PROSPECTUS March 11, 1996
MENTOR INTERNATIONAL PORTFOLIO
MENTOR INTERNATIONAL PORTFOLIO seeks long-term capital appreciation by
investing in a diversified portfolio of equity securities of issuers outside the
United States. Mentor Perpetual Advisors, L.L.C. is the Portfolio's investment
adviser. Shares of the Portfolio are being offered principally to institutions
and high net-worth individual investors. This Portfolio may use leverage-that
is, it may borrow money to purchase additional portfolio securities, which
involves special risks.
This Prospectus sets forth concisely the information about the
Portfolio that a prospective investor should know before investing. Please read
this Prospectus and retain it for future reference. INVESTORS CAN FIND MORE
DETAILED INFORMATION IN THE MARCH 11, 1996 STATEMENT OF ADDITIONAL INFORMATION,
AS AMENDED FROM TIME TO TIME. FOR A FREE COPY OF THE STATEMENT, CALL MENTOR
DISTRIBUTORS, INC. AT 1-800-869-6042. The Statement has been filed with the
Securities and Exchange Commission and is incorporated into this Prospectus by
reference. The Portfolio's address is P.O. Box 1357, Richmond, Virginia
23286-0109.
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MENTOR DISTRIBUTORS, INC.
DISTRIBUTOR
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESEN-
TATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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EXPENSE SUMMARY
Expenses are one of several factors to consider when investing
in the Portfolio. The following table summarizes an investor's maximum
transaction costs from investing in the Portfolio and expenses the Portfolio
expects to incur in its first full fiscal year. The Example shows the cumulative
expenses attributable to a hypothetical $1,000 investment in the Portfolio over
specified periods.
SHAREHOLDER TRANSACTION EXPENSES:
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fees None
Exchange Fee None
ANNUAL PORTFOLIO OPERATING EXPENSES:
(as a percentage of average net assets)
Management Fees 0.00%
12b-1 Fees 0.00%
Other Expenses* 0.30%
----
Total Portfolio Operating Expenses* 0.30%
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*Other Expenses and Total Portfolio Operating Expenses reflect a voluntary
expense limitation currently in effect. In the absence of this expense
limitation, Total Portfolio Operating Expenses are estimated to be 0.37%.
EXAMPLE
An investment of $1,000 in the Portfolio would incur the
following expenses, assuming 5% annual return and redemption at the end of each
period:
1 year $4
3 years $10
This information is provided to help investors understand the
expenses of investing in the Portfolio and an investor's share of the estimated
operating expenses of the Portfolio. The Example should not be considered a
representation of future performance; actual expenses may be more or less than
those shown.
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INVESTMENT OBJECTIVE AND POLICIES
MENTOR INTERNATIONAL PORTFOLIO'S INVESTMENT OBJECTIVE IS
LONG-TERM CAPITAL APPRECIATION. The Portfolio is designed for institutional
investors who believe that investment in a diversified portfolio of securities
of issuers located outside the U.S. offers the potential for long-term capital
appreciation.
The Portfolio invests in a diversified portfolio of securities of
issuers located outside the United States. The Portfolio's investments will
normally include common stocks, preferred stocks, securities convertible into
common stocks or preferred stocks, and warrants to purchase common stocks or
preferred stocks. The Portfolio may also invest to a lesser extent in debt
securities and other types of investments if Mentor Perpetual believes they
would help achieve the Portfolio's objective. The Portfolio may hold a portion
of its assets in cash or money market instruments.
The Portfolio will not limit its investments to any particular
type of company. The Portfolio may invest in companies, large or small, whose
earnings are believed to be in a relatively strong growth trend, or in companies
in which significant further growth is not anticipated but whose market value
per share is thought to be undervalued.
