WT MUTUAL FUND, 497, 2001-01-12

WT MUTUAL FUND
497, 2001-01-12

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THE ROXBURY LARGE CAP GROWTH FUND
THE ROXBURY MID CAP FUND
THE ROXBURY SCIENCE AND TECHNOLOGY FUND
THE ROXBURY SOCIALLY RESPONSIBLE FUND

400 Bellevue Parkway
Wilmington, Delaware 19809

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STATEMENT OF ADDITIONAL INFORMATION
NOVEMBER 1, 2000
(AS REVISED JANUARY 12, 2001)

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This Statement of Additional Information is not a prospectus and should be read
in conjunction with each Fund's current prospectus, dated November 1, 2000, as
amended from time to time. A copy of the current prospectuses may be obtained
without charge, by writing to Provident Distributors, Inc. ("PDI"), 3200 Horizon
Drive, King of Prussia, PA 19406, and from certain financial professionals such
as broker-dealers that have entered into servicing agreements with PDI or by
calling (800) 497-2960.
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TABLE OF CONTENTS

<TABLE>
<S> <C>
GENERAL INFORMATION 1
INVESTMENT POLICIES 1
INVESTMENT LIMITATIONS 3
TRUSTEES AND OFFICERS 4
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES 6
INVESTMENT ADVISORY AND OTHER SERVICES 7
DISTRIBUTION OF SHARES AND RULE 12b-1 PLAN 8
BROKERAGE ALLOCATION AND OTHER PRACTICES 10
CAPITAL STOCK AND OTHER SECURITIES 11
PURCHASE, REDEMPTION AND PRICING OF SHARES 11
DIVIDENDS 14
TAXATION OF THE FUND 14
CALCULATION OF PERFORMANCE INFORMATION 16
FINANCIAL STATEMENTS 19
APPENDIX A: OPTIONS, FUTURES AND FORWARD CURRENCY CONTRACT STRATEGIES A-1
APPENDIX B: DESCRIPTION OF RATINGS B-1
</TABLE>

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GENERAL INFORMATION

This Statement of Additional Information relates to the Class A, Class B and
Class C shares of The Roxbury Large Cap Growth Fund ("Large Cap Growth Fund"),
the Roxbury Mid Cap Fund ("Mid Cap Fund"), the Roxbury Science and Technology
Fund ("Science & Technology Fund") and the Roxbury Socially Responsible Fund
("Socially Responsible Fund") (each, a "Fund" and collectively, the "Funds").
All references to the Funds shall include references to the Series (as defined
herein) in which each Fund invests. With the exception of the Science and
Technology Fund, each Fund is a diversified series of WT Mutual Fund (the
"Trust") , a registered open-end management investment company organized as a
Delaware business trust. The Trust was organized on June 1, 1994. The name of
the Trust was changed from Kiewit Mutual Fund to WT Mutual Fund on October 20,
1998.

INVESTMENT POLICIES

Each Fund seeks to meet its investment objective by investing all of its
investable assets in a corresponding series of WT Investment Trust I (the
"Master") that has the same investment objective, policies and limitations as
the investing Fund. Large Cap Growth Fund, Mid Cap Fund, Science and Technology
Fund, and Socially Responsible Fund invest all of its investable assets in Large
Cap Growth Series, Mid Cap Series, Science and Technology Series and Socially
Responsible Series (each, a "Series"), respectively.

The following information supplements the information concerning each Fund's
investment objective, policies and limitations found in the prospectus. Unless
otherwise indicated, it applies to each Fund through its investment in its
corresponding Series. Although each Fund invests principally in common stocks,
each may make other kinds of investments from time to time.

CASH MANAGEMENT. Each Fund may invest in cash and cash equivalents including
high-quality money market instruments and money market funds in order to manage
cash flow in each Fund. Certain of these instruments are described below.

- MONEY MARKET FUNDS. Each Fund may invest in the securities of other
money market mutual funds, within the limits prescribed by the
Investment Company Act of 1940, as amended ("1940 Act"). These
limitations currently provide, in part, that a Fund may not purchase
shares of an investment company if (a) such a purchase would cause the
Fund to own in the aggregate more than 3% of the total outstanding
voting stock of the investment company or (b) such a purchase would
cause the Fund to have more than 5% of its total assets invested in
the investment company or (c) more than 10% of the Fund's total assets
to be invested in the aggregate in all investment companies.

- U.S. GOVERNMENT OBLIGATIONS. Each Fund may invest in debt securities
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities. Although all obligations of agencies and
instrumentalities are not direct obligations of the U.S. Treasury,
payment of the interest and principal on these obligations is
generally backed directly or indirectly by the U.S. government.

- COMMERCIAL PAPER. Each Fund may invest in commercial paper. Commercial
paper consists of short-term (up to 270 days) unsecured promissory
notes issued by corporations in order to finance their current
operations. Each Fund may invest only in commercial paper rated A-1 or
higher by S&P or Moody's or if not rated, determined by the adviser to
be of comparable quality. See "Appendix B - Description of Ratings."

- BANK OBLIGATIONS. Each Fund may invest in U.S. dollar-denominated
obligations of major banks, including certificates of deposits, time
deposits and bankers' acceptances of major U.S. and foreign banks and
their branches located outside of the United States, of U.S. branches
of foreign banks, of foreign branches of foreign banks, of U.S.
agencies of foreign banks and of wholly-owned banking subsidiaries of
such foreign banks located in the U.S. Obligations of foreign
branches of U.S. banks and U.S. branches of wholly owned subsidiaries
of foreign banks may be general obligations of the parent bank, or the
issuing branch or subsidiary, or both, or may be limited by the terms
of a specific obligation or by governmental regulation.

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Because such obligations are issued by foreign entities, they are
subject to the risks of foreign investing.

CONVERTIBLE SECURITIES. Convertible securities have characteristics similar to
both fixed income and equity securities. Because of the conversion feature, the
market value of convertible securities tends to move together with the market
value of the underlying stock. As a result, each Fund's selection of convertible
securities is based, to a great extent, on the potential for capital
appreciation that may exist in the underlying stock. The value of convertible
securities is also affected by prevailing interest rates, the credit quality of
the issuers and any call provisions.

Each Fund may invest in convertible securities that are rated, at the time of
purchase, in the three highest rating categories by a nationally recognized
statistical rating organization such as S&P or Moody's, or if unrated, are
determined by the adviser to be of comparable quality. See Appendix B
"Description of Ratings." Should the rating of a security be downgraded
subsequent to each Fund's purchase of the security, the adviser, as applicable,
will determine whether it is in the best interest of each Fund to retain the
security.

DEBT SECURITIES. Debt securities represent money borrowed that obligates the
issuer (e.g., a corporation, municipality, government, government agency) to
repay the borrowed amount at maturity (when the obligation is due and payable)
and usually to pay the holder interest at specific times.

HEDGING STRATEGIES. Each Fund may engage in certain hedging strategies that
involve options and futures. These hedging strategies are described in detail in
Appendix A.

ILLIQUID SECURITIES. Each Fund may invest no more than 15% of its net assets in
securities that at the time of purchase have legal or contractual restrictions
on resale or are otherwise illiquid. If the limitations on illiquid securities
are exceeded, other than by a change in market values, the condition will be
reported by the adviser to the Board of Trustees.

OPTIONS ON SECURITIES AND SECURITIES INDEXES. Each Fund may purchase call
options on securities that the adviser intends to include in such Fund in order
to fix the cost of a future purchase or attempt to enhance return by, for
example, participating in an anticipated increase in the value of a security.
Each Fund may purchase put options to hedge against a decline in the market
value of securities held in such Fund or in an attempt to enhance return. Each
Fund may write (sell) put and covered call options on securities in which they
are authorized to invest. Each Fund may also purchase put and call options, and
write put and covered call options on U.S. securities indexes. Stock index
options serve to hedge against overall fluctuations in the securities markets
rather than anticipated increases or decreases in the value of a particular
security. Of the percentage of the total assets of each Fund that are invested
in equity (or related) securities, each Fund may not invest more than 10% of
such assets in covered call options on securities and/or options on securities
indices.

REPURCHASE AGREEMENTS. Each Fund may invest in repurchase agreements. A
repurchase agreement is a transaction in which a Fund purchases a security from
a bank or recognized securities dealer and simultaneously commits to resell that
security to a bank or dealer at an agreed date and price reflecting a market
rate of interest, unrelated to the coupon rate or the maturity of the purchased
security. While it is not possible to eliminate all risks from these
transactions (particularly the possibility of a decline in the market value of
the underlying securities, as well as delays and costs to each Fund if the other
party to the repurchase agreement becomes bankrupt), it is the policy of each
Fund to limit repurchase transactions to primary dealers and banks whose
creditworthiness has been reviewed and found satisfactory by the adviser.
Repurchase agreements maturing in more than seven days are considered illiquid
for purposes of each Fund's investment limitations.

RESTRICTED SECURITIES. Restricted securities are securities that may not be sold
to the public without registration under the Securities Act of 1933 ("1933 Act")
or an exemption from registration. Restricted securities, including securities
eligible for re-sale under 1933 Act Rule 144A, that are determined to be liquid
are not subject to this limitation. This determination is to be made by the
adviser pursuant to guidelines adopted by the Board of Trustees. Under these
guidelines, the adviser will consider the frequency of trades and quotes for the
security, the number of dealers in, and potential purchasers for, the
securities, dealer undertakings to make a market in the security, and the nature
of the security and of the marketplace trades. In purchasing such restricted
securities, the adviser intends to purchase securities that are exempt from
registration under Rule 144A under the 1933 Act.

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SECURITIES LENDING. Each Fund may lend securities pursuant to agreements, which
require that the loans be continuously secured by collateral equal to 100% of
the market value of the loaned securities. Such collateral consists of cash,
securities of the U.S. Government or its agencies, or any combination of cash
and such securities. Such loans will not be made if, as a result, the aggregate
amount of all outstanding securities loans for each Fund exceeds one-third of
the value of such Fund's total assets taken at fair market value. Each Fund will
continue to receive interest on the securities lent while simultaneously earning
interest on the investment of the cash collateral in U.S. Government securities.
However, a Fund will normally pay lending fees to such broker-dealers and
related expenses from the interest earned on invested collateral. There may be
risks of delay in receiving additional collateral or risks of delay in recovery
of the securities and even loss of rights in the collateral should the borrower
of the securities fail financially. However, loans are made only to borrowers
deemed by the adviser to be of good standing and when, in the judgment of the
adviser, the consideration that can be earned currently from such securities
loans justifies the attendant risk. Either party upon reasonable notice to the
other party may terminate any loan.

INVESTMENT LIMITATIONS

Except as otherwise provided, each Fund and its corresponding Series has adopted
the investment limitations set forth below. Limitations which are designated as
fundamental policies may not be changed without the affirmative vote of the
lessor of (i) 67% or more of the shares of a Fund present at a shareholders
meeting if holders of more than 50% of the outstanding shares of the Fund are
present in person or by proxy or (ii) more than 50% of the outstanding shares of
a Fund. If any percentage restriction on investment or utilization of assets is
adhered to at the time an investment is made, a later change in percentage
resulting from a change in the market values of a Fund's assets or redemptions
of shares will not be considered a violation of the limitation.

