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SUPPLEMENT DATED DECEMBER 31, 1996
TO PROSPECTUS DATED MAY 1, 1996
THE PALLADIAN TRUST
The following supplements the "Summary of Expenses" section on page 5.
EXPENSE LIMITATION
Under the terms approved by the Board of Trustees of the Trust, Palladian
Advisors, Inc. ("PAI" or the "Manager") has agreed to limit operating expenses
and reimburse those expenses to the extent that each Portfolio's "other
expenses" (I.E., expenses other than management fees) from September 11, 1996
through January 31, 1997 exceed the expense limitation for that Portfolio. The
chart below sets forth the expense limitation for each Portfolio. The
limitation is expressed as an annualized percentage of average daily net assets.
Limitation on
Portfolio "other expenses"
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Value 0.70%
Growth 0.70%
International Growth 1.20%
Global Strategic Income 1.20%
Global Interactive/Telecomm 1.20%
PAI, if agreed to by the Board, may continue the voluntary expense limitation
past January 31, 1997. For the two years following the date that the expense
limitation ends, each Portfolio will reimburse PAI for any fees it waived or
expenses it reimbursed pursuant to the expense limitation, provided that such
reimbursement does not cause the Portfolio's "other expense" ratio to exceed the
expense limitation for that Portfolio set forth in the chart above. After this
two year period, the Portfolios' reimbursement liability to PAI will cease. In
addition, if at any time the investment management agreement between PAI and the
Portfolios terminates, the Portfolios' reimbursement liability to PAI will
cease. Under the terms of the agreement, the Board of Trustees or the
Portfolios' shareholders may terminate the agreement at any time upon 60 days
notice.
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CAPITAL CONTRIBUTION
On September 24, 1996, PAI agreed to voluntarily contribute capital to the
Portfolios as follows:
Capital
Portfolio Contribution
---------------------------------------------------
Value $51,906.35
Growth $49,230.63
International Growth $34,947.29
Global Strategic Income $52,077.06
Global Interactive/Telecomm $40,662.47
The amounts were contributed to offset expenses accrued to the Portfolios in
excess of the expense limitations described in the previous section during the
period from the commencement of operations to September 10, 1996 when the
expense limitations became effective. PAI received no shares of beneficial
interest or other consideration in exchange for these contributions. These
capital contributions resulted in an increase to paid capital for each
Portfolio.