It is likely that, at times, a substantial portion of the
Portfolio's assets will be invested in securities of issuers in emerging
markets, including under-developed and developing nations. Investment in
emerging markets are subject to the same risks applicable to foreign investments
generally, although those risks may be increased due to conditions in such
markets. For example, the securities markets and legal systems in emerging
markets may only be in a developmental stage and may provide few, or none, of
the advantages or protections of markets or legal systems available in more
developed countries. Although many of the securities in which the Portfolio may
invest are traded on securities exchanges, they may trade in limited volume, and
the exchanges may not provide all of the conveniences or protections provided by
securities exchanges in more developed markets. The Portfolio may also invest a
substantial portion of its assets in securities traded in the over-the-counter
markets and not on any exchange, which may affect the liquidity of the
investment and expose the Portfolio to the credit risk of its counterparties in
trading those investments. See "Other investment practices--Foreign
securities."
Fixed-income securities in which the Portfolio may invest will be
of investment grade. A security will be deemed to be of "investment grade" if,
at the time of investment by the Portfolio, the security is rated at least Baa3
by Moody's Investors Service, Inc. or BBB- by Standard & Poor's, or at a
comparable rating by another nationally recognized rating organization.
Securities rated Baa or BBB lack outstanding investment characteristics and have
speculative characteristics and are subject to greater credit and market risks
than higherrated securities. The Portfolio will not be required to dispose of a
security held by it if the security's rating falls below investment grade,
although Mentor Perpetual will consider whether continued investment in the
security is consistent with the Portfolio's investment objectives. See the
Statement of Additional Information for descriptions of securities ratings
assigned by Moody's and Standard & Poor's.
Mentor Perpetual may under unusual circumstances implement
temporary "defensive" strategies in order to reduce fluctuations in the value of
the Portfolio's assets. At those times, the Portfolio may invest any portion of
its assets in cash or cash equivalents, money market instruments, or other
short-term, high-quality investments Mentor Perpetual considers consistent with
such defensive strategies.
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OTHER INVESTMENT PRACTICES AND RISKS
The Portfolio may engage in the other investment practices
described below. See the Statement of Additional Information for a more detailed
description of these practices and certain risks they may involve.
INVESTMENTS IN SMALLER COMPANIES. The Fund may invest a
substantial portion of its assets in securities issued by small companies. Such
companies may offer greater opportunities for capital appreciation than larger
companies, but investments in such companies may involve certain special risks.
Such companies may have limited product lines, markets, or financial resources
and may be dependent on a limited management group. While the markets in
securities of such companies have grown rapidly in recent years, such securities
may trade less frequently and in smaller volume than more widely held
securities. The values of these securities may fluctuate more sharply than those
of other securities, and the Portfolio may experience some difficulty in
establishing or closing out positions in these securities at prevailing market
prices. There may be less publicly- available information about the issuers of
these securities or less market interest in such securities than in the case of
larger companies, and it may take a longer period of time for the prices of such
securities to reflect the full value of their issuers' underlying earnings
potential or assets.
Some securities of smaller issuers may be restricted as to resale
or may otherwise be highly illiquid. The ability of the Portfolio to dispose of
such securities may be greatly limited, and the Portfolio may have to continue
to hold such securities during periods when Mentor Perpetual would otherwise
have sold the security. It is possible that Mentor Perpetual or its affiliates
or clients may hold securities issued by the same issuers, and may in some cases
have acquired the securities at different times, on more favorable terms, or at
more favorable prices, than the Portfolio.
FOREIGN SECURITIES. Investments in foreign securities entail
certain risks. The Portfolio may invest in securities principally traded in
foreign markets. Since foreign securities are normally denominated and traded in
foreign currencies, the values of the Portfolio's assets may be affected
favorably or unfavorably by currency exchange rates and exchange control
regulations. There may be less information publicly available about a foreign
company than about a U.S. company, and foreign companies are not generally
subject to accounting, auditing, and financial reporting standards and practices
comparable to those in the United States. The securities of some foreign
companies are less liquid and at times more volatile than securities of
comparable U.S. companies. Foreign brokerage commissions and other fees are also
generally higher than in the United States. Foreign settlement procedures and
trade regulations may involve certain risks (such as delay in payment or
delivery of securities or in the recovery of the Portfolio's assets held abroad)
and expenses not present in the settlement of domestic investments.
