<PAGE>
QUALIVEST FUNDS
CLASS Y SHARES
<TABLE>
<S> <C>
Qualivest U.S. Treasury Money Market Fund Qualivest Optimized Stock Fund
Qualivest Money Market Fund Qualivest Income Equity Value Fund
Qualivest Tax-Free Money Market Fund Qualivest Large Companies Value Fund
Qualivest Tax-Free National Bond Fund Qualivest International Opportunities Fund
Qualivest Intermediate Bond Fund Qualivest Small Companies Value Fund
Qualivest Diversified Bond Fund
</TABLE>
SUPPLEMENT DATED JULY 9, 1997 TO PROSPECTUS DATED DECEMBER 1, 1996
The information set forth in the Prospectus dated December 1, 1996 is
hereby supplemented as follows:
ANTICIPATED CHANGE IN INVESTMENT ADVISER
The investment adviser to the funds named above (the "Funds") currently is
Qualivest Capital Management, Inc. ("Qualivest Capital Management"), an indirect
wholly owned subsidiary of U.S. Bancorp. It is anticipated that U.S. Bancorp
will merge with and into First Bank System, Inc. ("FBS") on or about August 1,
1997, subject to receipt of shareholder approvals by U.S. Bancorp and FBS and
satisfaction of customary closing conditions. The date upon which such merger
takes place is referred to herein as the "Closing Date."
Effective as of the Closing Date and subject to receipt of the exemptive
order described below, First Bank National Association ("First Bank"), a wholly
owned subsidiary of FBS, acting through First Bank's First Asset Management
group, will become the investment adviser to the Funds pursuant to an investment
advisory agreement (the "Interim Advisory Agreement") between the Funds and
First Bank. The investment advisory fees payable to First Bank under the
Interim Advisory Agreement, and the other substantive terms thereof, are the
same as under the Funds' current investment advisory agreement with Qualivest
Capital Management.
First Bank also acts as investment adviser to 27 other mutual funds,
including the 20 portfolios of First American Investment Funds, Inc., the three
portfolios of First American Funds, Inc., and the four portfolios of First
American Strategy Funds, Inc. (collectively, the "First American Funds"). First
Bank has acted as investment adviser to the First American Funds since 1982. As
of June 30, 1997, First Bank managed more than $42 billion in assets, including
more than $14 billion in assets of the First American Funds. The First Asset
Management group within First Bank employs more than 90 investment professionals
and provides investment management services with several different orientations,
including value, growth, fixed-income and tax-exempt investing. It is
anticipated that several individuals who are now employed by Qualivest Capital
Management will become employees of the First Asset Management group within
First Bank at the Closing Date. First Bank, which is headquartered in
Minneapolis, Minnesota, also engages in a general commercial and retail banking
business.
The Funds' Board of Trustees, including all of the Funds' disinterested
trustees, has approved the Interim Advisory Agreement. Prior to the Closing
Date, the Funds and First Bank expect to receive an exemptive order from the
Securities and Exchange Commission which will permit First Bank to act as
investment adviser to the Funds without shareholder approval for up to 120 days
following the Closing Date. It is expected that a shareholders meeting of the
Funds (the "Qualivest Shareholders Meeting") will be held within this 120-day
period to consider approval of the Interim Advisory Agreement. Until Fund
shareholders approve the Interim Advisory Agreement, the investment advisory
fees payable to First Bank thereunder will be placed in an interest-bearing
escrow account. The moneys in such account will be released to First Bank upon
the receipt of such shareholder
<PAGE>
approval or, in the event that shareholders of a Fund do not approve the Interim
Advisory Agreement, returned to that Fund.
Information concerning the individual portfolio managers or teams which
will manage the Funds under the Interim Advisory Agreement is set forth under
the heading "Portfolio Management" below.
PROPOSED COMBINATIONS OF QUALIVEST FUNDS WITH FIRST AMERICAN FUNDS
The Funds' Board of Trustees also has approved, subject to the approval of
Fund shareholders and to satisfaction of certain other conditions, the
combination of the Funds with and into certain existing First American Funds
which have similar investment objectives and policies or, in the case of two of
the Funds, into First American Funds which are to be newly formed. It is
anticipated that Fund shareholders will be asked to consider and act upon these
proposed combinations of funds at the Qualivest Shareholders Meeting referred to
under "Anticipated Change in Investment Adviser." Assuming the receipt of
shareholder approvals and satisfaction of conditions, it is currently
anticipated that these combinations of funds would be completed before the end
of 1997.
A separate proxy statement and proxy voting materials will be provided to
Fund shareholders in connection with the Qualivest Fund Shareholders meeting.
These materials will contain more complete information concerning the proposed
approval of the Interim Advisory Agreement and combinations of funds. No action
is required to be taken by Fund shareholders at the present time with respect to
these matters.
PORTFOLIO MANAGEMENT
The following individuals or teams are expected to manage the respective
Funds on behalf of First Bank under the Interim Advisory Agreement. Shares of
the Qualivest Tax-Free National Bond Fund and Qualivest Income Equity Value Fund
are not currently offered.
<TABLE>
<CAPTION>
Qualivest Fund Portfolio Manager(s) or Team
- -------------- ----------------------------
<S> <C>
Qualivest U.S. Treasury Money Market Fund. . . . . . James M. Ulrey III and James D. Palmer
Qualivest Money Market Fund. . . . . . . . . . . . . James M. Ulrey III and James D. Palmer
Qualivest Tax-Free Money Market Fund . . . . . . . . James M. Ulrey III and James D. Palmer
Qualivest Intermediate Bond Fund . . . . . . . . . . Martin L. Jones and Lucille Rehkamp
Qualivest Diversified Bond Fund. . . . . . . . . . . Martin L. Jones and Lucille Rehkamp
Qualivest Optimized Stock Fund . . . . . . . . . . . James S. Rovner and Evan Lundquist
Qualivest Large Companies Value Fund . . . . . . . . Value Team (see below)
Qualivest International Opportunities Fund . . . . . James S. Rovner and Evan Lundquist
Qualivest Small Companies Value Fund . . . . . . . . Small Companies Value Team (see below)
</TABLE>
The Value Team referred to above is a committee composed of James Doak, John M.
