REPUBLIC PORTFOLIOS, POS AMI, 1996-02-26

REPUBLIC PORTFOLIOS
POS AMI, 1996-02-26

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As filed with the Securities and Exchange Commission on February 26, 1996
FILE NO. 811-8928

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT

UNDER

THE INVESTMENT COMPANY ACT OF 1940

Amendment No. 1

REPUBLIC PORTFOLIOS
(Exact Name of Registrant as Specified in Charter)

Post Office Box 2494, Elizabethan Square,
George Town, Grand Cayman, Cayman Islands, B.W.I.
(Address of Principal Executive Offices)

Registrant's Telephone Number, Including Area Code: (809) 945-1824

Philip W. Coolidge, 6 St. James Avenue, Boston, Massachusetts 02116
(Name and Address of Agent for Service)

Copy to: Alan S. Mostoff, Esq.
Dechert Price & Rhoads
1500 K Street, N.W.
Washington, D.C. 20005

RF045.EDG
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EXPLANATORY NOTE

This Registration Statement has been filed by Republic Portfolios (the
"Registrant") pursuant to Section 8(b) of the Investment Company Act of 1940, as
amended. However, beneficial interests in the Registrant are not being
registered under the Securities Act of 1933 (the "1933 Act") because such
interests will be issued solely in private placement transactions that do not
involve any "public offering" within the meaning of Section 4(2) of the 1933
Act. Investments in the Registrant may only be made by investment companies,
insurance company separate accounts, common or commingled trust funds or similar
organizations or entities that are "accredited investors" within the meaning of
Regulation D under the 1933 Act. This Registration Statement does not constitute
an offer to sell, or the solicitation of an offer to buy, any beneficial
interests in the Registrant.

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FT4174A

PART A
FIXED INCOME PORTFOLIO

Responses to Items 1 through 3 and 5A have been omitted pursuant to
paragraph 4 of Instructions F of the General Instructions to Form N-1A.

ITEM 4. GENERAL DESCRIPTION OF REGISTRANT.

Republic Portfolios (the "Portfolio Trust") is a diversified, open-end
management investment company which was organized as a trust under the law of
the State of New York on November 1, 1994. Beneficial interests of the Portfolio
Trust are divided into actual and potential series, only one of which, Fixed
Income Portfolio (the "Portfolio") is described herein. Additional series may be
established in the future. Beneficial interests in the Portfolio are issued
solely in private placement transactions that do not involve any "public
offering" within the meaning of Section 4(2) of the Securities Act of 1933, as
amended (the "1933 Act"). Investments in the Portfolio may only be made by
investment companies, insurance separate accounts, common or commingled trust
funds or similar organizations or entities that are "accredited investors"
within the meaning of Regulation D under the 1933 Act. This Registration
Statement does not constitute an offer to sell, or the solicitation of an offer
to buy, any "security" within the meaning of the 1933 Act.

Republic National Bank of New York ("Republic" or the "Manager") is the
investment manager of the Portfolio. Miller Anderson & Sherrerd ("MAS" or the
"Sub-Adviser") continuously manages the investments of the Portfolio.

The investment objective of the Portfolio is to seek to realize
above-average total return over a market cycle of three to five years,
consistent with reasonable risk, through investment primarily in a diversified
portfolio of U.S. Government securities, corporate bonds, mortgage-backed
securities and other fixed-income securities. The Portfolio's average weighted
maturity will ordinarily exceed five years.

References in this Part A to "Part B" are to the Part B relating to the
Portfolio.

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INVESTMENT OBJECTIVE

The investment objective of the Portfolio is to seek to realize
above-average total return over a market cycle of three to five years,
consistent with reasonable risk, through investment in a diversified portfolio
of U.S. Government securities, corporate bonds (including bonds rated below
investment grade commonly referred to as junk bonds), foreign fixed income
securities, mortgage-backed securities of domestic issuers and other
fixed-income securities. The Portfolio's average weighted maturity will
ordinarily exceed five years.

There can be no assurance that the investment objective of the
Portfolio will be achieved. The investment objective of the Portfolio may be
changed without investor approval. If there is a change in the investment
objective of the Portfolio, investors should consider whether the Portfolio
remains an appropriate investment in light of their then-current financial
position and needs. Investors in the Portfolio shall receive 30 days prior
written notice of any change in the investment objective of the Portfolio.

INVESTMENT POLICIES

The Portfolio will normally invest at least 65% of its assets in fixed
income securities. The Portfolio may invest in the following securities, which
may be issued by domestic or foreign entities and denominated in U.S. dollars or
foreign currencies: securities issued, sponsored or guaranteed by the U.S.
government, its agencies or instrumentalities (U.S. Government securities);
corporate debt securities; corporate commercial paper; mortgage pass-throughs,
mortgage-backed bonds, collateralized mortgage obligations ("CMOs"), other
asset-backed securities; variable and floating rate debt securities; obligations
of foreign governments or their subdivisions, agencies and instrumentalities;
obligations of international agencies or supranational entities; and foreign
currency exchange-related securities.

The Sub-Adviser will seek to achieve the Portfolio's objective by
investing at least 80% of the Portfolio's assets in investment grade debt or
fixed income securities. Investment grade debt securities are those rated by one
or more nationally recognized statistical rating organizations ("NRSROs") within
one of the four highest quality grades at the time of purchase (E.G., AAA, AA, A
or BBB by Standard & Poor's Corporation ("S&P") or Fitch Investors Service, Inc.
("Fitch") or Aaa, Aa, A or Baa by Moody's Investors Service, Inc. ("Moody's")),
or in the case of unrated securities, determined by the Sub-Adviser to be of
comparable quality. Securities rated by a NRSRO in the fourth highest rating
category have speculative characteristics and are subject to greater credit and
market risks than higher-rated bonds. See the Appendix to this Part A for a
description of the ratings assigned by Moody's, S&P,

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and Fitch.

Up to 20% of the Portfolio's assets may be invested in preferred stock,
convertible securities, and in fixed income securities that at the time of
purchase are rated Ba or B by Moody's or BB or B by S&P or rated comparably by
another NRSRO (or, if unrated, are deemed by the Sub-Adviser to be of comparable
quality). Securities rated below "investment grade," I.E., rated below Baa by
Moody's or BBB by S&P, are described as "speculative" by both Moody's and S&P.
Such securities are sometimes referred to as "junk bonds," and may be subject to
greater market fluctuations, less liquidity and greater risk. For a complete
discussion of the special risks associated with investments in lower rated
securities, see "Additional Risk Factors and Policies: High Yield/High Risk
Securities."

From time to time, the Sub-Adviser may invest more than 50% of the
Portfolio's assets in mortgage-backed securities including mortgage pass-through
securities and CMOs, that carry a guarantee from a U.S. government agency or a
private issuer of the timely payment of principal and interest. For a
description of the risks associated with mortgage-backed securities, see
"Additional Risk Factors and Policies: Mortgage Related Securities." When
investing in mortgage-backed securities, it is expected that the Portfolio's
primary emphasis will be in mortgage-backed securities issued by governmental
and government-related organizations such as the Government National Mortgage
Association ("GNMA"), the Federal National Mortgage Association ("FNMA") and the
Federal Home Loan Mortgage Association ("FHLMC"). However, the Portfolio may
invest without limit in mortgage-backed securities of private issuers when the
Sub-Adviser determines that the quality of the investment, the quality of the
issuer, and market conditions warrant such investments. It is currently not
anticipated that greater than 25% of Portfolio assets will be invested in
mortgage pools comprised of private organizations. Mortgage-backed securities
issued by private issuers will be rated investment grade by Moody's or S&P or,
if unrated, deemed by the Sub-Adviser to be of comparable quality.

There are two methods of trading mortgage-backed securities. A specific
pool transaction is a trade in which the pool number of the security to be
delivered on the settlement date is known at the time the trade is made. This is
in contrast with the typical mortgage transaction, called a TBA (to be
announced) transaction, in which the type of mortgage securities to be delivered
is specified at the time of trade but the actual pool numbers of the securities
that will be delivered are not known at the time of the trade. For example, in a
TBA transaction an investor could purchase $1 million 30-year FNMA 9's and
receive up to three pools on the settlement date. The pool numbers of the pools
to be delivered at settlement will be announced shortly before settlement takes
place. The terms of the TBA trade may be made more specific

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if desired. For example, an investor may request pools with particular
characteristics, such as those that were issued prior to January 1, 1990. The
most detailed specification of the trade is to request that the pool number be
known prior to purchase. In this case the investor has entered into a specific
pool transaction. Generally, agency pass-through mortgage-backed securities are
traded on a TBA basis. The specific pool numbers of the securities purchased do
not have to be determined at the time of the trade.

A mortgage-backed bond is a collateralized debt security issued by a
thrift or financial institution. The bondholder has a first priority perfected
security interest in collateral consisting usually of agency mortgage
pass-through securities, although other assets including U.S. treasuries
(including zero coupon Treasury bonds), agencies, cash equivalent securities,
whole loans and corporate bonds may qualify. The amount of collateral must be
continuously maintained at levels from 115% to 150% of the principal amount of
the bonds issued, depending on the specific issue structure and collateral type.
For a complete discussion of mortgage-backed securities, see "Additional Risk
Factors and Policies: Mortgage-Backed Securities."

A portion of the Portfolio's portfolio may be invested in bonds and
other fixed income securities denominated in foreign currencies if, in the
opinion of the Sub-Adviser, the combination of current yield and currency value
offer attractive expected returns. These holdings may be in as few as one
foreign currency bond market (such as the United Kingdom gilt market), or be
spread across several foreign bond markets; however, the Portfolio does not
intend to invest in the securities of Eastern European countries. When the total
return opportunities in a foreign bond market appear attractive in local
currency terms, but where, in the Sub-Adviser's judgment, unacceptable currency
risk exists, currency futures, forwards and options and swaps may be used to
hedge the currency risk. See "Additional Risk Factors and Policies: Foreign
Securities."

The Portfolio may also invest in the following instruments on a
temporary basis when economic or market conditions are such that the Sub-Adviser
deems a temporary defensive position to be appropriate: time deposits,
certificates of deposit and bankers' acceptances issued by a commercial bank or
savings and loan association; obligations of U.S. banks, foreign branches of
U.S. banks (Eurodollars) and U.S. branches of foreign banks (Yankee dollars);
commercial paper rated at the time of purchase by one or more NRSROs in one of
the two highest categories or, if not rated, issued by a corporation having an
outstanding unsecured debt issue rated high-grade by a NRSRO; short-term
corporate obligations rated high-grade by a NRSRO; U.S. Government obligations;
Government agency securities issued or guaranteed by U.S. Government sponsored
instrumentalities and federal agencies; and repurchase agreements

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collateralized by the securities listed above. The Portfolio may also purchase
securities on a when-issued basis, lend its securities to brokers, dealers, and
other financial institutions to earn income and borrow money for temporary or
emergency purposes.

ADDITIONAL RISK FACTORS AND POLICIES

DERIVATIVES

The Portfolio may invest in various instruments that are commonly known
as derivatives. Generally, a derivative is a financial arrangement the value of
which is based on, or "derived" from, a traditional security, asset, or market
index. A mutual fund, of course, derives its value from the value of the
investments it holds and so might even be called a "derivative." Some
"derivatives" such as mortgage-related and other asset-backed securities are in
may respects like any other investment, although they may be more volatile or
less liquid than more traditional debt securities. There are, in fact, many
different types of derivatives and many different ways to use them. There are a
range of risks associated with those uses. Futures and options are commonly used
for traditional hedging purposes to attempt to protect a fund from exposure to
changing interest rates, securities prices, or currency exchange rates and for
cash management purposes as a low cost method of gaining exposure to a
particular securities market without investing directly in those securities.
However, some derivatives are used for leverage, which tends to magnify the
effects of an instrument's price changes as market conditions change. Leverage
involves the use of a small amount of money to control a large amount of
financial assets, and can in come circumstances, lead to significant losses. In
contrast, the Portfolio may use derivatives to enhance return when the Sub-
Adviser believes the investment will assist the Portfolio in achieving its
investment objective, and for hedging purposes. A description of the derivatives
that the Portfolio may use and some of their associated risks follows.

OPTIONS AND FUTURES TRANSACTIONS

The Portfolio may use financial futures contracts, options on futures
contracts and options (collectively, "futures and options"). In addition, the
Portfolio may invest in foreign currency futures contracts and options on
foreign currencies and foreign currency futures. Futures contracts provide for
the sale by one party and purchase by another party of a specified amount of a
specific security at a specified future time and price. An option is a legal
contract that gives the holder the right to buy or sell a specified amount of
the underlying security or futures contract at a fixed or determinable price
upon the exercise of the option. A call option conveys the right to buy and a
put option conveys the right to sell a specified quantity of the underlying
security.

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The Portfolio will not enter into futures contracts to the extent that
its outstanding obligations to purchase securities under these contracts in
combination with its outstanding obligations with respect to options
transactions would exceed 35% of its total assets. The Portfolio will use
financial futures contracts and related options only for "bona fide hedging"
purposes, as such term is defined in applicable regulations of the Commodity
Futures Trading Commission, or, with respect to positions in financial futures
and related options that do not qualify as "bona fide hedging" positions, will
enter such non-hedging positions only to the extent that assets committed to
initial margin deposits on such instruments, plus premiums paid for open futures
options positions, less the amount by which any such positions are
"in-the-money," do not exceed 5% of the Portfolio's net assets. The Portfolio
will segregate assets or "cover" its positions consistent with requirements
under the Investment Company Act of 1940, as amended ("1940 Act").

There are several risks associated with the use of futures and options
for hedging purposes. There can be no guarantee that there will be a correlation
between price movements in the hedging vehicle and in the portfolio securities
being hedged. An incorrect correlation could result in a loss on both the hedged
securities in the portfolio and the hedging vehicle so that the portfolio return
might have been greater had hedging not been attempted. There can be no
assurance that a liquid market will exist at a time when the Portfolio seeks to
close out a futures contract or a futures option position. Most futures
exchanges and boards of trade limit the amount of fluctuation permitted in
futures contract prices during a single day; once the daily limit has been
reached on a particular contract, no trades may be made that day at a price
beyond that limit. In addition, certain of these instruments are relatively new
and without a significant trading history. As a result, there is no assurance
that an active secondary market will develop or continue to exist. Lack of a
liquid market for any reason may prevent the Portfolio from liquidating an
unfavorable position and the Portfolio would remain obligated to meet margin
requirements until the position is closed.

FOREIGN SECURITIES

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expropriation or confiscatory taxation, other taxes imposed by the foreign
country on the Portfolio's earnings, assets, or transactions, limitation on the
removal of cash or other assets of the Portfolio, political or financial
instability, or diplomatic and other developments which could affect such
investments. Further, economies of particular countries or areas of the world
may differ favorably or unfavorably from the economy of the United States.
Changes in foreign exchange rates will affect the value of securities
denominated or quoted in currencies other than the U.S. dollar. Foreign
securities often trade with less frequency and volume than domestic securities
and therefore may exhibit greater price volatility. Additional costs associated
with an investment in foreign securities may include higher custodial fees than
apply to domestic custodial arrangements, and transaction costs of foreign
currency conversions.

FORWARD FOREIGN CURRENCY CONTRACTS AND OPTIONS ON FOREIGN
CURRENCIES

Forward foreign currency exchange contracts ("forward contracts") are
intended to minimize the risk of loss to the Portfolio from adverse changes in
the relationship between the U.S. dollar and foreign currencies. The Portfolio
may not enter into such contracts for speculative purposes. The Portfolio has no
specific limitation on the percentage of assets it may commit to forward
contracts, subject to its stated investment objective and policies, except that
the Portfolio will not enter into a forward contract if the amount of assets set
aside to cover the contract would impede portfolio management.

A forward contract is an obligation to purchase or sell a specific
currency for an agreed price at a future date which is individually negotiated
and privately traded by currency traders and their customers. A forward contract
may be used, for example, when the Portfolio enters into a contract for the
purchase or sale of a security denominated in a foreign currency in order to
"lock in" the U.S. dollar price of the security. The Portfolio may also purchase
and write put and call options on foreign currencies for the purpose of
protecting against declines in the dollar value of foreign portfolio securities
and against increases in the U.S. dollar cost of foreign securities to be
acquired.

The Portfolio may also combine forward contracts with investments in
securities denominated in other currencies in order to achieve desired credit
and currency exposures. Such combinations are generally referred to as synthetic
securities. For example, in lieu of purchasing a foreign bond, the Portfolio may
purchase a U.S. dollar-denominated security and at the same time enter into a
forward contract to exchange U.S. dollars for the contract's underlying currency
at a future date. By matching the amount of U.S. dollars to be exchanged with
the anticipated value of the U.S. dollar-denominated security, the Portfolio may
be able

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to lock in the foreign currency value of the security and adopt a
synthetic investment position reflecting the credit quality of the
U.S. dollar-denominated security.

There is a risk in adopting a synthetic investment position to the
extent that the value of a security denominated in U.S. dollars or other foreign
currency is not exactly matched with the Portfolio's obligation under the
forward contract. On the date of maturity the Portfolio may be exposed to some
risk of loss from fluctuations in that currency. Although the Sub-Adviser will
attempt to hold such mismatching to a minimum, there can be no assurance that
the Sub-Adviser will be able to do so. When the Portfolio enters into a forward
contract for purposes of creating a synthetic security, it will generally be
required to hold high-grade, liquid securities or cash in a segregated account
with a daily value at least equal to its obligation under the forward contract.

HIGH YIELD/HIGH RISK SECURITIES

Securities rated lower than Baa by Moody's or lower than BBB by S&P are
sometimes referred to as "high yield" or "junk" bonds. In addition, securities
rated Baa (Moody's) and BBB (S&P) are considered to have some speculative
characteristics.

Investing in high yield securities involves special risks in addition
to the risks associated with investments in higher rated debt securities. High
yield securities may be regarded as predominately speculative with respect to
the issuer's continuing ability to meet principal and interest payments.
Analysis of the creditworthiness of issuers of high yield securities may be more
complex than for issuers of higher quality debt securities, and the ability of
the Portfolio to achieve its investment objective may, to the extent of its
investments in high yield securities, be more dependent upon such
creditworthiness analysis than would be the case if the Portfolio were investing
in higher quality securities.

High yield securities may be more susceptible to real or perceived
adverse economic and competitive industry conditions than higher grade
securities. The prices of high yield securities have been found to be less
sensitive to interest rate changes than more highly rated investments, but more
sensitive to adverse economic downturns or individual corporate developments. A
projection of an economic downturn or of a period of rising interest rates, for
example, could cause a decline in high yield security prices because the advent
of a recession could lessen the ability of a highly leveraged company to make
principal and interest payments on its debt securities. If the issuer of high
yield securities defaults, the Portfolio may incur additional expenses to seek
recovery. In the case of high yield securities structured as zero coupon or
payment-in-kind securities, the market prices of such securities are affected to
a greater extent by interest rate

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changes and, therefore, tend to be more volatile than securities which pay
interest periodically and in cash.

The secondary markets on which high yield securities are traded may be
less liquid than the market for higher grade securities. Less liquidity in the
secondary trading markets could adversely affect and cause large fluctuations in
the daily net asset value of the Portfolio. Adverse publicity and investor
perceptions, whether or not based on fundamental analysis, may decrease the
values and liquidity of high yield securities, especially in a thinly traded
market.

The use of credit ratings as the sole method of evaluating high yield
securities can involve certain risks. For example, credit ratings evaluate the
safety of principal and interest payments, not the market value risk of high
yield securities. Also, credit rating agencies may fail to change credit ratings
in a timely fashion to reflect events since the security was last rated. The
Sub-Adviser does not rely solely on credit ratings when selecting securities for
the Portfolio, and develops its own independent analysis of issuer credit
quality. If a credit rating agency changes the rating of a portfolio security
held by the Portfolio, the Portfolio may retain the security if the Sub-Adviser
deems it in the best interest of the Portfolio's investors.

ZERO COUPON OBLIGATIONS

The Portfolio may invest in zero coupon obligations, which are
fixed-income securities that do not make regular interest payments. Instead,
zero coupon obligations are sold at substantial discounts from their face value.
The difference between a zero coupon obligation's issue or purchase price and
its face value represents the imputed interest an investor will earn if the
obligation is held until maturity. Zero coupon obligations may offer investors
the opportunity to earn higher yields that those available on ordinary
interest-paying obligations of similar credit quality and maturity. However,
zero coupon obligation prices may also exhibit greater price volatility than
ordinary fixed-income securities because of the manner in which their principal
and interest are returned to the investor.

MORTGAGE-RELATED SECURITIES

MORTGAGE-BACKED SECURITIES. The Portfolio may invest in mortgage-backed
certificates and other securities representing ownership interests in mortgage
pools, including CMOs. Interest and principal payments on the mortgages
underlying mortgage-backed securities are passed through to the holders of the
mortgage-backed securities. Mortgage-backed securities currently offer yields
higher than those available from many other types of fixed-income securities,
but because of their prepayment aspects, their price volatility and yield
characteristics will change based on changes

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in prepayment rates. Generally, prepayment rates increase if interest rates fall
and decrease if interest rates rise. For many types of mortgage-backed
securities, this can result in unfavorable changes in price and yield
characteristics in response to changes in interest rates and other market
conditions. For example, as a result of their prepayment aspects, the
Portfolio's mortgage-backed securities may have less potential for capital
appreciation during periods of declining interest rates than other fixed income
securities of comparable maturities, although such obligations may have a
comparable risk of decline in market value during periods of rising interest
rates.

Mortgage-backed securities have yield and maturity characteristics that
are dependent on the mortgages underlying them. Thus, unlike traditional debt
securities, which may pay a fixed rate of interest until maturity when the
entire principal amount comes due, payments on these securities include both
interest and a partial payment of principal. In addition to scheduled loan
amortization, payments of principal may result from the voluntary prepayment,
refinancing or foreclosure of the underlying mortgage loans. Such prepayments
may significantly shorten the effective durations of mortgage-backed securities,
especially during periods of declining interest rates. Similarly, during periods
of rising interest rates, a reduction in the rate of prepayments may
significantly lengthen the effective durations of such securities.

Investment in mortgage-backed securities poses several risks, including
prepayment, market, and credit risk. Prepayment risk reflects the risk that
borrowers may prepay their mortgages faster than expected, thereby affecting the
investment's average life and perhaps its yield. Whether or not a mortgage loan
is prepaid is almost entirely controlled by the borrower. Borrowers are most
likely to exercise prepayment options at the time when it is least advantageous
to investors, generally prepaying mortgages as interest rates fall, and slowing
payments as interest rates rise. Besides the effect of prevailing interest
rates, the rate of prepayment and refinancing of mortgages may also be affected
by home value appreciation, ease of the refinancing process and local economic
conditions.

Market risk reflects the risk that the price of the security may
fluctuate over time. The price of mortgage-backed securities may be particularly
sensitive to prevailing interest rates, the length of time the security is
expected to be outstanding, and the liquidity of the issue. In a period of
unstable interest rates, there may be decreased demand for certain types of
mortgage-backed securities, and a Portfolio invested in such securities wishing
to sell them may find it difficult to find a buyer, which may in turn decrease
the price at which they may be sold.

Credit risk reflects the risk that the Portfolio may not

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receive all or part of its principal because the issuer or credit enhancer has
defaulted on its obligations. Obligations issued by U.S. government-related
entities are guaranteed as to the payment of principal and interest, but are not
backed by the full faith and credit of the U.S. government. The performance of
private label mortgage-backed securities, issued by private institutions, is
based on the financial health of those institutions.

For further information, see Part B.

STRIPPED MORTGAGE-BACKED SECURITIES. The Portfolio may invest in
Stripped Mortgage-Backed Securities ("SMBS") which are derivative multi-class
mortgage securities. SMBS may be issued by agencies or instrumentalities of the
U.S. Government and private originators of, or investors in, mortgage loans,
including savings and loan associations, mortgage banks, commercial banks,
investment banks and special purpose entities of the foregoing. The Portfolio's
investments in SMBS will be limited to 10% of net assets.

SMBS are usually structured with two classes that receive different
proportions of the interest and principal distributions on a pool of mortgage
assets. One type of SMBS will have one class receiving some of the interest and
most of the principal from the mortgage assets, while the other class will
receive most of the interest and the remainder of the principal. In some cases,
one class will receive all of the interest (the interest-only or IO class),
while the other class will receive all of the principal (the principal-only or
PO class). The yield to maturity on an IO class extremely sensitive to the rate
of principal payments (including prepayments) on the related underlying mortgage
assets, and a rapid rate of principal payments may have a material adverse
effect on yield to maturity. If the underlying mortgage assets experience
greater than anticipated prepayments of principal, the Portfolio may fail to
fully recoup its initial investment in these securities, even if the security is
in one of the highest rating categories.

Although SMBS are purchased and sold by institutional investors through
several investment banking firms acting as brokers or dealers, these securities
were only recently developed. As a result, established trading markets have not
yet developed and, accordingly, certain of these securities may be deemed
illiquid and subject to the Portfolio's limitations on investment in illiquid
securities. For further information on these securities, see Part B.

OTHER ASSET-BACKED SECURITIES. The Portfolio may invest in
securities representing interests in other types of financial
assets, such as automobile-finance receivables or credit-card
receivables. Such securities are subject to many of the same risks
as are mortgage-backed securities, including prepayment risks and

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risks of foreclosure. They may or may not be secured by the
receivables themselves or may be unsecured obligations of their
issuers. For further information on these securities, see Part B.

REPURCHASE AGREEMENTS

The Portfolio may invest in repurchase agreements collateralized by
U.S. Government securities, certificates of deposit and certain bankers'
acceptances. Repurchase agreements are transactions by which the Portfolio
purchases a security and simultaneously commits to resell that security to the
seller (a bank or securities dealer) at an agreed upon price on an agreed upon
date (usually within seven days of purchase). The resale price reflects the
purchase price plus an agreed upon market rate of interest which is unrelated to
the coupon rate or date of maturity of the purchased security. The Sub-Adviser
will continually monitor the value of the underlying securities to ensure that
their value, including accrued interest, always equals or exceeds the repurchase
price. Repurchase agreements are considered to be loans collateralized by the
underlying security under the 1940 Act, and therefore will be fully
collateralized.

The use of repurchase agreements involves certain risks. For example,
if the seller of an agreement defaults on its obligation to repurchase the
underlying securities at a time when the value of these securities has declined,
the Portfolio may incur a loss upon disposition of those securities. If the
seller of the agreement becomes insolvent and subject to liquidation or
reorganization under the Bankruptcy Code or other laws, a bankruptcy court may
determine that the underlying securities are collateral not within the control
of the Portfolio and therefore subject to sale by the trustee in bankruptcy.
Finally, it is possible that the Portfolio may not be able to substantiate its
interest in the underlying securities. While the Portfolio Trust's management
acknowledges these risks, it is expected that they can be controlled through
stringent security selection criteria and careful monitoring procedures.

ILLIQUID INVESTMENTS

The Portfolio may invest up to 15% of its net assets in securities that
are illiquid by virtue of the absence of a readily available market, or because
of legal or contractual restrictions on resale. This policy does not limit the
acquisition of securities (i) eligible for resale to qualified institutional
buyers pursuant to Rule 144A under the Securities Act of 1933 or (ii) commercial
paper issued pursuant to Section 4(2) under the Securities Act of 1933 that are
determined to be liquid in accordance with guidelines established by the
Portfolio Trust's Board of Trustees. There may be delays in selling these
securities and sales may be made at less favorable prices.

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Factors that the Portfolio must consider in determining whether a
particular Rule 144A security is liquid include the frequency of trades and
quotes for the security, the number of dealers willing to purchase or sell the
security and the number of other potential purchasers, dealer undertakings to
make a market in the security, and the nature of the security and the nature of
the market for the security (I.E., the time needed to dispose of the security,
the method of soliciting offers and the mechanics of transfer). Investing in
Rule 144A securities could have the effect of increasing the level of the
Portfolio's illiquidity to the extent that qualified institutions might become,
for a time, uninterested in purchasing these securities.

The Portfolio has a separate policy that no more than 10% of its assets
may be invested in securities which are restricted as to re-sale, including Rule
144A and Section 4(2) securities.

BRADY BONDS

A portion of the Portfolio's portfolio may be invested in certain debt
obligations customarily referred to as Brady Bonds, which are created through
the exchange of existing commercial bank loans to foreign entities for new
obligations in connection with debt restructuring under a plan introduced by
former Treasury Secretary Nicholas F. Brady (the "Brady Plan"). Brady Bonds have
been issued only recently and, accordingly, do not have a long payment history.
They may be collateralized or uncollateralized and issued in various currencies
(although most are dollar-denominated) and are actively traded in the
over-the-counter secondary market. For further information on these securities,
see Part B.

FLOATING AND VARIABLE RATE OBLIGATIONS

Certain obligations that the Portfolio may purchase may have a floating
or variable rate of interest, I.E., the rate of interest varies with changes in
specified market rates or indices, such as the prime rates, and at specified
intervals. Certain floating or variable rate obligations that may be purchased
by the Portfolio may carry a demand feature that would permit the holder to
tender them back to the issuer of the underlying instrument, or to a third
party, at par value prior to maturity. The demand features of certain floating
or variable rate obligations may permit the holder to tender the obligations to
foreign banks, in which case the ability to receive payment under the demand
feature will be subject to certain risks, as described under "Foreign
Securities," above.

INVERSE FLOATING RATE OBLIGATIONS

The Portfolio may invest in inverse floating rate obligations ("inverse
floaters"). Inverse floaters have coupon rates that vary inversely at a multiple
of a designated floating rate, such as

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LIBOR (London Inter-Bank Offered Rate). Any rise in the reference rate of an
inverse floater (as a consequence of an increase in interest rates) causes a
drop in the coupon rate while any drop in the reference rate of an inverse
floater causes an increase in the coupon rate. In addition, like most other
fixed-income securities, the value of inverse floaters will generally decrease
as interest rates increase. Inverse floaters may exhibit substantially greater
price volatility than fixed rate obligations having similar credit quality,
redemption provisions and maturity, and inverse floater CMOs exhibit greater
price volatility than the majority of mortgage pass-through securities or CMOs.
In addition, some inverse floater CMOs exhibit extreme sensitivity to changes in
prepayments. As a result, the yield to maturity of an inverse floater CMO is
sensitive not only to changes in interest rates, but also to changes in
prepayment rates on the related underlying mortgage assets.

BANKING INDUSTRY AND SAVINGS AND LOAN INDUSTRY OBLIGATIONS

As a temporary defensive measure, the Portfolio may invest in
certificates of deposit, time deposits, bankers' acceptances, and other
short-term debt obligations issued by commercial banks and savings and loan
associations ("S&Ls"). Certificates of deposit are receipts from a bank or S&L
for funds deposited for a specified period of time at a specified rate of
return. Time deposits in banks or S&Ls are generally similar to certificates of
deposit but are uncertificated. Bankers' acceptances are time drafts drawn on
commercial banks by borrowers, usually in connection with international
commercial transactions. The Portfolio may not invest in time deposits maturing
in more than seven days. The Portfolio will limit its investment in time
deposits maturing from two business days through seven calendar days to 15% of
its total assets.

The Portfolio will not invest in any obligation of a commercial bank
unless (i) the bank has total assets of at least $1 billion, or the equivalent
in other currencies or, in the case of domestic banks which do not have total
assets of at least $1 billion, the aggregate investment made in any one such
bank is limited to $100,000 and the principal amount of such investment is
insured in full by the Federal Deposit Insurance Corporation (the "FDIC"), (ii)
in the case of U.S. banks, it is a member of the FDIC and (iii) in the case of
foreign branches of U.S. banks, the security is deemed by the Sub-Adviser to be
of an investment quality comparable with other debt securities which may be
purchased by the Portfolio.

The Portfolio may also invest in obligations of U.S. banks,
foreign branches of U.S. banks (Eurodollars) and U.S. branches of
foreign banks (Yankee dollars) as a temporary defensive measure.
Euro and Yankee dollar investments will involve some of the same
risks as investing in foreign securities, as described above and in

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Part B.

LOANS OF PORTFOLIO SECURITIES

The Portfolio may lend its securities to qualified brokers, dealers,
banks and other financial institutions for the purpose of realizing additional
income. Loans of securities will be collateralized by cash, letters of credit,
or securities issued or guaranteed by the U.S. Government or its agencies. The
collateral will equal at least 100% of the current market value of the loaned
securities. In addition, the Portfolio will not loan its portfolio securities to
the extent that greater than one-third of its total assets, at fair market
value, would be committed to loans at that time.

FIRM COMMITMENT AGREEMENTS AND WHEN-ISSUED SECURITIES

The Portfolio may purchase and sell securities on a when- issued or
firm-commitment basis, in which a security's price and yield are fixed on the
date of the commitment but payment and delivery are scheduled for a future date.
On the settlement date, the market value of the security may be higher or lower
than its purchase or sale price under the agreement. If the other party to a
when-issued or firm-commitment transaction fails to deliver or pay for the
security, the Portfolio could miss a favorable price or yield opportunity or
suffer a loss. The Portfolio will not earn interest on securities until the
settlement date. The Portfolio will maintain in a segregated account with the
custodian cash or liquid, high grade debt securities equal (on a daily
marked-to- market basis) to the amount of its commitment to purchase the
securities on a when-issued basis.

SWAPS, CAPS, FLOORS AND COLLARS

The Portfolio may enter into swap contracts and other similar
instruments in accordance with its policies. A swap is an agreement to exchange
the return generated by one instrument for the return generated by another
instrument. The payment streams are calculated by reference to a specified index
and agreed upon notional amount. The term specified index includes currencies,
fixed interest rates, prices and total return on interest rate indices,
fixed-income indices, stock indices and commodity indices (as well as amounts
derived from arithmetic operations on these indices). For example, the Portfolio
may agree to swap the return generated by a fixed-income index for the return
generated by a second fixed-income index. The currency swaps in which the
Portfolio may enter will generally involve an agreement to pay interest streams
calculated by reference to interest income linked to a specified index in one
currency in exchange for a specified index in another currency. Such swaps may
involve initial and final exchanges that correspond to the agreed upon notional
amount.

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The swaps in which the Portfolio may engage also include rate caps,
floors and collars under which one party pays a single or periodic fixed
amount(s) (or premium) and the other party pays periodic amounts based on the
movement of a specified index.

The Portfolio will usually enter into swaps on a net basis, I.E., the
two return streams are netted out in a cash settlement on the payment date or
dates specified in the instrument, with the Portfolio receiving or paying, as
the case may be, only the net amount of the two returns. The Portfolio's
obligations under a swap agreement will be accrued daily (offset against any
amounts owing to the Portfolio) and any accrued but unpaid net amounts owed to a
swap counterparty will be covered by the maintenance of a segregated account
consisting of cash, U.S. Government securities, or high grade debt obligations,
to avoid any potential leveraging. The Portfolio will not enter into any swap
agreement unless the unsecured commercial paper, senior debt or the
claims-paying ability of the counterparty is rated AA or A-1 or better by S&P or
Aa or P-1 or better by Moody's, rated comparably by another NRSRO or determined
by the Sub-Adviser to be of comparable quality.

Interest rate swaps do not involve the delivery of securities, other
underlying assets or principal. Accordingly, the risk of loss with respect to
interest rate swaps is limited to the net amount of interest payments that the
Portfolio is contractually obligated to make. If the other party to an interest
rate swap defaults, the Portfolio's risk of loss consists of the net amount of
interest payments that the Portfolio is contractually entitled to receive. In
contrast, currency swaps usually involve the delivery of the entire principal
value of one designated currency in exchange for the other designated currency.
Therefore, the entire principal value of a currency swap is subject to the risk
that the other party to the swap will default on its contractual delivery
obligations. If there is a default by the counterparty, the Portfolio may have
contractual remedies pursuant to the agreements related to the transaction. The
swap market has grown substantially in recent years with a large number of banks
and investment banking firms acting both as principals and as agents utilizing
standardized swap documentation. As a result, the swap market has become
relatively liquid. Caps, floors and collars are more recent innovations for
which standardized documentation has not yet been fully developed and,
accordingly, they are less liquid than swaps.

The use of swaps is a highly specialized activity which involves
investment techniques and risks different from those associated with ordinary
portfolio securities transactions. If the Sub-Adviser is incorrect in its
forecasts of market values, interest rates and currency exchange rates, the
investment performance of the Portfolio would be less favorable than it would
have been if this investment technique were not used.

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PORTFOLIO TURNOVER

The Sub-Adviser manages the Portfolio generally without regard to
restrictions on portfolio turnover, except those imposed by provisions of the
federal tax laws regarding short-term trading. In general, the Portfolio will
not trade for short-term profits, but when circumstances warrant, investments
may be sold without regard to the length of time held. The Portfolio's annual
turnover rate may exceed 100% due to changes in portfolio duration, yield curve
strategy or commitments to forward delivery mortgage-backed securities. However,
it is expected that the annual turnover rate for the Portfolio will not exceed
250%. For the period from January 9, 1995 (commencement of operations) to
October 31, 1995, the portfolio turnover rate was 100%.

INVESTMENT RESTRICTIONS

The Portfolio has adopted certain investment restrictions designed to
reduce exposure to specific situations. Some of these investment restrictions
are:

(1) with respect to 75% of its assets, the Portfolio will not purchase
securities of any issuer if, as a result, more than 5% of the Portfolio's total
assets taken at market value would be invested in the securities of any single
issuer, except that this restriction does not apply to securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities;

(2) with respect to 75% of its assets, the Portfolio will not purchase
a security if, as a result, the Portfolio would hold more than 10% of the
outstanding voting securities of any issuer;

(3) the Portfolio will not invest more than 5% of its total assets in
the securities of issuers (other than securities issued or guaranteed by U.S. or
foreign governments or political subdivisions thereof) which have (with
predecessors) a record of less than three years of continuous operation;

(4) the Portfolio will not acquire any securities of companies within
one industry, except for mortgage-backed securities, if, as a result of such
acquisition, more than 25% of the value of the Portfolio's total assets would be
invested in securities of companies within such industry; provided, however,
that there shall be no limitation on the purchase of obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities, or
instruments issued by U.S. banks when the Portfolio adopts a temporary defensive
position;

(5) the Portfolio will not make loans except (i) by purchasing debt
securities in accordance with its investment objective and policies, or entering
into repurchase agreements and (ii) by lending its portfolio securities;

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(6) borrow money or mortgage or hypothecate assets of the Portfolio,
except that in an amount not to exceed 1/3 of the current value of the
Portfolio's net assets, it may borrow money (including through reverse
repurchase agreements, forward roll transactions involving mortgage-backed
securities or other investment techniques entered into for the purpose of
leverage), and except that it may pledge, mortgage or hypothecate not more than
1/3 of such assets to secure such borrowings, provided that collateral
arrangements with respect to options and futures, including deposits of initial
deposit and variation margin, are not considered a pledge of assets for purposes
of this restriction and except that assets may be pledged to secure letters of
credit solely for the purpose of participating in a captive insurance company
sponsored by the Investment Company Institute; for additional related
restrictions, see clause (i) under the caption "State and Federal Restrictions"
below;

(7) the Portfolio will not pledge, mortgage, or hypothecate any of its
assets to an extent greater than 33 1/3% of its total assets at fair market
value; and

(8) the Portfolio will not invest its assets in securities of any
investment company, except by purchase in the open market involving only
customary brokers' commissions or in connection with mergers, acquisitions of
assets or consolidations and except as may otherwise be permitted by the 1940
Act; provided, however, that the Portfolio shall not invest in the shares of any
open-end investment company unless (1) the Portfolio's Adviser waives any
investment advisory fees with respect to such assets and (2) the Portfolio pays
no sales charge in connection with the investment.

Limitations (1), (2), (4) and (5) and certain other limitations described in
Part B are fundamental and may be changed only with the approval of the holders
of a "majority of the outstanding voting securities" (as defined in the 1940
Act) of the Portfolio. The other investment restrictions described here and in
Part B are not fundamental policies meaning that the Board of Trustees of the
Portfolio Trust may change them without investor approval. If a percentage
limitation on investment or utilization of assets as set forth above is adhered
to at the time an investment is made, a later change in percentage resulting
from changes in the value or total cost of the Portfolio's assets will not be
considered a violation of the restriction, and the sale of securities will not
be required.

ITEM 5. MANAGEMENT OF THE PORTFOLIO TRUST.

The business and affairs of the Portfolio Trust are managed
under the direction of its Board of Trustees. The Trustees of the
Portfolio Trust are Frederick C. Chen, Alan S. Parsow, Larry M.
Robbins and Michael Seely. Additional information about the
Trustees, as well as the executive officers of the Portfolio Trust,

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may be found in Part B under the caption "Management of the Portfolio Trust --
Trustees and Officers".