Each Fund will not as a matter of fundamental policy:

1. purchase the securities of any one issuer, if as a result, more than 5% of
a Fund's total assets would be invested in the securities of such issuer,
or the Fund would own or hold 10% or more of the outstanding voting
securities of that issuer, provided that (1) each Fund may invest up to 25%
of its total assets without regard to these limitations; (2) these
limitations do not apply to securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities; and (3) repurchase
agreements fully collateralized by U.S. Government obligations will be
treated as U.S. Government obligations; (This restriction does not apply to
the Science and Technology Fund.)

2. purchase securities of any issuer if, as a result, more than 25% of each
Fund's total assets would be invested in the securities of one or more
issuers having their principal business activities in the same industry,
provided, that this limitation does not apply to debt obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities; (This
restriction does not apply to the Science and Technology Fund. )

3. borrow money, provided that each Fund may borrow money for temporary or
emergency purposes, and then in an aggregate amount not in excess of 10% of
a Fund's total assets;

4. make loans to other persons, except by (1) purchasing debt securities in
accordance with its investment objective, policies and limitations; (2)
entering into repurchase agreements; or (3) engaging in securities loan
transactions;

5. underwrite any issue of securities, except to the extent that a Fund may be
considered to be acting as underwriter in connection with the disposition
of any portfolio security;

6. purchase or sell real estate, provided that each Fund may invest in
obligations secured by real estate or interests therein or obligations
issued by companies that invest in real estate or interests therein,
including real estate investment trusts;

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7. purchase or sell physical commodities, provided that each Fund may invest
in, purchase, sell or enter into financial options and futures, forward and
spot currency contracts, swap transactions and other derivative financial
instruments; or

8. issue senior securities, except to the extent permitted by the 1940 Act.

THE INVESTMENT LIMITATIONS DESCRIBED ABOVE DO NOT PROHIBIT A FUND FROM INVESTING
ALL OR SUBSTANTIALLY ALL OF ITS ASSETS IN THE SHARES OF ANOTHER REGISTERED
OPEN-END INVESTMENT COMPANY SIMILAR TO ITS CORRESPONDING SERIES.

The following non-fundamental policies apply to each Fund and may be changed by
the Board of Trustees without shareholder approval. Each Fund will not:

1. make short sales of securities except short sales against the box;

2. purchase securities on margin except for the use of short-term credit
necessary for the clearance of purchases and sales of portfolio securities;

3. purchase portfolio securities if its outstanding borrowings exceed 5% of
the value of its total assets.

TRUSTEES AND OFFICERS

The Board of Trustees supervises each Fund's activities and reviews contractual
arrangements with the Funds' service providers. The Trustees and officers are
listed below. All persons named as Trustees and officers also serve in a similar
capacity for the Master. An asterisk (*) indicates those Trustees who are
"interested persons" of the Trust.

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<TABLE>
<CAPTION>
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POSITION(S)
NAME, ADDRESS AND HELD WITH
DATE OF BIRTH THE TRUST PRINCIPAL OCCUPATION(S) DURING THE PAST FIVE YEARS
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<S> <C> <C>
JOHN J. QUINDLEN Trustee Mr. Quindlen retired as Senior Vice President - Finance of
313 Southwinds E.I. duPont de Nemours & Company, Inc. (diversified
1250 W. Southwinds Blvd. chemicals), a position held from 1984 to 1993. He served as
Vero Beach, FL 32963 Chief Financial Officer of E.I. duPont de Nemours & Company
Date of Birth: 5/32 from 1984 through June 1993. He also serves as a Director of
St. Joe Paper Co., and as a Trustee of Kalmar Pooled
Investment Trust.
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LOUIS KLEIN JR. Trustee Mr. Klein has been a self-employed financial consultant since
80 Butternut Lane 1991. He has served as Trustee of Manville Personal Injury
Stamford, CT 06903 Settlement Trust since 1991.
Date of Birth: 5/35
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CLEMENT C. MOORE, II Trustee Mr. Moore has been the Managing Partner, Mariemont Holdings,
5804 Quaker Neck Road LLC, a commercial real estate holding and development
Chestertown, MD 21620 company since 1980.
Date of Birth: 9/44
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ERIC BRUCKER Trustee Mr. Brucker has been the Dean of the College of Business,
University of Maine Public Policy and Health at the University of Maine since
Orono, ME 04473 September 1998. Prior to 1998, he was Dean of the School of
Date of Birth: 12/41 Management at the University of Michigan.
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WILLIAM P. RICHARDS, JR.* Trustee Mr. Richards is a Managing Director and Senior Portfolio
100 Wilshire Boulevard Manager with Roxbury Capital Management LLC. He has been with
Suite 600 the firm since 1998 and works with foundation and endowment
Santa Monica, CA 90401 accounts and leads the firm's mutual fund group. Previously,
Date of Birth: 11/36 he was a principal at Roger Engemann & Associates, and Van
Deventer & Hoc, an investment management firm. Prior to that, he
was with the consulting firm Booz, Allen and Hamilton.
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ERIC K. CHEUNG Vice Mr. Cheung has been a Vice President at Wilmington Trust
Rodney Square North President Company since 1986. From 1978 to 1986, he was the Fund
1100 N. Market Street Manager for fixed income assets of the Meritor Financial
Wilmington, DE 19890 Group. Since 1991, Mr. Cheung has been the Division Manager,
Date of Birth: 12/54 Fixed Income Products at Wilmington Trust Company.
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JOSEPH M. FAHEY, JR. Vice Mr. Fahey has been a Vice President with Rodney Square
Rodney Square North President Management Corporation ("RSMC") since 1992. He has been a
1100 North Market Street Director and Secretary of RSMC since 1986 and was an Assistant
Wilmington, DE 19809 Vice President from 1988 to 1992.
Date of Birth: 1/57
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FRED FILOON Vice Mr. Filoon is a Senior Vice President of CRM LLC, since 1989.
520 Madison Avenue President Mr. Filoon also serves as Chairman of the Round Hill Community
New York, NY 10022 Church and Chairman of the Retirement Board of the Town of
Date of Birth: 3/42 Greenwich.
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JOHN R. GILES Vice From 1991 to 1996, Mr. Giles was employed by Consistent Asset
Rodney Square North President Management Company; From April 1996 to the present, Mr. Giles
1100 N. Market Street has been employed by Wilmington Trust Company and serves as
Wilmington, DE 19890 Vice President.
Date of Birth: 8/57
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PAT COLLETTI Vice Mr. Colletti has been Vice President and Director of
400 Bellevue Parkway President Investment Accounting and Administration of PFPC Inc. since
Wilmington, DE 19809 and April 1999. From 1986 to April 1999, he was Controller for the
Date of Birth: 11/58 Treasurer Reserve Funds.
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</TABLE>

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The fees and expenses of the Trustees who are not "interested persons" of the
Trust ("Independent Trustees"), as defined in the 1940 Act are paid by the
Trust. The following table shows the fees paid during the fiscal year ended June
30, 2000 to the Independent Trustees for their service to the Trust and the
total compensation paid to the Trustees by the WT Fund Complex, which consists
of the Trust and the Master.

As of October 31, 2000, Mr. Richards, a Trustee of the Trust, owned
beneficially, or may be deemed to have owned beneficially, 18.05% of the
outstanding shares of the Large Cap Growth Fund.

TRUSTEES' FEES FOR THE FISCAL YEAR ENDED JUNE 30, 2000

<TABLE>
<CAPTION>
COMPENSATION TOTAL COMPENSATION
INDEPENDENT TRUSTEE FROM THE TRUST FROM THE WT FUND COMPLEX
------------------- -------------- ------------------------
<S> <C> <C>
Robert Arnold $10,700 $21,000
Eric Brucker $8,700 $19,600
Nicholas Giordano $11,800 $22,200
Louis Klein, Jr. $8,700 $17,100
Clement C. Moore, II $8,700 $17,100
John Quindlen $10,700 $23,600
</TABLE>

The Trust has an Audit Committee which has the responsibility, among other
things, to (1) recommend the selection of the Trust's independent auditors; (2)
review and approve the scope of the independent auditors' audit activity; (3)
review the financial statements which are the subject of the independent
auditors' certifications; and (4) review with such independent auditors the
adequacy of the Trust's basic accounting system and the effectiveness of the
Trust's internal accounting controls.

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

As of October 31, 2000, the following shareholders were known to own
beneficially 5% or more of the outstanding shares of the Large Cap Growth Fund:

<TABLE>
<S> <C>
James E. Scurlock................................19.10%
3824 E. Highland Dr.
Seattle, WA 98112

William P. Richards..............................18.05%
1024 Armada Dr.
Pasadena, CA 91103

Gail Frances Becker..............................15.82%
R/O IRA
11662 Duque Drive
Studio City, CA 91604
</TABLE>

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<TABLE>
<S> <C>
Michael Meyer Berkowitz IRA.......................8.02%
28052 Paseo Haciendo
San Juan Capistrano, CA 92675

Julia P. Castro
82-489 Doolittle Drive
Indio, CA 92201...................................5.27%
</TABLE>

INVESTMENT ADVISORY AND OTHER SERVICES

ADVISORY SERVICES

Roxbury Capital Management, LLC ("Roxbury" or the "adviser") serves as the
investment adviser to each Series. An employee of Roxbury, Mr. Richards, serves
as Trustee for the Trust. The Large Cap Growth Series pays a monthly advisory
fee to Roxbury at the annual rate of 0.55% of that Series' first $1 billion of
average daily net assets; 0.50% of the Series' next $1 billion of average daily
net assets; and 0.45% of the Series' average daily net assets over $2 billion.
The Mid Cap Series and the Socially Responsible Series each pay a monthly
advisory fee to Roxbury at the annual rate of 0.75% of the Series' first $1
billion of average daily net assets; 0.70% of the Series' next billion of
average daily net assets; and 0.65% of the Series' average daily net assets over
$2 billion. The Science and Technology Series pays a monthly advisory fee to
Roxbury at the annual rate of 1.00% of the Series' first $1 billion in assets;
0.95% of the Series' next $1 billion of average daily net assets; and 0.90% for
the Series' average daily net assets over $2 billion.

Roxbury has agreed to waive a portion of its advisory fee or reimburse expenses
to the extent total operating expenses, as a percentage of average net assets,
exceed 1.30% for the Class A shares of Large Cap Growth Fund and 2.05% for Class
B and Class C shares of the Large Cap Growth Fund. With respect to the Mid Cap
Fund and Socially Responsible Fund, Roxbury has agreed to waive a portion of its
advisory fee or reimburse expenses to the extent total operating expenses, as a
percentage of average net assets, exceed 1.55% for each Fund's Class A shares
and 2.30% for each Fund's Class B shares and Class C shares. Roxbury has also
agreed to waive a portion of its advisory fee or reimburse expenses to the
extent total operating expenses, as a percentage of average net assets, exceed
1.80% for the Class A shares of the Science and Technology Fund and 2.55% for
the Class B shares and Class C shares of the Science and Technology Fund. These
undertakings will remain in place until the Board of Trustees approves their
terminations.