In addition, there may be a possibility of nationalization or
expropriation of assets, imposition of currency exchange controls, confiscatory
taxation, political or financial instability, and diplomatic developments which
could affect the value of the Portfolio's investments in certain foreign
countries. Legal remedies available to investors in certain foreign countries
may be more limited than those available with respect to investments in the
United States or in other foreign countries. In the case of securities issued by
a foreign governmental entity, the issuer may in certain circumstances be unable
or unwilling to meet its obligations on the securities in accordance with their
terms, and the Portfolio may have limited recourse available to it in the event
of default. The laws of some foreign countries may limit the Portfolio's ability
to invest in securities of certain issuers located in those foreign countries.
Special tax considerations apply to foreign securities. The Portfolio may buy or
sell foreign currencies and options and futures contracts on foreign currencies
for hedging purposes in connection with its foreign investments.
BORROWING AND LEVERAGE. The Portfolio may borrow money to invest
in additional portfolio securities. This practice, known as "leverage",
increases the Portfolio's market exposure and its risk. When the Portfolio has
borrowed money for leverage and its investments increase or decrease in value,
the Portfolio's net asset value will normally increase or decrease more than if
it had not borrowed money. The interest the Portfolio must pay on borrowed money
will reduce the amount of any potential gains or increase any losses. The extent
to which the Portfolio will borrow money, and the amount it may borrow, depend
on market conditions and interest rates. Successful use of leverage depends on
Mentor Perpetual's ability to predict market movements correctly.
OPTIONS AND FUTURES. The Portfolio may buy and sell call and put
options to hedge against changes in net asset value or to realize a greater
current return. In addition, through the purchase and sale of futures contracts
and
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related options, the Portfolio may at times seek to hedge against fluctuations
in net asset value and, to the extent consistent with applicable law, to
increase its investment return.
The Portfolio's ability to engage in options and futures
strategies will depend on the availability of liquid markets in such
instruments. It is impossible to predict the amount of trading interest that may
exist in various types of options or futures contracts. Therefore, there is no
assurance that the Portfolio will be able to utilize these instruments
effectively for the purposes stated above. Transactions in options and futures
involve certain risks which are described below and in the Statement of
Additional Information.
Transactions in options and futures contracts involve brokerage
costs and may require the Portfolio to segregate assets to cover its outstanding
positions. For more information, see the Statement of Additional Information.
Index futures and options. The Portfolio may buy and sell index
futures contracts ("index futures") and options on index futures and on indices
for hedging purposes (or may purchase warrants whose value is based on the value
from time to time of one or more foreign securities indices). An "index futures"
is a contract to buy or sell units of a particular bond or stock index at an
agreed price on a specified future date. Depending on the change in value of the
index between the time when the Portfolio enters into and terminates an index
futures or option transaction, the Portfolio realizes a gain or loss. The
Portfolio may also, to the extent consistent with applicable law, buy and sell
index futures and options to increase its investment return.
Risks related to options and futures strategies. Options and
futures transactions involve costs and may result in losses. Certain risks arise
because of the possibility of imperfect correlations between movements in the
prices of futures and options and movements in the prices of the underlying
security or index or of the securities held by the Portfolio that are the
subject of a hedge. The successful use by the Portfolio of the strategies
described above further depends on the ability of Mentor Perpetual to forecast
market movements correctly. Other risks arise from the Portfolio's potential
inability to close out futures or options positions. Although the Portfolio will
enter into options or futures transactions only if Mentor Perpetual believes
that a liquid secondary market exists for such options or futures contract,
there can be no assurance that the Portfolio will be able to effect closing
transactions at any particular time or at an acceptable price. Certain
provisions of the Internal Revenue Code may limit the Portfolio's ability to
engage in options and futures transactions.
The Portfolio generally expects that its options transactions
will be conducted on recognized exchanges. The Portfolio may in certain
instances purchase and sell options in the over-the-counter markets . The
Portfolio's ability to terminate options in the over-the-counter markets may be
more limited than for exchange-traded options and may also involve the risk that
securities dealers participating in such transactions would be unable to meet
their obligations to the Portfolio. The Portfolio will, however, engage in
over-the-counter transactions only when appropriate exchange-traded transactions
are unavailable and when, in the opinion of Mentor Perpetual, the pricing
mechanism and liquidity of the over-the-counter markets are satisfactory and the
participants are responsible parties likely to meet their obligations.