Murphy, Jr., James S. Rovner, Albin S. Dubiak, Roland P. Whitcomb, Kevin Shields
and John A. Twele. The Small Companies Value Team referred to above is a
committee composed of Albin S. Dubiak, Roland P.
2
<PAGE>
Whitcomb and Jeff A. Johnson. Information concerning the individuals named in
the table and text above is as follows:
Joseph M. Ulrey III is portfolio co-manager for three of the First American
money market funds. For the past 6 years, he has managed assets for
institutional and individual investment advisory clients of First Bank.
Previously, Mr. Ulrey spent 10 years overseeing various functions in the
Treasury and Finance Divisions of First Bank. Mr. Ulrey graduated from
Macalester College with a bachelor's degree in mathematics/economics and
received his master's degree in business administration from the University of
Chicago.
James D. Palmer is portfolio co-manager for three of the First American
money market funds. Mr. Palmer joined First Bank in 1992, prior to which he was
a securities lending trader and senior master trust accountant with First Trust
National Association. He holds a bachelor's degree from the University of
Wisconsin -- LaCrosse and a master's degree in business administration from the
University of Minnesota.
Martin L. Jones is portfolio manager for three of the First American fixed
income funds. Mr. Jones has over 20 years of investment experience, and was
previously employed by Harris Trust & Savings Bank, Dillon Read & Co., and Loeb
Rhoades & Co. Mr. Jones received his bachelor's degree from Texas Tech
University, his master's degree from the University of Texas, and his master's
degree in business administration from the University of Chicago.
Lucille Rehkamp is portfolio co-manager for three of the First American
fixed income funds. She joined First Bank in 1979 and was formerly with
PaineWebber. Ms. Rehkamp received her bachelor's degree from Marquette
University.
James S. Rovner is portfolio manager or co-manager for two of the First
American equity funds and is a member of the committee which manages another two
First American equity funds. He joined First Bank in 1986 and has managed
assets for institutional and individual clients for over 15 years, specializing
in equity and balanced investment strategies. Mr. Rovner received his
bachelor's degree and his master's degree in business administration from the
University of Wisconsin. Mr. Rovner is a Chartered Financial Analyst.
Evan Lundquist is portfolio co-manager for one of the First American equity
funds. He joined First Bank in 1993 and received his bachelor's degree from St.
Mary's College.
James Doak is a member of the committees which manage five of the First
American equity funds. Mr. Doak joined First Bank in 1982 after serving two
years as Vice President of Loomis-Sayles & Co. Mr. Doak received his bachelor's
degree from Brown University and his master's degree in business administration
from the Wharton School of Business. Mr. Doak is a Chartered Financial Analyst.
John M. Murphy, Jr. is a member of the committees which manage five of the
First American equity funds. He is chief investment officer of the First Asset
Management group within First Bank, having joined First Bank in 1984.
Mr. Murphy received his bachelor's degree from Regis College.
Albin S. Dubiak is portfolio manager for three of the First American equity
funds and is a member of the committees which manage another five First American
equity funds. He began his investment career as a security trader with the
First National Bank of Chicago in 1963 before joining First Bank as an
investment analyst in 1969. Mr. Dubiak received his bachelor's degree from
Indiana University and his master's degree in business administration from the
University of Arizona.
Roland B. Whitcomb is portfolio co-manager for two of the First American
equity funds and is a member of the committees which manage another five First
American equity funds. Mr. Whitcomb
3
<PAGE>
joined First Bank in 1986 after serving as an account executive with Smith
Barney & Co. since 1979. He received his bachelor's degree from the University
of Chicago and is a Chartered Financial Analyst.
Kevin Shields is a member of the committee which manages two of the First
American equity funds. Mr. Shields, who joined First Bank in 1993, received his
bachelor's degree from Marquette University and his master's degree from the
University of Wisconsin -- Madison.
John A. Twele is a member of the committee which manages two of the First
American equity funds. Prior to joining First Bank in 1996, he was employed in
various positions at American Express Financial Advisors; Investment Advisers,
Inc.; Kemper Financial; and Mercantile Trust. Mr. Twele received his bachelor's
degree from Indiana University.
Jeff A. Johnson is portfolio co-manager for two of the First American
equity funds and is a member of the committee which manages another three First
American equity funds. He has been employed by First Bank in investment
management since 1991 and in commercial lending from 1985 to 1991. Mr. Johnson
received his master of fine arts degree from the University of Iowa.
Mr. Doak, Mr. Dubiak, Mr. Jones, Mr. Murphy, Mr. Rovner and Mr. Ulrey also
are members of the committee which manages four First American "funds of funds."
4
<PAGE>
QUALIVEST FUNDS
CLASS Q SHARES
Qualivest U.S. Treasury Money Market Fund
Qualivest Money Market Fund
Qualivest Tax-Free Money Market Fund
SUPPLEMENT DATED JULY 9, 1997 TO PROSPECTUS DATED DECEMBER 1, 1996
The information set forth in the Prospectus dated December 1, 1996 is
hereby supplemented as follows:
ANTICIPATED CHANGE IN INVESTMENT ADVISER
The investment adviser to the funds named above (the "Funds") currently is
Qualivest Capital Management, Inc. ("Qualivest Capital Management"), an indirect
wholly owned subsidiary of U.S. Bancorp. It is anticipated that U.S. Bancorp
will merge with and into First Bank System, Inc. ("FBS") on or about August 1,
1997, subject to receipt of shareholder approvals by U.S. Bancorp and FBS and
satisfaction of customary closing conditions. The date upon which such merger
takes place is referred to herein as the "Closing Date."
Effective as of the Closing Date and subject to receipt of the exemptive
order described below, First Bank National Association ("First Bank"), a wholly
owned subsidiary of FBS, acting through First Bank's First Asset Management
group, will become the investment adviser to the Funds pursuant to an investment
advisory agreement (the "Interim Advisory Agreement") between the Funds and
First Bank. The investment advisory fees payable to First Bank under the
Interim Advisory Agreement, and the other substantive terms thereof, are the
same as under the Funds' current investment advisory agreement with Qualivest
Capital Management.