Under the terms of the advisory agreement, Roxbury agrees to: (a) direct the
investments of each Series, subject to and in accordance with each Series'
investment objective, policies and limitations set forth in its prospectus and
this Statement of Additional Information; (b) purchase and sell for each Series,
securities and other investments consistent with each Series' investment
objectives and policies; (c) supply office facilities, equipment and personnel
necessary for servicing the investments of each Series; (d) pay the salaries of
all personnel of each Series and the adviser performing services relating to
research, statistical and investment activities on behalf of each Series; (e)
make available and provide such information as each Series and/or its
administrator may reasonably request for use in the preparation of its
registration statement, reports and other documents required by any applicable
federal, foreign or state statutes or regulations; (f) make its officers and
employees available to the Trustees and officers of the Trust for consultation
and discussion regarding the management of each Series and its investment
activities. Additionally, Roxbury agrees to create and maintain all necessary
records in accordance with all applicable laws, rules and regulations pertaining
to the various functions performed by it and not otherwise created and
maintained by another party pursuant to contract with the Trust. The adviser may
at any time or times, upon approval by the Board of Trustees, enter into one or
more sub-advisory agreements with a sub-adviser pursuant to which the adviser
delegates any or all of its duties as listed.

For the period March 14, 2000 (commencement of operations) through June 30,
2000, Roxbury waived its entire advisory fee.

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The agreement provides that the adviser shall not be liable for any error of
judgment or mistake of law or for any loss suffered by any of the Series in
connection with the matters to which the agreement relates, except to the extent
of a loss resulting from willful misfeasance, bad faith or gross negligence on
its part in the performance of its obligations and duties under the agreement.

The salaries of any officers and Trustees of the Trust who are affiliated with
the adviser and the salaries of all personnel of the adviser performing services
for each Fund relating to research, statistical and investment activities are
paid by the adviser.

CODE OF ETHICS

The Board of Trustees of the Fund and the Master and each of the Master's
investment advisers have each adopted a code of ethics pursuant to Rule 17j-1 of
1940 Act. Among other provisions, such codes require investment personnel and
certain other employees to pre-clear securities transactions that are subject to
the code of ethics, to file reports or duplicate confirmations regarding
personal securities transactions and to refrain from engaging in short-term
trading of a security and transactions of a security within seven days of a
Series' portfolio transaction involving the same security. Directors/trustees,
officers and employees of the Fund, Master, and each adviser are required to
abide by the provisions under their respective code of ethics. On a quarterly
and annual basis, the Board of Trustees reviews reports regarding the codes of
ethics, including information on any substantial violations of the codes.

ADMINISTRATION AND ACCOUNTING SERVICES

Under separate Administration and Accounting Services Agreements, PFPC Inc., 400
Bellevue Parkway, Wilmington, Delaware 19809 performs certain administrative and
accounting services for the Trust and the Master. These services include
preparing shareholder reports, providing statistical and research data,
assisting the adviser in compliance monitoring activities, and preparing and
filing federal and state tax returns on behalf of the Trust and the Master. In
addition, PFPC prepares and files various reports with the appropriate
regulatory agencies and prepares materials required by the SEC or any state
securities commission having jurisdiction over the Trust. The accounting
services performed by PFPC include determining the net asset value per share of
each Fund and Series and maintaining records relating to the securities
transactions of each Fund and Series. The Administration and Accounting Services
Agreements provide that PFPC and its affiliates shall not be liable for any
error of judgment or mistake of law or for any loss suffered by the Trust or the
Master, except to the extent of a loss resulting from willful misfeasance, bad
faith or gross negligence on their part in the performance of their obligations
and duties under the Administration and Accounting Services Agreements.

ADDITIONAL SERVICE PROVIDERS

INDEPENDENT AUDITORS. Ernst & Young LLP, serves as the independent auditor to
the Trust and the Master, providing services which include (1) auditing the
annual financial statements for each Fund and its corresponding Series, (2)
assistance and consultation in connection with SEC filings and (3) preparation
of the annual federal income tax returns filed on behalf of the Trust.

LEGAL COUNSEL. Pepper Hamilton LLP, 3000 Two Logan Square, 18th and Arch
Streets, Philadelphia, PA 19103, serves as counsel to the Trust and the Master.

CUSTODIAN. Wilmington Trust Company, 1100 N. Market Street, Wilmington, DE
19890, serves as the custodian.

TRANSFER AGENT. PFPC Inc. ("PFPC"), 400 Bellevue Parkway, Wilmington, DE
19809-0001, serves as the Transfer Agent and Dividend Paying Agent.

DISTRIBUTION OF SHARES AND RULE 12B-1 PLAN

Pursuant to an Amended and Restated Distribution Agreement for the Class B
shares of the Trust and a Distribution Agreement for all other shares of the
Trust (each, a "Distribution Agreement"), Provident Distributors, Inc. ("PDI"),
3200 Horizon Drive, King of Prussia, PA 19406, serves as the underwriter of the
Trust's shares. The terms of each

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Distribution Agreement grant PDI the right to sell the shares of the Trust as
agent for the Trust. Shares of the Trust are offered continuously.

Under the terms of each Distribution Agreement, PDI agrees to use all reasonable
efforts to secure purchasers for Class B and Class C shares of the Funds and to
pay expenses of printing and distributing prospectuses, statements of additional
information and reports prepared for use in connection with the sale of the
Funds' Class B and Class C shares and any other literature and advertising used
in connection with the offering, out of the compensation it receives pursuant to
the Funds' Amended and Restated Distribution Plan for its Class B Shares ("Class
B Plan") and Amended and Restated Distribution Plan for its Class C Shares
("Class C Plan"), each of which have been adopted pursuant to Rule 12b-1 under
the 1940 Act (collectively, the "Rule 12b-1 Plans"). PDI receives no
underwriting commissions or Rule 12b-1 fees in connection with the sale of the
Class A shares of the Funds.

Each Distribution Agreement provides that PDI, in the absence of willful
misfeasance, bad faith or gross negligence in the performance of its duties or
by reason of reckless disregard of its obligations and duties under each
agreement, will not be liable to any of the Funds or its shareholders for losses
arising in connection with the sale of shares of the Funds.

The Amended and Restated Distribution Agreement for the Funds' Class B shares
became effective as of October 17, 2000 and continues in effect for a period of
two years. Thereafter, the agreement may continue in effect for successive
annual periods provided such continuance is approved at least annually by a
majority of the Trustees, including a majority of the Independent Trustees. The
Distribution Agreement for the remaining shares of the Trust became effective as
of November 1, 1999 and was amended on October 17, 2000. It continues in effect
for a period of two years. Thereafter, it may continue in effect for successive
annual periods provided such continuance is approved at least annually by a
majority of the Trustees, including a majority of the Independent Trustees.

Each Distribution Agreement terminates automatically in the event of an
assignment, and is terminable without payment of any penalty with respect to a
Fund (i) (by vote of a majority of the Trustees of the Trust who are not
interested persons of the Trust and who have no direct or indirect financial
interest in the operation of any Rule 12b-1 Plan of the Funds or any agreements
related to such plan, or by vote of a majority of the outstanding voting
securities of the applicable Fund) on sixty (60) days' written notice to PDI; or
(ii) by PDI on sixty (60) days' written notice to the Trust.

PDI will be compensated for distribution services according to the Class B Plan
and the Class C Plan, regardless of PDI's expenses. The Class B Plan and Class C
Plan provide that PDI will be paid for distribution activities such as public
relations services, telephone services, sales presentations, media charges,
preparation, printing and mailing advertising and sales literature, data
processing necessary to support a distribution effort and printing and mailing
of prospectuses to prospective shareholders. Additionally, PDI may pay certain
financial institutions such as banks or broker-dealers who have entered into
servicing agreements with PDI and other financial institutions for distribution
and shareholder servicing activities.

The Class B Plan further provides that monthly payments shall be made in the
amount of 0.75% per annum of the Class B shares' average net assets as
compensation for PDI's role in the distribution of a Fund's Class B shares. The
Class C Plan provides that monthly payments shall be made in the amount of 0.75%
per annum of the average daily net assets to a Fund's Class C shares (or such
lesser amount as may be established by a majority of the Board of Trustees,
including a majority of the non-interested Trustees) as compensation for PDI's
role in the distribution of a Fund's Class C shares.

Under the Class B Plan and Class C Plan, if any payments made by the adviser out
of its advisory fee, not to exceed the amount of that fee, to any third parties
(including banks), including payments for shareholder servicing and transfer
agent functions, were deemed to be indirect financing by a Fund of the
distribution of its shares, such payments are authorized. A Series may execute
portfolio transactions with and purchase securities issued by depository
institutions that receive payments under the Class B Plan or Class C Plan. No
preference for instruments issued by such depository institutions is shown in
the selection of investments.

When purchasing Class A shares, a sales charge will be incurred at the time of
purchase (a "front-end load") based on the dollar amount of the purchase. The
maximum initial sales charge is 5.50%, which is reduced for purchases of

9
<PAGE>

$50,000 and more. Sales charges also may be reduced by using the accumulation
privilege described under "Sales Charge Reductions and Waiver". Although
purchases of $1,000,000 or more may not be subject to an initial sales charge,
if the initial sales charge is waived, such purchases may be subject to a CDSC
of 1.00% if the shares are redeemed within one year after purchase.

Part of the front-end sales charge is paid directly to the selling broker-dealer
(the "dealer reallowance"). The remainder is retained by the distributor and may
be used either to promote the sale of each of the Fund's shares or to compensate
PDI for its efforts to sell the shares of each Fund.

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
DEALER REALLOWANCE
YOUR INVESTMENT AS A PERCENTAGE OF AS A PERCENTAGE OF AS A PERCENTAGE OF
OFFERING PRICE YOUR INVESTMENT OFFERING PRICE
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$50,000 and less 5.50% 5.82% 5.00%
---------------------------------------------------------------------------------------------------
$50,000 up to $150,000 5.00% 5.26% 4.50%
---------------------------------------------------------------------------------------------------
$150,000 up to $250,000 4.50% 4.71% 4.00%
---------------------------------------------------------------------------------------------------
$250,000 up to $500,000 3.50% 3.63% 3.00%
---------------------------------------------------------------------------------------------------
$500,000 up to $1,000,000 3.00% 3.09% 2.75%
---------------------------------------------------------------------------------------------------
Over $1,000,000 0.00% 0.00% 0.00%
---------------------------------------------------------------------------------------------------
</TABLE>

BROKERAGE ALLOCATION AND OTHER PRACTICES

The adviser places all portfolio transactions on behalf of a Series. Any debt
securities purchased and sold by a Series are generally traded on the dealer
market on a net basis (i.e., without commission) through dealers acting for
their own account and not as brokers, or otherwise involve transactions directly
with the issuer of the instrument. This means that a dealer (the securities firm
or bank dealing with a Series) makes a market for securities by offering to buy
at one price and sell at a slightly higher price. The difference between the
prices is known as a spread. When securities are purchased in underwritten
offerings, they include a fixed amount of compensation to the underwriter.

The primary objective of the adviser in placing orders on behalf of a Series for
the purchase and sale of securities is to obtain best execution at the most
favorable prices through responsible brokers or dealers and, where the spread or
commission rates are negotiable, at competitive rates. In selecting a broker or
dealer, the adviser considers, among other things: (i) the price of the
securities to be purchased or sold; (ii) the rate of the spread or commission;
(iii) the size and difficulty of the order; (iv) the nature and character of the
spread or commission for the securities to be purchased or sold; (v) the
reliability, integrity, financial condition, general execution and operational
capability of the broker or dealer; and (vi) the quality of any research or
statistical services provided by the broker or dealer to a Series or to the
adviser.