A majority of the disinterested Trustees have adopted written
procedures reasonably appropriate to deal with potential conflicts of interest
arising from the fact that the same individuals are Trustees of Republic Funds
and of the Portfolio Trust, up to and including creating a separate Board of
Trustees. See "Management of the Portfolio Trust" in Part B for more information
about the Trustees and the executive officers of the Portfolio Trust.

INVESTMENT MANAGER

Republic whose address is 452 Fifth Avenue, New York, New York 10018,
serves as investment manager to the Portfolio pursuant to an Investment
Management Contract with the Portfolio Trust. The Manager is not paid a fee by
the Portfolio for its services.

Republic is a wholly owned subsidiary of Republic New York Corporation,
a registered bank holding company. As of December 31, 1994, Republic was the
18th largest commercial bank in the United States measured by deposits and the
17th largest commercial bank measured by shareholder equity.

Republic and its affiliates may have deposit, loan and other commercial
banking relationships with the issuers of obligations purchased for the
Portfolio, including outstanding loans to such issuers which may be repaid in
whole or in part with the proceeds of obligations so purchased.

Based upon the advice of counsel, Republic believes that the
performance of investment advisory and other services for the Portfolio will not
violate the Glass-Steagall Act or other applicable banking laws or regulations.
However, future statutory or regulatory changes, as well as future judicial or
administrative decisions and interpretations of present and future statutes and
regulations, could prevent Republic from continuing to perform such services for
the Portfolio. If Republic were prohibited from acting as investment manager to
the Portfolio, it is expected that the Board of Trustees would recommend to
Portfolio investors approval of a new investment advisory agreement with another
qualified investment adviser selected by the Board of Trustees or that the Board
of Trustees would recommend other appropriate action.

SUB-ADVISER

MAS continuously manages the investment portfolio of the Portfolio
pursuant to a Sub-Advisory Agreement with the Manager. For its services, the
Sub-Adviser is paid a fee by the Portfolio, computed daily and based on the
Portfolio's average daily net

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assets, equal to 0.375% of net assets up to $50 million, 0.25% of net assets
over $50 million up to $95 million, $300,000 of net assets over $95 million up
to $150 million, 0.20% of net assets over $150 million up to $250 million, and
0.15% of net assets over $250 million. It is the responsibility of the
Sub-Adviser not only to make investment decisions for the Portfolio, but also to
place purchase and sale orders for the portfolio transactions of the Portfolio.
See "Portfolio Transactions."

MAS, whose address is One Tower Bridge, West Conshohocken, Pennsylvania
19428, is a Pennsylvania limited partnership founded in 1969. MAS provides
investment services to employee benefit plans, endowment funds, foundations and
other institutional investors. As of September 30, 1995, MAS had in excess of
$34.4 billion in assets under management.

On January 3, 1996, Morgan Stanley Group Inc. acquired MAS in
a transaction in which Morgan Stanley Asset Management Holdings
Inc., an indirect wholly owned subsidiary of Morgan Stanley Group
Inc., became the sole general partner of MAS. Morgan Stanley Asset
Management Holdings Inc. and two other wholly owned subsidiaries of
Morgan Stanley Group Inc. became the limited partners of MAS.
Morgan Stanley Group Inc. and various of its directly or indirectly
owned subsidiaries are engaged in a wide range of financial
services.

Kenneth B. Dunn, whose business experience for the past five years is
provided below, is the individual portfolio manager responsible for management
of the Portfolio.

Partner, MAS, since prior to 1991. Portfolio Manager, MAS
Fixed Income and MAS Domestic Fixed Income Portfolios, since
1987; MAS Fixed Income II Portfolios, since 1990; MAS
Mortgage-Backed Securities and Special Purpose Fixed Income
Portfolios, since 1992; and, MAS Municipal and PA Municipal
Portfolios, since 1994.

To the extent consistent with applicable legal requirements, the
Sub-Adviser may place orders for the purchase and sale of portfolio investments
for the Portfolio with Republic New York Securities Corporation ("Securities
Corporation"), subject to obtaining best price and execution for a particular
transaction.
See Part B.

PLACEMENT AGENT

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acting as agent for the Portfolio, serves as the placement agent of interests in
the Portfolio. Signature (Cayman) receives no compensation for serving as
placement agent.

ADMINISTRATOR

Pursuant to an Administrative Services Agreement, Signature (Cayman),
whose address is P.O. Box 2494, Elizabethan Square, 2nd Floor, George Town,
Grand Cayman, Cayman Islands, B.W.I. provides the Portfolio with general office
facilities; and supervises the overall administration of the Portfolio
including, among other responsibilities, the preparation and filing of all
documents required for compliance by the Portfolio with applicable laws and
regulations and arranging for the maintenance of books and records of the
Portfolio. For its services to the Portfolio, Signature (Cayman) receives from
the Portfolio fees payable monthly equal on an annual basis (for the Portfolio's
then-current fiscal year) to 0.05% of the Portfolio's average daily net assets
up to $100 million.

Signature (Cayman) provides persons satisfactory to the Board of
Trustees to serve as officers of the Portfolio Trust. Such officers, as well as
certain other employees of the Portfolio Trust, may be directors, officers or
employees of Signature (Cayman) or its affiliates.

Signature (Cayman) and its affiliates also serve as administrator of
other investment companies. Signature (Cayman) is a wholly-owned subsidiary of
Signature Financial Group, Inc. The address of Signature is 1 First Canadian
Place, Suite 2800, P.O. Box 231, Toronto, Ontario M5X 1C8.

FUND ACCOUNTING AGENT

Pursuant to a fund accounting agreement, Signature Financial Services,
Inc. ("Signature") serves as fund accounting agent to the Portfolio. For its
services to the Portfolio, Signature receives fees payable monthly equal on an
annual basis to $40,000.

TRANSFER AGENT AND CUSTODIAN

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other required books and accounts, and calculating the daily net asset value of
the Portfolio. Securities held for the Portfolio may be deposited into the
Federal Reserve-Treasury Department Book Entry System or the Depositary Trust
Company. The Custodian does not determine the investment policies of the
Portfolio or decide which securities will be purchased or sold for the
Portfolio. Assets of the Portfolio may, however, be invested in securities of
the Custodian and the Portfolio Trust may deal with the Custodian as principal
in securities transactions for the Portfolio. For its services, IBT receives
such compensation as may from time to time be agreed upon by it and the
Portfolio Trust.

ITEM 6. CAPITAL STOCK AND OTHER SECURITIES.

The Portfolio Trust is organized as a series trust under the law of the
State of New York. The Portfolio is a separate series of the Portfolio Trust,
which currently has one other series. Investments in a Portfolio may not be
transferred, but an investor may withdraw all or any portion of its investment
at any time at net asset value. The Portfolio Trust's Declaration of Trust
provides that investors in the Portfolio (E.G., investment companies, insurance
company separate accounts and common and commingled trust funds) are each liable
for all obligations of the Portfolio. However, the risk of an investor in the
Portfolio incurring financial loss on account of such liability is limited to
circumstances in which both inadequate insurance existed and the Portfolio
itself was unable to meet its obligations.

Each investor in the Portfolio is entitled to a vote in proportion to
the amount of its investment in the Portfolio. Investors in the Portfolio will
vote as a separate class, except as to voting of Trustees, as otherwise required
by the 1940 Act, or if determined by the Trustees to be a matter which affects
all series. As to any matter which does not affect a series other than the
Portfolio, only investors in that series are entitled to vote. Investments in
the Portfolio have no preemptive or conversion rights and are fully paid and
nonassessable, except as set forth below. The Portfolio is not required and has
no current intention of holding annual meetings of investors, but the Portfolio
will hold special meetings of investors when in the judgment of the Trustees it
is necessary or desirable to submit matters for an investor vote. Changes in
fundamental policies will be submitted to investors for approval. Investors have
under certain circumstances (E.G., upon application and submission of certain
specified documents to the Trustees by a specified percentage of the outstanding
interests in the Portfolio) the right to communicate with other investors in
connection with requesting a meeting of investors for the purpose of removing
one or more Trustees. Investors also have the right to remove one or more
Trustees without a meeting by a declaration in writing by a specified percentage
of the outstanding interests in the Portfolio. Upon liquidation of the
Portfolio, investors would be entitled to

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share pro rata in the net assets of the Portfolio available for
distribution to investors.

The value of the Portfolio's assets is determined on the basis of such
assets' market or other fair value. See "Purchase, Redemption and Pricing of
Securities Being Offered" in Part B.

The net income and realized capital gains and losses, if any, of the
Portfolio are determined at 4:00 p.m. New York time on each business day. Net
income for days other than business days is determined as of 4:00 p.m. New York
time on the immediately preceding business day. All the net income, as defined
below, and capital gains and losses, if any, so determined are allocated pro
rata among the investors in the Portfolio at the time of such determination. For
this purpose, the net income of the Portfolio (from the time of the immediately
preceding determination thereof) consists of (i) accrued interest, accretion of
discount and amortization of premium on securities held by the Portfolio, less
(ii) all actual and accrued expenses of the Portfolio (including the fees
payable to the Investment Adviser and Administrator of the Portfolio).

The end of the Portfolio's fiscal year is October 31.

Under the anticipated method of operation of the Portfolio, the
Portfolio will not be subject to any income tax. However, each investor in the
Portfolio will be taxable on its share (as determined in accordance with the
governing instruments of the Portfolio) of the Portfolio's ordinary income and
capital gain in determining its income tax liability. The determination of such
share will be made in accordance with the Internal Revenue Code of 1986, as
amended (the "Code"), and regulations promulgated thereunder.

It is intended that the Portfolio's assets, income and distributions
will be managed in such a way that an investor in the Portfolio will be able to
satisfy the requirements of Subchapter M of the Code, assuming that the investor
invested all of its assets in the Portfolio. See Item 20 in Part B.

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Investor inquiries may be directed to Signature (Cayman), P.O.
Box 2494, Elizabethan Square, 2nd Floor, George Town, Grand Cayman,
Cayman Islands, B.W.I. ((809) 945-1824).

ITEM 7. PURCHASE OF SECURITIES BEING OFFERED.

Beneficial interests in the Portfolio are issued solely in
private placement transactions that do not involve any "public
offering" within the meaning of Section 4(2) of the 1933 Act. See
Item 4 above.

An investment in the Portfolio may be made without a sales load. All
investments are made at net asset value next determined after an order is
received in "good order" by the Portfolio. The net asset value of the Portfolio
is determined once on each business day.

There is no minimum initial or subsequent investment in the Portfolio.
However, because the Portfolio intends to be as fully invested at all times as
is reasonably practicable in order to enhance the yield on its assets,
investments must be made in federal funds (I.E., monies credited to the account
of the Custodian by a Federal Reserve Bank).

The Portfolio and Signature (Cayman) reserve the right to cease
accepting investments at any time or to reject any investment order.

Each investor in the Portfolio, may add to or reduce its investment in
the Portfolio on each Portfolio Business Day. At 4:00 p.m., New York time on
each Portfolio Business Day, the value of each investor's beneficial interest in
the Portfolio is determined by multiplying the net asset value of the Portfolio
by the percentage, effective for that day, which represents that investor's
share of the aggregate beneficial interests in the Portfolio. Any additions or
withdrawals, which are to be effected on that day, are then effected. The
investor's percentage of the aggregate beneficial interests in the Portfolio is
then recomputed as the percentage equal to the fraction (i) the numerator of
which is the value of such investor's investment in the Portfolio as of 4:00
p.m., New York time on such day plus or minus, as the case may be, the amount of
any additions to or withdrawals from the investor's investment in the Portfolio
effected on such day, and (ii) the denominator of which is the aggregate net
asset value of the Portfolio as of 4:00 p.m., New York time on such day plus or
minus, as the case may be, the amount of the net additions to or withdrawals
from the aggregate investments in the Portfolio by all investors in the
Portfolio. The percentage so determined is then applied to determine the value
of the investor's interest in the Portfolio as of 4:00 p.m., New York time on
the following Portfolio Business Day.

ITEM 8. REDEMPTION OR REPURCHASE.

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An investor in each Portfolio may withdraw all or any portion of its
investment at the net asset value next determined if a withdrawal request in
proper form is furnished by the investor to the Portfolio Trust by the
designated cutoff time for each accredited investor. The proceeds of a reduction
or withdrawal will be paid by the Portfolio Trust in federal funds normally on
the Portfolio Business Day the withdrawal is effected, but in any event within
seven days. The Portfolio Trust, on behalf of each Portfolio, reserves the right
to pay redemptions in kind. Investments in the Portfolio may not be transferred.

The right of any investor to receive payment with respect to any
withdrawal may be suspended or the payment of the withdrawal proceeds postponed
during any period in which the New York Stock Exchange ("NYSE") is closed (other
than weekends or holidays) or trading on the NYSE is restricted or, to the
extent otherwise permitted by the 1940 Act, if an emergency exists.

ITEM 9. PENDING LEGAL PROCEEDINGS.

Not applicable.

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APPENDIX

The characteristics of corporate debt obligations rated by Moody's are
generally as follows:

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

AA -- Bonds which 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
which make the long-term risks appear somewhat larger than in Aaa securities.

A -- Bonds which 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 sometime in the
future.

BAA -- Bonds which 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.

BA -- Bonds which are rated Ba are judged to have speculative elements.
The future of such bonds cannot be considered as well assured.

B -- Bonds which are rated B generally lack characteristics of a
desirable investment.

CAA -- Bonds rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.

CA -- Bonds rated Ca are speculative to a high degree.

C -- Bonds rated C are the lowest rated class of bonds and are regarded
as having extremely poor prospects.

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The characteristics of corporate debt obligations rated by S&P are
generally as follows:

AAA -- This is the highest rating assigned by S&P to a debt obligation
and indicates an extremely strong capacity to pay principal and interest.

AA -- Bonds rated AA also qualify as high quality debt obligations.
Capacity to pay principal and interest is very strong, and in the majority of
instances they differ from AAA issues only in small degree.

A -- Debt rated A has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in higher rated
categories.

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

BB -- Debt rated BB is predominantly speculative with respect to
capacity to pay interest and repay principal in accordance with terms of the
obligation. BB indicates the lowest degree of speculation; CC indicates the
highest degree of speculation.

BB, B, CCC AND CC -- Debt in these ratings is predominantly speculative
with respect to capacity to pay interest and repay principal in accordance with
terms of the obligation. BB indicates the lowest degree of speculation and CC
the highest.

A bond rating is not a recommendation to purchase, sell or hold a
security, inasmuch as it does not comment as to market price or suitability for
a particular investor.

The ratings are based on current information furnished by the issuer or
obtained by the rating services from other sources which they consider reliable.
The ratings may be changed, suspended or withdrawn as a result of changes in or
unavailability of, such information, or for other reasons.

The characteristics of corporate debt obligations rated by Fitch are
generally as follows:

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

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principal is very strong, although not quite as strong as bonds rated AAA.
Because bonds rated in the AAA and AA categories are not significantly
vulnerable to foreseeable future developments, short term debt of these issuers
is generally rated "- +".

A -- Bonds considered to be investment grade and of high credit
quality. The obligor's ability to pay interest and repay principal is considered
to be strong but may be more vulnerable to adverse changes in economic
conditions and circumstances than bonds with higher ratings.

BBB -- Bonds considered to be investment grade and of satisfactory
credit quality. The obligor's ability to pay interest and repay principal is
considered to be adequate. Adverse changes in economic conditions and
circumstances, however, are more likely to have adverse impact on these bonds,
and therefore impair timely payment. The likelihood that the ratings of these
bonds will fall below investment grade is higher than for bonds with higher
ratings.

BB -- Bonds are considered speculative. The obligor's ability to pay
interest and repay principal may be affected over time by adverse economic
changes. However, business and financial alternatives can be identified which
could assist the obligor in satisfying its debt service requirements.

B -- Bonds are considered highly speculative. While bonds in this class
are currently meeting debt service requirements, the probability of continued
timely payments of principal and interest reflects the obligor's limited margin
of safety and the need for reasonable business and economic activity throughout
the life of the issue.

CCC -- Bonds have certain identifiable characteristics which, if not
remedied, may lead to default. The ability to meet obligations requires an
advantageous business and economic environment.

CC -- Bonds are minimally protected. Default in payment of interest
and/or principal seems probable over time.

C -- Bonds are in imminent default in payment of interest or principal.

DDD, DD AND D -- Bonds are in default on interest and/or principal
payments. Such bonds are extremely speculative and should be valued on the basis
of their ultimate recovery value in liquidation or reorganization of the
obligor. DDD represents the highest potential for recovery on these bonds, and D
represents the lowest potential for recovery.

Plus (+) Minus (-): Plus and minus signs are used with a rating symbol
to indicate the relative position of a credit within the rating category. Plus
and minus signs, however, are not used

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in the DDD, DD, or D categories.

RATINGS OF COMMERCIAL PAPER

Commercial paper rated A-1 by S&P has the following characteristics:
liquidity ratios are adequate to meet cash requirements; the issuer's long-term
debt is rated A or better; the issuer has access to at least two additional
channels of borrowing; and basic earnings and cash flow have an upward trend
with allowances made for unusual circumstances. Typically, the issuer's industry
is well established and the issuer has a strong position within the industry.

Commercial paper rated Prime-1 by Moody's is the highest commercial
paper assigned by Moody's. Among the factors considered by Moody's in assigning
ratings are the following: (1) evaluation of the management of the issuer; (2)
economic evaluation of the issuer's industry or industries and an appraisal of
speculative-type risks which may be inherent in certain areas; (3) evaluation of
the issuer's products in relation to competition and consumer acceptance; (4)
liquidity; (5) amount and quality of long-term debt; (6) trend of earnings over
a period of ten years; (7) financial strength of a parent company and the
relationships which exist with the issuer; and (8) recognition by the management
of obligations which may be present or may arise as a result of public interest
questions and preparations to meet such obligations. Relative strength or
weakness of the above factors determine how the issuer's commercial paper is
rated within various categories.

FT4174A

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FT4170A

PART A
INTERNATIONAL EQUITY PORTFOLIO

Responses to Items 1 through 3 and 5A have been omitted pursuant to
paragraph 4 of Instructions F of the General Instructions to Form N-1A.

ITEM 4. GENERAL DESCRIPTION OF REGISTRANT.

Republic Portfolios (the "Portfolio Trust") is a diversified, open-end
management investment company which was organized as a trust under the law of
the State of New York on November 1, 1994. Beneficial interests of the Portfolio
Trust are divided into actual and potential series, only one of which,
International Equity Portfolio (the "Portfolio") is described herein. Additional
series may be established in the future. Beneficial interests in the Portfolio
are issued solely in private placement transactions that do not involve any
"public offering" within the meaning of Section 4(2) of the Securities Act of
1933, as amended (the "1933 Act"). Investments in the Portfolio may only be made
by investment companies, insurance separate accounts, common or commingled trust
funds or similar organizations or entities that are "accredited investors"
within the meaning of Regulation D under the 1933 Act. This Registration
Statement does not constitute an offer to sell, or the solicitation of an offer
to buy, any "security" within the meaning of the 1933 Act.

Republic National Bank of New York ("Republic" or the "Manager") is the
investment manager of the Portfolio. Capital Guardian Trust Company ("CGTC" or
the "Sub-Adviser") continuously manages the investments of the Portfolio.

The investment objective of the Portfolio is to seek long-term growth
of capital and future income through investment primarily in securities of
non-U.S. issuers (including American Depositary Receipts ("ADRs") and U.S.
registered securities) and securities whose principal markets are outside of the
United States. The principal investments of the Portfolio will be in equity
securities of companies in developed nations, including Europe, Canada,
Australia and the Far East. The Portfolio may also invest in emerging market
equity securities.

References in this Part A to "Part B" are to the Part B relating to the
Portfolio.

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INVESTMENT OBJECTIVE

INVESTMENT POLICIES

The Portfolio will normally invest at least 80% of its assets in
foreign equity securities, consisting of common stock, preferred stock, and
securities convertible into common stock ("convertible securities"). The
principal investments of the Portfolio will be in equity securities of companies
in developed nations, including Europe, Canada, Australia and the Far East. It
is the current intention of the Portfolio to invest primarily in companies with
a large market capitalization. The Portfolio intends to have at least three
different countries represented in its portfolio. The Portfolio may invest up to
20% of its assets the equity securities of companies based in emerging markets.
See "Additional Risk Factors and Policies: Foreign Securities -- Emerging
Markets."

Under exceptional conditions abroad or when, in the opinion of the
Sub-Adviser, economic or market conditions warrant, the Portfolio may
temporarily invest part or all of its assets in fixed income securities
denominated in foreign currencies, obligations of domestic or foreign
governments and their political subdivisions ("Government Securities"), and
nonconvertible preferred stock, or be held in cash or equivalents. Debt
securities purchased by the Portfolio will be limited to those rated, at the
time of investment, in the four highest rating categories by a nationally
recognized statistical rating organization ("NRSRO") or, if unrated, determined
by the Sub-Adviser to be of comparable quality. Securities rated by a NRSRO in
the fourth highest rating category are considered to have some speculative
characteristics. When the total return opportunities in a foreign bond market
appear attractive in local currency terms, but, in the Sub-Adviser's judgment,
unacceptable currency risk exists, currency futures, forwards and options may be
used to hedge the currency risk. See "Additional Risk Factors and Policies:
Forward Foreign Currency Contracts and Options on Foreign Currencies."

As described under "Sub-Adviser," CGTC, the Portfolio's Sub-Adviser,
uses a system of multiple portfolio managers pursuant to which the Portfolio is
divided into segments which are assigned to individual portfolio managers.
Within investment guidelines, each

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portfolio manager makes individual decisions as to company, country, industry,
timing and percentage based on extensive field research and direct company
contact.

Because of the risks associated with common stocks and other equity
investments, the Portfolio is intended to be a long-term investment vehicle and
is not designed to provide investors with a means of speculating on short-term
stock market movements. The Sub-Adviser seeks to reduce these risks by
diversifying the portfolio as well as by monitoring broad economic trends and
corporate and legislative developments.

ADDITIONAL RISK FACTORS AND POLICIES

FOREIGN SECURITIES

Investing in securities issued by companies whose principal business
activities are outside the United States may involve significant risks not
present in domestic investments. For example, there is generally less publicly
available information about foreign companies, particularly those not subject to
the disclosure and reporting requirements of the U.S. securities laws. Foreign
issuers are generally not bound by uniform accounting, auditing, and financial
reporting requirements and standards of practice comparable to those applicable
to domestic issuers. Investments in foreign securities also involve the risk of
possible adverse changes in investment or exchange control regulations,
expropriation or confiscatory taxation, limitation on the removal of cash or
other assets of the Portfolio, political or financial instability, or diplomatic
and other developments which could affect such investments. Further, economies
of particular countries or areas of the world may differ favorably or
unfavorably from the economy of the United States. Changes in foreign exchange
rates will affect the value of securities denominated or quoted in currencies
other than the U.S. dollar. Foreign securities often trade with less frequency
and volume than domestic securities and therefore may exhibit greater price
volatility. Additional costs associated with an investment in foreign securities
may include higher custodial fees than apply to domestic custodial arrangements,
and transaction costs of foreign currency conversions.

EMERGING MARKETS. Investing in emerging market countries presents
greater risk than investing in foreign issuers in general. A number of emerging
markets restrict foreign investment in stocks. Repatriation of investment
income, capital, and the proceeds of sales by foreign investors may require
governmental registration and/or approval in some emerging market countries. A
number of the currencies of developing countries have experienced significant
declines against the U.S. dollar in recent years, and devaluation may occur
subsequent to investments in these currencies by the Portfolio. Inflation and
rapid fluctuations in inflation rates have had and may continue to have negative
effects on the economies and securities markets of certain emerging market
countries. Many of the emerging securities markets are relatively small, have
low trading volumes, suffer periods of relative illiquidity, and are
characterized by significant price volatility. There is the risk that a future
economic or political crisis could lead to price controls, forced mergers of

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companies, expropriation or confiscatory taxation, seizure, nationalization, or
creation of government monopolies, any of which could have a detrimental effect
on the Portfolio's investments.

Investing in formerly communist East European countries involves the
additional risk that the government or other executive or legislative bodies may
decide not to continue to support the economic reform programs implemented since
the fall of communism and could follow radically different political and/or
economic policies to the detriment of investors, including non-market oriented
policies such as the support of certain industries at the expense of other
sectors or a return to a completely centrally planned economy. The Portfolio
does not currently intend to invest a significant portion or its assets in
formerly communist East European countries.

As used in this Part A, "emerging markets" include any country which in
the opinion of the sub-adviser is generally considered to be an emerging or
developing country by the International Bank for Reconstruction and Development
(the World Bank) and the International Monetary Fund. Currently, these countries
generally include every country in the world except Australia, Austria, Belgium,
Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Italy, Japan,
Netherlands, New Zealand, Norway, Singapore, Spain, Sweden, Switzerland, United
Kingdom and United States.

A company in an emerging market is one that: (i) is domiciled and has
its principal place of business in an emerging market or (ii) (alone or on a
consolidated basis) derives or expects to derive a substantial portion of its
total revenue from either goods produced, sales made or services performed in
emerging markets. The Portfolio may invest up to 20% of its assets in the equity
securities of companies based in emerging markets.

SOVEREIGN AND SUPRANATIONAL DEBT OBLIGATIONS. Debt instruments issued
or guaranteed by foreign governments, agencies, and supranational organizations
("sovereign debt obligations"), especially sovereign debt obligations of
developing countries, may involve a high degree of risk, and may be in default
or present the risk of default. The issuer of the obligation or the governmental
authorities that control the repayment of the debt may be unable or unwilling to
repay principal and interest when due, and may require renegotiation or
rescheduling of debt payments. In addition, prospects for repayment of principal
and interest may depend on political as well as economic factors.

DEPOSITARY RECEIPTS

The Portfolio may invest in American Depositary Receipts ("ADRs"),
European Depositary Receipts ("EDRs"), Global Depositary Receipts ("GDRs"), and
International Depositary Receipts ("IDRs"), or other similar securities
convertible into securities of foreign issuers. ADRs (sponsored or unsponsored)
are receipts typically issued by a U.S. bank or trust company evidencing the
deposit with such bank or company of a security of a foreign issuer, and are
publicly traded on exchanges or over-the-counter in the United States.

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ADRs are receipts typically issued by a U.S. bank or trust company
evidencing ownership of the underlying securities, and may be issued as
sponsored or unsponsored programs. In sponsored programs, an issuer has made
arrangements to have its securities trade in the form of ADRs. In unsponsored
programs, the issuer may not be directly involved in the creation of the
program. Although regulatory requirements with respect to sponsored and
unsponsored programs are generally similar, in some cases it may be easier to
obtain financial information from an issuer that has participated in the
creation of a sponsored program.

EDRs, which are sometimes referred to as Continental Depositary
Receipts, are receipts issued in Europe typically by foreign bank and trust
companies that evidence ownership of either foreign or domestic underlying
securities. IDRs are receipts typically issued by a European bank or trust
company evidencing ownership of the underlying foreign securities. GDRs are
receipts issued by either a U.S. or non-U.S. banking institution evidencing
ownership of the underlying foreign securities.

FORWARD FOREIGN CURRENCY CONTRACTS AND OPTIONS ON FOREIGN CURRENCIES

OPTIONS AND FUTURES TRANSACTIONS

For hedging purposes only, the Portfolio may invest in foreign currency
futures contracts and options on foreign currencies and foreign currency futures
contracts. Futures contracts provide for the sale by one party and purchase by
another party of a specified amount of a specific security, at a specified
future time and price. An option is a legal contract that gives the holder the
right to buy or sell a specified amount of the underlying security or futures
contract at a fixed or determinable price upon the exercise of the option. A
call option conveys the right to buy and a put option conveys the right to sell
a specified quantity of the underlying security. The Portfolio will segregate
assets or "cover" its positions consistent with requirements under the
Investment Company Act of 1940 ("1940

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Act").

There are several risks associated with the use of futures and options
for hedging purposes. There can be no guarantee that there will be a correlation
between price movements in the hedging vehicle and in the portfolio securities
being hedged. An incorrect correlation could result in a loss on both the hedged
securities in the Portfolio and the hedging vehicle so that the portfolio return
might have been greater had hedging not been attempted. There can be no
assurance that a liquid market will exist at a time when the Portfolio seeks to
close out a futures contract or a futures option position. Most futures
exchanges and boards of trade limit the amount of fluctuation permitted in
futures contract prices during a single day; once the daily limit has been
reached on a particular contract, no trades may be made that day at a price
beyond that limit. In addition, certain of these instruments are relatively new
and without a significant trading history. As a result, there is no assurance
that an active secondary market will develop or continue to exist. Lack of a
liquid market for any reason may prevent the Portfolio from liquidating an
unfavorable position and the Portfolio would remain obligated to meet margin
requirements until the position is closed.

CONVERTIBLE SECURITIES

Although the Portfolio's equity investments consist primarily of common
and preferred stocks, the Portfolio may buy securities convertible into common
stock if, for example, the Sub-Adviser believes that a company's convertible
securities are undervalued in the market. Convertible securities eligible for
purchase by the Portfolio consist of convertible bonds, convertible preferred
stocks, warrants and rights. See "Additional Risk Factors and Policies:
Warrants" below and Part B for a discussion of these instruments.

ILLIQUID INVESTMENTS

The Portfolio may invest up to 15% of its net assets in securities that
are illiquid by virtue of the absence of a readily available market, or because
of legal or contractual restrictions on resale. This policy does not limit the
acquisition of securities eligible for resale to qualified institutional buyers
pursuant to Rule 144A under the Securities Act of 1933, as described below. The
Portfolio may not invest more than 10% of its assets in restricted securities
(including Rule 144A securities). There may be delays in selling these
securities and sales may be made at less favorable prices.

The Sub-Adviser may determine that a particular Rule 144A security is
liquid and thus not subject to the Portfolio's limits on investment in illiquid
securities, pursuant to guidelines adopted by the Board of Trustees. Factors
that the Sub-Adviser must consider in determining whether a particular Rule 144A
security is liquid include the frequency of trades and quotes for the security,
the number of dealers willing to purchase or sell the security and the number of
other potential purchasers, dealer undertakings to make a market in the
security, and the nature of the security and the nature of the market for the

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security (I.E., the time needed to dispose of the security, the method of
soliciting offers and the mechanics of transfer). Investing in Rule 144A
securities could have the effect of increasing the level of the Portfolio's
illiquidity to the extent that qualified institutions might become, for a time,
uninterested in purchasing these securities.

WARRANTS

The Portfolio may invest up to 10% of its net assets in warrants,
except that this limitation does not apply to warrants acquired in units or
attached to securities. A warrant is an instrument issued by a corporation which
gives the holder the right to subscribe to a specific amount of the
corporation's capital stock at a set price for a specified period of time.
Warrants do not represent ownership of the securities, but only the right to buy
the securities. The prices of warrants do not necessarily move parallel to the
prices of underlying securities. Warrants may be considered speculative in that
they have no voting rights, pay no dividends, and have no rights with respect to
the assets of a corporation issuing them. Warrant positions will not be used to
increase the leverage of the Portfolio. Consequently, warrant positions are
generally accompanied by cash positions equivalent to the required exercise
amount.

LOANS OF PORTFOLIO SECURITIES

FIRM COMMITMENT AGREEMENTS AND WHEN-ISSUED SECURITIES

The Portfolio may purchase and sell securities on a when-issued or
firm-commitment basis, in which a security's price and yield are fixed on the
date of the commitment but payment and delivery are scheduled for a future date.
On the settlement date, the market value of the security may be higher or lower
than its purchase or sale price under the agreement. If the other party to a
when-issued or firm-commitment transaction fails to deliver or pay for the
security, the Portfolio could miss a favorable price or yield opportunity or
suffer a loss. The Portfolio will not earn interest on securities until the
settlement date. The Portfolio will maintain in a segregated account with the
custodian cash or liquid, high grade debt securities equal (on a daily
marked-to-market basis) to the amount of its commitment to purchase the
securities on a when-issued basis.

PORTFOLIO TURNOVER

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The Sub-Adviser manages the Portfolio generally without regard to
restrictions on portfolio turnover, except those imposed by provisions of the
federal tax laws regarding short-term trading. In general, the Portfolio will
not trade for short-term profits, but when circumstances warrant, investments
may be sold without regard to the length of time held. For the period from
January 9, 1995 (commencement of operations) to October 31, 1995, the portfolio
turnover rate for the Portfolio was 3%. Although this figure is reflective of
the Portfolio's initial period of operations, it is expected that in subsequent
years the annual turnover rate for the Portfolio will not exceed 40%.

INVESTMENT RESTRICTIONS

The Portfolio has adopted certain investment restrictions designed to
reduce exposure to specific situations. Some of these investment restrictions
are:

(2) with respect to 75% of its assets, the Portfolio will not purchase
a security if, as a result, the Portfolio would hold more than 10% of the
outstanding voting securities of any issuer;

(4) the Portfolio will not acquire any securities of companies within
one industry, if, as a result of such acquisition, more than 25% of the value of
the Portfolio's total assets would be invested in securities of companies within
such industry; provided, however, that there shall be no limitation on the
purchase of obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities, when the Portfolio adopts a temporary defensive
position;

(5) the Portfolio will not make loans except for the lending of
portfolio securities pursuant to guidelines established by its Board of Trustees
and except as otherwise in accordance with its investment objective and
policies;

(6) the Portfolio will not borrow money, except from a bank as a
temporary measure to satisfy redemption requests or for extraordinary or
emergency purposes, provided that the Portfolio maintains asset coverage of at
least 300% for all such borrowings; additional securities will not be purchased
while borrowings exceed 5% of the Portfolio's assets;

(7) the Portfolio will not purchase warrants, valued at the lower of
cost or market,

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in excess of 10% of the Portfolio's net assets. Included within that amount, but
not to exceed 2% of the Portfolio's net assets, are warrants whose underlying
securities are not traded on principal domestic or foreign exchanges. Warrants
acquired by the Portfolio in units or attached to securities are not subject to
these restrictions;

(8) the Portfolio will not issue senior securities, except as permitted
under the 1940 Act; and

(9) the Portfolio will not invest its assets in securities of any
investment company, except by purchase in the open market involving only
customary brokers' commissions or in connection with mergers, acquisitions of
assets or consolidations and except as may otherwise be permitted by the 1940
Act; provided, however, that the Portfolio shall not invest in the shares of any
open-end investment company unless (1) the Portfolio's Adviser waives any
investment advisory fees with respect to such assets and (2) the Portfolio pays
no sales charge in connection with the investment.

Limitations (1), (2), (4), (5) and (8), and certain other limitations described
in Part B are fundamental and may be changed only with the approval of the
holders of a "majority of the outstanding voting securities" (as defined in the
1940 Act) of the Portfolio. The other investment restrictions described here and
in Part B are not fundamental policies, meaning that the Board of Trustees of
the Portfolio Trust may change them without investor approval. If a percentage
limitation on investment or utilization of assets as set forth above is adhered
to at the time an investment is made, a later change in percentage resulting
from changes in the value or total cost of the Portfolio's assets will not be
considered a violation of the restriction, and the sale of securities will not
be required.

ITEM 5. MANAGEMENT OF THE PORTFOLIO TRUST.

The business and affairs of the Portfolio Trust are managed under the
direction of its Board of Trustees. The Trustees of the Portfolio Trust are
Frederick C. Chen, Alan S. Parsow, Larry M. Robbins and Michael Seely.
Additional information about the Trustees, as well as the executive officers of
the Portfolio Trust, may be found in Part B under the caption "Management of the
Portfolio Trust -- Trustees and Officers".

INVESTMENT MANAGER

Republic whose address is 452 Fifth Avenue, New York, New York 10018,
serves as investment manager to the Portfolio pursuant to an Investment
Management Contract with

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the Portfolio Trust. The Manager is not paid a fee by the Portfolio for its
services.

SUB-ADVISER

CGTC continuously manages the investment portfolio of the Portfolio
pursuant to a Sub-Advisory Agreement with the Manager. For its services, the
Sub-Adviser is paid a fee by the Portfolio, computed daily and based on the
Portfolio's average daily net assets, equal to 0.70% of net assets up to $25
million, 0.55% of net assets over $25 million up to $50 million, 0.425% of net
assets over $50 million up to $250 million, and 0.375% of net assets over $250
million. It is the responsibility of the Sub-Adviser not only to make investment
decisions for the Portfolio, but also to place purchase and sale orders for the
portfolio transactions of the Portfolio. See "Portfolio Transactions."

CGTC, which was founded in 1968, is a wholly owned subsidiary of The
Capital Group Companies, Inc., both of which are located at 333 South Hope
Street, Los Angeles, California 90071. As of December 31, 1995, CGTC managed in
excess of $47 billion of assets primarily for large institutional clients.
CGTC's research activities are conducted by affiliated companies with offices in
Los Angeles, San Francisco, New York, Washington, D.C., Atlanta, London, Geneva,
Singapore, Hong Kong and Tokyo.

Capital Research and Management Company ("CRMC"), another wholly owned
subsidiary of The Capital Group Companies, Inc., provides investment advisory
services to the following mutual funds, which are know collectively as the
American Funds Group:

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AMCAP Fund, American Balanced Fund, American High Income Municipal Bond Fund,
American High Income Trust, American Mutual Fund, The Bond Fund of America, The
Cash Management Trust of America, Capital Income Builder, Inc., Capital World
Bond Fund, EuroPacific Growth Fund, Fundamental Investors, The Growth Fund of
America, Income Fund of America, Intermediate Bond Fund of America, The
Investment Company of America, Limited Term Tax-Exempt Bond Fund of America, The
New Economy Fund, New Perspective Fund, Smallcap World Fund, The Tax-Exempt Bond
Fund of America, The American Funds Tax-Exempt Series I, The American Funds
Tax-Exempt Series II, The Tax- Exempt Money Fund of America, The American Funds
Income Series, The U.S. Treasury Money Fund of America, Washington Mutual
Investors Fund, and Capital World Growth and Income Fund. CRMC also provides
investment advisory services to: American Variable Insurance Series and Anchor
Pathway Fund, which are used exclusively as underlying investment vehicles for
variable insurance contracts and policies, and to Endowments, Inc. and Bond
Portfolio for Endowments, Inc., whose shares may be owned only by tax-exempt
organizations. Capital International, Inc., an indirect wholly owned subsidiary
of The Capital Group Companies, Inc., provides investment advisory services to
Emerging Markets Growth Fund, Inc. which is a closed-end investment company.

The following persons are primarily responsible for portfolio
management of the Portfolio: David Fisher, Vice Chairman of CGTC, has had 30
years experience as an investment professional (26 years with CGTC or its
affiliates); Harmut Giesecke, Senior Vice President and Director of Capital
International, Inc., has had 24 years experience as an investment professional
(23 years with CGTC or its affiliates); Nancy Kyle, Senior Vice President of
CGTC, has had 22 years experience as an investment professional (5 years with
CGTC or its affiliates; from 1980 to 1990, Ms. Kyle was managing director of J.
P. Morgan Investment Management, Inc.); John McIlwraith, Senior Vice President
of CGTC, has had 26 years experience as an investment professional (12 years
with CGTC or its affiliates); Robert Ronus, President of CGTC, has had 27 years
experience as an investment professional (23 years with CGTC or its affiliates);
and Nilly Sikorsky, Director of The Capital Group, Inc., has had 33 years
experience as an investment professional, all of which was with CGTC or its
affiliates.

PLACEMENT AGENT

The Portfolio has not retained the services of a principal underwriter
or distributor, since interests in the Portfolio are offered solely in private
placement transactions. Signature Financial Group (Grand Cayman) Limited
("Signature (Cayman)"), acting as agent for the Portfolio, serves as the
placement agent of interests in the Portfolio. Signature (Cayman) receives no
compensation for serving as placement agent.

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ADMINISTRATOR

Pursuant to an Administrative Services Agreement, Signature (Cayman),
whose address is P.O. Box 2494, Elizabethan Square, 2nd Floor, George Town,
Grand Cayman, Cayman Islands, B.W.I., provides the Portfolio with general office
facilities; and supervises the overall administration of the Portfolio
including, among other responsibilities, the preparation and filing of all
documents required for compliance by the Portfolio with applicable laws and
regulations and arranging for the maintenance of books and records of the
Portfolio. For its services to the Portfolio, Signature (Cayman) receives from
the Portfolio fees payable monthly equal on an annual basis (for the Portfolio's
then-current fiscal year) to 0.05% of the Portfolio's average daily net assets
up to $100 million.