First Bank also acts as investment adviser to 27 other mutual funds,
including the 20 portfolios of First American Investment Funds, Inc., the three
portfolios of First American Funds, Inc., and the four portfolios of First
American Strategy Funds, Inc. (collectively, the "First American Funds"). First
Bank has acted as investment adviser to the First American Funds since 1982. As
of June 30, 1997, First Bank managed more than $42 billion in assets, including
more than $14 billion in assets of the First American Funds. The First Asset
Management group within First Bank employs more than 90 investment professionals
and provides investment management services with several different orientations,
including value, growth, fixed-income and tax-exempt investing. It is
anticipated that several individuals who are now employed by Qualivest Capital
Management will become employees of the First Asset Management group within
First Bank at the Closing Date. First Bank, which is headquartered in
Minneapolis, Minnesota, also engages in a general commercial and retail banking
business.
The Funds' Board of Trustees, including all of the Funds' disinterested
trustees, has approved the Interim Advisory Agreement. Prior to the Closing
Date, the Funds and First Bank expect to receive an exemptive order from the
Securities and Exchange Commission which will permit First Bank to act as
investment adviser to the Funds without shareholder approval for up to 120 days
following the Closing Date. It is expected that a shareholders meeting of the
Funds (the "Qualivest Shareholders Meeting") will be held within this 120-day
period to consider approval of the Interim Advisory Agreement. Until Fund
shareholders approve the Interim Advisory Agreement, the investment advisory
fees payable to First Bank thereunder will be placed in an interest-bearing
escrow account. The moneys in such account will be released to First Bank upon
the receipt of such shareholder approval or, in the event that shareholders of a
Fund do not approve the Interim Advisory Agreement, returned to that Fund.
<PAGE>
Information concerning the individual portfolio managers who will manage
the Funds under the Interim Advisory Agreement is set forth under the heading
"Portfolio Management" below.
PROPOSED COMBINATIONS OF QUALIVEST FUNDS WITH FIRST AMERICAN FUNDS
The Funds' Board of Trustees also has approved, subject to the approval of
Fund shareholders and to satisfaction of certain other conditions, the
combination of the Funds with and into certain existing First American Funds
which have similar investment objectives and policies or, in the case of one of
the Funds, into a First American Fund which is to be newly formed. Like the
Funds, each of these First American Funds operates or will operate as a money
market fund. It is anticipated that Fund shareholders will be asked to consider
and act upon these proposed combinations of funds at the Qualivest Shareholders
Meeting referred to under "Anticipated Change in Investment Adviser." Assuming
the receipt of shareholder approvals and satisfaction of conditions, it is
currently anticipated that these combinations of funds would be completed before
the end of 1997.
A separate proxy statement and proxy voting materials will be provided to
Fund shareholders in connection with the Qualivest Fund Shareholders meeting.
These materials will contain more complete information concerning the proposed
approval of the Interim Advisory Agreement and combinations of funds. No action
is required to be taken by Fund shareholders at the present time with respect to
these matters.
PORTFOLIO MANAGEMENT
The following individuals are expected to manage the respective Funds on
behalf of First Bank under the Interim Advisory Agreement.
<TABLE>
<CAPTION>
Qualivest Fund Portfolio Managers
- -------------- ------------------
<S> <C>
Qualivest U.S. Treasury Money Market Fund. . . . . . James M. Ulrey III and James D. Palmer
Qualivest Money Market Fund. . . . . . . . . . . . . James M. Ulrey III and James D. Palmer
Qualivest Tax-Free Money Market Fund . . . . . . . . James M. Ulrey III and James D. Palmer
</TABLE>
Joseph M. Ulrey III is portfolio co-manager for three of the First American
money market funds. For the past 6 years, he has managed assets for
institutional and individual investment advisory clients of First Bank.
Previously, Mr. Ulrey spent 10 years overseeing various functions in the
Treasury and Finance Divisions of First Bank. Mr. Ulrey graduated from
Macalester College with a bachelor's degree in mathematics/economics and
received his master's degree in business administration from the University of
Chicago.
James D. Palmer is portfolio co-manager for three of the First American
money market funds. Mr. Palmer joined First Bank in 1992, prior to which he was
a securities lending trader and senior master trust accountant with First Trust
National Association. He holds a bachelor's degree from the University of
Wisconsin -- LaCrosse and a master's degree in business administration from the
University of Minnesota.
Mr. Ulrey also is a member of the committee which manages four First
American "funds of funds."
2
<PAGE>
QUALIVEST FUNDS
CLASS A SHARES
Qualivest Allocated Conservative Fund Qualivest Allocated Growth Fund
Qualivest Allocated Balanced Fund Qualivest Allocated Aggressive Fund
SUPPLEMENT DATED JULY 9, 1997 TO PROSPECTUS DATED DECEMBER 1, 1996
The information set forth in the Prospectus dated December 1, 1996 is
hereby supplemented as follows:
ANTICIPATED CHANGE IN INVESTMENT ADVISER
The investment adviser to the funds named above (the "Funds") currently is
Qualivest Capital Management, Inc. ("Qualivest Capital Management"), an indirect
wholly owned subsidiary of U.S. Bancorp. It is anticipated that U.S. Bancorp
will merge with and into First Bank System, Inc. ("FBS") on or about August 1,
1997, subject to receipt of shareholder approvals by U.S. Bancorp and FBS and
satisfaction of customary closing conditions. The date upon which such merger
takes place is referred to herein as the "Closing Date."
Effective as of the Closing Date and subject to receipt of the exemptive
order described below, First Bank National Association ("First Bank"), a wholly
owned subsidiary of FBS, acting through First Bank's First Asset Management
group, will become the investment adviser to the Funds pursuant to an investment
advisory agreement (the "Interim Advisory Agreement") between the Funds and
First Bank. The investment advisory fees payable to First Bank under the
Interim Advisory Agreement, and the other substantive terms thereof, are the
same as under the Funds' current investment advisory agreement with Qualivest
Capital Management.
First Bank also acts as investment adviser to 27 other mutual funds,
including the 20 portfolios of First American Investment Funds, Inc., the three
portfolios of First American Funds, Inc., and the four portfolios of First
American Strategy Funds, Inc. (collectively, the "First American Funds"). First
Bank has acted as investment adviser to the First American Funds since 1982. As
of June 30, 1997, First Bank managed more than $42 billion in assets, including
more than $14 billion in assets of the First American Funds. The First Asset
Management group within First Bank employs more than 90 investment professionals
and provides investment management services with several different orientations,
including value, growth, fixed-income and tax-exempt investing. It is
anticipated that several individuals who are now employed by Qualivest Capital
Management will become employees of the First Asset Management group within
First Bank at the Closing Date. First Bank, which is headquartered in
Minneapolis, Minnesota, also engages in a general commercial and retail banking
business.
