objective of the Fund while still maintaining the credit
and risk tolerances established for the Fund. Quality income producing
obligations are those obligations that are rated within the four highest rating
categories of an NRSRO or, if unrated by an NRSRO, obligations that the Adviser
has determined are of comparable quality. In selecting individual securities for
the Fund, the Adviser evaluates a number of factors concerning the security,
including: the issuer's creditworthiness, the terms and conditions of the
security, and the current price of the security compared to the Adviser's
estimate of the security's long-term value.

PRINCIPAL INVESTMENT STRATEGIES -- -- Under normal market conditions, the
Adviser currently intends to invest at least 65% of the Fund's assets in U.S.
Government obligations, corporate debt obligations, and mortgage-backed and
asset-backed securities that are rated A or better by a nationally recognized
statistical rating organization ("NRSRO") or securities that the Adviser
determines are of comparable quality. Unrated securities deemed to be of
comparable quality to the rated securities listed above will not exceed 10% of
the value of the total assets of the Fund.

- -------------------------------------------------------------------------------
WHAT IS MEANT BY "AVERAGE PORTFOLIO MATURITY?"

The stated maturity of a bond is the date the issuer must repay the bond's
entire principal value to an investor. The Aristata Quality Bond Fund has no
limitations on maturity of individual investments or on average portfolio
maturity. Average portfolio maturity refers to the average of the maturities of
the securities, with each maturity "weighted" in relation to the portfolio
assets.
- -------------------------------------------------------------------------------

-3-

<PAGE>

The Fund has no stated restrictions on average portfolio maturity. Accordingly,
in selecting investments for the Fund, the Adviser is free to select securities
that, in its judgment, offer the most attractive yields regardless of the
securities remaining time to maturity. Thus, the Fund may, from time to time,
have a greater average portfolio maturity than other comparable funds.

PRINCIPAL INVESTMENTS -- The following table describes the securities in which
the Fund typically invests and the principal risks associated with those
securities.
<TABLE>
<CAPTION>

- ----------------------------------------------------------- -----------------------------------------------------
Securities Principal Risks Associated
With the Security
- ----------------------------------------------------------- -----------------------------------------------------
<S> <C>
CORPORATE DEBT OBLIGATIONS: Corporate debt obligations CALL RISK -- The risk that an issuer will exercise
include bonds, notes, debentures, and other obligations its right to pay principal on an obligation held by
of corporate entities to pay interest and repay principal. the Fund earlier than expected. This may happen
when there is a decline in interest rates. Under
these circumstances, the Fund may be unable to
recoup all of its initial investment and will also
suffer from having to reinvest in lower yielding
securities.

CREDIT RISK -- The risk that the issuer of a
security, or a party to a contract, will default
or otherwise not honor a financial obligation.

EXTENSION RISK --The risk that an issuer will
exercise its right to pay principal on an
obligation held by the Fund later than expected.
This may happen when there is a rise in interest
rates. Under these circumstances, the value of the
obligation will decrease and the Fund will also
suffer from the inability to invest in higher
yielding securities.

INTEREST RATE RISK -- The risk of a decline in
market value of an interest bearing instrument due
to changes in interest rates. For example, a rise
in interest rates typically will cause the value
of a fixed rate security to fall. On the other
hand, a decrease in interest rates will cause the
value of a fixed rate security to increase. In
general, shorter term securities offer greater
stability and are less sensitive to changes in
interest rates. Longer term securities of the type
in which the Fund invests offer less stability and
tend to be more sensitive to changes in interest
rates, but generally offer higher yields.

-4-

<PAGE>

- ----------------------------------------------------------- -----------------------------------------------------
MORTGAGE-BACKED SECURITIES: Mortgage-backed securities CALL RISK
represent direct or indirect participations in, or are
collateralized by and payable from, mortgage loans CREDIT RISK
secured by real property. Mortgage-backed securities can
be backed by either fixed rate mortgage loans or EXTENSION RISK
adjustable rate mortgage loans, and may be issued by
either a governmental or non-governmental entity. INTEREST RATE RISK
Typically, mortgage-backed securities issued by private
entities do not have the same credit standing as LIQUIDITY RISK
mortgage-backed securities issued or guaranteed by the
U.S. Government.
- ----------------------------------------------------------- -----------------------------------------------------
ASSET-BACKED SECURITIES: Asset-backed securities are CREDIT RISK
securities whose principal and interest payments are
collateralized by pools of assets such as auto loans, INTEREST RATE RISK
credit card receivables, leases, installment contracts
and personal property. Such asset pools are securitized LIQUIDITY RISK
through the use of special purpose trusts or corporations.
Principal and interest payments may be credit enhanced by
a letter of credit, a pool insurance policy or a
senior/subordinated structure..
- ----------------------------------------------------------- -----------------------------------------------------
REPURCHASE AGREEMENTS AND REVERSE REPURCHASE AGREEMENTS: CREDIT RISK
An agreement between a buyer and seller of securities in
which the seller agrees to buy the securities back within
a specified period of time at the same price the buyer
paid for them, plus an amount equal to an agreed upon
interest rate.
- ----------------------------------------------------------- -----------------------------------------------------
</TABLE>

In addition to the securities identified above, the Fund may, from time to time,
engage in the following investment practices or techniques:

BORROWING FROM BANKS. The Fund may borrow money from banks (up to 30% of the
Fund's total assets) for temporary or emergency purposes.

LENDING SECURITIES. The Fund may temporarily lend up to 30% of its Fund
securities to broker-dealers and institutions, but only when the loans are
collateralized fully.

-5-

<PAGE>

principal investment strategies of the Fund, and if employed, could result in
the Fund achieving a lower return than it might have achieved under normal
market conditions.

For more information about the securities in which the Fund invests, please
refer to the Appendix to this Prospectus and the SAI.

YEAR 2000 READINESS

Mutual funds and businesses around the world could be adversely affected if
computers do not properly process date-related information with respect to the
Year 2000. The Fund's advisers are addressing these issues for their computes
and are getting reasonable assurances from the Fund's other major service
providers that they too are addressing these issues to preserve smooth
functioning of the Fund's trading, pricing, shareholder accounting, custodial
and other operations. There can be no assurances, however, that all problems
will be avoided.

WHO MANAGES THE ARISTATA QUALITY BOND FUND?

The team of analysts and portfolio managers provides management of the Fund. The
Adviser's investment team is led by H. David Lansdowne, CFA, President and Chief
Executive Officer of Tempest, Isenhart, and its Chief Investment Officer since
1988. The Fund's other key investment management team include: Robert J. Alder,
CFA, J. Jeffrey Dohse, Barbara Grummel and Greg H. Thompson, CFA.

Mr. Lansdowne earned both his B.S. (1969) and his M.B.A. from the University of
Denver in 1972. He was awarded the Chartered Financial Analyst (CFA) designation
in 1977. Mr. Lansdowne joined Tempest, Isenhart in 1983 as Director of Research.
He began his career as an Investment Officer with Colorado National Bank in
Denver. He joined United Capital Management, a subsidiary of United Bank of
Denver, where he was Vice President and Portfolio Manager, overseeing pension
plans of Fortune 500 Companies. Immediately prior to joining Tempest, Isenhart,
he was Senior Vice President and Director of Research for Financial Programs
Mutual Funds and for their subsidiary for privately-managed accounts, Financial
Trust Company.

Mr. Alder earned his B.S. from the University of Colorado in 1969. He was
awarded the Chartered Financial Analyst (CFA) designation in 1977. His
investment management career began in 1969 as a portfolio manager and analyst
with the Trust Investment Division of the First National Bank of Denver. In
1977, he joined the Trust Investment Division of Colorado National Bank and
became head of the department in 1982. In 1987, he was instrumental in creating
Colorado National Bank's wholly-owned registered investment advisory subsidiary,
Colorado Capital Advisors and was President of that subsidiary until 1993, when
he joined Tempest, Isenhart in his current capacity as Executive Vice President.

Mr. Dohse earned his B.S. from Culver-Stockton College in Canton, Missouri, in
1963 and his M.B.A. from Loyola University in Chicago in 1971. He worked in the
investment industry for 15 years before joining Tempest, Isenhart in 1983. He
began his career with American National Bank & Trust Company in Chicago as a
management trainee involved in all facets of bank and trust investments. He then
joined the United Bank of Denver as Investment Officer, managing trust
portfolios. Prior to joining Tempest, Isenhart, Mr. Dohse was a Vice President

-6-

<PAGE>

and Portfolio Manager at IntraWest Bank of Denver, with responsibility for
various investment management portfolios.

Ms. Grummel earned her B.S. from the University of Colorado in 1979. She worked
for the National Association of Securities Dealers, N. Donald and Company and
the underwriting and asset management divisions of Merrill Lynch. Prior to
joining Tempest, Isenhart she was Executive Vice President with Lord Abbett and
Company, the New York based mutual fund group, where her responsibilities
included state-specific municipal bond fund management, individual fixed income
portfolio management and new business development. Ms. Grummel is the lead
portfolio manager for the Aristata Quality Bond Fund.

Mr. Thompson earned his B.S. from the University of Wyoming in 1967 and his
M.B.A. from the University of Denver in 1972. He was awarded the Chartered
Financial Analyst designation in 1988. He joined Tempest, Isenhart in 1987. His
previous positions include three years as a Financial Analyst with Standard &
Poor's Compustat Services, Inc. in Englewood, Colorado and twelve years with
Page T. Jenkins, a Denver proprietorship. He was an Investment Manager and
Security Analyst with Jenkins, conducting research and managing securities and
mineral portfolios for the firm.

For the advisory services it provides to the Funds, Tempest, Isenhart receives
from the Fund a monthly fee, based on average daily net assets, at the annual
rate of 0.50%.

ADVISER'S FIXED-INCOME PERFORMANCE. Although the Adviser did not manage a
registered investment company prior to March 2, 1998 (the date the Fund
commenced operations), the Adviser has been providing investment advisory
services to certain institutional clients since 1976. In fact, substantially all
of the initial investors in the Fund previously were investors in certain
unregistered commingled investment pools advised by the Adviser (the "Pools")
that were converted into the Fund.

Assets Included in Adviser's Lehman
Adviser's Fixed-Income Fixed-Income Gov't/Corp.
Year(1) Performance Performance(2) Index(3)
------- ----------- -------------- --------
<S> <C> <C> <C> <C>
1976(4) $968,179 4.94% 4.97% 6.00%
1977 $1,445,191 2.05% 2.11% 3.00%
1978 $2,009,274 -2.76% -2.70% 1.20%
1979 $2,420,222 -6.09% -6.01% 2.30%
1980 $3,454,650 -5.35% -5.29% 3.10%
1981 $5,447,729 3.65% 3.71% 7.30%
1982 $8,763,872 34.75% 34.76% 31.10%
1983 $9,312,049 7.46% 7.53% 8.00%
1984 $12,254,388 14.81% 14.88% 15.00%
1985 $15,825,978 28.56% 28.37% 21.30%
1986 $21,717,302 20.68% 20.75% 15.60%
1987 $21,136,741 -4.13% -4.07% 2.30%
1988 $23,312,790 10.23% 10.29% 7.60%
1989 $30,805,533 21.53% 21.35% 14.00%
1990 $29,695,223 2.89% 2.95% 8.30%
1991 $32,838,982 19.35% 19.42% 16.10%
1992 $35,641,126 8.49% 8.55% 7.60%
1993 $39,889,055 13.63% 13.61% 11.20%
1994 $39,788,637 -6.22% -6.16% -3.50%
1995 $46,617,593 20.94% 21.02% 19.30%
1996 $48,554,576 2.37% 2.43% 2.90%
</TABLE>

-7-

<PAGE>

<TABLE>
<S> <C> <C> <C> <C>
1997 $56,284,947 8.40% 8.47% 9.80%
1998 $57,590,028 7.82% 7.88% 9.50%

For 5 Years Ended 1998 6.30% 6.36% 7.31%
For 10 Years Ended 1998 9.58% 9.62% 9.33%
Since Inception 8.77% 8.80% 9.55%
(August 31, 1976)
</TABLE>

(1) All periods are ended December 31.

(2) The annual total returns achieved by the Pools as presented above reflects
the annual operating expenses of the Fund and is calculated in accordance
with SEC guidelines. The performance information in the first column
reflects the weighted average of the performance of the Pools and has been
restated to reflect a total expense ratio of .76% which is the gross
expense ratio that the Fund experienced for the fiscal period ended April
30, 1999 and which reflects a management fee of .50% of average net
assets. The performance information in the second column has been restated
to reflect a total expense ratio of .70% which reflects certain voluntary
fee waivers and/or expense reimbursements. These waivers and/or
reimbursements may be modified or terminated at any time.

(3) The Lehman Brothers Aggregate Bond Index represents an unmanaged
diversified portfolio of fixed-income securities, including U.S.
Treasuries, investment grade corporate bonds, and mortgage backed and
asset backed securities. The Lehman Brothers Aggregate Bond Index is not a
mutual fund, and you cannot invest in it directly. Also, the performance
of the Lehman Brothers Aggregate Bond Index does not reflect the costs
associated with operating a mutual fund, such as buying, selling, and
holding securities.

(4) Data for the period August 31, 1976 through December 31, 1976.

HOW DO I INVEST IN THE ARISTATA QUALITY BOND FUND?

HOW ARE INVESTMENTS MADE?

MINIMUM PURCHASE REQUIREMENTS

The minimum initial investment in the Fund is $2,000, including IRA investments.
Any subsequent investments must be at least $50, including IRA investments. All
initial investments should be accompanied by a completed Purchase Application. A
Purchase Application accompanies this Prospectus. You may obtain additional
copies of the Purchase Application may be obtained by calling the Fund at
1-800-644-8595. In order to establish an IRA, you must complete a separate
application that you can obtain by calling the Fund. The Fund reserves the right
to reject any purchase order.

INVESTING THROUGH YOUR BROKER, INVESTMENT ADVISER, OR A SERVICE ORGANIZATION

CAN I INVEST IN THE FUND DIRECTLY?

You can invest in the Fund directly by using any of the methods described below.

BY MAIL. Make your check payable to the Aristata Quality Bond Fund and mail it,
along with the Purchase Application (if your purchase is an initial investment),
to the address indicated on the Purchase Application. Purchases made by check
are not permitted to be redeemed until payment of the purchase has been
collected, which may take up to fifteen calendar days. Third party and foreign
checks will not be accepted. Please include the Fund name and your account
number on all checks.

-8-

<PAGE>

State Street Bank & Trust Co.
ABA# 011000028
Aristata Quality Bond Fund
Credit DDA# 22404081
(Account Registration)
(Account Number)

AUTOMATIC INVESTMENT PROGRAM. The Automatic Investment Program offers a simple
way to establish and maintain a consistent investment program. You may arrange
automatic transfers (minimum $50 per transaction) from your bank account to your
Fund account on a periodic basis by simply completing the Automatic Investment
Plan section of your Purchase Application. When you participate in this program,
the minimum initial investment in each Fund is $250. You may change the amount
of your automatic investment, skip an investment, or stop the Automatic
Investment Program by calling the Fund at 1-800-644-8595 at least three business
days prior to your next scheduled investment date.

The Fund may in its discretion discontinue, suspend or change the practice of
accepting orders by any of the methods described above. Orders for the purchase
of shares are subject to acceptance by the Fund. The Fund reserves the right to
suspend the sale of shares, or to reject any purchase order, including orders in
connection with exchanges, for any reason.

HOW DO I REDEEM FUND SHARES?

-9-

<PAGE>

You can redeem your shares directly from the Fund using any of the methods
described below.

REDEEMING YOUR SHARES THROUGH AN AUTHORIZED BROKER, SERVICE ORGANIZATION OR
INVESTMENT ADVISER

REDEEMING YOUR SHARES DIRECTLY FROM THE FUND

BY TELEPHONE: If you have established the telephone redemption privilege on your
Purchase Application, you may redeem your shares by calling the Fund at
1-800-644-8595. You should be prepared to give the telephone representative the
following information: (i) your account number, social security number and
account registration; (ii) the Fund name from which you are redeeming shares;
and (iii) the amount to be redeemed. The conversation may be recorded to protect
you and the Fund. The Fund employs reasonable procedures to confirm that
instructions communicated to its representatives by telephone are genuine. If
the Fund fails to employ such reasonable procedures, it may be liable for any
loss, damage or expense arising out of any telephone transactions purporting to
be on a shareholder's behalf. However, if the Fund acts on instructions it
reasonably believes to be genuine, you will bear the loss. For your protection,
telephone redemptions will be suspended for a period of 10 days following an
address change given over the telephone.

You cannot redeem shares held in IRAs using the telephone.

EXCHANGE OF FUND SHARES

The Fund offers two convenient ways to exchange shares in one Fund for shares in
another Fund in the Trust. Before engaging in an exchange transaction, a
shareholder should read carefully the Prospectus describing the Fund into which
the exchange will occur. A prospectus for any fund offered by the Trust can be
obtained without charge by writing to ALPS at the address listed on the cover of
this Prospectus. A shareholder may not exchange shares of one Fund for shares of
another Fund if the new Fund is not qualified for sale in the state of the
shareholder's residence. Please call the Fund at (800) 644-8595 to see if the
fund you are interested in is available in your state. The minimum amount for an
initial and subsequent exchange is $50. The Trust may terminate or amend the
terms of the exchange privilege at any time upon at least 60 days prior written
notice to shareholders of any modification or termination of the exchange
privilege.

A new account opened by exchange must be established with the same name(s),
address and social security number as the existing account. All

-10-

<PAGE>

exchanges will be made based on the net asset value next determined following
receipt of the request by a Fund in good order.

INDIVIDUAL RETIREMENT ACCOUNTS

Additional account level fees are imposed for IRA accounts.

HOW ARE FUND SHARES VALUED?

WHAT IS THE EFFECT OF FEDERAL INCOME TAX ON THIS INVESTMENT?

FEDERAL TAXES. Distributions of gains from the sale of assets held by the Fund
for more than one year generally are taxable to shareholders at the applicable
capital gains rate, regardless of how long they have owned their Fund shares.
Distributions from other sources generally are taxed as ordinary income. A
portion of the Fund's dividends may qualify for the dividends-received deduction
for corporations. Distributions are taxable when they are paid, whether taken in
cash or reinvested in additional shares, except that distributions declared in
October, November or December and paid in January are taxable as if paid on
December 31. The Fund will send each shareholder an IRS Form 1099-DIV by January
31.

-11-

<PAGE>

result, the Fund may have acquired some securities that have appreciated in
value or depreciated in value from the date they were acquired originally. If
appreciated securities are sold after the transfer, the amount of the gain would
be taxable to new shareholders as well as to reorganizing shareholders. New
shareholders would therefore incur a tax liability on distributions of capital
gains realized by the Fund even though the value of their investment in the Fund
may not have increased. The effect on shareholders who transferred into the Fund
would be to reduce their potential liability for tax on capital gains by
spreading it over a larger asset base. The opposite may occur if the Fund
acquires securities having an unrealized capital loss. In that case,
shareholders who transferred into the Fund will be unable to utilize the loss to
offset gains, but, because the transfer will not result in any gains, the
inability of shareholders who transferred into the Fund to utilize unrealized
losses will have no immediate tax effect. For new shareholders, to the extent
that unrealized losses are realized by the Fund, new shareholders may benefit by
any reduction in net tax liability attributable to the losses.

-12-

<PAGE>

FINANCIAL HIGHLIGHTS

FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout the
period indicated:

Quality Bond Fund
For the For the Period
Year Ended March 2, 1998
April 30, 1999 to April 30, 1998
----------------------------------------------------
<S> <C> <C>
Selected Per-Share Data:
Net asset value - beginning of period $9.97 $10.00
----------------------------------------------------
Income from investment operations:
Net investment income 0.62 0.10
Net realized and unrealized loss on investments (0.08) (0.03)
----------------------------------------------------
Total income from investment operations 0.54 0.07
----------------------------------------------------
Distributions:
From net investment income (0.61) (0.10)
From net realized gain (0.02) -
----------------------------------------------------
Total distributions (0.63) (0.10)
----------------------------------------------------
Net asset value - end of period $9.88 $9.97
----------------------------------------------------
----------------------------------------------------
Total Return 5.49% 0.69%
----------------------------------------------------
----------------------------------------------------
Ratios and Supplemental Data:
Net assets, end of period (000) $51,980 $57,510
----------------------------------------------------
----------------------------------------------------
Ratio of expenses to average net assets 0.65% 0.65%(1)
----------------------------------------------------
----------------------------------------------------
Ratio of net investment income to
average net assets 6.10% 6.00%(1)
----------------------------------------------------
----------------------------------------------------
Ratio of expenses to average net
assets without fee waivers 0.76% 0.83%(1)
----------------------------------------------------
----------------------------------------------------
Ratio of net investment income to
average net assets without fee waivers 5.99% 5.82%(1)
----------------------------------------------------
----------------------------------------------------
Portfolio turnover rate 9.79% 11.44%(1)
----------------------------------------------------
----------------------------------------------------
</TABLE>

(1) Annualized

-13-

<PAGE>

APPENDIX

ADDITIONAL INFORMATION ABOUT THE FUND'S INVESTMENTS

ILLIQUID INVESTMENTS. Under guidelines established by the Trustees, The Adviser
determines the liquidity of the Fund's investments. The absence of a trading
market can make it difficult to ascertain a market value for illiquid
investments. Disposing of illiquid investments may involve time-consuming
negotiation and legal expense, and it may be difficult or impossible for the
Fund to sell them promptly at an acceptable price. The Fund may invest up to 15%
of its assets in illiquid investments and private placement.

RESTRICTED SECURITIES. The Fund may purchase securities which cannot be sold to
the public without registration under the Securities Act of 1933 (restricted
securities). Unless registered for sale, these securities can only be sold in
privately negotiated transactions or pursuant to an exemption from registration.
Provided that the security has a demand feature of seven days or less, or a
dealer or institutional trading market exists, these restricted securities are
not treated as illiquid securities for the purposes of the Fund's investment
limitations. Investing in restricted securities could have the effect of
increasing the level of Fund illiquidity if qualified institutional buyers
become, for a time, uninterested in purchasing these securities.

LETTERS OF CREDIT. Issuers or financial intermediaries who provide features or
standby commitments often support their ability to buy obligations on demand by
obtaining letters of credit (LOCs) or other guarantees from domestic or foreign
banks. LOCs also may be used as credit supports for municipal instruments. The
Adviser may rely upon its evaluation of a bank's credit in determining whether
to purchase an instrument supported by an LOC. In evaluating a foreign bank's
credit, The Adviser will consider whether adequate public information about the
bank is available and whether the bank may be subject to unfavorable political
or economic developments, currency controls, or other governmental restrictions
that might affect the bank's ability to honor its credit commitment.

U.S. TREASURY OBLIGATIONS. U.S. treasury obligations are obligations issued by
the United States and backed by its full faith and credit.

-14-

<PAGE>

ADDITIONAL INFORMATION ABOUT THE FUND
- --------------------------------------------------------------------------------

If you would like more information about the Fund, the following documents are
available free upon request.

STATEMENT OF ADDITIONAL INFORMATION (SAI)

The SAI contains additional information about all aspects of the Fund. A current
SAI has been filed with the Securities and Exchange Commission and is
incorporated herein by reference. For a copy of the SAI, write or call the Fund
at the address or phone number listed below. The SEC also maintains a Web site
located at http://www.sec.gov that contains the SAI, material incorporated
herein by reference, and other information regarding the Fund.

