FUNDMANAGER TRUST, 497, 1996-02-05

FUNDMANAGER TRUST
497, 1996-02-05

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<PAGE>

FUNDMANAGER FUNDS -- FINANCIAL ADVISER CLASS

ONE BEACON STREET, BOSTON, MASSACHUSETTS 02108
- -------------------------------------------------------------------------------
GENERAL INFORMATION: (800) 344-9033 (TOLL FREE)

FundManager Trust (the "Trust" or "FundManager Funds") is an open-end,
management investment company consisting of five separate diversified series
with different investment objectives (the "Funds"). Each Fund (except for
Managed Total Return Fund) offers two classes of shares. The shares offered by
this Prospectus are the Financial Adviser Class (the "Class") of shares
("Shares"). The Funds seek to achieve their objectives by investing in shares of
other open-end investment companies commonly called mutual funds. This policy
involves certain expenses in addition to those applicable to direct investment
in mutual funds. See "Risks and Other Considerations -- Expenses". The M.D.
Hirsch Division of Freedom Capital Management Corporation ("Freedom Capital
Management" or the "Adviser") continuously manages each Fund's investment
portfolio. Prior to May 8, 1995, the Funds were diversified series of the
Republic Funds (the "Predecessor Funds"), also an open-end, management
investment company.

AGGRESSIVE GROWTH FUND SEEKS CAPITAL APPRECIATION WITHOUT REGARD TO CURRENT
INCOME.

GROWTH FUND PRIMARILY SEEKS LONG-TERM CAPITAL APPRECIATION. CURRENT INCOME IS
A SECONDARY CONSIDERATION.

GROWTH & INCOME FUND SEEKS A COMBINATION OF CAPITAL APPRECIATION AND CURRENT
INCOME

BOND FUND (FORMERLY, THE INCOME FUND) SEEKS A HIGH LEVEL OF CURRENT INCOME.

MANAGED TOTAL RETURN FUND SEEKS HIGH TOTAL RETURN (CAPITAL APPRECIATION AND
CURRENT INCOME).

Shares of the Funds are offered for sale at net asset value by Signature
Broker-Dealer Services, Inc. ("Signature"), Tucker Anthony Incorporated ("Tucker
Anthony") and Sutro & Co. Incorporated ("Sutro")(collectively, the
"Distributors") as an investment vehicle for individuals, institutions,
corporations and fiduciaries. The Funds pay expenses related to the distribution
of their Shares. See "Management of the Trust -- The Distributors". In addition,
the Funds may invest in shares of mutual funds which charge sales loads and/or
pay their own distribution expenses.

INVESTMENTS IN THE FUNDS ARE NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT. SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK, AND THE SHARES ARE NOT FEDERALLY INSURED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY
OTHER AGENCY. AN INVESTMENT IN THE FUNDS IS SUBJECT TO INVESTMENT RISKS,
INCLUDING POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.

THIS PROSPECTUS SETS FORTH CONCISELY THE INFORMATION A PROSPECTIVE
INVESTOR SHOULD KNOW BEFORE INVESTING IN THE FUNDS. A STATEMENT OF ADDITIONAL
INFORMATION (THE "SAI") DATED JANUARY 29, 1996 AND AS SUPPLEMENTED FROM TIME
TO TIME CONTAINING ADDITIONAL AND MORE DETAILED INFORMATION ABOUT THE FUNDS
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ("SEC") AND IS
HEREBY INCORPORATED BY REFERENCE INTO THIS PROSPECTUS. IT IS AVAILABLE WITHOUT
CHARGE AND CAN BE OBTAINED BY WRITING OR CALLING THE TRUST AT THE ADDRESS AND
INFORMATION NUMBERS PRINTED ABOVE.

--------------------
This Prospectus should be read and retained for information about the Funds.
--------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

THE DATE OF THIS PROSPECTUS IS JANUARY 29, 1996.

<PAGE>
HIGHLIGHTS

FUNDMANAGER FUNDS PAGE 10
The Trust is a Delaware business trust which consists of five separate
series Aggressive Growth Fund, Growth Fund, Growth & Income Fund, Bond Fund and
Managed Total Return Fund. Each Fund seeks to achieve its investment objective
by investing in mutual funds registered with the SEC.

INVESTMENT OBJECTIVES PAGE 10
Each Fund has distinct investment objectives. Aggressive Growth Fund seeks
capital appreciation without regard to current income. Growth Fund primarily
seeks capital appreciation with current income a secondary consideration. Growth
& Income Fund seeks a combination of capital appreciation and current income.
Bond Fund seeks a high level of current income. Managed Total Return Fund seeks
high total return (capital appreciation and current income). The mutual funds in
which the Funds invest may invest in securities which entail certain risks.
These risks are described in "Investments of and Investment Techniques employed
by Mutual Funds in Which the Fund May Invest".

RISKS AND OTHER CONSIDERATIONS PAGE 21
Investing through a Fund in an underlying portfolio of mutual funds
involves certain additional expenses and certain tax results which would not be
present in a direct investment in mutual funds. See "Expenses" and "Dividends,
Distributions and Taxes". In addition, Federal law imposes certain limits on the
purchases of mutual fund shares by the Funds.

MANAGEMENT OF FUNDMANAGER FUNDS PAGE 23
The Trust has retained Freedom Capital Management to act as its investment
adviser. For its services, the Adviser receives from each Fund a fee at the
annual rate of 0.50% of the Fund's average daily net assets up to $500 million
and 0.40% of its average daily net assets in excess of $500 million. See "The
Adviser".

The Trust has retained Signature to provide certain management and
administrative services to the Funds. For these services, each Fund pays
Signature a fee at the annual rate of 0.25% of the first $50 million of that
Fund's average daily net assets, 0.20% of the next $50 million of such assets,
and 0.15% of such assets in excess of $100 million. See "The Administrator".

With respect to the Class, the Trust has adopted a Distribution Plan
pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended (the
"1940 Act"), under which each Fund will reimburse the Distributors (in amounts
up to 0.50% of that Fund's average daily net assets attributable to the Class)
for marketing costs and payments to other organizations for services rendered in
distributing the Funds' Shares. In addition, Signature receives dealer
reallowances on the Funds' purchases of mutual funds sold with a sales load. See
"The Distributors" and "Portfolio Transactions".

The Trust also contracts with various organizations to provide
administrative services for the Class, such as maintaining shareholder accounts
and records. Each Fund pays fees to these organizations in amounts up to an
annual rate of 0.25% of the daily net asset value of that Fund's Shares owned by
shareholders with whom the organization has a servicing relationship.

PURCHASE OF SHARES PAGE 26
Shares of the Funds are offered at net asset value by the Distributors as
an investment vehicle for individuals, institutions, corporations and
fiduciaries. The minimum initial investment for each Fund is $1,000, and the
minimum subsequent investment is $100 except that the minimum initial investment
for an Individual Retirement Account ("IRA") is $250. The Trust may issue shares
of one or more of the Funds in exchange for mutual fund shares meeting that
Fund's investment objective as determined by the Adviser.

REDEMPTION OF SHARES PAGE 29
Shares may be redeemed at their next determined net asset value. See
"Determination of Net Asset Value". Redemptions may be made by letter or wire.
The Trust reserves the right to redeem upon not less than 30 days' notice all
shares of a Fund in an account (other than an IRA) which has a value below $50.

DIVIDENDS, DISTRIBUTIONS AND TAXES PAGE 31
Aggressive Growth Fund will distribute net investment income annually;
Growth Fund will distribute net investment income semiannually; Growth & Income
Fund and Managed Total Return Fund will distribute net investment income
quarterly; and Bond Fund will distribute its net investment income monthly. Each
Fund will distribute any net realized capital gains at least annually unless
otherwise instructed. All dividends and distributions will be reinvested
automatically at net asset value in additional shares of the Fund making the
distribution.

FUND EXPENSES+
The following table illustrates the expenses and fees that a shareholder of
each Fund will incur.

<TABLE>
<CAPTION>
GROWTH MANAGED
AGGRESSIVE & TOTAL
GROWTH GROWTH INCOME BOND RETURN
------------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Advisory and Administrative Fees ................ .75% .75% .75% .73% .75%
Distribution Fees (including shareholder
servicing and 12b-1 fees*) ..................... .47 .45 .45 .46 .49
Other Expenses .................................. .43 .57 .39 .26 .85
---- ---- ---- ---- -----
Total Fund Operating Expenses ................... 1.65% 1.71% 1.59% 1.45% 2.09%
==== ==== ==== ==== ====
- ----------
+The Fund Expenses are based on the expenses of the Funds for the fiscal year ended September 30, 1995.
*Under rules of the National Association of Securities Dealers, Inc. (the "NASD"), a 12b-1 fee may be treated as a sales
charge for certain purposes under those rules. Because the 12b-1 fee is an annual fee charged against the assets of a Fund,
long-term shareholders may indirectly pay more in total sales charges than the economic equivalent of the maximum front-end
sales charge permitted by rules of the NASD. See "Management of the Trust -- The Distributors" on p. 24.
</TABLE>

The purpose of this table is to assist the shareholder in understanding the
various costs and expenses that an investor in the Fund will bear.

EXAMPLE

You would pay the following expenses on a $1,000 investment, assuming (1) 5%
gross annual return and (2) redemption at the end of each time period.

<TABLE>
<CAPTION>
GROWTH MANAGED
AGGRESSIVE & TOTAL
GROWTH GROWTH INCOME BOND RETURN
------------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
1 year ........................................... $ 17 $ 17 $ 16 $ 15 $ 21
3 years .......................................... 52 54 50 46 65
5 years .......................................... 90 93 87 79 112
10 years .......................................... 195 202 189 174 242
</TABLE>

This example should not be considered a representation of future expenses
which may be more or less than those shown. The assumed 5% annual return is
hypothetical and should not be considered a representation of past or future
annual return; actual return may be greater or less than the assumed amount.

Currently, the Funds have issued two classes of shares. The Funds offer by
separate prospectus another class of shares which are offered for sale at net
asset value by Tucker Anthony and Sutro and do not pay expenses related to the
distribution of such shares. Because the expenses vary between the classes,
performance will vary with respect to each class. Additional information
concerning the Funds' other class of shares may be obtained by calling toll-free
(800) 344-9033.

FINANCIAL HIGHLIGHTS

The Funds' financial data through September 30, 1995 shown below is to
assist investors in evaluating the performance of each Fund. The Predecessor
Funds' financial data is for the period from commencement of operations through
September 30, 1994. The information for the years ended September 30, 1995,
1994, 1993 and 1992 in the following schedules has been examined by Ernst &
Young LLP, independent auditors, whose 1995 report, dated November 10, 1995,
appears in the SAI. The information for the fiscal year ended September 30, 1991
and for prior fiscal year ends has been examined by other auditors who have
expressed an unqualified opinion on the schedules.

Freedom Capital Management is the Trust's investment adviser. From September
1, 1993 to February 21, 1995, the M.D. Hirsch Division of Republic Asset
Management Corporation ("Republic Asset Management"), an affiliate of Republic
National Bank of New York ("Republic"), served as investment adviser to the
Predecessor Funds. Prior to September 1, 1993, M.D. Hirsch Investment
Management, Inc. ("Hirsch"), also an affiliate of Republic, served as the
investment adviser to the Predecessor Funds. Prior to February 1, 1991, Republic
was the investment adviser to the Predecessor Funds.
<PAGE>
AGGRESSIVE GROWTH FUND

FINANCIAL HIGHLIGHTS -- FINANCIAL ADVISER CLASS

<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER 30,
---------------------------------------------------------------------------------------------
1995(a) 1994 1993 1992 1991 1990 1989 1988 1987 1986
------- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of year ................ $15.57 $16.70 $14.71 $14.73 $11.84 $14.67 $12.01 $16.62 $13.13 $11.08

Income from investment operations:
Net investment income (loss)(b) ... (0.13) (0.08) (0.04) (0.04) 0.06 0.08 0.03 0.03 0.06 --

Net realized and unrealized gain
(loss) on investments ............ 3.70 0.62 2.87 0.99 3.81 (2.23) 3.03 (2.46) 3.82 2.39
---- ---- ---- ---- ---- ----- ---- ----- ---- ----
Total from investment
operations ..................... 3.57 0.54 2.83 0.95 3.87 (2.15) 3.06 (2.43) 3.88 2.39

Less distributions:
Dividends to shareholders from
net investment income .......... -- -- -- -- (0.03) (0.07) -- (0.06) (0.02) (0.25)

Dividends to shareholders in
excess of net investment
income ......................... -- -- -- -- -- -- -- (0.13) -- --

Dividends to shareholders from
realized capital gains+......... (0.83) (1.67) (0.84) (0.97) (0.95) (0.61) (0.40) (1.99) (0.37) (0.09)
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Total distributions ............ (0.83) (1.67) (0.84) (0.97) (0.98) (0.68) (0.40) (2.18) (0.39) (0.34)
===== ===== ===== ===== ===== ===== ===== ===== ===== =====

Net asset value, end of year ..... $18.31 $15.57 $16.70 $14.71 $14.73 $11.84 $14.67 $12.01 $16.62 $13.13
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Total return(c) ...... ............. 24.30% 3.30% 19.90% 6.30% 34.90% (15.20%) 26.30% (12.70%) 30.30% 21.90%
Ratios/supplemental data:
Net assets, end of year
(in 000's) ........................ $33,668 $37,766 $31,201 $29,096 $22,644 $16,820 $20,929 $26,364 $49,645 $44,389

Ratio of expenses to average
net assets (b) .................. 1.65% 1.70% 1.52% 1.61% 1.86% 1.96% 1.83% 1.94% 1.48% 1.48%

Ratio of net investment income
(loss) to average (0.68%) (0.57%) (0.24%) (0.17%) 0.36% 0.49% 0.43% 0.23% 0.43% 0.04%

Portfolio turnover rate .......... 50% 43% 35% 24% 45% 31% 15% 26% 64% 133%
- -----------------------------------------------------------------------------------------------------------------------------------
+ Paid from realized net
short-term gain .................. $0.04 $0.253 -- $ 0.027 $ 0.360 $0.146 $0.140 $0.180 -- $0.010
(a)Freedom Capital Management became the investment adviser on February 21, 1995.
(b)During the years ended September 30, 1991 and 1990, affiliated parties voluntarily waived a portion of their fees.
Additionally, during the years ended September 30, 1990 and 1989, expenses were limited to a percentage of average net
assets in accordance with a state expense limitation. If neither the voluntary waiver nor state expense limitation had
been in effect, the ratios of expenses to average net assets for the years ended September 30, 1991, 1990 and 1989 would
have been 1.95%, 2.10% and 1.92%, respectively. Expenses borne by the Fund's Investment Adviser and Distributor for the
years ended September 30, 1991, 1990 and 1989 amounted to $0.01, $0.02 and $0.01 per share, respectively.
(c)Total return data does not reflect the sales load payable on purchases of shares. Effective May 8, 1995, the Fund no
longer imposes a one-time sales charge.
</TABLE>
<PAGE>

GROWTH FUND

FINANCIAL HIGHLIGHTS -- FINANCIAL ADVISER CLASS

<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER 30,
---------------------------------------------------------------------------------------------
1995(a) 1994 1993 1992 1991 1990 1989 1988 1987 1986
------- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of year ................ $14.09 $14.62 $14.40 $13.96 $11.68 $15.32 $12.73 $15.71 $12.82 $11.04

Income from investment operations:
Net investment income (loss)(b) ... (0.02) (0.05) 0.02 0.07 0.14 0.24 0.26 0.23 0.22 0.20
Net realized and unrealized gain
(loss) on investments ............ 2.99 0.69 2.10 1.23 3.01 (2.23) 2.66 (1.63) 3.05 2.08
---- ---- ---- ---- ---- ----- ---- ----- ---- ----
Total from investment
operations ..................... 2.97 0.64 2.12 1.30 3.15 (1.99) 2.92 (1.40) 3.27 2.28

Less distributions:
Dividends to shareholders from
net investment income .......... -- -- -- (0.09) (0.37) (0.19) (0.19) (0.36) (0.14) (0.39)
Dividends to shareholders from
realized capital gains+ ......... (0.92) (1.17) (1.90) (0.77) (0.50) (1.46) (0.14) (1.22) (0.24) (0.11)

Total distributions ............ (0.92) (1.17) (1.90) (0.86) (0.87) (1.65) (0.33) (1.58) (0.38) (0.50)
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Net asset value, end of year ... $16.14 $14.09 $14.62 $14.40 $13.96 $11.68 $15.32 $12.73 $15.71 $12.82
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Total return(c) .................... 22.6% 4.50% 16.00% 9.40% 28.50% (14.30%) 23.30% (7.40%) 26.10% 21.10%

Ratios/supplemental data:
Net assets, end of year
(in 000's) ........................ $26,022 $34,205 $21,919 $21,420 $26,336 $21,232 $26,160 $40,466 $48,556 $32,851
Ratio of expenses to average
net assets(b) ................... 1.71% 1.71% 1.70% 1.60% 1.90% 1.92% 1.78% 1.80% 1.53% 1.56%
Ratio of net investment income
to average net assets ........... (0.11%) (0.52%) 0.15% 0.59% 1.21% 1.64% 1.87% 1.89% 1.50% 1.55%
Portfolio turnover rate .......... 68% 44% 40% 44% 54% 70% 23% 51% 65% 107%
- -----------------------------------------------------------------------------------------------------------------------------------
+ Paid from realized net
short-term gain .................. $0.10 $0.224 $0.160 $0.025 $0.060 $ 0.015 $0.140 $0.150 $ -- $0.042
(a)Freedom Capital Management became the investment adviser on February 21, 1995.
(b)During the years ended September 30, 1991 and 1990, affiliated parties voluntarily waived a portion of their fees.
Additionally, during the years ended September 30, 1990 and 1989, expenses were limited to a percentage of average net
assets in accordance with a state expense limitation. If neither the voluntary waiver nor state expense limitation had
been in effect, the ratios of expenses to average net assets for the years ended September 30, 1991, 1990 and 1989 would
have been 1.92%, 2.00% and 1.84%, respectively. Expenses borne by the Fund's Investment Adviser and Distributor amounted
to less than $0.01 per share for each of the years ended September 30, 1991, 1990 and 1989.
(c)Total return data does not reflect the sales load payable on purchases of shares. Effective May 8, 1995, the Fund no
longer imposes a one-time sales charge.
</TABLE>
<PAGE>

GROWTH & INCOME FUND

FINANCIAL HIGHLIGHTS -- FINANCIAL ADVISER CLASS

<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER 30,
---------------------------------------------------------------------------------------------
1995(a) 1994 1993 1992 1991 1990 1989 1988 1987 1986
------- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of year ................ $15.99 $16.50 $15.11 $14.39 $12.30 $14.96 $12.47 $14.52 $12.86 $11.10

Income from investment operations:
Net investment income(b) .......... 0.27 0.35 0.28 0.31 0.49 0.46 0.47 0.43 0.45 0.45

Net realized and unrealized gain
(loss) on investments ............ 3.19 0.18 1.97 1.07 2.59 (2.61) 2.32 (1.14) 2.00 1.86
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total from investment
operations ..................... 3.46 0.53 2.25 1.38 3.08 (2.15) 2.79 (0.71) 2.45 2.31

Less distributions:
Dividends to shareholders from
net investment income .......... (0.33) (0.30) (0.33) (0.29) (0.68) (0.51) (0.30) (0.61) (0.43) (0.40)

Dividends to shareholders from
realized capital gains+ ........ (0.84) (0.74) (0.53) (0.37) (0.31) -- -- (0.61) (0.36) (0.15)