The Funds' Board of Trustees, including all of the Funds' disinterested
trustees, has approved the Interim Advisory Agreement. Prior to the Closing
Date, the Funds and First Bank expect to receive an exemptive order from the
Securities and Exchange Commission which will permit First Bank to act as
investment adviser to the Funds without shareholder approval for up to 120 days
following the Closing Date. It is expected that a shareholders meeting of the
Funds (the "Qualivest Shareholders Meeting") will be held within this 120-day
period to consider approval of the Interim Advisory Agreement. Until Fund
shareholders approve the Interim Advisory Agreement, the investment advisory
fees payable to First Bank thereunder will be placed in an interest-bearing
escrow account. The moneys in such account will be released to First Bank upon
the receipt of such shareholder approval or, in the event that shareholders of a
Fund do not approve the Interim Advisory Agreement, returned to that Fund.
Information concerning the committee which will manage the Funds under the
Interim Advisory Agreement is set forth under the heading "Portfolio Management"
below.
<PAGE>
PROPOSED COMBINATIONS OF QUALIVEST FUNDS WITH FIRST AMERICAN FUNDS
The Funds' Board of Trustees also has approved, subject to the approval of
Fund shareholders and to satisfaction of certain other conditions, the
combination of the Funds with and into certain existing First American Funds
which have similar investment objectives and policies and which, like the Funds,
operate as "funds of funds." It is anticipated that Fund shareholders will be
asked to consider and act upon these proposed combinations of funds at the
Qualivest Shareholders Meeting referred to under "Anticipated Change in
Investment Adviser." Assuming the receipt of shareholder approvals and
satisfaction of conditions, it is currently anticipated that these combinations
of funds would be completed before the end of 1997.
A separate proxy statement and proxy voting materials will be provided to
Fund shareholders in connection with the Qualivest Fund Shareholders meeting.
These materials will contain more complete information concerning the proposed
approval of the Interim Advisory Agreement and combinations of funds. No action
is required to be taken by Fund shareholders at the present time with respect to
these matters.
PORTFOLIO MANAGEMENT
A committee composed of the following individuals is expected to manage
each of the Funds on behalf of First Bank under the Interim Advisory Agreement:
Gerald C. Bren is portfolio co-manager for two of the First American equity
funds and is a member of the committee which manages another three First
American equity funds. He joined First Bank in 1972 as an investment analyst.
Mr. Bren received his master's degree in business administration from the
University of Chicago in 1972 and his Chartered Financial Analyst certification
in 1977.
James Doak is a member of the committees which manage five of the First
American equity funds. Mr. Doak joined First Bank in 1982 after serving two
years as Vice President of Loomis-Sayles & Co. Mr. Doak received his bachelor's
degree from Brown University and his master's degree in business administration
from the Wharton School of Business. Mr. Doak is a Chartered Financial Analyst.
Albin S. Dubiak is portfolio manager for three of the First American equity
funds and is a member of the committees which manage another five First American
equity funds. He began his investment career as a security trader with the
First National Bank of Chicago in 1963 before joining First Bank as an
investment analyst in 1969. Mr. Dubiak received his bachelor's degree from
Indiana University and his master's degree in business administration from the
University of Arizona.
Martin L. Jones is portfolio manager for three of the First American fixed
income funds. Mr. Jones has over 20 years of investment experience, and was
previously employed by Harris Trust & Savings Bank, Dillon Read & Co., and Loeb
Rhoades & Co. Mr. Jones received his bachelor's degree from Texas Tech
University, his master's degree from the University of Texas, and his master's
degree in business administration from the University of Chicago.
John M. Murphy, Jr. is a member of the committees which manage five of the
First American equity funds. He is chief investment officer of the First Asset
Management group within First Bank, having joined First Bank in 1984.
Mr. Murphy received his bachelor's degree from Regis College.
James S. Rovner is portfolio manager or co-manager for two of the First
American equity funds and is a member of the committee which manages another two
First American equity funds. He joined First Bank in 1986 and has managed
assets for institutional and individual clients for over 15 years, specializing
in equity and balanced investment strategies. Mr. Rovner received his
bachelor's degree
2
<PAGE>
and his master's degree in business administration from the University of
Wisconsin. Mr. Rovner is a Chartered Financial Analyst.
Richard W. Stanley is portfolio manager for three of the First American
tax-exempt funds. Mr. Stanley entered the investment business via investment
sales with Smith Barney & Co. in 1958 and moved to Heritage Investment Advisers
as head of fixed income investment in 1973. He joined First Bank in early 1986
as vice president and manager of fixed income/personal trust. Mr. Stanley
received his master's in business administration degree from Cornell University
in 1958 and received his Chartered Financial Analyst certification in 1977.
Joseph M. Ulrey III is portfolio co-manager for three of the First American
money market funds. For the past 6 years, he has managed assets for
institutional and individual investment advisory clients of First Bank.
Previously, Mr. Ulrey spent 10 years overseeing various functions in the
Treasury and Finance Divisions of First Bank. Mr. Ulrey graduated from
Macalester College with a bachelor's degree in mathematics/economics and
received his master's degree in business administration from the University of
Chicago.
Each of the individuals named above also is a member of the committee which
manages four First American "funds of funds."
It is anticipated that at the Closing Date, First Bank also will become the
investment adviser to the Underlying Funds referred to in the prospectus
pursuant to the exemptive order referred to above. The following individuals
and teams are expected to manage the respective Underlying Funds on behalf of
First Bank commencing on the Closing Date.