The Portfolio will not purchase futures or options on futures or
sell futures if as a result the sum of the initial margin deposits on the
Portfolio's existing futures positions and premiums paid for outstanding options
on futures contracts would exceed 5% of the Portfolio's assets. (For options
that are "in-the-money" at the time of purchase, the amount by which the option
is "in-the-money" is excluded from this calculation.)
REPURCHASE AGREEMENTS AND SECURITIES LOANS. The Portfolio may
enter into repurchase agreements and securities loans. Under a repurchase
agreement, the Portfolio purchases a debt instrument for a relatively short
period (usually not more than one week), which the seller agrees to repurchase
at a fixed time and price, representing the Portfolio's cost plus interest.
Under a securities loan, the Portfolio lends portfolio securities. The Portfolio
will enter into repurchase agreements and securities loans only with commercial
banks and with registered broker-dealers who are members of a national
securities exchange or market makers in government securities, and in the case
of repurchase agreements, only if the debt instrument subject to the repurchase
agreement is a U.S. Government security. These transactions must be fully
collateralized at all times, but involve some risk to the Portfolio if the other
party should default on its obligations and the Portfolio is delayed or
prevented from recovering the collateral. If the other party
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should become involved in bankruptcy or insolvency proceedings, it is possible
that the Portfolio may be treated as an unsecured creditor and be required to
return the underlying collateral to the other party's estate.
PORTFOLIO TURNOVER. The length of time the Portfolio has held a
particular security is not generally a consideration in investment decisions.
The investment policies of the Portfolio may lead to frequent changes in the
Portfolio's investments, particularly in periods of volatile market movements. A
change in the securities held by the Portfolio is known as "portfolio turnover."
Portfolio turnover generally involves some expense to the Portfolio, including
brokerage commissions or dealer mark-ups and other transaction costs on the sale
of securities and reinvestment in other securities. Such sales may result in
realization of taxable capital gains. The Portfolio's annual portfolio turnover
rate is expected to be less than 200% for the current fiscal year.
As a matter of policy, the Trustees will not materially change
the Portfolio's investment objective without shareholder approval. (Any such
change could, of course, result in a change in the nature of the securities in
which the Portfolio may invest and the risks involved in an investment in the
Portfolio.)
MANAGEMENT OF THE PORTFOLIO
The Trustees of the Trust are responsible for generally
overseeing the conduct of the Trust's business. MENTOR PERPETUAL ADVISORS
L.L.C., located at 901 East Byrd Street, Richmond, Virginia 23219, acts as
investment adviser to the Portfolio pursuant to a Management Contract between
the Trust and Mentor Perpetual. MENTOR INVESTMENT GROUP, INC. ("Mentor") serves
as administrator to the Portfolio. Neither Mentor Perpetual nor Mentor receives
compensation from the Portfolio for the performance of such services. Mentor
Perpetual is a newly organized investment advisory firm owned equally by
Perpetual plc and Mentor. The Perpetual organization currently serves as
investment adviser for assets of more than $6 billion. It clients include 28
unit investment trusts and other public investment pols for over 150 clients,
including private individuals, charities, pension plans, and life assurance
companies. Mentor Perpetual currently serves as investment adviser to the Mentor
Perpetual Global Portfolio, an open-end mutual fund which is a series of The
Mentor Funds. Investment decisions for the Portfolio are made by a team of
investment professionals at Mentor Perpetual. Mentor is a wholly owned
subsidiary of Wheat First Butcher Singer, Inc. ("Wheat First Butcher Singer").
Wheat First Butcher Singer, through other subsidiaries, also engages in
securities brokerage, investment banking, and related businesses.
Mentor Perpetual makes investment decisions for the Portfolio and
places the purchase and sale orders for the Portfolio's portfolio transactions.
In selecting broker-dealers, Mentor Perpetual may consider research and
brokerage services furnished to it and its affiliates. Subject to seeking the
best overall terms available, Mentor Perpetual may consider sales of shares of
the Portfolio (and, if permitted by law, of other funds in the Mentor family) as
a factor in the selection of broker-dealers to execute portfolio transactions
for the Portfolio. Mentor Perpetual may at times cause the Portfolio to pay
commissions to broker-dealers affiliated with Mentor Perpetual.