ANNUAL AND SEMI-ANNUAL REPORTS

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TO OBTAIN THE SAI OR THE MOST RECENT ANNUAL OR SEMI-ANNUAL REPORT FOR THE FUND
YOU MAY WRITE TO THE ARISTATA QUALITY BOND FUND, C/O ALPS MUTUAL FUNDS SERVICES,
INC. AT 370 17TH STREET, SUITE 3100, DENVER, COLORADO 80202 OR CALL THE FUND AT
1-800-644-8595.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Investment Company Act File No. 811-

<PAGE>

[ARISTATA LOGO]

ARISTATA COLORADO QUALITY TAX-EXEMPT FUND

Prospectus

__________, 1999

-1-

<PAGE>

ARISTATA COLORADO QUALITY TAX-EXEMPT FUND

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FUND FACTS

GOAL: To provide investors with a high level of current income that is exempt
from Colorado and Federal income taxes while seeking to preserve principal.

PRINCIPAL INVESTMENTS: INVESTMENT ADVISER (THE "ADVISER"):
- - Colorado Obligations - Tempest, Isenhart, Chafee Lansdowne & Assoc., Inc.

DISTRIBUTOR:
- ALPS Mutual Funds Services, Inc. ("ALPS")
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

INVESTMENT OBJECTIVE -- The investment objective of the Aristata Colorado
Quality Tax-Exempt Fund (the "Fund") is to seek to provide investors with as
high a level of current income exempt from Colorado and Federal income taxes as
is consistent with the preservation of capital by investing in municipal
obligations which pay interest exempt from Colorado State and federal income
taxes.

PRINCIPAL INVESTMENT STRATEGIES - The Fund invests primarily in obligations,
including those of certain non-Colorado issuers, of any maturity that pay
interest which is exempt from Federal and Colorado income taxes. The
non-Colorado obligations that currently qualify are those issued by Guam, the
Northern Mariana Islands, Puerto Rico and the Virgin Islands. However, as a
Colorado-oriented fund, at least 65% of the Fund's total assets will be invested
in the obligations of Colorado issuers. It is possible, but not anticipated,
that up to 35% of the Fund's total assets could be invested in obligations of
non-Colorado issuers.

"Quality" obligations are those rated in one of the four highest categories by a
nationally recognized rating organization such a Moody's Investors Service or
Standard & Poor's Corporation or, if unrated, are determined to be of comparable
quality by the Adviser. The Fund may invest up to 15% of its total assets in
such unrated securities.

At least 80% of the Fund's net assets will be invested in obligations that will
not be subject to the Federal alternative minimum tax and, accordingly, the Fund
can invest up to 20% of its net assets in obligations which are subject to the
Federal alternative minimum tax.

PRIMARY RISKS -- An investment in the Fund is subject to many risks, including:

- - Interest Rate Risk - Non-Diversification Risk
- - Credit Risk - Geographic Concentration Risk
- - Liquidity Risk

THE VALUE OF THE FUND'S SHARES WILL FLUCTUATE WITHIN A WIDE RANGE, SO AN
INVESTOR IN THE FUND COULD LOSE MONEY OVER SHORT OR EVEN LONG PERIODS.

-2-

<PAGE>

- --------------------------------------------------------------------------------
SHOULD I INVEST IN THE ARISTATA COLORADO QUALITY TAX EXEMPT FUND?

The Fund may be appropriate for you if:

- - You are seeking a high quality portfolio of municipal obligations.You are
seeking income that is exempt from both federal and Colorado income tax,
other than the federal alternative minimum tax. (As a matter of
fundamental policy, 80% of the Fund's assets will be invested in Colorado
Obligations that are not subject to the federal alternative minimum tax.)

- - You have a longer term investment perspective and are prepared to maintain
your investment in the Fund for several years. (THE FUND IS NOT INTENDED
FOR SHORT-TERM INVESTORS.)

- - (REMEMBER, NO SINGLE INVESTMENT CAN PROVIDE AN EFFECTIVE, BALANCED
INVESTMENT PLAN.)
- --------------------------------------------------------------------------------

PERFORMANCE

----------------------------------------------
ANNUAL FUND OPERATING EXPENSES
(For the year ended April 30, 1999.)
----------------------------------- ----------
<S> <C>
Management Fees 0.50%
----------------------------------- ----------
12b-1 Fees None
----------------------------------- ----------
Other Expenses 0.41%
----------------------------------- ----------
Total Fund Operating Expenses 0.91%*
----------------------------------- ----------
</TABLE>

* The Adviser has agreed to waive that portion of its fee to the extent
necessary for the Fund to maintain an expense ratio of not more than 0.50% of
average net assets of the Fund.

EXAMPLES -- The following example is intended to help you compare the cost of
investing in the Fund to the cost of investing in other mutual funds with
similar investment objectives. The example shows the cumulative amount of Fund
expenses you would pay on a hypothetical investment of $10,000 in shares offered
by the Fund. The example assumes a 5% average annual return and that you
reinvest all of your dividends. Your actual costs may be higher or lower.
<TABLE>
<CAPTION>

ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ARISTATA QUALITY BOND FUND $93 $290 $504 $1,119
</TABLE>

-3-

<PAGE>

HOW WE MANAGE THE ARISTATA COLORADO QUALITY TAX-EXEMPT FUND

OUR INVESTMENT STRATEGY -- The Adviser seeks to maximize current income by
assembling a portfolio of "Quality" Colorado Obligations that the Adviser
believes is best positioned to achieve the investment objective of the Fund
while still maintaining the credit and risk tolerances established for the Fund.
Quality Colorado Obligations are those obligations that are rated within the
four highest rating categories of an NRSRO or, if unrated by an NRSRO,
obligations that the Adviser has determined are of comparable quality. In
selecting individual securities for the Fund, the Adviser evaluates a number of
factors concerning the security, including: the issuer's creditworthiness, the
terms and conditions of the security, and the current price of the security
compared to the Adviser's estimate of the security's long-term value.

The Fund has no stated restrictions on average portfolio maturity. Accordingly,
in selecting investments for the Fund, the Adviser is free to select securities
that, in its judgment, offer the most attractive yields regardless of the
security's remaining time to maturity. Thus, the Fund may, from time to time,
have a greater average portfolio maturity than other comparable funds.

PRINCIPAL INVESTMENTS -- The following table describes the securities in which
the Fund typically invests and the principal risks associated with those
securities.

- --------------------------------------------------------------------------------
WHAT IS MEANT BY "AVERAGE PORTFOLIO MATURITY?"

The stated maturity of a bond is the date the issuer must repay the bond's
entire principal value to an investor. The Aristata Quality Bond Fund has no
limitations on maturity of individual investments or on average portfolio
maturity. Average portfolio maturity refers to the average of the maturities of
the securities, with each maturity "weighted" in relation to the total portfolio
assets that it represents.
- --------------------------------------------------------------------------------

-4-

<PAGE>

<TABLE>
<CAPTION>
- ----------------------------------------------------------- -----------------------------------------------------
Securities Principal Risks Associated
With the Security
- ----------------------------------------------------------- -----------------------------------------------------
<S> <C>
MUNICIPAL OBLIGATIONS (IN GENERAL): Securities that are CREDIT RISK -- The risk that the issuer of a
issued to raise money for various public purposes. This security, or a party to a contract, will default or
includes general purpose financing for state and local otherwise not honor a financial obligation.
governments as well as financing for specific projects or
public facilities. Municipal obligations may be backed INTEREST RATE RISK -- The risk of a decline in
by the full taxing power of a municipality or by the market value of an interest bearing instrument due
revenues from a specific project or the credit of a to changes in interest rates. For example, a rise
private organization. Some municipal obligations are in interest rates typically will cause the value of
insured by private insurance companies, while others may a fixed rate security to fall. On the other hand,
be supported by letters of credit furnished by domestic a decrease in interest rates will cause the value
or foreign banks. of a fixed rate security to increase. In general,
shorter term securities offer greater stability and
are less sensitive to changes in interest rates.
Longer term securities of the type in which the
Fund invests offer less stability and tend to be
more sensitive to changes in interest rates, but
generally offer higher yields.

LIQUIDITY RISK -- The risk that certain securities
or other investments may be difficult or impossible
to sell at the time the Fund would like to sell
them. It may be difficult for the Fund to sell the
investment for the value the Fund has placed on it.
- ----------------------------------------------------------- -----------------------------------------------------
MUNICIPAL LEASE OBLIGATIONS: Securities issued by state CREDIT RISK
and local governments or authorities to acquire land and
a wide variety of equipment and facilities. These INTEREST RATE RISK
obligations typically are not backed by the credit of the
issuing municipality, and their interest may become LIQUIDITY RISK
taxable if the lease is assigned. If funds are not
appropriated for the lease payments for the following
year, the lease may terminate, with the possibility of
significant loss to the Fund. Certificates of
Participation in municipal lease obligations or
installment sales contracts entitle the holder to a
proportionate interest in the lease purchase payments
made.
- ----------------------------------------------------------- -----------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS: U.S. government obligations CALL RISK
are debt obligations issued or guaranteed by the U.S.
Treasury or by an agency or instrumentality of the U.S. EXTENSION RISK
government. Not all U.S. government obligations are
backed by the full faith and credit of the United INTEREST RATE RISK
States. For example, obligations issued by the Federal
Farm Credit Bank or by the Federal National Mortgage
Association are supported by the agency's right to borrow
money from the U.S. Treasury under certain
circumstances. There is no guarantee that the government
will support these types of obligations, and, therefore,
they involve more risk than other government obligations.
- ----------------------------------------------------------- -----------------------------------------------------
</TABLE>

-5-

<PAGE>

<TABLE>
<CAPTION>
- ----------------------------------------------------------- -----------------------------------------------------
Securities Principal Risks Associated
With the Security
- ----------------------------------------------------------- -----------------------------------------------------
<S> <C>
MUNICIPAL REFUNDING COLLATERALIZED MORTGAGE OBLIGATIONS CREDIT RISK
(MR CMOS): MR CMOs originated from revenue bonds issued
to fund low interest rate mortgages for first time home INTEREST RATE RISK
buyers with low to moderate incomes and are now secured
by an "escrow fund" generally consisting entirely of LIQUIDITY RISK
direct U.S. Government obligations that are sufficient
for paying the security holders. The security is
considered a "mortgage related security" for investment
purposes; therefore, banks have no investment limitations
or restrictions for purchasing the security for their own
account. MR CMOs are attractive for investors seeking
- ----------------------------------------------------------- -----------------------------------------------------
TAX-EXEMPT COMMERCIAL PAPER: Promissory notes issued by CREDIT RISK
municipalities to help finance short-term capital or
operating needs. INTEREST RATE RISK

LIQUIDITY RISK
- ----------------------------------------------------------- -----------------------------------------------------
REPURCHASE AGREEMENTS AND REVERSE REPURCHASE AGREEMENTS: CREDIT RISK
An agreement between a buyer and seller of securities in
which the seller agrees to buy the securities back within
a specified period of time at the same price the buyer
paid for them, plus an amount equal to an agreed upon
interest rate.
- -----------------------------------------------------------------------------------------------------------------

</TABLE>

In addition to the securities identified above, the Fund may, from time to time,
engage in the following investment practices or techniques:

BORROWING FROM BANKS. The Fund may borrow money from banks (up to 30% of the
Fund's total assets) for temporary or emergency purposes.

TEMPORARY DEFENSIVE POSITION. In response to adverse economic or market
conditions, the Fund may invest without limit in short-term money market
securities including, but not limited to, U.S. government obligations,
commercial paper, and certificates of deposit. This strategy is inconsistent
with the investment objective and principal investment strategies of the Fund,
and if employed, could result in the Fund achieving a lower return than it might
have achieved under normal market conditions. Also, to the extent that the Fund
derives interest on temporary taxable investments and realizes capital gains or
losses from its portfolio transactions, dividends derived from such interest,
short-term capital gains, and long-term capital gains will be taxable to
shareholders.

For more information about the securities in which the Fund invests, please
refer to the Appendix to this Prospectus and the SAI.

NON-DIVERSIFICATION RISK. An investment in a non-diversified mutual fund (as
defined in the Investment Company Act of 1940) such as the Fund, entails greater
risks than an investment in a diversified mutual fund. Because the Fund is
non-diversified, it may invest a higher percentage of its assets in the
securities of a smaller number of issuers. As a result, the Fund may be more
susceptible to any single economic, political, or regulatory occurrence than a
more widely diversified mutual fund and may be subject to greater risk of loss
with respect to its portfolio securities.

GEOGRAPHIC CONCENTRATION RISK. The performance of the Fund is susceptible to
various statutory, political, and economic factors that are unique to the State
of Colorado. Some of these factors include the Colorado budget process, the
state economy, and the volatility of state tax collections. For more information
about the specific factors that could impact the performance of the Fund, please
refer to the SAI.

-6-

<PAGE>

SPECIAL CONSIDERATIONS RELATED TO COLORADO OBLIGATIONS. Because of limitations
contained in the state constitution, the State of Colorado issues no general
obligation bonds secured by the full faith and credit of the state. However,
several agencies and instrumentalities of state government are authorized by
statute to issue bonds secured by revenues from specific projects and
activities.

Also, there are approximately 2,000 units of local government in Colorado,
including counties, statutory cities and towns, home-rule cities and counties,
school districts and a variety of water, irrigation, and other special districts
and special improvement districts, all with various constitutional and statutory
authority to levy taxes and incur indebtedness. The major source of revenue for
funding such indebtedness is the ad valorem property tax, that presently is
levied and collected solely at the local level, although the state is also
authorized to levy such taxes. There is a statutory restriction on the amount of
annual increases in taxes that can be levied by the various taxing jurisdictions
in Colorado without seeking a referendum on the issue. As a result, the ability
of issuers of Colorado issuers to repay their debts or to pay interest on such
debts may be impaired as a result of factors that are not directly related to
the issuer.

LIQUIDITY RISK RELATED TO COLORADO OBLIGATIONS. The Constitution of Colorado
limits the ability of the State and local governments to increase revenues and
expenditures, issue debt and enter into other financial obligations and raise
taxes. Presently, it is not possible to predict how this provision of the
Colorado Constitution will affect the various issuers of existing and future
Colorado Obligations, but in general it could reduce the tax coverage for
Colorado Obligations, limit the ability of municipalities to issue new
obligations, and could impair the liquidity of Colorado Obligations. At the
present time an established resale market exists for the Colorado Obligations in
which the Fund invests. However, there is no guarantee that this secondary
market will be available to the Fund in the future.

YEAR 2000 READINESS

Mutual funds and businesses around the world could be adversely affected if
computers do not properly process date-related information with respect to the
Year 2000. The Fund's advisers are addressing these issues for their computers
and are getting reasonable assurances from the Fund's other major service
providers that they too are addressing these issues to preserve smooth
functioning of the Fund's trading, pricing, shareholder accounting, custodial
and other operations. There can be no assurances, however, that all problems
will be avoided.

WHO MANAGES THE ARISTATA COLORADO QUALITY TAX-EXEMPT FUND?

The team of analysts and portfolio managers provides management of the Fund. The
Adviser's investment team is led by H. David Lansdowne, CFA, President and Chief
Executive Officer of Tempest, Isenhart, and its Chief Investment Officer since
1988. The Fund's other key investment management team include: Robert J. Alder,
CFA, J. Jeffrey Dohse, Barbara Grummel and Greg H. Thompson, CFA.

Mr. Lansdowne earned both his B.S. (1969) and his M.B.A. from the University of
Denver in 1972. He was awarded the Chartered Financial Analyst (CFA) designation
in 1977. Mr. Lansdowne joined the Adviser in 1983 as Director of Research. He
began his career as an Investment Officer with Colorado National Bank in Denver.
He joined United Capital Management, a subsidiary of United Bank of Denver,
where he was Vice President and Portfolio Manager, overseeing pension plans of
Fortune 500 Companies. Immediately prior to joining Tempest,

-7-

<PAGE>

Isenhart, he was Senior Vice President and Director of Research for Financial
Programs mutual funds and for their subsidiary for privately-managed accounts,
Financial Trust Company.

Ms. Grummel earned her B.S. from the University of Colorado in 1979. She worked
for the National Association of Securities Dealers, N. Donald and Company and
the underwriting and asset management divisions of Merrill Lynch. Prior to
joining the Adviser, she was Executive Vice President with Lord Abbett and
Company, the New York based mutual fund group, where her responsibilities
included state-specific municipal bond fund management, individual fixed income
portfolio management and new business development. Ms. Grummel is the lead
portfolio manager for the Aristata Colorado Quality Tax-exempt Fund.

Mr. Thompson earned his B.S. from the University of Wyoming in 1967 and his
M.B.A. from the University of Denver in 1972. He was awarded the Chartered
Financial Analyst designation in 1988. He joined the Adviser, in 1987. His
previous positions include three years as a Financial Analyst with Standard &
Poor's Compustat Services, Inc. in Englewood, Colorado and twelve years with
Page T. Jenkins, a Denver proprietorship. He was an Investment Manager and
Security Analyst with Jenkins, conducting research and managing securities and
mineral portfolios for the firm.

For the advisory services it provides to the Funds, the Adviser receives from
the Fund a monthly fee, based on average daily net assets, at the annual rate of
0.50%.

ADVISER'S MUNICIPAL PERFORMANCE. Although the Adviser did not manage a
registered investment company prior to May 2, 1998 (the date the Fund commenced
operations), the Adviser has been providing investment advisory services to
certain institutional clients since 1976. In fact, substantially all of the
initial investors in the Fund previously were investors in certain unregistered,
commingled investment pools advised by the Adviser (the "Pools") that were
converted into the Fund.

Assets Included in Lipper Intermediate
Adviser's Municipal Adviser's Municipal Municipal Index (Lehman
Year(1) Performance Performance(2) Index Prior to 1991)(3)
------- ----------- -------------- -----------------------
<S> <C> <C> <C> <C>
1976(4) $249,464 4.87% 5.01%
1977 $262,787 7.27% 7.71% Index Not
1978 $833,728 -1.54% -1.13% Available
1979 $854,732 -3.82% -3.42% Until 1979
1980 $790,883 -19.33% 18.99% -8.90%
1981 $725,230 -10.20% -9.83% -10.20%
1982 $3,469,564 30.82% 31.35% 40.90%
1983 $5,126081 5.24% 5.67% 8.10%
</TABLE>

-8-

<PAGE>

<TABLE>
<S> <C> <C> <C> <C>
1984 $6,702,900 8.43% 8.87% 10.60%
1985 $11,636,383 23.44% 23.94% 20.00%
1986 $18,092,331 20.64% 21.12% 19.30%
1987 $18,170,711 -4.08% -3.69% 10.80%
1990 $20,173,419 12.33% 12.79% 7.60%
1991 $21,055,078 13.67% 14.13% 10.80%
1992 $21,624,650 5.46% 5.89% 7.50%
1993 $23,382,449 11.33% 11.78% 9.94%
1994 $23,906,936 8.19% 8.63% -3.52%
1995 $27,173,100 11.17% 10.62% 12.86%
1996 $25,234,140 3.95% 4.38% 3.70%
1997 $25,291,237 6.15% 6.59% 7.08%
1998 $24,728,838 4.68% 5.11% 5.60%

For 5 Years Ended 1998(1) 4.44% 4.87% 5.01%
For 10 Years Ended 1998(1) 7.05% 7.49% 7.14%
Since Inception
(August 31, 1976) 5.97% 6.41% NA
</TABLE>

(1) All periods are ended December 31.

(2) The annual total returns achieved by the Pools as presented above reflects
the annual operating expenses of the Fund and is calculated in accordance
with SEC guidelines. The performance information in the first column
reflects the weighted average of the performance of the Pools and has been
restated to reflect a total expense ratio of .91% which is the gross
expense ratio that the Fund experienced for the fiscal period ended April
30, 1999 and which reflects a management fee of .50% of average net assets.
The performance information in the second column has been restated to
reflect a total expense ratio of .50% which reflects certain voluntary fee
waivers and/or expense reimbursements. These waivers and/or reimbursements
may be modified or terminated at any time.

(3) The S&P 500 Index is an unmanaged index tracking the performance of 500
publicly traded U.S. Stocks and is often used to indicate the performance
of the overall domestic stock market. The S&P 500 is not a mutual fund, and
you cannot invest in it directly. Also, the performance of the S&P 500 does
not reflect the costs associated with operating a mutual fund, such as
buying, selling, and holding securities.

(4) Data for the period August 31, 1976 through December 31, 1976.

HOW DO I INVEST IN THE ARISTATA QUALITY COLORADO TAX-EXEMPT FUND?

HOW ARE INVESTMENTS MADE?

MINIMUM PURCHASE REQUIREMENTS

The minimum initial investment in the Fund is $2,000. Any subsequent investments
must be at least $50. All initial investments should be accompanied by a
completed Purchase Application. A Purchase Application accompanies this
Prospectus. You may obtain additional copies of the Purchase Application by
calling the Fund at 1-800-644-8595. The Fund reserves the right to reject any
purchase order.

INVESTING THROUGH YOUR BROKER, INVESTMENT ADVISER, OR A SERVICE ORGANIZATION

-9-

<PAGE>

CAN I INVEST IN THE FUND DIRECTLY?

You can invest in the Fund directly by using any of the methods described below.

BY MAIL. Make your check payable to the Aristata Colorado Quality Tax-Exempt
Fund and mail it, along with the Purchase Application (if your purchase is an
initial investment), to the address indicated on the Purchase Application.
Purchases made by check are not permitted to be redeemed until payment of the
purchase has been collected, which may take up to fifteen calendar days.
Third party and foreign checks will not be accepted. Please include the Fund
name and your account number on all checks.

State Street Bank & Trust Co.
ABA# 011000028
Aristata Colorado Quality Tax-Exempt Fund
Credit DDA# 22404081
(Account Registration)
(Account Number)

AUTOMATIC INVESTMENT PROGRAM. The Automatic Investment Program offers a simple
way to establish and maintain a consistent investment program. You may arrange
automatic transfers (minimum $50 per transaction) from your bank account to your
Fund account on a periodic basis by simply completing the Automatic Investment
Plan section of your Purchase Application. When you participate in this program,
the minimum initial investment in each Fund is $250. You may change the amount
of your automatic investment, skip an investment, or stop the Automatic
Investment Program by calling the Fund at 1-800-644-8595 at least three business
days prior to your next scheduled investment date.

The Fund may in its discretion discontinue, suspend or change the practice of
accepting orders by any of the methods described above. Orders for the purchase
of shares are subject to acceptance by the Fund. The Fund reserves the right to
suspend the sale of shares, or to reject any purchase order, including orders in
connection with exchanges, for any reason.

HOW DO I REDEEM FUND SHARES?

Shareholders may redeem their shares, in whole or in part, on each day the Fund
is valued (see the section entitled "How are Fund Shares Valued?" later in this
Prospectus). Shares will be redeemed at the net asset value next determined
after a redemption request has been received by the Fund in good form.

A redemption may be a taxable transaction on which gain or loss may be
recognized. See the section entitled "What Is the Effect of Federal Income Tax
on this Investment?" later in this Prospectus for more information.

-10-

<PAGE>

postpone payment dates beyond the normal seven day redemption period.

You can redeem your shares directly from the Fund using any of the methods
described below.