Dividends to shareholders in
excess of realized capital
gains ......................... -- -- -- -- -- -- -- (0.12) -- --
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total distributions ............ (1.17) (1.04) (0.86) (0.66) (0.99) (0.51) (0.30) (1.34) (0.79) (0.55)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value, end of year ..... $18.28 $15.99 $16.50 $15.11 $14.39 $12.30 $14.96 $12.47 $14.52 $12.86
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Total return(c) ...... ............. 23.30% 3.30% 15.50% 9.80% 26.20% (14.80%) 22.70% (3.40%) 19.70% 21.60%
Ratios/supplemental data:
Net assets, end of year
(in 000's) ....................... $35,643 $52,595 $40,269 $36,603 $35,018 $30,063 $38,852 $53,588 $91,620 $50,816

Ratio of expenses to average
net assets(b) ................... 1.59% 1.55% 1.49% 1.50% 1.85% 1.87% 1.65% 1.67% 1.39% 1.49%

Ratio of net investment income
to average net assets ........... 1.72% 1.88% 1.77% 2.10% 3.67% 3.31% 3.43% 3.55% 3.20% 3.44%

Portfolio turnover rate .......... 12% 35% 24% 26% 48% 37% 15% 29% 20% 87%
- -----------------------------------------------------------------------------------------------------------------------------------
+ Paid from realized net
short-term gain .................. $ -- $ 0.143 $ 0.090 $ -- $ 0.046 $ -- $ -- $ 0.140 $ 0.040 $ 0.35

(a)Freedom Capital Management became the investment adviser on February 21, 1995.
(b)During the years ended September 30, 1991 and 1990, affiliated parties voluntarily waived a portion of their fees.
Additionally, during the years ended September 30, 1990 and 1989, expenses were limited to a percentage of average net
assets in accordance with a state expense limitation. If neither the voluntary waiver nor state expense limitation had
been in effect, the ratios of expenses to average net assets for the years ended September 30, 1991, 1990 and 1989 would
have been 1.87%, 1.90% and 1.73%, respectively. Expenses borne by the Fund's Investment Adviser and Distributor amounted
to less than $0.01 per share each for the years ended September 30, 1991, 1990 and $0.01 for the year ended September 30, 1989.
(c)Total return data does not reflect the sales load payable on purchases of shares. Effective May 8, 1995, the Fund no
longer imposes a one-time sales charge.
</TABLE>
<PAGE>

BOND FUND

FINANCIAL HIGHLIGHTS -- FINANCIAL ADVISER CLASS
<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER 30,
---------------------------------------------------------------------------------------------
1995(a) 1994 1993 1992 1991 1990 1989 1988 1987 1986
------- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of year ................ $ 9.66 $10.67 $10.28 $ 9.75 $ 9.17 $ 9.60 $ 9.77 $ 9.90 $10.68 $10.66

Income from investment operations:
Net investment income (b) ......... 0.52 2.19 0.60 0.64 0.70 0.67 0.77 0.83 0.90 0.93
Net realized and unrealized gain
(loss) on investments ............ 0.49 (2.55) 0.43 0.49 0.59 (0.43) (0.13) (0.07) (0.71) 0.27
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total from investment
operations ..................... 1.01 (0.36) 1.03 1.13 1.29 0.24 0.64 0.76 0.19 1.20

Less distributions:
Dividends to shareholders from
net investment income .......... (0.46) (0.53) (0.54) (0.60) (0.71) (0.67) (0.78) (0.89) (0.92) (1.17)

Dividends to shareholders from
realized capital gains+ ........ -- (.12) (1.10) -- -- -- -- -- (0.05) (0.01)

Dividends to shareholders in
excess of realized capital
gains ......................... -- -- -- -- -- -- (0.03) -- (0.01) --
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total distributions ............ (0.46) (0.65) (0.64) (0.60) (0.71) (0.67) (0.81) (0.89) (0.98) (1.18)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value, end of year ..... $10.21 $ 9.66 $10.67 $10.28 $ 9.75 $ 9.17 $ 9.60 $ 9.77 $ 9.90 $10.68
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Total return(c) ...... ............. 10.80% (3.60%) 10.40% 12.10% 14.70% 2.50% 6.90% 8.00% 1.70% 11.70%
Ratios/supplemental data:
Net assets, end of year
(in 000's) ....................... $77,419 $76,769 $54,057 $70,066 $57,632 $40,855 $52,094 $50,631 $53,444 $34,188

Ratio of expenses to average
net assets(b) ................... 1.45% 1.43% 1.29% 1.28% 1.57% 1.75% 1.58% 1.81% 1.61% 1.74%

Ratio of net investment income
(loss) to average net assets .... 5.38% 4.67% 5.70% 6.42% 7.00% 7.22% 7.89% 8.51% 8.63% 8.75%

Portfolio turnover rate .......... 53% 41% 53% 21% 46% 48% 109% 52% 27% 125%
- -----------------------------------------------------------------------------------------------------------------------------------
+Paid from realized net
short-term gain .................. $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ 0.040 $ --
(a)Freedom Capital Management became the investment adviser on February 21, 1995.
(b)During the years ended September 30, 1991 and 1990, affiliated parties voluntarily waived a portion of their fees.
Additionally, during the years ended September 30, 1990 and 1989, expenses were limited to a percentage of average net
assets in accordance with a state expense limitation. If neither the voluntary waiver nor state expense limitation had
been in effect, the ratios of expenses to average net assets for the years ended September 30, 1991, 1990 and 1989 would
have been 1.64%, 1.78% and 1.62%, respectively. Expenses borne by the Fund's Investment Adviser and Distributor amounted
to less than $0.01 per share each for the years ended September 30, 1991, 1990 and 1989.
(c)Total return data does not reflect the sales load payable on purchases of shares. Effective May 8, 1995, the Fund no
longer imposes a one-time sales charge.
</TABLE>
<PAGE>

MANAGED TOTAL RETURN FUND

FINANCIAL HIGHLIGHTS -- FINANCIAL ADVISER CLASS
<TABLE>
<CAPTION>
AUGUST 4, 1984
(COMMENCEMENT
OF OPERATIONS)
YEARS ENDED SEPTEMBER 30, THROUGH
-------------------------------------------------------------------- SEPTEMBER 30,
1995(A) 1994 1993 1992 1991 1990 1989 1988
------- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, beginning of year ....... $11.24 $12.03 $11.48 $11.07 $ 9.60 $11.45 $10.14 $10.00

Income from investment operations:
Net investment income(b) ............... 0.28 0.18 0.29 0.34 0.44 0.51 0.54 0.04
Net realized and unrealized gain
(loss) on investments ................. 1.18 (0.16) 0.90 0.57 1.42 (0.94) 0.96 0.10
------ ------ ------ ------ ------ ------ ------ ------
Total from investment operations ..... 1.46 0.02 1.19 0.91 1.86 (0.43) 1.50 0.14
------ ------ ------ ------ ------ ------ ------ ------
Less distributions:

Dividends to shareholders from net
investment income ..................... (0.30) (0.31) (0.26) (0.41) (0.39) (0.63) (0.16) --
Dividends to shareholders from
realized capital gains+ .............. (0.75) (0.50) (0.38) (0.09) -- (0.79) (0.03) --
------ ------ ------ ------ ------ ------ ------ ------
Total distributions .................. (1.05) (0.81) (0.64) (0.50) (0.39) (1.42) (0.19) --
------ ------ ------ ------ ------ ------ ------ ------
Net asset value, end of year ........... $11.65 $11.24 $12.03 $11.48 $11.07 $ 9.60 $11.45 $10.14
====== ====== ====== ====== ====== ====== ====== ======
Total return(c) .......................... 14.30% 0.10% 10.80% 8.40% 20.10% (4.40%) 15.10% 1.40%

Ratios/supplemental data:
Net assets, end of year (in 000's) ..... $14,749 $17,515 $25,519 $20,894 $14,678 $17,041 $17,031 $10,275
Ratio of expenses to average
net assets(b) ......................... 2.09% 1.94% 1.80% 1.90% 2.00% 1.93% 1.62% 2.90%(d)
Ratio of net investment income to
average net assets .................... 2.29% 1.60% 2.54% 3.09% 4.41% 4.89% 5.24% 2.49%(d)
Portfolio turnover rate ................ 50% 50% 40% 37% 15% 47% 71% 0%
- -----------------------------------------------------------------------------------------------------------------------------------
+Paid from realized net short term gain .. $ -- $ 0.132 $ 0.080 $ 0.015 $ -- $ 0.313 $ 0.014 $ --
(a)Freedom Capital Management became the investment adviser on February 21, 1995.
(b)During the years ended September 30, 1992, 1991 and 1990, affiliated parties voluntarily waived a portion of their fees.
Additionally, during the years ended September 30, 1992, 1991, 1990 and 1989, expenses were limited to a percentage of
average net assets in accordance with a state expense limitation. If neither the voluntary waiver nor state expense
limitation had been in effect, the ratios of expenses to average net assets for the years ended September 30, 1992, 1991,
1990 and 1989 would have been 2.01%, 2.26%, 2.07% and 1.74%, respectively. Expenses borne by the Fund's Investment Adviser
and Distributor for the years ended September 30, 1992, 1991, 1990 and 1989 amounted to $0.01, $0.03, $0.01 and $0.01 per
share, respectively.
(c)Total return does not reflect the sales load payable on purchase of shares. Effective May 8, 1995, the Fund no longer
imposes a one-time sales charge.
(d)Annualized.
</TABLE>
<PAGE>

FUNDMANAGER FUNDS
The Trust was organized as a Delaware business trust on February 7, 1995 and
is an open-end management investment company registered under the 1940 Act
consisting of five separate series -- Aggressive Growth Fund, Growth Fund,
Growth & Income Fund, Income Fund and Managed Total Return Fund. Prior to May 8,
1995, the Funds were series of the Republic Funds, also an open-end management
investment company. Investment in shares of one or more of the Funds involves
risks and there can be no assurance that the Funds' investment objectives will
be achieved.

INVESTMENT OBJECTIVES
Each Fund seeks to achieve its investment objective by investing in a
portfolio of approximately ten to fifteen mutual funds (the "underlying funds")
although it may invest up to 25% of its total assets in any one underlying fund.
At times, for temporary defensive purposes when warranted by general economic
and financial conditions, a Fund may invest in money market mutual funds or
invest directly in (or enter into repurchase agreements (maturing in seven days
or less) with banks and broker-dealers with respect to) short-term debt
securities, including U.S. Treasury bills and other short-term U.S. Government
securities, commercial paper, certificates of deposit and bankers' acceptances.
However, except when a Fund is in a temporary defensive investment position or
as may be considered necessary to accumulate cash in order to satisfy minimum
purchase requirements of the underlying funds or to meet anticipated
redemptions, a Fund normally will maintain its assets invested in underlying
funds. Although all of the Funds may invest in shares of the same underlying
fund, the percentage of each Fund's assets so invested may vary and the Adviser
will determine that such investments are consistent with the investment
objectives and policies of each particular Fund. A Fund may not purchase shares
of any closed-end investment company or of any investment company which is not
registered with the SEC. Each Fund's investment objectives and certain of its
related policies and activities are fundamental and may not be changed by the
Trustees of the Trust, on behalf of a particular Fund, without approval of the
shareholders of that Fund.

AGGRESSIVE GROWTH FUND
The investment objective of Aggressive Growth Fund is capital appreciation
without regard to current income. The underlying funds in which it invests will
consist of funds which seek capital growth or appreciation by investing
primarily in common stock or securities convertible into or exchangeable for
common stock (such as convertible preferred stock, convertible debentures or
warrants). For temporary defensive purposes, these funds also may invest in (or
enter into repurchase agreements with banks and broker-dealers with respect to)
corporate bonds, U.S. Government securities, commercial paper, certificates of
deposit or other money market securities.

The Fund also may invest in funds which invest primarily in long- or
short-term bonds and other fixed income securities (such as securities issued or
guaranteed or insured by the U.S. Government, its agencies or instrumentalities,
commercial paper, preferred stock, convertible preferred stock or convertible
debentures) whenever the Adviser believes that these funds offer a potential for
capital appreciation. These underlying funds may invest in investment grade
bonds or in bonds which are not considered investment grade (commonly referred
to as "junk bonds"). The Fund will limit its direct and indirect investment in
junk bonds to less than 5% of its assets. See "Bond Fund" and "Description of
Bond Ratings".

The underlying funds in which Aggressive Growth Fund invests may incur more
risk than those in which Growth Fund and Growth & Income Fund invest. For
example, they may trade their portfolios more actively (which results in higher
brokerage commissions and increased realization of taxable capital gains) and/or
invest in companies whose securities are subject to more erratic market
movements. The underlying funds also may invest up to 100% of their assets in
securities of foreign issuers and engage in foreign currency transactions with
respect to these investments; invest up to 10% of their assets in restricted or
illiquid securities (excluding Rule 144A securities which are deemed liquid by
the Trustees) ("Restricted Securities"); invest up to 5% of their assets in
warrants; lend their portfolio securities; sell securities short; borrow money
in amounts up to 25% of their assets for investment purposes (i.e., leverage
their portfolios); write (sell) or purchase call or put options on securities or
on stock indexes; concentrate more than 25% of their assets in one industry;
invest up to 100% of their assets in master demand notes; and enter into futures
contracts and options on futures contracts. The risks associated with these
investments are described in the "Investments of and Investment Techniques
Employed by Mutual Funds in Which the Funds May Invest".

As a result, an investment in Aggressive Growth Fund can be expected to
involve greater risk than an investment in any of the other Funds.

GROWTH FUND
The primary investment objective of Growth Fund is long-term capital
appreciation. Current income is of secondary importance. The underlying funds in
which it invests will consist of funds which invest primarily in common stock or
securities convertible into or exchangeable for common stock (such as
convertible preferred stock, convertible debentures or warrants) and which seek
long-term capital growth or appreciation with current income typically of
secondary importance. For temporary defensive purposes, these funds also may
invest in (or enter into repurchase agreements with banks and broker-dealers
with respect to) corporate bonds, U.S. Government securities, commercial paper,
certificates of deposit or other money market instruments.

The underlying funds in which Growth Fund invests may be authorized to
invest up to 100% of their assets in the securities of foreign issuers and
engage in foreign currency transactions with respect to these investments;
invest up to 10% of their assets in Restricted Securities; invest up to 5% of
their assets in warrants; lend their portfolio securities; sell securities
short; borrow money in amounts up to 25% of their assets for investment
purposes; write or purchase call or put options on securities or stock indexes;
concentrate more than 25% of their assets in one industry; invest up to 100% of
their assets in master demand notes; and enter into futures contracts and
options on futures contracts. The risks associated with these investments are
described in "Investments of and Investment Techniques Employed by Mutual Funds
in Which the Funds May Invest".

GROWTH & INCOME FUND
The investment objective of Growth & Income Fund is realization of a
combination of capital appreciation and current income. The underlying funds in
which it invests will consist of funds which seek long-term capital appreciation
and/or funds which seek: (i) income from dividends; (ii) income from interest;
or (iii) growth of income (or any combination of (i)-(iii)). These underlying
funds invest in common stocks, preferred stocks, bonds and other fixed-income
securities (including convertible preferred stock and convertible debentures).
The underlying funds also may, for temporary defensive purposes, invest in (or
enter into repurchase agreements with banks and broker-dealers with respect to)
U.S. Government securities, commercial paper, certificates of deposit or other
money market securities.

These underlying funds may invest up to 100% of their assets in the
securities of foreign issuers and engage in foreign currency transactions with
respect to these investments; invest up to 10% of their assets in Restricted
Securities; invest up to 5% of their assets in warrants; lend their portfolio
securities; sell securities short; borrow money in amounts up to 25% of their
assets for investment purposes; write or purchase call or put options on
securities or on stock indexes; concentrate more than 25% of their assets in any
one industry; invest up to 100% of their assets in master demand notes; invest
in long- or short-term corporate bonds (see "Income Fund") and other fixed
income securities (such as U.S. Government securities, commercial paper,
preferred stock, convertible preferred stock and convertible debentures); and
enter into futures contracts and options on futures contracts. The risks
associated with these investments are described below.

BOND FUND
The investment objective of Bond Fund is a high level of current income. The
underlying funds in which it invests will include funds which seek high current
income by investing in long- or short-term bonds and other fixed income
securities (such as securities issued or guaranteed or insured by the U.S.
Government, its agencies or instrumentalities, commercial paper, preferred
stock, convertible preferred stock or convertible debentures). The underlying
funds also may lend their portfolio securities; sell securities short; borrow
money in amounts up to 25% of their assets for investment purposes; write or
purchase call or put options on securities or on stock indexes; invest up to
100% of their assets in master demand notes; and enter into futures contracts
and options on futures contracts.

The Fund will invest in underlying funds which limit their corporate bond
investments to investment grade bonds which generally are considered to be bonds
rated within one of the four highest quality grades assigned by Standard &
Poor's Corporation ("S&P") or Moody's Investor Services, Inc. ("Moody's") or
which are unrated but are deemed by an underlying fund's investment adviser to
be of comparable quality. These include bonds rated AAA, AA, A and BBB by S&P
and bonds rated Aaa, Aa, A and Baa by Moody's. Bonds rated BBB by S&P or Baa by
Moody's normally indicate a greater degree of investment risk than bonds with
higher ratings.

The Fund also will invest (without limitation) in underlying funds which
themselves may invest in corporate bonds which are not considered investment
grade bonds (commonly referred to as "junk bonds") by Moody's or S&P, or which
are unrated, and thus may carry a greater degree of risk than bonds considered
investment grade. These include bonds rated BB, B, CCC and CC by S&P, and Ba, B,
Caa, Ca and C by Moody's. These ratings may indicate that the bonds are
predominantly speculative with respect to the issuer's ability to pay interest
and repay principal and may indicate that the issuer soon may be or currently is
in default. The risks associated with these investments are described in
"Description of Bond Ratings". The Fund will limit its direct and indirect
investment in junk bonds to less than 35% of its net assets.

As a general matter, the current value of bonds varies inversely with
changes in prevailing interest rates. If interest rates increase after a bond is
purchased, the value of that security will normally decline. Conversely, should
prevailing interest rates decrease after a bond is purchased, its market price
will normally rise.

MANAGED TOTAL RETURN FUND
The investment objective of Managed Total Return Fund is to realize high
total return (capital appreciation and current income). Managed Total Return
Fund seeks to achieve its objective by investing in a broad range of underlying
funds. It will allocate its assets among one or more of five general types of
mutual funds: aggressive growth funds, growth funds, growth and income funds,
fixed income (bond) funds and money market funds. The Fund is unlikely at any
particular moment to have all its assets invested in only one of these general
types of funds. The Adviser will vary the proportion of each type of underlying
fund based on the mix of such funds that may, in the Adviser's view, be most
likely to achieve Managed Total Return Fund's investment objective.

In allocating assets among the five general types of underlying funds, the
Adviser will follow a multi-step investment analysis. First, the Adviser will
consider general political and economic trends and current financial and market
conditions in order to determine the current phase of the business and
investment cycle and to assess the risks and opportunities in the financial
markets. The Adviser will seek the most likely combination of fund types which
will provide the best opportunity for maximizing total return consistent with
prudent investment risk. The Adviser will not rely on a model in reaching asset
allocation decisions, but will make its own assessment of the relative
risk-reward levels of various asset types based on its past experience and
analysis of current conditions.

If the Adviser determines that the values of equity securities are likely to
rise, it may emphasize aggressive and conservative growth funds. In periods of
rising interest rates, it may emphasize holdings of money market funds or in
periods of falling interest rates it may emphasize fixed income funds, depending
upon conditions in the equity markets.

Second, after determining the relative proportion of assets to be allocated
to particular types of funds, the Adviser will identify whether certain specific
categories of funds offer greater potential for positive returns. For example,
the Adviser may choose to emphasize international equity funds or funds that
concentrate in a particular industry sector; or the Adviser may select fixed
income funds based on whether they invest primarily in long- or short-term debt
securities.

Finally, the Adviser will select those funds within the general or more
specific categories, as discussed, that offer the greatest potential for
positive returns in the Adviser's judgment.