Signature (Cayman) and its affiliates also serve as administrator of
other investment companies. Signature (Cayman) is a wholly-owned subsidiary of
Signature Financial Group, Inc.

FUND ACCOUNTING AGENT

TRANSFER AGENT AND CUSTODIAN

The Portfolio Trust has entered into a Transfer Agency Agreement with
Investors Bank & Trust Company ("IBT") pursuant to which IBT acts as transfer
agent (the "Transfer Agent") for the Portfolio. The Transfer Agent maintains an
account for each investor in the Portfolio. Pursuant to a Custodian Agreement,
IBT also acts as the custodian (the "Custodian") of the assets of the Portfolio.
The Portfolio Trust's Custodian Agreement provides that the Custodian may use
the services of sub-custodians with respect to the Portfolio. The Custodian's
responsibilities include safeguarding and controlling the Portfolio's cash and
securities, and handling the receipt and delivery of securities, determining
income and collecting interest on the Portfolio's investments, maintaining books
of original entry for portfolio accounting and other required books and
accounts, and calculating the daily net asset value of the Portfolio. Securities
held for the Portfolio may be deposited into the Federal Reserve-Treasury
Department Book Entry System or the Depositary Trust Company. The Custodian does
not determine the investment policies of the Portfolio or decide which
securities will be purchased or sold for the Portfolio. Assets of the Portfolio
may, however, be invested in securities of the Custodian and the Portfolio

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<PAGE>

Trust may deal with the Custodian as principal in securities transactions for
the Portfolio. For its services, IBT receives such compensation as may from time
to time be agreed upon by it and the Portfolio Trust.

ITEM 6. CAPITAL STOCK AND OTHER SECURITIES.

The value of the Portfolio's assets is determined on the basis of such
assets' market or other fair value. See "Purchase, Redemption and Pricing of
Securities Being Offered" in Part B.

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<PAGE>

if any, so determined are allocated pro rata among the investors in the
Portfolio at the time of such determination. For this purpose, the net income of
the Portfolio (from the time of the immediately preceding determination thereof)
consists of (i) accrued interest, accretion of discount and amortization of
premium on securities held by the Portfolio, less (ii) all actual and accrued
expenses of the Portfolio (including the fees payable to the Investment Adviser
and Administrator of the Portfolio).

The end of the Portfolio's fiscal year is October 31.

Investor inquiries may be directed to Signature (Cayman), P.O. Box
2494, Elizabethan Square, 2nd Floor, George Town, Grand Cayman, Cayman Islands,
B.W.I. ((809) 945-1824).

ITEM 7. PURCHASE OF SECURITIES BEING OFFERED.

Beneficial interests in the Portfolio are issued solely in private
placement transactions that do not involve any "public offering" within the
meaning of Section 4(2) of the 1933 Act.
See Item 4 above.

The Portfolio and Signature (Cayman) reserve the right to cease
accepting investments at any time or to reject any investment order.

Each investor in the Portfolio, may add to or reduce its investment in
the Portfolio

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<PAGE>

on each Portfolio Business Day. At 4:00 p.m., New York time on each Portfolio
Business Day, the value of each investor's beneficial interest in the Portfolio
is determined by multiplying the net asset value of the Portfolio by the
percentage, effective for that day, which represents that investor's share of
the aggregate beneficial interests in the Portfolio. Any additions or
withdrawals, which are to be effected on that day, are then effected. The
investor's percentage of the aggregate beneficial interests in the Portfolio is
then recomputed as the percentage equal to the fraction (i) the numerator of
which is the value of such investor's investment in the Portfolio as of 4:00
p.m., New York time on such day plus or minus, as the case may be, the amount of
any additions to or withdrawals from the investor's investment in the Portfolio
effected on such day, and (ii) the denominator of which is the aggregate net
asset value of the Portfolio as of 4:00 p.m., New York time on such day plus or
minus, as the case may be, the amount of the net additions to or withdrawals
from the aggregate investments in the Portfolio by all investors in the
Portfolio. The percentage so determined is then applied to determine the value
of the investor's interest in the Portfolio as of 4:00 p.m., New York time on
the following Portfolio Business Day.

ITEM 8. REDEMPTION OR REPURCHASE.

ITEM 9. PENDING LEGAL PROCEEDINGS.

Not applicable.

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<PAGE>
FT4177A

PART B
FIXED INCOME PORTFOLIO

ITEM 10. COVER PAGE.

Not applicable.

ITEM 11. TABLE OF CONTENTS. PAGE

General Information and History.................................B-1
Investment Objective and Policies...............................B-1
Management of the Portfolio Trust...............................B-13
Control Persons and Principal Holders
of Securities...................................................B-16
Investment Advisory and Other Services..........................B-16
Brokerage Allocation and Other Practices........................B-19
Capital Stock and Other Securities..............................B-20
Purchase, Redemption and Pricing of
Securities Being Offered........................................B-22
Tax Status......................................................B-23
Underwriters....................................................B-27
Calculations of Performance Data................................B-27
Financial Statements............................................B-27

References in this Part B to "Part A" are to the Part A relating to
Fixed Income Portfolio (the "Portfolio"). Unless the context otherwise requires,
terms defined in the Part A have the same meaning in this Part B as in the Part
A.

ITEM 12. GENERAL INFORMATION AND HISTORY.

Not applicable.

ITEM 13. INVESTMENT OBJECTIVE AND POLICIES.

Part A contains additional information about the investment objectives
and policies and management techniques of the Portfolio. This Part B should only
be read in conjunction with Part A of the registration statement.

The following supplements the information contained in Part A
concerning the investment objective, policies and techniques of the Portfolio.

<PAGE>

MORTGAGE-RELATED AND OTHER ASSET-BACKED SECURITIES

Mortgage-related securities are interests in pools of mortgage loans
made to residential home buyers, including mortgage loans made by savings and
loan institutions, mortgage bankers, commercial banks and others. Pools of
mortgage loans are assembled as securities for sale to investors by various
governmental, government-related and private organizations (see "MORTGAGE
PASS-THROUGH SECURITIES"). The Portfolio may also invest in debt securities
which are secured with collateral consisting of mortgage-related securities (see
"COLLATERALIZED MORTGAGE OBLIGATIONS") and in other types of mortgage-related
securities.

MORTGAGE PASS-THROUGH SECURITIES. Interests in pools of
mortgage-related securities differ from other forms of debt securities, which
normally provide for periodic payment of interest in fixed amounts with
principal payments at maturity or specified call dates. Instead, these
securities provide a monthly payment which consists of both interest and
principal payments. In effect, these payments are a "pass-through" of the
monthly payments made by the individual borrowers on their residential or
commercial mortgage loans, net of any fees paid to the issuer or guarantor of
such securities. Additional payments are caused by repayments of principal
resulting from the sale of the underlying property, refinancing or foreclosure,
net of fees or costs which may be incurred. Some mortgage-related securities
(such as securities issued by the Government National Mortgage Association) are
described as "modified pass-through." These securities entitle the holder to
receive all interest and principal payments owed on the mortgage pool, net of
certain fees, at the scheduled payment dates regardless of whether or not the
mortgagor actually makes the payment.

The principal governmental guarantor of mortgage-related securities is
the Government National Mortgage Association ("GNMA"). GNMA is a wholly owned
U.S. Government corporation within the Department of Housing and Urban
Development. GNMA is authorized to guarantee, with the full faith and credit of
the U.S. Government, the timely payment of principal and interest on securities
issued by institutions approved by GNMA (such as savings and loan institutions,
commercial banks and mortgage bankers) and backed by pools of FHA-insured or
VA-guaranteed mortgages.

Government-related guarantors (I.E., not backed by the full faith and
credit of the U.S. Government) include the Federal National Mortgage Association
("FNMA") and the Federal Home Loan Mortgage Corporation ("FHLMC"). FNMA is a
government-sponsored corporation owned entirely by private stockholders. It is
subject to general regulation by the Secretary of Housing and Urban Development.
FNMA purchases conventional (I.E., not insured or guaranteed by any government
agency) residential mortgages from a list of approved seller/servicers which
include state and federally chartered savings and loan associations, mutual
savings banks, commercial banks and credit unions and mortgage bankers.
Pass-through securities issued by FNMA are guaranteed as to timely payment of
principal and interest by FNMA but are not backed by the full faith and credit
of the U.S. Government.

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<PAGE>

FHLMC was created by Congress in 1970 for the purpose of increasing the
availability of mortgage credit for residential housing. It is a
government-sponsored corporation formerly owned by the 12 Federal Home Loan
Banks and now owned entirely by private stockholders. FHLMC issues participation
certificates ("PCs") which represent interests in conventional mortgages from
FHLMC's national portfolio. FHLMC guarantees the timely payment of interest and
ultimate collection of principal, but PCs are not backed by the full faith and
credit of the U.S. Government.

Commercial banks, savings and loan institutions, private mortgage
insurance companies, mortgage bankers and other secondary market issuers also
create pass-through pools of conventional residential mortgage loans. Such
issuers may, in addition, be the originators and/or servicers of the underlying
mortgage loans as well as the guarantors of the mortgage-related securities.
Pools created by such non-governmental issuers generally offer a higher rate of
interest than government and government-related pools because there are no
direct or indirect government or agency guarantees of payments in the former
pools. However, timely payment of interest and principal of these pools may be
supported by various forms of insurance or guarantees, including individual
loan, title, pool and hazard insurance and letters of credit. The insurance and
guarantees are issued by governmental entities, private insurers and the
mortgage poolers. Such insurance and guarantees and the creditworthiness of the
issuers thereof will be considered in determining whether a mortgage-related
security meets the Portfolio's investment quality standards. There can be no
assurance that the private insurers or guarantors can meet their obligations
under the insurance policies or guarantee arrangements. Although the market for
such securities is becoming increasingly liquid, securities issued by certain
private organizations may not be readily marketable. The Portfolio will not
purchase mortgage-related securities or other assets which in the Sub-Adviser's
opinion are illiquid if, as a result, more than 15% of the value of the
Portfolio's total assets will be illiquid.

Mortgage-backed securities that are issued or guaranteed by the U.S.
Government, its agencies or instrumentalities, are not subject to the
Portfolio's industry concentration restrictions, set forth below under
"Investment Restrictions," by virtue of the exclusion from that test available
to all U.S. Government securities. In the case of privately issued
mortgage-related securities, the Portfolio takes the position that
mortgage-related securities do not represent interests in any particular
"industry" or group of industries. The assets underlying such securities may be
represented by a portfolio of first lien residential mortgages (including both
whole mortgage loans and mortgage participation interests) or portfolios of
mortgage pass-through securities issued or guaranteed by GNMA, FNMA or FHLMC.
Mortgage loans underlying a mortgage-related security may in turn be insured or
guaranteed by the Federal Housing Administration or the Department of Veterans
Affairs. In the case of private issue mortgage-related securities whose
underlying assets are neither U.S. Government securities nor U.S.
Government-insured mortgages, to the extent that real properties securing such
assets may be located in the same geographical region, the security may be
subject to a greater risk of default than other comparable securities in the
event of adverse economic, political or business developments that may affect
such region and,

B-3

<PAGE>

ultimately, the ability of residential homeowners to make payments of principal
and interest on the underlying mortgages.

COLLATERALIZED MORTGAGE OBLIGATIONS ("CMOS"). A CMO is a hybrid between
a mortgage-backed bond and a mortgage pass-through security. Similar to a bond,
interest and prepaid principal is paid, in most cases, semiannually. CMOs may be
collateralized by whole mortgage loans, but are more typically collateralized by
portfolios of mortgage pass-through securities guaranteed by GNMA, FHLMC, or
FNMA, and their income streams.

CMOs are structured into multiple classes, each bearing a different
stated maturity. Actual maturity and average life will depend upon the
prepayment experience of the collateral. CMOs provide for a modified form of
call protection through a de facto breakdown of the underlying pool of mortgages
according to how quickly the loans are repaid. Monthly payment of principal
received from the pool of underlying mortgages, including prepayments, is first
returned to investors holding the shortest maturity class. Investors holding the
longer maturity classes receive principal only after the first class has been
retired. An investor is partially guarded against a sooner than desired return
of principal because of the sequential payments.

In a typical CMO transaction, a corporation ("issuer") issues multiple
series (E.G., A, B, C, Z) of CMO bonds ("Bonds"). Proceeds of the Bond offering
are used to purchase mortgages or mortgage pass-through certificates
("Collateral"). The Collateral is pledged to a third party trustee as security
for the Bonds. Principal and interest payments from the Collateral are used to
pay principal on the Bonds in the order A, B, C, Z. The Series A, B, and C Bonds
all bear current interest. Interest on the Series Z Bond is accrued and added to
principal and a like amount is paid as principal on the Series A, B, or C Bond
currently being paid off. When the Series A, B, and C Bonds are paid in full,
interest and principal on the Series Z Bond begins to be paid currently. With
some CMOs, the issuer serves as a conduit to allow loan originators (primarily
builders or savings and loan associations) to borrow against their loan
portfolios.

FHLMC CMOS. FHLMC CMOs are debt obligations of FHLMC issued in multiple
classes having different maturity dates which are secured by the pledge of a
pool of conventional mortgage loans purchased by FHLMC. Unlike FHLMC PCs,
payments of principal and interest on the CMOs are made semiannually, as opposed
to monthly. The amount of principal payable on each semiannual payment date is
determined in accordance with FHLMC's mandatory sinking fund schedule, which, in
turn, is equal to approximately 100% of FHA prepayment experience applied to the
mortgage collateral pool. All sinking fund payments in the CMOs are allocated to
the retirement of the individual classes of bonds in the order of their stated
maturities. Payment of principal on the mortgage loans in the collateral pool in
excess of the amount of FHLMC's minimum sinking fund obligation for any payment
date are paid to the holders of the CMOs as additional sinking fund payments.
Because of the "pass-through" nature of all principal payments received on the
collateral pool in excess of FHLMC's minimum sinking fund requirement, the rate
at which

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<PAGE>

principal of the CMOs is actually repaid is likely to be such that each class of
bonds will be retired in advance of its scheduled maturity date.

If collection of principal (including prepayments) on the mortgage
loans during any semiannual payment period is not sufficient to meet FHLMC's
minimum sinking fund obligation on the next sinking fund payment date, FHLMC
agrees to make up the deficiency from its general funds.

Criteria for the mortgage loans in the pool backing the FHLMC CMOs are
identical to those of FHLMC PCs. FHLMC has the right to substitute collateral in
the event of delinquencies and/or defaults.

OTHER MORTGAGE-RELATED SECURITIES. Other mortgage-related securities
include securities other than those described above that directly or indirectly
represent a participation in, or are secured by and payable from, mortgage loans
on real property, including CMO residuals or stripped mortgage-backed
securities. Other mortgage-related securities may be equity or debt securities
issued by agencies or instrumentalities of the U.S. Government or by private
originators of, or investors in, mortgage loans, including savings and loan
associations, homebuilders, mortgage banks, commercial banks, investment banks,
partnerships, trusts and special purpose entities of the foregoing.

CMO RESIDUALS. CMO residuals are derivative mortgage securities issued
by agencies or instrumentalities of the U.S. Government or by private
originators of, or investors in, mortgage loans, including savings and loan
associations, homebuilders, mortgage banks, commercial banks, investment banks
and special purpose entities of the foregoing.

The cash flow generated by the mortgage assets underlying a series of
CMOs is applied first to make required payments of principal and interest on the
CMOs and second to pay the related administrative expenses of the issuer. The
residual in a CMO structure generally represents the interest in any excess cash
flow remaining after making the foregoing payments. Each payment of such excess
cash flow to a holder of the related CMO residual represents income and/or a
return of capital. The amount of residual cash flow resulting from a CMO will
depend on, among other things, the characteristics of the mortgage assets, the
coupon rate of each class of CMO, prevailing interest rates, the amount of
administrative expenses and the prepayment experience on the mortgage assets. In
particular, the yield to maturity on CMO residuals is extremely sensitive to
prepayments on the related underlying mortgage assets, in the same manner as an
interest-only ("IO") class of stripped mortgage-backed securities. See "Other
Mortgage-Related Securities --Stripped Mortgage-Backed Securities." In addition,
if a series of a CMO includes a class that bears interest at an adjustable rate,
the yield to maturity on the related CMO residual will also be extremely
sensitive to changes in the level of the index upon which interest rate
adjustments are based. As described below with respect to stripped
mortgage-backed securities, in certain circumstances the Portfolio may fail to
recoup fully its initial investment in a CMO residual.

B-5

<PAGE>

CMO residuals are generally purchased and sold by institutional
investors through several investment banking firms acting as brokers or dealers.
The CMO residual market has only very recently developed and CMO residuals
currently may not have the liquidity of other more established securities
trading in other markets. Transactions in CMO residuals are generally completed
only after careful review of the characteristics of the securities in question.
In addition, CMO residuals may or, pursuant to an exemption therefrom, may not
have been registered under the Securities Act of 1933, as amended (the "1933
Act"). CMO residuals, whether or not registered under the 1933 Act, may be
subject to certain restrictions on transferability and may be deemed "illiquid"
and subject to the Portfolio's limitations on investment in illiquid securities.

STRIPPED MORTGAGE-BACKED SECURITIES. Stripped mortgage-backed
securities ("SMBS") are derivative multi-class mortgage securities. SMBS may be
issued by agencies or instrumentalities of the U.S. Government or by private
originators of, or investors in, mortgage loans, including savings and loan
associations, mortgage banks, commercial banks, investment banks and special
purpose entities of the foregoing.

SMBS are usually structured with two classes that receive different
proportions of the interest and principal distributions on a pool of mortgage
assets. A common type of SMBS will have one class receiving some of the interest
and most of the principal from the mortgage assets, while the other class will
receive most of the interest and the remainder of the principal. In the most
extreme case, one class will receive all of the interest (the IO class), while
the other class will receive all of the principal (the principal-only or "PO"
class). The yield to maturity on an IO class is extremely sensitive to the rate
of principal payments (including prepayments) on the related underlying mortgage
assets, and a rapid rate of principal payments may have a material adverse
effect on the Portfolio's yield to maturity from these securities. If the
underlying mortgage assets experience greater than anticipated prepayments of
principal, the Portfolio may fail to fully recoup its initial investment in
these securities even if the security is in one of the highest rating
categories.

Although SMBS are purchased and sold by institutional investors through
several investment banking firms acting as brokers or dealers, these securities
were only recently developed. As a result, established trading markets have not
yet developed and, accordingly, these securities may be deemed "illiquid" and
subject to the Portfolio's limitations on investment in illiquid securities.

OTHER ASSET-BACKED SECURITIES. Similarly, the Sub-Adviser expects that
other asset- backed securities (unrelated to mortgage loans) will be offered to
investors, such as Certificates for Automobile ReceivablesSM ("CARSSM"). CARSSM
represent undivided fractional interests in a trust whose assets consist of a
pool of motor vehicle retail installment sales contracts and security interests
in the vehicles securing the contracts. Payments of principal and interest on
CARSSM are passed through monthly to certificate holders and are guaranteed up
to certain amounts and for a certain time period by a letter of credit issued by
a financial institution unaffiliated with the trustee or originator of the
trust. An investor's

B-6

<PAGE>

return on CARSSM may be affected by early prepayment of principal on the
underlying vehicle sales contracts. If the letter of credit is exhausted, the
trust may be prevented from realizing the full amount due on a sales contract
because of state law requirements and restrictions relating to foreclosure sales
of vehicles and the obtaining of deficiency judgments following such sales or
because of depreciation, damage or loss of a vehicle, the application of federal
and state bankruptcy and insolvency laws or other factors. As a result,
certificate holders may experience delays in payments or losses if the letter of
credit is exhausted.

Consistent with the Portfolio's investment objective and policies, the
Sub-Adviser also may invest in other types of asset-backed securities.

BRADY BONDS

Dollar-denominated, collateralized Brady Bonds, which may be fixed rate
par bonds or floating rate discount bonds, are generally collateralized in full
as to principal due at maturity by U.S. Treasury zero coupon obligations which
have the same maturity as the Brady Bonds. Interest payments on these Brady
Bonds generally are collateralized by cash or securities in an amount that, in
the case of fixed rate bonds, is equal to at least one year of rolling interest
payments or, in the case of floating rate bonds, initially is equal to at least
one year's rolling interest payments based on the applicable interest rate at
the time and is adjusted at regular intervals thereafter. Certain Brady Bonds
are entitled to "value recovery payments" in certain circumstances, which in
effect constitute supplemental interest payments but generally are not
collateralized. Brady Bonds are often viewed as having three or four valuation
components: (i) the collateralized repayment of principal at final maturity,
(ii) the collateralized interest payments, (iii) the uncollateralized payments,
and (iv) any uncollateralized repayment of principal at maturity (these
uncollateralized amounts constitute the "residual risk"). In the event of a
default with respect to collateralized Brady Bonds as a result of which the
payment obligations of the issuer are accelerated, the U.S. Treasury zero coupon
obligations held as collateral for the payment of principal will not be
distributed to investors, nor will such obligations be sold and the proceeds
distributed. The collateral will be held by the collateral agent to the
scheduled maturity of the defaulted Brady Bonds, which will continue to be
outstanding, at which time the face amount of the collateral will equal the
principal payments which would have then been due on the Brady Bonds in the
normal course. In addition, in light of the residual risk of the Brady Bonds
and, among other factors, the history of default with respect to commercial bank
loans by public and private entities of countries issuing Brady Bonds,
investments in Brady Bonds are to be viewed as speculative.

Brady Plan debt restructurings totalling approximately $73 billion have
been implemented to date in Argentina, Costa Rica, Mexico, Nigeria, the
Philippines, Uruguay and Venezuela, with the largest proportion of Brady Bonds
having been issued to date by Mexico and Venezuela. Brazil has announced plans
to issue Brady Bonds aggregating approximately $35 billion, based on current
estimates. There can be no assurance that the circumstances regarding the
issuance of Brady Bonds by these countries will not change.

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<PAGE>

FOREIGN CURRENCY EXCHANGE-RELATED SECURITIES

FOREIGN CURRENCY WARRANTS. Foreign currency warrants such as Currency
Exchange Warrants SM ("CEWs"SM) are warrants which entitle the holder to receive
from their issuer an amount of cash (generally, for warrants issued in the
United States, in U.S. dollars) which is calculated pursuant to a predetermined
formula and based on the exchange rate between a specified foreign currency and
the U.S. dollar as of the exercise date of the warrant. Foreign currency
warrants generally are exercisable upon their issuance and expire as of a
specified date and time. Foreign currency warrants have been issued in
connection with U.S. dollar-denominated debt offerings by major corporate
issuers in an attempt to reduce the foreign currency exchange risk which, from
the point of view of prospective purchasers of the securities, is inherent in
the international fixed-income marketplace. Foreign currency warrants may
attempt to reduce the foreign exchange risk assumed by purchasers of a security
by, for example, providing for a supplemental payment in the event that the U.S.
dollar depreciates against the value of a major foreign currency such as the
Japanese yen or German deutsche mark. The formula used to determine the amount
payable upon exercise of a foreign currency warrant may make the warrant
worthless unless the applicable foreign currency exchange rate moves in a
particular direction (E.G., unless the U.S. dollar appreciates or depreciates
against the particular foreign currency to which the warrant is linked or
indexed). Foreign currency warrants are severable from the debt obligations with
which they may be offered and may be listed on exchanges. Foreign currency
warrants may be exercisable only in certain minimum amounts, and an investor
wishing to exercise warrants who possesses less than the minimum number required
for exercise may be required to either sell the warrants or to purchase
additional warrants, thereby incurring additional transaction costs. In the case
of any exercise of warrants, there may be a time delay between the time a holder
of warrants gives instructions to exercise and the time the exchange rate
relating to exercise is determined, during which time the exchange rate could
change significantly, thereby affecting both the market and cash settlement
values of the warrants being exercised. The expiration date of the warrants may
be accelerated if the warrants should be delisted from an exchange or if their
trading should be suspended permanently, which would result in the loss of any
remaining "time value" of the warrants (I.E., the difference between the current
market value and the exercise value of the warrants) and, in the case the
warrants were "out-of-the-money," in a total loss of the purchase price of the
warrants. Warrants are generally unaccrued obligations of their issuers and are
not standardized foreign currency options issued by the Options Clearing
Corporation (the "OCC"). Unlike foreign currency options issued by the OCC, the
terms of foreign exchange warrants generally will not be amended in the event of
governmental or regulatory actions affecting exchange rates or in the event of
the imposition of other regulatory controls affecting the international currency
markets. The initial public offering price of foreign currency warrants is
generally considerably in excess of the price that a commercial user of foreign
currencies might pay in the interbank market for a comparable option involving
significantly larger amounts of foreign currencies. Foreign currency warrants
are subject to complex political or economic factors.

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<PAGE>

PRINCIPAL EXCHANGE RATE LINKED SECURITIES. Principal exchange rate
linked securities ("PERLs"SM) are debt obligations the principal on which is
payable at maturity in an amount that may vary based on the exchange rate
between the U.S. dollar and a particular foreign currency at or about that time.
The return on "standard" PERLS is enhanced if the foreign currency to which the
security is linked appreciates against the U.S. dollar, and is adversely
affected by increases in the foreign exchange value of the U.S. dollar;
"reverse" PERLS are like the "standard" securities, except that their return is
enhanced by increases in the value of the U.S. dollar and adversely impacted by
increases in the value of foreign currency. Interest payments on the securities
are generally made in U.S. dollars at rates that reflect the degree of foreign
currency risk assumed or given up by the purchaser of the notes (I.E., at
relatively higher interest rates if the purchaser has assumed some of the
foreign exchange risk, or relatively lower interest rates if the issuer has
assumed some of the foreign exchange risk, based on the expectations of the
current market). PERLS may in limited cases be subject to acceleration of
maturity (generally, not without the consent of the holders of the securities),
which may have an adverse impact on the value of the principal payment to be
made at maturity.

PERFORMANCE INDEXED PAPER. Performance indexed paper ("PIPs"SM) is U.S.
dollar-denominated commercial paper the yield of which is linked to certain
foreign exchange rate movements. The yield to the investor on PIPs is
established at maturity as a function of the spot exchange rates between the
U.S. dollar and a designated currency as of or about that time (generally, the
index maturity two days prior to maturity). The yield to the investor will be
within a range stipulated at the time of purchase of the obligation, generally
with a guaranteed minimum rate of return that is below, and a potential maximum
rate of return that is above, market yields on U.S. dollar-denominated
commercial paper, with both the minimum and maximum rates of return on the
investment corresponding to the minimum and maximum values of the spot exchange
rate two business days prior to maturity. The Portfolio has no current intention
of investing in CEWsSM, PERLsSM or PIPsSM.

EURODOLLAR AND YANKEE OBLIGATIONS

Eurodollar bank obligations are dollar-denominated certificates of
deposit and time deposits issued outside the U.S. capital markets by foreign
branches of banks and by foreign banks. Yankee bank obligations are
dollar-denominated obligations issued in the U.S. capital markets by foreign
banks.

Eurodollar and Yankee obligations are subject to the same risks that
pertain to domestic issues, notably credit risk, market risk and liquidity risk.
Additionally, Eurodollar (and to a limited extent Yankee) obligations are
subject to certain sovereign risks. One such risk is the possibility that a
sovereign country might prevent capital, in the form of dollars, from flowing
across its borders. Other risks include: adverse political and economic
development, the extent and quality of government regulation of financial
markets and institutions, the imposition of foreign withholding taxes and the
expropriation or nationalization of foreign issuers.

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PORTFOLIO MANAGEMENT

The Sub-Adviser's investment strategy for achieving the Portfolio's
investment objective has two basic components: maturity and duration management
and value investing.

MATURITY AND DURATION MANAGEMENT. Maturity and duration management
decisions are made in the context of an intermediate maturity orientation. The
maturity structure of the Portfolio is adjusted in anticipation of cyclical
interest rate changes. Such adjustments are not made in an effort to capture
short-term, day-to-day movements in the market, but instead are implemented in
anticipation of longer term, secular shifts in the levels of interest rates
(I.E., shifts transcending and/or not inherent to the business cycle).
Adjustments made to shorten portfolio maturity and duration are made to limit
capital losses during periods when interest rates are expected to rise.
Conversely, adjustments made to lengthen maturity are intended to produce
capital appreciation in periods when interest rates are expected to fall. The
foundation for the Sub-Adviser's maturity and duration strategy lies in analysis
of the U.S. and global economies, focusing on levels of real interest rates,
monetary and fiscal policy actions, and cyclical indicators.

VALUE INVESTING. The second component of the Sub-Adviser's investment
strategy for the Portfolio is value investing, whereby the Sub-Adviser seeks to
identify undervalued sectors and securities through analysis of credit quality,
option characteristics and liquidity. Quantitative models are used in
conjunction with judgment and experience to evaluate and select securities with
embedded put or call options which are attractive on a risk- and option-adjusted
basis. Successful value investing will permit the portfolio to benefit from the
price appreciation of individual securities during periods when interest rates
are unchanged.

INVESTMENT RESTRICTIONS

The Portfolio Trust (with respect to the Portfolio) has adopted the
following investment restrictions which may not be changed without approval by
holders of a "majority of the outstanding voting securities" of the Portfolio,
which as used in this Part B means the vote of the lesser of (i) 67% or more of
the outstanding "voting securities" of the Portfolio present at a meeting, if
the holders of more than 50% of the outstanding "voting securities" are present
or represented by proxy, or (ii) more than 50% of the outstanding "voting
securities". The term "voting securities" as used in this paragraph has the same
meaning as in the Investment Company Act of 1940, as amended (the "1940 Act").

As a matter of fundamental policy, the Portfolio will not:

(1)invest in physical commodities or contracts on physical commodities;

(2) purchase or sell real estate, although it may purchase and sell
securities of companies which deal in real estate, other than real estate
limited partnerships, and may purchase and sell marketable securities which are
secured by interests in real estate;

B-10

<PAGE>

(3) make loans except: (i) by purchasing debt securities in accordance
with its investment objective and policies, or entering into repurchase
agreements, subject to the limitations described in (h) below; and (ii) by
lending its portfolio securities;

(4) with respect to 75% of its assets, purchase a security if, as a
result, it would hold more than 10% (taken at the time of such investment) of
the outstanding voting securities of any issuer;

(5) with respect to 75% of its assets, purchase securities of any
issuer if, as the result, more than 5% of the Portfolio's total assets, taken at
market value at the time of such investment, would be invested in the securities
of such issuer, except that this restriction does not apply to securities issued
or guaranteed by the U.S. Government or its agencies or instrumentalities;

(6) borrow money, except (i) as a temporary measure for extraordinary
or emergency purposes or (ii) in connection with reverse repurchase agreements
provided that (i) and (ii) in combination do not exceed 33 1/3% of the
Portfolio's total assets (including the amount borrowed) less liabilities
(exclusive of borrowings);

(7) underwrite the securities of other issuers (except to the extent
that the Portfolio may be deemed to be an underwriter within the meaning of the
1933 Act in the disposition of restricted securities);

(8) acquire any securities of companies within one industry, except for
mortgage-backed securities, if as a result of such acquisition, more than 25% of
the value of the Portfolio's total assets would be invested in securities of
companies within such industry; provided, however, that there shall be no
limitation on the purchase of obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities, when the Portfolio adopts a
temporary defensive position.

The Portfolio is also subject to the following restrictions which may
be changed by the Board of Trustees without investor approval.

As a matter of non-fundamental policy, the Portfolio will not:

(a) borrow money (including through reverse repurchase agreements or
forward roll transactions involving mortgage-backed securities or similar
investment techniques entered into for leveraging purposes), except that the
Portfolio may borrow for temporary or emergency purposes up to 10% of its net
assets; provided, however, that the Portfolio may not purchase any security
while outstanding borrowings exceed 5%;

(b) invest in futures and/or options on futures to the extent that its
outstanding obligations to purchase securities under any future contracts in
combination with its

B-11

<PAGE>

outstanding obligations with respect to options transactions would
exceed 35% of its total assets;

(d) invest in warrants, valued at the lower of cost or market, in
excess of 5% of the value of its total assets (included within that amount, but
not to exceed 2% of the value of the Portfolio's net assets, may be warrants
that are not listed on the New York Stock Exchange, the American Stock Exchange
or an exchange with comparable listing requirements; warrants attached to
securities are not subject to this limitation);

(e) purchase on margin, except for use of short-term credit as may be
necessary for the clearance of purchases and sales of securities, but it may
make margin deposits in connection with transactions in options, futures, and
options on futures; or sell short unless, by virtue of its ownership of other
securities, it has the right to obtain securities equivalent in kind and amount
to the securities sold and, if the right is conditional, the sale is made upon
the same conditions (transactions in futures contracts and options are not
deemed to constitute selling securities short);

(f) purchase or retain securities of an issuer if those officers and
Trustees of the Portfolio or the Manager or Sub-Adviser owning more than 1/2 of
1% of such securities together own more than 5% of such securities;

(g) pledge, mortgage or hypothecate any of its assets to an extent
greater than 33 1/3% of its total assets at fair market value;

(h) invest more than an aggregate of 15% of the net assets of the
Portfolio, determined at the time of investment, in securities that are illiquid
because their disposition is restricted under the federal securities laws or
securities for which there is no readily available markets; provided, however,
that this policy does not limit the acquisition of (i) securities that have
legal or contractual restrictions on resale but have a readily available market
or (ii) securities that are not registered under the 1933 Act, but which can be
sold to qualified institutional investors in accordance with Rule 144A under the
1933 Act and which are deemed to be liquid pursuant to guidelines adopted by the
Board of Trustees ("Restricted Securities");

(i) invest more than 10% of its assets in Restricted Securities
(including Rule 144A Securities);

(j) invest for the purpose of exercising control over management of any
company;

(k) invest its assets in securities of any investment company, except
by purchase in the open market involving only customary brokers' commissions or
in connection with mergers, acquisitions of assets or consolidations and except
as may otherwise be permitted

B-12

<PAGE>

by the 1940 Act; provided, however, that the Portfolio shall not invest in the
shares of any open-end investment company unless (1) the Portfolio's Adviser
waives any investment advisory fees with respect to such assets and (2) the
Portfolio pays no sales charge in connection with the investment;

(l) invest more than 5% of its total assets in securities of issuers
(other than securities issued or guaranteed by U.S. or foreign government or
political subdivisions thereof) which have (with predecessors) a record of less
than three years' continuous operations;

(m) write or acquire options or interests in oil, gas or other mineral
explorations or development programs or leases.

PERCENTAGE AND RATING RESTRICTIONS

If a percentage restriction or a rating restriction on investment or
utilization of assets set forth above or referred to in Part A is adhered to at
the time an investment is made or assets are so utilized, a later change in
percentage resulting from changes in the value of the securities held by the
Portfolio or a later change in the rating of a security held by the Portfolio is
not considered a violation of policy; however, the Sub-Adviser will consider
such change in its determination of whether to hold the security.

ITEM 14. MANAGEMENT OF THE PORTFOLIO TRUST.

TRUSTEES AND OFFICERS

The principal occupations of the Trustees and executive officers of the
Portfolio Trust for the past five years are listed below. Asterisks indicate
that those Trustees and officers who are "interested persons" (as defined in the
1940 Act) of the Portfolio Trust. The address of each, unless otherwise
indicated, is 6 St. James Avenue, Boston, Massachusetts 02116.

FREDERICK C. CHEN, TRUSTEE, 126 Butternut Hollow Road, Greenwich, Connecticut
06830 - Management Consultant.

ALAN S. PARSOW*, TRUSTEE, 2222 Skyline Drive, Elkhorn, Nebraska 68022 - General
Partner of Parsow Partnership, Ltd. (investments).

LARRY M. ROBBINS, TRUSTEE, Wharton Communication Program, University of
Pennsylvania, 336 Steinberg Hall-Dietrich Hall, Philadelphia, Pennsylvania 19104
- - Director of the Wharton Communication Program and Adjunct Professor of
Management at the Wharton School of the University of Pennsylvania.

B-13

<PAGE>

MICHAEL SEELY, TRUSTEE, 405 Lexington Avenue, Suite 909, New York, New York
10174 - President of Investor Access Corporation (investor relations consulting
firm).

PHILIP W. COOLIDGE*, PRESIDENT, Chairman and Chief Executive Officer, Signature
Financial Group, Inc. ("SFG"); Chairman and Chief Executive Officer, Signature
Broker- Dealer Services ("SBDS") (since April, 1989); Director, Signature
(Cayman) (since March, 1992); Chairman, Chief Executive Officer and President,
Signature (since May, 1993).

JOHN R. ELDER*, TREASURER, Vice President, SFG (since April, 1995); Treasurer,
Phoenix Family of Mutual Funds (prior to April 1995).

LINDA T. GIBSON*, ASSISTANT SECRETARY, Legal Counsel and Assistant Secretary,
SFG (since June, 1991); Assistant Secretary, SBDS (since October, 1992);
Assistant Secretary, Signature (since May, 1993); law student, Boston University
School of Law (prior to May, 1992).

JAMES E. HOOLAHAN*, VICE PRESIDENT, Senior Vice President, SFG (since December,
1989).

SUSAN JAKUBOSKI*, ASSISTANT SECRETARY AND ASSISTANT TREASURER, P.O. Box 2494,
Elizabethan Square, George Town, Grand Cayman, Cayman Islands, B.W.I. - Vice
President, Assistant Secretary and Assistant Treasurer; Manager and Senior Fund
Administrator, SFG and Signature (Cayman) (since August 1994); Assistant
Treasurer, SBDS (since September 1994); Fund Compliance Administrator, Concord
Financial Group, Inc. (from November 1990 to August 1994); Senior Fund
Accountant, Neuberger & Berman Management Incorporated (from February 1988 to
November 1990).

THOMAS M. LENZ*, SECRETARY, Senior Vice President and Associate General Counsel,
SFG (since November, 1989); Assistant Secretary, SBDS (since February, 1991);
Assistant Secretary, Signature (since May, 1993).

MOLLY S. MUGLER*, ASSISTANT SECRETARY, Legal Counsel and Assistant Secretary,
SFG; Assistant Secretary, SBDS (since April, 1989); Assistant Secretary,
Signature (since May, 1993).

BARBARA M. O'DETTE*, ASSISTANT TREASURER, Assistant Treasurer, SFG; Assistant
Treasurer, SBDS (since April, 1989); Assistant Treasurer, Signature (since May,
1993).

ANDRES E. SALDANA*, ASSISTANT SECRETARY, Legal Counsel and Assistant Secretary,
SFG (since November, 1992); Assistant Secretary, SBDS (since September, 1993);
Assistant Secretary, Signature (since May 1993); Attorney, Ropes & Gray
(September, 1990 to November, 1992).

B-14

<PAGE>

Messrs. Coolidge, Elder, Lenz and Saldana and Mss. Gibson, Jakuboski,
Mugler and O'Dette are also Trustees and/or officers of certain other investment
companies of which Signature (Cayman) or an affiliate is the administrator.

COMPENSATION TABLE
<TABLE>
<CAPTION>
Pension or
Retirement Total
Benefits Estimated Compensation
Aggregate Accrued as Part Annual From Fund
Name of Compensation of Portfolio Benefits Upon Complex Paid
TRUSTEE FROM PORTFOLIO EXPENSES RETIREMENT TO TRUSTEES
<S> <C> <C> <C> <C>
Frederick C. Chen $777 none none $5,650

Alan S. Parsow $777 none none $5,650

Larry M. Robbins $777 none none $5,650

Michael Seely $777 none none $5,050
</TABLE>
<PAGE>

The compensation table above reflects the fees received by the Trustees
from the Portfolio for the period from January 9, 1995 (commencement of
operations) to October 31, 1995. The Trustees who are not "interested persons"
(as defined in the 1940 Act) of the Portfolio will receive an annual retainer of
$3,600 and a fee of $1,000 (effective November 1, 1995) for each meeting of the
Board of Trustees or committee thereof attended.

The Portfolio Trust's Declaration of Trust provides that it will
indemnify its Trustees and officers against liabilities and expenses incurred in
connection with litigation in which they may be involved because of their
officers with the Portfolio Trust, unless, as to liability to the Portfolio
Trust or its investors, it is finally adjudicated that they engaged in wilful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in their offices, or unless with respect to any other matter it is
finally adjudicated that they did not act in good faith in the reasonable belief
that their actions were in the best interests of the Portfolio Trust. In the
case of settlement, such indemnification will not be provided unless it has been
determined by a court or other body approving the settlement or other
disposition, or by a reasonable determination, based upon a review of readily
available facts, by vote of a majority of disinterested Trustees or in a written
opinion of independent counsel, that such officers or Trustees have not engaged
in wilful misfeasance, bad faith, gross negligence or reckless disregard of
their duties.