REDEEMING YOUR SHARES THROUGH AN AUTHORIZED BROKER, SERVICE ORGANIZATION OR
INVESTMENT ADVISER

REDEEMING YOUR SHARES DIRECTLY FROM THE FUND

EXCHANGE OF FUND SHARES

-11-

<PAGE>

qualified for sale in the state of the shareholder's residence. Please call the
Fund at 1-800-644-8595 to see if the fund you are interested in is available in
your state. The minimum amount for an initial and subsequent exchange is $50.
The Trust may terminate or amend the terms of the exchange privilege at any time
upon at least 60 days prior written notice to shareholders of any modification
or termination of the exchange privilege.

An exchange is taxable as a sale of a security on which a gain or loss may be
recognized. See the section entitled "What Is the Effect of Federal Income Tax
on this Investment?" later in this Prospectus for more information. Shareholders
will receive written confirmation of the exchange following completion of the
transaction.

HOW ARE FUND SHARES VALUED?

WHAT IS THE EFFECT OF FEDERAL INCOME TAX ON THIS INVESTMENT?

FEDERAL TAXES. Distributions of gains from the sale of assets held by the Fund
for more than one year generally are taxable to shareholders at the applicable
mid-term or long-term capital gains rate, regardless of how long they have owned
their Fund shares. Distributions from other sources generally are taxed as
ordinary income. A portion of the Fund's dividends may qualify for the
dividends-received deduction for corporations. Distributions are taxable when
they are paid, whether taken in cash or reinvested in additional shares, except
that distributions declared in October, November or December and paid in January
are taxable as if paid on December 31. The Fund will send each Institutional
Investor an IRS Form 1099-DIV by January 31.

STATE TAXES. Distributions received from the Fund will not be subject to
Colorado personal income taxes to the extent such distributions are attributable
to interest on bonds or securities of the U.S. Government or any of its agencies
or instrumentalities, or on bonds or securities issued by the State of Colorado
or any county, municipality or political subdivision of Colorado, including any
agency, board, authority or commission thereof, without regard to maturity.

TAXATION OF CERTAIN PRIVATE ACTIVITY BONDS. Tax-exempt interest from certain
private activity bonds and exempt-interest dividends attributable to that
interest income constitute an item of tax preference under the alternative
minimum tax. Therefore, shareholders who may be deemed to be "substantial users"
(or "related persons" of substantial users) of facilities financed by private
activity bonds may suffer adverse tax consequences from investing in the Fund
and, therefore, should consult their tax advisers before purchasing Fund
shares.

-12-

<PAGE>

"BUYING A DIVIDEND." On the record date for a distribution of income or
capital gains, the Fund's share price is reduced by the amount of the
distribution. If shares are bought just before the record date ("buying a
dividend"), the full price for the shares will by paid, and a portion of the
price will be received back as a taxable distribution.

CONVERSION OF THE FUND. On or before March 2, 1998, common trust and collective
investment fund assets managed by the Adviser contributed assets to the Fund in
exchange for shares of the Fund. This transfer may result in adverse tax
consequences under certain circumstances to either the investors transferring
shares from a common trust or collective investment fund for shares of the Fund
("reorganizing shareholders") or to investors who acquire shares of the Fund
after a transfer ("new shareholders"). As a result, the Fund may have acquired
some securities that have appreciated in value or depreciated in value from the
date they were acquired originally. If appreciated securities are sold after the
transfer, the amount of the gain would be taxable to new shareholders as well as
to reorganizing shareholders. New shareholders would therefore incur a tax
liability on distributions of capital gains realized by the Fund even though the
value of their investment in the Fund may not have increased. The effect on
shareholders who transferred into the Fund would be to reduce their potential
liability for tax on capital gains by spreading it over a larger asset base. The
opposite may occur if the Fund acquires securities having an unrealized capital
loss. In that case, shareholders who transferred into the Fund will be unable to
utilize the loss to offset gains, but, because the transfer will not result in
any gains, the inability of shareholders who transferred into the Fund to
utilize unrealized losses will have no immediate tax effect. For new
shareholders, to the extent that unrealized losses are realized by the Fund, new
shareholders may benefit by any reduction in net tax liability attributable to
the losses.

OTHER TAX INFORMATION. The information above is only a summary of some of the
Federal and Colorado tax consequences generally affecting the Fund and its
shareholders. No attempt has been made to discuss individual tax consequences.
You should consult your tax adviser for details and up-to-date information on
the tax laws in your state to determine whether the Fund is suitable given your
particular tax situation.

-13-

<PAGE>

FINANCIAL HIGHLIGHTS

FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout the
period indicated:

Colorado Quality Tax-Exempt Fund
For the For the Period
Year Ended March 2, 1998
April 30, 1999 to April 30, 1998
----------------------------------------------------
<S> <C> <C>
Selected Per-Share Data:
Net asset value - beginning of period $9.94 $10.00
----------------------------------------------------
Income from investment operations:
Net investment income 0.49 0.08
Net realized and unrealized loss on investments 0.04 (0.06)
----------------------------------------------------
Total income from investment operations 0.53 0.02
----------------------------------------------------
Distributions:
From net investment income (0.49) (0.08)
From net realized gain (0.09) -
----------------------------------------------------
Total distributions (0.58) (0.08)
----------------------------------------------------
Net asset value - end of period $9.89 $9.94
----------------------------------------------------
----------------------------------------------------
Total Return 5.40% 0.22%
----------------------------------------------------
----------------------------------------------------
Ratios and Supplemental Data:
Net assets, end of period (000) $17,502 $23,381
----------------------------------------------------
----------------------------------------------------
Ratio of expenses to average net assets 0.45% 0.45%(1)
----------------------------------------------------
----------------------------------------------------
Ratio of net investment income to
average net assets 4.85% 5.00%(1)
----------------------------------------------------
----------------------------------------------------
Ratio of expenses to average net
assets without fee waivers 0.91% 0.92%(1)
----------------------------------------------------
----------------------------------------------------
Ratio of net investment income to
average net assets without fee waivers 4.40% 4.53%(1)
----------------------------------------------------
----------------------------------------------------
Portfolio turnover rate 7.86% 17.64%(1)
----------------------------------------------------
----------------------------------------------------
</TABLE>

(1) Annualized

-14-

<PAGE>

APPENDIX

ADDITIONAL INFORMATION ABOUT THE FUND'S INVESTMENTS

DELAYED-DELIVERY AND WHEN-ISSUED TRANSACTIONS. The Fund may buy and sell
obligations on an when-issued or delayed-delivery basis, with payment and
delivery taking place at a future date. The market value of obligations
purchased in this way may change before the delivery date, which could increase
fluctuations in the Fund's share price, yield, and return. Ordinarily, the Fund
will not earn interest on obligations until they are delivered.

DEMAND FEATURES AND STAND-BY COMMITMENTS. A demand feature is a put that
entitles the security holder to repayment of the principal amount of the
underlying security at any time or at specified intervals. A stand-by commitment
is a put that entitles the security holder to same-day settlement at amortized
cost plus accrued interest.

ILLIQUID SECURITIES. Under guidelines established by the Trustees, the Adviser
determines the liquidity of the Fund's investments. The absence of a trading
market can make it difficult to ascertain a market value for illiquid
investments. Disposing of illiquid investments may involve time-consuming
negotiation and legal expense, and it may be difficult or impossible for the
Fund to sell them promptly at an acceptable price. The Fund may invest up to 15%
of its assets in illiquid investments and private placement.

RESTRICTED SECURITIES. The Fund may purchase securities which cannot be sold to
the public without registration under the Securities Act of 1933 ("Restricted
Securities"). Unless registered for sale, these securities can only be sold in
privately negotiated transactions or pursuant to an exemption from registration.
Provided that the security has a demand feature of seven days or less, or a
dealer or institutional trading market exists, these Restricted Securities are
not treated as illiquid securities for the purposes of the Fund's investment
limitations. Investing in restricted securities could have the effect of
increasing the level of Fund illiquidity if qualified institutional buyers
become, for a time, uninterested in purchasing these securities.

RESOURCE RECOVERY BONDS. Resource Recovery Bonds are a type of revenue bond
issued to build facilities such as solid waste incinerators or waste-to-energy
plants. Typically, a private corporation will be involved, at least during the
construction phase, and the revenue stream will be secured by fees or rents paid
by municipalities for use of the facilities. The viability of a resource
recovery project, environmental protection regulations, and project operator tax
incentives may affect the value and credit quality of resource recovery bonds.

U.S. GOVERNMENT OBLIGATIONS. U.S. Government obligations are debt obligations
issued or guaranteed by the U.S. Treasury or by an agency or instrumentality of
the U.S. Government. Not all U.S. Government obligations are backed by the full
faith and credit of the United States. For example, obligations issued by the
Federal Farm Credit Bank or by the Federal National Mortgage Association are
supported by the agency's right to borrow money from the U.S. Treasury under
certain circumstances. Obligations issued by the Federal Home Loan Bank are
supported only by the credit of the agency. There is no guarantee that the
Government will support these types of obligations, and, therefore, they involve
more risk than other government obligations.

A-1

<PAGE>

U.S. TREASURY OBLIGATIONS. U.S. Treasury obligations are obligations issued by
the United States and backed by its full faith and credit.

A-2

<PAGE>

ADDITIONAL INFORMATION ABOUT THE FUND
- --------------------------------------------------------------------------------

If you would like more information about the Fund, the following documents are
available free upon request.

STATEMENT OF ADDITIONAL INFORMATION (SAI)

The SAI contains additional information about all aspects of the Fund. A current
SAI has been filed with the Securities and Exchange Commission and is
incorporated herein by reference. For a copy of the SAI, write or call the Fund
at the address or phone number listed below. The SEC also maintains a Web site
located at http://www.sec.gov that contains the SAI, material incorporated
herein by reference, and other information regarding the Fund.

ANNUAL AND SEMI-ANNUAL REPORTS

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TO OBTAIN THE SAI OR THE MOST RECENT ANNUAL OR SEMI-ANNUAL REPORT
FOR THE FUND YOU MAY WRITE TO THE ARISTATA COLORADO QUALITY
TAX-EXEMPT FUND, C/O ALPS MUTUAL FUNDS SERVICES, INC. AT 370 17TH
STREET, SUITE 3100, DENVER, COLORADO 80202 OR CALL ALPS AT
1-800-644-8595.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Investment Company Act File No. 811-

<PAGE>

ARISTATA EQUITY FUND
ARISTATA QUALITY BOND FUND
ARISTATA COLORADO QUALITY TAX-EXEMPT FUND

370 17th Street, Suite 3100
Denver, Colorado 80202

___________, 1999

General & Account Information: (800) 644-8595

STATEMENT OF ADDITIONAL INFORMATION

This Statement of Additional Information ("SAI") is not a prospectus and is only
authorized for distribution when preceded or accompanied by the prospectus for
shares of the Aristata Equity Fund, the Aristata Quality Bond Fund, or the
Aristata Colorado Quality Tax-Exempt Fund (the "Funds") dated August __, 1999
(the "prospectus"). This SAI contains additional and more detailed information
than that set forth in the prospectus and should be read in conjunction with the
prospectus. The prospectus may be obtained without charge by writing or calling
the Funds at the address and information number printed above. The Funds' most
recent Annual Report is incorporated herein by reference. A free copy can be
obtained by calling the toll-free number printed above.

<PAGE>

TABLE OF CONTENTS
<TABLE>
<CAPTION>

PAGE
- ------------------------------------------------------------------------------------------------
<S> <C>
INVESTMENT POLICIES
Bank Obligations
Commercial Paper
Common Stocks
Corporate Debt Securities
Preferred Stock
Repurchase Agreements
Reverse Repurchase Agreements
Variable and Floating Rate Demand and Master Demand Notes
Loans of Portfolio Securities
Mortgage-Related Securities
Other Asset-Backed Securities
Foreign Securities
Foreign Currency Transactions
Depositary Receipts
Real Estate Securities
Investment Company Securities
U.S. Government Securities
Interest Rate Futures Contracts
Stock Index Futures Contracts
Put Options on Stock Index Futures Contracts
Forward Commitment and When-Issued Securities
Colorado Municipal Obligations and Special Risk Considerations
Economic Factors
Restrictions of Appropriations and Revenues
Colorado State Finances
Debt
Anticipation Notes
Illiquid Securities
Zero Coupon Securities

INVESTMENT RESTRICTIONS

MANAGEMENT
Trustees and Officers
Adviser
Distribution of Fund Shares
Administrator, Bookkeeping and Pricing Agent
Fees and Expenses
</TABLE>

<PAGE>

DETERMINATION OF NET ASSET VALUE

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
PORTFOLIO TRANSACTIONS
Portfolio Turnover

TAXATION
The Colorado Bond Fund

OTHER INFORMATION
Capitalization
Voting Rights
Custodian and Transfer Agent
Yield and Performance Information
Tax-Equivalent Yield Calculations
Independent Accountants
Registration Statement

FINANCIAL STATEMENTS
APPENDIX KEY TO MOODY'S BOND RATINGS
KEY TO S & P'S BOND RATINGS
</TABLE>

<PAGE>

INVESTMENT POLICIES AND RISKS

Financial Investors Trust (the "Trust") is an open-end, diversified
management investment company with multiple diversified investment portfolios.
The Trust is a Delaware business trust established under a Declaration of Trust
dated November 30, 1993 and currently consists of multiple separately managed
portfolios, three of which are discussed in this SAI.

The prospectus discusses the investment objectives of the Funds and the
policies to be employed to achieve those objectives. This section contains
supplemental information concerning certain types of securities and other
instruments in which the Funds may invest, the investment policies and portfolio
strategies that the Funds may utilize, and certain risks attendant to such
investments, policies and strategies.

BANK OBLIGATIONS (All Funds). These obligations include negotiable
certificates of deposit and bankers' acceptances. A description of the banks,
the obligations of which the Funds may purchase, is set forth in the prospectus.
A certificate of deposit is a short-term, interest-bearing negotiable
certificate issued by a commercial bank against funds deposited in the bank. A
bankers' acceptance is a short-term draft drawn on a commercial bank by a
borrower, usually in connection with an international commercial transaction.
The borrower is liable for payment, as is the bank, which unconditionally
guarantees to pay the draft at its face amount on the maturity date.

COMMERCIAL PAPER (All Funds). Commercial paper includes short-term
unsecured promissory notes, variable rate demand notes and variable rate master
demand notes issued by domestic and foreign bank holding companies, corporations
and financial institutions and similar taxable instruments issued by government
agencies and instrumentalities. All commercial paper purchased by the Funds is,
at the time of investment, (i) rated in one of the two highest rating categories
by at least two nationally recognized statistical rating organizations
("NRSROs"), (ii) issued or guaranteed as to principal and interest by issuers
having an existing debt security rating in one of the two highest rating
categories by a least two NRSROs, or (iii) securities which, if not rated or
single rated, are, in the opinion of the Funds' adviser, of an investment
quality comparable to rated commercial paper in which the Funds may invest. See
"VARIABLE AND FLOATING RATE AND MASTER DEMAND NOTES."

COMMON STOCKS (Equity Fund). Common stock represents the residual
ownership interest in the issuer after all of its obligations and preferred
stocks are satisfied. Common Stocks fluctuate in price in response to many
factors, including historical and prospective earnings of the issuer, the value
of its assets, general economic conditions, interest rates, investor perceptions
and market volatility. Furthermore, the Fund may invest in smaller companies.
Small companies may have limited product lines, markets or financial resources;
may lack depth of experience; and may be more vulnerable to adverse general
market or economic developments than larger company issues, and can display
abrupt or erratic movements at times, due to limited volumes and less publicly
available information.

-1-

<PAGE>

CORPORATE DEBT SECURITIES (Equity Fund and Bond Fund). Fund investment
in these securities is limited to corporate debt securities (corporate bonds,
debentures, notes and similar corporate debt instruments) which meet the rating
criteria established for each Fund.

The ratings of Standard & Poor's Corporation ("S&P"), Moody's Investors
Service ("Moody's"), Inc., and other NRSROs represent their respective opinion
as to the quality of the obligations they undertake to rate (a description of
S&P's and Moody's ratings is attached hereto as Appendix A). Ratings, however,
are general and are not absolute standards of quality. Consequently, obligations
with the same rating, maturity and interest rate may have different market
prices. After purchase by a Fund, a security may cease to be rated or its rating
may be reduced below the minimum required for purchase by the Fund. Neither
event will require a sale of such security by the Fund. However, the Funds'
adviser will consider such event in its determination of whether the Fund should
continue to hold the security. To the extent the ratings given by an NRSRO may
change as a result of changes in such organizations or their rating systems, the
adviser will attempt to use comparable ratings as standards for investments in
accordance with the investment policies contained in the prospectus and in this
SAI.

It is possible that unregistered securities purchased by a Fund in
reliance upon Rule 144a under the Securities Act of 1933 could have the effect
of increasing the level of the Fund's illiquidity to the extent that qualified
institutional buyers become, for a period, uninterested in purchasing these
securities.

PREFERRED STOCKS (Equity Fund). Preferred stock has a preference over
common stock in liquidation and generally in dividends as well, but is
subordinated to the liabilities of the issuer in all respects. Preferred stock
may or may not be convertible into common stock. As a general rule, the market
value of preferred stock with a fixed dividend rate and no conversion element
varies inversely with interest rates and perceived credit risk. Because
preferred stock is junior to debt securities and other obligations of the
issuer, deterioration in the credit quality of the issuer will cause greater
changes in the value of a preferred stock than in a more senior debt security
with similar stated yield characteristics.

REPURCHASE AGREEMENTS (All Funds). The Funds may invest in securities
subject to repurchase agreements with U.S. banks or broker-dealers. Such
agreements may be considered to be loans by the Funds for purposes of the
Investment Company Act of 1940, as amended (the " 1940 Act"). A repurchase
agreement is a transaction in which the seller of a security commits itself at
the time of the sale to repurchase that security from the buyer at a mutually
agree upon time and price. The repurchase price exceeds the sale price,
reflecting an agreed-upon interest rate effective for the period the buyer owns
the security subject to repurchase. The agreed-upon rate is unrelated to the
interest rate on that security. The adviser will monitor the value of the
underlying security at the time the transaction is entered into and at all times
during the term of the repurchase agreement to ensure that the value of the
security always equals or exceeds the repurchase price. In the event of default
by the seller under the repurchase agreement, the funds may have problems in
exercising their rights to the underlying securities and may incur costs and
experience time delays in connection with the disposition of such securities.

REVERSE REPURCHASE AGREEMENTS (All Funds). A Fund may borrow funds by
selling portfolio securities to financial institutions such as banks and
broker/dealers and agreeing to repurchase them at a

-2-

<PAGE>

mutually specified date and price ("reverse repurchase agreements"). Reverse
repurchase agreements involve the risk that the market value of the securities
sold by a Fund may decline below the repurchase price. A Fund will pay interest
on amounts obtained pursuant to a reverse repurchase agreement. While reverse
repurchase agreements are outstanding, a Fund will maintain in a segregated
account cash, or other liquid assets (as determined by the board) of an amount
at least equal to the market value of the securities, plus accrued interest,
subject to the agreement.

VARIABLE AND FLOATING RATE DEMAND AND MASTER DEMAND NOTES (All Funds).
The Funds may acquire variable and floating rate instruments as described in the
prospectus. Variable and floating rate instruments are frequently not rated by
credit rating agencies; however, unrated variable and floating rate instruments
purchased by a Fund will be determined by the adviser under guidelines
established by the board of trustees to be of comparable quality at the time of
purchase to rated instruments eligible for purchase by the Funds. In making such
determinations, the adviser will consider the earning power, cash flows and
other liquidity ratios of the issuers of such instruments (such issuers include
financial, merchandising, investment banking, bank holding and other companies)
and will continuously monitor their financial condition. There may not be an
active secondary market with respect to a particular variable or floating rate
instrument purchased by a Fund. The absence of such an active secondary market
could make it difficult for a Fund to dispose of the variable or floating rate
instrument involved. In the event the issuer of the instrument defaulted on its
payment obligations, a Fund could, for this or other reasons, suffer a loss to
the extent of the default. Variable and floating rate instruments may be secured
by bank letters of credit, guarantees or lending commitments.

Instruments having variable or floating interest rates or demand
features may be deemed to have remaining maturities as follows: (a) a U.S.
government security with a variable rate of interest readjusted no less
frequently than every 762 days may be deemed to have a maturity equal to the
period remaining until the next readjustment of the interest rate; (b) an
instrument with a floating rate of interest, the principal amount of which is
scheduled on the face of the instrument to be paid in 397 days or less, may be
deemed to have a maturity equal to one day; (c) an instrument with a variable
rate of interest, the principal amount of which is scheduled on the face of the
investment to be paid in more than 397 days, and that is subject to a demand
feature may be deemed to have a maturity equal to the longer of the period
remaining until the next readjustment of the interest rate or the period
remaining until the principal amount can be recovered through demand; (d) an
instrument with a variable rate of interest, the principal amount of which is
scheduled to be paid in 397 days or less may be deemed to have a maturity equal
to the earlier of the period remaining until the next readjustment of the
interest rate or the period remaining until the principal amount can be
recovered through demand; and (e) an instrument with a floating rate of
interest, the principal amount of which is scheduled to be paid in more than 397
days, that is subject to a demand feature, may be deemed to have a maturity
equal to the period remaining until the principal amount can be recovered
through demand.

LOANS OF PORTFOLIO SECURITIES (Equity Fund and Bond Fund). The Equity
Fund and Bond Fund may lend their portfolio securities to brokers, dealers and
financial institutions, provided: (1) the loan is secured continuously by
collateral consisting of U.S. government securities, other high-grade debt
obligations or cash or letters of credit maintained on a daily mark-to-market
basis in an amount at least

-3-

<PAGE>

equal to the current market value of the securities loaned; (2) the Funds may at
any time call the loan and obtain the return of the securities loaned within
five business days; (3) the Funds will receive any interest or dividends paid on
the loaned securities; and (4) the aggregate market value of securities loaned
will not at any time exceed 5% of the total assets of a particular Fund.

The Funds will earn income for lending their securities because cash
collateral pursuant to these loans will be invested in short-term money market
instruments. In connection with lending securities, the Funds may pay reasonable
finders, administrative and custodial fees. Loans of securities involve a risk
that the borrower may fail to return the securities or may fail to provide
additional collateral.

MORTGAGE-RELATED SECURITIES (Equity and Bond Fund). There are a number
of important differences among the agencies and instrumentalities of the U.S.
government that issue mortgage-related securities and among the securities that
they issue. Mortgage-related securities guaranteed by the Government National
Mortgage Association ("GNMA") include GNMA mortgage pass-through certificates
(also known as "Ginnie Maes") which are guaranteed as to the timely payment of
principal and interest by GNMA and such guarantee is backed by the full faith
and credit of the United States. GNMA is a wholly-owned U.S. government
corporation within the Department of Housing and Urban Development. GNMA
certificates also are supported by the authority of GNMA to borrow funds from
the U.S. Treasury to make payments under its guarantee. Mortgage-related
securities issued by the Federal National Mortgage Association ("FNMA") include
FNMA guaranteed mortgage passthrough certificates (also known as "FANNIE MAEs")
which are solely the obligations of the FNMA and are not backed by or entitled
to the full faith and credit of the United States, but are supported by the
right of the issuer to borrow from the treasury. FNMA is a government-sponsored
organization owned entirely by private stockholders. Fannie Maes are guaranteed
as to timely payment of the principal and interest by FNMA. Mortgage-related
securities issued by the Federal Home Loan Mortgage Corporation ("FHLMC")
include FHLMC mortgage participation certificates (also known as "FREDDIE MACS"
or "PCS"). FHLMC is a corporate instrumentality of the United States, created
pursuant to an act of congress, which is owned entirely by Federal Home Loan
Banks. Freddie Macs are not guaranteed by the United States or by any Federal
Home Loan Bank and do not constitute a debt or obligation of the United States
or of any Federal Home Loan Bank. Freddie Macs entitle the holder to timely
payment of interest, which is guaranteed by the FHLMC. FHLMC guarantees either
ultimate collection or timely payment of all principal payments on the
underlying mortgage loans. When FHLMC does not guarantee timely payment of
principal, FHLMC may remit the amount due on account of its guarantee of
ultimate payment of principal at any time after default on an underlying
mortgage but in no event later than one year after it becomes payable.