Within the framework of the foregoing guidelines, the underlying funds in
which Managed Total Return Fund will invest will consist of funds which seek
capital growth and appreciation by investing primarily in common stock or
securities convertible into or exchangeable for common stock (such as
convertible preferred stock, convertible debentures or warrants); funds which
seek a combination of capital appreciation and current income (including income
from dividends, income from interest, growth of income or any combination
thereof) by investing primarily in common stocks, preferred stocks, bonds and
other fixed income securities (including convertible preferred stock and
convertible debentures); funds which seek high current income by investing
primarily in long- or short-term bonds and other fixed income securities (such
as securities issued, guaranteed or insured by the U.S. Government, its agencies
or instrumentalities, commercial paper, preferred stock, convertible preferred
stock or convertible debentures); and funds which seek as high a level of
current income as is consistent with preservation of capital and liquidity by
investing in a broad range of high quality, short-term money market instruments
which have remaining maturities not exceeding one year (including U.S.
Government securities, bank obligations, commercial paper, corporate debt
securities and repurchase agreements).

Some of the underlying funds in which Managed Total Return Fund invests may
incur more risk than others. For example, they may trade their portfolios more
actively (which results in higher brokerage commissions and increased
realization of taxable capital gains) and/or invest in companies whose
securities are subject to more erratic market movements. The underlying funds
also may invest up to 100% of their assets in securities of foreign issuers and
engage in foreign currency transactions with respect to these investments;
invest up to 10% of their assets in Restricted Securities; invest up to 5% of
their assets in warrants; lend their portfolio securities; sell securities
short; borrow money in amounts of up to 25% of their assets for investment
purposes (i.e., leverage their portfolios); write (sell) or purchase call or put
options on securities or on stock indexes; concentrate more than 25% of their
assets in one industry; invest up to 100% of their assets in master demand
notes; and enter into futures contracts and options on futures contracts. The
risks associated with these investments are described below.

Managed Total Return Fund may invest in underlying funds which limit their
corporate bond investments to investment grade bonds which generally are
considered to be bonds rated within one of the four highest quality grades
assigned by S&P or Moody's or underlying funds which invest in corporate bond
investments which are unrated but are deemed by an underlying fund's investment
adviser to be of comparable quality. It may also invest in underlying funds
which invest in corporate bonds which are not considered investment grade bonds
(commonly referred to as "junk bonds") by Moody's or S&P, or which are unrated,
and thus may carry a greater degree of risk than bonds considered investment
grade. These ratings may indicate that the bonds are predominantly speculative
with respect to the issuer's ability to pay interest and repay principal and may
indicate that the issuer soon may be or currently is in default. The risks
associated with these investments are described below. The Fund will limit its
direct and indirect investment in junk bonds to less than 35% of its assets.

At times, for temporary defensive purposes when warranted by general
economic and financial conditions, Managed Total Return Fund may invest in a
variety of short-term debt securities, including U.S. Treasury bills and other
U.S. Government securities, commercial paper, certificates of deposit, bankers'
acceptances and repurchase agreements with respect to such securities. However,
except when Managed Total Return Fund is in a temporary defensive investment
position or as may be considered necessary to accumulate cash in order to
satisfy minimum purchase requirements of the underlying funds or to meet
anticipated redemptions, it normally will maintain its assets invested in
underlying funds.

INVESTMENTS OF AND INVESTMENT TECHNIQUES
EMPLOYED BY MUTUAL FUNDS IN WHICH THE FUNDS MAY INVEST

ILLIQUID AND RESTRICTED SECURITIES. An underlying fund may invest not more than
10% of its total assets in securities for which there is no readily available
market ("illiquid securities") which would include Restricted Securities the
disposition of which would be subject to legal restrictions and repurchase
agreements having more than seven days to maturity. A considerable period of
time may elapse between an underlying fund's decision to dispose of such
securities and the time when the fund is able to dispose of them, during which
time the value of the securities (and therefore the value of the underlying
fund's shares held by a Fund) could decline.

FOREIGN SECURITIES. An underlying fund may invest up to 100% of its assets in
securities of foreign issuers. There may be less publicly available information
about these issuers than is available about companies in the U.S. and foreign
auditing requirements may not be comparable to those in the U.S. In addition,
the value of the fund's foreign securities may be adversely affected by
fluctuations in the exchange rates between foreign currencies and the U.S.
dollar, as well as other political and economic developments, including the
possibility of expropriation, confiscatory taxation, exchange controls or other
foreign governmental restrictions. In addition, income received by an underlying
fund from sources within foreign countries, such as dividends and interest
payable on foreign securities, may be subject to foreign taxes, including taxes
withheld from payments on those securities. Moreover, the underlying funds will
generally calculate their net asset values and complete orders to purchase,
exchange or redeem shares only on a Monday- Friday basis (excluding holidays on
which the NYSE is closed). Foreign securities in which the underlying funds may
invest may be listed primarily on foreign stock exchanges which may trade on
other days (such as Saturday). As a result, the net asset value of an underlying
fund's portfolio may be significantly affected by such trading on days when the
Adviser does not have access to the underlying funds and shareholders of the
Trust do not have access to their respective Funds. Under the 1940 Act an
underlying fund may maintain its foreign securities in custody of non-U.S. banks
and securities depositories.

INDUSTRY CONCENTRATION. An underlying fund may concentrate its investments
within one industry. Because the scope of investment alternatives within an
industry is limited, the value of the shares of such an underlying fund may be
subject to greater market fluctuation than an investment in a fund which invests
in a broader range of securities.

MASTER DEMAND NOTES. Although the Funds themselves will not do so, underlying
funds (particularly money market mutual funds) may invest up to 100% of their
assets in master demand notes. Master demand notes are unsecured obligations of
U.S. corporations redeemable upon notice that permit investment by a fund of
fluctuating amounts at varying rates of interest pursuant to direct arrangements
between the fund and the issuing corporation. Because they are direct
arrangements between the fund and the issuing corporation, there is no secondary
market for the notes. However, they are redeemable at face value, plus accrued
interest, at any time.

REPURCHASE AGREEMENTS. Underlying funds, particularly money market funds, may
enter into repurchase agreements with banks and broker-dealers under which they
acquire securities subject to an agreement with the seller to repurchase the
securities at an agreed upon time and price. The Funds also may enter into
repurchase agreements. These agreements are considered under the 1940 Act to be
loans by the purchaser collateralized by the underlying securities. If the
seller should default on its obligation to repurchase the securities, the
underlying fund may experience delay or difficulties in exercising its rights to
dispose of the securities held as collateral and might incur a loss if the value
of the securities should decline. For a more complete discussion of repurchase
agreements, see "Investment Policies" in the SAI.

LOANS OF PORTFOLIO SECURITIES. An underlying fund may lend its portfolio
securities provided: (i) the loan is secured continuously by collateral
consisting of U.S. Government securities or cash or cash equivalents maintained
on a daily mark-to-market basis in an amount at least equal to the current
market value of the securities loaned; (ii) the fund may at any time call the
loan and obtain the return of the securities loaned; (iii) the fund will receive
any interest or dividends paid on the loaned securities; and (iv) the aggregate
market value of securities loaned will not at any time exceed one-third of the
total assets of the fund. Loans of securities involve a risk that the borrower
may fail to return the securities or may fail to provide additional collateral.

SHORT SALES. An underlying fund may sell securities short. In a short sale, the
fund sells stock which it does not own, making delivery with securities
"borrowed" from a broker. The fund is then obligated to replace the security
borrowed by purchasing it at the market price at the time of replacement. This
price may or may not be less than the price at which the security was sold by
the fund. Until the security is replaced, the fund is required to pay to the
lender any dividends or interest which accrue during the period of the loan. In
order to borrow the security, the fund may also have to pay a premium which
would increase the cost of the security sold. The proceeds of the short sale
will be retained by the broker, to the extent necessary to meet margin
requirements, until the short position is closed out.

The fund also must deposit in a segregated account an amount of cash or U.S.
Government securities equal to the difference between (a) the market value of
the securities sold short at the time they were sold short and (b) the value of
the collateral deposited with the broker in connection with the short sale (not
including the proceeds from the short sale). While the short position is open,
the fund must maintain daily the segregated account at such a level that (i) the
amount deposited in it plus the amount deposited with the broker as collateral
equals the current market value of the securities sold short and (ii) the amount
deposited in it plus the amount deposited with the broker as collateral is not
less than the market value of the securities at the time they were sold short.
Depending upon market conditions, up to 80% of the value of a fund's net assets
may be deposited as collateral for the obligation to replace securities borrowed
to effect short sales and allocated to a segregated account in connection with
short sales.

The fund will incur a loss as a result of the short sale if the price of the
security increases between the date of the short sale and the date on which the
fund replaces the borrowed security. The fund will realize a gain if the
security declines in price between those dates. The amount of any gain will be
decreased and the amount of any loss increased by the amount of any premium,
dividends or interest the fund may be required to pay in connection with a short
sale.

A short sale is "against the box" if at all times when the short position is
open the fund owns an equal amount of the securities or securities convertible
into, or exchangeable without further consideration for, securities of the same
issue as the securities sold short. Such a transaction serves to defer a gain or
loss for Federal income tax purposes.

FOREIGN CURRENCY TRANSACTIONS. In connection with its portfolio transactions in
securities traded in a foreign currency, an underlying fund may enter into
forward contracts to purchase or sell an agreed upon amount of a specific
currency at a future date which may be any fixed number of days from the date of
the contract agreed upon by the parties at a price set at the time of the
contract. Under such an arrangement, concurrently with the entry into a contract
to acquire a foreign security for a specified amount of currency, the fund would
purchase with U.S. dollars the required amount of foreign currency for delivery
at the settlement date of the purchase; the fund would enter into similar
forward currency transactions in connection with the sale of foreign securities.
The effect of such transactions would be to fix a U.S. dollar price for the
security to protect against a possible loss resulting from an adverse change in
the relationship between the U.S. dollar and the subject foreign currency during
the period between the date the security is purchased or sold and the date on
which payment is made or received, the normal range of which is three to 14
days. These contracts are traded in the interbank market conducted directly
between currency traders (usually large commercial banks) and their customers. A
forward contract generally has no deposit requirement and no commissions are
charged at any stage for trades. Although such contracts tend to minimize the
risk of loss due to a decline in the value of the subject currency, they tend to
limit commensurately any potential gain which might result should the value of
such currency increase during the contract period.

LEVERAGE THROUGH BORROWING. An underlying fund may borrow up to 25% of the value
of its net assets on an unsecured basis from banks to increase its holdings of
portfolio securities. Under the 1940 Act, the fund is required to maintain
continuous asset coverage of 300% with respect to such borrowings and to sell
(within three days) sufficient portfolio holdings to restore such coverage if it
should decline to less than 300% due to market fluctuations or otherwise, even
if disadvantageous from an investment standpoint. Leveraging will exaggerate the
effect of any increase or decrease in the value of portfolio securities on the
fund's net asset value, and money borrowed will be subject to interest costs
(which may include commitment fees and/or the cost of maintaining minimum
average balances) which may or may not exceed the interest and option premiums
received from the securities purchased with borrowed funds.

WARRANTS. An underlying fund may invest in warrants, which are options to
purchase equity securities at specific prices valid for a specific period of
time. The prices do not necessarily move parallel to the prices of the
underlying securities. Warrants have no voting rights, receive no dividends and
have no rights with respect to the assets of the issuer. If a warrant is not
exercised within the specified time period, it will become worthless and the
fund will lose the purchase price and the right to purchase the underlying
security.

HIGH YIELD SECURITIES. Investing in high yield, high risk securities involves
special risks in addition to the risks associated with investments in higher
rated debt securities. High yield, high risk securities may be regarded as
predominantly speculative with respect to the issuer's continuing ability to
meet principal and interest payments.

High yield, high risk securities may be more susceptible to real or
perceived adverse economic and competitive industry conditions than higher grade
securities. The prices of high yield, high risk 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, high risk
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, high risk securities defaults, a fund
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
changes, and therefore tend to be more volatile than securities which pay
interest periodically and in cash.

The secondary markets on which high yield, high risk 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 a fund's shares. Adverse publicity
and investor perceptions, whether or not based on fundamental analysis, may
decrease the values and liquidity of high yield, high risk securities,
especially in a thinly traded market.

There may be special tax considerations associated with investing in high
yield, high risk securities structured as zero coupon or payment-in-kind
securities. A fund records the interest on these securities as income even
though it receives no cash interest until the security's maturity or payment
date. A fund will be required to distribute all or substantially all such
amounts annually and may have to obtain the cash to do so by selling securities
which otherwise would continue to be held. Shareholders will be taxed on these
distributions.

The use of credit ratings as the sole method of evaluating high yield, high
risk 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, high risk securities. Also, credit rating agencies may fail to change
credit ratings in a timely fashion to reflect events since the security was last
rated.

DERIVATIVES
An underlying fund may invest in the following 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.

OPTIONS ACTIVITIES. An underlying fund may write (i.e., sell) listed call
options ("calls") if the calls are "covered" throughout the life of the option.
A call is "covered" if the fund owns the optioned securities. When a fund writes
a call, it receives a premium and gives the purchaser the right to buy the
underlying security at any time during the call period (usually not more than
nine months in the case of common stock) at a fixed exercise price regardless of
market price changes during the call period. If the call is exercised, the fund
will forgo any gain from an increase in the market price of the underlying
security over the exercise price.

A fund may purchase a call on securities only to effect a "closing purchase
transaction" which is the purchase of a call covering the same underlying
security and having the same exercise price and expiration date as a call
previously written by the fund on which it wishes to terminate its obligation.
If the fund is unable to effect a closing purchase transaction, it will not be
able to sell the underlying security until the call previously written by the
fund expires (or until the call is exercised and the fund delivers the
underlying security).

An underlying fund also may write and purchase put options ("puts"). When a
fund writes a put, it receives a premium and gives the purchaser of the put the
right to sell the underlying security to the fund at the exercise price at any
time during the option period. When a fund purchases a put, it pays a premium in
return for the right to sell the underlying security at the exercise price at
any time during the option period. An underlying fund also may purchase stock
index puts which differ from puts on individual securities in that they are
settled in cash based on the values of the securities in the underlying index
rather than by delivery of the underlying securities. Purchase of a stock index
put is designed to protect against a decline in the value of the portfolio
generally rather than an individual security in the portfolio. If any put is not
exercised or sold, it will become worthless on its expiration date.

A fund's option positions may be closed out only on an exchange which
provides a secondary market for options of the same series, but there can be no
assurance that a liquid secondary market will exist at a given time for any
particular option. In this regard, trading in options on certain securities
(such as U.S. Government securities) is relatively new so that it is impossible
to predict to what extent liquid markets will develop or continue.

The underlying fund's custodian, or a securities depository acting for it,
generally acts as escrow agent as to the securities on which the fund has
written puts or calls, or as to other securities acceptable for such escrow so
that no margin deposit is required of the fund. Until the underlying securities
are released from escrow, they cannot be sold by the fund.

In the event of a shortage of the underlying securities deliverable on
exercise of an option, the Options Clearing Corporation has the authority to
permit other, generally comparable securities to be delivered in fulfillment of
option exercise obligations. If the Options Clearing Corporation exercises its
discretionary authority to allow such other securities to be delivered, it may
also adjust the exercise prices of the affected options by setting different
prices at which otherwise ineligible securities may be delivered. As an
alternative to permitting such substitute deliveries, the Options Clearing
Corporation may impose special exercise settlement procedures.

FUTURES CONTRACTS. An underlying fund may enter into futures contracts for the
purchase or sale of debt securities and stock indexes. A futures contract is an
agreement between two parties to buy and sell a security or an index for a set
price on a future date. Futures contracts are traded on designated "contract
markets" which, through their clearing corporations, guarantee performance of
the contracts.

Generally, if market interest rates increase, the value of outstanding debt
securities declines (and vice versa). Entering into a futures contract for the
sale of securities has an effect similar to the actual sale of securities,
although sale of the futures contract might be accomplished more easily and
quickly. For example, if a fund holds long-term U.S. Government securities and
it anticipates a rise in long-term interest rates, it could, in lieu of
disposing of its portfolio securities, enter into futures contracts for the sale
of similar long-term securities. If rates increased and the value of the fund's
portfolio securities declined, the value of the fund's futures contracts would
increase, thereby protecting the fund by preventing the net asset value from
declining as much as it otherwise would have. Similarly, entering into futures
contracts for the purchase of securities has an effect similar to the actual
purchase of the underlying securities, but permits the continued holding of
securities other than the underlying securities. For example, if the fund
expects long-term interest rates to decline, it might enter into futures
contracts for the purchase of long-term securities so that it could gain rapid
market exposure that may offset anticipated increases in the cost of securities
it intends to purchase while continuing to hold higher- yield short-term
securities or waiting for the long-term market to stabilize.

A stock index futures contract may be used to hedge an underlying fund's
portfolio with regard to market risk as distinguished from risk relating to a
specific security. A stock index futures contract does not require the physical
delivery of securities, but merely provides for profits and losses resulting
from changes in the market value of the contract to be credited or debited at
the close of each trading day to the respective accounts of the parties to the
contract. On the contract's expiration date, a final cash settlement occurs.
Changes in the market value of a particular stock index futures contract reflect
changes in the specified index of equity securities on which the future is
based.

There are several risks in connection with the use of futures contracts. In
the event of an imperfect correlation between the futures contract and the
portfolio position which is intended to be protected, the desired protection may
not be obtained and the fund may be exposed to risk of loss. Further,
unanticipated changes in interest rates or stock price movements may result in a
poorer overall performance for the fund than if it had not entered into futures
contracts on debt securities or stock indexes.

In addition, the market prices of futures contracts may be affected by
certain factors. First, all participants in the futures market are subject to
margin deposit and maintenance requirements. Rather than meeting additional
margin deposit requirements, investors may close futures contracts through
offsetting transactions which could distort the normal relationship between the
securities and futures markets. Second, from the point of view of speculators,
the deposit requirements in the futures market are less onerous than margin
requirements in the securities market. Therefore, increased participation by
speculators in the futures market may also cause temporary price distortions.

Finally, positions in futures contracts may be closed out only on an
exchange or board of trade which provides a secondary market for such futures.
There is no assurance that a liquid secondary market on an exchange or board of
trade will exist for any particular contract or at any particular time.

OPTIONS ON FUTURES CONTRACTS. A fund also may purchase and sell listed put and
call options on futures contracts. An option on a futures contract gives the
purchaser the right, in return for the premium paid, to assume a position in a
futures contract (a long position if the option is a call and a short position
if the option is a put), at a specified exercise price at any time during the
option period. When an option on a futures contract is exercised, delivery of
the futures position is accompanied by cash representing the difference between
the current market price of the futures contract and the exercise price of the
option. The fund may purchase put options on futures contracts in lieu of, and
for the same purpose as, a sale of a futures contract. It also may purchase such
put options in order to hedge a long position in the underlying futures contract
in the same manner as it purchases "protective puts" on securities.

As with options on securities, the holder of an option may terminate his
position by selling an option of the same series. There is no guarantee that
such closing transactions can be effected. The fund is required to deposit
initial margin and maintenance margin with respect to put and call options on
futures contracts written by it pursuant to brokers' requirements similar to
those applicable to futures contracts described above and, in addition, net
option premiums received will be included as initial margin deposits.

In addition to the risks which apply to all options transactions, there are
several special risks relating to options on futures contracts. The ability to
establish and close out positions on such options will be subject to the
development and maintenance of a liquid secondary market. It is not certain that
this market will develop. Compared to the use of futures contracts, the purchase
of options on futures contracts involves less potential risk to the fund because
the maximum amount at risk is the premium paid for the options (plus transaction
costs). However, there may be circumstances when the use of an option on a
futures contract would result in a loss to the fund when the use of futures
contract would not, such as when there is no movement in the prices of the
underlying securities. Writing an option on a futures contract involves risks
similar to those arising in the sale of futures contracts, as described above.