The adviser cannot readily determine the extent to which spreads or commission
rates or net prices charged by brokers or dealers reflect the value of their
research, analysis, advice and similar services. In such cases, the adviser
receives services it otherwise might have had to perform itself. The research,
analysis, advice and similar services provided by brokers or dealers can be
useful to the adviser in serving its other clients, as well as in serving a
Series. Conversely, information provided to the adviser by brokers or dealers
who have executed transaction orders on behalf of other clients of the adviser
may be useful in providing services to a Series.

Some of the adviser's other clients may have investment objectives and programs
similar to that of one or more of the Series. Occasionally, recommendations made
to other clients may result in their purchasing or selling securities
simultaneously with a particular Series. Consequently, the demand for securities
being purchased or the supply of securities being sold may increase, and this
could have an adverse effect on the price of those securities. It is the policy
of the adviser not to favor one client over another in making recommendations or
in placing orders. In the event of a simultaneous transaction, purchases or
sales are averaged as to price, transaction costs are allocated among a Series
and other clients participating in the transaction on a pro rata basis and
purchases and sales are normally allocated among a series and the other clients
as to amount according to a formula determined prior to the execution of such
transactions.

10
<PAGE>

CAPITAL STOCK AND OTHER SECURITIES

With respect to the Funds, the Trust issues three separate classes of shares,
Class A, Class B and Class C. The shares of each Fund, when issued and paid for
in accordance with the prospectus, will be fully paid and non-assessable shares,
with equal voting rights and no preferences as to conversion, exchange,
dividends, redemption or any other feature.

The separate classes of shares each represent interests in the same portfolio of
investments, have the same rights and are identical in all respects, except that
Class B and Class C shares bear Rule 12b-1 distribution expenses of 0.75% of the
average net assets of the respective Class B and Class C shares and have
exclusive voting rights with respect to the Rule 12b-1 Plan pursuant to which
the Rule 12b-1 fee may be paid. Each Class bears a shareholder service fee of
0.25% of the average net assets of the Class. The net income attributable to a
class of shares and the dividends payable on such shares will be reduced by the
amount of any shareholder service or Rule 12b-1 fees; accordingly, the net asset
value of Class A, Class B and Class C shares will be reduced by such amount to
the extent a Fund has undistributed net income.

Shares of a Fund entitle holders to one vote per share and fractional votes for
fractional shares held. Shares have non-cumulative voting rights, do not have
preemptive or subscription rights and are transferable. Each Fund and class
takes separate votes on matters affecting only that Fund or class. For example,
a change in the fundamental investment policies for a Fund would be voted upon
only by shareholders of that Fund.

The Funds do not hold annual meetings of shareholders. The Trustees are required
to call a meeting of shareholders for the purpose of voting upon the question of
removal of any Trustee when requested in writing to do so by the shareholders of
record owning not less than 10% of a Fund's outstanding shares.

PURCHASE, REDEMPTION AND PRICING OF SHARES

PURCHASE OF SHARES.

BY MAIL: You or your financial intermediary may purchase shares by sending a
check drawn on a U.S. bank payable to either Roxbury Large Cap Growth Fund,
Roxbury Mid Cap Fund, Roxbury Science and Technology Fund or Roxbury Socially
Responsible Fund, along with a completed application (included at the end of the
prospectus). If a subsequent investment is being made, the check should also
indicate your Fund account number. When you make purchases by check, the Fund
may withhold payment on redemptions until it is reasonably satisfied that the
funds are collected (which can take up to 10 days). If you purchase shares with
a check that does not clear, your purchase will be canceled and you will be
responsible for any losses or fees incurred in that transaction. Send the check
and application to:

BY REGULAR MAIL BY OVERNIGHT MAIL
Roxbury Funds Roxbury Funds
c/o PFPC Inc. c/o PFPC Inc.
P.O. Box 8784 400 Bellevue Parkway - Suite 108
Wilmington, DE 19899 Wilmington, DE 19809

BY WIRE: You may purchase shares by wiring federal funds readily available.
Please call PFPC at (800) 497-2960 for instructions and to make specific
arrangements before making a purchase by wire, and if making an initial
purchase, to also obtain an account number.

INDIVIDUAL RETIREMENT ACCOUNTS: You may purchase shares of a Fund for a
tax-deferred retirement plan such as an individual retirement account ("IRA").
To order an application for an IRA and a brochure describing a Fund IRA, call
the Transfer Agent at (800) 497-2960. PFPC Trust Company, as custodian for each
IRA account receives an annual fee of $10 per account, paid directly to PFPC
Trust Company by the IRA shareholder. If the fee is not paid by the due date,
the appropriate number of Fund shares owned by the IRA will be redeemed
automatically as payment.

11
<PAGE>

AUTOMATIC INVESTMENT PLAN: You may purchase Fund shares through an Automatic
Investment Plan ("AIP"). Under the AIP, the Transfer Agent, at regular
intervals, will automatically debit your bank checking account in an amount of
$50 or more (after the $2,000 minimum initial investment). You may elect to
invest the specified amount monthly, bimonthly, quarterly, semiannually or
annually. The purchase of Fund shares will be effected at their offering price
at the close of regular trading on the New York Stock Exchange ("Exchange")
(currently 4:00 p.m., Eastern time), on or about the 20th day of the month. To
obtain an application for the AIP, check the appropriate box of the application
or call the Transfer Agent at (800) 497-2960.

PAYROLL INVESTMENT PLAN: The Payroll Investment Plan ("PIP") permits you to make
regularly scheduled purchases of Fund shares through payroll deductions. To open
a PIP account, you must submit a completed account application, payroll
deduction form and the minimum initial deposit to your employer's payroll
department. Then, a portion of your paycheck will automatically be transferred
to your PIP account for as long as you wish to participate in the plan. It is
the sole responsibility of your employer, not the Fund, the distributor, the
adviser or the transfer agent, to arrange for transactions under the PIP. The
Fund reserves the right to vary its minimum purchase requirements for employees
participating in a PIP.

REDEMPTION OF SHARES.

You or your financial intermediary may sell your shares on any Business Day as
described below. Redemptions are effected at the NAV next determined after the
Transfer Agent has received your redemption request. It is the responsibility of
your financial intermediary to transmit redemption orders and credit your
account with redemption proceeds on a timely basis. Redemption checks are mailed
on the next Business Day following receipt by the Transfer Agent of redemption
instructions, but never later than 7 days following such receipt. Amounts
redeemed by wire are normally wired on the date of receipt of redemption
instructions (if received by the Transfer Agent before 4:00 p.m. Eastern time),
or the next Business Day (if received after 4:00 p.m. Eastern time, or on a
non-Business Day), but never later than 7 days following such receipt.

BY MAIL: If you redeem your shares by mail, you should submit written
instructions with a "signature guarantee." A signature guarantee verifies the
authenticity of your signature. When the fund requires a signature guarantee, a
medallion signature guarantee must be provided. A medallion signature guarantee
may be obtained from a domestic bank or trust company, broker, dealer, clearing
agency, savings association, or other financial institution, which is
participating in a medallion program recognized by the Securities Transfer
Association. The three recognized medallion programs are Securities Transfer
Agents Medallion Program (STAMP), Stock Exchanges Medallion Program (SEMP) and
New York Stock Exchange, Inc. Medallion Signature Program (NYSE MSP). Signature
guarantees from financial institutions, which are not participating in one of
these programs will not be accepted. You can obtain one from most banking
institutions or securities brokers, but not from a Notary Public. You must
indicate the Fund name, your account number and your name. The written
instructions and signature guarantee should be mailed to:

BY REGULAR MAIL BY OVERNIGHT MAIL
Roxbury Funds Roxbury Funds
c/o PFPC Inc. c/o PFPC Inc.
P.O. Box 8784 400 Bellevue Parkway - Suite 108
Wilmington, DE 19809 Wilmington, DE 19809

BY TELEPHONE: If you prefer to redeem your shares by telephone you may elect to
do so. However, there are certain risks. Each Fund has certain safeguards and
procedures to confirm the identity of callers and to confirm that the
instructions communicated are genuine. If such procedures are followed, you will
bear the risk of any losses.

BY WIRE: Redemption proceeds may be wired to your predesignated bank account in
any commercial bank in the United States if the amount is $1,000 or more. The
receiving bank may charge a fee for this service. Proceeds may also be mailed to
your bank or, for amounts of $10,000 or less, mailed to your Fund account
address of record if the address has been established for at least 60 days. In
order to authorize the Transfer Agent to mail redemption proceeds to your Fund
account address of record, complete the appropriate section of the Application
for Telephone Redemptions or include your Fund account address of record when
you submit written instructions. You may

12
<PAGE>

change the account that you have designated to receive amounts redeemed at any
time. Any request to change the account designated to receive redemption
proceeds should be accompanied by a guarantee of the shareholder's signature by
an eligible institution. A signature and a signature guarantee are required for
each person in whose name the account is registered. Further documentation will
be required to change the designated account when a corporation, other
organization, trust, fiduciary or other institutional investor holds the Fund
shares.

SYSTEMATIC WITHDRAWAL PLAN: If you own Fund shares with a value of $10,000 or
more you may participate in the Systematic Withdrawal Plan ("SWP"). Under the
SWP, you may automatically redeem a portion of your account monthly, bimonthly,
quarterly, semiannually or annually. The minimum withdrawal available is $100.
All the redemptions of Fund shares, including bi-monthly redemptions of Fund
shares, will be effected at the NAV determined on or about the 25th day of the
month.

ADDITIONAL INFORMATION REGARDING REDEMPTIONS: If shares to be redeemed represent
a recent investment made by check, the Fund reserves the right not to make the
redemption proceeds available until it has reasonable grounds to believe that
the check has been collected (which could take up to 10 days).

To ensure proper authorization before redeeming Fund shares, the Transfer Agent
may require additional documents such as, but not restricted to, stock powers,
trust instruments, death certificates, appointments as fiduciary, certificates
of corporate authority and waivers of tax required in some states when settling
estates.

When shares are held in the name of a corporation, other organization, trust,
fiduciary or other institutional investor, the Transfer Agent requires, in
addition to the stock power, certified evidence of authority to sign the
necessary instruments of transfer. These procedures are for the protection of
shareholders and should be followed to ensure prompt payment. Redemption
requests must not be conditional as to date or price of the redemption. Proceeds
of a redemption will be sent within 7 days of acceptance of shares tendered for
redemption. Delay may result if the purchase check has not yet cleared, but the
delay will be no longer than required to verify that the purchase check has
cleared, and the Funds will act as quickly as possible to minimize delay.

The value of shares redeemed may be more or less than your cost, depending on
the net asset value at the time of redemption. Redemption of shares may result
in tax consequences (gain or loss) to you, and the proceeds of a redemption may
be subject to backup withholding.

Your right to redeem shares and to receive payment therefore may be suspended
when (a) the Exchange is closed, other than customary weekend and holiday
closings, (b) trading on the Exchange is restricted, (c) an emergency exists as
a result of which it is not reasonably practicable to dispose of the Fund's
securities or to determine the value of the Fund's net assets, or (d) ordered by
a governmental body having jurisdiction over the Fund for the protection of the
Fund's shareholders, provided that applicable rules and regulations of the SEC
(or any succeeding governmental authority) shall govern as to whether a
condition described in (b), (c) or (d) exists. In case of such suspension,
shareholders of the Fund may withdraw their requests for redemption or may
receive payment based on the net asset value of the Fund next determined after
the suspension is lifted.