FOREIGN SECURITIES (Equity Fund and Bond Fund). The Funds may invest
directly in both sponsored and unsponsored U.S. dollar or foreign
currency-denominated corporate securities (including preferred or preference
stock in the case of the Equity Fund), certificates of deposit and bankers'
acceptances issued by foreign banks, and obligations of foreign governments or
their subdivisions, agencies and instrumentalities, international agencies and
supranational entities. There may be less information available to the Funds
concerning unsponsored securities, for which the paying agent is located outside
the United States.

-4-

<PAGE>

The Equity Fund will ordinarily purchase foreign securities traded in
the United States. However, the Equity Fund and Bond Fund may purchase the
securities of foreign issuers directly in foreign markets, although the Fund
does not intend to invest more than 5% of its net assets directly in foreign
markets, although it may invest up to 10% of its net assets in American
Depository Receipts ("ADRs"), discussed below. Securities of foreign issuers
that are not listed on a recognized domestic or foreign securities exchange are
deemed to be illiquid investments subject to a limitation of no more than 15% of
the Fund's net assets. See "Illiquid Investments" below.

The Equity Fund may also invest directly in foreign equity securities
and in securities represented by European Depositary Receipts ("EDRs") or ADRs.
ADRs are dollar-denominated receipts generally issued by domestic banks which
represent the deposit with the bank of a security of a foreign issuer, and which
are publicly traded on exchanges or over-the-counter in the United States. EDRs
are receipts similar to unsponsored ADR programs. Because the non-U.S. company
does not actively participate in the creation of the ADR program, the underlying
agreement for service and payment will be between the depositary and the
shareholder. The company issuing the stock underlying the ADRs pays nothing to
establish the unsponsored facility, as fees for ADR issuance and cancellation
are paid by brokers. Investors directly bear the expenses associated with
certificate transfer, custody and dividend payment.

In addition, in an unsponsored ADR program, there may be several
depositaries with no defined legal obligations to the non-U.S. company. The
duplicate depositaries may lead to marketplace confusion because there would be
no central source of information to buyers, sellers and intermediaries. The
efficiency of centralization gained in a sponsored program can greatly reduce
the delays in delivery of dividends and annual reports.

Changes in foreign exchange rates will affect the value of securities
denominated or quoted in currencies other than the U.S. dollar. The Funds do not
intend to invest more than 5% net assets directly in foreign markets.

FOREIGN CURRENCY TRANSACTIONS. The Equity Fund and Bond Fund may enter
into forward foreign currency exchange contracts for hedging purposes in
anticipation of or in order to attempt to minimize the effect of fluctuations in
the level of future foreign exchange rates. The Funds will set aside cash or
other liquid assets in an amount at least equal to the market value to the
instruments underlying the contract, less the amount of initial margin.

Since the Funds may invest in securities denominated in currencies
other than the U.S. dollar, and since those funds may temporarily hold funds in
bank deposits or other money market investments denominated in foreign
currencies, a Fund may be affected favorably or unfavorably by exchange control
regulations or changes in the exchange rate between such currencies and the
dollar. Changes in foreign currency exchange rates will influence values within
the Fund from the perspective of U.S. investors. Changes in foreign currency
exchange rates may also affect the value of dividends and interest earned, gains
and losses realized on the sale of securities, and net investment income and
gains, if any, to be distributed to shareholders by the Fund. The rate of
exchange between the U.S. dollar and other currencies is determined by the
forces of supply and demand in the foreign exchange markets. These forces are
affected

-5-

<PAGE>

by the international balance of payments and other economic and financial
conditions, government intervention, speculation and other factors.

Those Funds that purchase foreign currency-denominated securities may
enter into foreign currency exchange contracts in order to protect against
uncertainty in the level of future foreign exchange rates. A forward foreign
currency exchange contract involves an obligation to purchase or sell a specific
currency at a future date, which may be any fixed number of days from the date
of the contract agreed upon by the parties, at a price set at the time of the
contract. these contracts are entered into in the interbank market conducted
between currency traders (usually large commercial banks) and their customers.
Forward foreign currency exchange contracts may be bought or sold to protect a
Fund against a possible loss resulting from an adverse change in the
relationship between foreign currencies and the U.S. dollar, or between foreign
currencies. Although such contracts are intended to minimize the risk of loss
due to a decline in the value of the hedged currency, at the same time, they
tend to limit any potential gain which might result should the value of such
currency increase.

DEPOSITARY RECEIPTS (Equity Fund) - the Fund may invest up to 10% of
its net assets in the securities of foreign issuers in the form of American
Depositary Receipts ("ADRs"), European Depository Receipts ("EDRs") and other
depositary receipts. These securities may not necessarily be denominated in the
same currency as the securities into which they may be converted. ADRs are
receipts typically issued by a United States bank or trust company which
evidence ownership of underlying securities issued by a foreign corporation.
EDRs, which are sometimes referred to as Continental Depositary Receipts
("CDRs"), are receipts issued in Europe typically by non-United States banks and
trust companies that evidence ownership of either foreign or domestic
securities. Generally, ADRs in registered form are designed for use in the
United States securities markets and EDRs and CDRs in bearer form are designed
for use in Europe. The Fund may invest in ADRs, EDRs and CDRs through"
sponsored" or "unsponsored" facilities. A sponsored facility is established
jointly by the issuer of the underlying security and a depositary, whereas a
depositary may establish an unsponsored facility without participation by the
issuer of the deposited security. Holders of unsponsored depositary receipts
generally bear all the costs of such communications received from the issuer of
the deposited security or to pass through voting rights to the holders of such
receipts in respect of the deposited securities.

There are certain risks associated with investments in unsponsored ADR
and EDR programs. Because the non-U.S. company does not actively participate in
the creation of the ADR or EDR program, the underlying agreement for service and
payment will be between the depositary and the shareholder. The company issuing
the stock underlying the ADRs or EDRs pays nothing to establish the unsponsored
facility, as fees for ADR or EDR issuance and cancellation are paid by brokers.
Investors directly bear the expenses associated with certificate transfer,
custody and dividend payment.

In an unsponsored ADR or EDR program, there also may be several
depositaries with no defined legal obligations to the non-U.S. company. The
duplicate depositaries may lead to marketplace confusion because there would be
no central source of information to buyers, sellers and intermediaries. The
efficiency of centralization gained in a sponsored program can greatly reduce
the delays in delivery of dividends and annual resorts.

-6-

<PAGE>

In addition, with respect to all ADRs and EDRs, there is always the
risk of loss due to currency fluctuations.

REAL ESTATE SECURITIES (Equity Fund). The Fund may invest in Real
Estate Investment Trusts ("REITS"). Investing in REITS involves certain unique
risks in addition to those risks associated with investing in the real estate
industry in general. Although the Fund will not invest directly in real estate,
the Fund may invest in equity securities of issuers primarily engaged in or
related to the real estate industry. Therefore, an investment in REITS is
subject to certain risks associated with the direct ownership of real estate and
with the real estate industry in general. These risks include, among others:
possible declines in the value of real estate; risks related to general and
local economic conditions; possible lack of availability of mortgage funds;
overbuilding; extended vacancies of properties; increases in competition,
property taxes and operating expenses; changes in zoning laws; costs resulting
from the clean-up of, and liability to third parties for damages resulting from,
environmental problems; casualty or condemnation losses; uninsured damages from
floods, earthquakes or other natural disasters; limitations on and variations in
rents; and changes in interest rates. To the extent that assets underlying the
REITS' investments are concentrated geographically, by property type or in
certain other respects, the REITS may be subject to certain of the foregoing
risks to a greater extent. Equity REITS may be affected by changes in the value
of the underlying property owned by the REITS, while mortgage REITS may be
affected by the quality of any credit extended. REITS are dependent upon
management skills, are not diversified, are subject to heavy cash flow
dependency, default by borrowers and self-liquidation. REITS are also subject to
the possibilities of failing to qualify for tax free pass-through of income
under the U.S. internal revenue code and failing to maintain their exemptions
from registration under the 1940 act.

REITS (especially mortgage REITS) are also subject to interest rate
risks. When interest rates decline, the value of a REIT'S investment in fixed
rate obligations can be expected to rise. Conversely, when interest rates rise,
the value of a REIT's investment in fixed rate obligations can be expected to
decline. In contrast, as interest rates on adjustable rate mortgage loans are
reset periodically, yields on a REIT's investment in such loans will gradually
align themselves to reflect changes in market interest rates, causing the value
of such investments to fluctuate less dramatically in response to interest rate
fluctuations than would investments in fixed rate obligations.

Investing in REITS involves risks similar to those associated with
investing in small capitalization companies. REITS may have limited financial
resources, may trade less frequently and in a limited volume and may be subject
to more abrupt or erratic price movements than larger company securities.

INVESTMENT COMPANY SECURITIES (All Funds). The Funds may invest in
securities issued by other investment companies. Each Fund currently intends to
limit its investments in securities issued by other investment companies so
that, as determined immediately after a purchase of such securities is made: (i)
not more than 5% of the value of the fund's total assets will be invested in the
securities of any one investment company; (ii) not more than 10% of the value of
its total assets will be invested in the aggregate in securities of investment
companies as a group; and (iii) not more than 3% of the outstanding voting stock
of any one investment company will be owned by the Fund or by the Funds as a
whole.

-7-

<PAGE>

U.S. GOVERNMENT SECURITIES (Quality Bond Fund and Colorado Quality
Tax-Exempt Fund). U.S. Government securities are obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities. U.S.
Treasury bills, which have a maturity of up to one year, are direct obligations
of the United States and are the most frequently issued marketable U.S.
Government security. The U.S. Treasury also issues securities with longer
maturities in the form of notes and bonds.

U.S. Government agency and instrumentality obligations are debt
securities issued by U.S. Government-sponsored enterprises and Federal agencies.
Some obligations of agencies are supported by the full faith and credit of the
United States or by U.S. Treasury guarantees, such as mortgage-backed
certificates, which may be guaranteed by the Government National Mortgage
Association; others, such as obligations of the Federal Home Loan Banks, Federal
Farm Credit Bank, Bank for Cooperatives, Federal Intermediate Credit Banks and
the Federal Land Bank, are guaranteed by the right of the issuer to borrow from
the U.S. Treasury; others, such as obligations of the Federal National Mortgage
Association, are supported by discretionary authority of the U.S. Government to
purchase certain obligations of the agency or instrumentality; and others, such
as obligations of the Student Loan Marketing Association and the Tennessee
Valley Authority, are backed only by the credit of the agency or instrumentality
issuing the obligation. In the case of obligations not backed by the full faith
and credit of the United States, the investor must look principally to the
agency issuing or guaranteeing the obligation for ultimate repayment.

Although U.S. Government securities generally do not involve the credit
risks associated with other types of fixed income securities, the market values
of U.S. Government Securities do go up and down as interest rates change. Thus,
for example, the value of an investment in a Fund that holds U.S. Government
securities may fall during times of rising interest rates. Yields on U.S.
Government Securities tend to be lower than those on corporate securities of
comparable maturities.

INTEREST RATE FUTURES CONTRACTS (Bond Fund Only). The Fund may purchase
and sell interest rate futures contracts ("futures contracts") as a hedge
against changes in interest rates. A futures contract is an agreement between
two parties to buy and sell a security for a set price on a future date. Future
contracts are traded on designated "contracts markets" which, through their
clearing corporations, guarantee performance of the contracts. Currently, there
are futures contracts based on securities such as long-term U.S. Treasury bonds,
U.S. Treasury notes, GNMA certificates and three month U.S. Treasury bills.

Generally, if market interest rates increase, the value of outstanding
debt securities declines (and vice versa). Entering into a futures contract for
the sale of securities has an effect similar to the actual sale of securities,
although sale of the futures contract might be accomplished more easily and
quickly. For example, if a Fund holds long-term U.S. government securities and
the adviser anticipates a rise in long-term interest rates, it could, in lieu of
disposing of its portfolio securities, enter into futures contracts for the sale
of similar long-term securities. If rates increased and the value of the Fund's
portfolio securities declined, the value of the Fund's futures contracts would
increase, thereby protecting the Fund by preventing its net asset value from
declining as much as it otherwise would have. Similarly, entering into futures
contracts for the purchase of securities has an effect similar to actual
purchase of the underlying securities, but permits the continued holding of
securities other than the underlying securities. For

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example, if the adviser expects long-term interest rates to decline, the Fund
might enter into futures contracts for the purchase of long-term securities, so
that it could gain rapid market exposure that may offset anticipated increases
in the cost of securities it intends to purchase, while continuing to hold
higher-yielding short-term securities or waiting for the long-term market to
stabilize. Futures transactions may fail as hedging techniques where price
movements of the underlying securities do not follow price movements of the
portfolio securities subject to the hedge. The loss with respect to futures
transactions is potentially unlimited. Also, the Fund may be unable to control
losses by closing its position if a liquid secondary market does not exist.

STOCK INDEX FUTURES CONTRACTS (Equity Fund). A stock index futures
contract is an agreement in which one party agrees to deliver to the other an
amount of cash equal to a specific dollar amount times the difference between
the value of a specific stock index at the close of the last trading day of the
contract and the price at which the agreement is made. As the aggregate market
value of the stocks in the index changes, the value of the index also will
change. In the event that the index level rises above the level at which the
stock index futures contract was sold, the seller of the stock index futures
contract will realize a loss determined by the difference between the two index
levels at the time of expiration of the stock index futures contract, and the
purchaser will realize a gain in that amount. In the event the index level falls
below the level at which the stock index futures contract was sold, the seller
will recognize a gain determined by the difference between the two index levels
at the expiration of the stock index futures contract, and the purchaser will
realize a loss. Stock index futures contracts expire on a fixed date, currently
one to seven months from the date of the contract, and are settled upon
expiration of the contract.

The Fund intends to utilize stock index futures contracts primarily for
the purpose of attempting to protect the value of its common stock portfolio in
the event of a decline in stock prices. The Fund, therefore, usually will be the
seller of stock index futures contracts. This risk management strategy is an
alternative to selling securities in the portfolio and investing in money market
instruments. Also, stock index futures contracts may be purchased to protect a
Fund against an increase in prices of stocks which the Fund intends to purchase.
if the Fund is unable to invest its cash (or cash equivalents) in stock in an
orderly fashion, the Fund could purchase a stock index futures contract which
may be used to offset any increase in the price of the stock. However, it is
possible that the market may decline instead, resulting in a loss on the stock
index futures contract. If the Fund then concludes not to invest in stock at
that time, or if the price of the securities to be purchased remains constant or
increases, the Fund will realize a loss on the stock index futures contract that
is not offset by a reduction in the price of securities purchased. The Fund also
may buy or sell stock index futures contracts to close out existing futures
positions. See "interest rate futures contracts" above for more information on
the risks of stock index futures contracts.

PUT OPTIONS ON STOCK INDEX FUTURES CONTRACTS (Equity Fund). The Fund
may also purchase put options on stock index futures contracts. Sales of such
options may also be made to close out an open option position. The Fund may, for
example, purchase a put option on a particular stock index futures contract or
stock index to protect against a decline in the value of the common stocks it
holds. If the stocks in the index decline in value, the put should become more
valuable and the Fund could sell it to offset losses in the value of the common
stocks. In this way, put options may be used to achieve the same

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<PAGE>

goals the Funds seek in selling futures contracts. A put option on a stock index
future gives the purchaser the right, in return for a premium paid, to assume a
short (i.e., the right to sell stock index futures) position in a stock index
futures contract at a specified exercise price ("strike price") at any time
during the period of the option. If the option is exercised by the holder before
the last trading date during the option period, the holder receives the futures
position, as well as any balance in the futures margin account. If an option is
exercised on the last trading day prior to the expiration date of the option,
the settlement will be made entirely in cash in an amount equal to the
difference between the strike price and the closing level of the relevant index
on the expiration date.

The adviser expects that an increase or decrease in the index in
relation to the strike price level would normally correlate to an increase or
decrease (but not necessarily to the same extent) in the value of the Fund's
common stock portfolio against which the option was written. Thus, any loss in
the option transaction may be offset by an increase in the value of the common
stock portfolio to the extent changes in the index correlate to changes in the
value of that portfolio. The Fund may liquidate the put options it has purchased
by effecting a "closing sale transaction," rather than exercising the option.
This is accomplished by selling an option of the same series as the option
previously purchased. There is no guarantee that the Fund will be able to effect
the closing sale transaction. The Fund will realize a gain from a closing sale
transaction if the price at which the transaction is effected exceeds the
premium paid to purchase the option and, if less, the Fund will realize a loss.

FORWARD COMMITMENTS AND WHEN-ISSUED SECURITIES (All Funds). The Funds
may purchase when-issued securities and make contracts to purchase securities
for a fixed price at a future date beyond customary settlement time if a Fund
holds, and maintains until the settlement date in a segregated account, cash or
other liquid assets in an amount sufficient to meet the purchase price, or if
the Funds enters into offsetting contracts for the forward sale of other
securities it owns. Purchasing securities on a when-issued basis and forward
commitments involve a risk of loss if the value of the security to be purchased
declines and prior to the settlement date, which risk is in addition to their
risk of decline in value of the Fund's other assets. No income accrues on
securities purchased on a when-issued basis prior to the time delivery of the
securities is made, although the Fund may earn interest on securities it has
deposited in the segregated account because it does not pay for the when-issued
securities until they are delivered. Investing in when-issued securities has the
effect of (but is not the same as) leveraging the Fund's assets. Although the
Fund would generally purchase securities on a when-issued basis or enter into
forward commitments with the intention of actually acquiring securities, the
Fund may dispose of a when-issued security or forward commitment prior to
settlement, if the Adviser deems it appropriate to do so. The Fund may realize
short-term profits or losses upon such sales.

COLORADO MUNICIPAL OBLIGATIONS AND SPECIAL RISK CONSIDERATIONS
(Colorado Quality Tax-Exempt Fund). The ability of this Fund to achieve its
investment objective depends on the ability of issuers of Colorado municipal
obligations to meet their continuing obligations for the payment of principa1
and interest.

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The concentration of the Colorado Quality Tax-Exempt Fund in securities
issued by governmental units of only one state exposes the Fund to risks greater
than those of a more diversified portfolio holding securities issued by
governmental units of different states and different regions of the country.

Many municipal debt obligations, including many lower-rated tax-exempt
obligations, permit the issuers to call the security and thereby redeem their
obligations earlier than the stated maturity dates. Issuers are more likely to
call tax-exempt obligations during periods of declining interest rates. In these
cases, if the Fund owns a tax-exempt obligation which is called, the Fund will
receives its return of principal earlier than expected and would likely be
required to reinvest the proceeds at lower interest rates, thus reducing income
to the Fund.

The Fund believes the information summarized below describes some of
the more significant developments relating to securities of (i) municipalities
or other political subdivisions or instrumentalities of the state of Colorado
(the "state") which rely, in whole or in part, on ad valorem real property taxes
and subdivisions or (ii) the state. The sources of such information include the
official publications of the state, as well as other publicly available
documents. The Fund has not independently verified any of the information
contained in such official publications and other publicly available documents,
but is not aware of any facts which would render such information inaccurate.

During the 1980's, Colorado's economy was dependent on its energy
sector. As a result, the state suffered a sharp economic downturn when the
energy sector declined in the mid-to-late 1980's. Since 1991, growth in the
services, trade and government sectors has improved Colorado's economic
diversification. Growth in these areas, as well as in construction and high
technology sectors, has also helped to offset job losses caused by military base
closings and the decline of the state's mining industry. Population and income
levels have also grown since 1991, often exceeding national trends, and
unemployment levels have been below the national average. As of June 1997, S&P
expected this growth to continue, although at a slower rate.

The recent strength of Colorado's economy has helped to improve the
state's financial position. Revenue growth has continued to exceed projections,
primarily in the area of income tax collections. Since Colorado's constitution
prohibits the issuance of general obligation debt, the state's debt burden has
been low. The state has relied primarily on pay-as-you-go and lease financing to
meet its capital improvement needs.

Colorado's relatively strong economy and improved financial position,
together with its relatively low debt ratios, should help its credit quality.

RESTRICTIONS OF APPROPRIATIONS AND REVENUES. The state constitution
requires that expenditures for any fiscal year not exceed revenues for such
fiscal year. By statute, the amount of state General Fund revenues available for
appropriation is based upon revenue estimates which, together with other
available resources, must exceed annual appropriations by the amount of the
unappropriated reserve (the "unappropriated reserve"). The unappropriated
reserve requirement for fiscal years 1991, 1992 and 1993 was set at 3% of total
appropriations from the General Fund. For fiscal years 1994 and thereafter, the

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unappropriated reserve requirement has been set at 4%. In addition to the
unappropriated reserve, a constitutional Amendment approved by Colorado voters
in 1992 requires the state and each local government to reserve a certain
percentage of its fiscal year spending (excluding bonded debt service) for
emergency use (the "emergency reserve"). The minimum emergency reserve was set
at 1% for 1993 and 2% for 1994 and has been set at 3% for 1995 and later years.
For fiscal year 1992 and thereafter, General Fund appropriations are also
limited by statute to an amount equal to the cost of performing certain required
reappraisals of taxable property plus an amount equal to the lesser of (i) 5% of
Colorado personal income or (ii) 106% of the total General Fund appropriations
for the previous fiscal year. This restriction does not apply to any General
Fund appropriations which are required as a result of a new federal law, a final
state or federal court order or moneys derived from the increase in the
registered electors of the state voting at any general election. In addition,
the statutory limit on the level of General Fund appropriations may be exceeded
for a given fiscal year upon the declaration of a state fiscal emergency by the
State General Assembly.

According to the economic report, the fiscal year 1996 ending General
Fund balance was $368.5 million, which was $211.8 million over the combined
unappropriated reserve and emergency reserve requirements. The 1995 fiscal year
ending General Fund balance was $488.5 million, or $262.4 million over the
required unappropriated reserve and emergency reserve. Based on economic report
estimates, the fiscal year 1997 ending General Fund balance is expected to be
approximately $386.3 million, or $220.3 million over the required unappropriated
reserve and emergency reserve.

On November 3, 1992, voters in Colorado approved a constitutional
amendment (the "Amendment") which, in general, became effective December 31,
1992, and restricts the ability of the state and local governments to increase
revenues and impose taxes. The Amendment applies to the state and all local
governments, including home rule entities ("districts"). Enterprises, defined as
government owned businesses authorized to issue revenue bonds and receiving
under 10% of annual revenue in grants from all Colorado state and local
governments combined, are excluded from the provisions of the Amendment.