HEDGING. An underlying fund may employ many of the investment techniques
described in this Appendix not only for investment purposes which may be
considered speculative, but also for hedging purposes. For example, an
underlying fund may purchase or sell put and call options on common stocks to
hedge against movements in individual common stock prices, or purchase and sell
stock index futures and related options to hedge against marketwide movements in
common stock prices. Although such hedging techniques generally tend to minimize
the risk of loss that is hedged against, they also may limit commensurately the
potential gain that might have resulted had the hedging transaction not
occurred. Also, the desired protection generally resulting from hedging
transactions may not always be achieved.

INVESTMENT POLICIES AND RESTRICTIONS
The Funds have adopted certain fundamental investment policies (i.e.,
policies which may not be changed as to a Fund without the vote of a majority of
that Fund's outstanding shares, as defined under "Other Information -- Voting")
as well as certain investment policies which are not fundamental and therefore
may be changed by the Board of Trustees without shareholder approval. These
policies reflect self-imposed standards or the requirements of state or Federal
law.

The Trust may, in the future, seek to achieve each Fund's investment
objective by investing all of the Fund's assets in a no-load, diversified,
open-end management investment company having substantially the same investment
objective as the Fund. Each Fund's investment policies permit such an
investment. Shareholders will receive 30 days prior written notice with respect
to any such investment.

Under each Fund's fundamental investment policies, no Fund may invest more
than 25% of its total assets in the securities of underlying funds which
themselves concentrate (i.e., invest more than 25% of their assets) in any one
industry. Nevertheless, through its investment in underlying funds, a Fund
indirectly may invest more than 25% of its assets in one industry. The Fund also
may not borrow money, except that a Fund may, as a temporary measure for
extraordinary or emergency purposes, borrow from a bank in an amount not in
excess of 5% of the Fund's total assets, or pledge or hypothecate its assets,
except that the Fund may pledge not more than 5% of its total assets to secure
such borrowings. A Fund will not make additional investments at any time during
which it has outstanding borrowings.

Under each Fund's policies which are not fundamental, no Fund may (i) invest
more than 25% of its assets in the shares of any one open-end investment
company; (ii) purchase or otherwise acquire the securities of any open-end
investment company (except in connection with a merger, consolidation,
acquisition of substantially all of the assets or reorganization of another
investment company) if, as a result, a Fund and all of its affiliates including
the other Funds would own more than 3% of the total outstanding stock of that
company, or (iii) purchase a security which is not readily marketable if, as a
result, more than 10% of that Fund's assets would consist of such securities.
For this purpose, securities which are not readily marketable include repurchase
agreements having more than seven days to maturity (see "Investments of and
Investment Techniques Employed by Mutual Funds in Which the Funds May Invest")
and shares of an open-end investment company owned by the Fund in an amount
exceeding 1% of the issuer's total outstanding securities. See "Risks and Other
Considerations".

In addition, no Fund will invest more than 5% of its total assets in the
securities of an underlying fund which itself invests more than 5% of its total
assets in (i) the securities of any one issuer (excluding U.S. Government
securities), (ii) securities of issuers which have been in operation for less
than three years and equity securities of issuers which are not readily
marketable or (iii) puts, calls, straddles, spreads, and combinations thereof,
and futures contracts.

Each Fund may invest up to 5% of its net assets in repurchase agreements
with banks and broker-dealers. This and other investment policies and
restrictions are discussed in the SAI under the heading "Investment Policies".

The underlying funds in which a Fund invests may, but need not, have the
same investment policies as the Fund. For example, although Aggressive Growth
Fund will not borrow money for investment purposes, it may invest up to 25% of
its total assets in an underlying fund which borrows money for investment
purposes (i.e., engages in leveraging). The investments which may be made by
underlying funds in which the Funds invest and the risks associated with those
investments are described under "Investment Objectives," "Investment Policies
and Restrictions" and "Investments of and Investment Techniques Employed by
Mutual Funds in Which the Funds May Invest".

RISKS AND OTHER CONSIDERATIONS
Any investment in a mutual fund involves risk and, although the Funds
invest in a number of underlying funds, this practice does not eliminate
investment risk. Moreover, investing through the Funds in an underlying
portfolio of mutual funds involves certain additional expenses and certain tax
results which would not be present in a direct investment in the underlying
funds. See "Expenses" and "Dividends, Distributions and Taxes".

A Fund, together with the other Funds and any "affiliated persons" (as
defined in the 1940 Act) may purchase only up to 3% of the total outstanding
securities of any underlying fund. For this purpose, shares of underlying funds
held by private discretionary investment advisory accounts managed by the
Adviser will be aggregated with those held by the Funds. Accordingly, when
affiliated persons and other accounts managed by the Adviser hold shares of any
of the underlying funds, each Fund's ability to invest fully in shares of those
funds is restricted, and the Adviser must then, in some instances, select
alternative investments that would not have been its first preference.

The 1940 Act also provides that an underlying fund whose shares are
purchased by a Fund will be obligated to redeem shares held by the Fund only in
an amount up to 1% of the underlying fund's outstanding securities during any
period of less than 30 days. Shares held by a Fund in excess of 1% of an
underlying fund's outstanding securities therefore, will be considered not
readily marketable securities which together with other such securities may not
exceed 10% of that Fund's assets. See "Investment Policies and Restrictions".
These limitations are not fundamental investment policies and may be changed by
the Board of Trustees without shareholder approval.

Under certain circumstances an underlying fund may determine to make payment
of a redemption by a Fund wholly or partly by a distribution in kind of
securities from its portfolio, in lieu of cash, in conformity with the rules of
the SEC. In such cases, the Funds may hold securities distributed by an
underlying fund until the Adviser determines that it is appropriate to dispose
of such securities.

Investment decisions by the investment advisers of the underlying funds are
made independently of the Trust and its Adviser. Therefore, the investment
adviser of one underlying fund may be purchasing shares of the same issuer whose
shares are being sold by the investment adviser of another such fund. The result
of this would be an indirect expense to a Fund without accomplishing any
investment purpose.

Each Fund will purchase shares of both load and no-load underlying funds.
However, the Funds will not invest in shares of underlying funds which are sold
with a contingent deferred sales charge.

Under the 1940 Act a mutual fund must sell its shares at the price
(including sales load, if any) described in its prospectus, and current rules
under the 1940 Act do not permit negotiation of sales charges. Therefore, a Fund
currently is not able to negotiate the level of the sales charges at which it
will purchase shares of load funds which may be as great as 8.5% of the public
offering price (or 9.29% of the net amount invested). Nevertheless, when
appropriate, a Fund will purchase such shares pursuant to (i) letters of intent,
permitting it to obtain reduced sales charges by aggregating its intended
purchases over time (generally 13 months from the initial purchase under the
letter); (ii) rights of accumulation, permitting it to obtain reduced sales
charges as it purchases additional shares of an underlying fund; and (iii) the
right to obtain reduced sales charges by aggregating its purchases of several
funds within a family of mutual funds. Based upon these privileges, it is
expected that, in the majority of cases, the sales charges paid by a Fund on a
load fund purchase will not exceed 1% of the public offering price (1.01% of the
net amount invested).

Under certain circumstances, a sales charge incurred by a Fund in acquiring
shares of an underlying fund may not be taken into account in determining the
gain or loss for federal income tax purposes on the disposition of the shares
acquired. If shares are disposed of within 90 days from the date they were
purchased and if shares of a new underlying fund are subsequently acquired
without imposition of a sales charge or imposition of a reduced sales charge
pursuant to a right granted to the Fund to acquire shares without payment of a
sales charge or with the payment of a reduced charge, then the sales charge paid
upon the purchase of the initial shares will be treated as paid in connection
with the acquisition of the new underlying fund's shares rather than the initial
shares.

Sales charges generally consist of two parts, the dealer reallowance (which
typically comprises at least 80% of the amount of the charge) and the
underwriter's retention. Signature generally will be designated as the dealer
entitled to receive the dealer reallowance portion of the sales charge on
purchases of load fund shares by the Funds. However, Signature will not retain
any dealer reallowance in excess of 1% of the public offering price on any
transaction nor will it be designated as the dealer entitled to receive the
dealer reallowance portion of the sales charge where such reallowance would
exceed 1% of the public offering price. See "Management of the Trust -- The
Distributors" and "Management of the Trust -- Portfolio Transactions".

EXPENSES
An investor in the Funds should recognize that he may invest directly in
mutual funds and that, by investing in mutual funds indirectly through the
Funds, he will bear not only his proportionate share of the expenses of the
Funds (including operating costs and investment advisory and administrative
fees) but also, indirectly, similar expenses of the underlying funds. An
investor in the Funds through a managed account program who pays an advisory fee
for asset allocation should recognize that the combined expenses of the program
and of the Funds (including their indirect expenses) may involve greater fees
and expenses than present in other types of investments without the benefit of
professional asset allocation recommendations. In addition, a Fund shareholder
will bear his proportionate share of expenses related to the distribution of the
Fund's Shares, see "Management of the Trust -- The Distributors", and also may
indirectly bear expenses paid by an underlying fund related to the distribution
of its shares. A Fund shareholder also will bear his proportionate share of any
sales charges incurred by the Fund related to the purchase of shares of the
underlying funds. Finally, an investor should recognize that, as a result of the
Funds' policies of investing in other mutual funds, he may receive taxable
capital gains distributions to a greater extent than would be the case if he
invested directly in the underlying funds. See "Dividends, Distributions and
Taxes". For the fiscal year ending September 30, 1995 the Funds' total expenses,
after waivers and expense reimbursements, as a percentage of average net assets
were as follows: Aggressive Growth Fund 1.65%, Growth Fund 1.71%, Growth &
Income Fund 1.59%, Bond Fund 1.45% and Managed Total Return Fund 2.09%.

MANAGEMENT OF FUNDMANAGER FUNDS
The business and affairs of the Trust are managed under the direction of the
Board of Trustees. Additional information about the Trustees, as well as the
Trust's executive officers, may be found in the SAI under the heading
"Management Trustees and Officers".

THE ADVISER
Freedom Capital Management has its principal office at One Beacon Street,
Boston, Massachusetts. The Adviser advises the Trust through the M.D. Hirsch
Division of Freedom Capital Management. Michael D. Hirsch, Chairman of the M.D.
Hirsch Division of Freedom Capital Management, has provided discretionary
investment advisory services relating to investments in mutual funds to
individual accounts since 1975.

Freedom Capital Management is an indirect, wholly-owned subsidiary of John
Hancock Mutual Life Insurance Company ("John Hancock"). John Hancock is a major
mutual life insurance company with subsidiaries which offer property and
casualty insurance and another subsidiary which manages investment companies.
John Hancock's head offices are at John Hancock Place, Boston, Massachusetts.

Pursuant to an Investment Advisory Contract, the Adviser is responsible for
the investment management of each Fund's assets, including the responsibility
for making investment decisions and placing orders for the purchase and sale of
the Funds' investments directly with the issuers or with brokers or dealers,
selected by it in its discretion, including Signature. See "Portfolio
Transactions". The Adviser also furnishes to the Board of Trustees, which has
overall responsibility for the business and affairs of the Trust, periodic
reports on the investment performance of the Trust. For these services, the
Adviser receives from each Fund a fee, payable monthly, at the annual rate of
0.50% of that Fund's average daily net assets up to $500 million and 0.40% of
its average daily net assets in excess of $500 million. For the fiscal year
ended September 30, 1995 the Funds paid the Adviser the following fees as a
percentage of net assets: Aggressive Growth Fund 0.50%, Growth Fund 0.50%,
Growth & Income Fund 0.50%, Bond Fund 0.50% and Managed Total Return Fund 0.50%.

Michael Hirsch and Michelle P. Graham-Lyons are the Portfolio Managers of
the Funds and are responsible for the day to day management of the Funds.
Currently, Mr. Hirsch is Chairman of the M.D. Hirsch Division of Freedom
Capital Management. Prior to February 21, 1995, Mr. Hirsch was the Vice
Chairman and Managing Director of the M.D. Hirsch Division of Republic Asset
Management. Mr. Hirsch served as President of Hirsch from February, 1991 until
June, 1993 and Chief Investment Officer of Republic from 1981 until February,
1991. Mr. Hirsch pioneered the concept of investing his clients' assets in a
portfolio of mutual funds in 1975. Mr. Hirsch is now a noted authority on
mutual funds and has authored two books, "Multifund Investing" in 1987 and
"The Mutual Fund Wealth Builder" in 1991. Michelle P. Graham-Lyons manages the
mutual fund research functions of the Adviser. Ms. Graham-Lyons is a Senior
Vice President of the M.D. Hirsch Division of Freedom Capital Management.
Prior to February 21, 1995, Ms. Graham-Lyons was First Vice President of the
M.D. Hirsch Division of Republic Asset Management. Ms. Graham-Lyons held a
similar position at Hirsch since February, 1991, and was, prior to that, a
Senior Investment Analyst for Republic.

THE ADMINISTRATOR
The Board of Trustees of the Trust has approved an Administrative Services
Contract (the "Administration Contract") between the Trust and Signature
pursuant to which Signature will serve as Administrator of the Trust and of each
of the Funds. In this capacity, Signature provides certain management and
administrative services to the Trust.

For its services as Administrator, Signature receives from each Fund a fee
computed and paid monthly at an annual rate equal to 0.25% of the first $50
million of that Fund's average daily net assets attributable to the Class, 0.20%
of the next $50 million of such assets, and 0.15% of such assets in excess of
$100 million.

THE DISTRIBUTORS
The Board of Trustees of the Trust has approved a Distribution Contract (the
"Distribution Contract") between the Trust and each of Signature, Tucker Anthony
and Sutro pursuant to which each will serve as a Distributor of the Trust and of
the Shares of each of the Funds. Signature may receive dealer reallowances (up
to a maximum of 1% of the public offering price) and/or distribution payments on
purchases by the Funds of mutual funds which are sold with a sales load and/or
which have a distribution plan.

Pursuant to a Distribution Plan adopted by the Funds with respect to the
Class (the "Plan"), each Fund will reimburse the Distributors monthly (subject
to a limit of 0.50% per annum of the Fund's average daily net assets
attributable to the Class) for costs and expenses incurred by the Distributors
in connection with the distribution of Fund Shares and for the provision of
certain shareholder services with respect to Fund Shares. Payments to the
Distributors will be for various types of activities, including: (i) payments to
broker-dealers who advise shareholders regarding the purchase, sale, or
retention of Fund Shares and who provide shareholders with personal services and
account maintenance services ("service fee"), (ii) payments to employees of the
Distributors, and (iii) printing and advertising expenses. Such payments by the
Distributors to broker-dealers may be in amounts up to 0.50% per annum of each
Fund's average daily net assets attributable to the Class, provided, however,
that the service fee will be limited to 0.25% of each Fund's average daily net
assets attributable to the Class. The fees and reimbursements paid by the Funds
to the Distributors for distribution services and to Signature for
administration and shareholder servicing services therefore may equal up to
0.75% of each Fund's average daily net assets attributable to the Class. Salary
expense of salesmen who are responsible for marketing Shares of the Funds and
related travel expenses may be allocated to various Funds on the basis of
average net assets attributable to the Class.

Any payment by a Distributor or reimbursement of a Distributor by the Fund
made pursuant to the Plan is contingent upon the Board of Trustees' approval.
Each Fund will not be liable for distribution and shareholder servicing
expenditures in any given year in excess of the maximum amount (0.50% per annum
of each Fund's average daily net assets attributable to the Class) payable under
the Plan in that year. The Plan also permits the Distributors to receive and
retain brokerage commissions with respect to portfolio transactions for
underlying funds, including funds which have a policy of considering sales of
their shares in selecting broker-dealers for the execution of their portfolio
transactions. For the fiscal year ended September 30, 1995 the Funds paid
Signature, as sole Distributor and Administrator the following fees as a
percentage of average net assets: Aggressive Growth Fund 0.72%, Growth Fund
0.70%, Growth & Income Fund 0.70%, Bond Fund 0.69% and Managed Total Return Fund
0.74%.

The Distributors may provide promotional incentives to investment executives
who support the sale of shares of the Funds. In some instances, these incentives
may be offered only to certain investment executives which provide services in
connection with the sale or expected sale of significant amounts of shares.

Signature is a wholly-owned subsidiary of Signature Financial Group, Inc.
("SFG"). SFG and its affiliates currently provide administration and
distribution services for other registered investment companies. The principal
business address of SFG and Signature is 6 St. James Avenue, Boston,
Massachusetts 02116. Tucker Anthony, a brokerage firm which is a member of the
New York Stock Exchange, is an indirect subsidiary of John Hancock, continuing
an investment banking and brokerage business established in 1892. The principal
business address of Tucker Anthony is One Beacon Street, Boston, Massachusetts
02108. Sutro is an indirect wholly-owned subsidiary of John Hancock. The
principal business address of Sutro is 201 California Street, San Francisco,
California 94111.

CUSTODIAN AND TRANSFER AGENT
The Board of Trustees of the Trust has also approved a Custodian Agreement
and a Transfer Agency and Service Agreement (the "IBT Contracts") between the
Trust and Investors Bank & Trust Company ("IBT") pursuant to which IBT provides
custodial, fund accounting, transfer agency, dividend disbursing and shareholder
servicing services to the Trust and each of the Funds. The principal business
address of IBT is 89 South Street, Boston, Massachusetts 02111.

SERVICE ORGANIZATIONS
The Trust also contracts with various banks, trust companies, broker-dealers
(other than the Distributors) or other financial organizations (collectively,
"Service Organizations") to provide administrative services for the Class such
as maintaining shareholder accounts and records. Each Fund pays fees to Service
Organizations (which vary depending upon the services provided) in amounts up to
an annual rate of 0.25% of the daily net asset value of a Fund's Shares owned by
shareholders with whom the Service Organization has a servicing relationship.

Some Service Organizations may impose additional or different conditions on
their clients such as requiring their clients to invest more than the minimum
initial or subsequent investments specified by the Trust or charging a direct
fee for servicing. If imposed, these fees would be in addition to any amounts
which might be paid to the Service Organization by the Trust. Each Service
Organization has agreed to transmit to its clients a schedule of any such fees.
Shareholders using Service Organizations are urged to consult them regarding any
such fees or conditions.

OTHER EXPENSES
The Trust bears all costs of its operations other than expenses specifically
assumed by the Administrator, Distributors or the Adviser. See "Management" in
the SAI. Expenses directly attributable to a Fund or Class are charged to that
Fund or Class; other expenses are allocated proportionately among the Funds or
Class, as the case may be, in relation to the net assets of each Fund or Class.
The Trust has contracted with IBT to provide fund accounting services at a rate
not intended to exceed the cost of such services.

PORTFOLIO TRANSACTIONS
Pursuant to the Investment Advisory Contract, the Adviser places orders for
the purchase and sale of portfolio investments for a Fund's accounts with
brokers or dealers, selected by it in its discretion, including the
Distributors. With respect to purchases of certain money market instruments,
purchase orders are placed directly with the issuer or its agent. With respect
to purchases of load fund shares, the Adviser directs substantially all of the
Funds' orders to Signature, which may, in its discretion, direct the order to
other broker-dealers in consideration of sales of that fund's shares, except
where the direction to another broker-dealer would increase the dealer
reallowance paid by a fund above 1% of the public offering price. Where
Signature acts as the dealer with respect to purchases of load fund shares, it
retains dealer reallowances on such purchases up to a maximum of 1% of the
public offering price of the shares. A Distributor may not be designated as the
dealer on any sale where such reallowance would exceed 1% of the public offering
price.

A Distributor may also assist in the execution of Fund portfolio
transactions to purchase underlying fund shares for which it may receive
distribution payments from the underlying funds or their underwriters in
accordance with the distribution plans of those funds. The Distributor will
refund to the underlying fund any payment which alone or when added to other
payments received from that fund is in excess of 1% of the public offering price
of the fund at the time the payment is made. In providing execution assistance,
the Distributor receives orders from the Adviser, places them with the
underlying fund's distributor, transfer agent or other person, as appropriate,
confirms the trade, price and number of shares purchased, assures prompt payment
by the Fund and proper completion of the order.