HOW THE PORTFOLIO VALUES ITS SHARES
The Portfolio calculates the net asset value of its shares by
dividing the total value of its assets, less liabilities, by the number of its
shares outstanding. Shares are valued as of the close of regular trading on the
New York Stock Exchange each day the Exchange is open. Portfolio securities for
which market quotations are readily available are stated at market value.
Short-term investments that will mature in 60 days or less are stated at
amortized cost, which has been determined to approximate the fair market value
of such investments. All other securities and assets are valued at their fair
values.
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Securities quoted in foreign currencies are translated into U.S.
dollars at the current exchange rates or at such other rates as the Trustees may
determine in computing net asset value. As a result, fluctuations in the values
of such currencies in relation to the U.S. dollar will affect the net asset
value of Portfolio shares even though there has not been any change in the
values of such securities as quoted in such foreign currencies.
HOW DISTRIBUTIONS ARE MADE
The Portfolio distributes net investment income and any net
realized capital gains at least annually. Distributions from capital gains are
made after applying any available capital loss carryovers. All Portfolio
distributions will be invested in additional Portfolio shares, unless the
shareholder instructs the Portfolio otherwise.
TAXES
The Portfolio intends to qualify as a "regulated investment
company" for federal income tax purposes and to meet all other requirements that
are necessary for it to be relieved of federal taxes on income and gains it
distributes to shareholders. The Portfolio will distribute substantially all of
its net investment income and capital gain net income on a current basis.
The following is intended principally for shareholders subject to
federal income taxation:
All Portfolio distributions will be taxable to shareholders as
ordinary income, except that any distributions of net capital gain will be taxed
as long-term capital gain, regardless of how long a shareholder has held the
shares (although the loss on a sale of shares held for six months or less will
be treated as long-term capital loss to the extent of any capital gain
distribution received with respect to those shares). Distributions will be
taxable as described above whether received in cash or in shares through the
reinvestment of distributions. Early in each year the Trust will notify
shareholders of the amount and tax status of distributions paid by the Portfolio
for the preceding year. In buying or selling securities for the Portfolio,
Mentor Perpetual will not normally take into account the effect any purchase or
sale of securities will have on the tax positions of the Portfolio's
shareholders.
Shareholders of the Portfolio who are U.S. citizens or residents
may be able to claim a foreign tax credit or deduction on their U.S. income tax
returns with respect to foreign taxes paid by the Portfolio. If, at the end of
the fiscal year of the Portfolio, more than 50% of the Portfolio's total assets
are represented by securities of foreign corporations, the Portfolio intends to
make an election permitted by the Internal Revenue Code to treat any foreign
taxes it paid as paid by its shareholders. In that case, shareholders who are
U.S. citizens, U.S. corporations, and, in some cases, U.S. residents will be
required to include in U.S. taxable income their pro rata share of such taxes,
but may then be entitled to claim a foreign tax credit or deduction (but not
both) for their share of such taxes.
The foregoing is a summary of certain federal income tax
consequences of investing in the Portfolio. Dividends and distributions also may
be subject to state and local taxes. Shareholders are urged to consult their tax
advisers regarding specific questions as to federal, state, or local taxes.
Non-U.S. investors should consult their tax advisers concerning the tax
consequences of ownership of shares of the Portfolio, including the possibility
that distributions may be subject to a 30% United States withholding tax (or a
reduced rate of withholding provided by treaty).
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PURCHASE OF SHARES
Shares of the Portfolio are sold at the net asset value next
determined after a purchase order is received by the Portfolio. Purchase orders
that are received prior to the close of trading on the New York Stock Exchange
on a particular day are priced according to the net asset value determined on
that day.
Mentor Distributors, Inc. ("Mentor Distributors"), 901 East Byrd
Street, Richmond, Virginia 23219, serves as distributor of the Portfolio's
shares. Mentor Distributors is not obligated to sell any specific amount of
shares of the Portfolio.