Each Fund 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 with readily marketable securities chosen by each Fund and valued in the
same way as they would be valued for purposes of computing the net asset value
of each Fund. If payment is made in securities, you may incur transaction
expenses in converting these securities into cash. Each Fund has elected,
however, to be governed by Rule 18f-1 under the 1940 Act, as a result of which
each Fund is obligated to redeem shares solely in cash if the redemption
requests are made by one shareholder account up to the lesser of $250,000 or 1%
of the net assets of that particular Fund during any 90-day period. This
election is irrevocable unless the SEC permits its withdrawal.

The net asset value per share of each Fund is determined by dividing the value
of each Fund's net assets by the total number of that Fund's shares outstanding.
This determination is made by PFPC, as of the close of regular trading on the
Exchange (currently 4:00 p.m., Eastern time) each day a Fund is open for
business. A Fund is considered to be open for business on days when the
Exchange, PFPC and the Philadelphia branch office of the Federal Reserve are
open for business.

13
<PAGE>

In valuing a Fund's assets, a security listed on the Exchange (and not subject
to restrictions against sale by the Funds on the Exchange) will be valued at its
last sale price on the Exchange on the day the security is valued. Lacking any
sales on such day, the security will be valued at the mean between the closing
asked price and the closing bid price. Securities listed on other exchanges (and
not subject to restriction against sale by the Funds on such exchanges) will be
similarly valued, using quotations on the exchange on which the security is
traded most extensively. Unlisted securities that are quoted on the National
Association of Securities Dealers' National Market System, for which there have
been sales of such securities on such day, shall be valued at the last sale
price reported on such system on the day the security is valued. If there are no
such sales on such day, the value shall be the mean between the closing asked
price and the closing bid price. The value of such securities quoted on the
NASDAQ Stock Market System, but not listed on the National Market System, shall
be valued at the mean between the closing asked price and the closing bid price.
Unlisted securities that are not quoted on the NASDAQ Stock Market System and
for which over-the-counter market quotations are readily available will be
valued at the mean between the current bid and asked prices for such security in
the over-the-counter market. Other unlisted securities (and listed securities
subject to restriction on sale) will be valued at fair value as determined in
good faith under the direction of the Board of Trustees although the actual
calculation may be done by others. Short-term investments with remaining
maturities of less than 61 days are valued at amortized cost.

DIVIDENDS

Dividends from each Fund's net investment income and distributions of net
short-term capital gain and net capital gain (the excess of net long-term
capital gain over the short-term capital loss) realized by each Fund, after
deducting any available capital loss carryovers are declared and paid to its
shareholders annually.

TAXATION OF THE FUND

GENERAL. Each Fund is treated as a separate corporation for federal income tax
purposes. To qualify or continue to qualify for treatment as a regulated
investment company ("RIC") under the Internal Revenue Code of 1986, as amended
(the "Code"), each Fund must distribute to its shareholders for each taxable
year at least 90% of its investment company taxable income (consisting generally
of net investment income and net short-term capital gain and must meet several
additional requirements. For each Fund, these requirements include the
following: (1) the Fund must derive at least 90% of its gross income each
taxable year from dividends, interest, payments with respect to securities loans
and gains from the sale or other disposition of securities or foreign
currencies, or other income (including gains from options, futures and forward
contracts) derived with respect to its business of investing in securities or
those currencies; (2) at the close of each quarter of the Fund's taxable year,
at least 50% of the value of its total assets must be represented by cash and
cash items, U.S. Government securities, securities of other RICs and other
securities, with these other securities limited, in respect of any one issuer,
to an amount that does not exceed 5% of the value of the Fund's total assets and
that does not represent more than 10% of the issuer's outstanding voting
securities; and (3) at the close of each quarter of the Fund's taxable year, not
more than 25% of the value of its total assets may be invested in securities
(other than U.S. Government securities or the securities of other RICs) of any
one issuer.

If a Fund failed to qualify for treatment as a RIC in any taxable year, it would
be subject to tax on its taxable income at corporate rates and all distributions
from earnings and profits, including any distributions from net capital gain
(the excess of net long-term capital gain over net short-term capital loss),
would be taxable to its shareholders as ordinary income. In addition, a Fund
could be required to recognize unrealized gains, pay substantial taxes and
interest and make substantial distributions before qualifying again for RIC
treatment.

Each Fund will be subject to a nondeductible 4% excise tax (the "Excise Tax") to
the extent it fails to distribute by the end of any calendar year substantially
all of its ordinary income for that year and capital gain net income for the
one-year period ending on October 31 of that year, plus certain other amounts.

Each Fund will be taxed on the amount of its undistributed net capital gain over
the amount of its deduction for dividends paid, determined with reference to
capital gain dividends only. Each Fund is permitted to elect to include all or a
portion of such undistributed net capital gain in the income of its shareholders
on the last day of its taxable year. In such case the shareholder is given
credit for the tax that the RIC paid and is entitled to increase its basis by
the difference between the amount of includible gain and tax deemed paid.
Currently, an individual's maximum tax

14
<PAGE>

rate on long-term capital gains is 20%. A capital gain dividend is treated by
the shareholders as a long-term capital gain regardless of how long the Investor
has owned the stock in a Fund.

If a Fund invests in any instruments that generate taxable income, under the
circumstances described in the prospectus, distributions of the interest earned
thereon will be taxable to its shareholders as ordinary income to the extent of
its earnings and profits. If such distribution to its shareholders is in excess
of its current and accumulated earnings and profits in any taxable year, the
excess distribution will be treated by each shareholder as a return of capital
to the extent of the shareholder's tax basis and thereafter as capital gain. If
a Fund realizes capital gain as a result of market transactions, any
distribution of that gain will be taxable to its shareholders and treated as a
capital gain.

Dividends and other distributions declared by each Fund in October, November or
December of any year and payable to shareholders of record on a date in one of
those months will be deemed to have been paid by the Fund and received by you on
December 31 of that year if they are paid by a Fund during the following
January. Accordingly, such distributions will be taxed to you for the year in
which that December 31 falls.

You should be aware that if Fund shares are purchased shortly before the record
date for any dividend (other than an exempt-interest dividend) or capital gain
distribution, you will pay full price for the shares and will receive some
portion of the price back as a taxable distribution.

It is anticipated that all or a portion of the dividends from the net investment
income of a Fund will qualify for the dividends-received deduction allowed to
corporations. Corporate shareholders of these Funds are generally entitled to
take the dividends received deduction with respect to all or a portion of the
ordinary income dividends paid, to the extent of the Fund's qualifying dividend
income. The qualifying portion may not exceed the aggregate dividends received
by a Fund from U.S. corporations. However, dividends received by a corporate
shareholder and deducted by it pursuant to the dividends-received deduction are
subject indirectly to the federal alternative minimum tax. Moreover, the
dividends-received deduction will be reduced to the extent the shares with
respect to which the dividends are received are treated as debt-financed and
will be eliminated if those shares are deemed to have been held for less than 46
days. Distributions of net short-term capital gain and net capital gain are not
eligible for the dividends-received deduction.

Each Fund will inform shareholders within 60 days after their fiscal year-end of
the percentage of its dividends designated as qualifying for the dividends
received deduction.

Any loss realized by you on the redemption of shares within six months from the
date of their purchase will be treated as a long-term, instead of a short-term,
capital loss to the extent of any capital gain distributions to that shareholder
with respect to those shares.

HEDGING TRANSACTIONS. The use of hedging strategies, such as writing (selling)
and purchasing options and futures contracts and entering into forward currency
contracts, involves complex rules that will determine for federal income tax
purposes the amount, character and timing of recognition of the gains and losses
each Fund realizes in connection therewith. Gains from the disposition of
foreign currencies (except certain gains that may be excluded by future
regulations) and gains from options, futures and foreign currency contracts
derived by a Fund with respect to its business of investing in securities
qualify as permissible income under the Income Requirement.

SHORT SALES. Gain or loss from a short sale of property is generally considered
as capital gain or loss to the extent the property used to close the short sale
constitutes a capital asset in the Fund's hands. Except in certain situations,
special rules would generally treat the gains on short sales as short-term
capital gains and would terminate the running of the holding period of
"substantially identical property" held by the Fund. Moreover, a loss on a short
sale will be treated as a long-term loss if, on the date of the short sale,
"substantially identical property" held by the Fund has a long-term holding
period.

STRADDLES. Code Section 1092 (dealing with straddles) also may affect the
taxation of options, futures and forward contracts in which each Fund may
invest. Section 1092 defines a "straddle" as offsetting positions with respect
to personal property; for these purposes, options, futures and forward contracts
are personal property. Under Section

15
<PAGE>

1092, any loss from the disposition of a position in a straddle generally may be
deducted only to the extent the loss exceeds the unrealized gain on the
offsetting position(s) of the straddle. Section 1092 also provides certain "wash
sale" rules, which apply to transactions where a position is sold at a loss and
a new offsetting position is acquired within a prescribed period, and "short
sale" rules applicable to straddles (see above). If a Fund makes certain
elections, the amount, character and timing of the recognition of gains and
losses from the affected straddle positions would be determined under rules that
vary according to the elections made. Because only a few of the regulations
implementing the straddle rules have been promulgated, the tax consequences to a
Fund of straddle transactions are not entirely clear.

CONSTRUCTIVE SALE. If a Fund has an "appreciated financial position" --
generally, an interest (including an interest through an option, futures or
forward contract or short sale) with respect to any stock, debt instrument
(other than "straight debt") or partnership interest the fair market value of
which exceeds its adjusted basis -- and enters into a "constructive sale" of the
same or substantially similar property, a Fund will be treated as having made an
actual sale thereof, with the result that gain will be recognized at that time.
A constructive sale generally consists of a short sale, an offsetting notional
principal contract or futures or forward contract entered into by a Fund or a
related person with respect to the same or substantially similar property. In
addition, if the appreciated financial position is itself a short sale or such a
contract, acquisition of the underlying property or substantially similar
property will be deemed a constructive sale.

The foregoing tax discussion is a summary included for general informational
purposes only. Each shareholder is advised to consult its own tax adviser with
respect to the specific tax consequences to it of an investment in a Fund,
including the effect and applicability of state, local, foreign and other tax
laws and the possible effects of changes in federal or other tax laws.

Shortly after the end of each year, PFPC calculates the federal income tax
status of all distributions made during the year. In addition to federal income
tax, shareholders may be subject to state and local taxes on distributions from
a Fund. You should consult your tax adviser regarding specific questions
relating to federal, state and local taxes.

CALCULATION OF PERFORMANCE INFORMATION

The performance of each Fund may be quoted in terms of its yield and its total
return in advertising and other promotional materials. Performance data quoted
represents past performance and is not intended to indicate future performance.
Performance of each Fund will vary based on changes in market conditions and the
level of each Fund's expenses. These performance figures are calculated in the
following manner:

A. AVERAGE ANNUAL TOTAL RETURN is the average annual compound rate of
return for the periods of one year, five years, ten years and the life of a
Fund, where applicable, all ended on the last day of a recent calendar quarter.
Average annual total return quotations reflect changes in the price of a Fund's
shares, if any, and assume that all dividends during the respective periods were
reinvested in Fund shares. Average annual total return is calculated by finding
the average annual compound rates of return of a hypothetical investment over
such periods, according to the following formula (average annual total return is
then expressed as a percentage):

1/n - 1
T = (ERV/P)

Where: P = a hypothetical initial investment of $1,000

T = average annual total return

n = number of years

ERV = ending redeemable value: ERV is the value, at the
end of the applicable period, of a hypothetical
$1,000 investment made at the beginning of the
applicable period.