The provisions of the Amendment are unclear and have required judicial
interpretation. Among other provisions, the Amendment requires voter approval
prior to tax increases, the imposition of a new tax, creation of debt, or mill
levy or valuation for assessment ratio increases or a change of tax policy
resulting in a net revenue gain. The Amendment also limits increases in
government spending and property tax revenues to specified percentages. The
Amendment requires that district property tax revenues yield no more than the
prior year's revenues adjusted for inflation, voter approved changes, and
(except with regard to school districts) local growth in property values
according to a formula set forth in the Amendment. School districts are allowed
to adjust property tax revenue levies for changes in student enrollment.
Pursuant to the Amendment, local government spending is to be limited by the
same formula as the limitation for property tax revenues. The Amendment limits
increases in expenditures from the state general Fund and program revenues (cash
Funds) to the growth in inflation plus the percentage change in state population
in the prior calendar year. The bases for initial spending and revenue limits
were fiscal year 1992 spending and 1991 property taxes collected in 1992. The
bases for spending and revenue limits for all subsequent fiscal years is the
prior fiscal year's spending and property taxes collected in the prior calendar
year. Debt service changes, reductions and voter-approved revenue changes

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are excluded from the calculation bases. The Amendment also prohibits new or
increased real property transfer tax rates, new state real property taxes and
local district income taxes.

Litigation concerning several issues relating to the Amendment has been
brought in the Colorado courts. The litigation has dealt with three principal
issues: (i) whether districts can increase mill levies to pay debt service on
general obligation bonds without obtaining voter approval; (ii) whether a
multi-year lease-purchase agreement subject to annual appropriation is an
obligation which requires voter approval prior to execution of the agreement;
and (iii) what constitutes an "enterprise" which is excluded from the provisions
of the Amendment. In September 1994, the Colorado Supreme Court held that
districts can increase mill levies to pay debt service on voter approved general
obligation bonds issued after the effective date of the Amendment; in June 1995,
the Colorado Supreme Court validated mill levy increases to pay general
obligation bonds issued prior to the Amendment provided that such bonds or bonds
issued to refund such bonds were voter approved. In later 1994, the Colorado
Court of Appeals held that multiyear lease-purchase agreements subject to annual
appropriation do not require voter approval. The time to file an appeal in that
case has expired. Finally, in May 1995, the Colorado Supreme Court ruled that
entities with the power to levy taxes may not themselves be "enterprises" for
purposes of the Amendment; however, the court did not address the issue of how
valid enterprises may be created. Many Colorado local governments interpret this
decision to mean that a government with taxing power cannot be an enterprise but
that a business activity (such as a utility) owned by such a government can be.
Additional litigation in the "enterprise" arena may be filed in the future to
clarify these issues. The Colorado Supreme Court has also decided that voters
can authorize a government to keep and spend all revenues received in excess of
the spending limits. Other aspects of the spending limit are being litigated in
district court actions.

In 1985, the Colorado General Assembly passed legislation creating a
self-insurance fund and established a mechanism for claims adjustment,
investigation and defense, as well as authorizing the settlement and payment of
claims and judgements against the state. The General Assembly also utilizes the
self-insurance fund for payment of the state's workers' compensation
liabilities. The state currently maintains self-insurance for claims arising on
or after September 15, 1985 under the Colorado Governmental Immunity Act and
claims against the state, its officials, or its employees arising under federal
law. Valid claims are paid from the Risk Management Fund created for this
purpose by the General assembly. Since its inception through June 30, 1997
approximately $49.3 million has been appropriated to the Risk Management Fund
for liability claims, other than workers' compensation, substantially all of
which amount has been expended or is encumbered for claims and expenses. The
state's actuarial estimate of unfunded liability as of June 30, 1996 was
approximately $103.9 million, approximately 80% of which is related to workers'
compensation liability. The state's Risk Management Fund appropriation for
fiscal year 1997-98 is approximately $42.7 million, of which approximately 72.7%
is related to workers' compensation liability. Costs of administration of the
Risk Management Fund, legal fees and claims are payable from the Risk Management
Fund.

Judgments awarded against the state for which there is no insurance
coverage or which are not payable from the state's Risk Management Fund
ordinarily require a legislative appropriation before they may be paid.
Sovereign immunity is not a defense available to the state in an action based
upon a contract.

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Even so, as a general matter, the state takes the position that judgements
entered into against the state, except for certain federal civil rights
judgements, are payable only to the extent of appropriations therefor.

The state is a defendant in numerous lawsuits in which the plaintiffs
allege that the state has acted negligently or wrongfully. It is the state's
position that recoveries in such lawsuits would be limited by the Colorado
Governmental Immunity Act. Payment of such judgements, if any, would be payable
from insurance, the Risk Management Fund or would require separate
appropriations.

The state is a defendant in the following material litigation:

- a suit filed by the state of Kansas alleging wrongful conduct
in connection with the state's use of interstate water;

- suits filed by numerous employees of the state seeking
compensation for overtime under the Federal Labor Standards
Act:

- a suit filed by a group of property owners for alleged actions
and inactions of the state with respect to the Summitville
mining site;

- a suit filed by the U.S. alleging the filing of false reports
regarding allegedly unauthorized flights by the Colorado
National Guard;

- a suit filed by certain professors at Metropolitan State
College alleging that their salaries have been improperly
computed;

- a suit filed by a certified class of inmates seeking
injunctive relief against the state for alleged non-compliance
under the Americans with Disabilities Act, an adverse result
in which would require the state to implement significant
capital improvements or alterations to some or all of 22 state
prison facilities; and

- numerous suits filed or threatened demanding that the state
pay for all or a portion of the clean-up of several areas
which are alleged to be environmentally unsafe.

In addition, the state has been threatened with litigation by certain
lessees of water located beneath lands owned by the state and by certain
property owners alleging misuse of certain environmental clean-up moneys. The
monetary damages claimed or expected to be claimed in these pending and
threatened suits would exceed the insurance coverage available by a material
amount. The state is vigorously defending these suits.

The state is a defendant in numerous suits involving claims of
inadequate, negligent or unconstitutional treatment of prisoners and mental
patients. In some of these suits, plaintiffs are seeking or have obtained
certification of a class for a class action. Most of these cases involved
allegations of actual or punitive damages which may be material. In addition,
numerous other cases are pending in which

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plaintiffs allege that the state has deprived persons of their civil rights. In
the aggregate, the monetary damages claimed (actual, punitive and attorney's
fees) in these cases would exceed the insurance coverage available by a material
amount. However, the state believes it is highly unlikely that there will be
actual awards of judgements in material amounts.

The state is currently a defendant in numerous federal civil rights
actions which individually, except as disclosed in the previous paragraph, do
not involve material damage claims; however, in the aggregate, such actions
could have a material effect on the state.

Revenues received by the state may be affected by tax appeals brought
by taxpayers from various tax assessments. In most instances, the amount of any
refunds resulting from such appeals would not be material. The state's revenues
may also be affected by claims made by taxpayers for refunds of income taxes
previously paid to the state. The amounts of such refund claims, in some
instance, may be material.

According to the economic report, for fiscal year 1996, General Fund
revenues (adjusted for cash funds that are exempt from the Amendment) were
$3,941.9 million and program revenues (cash funds) were $1,815.5 million, for
revenues totaling $5,757.3 million. During calendar year 1995, population and
inflation grew at rates of 4.4% and 2.7%, respectively, for a combined total
limit of 7.1 %. Accordingly, under the Amendment, increases in state
expenditures during the 1996 fiscal year could not exceed $6,166.1 million and
the actual 1996 General Fund and program revenues of $6,124.3 million were under
the limit. The limitation for fiscal year 1997 is 5.5% over revenues during the
1996 fiscal year; accordingly, 1997 fiscal year revenues cannot exceed $6,528.5
million. Fiscal year 1997 revenues are estimated to be approximately $ 140
million over the limitation. The limitation for the 1998 fiscal year is
currently projected to be 5.2% which translates to a revenue limit of
approximately $6,946.5 million for fiscal year 1998. The state currently
projects that revenues will exceed the Amendment limitation for the foreseeable
future. There will be a special session of the legislature in October to
determine how to refund the surplus for fiscal year 1997. It is possible that in
future legislative sessions proposals to reform the state tax structure to
minimize such surpluses may be considered. The state will have to refund, or
obtain voter approval to retain, the excess over the limitation in 1998.

There is also a statutory restriction on the amount of annual increases
in taxes that the various taxing jurisdictions in Colorado can levy without
electoral approval. This restriction does not apply to taxes levied to pay
general obligation debt.

COLORADO STATE FINANCES. As the state experienced revenue shortfalls in
the mid1980s, it adopted various measures, including impoundment of funds by the
governor, reduction of appropriations by the General Assembly, a temporary
increase in the sales tax, deferral of certain tax reductions and inter-fund
borrowings. According to state of Colorado audited finance reports, under
generally accepted accounting principles, the state had unrestricted General
Fund ending balances at June 30 of approximately $133.3 million in fiscal year
1992, $326.8 million in fiscal year 1993, $320.4 million in fiscal year 1994,
$408.0 million in fiscal year 1995, and $368.5 million for fiscal year 1996.

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For fiscal year 1996, the following tax categories generated the
following percentages of the state's $4,268.7 million total revenues (accrual
basis): individual income taxes represented 54.3% of gross fiscal year 1996
receipts; sales, use, and other excise taxes represented 33.2% of gross fiscal
year 1996 receipt; and corporate income taxes represented 4.8% of gross fiscal
year 1996 receipts. For fiscal year 1997, General Fund revenues of approximately
$4,645.8 million and appropriations of approximately $4,553.2 million are
projected. The percentages of General Fund revenue generated by type of tax for
fiscal year 1997 are not expected to be significantly different from fiscal year
1996 percentages.

DEBT. Under its constitution, the state of Colorado is not permitted to
issue general obligation bonds secured by the full faith and credit of the
state. However, certain agencies and instrumentalities of the state are
authorized to issue bonds secured by revenues from specific projects and
activities. The state enters into certain lease transactions which are subject
to annual renewal at the option of the state. In addition. the state is
authorized to issue short-term revenue.

ANTICIPATION NOTES. Local government units in the state are also
authorized to incur indebtedness. The major source of financing for such local
government indebtedness is an ad valorem property tax. In addition, in order to
finance public projects, local governments in the state can issue revenue bonds
payable from the revenues of a utility or enterprise or from the proceeds of an
excise tax, or assessment bonds payable from special assessments. Colorado local
governments can also finance public projects through leases which are subject to
annual appropriation at the option of the local government. Local governments in
Colorado also issue tax anticipation notes. The Amendment requires prior voter
approval for the creation of any multiple fiscal year debt or other financial
obligation whatsoever, except for refundings at a lower rate or obligations of
an enterprise.

The major risks to a continued economic recovery in Colorado are
reduced federal expenditures, particularly in the area of defense, cessation of
large public works projects in the state, a drop in tourism caused by the lack
of any state-sponsored advertising, and reduced commercial real estate values.
Any of these potential events could adversely affect the Colorado economy and
local governmental revenues. Additionally, on November 3, 1992, Colorado voters
approved an Amendment to the Colorado constitution which is commonly referred to
as the taxpayer's bill of rights ("Tabor"). Tabor imposes various limits and new
requirements on spending by the state of Colorado and all Colorado local
governments (each of which is referred to in this section as a "governmental
unit"). Any of the following, for example, now requires prior voter approval:
(i) any increase in a governmental unit's spending from one year to the next in
excess of the rate of inflation plus a "growth factor," as defined in Tabor;
(ii) any increase in the real property tax revenues of a local governmental unit
(not including the state) from one year to the next in excess of inflation plus
the appropriate "growth factor"; (iii) any new tax, tax rate increase, mill levy
increase, valuation for assessment ratio increase for a property class,
extension of an expiring tax or tax policy change directly causing a net tax
revenue gain; and (iv) except for refinancing bonded indebtedness at a lower
interest rate or adding new employees to existing pension plans, creation of any
multiple-fiscal year direct or indirect debt or other financial obligation
whatsoever without adequate present cash reserves pledged irrevocably and held
for payments in all future fiscal years. Tabor has already reduced the financial
flexibility of all levels of Colorado government. In particular, governmental
units dependent on taxes on residential property are being squeezed between
Tabor requirements of voter

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approval for increased mill levies and an earlier state constitutional Amendment
which has had the effect of lowering the assessment rate on residential property
from 21.0% to 10.36% over the past eight years.

There can be no assurance that these, or other events, will not
negatively affect the market value of the securities in the Fund or the ability
of municipal entities to pay their debt obligations in a timely manner.

Economic conditions in the state may have continuing effects on other
governmental units within the state (including issuers or the Colorado
obligations in the Fund), which, to varying degrees, have also experienced
reduced revenues as a result of recessionary conditions and other factors.

ILLIQUID SECURITIES. It is the policy of the Funds that illiquid
securities whose transfer is restricted by law (including certain securities
unregistered under federal securities law) and other illiquid securities
(including repurchase agreements of more than seven days' duration, variable and
floating rate demand and master demand notes not requiring receipt of the
principal note amount within seven days' notice and securities of foreign
issuers that are not listed on a recognized domestic or foreign securities
exchange) may not constitute, at the time of purchase or at any time, more than
15% of the value of the total net assets of the Fund in which they are held.
Securities with restrictions on resale by that have a readily available market
are not deemed illiquid for purposes of this limitation.

The Funds have adopted a policy with respect to investments in illiquid
securities. Historically, illiquid securities have included securities subject
to contractual or legal restrictions on resale because they have not been
registered under the Securities Act of 1933, as amended ("Securities Act"),
securities that are otherwise not readily marketable and repurchase agreements
having a maturity of longer than seven days. Securities that have not been
registered under the Securities Act are referred to as private placements or
restricted securities and are purchased directly from the issuer or in the
secondary market. Mutual funds do not typically hold a significant amount of
these restricted or other illiquid securities because of the potential for
delays on resale and uncertainty in valuation. Limitations on resale may have an
adverse effect on the marketability of portfolio securities and a mutual fund
might be unable to dispose of restricted or other illiquid securities promptly
or at reasonable prices and might thereby experience difficulty satisfying
redemptions within seven days. A mutual fund might also have to register such
restricted securities in order to dispose of them resulting in additional
expense and delay. Adverse market conditions could impede such a public offering
of securities.

In recent years, however, a large institutional market has developed
for certain securities that are not registered under the Securities Act,
including repurchase agreements, commercial paper, foreign securities, municipal
securities and corporate bonds and notes. Institutional investors depend on an
efficient institutional market in which the unregistered security can be readily
resold or on an issuer's ability to honor a demand for repayment. The fact that
there are contractual or legal restrictions on resale to the general public or
to certain institutions may not be indicative of the liquidity of such
investments.

The Funds may also invest in restricted securities issued under Section
4(2) of the Securities Act, which exempts from registration "transactions by an
issuer not involving any public offering." Section 4(2)

-17-

<PAGE>

instruments are restricted in the sense that they can only be resold through the
issuing dealer and only to institutional investors; they cannot be resold to the
general public without registration. Restricted securities issued under Section
4(2) of the Securities Act will be treated as liquid if determined to be liquid
by the advisor pursuant to the procedures adopted by the board.

The commission has adopted Rule 144a, which allows a broader
institutional trading market for securities otherwise subject to restrictions on
resale to the general public. Rule 144a establishes a "safe harbor" from the
registration requirements of the Securities Act applicable to resales of certain
securities to qualified institutional buyers. The adviser anticipates that the
market for certain restricted securities such as institutional commercial paper
will expand further as a result of this new regulation and the development of
automated systems for the trading clearance and settlement of unregistered
securities of domestic and foreign issuers, such as the portal system sponsored
by the National Association of Securities Dealers, Inc. (the "NASD").
Consequently, it is the intent of the Fund to invest, pursuant to procedures
established by the board of trustees and subject to applicable investment
restrictions, in securities eligible for resale under Rule 144a which are
determined to be liquid based upon the trading markets for the securities.

The adviser will monitor the liquidity of restricted securities in the
Funds' portfolio under the supervision of the trustees. In reaching liquidity
decisions, the adviser will consider, inter alia, the following factors: (1) the
frequency of trades and quotes for the security over the course of six months or
as determined in the discretion of the adviser; (2) the number of dealers
wishing to purchase or sell the security and the number of other potential
purchasers over the course of six months or as determined in the discretion of
the adviser, (3) dealer undertakings to make a market in the security; (4) the
nature of the security and the nature of the marketplace trades (e.g., the time
needed to dispose of the security, the method of soliciting offers and the
mechanics of the transfer), and (5) other factors, if any, which the adviser
deems relevant. The adviser will also monitor the purchase of Rule 144a
securities to assure that the total of all Rule 144a securities held by a Fund
do not exceed 15% of the Fund's average daily net assets. Rule 144a securities
which are determined to be liquid based upon their trading markets will not,
however, be required to be included among the securities considered to be
illiquid for purposes of Investment Restriction No. 3.

ZERO COUPON SECURITIES (Bond Fund). The Fund may invest in "zero
coupon" fixed income securities. These securities accrue interest at a specified
rate, but do not pay interest in cash on a current basis. The Fund is required
to distribute the income on these securities to Fund shareholders as the income
accrues, even though the Fund is not receiving the income in cash on a current
basis. Thus the Fund may have to sell other investments to obtain cash to make
income distributions at times when the Adviser would not otherwise deem it
advisable to do so. The market value of zero coupon securities is often more
volatile than that of non-zero coupon fixed income securities of comparable
quality and maturity.

-18-

<PAGE>

INVESTMENT RESTRICTIONS

The following restrictions restate or are in addition to those
described under "Principal Investments" in the prospectus.

Each Fund, except as indicated, may not:

(1) Invest more than 15% of the value of its net assets in investments
which are illiquid (including repurchase agreements having maturities of more
than seven calendar days, variable and floating rate demand and master demand
notes not requiring receipt of principal note amount within seven days notice
and securities of foreign issuers which are not listed on a recognized domestic
or foreign securities exchange);

(2) Borrow money or pledge, mortgage or hypothecate its assets, except
that a Fund may enter into reverse repurchase agreements or borrow from banks up
to 30% of the current value of its net assets for temporary or emergency
purposes and those borrowings may be secured by the pledge of not more than 15%
of the current value of such Fund's total net assets (but investments may not be
purchased by a Fund while borrowings from banks exceed 5% of such Fund's net
assets);

(3) Issue senior securities, except insofar as a Fund may be deemed to
have issued a senior security in connection with any repurchase agreement or any
permitted borrowing;

(4) Lend more than 30% in value of the Fund's securities, including
investments in repurchase agreements, to broker-dealers or other financial
organizations. All such loans will be collateralized by cash, U.S. Government
obligations or other high-grade debt obligations that are maintained at all
times in an amount equal to at least 102% of the current value of loaned
securities;

(5) Invest in companies for the purpose of exercising control or
management;

(6) Invest more than 10% of its net assets in shares of other
investment companies;

(7) Invest in real property or mortgage loans (including limited
partnership interest but excluding real estate investment trusts and master
limited partnerships), commodities, commodity contracts, or oil, gas and other
mineral resource, exploration, development, lease or arbitrage transactions,
provided that the Fund may invest in collateralized mortgage obligations;

(8) Engage in the business of underwriting securities of other issuers,
except to the extent that the disposal of an investment position may technically
cause it to be considered an underwriter as that term is defined under the
Securities Act of 1933:

(9) Sell securities short, except to the extent that a Fund
contemporaneously owns or has the right to acquire at no additional cost
securities identical to those sold short;

-19-

<PAGE>

(10) Purchase securities on margin, except that a Fund may obtain such
short-term credits as may be necessary for the clearance of purchases and sales
of securities;

(11) Purchase or retain the securities of any issuer, if the individual
officers and Trustees of the Funds, the Adviser or the Distributor, each owning
beneficially more than 1/2 of 1% of the securities of such issuer, together own
more than 5% of the securities of such issuer;

(12) (Equity Fund and Bond Fund only) Purchase a security if, as a
result, more than 25% of the value of its total assets would be invested in
securities of one or more issuers conducting their principal business activities
in the same industry, provided that (a) this limitation shall not apply to
obligations issued or guaranteed by the U.S. Government or its agencies and
instrumentalities; (b) wholly-owned finance companies will be considered to be
in the industries of their parents; and (c) utilities will be divided according
to their services. For example, gas, gas transmission, electric and gas,
electric, and telephone will each be considered a separate industry;

(13) Invest more than 5% of its net assets in warrants which are
unattached to securities, included within that amount no more than 2% of the
value of the Fund's net asset, may be warrants which are not listed on the New
York or American Stock Exchanges;

(14) Write, purchase or sell puts, calls or combinations thereof,
except that the equity and fixed income funds may purchase or sell puts and
calls as otherwise described in the prospectus or SAI; however, no Fund will
invest more than 5% of its total assets in these classes of securities for
purposes other than bona fide hedging;

(15) Invest more than 5% of the current value of its total assets in
the securities of companies which, including predecessors, have a record of less
than three years continuous operation.

(16) Acquire the outstanding voting securities of any one issuer if,
immediately after and as a result of such investment, the current market value
of the holdings of the Fund in the securities of such issuer exceeds 10% of the
market value of such issuers outstanding voting securities; or

(17) Pledge more than 15% of its net assets to secure indebtedness; the
purchase or sale of securities on a "when-issued" basis is not deemed to be a
pledge of assets;

The Colorado Bond Fund will not make loans except that the Fund may
invest in Colorado obligations which it is permitted to buy. The Fund will not
lend its portfolio securities.

With respect to 75% of its assets, no Fund (except the Colorado Quality
Tax-Exempt Fund), will invest more than 5% of its total assets in the securities
of any one issuer (except for U.S. Government securities). In addition, no Fund
will purchase more than 10% of the outstanding voting securities of any one
issuer.

-20-

<PAGE>

The Fund is classified as a "non-diversified" investment company under
the Investment Company Act of 1940 (the "1940 Act"). The Fund also intends to
qualify as a "regulated investment company" under the Internal Revenue Code (the
"Code"). One of the tests for such qualification under the Code is, in general,
that at the end of each fiscal quarter of the Fund, (i) at least 50% of the
market value of the Fund's assets is represented by cash and cash items
(including receivables), U.S. Government securities, the securities of other
regulated investment companies and other securities, with such other securities
of any one issuer limited for the purposes of this calculation to an amount not
greater than 5% of the value of the Fund's total assets and not greater than 10%
of the outstanding voting securities of such issuer, and (ii) not more than 25%
of the value of its total assets is invested in the securities of any one issuer
(other than U.S. Government securities or the securities of other regulated
investment companies). If the Fund had elected to register under the 1940 Act as
a "diversified" investment company, it would have to meet the same test as to
75% of its assets. The Fund may therefore not have as much diversification among
securities, and thus diversification of risk, as if it had made this election
under the 1940 Act. In general, the more the Fund invests in the securities of
specific issuers, the more the Fund is exposed to risks associated with
investments in those issuers. The Fund's assets, being primarily or entirely
Colorado issues, are accordingly subject to economic and other conditions
affecting Colorado.