An investor may make an initial purchase of shares of the
Portfolio by submitting a completed Trust application along with a purchase
order, and by making payment to Mentor Distributors. Investors will be required
to make minimum initial investments of $500,000 in the Trust and minimum
subsequent investments of $25,000. Investments made through advisory accounts
maintained with investment advisers registered under the Investment Advisers Act
of 1940 (including "wrap" accounts) are not subject to these minimum investment
requirements. The Portfolio reserves the right at any time to change the initial
and subsequent investment minimums required of investors.
Shares of the Portfolio may be purchased by (i) paying cash, (ii)
exchanging securities acceptable to Mentor Perpetual, or (iii) a combination of
such securities and cash. Purchase of shares of the Portfolio in exchange for
securities is subject in each case to the determination by Mentor Perpetual that
the securities to be exchanged are acceptable for purchase by the Portfolio.
Securities accepted by Mentor Perpetual in exchange for Portfolio shares will be
valued in the same manner as the Portfolio's assets as of the time of the
Portfolio's next determination of net asset value after such acceptance. All
dividends and subscription or other rights which are reflected in the market
price of accepted securities at the time of valuation become the property of the
Portfolio and must be delivered to the Portfolio upon receipt by the investor
from the issuer. A gain or loss for federal income tax purposes would be
realized upon the exchange by an investor that is subject to federal income
taxation, depending upon the investor's basis in the securities tendered. A
shareholder who wishes to purchase shares by exchanging securities should obtain
instructions by calling Mentor Distributors at 1-800-869-6042.
In all cases Mentor Perpetual or Mentor Distributors reserves the
right to reject any particular investment.
REDEMPTION OF SHARES
A shareholder may redeem all or any portion of its shares in the
Portfolio at any time upon request, by following the procedures set forth below.
Redemptions will be effected at the net asset value per share of the Portfolio
next determined after the receipt by the Portfolio of redemption instructions in
"good order" as described below. Shares may be redeemed by submitting a written
request for redemption to Mentor Distributors, or to the Trust at the following
address:
Mentor Institutional Trust
P.O. Box 1357
Richmond, Virginia 23286-0109
Upon receipt of a request in "good order," the Trust will
determine the amount of the net asset value of the redeemed shares, based upon
the net asset value of the Portfolio next determined after the redemption
request has been received. A check for the proceeds will normally be mailed on
the next business day.
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If shares of the Portfolio to be redeemed represent an investment
made by check, the Trust reserves the right not to transmit the redemption
proceeds to the shareholder until the check has been collected, which may take
up to 15 days after the purchase date.
A redemption request will be considered to have been made in
"good order" if the following conditions are satisfied:
(1) the request is in writing, states the number of shares to be
redeemed, and identifies the shareholder's Portfolio account
number;
(2) the request is signed by each registered owner exactly as
the shares are registered; and
(3) if the shares to be redeemed were issued in certificate
form, the certificates are endorsed for transfer (or are
accompanied by an endorsed stock power) and accompany the
redemption request.
The Portfolio reserves the right to require signature guarantees. A
guarantor of a signature must be an eligible guarantor institution, which term
includes most banks and trust companies, savings associations, credit unions,
and securities brokers or dealers. The purpose of a signature guarantee is to
protect Portfolio shareholders against the possibility of fraud.
Mentor Distributors may facilitate any redemption request. There is no
extra charge for this service.
OTHER INFORMATION CONCERNING REDEMPTION. Under unusual circumstances, the
Portfolio may suspend repurchases, or postpone payment for more than seven days,
as permitted by federal securities laws. In addition, the Portfolio reserves the
right, if conditions exist which make cash payments undesirable, to honor any
request for redemption by making payment in whole or in part by securities
valued in the same way as they would be valued for purposes of computing the
Portfolio's per share net asset value. If payment is made in securities, a
shareholder may incur brokerage expenses in converting those securities into
cash.