<TABLE>
<CAPTION>
Underlying Qualivest Fund Portfolio Manager(s) or Team
- ------------------------- ----------------------------
<S> <C>
Qualivest Large Companies Value Fund . . . . . . . . Value Team (see below)
Qualivest Small Companies Value Fund . . . . . . . . Small Companies Value Team (see below)
Qualivest International Opportunities Fund . . . . . James S. Rovner and Evan Lundquist
Qualivest Optimized Stock Fund . . . . . . . . . . . James S. Rovner and Evan Lundquist
Qualivest Intermediate Bond Fund . . . . . . . . . . Martin L. Jones and Lucille Rehkamp
Qualivest Diversified Bond Fund. . . . . . . . . . . Martin L. Jones and Lucille Rehkamp
Qualivest U.S. Treasury Money Market Fund. . . . . . James M. Ulrey III and James D. Palmer
Qualivest Money Market Fund. . . . . . . . . . . . . James M. Ulrey III and James D. Palmer
</TABLE>
The Value Team referred to above is a committee composed of James Doak, John M.
Murphy, Jr., James S. Rovner, Albin S. Dubiak, Roland P. Whitcomb, Kevin Shields
and John A. Twele. The Small Companies Value Team referred to above is a
committee composed of Albin S. Dubiak, Roland P. Whitcomb and Jeff A. Johnson.
Information concerning Mr. Rovner, Mr. Jones, Mr. Ulrey, Mr. Doak, Mr. Murphy,
and Mr. Dubiak is set forth above. Information concerning the remaining
individuals named in the table and text above is as follows:
Evan Lundquist is portfolio co-manager for one of the First American equity
funds. He joined First Bank in 1993 and received his bachelor's degree from St.
Mary's College.
3
<PAGE>
Lucille Rehkamp is portfolio co-manager for three of the First American
fixed income funds. She joined First Bank in 1979 and was formerly with
PaineWebber. Ms. Rehkamp received her bachelor's degree from Marquette
University.
James D. Palmer is portfolio co-manager for three of the First American
money market funds. Mr. Palmer joined First Bank in 1992, prior to which he was
a securities lending trader and senior master trust accountant with First Trust
National Association. He holds a bachelor's degree from the University of
Wisconsin -- LaCrosse and a master's degree in business administration from the
University of Minnesota.
Roland B. Whitcomb is portfolio co-manager for two of the First American
equity funds and is a member of the committees which manage another five First
American equity funds. Mr. Whitcomb joined First Bank in 1986 after serving as
an account executive with Smith Barney & Co. since 1979. He received his
bachelor's degree from the University of Chicago and is a Chartered Financial
Analyst.
Kevin Shields is a member of the committee which manages two of the First
American equity funds. Mr. Shields, who joined First Bank in 1993, received his
bachelor's degree from Marquette University and his master's degree from the
University of Wisconsin -- Madison.
John A. Twele is a member of the committee which manages two of the First
American equity funds. Prior to joining First Bank in 1996, he was employed in
various positions at American Express Financial Advisors; Investment Advisers,
Inc.; Kemper Financial; and Mercantile Trust. Mr. Twele received his bachelor's
degree from Indiana University.
Jeff A. Johnson is portfolio co-manager for two of the First American
equity funds and is a member of the committee which manages another three First
American equity funds. He has been employed by First Bank in investment
management since 1991 and in commercial lending from 1985 to 1991. Mr. Johnson
received his master of fine arts degree from the University of Iowa.
4
<PAGE>
QUALIVEST FUNDS
CLASS Y SHARES
Qualivest Allocated Conservative Fund Qualivest Allocated Growth Fund
Qualivest Allocated Balanced Fund Qualivest Allocated Aggressive Fund
SUPPLEMENT DATED JULY 9, 1997 TO PROSPECTUS DATED DECEMBER 1, 1996
The information set forth in the Prospectus dated December 1, 1996 is
hereby supplemented as follows:
ANTICIPATED CHANGE IN INVESTMENT ADVISER
The investment adviser to the funds named above (the "Funds") currently is
Qualivest Capital Management, Inc. ("Qualivest Capital Management"), an indirect
wholly owned subsidiary of U.S. Bancorp. It is anticipated that U.S. Bancorp
will merge with and into First Bank System, Inc. ("FBS") on or about August 1,
1997, subject to receipt of shareholder approvals by U.S. Bancorp and FBS and
satisfaction of customary closing conditions. The date upon which such merger
takes place is referred to herein as the "Closing Date."
Effective as of the Closing Date and subject to receipt of the exemptive
order described below, First Bank National Association ("First Bank"), a wholly
owned subsidiary of FBS, acting through First Bank's First Asset Management
group, will become the investment adviser to the Funds pursuant to an investment
advisory agreement (the "Interim Advisory Agreement") between the Funds and
First Bank. The investment advisory fees payable to First Bank under the
Interim Advisory Agreement, and the other substantive terms thereof, are the
same as under the Funds' current investment advisory agreement with Qualivest
Capital Management.
First Bank also acts as investment adviser to 27 other mutual funds,
including the 20 portfolios of First American Investment Funds, Inc., the three
portfolios of First American Funds, Inc., and the four portfolios of First
American Strategy Funds, Inc. (collectively, the "First American Funds"). First
Bank has acted as investment adviser to the First American Funds since 1982. As
of June 30, 1997, First Bank managed more than $42 billion in assets, including
more than $14 billion in assets of the First American Funds. The First Asset
Management group within First Bank employs more than 90 investment professionals
and provides investment management services with several different orientations,
including value, growth, fixed-income and tax-exempt investing. It is
anticipated that several individuals who are now employed by Qualivest Capital
Management will become employees of the First Asset Management group within
First Bank at the Closing Date. First Bank, which is headquartered in
Minneapolis, Minnesota, also engages in a general commercial and retail banking
business.
The Funds' Board of Trustees, including all of the Funds' disinterested
trustees, has approved the Interim Advisory Agreement. Prior to the Closing
Date, the Funds and First Bank expect to receive an exemptive order from the
Securities and Exchange Commission which will permit First Bank to act as
investment adviser to the Funds without shareholder approval for up to 120 days
following the Closing Date. It is expected that a shareholders meeting of the
Funds (the "Qualivest Shareholders Meeting") will be held within this 120-day
period to consider approval of the Interim Advisory Agreement. Until Fund
shareholders approve the Interim Advisory Agreement, the investment advisory
fees payable to First Bank thereunder will be placed in an interest-bearing
escrow account. The moneys in such account will be released to First Bank upon
the receipt of such shareholder approval or, in the event that shareholders of a
Fund do not approve the Interim Advisory Agreement, returned to that Fund.
Information concerning the committee which will manage the Funds under the
Interim Advisory Agreement is set forth under the heading "Portfolio Management"
below.