If a percentage limitation is satisfied at the time of investment, a
later increase or decrease in such percentage resulting from a change in the
value of a Fund's investments will not constitute a violation of such
limitation, except that any borrowing by a Fund that exceeds the fundamental
investment limitations stated above must be reduced to meet such limitations
within the period required by the 1940 Act (currently three days) and
investments in illiquid securities which exceed 15% of net assets will be
reduced as promptly as possible to adhere to such limitation. Otherwise, a Fund
may continue to hold a security even though it causes the Fund to exceed a
percentage limitation because of fluctuation in the value of the Fund's assets.

Those restrictions which are identified as fundamental may not be
changed except by a majority vote of shareholders. Other restrictions may be
changed by the Board of Trustees without shareholder vote.

The Fund may hold up to 100% of its assets in cash or short-term debt
securities for temporary defensive purposes. The Fund will adopt a temporary
defensive position when, in the opinion of the Adviser, such as position is more
likely to provide protection against adverse market conditions than adherence to
the Funds' other investment policies. The types of short-term instruments in
which the Funds may invest for such purposes include short-term money market
securities such as repurchase agreements and securities issued or guaranteed by
the U.S. Government or its agencies or instrumentalities, certificates of
deposit, time deposits and bankers' acceptances of certain qualified financial
institutions and corporate paper rated at the time of purchase at least within
the "A" rating category by Standard & Poor's or within the "Prime" category by
Moody's (or, if not rated, issued by companies having an outstanding long-term
unsecured debt issue rated at least within the "A" rating category by S&P or
within the "Prime" category by Moody's).

-21-

<PAGE>

PORTFOLIO TURNOVER

Changes may be made in the portfolio consistent with the investment
objectives and policies of the Funds whenever such changes are believed to be in
the best interests of the Funds and their shareholders. Portfolio turnover rate
is, in general, the percentage computed by taking the lesser of purchases or
sales of portfolio securities (excluding securities with a maturity date of one
year or less at the time of acquisition) for the period and dividing it by the
monthly average of the market value of such securities during the period.

The Adviser has employed and will continue to use a stock selection
style based on fundamental research analysis and techniques which focuses on the
long-term business, industry, and economic cycle. This long-term cyclical view
typically results in a low turnover strategy. Because of this long-term
investment perspective and the desire to minimize net short-term capital gains,
the Funds generally will not engage in the trading of securities for the
purposes of realizing short-term profits. Short-term realized capital gains
cannot be eliminated, however, as certain market conditions may, in the
Adviser's best judgment, warrant realizing such gains.

MANAGEMENT

TRUSTEES AND OFFICERS

The Trust's Board of Trustees oversees the overall management of the
Fund and elects the officers of the Trust. The principal occupations for the
past five years of the Trustees and executive officers of the Trust are listed
below. The address of each, unless otherwise indicated, is 370 Seventeenth
Street, Suite 3100, Denver, Colorado 80202. Trustees deemed to be "interested
persons" of the Trust for purposes of the Investment Company Act of 1940, as
amended, are indicated by an asterisk. All of the Trustees, with the exception
of Mr. Lee, were elected at a special meeting of shareholders held March 21,
1997.

-22-

<PAGE>

<TABLE>
<CAPTION>
- ----------------------------------- ------------------------------ --------------------------------------------------------------
NAME POSITION(S) HELD WITH THE PRINCIPAL OCCUPATION DURING THE PAST 5 YEARS**
TRUST
- ----------------------------------- ------------------------------ --------------------------------------------------------------
<S> <C> <C>
Mary K. Anstine (58) Trustee President/Chief Executive Officer, HealthONE Alliance,
Denver, CO; Former Executive Vice President, First
Interstate Bank of Denver. Ms. Anstine is currently a
Director of the Trust of Colorado, Trustee of the Denver
Area Council of the Boy Scouts of America, a Director of the
Junior Achievement Board and the Colorado Uplift Board, and
a member of the Advisory Boards for the Girl Scouts Mile Hi
Council and the Hospice of Metro Denver. Formerly, Ms.
Anstine served as a Director of ALPS from October 1995 to
December 1996; Director of HealthONE; a member of the
American Bankers Association Trust Executive Committee; and
Director of the Center for Dispute Resolution.
- ----------------------------------- ------------------------------ --------------------------------------------------------------
Edwin B. Crowder (68) Trustee Mr. Crowder currently operates a marketing concern with
operations in the U. S. and Latin America. He has
previously engaged in business pursuits in the restaurant,
oil and gas drilling, and real estate development
industries. Mr. Crowder is a former Director of Athletics
and Head Football Coach at the University of Colorado.
- ----------------------------------- ------------------------------ --------------------------------------------------------------
John R. Moran, Jr. (69) Trustee Mr. Moran is President of The Colorado Trust, a private
foundation trust serving the health and hospital community
in the State of Colorado. An attorney, Mr. Moran was
formerly a partner with the firm of Kutak Rock & Campbell in
Denver, Colorado and a member of the Colorado House of
Representatives . He is also a member of the Conference of
Southwest Foundations, a member of the Treasurer's Office
Investment Advisory Committee for the University of
Colorado; a Trustee of the Robert J. Kutak Foundation;
Director of the Colorado Wildlife Heritage Foundation; and a
member of the Alumni Council of the University of Denver
College of Law.
- ----------------------------------- ------------------------------ --------------------------------------------------------------
</TABLE>

-23-

<PAGE>

<TABLE>
<CAPTION>
- ----------------------------------- ------------------------------ --------------------------------------------------------------
NAME POSITION(S) HELD WITH THE PRINCIPAL OCCUPATION DURING THE PAST 5 YEARS**
TRUST
- ----------------------------------- ------------------------------ --------------------------------------------------------------
<S> <C> <C>
Robert E. Lee Trustee Mr. Lee has been a Director of Storage Technology
Corporation since 1989 and of Equitable of Iowa since 1981.
Mr. Lee was the Executive Director of The Denver Foundation
from 1989 to 1996, and is currently the Executive Director
of Emeritus. Mr. Lee is also a Director of Meredith Capital
Corporation and Source Capital Corporation.
- ----------------------------------- ------------------------------ --------------------------------------------------------------
H. David Lansdowne (52) Vice President President and CEO of Tempest, Isenhart, Chafee, Lansdowne
and Associates since January, 1988. Mr. Lansdowne joined
Tempest, Isenhart as Director of Research in 1983.
- ----------------------------------- ------------------------------ --------------------------------------------------------------
Robert Alder (57) Vice President Executive Vice President of Tempest, Isenhart, Chafee,
Lansdowne and Associates since January, 1993.
- ----------------------------------- ------------------------------ --------------------------------------------------------------
William Paston (43) Vice President and Treasurer Product Development Manager of ALPS Mutual Funds Services,
Inc. since February 1994. Prior to joining ALPS, Mr. Paston
was an associate with Lipper Analytical Services,
coordinating that firm's marketing effort in the banking
industry.
- ----------------------------------- ------------------------------ --------------------------------------------------------------
Russell C. Burk (40) Secretary Mr. Burk has been General Counsel of ALPS Mutual Funds
Services, Inc., the Administrator and Distributor, since
February 1999. Prior to joining ALPS, Mr. Burk served as
Securities Counsel for Security Life of Denver, A subsidiary
of ING Group. Prior to joining Security Life, Mr. Burk
served as General Counsel for RAF Financial Corporation,
member NASD.
- ----------------------------------- ------------------------------ --------------------------------------------------------------
Jeremy May (29) Assistant Treasurer Mr. May has been a Director of Mutual Fund Operations at
ALPS Mutual Funds Services, Inc. since October 1997. Prior
to joining ALPS, Mr. May was an auditor with Deloitte &
Touche LLP in their Denver office.
- ----------------------------------- ------------------------------ --------------------------------------------------------------
</TABLE>

**Except as otherwise indicated, each individual has held the office shown or
other offices in the same company for the last five years.

-24-

<PAGE>

attending each Board meeting. The Trustees are reimbursed for all reasonable
out-of-pocket expenses relating to attendance at meetings.

For the Trust's fiscal year ended April 30, 1999, the Trustees were
compensated as follows:

Pension or Aggregate
Retirement Estimated Compensation
Aggregate Benefits Annual From Trust
Compensation Accrued As Benefits and Trust
Name of Person, From the Part of Fund Upon Complex Paid
Position Trust Expenses Retirement to Trustees
- ----------------------------- ------------------- --------------------- --------------------- -----------------------
<S> <C> <C> <C> <C>
Mary K. Anstine, $4,000(1) $0 $0 $4,000
Trustee
- ----------------------------- ------------------- --------------------- --------------------- -----------------------
Edwin B. Crowder, $4,000(1) $0 $0 $4,000
Trustee
- ----------------------------- ------------------- --------------------- --------------------- -----------------------
John R. Moran, Jr., $4,000(1) $0 $0 $4,000
Trustee
</TABLE>

(1) Member of the Audit Committee.

ADVISER

Tempest, Isenhart, Chafee, Lansdowne & Associates ("Tempest,
Isenhart"), 1380 Lawrence Street, Suite 1050, Denver, Colorado, acts as the
investment adviser to the Funds. Tempest, Isenhart manages the investment and
reinvestment of the assets of the Funds and continuously reviews, supervises and
administers the Funds' investments. The Adviser is responsible for placing
orders for the purchase and sale of each Fund's investments directly with
brokers and dealers selected by it in its discretion.

The Investment Advisory contract ("Advisory Agreement") for the Funds
became effective on February 20, 1998. Each Advisory Agreement will continue in
effect for a two-year period and thereafter from year to year so long as such
continuance is approved annually by a majority of the Funds' Trustees who are
not parties to the Advisory Agreements or interested persons of any such party,
and by either a majority of the outstanding voting shares or the Trustees of the
Funds. Each Advisory Agreement: (i) may be terminated without the payment of any
penalty by the Fund to Tempest, Isenhart on 60 days' written notice; (ii)
terminates automatically in the event of its assignment; and (iii) generally,
may not be amended without the approval by vote of a majority of the outstanding
voting securities of such Fund.

The Agreements provide that the investment adviser shall not be liable
for any error of judgment or mistake of law or for any loss suffered by the
Funds in connection with its performance of services pursuant to the Advisory
Agreement, except loss resulting from a breach of fiduciary duty with respect to
the receipt of compensation for services or a loss resulting from willful
misfeasance, bad faith or gross

-25-

<PAGE>

negligence on the part of the investment adviser in the performance of its
obligations under the Advisory Agreement.

DISTRIBUTION OF FUND SHARES

Shares of the Funds are offered on a continuous basis through ALPS
Mutual Funds Services, Inc. ("ALPS"), 370 17th Street, Suite 3100, Denver, CO
80202, as Sponsor and Distributor of the Funds. ALPS also serves as
administrator and distributor of other mutual funds. As distributor, ALPS acts
as the Funds' agent to underwrite, sell and distribute shares in a continuous
offering.

ADMINISTRATOR, TRANSFER AGENT, BOOKKEEPING AND PRICING AGENT

Pursuant to an Administration Contract, ALPS acts as Administrator for
the Funds. ALPS provides management and administrative services necessary for
the operation of the Funds, including among other things, (i) preparation of
shareholder reports and communications, (ii) regulatory compliance, such as
reports to and filings with the Securities and Exchange Commission ("SEC") and
state securities commissions and (iii) general supervision of the operation of
the Funds, including coordination of the services performed by the Funds'
Adviser, custodian, independent accountants, legal counsel and others. In
addition, ALPS furnishes office space and facilities required for conducting the
business of the Funds and pays the compensation of the Funds' officers,
employees and Trustees affiliated with ALPS.

The Administration Agreements for the Bond Fund, Equity Fund and
Colorado Bond Fund were approved by the Board of Trustees, including a majority
of the Trustees who are not parties to the contracts or interested persons of
such parties, at its meeting held on January 20, 1998. At any time, each
Administration Agreement is terminable with respect to a Fund without penalty,
at any time, by vote of a majority of the Trustees who are not "interested
persons" of the Funds and who have no direct or indirect financial interest in
the Administration Agreement upon not more than 60 days written notice to ALPS
or by vote of the holders of a majority of the shares of the Fund involved, or,
upon 60 days notice, by ALPS.

FEES AND EXPENSES

As compensation for advisory, management and administrative services,
the Adviser and ALPS (the "Administrator") are paid a monthly fee at the
following annual rates:

ADVISORY FEE ADMINISTRATIVE FEE
<S> <C> <C>
Aristata Quality Bond Fund 0.50% 0.20%*
Aristata Equity Fund 0.85% 0.20%*
Aristata Colorado Quality 0.50% 0.20%*
Tax-Exempt Fund
</TABLE>

* Subject to minimum annual fee of $90,000, $180,000 and $60,000 for the Bond
Fund, Equity Fund and Colorado Bond Fund, respectively.

-26-

<PAGE>

During the fiscal period from March 2, 1998 (the inception date for
each Fund) to April 30, 1998, the Adviser and ALPS were compensated by each fund
as follows:

ADVISER ADMINISTRATOR
<S> <C> <C>
Aristata Quality Bond Fund $47,180 $18,872
Aristata Equity Fund $141,096 $33,199
Colorado Quality Tax-Exempt $19,665 $9,863
Fund
</TABLE>

During the fiscal period from March 2 to April 30, 1998, the Adviser
waived fees in the amount of $17,002, $37,555 and $18,406 for the Bond, Equity
and Colorado Bond Funds, respectively.

During the fiscal year ended April 30, 1999, the Adviser and ALPS were
compensated by each fund as follows:

ADVISER ADMINISTRATOR
<S> <C> <C>
Aristata Quality Bond Fund $798,166 $188,187
Aristata Equity Fund $280,373 $112,149
Colorado Quality Tax-Exempt Fund $ 98,950 $ 60,328
</TABLE>

During the fiscal year ended April 30, 1999, the Adviser waived fees in
the amount of $60,012, $146,835 and $89,839 for the Bond, Equity and Colorado
Bond Funds, respectively.

The Adviser has agreed to waive that portion of its fees to the extent
necessary for the Equity Fund, the Quality Bond Fund, and the Colorado Quality
Tax-Exempt Fund to maintain expense ratios of not more than 1.05%, 0.70% and
0.50%, respectively, of the average net assets of these Funds.

DETERMINATION OF NET ASSET VALUE

As indicated under "How are Fund Shares Valued?" in the Prospectus,
each Fund's net asset value per share for the purpose of pricing purchase and
redemption orders is determined at 4:00 p.m. (Eastern time) on each day the New
York Stock Exchange is open for trading with the exception of certain bank
holidays. The Funds will be closed on the following holidays: New Year's Day,
Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day.

Securities listed on an exchange or over-the-counter are valued on the
basis of the last sale prior to the time the valuation is made. If there has
been no sale since the immediately previous valuation, then the average of the
last bid and asked prices is used. Quotations are taken from the exchange where
the security is primarily traded. Portfolio securities which are primarily
traded on foreign exchanges may be valued with the assistance of pricing
services and are generally valued at the preceding closing values of such
securities on their respective exchanges, except that when an occurrence
subsequent to the time a foreign security is valued is likely to have changed
such value, then the fair value of those securities will be determined by
consideration of other factors by or under the direction of the Board of
Trustees. Also, it

-27-

<PAGE>

is possible that events can occur that have a significant impact on the value of
foreign securities at times when shareholders are unable to purchase or redeem
shares of the Funds.

Securities for which market quotations are not readily available are
valued at fair value as determined in good faith by or at the direction of the
Board of Trustees. Notwithstanding the above, bonds and other fixed-income
securities are valued by using market quotations and may be valued on the basis
of prices provided by a pricing service approved by the Board of Trustees. All
assets and liabilities initially expressed in foreign currencies will be
converted into U.S. dollars at the mean between the bid and asked prices of such
currencies against U.S. dollars as last quoted by any major bank.

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION

Payment for shares may, in the discretion of the Adviser, be made in
the form of securities that are permissible investments for the Funds as
described in the prospectus. For further information about this form of payment,
please contact ALPS. In connection with an in-kind securities payment, a Fund
will require, among other things, that the securities be valued on the day of
purchase in accordance with the pricing methods used by the Fund and that the
Fund receive satisfactory assurances that (i) it will have good and marketable
title to the securities received by it; (2) the securities are in proper form
for transfer to the Fund; and (3) adequate information will be provided
concerning the basis and other matters relating to the securities.

Under the 1940 Act, a Fund may suspend the right of redemption or
postpone the date of payment upon redemption for any period during which the New
York Stock Exchange is closed (other than customary weekend and holiday
closings), or during which trading on said Exchange is restricted, or during
which (as determined by the SEC by rule or regulation) an emergency exists as a
result of which disposal or valuation of portfolio securities is not reasonably
practicable, or for such other periods as the SEC may permit. (A Fund may also
suspend or postpone the recordation of the transfer of its shares upon the
occurrence of any of the foregoing conditions.)

The Funds may suspend redemption rights or postpone redemption payments
(as well as suspend the recordation of the transfer of shares) for such periods
as are permitted under the 1940 Act. The Funds may also redeem shares
involuntarily or make payment for redemption in securities or other property if
it appears appropriate to do so in light of the Funds' responsibilities under
the 1940 Act.

In addition, the Funds may redeem shares involuntarily to reimburse a
Fund for any loss sustained by reason of the failure of a shareholder to make
full payment for shares purchased by the shareholder.

All redemptions of shares of the Funds will be made in cash, except
that the commitment to redeem shares in cash extends only to redemption requests
made by each shareholder of a Fund during any 90-day period of up to the lesser
of $250,000 or 1% of the net asset value of that Fund at the beginning of such
period. This commitment is irrevocable without the prior approval of the SEC and
is a fundamental policy of the Funds that may not be changed without shareholder
approval. In the case of redemption requests by shareholders in excess of such
amounts, the Board of Trustees reserves the right to have the

-28-

<PAGE>

Funds make payment, in whole or in part, in securities or other assets in case
of an emergency or any time a cash distribution would impair the liquidity of a
Fund to the detriment of its existing shareholders. In this event, the
securities would be valued in the same manner as the securities of that Fund are
valued. If the recipient were to sell such securities, he or she may incur
brokerage or other transactional charges.

PORTFOLIO TRANSACTIONS

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

The Funds have no obligation to deal with any dealer or group of
dealers in the execution of transactions in portfolio securities. Subject to
policies established by the Funds' Board of Trustees, the Adviser is primarily
responsible for portfolio decisions and the placing of portfolio transactions.
In placing orders, it is the policy of the Funds to obtain the best results
taking into account the broker-dealer's general execution and operational
facilities, the type of transaction involved and other factors such as the
dealer's risk in positioning the securities. While the Adviser generally seeks
reasonably competitive spreads or commissions, the Funds will not necessarily be
paying the lowest spread or commission available. The reasonableness of such
spreads or brokerage commissions will be evaluated by comparing spreads or
commissions among brokers or dealers in consideration of the factors listed
immediately above and research services described below.

Purchases and sales of securities will often be principal transactions
in the case of debt securities and equity securities traded otherwise than on an
exchange. The purchase or sale of equity securities will frequently involve the
payment of a commission to a broker-dealer who effects the transaction on behalf
of a Fund. Debt securities normally will be purchased or sold from or to issuers
directly or to dealers serving as market makers for the securities at a net
price. Under the 1940 Act, persons affiliated with the Funds or the sponsor are
prohibited from dealing with the Funds as a principal in the purchase and sale
of securities except in limited situations permitted by SEC regulations, unless
a permissive order allowing such transactions is obtained from the SEC.

The Adviser may, in circumstances in which two or more broker-dealers
are in a position to offer comparable results, give preference to a dealer which
has provided statistical or other research services to the Adviser. By
allocating transactions in this manner, the Adviser is able to supplement its
research and

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<PAGE>

analysis with the views and information for securities firms. These
items, which in some cases may also be purchased for cash, include such matters
as general economic-and-security market reviews, industry and company reviews,
evaluations of securities and recommendations as to the purchase and sale of
securities. Some of these services are of value to the Adviser in advising
various of its clients (including the Funds), although not all of these services
are necessarily useful and of value in managing the Funds. The management fee
paid by the Funds is not reduced because the Adviser and its affiliates receive
such services.

[ADDITIONAL INFORMATION TO BE PROVIDED BY AMENDMENT.]

As permitted by Section 28(e) of the Securities Exchange Act of 1934
(the "1934 Act"), the Adviser may cause the Funds to pay a broker-dealer which
provides "brokerage and research services" (as defined in the 1934 Act) to the
Adviser an amount of disclosed commission for effecting a securities transaction
for the Funds in excess of the commission which another broker-dealer would have
charged for effecting that transaction.

Consistent with the Rules of Fair Practice of the National Association
of Securities Dealers, Inc. and subject to seeking the most favorable price and
execution available and such other policies as the Trustees may determine, the
Adviser may consider sales of shares of the Funds as a factor in the selection
of broker-dealers to execute portfolio transactions for the Funds.

The Aristata Equity Fund paid $113,259 and $8,370 in brokerage
commissions for the fiscal year ended April 30, 1999 and the fiscal period from
March 2, 1998 to April 30, 1998, respectively.

TAXATION

The Funds intend to continue to qualify to be treated as regulated
investment companies for each taxable year pursuant to the provisions of
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). To
qualify as a regulated investment company, a Fund must (a) distribute to
shareholders at least 90% of its investment company taxable income (which
includes, among other items, dividends, taxable interest and the excess of net
short-term capital gains over net long-term capital losses); (b) derive in each
taxable year at least 90% of its gross income from dividends, interest, payments
with respect to securities loans and gains from the sale or other disposition of
stock, securities or foreign currencies or other income derived with respect to
its business of investing in such stock, securities or currencies; and (c)
diversify its holdings so that, at the end of each quarter of the taxable year,
(i) at least 50% of the market value of the Fund's assets is represented by cash
and cash items (including receivables), U.S. Government securities, the
securities of other regulated investment companies and other securities, with
such other securities of any one issuer limited for the purposes of this
calculation to an amount not greater than 5% of the value of the Fund's total
assets and not greater than 10% of the outstanding voting securities of such
issuer, and (ii) not more than 25% of the value of its total assets is invested
in the securities of any one issuer (other than U.S. Government securities or
the securities of other regulated investment companies). In addition, a Fund
earning tax-exempt interest must, in each year, distribute at least 90% of its
net tax-exempt income. By meeting these requirements, the Funds generally will
not be

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<PAGE>

subject to Federal income tax on its investment company taxable income
and net capital gains which are distributed to shareholders. If the Funds do not
meet all of these Code requirements, they will be taxed as ordinary corporations
and their distributions will be taxed to shareholders as ordinary income.

Amounts, other than tax-exempt interest, not distributed on a timely
basis in accordance with a calendar year distribution requirement are subject to
a nondeductible 4% excise tax. To prevent imposition of the excise tax, each
Fund must distribute for each calendar year an amount equal to the sum of (1) at
least 98% of its ordinary income (excluding any capital gains or losses) for the
calendar year, (2) at least 98% of the excess of its capital gains over capital
losses (adjusted for certain ordinary losses) for the one-year period ending
October 31 of such year, and (3) all ordinary income and capital gain net income
(adjusted for certain ordinary losses) for previous years that were not
distributed during such years. A distribution, including an "exempt-interest
dividend," will be treated as paid on December 31, of a calendar year if
declared by a Fund during October, November or December of that year to
shareholders of record on a date in such a month and paid by the Fund during
January of the following year. Such distributions will be taxable to
shareholders in the calendar year in which the distributions are declared,
rather than the calendar year in which the distributions are received.