Each Fund is actively managed and has no restrictions upon portfolio
turnover, although its annual turnover rate is not expected to exceed 100%. A
100% annual portfolio turnover rate would be achieved if each security in each
Fund's portfolio (other than securities with less than one year remaining to
maturity) were replaced once during the year. To the extent each Fund is
purchasing shares of load funds, a higher turnover rate would result in
correspondingly higher sales loads paid by that Fund. Trading also may result in
realization of net short-term capital gains which would not otherwise be
realized, and shareholders are taxed on such gains when distributed from that
Fund at ordinary income tax rates. See "Dividends, Distributions and Taxes".
There is no limit on the portfolio turnover rates of the underlying funds in
which the Fund may invest.

DETERMINATION OF NET ASSET VALUE
The net asset value per share of each Fund is calculated at 4:00 p.m.
(Eastern Time), Monday through Friday, on each day that the New York Stock
Exchange (the "NYSE") is open for trading (which excludes the following national
business holidays: New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day). Net asset
value per Share is calculated by dividing the aggregate value of a Fund's assets
allocable to the Class less all liabilities by the number of that Fund's
outstanding Shares.

The assets of each Fund consist primarily of the underlying funds, which are
valued at their respective net asset values under the 1940 Act. The underlying
funds value securities in their portfolios for which market quotations are
readily available at their current market value (generally the last reported
sale price) and all other securities and assets at fair value pursuant to
methods established in good faith by the board of directors of the underlying
fund. Money market funds with portfolio securities that mature in one year or
less may use the amortized cost or penny-rounding methods to value their
securities. Securities having 60 days or less remaining to maturity generally
are valued at their amortized cost which approximates market value.

Other assets of each Fund are valued at their current market value if market
quotations are readily available and, if market quotations are not available,
they are valued at fair value pursuant to methods established in good faith by
the Board of Trustees. Debt instruments having 60 days or less remaining to
maturity are valued at their amortized cost.

PURCHASE OF SHARES
Shares of the Funds are offered by the Distributors as an investment vehicle
for individuals, institutions, corporations and fiduciaries. Shares of the Funds
may also be offered to participants in certain managed account programs who
receive, for a fee at a maximum annual rate based upon a percentage of assets
invested, certain services, including asset allocation recommendations with
respect to the Funds based on an evaluation of their investment objectives and
risk tolerances. Each Fund pays expenses related to the distribution of its
Shares. See "Management of the Trust -- The Distributors". Each Fund may invest
in underlying funds which are sold with a sales charge. Prospectuses, sales
material and applications can be obtained from the Distributors.

The minimum initial investment is $1,000, except that the minimum initial
investment for an Individual Retirement Account is $250. The minimum subsequent
investment is $100. There are no minimum investment requirements for FundManager
prototype defined contribution plans. The minimum initial investment is waived
for purchases by Trustees, officers and employees of the Trust, the Adviser or a
Distributor, including their immediate families and certain accounts. Each Fund
also reserves the right to vary the initial and subsequent investment minimums.
All purchase payments are invested in full and fractional shares. The Trust and
each Distributor are authorized to reject any purchase order.

For each shareholder of record, the Trust, as the shareholder's agent,
establishes an open account to which all shares purchased are credited together
with any dividends and capital gains distributions which are paid in additional
shares. See "Dividends, Distributions and Taxes".

PURCHASES BY CLIENTS OF THE DISTRIBUTORS OR AUTHORIZED SECURITIES DEALERS
If you have a brokerage account or Program account with a Distributor or an
authorized securities dealer, you may purchase any Fund's Shares through your
investment executive. Your investment executive has the responsibility of
submitting your purchase order to IBT on such day in order to obtain that day's
applicable purchase price. Purchase orders received by IBT after 4:00 p.m., New
York time, are priced according to the net asset value per Share of the Fund
next determined on the following business day. Payment for purchase orders must
be made to such Distributor or dealer within four business days of the purchase
order.

Your Distributor or dealer will receive statements and dividends directly
from the Funds and will in turn provide you with account statements reflecting
the Funds' purchases, redemptions and dividend payments. If you wish additional
information concerning your investment, please call your investment executive.

CERTAIN SERVICE ORGANIZATIONS AND OTHER INVESTORS -- PURCHASE BY CHECK OR WIRE

PURCHASE BY MAIL. If you do not have a brokerage account with a Distributor, you
may purchase Shares of the Funds directly by completing the Purchase Application
included in this Prospectus and mailing it, together with a check written on a
U.S. bank in a minimum amount of $1,000 payable to [Name of Fund], to Investors
Bank and Trust Company, P.O. Box 1537 MFD23, Boston, MA 02205-1537. Investors
wishing to purchase Shares through their account at a Service Organization
should contact the organization directly for appropriate instructions.

Subsequent purchases of $100 or more may also be made through IBT by
forwarding payment, together with the detachable stub from your account
statement or a letter containing your account number.

PURCHASE BY WIRE. Service Organizations (on behalf of customers) may transmit
purchase payments by wire directly to the Funds' Custodian at the following
address:

Investors Bank and Trust Company
Boston, Massachusetts
Attn: Transfer Agent
ABA# 011001438
Acct. #796543460
For further credit to FundManager Trust -- Financial Adviser Class (name of
Fund, account name, account #)

The wire order must specify the name of the Fund in which the investment is
being made, the account name, number, confirmation number, address, social
security or tax identification number (where applicable), amount to be wired,
name of the wiring bank and name and telephone number of the person to be
contacted in connection with the order. Where the initial purchase is by wire an
account number will be assigned and a Purchase Application must be completed and
mailed to the Trust.

Investors making purchases through a Service Organization should be aware
that it is the responsibility of the Service Organization to transmit orders for
purchases of Shares by its customers to the Transfer Agent and to deliver
required funds on a timely basis, in accordance with the procedures stated
above.

AUTOMATIC INVESTMENT PLAN
The Trust offers a plan for regularly investing specified dollar amounts
($25.00 minimum in monthly, quarterly, semiannual or annual intervals) in Shares
of the Funds. If an Automatic Investment Plan is selected, subsequent
investments will be automatic and will continue until such time as the Fund and
the investor's bank are notified to discontinue further investments. Due to the
varying procedures to prepare, process and forward the bank withdrawal
information to a Fund, there may be a delay between the time of the bank
withdrawal and the time the money reaches the Fund. The investment in the Fund
will be made at the public offering price per Share determined on the day that
both the check and bank withdrawal data are received in required form by the
Distributor. Further information about the plan may be obtained from IBT at the
telephone number listed on the back cover of the Prospectus.

RETIREMENT PLANS
The Trust offers Shares of each Fund in connection with tax-deferred
retirement plans. Application forms and further information about these plans,
including applicable fees, are available from the Trust or a Distributor upon
request. The Federal income tax treatment of contributions to retirement plans,
such as those listed, has been substantially affected by recently enacted
Federal tax legislation. Before investing in Shares of a Fund through one or
more such plans, an investor should consult a tax adviser.

INDIVIDUAL RETIREMENT ACCOUNTS ("IRAS")
Shares of the Funds may be used as a funding medium for an IRA. An Internal
Revenue Service-approved IRA plan is available from each Distributor naming IBT
as custodian. The minimum initial investment for an IRA is $250; the minimum
subsequent investment is $100. IRAs are available to individuals who receive
compensation or earned income and their spouses whether or not they are active
participants in a tax-qualified or Government-approved retirement plan. An IRA
contribution by an individual who participates, or whose spouse participates, in
a tax-qualified or Government-approved retirement plan may not be deductible
depending upon the individual's income. Individuals also may establish an IRA to
receive a "rollover" contribution of distributions from another IRA or a
qualified plan. Tax advice should be obtained before planning a rollover.

DEFINED CONTRIBUTION PLAN
Investors who are self-employed may purchase Shares of the Funds for
retirement plans for self-employed persons which are known as Defined
Contribution Plans (formerly Keogh or H.R. 10 Plans). The Class offers a
prototype Defined Contribution Plan for Money Purchase or Profit Sharing Plans,
401(k) Plans, Simplified Employee Pension Plans (SEPs) and SAR (SEPs).

Section 401(k) Plan
Shares of the Funds may be used as a vehicle for a cash or deferred
arrangement designed to qualify under Section 401(k) of the Internal Revenue
Code of 1986, as amended (the "Code").

Section 403(b) Plan
Shares of the Funds may be used as vehicle for certain deferred compensation
plans designed to qualify under Section 403(b) of the Code for use by employees
of certain educational, non-profit hospital and charitable organizations.

Section 457 Plan
Shares of the Funds may be used as a vehicle for certain deferred
compensation plans provided for by Section 457 of the Code with respect to
service for state governments, local governments, rural electric cooperatives
and political subdivisions, agencies, instrumentalities and certain affiliates
of such entities which enjoy special treatment.

EXCHANGE PRIVILEGE
By contacting their brokerage account executive, service organization or
transfer agent, shareholders may exchange some or all of their Fund Shares for
Shares of one or more other Funds or the Freedom Cash Management Fund at net
asset value. An exchange may result in a change in the number of Shares held,
but not in the value of such Shares, immediately after the exchange. Each
exchange involves the redemption of the Fund Shares to be exchanged and the
purchase of the Shares of the other Fund. As a result, any gain or loss on the
redemption of the Fund Shares exchanged is reportable on the shareholder's
Federal income tax return. The exchange privilege (or any aspect of it) may be
changed or discontinued upon 60 days' written notice to shareholders and is
available only to shareholders in states where such exchanges may be legally
made. A shareholder considering an exchange should obtain and read the
prospectus of the Funds and consider the differences in investment objectives
and policies before making any exchange.

For further information as to how to purchase or exchange shares of the
Funds, an investor should contact their Service Organization or Transfer Agent.

REDEMPTION OF SHARES
Upon receipt by the Trust of a redemption request in proper form, Shares of
a Fund will be redeemed at the next determined net asset value. See
"Determination of Net Asset Value". For the shareholder's convenience, the Trust
has established several different direct redemption procedures.

REDEMPTION OF SHARES PURCHASED THROUGH A DISTRIBUTOR OR AUTHORIZED SECURITIES
DEALER
In order to redeem your Shares purchased through a brokerage account, you
should advise your investment executive, by telephone or mail, to execute the
redemption. Redemption requests received by 4:00 p.m., New York time, are
effective that day. Your investment executive has the responsibility of
submitting your redemption request to IBT on such day in order to obtain that
day's applicable redemption price. There is no redemption charge. Redemption
proceeds will be held in your brokerage account unless you give instructions to
your investment executive to remit the proceeds to you.

DIRECT REDEMPTION
Direct redemptions are not available for Shares purchased through a
Distributor's brokerage account. Any such redemption requests received will be
forwarded to your investment executive who will process them as described above.

Redemptions may be made by letter to the Trust specifying the dollar amount
or number of Shares to be redeemed, account number and the applicable Fund. The
letter must be signed in exactly the same way the account is registered (if
there is more than one owner of the shares all must sign) and all signatures
must be guaranteed by an Eligible Guarantor Institution, which includes a
domestic bank, broker, dealer, credit union, national securities exchange,
registered securities association, clearing agency or savings association. The
Funds' transfer agent, however, may reject redemption instructions if the
guarantor is neither a member of nor a participant in a signature guarantee
program (currently known as "STAMP", "SEMP", or "NYSE MSP"). Corporations,
partnerships, trusts or other legal entities may be required to submit
additional documentation.

An investor may redeem Shares in any amount by written request mailed to the
Trust at the following address:

FundManager Trust
c/o Investors Bank & Trust Company
P.O. Box 1537 MFD23
Boston, Massachusetts 02205-1537

If Shares to be redeemed are held in certificate form, the certificates must
be enclosed with the letter. Do not sign the certificates and for protection use
registered mail.

Checks for redemption proceeds normally will be mailed within four days, but
will not be mailed until all checks in payment for the purchase of the shares to
be redeemed have been cleared, which may take up to 15 days. Unless other
instructions are given in proper form, a check for the proceeds of a redemption
will be sent to the shareholder's address of record.

REDEMPTION BY WIRE OR TELEPHONE
An investor may redeem Fund Shares by wire or by telephone if they have
checked the appropriate box on the Purchase Application or has filed a Telephone
Authorization Form with the Funds. These redemptions may be paid by the Funds by
wire or by check. The Trust reserves the right to refuse telephone wire
redemptions and may limit the amount involved or the number of telephone
redemptions. The telephone redemption procedure may be modified or ended at any
time by the Trust. Instructions for wire redemptions are set forth in the
Purchase Application. The Trust employs reasonable procedures to confirm that
instructions communicated by telephone are genuine. For instance, the following
information must be verified by the shareholder or broker at the time a request
for a telephone redemption is effected: (i) shareholder's account number; (ii)
shareholder's social security number; and (iii) name and account number of
shareholder's designated securities dealer or bank. If the Trust fails to follow
these or other established procedures, it may be liable for any losses due to
unauthorized or fraudulent instructions.

A Service Organization may request a wire redemption provided a Wire
Authorization Form is on file with the Trust. There is no charge to the Service
Organization for wire redemptions. The proceeds of a wire redemption will be
sent to an account with a Service Organization designated on the appropriate
form. The Trust reserves the right to restrict or terminate wire redemption
privileges. Proceeds of wire redemptions generally will be transferred within
four days after receipt of the request.

The Trust may suspend the right of redemption during any period when (i)
trading on the NYSE is restricted or the NYSE is closed, other than customary
weekend and holiday closings, (ii) the SEC has by order permitted such
suspension or (iii) an emergency, as defined by rules of the SEC, exists making
disposal of portfolio investments or determination of the value of the net
assets of the Funds not reasonably practicable.

If the Board of Trustees should determine that it would be detrimental to
the best interests of the remaining shareholders of a Fund to make payment
wholly or partly in cash, that Fund may pay the redemption price in whole or in
part by a distribution in kind of readily marketable securities (mutual fund
shares or money market instruments) from the portfolio of that Fund, in lieu of
cash, in conformity with applicable rules of the SEC. The Trust will, however,
redeem shares solely in cash up to the lesser of $250,000 or 1% of its net
assets during any 90-day period for any one shareholder.

The proceeds of redemption may be more or less than the amount invested and,
therefore, a redemption may result in a gain or loss for Federal income tax
purposes.

Because the Funds incur fixed costs in maintaining shareholder accounts, the
Funds reserve the right to redeem your account if its total value falls below
$500 at the end of any month, unless the decrease is solely the result of a
reduction in net asset value per share. If a Fund elects to redeem your account,
it will notify you of its intention to do so and will provide you with an
opportunity to increase your account by investing a sufficient amount to bring
the account up to $500 or more within 30 days of the notice.

SYSTEMATIC WITHDRAWAL PLAN
Any shareholder who owns shares of a Fund with an aggregate value of $10,000
or more may establish a Systematic Withdrawal Plan under which they redeem at
net asset value the number of full and fractional shares which will produce the
monthly, quarterly, semi-annual or annual payments specified (minimum $50.00 per
payment). Depending on the amounts withdrawn, systematic withdrawals may deplete
the investor's principal. Investors contemplating participation in this Plan
should consult their tax advisers. No additional charge to the shareholder is
made for this service.

DIVIDENDS, DISTRIBUTIONS AND TAXES
Each Fund intends to continue to qualify as a regulated investment company
under Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"). In any year in which a Fund qualifies as a regulated investment company
and distributes substantially all of its investment company taxable income
(which includes, among other items, the excess of net short-term capital gains
over net long-term capital losses) and its net capital gains (the excess of net
long-term capital gains over net short-term capital losses) the Fund will not be
subject to Federal income tax to the extent it distributes to shareholders such
income and capital gains in the manner required under the Code. Amounts not
distributed on a timely basis in accordance with a calendar year distribution
requirement are subject to a nondeductible 4% excise tax. To prevent imposition
of the excise tax each Fund must distribute for each calendar year an amount
equal to the sum of (i) at least 98% of its net ordinary income (excluding any
capital gains or losses) for the calendar year, (ii) at least 98% of the excess
of its capital gains over capital losses (adjusted for certain ordinary losses)
realized during the one-year period ending October 31 of such year, and (iii)
all ordinary income and capital gains for previous years that were not
distributed during such years. If a distribution is declared by the Fund in
December to shareholders of record as of a specified date in December and paid
by the Fund during January of the following calendar year, the distribution will
be treated as a dividend paid during the calendar year. Such distributions will
be taxable to shareholders in the calendar year in which the distributions are
declared, rather than the calendar year in which the distributions are received.
The Fund intends to distribute its income in accordance with this requirement to
prevent application of the excise tax.

Each year the Trust will notify shareholders of the tax status of dividends
and distributions.

Income received by a Fund from a mutual fund in that Fund's portfolio
(including dividends and distributions of short-term capital gains), as well as
interest received on money market instruments and net short-term capital gains
received by the Fund on the sale of mutual fund shares, will be distributed by
the Fund (after deductions for expenses) and will be taxable to shareholders as
ordinary income. Because the Funds are actively managed and can realize taxable
net short-term capital gains by selling shares of an underlying fund with
unrealized portfolio appreciation, investing in the Fund rather than directly in
the underlying funds may result in increased tax liability to the shareholder,
since the Fund must distribute its gain in accordance with the rules in the
Code. The Fund's ability to dispose of shares of mutual funds held less than
three months may be limited by requirements relating to a Fund's qualification
as a regulated investment company for federal income tax purposes.

Distributions of net capital gains (the excess of net long-term capital
gains over net short-term capital losses) received by a Fund from mutual funds,
as well as net long-term capital gains realized by a Fund from the purchase and
sale (or redemption) of mutual fund shares or other securities held (generally)
by a Fund for more than one year, will be distributed by the Fund and will be
taxable to shareholders as long-term capital gains (even if the shareholder has
held the Shares for less than one year). However, if a shareholder who has
received a capital gains distribution suffers a loss on the sale of his shares
not more than six months after purchase, the loss will be treated as a long-term
capital loss to the extent of the capital gains distribution received. The
long-term capital gains, including distributions of net capital gains are
currently subject to a maximum federal tax rate of 28% which is less than the
maximum rate imposed on other types of taxable income. Furthermore, capital
gains may be advantageous because, unlike ordinary income, they may be offset by
capital losses.

For purposes of determining the character of income received by the Fund
when an underlying fund distributes net capital gains to the Fund, the Fund will
treat the distribution as a long-term capital gain, even if it has held shares
of the mutual fund for less than one year. However, any loss incurred by the
Fund on the sale of that underlying fund's shares held for six months or less
will be treated as a long-term capital loss to the extent of the gain
distribution.

The tax treatment of distributions from a Fund is the same whether the
distributions are received in additional shares or in cash. Shareholders
receiving distributions in the form of additional Shares will have a cost basis
for Federal income tax purposes in each Share received equal to the net asset
value of a Share of the Fund on the reinvestment date.

A Fund may invest in underlying funds with capital loss carry-forwards. If
such an underlying fund realizes capital gains, it will be able to offset the
gains to the extent of its loss carry-forwards in determining the amount of
capital gains which must be distributed to its shareholders. To the extent that
gains are offset in this manner, the Fund will not realize gains on the related
Fund until such time as the underlying fund is sold.

Depending on the residence of the shareholder for tax purposes,
distributions also may be subject to state and local taxes, including
withholding taxes. Shareholders should consult their own tax advisers as to the
tax consequences of ownership of Shares of the Funds in their particular
circumstances.

The Funds generally will be required to withhold Federal income tax at a
rate of 31% ("backup withholding") from dividends paid to shareholders if (a)
the payee fails to furnish the Trust with and to certify the payee's correct
taxpayer identification number or social security number, (b) the Internal
Revenue Service (the "IRS") notifies the Trust that the payee has failed to
report properly certain interest and dividend income to the IRS and to respond
to notices to that effect or (c) the payee fails to certify that he is not
subject to backup withholding.