<PAGE>
PROPOSED COMBINATIONS OF QUALIVEST FUNDS WITH FIRST AMERICAN FUNDS
The Funds' Board of Trustees also has approved, subject to the approval of
Fund shareholders and to satisfaction of certain other conditions, the
combination of the Funds with and into certain existing First American Funds
which have similar investment objectives and policies and which, like the Funds,
operate as "funds of funds." It is anticipated that Fund shareholders will be
asked to consider and act upon these proposed combinations of funds at the
Qualivest Shareholders Meeting referred to under "Anticipated Change in
Investment Adviser." Assuming the receipt of shareholder approvals and
satisfaction of conditions, it is currently anticipated that these combinations
of funds would be completed before the end of 1997.
A separate proxy statement and proxy voting materials will be provided to
Fund shareholders in connection with the Qualivest Fund Shareholders meeting.
These materials will contain more complete information concerning the proposed
approval of the Interim Advisory Agreement and combinations of funds. No action
is required to be taken by Fund shareholders at the present time with respect to
these matters.
PORTFOLIO MANAGEMENT
A committee composed of the following individuals is expected to manage
each of the Funds on behalf of First Bank under the Interim Advisory Agreement:
Gerald C. Bren is portfolio co-manager for two of the First American equity
funds and is a member of the committee which manages another three First
American equity funds. He joined First Bank in 1972 as an investment analyst.
Mr. Bren received his master's degree in business administration from the
University of Chicago in 1972 and his Chartered Financial Analyst certification
in 1977.
James Doak is a member of the committees which manage five of the First
American equity funds. Mr. Doak joined First Bank in 1982 after serving two
years as Vice President of Loomis-Sayles & Co. Mr. Doak received his bachelor's
degree from Brown University and his master's degree in business administration
from the Wharton School of Business. Mr. Doak is a Chartered Financial Analyst.
Albin S. Dubiak is portfolio manager for three of the First American equity
funds and is a member of the committees which manage another five First American
equity funds. He began his investment career as a security trader with the
First National Bank of Chicago in 1963 before joining First Bank as an
investment analyst in 1969. Mr. Dubiak received his bachelor's degree from
Indiana University and his master's degree in business administration from the
University of Arizona.
Martin L. Jones is portfolio manager for three of the First American fixed
income funds. Mr. Jones has over 20 years of investment experience, and was
previously employed by Harris Trust & Savings Bank, Dillon Read & Co., and Loeb
Rhoades & Co. Mr. Jones received his bachelor's degree from Texas Tech
University, his master's degree from the University of Texas, and his master's
degree in business administration from the University of Chicago.
John M. Murphy, Jr. is a member of the committees which manage five of the
First American equity funds. He is chief investment officer of the First Asset
Management group within First Bank, having joined First Bank in 1984.
Mr. Murphy received his bachelor's degree from Regis College.
James S. Rovner is portfolio manager or co-manager for two of the First
American equity funds and is a member of the committee which manages another two
First American equity funds. He joined First Bank in 1986 and has managed
assets for institutional and individual clients for over 15 years, specializing
in equity and balanced investment strategies. Mr. Rovner received his
bachelor's degree
2
<PAGE>
and his master's degree in business administration from the University of
Wisconsin. Mr. Rovner is a Chartered Financial Analyst.
Richard W. Stanley is portfolio manager for three of the First American
tax-exempt funds. Mr. Stanley entered the investment business via investment
sales with Smith Barney & Co. in 1958 and moved to Heritage Investment Advisers
as head of fixed income investment in 1973. He joined First Bank in early 1986
as vice president and manager of fixed income/personal trust. Mr. Stanley
received his master's in business administration degree from Cornell University
in 1958 and received his Chartered Financial Analyst certification in 1977.
Joseph M. Ulrey III is portfolio co-manager for three of the First American
money market funds. For the past 6 years, he has managed assets for
institutional and individual investment advisory clients of First Bank.
Previously, Mr. Ulrey spent 10 years overseeing various functions in the
Treasury and Finance Divisions of First Bank. Mr. Ulrey graduated from
Macalester College with a bachelor's degree in mathematics/economics and
received his master's degree in business administration from the University of
Chicago.
Each of the individuals named above also is a member of the committee which
manages four First American "funds of funds."
It is anticipated that at the Closing Date, First Bank also will become the
investment adviser to the Underlying Funds referred to in the prospectus
pursuant to the exemptive order referred to above. The following individuals
and teams are expected to manage the respective Underlying Funds on behalf of
First Bank commencing on the Closing Date.
<TABLE>
<CAPTION>
Underlying Qualivest Fund Portfolio Manager(s) or Team
- ------------------------- ----------------------------
<S> <C>
Qualivest Large Companies Value Fund . . . . . . . . . . . . Value Team (see below)
Qualivest Small Companies Value Fund . . . . . . . . . . . . Small Companies Value Team (see below)
Qualivest International Opportunities Fund . . . . . . . . . James S. Rovner and Evan Lundquist
Qualivest Optimized Stock Fund . . . . . . . . . . . . . . . James S. Rovner and Evan Lundquist
Qualivest Intermediate Bond Fund . . . . . . . . . . . . . . Martin L. Jones and Lucille Rehkamp
Qualivest Diversified Bond Fund. . . . . . . . . . . . . . . Martin L. Jones and Lucille Rehkamp
Qualivest U.S. Treasury Money Market Fund. . . . . . . . . . James M. Ulrey III and James D. Palmer
Qualivest Money Market Fund. . . . . . . . . . . . . . . . . James M. Ulrey III and James D. Palmer
</TABLE>
The Value Team referred to above is a committee composed of James Doak, John M.
Murphy, Jr., James S. Rovner, Albin S. Dubiak, Roland P. Whitcomb, Kevin Shields
and John A. Twele. The Small Companies Value Team referred to above is a
committee composed of Albin S. Dubiak, Roland P. Whitcomb and Jeff A. Johnson.
Information concerning Mr. Rovner, Mr. Jones, Mr. Ulrey, Mr. Doak, Mr. Murphy,
and Mr. Dubiak is set forth above. Information concerning the remaining
individuals named in the table and text above is as follows:
Evan Lundquist is portfolio co-manager for one of the First American equity
funds. He joined First Bank in 1993 and received his bachelor's degree from St.