Some Funds may invest in stocks of foreign companies that are
classified under the Code as passive foreign investment companies ("PFICs").
In general, a foreign company is classified as a PFIC under the Code if at
least one-half of its assets constitutes investment-type assets or 75% or
more of its gross income is investment-type income. Under the PFIC rules, an
"excess distribution" received with respect to PFIC stock is treated as
having been realized ratably over the period during which the Fund held the
PFIC stock. A Fund itself will be subject to tax on the portion, if any, of
the excess distribution that is allocated to the Fund's holding period in
prior taxable years (and an interest factor will be added to the tax, as if
the tax had actually been payable in such prior taxable years) even though
the Fund distributes the corresponding income to shareholders. Excess
distributions include any gain from the sale of PFIC stock as well as certain
distributions from a PFIC. All excess distributions are taxable as ordinary
income.

A Fund may be able to elect alternative tax treatment with respect to
PFIC stock. Under an election that currently may be available, a Fund generally
would be required to include in its gross income its share of the earnings of a
PFIC on a current basis, regardless of whether any distributions are received
from the PFIC. If this election is made, the special rules, discussed above,
relating to the taxation of excess distributions, would not apply. In addition,
other elections may become available that would affect the tax treatment of PFIC
stock held by a Fund. Each Fund's intention to qualify annually as a regulated
investment company may limit its elections with respect to PFIC stock.

Because the application of the PFIC rules may affect, among other
things, the character of gains, the amount of gain or loss and the timing of the
recognition of income with respect to PFIC stock, as well as subject a Fund
itself to tax on certain income from PFIC stock, the amount that must be
distributed to shareholders and that will be taxed to shareholders as ordinary
income or long-term capital gain may be increased or decreased substantially as
compared to a Fund that did not invest in PFIC stock. Investors should consult
their own tax advisers in this regard.

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<PAGE>

Distributions of investment company taxable income generally are
taxable to shareholders as ordinary income. Distributions from certain of the
Funds may be eligible for the dividends-received deduction available to
corporations. To the extent dividends received by a Fund are attributable to
foreign corporations, a corporation that owns shares will not be entitled to the
dividends-received deduction with respect to its pro rata portion of such
dividends, since the dividends-received deduction is generally available only
with respect to dividends paid by domestic corporations. Proposed legislation,
if enacted, would reduce the dividends-received deduction from 70 to 50 percent.

Distributions of net long-term capital gains, if any, designated by the
Funds as long- term capital gain dividends are taxable to shareholders as
long-term capital gain, regardless of the length of time the Funds shares have
been held by a shareholder. All distributions are taxable to the shareholder in
the same manner whether reinvested in additional shares or received in cash.
Shareholders will be notified annually as to the Federal tax status of
distributions.

Distributions by a Fund reduce the net asset value of the Fund's
shares. Should a distribution reduce the net asset value below a shareholder's
cost basis, such distribution, nevertheless, would be taxable to the shareholder
as ordinary income or capital gain as described above, even though, from an
investment standpoint, it may constitute a partial return of capital. In
particular, investors should be careful to consider the tax implications of
buying shares just prior to a distribution by the Funds. The price of shares
purchased at that time includes the amount of the forthcoming distribution.
Those purchasing just prior to a distribution will receive a distribution which
nevertheless generally will be taxable to them.

Upon the taxable disposition (including a sale or redemption) of shares
of a Fund, a shareholder may realize a gain or loss depending upon his basis in
his shares. Such gain or loss generally will be treated as capital gain or loss
if the shares are capital assets in the shareholders' hands. Such gain or loss
will be long-term or short-term, generally depending upon the shareholder's
holding period for the shares. However, a loss realized by a shareholder on the
disposition of Fund shares with respect to which capital gain dividends have
been paid will, to the extent of such capital gain dividends, be treated as
long-term capital loss if such shares have been held by the shareholder for six
months or less. A loss realized on the redemption, sale or exchange of Fund
shares will be disallowed to the extent an exempt interest dividend was received
with respect to those shares if the shares have been held by the shareholder for
six months or less. Further, a loss realized on a disposition will be disallowed
to the extent the shares disposed of are replaced (whether by reinvestment of
distributions or otherwise) within a period of 61 days beginning 30 days before
and ending 30 days after the shares are disposed of. In such a case, the basis
of the shares acquired will be adjusted to reflect the disallowed loss.
Shareholders receiving distributions in the form of additional shares will have
a cost basis for Federal income tax purposes in each share received equal to the
net asset value of a share of the Funds on the reinvestment date.

The taxation of equity options is governed by Code section 1234.
Pursuant to Code section 1234, the premium received by a Fund for selling a put
or call option is not included in income at the time of receipt. If the option
expires, the premium is short-term capital gain to the Fund. If the Fund enters
into a closing transaction, the difference between the amount paid to close out
its position and the premium

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<PAGE>

received is short-term capital gain or loss. If a call option written by a Fund
is exercised, thereby requiring the Fund to sell the underlying security, the
premium will increase the amount realized upon the sale of such security and any
resulting gain or loss will be a capital gain or loss, and will be long-term or
short-term depending upon the holding period of the security. With respect to a
put or call option that is purchased by a Fund, if the option is sold any
resulting gain or loss will be a capital gain or loss, and will be long-term or
short-term, depending upon the holding period of the option. If the option
expires, the resulting loss is a capital loss and is long-term or short-term,
depending upon the holding period of the option. If the option is exercised, the
cost of the option, in the case of a call option, is added to the basis of the
purchased security and in the case of a put option, reduces the amount realized
on the underlying security in determining gain or loss.

Certain of the options, futures contracts, and forward foreign
currency exchange contracts that several of the Funds may invest in are
so-called "section 1256 contracts." With certain exceptions, gains or losses
on section 1256 contracts generally are considered 60% long-term and 40%
short-term capital gains or losses ("60/40"). Also, section 1256 contracts
held by a Fund at the end of a taxable year (and, generally, for purposes of
the 4% excise tax, on October 31 of each year) are "marked-to market" with
the result that unrealized gains or losses are treated as though they were
realized and the resulting gain or loss is treated as 60/40 gain or loss.
Investors should consult their own tax advisers in this regard.

Generally, the hedging transactions undertaken by a Fund may result in
"straddles" for Federal income tax purposes. The straddle rules may affect the
character of gains (or losses) realized by a Fund. In addition, losses realized
by a Fund on a position that is part of a straddle may be deferred under the
straddle rules, rather than being taken into account in calculating the taxable
income for the taxable year in which such losses are realized. Because only a
few regulations implementing the straddle rules have been promulgated, the tax
consequences to a Fund of hedging transactions are not entirely clear. Hedging
transactions may increase the amount of short-term capital gain realized by a
Fund which is taxed as ordinary income when distributed to stockholders.

A Fund may make one or more of the elections available under the Code
which are applicable to straddles. If a Fund makes any of the elections, the
amount, character and timing of the recognition of gains or losses from the
affected straddle positions will be determined under the rules according to the
election(s) made. The rules applicable under certain of the elections may
operate to accelerate the recognition of gains or losses from the affected
straddle positions.

Because application of the straddle rules may affect the character of
gains or losses, defer losses and/or accelerate the recognition of gains or
losses from the affected straddle positions, the amount which must be
distributed to shareholders and which will be taxed to shareholders as ordinary
income or long-term capital gain may be increased or decreased substantially as
compared to a Fund that did not engage in such hedging transactions. Investors
should consult their own tax advisers in this regard.

Certain requirements that must be met under the Code in order for a
Fund to qualify as a regulated investment company, may limit the extent to which
a Fund will be able to engage in transactions in options, futures, and forward
contracts.

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<PAGE>

Under the Code, gains or losses attributable to fluctuations in
exchange rates which occur between the time a Fund accrues interest, dividends
or other receivables, or accrues expenses or other liabilities denominated in a
foreign currency, and the time the Fund actually collects such receivables, or
pays such liabilities, generally are treated as ordinary income or ordinary
loss. Similarly, on disposition of debt securities denominated in a foreign
currency and on disposition of certain options and forward and futures
contracts, gains or losses attributable to fluctuations in the value of foreign
currency between the date of acquisition of the security or contract and the
date of disposition also are treated as ordinary gain or loss. These gains or
losses, referred to under the Code as "Section 988" gains or losses, may
increase, decrease, or eliminate the amount of a Fund's investment company
taxable income to be distributed to its shareholders as ordinary income.
Investors should consult their own tax advisors in this regard.

Income received by a Fund from sources within foreign countries may be
subject to withholding and other similar income taxes imposed by the foreign
country. If more than 50% of the value of a Fund's total assets at the close of
its taxable year consists of securities of foreign corporations, the Fund will
be eligible and intends to elect to "pass-through" to its shareholders the
amount of such foreign taxes paid by the Fund. Pursuant to this election, a
shareholder would be required to include in gross income (in addition to taxable
dividends actually received) his pro rata share of the foreign taxes paid by a
Fund and would be entitled either to deduct his pro rata share of foreign taxes
in computing his taxable income or to use it as a foreign tax credit against his
U.S. Federal income tax liability, subject to limitations. No deduction for
foreign taxes may be claimed by a shareholder who does not itemize deductions,
but such a shareholder may be eligible to claim the foreign tax credit (see
below). Each shareholder will be notified within 60 days after the close of a
Fund's taxable year whether the foreign taxes paid by a Fund will "pass-through"
for that year and, if so, such notification will designate (a) the shareholder's
portion of the foreign taxes paid to each such country, and (b) the portion of
the dividend which represents income derived from foreign sources.

Generally, a credit for foreign taxes is subject to the limitation that
it may not exceed the shareholder's U.S. tax attributable to his total foreign
source taxable income. For this purpose, if a Fund makes the election described
in the preceding paragraph, the source of the Fund's income flows through to its
shareholders. With respect to a Fund, gains from the sale of securities will be
treated as derived from U.S. sources and certain currency fluctuations gains,
including fluctuation gains from foreign currency-denominated debt securities,
receivables and payables, will be treated as ordinary income derived from U.S.
sources. The limitation on the foreign tax credit is applied separately to
foreign source passive income (as defined for purposes of the foreign tax
credit) including foreign source passive income of a Fund. The foreign tax
credit may offset only 90% of the alternative minimum tax imposed on
corporations and individuals, and foreign taxes generally may not be deducted in
computing alternative minimum taxable income.

The Funds are required to report to the Internal Revenue Service
("IRS") all distributions except in the case of certain exempt shareholders. All
such distributions generally are subject to withholding of Federal income tax at
a rate of 31% ("backup withholding") in the case of non-exempt shareholders if
(1) the shareholder fails to furnish the Funds with and to certify the
shareholder's correct taxpayer identification number or social security number,
(2) the IRS notifies the Funds or a shareholder that the

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<PAGE>

shareholder has failed to report properly certain interest and dividend income
to the IRS and to respond to notices to that effect, or (3) when required to do
so, the shareholder fails to certify that he is not subject to backup
withholding. If the withholding provisions are applicable, any such
distributions, whether reinvested in additional shares or taken in cash, will be
reduced by the amounts required to be withheld. Backup withholding is not an
additional tax. Any amount withheld may be credited against the shareholder's
U.S. Federal income tax liability. Investors may wish to consult their tax
advisers about the applicability of the backup withholding provisions.

The foregoing discussion relates only to Federal income tax law as
applicable to U.S. persons (i.e., U.S. citizens and residents and U.S.
corporations, partnerships, trusts and estates). Distributions by the Funds also
may be subject to state and local taxes and their treatment under state and
local income tax laws may differ from Federal income tax treatment.
Distributions of a Fund which are derived from interest on obligations of the
U.S. Government and certain of its agencies and instrumentalities may be exempt
from state and local income taxes in certain states. Shareholders should consult
their tax advisers with respect to particular questions of Federal, state and
local taxation. Shareholders who are not U.S. persons should consult their tax
advisers regarding U.S. and foreign tax consequences of ownership of shares of
the Funds including the likelihood that distributions to them would be subject
to withholding of U.S. tax at a rate of 30% (or at a lower rate under a tax
treaty).

THE COLORADO BOND FUND. The Fund intends to manage its portfolio so
that it will be eligible to pay "exempt-interest dividends" to shareholders. The
Fund will so qualify if, at the close of each quarter of its taxable year, at
least 50% of the value of its total assets consists of state, municipal, and
certain other securities, the interest on which is exempt from the regular
Federal income tax. To the extent that the Fund's dividends distributed to
shareholders are derived from such interest income and are designated as
exempt-interest dividends by the Fund, they will be excludable from a
shareholder's gross income for Federal income tax purposes. Exempt-interest
dividends, however, must be taken into account by shareholders in determining
whether their total incomes are large enough to result in taxation of up to 85%
of their Social Security benefits and certain railroad retirement benefits. The
Fund will inform shareholders annually as to the portion of the distributions
from the Fund which constitute exempt-interest dividends. In addition, for
corporate shareholders of each Fund, exempt-interest dividends may comprise part
or all of an adjustment to alternative minimum taxable income. Exempt interest
dividends that are attributable to certain private activity bonds, while not
subject to the regular Federal income tax, may constitute an item of tax
preference for purposes of the alternative minimum tax.

Individuals, trusts, estates, and corporations who are holders of
shares of the Colorado Bond Fund and who are subject to Colorado income tax will
not be subject to Colorado tax on distributions from the Colorado Bond Fund to
the extent that such distributions qualify as either (1) exempt interest
dividends of a regulated investment company under Section 852(b)(5) of the Code,
which are derived from interest on tax-exempt obligations of the State of
Colorado or any of its political subdivisions; or (2) distributions derived from
interest on obligations of the United States or its possessions included in
federal adjusted gross income.

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<PAGE>

To the extent that distributions on shares of the Fund are attributable
to sources of income not described in the preceding sentences, including capital
gains, such distributions will not be exempt from Colorado income tax.

There are no municipal income taxes in Colorado. As intangibles, shares
in the Colorado Bond Fund will be exempt from Colorado property taxes.

Changes in the tax law, including provisions relating to tax-exempt
income, frequently come under consideration. If such changes are enacted, the
tax consequences arising from an investment in the Colorado Bond Fund may be
affected. Since the Funds do not undertake to furnish tax advice, it is
important for shareholders to consult their tax advisers regularly about the tax
consequences to them of investing in one or more of the Funds.

OTHER INFORMATION

CAPITALIZATION

The capitalization of the Funds consists solely of an unlimited number
of shares of beneficial interest with no par value. The Board of Trustees may
establish additional Funds (with different investment objectives and fundamental
policies) at any time in the future. Establishment and offering of additional
Funds will not alter the rights of the shareholders. When issued, shares are
fully paid, nonassessable, redeemable and freely transferable. Shares do not
have preemptive rights or subscription rights. In any liquidation of a Fund,
each shareholder is entitled to receive his pro rata share of the net assets of
that Fund.

In the event of a liquidation or dissolution of the Funds or an
individual Fund, shareholders of a particular Fund would be entitled to receive
the assets available for distribution belonging to such Fund, and a
proportionate distribution, based upon the relative net asset values of the
respective Funds, of any general assets not belonging to any particular Fund
which are available for distribution. Shareholders of a Fund are entitled to
participate in the net distributable assets of the particular Fund involved in
liquidation, based on the number of shares of the Fund that are held by each
shareholder.

VOTING RIGHTS

Under the Declaration of Trust, the Funds are not required to hold
annual meetings of each Fund's shareholders to elect Trustees or for other
purposes. It is not anticipated that the Funds will hold shareholders' meetings
unless required by law or the Declaration of Trust. In this regard, the Trust
will be required to hold a meeting to elect Trustees to fill any existing
vacancies on the Board if, at any time, fewer than a majority of the Trustees
have been elected by the shareholders of the Funds. In addition, the Declaration
of Trust provides that the holders of not less than two-thirds of the
outstanding shares of the Funds may remove persons serving as Trustee either by
declaration in writing or at a meeting called for such purpose. The Trustees are
required to call a meeting for the purpose of considering the removal of persons
serving as Trustee if requested in writing to do so by the holders of not less
than 10% of the

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<PAGE>

outstanding shares of the Funds. To the extent required by applicable law, the
Trustees shall assist shareholders who seek to remove any person serving as
Trustee.

The Funds' shares do not have cumulative voting rights, so that the
holders of more than 50% of the outstanding shares may elect the entire Board of
Trustees, in which case the holders of the remaining shares would not be able to
elect any Trustees.

Shareholders of all of the Funds, as well as those of any other
investment portfolio now or hereafter offered by the Fund, will vote together in
the aggregate and not separately on a Fund-by-Fund basis, except as otherwise
required by law or when permitted by the Board of Trustees. Rule 18f-2 under the
1940 Act provides that any matter required to be submitted to the holders of the
outstanding voting securities of an investment company such as the Funds shall
not be deemed to have been effectively acted upon unless approved by the holders
of a majority of the outstanding shares of each Fund affected by the matter. A
Fund is affected by a matter unless it is clear that the interests of each Fund
in the matter are substantially identical or that the matter does not affect any
interest of the Fund. Under the Rule, the approval of an investment advisory
agreement or any change in a fundamental investment policy would be effectively
acted upon with respect to a Fund only if approved by a majority of the
outstanding shares of such Fund. However, the Rule also provides that the
ratification of the appointment of independent auditors, the approval of
principal underwriting contracts and the election of trustees may be effectively
acted upon by shareholders of the Funds voting together in the aggregate without
regard to a particular Fund.

As of __________, 1999, the following shareholders owned 5% or more of
the outstanding shares of the Funds as listed below:

FUND PERCENTAGE INTEREST
- -------------------------------------------------------------------
EQUITY FUND

<S> <C>
Colorado State Bank & Trust 96.05%
Attn: Trust Department
1600 Broadway
Denver. CO 80202

BOND FUND

Colorado State Bank & Trust 97.88%
Attn: Trust Department
1600 Broadway
Denver, CO 80202
</TABLE>

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<PAGE>

COLORADO BOND FUND
<S> <C>
Colorado State Bank & Trust 90.73%
Attn: Trust Department
1600 Broadway
Denver, CO 80202
</TABLE>

The directors and officers of the Funds, as a group, own less than 1% of each
Fund's shares.

CUSTODIAN AND TRANSFER AGENT

Fifth Third Bank has been appointed as the Funds' custodian. Pursuant
to a Custodian Agreement, Fifth Third Bank is responsible for holding the Funds'
cash and portfolio securities.

ALPS has been appointed as Transfer Agent for the Funds and will
perform dividend disbursing and transfer agency-related services for the Funds.

YIELD AND PERFORMANCE INFORMATION

The Funds may, from time to time, include their yields, effective
yields, tax equivalent yields and average annual total returns in advertisements
or reports to shareholders or prospective investors.

Quotations of yield for the Funds will be based on the investment
income per share earned during a particular 30-day period, less expenses accrued
during a period ("net investment income") and will be computed by dividing net
investment income by the maximum offering price per share on the last day of the
period, according to the following formula:

(6)
YIELD=2[( a-b +1) -1]
---
cd

where a = dividends and interest earned during the period, b = expenses
accrued for the period (that of any reimbursements), c = the average daily
number of shares outstanding during the period that were entitled to receive
dividends, and d = the maximum offering price per share on the last day of the
period. As of April 30, 1999 the 30 day SEC yields for the Bond and Colorado
Bond Funds were 5.41% and 3.53% including fee waivers and reimbursements and
5.33% and 3.05%% without fee waivers and reimbursements, respectively.

Quotations of tax-equivalent yield for the Bond Fund will be calculated
by: (a) dividing the portion of the Fund's yield that is exempt from both
Federal and California state income taxes by one minus a stated combined Federal
and state income tax rate; (b) dividing the portion of the Fund's yield that is
exempt from Federal income tax only by one minus a stated Federal income tax
rate, and (c) adding the figures resulting from (a) and (b) above to that
portion, if any, of the Fund's yield that is not exempt from Federal income tax.

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<PAGE>

Quotations of average annual total return will be expressed in terms of
the average annual compounded rate of return of a hypothetical investment in a
Fund over periods of 1, 5 and 10 years (up to the life of the Fund), calculated
pursuant to the following formula:

(n)
P(l+T) =ERV

(where P = a hypothetical initial payment of $1,000, T= the average
annual total return, n = the number of years, and ERV = the ending redeemable
value of a hypothetical $1,000 payment made at the beginning of the period). All
total return figures will reflect a proportional share of Fund expenses (net of
certain reimbursed expenses) on an annual basis, and will assume that all
dividends and distributions are reinvested when paid. Average annual total
returns for each Fund as of April 30, 1999 were as follows:

1 YEAR SINCE INCEPTION
<S> <C> <C>
Bond 5.49% 5.33%
Equity 9.39% 12.23%
Colorado Bond 5.40% 4.83%
</TABLE>

Quotations of yield and total return will reflect only the performance
of a hypothetical investment in the Funds during the particular time period
shown. Yield and total return for the Funds will vary based on changes in the
market conditions and the level of a Fund's expenses, and no reported
performance figure should be considered an indication of performance which may
be expected in the future.

In connection with communicating its yields or total return to current
or prospective shareholders, the Funds also may compare these figures to the
performance of other mutual funds tracked by mutual fund rating services or to
other unmanaged indices which may assume reinvestment of dividends but generally
do not reflect deductions for administrative and management costs.

Performance information for the Funds may be compared, in reports and
promotional literature, to: (i) the Standard & Poor's 500 Stock Index, Dow Jones
Industrial Average, or other unmanaged indices so that investors may compare the
Funds' results with those of a group of unmanaged securities widely regarded by
investors as representative of the securities markets in general; (ii) other
groups of mutual funds tracked by Lipper Analytical Services, a widely used
independent research firm which ranks mutual funds by overall performance,
investment objectives, and assets, or tracked by other services, companies,
publications, or persons who rank mutual funds on overall performance or other
criteria, and (iii) the Consumer Price Index (measure for inflation) to assess
the real rate of return from an investment of dividends but generally do not
reflect deductions for administrative and management costs and expenses.

TAX EQUIVALENT YIELD CALCULATIONS - COLORADO QUALITY TAX-EXEMPT FUND

[UPDATE] The Colorado Bond Fund's "tax-equivalent" yield is computed
by: (a) dividing the portion of the Fund's yield that is exempt from both
Federal and Colorado state income taxes by one minus a stated combined federal
and state income tax rate; (b) dividing the portion of the Fund's yield that is
exempt from Federal income tax be one minus a stated Federal income tax rate,
and (c) adding the figures

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<PAGE>

resulting from (a) and (b) above to that portion, if any, of the Fund's yield
that is not exempt from Federal income tax.

Tax-Equivalent Yield is based upon the combined state and Federal tax
rate assumptions of 33% (assuming a 28% federal tax rate and a 5% Colorado tax
rate) for the Colorado Quality Bond Fund.

The following table shows how to translate the yield of an investment
that is exempt from both Federal and Colorado personal income taxes into a
taxable equivalent yield for the 1998 taxable year. The last four columns of the
table show approximately how much a taxable investment would have to yield in
order to generate an after-tax (Federal and Colorado) yield of 2%, 3%, 4%, 5%
and 6%. For example, the table shows that a married taxpayer filing a joint
return with taxable income of $50,000 would have to earn a yield of
approximately 10.23% before Federal and Colorado personal income taxes in order
to earn a yield after such taxes of 7%.