Moreover, Republic, its officers and employees do not express any
opinion with respect to the advisability of any purchase of such securities.

As of February 20, 1996, the Trustees and officers of the Portfolio
Trust, as a group, owned less than 1% of the outstanding shares of the
Portfolio.

ITEM 15. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES.

As of February 20, 1996, Republic Fixed Income Fund owned 73% and
Republic Fixed Income Fund Ltd. owned 27% of the aggregate outstanding interests
in the Portfolio. A holder who controls more than 25% of the outstanding
beneficial interests in the Portfolio may take actions without the approval of
other holders of beneficial interests in the Portfolio.

ITEM 16. INVESTMENT ADVISORY AND OTHER SERVICES.

INVESTMENT MANAGER

Republic is the investment manager to the Portfolio pursuant to an
investment management agreement (the "Investment Management Contract") with the
Portfolio Trust. For its services, the investment manager receives no
compensation from the Portfolio.

The Investment Management Contract will remain in effect until November
21, 1996, and will continue in effect thereafter from year to year with respect
to the Portfolio, provided such continuance is approved annually (i) by the
holders of a majority of the outstanding voting securities of the Portfolio or
by the Portfolio Trust's Board of Trustees, and (ii) by a majority of the
Trustees of the Portfolio Trust who are not parties to such Agreement or
"interested persons" (as defined in the 1940 Act) of any such party. The
Agreement may be terminated with respect to the Portfolio without penalty by
either party on 60 days' written notice and will terminate automatically if
assigned.

B-15

<PAGE>

Republic is a wholly-owned subsidiary of Republic New York Corporation,
a registered bank holding company. No securities or instruments issued by
Republic New York Corporation or Republic will be purchased for the Portfolio.

Republic complies with applicable laws and regulations, including the
regulations and rulings of the U.S. Comptroller of the Currency relating to
fiduciary powers of national banks. These regulations provide, in general, that
assets managed by a national bank as fiduciary shall not be invested in stock or
obligations of, or property acquired from, the bank, its affiliates or their
directors, officers or employees or other persons with substantial connections
with the bank. The regulations further provide that fiduciary assets shall not
be sold or transferred, by loan or otherwise, to the bank or persons connected
with the bank as described above. Republic, in accordance with federal banking
laws, may not purchase for its own account securities of any investment company
the investment adviser of which it controls, extend credit to any such
investment company, or accept the securities of any such investment company as
collateral for a loan to purchase such securities. Moreover, Republic, its
officers and employees do not express any opinion with respect to the
advisability of any purchase of such securities.

The investment advisory services of Republic to the Portfolio are not
exclusive under the terms of the Investment Management Contract. Republic is
free to and does render investment advisory services to others.

SUB-ADVISER

Pursuant to a sub-advisory agreement with Republic (the "Sub-advisory
Agreement"), MAS, as the Portfolio's Sub-Adviser, is responsible for the
investment management of the Portfolio's assets, including making investment
decisions and placing orders for the purchase and sale of securities for the
Portfolio directly with the issuers or with brokers or dealers selected by MAS
or Republic in its discretion. See Item 17. MAS also furnishes to the Board of
Trustees of the Portfolio Trust, which has overall responsibility for the
business and affairs of the Portfolio Trust, periodic reports on the investment
performance of the Portfolio.

For its services, MAS receives from the Portfolio a fee, computed daily
and based on the Portfolio's average daily net assets, equal on an annual basis
to 0.375% on net assets up to $50 million, 0.25% on net assets over $50 million
and up to $95 million, $300,000 on net assets over $95 million and up to $150
million, 0.20% on net assets over $150 million and up to $250 million, and 0.15%
on net assets over $250 million. For the period from January 9, 1995
(commencement of operations) to October 31, 1995, sub- advisory fees aggregated
$53,963.

The investment advisory services of MAS to the Portfolio are not
exclusive under the terms of the Sub-Advisory Agreement. MAS is free to and does
render investment advisory services to others.

B-16

<PAGE>

ADMINISTRATOR

The Administrative Services Agreement is terminable with respect to the
Portfolio without penalty at any time by vote of a majority of the Trustees, or
by Signature (Cayman), upon not less than 60 days' written notice to the
Portfolio Trust. The Agreement provides that neither the Administrator nor its
personnel shall be liable for any error of judgment or mistake of law or for any
act or omission in the administration of the Portfolio, except for willful
misfeasance, bad faith or gross negligence in the performance of its or their
duties or by reason of reckless disregard of its or their obligations and duties
under the Administrative Services Agreement. For the period from January 9, 1995
(commencement of operations) to October 31, 1995, administrative fees aggregated
$7,195.

FUND ACCOUNTING AGENT

Pursuant to a fund accounting agreement, Signature serves as fund
accounting agent to the Portfolio. For its services to the Portfolio, Signature
receives fees payable monthly equal on an annual basis to $40,000. For the
period from January 9, 1995 (commencement of operations) to October 31, 1995,
fund accounting fees aggregated $32,438, of which $10,115 was waived.

EXPENSES

Republic and Signature have voluntarily agreed to waive a portion of
their fees, and to the extent necessary, reimburse the Portfolio for additional
expenses during the period January 9, 1995 through October 31, 1995. For the
period ended October 31, 1995, expenses of the Portfolio were voluntarily
limited to no more than 0.46% of average daily net assets on an annualized
basis. For the period ended October 31, 1995, Republic and Signature waived fees
and reimbursed expenses aggregating $77,292.

CUSTODIAN AND TRANSFER AGENT

Investors Bank & Trust Company ("IBT") serves as custodian and transfer
agent for the Portfolio pursuant to a custodian agreement and a transfer agency
agreement, respectively. The Custodian may use the services of sub-custodians
with respect to the Portfolio.

INDEPENDENT AUDITORS

For the fiscal year ended October 31, 1995 Ernst & Young, One Capital
Place, George Town, Grand Cayman, Cayman Islands, served as independent auditors
of the Portfolio.

B-17

<PAGE>

The Portfolio has appointed KPMG Peat Marwick, Grand Cayman, Cayman
Islands as its independent accountant for the fiscal year ended October 31,
1996, who will audit its financial statements.

COUNSEL

Dechert Price & Rhoads, 1500 K Street, N.W., Washington, D.C. 20005,
acts as counsel to the Portfolio Trust.

ITEM 17. BROKERAGE ALLOCATION AND OTHER PRACTICES.

The Sub-Adviser is primarily responsible for portfolio decisions and
the placing of portfolio transactions. In placing orders for the Portfolio, the
primary consideration is prompt execution of orders in an effective manner at
the most favorable price, although the Portfolio does not necessarily pay the
lowest spread or commission available. Other factors taken into consideration
are the dealer's general execution and operational facilities, the type of
transaction involved and other factors such as the dealer's risk in positioning
the securities. To the extent consistent with applicable legal requirements, the
Sub-Adviser may place orders for the purchase and sale of portfolio investments
for the Portfolio with Republic New York Securities Corporation.

As permitted by Section 28(e) of the Securities Exchange Act of 1934
(the "1934 Act"), the Sub-Adviser may cause the Portfolio to pay a broker-dealer
which provides "brokerage and research services" (as defined in the 1934 Act) to
the Sub-Adviser an amount of commission for effecting a securities transaction
for the Portfolio in excess of the commission which another broker-dealer would
have charged for effecting that transaction.

Investment decisions for the Portfolio and for the other investment
advisory clients of the Sub-Adviser are made with a view to achieving their
respective investment objectives. Investment decisions are the product of many
factors in addition to basic suitability for the particular client involved.
Thus, a particular security may be bought for certain clients even though it
could have been sold for other clients at the same time, and a particular
security may be sold for certain clients even though it could have been bought
for other clients at the same time. Likewise, a particular security may be
bought for one or more clients when one or more other clients are selling that
same security. In some instances, one client may sell a particular security to
another client. Two or more clients may simultaneously purchase or sell the same
security, in which event each day's transactions in that security are, insofar
as practicable, averaged as to price and allocated between such clients in a
manner which in the Sub-Adviser's opinion is equitable to each and in accordance
with the amount being purchased or sold by each. In addition, when purchases or
sales of the same security for the Portfolio and for other clients of the Sub-
Adviser occur contemporaneously, the purchase or sale orders may be aggregated
in

B-18

<PAGE>

order to obtain any price advantage available to large denomination purchases or
sales. There may be circumstances when purchases or sales of portfolio
securities for one or more clients will have an adverse effect on other clients
in terms of the price paid or received or of the size of the position
obtainable.

Because the Portfolio invests primarily in fixed-income securities, it
is anticipated that most purchases and sales will be with the issuer or with
underwriters of or dealers in those securities, acting as principal.
Accordingly, the Portfolio would not ordinarily pay significant brokerage
commissions with respect to securities transactions.

ITEM 18. CAPITAL STOCK AND OTHER SECURITIES.

The Portfolio is a series of Republic Portfolios (the "Portfolio
Trust"), which is organized as a trust under the laws of the State of New York.
Under the Portfolio Trust' Declaration of Trust, the Trustees are authorized to
issue beneficial interests in one or more series (each a "Series"), including
the Portfolio. Investors in a Series will be held personally liable for the
obligations and liabilities of that Series (and of no other Series), subject,
however, to indemnification by the Portfolio Trust in the event that there is
imposed upon an investor a greater portion of the liabilities and obligations of
the Series than its proportionate beneficial interest in the Series. The
Declaration of Trust also provides that the Portfolio Trust shall maintain
appropriate insurance (for example, a fidelity bond and errors and omissions
insurance) for the protection of the Portfolio Trust, its investors, Trustees,
officers, employees and agents, and covering possible tort and other
liabilities. Thus, the risk of an investor incurring financial loss on account
of investor liability is limited to circumstances in which both inadequate
insurance existed and the Portfolio Trust itself was unable to meet its
obligations.

Investors in a Series are entitled to participate pro rata in
distributions of taxable income, loss, gain and credit of their respective
Series only. Upon liquidation or dissolution of a Series, investors are entitled
to share pro rata in that Series' (and no other Series) net assets available for
distribution to its investors. The Portfolio Trust reserves the right to create
and issue additional Series of beneficial interests, in which case the
beneficial interests in each new Series would participate equally in the
earnings, dividends and assets of that particular Series only (and no other
Series). Any property of the Portfolio Trust is allocated and belongs to a
specific Series to the exclusion of all other Series. All consideration received
by the Portfolio Trust for the issuance and sale of beneficial interests in a
particular Series, together with all assets in which such consideration is
invested or reinvested, all income, earnings and proceeds thereof, and any funds
or payments derived from any reinvestment of such proceeds, is held by the
Trustees in a separate subtrust (a Series) for the benefit of investors in that
Series and irrevocably belongs to that series for all purposes. Neither a Series
nor investors in that Series possess any right to or interest in the assets
belonging to any other Series.

B-19

<PAGE>

Investments in a Series have no preference, preemptive, conversion or
similar rights and are fully paid and nonassessable, except as set forth below.
Investments in a Series may not be transferred. Certificates representing an
investor's beneficial interest in a Series are issued only upon the written
request of an investor.

Each investor is entitled to a vote in proportion to the amount of its
investment in each Series. Investors in a Series do not have cumulative voting
rights, and investors holding more than 50% of the aggregate beneficial
interests in all outstanding Series may elect all of the Trustees if they choose
to do so and in such event other investors would not be able to elect any
Trustees. Investors in each Series will vote as a separate class except as to
voting of Trustees, as otherwise required by the 1940 Act, or if determined by
the Trustees to be a matter which affects all Series. As to any matter which
does not affect the interest of a particular Series, only investors in the one
or more affected Series are entitled to vote. The Portfolio Trust is not
required and has no current intention of holding annual meetings of investors,
but the Portfolio Trust will hold special meetings of investors when in the
judgment of the Portfolio Trust' Trustees it is necessary or desirable to submit
matters for an investor vote. The Portfolio Trust' Declaration of Trust may be
amended without the vote of investors, except that investors have the right to
approve by affirmative majority vote any amendment which would affect their
voting rights, alter the procedures to amend the Declaration of Trust of the
Portfolio Trust, or as required by law or by the Portfolio Trust' registration
statement, or as submitted to them by the Trustees. Any amendment submitted to
investors which the Trustees determine would affect the investors of any Series
shall be authorized by vote of the investors of such Series and no vote will be
required of investors in a Series not affected.

The Portfolio Trust or any Series (including the Portfolio) may enter
into a merger or consolidation, or sell all or substantially all of its assets,
if approved (a) at a meeting of investors by investors representing the lesser
of (i) 67% or more of the beneficial interests in the affected Series present of
represented at such meeting, if investors in more than 50% of all such
beneficial interests are present or represented by proxy, or (ii) more than 50%
of all such beneficial interests, or (b) by an instrument in writing without a
meeting, consented to by investors representing not less than a majority of the
beneficial interests in the affected Series. The Portfolio Trust or any Series
(including the Portfolio) may also be terminated (i) upon liquidation and
distribution of its assets if approved by the vote of two thirds of its
investors (with the vote of each being in proportion to the amount of its
investment), (ii) by the Trustees by written notice to its investors, or (iii)
upon the bankruptcy or expulsion of an investor in the affected Series, unless
the investors in such Series, by majority vote, agree to continue the Series.
The Portfolio Trust will be dissolved upon the dissolution of the last remaining
Series.

B-20

<PAGE>

nothing in the Declaration of Trust protects a Trustee against any liability to
which he would otherwise be subject by reason of wilful misfeasance, bad faith,
gross negligence, or reckless disregard of the duties involved in the conduct of
his office.

The Portfolio Trust' Declaration of Trust further provides that it will
indemnify its Trustees and officers against liabilities and expenses incurred in
connection with litigation in which they may be involved because of their
offices with the Portfolio Trust, unless, as to liability to the Portfolio Trust
or its investors, it is finally adjudicated that they engaged in wilful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in their offices, or unless with respect to any other matter it is
finally adjudicated that they did not act in good faith in the reasonable belief
that their actions were in the best interests of the Portfolio Trust. In the
case of settlement, such indemnification will not be provided unless it has been
determined by a court or other body approving the settlement or other
disposition, or by a reasonable determination, based upon a review of readily
available facts, by vote of a majority of disinterested Trustees or in a written
opinion of independent counsel, that such officers or Trustees have not engaged
in wilful misfeasance, bad faith, gross negligence or reckless disregard of
their duties.

ITEM 19. PURCHASE, REDEMPTION AND PRICING OF SECURITIES.

Beneficial interests in the Portfolio are issued solely in private
placement transactions that do not involve any "public offering" within the
meaning of Section 4(2) of the 1933 Act. See Item 4 in Part A of this
Registration Statement.

An investor in the Portfolio may add to or reduce its investment in the
Portfolio on each Portfolio Business Day. As of the Valuation Time on each such
day, the value of each investor's beneficial interest in the Portfolio will be
determined by multiplying the net asset value of the Portfolio by the
percentage, effective for that day, which represents that investor's share of
the aggregate beneficial interests in the Portfolio. Any additions or reductions
which are to be effected on that day will then be effected. The investor's
percentage of the aggregate beneficial interests in the Portfolio will then be
recomputed as the percentage equal to the fraction (i) the numerator of which is
the value of such investor's investment in the Portfolio as of the Valuation
Time on such day plus or minus, as the case may be, the amount of net additions
to or reductions in the investor's investment in the Portfolio effected as of
the Valuation Time, and (ii) the denominator of which is the aggregate net asset
value of the Portfolio as of the Valuation Time on such day, plus or minus, as
the case may be, the amount of net additions to or reductions in the aggregate
investments in the Portfolio by all investors in the Portfolio. The percentage
so determined will then be applied to determine the value of the investor's
interest in the Portfolio as of the Valuation Time on the following Portfolio
Business Day.

Bonds and other fixed-income securities listed on a foreign exchange
are valued at the latest quoted sales price available before the time when
assets are valued. For

B-21

<PAGE>

purposes of determining the Portfolio's net asset value, all assets and
liabilities initially expressed in foreign currencies will be converted into
U.S. dollars at the bid price of such currencies against U.S. dollars last
quoted by any major bank.

Bonds and other fixed-income securities which are traded
over-the-counter and on a stock exchange will be valued according to the
broadest and most representative market, and it is expected that for bonds and
other fixed-income securities this ordinarily will be the over-the-counter
market. Bonds and other fixed income securities (other than short-term
obligations but including listed issues) in the Portfolio's portfolio may be
valued on the basis of valuations furnished by a pricing service, use of which
has been approved by the Board of Trustees of the Portfolio Trust. In making
such valuations, the pricing service utilizes both dealer-supplied valuations
and electronic data processing techniques which take into account appropriate
factors such as institutional-size trading in similar groups of securities,
yield, quality, coupon rate, maturity, type of issue, trading characteristics
and other market data, without exclusive reliance upon quoted prices or exchange
or over-the-counter prices, since such valuations are believed to reflect more
accurately the fair value of such securities. Short-term obligations are valued
at amortized cost, which constitutes fair value as determined by the Board of
Trustees of the Portfolio Trust. Futures contracts are normally valued at the
settlement price on the exchange on which they are traded. Portfolio securities
(other than short-term obligations) for which there are no such valuations are
valued at fair value as determined in good faith under the direction of the
Board of Trustees of the Portfolio Trust.

Interest income on long-term obligations in the Portfolio's portfolio
is determined on the basis of interest accrued plus amortization of "original
issue discount" (generally, the difference between issue price and stated
redemption price at maturity) and premiums (generally, the excess of purchase
price over stated redemption price at maturity). Interest income on short-term
obligations is determined on the basis of interest accrued plus amortization of
premium.

Subject to the Portfolio Trust's compliance with applicable
regulations, the Portfolio Trust has reserved the right to pay the withdrawal
price of beneficial interests in the Portfolio, either totally or partially, by
a distribution in kind of portfolio securities (instead of cash). The securities
so distributed would be valued at the same amount as that assigned to them in
calculating the net asset value for the beneficial interest being sold. If an
investor received a distribution in kind, the investor could incur brokerage or
other charges in converting the securities to cash.

ITEM 20. TAX STATUS.

B-22

<PAGE>

Portfolio's ordinary income and capital gain in determining its income tax
liability. The determination of such share will be made in accordance with the
Code, and regulations promulgated thereunder.

Each year, in order for investors that are registered investment
companies ("Funds") to qualify as a "regulated investment company" ("RIC") under
the Code, at least 90% of the Fund's investment company taxable income (which
includes, among other items, interest, dividends and the excess of net
short-term capital gains over net long-term capital losses) must be distributed
to Fund shareholders and the Portfolio must meet certain diversification of
assets, source of income, and other requirements. If the Portfolio does not so
qualify, a Fund will be taxed as an ordinary corporation.

The Portfolio Trust intends to apply to the Internal Revenue Service
for rulings, including, among others, rulings to the effect that (1) the
Portfolio will be treated for federal income tax purposes as a partnership and
(2) for purposes of determining whether each Fund satisfies the income and
diversification requirements to maintain its status as a RIC, each Fund, as an
investor in the Portfolio, will be deemed to own a proportionate share of the
Portfolio's income attributable to that share. While the IRS has issued
substantially similar rulings in the past, and Signature (Cayman) anticipates
that the Portfolio Trust will receive the rulings it seeks, the IRS has complete
discretion in granting rulings and complete assurance cannot be given that such
rulings will be obtained. The Portfolio Trust has advised Fund investors that it
intends to conduct the Portfolio's operations so as to enable the Fund to
satisfy those requirements.

The Portfolio, since it is taxed as a partnership, is not subject to
federal income taxation. Instead, an investor must take into account, in
computing its federal income tax liability, its share of the Portfolio's income,
gains, losses, deductions, credits and tax preference items, without regard to
whether it has received any cash distributions from the Portfolio.

Withdrawals by investors from the Portfolio generally will not result
in their recognizing any gain or loss for federal income tax purposes, except
that (1) gain will be recognized to the extent that any cash distributed exceeds
the basis of the investor's interest in the Portfolio prior to the distribution,
(2) income or gain will be realized if the withdrawal is in liquidation of the
investor's entire interest in the Portfolio and includes a disproportionate
share of any unrealized receivables held by the Portfolio, and (3) loss will be
recognized if the distribution is in liquidation of that entire interest and
consists solely of cash and/or unrealized receivables. The basis of an
investor's interest in the Portfolio generally equals the amount of cash and the
basis of any property that the investor invests in the Portfolio, increased by
the investor's share of income from the Portfolio and decreased by the amount of
any cash distributions and the basis of any property distributed from the
Portfolio.

B-23

<PAGE>

There are certain tax issues that will be relevant to only certain of
the investors, specifically investors that are segregated asset accounts and
investors who contribute assets rather than cash to the Portfolio. It is
intended that such segregated asset accounts will be able to satisfy
diversification requirements applicable to them and that such contributions of
assets will not be taxable provided certain requirements are met. Such investors
are advised to consult their own tax advisors as to the tax consequences of an
investment in the Portfolio.

If the Portfolio is the holder of record of any stock on the record
date for any dividends payable with respect to such stock, such dividends are
included in the Portfolio's gross income not as of the date received but as of
the later of (a) the date such stock became ex-dividend with respect to such
dividends (I.E., the date on which a buyer of the stock would not be entitled to
receive the declared, but unpaid, dividends) or (b) the date the Portfolio
acquired such stock. Accordingly, in order to satisfy its income distribution
requirements, investors may be required to pay dividends based on anticipated
earnings.

Some of the debt securities that may be acquired by the Portfolio may
be treated as debt securities that are originally issued at a discount. Original
issue discount can generally be defined as the difference between the price at
which a security was issued and its stated redemption price at maturity.
Although no cash income is actually received by the Portfolio, original issue
discount on a taxable debt security earned in a given year generally is treated
for federal income tax purposes as interest and, therefore, such income would be
subject to the distribution requirements of the Code.

Some of the debt securities may be purchased by the Portfolio at a
discount which exceeds the original issue discount on such debt securities, if
any. This additional discount represents market discount for federal income tax
purposes. Generally, the gain realized on the disposition of any debt security
acquired by the Portfolio will be treated as ordinary income to the extent it
does not exceed the accrued market discount on such debt security.

Under certain circumstances, investors may be taxed on income deemed to
be earned from certain CMO residuals.

OPTIONS, FUTURES, FORWARD CONTRACTS AND SWAP CONTRACTS

Some of the options, futures contracts, forward contracts and swap
contracts entered into by the Portfolio may be "Section 1256 contracts." Section
1256 contracts held by the Portfolio at the end of its taxable year (and, for
purposes of the 4% excise tax, on certain other dates as prescribed under the
Code) are "marked-to-market" with unrealized gains or losses being treated as
though they were realized. Any gains or losses, including "marked-to-market"
gains or losses, on Section 1256 contracts are generally 60% long-term and 40%
short-term capital gains or losses ("60/40") although all

B-24

<PAGE>

foreign currency gains and losses from such contracts may be treated as ordinary
in character absent a special election.

Generally, hedging transactions and certain other transactions in
options, futures, forward contracts and swap contracts undertaken by the
Portfolio may result in "straddles" for U.S. federal income tax purposes. The
straddle rules may affect the character of gain or loss realized by the
Portfolio. In addition, losses realized by the Portfolio on positions that are
part of a straddle may be deferred under the straddle rules, rather than being
taken into account in calculating the taxable income for the taxable year in
which such losses are realized. Because only a few regulations implementing the
straddle rules have been promulgated, the tax consequences of transactions in
options, futures, forward contracts and swap contracts to the Portfolio are not
entirely clear. The transactions may increase the amount of short-term capital
gain realized by the Portfolio.

The Portfolio may make one or more of the elections available under the
Code which are applicable to straddles. If the Portfolio makes any of the
elections, the amount, character and timing of the recognition of gains or
losses from the affected straddle positions will be determined under rules that
vary according to the elections made. The rules applicable under certain of the
elections operate to accelerate the recognition of gains or losses from the
affected straddle positions.

The 30% limit on gains from the disposition of certain options,
futures, forward contracts and swap contracts held less than three months, and
the qualifying income and diversification requirements applicable to the
Portfolio assets, may limit the extent to which the Portfolio will be able to
engage in these transactions.

Rules governing the tax aspects of swap contracts are in a developing
stage and are not entirely clear in certain respects. Accordingly, while an
investor intends to account for such transactions in a manner deemed to be
appropriate, the Internal Revenue Service might not necessarily accept such
treatment. If it does not, the status of the investor as a regulated investment
company might be affected. Certain requirements that must be met under the Code
in order for the Fund to qualify as a regulated investment company may limit the
extent to which the Fund will be able to engage in swap agreements.

Under the Code, gains or losses attributable to fluctuations in
exchange rates that occur between the time the Portfolio accrues income or other
receivables or accrues expenses or other liabilities denominated in a foreign
currency and the time the Portfolio actually collects such receivables or pays
such liabilities generally are treated as ordinary income or loss. Similarly, in
disposing of debt securities denominated in foreign currencies and certain other
foreign currency contracts, gains or losses attributable to fluctuations in the
value of a foreign currency between the date the security or contract is
acquired and the date it is disposed of are also usually treated as ordinary
income or loss.

B-25

<PAGE>

Under Section 988 of the Code, these gains or losses may increase or decrease
the amount of a Fund's investment company taxable income to be distributed to
shareholders as ordinary income.

Earnings derived by the Portfolio from sources outside the U.S. may be
subject to non-U.S. withholding and possibly other taxes. Such taxes may be
reduced or eliminated under the terms of a U.S. income tax treaty and the
Portfolio would undertake any procedural steps required to claim the benefits of
such a treaty. With respect to any non-U.S. taxes actually paid by the
Portfolio, if more than 50% in value of the Portfolio's total assets at the
close of any taxable year consists of securities of foreign corporations, a Fund
will elect to treat its share of any non-U.S. income and similar taxes the
Portfolio pays as though the taxes were paid by the Fund's shareholders.

The information above is only a summary of some of the tax
considerations affecting the Portfolio and its investors. Income and capital
gain allocated by the Portfolio, the Fund, and the Fund's distributions may also
be subject to state, local, foreign or other taxes not discussed above. A
prospective investor may wish to consult a tax advisor to determine the
suitability of an investment in the Portfolio based on the prospective
investor's tax situation.

ITEM 21. UNDERWRITERS.

The exclusive placement agent of the Portfolio Trust is Signature
(Cayman), which receives no additional compensation for serving in this
capacity. Other investment companies, insurance company separate accounts,
common and commingled trust funds and similar organizations and entities may
continuously invest in the Portfolio.

ITEM 22. CALCULATIONS OF PERFORMANCE DATA.

Not applicable.

ITEM 23. FINANCIAL STATEMENTS.

The financial statements included in Republic Portfolios' current
report to Investors filed with the SEC pursuant to Section 30(b) of the 1940 Act
and Rule 30b2-1 thereunder are hereby incorporated herein by reference.

FT4177A

B-26
<PAGE>
FT4176A

PART B
INTERNATIONAL EQUITY PORTFOLIO

ITEM 10. COVER PAGE.

Not applicable.

ITEM 11. TABLE OF CONTENTS.
General Information and History................................B-1
Investment Objective and Policies..............................B-1
Management of the Portfolio Trust..............................B-6
Control Persons and Principal Holders
of Securities..................................................B-8
Investment Advisory and Other Services.........................B-8
Brokerage Allocation and Other Practices.......................B-11
Capital Stock and Other Securities.............................B-12
Purchase, Redemption and Pricing of
Securities Being Offered.......................................B-14
Tax Status.....................................................B-14
Underwriters...................................................B-19
Calculations of Performance Data...............................B-19
Financial Statements...........................................B-19

References in this Part B to "Part A" are to the Part A relating to
International Equity Portfolio (the "Portfolio"). Unless the context otherwise
requires, terms defined in the Part A have the same meaning in this Part B as in
the Part A.

ITEM 12. GENERAL INFORMATION AND HISTORY.

Not applicable.

ITEM 13. INVESTMENT OBJECTIVE AND POLICIES.

The following supplements the information contained in Part A
concerning the investment objective, policies and techniques of the Portfolio.

<PAGE>

U.S. GOVERNMENT SECURITIES

For liquidity purposes and for temporary defensive purposes, the
Portfolio may invest in U.S. Government securities held directly or under
repurchase agreements. U.S. Government securities include bills, notes, and
bonds issued by the U.S. Treasury and securities issued or guaranteed by
agencies or instrumentalities of the U.S. Government.

Some U.S. Government securities are supported by the direct full faith
and credit pledge of the U.S. Government; others are supported by the right of
the issuer to borrow from the U.S. Treasury; others, such as securities issued
by the Federal National Mortgage Association ("FNMA"), are supported by the
discretionary authority of the U.S. Government to purchase the agencies'
obligations; and others are supported only by the credit of the issuing or
guaranteeing instrumentality. There is no assurance that the U.S. Government
will provide financial support to an instrumentality it sponsors when it is not
obligated by law to do so.

The Portfolio may buy securities that are convertible into common
stock. The following is a brief description of the various types of convertible
securities in which the Portfolio may invest.

CONVERTIBLE BONDS are issued with lower coupons than non-convertible
bonds of the same quality and maturity, but they give holders the option to
exchange their bonds for a specific number of shares of the company's common
stock at a predetermined price. This structure allows the convertible bond
holder to participate in share price movements in the company's common stock.
The actual return on a convertible bond may exceed its stated yield if the
company's common stock appreciates in value, and the option to convert to common
shares becomes more valuable.

CONVERTIBLE PREFERRED STOCKS are non-voting equity securities that pay
a fixed dividend. These securities have a convertible feature similar to
convertible bonds; however, they do not have a maturity date. Due to their
fixed-income features, convertible issues typically are more sensitive to
interest rate changes than the underlying common stock. In the event of
liquidation, bondholders would have claims on company assets senior to those of
stockholders; preferred stockholders would have claims senior to those of common
stockholders.

WARRANTS entitle the holder to buy the issuer's stock at a specific
price for a specific period of time. The price of a warrant tends to be more
volatile than, and does not always track, the price of its underlying stock.
Warrants are issued with expiration dates. Once a warrant expires, it has no
value in the market.

RIGHTS represent a privilege granted to existing shareholders of a
corporation to subscribe to shares of a new issue of common stock before it is
offered to the public.

B-2

<PAGE>

REPURCHASE AGREEMENTS

The Portfolio may invest in instruments subject to repurchase
agreements only with member banks of the Federal Reserve System or "primary
dealers" (as designated by the Federal Reserve Bank of New York) in U.S.
Government securities. Under the terms of a typical repurchase agreement, an
underlying debt instrument would be acquired for a relatively short period
(usually not more than one week) subject to an obligation of the seller to
repurchase the instrument at a fixed price and time, thereby determining the
yield during the Portfolio's holding period. This results in a fixed rate of
return insulated from market fluctuations during such period. A repurchase
agreement is subject to the risk that the seller may fail to repurchase the
security. Repurchase agreements may be deemed to be loans under the Investment
Company Act of 1940, as amended (the "1940 Act"). All repurchase agreements
entered into on behalf of the Portfolio are fully collateralized at all times
during the period of the agreement in that the value of the underlying security
is at least equal to the amount of the loan, including accrued interest thereon,
and the Portfolio or its custodian bank has possession of the collateral, which
the Portfolio Trust's Board of Trustees believes gives the Portfolio a valid,
perfected security interest in the collateral. Whether a repurchase agreement is
the purchase and sale of a security or a collateralized loan has not been
definitively established. This could become an issue in the event of the
bankruptcy of the other party to the transaction. In the event of default by the
seller under a repurchase agreement construed to be a collateralized loan, the
underlying securities are not owned by the Portfolio but only constitute
collateral for the seller's obligation to pay the repurchase price. Therefore,
the Portfolio may suffer time delays and incur costs in connection with the
disposition of the collateral. The Board of Trustees of the Portfolio Trust
believes that the collateral underlying repurchase agreements may be more
susceptible to claims of the seller's creditors than would be the case with
securities owned by the Portfolio. The Portfolio will not invest in a repurchase
agreement maturing in more than seven days if any such investment together with
illiquid securities held for the Portfolio exceed 10% of the Portfolio's net
assets.

INVESTMENT RESTRICTIONS

As a matter of fundamental policy, the Portfolio will not:

(1)invest in physical commodities or contracts on physical commodities:

B-3

<PAGE>

(3) make loans except for the lending of portfolio securities pursuant
to guidelines established by the Board of Trustees and except as otherwise in
accordance with the Portfolio's investment objective and policies;

(4) borrow money, except from a bank as a temporary measure to satisfy
withdrawal requests or for extraordinary or emergency purposes, provided that
the Portfolio maintains asset coverage of at least 300% for all such borrowings;

(5) underwrite the securities of other issuers (except to the extent
that the Portfolio may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities);

(6) acquire any securities of companies within one industry, if as a
result of such acquisition, more than 25% of the value of the Portfolio's total
assets would be invested in securities of companies within such industry;
provided, however, that there shall be no limitation on the purchase of
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities, when the Portfolio adopts a temporary defensive position;

(7) issue senior securities, except as permitted under the 1940 Act;

(8) with respect to 75% of its assets, the Portfolio will not purchase
securities of any issuer if, as a result, more than 5% of the Portfolio's total
assets taken at market value would be invested in the securities of any single
issuer;

(9) with respect to 75% of its assets, the Portfolio will not purchase
a security if, as a result, the Portfolio would hold more than 10% of the
outstanding voting securities of any issuer.

The Portfolio is also subject to the following restrictions which may
be changed by the Board of Trustees without investor approval.

As a matter of non-fundamental policy, the Portfolio will not:

(1) sell securities short, unless it owns or has the right to obtain
securities equivalent in kind and amount to the securities sold short, and
provided that transactions in options and futures contracts are not deemed to
constitute short sales of securities;

(2) purchase warrants, valued at the lower of cost or market, in excess
of 10% of the value of its net assets. Included within that amount, but not to
exceed 2% of the value of the Portfolio's net assets, may be warrants that are
not listed on the New York or American

B-4

<PAGE>

Stock Exchanges or an exchange with comparable listing requirements. Warrants
attached to securities are not subject to this limitation;

(3) purchase securities on margin, except for use of short-term credit
as may be necessary for the clearance of purchases and sales of securities, but
it may make margin deposits in connection with transactions in options, futures,
and options on futures;

(4) invest in securities that are not readily marketable or that are
illiquid because their disposition is restricted under the federal securities
laws other than securities that are not registered under the Securities Act of
1933, as amended (the "1933 Act") but which can be sold to qualified
institutional investors in accordance with Rule 144A under the 1933 Act
(collectively, "illiquid securities"), if, as a result, more than 15% of the
Portfolio's net assets would be invested in illiquid securities;

(5) invest more than 10% of the Portfolio's assets in restricted
securities (including Rule 144A securities);

(6) invest for the purpose of exercising control over management of any
company;

(7) invest its assets in securities of any investment company, except
by purchase in the open market involving only customary brokers' commissions or
in connection with mergers, acquisitions of assets or consolidations and except
as may otherwise be permitted by the 1940 Act;

(8) invest more than 5% of its total assets in securities of issuers
(other than securities issued or guaranteed by U.S. or foreign government or
political subdivisions thereof) which have (with predecessors) a record of less
than three years' continuous operations;

(9) write or acquire options or interests in oil, gas or other mineral
explorations or development programs or leases.

PERCENTAGE AND RATING RESTRICTIONS

B-5

<PAGE>

ITEM 14. MANAGEMENT OF THE PORTFOLIO TRUST.

TRUSTEES AND OFFICERS

FREDERICK C. CHEN, TRUSTEE, 126 Butternut Hollow Road, Greenwich, Connecticut
06830 - Management Consultant.

ALAN S. PARSOW*, TRUSTEE, 2222 Skyline Drive, Elkhorn, Nebraska 68022 - General
Partner of Parsow Partnership, Ltd. (investments).

MICHAEL SEELY, TRUSTEE, 405 Lexington Avenue, Suite 909, New York, New York
10174 - President of Investor Access Corporation (investor relations consulting
firm).

PHILIP W. COOLIDGE*, PRESIDENT, Chairman and Chief Executive Officer, Signature
Financial Group, Inc. ("SFG"); Chairman and Chief Executive Officer, Signature
Broker- Dealer Services, Inc. ("SBDS") (since April, 1989); Director, Signature
(Cayman) (since March, 1992); Chairman, Chief Executive Officer and President,
Signature (since May, 1993).

JOHN R. ELDER*, TREASURER, Vice President, SFG (since April, 1995); Treasurer,
Phoenix Family of Mutual Funds (prior to April, 1995).

JAMES E. HOOLAHAN*, VICE PRESIDENT, Senior Vice President, SFG (since December,
1989).

B-6

<PAGE>

1994); Fund Compliance Administrator, Concord Financial Group, Inc. (from
November 1990 to August 1994); Senior Fund Accountant, Neuberger & Berman
Management Incorporated (from February 1988 to November 1990).

MOLLY S. MUGLER*, ASSISTANT SECRETARY, Legal Counsel and Assistant Secretary,
SFG; Assistant Secretary, SBDS (since April, 1989); Assistant Secretary,
Signature (since May, 1993).

BARBARA M. O'DETTE*, ASSISTANT TREASURER, Assistant Treasurer, SFG; Assistant
Treasurer, SBDS (since April, 1989); Assistant Treasurer, Signature (since May,
1993).

ANDRES E. SALDANA*, ASSISTANT SECRETARY, Legal Counsel and Assistant Secretary,
SFG (since November, 1992); Assistant Secretary, SBDS (since September, 1993);
Assistant Secretary, Signature (since May, 1993); Attorney, Ropes & Gray
(September, 1990 to November, 1992).

Alan S. Parsow $777 none none $5,650

Larry M. Robbins $777 none none $5,650

Michael Seely $777 none none $5,050
</TABLE>
<PAGE>

As of February 20, 1996, the Trustees and officers of the Portfolio
Trust, as a group, owned less than 1% of the outstanding shares of the
Portfolio.

ITEM 15. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES.

As of February 20, 1996, Republic International Equity Fund owned 76%
and Republic International Equity Fund, Ltd. owned 24% of the aggregate
outstanding interests in the Portfolio. A holder who controls more than 25% of
the outstanding beneficial shares in the Portfolio may take actions without the
approval of other holders of beneficial interests in the Portfolio.

ITEM 16. INVESTMENT ADVISORY AND OTHER SERVICES

INVESTMENT MANAGER

The Investment Management Contract will remain in effect until November
21, 1996, and will continue in effect thereafter from year to year with respect
to the Portfolio,

B-7

<PAGE>

provided such continuance is approved annually (i) by the holders of a majority
of the outstanding voting securities of the Portfolio or by the Portfolio
Trust's Board of Trustees, and (ii) by a majority of the Trustees of the
Portfolio Trust who are not parties to such Agreement or "interested persons"
(as defined in the 1940 Act) of any such party. The Agreement may be terminated
with respect to the Portfolio without penalty by either party on 60 days'
written notice and will terminate automatically if assigned.

SUB-ADVISER

Pursuant to a sub-advisory agreement with Republic (the "Sub-advisory
Agreement"), CGTC, as the Portfolio's Sub-Adviser, is responsible for the
investment management of the Portfolio's assets, including making investment
decisions and placing orders for the purchase and sale of securities for the
Portfolio directly with the issuers or with brokers or dealers selected by
Republic in its discretion. See Item 17. CGTC also furnishes to the Board of
Trustees of the Portfolio Trust, which has overall responsibility for the
business and affairs of the Portfolio Trust, periodic reports on the investment
performance of the Portfolio.

For its services, CGTC receives from the Portfolio a fee, computed
daily and based on the Portfolio's average daily net assets, at the annual rate
of 0.70% of net assets up to $25 million, 0.55% of net assets over $25 million
up to $50 million, 0.425% of net assets over $50 million up to $250 million, and
0.375% of net assets in excess of $250 million. For the

B-8

<PAGE>

period from January 9, 1995 (commencement of operations) to October 31, 1995,
sub- advisory fees aggregated $131,059.

The investment advisory services of CGTC to the Portfolio are not
exclusive under the terms of the Sub-Advisory Agreement. CGTC is free to and
does render investment advisory services to others.