Aggressive Growth Fund will distribute investment company taxable income
annually; Growth Fund will distribute investment company taxable income
semi-annually; Growth & Income Fund and Managed Total Return will distribute
investment company taxable income quarterly; and Bond Fund will distribute its
investment company taxable income monthly. Each Fund will distribute any net
realized capital gains at least annually. All dividends and distributions will
be reinvested automatically at net asset value in additional Shares of the Fund
making the distribution, unless the shareholder has notified the Fund in writing
of his election to receive distributions in cash.

OTHER INFORMATION
CAPITALIZATION
The Trust was organized as a Delaware business trust on February 7, 1995 as
a successor, with respect to the Funds, to Republic Funds (formerly FundTrust) a
Massachusetts business trust (organized on April 22, 1987). Republic Funds
succeeded two previously existing Massachusetts business trusts, FundTrust
Tax-Free Trust (organized on July 30, 1986) and FundVest (organized on July 17,
1984 and since renamed Fund Source). The Trust currently consists of five
separately-managed portfolios each offering two classes of shares (except for
Managed Total Return, which only offers Financial Adviser Class) of beneficial
interest, the Financial Adviser Class and the No-Load Class. The Board of
Trustees may establish additional portfolios and divide shares in each portfolio
into additional classes in the future. The capitalization of the Trust consists
solely of an unlimited number of shares of beneficial interest with a par value
of $0.001 each. When issued, shares of the Funds are fully paid, non-assessable
and freely transferable.

VOTING
Shareholders have the right to vote in the election of Trustees and on any
and all matters on which by law or the provisions of the Master Trust Agreement
they may be entitled to vote. When matters are submitted for shareholder vote,
shareholders will have one vote for each full share held and proportionate,
fractional votes for fractional shares held. A separate vote of a Fund or Class
is required on any matter affecting that Fund or Class on which shareholders are
entitled to vote. Shareholders of a Fund or Class are not entitled to vote on
Trust matters that do not affect the Fund or Class and do not require a separate
vote of the Fund or Class. The Trust is not required to hold regular annual
meetings of its shareholders and does not intend to do so. See "Other
Information -- Voting Rights" in the SAI.

The Master Trust Agreement provides that the holders of not less than
three-fourths of the outstanding shares of the Trust may remove a person serving
as Trustee either by declaration in writing or at a meeting called for such
purpose. The Trustees are required to call a meeting for the purpose of
considering the removal of a person serving as Trustee if requested in writing
to do so by the holders of not less than 10% of the outstanding shares of the
Trust.

Shares entitle their holders to one vote per share (with proportionate
voting for fractional shares). As used in this Prospectus, the phrase "vote of a
majority of the outstanding shares" of the Fund (or of the Trust) means the vote
of the lesser of: (i) 67% of the shares of the Fund (or the Trust) present at a
meeting if the holders of more than 50% of the outstanding shares are present in
person or by proxy or (ii) more than 50% of the outstanding shares of the Fund
(or the Trust).

In compliance with applicable provisions of the 1940 Act, shares of the
underlying funds owned by the Trust will be voted in the same proportion as the
vote of all other holders of those shares.

PERFORMANCE INFORMATION
The Trust may, from time to time, include quotations of the Funds' yield and
total return in advertisements or reports to shareholders or prospective
investors. Quotations of yield will be based on the investment income per share
earned during a particular 30-day period (including dividends and interest),
less expenses accrued during the period ("net investment income"), and will be
computed by dividing net investment income by the maximum public offering price
per share on the last day of the period. Quotations of total return will be
expressed in terms of the average annual compounded rate of return of a
hypothetical investment in the Fund over periods of 1, 5 and 10 years (up to the
life of such Fund). All total return figures will reflect a proportional share
of Fund expenses on an annual basis, and will assume that all dividends and
distributions are reinvested when paid. Quotations of yield or total return
reflect only the performance of a hypothetical investment in the Fund during the
particular time period on which the calculations are based. Yield and total
return for a Fund will vary based on changes in market conditions and the level
of such Fund's expenses, and no reported performance figure should be considered
an indication of performance which may be expected in the future.

For the period prior to its establishment, the Class has adopted the
performance of the Predecessor Funds. The performance for this period will
reflect the deduction of expenses set forth in the Fund Expense Table. See
"Fund Expenses".

In connection with communicating the Funds' yield and total return to
current or prospective shareholders, the Trust also may compare these figures to
the performance of other mutual funds tracked by mutual fund rating services or
to other unmanaged indexes which may assume reinvestment of dividends but
generally do not reflect deductions for administrative and management costs and
expenses.

For a more detailed description of the methods used to calculate each Fund's
yield and total return, see the SAI.

SHAREHOLDER INQUIRIES
All shareholder inquiries should be directed to your account executive or
financial adviser or call (800) 344-9033 (Toll Free).

DESCRIPTION OF BOND RATINGS
Excerpts from Moody's description of its bond ratings: Aaa -- judged to be
the best quality. They carry the smallest degree of investment risk; Aa --
judged to be of high quality by all standards. Together with the Aaa group they
comprise what are generally known as high grade bonds; A -- possess many
favorable investment attributes and are to be considered as "upper medium grade
obligations"; Baa -- 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;
Ba -- judged to have speculative elements, their future cannot be considered as
well assured; B -- generally lack characteristics of the desirable investment;
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 --
speculative in a high degree; often in default; C -- lowest rated class of
bonds; regarded as having extremely poor prospects.

Moody's also supplies numerical indicators 1, 2 and 3 to rating categories.
The modifier 1 indicates that the security is in the higher end of its rating
category; the modifier 2 indicates a mid-range ranking; and 3 indicates a
ranking toward the lower end of the category.

Excerpts from S&P's description of its bond ratings: AAA -- highest grade
obligations. Capacity to pay interest and repay principal is extremely strong;
AA -- also qualify as high grade obligations. A very strong capacity to pay
interest and repay principal and differs from AAA issues only in a small degree;
A -- regarded as upper medium grade. They have 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 -- 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. This group is the lowest
which qualifies for commercial bank investment. BB, B, CCC, CC -- predominantly
speculative with respect to capacity to pay interest and repay principal in
accordance with terms of the obligations; BB indicates the lowest degree of
speculation and CC the highest.

S&P applies indicators "+", no character, and "-" to its rating categories.
The indicators show relative standing within the major rating categories.

<PAGE>

FUNDMANAGER FUNDS
- ---------------------------------------
THE FIRST FAMILY IN MULTIFUND INVESTING

INVESTMENT ADVISOR
Freedom Capital Management
Corporation
M.D. Hirsch Division
One World Financial Center
New York, NY 10281

DISTRIBUTORS
Tucker Anthony, Incorporated
200 World Financial Center
New York, NY 10281

Sutro & Co., Inc.
201 California Street
San Francisco, CA 94111

FOR GENERAL INFORMATION CALL:
(800) 344-9033

FUNDMANAGER FUNDS
- ---------------------------------------
The First Family in Multifund Investing

Prospectus

JANUARY 29, 1996

o Aggressive Growth Fund

o Growth Fund

o Growth & Income Fund

o Bond Fund

o Managed Total Return Fund
<PAGE>

FM003K
FUNDMANAGER TRUST
One Beacon Street
Boston, Massachusetts 02108
Information: (800) 344-9033 (Toll Free)

STATEMENT OF ADDITIONAL INFORMATION
No-Load Class of Shares
Financial Adviser Class of Shares

FundManager Trust (the "Trust") is an open-end management investment
company consisting of five separate series (the "Funds"). The Funds seek to
achieve their objectives by investing in shares of other open-end investment
companies -- commonly called mutual funds.

AGGRESSIVE GROWTH FUND seeks capital appreciation without
regard to current income.

GROWTH FUND primarily seeks long-term capital appreciation;
current income is a secondary consideration.

GROWTH & INCOME FUND seeks a combination of capital
appreciation and current income.

BOND FUND seeks a high level of current income.

MANAGED TOTAL RETURN FUND seeks high total return (capital
appreciation and current income).

Two classes of shares, the No-Load Class and the Financial Adviser
Class (each a "Class" and collectively the "Classes"), of the Aggressive Growth
Fund, Growth Fund, Growth and Income Fund and Bond Fund are offered for sale.
The Managed Total Return Fund offers only one Class of shares, the Financial
Adviser Class. The No-Load Class is offered for sale at net asset value by
Tucker Anthony Incorporated ("Tucker Anthony") and Sutro & Co. Incorporated
("Sutro") (collectively, the "Distributors") to participants in the FundManager
Advisory Program and the Financial Adviser Class is offered for sale at net
asset value by Signature Broker-Dealer Services, Inc. ("Signature"), Tucker
Anthony and Sutro as an investment vehicle for individuals, institutions,
corporations and fiduciaries. The Financial Adviser Class pays a distribution
fee in connection with the distribution of its shares pursuant to a Distribution
Plan. Prior to May 8, 1995, the Funds were diversified series of the Republic
Funds (the "Predecessor Funds"), also an open-end, management investment
company.

This Statement of Additional Information is not a prospectus and is
only authorized for distribution when preceded or accompanied by the No-Load
Class' Prospectus dated October 1, 1995 and the Financial Adviser Class'
Prospectus dated January 29, 1996 (each a "Prospectus"). This Statement of
Additional Information contains additional and more detailed information than
that set forth in the Prospectus and should be read in conjunction with the
Prospectus, additional copies of which may be obtained without charge by writing
or calling the Trust at the address and information number printed above.

This Statement of Additional Information is dated January 29, 1996

TABLE OF CONTENTS

<S> <C>

Investment Policies ............. 3 Custodian and Transfer Agent...15
U.S. Government Securities .... 3 Fees and Expenses .............15
Bank Obligations .............. 3 Portfolio Transactions ..........16
Commercial Paper .............. 3 Other Information ...............18
Repurchase Agreements ......... 4 Capitalization ................18
Investment Restrictions ......... 4 Voting Rights .................19
Management ...................... 6 Performance Information .......19
Trustees and Officers ......... 6 Independent Auditors ..........22
Investment Adviser ............10 Counsel .......................22
Administrator .................11 Registration Statement ..........23
Distributors ..................12 Financial Statements ............23
Service Organizations..........15

</TABLE>
-2 -

<PAGE>

INVESTMENT POLICIES

Although the Funds invest primarily in the shares of other mutual
funds, they also are authorized to invest for temporary defensive purposes or as
may be considered necessary to accumulate cash for investments or to meet
anticipated redemptions in a variety of short-term debt securities, including
U.S. Treasury bills and other U.S. Government securities, commercial paper,
certificates of deposit, bankers' acceptances and repurchase agreements with
respect to such securities. The following information supplements the discussion
of the investment objectives and policies of the Funds found under "Investment
Objectives" in the Prospectus.

U.S. GOVERNMENT SECURITIES

The Funds may invest in obligations issued or guaranteed by the United
States Government or its agencies or instrumentalities which have remaining
maturities not exceeding one year. Agencies and instrumentalities which issue or
guarantee debt securities and which have been established or sponsored by the
United States Government include the Bank for Cooperatives, the Export-Import
Bank, the Federal Farm Credit System, the Federal Home Loan Banks, the Federal
Home Loan Mortgage Corporation, the Federal Intermediate Credit Banks, the
Federal Land Banks, the Federal National Mortgage Association and the Student
Loan Marketing Association.

BANK OBLIGATIONS

The Funds may invest in obligations of U.S. banks (including
certificates of deposit and bankers' acceptances) having total assets at the
time of purchase in excess of $1 billion. Such banks shall be members of the
Federal Deposit Insurance Corporation.

A certificate of deposit is an interest-bearing negotiable certificate
issued by a bank against funds deposited in the bank. A bankers' acceptance is a
short-term draft drawn on a commercial bank by a borrower, usually in connection
with an international commercial transaction. Although the borrower is liable
for payment of the draft, the bank unconditionally guarantees to pay the draft
at its face value on the maturity date.

COMMERCIAL PAPER

Commercial paper represents short-term unsecured promissory notes
issued in bearer form by bank holding companies, corporations and finance
companies. The commercial paper purchased by the Funds consists of direct
obligations of domestic issuers which, at the time of investment, are: (i) rated
"P-1" by Moody's Investors Service, Inc. ("Moody's") or "A-1" or better by
Standard & Poor's Corporation ("Standard & Poor's"); (ii) issued or guaranteed
as to principal and interest by issuers or guarantors having an existing debt
security rating of "Aa" or better by Moody's or "AA" or better by Standard &
Poor's; or (iii) securities which, if not rated, are, in the opinion of Freedom
Capital Management Corporation, the Funds' investment adviser ("Freedom Capital"
or the "Adviser"), of an investment quality comparable to rated commercial paper
in which the Funds may invest.

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<PAGE>

The rating "P-1" is the highest commercial paper rating assigned by
Moody's and the ratings "A-1" and "A-1+" are the highest commercial paper
ratings assigned by Standard & Poor's. Debts rated "Aa" or better by Moody's or
"AA" or better by Standard & Poor's are generally regarded as high-grade
obligations and such ratings indicate that the ability to pay principal and
interest is very strong.

REPURCHASE AGREEMENTS

The Funds may invest in securities subject to repurchase agreements
with banks or broker-dealers. A repurchase agreement is a transaction in which
the seller of a security commits itself at the time of the sale to repurchase
that security from the buyer at a mutually agreed upon time and price. The
repurchase price exceeds the sale price, reflecting an agreed upon interest rate
effective for the period the buyer owns the security subject to repurchase. The
agreed upon rate is unrelated to the interest rate on that security. The Funds'
investment adviser will monitor the value of the underlying security at the time
the transaction is entered into and at all times during the term of the
repurchase agreement to insure that the value of the security always equals or
exceeds the repurchase price. In the event of default by the seller under the
repurchase agreement, a Fund may have problems in exercising its rights to the
underlying securities and may incur costs and experience time delays in
connection with the disposition of such securities. Repurchase agreements are
considered to be loans under the Investment Company Act of 1940, as amended (the
"1940 Act"), collateralized by the underlying securities.

INVESTMENT RESTRICTIONS

The following investment restrictions are in addition to those
described under "Investment Objectives" and "Investment Policies and
Restrictions" in the Prospectus. The following restrictions may not be changed
with respect to a Fund without the approval of the holders of a majority of that
Fund's outstanding securities. Except that a Fund may invest all of its
investable assets in an open-end investment company with substantially the same
investment policies and restrictions as the Fund, the Fund will not:

1. Purchase or otherwise acquire interests in real
estate, real estate mortgage loans or interests in
oil, gas or other mineral leases, as well as
exploration or development programs, except that a
Fund may purchase securities issued by companies,
including real estate investment trusts, which invest
in real estate or interests therein.

2. Make loans, except that a Fund may purchase and hold
publicly distributed debt securities and it may enter
into repurchase agreements.

3. Invest in securities of any issuer which, together
with any predecessor, has been in operation for less
than three years if, as a result, more than 5% of the
total assets of the Fund would then be invested in
such securities.

-4 -

<PAGE>

4. Purchase the securities of an issuer if, to a Fund's
knowledge, one or more of the Trustees or Officers of
the Trust individually owns more than one half of 1%
of the outstanding securities of such issuer and
together beneficially own more than 5% of such
securities.

5. Sell securities short or invest in puts, calls,
straddles, spreads or combinations thereof.

6. Purchase securities on margin, except such short-term
credits as are necessary for the clearance of
transactions.

7. Purchase or acquire commodities or commodity
contracts.

8. Act as an underwriter of securities.

9. Issue senior securities, except insofar as a Fund may
be deemed to have issued a senior security in
connection with any repurchase agreement or any
permitted borrowing.

10. Purchase warrants, valued at the lower of cost or
market, in excess of 10% of the value of a Fund's net
assets. Included within that amount, but not to
exceed 2% of the value of the Fund's net assets, may
be warrants that are not listed on the New York or
American Stock Exchanges or an exchange with
comparable listing requirements. Warrants attached to
securities are not subject to this limitation.

In addition, as non-fundamental policies, a Fund will not: (i) invest
in securities for the purpose of exercising control over or management of the
issuer; (ii) purchase or otherwise acquire interests in real estate limited
partnerships; (iii) participate in a joint or a joint-and-several basis in any
trading account in securities; (iv) purchase securities of any closed-end
investment company or any investment company which is not registered in the
United States; (v) invest in commodity futures contracts; (vi) invest more than
10% of the Funds' total assets (taken at the greater of cost or market value) in
securities (excluding 144A securities) that are restricted as to resale under
the Securities Act of 1933, as amended ("1933 Act"); (vi) purchase warrants
valued at the lower of cost or market, in excess of 5% of the value of a Fund's
net assets; (vii) purchase the securities of an issuer if one or more of the
Trustees or Officers of the Trust individually owns more than one half of 1% of
the outstanding securities of such issuer and together beneficially own more
than 5% of such securities; (viii) with respect to 75% of the Fund's total
assets, purchase securities of any issuer if such purchase at the time thereof
would cause the Fund to hold more than 10% of any class of securities of such
issuer, for which purposes all indebtedness of an issuer shall be deemed a
single class and all preferred stock of an issuer shall be deemed a single
class, except that futures or option contracts shall not be subject to this
restriction; (ix) purchase securities issued by any investment company except by
purchase in the open market where no commission or profit to a sponsor or dealer
results from such purchase other than the customary broker's commission, or
except when such purchase, though not made in the open market, is part of a plan
of merger or

-5 -

<PAGE>

consolidation; (x) invest more than 15% of the Fund's total assets (taken at the
greater of cost or market value) in (a) securities (including Rule 144A
securities) that are restricted as to resale under the 1933 Act, and (b)
securities that are issued by issuers which (including predecessors) have been
in operation less than three years (other than U.S. Government securities),
provided, however, that no more than 5% of the Portfolio's (Fund's) total assets
are invested in securities issued by issuers which (including predecessors) have
been in operation less than three years. These additional policies may be
changed as to a Fund by the Board of Trustees without shareholder approval.

The underlying funds in which a Fund invests may, but need not, have
the same investment policies as a Fund. Although all of the Funds may, from time
to time, invest in shares of the same underlying fund, the percentage of each
Fund's assets so invested may vary, and the investment adviser will determine
that such investments are consistent with the investment objectives and policies
of each particular Fund. A Fund is not limited in its investment in underlying
funds affiliated with the Adviser or the Distributors. The Funds may only invest
in underlying funds that have qualified for sale in California or have submitted
an undertaking to adhere to California laws. The investments which may be made
by underlying funds in which the Funds invest, and the risks associated with
those investments, are described in the Prospectus under "Investment Objectives"
and in the Appendix.

MANAGEMENT

TRUSTEES AND OFFICERS

The principal occupations of the Trustees and executive officers of the
Trust for the past five years are listed below. The address of each, unless
otherwise indicated, is 6 St. James Avenue, Boston, Massachusetts 02116.

DEXTER A. DODGE*, TRUSTEE, One Beacon Street, Boston, Massachusetts 02108.
President and Managing Director of the Adviser since 1992. Vice
President of Freedom Distributors Corporation since 1989. Chairman of
the Boards and Chief Executive Officer of Freedom Mutual Fund and
Freedom Group of Tax Exempt Funds since July 1992.

ERNEST T. KENDALL, TRUSTEE, 230 Beacon Street, Boston, Massachusetts 02116.
President, Commonwealth Research Group, Inc., Boston, Massachusetts, a
consulting firm specializing in microeconomics, regulatory economics
and labor economics, since 1978. Trustee of Freedom Mutual Fund and
Freedom Group of Tax Exempt Funds since September 1993.

RICHARD B. OSTERBERG, TRUSTEE, 84 State Street, Boston, Massachusetts 02109.
Member of the law firm of Weston, Patrick, Willard & Redding, Boston,
Massachusetts. Trustee of Freedom Mutual Fund and Freedom Group of Tax
Exempt Funds since September 1993.