Mary's College.
3
<PAGE>
Lucille Rehkamp is portfolio co-manager for three of the First American
fixed income funds. She joined First Bank in 1979 and was formerly with
PaineWebber. Ms. Rehkamp received her bachelor's degree from Marquette
University.
James D. Palmer is portfolio co-manager for three of the First American
money market funds. Mr. Palmer joined First Bank in 1992, prior to which he was
a securities lending trader and senior master trust accountant with First Trust
National Association. He holds a bachelor's degree from the University of
Wisconsin -- LaCrosse and a master's degree in business administration from the
University of Minnesota.
Roland B. Whitcomb is portfolio co-manager for two of the First American
equity funds and is a member of the committees which manage another five First
American equity funds. Mr. Whitcomb joined First Bank in 1986 after serving as
an account executive with Smith Barney & Co. since 1979. He received his
bachelor's degree from the University of Chicago and is a Chartered Financial
Analyst.
Kevin Shields is a member of the committee which manages two of the First
American equity funds. Mr. Shields, who joined First Bank in 1993, received his
bachelor's degree from Marquette University and his master's degree from the
University of Wisconsin -- Madison.
John A. Twele is a member of the committee which manages two of the First
American equity funds. Prior to joining First Bank in 1996, he was employed in
various positions at American Express Financial Advisors; Investment Advisers,
Inc.; Kemper Financial; and Mercantile Trust. Mr. Twele received his bachelor's
degree from Indiana University.
Jeff A. Johnson is portfolio co-manager for two of the First American
equity funds and is a member of the committee which manages another three First
American equity funds. He has been employed by First Bank in investment
management since 1991 and in commercial lending from 1985 to 1991. Mr. Johnson
received his master of fine arts degree from the University of Iowa.
4
<PAGE>
QUALIVEST FUNDS
CLASS A & C SHARES
<TABLE>
<S> <C>
Qualivest U.S. Treasury Money Market Fund Qualivest Optimized Stock Fund
Qualivest Money Market Fund Qualivest Income Equity Value Fund
Qualivest Tax-Free Money Market Fund Qualivest Large Companies Value Fund
Qualivest Tax-Free National Bond Fund Qualivest International Opportunities Fund
Qualivest Intermediate Bond Fund Qualivest Small Companies Value Fund
Qualivest Diversified Bond Fund
</TABLE>
SUPPLEMENT DATED JULY 9, 1997 TO PROSPECTUS DATED DECEMBER 1, 1996
The information set forth in the Prospectus dated December 1, 1996 is
hereby supplemented as follows:
ANTICIPATED CHANGE IN INVESTMENT ADVISER
The investment adviser to the funds named above (the "Funds") currently is
Qualivest Capital Management, Inc. ("Qualivest Capital Management"), an indirect
wholly owned subsidiary of U.S. Bancorp. It is anticipated that U.S. Bancorp
will merge with and into First Bank System, Inc. ("FBS") on or about August 1,
1997, subject to receipt of shareholder approvals by U.S. Bancorp and FBS and
satisfaction of customary closing conditions. The date upon which such merger
takes place is referred to herein as the "Closing Date."
Effective as of the Closing Date and subject to receipt of the exemptive
order described below, First Bank National Association ("First Bank"), a wholly
owned subsidiary of FBS, acting through First Bank's First Asset Management
group, will become the investment adviser to the Funds pursuant to an investment
advisory agreement (the "Interim Advisory Agreement") between the Funds and
First Bank. The investment advisory fees payable to First Bank under the
Interim Advisory Agreement, and the other substantive terms thereof, are the
same as under the Funds' current investment advisory agreement with Qualivest
Capital Management.
First Bank also acts as investment adviser to 27 other mutual funds,
including the 20 portfolios of First American Investment Funds, Inc., the three
portfolios of First American Funds, Inc., and the four portfolios of First
American Strategy Funds, Inc. (collectively, the "First American Funds"). First
Bank has acted as investment adviser to the First American Funds since 1982. As
of June 30, 1997, First Bank managed more than $42 billion in assets, including
more than $14 billion in assets of the First American Funds. The First Asset
Management group within First Bank employs more than 90 investment professionals
and provides investment management services with several different orientations,
including value, growth, fixed-income and tax-exempt investing. It is
anticipated that several individuals who are now employed by Qualivest Capital
Management will become employees of the First Asset Management group within
First Bank at the Closing Date. First Bank, which is headquartered in
Minneapolis, Minnesota, also engages in a general commercial and retail banking
business.
The Funds' Board of Trustees, including all of the Funds' disinterested
trustees, has approved the Interim Advisory Agreement. Prior to the Closing
Date, the Funds and First Bank expect to receive an exemptive order from the
Securities and Exchange Commission which will permit First Bank to act as
investment adviser to the Funds without shareholder approval for up to 120 days
following the Closing Date. It is expected that a shareholders meeting of the
Funds (the "Qualivest Shareholders Meeting") will be held within this 120-day
period to consider approval of the Interim Advisory Agreement. Until Fund
shareholders approve the Interim Advisory Agreement, the investment advisory
fees payable to First Bank thereunder will be placed in an interest-bearing
escrow account. The moneys in such account will be released to First Bank upon
the receipt of such shareholder
<PAGE>
approval or, in the event that shareholders of a Fund do not approve the Interim
Advisory Agreement, returned to that Fund.
Information concerning the individual portfolio managers or teams which
will manage the Funds under the Interim Advisory Agreement is set forth under
the heading "Portfolio Management" below.
PROPOSED COMBINATIONS OF QUALIVEST FUNDS WITH FIRST AMERICAN FUNDS
The Funds' Board of Trustees also has approved, subject to the approval of
Fund shareholders and to satisfaction of certain other conditions, the
combination of the Funds with and into certain existing First American Funds
which have similar investment objectives and policies or, in the case of two of
the Funds, into First American Funds which are to be newly formed. It is
anticipated that Fund shareholders will be asked to consider and act upon these
proposed combinations of funds at the Qualivest Shareholders Meeting referred to
under "Anticipated Change in Investment Adviser." Assuming the receipt of
shareholder approvals and satisfaction of conditions, it is currently
anticipated that these combinations of funds would be completed before the end
of 1997.