ADMINISTRATOR

The Administrative Services Agreement is terminable with respect to the
Portfolio, without penalty at any time by vote of a majority of the Trustees, or
by Signature (Cayman), upon not less than 60 days' written notice to the
Portfolio Trust. The Agreement provides that neither the Administrator nor its
personnel shall be liable for any error of judgment or mistake of law or for any
act or omission in the administration of the Portfolio, except for willful
misfeasance, bad faith or gross negligence in the performance of its or their
duties or by reason of reckless disregard of its or their obligations and duties
under the Administrative Services Agreement. For the period from January 9, 1995
(commencement of operations) to October 31, 1995, administrative fees aggregated
$9,433.

FUND ACCOUNTING AGENT

Pursuant to a fund accounting agreement, Signature serves as fund
accounting agent to the Portfolio. For its services to the Portfolio, Signature
receives fees payable monthly equal on an annual basis to $50,000. For the
period from January 9, 1995 (commencement of operations) to October 31, 1995,
fund accounting fees aggregated $40,548, of which $12,835 was waived.

EXPENSES

Republic and Signature have voluntarily agreed to waive a portion of
their fees, and to the extent necessary, reimburse the Portfolio for additional
expenses during the period January 9, 1995 to October 31, 1995. For the period
ended October 31, 1995, expenses of the Portfolio were voluntarily limited to no
more than 0.64% of average daily net assets on an annualized basis. For the
period ended October 31, 1995, Republic and Signature waived fees and reimbursed
expenses aggregating $142,669.

CUSTODIAN AND TRANSFER AGENT

B-9

<PAGE>

INDEPENDENT AUDITORS

For the fiscal year ended October 31, 1995, Ernst & Young, One Capital
Place, George Town, Grand Cayman, Cayman Islands, served as independent auditors
of the Portfolio.

The Portfolio has appointed KPMG Peat Marwick, Grand Cayman, Cayman
Islands as its independent accountant for the fiscal year ended October 31,
1996, who will audit its financial statements.

COUNSEL

Dechert Price & Rhoads, 1500 K Street, N.W., Washington, D.C. 20005,
acts as counsel to the Portfolio Trust.

ITEM 17. BROKERAGE ALLOCATION AND OTHER PRACTICES

Consistent with the Rules of Fair Practice of the National Association
of Securities Dealers, Inc. and such other policies as the Trustees of the
Portfolio Trust may determine, and subject to seeking the most favorable price
and execution available, the Sub-Adviser may consider sales of shares of
investors in the Portfolio as a factor in the selection of broker-dealers to
execute portfolio transactions for the Portfolio.

B-10

<PAGE>

may be sold for certain clients even though it could have been bought for other
clients at the same time. Likewise, a particular security may be bought for one
or more clients when one or more other clients are selling that same security.
In some instances, one client may sell a particular security to another client.
Two or more clients may simultaneously purchase or sell the same security, in
which event each day's transactions in that security are, insofar as
practicable, averaged as to price and allocated between such clients in a manner
which in the Sub-Adviser's opinion is equitable to each and in accordance with
the amount being purchased or sold by each. In addition, when purchases or sales
of the same security for the Portfolio and for other clients of the Sub-Adviser
occur contemporaneously, the purchase or sale orders may be aggregated in order
to obtain any price advantage available to large denomination purchases or
sales. There may be circumstances when purchases or sales of portfolio
securities for one or more clients will have an adverse effect on other clients
in terms of the price paid or received or of the size of the position
obtainable.

ITEM 18. CAPITAL STOCK AND OTHER SECURITIES.

B-11

<PAGE>

Neither a Series nor investors in that Series possess any right to or interest
in the assets belonging to any other Series.

B-12

<PAGE>

The Portfolio Trust' Declaration of Trust provides that obligations of
the Portfolio Trust are not binding upon the Trustees individually but only upon
the property of the Portfolio Trust and that the Trustees will not be liable for
any action or failure to act, but nothing in the Declaration of Trust protects a
Trustee against any liability to which he would otherwise be subject by reason
of wilful misfeasance, bad faith, gross negligence, or reckless disregard of the
duties involved in the conduct of his office.

ITEM 19. PURCHASE, REDEMPTION AND PRICING OF SECURITIES.

Beneficial interests in the Portfolio are issued solely in private
placement transactions that do not involve any "public offering" within the
meaning of Section 4(2) of the 1933 Act.
See Item 4 in Part A of this Registration Statement.

The net asset value of the Portfolio is determined on each day on which
the New York Stock Exchange ("NYSE") is open for trading. As of the date of this
Part B, the NYSE is open every weekday except for the days on which the
following holidays are observed: New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.

The Sub-Adviser typically completes its trading on behalf of the
Portfolio in various markets before 4:00 p.m., and the value of portfolio
securities is determined when the primary market for those securities closes for
the day. Foreign currency exchange rates are also determined prior to 4:00 p.m.
However, if extraordinary events occur that are expected to affect the value of
a portfolio security after the close of the primary exchange on which it is
traded, the security will be valued at fair value as determined in good faith
under the direction of the Board of Trustees of the Portfolio Trust.

ITEM 20. TAX STATUS.

B-13

<PAGE>

The Portfolio Trust is organized as a New York trust. The Portfolio is
not subject to any income or franchise tax in the State of New York or the
Commonwealth of Massachusetts. However each investor in the Portfolio will be
taxable on its share (as determined in accordance with the governing instruments
of the Portfolio Trust) of the Portfolio's ordinary income and capital gain in
determining its income tax liability. The determination of such share will be
made in accordance with the Code, and regulations promulgated thereunder.

B-14

<PAGE>

decreased by the amount of any cash distributions and the basis of any property
distributed from the Portfolio.

Under certain circumstances, investors may be taxed on income deemed to
be earned from certain CMO residuals.

OPTIONS, FUTURES AND FORWARD CONTRACTS

Some of the options, futures contracts and forward contracts entered
into by the Portfolio may be "Section 1256 contracts." Section 1256 contracts
held by the Portfolio at the end of its taxable year (and, for purposes of the
4% excise tax, on certain other dates as prescribed under the Code) are
"marked-to-market" with unrealized gains or losses being treated as though they
were realized. Any gains or losses, including "marked-to-market" gains or
losses, on Section 1256 contracts are generally 60% long-term and 40% short-term

B-15

<PAGE>

capital gains or losses ("60/40") although all foreign currency gains and losses
from such contracts may be treated as ordinary in character absent a special
election.

Generally, hedging transactions and certain other transactions in
options, futures and forward contracts undertaken by the Portfolio may result in
"straddles" for U.S. federal income tax purposes. The straddle rules may affect
the character of gain or loss realized by the Portfolio. In addition, losses
realized by the Portfolio on positions that are part of a straddle may be
deferred under the straddle rules, rather than being taken into account in
calculating the taxable income for the taxable year in which such losses are
realized. Because only a few regulations implementing the straddle rules have
been promulgated, the tax consequences of transactions in options, futures and
forward contracts to the Portfolio are not entirely clear. The transactions may
increase the amount of short-term capital gain realized by the Portfolio.

The Portfolio may make one or more of the elections available under the
Code which are applicable to straddles. If the Portfolio makes any of the
elections, the amount, character, and timing of the recognition of gains or
losses from the affected straddle positions will be determined under rules that
vary according to the elections made. The rules applicable under certain of the
elections operate to accelerate the recognition of gains or losses from the
affected straddle positions.

The 30% limit on gains from the disposition of certain options, futures
and forward contracts held less than three months, and the qualifying income and
diversification requirements applicable to the Portfolio assets, may limit the
extent to which the Portfolio will be able to engage in these transactions.

Rules governing the tax aspects of swap contracts are in a developing
stage and are not entirely clear in certain respects. Accordingly, while an
investor intends to account for such transactions in a manner deemed to be
appropriate, the Internal Revenue Service might not necessarily accept such
treatment. If it does not, the status of the investor as a regulated investment
company might be affected. Certain requirements that must be net under the Code
in order for the Fund to qualify as a regulated investment company may limit the
extent to which the Fund will be able to engage in swap agreements.

The Portfolio may invest in shares of foreign corporations (through
ADRs) which may be classified under the Code as passive foreign investment
companies ("PFICs"). In general, a foreign corporation is classified as a PFIC
if at least one-half of its assets constitute investment-type assets, or 75% or
more of its gross income is investment-type income. If the Portfolio receives a
so-called "excess distribution" with respect to PFIC stock, investors may be
subject to a tax on a portion of the excess distribution, whether or not the
corresponding income is distributed by the investor to shareholders. In general,
under the PFIC rules, an excess distribution is treated as having been realized
ratably over the period during which the Portfolio held the PFIC shares.
Investors will be subject to tax on the portion, if any, of an excess
distribution that is so allocated to prior taxable years and an

B-16

<PAGE>

interest factor will be added to the tax, as if the tax had been payable in such
prior taxable years. Certain distributions from a PFIC as well as gain from the
sale of PFIC shares are treated as excess distributions. Excess distributions
are characterized as ordinary income even though, absent application of the PFIC
rules, certain excess distributions might have been classified as capital gain.

An investor may be eligible to elect alternative tax treatment with
respect to PFIC shares held by the Portfolio. Under an election that currently
is available in some circumstances, the Fund generally would be required to
include in its gross income its share of the earnings of a PFIC on a current
basis, regardless of whether distributions are received from the PFIC in a given
year. If this election were made, the special rules, discussed above, relating
to the taxation of excess distributions, would not apply. In addition, another
election may be available that would involve marking to market the Portfolio's
PFIC shares at the end of each taxable year (and on certain other dates
prescribed in the Code), with the result that unrealized gains are treated as
though they were realized. If this election were made, tax at the Fund level
under the PFIC rules would generally be eliminated, but the Fund could, in
limited circumstances, incur nondeductible interest charges. The Fund's
intention to qualify annually as a regulated investment company may limit its
elections with respect to PFIC shares of the Portfolio.

Because the application of the PFIC rules may affect, among other
things, the character of gains, the amount of gain or loss and the timing of the
recognition of income with respect to PFIC shares, as well as subject a Fund
itself to tax on certain income from PFIC shares, the amount that must be
distributed to shareholders, and which will be taxed to shareholders as ordinary
income or long-term capital gain, may be increased or decreased substantially as
compared to a Fund that did not invest in PFIC shares.

The information above is only a summary of some of the tax
considerations affecting the Portfolio and its investors. Income and capital
gain allocated by the Portfolio may also be subject to state, local, foreign or
other taxes not discussed above. A prospective investor may wish to consult a
tax advisor to determine the suitability of an investment in the Portfolio based
on the prospective investor's tax situation.

B-17

<PAGE>

ITEM 21. UNDERWRITERS.

ITEM 22. CALCULATIONS OF PERFORMANCE DATA.

Not applicable.

ITEM 23. FINANCIAL STATEMENTS.

FT4176A

B-18
<PAGE>
PART C

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.

(a) The following financial statements are incorporated by reference into Item
23 of Part B:

FIXED INCOME PORTFOLIO

Schedule of Investments, October 31, 1995
Statement of Assets and Liabilities, October 31, 1995
Statement of Operations for the Period January 9, 1995 (commencement of
operations) through October 31, 1995
Statement of Changes in Net Assets
Financial Highlights
Notes to Financial Statements, October 31, 1995

INTERNATIONAL EQUITY PORTFOLIO

(b) Exhibits.

1. Declaration of Trust of the Registrant.*

2. By-Laws of the Registrant.*

5(a). Master Investment Management Contract between Republic Portfolios and
Republic National Bank of New York.*

5(b). Subadvisory Agreement between Republic Portfolios and Miller, Anderson &
Sherrerd with respect to Fixed Income Portfolio.*

5(c). Subadvisory Agreement between Republic Portfolios and Capital Guardian
Trust Company with respect to International Equity Portfolio.*

6. Exclusive Placement Agent Agreement between Republic Portfolios and Signature
Financial Group (Grand Cayman) Limited ("Signature (Cayman)").1

8. Custodian Agreement between Republic Portfolios and Investors Bank & Trust
Company.1

9. Administrative Services Agreement between Republic Portfolios and Signature
(Cayman).1

9(a). Hub and Spoke(R) Processing and Fund Accounting Agreement between Republic
Portfolios and Signature Financial Services, Inc.1

13(a). Initial investor representation letter regarding International Equity
Portfolio.1

13(b). Initial investor representation letter regarding Fixed Income Portfolio.1

17. Financial Data Schedules.*

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

* Filed herewith.

1. Incorporated herein by reference from the Registrant's registration statement
on Form N-1A (File No. 811-8928) as filed with the Securities and Exchange
Commission on December 21, 1994.

ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.

Not applicable.

ITEM 26. NUMBER OF HOLDERS OF SECURITIES

As of February 20, 1996, the number of record holders of each Portfolio
was as follows:

Fixed Income Portfolio: 2
International Equity Portfolio: 2

ITEM 27. INDEMNIFICATION

Reference is hereby made to Article IV of the Registrant's Declaration
of Trust. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees or officers of the
Registrant by the Registrant pursuant to the Declaration of Trust of otherwise,
the Registrant is aware that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Investment Company Act of 1940, as amended (the "1940 Act") and, therefore, is
unenforceable.

A claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by trustees or officers
of the Registrant in connection with the successful defense of any act, suit or
proceeding) is asserted by such trustees or officers in connection with the
shares being registered, the Registrant will, unless in the opinion of its
Counsel, the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the 1940 Act and will be governed by the
final adjudication of such issues.

ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER

(a) Republic National Bank of New York ("Republic") is a subsidiary of
Republic New York Corporation ("RNYC"), 452 Fifth Avenue, New York, New York
10018, a registered bank holding company.

(i) The name, position with Republic, address, principal occupation and
type of business are set forth below for the directors of Republic, including
those who are engaged in any other business, profession, vocation, or employment
of a substantial nature:(1)

NAME
BUSINESS AND OTHER CONNECTIONS

Kurt Andersen
Executive Vice President and a Director of RNYC and Republic.

Albert S. Corwen
Director of RNYC and President of John Mullins & Sons, Inc., furniture retailer.

Cyril S. Dwek
Vice Chairman of the Board and Director of Republic and RNYC.

Ernest Ginsberg
Vice Chairman of the Board and Director of RNYC and Republic, and General
Counsel to Republic.

Nathan Hasson
Vice Chairman of the Board, Director and Treasurer of
Republic and Vice Chairman of the Board and Director of
RNYC.

Morris Hirsch
Director of and Senior Consultant to RNYC and Republic.

Jeffrey C. Keil
Vice Chairman of the Board and Director of RNYC and President and Director of
Republic.

Peter Kimmelman
A private investor and a Director of RNYC and
Republic.(2)

Leonard Lieberman
Director of various companies, including Consolidated Cigar
Corporation and Outlet Communications, Inc., Director of
RNYC and Republic.

Eugene Lubin
Director of Republic and President and Chief Executive
Officer of Lubin's Men's World, Inc.

William C. MacMillen, Jr.
President, William C. MacMillen & Co., Inc. (investment
Banking) and a Director of RNYC and Republic. Also a
Director of Carroon & Black Corporation.(3)

Martin F. Mertz
Chairman of the Executive Committee of the Board of Directors of The Republic
Bank for Savings, a wholly owned subsidiary of RNYC, Director of RNYC and
Republic.

Charles G. Meyer, Jr.
President of Cord Meyer Development Co., Director of
Republic.(4)

James L. Morice
Partner in the management consulting and executive search
firm of Mirtz Morice, Inc. and a Director of RNYC and
Republic.(5)

E. Daniel Morris
President, Corsair Capital Corporation, Director of RNYC.

Dr. Janet L. Norwood
Senior Fellow at The Urban Institute (research organization), Director of RNYC
and Republic.

John A. Pancetti
Chairman of the Board, Chief Executive Officer of Republic Bank for Savings, a
wholly-owned subsidiary of RNYC. Director of RNYC and Republic.

The Hon. Javier Perez
De Cuellar
Former Secretary General of the United Nations and
Director of RNYC.

Vito S. Portera
Vice Chairman of the Board, and a Director of RNYC and Republic. Also Chairman
of the Board of Republic International Bank of New York, the wholly-owned
Florida Edge Act subsidiary of Republic. Also Chairman of the Board and
President of SafraCorp, a Florida bank holding company, and Chairman of its
subsidiary bank.

Wilbur M. Rabinowitz
Private Investor and Director of RNYC.

William P. Rogers
Partner, Rogers & Wells and Director of RNYC and Republic.

Dov C. Schlein
President and Chief Operating Officer, and a Director of RNYC and Vice Chairman
and Director of Republic.

Jacques Tawil
Director of RNYC (Suisse) S.A.

Richard Waters
Retired Executive Officer of The Sporting News Publishing
Company and Director of Republic.

Walter H. Weiner
Chairman of the Board and Director of Republic and RNYC.

Peter White
Senior Consultant and a Director of RNYC and Republic.

(ii) The name, position with Republic, address, principal occupation
and type of business are set forth below for certain senior executive officers
of Republic, including those who are engaged in any other business, profession,
vocation, or employment of a substantial nature:(1)

Walter H. Weiner
Chairman of the Board and Chief Executive Officer of Republic and RNYC.

Dov C. Schlein
President and Chief Executive Officer and Director of Republic and a Director
and Vice Chairman of RNYC.

Cyril S. Dwek
Vice Chairman of the Board and a Director of Republic and RNYC.

Ernest Ginsberg
Vice Chairman of the Board, Director and General Counsel of Republic, a Vice
Chairman and a Director of RNYC.

Nathan Hassan
Vice Chairman of the Board, Treasurer and a Director of Republic and Vice
Chairman and a Director of RNYC.

Jeffrey C. Keil
Vice Chairman of the Board, and a Director of Republic and President and a
Director of RNYC.

John A. Pancetti
Vice Chairman of the Board and a Director of Republic and RNYC. Also Chairman of
the Board and Chief Executive Officer of the Manhattan Savings Bank, a
wholly-owned savings bank subsidiary of RNYC.

Vito S. Portera
Vice Chairman of the Board and a Director of Republic and RNYC. Also Chairman of
the Board of Republic International Bank of New York, the wholly-owned Florida
Edge Act subsidiary of Republic. Also Chairman of the Board and President of
SafraCorp, a Florida bank holding company, and Chairman of its subsidiary bank.

Kurt Andersen
Executive Vice President and a Director of Republic and RNYC.

Leslie E. Bains
Executive Vice President of Republic.

Anthony G. Chappell
Executive Vice President of Republic.

Patrick Constantinides
Executive Vice President of Republic.

Walter R. Cook
Executive Vice President of Republic.

Manuel L. Diaz
Executive Vice President, and a Director, President and Treasurer of Republic
International Bank of New York, the wholly-owned Florida Edge Act Subsidiary of
Republic.

Jean-Pierre Diels
Executive Vice President.

William A. Dueker, Jr.
Executive Vice President.

Adrian Fletcher
Executive Vice President, General Manager. and Chief
Operating Officer of Republic's London Branch.

Rick D. Friedlander
Executive Vice President of Republic.

John R. Gorman
Executive Vice President of Republic.

John H. Guiton
Executive Vice President of Republic.

John P. Holdcroft, Jr.
Executive Vice President and Comptroller of RNYC.

John M. Heffer
Executive Vice President of Republic.

John D. Kaberle, Jr.
Executive Vice President and Comptroller of Republic and
RNYC.

Elie Krayem
Executive Vice President of Republic.

Morton Leader
Executive Vice President, and an Executive Vice President
and a Director of Republic Factors Corp., the wholly-owned
factoring subsidiary of RNYC.

Terrence G. Lloyd
Executive Vice President of Republic.

Alberto Munchnick
Executive Vice President of Republic.

Martin Rabinowitz
Executive Vice President of Republic.

Herbert J. Richman
Executive Vice President, and a Vice President of RNYC.

Thomas F. Robards
Executive Vice President and Treasurer of RNYC and
Executive Vice President of Republic.

Elias Saal
Executive Vice President of Republic.

Daniel M. Schwartz
Executive Vice President of Republic.

John M. Scopaz
Executive Vice President of Republic.

Richard C. Spikerman
Executive Vice President of Republic.

John Tamberlane
Executive Vice President, and President of The Manhattan Savings Bank, a
wholly-owned savings bank subsidiary of RNYC.

Moise Tawil
Executive Vice President of Republic.

Gerald N. Weiner
Executive Vice President of Republic.

Thomas F. Weiner
Executive Vice President of Republic.

George T. Wendler

Executive Vice President of Republic.
Peter F. Huezey
Senior Vice President and Director of Internal Audit of
Republic.

Robert Parkinson
Senior Vice President and Deputy Comptroller of RNYC.

William F. Rosenblum, Jr.
Senior Vice President, Senior Deputy General Counsel and Corporate Secretary of
Republic and RNYC.

William H. Slattery
Senior Vice President and General Counsel of Republic.

Edmond J. Safra
Honorary Chairman of Republic and RNYC.

- --------------------------------------
(1) Unless otherwise noted by footnote, the address of all directors and
officers is 452 Fifth Avenue, New York, New York 10018
(2) 1270 Avenue of the Americas, Suite 3010, New York 10020
(3) 254 Victoria Place, Lawrence, New York 11559
(4) 19355 Turnberry Way, Apartment #8H, 32 Tower North, Miami Beach,
Florida 33180
(5) 111-15 Queens Boulevard, 2nd Floor, Forest Hills, New York, New York
11375

(b) The name, position with Capital Guardian Trust Company ("CGTC"),
address, principal occupation and type of business are set forth below for the
directors and certain senior executive officers of CGTC, including those who are
engaged in any other business, profession, vocation, or employment of a
substantial nature:(1)

NAME
BUSINESS AND OTHER CONNECTIONS

Richard C. Barker
Chairman of the Board, CGTC and Capital International
Limited; Senior Vice President and Director, Capital
Management Services; Director, The Capital Group, Inc.
("Capital") and Capital Group International, Inc.(2)

Michael D. Beckman
Senior Vice and Treasurer, CGTC; Director, Capital
Guardian Trust Company of Nevada.(3)

Fred R. Betts
Senior Vice President, CGTC.(4)

Larry Paul Clemmensen
Director of CGTC, American Funds Distributors, Inc. and
American Funds Service Company; Executive Vice
President, Director, and Chief Financial Officer, Capital;
Senior Vice President and Director, Capital Research and
Management Company ("CRMC"); Senior Vice President
and Treasurer, Capital Income Builder, Inc. and Capital
World Growth & Income Fund, Inc.

Don Ralph Conlan
Director, CGTC; President and Director, Capital, Capital
Group Research, Inc., and Capital Strategy Research, Inc.;
Senior Vice President and Director, CRMC; Director,
American Funds Distributors, Inc. and American Funds
Service Company.

David I. Fisher
Chairman of the Board, Capital and Capital International S.A.; Vice Chairman of
the Board, CGTC, Capital International Limited, Emerging Markets Growth Fund,
Inc., and Capital International K.K.; President and Director, Capital Group
International, Inc., Capital International, Inc. and Capital International
Limited (Bermuda); President and Principal Executive Officer, New World
Investment Fund; Director, Capital Group Research, Inc., Capital Research
International, Global Capital Management Limited, New Perspective Fund, Inc. and
EuroPacific Growth Fund, Inc. (5)

William H. Hurt
Senior Vice President and Director, CGTC; Chairman of the Board, Capital
Guardian Trust Company of Nevada and Capital Strategy Research, Inc.; Director,
Capital.

Robert G. Kirby
Director, CGTC; Senior Partner, The Capital Group
Partners L.P.; Director, Lockheed Corporation.

Nancy J. Kyle
Senior Vice President-International and Director, CGTC.(6)

Karen L. Larson
Director, CGTC; President, Director, and Director of
Research, Capital Guardian Research Company
("CGRC").(5)

D. James Martin
Director, CGTC; Senior Vice President and Director,
CGRC.

John R. McIlwraith
Senior Vice President-International and Director, CGTC;
Senior Vice President and Director, Capital International
Limited.(2)

James R. Mulally
Senior Vice President - Fixed Income, CGTC; Senior Vice
President, Capital International Limited; Director,
CGRC.(5)

Victor M. Parachini
Senior Vice President, Director and Portfolio Manager,
CGTC.(2)

Robert V. Pennington
Senior Vice President, CGTC; President, Capital Guardian
Trust Company of Nevada.(6)

Jason M. Pilalas
Director, CGTC; Senior Vice President and Director,
CGRC.

Merlin E. Robertson
Senior Vice President, CGTC.

Robert Ronus
President, CGTC; Chairman, Capital Research International and CGRC; Senior Vice
President, Capital International Limited and Capital International S.A.;
Director, Capital Group International, Inc., Capital International, Inc.,
Capital International Fund, and Nomura Capital International Equity Fund.

James Fredric Rothenberg
Vice Chairman, CGTC; President and Director, CRMC;
President and Chief Executive Officer, The Growth Fund
of America, Inc.; Director, Capital and Capital Group
Research, Inc.

John H. Seiter
Executive Vice President - Marketing, CGTC; Senior Vice President, Capital Group
International, Inc.

Robert L. Spare
Senior Vice President, CGTC.

Eugene P. Stein
Executive Vice President and Director, CGTC; Director,
CGRC.

Douglas M. Urban
Senior Vice President, CGTC.(2)

Edus H. Warren, Jr.
Senior Vice President and Director, CGTC.(7)

- --------------------------------------
(1) Unless otherwise noted by footnote, the address of all directors and
officers is 333 South Hope Street, Los Angeles CA 90071.
(2) Four Embarcadero Center, Suite 1800, San Francisco, CA 94111-4125.
(3) 135 South State College Blvd., Brea, CA 92621-5804.
(4) Promenade Two, 25th Floor, 1230 Peachtree Street, N.E., Atlanta, GA
30309-3575.
(5) 11100 Santa Monica Blvd., 15th Floor, Los Angeles, CA 90025-3302.
(6) 630 Fifth Avenue, 36th Floor, New York, NY 10111-0121.
(7) 25 Bedford Street, London, England WC2E 9HN.

(c) The information required by this Item 28 with respect to each
director, officer or partner of Miller Anderson & Sherrerd ("MAS" or the
"Sub-Adviser") is incorporated by reference to Form ADV filed by MAS with the
Securities and Exchange Commission pursuant to the Investment Advisers Act of
1940, as amended (File No. 801-10437).

ITEM 29. PRINCIPAL UNDERWRITER

Not applicable.

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS

The account books and other documents required to be maintained by the
Registrant pursuant to Section 31(a) of the 1940 Act and the Rules thereunder
will be maintained at the offices of Republic National Bank of New York, 452
Fifth Avenue, New York, New York 10018, Signature Financial Group (Cayman)
Limited, P.O. Box 2494, Elizabethan Square, George Town, Grand Cayman, Cayman
Islands, B.W.I., Signature Financial Services, Inc., 1 First Canadian Place,
Suite 2800, P.O. Box 231, Toronto, Ontario, M5X 1C8, and Investors Bank & Trust
Company, N.A., 89 South Street, Boston, Massachusetts 02111.

ITEM 31. MANAGEMENT SERVICES

Not applicable.

ITEM 32. UNDERTAKINGS

The Registrant undertakes to comply with Section 16(c) of the 1940 Act
as though such provisions of the 1940 Act were applicable to the Registrant
except that the request referred to in the third full paragraph thereof may only
be made by shareholders who hold in the aggregate at least 10% of the
outstanding shares of the Registrant, regardless of the net asset value or
values of shares held by such requesting shareholders.
<PAGE>
SIGNATURES

Pursuant to the requirements of the Investment Company Act of 1940, as
amended, the Registrant has duly caused this Registration Statement on Form N-1A
to be signed on its behalf by the undersigned, thereto duly authorized in George
Town, Grand Cayman, Cayman Islands, B.W.I. on the 23rd day of February, 1996.

REPUBLIC PORTFOLIOS

By /S/ SUSAN JAKUBOSKI
--------------------
Susan Jakuboski
Assistant Secretary and Assistant Treasurer
<PAGE>
EXHIBIT INDEX

NO. EXHIBIT

1. Declaration of Trust of the Registrant.

2. By-Laws of the Registrant.

5(a). Master Investment Management Contract between Republic Portfolios and
Republic National Bank of New York.

5(b). Subadvisory Agreement between Republic Portfolios and Miller, Anderson
& Sherrerd with respect to Fixed Income Portfolio.

5(c). Subadvisory Agreement between Republic Portfolios and Capital Guardian
Trust Company with respect to International Equity Portfolio.

17. Financial Data Schedules.

REPUBLIC PORTFOLIOS

DECLARATION OF TRUST

Dated as of November 1, 1994

<PAGE>

TABLE OF CONTENTS PAGE
<TABLE>
<CAPTION>

<S> <C>
ARTICLE I--THE TRUST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Section 1.1 Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Definitions . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE II--TRUSTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Section 2.1 Number and Qualification . . . . . . . . . . . 3
Section 2.2 Term and Election . . . . . . . . . . . . . . 3
Section 2.3 Resignation, Removal and Retirement . . . . . 4
Section 2.4 Vacancies . . . . . . . . . . . . . . . . . . 4
Section 2.5 Meetings . . . . . . . . . . . . . . . . . . . 5
Section 2.6 Chairman of the Board; Officers . . . . . . . 5
Section 2.7 By-Laws . . . . . . . . . . . . . . . . . . . 6

ARTICLE III--POWERS OF TRUSTEES . . . . . . . . . . . . . . . . . . . . . . . . . 6

Section 3.1 General . . . . . . . . . . . . . . . . . . 6
Section 3.2 Investments . . . . . . . . . . . . . . . . . 6
Section 3.3 Legal Title . . . . . . . . . . . . . . . . . 7
Section 3.4 Sale and Increases of Interests . . . . . . . 7
Section 3.5 Decreases and Redemptions of Interests . . . . 7
Section 3.6 Borrow Money . . . . . . . . . . . . . . . . 8
Section 3.7 Delegation; Committees . . . . . . . . . . . . 8
Section 3.8 Collection and Payment . . . . . . . . . . . 8
Section 3.9 Expenses . . . . . . . . . . . . . . . . . . . 8
Section 3.10 Miscellaneous Powers . . . . . . . . . . . . . 9
Section 3.11 Further Powers . . . . . . . . . . . . . . . . 9

ARTICLE IV--INVESTMENT ADVISORY, ADMINISTRATION AND PLACEMENT
AGENT ARRANGEMENTS; CUSTODIAN . . . . . . . . . . . . . . . . 9

Section 4.1 Investment Advisory and Other Arrangements . . 9
Section 4.2 Parties to Contract . . . . . . . . . . . . . 10
Section 4.3 Custodian . . . . . . . . . . . . . . . . . . 10
Section 4.4 1940 Act Governance . . . . . . . . . . . . . 10

ARTICLE V--LIABILITY OF HOLDERS; LIMITATIONS OF LIABILITY OF TRUSTEES,
OFFICERS, ETC. . . . . . . . . . . . . . . . . . . . . . . .. . . 11

Section 5.1 Liability of Holders; Indemnification . . . . 11
Section 5.2 Limitations of Liability of Trustees, Officers,
Employees, Agents, Independent Contractors
to Third Parties . . . . . . . . . . . . . . 11
Section 5.3 Limitations of Liability of Trustees, Officers,
Employees, Agents, Independent Contractors
to Trust, Holders, etc. . . . . . . . . . . 11
Section 5.4 Mandatory Indemnification . . . . . . . . . . 11
Section 5.5 No Bond Required of Trustees . . . . . . . . . 12

<PAGE>

PAGE

Section 5.6 No Duty of Investigation; Notice in Trust
Instruments, etc. . . . . . . . . . . . . . 12
Section 5.7 Reliance on Experts, etc. . . . . . . . . . . 13
Section 5.8 No Repeal or Modification . . . . . . . . . ..13

ARTICLE VI--INTERESTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Section 6.1 Interests . . . . . . . . . . . . . . . . . . 13
Section 6.2 Establishment and Designation of Series . . . 14
Section 6.3 Non-Transferability . . . . . . . . . . . . . 15
Section 6.4 Register of Interests . . . . . . . . . . . . 15

ARTICLE VII--INCREASES, DECREASES AND REDEMPTIONS OF INTERESTS . . . . . . . . . . 15

ARTICLE VIII--DETERMINATION OF BOOK CAPITAL ACCOUNT BALANCES,
AND DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . 16

Section 8.1 Book Capital Account Balances . . . . . . . . 16
Section 8.2 Allocations and Distributions to Holders . . . 16
Section 8.3 Power to Modify Foregoing Procedures . . . . . 16

ARTICLE IX--HOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Section 9.1 Rights of Holders . . . . . . . . . . . . . . 16
Section 9.2 Meetings of Holders . . . . . . . . . . . . . 17
Section 9.3 Notice of Meetings . . . . . . . . . . . . . . 17
Section 9.4 Record Date for Meetings, Distributions, etc. 18
Section 9.5 Proxies, etc. . . . . . . . . . . . . . . . . 18
Section 9.6 Reports . . . . . . . . . . . . . . . . . . . 18
Section 9.7 Holder Action by Written Consent . . . . . . . 18
Section 9.8 Notices . . . . . . . . . . . . . . . . . . . 19

ARTICLE X--DURATION; TERMINATION; DISSOLUTION; AMENDMENT; MERGERS; ETC. . . . . . 19

Section 10.1 Duration . . . . . . . . . . . . . . . . . . . 19
Section 10.2 Dissolution . . . . . . . . . . . . . . . . . 19
Section 10.3 Termination . . . . . . . . . . . . . . . . . 20
Section 10.4 Amendment Procedure . . . . . . . . . . . . . 21
Section 10.5 Merger, Consolidation and Sale of Assets . . . 21
Section 10.6 Incorporation . . . . . . . . . . . . . . . . 22

ARTICLE XI--MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Section 11.1 Certificate of Designation; Agent for
Service of Process . . . . . . . . . . . . . 22
Section 11.2 Governing Law . . . . . . . . . . . . . . . . 22
Section 11.3 Counterparts . . . . . . . . . . . . . . . . . 22
Section 11.4 Reliance by Third Parties . . . . . . . . . . 22
Section 11.5 Provisions in Conflict with Law or Regulations 23
</TABLE>

<PAGE>

FT4148

DECLARATION OF TRUST

REPUBLIC PORTFOLIOS

This DECLARATION OF TRUST of Republic Portfolios is made as of the 1st
day of November, 1994 by the parties signatory hereto, as Trustees (as defined
in Section 1.2 hereof).

W I T N E S S E T H:

WHEREAS, the Trustees desire to form a master trust fund or "Trust" (as
defined in Section 1.2 hereof) under the law of the State of New York consisting
of one or more subtrusts or "Series" (as defined in Section 1.2 hereof) for the
investment and reinvestment of assets contributed thereto; and

WHEREAS, it is proposed that the trust assets be composed of money and
other property contributed to the Series, such assets to be held and managed in
trust for the benefit of the holders of beneficial interests in such Series;

NOW, THEREFORE, the Trustees hereby declare that they will hold in
trust all money and other property contributed to the Trust and will manage and
dispose of the same for the benefit of such holders of beneficial interests and
subject to the provisions hereof, to wit:

ARTICLE I

THE TRUST

1.1. NAME. The name of the Trust shall be Republic Portfolios and so
far as may be practicable the Trustees shall conduct the Trust's activities,
execute all documents and sue or be sued under that name, which name (and the
term "Trust" wherever hereinafter used) shall refer to the Trustees as Trustees,
and not individually, and shall not refer to the officers, employees, agents or
independent contractors of the Trust or its holders of beneficial interests.

1.2. DEFINITIONS. As used in this Declaration, the following terms
shall have the following meanings:

"ADMINISTRATOR" shall mean any party furnishing services to one or more
Series pursuant to any administration contract described in Section 4.1 hereof.

"BOOK CAPITAL ACCOUNT" shall mean, for any Holder (as hereinafter
defined) at any time, the Book Capital Account of the Holder at such time with
respect to the Holder's beneficial interest in the Trust Property (as
hereinafter defined) of any Series, determined in accordance with the method
established by the Trustees pursuant to Section 8.1 hereof. The Trust shall
maintain separate records of Book Capital Accounts for each such Series.

<PAGE>

"CODE" shall mean the United States Internal Revenue Code of 1986, as
amended from time to time, as well as any non-superseded provisions of the
Internal Revenue Code of 1954, as amended (or any corresponding provision or
provisions of succeeding law).

"COMMISSION" shall mean the United States Securities and Exchange
Commission.

"DECLARATION" shall mean this Declaration of Trust as amended from time
to time. References in this Declaration to "DECLARATION", "HEREOF", "HEREIN" and
"HEREUNDER" shall be deemed to refer to this Declaration rather than the article
or section in which any such word appears.

"FISCAL YEAR" shall mean an annual period(s) of the Series determined
by the Trustees which ends on a date specified by the Trustees or on such other
day as is permitted or required by the Code.

"HOLDER" shall mean the record holder of any Interest.

"INSTITUTIONAL INVESTOR(S)" shall mean any regulated investment
company, segregated asset account, foreign investment company, common trust
fund, group trust or other investment arrangement, whether organized within or
without the United States of America, other than an individual, S corporation,
partnership or grantor trust beneficially owned by any individual, S corporation
or partnership.

"INTERESTED PERSON" shall have the meaning given it in the 1940 Act (as
hereinafter defined).

"INTEREST" shall mean the beneficial interest of a Holder in the Trust
Property of any Series, including all rights, powers and privileges accorded to
Holders by this Declaration, which interest may be expressed as a percentage,
determined by calculating for a particular Series, at such times and on such
basis as the Trustees shall from time to time determine, the ratio of each
Holder's Book Capital Account balance to the total of all Holders' Book Capital
Account balances. Reference herein to a specified percentage of, or fraction of,
Interests, means Holders whose combined Book Capital Account balances represent
such specified percentage or fraction of the combined Book Capital Account
balances of all, or a specified group of, Holders.

"INVESTMENT ADVISER" shall mean any party furnishing services to one or
more Series of the Trust pursuant to any investment advisory contract described
in Section 4.1 hereof.

"MAJORITY INTERESTS VOTE" shall mean the vote, at a meeting of Holders
of one or more Series as the context may require, of (A) 67% or more of the
Interests present or represented at such meeting, if Holders of more than 50% of
all Interests in such one or more Series are present or represented by proxy, or
(B) more than 50% of all Interests in such one or more Series, whichever is
less.

"1940 ACT" shall mean the United States Investment Company Act of 1940,
as amended from time to time, and the rules and regulations thereunder.

<PAGE>

"PERSON" shall mean and include individuals, corporations,
partnerships, trusts, associations, joint ventures and other entities, whether
or not legal entities, and governments and agencies and political subdivisions
thereof.

"REDEMPTION" shall mean the complete withdrawal of an Interest of a
Holder the result of which is to reduce the Book Capital Account balance of that
Holder to zero, and the term "redeem" shall mean to effect a Redemption.

"SERIES" shall mean the subtrusts of the Trust as the same are
established and designated pursuant to Article VI hereof, each of which shall be
a separate subtrust.

"TRUST" shall mean the master trust fund established hereby and shall
include each Series hereof.

"TRUST PROPERTY" shall mean as of any particular time any and all
assets or other property, real or personal, tangible or intangible, which at
such time is owned or held by or for the account of any Series or for the
account of the Trustees, each component of which shall be allocated and belong
to a specific Series to the exclusion of all other Series.

"TRUSTEES" shall mean each signatory to this Declaration, so long as
such signatory shall continue in office in accordance with the terms hereof, and
all other individuals who at the time in question have been duly elected or
appointed and have qualified as Trustees in accordance with the provisions
hereof and are then in office, and reference in this Declaration to a Trustee or
Trustees shall refer to such individual or individuals in their capacity as
Trustees hereunder.

ARTICLE II

TRUSTEES

2.1. NUMBER AND QUALIFICATION. The number of Trustees shall be fixed
from time to time by action of the Trustees taken as provided in Section 2.5
hereof; provided, however, that the number of Trustees so fixed shall in no
event be less than three. Any vacancy created by an increase in the number of
Trustees may be filled by the appointment of an individual having the
qualifications described in this Section 2.1 made by action of the Trustees
taken as provided in Section 2.5 hereof. Any such appointment shall not become
effective, however, until the individual named in the written instrument of
appointment shall have accepted in writing such appointment and agreed in
writing to be bound by the terms of this Declaration. No reduction in the number
of Trustees shall have the effect of removing any Trustee from office. Whenever
a vacancy occurs, until such vacancy is filled as provided in Section 2.4
hereof, the Trustees continuing in office, regardless of their number, shall
have all the powers granted to the Trustees and shall discharge all the duties
imposed upon the Trustees by this Declaration. A Trustee shall be an individual
at least 21 years of age who is not under legal disability.