1998 Tax Rates and Tax-Equivalent Yields

Federal Tax Individual tax exempt yield:
Taxable Income* Bracket**
2% 3% 4% 5% 6%
SINGLE RETURN JOINT RETURN Taxable equivalent yield:
- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ - $ 24,650 $ - $ 41,200 15.0% 2.35% 3.53% 4.71% 5.88% 7.06%
$ 24,651 $ 59,750 $ 41,201 $ 99,600 28.0% 2.78% 4.17% 5.56% 6.94% 8.33%
$ 59,751 $124,650 $ 99,601 $151,750 31.0% 2.90% 4.35% 5.80% 7.25% 8.70%
$124,651 $271,050 $151,751 $271,050 36.0% 3.13% 4.69% 6.25% 7.81% 9.38%
$271,051 above $271,051 above 39.6 % 3.31% 4.97% 6.62% 8.28% 9.93%
</TABLE>

* Taxable income (gross income after all exemptions, adjustments, and
deductions) based on 1997 tax rates.
** Excludes the impact of the phaseout of personal exemptions, limitation on
itemized deductions, and other credits, exclusions, and adjustments which
may raise a taxpayer's marginal tax rate. An increase in a shareholder's
marginal tax rate would increase that shareholder's tax-equivalent yield.

Colorado individual income tax is levied at a flat rate 5%
<TABLE>
<CAPTION>

Effective
Federal Colorado Combined Federal &
Tax Rate Tax Rate Tax Rate
<S> <C> <C>
15.0% 5.0% 19.25%
28.0% 5.0% 31.60%
31.0% 5.0% 34.45%
36.0% 5.0% 39.20%
39.6% 5.0% 42.62%
</TABLE>

-40-

<PAGE>

When your effective combined federal and Colorado state tax rate is:
19.25% 31.60% 34.45% 39.20% 42.62%

Then your tax-equivalent yield is:

TAX-EQUIVALENT YIELD*
<S> <C> <C> <C> <C> <C>
2.0% 2.48% 2.92% 3.05% 3.29% 3.49%
3.0% 3.72% 4.39% 4.58% 4.93% 5.23%
4.0% 4.95% 5.85% 6.10% 6.58% 6.97%
5.0% 6.19% 7.31% 7.63% 8.22% 8.71%
6.0% 7.43% 8.77% 9.15% 9.87% 10.46%
7.0% 8.67% 10.23% 10.68% 11.51% 12.20%
8.0% 9.91% 11.70% 12.20% 13.16% 13.94%
</TABLE>

* The Portfolio may invest a portion of its assets in obligations that are
subject to state or Federal income tax. When the Portfolio invests in these
obligations, its tax-equivalent yield will be lower. In the table above,
tax-equivalent yields are calculated assuming investments are 100%
Federally and state tax-free.

INDEPENDENT ACCOUNTANTS

Deloitte & Touche LLP serves as the independent accountants for the
Funds. Deloitte & Touche provides audit services, tax return preparation and
assistance and consultation in connection with review of SEC filings. Deloitte &
Touche's address is 555 Seventeenth Street, Suite 3600, Denver, Colorado 80202.

REGISTRATION STATEMENT

This SAI and the prospectus do not contain all the information included
in the Funds' Registration Statement filed with the SEC under the Securities Act
of 1933 with respect to the securities offered hereby, certain portions of which
have been omitted pursuant to the rules and regulations of the SEC. The
Registration Statement, including the exhibits filed therewith, may be examined
at the office of the SEC in Washington, D.C.

Statements contained herein and in the Prospectus as to the contents of
any contract or other documents referred to are not necessarily complete, and,
in each instance, reference is made to the copy of such contract or other
documents filed as an exhibit to the Registration Statement, each such statement
being qualified in all respects by such reference.

FINANCIAL STATEMENTS

The audited financial statements for each Fund for the year ended April
30, 1999 and the report of the Funds' independent public accountants are
included in the Funds' most recent Annual Report, and are incorporated herein by
reference to such report.

-41-

<PAGE>

APPENDIX
KEY TO MOODY'S BOND RATINGS

Aaa Bonds that are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred
to as "gilt edge". Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be
visualized are not likely to impair the fundamentally strong position
of such issues.

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

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

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

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

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

Caa Bonds that are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to
principal or interest.

Ca Bonds that are rated Ca represent obligations that are speculative to a
high degree. Such issues are often in default or have other marked
shortcomings.

C Bonds that are rated C are the lowest rated class of bonds, and issues
so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.

A-1

<PAGE>

KEY TO STANDARD & POOR'S BOND RATINGS

AAA Debt rated "AAA" has the highest rating assigned by Standard & Poor's
Capacity to pay interest and repay principal is extremely strong.

AA Debt rated "AA" has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in small
degree.

A Debt rated "A" has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than debt
in higher rated categories.

BBB Debt rated "BBB" is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher
rated categories.

BB Debt rated "BB" has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial or economic conditions which
could lead to inadequate capacity to meet timely interest and principal
payments. The "BB" rating category is also used for debt subordinated
to senior debt that is assigned an actual or implied "BBB" rating.

B Debt rated "B" has greater vulnerability to default but currently has
the capacity to meet interest payments and principal repayments.
Adverse business, financial or economic conditions will likely impair
capacity or willingness to pay interest and repay principal. The "B"
rating category is also used for debt subordinated to senior debt that
is assigned an actual or implied "BB-" rating.

CCC Debt rated "CCC" has a currently identifiable vulnerability to default,
and is dependent upon favorable business, financial and economic
conditions to meet timely payment of interest and repayment of
principal. In the event of adverse business, financial or economic
conditions, it is not likely to have the capacity to pay interest and
repay principal. The "CCC" rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied "B"
or "B-" rating.

CC The rating "CC" typically is applied to debt subordinated to senior
debt that is assigned an actual or implied "CCC" rating.

C The rating "C" typically is applied to debt subordinated to senior debt
which is assigned an actual or implied "CCC" debt rating. The "C"
rating may be used to cover a situation where a bankruptcy petition has
been filed, but debt service payments are continued.

CI The rating "CI" is reserved for income bonds on which no interest is
being paid.

A-2

<PAGE>

D Debt rated "D" is in payment default. The "D" rating category is used
when interest payments or principal payments are not made on the date
due even if the applicable grace period has not expired, unless S&P
believes that such payments will be made during such grace period. The
"D" rating also will be used upon the filing of a bankruptcy petition
if debt service payments are jeopardized.

A-3

<PAGE>

PART C. OTHER INFORMATION

Item 23. EXHIBITS

* (a) (1) Trust Instrument.

* (2) Revised Trust Instrument.

* (b) (1) By-Laws of Registrant.

* (2) Revised By-Laws of Registrant.

* (d) (1) Investment Advisory Contract between Registrant and GE
Investment Management, Incorporated with respect to
the U.S. Treasury Money Market Fund.

* (2) Investment Advisory Contract between Registrant and GE
Investment Management, Incorporated with respect to
the U.S. Government Money Market Fund.

** (3) Investment Advisory Contract between Registrant and
Tempest, Isenhart, Chafee, Lansdowne & Associates,
Inc. with respect to the Aristata Equity Fund.

** (4) Investment Advisory Contract between Registrant and
Tempest, Isenhart, Chafee, Lansdowne & Associates,
Inc. with respect to the Aristata Quality Bond Fund.

** (5) Investment Advisory Contract between Registrant and
Tempest, Isenhart, Chafee, Lansdowne & Associates,
Inc. with respect to the Aristata Colorado Quality
Tax-Exempt Fund.

** (6) Investment Advisory Contract between Registrant and GE
Investment Management, Incorporated with respect to
the Prime Money Market Fund.

** (e) (1) Distribution Agreement between Registrant and ALPS
Mutual Funds Services, Inc.

<PAGE>

** (2) Amended and restated Administration Agreement between
Registrant and ALPS Mutual Funds Services, Inc.

(f) None.

* (g) (1) Custodian Contract between Registrant and State Street
Bank and Trust Company.

* (2) Custodian Contract between Registrant and Fifth Third
Bank.

** (h) (1) Transfer Agency and Service Agreement between
Registrant and ALPS Mutual Funds Services, Inc.

** (2) Bookkeeping and Pricing Agreement between Registrant
and ALPS Mutual Funds Services, Inc.

*** (3) Subscription Agreement.

(i) Opinion and Consent of Davis, Graham & Stubbs LLP,
counsel to Registrant.

[ to be provided by amendment ]

(j) Consent of Independent Public Accountants.

[ to be provided by amendment ]

(k) None

(l) None

**** (m) Distribution Plan - Prime Money Market Fund
Class II

(m) Omitted by Rule Change

**** (o) Rule 18f-3 Plan

* Filed with Post-Effective Amendment No. 7 to Registrant's Registration
Statement on August 28, 1997.
** Filed with Post-Effective Amendment No. 10 to Registrant's Registration
Statement on June 12, 1998

<PAGE>

*** Filed with Post-Effective Amendment No. 5 to Registrant's Registration
Statement on August 28, 1996.
**** Filed herewith.

Item 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.

None.

Item 25. INDEMNIFICATION.

As permitted by Section 17(h) and (i) of the Investment Company Act of
1940 (the "1940 Act") and pursuant to Article X of the Registrant's Trust
Instrument (Exhibit 1 to the Registration Statement), Section 7 of each
Investment Advisory Agreement (Exhibits 5(a), 5(b), 5(c), 5(d) and 5(e) to this
Registration Statement) and Sections 1.9 and 1.10 of the Distribution Agreement
(Exhibit 6(a) to this Registration Statement), officers, trustees, employees and
agents of the Registrant will not be liable to the Registrant, any shareholder,
officer, trustee, employee, agent or other person for any action or failure to
act, except for bad faith, willful misfeasance, gross negligence or reckless
disregard of duties, and those individuals may be indemnified against
liabilities in connection with the Registrant, subject to the same exceptions.

Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Securities Act") may be permitted to trustees, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant understands that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.

The Registrant has purchased an insurance policy insuring its officers
and trustees against liabilities, and certain costs of defending claims against
such officers and trustees, to the extent such officers and trustees are not
found to have committed conduct constituting willful misfeasance, bad faith,
gross negligence or reckless disregard in the performance of their duties. The
insurance policy also insures the Registrant against the cost of indemnification
payments to officers under certain circumstances.

Section 7 of each Investment Advisory Contract and Section 1.9 of the
Distribution Contract limit the liability of GE Investment Management, Inc.,
Tempest, Isenhart, Chafee, Lansdowne & Associates, Inc. and ALPS Mutual Funds
Services, Inc.,

<PAGE>

respectively, to liabilities arising from willful misfeasance, bad faith or
gross negligence in the performance of their respective duties or from reckless
disregard by them of their respective obligations and duties under the
agreements.

The Registrant hereby undertakes that it will apply the indemnification
provisions of its Declaration of Trust, By-Laws, Investment Advisory Contracts
and Distribution Contract in a manner consistent with Release No. 11330 of the
Securities and Exchange Commission under the 1940 Act so long as the
interpretations of Section 17(h) and 17(i) of such Act remain in effect and are
consistently applied.

Item 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISERS

With respect to all Funds, reference is made to "Management of the
Trust" in the Prospectus for each such Fund forming Part A and "Management" in
the Statement of Additional Information for such Funds forming Part B of this
Registration Statement.

The list required by this Item 28 of officers and directors of GEIM,
together with information as to any other business, profession, vocation or
employment of a substantial nature engaged in by those officers and directors
during the past two years, is incorporated by reference to Schedules A and D of
Form ADV filed by GEIM pursuant to the Investment Advisers Act of 1940, as
amended (SEC File No. 801-31947).

The list required by this Item 28 of officers and directors of Tempest,
Isenhart, Chafee, Lansdowne & Assocs. ("Tempest"), together with information as
to any other business, profession, vocation or employment of a substantial
nature engaged in by those officers and directors during the past two years, is
incorporated by reference to Schedules A and D of Form ADV filed by Tempest
pursuant to the Investment Advisers Act of 1940, as amended (SEC File No.
801-11809-3).

Item 27. PRINCIPAL UNDERWRITER

(a) ALPS Mutual Funds Services, Inc. acts as
Distributor/Underwriter for various other unrelated registered
investment companies.

(b) Officers and Directors
<TABLE>
<CAPTION>

Name and Principal Positions and Offices with Positions and Offices with
Business Address* Registrant Underwriter
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
W. Robert Alexander Chairman of the Board of Trustees and Chairman and Chief Executive
President Officer and Secretary

Arthur J. L. Lucey None President and Director
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
Name and Principal Positions and Offices with Positions and Offices with
Business Address* Registrant Underwriter
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>

Thomas A. Carter None Chief Financial Officer

Edmund J. Burke None Executive Vice President

Russell C. Burk Secretary General Counsel

Jeremy O. May Assistant Treasurer Vice Presdent

William N. Paston Vice President and Treasurer Vice President

Rick A. Pederson None Director

Chris Woessner None Director

John Hannon None Director
</TABLE>

- --------------------------------
*All addresses are 370 Seventeenth Street, Suite 3100, Denver, Colorado 80202.

Item 28. LOCATION OF ACCOUNTS AND RECORDS

All accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the rules thereunder are
maintained at the offices of ALPS Mutual Funds Services, Inc., General Electric
Investment Management, Inc. and Tempest, Isenhart, Chafee, Lansdowne &
Associates, Inc..

Item 29. MANAGEMENT SERVICES

Not applicable.

Item 30. UNDERTAKINGS.

(a) Registrant undertakes to call a meeting of shareholders for
the purpose of voting upon the removal of a trustee if
requested to do so by the holders of at least 10% of the
Registrant's outstanding shares.

<PAGE>

(a) Registrant undertakes to provide the support to shareholders
specified in Section 16(c) of the 1940 Act as though that
section applied to the Registrant.

(b) Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of Registrant's latest
annual report upon request and without a charge.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and Rule
485(a) thereunder and the Investment Company Act of 1940, the Registrant
certifies that it has duly caused this Post-Effective Amendment No. 12 of its
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the city of Denver, and State of Colorado, on June 29, 1999.

FINANCIAL INVESTORS
TRUST (Registrant)

By: /s/ W. ROBERT ALEXANDER
-------------------------
W. Robert Alexander
Trustee and President

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.

Signature Title Date
- --------- ----- ----

/s/ W. ROBERT ALEXANDER Trustee and June 29, 1999
- ------------------------- President
W. Robert Alexander

/s/ ROBERT E. LEE Trustee June 29, 1998
- ------------------
Robert E. Lee

/s/ MARY K. ANSTINE Trustee June 29, 1999
- --------------------
Mary K. Anstine

/s/ EDWIN B. CROWDER Trustee June 29, 1999
- ---------------------
Edwin B. Crowder

/s/ JOHN R. MORAN, JR Trustee June 29, 1999
- ----------------------
John R. Moran, Jr.

<PAGE>

INDEX TO EXHIBITS
FINANCIAL INVESTORS TRUST

Exhibit Number

(m) Distribution Plan - Prime Money Market Fund Class II

(o) Rule 18f-3 Plan

<PAGE>

DISTRIBUTION PLAN
Financial Investors Trust Prime Money Market Fund: Class II

This Distribution Plan (the Distribution Plan), made as of April 21, 1998, is
the plan of Financial Investors Trust (the Trust), a business trust organized
and existing under the laws of the state of Delaware, on behalf of the Prime
Money Market Fund (the Fund).

1. This Distribution Plan, when effective in accordance with its terms, shall be
the written plan contemplated by Securities and Exchange Commission Rule 12b-1
under the Investment Company Act of 1940, as amended (the 1940 Act), for shares
of beneficial interest of Class II (Class II Shares) of the Fund.

2. The Trust has entered into a General Distribution Agreement on behalf of the
Fund with ALPS Mutual Funds Services, Inc. (ALPS) under which ALPS uses all
reasonable efforts, consistent with its other business, to secure purchasers of
the Fund's shares, including Class II Shares. Such efforts may include, but
neither are required to include nor are limited to, the following:

(1) formulation and implementation of marketing and promotional
activities, such as mail promotions and television, radio, newspaper,
magazine and other mass media advertising;

(2) preparation, printing and distribution of sales literature;

(3) preparation, printing and distribution of prospectuses of the Fund and
reports to recipients other than existing shareholders of the Fund;

(4) obtaining such information, analyses and reports with respect to
marketing and promotional activities as ALPS may from time to time,
deem advisable;

(5) making payments to securities dealers and others engaged in the sales
of Class II Shares, and

(6) providing training, marketing and support to such dealers and others
with respect to the sale of Class II Shares.

3. In consideration for the services provided and the expenses incurred by ALPS
pursuant to the General Distribution Agreement, Class II of the Fund shall pay
to ALPS a fee at the annual rate of up to (and including) .25% of such Class'
average daily net assets throughout the month, or such lesser amount as may be
established form time to time by the Trustees of the Trust by resolution, as
specified in this paragraph; provided that, for any period during which the
total of such fees and all other expenses of the Fund would exceed the gross
income of that Fund (or of Class II thereof), such fee shall be reduced by such
excess. Such fee shall be computed daily and paid monthly. The determination of
daily net assets for the Fund shall be made at the close of business each day
throughout the month and computed in the manner specified in the Fund's then
current Prospectus for the determination of the net asset value of Class II
Shares of the Fund, but shall excluded assets attributable to any other Class of
the Fund. ALPS may use all or any portion of the fee received pursuant to the
Distribution Plan to compensate securities dealers or other persons who have
engaged in the sale of Class II Shares pursuant to

<PAGE>

agreements with ALPS, or to pay any of the expenses associated with other
activities authorized under paragraph 2 hereof.

4. This Distribution Plan became effective with respect to Class II of the Fund
as of April 21, 1998, this Distribution Plan having been approved (1) by a vote
of majority of the Trustees of the Trust, including a majority of Trustees who
are not "interested persons" of the Trust (as defined in the 1940 Act) and who
have no direct or indirect financial interest in the operation of this
Distribution Plan or in any agreement related to the Distribution Plan (the
Independent Trustees), cast in person at a meeting called for the purpose of
voting on this Distribution Plan; and (2) by a vote of a majority of the
outstanding voting securities (as such term in defined in Section 2(a)(42) of
the 1940 Act) of Class II of the Fund.

5. During the existence of this Distribution Plan, the Trust will commit the
selection and nomination of those Trustees who are not interested persons of the
Trust to the discretion of such Independent Trustees.

6. This Distribution Plan shall, unless terminated as hereinafter provided,
remain in effect until April 21, 1999 and from year to year thereafter;
provided, however, that such continuance is subject to approval annually by a
vote of a majority of the Trustees of the Trust, including a majority of the
Independent Trustees, cast in person at a meeting called for the purpose of
voting on this Distribution Plan.

7. This Distribution Plan may be amended with respect to Class II Shares of the
Fund, at any time by the Board of Trustees, provided that (a) any amendment to
increase materially the maximum fee provided for in paragraph 3 hereof, must be
approved by a vote of a majority of the outstanding voting securities (as such
term is defined in Section 2(a)(42) of the 1940 Act) of class II of the Fund,
and b) any material amendment of this Distribution Plan must be approved in the
manner provided in paragraph 4(1) above.

8. This Distribution Plan may be terminated with respect to Class II Shares of
the Fund, at any time, without the payment of any penalty, by vote of a majority
of the Independent Trustees or by a vote of a majority of the outstanding voting
securities (as such term is defined in Section 2(a)(42) of the 1940 Act) of
Class II of the Fund.

9. During this existence of this Distribution Plan, the Trust shall require ALPS
to provide the Trust, for review by the Trust's Trustees, and the Trustees shall
review, at least quarterly, a written report of the amounts expended in
connection with financing any activity primarily intended to result in the sale
of Class II Shares (making estimates of such costs where necessary or desirable)
and the purposes for which such expenditures were made.

10. This Distribution Plan does not require ALPS to perform any specific type or
level of distribution activities or to incur any specific level of expenses for
activities primarily intended to result in the sale of shares of Class II.

<PAGE>

11. In the event that Rule 2830 of the NASD Conduct Rules precludes the Fund (or
any NASD member) from imposing a sales charge (as defined in that Rule) or any
portion thereof, then ALPS shall not make payments hereunder from the date that
the Fund discontinues or is required to discontinue imposition of some or all of
its sales charges. If the Fund resumes imposition of some or all of its sales
charge, ALPS will receive payments hereunder.

12. Consistent with the limitation of shareholder and Trustee liability as set
forth in the Trust's Declaration of Trust, any obligations assumed by the Trust,
a Fund or Class II thereof pursuant to this Plan and any agreements related to
this Plan shall be limited in all cases to the proportionate ownership of Class
II of the Fund and its assets, and shall not constitute obligations of any
shareholder of any other Class of the Fund or other Funds of the Trust or of any
Trustee.

13. If any provision of the Distribution Plan shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Distribution
Plan shall not be affected thereby.

<PAGE>

FINANCIAL INVESTORS TRUST
Prime Money Market Fund
Rule 18f-3 Plan

RULE 18f-3

Pursuant to Rule 18f-3 ("Rule 18f-3") of the Investment Company Act of
1940, as amended (the "Act"), an open-end management investment company whose
shares are registered on Form N-1A may issue more than one class of voting stock
(hereinafter referred to as "Shares"), provided that these multiple classes
differ either in the manner of distribution, or in services they provide to
shareholders, or both. The Prime Money Market Fund (the "Fund") a portfolio of
Financial Investors Trust (the "Trust"), a registered open-end investment
company whose shares are registered on Form N-1A, and any other existing fund or
future fund or series created by the trust, may offer to shareholders multiple
classes of shares in the Funds in accordance with Rule 18f-3 Plan as described
herein, pursuant to approval by the Board of Trustees.

AUTHORIZED CLASSES

The Fund may issue one or more classes of shares, in the same or
separate prospectuses which may include Class I and Class II (collectively, the
"Classes" and individually, each a "Class"). The Class I shares (as defined in
the respective Fund prospectus) are subject to a $1 million minimum initial
investment. Class II shares have a $25,000 minimum initial investment. Class I
and Class II shares are sold without a sales load. Class II shares may also be
offered with fees for distribution, servicing and marketing of such shares
("12b-1 Fees"), as well as fees for shareholder servicing ("Service Organization
Fees" and "Shareholder Servicing Fees") of such shares pursuant to a Servicing
Agreement and Shareholder Servicing Agreement, respectively.

Class I shares are available to investors who do not desire enhanced
shareholder servicing. Class I shares do not impose 12b-1 Fees, Service
Organization Fees or Shareholder Servicing Fees.

The Classes of shares issued by any Fund will be identical in all
respects except of Class designation, allocation of certain expenses directly
related to the distribution or service arrangement, or both, for a Class, and
voting rights--each Class votes separately with respect to issues affecting only
that Class. Shares of all Classes will represent interests in the same
investment fund; therefore each Class is subject to the same investment
objectives, policies and limitations.

CLASS EXPENSES

Each Class of shares shall bear expenses, not including advisory or
custodial fees or other expenses related to the management of the Fund's assets,
that are directly attributable to the kind or degree of services rendered to
that Class (Class Expenses").

<PAGE>

Class Expenses, including the management fee or the fee of other service
providers, may be waived or reimbursed by the Fund's investment adviser,
underwriter or any other provide of services to the Funds with respect to
each Class of a Fund on a Class by Class basis.

EXCHANGE PRIVILEGES

Shareholders may exchange shares of one Fund for shares of any of the
other portfolios of the Trust which are available for sale in their state.