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<PAGE>

B. YIELD CALCULATIONS. From time to time, a Fund may advertise its yield.
Yield for a Fund is calculated by dividing a Fund's investment income for a
30-day period, net of expenses, by the average number of shares entitled to
receive dividends during that period according to the following formula:

6-1
YIELD = 2[((A-B)/CD + 1) ]

where:

a = dividends and interest earned during the period;
b = expenses accrued for the period (net of reimbursements);
c = the average daily number of shares outstanding during the
period that were entitled to receive dividends; and
d = the maximum offering price per share on the last day of
the period.

The result is expressed as an annualized percentage (assuming semiannual
compounding) of the maximum offering price per share at the end of the period.

Except as noted below, in determining interest earned during the period
(variable "a" in the above formula), pfpc calculates the interest earned on each
debt instrument held by a Fund during the period by: (i) computing the
instrument's yield to maturity, based on the value of the instrument (including
actual accrued interest) as of the last business day of the period or, if the
instrument was purchased during the period, the purchase price plus accrued
interest; (ii) dividing the yield to maturity by 360; and (iii) multiplying the
resulting quotient by the value of the instrument (including actual accrued
interest). Once interest earned is calculated in this fashion for each debt
instrument held by a Fund, interest earned during the period is then determined
by totaling the interest earned on all debt instruments held by the Fund.

For purposes of these calculations, the maturity of a debt instrument with one
or more call provisions is assumed to be the next date on which the instrument
reasonably can be expected to be called or, if none, the maturity date. In
general, interest income is reduced with respect to debt instruments trading at
a premium over their par value by subtracting a portion of the premium from
income on a daily basis, and increased with respect to debt instruments trading
at a discount by adding a portion of the discount to daily income.

In determining dividends earned by any preferred stock or other equity
securities held by each Fund during the period (variable "a" in the above
formula), PFPC accrues the dividends daily at their stated dividend rates.
Capital gains and losses generally are excluded from yield calculations.

Because yield accounting methods differ from the accounting methods used to
calculate net investment income for other purposes, a Fund's yield may not equal
the dividend income actually paid to investors or the net investment income
reported with respect to a Fund in the Fund's financial statements.

Yield information may be useful in reviewing a Fund's performance and in
providing a basis for comparison with other investment alternatives. However, a
Fund's yields fluctuate, unlike investments that pay a fixed interest rate over
a stated period of time. Investors should recognize that in periods of declining
interest rates, a Fund's yields will tend to be somewhat higher than prevailing
market rates, and in periods of rising interest rates, a Fund's yields will tend
to be somewhat lower. Also, when interest rates are falling, the inflow of net
new money to a Fund from the continuous sale of its shares will likely be
invested in instruments producing lower yields than the balance of a Funds'
holdings, thereby reducing the current yields of a Fund. In periods of rising
interest rates, the opposite can be expected to occur.

COMPARISON OF FUND PERFORMANCE. A comparison of the quoted performance offered
for various investments is valid only if performance is calculated in the same
manner. Since there are many methods of calculating performance, investors
should consider the effects of the methods used to calculate performance when
comparing performance of each Fund with performance quoted with respect to other
investment companies or types of investments. For example, it is useful to note
that yields reported on debt instruments are generally prospective, contrasted
with the historical yields reported by a Fund.

In connection with communicating its performance to current or prospective
shareholders, a Fund also may compare these figures to the performance of other
mutual funds tracked by mutual fund rating services or to unmanaged indices
which may assume reinvestment of dividends but generally do not reflect
deductions for administrative and management costs.

17
<PAGE>

From time to time, in marketing and other literature, a Fund's performance may
be compared to the performance of broad groups of comparable mutual funds or
unmanaged indexes of comparable securities with similar investment goals, as
tracked by independent organizations such as Investment Company Data, Inc. (an
organization which provides performance ranking information for broad classes of
mutual funds), Lipper Analytical Services, Inc. ("Lipper") (a mutual fund
research firm which analyzes over 1,800 mutual funds), CDA Investment
Technologies, Inc. (an organization which provides mutual fund performance and
ranking information), Morningstar, Inc. (an organization which analyzes over
2,400 mutual funds) and other independent organizations. When Lipper's tracking
results are used, each Fund will be compared to Lipper's appropriate fund
category, that is, by fund objective and portfolio holdings. Rankings may be
listed among one or more of the asset-size classes as determined by Lipper. When
other organizations' tracking results are used, a Fund will be compared to the
appropriate fund category, that is, by fund objective and portfolio holdings, or
to the appropriate volatility grouping, where volatility is a measure of a
fund's risk.

Since the assets in all funds are always changing, a Fund may be ranked within
one asset-size class at one time and in another asset-size class at some other
time. In addition, the independent organization chosen to rank a Fund in
marketing and promotional literature may change from time to time depending upon
the basis of the independent organization's categorizations of mutual funds,
changes in a Fund's investment policies and investments, a Fund's asset size and
other factors deemed relevant. Advertisements and other marketing literature
will indicate the time period and Lipper asset-size class or other performance
ranking company criteria, as applicable, for the ranking in question.

Evaluations of Fund performance made by independent sources may also be used in
advertisements concerning a Fund, including reprints of or selections from,
editorials or articles about a Fund. Sources for performance information and
articles about a Fund may include the following:

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

CDA INVESTMENT TECHNOLOGIES, INC., an organization that provides performance and
ranking information through examining the dollar results of hypothetical mutual
fund investments and comparing these results against appropriate market indices.

CHANGING TIMES, THE KIPLINGER MAGAZINE, a monthly investment advisory
publication that periodically features the performance of a variety of
securities.

CONSUMER DIGEST, a monthly business/financial magazine that includes a "Money
Watch" section featuring financial news.

FINANCIAL WORLD, a general business/financial magazine that includes a "Market
Watch" department reporting on activities in the mutual fund industry.

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

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

IBC'S MONEY FUND REPORT, a weekly publication of IBC/Donoghue, Inc., of Ashland,
Massachusetts, reporting on the performance of the nation's money market funds,
summarizing money market fund activity, and including certain averages as
performance benchmarks, specifically "IBC's Money Fund Average," and "IBC's
Government Money Fund Average."

IBC'S MONEY FUND DIRECTORY, an annual directory ranking money market mutual
funds.

INVESTMENT COMPANY DATA, INC., an independent organization which provides
performance ranking information for broad classes of mutual funds.

18
<PAGE>

INVESTOR'S DAILY, a daily newspaper that features financial, economic, and
business news.

LIPPER ANALYTICAL SERVICES, INC.'S MUTUAL FUND PERFORMANCE ANALYSIS, a weekly
publication of industry-wide mutual fund averages by type of fund.

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

MUTUAL FUND VALUES, a biweekly Morningstar, Inc. publication that provides
ratings of mutual funds based on fund performance risk and portfolio
characteristics.

THE NEW YORK TIMES, a nationally distributed newspaper which regularly covers
financial news.

PERSONAL INVESTING NEWS, a monthly news publication that often reports on
investment opportunities and market conditions.

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

SUCCESS, a monthly magazine targeted to the world of entrepreneurs and growing
business, often featuring mutual fund performance data.

USA TODAY, the nation's number one daily newspaper.

U.S. NEWS AND WORLD REPORT, a national business weekly that periodically reports
mutual fund performance data.

WALL STREET JOURNAL, a Dow Jones and Company, Inc. newspaper that regularly
covers financial news.

WIESENBERGER INVESTMENT COMPANIES SERVICES, an annual compendium of information
about mutual funds and other investment companies, including comparative data on
funds' backgrounds, management policies, salient features, management results,
income and dividend records, and price ranges.

FINANCIAL STATEMENTS

The audited financial statements and financial highlights of Roxbury Large Cap
Growth Fund and its corresponding Series for the fiscal period from March 14,
2000, commencement of operations, through June 30, 2000, as set forth in its
Annual Report to shareholders, including the notes thereto and the report of
Ernst & Young LLP thereon, are incorporated herein by reference. Financial
statements for the Mid Cap, Science and Technology and Socially Responsible
Funds are not available since they were not in operation during the fiscal
reporting period.

19
<PAGE>

APPENDIX A

OPTIONS, FUTURES AND FORWARD CURRENCY CONTRACT STRATEGIES

REGULATION OF THE USE OF OPTIONS, FUTURES AND FORWARD CURRENCY CONTRACT
STRATEGIES. As discussed in the prospectus, in managing the Series, the adviser
may engage in certain options, futures and forward currency contract strategies
for certain bona fide hedging, risk management or other portfolio management
purposes. Certain special characteristics of and risks associated with using
these strategies are discussed below. Use of options, futures and forward
currency contracts is subject to applicable regulations and/or interpretations
of the SEC and the several options and futures exchanges upon which these
instruments may be traded. The Board of Trustees has adopted investment
guidelines (described below) reflecting these regulations.

In addition to the products, strategies and risks described below and in the
prospectus, the adviser expects to discover additional opportunities in
connection with options, futures and forward currency contracts. These new
opportunities may become available as new techniques develop, as regulatory
authorities broaden the range of permitted transactions and as new options,
futures and forward currency contracts are developed. These opportunities may be
utilized to the extent they are consistent with each Fund's investment objective
and limitations and permitted by applicable regulatory authorities. The
registration statement for the Funds will be supplemented to the extent that new
products and strategies involve materially different risks than those described
below and in the prospectus.

COVER REQUIREMENTS. The Series will not use leverage in their options and
futures. Accordingly, each Series will comply with guidelines established by the
SEC with respect to coverage of these strategies by either (1) setting aside
cash or liquid, unencumbered, daily marked-to-market securities in one or more
segregated accounts with the custodian in the prescribed amount; or (2) holding
securities or other options or futures contracts whose values are expected to
offset ("cover") their obligations thereunder. Securities, currencies, or other
options or futures contracts used for cover cannot be sold or closed out while
these strategies are outstanding, unless they are replaced with similar assets.
As a result, there is a possibility that the use of cover involving a large
percentage of a Series' assets could impede portfolio management, or the Series'
ability to meet redemption requests or other current obligations.

OPTIONS STRATEGIES. Each Series may purchase and write (sell) only those options
on securities and securities indices that are traded on U.S. exchanges.
Exchange-traded options in the U.S. are issued by a clearing organization
affiliated with the exchange, on which the option is listed, which, in effect,
guarantees completion of every exchange-traded option transaction.

Each Series may purchase call options on securities in which it is authorized to
invest in order to fix the cost of a future purchase. Call options also may be
used as a means of enhancing returns by, for example, participating in an
anticipated price increase of a security. In the event of a decline in the price
of the underlying security, use of this strategy would serve to limit the
potential loss to a Series to the option premium paid; conversely, if the market
price of the underlying security increases above the exercise price and the
Series either sells or exercises the option, any profit eventually realized
would be reduced by the premium paid.

Each Series may purchase put options on securities that it holds in order to
hedge against a decline in the market value of the securities held or to enhance
return. The put option enables a Series to sell the underlying security at the
predetermined exercise price; thus, the potential for loss to a Series below the
exercise price is limited to the option premium paid. If the market price of the
underlying security is higher than the exercise price of the put option, any
profit the Series realizes on the sale of the security is reduced by the premium
paid for the put option less any amount for which the put option may be sold.