2.2. TERM AND ELECTION. Each Trustee named herein, or elected or
appointed prior to the first meeting of Holders, shall (except in the event of

<PAGE>

resignations, retirements, removals or vacancies pursuant to Section 2.3 or
Section 2.4 hereof) hold office until a successor to such Trustee has been
elected at such meeting and has qualified to serve as Trustee, as required under
the 1940 Act. Subject to the provisions of Section 16(a) of the 1940 Act and
except as provided in Section 2.3 hereof, each Trustee shall hold office during
the lifetime of the Trust and until its termination as hereinafter provided.

2.3. RESIGNATION, REMOVAL AND RETIREMENT. Any Trustee may resign his or
her trust (without need for prior or subsequent accounting) by an instrument in
writing executed by such Trustee and delivered or mailed to the Chairman, if
any, the President or the Secretary of the Trust and such resignation shall be
effective upon such delivery, or at a later date according to the terms of the
instrument. Any Trustee may be removed with or without cause by the affirmative
vote of Holders of two-thirds of the Interests or (provided the aggregate number
of Trustees, after such removal and after giving effect to any appointment made
to fill the vacancy created by such removal, shall not be less than the number
required by Section 2.1 hereof) by the action of two-thirds of the remaining
Trustees. Any Trustee who has attained a mandatory retirement age, if any,
established pursuant to any written policy adopted from time to time by a
majority of the Trustees shall, automatically and without action by such Trustee
or the remaining Trustees, be deemed to have retired in accordance with the
terms of such policy, effective as of the date determined in accordance with
such policy. Any Trustee who has become incapacitated by illness or injury as
determined by a majority of the other Trustees, may be retired by written
instrument executed by a majority of the other Trustees, specifying the date of
such Trustee's retirement. Upon the resignation, retirement or removal of a
Trustee, or a Trustee otherwise ceasing to be a Trustee, such resigning,
retired, removed or former Trustee shall execute and deliver such documents as
the remaining Trustees shall require for the purpose of conveying to the Trust
or the remaining Trustees any Trust Property held in the name of such resigning,
retired, removed or former Trustee. Upon the death of any Trustee or upon
removal, retirement or resignation due to any Trustee's incapacity to serve as
Trustee, the legal representative of such deceased, removed, retired or
resigning Trustee shall execute and deliver on behalf of such deceased, removed,
retired or resigning Trustee such documents as the remaining Trustees shall
require for the purpose set forth in the preceding sentence.

2.4. VACANCIES. The term of office of a Trustee shall terminate and a
vacancy shall occur in the event of the death, resignation, retirement or
removal of a Trustee. No such vacancy shall operate to annul this Declaration or
to revoke any existing agency created pursuant to the terms of this Declaration.
In the case of a vacancy, Holders of at least a majority of the Interests
entitled to vote, acting at any meeting of Holders held in accordance with
Section 9.2 hereof, or, to the extent permitted by the 1940 Act, a majority vote
of the Trustees continuing in office acting by written instrument or
instruments, may fill such vacancy, and any Trustee so elected by the Trustees
or the Holders shall hold office as provided in this Declaration. The Trustees
may appoint a new Trustee as provided above in anticipation of a vacancy
expected to occur because of the retirement, resignation or removal of a
Trustee, or an increase in number of Trustees, provided that such appointment
shall become effective only when or after the expected vacancy occurs. Subject
to the foregoing sentence, as soon as any Trustee has accepted such appointment
in writing, the Trust estate shall vest in the new Trustee, together with the

<PAGE>

continuing Trustees, without any further act or conveyance, and he or she shall
be deemed a Trustee hereunder. The power of appointment is subject to Section
16(a) of the 1940 Act.

2.5. MEETINGS. Meetings of the Trustees shall be held from time to time
upon the call of the Chairman, if any, or any two Trustees or any officer
authorized to call such meetings by the By-Laws of the Trust. Regular meetings
of the Trustees may be held without call or notice at a time and place fixed by
the By-Laws or by resolution of the Trustees. Notice of any other meeting shall
be mailed or otherwise given not less than 24 hours before the meeting but may
be waived in writing by any Trustee either before or after such meeting. The
attendance of a Trustee at a meeting shall constitute a waiver of notice of such
meeting except in the situation in which a Trustee attends a meeting for the
express purpose of objecting to the transaction of any business on the ground
that the meeting was not lawfully called or convened. The Trustees may act with
or without a meeting. A quorum for all meetings of the Trustees shall be a
majority of the Trustees. Unless provided otherwise in this Declaration, any
action of the Trustees may be taken at a meeting by vote of a majority of the
Trustees present (a quorum being present) or without a meeting by written
consent of a majority (or such larger percentage as may be specified by the
By-Laws) of the Trustees.

Any committee of the Trustees, including an executive committee, if
any, may act with or without a meeting. A quorum for all meetings of any such
committee shall be a majority of the members thereof. Unless provided otherwise
in this Declaration, any action of any such committee may be taken at a meeting
by vote of a majority of the members present (a quorum being present) or without
a meeting by written consent of a majority (or such larger percentage as may be
specified by the By-Laws) of the members.

Any notice, waiver or written consent hereunder may be provided and
delivered to the Trust or a Trustee by facsimile or other similar electronic
mechanism.

With respect to actions of the Trustees and any committee of the
Trustees, Trustees who are Interested Persons of the Trust or otherwise
interested in any action to be taken may be counted for quorum purposes under
this Section 2.5 and shall be entitled to vote to the extent permitted by the
1940 Act.

All or any one or more Trustees may participate in a meeting of the
Trustees or any committee thereof by means of a conference telephone or similar
communications equipment by means of which all individuals participating in the
meeting can hear each other and participation in a meeting by means of such
communications equipment shall constitute presence in person at such meeting.

2.6. CHAIRMAN OF THE BOARD; OFFICERS. The Trustees may elect or
appoint, from time to time, a Chairman of the Board who shall preside at all
meetings of the Trustees and carry out such other duties as the Trustees may
designate. The Trustees may elect or appoint a President, a Secretary, a
Treasurer and such other officers, agents or independent contractors with such
powers as the Trustees may deem to be advisable and may authorize such officers
to appoint such subordinate officers, agents or independent contractors with
such

<PAGE>

powers as the Trustees may deem to be advisable. The Chairman, if any, shall be
and each officer may, but need not, be a Trustee.

2.7. BY-LAWS. The Trustees may adopt and, from time to time, amend or
repeal By-Laws for the conduct of the business of the Trust.

ARTICLE III

POWERS OF TRUSTEES

3.1. GENERAL. The Trustees shall have exclusive and absolute control
over the Trust Property and over the business of the Trust and each Series to
the same extent as if the Trustees were the sole owners of the Trust Property
and such business in their own right, but with such powers of delegation as may
be permitted by this Declaration. The Trustees may perform such acts as in their
sole discretion they deem proper for conducting the business of the Trust and
any Series. The enumeration of or failure to mention any specific power herein
shall not be construed as limiting such exclusive and absolute control. The
powers of the Trustees may be exercised without order of or resort to any court.

The Trustees shall have full power and authority to do any and all acts
and to make and execute any and all contracts and instruments that they may
consider necessary or appropriate in connection with the management of the
Trust. The Trustees shall have full authority and power to make any and all
investments which they, in their uncontrolled discretion, shall deem proper to
accomplish the purposes of this Trust.

3.2. INVESTMENTS. The Trustees shall have the power with respect to the
Trust and each Series to:

(a) conduct, operate and carry on the business of an investment
company;

(b) subscribe for, invest in, reinvest in, purchase or otherwise
acquire, hold, pledge, sell, assign, transfer, exchange, distribute or otherwise
deal in or dispose of United States and foreign currencies and related
instruments including forward contracts, and securities, including common and
preferred stock, warrants, bonds, debentures, time notes and all other evidences
of indebtedness, negotiable or non-negotiable instruments, obligations,
certificates of deposit or indebtedness, commercial paper, repurchase
agreements, reverse repurchase agreements, convertible securities, forward
contracts, options, futures contracts, and other securities, including, without
limitation, those issued, guaranteed or sponsored by any state, territory or
possession of the United States and the District of Columbia and their political
subdivisions, agencies and instrumentalities, or by the United States
Government, any foreign government, or any agency, instrumentality or political
subdivision of the United States Government or any foreign government, or any
international instrumentality, or by any bank, savings institution, corporation
or other business entity organized under the laws of the United States or any
state or under any foreign laws; and to exercise any and all rights, powers and
privileges of ownership or interest in respect of any and all such investments
of any kind and description, including, without limitation, the right to consent
and

<PAGE>

otherwise act with respect thereto, with power to designate one or more Persons
to exercise any of such rights, powers and privileges in respect of any of such
investments; and the Trustees shall be deemed to have the foregoing powers with
respect to any additional instruments in which the Trustees may determine to
invest;

The Trustees shall not be limited to investing in obligations maturing
before the possible termination of the Trust, nor shall the Trustees be limited
by any law limiting the investments which may be made by fiduciaries.

3.3. LEGAL TITLE. Legal title to all Trust Property shall be vested in
the Trustees as joint tenants except that the Trustees shall have the power to
cause legal title to any Trust Property to be held by or in the name of one or
more of the Trustees, or in the name of the Trust or any Series, or in the name
or nominee name of any other Person on behalf of the Trust or any Series, on
such terms as the Trustees may determine.

The right, title and interest of the Trustees in the Trust Property
shall vest automatically in each individual who may hereafter become a Trustee
upon his due election and qualification. Upon the resignation, removal or death
of a Trustee, such resigning, removed or deceased Trustee shall automatically
cease to have any right, title or interest in any Trust Property, and the right,
title and interest of such resigning, removed or deceased Trustee in the Trust
Property shall vest automatically in the remaining Trustees. Such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered.

3.4. SALE AND INCREASES OF INTERESTS. The Trustees, in their
discretion, may, from time to time, without a vote of the Holders, permit any
Institutional Investor to purchase an Interest in a Series, or increase such
Interest, for such type of consideration, including cash or property, at such
time or times (including, without limitation, each business day), and on such
terms as the Trustees may deem best, and may in such manner acquire other assets
(including the acquisition of assets subject to, and in connection with the
assumption of, liabilities) and businesses. Individuals, S corporations,
partnerships and grantor trusts that are beneficially owned by any individual, S
corporation or partnership may not purchase Interests. The Trustees, in their
discretion, may refuse to sell an Interest in a Series to any person without any
cause or reason therefor. A Holder which has redeemed its Interest in a Series
may not be permitted to purchase an Interest in such Series until the later of
60 calendar days after the date of such Redemption or the first day of the
Fiscal Year next succeeding the Fiscal Year during which such Redemption
occurred.

3.5 DECREASES AND REDEMPTIONS OF INTERESTS. Subject to Article VII
hereof, the Trustees, in their discretion, may, from time to time, without a
vote of the Holders, permit a Holder to redeem its Interest in a Series, or
decrease such Interest, for either cash or property, at such time or times
(including, without limitation, each business day), and on such terms as the
Trustees may deem best.

<PAGE>

3.6. BORROW MONEY. The Trustees shall have power on behalf of any
Series to borrow money or otherwise obtain credit and to secure the same by
mortgaging, pledging or otherwise subjecting as security the assets belonging to
such Series, as appropriate, including the lending of portfolio securities, and
to endorse, guarantee, or undertake the performance of any obligation, contract
or engagement of any other Person.

3.7. DELEGATION; COMMITTEES. The Trustees shall have power, consistent
with their continuing exclusive and absolute control over the Trust Property and
over the business of the Trust and any Series, to delegate from time to time to
such of their number or to officers, employees, agents or independent
contractors of the Trust or any Series the doing of such things and the
execution of such instruments in either the name of the Trust or any Series or
the names of the Trustees or otherwise as the Trustees may deem expedient.

3.8. COLLECTION AND PAYMENT. The Trustees shall have power to collect
all property due to the Trust; and to pay all claims, including taxes, against
the Trust Property on behalf of any Series; to prosecute, defend, compromise or
abandon any claims relating to the Trust or the Trust Property on behalf of any
Series; to foreclose any security interest securing any obligation, by virtue of
which any property is owed to the Trust; and to enter into releases, agreements
and other instruments.

3.9. EXPENSES. The Trustees shall have power to incur and pay any
expenses from the Trust Property which in the opinion of the Trustees are
necessary or incidental to carry out any of the purposes of this Declaration,
and to pay reasonable compensation from the Trust Property to themselves as
Trustees. Permitted expenses of the Trust include, but are not limited to,
interest charges, taxes, brokerage fees and commissions; expenses of sales,
increases, decreases or redemptions of Interests; certain insurance premiums;
applicable fees, interest charges and expenses of third parties, including the
Trust's investment advisers, managers, administrators, placement agents,
custodians transfer agents and fund accountants; fees of pricing, interest,
dividend, credit and other reporting services; costs of membership in trade
associations; telecommunications expenses; costs of forming the Trust and its
Series and maintaining its and their existence; costs of preparing and printing
the registration statements and Holder reports of the Trust and each Series and
delivering them to Holders; expenses of meetings of Holders; costs of
maintaining books and accounts; costs of reproduction, stationery and supplies;
fees and expenses of the Trustees; compensation of the Trust's officers and
employees and costs of other personnel performing services for the Trust or any
Series; costs of Trustee meetings; Commission registration fees and related
expenses; state or foreign securities laws registration fees and related
expenses; and for such non-recurring items as may arise, including litigation to
which the Trust or a Series (or a Trustee or officer of the Trust acting as
such) is a party, and for all losses and liabilities by them incurred in
administering the Trust. The Trustees shall have a lien on the assets belonging
to the appropriate Series, or in the case of an expense allocable to more than
one Series, on the assets of each such Series, prior to any rights or interests
of the Holders thereto, for the reimbursement to them of such expenses,
disbursements, losses and liabilities. The Trustees shall fix the compensation
of all officers, employees and Trustees. The Trustees may pay themselves such
compensation for special services, including legal and brokerage services, as
they in good faith may deem reasonable, and

<PAGE>

reimbursement for expenses reasonably incurred by themselves on behalf of the
Trust or any Series.

3.10. MISCELLANEOUS POWERS. The Trustees shall have power to: (a)
employ or contract with such Persons as the Trustees may deem appropriate for
the transaction of the business of the Trust or any Series and terminate such
employees or contractual relationships as they consider appropriate; (b) enter
into joint ventures, partnerships and any other combinations or associations;
(c) purchase, and pay for out of Trust Property insurance policies insuring the
Investment Adviser, Administrator, placement agent, Holders, Trustees, officers,
employees, agents or independent contractors of the Trust against all claims
arising by reason of holding any such position or by reason of any action taken
or omitted by any such Person in such capacity, whether or not the Trust would
have the power to indemnify such Person against such liability; (d) establish
pension, profit-sharing and other retirement, incentive and benefit plans for
the Trustees, officers, employees or agents of the Trust or any Series; (e)
prosecute, defend and settle lawsuits in the name of the Trust or any Series and
pay settlements and judgments out of the Trust Property; (f) to the extent
permitted by law, indemnify any Person with whom the Trust has dealings,
including the Investment Adviser, Administrator, placement agent, Holders,
Trustees, officers, employees, agents or independent contractors of the Trust,
to such extent as the Trustees shall determine; (g) guarantee indebtedness or
contractual obligations of others; (h) determine and change the Fiscal Year of
the Trust or any Series and the method by which its accounts shall be kept; and
(i) adopt a seal for the Trust or any Series, but the absence of such a seal
shall not impair the validity of any instrument executed on behalf of the Trust
or such Series.

3.11. FURTHER POWERS. The Trustees shall have power to conduct the
business of the Trust or any Series and carry on its operations in any and all
of its branches and maintain offices, whether within or without the State of New
York, in any and all states of the United States of America, in the District of
Columbia, and in any and all commonwealths, territories, dependencies, colonies,
possessions, agencies or instrumentalities of the United States of America and
of foreign governments, and to do all such other things and execute all such
instruments as they deem necessary, proper, appropriate or desirable in order to
promote the interests of the Trust or any Series although such things are not
herein specifically mentioned. Any determination as to what is in the interests
of the Trust or any Series which is made by the Trustees in good faith shall be
conclusive. In construing the provisions of this Declaration, the presumption
shall be in favor of a grant of power to the Trustees. The Trustees shall not be
required to obtain any court order in order to deal with Trust Property.

ARTICLE IV

Investment Advisory, Administration
AND PLACEMENT AGENT ARRANGEMENTS; CUSTODIAN

4.1. INVESTMENT ADVISORY AND OTHER ARRANGEMENTS. The Trustees may in
their discretion, from time to time, enter into investment advisory contracts,
administration contracts, placement agent agreements or other service agreements
whereby the other party to such contract or agreement shall undertake to furnish
with respect to one or more particular Series such investment advisory,

<PAGE>

administration, placement agent and/or other services as the Trustees shall,
from time to time, consider appropriate or desirable and all upon such terms and
conditions as the Trustees may in their sole discretion determine. The other
party to any such investment advisory contract or administration contract is
referred to as an "Investment Adviser" or "Administrator," respectively.
Notwithstanding any provision of this Declaration, the Trustees may authorize
any Investment Adviser (subject to such general or specific instructions as the
Trustees may, from time to time, adopt) to employ one or more subadvisers and to
effect purchases, sales, loans or exchanges of Trust Property on behalf of any
Series or may authorize any officer, employee or Trustee to effect such
purchases, sales, loans or exchanges pursuant to recommendations of any such
Investment Adviser (all without any further action by the Trustees).

4.2. PARTIES TO CONTRACT. Any contract of the character described in
Section 4.1 or Section 4.3 hereof or in the By-Laws of the Trust may be entered
into with any corporation, firm, trust or association, although one or more of
the Trustees or officers of the Trust may be an officer, director, Trustee,
shareholder or member of such other party to the contract, and no such contract
shall be invalidated or rendered voidable by reason of the existence of any such
relationship, nor shall any individual holding such relationship be liable
merely by reason of such relationship for any loss or expense to the Trust or
any Series under or by reason of any such contract or accountable for any profit
realized directly or indirectly therefrom, provided that the contract when
entered into was reasonable and fair and not inconsistent with the provisions of
this Article IV or the By-Laws. The same Person may be the other party to one or
more contracts entered into pursuant to Section 4.1 or Section 4.3 hereof or the
By-Laws, and any individual may be financially interested or otherwise
affiliated with Persons who are parties to any or all of the contracts mentioned
in this Section 4.2 or in the By-Laws.

4.3 CUSTODIAN. The Trustees shall at all times place and maintain the
securities and similar investments of the Trust on behalf of each Series in
custody meeting the requirements of Section 17(f) of the 1940 Act and the rules
thereunder. The Trustees, on behalf of the Trust or any Series, may enter into
an agreement with a custodian on terms and conditions acceptable to the
Trustees, providing for the custodian, among other things, (a) to hold the
securities owned by the Trust on behalf of any Series and deliver the same upon
written order or oral order confirmed in writing, (b) to receive and receipt for
any moneys due to the Trust on behalf of any Series and deposit the same in its
own banking department or elsewhere, (c) to disburse such funds upon orders or
vouchers, and (d) to employ one or more subcustodians.

4.4. 1940 ACT GOVERNANCE. Any contract referred to in Section 4.1
hereof shall be consistent with and subject to the applicable requirements of
Section 15 of the 1940 Act and the rules and orders thereunder with respect to
its continuance in effect, its termination, and the method of authorization and
approval of such contract or renewal. No amendment to a contract referred to in
Section 4.1 hereof shall be effective unless assented to in a manner consistent
with the requirements of Section 15 of the 1940 Act, and the rules and orders
thereunder.

<PAGE>

ARTICLE V

Liability of Holders; Limitations of
LIABILITY OF TRUSTEES, OFFICERS, ETC.

5.1. LIABILITY OF HOLDERS; INDEMNIFICATION. Each Holder of an Interest
in a Series shall be jointly and severally liable with every other Holder of an
Interest in that Series (with rights of contribution INTER SE in proportion to
their respective Interests in the Series) for the liabilities and obligations of
that Series (and of no other Series) in the event that the Trust fails to
satisfy such liabilities and obligations from the assets of that Series;
provided, however, that, to the extent assets of that Series are available in
the Trust, the Trust shall indemnify and hold each Holder harmless from and
against any claim or liability to which such Holder may become subject by reason
of being or having been a Holder of an Interest in that Series to the extent
that such claim or liability imposes on the Holder an obligation or liability
which, when compared to the obligations and liabilities imposed on other Holders
of Interests in that Series, is greater than such Holder's Interest
(proportionate share), and shall reimburse such Holder for all legal and other
expenses reasonably incurred by such Holder in connection with any such claim or
liability. The rights accruing to a Holder under this Section 5.1 shall not
exclude any other right to which such Holder may be lawfully entitled, nor shall
anything contained herein restrict the right of the Trust to indemnify or
reimburse a Holder in any appropriate situation even though not specifically
provided herein. Notwithstanding the indemnification procedure described above,
it is intended that each Holder of an Interest in a Series shall remain jointly
and severally liable to the creditors of that Series as a legal matter. The
liabilities of a particular Series and the right to indemnification granted
hereunder to Holders of Interests in such Series shall not be enforceable
against any other Series or Holders of Interests in any other Series.

5.2. LIMITATIONS OF LIABILITY OF TRUSTEES, OFFICERS, EMPLOYEES, AGENTS,
INDEPENDENT CONTRACTORS TO THIRD PARTIES. No Trustee, officer, employee, agent
or independent contractor (except in the case of an agent or independent
contractor to the extent expressly provided by written contract) of the Trust or
any Series shall be subject to any personal liability whatsoever to any Person,
other than the Trust or the Holders, in connection with Trust Property or the
affairs of the Trust; and all such Persons shall look solely to the Trust
Property for satisfaction of claims of any nature against a Trustee, officer,
employee, agent or independent contractor (except in the case of an agent or
independent contractor to the extent expressly provided by written contract) of
the Trust arising in connection with the affairs of the Trust.

5.3. LIMITATIONS OF LIABILITY OF TRUSTEES, OFFICERS OR EMPLOYEES TO
TRUST, HOLDERS, ETC. No Trustee, officer or employee of the Trust shall be
liable to the Trust or the Holders for any action or failure to act (including,
without limitation, the failure to compel in any way any former or acting
Trustee to redress any breach of trust) except for such Person's own bad faith,
willful misfeasance, gross negligence or reckless disregard of such Person's
duties.

5.4. MANDATORY INDEMNIFICATION. The Trust shall indemnify, to the
fullest extent permitted by law (including the 1940 Act), each Trustee, officer
or employee of the Trust (including any Person who serves at the Trust's request

<PAGE>

as a director, officer or trustee of another organization in which the Trust has
any interest as a shareholder, creditor or otherwise) against all liabilities
and expenses (including amounts paid in satisfaction of judgments, in
compromise, as fines and penalties, and as counsel fees) reasonably incurred by
such Person in connection with the defense or disposition of any action, suit or
other proceeding, whether civil or criminal, in which such Person may be
involved or with which such Person may be threatened, while in office or
thereafter, by reason of such Person being or having been such a Trustee,
officer, employee, agent or independent contractor, except with respect to any
matter as to which such Person shall have been adjudicated to have acted in bad
faith, willful misfeasance, gross negligence or reckless disregard of such
Person's duties, such liabilities and expenses being liabilities only of the
Series out of which such claim for indemnification arises; provided, however,
that as to any matter disposed of by a compromise payment by such Person,
pursuant to a consent decree or otherwise, no indemnification either for such
payment or for any other expenses shall be provided unless there has been a
determination that such Person did not engage in willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
such Person's office (i) by the court or other body approving the settlement or
other disposition; or (ii) based upon a review of readily available facts (as
opposed to a full trial-type inquiry), by written opinion from independent legal
counsel approved by the Trustees; or (iii) by a majority of the Trustees who are
neither Interested Persons of the Trust nor parties to the matter, based upon a
review of readily available facts (as opposed to a full trial-type inquiry). The
rights accruing to any Person under these provisions shall not exclude any other
right to which such Person may be lawfully entitled; provided that no Person may
satisfy any right of indemnity or reimbursement granted in this Section 5.4 or
in Section 5.2 hereof or to which such Person may be otherwise entitled except
out of the Trust Property. The rights of indemnification provided herein may be
insured against by policies maintained by the Trust. The Trustees may make
advance payments in connection with indemnification under this Section 5.4,
provided that the indemnified Person shall have given a written undertaking to
reimburse the Trust in the event it is subsequently determined that such Person
is not entitled to such indemnification, and provided further that either (i)
such Person shall have provided appropriate security for such undertaking, or
(ii) the Trust is insured against losses arising out of any such advance
payments, or (iii) either a majority of the Trustees who are neither Interested
Persons of the Trust nor parties to the matter, or independent legal counsel in
a written opinion, shall have determined, based upon a review of readily
available facts (as opposed to a trial-type inquiry or full investigation), that
there is reason to believe that such Person will not be disqualified from
indemnification under this Section 5.4.

5.5. NO BOND REQUIRED OF TRUSTEES. No Trustee shall, as such, be
obligated to give any bond or surety or other security for the performance of
any of such Trustee's duties hereunder.

5.6. NO DUTY OF INVESTIGATION; NOTICE IN TRUST INSTRUMENTS, ETC. No
purchaser, lender or other Person dealing with any Trustee, officer, employee,
agent or independent contractor of the Trust or any Series shall be bound to
make any inquiry concerning the validity of any transaction purporting to be
made by such Trustee, officer, employee, agent or independent contractor or be
liable for the application of money or property paid, loaned or delivered to or
on the order of such Trustee, officer, employee, agent or independent
contractor. Every

<PAGE>

obligation, contract, instrument, certificate or other interest or undertaking
of the Trust or any Series, and every other act or thing whatsoever executed in
connection with the Trust or any Series shall be conclusively taken to have been
executed or done by the executors thereof only in their capacity as Trustees,
officers, employees, agents or independent contractors of the Trust or any
Series. Every written obligation, contract, instrument, certificate or other
interest or undertaking of the Trust or any Series made or sold by any Trustee,
officer or employee of the Trust or any Series, in such capacity, shall contain
an appropriate recital to the effect that the Trustee, officer or employee of
the Trust or any Series shall not personally be bound by or liable thereunder,
nor shall resort be had to their private property for the satisfaction of any
obligation or claim thereunder, and appropriate references shall be made therein
to the Declaration, and may contain any further recital which they may deem
appropriate, but the omission of such recital shall not operate to impose
personal liability on any Trustee, officer or employee of the Trust or any
Series. Subject to the provisions of the 1940 Act, the Trust may maintain
insurance for the protection of the Trust Property, the Holders, and the
Trustees, officers or employees of the Trust and any Series in such amount as
the Trustees shall deem adequate to cover possible tort liability, and such
other insurance as the Trustees in their sole judgment shall deem advisable.

5.7. RELIANCE ON EXPERTS, ETC. Each Trustee, officer or employee of the
Trust and any Series shall, in the performance of such Person's duties, be fully
and completely justified and protected with regard to any act or any failure to
act resulting from reliance in good faith upon the books of account or other
records of the Trust or any Series (whether or not the Trust or any Series would
have the power to indemnify such Persons against such liability), upon an
opinion of counsel, or upon reports made to the Trust or any Series by any of
its officers or employees or by any Investment Adviser or Administrator,
accountant, appraiser or other experts or consultants selected with reasonable
care by the Trustees, officers or employees of the Trust or any Series,
regardless of whether such counsel or expert may also be a Trustee.

5.8. NO REPEAL OR MODIFICATION. Any repeal or modification of this
Article V by the Holders, or adoption or modification of any other provision of
this Declaration or the By-Laws inconsistent with this Article V, shall be
prospective only, to the extent that such repeal or modification would, if
applied retrospectively, adversely affect any limitation on the liability of any
Person or indemnification available to any indemnified Person with respect to
any act or omission which occurred prior to such repeal, modification or
adoption.

ARTICLE VI

INTERESTS

6.1. INTERESTS. The beneficial interest in the Trust Property shall
consist of non-transferable Interests. Interests may be sold only to
Institutional Investors, as may be approved by the Trustees, for cash or other
consideration acceptable to the Trustees, subject to the requirements of the
1940 Act. The Interests shall be personal property giving only the rights in
this Declaration specifically set forth. The value of an Interest shall be equal
to the Book Capital Account balance of the Holder of the Interest.

<PAGE>

The Trustees shall have authority, from time to time, to establish
Series, each of which shall be a separate subtrust and the Interests in which
shall be separate and distinct from the Interests in any other Series. The
Series shall include, without limitation, those Series specifically established
and designated pursuant to Section 6.2 hereof, and such other Series as the
Trustees may deem necessary or desirable. The Trustees shall have exclusive
power without the requirement of Holder approval to establish and designate such
separate and distinct Series, and, subject to the provisions of this Declaration
and the 1940 Act, to fix and determine the rights of Holders of Interests in
such Series, including with respect to the price, terms and manner of purchase
and redemption, dividends and other distributions, rights on liquidation,
sinking or purchase fund provisions, conversion rights and conditions under
which the Holders of the several Series shall have separate voting rights or no
voting rights.

6.2. ESTABLISHMENT AND DESIGNATION OF SERIES. The establishment and
designation of any Series shall be effective upon the execution by the Secretary
or an Assistant Secretary of the Trust, pursuant to authorization by a majority
of the Trustees, of an instrument setting forth such establishment and
designation and the relative rights and preferences of the Interests in such
Series, or as otherwise provided in such instrument. At any time that there are
no Interests outstanding of any particular Series previously established and
designated, the Trustees may by resolution adopted by a majority of their
number, and evidenced by an instrument executed by the Secretary or an Assistant
Secretary of the Trust, abolish that Series and the establishment and
designation thereof. Each instrument referred to in this paragraph shall have
the status of an amendment to this Declaration of Trust.

Without limiting the authority of the Trustees set forth above to
establish and designate further Series, the Trustees hereby establish and
designate the Series set forth on Schedule A hereto. The Interests in each of
these Series and any Interests in any further Series that may from time to time
be established and designated by the Trustees shall (unless the Trustees
otherwise determine with respect to some further Series at the time of
establishing and designating the same) have the following relative rights and
preferences:

(a) ASSETS BELONGING TO SERIES. All consideration received by the Trust
for the issue or sale of Interests in a particular Series, together with all
assets in which such consideration is invested or reinvested, all income,
earnings, profits, and proceeds thereof, including any proceeds derived from the
sale, exchange or liquidation of such assets, and any funds or payments derived
from any reinvestment of such proceeds in whatever form the same may be, shall
be held by the Trustees in a separate trust for the benefit of the Holders of
Interests in that Series and shall irrevocably belong to that Series for all
purposes, and shall be so recorded upon the books of account of the Trust. Such
consideration, assets, income, earnings, profits, and proceeds thereof,
including any proceeds derived from the sale, exchange or liquidation of such
assets, and any funds or payments derived from any reinvestment of such
proceeds, in whatever form the same may be, are herein referred to as "assets
belonging to" that Series. No Series shall have any right to or interest in the
assets belonging to any other Series, and no Holder shall have any right or
interest with respect to the assets belonging to any Series in which it does not
hold an Interest.

<PAGE>

(b) LIABILITIES BELONGING TO SERIES. The assets belonging to each
particular Series shall be charged with the liabilities in respect of that
Series and all expenses, costs, charges and reserves attributable to that
Series. The liabilities, expenses, costs, charges and reserves so charged to a
Series are herein referred to as "liabilities belonging to" that Series. No
Series shall be liable for or charged with the liabilities belonging to any
other Series, and no Holder shall be subject to any liabilities belonging to any
Series in which it does not hold an Interest.

(c) VOTING. On each matter submitted to a vote of the Holders, each
Holder shall be entitled to a vote proportionate to its Interest as recorded on
the books of the Trust. Each Series shall vote as a separate class except as to
voting for Trustees, as otherwise required by the 1940 Act, or if determined by
the Trustees to be a matter which affects all Series. As to any matter which
does not affect the interest of all Series, only the Holders in the one or more
affected Series shall be entitled to vote. On each matter submitted to a vote of
the Holders, a Holder may apportion its vote with respect to a proposal in the
same proportion as its own shareholders voted with respect to that proposal.

6.3. NON-TRANSFERABILITY. A Holder may not transfer its Interest.

6.4. REGISTER OF INTERESTS. A register shall be kept at the Trust under
the direction of the Trustees which shall contain the name, address and Book
Capital Account balance of each Holder in each Series. Such register shall be
conclusive as to the identity of the Holders. No Holder shall be entitled to
receive payment of any distribution, nor to have notice given to it as herein
provided, until it has given its address to such officer or agent of the Trust
as is keeping such register for entry thereon.

ARTICLE VII

INCREASES, DECREASES AND REDEMPTIONS OF INTERESTS

Subject to applicable law, to the provisions of this Declaration and to
such restrictions as may from time to time be adopted by the Trustees, each
Holder may vary its Interest in any Series at any time by increasing (through a
capital contribution) or decreasing (through a capital withdrawal) or by a
Redemption of its Interest. An increase in the Interest of a Holder in a Series
shall be reflected as an increase in the Book Capital Account balance of that
Holder in that Series and a decrease in the Interest of a Holder in a Series or
the Redemption of the Interest of that Holder shall be reflected as a decrease
in the Book Capital Account balance of that Holder in that Series. The Trust
shall, upon appropriate and adequate notice from any Holder, increase, decrease
or redeem such Holder's Interest for an amount determined by the application of
a formula adopted for such purpose by resolution of the Trustees; provided that
(a) the amount received by the Holder upon any such decrease or Redemption shall
not exceed the decrease in the Holder's Book Capital Account balance effected by
such decrease or Redemption of its Interest, and (b) if so authorized by the
Trustees, the Trust may, at any time and from time to time, charge fees for
effecting any such decrease or Redemption, at such rates as the Trustees may
establish, and may, at any time and from time to time, suspend such right of
decrease or Redemption. The procedures for effecting decreases or Redemptions
shall be as determined by the Trustees from time to time.

<PAGE>

ARTICLE VIII

Determination of Book Capital Account
BALANCES AND DISTRIBUTIONS

8.1. BOOK CAPITAL ACCOUNT BALANCES. The Book Capital Account balance of
Holders with respect to a particular Series shall be determined on such days and
at such time or times as the Trustees may determine. The Trustees shall adopt
resolutions setting forth the method of determining the Book Capital Account
balance of each Holder. The power and duty to make calculations pursuant to such
resolutions may be delegated by the Trustees to the Investment Adviser or
Administrator, custodian, or such other Person as the Trustees may determine.
Upon the Redemption of an Interest, the Holder of that Interest shall be
entitled to receive the balance of its Book Capital Account. A Holder may not
transfer its Book Capital Account balance.

8.2. ALLOCATIONS AND DISTRIBUTIONS TO HOLDERS. The Trustees shall, in
compliance with the Code, the 1940 Act and generally accepted accounting
principles, establish the procedures by which the Trust shall make with respect
to each Series (i) the allocation of unrealized gains and losses, taxable income
and tax loss, and profit and loss, or any item or items thereof, to each Holder,
(ii) the payment of distributions, if any, to Holders, and (iii) upon
liquidation, the final distribution of items of taxable income and expense. Such
procedures shall be set forth in writing and be furnished to the Trust's
accountants. The Trustees may amend the procedures adopted pursuant to this
Section 8.2 from time to time. The Trustees may retain from the net profits of
each Series such amount as they may deem necessary to pay the liabilities and
expenses of that Series.

8.3. POWER TO MODIFY FOREGOING PROCEDURES. Notwithstanding any of the
foregoing provisions of this Article VIII, the Trustees may prescribe, in their
absolute discretion, such other bases and times for determining the net income
and net assets of the Trust and of each Series, the allocation of income of the
Trust and of each Series, the Book Capital Account balance of each Holder, or
the payment of distributions to the Holders as they may deem necessary or
desirable to enable the Trust or a Series to comply with any provision of the
1940 Act or any order of exemption issued by the Commission or with the Code.

ARTICLE IX

HOLDERS

9.1. RIGHTS OF HOLDERS. The ownership of the Trust Property and the
right to conduct any business described herein are vested exclusively in the
Trustees, and the Holders shall have no right or title therein other than the
beneficial interest conferred by their Interests and they shall have no power or
right to call for any partition or division of any Trust Property.

The Trust shall be entitled to treat a Holder of record as the holder
in fact and shall not be bound to recognize any equitable or other claim of
interest in such Holder's Interest on the part of any other entity except as may
be otherwise expressly provided by law.

<PAGE>

In addition, the Holders shall have power to vote only with respect to
(a) the election of Trustees as provided in Article II, Section 2.4; (b) the
removal of Trustees as provided in Article II, Section 2.3; (c) any investment
advisory contract as provided in Article IV, Section 4.1; (d) any dissolution of
a Series as provided in Article X, Section 10.2; (e) the amendment of this
Declaration to the extent and as provided in Article X, Section 10.4; (f) any
merger, consolidation or sale of assets as provided in Article X, Section 10.5;
and (g) such additional matters relating to the Trust as may be required or
authorized by law, by this Declaration or the By-Laws or any registration
statement of the Trust filed with the Commission, or as the Trustees may
consider desirable.

9.2. MEETINGS OF HOLDERS. Meetings of Holders may be called at any time
by a majority of the Trustees and shall be called by any Trustee upon written
request of Holders holding, in the aggregate, not less than 10% of the Interests
in one or more Series (if the meeting relates solely to such Series), or not
less than 10% of the Interests in the Trust (if the meeting relates to the Trust
and not solely to one or more particular Series), such request specifying the
purpose or purposes for which such meeting is to be called. Any such meeting
shall be held within or without the State of New York and within or without the
United States of America on such day and at such time as the Trustees shall
designate. Holders of at least one-third of the Interests in one or more Series
(if the meeting relates solely to such one or more Series) or Holders of at
least one-third of the Interests in the Trust (if the meeting relates to the
Trust and not solely to one or more particular Series), present in person or by
proxy, shall constitute a quorum for the transaction of any business, except as
may otherwise be required by the 1940 Act, other applicable law, this
Declaration or the By-Laws. If a quorum is present at a meeting, an affirmative
vote of the Holders present, in person or by proxy, holding more than 50% of the
total Interests of the Holders present in a Series or the Trust, as applicable,
either in person or by proxy, at such meeting constitutes the action of the
Holders in such Series or the Trust, as applicable, unless a greater number of
affirmative votes is required by the 1940 Act, other applicable law, this
Declaration or the By-Laws, and except that a plurality of the total Interests
of the Holders present shall elect a Trustee. All or any one of more Holders may
participate in a meeting of Holders by means of a conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other and participation in a meeting by means of such
communications equipment shall constitute presence in person at such meeting.

9.3. NOTICE OF MEETINGS. Notice of each meeting of Holders, stating the
time, place and purposes of the meeting, shall be given by the Trustees by mail
to each Holder of the Series or the Trust, as the case may be, at its registered
address, mailed at least 10 days and not more than 60 days before the meeting.
Notice of any meeting may be waived in writing by any Holder either before or
after such meeting. The attendance of a Holder at a meeting shall constitute a
waiver of notice of such meeting except in the situation in which a Holder
attends a meeting for the express purpose of objecting to the transaction of any
business on the ground that the meeting was not lawfully called or convened. At
any meeting, any business properly before the meeting may be considered whether
or not stated in the notice of the meeting. Any adjourned meeting may be held as
adjourned without further notice.

<PAGE>

9.4. RECORD DATE FOR MEETINGS, DISTRIBUTIONS, ETC. For the purpose of
determining the Holders who are entitled to notice of and to vote at any
meeting, or to participate in any distribution, or for the purpose of any other
action, the Trustees may from time to time fix a date, not more than 90 days
prior to the date of any meeting of Holders or the payment of any distribution
or the taking of any other action, as the case may be, as a record date for the
determination of the Persons to be treated as Holders of the Series or the
Trust, as the case may be, for such purpose.

9.5. PROXIES, ETC. At any meeting of Holders, any Holder entitled to
vote thereat may vote by proxy, provided that no proxy shall be voted at any
meeting unless it shall have been placed on file with the Secretary, or with
such other officer or agent of the Trust as the Secretary may direct, for
verification prior to the time at which such vote is to be taken. A proxy may be
revoked by a Holder at any time before it has been exercised by placing on file
with the Secretary, or with such other officer or agent of the Trust as the
Secretary may direct, a later dated proxy or written revocation. Pursuant to a
resolution of a majority of the Trustees, proxies may be solicited in the name
of the Trust or of one or more Trustees or of one or more officers of the Trust.
Only Holders on the record date shall be entitled to vote. Each such Holder
shall be entitled to a vote proportionate to its Interest in the Series or the
Trust, as the case may be. When an Interest is held jointly by several Persons,
any one of them may vote at any meeting in person or by proxy in respect of such
Interest, but if more than one of them is present at such meeting in person or
by proxy, and such joint owners or their proxies so present disagree as to any
vote to be cast, such vote shall not be received in respect of such Interest. A
proxy purporting to be executed by or on behalf of a Holder, including proxies
received via telecopy, shall be deemed valid unless challenged at or prior to
its exercise, and the burden of proving invalidity shall rest on the challenger.