CHARLES B. LIPSON, PRESIDENT AND PRINCIPAL EXECUTIVE OFFICER, 200 Liberty
Street, New York, New York 10281. President and founding partner of the
M.D. Hirsch Division of Freedom Capital since January 1995. President
and Chief Operating Officer of the M.D. Hirsch Division of Republic
Asset

-6 -

<PAGE>

Management Corporation from February 1991 to December 1994. Senior Vice
President and Chief Operating Officer of Home Capital Services, Inc.
prior to February 1991.

JOHN J. DANELLO, EXECUTIVE VICE PRESIDENT, One Beacon Street, Boston,
Massachusetts 02108. Vice President-Managing Director, Clerk and
General Counsel of the Adviser since November 1986. President and
Director since February 1989 and Clerk since February 1987 of Freedom
Distributors Corporation. President and Secretary of Freedom Mutual
Fund and Freedom Group of Tax Exempt Funds since July 1992.

PHILIP W. COOLIDGE, EXECUTIVE VICE PRESIDENT, Chairman and Chief Executive
Officer, Signature Financial Group, Inc. ("SFG") since December 1988.
Chairman and Chief Executive Officer, Signature since April 1989.

MICHAEL D. HIRSCH, EXECUTIVE VICE PRESIDENT AND PORTFOLIO MANAGER, 200 Liberty
Street, New York, New York 10281. Chairman, M.D. Hirsch Division of the
Adviser since February 1995. Vice Chairman and Managing Director, M.D.
Hirsch Division of Republic Asset Management Corporation from June 1993
to February 1994. President M.D. Hirsch Investment Management, Inc.
from February 1991 to June 1993. Chief Investment Officer, Republic
National Bank of New York prior to February 1991.

MICHELLE GRAHAM-LYONS, VICE PRESIDENT AND PORTFOLIO MANAGER, 200 Liberty Street,
New York, New York 10281. Senior Vice President of the Adviser since
February 1995. First Vice President, M.D. Hirsch Division of Republic
Asset Management Corporation from June 1993 to February 1994. First
Vice President, M.D. Hirsch Investment Management, Inc. from February
1991 to June 1993. Senior Investment Analyst, Republic National Bank of
New York prior to February 1991.

THOMAS M. LENZ, SECRETARY, Vice President and Associate General Counsel, SFG
since November, 1989; Assistant Secretary, Signature since February,
1991; Attorney, Ropes & Gray prior to November, 1989.

JOHN R. ELDER, TREASURER, Vice President, SFG since April, 1995; Treasurer,
Phoenix Family of Mutual Funds prior to April, 1995; Audit Manager,
Price Waterhouse prior to 1983.

*Trustee may be deemed to be an "interested person" of the Trust as defined by
the 1940 Act.

Messrs. Coolidge, Lenz and Elder are also officers of certain other
investment companies for which Signature or an affiliate is the administrator or
distributor. Mr. Danello is also an officer of certain other investment
companies for which the Adviser or an affiliate is the investment adviser.

-7 -

<PAGE>

COMPENSATION TABLE

Pension or Total
Retirement Compensation
Benefits Estimated From Trust
Aggregate Accrued as Annual and Freedom
Name of Compensation Part of Fund Benefits Upon Complex* Paid
TRUSTEE FROM TRUST EXPENSES RETIREMENT TO TRUSTEES
<S> <C> <C> <C> <C>

Dexter A. none none none none
Dodge

Ernest T. $3,600 none none $20,400
Kendall

Richard B. $3,600 none none $19,700
Osterberg

<FN>
*Freedom Complex refers to both Freedom Mutual Fund and Freedom Group of Tax
Exempt Funds.
</FN>
</TABLE>

Trustees who are not interested persons of the Trust receive an annual
retainer of $3,600 and a fee of $600 for each meeting of the Board of Trustees
or committee thereof attended. The chairperson of each of the Audit and
Contracts Committee receives and additional fee per annum of $600. Mr. Kendall
serves as chairperson of the Audit Committee and Mr. Osterberg serves as
chairperson of the Contracts Committee. The amounts in the above table are based
on the assumption that the Trustees of the Trust will meet four times a year.
Interested persons of the Trust who serve as Trustee receive no fees from the
Trust. All Trustees of the Trust are reimbursed for expenses for attendance at
meetings. The Trust has no bonus, profit sharing, pension or retirement plans.
For the fiscal year ended September 30, 1995, the Trust paid $20,234 in Trustee
fees and expenses.

The Board of Trustees of the Trust has two committees, an Audit
Committee and a Contracts Committee. The Audit Committee assists the Board in
fulfilling its duties relating to accounting and financial reporting practices
and serves as a direct line of communication between the Board and the
independent auditors. The Audit Committee is responsible for recommending the
engagement or retention of the independent accountants, reviewing with the
independent accountants the plan and the results of the auditing engagement,
approving professional services provided by the independent accountants prior to
the performance of such services, considering the range of audit and non-audit
fees, reviewing the independence of the independent auditors, reviewing the
scope and results of procedures for internal auditing, and reviewing the system
of internal accounting control.

The function of the Contracts Committee is to assist the Board in
fulfilling its duties with respect to the review and approval of contracts
between the Trust, on behalf of the Funds, and other entities, including
entering into new contracts and the renewal of existing contracts. The Contracts

-8 -

<PAGE>

Committee considers investment advisory, distribution, transfer agency,
administrative service and custodial contracts and such other contracts as the
Board deems necessary or appropriate for the continuation of operations of the
Funds or the Trust. The Contracts Committee will also be responsible for the
selection and nomination of Trustees who are not "interested persons" within the
meaning of the 1940 Act of the Trust.

All of the Trustees who are not "interested persons" within the meaning
of the 1940 Act of the Trust currently serve on the Audit and Contracts
Committees.

As of January 26, 1996, the Trustees and Officers of the Trust, as a
group, owned less than 1% of the outstanding shares of each Fund. As of the same
date, the following persons owned of record or beneficially 5% or more of a the
outstanding shares of the predecessor shares to the Financial Adviser Class of
shares (percentage is percentage of outstanding shares of a Fund owned by the
shareholder):

AGGRESSIVE GROWTH FUND

Tod & Co., At 150-R CWA, Attn: Operations Dept., P.O. Box 1250, Boston,
MA 02104, 15.6%. Charles Schwab & Co. Inc., 101 Montgomery St., Attn: Reinvest
Acct., San Francisco, CA 94104, 14.5%. Tod & Co., At 150-R, Attn: Operations
Dept., P.O. Box 1250, Boston, MA 02104, 11.9%. Kinco & Co., c/o RNB Securities
Services, One Hanson Place - Lower Level, Brooklyn, NY 11243, 5.5%.

GROWTH FUND

Tod & Co., At 150-R CWA, Attn: Operations Dept., P.O. Box 1250, Boston,
MA 02104, 23.8%. Tod & Co., At 150-R, Attn: Operations Dept., P.O. Box 1250,
Boston, MA 02104, 16.8%. Charles Schwab & Co. Inc., 101 Montgomery Street, San
Francisco, CA 94104, 13.0%. Kinco & Co., c/o Securities Services, One Hanson
Place - Lower Level, Brooklyn, NY 11243, 7.7%.

GROWTH & INCOME FUND

Tod & Co., At 150-R CWA, Attn: Operations Dept., P.O. Box 1250, Boston,
MA 02104, 25.0%. Tod & Co., At 150-R, Attn: Operations Dept., P.O. Box 1250,
Boston, MA 02104, 20.2%. Kinco & Co., c/o Securities Services, One Hanson Place
- - Lower Level, Brooklyn, NY 11243, 9.4%. Charles Schwab & Co. Inc., 101
Montgomery Street, San Francisco, CA 94104, 6.4%.

BOND FUND

Tod & Co., At 150-R CWA, Attn: Operations Dept., P.O. Box 1250, Boston,
MA 02104, 37.5%. Tod & Co., At 150-R, Attn: Operations Dept., P.O. Box 1250,
Boston, MA 02104, 31.1%. Charles Schwab & Co. Inc., 101 Montgomery Street, San
Francisco, CA 94104, 12.0%. Kinco & Co., c/o Securities Services, One Hanson
Place - Lower Level, Brooklyn, NY 11243, 6.4%.

As of September 30, 1995, the Funds' shares have not been divided into
separate classes.

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<PAGE>

The Trust's Master Trust Agreement 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
Trust, unless, as to liability to the Trust or its shareholders, 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 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.

INVESTMENT ADVISER

Pursuant to an Investment Advisory Contract, Freedom Capital Management
is responsible for the investment management of each Fund's assets, including
the responsibility for making investment decisions and placing orders for the
purchase and sale of each Fund's investments directly with the issuers or with
brokers or dealers selected by it in its discretion, including the Distributor.
See "Portfolio Transactions". Freedom Capital Management also furnishes to the
Board of Trustees, which has overall responsibility for the business and affairs
of the Trust, periodic reports on the investment performance of the Funds.
Freedom Capital is a registered investment advisory firm which maintains a large
securities research department, the efforts of which will be made available to
the Funds.

The Adviser is an indirect, wholly-owned subsidiary of John Hancock
Mutual Life Insurance Company ("John Hancock"). John Hancock is a major mutual
life insurance company with subsidiaries which offer property and casualty
insurance and another subsidiary which manages investment companies. John
Hancock's head offices are at John Hancock Place, Boston, Massachusetts.

The investment advisory services of the Adviser to the Funds are not
exclusive under the terms of the Investment Advisory Contract. Freedom Capital
Management is free to render investment advisory services to others.

For its services as investment adviser, Freedom Capital Management
receives from each Fund a fee, payable monthly, at the annual rate of 0.50% of
each Fund's average daily net assets up to $500 million and 0.40% of its average
daily net assets in excess of $500 million. M.D. Hirsch Investment Management,
Inc. ("Hirsch") served as investment adviser to the Predecessor Funds from the
period October 1, 1992 through August 30, 1993 at which time Republic Asset
Management Corporation became investment adviser to the Predecessor Funds. For
the period from October 1, 1992 through September 30, 1993, the Predecessor
Funds of Aggressive Growth Fund, Growth Fund, Growth & Income Fund, Bond Fund
and Managed Total Return Fund paid advisory fees before reimbursements of
$158,714, $109,908, $192,112, $353,201 and $119,602, respectively.

-10 -

<PAGE>

For the period from October 1, 1993 through September 30, 1994,
Republic Asset Management Corporation received advisory fees equal to $185,146,
$151,169, $255,691, $367,423 and $111,391, respectively, from the Predecessor
Funds of Aggressive Growth Fund, Growth Fund, Growth & Income Fund, Bond Fund
and Managed Total Return Fund.

Republic Asset Management Corporation served as investment adviser to
the Predecessor Funds until February 20, 1995 at which time Freedom Capital
Management became investment adviser to the Predecessor Funds. For the period
from October 1, 1994 through February 20, 1995, Aggressive Growth Fund, Growth
Fund, Growth & Income Fund, Bond Fund and Managed Total Return Fund paid
advisory fees before reimbursements of $74,692, $66,712, $99,675, $151,276 and
$32,185, respectively to Republic Asset Management Corporation. For the period
from February 21, 1995 through September 30, 1995, Aggressive Growth Fund,
Growth Fund, Growth & Income Fund, Bond Fund and Managed Total Return Fund paid
advisory fees before reimbursements of $109,055, $89,497, $130,491, $216,909 and
$44,931, respectively to Freedom Capital Management.

The Investment Advisory Contract will continue in effect from year to
year provided such continuance is approved annually (i) by the holders of a
majority of the outstanding voting securities of a Fund or by the Board of
Trustees and (ii) by a majority of the Trustees who are not parties to such
Contract or "interested persons" (as defined in the 1940 Act) of any such party.
The Contract may be terminated with respect to a Fund on 60 days' written notice
by either party to the Contract and will terminate automatically if assigned.

Mr. Osterberg, a Trustee of the Trust, is a member of the law firm of
Weston, Patrick, Willard & Redding, which has retained the Adviser from time to
time to provide investment advisory consulting services for clients of such
firm.

ADMINISTRATOR

The Board of Trustees of the Trust has approved an Administrative
Services Contract between the Trust and Signature pursuant to which Signature
will serve as Administrator of the Trust and each Class of shares of each of the
Funds. In this capacity, Signature will provide certain management and
administrative services to the Funds.

The management and administrative services necessary for the operation
of the Trust provided by the Administrator include among other things: (i)
preparation of shareholder reports and communications; (ii) regulatory
compliance, such as reports to and filings with the Securities and Exchange
Commission ("SEC") and state securities commissions; and (iii) general
supervision of the operation of the Trust, including coordination of the
services performed by the Trust's investment adviser, transfer agent, custodian,
independent auditors, legal counsel and others. In addition, the Administrator
furnishes office space and facilities required for conducting the business of
the Trust and pays the compensation of the Trust's officers, employees and
Trustees affiliated with the Administrator. For these services, the
Administrator receives from each Class of each Fund a fee, payable monthly, at
the annual rate of 0.25% of the first $50 million of that Fund's average daily
net assets

-11 -

<PAGE>

attributable to the Class, 0.20% of the next $50 million of such assets, and
0.15% of such assets in excess of $100 million.

For the period from October 1, 1992 through September 30, 1993,
Signature received $79,357, $54,954, $96,056, $166,280 and $59,801,
respectively, from the Predecessor Funds of Aggressive Growth Fund, Growth Fund,
Growth & Income Fund, Bond Fund and Managed Total Return Fund. For the period
from October 1, 1993 through September 30, 1994, Signature received $92,971,
$74,730, $125,890, $175,110 and $55,845, respectively, from the Predecessor
Funds of Aggressive Growth Fund, Growth Fund, Growth & Income Fund, Bond Fund
and Managed Total Return Fund. For the period from October 1, 1994 through
September 30, 1995, Signature received $91,873, $78,104, $115,086, $172,206 and
$38,540, respectively, from Aggressive Growth Fund, Growth Fund, Growth & Income
Fund, Bond Fund and Managed Total Return Fund. As of September 30, 1995, the
Funds' shares had not been divided into classes.

The Administrative Services Contract between the Trust and Signature
has been approved, and is subject to annual approval, by the Board of Trustees
and by the Trustees who are neither "interested persons" nor have any direct or
indirect financial interest in the operation of the Administrative Services
Contract, by vote cast in person at a meeting called for the purpose of voting
on the Administrative Services Contract. The Board of Trustees and the Trustees
who are not "interested persons" and who have no direct or indirect financial
interest in the operation of the Administrative Services Contract last voted to
approve the Administrative Services Contract at a meeting held on June 13, 1995.
The Administrative Services Contract is terminable with respect to a Class or
Fund without penalty, at any time, by vote of a majority of the Trustees who are
not "interested persons" of the Trust and who have no direct or indirect
financial interest in the operation of the Administrative Services Contract,
upon not more than 60 days' written notice to the Administrator or by vote of
the holders of a majority of the shares of that Class or Fund or upon 15 days'
notice by the Administrator. The Administrative Services Contract will terminate
automatically in the event of its assignment.

DISTRIBUTORS

The Board of Trustees of the Trust has approved a Distribution Contract
between the Trust and each of Signature, Tucker Anthony and Sutro pursuant to
which such distributors provide shareholder servicing services and distribute
the Financial Adviser Class of shares of each of the Funds. The Board of
Trustees of the Trust has also approved a Distribution Contract between the
Trust and each of Tucker Anthony and Sutro pursuant to which such distributors
provide shareholder servicing services and distribute the No-Load Class of
shares of each of the Aggressive Growth Fund, Growth Fund, Growth & Income Fund
and Bond Fund.

The distributors are not obligated to sell any specific amount of
shares. Under a Distribution Plan (the "Plan") adopted by the Financial Adviser
Class of the Aggressive Growth Fund, Growth Fund, Growth & Income Fund, Bond
Fund and Managed Total Return Fund, each such Fund may reimburse the
distributors monthly (subject to a limit of 0.50% per annum of the Fund's
average daily net assets attributable to the Financial Adviser Class) for the
sum of (a) direct costs and expenses incurred by the distributors in connection
with advertising and

-12 -

<PAGE>

marketing of the Financial Adviser Class of shares and (b) payment of fees to
one or more broker-dealers or other organizations (other than banks) for
services rendered in the distribution of the Financial Adviser Class of shares
and for the provision of personal services and account maintenance services with
respect to Fund shareholders, including payments in amounts based on the average
daily value of Fund shares owned by shareholders in respect of which the
broker-dealer or organization has a relationship. The fees and reimbursements
paid by a Fund to the distributors and the administrator may equal up to 0.75%
of the Fund's average daily net assets attributable to the Financial Adviser
Class of shares, of which up to 0.25% of a Fund's average daily net assets
attributable to the Financial Adviser Class may be paid for the provision of
services. For the fiscal years ending September 30, 1993, 1994 and 1995 all
payments made to broker-dealers or other organizations under the Predecessor
Funds' Distribution Plan were for services rendered in the distribution of
shares of the Predecessor Funds or the provision of personal services and
account maintenance services with respect to Fund Shareholders. Any payment by a
distributor or reimbursement of a distributor by a Fund made pursuant to the
Plan is contingent upon Board of Trustees approval. A report of the amounts
expended pursuant to the Plan, and the purposes for which such expenditures were
incurred, must be made to the Board of Trustees for its review at least
quarterly.

The Plan permits, among other things, payment by the Funds of the costs
of preparing, printing and distributing prospectuses and of implementing and
operating the Plan. The Plan also permits the distributors to receive and retain
brokerage commissions with respect to portfolio transactions for mutual funds in
the Funds' portfolios, including funds which have a policy of considering sales
of their shares in selecting broker-dealers for the execution of their portfolio
transactions. In addition, Signature may receive dealer reallowances (up to a
maximum of 1% of the public offering price) and/or distribution payments on
purchases by the Funds of mutual funds which are sold with a sales load and/or
which have a distribution plan.

The Plan provides that it may not be amended to increase materially the
costs which a Fund may bear pursuant to the Plan without shareholder approval
and that other material amendments of the Plan must be approved by the Board of
Trustees, and by the Trustees who are neither "interested persons" (as defined
in the 1940 Act) of the Trust nor have any direct or indirect financial interest
in the operation of the Plan or in any related agreement, by vote cast in person
at a meeting called for the purpose of considering such amendments. While the
Plan is in effect, the selection and nomination of the Trustees of the Trust has
been committed to the discretion of the Trustees who are not "interested
persons" of the Trust. The Plan has been approved, and is subject to annual
approval, by the Board of Trustees and by the Trustees who are neither
"interested persons" nor have any direct or indirect financial interest in the
operation of the Plan, by vote cast in person at a meeting called for the
purpose of voting on the Plan. The Board of Trustees and the Trustees who are
not "interested persons" and who have no direct or indirect financial interest
in the operation of the Plan last voted to approve the Plan at a meeting held on
June 13, 1995. The Trustees considered alternative methods to distribute the
Financial Adviser Class of shares of the Funds and to reduce the Financial
Adviser Class' per share expense ratios and concluded that there was a
reasonable likelihood that the Plan will benefit the Class and its shareholders.
The Plan was approved by the sole

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<PAGE>

shareholder of the Financial Adviser Class of each Fund on May 5, 1995. The Plan
is terminable with respect to the Financial Adviser Class or a Fund at any time
by a vote of a majority of the Trustees who are not "interested persons" of the
Trust and who have no direct or indirect financial interest in the operation of
the Plan or by vote of the holders of a majority of the shares of that Fund or
Class.