Each Series may on certain occasions wish to hedge against a decline in the
market value of securities that it holds at a time when put options on those
particular securities are not available for purchase. At those times, a Series
may purchase a put option on other carefully selected securities in which it is
authorized to invest, the values of which historically have a high degree of
positive correlation to the value of the securities actually held. If the
adviser's judgment is correct, changes in the value of the put options should
generally offset changes in the value of the securities being hedged. However,
the correlation between the two values may not be as close in these transactions
as in transactions in which a Series purchases a put option on a security that
it holds. If the

A-1
<PAGE>

value of the securities underlying the put option falls below the value of the
portfolio securities, the put option may not provide complete protection against
a decline in the value of the portfolio securities.

Each Series may write covered call options on securities in which it is
authorized to invest for hedging purposes or to increase return in the form of
premiums received from the purchasers of the options. A call option gives the
purchaser of the option the right to buy, and the writer (seller) the obligation
to sell, the underlying security at the exercise price during the option period.
The strategy may be used to provide limited protection against a decrease in the
market price of the security, in an amount equal to the premium received for
writing the call option less any transaction costs. Thus, if the market price of
the underlying security held by the Series declines, the amount of the decline
will be offset wholly or in part by the amount of the premium received by the
Series. If, however, there is an increase in the market price of the underlying
security and the option is exercised, the corresponding Series will be obligated
to sell the security at less than its market value.

Each Series may also write covered put options on securities in which it is
authorized to invest. A put option gives the purchaser of the option the right
to sell, and the writer (seller) the obligation to buy, the underlying security
at the exercise price during the option period. So long as the obligation of the
writer continues, the writer may be assigned an exercise notice by the
broker-dealer through whom such option was sold, requiring it to make payment of
the exercise price against delivery of the underlying security. The operation of
put options in other respects, including their related risks and rewards, is
substantially identical to that of call options. If the put option is not
exercised, the Series will realize income in the amount of the premium received.
This technique could be used to enhance current return during periods of market
uncertainty. The risk in such a transaction would be that the market price of
the underlying securities would decline below the exercise price less the
premiums received, in which case the Series would expect to suffer a loss.

Each Series may purchase put and call options and write covered put and call
options on indexes in much the same manner as the more traditional options
discussed above, except that index options may serve as a hedge against overall
fluctuations in the securities markets (or a market sector) rather than
anticipated increases or decreases in the value of a particular security. An
index assigns values to the securities included in the index and fluctuates with
changes in such values. Settlements of index options are effected with cash
payments and do not involve delivery of securities. Thus, upon settlement of an
index option, the purchaser will realize, and the writer will pay, an amount
based on the difference between the exercise price and the closing price of the
index. The effectiveness of hedging techniques using index options will depend
on the extent to which price movements in the index selected correlate with
price movements of the securities in which the Series invests. Perfect
correlation is not possible because the securities held or to be acquired by the
Series will not exactly match the composition of indexes on which options are
purchased or written.

Each Series may purchase and write covered straddles on securities or indexes. A
long straddle is a combination of a call and a put purchased on the same
security where the exercise price of the put is less than or equal to the
exercise price on the call. The Series would enter into a long straddle when the
adviser believes that it is likely that prices will be more volatile during the
term of the options than is implied by the option pricing. A short straddle is a
combination of a call and a put written on the same security where the exercise
price on the put is less than or equal to the exercise price of the call where
the same issue of the security is considered "cover" for both the put and the
call. The Series would enter into a short straddle when the adviser believes
that it is unlikely that prices will be as volatile during the term of the
options as is implied by the option pricing. In such case, the Series will set
aside cash and/or liquid, unencumbered securities in a segregated account with
its custodian equivalent in value to the amount, if any, by which the put is
"in-the-money," that is, that amount by which the exercise price of the put
exceeds the current market value of the underlying security. Because straddles
involve multiple trades, they result in higher transaction costs and may be more
difficult to open and close out.

Each Series may purchase put and call warrants with values that vary depending
on the change in the value of one or more specified indexes ("index warrants").
An index warrant is usually issued by a bank or other financial institution and
gives a Series the right, at any time during the term of the warrant, to receive
upon exercise of the warrant a cash payment from the issuer of the warrant based
on the value of the underlying index at the time of exercise. In general, if a
Series holds a call warrant and the value of the underlying index rises above
the exercise price of the warrant, a Series will be entitled to receive a cash
payment from the issuer upon exercise based on the difference between the value
of the index and the exercise price of the warrant; if a Series holds a put
warrant

A-2
<PAGE>

and the value of the underlying index falls, a Series will be entitled to
receive a cash payment from the issuer upon exercise based on the difference
between the exercise price of the warrant and the value of the index. A Series
holding a call warrant would not be entitled to any payments from the issuer at
any time when the exercise price is greater than the value of the underlying
index; a Series holding a put warrant would not be entitled to any payments when
the exercise price is less than the value of the underlying index. If a Series
does not exercise an index warrant prior to its expiration, then that Series
loses the amount of the purchase price that it paid for the warrant.

A Series will normally use index warrants as it may use index options. The risks
of a Series' use of index warrants are generally similar to those relating to
its use of index options. Unlike most index options, however, index warrants are
issued in limited amounts and are not obligations of a regulated clearing
agency, but are backed only by the credit of the bank or other institution which
issues the warrant. Also, index warrants generally have longer terms than index
options. Index warrants are not likely to be as liquid as index options backed
by a recognized clearing agency. In addition, the terms of index warrants may
limit a Series' ability to exercise the warrants at any time or in any quantity.

OPTIONS GUIDELINES. In view of the risks involved in using the options
strategies described above, each Series has adopted the following investment
guidelines to govern its use of such strategies; these guidelines may be
modified by the Board of Trustees without shareholder approval:

(1) each Series will write only covered options, and each such
option will remain covered so long as each Series is
obligated thereby; and

(2) each Series will not write options (whether on securities
or securities indexes) if aggregate exercise prices of
previous written outstanding options, together with the
value of assets used to cover all outstanding positions,
would exceed 25% of the corresponding Series' total net
assets.

SPECIAL CHARACTERISTICS AND RISKS OF OPTIONS TRADING. Each Series may
effectively terminate its right or obligation under an option by entering into a
closing transaction. If a Series wishes to terminate its obligation to purchase
or sell securities under a put or a call option it has written, such Series may
purchase a put or a call option of the same series (that is, an option identical
in its terms to the option previously written). This is known as a closing
purchase transaction. Conversely, in order to terminate its right to purchase or
sell specified securities under a call or put option it has purchased, a Series
may sell an option of the same series as the option held. This is known as a
closing sale transaction. Closing transactions essentially permit a Series to
realize profits or limit losses on its options positions prior to the exercise
or expiration of the option. If a Series is unable to effect a closing purchase
transaction with respect to options it has acquired, that Series will have to
allow the options to expire without recovering all or a portion of the option
premiums paid. If a Series is unable to effect a closing purchase transaction
with respect to covered options it has written, the Series will not be able to
sell the underlying securities or dispose of assets used as cover until the
options expire or are exercised, and the Series may experience material losses
due to losses on the option transaction itself and in the covering securities.

In considering the use of options to enhance returns or for hedging purposes,
particular note should be taken of the following:

(1) The value of an option position will reflect, among other things,
the current market price of the underlying security or index, the
time remaining until expiration, the relationship of the exercise
price to the market price, the historical price volatility of the
underlying security or index, and general market conditions. For
this reason, the successful use of options depends upon the
adviser's ability to forecast the direction of price fluctuations
in the underlying securities markets or, in the case of index
options, fluctuations in the market sector represented by the
selected index.

(2) Options normally have expiration dates of up to three years. An
American style put or call option may be exercised at any time
during the option period while a European style put or call

A-3
<PAGE>

option may be exercised only upon expiration or during a fixed
period prior to expiration. The exercise price of the options may
be below, equal to or above the current market value of the
underlying security or index. Purchased options that expire
unexercised have no value. Unless an option purchased by a Series
is exercised or unless a closing transaction is effected with
respect to that position, the corresponding Series will realize a
loss in the amount of the premium paid and any transaction costs.

(3) A position in an exchange-listed option may be closed out only on
an exchange that provides a secondary market for identical
options. Although a Series intends to purchase or write only those
exchange-traded options for which there appears to be a liquid
secondary market, there is no assurance that a liquid secondary
market will exist for any particular option at any particular
time. A liquid market may be absent if: (i) there is insufficient
trading interest in the option; (ii) the exchange has imposed
restrictions on trading, such as trading halts, trading
suspensions or daily price limits; (iii) normal exchange
operations have been disrupted; or (iv) the exchange has
inadequate facilities to handle current trading volume.

(4) With certain exceptions, exchange listed options generally settle
by physical delivery of the underlying security. Index options are
settled exclusively in cash for the net amount, if any, by which
the option is "in-the-money" (where the value of the underlying
instrument exceeds, in the case of a call option, or is less than,
in the case of a put option, the exercise price of the option) at
the time the option is exercised. If a Series writes a call option
on an index, that Series will not know in advance the difference,
if any, between the closing value of the index on the exercise
date and the exercise price of the call option itself and thus
will not know the amount of cash payable upon settlement. If a
Series holds an index option and exercises it before the closing
index value for that day is available, that Series runs the risk
that the level of the underlying index may subsequently change.

(5) A Series' activities in the options markets may result in a higher
Series turnover rate and additional brokerage costs; however, a
Series also may save on commissions by using options as a hedge
rather than buying or selling individual securities in
anticipation of, or as a result of, market movements.

FUTURES AND RELATED OPTIONS STRATEGIES. Each Series may engage in futures
strategies for certain non-trading bona fide hedging, risk management and
portfolio management purposes.

A Series may sell securities index futures contracts in anticipation of a
general market or market sector decline that could adversely affect the market
value of the Series' securities holdings. To the extent that a portion of a
Series' holdings correlate with a given index, the sale of futures contracts on
that index could reduce the risks associated with a market decline and thus
provide an alternative to the liquidation of securities positions. For example,
if a Series correctly anticipates a general market decline and sells index
futures to hedge against this risk, the gain in the futures position should
offset some or all of the decline in the value of that Series' holdings. A
Series may purchase index futures contracts if a significant market or market
sector advance is anticipated. Such a purchase of a futures contract would serve
as a temporary substitute for the purchase of the underlying securities, which
may then be purchased, in an orderly fashion. This strategy may minimize the
effect of all or part of an increase in the market price of securities that a
Series intends to purchase. A rise in the price of the securities should be in
part or wholly offset by gains in the futures position.

As in the case of a purchase of an index futures contract, a Series may purchase
a call option on an index futures contract to hedge against a market advance in
securities that the corresponding Series plans to acquire at a future date. The
Series may write covered put options on index futures as a partial anticipatory
hedge, and may write covered call options on index futures as a partial hedge
against a decline in the prices of securities held by that Series. This is
analogous to writing covered call options on securities. The Series also may
purchase put options on index futures contracts. The purchase of put options on
index futures contracts is analogous to the purchase of protective put options
on individual securities where a level of protection is sought below which no
additional economic loss would be incurred by the Series.