9.6. REPORTS. As to each Series, the Trustees shall cause to be
prepared and furnished to each Holder thereof, at least annually as of the end
of each Fiscal Year, a report of operations containing a balance sheet and a
statement of income of such Series prepared in conformity with generally
accepted accounting principles and an opinion of an independent public
accountant on such financial statements. The Trustees shall, in addition, with
respect to each Series furnish to each Holder of such Series at least
semi-annually interim reports of operations containing an unaudited balance
sheet as of the end of such period and an unaudited statement of income for the
period from the beginning of the then-current Fiscal Year to the end of such
period.

9.7. HOLDER ACTION BY WRITTEN CONSENT. Any action which may be taken on
behalf of the Trust or any Series by Holders may be taken without a meeting if
Holders holding more than 50% of all Interests entitled to vote (or such larger
proportion thereof as shall be required by any express provision of this
Declaration or of applicable law) consent to the action in writing and the
written consents are filed with the records of the meetings of Holders. Such
consents shall be treated for all purposes as a vote taken at a meeting of
Holders. Each such written consent shall be executed by or on behalf of the
Holder delivering such consent and shall bear the date of such execution. No
such written consent shall be effective to take the action referred to therein
unless, within one year of the earliest dated consent, written consents executed

<PAGE>

by a sufficient number of Holders to take such action are filed with the records
of the meetings of Holders.

9.8. NOTICES. Any and all communications, including any and all notices
to which any Holder may be entitled, shall be deemed duly served or given if
mailed, postage prepaid, addressed to a Holder at its last known address as
recorded on the register of the Trust or if delivered to a Holder by courier or
by facsimile or other similar electronic mechanism.

ARTICLE X

Duration; Termination; Dissolution;
AMENDMENT; MERGERS; ETC.

10.1. DURATION. Subject to possible dissolution or termination in
accordance with the provisions of Section 10.2 and Section 10.3 hereof,
respectively, the Trust created hereby shall continue until the expiration of 20
years after the death of the last survivor of the initial Trustees named herein
and the following named persons:

<TABLE>
<CAPTION>
Date of
NAME ADDRESS BIRTH

<S> <C>
Emily Shea O'Dette 256 Oldham Street
Pembroke, MA 02359 06/01/94

Gray Tilton Gibson c/o The Fay School
48 Main Street
Southboro, MA 01772-9106 5/27/94

Abigail Foote Coolidge 483 Pleasant Street, No. 9 05/04/94
Belmont, MA 02178

Michelle Muriel Rumery 18 Rio Vista Street 07/11/93
North Billerica, MA 01862

Nicole Catherine Rumery 18 Rio Vista Street 12/21/91
North Billerica, MA 01862

Shelby Sara Wyetzner 8 Oak Brook Lane 10/18/90
Merrick, NY 11566

Amanda Jehan Sher Coolidge 483 Pleasant Street, #9 08/16/89
Belmont, MA 02178

Caroline Bolger Cima 11 Beechwood Lane 12/23/88
Scarsdale, NY 10583

Adriana L. Saldana 58 Newell Road 03/22/88
Newton, MA 02166
</TABLE>

10.2. DISSOLUTION. Any Series shall be dissolved (i) by the affirmative
vote of the Holders of not less than two-thirds of the Interests in

<PAGE>

the Series at any meeting of the Holders or by an instrument in writing, without
a meeting, signed by a majority of the Trustees and consented to by the Holders
of not less than two-thirds of such Interests, (ii) by the Trustees by written
notice of dissolution to the Holders of the Interests in the Series, or (iii)
upon the bankruptcy or withdrawal of a Holder of an Interest in the Series,
unless the remaining Holders of Interests in such Series, by majority vote,
agree to continue the Series. The Trust may be dissolved by action of the
Trustees upon the dissolution of the last remaining Series.

10.3. TERMINATION.

(a) Upon an event of dissolution of the Trust or a Series, unless the
Trust or Series is continued in accordance with the proviso to Section 10.2
above, the Trust or Series, as applicable, shall be terminated in accordance
with the following provisions:

(i) the Trust or Series, as applicable, shall carry on no business
except for the purpose of winding up its affairs;

(ii) the Trustees shall proceed to wind up
the affairs of the Trust or Series, as applicable, and all of
the powers of the Trustees under this Declaration shall
continue until the affairs of the Trust or Series have been
wound up, including the power to fulfill or discharge the
contracts of the Trust or Series, collect the assets of the
Trust of Series, sell, convey, assign, exchange or otherwise
dispose of all or any part of the Trust Property affected to
one or more Persons at public or private sale for
consideration which may consist in whole or in part of cash,
securities or other property of any kind, discharge or pay the
liabilities of the Trust or Series, and do all other acts
appropriate to liquidate the business of the Trust or Series;
provided that any sale, conveyance, assignment, exchange or
other disposition of all or substantially all the Trust
Property or substantially all of the assets belonging to a
particular Series, other than for cash, shall require approval
of the principal terms of the transaction and the nature and
amount of the consideration by the vote of Holders holding
more than 50% of the total Interests in the Trust or Series,
as applicable; and

(iii) after paying or adequately providing
for the payment of all liabilities of the Trust or of the
Series being terminated, and upon receipt of such releases,
indemnities and refunding agreements as they deem necessary
for their protection, the Trustees shall distribute the
remaining Trust Property of the Trust or Series, as
applicable, in cash or in kind or partly each, among the
Holders according to their respective rights as set forth in
the procedures established pursuant to Section 8.2 hereof.

(b) Upon termination of the Trust or Series and distribution to the
Holders as herein provided, a majority of the Trustees shall execute and file
with the records of the Trust an instrument in writing setting forth the fact of
such termination and distribution. Upon termination of the Trust, the Trustees
shall thereupon be discharged from all further liabilities and duties hereunder,
and the rights and interests of all Holders shall thereupon cease.

<PAGE>

10.4. AMENDMENT PROCEDURE.

(a) The Trustees may, without any vote of Holders, amend or otherwise
supplement this Declaration by an instrument in writing executed by a majority
of the Trustees, provided that Holders shall have the right to vote on any
amendment (a) which would affect the voting rights of Holders granted in Article
IX, Section 9.1, (b) to this Section 10.4, (c) required to be approved by
Holders by law or by the Trust's registration statement filed with the
Commission, or (d) submitted to them by the Trustees. Any amendment submitted to
Holders which the Trustees determine would affect the Holders of certain but not
all Series shall be authorized by vote of the Holders of such Series affected
and no vote shall be required of Holders of a Series not affected. Any amendment
applicable to the Trust as a whole, unless otherwise required by law or by this
Declaration or the By-Laws, shall be authorized by vote of the Holders of the
Trust. Notwithstanding anything else herein, any amendment to Article V which
would have the effect of reducing the indemnification and other rights provided
thereby and any repeal or amendment of this sentence shall each require the
affirmative vote of the Holders of two-thirds of the Interests entitled to vote
thereon.

(b) No amendment may be made under Section 10.4(a) hereof which would
change any rights with respect to any Interest by reducing the amount payable
thereon upon liquidation of the Trust or any Series or by diminishing or
eliminating any voting rights pertaining thereto, except with the vote or
consent of Holders of two-thirds of all Interests which would be so affected by
such amendment.

(c) A certification in recordable form executed by a majority of the
Trustees setting forth an amendment and reciting that it was duly adopted by the
Holders or by the Trustees as aforesaid or a copy of the Declaration, as
amended, in recordable form, and executed by a majority of the Trustees, shall
be conclusive evidence of such amendment when filed with the records of the
Trust.

Notwithstanding any other provision hereof, until such time as
Interests are first sold, this Declaration may be terminated or amended in any
respect by the affirmative vote of a majority of the Trustees at any meeting of
Trustees or by an instrument executed by a majority of the Trustees.

10.5. MERGER, CONSOLIDATION AND SALE OF ASSETS. The Trust or any Series
may merge or consolidate with any other corporation, association, trust or other
organization or may sell, lease or exchange all or substantially all of the
Trust Property, or assets belonging to such Series, as applicable, including
good will, upon such terms and conditions and for such consideration when and as
authorized at any meeting of Holders called for such purpose by Majority
Interests Vote of Interests in the Series affected by such action, or by an
instrument in writing without a meeting, consented to by Holders of not less
than a majority of the Interests in the Series affected by such action, and any
such merger, consolidation, sale, lease or exchange shall be deemed for all
purposes to have been accomplished under and pursuant to the law of the State of
New York, provided however that no such vote shall be required where by
reorganization,

<PAGE>

purchase of assets or otherwise, the Trust or any affected Series is the
surviving entity.

10.6. INCORPORATION. Upon a Majority Interests Vote, the Trustees may
cause to be organized or assist in organizing a corporation or corporations
under the law of any jurisdiction or a trust, partnership, association or other
organization to take over the Trust Property or to carry on any business in
which the Trust directly or indirectly has any interest, and to sell, convey and
transfer the Trust Property to any such corporation, trust, partnership,
association or other organization in exchange for the equity interests thereof
or otherwise, and to lend money to, subscribe for the equity interests of, and
enter into any contract with any such corporation, trust, partnership,
association or other organization, or any corporation, trust, partnership,
association or other organization in which the Trust holds or is about to
acquire equity interests. The Trustees may also cause a merger or consolidation
between the Trust or any successor thereto and any such corporation, trust,
partnership, association or other organization if and to the extent permitted by
law. Nothing contained herein shall be construed as requiring approval of the
Holders for the Trustees to organize or assist in organizing one or more
corporations, trusts, partnerships, associations or other organizations and
selling, conveying or transferring a portion of the Trust Property to one or
more of such organizations or entities.

ARTICLE XI

MISCELLANEOUS

11.1. CERTIFICATE OF DESIGNATION; AGENT FOR SERVICE OF PROCESS. If
required by New York law, the Trust shall file, with the Department of State of
the State of New York, a certificate, in the name of the Trust and executed by
an officer of the Trust, designating the Secretary of State of the State of New
York as an agent upon whom process in any action or proceeding against the Trust
or any Series may be served.

11.2. GOVERNING LAW. This Declaration is executed by the Trustees and
delivered in the State of New York and with reference to the law thereof, and
the rights of all parties and the validity and construction of every provision
hereof shall be subject to and construed in accordance with the law of the State
of New York and reference shall be specifically made to the trust law of the
State of New York as to the construction of matters not specifically covered
herein or as to which an ambiguity exists.

11.3. COUNTERPARTS. This Declaration may be simultaneously executed in
several counterparts, each of which shall be deemed to be an original, and such
counterparts, together, shall constitute one and the same instrument, which
shall be sufficiently evidenced by any one such original counterpart.

11.4. RELIANCE BY THIRD PARTIES. Any certificate executed by an
individual who, according to the records of the Trust or of any recording office
in which this Declaration may be recorded, appears to be a Trustee hereunder,
certifying to: (a) the number or identity of Trustees or Holders, (b) the due
authorization of the execution of any instrument or writing, (c) the form of any

<PAGE>

vote passed at a meeting of Trustees or Holders, (d) the fact that the number of
Trustees or Holders present at any meeting or executing any written instrument
satisfies the requirements of this Declaration, (e) the form of any By-Laws
adopted by or the identity of any officer elected by the Trustees, or (f) the
existence of any fact or facts which in any manner relate to the affairs of the
Trust, shall be conclusive evidence as to the matters so certified in favor of
any Person dealing with the Trustees.

11.5. PROVISIONS IN CONFLICT WITH LAW OR REGULATIONS.

(a) The provisions of this Declaration are severable, and if the
Trustees shall determine, with the advice of counsel, that any of such
provisions is in conflict with the 1940 Act, or with other applicable law and
regulations, the conflicting provision shall be deemed never to have constituted
a part of this Declaration; provided, however, that such determination shall not
affect any of the remaining provisions of this Declaration or render invalid or
improper any action taken or omitted prior to such determination.

(b) If any provision of this Declaration shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction and shall not in any manner
affect such provision in any other jurisdiction or any other provision of this
Declaration in any jurisdiction.

IN WITNESS WHEREOF, the undersigned have executed this Declaration of
Trust of Republic Portfolios as of the day and year first above written.

/s/ JAMES B. CRAVER
James B. Craver
As Trustee and not individually

/S/ THOMAS M. LENZ
Thomas M. Lenz
As Trustee and not individually

/S/ ANDRES E. SALDANA
Andres E. Saldana
As Trustee and not individually

FT4148

<PAGE>

SCHEDULE A

Republic Portfolios

INITIAL SERIES

International Equity Portfolio
Fixed Income Portfolio

FT4148

REPUBLIC PORTFOLIOS

BY-LAWS

As Adopted November 1, 1994

<PAGE>

TABLE OF CONTENTS

PAGE

ARTICLE I -- MEETINGS OF HOLDERS . . . . . . . . . . . . . 1
-------------------
<TABLE>
<CAPTION>

<S> <C> <C>
Section 1.1 Fixing Record Dates . . . . . . . 1
Section 1.2 Records at Holder Meetings . . . . . 1
Section 1.3 Inspectors of Election . . . . . . 1
Section 1.4 Proxies; Voting . . . . . . . . . 2
Section 1.5 Series Holders Meetings . . . . . . 2

ARTICLE II -- MEETINGS OF TRUSTEES . . . . . . . . . . . . 2
--------------------

Section 2.1 Annual and Regular Meetings . . . . . 2
Section 2.2 Notice . . . . . . . . . . . . 2

ARTICLE III -- OFFICERS . . . . . . . . . . . . . . . . 2
--------

Section 3.1 Officers of the Trust . . . . . . . 2
Section 3.2 Election and Tenure . . . . . . . 3
Section 3.3 Removal of Officers . . . . . . . 3
Section 3.4 Bonds and Surety . . . . . . . . 3
Section 3.5 Chairman, President and Vice President . 3
Section 3.6 Secretary . . . . . . . . . . . 4
Section 3.7 Treasurer . . . . . . . . . . . 4
Section 3.8 Other Officers and Duties . . . . . 4

ARTICLE IV -- MISCELLANEOUS . . . . . . . . . . . . . . . 5
-------------

Section 4.1 Depositories . . . . . . . . . . 5
Section 4.2 Signatures . . . . . . . . . . 5
Section 4.3 Seal . . . . . . . . . . . . 5
Section 4.4 Indemnification . . . . . . . . . 5
Section 4.5 Distribution Disbursing Agents and the Like 5

ARTICLE V -- REGULATIONS; AMENDMENT OF BY-LAWS . . . . . . . . 6
---------------------------------

Section 5.1 Regulations . . . . . . . . . . 6
Section 5.2 Amendment and Repeal of By-Laws . . . 6

</TABLE>

<PAGE>

BY-LAWS

REPUBLIC PORTFOLIOS

These By-Laws are made and adopted pursuant to Section 2.7 of the
Declaration of Trust establishing Republic Portfolios (the "Trust"), dated as of
November 1, 1994, as from time to time amended (the "Declaration"). All words
and terms capitalized in these By-Laws shall have the meaning or meanings set
forth for such words or terms in the Declaration.

ARTICLE I

MEETINGS OF HOLDERS

Section 1.1. FIXING RECORD DATES. If the Trustees do not, prior to any
meeting of the Holders, fix a record date, then the date of mailing notice of
the meeting shall be the record date.

Section 1.2. RECORDS AT HOLDER MEETINGS. At each meeting of the Holders
there shall be open for inspection the minutes of the last previous meeting of
Holders of the Trust and a list of the Holders of the Trust, certified to be
true and correct by the Secretary or other proper agent of the Trust, as of the
record date of the meeting. Such list of Holders shall contain the name of each
Holder in alphabetical order and the address and Interest owned by such Holder
on such record date.

Section 1.3. INSPECTORS OF ELECTION. In advance of any meeting of the
Holders, the Trustees may appoint Inspectors of Election to act at the meeting
or any adjournment thereof. If Inspectors of Election are not so appointed, the
chairman, if any, of any meeting of the Holders may, and on the request of any
Holder or his proxy shall, appoint Inspectors of Election. The number of
Inspectors of Election shall be either one or three. If appointed at the meeting
on the request of one or more Holders or proxies, a Majority Interests Vote
shall determine whether one or three Inspectors of Election are to be appointed,
but failure to allow such determination by the Holders shall not affect the
validity of the appointment of Inspectors of Election. In case any individual
appointed as an Inspector of Election fails to appear or fails or refuses to so
act, the vacancy may be filled by appointment made by the Trustees in advance of
the convening of the meeting or at the meeting by the individual acting as
chairman of the meeting. The Inspectors of Election shall determine the Interest
owned by each Holder, the Interests represented at the meeting, the existence of
a quorum, the authenticity, validity and effect of proxies, shall receive votes,
ballots or consents, shall hear and determine all challenges and questions in
any way arising in connection with the right to vote, shall count and tabulate
all votes or consents, shall determine the results, and shall do such other acts
as may be proper to conduct the election or vote with fairness to all Holders.
If there are three Inspectors of Election, the decision, act or certificate of a
majority is effective in all respects as the decision, act or

<PAGE>

certificate of all. On request of the chairman, if any, of the meeting, or of
any Holder or his proxy, the Inspectors of Election shall make a report in
writing of any challenge or question or matter determined by them and shall
execute a certificate of any facts found by them.

Section 1.4. PROXIES; VOTING. No proxy shall be valid after one year
from the date of its execution, unless a longer period is expressly stated in
such proxy.

Section 1.5 SERIES HOLDERS MEETINGS. Whenever a matter is required to
be voted by Holders of the Trust in the aggregate under Section 9.1 and 9.2 of
the Declaration, the Trust may either hold a meeting of Holders of all series to
vote on such matter, or hold separate meetings of Holders of each of the
individual series to vote on such matter, provided that (i) such separate
meetings shall be held within one year of each other, (ii) a quorum of the
individual series entitled to vote in person or by proxy shall be present at
each such separate meeting, and (iii) a quorum shall be present in the aggregate
at such separate meetings, and the votes of Holders at all such separate
meetings shall be aggregated in order to determine if sufficient votes have been
cast for such matter to be voted.

When separate meetings are held for Holders of each of the individual
series to vote on a matter required to be voted on by Holders of the Trust in
the aggregate, the record date of each such separate meeting shall be determined
in the manner described above in Section 1.1.

ARTICLE II

MEETINGS OF TRUSTEES

Section 2.1. ANNUAL AND REGULAR MEETINGS. The Trustees shall hold an
annual meeting for the election of officers and the transaction of other
business which may come before such meeting.

Section 2.2. NOTICE. Notice of a meeting shall be given by mail, by
telegram (which term shall include a cablegram), by telecopier or delivered
personally (which term shall include by telephone). Neither the business to be
transacted at, nor the purpose of, any meeting of the Trustees need be stated in
the notice or waiver of notice of such meeting, and no notice need be given of
action proposed to be taken by written consent.

ARTICLE III

OFFICERS

Section 3.1. OFFICERS OF THE TRUST. The officers of the Trust shall
consist of a Chairman, if any, a President, a Secretary, a Treasurer and such
other officers or assistant officers, including Vice Presidents, as may be
elected by the Trustees. Any two or more of the offices may be held by the same
person. The Trustees may designate a Vice President as an Executive Vice
President and may designate the order in which the other Vice Presidents may
act.

<PAGE>

The Chairman shall be a Trustee, but no other officer of the Trust, including
the President, need be a Trustee.

Section 3.2. ELECTION AND TENURE. At the initial organization meeting
and thereafter at each annual meeting of the Trustees, the Trustees shall elect
the Chairman, if any, the President, the Secretary, the Treasurer and such other
officers as the Trustees shall deem necessary or appropriate in order to carry
out the business of the Trust. Such officers shall hold office until the next
annual meeting of the Trustees and until their successors have been duly elected
and qualified. The Trustees may fill any vacancy in office or add any additional
officer at any time.

Section 3.3. REMOVAL OF OFFICERS. Any officer may be removed at any
time, with or without cause, by action of a majority of the Trustees. This
provision shall not prevent the making of a contract of employment for a
definite term with any officer and shall have no effect upon any cause of action
which any officer may have as a result of removal in breach of a contract of
employment. Any officer may resign at any time by notice in writing signed by
such officer and delivered or mailed to the Chairman, if any, the President or
the Secretary, and such resignation shall take effect immediately, or at a later
date according to the terms of such notice in writing.

Section 3.4. BONDS AND SURETY. Any officer may be required by the
Trustees to be bonded for the faithful performance of his duties in such amount
and with such sureties as the Trustees may determine.

Section 3.5. CHAIRMAN, PRESIDENT AND VICE PRESIDENTS. The Chairman, if
any, shall, if present, preside at all meetings of the Holders and of the
Trustees and shall exercise and perform such other powers and duties as may be
from time to time assigned to him by the Trustees. Subject to such supervisory
powers, if any, as may be given by the Trustees to the Chairman, if any, the
President shall be the chief executive officer of the Trust and, subject to the
control of the Trustees, shall have general supervision, direction and control
of the business of the Trust and of its employees and shall exercise such
general powers of management as are usually vested in the office of President of
a corporation. In the absence of the Chairman, if any, the President shall
preside at all meetings of the Holders and, in the absence of the Chairman, the
President shall preside at all meetings of the Trustees. The President shall be,
ex officio, a member of all standing committees of Trustees. Subject to the
direction of the Trustees, the President shall have the power, in the name and
on behalf of the Trust, to execute any and all loan documents, contracts,
agreements, deeds, mortgages and other instruments in writing, and to employ and
discharge employees and agents of the Trust. Unless otherwise directed by the
Trustees, the President shall have full authority and power to attend, to act
and to vote, on behalf of the Trust, at any meeting of any business organization
in which the Trust holds an interest, or to confer such powers upon any other
person, by executing any proxies duly authorizing such person. The President
shall have such further authorities and duties as the Trustees shall from time
to time determine. In the absence or disability of the President, the Vice
Presidents in order of their rank or the Vice President designated by the
Trustees, shall perform all of the duties of the President, and when so acting
shall have all the powers of and be subject to all of the restrictions upon the

<PAGE>

President. Subject to the direction of the President, each Vice President shall
have the power in the name and on behalf of the Trust to execute any and all
loan documents, contracts, agreements, deeds, mortgages and other instruments in
writing, and, in addition, shall have such other duties and powers as shall be
designated from time to time by the Trustees or by the President.

Section 3.6. SECRETARY. The Secretary shall keep the minutes of all
meetings of, and record all votes of, Holders, Trustees and the Executive
Committee, if any. The results of all actions taken at a meeting of the
Trustees, or by written consent of the Trustees, shall be recorded by the
Secretary. The Secretary shall be custodian of the seal of the Trust, if any,
and (and any other person so authorized by the Trustees) shall affix the seal
or, if permitted, a facsimile thereof, to any instrument executed by the Trust
which would be sealed by a New York corporation executing the same or a similar
instrument and shall attest the seal and the signature or signatures of the
officer or officers executing such instrument on behalf of the Trust. The
Secretary shall also perform any other duties commonly incident to such office
in a New York corporation, and shall have such other authorities and duties as
the Trustees shall from time to time determine.

Section 3.7. TREASURER. Except as otherwise directed by the Trustees,
the Treasurer shall have the general supervision of the monies, funds,
securities, notes receivable and other valuable papers and documents of the
Trust, and shall have and exercise under the supervision of the Trustees and of
the President all powers and duties normally incident to his office. The
Treasurer may endorse for deposit or collection all notes, checks and other
instruments payable to the Trust or to its order and shall deposit all funds of
the Trust as may be ordered by the Trustees or the President. The Treasurer
shall keep accurate account of the books of the Trust's transactions which shall
be the property of the Trust, and which together with all other property of the
Trust in his possession, shall be subject at all times to the inspection and
control of the Trustees. Unless the Trustees shall otherwise determine, the
Treasurer shall be the principal accounting officer of the Trust and shall also
be the principal financial officer of the Trust. The Treasurer shall have such
other duties and authorities as the Trustees shall from time to time determine.
Notwithstanding anything to the contrary herein contained, the Trustees may
authorize the Investment Manager and Administrator to maintain bank accounts and
deposit and disburse funds on behalf of the Trust.

Section 3.8. OTHER OFFICERS AND DUTIES. The Trustees may elect such
other officers and assistant officers as they shall from time to time determine
to be necessary or desirable in order to conduct the business of the Trust.
Assistant officers shall act generally in the absence of the officer whom they
assist and shall assist that officer in the duties of his office. Each officer,
employee and agent of the Trust shall have such other duties and authorities as
may be conferred upon him by the Trustees or delegated to him by the President.

<PAGE>

ARTICLE IV

MISCELLANEOUS

Section 4.1. DEPOSITORIES. The funds of the Trust shall be deposited in
such depositories as the Trustees shall designate and shall be drawn out on
checks, drafts or other orders signed by such officer, officers, agent or agents
(including the Investment Manager and Administrator) as the Trustees may from
time to time authorize.

Section 4.2. SIGNATURES. All contracts and other instruments shall be
executed on behalf of the Trust by such officer, officers, agent or agents as
provided in these By-Laws or as the Trustees may from time to time by resolution
provide.

Section 4.3. SEAL. The seal of the Trust, if any, may be affixed to any
document, and the seal and its attestation may be lithographed, engraved or
otherwise printed on any document with the same force and effect as if it had
been imprinted and attested manually in the same manner and with the same effect
as if done by a New York corporation.

Section 4.4. INDEMNIFICATION. Insofar as the conditional advancing of
indemnification monies under Section 5.4 of the Declaration for actions based
upon the 1940 Act may be concerned, such payments will be made only on the
following conditions: (i) the advances must be limited to amounts used, or to be
used, for the preparation or presentation of a defense to the action, including
costs connected with the preparation of a settlement; (ii) advances may be made
only upon receipt of a written promise by, or on behalf of, the recipient to
repay the amount of the advance which exceeds the amount to which it is
ultimately determined that he is entitled to receive from the Trust by reason of
indemnification; and (iii) (a) such promise must be secured by a surety bond,
other suitable insurance or an equivalent form of security which assures that
any repayment may be obtained by the Trust without delay or litigation, which
bond, insurance or other form of security must be provided by the recipient of
the advance, or (b) a majority of a quorum of the Trust's disinterested,
non-party Trustees, or an independent legal counsel in a written opinion, shall
determine, based upon a review of readily available facts, that the recipient of
the advance ultimately will be found entitled to indemnification.

Section 4.5. DISTRIBUTION DISBURSING AGENTS AND THE LIKE. The Trustees
shall have the power to employ and compensate such distribution disbursing
agents, warrant agents and agents for the reinvestment of distributions as they
shall deem necessary or desirable. Any of such agents shall have such power and
authority as is delegated to any of them by the Trustees.

<PAGE>

ARTICLE V

REGULATIONS; AMENDMENT OF BY-LAWS

Section 5.1. REGULATIONS. The Trustees may make such additional rules
and regulations, not inconsistent with these By-Laws, as they may deem expedient
concerning the sale and purchase of Interests of the Trust.

Section 5.2. AMENDMENT AND REPEAL OF BY-LAWS. In accordance with
Section 2.7 of the Declaration, the Trustees shall have the power to alter,
amend or repeal the By-Laws or adopt new By-Laws at any time. Action by the
Trustees with respect to the By-Laws shall be taken by an affirmative vote of a
majority of the Trustees. The Trustees shall in no event adopt By-Laws which are
in conflict with the Declaration.

The Declaration refers to the Trustees as Trustees, but not as
individuals or personally; and no Trustee, officer, employee or agent of the
Trust shall be held to any personal liability, nor shall resort be had to their
private property for the satisfaction of any obligation or claim or otherwise in
connection with the affairs of the Trust.

FT4143

MASTER INVESTMENT MANAGEMENT CONTRACT

Republic Portfolios
P.O. Box 2494
Elizabethan Square, 2nd Floor
George Town, Grand Cayman
Cayman Islands, BWI
(809) 945-1824

November 21, 1994

Republic National Bank of New York
452 Fifth Avenue
New York, NY 10018

Dear Sirs:

This will confirm the agreement between the undersigned (the "Portfolio
Trust") and Republic National Bank of New York (the "Adviser") as follows:

1. The Portfolio Trust is an open-end investment company organized as a
New York trust and consists of one or more separate investment portfolios (the
"Portfolio Series") as may be established and designated by the Trustees from
time to time. This Contract shall pertain to such Portfolio Series as shall be
designated in Supplements to this Contract as further agreed between the
Portfolio Trust and the Adviser. Separate interests in the Portfolio Trust are
offered to investors with respect to each Portfolio Series. The Portfolio Trust
engages in the business of investing and reinvesting the assets of each
Portfolio Series in the manner and in accordance with the investment objectives
and restrictions specified in the currently effective Registration Statement
relating to the Portfolio Trust and the Portfolio Series, as amended from time
to time (the "Registration Statement"), filed by the Portfolio Trust under the
Investment Company Act of 1940 (the "1940 Act"). Copies of the documents
referred to in the preceding sentence have been furnished to the Adviser. Any
amendments to those documents shall be furnished to the Adviser promptly.

2. The Portfolio Trust hereby appoints the Adviser to provide the
investment advisory services specified in this Contract and the Adviser hereby
accepts such appointment. The Portfolio Trust expressly authorizes the Adviser,
subject to compliance with applicable law, to employ one or more subadvisers to
provide all or any portion of the services contemplated hereby, subject to
supervision and oversight of the Adviser, on such terms and conditions as the
Adviser determines appropriate.

3. (a) The Adviser shall, at its expense, (i) employ or associate with
itself such persons as it believes appropriate to assist it in performing its

<PAGE>

Republic National Bank of New York
November 21, 1994
Page 2

obligations under this Contract and (ii) provide all services, equipment and
facilities necessary to perform its obligations under this Contract.

(b) The Portfolio Trust shall be responsible for all of its
expenses and liabilities, including compensation of its Trustees who are not
affiliated with the Administrator, the Exclusive Placement Agent or any
affiliates of the Administrator or the Exclusive Placement Agent; taxes and
governmental fees; interest charges; fees and expenses of the Portfolio Trust's
independent accountants and legal counsel; trade association membership dues;
fees and expenses of any custodian (including maintenance of books and accounts
and calculation of the net asset value of the Portfolio Series), transfer agent,
registrar and disbursing agent of the Portfolio Trust; expenses of preparing and
printing Registration Statements and reports to investors, notices, proxy
statements and reports to regulatory agencies; the cost of office supplies,
including stationery; travel expenses of all officers, Trustees and employees;
insurance premiums; brokerage and other expenses of executing portfolio
transactions; expenses of investors' meetings; organization expenses; and
extraordinary expenses.

4. (a) The Adviser shall provide to the Portfolio Trust investment
guidance and policy direction in connection with the management of the portfolio
of each Portfolio Series, including oral and written research, analysis, advice,
statistical and economic data and information and judgments of both a
macroeconomic and microeconomic character.

The Adviser will determine the securities to be purchased or sold by
each Portfolio Series and will place orders pursuant to its determinations
either directly with the issuer or with any broker or dealer who deals in such
securities. The Adviser will determine what portion of each Portfolio Series'
portfolio shall be invested in securities described by the policies of such
Portfolio Series and what portion, if any, should be invested otherwise or held
uninvested.

The Portfolio Trust will have the benefit of the investment analysis
and research, the review of current economic conditions and trends and the
consideration of long-range investment policy generally available to investment
advisory customers of the Adviser. It is understood that the Adviser will not
use any inside information pertinent to investment decisions undertaken in
connection with this Contract that may be in its possession or in the possession
of any of its affiliates nor will the Adviser seek to obtain any such
information.

(b) The Adviser also shall provide to the Portfolio Trust's officers
administrative assistance in connection with the operation of the Portfolio
Trust and each of the Portfolio Series, which shall include (i) compliance with
all reasonable requests of the Portfolio Trust for information, including
information required in connection with the Portfolio Trust's filings with the
Securities and Exchange Commission and (ii) such other services as the Adviser
shall from time to time determine, upon consultation with the Administrator, to
be necessary or

<PAGE>

Republic National Bank of New York
November 21, 1994
Page 3

useful to the administration of the Portfolio Trust and each of the Portfolio
Series.

(c) As manager of the assets of each Portfolio Series, the Adviser
shall make investments for the account of each Portfolio Series in accordance
with the Adviser's best judgment and within the investment objectives and
restrictions set forth in the Registration Statement, the 1940 Act and the
provisions of the Internal Revenue Code relating to regulated investment
companies subject to policy decisions adopted by the Portfolio Trust's Board of
Trustees.

(d) The Adviser shall furnish to the Portfolio Trust's Board of
Trustees periodic reports on the investment performance of each Portfolio Series
and on the performance of its obligations under this Contract and shall supply
such additional reports and information as the Portfolio Trust's officers or
Board of Trustees shall reasonably request.

(e) On occasions when the Adviser deems the purchase or sale of a
security to be in the best interest of a Portfolio Series as well as other
customers, the Adviser, to the extent permitted by applicable law, may aggregate
the securities to be so sold or purchased in order to obtain the best execution
or lower brokerage commissions, if any. The Adviser may also on occasions
purchase or sell a particular security for one or more customers in different
amounts. On either occasion, and to the extent permitted by applicable law and
regulations, allocation of the securities so purchased or sold, as well as the
expenses incurred in the transaction, will be made by the Adviser in the manner
it considers to be the most equitable and consistent with its fiduciary
obligations to that Portfolio Series and to such other customers.

5. The Adviser shall give the Portfolio Trust the benefit of the
Adviser's best judgment and efforts in rendering services under this Contract.
As an inducement to the Adviser's undertaking to render these services, the
Portfolio Trust agrees that the Adviser shall not be liable under this Contract
for any mistake in judgment or in any other event whatsoever provided that
nothing in this Contract shall be deemed to protect or purport to protect the
Adviser against any liability to the Portfolio Trust or its investors to which
the Adviser would otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence in the performance of the Adviser's duties under this
Contract or by reason of the Adviser's reckless disregard of its obligations and
duties hereunder.

6. The Adviser shall receive no fee in consideration of the services to
be rendered under this Contract.

7. If the aggregate expenses of every character incurred by or
allocated to a feeder fund in a two tier mutual fund structure which invests
substantially all of its investable assets in a Portfolio Series (a "Feeder
Fund") in any fiscal year, other than interest, taxes, brokerage commissions and
other portfolio transaction expenses, other expenditures which are capitalized
in accordance with generally accepted accounting principles and any
extraordinary

<PAGE>

Republic National Bank of New York
November 21, 1994
Page 4

expense (including, without limitation, litigation and indemnification expense)
otherwise allocable to the Feeder Fund, but including the aggregate allocable
fees payable under this Contract ("includable expenses"), shall exceed the
expense limitations applicable to that Feeder Fund imposed by state securities
law or regulations thereunder, as these limitations may be raised or lowered
from time to time, the Adviser shall pay the corresponding Portfolio Series an
amount equal to 50% of that excess. With respect to portions of a fiscal year in
which this Contract shall be in effect, the foregoing limitations shall be
prorated according to the proportion which that portion of the fiscal year bears
to the full fiscal year. At the end of each month of the Portfolio Trust's
fiscal year, the Sponsor will review the includable expenses accrued during that
fiscal year to the end of the period and shall estimate the contemplated
includable expenses for the balance of that fiscal year. If, as a result of that
review and estimation, it appears likely that the includable expenses will
exceed the limitations referred to in this paragraph 7 for a fiscal year with
respect to a Feeder Fund, the monthly fees relating to the corresponding
Portfolio Series payable to the Adviser under this Contract for such month shall
be reduced, subject to a later reimbursement to reflect actual expenses, by an
amount equal to 50% of a pro rata portion (prorated on the basis of the
remaining months of the fiscal year, including the month just ended) of the
amount by which the includable expenses for the fiscal year (less an amount
equal to the aggregate of actual reductions made pursuant to this provision with
respect to prior months of the fiscal year) are expected to exceed the
limitations provided in this paragraph 7. For purposes of the foregoing, the
value of the net assets of each Portfolio Series shall be computed in the manner
specified in paragraph 6, and any payments required to be made by the Adviser
shall be made once a year promptly after the end of the Portfolio Trust's fiscal
year.

8. (a) This Contract and any Supplement shall become effective with
respect to a Portfolio Series on the date specified in the Supplement and shall
thereafter continue in effect with respect to that Portfolio Series for a period
of more than two years from such date with respect to the Portfolio Series only
so long as the continuance is specifically approved at least annually (i) by the
vote of a majority of the outstanding voting interests of the Portfolio Series
(as defined in the 1940 Act) or by the Portfolio Trust's Board of Trustees and
(ii) by the vote, cast in person at a meeting called for that purpose, of a
majority of the Portfolio Trust's Trustees who are not parties to this Contract
or "interested persons" (as defined in the 1940 Act) of any such party.

(b) This Contract and any Supplement hereto may be terminated with
respect to a Portfolio Series at any time, without the payment of any penalty,
by a vote of a majority of the outstanding voting interests of that Portfolio
Series (as defined in the 1940 Act) or by a vote of a majority of the entire
Board of Trustees on 60 days' written notice to the Adviser or by the Adviser on
60 days' written notice to the Portfolio Trust. This Contract shall terminate
automatically in the event of its assignment (as defined in the 1940 Act).

9. Except to the extent necessary to perform the Adviser's obligations
under this Contract, nothing herein shall be deemed to limit or restrict the

<PAGE>

Republic National Bank of New York
November 21, 1994
Page 5

right of the Adviser, or any affiliate of the Adviser, or any employee of the
Adviser, to engage in any other business or to devote time and attention to the
management or other aspects of any other business, whether of a similar or
dissimilar nature, or to render services of any kind to any other corporation,
firm, individual or association.

10. The investment management services of the Adviser to the Portfolio
Trust under this Contract are not to be deemed exclusive as to the Adviser and
the Adviser will be free to render similar services to others.

11. This Contract shall be construed in accordance with the laws of the
State of New York provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act.

12. In the event that the Board of Trustees of the Portfolio Trust
shall establish one or more additional investment portfolios, it shall so notify
the Adviser in writing. If the Adviser wishes to render investment advisory
services to such portfolio, it shall so notify the Portfolio Trust in writing,
whereupon such portfolio shall become a Portfolio Series hereunder.

13. The Declaration of Trust establishing the Portfolio Trust, (the
"Declaration"), provides that the name "Republic Portfolios" refers to the
Trustees under the Declaration collectively as Trustees and not as individuals
or personally, and that no investor, trustee, officer, employee or agent of the
Portfolio Trust shall be subject to claims against or obligations of the
Portfolio Trust to any extent whatsoever, but that the Portfolio Trust estate
only shall be liable.

If the foregoing correctly sets forth the agreement between the
Portfolio Trust and the Adviser, please so indicate by signing and returning to
the Portfolio Trust the enclosed copy hereof.

Very truly yours,

REPUBLIC PORTFOLIOS

By
Title:

ACCEPTED:

REPUBLIC NATIONAL BANK OF NEW YORK

By
Title:

FT4143
<PAGE>
INVESTMENT MANAGEMENT CONTRACT SUPPLEMENT

Republic Portfolios
P.O. Box 2494
Elizabethan Square, 2nd Floor
George Town, Grand Cayman
Cayman Islands, BWI
(809) 945-1824

November 21, 1994

Republic National Bank of New York
452 Fifth Avenue
New York, NY 10018

Dear Sirs:

Re: International Equity Portfolio

This will confirm the agreement between the undersigned (the "Portfolio
Trust") and Republic National Bank of New York (the "Adviser") as follows:

1. The Portfolio Trust is an open-end management investment company
organized as a New York trust and consists of such separate investment
portfolios as have been or may be established by the Trustees of the Portfolio
Trust from time to time. A separate class of shares of beneficial interest of
the Portfolio Trust is offered to investors with respect to each investment
portfolio. International Equity Portfolio (the "Portfolio Series") is a separate
investment portfolio of the Portfolio Trust.

2. The Portfolio Trust and the Adviser have entered into a Master
Investment Management Contract ("Master Management Contract") pursuant to which
the Portfolio Trust has employed the Adviser to provide investment advisory and
other services specified in that Contract and the Adviser has accepted such
employment.