A separate proxy statement and proxy voting materials will be provided to
Fund shareholders in connection with the Qualivest Fund Shareholders meeting.
These materials will contain more complete information concerning the proposed
approval of the Interim Advisory Agreement and combinations of funds. No action
is required to be taken by Fund shareholders at the present time with respect to
these matters.
PORTFOLIO MANAGEMENT
The following individuals or teams are expected to manage the respective
Funds on behalf of First Bank under the Interim Advisory Agreement. Shares of
the Qualivest Tax-Free National Bond Fund and Qualivest Income Equity Value Fund
are not currently offered.
<TABLE>
<CAPTION>
Qualivest Fund Portfolio Manager(s) or Team
- -------------- ----------------------------
<S> <C>
Qualivest U.S. Treasury Money Market Fund. . . . . . James M. Ulrey III and James D. Palmer
Qualivest Money Market Fund. . . . . . . . . . . . . James M. Ulrey III and James D. Palmer
Qualivest Tax-Free Money Market Fund . . . . . . . . James M. Ulrey III and James D. Palmer
Qualivest Intermediate Bond Fund . . . . . . . . . . Martin L. Jones and Lucille Rehkamp
Qualivest Diversified Bond Fund. . . . . . . . . . . Martin L. Jones and Lucille Rehkamp
Qualivest Optimized Stock Fund . . . . . . . . . . . James S. Rovner and Evan Lundquist
Qualivest Large Companies Value Fund . . . . . . . . Value Team (see below)
Qualivest International Opportunities Fund . . . . . James S. Rovner and Evan Lundquist
Qualivest Small Companies Value Fund . . . . . . . . Small Companies Value Team (see below)
</TABLE>
The Value Team referred to above is a committee composed of James Doak, John M.
Murphy, Jr., James S. Rovner, Albin S. Dubiak, Roland P. Whitcomb, Kevin Shields
and John A. Twele. The Small Companies Value Team referred to above is a
committee composed of Albin S. Dubiak, Roland P.
2
<PAGE>
Whitcomb and Jeff A. Johnson. Information concerning the individuals named in
the table and text above is as follows:
Joseph M. Ulrey III is portfolio co-manager for three of the First American
money market funds. For the past 6 years, he has managed assets for
institutional and individual investment advisory clients of First Bank.
Previously, Mr. Ulrey spent 10 years overseeing various functions in the
Treasury and Finance Divisions of First Bank. Mr. Ulrey graduated from
Macalester College with a bachelor's degree in mathematics/economics and
received his master's degree in business administration from the University of
Chicago.
James D. Palmer is portfolio co-manager for three of the First American
money market funds. Mr. Palmer joined First Bank in 1992, prior to which he was
a securities lending trader and senior master trust accountant with First Trust
National Association. He holds a bachelor's degree from the University of
Wisconsin -- LaCrosse and a master's degree in business administration from the
University of Minnesota.
Martin L. Jones is portfolio manager for three of the First American fixed
income funds. Mr. Jones has over 20 years of investment experience, and was
previously employed by Harris Trust & Savings Bank, Dillon Read & Co., and Loeb
Rhoades & Co. Mr. Jones received his bachelor's degree from Texas Tech
University, his master's degree from the University of Texas, and his master's
degree in business administration from the University of Chicago.
Lucille Rehkamp is portfolio co-manager for three of the First American
fixed income funds. She joined First Bank in 1979 and was formerly with
PaineWebber. Ms. Rehkamp received her bachelor's degree from Marquette
University.
James S. Rovner is portfolio manager or co-manager for two of the First
American equity funds and is a member of the committee which manages another two
First American equity funds. He joined First Bank in 1986 and has managed
assets for institutional and individual clients for over 15 years, specializing
in equity and balanced investment strategies. Mr. Rovner received his
bachelor's degree and his master's degree in business administration from the
University of Wisconsin. Mr. Rovner is a Chartered Financial Analyst.
Evan Lundquist is portfolio co-manager for one of the First American equity
funds. He joined First Bank in 1993 and received his bachelor's degree from St.
Mary's College.
James Doak is a member of the committees which manage five of the First
American equity funds. Mr. Doak joined First Bank in 1982 after serving two
years as Vice President of Loomis-Sayles & Co. Mr. Doak received his bachelor's
degree from Brown University and his master's degree in business administration
from the Wharton School of Business. Mr. Doak is a Chartered Financial Analyst.
John M. Murphy, Jr. is a member of the committees which manage five of the
First American equity funds. He is chief investment officer of the First Asset
Management group within First Bank, having joined First Bank in 1984.
Mr. Murphy received his bachelor's degree from Regis College.
Albin S. Dubiak is portfolio manager for three of the First American equity
funds and is a member of the committees which manage another five First American
equity funds. He began his investment career as a security trader with the
First National Bank of Chicago in 1963 before joining First Bank as an
investment analyst in 1969. Mr. Dubiak received his bachelor's degree from
Indiana University and his master's degree in business administration from the
University of Arizona.
Roland B. Whitcomb is portfolio co-manager for two of the First American
equity funds and is a member of the committees which manage another five First
American equity funds. Mr. Whitcomb
3
<PAGE>
joined First Bank in 1986 after serving as an account executive with Smith
Barney & Co. since 1979. He received his bachelor's degree from the University
of Chicago and is a Chartered Financial Analyst.
Kevin Shields is a member of the committee which manages two of the First
American equity funds. Mr. Shields, who joined First Bank in 1993, received his
bachelor's degree from Marquette University and his master's degree from the
University of Wisconsin -- Madison.
John A. Twele is a member of the committee which manages two of the First
American equity funds. Prior to joining First Bank in 1996, he was employed in
various positions at American Express Financial Advisors; Investment Advisers,
Inc.; Kemper Financial; and Mercantile Trust. Mr. Twele received his bachelor's
degree from Indiana University.
Jeff A. Johnson is portfolio co-manager for two of the First American
equity funds and is a member of the committee which manages another three First
American equity funds. He has been employed by First Bank in investment
management since 1991 and in commercial lending from 1985 to 1991. Mr. Johnson
received his master of fine arts degree from the University of Iowa.
Mr. Doak, Mr. Dubiak, Mr. Jones, Mr. Murphy, Mr. Rovner and Mr. Ulrey also
are members of the committee which manages four First American "funds of funds."
4