A-4
<PAGE>

FUTURES AND RELATED OPTIONS GUIDELINES. In view of the risks involved in using
the futures strategies that are described above, each Series has adopted the
following investment guidelines to govern its use of such strategies. The Board
of Trustees may modify these guidelines without shareholder vote.

(1) Each Series will engage only in covered futures
transactions, and each such transaction will remain covered
so long as each Series is obligated thereby.

(2) Each Series will not write options on futures contracts if
aggregate exercise prices of previously written outstanding
options (whether on securities or securities indexes),
together with the value of assets used to cover all
outstanding futures positions, would exceed 25% of its
total net assets.

SPECIAL CHARACTERISTICS AND RISKS OF FUTURES AND RELATED OPTIONS TRADING. No
price is paid upon entering into a futures contract. Instead, upon entering into
a futures contract, each Series is required to deposit with its custodian, in a
segregated account in the name of the futures broker through whom the
transaction is effected, an amount of cash, U.S. Government securities or other
liquid instruments generally equal to 10% or less of the contract value. This
amount is known as "initial margin." When writing a call or a put option on a
futures contract, margin also must be deposited in accordance with applicable
exchange rules. Unlike margin in securities transactions, initial margin on
futures contracts does not involve borrowing to finance the futures
transactions. Rather, initial margin on a futures contract is in the nature of a
performance bond or good-faith deposit on the contract that is returned to the
Series upon termination of the transaction, assuming all obligations have been
satisfied. Under certain circumstances, such as periods of high volatility, a
Series may be required by a futures exchange to increase the level of its
initial margin payment. Additionally, initial margin requirements may be
increased generally in the future by regulatory action. Subsequent payments,
called "variation margin," to and from the broker, are made on a daily basis as
the value of the futures or options position varies, a process known as "marking
to market." For example, when a Series purchases a contract and the value of the
contract rises, the Series receives from the broker a variation margin payment
equal to that increase in value. Conversely, if the value of the futures
position declines, the Series is required to make a variation margin payment to
the broker equal to the decline in value. Variation margin does not involve
borrowing to finance the futures transaction, but rather represents a daily
settlement of the Series' obligations to or from a clearing organization.

Buyers and sellers of futures positions and options thereon can enter into
offsetting closing transactions, similar to closing transactions on options on
securities, by selling or purchasing an offsetting contract or option. Futures
contracts or options thereon may be closed only on an exchange or board of trade
providing a secondary market for such futures contracts or options.

Under certain circumstances, futures exchanges may establish daily limits on the
amount that the price of a futures contract or related option may vary either up
or down from the previous day's settlement price. Once the daily limit has been
reached in a particular contract, no trades may be made that day at a price
beyond that limit. The daily limit governs only price movements during a
particular trading day and therefore does not limit potential losses, because
prices could move to the daily limit for several consecutive trading days with
little or no trading and thereby prevent prompt liquidation of unfavorable
positions. In such event, it may not be possible for a Series to close a
position and, in the event of adverse price movements, the Series would have to
make daily cash payments of variation margin (except in the case of purchased
options). However, if futures contracts have been used to hedge portfolio
securities, such securities will not be sold until the contracts can be
terminated. In such circumstances, an increase in the price of the securities,
if any, may partially or completely offset losses on the futures contract.
However, there is no guarantee that the price of the securities will, in fact,
correlate with the price movements in the contracts and thus provide an offset
to losses on the contracts.

In considering a Series' use of futures contracts and related options,
particular note should be taken of the following:

(1) Successful use by a Series of futures contracts and related
options will depend upon the adviser's ability to predict
movements in the direction of the securities markets, which
requires different skills and techniques than predicting changes
in the prices of individual securities. Moreover, futures
contracts relate not only to the current price level of the
underlying

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securities, but also to anticipated price levels at some point in
the future. There is, in addition, the risk that the movements in
the price of the futures contract will not correlate with the
movements in the prices of the securities being hedged. For
example, if the price of an index futures contract moves less than
the price of the securities that are the subject of the hedge, the
hedge will not be fully effective, but if the price of the
securities being hedged has moved in an unfavorable direction, a
Series would be in a better position than if it had not hedged at
all. If the price of the securities being hedged has moved in a
favorable direction, the advantage may be partially offset by
losses in the futures position. In addition, if a Series has
insufficient cash, it may have to sell assets to meet daily
variation margin requirements. Any such sale of assets may or may
not be made at prices that reflect a rising market. Consequently,
a Series may need to sell assets at a time when such sales are
disadvantageous to that Series. If the price of the futures
contract moves more than the price of the underlying securities, a
Series will experience either a loss or a gain on the futures
contract that may or may not be completely offset by movements in
the price of the securities that are the subject of the hedge.

(2) In addition to the possibility that there may be an imperfect
correlation, or no correlation at all, between price movements in
the futures position and the securities being hedged, movements in
the prices of futures contracts may not correlate perfectly with
movements in the prices of the hedged securities due to price
distortions in the futures market. There may be several reasons
unrelated to the value of the underlying securities that cause
this situation to occur. First, as noted above, all participants
in the futures market are subject to initial and variation margin
requirements. If, to avoid meeting additional margin deposit
requirements or for other reasons, investors choose to close a
significant number of futures contracts through offsetting
transactions, distortions in the normal price relationship between
the securities and the futures markets may occur. Second, because
the margin deposit requirements in the futures market are less
onerous than margin requirements in the securities market, there
may be increased participation by speculators in the futures
market. Such speculative activity in the futures market also may
cause temporary price distortions. As a result, a correct forecast
of general market trends may not result in successful hedging
through the use of futures contracts over the short term. In
addition, activities of large traders in both the futures and
securities markets involving arbitrage and other investment
strategies may result in temporary price distortions.

(3) Positions in futures contracts may be closed out only on an
exchange or board of trade that provides a secondary market for
such futures contracts. Although the Series intend to purchase and
sell futures only on exchanges or boards of trade where there
appears to be an active secondary market, there is no assurance
that a liquid secondary market on an exchange or board of trade
will exist for any particular contract at any particular time. In
such event, it may not be possible to close a futures position,
and in the event of adverse price movements, the Series would
continue to be required to make variation margin payments.

(4) Like options on securities, options on futures contracts have
limited life. The ability to establish and close out options on
futures will be subject to the development and maintenance of
liquid secondary markets on the relevant exchanges or boards of
trade. There can be no certainty that such markets for all options
on futures contracts will develop.

(5) Purchasers of options on futures contracts pay a premium in cash
at the time of purchase. This amount and the transaction costs are
all that is at risk. Sellers of options on futures contracts,
however, must post initial margin and are subject to additional
margin calls that could be substantial in the event of adverse
price movements. In addition, although the maximum amount at risk
when a Series purchases an option is the premium paid for the
option and the transaction costs, there may be circumstances when
the purchase of an option on a futures contract would result in a
loss to a Series when the use of a futures contract would not,
such as when there is no movement in the level of the underlying
index value or the securities or currencies being hedged.

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(6) As is the case with options, a Series' activities in the futures
markets may result in a higher portfolio turnover rate and
additional transaction costs in the form of added brokerage
commissions. However, a Series also may save on commissions by
using futures contracts or options thereon as a hedge rather than
buying or selling individual securities in anticipation of, or as
a result of, market movements.

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APPENDIX B

DESCRIPTION OF RATINGS

Moody's and S&P are private services that provide ratings of the credit quality
of debt obligations. A description of the ratings assigned by Moody's and S&P to
the securities in which each Series may invest is discussed below. These ratings
represent the opinions of these rating services as to the quality of the
securities that they undertake to rate. It should be emphasized, however, that
ratings are general and are not absolute standards of quality. The adviser
attempts to discern variations in credit rankings of the rating services and to
anticipate changes in credit ranking. However, subsequent to purchase by a
Series, an issue of securities may cease to be rated or its rating may be
reduced below the minimum rating required for purchase by a Series. In that
event, the adviser will consider whether it is in the best interest of that
Series to continue to hold the securities.

MOODY'S RATINGS

CORPORATE AND MUNICIPAL BONDS.

Aaa: Bonds that are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edged." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.

Aa: Bonds that are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present that
make the long-term risk appear somewhat larger than the Aaa securities.

A: Bonds that are rated A possess many favorable investment attributes and
are to be considered as upper-medium-grade obligations. Factors giving security
to principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment some time in the future.

Baa: Bonds that are rated Baa are considered as medium-grade obligations
(i.e., they are neither highly protected nor poorly secured). Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.

CORPORATE AND MUNICIPAL COMMERCIAL PAPER. The highest rating for corporate and
municipal commercial paper is "P-1" (Prime-1). Issuers rated P-1 (or supporting
institutions) have a superior ability for repayment of senior short-term debt
obligations. P-1 repayment ability will often be evidenced by many of the
following characteristics:

- Leading market positions in well-established industries.

- High rates of return on funds employed.

- Conservative capitalization structure with moderate reliance on debt and
ample asset protection.

- Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.

- Well-established access to a range of financial markets and assured sources
of alternate liquidity.

MUNICIPAL NOTES. The highest ratings for state and municipal short-term
obligations are "MIG 1," "MIG 2" and "MIG 3" (or "VMIG 1," "VMIG 2" and "VMIG 3"
in the case of an issue having a variable-rate demand feature). Notes rated "MIG
1" or "VMIG 1" are judged to be of the best quality. There is present strong
protection by established cash flows, superior liquidity support or demonstrated
broad based access to the market for refinancing. Notes rated "MIG 2" or "VMIG
2" are of high quality, with margins of protection that are ample although not
so large as in the preceding group. Notes rated "MIG 3" or "VMIG 3" are of
favorable quality, with all security elements accounted for but lacking the
undeniable strength of the preceding grades. Liquidity and cash flow protection
may be narrow, and market access for refinancing is likely to be less well
established.

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S&P RATINGS

CORPORATE AND MUNICIPAL BONDS.

AAA: Bonds rated AAA are highest grade debt obligations. This rating indicates
an extremely strong capacity to pay interest and repay principal.

AA: Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from AAA issues only in small degree.

A: Bonds rated A have a strong capacity to pay interest and repay principal,
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than bonds in higher rated categories.

BBB: Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.

CORPORATE AND MUNICIPAL COMMERCIAL PAPER. The "A-1" rating for corporate and
municipal commercial paper indicates that the degree of safety regarding timely
payment is strong. Those issues determined to possess extremely strong safety
characteristics will be rated "A-1+."

MUNICIPAL NOTES. The "SP-1" rating reflects a very strong or strong capacity to
pay principal and interest. Those issues determined to possess overwhelming
safety characteristics will be rated "SP-1+." The "SP-2" rating reflects a
satisfactory capacity to pay principal and interest.

FITCH RATINGS

DESCRIPTION OF FITCH'S HIGHEST STATE AND MUNICIPAL NOTES RATING.
AAA - Bonds considered to be investment grade and of the highest credit quality.
The obligor has an exceptionally strong ability to pay interest and repay
principal, which is unlikely to be affected by reasonably foreseeable events.

AA - Bonds considered to be investment grade and of very high credit quality.
The obligor's ability to pay interest and repay principal is very strong,
although not quite as strong as bonds rated AAA.

F-1+ - Issues assigned this rating are regarded as having the strongest
degree of assurance for timely payment.

F-1 - Issues assigned this rating reflect an assurance of timely payment only
slightly less in degree than issues rated F-1+.

B-2