3. As provided in paragraph 1 of the Master Management Contract, the
Portfolio Trust hereby adopts the Master Management Contract with respect to the
Portfolio Series and the Adviser hereby acknowledges that the Master Management
Contract shall pertain to the Portfolio Series, the terms and conditions of the
Master Management Contract being hereby incorporated herein by reference.

4. The term "Portfolio Series" as used in the Master Management
Contract shall, for purposes of this Supplement, pertain to the Portfolio
Series.

5. This Supplement and the Master Management Contract (together, the
"Contract") shall become effective with respect to the Portfolio Series on
November 21, 1994 and shall thereafter continue in effect with respect to the
Portfolio Series for a period of more than two years from such date only so long
as the continuance is specifically approved at least annually (a) by the vote of
a majority of the outstanding voting securities of the Portfolio Series (as
defined in the 1940 Act) or by the Portfolio Trust's Board of Trustees and (b)

<PAGE>

Republic National Bank of New York
November 21, 1994
Page 2

by the vote, cast in person at a meeting called for that purpose, of a majority
of the Portfolio Trust's Board of Trustees who are not parties to this Contract
or "interested persons" (as defined in the Investment Company Act of 1940 ("1940
Act)) of any such party. This Contract may be terminated with respect to the
Portfolio Series at any time, without the payment of any penalty, by vote of a
majority of the outstanding voting securities of the Portfolio Series (as
defined in the 1940 Act) or by a vote of a majority of Portfolio Trust's entire
Board of Trustees on 60 days' written notice to the Portfolio Trust. This
Contract shall terminate automatically in the event of its assignment (as
defined in the 1940 Act).

If the foregoing correctly sets forth the agreement between the
Portfolio Trust and the Adviser, please so indicate by signing and returning to
the Portfolio Trust the enclosed copy hereof.

Very truly yours,

REPUBLIC PORTFOLIOS

By
Title:

ACCEPTED:

REPUBLIC NATIONAL BANK OF NEW YORK

By
Title:

FT4143
<PAGE>
INVESTMENT MANAGEMENT CONTRACT SUPPLEMENT

Republic Portfolios
P.O. Box 2494
Elizabethan Square, 2nd Floor
George Town, Grand Cayman
Cayman Islands, BWI
(809) 945-1824

November 21, 1994

Republic National Bank of New York
452 Fifth Avenue
New York, NY 10018

Dear Sirs:

Re: Fixed Income Portfolio

This will confirm the agreement between the undersigned (the "Portfolio
Trust") and Republic National Bank of New York (the "Adviser") as follows:

1. The Portfolio Trust is an open-end management investment company
organized as a New York trust and consists of such separate investment
portfolios as have been or may be established by the Trustees of the Portfolio
Trust from time to time. A separate class of shares of beneficial interest of
the Portfolio Trust is offered to investors with respect to each investment
portfolio. Fixed Income Portfolio (the "Portfolio Series") is a separate
investment portfolio of the Portfolio Trust.

4. The term "Portfolio Series" as used in the Master Management
Contract shall, for purposes of this Supplement, pertain to the Portfolio
Series.

<PAGE>

Republic National Bank of New York
November 21, 1994
Page 2

If the foregoing correctly sets forth the agreement between the
Portfolio Trust and the Adviser, please so indicate by signing and returning to
the Portfolio Trust the enclosed copy hereof.

Very truly yours,

REPUBLIC PORTFOLIOS

By
Title:

ACCEPTED:

REPUBLIC NATIONAL BANK OF NEW YORK

Title:

FT4143

REPUBLIC PORTFOLIOS
FIXED INCOME PORTFOLIO
SUBADVISORY AGREEMENT

AGREEMENT, effective commencing on , between Miller Anderson &
Sherrerd, LLP (or any successor-in-interest (by merger or otherwise) thereto or
transferee thereof that does not involve an "assignment" within the meaning of
the Investment Company Act of 1940, as amended (the "1940 Act") and that is a
limited partnership or other entity wholly owned, directly or indirectly, by
Morgan Stanley Asset Management Holdings, Inc. and/or its affiliates; Miller
Anderson & Sherrerd, LLP or such successor-in-interest or transferee being
referred to herein as the "Subadviser") and Republic National Bank of New York
(the "Adviser").

WHEREAS, the Adviser serves as investment adviser to the Republic
Portfolios, a New York master trust fund (the "Portfolio Trust"), which is
registered as an open-end diversified investment management company under the
1940 Act and consists of one or more series, one of which is Fixed Income
Portfolio (the "Portfolio Series");

WHEREAS, the Adviser wishes to appoint the Subadviser to perform
advisory services to the Portfolio Series and the Portfolio Trust's Board of
Trustees (the "Trustees"), including a majority of the Trustees who are not
"interested persons" (as defined in the 1940 Act) of the Portfolio Trust and the
Portfolio Series' investors have approved the appointment of the Subadviser to
perform certain investment advisory services for the Portfolio Series pursuant
to this Subadvisory Agreement and the Subadviser is willing to perform such
services for the Portfolio Series;

WHEREAS, the Subadviser is registered or exempt from registration as an
investment adviser under the Investment Advisers Act of 1940, as amended
("Advisers Act");

NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the Adviser and the Subadviser as
follows:

1. APPOINTMENT. The Adviser hereby appoints the Subadviser to perform
advisory services to the Portfolio Series for the periods and on the terms set
forth in this Subadvisory Agreement. The Subadviser accepts such appointment and
agrees to furnish the services herein set forth, for the compensation herein
provided.

2. INVESTMENT ADVISORY DUTIES. Subject to the supervision of the
Trustees of the Portfolio Trust and the Adviser, the Subadviser will (a) provide
a program of continuous investment management for the Portfolio Series in
accordance with the Portfolio Series's investment objectives, policies and
limitations as stated in the Portfolio Trust's registration statement on Form
N-1A as filed with the Securities and Exchange Commission ("SEC"), as it may be
amended from time to time (the "Registration Statement"), copies of which shall
be provided to the Subadviser by the Portfolio Trust; (b) make investment
decisions for the Portfolio Series; and (c) place orders to purchase and sell
securities for the

<PAGE>

Portfolio Series. In particular, the Subadviser will be responsible for the
market timing of purchases and sales and for all yield enhancement strategies
used in managing the Portfolio Series's investment portfolio.

In performing its investment management services to the Portfolio
Series hereunder, the Subadviser will provide the Portfolio Series with ongoing
investment guidance and policy direction, including oral and written research,
analysis, advice, statistical and economic data and judgments regarding
individual investments, general economic conditions and trends and long-range
investment policy. The Subadviser will determine the securities, instruments,
repurchase agreements, options and other investments and techniques that the
Portfolio Series will purchase, sell, enter into or use, and will provide an
ongoing evaluation of the Portfolio Series's portfolio. The Subadviser will
determine what portion of the Portfolio Series's portfolio shall be invested in
securities and other assets.

The Subadviser further agrees that, in performing its duties hereunder,
it will:

(a) comply with the 1940 Act and all rules and regulations thereunder,
the Advisers Act, the Internal Revenue Code of 1986, as amended (the "Code"),
and all other applicable federal and state laws and regulations, and with any
applicable procedures adopted by the Trustees;

(b) manage the Portfolio Series so that it will qualify, and continue
to qualify (except where extraordinary circumstances dictate otherwise), as a
regulated investment company under Subchapter M of the Code and regulations
issued thereunder, and conduct periodically such Subchapter M compliance reviews
as the Portfolio Trust and Subadviser determine appropriate;

(c) place orders pursuant to its investment determinations for the
Portfolio Series directly with the issuer, or with any broker or dealer, in
accordance with applicable policies expressed in the Portfolio Series's
Registration Statement and in accordance with applicable legal requirements;

(d) furnish to the Portfolio Trust or to the Adviser whatever
statistical information the Portfolio Trust or the Adviser may reasonably
request with respect to the Portfolio Series's assets or contemplated
investments. In addition, the Subadviser will keep the Portfolio Trust, the
Trustees and the Adviser informed of developments materially affecting the
Portfolio Series's portfolio and shall, on the Subadviser's own initiative,
furnish to the Portfolio Trust and the Adviser from time to time whatever
information the Subadviser believes appropriate for this purpose;

(e) make available to the Portfolio Trust, promptly upon request, such
copies of its investment records and ledgers with respect to the Portfolio
Series as may be required to assist the Portfolio Trust in its compliance with
applicable laws and regulations. The Subadviser will furnish the Trustees with
such periodic and special reports regarding the Portfolio Series as they may
reasonably request;

<PAGE>

(f) immediately notify the Portfolio Trust and the Adviser in the event
that the Subadviser or any of its affiliates: (1) becomes aware that it is
subject to a statutory disqualification that prevents the Subadviser from
serving as an investment adviser pursuant to this Subadvisory Agreement; or (2)
becomes aware that it is the subject of an administrative proceeding or
enforcement action by the SEC or other regulatory authority. The Subadviser
further agrees to notify the Portfolio Trust and the Adviser immediately of any
material fact known to the Subadviser respecting or relating to the Subadviser
that is not contained in the Registration Statement, or any amendment or
supplement thereto, with respect to the Portfolio Series but that is required to
be disclosed therein, and of any statement contained therein that becomes untrue
in any material respect.

3. ALLOCATION OF CHARGES AND EXPENSES. Except as otherwise specifically
provided in this Section 3, the Subadviser shall pay the compensation and
expenses of all its directors, partners, officers and employees who serve as
officers and executive employees of the Portfolio Trust (including the Portfolio
Series's share of payroll taxes), and the Subadviser shall make available,
without expense to the Portfolio Series, the service of its directors, partners,
officers and employees who may be duly elected officers of the Portfolio Trust,
subject to their individual consent to serve and to any limitations imposed by
law.

The Subadviser shall not be required to pay any expenses of the
Portfolio Series other than those specifically allocated to the Subadviser in
this Section 3. In particular, but without limiting the generality of the
foregoing, the Subadviser shall not be responsible, except to the extent of the
reasonable compensation of such of the Portfolio Trust's employees as are
officers or employees of the Subadviser whose services may be involved, for the
following expenses of the Portfolio Series: organization and certain offering
expenses of the Portfolio Series (including out-of-pocket expenses); fees
payable to any other Portfolio Trust advisers or consultants; legal expenses;
auditing and accounting expenses; interest expenses; telephone, telex,
facsimile, postage and other communications expenses; taxes and governmental
fees; dues and expenses incurred by or with respect to the Portfolio Trust in
connection with membership in investment company trade organizations; cost of
insurance relating to fidelity coverage for the Portfolio Trust's officers and
employees; fees and expenses of any custodian, subcustodian, transfer agent,
registrar, or disbursing agent of the Portfolio Series; payments for maintaining
the Portfolio Series's financial books and records and calculating the daily net
asset value of the Portfolio Series; other payments for portfolio pricing or
valuation services to pricing agents, accountants, bankers and other
specialists, if any; expenses relating to investor and public relations;
freight, insurance and other charges in connection with the shipment of the
portfolio securities of the Portfolio Series; brokerage commissions or other
costs of acquiring or disposing of any portfolio securities or other assets of
the Portfolio Series, or of entering into other transactions or engaging in any
investment practices with respect to the Portfolio Series; expenses of preparing
and filing Registration Statements, reports and notices to investors; costs of
stationery; litigation expenses; costs of investors' and other meetings; the
compensation and all expenses (specifically including travel expenses relating
to the Portfolio Series's business) of officers, trustees and employees of the
Portfolio Trust who are not "interested persons" (as defined in

<PAGE>

the 1940 Act) of the Subadviser; and travel expenses (or an appropriate portion
thereof) of officers or trustees of the Portfolio Trust who are officers,
directors or employees of the Subadviser to the extent that such expenses relate
to attendance at meetings of the Trustees of the Portfolio Trust or any
committees thereof or advisers thereto.

4. COMPENSATION. As compensation for the services provided and expenses
assumed by the Subadviser under this Agreement, the Portfolio Trust will pay the
Subadviser within 21 calendar days after the end of each calendar quarter an
advisory fee computed daily on the basis of the Portfolio Series's average daily
net assets, in accordance with the following schedule of annual rates.
<TABLE>
<CAPTION>

<S> <C>
NET ASSETS FEE RATE

Up to $50 million 0.375%
$50,000,001 - $95 million 0.25%
$95,000,001 - $150 million $300,000
$150,000,001 - $250 million 0.20%
Over $250 million 0.15%
</TABLE>

The "average daily net assets" of the Portfolio Series shall mean the average of
the values placed on the Portfolio Series's net assets as of 4:00 p.m. (New York
time) on each day on which the net asset value of the Portfolio Series is
determined consistent with the provisions of Rule 22c-1 under the 1940 Act or,
if the Portfolio Series lawfully determines the value of its net assets as of
some other time on each business day, as of such other time. The value of net
assets of the Portfolio Series shall always be determined pursuant to the
applicable provisions of the Portfolio Trust's Declaration of Trust and
Registration Statement. If, pursuant to such provisions, the determination of
net asset value is suspended for any particular business day, then for the
purposes of this Section 4, the value of the net assets of the Portfolio Series
as last determined shall be deemed to be the value of its net assets as of the
close of regular trading on the New York Stock Exchange, or as of such other
time as the value of the net assets of the Portfolio Series's portfolio may
lawfully be determined, on that day. If the determination of the net asset value
of the interests of the Portfolio Series has been so suspended for a period
including any quarter end when the Subadviser's compensation is payable pursuant
to this Section, then the Subadviser's compensation payable at the end of such
month shall be computed on the basis of the value of the net assets of the
Portfolio Series as last determined (whether during or prior to such quarter).
If the Portfolio Series determines the value of the net assets of its portfolio
more than once on any day, then the last such determination thereof on that day
shall be deemed to be the sole determination thereof on that day for the
purposes of this Section 4. In the event that this Agreement is terminated
pursuant to Section 10 hereof, the Subadviser shall be entitled to a PRO RATA
portion of the fee under this Section 4 through and including the date upon
which the Agreement is terminated and the Subadviser ceases to provide
investment advisory services to the Portfolio Series hereunder.

<PAGE>

applicable legal provisions, and to preserve such records for the periods and in
the manner required by that Section, and those rules and legal provisions. The
Subadviser also agrees that records it maintains and preserves pursuant to Rules
31a-1 and Rule 31a-2 under the 1940 Act and otherwise in connection with its
services hereunder are the property of the Portfolio Trust and will be
surrendered promptly to the Portfolio Trust upon its request. The Subadviser
further agrees that it will furnish to regulatory authorities having the
requisite authority any information or reports in connection with its services
hereunder which may be requested in order to determine whether the operations of
the Portfolio Series are being conducted in accordance with applicable laws and
regulations.

6. STANDARD OF CARE AND LIMITATION OF LIABILITY. The Subadviser shall
exercise its best judgment in rendering the services provided by it under this
Subadvisory Agreement. The Subadviser shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Portfolio Series or
the holders of the Portfolio Series's interests in connection with the matters
to which this Subadvisory Agreement relate, provided that nothing in this
Subadvisory Agreement shall be deemed to protect or purport to protect the
Subadviser against any liability to the Portfolio Series or to holders of the
Portfolio Series's interests to which the Subadviser would otherwise be subject
by reason of willful misfeasance, bad faith or gross negligence on its part in
the performance of its duties or by reason of the Subadviser's reckless
disregard of its obligations and duties under this Subadvisory Agreement. As
used in this Section 6, the term "Subadviser" shall include any officers,
directors, partners, employees or other affiliates of the Subadviser performing
services for the Portfolio Series.

7. INDEMNIFICATION.

(a) The Subadviser hereby agrees to indemnify and hold harmless the
Portfolio Trust and the Adviser from any controversies, claims, suits, losses,
liabilities, judgments, awards or settlements, and costs or expenses, including
reasonable legal fees, caused by, or in any way related to, the investment
decisions rendered by the Subadviser concerning the Portfolio Series in a manner
inconsistent with Section 6 hereof, any failure of the Subadviser to fulfill any
of its other obligations under this Subadvisory Agreement, any material
misrepresentation, or omission to disclose material facts, by the Subadviser to
the Portfolio Trust, the Adviser or any investor of the Portfolio Series, or any
violation of applicable law, by the Subadviser. The Subadviser also agrees to
indemnify and hold harmless the Portfolio Trust and the Adviser with respect to
any losses incurred as the result of errors made by the Subadviser in
transmitting orders to any broker for execution.

(b) The Adviser hereby agrees to indemnify and hold harmless the
Subadviser from any controversies, claims, suits, losses, liabilities,
judgments, awards or settlements, and costs or expenses, including reasonable
legal fees, caused by, or in any way related to, its failure to fulfill any of
its obligations under this Subadvisory Agreement.

(c) If any party seeks indemnification under this Agreement (an
"indemnified party"), it shall notify the other party (the "indemnifying party")

<PAGE>

in writing of the assertion of any third party claim or action and shall deliver
all copies of materials received in connection with the matter to the
indemnifying party. The indemnifying party shall have the right to participate
at its own expense in the defense of any such claim or action with counsel of
its own choosing satisfactory to the indemnified party, and the indemnified
party shall cooperate fully with the indemnifying party in the defense or
settlement of any matter that is covered by paragraphs (a) or (b) above, subject
to reimbursement by the indemnifying party for expenses incurred by the
indemnified party in connection with the indemnifying party's participation in
the defense.

8. SERVICES NOT EXCLUSIVE. It is understood that the services of the
Subadviser are not exclusive, and that nothing in this Subadvisory Agreement
shall prevent the Subadviser from providing similar services to other investment
companies (whether or not their investment objectives and policies are similar
to those of the Portfolio Series) or from engaging in other activities, provided
such other services and activities do not, during the term of this Subadvisory
Agreement, interfere in a material manner with the Subadviser's ability to meet
its obligations to the Adviser, the Portfolio Trust and the Portfolio Series
hereunder. When the Subadviser recommends the purchase or sale of a security for
other investment companies and other clients, and at the same time the
Subadviser recommends the purchase or sale of the same security for the
Portfolio Series, the Subadviser may, but shall be under no obligation to,
aggregate the orders for securities to be purchased or sold. It is understood
that in light of its fiduciary duty to the Portfolio Series, such transactions
will be executed on a basis that is fair and equitable to the Portfolio Series.
In connection with purchases or sales of portfolio securities for the account of
the Portfolio Series, neither the Subadviser nor any of its directors, partners,
officers or employees shall act as a principal or agent or receive any
commission.

9. DOCUMENTATION. The Portfolio Series shall provide the Subadviser
with the following documents, as requested by the Subadviser:

(a) the Registration Statement and any amendments thereto;

(b) the Declaration of Trust and By-laws (and any amendments thereto)
of the Portfolio Trust;

(c) resolutions of the Trustees authorizing the appointment of the
Subadviser to serve as Subadviser and approving this Subadvisory Agreement; and

(d) the Portfolio Trust's Notification of Registration on Form N-8A.

10. DURATION AND TERMINATION. This Subadvisory Agreement shall continue
until unless sooner terminated as provided herein. Notwithstanding the
foregoing, this Subadvisory Agreement may be terminated: (a) at any time without
penalty upon thirty (30) days' written notice to the Subadviser by the Portfolio
Series upon the vote of a majority of the Trustees or upon the vote of a
majority of the Portfolio Series's outstanding voting securities, (b) at any
time without penalty upon thirty (30) days' written notice to the Subadviser by
the Adviser; or (c) by the Subadviser upon thirty (30) days' written notice to
the Portfolio Series and the Adviser, provided that the Subadviser shall
continue to be responsible for managing the assets of the

<PAGE>

Portfolio Series for sixty (60) business days after the end of the notice period
unless the Portfolio Series shall agree in writing to shorten the period.
Anything to the contrary herein notwithstanding, any termination carried out
pursuant to this Section 10(c) shall be without penalty and, further, the
compensation schedule set forth in Section 4 hereof shall apply to the service
of the Subadviser beyond the end of the notice period provided in this Section
10(c). This Subadvisory Agreement will also terminate automatically in the event
of its "assignment" (as defined in the 1940 Act) or the assignment or
termination of the Management Agreement.

11. AMENDMENTS. No provision of this Subadvisory Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, and no amendment of this Subadvisory
Agreement shall be effective until approved by an affirmative vote of (i) a
"majority of the outstanding voting securities" (as defined in the 1940 Act) of
the Portfolio Series, and (ii) a majority of the Trustees, including a majority
of the Trustees who are not "interested persons" (as defined in the 1940 Act) of
any party to this Subadvisory Agreement, cast in person at a meeting called for
the purpose of voting on such approval, if such approval is required by
applicable law.

12. NOTICES. Any notice or other communication required or permitted to
be given hereunder shall be given in writing and mailed, faxed or delivered to
the other party at its address as follows:

IF TO THE ADVISER:

Republic National Bank of New York
452 Fifth Avenue
New York, NY 10018

IF TO THE SUBADVISER:

Miller Anderson & Sherrerd, LLP
One Tower Bridge
West Conshocken, PA 19428-0868

Any party may specify a different or additional address for notice by
sending a written notice to the other at the address above, or at that or those
last given hereunder.

13. MISCELLANEOUS.

(a) This Subadvisory Agreement shall be governed by the laws of the
State of New York, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act, the Advisers Act, or rules or orders of the SEC
thereunder. Exclusive original jurisdiction to any claim, action or dispute
between the parties arising out of this Agreement shall be solely in state or
federal district courts sitting in the State of New York.

<PAGE>

(b) The captions of this Subadvisory Agreement are included for
convenience only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.

(c) If any provision of this Subadvisory Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Subadvisory Agreement shall not be affected hereby and, to this extent, the
provisions of this Subadvisory Agreement shall be deemed to be severable.

(d) Nothing herein shall be construed as constituting the Subadviser,
or any of its directors, officers or employees, an agent of the Adviser, the
Portfolio Trust or the Portfolio Series, nor the Adviser, or any of its
directors, officers or employees, an agent of the Subadviser.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of .

MILLER, ANDERSON & SHERRERD

By ______________________________

Name:
Title:

REPUBLIC NATIONAL BANK OF NEW YORK

By ______________________________

Name:
Title:

FT4206C

REPUBLIC PORTFOLIOS
INTERNATIONAL EQUITY PORTFOLIO
SUBADVISORY AGREEMENT

AGREEMENT, effective commencing on November 21, 1994, between Capital
Guardian Trust Company (the "Subadviser") and Republic National Bank of New York
(the "Adviser").

WHEREAS, the Adviser serves as investment adviser to the Republic
Portfolios, a New York master trust fund (the "Portfolio Trust"), which is
registered as an open-end diversified investment management company under the
Investment Company Act of 1940, as amended (the "1940 Act") and consists of one
or more series, one of which is International Equity Portfolio (the "Portfolio
Series");

WHEREAS, the Subadviser is registered or exempt from registration as an
investment adviser under the Investment Advisers Act of 1940, as amended
("Advisers Act");

NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the Adviser and the Subadviser as
follows:

<PAGE>

The Subadviser further agrees that, in performing its duties hereunder,
it will:

(b) in accordance with such procedures and instructions as the
Portfolio Trust and Subadviser determine appropriate, manage the Portfolio
Series so that it will qualify, and continue to qualify (except where
extraordinary circumstances dictate otherwise), as a regulated investment
company under Subchapter M of the Code and regulations issued thereunder, and
conduct periodically Subchapter M compliance reviews in accordance with such
procedures as the Portfolio Trust and Subadviser determine appropriate, provided
that the Portfolio Trust shall be responsible for assuring that the
distributions to Portfolio Series shareholders determined by the Subadviser to
be necessary to comply with Subchapter M are made;

(d) furnish to the Portfolio Trust or to the Adviser whatever
statistical information the Portfolio Trust or the Adviser may reasonably
request with respect to the Portfolio Series's assets or contemplated
investments, provided that the Subadviser's responsibilities to provide
performance-related information shall not include providing or calculating yield
information. In addition, the Subadviser will keep the Portfolio Trust, the
Trustees and the Adviser informed of developments materially affecting the
Portfolio Series's portfolio and shall, on the Subadviser's own initiative,
furnish to the Portfolio Trust and the Adviser from time to time whatever
information the Subadviser believes appropriate for this purpose;

<PAGE>

such periodic and special reports regarding the Portfolio Series as they may
reasonably request;

(f) immediately notify the Portfolio Trust and the Adviser in the event
that the Subadviser or any of its affiliates: (1) becomes aware that it is
subject to a statutory disqualification that prevents the Subadviser from
serving as an investment adviser pursuant to this Subadvisory Agreement; or (2)
becomes aware that it is the subject of an administrative proceeding or
enforcement action by the SEC or other regulatory authority. Although not
responsible for preparation of the Registration Statement with respect to the
Portfolio Series, the Subadviser further agrees to notify the Portfolio Trust
and the Adviser immediately of any material fact known to the Subadviser
respecting or relating to the Subadviser that is not contained in the
Registration Statement, or any amendment or supplement thereto, with respect to
the Portfolio Series but that is known to Subadviser to be required to be
disclosed therein, and of any statement contained therein that becomes untrue in
any material respect.

3. ALLOCATION OF CHARGES AND EXPENSES. Except as otherwise specifically
provided in this Section 3, the Subadviser shall pay the compensation and
expenses of all its directors, officers and employees (if any) who serve as
officers and executive employees of the Portfolio Trust (including the Portfolio
Series's share of payroll taxes), and the Subadviser shall make available,
without expense to the Portfolio Series, the service of its directors, officers
and employees (if any) who may be duly elected officers of the Portfolio Trust,
subject to their individual consent to serve and to any limitations imposed by
law.

The Subadviser shall not be required to pay any expenses of the
Portfolio Series other than those specifically allocated to the Subadviser in
this Section 3. In particular, but without limiting the generality of the
foregoing, the Subadviser shall not be responsible, except to the extent of the
reasonable compensation of such of the Portfolio Trust's employees (if any) as
are officers or employees of the Subadviser whose services may be involved, for
the following expenses of the Portfolio Series: organization and certain
offering expenses of the Portfolio Series (including out-of-pocket expenses);
fees payable to the Subadviser and to any other Portfolio Trust advisers or
consultants; legal expenses; auditing and accounting expenses; interest
expenses; telephone, telex, facsimile, postage and other communications
expenses; taxes and governmental fees; dues and expenses incurred by or with
respect to the Portfolio Trust in connection with membership in investment
company trade organizations; cost of insurance relating to fidelity coverage for
the Portfolio Trust's officers and employees; fees and expenses of any
custodian, subcustodian, transfer agent, registrar, or disbursing agent of the
Portfolio Series; payments for maintaining the Portfolio Series's financial
books and records and calculating the daily net asset value of the Portfolio
Series; other payments for portfolio pricing or valuation services to pricing
agents, accountants, bankers and other specialists, if any; expenses relating to
investor and public relations; freight, insurance and other charges in
connection with the shipment of the portfolio securities of the Portfolio
Series; brokerage commissions or other costs of acquiring or disposing of any
portfolio securities or other assets of the Portfolio Series, or of entering
into other transactions or engaging in any investment practices with respect to
the Portfolio Series; expenses of preparing and filing

<PAGE>

Registration Statements, reports and notices to investors; costs of stationery;
litigation expenses; costs of investors' and other meetings; the compensation
and all expenses (specifically including travel expenses relating to the
Portfolio Series's business) of officers, trustees and employees of the
Portfolio Trust who are not "interested persons" (as defined in the 1940 Act) of
the Subadviser; and travel expenses (or an appropriate portion thereof) of
officers or trustees of the Portfolio Trust (if any) who are officers, directors
or employees of the Subadviser to the extent that such expenses relate to
attendance at meetings of the Trustees of the Portfolio Trust or any committees
thereof or advisers thereto.

<S> <C>
NET ASSETS FEE RATE

Up to $25 million 0.70%
$25,000,001 - $50 million 0.55%
$50,000,001 - $250 million 0.425%
Over $250 million 0.375%
</TABLE>

<PAGE>

5. BOOKS AND RECORDS. The Subadviser agrees to maintain such books and
records with respect to its services to the Portfolio Series as are required by
Section 31 under the 1940 Act, and rules adopted thereunder, and by other
applicable legal provisions, and to preserve such records for the periods and in
the manner required by that Section, and those rules and legal provisions. The
Subadviser also agrees that records it maintains and preserves pursuant to Rules
31a-1 and Rule 31a-2 under the 1940 Act and otherwise in connection with its
services hereunder are the property of the Portfolio Trust and will be
surrendered promptly to the Portfolio Trust upon its request. The Subadviser
further agrees that it will furnish to regulatory authorities having the
requisite authority any information or reports in connection with its services
hereunder which may be requested in order to determine whether the operations of
the Portfolio Series are being conducted in accordance with applicable laws and
regulations.

6. STANDARD OF CARE AND LIMITATION OF LIABILITY. The Subadviser shall
exercise its best judgment in rendering the services provided by it under this
Subadvisory Agreement. The Subadviser shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Portfolio Series or
the holders of the Portfolio Series's interests in connection with the matters
to which this Subadvisory Agreement relate, provided that nothing in this
Subadvisory Agreement shall be deemed to protect or purport to protect the
Subadviser against any liability to the Portfolio Series or to holders of the
Portfolio Series's interests to which the Subadviser would otherwise be subject
by reason of willful misfeasance, bad faith or gross negligence on its part in
the performance of its duties or by reason of the Subadviser's reckless
disregard of its obligations and duties under this Subadvisory Agreement. As
used in this Section 6, the term "Subadviser" shall include any officers,
directors, employees or other affiliates of the Subadviser performing services
for the Portfolio Series.

7. INDEMNIFICATION.

(a) The Subadviser agrees to indemnify and hold harmless, the Portfolio
Trust, the Adviser, any affiliated person within the meaning of Section 2(a)(3)
of the 1940 Act ("affiliated person") of the Portfolio Trust or the Adviser and
each person, if any, who within the meaning of Section 15 of the Securities Act
of 1933 (the "1933 Act") controls the Portfolio Trust ("controlling person") or
the Adviser against any and all losses, claims, damages, liabilities or
litigation (including legal and other expenses), to which the Portfolio Trust,
the Adviser or such affiliated person or controlling person may become subject
under the 1933 Act, 1940 Act, the Advisers Act, under any other statute, at
common law or otherwise, arising out of the Subadviser's responsibilities as
subadviser of the Portfolio Series which (1) may be based upon any wrongful act
or omission by the Subadviser, any of its employees or representatives or any
affiliate of or any person acting on behalf of the Subadviser, or (2) may be
based upon any untrue statement or alleged untrue statement of a material fact
contained in a registration statement or prospectus covering the shares of the
Portfolio Series or any amendment thereof or any supplement thereto or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, if
such a statement or omission was made in reliance upon written information

<PAGE>

furnished to the Portfolio Trust, the Portfolio Series, the Adviser, or any
affiliated person of the Portfolio Trust, the Portfolio Series or the Adviser by
the Subadviser or any affiliated person of the Subadviser; provided, however,
that in no case is the Subadviser's indemnity in favor of the Portfolio Trust,
the Adviser or any affiliated person or controlling person of the Portfolio
Trust or the Adviser deemed to protect such person against any liability to
which any such person would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of his duties or
by reason of his reckless disregard of his obligations and duties under this
Agreement.

(b) The Adviser agrees to indemnify and hold harmless the Subadviser,
any affiliated person of the Subadviser and each controlling person of the
Subadviser against any and all losses, claims, damages, liabilities or
litigation (including legal and other expenses) to which the Subadviser or such
affiliated person or controlling person may become subject under the 1933 Act,
the 1940 Act, the Advisers Act, under any other statute, at common law or
otherwise, arising out of the Subadviser's responsibilities as investment
manager of the Portfolio Series which (1) may be based upon any wrongful act or
omission by the Adviser, any of its employees or representatives or any
affiliate of or any person acting on behalf of the Adviser or (2) may be based
upon any untrue statement or alleged untrue statement of a material fact
contained in a registration statement or prospectus covering shares of the
Portfolio Series or any Series or any amendment thereof or any supplement
thereto or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading unless such statement or omission was made in reliance upon written
information furnished to the Adviser or any affiliated person of the Adviser by
the Subadviser or any affiliated person of the Subadviser; provided, however,
that in no case is the indemnity of the Adviser in favor of the Subadviser, or
any affiliated person or controlling person of the Subadviser deemed to protect
such person against any liability to which any such person would otherwise be
subject by reason of willful misfeasance, bad faith, or gross negligence in the
performance of his duties or by reason of his reckless disregard of obligations
and duties under this Agreement.

(c) If any party seeks indemnification under this Agreement (an
"indemnified party"), it shall notify the other party (the "indemnifying party")
in writing of the assertion of any third party claim or action and shall deliver
all copies of materials received in connection with the matter to the
indemnifying party. The indemnifying party shall have the right to participate
at its own expense in the defense of any such claim or action with counsel of
its own choosing satisfactory to the indemnified party, and the indemnified
party shall cooperate fully with the indemnifying party in the defense or
settlement of any matter that is covered by paragraphs (a) or (b) above, subject
to reimbursement by the indemnifying party for expenses incurred by the
indemnified party in connection with the indemnifying party's participation in
the defense.

<PAGE>

Agreement, interfere in a material manner with the Subadviser's ability to meet
its obligations to the Adviser, the Portfolio Trust and the Portfolio Series
hereunder. When the Subadviser recommends the purchase or sale of a security for
other investment companies and other clients, and at the same time the
Subadviser recommends the purchase or sale of the same security for the
Portfolio Series, the Subadviser may, but shall be under no obligation to,
aggregate the orders for securities to be purchased or sold. It is understood
that in light of its fiduciary duty to the Portfolio Series, such transactions
will be executed on a basis that is fair and equitable to the Portfolio Series.
In connection with purchases or sales of portfolio securities for the account of
the Portfolio Series, neither the Subadviser nor any of its directors, officers
or employees shall act as a principal or agent or receive any commission.

9. DOCUMENTATION. The Portfolio Series shall provide the Subadviser
with the following documents, as requested by the Subadviser:

(a) the Registration Statement and any amendments thereto;

(b) the Declaration of Trust and By-laws (and any amendments thereto)
of the Portfolio Trust;

(c) resolutions of the Trustees authorizing the appointment of the
Subadviser to serve as Subadviser and approving this Subadvisory Agreement; and

(d) the Portfolio Trust's Notification of Registration on Form N-8A.

10. DURATION AND TERMINATION. This Subadvisory Agreement shall continue
until November 21, 1996 unless sooner terminated as provided herein.
Notwithstanding the foregoing, this Subadvisory Agreement may be terminated: (a)
at any time without penalty upon thirty (30) days' written notice to the
Subadviser by the Portfolio Series upon the vote of a majority of the Trustees
or upon the vote of a majority of the Portfolio Series's outstanding voting
securities, (b) at any time without penalty upon thirty (30) days' written
notice to the Subadviser by the Adviser; or (c) by the Subadviser upon thirty
(30) days' written notice to the Portfolio Series and the Adviser, provided that
the Subadviser shall continue to be responsible for managing the assets of the
Portfolio Series for sixty (60) business days after the end of the notice period
unless the Portfolio Series shall agree in writing to shorten the period.
Anything to the contrary herein notwithstanding, any termination carried out
pursuant to this Section 10(c) shall be without penalty and, further, the
compensation schedule set forth in Section 4 hereof shall apply to the service
of the Subadviser beyond the end of the notice period provided in this Section
10(c). This Subadvisory Agreement will also terminate automatically in the event
of its "assignment" (as defined in the 1940 Act) or the assignment or
termination of the Management Agreement.

11. USE OF NAMES. It is understood that the names Republic Funds and
Republic International Equity Fund or any derivative thereof or logo associated
therewith are the valuable property of Portfolio Trust and its affiliates. The
Subadviser agrees that it shall not use any such names (or derivative or logo)
without the prior consent of the Portfolio Trust, which shall not be
unreasonably withheld.

<PAGE>

It is understood that the names Capital and Capital Guardian Trust
Company or any derivative thereof or logo associated therewith are the valuable
property of Subadviser and its affiliates. The Portfolio Trust and the Portfolio
Series have the right to use any such name (or derivative or logo) in offering
materials of the Portfolio Series with the approval of the Subadviser and for so
long as the Subadviser is subadviser to the Portfolio Series. Upon termination
of this Agreement, the Portfolio Series shall forthwith cease to use any such
names (or derivative or logo). Subadviser agrees that it shall not (and shall
not permit the Portfolio Series to) publish any advertisement, sales literature,
notice, circular, report or other document making reference to Subadviser or any
of its officers, directors, affiliates or employees without the consent of
Subadviser, which shall not be unreasonably withheld.

12. AMENDMENTS. No provision of this Subadvisory Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, and no amendment of this Subadvisory
Agreement shall be effective until approved by an affirmative vote of (i) a
"majority of the outstanding voting securities" (as defined in the 1940 Act) of
the Portfolio Series, and (ii) a majority of the Trustees, including a majority
of the Trustees who are not "interested persons" (as defined in the 1940 Act) of
any party to this Subadvisory Agreement, cast in person at a meeting called for
the purpose of voting on such approval, if such approval is required by
applicable law.

13. NOTICES. Any notice or other communication required or permitted to
be given hereunder shall be given in writing and mailed, faxed or delivered to
the other party at its address as follows:

IF TO THE ADVISER:

Republic National Bank of New York
452 Fifth Avenue
New York, NY 10018

IF TO THE SUBADVISER:

Capital Guardian Trust Company
333 South Hope Street
Los Angeles, California 90071

Any party may specify a different or additional address for notice by
sending a written notice to the other at the address above, or at that or those
last given hereunder.

14. MISCELLANEOUS.

<PAGE>

between the parties arising out of this Agreement shall be solely in state or
federal district courts sitting in the State of New York.

(b) The captions of this Subadvisory Agreement are included for
convenience only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of November 21, 1994.

CAPITAL GUARDIAN TRUST COMPANY

By ______________________________
Name:
Title:

REPUBLIC NATIONAL BANK OF NEW YORK

By ______________________________
Name:
Title:

FT4205D

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM THE ANNUAL REPORT
DATED OCTOBER 31, 1995 FOR THE REPUBLIC FIXED INCOME PORTFOLIO AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH ANNUAL REPORT.
</LEGEND>
<CIK> 0000934882
<NAME> REPUBLIC PORTFOLIOS
<SERIES>
<NUMBER>001
<NAME>REPUBLIC FIXED INCOME PORTFOLIO

<S> <C>
<PERIOD-TYPE> 10-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> JAN-09-1995
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 37,854,514
<INVESTMENTS-AT-VALUE> 38,267,222
<RECEIVABLES> 1,629,600
<ASSETS-OTHER> 268,865
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 40,165,687
<PAYABLE-FOR-SECURITIES> 10,054,109
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 89,051
<TOTAL-LIABILITIES> 10,143,160
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 30,022,527
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 30,022,527
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 935,978
<OTHER-INCOME> 0
<EXPENSES-NET> 66,214
<NET-INVESTMENT-INCOME> 869,764
<REALIZED-GAINS-CURRENT> 1,056,225
<APPREC-INCREASE-CURRENT> 349,074
<NET-CHANGE-FROM-OPS> 2,275,063
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 29,972,427
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 53,963
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 143,506
<AVERAGE-NET-ASSETS> 17,744,650
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0.46
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM THE ANNUAL REPORT
DATED OCTOBER 31, 1995 FOR THE REPUBLIC INTERNATIONAL EQUITY PORTFOLIO AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ANNUAL REPORT.
</LEGEND>
<CIK> 0000934882
<NAME> REPUBLIC PORTFOLIOS
<SERIES>
<NUMBER>002
<NAME>REPUBLIC INTERNATIONAL EQUITY PORTFOLIO

<S> <C>
<PERIOD-TYPE> 10-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> JAN-09-1995
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 38,082,840
<INVESTMENTS-AT-VALUE> 39,264,711
<RECEIVABLES> 244,657
<ASSETS-OTHER> 1,025,777
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 40,535,145
<PAYABLE-FOR-SECURITIES> 553,714
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 52,523
<TOTAL-LIABILITIES> 606,237
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 39,928,908
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 39,928,908
<DIVIDEND-INCOME> 313,008
<INTEREST-INCOME> 101,630
<OTHER-INCOME> 0
<EXPENSES-NET> 121,303
<NET-INVESTMENT-INCOME> 293,335
<REALIZED-GAINS-CURRENT> (98,258)
<APPREC-INCREASE-CURRENT> 1,700,597
<NET-CHANGE-FROM-OPS> 1,895,674
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 39,878,808
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 131,059
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 263,972
<AVERAGE-NET-ASSETS> 23,263,334
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0.64
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>