During the fiscal year ended September 30, 1995, the Funds spent,
pursuant to their 12b-1 plans, the following amounts on:

Managed
Aggressive Growth & Total
Growth Growth Income Bond Return
Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C>

Advertising $1,512 $1,561 $ 1,797 $ 3,051 $ 641

Printing and
mailing of
prospectuses to
other than current 8,585 7,786 10,206 16,383 3,511
shareholders

Compensation to
underwriters -- -- -- -- --

Compensation to
broker-dealers 78,639 48,153 65,082 96,646 37,061

Compensation to
sales personnel 60,474 49,330 71,948 127,151 25,755

Interest, carrying
or other financing
charges -- -- -- -- --

Other marketing
expenses 23,282 34,081 60,334 96,326 8,164

Total $ 172,765 $140,911 $209,367 $339,557 $75,132

Total as a
percentage of
average daily net
assets during 0.47% 0.45% 0.45% 0.46% 0.49%
period

</TABLE>

As of September 30, 1995, the Funds' shares have not been divided into
classes.

Signature is a wholly-owned subsidiary of SFG. The principal business
address of SFG is 6 St. James Avenue, Boston, Massachusetts 02116. Tucker
Anthony is an indirect subsidiary of John Hancock. Sutro is an indirect
wholly-owned subsidiary of John Hancock. SFG, John Hancock and their affiliates
currently provide administration and distribution services for other registered
investment companies. The Funds will not invest in these funds or in any other

-14 -

<PAGE>

fund which may in the future be affiliated with SFG, John Hancock or any of
their affiliates.

SERVICE ORGANIZATIONS

Pursuant to the Plan, the Trust also contracts with banks, trust
companies, broker-dealers (other than the distributors) or other financial
organizations ("Service Organizations") to provide certain administrative
services for each Fund's Financial Adviser Class of shares. Services provided by
service organizations may include, among other things, providing necessary
personnel and facilities to establish and maintain certain shareholder accounts
and records; assisting in processing purchase and redemption transactions;
arranging for the wiring of funds; transmitting and receiving funds in
connection with client orders to purchase or redeem shares; verifying and
guaranteeing client signatures in connection with redemption orders, transfers
among and changes in client-designated accounts; providing periodic statements
showing a client's account balances and, to the extent practicable, integrating
such information with other client transactions; furnishing periodic and annual
statements and confirmations of all purchases and redemptions of shares in a
client's account; transmitting proxy statements, annual reports, and updating
prospectuses and other communications from the trust to clients; and such other
services as the trust or a client reasonably may request, to the extent
permitted by applicable statute, rule or regulation. The distributors and the
adviser will not be service organizations or receive fees for servicing.

FUNDMANAGER ADVISORY PROGRAM

Shares of the no-load class of shares will be offered to participants
in the fundmanager advisory program who receive, for an advisory fee at a
maximum annual rate based upon a percentage of assets invested, certain
services, including asset allocation recommendations with respect to the funds
based on an evaluation of their investment objectives and risk tolerances.

CUSTODIAN AND TRANSFER AGENT

Pursuant to a custodian agreement and a transfer agency and service
agreement between the Trust and the Investors Bank & Trust Company ("IBT"), IBT
provides custodial, fund accounting, transfer agency, dividend disbursing and
shareholder servicing services to the Trust and each of the Funds. The principal
business address of IBT is 24 Federal Street, Boston, Massachusetts 02110.

FEES AND EXPENSES

Certain of the states in which the shares of the Funds are qualified
for sale impose limitations on the expenses of the Funds. If, in any fiscal
year, the total expenses of a Fund or Class (excluding taxes, interest, expenses
under the Plan, if applicable) brokerage commissions and other portfolio
transaction expenses, other expenditures which are capitalized in accordance
with generally accepted accounting principles and extraordinary expenses, but
including the advisory and administrative fees) exceed the expense limitations
applicable to the Fund or Class imposed by the securities regulations of any
state, the Administrator and the Adviser each will reimburse that Fund for 50%
of the excess. Pursuant to an undertaking with a state securities commission,
the effective limitation on an annual basis with respect to a Fund or Class is

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<PAGE>

expected to be 2.5% on the first $30 million of the Fund's or Class's net
assets, 2.0% on the next $70 million of such assets and 1.5% on any excess above
$100 million.

Except for the expenses paid by the Adviser, the Administrator and the
Distributors, the Funds bear all costs of their operations.

PORTFOLIO TRANSACTIONS

As part of its obligations under the investment advisory contract, the
Adviser places all orders for the purchase and sale of portfolio investments for
the Funds' accounts with brokers or dealers selected by it in its discretion,
including the distributors. In selecting a broker, the Adviser considers a
number of factors including the research and other investment information
provided by the broker. With respect to purchase of certain money market
instruments, purchase orders are placed directly with the issuer or its agent.
With respect to purchases of load fund shares, the Adviser directs substantially
all of the Funds' orders to a Distributor, which may, in its discretion, direct
the order to other broker-dealers in consideration of sales of the Funds'
shares, except where the direction to another broker-dealer would increase the
dealer reallowance paid by a Fund above 1% of the public offering price. Where a
Distributor acts as the dealer with respect to purchases of load fund shares, it
retains dealer reallowances on those purchases up to a maximum of 1% of the
public offering price of the shares. A Distributor is not designated as the
dealer on any sales where such reallowance exceeds 1% of the public offering
price.

When appropriate, the Funds may arrange to be included within a class
of investors entitled to a reduced sales charge and they purchase load fund
shares under letters of intent, rights of accumulation and cumulative purchase
privileges, which permit them to obtain reduced sales charges for larger
purchases of shares. Therefore, in a majority of cases, the sales charges paid
by a Fund on a load fund purchase do not exceed 1% of the public offering price.

The Distributors may also assist in the execution of fund portfolio
transactions to purchase underlying fund shares for which they may receive
distribution payments from the underlying funds or their underwriters in
accordance with the distribution plans of those funds. The distributors will
refund to an underlying fund any payment which alone or when added to other
payments received from that fund is in excess of 1% of the public offering price
of the fund at the time the payment is made. In providing execution assistance,
a Distributor receives orders from the Adviser; places them with the underlying
fund's distributor, transfer agent or other person, as appropriate; confirms the
trade, price and number of shares purchased; and assures prompt payment by the
fund and proper completion of the order.

The Distributors may retain brokerage commissions on portfolio
transactions of mutual funds held in the Funds' portfolios, including Funds
which have a policy of considering sales of their shares in selecting
broker-dealers for the execution of their portfolio transactions. Payment of
brokerage commissions to the Distributors is not a factor considered by the
Adviser in selecting an underlying fund for investment.

-16 -

<PAGE>

Under the 1940 act, a mutual fund must sell its shares at the price
(including sales load, if any) described in its prospectus, and current rules
under the 1940 Act do not permit negotiations of sales charges. Therefore, the
Funds currently are not able to negotiate the level of the sales charges at
which they purchase shares of load funds, which may be as great as 8.5% of the
public offering price (or 9.29% of the net amount invested). Nevertheless,
certain factors tend to keep the Funds' portfolio transaction costs as low as
possible, including (1) the Funds, to the extent feasible, purchase shares of
"no-load" funds which can be acquired without incurring a sales charge or
utilizing a broker to effect the transaction; (2) the Funds, to the extent
feasible, take advantage of exchange or conversion privileges offered by many
"families" of mutual funds; and (3) insofar as the Funds invest in U.S.
Government and other money market securities, the transaction costs should be
minimal.

Under certain circumstances, a sales charge incurred by a Fund in
acquiring shares of an underlying fund may not be taken into account in
determining the gain or loss on the disposition of the shares acquired. If
shares are disposed of within 90 days from the date they were purchased and if
shares of a new underlying fund are subsequently acquired without imposition of
a sales charge or imposition of a reduced sales charge pursuant to a right
granted to the Fund to acquire shares without payment of a sales charge or with
the payment of a reduced charge, then the sales charge paid upon the purchase of
the initial shares will be treated as paid in connection with the acquisition of
the new underlying fund's shares rather than the initial shares.

SALES CHARGES PAID BY PREDECESSOR FUNDS
FOR FISCAL YEAR ENDED SEPTEMBER 30, 1993

Sales Charges
Gross Sales Paid to Percent of
CHARGES DISTRIBUTOR TOTAL

<S> <C> <C> <C>
Aggressive Growth Fund $10,975 $8,759 79.81%

Growth Fund 2,500 1,800 72.00%

Growth & Income Fund 0 0 N/A

Bond Fund 0 0 N/A

Managed Total Return Fund 1,000 600 60.00%

</TABLE>

Total sales charges and total dollar amount of transactions on which
sales charges were paid during the fiscal year ended September 30, 1993 were
$14,475 and $1,647,500, respectively, of which the distributor received 77.09%.

SALES CHARGES PAID BY PREDECESSOR FUNDS
FOR FISCAL YEAR ENDED SEPTEMBER 30, 1994

<TABLE>
<CAPTION>
Sales Charges
Gross Sales Paid to Percent of
CHARGES DISTRIBUTOR TOTAL

<S> <C> <C> <C>
Aggressive Growth Fund $22,625 $17,403 76.92%

Growth Fund 0 0 N/A

Growth & Income Fund 0 0 N/A

Bond Fund 0 0 N/A

Managed Total Return Fund 300 225 75.00%
</TABLE>

Total sales charges and total dollar amount of transactions on which
sales charges were paid during the fiscal year ended September 30, 1994 were
$22,925 and $2,635,000, respectively, of which the distributor received 76.89%.

- 17 -
<PAGE>

SALES CHARGES PAID BY FUNDS
FOR FISCAL YEAR ENDED SEPTEMBER 30, 1995

<TABLE>
<CAPTION>
Sales Charges
Gross Sales Paid to Percent of
CHARGES DISTRIBUTOR TOTAL

Aggressive Growth Fund $2,000 $1,500 75.00%

Growth Fund 150 135 90.00%

Growth & Income Fund 0 0 N/A

Bond Fund 0 0 N/A

Managed Total Return Fund 0 0 N/A
</TABLE>

Total sales charges and total dollar amount of transactions on which
sales charges were paid during the fiscal year ended September 30, 1995 were
$2,150 and $230,000, respectively, of which the distributor received 76.05%. As
of September 30, 1995, the Funds' shares have not been divided into classes.

OTHER INFORMATION

CAPITALIZATION

FundManager Trust is a Delaware business trust established under a
Master Trust Agreement dated February 7, 1995. Prior to May 8, 1995, the Funds
were series of the Republic Funds (formerly FundTrust), a Massachusetts business
trust (organized April 22, 1987). Republic Funds was a successor to two
previously-existing Massachusetts business trusts, FundTrust Tax-Free Trust
(organized on July 30, 1986) and FundVest (organized on July 17, 1984, and since
renamed Fund Source). The Trust currently consists of five separately managed
portfolios each offering two classes of shares of beneficial interest (except
Managed Total Return Fund, which only offers a Financial Advisers Class). The
capitalization of the Trust consists solely of an unlimited number of shares of
beneficial interest with a par value of $0.001 each. The Board of Trustees may
establish additional series (with different investment objectives and
fundamental policies) and additional classes of shares at any time in the
future. Establishment and offering of additional series and classes will not
alter the rights of the Trust's shareholders. When issued, shares are fully
paid, nonassessable,

-18 -

<PAGE>

redeemable and freely transferable. Shares do not have preemptive rights or
subscription rights. In liquidation of a Fund, each shareholder is entitled to
receive his pro rata share of the net assets of that Fund.

VOTING RIGHTS

Under the Master Trust Agreement, the Trust is not required to hold
annual meetings to elect Trustees or for other purposes. It is not anticipated
that the Trust will hold shareholders' meetings unless required by law or the
Master Trust Agreement provides that the holders of not less than two thirds of
the outstanding shares of the Trust may remove persons serving as Trustee either
by declaration in writing or at a meeting called for such purpose. The Trustees
are required to call a meeting for the purpose of considering the removal of
persons serving as Trustee if requested in writing to do so by the holders of
not less than 10% of the outstanding shares of the Trust.

PERFORMANCE INFORMATION

The Trust may, from time to time, include quotations of the Funds'
yield and average annual total return in advertisements or reports to
shareholders or prospective investors.

Quotations of yield will be based on a Fund's investment income per
share earned during a particular 30-day period, less expenses accrued during the
period ("net investment income") and will be computed by dividing net investment
income by the maximum offering price per share on the last day of the period,
according to the following formula:

YIELD = 2[(A cdB + 1)6-1]

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

For the 30-day period ending September 30, 1995, the yield of the Bond
Fund was 5.16%. As of September 30, 1995, the shares of the Fund were not
divided into Classes.

Quotations of a Fund's average annual total return will be expressed in
terms of the average annual compounded rate of return of a hypothetical
investment in such Fund over periods of 1, 5 and 10 years (up to the life of the
Fund), calculated pursuant to the following formula:

P (1 + T)n = ERV

(where P = a hypothetical initial payment of $1,000, T = the average annual
total return, n = the number of years and ERV = the ending redeemable value of a
hypothetical $1,000 payment made at the beginning of the period). All total
return figures will reflect the deduction of Fund expenses on an annual basis
and will assume that all dividends and distributions are reinvested when paid.

-19 -

<PAGE>

For the period prior to its establishment, each Class of shares of each
Fund will adopt the performance of the Funds and their predecessors. The
performance for this period will reflect the deduction of the Class's charges
and expenses. The total return for the Funds for the periods ended September 30,
1995 were as follows:

<TABLE>
<CAPTION>
1-Year 5-Year Total 10-Year
Total Return Total Return
Return (Average Annual) (Average Annual)
<S> <C> <C> <C>
Aggressive Growth Fund 24.3 17.1 12.6

Growth Fund 22.6 15.9 12.0

Growth & Income Fund 23.3 15.3 11.6

Bond Fund 10.4 8.6 7.3*

Managed Total Return Fund 14.3 10.6 8.9

<FN>
*TOTAL RETURN FROM COMMENCEMENT OF OPERATIONS AUGUST 4, 1998.
</FN>
</TABLE>

As of September 30, 1995, the shares of the Fund were not divided into
classes.

Quotations of yield and total return will reflect only the performance
of a hypothetical investment in a Fund during the particular time period shown.
Yield and total return for a Fund will vary based on changes in market
conditions and the level of such Fund's expenses, and no reported performance
figure should be considered an indication of performance which may be expected
in the future.

In connection with communicating its performance to current or
prospective shareholders, the Funds also may compare these figures to the
performance of other mutual funds tracked by mutual fund rating services or to
unmanaged indices which may assume reinvestment of dividends but generally do
not reflect deductions for administrative and management costs. Evaluations of
the Funds' performance made by independent sources may also be used in
advertisements concerning the Funds. Sources for the Funds' performance
information could include the following:

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

BOTTOM LINE, a bi-weekly newsletter which periodically reviews mutual funds and
interviews their portfolio managers.

BUSINESS WEEK, a national business weekly that periodically reports the
performance rankings and ratings of a variety of mutual funds investing abroad.

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

CNBC, a cable financial news television station which periodically reviews
mutual funds and interviews portfolio managers.

-20 -

<PAGE>

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

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

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

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

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

MORNINGSTAR, INC., a publisher of financial information and mutual fund
research.

MUTUAL FUNDS MAGAZINE, a magazine for the mutual fund investor which frequently
reviews and ranks mutual funds and interviews their portfolio managers.

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

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

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

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

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

VALUE LINE, a bi-weekly publication that reports on the largest 15,000 mutual
funds.

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

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

WORTH MAGAZINE, a monthly magazine for the individual investor which frequently
reviews and ranks mutual funds and interviews their portfolio managers.

In addition, the Trust may also provide in its communications to
current or prospective shareholders a listing of those open-end investment
companies and mutual fund complexes or the respective funds included in the
funds' portfolio holdings. these shall include the following:

-21 -

<PAGE>

FUND COMPLEXES - The AIM Family of Funds; The American Funds Group; Dodge & Cox
Investment Managers; Fidelity Investment; First Pacific Advisors, Inc.; Franklin
Custodian Funds, Inc.; Franklin Templeton Group; Friess Associates, Inc.; The
Gabelli Funds; Guardian Investor Services Corporation; Harbor Capital Advisors,
Inc.; Harris Associates, L.P.; Hotchkis & Wiley Funds; IDS Management; Lord
Abbett Family of Funds; Massachusetts Financial Services Company; Miller
Anderson & Sherrerd, LLP; MJ Whitman, Inc.; Mutual Series Fund, Inc.; Neuberger
& Berman Management Inc.; Pacific Financial Research; Pacific Investment
Management Company; Pioneer Funds Distributor; Putnam Funds; The Royce Funds;
Sanford C. Bernstein & Co., Inc.; Socie'te Ge'ne'rale Asset Management Corp.; T.
Rowe Price Associates, Inc.; The Vanguard Family of Funds; Venture Advisors,
L.P.; Waddell & Reed Asset Management Company; Yacktman Asset Management.

FUNDS - AIM Charter Fund; Bond Fund of America; New Perspective Fund; Washington
Mutual Fund; Dodge & Cox Stock; Fidelity Advisor Equity Income; Fidelity Fund;
FPA Capital; FPA Paramount; Franklin U.S. Government Fund; Templeton Growth
Fund; Brandywine; Gabelli Asset; Guardian Park Avenue Fund; Harbor Capital
Appreciation; Oakmark Fund; Hotchkis & Wiley Equity Income; IDS Selective;
Affiliated Fund; Massachusetts Financial Fund; MAS Equity; Third Avenue Value
Fund; Mutual Beacon Fund; Neuberger Guardian; Clipper Fund; Pimco Low Duration;
Pimco Total Return; Pioneer Three; Putnam Income Fund; Royce Premier; Bernstein
Short Duration; Bernstein Intermediate Duration SoGen International; T. Rowe
Price Equity Income; Vanguard Equity Income; Vanguard Fixed-Income Treasury;
Vanguard Wellington Fund; Davis New York Venture; United Bond Fund; Yacktman
Fund.

Investors who purchase and redeem Financial Adviser Class shares of the
Funds through a customer account maintained at a service organization may be
charged one or more of the following types of fees as agreed upon by the Service
Organization and the investor, with respect to the customer services provided by
the service organization: account fees (a fixed amount per month or per year);
transaction fees (a fixed amount per transaction processed); compensating
balance requirements (a minimum dollar amount a customer must maintain in order
to obtain the services offered); or account maintenance fees (a periodic charge
based upon a percentage of the assets in the account or of the dividends paid on
those assets). Such fees will have the effect of reducing the yield and
effective yield of the Fund for those investors. Investors who maintain accounts
with the Trust as transfer agent will not pay these fees.

INDEPENDENT AUDITORS

Ernst & Young LLP serves as the independent auditors for the Trust and
served as the independent auditors for the Predecessor Funds since October 1,
1991. Ernst & Young LLP audits the Funds' financial statements, prepares the
Funds' tax return and assists in filings with the SEC. Ernst & Young LLP's
address is 200 Clarendon Street, Boston, MA 02116. The financial statements for
the funds for each of the four years in the period ended september 30, 1995,
were audited by ernst & young llp who have expressed an unqualified opinion on
those financial statements.

COUNSEL

-22 -

<PAGE>

Goodwin, Procter & Hoar, Exchange Place, Boston, Massachusetts 02109,
passes upon certain legal matters in connection with the shares offered by the
Trust and also acts as counsel to the Trust.

REGISTRATION STATEMENT

The Prospectus and Statement of Additional Information do not contain
all the information included in the Trust's registration statement filed with
the SEC under the 1933 Act with respect to the securities offered hereby,
certain portions of which have been omitted pursuant to the rules and
regulations of the SEC. The registration statement, including the exhibits filed
therewith, may be examined at the office of the SEC in Washington, D.C.

Statements contained in the Prospectus and Statement of Additional
Information as to the contents of any contract or other documents referred to
are not necessarily complete, and, in each instance, reference is made to the
copy of such contract or other documents filed as an exhibit to the registration
statement, each such statement being qualified in all respects by such
reference.

FINANCIAL STATEMENTS

The Funds' current reports to shareholders as filed with the SEC
pursuant to Section 30(b) of the 1940 Act and Rule 30b2-1 thereunder are hereby
incorporated herein by reference. A copy of each such report will be provided
without charge to each person receiving this Statement of Additional
Information.

FM003K

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