EXCHANGE PRIVILEGE. Shareholders may exchange their shares in the Portfolio
for shares of certain other Portfolios comprising the Trust at their respective
net asset values beginning 15 days after purchase. Contact Mentor Distributors
for a prospectus of any of those Portfolios. Shares of the Fund are not
available in all states. To exchange shares, simply complete an exchange
authorization form and send it to Mentor Distributors. Exchange authorization
forms are available from the Trust and from Mentor Distributors. The Trust
reserves the right to change or suspend the exchange privilege at any time.
Shareholders would be notified before any such change or suspension. Consult
Mentor Distributors before requesting an exchange.
MENTOR INSTITUTIONAL TRUST
Mentor Institutional Trust is a Massachusetts business trust organized on
February 8, 1994 as IMG Institutional Trust. A copy of the Agreement and
Declaration of Trust, which is governed by Massachusetts law, is on file with
the Secretary of State of The Commonwealth of Massachusetts.
The Trust is an open-end series management investment company with an
unlimited number of authorized shares of beneficial interest. Shares of the
Trust may, without shareholder approval, be divided into two or more series of
shares representing separate investment portfolios. Any such series of shares
may be further divided without shareholder approval into two or more classes of
shares having such preferences and special or relative rights and privileges as
the Trustees determine. The Trust's shares are currently divided into five
series, one representing the Portfolio, the others representing other Portfolios
with varying investment objectives and policies. Each share has one vote, with
fractional shares voting proportionally. Shares of each class will vote together
as
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a single class except when required by law or determined by the Trustees. Shares
of the Portfolio are freely transferable, are entitled to dividends as declared
by the Trustees, and, if the Portfolio were liquidated, would receive the net
assets of the Portfolio. The Trust may suspend the sale of shares at any time
and may refuse any order to purchase shares. Although the Portfolio and the
Trust are not required to hold annual meetings of its shareholders, shareholders
have the right to call a meeting to elect or remove Trustees, or to take other
actions as provided in the Agreement and Declaration of Trust.
In the interest of economy and convenience, the Portfolio will not issue
certificates for its shares except at the shareholder's request.
CUSTODIAN AND TRANSFER AND DIVIDEND AGENT
Investors Fiduciary Trust Company, 127 West 10th Street, Kansas City,
Missouri 64105, serves as the Portfolio's custodian. State Street Bank and Trust
Company, c/o Boston Financial Data Services, Inc., 2 Heritage Drive, North
Quincy, Massachusetts 02171, serves as the Portfolio's transfer and dividend
agent.
PERFORMANCE INFORMATION
Yield and total return data may from time to time be included in
advertisements about the Portfolio. The Portfolio's "yield" is calculated by
dividing the Portfolio's annualized net investment income per share during a
recent 30-day period by its net asset value on the last day of that period.
"Total return" for the life of the Portfolio through the most recent calendar
quarter represents the actual rate of return on an investment of $1,000 in the
Portfolio over the period. The Portfolio's performance may be compared to
various indices. See the Statement of Additional Information. Information may be
presented in advertisements about the Portfolio describing the background and
professional experience of the Portfolio's investment adviser or its investment
personnel.
All data is based on the Portfolio's past investment results and does not
predict future performance. Investment performance, which will vary, is based on
many factors, including market conditions, the composition of the Portfolio's
investments, and the Portfolio's operating expenses. Investment performance also
often reflects the risks associated with the Portfolio's investment objectives
and policies. These factors should be considered when comparing the Portfolio's
investment results to those of other mutual funds and other investment vehicles.
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No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus and, if given or
made, such other information or representations must not be relied upon as
having been authorized by the Portfolio. This Prospectus does not constitute an
offer in any State in which, or to any person to whom, such offering may not
lawfully be made. This Prospectus omits certain information contained in the
Registration Statement, to which reference is made, filed with the Securities
and Exchange Commission. Items which are thus omitted, including contracts and
other documents referred to or summarized herein, may be obtained from the
Commission upon payment of the prescribed fees.
Additional information concerning the secu rities offered hereby and the
Portfolio is to be found in the Registration Statement, including various
exhibits thereto and financial statements included or incorporated therein,
which may be inspected at the office of the Commission.
MENTOR
INTERNATIONAL
PORTFOLIO
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PROSPECTUS
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Mentor Distributors, Inc.
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